Full text of Commercial and Financial Chronicle : December 4, 1952, Vol. 176, No. 5174

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

z

ESTABLISHED 1S39
UNIVERSITY
OF MICHI

DEC

5 195

d.

an

MSIffiJS ADMIRISTSATWH
iiuur

Reg. U. 8. Pat. Office

Volume 176

Number 5174

New York 7, N.

Y., Thursday, December 4, 1952

Price 40 Cents

a

Copy

EDITORIAL

Free

As

Exchange

We See It

The 1953 Business and

And Free Markets

This is normally the
busy season for crystal
balls; the time of the year is here when custom
demands that economists at least—and
quite often

Commodity Outlook

-.

By RENE LEON

! practical businessmen likewise—express
opinions
about the outlook.

as

Laying down

taking,
coming
of business policy,

intense than usual

that;

as

"change in Washington" is scheduled

a

take

world/'

out

to

trade
to

raising living standards through¬

through free exchange and free markets.

rates of

exchange, and

bringing international

exceptional powers of observation are re¬
quired to see that the prevailing sentiment at this
time is
definitely optimistic as to the early future,

No

lower tariffs

urges

the

adding that not much
to

as

seems

to be

trade in balance.

foreign hoarding of U. S.

of

the

For

a

of

gaining

are

depressions
'overworked booms, and there

the

currency

the

page

at

into

election to
It is

one

history when an opposition leader has been
during a time of active business and
virtually full employment. Without
deep

the

dissatisfaction

or

States

our

have

amounts

carry

ments

scientific

up

this

Tax-wise

to us,

We

outcome.

are

will be greatly

of

page

Municipal

sure

that President-elect

Co.

a

THE NATIONAL CITY BANK

Street, New York, N. Y.

Members of Principal
and

Bonds

Los Angeles

•

Boston

•

•

OF NEW YORK

Chicago

<

BROKERAGE SERVICE
Brokers and Dealers

to

Head

Branches

in

India,

Aden,

Exchange

Zanzibar,

York Curb Exchange

Broad St.

New York 4

Paid-up

Capital
Fund

banking

and

Tele. NY 1-T33




10

Denver
.

other Western

Spokane

NATIONAL
OP THE

'

CRY

Cities

BANK

OF NEW

YORK

Central Maine
Power Co.
COMMON

1969

Prospectus

Goodbody

&

Co.

ESTABLISHED 1891

Domihiom Securities
6rporatio?i

115 BROAOWAY
,

NEW YORK

1
,

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

.

.

CHICAGO

Teletype NY 1-702-3

WHltehall 4-3161

request

Members New
other

111

NORTH LA SALLE ST.
,

on

ira haupt & co.
end

MEMBERS NEW YORK STOCK EXCH.

business.

-also undertaken

CHASE

BONDS & STOCKS

CANADIAN DEPARTMENT

Trusteeships and Executorships

Dlffcy 4-7800

and

Somali-

description of

exchange

THE

NEW YORK CITY

I

due

£4,562,500
—£2,281,250
£3,675,000

The Bank conducts every

•

Ceylon,

Tanganyika,

and

50 BROADWAY

Collateral Trust Bonds

Protectorate.

Authorised Capital
Reserve

Pakistan,

Kenya,

Bond Department

1915

CANADIAN

Convertible 4%

25, Bishopsgate,
London, E. C. 2

land

Stock

in

Office:

Uganda,

York

Government

PACIFIC RR

Kenya Colony and Uganda

Burma,

Hardy & Co.

the

ESTABLISHED

Salt Lake City
Los Angeles

Dept. Teletype: NY 1-708

CANADIAN

of INDIA. LIMITED
Bankers

Coast

J.A.H0GLE & CO.

...

Bond

Honolulu

NATIONAL BANK

STOCK and BOND

to

York Stock Exchange
Principal Exchanges -

Broadway, N. Y. • f

WOrth 4-6000
Boston

32

Babs««

Municipal

Members of All Principal Exchanges

Commodity

Security Exchanges

San Francisco

30 BROAD ST., N. Y.

30

York

Direct Private Wires

Wires

Dean Witter

bond department

Members New

aware-

page

State and

SECURITIES
Coast

COMPANY

I Members New

on

address

OIL & MINING

Hawaiian Securities

14 Wall

cor Banks,

Eisenhower

HAnover 2-3700

BANK & TRUST

|

'

WESTERN

Direct Private

i

showed

Dec.

Chemical

j

to catch

election

,

by Mr. Babson at the Annual New
Clients' Conference, New York City, Nov. 20, 1952.

34

economic

is

comforted by the aroused spiritual

18 will be devoted to
Bankers Association of America
currently in prog¬
Besides addresses and committee
reports delivered at the Con¬
vention, the issue will include a 16-page
pictorial section.

Pacific Coast &

Securities
telephone:

and

Hollywood, Fla.

Government,

Stale and

discovery

Continued
♦An

on

the

Presidential

Thus it is

Continued

encouraging to

of

conclusively that the majority of the
C. Babsoe A
voters were aware of the
spiritual
void that was ever widening.
That,
is the most encouraging thing about the election's

A.

are

32

/

Our great need

that, were we to carry out a policy
raising the Dollar's value, the weight of the
debt, in-

of

of

political
have been

hardly

spiritually.,

The

to function.
They must
meet the payments on
loans, mort¬
instalment purchases, etc., if they are to remain

solvent.

is most

mass

welfare.

to

they must service their Federal, State
and Municipal debts if these
govern¬

Rene Leon

could

part

nation's

ing the fact that we have advanced
greatly during recent years in both

The people of

must

the

citizens, such

see that
people have put
spiritual considerations above ma¬
terial desires. For there is no
deny***"*

debts—public

now

bankrupt.

go

It

the

price structure is

$500 billion.

United

burden

gages,

our

to

the

on
our

brought about.

the recent

on

rebuke

leaders

pres¬

who

many

total of all

over

f

Not:

prove

our

a

occasions

rare

power

m

I), S.

the Presidency is

of those

~

set-up, but it would

IBA CONVENTION ISSUE
SHORTLY—The "Chronicle"
Annual Convention of the Investment
ress

the almost to-

reduction

private—which

the

great deal of
on

voted

former

wage

key to

sum

well

Republican Admin¬

Continued

would

penalize

and

it is that there is rather wide
agreelent that
danger exists of another depression
>rior to the end of the first
a

its

significant event.

in political

a

The

re-

so

So it is that

to

contracted debts based
level of prices.

brought

years.

most

v

cost

living.

the rank and file of

also

the New Deal to flower and fastened
the terrible
burdens of its nonsense
upon us for two decades.

istration in 20

Dollar

ent union-labor

knember that the 1920's induced the
1930's, and
that the depression of the
early 'Thirties

And

General Eisenhower's

notes.

well-nigh impossible under

of

spawn

those who

of

Calls attention

tality. of all costs of production.

fully cognizant

are

the

alone

sight

are

of

means

Predicts high level of employment will be main-

wages which make up

are wont to say,
evidence is yet in

time wiser heads

fact

as

but looks for decline in iron and steel prod¬

Dollar would entail the reduction of

they

that

same

ing.

monetary policy
purchasing
sharp reduction of prices in terms of the

restoration

suggest any definite date of its termination.

lAt the

Sees
arma¬

tained, but looks for from 3% to 5% decrease in

surer

power.

seems to be a
disposition on the
good many to extend their confidence

"The boom

Objects

road to national disaster could
be taken than
to make the
objective of our fiscal and

and that there

arther in time.

stocks.

aircraft,

as

ucts, lumber, railroad equipment, and residential build¬

creating imbalance in

as

improvement in such industries

natural gas,

Urges, instead, developing larger world

price fixing of currencies

to

£
Ih
lead way all the
time,"

common

ments, air conditioning, electronics, air transportation and

cost of

No

a

moderate decline in busi¬

some

customary.

part of

a

activity and mixed prices for

ness

N

taxpayer with

place shortly after the turn of the year, and
among those who are specially interested in mak¬
ing that change permanent there seems to be a
disposition to look somewhat farther ahead than
is

Mr. Babson forecasts in 1953

(2) systematic reduction of our
Leon states "it is not rational to saddle
the American

year is rather
result of the fact

a

policy:

(1)
existing levels,
public debts, Mr.

and

months demand in the way
j Perhaps, activity of this sort this
more

as

ARTHUR C. BABSON*

Vice-President, Babson's Reports, Inc.

/

twin objectives of fiscal
the stabilization of our
price structure at

It is a period of stock
it were, and of estimation of
what the

I

By

Princeton, N. J.

,v,

Teletype NY 1-2703

Telephone: Enterprise 1320

The Commercial and Financial Chronicle

2

.

.

Thursday, December 4, 19

.

(2114)

The

POSITION and

WE

IN

TRADE

/

Security I Like Best

in the investment

Rights & Stock

they to be regarded, as an

are

Rights & Stock

Consolidated Gas of Baltimore
Davison Chemical

Rights & Stock

Magma Copper

Rights & Stock

& Paper

Rights & Stock
Prospectuses

available

entire

in

oil

was

ward.

there

fact

the

Teletype NY 1-583

North Dakota.
As

Stock Exchange

Exchange

YORK

NEW

REctor

drilling

5

barrels

are

time

at the present

oil

American Furniture

deep

much

are

Dan River Mills

STRADER,TAYLOR & CO., Inc.
I

Lynchburg, Va.

I

LY 77

LAMBORN & CO., Inc.
STREET

in six, with
drilling needed for

North

Refined

—

it

As

Steel

Car

oil-producing

land

is

is- leased

land

to

a

dividend

production

any

the

H. Hentz & Co.
Members

oil royalty. It

Chicago
New

Inc.

Exchange,

Commodity

Board

Orleans

.

Exchange

Cotton

York

New

Exchange v

Curb

York

New

The

of

Cotton

.

land

to

a

Trade

Exchange

pays

other

Exchanges

made

called

an

and

keep

or

Exchange Bldg.

NEW YORK 4, N. Y.
' DETROIT

the

holder




to

delay

that

1 Issued

1948

new

of

cars

under

of

the

1952

actual

drilling

management

this

on

after

ter.

In

was

the

land

assumed

is

holder

of

the

drilled, all costs

by
oil

the

lessee.

royalty

The

has

a

about $700,-

taxes, in the last quar¬
this
same
statement it

early

new

was

Under

policies and

were

formulated.

change in policy is diversi¬
of
production
through

The pri¬

fication

a

meeting to be

December,

in

consid¬
divioutside

eration would be given to a

payment

sources

These policies naturally have

it

a

long and arduous task and

speaks

ment

that

well

for

the

manage¬

each and every acquis

sition and expansion

has added to

Phila. & Trenton RR. Stoc

Lehigh Valley RR.
Annuity 4y2'& &

6's

Penna.-N. ,Yi Canal RR.
4y2's & S's 1969

Samuel K.
Members

Phillips &.
Stock

Phila.-Bait.

Pennsylvania Bldg.,

N. Y. P

Teletype
pri

Exchai

Philadelphi

CQrtlandt 7-6

u.o

believe will be 20c quar¬

which

terly, equivalent to an initial 80c
annual payment.
Next

year

should

be

a

banner

for Pressed Steel Car Com¬

year

per

plant capacities and increase prof¬

Units

Monday, Nov. 24, 1952,

stated that at

held

1954

Leeds & Lippincott

(9) months of

that they would earn
000

Pocono Hotels Units

A. M. Greenfield 5s

company

released

—

plans

its.

Vegetable

Keyes Fibre Co.

showed earn¬
ings of $924,000. It is estimated
by the President, in a statement

oil

the

Kalamazoo

78,555

.

For. the first nine

all

companies

company.

leadership,

Grinnell Corp.

1,583,430

dend

In

& Pa

Southern Advance Bag

of

JLoans against sales of freight
Equitable Life Plan.

Company.

famine."

injected into the

been

PITTSBURGH

GENEVA, SWITZERLAND

or

TRAD1NG MARKETS

acquired with Axelson Company.
to
acquire Chicago Steel Tank

10 years*

another year.

are

equipment

"feast

fi/imafe hi'Vebio
403 W. 8th ST. LOS ANGELES -Tll-

$5,365,178

$50 par)__

conv.

stipulated

a

to

mission

If
CHICAGO

either

harry and myron ku

.

*Loan

similar

mary

sell it.

generally leases the

royalty and essentially gives per¬
N. Y. Cotton

railroad

IN SOUTHERN CALIF0RNI

Stock—

period of acquisition of various manufac¬ pany. Conservative
In addition turing units not in the rail equip¬ place the net sales
down
payment, the lessee ment field, and also a further pany at $80,000,000
come
before taxes
an annual amount for each extension of products in these ac¬
and after taxes of
leased.
This
payment
is quired divisions to consume total
2.08
for

time, often

acre
And

lessee

to

is represented by a
is given to the

deed

lessor who may
Exchange

Stock

York

New

land

OF SEASONED C0MPANIF

Shares

(41/2%

back¬

been

______

Com. Stk. ($1 par value)

.

The

one-eighth to the

and

lessee

lessor. This one-eighth is
mineral

\

this

from

divided seven-eighths

shall be

1856

4^2

Philadelphia 3, Pa.

ground of this
company
has
to

BLOCKS OF

Parchment

..

re¬

turn.

._

Debt

Preferred

imminent

The lease provides that

company.

New York
Tel. NY 1-19

Tel. DIgby 9-1550

BOENNING & CO

fair¬

and

loans

Total

apprecia¬

ly

Oetjen

Security Dealers Ass

150 Broadway

$3,500,000*
337,9051
1,537,273?

notes._

term

Bank

possi¬

tion

Henry

Y.

N.

Members

is as follows:

Short

10 %'

at

ital

spective driller, often a large oil

capitalization

present

company

V. Loan:

bilities of cap¬

pro¬

request

on

Debt

offers

lease.
The

Established

The

Company,
currently sell¬

under

now

manufacturers,

setup the building of freight cars
in the year 1953 will amount to
less than 50% of total net sales.

Car

leasing during the last

Prospectus

Rgts.

as

present nucleus of Pressed Steel
Car Company. Under this present

Company

More than 60 large oil
companies have leased acreage.
It is believed 90% of all potential

DIgby 4-2727

such

a

two years.

Exports—Imports—Futures

speculation.

ing

wholesale

Liquid

American

nent

the
Pressed

&

Gebsten & Frenke

with Kop-

representative of heavy
industrial equipment for promi¬

to

Partner, MeGiimis & Co., N. Y. City

addi¬

Preferred & Rgts.

and sales

Members, New York Stock Exchange

prospects of finding oil in
Dakota
have resulted
in

The

North

—

wells

Dakota appear

interesting

drilling.

Raw

as

The.above companies,

price of royalties low
oil-producing
300

Rgts.

&

1967

This

Oct. 9, 1952.

on

pel (Philippines). Inc., an old line
subsidiary which is a distributor

/

great distances. This
promising for wildcat

by

makes

SUGAR

the

off

Vi's

latter

specialist in railroad secu¬
tional
more
rities, our attention is often called
exact
defining of geologic age. to an
interesting situation in a
Amerada's discovery was in the
kindred industry. It is our consid¬
Devonian.
ered
opinion
It now appears that the Will¬
that the com¬
mon
iston
Basin may contain many
stock, of
small or even large -pools sepa¬
Pressed
Steel
rated

5, N. Y.

it

write

may

3

the

least,

from

far

*

becomes

abandoned,

offices

Manufacturing Company

acquired

was

HENRY OETJEN

in four known zones

found

possibly

and

is

estimated

of

an

a

expensive in these areas. In the
Williston Basin, oil has already
been

be

to

considerably less

result, drilling is

Life Insurance Co. of Va.

As

sections.

eastern

and

tral

an

sections

of the state
shallower' in the cen¬

in the western section

Commonwealth Natural Gas

YORK

but

Last,

Caterpillar Tractor, John
be drilled in
1.952 and ihe tax
Deere,
Ingersoll-Rand, Westingadvantages inherent in this sit¬ Bouse International, Clark Equip¬
uation, royalties in the quieter ment, Hyster and others form the

turn

Sands thai are 10,000 feet

the

areas,

well

2,500,000,000 barrels, may
out to be conservative.

at

Camp Manufacturing

TWX

June, 1951, the Chicago Steei
acquired.

Axelson

in relation to other

barrels a day by 1960.
The oil potential, now estimated

Bassett Furniture Industries

and

land

the

and

iv.

Common

capacity and has a
backlog of business.

Tank Company was

receives

holder

the

investor

With

and 200,000

WALL

angle, royalties are

100% tax loss.

a

a

production will increase to 10,000
barrels a day by the end of 1952

Trading Interest In

NEW

tax

drilled

worthless

approximate rate of 5,000
day. It is believed this

is at the

99

a

discovered,

located.

or

Production

>

2-7815

LD39

In

branch

Pacific Telephone

company has had
a very
sensational gains. one-eighth of the production and
steady growth in the last fewAs of September, 1952, there were is
permitted a depletion allowance
years
reporting
sales
ranging
15
producing fields; five in of 271/2%. If the land is held more
from $9,400,000 in 1949 to $17,000,Canada, six in Montana and four than six months and then sold
000 in 1951.
In the first half of
in North Dakota. At the present at a profit, it is subject only to
1952 sales amounted to $11,689,000
time,
and the picture
changes a 26% capital gains tax. If, on with a net
profit of $1,275,000 be¬
daily, there are 155 new wells the other hand, several dry wells
fore taxes.

Members

Tel.

-

our

"Commonwealth Edison

guards.

range

.

From

during

market favorites

price

1951 and scored

|ffipONNELL&rO.
Curb

country,

to

$1.40 Conv.

Also,
the
Erie
Manufacturing
Company, manufacturers of autoradiator
grilles
and
bumper

especially advantageous. If oil is

companies

which

lease

the stock

York

oil-pro¬

the

have

Pacific,

Northern

and

of

under

Since 1917

York

known

of

In

nearby.

large areas of land
in North Dakota, became two of

Rights & Scrip

Neic

sections

substantial

a

of similar min¬
eral rights is rarely below $40.00
to $50.00 and often much higher.

both

New

the

located

better

and

ducing

Pe¬

troleum

BROADWAY,

Hughes

Thomas J.

well,

Amerada

Specialists in

120

older

result of

a

this

is

well

new

when

district

particular

any

"

^Consolidated Gas of Baltimo

States.

R. Jahn Company,
makers of -heavy duty,
low-bed
truck
trailers.
This company is

level will move up¬
operating at
This generally happens in

price

wires

C.

the

NY 1-1557

Mobile, Ala.

•

Direct

April,

Also,

believed the

tions accelerate, it is

St., New York 4, N. Y.

Orleans, Lai-Birmingham, AJ

Co

$15.00 an acre. As drilling opera¬

established

Broadway, New York 5

120

BArclay 7-5660

f a-

This discovery
Exchange

N. Y. Curb

United

the

'

York Stock Exchange
York Curb Exchange

New

HAnoverk2-0700
New

-

well.

Iverson

1920

Established
Associate Member

in

J)'

1949,

December,

cans

Quoted
4

1.

Members New

25 Broad

In

few years

acre a

an

*

.

Steiner,Rouse &

City.

1950, The Rice &
ago. They now sell in four figures.
Adams Corporation, producers 01
Royalties in the quiet central
milk can washing machinery and
and
eastern
sections
of
North
various
other
dairy equipment.
Dakota
sell dor around $7.00p to

Clarence

mous

Corporation

.

Members

In

brought.in
its now

York

The Solar
Sturgis Manufacturing Company,
one of the largest makers of milk
selling for about

were

$2.00 to $5.00

Petroleum

New York Hanseatic

New

-

■

McGin-

-

Royalties in the area
Amerada
brought in its

first wells

April, 1951,
Amerada

In

request

on

nis-. & Co.,
(Page 2)

,

,

—

an

where

Dakota.

South

are

fantastic.

and

North

of

Bought—Sold
Car. Company

speculator, oil royal¬ the net sales and augmented the
interesting medium of profit potential of the company.
The following companies have
investment. If oil
is discovered
on
his land, the profits could be been acquired:

ties

parts

tana and

Mass.

the

For

of about 300,000
square miles. It includes sections
of Southern Canada, Eastern Mon¬

Peoples Gas Light & Coke

Boston,

Henry Oetjen, partner,

;

than land deeds.

encom¬

Louisiana Securitie

—

rather

.mineral. • deeds

are

Inc.,

Steel

Pressed

the

of

Royalties

(Page 2)

•

There are no land
paid on this acreage.

be

to

They

area

an

passes

Statistics,

nor

one-eighth

Oil

Thomas John Hughes, President,

well qomes in, he

a

to

production.
taxes

Basin

Williston

The

Rights & Stock

If

entitled

is

Oil Royalties

Basin

Williston

free ride.

;

Inc.,

President, Statistics,
Boston, Mass.

intended to be,

are not

Alabama &

Selections

Basin

Williston

particular security.

a

offer to sell the securities discussed.)

HUGHES

THOMAS JOHN

Deb.

Rights & 3 l/t% Conv.

contained in this forum

(The articles

$1.40 Conv. Pfd.

Union Bag

for favoring

participate and give their reasons

Commonwealth Edison

"

Week's

Participants and

Their

which, each week, a different group of experts
and advisory field from all sections of the country

A continuous forum in
Cleveland Electric Ilium.

This

Forum

If

share

certain

were

My

other

could
reason

common

of

Quotation Servic
for 39 Years

$6,200,000

$3,500,000

or

common.

to occur,

timates

estimates
of the com¬
with net in¬

Qver-the-Counte

stock

developments

National Quotation Bur

then the above es¬
expanded.

Incorporated

be

for
of

the

selecting
Pressed

Continued

on

Steel

page

21

Established

46 Front Street
CHICAGO

Mew York 4,
SAN

Number 5174

Volume 176

.

.

The Commercial and Financial Chronicle

.

(2115)

Identifying Statements

IN DEX

And the Prospectus

:

release

SEC

Recent

new

also will hamper
the

Inadequate and long-delayed

per-

—Arthur

the performance of commitments made by
for a sound dollar and a bal- V

readable

and

'

£

„

Outlook for

*

' '

*

and

'

'

i

f

r

'

•• "

*

YOURS"

4

Stocks and Bonds—H. Clyde Baldwin

'

•

,

6

Cobleigh____:
•

i

99

9

Wage Policies Since World War II—Sumner H. Slichter

Economic Stability Through Federal
v

t

WALL STREET, NEW YORK

After declaring the intent of the rule to be the "wide¬
spread dissemination of information," the Commission
goes on to say:
'
'
- •

;

"

Cinerama, Inc.

Budget—Wesley Lindow 12

Funds—Roger F. Murray______l

13

___

Lock Thread

14

Two Years of

-

4-6551

10

Some New Qualifications for Leadership—Robert S.
Byfield__

•

-

Pension

OBSOLETES

Telephone: WHitehall

'Business Prospects During Next Four Years—Gilbert
MacKay 11

-generally: (1) to provide a means, consistent with the
;
statutory - prohibition against selling effort before ;■ the
"effective date of the registration statement, for achiev¬
ing widespread dissemination of information during that
period, and (2) to further the aim of achieving prospec¬
tuses which are reasonably concise and readable."

your

MINE!

Obsolete Securities Dept.

r

Exchange Commission, recently
,,

all

are

7
+

■

"Steel's Future—A Producer's Point of View—A. B. Homer___
•

!

I have is

.

Cover

.____

.Stocks for Christmas Stockings—Ira U.
•

issued its "Release No..3453" in the form of a notice that
after considering "all of the comments and suggestions
received" it has adopted "Rule 132" which is "designed

;

;

Babson___

if

Exchange Commission doubted.

" '

" '

'•

.

Securities

The

;

C.

Prosperity Will Continue Through 1953!—Robert R. Dockson

The emergence of a
under the aegis of the

prospectus

Securities and

*

'

;

"EVERYTHING

Commodity Outlhok

'

budget without unemployment.

concise
:

•-

AND COMPANY

Cover

Administration calling

new

anced

Page

identifying statements continues to

on

issues.

still will interfere with the free flow of capital and

missives

B.S.

; Free Exchange and Free Markets—Rene Leon
The 1953 Business and

impede sale of

licrasiEin

.

Articles and News

16

Fighting Inflation—Oliver S. Powell.

The Economic Climate for Agriculture—Earl L. Butz
The

Newport Steel

18

Lone

Weather—Roger W. Babson__

-

Star

18

___

Steel

r

:

'. "Rule 132 is designed to permit the use of a brief
"identifying statement' which is intended for use as a
.'screening device to locate persons who might be inter¬
ested in receiving the. proposed form of prospectus pur¬
suant to Rule ,131 (the "red herring prospectus') or the
'final prospectus. The identifying statement is not in-

Impact

•

City Property Values Resulting from

on

Remington Arms

'

J.

Decentralization—William L. C." Wheaton!_

19

■

Investment Companies—A

ife-appraisal

7 ,—Rudolph L. Weissman

.'

20

:

,

:-i

J. F. Reilly & Co.

sjs

'

'

tended to be

selling document."

a

"V

: Identifying

Declaring that the purpose of the Securities Act- of
"encourage the dissemination of information,"
„the SEC proceeds to circumscribe those terms by enun¬
ciating what the identifying statement "must" contain,
what it may contain and what is prohibited.
It also makes this release subject to the opinions of
its General Counsel contained in Securities Act Releases

Chicago Banks Held

f

*

V

v

Firm Municipal Bond
f

Production

No. 3453:

in

the

following

f

line

a

or

"offer

for sale,"

""solicitation of

"

offer

written communication

a

or offer to dispose of,"
buy."
term "identifying statement"
or

the SEC

can

"r

/

•-

■

!

' i

'

•*„

"

Research

Corp.

/Cinerama, Inc.

:
•

25

Securities

\.-■>

h

..

..

.

«

'•

-

Fresnillo

25

Reeves Soundcraft

'' "

_______

v

8

|

U. S. Airlines

;

8

-•

advertisement

23

Singer, Bean

'

'

...

"

•

t

•

.

.

.

'

'

6

Indications of Current Business Activity

.

MACKIE,

&

as

which meets

35

HA 2-0270

Mutual

Funds

,

lOur

Reporter's

Inc.

Exchange PL, N. Y. 5

22

Willed May

Observations—A.

40

Teletype NY 1-1825 & NY 1-1826

20

News About Banks and Bankers.-*.

5

_!___

Report__^

8

'

Our

,

Reporter

Governments

29

Security Offerings

Prospective
Public

41

on

Utility

Securities..

31

than 16 years

come

of existence, the best that
with is Rule 132, then, indeed, it

up

Railroad Securities

•Security

The underwriter has been

'

* t

,

From Washington Ahead of the News—Carlisle
Bargeron

,

has given birth to a mouse.

put strictly on the defen¬
plain by the contents of some of the
identifying statement advertisements. " '
*
:"
'
Here is a typical extract from one of these:
"This is not an offer to sell these securities. They are
subject to the registration and prospectus requirements of
sive.

Cover

^Einzig—'Will Bretton Woods Plan Be Revised?"___

or

the restrictions.
more

and

■.

^Dealer-Broker Investment Recommendations______

requirements.
According to the opinion of SEC counsel the identify¬
ing statement may not contain any recommendation or
opinion as to the merits of the security, nor may it in any
;way emphasize the favorable against the unfavorable
aspects of such security.
4
;
Heretofore
in
pre-registration advertising, under¬
writers could tell the public virtually nothing, so severe
If. after

Detroit

29

Coming Events in Investment Field_

the Commission's

were

Los Angeles

"offer to sell,"

to

The SEC defines the

:

V. '

Canadian

two."

"attempt

an

'

'

.

an

'

24

.___

(Editorial).

i' '

* ■*.

./

"■

permissible form of the identifying

"statement is that it shall not constitute

Market Ahead!

;' Bank and Insurance Stocks_______"
-

general type of business of the issuer'; it is con¬
templated that this statement regarding the nature of the
the

As We See It

"?;•

.

The test of

Philadelphia

23

Associated Development

""Among other things, the identifying statement sets

^

.

Regular Features

•

business will not exceed

Direct Wires

-

identifying statements
excerpt from Release

forth 'the

1

•

Paralleling Orders, Survey Reveals

464 and 802.

contained

•

•

Teletype NY 1-3370

16

Chicago

,,

is

Discriminatory.....;

Frederick Shull Takes Issue With Dr. Einzig on Gold Pricc___

*

over

11'.'

•

Broadway, New York 6

BO 9-5133

Higher Reserve Requirements for New York City and

.

:

"

V". An example of the extent of the control which the

3
61

1933 is to

"Commission seeks to exercise

Incorporated

Statements and the Prospectus (Editorial)_______

33

Salesman's

Corner

26

Securities Now in Registration

38

This is made

*

.

■"

Continued

-

on page

The

Security I Like Best

2

;The State of Trade and Industry!.
!

f

/ '

'>

,

*

' »

'♦

/

-

'

tomorrow's Markets

'

34

Published Twice

have

.The

PREFERRED STOCKS

specialized in

37

Washington and You__

Weekly

•.

COMMERCIAL

1

FINANCIAL

Drapers'

Gardens. London,

CHRONICLE

DANA

Eng-

Copyright 1952 by William B. Dana
_

.

t

Reentered

B.

C.,

Iand* c/0 Edwards & Smlth'

and

Reg. U. S. Patent Office
WILLIAM

E.

EXCELLENT LOCATION FOR

44

j

'

For many years we

5

•

(Walter Whyte Says)____

COMPANY, Publishers

ary

25.

as

Company

second-class matter

Febru-

1942, at the post office at New

COMPANY

FUNCTIONS
OF EVERY KIND

'

25

Spencer Trask & Co.
Members

-

25

BROAD

New York

'

,

Albany

Boston

•

Manchester, N. H.

•

Private Wire to

WITT TAX*
WILLIAM

TELETYPE N. Y. 1-5

•

Chicago

Nashville

•

Glens Falls

•

Schenectady

•

■

ttava

DANA

.

;

vertising
plete

Thursday

(general

and

issue)

statistical

•

market

LOS ANGELES, CALIFORNIA




Other

Offices:

Chicago 3.

111.

135

La

Union,

$45.00

Dominion of Canada,
other countries, $52.00

quotation

bank clearings.

South

Pan-American

ad(com-

~

-Vt

in United States, U.
Territories and Members

Possessions,

and

Monday

every

issue

corporation- news,
state and city news. etc.).

Subscriptions

Publisher

President

news

M"ch

Private

rooms for 10 to 3000.
Wonderful values! 5min.from

Subscription Rates

Thursday, December 4, 1952

Every

Y" U"der the Act

to 9576

SEIBERT,

records

*■

$$

7, N. Y.

^

v

/

Worcester

CROWELL, WEEDON & CO.

New York

REctor 2-9570

Stock Exchange

•

Place,

HERBERT D. SEIBERT, Editor &

ST., NEW YORK 4, N. Y.

TELEPHONE HAnover 2-4300
;

Park

Salle

St.,

(Telephone: 8Tate 2-0613):

per

$48.00

year;

per

S.

downtown N.Y. Clark St.

of

7th Ave. IRT sub. in hotel.

in

Bank

and

QUotation

year,

Record

—

Monthly,

$30.00 per year. (Foreign postage extra.)
Note—On account of the fluctuations In
the rate of exchange, remittances for for-

eign subscriptions and advertisementa must
oe

sta.

MAin 4-5000.

per year.

Other Publications

made in New York funds.

3

.HOTEL

st.George
Clark St.,

N. H. Free, Mgr.
bing &

Brooklyn

C. R. Maisott, Bqt. Mgfi

bing, Inc.,

Management

4

The Commercial and Financial Chronicle

(2116)

will
be
about'1 0.3%. years. The need for better high¬
hospitals, parks,
year's personal consumption ways, bridges,
expenditures or sales to consumers sewers and schools is becoming
will approximate $216 billion or more and more apparent. During
62.6% of the total of all goods and the past two years municipal and
services produced. Any analysis of state officials have been hampered
Federal Government regula¬
our
economy must take into ac¬ by
count the forces working within tions, by the scarcity of manpower
vestments

This

Prospeiity Will Continue
Through 1953!
By ROBERT R. DOCKSON*

Economist, Bank of America, N. T. & S.

A., San Francisco

each

based

business
For the last

seven

can
over

the

"inevitable" recession

depression that
corner."

the

That
has

corner

yet

be

to

Not

turned.

than

more

a

year ago many

f

recaster

o

business activ¬

ity during 1952.
Even

many

that

felt

by

year-end

program,

spending

will rise during the year.

Robert R. Dockson

w e

during 1952.

fully

am

profit

indicators

economic

are

optimistic

than

our

Eastern

col¬

currently establishing new leagues. I earnestly believe, how¬
records or are registering very re¬
ever,
an
objective analysis of
spectable levels. Incomes, output, some
of
the
major
economic
consumption
arid
employment forces justifies an optimistic out¬
continue

to

climb

in spite

warnings that

our

of the

look.

prosper¬

It

ity is nearly over.
has

extremely difficult to ob¬
balanced

a

picture

of

our

past highly complex

economy.
There
be are so
many forces
pushing in
residing in the White House after various directions that it is nearly
Jan. 20 we are in a position to
impossible to give careful con¬

know

we

reach

that

"Ike"

economic

our

will

conclusions

with little regard
cal implications.

for their politi¬
The beginning
of a new Republican era is an ex¬
cellent time for us to take a good
look at our economy in order to
familiarize
of

ourselves

with

some

believe

I

all.

that

For

product,

which

represents

the total value of all the goods and
services produced in our economy.
The

that

present high level of our eco¬

nomic

during

activity will be continued
1953. Not all of our eco¬

nomic

indicators will be

moving

^upward during the coming year.
In

all

probability,

of

these

ables

various

one

to

components

place them in their

perspective. According to

proper

the latest

statistics the total

rent value of all goods and

ices

en¬

produced in

our

cur¬

serv¬

economy

is

indices running in the neighborhood of
will reverse their current upward
$345 billion, nearly four times the
frend while others presently go¬
dollar value
of
the goods and
ing down will turn up or move services produced in 1939. Gross
,'sidewise. What is really meant by
private investments will amount
(this prediction is that unemploy¬
to $50
billion or approximately
ment will not become a problem 14.5% of the
total; government
purchases of goods and services
i
*An
address
by Mr. Dockson before
will be about $78 billion, or 22.6%
the Arizona Bankers' Association, Phoe¬
many

-

'■»

nix,

'

Ariz.,

November 22,

level

off.

the

For

same

ex¬

the estimated

of the

1952.

Of

these estimates of
expenditures will

course,

and

revenues

undergo revisions as the year pro¬
gresses. However, if the present
estimates of defense expenditures
realized

are

carryover

billion of
June

on

new

a

difficult
to
Federal expen¬

extremely

ditures
1954.

be

approximately $74
authorized expenditures

30, 1953.

is

It

still

will

there

of

estimate precisely
and

revenues

fiscal

for

Certainly Congress and our
will take

Administration

an

look at the defense

new

appropria¬
the defense
agencies for fiscal 1954 should be
program.

tions

Even

if the
by

requested

reduced it is obvious that the ex¬

total, while net foreign in¬

penditures for that

pleasure in announcing that

our

Trading Dept.

deficit

financing

is

ad¬

Congress desires to cut taxes but
it must be recognized that the

cinuComparui

New Ycrk Security Dealers

Atrj^New York 5, N. Y.




this

asked

$1.4

various

month
to

the

approve

billion

worth

of

issues to fi¬

local bond

and

nance

of construc¬

types

tion. Reports show that practically
all of this

ments.
than

approved. This

sum was

estimate

One

is that

more

$100 billion will be required
the next ten years.

over

Although

1

impossible

is

it

to

in dollar terms, the exact

guess,

amount of all the goods

and

serv¬

Another factor of prime
tance is

We

different

levels

believe it

can

be

government, I

seen

from these

that government

remarks

will

ditures

of

continue

expen¬

have

to

Administration
terest rates

the

economy

for

come.

these

rates

funds

are

Investment

Private

What

forecasters
have been
the possible drop in
amount of funds going into

capital formation
recession
1953.

If

can

and

all

the reason a
be expected during
as

present capital spending

intentions

are

realized, new plant
expenditures for

equipment
of this

in mind.

be borne

in¬

part

of

our

that

should

inventories

have

Total business

increased

about

$2 billion so far this year but all
of this has been due to the rising
needs

of

the

Wholesale

defense

retail

and

program.

inventories

have been dropping since

1951,

and

are

the

above

June,

August,
slightly

just

now

1950 level.

not for the defense

were

If it

expendi¬

tures total inventories would have

dropped
see

significantly during this
year we are likely to

Next

year.

continued

a

accumulations of

the inventories related to the de¬
fense

program

well

as

in those

crease

civilian

with

accumulation of

billion

in

needs.

ventories

might

this

occur

does

effect

same

I

believe
as

business

be

$2
in¬

expected.^ If

it

will

the

on

in¬

an

much

as

total

our

as

directly tied

more

in

have

the

of

our

level

equivalent increase
other form of investment.

economy as an

in

any

the

tory

whole,

the

indicate

to

vestment

to

business

to

investments

private

more

available

be

another

is

Should

increased

happens

ventories

seems

Expenditures

the

be

likely to
for home building.

On

Many
pointing

re-examine in¬

anteed and insured loans.

•

Gross

to

Government guar¬

on

a

effect upon
some
time1 to

impor¬

the availability of funds.
probably expect the hew

can

an

ices that will be purchased by the

that

evidence
total

in¬

expenditures for inven¬

accumulations,

plant

and

forms

of

down in

for

equipment

other

will

construction

1953.

capital

and

be

The exact amount

of this decline is difficult to guess
but it will play an important role

in

determining the level of busi¬

activity for the coming

ness

should be some¬
what over $27.5 billion, or about
4% above 1951. To date, we have

year.

year

little information

the spending

on

intentions for 1953 but if the Mc¬
Graw-Hill survey can be used

as

Association

Tel. HA n.oyer, 2-4850

expected to drop about

group are

8%. Of course,

been

and

spending intentions

back

held

where

of labor

because

material shortages;

dustries

will

borrowing.
Our

high level

of defense ex¬

penditures for 1953 will continue
to place expendable dollars in the
hands of military personnel, wage
earners
in
defense
plants
and
increasing the available sup¬

ply of consumers' goods and serv¬
If

our

current

standard

living is to be maintained

or

of

to

be

improved it thus falls upon the
remainder of the nation's produc¬
tive

capacity tq increase its pro¬
have

new

,

or

in in¬

consumer

place

Net Foreign Expenditures
An
of

increase

in

the

production

services for export
a
sustaining effect
upon gross national product. How¬
ever, I cannot see how we can
look forward to any increase in
foreign
demand for American
goods and

would

have

orders for them. Pro¬

provided and an expansion of
capital spending will take place.
Electrical utilities
a

discussing

the

expenditures of the Federal Gov¬
Since the end of the
war,
expenditures by state and
local governments have increased
steadily from $8 billion to ap¬
proximately $23 billion this year.
As I see it, there is no reason to
believe
that
such expenditures
will decrease
in the next few

slumped

badly in recent months
no signs
of improving.
It is likely that exports from the
show

and

United

States

about

for

billion

$1

will

1953

below

the

run

level

for 1952.

There

two

are

this

for

drop:

primary reasons

(1)

United

States

imports have been declining and
(2)

number

a

which

built

up

of

the

countries

large holdings of

gold and dollars immediately after
Korea have now spent these funds
and, as a result, are husbanding
their

remaining
carefully. Unless
to

reserves

more

find

we

a

way

stimulate

foreign demand for
products this is One

American

that

component
offset
full

by

will

increases

employment

have

to

.be

elsewhere'if

is

be

to

main¬

tained.

'

facilities will have to be

duction

planning
Continued high level of capital

Purchases of Goods

and

Services

by Consumers
We

are

is

have

the

already noted that it
who

consumer

takes

the

spending as are commercial es¬ largest portion of the goods and
tablishments and recreation en¬ services produced in our economy.
His purchases largely determine
terprises.
the direction the economy takes.
Another important segment of
expenditures
is,
of
residential construction.

As

investment
course,

The
one

boom

in

field

this

has

of the main supports

been

of busi¬

activity during the postwar
Between 1946 and the end
of this year nearly 7,000,000 per¬
manent dwelling units will have
been added to our housing inven¬
tory. In spite of these additions a
large demand for homes still plays
an important role in our economy.
ness

been

ernment only.

Members

than

more

state

of

4th

were

tax rates are largely
products and important advances
responsible for the fact that our
in technology are ready for largetotal public debt has not increased
scale production.
significantly since the beginning
A visit to any major research
of our post-Korea defense pro¬
gram. And again it should be rec¬ laboratory provides sufficient
ognized that with a reduction in proof that strides are being taken
to increase greatly the productiv¬
taxes, revenues will decline, and
unless expenditures are cut cor¬ ity of this country. As the innova¬
respondingly,
the
government's tions are tested and prove their
only
recourse
will
be
further worth more and more companies

We

general partnership

&tccr\e

the

emergency

duction.

has been admitted
to

On
voters

approved.
vary widely among different in¬
Under existing
legislation the
dustries. The largest declines will
Excess
Profits
Tax
expires on
probably be in the defense related
June 30, 1953. By the end of that
activities. The greatest increases
year the latest increase in per¬
are likely to be in those industries
sonal income taxes also expires.
where
building
programs
have
We are rather sure that the new

ices.

Mr. Robert M. Topol
Manager of

between 850,000 to 950,000 in 1953*

populations.

year

vocated and

out
take

expanding

substantial bolstering

revenues.

workers in related activities with¬

We

of the

care

ex¬

new

families

further

them

four components are: (1)
private investment expendi¬
Economists
are
expected
to tures, (2) government expendi¬
forecast business conditions and tures,
(3) net foreign expendi¬
for
that
reason
I
will
state tures,
and
(4) expenditures by
bluntly, and I hope clearly, my consumers.
general conclusion regarding the
A look at the present magnitude
outlook.

to take

build

to

or

million

1.5

formed but it is likely to be

main components of our gross na¬

to

gross

the

facilities

when

1947
were

tional

sideration

reason, I am limiting my remarks
to an
examination of the four

at work.

economic

the part of state

family formations are proceeding
at the rate of nearly one million
per year. The trend is down since

any indication total capital spend¬
will still
ing should be down about 4%. or
be at a high level. It is also a
at approximately the 1951 level.
certainty that if government ex¬
Manufacturing industries usually products in 1953 unless some posi¬
penditures remain anywhere near
account for a little under half of tive steps are taken by the new
the
present
levels
government
the total.
Expenditures by this Administration. Exports have
revenues
cannot
be
cut
unless

the basic economic forces that

are

The rate of current

be below this because defense

entirely
is

tain

Now that the election

and

such
some

are
running
below
1953, particu¬ penditures
larly the second half.
You will expectations. This $79 billion com¬
recall that dire predictions were pares with a total of $66.1 billion
also made for 1952 and the earlier spent in fiscal 1952, and runs ap¬
postwar years. Economists are by proximately $10 billion more than

either

many

likely

many

levels. But you status as a Westerner without
know that, in general, the aggre¬
pleading guilty to impracticabil¬
gate level of business activity is ity.
high and business conditions are
Perhaps our Western business
good. In fact, the majority of the climate does make us a little more
basic

that

continue for

is

come.

then

and

that

aware

experi¬
nature pessimistic and one who
ence a severe adjustment in busi¬
takes a fairly optimistic view of
ness activity.
Many of you prob¬ the future is open to charges Of
ably have banking customers who being impractical, or a Westerner.
have found it difficult to maintain I
hope that I can. maintain my
and

time to

it

will

expect a re¬

can

on

of

would

sales

a

dict dire things for

June of this

year,

avail¬

remain

number of outlook talks that pre¬

late

as

Barring

economy.

obstacles

to modernize their

more

isting

Government

period, the Treasury has estimated
business economists and analysts that total Federal spending should
be a little below $79 billion. Ac¬
disagree with this general out¬
look. You have probably heard a tually the outlay will probably

general

as

the real

spite

I

ing a downturn
in

acquainted with

Federal

we

effort

these

local governments to attempt

ones

spending has been playing in the

income of con¬

will

Jobs

newed

As

this, however, there spending for the national security approval is probably the forerun¬
will be many businessmen with program is about $50 billion an¬ ner of tremendous building pro¬
good reason tt complain about nually. It has remained at this grams that will be undertaken
the
next
decade.
Several
such things as rising costs, de¬ level for the last two quarters. over
creasing sales, falling prices or According to the Treasury this studies have been conducted for
the
purpose
of
estimating the
high inventories. Business earn¬ expenditure should total $58 bil¬
ings - will vary greatly, as they lion during the current fiscal year volume of needed public improve¬
In

have

s

predict¬

were

well

are

role

post-Korea

and

sumers

Services

drastic adjustment of the defense

1953.

in

or

"just around

was

We all
the

Goods

of

Purchases

and

other factors favoring rise in

able

worried

removed

are

and

this review.

upon

Government

activity.

Ameri¬

years

have

businessmen

Here,

components.

once

heavy
private investment; (2) high level of government expendi¬
tures, and (3) stability of consumer spending. Foresees some
drop in private investment and in exports, but contends these
Gross National Product as: (1) recent

reduced forces will be offset by

these

today, we will review these briefly
and
then
draw
our
conclusions

Predicting high level of economic activity during 1953, Wwt
Coast bank economist lists controlling factors in maintaining
the current high

of

materials.

and

Thursday, December 4, 1952

...

years.

We

homes

all
•

several

know

the

constructed

different

number

of

depends - uoon
factors.

New

tainty

mentioned, a major uncer¬
as far as 1953 is concerned,

is the amount of

our

total produc¬

tion that will be taken for invest¬

ment

purposes.

certain

how

No

one

much

can

be

investments

will

drop, if they drop at all.
However, the real solution to this
potential

problem

is

increase

to

consumption expenditures at leasi
as

much

as

the

expected drop in

investment

expenditures.

must be done

if

we

are

Continued

on

This

1

page

■*-

30

Volume 176

Number 5174

.

.

The Commercial and Financial Chronicle

.

(2117)

5
>

Greene & Go. Admits

fr
Steel Production

The

Topol

Electric Output

Carloadings

Industry

By A. WILFRED MAY

Price Index

Business

The Investor and Inflation Now!

Failures

Surely

public's attitude toward "inflation."
has occurred

there

of last week.

flation
As

true of recent

was

months, total industrial production last
perceptibly higher level than a year earlier;
however, it held about 7% under the all-time high reached dur¬
ing World War II. Joblessness remained slightly above one mil¬
ords

Robert;

achieved the past week in the output of electricity and
crude oil. Steel output, however, was slightly below the all-time
were

Greene

month and

one

a

.

,

.

new

A

optimistic

more

(Special

SAN

to

The

Financial

the

of

San

Francisco

fices

235

at

Partners

John

over

are

J.

Montgomery

in

-

facilities.

cost

the

first units to be taken out

's

more

production

the

10%

r

*

i

and

is

'

-

.

.

in November

Y

Y

he

■

■

Y-

Y

•

.

.

V

"Since September," the board pointed out,

-

r

ing

during 1951

and early 1952."

and

-

tember total.
At
'•
-

the

same

but $300 million lower than

a

4

M.

Steelmakers

are

-

A

Dec.

be¬

Dob¬

91

the

U.

+
+
+
+

+

*72
126
39
78
34

+13., +
+12
+
+ 1
+
-— 4 ,.+

21
46
77
90

;.iv
Y

100

r

-

Y 63 Y"

Yf

30$
64 $
90$
99$

*

"

f Base period 1935-39.
j;Thc four different periods used
exemplify, the importance of the specific interval which is-,.analysis.

demand-and-supply changes resulting from consumer or sup¬

plier preferences—or, particularly

in the investment area, with

budgetary deficits or an increase in the money supply per se.
is,

no

There

historical correlation of either commodity or stock rise

tradictory

commodity

behavior between monetary inflation and

And also;

1929-'51 intervals.

cred~
following,

expansion is the record during the quarter century
It

was

not until 1946, and the occurrence

PALM

Daniel A.
to the
&

& Company,

BEACH,

Fourteen Million Canadians
a

—

Doherty has been added

where

over

are big business in Canada
42,000,000 meals are consumed

daily.

j

staff of Francis L du Pont

We

Dineen

Mass.

has

be

J.

industry.

associated

become

Hodgdon
was

Alfred

—

will

pleased to send you, upon
request, our recent Monthly Bulletin dis¬
cussing Canada's thriving food chain store

Co., 212 Datura Street.

with

Day!

The food chains

Fla.

Hodgdon Co. Adds

&• Co.,

State

10

nowles

formerly with R. H.

"

-

page

asso¬

(Special to The Financial Chronicle)

1
;

of another

on

An¬

—

become

Eat Three Meals

WEST

and coke are -much larger- now than they were a* year ago*
-and iron ore supplies have been building up after a setback front
the steelworkers? strike that halted ore shipments during* the
summer. *
I „•
'
*
"

Johnson & Co.

&

Member** The Toconto StocbrExchnnge

V" Joins Keller Staff

and The Lncesttnenr Deafer*' Associatron

vBOSTON,- Mass:
*

—

William C.

Prout rhas become connected with
,

'




>

.

.

of Canada

►

(Special to The Financial Ckhontclc)

I

IV

fol¬

the con¬

lowing monetary or credit expansion, as exemplified in

scrap

.

-

44
54
53
29

F. I. du Pont Adds

Street. He

.
This time last, year, states' this, trade magazine-, there was a
/nationwide drive to get out the scraps Then mills had 4.4 million
^
v
•
:
y
" Continued on page 37

+

S.

for

; n. c.

materials,

1, inventory indicates their, stocks- ofiron and steel

+

103

Continued

<

a raw

mere

it

Square. Mr. Law will
make his headquarters in Tryon,

Scheduled; at* Slightly Lower Level
putting aside their fears of

+

—

+

prices during both the 1946-'48 and

130 Morgan

working.

'

has

Law

BOSTON,
~

Mr.

___

70
72
86

+

•/

+ 9
—29
+58
— 2
+14
—17
—21

~

-

(Special to The .Financial,Chronicle)

ciated with Calhoun

month earlier.

•

+

—

+2,306
+
47
+ Y 9

Calhoun & Company

level

shortage this winter, says "Steel," the weekly magazine of metal-

•

Exchanges.

SPARTANBURG, S. C.

manufacturing firms amounted

The Present? Week.
!

has

Jr.

119

5

54
4
42
20
11

*

*1946-1952.

was

drew

to $25.9 billion* 3 %* more than in September. Their unfilled orders
on October 31 totaled $75*4 billion. This was $10
billion above a

Steel Output

:

Dobbrow,

148

+

__

72

+

World War I.

v

to the best

+

Kingdom

selected

(Special to The Financial Chronicle)

rose

114;
289 .

for

Andrew M. Law Joins

Steel production in October

time, incoming business

+
+

29

+ 264
+* 17

—

-

%

disproving alleged correlation between the cost of living and

"output at factor¬

.

Norway
Belgium

f United States—
Through 1949
Through
1950
Through
1951
Through
1952

he

Inc., investment counsellors.

Y

this year. New orders booked by

year ago,

where

~

,

$nd November ran at a record rate — 106% of the industry's
stepped-up capacity.
Television outturn was close to record
levels, hitting a yearly pace of 10 million sets.
; Manufacturers' sales in October were the highest in history,
clirhbing to $26.2 billion, compared with $24.3 billion a year ago,
United States Department of Commerce discloses. After adjustment for seasonal factors, October sales were 4% above the Sep¬

102

United

Co., where
firm's

formerly Vice-President
Templeton, Dobbrow & Vance,

of

+

—

v'

592
+11

+54
— 7
— 7

Switzerland

the uptown

manager of

Curb

486
+ 453
+5,455
+ 235
+
89

Sweden
I

that

and

Street, New York City,
members of the New York Stock

•

•

in

1933

associated with Hardy & Co.,

brow

+

Y

by stoclc rise

+

-

—20

Spain
Portugal

formerly

30 Broad

mines has averaged about 3% above the levels prevail-

.

-

been

come

'

ies and

of cost-ofrise offset

living

"

%

%

.

211

Italy

an¬

Joins Hardy Staff

"

<

participated
in

+

Australia

&

Charles

Y

.

Stoclc

Prices

+2,040

Japan

Israel

Avenue,

was

use").

(September)
Bond

Argentina

Charles Dobbrow, Jr.

was

./

for

with expansion, or with

Prices

India

below

points above the October figure, the previous post-World
War II peak. The record high was 247% in October and Novem¬
..

*

City.

Matthews

formation
has

Fifth

May

"a major rise in

as

available

services

and

Living

exchanges,

Starkweather

with

two

ber, 1943.

of inflation
(defining it

Cost of

York Stock Ex¬

522

at

York

Mr.

rais¬

:YY:

goods

1938-1952

in

partner

a

associated with the firm in

office

New

the highest since April,
1945, The Federal Reserve Board. revealed.
It placed its index
of industrial output for the month at 229% of the 1935-39 average,
or

was

commodity

,

in history," • +
Industrial, output,

of

amount

Co. for many years.

&

now

its

Thanksgiving Day pushed production down to 87,088 cars com¬
pared with 97,172 the week before, according to "Ward's Automotive Reports."
Auto output so far this year is 3,917,300 units, 22% below the
like period a year earlier.
Y "Ward's" said United States plants this month put together
397,000 ears and were laying plans to turn out 410,000 cars in
December, "providing a whirl-wind finish to their fourth best
year

Wilfred

A.

market factor.

Comparative Changes in Cost-of-Living, Bond and Stock Prices.

change and other principal stock

the level of the preceding week and was off about 3% from the
like week a .year ago.
.
;*

:

the

ceeds

office since 1946.

declined

week

past

a

and

Co.

nounces that Edward J. Matthews

intense, concludes "The Iron Age."

Automotive

4

as

Inflation is not necessarily to be identified

Shearson, Hammill & Co., mem¬

ing overall operating efficiency.
Steel officials think this will
-work to^their advantage as the pressure on quality and cost grows
.-Y

thereto

bers of the New

ingot rate declines, these will be the
of production.
Because of this, the net

total capacity, have been carried forward with an eye toward

minor role

a

are

prices resulting from ah increase in the money supply which ex¬

partner

a

&

spending-curtailment climate

of course, here speaking
in its broad economic functioning

Shearson, Hammill

payments.
Rising wage scales have made overtime pay an in¬
creasingly heavy burden, declares this trade weekly.
Steel company expansion programs, in addition to raising
^

Pont

to

We

E. J. Matthews Joins

operating results might be fully as favorable as at present, if op¬
erations fall only moderately.
;
Another area of potential cost saving is in overtime wage

.

Street.

a

solvency to accompany national security,
the short-term at least will relegate infla¬

%

of next year, states
Outlook beyond the first half is still good, but

When

formerly

a

Prop,

prior

most steel people are cagey about spelling out just how good.
'
Ever since Korea they have been turning out every possible
ton of steel.
This has required operation of some marginal, high-

-

over

general partners,
limited partner.

Francis I. du

face of

probably scotched the possibility ot a New Era
philosophy, with monetary depreciation this

and E. H. Bacon,

but assured for the first and second quarters

:■

Ex¬

William R. Bacon and

Ford,

Bacon

this trade paper.

Stock

change, has been formed with of¬

least, to extend their optimism through the entire 12 months of
the New Year, this trade authority notes.
Most steel officials believe that capacity operations are all

>

the Republican victory, even
major extension of the bull
market and continued Cold War tension, has
the

tion

Chronicle)

FRANCISCO,

Mr. Bacon was

:

In any event

in

ushering-in of

Calif.—The
firm of Bacon & Ford, members

„

;

quotations).

time supposedly making stocks "cheap at any
price." The new Administration's prospective

In San Francisco

nearly unanimous in believing that business will continue at very
high levels—at least through the first half of 1953. Of some sur¬
prise was the willingness of a number of them, by implication at
4

ket

and

high for November.

the outlook than they are now.
of ke.y officials in major steel companies shows them

survey

general partner¬

Bacon & Ford Formed

This brought the non-farm job total to 55,-

This seems to reflect the thinking of steel officials, who have

seldom been

in

follow the course of mar¬

nomic "analysis" to

Wall

37

million above the like

,

J Y

iopol

ship.

In their race for consumer markets manufacturers are keeping terrific, unrelenting pressure on their steel suppliers, accord¬
ing to "The Iron Age" national metalworking weekly. Chances
are their strong appetites for steel will continue to dominate the
market until record breaking; production by the mills finally
swings the balance in favor of supply about the middle of next
year, it added.
'

-

M.

Company,

been admitted to

period last year. Non-farm
employment swung sharply upward, rising 900,000 in the month
454,000—also

&

that Robert M. Topol, manager of
their
Trading
Department,
has

Employment contined at near-record levels in early Novem¬
ber, with job-holders numbering 62,228,000, the United States De¬
partment of Commerce reported. This was a new high for the

ended November 8.

former climate of in¬

reversal

public's psychology that would have gone
whole-hog to outright de-flation were it
not for the unexpected emergence of a stock
market rise (per the habitual fitting of eco¬

Street, New York City, announces

peak reached four weeks ago.

*

a

the

New production rec¬

seven years.

dis-inflation; largely

to

In the case of the investor,

turnabout- from the

a

the

a

lion, the lowest level touched in

of the major consequences of the genesis of the

one

change in Washington Administration is the reorientation of the

The close approach to record level industrial
output attained
in recent weeks was sustained for the period ended on Wednesday

week continued at

»

Auto Production

J
;

•

•

Commodity Price Index
Food

and

Partner

as

Retail Trade

State of Trade

r

Keller & Co., 50 State Street.

^

330

BAY

STREET, TORONTO, CANADA Y

*

81

6

The Commercial and Financial Chronicle

(2118)

though this would have to be done
with those commodities bought in
any large amount from any coun¬

Outlook lor Stocks and Bonds
Predicting

pound, unless we are pre¬
pared to pour a great deal more
money into the English treasury.

further small rise in basic interest rates and a

a

The

resulting decline of from 2 to 5 points in prices of long-term

sible counter

bonds, investment expert looks for mixed situation in stock
price trends, with food and utilities offering most stability while
appreciation

some

be expected in natural

may

tobacco, television and
It

was

have

even

the

results

decided

no

market

the

after

now

would

effect

the

on

the

in

have
2 V2

a

cult

enjoying for the

been

past

it is small wonder that

years,

rest

of

this

year

and

into

next

year, but

gradual removal of their impact
on the whole economy could bring
some readjustments.
A second reason why so many

that

the

expect

erning

a

gov¬

half of 1953 arises in the consum¬

factor

would

be

ers' field.

un¬

derlying busiThe

would not ex¬
consumers' total

Here,

we

the

that

pect

trends.

n e s s

trouble in the second

some

expenditures

show

would

any

substantial increase

over

has been psy¬

rent

we

chologically

that total production of goods will
show
a
considerable
rise.
Cer¬

election

bullish

the

on

market

this

but

is

not

a

permanent
factor. We

pointed
while

out

H.

Clyde

Baldwin

a

that inflation

ago

be¬

was

rate,

whereas

a

factor

cause

of

markets

about

the

'than

it

been

now

is likely to be less of

factor

a

the

has

It

years.

in

since

for

two

over

Eisenhower

was

elected.

shall

find

in the second half of next year

coming somewhat less of
and

cur¬

world

their

increasing

commodity

will

create

ber

of

many

which

prices

difficulties

in

be¬

fears

in

downtrend

num¬

a

countries

materials,

producing raw
greatly dependent

or

■

Among a certain segment of in¬
vestors, the inflation argument

the

and

its

velopments could have worldwide

ket

continues, to be stressed,

lifting effect

the

on

mar¬

upon

material business

raw

of

case

England.

as

in

These de¬

but repercussions.
:
those people seem to forget that
Then, there is a considerable
we
had
a
very
large monetary group of
people who might class

and

basis

economic

back

before

1937

for

inflation

when

had

we

a

sharp decline in business volume
well

as

in

as

the

Likewise, there
of

more

in

the

built

it

in

even

inflation basis in 1946

an

between

debt

war

1941

and

we

In

fact, the reaction began
in the latter part of

business

1945.
We do not question
oretically there is still

dous

inflationary

period of

over

to
a

1946, the tendency is likely to be
new high levels in business vol¬

to

and

ume

for

the

in the stock market.
near

future

As

are

erate

which

ume,

to

which

point to

recession

be

felt

stock

in

market,

likely

the

second

We

year.

in

are

not

half

over,

of

the

predicting

any¬

business
that

think

Notwithstanding the belief on the part generally of those
writers who specialize in labor matters that the recent
Bill Green paved the way for unifica¬
tion in the organized labor movement, in the opinion of this
observer there is no more likelihood of this

newspaper

deaths of Phil Murray and

here

whatever to be¬

could

government

and

this.
We

must

for thought as
looking over the

pause

realize

in

banking figures that

total

of

amount

1945

the least this is over simplification.
organizations there are dual sets of
officers all down the line, not only in the inter¬
national structure but in the various constitu¬
ent

$5,600,000,000 and
right now it is running about $21,200,000,000.
Since 1949, business
loans

was

adjustment could be.

find

We

of the

about

there

like

of

are
gradu¬
weaker finan¬

a

position as a
policies.

result

ernment

if

increasing

an

businesses

ally getting into
cial

many

the

gov¬

fear

into

get

more

whole

of

Their

position, they will act
on

few

a

worried

are

the fact that

number

as

is

this
drag

a

and

economy,

could be felt not only in
but in

that

business,

commodities/as well aS in

the

stock

election

market.

should

Eisenhower's

tend

to

nullify

factor.

While

*

.

have taken

we

the

tion that business volume is
to

from

drop

5-8%

posi¬
likely

this

year, and no more,

which

should

having

an

these

the

and

about

end

be

considered

as

ameliorating effect

become

but

one

that

established A. F. of L. union would not toler¬
in the same field to come into the
its identity. In the past ten years the Machin¬
ists have moved back and forth between membership in the A. F.
of L. and an unaffiliated organization because of their differences
in the matter of recruiting. with the Carpenters' Union.
They
couldn't get an agreement that the Machinists were to have a
For example, an

ate

Certainly

year.

in

a

we;
now

certain class of workers and the Carpenters another.

forms

will

be.'i.

economic

any

that

abroad,
cussions

the

catastrophe

have

would

here,

A

Lowered

Inflationary

A.
to

it

term, the Eisenhower
be

less

have

the

policy will

policy,
undoubtedly, would
have
followed the New Deal
program. As more and more peo¬
ple realize this, at least the in¬
should

conservative.

a

The CIO

created it,

better

CIO's Phil

assume

development
certainly would be a/
feeling in the whole busi-

In

hower
a

so

and

will

be

before

would

be

1953

however,
issues

is

over.

:-l

policy is not going to come
head,
however, ^ until he

some

few

which

we

willing to carry
period of readjust¬

very

through such

a

there
a

is

the

decline.

slightest

If the lev¬

eling off of defense expenditures
after

the

brings

middle

of

serious

a

next

year

unbalance

not

we

are

now

at

the peak.
agree

At any rate, all seem to
that, granting no additions

to the present armament
program,
defense expenditures will
grad¬

ually

decline during the second
halLof next year, and since
they
*

An

address

ibe Annual

Hew

York

by

Mr.

Baldwin

Babson's

of

countries

before

troubles

that

producers,

we

are

abroad

might

move

by

sharply

with

that the

say
a

up

stockpiling programs, and inci¬
dentally, we anticipate the gov¬
that

this

present.

will

be

corning
It

looks

doing
year

very

more

of

than „at

much

as

hat.

a

the gentlemen with

are

>

.

.

There

was

considerable basis for the speculation that

in the market
before then.

or
•

*

business picture
"""

Danaher, former Senator, from Connecticut, or De&n

of advice to

•

the effect that the only way

very

which

sues

his

in

there

outlook

attractive

income

will have

little

are

great

among

or

it win

it,

see

ernment;

be

is¬

more

politically

no

1
no

time.
been

-

•

on

page

30

•,

from

politically

I know

ernment seizure of

time;

.

,

longer is the government to help it organize, to help

strikes..

of

instances,

in wartime,

even

the CIO to take

workers of several West Coast shipyards.

over

when the

the A. F. of L.

I know of instances in

the CIO by threatening gov¬

plants which the CIO had struck—this in peace¬

In return for

the government's support the CIO

highly efficient political and propaganda

threw its

machinery behind the

government, not only in matters in which labor had a direct inter¬
est but in

the broad

field of government policy.

Apparently all of this is to be ended.

It does not follow—in¬

deed, it is not to be the case—that there will be any such tie-up
between the A. F. of L. and
does

seem

to

me

to

have

the government.

been

But the A. F. of L.

given such recognition

from the

government as it has not enjoyed since the CIO came on the scene.
Now, the question arises seriously as to

is¬

competition arising

Continued

the !more

minded,

".which the government sought to aid

differences

individual

Perhaps most people
that the basic trouble

the

man

longer is the CIO to be an adjunct of the gov¬

government tried to help

no

whether the CIO can

powerful organization it is, without
of the government which it has had. I have my

long endure, at least as the
that

has

the

on

As 1

Moving picture stocks have cer¬
tainly been a depressed lot for a

long

back

has been done.

sues.

would agree

a

He not only ignored this advice but turned

The favorite stocks for sta¬

field

clear course

aggressive CIO. Undoubtedly, it is very plain to the CIO just what

appeal for those seeking apprecia¬
tion.

a

between the CIO and the A. F. of L. was not to take

either organization.

some

the General had plenty
to steer

-

counter

stepping

you

Manion would get the labor post. Certainly

be¬

material

raw

government could make

ernment

Clients'
Conference,
City, Nov. 20, 1952.




spread

kind;

my

It goes without saying that Durkin's name was not just pulled

either John

expect any important- change "

bility of income will probably be
ment.
The market will
become tween demand and supply of con¬
in the food and utility fields. For'
sumer goods, the
extremely selective.
government can
appreciation we may look to nat¬
make an effective move to offset
ural gas, packing, tobacco, tele¬
Reasons for Adjustments
this
by
reducing taxes, which
vision,
certain
electric
utilities
Why do we look for some ad¬ would stimulate demand,' although and
insurance issues.
justments in business and in the it might mean still operating at a
Possibly railway and equipment
markets by the
deficit.
Even Mr. Eisen¬
second
half
of heavy
issues,-too, which have been espe¬
1953? First of all, we
might point hower has promised he is not go¬
cially unsatisfactory to those who
out that defense
expenditures, ac¬ ing to permit any serious depres¬
are at all interested in,
apprecia¬
cording to most authorities, will sion, accompanied by heavy un¬
tion, could, become much more
reach their peak
by the middle of employment.
popular than they have been for
the year.
There are a few au¬
For those who are
fearing the the past few years, but in this
thorities who feel

>■

out of

Congress in.1
the latter part of January.
This
is another reason why we would "

on

evidence of

"You are

makes his address to

continue to

whenever

It was the CIO

.;

wheels; the A. F. of L. has been but a stepchild.

whom I would like to work."

Remember the Eisen- '/

drastic

seen

occasionally went to the White House with

turning to the A. F. of L. for his Labor Secretary, Eisenhower

said, in effect:

we

There will be,
selected
stock

part oh.the prevailing

.

Generally, we feel that the in¬
any decline and prevent a frery
as began in 1929,
vestor, where stressing apprecia¬
serious one. For instance, every¬
certainly
have
grave
tion, will have to be very nimble
doubts of anything so drastic as one must realize there are some
in
seeking
long-term
profits.
that
which
began in 1937, but counter moves that the govern¬ There
undoubtedly will be some
quite a measure of downward ad¬ ment itself can make which, can
good"
situations
in
individual
justment in the market we believe be moderately effective, if used stocks.
There will

thing

&

Roosevelt's Administration

Murray but this was simply for show.

that turned the

constructive

world.

ness

it has been

developed it and it continued-to be nurtured by Truman.

A. F. Of L.'s Bill Green

more

the whole has

on

the pet;

been

has

government throughout the New Deal.

i

there

and

to

will

They

that the election
been

become

the govern¬

ment since the CIO was created in the early days of the New Deal.

largely

class

by General Eisenhower of

Martin P. Durkin, as his Secretary of Labor.

This is the first real gesture towards the A. F. of L. by

,

Stevenson

who,

vestor

signs of this weakness at present but they could

no

are

A. F. of L. man,

an

inflationary than would

been

There

'

be in the making with the appointment

judgment, for the longer

our

my

like flies.

CIO
;

:

Expected
In

joining of the two groups will ever be brought
opinion, is through the gradual weaning away by the
F. of L. of CIO unions, and before that happens there has got
be some signs of weakness in the CIO. If a weakness developed,
is possible that constituent groups would drop away from the

about, in

,

Policy

successor

The only way a

reper¬

would
not
bother about the heavy debt un¬
less there
is a further sharp rise '
we

within the next 6-8 months.

unions you can

A. F. of L.

between two

of unification in the bitter struggle waged in the CIO over
to Phil Murray as President of that/organization.
-

sign

topped off before then, and bar¬
ring

situation

With this

imagine the size of the job that would be involved in a merging
of the whole A. F. of L. and the CIO, And certainly there is ho

the ^

believe

we

of all

debt

operating

union

CIO

a

A. F. of L. and keep

portant in the second half of next
rise

Bargeroh

would have

themselves

they could become quite im¬

ever,

Carlisle

the part of union officials, many organizations
to be amalgamated.

the loss of jobs on

How¬

year.

Not in¬

organize the same group of workers.

factors

between

the

of

many

frequently this struggle for members is respon¬
sible for jurisdictional strikes. Merger of the
A. F. of L. and the CIO would not only involve

A borrowed

can

nothing

are

bother

need

year.

also

are

who

men

dangerous

very

-

business

prosperity

money

in

are

.

$20,000,000,000
mortgages have nearly

home

and

These constituent organiza¬
instances rivals trying to

organizations.

tions

risen

have

even

or

To say

credit

consumer

ten,

In the two

prosperity is based largely on the
creation of debt. For instance, the
in

was

the A. F. of L. and the CIO had merged.

current

our

Apparently the belief that unity is in the

making is based on nothing more substantial
than that Green and Murray were rival Presi¬
dents and both wanted to hold their jobs. One
of them would, of course, have lost his job if

is going to bring a serious-test of

we

two. years

than

ago.

we

half of. 1953

latter

there

now

degree

some

correction,

the

of the News

By CARLISLE BARGERON

t.

business

rather diffi¬

a

entirely prevent

ever

of

the

in

might add

reason

no

that

at least begin to

or

in the latter part

the

probably

in

are

coming
it seems an ap¬
propriate place to point out that
most there are certain political factors
vol¬

likely

are

extent

some

we

a

mod¬

a

business

believe

we

to

is

year

.number of factors in the business
situation

amateur forecasters

passing the
major business cycle

the

and that the postponed war slump
will catch up with us before next

this

there

of

as

fear

who

crest

our

had in 1937 and

as we

and

that

longer
following such in¬

years

terruptions

the¬

tremen¬

base

and that

economy,

that
a

themselves

1945.

did not prevent quite- a
reaction in the market in

sizable
1946'.

market.

surely

was

tremendous

up

Yet

stock

lieve

the part of

in
value.
tainly there is an increased ca¬ doubled
There,
of
pacity for production which will course, must eventually be an end
tend to intensify competition and to this creation of debt and thenarrow
profit margins.
oretically the higher the debt goes,
the
worse
the
problem
of re¬
Many people see some decline

in

business

the

We

matter.

Ahead

pos¬

makes the timing

next downturn

there is

important factor
prosperity we

very

so-called

the

moves on

and in the markets

insurance issues.

some

opinion before this have been

our

election, and
election, that

of the

of these

use

the government

packing,

gas,

probable

Thursday, December 4, 1952

.

Washington

lish

Wellesley, Mass.

Investment Expert, Babson's Reports, Inc.,

From

tries within the orbit of the Eng¬

By H. CLYDE BALDWIN*

\

..

support

serious doubts.
I doubt
•

General

Eisenhower could have found

direct announcement,

a

better way,

that the relationship between CIO

short of

a

and the

government has come to an end than the selection of

A. F. of L. man for his Labor

Secretary.

\

ail

Volume 176

Number 5174

:

.

Th'e Commercial and Financial Chronicle

.

7

(2119)

i

for their

on
a
percentage basis may be
lurking'1 here like a trout in a
(

Stocks ior Christmas Stockings
Author of

Outlining

Take

Are you

scratching your head
gift ideas?
Well,
stop. Here's your answer—stocks!
They're highly personalized gifts
Christmas

with the

name

plenty

of

notice

turbine

the

company

donee

recipi¬
ent) embedded
the face of

on

certifi-

each

cate.

Four

times

a

year,

dividend

on

dates,
the

that

generos¬

your

ity

will, be

pleasantly
i

in

Ira

U.

Cobleigh

d

n

re¬

of

d

e

to

selection

his

and

may

her

or

the

on

new

life, if

turns out to

Amerada
even

you,

zest

added

is,

object* of

be

be

your

Stores

turn

powerful

a

peace.

Allied

very

or

largest

the

organizations

in

rated

out

to

be

turkey, remember that bird is
always in season at Xmas; and
the receiver (appointed by you—
not by court, trust) will have but
a

Further, having read during the
that there

year

only 6,500.000
stockholders in America, you, as
an apostle of free
enterprise, and
a

are

believer in the American way of

life, have

obligation

some

your

bit to increase share

ship

in

is

the

with

fair

our

time

land.

owner¬

And.
listed on

way.

issues

3,000

some

do;

Well, this

the

and

to

major Exchanges, and 25,000 odd
traded

sonal
to

over-the-counter, I thought

wouldn't

you

mind

screening and

ease

sorting,

just

For the

There

Nashvilte

will have
well rounded

Phelps Dodge and

together

spliced
of

geared

Happy New

a

dividend-content¬

the

ment route.

fortune

good

provide

to
via

Year

you

a

with

issues

and

jotted

four

down

for

to

choose

Horizon

Table III

Stocks"

is beamed toward the

progressive, forward

horizons

of

six

down

set

'plush

platinum,

Palm

Beach

stead

of

This

set.

plying

and

in¬

year,

plutocratic

your

friends with say,

fowling piece,

polo

$1,000 British
for the duchess,

a

or,

alligator bag with earrings,
girdle and anklets to match, why
not be practical and pick out a
cozy financial bauble?
an.

V Perhaps you'll like Superior Oil
of California, selling at' a lowly

530,

of

one

the

most

impressive

oil-bearing enterprises in Amer¬
ica, with a long record of retain¬
ing the lion's share of earnings,
thus
building up book and in¬
trinsic

value

technique
capital

year by year — a
persuasive to ultimate

gain.

And

as

such

gain

your

opulent friends;

is

the

know,

you

desideratum

of

they'll like

it, too!
also

at

Travelers

servative

additions to

book

have been made here for
and

banks,

nancial

Gibraltars

Northern

J.

a

P.

stock

margin!

couple

a

Trust

100%

have

apparently

management,

labora¬

its

it goes and it remembers
stockholders. Rayortier has a

lot

of

grows as

motion

forward

synthetics

if

plastics

anything at
to like its

mean

all, and people seem
management and the rate of earn¬
ings growth. Continental Can with
General Lucius Clay as top brass,
has been moving steadily in the
right
direction. The stock is
in

leading

many

trust

grounds

.are

of

-

fi¬

efficiency,

to

give

is

the

among

which

potash,

safe deposit box. Fact

of

these

would

prove

to

out

Some

Nov.

pressive
this

Sherritt-Gordon

department.
of

out

the

tion throws

Recent

in-

all

to

present

prospective, and the injunc-

the

ones

they

are,

two

be

directed

International

largest
diverse
in

by

product

(Quotations from

Paper

pulp and

the

progress

Co.
the

paper

light

more

on

possibilities of

range

If

buying stocks for

Market of 11/28/52)

Price
•

Issue

i

Yield

$3.00 Why bother?

530

Travelers

690

14.00

160

3.00

1.9

J. P. Morgan & Co

290

10.00

3.4

Northern

800

24.00

3.0

$3.00

8.0%

Hartford

Insurance
Fire

Ins

Trust

Co.__.__

TABLE

-

2.1%

II

Dividandies

specu¬

i

Approx.

Dividend

Superior Oil of California

situa¬

e c e

Indicated

About

<

v e r

get

may

*

out

53

4.00

lowly certificates.

27

2.00

64

.For "Diesel-Minded"

.

.

38

Phelps
In

addition

given

maybe

formal

the

to

have

you

lists

Steel

and^ Nashville

Dodge'

37

likes

to

play

a

pick

22,

or

brilliant

B

railway

judgment
crossed
waxed

is

A

24.

analyst

widely

this

path

my

rails

these

of

against

Then

52%

3.00

Houston

25

1.00

there's

another
up

lines—shares

pos¬

TABLE

be¬

list

Speculators

I

;

-

5.7

4.0

'

5Vfe

Ltd.

6

Corp.

Calgary &

Edmonton__

Sherritt-Gordon

,

12
<

Allegheny

solely

4.1.

Price About

Issue—

Lithium

4.0

-

IV

For Sportsmen and

along whim¬

selected

Chem.__.

Lighting & Power

1953.

who

4.4

2.00

International Paper

and

in

3.6%

48

"Season"

in

&

Can

Frobisher,

Issues

might have made
sical

Min.

"1.50

1.60

little rails.
„

8.1

$2.00

4Q

Continental

respected,

those

55
34-'

-:i

International

whose

week

two

8.1

.

3.00

III

Cyanamid

Rayonier '

most

lyrical about the gain

sibilities
He

O at

&

3.00
*

7.1

Expanding Horizon Stocks
American

few shares of New York Central

at

TABLE

with

around

for him (or her)

up

7.4
-

friend

a

trains. In that case, perhaps you'd
want to

7.5

4.50

y ;

37-.

Boeing
~

who

.

market

kick

a

Allied Stores

Technicolor

and

Bethlehem

Louisville

of these

risk

4%

4

This announcement is neither

nor a

solicitation of an offer to buy any of these Shares.

253,008 Shares

Union Bag &

of

Paper Corporation

Capital Stock
($20 Par Value)

the

Rights, evidenced by subscription warrants, to subscribe for these
have been issued by the Company to the holders of its
Capital Stock, which rights will expire, at 3:30 P.M., Eastern
Standard Time, on December 15, 1952, as more fully set forth in
the Prospectus.
shares

the

you read, the carton
groceries arrive in, the towel

your

wipe

cups

your

face

drink

you

wrapping

for

11 find

the

on,

of,

out

paper

the

or

Xmas

your

gifts,

day you're pay¬
ing tribute to International Paper.
every

Progressively,
cloth,
leader.

or

is

At

is
glass,

the

but

Subscription Price $42

and

In¬

eight

times

The several Underwriters may offer shares of Capital Stock at
prices not less than the Subscription Price set forth above (less, in
the case of sales to dealers, the concession allowed to dealers) and

indi¬

earnings, International
Paper common does not appear

not more than either the last sale

•

of

or

current

,

Houston

Lighting

tne

utilities

its

to

&

Power

New

is

and

territory

suggest

stagnation.

For

the

Table IV

is,

offeriny price on the

York Stock Exchange, whichever is greater, plus an amount

equal to the applicable New York Stock Exchange commission.

growing major

lastest

Share

acknowledged',

cated.

inflated.

a

replacing

paper

wood

ternational

one

offer to sell

offer is made only by the Prospectus.

1

newspaper

you

an

The

'most

in

there's

or

any

man¬

likeli¬

Copies of the Prospectus
the undersigned is

.

ore

obtainable from the undersigned only in Statsf in which
as a dealer in securities and

legally authorized to act

which such

Prospectus

may

be legally distributed.

"Sportsmen"
as

the heading sug¬

gests, strictly for sportsmen. Here,

with

some

return

is

disdain

looked
and

of
are

speculative

gain.

MORGAN STANLEY & CO.

upon

the whole

pitch is slanted toward the hopes
Great

risks

present but handsome rewards

be a

cinch!

TABLE I

,

the long-

this

gift-r

your

mind

company

Whether

world.

is

If

which

Merry Christmas for the Upper Brackets

company.

probably

and

very

years.

sure

stockings would

Christmas
darn

next

only

brought
Interna-*

logical

and

dividend

browse

some

is

straightening

preferred stock

in

for'high yielders. Technicolor has




set,, in.

your

the prospectus of

Read

well

your

friends—they like

wishes

speculators,

in

could

we

12, 1952 to perceive the im¬

hood of

"Dividandics"

come-conscious

will be

exclusive

tional's

any

The second table is for your in¬

best

and

written with

was

and

at

iorcefully

more

agement

quality.

fat cash dividends, so you

foods

dishes

some

"Ac'cent".

mink-laden friends that you are a
connoisseur of corporate

plant

Christmas dinner

any

is, most

and

Alberta

into

converts

Quite possibly the

products.

flavor

nothing in

for

it

of

types

many

acid

Morgan whose shares make

lining

contain

do

largest

fertilizers. It also turns out amino

electric

financial

dividend)

The lists

facts

complete

buy anything,

International MineraLand
Chemicals

surely

(about

boom

invest¬

portfolios and on
financial
condition,

of

arid

elegant

of

decades;

victory

Among

out

value

dividend coverage is as wide

Eisenhower's

as

Insur¬

and Hartford Fire; in their
they're the Tiffanys; con¬

very

vestors

looking, yet

possible growth. The

Wonderful

you

Look

ance,
field

the

tory moxie, and sales oomph. This

ment

BETHLEHEM

e

value

foregoing

has
had
producing
wells
long before the current Canadian

patient, individual who likes some
income, yes, but also honeyed

found

d

the

get

and

swings, .; he

from, Table I being addressed to producers of phosphate rock and
the

in

land

mineral

doesn't

lists

separate
you

of

acres

lation.

-

"Expanding

and man¬
agerial vision, Continental Can is
a leading industrial enterprise^/

"Upper Brackets"

are

The

company

in an-investment trust with saga¬
cious management in the portfolio

and

productive

v

and this

energy

Louisville

sea¬

task of stock selec¬

your

tion.

little

a

atomic

Allegheny common is a mar¬
ginal but highly leveraged equity,

and

u

with

slight complaint,, since the stock found wide favor when the above
was acquired at such a reasonable
goals are sought. Surely a classic
chemical is American Cyanamid.
price; to wit and viz., zero.
.

I,

EL, this is)..

Lithium is valuable in the field of

'for
indicated
dividend
of
$4.00. Fill up the stocking with

And

n p

among

age

list

i

surely

to

before you

gold

on

another fascinating mineral
en¬
a' management
terprise with a vast program for
the best. Bethlehem,
nickel and copper and cobalt
second
steel
enterprise
in
ther
production in Manitoba. It enjoys
World, should earn perhaps $6.50
excellent sponsorship.
for 1952 giving reasonable cover¬

America

another

market.

select should

you'll
movies

more

is

of

one

merchandising

if, perchance, the gift stock

you

and

engine,
in war

is

tion

ap-

would

;

Frobisher—a call

bearing this label. Boeing, a lead-; may have a most interesting fu¬
ture. Calgary and Edmonton owns
irlg
aircraft
manufacturer,
de¬
the
mineral
rights to
1,142,019
veloper of a fantastic new gas

and address of-

(alias

and

romance

more

list

a

Steel, NAZARETH Cement, worthy
Canada, in South Africa and
security indeed, as well
the most imaginative sort of man¬ HOLLY Sugar, JOY Manufactur- as some quite "iffy" ones; and I
agement. Lithium Corp.,.producer! ing, BELL and Howell, SANTA am nagged by the thought that, by
of one of the newly found Alkali!
FE, and possibly by stretching a the law of averages, at least two
metals having a weight per pound!
one-fifth
of
that
of
aluminum. point Third Avenue Railway (NO of these will probably double in

that may be purchased on week-days from 10 a.m. to 3:30 p.m.
There are but 15 share-shopping days until Christmas!

for

Such

in

"Expanding Your Income"

attractive andi highly acceptable Xmas gifts

some

"

POOl.

By IRA U. COBLEIGII

topical and seasonal

propriateness.

Decern her

2, 1952.

The Commercial and Financial Chronicle
8

Thursday, December 4, 1952

..,

(2120)

these

obligations

available

at

Dec. 5,1952

may become
levels in the

as

proper

Seattle

market.

Dealer,; Broker Investment
Recommendations & Literature
understood that the firms mentioned

It is

send interested parties the

to

sociation

Heading for Record

at the

Underwriters attending the In¬

something
its

when

of

Dec.

Wall Street, New York

Excess

Upham & Co.,

Industry—Analysis—Harris,

Conditioning

14

5, N. Y.

Pine

Street, New York 5, N. Y.
Stocks

Favored

List

—

Francis I. du Pont &

issues

end

halt,

which

appear

the

Chains

available

Analysis of the

—

these

final

up-to-date com¬

such

parison between the listed industrial stocks used in the DowJones Averages and the 35 over-the-counter industrial stocks
used in the National Quotation Bureau Averages, both as to

13-year period—
Front Street, New

market

performance over
National
Quotation
Bureau, Inc., 46
York 4, New York.
and

Over-the-Counter
counter

stocks

Bulletin

—

a

discussion

how

over-the-

60

might benefit from elimination of E. P. T.—

work

Co.,

Ill Broadway,

6, N. Y.
employers considering new re¬

plans giving the highlights of 61

grams—request

on

retirement

pro¬

business letterhead—Kidder, Peabody &

on

reach

through

larly concerned

year-out

over

Also available

issues

for

Preferred

on

Stocks—Booklet—Union

Securities

Corporation, 65 Broadway, New York 6, N. Y.

Pacific
Co.'s

Bendix

Aviation

*

*

Broad

Street, New York 5, N. Y.N Also available is

report

on

a

special

lin

Corporation—Bulletin—deWitt Conk-

Organization, 100 Broadway, New York 5, N. Y.

Famous Players

James Street,

Iowa Southern

Utilities

Co.,

are

with

South La Salle
same

James

—

an

Also available in the

analysis of the Oliver Corporation.

dealers

some

of

case

a

quick

it

Street, West, Montreal, Que., Canada.

copy—Visual

per

sale.

Valuations,

Inc.,

80

are

Co.

—

Industry—Lerner &

Analysis and review of the Cement

Co.,

10 Post Office Square,

Boston 9,

Mass.
Francisco

Co.

—

Analysis

Vilas

&

—

Reprint of

a

report by B. Brewster

Jennings before the New York Society of Security
Analysts,
Inc.—Socony-Vacuum Oil Company, Inc., 26
Broadway, New
York 4, N. Y. Also available is a
reprint of an address by
Mr. Jennings—"Oil and American
Security"—delivered to
the

Rocky Mountain Oil

Wisconsin
&

Public

secondary

far

so

has

out,

corpo-

as

Service

and Gas Association of Denver.

Co.—Memorandum—Smith, Barney

Co., 14 Wall Street, New York 5, N. Y.

has not been of pro¬

which

would

of

the

make

offerings

new

a

that the

Utilities

Public

rang

another

up

California Edi¬

Southern

Co. adopt the competitive

sale

method in marketing its projected

500,000

shares

of

new* common

stock.
this

time

the

big

coast

utility has been permitted to
dertake

such

financing

medium

of

un¬

through

negotiated

sale.

What brought about the change in

State

the
not

attitude

agency's

the

register

Troster, Singer & Co.
74

N.

Y.

Security Dealers Association

Trinity Place, New York 6, N. Y.




4-

Yacht

(New York City)

New York Security Dealers As¬
sociation

27th

Annual

Dinner

at

the Biltmore Hotel.

May 7-8, 1953 (San Antonio, Tex.)
Texas Group Investment Bank¬

Waldorf-Astoria.

ers

of

Association

American

Spring Meeting at the Plaza HoteL
Dec.

(New York City)

5, 1952

Security Traders Association of Sept. 14, 1953 (Sun Valley, Idaho)
National Security Traders Asso¬
meeting at The

New York annual

ciation 20th Annual Convention.

Antlers.

Continued jrom page

No

with

expected to
Securities and

the

of

"rights"

shortly to
stock probably

the

to

involved

new

holders

present

designed to raise

in the
some

operation

$15,000,000

Southern

Railway

Refunders

open

bids today

New

Orleans Terminal refunders.

to

for $8,000,000 of

week hence it is scheduled

a

market the

second

half

of this

undertaking in the form of $15,000,000 of Southern Railway, New
Orleans, Northeastern division

of

that

commodity

prices

at

last

re-attained

Much

more

certain than economic forces

a prospective ele¬
gains tax. Increas¬

as

stock market inflation is the capital

ment of

ingly is it inexorably freezing large market areas—namely, those
issues

which large paper

gains have accrued during the trebling
which has occurred since 1942. This 26%
emasculating value considerations from investing de¬
cisions on issues participating in the bull market advance, is
functioning as the major, if not actually the sole source of market
inflation and distortion.
And the greater the price advance the
on

take,

the

greater

degree

of distortion,

as

particularly evidenced cur¬

the Blue Chip-itis-priced issues.
To be realistic, the
investor not expecting to remain altogether out of an equity re¬
rently in

placement, must be convinced that the issue which he is consider¬

at least 26%
profit accrued thereon.
Some other factors importantly on the anti-inflation side-ofthe-medal are: The nation's great productive capacity, especially
in the absence of wartime stimuli; and high individual income
ing for liquidation is comparatively overpriced by

taxation

Investor's Inflation Experience Abroad

these

an

to

But

restudy

obligations
available

of

the

pro¬

for

and

make

retirement

the
of

obligations.

defend

himself from

outstanding under
a
general mortgage, maturing in
1956, some $55,000,000 to $60,000,000 of non-callable

4s, 6s and 6x/£s.

Rather

than. gamble. on market
conditions at the maturity of such
was

able cash

to

decided to
take

up

the ravages

of the equity

of inflation, furnishes

interesting laboratory test—particularly in view of the chroni¬
far stronger monetary-depreciation fear on the Continent

cally
than

here.
In the interval

including World War II and its aftermath, the

rentier

naturally has fared the worst. In France the individual
who fled into common stocks, in an effort to hold his ground
the concurrently rising price level over the long-term,
partial protection, albeit not as much as he would have
gained from land or gold. In the United States and the United
Kingdom market "inflation" has not resulted from flight from
the currency.
In the United States particularly, despite the ex¬

against

ploitation of "inflation" for bullish propaganda purposes, market
levels have been constantly justified by criteria of value.
And
here there has been no consistent correlation
prices and the cost of living.
'

the long-term

over

between stock
The

various

inflation

of

course

,

degree to which the holders of stocks and of bonds in
countries
have maintained
their positions during the

use

as

avail¬

much of

in

the

general economy from the pre-World

period to the present, is shown in the table at the beginning

of this article.

v

.*

Conclusions
From

investor

(a)
economy

this record of actual

can

experience abroad, the American

glean the following major conclusions:

He should take into account inflation influences on the
and business as one of many factors determining over-all

portfolio policy,

The road has

issues, it

European citizen's actual results from use

to retire these debts out

posal led to the decision to refund
cash

share

War I

cash.

severely reducing the actual take-home pay of the in¬

vestor.

secured

construction.

Southern Railway Co. is due to

And

expansion,

their levels of 1921.

The

company

sale

will be

for

5

Observations...
wartime

has

Exchange Commission

other

elimination of E P T—

Francis

St.

the

Jan. 16, 1953

Field

Investment

In

yet been made known.

It had been the intention of the

Stocks might benefit from

at

of the

company

Members:

EVENTS

tax

First Time

a

California

The

On the Press—

How 60 Over'the'Counter

party

Traders

Christmas

of the market averages

bonds.

~

annual

Association

COMING

Francisco, Cal.)

Francisco Security

San

Capital Gains Tax Now the Market Inflater

around the middle of next month.

Railway

Hickey, 49 Wall Street, New York 5, N. Y.
,Socony-Vacuum Today

The

speedy operatior

cover

St.Louis-San

at the William Penn Hotel.

Dec. 19, 1952 (San

concerned.

portions

But

Cement

topping dinner

basis

two

or

pointed

was

rates

the

Street, New York 5, N. Y.

Riverside

it was

noted,

one

improving

Until

Memorandum—L. S. Jackson & Co., 132 St.

Campbell—$6.00

Wall

these

knowledge

full

been

son

Pennsylvania Railroad in the Coming Year 1953—By Thomas
G.

point.

"first" this week when it directed

Analysis—Faroll & Company, 209

Street, Chicago 4, 111.

bulletin is

Parvue Mines

—

or

not going to move

were

Commission

Company—Analysis—G. A. Saxton &

City Lines, Inc.

in
took

cases

undoubtedly

Always

Co., Inc., 70 Pine Street, New York 5, N. Y.
National

Telegraph

&

points in yield, but from .05 to
.15 points which separated them

Line—Memorandum—Intercity Securities'

Corp., 330 Bay Street, Toronto, Ont., Canada.

equalling

as

this year.

right out.

West, Montreal, Que., Canada.

Interprovincial Pipe

seen

current

York Second Annual Dinner at the

marketing

Memorandum—G. E. Leslie & Co., 360 St.

—

was

same

with the more

appears,

to this stage,

Cornpo Shoe Machinery

of 1950, tonio Annual Christmas Party at

the Party House on San Pedro
period the Avenue.
aggregate of long- and short-term
Dec. 12, 19?2 (Pittsburgh, Pa.)
bonds has topped $5 billion, ex¬
Pittsburgh Securities Traders
ceeding by a a billion the com¬
parable 1950 period. Next year Association annual election and
For the

But the betterment, at least up

Copeland Refrigeration Corporation.

year

previous peak period.

quite

issue and that of Florida

Bankers

market,

Corp.—Analysis—Eastman, Dillon & Co., 15

the

Club.

to hand,

Telephone

new

from
*

put out in the entire

year-in and

spell.

a

As

Tables

topped the $3 billion figure. This Dec. 11, 1952 (San Antonio, Tex.)
was
some
$60 million more than
Investment Women of San An¬

hav¬

score,

party at the University

Club.

year

will
likely find it necessary to Dec. 4, 1952 (New York City)
Investment Association of New
such material as inventory

most

not

Yield

this

months

less accepted fact that they

securities

Y.

that

come

10

Investment Club annual

Christmas

tax-exempt issues floated in
first

long period.

a

these

as

that they

Aubrey G. Lanston & Co., Inc., 15 Broad Street, New York 5,

the

They have gone right along with
their business of taking on new

Treasury Security Market and Debt Management—Analysis—

N.

several

term

not particu¬

are

on

to

easy

next

ing met the situation

booklet entitled What Experts Say About Mutual Funds.

a

be

the

But they

weeks.

that

recognize

won't

buyers

Power

Co., 10 East 45th Street, New York 17, N, Y.
is

going to
the job of toting up their
and

positions for 1952.

carry

Retirement Plans—Booklet for

tirement

"putting

already

are

Underwriters

or

Earnings—Review—Ira Haupt &

New York

at least a full-sized
Institutional
buyers,

shutters"

satisfied, it

Troster, Singer & Co., 74 Trinity Place, New York 6, N. Y.
Railroad

grind¬

are

special review of Dominion Stores

is

Over-the-Counter Index—Folder showing an

yield

or

days,

the

— Ross,
Canada. Also
Limited.

industry in Canada

Co., 330 Bay Street, Toronto 1, Ont.,

Knowles &

business

major outlet for new securities

up

Food

investment

the

of

underwriting

slowdown.

interesting—•
Co., 1 Wall Street, New York 5, N. Y.
of

wheels

ing slowly to the customary year-

Tax—Bulletin—Stanley Heller & Co., 30

Profits

10, 1952 ( Boston, Mass.)

Boston

The group noted that new longAir

Hotel.

current year.

The

Chica-

goan

Securities

Committee filed its report for the

following literature:

the

at

Dinner

Christmas

eye-opener

an

Municipal

(Chicago, 111.)
Street Women Annual

Salle

La

ica convention in Hollywood, Fla.,

got

Olympic Bowl.

Dec. 9, 1952

vestment Bankers Assn. of Amer¬

will he pleased

(Seattle, Wash.)

Security
Traders As¬
annual Christmas party

as

well as the selection of individual issues.

(b) In general common stocks should never £& held only be¬
cause
of their inflation-hedge attributes.
Now in the American
market, fortunately, they need not be held with that as an impor¬
tant motivation. Since current stock prices are in general fully-

justified

by

value

criteria, today's buyer* of

equities is getting

their

inflation-hedge benefit thrown in as a bonus. And our fore¬
going tabulation shows that this inflations-hedge feature has con¬

siderable value.

•

.

>

Volume 176

Number 5174

.

.

The Commercial and Financial Chronicle

.

(2121)

War

Steel's Future—A Producer's

of

ested

can

the steel

you

point

industry and

as

In

It

factor

mation

try.
in-

tention

to

about equal

as

industry

out

the
and

guide

A. B. Homer

judging
in

grow

steel

this

world

economic

of

uncertainty.
Right here at the outset I would

pro¬

as

industry

are

than

or more

of the country

considerations

the

to

edge

which

thinking on
might be that

your

It

background

knowl¬

already have and that
superior educated guesses might
you

result.

to

warn

will

you

detect

optimism

I

as

that

sure

so

that

you

I

overtone of
I am not

an

proceed.
such

note

a

could

honestly have been sounded very
loudly or clearly a few short
weeks

the
and

the

Then,

ago.

United

States

discussion
future would

in

of

any

try's

people

were

of

doubt

indus¬

an

have

had

to

reflect that doubt.
To

wide

steel

economics

it

is

much

difficult

more

if

going

be

to

the

on

is¬

great

that make history.

sues

Of

the

at

polls didn't undo over-night two
decades of tinkering with natural
economic

forces, of increasing na¬
debt, planned inflation,
crippling controls, higher and
higher taxes and hostility to the
system which is the source of our
tional

strength.

by

the

are

esting

but

vital.

analogy

is

It

that

with

raw

and

take

nobody has
ingot as such.

ever,
steel

assuring, however, is that

items

problems

in

Government
That

Hostility

itself

in

will

these

atmosphere.

new

a

we

gives

the

be

to

of

Government

Federal

is

thing of the past. Instead

a

hostility

distrust

and

government, industry

from

can reason¬

ably expect that its contribution
can
be made in an atmosphere
of

understanding and mutual

operation. We

energies

our

properly
and

not

now

can

be

can

steel.

And

co¬

hope that
expended

on the job of production
dissipated through fight¬

for

wear,

that

Although all of
with

some

a

growth of private industry in the
With these previous ob¬

of

the

steel

of

mine
can

questions

industry

as

a

approach

back¬
some

regarding the
which may be

upper-most in your minds.

impression is that one of
questions you are concerned

My
the

♦An

Second

taking

complete

represent

than a
because it

more

and

prudent to take profits

of

debt

and

how

are

of

This
about

the

is
a

affected

the case, I shall,
generalizing too much
the industry, refer in more

instances

to

know

one

I

my

On

much

work

the other

rather

large

we

profits

in

when there may be little

during the last six

all

of

shipbuilding

tons

built

not

war

know,

us

the

addi¬

not

have

been

of

the

since
and

activity

it

the

profit

end

the

II,
amortization,
many of
would
have

rate,

any

much

in

the

shipbuilding

you

not

are

dark

20

can

we

five years rather
upwards we postpone

over

or

tax

burden

thus

and

make
during this
period, help to provide

indi¬

hope
five-year
we

some

now

gain or lose
over the long-term
through rapid
amortization depends on the rate

about

was

lady sponsor at a
is reputed to have asked the yard
superintendent
how
hard
she
should

swing

the

of income

into

in order to knock the

our

the

ship

hand

worth

in

two

the

bush.

ever

and

major parts—the first is the
of

steel

products—the

and

second

rolled

is

that

steel

the

as

fab¬

will

and

erection

this

normal

And

of

once

know, too,

New

a

steel

cess
our

be carried at

balance
than

in

to

net

our

later
tend

years

to

be

Approach

sheets

a

value

which

is

on

far

our

less

between these two
major divisions of our business.

the

our

case,

you

might do

well

This

can

handle

a

it

from

you

announcement

appears as a matter

by Mr. Homer before the
Eastern
Regional
Conference,

address

sponsored by the New York Society of
Security Analysts. Inc., New York City,
November 24, 1952.




of

capacity. Is there really ex¬
capacity? In order to help*

thinking,

think

to

Second Series I%%

the

Due

facts

Gross National Product and

Steel

Our

Cap Air,ty Not Excessive
studies

there

is

showed

passing
order

that

on

may

be

found

Bethlehem

in

the

tion. If
tional
1919

as

accept the Gross Na¬

we

Product
the

Index

index

Federal

of

stands

Direct

quirements
that

steel

—

introduces
which
and

if

distinctive

a

In

tion

new

be

other
seems

almost

words,
to

not

taken

properly

into

weighted

account

could

make statistical

comparisons
unreliable. For
instance,

highly
during the peak activity of World

December 2, 1952

is

capacity
of

up

same

corrected

out

steel

move

the

not

re¬
are

now

indices

does

line

produc¬
or

down

manner

not

and
seem

as

this

to

measured

b,y
However, if
the country were going to slip
back to prewar requirement and
consumption levels, present ca¬
pacity might be out of line, butt
I doubt if anyone here thinks that
is going to happen.
as

either of the indices.

Both GNP and the FRB indices
reflect the facts of

semi-gar-:
they also re¬

our

rison economy. But
flect the growth of

Continued

January 1, 1958

placement of these Bonds has been negotiated by the undersigned.

Smith, Barney & Co.

element

increased

excessive.

Bonds (Series A)

alone

the larger integrated steel
companies as a builder of ships
on a big scale. We are
recognized
as
the largest shipbuilders and
shiprepairers in the world. That

Board;

the indications

capacity

of record.

among

(and, since

Reserve

Industrial

Production)?
being reflective of the country's

to

fact

since.

a

tion and GNP corrected for infla¬

Industry

industry figures is in

that

long-term, close
correlation between steel produc¬

Bethlehem's Position in
The

with?

of production.

application.

An example of where caution in

someb

the Federal Reserve Board index

JERSEY TURNPIKE AUTHORITY

the

had

we

$30,000,000

company,
about. You

there

affect;

are

100%

NEW ISSUE

NEW

will

studies made relating the growth
of the industry to the growth oft

these

original cost or cost of
replacement. Because this will be

about equally

at

own

earnings

will

and you are-

it

going to op¬
capacity year
in and year out indefinitely.
Now, let's sit back and take ai
broad, objective view of this mat¬

cash

The point I want to emphasize,
however, is that in a few years
many of our most efficient plants

total billings would be divided

how

companies

erate

in

Necessary

will

in

picture in the event
significant decline in general?,

of rapid

Analytical

of

conditions today

almost here

are

years

that

see-

business. I share your interest, for
I know of no one who thinks the

more

large relative

and

fixed

only

our

situation

our

it

you

during these
be

what¬

write-off

do

never

100%.

at

write-off

can

can

that

reversed.

buildings,
bridges, etc.; steel tanks; oil coun¬
try supplies"?forged steel products;
tool steel and many other miscel¬
laneous products.
Under

we

earnings

ships;

railroad
cars
and
parts;
wire
products; bolts and nuts; highway
products; structural steel fabri¬

cation

we

amortization

rication and manufacture of many

products using steel, such

rate

we

than

pro¬

know

also

to

plants.

rate of growth and

assets,

overall activities. Our general
breaks down into two

business

our

is

the water.
You

our

shall have to

we

If tax rates remain the same,
only solace is that a bird in

pay.

christening

taxes

extend to all of

invitation

profit

our

of

will

we

our

interested

1900

Whether

now

Getting back to the question,
industry capacity, 120 million,

of

tons

the cash needed for the expansion

so

of

some

aware,

to

the charming
launching who

as

two.

or

the plants,

plant at frequent in^

our

cordial

a

ter of

to
depreciate

are

rectly, out of the profits

little light
activities of

War

whether

people

you

plants

the

a

shipbuilding

cost

added

provided.

than

Now in making this point about
necessity for caution in com¬
paring companies in the industry
...

World

rapid

the extent that
our

capacity

facilities

new

As

ahead is good.

hope I have let in

the

of the

part

of

doubtful

the

I

of

without

been

a

year

for

except

tonnage

the

is

the

has

long time and
expectation for ship¬

building in the

rapidly

amortization

take

made a real contribution to Bethle¬

hem's income for

would

so

would not have been granted cer¬
tificates of necessity allowing rapid

year

division

sales,
working

day

a

look at

a

tervals and I
you

emergency. If it had not been
the emergency the industry

for

nine months.

or

still, take

off and have

to

and

through

lion

to

ways.

a

charges

items

themselves. At Bethlehem, we are
prepared to take interested groups

by 30% since the end of 1946.

con¬

may

fixed

cash

Better

oc¬

attainment

capacity of 120 million
The industry will have in¬
creased
its
production potential

com¬

the

on

hand,

own

most

and?

making

pletion, we at times may take only
small profits in a year when we
have

profits,
capital.

similarity

being

the

assets

determina¬

much

tons.

con¬

year

on

rather than

deeply

future.

we

your

tion

moment be¬
very

importance of the new na¬
tional atmosphere in shaping the

ground,

the

by major trends in the economy,
the effects vary widely
as
be¬
tween companies because of their
varying product mixes.

the

servations

us

degree

common

felt

between

as

matter.

that

have

tracts

dairy products and petroleum
businesses, or hardware and ladies

extent

digressed

is

and prospects for such
sheets, tin plate, ships,
bridges, pipe, wire, propane tanks
and heavy forgings — to
merely

have

I

there

as

octopus.
I have

a

problems

ing a rear-guard action to prevent
being absorbed by the Federal

cause

for

use

ratios of debt to fixed
book equity in

the problems and prospects of the

great

hope that the deteriorated rela¬
tionship between private industry
and

any

think twice before
applying some
of your time-honored
yard-stick

skim the list—as there is between

Ended
us

start

Actually, we are all making and
selling a vast range of products
difference

out

all

operations in the coke ovens, blast
furnaces and open hearths. How¬

much

to work

We

materials in the ground
these through similar

of

chance

the

common.

mark

Moreover, because shipbuilding tional
capacity to reach 120 mil¬
activities

duction

+*

major in¬
companies have

steel

in

sta¬

•

.

true

tegrated

illus¬

that

•

made

a

if

like
Bikini
bathing
they reveal is inter¬
what they conceal is

would be asking
too much. Our problems are still
very much with us. What is re¬
have

That

uses

best be

may

will

in this country of an annual steel-

Now, shipbuilding, although im¬
portant to us, is only a part of

point

my

hearth furnace will be

open

As

but

much

the decision

course,

its

day somewhere in the
during the year ahead, a

casion

in
always

bottle

suits—what

at short range,

has

me

tapped for the first time. The

shipbuilding

it is not carried too far. Industry¬
wide statistics are very valuable

enough,

even

generalize too much

industry as a
The concept of industry¬

whole.

of

steadier.

At

suggest that in
own
estimates

your

the

tistics

lying sentiment of the electorate
is

about

trated

do not know what the under¬

we

like to

anticipate the future is dif¬

ficult
but

I would

let

program.

Deceptive

arriving at
you do not

role

Bethlehem.

Industry-Wide Statistics

believe

is

picture has
important one. The ship¬
building business fluctuates con¬
siderably, but ship repairing runs

on

•

like

This year it

tract job until it approaches

hope to do is point

can

total.

our

new

an

Our

matters.

tions

ability to succeed and

our

our

could apply these considera¬

you

to

ma¬

reasonable,

to, less,

some

these

which may be

would

on the questions
long-term growth

might stimulate

company

on

capacity,

some

USA

from 10-

run

Bethlehem's

whole.

a

What I

con¬

cerning
our

the

of

of

been

profits.

raw

industry

On

might expect this part

business to

The

capacity
what effect

our

Capacity

to the question of

now

first set the issue in general con¬
text and then deal with the spe¬

averaging about 17%.

would want infor¬

the growth trends

important
matters

seem

you

bearing

trends

present to you
some
of
the

on

and

whether

to

as

It is my

a

would

steel

to¬

1942 to 1945. Nor¬

years

we

our

20%

industry is

on

war

of

excess

assume you

position

well, that

put

Industry

our

mally

technologically.

gress

than all the other

Bethlehem

often

addition, I

terials

indus¬

-

the

and, if so,
might have

any excess

a

major
in that

whether

like information

Corpo¬

ration,

is

its hand

on

own

company,
Bethlehem
Steel

about

inter¬ to find itself with

investment

an

in

our

that

assume

professionally

from

of view

in

I

of

might

four

President, Bethlehem Steel Corporation

are

Steel

Turning

by way of
interest you to know cific
factors
which
must
enter funded debt and fixed charges a
shipbuilding and ship- into
any
balanced appraisal of steel company can properly carry.
repairing billings were more than either
Bethlehem's or the indus¬ I suggest that you consider giving
50% of our total billings for the
more
try's situation.
weight to the relation of
It

that

Industry leader maintains, in view of nation's rate of growth
and increased requirements stimulated by rising
living standard,
steel capacity is not excessive. Expects business to maintain
good volume, despite recurring cyclical fluctuations and buy¬
ers' markets.
Expresses satisfaction with progress made in
beneficiating low-grade iron ore.
think

women

gether.

By A. B. HOMER*

I

and

activities

Point oi View

people

II, the shipbuilding division
employed
more

Bethlehem

men

9

our
on

populapage

28

The Commercial and Financial Chronicle
10

.

..

Thursday, December 4, 1952

.

(2122)

By SUMNER II.

SLIGHTER*

Professor, Harvard University

Slichter reviews movements of

Prof.

v

and prices since

wages

fixing arrangements in the American
inflationary bias. Says this does not
that nation is bound to have chronic inflation, but it

1945, and concludes
labor market have
mean

wage

*

an

member unions that will correct the

inflationary bias, and

Price

non-farm products

Index

and foods

Hourly

Earnings
'

7.6

that labor

rec¬

2.7

4.7

17.9

24.4

point

12.7

.

11.1

11.9

not

some

which may

been

has

tween

March

September

1951

prices, and about two-thirds of the
period a time
of rapidly ris-

1/1946-1/1947
1/1948-9/1948

wages

six

15.1%

(12 mos.)__

11.7

(

(18 mos.)__

3/1950-9/1951

(18 mos.)

a

9/1951-7/1952

(

and

tween'The

The period January, 1946 to
1946

when

were

nearly

lifted.

all price

period, when prices were still controlled, hourly earnings were out-

4.2

'

running both the consumers' price
the index of non-farm

12.3

index and

.9 mos.)-'- 2.6

and

•

wholesale

non-food

the

begininng

Not only has there been a large;Hourly earnings increased 7.6%
increase in hourly earnings/ but:
there has also been a rapid growth' the consumers' price index, 2.6%;
middle of 1952 of fringe benefits. The number of and the non-farm and non-food
in..
this
was even fastprivate pension plans has in- wholesale prices 4.7 /c. During wal
manri foVTnnd?
cr than during
creased from 7,42o plans covenng
ihe
six
vears
5.6 million persons in 1945 to-so strong tnat personal consump1<>40 to 1046— about
14.000 plans covering 9.6; tion expenditures were rising fastthe
war' ne- million persons in 1951.2 Prior to er than personal income after
riod
Between
'he Second World War, only two taxes. For example, between the

middle

of

of

1952,

in

sumes'

23.1%, and the

price

index

29.7%.

con-

group accident and sickness plans price index in this nine-month
started at the initiative of man- period was 17.9%; of non-farm
agement. The employees covered and non-food wholesale, prices,
by group accident and sickness 24.4%; and,of hourly earnings,
insurance (union negotiated plans 1,2.0%. As a results of the rapidtne rapid
and ^nployer . plans) ^increased spurt in prices between June, 1946
in_.194o_ to 15,1 and June, 1947, employees more

It is

noteworthy that both during the
war
period and the postwar pe-

riod, hourly earnings rose considerably faster than prices.
; f
In these

amine

wages

remarks, I wish to

the

movements

of

,

ex-

wages

-

,

„

contributions to private pension hourly earnings in June,
*and welfare funds. Thesejcontri- WOuld buy only about the

and prices, what has been'

the influence of unions

how has

the

on

movement

wages,

wages>butions^increased_fquantity
lion
I94.fi

of

t—w.

.

anions had negotiated sick bene'it
with managements.to'of 1946 the^nnual rate of m
There was a rapid expansion of «>me riter taxesirose by $3.9 bit
negotiated sick benefit and retire- 'ton, but the annual rate ot perment plans during the war with sonal consumption expenditures
result that by early in 1947, incieased by $5.1
ahout 1.5 million employees were
(2) The period from June, 1946
covered by sick benefit and retire- until- June, 1947. In this period,
!?erJ* p ans negotiated by unions, prjces were responding to the re948, over 3 million employees, moval of controls and were rising
ar'd by mid-1950, over 7.5 million.4 jar faster than hourly earnings.
There has been a large growth of The increase in the consumers'

and the
average
hourly
1946

rose

food products

c w

0

non-agricultural in63.3%,
wholesale
prices of non-farm and non-food
products, 56.0%, and the consumers' price index, 46.9%.1 Between
1940
and
January
1946, hourly
earnings in non-agricultural industries rose 50.5%, the wholesale
price index of non-farm and nonearnings

dustries

—4.1

46.9

56.0

tn

m

.

$5 7

Wiiimn

io^n

in

of consumer goods

r.

<"">

«

'■

■1

<

1947
same
as

in

•

of this gain,
for

spent

individuals to cut savings even
faster than the drop in their personal
incomes.
Hence, although,
the tendency of
the

billion, was
As a

$15.8

or

goods.

consumer

of the period of deflation.

The mild deflation was limited by

the

of their

volume

annual

of

rate

1946 to June 1947.

sumers'

Despite the strong inflationary
pressures, employees succeeded in

raising
their
hourly
earnings
sJightTy faster than The advancein
prices. In September 1948, hourly
earnjngs
of
non _ agricultural
earnin«s
°f
—a—»
workers were 12.7% above June
..
1947; the consumers' price index
was
11.1% above; and the index
of
wholesale
prices other than
farm

.products

11.9%

and

foods

was

The: period
round"

June,

1947 to Sep¬
included the "third

1948
of

wage

termined
few

effort

increases.

There

hold

to

was

A

made

was

companies

wages.

de¬

by

a

down

67-day strike

a

.

meat packing industry be-

lx]

index

above
September,
1948,
2.4%
when the consumer price index
reached its high. In the meantime,
the consumer price index had
dropped 3.4% and the index of

prices by 5.0%. Although

strike offer of an increase of 9
cents an hour. Other companies
less successful

were

in

limiting

wage increases. At the opening of
uetween tne general
negotiations between the General
Electee Company and the United
Electrical Workers the company

suit from

a wage

time.9 As

increase at that

result, negotiations
deadlocked for weeks. In
a

in

about one-third of

1948, only

the

million organized employ¬

15

received

ees

upon

the

long-run

movement

prices.

of

.

■

¥T
T
.
Let

.

*

.

1

,.

....

ys

u

falling prices weakened union arguments for wage
jncreases ieci to a rapid spread of

workers

refused

the

strike.

than

more

pensions after a na¬
Substantially

won

tion-wide

million employees

one

estimated to have secured ad-

are

j:tinna]

fus

npneinn

us

what

^sbursempnb

npr

in

hourly

earnings

be-

largest rise

raiiroad'in-

in the

was

dustry—95.4%, and the smallest in
the hotel industry, 44.7%. The increases
were

as

in

the

industries

other

follows:

after

ranL,Gmentq

WGre

iion

in

_f

..

the economy to the lifting of near-

iy an price controls
mer

111
what has been the relationship
between the movements of hourly

0f

in" the

sum-

^945

coal

77.4%

increases. In April
and May 1947, the So-called "15earnings and prices?
Have prices
TT
cent package"
agreements were
risen first and hourly
earnings
afterward, or have hourly earn¬ negotiated in the automobile, rubelectrical
equipment,
and
ings risen first and prices after¬ ber,
Steel
industries
agreements
ward?
In, comparing the movewage

—

Manufacturing
64.1
Private construction ___59.6
Retail trade

Wholesale trade

of

prices,

57.2

Telephone industry

meats

59.2

I

houriy
shall

hourly

earnings with the consumers'price

.

_

also with the

index of

•

1952, hourly earnings were rising ures more accurately than the infairly rapidly in two periods total- dex of all wholesale prices the
fag 51 months and were rising changes in the demand for the

-2?

idly rising

1948,

January
and

1946 to

from

goods made by non-agn-

cuJtural employees.
In order-to examine

September tionship

March

1950

to

of

'

ic

.

„

c...

economic

Eco^nml?

r«nSf^
P/* f
Conferepc^f

sociation

of

Commerce

L

* I

.the ?lucago As,
and

Chicago, 111., Nov. 24, 1952.




Industry,

.

the

,

.

-

rela-

between the movements

hourly earnings and prices, it
pnnvpnipnttri
.

periods

price

distinguish seven

,

of

and

more

wage

.

iThis

•

,

ml nousr' yt

bhu

.

the weighted average of the

«

railroading,

con

the

'telephone

s* u" t i oS'
r

industry,

ho-

an^ retail and wholesale distribution,
of

the

country.'The

were

hourly earnings

average

weighted in-1946 and in 1952 by

down

wacfpc

_

„

defeated on May 25
settlement between General

a

and

mobile

Workers.

the '

United
The

Auto¬

contract

the Bureau of Old

Assistant Director

——*
Age and Survivors' insurance, Federal

Social Security Agency. The figures melude plans of non-profit institutions as
well as industrial plans.
In 1951 about
ttOO or 900. plans were of non-profit in¬
stitutions.

These

about

covered

200,000

persons.
'

called for

an

an

increase of 11

3

cents

hour plus future adjustments

Rosenbloom,

"Selected

Hilda,

Issues

Tnaivffs o^ExLTin^Act-T^d^srud^of

for changes, in the cost of living' Proposed Massachusetts Program, Chapand an automatic increase of-2 ter I, An unpublished thesis.
cents an hour once a year for o{
'' WeiTit!
gains in productivity. Settlements and Retirement plans under' Collective
quickly followed in the next two Bargaining," Special Series No. 6, August
_

f

wholesale prices of commodities printing industries the settlements
other^ than farm products and exceeded-the 15-cent package,
foods. The latter index is more
(3) The period June 1947 to
times than others. During the 78 satisfactory than the index, of all
August -or September 1948.
An
months from January 1946 to July wholesale prices because it measImportant change occurred inithe

from

1949

1Q.„

,

upon an evaluation of fringe months in the automobile indusIniu5trUi Co»t«ren« Board,
beneflts such as paid holidays :ancl try, the steel industry, the rubber "studies in Personnel Policy," No. 112.
some insurance plans.8 In the bi- industry, the agricultural imple6 There were, ot course, time* when
tuminous coal, construction, and ment Industry, the aluminum in- nUkLrXTp °in "wiT elrningllnMS"

The rise in hourly earnings has
been considerably faster at some

ln»rKV0 pe.ri®ds ^alpeno.
rap~
hourly earnings were

mil-

$450

over

1950 than in

a

"'earnlngs'^and based

compare

53.7

index and

hold

finally

Was

by

,,

Motors

The period June 1946 to June
1947 lncluded the famous "second
round" of

.

Bituminous

for

As

'
( ) -Th® pcti®# ."July, 1949, to
Continued on page 26

demand

steel, and agricultural implement

taxes reflected the adjustment of industries -to

in&s.

the middle offi'wJesls*. SS

incomes

crease

JnCFeas^.„at

average

bene-

coverage

during^ 1949. ^

- the firgt time

neater

sirkne^

nr.

gaineft

to have

or

They $11.9". biiiion. The tendency for of the large companies in the ^ distribution °f employment in March,
hn!,r wnrtaJ consumption expenditures to; in- automobile, electrical, rubber, .2 Figures provided by Mr. Robert Ball,
hour worked
faster than

begin by looking briefly uisDursements per
has happened to wages
Tt mo.re be"
during the last six and a half tween 1946 and 1952 than is mdiyears. I have said that the increase
by the rise in hourly earnat

1949.12

in

increases

The fact that
iliC

were
April 1948- the United States Steel
Corporation

wages and

major¬

a

ity of union workers are estimated
to have received wage increases

ginning on March 16. The comPames were successful in forcing pension and welfare plans. It was
*be union to accept their pre¬ in the fall of 1949 that the steel

proportion of their incomes for of the United Steel Workers for
ary. disbursements
by
private consumption goods. Between the a substantial increase and reduced
business, and in 1951, 2.2% .These third quarter of 1946 and the see- t)ie priees of many finished steel
contributions* of employers to wel- ond quarter of 1947, the "annuals products.-, This action stimulated
lare ana pension funds do not, of rate of personal incomes after>the resistance of large concerns to
course, represent the cost of all taxes rose by $2.1 billion, but the wage increases. A strike of 75,000
They do, not, for annuai rate of personal consump-/Chrysler employees over wage
example, include the cost ot vaca- tion expenditures went up by issues began on May 12. The effort

ing arrangements in the American
economy have an inflationary bias
and, if so, what is likely to be the
effect
of
this
inflationary bias

the

and

non-farm and non-food wholesale

above

tember,

price

wholesale price level were both
falling and unemployment was increasing, average hourly earnings
in non-agricultural private industry kept slowly rising. Average
hourly earnings in July 1949 were

.

terested in whether the wage-fix-

in-

/

-

.

*

personal

inflationary
pressures, comes after taxes dropped by $7.1
though still strong, were substan- billion between the .third quarter
tially
diminished.
In
the
15 0f 1948 and the fourth quarter of
months from June, 1947 to Sept 1949, the annual rate of consump¬
1.948, the consumers' price index tion expenditures did not drop at
increased 11.1% in comparison all.
with 17.9% in the year from June
Despite the fact that the con¬

prices.

the

Slichter

H.

this

During

of

Sumner

3.4

63.3

result,

be--

1946nland

closely the

price movements:

controls
.

5.9

9 mos.).,

9/1948-3/1950

in

prices

che

(12 mos.)__

more

periods of distinctive wage

(1)

in-

crease in

and

examine

us

seven

June,

1/1947-1/1948

deed,- the

Let

July

and

follows:

ing wages. In-

and

15.9

-

low

the end

2.4

8.4

6.2

„

..

be¬

1950 and

1951

—5.0

1.0

5.6

June, 1950-JVlarch,

(6)

1952, the increase was quite slow.
The rise by various periods was as

time of rapidly rising

a

1948 and

ber

the period since
War

the end of the Second World

—3.4

3.5

September 1951. Between Septem¬
.About half of

2.4

.

other powerful

deflationary influences
offset inflationary bias of wage increases.

Points to

cies.

unemployment, though
point for prices, is

in

the

the month that I have selected for

•

ommends, in addition, strongly restrictive credit and fiscal poli¬

low in the third

a

quarter of 1949. The month of
July 1949, the low point in indus¬
trial
production
and
the
high

12.0.

i946'-June, 1947__
(3) June, 1947-September, 19481June,

(2)

reached

comes
Wholesale prices of

Consumers'
r

probability of almost continually rising prices. Urges
federations work out a national wage policy for

increases

1946 and July 1952.

During most of the 78 months be-, riods
tween January 1946 and July 1952, farm

Wage Policies Since World War II
Lamont University

price index declined, and two pe- wholesale price index
in which the index of non- than farm and food

of other
products
and
non-food
wholesale reached its low in August, 1949,
hourly earnings have been rising prices declined, but there were no but this low was repeated in Octofaster than prices, but there were periods when hourly earnings de- ber and November. The general
two periods, totaling 18 months,'clined.6
The percentage change index of wholesale prices did not
in which
prices rose more than in hourly earnings and prices be- reach its low until December 1949,
hourly earnings. There was one tween January 1946 and July 1952 and the consumers' price index
period in which the consumers' were as follows:
until February, 1950. Personal in¬

tween January

or

less

distinct

movements

be-

economy
nf

iui?

after the second quarter
Personal

dustry, the electrical goods indus¬
try
in

arid
the

others.

The

settlements

automobile

industry were
generally for 13 cents, in the steel
industry 13 cents, in the rubber
induMry 11 cents, in the; electrical

companies 8%, in the aluminum

be^ S industry

an average of 10%.»

; 7 Between
January,
1946
and
June,
1947, hourly earnings, in non-agricultural
private industry rose about 20.6,%; the

consumers'
8 The

began

price

index,

second' round

in the fall of

20.9%.

of

wage

1946,

increases

but the

were

large

made

• 9 "journal of Commerce," March 2 and

;3-^„cil

ot Econoniie AdviMr3. ^

increase and by the third quarter . (4) The period September, 1948 Economic Situation" at Midyear 1948,
of 1948 had reached a high rate —- to about July, 1949. This was a
■ d
f indnityh»i ^production
namely

$13.3 billion

a

year.

though the annual rate of

Al-

person-

period1 of mild deflation. There is
some

was

i6i

question about when to date men1

was

the

and

volume

of

unempioy-

4,095,000;- m July *948, the

al incomes after taxes increased the .end ofthe. period. The.186

between ^ ^COnd^ quarter, Of.Of, mdustrial production reached
^Co«ucil,«i;Ecouomie Adhere, "The
4947 and
third quarter of 1948; its low point iri" July 1949* and the Annual. Economic Review,*' January wso,
by the large amount of $28.8/bH- voluine of^ unfemploymenh its: high
lion, only a little more than half point in the same month.11
The

13 Council

pi 36".

' /

:

of Economic .Advisers-,

'

' '

Ibid.,

Volume 176

Number 5174

.•

.

The Commercial and Financial Chronicle

.

(2123)
with

Business Prospects During
Next Four Years

The

government

(1) less inflation;

opinion Eisenhower election

(2)

and

been

more

basic fundamentals:

as

(1)

paternalism.

during the past 20

means:

decline

a

in

form

government is committed

of

Labor

t

a

w

would

you

three

is

everyone
W h

that

in

questions

asking

be

that

today.

(1)

i 11

what

is

Eisenhower

although he

to

strife

try

by

accomplish

during
next

(3)

There

will

the

people,

busi¬

during 1953?
(3)
What
is
the

the

longer

term

crisis

outlook

—1954,
and

1956?

that

No

Giluert

MacKay

these

but I will

give

you

they

what

for

are

I

the

Eisenhower

Election

Means

constant—in

will

we

rather

Had

have

than

the

other

economic

automatic

Democrats

words,
stability

a

(2) More efficient Government
spending.

Total

penditures
year

the

have
$90

and

ex¬

averaged
billion

a

with the Democrats. Under
Republicans it will average

about
in

government

would

$86

between

$10 billion less

short,

spending

current

near

per

will
of $75

levels

further.

This

takes

remain
to $80

into

consid¬

coordinated

more

a

mil¬

much

Greater incentives for ev¬
The Excess Profits Tax is
to die next

sure

sum¬

but the normal rate will re¬

mer,

main between 52% and 54%.

Per¬

sonal taxes will be overhauled, al¬

lowing

incentive,

more

much, if

Unfortunately, the govern¬
deficit

ment

will

range

between

and $12 billion annually

$5

they

but

will not be reduced very
at all.

dur¬
under

ing the next four years,
present tax schedules. Even though
military spending were substan¬
tially cut, the deficits will remain
the same.
The reason: As

government
spending
declines,,
unemployment increases, thereby
reducing payroll tax receipts and
increasing social security payouts
Furthermore, corporation tax pay¬
ments to the government would
decline.

government's
to be

appears
a

Unfortunately,

our

break-even
point
high, we will get,

so

deficit with

Better
The

relations.

working

erage

Union

will the
to

the

wage

(4)

has

man—but

Leaders.

No

not to
longer

Walter Reuthers dictate
House.
However,

White

rates will still advance each

although at a slower rate.
It is interesting to note that the
Labor Government in Great Brityear,

For the first time in

our na¬

history we are confronted
by the existence of a world power

equal to

other —3

any

4

or

$16 billion
real effect

So

much

for

the

it

Eisenhower

is

in

turned

trip

one's

at

and

it.

our

then

(1)

in

1953

to

which

Full
effect

in

is

means

full

additional

3

equivalent
adding be¬

are

to

address

by Mr, MacKay
Meeting of the New

the Annual
,Utilities
Association,
November 21, 19S2.

Absecon,




before
Jersey

N.

J.,

we

the

vey

(2)

billion.

fall—unless

end, in which
would have to re-sur¬

entire

defense

current

near

throughout 1953.

no

per¬

off—certainly

fall

not

will

to

Our

defense

reach

not

our

Then, they will level out
not

decline until

1956. In the

or

result

a

there

is

construction

between

to

years

should
for

em¬

act

all

If

come.

have

not

(4)

900,000

in

has

act

tested, but it is

never

pos¬

duction should

6V2

million

5V2

this

powerful

a

tion

has

ment

that

two

choices:

creeping

or

is

this
any

when

future

will

in

followed

be

(2) Our "Labor"

have

You

pattern—

particularly those that have new
"gadgets" attached.
(Examples:
Refrigerators,
vacuum
cleaners,
Room Air Conditioners, etc.)

rected.

As

a

nondurable
tries

to

than

result,

we

so,

we

let

summarize

us

what

mean:

inflation.

creeping price
learn

had to

to

semi-social¬

set

new

our

when

stay. In reality we have had a so-

in

Administration

the free world has

in

of

rather

a

business

business lives

the

under

new

Administration

as

one-sided

IV
The Longer Term—1954-1955-1956
We

be

have

three

that

seen

record

a

boom

following

1956 there

ering

are

the

on

1953

should

In

year.

have

Truman.

The

not to

more

many clouds gath¬
horizon. These in¬

and

declining rate of marriages
family formation, heavily sat¬

urated

markets

for

most

durable

goods, rising instalment credit and
uncertainties

with

respect

expect:

we

rises,

a

more

ment

will

power

in due

—

com¬

rules

our

offsetting factors.

In 1929, of our
was hired

total work force, 1 in 16

by Federal, State and local
ernments.

That

left

15

of

out

six

subject to

ployment—quite

better

13

wage

In

addition,

mitted

the

period,

as

and

have not

we

in

excesses

The

rise

of

the- labor

v

com¬

this

boom

did in the late '20s.

we

Stock

absent.

unem¬

Market

inflation

is

Overbuilding of factories

homes

on

a

per

reached

never

heights.

capita basis

the

old
dizzy
Our debts, in spite of re¬

cent

increases, are relatively low
compared to the past. In short, we
do not have much to liquidate this
time.

.

On

top of all this, the average
de¬

a

pression,

225, compared with 217 this year.

which he has continu¬
ously expected since 1948;
In conclusion, if is important to

Incidentally

come

(1)

The FRB index to

highest in

(2)

tons,

this

our

Steel

average

would

be

the

peacetime history.

output:

compared

with

113

million

105

million

in 1950 and 90 million in 1952.

der

back to my comments on the

leadership

new

to

were

(3)

Total Electric kwh sales -to

be up

If

experience
a

7%—from 338 to 365 billion.

the

will have

we

Eisenhower.

pression for
middle

a

major de¬

couple of

years

it would

1950s,

un¬

country

our

in

be

The

cost

of

living

to

re¬

How¬
will be up 4%, so real
purchasing power will be higher.

(5)
are

Our

virtually unchanged.

ever, wages

industry backlogs
the highest on record in

Heavy

now

Allies

would

sia's trap and

fall

into

turn Socialistic ourselves.

living knows this

Rus¬

would probably

we

as

well

No

as

one

Presi¬

dent-elect Eisenhower.

This announcement is neither

an

offer to sell

nor a

solicitation of an offer to buy

of these shares. The offer is made only by the Prospectus.

260,227 Shares

Magma Copper Company
Capital Stock
Pax Value §10 Per Share

Rights, evidenced by subscription warrants, to subscribe for these
shares liave been issued by the Company to

holders of its Capital

Stock, which rights will expire at 3:30 p.m. Eastern Standard Time
on

December 11, 1952

as more

fully set forth in the Prospectus.

Subscription Price $24.50

a

Share

And if any

pro-labor

govern¬

come

into

course.

that

A copy of the Prospectus may

level.
us

In

against

production
will
be
at a relatively high

any

a

of the Undcricriters
the

be obtained within

as may

any

State from suck

be regularly distributing

Prospectus within such State.

event they cushion

real depression.

Lazard Freres & Co.

IU

.

The Outlook for 1953

Practically every forecaster ex¬
pects business to decline after the

unions first few months of L53.

T^e av

a

catastrophe for the Western World.

increases have

probably

maintained

to

food, clothing
and
medical aid than ever before.

16

difference!

a

since Korea

paternalistic government. Most of
with

gov¬

of

out

subject to private unemployment.
Today, one out of six is hired by
government, which leaves only

defense pro¬

(4) Defense expenditures guar¬
antee

mention the 3V2
accustomed

the

to

level of government spending.
I
would like to mention two

serving at present,

become

the

through

years,

Administration fails to allow such

a

youths that served in the

last war,
million

as

started

(3) Annual

although admittedly it will not be
million

we

become normal habit.

This will be true at home

labels.

1953

1952.

gram.

pro-labor

cor¬

expect the

higher

defense

and ^procedures. And still another
new set of rules has to be added

istic. type of government is here to

called

bad

now

manufacturing indus¬

average

in

reaction

Their

are

businessman is seasoned to

Thus, for 1953

depression

Since 1939 all businessmen

plete

the long run.

or

months.

offset.

an

(2)

judge for yourself which path

can

as

words

Unemploy¬

Inflation.

to

appliances

similar

a

since then they have voted
for full employment—or in other

Administra¬

any

industries have

violent

a

15

rency;

weapon

Unfortunately, economic history
us

last

likeli¬

little

these basic fundamentals

against future depressions.
teaches

least

compared

Most

year.

show

to at

amount

units

pro¬

mean¬
are

the

The

truck

(1) Up to 1932 the majority of
fully the people voted for a sound cur¬

been

and

1952.

Automobile and

should

in

goods

long time. In the more dis¬

a

Now

means
to
promote
employment, production

purchasing power."

This

should

1,000,000 units, or not much differ¬
than

Soft

through

five

Home

remain

ent

(6)

that
the
defense program
will be cut substantially for many

practicable
and

levels

A recent survey

companies shows

our

(3)

>

industries

structure.

should

tant

maximum

program.

New plant building should

remain

real

any

hood

—

use

Korea

sudden

spend¬
ployment of physical resources.
The Unemployment Act of 1946 ing may be moderately reduced,
works expenditures will
states: "It is the responsibility of public
the Federal Government to

It should

peak of at least $58

a

next
a

go

Currently it is at

of $53

to

will

automobile

new

'

*An

billion

(4)

As

these young people were provided
.•

rate

expenditures for

time Russia and her satellites

com¬

Employment

the

still outproducing us in weapons.

well

as

basic funda¬

Government

Our

tne

spending

down.

increase to

main

1953.

and

under

mentals.

mitted

and

is functioning sibly 1955

five

are

not

the

of

we

defense

see

clude

Military

(1)
up,

of

as

them:

projected peak until the last half

look

the longer term outlook through
There

2

expenditures

attempt to forecast the
business

of

trend

fundamentals

economy

that

dollar■/ volume

business

America.

let's

Hence,

be visualized when

can

manufacturing

country than by getting

basic

the

few

a

better way to analyze

from

which

South

around
no

own

away

and:

anoth)£f busi¬

months before made
ness

Now let's look at the facts

this

pre-Korea. The

year

weapons

tween

There is

autos

see

ahead

Compare

1953, 1954 and 1955

the business picture. I recently re¬

Europe

a

realized

annual

Administration. Now, let's look at
from

least.

at

with $1 billion a year prewar and

Fundamentals

for

are

with

slackening in the overall heavy
industry picture next year.

causing

the demand

Consumer hard goods, such
and appliances will be
"overly saturated."

important,

more

years

from

thereby

in

(4)

as

in potential size and

us

strength—and,

history.

Basic

country

Ad¬

is

tion's

varying degree of "labor" govern¬
ment, regardless of political party

ministration will cater to the av¬
the

of

labor-management
Eisenhower

This

further,

decline

will

these

course,

We do not

inventory positions

reduced.

were

for the past 20 years. In fact every

fense program.

(4)

times

without the de¬

or

1948.

over

de¬

Of

weighted

contracts.

gone

houses.

sharp contrast to all previous ceptible
set-backs, when wages 20%.

own

different

The

real

new

peacetime.

heavily

reasons

spending will

business

II

about

also

its

decade in oui1

eryone.

practically

show

1956.

'

wage costs
plus fringes) in¬

pay

four

are

New family formation

decline
a

the

leadership,
(5) Our expenditures for de¬
imagination and statesmanship. If fense and related
activities will
it
misses
this
chance,
a
real
average between $45 and $55 bil¬
calamity will occur. The 1950's are lion yearly for some

as

itary exoenditures program.
(3)

in

In

years.

the

like

year—

billion rather than increase much

eration

be

an av¬

year.

business

4V2%

co¬

not

Eisenhower.

there

won,

good

known to be antagonistic to the
is not going United States.
Walter Lippmann
"Coolidge-Hoover ably
describes
Russia
as
"the
Golden Twenties." Business has,
largest empire in the whole his¬
after 20 years, a real opportunity
tory of mankind."

price inflation of at least 2

to 4%

creased

a

inflation.

probably would have been
erage

in

in

Administration

new

to

to

(1) Less inflation. The purchas¬
ing power of your dollar will re¬
main

a

percentage

true

recession, hourly

—

always
great leader. We have

leader

be

bad

(take-home

(6) One word of caution: Every

worth.

What

in

different
will

1949

businessman must realize that the

answers

opinions

our

of

He will have

by

This

and

unify our
setting class

democracy

produced

1 9 5 5

knows all

one

rises.

of the past seven, or more

our

(3)

event,

.

There

of

average

plant and equipment
expenditures will fall
about $5
billion—or 20%.

varying

Fortunately,

years.

years

an

New

came

foreign program

mess

(2)

creeping

many

for

-(I) Military
er etRte.

There will be many more to
come,

will

instead

ordinated

about 212.

have less labor

He

against class.

outlook

be

for

200

for this expected decline:

Republicans but
we going to have

real leadership at home

us

abroad.

and

this

reverse

ahead—5 to 10 at least. So
long as
unions remain powerful there will
be
annual
wage
increases.
We

lower wages.

or

can

year

around

a

be able to arrest

may

erage forecast is this: The Federal

Reserve Board production index
will start out around current lev¬
els of 225 and end up the

just had
our
7th
annual
"pattern" in the 7 postwar years.

may

the

no means are

ly give

(2)

general
ness

We

called

now

they have
during the have

12%

over

only

(5) Eisenhower will undoubted¬

four

is

Government

under

stable

tne

years?
What

Churchill

continuing

a

the trend for the next four
years.

under the

yet,

year;

business¬

Semi-Socialistic govern¬
It
is
extremely doubtful

ment.

that

rise

to

wages

a

past year.

Admin¬

istration

3%

increased

the Eisenhow¬
er

allowed

am

about

the

or

wage-inflation

thought

short,
there has

years

ployees. The result:

Employment; (2) our semi-socialistic government is
here to stay; (3) a creeping wage inflation will
continue; (4)
Russia's great power will still confront us, and (5) defense
expenditures will continue high, ranging between $45 and
$55 billion annually.
1

In

prestige and a correspond¬
ing rise in the influence of em¬

Full

interested

the

policies

man's

greater incentives for everyone;

Gives
to

and

designed to maintain full employ¬

efficient government spending;
(4) better labor-man¬
agement relations, and (5) a coordinated foreign program.
(3)

employees

7 million farmers vote for

ment

expresses

be

to

power

million factory workers,
million Federal and State

15

the 6V2

Partner, Gilbert MacKay Associates, New York

MacKay

tremendous

vested in the union leaders' hands.

By GILBERT MacKAY*

Mr.

17 million members has

over

caused

11

December 1, 1952

any

12

The Commercial and Financial Chronicle

(2124)

Thursday, December 4, 1952

...

■

■

J-

.

different from a dollar spent on
farm support programs.
The
activities
of
government

et

trust

Economic Stability Through

conditions.

policy appropriate to economic
It requires a debt
management policy which acts to
counter any pronounced inflationary

funds

Vice-President and Economist

nomic

*

importance.

funds

has been made
combating depressions and inflation "by automatic means
through adjustments in fiscal policy," or "built-in stabilizers in
the Budget." Describes these "built-in stabilizers" and rela¬
tionship of taxation to business trend. Opposes ceiling on
power to tax without like ceiling on power to spend, and points
out "taxation itself may have inflationary repercussions." Fore¬

Why
eral

do

progress

connect the Fed¬
with the subject of
The answer is,

that every Federal dollar

I think,

and

intake

of

of outflow has

economic

a n

The

impact.

the

.

the

aid

of

behest

the

at

effects

rates of the excises

of

In

mist

spe¬

makes

the

Wesley Lindow

smaller,

you

other

mushroom

works

government spend¬

way:

taxes

subtract

The

stream.

from

combined

that

effect

all of the dollars coming into

and

Treasury

all

the

of

of

the

dollars

going out of the Treasury may be
inflationary, or it may be defla¬

Federal

ramifications

budget

heading
trr

"fisc"

derived

which

scribes

encing

on

The

matters.

its

staff

for

about

15

etary

noun

dictionary de¬
money basket or a

fiscal

People

by

terms of
Federal deficit in the

in later boom

broad

periods in order to

there

the
is

policy

iture

maze

business

obviously
than

In

a

should

embracing the

as

of

cy¬

more

this.

fiscal policy

sense,

though| of

whole

Federal surplus

a

counteract
But

fiscal

be

talked

in

policy

running a
depression and

to

The

the

conditions

matters.

about

the

the

a

as

policy.

from

business

conscious action in Federal budg¬

cle.

tax

and

expend¬

making up the
budget picture. If infla¬

programs

Federal

royal treasury.

obvious that fiscal policy tionary
involves many technical and con¬ should
is

It

questions

answer

economic

sion, more and more attention was
given to the possibilities of influ¬

the

of

under

come

fiscal

of

is

n

help

on

tionary, or it may be neutral. These help
economic

all

govern¬

ing

all

and

other

revenue

programs

on

the

Role

of

Fiscal

for the business

cure

that

argues

sick

from

pressures

taxes

present,

are

increased

be

to

re¬

place

if

the

is

economy

shortage

a

in

the

of

national

equalized.

are

demand

market¬

He

of demand in relation to sup¬

ply, budget surpluses should be
provided until supply and demand
brought
into balance once
again.
In his system, which he
calls
"functional
finance,"
the
public debt would be allowed to
are

move

in

either

nitely

as

a

direction

indefi¬

counterbalance to the

business cycle.

free-wheeling public debt
advocated by
Lerner has been
criticized

by

The

extreme

go

so

far

reasonable

and

of

use

debt

stability

in

the

value of the dollar. It requires the

of

conduct

day-to-day

financial

operations of the Treasury so as
avoid disruptive effects in the

to

markets

money

and

to

comple-

ment other economic programs.

".

the

.

.

urged

to

taxes

be

government

cover

.

repeatedly

sufficient

that

levied

Treasury

.

ex-

during
the
present
period. The Treasury also urged
the
importance
of having
the
penditures

right

kinds

with

of

taxes

tem. To seek

by taxation

revenue

is not

enough. The burden of the

taxes

must

be

equitably distrib-

uted; and furthermore it must be

adjusted in such

to

pre-

our

free

way as

a

incentives

the

serve

of

enterprise system.
.Through action of Congress
and by Executive
decisions, the

as

is

change;

and

critics

to

almost

deny the
fiscal policy.

whole

it

is

to

constant

the

of

appro-

cumstances

major'

budget

objective,

in

opinion, is to plan our reand expenditures so that
there is a budget surplus in inflationary periods. This offers a
counter-inflationary
drag
and
helps to keep the debt down." 2
»
my

ceipts

Unfortunately, it is much
difficult

to

work

towards

more

sound

I

matters.

For

dis¬

my

will have time only for

duce the

cifically,

at

least

the

potential impor¬
policy, was not gen¬
erally appreciated until fairly re¬
cently. One of our leading pro¬

tance of fiscal

fessors of

finance, Robert Murray
Haig of Columbia University, has
stated
when

there

that
World
was no

far

so

War

I

knew

broke

out

teacher, "even at the

largest universities
♦An

he

as

...

who

was

^iov. 25, 1952.

I*

same

eco¬

The

same

penditures.

thing is
A

dollar

true
of

of

ex¬

expend¬

iture for interest

on Treasury dis¬
probably has a very
different impact than a dollar of

count

bills

welfare assistance payments to the
States for the needy aged.
A dol¬
lar of Post Office deficit is
1

Robert

Murray
~

ground
-

of

icr^e

Our

quite

Haig,
"The
BackFinance," Political
Sept<
September 1943, pp.
%

ir
War

Quarterly,

levies and the size and

.,*16-331.

help to achieve the joint
objectives by decisions made on

interest

t

A




rates

securities

and

the

choice

of

For

answers.
a

than

instance,

it

there

impact of taxation. Also,
live

in

fected

a

by

tionary

vacuum,

human
af-

are

decisions. In infla-

our

periods

more

don't

we

and
beings rather than robots

or

people

be

must

receive

less

from

government spending, and this is

going to be popular politically.

not

In

depressed periods there
such

no

taxes

difficulties.

are

Reducing

and

ters

recently in reporting to the

Patman Subcommittee
".

.

.

With

mestic policies

respect
.

.

.

as

to

follows:
our

do¬

(our) objective

..Wf—*•

>0

;l,\.

t

,

V

r

's.

of

the

tax

structure

often.
The
fact
remains,
nevertheless, that taxes should
certainly not aggravate the business cycle by being inflexible.
very

through

always

to

get

rather than unwanted

wanted

effects, and

develop better budget machinery,
But fiscal policy should not be
pushed as a substitute for monetary policy, which is

much

a

ter tool for short-run

bet-

quick turn-

around operations. Together fiscal

policy and monetary policy

can

do

much to provide economic stabil-

ity. The better they work, the less
demand there will be for governrnent interference with the market
place

through

the

use

of

direct

controls,

^
,

_

,

e

,

,

,.

^

°.
mei\

w^at extent
V1

,

can the adjust-

^lsca*;fPolicy tjhat

are

ne9ded to combat depressions and
lnflation be introduced by ^to¬
"J. !!fs, .or
hat may be
Budget'

m
.

answerZT
answer is

The

±Jua&etgreat

has

a
a
been

stabMzers

are

built

of

Automatic
,

that

progress

ine

deal

that

stabilizers are built
in several

,

mto our tax structure

rlse m

>f° example, they become
2- {» vfr Progressiverates

a ,9°

of tax whlch should have a deterconsumer spending.
.,s
+1
r?u*t*+dePressi°P»

ring effect on

* f. ncome ^ax
mcurred^
fa ? 9Yen *aster-. The. result Is
t*13*
dr°P ln lnc°me is
vea grea?9r
relative drop in the tax. This
™lght "ot m.ake a man much hapPier,whose income is falling, but
,

taxes

aild

Committee

"Monetary
the

tions

expenditures, fiscal

*

2 82nd

of

_

Congress,

and

and

2nd

the

on

Policy

Public

other

Debt

Subcommittee"),

the

Joint

Report,
Management

Replies

material
on

Session,

Economic

and

Debt."

the Subcommittee
trol

|>.enfra* drop 111 ;m-

cor99; Such
are felt "lore
rapidly now that the personal m-

+tax 18

a ™rrenbasis
taxes being withheld 1 and
™ J? qu+a^,?r. y Payments to meet
estimated taxes.
•
'
'
The corporate tax also provides
sonJe stabilizing effects..Under our
P*em °* trying business looses
^ack °r forward when computing
taxes, the Treasury cash register
can'.1.n effect, be reopened as
condltlons change. Thus when a
oss occurs a taxpayer may drawon some of the hlSher income
taxes paid in the preceding year,
thereby alleviating his loss in the

TcTur.rfe^ gfr+lod' /<*'example the
.y™ted States Steel Corporation
^ported a- pre-tax loss of about
i^S1011 in tke second quarte^
wken

°,

for

to

the

quesuse

of

General Credit Con-

Management

1952,

pp.

("Patman

10-11.

plants

were

ci°*Y
ar several weeks because
the steel strike. This loss was
converted into a net income of
approximately $22 million, howby establishing a cash tax

ever,

credit of $43 million from earlier
tax payments when substantial income

earned

was

Automatic
provided

stabilizers

in

several

The

programs.

also

are

expenditure

Federal

program

for

supporting farm prices is an
example. If the market for agriculturai

amount

products
of

erations

declines,
the
spent by the
price support op-

money

government

on

will

increase.

Some

people will say that the price supports are too high or too
rigid
under

present law, but the prinis surely that of automatic'
stabilization in any event,
Also, the Unemployment Trust

ciple

Fund collects taxes in
excess of
benefits in boom periods but auto-

matically turns about
benefits in
pressed

excess

to

pay

out

of taxes in de-

periods.3

The

n^+s^.^

Continued

spite of difficulties like these

———

these related mat¬

on

requires revenue and expenditure
1

wholesale

alterations

In

Secretary of the Treasury

gov-

ernment transactions, think things

are

great many unknowns about the

in
The

understanding

our

economy as a whole tbfe

offered.

commented

improve

morJf. rapid drop in income; tax
°]ig !
Provide some cushioning

practice

of

ury priay

.•
**<»

nature

expenditures. In addition, the debt
management policy of the Treas¬

impact.

-

'.*>-*#!

nomic

address

by Mr. Lindow befote
the Assembly of the Federal Reserve
Bank of Minneapolis, Minneapolis:, M,r.T>„

\v

lected do not have the

to

is

in

*

or

is

of the effects of the various

to set up broad abstract principles.
In real life we don't know all the

objectives

enlarging government
public debt? More spe¬
concept of
They expenditures probably represent,
should certain types of would have the
government adopt as the song
says,
"doing what
taxes be pushed up? Can expend¬
a few highlights and will have to
tax
programs
and
expenditure comes naturally"
leave many intriguing aspects un¬ itures be reduced and, if so, which
programs with little or no em¬
At an international conference
should preferably be cut?
touched. I decided that you might ones
phasis on the
effect they are a few
years ago, I was struck by
be interested in a kind of prog¬ Such
questions
emphasize
the
likely to have on economic con¬ the
general
need for a selective approach in
feeling that fiscal
ress report on fiscal
policy. What
ditions.
policy had turned out to be a oneis the current state of thinking thinking about the economic ef¬
Most economists are inclined to
way
street
in many
fects of government transactions
countries,
about the possibilities for using
take
a
position somewhere be¬ New
spending programs developed
the Federal budget to help coun¬ in contrast to the overall approach
tween Lerner and the opposite ex¬
in depression were generally hard
which is employed when we con¬
terbalance
the
business
cycle?
treme. A great many positions are
to turn off in a boom. There is a
How far can fiscal policy be re¬ centrate on dollar totals alone.
possible between the two extremes kind of escalator
lied on, and what are its weak¬
apparently at
The economic effects of Federal
and economists may be spotted at
work which lets programs go up
nesses?
What
is
there
to
say dollars
may
vary
tremendously various points
along
the
way. and not down
about the burden of taxation in between
different
categories of Somewhere in the middle is a
a
A-tf
1+
•
economic terms?
How about the taxes
Another difficulty is tu
and
between
different sensible
that the
compromise—this is that
idea that the economic limit of classes of
budget process is more cumberexpenditures. The ef¬ fiscal
policy is enormously impor¬
taxation is about 25% of national fects of
some
than theory assumes. Conany one tax or expend¬
tant but that it does not provide
income?
I cannot hope to
give iture program may also vary from
gressional machinery moves slowa perfect tool
by itself to accom¬
you entirely satisfactory answers one period to another.
ly, and Congress has generally not
plish economic stability.
to such questions, but I shall try
found it desirable to give the ExThus every dollar of taxation
It is relatively easy to set down
to give you a progress report, as
ecutive Branch much
has an economic impact, but each
flexibility to
the objectives of fiscal policy in a
I say, of current thinking on these
alter spending and tax
kind of tax does not have the
programs
broad,
generalized
problems. In addition, I decided same
way.
Fiscal as economic conditions
impact.
The effects of a
change.
that you would be interested in a
policy should complement mone¬
sales tax on food, for
The tax structure is
Example, tary
particularly
policy. Both together should
yery brief appraisal of the current
are
probably very different from
difficult to change as the business
help to reduce demand in the na¬
budgetary situation and particu¬ those of a
tax on estates left at
tional marketplace in boom cycle unfolds. Ideally, in a boom
larly a review of the important death. The
impact of a business
taxes should be devised to disperiods and should help to expand
expirations of taxes which are tax in
a boom is not
likely to be demand
courage spending; and in a denow scheduled under
in
existing law the same as it would
depressed
periods.
be in a de¬
pression to stimulate it. But the
for 1953 and 1954.
Monetary policy works to these
pression.
There are many un¬
tax
structure
cannot
easily be
ends by influencing the volume of
knowns about the impact of taxa¬
turned
inside
out
as
economic
credit. Fiscal policy works to these
f Development of Fiscal Policy
tion, but one certainty is that all
conditions change, and taxpayers
ends by the size and nature of tax
The importance of fiscal
policy, the dollars of tax revenue col¬
should not have to face
troversial

cussion

since the economic effects
of the budget are there whether
planned or not. The sensible thing

priate to changing economic cir"A

It is inevi-

table,

utmost

importance that it be kept

economists.

many

subject

policy must be used.

consistent

strong free enterprise sys-

a

taxed

The

most

requires the

cooperatively with monetary-credit policy to contribute
toward healthy economic growth

argues

similarly that if the economy is
suffering from an inflationary ex¬
cess

It

.

pressures;

policy

He

cycle.

supply, budget def¬
icits should be incurred freely by
the government until supply and
demand

deflationary

or

budget

Policy

As in
many
fields, there are
differing views on the use of fis¬
cal policy.
One economist, Abba
P. Lerner, regards fiscal
policy as
a

.

.

...

.

hand.

in relation to

ing adds to the economic stream
and

early '«20s, the Treasury
first permanent econo¬

years.

one

budget

same

practically

spending, lending and insur¬
programs on the one hand,

liquor and

on

With the advent of the depres¬

The

the

to

mists

taller."
.

the

Bureau of the Budget was organ¬
ized in 1922 and had no econo¬

"One

side

its

general

mush¬

room:

the

hired

eat

a

of

of

ment

tobacco."1

the rabbit told

cial

was

of changes in the

You

some

the

and

effects

abacus,

an

mate with speed and precision the

member that

When

.

.

revenue

to

trust

Federal

tion

Wonderland.

Alice

the

ing and insuring agencies.

Congressional committees, to esti¬

re¬

together

economic analysis.
Fiscal policy must also consider
the activities of government lend¬

the mushroom

may

admin¬

the

of

Housing Administra¬
Veterans, Adminis¬
tration insure or guarantee pri¬
able to devote
his entire at¬
vate
mortgage
loans,
the
eco¬
tention to public finance." He re¬
nomic effects may be similar to
ports also that there was only
direct
government
outlays
for
one person on the permanent staff
loans or aid programs of various
of the Treasury who qualified as a
kinds.
tax expert—this man "was a vet¬
As it stands now, fiscal policy
eran of the Civil War, housed
in
is concerned with the economic
a
cave-like basement room, who,
with

in

no

concept is of particular value for

prepared,

Alice

makes

funds
the budget accounts and this

and

budget is
something like
in

outside

are

brings

1953 budget deficit at $10 billion.

we

budget

It

istrative budget accounts. The socalled
cash
consolidated
budget

in

economic stability?

the

under

come

economic difference that the trust

fiscal policy and its role in offsetting the busi¬

sees

also

and benefit payments by
funds, have enormous eco¬

these

Irving Trust Company, New York

cycle, Mr. Lindow contends great

within

Federal budg-

funds,

By WESLEY LINDOW*

ness

operate
a

heading of fiscal policy. Tax levies
going into social security trust

Federal Budget

After discussing

which

programs

the framework of

Old-age

~

on page 24

13 Under our State system of
ployment insurance, the Treasury

unem-

merely
States, receiving1
deposits of State funds in the Unemployment Trust Fund, investing them in
Federal securities, crediting earnings to the

acts

as

various

and

a

bank

State

paying

time to time

for

the

accounts

out
as

within

the

Fund,

funds to the States

they need

ployment benefit

to make

payments.

from

unem-

Volume

176

Number 5174

The Commercial and Financial Chronicle

.•

.

(2125)

important.

Pension Funds
Mr.

Points

,

which

to work—if it is going to
accomplish those objectives, then
pension
fund
should
look

pension fund investment provisions from those of life insur¬

companies, and indicates pension fund investment is more
flexible and permits greater
diversity.
Reviews types of
ance

investments

points out
into

go

equities,

of the

one

a

main

once-over, there are three

erally

the

Fed¬

might

oper¬

is

the

tem,

so

pledge of collateral

on.

fillment

of

mitment

are,

any¬

first,

the

in¬

So

pension

fund

plans,

largely

of

for

the

if

corporation's

a

investments

tion

has

corporations.

promise

They amount

set

account,

which

aside

a

to

That

to:;about
billion

of

they

sets,

and

rate

of

money,

with

The

a

other

has

and

second
that

be

identified

composed of State and local

It

a

regular

increments

far

into

its

to grow

growing at the rate of about $800
million a year. The bulk of that
money,

youvknow,

as

another,

or

years

have

although

,number

a

of

one

in

type

recent

these

funds

changed
their
provisions,
have been nibbling at the

they

corporate
few
eye

on

bond market, and in a
they have even cast an

cases

equity securities.

The

third

which

I

the

group,

'

"

one

on

going to concentrate
afternoon, is corporate trus¬
teed pension plans. This is a field
am

this

in

which

have

we

accurate

very
best

estimate

precise

no

statistics,
that

the

rate

are

about $1

of

billion.

To get at the investment aspects

the

capital markets, I think we should
consider briefly some of the basic
characteristics

of

pension

funds;

The question I would like to ask
is:

Who

whose

owns

funds

are

these?

pension fund?

a

for

obtained

;

I think the answer you usually
get from most people is that they

-

which

status,

to

pany

for Federal
4

On the

rate

permits ' the com¬
its contributions

deduct

income

tax

other hand,

pension fund

if

earns

purposes.
a
a

corpo¬

better

The

One

terms

of

employee.

He

accordance

the

plan,

,

and

By

reason.,

on

reasonably

a

speak

of

they

the

cost

of

the

New

over

time

of

to

annuity
running far into the

trusts.

Each

be written to suit

can

and

feelings

of




loss

We

success.

fund,

like

this.

ments

far

bond

as

concerned,

are

invest¬

the

far

the

stocks

as

trustee

invest

may

investments

concerned,

are

for

in

legal

fiduciaries

in

New York

State, which means, in
other words, 35% of the fund may
be invested in

that

But

life in¬

an

company

liquidity.
senting

dressing

of

really for window

purposes..

Some

for

people

employees get

life

nies, and

insurance

legal

for

State."

New

conservative sound to

examining authority, and to
policyholders from time to
means

that

of

at

ac¬

security valuation

a

in

equalization

the

stances

re¬

capital gains

and

undesirable.

point,

the

York

It

has

a

very

fact,

circum¬

being

on

illustrate

times

accounts, and say,
do
we
stand
on
gains,
losses, income, and reserves?"
"Where

The pension fund does not have

The

other

you

selves, "Now, this is a very fine
security. This is one that from the
standpoint of quality and yield we
would like to have in

our

pension

trusts."

Then we say, "Wait a minute.
This really is a good
security. Tnis
company may not need the money
for
more
than another two or

three years. There is a
very defi¬
nite risk that they are

going to

pay

back."

us

There

lenders

many

about

who

aren't

ever

being paid back too

in

this'

mind that

business,

you

soon.

bearing

working

are

in

our

that

the

of

have

employees

been

large

very

funded.

which
At

past

existing
have

any

time

may
come
in and
portion of that past service
liability. That means that the flow

company

fund

of

a

funds

into

be

Another

plans

the

pension

somewhat

factor

is

always

that

trust

irregular.

tnese

in

the

the

kind

of

not concerned with problems of
how to value bonds, mortgages or
corporate securities. It is a very

is

that

They

interesting

possibly in

of

easier

somewhat

period

of

a

Most

out

they

money

reduced

not

are

of

you

pool

a

is

not

a

advantage
attractive invest¬

very

So, in some cases, we have not
invested in what would otherwise
be entirely

satisfactory bonds, be¬
the
repayment
was
too
rapid. At the same time, we found

cause

pension

being revised again and
that the life insurance
companies,
the light of changing
.savings banks, and commercial
conditions, and this may well af¬
banks interested in that liquidity
fect the size and flow of funds into
are

in

feature have liked these securities

'

.

Types of Investments Being Made
So

much

for

these

Let

us

the

get down to their effect

type

investments

of

pension funds

on

which

The first point I would make is
that there is relatively little in¬
The

in

real

appeal

mortgage to
vestors

estate

of

the

many

no

in¬

valua¬

it. You take it

and until
finally collect it or liquidate
a loss, you always carry it at

your

it ?.t

books at

estate

long-term

is that there is

tion problem with

you

mortgages.
real

par,

deal.

to

finish

question,

up

the

of

rates

on

this mort¬

to

why the in¬
relatively modest:

as

terest has been

return

FHA

on

field.

in

does

The

this

outsider

to think of it

as

one

in

have

not

been

competition with

industrial
market.

lack
tures

of

of

accounts

bonds

That,
appeal

in
in

in

quality

the

current

addition

investment,

for the

extremely small
amount of mortgage investments
by pension funds.
Another

characteristic

Continued

on

of

Street

pension
tends

many

by taxation, by
problems,
or
by
the
necessity of publishing a balance

dividual pension trusts, each

sheet statement.

each

-

There

is

one

additional

is

of

a

of

may

of

one

Another

pen¬

sion

without the

knows

reserve

nothing

and

good

cares

may

have

character¬

istics.

non-investment

ought to look

which

investment

separate

times of adversity. Experience has
shown that the average
employee

fund

in¬
one

differ in major or
minor degrees from the others and

factor

a

which

in

from
is

less

the

important

difference

funds

use

are

of

a

operation to equalize capi¬

about the compostion of the

savings, hisr pen¬
sion fund suddenly becomes
very

)

activities
*•

If you

of these

BANKERS

Established 1925

invested

of any kind

sion trust under

own

INVESTMENT

life insurance operation

these

that

funds.

have to take out of

your

Members New York Stock Exchange and Other National Exchanges

UNDERWRITERS and DISTRIBUTORS
of INVESTMENT SECURITIES
BROKERS of BONDS, STOCKS, COMMODITIES

Private^Wires

•

Home Office: Atlanta

•

pen-

page

big pool. Ac¬

tually, it is composed of

interferences

liquidity

the

to

the other fea¬

mortgage

a

attractive

good

funds

always

and

VA insured and guaranteed mort¬
gagees

making.

are

gage

general

characteristics and general factors.

great
Just

familiar with the large volume
that Bankers Trust Company, for

example,

a

ment.

operation.

Wall

around

or

opportunities

that

pension

that

to invest your funds to

separate- funds.

are

a

period:

are

about

in

on

investment

an

pays you back

must keep constantly in mind
talk

too

worry

it, whereas

characteristic

sat

talking about a particular
investment
for
pension
funds, and we have said to our¬
bond

way

liquidity problem, land does not
have a statement problem.
It is

a

the

have

we

many

compa¬

in

par¬

in

and

borders

To

many

not

around

Yet

thing that affects

almost

is

and

they really mean to say, and
it operates in practice,
is that the trustee has in general
rather complete discretion in the
investing of funds.
the

the

4

sav¬

bank,

funds

what

stated

reckon¬

a

more

fiduciaries

to the

That

of

of

instances

some

general investment characteristics long range earnings basis and that
you want to get regularity and
of these funds is the fact that
they
stability in that earning power,
are very flexible. There are

on

"legal

It has problems of pre¬
balance sheet statement

a

or

opportunity to

loss

a

tuations

terest

stocks.

common

is

confidence in the fund if it reads

problems

any

fund

serve, or something of that kind
which would level out the fluc¬

trustee

invest in life isurance legals.

may

As

As

about

runs

ance

has

feel

like

commercial

or

reserve,

them.

typical provision

feel that their

by the Investment'Association"
some of his
York, New York City, Nov.- 19,

1952.

bank

group

company is a long-term
investor.k And yet a life insur¬
company-N

have

we

of investment

life insurance

never

sporrsoread
of.

little

pension

again,

his

plan, the cost of

a

also.

good

flow

ticularly attractive,

a

the

conser¬

a

period

preferences

A

people
as
long-term in¬

That is, we say

to

with the Treasury, but

very

that

trying

pen¬ tal gains and losses from one year
ordinary circum¬ to another. Now, that may sound
stances. However, in time of
♦Stenographic report of an addj-ess by
stress,; simply like an accounting prob¬
Mr. Murray in the lecture course, "The
when he sees layoffs around
him, lem, but actually it is a significant
Economics
of
the Securities
Industry,"- when - perhaps; he has to use
up item in relation to the investment

the

is

other kind

objectives
are

the company.

many

were

to
of

agreement

is

The other important investment

though

in

year

is happy

problem that

a

on

with

ings

very

large contribution, because

worked

a

the

company

business

This is

picture

the

investment experience means that

the

a

course, is that
specific legislation ap¬
the investment opera¬

gets

better

its

be

may

pension

no

with
a

make

difference, of

tions

factor

character, and that is that

in

it

which

tends to

plying

account.

a

that

extended

there is

30 years before

interest

the

course,

good rate of return

a

commitments

be expected

savings

a

of

quite similar. You

return

in

that

on

perhaps should be reduced.

losses.

future.

the most

on

which,

the

con¬

meet what will amount to

pen¬

perience, who benefits from that?
benefits

contribution

company

and
steady repay¬
principal. Now as I said

of

before, most of these funds are
growing at a very rapid rate. A

one.

is, in
realize capital

gains, then you show a high earn¬
ings rate on the fund, and the

cyclical .' reserve,

more

number of respects. Ac¬

a

earn

an

by

meet

rate of return, or has a better ex¬
Not

large

a

ment

con¬

course,

service liabilities to their

to

the

to

of

of

plans

are

vehicle, therefore. It
employees of the represents a situation in which
company.
They do in the sense you can really adopt and
carry
that no part of that pension fund
out
truly long-term investment
Can revert to the company with-,
policies,
and
accomplish
longout a
complete loss of its tax term investment objectives with¬
belong

And the

the investment operation

tually,

pro¬

characteristic is that this is really
a long-term
investment portfolio.

ing

instead

converse,

amortization

company

small

a

ing in

desirable

future.

intervals it has to have
on

strong, stable fund in

a

the

growing at

these funds

show

Now,

surance

Characteristics

Or the effect of

providing the pensions for
single purpose of being able

Investing

vative basis.

,

The

Another

same token, of
course, the rate of
return should be as good as can be

time.

Basic

you

sirable

We

really

Differences from Life Insurance

regularly pro¬
ductive investment portfolio is de¬

vestors.

rate pension funds now aggregate
close to $10 billion, and in the

they

is

compound

or

been

able to make is that these corpo¬

current year

to

can

or

important, and

the

but

have

we

for 20

this

The

^

it

having the pension fund
servatively invested.

finally begins to level out.
So

into

goes

Government securities of

it

than

for

in¬

currently

the

conservative basis

are

conservative

company's own business may
be, the more reason there may be

pen¬

ought to

aside

set

another

billion and which

good

a

typical pension fund

pen¬

company may

the

regular

fund

sions

is

a

more

policy

bad times.

income, a fairly
steady rate of return, because this
a

tribution

the

make

should have

pension

a

which

cumulate the equivalent of a loan-

to

a group

corpora¬

certain

sion funds which amount to about

$7

of

in

rather

differs from life insurance invest¬

duce

pension

of

group

can

real function

that

is

a

appreciation

proper

characteristics.

of

separate

no

the

a

This suggests
sion fund has

is

types of

have

year

cost of

fund.

into

investment

for

of

a

year.

companies,

the

reserves

contracts,
identity.
'

$1. billion

of course, goes

insurance

pooled

funds

growing at

are

about

life

their

will

one

this

commitments to its employ¬
in the future, then I think
you

ees

as¬

This

the

Roger F. Murray

$7

pen¬

company

to

believes in. It may accept a lower
rate of return, and incur a higher

com¬

retirement

meet

that

means

remember

conceivably
can
require to pension trusts.
Another feature of the
to make an extra
modern
contribution to the fund in that mortgage which
appeals to sav¬
year. In all probability that is the ings
institutions is the regular
the

basis

and

will

which

for

investment

ful¬

secure

appear

You

against which to charge them — sion funds.
Therefore, this is one
will show in that bad year a advantage of
mortgage invest¬
very poor earnings, performance, ments which is of no
significance

Yet

shaky credit of his com¬
can look to this well-

well choose

come

to

no

you

to

.

employees.
think of a pension

you

as an escrow

may

have

strongly invested
performance of the
pension plan in his case.

to its

sured

operated

for

doesn't

if he

collateral

tain group or certain individuals.
What they really represent is a

Service,

These

aren't

He

maintained

real

as

tirement,

and

they

the

we

sys¬

Railroad

Civil

think

the

pany

body's, in the ordinary sense that
identify property held in trust
being for the benefit of a cer¬

Social

Security

I

that

is

answer

those

as

funds.

about what

be

that the corporation
beneficial owner of these

the

good.

worry

argue

pension

systems,

such

Re

of

looks

program

corporation, is reduced.
this
sense,
therefore, you

value.

year—that is, if from what I said
previously that
convenient reserve valuation is not a problem in

good years, if you

feeling that while everything else
may
look bad, his pension still

income

have

you

book

your

bad

a

would

a thin time or the em¬
ployee who is about to retire that

recent years.

retirement

the

In

retire¬

ment

of

outside

areas

ated

the
to

year's earnings all of

in

losses

through

encouraging and constructive

Our
topic
this
afternoon
is
"Pension Funds." Just to give the

current

strong, not just barely solvent, in
adversity. It should give
the
employee
who
is
going

times of

being made by corporate pension funds, and
relatively higher proportion of fund investments

developments in the capital markets in

field

the

now

a

he

accomplish its objective of con¬
tributing to good morale and good
employee relations, making the
company
an
attractive place in

differences of

out

very
as

closer to the retirement age.
If the pension fund is going to

Murray explains basic characteristics of pension funds and

their individual fields of investment.

becomes

comes

By ROGER F. MURRAY*

Vice-President, Bankers Trust Company

also

It

important to the employee

13

Phone LD-159

22

\

14

The Commercial and Financial Chronicle

(2126)

Some New

other capitalisms
in the world, thought it is easy to see that many
particularly those foiind in West¬ proposals for increasing the socalled social overhead of our pro¬
ern Europe. The CDEF means
"competitive
decentralized eco¬ ductive machine would not answer
nomic flexibility," added to which this question affirmatively. Many
such
schemes
merely
take
is RNM, which means something of
that is typically American, name¬
money
out of one pocket and
ly,
"the regulation
of natural transfer it into another while cre¬
monopolies." This really impor¬ ating nothing at all in the way of
tant feature of our economic set¬ new or improved technology or

Qualifications
For Leadership

By ROBERT S. BYFIELD*
Stock Exchange

Member New York

York Stock Exchange v

United Nations Representative, New

Mr.

began in 1887, when the Inter¬
state Commerce Commission was

Byfield maintains U. S. businessmen must share respon¬

up

sibility in their country's world leadership, and among qualifi¬
leadership, must display far greater aggres¬
Asserts

siveness.

free enterprise. Declaring

word-manipulation is a primary char¬
offers a detailed "lexicon"

of modern revolutions,

acteristic

of international communism.
It

is

pleasure for

a

to

talk

to

engineering

an

at this time because

in

of

suspect.
will

that

that

Robert

S.

created

Byfield

scapegoats

many

sometimes, when

the

quota¬

tions for gold bullion or the prices
of food rose in terms of the in¬
convertible

paper

flooding

the

the

course,

the

which

money

"Let's Hang

Soviet

Iron

the

market,

familiar cry went up,
a Broker."

tyranny

Curtain

cannot

imitate this practice because there

instances it is

gineers
One

brokers left and

any

many

who
there

chines

in

Black

the

mind

to

patently

methods

fail¬

a

and

sentences

of

the

Canal

in

was

the

and

other

The

five

real

life

substituted

parts

for

defective

good

had

parts,

gold

leaders is to realize

children

rust

the

in

The*pattern followed
all

now

was

familiar

too

ginning in 1776" during which
created

you

have

asked

to

me

talk

to

about leadership, and my first
is the need for ideo¬

suggestion

logical

in

awareness

mid-20th

Century times. In this connection
I

am

wondering

torians

will

not

ing

his¬

we

are

liv¬

now

the Ideological Century. If

as

we

whether

actually refer to

the time in which

to

are

be

then

aware,

our

first task is to find out what kind
of

an

age

it is in which

ourselves,

legal and political frame¬

a

Undoubtedly

witnessed

time

the

within

fall

of

one

of

we

life¬

our

four

great

empires—the
man,

Austrian, the Ger¬
the Japanese and the Italian.

Three

more

French

and

—

the

their strength

characteristic,
will

Soviet power

the
British,
Dutch, have

enfeebled/A
which

recognize,

is

all
the

the
seen

second
of

rise

you

of

citizens

which, unfortunately

fullest extent for

the

score.

been

the

Coupled
pushing

with

of

know

this

the

has

United

by

Mr.

Byfield

before

the

Management Division of The American
Society of Mechanical Engineers, Skytop,
Penna., Oct. 29, 1952.




similar

regulatory

concept for the servicing of con¬
sumers
and
the
limitation
of

profits to what is sometimes con¬
a fair return, it
does not
have its counterpart in Europe. It

sidered

is

of

one

our

the

features

many

which 'the

economy

^of

Soviet
to un¬

propagandists do not seem
derstand.

L + SF

(2)

S

=

I

—

P:

—

j:..

Amer¬

more

how

understand

Fascism

informed

ately,
that

electorate.

by

learned

have

businessmen

an

Unfortun¬

they cannot lean too heavily

either

provide

the

struction

how

government
universities

our

upon

colleges

our

of

rejected

easily

most

are

diseases

other social

and

and

or

to

necessary
basic .in¬
the important subject

on

really earn our living
or
why our standard of living, is
the highest' in the history of the
we

world.

vain

have

I

looked

almost

in

present election
campaign to find any of the lead¬

the

during

legal and social framework with

candidates willing to stress
the
importance
of
incentives,
technology, skill in management

proper

the

to

improvement of
fellow

men.

like

social

or

which

there

was

live

to

man

possibility for

a

in

under

systems

enlightened

self

interest.

but

they either do not understand

the

sequence

we

are

than

more

the

legatees

of

the

Our

Industrial

civilization

spring from feudalism

that

of

antecedents

our

imposed
while

did

did

as

in

West¬

where the industrial

Europe,

ern

any

people also the children and

directly

was

the

upon

based

ours was

super¬

feudal

system

free agri¬

on

to obtain

necessary

from

taxes

citizens

our

abstinence

some

or

immediate

from

sumption.

con¬

The

formula

third

designed

is

not

the

Kremlin

Soviets,

trating

the

perpe¬

oldest

despotisms

while

of

with

scientific overtones,

something
offer

the

in

men

merely

of the

one

ancient

for

are

the

pseudo
have

we

fresh and clean to

new,

nations

of

the

West.1

'

I

the

American

Foundation,

.indicates

indebted

am

to

material .welfare

man's

dependent

is
materials
multiplied by

raw,,

upon

plus human energy
tools.

This

properly

are

we

stewardship,

our

these things and

to

exercise

must

we

know

must^ submit

we

proof at all times that MarxismLeninism is
must

be

whom

so

able

much

to

rubbish. We

to

lead, to the com¬
munity of which we are a part,
and if necessary to the nation as a
we

are

whole what it is that has given us

the most prolific material civiliza¬
tion
are

of

to

all

time.

Of

textbooks

some

there

course,

and

few

a

primers which could be read

good

advantage,

but

I

pre¬

to reduce my views to the

following four simple formulas:
(1)

AC

=

can

show that

thing

an

our

quite

attempts

capitalism is

different

from

Le

Gustave

small but significant

a

widely

and

the

philosophers,

by

have

of his greatest

one

the

is

that

fact

been

of

revolutions

most

or

a

I

•

very

cannot

ical

leaders

ply of

have

raw

to

the

the

new

them,

formulas

must

obviously

be

our¬

which

the

is

ample

sup¬

quainted

an

crowd

ones

with

either

unac¬

acquainted

if

or,

slogans

or

with

materials to support a
civilization.

material

several

are

them, finds favor. In other words,
fact, a
disagreeable image is replaced

In

that

countries

by an agreeable image through
variety of the use of a new word or slogan.
important raw materials than'is
During the French Revolution
the United States. The mere exist¬
the
Jacobins,
using the
words

are

blessed

more

of

ence

by

not

does

gredient
human

enabled

us

50%

Human

95%

power

engineers

as

of

5%

other

the

of fuel

to produce al¬
world's goods.

depending
including,

well

are

concept
could
the

of

of

this

upon
you

as

an

in

power

plenty

and

simple

real

formula

from

expanded

form

It

which

I

is demonstra¬

rise

wages

in

pro¬

portion to the capital investment
per

worker.

acid tests by

and voters
or

Perhaps
which

can

one

we as

to

the

Land

Tax,

;

finally

would

call

what
a

the

tax

a

name

"gasalt,

on

probably

we

corporation tax be¬

the "license."

came

its

also

belle" which became

not and

aware,

fourth

be

mentioned.

that

ble

KWHs

easily

above

have

for

production,

our

expressed in BTUs.:The

as

were

I happened to

pick up an Associated Press dis¬
patch ; from
Washington
dated

Hale
Boggs of Delaware in which he
criticized the OPS for operating
what

he

ganda

Congressman

called

mill

to

gigantic propa¬
confuse and con¬
a

found the American people.

Boggs quoted
called

an

Rep.
OPS instruction

Problem
No. 7,"
the which said: "Certain phrases and

of

"Copy

citizens expressions

determine the value

are

not

which

themselves

in

objectionable,

to

some¬

most

quality
the

or

an

"Does it

con¬

improvement of the

quantity

of

tools

sons

critical of OPS.

reference

to

.

.

controls

may

be

.

Following

up

this

line

of

on

.

The leaders of the revolu¬
been smart enough to

image.

have

tion

ism"

institutions because
is a
nice word and

old

liberalism
evokes

pleasant image. Yet they

a

and institu¬
defended by the

deny that the things
liked

tions

liberals

or

socialistic,

are

very

regardless of the incontrovertible
facts.

world-wide

Soviet

The

,

ganda
machine
has
changed the meaning

to

hold

propa¬

only

not
of

a

few

but has developed an en^

words,

tirely new lexicon for the purpose
confusing, obstructing and in¬

of

thinking. From
in the U. N.
General Assembly, which it was
straight

hibiting

listening to debates

to attend in Paris
and from, reading a
additional Communist

privilege

my

last

year,

wealth

of

literature, it has been possible to
construct an entire lexicon com¬

prising the hate language used by
international communism.
Here¬
with

the definitions of

are

words

used

Communists,

collabora¬
nation

or

nation.

satellite

prospective

few

Communists:

sympathizers or
in
any
satellite

tors

a

the
The

People:

The

their

by

>

Enemies of the People: The anti-

:

their sypathizers or
in any satellite na¬
prospective satellite nation.

Communists,

collaborators
tion

or

Traitor:

A

individual

particularly active
the anti-Com¬
.

among

munists.

Reactionary: Outside of the Iron

Curtain,

anyone

who isn't a Com¬

munist.

;

l

,

People's Democracy: A totalita¬

rian

orders

taking

government,

*/ \

from Moscow.

State:': A totalitarian
government
not
taking
orders
r.

Fascist"

from

Moscow.

capitalism..

,

\

;

-

Fascist: Anyone

i

v

who believes in
"

-

-r;

,

Anti-Fascist: A Communist.

Progressive: A Communist sym¬

pathizer;

fellow traveler.

a

Marxism

-

Leninism:

K

Commu¬

nism.

Liberation:

Conquest of

a

free

country by the Red Army.
National

World

_

/

Liberation

Movement: The power

grab of in-;

ternational communism for world
domination.

,

Aggressor:

or

any

J'%

na-,

opposing Soviet imperialism..

tion

Peace:

A condition of helpless¬

indefensibility

and

ness

the

.

Anyone

military might

before

of the

Soviet

Union.
'*

Peace-Loving: Any nation, peo¬

ple

or

individual willing

to

co¬

us

do

operate with Moscow.
Cooperation:
what
do

want

we

let

"You

and

then help

us

it."

War:

Not necessarily

clash

tional battlefield, but

efforts

they

and

well
in
making "the crowd" believe them
succeeded

have

has

been

things

old

the

describe

to

the

and

of "liberal¬

the new label

apply

.

prices,

invokes a disagreeable

this

cause

ical

use instead the words
for crticized
stabilization, price program, con¬

trols

word "socialism" be¬

not like the

Excessive

.

production of goods and serv¬

ices?"

institution in our national
crowd simply does

any

economy.' The

„

of

validity of pending legislation overused or come to have objec¬
social programs is to ask the tionable connotations among per¬

tribute to

or

Aug. 30, 1951 which referred to a
statement

desirable to use the word
to describe anything

or

"socialism"

which

images at
nevertheless able
France a despo¬

changed

ample supply of electric
shape

that time,
to
inflict

changed is the word

It is no longer fashion¬

Socialism.

means

accounts

energy

machine

energy.

no

the

of

than

"fraternity"

popular

without

world's population
most

and
very

But
upon
machine tism akin to that of the
Inquisi¬
have tion. Le Bon also referred to the
with only 6% of the
"taille" which
human

of

energy

would by

power

"liberty"
evoked

Label

important; label

most

the

that has been

a

materials

raw

Socialist

That

able

government

consciously or unconsciously A
Le Bon to heart.

But

polit¬

influence

to

follow

or

be¬

as

would-be

besides

countries

that

there

taken

of

echelons

lower

new

things

continue

to

these

For

and

allowing the

institutions

fore.

labels

new

while

.

ently our modern political leaders
their
subordinates
in the

con¬

explanation

created

use

words

words

and

selves

rich

must

crowd

other

are

is

following question:

equasion for Ameri¬
It

named

French

a

and

CDEF + RNM:

capitalism.

1896

semanticists and students of ideol¬

emphasize
strongly. For example, there

it too

the

explain to those

quoted

important

more

If

in

by changing
the m^atiing of words. He states
by which I mean man's material
that wfrien crowds have acquired
welfare, depends upon production.
antipathy for images evoked by
(4)
MMW = RM + HExT: >
certain words and formulas, those
The fourth formula, for which
politicians aspiring to leadership
merely to illustrate that M M W,

ing. There is the indispensable in¬

the

wrote

tributions

est revolutionaries of all time and

are

philosopher
Bon

ogy,

,

PzMMW:

(3)

guarantee a high standard of liv¬

indeed,

Back

or
entitled
"The
perhaps they want us to volume
Crowd,"
supply the savings and investment, which by 1947 had gone through
Le
which,
of
Bon's
work
is
course,
means
either 19 editions.

the great¬

culture. We,

fectuated.

it

concept

Second,
other

Production,

have

to

.

and

our

ing

The second formula means that
a

that

ments

This is
^Address

other

the world had there been govern¬

ferred

not

and

commissions

service

agencies. A thoroughly American

Economic

here

did

public

Only twice before in the history of

short

simply

freed

were

themselves and their

aided and welcomed by some
people not so many miles from
was

who

6f

work under which the energies

find

we

the chief characteristics is that

have

we

type of government

new

a

revolution

demonstration trials.
You

the

are

we

legatees of two

revolutions, not one. First there
the Freedom Revolution be¬

not

the

and

was

lowed

of

the

and

destroyed equipment and had al¬
to

silver

and

pacity. In this age of political and
economic ferment, our first task

Revolution.

machines

state

to

are

we

jewelry and whose capital neither
employs men nor buys machines
to improve their productive ca¬

reasons

tioned, but the engineers took the
rap, for the prosecutors claimed

that

if

a

for the great delay in
constructing
this canal were probably not men¬

they

of

our

There

imprisonment.

open.

all,

in world leadership,
ask ourselves, what kind

ma¬

big trial
in the Bucharest
Military Court
and of the 10 engineers who were
accused, five were given death

spare

of

recognize this

know, this has been

accomplished through the various

would

full

within

construction

Sea-Danube

Roumania.

that

must

en¬

scapegoats.

comes

was

Soviet

of

ure

case

in

so

the

now

the

are

recent

where

wish

we

who

safeguards and protective and sufficiency of capital as fac¬
of people are we? Since we be¬
-features is necessary for the se¬ tors in promoting the wellbeing
lieve in free enterprise, what kind
quence S — I — P to function in of the workers.
of capitalists are we? Are we like
a healthy, manner. This might in¬
Well, besides the need for ideo¬
the
other
capitalistic
nations, deed be called the
"golden se¬ logical
awareness, < perhaps
an¬
particularly those of Western Eu¬
quence" because it illustrates that other
ingredient
of
leadership
rope? I ask these questions be¬
you must first have S for Savings would
be the need for grasping
cause
a
capitalist means many to
create, I for Investment in in- the nature of this revolution. We
things to many people in different
dustry before you
can
have P cannot hope to be leaders unless
parts of the world, such as for
which is Production. A good many we understand what this revolu¬
example in India. There a capital¬
underdeveloped countries abroad tion is and how it is being ef¬
ist is someone sitting on a cellar

as

aren't

first

must

we

in

French

behind

in

share

and

to

participate

during

Of

we,

We

could.

and

Revolution.

was

the champion
as businessmen,

or

it

D.

things hap¬

and

reluc¬

too

not, because the government
can't do it all and would not if
to

queer

They

mantle

the

all

leadership whether

little

Money
France,"

the

West,

"Fiat

White's

pened

has been
did not

are

we

contribute

must

with

volume

some

the

of

are

familiar

we

wear

we

leadership

then,

11,

recall,

Andrew

for

us

and

it

West

the

of

tantly.

You

you

new

upon

our

than

might

you

champion
thrust
seek

world's

history

if

more

leadership of the
role
as
the

the

Our

West.

at

stage

the

group

have

we

into

States

of

common

this

like

anyone

Wall Street address

a

opinion the

my

line.

the

and

rates,

water. As you

myself with

In

icans

down and efforts to hold
.
Avoid reference to
defense spending. Lse instead de¬
fense
proouction, production of
military equipment and supplies,
witn
emphasis
on
proouction {]
rather than on spending." Appar¬

prices

have

lower cost production.

system
operates, the
this concept has economic
been followed up by our self-im¬ greater the
immunity they will
posed regulation of other natural enjoy from the lure and the at¬
monopolies
such
as
companies tractiveness of competing social
supplying
electricity,
gas
and systems. Communism, Socialism,
road

need for education about American

great

regulation of rail¬

created for the

cations for world

.Thursday, December 4, 1952

.

.

intrigue,
economic

of

men ^on

the phys¬
a

conven¬

propaganda,

assassination, blackmail,
pressure,

infiltration,

Volume

176

Number 5174

subversion,

kidnapping

agitation,

and shakedowns.,;

Warmonger:

The Commercial and Financial Chronicle

...

is

who

Anyone

willing to dei'end himself

his

or

if

need be by force of
from Soviet enslavement.

countiy,
arms,

Profiteer: Anyone who makes a

Monopoly: Any corporate enter-

divine

him.

-

forces

Without
there

United

of

are

twisted

come,

Monopolist: A businessman.
Millionaire: An important

*

-

again;

ideal,

have

been

many more

examples
and

namely:

over

Is

our

and

over

thinking

on

false querading

concepts

labels and, con¬

new

it,

as

sucn,

tection

using

which

of

it

as

something else? Does will

deserve the legal
the

is

U.

S.

pro¬

Constitution

stroy?

are

concepts

new

labels?

as

we

over

we

old

Are

nist Party, USA, a

dis¬

question

acting

we

What; for example,1 is
political patty? Is the Commu¬

a

constantly

We

the

being given
old

definitions

to

precise?
Are
assumptions?
versely,

no

America.

of

meanings.
back

an

to

guide
motivating

these

would

States

There

goal,

a

Providence

must ask ourselves

prise.

;

because he had

torted

proiit.
f

on

and

...

political party

have understood

the

this

term

period of the last hun¬

dred years or so?
an

15

(2127)

international

Or is it instead

conspiracy

mas¬

am

is a

endeavoring

*

to

-

de¬

Again, and now I know I
controversial ground, what
labor union? We knew pretty

on

generally what
25 years ago,

a

labor union

was

but with three of the

principal unions endorsing one of
the

two

'Presidential

examination

an

methods and

pressure

their

of

tac¬
"labor

group

tics justify the old label of

union"

or

are

they really political

parties?
The third component of

ship,

as

I

education
the

and

integration.

businessman
uie

must

initiative.

Here

definitely

Perhaps

Continued

candidates.

leader¬

it, is the need for

see

on

in

page

busi¬

v

nessman.

m

1

Billionaire:

A

important

very

SMOKING PLEASURE

...

PAST AND PRESENT

businessman.

_

Wall

Street: Not

street,

a

nor

financial mechanism, but the

.

bol

-

of capitalism,

and

„

a

sym-

private property.

free enterprise

Colonialism: The act of

coun-

a

*

try or a corporation in investing
capital abroad to develop raw ma-

*

*

terial

sources.

Imperialism: The act of invest-'

ing

money abroad for
whatsoever.

;
:

Ruling

.

job

in

Circles:

Anyone

Washington

worked

for

any purpose

with

has

who

a

ever

bank, a stock ex¬
change firm, an investment houje
corporation

or

listed

.

a

on

City, Morgan

:

filiations

shares

whose

exchange.

any

Dillon Head af¬

or

double,

count

are

National
-s

Slanderer: Anyone who tells the
truth

-

about

Besides
others

with
One

own.

of

them

of

"Freedom

Mere

perusal

booby-traps is

facing. the
world

Commu-

he

to

merely

print

the

the moment."

these

of

sufficient

ize that the front
.

"freedom

a

phrase

are

their

of

is

,' propaganda line of
;.

Union..

there

subtleties

this

uses

means

i

Soviet
terms

speech," and when

nist

.

the

these

which

on

Communist

domination

verbal

is

at the 38th Parallel

are

we

bid

not

in

real¬

to

for

merely

Korea,

nor

the Brandenburg Gate in Central

;

Berlin,
It

£■■

is

The front
the

in

the

ing

.

it

yours

everyone

in

force

can

to

us

P. LORILLARD COMPANY

prevent-*

act

false

on

Cigarettes

thereby imperil

judgment,''it will have

-

Leading Products of

propaganda

succeed

can

of

and mine. For

from thinking precisely, if

us

assumptions and

.

of

Communist

machine

*

is everywhere.

mind

including

us,

if

the Ringstrasse in

or even

Vienna.

.

-

old

with-

won

firing a single gun. This, is
why those who claim that control

-

the

of

*

1

■z
-

Communism

to

outmoded

only

helmar

concepts

Smoking Tobaccos

'Cigar store Indians made their last stand in America about
50 years ago.

that

to fight Communism is by taking steps to avert
espionage and sabotage. They do
not
realize • that
Communism,
among other things, is far less a

-

-

"

-

antique shops and museums.v
When wooden Indians first stood
P. Lorillard

{ hunger of the belly than it is a

Company

was

guard outside tobacco stores,

nearly 100

years

old. Established in

I
-

1760, the makers of Old Golds are America's oldest tobacco
merchants We have grown up

munism
-

largely

pointed out, Com-

the

in

an

United

States

middle

uoner

Collectivism

movement.

is

has

ap¬

much more to the Park
Avenue
pinks. and
Hollywood
punks than to others much lower

.

on

,

■

J

the socio-economic scale.

is

down

..Why

it

that

workmen

in

the western sections of Berlin, in
the allied sector of Vienna or the
Turks

the Soviet border hate

near

Communism

.

the

than

worse

intellectuals

in

1he

lot

a

United

of

States

'

with
:
-

-

*
'

The

a

answer

standard
is

living?.

of

They under-

easy.

stand

and

'

Today

One

ot

have

the

foreign

a

if

U.

said

asked

anvone

results.'

delegates

N.

country

;

whether

■;

have four sandwiches

they

its

seen

his

would

from

recently

the

more

and

more

people

are

smoking Old Golds and

Lorillard's other fine tobacco products.
months of this year,

During the first nine

Old Gold sales registered the largest per¬

centage increase in the standard size cigarette

field. In the

king size field, Embassy sales increased at a rate about double
that of the industry.

Public demand for Lorillard's

new

Kent

cigarette with the MICRONITE filter continues to exceed factory

capacity, despite stepped-up production.

J

.

Lorillard's diversified line of fine tobacco products

by nearly 200

years

" [

is backed

of tobacco experience. The richness of its

past and the success of its present give P. Lorillard Company
—and Lorillard stockholders—full confidence in the future.

to

four

freedoms, they would undoubtedly
choose
the
four
sandwiches.
.

-

Though
an

dramatic,

thing

one
sav

can

faced

chose

this

It is

is

some¬

cannot argue about. All
is that Washington was

with

Valley

starved,
-

think

over-simplification.

I

at

I

a

similiar proposition

Forge
ragged

the

equivalent.

with

his

army,

four freedoms

He

was

half-

and
or

he

their

able to keep




union leader

friends
india house

f
|t
m

Cigars

AMERICA'S OLDEST TOBACCO MERCHANTS

•

,

,

.<

muriel

headline
bibber

between the acts

Chewing Tobaccos
beech-nut

neople

prefer
or

with tobacco—right from snuff

pipes to the present popularity of cigarettes.

the true nature of Comrrui-

nism

that

.

high

and peace

class

pealed

'

briggs

van

sickness of the mind. As many exCommunists and other students of

ideology have

-

J'

Today these wondrous warriors and brightly

painted maidens live only in the happy hunting ground of

way

-

<

.

murad

is

that should be dele¬
gated to the FBI, are simply not
coming to grips'with it.
They
have missed the point. They still
the

-

of

kent

something,

cling

-

spread

gpld

embassy

out

ESTABLISHED 1760

bagpipe
havana

blossom

a

36

•16

(2128)

The Commercial and Financial Chronicle

Two Years of Fighting Inflation

began to
and

to

The

actions

After reviewing causes of recent inflationary movement, former
Governor of Federal Reserve Board discusses events that
halted price rise.
but holds since

to

the

we

farther and farther

move

contrast
■that

between

time

at

and

conditions

conditions

to-

d

becomes

a y

sharper.

It

is

sumers,

■hard to realize

ithat

and

ago

we

to

or

of

sources

credit to

buying

These

Events

days

Halting

stop.
is

e r e

»ialk

Now

gather

an

casional

people

Oliver

conjecture

S. Powell

about

recession

and the danger

;prices.

It

occurred

by

to

in

me

this audi¬

serve

review of the monetary

a

of

moves

of lower

topic for tonight's talk

a

tthat I could best
ence

some

just around the

are sure is

<eorner,

Choosing

the

which

the

two

past

years,

^drawing from those events

Price

analyzed

*We

apt

are

to forget

that

recovery

in

some

prices.

the

occurred

strong
in

the

spring of 1950 from the recession
of

1949.

(buying

Consumers

again,
to

rresources

factories

were

iindustrial

jfrigh

add

credit
in¬

current

at

stores

and

rising. By mid-year

production

point

started

their

to

Inventories

come.

had

using

and

at

was

there

a

little

was

ipnemployment. Thus the economy
■was
not
ready
for
a
sudden
.growth in retail demand.
You

will

recall

the

panicky

guying that followed the Korean
iinvasion. We rushed to the stores
and

bought

abnormal

quantities

merchandise—everything from

sheets and coffee to television sets
and autos. There was also an un¬

precedented

tial

increase

building.

This

in

residen¬

buying

rush

(Caused retailers and manufacturers
to step up their

inventory

chases
there

and

was

ployment.
of

all

production

governmental,

and
em¬

The

this

inevitable

was

sharp

a

result

rise

in

(-prices, and another
increases. These

round of wage
forces had spent

their power, or were checked,

March, 1951, and in the
half

been

since

time

significant

no

prices.

that

In

fact,

in

year

and

there

has

advance

wholesale

in

prices

have declined 3%.
It

is

important

entirely outside of government.
important governmental move
the increase in taxation. Taxes

v/as

modify

the

in

money

public's

tv/o

of

sources

buying

analyze

power

the

which

first,

in

competition
for

with

the

govern¬

an

To stop, or at least
reduce, the
spending of savings, it was neces¬

to

sary

create

sources

of buying power:
sum

total of
wages, rents, and income
from invested
capital which will

do

two

belief

things:
the

on

first, to
part of the

was going to be
scarcity of goods, and second,

to

create

dollar. The first

of these objectives
was, of course,

accomplished
increase

in

by

the

plant

tremendous

capacity.

The

second—the creation of confidence
iri the dollar—was

accomplished

by

wide variety of

a

and

moves. Wage
controls, allocation of
materials, and courageous
by the Federal Reserve

price

scarce
moves

Board all tended to
stop the price
increase and to improve confi¬
dence in the dollar.

Lastly, it
strain
eral

was

to

necessary

re¬

borrowing. Here the Fed¬

Reserve

authorities

home in their

own

were

at

field. Congress

gave them emergency powers over
consumer

the

credit, and jointly with
Housing Administra¬

real

over

same

act,

the

Congress

set-up

restraint
gram

The

estate credit. In the

of

provided

voluntary

.

for

credit

and that pro¬
also given to the Fed¬
Reserve Board to supervise.
program,

was

consumer

credit controls

were

immediately effective in stopping
growth

of

consumer

estate

real

credit

effective

not

credit.
controls

for

several

the

limit, with
the exception of two percentage
points for demand deposits at New
York and Chicago banks.

Then, in

Second, the use of savings by
drawing down savings accounts,
cashing savings bonds, and spend¬
had

idle in
a

checking accounts
suitable time for use.
*An

the

regulation.

trols

had

bers

of

some

effective

rushed
date

of

Later, these con¬
effect, and mem¬

ence

remained

awaiting

this

audience

of

Savings

Mr. Powell

before

the

and

Mo-tga<re Confer¬
the., American
Bankers
Asso¬

ciation, Minneapolis, Minn., Nov. 10,




which

had

securities

above.

peg

This

peg

was

kept

par

or

wartime

device. The Federal Open Market
Committee purchased all offerings
of

government

voluntary

credit

provided a powerful tool
public education and set up

of

new

yardsticks

as to priorities in
of credit, running
the gamut from business loans to
municipal bonds.
a

broad

range

1952.

was

same time that
Congress
raising taxes and these emer¬

gency

controls

were

being estab¬

lished, Federal Reserve authorities

Chair¬

the Manhat¬

called
tion
he

atten¬

dis¬

called

crimination

banks

the

City Banks, the former,
including the Bank of the Man¬

Re¬

hattan Company, have

Cities,—

serve

securities

that

New York and

ing from 3 to 6 percentage points

the

above those

larger
re¬
require-

City Banks.

—

of

t

e n

m

posed

Federal

that

Re¬

Board.

serve

like

call

to

more

at¬

effect

enabling

them

loans and
six

the

thus
their

expand

amount

this

down

to

of the

peg

government

settled

reserves

accounts,

to

When

reserves.

adding

investments by five or

times

moved,

of

bank

was

bond

few

a

new

them, and

able

funds

sion

required

the

in

bank credit began to be¬
according to the seasonal
pattern. Many lenders were forced

the

Na¬

passed

was

the

in

condi¬

changed tremendously

the idea of

past 90 years,

operating

In

available

"Of

the

Fortunately, as I shall
outline, the public began to save
at a phenomenal rate, and it was
not
long
before
the
insurance

companies,
savings

savings

again

were

banks,

and
associations

loan

and

in

the

of

all

these

in cities

for

concept

were

television

of any

excess

easier retail

protested

ers

in

credit

sets

in

calling

that

for

Build¬

terms.

cities such as New York
Chicago, which served
as

bankers' banks.

Federal

Reserve

established

in

1914,
all banks which became members,
was

including state chartered institu¬
tions, which theretofore had only
to

they

the

"When

System

conform

were

the

to

more

and

lenient

laws,

varying

were

provisions of state
subjected to the re¬
sorts converged
on
Washington.
serve
provisions of the Federal
Of more importance was the feel¬
Reserve Act. And a basic change
ing on the part of the average
ruined.

Pressure

of

groups

all

initiated

was

that

man

to

reduce

elimi¬

or

big government was
nate the danger of financial pan¬
regimenting him. Here is part of
ics which in the past were be¬
a
letter which
received

we

after

Chairman McCabe of the Federal
Reserve
to

Board

all banks

had

in

sent

the

a

United

letter
States

in

November, 1950, asking them to
screen their loans for essentiality:
"We have

never

needed any as¬

sistance in controlling credit.
After 50-odd
years
of banking,
.

.

.

lieved,

in

part

at

least,

to

have

derived from the practice of pyra¬

miding

bankers'

financial

balances

change took

the form of

requirement that the
each

member

bank

in

This

centers.

a

legal

reserves

be

the

basic

of

deposited

with the Federal Reserve Bank of

its

district.

In

other

words,

the

crap
shooting,
poker
playing, Federal Reserve System took over
jackasses, turkey hunt¬ the central banking function pre¬
ing, etc., if I discover I need help viously performed by the large
in operating
my little briar patch city banks as depositories of the
business, I will know it is time to banking reserves of the nation.
*
fold up, join the Baptist Church
"In spite
of this fundamental
and go to hell on my own ticket."
change, the old three-fold classi¬
I assure you that the Federal fication
of banks according to lo¬

trading

Reserve Board

was

relax

the

the

fully conscious

economy

own

could

as

Over

on

its

even

I

can

first

over

Control
the public

almost fix the week when it

evident

that

Chicago

banks

located

required

of 20%
serve

stopped rising in the last
of

March,

1951.;

Looking

period

Continued

since, then,
on

classified

to

in

those

as

Cen¬

maintain

cities

first

fully cognizant
considera¬

am

back

many

of

decision

of

Board

the

Reserve

this

ten

.

to

differential

reserve

which applies to

Central Reserve
City Banks in New York City and
compared with banks
This is not

Chicago

as

in other

leading cities.

simple

On

subject.

the

other

reserves

economic and financial conditions

have
to

changed so fundamentally as
justify a thorough review of

this whole subject.-

"Great shifts in
taken

page

with

a

required

of

reserve

for member banks in Re¬

Cities and 14%

"For

Reserve

some

years,

Board

36 thority, within

has

place,

financial

new

centers

population have
industrial and

have

grown

up,

industry has launched a great cam¬
paign to decentralize geographi¬

cally and big businesses have de¬
veloped
programs
of spreading
their

deposits

basis.

There have, moreover, been

significant
wealth

a

on

shifts

in

distribution.

nation-wide
income and
Reflecting

these changes the growth in total
demand
less

in

deposits
New

has

been

much

York

City and Chi¬
cago banks than in Reserve City
Banks.

"These as well as other, factors
strongly suggest that the present
system of reserve requirements is
outmoded

and unfair to the Cen¬

tral Reserve
some more

puting

City Banks and that

realistic basis for

reserve

com¬

requirements should

be developed as

Perhaps

an

quickly as possible.
altogether new criterion

should be adopted

determining

as

the basis of

requirements
instead of
the present anachro¬
nistic basis of geographical loca¬
tion. But until a more equitable
system is ready to be put : into
effect, I strongly recommend that
the existing penalty against banks
in New York City and Chicago be
reserve

removed."

are

Three With Harris Upham
(Special to The Financial Chronicle)

PALM

BEACH, Fla.—John A.
Thomas J. Julian and
Rayner have become
connected with Harris, Upham &

Burditt,

for Country

William

the

Co., 316 South County Road. Mr.
Julian was previously with Thom¬

Member Banks.
.

the

I

that

Federal

24% against demand deposits. This
some¬

Prices

on

are

tral Reserve Cities and the major

thing of this sort had taken place.

back

was
retained,
still applies today

reserves

originally designed to meet

compares

week

of

have altered very greatly. At the
present time only New York City

the control of inflation.

became

determinant

though the conditions which

was

and

took

basic

required

as

it

Takes

a

and this system

stand

Just about this time

as

anxious

feet.

Public

cation

soon

was

controls

fact

lie

the

hand, I firmly believe that during
the years since the Federal Re¬
serve
System
was
established,

who

reasonable demand

importunate

were

for

a

with

produced

that banks in such
subject to higher de¬

was

were

our

posit turnover, especially those in
and

moves

by
the
public
equanimity.
Manufacturers
accepted

had

having higher reserve re¬
under the law, the

quirements
cities

tions

at

this year.

course

the

with national banks located'' maintain

serves

$1,000,000,

the larger

market

mortgages and bond issties.
Not

early

Banking

could have been

employed

were

investments

mitted to deposit part of their re¬

of

earnings, before

year

months of

advances.

accumulation

if this rate
applied, our

earning rate on loans and

average

savings funds with which to make

the

not

assuming that the additional funds

of

for

had

the

when

days of the National
System,
when
banks
throughout the country were per¬

wait

to

Company,

taxes, this

this differential has continued.

have

that

of the Bank of the

case

increased by more than

obviously

Although
have

"In the

Manhattan

require¬

reserve

Act

effect
so

they cannot be loaned or invested
to produce an income for stock¬

net

Bank

Such ad¬
in

are

impounded

or

differential

established

1863.

sterilized

required

City Banks.

reserves

inheritance from

an

of

system

Reserve

ditional

Federal

is

than

Banks

banks located in

Bank than

serve

of

with

reserve

as

Reserve

the Federal
holders.
theory that

The

they should keep a larger amount
of money idle in the Federal Re¬

tions

expan¬

which they are

in

keep

to

Banks.

Reserve

tional

of

The

up.

reserves

ments

points be¬

result loan¬

as a

dried

against in the mat¬

other cities is

re¬

prices

low par. Holders became reluctant
to sell

ter of the

your

City and Chicago are

discriminated

every billion dollars of
deposits, Central Reserve

City Banks must keep $40 million

Commenting
this, Mr. Baker stated:
would

for

demand

J. Stewart Baker

on

"I

percentage points can be better

appreciated when it is pointed out

the

by

applicable to Reserve
The penalty imposed

by the present rate differential of
4

im¬

s

tention to the fact that the banks

member

com¬

vary¬

be¬

Chicago

in New York

to

had to

pute their reserves at rates

securities

held

any or all of the three cate¬
gories to which reference has been
made.
Except for a temporary

Reserve

two

Central

to alter at its discretion the
required of member banks

its,

reserve

in

period during and just following
the last War, when the same per¬
centages of reserves against de¬
mand deposits were required of
Central Reserve City Banks as of

what

to

pegging operation was to afford
a
ready market for government

restraint

program

on

serve

at
a

York

Company,

cause

1951, the

government

probably

At the
address by

^Rfgional

March,

removed

was

know better than I to what extent.

which

to

legal

to

the

The

price levels.

funds

maximum

raised

were

of this sentiment and

of

tan

in

banks

housing starts which had
ahead

of the Bank of

man

against

member

New

in

2, J. Stewart Baker,

of

months, owing to the backlog of
in

at

ing

concerned about inflation and

stockholders

Dec.

going to use its powers. In
Jan., 1951, reserve requirements

Federal

tor

normally just about buy the full
-producton of goods and services
stable

Aug.,
only a
but the

percent,

one

Addressing the annual meeting
of

was

public confidence in the

soundness of the

were

First, current income: the

a

public that there
no

peace¬

principal

govern¬

purchase the

importance.

the

three

and

anti-inflationary tool of great

The

were

items,

things that the community needs.
In short, taxation is a curb on the
spending of current income and

super¬

There

needed

with funds to

ment

made possible this abnormal buy¬

trade.

its

they
spent

ing movement which was
imposed on a high level of
time

of

use

ways:

take away from the public
money
which might otherwise be

eral

to

were

An

pur¬

rates,

sharp increase in

a

of

in

was

further

were

but the most powerful ones

second, they furnish the

flare-up

increase

velopments

Before analyzing the cure of the
11950 inflation, we should first ex¬
amine the elements that contrib¬
the

raised

was

by lenders who
might wish to use their funds for
other types of loans. It had the

ment

to

the

of funds which contributed

jlessons for the future.

uted

of

were
large enough to threaten
price declines. The effect of this

Rise

Com¬
tells stockholders it cuts down earnings of their institu¬
tion unfairly.

pany,

banks

to the price rise, let us enumerate
the events that bought the price
rise to a halt. Some of these de¬

oc¬

•business

having

sources

no

of

higher
iPrices,
but

&

when

power,

wondering

where they

'it h

The

expand plants.

expand with equal rapidity, caused
a sharp price rise.

were

would

of

con¬

used
to
purchase a quantity of
goods and services that could not

jprices were
skyrocketing
;all

bank

quarter

The Combination of these three

only two

■years

extend

to

rate

fact of its occurring served notice
that the Federal Reserve System

Third, borrowing against future
consumers' borrowing to
buy automobiles, household appli¬
ances, and houses; business firms'
borrowings to increase inventories
or to pay higher prices for inven¬
or

The

member

borrow at their Federal Re¬

1950.

income:

tories

which

Thursday, December 4, 1952

.

J. Stewart Baker, Chairman of the Bank of the Manhattan

frown

a

.

Higher Reserve Requirements for New York Gity
And Chicago Banks Held Discriminatory

drastic,

than

direction.

serve

was

As

-

right

may

Federal Reserve.

away from the exciting days of
the fall and winter of
1950-51, the

Reserve

from

more

discount at

Sees rebirth of public confidence in

saving.

central

certain practices or a nudge in

on

through: (1) increased plant and production capacity; (2) a
leveling-off of inventory accumulations, and (3) a turn of
consumers

little

less

means

in

Federal
far

were

really

Lists government anti-inflationary measures,
March, 1951, public has taken over control

credit,

expansion

traditional

are

banking.

President, Federal Reserve Bank of Minneapolis

tighten

its

automatic, by those indirect
which

By OLIVEU S. POWELL*

to

move

make

.

had

Federal
the

au¬

specified legal lim¬

son

P.

& McKinnon.

>

.

Volume 176

Number 5174

...

The Commercial and Financial Chronicle

(2129)

It

SEVEN GREAT DIVISIONS
WELDED INTO ONE

INTEGRATED STEELMAKING STRUCTURE

WEIRTON STEEL COMPANY

Weirton, W. Va. World's largest independent" >
manufacturer of tin
plate. Producer of many
other

important steel products.

GREAT LAKES

I

STEEL CORP.

,

Detroit, Mich. A major supplier of standard
and special carbon steel products for a wide
range

of applications in industry.

STRAN-STEEL

DIVISION

Ecorse, Mich, and Terre Haute, Ind. Exclu¬
sive manufacturer of famous
and Stran-Steel nailable

*-W

Quonset building

framing.

.

NATIONAL

STEEL

PRODUCTS CO.

Houston, Texas. Warehouse and distribution
facilities for steel

Rolling"mile-a-minute"steel in

one

of
HANNA

the world's fastest mills
A great

deal of the steel you use dally is first made in the form
and strip. Much as the housewife's
rolling pin
changes a thick lump of dough into thin pie crust, the
pressure exerted by heavy steel rolls in giant mills reduces
chunky, red hot ingots to these sheets and strip, of precise
thickness and width.

This

gigantic unit is

indicates, for there is
Each of its five
of

thin-gauge strip steel at the rate
minute. It is the world's first mill built to

of

a

mile

a

ore

from

holdings in the Great Lakes

area*

bigger than the illustration

much mill below floor level'as above.
or sets

of rolls, has the over-all size

average two-story

speed and

pressures

with complete safety and

accuracy.

Through investment in
this

more

and

more

efficient facilities of

kind, America's gigantic steel industry has been able to

make and

This mill rolls

stands,

ORE COMPANY

house. Yet, through finger-tip con¬
trols, the mill's expert operators guide and govern its tre¬
an

mendous

Many important uses require steel of extra-thin gauge. This
is made by final rolling on a cold reduction mill, such as
the one illustrated here by Peter Helck, at the Weirton
Steel Company, division of National Steel.

even

as

IRON

Cleveland, Ohio. Producer of iron
extensive

of sheets

products in the Southwest*

useful

keep steel

one

of

your

lowest-cost and

THE HANNA

most

Buffalo, New York.
for

servants.

FURNACE CORP.

Blast furnace division

production of various

types

of pig iron*

operate at this

speed. From it comes an average of more than 325 miles of
quality steel every eight hours
enough, when made
into tin plate, for more than 5,000,000 of the familiar No.
2 cans used in food packaging.




.

.

.

And

methods and

SERVING

AMERICA

pioneering in improvements in equipment,
one of the things that has

quality of product is

made and

ent,

NATIONAL STEEL
GRANT BUILDING

constant

keeps National a steel leader—entirely independ¬
completely integrated, always progressive.

CORPORATION
>

PITTSBURGH, PA.

NATIONAL MINES CORP.
t

BY

SERVING

AMERICAN

INDUSTRY

S

•
-

&

Supplies high grade metallurgical coaf fef
the tremendous needs of National Steel mii

The Commercial and Financial Chronicle
18

greater increase in wage rates,
placed different price series,
in relatively equitable adjustment,

.

Thursday, December 4, 1952

.

For

Agriculture

foresees

Butz

ing

for

It

considerable

probably
strengthen
the

U. S. net farm

13

be

be¬

figures.

receipts

cash

Total

farm

from

marketings in 1952 will probably
be around $33.5 billion—a record
figure.

receipts.

This was 3% above 1951
However, farm produc¬
in

costs

tion

1952

also

are

at a

low

This

seasonal

normal

a

the

ably increase moderately in 1953.
now

appears

that the U. S. net

$14.2 billion. This is only slightly
less than the 1951 figure, when it
income

net
U.

The record high
was 1947, with

$14.3 billion.

was

during

It

of manpower

as¬

income

of Federal expenditures,
expansion of military ex¬

suits.

penditures in connection with the
National Security Program, and a

However, because of

thing farmers buy, the purchasing

de¬

24%

since

1947.

purchasing

power

in 1952

about

Farmers'

has

income

farm

of

power

out

Jan. 20 will have little ef¬

than it was in

is not only lower

1951, but is lower than in any of
the
previous ten
years
except
1950. It will very likely be slightly
lov/er next year.

on

peak,

The farm price parity
hold

steady

weak,

to

probably fluctuate some¬
where between 100 and 95 during

and will

the period. '

V

decade

period,

longer

two.

or

I

of Economic

The

foregoing conclusions do
mean that agriculture is in or

the

of

conflict.

Korean

tary

will

be

like

more

than

1949

a

a

adjustments will be
They have declined irregularly
since then, from an index of 313 spotty geographically, and will not
fall equally on all lines of busi¬
in February, 1951, to 282 in Oc¬
ness activity.
tober, 1952 (1910-14=100).
This
is

a

decline of about 10%.

ever,

How¬

they still remain about 15%

above the

1950

level, just before

over-all

decline

of

10%

in

the past-20 months is not serious
in itself.

nitude

what

A variation of this mag¬

is

easily in

may

stability."

be

the

termed

limits of
"economic

The

distressing thing
is that prices paid by farmers for
items used in production have not
moved in the
index

2%
ure.

farm

was

same

282 in

direction.

This

October, 1952,

up

from the February, 1951, fig¬
of 276. This index has been

relatively

stable

during

the

last

time when prices received
declining mod¬
This means that the parity

much different

not be

1952.

farm

income

Bank *

Chicago,*

of*

December

1,

by First National
Chicago, * Illinois,*

1952.




1952,

be

vailed

in

recent

its edge.

-

has

•

the
pre¬

will
.

severe

in

up

prices

stable

other.

are

currently

adjustment

The

decline

in

modest decline

prices,
crease

in

farm

costs,

a

on

In the

find Jesus saying:

we

its

hearest

thou

know

but

sound,

from

where

it

but

0ther

thetemperature,

also

them

material

things, urging
born again"—this

"be

to

time to be born "of the Spirit."
This surely is the advice America
needs today. Only by a spiritual

rebirth can we forge ahead—as
did the founders of our nation—
irrespective
of
weather,
stock
markets, businesses
eign nations.

or

for-

even

:

Union Bag

& Paper Stk,
Offering Underwritten
Union

Bag & Paper Corp.

stock

rights to subscribe at $42
share for 253,008 shares^of
additional capital stock (par $20)'

per

at the rate of

share for each

one

investment

counselors

are

r"

Ti^

■,

f

iup<a_

..l.-..

and wiU

While

in

Gloucester, Mass., last

summer,; I

add'SS SoioS

to its eash jesouices. The
is

compkny

presently expanding.its facilities at its main plant j® Savannah
Qa.,. with *; the installation of a
sixth oaoer machine and relafprf

found the fishermen
much disturbed because the fish
had gone farther: north and forced equipment' at a total" cost of ac¬
the vessels to go much farther, to proximately $21 500 000 The adfish. This^ they claim,,-is one rea^ dition of this machine'will add
son

for the higher

price

of fish., fiexibility to the company's

opera-

ning

plants

are

idle.

fish

Also,

caught off New England.

j 800, tons

daily

completion
third,

quarter

££

or

this

of

1953f

of

is afeo building

pany

25%

work

a

upon

in

The

the

com-

multiwall

much

as

offer

to

Without doubt the temperature

who desires

certain

portions

of the

his
„

slow

family, good environment, and

this change to warmer weather
his own will be permanent. It is true that
security for his declining days. ... the
mean
temperature of the

an. opportunity tqprovide

United
it/*.!;
With

c*

*

Canada

States.and

and

adjoining waters has increased 3

d

Sterner, Kouse

and

a

causp

announced that Leonard J. Gold-*
smith

is

firm

in

fice,

157

in¬

still

mately $1 400 000

ocean

iLff'is

Unk)n

"

'

the largest

naner

not justify the common belief that

raw

in farm product

coupled * with

thou

dost

The

|ng, synthetic fibres and soft drink
stocks

other comparable vocation of

with

materials prices in recent months,
a

**)>

progres-.-.

lose

has
pretty; well
to our increased money

and

fairly

very

comments

years ago.

is offering to holders of its capital

has increased. This, however, does

.

economy

or

expert, he re-

Jesus'

to

me

Eighth Verse of the Third Chapter

,

a

extremely unlikely that the
deflation of this period will be
very

,

; degrees during the past 100 years.
Steiner, Rouse & Co., members But this is nothing for us now to
of the New xorx Stock Lxcnange,
excited about. This 3 degrees
prolonged. 01 me i\ew York fciocK Exchange

It is

Our

.

comfortable standard of living for

land prices

years

,

ferred

What Are the Facts?

agriculture has

Dur¬

decline moderately^ and
which

weather

famous

a

or

Changing: Climate and
Temperature

pub'
the young- man

market

the

are

1953, '.ators who are efficient,

to

sellers'

Weather Prophet

a

and

for

prospects which heretofore were found only
for reasonable earnings for oper- in southern waters are now being

There

any

ing this period' farm

as

When discussing the winds with

slightly

continue their upward trek.

each

soonsored

in

r.

be
in the late 1930's and

early 1940's.

may

will

1954

Jesus

less

means

Hence, everyone is asking:
"How long will the drought last?"
Statistics indicate that no one can
answer with certainty. Some
droughts last only six months;
others have lasted three years,
Due to the many recent fat years
which the Central West has enjoyed, it is logical that a drought
is now due and that it may last
longer than we all hope. Certainly, our new President cannot
make clouds; even scientists cannot make rain when there are no
clouds.

better than

of the tendency of costs to

cause

may

years may

as

supply,

'Summary
of
address
by Professor
before Conference of Bank Corre¬

in

than

will

we

places—off the coast of tions enabling it tn imp pithpr
the next ten California—the fish have left al- hard'or soft woods Plant capacity
uncertain, it is much together and scores of great can- ^ii be inerease^o. aPD?oxfmatelv

be¬

grown

Butz

from

that

early frosts,

more

and agriculture over

Purchasing power of

slightly lower

year, a

spondents,

1954

when it is expected to be

by farmers were

estly.

in

income

below

Korea.
An

Net

believe

don't

although the outlook for. business In some

Price

1932.

time,

not have

advising their clients to sell out
keep <.ourttiel oil businesses,vvooto ;facnothing:in tories and; even certain stores-

.

outbreak

in

h°gs and other livestock, comes?"—or a better translation is
forcing
maiket at lower "why it comes."
I3r\ces' jVV frnl?re'
longer
Jesus discouraged His followers
a
lasts, the more serious from depending upon the weather

.'-For the "some

optimistic. If we can
spending is scheduled
to levels of production up,
taper off, the level of business, my judgment can stop this
not
is about to enter a period of de¬ activity in the U. S. may reach a political and business system of
crest and may be followed by a ours
nor.
our
progress
toward,
pression. The agricultural indus¬
business greater real income for all of us.
try is experiencing a cost-price year or two of mild
downturn.
This interval will be
In this .long time setting of an;
squeeze which has removed much
of the opportunity for easy profits more in the nature of a period of expanding
economy, r. American
relative stability and adjustment
which existed half a decade ago.
agriculture will operate in a relathan recession.
There will be a tively favorable environment,.with,
Prices received by U. S. farmers
reached an all-time high in Feb¬ modest downward adjustment in good profit opportunity for efprices and business activity.
It ficient farmers.- This means that
ruary, 1951, eight months after the
A Period

farmer

every

the study of Gravity. In the mean-

unalterably

am

Following mid-1953, wherf'mili-

Stability

up-

interest

winds

blowing
Hemisphere

in population, will provide

another
A Peek Into Late 1953 and 1954

amazing

our

should

cold

time,

same

Southern

Whether traveling in the United six shares held of record on Nov.
a
continuing consumers' market States or Canada, people tell me 28, 1952. The subscription offer
of
considerable
magnitude
for that both the winters and sum- will expire at 3:30 p.m. (EST) bn
nearly everything we can produce, mors are getting warmer. This is Dec. 15, 1952. Morgan Stanley•>&
The phenomenal strides toward-true with the exception of Florida, Co.. and 2.7 associated investment
domestic
prosperity
which f;we .which- - is", having cooler winters firms are underwriting the offerhave made during the last two
more . rain.,: Believing: the ing and will purchase from the
decades will continue for at least above
is, a . permanent. change,;company any unsubscribed shares,

change greatly, with costs edging
up slowly.
ratio will

with

combined

the

the

ever

Hemisphere,

more

"The wind bloweth where it will

is good for ..a
standard
Businessmen are not only
people. This fact, watching the rainfall (or lack of

our

at

that

turn,

in

living

rising

of

are,

Northern

fact

This,
feed

outlook

the

all

surge

therefore,
that receipts
farm
marketings will not

means,

from

<

The

of St. John

Roger w. Babson

1953,

continued
for

This

mid-1953.

through

total output

the

over

the crops fail,

when military prohits
its
contemplated

auction

this, since appropriations
made for the re¬
mainder of this fiscal year which
runs

the increased

of

the economy.

of

already

1947.

clined

earlier. Thus, it has been
possible to absorb a substantial
share of our military production

on

increasing costs of nearly every¬

is

After

are

interval

devoted to our serv-

agricultural output in
44% above the level 15

in Administra¬

The change

1953.

fect

declined

has

220

Total

1952

high level of business activity and
full
employment.
These things
seem
assured until at least mid-

about

income

above

years

some

tion

15% in the five-year
since

$16.8

of

we

ice trades and non-industrial pur-

continuation of our heavy

This means that U. S. net

billion.
farm

year

farm

net

S.

However,

index

this

held

have

service-con-

many

industries.

steady during most of 1952 with pracremainder tically no cutback in the amount

program

It

reducing

nected

general

the
of the winter and spring.
strong

to

sumes a

farm income in 1952 will be about

we

price level will hold about

record, $23.4 billion, up about $1
They will prob¬

billion from 1951.

attained by eliminating

or

pattern.

that

assumes

with the

which

will mostly fol¬

months

next six

Espe-

steel strike,
1950 monthly
average of 200, and only slightly
under
the
World
War
II peak are tne results.
the

during

except

compared

during the

price fluctuations

ity

most of this year,

de¬

the winds of 2000

The index of industrial pro¬
has
been
above
220

(1935-39 = 100)

product

farm

for

is

cially, without
sufficient rain,

duction

prices to micl-1953, in general, is
fairly good. Farm prices, on the
average, have passed the bottom
of their recent decline. Commod¬

Earl L. Butz

1951

the

low

Not Bad

winds

prevailing

of

batable. It may be sunspots, but
I believe Gravity is the basic
cause of the warm winds blowing

soil

cultiva-

tion.

tion

well

as

and

anti-

"gravity"

cause.

and

good

as

the

of

major

a

rain,

the

outlook

The

was

come

modestly

is

States

good

need

crops

tremen¬

capacity

productive

United

the

However,

pas-

sunshine

price

upward

modest

with

trend

idly.

in¬

net' farm

be

inflationary force. We have rough¬

Short-Term Outlook Is

1952

the

the

of

will

economy

months,

ture and

little over one and
is bound to be re¬ ly one-third of the world's pro¬
ductive capacity within our bor¬
general prosperity
ders, and we are increasing it rapagricultural community.
in

flected

slightly lower
than in 1952.
And

our

6

rain

Good

largely completed after 1954, and
business will continue its upward

points in a
one-half years

next

may

year

in

had

not

drop of ben-

for

adjust¬

post-mobilization

ment

index of

the parity price

have
a

short¬

and

be moderate

Texas

and

ma

Any
and

Beyond 1954?

hand, anybody lending money to
dous
well that a de¬
cline in

impossible.

not

eficial

The

farmers knows full

with

the result that

income

will

nressure;

coming

months,

_

if

lived.

parity

a

is the basic

voices,

our

drought is logical,

Expresses view changing temperature

don't really want to return

—

1954

price index of 100 is not indica¬
tive of agricultural distress.
This
is obviously true.
On the other

mod erately

during

that

force

emotion in

some

we

able

of course be argued with

can

drought in the West and the

from year to year is due to changing winds and that

economic

high level. Many of
the "good old days"

downward adjustment in 1953

American

will

after five "fat" years.

We are finish¬

on

to that area, says a

During my recent trip through
the Central West I heard much
to them.
A severe or prolonged complaint
due to the drought.
price decline is politically improb- Some sections of Kansas, Oklaho-

but

price index has declined from 113
farmers in 1953 will continue at in February, 1951, and from 105
in October,
1951, to 100 in Oc¬
approximately the same level as
in 1952. However, cash operating tober, 1952.
expenses

commenting

a

discuss

us

with

trend in business after 1954, thus creating
agriculture.

for

incomes

accustomed to liv¬

of relative

year

a

stability at

favorable environment for
Gross

after

immediately

now.

ing with inflation.

agriculture, despite decline in prices of faim products, together
with likelihood of modest deflation late in 1953.
Looks for
renewal of upward

Mr. Babson,

serious consequences

We are

period of economic stability

a

months

Korea.

Head, Department of Agricultural Economics,
Purdue University, Lafayette, Ind.

Professor

By ROGER W. BABSON

in the price structure in

occurred
the

whicn

distortions

the

following

By EARL L. BUTZ*

V

The Weather

has

The Economic Climate

■*

.

(2130)

York

now

its

Yorkville

East

City.

associated

86th

Mr.

with

the

branch

of-

Street,,

New

Goldsmith

was

formerly with Francis I.-du Pont
& Co. and Baehe & Co-.

-

"

\

north

change
The

nor

your

a

fish

of

for

cause

business.

changes

in

going

you

to

-

temperature

baa

manufacturer in

the U
ce

>

S

oroduction of kraft

Ws

sacks and

productioi*.

tion>s

'

'

.

/

multiwall
J

reported

regular

quarterly

dividend of

share,

or

year

dividends this

of 75 cents per share and an

extra

these changes in the direc-

.

net sales of $69Jk>8,310 and net
income of $8,123,601 or $5.35 per
share. The company has declared

cattle and- the fish recognize

causes

ot,

«ro

baas

For the nine months ended Sept.

year

are

SDecial

uaD.„

from year to year which you, the

due to the changing winds. What

the rmmtrv

1952.

a
-

50

cents

per

total of $3.50 for the
•

:

-

Volume 176

Number 5174

.

.

.

The Commercial and Financial Chronicle

(2131)

verted

Impact on City Property Values
Resulting From Decentralization
urban growth

and

may

higher

mean

tax

its

value

urban

derives

from

the

growth.

of the

its

As

the

city changes,

and

use

processes

of

with

rates

tion

values

land

poorer

rates

change.
need

the

We

more

tionships
urban

in

growth

and

We

also

during the last decade

need

In many
rate

for

be

slowed

will

do

can

in urban

centralization

current

or

areas

But in¬

people, continue to grow.

ternally they

bursting at the

are

If recent

population trends
continue, most of the largest cities
of the country, the central cities,
will lose population heavily dur¬
ing the next decade, while their
seams.

suburban

During
nation's

phia,

areas

the

1930's four of the
largest cities (Philadel¬

Cleveland,

Louis

St.

and

Boston) actually, lost population.
high birth rates of the last
decade resulted in population in¬
The

in

creases

other

these

all

cities.

have

cant fact.

in¬

a

signifi¬

During the last decade
moved out of our
thaja
moved into

people
cities

central

them.

our

concealed

creases

more

of

These

and

largest

Let

illustrate:

me

During

the last decade it is estimated that

moved into New
During the same dec¬
ade 750,000 persons moved out of
the city, 10% of its 1940 popula¬
620,000

persons

York City.

tion.

As

a

result of

these migra¬

tions, New York would have lost

130,000
last

population

in

birth

however.

rate,

of

New

York

000

a

of

excess

Birth

Rate

of

the suburbs.

growth of the

forties will not continue in the fif¬
ties.

During the next decade nat¬

ural

increase

with

as

some

years

we

York

may

something over 300,000
During the next decade,

produce
persons.
five

New

luck,

we

will not lose

of residential building

did in World

York's

War II.

New

more

ten years.

produce

homes in the next
At least 500,000 of these

homes will be built in the subur¬
ban

New

of

areas

would

permit

people

to

York.

1,000,000

move

This

or

and suburban

combine for

a

building could

population decrease

of 500,000 or more

of

building

are

over

units of housing a year, and from

the

fact

homes

ban

two-thirds of

that

built in

being

are

The

areas.

these

subur¬

current

during the next

decade. Any

city that 750,000 peo-

*An address

000 per year. If

reduce

tion

New

by

Boston

the

National

Association

Boards,
Miami
November 12, 1952.

of

Beach,




can,

our

make

has

President

righttly

the last

year.

the

of

emphasized
It will re¬
we

advanced

of

today's

pro¬

Real

Fla.,

derwriters

Suburban

make

the

last

areas

our

national

They

residential

Few

in

rise

to

creased
and

by

by one-third in

are

properties

50%

metropolitan

or

more

districts.

ticularly interesting to

in

many

is

note

S.

Bureau

based

unanticipated

the

Census.

of
to

Lazard

Dillon, Read &

are:

$94,000,000

the

with

gether

au¬

thorized under the RFC loan au¬
thorization

last

received

Manuel

San

the desire

upon

Co.

July by

the

Corp.,

Copper

company's wholly-owned subsidi¬

surroundings. Rather,

pleasant

home

ary, are to be used to bring into
production the San Manuel prop¬
erty in Arizona containing an
estimated
475,000,000
tons
of

own

a

necessitate

a

comprehensive plan¬

more

in antici¬

areas

ore with an expected an¬
production
of
140,000,000
taxes, efforts to entourage indus¬ pounds of copper to start some¬
time in late 1956. In addition, San
trial and commercial development
in the suburbs to add to the tax Manuel holds a contract with the
DMPA under which it may sell
base,
and
finally,
efforts
to
to the U. S. a total of 695,000,000
channel
suburban
growth
into
more
compactly developed com¬ pounds of copper at 24 cents.

pation

of residential

further

copper

growth, the

nual

sharing of state-collected

munities.
In conclusion, let me repeat two
major points. We are building a
or more

homes

a year.

Gohu

Opens New
Philadelphia Branch

We

afford, with peace, to build a
a quarter or a million

and

half. This

a

PHILADELPHIA, Pa.—Cohu &

that each

means

Co.,

million
three million people out of our

year we

to

central

will

city

move

from

This

areas.

means

central cities could

our

a

that

lose from

at

10% to 25% of their present popu¬
lation within
vast

a

decade. This

a

will

the

announce

Philadelphia office

be

R. Peters

Street.

Walnut

1518

Miller

resident

manager

means

and he will be

of the new office,

readjustments in industry, in

with

associated

in retail trade, and in

commerce,

Exchange,

opening of

New York

of the

members

Stock

Robert

Mc-

T.

par¬

that

transportation. It challenges

us

to

Richard

Dugall,

a

better suburbia, and to re¬

Madison

build

of

offering
with

associated

build
PC-3, No. 3, 1950.

any

Co.; Ladenburg, Thalmann &
Co.; Lehman Brothers; Carl M.
Loeb Rhoades & Co.; Swiss Amer¬
ican Corp. and Wertheim & Co.
The proceeds of the financing,
estimated at about $6,000,000, to¬

problems of scattered

ning of suburban

years,

It

the

&

They will not stop the
tides of decentralization

are

much

in¬

10

of

Inc.; A. C. Allyn & Co. Inc.;
Bear, Stearns & Co.; Hallgarten

then the quality

even

these problems may

population of
increased by nine

areas

is

to

shareholders.

support the municipal services

therefore

presents

of these

un¬

it

intention

present

conclusion

cen¬

ters.

population growtn.^

The population

that

stated

the unsubscribed shares following

water,

neighborhood shopping

port

million people, accounting for half
of

under¬

Co;

decade the

suburban

is

public offering of

a

Freres &

can

Growth

growth

have

their

not

sup¬

million
of

Co.

&

a

better city.

Miller

Williams.

and

J.

Miller,

A.

George

W.

Series
1

8%

continued, it could

York] City's
the

in

could lose

13%

or

next

continue.
in

i

decade.

100,000 people,

Decentralization

[Ejl

popula¬

of its population, by 1960

if present trends

Most

Results

OF THE

Large

Cities

This

decentralization

ring in most of
The

current

tion

in

FIRST NINE MONTHS

occur¬

largest cities.

of

decentraliza¬

rate

city

any

is

our

be approxi¬

can

easily from available
population and building statistics.
me

Boston

use

recent

as

an

example.

have

we

years

been

1952

Operating Income

$8,831,208

$5,848,741

before Taxes and Contingencies

$2,767,756

$2,034,223

and Contingencies

$1,315,006

$

year

in

$

1.29

$

Common

$

693,926

homes

a

people.
been

year,

$

189,100

$

Net Income

people

population

Boston's

rate of

a

Clearly

per. year.

has

after

Income

Net

Earnings

per

number

Taxes

Common
of

Share

Common

Shares

on
average
outstanding)

Number

of

Pounds

moving out of the city at the
rate of about 10,000 to 14,000 per

GROSS

year. I appreciate that undoubling,
conversions, and reduction in fam¬

tion

slightly, but not, I think, signifi¬
cantly.
Viewed in another way,

Boston

is not replacing its existing supply

1.11

of

Gas

Sold

OPERATING

17,732

264,112

Installations
-

179,674

190,881,160

111,274,882

1

51% ahead of the

I
I
1
I

are

ily size will modify these figures

INCOME for the first nine

months

was

period in 1951. This increase reflects the ndtural growth of the Corpora¬
a
whole and the acquisition, as of December 31, 1951, of Rulane Gas

as

number of Common Shares outstanding during
the 12 months ended September 30, 1952 increased to $1.80 from $1.66 in the
previous comparable 12 months period.
Company. Earnings per average

MARK

ANTON

President

R. GOULD MOREHEAD

"■

Treasurer

\

of

housing.
Boston's 225,000
dwelling units are wearing out at
the

rate

year,

rate.
Are

of

at

assuming
These

least
a

4,500

units

a

2% depreciation

worn-out

we

S U B U R B A N

PROPANE

dwellings

being replaced by only 1,500
units. Even if

include

GAS CORPORATION

Whippany, New Jersey

con¬

This advertisement is not intended as an

offering of the securities of the Corporation.

_1 New York City, Population Report lj

City

1951.

Planning

Commission,

i

(based

17,000

people

866,048

Dividends:

Total

enough for 27,000

growing at

■

$ 571,862

Preferred

Gross

the

City of Boston, enough for
4,500 people. In Boston's suburbs
we
have
been
building
9,000

1951

Comparative Highlights—

mated

new

Estate

the de¬

can

Freres

writing the offering and the

New York City at the rate of 60,-

by Professor -Wheaton be¬

fore

we

11.

Lazard

eco¬

cannot

in

We

of

banking syndicate headed by

support cheap and regular public

These

stop

ratio

subscription rights to expire

Others

equally serious problems. During

2 U.

building is pulling people out of

schools,
They

roads.

the

in

share to 2% shares held,

cannot

sewers,

growth.

of

rate

and

A

share

per

new

Dec.

on

million and

'

million

a

with

nomically

neigh¬

damage to

if

the

Suburban

This decentralization of popula¬

we

velopments cannot be served

in

efficient, more
livable. This is a

more

Problems

cen¬

\

current

of subdivisions. Scattered de¬

crop

do in

can

grams.

country was only
their suburbs was

45%.

one

of services may be poor.

realize, far more comprehen¬
replanning than even the

most

tion also results from the fact that

more

out of the city.

The two factors of declining birth
rate

that

10%;

their

from

levels, and

more

which

sive

tral cities of the

over

services

poor

same

should

builders

800,000

largest

next

harvest of high taxes and

a

im¬

drastic
we

not

economy

cities

our

The average rate

12

the

can

quire far greater efforts than

expensive.

crowded,

urban

now

obsolete,

are

building 1,500 homes per

birth rates of the

in

They

present

areas

process.

avoid serious

can

during

The

them?

working,

afford to leave them in favor

can

In

Future

into

They

however, prevent decentralization
from becoming depopulation. We

NAREB

people leave these

They
have
lost
their
appeal
to the
American people and are being
deserted by as many families as

Let

people for the decade.1

Now the high

them.

of

dirty,

high

a

natural increase (i.e. an
births over deaths) of
580,000 people, which produced a
final population increase of 450,enjoyed

are

during the

Because

decade.

all

population.

more

of

steadily.

grow

Why do

by

will

centralization

^abundantly obvious in

cities.

our

important

reap

of most Americans to

we

move

trend

most

during

and

reasons

The

the

unplanned

unanticipated

some

which

cities than

development of

in

produce

strong

Our great metro¬
continue to attract

presently
concerning trends

known

will

neigh¬

politan

Wheaton

in.

$24.50
with

and

rehabilitation, in park
highway planning — all that

ban population.

C.

diffused

stockholders of record Nov. 26 at

pattern of residential development

borhood

declines in

L.

only

redevelopment,
borhood conservation,

growth is the de¬
dispersion of ur¬

Vvm.

is

This

ing 266,227 additional shares of its
capital stock " (par $10)
to
its

transportation.

area.

The

urban

task

what

of

rest

remote.

live

recreation.

pleasant,

understanding

land.

The Magma Copper Co. is offer¬

which they require. Tax rates may

produce absolute
decreases in population. In all ex¬
cept four (Los Angeles, Detroit,
San Francisco and Washington),
a
continuation of high levels of
suburban
building will produce
substantial—I might say serious—

of

could
to the

leaving the city be¬

provements. All that

the last decade.
of them a decline in birth

alone

They will have
amounts
of
vacant

large

decade. Many suburban areas will

the

depopulation of central

produced during

much wider

older urban areas.
very

can

and

have

should

alone

of

consequences

city is the economic

are

those

un¬

present

however

isn't fit to

low densities,

than

vironment for living, for

may

Boston—100,000; Chi¬

increase

it

lower

this

damage

infect

araa,

75%

of

it

decades,

soon

to

demand and will get a better en¬

other

been:

ral

structure.

a

People

costs.

great cities. A rotten

central

cause

—

these rela¬

will

50

Offer Underwritten

The

area.

is

extent

process

serious

our

urban

The

cago—150,000; Philadelphia—60,000; Pittsburgh—60,000; St. Louis
40,000; Cleveland — 60,000. In
eight of our largest cities, popu¬
lation growth was less than natu¬

research
on

in

have

knowl¬

edge,

out-migrations

cities

much

more

net

suburban

busi¬

urban

heart of the metropolitan

rough

very

and

two

in

of

core

a

a

values,

it continues at

If

for

core

approximation of natural increase,

uses

duration

known.

to leave should

Using

areas.

at

retail

probably rising

The

Very similar relationships exist
the central cities of eight of

politan

and

central

property

decentralization

the nation's twelve largest metro¬

land

move,

declining

and

the
in

largest

declining

mean

ness,

result

pie have wanted

Our

losing population

are

rapid rate. These losses of popula¬

dispersion of

or

obvious.

Magma Copper Stock

unincorporated parts of the

built will have very

cities

look to its laurels.

structure

as populations

increase and

eventually

population. .We

The significance of these trends

municipal services.
Urban land

more

areas.

Says people are leaving city "because it
isn't fit to live in," and present depopulation of cities can be
slowed only by drastic improvements. Contends unplanned
dispersion of population to suburban areas leads to serious

problems,

occurred

urgently need some replacement
accounting for our urban

urban population.

,

increase

heavily in the outlying and often

rate

reserve

important trend in last decade

has been decentralization

the

of

the

city is being
diffused, scattered over the coun¬
tryside. Urban areas now being

is

in

Boston's

reduce

By WILLIAM L. C. WHEATON*

most

than

lower

deterioration and must

Department of Regional Planning, Harvard University

Professor Wheaton holds

units, the rate of replace¬
is

ment

19

New

York,

jaasasBBasseEB^asBia

I

20

The Commercial and Financial Chronicle

(2132)

Analysts Not Prophets
keeping pace with
To
be: specific, I question if
the
advance. < Adoption
of
the financial statements are put to
principle of sticking with value their best use.
I do not-mean

dends

(Special to The Financial Chronicle)

ST.

LOUIS;

Mo.

James

—

Mutual Funds

J.

Handley are

Company,
Bank

not

are

•

.

reduces

associated with R. G. Mills &

now

the

of one's vulner¬

area

ability to criticism.
By ROBERT R. RICH

South
Side National
Mr. Carlton was

has

Building.

studied

prices

Investment

formerly with the Harris Trust &

Companies—A Re-appraisal

the

maintain

No

of

stock

will

years

that

who

one

course

the

over

ously

Savings Bank.

seri¬

there

is

al¬

close relationship between
price movements and earnings and
ways a

The

class always ask if I intend to dis¬

text of an address
made by Rudolph L. Weissman

full

investment companies.

cuss

Now

before the New York Society of

speculative
series

dealer

•

questionnaire, I

line of the course, the
also

or

&

Now York 5, N. Y.

of

.

dividends,

attendance

whereas

In my

In reply to a
less
learned that out
shares,

company

than twice

more

as

many

general

eco¬

book, I coined

worthless

trievable

catch

error."

merely putting the data and ratios
on
neat
columns, but- intensive
study of what the changes in the
various ratios signify from a busi¬
of

a

in this kind of

success

We have made full use

analysis.
of

have had

We

standpoint.

ness

measure

available data in company

the

statements

Diversification

There is

class of 40, exactly six owned

a

with

or

nomic and financial conditions.

a.' challenge;

investment

Commission, is Vice-President
of Franklin Cole & Company,
Inc., and author of "Investment
Companies—and the Investor."

Eitoblished 1930
•

has grown considerably.

former member of the staff of
the
Securities and
Exchange

RESEARCH CORPORATION
120 Broadway

■

a

Approximately $4.21 per share
Prospectus from your

that the catalogue contains an out¬

will be of interest to the mutual
fund fraternity. Mr. Weissman,

national

*

Security Analysts on Nov. 28 is
given below with the feeling it

NATIONAL SECURITIES

Thursday, December. 4,: 1952

.

advancing and earnings and divi¬

Two With R. G. Mills

Carlton and John J.

.

.

in information filed

or

with the Securities and Exchange

a more

word

or

"irre¬

The

thought is,
investment- companies
that
are
not specialized should avoid going

Commission with regard to capital

budgets,
and

nance

depreciation, mainte¬
repairs, cash flow and

changes in the relationship, of net
worth

to

This

debt.

not be

may

fascinating as pre - occupation
diversity
;
GNP
five
of their security holdings—diver¬ with
years
hence or
Let me assure you at the outset
sity to be judged not by individual with interpreting graphs of the
of my sympathy with investment
Stocks,
but rather by industry price movements of a stock, but it
company management's problems.
been known
to
pay
off in
classification.
That is why I de¬ has
Centuries ago a young Eastern
After all, in essence, the worries
plore the action of certain invest¬ projecting dividend policy, earn¬
ruler who wanted to know more
of investment company manage¬
ment companies who asked stock¬ ings tendencies and in appraising
about
economic
policy asked a ment and investment advisers are
holders
to
approve
changes in comparative values. Except at ex¬
group of wise men to prepare a
alike.
'
their charter provisions, so that treme points in the history of the
treatise on
\
their security holdings in petro¬ stock market, the search for out¬
Value
e c o n o m ics.
other

owned

stocks.

'

-

out

on

a

limb

as

to

as

the

.

.

_

,

-

The

wise

leum stocks might exceed in price
dealing the
original limitation placed on
securities, to
holdings in any one industry. The
paraphrase a line of Ralph Waldo
particular industry does not mat¬
Emerson, we hitch our wagon to ter.
The principle is
important,
values. We make a conscientious,
and to revise the principle at the
even thorough (we think) attempt
first test of its application, seems
to" appraise
values.
Sometimes, to be ill-advised.
It is true, of
alas, the quarterly appraisals may
course, that the old "debil," capital
show a variance between values,
gains taxes, may have had some¬
as we see them, and the quotations
thing to do with the modification.
at the end of each quarter period.
Arid quotations,
not values,, are
Analysis
used ,m appraisals of investment
I do wish there was less run-1
advisers,
they must be in the

men

In

-*■>»»■■■■■■■■■»«
<«■■■■■■■■■

■eeeeeeee^d
Mni

eemrjd

bum

mmmmmnrd
1

mmmmmw

30

some

•■■a

I

llll

Nana

:::::

The

volumes.

ruler,
middle

now

aged,

-

for

asked

version.

Years

passed and he,;
received

.uiirOTMPUl

..

five'

your

investment dealer
or

PHILADELPHIA

3, PA.

this

time

prospectus from

was;

he

asked
one

he
immm

*

as

and

cross

for

financial statements of investment

Rudolph L. Weissman

a

Whenl this

was

ready

men

the

Perhaps

We all share in the

it is insoluble.

generation of wise

rose

fault, however, of measuring our
the whole subject
achievements" so largely by prices 1
can be put into eight
words.
as the
market's close on one day.
'There ain't no such thing as free
It would-not* solve the problem,
lunch.'"
Today I feel"'like tne
but would assist in its solution if
little boy who used to avoid pay¬
more, attention were paid consist-'
ing his fare on the trolley, having
attended a meeting of the New ently. to income, and continuity of

"Sire,

say:

.

.

York

if

it

For my part,

readily trust
showed

a man¬

occasional

standing

values

securities

may

than

inquiry

market

as

a

tive

whether

to

as

income.

Society of Security Analysts

*

~

*

I wish I could make

without paying for the lunch.

tion

to

the

a

contribu¬

news

headlines

or

the erst¬

while most accepted views in the
financial district.
The industry is

doing

some

serious thinking when

-

-

the

*

-

neglecting. the

approach,

more

or
>

deduc¬

be done

can

with the inductive, method:.: It has

been

more
profitable, to
instances,
to
have

few

name

a

chosen

Seaboard Air Line Railway Com¬
pany common

vania

rect

than

stock
have

to

estimate

as

made
the

to

Pennsyl¬

over

a.

cor¬

future

of

railroad earnings in the aggregate;
West Penn Electric has been
a
more

lic

profitable holding than Pub¬

Service

Electric

&

Gas,

and

more

im¬

correct

a

estimate of the output of electric
energy for the country as a whole;
and assuming one made a correct

forecast of building activity, by
period changes
every standard of value, Ruberoid
holdings show diver¬ was a more
judicious selection
sity rather than a high degree of- than
American Radiator & Stand¬
uniformity.
ard Sanitary.
In research, I thoroughly appre¬
Not being a mathematician, it
ciate the value of national income
the

in

tabulations of

security

studies and projections, and simi¬
tools.
I also know something

lar

central

desirable

more

whole will advance

decline.
Without

specific

among

be

independence of thought than if itQuarterly Moving Average
the choice of the former
always seemed to fit its portfolio
This is an unsolved problem of
portant perhaps than
to

mortally sick and asked if
all the years of labor couldn't be
investment management.
shortened again. One of the sec¬
to

more

agement

was

ond

ning with the herd.
I would

companies.

volume

summary.

wmmmm:

r.

tomes. By

mnwt

work

-

a

condensed

saa

research

our

with the selection of

years

many

with

WELLINGTON

after

returned

is

my

own

general

belief

studies

that

are

so

far

concerned,

as

a

point of man¬
of their limitations. I should like profound acquaintance with and
Certainly, it is
to see a shift in emphasis. Let us
the fact that this group is so thor¬
an
gratifying to do better than the
understanding
of
American
oughly informed, I intend to deal market. 1 One with as philosophic^ have more analysis, a more search¬
history—economic, social and po¬
largely with controversial topics. a mind as Judge Jerome' Frank ing attempt to understanding ofwhat is happening than prophecy litical—are probably the most im¬
No one here needs to be told that has held that value is
what-you-'as
of Sept.
portant aids in portfolio manage30, 1952, some 104 can-get-for-it. That means if you as to what may take place.
In view of the time element and

end

open

-

had

net

billion,
ed t6
first
GENTLEMEN: At
■le a

no

obligation please send

prospectus on

Canadian Fund,

or

that

.

of

gross

had sold

companies

roundly

client's'

$3.7

sales amount¬

almost" $600 million in the
months
of
the
year,
net

were

sales

some

after

$422

or

Dec.. 31, 1928,

stood "at

300;

Yet, " judging by the
of value, stocks

< you

were

too

1928.

My

!

□ HIGHLIGHTS OF 61 RETIREMENT
PLANS—An

invaluable

MUTUAL

Growth Stock Fund

\

Manhattan Bond Fund, Inc.

employers who are considering
new retirement plans. Shows costs,
benefits, data on 61 plans now in
operation. Lists firms using plans.
Request on business letterhead.

SAY

Massachusetts Investors

&oUon &"und

/

booklet

for

EXPERTS

Massachusetts \nvcstors Trust

Fundamental Investors, Inc.

SERIES V

Century Shares Trust

v
v

{

Diversified Investment Fund

ABOUT

.

FUNDS —Informed

•:

I

;

BOSTON

own

INVESTORS'
CHECK LIST

OF

high 12 months before the end of

feeling is that* the
only keys to value are earnings
do
other
parts
of
the
factual and
dividends, actual and prospec¬
framework that would be of in¬
tive, and not market prices—'cer¬
terest to others have a place here.
tainly not as of one day.^I would
I can tell you that interest in be
more
comfortable, if as
in
investment companies appears to' 1948-49
earnings and dividends
be increasing. In classes I
were increasing and returns were
teach,
in the Adult Education Division at
very
high, than I would be at
Brooklyn College, members of the' other times when stock prices are

City

AS

standard

criteria

ing to the latest data compiled as
of June 30, 1952, had net assets
amounting to about $1 billion. Nor

Address.

□ WHAT

pn

would have been in the dog house
in September, 1929.
'
-

that closed-end companies accord¬
Name.

substantial part of your

triaL average

redemp¬

million;

a

holdings

when the Dow-Jones & Co. indus--

nine

whereas
tions

investment
assets

results.

agement

Canada General Fund
'

•

■

i:

opinions from nine qualified ob¬
outside

servers
.

the

investment

Diversified Common Stock Fund

A prospectus relating to the shares of any
of these separate
investment funds may be obtainedfrom authorized dealers or

business.

For your free copies
—check items you

of this literature
wish—mail this
personal or

advertisement with your
business card.

Founded

AVAILABLE

FROM

Kidder, Peabody & Co.
1865

Members New York Stock

PROSPECTUSES

Exchange

YOUR

ON

LOCAL

Chicago
Los Angeles.




VANCE, SANDERS & COMPANY
FUNDS!

DEALER,

111

OR)

DEVONSHIRE STREET

boston

Hugh W. long and Company

Westminster

at

Parker, Elizabeth

NEW

61

Incorporated

Uptown Office 10 E. 45th St., N.Y. 17
Murray Hill 2-7190

MUTUAL

INVESTMENT

Cleveland

San Francisco

CF-10

THESE

3,

New Jersey

YORK

Broadway

CHICAGO
12a

South LaSalle Street

LOS
210

ANGELES

West Seventh Street

I

Volume 176

Number 5174

.

.

The Commercial and Financial Chronicle

.

21'

(2133)
ment

along general lines.

ond aid

best

is

A

sec¬

vestment companies were obliter¬

careful survey of the

ating the line of demarcation be¬

thought

a

recent

tween their functions and those of

in

economic

theory and its application to
rent developments. It is often

cur¬

true
that economic
theory of one year
will be accepted in business and
government policy next year.

holding companies?
To

question:
case

we

take

number

in

pride
of

inevitable

to

seems

that

me

a

be made out for expect¬

can

ing management to take

some

ac¬

discount from net asset value of

a

While

It

the

to

on

tion to correct the situation where

Stockholders

growing

pass

the

investment

25%

or

end

is

more

fund

chronic.

Closed-

reply that

managers

no

wonderful

business

in.- Summer of 1951, and was revised
in the Spring, I stated one might
transaction, the doings of invest¬ change Madame Roland's phrase
ment advisers are wholly a private with regard to
democracy to read
matter and are never published, "Inflation—what crimes are com¬
except when the investment ad¬ mitted in thy name." There is too
Whereas

viser

chooses

enough,

to

far

so

you

are

have to disclose every

we

do

so."

it goes.

as

True

much

vestment advisers have to provide
for

reasons

mended

visers

stock

about

market.

example.

and

Regulation of credit and

shareholders, there is, one takes this point of view with sometimes think if
they do not commodity prices, not to speak of
nevertheless, a difference between regard to bank and insurance
say "What a wonderful business taxes, are mighty important fac¬
direct
company

ownership and the channel¬
ing of ownership through financial
institutions.

What

stocks,

company

is

a

poor

but

the

both

one

analogy

economic

on

are

one degree removed as hold¬
of investment
company shares?
To what extent should investment

ers

company management take issue
with corporate management?
We
are
all familiar with the case of

Montgomery *Ward
shares

held

panies,

by

and

fiduciaries,
is

it

that

If

directly,

its

hand,

panies
wield

On the

investment

organized

and

the

on

com¬

sought

ground

to

arouse

that

in-

to

seems

too

me

much

complac¬
ency prevails concerning continu¬
ous
large discounts.
What to do
about
is

persistent premium? This

a

not

serious problem and is
merely noted in passing. That a
a

A

number

investment

of

panies in their annual
and

the world

at

to

that

suggest

is

evidence

premiums, it is interesting to
call

it

in

that

treatise

a

re¬

invest¬

on

companies published in 1928
contended

was

value

that

the

fair

of

management should be
roundly 35 to 50% of in¬
vested capital. Here is one prob¬

taken at

terms

of

sions

the concrete expres¬

are

this

practice

of

1935

that

FUND

however,

■

44

cents

a

share, payable December

24, 1952 to shareholders of record
4:30

p.m.,

December

S3 til Consecutive

at

10,' 1952,

Quarterly Dividend

at

may not

create

future

part, I should like to
general

for

see

adoption of a
to be applied
in

turn

their

redemption in

a period
acquisition

This

would

not

arise

from

loss

of

protracted period of

a

confidence,

would

but

at

least

to

emphasize that
buyers are unwel¬

serve

buy-and-run
come.

Street, Boston, Massachusetts

must

Federal

Reserve

periods

and

.problem

contain the record of policy

have

be

presents

muted.

«.

prices

another

discussion

Since

funds

in more heavily when
advancing, management

come

prices

are

at times

must

United

difficult series of questions.
or

obligations

a

entails

To

short-term
loss

of

in¬

Secondly, it is possible that

come.

the stock market will continue to
advance.
matter

there

Thirdly, looking at the

from

different

a

light, is

seeming inconsistency in
continuing to offer shares when
a

management apparently believes

propitious time for invest¬
lie ahead? This prob¬

more

ment

fVocpectvs describing Company and terms of offer*
log may be obtained from Investment Dealers or
2500 Russ

Building, San Francisco 4, California

lem

a

of

the

Commercial

Chronicle
that

most

claim to be able to predict
swings of the stock market.
Advisers
The

grass

fence,
the

is

other side

said,

investment
envy

investment

vestment

STOCK FUND

the

on

it

point with
of

Fund Managers

vs.

is

of

always

I have heard individuals

Preener.

THE COMMON

results

field

company

to the advantages
advisers

Scandinavian
the

over

managers.

They

sponsors

in¬

say,

and

"What

a

welfare

of

the

has

ever

the

lifting of
underlying

the

by democratic means.
prior societies, he says, "pre¬
the pattern of a cultivated

in

article

investment

reviews

willingness

policy.

His

answers.

the

of

forming a structure more or
lofty, more or less stable, but
resting on the backs of the under¬
lying population."

contemplated
The

management

publicize their position is
aging.

Press

encour¬

It seems to
and

Other Problems

You

duty

readily think of other

can

problems

than

those

I

get

industry
have

press

together

and

to

a

es¬

some

uniformity regarding
One
cannot
help
observing that the periods used in

have

certain

close relationship be¬

a

items.

tween brokerage firms and invest¬

comparisons of net asset value

ment

not

distribution

staffs;

are

always the same, or that the
aggregate size of the fund alone

companies, where the former
size,

which has been the subject of con¬
siderable
discussion;
interpreta¬

is

tion

fallen.

of

the

balanced

word

fund;

"balance"

the

selling

in

the

turnover

of

the

performance

regrettable, despite
qualifying statements.
It is
that

secret

the

beginning

the period used was

a

stock

the

prices

and

of

time of low
terminal

period

.whether,
1950,
1951
or
period of a much higher
level of stock prices.
*
1952,

One

.

as

cannot

be

escaped

that

to

investors, inflation conjures
up visions of a rapidly shrinking
value of the dollar, not in terms

many

I am some¬
what proud of the fact that in
my

book, which went to

press

net

have

may

world
in

For

espe¬

some

to

seemed

be

years

suffer¬

cial

a

nothing but diseaster
SEC policies, so¬

saw

easy

money,

security

ments.
from

borrow

Keats,

develop¬
quotation

a

the

Street

in these

other

and

To

Fulton

region " below

could

be

described

Group, Incorporated

63 Wall Street, New York 5, N. Y.

INVESTMENT

DEALER




& HOWARD

The open-end fund
but

little

these

ment

visers,

financial

or

There is

panies

manage¬

and

service

of

open-end

com¬

companies,

advisers

for

the

brokers, and the in¬
departments of finan¬

vestment

cial

institutions'.

for closed-end

room

investment

for

institutions.

In

fair

>

compe¬

tition, the best and most efficient
will

establish

Sometimes

the

does make

its

superiority.

number

of

However,

if every fund does not seem

even

to have

in

good

a

the

a place
is better that the

it

sun,

for

reason

method of trial and

error

than to vest anyone with

ity

funds

wonder if all have

one

contribution to make.

a

issue

to

certificate

operate
author¬

the equivalent of a
public conveniehce

of

necessity.

or

Ours

is a high calling. In the
hierarchy of economic functions,

the management of other people's

ranks close to the top,

money

is also

It

serious, demanding call¬
ing. We should use every means
a

maintain

to

the

highest

sell their
fact

their

of

code

learned
checks

that

their

the

Those

who

a

dividend

had

stockholders

made

and

available

others.

far

ahead

industry
of

our

suffers

of

those

dealt

more

problems

sarid

that

and

It

was

Carlyle who

matter

no

artist

loved

his

how

much

subject,

the
painting would be more reveal¬
ing if he did nbt neglect the warts.

Finally, some years ago an im¬
migrant father and his young son
were riding up Broadway
to see
the sights. From time to time the
at

would

with

gaze

awe

the

of

interesting build¬
ings and ask: "Pop, what is that
building?" Each time the father
would
shrug his shoulders and
reply: "How should I know, my
son?" After a number of attempts
the-son
finally inquired, "You
don't mind my asking,
do you
Pop?" The father answered "No,
my son, how else will you learn?"
one

else

How

learn

we

can

except

by asking questions, even though
answers

are

not at

onca

from

page

2

The Security
I Like Best
Car

Company as my favorite se¬
can be summarized as fol¬

curity
lows:

(1) Young, able, and aggressive
management.

has

moved

British

cousins

Diversification

(2)
sion

of

products

and

"feast

exten¬

eliminated

has

famine"

and

the

the

corporation.

This

is not to be ascribed to the statute
The

have

an

participated in for¬

thus

malpractices

to this group.

not

job in the amount of

great

information

and

excuse,

extensively
shortcomings
than with the industry's notable
achievements, which are familiar

to

over¬

incidentally

country

no

guilty.

are

with

the

completely to the dogs.

gone

is

the

Continued

necessary

fears and

from

off

investors

many

their

came

was

of

in the industry

everyone

does not alter the

wares

that

Mistakes

from

people, with

shook

and

years

ers.

attitude toward

of

Investment
wrote

percentage

Montgomery Street

SAN FRANCISCO

now

stockhold¬

The secretary of the Associa¬

Britain

333

ethics.

help, struck out during

palsy. That this

tion

BOSTON

BOSTON

for wise

aspect

or

Earnings sufficient to war¬

(3)

dividend

rant

a

8%

return

prices

plus

equivalent to
current

on

future

an

market

increases

in

OR

INCORPORATED

24 Federal Street

of

forthcoming?

sit and

men

hear each other groan,
Where palsy shakes a few
last sad grey hairs."

in the

investment dealer

diffusion

funds, whether by invest¬
companies, investment ad¬

definitive

words:

"Here where

in the

PROSPECTUSES OF THESE TWO INVESTMENT FUNDS MAT

EATON

demand

a

youngster

made

strange lack of courage
perspective. The financial

and

a

pur¬

stock investment

company shares also seems to me
of
a
dubious
nature,
however
much it helps current sales.
The

fact

mention.

Street

ing from

Inflation

common

the

cially by open-end companies de¬

a

;
The stress on inflation
compelling reason for the

share

contribution

c

serves

Turning to a different side of
investment companies, I think the
extensive use of 10-year charts of

when

used

per

Perspective

Wall

Selling

no

value

com¬

portfolio,

among others.

the

sometimes

asset

a

mission; the management fee; and

STOCK FUND

request

sure

I

that the

me

financial

to

tablish

touched upon, such as the possible

dangers of

the

alone.

on

wider

ment of

who

to

did

YOUR

A

tices

shifts

sent

to

Distributors

and

countries
to

no

the

of

-population

and

sponsors

about

BALANCED FUND

from your

essay,

that

direction.

savings and an age of every in¬
creasing specialization seem to as¬

less

fund

EATON & HOWARD

FROM

use

elite

of

them

EATON & HOWARD

OBTAINED

ciple

growth is inevitable. The broader

number

asked

Group Securities, inc.

prospectus

pie

people

mulating the Investment Company

BE

investment company prin¬
is so sound that further

judgment are
inevitable, but for unethical prac¬

of

a

but

Britain

committed

of years but of weeks.
company

States,

been

days

more

trenchant

a

civilization

my

were

Conclusion

The

All

chase of

in

Two

that

As Alvin Johnson de¬

has

re-inforces

suggestion

feasible.

in

other

Fi¬

and

reporting their holding:

year.

known, Mr. Long addressed a set
of questions to a representative

directly funds

that

the

this

clared

may

concerns

it

party lines.

be confronted with

keep funds in cash

to

see

Open Mar¬
ket
Committee.
The
article
by
Henry Long in the Nov. 20, 1952

<

rising stock
which

on

to

-seems

:a

of

optimism

System

actions of the Federal

have

A !

The tendency of sales to expand
in

annual

and

the

answer

serious problems that might

Dilution
24 Federal

sales,

over

difficulties.

of 18 months from the

date.

persistent

some

serious

penalty of say 1%
against those who

more

Trustees-have declared a year-end
dividend from investment income of

-

i

It would be

in

share in its eating is unparalleled.
This is a policy that transcends

the

election

high.

States

report of the Board of Governors

the

not

United

of

nancial

to

deny that a
of withdrawals

the

re¬

issue

of itself.

care

the

entitled

fort to increase the size of the

Act

after

are

the

last

book

new

ing

is

1952.

&• HOWARD

STOCK

and

Allen's

Frederick

quirement provided in the Bank¬

and

stock

EATON

the history of man-,

recommend

century is only a
prelude of things to come. The ef¬

merit

foolish

analogy be¬

some

I

Lewis

of

belief

more

I

revolution in

state¬

ments

outstanding securi¬

my

Quarterly Dividend

Here

in

the

December 10,

point?

half

shareholders of record

p.m.,

selling

in the midst of the greatest

are

industrial, economic and social

ven¬

the

For

4:30

<

we

a

standard

date

83rd Consecutive

important

so

tween

excess

at

the fear of inflation be

There is at least

share, payable December

to

ex¬

really necessary that infla¬

or

connection with discounts and

value

a

48

24, 1952

full

an

heavy discount is not a
form of occupational disease.
In

that

substantially higher

asset

Trustees have declared a year-end
dividend from investment income of

-

I

as

"The Big Change"
as
the most
effective selling document at hand.
The
amazing advance in living

net

shares

a

tion

The statements vary widely

in completeness and detail.

ties, redemptions of open-end

cents

Is it

the rationale of their deci¬

sions.

inflation

use

policy set forth in the
prospectus only in general terms.

than

Redemptions

BALANCED FUND

large to

I

decisions

few issues sell

In

EATON & HOWARD

com¬

periodic

or

amine

ture

determining earnings and

illustration of selling methods that
smack of opportunism.

reports invite their security hold¬
ers

in

dividends.

kind.

lem that has taken

,

tors

manage¬

company

should be made, at least in
the annual reports. After all', these

ment

if

influence, would this

criticism

on

policies

would have been greater?

other

by

pressure

alter

to

the

com¬

matter

owned

were

likely that the

management

Co.

&

investment

for

is investment

ment."

is

being done and legal grounds.
to prevent the watering down of
Where leverage exists in closedthe sense of participation of share¬
end companies, I realize there are
holders in industry because they other
difficulties. Nevertheless, it

a

of periodic additions to one's
holdings, pension funds, the possi¬
bility of union purchases and other
inflationary period, for developments all point in this

the recent

the

fence

the

once

utility and railroad com¬
panies have done very well during

step
recom¬
Investment ad¬

over

simplification

-

and

Public

every

by them.

look

over

inflation

But in¬

around to

of

publish

a

me

Companies in
that

a

investment

large

they

are

gradually

earnings
show
near

trusts

list of their hold¬

ings in their annual reports—that

is,

dividends

which
growth

by

the

should
in

the

future.

Capital

(4)

a

record

substantial

sibilities
on

warranted

as

can

appreciation

combination

coming factors.

pos¬

be anticipated based

of

the

above

The Commercial and Financial Chronicle

made

is

Announcement

that

The Bank of Osaka, Ltd. resumed

of

as

News About Banks

its

1

Dec.

BRANCHES

OFFICERS, ETC.

San

of

Bank

elected

been

Directors

to

Chem¬

of

*

*

York,

on

the

Dec.

N.

tions

by

Baxter
son,

and

activities

past

bank.

28

is

He

years.

former

a

Black

is

President of the Financial Adver¬

Director

of

tiser's

United

States

Steel

Corp.,

reporter

Co.,
Equitable Life
ciety

"Herald"

the Chase

States, Shell Oil Co. and

Fireman

Fund

s

He

pany.

Stanford

Com¬

Insurance

also

is

Trustee

a

University.
#

*

of

Company of New York, J. Stewart

*

the

on

Jackson,

Company

upon

Dec.

department
30

1

Broad

by

was

an¬

Chairman

the transfer of that

from

165

Street.

Broadway
At

its

new

1953,

2,

share

Richard

with

for

substantially

increased

new

one

be declared

elected

shortly

of

Central-Penn

Bank

of

Philadelphia, it

nounced

sent

the

of

current

of

stock certificates.
Chemi¬
cal's main office continues at 165

Broadway, Mr. Jackson explained,
but the transfer of the
Corporate
Trust
Department to 30 Board
Street

consolidates

bank's

all

of

the

fiduciary facilities in the

heart of the financial
*

*

Announcement

distinct.

to

the

named

to these

been

Directors

feel

that

of current net

the

the

on

be

can

the

sje

made

on

the third

floor, 52 Wall Street,
1, N. Y.

New York
At

J.

Real

Edmund

Bull

of

Estate

and

rector of
was

De¬

on

Inc.,

Avenue,

Nov. 28 by the

The

Directors

of

Guaranty Trust Company of New
York

Dec.

on

declared

3

a

quar¬

*

Yokohama.

near

is

*

under

of L. N.

the

The

general

new

unit

supervision

Johnson, Vice-President,

it

is

totaling $16

share have been

per

The

National

City's

Branch

Yokohama

at

ized in 1902.
in

Japanese

was

organ¬

Other Branches

Tokyo, Nagoya and Osaka.

bank

also

maintains

are

The

limited

a

military banking facility at Camp
Otsu, near Osaka.
*

The
and

posts

*;

election

of

five

employees

to

new

at

The

Marine

officers

official

Midland

Trust Company of New York
announced

on

Dec.

2

during

directors

by

was

James

G.

Blaine, President, following a
meeting of the Board of Directors.

Philadelphia,

of

merged with

was

of

Co.

Trust

under

for the merger were
our

indicated in
issue of Aug. 28, page 751.
if

if

Effective

if

Nov.

the

further

year

1952,

Trust Co. and the

Security

Equitable Trust

State

eral

of the

members

Reserve

Fed¬

System,

merged
under the charter of the Security
Trust

and under the new
the
Equitable Security

Co.,

title

of

An item

Trust Co.

bearing

on

the

the company

be split five for one
by reducing the par value of the
shares

from

ized

the

The

;

#

:j!

absorption

announced
of
of

shares

from

1,000,000 to 5,the new stock to

be distributed to the stockholders

by exchanging five shares of the
$20 par value for each share of
the $100 par value stock now out¬

standing.

Charles J.

C.

the

of

is

3

Bank

Farmers

Belville, Ohio, (a State member
the

Federal

for

number

a

of

Mr. Doyle joined the bank

1913. After
capacities, he

serving

29,

was

ap¬

pointed Auditor on Sept. 10, 1942,
was made Cashier on July 1, 1948,

Gardner

Jensen, to succeed him as Gen¬ becoming a Vice-President and
in January,
1952.
Mr.
eral Manager, were announced on Cashier
Dec.
1,
following
the
bank's Bradley joined the bank in Nov.
1912, and later joined the
135th annual meeting, by B. C. 19,
United
States
Navy
(in 1917),
Gardner, President since 1948. Mr.
Gardner

has

Executive

elected

Board

and

Committee.
President

becomes

senior

been

the

of

man

banking

Chair¬
of

Mr.

of

the
Ball

Canada's

institution

after

Manager.
Beginning his career as a junior
at Perth, Ont., the new President
takes over jas chief executive of¬
after

ficer

broad

a

He

served

returned

Cashier

in

April,

in

dent

where he

was

York,

active in Canadian

who

bank with

than half

more

banking

of

tury

McGill University,
Chairmanship of the

of

to the

comes

Mr. Gard¬
recently
made

was

a

experience

cen¬

be¬

if

if

The
O.

Vice-Presi¬

1945.
*

*

'

C.

Calvert

Hon.

Pratt,

of St. Johns, Nfld., has
elected a Director of The

B. E.,

head

New

years.

and was

1936,

Assistant

appointed

bank's

in

two

bank follow¬

the
Armistice, and subse¬
quently became a tax specialist.
He
was
named
an
Assistant

Canadian

agency

for

the

to

ing

experience

38 years.

he

where

Immediately before
his appointment as General Man¬
ager in 1947, he was head of the
over

Chancellor

Nov.

on

been

Bank

Commerce,

of

Toronto.

office

Senator

Pratt is Chairman of Steers Lim¬

associated

companies,
Director of other
Canadian companies in diversified

ited

and

also

is

and

a

-

fields, embracing manufacturing,
insurance, steamships, distribut¬

ing services, utilities, etc.

Reserve

System)
by the Farmers Savings & Trust
Co.
of
Mansfield, Ohio, also a

Continued

from

page

13

State member.

capital

ported

of

$1,250,000 is re¬
of Nov. 20 by the Lake

as

National

Bank

of

creased from $1,000,000 by a

dividend

of

stock

$250,000.
if

The

sale

Security

#

of

if

new

Bank

$900,000

from

became

crease

Pension Funds

if

if

A

$100 to $20 and in¬
number of author¬

000,000 shares,

Bertie

ner,

determined

Jan. 21, a recommen¬
the capital stock of

office

executive

bank

the

various

in

affairs. His predecessor,

page 669.

stock

to

the

bring the capital of the National

on

to

Controller.

and

by the bank.

Oct.

on

issue of Aug. 21,

be held

that

with
years.

proposed merger appeared in our

amount of $100,000 has served to

dation

Cashier

and

new

a

created

five years as its General

the

3

approval at the annual meeting to

creasing

*

Broad

North

the
charter
and title of the latter.
The plans

to submit to stockholders for their

first

declared,

is

This

He

*

Street

Philadelphia

Shore

who has overall direction of Na¬
tional City's Branches in Japan.

Francisco

San

of

13, J. F. Sullivan, Jr.,

Vice-President

Mr. Kee¬

Chicago,
The result of this action,
indicated, is that dividends III., the amount having been in¬

Dec. 15.

Bank

Nov.

Vice-President

members

-f

of

Board

the

President, announced that George
M. Doyle had been promoted from

Army during

24 the

*

ff

*

S.

Bank

corporation.

Secretary.

*

the

*

of Oct.

both

Mortgage

Fifth

500

announced

National
held

A.

Co., both of Wilmington, Del., and

terly dividend of $3.50 per share
on the capital stock of the
com¬
pany for the quarter ending Dec.
The National City Bank of New
31, 1952, and an extra dividend of
York on Dec. 1 established limited $2.50
per share, both payable on
banking facilities at Camp Zama, Jan. 15, next to stockholders of
Japan, a U. S. Army Base located record at the close of business
Assistant

an

C.

of

meeting

a

Board of Directors of Croker First

Arthur C. Jensen

an¬

II.

Broad

the

shares

appointed

was

of

capital $250,000

*

*

partment of Manufacturers Trust
Company of New York as Di¬

a

meeting of the Board of
Directors of City Bank Farmers
Trust Company held on Dec. 2

by

Staff

the U.

National

basis

beginning Dec. 1 the Adver¬
Election of Howard F. Sunshine,
tising & Publicity Department of Vice-President in
charge of the

formerly on the 15th floor at 20
Exchange Place, will be located

was

Reginald Ball

Gordon

*

*

Following

who moves up from the post
Assistant
Cashier, has been

As

maintained

number

larger

Assistant

1947

Doyle and Mr. Bradley have been

operating earnings

rate

new

that

The National City Bank of New
York and the City Bank Farmers
Trust
Company of New York,

26

Department.

*

which will be outstanding."

has

been

posts are Charles

Jr.,

War

increase

in

and

General Manager in charge of the
bank's
Ontario
division
at
the

Personnel

Williams,

World

be

Assistant Man¬

as

was

securities department
at the head office in 1935.
Eight
years later he became a Superin¬

Department and James Nannos of

in

notice

New

appointment with

Bradley, Assistant Vice-President,
was appointed
Cashier. Both Mr.

served

will
a

bank

and

London

both

Lafferty, formerly head of the
Bookkeeping Department; Edmund

11, 1952, and

there

in

over

ager of the

E.

each

for

share

stockholders

proposed

the

President.

Sienkiewicz.

Mr.

the

on

extends

York. His first

nan,

in
capital. If their recommendation is
approved
by
stockholders,
the
on

experience in
38 years,
during which he has served the
Jensen's

Mr.

banking

The ap¬
pointment
of
three
Assistant
Cashiers also was announced by

per

special meeting called to vote

a

on

*

Nov.

on

and

offered

death about five years

Spinney's
ago.

its

National

dent

cents

afterward

business, particularly in the trans¬
fer

C.

Vice-Presi¬

Assistant

an

share

Dec.

on

Arthur

of

with Central-Penn since 1929.

of

of

George W. Spinney whom he suc¬
as
President
upon
Mr.

ceeded

*

has

Keenan

of

be

to

or¬

Assistant General Man¬

an

if

rights to subscribe to 250,000 ad¬
shares

Ball

and

to recommend to stockholders that

ditional

appointment

and

R.

of the Bank of
office Montreal,

new

*

H.

35

basis

room

Mr.'
once

head office.
if

ten shares held. The dividend will

Chemical's
Corporate
Department
will
occupy

more

also

was

ager, and ten years ago he became
General Manager under the late

Nov. 21.

$38,200,

per

address,

floors,

Like

Bristol.

head of the bank's New York

bank

Bank

increased

has

$40,000 of

the Credit

from
cents

40

to

payable

dividend

quarterly

Trust
four

native

his

Ball, Mr. Gardner

tendent

"The Directors plan to
Jan.

nounced

in

from the
stock. The
increased capital became effective

made the

Bank

Trust

Chairman of the Board,
following statement:
increase

Baker,

,

stock¬

Gordon

Presidency
Montreal, head

❖

National

J.

Sienkiewicz,

At the annual meeting of

expansion of the Corporate
Trust
Department
of
Chemical

to

Magazine.

holders of Bank of the Manhattan

An

&

1929.

the

of

United

Biack

B.

sanies

Assurance So¬

of the
before
joining
He is editor of

if

N.

of

dend

sale of

a

editor

city

staff in

the

was

Indianapolis

the

on

and

Miami

Pacific

Gorrell

Mr.

"Star"

Southern

Keyport,

in

chapter

Association
York.

New

of

the

capital from $61,800 to $140,000;
the
enlargement of the capital
came
in part from a stock divi¬

Equitable

the

of

and subsequently
the Chase National Bank for the

Chairman

Mr.

^

$315,000 as a
of $50,000 of

sale

*

Mr.
with
public rela¬

Trust Company

Jack¬

the

of

advertising

from

Peoples

The

been associated

Huckel, has

was

announced
1

it

stock.

new

by

President.

Ebbott,

J.

Percy

New-

it

announced

it is

Election

National Bank
Y. now (as of

capital of $365,000

a

the

of

Chase National Bank

York

New

of

has

N.

increased

result

Relations and Advertising

Public

Hicksville,

—

Second Vice-Presidents on the

staff of the

&

Com¬

of

pany

for

he'

made

Nov. 21)

received promotions

Huckel have
as

ical

Mr.

England,

1953.
*

William

and

Gorrell

Stuart

Fran¬

Electric

Trust

1954,

McLaughlin and
each
were
chosen

Japan.

cisco, President of Pacific Gas &
of

Mr.

ending Dec. 31,

term

and

in

Born

ganization. Subsequently, he was

of

the Board

year

three-

a

him.

went to Canada in 1906 at the age
of 22, after five years' banking'

Thomas

The Long Island

has

unexpired portion of

hind

three-year terms beginning Jan. 1,

*

Co.

Ltdat

Japan.
Its
New
York
is at 149 Broadway. The
bank has 137 branches throughout

CAPITALIZATIONS

Black

is

office.

Mr. Hulcy was chosen for

agency

Bankers

and

REVISED

B.

Director of the Dallas Reserve

Bank.

Osaka,

NEW
NEW

James

Bank,

head

bank's

The

B

name,, the

original

Sumitomo

The

viz:

CONSOLIDATIONS

a

Thursday, December 4,1952

...

(2134); J

B

*

Chicago

of

$800,000.
effective
❖

to

The

in¬

Nov.

19.

sion

fund

R.

Parten,

Board
Bank

Nov.

of
of

the

Federal

Dallas,

of the

Reserve

announced

on

18

that, as a result of the
recently closed, J. Edd
McLaughlin, President, Security
election

State

Bank

&

Trust

Company,

Ralls, Texas, has been re-elected

been

question as to their being money

ity corporate bonds—I would say
perhaps a notch above the quality
standards customarily set by life
insurance companies.
That goes back to the reserve
question. I think any one will

investing, which also differs from

agree

that if

cessfully
grade

*

Chairman

has

good.

sound
J.

investments

the preference for what might be
called good quality and high qual¬

a

want to run suc¬
portfolio of
lower

you

corporate bonds, the only
way to operate is to ac¬
out of your additional

cumulate

yield
If you

reserve

a

for future losses.

eliminate the possibility of

operating

on

that

reserve

princi¬

ple, and open up the possibility
which

I

mentioned

before

of

a

high incidence of bond losses in a
year in which the company would
not like to make up the deficiency
in the fund, then you can under¬
stand the preference for the better
quality of corporate obligations.

phase of pension fund

Another

the

life

companies, is the use of

common

stofcks. Here,

can

the

see

lack

again, yotr
liquidity

of

a

problem. The fact that you don't
have to deal with valuation for
statement

purposes means

pension fund, as

investor,
much
than

that a

true long-term

reasonably take a
in equities
types of savings in¬

can

larger
other

stitutions.

a

position

The

motive,

of course,
which

is the better rate of return

stocks
a

provide currently and over

period of years.
The usual

approach

stock investing is the

on common

dollar-aver¬

aging one. That is rather natural
as
in rapidly growing funds, where
Director; J. B. Thomas,
actually you haven't got too much
John P. Maney and Donald K. Public National Bank and Trust President and General
Manager,
of an option.
A new fund, after
Mackenzie; James F. Schneider Company of New York, at its Texas Electric Service Company,
all, may be growing at the rate
Fort
was
advanced
Worth,
Texas,
has
been
from
Assistant meeting on Nov.
That doesn't mean that they all of 20,30 or 40% a year in its early
26, declared a
elected
by
member
banks
in
Treasurer to Assistant Vice-Pres¬
have to be gold-plated. They don't
regular quarterly dividend of 50
years, so that even if on a timing
Group 1 as a Class B Director;
have to be AAA bonds or they
ident.
Advancement to new of¬ cents
basis you decide that at the be¬
per
share for the fourth and D. A. Hulcy, Chairman of the
don't have to be AA bonds as used
ficial posts were to Thomas G.
quarter ending Dec. 31, and also Board and President, Lone Star in the
customary rating systems. ginning you wanted to acquire
Gas Company and the Lone Star
Heffernan,
Assistant
Treasurer, an extra dividend of 25 cents per
But the preference for
pension your whole stock position, you
Producing
Company,
Dallas,
and James Frein, Assistant Sec-' share
both payable on Jan. 2, to
fund trustees is for bonds about wouldn't have the money to do
Texas, has been elected by mem¬
retary.
shareholders of record Dec. 19i
ber bariks in Group 2 as a Class which there is relatively
little it. As a nractical matter, there-*
Promoted to Vice-President from
Assistant
Vice
President were
-

.




if

The

Board

:J:

of Directors

by member banks in Group 3

of

The

a

Class A

Volume 176

Number 5174

The Commercial arid
Financial Chronicle

...

(2135)
fore,

you are naturally led
dollar averaging approach.

These

to

a

funds,

as I have men¬
all different, and it is
hard to "say what might be a
typi¬

tioned,

cal

are

diversification.

I think you can

that corporate bonds account

say

for the bulk of the

going
at

on

new

investing

today. Common stocks—

least

in

institution—we

our

think of
typically as representing
25 or 30%
of a fund. In some

it

cases,

be

may

higher,

in

and

some

cases, it may be lower. The
bulk of the balance are

corporate

I think it is fair
to say that the
Revenue Act of 1942 was some¬

thing of

the Act which
put the real step-up in
individual
income tax rates into effect.
We
have
gone
even
further
from
there. That
means, of course, that
the individual
high income bracket
investor who fed this stream
of

had

in which

stocks

markets

type

so-called

preference

common

stocks, such
as
operating utility companies, bank
and insurance
equities, etc. Mort¬
gages and real estate
I

as

mentioned,

investments,
relatively

are

small.

of

we

equity

amounts

them

of

funds,

available

and

for

the

making

financing

Of

large-scale business enterprise.
The thing that is different
about
the pension
trusts, insofar as the
capital markets are
concerned, is
that a
relatively higher proportion
of the funds
goes into the
equity
markets.

In

insurance

the

of

case

our

companies,

life

savings

banks and
savings and loan
ciations, the amount of

asso¬

equity

money
hands is

flowing
through
relatively small.

their

period,

had

could see

in

money

because
in

come

will consider question of revision
of the Bretton Woods
Dr. Einzig points out U. S. has
control of this
is

no

the

not proven

national

LONDON, Eng.

the

lower

revision

a

income

the

flow of

Woods

sion

of

money. These pen¬

trusts

in a fairly significant
have also added to the flow

way

equity

This, I think, is
one of the
encouraging and very
constructive developments which
in the

seen

capital

be

til

the

no

value of dollar in terms of
gold, and says such
would be again a resort to

Woods

bmancial

and

forms

part

Loan1

Agreement

Your issue of Nov. 20
contains
article
by Dr. Paul Einzig

(London, <E'ng.),

factors

sary

an

under the

ing "Gold Dollar Price
ing Converti¬

cannot

head-

and Ster-

are

the two

which

true S°ld standard.

neces-

constitute
And

if

a

eafch

nation would set the "value"
its
of

of

own

monetary unit in terms
a definite weight of gold, and
rigidly adhere to that standard—

as

of

done, in the past, in keeping their

study

respective currencies "as good as
gold"—rather than for a nation to

by

all

Amer¬

icans
a

c

of

some

tary

the

being

Britain

feel

that

and

countries

the

currencies

of

the

belonging to the Inter-

national Monetary Fund" is some-

"convertibility"

about

would

it

all

controls

it is to
to

be hoped that it will
be.

the

majority

vote

the International Bank and the

"unpopular"; for

Commonwealth

the

when

it

in

was

Woods

1944,

than

esty

to

have

their

govern¬

again resort to the dishonof

"devaluating" the Amer-

ican dollar.

Let other nations do

and

the

accepted

by

under

the

tended

has

public public bankruptcy under the apdisguised pearance of a pretended payment."

real

a

been

appearance

of

a

pre-

payment."

Much is said in the article about
the need for "sterling convertibil-

ity"

that

the

"gold

price"

likely to "be linked with the
tion

of

and

that

sterling

is

ques-

convertibility";

the

subject will "figure
very prominently on the Agenda
of the impending London
meeting
of

Commonwealth

isters." None

can

Prime

properly question

"convertibility"

are

closely




re-

revert

to

There
that

assume

absence of

is

passed and it is now
an idea about what is needed

in

out

postwar
the

of
the

in

seven

Plan

The

authors

never

intended that
which they laid down

rules
1944

held

world.

could

and

should

be

up¬

in

perpetuity. It was essen¬
tially an experimental plan and
the

revision

is

called for

now

in

the

one

respect at any rate both

supporters and

in

the

ment

the

critics

of

inspiring the

inducing other

govern¬

preciation. With the memories of
'thirties still very much alive
American experts and poli¬

ticians

responsible

considered

it

of

This

that
the

do

when

for

the

Plan

im¬

paramount

past

object

the

of

Bretton

to

in the United
reasons

There

are

the

Commonwealth.

will

be

followed

by

participating

in

all
the

at

so

this

the

the

years

The time has

that

Bank

while

has

the

is

the

return

to

by the

convertibil¬

manager and iii

a

director of Drill¬

a

Exploration Co. of Dela*Twin
Oil
Corporation*

Austral Oil Exploration
and other corporations.
Mr. Shipley has been

with the
firm since 1933 and in recent year's
has been a manager and senier

loaning
the

officer.

He

is

Co. of New York.
Established
Brothers

in

1818,

Harriman

&

total

assets

$230,000,000.
commercial

firm

also

of

addition
an

investment

Stock

pletely

New

has

been

virtually
for

ther

York

which

to

its

banking activities, the

conducts

York

since. The

is

approximately

In

advisory
memberships

and

Brown

Co.

oldest and largest private
banking:
firm in the United
States, with

holds

ever

director

a

Manhattan Life Insurance;

ity, early in 1948 the Fund sus¬
pended its operations almost com¬
frozen

Company,

Inc., Hydrocarbon Production Co-

International

caused

pressure

premature

&

ware,

of

been

has been

business. He is

pledges

what

Jan. 1, 1953, it has

on

charge of its investment advisory

prac¬

supporters. Having granted fairly
substantial
facilities in
1947
to
meet

announced.

years

earliest

arrived, however, to
and to readjust
with

I*.

gen-

Mr. Ackerman has been with
the firm since 1930 and in recent

Generally speaking it is true to
say

City,

been

them

accordance

and

riman & Co., 59 Wall Street, New

not

seven

Ackerman

York

in the

became

G.

Shipley will become

eral partners in the private bank¬
ing firm of Brown Brothers Har¬

concerning devaluation and con-,
vertibility should be eliminated.

extensive

business.
the

on

It

New

Exchange and the
Exchange with

Curb

the

for

required applications*
approval of the admission of

its

the

new

States.

One of

why the Plan had

en¬

reason

was that those responsible for
policy felt the need for pre¬
serving the recources and good

of

the

Fund

would

for

stand

conditions
chance

a

operating successfully.
that

the

facilities

of

They

of

feel

the

Fund,
would be

partners have been filedL

General partners include
Moreau D. Brown, Thatcher ML

Brown, Prescott S. Bush, recently
elected

United

States

Senator

from

Connecticut, Louis Curtis*
Harriman, Stephen Y..
a mere
ocean in face Hord, Frederick H.
Kingsbury, Jr.*
of abnormal requirements result¬ Thomas
McCance, Ray Morris, HL
substantial

they
drop in the

ing

from

as

the

are,

fundamental

dis¬

E.

Roland

D.

equilibrium that characterizes the

Pennington and Knight Woolrley. W. Averell Harriman is

postwar

limited partner.

period.

continued
1948

sion

Parks

necessarily mean
the basis of the lessons of

hausted

a repetition of that
should be prevented.

was

the-

To Admit Partners

ing
does

on

experience

foremost

Plan.

cf

of

International Conference of

David

ticable.

portance that
The

by

countries

the

would

when it

the

instance

revision

a

Woods

Conference

Woods Agreement
British Conservative Govern¬

lessly wrong. The main object of

the

of

using thenv

one

others. It is to be hoped that,

involved
an

Bretton

will

and

the

might

the consideration of the problems

pledge of remov¬
ing exchange restriction embodied

the Plan prove to have been hope¬
the United States in

the

that

this

light of experience.

In

for

only

scope

Bretton

every

even

its

acceptance

the

with

made available

are

is

con¬

it

to

would

its

Had

grant

the

Fund

facilities

probably have

resources.

It

in
ex¬

would

La Salle St. Women

have had to suspend its operations
and would have shared the fate of

Christmas Binner

the Bank for International Settle¬

CHICAGO, 111.—La Salle Street

ments, whose attempt to grant
help in
the
Central
European

Women

crisis of

Christmas

1931

resulted in

its total

demobilization, from which it has
never

recovered.

will

December

Hotel.

A

have

Dinner

9,

their

The

at

cocktail

annual.

Tuesday*

on

Chicagoaia.

party

will

be

countered
"devaluation"
strong
opposition
in
pro¬
Beyond doubt, in itself the Fund held at 5:30
motes inflation; and it is reason- Britain was because many British
p.m. just before the
is not strong enough to cope with
able to assume, therefore, that experts and politicians were on
dinner, and a Christmas program,
the
dollar
gap.
It
could
and
upraising of the gold value of a their part reluctant to relinquish
should, however, supplement other has been planned.
currency would have the opposite the freedom of Britain to deter¬
arrangements which will have to
Following their customary pro¬
effect. If we do anything, there- mine the exchange value of the be made in order to enable Britain
cedure, gift packages from the
fore, let it be in the direction of national currency, and to avoid a to return to
convertibility. The
various members of the group wBl
more, rather than less, gold per depression, if necessary, by means
mere fact
that the Fund is once

Currency

dollar.

of

FREDERICK G. SHULL
Connecticut State Chairman

Min-

the statement that "gold price" and

to

working reason¬
ably satisfactorily the Interna¬
years
have tional
Monetary Fund has dis¬
easier to form
appointed the expectations of its

requirements.

200

which

wish

to

reason

the

economist,

pedient by
bankruptcy

veryview

of

fact

mere

the need

This

the

found to be practicable.

Since

Woods

world's

by

obviate

a

them in

prevent
Britain
greatest to bear in mind Adam Smith's
Adam Smith
nearly statement ("Wealth of Nations," from devaluing the pound uni¬
laterally as was done in 1931,
years
ago,
who said: "The P- 589) that "raising the denomithat
action
raising of the denomination of the nation of the coin" is merely an when
greatly
ag¬
coin has been the most usual ex- "expedient" for
"disguising a real gravated the deflationary depres¬
was

be

point

facilities

The

facilities

taught by post¬

Plan

ments to accept it was the preven¬
tion of a competitive
currency de¬

S.

would

sterling represented!

Britain's

many

even

and

British Government in 1945, it was
difficult to foresee postwar condi¬
tions

devaluation

from

reexamine

Bretton

drafted

not

moment

revision.

a

no

ment

lowering the in¬

the

Brown Bros. Harriman

the

Confer¬

Plan

greater economic disaster could
possibly befall the people of the

from

Fund.

merely

was

the

thing greatly to be desired. No what they will with their own
nation, however, can raise the currencies;
but
let
Americans
price of gold in terms of its own carefully guard against any furcurrency
without thereby "rais- ther tampering with the gold value
ing the denomination of its coin." of their dollar. Let us continue
And

practical pur¬
States Govern¬

the

into

convertibility.

unilaterally. In

for

U.

G. Shull

gold
of

talk

Einzig is correct in saying
idea of
changing the

continue

"an

of

this

and

charges

Fund.

The

chance of being able to maintain

the United

"the

And

increase in the

price

of

currency in
nation's mone¬

dollar price of gold is
highly un¬
in
the
United States."

Frederick

in terms

all

its

popular

Africa

that

unit,

Dr.

a

According
the article,

South

of

another

currency

yard wide."
to

value

of

largely solve itself.

"all

wool and

the

terms

ggestions

s u
as

both Britain and the U. S. have

set

before

cepting

Einzig

be altered

case

favor

bility," which
careful

Dr. Paul

of

doubt, however, that American
opinion could be persuaded to

is

worthy

of

which

1945,

When

lated; for those

Chronicle.

Government.

vertibility but because under pre¬
vailing conditions it would have
been impossible to do so with
any

aims at arriving at
an
understanding about the nature
of the revision plan that should be
put forward. There can be little

dishonesty.

States

secure

does

Plan

the

sion

move

be

sterling is still inconvertible in
relation to the dollar. This is not
because the British Government

it.

International Monetary Fund. In
considering the subject of a revi¬

need

actual

would

and finance. Seven years after the
ratification of the Plan by Britain

thing,

one

ence

sees

need

of defense" of

country the
pledge of abandoning discrimina¬
tory devices in international trade

V\V

has

ment

Gold

of

strengthening confidence. It
would strengthen the "second line

experience is that it is futile

to

ipilJ

poses

Active advocate of restoration of
gold standard

i

the Bretton

BRITAIN, Conn. — Clar¬
ence J.
Hoey has become affiliated
with
Sweeney & Company, 55

Frederick Skull Takes Issue

Editor, The Commercial

\Wr-

un¬

to

on

to raise

war

United

For

Sweeney Co.

LETTER TO THE
EDITOR;

certain,

of

institution useless

Another lesson

to

agreed

West

limit

helpful

United States.

question

no

States

Main Street. Mr. Hoey was
formerly with H. M. Byllesby and
Company, Incorporated.

United

coerced

,sgIgSSs

can

unless and

mar¬

(Special to The Financial Chronicle)

on

the

of its revision

NEW

Einzig

of

Plan.

there

any

With Dr.

One

—

Bretton

say

kets in recent years.

Joins

25%

participating countries.

of

Needless

money.

have

we

exceeds

impressive, their

case

terest

subjects that occupies the roles
appear
to have been re¬
Commonwealth Economic Confer¬ versed.
So far from wanting to
ence at its
meeting in London is devalue sterling against the wish
the question of
of the United
States, Britain vyas

groups, and that has added to the

equity

in

by these rules. A revi¬
sion of the statutes
removing the

many

gathering small savings

among

Plan,

Inter¬

on

total

Moreover, if the

utilized

in

use

Says U. S.
depreciation has

present limitations

year.

quota In

the

by

to most

to

open-end
investment trusts have been
very
from

out

Monetary Fund lending render the

group

In the last few
years, we made
lot of progress. The

a

practicable. Points

its

on

of

limited

revision.

a

currency

capital

new

no

one

Britain is

matter, but there

doubt that American
opinion favors
objective of preventing competitive

it

25%

limits the interest charged
by the
Fund becomes
very high.
While
the total of facilities
available t»

By PAUL EINZIG

II,
shortage

a

any

amount

Noting that the London Commonwealth Economic Conference

replace this other
type of savings flow into equities.

active in

Now the effect of these
pension
fund operations on this scale in
the capital
markets, I think, has
been primarily to
provide another
vehicile
for
gathering
small

notable

a

of

excess

Plan Be Revised?

seemed to me, of about two
years
after the end of World War

bonds of good and high
quality.
There is some use of
preferred
and

was

equity money in the past, has been
largely taken out of the picture.
We

position to draw

Win Bielton Woods

landmark in the
capital

a

markets. That

23

19°2

Nqv

22

2009

an ar

Chapel St.

New Haven 15, Conn.

eaSue

a

devaluation.

It is the

more

irony of fate that

on

the

ready

would

to

grant

long

facilities

first occasion since the acceptance
of the Bretton Woods Plan when

towards
making that step easier. Under its
present
statutes,
however,
the

sterling

this

was

extent

reluctantly under

per¬

be in,

was

done most

devalued

go

sistent pressure on the part of the

to
a

a

which

way

the

Fund

would

position to help is highly

inadprmatp

No

ronntrv

is

in

a

be
T.B.

distributed

to

ward of the

the

Women's

Oak Forest In¬

firmary.
Miss

Eleanor

Channer
ProciHdnt

B.

Securities
r>f

the

Karcher

ol!

Company

is

nrcfani-7ntirir\

24

The Commercial and Financial Chronicle

(2136)

Firm
Alan

varying economic effects and tax
dollars do not all impose a uni¬

Municipal Bond Market Ahead!

,

form burden on the taxpayer.

San

Browne, Vice-President of Bank of America,

K.

been financed

the

result

recent

is

prices

good,

tion to the dollar volume of busi¬

na¬

enue

new

has

for all purposes.

Additional

Administra¬
tion's

under-

has

development

water

expansion of eastern indus¬

The

of

try into California in addition to

he

the

months,
states, to

Federal, state
A,an K- Browne
and municipal
public financing. Basic rates, ac¬
cording to Mr. Browne, will con¬
tinue firm, with fluctuation from
current levels influenced by pos¬
of

population from out-

domiciled or enroute to
the Far East, has been of tre¬
mendous
dollar
and
publicity
value to the state.
As a result,
nently

necessary

the

of

trek

of-state, either to become perma¬

the benefit of

sibilities

a

assumptions
working out

although
made

in

This is

gram.

led

serious problem

a

in the field of

fiscal policy.

controversies

to

taxes

It has

whether

over

inflationary

are

pro¬

certain

at

lower

income

likelihood

of

taxes

repeal

of

the Excess Profits Tax.

alike

dealers

and

investors

responsive

more

California securities.

and

are

of

offering

to

The market
better

ap¬

praisal of credit has resulted.
The anticipated volume of

new

widened

has

a

that

says

ability

take away the
spend, and therefore
inflationary trends. The
taxes

to

counteract

school

"inflationary"
taxes

costs

are

and

prices (that
passed along to

is,

crease

are

that

also

and

frequently

spending

etc.

the incentives to work and to pro¬
duce more. A high marginal rate
of tax on the last dollar of income

lating to municipal bond authori¬
zations

contributed

re¬

on

Further¬

financing is substantiated by bond is
particularly bad; but
election returns.
California has

Analysis of election returns

taxes

"inflationary" school
high taxes discourage

that

says

the

taxes

accounts,

the

more,

in¬

to

someone else)

lead to free and easy
expense

that

says

help

even mod¬

total

erate

$3,750,000 Excelsior Union High

crease

than taxes—that should be viewed

a

source

The

25% Tax Limit Idea

An Australian economist named

Colin

Clark

thesis

in

society

Bank

America's

of

California

municipal bond average.
This is
equivalent to a return on a tax¬
able

bond

pared

of

with

1948—a

4.92%

3.94%

today,
in

national

the

of

This

come.6

the
is
in¬

taxation

has

idea

created

great deal of interest in

a

Western

when the
of all taxes (national, state
local)
exceeds
about 25%,

Clark
total

and

that

argues

they begin to undermine produc¬
tion

and

have
taxes

corporate tax

Marino

San

District

School

$2,300,000

November

high yield period—when

the 38%

$3,250,000

Unified

tary effort is determined when
the spending is done and the goods

County

and services

bonds.

Mateo

$4,850,000 Whittier Union High
School District bonds.

the remaining goods and serv¬
are available for civil¬

on

ices which

ian

from

page

12

by

other words,

In

use.

standard

Continued

taken by the gov¬
sets the limitation

are

This

ernment.

Community Hospital bonds.

in ef¬

was

San

the

living

of

physical

available

of

level

civilians

to

the real

is determined
output

after

the

government takes its "bite" of the

Economic Stability Through
Federal Budget
insurance
these

has

program

of

effects too because

same

that

in

some

the budget and provide a

tax

rates

be

set

goods and services for government
use.

that"

earlier

this?

surplus

depression, retirement payments
will be stepped up as people retire
earlier, while in a boom retire¬

for debt retirement when employ¬
ment and /national
income are

ments will

should be left alone unless there is

a

will

lag and tax payments

accumulate.

Federal

high.

Then

"some

needy aged will

to States for. the

grants

policy

raters

these

major

change

tax

in

national

of

condition

or

of

national

also rise and fall with the business

life." 4

cycle.

faster than business in booms and

Some

of

the

government's

in¬

will

Tax

will

revenues

go

down

faster

surance

business

cycle

turns

grams

The

activities, such as the pro¬
of the Federal Housing Ad¬

ministration

the

and

Veterans'

Administration, may also operate
to lessen deflationary tendencies.
While

the

amount

written

ance

of

would

new

in

a

recession, the existence of insur¬
would soften mortgage losses

ance

and

thereby avoid certain spiral¬

ling effects.
these

the

On

insurance

other

and

hand,

guarantee

add to inflationary

programs may

in a boom if they are
pushed too hard. As I said earlier,
it is easier to build government
pressures

programs

up

than

to

tone

them

down.
No discussion of built-in stabil¬

izers would

be

reference to

the

done by
nomic
eron

tee

to

monetary and fiscal matters
given considerable thought
stabilizing effects

the possible
The

on

CED

business
has




"this

exert

of

revenues

stabilizing influence
the economy."

Carrying
of

still

fiscal

a

counteract
some

further

program

cyclical

economists

"formula"

the

idea

planned

con¬

suggested

the

port
its

eco¬

is

in

government

claim

on

certain

a

goods and services.

levying

volume

of

If the budget

balanced, then taxes will take

enough away from the flow of in¬

fects at

is

that

one-quarter

I

"bite"

total

a

national

of

of

income

by taxes has these effects in a
general overall way.-/
He suggests three reasons for
his
conclusion:
(-1) "When tax¬
ation
exceeds
25%
of
national

income,

influential

favor inflation

of

a. means

as

will

groups

re¬

public
and other fixed charges in
budget."7
(2) .Taxation at
levels will impair
the in¬

ducing
debt

the
such

the

centives

plant

of the

burden

to

work and

and

taxation

to invest in

(3) Such
employers'

equipment.

will
to

weaken

increases, and
wasteful business

wage

encourage

fluctuations,

have proposed

arrangement

a

"under

which preannounced tax cuts and

upward revisions of spending pro¬

to balance off what the gov¬
ernment is taking from the physi¬

cal volume of goods and services.
It

follows

the

that

also

volume

income

of

this

in

left

way

ci¬

to

vilians after taxes will correspond

approximately with the volume of
goods

services

and

them.

available

There will thus be

to

ciliation
the

the

of

recon¬

a

with

coin

financial

the

side

physical

of

side.

will

into force if

come

be kept

In

are likely to
pretty well in balance.

the

role

final

analysis

taxes

of

apportion

today

is

then, the
to help

the real burden of de¬

our

the

burden

of

utor

of

the

people.
The Burden
Now

it

is

the

to

5 This

turn

to

the

subject of the burden of taxation.
noted

earlier

that

taxes

have

for

Economic

Develop¬
ment, Taxes and the Budget, November
1947; and Monetary and Fiscal Policy
for Greater Economic Stability, December
1948.

way

proposal

at

N.

Princeton,
auspices

Association.

Joint

sion,
4 Committee

The

among

face

to

the
the

was

made

by

a

of

See

J., Sept. 16-18, 1949,
the National Planning
Congress, 1st Ses¬

Committee

on

the

Economic

icies,
ted

a

to

statements submit¬
Subcommittee on Monetary,

collection
the

August

ticle

("Douglas

"the

determine

expenditures

the

Government

of

real

for

so¬

conditions,
like the present. This burden cannot be avoided by "not taxing." 9
whole

a

as

in

that

when

burden

of

believe

I

the

assess

trying to

taxes

of;

or

total expenditures we

should look
the whole budget and all of,
many
economic effects.
No.

at
its

rule-of-thumb

answer

to

as

an

have

the

generally

Harvard

contains

1952

Thomas Mayer)

"Rear¬

an

which thoroughly

analyzes the statistics used by Mr.
in

Clark

breaking
point
will,
help very much, and as far as^
taxes are concerned, bad tax re¬
percussions may be present long
before
any
aggregate economic;
aggregate

limit of taxation is reached.

developing his; Theory
and
is. sharply * critical
of his
methods.
Moreover,
the
Joint
Economic

the

on

Clark

The
should

limit

tax

confused

be

not

theory
the*

with

constitutional
amend-,
which would "prohibit the^

proposed
ment

Government from

Federal

taxing

incomes,
estates,
and
gifts
in.
peacetime at rates in excess of
25%." This 25% is quite different*
Clark's

from

is

erence

cable

to

25%.

ref¬

the

Here

total

the

to

tax

appli¬

one taxpayer.
Ac¬
Congressional Com¬

any

cording to

a

mittee
staff
report,
"24
State
legislatures have enacted endors¬

resolutions"

ing

in favor

kind of limitation

the

others,

which

in force at the

This

it

the

will

is

it

carried

be

ever

it is

that

argue

raise

would

and

Holding

difficult problems.

many

be

to

consider¬
doubtful

arouses

inflexible

too

vetoed

appear

but

Critics

through.

two

present time." 10

project

interest,

whether

re¬

in

Only 15 States have

resolutions

able

and

resolutions;

governor

resolutions.

have re¬

seven

action,

their

their

scinded

this

of

(as of Feb. 21,

"Of these,

1952).

considered

econo¬

by two Government econo¬
(Joseph A. Pechman and

mists

down

taxes

does

not

means

necessarily hold down ex¬

by

and .J have

penditures,
said that if

we

any

it

heard

made all bad taxes

unconstitutional, the result might
not be good taxes but inadequate
taxes.

his
25%
limitation recently (Oct. 6, 1952)
;

.

Eisenhower

General

opposition

the

to

stated

proposed

follows:

as

Re¬

"An

;

;

the
discussion on power to tax, without a like ceil¬
Federal
fiscal
policy early this ing on the power to spend, could
year that was attended by eight
likely result in larger and larger
tax economists—including a pro¬
deficits and a grave financial unheld

port

a

..

ceiling'

arbitrary

on

panel

fessor who is President of the Na¬

settlement.

tional Tax Association, a

research

And

the

rigidity of

a

would

Constitutional

amendment

economist from the CED, and sev¬

be

danger in possible

eral

future

economists

university

:

with

of

source

a

national

emergencies." 11

varied backgrounds in the Federal

the
Budget Bureau.
When the dis¬
cussion turned to the question of
Clark's 25%
tax limit,
not one
of
the
eight
panel
members
supported the Clark doctrine, at
least as applying in this country.
Reserve,

the

point/ they

against Clark

(1) While
tax

were

made
The following:

there

is

always

a

And

nor

for

any

same

length

country.

any one

it

does'

of

time

in

*•'•**-

(2) The tax limit varies greatly

depending

on

the nature of taxes

Government speeding.

and

(3) The tax limit depends on the
of economic development

in

a

of

income.

country, and the distribution

there
ties

tax

The

(4)

the

and

of the

limit^T/aries with

of

tax administration

One

of

the

panel

Walter

______

6 See

1945,

are

members,

Heller
*

of

in

broad

In

Taxes:

National

228.

Some

Tax

Economic

Recent

Journal,

the

outline.

six-months

current

pe¬

riod, budget expenditures are run¬

ning about $36 billion. Budget re¬
will aggregate about $26

ceipts

8 "How
High Can Taxes Go?", The
Commercial and Financial Chronicle, Oct.

1952,

p.

28.

0 A report of the Joint Committee on
the Economic Report has pointed out that

"insofar

taxation

adequate

as

is

an

al¬

inflation, the
question is
simply whether it is not easier to hear
a
rationally planned equitable tax sched¬
ule than to suffer the inequities of a tax
levied by reducing the purchasing power
of

p.

Limit

Discussions."

"September,

the

dollar."

82nd

"Inflation Still

1st Ses¬
Danger," National

Congress,
a

1952

1951,

22.
10 82nd

mittee

Congress,

staffs

of

th.e

2nd
Joint

Session, Com¬
Committee on

the Economic Report and the Select Com¬
mittee on Small Business of the
House
of

"An

certain

things do stand out clearly enough

the

1950.

Coode,

although

ever,

Defense and The Economic Outlook,

Journal,"
December
"Harper's Magazine," Decem¬

and

budget uncertain¬

more

than

sion,

"Economic

7 Richard

p.

attitudes

psychological

citizentry toward taxes.

Professor

into

coming

in Washington in January,

power

ternative " to

•

*

the quality

on

Administration

new

2,

degree

Outlook

before concluding, I
will present a brief review of the
current budget situation.
With a

the

stay

Budget

now,

limit, it is not uniform in all

countries

ber

Current

The

and

Treasury*

the

Among

of

Credit,
and
Fiscal
Policies
Subcommittee"), 1949, p. 439.

.

tax

vieWyOf Economics and Statistics"

81st

Report, Monetary, Credit, and Fiscal Pol¬

to

seem

example,

for

Con¬

ference of University Economists meeting
under

I

burden

of Taxation

time

For

un¬

certain speed." 5

American

disagreed with Clark's reasoning.

-

among different groups of
citizens.
Taxes do not create

price

inflationary

by

But

-

mists

fense

changes in the opposite direction
avoided;
on
the
contrary,
in¬
if price indexes rise at more than
flation would become the distrib¬
a

rises.

Supply and demand

military pro¬
gram, they simply help distribute
employment
exceeds
a
certain it
among the people. The failure
figure or production falls below to
levy enough taxes would not
a certain level, and preannounced
mean
that the burden had been
grams

bothered

come

to

without

Development. Mr. J. Cam¬

ditions.

on

the Committee for Eco¬

of Federal taxes

the

downward.

that

into

that the

say

fit

a

thoughtful work

Thomson and his subcommit¬

on

have

complete

variation

will

up

when

says

automatic

insur¬

decline

Committee

go

would

I

taxes

nomic purpose of taxes is to sup¬

balance

to

do

is

spending

and

ment

some

inflationary ef¬
certain times, but Clark's

Committee

where

Now

but in com-,
alternative
evils.

vacuum,

Government

When

high

have

may

thesis

inflation.'

promote

noted

a

therefore, the burden of the mili¬

taxes
a

countries.

program,

and County Fire House bonds.

com¬

fect.

as

recent
paper
should not be

a

with

parison

the

that

years

of

limit

25%

about

developed

has

recent

economic

imposing

as

School District bonds.

high

ciety

the real burden on
spending.
whole, under present
able when a 38% rate was in ef¬
$179,000,000 Los Angeles Coun¬
Clark's doctrine is of immediate
circumstances. The spending takes
fect. Today better quality 20-year
ty Flood Control District bonds.
the goods and services away from practical importance in the United
California municipal bonds yield
$3,500,000 San Diego City Storm
private use for the use of govern¬ States, because our; taxes have
2.36%
compared with 2.44% in Drain bonds.
ment.
In
the
present situation, recently exceeded 3S% of national
November
1948,
based
on
the
income
and
wejgjchave
been
$4,750,000 San Francisco City with a large defense

when compared with yields avail¬

in

burden

since

one

have a completely different
inflationary
potential
than
a

will

District bonds.

School

are

good portion of the

a

that

judged in

has.

Minnesota,

of

University
emphasized

may

from

it

the

where

from,

come

taken

dollar

deal

great

a

dollars

tax

attractive, Mr. Browne continued,

corporate tax

con¬

any¬

noted,

have

I

as

resistance

of

note

a

go

we

as

Thursday, December 4, 1952

.

dollar taken from another source.

matters

taxes may help to in¬
inflationary pressures by
newly authorized issues including:
servatism, he contends. Electors
inducing workers to demand
vetoed unnecessary public spend¬
$185,000,000
California
State higher wages.
ing and turned "thumbs-down" on School Building bonds.
There is logic on both sides of
all
"crack-pot hand-in-the-gov$150,000,000
California
State this
argument.
But in the final
ernment-pocket" schemes.
Veterans Aid bonds.
analysis, I believe that it is gov¬
Current bond yields based on
$2,500,000 Anaheim Union High ernment
expenditures — rather
a 52%
decidedly

evidences

-

.

there is full employ¬
penalties we pay for
not
taxing"
are
high
in
his
opinion.8 This is similar to my
earlier
point
that
Government

But

way.

.

tax

you

-

entirely paid for

be

must
a

as

-

about these matters,

facts

known

and
conservation,
highways is contem¬

recent

and

a tax on in a boom than in
depression.
Unfortunately, there are few

pass

recession.

business

of

un-

certainty

on to other than the tax¬
who is formally making the
payment. It is probably easier to
payer

high levels rather than deflation¬
ary
as
used
to
be taken for
plated particularly during periods
granted. The "deflationary" school
bridges and

dis¬

pelled the

control,

flood

fi¬

local

and

state

for

nancing

standing of
important is¬
sues

provided adequate rev¬

ness

tional election.
The

of the state.

economy

creased

of

without any strain

In¬
property values in addi¬

the

on

possible extent on a
go basis,
since in

economic terms it must be almost

passed

fornia, requiring expanding

municipal bond
taking in view

like

is to pay for it

one

the fullest

to

effort

defense

a

they may also have different
effects as general economic con¬
ditions change.
Some taxes are

school,
ica, San Francisco, the outlook for hospital and sanitary facilities has
Vice-President of Bank of Amer¬

of

present

pay

and

growth of Cali¬

continued

The

the

ferent taxes act in different ways,

Francisco, holds current bond yields, considering current 52%
corporate tax rate, are decidedly attractive. Foresees heavy
new bond issues, particularly in California.
According to Alan K. Browne,

Dif¬

burden

.

Representatives,

tation
Gift

on

Tax

II The

1952.

Federal

Rates,"
New

"Constitutional Limi¬
Income,
Estate and

1952,

York

p.

1.

"Times",

Nov.

20,

Volume 17$

Number 5174 V.

The Commercial and Financial Chronicle

.

(2137)

billion,
of

leaving

about

$10

budget

a

billion.

deficit

for the business

cycle, but properly
used" in conjunction with mone-:
tary policy, can contribute signif¬
icantly to economic stability.*~"It1
is recognized that fiscal
policy is'

• -

In the first half of 1953
expend¬
itures will probably rise to around

therefore denies them to. civilian
Taxes do not determine the

,

use.

burden for society as a whole
but'
attempt to distribute that burden
Receipts may be ex¬
among the people.
However, tax¬
pected to jump to about $43 or
that-^sh'a'r p% ation itself
$44 cumbersome; and
may have inflationary
billion as heavy
corporate taxes changes in expenditures and taxes-' repercussions.
It is important to
will be paid in March and
June. may be hard on taxpayers. More-:' have tax
policies which are ap¬
A budget
surplus of about $3 or $4 over, there is a danger that ex-; propriate to the
free enterprise
billion is,
therefore, to be ex¬ penditure programs adopted in- a' system and the current
phase of
pected in the first half of 1953.
depression cannot be turrred>voff the business

$40 billion.

As

when

all probably know, one

you

ministration will be to send Con¬
gress

the

fiscal

year

ning

official

Budget for

wanted

July 1,
30, 1954.
The Eisenhower
Administration will certainly wish
make

be

expected

months

many

an

annual

$80

to

take

before

will

billion

1954

;

discussed.

this

of

use

in

the

Certain
turn

eraction

many,

completing

the

next

fiscal

Budget

taxes

turns

of

taxes

this

as

basis,

-

istrative

in

the

of

burden

analyzed.

in

results

Government
absorbs

of

Federal

from

and

at

be

complicated

number of

a

scheduled

picture
the fact

by

tax

expirations

under

Joint Committee

the Economic

on

Report

prepared a memorandum
these taxes for the Committee

on

Nov.

on

to

12, 1952 and I would like

draw

that

on

memorandum

1

"Given the difficulties of fore¬

casting income levels and (tax)
yields derived from them, it ap¬
that if the tax increases pro¬
in recent laws
expire ac¬

pears

vided

cording

to

present

statutes,

the

tax receipts of the Federal Gov¬

2

ernment will be reduced

in

full

a

by approximately $8.5 billion

year

and in the fiscal year 1954

by

ap-

proximately $2.2 billion."

•

There

.

four major tax exscheduled
during this
as follows:
are

pirations

period,

;

"\
;

.

.

'

u

Excess

Profits

nates

July

'

Individual
■

1954

Year

$1.3

$2.5

Tax—termi¬

1,

1953

Income

expiration

f

Dec.

*

_

Tax—

31.

-■*

and

the

part

of

economists

in

cussion below.

country, who have argued
generally that the economic limit
depends on many complex factors.

about

pected

$10

for

sequent
and

of

with

not

or

scheduled

are

permitted

modified

are

be

in market action makes the
at least

ex¬

valued."

sub¬

tax

by

to

by

out that certain of these issues

buyers.

ex¬

(av-

eraged 11V)
'
Corporate Income Tax—de-

.8

___

cline of 5

i

3.0

points April 1,

1954

•

'

Six of these "blue

2.0

__

porary increases

on

i,

April

* 1954

automobiles

and

trucks,
cigarettes, gasoline and
sporting goods)

In

The

tax

position

$2.2

appendix

presents

these

-$8.5
detail

more

situation
cent

expirations

to

be

sary

easy

to cope with

1954

to

about $10 billion

to

per¬

reduce

as

fiscal

begins.

States
rials

and

Now to review the major
points

the

develop¬

ment of fiscal

policy, and pointed
importance was not
generally appreciated until fairly
recently. I also emphasized that

.out

that ..its

the concept has grown so that to¬

day

fiscal

with

the

policy

economic

/spending,'

lending

programs of the

and

ment,

all

is

concerned

effects

and

of

all

insuring

Federal Govern¬

its

revenue

pro¬

grams.

fiscal

policy

is

light of the

re¬

the

of

United

the need for strategic
now
available in

on

BanK

tiie
out

that,

oi

lviomrecu

considering

no

panacea




13

times

what

a

selling

were

discount of about 5% from June 30
same six stocks were
selling

time these

same

Geyer &

Co.

considered

their

"average

«

of

group

31

insurance

companies writing a large
insurance, were selling at only 9-10 times
"probable earnings of the current year,"
yielding 4.10% and avail¬
able at a discount of
approximately 34% from the latest per share
asset value
computations.
;

and resources, along %ith
expansion .program, Canada

its

"benefit

can

and

richly

middle

lossal

over the short
from Hhe co¬

term

appetite

for

materials

of

neighbors to the South," but,
"if, the trend is tpward
an
age of scarcity that cap ,pnly
be averted by major
technological
our

it

adds,

developments,

taking

serious .stock¬
longer rang$. in

some

for' the

the midst of

too may be well

we

advised to do

our

apparent plenty.
For, in the words of the Commis¬

sion,
all

'the

consumption of

materials

-

is

almost

expanding

at

resources

which, whatever else
they may be doing, are not sim¬
ilarly expanding.'" '
'
;

of

in the distant future

for conservation

tor' restrict
materials

raw

its

to

development has,
yet, found little expression* in
trade
Much

and

has

the

financial

been

to

answer

well.^as
tries
we

are

If

getting

rid

hamper

think

two

our

as

coun¬

of

the

have

we

trade,

useful

a

tidying-up to do in

S.

tariff

duties

Canadian

on

manufactured\products.

But the
urge for greater trade and fewer
restrictions

movements

on

of

the border

ways across

being stressed both in Canada

by

the United States.

the

Trade'

Canadian
D.

Howe, at

Nov.

our

job

I
of

Commenting

the

on

sources

of

Canada's economic growth and
prospects of its continuance, Mr.

lated

the

forests

continue

these

external

mines.

Board

in

of

Rt.

luncheon

factors.

the

that to

recent

expansion

external

is

discoveries

upon

ments

which

compete

for

Canadian

develop¬
Canada to

trade relations
and

the

forth.

so

why

the

been

That is

one

of

Canada

avoid

the

sharp

place

in

recession

the

United

that

States

in 1949.

"We
this
is

still

are

basic

in

the

midst

development.

known

of

States

never

The

American

being
even

raw

strategic
supplier of many of the com¬
modities needed in the free world,
and

resources

Continent

used
as

as

standards

of

living of the
peoples of the free world rise,
demands on
Canadian
re¬

we

materials

our

Broad

New

partner,

Gordon

and

coun¬

exchange

without

our

serious

restrictions, but dan the same be
said of manufactured goods and

Etta

and

partners. Mr. Roth will be

states

R.

limited
a mem-

tween the time the

bodily injury and

prop¬

new

The full

impact of these adjustments

operating results because of

rates

are

a

lag be¬

effective and the old policies are

renewed.

Underwriting results should show
the

over

normal

next

year

as

profit margins

the increased
restored.

are

substantial

rates

improvement

become

Stock prices

effective

and

should reflect

this improvement.
The remarks of Mr.
Geyer are indeed interesting and should
be reviewed in connection with

existing holdings

or

contemplated

purchases of fire and casualty insurance stocks.

With

Security Assoc.

Banzhaf,
Robert

come

Louis
L.

A.

affiliated with

sociates,

137-139

—

BANK

Parker

and

Hornstein,

Rhodes

have

be¬

INSURANCE

Security As¬

East

New

STOCKS

Eng¬

Avenue.

Laird, Bissell Partner
WILMINGTON, Del. — Laird,
Bissell & Meeds, du Pont Build¬
ing, members of the New York
Stock

In

admit Louis J. Sneed,

he conducted his

earnings

has not been reflected in

of the New York Stock Exchange.
the past

of the

City.

Helen

Roth,

lower capitalization

There have been "two rounds" of
general rate increases within

and

Partners will be Stanley M. Roth,
general

two

Opens

York

much

be realized in
comparatively good years."
that "the restoration of normal

can

the past year-and-a-half.

land

Street,

at

power—and

were

times "their average

erty damage risks written by these
companies, is now reasonably

C.

11, with offices at 41

advantage

still

Geyer

stock prices of the

81/2% below the best

representaive*wcasualty insurance stocks

(Special to The Financial Chronicle)

Stanley M. Roth & Co., will be

not

are

tq%best

between"

True,

of this North

20

WINTER PARK, Fla.

formed Dec.

are

within the next
year, on the automobile

bound to grow."

are

earning

Mr.

the

sources

common

1950."

result

a

annual

a

on

been, better, they are
capable of considerable improve¬
ment.

will continue to
grow and expand.

is

on

assured."

the

today

underwriting Mr.

of

"Looking further ahead, I am
equally,; confident
that
Canada
Canada

.'

highly unfavorable underwriting experience

higher earnings that

Enough

plans of the
manufacturing, utilities and min¬
ing sectors of industry to support

For

certain

are

the down side with lower

recently selling at prices equivalent to 8y2

has

steady in post-war years
why Canada managed to

and

took

growth

As

reason

so

on

participated in the rapidly rising

prices of early

particularly for such basic prod¬
as oil,
petro-chemicals, iron
ore,
aluminum, uranium, nickel
and

be

this phase of the business.

on

there

likely that the next phase of

seems

past two years and "average prices still

demands,

ucts

between

United

not

-

world

indicated.

are

although

automobile bodily injury and
property damage risks written by
casualty companies in recent years, casualty insurance stocks have

rests

increasing share

and

and

underwriting cycle will

Because of the

and

enable
an

It

more

Geyer is optimistic about the prospects for
casualty stocks.

independent

conditions.

circumstances

As opposed to this somber outlook for fire

large extent the

a

S. M. Roth Co.

"While

the fire

profTts realized

true

say

these

offsetting considerations, it

by

On

Industrial
Detroit

Under

It

affected

be

hand, I think it is also

other

of

and

to

cautious attitude towards these

Mr. Geyer points out, there have
already been

as

number of rate reductions and

a

stimu¬

by

factories,
will

of

been

favorable external fac¬
by increased demands for
products of Canadian farms,

tors,

to

has

growtn

In fact,

years.

Howe, in his address stated:
"Our

a

This

that substantial reductions
may be imminent in fire premium rates.
Inasmuch as fire rates in
many important states are based
on the loss
experience over a period of five preceding
years, it
seems inevitable that a downward
adjustment will be made in
view of the very favorable
experience on these lines in recent

back

own

yard."

20:

Canada
have

the

a

session of therNational

Conference

stated

Minister

Commerce,

and

C.

As

stocks.

is
especially true in view of the historically high
prices at which many of the various shares are now
selling.
Mr. Geyer in
support of his contention points out that after
five years-of very
profitable underwriting there are indications

restrictions

world

made,. the view that total capital ex¬
however, of the rapid industriali¬ penditure
will
continue
at
a
zation trend in Canada, and pro¬
high level in Canada for several
tests
have
been
voiced
against years to come.
U.

profitable underwriting, warrants

determined, as I think
to play a full part in

are,
so

While these discrepancies within stocks of the fire
group
under different
circumstances, inspire an optimistic atti¬
tude towards certain shares, the
cyclical character of fire under¬
writing and the fact that fire insurance has had five
years of
would

You know

that .question

I-do.

that

export

further-its

industrial

own

agricultural products?

its

wealth

tries.

'

Second, I considered the role of
.fiscal policy. Most economists feel
that

ma¬

by the President's Mate¬
Policy
Commissioni^Gom-

points

Hon.

discussed

the

President

Canaaa,

and

Conclusions

"made in this paper.

I

raw

materials

raw

is

K

First,

the

goods both

Summary

;

of

Paley Report, entitled-"Re¬
of
Freedom,", a-report

circles.

be

starting deficit

a

important

sources

as

-expenditures, and, as I have just
I
indicated, I think it will be neces¬
rate of

in

Canadian

mitted to take place? I doubt that
of them will be feasible. It is

going

Canada's
source

a

terials for the United
States, the
Bank of Montreal, in its-current
"Business Review," surveys the

on

-all

'not

of

as

purposes
1.0

changes scheduled by present law.

Will

view

necessary

"

about

At the

volume of straight fire

Canada may
find it

.1

Total
-

4

'

chips" at recent market prices

2.85% yield basis and at

a

Another

The hint in these remarks that

expiring
(alcohol,

at histori¬

are now

earning power."

Excise Taxes—various tem,

are heavily favored
by institutional
shortage of supply these shares have risen

a

cally high prices.

place

legisla¬

new

tion.

Because of

much more than the
general insurance list and

present

take

one
group seem to be "overpriced or
fully valued" and the other group "fundamentally under¬

Concerning the "blue chip" insurance stocks, Mr. Geyer points

dependent
expenditure cuts

whether

pirations
or

to

mid-1953,

size

on

law

is

was

rate

developments

the

on

billion

theme of Mr. Geyef's remarks is that
among the
types of insurance stocks—fire and casualty—there is
divergence of operating trends which together with a difference

a

Finally, the budget outlook
briefly considered. A deficit
of

The central

two general

at

compound rates and is thus press¬
ing harder and harder against

•

1953

of last rate increase

•

,

Revenue Loss

(billions of dollars)
Fiscal Year
Full

"

/ "

•

disagreement with this fig¬

on

this

asset values.

menting

briefly:

;

,

spending

—

services

of

been

that

present law
to take place sometime
during the
fiscal year 1954. The staff of the

T

of

«

By WILLIAM J. McKAY

will
that
are

:

the

the- size

spending

goods

burden

times like

There has

Insurance Stocks

—

As usual, Mr. Geyer
presented an interesting and refreshing
point of view on insurance stocks. His remarks have been
printed
and distributed to clients of
Geyer & Co. and because of the fact
that it represents the
thinking of one of the leading investment
houses specializing in insurance
stocks, we comment on the dis¬

deficit-

budget accounts

'

.

taxation

theory

economic

expira¬

I do not know what
expenditure
cuts will be made, but trie

.

•

ex¬

business

The« real

Government

present

year

the

time.
'

.

and

about

the
an

they rise to 25%

income.

This Week

Mr. George Geyer of Geyer &
Co., 63 Wall Street, New York
gave a talk recently before the Bond Club of Buffalo entitled
"Insurance Stocks: The Present Practicalities."'

will be accruing at an annual
rate
of about $10 billion in
the admin¬

.

,

much

-

was

reach

when

By H. E. JOHNSON

.

reviewed

taxes

limit

Bank andlnsurance Stocks

scheduled.

now

a

to

Fourth,
was

while

summer,

any

.

'

•

I

national

"automatic

cycle, and therefore contribute to
economic stability.

be

when

starts

tions
.On

the

stabilizers"

taxes will be
coming in at an an¬
nual rate of about
$70 billion—
before allowing for

.

'

Fifth,
that

ure

though the
spending at
rate of
something like

government
.

bound

are

not.

or

Third,

its part of the
appropriation process.
It looks now as

.

.

in

but that will take time,
automat¬
Congressional machinery ically to provide desirable count¬

the

may

in

But

Budget whether

penditures

Budget,
and
<

changes

many

effects

to arise from the

period run¬
1953 through

June

to

cycle.

revives.

since economic

the

1954—the

from

business

spite of such difficulties sound
fiscal policyis highly desirable

of the last acts of the Truman
Ad¬

25

own

investment business in New York.

Exchanges,

nership.

on

Dec. 11, will
Jr., to part¬

Laird, Bisseil & Meeds
Members New York Stock Exchange

Members
120

New

York

Curb

Exchange

BROADWAY, NEW YORK 5, N. Y.
Telephone: BArclay 7-3500
Bell

Teletype—NY 1-1248-49

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

Specialists in Bank Stocks

26

The Commercial and Financial Chronicle

(2138)

—

or

are

we

dealing

with

future welfare of those people
do

with

us?

If

we

,

By JOHN DUTTON

—

CLIENTELE

stocks

wrong

which money wages would

rate at

Part 1)

Continued

from

page

10

Do

during periods of

during recessions?

Economists
the twenties when the

Back in

It

Wage Policies Since World War II

that one of my

happened

so

relatives was the president
of a company that was offering June, 1950. This was a period of and price movements. The first
stock to the public for the first
rising production and most of it generalization is that wages are
time in ifs history. This company was a
period of rising prices. Un¬ quite sensitive to prices and are
had only a fair record of earnings,
employment, however, was fairly pushed up quite promptly when¬
and although it was well thought
high — the monthly average was ever prices rise. This happened in
of locally, there seemed to be
3.7 million, or 6% of the civilian the second period from June, 1946
grave question upon the part of labor force.
Hourly earnings were to June, 1947, and in the sixth pe¬
the firm for whom I worked, as
rising even during the latter part riod from June 1950 to March,
to the value of the stock at the of 1949 when both the consumers' 1951—both periods in which prices
price it was being offered. Dewere increasing faster than wages.
price index and wholesale prices

(public was first introduced to the,distant

vagaries of stock and bond
there was a classic

many

investment,

.saying among securities salesmen,
of your clientele
is five years."
During the years

It went, "The life

break of

that followed the market

have

1929,

there

when

investors

periods

been

have

their

seen

-capital shrink substantially,

1937,

during

•&ls

again

or

such

during

spite the admittedly high price for

The ebb and flow

1949.

1946 and

were falling and, after prices be¬
this stock, the over-subscription
gan to advance, hourly earnings
depression and reces- was heavy, and the when-issued
increased faster than prices. In
;sion, and of growth in one indus- market soared substantially the
June, 1950, the rise of hourly
try and decadence
in another, day before the offering took place,
earnings above July, 1949, was
have taken their toll.
One of the my steady customers
3.5%; of the consumers' price in¬
During the years when security came to my desk and told me that dex
1.0%; and of the wholesale
prices have been rising and divi- he wanted a certain amount of
prices of non-farm and non-food
(lends havq been, increasing, se- that stock, and that he thought I
products 2.4%. The fact that in the
curity
salesmen
have
plodded should be able to secure it for recovery from the small recession
away,
gaining new clients and hl™- I tried to tell him something in
1949, hourly earnings led both
:
-e
ju.
-f
"
*
.adding to their circle of customers about the facts of life—the low the consumers'
price index and
•md friends.
The main problem yield—the high ratio of piuce^ to
wholesale prices is significant be¬
lias been evident only when bear earnings — the increased burden
cause
in the days before unions
that would be placed upon man¬
markets
have
eventually, taken
were
strong,
wage
movements
to earn the additional
their toll of investor confidence. agement
lagged behind most other price
This is the time when the hard dividends made necessary by this

forces,

economic

of

of

of

war,

of

.booms,

4-u~:

i

.

-

financing—and I even werjt so
far as
tell h1™ b
wbei?
asked my cousin about it, he told
%*)jer days no longer calls on the me that lle didn t tWnk I should
telephone but goes elsewhere to buy the stock. The man looked
place his orders
at me in amazement. He actually
work

of

several

is

years

often

washed away, and the good

friend
and steady customer of those hap-

This

situation

securities

has

plagued the

for

business

j

almost

S

as

?fLs5'**

long as we have known widespread participation by the publie

in

Very little has

been

done

by the securities industry to eradicate the vast area of investor mis-

understanding that still exists tothe

investing

the lines of sound

procedures, in

^east

vided the

to

the

*;

Another weakness in the

issues

public.

money

wages

periods of boom employers are de¬
terred from raising the prices of

price ad¬
unions to
insist on wage increases. The wage
increases could be permanent and
might cause trouble to employers
when several years later perhaps
the boom gives way to recession.
because such

their goods

would cause the

vances

Friedman

specifically argues that

1945 and 1949 the exist¬
of unions had the effect of

between
ence

prices and wages in
and steel indus¬
than they would other¬

making both

automobile

the

tries lower

ing (though at

a

slower rate) un¬

til the end of the year.

IIow did the rise of hourly earn¬

steel and

automobiles, the unions

with the rise in out¬ tended to hold down wages in
During the nine-month period put per manhour? In July, 1952, those industries.
A somewhat less extreme view
dis- of vigorous reaction to the Korean output per manhour in manufac¬
war, hourly earnings, consumers' turing was about 22% greater than of the effect of unions on wages
ings

compare

The General Appeal for Business

it

js certainly not going to help
the public in acquiring the neces-

the most promotional character

sold

of

fall

well

resistance' tributi0n o£ SeCUritieS has bee"

new

limit

during,
recessions. The effect is probably
not great, for the simple reason*
that there is little tendency to cut.
the wages on non-union workers;
during recessions. This is shown*
by the behavior of wages before
unions have become strong. Only
in
severe
depressions, and then
usually after some lag, were the
wages of non-union workers cut.
But
economists are divided in
their views concerning the effect
of unions on wages during periods
of boom. Some economists, such as
Professor Walter Morton of the
University of Wisconsin, and Pro¬
fessor
Milton
Friedman of the
University of Chicago, think that
unions retard the rise of wages in
periods of boom.15 The argument
of Morton and Friedman is that in
the

^

least .resistance.

flood of

a

recession is not severe

level of employment re¬

mains high.

Wrong Securities at the

were

the

and

.

to

advancing

generalization is that hourly earn¬
ings continue to rise slowly even
in the face of falling prices and
increasing
unemployment
pro¬

'

memory,

of

prices, hourly earnings rise faster
than prices. This happened in the
first period, the third, the fifth,
and the seventh period. The third

that we haye t0Q 0ften made a prices, and wholesale prices rose
general appeal for business. We rapidly, but wholesale prices of
:Wrong Time
have geared our advertising to the non-farm and non-food products
theme that stocks can be bought outran hourly earnings, and the
Only too often have we en- almost
by anyone, at any time, consumers' price index increased
couraged the purchase of highly an(j jn
any amounts. We are still slightly faster than hourly earn¬
-speculative securities at the top of
1950 and
doing this type of solicitation. It ings. Between June,
■a boom.
During 1945, of recent
1951, the prices of nonmay bring in some business but March,
The

generalization is that

periods

well

ho™

years-

public, along

ZT/tuTLT fhave.taken ,tke
This is rne line ot
mis is toe Hne of

most

This happened in the
fourth
period from September,
1948 until July, 1949, and in the
first part of the fifth period. The
fact that in only two of the seven
movements.
periods were prices rising faster
(6) The period from June, 1950 than hourly earnings, and that
to March, 1951. This was the nehourly earnings continued to rise
riod of the first vigorous reaction even in the face of
falling prices,
to the outbreak of fighting in Ko- indicates that the movement of
r e a.
Employment,
production, wages is influenced to an appre¬
prices, and wages all increased ciable extent by forces which are
rapidly. The index of non-farm more or less independent of prices.
and non-food wholesale prices (as
The fourth generalization is that

receivership that lasted for many

day. Instead of attempting to educate

rn

in

pretty

are

agreed that unions tend to

as the index of all wholesale
the
relationship between wages wise have been. Public opinion
prices) reached a peak in March, and prices is affected to a signifi¬ and the demands of the strong
ness
1
J
1951 and the index of industrial cant extent
by changes in the pro¬ union would have forced price in¬
production in the next month. portion of personal incomes spent creases to be matched by wage
finally got him 50 shares on the Thereafter, the index of industrial
rises, and the wage rises would,
orit.inal offering, and t e c mpa y production leveled off. The con¬ on consumers' goods. •
have been lasting. Thus by indi¬
even,tually went into a dism
IV
sumers' price index continued ris¬
rectly holding down the prices of

?or
^ve

corporate forms of invest-

ment.

rJiinJV
IfLr in fhl vLd
L
In
°c a?i

_m

The second

expansion?

they limit the fall of money

wages

Business"

and Downs of the Securities

"The Ups

1952

the body is going to be hurt. In other employees in manufacturing, fourwho lines of business the hurt can be fifths in railroading, four-fifths in
sell bad for the client, too—but in our construction, four-fifths in coal

rise

(Article 1

Thursday, December 4,

.

to the wrong business it can be even more than mining and four-fifths in metal
people — if we sell the wrong a mistake—it can be the end of mining, belong to trade unions.
stocks at the wrong time—or the the road for our client—and for The principal business of unions
right stocks at the wrong time— us, as far as any future business is to get more money for their
members. Are they able to do so?
if we do not do a complete in- relationship is concerned,
Do they have any effect upon the
vestment job for our clients, some(Continued Next Week)
the

iSecurities Salesman's Corner
BUILDING AN INVESTMENT

business

.

Many

farm and

in January,

ings

sof

1946, but hourly earn¬

factory

workers

were
64.1% higher. In 1950, output per
manhour in all non-farm private

non-food products rose

15.9%, the consumers' price index

industry was 10% greater than in
1946, but average hourly earnings
of non-agricultural private work¬
ers in 1950 were
34.2% higher.14
is

earnings
manufac¬
turing and in industry as a whole

It

plain

that

hourly

have been rising both in

of boom is taken
Albert Rees of the
Chicago, who has
studied collective bargaining in
the steel industry and who has
concluded that between 1945 and
1948 and in 1950 collective bar¬
gaining did not significantly raise
wages in the steel industry.16 Pro¬
fessor Rees argues that the de¬
mand for steel and for steel labor
was
so strong between
1945 and
1948 and in 1950 that unorganized
workers would have been given
during periods

by Professor
University of

.

JLXAVAX
understanding which they 8.4%, and hourly earnings 6.2%.
tiiCj
more than three times
as fast as
eventually have, if they are
(7) The period March, 1951 to
successful
investors July, 1952. I conclude this period productivity. Even in the period
1944 to build up a new circle of
of a mild recession in prices and
over the longer term of a lifetime.
with July, 1952 because it is the
investor
clients,
only
to
turn
As an illustration, I heard the last month for which comprehen¬ of a rise of unemployment be¬ substantially the same wage in¬
around and
trade them out of
tween September, 1948 and July, creases as were won by the steel
following radio announcement sive wage data are available. The
more
conservative
investments, which concluded a broadcast of period of March, 1951 to July, 1952 1949, hourly earnings were rising workers' union. Professor Rees
and replace these securities with
the closing stock exchange quota- was a time of stability at a high at the rate of over 3.5% a year, concedes that the pensions won by
speculative promotions. The heavy tions
which is higher than any of the the employees in the fall of 1949,
by a brokerage firm just a level of employment and produc¬
demand which was created by the
few weeks ago. It went something tion. The index of industrial pro¬ estimates on long-run increases in when there was a short slump in
-excitement generated at that
the demand for steel, would not
time, like this: "Can you invest one duction showed
virtually no productivity.
caused people who
been
gained without the
thought they thousand dollars in stock? If
In the two years following June, have
you change (except for several months
were investors to
union.
forget all about have even as small an amount as when it was
brought down by 1950, the productivity of the pri¬
such things, and run after
There is no way of disproving
quick a few hundred dollars you can strikes), the large inventories ac¬ vate part of the economy seems
profits in the "new issue" market,
invest in American Industry. One cumulated during the speculative to have increased with unusual the arguments of Morton, Fried¬
Investment firms that had never
to
steei corporation has over 250,000 rush
buy in the first nine rapidity—perhaps by as much as man, or Rees because all of these
been prominent in the underwritstockholders, a large telephone months of the Korean war were 5% per manhour per year. Part of arguments are based upon suppo¬
mg field created new stock issues
sitions
concerning
what would
liquidated, and wholesale the apparent increase, however,
company has over a million share- being
and had no difficulty whatsoever
have happened if strong unions
holders, many of them own less prices were slowly drifting down¬ may be an illusion—the result of
in
did not exist.
Nevertheless, I do
selling them almost immedi- than five shares
apiece. Come in ward. The proportion of personal changes in the kinds of goods pro¬
.rtely. Great speculative enthusinot find their arguments persua¬
and see one of our courteous ac- income after taxes spent on con¬ duced and perhaps of a drop in the
asm ran all
sive. Fear that unions will use any
through the investing count executives and he will
sumers' goods, however, was slow¬ quality of some goods.
But even
gladcommunity— brokers, customer's
price increases made by employ¬
jy discuss your investment prob- ly rising and so was the consum¬ if the rise in output per manhour
xnen.
underwriters, unlisted deal- iems with
ers' price index, and hourly earn¬ has been as much as 5% a year, it ers as a basis for demanding wage
you.
Six percent, or
crs and the customers
themselves, better, can be obtained when you ings were rising faster than living has been less than the rise in advances will undoubtedly some¬
all had the fever.
costs.
In July, 1952, the whole¬ hourly earnings, which increased times deter employers from rais¬
Everyone was invest in
many
of the leading
seeking something for nothing—sale price index of non-farm and between June, 1950 and July, 1952 ing prices, but I do not think that
corporation shares that are listed
this effect indicates the predomi¬
over-subscription was the test of
non-food products was 4.1% belowT at the rate of about 6% a year.

sary

v

VV

^

salesmen

worked
wuxivea
years

during the

diligent.lv
ail
diligently all
of 1942 through

the

intrinsic merit of

~~-a

must

to

become

the

on

value—not
'the

Historically, the public buys the
less

conservative

xnent

security

boom.

type of invest-

at

Instead

the

of

top

of

looking

a

for

jsafety and building

but

most

..

the

man

who

came

to

desk back in 1929 before the
\

►

.

.

^




^

my

crashr
^

v

York

Stock

Ex-

March, 1951, but the consumers'
price index was 3.4% above 1951,
How have unions affected the
and hourly earnings were 5.6%
to whether or not
this
is
the
above. By July, 1952, hourly earn¬ movement of money wages? Some¬
proper way to start people along
what more than 14 million work¬
the road of investing in securities. ings had slightly more than re¬
covered the purchasing power of ers in the United States are or¬
a man's money is his most imJune, 1950, since the rise in hour¬ ganized. Almost two-thirds of the
portant asset next to his health.
ly earnings from June, 1950 was
This

up reserves,
they almost compel the investment
fn
-salesman to sell them speculative
stocks. They are often
very much
xt
like

New

change."

business,

security itself.

nn

it

is

bring in some
a

question

he thinks

.

more

as

about

12.7% and of the consumers' price

o

index 12.1%.

than be idoes about hls health-

Money
we
r

cases

may

is

his

nerve

center.

Four

Are
:

selling potatoes and cabbages from

this

generalizations
examination

14 The

productivity estimate is from
unpublished paper of John W. Ken"National
Productivity
and
Its
Long Run Projection."
The figures on
hourly earnings for 1946 and 1950 are
monthly averages * for the years.
the

nant effect of unions on wages or

that

of

wage

fear

companies

why the
the steel
raise prices

explains

did

not

high enough in 1947 or the

early

Unionism
and
Inflation," American Economic Re¬
view, March, 1950, Vol. XL, pp. 18-19,
and
Friedman, Milton, in "The Impact
15 Morton,

of

the

in

the

nomic.
pp.

Walter,

"Trade

Labor Union," pp. 228-229.

16 Rees,

drick

emerge

this

automobile companies or

"Wage Determination
Industry," American Eco¬

Albert,

Steel

Review,*, June,

389-404.

1951,' -Vol.- -XLI^.
~

.

.

*

Volume 176
\

Number 5174

The Commercial and Financial Chronicle

.-.

.

(2139)

•

27

'

part of 1948 to equate supply and
-demand. It was not the effect of

higher prices

•

the
-

and-

steel

as

conjecture, are not
isfactory, but they are a

com-

the

the steel com¬
used
wage
increases
to
to justify price increases.

panies
or

ferent

extent, collective bargain¬
ing helped employers raise their

in

in

one

,

been

1950
of

caused

was

18.5%

than

from the union.

increase

the

of

15,

by
1946,

package of July,
in the main attributable

view

among

men, and public officials still

that the

ployment.

It

is

States

true

that

Steel

the

Corporation

There

less; than

supplies

not

are

contrary,

(

they

There
less

men

two

are

make money
moment

is

than

1951.

Furthermore, the

the,, well-organized

in

gen¬

The

even

other is

earnings

1950, getting

month

in

union

good increase

a

advance

of

the

-

would

reopen¬

would

age in

a

21-cent

and

workers who

.

are

or

''60%

-

fj

union

Number of

to

.

.

f

nweighted

This
not

63.1

kind

of

comparison'*; does

necessarily

reveal

the

*

unions

most

prices.
creaseg

do not do

of unions on wages might be
great that'non-union employers
would raise their* wage rates
quite
promptly whenver unions negotiencc

*

in

for

Wage

increases

in

increases

their

help
price inmay

concerns

mak.e
acceptable to the

the

combination

public.
,

of

,

trade

unions and oligopolies is more
inflationary than would be oligopolies
without
trade
unions.
Finally, the willingness of employers to raise wages is affected

,

by the;; anti-trust policy
country. A few

long-run effect is to raise

and''wages.-That

pend
are

whether

upon

will* de-; prisesr might

wagqs

of the
large enter-

very

prefer

to

reduce

prices and attempt to gain a largcr share of the markets, but are

th&t

price/

high irelative -ltd

duce

*

so

.

Hence

.

.

de-

of

excuses

J-

'.ft:-i-''r-

ex-

strongly

that the

so

pro-

predominance of inflation-* afraid to do this lest they be

a

ac-

ary effects ,-oria predominance of
cqsed of attempting to become
event, deflationary ones^ Let us assume monopolies. In other words, the
rapidly in the (as I-think, we may) that in the*fear
of
beinS - prosecuted
for
non-union firms as in .the union i short-rurinhe
iWrtUme of employ--attempting Jo become monopolies
plants. And yet unions would be ment within a plant is not
highly causes
them to
behave
like
exerting great influence on wages. ^sensitive to changes in wage
rates, monopolies. If the savings from
On the other hand,' the fact that i so that advances
in wages also in- - technological
progress
are
not
wages rose much more rapidly becrease
payrolls. - Whether
the passed on in the form of lower
tween
January, 1946, and July, effect of higher wages is defla- prices, it becomes harder not to
1952, in the 19 well-organized in- tionary or
inflationary will de- Pass them on in the form of high-

ated wage advances. In that

might rise

wages

*

oppose

of

atiye to prices, it does not follow

effect

wages.'The influ- rprices

upon

powerful

expanding demand because, under those conditions, the
enterprises are looking for good

?

:

58J

-J-

'

of unions

and

to

times

a

wage

might be
the wage

avge. inc.

67.1 ;
'

v

that

mean,

the government,

which

and successfully,

hourly earnings

8.7

;-*#•':?£:

the

by

profits,

mands

increase

66.1 %

P—

weakened

taxes

large

of

enterprises,

Jan. ma to July i»53

more.j

40% to 60%^__jI±____-_.
Less than

.

is

pected
of the

in

Industries

these

employers to

corporate

on

on

these

members

80%

demands
taxes

of

Some

when

ganized
industries
and
much
higher in the well-organjze.d ones:

pack-

resistance

increase falls

of

1952 shows that the percentage increase was least in the
poorly or-

July, 1952.

'

•

rise

to

even

The

'

as

*

-

«

dustries than in the 10 poorly

..ganized:.ones .is
that unions had

strong

some

or-

influence

pend

*

upon

er wages, particularly if the enterprise is making conspicuously
large profits,

expenditures
-

on

set

are completely offonly
partly
offset
by
in
non-payroll
expen-

or

'

money wages.
>

whether higher payroll

'

evidence

changes

Throughout about two-thirds of

ditures

overhead,' repairs, im-*
•
the 78 months between January,
-provements, product development,£his^ survey indicates that the
1946, and July, 1952, hourly earn- expansion. If business -/expecta- wage-fixing arrangements in the
ings were rising faster than the tions are pessimistic, managements American
labor
market
are
consumers' price index or the in¬
will take vigorous steps to limit strongly resistant to deflationary
—

,

Jf

.

„

-

-

dex
-

the

of

non-farm

-And

for

wholesale

and

two

non-food

periods,

prices

of The tendency for higher wages to

produc^.

increase the size of payrolls. Fur-

of nine

movement

demand

inflationary

for

of

goods.

bias

in

our

the

period September, 1948 to
July,
1949
and
in
the
period
March, 1951 to July, 1952. It seems
to take a fairly high rate of un¬
employment to
prevent hourly
earnings
output

from

influences and are highly sensi-^ve to inflationary influences —

rising

faster than

manhour

per

in

—

other

words, to prevent labor costs from
rising. In the long-run the price
level

must

costs.

adjust

Hence

if

itself to

hourly

labor

earnings

have this strong tendency to rise
faster than productivity, a long-

advance

run

in

the

price

level

the last few years there
have de¬

veloped

taxe rates

considerable
incomes
ment.

The

the

out

be corrected?

economy

Undoubtedly it

be corrected,

can
some

of methods

use

of

govern-

private pension

that

it

on

influence.

private

large

These strong

debt

has

annual

are

a

re¬

powerful

in

the

price

in

run

deflationary influ¬

will not prevent

ences

the

level

rangements
in

vance

that

wage

produce

labor

the

the

long
infla¬

setting
slow

a

costs.

however, give the

slow rise

a

over

event

tionary bias in

ar¬

ad¬

They will,

economy pretty

good protection against a
runaway
rise in prices. At the same

time,

the economy in the last
decade
so
has acquired some

or

important

protections against deflation. The
new
checks on inflation and on
deflation

mean

has gained

that

the

need to have

we

we

economy

substantially in stabil¬

But it is not nearly
may

have

stable

so

it, and I think

more

safeguards

against inflation than against de¬
flation. The course for us to
pur¬

I

sue,

think, is the

have been

against

unacceptable to business men,
the public or both.

the

a

in

deflationary influence.

that may

be

rise

any

deflationary

stantly

or

that

assure

to

go

The high

these influ¬

of

many

so

payments

with¬

cost

they

part

volume

become

as

but not without

The

of

one

will

another

that

American

and powerful

new

plans, with their income greatly
exceeding their disbursements, are

VIII

wage-setting arrangements in the

are

because

ences

ity.

Can the inflationary bias in the

several

deflationary influences.

quite probable.

becomes

one

that

following—namely

adding
both

new

inflation

defenses,

and

tion and
perfecting the
we
have.
In that
way

we

con¬

defla-%

ones

that

shall

we

unity among business gradually build more and more
concerns
in
dealing with trade stability into our economy and as¬
unions, particularly' more organi¬ sure that the long-run trend of
zation among
employers, would prices, whether it be upward or
Greater

inflationary bias. downward, will be free from vio¬
signs that employers are lent short-run swings and will not
be
accompanied by pronounced
slowly developing the will to pre¬
in physical
sent a united front. The railroads, fluctuations
produce
tion.
experiencing whipsawing tactics
in the strike, against five selected
the

weaken

There

are

roads

on

and

other

the diesel issue in 1950,
strike against several

the

in

in

roads

the

Happy Birthday to

of

summer

Jack E. Jones

1950, are slowly learning to stand
together.
The
steel
companies,
after

their

failure

to

maintain

SEATTLE, Wash. —Jack

a

E.

Jones, Resident Manager for Wal1949, are
ston, Hoffman & Goodwin, was
doing better. But progress in the
honored at a birthday luncheon
direction cf organization and soli¬
by the Seattle
darity among employers is slow, Bond
Club on
and many employers do not. be¬
Nov. 26.
Mr.
lieve in organization or solidarity.
Jones
was
These opponents of solidarity may
born Nov. 26,
be
right.
Regional or industry¬
1906 at Port¬
wide bargaining in our largest in¬
land, Ore. He
dustries may unduly institutional¬
was graduated
ize industrial relations and impede
from the Uni¬
the development of good under¬
versity of Or¬
standing between each manage¬
united front in the fall of

ment

the

and

prise. It

may

in

men

the

enter¬

be better to accept

egon

of

Class

1929.

In

1930

he became

as¬

inflationary
bias in
our
sociated
with
wage-setting arrangements than
Hartley Rog¬
to introduce obstacles to a good
ers & Co. and
understanding in each plant.
was President
Jack E. Jones
The inflationary bias could be
of the Seattle
reduced
by the development of
company from 1946 to 1950 whetJ
stronger federations of labor in
he joined
Walston, Hoffman I
this country, capable of working
Goodwin.
out a national wage policy for the
Mr. Jones and his wife, Dorothymember unions and able to per¬
are
the proud parents of Steph¬
suade the member unions to ac¬
cept a national wage policy. The anie, aged 15 years, and twins
some

.

tradition

of

American

yjj

-

.

in

or

iarge part of the cost of any

hourly

ahead

strike,

a

result

because

ones.

falling.

are

Proportion of production

*

rise

by

-

wage

hourly earnings in 46 industries
between January, 1946,-and
July

steel companies
been offering unor¬

workers

tepa,.to

that

Chrysler

regional bargaining
might be governintervention
in
disputes,

the

stiff

in

one

the

have

ganized
'

No

fact

An examination

argue that under these cir-

cumstances,

.

a

the

the

ment.

industries

ing date of the contract.

;

or

the fact that

organized

set-

was

ment
Most employers prefer the whipsawing by unions, made inevitable
by present bargaining methods, to
the intervention by the govern-

at any given

wages

while

were shut down

bargaining
and

rapidly in

prices

'

more

a

only are most employers
organized for dealing with
unions, but they do not wish to be
organized. Organization on their
part would mean industry-wide

higher than they other--;

poorly

prices

-

of

present

not

get, cannot

bits

not

Not

strong
than Uh-

the

of

-

plants

on

very

more

would be. One

wise

26-cent

had done well in the
closing days

•

settl^inent

high. In
explain the

would

do

and

in
the
automobile
industry in
May, 1948 by making a generous

ago.

—

fact

tied on terms accepted by the
Bethlehem
Steel
Corporation;
General Motors fixed the terms

general evidence that unions

J

;

low

the

the

the

prices of non-farm and non-food
products are falling — as we saw

employers

The steel strike of 1949

are

one

win far

can

*-

4

year

wages seem to rise less

in

'

*

a

is

of

rising
principal

The

output per manhour. This
happens
even
when
wholesale

do

united front toward trade unions,
The coal industry is an example,

months

some

prices

time.

among

organized

no

cent packages were not
being
erally negotiated in 1952 or

i

*

is

de¬

the

proba¬

be

Perhaps the most imporabout employers is that
most industries they are not

in

do

package ' recommended
by
the
Wage Stabilization Board. But 21-

-

J

I

management

of

inflation,

the

will

affect

tant

unions, not so strong, still
considerably more than unorganized men would get?

desperately

*

have.

of

wages?

the

other

21-cent package of 1952 was won
only after a prolonged strike in
which the union was

the

avoid

prices

But

How

win

around the corner, such an in¬
crease
would not have been of¬
fered to unorganized workers. The

gain

tim£.

industry> for

union

was

to

this

organized

1946, when there was still
widespread belief that deflation

-attempting

they

ers' union? And if

ruary,

-

L.

short, how can one
large increase except by attributing it to the Strength of the min-

-

-

that

been

Coal

this

*

the

the

had offered the union 15
cents, but
offer itself was a tribute to
the strength of the union. In Feb-

'

at

have

was

and

'

United

in

would be followed by
substantial
unem¬

war

deflation

industry, I cannot

men

economists, business

1

John

shortage of miner#' labor—in fact,
many
mines *ar£
working part
time, and weekly hours of labor

strength of the union. The
large increase of February, 1946
was given when the
predominant

"

Mr.

I

have been offered to unorganized

21-cent

are

that

prove

Although

believe, for example, that the
increase of <$1.90 a day,
recently
agreed to by the operators, would

But the

Feb.

sense.

that

most

chronic

increase

other things, upon wage-fixing
arrangements means
conditions,
wage
in-, that hourly earnings move within
creases are likely to be inflationa considerable
range more or less
ary in good times and deflationindependently of prices. Hourly
ary in bad times,
earnings, as we have seen, have
a
strong tendency to rise faster
VI
than

rig-

common

bility

have

business

not

to the

"

of

does

it

determinant

pend,

or

strong unions?
realm

of

to

but

expectations

the

proof and compelled to rely

conclusion

*

1952,

of

outside the

previous

bound

spending by drawing on
idle
balances, liquidating securities, or by borrowing. Since the

—

absence of unions

absence

are

coal

by the fear

more

stabilization

wage

pressure

and

make

rate

Lewis and the United Mine Workers have influenced
wages in the

the
same
as
might
given to unorganized
workers, and that the increase of

have

the

cannot

about

; were
,

issue

upon

1948, in the steel industry

willing to maintain the

result of

basic

unions

non-payroll expenditures
as
payrolls increase. It will be more

very sat-

orous

One may concede that the wage
increase in 1947, and perhaps the

.

the

We

the

do

been in

prices.

of

in

con-

based

of wages
substantially diffrom what it would have

course

To that

.

nature

namely,

in 1946 and 1950,

gain

-

upon

upon

panies feared, but the effect upon
public opinion.
To some extent,

-

replies, based

jecture, to arguments also

the unions that

upon

automobile

These

individualism
trade

unions

among

is

strong, however, and rivalries
so

keen

that

there

is

so

Priscilla
Mr.

are

early
prospect that a strong federation
or
strong federations will be de¬
veloped.
no

The inflationary bias in wagesetting airangements could be off¬

and

Jonathan,

8

years

old.

Ranier

Jones

is

a

member

of

the

Club, Seattle Tennis Club,

and College Club.
ter

of

the

(F.

&

He is Past Mas¬

A.

Arcadia

Lodge No. 87
M.), is a Scottish Rite
32nd degree Mason and a Noble
of

Seattle's

"Nile

Tempi e.'f

in sbort> that the wage-fixing ar- set by strongly restrictive credit (A.A.O.N.M.S.). His chief hobby r
months (September, 1948 to July,
preserve the liquidity of the enrangements have an inflationary and fiscal policies. In order to fishing — from fly fishing to salt
1949)
and
one
of
15
months
water.
terprise by limiting non-payroll bias. On the sellers' side of the
prevent hourly earnings from ris¬
(March, 1951 to July, 1952) hourly expenditures
living off inven- market
are
powerful
unions
ing faster than output per manearnings were rising while whole¬ tories, cutting repairs and main- spurred by; more or less mterNow Gordon Stuart Corp.
hour an
appreciable amount of
sale prices were dropping. In the tenance, and
postponing improve- union rivalry. On the other side, unemployment would have to be
one

-

thermore,

they

will

try

hard

to

*

'

*

—

j

first

-

period the consumers' price

index

was

markets

also

dropping.

would

one

ments

In free

expect

deed,

outlook

some

lag of wage movements behind
changes in the demand for the
products

labor.

of

The

fact

'

that

-

hourly
earnings
moved
before
prices, and in some cases opposite
to prices, indicates powerful in¬

"

'

fluences

on

the

'

market
.*

—

in

supply side of the

other

it

words,

Everr

'.if

unions' make

money

'

wages at any

for

wages

make

the

the

profits too dark,
the ' concern
may
be unable to
raise outside capital. On the other
hand, if expectations are optimistic, managements will be less in-

'

clined
as
-

in-

dicates the influence of unions.-

and extension of plant. In-

if higher

:

a

to

curtail

result

of

the

labor

force

higher wages, and

payrolls will rise almost in proportion to the wage increase. Furthermore, a management that is

^optimistic about the future will be

given time high rel- vless inclined to make drastic cuts




are unorganized employers who
are usually opposed to organiza-

maintained

PHILADELPHIA, Pa.—The in

—

probably 3 million

vestment

business formerly con
by K. S. Sweet, Western
probably be un¬ Saving Fund
Building, will hence¬
s^st wage demands is weakened acceptable to the community — at forth be
known as Gordon-Stuan
by the nature of tax laws and by least for very long periods.
Corp.
other considerations. Under these
Although the wage-fixing ar¬
circumstances there is a strong
rangements of our economy have
Now Metcalf & Thompson
tendency for wage patterns to be an
inflationary bias, they are only
set by the particular employer or one of many conditions and ar¬
SEATTLE, Wash.—The invest¬
group of employers who are most rangements that affect the be¬ ment business formerly conducted
willing to grant concessions.
havior of the economy.
by Terry Thompson, as a sole pro¬
Some of
The inflationary bias in our these conditions and arrangements prietorship, is now known a-» Met¬
wage-fixing
arrangements
does tend to produce inflation; others calf & Thompson. Offices are in
not
mean
that
the
country is tend to produce deflation. Within the Dexter Horton Building.

-tion and whose willingness to

,

re-

or

ful

4 million.

and

This would be waste¬

it would

ducted

2S

The Commercial and Financial Chronicle

(2140)

such

heavy

as

and rails and
such

Steel's Future—A Producer's
Point oi View
prevent the emergence of ir¬
of living. Undoubtedly, they responsible, shoe string competi¬

tion and the advance in our stand¬
ards

increased

in

trends

x-eflect

con¬

sumption of steel that none of us
expect to see reversed. The tempo

change,

-

xnay

direction

the

but

will not.

period

a

the

bear about

St

bas

years,

as

GNP

to

in

out

worked

that

way

a

generally.

should be welcomed
It is

relationship

same

and
production index. If that
it should, our expansion

the FRB

bolds,

of

historically

has

probably correct to assume
added

that the steel industry has

You

semi-finished items

blooms, billets and slabs.

as

Only 28% was in light products.
By the end of 1951, these per¬
centages were very nearly re¬
versed, with heavy products ac¬
counting for only 38% of ship¬
ments.
The
preponderant
re¬
mainder consisted of sheets and
strip, tin mill products, wire, pipe,
structural shapes and the
like.
This rather profound shift
light

Good

Short-Term Outlook

now raise the ques¬
whether we can keep

may

in our product mix, I think you
will agree, is a factor making for
capacity busy in the fu¬
greater stability should there be
ture. I dare say a number of you
some rough going ahead.
We are
have felt from time to time since
no
longer
unbalanced
on
the
the
end of World War II that
heavy side and with spending for
after another six to eight months
national defense going on at the
of good business we might be in
rate of some $50 billion a year,
for a fairly serious readjustment.
only a very small percentage of
As of right now, volume prospects
Bethlehem's
output today
goes
for most of our products—and I'm
directly into arms. We have left
speaking for Bethlehem—look en¬ the "war baby" phase of our
couraging as far ahead as we can
growth far behind us.
see_which is at least six months.
So
much
for
considerations
tion

it
the

without

done

have

would

than

recently

capacity

more

tion.

to

as

this

then,
we see no reason why the overall
trend in steel production shouldn't
Over

to

heavy items
structural shapes

the category of

into

Continued from page 9

new

Admittedly,

of

fect

of

rapid amortiza¬

appraisal

your

and

emergency

war

assistance

stocks.
Let

illustrate—if

me

common

share

could

we

one

for each share

share of
out¬

now

standing, we would receive about
$480 million. It is generally con¬
sidered in the industry
that it
now costs
about $250 per ton to
integrated steel

new

capac¬

ity. Accordingly, the $480 million
resulting from a 50% stock dilu¬
tion would

finance

the

construc¬

tion of and

provide working capi¬
tal for new integrated plants with
© capacity of only about 10%
of
©ur projected capacity of 18 mil¬
lion tons.
Stock Market Appraisal
Put it another way. At the end
©f 1951, the market appraised the
total value of Bethlehem at about

$839 million. That is, the market
value of

our

ferred and

working

long-term debt, pre¬

common

capital

stock. Our net

about

$464
million. Accordingly, after allow¬
ing for other minor adjustments,
was

the value which the market then

placed

on

our

properties

was

ap¬

proximately $405 million.
Divide that by our present ingot

capacity of 16.8 million tons and
$24 per ton as the value

you get

put

believe I

I

upon

our

properties

by the

market.

Now, under such circumstances,
you could hardly expect us to sell

are

we

in

strong

a

Materials

Raw

state with con¬

can

that

fidence

sell at $50 per

build

variables

ables. But,

steel

of

When it

comes

to

Plentiful
raw

materials

position to protect the welfare of this is one area in which I can
company against what might give a categorical assurance.
For
be likely to come.
a
period of time that none of us
our

The servicing of our

dividend

the

bonds and

preferred
secure
beyond
our

on

be

should

stock

reasonable doubt, and I think

any

that

shareholders

common

have

in

this

we

need

room

anticipate

not

do

worry
any

about
short¬

of the major basic raw ma¬

ages

terials

going into the steel mak¬
process—iron ore, coal and.

ing

the limestone. Our known reserves
long-term outlook, whatever de¬ of the three basic ingredients are
gree of uncertainty may attach to good enough to carry us as far
the intermediate period. We feel ahead as it is practical now to look.
this way for several good reasons. It's the familiar story with reserves.
To begin with, we have put a The more we take out, the more
lot of good financial meat on our we are
finding and developing
bones since the dark days of the in the way of new reserves.
But
'Thirties. May I suggest that you that's only part of the story.
At
compare
funded debt and fixed least equal interest attaches to
charges with sales, working capi¬ progress that has been made in
tal and cash at the end of 1929 improving quality before the ma¬
and

me

of

sales

our

dollars

full

At

produces

capacity,

Bethlehem

each

dollar of

acter

As

fixed

$31

were

its output.

of

quirement of some 20 million tons
of iron ore annually, about half

have grown
preconcieved plan comes from the Great Lakes re¬
reflected a
which has taken us through an gion. The rest comes from various
©n our entire investment in order
evolution always pointed toward foreign sources—Venezuela, Chile,
to raise funds to construct new
greater diversity of product. Sweden, Africa and Canada—and
plants costing $250 per ton.
When Bethlehem started out it from our own mines in Pennsyl¬
common

stock

at

price which
value of $24 per ton

Moreover,

a

there

is

a

limit

to

the amount of debt which prudent

management wants to
©rder

boom

to

finance

assume

expansion

to

a

company, we

definite,

primarily a
manufacturer vania.
war materials, of guns, armor
Particular

was

of

in

plate,

in

cellaneous ordnance items.

times,

particularly when
the necessity of- mak¬

faced with

a

heavy

forgings

and

mis¬

from this close identification with

ing large expenditures for im¬
proving our basic raw materials

ordnance

situation.

the wide-flange structural I beam.
It is probably not too much to

fairness

should

We
to

also

our

feel

that

stockholders

expect to pay

some

in
we

divi¬

dends.

at

came
our

with the develop¬

Bethlehem

say that the profile
is in large part an

our

interest

iron

new

attaches

plant of

of Manhattan
outgrowth of

are

familiar with

our

to

develop¬

mining

ments both here and abroad.

Our first significant move away

ment

sight.

in

the

would

the

of

mighty

a

The happier ending,

one.

lies in

techniques
of beneficiating and agglomerat¬
ing low-grade ores economically.
Bethlehem has been a pioneer in
the
development of the use of
course,

taconite

new

and

ores

happy

are

we

about the way it is working out.

In
of

thinking

about

the

process

I
believe
people have a tendency
to stress the cost of the operation
beneficiating low grade

without

tages

ores

balancing off the advan¬
accrue ' to
offset

which

these

costs.

It

is

capital

that

investment
it

But

substantial

a

will

be

re¬

should

also

be

You

pioneering

Lakes

average

such

circumstances,

that

ore

in

a

a

price

equivalent to several times book
value

instead

of

less

development.

Concentrated

will

ores

Another

effect

of the

ture necessary to construct

years

we

60% iron.

over

still had,

The

result

iron

is

a

efficient

more

operation.
With
higher furnace efficiency comes a
reduction in operating costs which
making

than cancels out the higher

more

cost of

preparation.

ore

We have

the technology of improving low-

grade

Bethlehem's

taconite
deal

reserves

with

satisfaction.

of

tents

That is why
share
of

in hand.

ores

view

we

a

the

ments

last

in

can't,

I

paint

steel,

competes

a

the

on

but

more

it

ver¬

-

in

dealing

picture that
glamor front

with what is happening in atomic

synthetic

energy
or
With us it

is

materials..

story

of steady
producing steels to>
higher and higher specifica¬
tions; steels that will roll with
higher
yields
from
ingot
to
finished product at less recondi¬
a

in

progress
meet

tioning cost; steels that will
things cheaply and well.

do

more

We

are penetrating deeper into
physical chemistry of steel

the
and

have

we

the

to

by no
the

of

end

means

come

road

on

new

We

are

con¬

of production.

tinually searching for new meth¬
ods.
Progress on the technical
front is

essential

to

preserve

and

purposes

unlimited

we

in¬

all

have

an

supply of the stuff and

know how to handle it.

we

Coal
better
in

is

also

improved through

preparation.

mine

labor

As

costs

increases

have

forced

our

the
to

This has forced

us

spend money on equipment

to

pit head.

wash coal before it is
coke

shipped for
making
operation.
That
money,
but cleaner coal
off in greater fuel efficiency

-

costs

in

the
In

blast

our

furnace.

company,

we

def¬

are

initely of the opinion that better
selection

and

terials before
nace

goes

a

preparation of

ma¬

they get to the fur¬
long way towards

offsetting increases in the cost of
steel-making.

with better

Along

also

re¬

improvements
the steel-making process itself.

port
in

preparation
can

The

progress

trend

to

on

bigger

and

bigger

blast furnaces is

making for lower
producing pig iron. Two

costs in

furnaces

•new

at

our

under

Bethlehem

construction

Plant, for

ex¬

ample, will each be capable of
turning out 54,000 tons of pig
iron every month. As illustrative
of one economy,
and not even
the principal one, no more men
are

required to operate these than
needed
for
the
old-style

were

Now

grade

as

you

ores

of

all know, the high
the Lakes region

two

terms

decades

of.

has

tonnage

in¬

fell

place
The

of
new

secure

making

for

future.

In

believe

case

I

expansion should give
for
satisfaction
rather

concern

the long-term
difficulties that

over

—in spite of any

might

be

encountered

intermediate

some

long-term

our

ground
than

better

a

Bethlehem's

during

period.

Wars and depressions have up¬
set

timing on occasion, but
growth
through
expansion

our

our

modernization
of
existing
facilities, mainly financed from
within, and the strengthening of
and

materials position, has
stopped. Incidentally, there
one
aspect of our expansion

our

raw

never

which is not

That is

generally recognized.
a significant part of

that

increased capacity is an out¬

our

growth

expenditures designed

of

primarily

to
effect
example,, when

For

bigger

furnaces

efficient

and

ones,

line

better

refractories, in¬
capacity may be looked
a by-product of a more

creased
upon

to

smaller

them with

economies.
build
replace less
you

as

economical

efficient

and

of

way

operating.

because

Partly
together

with

the

has

of this, taken
fact that our

by

been

of

way

rounding

Improved

of raw materials we

a

position and tech¬
advances
as
factors

expansion

Steel-Making

Cut Costs

materials

nological

is

increasing mechanization of min¬
ing, dirtier coal will turn up at

Plants

Modern

Now I have mentioned

great

a

To

will be

and still continues to make.

and

in

with

raw

quantities

producer-gas and oil.
fuels generate higher

temperatures which allow greater

out, strengthening and
to existing facilities ra¬

adding

tionally conceived to begin with,,
our
expansion has cost us much
less

than

had
ties

would

it

have

cost

us

built entirely new facili¬
the same
capacity and

we

of

sound position to
existing
markets.
Competition is the essence of our
free
enterprise system and we
leaves

in

us

compete

a

in

believe in it.

Now what

have

I

been

saying

to now about the general pic¬
might add up as follows:

up

ture

(1)

As far

as we can see

good

ahead

hold

should

business

our

at

We don't expect to operate

(2)

always

in

a

sellers'

market

don't think the business

we

has

We

we

know,

have what

and
cycle

from

eliminated

been

economy.

that

a

volume.

our

however,

it takes—fi¬

nancially and otherwise—to ride
through any downturn in busi¬
ness

which

the

intermediate

fu¬

ture might

hold in store.
(3) We are confident that over
the
long-term,
steel will con¬
tinue

to

be

the

backbone

of

an

expanding and prosperous United
States

and
that
companies
share in that prosperity.
economy

managed

steel

Effect of Recession

on

well
will

Steel

Industry
But

all

answered

of

this may leave un¬
is probably your

what

output per furnace in $32 if not your $64 question as
to how seriously the earnings of
length of time.
steel companies might be affected
open hearth furnace is still
an
open
hearth
furnace,
but during a possible intermediate
spectrographic analysis of open period of business decline. Will
hearth
steel—a
technique pio¬ the leading steel companies, for
unprecedented expansion of steel-

are

to

rapidly being depleted. Prior tonnage
1940,

public
•freely even thought of the posvalidated any such view of Beth¬
afl?ility
of
Ldke
ore
running
mod- lehem. In 1929, 72% of our ship¬ short. But World War II and the

plant, has been




we

heavy steel products.
However, what has taken place

appraisal of steel
and the great expendi¬

cm, efficient steel

But

market's

conservative

earnings

tion continued.

deservedly, the reputation of
being
primarily
producers
of

value.

headlines

for better,

Anyway,

average

in Venezuela and furnaces they replace which pro¬
only some 22,000 tons a
our
25 - year - old - operations in duce
Chile.
Output from our Vene¬ month. Our newest blast furnace
zuelan source is steadily increas¬ at Sparrows Point has just re¬
cently made another world pro¬
ing. Within the next four or five duction record of 56,569 tons per
stantial

book

than

make

make

blast fur¬

development

which apply more or less through¬
out the industry, you can be sure

been able to sell stock at

doesn't

about half of the ore is iron.

nace,

receiving sub¬ month.
In both blast furnaces and open
of ore from
Labrador under a long-term con¬ hearths,
better
furnace
lining
Company's Product Diversified
materials are making for greater
tract,
from our new mine at
that the
market's
From the acquisition of Penn¬ Marmora,
appraisal
of
Ontario, and from a production and lower costs. Su¬
steel stocks has been an effective sylvania
Steel, in 1916, which in new source just a short distance perior refractories in the open
brake against any speculative race addition to the
plant at Steelton away from our Bethlehem plant. hearths which can handle higher
for new capacity. Such
a
race
gave us what is now the world's The new Grace mine at Morgan- temperatures not only mean more
might conceivably have taken largest
tidewater
steel
plant, town, Pennsylvania, near Read¬ production
but
also
superior
place in view of the great postwar Sparrows
Point,
and
then
on ing, will make a contribution to quality steel.
Another post-war
demand for steel had equity fi¬
through the broad expansion of our raw materials position com¬ development involves the burning
nancing on a "growth" industry the 'Twenties, when we added the parable to that which the fa¬ of new fuels. Coke oven gas and
capitalization of earnings been Lackawanna
and
Johnstown mous Cornwall mine at Lebanon, pitch or tar derived from the
possible—had we, in other words, plants, the process of diversifica¬
Pennsylvania, has made for years coking process are taking the
Under

It

ways

true

quired.

possible

does

end

be

by Bethlehem—has made
quality
control
- un¬
dreamed of only a few years
ago.
neered

satile and cheaper steel.

Ore Techniques
were

it

serious

controls the produc¬

or

interest tion of about two-thirds of the
in 1929 and basic raw materials it consumes.
The rest we purchase under fa¬
$278 at the end of last year.
A second reason why we face vorable conditions which we have
the short-term future with con¬ every reason to
anticipate will
fidence involves the change that continue to prevail in the future.
has come about over the years
This, of course, does not apply
in our product mix. The Bethle¬ to scrap.
If we should be faced
hem I am talking about tonight with
scrap
deficiencies,
these
is
a
very
different enterprise would have to be made up chiefly
from the Bethlehem of a quarter- by the use of more pig iron.
Out of Bethlehem's present re¬
century ago in terms of the char¬
for

is

ore

that

story,
of

ranges that the
mining of metal¬

ore

surface

New

If

pays

terials enter the blast furnace.

mention only that

Bethlehem

charges

iron

of

lurgical

over

interest

the

In

1951.

brevity let
for

qualms

for

reason

no

the

end

drain

a

.

forecast affecting the short-range situa¬ kept in mind that you wind up competitive position and to help
with a better ore. When you put keep ahead of rising costs.
ahead because of tion, now let's take a look at

too far

demand
the

place since has put such

,

can't

we

and the imponder¬ some factors vitally important for
let's assume a recession stability over the long pull—our
tion. However, the approach to of some proportions appears. How raw materials situation and our
the
problem of expansion has well would we ride it out at progress towards better ways of
been essentially conservative— Bethlehem? What cushions do we
making better steel.
partly because of the sobering ef¬ have to take up the impact?

of

pressure

the

making capacity which has taken
on

Thursday, December 4, 1952

...

i

i

the

general

the

same

An

,

Volume 176

Number 5174

.

.

The Commercial and Financial Chronicle

.

(2141)

example, be hit harder than,

leading companies in
building materials, paper
ber

industries?

that

definitely,

out

some

I

properties in the highest state of
and
order.
Just
the

ment, in

efficiency

which

minute you try to save
money in
that
process,

your

gentlemen,
going backwards.

that you people have a
interest in break-even

profound

points.

perience

point

considerations

know

is

let it be said in good times or bad
that
Bethlehem didn't
keep its

answer

can

might help you in making
own
independent analyses.
I

plants modern and efficient. Never

oil,
rub¬

or

can't

but I

say,

the

There is

"Never
or

lot of arm-chair

a

points

than

used

uiey

increased

etc.

be

We

asked whether

where

to

the

are

higher

materials,
frequently
point

have
too

we

seen

lot

a

of

have

may

and

there

when

ought to hold
But

for

please

figures,

see

"Make

many

assumptions subject to
margins of error are in¬

of

Thus

spoke

principles

Now,
ciples

an

I

believe

discussion

a

Never go into
a
business that
isn't properly consistent with the

alone.

believe

operating rate of down

integrated position of Bethlehem's

practical

activities.

other words,

this

much, however.

say

an

to

or

85

90%

of

would do about
■as

we

We

capacity

we

well profitwise

as

doing now.
A con¬ pansion
tinuing demand for full capacity praise it

operations

overtime

requires

for

both

the

of

use

curtailed

at

plant, and

lower

rates

Should

of

satisfaction
what

steel

impossible to
break-even

•depend

is.

Much

well

Production

which gives

the deepest

me

sense

A

the

who

men

Management

National

the

run

continue

future

own

done.

will

It

is

the

Association

intimate

first

as

capability,

sort

of

of

the

whole.

a

perhaps

so,

the

limitations

group

is

a

that

hem's

we

belief

of

knit

or¬

this

run,

of

guar¬

offer of Bethle¬

for

into

progress

the future.

management

of

hold

pur¬

Purchas¬

we

C.

line

and

The

markets,

materials.

Di¬

pacity

Re¬

n

d

of

lieve

be

Olin

stabilize

in

influence of for¬

which

have

been

This, coupled with

ca¬

production, liquidation of
inventory and keen com¬

u

of

a

two

months,

high
the

on

than

v

prices will

up

over

the

has

recommended

outbreak

basis for

the fundamental

as

carrying

on our

business

The

principles

remarks

reflected

this

on

in

occasion

been and will continue to

guide.

I

think

can

of

his

have
be

our

better

no

way to conclude my words tonight
than to repeat at this time Mr.
Grace's management

credo, which

has

in

for the

such

some

large part accounted

success

Here's

the

been

and

believe

of

Bethlehem.

he summarized
of the fundamentals that in
way

his belief, as in mine, have
played
a great part in the
founding,

such

building and operating of Bethle¬
hem.
He had jotted them down

absent

flationary
prices
with

during

The

general

unworked
still

that

rate

the

ment

occasion of that
manage¬
meeting for the future guid¬

I will quote him as follows:
"We have and

have

many

balance.

will

in

are

Korea.
to

the

more

conflicting

siderable effect
ventories

reached

levels,

with

normal

improved

With

ments.

we

must

keep

a

what

we

have

the last 30 years.
"We have and

been

thin enough affair

a

readily depending

the

stability;
pressures,
con¬

Full

employment is generally
reported over the country. Addi¬
tions to payrolls are
only slightly
under last month and would be

our

prices. In¬

higher

shape and

available in

if

skilled
many

workers
areas.

corporate obligations.

The

consensus

of

Purchasing

executives is that the election
has,

yet, had

as
on

no

appreciable-impact

orders,

production
principal effect

or

prices.

The

forces

to

operate.

Several

reports indicate pigeon-holed ex¬
pansion and ne>v product plans
are

being

viewed.

dusted

off

and




com¬

run up

what traders and dealers

bonds

were

is believed to be

'

•

»

more

pronounced

normal flow of materials is de¬

tendency

to

home at the age of 61.

at

his

This

why nearly all

reasons

being taken in government securi¬

though the market is still thin

and

restricted

managers

in these

making tax adjustments

are

tendency to keep the

a

pressure on

these

exchanges and sales have been completed

tax

the end of the year,

near

certain of the Treasury
income

issues

that

check.

there should be

a

much

obligations, especially

have

been

under

as

they will

better

tone

m

of the higher

some

pressure

the market,

Likewise, when

because

this*-"

of

operation.
One of the issues that has been under tax

the

114s

amounts

due

3/15/55.

purchase
issue.

This

obligation

has

selling

been

of

even

some

a

money

market

followers,

pressure

sold

by institutions, especially commercial banks.

opinion

brought about

in

is

large

However, in

this

selling

has

condition that makes this security attractive for

though there

may

be further

liquidation

in this

It is pointed out that the issue
appears to have greater at¬

traction than the l%s due

12/15/55, and the 2%s due 6/15/58.

Eligibles Feature Tax Switches
Tax
in

the

switches

and

swops

involve nearly all of the securities

government list because

some

are

moving from the longs

into the shorts in order to establish
loss, whereas others are going'
into the longs from the

shorts, and in that

tax operations.

at the moment that there is considerable

It

seems

way

are

carrying out

attraction in the eligible and newly eligible restricted bonds, when
to tax

comes

switching, from the shorter and intermediate term

maturities. It is reported that the 214s due 5/15/62-67, the 214s due*

12/15/63-68, the 214s due 6/15/59-62, have been used
ments

for the issues

tax losses.
in

the

fit

The 214s

near

into

the

The
added

ket

away

adjustments in price.

important

securities and to hold prices in

Charles H. Marshall, partner in
Butler, Herrick & Marshall, New
passed

if the

even

holdings through the sale and purchase of Treasury obli¬

a

future

due

have

let out in

214s

due

order

replace¬

to establish

12/15/59-62 which will become eligible
also

been

used

in

requirements of those involved

6/15/63-68,

buy, but, aside from the
there

action

was no

of the

which

instances

in

became

tax

where

they

operations.

eligible

this

week,

use

of this security for tax switching

really important developments in the

mar¬

newly eligible obligation.

State funds and
and

that have been

as

rather sizable amount of bonds that the commercial bankst

;

City,

of the most

one

for these

can

York

readily and

up

quotations.

purposes,

C. H. Marshall

picked

able amounts of governments without
having too much of an effect
upon

veloping.

'

Commodity Prices
a

a

for

securities, it is nonetheless possible to sell and to buy rather siz¬

it

Purchasers for industry still hold
within a 90-day range for most

or

of the tax losses this year are

Even

one

eventually sold and others bought in place of them,

it could be done only with substantial

ties.

and activity in the gov¬

Sizable blocks of the non-Treasury obliga¬

were

Buying Policy

re¬

Industrial commodity
prices had

keep the

that prices can be

so

upon

much better market than the

a

tions cannot be disposed of

Defense

rapidly conforming to operat¬ employment is up, as many pro¬
ing levels. Employment remains jects move from the development
high, with defense work coming and tooling stage into production.
out of the tooling
stage and reach¬ Catching up production lost by
steel
ing production lines. Labor un¬ the
strike,
and
seasonal
rest is
abating. Buying policy is demands, are helping to main¬
tain high
conservative, as material avail¬
employment levels.
Labor unrest is
ability improves.
diminishing.

doing for

must

institutions

To be sure, this haw-

Selling Readily Absorbed

market, it is still

are

4
we

more

be interested in accomplishing.

ernment

the

Employment

better

on

in

are

in¬

Domestic

foreign weakness having

mand

strong organization of able and
loyal men. Our policy is to de¬
velop our own personnel and that
is

It is still

down rather

gations, which has
policy to reduce
inventories

material

of their
buying. In the past two
has been
psychological; for there is greater months, there has been a gradual
ance
of the group.
I think that confidence that inflationary pres¬ increase from 30-60 days to a 6090 days policy.
these principles are as much a sures will
Inflationary pres¬
decline, prices and ma¬
sures have
part of our future as they have terials will be
abated; inventory mal¬
decontrolled, per¬
been of our past.
mitting realistic supply and de¬ adjustments are ironing out, and
on

past.
or

Accordingly, portfolio

prevails, and reports indicate

working

past
it

following

spasms

tend

there

the future.

and

picture, but there is still

•

his

management which he had found
to
be successful
and
which he

in

more

ing into the market for this type of operation.
adde'd some volume and activity to the

in their

maintaining
the

pressure

down

delivery promises
our Chair¬
more
dependable, warehouse
Grace, and in recogni¬ continue through the first quarter
items in easing
1953.
Back
50 years of devotion of
orders are
supply, and grow¬
high,
ing competition, there is no ur¬
to
the
building
of
Bethlehem though not growing as fast, and
gency to stock beyond delivery
Steel. At that time he talked
in¬ production is paralleling the order
lead time and scheduled
formally about the principles of pattern, a normal condition that
require¬
of

as

the situation at the moment with

Mr.

man,

times in the past

many

Tax switches appear to dominate *

Inventories

find industrial

Robert C. Swantoo

the

more

next few months.

stries,
Inc.,
New
Haven, Conn.,

ir 11

celebration in honor of
tion

happening since this has occurred

the finish of the year gets closer.

Tax

petition, indicates the trend to
a
buyers' market continued
through November. Buyers be¬

I

man¬

had

the

eign

business

ago

up

usual

may

excess

vision

is

lives.

years

of

peating Arms
Company, Di¬

"Principles of Management"
two

place in particular, because of the adjustments that must be
by holders of Treasury obligations. Distortions are cropping
from time to time in individual issues, but that is not an un¬

made

However, despite the lack of breadth

chester

depth

Bethlehem's

beginning to take on that so-called
zigging and zagging but not goin^

not

chases, Win¬

its

this

are

means

any

matters

on

markets

money

"year-end look," which

and

rector of Pur¬

,/ -I/-.,'

executive

Since

Market Has "Year-End" Look
The

permeates

closely
long

can

capacity

In

things at Beth¬

be the best

may

on the increase.
These exchanges will, beyond doubt, be
important business of the government market for the bal¬
ance of the year.
Although the tax switches involve substantially
all of the issues in the
list, there appears to be a modest lengthenring of maturities discernible in these operations as a whole.

well.

as

very

antee that

ing place

would

enough,

unusual significances at this

no

the most

try to be guided
If
we
operated

soon

in the December maturity of certifi¬

high, but evidently has

switching, it seems, has really come into its own, with the
number of institutions and the number of
operations that are tak¬

the

realities.

machinery

up

and

what

your

Robert

best guide to the

your

future

About

we

ganization. In the
shared conviction

such

Swanton,

agement is going to make for itself
lies in the basic
policies by which
our

moral

generally weak, has caused a very
whose conservative view to be taken on
Chairman is the future price structure of
some

organization, to judge at

hand

•and

and

The attrition of 18%

was

Tax

back

to

mittee,

manifestly im¬

workings

cates
time.

sheet

fall

or

conform

We believe these

ing Agents' Business Survey Com¬

to

for

internal

balance

the balance sheet

little

Keep

the

progress

fouled

get

past

any

opinion

it has al¬

as

banks.

industry's fu¬

Paralleling Orders, Survey Reveals

composite

people outside of a
large company to get a close feel
of

an

policies

chasing agents who comprise the November.

That has to do with the

possible

prin¬

Purchasing Agents, headed by Robt. C. Swanton, is that
high level of business will continue
through 1st quarter of 1953.

-enterprise.

ways

the

as

tion of

of satisfaction and which I
regard
as
the
prime
source
of
our

make its

that

Consensus of Business
Survey Committee of National Associa¬

Now I have left for the last
one
aspect of Bethlehem's
situation

of

.

the

on

assuming greater importance in the market

a close.
These sales and purchases of Treas¬
obligations for tax switching purposes will continue to keep
quotations of government securities backing and filling for a while
without any important trend changes being looked for
by most of
the money market followers. The list of
eligible obligations was
increased this week by more than $2,800,000,000 when the
214s
due 12/15/63-68 became available for
purchase by the commercial

ury

enough of either of these to make the market for Treasury
obligations the wide and active market that it has been in the

product mix and
the price structure

Under stress,
management
ingenuity has always been
stimu¬
lated to effect economies.

calibre

ap¬

mind free for the future. The
past

will

holds.

strength.

on
.

Grace

the

on

how

on

did

.

state just where the

point

We

thinking about
yesterday, but principle

drop you'll soon
dry up
capacity, it is platform as that.

of

or

our

lehem
a

moving, but moderately more active government market,
to stay within the recently established
trading range

continues

to

management
definite place in

a

by
principle.
otherwise, the

field, don't hesitate

from

you

operations
of

soundly,

"Don't
try to live on
achievements. You can get

operation.
lower than 85%

as

to go forward in it.

These could

be

and

from every angle, and it

is within your

the production

and maintenance of the
at much higher costs.

side track

program

highest

ing fast to principle has accom¬
plished. We don't live by ma¬

"As long as you
study your ex¬

are

A

prospects.
In
the
case
of
Bethlehem I have seen what hold¬

chinery

you

of

want

we

By JOHN T. CHIPPENDALE, JR.

=

the

ture

on

that at

in

sense

which

upon

Don't

a

Mr.

operates have

try to do the other fellow's job.

off

all

try to keep before

we

volved.

go

of

Governments

on

the year moves on to

the

To a considerable extent
break-even point
is where
are forced to go.
I will

asset

Reporter

integrity.

Tax operations are

that expansion is in
legitimate fields.

sure

least,

integrity,

Bethlehem's

large

Our

progress.

us.

fear to go on with it.

but

not

greatest

sense

of

horses and stop.
do it for long.

our

but

known for it; and we are. It's
greatest asset that we could
have in our business."

supposedly ought

never

going to

are

the

period

couple

a

"Last

that manage¬

estimation, must be

my

they

The

mind

be

opportunity
expansion, never, never

for sound

I

guess.

But in

bad

a

for

we

When you can

only

can

expansion

sound basis.

not to spend any
money, when we

company might be.

Frankly,

We

years

have calculated

we

break-even

of

if

the

of

analysis is a high
integrity. We want the

don't try to
the ups and downs of busi¬

guess
ness.

because of here

cost of wages,

services,

our

much

are now

afraid

on a

in

it provides ex¬
future. That's

as

for

frame

final

planning expansion,

reasoning to the effect that break¬
even

be

growth

you're

only useful

the

some

minor buying by private pension funds

private trust accounts have tended to give the longest restrict¬

ed issues

a

moderately better tone market-wise.

•

30

The Commercial and Financial Chronicle

(2142)

Continued

jrom

income

4

page

in

ratio that existed

1939.

Stated still another way, we would
have

Prosperity Will Continue
Through 1953!
,

tain

the

even

the

of

Because

,

,

,,

„

of ^ne

significance

important

tool

win

e

be

£ared

A

better

un-

derstanding of these forces can be
had

by answering such questions
What

as:

has

end of the

the
capita dis-

happened since
to per

war

posable income and to per capita

consumption expenditures? Have
our
living standards improved?
What

of

tures?

consumption

the share

expendi-

of gross

forces

cur-

national prod-

going to the consumer, or that

win
will

ffross
gioss national
national

total
total

thp
the

Miicp
cause

,,

,

the

the

of

war

per

expenditures

consumption

terms of constant dollars have

In

not

changed sig lfic ntly.

individual
tended

keep

disposable

down

income

ave

capita

per

there

are

other factors that should

also

not

overlooked.

be

Heavy

taxes

income

to

ably

but

First,

important,

most

creasing

work week.

average

work week

taring

amounted

The average

prob-

and

is t e deIn 1944 the

manufac45 2 hours.

to

for 1952 will be

if the average work

ap-

week of 1952

were

equal to the high

total

disposable

level

war

and total

income

production would be considerably

£!f,her- Another ^act°r that has

.

-

demand

savjngs

„

tieg

A possible souice of increase in
consumer expenditures is an increase in corporate dividends. If
investments drop 11 can be as-

terms

in

the end of the

since

tnere has
Cline.

consump-

of

dollars, have not greatly
be

war

proud of the fact that

been

.About

production

substantial

no

1.2%

during

of

the

de-

total

our

past

two

has been going for national

years

security and

we

perienced

decline

a

standards.

still have not

The fact

capita basis,

in

that,

ex-

living

our

on a per

our consumption

5^nf
rno+oiW
p

ex-

m.s
constant
/J1
aPJr+°m~
f
is a creditable
rl 3 i
ve .w*r
forwar i to a penod
,

whan

™

Tu„

fore reaching

mediate demands of our economy.

It tbls assumption
'

.

win

to retain

no

{i'nd

r

T\o/

in

thp

nf
Q.

,,

longer

una

large

as

1

t

necessarily

reduttion

in

jf

jndeed)

it

J

remain

annuaj

00Q

income

This

j

share

g

ZZZsZm

of

when

discussing

expanding

t'0r

for

and

means

reasonable.

.

? a

o

expenditures

problem
the

seems

parcon-

debt of

to the total
jn

It

is
IS

of

today is compared

consumer

debt of 1939.

that year, total consumer debt,

to

his

difficult
auiicuit
role

is

spend

to

The

induce

to

greater

a

riisnnsahle

SirMipc

in

groups

increase.

If

residential

mortgage

&

inpnme

to

be

concerned

over

or not the consumers of

nation

bave

over-extended

When this ,is, done

we note

tbaJ

current

caving

•

i

^

V

•

UCUk, tuuBuuici ctnu
amounted
to
43.2%.

same

his

f°r

purchases.

to

The

in-

There are still other phenomena

at work in

our economy

pointing

toward a continued high level of
consumption expenditures. One of

these' one that is a reflecti°p of
many other factors, is the redist

tribution

of

income

which

of

employment, and

an disposable income,
an

aggregate

no

we

change in

could have

consumer

and

resi-

la6 ba®inessni.an to
cfi y
every

im- dential debt increase of approxitoch- mately $13.5 billion, or 45% of

selling
will

managers

conceivable




be

gim-

all

of

will affect the amount

consumer

place in

ever,

gin

spending

that will
given period. How¬
should such expenditure be¬

take

a

to fall at

rather rapid

a

rate

and

a
significant amount of
employment begin to appear

government has
that

could

fluence.

recourse to a

have

This

un¬

the
step

considerable

step is to cut

sonal income taxes.

the

but

to

decline

continued

ex¬

pansion of Federal, state and local
government expenditures and the

possibility

additional

of

activity

in¬
per¬

If this should

on

the part of consumers are apt

to

population.

our

Nearly all of the forces already
mentioned

goods

sumer

would

increased.

ately

consumption

counterbalance

the depressing
produced both
and butter since June, 1950

forces.
guns

and

in

have

We

have

suffered

not

decline

a

living standards

our

the

as

re¬

sult of

military requirements. We
expanded our plant and
equipment to the
point where
have

markets must be maintained

mass

and

is

expanded if that

even

to

be

pointed

basis,

kept

work.

at

out that,

on

a

plant

I

have

capita

per

disposable

standard

be

The

con¬

immedi¬

additional

expenditures

which
im¬

an

our

terms of

real

must concentrate

to
products produced,

fihd-

on

consume

the

to

ways

de¬

create

mand for more
to

r^ise

products, and thus,
living standards.

our

-

Outlook for Stocks and Bonds
from the spread of the use of tele¬
vision.
That
feeling
is still
a

growing

but the

one

gradually

taking

this competition.

movies

steps

to

are

meet

It will be

slow

a

and

costly process, but we think
if one will be patient with
these issues at present low levels,
that

that most of them

will

its

demerits of what has been

or

happening it is of interest to note
that the pattern of income distri-

ment.

bution
was

in

results

is

quite different

1929.

in

This

sales

more

than

it

development
of

automo-

will

cultural

be

middle

a

ground

The

statistics

I

use

are

subject to adjustment, but, in gen^
eral, they do give us some indir
cation of what has been occurring,

equipment

industry and
machinery issues a fair com¬

bination

and

moderate

available

during

1953.

but

Higher interest rates would
There

that

sues

are

has

ing units of the United States

of

the

It would

the

cheap

earnings

stocks

have

to-

seem

al¬

down,

are

largely discounted that fact. They
even

rise in the first half of next

We

-impressed

are

been

of weakness

such

Portland

been

shown

best bargains are

some

in banks

market,

'Gypsum, Lehigh

possible drop in home building

activity

next

this

year,

feel

we

building activity will be

only moderately below that of this
those

big city banks but

recent pe¬

in the

Cement, and Sherwin
In spite of the talk of

Williams.
a

showing in

National

as

the

by

few building stocks

a

have

riods

building

but

year,

Most in?-

/•.

•

to

somewhat

value.

' V

"

year.

bank is¬

many

generally

in the few

cer¬

helpful

selling

are

below their asset

terest

be

to.

appear;

quite

seem

their

that total

In 1929, the top 20% of the spendre-

income

of

appreciation

biles, refrigerators, stoves, homes

certainly

though

strength that

There

some

ing and Purity Bakeries.

apply likewise to those companies
making various cereal products;
Agricultural equipment stocks

eventually, certainly will hold well and might

to be well worth holding.
Certainly none are outstanding
bargains for purchase at the mo¬
prove

has

come

going to the top 20% of

our

spending units had dropped to
42%, notwithstanding the fact that

are

some

like

sue

of

the

1939

total,

nave me same

before'we wotild
deoc-to-disposabie-

real purchases
the

First

Cincinnati,

in

an

National

National

is¬

Bank

Bank

of

Commerce in New Orleans, or the
National Bank of Tulsa, Okla.

l(ke

stocks

just mentioned

not en¬

are

tirely dependent on home build¬
ing. Repair work and road build¬
ing

important factors

also

are

the affairs of companies like

in

>

those

already named.

xo luoi have been
nave
oeen
second high
second highest and

those
tnose

of
ot

the
tne

middle fifths.

income in

our

economy

as

it

re-

ceived in'1929.

Another
the

Stocks

attractive

for
would be the in¬
group

fire

in

have
the

insurance

pointed

fact

ably
We

below
have

field, such
men's

and

before

food

This

position.

or

this

rec¬

It

is

mentioned

quite

a

favorable

likely

that

enabling the food

ducing companies to show

in

and
iiKe

a

pro¬

little

margin of profit.. This in¬
meat

packers

like

Swift

Wilson, and baking companies
Warn

Baking,

General Bak¬

there

interest

was-a

in

the

stocks and consider¬
able activity on the upside in the
gas

panies

four in this

as

quite

natural

ago

values,

a

might give

we

year

widespread

there

the

some

their

gas

little

weakness

which

case

which caused

these, shudder and

Fire.

in

any

as

Then

consider¬

per¬

present.

in

price controls will be relaxed this

s*v-

economy
nctu xoA

are

of

sometime

stocks

are

result

the

at

decision

Hanover Fire, Fire¬

National

The

cludes

to

suggestion

market.

Insurance, Aetna Insurance

better

savings.

as

long

.

equity

for

ommending three

the

expense of
is beneficial

not

number

their

been

to stimulate

perious in wnicn iuC

a

fire insurance stocks

next year,

at

out

that

the present time;

We

business.

in

much

recommend

to

haps Kroger would be as good

very

coming year
stocks, particularly those

One result of this
redistribution of income has been

consumption

hesitate

the field, at

Earlier
Insurance

surance

The statistics show that the in-

micxtu

partial solu-

of

been going on over the past 20 wb^tre you would expect in cer¬
years. Without arguing the mer- tain selected issues in the agri¬

wn„ia

investments is not
A

level

likely

are

somewhat

we

means

de, ^ !.n 1939> e9ualed come groups receiving the great10^° 0± the totaj dlsP°sable incom^ est 1951
proportionate gain from 1929
and the total debt, consumer and
to

residential,
determinpThP "sldentlaI' statistics for to1952
a"}°"nted
43.2%.
the
The

consumer*

income

expenditures and foreign

We think grocery chains will do
debt (both city and farm) is in- ceived 51% of the total money in the medium sized and smaller
cluded» tbe t°tal in 1939 would income. This top one-fifth did not cities, and incidentally in cities very well and are likely to get
have been approximately $30 bil- spend all of its money income on which in the event of bomb war¬ some price relief which will cer¬
lion compared to $87 billion at the consumer goods. As we know, fare are decidedly less vulnerable tainly be mildly bullish for the
than the big cities on our coast, stocks of Ihese chains.
Our cli¬
end of this year> Percentagewise much of the income of the top
this increase is not as large, 190%. group went into savings. By 1951 and even some of the big cities in ents are quite heavy in many in¬
the interior.
in these chains and
we
For instance, there stances
it is these figures that cause many the share of the total money in-

aetermme

easy one to solve.

adopting

the

vestment

exports,

new

the
—

provided
.

18 themselves.
the total dollar amount going to
kt1'
Tracing the growth of debt in this group had increased. What

face

nrwl?

raising

banks.

billion,

not/be one of further
incomes
but
rather

equalizing

goods.;

to $7

economic prog¬
to me that our
goal

our

seems

must

now

certainly ad¬

ing

be

Hio

foc ^ mi?

It

ress.

other loans to purchase

amounted

would

and

versely affect

tainly

durables,

important
downward
during 1953. Two of

an

components, gross private in¬

Now

consumer

•

pr

destroy many of these in¬

eco¬

and the effective demand for

to have large-

the

are
—
'
"
Members
of
P?e same statistics for 1952 are Members o - these groups curly—
cnl^ ?A% aPd 3^4%.'„J_esPectively— rently have incomes ranging from
ZZ"/ more per person for'con- lower than the 1939 figures.In $3'000 to $5'000 annually: This
but $64 / ™nlTlrlW°Uid spend inon1
TtuZ'T"
.1-In
sumption exnenditures it wm.id
A e hlgAer debt-to"dls- 40% of the spending units rebe sufficient ^^offset'\
decrease p®sabl^rincome ratios, there were ceived 34% of the total money
of $10 billion in total investment
«5 "J1!11?" Persons or over 17% of income in 1929, and 42% in 1951.
ThP
nrnhipA f '
A the ,total civilian labor force un- The lowest 40% of our spending
AmpririA
inducing the employed.
units receive today approximately
A consi?mer to m
Now, assuming our current level the same share of the total money
of his current income spend more
the

exact

Dlav hut if

would

centives

and other durable and nondurable

gy the end of this year the comparable figures will be approximately $22 billion, a startling 214%

dergo

adjustment
the

completely equalitarian society

the components of
leads

nomic activity is not likely to un¬

centives to work, save and invest.

including charge accounts, service
credits, automobile loans and
consumer

study of

gross national product
the conclusion
that our

to

A

dlsP°sable

category

course

consumer

oortion
11

of

This

ticularly true when the total
sumer

system that has provided real in¬

A
our

income in the hands of individuals

we are

consumption

they must continue to take care
of the legitimate credit needs of
the American consumer in at least
the same aggressive manner they
have in the postwar years.

consumer

markets unless the

on,
it should be obvious
that there is a limit beyond which

it cannot be carried. Our
economy
has grown and prospered under a

summar¬

briefly what has been said.

of living/ in
goods, has not im¬
proved since the end of the War.

can pay for these only if instalmcnt financing is available. If
bankers are to do their share in
stimulating further consumption

It ig impossible to produce

magg

ize

1

helpful to

tors, all represent sizable outlays
lor individuals. Most consumers

in

banks> role in extending consumer
credit

continue

still

going

creasing variety of durable con- would follow would Iwve
goods, such as television
sets, home freezers, dryers, air
conditioning units and refrigera- Continued from page 6

consumption
thought must be given to the

gome

should

Ai

is

process

sumer

$10,-

need

A1

Summary

-

be done the amount of

PaY

consumer

the

lenders

-

^

more

1QoQ

must

A

*that

increase

•

t

scale

to people who

purchase

goodg

under

indicate

anv

go

wouid

of

?

gotten that if

approximately

to

geemg

..

this

reviving bus¬

activity.

are extended, it must not be for-

?8% of the nearly 5>000>000 family
units owning shares of stock have
an

wa^

iness

to screen carefully the credits that

recent study of the Brookings In-

stitution shows that

.

though

high,

divjdends might even increase.

anvone

sumer aeot picture in 193J.

a por-

by a
payments.

dividend

ratio

1939

1 cl° not recall tnat anyone wa.

be followed

earnings

the

this way really means very little, groups benefited as a result of
It is more significant to compare this decrease in the relative share
?
1S pos,~ debt with disposable personal in- of the total money income going
crunr;s come, income left after taxes, to the top group?

.

K

the

the

Thursday, December 4, 1952

.

It might be

ilt XfstlT1^"t.s droP

nprin^

uL

ciHio

drop $48

before

very concerned over the total con-

it

tion of their earnings for this purA decline in earnings need

TK°Ur 4°^"" the

nf

nnw

inmm.

25%

recall that

correct, cor-

is

..

.

rafp

about

or

.

mediate effect upon

tained.

total liq-

same,

1939 ratio would be experienced,

P01^ necessity to meet the im-

furt]?er ad~
standards.
W,
between our dis- lenders
pvnpnriifiirpc^rfrocon?1181111115
whether

vanpic^n

rpnt

AJ1 other fac_

remaining the

billion

debt,

mortgages,

ujd aSsets would have to

j!"™ed *lat

prudent

capita

per

expenditures,

can

residential

cent .g 45

per

tors

i

increased

In ig39^ totaJ consumer

jnciucjing

l w

r

vears

we

holdings,
time deposits,
shares and

currency

deposits,
and loan

amounted to nearly 61% of such
assets held by individuals. In 1952,

•

ris- are Provided by which consumers
/AAAToA A AA-A can purchase large quantities of
la tion
TWs factor has been over" goods' In the past few years the
k!cnmp h,,+banks have done a truly superb
cZ o postw r bibles ha n- job in taking care of the credit
creased our Zulation of 14
?,eeds of the American consumer,
anH
Llr i! 97^
tho S
However, there are many who
compared with 25% °n 1940 iust Z°nfly
believe that consumer
prtor to th^war
debt has been allowed to climb to
levels above that which is

w? Ito

tion

inciucie

aggetg

capita°disposable incomeTrom

constant

com-

years.

J^f
h^i
tpinimipl
peiAie^c^ fA.lAf nf^n!A2Ap'in

in

proximately 40.4 hours, a decrease
of 10.6%. At current wage rates,

Although

be

can

United States Government securi-

necessary

..

e

end

capita disposable income and per

capita

debt

with that of past

aggre-

5*
to he sold. Many organizations
would benefit by investing in ma -

poiations

product to be increased?
Since

A/r* m01?L

current

la<-t that capital plant and equip- stated another way, debt would
that will increase ™eiat
haY^i)een
thp°
have to increase $29.5 billion be-

there any

Are

rently working
uct

the

be done to increase

can

amount

conc|U

another meaning¬

our

We
can
re]ate ^ebt to total personal
]jqUjd assets from 1939 on. These

expenditures we creased advertising expenditu
.
might look at some of the funda- *n. areas of severe compet t
,
mental forces acting upon total Prices will have to be lowere
aji
consumers.

that

way

gate consumer

consumption

sales to

of

decline

a

Although

There is still
ful

,

,

experience

vail.

goods in the hands of c nsu

national product.

gross

.

,

billion in disposable income
the 1939 ratios would pre¬

before

of mick enabling them to place more

level

present

to

$31.4

ings for capital expansion is de¬
clining, and in which consumption
expenditures have to be enlarged
if lull employment is to be main¬

.

not

in

rate

a

two

com¬

investors to

of them

This

stocks.

have

came

of

the

to sell

caused a
gas stocks

yet recovered to

their highs earlier this year.
are

not

at

all

bothered

about

We
the

long-term growth possibilities of
well organized gas companies, and
that in spite of the proposed new
method of
method

calculating rates, which

will

be

contested

in

the

We advise continued hold¬

courts.

ing of such natural gas stocks.,
The

office

equipment group

the whole has had

a

very

on

difficult

time of it and there has not been
much

in the field at all outstand¬

ing but

we

do think most of the

Volume 176

Number 5174

■4

Chronicle

The Commercial and Financial

.

'

(2143)
stocks in this

ahead of them.
They are a group
that needs to be watched
possibly
>fot; selling in most cases before

group are still rea- cott, and continue to do so for the
sonably cheap. In spite of recent present. In fact, there has been
price action, we continue to
look such drastic readjustment in some
very^ favorably
on
Remington of the other metal stocks that we
Rand, .which we might consider are even beginning to like St. Jothfc--. poor
man's
International seph Lead at present.
You all

next

-

drastically lead has
dropped: in the past few months,

-

will

go

much

very

do not feel

we

where

the

higher

as

that

a

growth factor

The Automobile Stocks

is

strong.
Stocks
in
general in this group are good defensive issues in a period of
generally

uncertain

tions.

market

very secure and

The

strictly

the yield is most

•,

„

income

Railroads

as

a

group

this

of

to

year

never

date

still

are

but

but

»™unt

you

the

watch

0n

It

•.

is

next

n

even

though

creased.

costs

wage

0f

point

where it

is

3

ce

u

i-aiic

•

cars

„yr;

electrical

w

miai\-?a

ay'

11

the past
that,, field,

Industrial

Rayon and North American Rayon
prefened are among the best.positions to holdin the industry.

&Manufacturers.

Since

To

might add .United Mer-

we

chants

■

telephone and telegraph
have been restrained

companies
ln

seems to us that they
would get a better break under a

Administration

than

Un^e Admmistration... the DemoJ:0I?^1.nJja^Fe
crat
a

•

As

said

we

cussion

of the

one

earlier

this

in

dis-

think tobaccos will be

we

more

attractive groups

^ext year. Certainly for the
ashVV° ,yeft^ f^ey fve ^enn

io

in

appreciation

in¬

factor,
but
they
gradually running into lower

are

affairs.

prices,

av-

+we believe,

important in their

Likewise,

suspect they

we

rates

increase short-

too, before next year
of which adversely
prices of long-term
bonds, and high grade

all

over,

the

preferreds.

dividends

of

preferreds

man-

time

labor

In¬

now

trend
an

be

may

very,

very

to

of

interest

This

rates.

nfairJSJvtie price

is

important fact to those trying
put part of their fixed asset

commitments
term

their

up

in

bonds

maturities

in

of

long-

order to

build

yield.

average

is

It

judgment that in
continuing to do this, you may
lose
anywhere from
2-5
points
personal

my

Chemical-and

Drug.

stocks

these

on

before

bonds

.

standing group
They are again

in that respect.
getting'down to
levels that begin to make them
attractive purchases.
^ *
The

steels

still

are

irt"

rather

a

settlement
versy

of

the

especially

ds jn

1953

is

contro-

be

very

'

brackets

tax

of

48%

consideration

some

or

more,

should

be

some

will

have its

effect

interest

rates

increases

and

think you should confine

some

satisfactory in

are

types of steel but-apparently

we

maturities of
with a goodly
of
maturities
under
As in the stock mar¬

purchases

your

not

not jn all.-On the

10

over

whole; we think
the industry win be given
pretty sprinkling

five years.

jAre going toritold up

fairly well compared to. those of.
the
we

second
must

half

never

of

this year

forget

to

that there

will

be

i

foi

ffi

"J
quick

J?0 !.11?
but

short-term

profits

are

we

not at a11 actively involved in
recommending steels at this time.

hey^ certainly. Should appeal to /The*-rubber stocks have
;
51®considerable adjustment too
bave to include Liggett

'w

R.

Isleib,

missioner,

Bank

Land

Dec.

on

farm

eral

.

The

.

"

..non-ferrous

have

in

recent

considerably,

metal

stocks

weeks

slumped
particularly issuen
.

Kennec°tt.. W"e

migfit attribute this to two factors

•.perhaps.

2fip?er
duction

nationalization
in

they

rly copper.
It

is

these
so

as

;.

-^e

for the purpose
for

their

books,

Com¬

been

ernment

those
not

A

while

half-sale

of

back

we

Phelps

Dodge, which seemed out of line
with earnings prospects for someheld

onto

we

on

remember

in that position in

but

we

Anaconda

have

and

still

Kenne-




contracts,

appear

to

originally expected.
other
not

the

way,"we

are

the
be

but

was

To put it anin most cases

advising the sale
moment,

earnings *

what

of

them

certainly

maturity,

at

approximately

of

1953,

outstanding

Federal

dated

primarily

of providing funds

redemption

1,

only $833,000,

consoli¬

loan

farm

1

lk %

bojnds of Jan. 1, 1951-53.

total

of

the

revenues;

backlog of new industrial business (pending but not yet con¬
nected), expected to increase the company's annual revenues by
$2.8 million.
The

residential revenues per kwh. are currently
(moderately above the national average) while resi¬
usage approximates 2,162 kwh., about in line with the
national
average.
Residential revenue per kwh. has declined
steadily since 1938, or earlier. The company has improved the
saturation of electric ranges in its area in the postwar period from
17% to 31%, and that of electric water-heaters has increased
company's

around 3.02c

dential

from

2V2%

to

18%.

The

company has enjoyed rapid
sales have increased 105% and

postwar growth.

Since 1946

kwh.
the peak loan 83%. While
growth has been stimulated by defense activity, the relative pro¬
portions of domestic, commercial and industrial sales have been

consistently

maintained.

Medium-sized

small

and

communities

have benefited substantially

b,y the increase in industrial activity.
group of security analysts recently, Presi¬

A

a meeting with a
Gallagher presented

dent

a book of
statistical data containing
A chart of system capability and peak
demands during 1946-52, with a projection through
1955, indi¬
cated that the company is planning to install
360,000 kw. at its
huge new Wabash River Plant by the end of 1954.
some

interesting exhibits.

The present 561,000 kw. capacity includes 25,000 kw. available
Under

lease

a

increase

£0%

which
the

over

over

November, 1953. Thus, the net
will be 335,000 kw., a gain of

expires in

next three years

1952 and

150%

The addition of the first two

1946.

over

90.000 kw. units at Wabash River, scheduled for about March and

1953, should greatly improve the generating set-up in
to peak loads. In the meantime, the company must buy
expensive power to meet the load. With the addition of the third
and

fourth

units

Wabash

at

company should have

aff least.

-

ample

River

in

reserve

the first half of 1954, the
capacity, for the time being

/

.

..

i

The

the

by

ended

significance of the current
fact

that

Sept. 30)

minimum

fuel

is

the

had

company

^

will

be

for

cash;
be

will

that

(in

pay

the

making

bonds;
made

allotments

to

that

of

the

for

its

power, compared with
of only 2.43 mills.
The
average of $4.56 a ton for coal, com¬
1940.
The present coal is about 7%
own

power

now

with

better

are burned at present to
kwh. compared with 2.07 in 1940. These factors par¬
tially offset the higher cost per ton, so that fuel cost per kwh.
now averages
2.8 mills per ton compared with 3.3 mills in 1948

produce

and

one

about
The

1.7

mills in

1940-42.

$25 million first mortgage 3%s due
million 4.32% preferred stock in June this year, and
of Sept. 30 the capital structure was as follows
issued

company

1982 and $20
as

Stock
Stock

Percentage

$101

47%

37

17

77

36

Equity-.

$215

The

100%

small

remaining amount of the 4.64% preferred stock
will be called for redemption in December. The
company hopes
to avoid additional financing in 1953,
according to Pres. Gallagher,
but might issue preferred or common stock (probably the former)
next

summer

There

are

if they

no

fixed

decide to add
ideas

agement leans toward
Service

a

fifth unit at Wabash River.

regarding capital

ratios

50-15-35 set-up.
Indiana has recently

but the

man¬

a

of

selling around
Exchange, paying $1.80 to yield 5.3%.
earnings for the 12 months ended Sept. 30 were $2.42 a
share, making the price earnings ratio about 14 times. The com¬
34

been

the New York Stock

on

Share

has

no immediate intention of raising the dividend, according
Gallagher, although the situation is reviewed by the board
monthly meetings. The record over the past ten years is indi¬

pany

Revenues
Year

-

Common Stock Record

(mill.)

Earnings

the

banks'

be

Fiscal

Agent, Macdonald G. Newcomb, 31

St.,

New

York

N.

5,

:JPrice Range

Dividends

1951

$49.74

$2.06

$1.80

1950^

in

44.99

2.54

1.75

30

1949

40.30

2.48

1.20

27%-20

t

22%-18

1948

36.89

31.10

2.42

27.37

*

2.67

1947
1946

through

Nassau

cated in the accompanying table.

new

offering will

the

2.06

Y.

t

30%-26i/4
-241/4

231/4-17%

t

0.80

22%-161/4

wide

the

assistance

selling

groujD

of

a

nation¬

1945

27.94

1.11

0.50

18%- 93/4

1944

27.53

0.96

0.50

IOV2-

1943

with

28.16

0.96

0.50

25.66

0.88

of recognized

dealers in securities; and

that Mr.
1942

Newcomb will

recommending 'them
with
the and
thought there~is any appreciation later

terms

of

announce

the

the time

offering

*

at

a
of

date.

•

nine months

11.60 mills for purchased
cost

no

given

holders of the maturing bonds

•;

shortage is indicated

power

to

paying an
only $1.69 in
in btu content, and only 1.23 lbs.

company

pared

at

Mr. Isleib stated that the offer¬

at

not

about 1.5%

or

to Mr.

in ; preference

II, and when the govgot through renegotiat-

ing

come,

overboard

huge orders

but

were

did

to

go

purchasing aviation rnanufacturjng stocks at tSis time. We recog-

the prices of these stocks

time

not

to

Moreover, the largest annual revenue from any
(du Pont's Wabash River Ordnance Works)

list of large industrial customers shows good diversification among
different industries.
The company as of Sept. 30 had a large

Public

the

Jan.

ing

would

overdone

suggested

best value

World War

judgment that both of

concerned.

the

& Tire.

metals, particu- t{iey also

factors have

far

are

our

their

We think

in the group today is Lee Rubber

ivl Chile and some^re- njze that all have
the aveiage price

received for their

•

of

ume 0f business and for earnings
se^m fairly good over the next 12
months.

amounts

industrial revenues (34%) is
large companies in this section

unit

Common

announced

1

bonds

loan

pasd year. Their prospects for vol-; $186,000,000

"•

-

country.

industrial

of

of the other

Plan to Refund Bonds
J.

had

this

i

RP?ySS' American Tobacco and
y

the

Preferred

s no\ recommend steel stocks

a

of

one

proportion

some

Amount (mill.)

re- for

at this point,

company's

Long-Term Debt

!

will
+v

The

lower than for

Federal Land Banks

that when

terrific fight

a

and

quarrying also diversified

on

j;y' ?n^K

nn

accessories, aluminum

outlying districts. Revenues are about 33%
domestic, 17% commercial, 34% industrial and 10% sales to elec¬

but

peace comes, the steel industry has
so
greatly added to its capacity,

and

tric utilities.

years,

markets for their output, that the 12 Federal land banks are
n ^1C probably by 1954. While generally making arranagements for a pub¬
position consider- we are not rushing in to sell ail lic offering of consolidated Fed¬

lipf

automobiles

the

relation

will

course,

the

on

The government has allowed price
that

in

August,

Of

hold

to fringe prof-. given to purchase of municipal
companies. bonds, but there the uptrend of

as

0f

cases

wage

steel,

chemicals,

agriculture

wiped

receive

may

out.

instances suffered a fairly
sharp relapSe in recent months,
They have'been about the out-

of

other metal products, cement and stone

if you • want to
long-pull basis,
eventually the upward trend of
; interest rates will be halted, and
we will probably get into a cycle
of lowering interest rates, but that
seems a long way off.
For those who are in the higher
tax brackets, that is in the sur¬

you

evdh^Sterling

The ethical drugs have

most

Company of Indiana serves electricity to a
900,000 in north central, central and southern
Indiana, including the cities of Terre Haute, Lafayette and New
Albany. Industries in the area include coal, mining, production

the

on

but remember the govern¬
factor will be the upward

ing

Relations,

proprietary,, drug

ma¬

good,

some

good

a

govern¬

earnings

an

P^acc

for

until

?®
as

vestment "

and that is very

them

in

are

terest coverage on these bonds or

com-

aggressive

very

and

latter

who

in¬

especially

unattractive

terest

hold

to

life

fatr treatment in further adjust/
ments, at least through the first ket, choice of bonds should be
a highly selective basis.
hajf of next year \ye believe the

t

v°>

The

years than other uncertain spot until there is final

^ecen

utilities, it

Republican

vick

three-four

in

In

to

corporate

We

Westing-

on

type

and hegin to look, 3n'. most cases, -over, as a result of the upward
trend of interest rates. Therefore,
like a good purchase again today,
-phis is certainly true of Lambert, £11, or a large part of any interest

expansion

ars.

investors

and

companies

affects

have certainly gone " through a
real testing period this last year

r

y

Eelectric.

\The

,.

?Un+dmJf
thp
wwi
Amf are not yet off
tv.fiJ i*
few have begun
.S i°WireC°Very'fTif woulJ.hc
particularly wary huge
of those which
put through
Programs

is

ilt that field today

Y

ave

-

equipment

feeling

in

im¬

governments

ment will have to

which is always a factor that must
he considered in judging market
values. We prefer-_Westinghouse
Electric to General^ Electric if one
insists upon making any purchase's

*

nu

&I i

it

Leave the purchase

coverage

unusually

certainly nothing
so"c.alle51
MnSfUfi?% Western and VirChesapeake &
Norfolk &

Ohio,

individual

non-convertible

agement

^

Ohm

year

rise

turity. We shall find the
term

Electric.

Service
over

develop,

make

institutions,

position

so

particularly like at this

we

pan.y has a

to
on

into the

on

.
'

•

will

to

long-term

surance

the continued flood

on

the

house

the

8

for

next

small

rates

continues

not have that

in-

commencing

my

not

before

further

a

interest

banks,

,

new

field,

rates,

to

come

but

have suggested taking half profits
on
General Electric but we do

Apparently, the Domin-

Government has

xon

of

good, part of the business

a

dependent

Railway

were

the

is

including

buy. However, as
automobile accessories we might

Jn

increase

over,

portant

to

n5? W1}The employees time Westinghouse

recently refused to

will

up

It

governments.

want

js the replacement business not

important to note that Can-

of the Canadian National

take

rates.

to avoid commitments in
any
of
long-term
bonds,

have in your list.

may

is

Generally,. there
lower earnings and divi-

be

Here,

very

■

War

there

future

near

of

com-

consider stocks like Electric .Auto
Lite and Electric Storage Battery.

striking them
12-18 months, so
carefully any rails,
particularly the weaker ones you
within

the

basic

to

pretty

can

some

squeeze
as

interest

would

forget that the next round
increases has not struck
yet,

a

should

we

be any
significant change in rates in the

which

will

wage

them

and

Public

Rates

dends this next year in the grpup,
and
there
is
nothing here~jwe

must

we

cutting

prominent

signs of

see

Finally

World

They have proprofits for investors

some

less

Public Service Company of Indiana, Inc.

and

population of
Interest

panies have not had to face since

Speculative

very speculative.

duced

We

year.

price

far

Lines

Airways.

belief that

be

to

margins of profit such

..

,

Still

Braniff

the

Air

or¬

which

matter of

next

minded.

,

Railroads

stocks

At

Eastern

going

seem

attractive especially to those who
are

automobile

Utility Securities
By OWEN ELY

moment,

airlines.

like

have been so very prominent in
this market especially in the past
year and a half, we believe are

condi-

The present dividends

well

we

exceedingly

a

ganized

to have about halted,

seems

of

long-pull outlook for all

group with very few exceptions in
eases

renewal

a

much larger armament
program.
We are generally bullish on the

how

know

«...

Public

is over, unless there is

year

indication6f

an

...

Business Machines.
Electric utilities,

31

Plus

3/100th

Indiana' Gas

2-for-l

&

share Indiana Gas
Water

split in November,

in

1947

1948.

& Water,

and

11/100

0.50

to

.

fl/10 sh.
in

71/2

8%- 6

1948.

CO

^OO

capital stock

JAdjusted

for

\

.

32

The Commercial and Financial Chronicle

(2144)

.

.

Thursday, December 4, 1952

.

,

Continued

from first

thought and study are being given the question as to what
ought now to be done, what can now be done to prevent
a crash
during the next four years which might very well
bring a new lease of life to much of the costly nonsense
have known and suffered under the New Deal and the

we

Fair Deal.

It is

Indeed it

case.

be

altogether fitting that this should be the
is definitely heartening to us that it should

so.

Realism
At

the

time

same

it

Needed
to

seems

that

us

it

is

doubly

t

such action

Similarly, vari¬
inflationary creation of
funds or the redistribution of funds with the purpose of
placing other people's property in the hands of those who
will come promptly into the markets are recalled to mind
promptly.
other

ous

As

a

as a

preventive of depression.

that non-bank investors will take it
up
ers then must be careful in
acquiring

of

prolonging

that

our

with

skepticism

II

can

fail

for

moment

a

to

look

such panaceas as these. It is pos¬
sible, we suppose, that by judicious timing of essential
public works we can alleviate the severity of depressions.
In

degree

one

upon

or

another

practical considerations

make deficits all but unavoidable in
and

within

limits

circumstances,
enlargement of the volume of bank

credit is indicated in times of crisis.
are

hardly

more

may

some

But all such

than palliatives at best.

It would be

a

magnitude to accept the cur¬
rently popular notion that we need never have another
depression because such steps as these can be taken to
prevent

one.

be the political necessities of a threat¬
ened or an actual recession in
business, the real way and
the only way in which such economic misfortunes can be
(to the degree that is possible by any means to
altogether) is to adhere to policies that limit

them

avert

and restrict the booms which
precede them and generate
them. In the present case the boom has reached an ad¬
vanced

stage. We do not undertake to say, we would
not pretend to
know, precisely what stage has been
reached and hence how
long it may be before recession, or
possibly depression, is likely to set in. What is perfectly

prevailed in this coun¬
try for three-quarters of a decade, that this boom owes
its origin to World War II, and its continuance in all
human probability to the outbreak of war in Korea.
It
strains

all

our

this

credulity too far to accept the notion that in
conditions

no

have

evolved

powerfully to bring the boom to
Mr. Hoover when he

early in 1929 inherited
and

we

are

affairs has

inclined to
not

which

tend

very

end.

an

such

situation.

believe, that the

We

hope,

current state of

reached the advanced
stage

1929.

obtaining in

On the surface at least little evidence of wild
spec-'
ulation is evident, either in the securities markets
or in

industry generally. - We are under the impression that
leading executives in almost all, if not quite all, depart¬
ments

of

business and finance

have

been

skeptical and
They have, of
course, adjusted themselves to
existing conditions, but do
not appear to have been a
major cause of their develop¬
ment. The boom
has, however, after some hesitation last
cautious

year,

at

least for

continued.

threat;

a

year

and

a

half.

Continuation at this rate carries its

speculative acceleration
increase the danger.

any

pari passu

would,

Curbing Excesses

of

own

course,

,

problem is this: How may excesses in the
future be restricted if not
eliminated, and how may a solid




business volume of various indus¬

activities. Please note that
specific forecasts cover the
volume
of
business, not dollar

trial

these

It should

be

forecast

showing

a

pointed out
little

expected for an industry
be either bullish or
bearish, depending upon the posi¬
tion of the industry in 1952.
For
example, we forecast that 1953
will see little change in both tex-<
tile activity, and cement produc¬
change

In the

tion.

case

of textile activ¬

ity, such a prediction is definitely
not
encouraging because of the

position occupied by the tex¬
Cement production,
the political acts of the however, has been at a high rate
poor

tiles this year.

and

such

grave

foreign problems

as

No Panacea

was

sweeping victory

tremendous

a

personal

age

the

largely

landslide.

and

capacity

responsible

Likewise, the peoples'

for and

disgust at

many

the aspects of the current Ad¬

ministration

for

whetted

change.

a

their

appe¬

Outside of the

office of the Presidency, there was
little in the election returns that
could

considered

be

as

encourag¬

ing for the future of the Repub¬
lican

At best the

Party.

licans

have

narrow

but

one

Repub¬

toehold, and a
that, in the next
a

at

Congress.

is

was

truly

a

great

one—

there is likely to develop a feeling
that the General's
election will

along in its wake all

sweep

of

things

good

activities.

whit

one

for

from

the

No matter what the
er

first

the

that the rewards

to

Lead¬

stroke what has

been

long
The threat of excessive

abuilding.

so

productive capacities will remain

(1) Activities Expected to Show
Improvement Over 1952: Yi •
Aircraft

Public Construction
Air

the economy. World economic con¬

ditions

have

shown

signs of flagging.
of

this

trend

'

Airline

Y-'-

effect

on

United

long time to

a

most

en¬

assure

you

Printing

bound to be keen before the green

valley

be reached.

can

In

our

1952,

year

we

forecast

v

Textiles

•

Cement

-

Tobacco

already high totals of loans against

Bituminous Coal

promote

consumers'

new

Y
,

»

.

:

,».;j

Imports

names.

.

Retail Trade
War and

i

Petroleum Products

sales

to

<

Rubber

Defense

Consumption
Electricity.

We

Y?

strongly believe that Russia
(3) Activities Expected to Show
a more healthy respect
Greatest Declines From 1952:
a
United States led by the
Steel and Iron
conqueror of Hitler and Nazism.
will have

for

No indications
modern

Machine

available from

are

Soviets

through
negotiation. They have no regard
or respect for treaties or for en¬

World

by

all

world

hope for

an

the

nations

of

than does

the

up

Machinery,.
Residential Building

Paper

the

Exports.

predicted that

the

to

passive

"containment."

a

policy of

Equipment

Railway Freight

hold more
eventual Soviet crackappears

Y

-

Railroad

Relentless pressure at all
marches of the Communist

the

Metals

Lumber

be dealt with

can

Tools

Nonferrous

history to show that the

for

annual

.»■'

Y

through additional expansion in
private debts seems limited by the

tunity

free

Business to Slide Further in 1953

YY

and Publishing

Chemicals

alluring, but
that the strivings must be great
treaties.
and that the disappointments are
are

Little

Household Appliances

Oppor¬

come.

Showing

Automobiles

business

States

Activities

Change:

bad

a

•

Shoes

(2)

unmistakable

have

Transportation

Natural Gas

A continuation

would

Conditioning

Electronics

to neighten greatly the tempo of
competition. High labor and other
costs have already been frozen into

....

Armaments of All Types

detract¬

implications
of the Eisenhower ascendancy, we
simply wish to stress one thought:
The General's sweep should not
be
regarded
as
a
panacea;
he
be

new

do, he cannot wipe out at

may

one

and

couraging long-term

would

Compared to 1952

a day.
Nor can it
growing signs of old

man¬

men

Without

An

that are already showing on
body of the business boom.

for

Naturally, in the exuberance of
victory—and no one can deny
that

A

lend.

may

the

remove

his

for

it

iron out in

not

Eisenhower's

record

Administration.

h^nd

triumph for the man. The wide¬
spread confidence of the public in
was

are

New

Inflation

Money Supplies
1953

we

in

do

not

—

see

Looking into
any

big

in¬

supplies. At the
hower, increasing and relentless present time our total supplies of
age about 5% lower than for the forces will be directed at Com¬ money are so large that it would
take a sizable further expansion
year 1951. It now looks as if the munism.
By use of an expanded
Babsonchart Index would average underground, by enlarged espio¬ in order to have a marked effect
on the
price level.
around
126 for the current full

Babsonchart Index of the Physical
Volume of Business would aver¬

We

believe

that,

under Eisen¬

crease

money

nage, by a rising crescendo of
Credit—We anticipate no great
propaganda, by enlisting others
who
fight against Communism, expansion in credit during 1953.
whether they have adopted Amer¬ The supply of loanable funds has
ican political moves or not—these been curtailed and the demand for
sonchaft Index of the
Physical are the things which we feel the new loans is less pressing because
Volume of Business will average new Administration will employ of the sizable quantity of debt now
about 8% lower than the
1952 to bring cracks and eventual col¬ outstanding.

This

decline
from last year of just about 5%..'.
Looking into the year 1953 un¬
der Ike, we forecast that the Babrepresents

a

level.

The first quarter of 1953. lapse to the foundations of Com¬
Failures—Business failures have
been
probably record the year's munism.
unusually low when com¬
highest point. Following the ex¬
In such a program, the policy pared with the nation's experience"
pected peak in the first months of the current Administration
during the
days before
World
may
of next year, we anticipate a grad¬
War II. We do not anticipate any
be greatly changed. More foreign
ual downtrend. At the moment we
marked
change
in
the
failure
troops will be armed to fight on
look for no sharp break in busi¬
trend
during the coming year.
our
side.
Even
the soldiers of
ness
volume, but much depends Chiang Kai-shek may be thrown Nevertheless, if business declines
will

on

the

emotional

businessmen

reaction

of

into the fray to ease the drain on

closer to the Normal X-Y Line

on

the Babsonchart, it would not be
supply.
In
cline developing.
such a policy there is naturally surprising to see a rising rate of
late months
the danger that World War III failures during the
No New Stimulus ' *
of 1953.
may be touched off.
But we be¬
In weighing the encouraging lieve such a danger is more re¬
Deficit Financing — A m i n o
aspects for business of the elec¬ mote than the certainty of World amount of deficit financing in the
tion, management must not forget War III that would be implicit in next few months will not have
that the ?reat flooding economic a
policy of appeasement.
And any important effect on • money
as

they

see

the

de¬ the

American

blood

•

„

The real

foundation be built under the situation

specific
predictions
in
up the 1953 prospects for

summing

Our forecast that this
helping in 1952.
under¬ high rate will continue during
1953 is, therefore, to be considered
standing ear (so long absent) it
a constructive forecast.
may
bend.
But the maladjust¬
ments already ingrained by years
Table of Output in J 953
of expansion and inflation it can¬

year.

stepped into the White House

some

As has been our custom, we are

making

than

faced

The General's

clear is that boom conditions have

•

next year can

page

those that lie ahead.

ing

Individual

for

Industries

President

domestic

of

Forecast

1953

of the people. For seldom has

their

Whatever may

Our view¬
this whole matter of the
will be subject to
revision
the
day
that

on

outlook

war

values.

Commodity Outlook

ner

How to Proceed

avoided

from first

point

that

panaceas,

sought.

measures

blunder of the first order of

re¬

The 1953 Business and

tite

War

salvation is to be

Continued

break

of World

other assets to

operations.
directions, not in New Dealish

It is in such

distrust

a

Bank¬

and conservatism in its

tired boom these proce¬
dures have, so it seems to us, definitely
proved their in¬
effectiveness. We can not understand how any one famil¬
iar with the record of the years from 1934 until the out¬
means

and hold it.

place bond holdings lest they be feeding inflation through
loosely extended credit. And it goes without saying that
business generally must continue its attitude of caution

either for the

measures

please note this:

Stalin dies.

ness

the Potomac conclude that the time has arrived to take

But

sudden

wholly eliminated. Advantage must be taken of
reduction in expenditures thus made
possible to reduce
debt. Outstanding Federal debt, now
gravely out of pro¬
portion in short-term form, must be funded at rates such

any

men

They

might change their ways.

often

must be activated at the first moment

that the wise

continued aggressive tactics.

wherever it can be found—and no
difficulty should be
experienced in finding it. Many functions now performed
by government at all levels must be reduced in scope and

important that the whole matter be approached in a realis¬
tic way. Thanks to the "indoctrination" of the past two
decades there is altogether too much disposition to revert
at once to the notion that the way to avert a depression
is essentially that upon which tne New Deal and the
Fair Deal have placed their stamp of approval—that is by
planning in advance to unbalance the budget (assuming
it ever is to be balanced) for the purpose of "priming
the pump" with funds created for the purpose.
Roads,
schools, dams, irrigation, harbor work, and a host of other
projects theoretically at least "saved up" and blue printed
on

as

government is concerned, its proper course is
clear. It must promptly eliminate waste and
extravagance

We It
See

As
>

So far

page

as

it

now

stands^

tides

are

lasting

likely to have

effect

tomorrow's

on

the

production

a

far

more

curves

and

there

of the

sales

the

is

always the hope that,

Free

World

Soviets

may

waxes

see

as

stronger,

the folly of

supplies.

Later

collections
need

for

in

should

deficit

the

year

tax

eliminate

the

financing

for

a!

ww i

Volume 176

Number 5174

.

.

.

ikuawi wwtJHWWMwn «w

i

ac» t ir*r

The Commercial and Financial Chronicle

(2145)
number

of

months.

It

would

should be maintained at all times.
Nineteen fifty-three should see

ap¬

pear,
therefore, that deficit fi¬
nancing will not be a major fac¬
tor
affecting money
supplies
during the year 1953.
However,

clients should understand that if

business

in

order

new

At the

pumps.
ness

slump

time,

same

would

drop, in ;income
Such,

a
by Eisenhower to ex¬
pand stockpiling programs. A de¬

spend money
prime. the business

to

cause

tax

mand

sharp

a

would create

will

sure

as

deficit financing.

be

a

ported

items such

In

ma¬

im¬

to

time.

some

remain

short

the

to

year

be

can

Generally,

domestic
raw materials should be
plentiful.
Later in 1953, surpluses in
many
lines may become a problem.

the

at

present

expected.
an

-fabricators

driving
front

inventories

this whole

situation

rapidly

and

could

change
suddenly during the early part of
next year.

Consumer

though,

Inventories

unfortunately,
are
lacking,

.statistics

inventories

adequate
consumer

namely, the supply
-of household goods, automobiles,
'etc.,'in the hands of consumers—
have

a

—

important bearing

very

future

business.

Consumers

on

.•sorts

of

World

goods in the

War

"Korean

heavy

after

years

II.

Later, when the
broke out, another

War

of accumulation

wave

veloped. It is probably safe to
that most

de¬
say

well sup¬

consumers are

plied with durable goods.
Demand

Employment

likely to

for

—

Existing values should

of

will

away

tinue.

This will remain

cities

will
as

con¬

drag

a

Later

in

for

consolidating
or

a

values

during

Public Housing — We
anticipate
moderate
increase
in
public

a

labor

housing.

gains.

lat";-1953,
a

moderate

This,

however,

greatly expanded
clines

a

that wages

are

suburban

1953.

the

more

if

may

business

sharply than

pect.

This will be
sections of the
out

by

Ike

we

to

for

priming when business
construction falter.

We
in

are

and

Railway (to name
outstanding performers)

be

advances

broadening
first

of

time

Works—

as

moderate rise

up

General
at

once

Eisen-

pected

by those
This, building plans.

to

re¬

who

in

1952

earnings will

$16

million.

It

is;

wonder, then, that progress;
being made toward reducing in¬
terest charges has excited consid¬
erable interest in the road's
rities. : In

addition,

analysts
in time

of

are

the

has

been

the

so

For

the

the

secu¬

many

rail

opinion

thai

program

be

may

ex¬

suffered

while

the

interest.

quite

a

far, the road naturally having
considerably from the

steel

and

short-lived coal strikes-

Expenses,

of the features last week

to

was

Central, with many traders
obviously impressed with the ex¬

cellence
of
the
September and
October earnings reports.
Another of the low priced stocks
that has been
attracting a sizable

following

is

Baltimore

This

been

showing

throughout the
as

whole

a

ahead

of

road's

year

promise

1951

&

Ohio

earnings
up

results.

be

management's

strict
well

budgetary

since

by

of
as;

expenditures. As a result, net
income, before capital and sink¬
ing
funds, for the
10
months
through October soared more than
the

to reach $20,645,939t>

year

as

whole

a

it

now

possible that earnings

common

may reach as

on.

stock, before funds,
high as $10 a share.

Arthur Alexander With

future prospects implicit in

received

system

supervision

tal

favorably affecting public

payment

been

tribute

operating ef¬
ficiency resulting from large capi¬

the

Another

a

to increased

as

appears

well

have

controlled,

$5.4 million,

sentiment toward this situation is
the confidence of the
management
to

the

well; For

and for 1952
to

however,

well

very

New

York

stockholders

W. E. Hutton & Co.

common

1931.

The

postpone

vise the Taft-Hartley Act.
however, will not be accomplished

of

top

small

the recent resumption of
dividends
on the common stock.
A distribu¬
tion of $0.75 a share is to be
made
Dec. 30.
This will be the first

compared with

out

probably

lower priced more speculative is¬
sues have been

factor

total

ments

pedited by refunding operationsdistinguishing this recent revival
Baltimore
&
Ohio's
revenues'
of activity in rail securities
from have not held
up to
1951 levels

ex¬

Labor
rates
will remain
very high and no big
gain in cost saving can be ex¬

force labor to be less aggressive.
—

few

a

into new high ground
by substan¬
tial margins.
Moreover a factor

as

a

has

such as
Chicago, Rock
Pacific, Illinois Central

&

common.

—

move

market

Southern

have

pump-

and

Public

forecasting

activity here

be

is strong likelihood that a rash of
Construction Costs
After the
early-year strikes will be very first few
months of the year we
high. During the late months of can look for
lower costs for most
the year, softening business will
building materials.

Taft-Hartley

and

de¬

of the first

one

economy

singled

Municipal

Strike Prospects—We forecast a
decline in strike totals in 1953 of

however will

share

participating. One

Suburban
Continuation of the
migration from the cities will
help

increase.

wage

the

away

city realty values.

maintain

union program of
advances
on
every

now

from

on

favorites
Island

earlier

Population trend

—

open¬

gradually change to
of

however,

railroad

really come to life, in the past
couple of weeks. Heavy, consistent
buying
has ^ pushed
investment

but

big break,
likely in 1953.

Urban

result

decline

whole may show only

&

management of Baltimore
Ohio
recently distributed
a

pamphlet outlining the progress
that has been made in the reduc¬
tion

of

debt

and

charges

since

1941,

with estimates carried to
the end of this year.
During that

Foreign Trade
enough in the year to pre¬
period non-equipment debt has
Exports — We look for another
widespread labor shutdowns
been cut by $163 million and
by
industry. Such revisions may sizable decline in exports during the end! of

soon

vent
of

well

mean increased tensions be¬
tween labor and management dur¬

the year
to

as

this year will stand at

1953—perhaps amounting
roundly $484 million.
as

much

Imports
Retail

business

its best level for the

see

building

No

seems

ing 1953.

Goods

With

an

with the result that the
year as

are

known to have bought heavily all

somewhat lower

a

commercial

The

—

level off by mid-

may

year

This may
be stepped
approximately 15% to 20% com¬ 1952.
pared with 1952. However, there sharply if business falters.

Al¬

—

net

demand

The prospects

stocked in many

building

the
for

program

well

lines. There has,
.hpwever, been improvement in re¬
tailers' stocks. The nation is again

The

average

the

as

slackens,

still

are

erties.

movement

fringe gains during the

year,

Manufactured Goods—Manufac¬
turers' inventories continue high.

whole

a moderate
decline in the value of farm
prop¬

As

however,

on,

ing months of 1953.

next

Most

levels.

Labor

and

The

Farm—We look for

Wage Trend—Unions can be ex¬
pected to push hard for both wage

time.

developments
y£ar may be a- vital factor.

weather

1953 will show
average
of
than 1952.

about 3% to 5%
lower for the
whole year 1953 as
compared with
1952.

Output — Carryover of
major crops from 1952 will
remain large. The supply situation
in wheat, corn, oats,
etc., looks

—

hold well.

downward

Farm

But

Commercial

stockpiling

peak

wears

be

may

most

-comfortable

on

Costs

current

irregular

for

on.

the

close

burlap, should continue in
adequate supply. Nickel and cop¬
promise

bear

early part of next year
living costs will probably continue

and

per

use

wears

Baltimore & Ohio

<

year

Pres¬

fluctuations.

Living

rubber, tin,

as

brought to

demand

Supply of Goods

Raw Materials—Most raw
terials, including the major

homes will weaken
during
the latter part of .next
year. After

new

in

of price support and to

means

level out

,

increase

an

the government to

automatic rise in

an

such

price decline continues.

collections.

fall, in government intake

a

for

stockpiling will rise in intensity if early firmness, building' costs
should edge lower as the
the

busi¬

a

Real Estate

Residential—Home building will
thing to watch during the
be lower in 1953 than in
1952.
year will be the possibility
Prospects are that the prices of
move

of

to

ways

in 1952.'

One

a

slump should get under

of

All in all, the outlook is for a
lower level of profits in 1953 than

the end of nearly all
shortages, in¬
cluding most items on all "critical"
lists.

way, our new President will find

plenty

33

Over-all

to hold

Trade

Trend—We

look

for

a

This has, of
been partially offset by
equipment
purchases
but

10%.

course,
—

Eisenhower will

aim

imports at this year's high

level.

;

.

physical volume of retail trade in

v

Arthur C. Alexander

overall the debt has been reduced

(Special

$92 million

or by 13.6%.
The re¬
the service charges on
this debt has been wider percent¬

.

Conclusion

new

duction

•

in

to

The

Financial

BOSTON,

Chronicle)

Mass.—Arthur

C.

in the first quarter, employ¬ 1953
Alexander has become associatedclose to 1952 totals.
Dollar
As much as we would now like
ment, except for seasonal consid¬ volume of all
with W. E. Hutton &
branches of retail to predict an
Co., 75 Fed¬
"Eisenhower Boom" agewise (18.2%) in reflection of
erations, should hold close to pres¬ trade can be
the lower coupon rates on serial eral Street.
expected to decline —to rise
ent figures, well above 62,000,000.
immediately above the
moderately.
It is estimated that
site of the "Truman Boom"—we equipments.
Later in the year, if our expected
by the end of this year aggregate
decline in the physical volume of
Grocery Chains — Grocery sales simply cannot find sufficient new
interest charges will be down to
business develops, some rise in should average close to the totals economic stimuli, upon which to
base such a forecast.
$24,794,376, including contingent
Rather, we
unemployment can be anticipated. for the year 1952. Lower whole¬
^
interest.
are
thinking in terms of a possible
sale prices, however, should make
National Income
National in¬
The question of the
support to present economic con¬
WASHINGTON, D. C. — The
level
of
for larger profit
margins.
come is expected to level off dur¬
ditions, arising from the intang¬ fixed charges is a particularly im¬ members of District No. 11 of the
Variety Chains—The outlook for ible factors set in motion
ing the coming year, but should
National Association of Securities
by the portant one with respect to this
show
greater resistance to the the complete year is for a sales General's election. But we are not railroad because of the terms of Dealers, Inc., embracing the Dis¬
coming decline than most other picture unchanged to somewhat predicting any new boom to come the debt readjustment
of
Columbia,
plan of trict
Maryland,
year

NASDDisl.ll Elects

To District Committee

—

indicators.

be

an

The

net

result

should

figure for the

average

year

1953, slightly below that for 1952.
Farm Income
be

■can

along

expected

seasonal

first four

'The

—

or

total

fall
1951 "

may

as

to

lines

five

for

Farm income

less favorable.

low the

strengthen

during

months

the

year,

much

as

of

the
1953.

however,

5%

below

1952 level.

Department Stores
the

year

1953

—

should

Totals

for

average

moderately lower than this
Big city stores will have the
difficult

sales

for

maintaining

most

few words,

a

1953:

about

Business

8%

lower

we

will

than

predict
average

the

1952

level.

E. N. Potter &

the

1944.

Prior to

there

contingent interest

set up a capital fund of
the greater of 2*/2% of gross or
$5
was

million, less any charges for de¬
preciation on property other than

E. N. Potter & Co. Formed

year.

time

In

now.

Mail Order—We look for mail¬
order sales to run at least 5% be¬

New

York

Co., members of
Stock

Exchange,

will be formed as of
Dec. 11, with
offices at 65 Broadway, New York

equipment, and a general sinking
fund of $1,740,757 annually. These
permanent funds. In addition,
there were two provisional sink¬

North Carolina and West

have

elected

serve

on

for

a

the

the

Virginia,

following

District

to

Committee

three-year term commencing

next

January 16th:

F.

Grainger

are

Brown

&

Marburg,

Alex.

Sons, Baltimore, Mary¬

ing funds set up. So long as com¬ land;
Edwin B. Horner,
Sco-t,
bined interest charges and guar¬ Horner
& Mason, Lynchburg, Vir
City. Partners are Eliphalet N.
anteed dividends are $22
million,
Potter, Exchange member, gen¬ or
ginia; Glenn E. Anderson, K~~
Carefully weighing the above better.
more, 50% of net income must
eral partner, and Albert P.
factors
Hinck¬
chofer & Arnold
affecting the supply of
Profits Prospects
Associates, Inc.,
go into a sinking fund. When such
ley, limited partner. Mr. Potter
goods and the demand for goods,
Recent wage increases will be
charges are reduced below $22 Raleigh, North Carolina; and W.
is a partner in Potter &
we conclude that, barring the out¬
Gossler. million this
in effect for the full year,
sinking fund will be Olin Nisbet, Jr., Interstate Securi¬
putting
break of a bigger war, the trend
a
maximum of $750,000 annually.
heavier cost pressure on profits.
ties Corp., Charlotte, North Caro¬
of
wholesale
commodity prices With
Fordon Aldinger Adds
productive capacity in¬
Finally, so long as combined in¬
will remain in a basic long-term
terest and guaranteed dividends lina.
(Special to The Financial Chronicle)
creased, price competition will
volumes.

Price Forecast

■downtrend.

branch

At the moment

we

Those

with

operations

suburban

should

fare

see

rise tremendously.
are at, or above, $20 million
any
DETROIT, Mich.—Roy R. Car¬
wide-open break. At the same
You can expect a concentrated penter is
dividends paid on any
class of
now
affiliated with
time, it should be recogtiized that
stock must be matched by a simi¬
management drive for cost cutting. Fordon, Aldinger &.
Co., Penobscot
;some prices have declined
sharply There is plenty of room for this
lar sinking fund.
Building, members of the New
in 1952. A temporary recovery in
in most businesses and it should York
The
and
Detroit Stock
magnitude
of
these
re¬
Ex¬
many
price
groups
is
entirely help to keep the decline in
profits changes.
quirements is obvious when it is
probable
during
the
next
few small.
Also, lower material costs
realized that the suralus sinking
months and perhaps during early
will help some industries.
fund alone out of 1951 earnings
1953.
*:
Godfrey B. Simonds
One of the biggest cushions un¬
was close to $6 million.
This por¬
Although-wholesale prices should der falling profits will be the cur¬
Godfrey
B.
Simonds,
Provi¬ tion may well top $10 million on
end the year 1953 lower than they rent
very high tax rates. As prof¬ dence, R. I., resident partner of the basis of estimated 1952 earn¬
begin it, there will be many di¬ its slide, Uncle Sam will share the G. H. Walker & Co., passed away
ings. Sinking fund payments to

The

above

named

no

-

vergent
gr

m

eL.c.

modity

movements in

*
w—

1(j ie watch

Airg

groups-

individual
on

influ-

particular

com¬

during; the




year

heaviest

Nov.

excess

Simonds

loss.
Expiration of the
profits tax will also be
beneficial to certain-industries and
to

-

certain

companies.

26,

at

of

the

was

Investment

America.

a

age

of

48.

governor

Bankers

of

Mr.
the

Association

match
come

to

the

1952

$4,277,000.

dividends

will

All told, then,

and,including the permanent gen¬
eral sinking fund, such require¬

individuals

succeed to the offices held

by the

following whose terms expire
the

Edward
Bros.

land;

op

date:

same

J.

Armstrong,

Stein

&

Boyce, Baltimore, Mary¬
W. Erskine Buford, W: F

Buford

&

Co.,

Charlottesville,

Virginia; William D. Croom, Fi st
Securities Corp., Durham, North
Carolina; and Ben S. .VLF
Brown

&

Sons,

North Carolina.

Winston

>

v.

34

The Commercial and Financial Chronicle

(2146)

Continued from page

of information before the effective date of

3

registration

a

statement.

The fact is that in the matter of

Identifying Statements

tive

Information about the issuer,
the securities, and the circumstances of the offering is
contained in the prospectus which must be given to the
Securities Act.

buyer.

.

.

We

of

.

registration statement covering these securities
is not yet effective, No offer to buy or sell the securities
should be made and no offer to purchase the securities will

take

can

the

expressed aim of achieving
reasonably concise and readable,

by this firm."
the SEC states, the purpose of the Securities
widespread dissemination of information
before the effective date of the registration statement, we
are at a loss to understand the many and severe restric¬
tions with which it has surrounded the identifying state¬
as

Act is to achieve

little likelihood that

sale to the public of

a

new

no

The

In

our

issue must

creation of interest

public. It is
securities

in

the

we

them, nor shall
much longer be able to stand

on

our

prices,

the

would ultimately crush

nation

it

as

came

doing

near

in the 1929-32 period.

is

further
be

devaluation

of

still

that

holders

of

bank

policies,

Dollar

our

in¬

deposits,

pensions,

public after

so

long

a

period of

members

Our

newly elected President has promised that he
would attempt to establish a sound dollar, balance the
budget and use the power of the government to avoid
unemployment.
To accomplish all this he must use every available
means
including provision for a free flow of capital into
trade and industry.

been

Dollar

corporation in detail if he

so

business

of the

secure

such

an

of

cost

the

not

have

unions

up

living, the

with those

case

same

is

unorgan¬

our

no economy

can

upwards of costs and
which merely reflects the

fiscal

maladministration

country
tion

its

the

of

but

one

excuse.

at

Rule 132 is divided

generally into required informa¬
tion, optional information and prohibited statements.

is traded

The
contrast

to

information.

the

old

That is not

a

of

the

of

the

of

its

all

less

earth

to

peoples—a

process

focus

but

need

we

progress

review

the

during

the

mankind

of

past half-century in the fields of
production, distribution, transport
and

communications

■

which

has

ated

during that period which,
paying t h e i r labor the

though

highest scale of
achieve

the

cost

to

laudable

cost of production with

a

which

not

slave

labor

needs

be

crease

in

But

permitted
so

find

and

first to balance world trade,
its

volume.

as

base in¬

our

This

only
he achieved by the adoption first
of free exchange, then of free

disappear when the need

once

for

them

It is sheer blindness to peg cur¬

each

other, directly or
one medium, in the

belief

synonymous

price-fixing

to stability. In

is
price

a

system stability is achieved by the
balancing of production with con¬

sumption, of supply with demand.
Price is the balance wheel, the
sure corrective of imbalance, pro¬
vided it is free. Thus, if left alone,
the
in

price

the

of

nation's

a

currency

exchange market is

a

true

reflection of that nation's position
in international trade.

sition-Is

in

balance

If that po¬

the

rate

of

exchange of its currency will be

vested

rate

has
for

in

come

their
to

American

made

as

a

perpetuation.

pass

aid

that
now

matter of

It

demands

being

are

right, while

nations vie with each other

as

to

shall have priority on
American largesse. This, too, must

which
.

stop.
stand

People
on

their

will
own

never

feet if

try

is

to

we con¬

stable.
of

If

exchange

reflect it,

it;

imbalance

in

sets

will

not

the

For such is the function of the

it is

a

price system, and

by the price system that the
world functions and has

modern

its being.

Be it remembered that

price-fixing in any form
subsidies, multiple rates
-

ouotas,
QL

By

gone.

free

shall

safely
the

lower

to

into

adopting

tariffs

be

able

while,

at
time, bringing and main¬

same

taining

them

emulating

and

example
exchange we

trade with the world

our

true balance.

With

dollar

exchange on
foreign currency

free market

the
ma¬

nipulation operating with the dol¬
lar

its

as

base

end, and
banker

will

in

his

to

come

this because

right

an

Central

no

would

senses

dare long accept the risk of ex¬
change. The so-called "dollar gap"
free

also

rate

disappear because the

of

exchange will make
impossible to create dollar deb¬

it

its except at constantly
increasing
costs to the debtor nation whose
own

declining exchange rate will,

the

at

time,

same

exports,

stimulate

its

attract

foreign capital,
and ultimately restore its position
into balance.

It is in that

manner

alone that balance in international
achieved

be

can

and

main¬

to

"give¬

recourse

programs

which

sort

one

or

or

invariably end in

dollar

market

ex¬

exchange
shall

the

on

able

to

price-fixing devices such

scrap

as

we

the International

salvage what
contribution

failure,

to

learn

dollar

be left of

this

in

our

history

at¬

For

affairs.

our

our

self-admitted

concentrate

fiscal

to

be

Monetary Fund,

may

to

and

first time

the

we may
between

differentiate

exchange and dollar cur¬
which to date we have

rency
treated

to

which

if

as

failure

the

are

of

exchange,

instruments

trade,

in¬

of

distinct from

as

which

notes

currency

Our

synonymous.

treat bills

ternational

local

are

in the United States and

currency

nowhere else, has caused the lat¬
ter to
become the tools of tax
evasion
and
hoarding in many
countries, chiefly those of Western
Europe. Thus is it that while pour¬

ing out bounty abroad

on the one
hand, we have undermined for¬
eign governments by aiding and
abetting tax evasion within their

borders.

But

shut

our

eyes

Red

Chinese, busy killing Amer¬
boys in Korea, use our cur¬

ican

notes

rency

of

worse

still,

have

we

to the fact that the

the

as

exchange

chief medium

their

for

foreign

trade.
It

come

may

most

as

Americans

exchange

surprise

a

that

and

here

men

rency

notes

United

abroad
cur¬

held outside the

now

States

to

competent

estimate the volume of dollar

between

at

$8 and

$10 billion. These estimates, which

far

in

dancy of
the

rency

explaining

powers

premiums

over

change

the

redun¬

issue, are based
of attraction of

our note

foreign

for

official

which,

our

rates

for

cur¬

of

seven

ex¬

years

past, have ranged between 8% and
and

well

mium

been

in
our

over

30%. (current pre¬

Paris

13%).

This

contribution

to

has

world

disorder and will also explain the
chronic nature of the so-called
"dollar gap" which, in reality, is
largely imaginary.
We

Americans,

prepared,

have

circumstances
world

the

trustees

more

to

of

although

been

into

leadership.

freedom

alone

but it will also correct

free market in

yet all of

Canada's

on

any
that
such

the

of

at

go

Fallacy of "Pegged Currencies"

through

correctives

controls,

can

markets.

rencies to

those

the objectives

various

that

ways

relations,

must

to

imbalance

perpetuate

trade

of

products

compete.

can

not

and

world

the

even

must

create

in history,

wages

away programs must not be per¬
mitted further to develop interests

our




saddle

taxpayer with the

their objectives,
have served their purpose, Give¬

ten¬

objective view required liberality in the dissemination

life.

by facilitating the inter¬
change of goods and services now
impeded by tariffs, by quotas, by
controls
of
every
kind.
Lendlease, Marshall Plan,E.C.A., M.S.P.,

finan¬

reaction. It is regrettable that it has
taken almost two decades to
gain so slight an improvement
when it should have been apparent at the
very outset that

economic

realized

ads, reflect this optional
the good.

improvement there has been
dency on the part of some of the underwriters and
cial publicists to
praise the rule.

the

peoples of the earth when
that objective could the better be

tombstone

This is all to

our

accepting

raising the living standards of

all

about

go

perhaps, yet more
rapid than is generally imagined?
To
put that problem in proper

budgetary

the

identifying statements recently published, in

Because of this

an

of

State

and
of

aim

must

we

in and year out by

rational

not

American

over-the-counter, etc., etc.
new

is

It

16 subdivisions

end

and

year

recognizing

heading of optional information there are
including among others: whether, in
the opinion*of counsel, the
security is a legal investment
for fiduciaries, banks and insurance
companies; whether,
in the opinion of
counsel, the security is exempt from
specified taxation; whether the issue represents new
financing or a refunding operation; whether the security

some

Federal

limitations

we

standards

then with balance

fiscal
the stabili¬

(1)

be:

this

To

surpluses

Under the

slow

means

of our price structure at
existing levels, and (2) the sys¬
tematic reduction of our public
debts.

shall

areas

benefit

we

zation

they will impede
the Presidential plan for a balanced
budget and a sound
dollar without unemployment.

living

in

Twin Objectives

continue

then

developed
the

of life no mat¬

policy should

the extent that these

the

these

The twin objectives of our

Commission'.

How

developing trade throughout the
and, in that manner, raise

in peace time
accept deficit

the

all

form

tention

world

as a way

ter what

capital into trade
and industry is being constantly retarded
by the unreal
restrictions implanted upon the securities
industry by the

their

on

future.

to

may

people

financing

It must be clear that the free flow of

deteriora¬
is

currency

the

of

No government worthy

name

the

ask

amendment?

the

of which

of

people while

ary, and which was given added
impulse by the growth and spread
of credit. The giant combines cre¬

event

prices

symptom.

continue

we

population.

the majority of

justment

an

if
our

been nothing short of revolution¬

long withstand the periodic read¬

issuer

feet

own

which, together, make

But in any

amendment
Securities Acts, then why hasn't the Commission
require

the

by escalator clauses geared

the

ized groups

chooses?

If it is claimed that this would

labor

of

govern¬

suffered

periodically

tected
to

merchant gives an opinion of his wares,
why shouldn't an underwriter in an identifying statement
give his view of the merits of the security which he of¬
of

have

—

readjusted to
the devaluation of the Dollar, and
the future earnings of many pro¬

any

character

including

—

bonds

ment

support

increasing the mortgage

stopped. During the past decade

the

surance

to

tax-wise to bleed

important

more

perpetua¬
hand,; inte¬
free exchange rate are

a

found

With

of

existence.

To

be

which

their

other

embittered international relations.

tinue

its failure to educate the

used its efforts to

a

creasing in inverse ratio to the fall

approximate equivalent of a 50%
capital tax. While the wages of

the

grated in
to

in

the

On

free

obligations

to

vested

terests

tion.

tained without

dispute this. Indeed, if it were true, then the Commission
should be on the defensive, for there can be no excuse for

discuss the

as

Free Exchange and Free Markets

objective view

industry is trying to, and is obligated

It

and

observation that

our

all

are

rigid impediments in the path of
trade; that once adopted they are
difficult of repeal because their
very existence creates special in¬

away"

Through skillful propaganda, the Commission has de¬
veloped a belief that, \yith respect to the purchase and sale
of securities, the public generally is an ignoramus. We

fers

change and other controls

another

rities.

as

lying

are

.

rise to this whole unsavory goulash.
A merchandising job is a selling job whether the
product be clothes, machinery, apples, or, yes, secu¬

Just

industry

Continued from first page

to, do which has given
the

Thursday, December 4, 1952

.

trade

view it is the failure to take an

of what the securities

the securities

on

industry are honest and
upright individuals. Their selling jobs, except insofar as
impeded by the SEC, compare favorably with those of
other merchants and they should be allowed much the
same privileges in their methods.

prior to the consummation of such sale,

old "tombstone ad."

attitude which is founded

those

regulation makes little real advance over the

new

an

in wait to fleece the

accompanied by the delivery of a prospectus, and
therefore the buyer will have all the required informa¬
tion before him

in

sense

belief that those in

group,

be

why does the Commission make the
in the instant security so difficult?

will emerge.

.

would

There is

the

sensible prospectus

a

ment.
every

prospec¬

tuses which are
we have
given up all hope. The Commission has been toying with
that subject and
regulating and re-regulating it intermin¬
ably. Still the modern prospectus is ghastly. Its set-up is
hardly calculated to encourage investor reading. Until the
SEC adopts a more realistic view
concerning its duty to
the public, and revises its
present thinking, there seems

statement has become
effective. The publication of this notice is no assurance
that the proposed offering will be made or as to the amount
of securities, if any, that will be available for distribution

Since

comfort from the enunciated credo

some

As to the SEC's

accepted until the registration

If,

laws, the securities

incoming Administration that there is too much
government by administrative agencies in business, and
hope for relief after the inauguration.

"The

be

sensible and objec¬

a

the securities

of

industry has been so starved for bread that the yielding
of the slightest crumb seems like a windfall.
There is a real hunger for fairness and understanding
by the Securities and Exchange Commission in its work.

And the Prospectus
the Federal

administration

.

of

the

we are

institutions of
we

than lip service.

musrt

The

pay

sooner

acquire "know-how" in money

we

and

exchange, and t^e

recognize that,

a

free

price system is the
of

by

position

a

As such

which

ill-

thrust

freedom,

the

sooner we

functioning

very

essence

for

selves and for the vr-M. •

our¬

Volume

176

Number 5174

The Commercial and Financial Chronicle

...

(2147)

The following statistical tabulations

Indications of Current

latest week

Business Activity

week
Latest

Indicated

steel

Equivalent
Steel

operations

ipercent

AMERICAN PETROLEUM
42

and

gallons

Crude

Gasoline

(net

Dec.

7

—

Ago

"106.1

average

Distillate fuel

oil

fuel

ASSOCIATION

oil

Ago

105.9

103.6

OF

7

2,191,000

"2,203,000

2,200,000

2,071,000

6,662,550

6,621,800

6,537,700

6,232,176

Nov. 22

(bbls.)

117,076,000

7,096,000

6,938,000

Nov. 22

23,842,000

23,973,000

22,301,000

( millions

SERIES

OF

Month

-

2,472,000

2,862,000

10,857.000

10,898,000

2,493,000
10,531,000

8,885,000

8.651,000

8,497,000

9,305,00C

123,885,000

32,086,000*)

123,313,000

9,428,000

120,767,000

of

of

32.247,000

34,212,000

CIVIL

119.148,000

121,286,000

52,081,000

51,942,000

54,101,000

CONSTRUCTION

Nov. 22

of

cars)

810,922

760,741

711,447

698,403

Nov. 22

__

828,723

699,721

653,909

—

of

omitted);

construction

654,691

GINNING

Running

bales

November

(DEPT.

OF

U.

S.

Private

construction

(exclusive of

Nov. 27

State

and

COAL

OUTPUT

(U.

coal

S.

BUREAU

and

lignite

Pennsylvania anthracite

*

Beehive

coke

FAILURES

(tons)

AGE

INDEX—FEDERAL

AVERAGE

19,440,000

Sales

(average
(average

10,425,000

"10,455,000

2,150,000

10,160,000

985,000

865,000

809,000

115,966,000

147,494,000

63,375,000

917,000

Nov. 22

90,400

,

"81,000

Nov. 22

134

"130

—

RESERVE

AND

INDUSTRIAL)

Electrolytic

DUN

OI

123

All

7,701,176

7,971,149

7,752,925

7,445,69?

Nov. 27

,127

167

136

148

(New

(New

Lead

(St.

Zinc

4.376c

-^-Nov. 25
0£a__Nov. 25

$55.26

York)

(East

$42.00

$42.00

$42.00

$42.0(

Nov. 26

24.200c

24.200c

24.200c

24.200(

Nov. 26

34.950c

34.575c

34.300c

27.425<

Nov. 26

121.500c

121.500c

121.500c

St.

14.000c

14.500c

13.500c

19.000

Nov. 26

-

13.800c

14.300c

13.300c

18.800(

—

:

.—

at

.

at

_

Louisi

at

MOODY'S BOND PRICES

Nov. 26

—

DAILY

4.376c

4.131t

Payroll

$55.26

$55.26

$52.7.

All

12.500c

U.

S.

12.500c

13.000c

AVERAGE

Average
Aaa.

2

19.500.

96.82

96.94

97.12

96.97

109.79

,109.60

109.06

108.88

113.89

113.70

112.93

113.70

112.37

112.19

111.81

Durable

109.06

108.88

108.52

107.80

Durable

103.97

103.80

103.30

102.63

Nondurable

106.92

106.74

106.21

104.66

Dec.

2

109.79

109.79

109.24

108.88

2

112.37

112.19

112.00

113.50

Dec.

2

2.72

2.71

2.70

2.70

Dec.

2

3.18

3.19

Dec.

2

2.96

2.97

—.

3.25

NATIONAL
11

Orders

received

(tons)

Percentage

of

Unfilled

LOT

DEALERS
sales

Number

.

Dollar

3.21

3.04

3.05

3.06

406.8

408.6

459.8

144,151

242,598

184,691

_/Nov. 22

98

96

97

Nov. 22

502,963

548,900

472,987

Nov. 28

109.24

109.44

109.39

115.52

PRICE

by dealers

of

(customers'

N.

ON

STOCK

Y.

22,637

Nov.

26,290

779,475
$34,676,021

732,341

of

sales

Round-lot
'

shares—Total

of

T

Round-lot

Short

„.

sales

sales

ROUND-LOT

''

.

i.

STOCK

NEW

Short

Total

OF

ACCOUNT

on

the

,T

271,040

348,650

304,250

263.070

Other

320.610

5,606,060

6,540,840

dollars):

$23,186

826,350

585,090

527,680

==

SERIES

20,525

"$43,107

$42,067

"21,873

20,892

$29,419,000

$29,293,000

$28,288,000

$273.3

"$269.6

$257.3

184.3

"182.5

172.1

180.8

"179.0

168.8

80.7

"78.7

75.7

49.1

"49.4

46.3

21.7

21.5

20.4

32.8

"32.9

29.7

3.7

3.7

$21,542

September

30

(000's

omitted)

OF

COMMERCE)—Month

September (in billions):
income

personal
and

employer

salary

receipts, total-—
disbursement

Commodity producing industries
Distributing industries
Service

industries

__-

__.

Government

Less

employee

contributions

for

social

Other

labor

Personal

income

interest

income

and

91,680

457,260

414,320

of

21.4

21.0
'

13.3

"13.1

12.4

252.3

"249.4

236.4

RECEIVED

BY

8

873,960

555,140

506,000

705,01C

Nov.

8

153.970

116.350
8,300

118,830

152,320

5,100

17,000

93,500
101,800

141,800

148,100

146,900

165,100

239,495

224,988

262,264

_—

FARMERS

DEPT.

S,

INDEX

—

OF

AGRICUL¬

1941

1909-July,

—

J 00—As

September 15:

All

538,92C

Nov.

farm

products-'

288

295

264

272

240

236

233

234

233

216

428

436

8

36,400

8

160,350

8

196,750

8

260,747

_,

Cotton

_I

423

283
201

182

crops

319
206
229

161

'

Oil-bearing
Meat

239

200

t__.;

Truck

291
*

.

329

Fruit.

Livestock

305

animals

—

288

316

337

349

products

310

309

crops

and

Dairy products
Poultry and eggs
REAL

8

45,050

28,250

24,850

42,650

8

285,075

242,101

263,530

263,040

8

330,125

270.351

288,380

305,690

8

1,241,067

871,498

1,169,614

—Nov.

8

307,430

940,935
134,430

121,630

225.740

Nov.

8

1,098,405

792,861

819,650

950,060

Nov.

8

1,405,835

:_T
—

U.

50.9

Unadjusted-

166,09c

Nov.

—

4.2

51.8

21.4

dividends-

4.5

53.5

income

transfer payments
nonagricultural Income

Total

32?

4.5

rental

and

372

411

307

295

227

225

247

$592,897

$592,065

$445,850

<•

283

-

.—

S.

DEPT.

927,291

ESTATE

AREAS
AND

OF

—Month

941,280

1,175,800

U.

S.

Bank

IN

NONFARM

FEDERAL

of September

SAVINGS

CORPORATION

(000's

omitted):

associations

companies

savings

118,218

banks

.

Miscellaneous

lending

institutions

113*712

227,970

239,129

228,964

—1—

Individuals

313,236
108,285

263,396

103,284

companies^

118,874

316,181

226,194

$1,587,523

trust

and

Mutual

—

INSURANCE

Savings and loan
Insurance

OF"

FINANCING

LOAN

$1,597,783

$1,308,421

$3,545,450

S8.44L450

82,671
209,825
•

198,967

100):
Total
.

———,___Nov. 25-

110.1

110.4

110.3

——-—Nov. 25

101.7

102.&

104.5

_Nov. 25

;

—

products-——-—,—

104.6

105.fr

106.2

99.4

101.1

foods———

Meats- _——2_i——_—_-2-2—
Alt commodities other

"19,908

23,647

Wage

755,030

97,880

8

Nov.

.—

NEW

"$23,200

19,964

Tobacco

225,980

______

___•

figure.

SERIES—

of

grain
Feed grain and hay__

652,980

_ _—„

——————

(1947-49

NEW

(millions

Food

6,861,450

2_—1_1_1_^—2——Nov.

:

$2,256,000

Crops

5,777.400

8

2.1.—____—___

,

Commodity Group—
AH commodities
Processed

171,340

6,056,000

6,243,370

404,060

transactions for account of members—

PRICES.

—

187,370

6,643.500

7,047,560

8

———

sales

WHOLESALE

3

8

Nov.

Total sales

"Revised

127,850

—Nov.

:

Total purchases

-

189,990

—Nov.

___.—1_________

Farm

154,030

——_Nov.

sales

$2,504,000

SALES

$43,151

Proprietors

8

——*——.——-—-Nov.

sales

&

•

Total

floor__

—

sales

LABOR

127,850

Nov.

—Nov.

purchases

Short

v

189,990

____Nov.

—

__

Total round-lot

COMMERCE)

(DEPARTMENT

MEM¬

Total sales

,

154,030

Nov.

__——_____________________J_—_1
initiated

481,000
226,000

IN CIRCULATION—TREASURY DEPT.

PRICES

—

;

—

Other

,,t

144,590
.

—i—Nov.

_•>

<_

Short

,,

INVENTORIES

September

NUMBER —U.

_

.-

sales
sales

OF
of

of

of

DEALERS AND SPECIALISTS:

_—

$l,549v000

4-70,000
440,000

PERSONAL INCOME IN THE UNITED STATES

$20,514,489

TRANSACTIONS

—.___—i—

FOR

$1,594,000

338,000

'

:

YORK

Other transactions initiated off the floor—

.-

489(755

$23,704,017

(SHARES):

——

purchases

Total sales

; $1,824,000
499,000

-4%.--,—
—

Sales

specialists in stocks in which registered—

transactions

Other

.

577,222

$24,215;493

Nov.

sales

Total

: t

THE

—

____

1.491

of October:

7——

TURE—August,

sales

Total sales

■

ON

purchases

Short

Other

568,20.9

$22,128,328

5,43<

sales—

TRANSACTIONS

Other

.

INSURANCE—Month

Total

SALES

1.705

1.546

INSTITUTE

—

Nondurable

151

144,590

__

Transactions of

"V

5,742

Nov. 15

STOCK

BERS, EXCEPT ODD-LOT
Total

10,472

—

sales

Total

3,949

..Nov. 13

shares

Other,

-

.

-«

495,191

.Nov. 15

FOR ACCOUNT OF MEMBERS

-f

582,964

539,063

sales

—

ROUND-LOT

"1.811

1.546

—

insurance

EXCHANGE AND ROUND-LOT

Total

578,681

Nov. 15

______

,

PURCHASES

Durable

17,623

purchases by dealers—

Number

?

543,012

_____

s;ale.s

TOTAL

17,467

dealers—

by

sales

20,336

15

;_____

sales.—

—

Short.

20,34b

-Nov.

Dollar value

Other

167

4ov.15

sales.

Number

20,503

303

Nov. 15

-

20,649

119

19,264

other

sales

2

^

Month

$26,845,662

19,383

—

Customers'

Round-lot

S 1.615

Inventories:

Total

sales———_

other

38.9

"$1,697

1.823

goods

Total

608,024

$32,785,362

$28,623,439

21,292

sales)—

sales

total

15

27,676

648,337

—

(customers'

short

Customers'

40.3

$1,706

goods

MANUFACTURERS'

—As

2—_

shares—Total

41.7

,40.3

_;

MONEY

-Nov. 15

__

Customers'

cf

40L5

"42.0

purchases)-~

share.s__.i_

orders—Customers'

"41.3

42.4

Total

COMMISSION:

—:

:

__

58.00

INDEX—

_—L_—_

EXCHANGE

71.10

62.30

41.5

Industrial

382,247

period

"76.06

omitted):

Group

75

SPECIALISTS

$65.41

77.30

62.30

$2,661,000

LIFE

(000's

(DEPT.

200,915

1_

FOR ODD-LOT ACCOUNT OF ODD-

AND

"$70.09

OF

goods

Ordinary

,

215,183

of

DEPT.

S.

goods

INSURANCE

OF

„

2.98

407.8

243,255

value

Number

LIFE

3.23

2
2

205,897

___1

orders—

of

3.18

248,614

REPORTER

purchases by dealers

Number

3.18

Nov. 22

end

at

of

Number

Odd-lot

2

Nov. 22

:_

EXCHANGE—SECURITIES
Odd-rot

3.59

3.47

:■___

DRUG

STOCK TRANSACTIONS
,

3.55

3.38

_

AVERAGE^ I (HI

tilt!)

3.52

3.35

~

ASSOCIATION:

__

(tons)

AND

3.51

3.34

Dec.

INDEX

activity

orders

PAINT

2

2

Dec.

.

(tons)--

Production

OIL,

3.29

Dec.

:

Group

PAPERBOARD

8,878,000

7,130,000

HOURS—WEEKLY

manufacturing

Durable

3.05
-

Dec.
;___

COMMODITY

16,008,000

"8,292,000

"6,861,000

October:

Hourly earnings—
All manufacturing

2.97

3.07

'<

Dec.

—

Industrials- Group

All

3.23

3.01

3.05

3.23

3.22

„

MOODY'S

112.19

Nondurable

—'

1

"15,153,000

Hours—

AVERAGES:

'

:

128.4

$70.80

AND

of

goods

2

3.04
Baa

105.7

7,113,000

goods

Nondurable

2

1

Railroad Group
Public Utilities

"97.5

"121.1

15,976,000
,

Earnings—
manufacturing

2

■

£22

i

103.9

133.0

Average—100)—

ESTIMATE —U,

_Dec.

Bonds

corporate

5,808,000

8,863,000

LABOR—Month

2

Group
DAILY

7,261,000

5,509,000

Avge.=100)—

;

FACTORY EARNINGS

2

1

YIELD

(1947-49

(1947-49

goods

Dec.

Group

BOND

13,06.9,000

"6,550,000

of

workers)

goods

Nondurable

Dec.

Government

"12,059.000

DEPT.'

manufacturing

Durable

Dec.

MOODY'S

12,846,000

103

number of employees in manufac¬
turing industries—

'

i

,

Industrials

115

7,096,000

Indexes

Dec.

Group

Utilities

110

5,750,000

S.

SERIES—Month

(production

Indexes

Dec.

Baa

Public

130

110

goods

,,

___

Aa
A

116

;

.

manufacturing

All
2

Dec.

:

:

Railroad

124

Weekly
Dec.

corporate

Aaa

108

95

Estimated

AVERAGES:

Government Bonds

Average

114

100

103.000(

Nov. 26

1

at—

Louis)

98

110
105

manufacturing

4.376c

V'

QUOTATIONS):

___-

York)

116

goods

Employment
All

Export refinery at
tin

1947-1949

—

PAYROLLS—U.

manufacturing

All

relinery at

Y.

daily), unadjusted—
daily), seasonally adjusted

AND

Nondurable

___Nov. 25

J.

N.

LABOR—REVISED

Durable

&

—

;

M.

&

OF

Stocks, unadjusted
Stocks, seasonally adjusted-.

copper—

Domestic

Straits

—

1

ton)

(E.

BANK

FEDERAL

AVERAGE—100—Month of October:
(average monthly), unadjusted

EMPLOYMENT

122

Nov. 29

_

(per gross ton)__

PRICES

DISTRICT,

August:

lb.)__

gross

RESERVE

136,500

28,500^

RESERVE

100

—

INC

(per

(per

Scrap steel

S.

78,166,000

129,365,000

ERAL

COMPOSITE PRICES:

Pig iron

U

28,715,000

Nov. 22
_

(COMMERCIAL

Fmisned steel

Lead

33,450,000

$179,341,000

11,187,785

SALES—SECOND FED¬

Sales

Nov. 22

(in 000 kwh.)____„

BRADSTREET,

METAL

43,935,000

$276,859,000

ELECTRIC INSTITUTE:

Electric output

IRON

69,328,000'*\

$269,883,000

MINES):

(tons)

SYSTEM—15)47-41)

.

OF

(tons)

DEPARTMENT STORE SALES

EDISON

76,422,000

._Nov. 27

Bituminous
'

164,746,000
105,137,000

40,426,000

Sales

:

municipal-

Federal

73,876,000

Nov. 27

Public construction

129,149,000

Nov. 27

construction

$203,025,000

101,747

12,277,139

STORE

Nov. 27

284,770

244,068

liuters) prior to

14

DEPARTMENT

386,517

414,309

COMMERCE):

NEWS-RECORD:
Total

638,258

264,599

municipal

$1,024,775

788,004
658,377

151,284

State and

$1,446,381

663,996

415,883

construction

construction

Federal
COTTON

$73,662

EN¬

Month

—

20,113

"$72,714

$1,079,879

CONSTRUCTION

NEWS-RECORD

(000's

S.

Public

ENGINE*.».iVO

—

U.

Private

48,704.00C

$42,067
10,482

9,862

"19,745

$73,377

ENGINEERING

Total

105,693,000

"$43,107

9,927

GINEERING

RAILROADS:

(no.

$43,151

20,299

November

33,936.00C

117,834.000

Nov. 22

at

Ago

Sept.

dollars):

Total

122,105,000

Nov. 22

at

Year

Month

COM-

Retail

22,191,000

2,946,000

Nov. 22

Revenue freight loaded (number of cars)
Revenue freight received from connections
ENGINEERING

NEW

DEPT.

-

of that date:

Previous

6,757,000

Dec. 22

AMERICAN

INVENTORIES

either for the

are

are as

Month
BUSINESS

Wholesale

(bbls.)

(bbls.I

of quotations,

cases

Latest

of

...

<bbls.)

in

or,

Manufacturing
(bbls.

average

1;

(bbls.).

that date,

Year

Nov. 22

output—daily

stills—daily

outpift

Dec.

Residual fuel oil output (bbls.)
_Nov. 22
Stocks at refineries, bulk terminals, in transit, in
pipe lines—
Finished and unfinished,gasoline
(bbls.) at
Nov. 22
Kerosene (bbls.) at
:
Nov. 22

CIVIL

105.5

Month

production and other figures for the

Dates shown in first column

MERCE

tons)

—

Kerosene output (bbls.)
Distillate fuel oil output

Residual

Week

on

INSTITUTE:

condensate

each)

to

runs

capacity)

month ended

to—

ingots and castings

Cr.ude .oil

of

Previous

Week

AMERICAN IRON AND STEEL INSTITUTE:

or

month available.

or

cover

than

farm

Nov. 25

and

foods_

Tilncludes 617,000 barrels of




96.6

—1—Nov. 25

113.0

foreign

crude

runs

113.0

112.4

TREASURY

MARKET

RECT

AND

OF

S.

U.

TRANSACTIONS

GUARANTEED

A.—Month

of

IN

DI¬

SECURITIES

♦

October:
•

Net

sales

Net

purchases

"Revised

;

figures.

'

t
$16,543,000

35

36

The Commercial and Financial Chronicle

(2148)

Continued from page

In the words of Dr. Riefler, Sec¬

16

I

can

the experience up as a
confidence.
The Fed¬

sum

retary of the Federal Open Mar¬
ket

Two Years of
''

three

Fighting Inflation
I recall deposits of

developments expenditure.

important

rebirth

eral Reserve Board has

Committee:

have

shown

"Member

themselves

banks

quite

re¬

sponsive to changes in the magni¬
tude of their borrowing; they have
tended

be

to

with

conservative

of

fidence

the

in

Again

of

Dr.

of

emergence
even

tools

quoting

new

of

its

trade.

Riefler:

Federal

a

con¬

.

Thursday, December 4, 1952

.

business

for

profit and

all. Let

business at

in

are

we

us

not flinch from this.

(3) We must identify
with

welfare

the

work

our

the

of

average

deficit that is financed

a

must

we

always be in business for profit if

"The

deficit,

.

man. This is a political
necessity.
in the first instance by securities
new commitments when
(4) We must at all times pro¬
borrowing at the Reserve which appeal to banks, does not mote the vitality of our flexible
(1) Plant capacity has increased
banks was high, and interest rates necessarily mean that there will
cially in
decentralized economic system.
to a level where we can support
potato
areas.
Farmers accumu¬ in the money markets have re¬ be an expansion of the money
the demands of national defense
(5) We must grasp the emo¬
lated rather fabulous demand de¬ flected this conservatism. In oper¬ supply in excess of the needs of
tionalism of man's political be¬
arid also supply most civilian de¬
posits, and it was a matter of some ating terms, experience so far in¬ the community for cash balances."
havior.
mands. I wonder if it is fully rec¬
concern as to how long those de¬
dicates that
the
Reserve
banks
Foreign
central
banks
have
ognized how much our industrial
An
incident
that
happened
posits
would remain unspent. can again look to the volume of gained a new sense of leadership
plant has grown since the war. These demand
deposits, or tem¬ member bank discounting as a from the actions of the monetary about 400 years ago illustrates our
Here are some rough figures: we
porary
savings, influenced bank guide in judging the timing and authorities in this country. I have position. In the 16th Century, the
laave poured
into investment in
Due de Crillon, one of the great
policies as to cash resources and size of open market operations. this first-hand from presidents of
plant and machinery about $100 investment
maturities.
While
I It means also that discount and central banks who called at the captains of the day, was absent
trillion since the war, most of it in
from a crucial battle. After it had
have not had an opportunity to open
market operations can be Federal Reserve Board office in
the last two years; the capacity
been won, his King,
talk
with
these
bankers about regarded as interrelated and in¬ Washington,* and also from
Henry IV,
the
for
producing machinery and those unnatural demand
wrote him somewhat as follows:
deposits
tegrated
instruments
of
credit writings of financial journals in
chemicals
has doubled; electric
since my return to the northwest,
the larger countries of Europe. "Shame on you brave Crillon. We
generating capacity has increased I assume that a
policy."
large part of the
Finally, the impressive savings to¬ fought at Argives and you were
*75%; petroleum output is up 50%,
Summary
tals point to the fact that the pub¬ not there." Let it not therefore be
deposits was spent in the 1950-51
and steel ingot capacity will soon
In summary, as I look back on
lic has regained its confidence in said that in this great battle we
buying spree.
*e 30% higher than seven years
were absent and unaccounted for*
the history of the past two years, the value of the dollar.
•ago.
A Plea for More Savings Deposits
(2)
Business firms have ac¬
How much better it would be if
Continued from page 15
quired
a
level of inventories
deposits of that sort were placed
vrhich seems satisfactory to them.
in the time deposit category or
Hetaii inventories increased until
invested
in
government
bonds.
the middle of 1951 and have since
Harold
A.
The
fact
that
the
funds were
Hanning, formerly
■declined sharply.
Manufacturing
manager of research and advising,
earning
a
return would make
inventories grew for a somewhat their owner much less anxious to
at
Greene
& Ladd,
New York
Jtonger period, but the growth has
Stock Exchange firm, has become
spend money. Furthermore, the
leveled out in 1952.
When firms
campaign by bankers to encour¬
associated
.stop buying for inventory accum¬
with
age savings would be a healthy few years there will be enough moving picture, "In Our Hands,"
Arnold
ulation, it amounts to a decrease contribution to anti-inflation edu¬
Bernhard &
textbooks in the social science and have been doing pioneer work,
In the demand for raw materials

to have been

.seem

responsible.

this sort in the

agricultural banks respect to

the northwest, espe¬
the range, wheat, and

throughout

their

H. A.

Arnold Bernhard Go,

Some New

cation.

and finished goods.

(3) The public suddenly began
to save.
Their withdrawals from

economic

Qualifications
For Leadership

taught

courses

Manning With

by

our

Perhaps some bankers will not colleges and universities which
welcome expansion in their in¬ will afford a proper perspective of
terest-bearing deposits. To these the foundations of our standard of

and there are many other com¬
panies which should be mentioned

in

Company,

5.
44th

East

kind.

Street,

New

rolling in the right
bankers I would make the recom¬ living. I have seen little evidence direction, but not fast enough. A
recent Brookings Institution study
mendation
that
they encourage that this is now the case, but I
<juite why this occurred. Perhaps purchases of government savings have hopes for the future. If my of economic education will prob¬
the public had bought so much bonds. In
fact, it is my judgment reasoning is sound, then besides ably bear me out at least in part,
merchandise
in
the
feverish that all bankers should get be¬ the need for a
top flight executive but since that report has been is¬
months before that their wants hind the
savings bond program as to uphold the sales end of any busi¬ sued there already seems to have
•were satisfied.
I prefer to think a matter of
public service. The ness and another to take charge of been some improvement.
that the public began to realize
Another admonition
government needs the money, and operations, we now need what I
might be
that we could control prices and the act of
for potential leaders from indus¬
buying savings bonds shall call "The Third Man."
that there would be plenty
of reduces the danger of the funds
try to stand up and fight. They
The question naturally comes up,
floods available. At any rate, the
must
be
being spent for consumer goods.
dedicated. They must
who is The Third Man and what
accumulation of savings had been
have a sense
of mission. Those
I have heard that some bankers should he do? My answer is that
tremendous. In 1951, funds in the
who would destroy American free
hands of insurance companies in¬ are reluctant to sell savings bonds he should be able to sell not the
enterprise or stifle it with taxes
because of the resulting reduction
creased by $9 billion—$5 billion
goods and services of the organi¬
and regulations always seem to
in their deposits. I cannot believe zation of which he is a
for private companies and $4 bil¬
part, but
have,| one common denominator.
that this is true. The story is al¬
lion in the government's insur¬
promote its ideas and ideals or
They have fire in their eyes. They
ance operations.
Savings deposits ways that someone else believes expound its social utility, if you
are
neither
satisfied nor philo¬
that, and not the man that I am wish it more completely defined.
f*rew $2 billion, savings and loan
They
never
seem
to
talking to. As a matter of fact, I He should not be a public rela¬ sophical.
-funds increased by a like amount,
know when to quit. When busi¬
and it is estimated that pension do not believe that over the long tions
man
of
the
conventional
ness executives are
up against this
funds also increased by $2 billion. run bankers will suffer a net loss type, nor should he be exactly a
type of drive, then silence from
in deposits if they sell savings
political adviser. He should cer¬
The flow of income into savings
their side becomes appeasement.
bonds.
The money supply in a
not quite as great in 1952 as in
tainly
supervise
the
in-plant
In
addition
to
standing up for
growing economy must increase
training of employees on subjects
1951, but it is still impressive.
our point of
with the needs of business. Nor¬
view, we must at all
related to the functioning of his
This flow has done two things.
times have robust convictions.
mally every bank shares in this
organization, the industry group
First, properly channeled by the
gradual growth of deposits.
If of which it is a
Now I wish to talk about two
insurance companies and others,
part and the
there is no danger of shrinking
other
words
which
are
entire
economic
good
At has financed plant expansion
system
of the
deposits from the sale of savings United States. He should be will¬ words, but which at times are
without the resort to bank credit.
bonds, then the advantages to the
misunderstood. -1
refer
first
to
Second, it has reduced purchases
ing to speak locally, nationally or
government and to the individual
True
tolerance
is
of consumer goods and thus pro¬
in whatever way desired, on the "tolerance."
and
the anti-inflation
influence
vided the public's solution to in¬
radio, or appear on television, indispensable in the proper work¬
of savings bond purchases should
flation.
write articles for newspapers and ing out of our democracy, but let

York

City,,

analysis

any

Things

this

of

are

savings accounts stopped and in¬
creases
began.
No
one
knows

the bankers of the

make

I

cannot

Ihe

emphasize

too

much

control

of

inflation.

have

I

.self,

regulation

government

-monetary controls become

Thus

essary.
can

do

the

regulation
It

is

al¬

and

unnec¬

public
which make

informed

an

things

job to do.

a

They

point

this

at

have

that

important

very

are

the

ones

who

*

mold

must

the

public's thought
with regard to their savings and
investment
and

other

tions

policies.
forms

of

Advertising
public rela¬

be directed by banks to

can

the

encourage

savings habit

explain why savings

are

and

impor¬

tant.

Savings take
you.

Monetary

Now

where

Policy

do

we

many

forms and I

One
of

of

the

a

few with

most

common

savings

years—and
troublesome

I

in the last 20
should add a very

one

based

on

its per¬

formance—is "savings in the form
of idle demand deposits.
Since
-demand

deposits do not bear in¬

terest, it can only be assumed that
the deposit is kept in the firm's
individual's checking

awaiting

some

account,

rather immediate




magazines and otherwise
himself

wherever

should
be

drop of

a

icy? The voluntary credit restraint

directors
vision

discontinued

were

gress

has

Real

estate

credit

eased

and

lifted.

since

Board

abolished

the
Con¬

them.

regulation

was

then

completely
government security

The

market is

by

and

orderly, but not pegged.

The Treasury has conducted huge

financing operations, both for new
money
and for refunding, and
the Federal Reserve has
uted

support

operations.

ings, there
ers

to

In the

these
case

contrib¬

financing
of refund-

alwrays some hold¬
of maturing securities who do
are

ties offered.
has

The Federal Reserve

stepped in and absorbed this

attrition and later has reduced its

portfolio to
reserves

ing

a

were

system.

point where

no new

end

of

our

in

radio

obtaining

or

and

talent

from

economic

or

reserves

level which

seems

to

is

never

any

trouble

is

laziness.
remember

us

o

tolerance

to

We

all

are

quality,

nice

a

but

word

or's
Harold

let's

fine

it

laxity if they

broadmindedness.

as

Inc. Mr. Hann¬

Manning

Moody's,

and
later
served
as
Vice-President of Thomas Gibson,

Inc.,
the

economic service. During

an

last

with

World

the

ment

War,

Maritime

Board

he

served

Price

Adjust¬
renegotiator.

as

Bache Discussion
Bache
New

&

Co.,

York

members

of

the

Stock

Exchange and
other leading exchanges, have ar¬
ranged
a
timely discussion oa
"What's Ahead for Securities," to.
be held at the firm's offices on
the
on

Central

Pier,

Atlantic

City,,

December 5th at 4 p.m.. Guest

speaker

at

John

B.

Bache

&

the

session

Huhn,
Co.

He

will

will

be

partner

a

of

discuss the

market outlook at length and will
answer

questions from the audi¬

ence.

The session is

part of Bache's

a

overall program setup in response^
to public demand for more in¬

formation

on

the

security markets

be

mistake

not

and

vagueness

a

A.

Invests

Counsel,.

ing
was
at
time Public Utility Editor of

one

With Hill, Richards
(Special to The Financial Chronicle)

LOS

This is

and

firm's

affiliate, Value
Line

admon¬

ished to be broadminded.
likewise

Charge

Accounts
the

newly formed

The second good word is broad-

mindedness.

f

of

tolerant of intolerance.

masquerade

is

let

which

or

Vice-Presi¬

dent in

tolerance

tolerance

not

contrary,

E.

ANGELES,

Driscoll has

Hill

Richards

Calif.—Frank

joined the staff of
&

Co.,

621

South

Spring Street, members of the Los
Angeles and San Francisco Stock

obtaining
Congressmen,
Senators, labor union executives,
college professors or others to up¬

Let's

hold the anti-business side. There

happy word.
Goodwin and prior thereto with
And, finally, any formula for
Maxwell, Marshall & Co.
leadership must be awareness that

are,

of

plenty

course,

of

profes¬

sional economists in and out of the

teaching profession who know the
score,
on

but all too often they stand

the sidelines

and

are

not

suf¬

ficiently vocal. Businessmen could
them

encourage

tactics

and

to

to

stand

change
up

their

for what

they believe.

are

listed

on

with its

principal restraint against unwise
credit expansion.

ness

be

lulled

the New York Stock

HOBSO

(How

system operates)

our

busi¬

and Inland

Steel and Borg Warner with their

into

complacency by

this is 1952 and not 1902.

a

we

cannot

to

be

afford

isolationists

communities.
think.

It

is

We

in

our

later

must

humanize

I

organizations and

we

points

mean:

have

and

own

than

following five

explain what

(1)
to

The

businessmen

as

the

ability

dramatize
our

our

we

live. In other words, our

neighbors.
(2) We must
utility of

our

prove

the

social

endeavors. This does

not deny the fact

that

was

pre¬

viously with Walston, Hoffman

&

With Dean Witter Staff
(Special to The Financial Chronicle)

LOS

ANGELES, Calif.—John A„

Bullard, Jr. has become connected
with Dean Witter &
Co., 632 South

Spring Street. He
with

was

previously

Lester, Ryons & Co.

industry to

all concerned, our employees, our
customers and the community in

which

Exchanges. Mr. Driscoll

Lots of

water has gone over the dam and

point without

fluctuate

dollar mark, and this is today the

get down to hard pan and
analyze the situation rather than

will

I cannot pass this

Exchange'now have some type of
around $500 million. Member bank in-plant training programs. Cer¬
borrowings are around the billion tain companies, such as du Pont
a

it

for

there

true

a

indifference

politico-economic subjects. On the

mentioning the fact that over 20%
of all the companies whose shares
of

member banks have been held at

that

tele¬

finance to uphold their

controversial

on

He

been frus¬

have

programs

trated

business

articulate.

be

ready to debate at the
hat. Too often program

added to the bank¬

Excess

false

a

Furthermore,

he

should

program and consumer credit con¬

Federal Reserve

for

really

and

in the operation of monetary pol¬

trol

express

whenever

and

mistake

not

us

desired. He should know his facts

Today

stand today

not wish to accept the new securi¬

.should like to discuss
forms

Our

first

unnecessary.

right

flankers

or

salesmen.

importance of savings in the

ready referred to the role that it
played in 1951-52 in turning the
price level downward. To the ex¬
tent that the public restrains it-

to

enthusiastic

country

as

we

are

in

King Merritt Adds
(Special to The Financial Chronicle)

LOS

ANGELES, Calif.—Myrtle

I. Patterson is

now

King

Merritt

South

Broadway,

&

affiliated with

Co.,

Inc.,

1151
.

'

Volume

176

Number 5174

.

.

The Commercial and Financial Chronicle

.

(2149)

Continued, jrom page 5

Grain

markets

The State of Trade and

Industry

net tons of scrap on hand.
Now they have 6.8 million.
ducers' ovens there now are 2.8 million net tons
of coke.
ago there were

At pro¬
A year

only 1.7 million.

While there are 51 million net tons of iron ore
at furnaces
and lower lake docks
now, compared with 54.9 million a year ago,
the lakes shipping season is not
quite over

yet, and rail shipments
supplement the ore pile.
Even with the
increased consumption of the expanded blast
furance capacity it
is believed there will be
enough ore to carry through until the
lakes shipping season reopens next
spring, continues this trade

during the winter

More and more this expansion is
being accepted as realistic¬
ally in line with the needs.
Ever since the expansion was
pro¬
jected there has been much debate over whether or not it's
too big.

magazine

Bethlehem
tional

product

industrial
of

lem

if

economic

industry

from

Homer,

President,

accept the gross na¬
Reserve Board index of
we

Federal

reflective

excessive."

of

the

country's

The

are

rate
that

essentially conservative, he I believes.
in capacity do become
necessary,
bring some downward fluctuations in

may

to

time.

How

much

of

drop the steel

a

high as they
Steel, says Mr.
as

Bethlehem

are

now

as

American

Iron

and

Steel

Institute

has

announced

that

2,200,000 tons, while
estimated

output

grain

a

was

shipments

and

previous

A month ago output stood at

105.9%,

or

when the capacity was smaller the
2,071,000 tons with the rate at 103.6%.

year ago

Holiday Week

rains.

recent

further

was

Canadian

Tomorrow's

and more favorable
Drought conditions,

the

on

interest

in

centered

in

flour to

the

this

to

Sales of

country.

week.

47,000,000 during the

Warehouse

stocks

on
=

no

futures

spot

developed

market

a

of

remained

declined

cocoa

tight with virtually

raw sugar market was
mostly steady with the spot price
nominally held at 6.50 cents, duty paid.
Lard prices moved
downward, influenced by further declines in hog values as the

result of liberal receipts and

prices in five
Cotton

were

weak at lowest

movements

mixed

were

last

week.

Futures

showed

irregular net changes while spot markets closed slightly
Weakness in the nearby options was
largely due to liquidation in the December contract.
lower than the week before.

Other

Korea,

bearish

included

renewed

export business

and

talk

of

weakness

peace

in

in

outside

Mill

price fixing and

declines.

short covering

Sentiment

was

October

which

for

been

anticipated.

also

helped to cushion the
by the official consumption
slightly larger figure than
the daily rate of consumption

aided

showed

(which included the Thanksgiving Holiday)
below that of the preceding week when
output amounted to 7,971,149,000 kwh. It was 225,483,000
kwh., or
3.0% above the total output for the week ended Dec.
1, 1951, and
984,903,000 kwh. in excess of the output reported for the corres¬

kwh.

ponding period two years ago.
Car

However,

a

Last week I suggested that
was close to the time when

it

only a paring of all hold¬
ings should be started, but it
also the

was

the

Since then the market

has advanced

Loadings of

freight for the week ended Nov. 22, 1952,
according to the Association of American
Railroads, representing a decrease of 17,801 cars, or 2.1% below
810,922

revenue

cars,

the preceding week.

The

week's

total

represented

increase

an

of

99,475

cars

or

14% above the corresponding week a year ago, which included the
Thanksgiving Holiday, and an increase of 109,371 cars, or 15.6%
above

the

corresponding week in

1950, which also included the

holiday.

United States Auto Output Shows 10% Decline
Below Previous Week
Passenger
fell

10%

3%

for

under

production

car

the

the

level

like

of

week

the
a

in

the

United

previous

year

week,

States

and

last

week,

and
Nov.

to

266,100
14

year

a

to

rose

Loan entries during the week
bales, from 64,200 a week earlier.

ago.

72,600

total entries for the

through mid-November

season

238,800 bales.

close

was

to

ago.

It aggregated

87,088 cars compared with 97,172 cars (revised)
in the previous week, and 89,762 cars in the
like week a year ago,
according to "Ward's Automotive Reports."

in its final essence was
going
higher again.
But despite this and other

theories

the dangers of a
reaction, instead of les¬

ended

increasing emphasis on the approach of Christmas in
promotions helped to boost buying slightly in the period
on
Wednesday of last week. Merchants continued to have

larger

receipts

much

was

week

than

a

ago.

year

brisk

more

a

year

ago

Although Christmas shopping
when Thanksgiving occurred

earlier, the extra shopping day this
record

new

in the

volume

a

year

was

prevailed in

shoppers

purchase

Winter

displayed

coats

discernible

a

suits.

and

disinclination

There

substantial

were

The purchasing of shoes remained

earlier.

year

rises

in

food

buying last

week

as

housewives prepared the holiday festive fare.

Turkeys were more
prices down moderately
from last year.
However, some specialties, particularly cran¬
berries and baked goods, were more expensive than last
year.
plentiful

than

Housewives

2,790 trucks in the comparable 1951 week.

year

ago

As

before

ever

with

spent

palpably more for food than they did a
when the turkey left-overs appeared in various guises.

buyers placed

many

Commercial and industrial failures declined in the
holidayshortened week ended Nov. 27 to 127 from 167 in the
preceding

rise.

week, Dun & Bradstreet, Inc., reports. This drop brought casual¬
below last year's total of 148 for the
comparable week, as

inventories

well
as

as

below

many

the

160

businesses

which

failed

as

occurred

in

in

pre-war

1950.

1939

Only
when

one-half
264

to

were

Department store sales

Wholesale Food Price Index Continues to Fall

the

Commodity Price Index Holds

its downward

pared with

a

year ago.

the

course,




»•••<■-•

of

from
no

1951.

the

level

change

week

as

taken from

ended

Nov. 22,
preceding week.
In
reported from that of the

of

was

the

the

For the four weeks

ended

Nov.

preceding week

daily

wholesale

•

v r-

...

v

com¬

.

.

a

that of

reduction in trade volume of about 20% com¬
year ago, according to trade observers.

a

According to the Federal Reserve Board's index, department
store sales in New York City for the
weekly period ended Nov.
22, 1952, increased 2% above the like period of last year.
In the

to

modity price index, compiled by Dun & Bradstreet, Inc., touched
a new low for more than two
years, last \veek> The index closed
at 283.90 on
Nov. 25, comparing with 284.38 a week
earlier,
and with 311.87

week

giving Holiday by

use,

Downward Course
Continuing

country-wide basis,

Retail trade in New York last week suffered from the Thanks¬

sum total of the price per
pound of
and its chief function is to show the gen¬
of food prices at the wholesale level.

Wholesale

a

a

decline of 5%

similar
*

week

1952,

decrease of 5%

a

Nov. 22,
r

of

was

reported from that of the

1951, while for the four weeks ended Nov. 22,
was

recorded.

For the period Jan.

1 to

1952, volume declined 8% under the like period of the

preceding year.

as

accom¬

an

the

reasons

are

for

Or, rather if 1
so

I'd

they're

far-fetched

rather not mention

here.

them

I

prefer to accept the
more
widely held belief
that Christmas sales will
givedepartment stores one of their
best

industry, con¬
heavy, is heading
and bigger
earnings,

seasons;

and

sumer

for better

periods and with the watering;
down of EPT, even the mar¬
ginal producers will have a
big 1953.
But

if

I

still can't

accept all this, I

see

the market

flecting all

these

events

than

more

above

has

re¬

coming
The

once.

become

general

knowledge. Because it has be¬
general knowledge you
can
be virtually certain that
the market has
already antic¬
ipated it.
"
come

I

don't

you'll

22, 1952,
sales reflected a decline of 1%.
For the period Jan. 1 to Nov. 22,
1952, department store sales registered a drop of 1% below the
like period of the preceding year.

The index represents the
trend

increased 9%
previous week

similar

on

Reserve Board's ihdex for

1952,

corresponding 1951 level of $6.71.
general

Federal

the

before, bringing
the current figure to a new 1952 low and the lowest since
July
4, 1950 when it stood at $6.19. The high for this year was $6.70 on
Aug. 26 and Sept. 2. The lastest index shows a drop of 7.2% from

eral

during recent months, the total dollar volume of whole¬
discernibly higher than a year ago. Retailers'
mounted steadily as most merchants looked forward
new high
mark in Christmas shopping.
While most items
readily available, some delays were reported in the deliv¬

eries of apparel and household textiles.

Continued easiness in foods brought a further decline in the
Dun & Bradstreet wholesale food
price index last week.
The
Nov. 25 number fell to $6.23, from $6.27 the week

31 foods in

a

were

recorded.

the

As

sale trade remained

ties

accepted

faintest idea.

retail

hurried re-orders for holiday mer¬
chandise and others prepared for the Spring
selling season, the
volume of trading in the nation's wholesale markets continued to

Business Failures Turn Downward in
Holiday Week

board

have,

to

Particularly

popular were
women's medium-to-better grade dresses and men's casual cloth¬
ing.
Accessories, haberdashery, and piece goods were in wider
a

became

the

this distribution I haven't the

More apparel was sold than in either the preceding week or
similar week a year before.
As mild weather

parts

300

in

esti¬

was

unchanged to 4%
higher than a year ago. Regional estimates varied from the com¬
parable 1951 levels by the following percentages: New England
—3 to +1; East —2 to +2; South and Pacific Coast
+2 to +6;
Southwest -f3 to -j-7; Midwest and Northwest 0 to
+4.
This
was the eighth successive month in which retail trade
topped the
year ago level.

Total

Canadian plants turned out 3,430 cars and
3,295 trucks against
3,180 cars and 2,513 trucks in the prior week and 4,347 cars and

came

What

The total dollar volume of retail trade in the week
mated by Dun & Bradstreet, Inc., to be from

of

Yet while this talk be¬

rooms.

ticipated by most merchants.

many

talk

common

an¬

enabled retailers

shopping

the

quite

increase.

to

Industrials hit 285

plished fact, I saw signs of a
major distribution graduallystepping up.

year ago.

Christmas

of

Dow

and

The
retail

seemed

The

Christmas

demand than in recent weeks.

output for the past week was made up of 87,088 cars
23,887 trucks built in the United States, against 97,172 cars
and 26,359 trucks the previous week and
89,762 cars and 23,063
trucks in the comparable period a year
ago.

sening,

Slightly Under Stimulus of
Buying

'

well above

and

and!

more

day it managed to
make a new high.
According to the oldest
market theory, the Dow, this

severe

Trade Volume Rises

the
week

some

other

meant that the market has re¬

A

totaled

time to convert

previous half holdings to

confirmed its bull status and

at 37,000
bales, still showed a contraseasonal decline
37,800 in September. The average daily use for October a
year ago was 36,600 bales.
Sales activity in the ten spot markets
last week increased to
314,000 bales, from 273,200 the previous

to maintain their volume above that of

Week

to

from

a

Loadings Decline 2.1% Below Previous

caution

jump right in

for October

The current total

269,973,000

throw

again.

and power

was

forget all the previous

the winds and

the

markets.

had

tion to

warnings,

cash.

influences

continued slow

report

tinue to boil while
you are out
There's all the tempta¬

not

years.

price

nothing so irritat¬
watching a market con¬

as

of it.

sharply lower wholesale pork prices.

slightly firmer, while lambs

were

ing

to

domestic

WHYTEsJ

By WALTER

There's

steadier undertone

was

Steers

Says—

last year.

week

same

37,987 bags, from 43,644
earlier, and compared with 124,250 bags a year ago.
slightly firmer on somewhat better demand.
The

week

a

Cocoa

The

Whyte

day, against 50,000,000 the

offerings, and prices nominally lower than the week previous.

no

Walter

Chicago Board of Trade -last

per

buying at "current prices. Activity at mid-week was
the sale of 100,000
hundredweight of bakery grade

Jamaica.

past

Markets

depressed by reports of sub¬

oats

55,000,000 bushels

week, and

This brought

The amount of electric energy distributed
by the electric light
industry for the week ended Nov. 29, 1952, was esti¬
mated
at
7,701,176,000 kwh., according to the Edison Electric
Institute.

of

soybean futures

ended

Electric Output Eases in

of

Trading in hard wheat bakery flours last week continued
very limited scale as bakers and jobbers showed little or

a

the

operating rate of steel companies having 93% of the
steelmaking
capacity for the entire industry will be at an average of
105.5% of
capacity for the week beginning Dec. 1, 1952, equivalent to
2,191,000 tons of ingots and steel for
castings.
In the week starting
Nov. 24, the rate was 106.1% (revised) of
capacity and actual out¬
put totaled 2,203,000 tons.

The oats market

week averaged

Homer,

well

profitwise at 85 to 90% of capacity as
doing at full capacity, concludes "Steel."

The

belt.

stantial

approach to the prob¬

been

question.

do

can

B.

proposals

peace

result

however, still prevail in the major part of the hard Winter wheat

increases

time

recurring

a

A.

stand with operating costs

can

believes it

that

the

as

with most grains showing
Principal bearish influences were

the week.

renewed

over

news

Coffee

requirements, the indications

now

further

the

being

as

increased

conditions

production
been

and

expansion has

Even

it is

index

and

out

Co., contends that, "if

capacity is not
of

points

production

growth

steel

Steel

crop

can

weekly.

"Steel"

uncertainty

irregular

were

moderate losses for

37

have

you'll

that

somewhat

the

I

rise

highs. As
285

stocks

will go-

carry

them

their recent 285

matter of fact, it

a

begins to look like the
figure

may

well be the

high for the current
[The

views

article do

time

long
before

doubt, however,,

will

much above

even

wait

higher before they

turn down.

if

to

how

the next decline. It

see

be

may

know

not

coincide

move.

expressed

in

necessarily at
with

those

this
any

of the
They are presented
those of the author only. 1
Chronicle.

38

The Commercial and Financial Chronicle

(2150)

.

.

Thursday, December 4, 1952

.

if INDICATES

Securities Now in

December

expire on Dec. 16. Price — $11.50
Proceeds—To increase working capital. Un¬
derwriters—American
Securities Corp. and Hirsch &

4,

Bonds

Co

(Bids

Noel & Co,

Horhblower &

December

1952

8,

11

Standard Coil Products Co., Inc.
State

Price—$1

share.

per

For advances to Anchor Slide Fastener

owned

Proceeds—

Corp.,

a

Eberstadt

(F.

wholly-

&

Co., New York.

(Paul

Kimball

C,

»Beaver Lodge Oil Corp., Dallas,
Nov. 24

(Bids

(Teden

New England

Oils

common

$5)

to

be

offered

stockholders.

&

first for

subscription

Price—To

stockholders, $10 per
share, and to public, $11 per share. Proceeds—For work¬
ing capital. Underwriter—Lee Higginson Corp., New
York. Offering—Now being made.

December

500 of outstanding notes and for
drilling expenses and
working capital.
Underwriters
Dallas Rupe & Son.
Dallas, Texas; Carl M. Loeb, Rhoades & Co., New York;
and Straus, Blosser &
McDowell, Chicago, 111. Offering
—Postponed until after Jan. 1, 1953.

Canadian Prospect Ltd., Calgary, Alta., Canada

Nov. 24 filed 303,595 shares of common stock

Sulphur

&

Co., New York, for an undetermined number of shares;
balance through a Canadian underwriter to be named
later. Offering—Expected late in December.

(White,

Consolidated

16,

Engineering Co
(Blyth & Co.,

Franklin

Stores

Inc.)*

.——Common *
:
f '
•
i'
' if

Corp

Fluor

'

(William R.

Staats

&

Co.).

(Bids

..Common
: • 7
7 7..'

7

.

EST)

noon

January
New

7,

Co.)

to

be

Bonds

California




'$pec.

11

26,

Common fi
*

'

•'

'

Bonds
v

EST)

11

a.m.

„

•

•.,

at rate

of

one

common

new

stock (par $1)
stockholders of

share for each

four
per

feck (par 10 cents).

..

Price—$125 per share.

Pro-

Dew! Peak Uranium, Ltd.

(Nev.)

/

ceeds-ipfor rehabilitation and-development program.
|||-Suite 839;-60 East 42nd St.. New York 17, N. Y.

Office

underwriting)

1953
CST)

1

common

April m(letter of notification) 600,000 shares of common
stock Mar one cent).- Price—50 cents per share.
Pro-.

Underwriter—Gardner & Co., New York.

.

(J.2/15-19)
100,000 shares of common stock (par 50

^ Diam Stores Corp., New York
Nov.

(Bids

7

Corp.

De^rpark Packing Co., Port Jervis, N. Y.
.7 "
(letter of notification) 235,000 shares of com¬

-

•

.

1953

Iowa-Illinois Gas & Electric Co._

'
Chemical

••eeds^To renav. RFC loan of $41 05fl and for working
capitsS^ Offering—Expected before Oct. 15. 1, / ^7 V7'

Common

January 27,

for

Marcel
mon

'

1953

stockholders—no

and

share.l^roceeds—From sale of stock, together with other
funds^cpected to be obtained through long-term debt,
will
loused for expansion program. Underwriter—Alex.
Brow||t&' Sons, Baltimore, Md.

1953
Co

invited)

a.m.

share,

leld; rights to expire Dec. 16. Price—$34.50

Bonds & Preferred

(Offering to

offices

»on

pfiled 160,666 shares of
Jffered for subscription by

City Power & Light Co
to be

per

$6.50 per share. Proceeds—For working capi¬
Underwriter—Coburn & Middlebrook, Inc., Hartford,

/

Common

Culver Corp.

all

-

to be invited)

Edison

stock for each two shares

common

preferred, -$8.50

Connf||^7-

Co

(Bids

to

tal.

January 14, 1953
Power

January

Private IVires

;i*rice—For

1953

Ohio Power Co

Cleveland

o^/share of

Preferred

(Bids

Chicago

(par $1) to be initially offered to stockholders ai
preferred share for each five shares held

(Bids to be invited)

Consumers

•

comm^,

Ohio Edison Co

and Vice-

.

7;*:

of^ibne

invited)

13,

Manufacturing Co.

and

Common

January

•''•'* ,v;; ■*.-:•«,

."-.7

^r7

Danielson

•

be invited)

January 20,

•

broker^/

.

York, New Haven & Hartford RR
to

stockholder. ' Underwriter — None, 'but
fi& Co., and Thomson & McKinnon may act as

.(^(letter of notification) 5,526 shares of class A
preferr^jd stock (par $5) and 10.000 shares of common

1953

(Bicls

Jfcllmg

the

held.

Kansas

Pittsburgh

(|feir $1). Price—At market (about $6.75 per share).
ProceeiferTa Louis Daitch, Chairman of the Board, who

rate
..Common

&

Underwriter—

•

Nov.

18, 1952

Graves

;

stock

stock

Commonwealth Oil Co
(Gordon

1

f* *'■>*.. Dait&ti Crystal Dairies,- Inc. ;> .7 ;
7/7v '7 7,-v
Nov.letter /of notification) 3,000 shares of common

.

-

(Bids to be invited)

San Francisco

;

-

Equip. Trust Ctfs.,

January 15,

Boston

of notification) $250,000 5% subordinated

f$r expansion:-?and investments.

Hirsch

Corp., Ltd

Southern

Philadelphia

•

17, 1952

New York Central RR

-

debent%es due 1983. Price—At par (in denominations of
$1,000 *$ch). - Proceeds—For working capital, to reduce

is

(Bids

New York

,

....i.Common

December

President

respectively. Underwriters — Van Alstyne,
Noel & Co. and Hornblower &
Weeks, both of New York!
Offering—Expected week of Dec. 8.

iteletter

NOv.

*

i':i

?

-

(Merrill Lynch, Pierce, Fcnner & Beane)

(12/5)

stockholders, Max B. and Sol Cohn, President

v.
•c

debt,

Ohio Edison Co

Nov. 17 filed 100,000 shares of common stock
(par $5).
Price—To be filed by amendment. Proceeds—To two

:

Co., New York, -i'-

Crovyn Finance Co., Inc.
7

V •*' ""

•

1952

(Bids

postponed.

;

(157,304 shares outstanding) at $55 per share.

HodsonY& Co., Inc., New York.«

junior
supplied by

Underwriter—Halsey, Stuart & Co.
Inc., Chicago and New York. Offering — Temporarily

Underwriter—Riter &

.Preferred

December

Proceeds—To pay notes issued to the Ports¬

Corp.

Tube Co.

..^Common

Weld & Co.)

December

Cincinnati Enquirer, Inc.
July 25 filed $2,500,000 of 10-year convertible
debentures due Aug. 1, 1962. Price—To be

:

<

\

Inc. and F. L. Rossmann & Co.)

Western Natural Gas Co

Cjfied by amendment. Proceeds—To

company to be used
for operating expenses to pay for future
exploration and
development of leases, etc. Underwriters—White, Weld

(par $50). Price—To be supplied by amendment. Pro¬
be used, together with other funds, for pur-?

Preference

Co._.^

(Gearhart & Otis,

Undenyjitlers-^

Copperweld Steel Co., Glassport, Pa.- (12/9-10)
shares of cumulative preferred stock

if.

Multicrafters, Inc.—

held; rights will expire
Proceeds—To finance ex¬

chase of at least 80% of common stock of Ohio Seamless^

■

.,

(flat).

ceeds—To

Debentures

;

(Steele & Co.)

^

Nov. 17 filed 70,000

:

by amendment)

COj)

.

pansion program and repay bank loans.
Halsey, Stuart & Co. Inc.

1952

Freightlines, Inc.-—
&

v.-7 V'
;
V
$16,484,300 of 3V4 % convertible debentures due

Price—At par

Dec. 18.

..Common

Allen

7

tures for each 30 shares of stock

.Common :

V

Standard

Com.

underwriting)

Alstyne, Noel & Co.)

named

77

Electric Light & Power Co. of

18, 1967 being offered for subscription by common
stockholders of record Dec. 1 at rate of $100 of deben¬

Beissner & Co.)

be

Underwriter—Blyth &

Dec.

„Preferred

to

Industries.

Baltimore
Nov. 5 filed

1952

15,

Products

Consolidated Gas,

[

*

Corp.

(par 33

cents), of which 235,000 shares are to be issued upon
exercise of share rights and 68,595 shares are to be sold
for account of selling stockholders. Price—To be
sup-

EST)

Corp

(Underwriters

—

•

'

.

Bonds

December

purchase-vacuum equipment business from Kodak's

Co., San Francisco and New York,

Telephone Co

Garrett

by common stockholders at the rate
$100 of bonds for each 28 shares of stock held (for
a
14-day standby). Certain stockholders have waived
their rights. Price—At par." Proceeds—To
repay $1,014,-

To

Distillation

■

12,

-7

■

cents). Price—To be supplied by amendment. Proceeds—.

1952

(Offering to stockholders—no

for subscription

of

Circle Wire & Cable Corp.

New York.

'

RR.
noon

investigation of potential oil areas and for general

if Consolidated Engineering Co.,
7
Pasadena,: Calif. (12/16);;
77_7"; <'-/y-'y i'
Nov. 25 filed 225,000 shares of common stock (par 50

ESTi

Orleans &

(Van

Underwriters—Glore, Forgan*
Corp., both of New York. **> f

Hopwood)

Common

11,

December

Filtrol

Steel

&

England Telephone & Telegraph Co

Byrd Oil Corp., Dallas, Tex.'
Oct. 22 filed $1,750,000 of 10-year 5 %% convertible sink¬
ing fund mortgage bonds due Nov. 1, 1962, to be offered

amendment.

For

Equip. Trust Ctfs.

Diana Stores

one

corporate purposes. Underwriter—Gordon Graves & Co.,

10, 1952

noon

(Moroney,

of

cent). Price—To be supplied by amendment. Proceeds—

Debs.

(Cohu k Co.)

Texas

rate

.

Jaffray

Wabash RR

by

at

• Commonwealth Oil Co., Miami, Fla. (12/18)
Nov. 28 filed 150,000 shares of common stock (par one

ESTi

a.m.

December

New

24

& Co. and The First Boston

Co., Inc.)

and Piper,

(Bids

Nov.

Co.)

Modigliani Glass Fibers, Inc

Northeastern

record

.Preferred

Debentures

Southern Ry.-N'ew

of

For construction program.

Pillsbury Mills, Inc

Ltd.,

• Bryant Chucking Grinder Co., Springfield, Vt.
Nov. 24 Jletter of notification) 20,000 shares of common
(par

&

11

(Lids

Toronto, Canada
Sept 25 filed 1,000,000 shares of common stock (par $1).
Price—Approximately 64.48 cents per share. Proceeds—
To acquire leases and for corporate purposes. Under¬
writer—None. To be named by amendment.

stockholders

prefererd share for each 12 common shares held. Rights
will expire on Dec. 10; Price—$31 per share. Proceeds—

-

_ _ _ _ _____

Telephone & Telegraph
(Bids

Chicago, III.

Co.,

1,155,730

..Common

.

Horizon Oil & Gas Corp

Tex. Underwriter—None.

Bristol

CST)

noon

(Ritcr

(letter of notification) 10,500 shares of common

Dallas. Office—301 Mercantile Commerce Bldg., Dallas 1,

•

Co.)

1952

Copperweld Steel Co.___

(Goldman, Sachs & Co.

(approximately $2.87V2
share). Proceeds—To the Tioga Petroleum Corp. of

filed

shares of $1.40 convertible pre¬
ferred stock (par $25) being offered for subscription by

Tex.

stock (par $1). Price—At market

6

common

•

mouth

&

December 9,

Edison

Commonwealth
Nov.

Common

Chicago, Rock Island & Pacific RR._i__Eq. Tr. Ctfs.

Atlantic Finance Co.,

Spartanburg, S. C.
Nov. 17 (letter of notification) $200,000 of 12-year 6%
subordinated convertible debentures due 1964 (in de¬
nominations of $20 each). Price—At par. Proceeds—For
working capital. Address—P. O. Box 2265 A, Spartan¬
burg, S. C. Underwriters—Citizens Trust Co., Greenwood,
S. C.; and Dargan & Co., Spartanburg, S. C.

•

Debentures

Inc.)

Co.,

subsidiary;

—Israel

stock

&

Securities, Inc

and for other corporate purposes.
Office—115 East 23rd St., New York, N. Y. Underwriter

per

Company intends to offer securities to broker-dealers for

public offering.

EST)

a.m.

stock

•

preferred and one share of common stock. Price—$3
unit. Proceeds — For working capital. Business -7Manufactures electrical equipment.
Underwriter—None.

Weeks) •

Nashville, Chattanooga & St. Louis RR._Eq. Tr. Ctfs.
(Lids

10 cents).

held; rights to expire on Dec. 19. Price—
share. Proceeds—For property additions. Un¬

per

if Anchor Precision Corp., New York
Nov. 25 (letter of notification) 299,930 shares of common
(par

share for each

24 at the rate of one new

Nov.

of

share.

Co., both of New York.

(no par)
stockholders

for subscription by common

(par $1) and 255,000 shares of common stock (no*
par—stated Value $1) to be sold in units of two shares

Common

and

Illuminating Co.

Electric

stock

5, 1952

Circle Wire & Cable Corp..
Alstyne,

ISSUE

if Code Products Corp., Philadelphia, Pa.
Dec. 1 filed 500.000 shares of 6% cumulative preferred

EST)

noon

December

1

REVISED

derwriter—None.

EST)

a.m.

ITEMS

shares

$43.25 per

Equip. Trust Ctfs.
11

New Orleans Terminal

(Van

of record

five

PREVIOUS

557,895 shares of common stock

filed

22

being offered

1952

Great Northern Ry
(Bids

shares held: rights to

per

NEW ISSUE CALENDAR

from registration.

ic American Seaf-Kap Corp.
Nov. 24 (letter of notification) 18,978 shares of common
stock (par $2) being offered to common stockholders of
record Dec. 2 at rate of one new share for each eight

Cleveland

Oct.

convertible

Ventures due. June 30, 1962. Price—At par. Proceedsit)! working capital. Office — Houston, Tex. Under¬
writer—C. K. Pistell & Co., Inc., New York.
The pro¬
posed offering of preferred and common stocks have
been withdrawn

Registration
•

Alipark Finance Co., Inc.
Aug. 28 filed $500,000 of 6% sinking fund

ADDITIONS

SINCE
•

28f-i'iled

cents.) Thrice—To be supplied by amendment. Proceeds—
Bonds & Pfd.

Mr^TBelma
ness— (Shain of
To

Beck Oritt, the selling
women's wearing

stockholder. Busi¬

apparel stores. Under-

writer-tTVan Alstyne, Noel & Co., New York.

Volume 176

Number 5174

.

.

.

The Commercial and Financial Chronicle

39

(2151)
Electronic Devices,
Nov.

18

Inc., Brooklyn, N. Y.

(letter of notification) 3,000,000 shares of

stock

mon

(par

cent). Price—Five cents

one

Proceeds—For equipment

shares,-500: have heen sold to directors and 1,500 are to
be reserved for directors and sales
representatives. Price

com¬

share.

per

—$70

and working capital. Under¬

unit.

per

Proceeds—For

working capital. Under¬

ing
sale

amendment.

writer—None.

writer—Tellier & Co., New York.

International Glass Corp., Beverly Hills, Calif.
(letter of notification) 299,635 shares of com¬
mon
stock, to be issued as follows: To William Hoeppner, 6,985 shares; to stockholders of Soft-Flex Glass

Electronics & Nucleonics, Inc., N. Y.
Nov. 10 (letter of notification) 1,200,000 shares of com¬

Sept. 22

.

stock

(par one cent). Price—25 cents per share.
Proceeds—To expand current operations and for work¬
mon

ing capital.
ment.

Underwriter—To be

.

;

i

furnished

•

by

Fabrics

amend¬

...

crude

oil

oil for

and

Israeli

Israel

Farm

Equipment Acceptance Corp., Peoria, III.
(letter of notification) 2,000 shares of common
stock (par $50). Price — $60 per share. Proceeds — For
working capital. Office—3500 North Adams St., Peoria,

Kwik-Kafe Coffee Processors of
America, Inc.
(letter of notification) 3,000 shares of common
Price—$100 per share. Proceeds—To acquire cer¬

Oct. 30
stock.

it Filtrol Corp.,

tain assets of

Nov.

and for

Los Angeles, Calif. (12/15-19)
shares of common stock (par $1).
Price—To be supplied by amendment. Proceeds—To At¬
filed 653,500

clay cracking

Staats

&

Stores,

" 1Y"''■

■

f.
•

' Y

^General Steel Castings Corp., Granite City/ III.
Nov., 26 (letter of notification) 434 shares of common
stock

(no

,

350,000

shares

of

A

common

None.

L.

I.,

N.

Y.

Underwriter—

'Y/Y

construction

Nov.

Room

Hoosier

Y'

in

$220

per

shares

10 share unit.

each

per

Price—Of

wells.

June

6

Maryland Mines Corp.
filed 200,000 shares of common

Price—At

market

(on

the

San

stock

Francisco

(par $1).

Stock

Ex¬

change). Proceeds—To selling stockholder (Gwendolyn
MacBoyle Betchtold, as executrix of the last will and
testament " of

Francisco.

Errol

Calif.

Bechtold,. deceased).

Office—San

Underwriter—None.,

Witter

of

one

new

share for

with

to be offered in units of

shares

of

common

share of preferred and two
Of remaining 2,000 "Common

one

stock.




&

Co.,

San

each

2%

shares

a

of

authorized

$94,000,000.

to

it

b,y

Underwriter

-

the

—

RFC

Lazard

in

the

Freres

&

'

—

For

new

For expansion of

plant, to repay loans and for working
Underwriter—Cohu & Co., New York.

capital.

Montana Basin Oil Corp. (N. Y.)
Sept. 19 (letter of notification) 300,000 shares of common
stock (par 10 cents).
Price—$1 per share. Proceeds—
For exploration and
development expenses. Underwrites
—Aetna Securities Corp., New York.

Multicrafters,

Inc., Lincolnwood, III. (12/15)
(letter of notification) 99,900 shares of 6% con¬
vertible prior preference stock. Price—At par ($3 per

share.

Proceeds

—

For

machinery and

new

equipment*

Office—3517 Touhy Ave., Lincolnwood, 111. Underwriter
—Steele & Co., New York.

Multiple Dome Oil Co., Salt Lake City, Utah
Sept. 8 (letter of notification) 150,000 shares of common
stock.

Price—At market (approximately 10 cents per
share). Proceeds—To George W. Snyder, President. Un¬
derwriter—Greenfield & Co., Inc., New York.

it Mutual Investment Fund, Inc., New York
Dec. 1 filed 221,754 shares of capital stock (par $1). Price
—At market.

Office — 532 Security Bldg.,
Underwriter—Weber-Millican Co., New

Marsh Steel

Corp., North Kansas City, Mo.
27 filed $500,000 of 5%
debentures, series A, due
$50,000 annually from Nov. 1, 1953 to Nov. 1, 1962, inclu¬
For

Price—At

100%

working capital.

of Lincoln

of principal amount.
Proceeds—
Underwriter—The First Trust Co.

(Neb.).

McCarthy (Glenn), Inc.
June 12 filed 10,000,000 shares of

common

cents).

stock

(par 25

Price—$2 per share. Proceeds
For drilling of
exploratory wells, acquisition of leases and for general
—

•

corporate purposes.
-

-

Houston, Tex.

Underwriter—B. V. Christie & Co.,
Dealer Relations Representative—George

A.

Searight, 50 Broadway, New York, N. Y.
WHitehall 3-2181. Offering—Date indefinite.
McGraw

(F. H.)

Telephone

common

of

one

shares.

stock

share

at

and

$6

per

share to be offered in units

warrants

to purchase four additional
share. Proceeds—To Clifford

Price—$19.871/2

per

Strike, the selling stockholder.
bery, Marache & Co., New York.
Mex-American
Nov. 3
stock
10

filed

Minerals

Underwriter—Gran-

Corp., Granite City, III.
cumulative preferred

113,000 shares of 6%

(par $5) and 113,000 shares of

cents)

to

class of stock.

Underwriter—

Co., Minneapolis, Minn.
(letter of notification) 1,000 shares of common
(par $10). Price—At market (estimated at from
$17 to $20 per share). Proceeds—To Willis King Nash,
the selling stockholder. Underwriter—J. M. Dain &
Co.,
Minneapolis, Minn.
it Nevada Tungsten Corp., Mina, Nev.
Nov. 21 (letter of notification) 4,000,000 shares of com¬
mon stock
(par one cent). Price—Five cents per share.
Proceeds—For working capital. Underwriter—Tellier &

Co., New York.

Y,./ C:
New England Telephone & Telegraph Co. (12/9)
Nov. 7 filed $20,000,000 of 25-year debentures due Dec.
15, 1977. Proceeds—To repay advances received from
American Telephone & Telegraph Co., the parent. Un¬
derwriters—To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.; Morgan
Stanley & Co.; Glore, Forgan & Co.; Kuhn, Loeb & Co.
Bids—To be received up to 11 a.m. (EST) on Dec. 9 at
Room 2315, 195 Broadway, New York, N. Y.
New

be

offered

Price—$6

in
per

units

unit.

of

common
one

England Telephone & Telegraph Co. (12/12)

Nov. 20 filed 232,558 shares of capital stock to be offered
for subscription by stockholders of record Dec. 10 at rate
of one new share for each ten shares held; rights

tqfc,-

expire
Dec.

on

12.

Jan. 12. Subscription rights will be issued on

Price

At par

($100

share). Proceeds —
To repay borrowings made from American Telephone &
Telegraph Co., the parent, and for other corporate pur¬
per

Underwriter—None.

poses.
•

—

Nielco

Chemicals, Inc., Detroit, Mich.
(letter of notification) 34,800 shares of common
Price—At par ($5 er share). Proceeds—To liqui¬

19

date notes.

Office—8129 Lyndon Ave., Detroit 21, Mich.
Underwriter—Smith, Hague & Co., Detroit, Mich.

Northland

Oils, Ltd., Calgary, Alta., Canada
1,000,000 shares of capital stock (par 20
cents—Canadian) and subscription warrants for 600,000
Nov.

21

filed

shares, of which the stock and subscription warrants for
400,000 shares are to be offered in units of 100 shares
subscription warrants for 40 shares. Price—
$52 per unit. Proceeds—For drilling of additional wells
and to purchase producing wells.
Underwriter—M. S.
Gerber, Inc., New York.
of stock and

it Overide Oils, Inc., Casper, Wyo.
Nov. 28 (letter of notification) 37,500 shares of common
stock (par $1). Price—$2 per share. Proceeds—To pur¬
chase royalties. Address—Box 806, Casper, Wyo. Under¬
writer—None.
•

Pacific

Telephone & Telegraph Co.

24 filed

Oct.

703,375 shares of common stock being of¬

fered for subscription

Co., Hartford, Conn.

Sept. 10 (letter of notification) 5,000 shares of common
stock (par $2) and warrants to
purchase 20,000 shares
of

investment.

21

stock.
common

Oct.

sive.

Proceeds—For

None.

Nov.

S.

* Insurance Exchange Corp., Walla Walla, Wash.
Nov 25 filed 30,000 shares of common stock
(par $10)
and 14,000 shares of preferred stock
(par $50) of which
28,000 common shares and all of the preferred stock are

Proceeds

it Modigliani Glass Fibers, Inc.,
L. I. City, N. Y.
(12/10)
Nov. 24 (letter of notification) 100,000 shares of capital
stock (par 10 cents).
Price—$3 per share. Proceeds—

working, capital.

Office—50

Idaho

rate

Phoenix, Ariz.

par.

Broadway, New. York,
N. Y. Underwriter—Teden &
Co., Inc., New York.

per

York.

it Horizon Oil & Gas Corp., N. Y. (12/9)
Nov. 24 (letter of notification)
600,000 shares of common
stock (par 10 cents). Price—50 cents
per share. Proceeds
test

$10

stock (par 10 cents). Price—50 cents
per share. Proceeds
—For

working capital. Office—100 Harrison St.,
Crawfordsvilie, Ind. Underwriter—City Securities Corp.,
Indianapolis, Ind.

drill

Deap

"/Magma King Manganese Mining Co.
Nov. 12 (letter of notification) 553,500 shares of

Proceeds—For

—To

—

:

Co., New York.

$500 debenture at

debentures, at

at

the'loan

amount

and

of 10

Underwriter

minimum of $6,000,000, after expenses,
will be used to
provide additional funds to San Manuel

-with

Crown

units

common

J Copper Corp., wholly-owned subsidiary, in connection

Corp., Crawfordsvilie, Ind. \
Nov/( 1.9 (letter of notification) $100,000 of 5% sinking
fund
debentures, 1952 series, due Oct. 1, 1962, with
stock purchase warrants
attached; and 2,000 shares of
common stock (no par) covered
by stock purchase war¬
rants which give the owner the right to purchase common
stock

26

Y company

.

•

Underwriter—

of stock held;
subscription rights to expire Dec. 11.
Price—$24.50 per share. Proceeds—Sufficient to provide

furnishings of motel. Office4. Cornet Bldg./Las Vegas, Nev. ,i Underwriter—
L. La Fortune, Las Vegas, Nev.

Lester

Y.

Nov. 7 filed 266,227 shares of common stock
(par $10)
being offered for subscription by stockholders of record

Hawthorne House of
Nevada, lnc»^v../
Nov.! 17 (letter of
notification) 30,000 shares of common
stock.
Price—At par ($10 per
share). Proceeds—For
new

N.

Magma Copper Co.

-

;•

Inc.

LoulS L. Rogers Co., New York. Letter to be withdrawn.

stock

300,000 shares will be offered to public.
be supplied by amendment.
Proceeds—For
engineering and construction of prototype coaxial heli¬

James,

Beane,

^Proceeds—To Mrs. Helen R. Davis, the selling

and

Office—St.

Discount Co.

Proceeds—Tp increase working capital.

stockholder.

Price—To

copter.

&

stock

(par $1),.of which 50,000 shares will be issued to stock¬
holders/. directors, officers and employees for services
rendered

Lowell Adams

Francisco, Calif.

class

Fenner

Corp.,/Paramount, Calif.
(letter of notification) 1,470 shares of
(par $1)* Price—At the market (about
share).

par).

filed

Pierce,

Macco

Gyrodyne Co. of America, Inc.
13

Lynch,

Nov. 4

Price—$21.50 per share. Proceeds—To
Baldwin Securities Corp.,
.the, selling stockholder.' Un¬
derwriter—Drexel & Co., Philadelphia, Pa.
Nov.

and farm groups. Price — At par.
construction. Underwriter—None.

Oct.

Oct. 23 (letter of notification)
29,000 shares of 6% cumu¬
lative preferred stock. Price—At
par
($10 per share).

St., Wheeling, W. Va. Underwriter
,.

& Hoverson Co.,

Milwaukee, Wis.
•

-

share. Proceeds—For working capi¬
.•

Sept. 29 filed 2,000,000 shares of common stock (par $5),
of which 849,038 shares have been
subscribed, paid for
and issued, and an additional
107,550 shares have been
subscribed for as of Aug. 28 and will be issued in con¬
nection with expansion of ammonia
plant. The remain¬
ing shares will be offered for sale primarily to farmers

stock

Underwriter—Merrill
•

^General Electronics Distributors, Inc.•(W. Va.)
Nov. 24 (letter of notification) 1,000 shares of common

"—None.

Co., Jersey City, N. J.

Mississippi Chemical Corp., Yazoo City, Miss.

Nash Finch

(A. i.)

(letter of notification) 6,510 shares of common
(par $1). Price—$2 per share. Proceeds—To Mis.
Lindemann' Amendt,
the
selling
stockholder.

stock

Julia

Lynch/-Pierce, Fenner & Beane, New York.

tal. Office—26 Tenth

privilege);
share).

per

Nov. 21
'

Executors of Estate of Marcus Rubenstein. Underwriter-

per

com¬

Milwaukee, Wis.
;

—

Price—$37

preferred shares for each 100

—

it Lindemann

—

—

stock.

basis of 4!/2

on

To pay loans. Address — c/o S. H.
Collier,
President of First National
Bank, Mercedes, Tex. Under¬
writer—None.

•"

^ Franklin Stores Corp., New York (12/16)
Nov. 26 filed 95,225 shares of common stock
(par $1).
Price
To be supplied by amendment. Proceeds
To
Merrill

Pro-

Leon Land & Cattle Co.

Proceeds

,

•

common

Aug. 18.

mon shares held
(with an oversubscription
rights to expire Dec. 31. Price—At par ($10

9 filed 100,000

None.

Prgjf-

Y

•

Co., Los Angeles,

Inc., Philadelphia, Pa.
shares of common stock (par $1)
to be offered to certain employees
pursuant to the terms
of stock purchase plan.
Price—$3 below the average
market price for the month in which
payment is com¬
pleted.
Proceeds—For general funds.
Underwriter—

share.

Oct. 28

Nov. 6 (letter of notification) 30,000 shares of 5% cumu¬
lative convertible preferred stock
being offered for sub¬
scription by common stockholders of record Nov. 15,

;

1952

Food Fair

Un¬

Price—At par ($10 per share).
ceedsh—For working capital. Underwriter—None.

:

Sept.

Paper Co., Vicksburg, Mich.
(letter of notification) 30,000 shares of

of record
.

R.

Office—Philadelphia, Pa.

stock to be offered for
subscription only by stockholders

-

it Fluor Corp., Ltd., Los Angeles, Calif. (12/17)
Nov. 26' filed 100,000 shares of
capital stock (par $2.50),
Price—To be supplied by amendment (estimated not to
exceed $17 per share). Proceeds—For
working capital.
William

ler

•

Lee

:

Nov. 13

catalysts for petroleum refining, etc.

—

Rudd-Melikian, Inc., of Philadelphia, Pa.,

working capital.
derwriter—None.

lantic Co., F. Eberstadt & Co., Inc. and Lazard Freres &
Co. and certain individuals. Underwriters—To be named

per

ceeds—To acquire additional properties. Office—927-926
Market St., Wilmington, Del. Underwriter—W. C. Doeh-

Corp., New York.

Industrial

—

Underwriter—Paul H. Davis & Co., Chicago, 111.

Calif.

crude

Underwriter—

($100 per share). Proceeds—For industrial and mineral
development of Israel. Underwriter
Israel Securities
Corp., New York.

^

10

Underwriter

Israel.

& Mineral Development Corp.
Oct. 6 filed 30,000 shares of class A
stock. Price—At par

York.

of

enterprises and to purchase
in

Mid-Gulf Oil &
Refining Co.
Nov. 10 (letter of
notification) 400,000 shares of common
stock (par five cents). Price—60 cents

Beverly

Underwriter—Douglass &

oil products for resale

Israel Securities

For working capital. Office — Fair Foundation Bldg.,
Tyler. Tex. Underwriter—Charter Securities Corp., New

Business—Production

South

Ispetrol Corp., New York
filed 49,500 shares of common stock. Price—At
par ($100 per share). Proceeds—To finance
purchase of

it Empire Oil & Refining Co., Inc., Tyler, Tex.
Nov. 28 (letter of notification) 300,000 shares of common
stock (par five cents). Price—$1 per share. Proceeds—

by amendment.

Office—119

Oct. 29

writer—I. J. Schenin Co., New York.

28

shares; and to public, 275,000
($1 per share).
Proceeds—For

par

Drive, Beverly Hills, Calif.
Co., Beverly Hills, Calif.

Empire Oil Corp., Tulsa, Okla.
(letter of notification) 600,000 shares of common
stock (par 5 cents). Price—50 cents per share. Proceeds
—To drill well. Office—Mayo Bldg., Tulsa, Okla. Under¬

111.

17,650

Price—At

general corporate purposes.

Nov. 6

Oct.

Corp.,

shares.

'

.

capital. Business—Purchase, processing, refining and
of Fluorspar. Underwriter
To be supplied by

stock (par

share

of

each

Proceeds—For work¬

share for each nine

by stockholders at rate of one new
preferred or common shares held on

Dec.

3; rights to expire on Dec. 30. American Telephone &
Telegraph Co., the parent, presently owns more than
90% of the outstanding shares. Price—At par ($100 per
share).
Proceeds—To repay advances and bank loans
and

for

new

construction.

Underwriter—None.

Pacific Western Oil Corp.

Aug. 5 filed 100.000 shares of common stock (par $4).
Price—At the market. Proceeds—To J. Paul Getty, Presi¬
dent,

Underwriter

brokers

on

—

None,

sales

to

be

handled

by

on vaae

40

the New York Stock Exchange.

Continued

40

The Commercial and Financial Chronicle

(2152)

Continued jrom page

,

39

Seiberling Rubber Co.
1 filed $3,750,000 convertible sinking fund deben¬
1, 1967. Price—To be supplied by amend¬
ment. Proceeds—To repay $1,200,000 loan and for work¬

:

-

-

Oct.

tures due Oct.

Oil Co., Reno, Nev.

Paradise Valley

Price—

of capital stock.

Aug. 20 filed 3,000,000 shares

ing capital. Underwriter—Blair, Rollins &
Offering—Postponed indefinitely.

(10 cents per share). Proceeds—To drill six wells
subleased land and for other corporate purposes. Un-

At par
on

•wvAerwriter—None, with sales to be made on a commission
**basis (selling commission is two cents per share). Of¬
fice—c /o Nevada Agency & Trust Co., Inc., Cheney Bldg.,

Oct. 24 filed 186,715

expire

Dec.

15.

For

on

Proceeds

new

—

29

stock

ferred

rights to

At par ($100 per share).
Underwriter — None.

—

Isadore

Signode Steel Strapping Co., Chicago, III.
9
(letter of notification) 2,044 shares of com¬
mon stock
(par $1). Price—At market (about $17 per
share). Proceeds—To John W. Leslie, trustee of Walter
S. Underwood and Emily C. Underwood. UnderwriterAmes, Emerich & Co., Chicago, 111.
Oct.

For

—

Jr.,

Phoenix

Budget Loans,

Inc., Minneapolis, Minn.

10 filed

Nov.

298,735 shares of common stock (no par)
employees of

preferred
stock, series A (no par). Price—$24 per share. Proceeds
—For working capital.
Office—227 Twin City Federal
Building, Minneapolis, Minn. Underwriter—M. H. Bishop

and its subsidiaries under the Stock Pur¬
chase and Option Plan.
Price—$39.50 per share. Pro¬
ceeds—For general corporate purposes.
Underwriter—

&

None.

to

Ar Pittsburgh Reflector Co.
2 (letter of notification)

Dec.

common

or

shares of class A stock and

Price—$51

basis.

60,000 shares

new

share for each class A

to

,

V,

Winona, Minn.
notification) 2,500 shares of 5%
preferred

stock.

cumu¬

Investment Corp.
180,556 shares of capital stock (no par)
being offered for subscription by stockholders of record
Nov. 5,1952, at rate of one new share for each 10 shares
held; rights to expire on Dec. 20. Price—-At net asset
value in effect when properly executed subscription
State

Price—At par

($100 per share).
newspaper building.
Office—
West Second St., Winona, Minn. Underwriter —

Proceeds—To
67-71

stock (par $1). Price—$5 per share. Proceeds—
working capital. Office—440 Cerrillos Road, Santa
Fe, N. M. Underwriter—Paul C. Kimball & Co., Chi¬
cago, 111. Offering—Expected week of Dec. 8.
common

-

Herald Publishing Co.,

Nov. 20 (letter of

.

Oct.

construct

None.

Safeway Stores, Inc.
Sept. 12 filed 1,900 shares of 4% cumulative preferred
stcok (par $100) and 18,000 shares of common stock
(par
$5) to be issued to James A. Dick Investment Co. (for¬

•

or

time to time

on

the New York Stock

Exchange.

shares held.

Sapphire Petroleums Ltd., Toronto, Canada
28 filed 50,000 shares of common stock
(par $1—
Canadian). Price—To be supplied by amendment. Prowill
New

offer
York

Kelman,

the

the shares from
Curb

Exchange

selling stockholder,

time
or

in

to

time

the

either

on

Chicago 13, 111.

the

over-the-counter

(George) Sons. Inc., Fremont, Neb.
(letter of notification) 989 shares of 6% cumu¬
lative preferred stock. Price—At
par ($100 per share).
Proceeds—For working capital. Office—108 East 6th
17

★ Texas Farm Bureau Investment Corp.
Nov. 21 (letter of notification) 25 shares of 5% cumu¬
lative preferred stock (par $10,000 each). Price—At par.
Proceeds—To buy 6% preferred stock of Southern Farm
Bureau Casualty Insurance Co. Office—117 South Fifth

St.,
Fremont, Neb. Underwriter—None, but Ellis, Holyoke &
Co., Lincoln, Neb., will act as broker.

St., Waco, Tex. Underwriter—None.

Seaboard Finance Co.,

Los Angeles, Calif.
notification) 14,000 shares of common
Price—$20.75 per share. Proceeds—For

Nov. 14 (letter of
stock (par $1).

i

'

Texas General Production Co.
June

working capital. Office ■—945 South Flower St., Los
Angeles 15, Calif. Underwriter—'None.

'

,
Seacrest Productions, Inc.,
Newport, R. L
Sept. 8 (letter of notification) 5,000
sharesofnon-voting
common stock, series B
(no par). PriecM-$10 per shares
Proceeds—To acquire real estate and
building convert
sound stages, install
recording equipment and cameras,

JF*

r Aother corporate Purposes. Office—73 Bliss Road,

Newport, R. I.

Underwriter

Providence, R. I.




—

Kidder.. Peabody & Co.r

r

together with

shares

stock

of

common

$2.50 cumulative convertible

maximum of 72,000

a

(par $1)

and 16,000 shares of

preferred stock

(par $50)

purchaseable under the plan.

•

Torhio Oil Corp.,

Ltd., Toronto, Canada
Aug. 21 filed 300,000 shares of common stock (par $1) to
be offered first to stockholders and then to the general
public. Price — 60 cents per share. Proceeds—For ex¬
ploration of oil and gas properties, and to drill a test
well. Underwriter—None, but offering to public will bo
handled through brokers.
Trad Television

stock
per

Corp., Asbury Park, N. J.
notification) 130,000 shares of common

(par one cent). Price—At market (about 27 cents

share). Proceeds—To Victor Trad, President. Office
First Ave., Asbury Park, N. J. Underwriter—

—1001

None.
World Airlines,

Trans

filed

Inc.
381,916 shares of common stock

(par $5)
being offered for subscription by common stockholders
31

of record

Nov.

19

at

rate

of

one

new

share for each

rights to expire on Dec. 5. Price—
$16 per share. Proceeds—For working capital. Under¬
writer—None. Hughes Tool Co. (which holds 75% of
shares

seven

held;

outstanding Trans World stock) will purchase any un¬
subscribed shares, so that the net proceeds will be at
least $5,000,000.
Union Bag & Paper Corp., Now York
7 filed 253,008 shares of capital stock

(par $20)

being offered for subscription by stockholders of record
28 at rate of one new share for each six share3

Nov.

held. Rights will expire on Dec. 15.

Pricie—$42 per share.
capital and expansion program.
Underwriters—Morgan Stanley & Co., New York.

Proceeds—For working

^ United Equipment & Service, Inc., Baltimore, Md.
Nov. 20 (letter of notification) $238,400 of 6% bonds,
Price—At par (in denominations of $100, $500, $1,008
and $5,000 each). Proceeds—To reduce outstanding notes.
Office—629 Title Bldg., Baltimore, Md. Underwriter—
None.

•

★ United Fire & Casualty Co., Cedar Rapids, Iowa
Nov. 20
(letter of notification) 20,000 shares of .,6%
cumulative preferred stock. Price — At par ($10 per
share). Proceeds—For capital purposes. Office—810 First
Ave., N.E., Cedar Rapids, la. Underwriter—None.
United Petroleum & Mining Corp., Bismarck,

N.D.

Nov. 17

(letter of notification) 150,000 shares of class A
voting stock and 150,00 shares of 4% class B non-voting
stock.
Price—$1 per share.
Proceeds—To purchase oil
and gas leases.
Office—222 Main Street, Bismarck, N.D.
Underwriter—John G. Kinnkrd & Co., Minneapolis, Minn,
Utica Radiator Corp.,

Utica, N. Y.
notification) $94,720 of 6% income
bonds of 1936 due Dec. 1, 1986, to be offered to stock¬
holders, employees and sales representatives. Price—At
par.
Proceeds —F01 expansion program. Office — 2201
Dwyer Ave., Utica, N. Y.
Underwriter—None.
Nov.

28

(letter of

* Van Waters & Rogers,

lnc„ Seattle, Wash.
15,584 shares of common
stock (par $1); * Price—$19.25 per share.
Proceeds—For
working capital. Office—4000 First Ave., South, Seattle,
Nov. 19

Wash.

(letter of notification)

Underwriter—None.

'

Copper Zinc Mines Ltd.,
Montreal, Canada
v
Oct. 22 filed 1,050,000 shares of common stock. PriceTo be taken down in 10 blocks ranging from 50,000 to
200,000 shares at prices ranging from 15 cents to $1 per
share. Estimated public offering prices range from 35
cents to $1.50 per share.
Proceeds—For mining opera¬
tions. Underwriter—Jack Rogers, of Montreal, Canada,
who is the "optionee" of the stock to be taken down.
Video Products

Oils, Ltd., Toronto, Canada
July 29 filed 375,000 shares of common stock (no par).
Price—To be related to quotation on the Toronto Stock
Exchange at time of offering. Proceeds — For working
capital. Underwriter—F. W. MacDonald & Co., Inc., New
York.
Offering—Probaby some time in October.

Schweser's

*

Office—4101 Ravenswood Avenue,

Underwriter—None.

Sweet Grass

who

market. Underwriter—None.

Oct.

Price—$100 per share.
Proceeds—To in¬
equity capital to take care of increased business

and increased costs.

Oct.

Thrift Bonus Plan,

.

2,367 shares of common
stock (par $50) to be offered for subscription by common
stockholders at rate of one new share for each four

Under¬

Underwriter—None.

Sioux Falls, S. D.

Victoria

Streeter-Amet Co., Chicago, III.

crease

Ken

received from stockholders. Proceeds—For

Aug. 27 (letter of notification)

writer—None.

eeeds—To

are

investment. Underwriter—None.

substantial part of these shares from

a

Street

filed

24

warrants

merly The James A. Dick Co.) in exchange for inven¬
tories, fixtures, operating supplies, good will and other
assets of Dick. It is anticipated that the Dick
Company
will sell all

Securities, Inc., Santa Fe, N. M. (12/8-12)
(letter, of notification) 60,000 shares of class A

10

Nov.

For

★ Republican &

lative

■

filed

7

State

Proceeds—To Bernard Goodwin, the selling
Underwriter—Gearhart & Otis, Inc., New
-

for

Sulphur Co., New York (12/15)
1,250,000 shares of common stqck (par 10
cents). Price—$1 per share. Proceeds—For construction
of plant and purchase of new equipment and for working
capital. Underwriters—Gearhart & Otis, Inc., and F. L.
Rossmann & Co., both of New York.
<

Corp., N. Y.
Oct. 3 (letter of notification) 10,245 shares of common
stock (par five cents).
Price—At market (about $2.62%
share).

Standard

Nov.

Reeves Soundcraft

York.

Co., Inc.

•

power
—

per

debentures, to repay bank
working capital; and from sale of stock,
three selling stockholders. Underwriter—F. Eberstadt

&

transmission chain, prockets, gears,
etc. Underwriter
Dallas Rupe & Son, Dallas, Texas.
Offering—Expected in January.

stockholder.

Products Co.,

ment. Proceeds—From sale of

and

Price—Of class A stock, at par.
equip wells., Office—1213 South

Nov.

Inc. (12/8)
Nov. 19 filed $5,000,000 of 5% convertible subordinated
debentures due Dec. 1, 1967, and 250,000 shares of com¬
mon stock
(par $1). Price—To be supplied by amend¬
loans

and

★ Thermoid Co., Trenton, N. J.
Nov. 26 filed 1,400 memberships in company's Employees'

•

Standard Coil

—

heavy duty

Conn. Underwriter—

Underwriter—None.

N. C.

Price—At par ($5 per share).

•

of

St., Bridgeport,

(letter of notification) 10,500 shares of common
stock (par $5), and 2,500 shares of 6% cumulative pre¬
ferred stock (par $50). Price—$12 per share for common
and $50 per share for preferred.
Proceeds—For operat¬
ing capital. Office—1625 West Morehead St., Charlotte,

Powers Manufacturing Co., Longview, Tex.
Sept. 25 filed>250,000 shares of common stock (par $1).
Price
$2 per share.
Proceeds — For machinery and
equipment and new construction. Business—Production

•

State

Oct. 20

of class B

Underwriter—None.

,

share of class B stock.

Southern Radio Corp., Charlotte, N. C.

Proceeds—For
expansion and modernization of plant and for working
capital.
Office —403 Oliver Bldg., Pittsburgh 22, Pa.

.

one

unit. Proceeds—For construction program.

None.

preemptive rights (33,078 shares) so that
remaining stockholders may subscribe on a one-for-

one

per

Office—114

cient of their
the

5,632 shares of $2 par¬

ticipating class A stock (par $25) and 2,816 shares of
B stock (par $1) to be offered in units of two

Officers of company have waived suffi¬

B share held.

(letter of notification)

class

stock to be offered about Dec. 10 to stockholders

of record Dec. 1 at rate of one

24

Nov.

the promoter.

Hawthorne Ave.,

Oct.

^ Southern Connecticut & Long Island Television
Co., Inc., Bridgeport, Conn.

(12/9)
Nov. 19 filed $17,000,000 of sinking fund debentures due
Dec.
1, 1972. Price—To be supplied by amendment.
Proceeds—About $13,600,000 to retire all of the present
funded debt of company and of one of its subsidiaries,
and the balance for working capital, capital expenditures
and other corporate purposes.
Underwriters—Goldman,
Sachs & Co., New York; and Piper, Jaffray & Hopwood,
Minneapolis, Minn.
Pillsbury Mills, Inc.

•

be offered to certain officers and other

the company

Co., Minneapolis. Minn.

as

Proceeds—To drill

Nov. 10 (letter of

Sinclair Oil Corp.

Sept. 22 (letter of notification) 4,000 shares of

Thursday, December 4, 1952

.

—

Schrafft. Underwriter—None.

of

operating capital. Address — c/o N. A.
Mercantile Securities Bldg., Dallas, Tex.
Underwriter—Garrett & Co., Inc., Dallas, Tex.

Proceeds

Tinker,

(approximately $10.25

To United States Trust Co. and
Silverman, trustees under the will of George F.
Proceeds

share).

per

Service, Inc.

(letter

(no par). Price—At market

stock

construction.

(Texas)
notification) 100,000 shares of pre¬
stock
(par $1) and 100,000 shares of common
(par 10 cents) to be offered in units of one pre¬
and one common share.
Price—$1.25 per unit.

Petroleum

ferred

Price

Y., and White & Co., St. Louis, Mo.

^ Shattuck (Frank G.) Co., Boston, Mass.
Nov. 28 (letter of notification)
1,000 shares of capital

effective Nov. 12.

Statement

Oct.

N.

offered
19 at rate

.

^ TexSoDak Oil Co., Sioux Falls, S. D.
Nov. 24 (letter of notification) 1,000 shares of class A
common stock
(par $25) to be offered for subscription
by stockholders; 6,226Y2 shares of class A common stock
in
exchange for leases and beneficial interest; "and
2,679 V2 shares of class A common stock and 13,750 shares
of class B common stock (par $1) to be issued to G. L.
Clifton

of class A
share. Proceeds—

Price—$1.75 per
To reduce bank loans and acquire oil and gas leases.
Underwriters—Genesee Valley Securities Co., Rochester,

shares of capital stock being

subscription by stockholders of record Nov.
of one new share for each five shares held;

Oklahoma City, Okla.

(letter of notification) 150,000 shares

10

stock (par 50 cents).

Peoples Gas Light & Coke Co.
for

Oil Co.,

Seneca

Nov.

Virginia St., Reno, Nev.

139 N.

Co., Inc., New

York.

.

4

filed 2,500,000 shares of

common

stock

(par 50

cents). Price—To be supplied by amendment. Proceeds—
To buy property for oil prospecting.
Office—Houston,
Tex.
,

Underwriter—To be named by amendment. _Of-

fering—Tentatively postponed. Statement
drawn.

i

be with¬

Warren Petroleum

Corp., Tulsa, Okla.

Nov. 7

(letter of notification) 3,000 shares of common
stock (par $3). Price—At market. Proceeds—To J. A,
La Fortune and Mrs. Gertrude La Fortune. Underwriter

—Harris, Upham & Co., New York.
West Coast Pipe Line

Co., Dallas, Tex.
$29,000,000 12-year 6% debentures due Dec.
15, 1964, and 580,000 shares^ ofr common stock (par 50
cents) to be offered in units of one $50 debenture and.
one share of stock.
Price—To be supplied by amend¬
ment.
Proceeds—From sale of units and 1,125,000 addi¬
tional shares of common stock and private sale of $55,-

Nov. 20 filed

000,000 first mortgage bonds, to be used to build a 1,030pipeline. Underwriters^—White, Weld &
York.

mile crude oil

Co. and Union Securities Corp., both of New

..

Texas Western Oil Co., Inc., Houston, Tex.
Nov. 12 (letter of notification) 100,000 shares of common
stockr Cpar-10 cents). Price-—cents per shares Proceeds
—For working capital. Office—1 Main5 St., Houston, Tex.
Underwriter—Scott, Khoury & Co., Inc., New York.
.

r

...

may

Corp., Red Bank, N. J.
(letter of notification) 75,000 shares of coihmon
stock (par 50 cents).
Price—$2.50 per share.
Proceeds
—For working capital.
Office—42 West Street, Red
Bank, N. J. Underwriter—None.
Oct. 3

West Coast Pipe line Co.r Dallas, Tex.,

1,125,000 shares of common stock- (par. 50
Price—To be supplied by amendment. Proceeds

Nov. 20 filed

cents).

—Together with other- funds; to be used.to build: pipe-*
line;
Underwriters—White; Weld & Co. and Union Se-*
curities Corp., both of New York; ,

Volume 176

Number 5174

.

.

The Commercial and Financial Chronicle

.

(2153)
West Flagler Amusement Co.,
Nov.

20

Inc., Miami, Fla.
170,000 shares of common stock (par 50
Price—$10 per share. Proceeds—To nine selling
filed

cents).
stockholders.
Business—Amusement park. Is owner of
West Flagler Kennel Club.
Underwriter—Floyd D. Cerf
Jr.
•

Co., Miami, Fla., and Chicago, 111.

Inc.
65,168 shares of common stock (par $10)
being offered for subscription by common stockholders
filed

7

at rate of

one

new

share for each five shares held Nov.

26; rights to expire Dec. 9. Price—$22
ceeds—To

repay

bank loans and for

,

per

new

share. Pro¬

construction.

Halsey, Stuart & Co. Inc.; The First Boston Corp.
Freres & Co. (jointly); Union Securities
Corp.; Smith, Barney & Co.; Equitable Securities Corp.
Lazard

Proceeds—To repay bank loans and for

(12/15)

Nov.

preferred

California Electric Power Co.
Oct. 7 it was announced

183,002

shares

of

convertible

stockholders of

Dec.

record

15

at

rate

of

by

one

common

share of

estimated, will involve $29,500,000.

company

—For

writer—White, Weld & Co., New York.

ding.

States

Refining Co.,
City, Utah
Nov. 21 (letter of notification) 8,000 shares of 6% cumu¬
lative preferred stock (par $5) and 100,000 shares of
common
stock (par 25 cents). Price—Of preferred, $4
per share, and of common, $1.60 per share. Proceeds—
For working capital. Underwriter—None.
North

Lake

Salt

Wisdom

Magazine, Inc., Beverly Hills, Calif.

Sept. 17 filed 6,600 shares of 5% cumulative preferred
(par $100) and 6,600 shares of common stock (par
one share of preferred and
one share of common stock.
Price—$110 per unit. Pro¬
ceeds—To publish new national picture magazine. Un¬
derwriter—None. An earlier registration statement filed
July 14, 1952, covering a like offering of preferred and
common shares was withdrawn Aug. 1, 1952.
stock

Wyoming National Oil Co., Inc., Denver, Colo.
■

common

stock

(par five cents). Price—25 cents per share. Pro¬
ceeds — For oil and gas leases. Underwriter — R. L.
Hughes & Co., Denver, Colo.
it Zenda Gold Mining Co., Seattle, Wash.
12 (letter of notification) 1,200,000 shares of com¬
mon stock.
Price—At par (10 cents per share). Proceeds
-^To repay bank loans and for mining operations. Office
—635 Securities Bldg., Seattle 1, Wash.
Underwriter—
Nov.

None.

-

V

'

new

construction

and

Probable

Stuart

&

bonds

and

Beane

and

Co.

intends to sell early

repayment

of

bank loans.

bidders:

Inc.;

stocks:
Dean

(1) For bonds only—Halsey,
Salomon Bros. & Hutzler. (2) For
Merrill

Witter

Lynch,

&

Pierce, Fenner &
(jointly); Kidder, Pea-

Co.

body & Co.; Blyth & Co., Inc.
Central Hudson Gas & Electric
Corp.
Oct. 20 filed with New York P. S. Commission for
per¬
mission to issue and sell
$6,000,000 first mortgage bonds,
the proceeds to be used for new
construction. Latest
bond financing was done

in

March,

through Kidder, Peabody & Co., New York.
Central

Sept. 2 it

1951,

Maine Power Co.

yield approximately $5,000,000 to refund the then out¬
standing short-term notes. Underwriters—To be deter¬
mined by competitive bidding. Probable
bidder—(1) For
bonds, Halsey, Stuart & Co. Inc.; Coffin & Burr, Inc. and
The First Boston Corp.

(jointly); Blyth & Co., Inc. and
Kidder, Peabody & Co. (jointly); Merrill Lynch, Pierce,
Fenner & Beane and
White, Weld & Co. (jointly); Harriman Ripley &
Co., Inc.; Salomon Bros. & Hutzler.
(2) For stock, Blyth & Co., Inc. and Kidder, Peabody &
Co. (jointly); Coffin &
Burr, Inc. and The First Boston
Corp. (jointly); Harriman Ripley & Co., Inc.
Charter Oil Co.y Ltd.
Nov. 18, it was reported that

company plans to offer and
sell 900,000 additional shares of common stock
(no par).

Prospective Offerings
First

ers
:

as

Boston Corp., and A. E. Ames & Co., Ltd.,
dealer-managers in stock offering to stockhold¬

in Oct. 1951.;

American Trust Co., San Francisco, Calif.
12 company offered 246,088 additional shares of
stock
(par $20) to common stockholders of

Nov.

cdnimon

record Nov. 7 at rate of
held.

share for each three shares

one

Rights to expire Dec.

11.

Price—$50 per share.
Underwriter

Proceeds—To increase capital and surplus.

Fuel

Arkansas
Oct. 3 it

was

(around

$1.70

share).

per

Oil

Corp.

Natural

Gas

(to be

pected late this month.

Chicago, Rock Island & Pacific RR. (12/9)
Bids will be received by the
company up to noon (CST)
on Dec. 9 at its
office, Room 1136, La Salle Street

Station,
Chicago 5, I 11., for the purchase from it of $4,440,000
equipment trust certificates, series O, to be dated Jan. 1,
1953 and to mature in 24 equal semi-annual instalments
from July 1, 1953 to

bidders:

Halsey,

Hutzler. "

successor

to

Corp.)

announced that subject to approval of reor¬

ganization plan of Arkansas Natural Gas Corp. by U. S.
District Court of Delaware, the new company, to be
known as Arkansas Fuel Oil Corp., proposes to issue
and sell $23,000,000 of sinking fund debentures due 1972.
Proceeds—To retire $21,877,760 of 6% preferred stock
(par $10), at $10.60 per share, with preferred stockhold¬
ers, other than Cities Service Co., to be offered the de¬
bentures in exchange, plus a cash adjustment. Under¬
writers—To
be
determined
by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.; The First
Boston Corp. and Lazard Freres & Co. (jointly); Smith,

Barney & Co.

and'intluding Jan. 1, 1965. Probable
& Co.'Inc.; Salomon Bros. &

Stuart

"

-"> •

'

'•

'

Columbia Gas System, Inc., N. Y.

Oct. 10 it

was

common

—Blyth & Co., Inc., and associates.
Arkansas

later

shares; balance to be offered in Canada. Offering—Ex¬

Aluminium Ltd.

acted

named

Proceeds—For expansion program.
Underwriters—Leh¬
man Brothers and
Bear, Stearns & Co. for about 800,000

Oct. 15 directors expected that additional financing will
be undertaken in 1953 to meet the major part of the in¬
crease in the estimated cost of the expansion program.

The

be

stock

announced company plans to issue and sell
and additional debentures early in the

Spring of 1953.

Proceeds—To repay bank loans and for

Company has sought SEC author¬
an aggregate of $25,000,000.
Underwriters—To be determined by competitive bidding.
Probable bidders: For stock, Merrill Lynch, Pierce, Fen¬
ner & Beane,
White, Weld & Co. and R. W. Pressprich
& Co. (jointly); Morgan Stanley & Co. For
debentures,
Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.
■ :
ity to borrow from banks

Connecticut Light &

Power Co.
presently estimated
that approximately $11,000,000 of additional capital will
was

announced that it is

be required during the latter half of 1952.
—Putnam & Co., Hartford, Conn.

if Consumers Power Co.
Nov. 26 it

was

Underwriter

Our clients

your
never

top?

announced company plans to offer 617,669
common stock (no par) to common

rights to expire
amendment.

on

on

Jan. 30. Price—To

Proceeds—For expansion

l-for-10 basis;
be supplied by

a

program.

Under¬

writers—To be determined by competitive bidding. Prob¬
able bidders: Lehman Brothers; Morgan
Stanley &

blow

ducing superior printing

Co.;
Ripley & Co. Inc. and the First Boston Corp.
(jointly). Bids—Tentatively expected to be received on

is routine at

Jan.

their tops

because pro-

Harriman

Sorg—even

14.
,

Culver

against the most immi¬

Nov.

nent deadline.

22

Corp., Chicago, III.

it

They know the quality they can expect
"from specialists with'*over thirty years'
experience in eveiy type of financial,
corporate and legal printing . . . handled,
at
Sorg, from design through mailing.

PIllIVrilVG CO., Inr.
611 siiuni si., iviw YOich :>s, h.y.

that company proposes to
about Jan. 26, 1953, a total of
23,640 additional shares of common stock on a share-forshare basis; rights to expire Feb. 9.
Price—At




'€<yifuziat<j fymiteu

on

or

par

per

share).

Proceeds—For investment.

Madison Street, Chicago, 111.
Duke

($2

Office—105 West

Underwriter—None.

Power Co.

Nov. 10 the FPC authorized company to
split up common
shares on the three-for-one basis. The
company said
this stock split will be advantageous in
raising the addi¬
tional new capital which will be necessary for the con¬

tinuation
more

of

its

postwar

construction

program.

Costing

13

the

FPC

Natural Gas

authorized

about 100 miles of pipe

of

stock

common

to

raise

approximately

plan further provides that Blackstone
Valley
Co., Brockton Edison Co., and Fall River
Electric Light Co. issue
mortgage bonds. Proceeds—To
repay bank loans.
Underwriters—For EUA
debenture*

determined

by competitive bidding. Probable
Halsey, Stuart & Co. Inc. (for bonds
only);
Lehman Brothers; Estabrook & Co. and
Stone & Webster
Securities Corp. (jointly); Glore,
Forgan & Co. and Har¬
riman Ripley &
Co., Inc. (jointly).

Equitable Gas Co.
Nov. 20 it

was

announced company
may offer early next
stock. Proceeds—To
repay
for construction
program.

$10,000,000 of preferred
$8,000,000 of bank loans and
year

Underwriters—May be determined by competitive bid¬
ding. Probable bidders: Blyth & Co.,
Inc.; Kidder, Pea¬
body & Co.; White, Weld & Co.; The First Boston

Corp.;

Lynch, Pierce, Fenner
Stockholders will vote Jan. 20
of

&

Beane.

on

1

Meeting

authorizing

$20,000,000 preferred stock.

•—

issue

an

European American Airlines, Inc.

June 11 it was reported
company plans to raise an ad¬
ditional $400,000 of equity capital. An issue
of $200,000
of capital stock was
just recently placed privately at
$7.50 per share.
Underwriter
Gearhart, Kinnard &

Otis, Inc., New York.
Garrett
Oct.
for

the

17

it

Freightlines,

(12/15)

company

debentures due 1967. Price—At
par. Proceeds—To retire

outstanding debentures

and preferred stock and for new
equipment and working capital. Underwriter—Allen &
Co., New York; Peters, Writer &
Christenson, Denvef.
Colo.; and Edward D. Jones & Co., St. Louis, Mo.
/,

General Public Utilities
Corp.
iw
15, A. F. Tegen, President, announced that its ctomestic subsidiaries may
spend around $80,000,000 tor
Nov.

new

construction

in 1953. Of this
total, $15,000,000 will
provided internally leaving about
$65,000,000 to be
financed by the sale of securities.
Subsidiaries expect
to sell around
$49,000,000 of bonds, debentures and pre¬
be

.

ferred stocks and GPU will furnish
about $16,000,000 lio
them. GPU expects to obtain the
funds from bank loans,
the sale of
debentures, the sale of common stock or a
combination of these.
If present conditions
continue
well into next
year, GPU would expect to offer
addir
tional shares to stockholders
rather than resort to bor¬

rowing,
if Great Northern Ry. (12/4)
Bids will be received
by the company

line the estimated cost of which,
$5,784,606, is expected to be financed through the issu¬

j

v

up

Dec. 4 for the purchase from it
ment trust
certificates, dated Jan.
on

to 11a.m. (EST)

of $8,520,000
equip¬
1, 1953, and due semi¬
annually to and including Jan. 1, 1968. Probable bidders:
Halsey Stuart & Co. Inc.; Salomon Bros. & Hutzler.

Gulf

Interstate Gas Co.,
Houston, Tex.
Sept. 16 company applied to the FPC for
authority to
construct an 860-mile
pipeline extending from southern

Louisiana to a point in northeastern
Kentucky. This
project would cost about $127,887,000.
Transportation of
gas is expected to commence by Nov.
1, 1954.
Indiana &

Nov. 6 it
in

1953

was

some

Michigan Electric Co.
reported company plans to issue and sell
bonds and/or preferred stock.
Proceeds—

To repay bank loans and for

new

writers—May be determined
Probable bidders: (1) for

by

construction.

competitive

Under¬

bidding.

bonds—Halsey, Stuart

Co.

&

Inc.; Kuhn, Loeb & Co.; The First Boston
Corp.; Union
Securities Corp.; Harriman
Ripley & Co., Inc.
(2) for
preferred—Lehman

Brothers; The First

Boston

Smith, Barney & Co.
•

Iowa-Illinois Gas & Electric Co.

Nov.

26

directors

first
stock

loans

and

for

Corp*;

ti:
(1/27/53)

"

approved

plans to issue and sen
mortgage bonds and 60,000 shares of
(par $100). Proceeds—To repay bank

new

construction.

determined by

Underwriters—To be

competitive bidding. Probable bidders;
For bonds,
Halsey, Stuart & Co. Inc.; Harriman, Ripley
& Co. Inc., Union Securities
Corp. and White, Weld &
Co. (jointly); Equitable
Securities Corp.; Glore,
Forgan
& Co.; Harris, Hall & Co.
(Inc.); Lehman Brothers;
Blyth & Co., Inc.; The First Boston

Corp.; Smith, Barney
& Co.
For preferred,
Blyth & Co., Inc.; Merrill Lynch,
Pierce, Fenner & Beane; Glore, Forgan &
Co.; Lehman
Brothers; Salomon Bros. & Hutzler and Union
Securities
Corp. (jointly); Kidder, Peabody &
Co.; Harriman, Rip1ley & Co. Inc. Registration—Expected late in
Bids—Tentatively scheduled to be received

(CST)

December.
at

11

a.m.

Jan. 27.

on

Kansas
Nov.

plans

City Power & Light Co. (1/20)
19, H. B. Munsell, President, announced
to

bonds.

issue

and

Proceeds—To

sell

$12,000,000

repay

bank

of

loans

first

company

mortgage

and

for

new

construction. Undenvriters—To be
determined by com¬
petitive bidding.
Probable bidders:
Halsey, Stuart &
Co. Inc.; Glore, Forgan &
Co.; Blyth & Co., Iric.'and
Lazard
Freres
&
Co.
(jointly);
The
First
Boston
Corp.; White, Weld & Co. and Shields & Co.

Smith, Barney & Co.; Kuhn, Loeb

Stearns

to construct

has applied to ICC

authority to issue and sell $1,100,000 6% convertible

Corp.;

Co.
company

Inc.

announced

was

./

.

& Hutzler and Union Securities
able
Securities

than $250,000,000.

East Tennessee
Nov.

&vruxnciaL

(1/26)

announced

was

offer to stockholders

amount

Gas & Electric

$8,000,000

additional shares of

blowing

cient

preferred

(1/14)

stockholders of record about Jan. 14
l

plant of reoi^
ganization of this company and subsidiaries
calls for is¬
by company of $7,000,000 debentures and a
suffi¬

construction program.

March 1 it

that amended

—

announced company soon after March
1,
1953, intends to issue and sell $6,000,000 of first and
general mortgage bonds and sufficient common stock to
was

Price—To

announced

Merrill

privately

t

Utilities Associates
was

suance

be
bidders:

Underwriters—May be determined by competitive bid¬

$10) to be offered in units of

}£ov. 17 (letter of notification) 500,000 shares of

Eastern

Sept. 3 it

may

in 1953
approximately $10,000,000 of additional new se¬
curities, viz: $8,000,000 of first mortgage bonds and
about $2,000,000 of common or
preferred stock. Proceeds

preferred stock for each 20 shares of common stock held.
Price—To be supplied by amendment. Proceeds—To re¬
tire outstanding preferred stock and bank debt. Under¬

ic Western

be

$2,000,000.

announced that
the company expects to borrow additional
money next
Spring to finance its 1953 construction program, which,

it is

filed

construction.

Arkansas Power & Light Co.
Aug. 7 C. Hamilton Moses, President,

ic Western Natural Gas Co., Houston, Tex.
25

new

...

Underwriter—Harris, Hall & Co. (Inc.), Chicago, 111.

stock (par $30) to be offered for subscription

of
$4,500,000 of first mortgage bonds (which
may
placed privately) and $1,300,000 of bank
loan**
Traditional
Underwriter—White, Weld & Co., New York.
ance

ders:
and

Western Light & Telephone Co.,

Nov.

Arkansas Louisiana Gas Co.
Dec. 6, 1951 it was reported
company may issue and sell
$35,000,000 of first mortgage bonds. Underwriters—May
be determined by competitive
bidding. Probable bid¬

41

&

Co.

(jointly);

& Co., Salomon Bros*

Corp. (jointly); Equit¬

Lehman

Brothers

and

Bear,

(jointly); H—rimon Ripley & Co.,

Bids—Tentatively schedule-,

to

received

Continued

on

on

Jan.

Irur,
20.

page 42

"

42

The Commercial and Financial Chronicle

(2154)

Continued from page

11#1.

000,000 to $12,000,000 of securities, probably bonds.
\£3fr,oceeds—For new construction. In August of last year

3%% first mortgage bonds
1976 was placed privately through Lehman Brothers
Merrill Lynch, Pierce, Fenner & Beane.
of

issue

an

$8,000,000

due
and

additional

Probable bidders: (1) For perferred stock:
Morgan Stanley & Co.; Lehman Brothers and Bear,
Stearns & Co. (jointly); W. C. Langley & Co.; Glore,
Corp.
Fenner

Tire

&

Rubber

row

was

announced that company intends to bor¬

The Chase National

$2,800,000 from

Bank of the

City of New York, the loan to be later funded through
form of permanent financing. Probable bidders for

a

bonds:

Halsey,

Stuart & Co. Inc.; White,

Kidder, Peabody & Co. and Shields & Co.

Weld & Co.,

(jointly).

Narragansett Electric Co.
was reported company plans issuance and sale
$10,000,000 first mortgage bonds, series D. Pro¬
ceeds — To repay bank loans and for new construction.
Underwriters—To be determined by competitive bidding.

Oct. 7 it

of about

Halsey, Stuart & Co. Inc.; Kuhn, Loeb
& Co. and Glore, Forgan & Co. (jointly); Salomon Bros.
Hutzler; Kidder, Peabody & Co. and Stone & Web¬
ster Securities Corp.
(jointly); Lehman Brothers and
Goldman, Sachs & Co. (jointly); Union Securities Corp.;
The First Boston Corp.; White, Weld & Co. OfferingExpected late this year or early in 1953.
Probable bidders:

^Nashville, Chattanooga & St. Louis RR. (12/8)
Bids will be received by the company at 71 Broadway,
New York, N. Y., up to 11 a.m. (EST) on Dec. 8, for the
purchase from it of $2,640,000 equipment trust certifi¬
cates, series H, to be dated Dec. 15, 1952 and due $176,000
each Dec. 15 from 1953 to 1967, inclusive. Probable bid¬
ders: Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutzler.
National
it

17

City Bank of Cleveland

in January offer
additional capital stock for subscription by its stock¬
holders.
Underwriter—Merrill, Turben & Co., Cleve¬
land, Ohio.
reported

was

New Orleans

July 24

Public

bank

may

Service

Inc.

announced plans to issue and sell $6,000,000 of first mortgage bonds due Dec. 1, 1982. Pro¬
company

ceeds—For

new

construction.

Underwriters—To be

de¬

termined

by competitive bidding.
Probable bidden:
Halsey, - Stuart & Co. Inc.; Lehman Brothers; Kidder,"
Peabody & Co. and Stone & Webster Securities Corp.:
(jointly); Equitable Securities Corp.; Union Securitie*
Corp.
Bids—Originally scheduled to be received on
Dec.

15

have

been

postponed

until around the end of

Co.

5, N. Y., for the purchase from it of $8,000,000
first mortgage bonds to be dated Nov. 1, 1952, and to
mature Nov.
1, 1977.
Proceeds, together with other
funds, will be used to repay $11,423,000 bonds which
mature on July 1, 1953. New bonds will be guaranteed
'"Hmconditionally as to principal, interest and sinking
fund instalments by Southern Railway Co.
Probable
bidders: Halsey, Stuart & Co. Inc.; Morgan
Stanley &
Co.; Kuhn, Loeb & Co.
1

14

it

was

RR.

company

Webster Securities Corp.

it

additional

basis

Lehman
ney

shares

(2,411,945

Proceeds—For

determined

New

York, New Haven & Hartford RR. (1/7)
Oct. 31 it was announced company plans to issue

new

Northern Indiana Public Service Co.

Sept. 18 it was reported company may issue and sell
shortly after the close of this year some additional pre¬
stock.

Underwriters—May be Cen¬
Republic Co. (Inc.), Blyth & Co., Inc. and Merrill
Lynch. Pierce. Fenner & Beane.
tral

Gas

Co., Omaha, Neb.
Sept. 17 company sought FPC authority to construct
pipeline facilities to cost an estimated $69,826,000. This
include about 442 miles

of

main

pipeline addi¬
tions; installation of a total of 73,600 h.p. in new and
existing compressor stations; and numerous branch line
additions.

Probable

bidders

for

debentures

bonds;
Halsey, Stuart & Co. Inc.; Blyth & Co., Inc.; The First
mortgage pipeline bonds, and preferred and common
Boston Corp. and
Kidder, Peabody & Co. (jointly). Com¬
mon

stock

Ohio

or

financing will probably be done via rights.

Edison Co.

(1/13-1/7)
Nov. 20 company sought SEC
authority to issue and sell,
early in 1953, of 150,000 additional shares of preferred
stock (par $100) and
479,846 additional shares of com-'
mon

stock

(par $12), the latter issue to be first offered




about

a

one-for-ten

stock outstanding).
Underwriters—May be
bidding. Probable bidders:

common

market

to

in

areas

the

issue

that

3 it

bonds

and each of its
or other debt

ton

&

Service Co.

it

of New Hampshire
announced company plans to

—Of

sell

shares to raise

common

bank

repay

loans
be

and

about

for

$4,000,000.

new

Union

Planters

1 company
25

Nov.

by
competitive
bidding.
bonds, Halsey, Stuart & Co. Inc.;
Corp. and Coffin & Burr, Inc. (jointly);
& Co.; White, Weld & Co.
For stock,
& Co. and Blyth & Co., Inc. (jointly);
& Co. Inc.

shares

For

(jointly); W. C. Langley & Co. Offering

probably

Rockland

early in

1953;

and of stock,

late

1952.

Dec.

Under¬

& Co.

bonds

•

Proceeds—To

construction.

(jointly); Lehman Brothers, Harriman RipleyBear,. Stearns & Co. and Carl M. Loeb,

Inc.,

in

determined

Probable bidders:

& Co.

Co.,

Rhoades

issue and
approximately $5,000,000 of bonds in May or June,
1953, and in the latter part of 1953 to issue sufficient
was

Co.

(jointly); Union Securities Corp.;- Smith, Barney*
Co.; White, Weld & Co. and Merrill Lynch, Pierce,
Fenner & Beane (jointly); Lehman Brothers. The com-"
mon
stock'offering may be underwritten by The First'
Boston Corp. In 1950, the following group bid for com-'
mon stock issue: Merrill Lynch, Pierce, Fenner &
Beane;
Blyth & Co., Inc.; Smith, Barney & Co. and Collin, Nor-C

bidders: Halsey, Stuart & Co. Inc.; The First
Corp.; Glore, Forgan & Co.; Kuhn, Loeb & Co.

3

Edison Co.

was

ler (jointly); Carl M. Loeb, Rhoades & Co.; Kidder, Pea¬
body & Co.; The First Boston Corp. and Glore, Forgan'

—

construction programs.
Underwriters—To be determined by competitive bidders.

Nov.

(12/12)

announced

was

reported company plans issue and sale of
first mortgage bonds and 500,000 shares. of
common stock. Proceeds—For construction program. Un¬
derwriters—For bonds, to be determined by competitive
bidding. Probable bidders: Halsey, Stuart & Co. Inc.?
Equitable Securities Corp. and Salomon Bros. & Hutz-;

Probable

Public

—
To repay bank loans and for new
Underwriter—Dillon, Read & Co. Inc., New|

$7,500,000

securities. Proceeds—To finance

Boston

a

&

company

mortgage

on

25,000 shares of 6%

Toledo

&

announced

will

stockholders

which 15,000

both of New York,

was

common

oversubscription privilege). Bond

company plans to issue and
cumulative preferred stock of
shares will be offered publicly to residents^
of Texas only and 10,000 shares will be sold to Citizens
Independent Telephone Co., an affiliate. Price—At par
($20 per share). Proceeds — For new construction, etc.
Underwriter—Moroney, Beissner & Co., Houston, Tex.

sell

project

Underwriters

it

25

Nov.

Pacific

Kuhn, Loeb & Co. and Carl M. Loeb, Rhoades & Co.,

subsidiaries

stock to

preferred stock financing was previously done pri¬

Oct.

program.

company's financing

York.

Dallas, Tex.
Oct. 23, J. R. Patten, President, said that it is planned
to float an issue of over $3,000,000 of common*stock-*
(probably around 500,000 shares to be offered to stock¬
holders on a l-for-2V2 basis. Price—About $7 per share.
construction

common

ir Texas Telephone Co.

Financing is expected to consist of first
line bonds and preferred and common

For

11.

reported that/the

was

construction.

Pan-American Sulphur Co.,

—

it

21

and

stocks, and is expected to be completed by April, 1953
Underwriters—White, Weld & Co. and Kidder, Peabody
& Co., both of New York, and Dominion Securities Corp.,
Ltd., Toronto, Canada.

Proceeds

Dec.

on

vately. Proceeds

Estimated overall capital cost of the

is $179,000,000.
mortgage pipe

and New Orleans &

Southwestern Public Service Co,

l-for-12 basis (with an

Pipeline Corp.
Aug. 29 company filed a second substitute application
with the FPC proposing to construct a 1,384-mile trans¬
mission line extending from the San Juan Basin in New
Colorado

company

2018, 70 Pine Street; New York 5, NV Y.. up to,

additional

Brothers; The First Boston Corp.; Smith, Bar¬

and

(12/11)

tentatively involves the offering in January of
$12,000,000 bonds and $2,000,000 preferred stock in addi¬
tion to about $5,500,000 to be raised from the sale of

& Co. and Harriman Ripley & Co., Inc.

Mexico

$32,518,500.

program

Pacific Northwest

and

First Boston Corp.; Smith, Barney &
Co.; W. C. Langley
& Co. Bids—Expected to be received on or about Jan. 7.

would

of

plans to issue and

construction.

competitive

by

at

cost

to

RR.

the

of

National

offered

right

common

to

subscribe

stock

increase

Bank, Memphis, Tenn.

common

(par

basis; rights to expire Dec.
Proceeds—To

United

for

additional

100,000

$10)'on

16. Price

one-tor-five,

a

—

$32 per share.?

capital and surplus. Underwriter-

States

Pipe Line Co. (Del.)
announced that this company had
been formed to build, own and operate'a petroleum
products pipeline from the Texas Gulf Coast to St. Louis,"
Chicago and other midwest markets to operate as a.
"common carrier." The initial financing has been ar¬
.

Light & Power Co.

Nov. 12, F. L. Lovett, President, announced company ex¬
pects to raise about $24,000,000 in the next two years

through sale of bonds, and preferred and common stock,'
viz: $5,500,000 of first mortgage bonds and
$5,500,000'

was

ranged for privately

with

no

public

offering

expected

prefererd stock in 1953 and $6,000,000 bonds, $6,000,000
preferred stock, and $1,000,000 common stock in 1954.

for at least two years. E. Holley Poe and Paul
Ryan, of
70 Pine St., New York," N. Y., are the
principal officers

Proceeds—For expansion program. Underwriters — For
bonds and preferred stock may be determined
by com¬

of the corporation.
& Co. Inc. and

petitive bidding. Probable bidders: (1) For bonds—Hal¬
sey, Stuart & Co. Inc.; First Boston Corp. and Salomon
Bros.

&

Wabash
Bids

Hutzler

(jointly); Stone & Webster SecuritiesCorp.; Lehman Brothers, Bear, Stearns & Co. and A* C.
Allyn & Co., Inc. (jointly); Merrill Lynch, Pierce, Fen¬
ner & Beane; Estabrook & Co.
(2) For preferred—Stone
& Webster Securities Corp.; Lehman
Brothers; W. C.
Langley & Co.; Estabrook & Co. and Kidder, Peabody &
Co. (jointly).
Common stock will probably be offered
for subscription by stockholders.
Sinclair Oil
Oct.
sell

28

it

total

will

Underwriters—Probably Dillon, Read
Glore, Forgan & Co., both of New York.

RR.

be

(12/10)

received

by the

certificates, series D, to be dated Jan. 1, 1953 and
to mature, in 30 equal semi-annual installments from
July l; 1953 to Jan.. 1, 1968, inclusive. Probable bidders:

Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutzler.
•

Wisconsin

Nov/26 it

was

Public

Service

company plans to

issue

issuance

and

of

and

sale

of

between

scription to

stock may be offered late in

comon

termined at
of

bank

after Dec.

York.

stockholders at rate of $100 of deben-'

12 shares of stock held. Price—To be de¬

later date. Proceeds—To retire $40,000,000

loans

Expected
Merrill

a

of

some

and

for

expansion program.

Offering-

time in January. Registration—Expected

18.- Underwriters—Smith,

Lynch.' Pierce.

Fertner

&

Barney & Co. and"

Beane/ both of New
Registration—Expected Dec. 19.

■-

bonds
An

and

from

plans permanent
may

include the

$7,000,000 and

$8,000,000
$2,000,000 to $3,000,000 of preferred

stock)1

tures for each

Corp.

announced that company

financing prior to June 1, 1953, which

announced

at its office, 44

trust

$101,758,900 of new convertible subor¬
dinated debentures, which are first to be offered for sub¬
a

company

Wall St., New York 5, N. Y., up to noon (EST) on Dec.
10 for the purchase from
it of $6,360,000 equipment

Corp.

was

'

stockholders of record

—Equitable Securities Corp., Nashville, Tenn.
Sept. 25, 1950 it

sell $14,000,000 of bonds. Proceeds—Together, with other
funds, to refund $14,482,000 Harlem River & Port Chester
first mortgage 4% bonds due May
1, 1954. Underwriter
—To be determined by competitive
bidding. Probable
bidders: Halsey, Stuart & Co.
Inc.; Kidder, Peabody &
Co.; Kuhn, Loeb & Co.; Morgan Stanley & Co.; The

Natural

stock

common

may

company

announced

was

(EST)

noon

Nov.

announced company

was

2 it

Room

Oklahoma Gas & Electric Co.

Stuart & Co. Inc.; Salomon Bros. & Hutzler.

Northern

(jointly); Glore, Forgan & Co.;

•

13

new.

com^

plan to issue and sell $15,000,000 of
joint 25-year mortgage bonds due Nov. I,11977. Proceeds
—For refunding.
Underwriters—To be determined by
competitive bidding. Probable bidders:- Halsey, Stuart &
Co. Inc.; Kuhn, Loeb & Co.; Morgan Stanley & Co. Bids
—To
be
received by
John B. Hyde, Vice-President,

Tentatively expected to be received on Jan. 20 at 11 a.m.

sell

estimated

Northeastern

(EST). Registration—Scheduled for Dec. 18.

Nov.

by

Co.

Gas

authorized

Southern Ry.
Nov.

Brothers; The First Boston Corp.; Union Securi¬
ties Corp. and Salomon Bros. & Hutzler (jointly). Bids—

Kidder, Peabody
Kidder, Peabody
Harriman Ripley

common

bidders:

Lehman

The First Boston

and

Probable

(jointly); Blyth & Co. Inc.; Glore Forgan & Co. (2)
For preferred stock, Blyth & Co., Inc.; Dillon, Read &
Co., Inc.; Harriman Ripley & Co., Inc. and Stone &

writers—To

(12/17)

announced

expects to receive
on Dec.
17 for the purchase from it of
$11,625,000
equipment trust certificates. Probable bidders: Halsey,

ferred

to issue and sell

— To repay bank
Underwriters — To be

bidding.

competitive

by

Proceeds—For
determined

to construct pipeline
On Sept. 15
it had been announced that the company expects to'
sell additional bonds during the first six months of
1953 in the amount then permissible under its mortgage
indenture, and to provide for other permanent financing
by the sale of additional first mortgage bonds or other,
securities in such amounts as may be appropriate at the
time. Probable bidders for bonds: Halsey, Stuart & Co.
Inc.; Kuhn, Loeb & Co.; The First Boston Corp., Blyth
& Co. Inc. and Kidder, Peabody & Co.-(jointly). Any
stock financing may be via stockholders.

bonds,

For

Natural

FPC

3

facilities

Halsey, Stuart & Co., Inc.; The First
Boston Corp.; Union Securities Corp. and Salomon Bros.
& Hutzler (jointly); Kuhn, Loeb & Co., Harriman Ripley
&
Co., Inc. and Stone & Webster Securities Corp.
(1)

bids

,

Southern

(par $100). Proceeds

preferred stock

loans and for new construction.

stock.

common

Underwriters—To be

include Blyth &
White, Weld & Co.
Tentatively expected to be received on Jan. 15!

—

Nov.

$22,000,000 of first mortgage bonds and 100,000 shares of

Oct. 24 it

(12/4)

York

New York Central

Co.

Peoples Gas Light & Coke Co.

Bids will be received up to noon (EST) on Dec. 4 at the
office of the company, Room 2018, 70 Pine Street, New

Nov.

&

(1/20/53)

Oct. 28 it was reported company plans

the first quarter of 1953.

New Orleans Terminal

Peabody

Jan. 7.

Northwest.
Nov.

Kidder,

and

Beane

;

Registration—To be filed Dec. 12.

—

determined

if Missouri Power & Light Co.
24 it

&

Bids

common

(jointly); Lehman Brothers and Bear, Stearns & Co.
(jointly); Morgan Stanley & Co.; The First Boston Corp.
Bids
For preferred, expected Jan. 13; for common,

Ohio Power Co.

Co.
Oct. 1 it was reported company plans issuance and sale
of a convertible preferred stock issue. Underwriter
A.
G. Becker & Co. Inc., Chicago, 111.

Nov.

For

(2)

Boston

shares of

(1/15)

Executive Vice-President, an¬
plans to issue and sell 500,000

petitive bidding. Probable bidders
Co., Inc.; The First Boston Corp.;

Weld & Co. (jointly); The First
stock: Merrill Lynch,

Forgan & Co. and White,

Quinton,
company

construction.

bidding.

Lehman Brothers.

Mansfield

that

Underwriters

Pierce,

(R. H.) & Co.
Nov. 13 it was reported company may do some financing
in 1953 in the form of debentures or long-term bank
loans.
Previous financing was done privately through
Macy

Harold

2

nounced

Proceeds—To finance construction program!
—
To
be
determined
by
competitive

company.
.

reported company may issue and sell

was

^Southern California Edison Co.
Dec.

a

on

Laclede Gas Co.
Oct. 1 it

subscription by common stockholders of record Jan. 7
l-for-10 basis at a price to be determined by the

for

41

Thursday, December 4, 1952

.

indeterminate

number

1953

of
or

shares

of

common

early in 1954. Stock

financing, if negotiated, may be handled by The First
Boston Corp. and Robert W. Baird & Co. Probable bid¬
ders

for

bonds: -Halsey, Stuart & Co.
Inc.; The-First
Corp.; Union Securities Corp.; Kidder, Peabody
& Co.; Shields & Co.; Merrill
Lynch, Pierce. Fenner &

Boston

Beane; Harris, Hall & Co. (Inc.)? Carl M. Loeb, Rhoades
Co/; Salomon Bros. & Hutzler.

&

The Commercial and Financial Chronicle

Number 5174

Volume 176

(2155)

John W. Shea Joins

Schirmer, Atherton Co,

t

successful

Nickel Plate Road

tificates

Halsey,
-chinson

■

(Dec.

with
Co.

&

winning

in

,

of 99.70%.,

Oct.

priced

1,

New

1953

York,

to

1967,

the

to

to

maturity.

certificates

is

authorization

Interstate

mission.

25

Commerce

firms

The

diesel

new

motives

NOTICES

to

DIVIDEND

NOTICES

.

can company

cost

$3,-

NORFOLK SOUTHERN

RAILWAY

NOTICES

COMPANf

November 25,

and three-quarters per cent was declared on
Preferred Stock of this Company, payable

the

1952

a

quarterly dividend of

to Stockholders of record at the
close of business Dec. 16, 1952. Transfer books

Jan.

1953

2,

will remain open. Checks will be mailed.

by

declared

able

stock

common

Corporation,

of

Middle

payable

on

in

common

issuable

stock, has also
on
January 31,

been

de¬

1953,

to

stockholders of record at the close of busi¬
ness on

not

the

share has been

1952,

26,

be

January 2, 1953. Transfer books will
closed.

Company

an¬

split two-for-one.
A dividend

half

cents

on

the

one-

share has

per
new

Common

December

on

15,

stockholders of record

to

the close

NOTICES

forty-two and

payable

1952,

leighton, Secretary.

1952.

of

(421/2^)

been declared

Stock,

{

G. B.

1,

Railway

that, effective November 10,
1952, its Common Stock has been

nounce

to stockholders of rec¬
ord at the close of business on December
11, 1952. A dividend of four per cent, pay¬

clared,

EDMUND HOFFMAN, Secretary.

the

on

Petroleum

States

December

Southern

DIVIDENDS

A dividend of 50 cents per

Com¬

were

STOCK

STOCK

On

Common Dividend

The Board of Directors of Norfolk

CORPORATION
COMMON

PREFERRED

of

at

business December 1,

1952.

John William Shea

Allen

B. Du Mont

MIAMI

Laboratories, Inc.

COPPER

J. T. Kingsley, President

COMPANY

(Special to Tiie Financial Chronicle)

BOSTON, Mass.—John W. Shea,
has

associated

become

The

with

Rank

Schirmer, Atherton & Co., 50 Con¬
gress Street, members of the New
York and Boston Stock

Mr.

Shea

Co.

and

prior

Company
Preferred

187

Dividend

&

A

'

1952 and

K-

.•

Stock have been declared.

LOUIS,

holdt

Mo.

Homer

—

1

A.

LOUIS,

business

business

not

December

at

Mo.

T.

Stock

vsfest Penn

the close

The

Company will

Electric

close.
john

g.

i

i

igreenburgh,

■

,

.

—-

-

.

■

—

f—

i

Company

(incorporated)

.1

quarterly dividend

Treasurer

November

26,

declared

1952

•

Common Stock

Notice of

in all

phases of television

55^

Quarterly

buMoni

Payable

30 Cliorch Street

on

each

178

payable January 1, 1953,

holders of record

a

i

share

December 29,
of record

December 10, 1952.
h. d. Mcdowell,

The Board of Directors lias this day de¬
clared the following quarterly dividends,

New York 8. MY.
,7r»V«*C'^•'**'*J*1

C.

per
on

1952, to stockholders

Dividends
AMERICAN LOCOMOTIVE COMPANY

Vennie

—

J.

THE

E. F. Page, Treasurer

Slayton Co.

and Fred

"

1952,

22,

10, 1952.

the

of

1952

LONG ISLAND LIGHTING COMPANY

Preferred Dividend No.

Smith

stockholders of record

books

1,

Treasurer.

(Special to The Financial Chronicle)

ST.

December

of

transfer

Y.

seventy-five
lias been de¬

to

of

N.

of

.share

per

payable

November 26, 1952

/

.

.

cents

PAUL RAIBOURN,

.

Two With

(75<f)
clared,

1952.

Both dividends

&
Gardner,
400
Locust
Street, members of the New York
and Midwest Stock Exchanges:

,

close

dividend

extra

B

fer books will remain open.

affiliated with Rein¬

now

Q,

payable January 2, 1953 to holders of

are

(Special to The Financial Chronicle)

is

of

(i,

December

An

a

record December 8, 1952. The stock trans¬

ST.

per

Class

York

December

payable

the

at

December

New

dividend of 25^ per share on the Common

\

Joins Reinholdt Gardner

Keid

Stock,

$.25

shares

and

Broadway,

B.

1952 to Common Stockholders of

record

the

on

of

outstanding

Common Stock

Common

dividend of 75fi per share
Preferred Stock for the

quarterly

(1)4%)

Allen

of

dividend

a

its

on

A

Directors

of

Laboratories, Inc. this day

177

No,

quarter ending December 31,
-•

■

share

23,

with

was

Dividend No.

Common

manager

H. Johnson

thereto

Board
Mont

Class

Mixter & Co.
•'<

Du

has declared

department of the

Boston office of R.

Note

Exchanges.

formerly

was

the trading

of

(it

American

Secretary

to stock¬

December 1, 1952.

the close of business

.

December 19, 1952:

Common Dividend Nos. 112 and 113

have

Dividends

of

($1.75)

become connected with Slayton &

.hne

dollar seventy

five

"r"

cents

Preferred Stock, 5.2,7%, Seriet A
Dividend of $1.3125

shitjre

per
on the Preferred Stock and
twenty five qpnts (25^) per share on the
Common Stock mf this Company have been

per

share.

of

Inc.,

Company,

408

Olive

Street.

Preferred Stock, 5%, Seriet B
Dividend of $1.25 per share.

declared, payabl« January 1, 1953. A special

With A. M. Kidder Co.
.

'

share

(Special to The Financial Chronicle) '

,r

Kidder.

M.

&

Co.,

have been

of

New

BEACH, Fla.—Don¬

York.

Board

N.

25,

November

Y.,

and

for the quarter

1952.

has this day declared
Dollar
ana
xweiuy-iive

One

oi

($1.25)
per
share, being Dividend No.
on
the
Preferred Capital Stock of this
108,
Company,
payable
February 2,
1953, out c<l
undivided net profits for the year ended June
30, 1952, to holders of said Preferred Capital
Stock registered on the books of the Company
at
the
close
of
business December 26,
1952.

31, 1952, and

First

Southern

In¬

The

liquidation

of

declared
on
this
day
a
and Twenty-five Cents

also

Board

dividend

notice

($2.50)
on

per

Love

etta

its

County National

the

in

State

affairs.

of

Oklahoma

for

Mari¬

at

Is

closing

All creditors of the Association

therefore} hereby

are

claims

Bank

notified

to present
the undersigned, at

to

payment

an

extra

dividend

Oklahoma."

Marietta,

G.

C.

at

($1.25) per share, being Dividend No. 160, on
Common
Captal Stock of this Company,
payable--March
2,
3953,
to holders
oi
said
Capital Stock registered on the books
of the Company at the close of business Janu¬
ary 30,
1953.
Common

to

stock¬

DIVIDEND NOTICE

WILSON.

C.

STlj A It I' K. BARNES. Secretary

Pittsburgh,
meeting

a

the

of

Penna.

the

held

today,

1952,
lar

a

cents

and

of

the

.

stockholders -of

business

oi

fifty

cents

Stock of

(50c)

payable

dend,
basis

the

of

one

Common

shares

paid

will

in

payable
on

advLe

to

the

CUMULATIVE

PREFERRED

$.81 Va

close

per

share

of

December

31, 1952)

lieu

in

Common
for

Stock

be

Issued,

thereof.

December
of

but

5.

the

1952.

National

to

is
of

Brokers

Bank

denominations
be

in

which

be

also

Common

close

busi¬

cember

of

Trust

Penn¬

Ross G.

been

declared

by the

ble Preferred Stock dividends

payable January 1, 1953
iness December 3,1952.
MILTON L.

SELBY, Secretary

November 20,1952

Allen
Treasurer

dividend notice

Preferred Stock
A

regular quarterly dividend
of $1.0625 per share on the
$4.25 Cumulative Preferred

The Board of Directors, at

1952, declared

close of business

on

per

De¬

payable De¬

record

December

at

close

of

business

stock of this

Philip Kapinas
December 1, 1952

Treasurer

1952, as

1952,

700

OFFICES

U. S.

AND CANADA

to

special dividend of 50

cents per

year

share

on

Corporation, both payable December 15,

stockholders of record

December 2, 1952.

dend of $0.10 per

ers

of

record at

business

on

the

-

at

the close of business

Clev« B. Bonner, Secretory

RICHFIELD

close of

December 8,1952.

TYansfer books will

not

Oil

be

closed. Checks will be mailed.
IN

meeting held November 21,

per

January 1, 1953 to stockhold¬

15, 1952.

a

8, 1952.

quarterly dividend of $0.15
share and an extra divi¬
share on the
Common Stock, both payable

a

regular quarterly dividend of 75 cents

share for the fourth quarter of the calendar

1952 and

Common Stock

a

Wm. J.

Corporation

Executive Offices: 555 South Flower Street,

Williams

Vice-President & Secretary

Secretary

w

to

stock of record at close of bus¬

RICHFIELD

Board

certificates

McCASKEY, JR.,




are

30, 1952 to stockholders

OVER

•

iness December 3, 1952. 4%
Preferred and 4'/2% Converti¬

share on
payable Janu¬

Secretary and

A

The dividends

issued.

Si A.

of Directors has
regular quarterly

of Directors:

Quarterly Dividend of
$.60 per share

shouid

and

the

DIVIDEND NOTICE

at the

of

Fractional

cash will

1952,
at

Board

The following dividends have

cember

the

on

fifty shares

This dividend

30,

record

December
Mellon

Stock

each

outstanding.

Preferred Stock.
Common Stock dividends pay¬
able December 17, 1952 to
stock of record at close of-bus-

dividend of 31.25$ per

Stock, payable January 1,

COMMON STOCK

divi¬

extra

an

$1,121/2 per share on
the 41/2% Convertible

1952.

1953 to stockholders of record

of record

December 5, 1952.

on

The

declared

DRY

STOCK

$3.25 Dividend Series of 1946

the Common

on

sylvania, on or before December 12,
should

the Board 6f Directors, as follows:

(for quarterly period ending

Company. Dividend Agent, Pittsburgh,

to

Pre¬

dividend

a

declared

share

not

stockholders
ness

business
also

Beard

The

share

CANADA

'

Dividends have been declared by

1952.

declared

per

at

Y.

payable

1952,

to Common stockholders

the close-of

at

Stock

5,

lllll

the Corporation, payable December

1952.

30,

also

Beard

The

share
$4,375

record

December

on

per

the

15,

Common

on

Preferred Stock

dol¬

one

Corporation,

December

N.

DIVIDEND NOTICE

25,

Preferred

on

and

Stock.

LOAN CORPORATION

Directors

three-eighths

($1.09375)

Cumulative

York 5,

Corporation

November

declared

was

ferred

,

dividend of

ninfe

New

BENEFICIAL

of

Board

Allegheny Ludlum Steel

Dividends

Preferred Stock,
ary 1, 1953 to stockholders of
record at close of business De¬
cember 15, 1952; and a dividend
of 25$ per share on Common
Stock,
payable December 15,
1952
to
holders of record at
close of business December I,

wm

$'•

At

of New York

:
m

of

Guaranty Trust Company

Assistant Treasurer,

Brcadway,

120

i

mon

$1.00 per share on the
4% Preferred Stock.

business December J 5, 1952.

checks

D.

Roofing Company

savannah, georgia

,

will be
mailed to holders
of
Preferred and Common Capital Stock
who
have
filed
suitable
orders
therefor
at
this

,

Iron

the close of

office.

McMAKIN,

Liquidating Agent.

6()(' per share on the
$5.00 par value Com¬

share, both payable

holders of record

on

declared

,

SOUTHERN STATES

Fifty Cents

January 15, 1953,

Stores, Incorporated,

the following: quarterly divi¬
dends:

Dollar

One

Dividend

way

the

'the

The

The Board of Directors of Safe¬
November 20, 1952,

ending December

of Two Dollars and

•

Preferred Stock Dividends

Fifty

Capital Stock of this Company

company

Directors

of

dividend

a

topeka

railway

Common and

quarterly divi¬

a

dend of Three Dollars and

Cents

•

„

fe

santa

Corporation, 524 Jasmine

Street.

day declared

Secretary

atchison,

tiie

,

The

vestors

New York, December 3. 1952

The Board of Directors has this

Cents ($3.50) per share on

ald B. Barmack has been added to

of

Treasurer

Nov. 26, 1952

r

December 10,

CARL A.- SUNDBERG

(Special to The Financial Chronicle)

staff

on

December 1, 1952

-

-

With First So. Investors

the

VINCENT T. MILES

per

1952. Transfer books will not be closed'.

South

405

(40^)

declared payable to stockholders of

record at the close of business

staff

Garden Avenue.

BOYNTON

of forty cepts

the Common Stock has been declared

on

payable December 26, 1952. These dividends

CLEARWATER, Fla.—Frank H.

Ruggiero has joined the
A.

dividend

end

year

•

.

loco¬

MIDDLE STATES PETROLEUM

December

DIVIDEND

electric

estimated

DIVIDEND

AMERICAN

are

2.20%

to

the

of

subject
the

from

according

Issuance
J

certificates

The

yield

to

2.95%,

by

037,877.

j

one

inclusive.
-

The certificates will be secured

cer¬

St.- Louis

&

•V annually

the

offering today

RR. 2%%
?. ;? serial equipment trust certificates,
;. equipment trust of 1953, maturing

Chicago

bid

DIVIDEND

Hut-

McMaster

are

$2,430,000

4)

Inc.,

Co.

Stuart

.association

.

a

for

competitive sale yes¬
(Dec.
3),
submitting
a

terday

Sells Equip. TsvCtfs

bidders

at

43

Los Angelei 17, California

tft

The Commercial and Financial Chronicle

(2156)

..

Thursday, December 4, 195$

.

luck

selling its 4% direct Fed¬

eral

BUSINESS BUZZ

loans

loans

Washington..
Behind-the-Scene Interpretations
from the Nation's

•

,

loans

Jf

XjLHtl

Capital

veterans.

were

re-loan

these

other veterans.

it could

funds

that would not be

cept in

case

Congress will be
what to do about completing the
"mobilization
Defense
tration

or

base."

Adminis¬

the Office of Defense

Mobilization will be the agency

this

raise

will

which

The

problem.

install
the physical plants AND ma¬
chines necessary to produce mil¬
itary end items on a large scale
in case of M-day or all-our war.
is how

question

to

Under the tax certificate pro¬

physical expansion of
production capacity has gone
roughly as far as it appears eco¬
gram the

nomic for business to undertake

It,

with government help.

even

What is still

lacking, however,
ItOis in the field of special purpose
industrial facilities. An example
■of such is capacity for, say, pro¬
duction of armor plate or for

propulsion machinery for ships.
The needs for such peculiar and
special M-day facilities goes far
beyond a capacity where there is
any remote chance it would pay
<o££ for business to build it. Even

large and continuing defense

a

substantial

with

program

suf¬
ficient volume to offer hope that

without tax acceleration

wish

volume

of orders at

profit to

a

of this

fiscal

off

this

week's

capacity

announced

recom¬

mendations

for a special pur¬
machine tool procurement

program represents only a phase
problem.' Other

facets

of the M-day capacity program
will come along from time to

time.

without

dered by

fense

Department

suaded
that

under

these
be

can

stall

so

curtail

strain.

no

as or¬

the Office of Defense

first,

survey,

planned

or

industrial
all-out

capacity

Second,

war.

ex¬

prospective

production

seeing what capacity is

were

to

as

Thus,

fore¬

the

if

after

or

will

for

those

there

forward

come

specifications

would

be

produc¬

tion bottlenecks immediately in
case of all-out war, for lack of

industrial facilities.

bombers

would

of

nature

Another

bottlenecks

were

resolved

be¬

M-day,

then the absence
of the peculiar and specialized
would

force

a

delay
in the

months to years
of full production

achievement
in

case

of total war.

This

\

to

program does NOT relate
overall
industrial

capacity,

officials

assert.

There

.thought of enveloping
Increase

in

steel

or

a

is

aluminum

of

capacity

this

"special

program.

purpose"

to

put

in

place highly
serialized physical production
capacity for a volume of output




Truman

Adminis¬

occupant of Federally-supported
public housing.
This

and

liberal,
the

supply.

sugar

has

lower

than

to

tion

if

not

The

to

the

price

of

been

substantially
prices, in rela¬

the

of

prewar,

other

basic

commodities.

So

what,

observers

expect the

new

however,

in

the

these

own

facilities.

be

or

the

and op¬
Officials

position that they want
to persuade private industry to

supply

somewhat.

Tax Attack

mittee
It is also predicted
ers

that

the

farm

by observ¬

cooperatives

tive leaders in the United States.
For another, the new Chairman

maintain them.

of

another

problem,

espe¬

cially in relation to machine
tools, is the factor of obsoles¬
in

military equipment. A
special purpose machine
tool may be designed and put

ation.

was

a

the

assumption
given type of new bomber
on

one

one

thing, Mr. Benson
the leading coopera¬

of

the House Ways and Means
taxing committee, Rep. Dan¬
iel A. Reed (R., N. Y.) is hostile

or

to

Federal taxation of
coopera¬
tives.

will be ordered
of

all-out

three
out

or

war.

heavily in case
If,
however,

four years pass by with¬

all-out

war,

then the

par¬

bomber, and hence the
tool key to
its con¬
struction as well, may become

obsolete.

now

upon

the

housing loans is doomed

which may or may not prove to
be justified, that Eisenhower's

designee for Secretary of Agri¬
culture, Ezra T. Benson, is sym¬
pathetic
to
the
problems
of
domestic

beet

to

go

down to defeat.

When

be

homes

of

subversive

tions

In

earlier

this

considering appropria¬

for

public housing,

House

forbidden

admonition

new

Under the

tacked

was

which
payment

would

of

on

an

in

have

housing

subsidies if any member of
any
subversive organization were an

the

sugar

market, by virtue of

the

amount

of

sugar

that

can

be sold for consumption in

the

continental United States.

Because of its pre-occupation
with

some

phases of

consumer

it

Congress

to

try

to

retaliate

against beneficiaries of "private"

housing

insured

guaranteed

or

the government,

the ban

on

because

of

subversives in public

housing.

(series A) bonds, due Jan. 1, 1953.
and

are

dated

callable

are

at

July 1, 1952
and

par

ac¬

crued interest at any time on and
after July 1, 1953.
Proceeds of,

the issue

general
ments

1953

be used to

meet

require¬

reserve

of

$8,000,000 on Jan. 1,
prerequisite to freeing
making
available
surplus

as

and

to

are

bond
a

from the existing 118turnpike for other purposes
and to provide for completion of
revenues

Belatedly

the

Housing and
Home Finance Agency last week
got around to issuing regula¬
tions banning the future occu¬
pation of public housing by ten¬

mile

ants who

ice

are

subversives.

In

the

Turnpike,
amount

mum

cilities

needed

and

Current

traffic

almost

2V2

tion

did

law

and

committee

without

not

have

that
a

recommenda¬

the

law

the

force

of

government,

from

Congress,

could not alter the terms of the

initially
and

is

would

including

additional

to

improve

handling the
being handled.

on

the

times

within

fa¬

serv¬

in

traffic

forecast

be

mini¬

a

of

safety

abnormal

a

So

the planned retaliation

flopped.
new

the

It is doubted

that

facility i3

the

by

the

expected

volume

engineers

range

in

which
and

1965

1966, according to report.

piece of legislation

on

a

Joins L. A. Caunter Co,

the

Congress will accommodate
public housers .with

new

this sub¬

CLEVELAND, Ohio.—Henry E,
Steele has become associated with
L. A. Caunter &
Co., Park Build¬

Veterans

Administration, in¬
cidentally, is having almost no

WE WILL TRADE:

Campbell (A. S.) Pfd.
Gear Grinding Mach.
National Company

FIRM TRADING MARKETS

Revillon Freres

SECURITIES

CARL MARKS & HO. INC.
FOREIGN SECURITIES SPECIALISTS

50 BROAD STREET...NEW YORK
4, N. Y.
Ta. HANOVER 2-0050...THETYPE: NY 1-971

,

(Special to The Financial Chronicle)

ing.

ject.

Sugar Act, the Sec¬

his power to establish by quota

Smith, Barney & Co., New York
the
Authority's
financial
advisors, announced Dec. 2 that
the firm had negotiated the direct
placement with institutional investors of a new issue of $30,000,000
New
Jersey
Turnpike
Authority
1%%
second
series
City,

Crosse & Blackwel! A & B

FOREIGN

retary of Agriculture dominates

that

attempt of left-wingers

an

Ad¬

ministration.

organi¬

was

producers,
agricultural observers here are

the installation of the

to

were

Turnpike Bonds
Sold by Smith, Barney

The bonds

sugar

predicting that a somewhat
higher price of sugar will follow

made

who

N. J.

present statutes.

Congress

year was

the

assumption,

should

North-*

the

to

$30,000,000 Issue of

that

fairly clear that the

drive of public housers to
put a
special kibosh on FHA and VA

amendment

See Higher Sugar Prices

the

local

charge of Joe E. Masek,

issuing the regulation,
however, HHFA had to admit

PIIA Loses On Subversives
It is

was

by

,

For

given

reserve

of

report

the

The real meaning of this com¬

;;

problem, however,
that private industry can see no
profit in owning them, and since
they would be standby in char¬
acter, it might be difficult ar¬
ranging for private industry to
Still

the

of

members

attempts at Federal income tax¬

the

of

zations.

Cooperatives Safe From

will be fairly safe from further

of

Senate

that Housing and Home Finance
Agency require that no VAguaranteed or FHA - insured

mortgages

allowable

It is the special na¬

them.

own

some¬

the

final version

However,

buyers

the

in

Senate committee recommended

lower

would

down

appropriation.

military

industry

government should
erate

toned

was

satisfaction of commercial users,

,

Kather the problem would be
Iww

the

tively

no

possible

or copper or other
basic mate¬
rial production within the
com¬

pass

Butch? — Everybody gets
mentioned by the State Crime Commission except you!"

out

wash

the

problem

west is in

ambition,

no

big

make

is

Only

theory is that unless these

got

with

this

to

ticular

to

detailed

you

tration, and particularly Secre¬
tary Brannan, have been rela¬

machine

supposed

of from

"Aint

Air

and

securities

in

of

their end

to lower

Jos. E. Masek

specializing

pricing,

likely be installed, then Defense

facilities

The trading
department,

facilities

hundreds of millions,

is

fore

N. Y.

goals for big bombers by

tools

that

The

& Co.,
Syracuse,

per¬

production

landj

v e

s o n

military end items, there would
be

Department to

where

C le

Ohio; L. John-

management

specialized

installed

or

be

can

new

Chi¬
Jaffe,

Siegler & Co.,

money

On the other hand, if the De¬

into

with

cago;

else.

Mobilization, is for the Defense

2or

Dowell,

enough

billion of

offsetting $1

Straus,

Blosser & Mc¬

billions
and

expenses,

difficult

be

York

City;

com¬

machine tools or
another $1 billion of something
new

cence

Basically the approach,

isting

1954

will

ture

problem
lander way for several months,

this

mitted to cutting several

whether private

1

has had studies

special plant

«f

Administration is

new

Gregory,

New

take the

Study Under Way

w

The

a

connec¬

tion to Bonner
&

propriation, would pose a strain.

Government Would Own

deferred.

pose

wire

additional ap¬

an

has

installed

Secretary of Agriculture to

loan. Like¬
wise, tax acceleration would
prove
meaningless, it is said,
without
prospective profits
against which taxes could be

last

involved

if it

such, however, that it
would take a great deal of per¬
suading to get them to reduce
production goals for end items.

sufficient

ahead

see

Building,

Even this machine tool program,

The

jnepay a government

ODM

machine tool pro¬
for example,
was
for
the
expenditure
of
$1 billion in the first year of
its operation, and in fiscal 1954.
purpose

minds

it

Bishop Go.

MINNEAPOLIS, Minn.—M. H.
Bishop & Co., Northwestern Bank

curement program,

budgetwise.

not
money
to

build such facilities, because
couldn't

cial

bombers,

short

would

industry
borrow

to

—

views.)

own

Installs Wires

estimate of the last week's spe¬

machine

war.

Private

M. H.

prospective budgetary prob¬
for the coming Eisenhower
Administration. The informal

substitute

special and additional fa¬
cilities would pay off, with or

may

lem

some

such

of all-out

Among other things, this poses

item

♦orders would not provide a

coincide with tha

or

Poses Budget Problem

Forces

war

not

interpreta•
from the nation's Capital and

"Chronicle's"

a

Production

scene"

may

war.

laid

Eighty-third

refled

to

the

tion

required ex¬

of total

"behind

to

,

(This column is intended

WASHINGTON, D. C. — One
problems which will be
on the doorstep of the new

areas

able to turn these

to investors

over

then

JL fJU/

the

of the

These

which 4%
money
under a
VA guarantee was not available.
If VA

fl/"/

/■

to

authorized for

were

in

Riverside Cement B
Scott & Williams
Seneca Falls Machine

Worcester BIdg. Trust
Preferred

&

Common

-

LERNER & CO.
Investment

10 Post Office

Securities

Square, Boston 9, Mass.

Telephone
HUbbard 2-1990

Teletype

V " •"

•

BS

«fj