The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
Volume 188
i
New York 7,
Number 5800
Price 50 Cents
N. Y., Thursday, December 4, 1958
a
Copy
EDITORIAL
u
it
For some years past the thought of
has not often been far from the minds of
i
i
By DR. ROBERT R. DOCKSON*
inflation
analysts
of the situation in this country. The steady if not
rapid rise in prices, which occurred before the
recession set in toward the middle of last year,
j
1
and
which
when
the
downward
Southern
i
of those who
I
ware
however,
appear
to have brought
great deal of peace of mind to those who fear
inflation in the years ahead. The adjustments
J
the boom ended
*
From all appearances
'
again and another boom—or perhaps a bubble
on top of a boom—may be in the making. If such
should indeed prove to be the case, there are
many who fear that the upward course of prices
will presently be resumed. Kecerit experience
1
;
that
•V*
DEALERS
securities
reason
why
can
be found wherever
a
of serious minded individuals
business
discuss
to
t
year
has been
proven
unfounded.
A year ago many Canadians were
of hope that 1958 would see a
groWth by the
Canadian
economy.
Others
were
resumption of rapid
fearful that Canada
'
the
term
historical fact.
cession
In
This
Calif.
afforded
are
a
potential undertakings in
—
terms
'
'
terms
:
the
•
,
♦An
address
by Mr. Asbforth before
Toronto-Dominion Bank, 'Toronto, Ont.,
-
-
■'
„
will
34
on
of
the Annual Meel
Dec. 2, 1956%
the
Underwriters, dealers and investors in corpo¬
the SEC and
"Securities in Registration" Section, starting on page
State, Municipal 1
41.
.
and
in
-
falling
National Product
Gross
Continued
•
of
point already achieved.
of over-all activity there
a
falling back on the part of the Canadian
.
dollar
In
complete picture of issues now registered with
our
no
act
the
means
back from
A. C. Ashforth
Continued
Angeles,
/
dictionary, re¬
J According to the
economy.
Los
historians
will not regard the 1958 recession as
Canadian folklore rather than an
has been
ciation,
freely
been
has
der whether or not future
and
on page 26
by Dr. Dockson before the California Bankers Asso¬
"recession"
bandied about but I sometimes won¬
is, of course, the fear of inflation
V
headed into
was
depression. Neither has happened,
During the past 12 months over¬
all economic activity in Canada has
moved sideways on a plateau.
The
a
gather
tending.
in. which, the hopes of
one
full
group
conditions
the direction they are
SECURITIES NOW IN REGISTRATION
rate
past
Canadians have not been realized and* their fears have
along with its many accompanying problems. Economic
knowledge has not yet reached the state where simple
26
page
-
fear of which I speak
♦An address
on
-
*
Dockson
Robert R.
seems to suggest that recessions no longer bring
adjustments in prices, and that booms such as we
Continued
The
widely
business system
our
principal
P National Energy Board too strong regulatory powers
over the oil and gas industry. The banker suggests crea¬
tion of a Royal Commission study of the problem of full
employment, inflation, monetary and fiscal policies.
ing discredit to those forecasters who
miscalled the turning point. It has
brought with it a fear psychology
and a half or more ago.
business is moving ahead
a year
i
...
..
gloomy forecasts of last year expeyiepced such a rapid rate of pbsoles/ ceriee.1 However, the economy's behavior has produced something of
much greater significance than bring¬
j tion of price increases—have not been made since
;■
.
^
T supposedly effected during recessions to lay a
»; basis for a lower price level—or at least a cessa^
^
the
was
terms 1958 a relatively good year and expresset cautions
optimism about 1959 but adds unemployment will
continue to be a worrisome factor next year; calls for
competitive world trading in order to meet
more successfully; and
takes exception to recommendation that would give a
turned out to be the briefest
ular behavior of
•
his government to take decisive
initiating solution to the problem of inflation;
increased
has maximum employment.
so
•'
•
-oncoming Russian competition
War II downturns. The contraction phase of the current cycle
lasted about eight months—a period
equaled in brevity but three times
in the past 100 years. This spectac¬
*
:
a
I
as
in business activity that was
discussed just a year ago
of the three post-World
is rather vaguely termed jthe "price level" has
remained about unchanged.
Events do not,
are
The decrease
tended to offset losses with the result that what
,
J
: y
of the growing
policy of the Government
V
•>;«
action in
bank economist opines industrial
be increased to twice the current rate by
intelligently applied. Dr. Dockson, not una¬
hold that the fear of inflation has,'
points out several factors working against increased
prices despite the anticipated increase in production, and
predicts GNP in 1959 will be about $465 billion compared to $440 billion in 1957 and $435 billion in 1958.
Recommends price stability be as much a continuing
policies
concerned about the matter.
is usually the case, voices could be heard,
particularly during the days when business activity and employment were moving downward*
saying that a "little inflation" would be a good
thing* and that, in any event, it could be expected
over the
longer period of time if growth in the
economy is to continue. Prices have of course
continued to change, but of late, increases have
t
can
■
Canadian banker urges
1975 without the fear of inflation if fiscal and monetary
As
were
\t■
California
production
continued
throughout the months
so-called business cycle was on its
side, did nothing to assuage the fears
:
p
President, The Toronto-Dominion Bank, Toronto, Ontario
•
.
By A. C. ASHFORTH*
>
Professor, School of Commerce,
University of Southern California
4
Consulting Economist, Union Bank & Trust Co., Los Angeles
I
U. S. GoYeroment,
Stale and
Municipal
Securities
UNDERWRITERS
BROKERS
STATE AND MUNICIPAL
and
Lester, Ryons & Co.
623
So. Hope Street, Los Angeles 17,
DEALERS
California
Public Housing Agency
Bonds and Notes
*
telephone;
HAnover 2-3700
Members New York
BONDS
INDUSTRIAL
Associate Member American
PUBLIC
&
CORN EXCHANGE
UTILITY
Offices in Claremont, Corona
FOREIGN
SECURITIES
the first national city rank
30 BROAD
ST., N.Y.
Beach,
Pasadena, Pomona, Redlands, Riverside,
San Diego, Santa Ana, Santa Monica
of new york
DEPARTMENT
Burnham
and
MCMBERS HEW YORK ANO
Inquiries Invited on Southern
Company
EXCHANOES
AMERICAN STOCK
15 BROAD STREET, NEW YORK 5, N. Y.
•
t
'
BOND DEPARTMENT
Dl 4-1400
Teletype: NY 1-708
Bond Dept.
New York
Chase Manhattan
bank
California Securities
•
the
Correspondent—Pershing & Co.
TCUETYRE MY 1-22*2
CASUl COHURNHAM
Net
Maintained
Markets
Active
Banks
Dealers,
To
and Brokers
T. L.Watson &. Co.
ESTABLISHED
Members
loblaw co. ltd.
1832
Invited
Inquiries
Block
■
American Stock Exchange
;
Teletype NY 1-2270
•
current
Municipal Bonds j
these rights at the
for California's
market.
private wires to Toronto, Montreal,
I
Expanding
Ottawa, Winnipeg, Calgary, Vancouver,
Victoria and Halifax
Economy
MONTREAL AND TORONTO
Goodbody &
1,1
PERTH AMBOY
Doxmox Securities
i
DIRECT WIRES TO
STREET
*
offer to buy
•
NEW YORK 4, N. Y.
'
(Rights Expiring January 15, 1959)
We
CANADIAN DEPARTMENT
i
25 BROAD
The Toronto-Dominion Bank
Direct
.
New York Stock Exchange
BRIDGEPORT
del Mar,
Encino, Glendale, Hollywood, Long;
BANK
BOND
'
Stock Exchange
Members Pacific Coast Exchange
RAILROAD
CHEMICAL
t
Stock Exchange
Co.
HEW V0RK
*
1 NORTH LA SALLE ST
.
CHICAGO
!
DEPARTMENT
6RP0RATI07!
Associate Member of American Btoek
MEMBERS NEVY YORK STOCK EXCHANGE *
115 BROADWAY
MUNICIPAL BOND
IB
Rxch.
Exchange Place, New York 5, N. T.
TeL WHitehall 44151
Tele. NY 1-702-9
Bmtk of Amctrtra
NATIONAL
J5VINaG* ASSOCIATION
300 Montgomery
St., San Francisco,
i
Califi
2
The Commercial and Financial Chronicle
(2302)
—
Thursday, December 4, 1958
;..
■
A a;
We Week's
For
1
Banft^^Brohers, Dealers only
.
etch week,« different gre*p of experts
fai the iavestmeRt and advisory Md fei ifi sections el tie tilili/
participate and give their reasens lor favoring a particular security.
Try "HANSEATIC"
We
in the abil¬
take pride
ity of our large and expe¬
rienced trading department
to
cover
broad
It
of
range
will
pay
(
ere
contacts.
you
k;
be
distribution systems and serves a
rich
America's
heart of
the
served
corn
New Yort Hanseatic
Bartlesville
the
1954,
Stock Exchange
ment stock with
York 5
BOSTON
PHILADELPHIA
to Principal Cities
Wires
M. C. F.
»
Peak day
load.—v
Sales
•
—
k;kk
489c
^'kk/'kk^
'--'kk
k-kk'
51fe
Industrial
Specialists in
948,528
164,811,000
—A
Average rate:
Domestic
20.3fe
—
■
:
.
Gas Reserves " ;
v
In November, 1957, the Kansas
Mt-nb^rs
New York Stock
mated will
American
ditional annual gross revenue.
Exchange
Stock Exchange
2-7815
keeping earnings
full allowable level.
-msf.
"of BOSfO*'
The company
has
at
after
Request
distribution
national
a
CO., INC*
-
*
I
lines to
w a s
bonds with insti¬
" ."'."k:Vk "v.-:
.
"■
communities.
new
ficers and directors
residents Of the
inent
to
the
mitted)
systems.
meter-'
It
is
is
larly
and
FraAces
industrial
per¬
and
aif-
domestic
and
>
"
most
interesting
to note
48% "load
the
of
Stoite
as
they
Thermal
brought
down to net before taxes.
:
stock.
A
^
'k";'\k.: "■ - ■ ■;
k ;
through
At
the
preseht time, sales are
divided roughly as follows: 70%
from liquid and gas meters, and
tor.;
Also, h
Company,
was
For the
fenfire
year,
'
j
-
Signal
uary, 1954. Also in the
the
Cox
&
Stevens
would not
producer
vestment
require additional in¬
expense other than
or
weighing kits
In
"cost of gas sold."
Earnings have been increasing
steadily and While the sharp in¬
crease in 1958 earnings
<$2.84 per
1955,
k
same year,
was
organization
58
an
winter,
unusually cold
the
past
195$-
record
tion, Superior meters
were
1953
Customers (Yr.-End)
Sales (B.C. F.)...,
Export*-—Import9—Futures
Water meter sales
are
influenced
only by construction of new
and factories,, but also by
1954
1955
sbld
petroleum liquid
meters, another major line of the
company's products, are used in
general industry to provide pre¬
cise measuring for process control,
and in the delivery of petroleum
products at wholesale and retail
■
1596
*1957
497,152
520,635
537,943
553,327
132,063
137.329.,
£45,510
154,590
164,811
$52,170,248 856,361,118 $60,663,750 $63,896,056 $67,496 953
Gross Revenue...,.
44,174,000 51,098,000 61,148,000 63,707,000 65,574,000
--'
'
Wet Income
2,119,000
2,793,000
2,781,000
2,881,000
3,462,000
Per Share
OivWend..tp
il) Bwned by Cities Service
1.86
1.24
to 1153.
i
.
»
lis
Per Year
6-30-58
(1953-1957)
(2)
4.2
W.A.
6.2
N.A.
7.3
15.8
2.31
2i4
45.9
1.36
1.9?
1.36
12 Mos.
68,#1,000
4,266,00(7
152(3)
(1,500,000
i.41
Fischer & Porter Inc.
k'Stonffer Corp.
KeyeiFibreCo.
BOENNING &
k.
1.36
i
CO.;
Established 1914
-y
■
}
1S29 "Walnut Street
.
415
Broadway
New York 6, N. Y.
GO 7-1200
PfaUedelohia 2, Pa
- •
LO 8-0000
ATT Teletyjpe PH 80
Phils.
-
12.1
levels.
Sales
tied to
tures
(1)
duced
I
■
t2) Not tofhparable with 06k 81 Itoutes but reflects « 12-fcwnth
increase of 12,164 tusittrters,
(3) Annual rate effective
Sept. 10, 1958—34c paid in March and June, 1958—38c paid in Sept. |l958
Tran^». Co. 3Cs, 2039
Potono Holds Unit.
r
.
Co.: ;;.-k'
■;»
Reading Co. P/ss, 1995
-
-
Membtrs^hilikJ-BaltJSt6ck\Exchhii^ei
Pennsylvania Bldg., Philadelphia
N.YcPholil
Teletype
-
feH
375
:
'
COrtkkadt 748814
RED#
CROSS
Cotn-
.
474,412
Shares)....•
slightly above
as a proven means bf cut¬
ting waste, and in many instances,
thereby avoided the necessity of
constructing a costly new water
system.
and
Five-Yfear Record
•<
meters
% Increase
Liquid
or
Industrial and
NEW YORK 5, N. Y,
investment Bankets
Broadway, N.Y. 6 COrtiaodt T-5SM
munities that have been subjected
to a Water shortage have installed
share for the year ended June 30, .Neptune
Corporation with
the
nucleus for penetrating the
gas
1958) is at least partially attribu¬
meter field; At the time of
acquisi¬
table to
level
the need to cfenservfe water.
the
provided
same
homes
.
LAMBORN & CO., Inc.
at the
not
acquired.
the
Superior Meter
Company, a small producer of tiritase gas meters, was added. This
latter
k
a
the current rate.
Company,
electronic >• aircraft ?
of
k k!
housing start and the sale of a
meter, consequently, some sales,
attributable to present construc¬
temperature measure¬
part Of Neptune, in Jaii-
a
^
•
the total will
between]
Specialty
became
.
1958. From May, 1958, to October,
housing starts, have risep steadily
to a three year peak of 1,260,000.
an
ment and control.
Electronic
.
A ContinuinglntcrestiB
Sales1 are related to a" large
to the Lumber of annual
exchange k of
partial interest in the probably foe hbout 1,200,000 starts!
for
Inc.
Tokya; Japan
;
Brokers &
111
:;"y:
Sales of water meters in the last
corporation had been held from
1950. This first fifeW Subsidiary half Of 1958 will be above the first
added is a manufacturer of air¬ six months rate. There is a lag of
about three months
craft
components and
wires
Affiliate, of
Yamaichi Securities Co., Ltd.
;kkk:
home
year-round "load" from "Gaslites"
bigby 1-2727
c
-
assured, particu¬
extent
sales, the large
Harness
secured
are suc¬
from such "load" would be
—
^
later
Company jet
tion will be carried Over to the
cessful in building a summer air-¬ manufacturer of highway toll, ac¬
first quarter of 1959.
For all of
conditioning load, all of the profit counting, and weighing equipment,
1959, housing starts are projected
factor," therefore,
Refined
'
'H jtn the Lome water meter field,
Neptune is the largest single faC-
l
interest in Revere Corporation of
America -with its. affiliate, The
•
Company
of New York,
30% frOm- electronic and electrotttechariical equipment.
growth, the remaining
All of¬
not
"Gaslites"
that this company has a
«
Yamaichi
Securities
Wmuw.
Al¬
in this area was
•"
installing large
are
of
feoriditioning, both
Uk
J
'
though growth
prominent
served! They
it
Commercial.
SUGAR
efflcea
stocks
perature measuring and scanning
in : the
liquid
are
area
where
and
numbers
STREET
breedb
the affiliation of Hot Spot's tern-•
.
pre-erii-
f i e 1 d.
aggressive in direct
appliances
(except in
of
Oklahoma
WALL
our
For cnrreiW iiiforttuatioit
■
Prior, to-becoming part of. Nep-
recording : equipment;
mm
also very
are
sales
99
-
i apanese
sys¬
water meter housing starts. In line With con¬
struction afctjyities, meter sales de¬
market held by the company pre¬
and
SEC
clined in the last half of 1957, arid
regulation, has been cluded immediate
substantial in¬
tjuite aggressive in acquiring fedthere was mo resurgence in home
creases in total sales. As insurance
joihing properties and extending for future
buildirig in the early months" of
<
(Corner of Washington St.)
Telephone Richmond 2-2530.
kk
di-k
change in busi¬
ness, Neptune
share
KELLER BRO
BOSTON 9, MASS.
:
to meet
tune, the Revere Corporation pur¬
chased meters from Neptune to
use in a fuel' gauging instrurnent
for airplanes. Revere's wire and
aircraft devices led to the acquisi¬
tion of Electronic Signal Company
arid its electronic weighing arid
p a-
.
quirements without equity financ¬
ing.
-
year t ha t
marks the sig- '
nilic a n t
the
year, They should have no diffi¬
culty in meeting future capital re¬
GENERAL DISTRIBUTORS
*
tune's
gas meters
case
NVMSSr
'k; Mobile, Ala.
Direct wlree to
;
demands. Through Nep¬
national
Corporation, k
In 1953, the,
capital ratio
equity
privately placing $11,000,000
20-year, 4.15%
OF BOSTON
ZERO COURT STREET,
aluminum
if ied
added
tutional investors in June of this
on
..
finest
products were
aggressively
The
of about 65% debt and 35%
SECURITIES
With
vers
produce $1,100,000 ad¬
of
c o m
nies
pany have
been reasonable and
fair and with the very low rates
in effect, there should be no ques¬
tion
Prospectus
-
Consultant, New York City
new
commissions regulating this com¬
BROADWAY, NEW YORK 5
FUND
the
Company's diversification program
is maturing. About five years ago,
C- >-k;k
T
Commission granted the company
a
rate increase which it is esti¬
MCDONNELL & fO
REctor
Mmf*r2+m
New Orleans, La. - Birmingtuim. Ala
quisitions, are two basic principles
—products are utilized' fOf ^meas¬
Nsptufii Meter Company
urement arid control; and arekre-:
Nineteen hundred fifty eight is lated -in some Way to those - of;
the year in which Neptune Meter Neptrine.
controls total reserves in excess of
8V2 trillion cubic feet.
TEL.
(ad¬
existing market with air-con¬
Financial
:
.,
Cities
Service
Gas
Company
supplies 97% of the company's re¬
quirements under contract and
SCRIP
Since 1917
120
ft Reefer It,, New Yirk % IL Y«
the United States.
,
.
t
*
Statistics (1957)
Load factor
RIGHTS
of
.
BAN FRANCISCO
•
moSt attractive
a
•
Private
its
invest¬
an
growth potential.J '
Teletype NY 1-40
•'CHICAGO
Worth 4-2300
Gas Service is
holders.
^
■ ->■-,
~
tem for liquid meters, the mer¬
ditioning, "Gaslites" and other gas
chandising of these gas meters
appliances.
|
v
throughout the country is being
(5) Satisfactory regulatory at¬
expanded. A new dimension has
mosphere.
'
■
kk;.- 'V'"
been opened for the company. It
(6) Stockholders can expect a
can
compete aggressively in this
fair return plus steady growth and
new market to obtain a substan¬
increased earnings.
k.
tial share nf total industry sales;
Gas Service Company common,
In February, 1958 the company
traded in over-the-counter mar¬
acquired
100%
interest in Hot
ket, is currently quoted at 33, to
Spot Detector, Inc., a manufacturer
yield 4.61%, the price-earnings
of temperature monitoring equip¬
ratio being 11.6.
ment for grain storage elevators.
FRANCES STONE
Connecting these ; company* ac¬
Cities Service Company
and is now owned by 15,000 stock¬
Established 1920
120 Broadway, New
wholly-
was
Members American stock Exchange
primarily in the Northeastern part
(4) Management is aggressively
adding new areas and expanding
owned by
Associate Member
American
company
in the country.
Until
Wichita.
and
Frances
—
S to ri e, Financial Consultant, ;
New York City. (Page 2)
Neptune broadened the engi¬
neering staff of Superior, rede¬
signed existing tinease gas meters,
industrial areas and
developed a new full line of
of
one
agricultural and
Joseph,
St.
Hutchinson,
Topeka,
Serves
(3)
Principal cities
Greater Kansas City,
are
--Ak
/■-
■.
1
Members Hew York Stock
(2) Adequate gas supply
jacent to Hugoton Field).
populatioin of almost 2,000,000 in
Co.
Meter
r'-V'
BOoght-^olJ<*—QudiOii
(1) LOW rates assure there will
ho
competition from other
fuels, -,-kk
and wheat lands.
v
k
~
Consider the following:
This company with 850,000 Cus¬
tomers is one of the larger gas
';t-:
tary-Tteasurer, Stephens, Trie.,
Little Rock, Ark. (Page 2)
Neptune
-
Gas Service Co. (Kansas OHy* Me.)
yoiir Over-the-Counter
problems.
'
City,
(Kansas
Verhon J*-Giss, SeCre-
Mo.)
tinue.
Secretary-Treasurer, Stephens, Inc.,
Little Rock, Ark.
i
of our nation¬
wide private wire service
and prompt service in
advantage
Louisiana Securities
>
Co.
Service
Gas
are
management aggressiveness indi¬
cate this improvement Should con¬
VERNON J. OlSS
take
to
they to be regarded, as an
Alabama
and
'/■'■J Their Selections
Hot intended to Be, nor
Offer fo sell the securities discussed*)
(The articles contained in this forum
extremely
an
Forum Rarticipants
A centhraons forum in which,
.
of such meters
hTfe
N.Q. B.
na-TK-nma
i§'Yeett Performance (bf
3$ fmfastrinl Stocks
FOLDER
6N RSquNST
capital equipment expendi¬
that
have
remained
levels since
ter of 1957. The
at
re¬
the third quar¬
improved business
Continued
on
page
1&
UhmtkSMs*
NwYiALEt
Financial Chronicle
The Commercial and
Number 5800
188
Volume
or
(2303)
IN D E X
iivdl
4-'
-V
Articles-and News
By DR. JOSEPH M. WEIDBERG
Financial Analyst
y
Miami Beach, Florida
y-;
Recession, Recovery and
Anti-Inflation Policy
an
;•«.—Robert R. Doekson___1
and illusions resulting from inability
the continued deterioration of the dollar is the back¬
foresee
Page
..
Mail's qoest for security
to
3
The
■f;
y
Ashforth_________tov
875,000
cats & dogs
-
_________
_____________ ___
_
to 1,1 Cover
_ ___
Canadian Domestic and International Scene
—A. C.
v
ground^ against which the^adyantageonsness of stocks;:and:
borrowed money is explained. Mr. Weidbcrg traces the forces
contributing to our shrinking dollar, runs through the gamut
1
_ _ _
counting the special
not
^1'or Illusion—Joseph M. Weidberg-^
their strong and weak facets,
what kind of securities to buy.
He examines the past 20-year performance of stocks and bon^is^
to show theswhys of the flight to > stocks and the gains the
/'///.' borrower reaps which the" lender
of security values in comparing
_
- _i j _ _to±__ _ _ _ _-
breed
the Globe Big Enough for Capitalism and Communism?
,,
—Cyrus S.
Obsolete -Securities Dept.
,
-
toatoiV---tototo/to_____^to___to_^____________v
WALL
99
STREET, NEW YORK
Telephone
«
-
WHitehail 4-6551
r
Dynamic World Growth of Plastics j I
—H. El Humphreys, Jr.__l___to_'____________to-_:___1.____
v
*
C
buy For cask!
we
Copper Cross Currents—Ira U. Gobleigh_'_lil
.
Is-
and briefly deals with advice on
live in New York,
—now
Cover
Insurance—F.
McDiarmid2 /toill
J.
11 /_111nl/
_
: COMMONWEALTH
Outlook—Avram Kisselgoff____to
Of
his brain work overtime
ter
and
-to
sex
il $ t " "ha v e
:j|
,
Dr. J. M.
the-~clay~ be-
j
month before.
'!
;
-...
/
understandable
This
t
the
or
*'* / '
fear,
for
urge
'*
made
1 self
prehistoric
man
deny him-
cultivation;
of.- animals
from the urge to
";±'erni|ps. a
a
/ irtan
K
;/
i
Wc
all
^
or
prehistoric
prenisioric
factories,
mines
of
persons<
persons.
their
^eshfrpm
a
A wag
that for
is purported to
Second
•
tjie
security
wife,'
as
^h'e^l/nt"^ /Most people
-
Insurance
needed.
unit of exchange, so
king.
could exchange immedi¬
ately perishable articles for "cur¬
rency"; .to -be.711 s,ed- whenever
that oi^e
Currency ' had
to
have,
still have, certain
butes
namely,-durability in
could be carried
that
pwted Teadily .and
The
l
•.
.
.
„
f.-
- i-i
form
t
Bapk
•
,
can
Pacific Uranium
n D CCCDD T
have
I
33
>__l
J
Booksheif_^^--_2!L_-_!_^U:---i-.-------
V
i
■
' •
Funds
Mutual
„r,,.
. ,
*
... . . ,
.
,
.
Our
.•
*,
-
Reporter's
.5
/_ /_
Governments
Report.
_ __ __ _
The Security I
—__
—
..
••'
•••*
Jerrold Electronics
.
.
7
.
N*. Y.
.
•
t
■
■-•
j
Boston
•
'
■
Chicago
Schenectady
Glens Falls
Worcester
Topp Industries j'
Reentered
,
•
President
*
second-class matter Febru¬
Subscription
,
^
as
•
25, 1942, at the post office at New
York, N. Y., under the Act of March 8,1879.
•
Editor A PubKsher
WILLIAM DANA SEIBERT,
'
Rates
W» V. FRANKEl & CO.
..
Subscriptions in United. States, U.
Possessions, ' Territories
and Members
S;
?f
in
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i
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year
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of
Canada,
$68.00
f
$72.00" per year.
Other Countries,
-
*
plete statistical issue —market quotation
reeojdk, dorporatioti nCws, bant clearings,
and city news, etc,
Offices: -135 South.
Other
Chicago
3,
111.
La Sail* St.,
(Telephone STate 2-0613)..
Bank
and
$45.09 pes
Note—On
the
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foreign
Record — Monthly,
(Fpyeign Postage extra. ;
account of the fluctuations
of
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Quotation
year.
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Publications
v.
news and. ad¬
Monday (com¬
INCORPORATED
39 BROADWAY, NEW YORK 8
WHit^hall
Other
"
*7 Every" Thursday (general
vertising issue), and every
,j
state
-
N. Y.
Corp. A
ary
;
•Thursday, December 4,1958
!
,
I
Albany
-
t
_
nana-
HERBERT D. SEIBERT;
Permachem
.»
Copyright 195S by William B. Dana
-•
COMPANY, Publishers
Place, New York 7,.
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...
2
r
________
COMMERCIAL and
25 Park
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t.r'D
,
FINANCIAL CHRONICLE Y
Reg. U. S.
:
•
Epsco, Inc.
39
Industry!!^—-4
.^Published Twic« Weekly
...
.
16
Streete_7_/:__
,
/
/>
Alsco, Inc.
-1-
Washington and You
,7
Vl 'O
—
Like
tjie State of Trade and
The
Aitamil Corp.
Offerings_--^-_-r-?_--^^---_^---_--__l 45
,
-
Chicago
r
15
27
You—By Wallace
,
Cleveland
Philadelphia
..
Los Angeles
Dallas
47
Registration.i__——i--—
The Market... and
\
Direct fTifcs to
.
___-i___ai____ 23
Securities Salesman's, Corner.
•/
—__ _ __ _
-i—
Security
Prospective
1-
a
Railroad Securities
in
/ 1
San Francisco
May-^—a
Wilfred
!
40 Exchange Place, N.Y.
Teletype NY 1-182? & 1-4844
14
Public Utility Securities
-
& MaCKIE, inc.
HA 2-9000
'
•
Our Reporter on
Securities Now
is still the
get security
Singer,Bean
46
—
Observations—A.
(ICTDPIt
^ROAD ST., NEW YORK 4.
-
.
••
'
WILLIAM a; DANA
25
Request
on
8
15
20
,,
1
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IIlMIIIIILP OlUuhO
.TELEPHONE BAnover 24M0
Prospectus,
8
___"
News About Banks and Bankers:.
'
-
*
48
;l_.
:
.
Security
York Stock Exchange
Reeves Soundcraft
Washington Ahead of the News—Carlisle Bargeron_:._" 7
■ •••«
,
,
'
;
.
Spencer Trask & Go*
,r
Papercraft Corp.4
■.—Cover
Stocks
Indications of Current Business Activity-_____
periods which may run for many r
years, known as good times* dqij-'
as:
dqcJ
'
'
/?
Continued on page £o
f"or many years we
New
•
,
W. L. Maxson
Regular Features
4v
and Insurance
-
as I it has '
hundreds,, and \
one
39
"
;
Company
Members
City
Salt Lake
.
37
_____/
j^nzig: "Hedging Against Inflation"r----——---------------
_
.
Direct wires to Denver St.
23
Dealer-Broker Investment Recommendations
1
-
specialized in
>
-
JCY 1160
in GNP in 1959 Forecast by Prudential
Company
Business Man's
!:■
'
'
DIgby 4-4970
Teletype:
18
(Boxed)-^
As- We See It (Editorial)-!-',
. ,7 ;
1
Illusion
years,
.
_
/
Produces
/^;. j.
i .' • ;
not illusion?,, ,.7.7:,,./,r,
7 7Of
course
there ; are
certain ,
.
metals, in the form of coins
with the stamp, of the ruler to as.-
of
many
of
same—how
tare
Program
,
*'
and
not
,.
for.
thousands
trans-.
would
1 Exchange PL, Jersey CHjr
jx
14
Purchase
\!
1
problem Joday,
existed
v?J^or ^"ying
>
■
and
attri¬
a
and
.
.
.
Instead
...
•
should/
/. .'
/:
Age Old Problem of
wanted.
Uranium
*%<■?&&&#*eit
-r.l
- •/
rity, it is the same urge that exists
alike with the peasant and the
ultimately led to the
Co., he.
&
.
XI,e la5d Construction Outlook Previewed by W. R. Wilkinson
their earnings in the form .
.<securitie^» although security "
may
be achieved toy a few /toy;
robbing, by shady deals and by ;
conquest.
Whatever
the
means;
used for the achievement of secu¬
the, problem of spoil¬
AEC
at
Salvation
Own
.
Qf
change of goods one had aplenty
a
Method to Provide Security
a
Comings Events in the Investment Field----;—:.
of the employee ^ / Gi
well as that of the
save-putling aside
some of
Then there arose barter,, an ex¬
age, which
creation of
_
~'/:•
is often ephemeraL If
employer or money l earner
^e
tlian
Look
S34 Billion Rise
jg entwined with, that ofThe burden of achiev- ; :
empi0yer>
preventing
better tnan those that nature
bener
inose mat natuie
Y There was
1_ 1
was
<
•
for goods one
__
previously carried in the Nov.
errohcously attributed to Don;
Continental Illinois National Bank
; 1i
.
.
. '
was
•
Their
•
man.
The
provided by itself.
*:
_L_ _1 J_* 1
/Pleasure Rather Than Pain___
:
even
article
*
,
I eonlpensaUon
1
_______
Krerisky's
Against Inflation. (Retter to Editor)
^
;
V J*" 4re»n securing the wild grow, iails (loses his security), then the
; ing
grams and beasts. He- may
<r>rniitlnvS from "thp secLU'^y of
those dependent ;,
have seen sprouting irom tne ,1Df>n him vanishes and there re- *
sprouting from the Up0n him vanishes and there re
| ground vgreen plants, similar to majns nothing but an illusion—a
the ones he was well acquainted (toeam that failed
' r
< ' r1
,,
WILCOX-GAY
7
^1111 1.1 J
Hf embers Spit LaJte City Stock Exck
one
woman,
a
jng security is left to the man./;
or
?
own
WOHapn
with the weather
inclement, and
being
•
Mr.
Sapiuel Boksenbom Suggests
type of money is the best security *
—matri-money.. The late of most •
|; forgot about ft; for some time until
he felt hunger^
BASIC ATOMICS
16
J. F. Reitty
farms, leaving the matter
arose
freshly killed animal, and/later
a
•
&£%?&&&
hf wmrw anrl flpsh frnrrV
his exj^ss of g'ain^and
NOTE:
issue but, through error, tbe authorship
C. Miller, Second Vice-President of th^
Trust' Co., Chicago.)
security to his employer in
exchange for "birVork^and his work and ;
freedom, whether the employer^
be he himself cr another person if
he himself cr another person v
decided-to hide underground
pyppm
is will-
to
his
have savings, so
with security
provide one
later ;1pn.
Perhaps
to
as
>
and
-
domestication
slave " in
:
ing
in^, sPecV,
_or the -soU, and
?/?
word "security." /
/To attain security, man
brought/about savings —the first
1S
(ED.
derived
is
investments
of
the
from
savings—of food, of wood to make
fire, of a mate to be there at
times, etc.
-
' 1.
'J,Milton J. Krensky_
"securities?
employ today for various
we
types
of his acquisitions for
when he would not be
secure a new supply. This
a;
WESTWATER CORP.
'<
-
The Danger of Inflation and a Program to Combat It
■'
•
Security;/;.;/;-; t
Note that the word
that
day
able to
'
-
some
the
I
.
over
different forms of
t
this
survival,; undoubtedly
;
,
precious,, stones, j.
products and land — all
natural
.
;
PERMACHEM CORP.
chips, ' jewelry,,
,
week /before,
the
fore,
-
of Oil Shale With Crude Petroleum
v; ;
Prien___:—to-----—_c__
■/'.■",V ->1'■ i:
'-'1:
'2 •, "'l';; ■:
^^Inflatfon and Financial Planning—Roger W. .Babson___
/// S. .to, •//.'
the minds,'1 the
.w* hearts and aspirations of man.;;' "
7 As man progressed, there arose *,
Weidberg
other, "forms
of savings desides *
curity 'had
had
i
it
12
"
•
in Tniliiv'c 1VTnt«ta-<) or A TVTirLrof
to have securityi.was.1 • FNMA's Role in Today's Mortgage Market
this life, and with •/ // —J." Stanley; Baughmani;
i__totototo___
a hereafter implant- */'"'to /
:
■
to
<
; /' > '.V to*
urge
belief in
wiveg and.servants.,
A-This gives a very pointed indi¬
cation: of the. strong hold that se- ;
early as a re-;
sjiilt of coping
i:.with insecu/ rity, for -thei want today of
one
was." f FNMA's Rnle
/.were ■ often * provided. in the1 tomb
with H'oins, ' j3weiry,; food,
tools,
§ far i S^iiyy erry(OM
what
spfiiritv
Budget
ving itself in the religious, eodos: of//Competitiveness
many people, the rich -who died>lf; - —Charles H.
dy:^s^urity,
■[ m
Balanced
to
The
the
ultimate
hnvn
in
not "limited
.
j- security;> /V^to
y
The urge,:
Lf
lirc/A
REFINING
other
•
Th«
is the drive to
"J- gain
were '
La Government Bonds Requires a
of .."currency,including /
jewelry, certain types of rhard-to- i i~-__ii<'x: Spencef-:i_lj-llll_.'iil:__.ii.
find stones; shells, etc. /toto-T'v/'1'"
V *.
■ to/.
physical urges
lor food, shel¬
?
there
course
1
types
! the,primary
18
exchange,
subscriptions
must be made in New
remittances
in
for
t
..
.
*
4041
•
Wire
te
'
■
and) advertisements'
York funds.
,
Direct
PHILADELPHIA
.
-t
-
4
The Commercial and Financial Chronicle
(2304)
vehicles
market
low
Enterprise Economist
on
but
of
are
turn
of
its
to
So
looked
prices
copper
on(j
Congo
and
ended,
production
*
Chile
Chi}
lapsed,
the
to
bougamou into
feverish
prorr~1
Ex¬
duction.
ploration went
at
on
Cobleifb
a
mad
marginal
pace,
mines
"•;/
Company is the
around 40%
animate every
mine from the
seemed that the market had not
only stabilized but gave promise of
a fairly solid price plateau around
the 30c level. But no, the strikes
46c a
pound, only to
War,
had
a
.
.—
r
dazzling highs to which
they
now
longinly look back;
while the major dividend payers
displayed an earnings curve that
looked
like
a
successful
flight
chart at Cape Canaveral.
It was
; just too much.
In 1956, 1,117,580
;tons of copper were produced in
the U. S.
(the first year in 27
years to cross one million tons),
i Demand
faded, marginal mines;
closed and, within two years, the
price thudded back to 25c a pound.
It had advanced too high, too fast.
The evidence of the recession, and
the fact that at above 40c, substi¬
tutes, especially aluminum, moved
in, took their toll; and a new look
at the whole supply/demand structure was requisite.
By the end o£ 1957 many marsome
finaI
down
because
they couldn't live
a
price below 30c; and the
major producers, here and over¬
seas, embarked on a program of
voluntary curtailment.
on
By June of this year things be¬
gan to look a little better.
First,
an
old tariff, set down in the In¬
ternal Revenue Act of 1932 at 1.7c
comfortable
of
25c
production
present
*
]owes^ cost producer.
enter
to
30c
production
0peratjng costs
an
>
all
of
1959.
Its
any
qq.iqq thousand
()^
in
expected to be
other mine,
indicated annual output
lower than
wjtp
chance
Chi-
new
are
even
What
A
gl Salvador is expected
jean
laded.
below.
or
its
re-
Almost
fr0m Chile and its open pit
comes
Well just where does that leave
us
now.
Will copper dip again
to
-0f
70%
own
of the estimated
jn the free, world.
serves
government
major
tons,
Further,
about the immediate future. If we
get a decent supply/demand
equilibrium at 31c or better, a
on
the
Announcing NewlEdition
and
dicated
:
the
leading
U. S.
owned).
is in¬
employees,
company
44,000
over
.
tlv,...-....
electric
power
rising steadily and
machines and
^en
dend
electron¬
Anaconda
sold
at
in
3
1932, at 174% in 1929 and quotes
around
at
ically operated and controlled.
Rising industrialization all over
the world is building heavy long
homes in the
been
achieved.
arid more
processes
has
paid in each year
since 1936,, the largest being $5 in
1956, when record per share earn¬
ings of $12.85 per share were
production
more
.itlo
to distribute about threefifths of net, and some cash divi-
5E
dumping other metals is shy
of copper and a large buyer).
On the demand side the long
range in the U. S. is favorable
with
59
a
at 31c,
share....
Cerro
also
an(* aiJ
earn
de
earn
$8
erties
If
today.
steadied
$8
"A"
Pasco
$2.50
a
copper
earn
should
copper
share this year,
C0PP^> ^ too, could
share. Its mining propin Peru, primarily, in
but also producers of lead
a
and zinci
Cerro has
a
number of
refining and fabrication plants in
the U. S.
In addition, together
-mand like that!
with American Smelting, Phelps
As a defense against inflation
Dodge, and Vermont Mining, Cerro
companies with large reserves, is in a
and
de-
a
$100 million joint .venture
(its share is 16%), Southern Peru
Copoer
Corp.
This
enterprise
low
cost deposits would ap¬
in a favorable position, and
particularly attractive would be
those companies which have good
copper deposits in close relationship with some other ore such as
about 250 million pounds. Cerro is
Geographical list of active Trust De¬
nickel
a
partments' in United States,
Turning to the supply side, even
assuming a substantial and steady
long-run rise in copper demand,
tions are right> an exciHng mon«5r
pear
Directory of
TRUST INSTITUTIONS
of
assets,
Trti6t
and
and
names
of
officers
including
in
Investment
Trustee
charge
divisions,
there
Nominees.
that
Valuable for Corporation Financial Of¬
ficers. Investment Houses and Securi¬
ties
Dealers
With
over
funds
under
$100
billion,
in
administration,
partments of banks and
•*
Invested
trust de-
trust
compa-
nies represent the largest single
of
institutional
stocks
and
growing
investors
bonds
source
of
and
a
equity
in
,
.
group
corporate
continually
•
capital.
Pre-publication price: $10'
HMCURY PUBLISHERS, INC.
(Publishers of,"Trusts and Estates" *
since
<
n
.11
D«pL D
c
a*
i
can
ci
it
v
^ New York 17, N.Y.
=======
some
huge stores of
be mined
reserves
.enter production next year
a£ a?«i?
annual rate of
?°
wide mover and, when condi-
maker.
At
considerable
ore
real
of commercial grade ores.
pendulum,
and 71 y8—over
n
monthg
You
have
a
between
31%
around 44 It has
a
wide
.
selection
appeal
for
ago.
;
slower rate of recovery with the pre-:
during the first half of 1959, but nothing
boom proportions will immediately follow.
of
.
.
With
,.
sharp increase in activity in the automobile industry,
physical industrial production will move up substantially-
total
in
the
few
next
slacken
rise
a
hi
months,
somewhat.
and
Much
manufacturers'
of
then
the
rate
of
expansion
will■*'
increase will
the
be
the result
of
a;
new
orders, which in turn will reflect a'
slow but steady improvement in capital
spending and consumer
buying. There w ill be some re-accumulation of stocks early next
year, reports "The Trend of Business" in the December
Consumer buying, especially of durable items,
stimulated by record levels of personal income.
..
employed will
move up
number.
'
"Tt\ adds', will'be
The number
of
slowly, "but will not match the record level:
until sometime during the
latter half of next year.
The rate of
unemployed will continue to exceed the levels that existed before
the recession got underway.
;
"
•
As the recovery moves closer to completion
consumer; prices!
begin to resume creeping upward due to an increase in the
supply, higher wages and production costs, and, perhaps:
most important, a rise in consumer buying.
Retailers
are
banking
pull overall volume for
further
states.
on a
1958
.
record Christmas selling season to
up
to
or
slightly ahead of 1957, it
'
,
Employment conditions for the nation-at-large reveal that
unemployment dropped in most of the nation's 149 major indus¬
trial
in
centers
October and
November, according to the United
bi-monthly survey.
States Department of Labor in its
Employers surveyed by the department in the same period
optimistic that the upward trend in hiring would continue
until the first of the year, when the usual seasonal increase in
idleness is expected.
were
In a separate report for the week ended Nov. 15, the agency
said the number of workers drawing unemployment compensation
56,000 to a total of 1,775,100, reflecting ''seasonal influences"
rescheduling of claims because of the Veterans Day holiday.
total rose 136,400 to 1,493,600. This year's-figure,
added, represented 4.2% of the labor force com¬
pared with 3.6% a year ago. Insured unemployment, The agency
stated, usually begins to rise in late October, but this year the rise
and
A year ago, the
the department
has been somewhat less than usual.
,
New claims for
unemployment insurance, reflecting new lay->
ofis, rose 38,800 to a total of 329,000 in the week ended Nov. 22,;
the department reported. Initial claims in the like week last year
rose
52,500 to 354,000.
There is
lot
V*
(
<
>
P
-
,
zip to the steel market this week ''The
Iron Age," national metalworking weekly reported on Wednesday:
a
more
last.
It
noted, that steel
order volume is heavier and
more
steel
coming into the market, but the main support is from;
automotive, which has been prodding the market with rush orders
users
are
for December delivery.
The
auto
..
companies are going lull-speed ahead to snake, up
strikes. At the
for output lost due to
same
time, new model, sales-:
Continued
on
page
patient
We maintain active
trading markets in:
Commonwealth Life Insurance Co.
Gulf Life Insurance Co.
Earl Wilson Director
Jefferson Standard Life Insurance Co.
Of Investors League
Established
1919
Congressman Earl Wilson of In¬
diana
has
Board
of
been
elected
Directors
of
to
the
R. S. Dickson & Company
Investors
-
League, Inc., according to William
Jackman, League President
-
Investors League, Inc. is
a
na-
..
established in 1942.
<
^
INCORPORATED
Member Midwest Stock Exchange
r
ganizatio„ of Individual investors
of
year
somewhat
but
CHARLOTTE
Atlanta
'Columbia
-
.
a
recession peaks matched
a
100%. swing in tional non-profit, non-partisan or-
.
reported close to those of
were
cnppiilatnr«!
between 25% and 43; and
Magma,
.
Sales
sP®cmaior?*
if the price is
Putting money in copper shares
is, quite frankly, not for the timid
but for the bold intrepid
investor,
as price
swings, even in the higher
grade copper equities, can be quite
nerve-wracking.
For example,
Anaconda has, in 1958, ranged be¬
tween 40
and 63%; Inspiration,
a
before.
Forecasting the prospects for business and industry in the*
coming year. "Dun's Review and Modern Industry" looks for a
,
right. In Rhodesia and the Belgian
• Copper is not a sensational area
Congo; in Chile, Mexico and Peru; for investment today, but its fuin Arizona,
Montana, Nevada and ture has considerable lustre.
Michigan; in Quebec and British
Columbia, there are vast known,
1904)
======
are
week
rose
could
are
copper
United States. Cop¬
could sell at 50c with
trade, numerous early Christmas sales promotions,
unseasonally warm weather in many areas the*
past week, thus increasing total retail trade moderately above the
earnings,
net per share
011
the 10,714,627 shares of out¬
standing common should run at
about
$2.50 this year providing
some
coverage for the indicated
$2 dvidend.
Dividend policy has
thing of the sort is already under
been
"As for retail
•
offset the effects of
money
About
some¬
-
will
net
working capital of
$200 million.
might perhaps stabilize
world copper production on some
sort of national quota basis. (This
discuss^
two years and see no signs of a let-down in
1959, Clifford
Coons, GAMA President and executive Vice-President of the
Co., reports.
/
Rheem Manufacturing
and
point;
an
out through
wild idea since
its
by
than
V.
130,000 stockholders, a gross prop¬
erly account of above $1 billion,
Nations
a
'
the
in
size of the
The
Committee within the United
is not such
fabricator
Cable Co. (70.6%
some
worked
also
Company
(with 12 plants), Which it owns
entirely, and Anaconda"-Wire and
government may possibly resume
agreement
•
is
through American Brass
for+P.°^p1er }°,
some
silver, manganese
aluminum.
copper
higher than that, lest aluminum
enlarge its inroads).
It is on the longer horizon that
we
see
a
brighter picture.
Our
at
zinc,
Anaconda
hence, that would seem to be
about par for the course.
(There
are some in the industry who are
year
stockpiling
of
ducer
can
per
of
-
,
In fact, more than 550 members of the Gas
Appliance Manu¬
facturers Association have just recorded their best month in more
continued
companies
copper
does
pound, but perennially sus¬
term demand for copper.
Think
pended, was imposed. Strikes be¬
what
a
demand
there'd
be
if
came epidemic on a world-wide
honies in countries behind the Iron
basis, and weeks of production
Curtain
had
TV
sets, washing
were
thus lost not only in the
electric
refrigerators,
U. S. but in Canada, Africa, and machines,
toasters, etc., in the same ratio as
South America.
a
volume
Production
Business Failures
The nation's filth-largest industry, gas and
gas-burning equip¬
ment, claimed to be the first major industry to make a complete
recovery from the effects of the recession.'
•
in
.
1956,
levels in the months ahead.
sec-
company
^curtailments. chiquicamata Mine is perhaps the
British
dreams
and
copper
and is believed to
planned to sell some of its surplus,
and once again copper-got fluLery
Stabilization
]argest
it have to get above 40c Anaconda has the most diversified
copper
again, where high earnings for all 0perati0ns. It is among the largBoard blossomed and burgeoned can be realized? And .what about egt American producers of uraninm cmrl
like the rose—a yellow rose, that inflation? Aren t metals supposed nium and nf»rVinnc
nf
perhaps 40% of 1958;net
is
Granduc, Jviiemoe, Man- to ue gwu ucjcuscs; Frankly you will come from this source. The
uranauc, Kilembe, Maribe good defenses?
time, Temagami, Opemiska hit, in can't glean too much optimism company is also an important pro¬
the lowly priced
on
the Toronto
and
shares
—,,
Auto
Industry
-
Anaconda
and inched back up again hitting
29c less than a month ago.
It
price
since the Civil
.fields day,
Food Price Index
ing evidence of increasing demand with the main support from the
automotive industry to make up for lost time due to strikes.
later
U.
"
The trend of industrial production continues to
point to higher
.Steel order volume this week is show-
we
fire-sale
a
highest
.
and
more
a
mind
Commodity Price Index
"
Exchange, Rhodesian Selec¬
selling at 2%, and Roan
Antelope (neither a horse nor a
gazene) at 5. For those who favor
shares
.
Retail Trade
State of Trade
Stock
COpper
<
Output
Carloadinis
some
conservative
Electric
one,
tion Trust
.
fra
good
highly respected Rhodesian producers on the New York
Copper is a wonderful conductor U. S. demand side, electric equipoi electricity but its copduct in the ment and electric utility purchases
market" has
been
most
erratic, picked up, construction and millFrom
pretty
a
Opemiska, at $8 in Toronto. There
are
trends in demand
the volatility of copper prices,
production and the suitability of copper shares in an
inflationary economic climate.
and
and
$2,
Steel Productian
The
Temagami and Granduc both be¬
By Dlt. ffiA U. COBLEIGII
Thursday, December 4, 1958
from.
choose
f There are giddy long shot specu¬
lations such as Maritime at $1,
Copper Cross Currents
Some notes
to
...
"
'v
Direct
NEW YORK
Greenville
Wire
to
CHICAGO
Raleigh.
All Offices
Richmond
,
-*
36
Number 5800
188
Volume
.
.
(2305)
The Commercial and Financial Chronicle
.
5
terest; while only 2% is charged
Is the Globe
Credit is extended sole¬
loans.
on
Big Enough lor
he
own
ean
chooses
which
Chairman
Chairman of the Board, Steep Rock Iron
-
•
THAT MARKET OLD-RELIABLE
'
industrialist
'
:
dentisl address.Ironic, and -significant at least to • the
short-term course of inflation, was last week's
.
sharp break in. copper prices, with a 2^2-cent
decline to 28 cents; particularly in the context
long-continuing stay below the 46-cent
price tag of 1956.
V - v-v*':
of
•
its
-
to
is being
inflation-consciousness
that
1
abroad, creation of larger and
"
As
the
1948
with
total
in
rise
the
wholesale
price index
ited the
has
exerted by labor strength so popu¬
inflation stimulus, does not move on a one-way
wage rates petered out in 1958, along with
actual weekly earnings. And wage inflation during the 1960s may
Even the upward pressure
street.
as
an
rise
The
in
convince
that
by the major addenda to the labor force from
the rising birth rate of the wartime 1940's. And there, are the de¬
well
be forestalled
flationary implications of the budgetary reduction of
stabilizers.
within,
Cyrus 3. Eats*
the holding
Is
of common stocks
"inflation"
exploit
out
trotted
function
as
as
old
the
a
market
reliable
to take into account and
influence
bullish
(to
be
arguments);
recurrently
or
is
their
directly to protect him in his own cost of living problems?
the market record shows that it has been so ex¬
If the former,
ploited far in excess of what was warranted; and if the latter,
one
must recognize the uncertainty of correlation between the
stock market and cost of living.
We have many times demon¬
strated that inflation in the economy has been far from a one-way
affair—with any
tendency toward one-wayness in peacetime being
has been frequent
And as we have demonstrated there
downward.
divergence in this and other countries between economic
when it does occur, and stock market behavior.
inflation
Vital Offsets
plant capacity, with the immediate ability to over¬
come any shortages appearing, remains as the airtight forestaller
of inflation—from the stodgy textile area on up to the glamorous
Surely
"new"
our
metals.
wishful
gpite
diehard,
reported cutting new refinery equipment costs by
year, according to President E. V. Murphree of the
Engineering Company. As a complete counter¬
action of the "inflation" factor, drilling costs have been reduced
ments
are
about 5%
a
Esso Research and
by two to three percent a year by
engineering improvement.
Thus, "inflation" is seen to be largely endemic to
the stock
with the investor having a strong vested interest. At
the same time the market's action itself casts considerable doubt
market,
on
the actual importance of the
than
as an
excuse
inflation element in a role other
required. For outstanding
for bullishness when
big market rise have been the utilities and the insurance
stocks, although both groups tend to be hurt rather than helped
in the
by a rising price level. Incidentally, the rise in these "deflation¬
ary" market sectors will again be brought forth as appropriate
hedges, if and when
we ever
tail around into a hear market.
sandy
-
The
Union
headed
Soviet
of
de-
on
Socialist love of
Republics occupies the largest land
area
of any nation in the world,
and
its
200,000,000
people
are
swiftly to make the
moving
most
ut¬
of
re¬
the
of
broad
that abound
sources
array
in
and varied terrain. You
with
this
sense
of
their vast
are
both
struck
distance
wing your fast
way the comparatively short 1,000mile journey from Copenhagen to
speed
and
Moscow
as
you
by giant Russian jet plane
in two hours.
-
Your impression of
inforced
ple
as
you
speed is re¬
observe the rapid
we
Americans
must
Russians
are
their system. In the 40 years
since their revolution, they have
on
,
made immense material and intel¬
Russians
the
With this
ftrBt~'nucleaf
is
chain
reaction
and peace.
peace.
Pravda, Iz-
Mr. K struck me as a powerful
leading personality, utterly lacking in the
papers, as well as a number of pretense and pose associated with
magazine editors, and the head the stuffed shirt school of pom¬
of Tass, Russia's wire service.
I pous politicians and statesmen.
hardly need point
out to
this He is strong of body, intellect and
sophisticated audience that Soviet will. Short and stocky, he seemed
journalism differs markedly from hardly more than half as tall as I,
American, but I do want to stress but twice as broad. He looks as
that I was impressed with the in¬ though he takes good care of his
telligence
and
ability of these health.
Natural
and
down-toleading editors. I also had private earth, he gives frequent evidence
conferences with ambassadors and
of
foreign correspondents of leading
humor.
enjoying
good
a
city streets and country roads.
simultaneously observe that
they must be ardent devotees of
physical fitness, for they combine
powerful physiques with abundant
good health. Watch them at their
jobs, and you conclude that love
Khrushchev
Russian
Leaders
Are
Able is also distinctly
Able
'
&
Co.
Members American
Stock Exchange
120 BROADWAY,
NEW YORK 5, N.Y.
WOrth 4-0300
Explains Why
for
the
men
government,
ing.
I met
;
Russians Are Eager to Learn
MAJOR LEAGUE
/ As you visit the Soviet schools
and
libraries, you are impressed
ago,
years
Secondary stock distribution is "secondary" in
at
name
As
the almost uni¬
nation in which
80% of the people
same
only. It calls for first team talents to avoid
upsetting existing market prices.
one
of many
has handled
•
That's major
time, one must not
financial specialties, Stroud
secondary distributions for 38
league experience.
years.
;
nations in cultural fields.
STROUD
Some of the world's literary mas¬
have been produced by
terpieces
Russian
writers, and the, theater,
the opera
and especially the bal¬
let, today as in the past, flourish
and
excel
Cable; TITULOS
in Russian
hands.
The
6c
♦
*An
address
24,
■§
"
INCORPORATED
St., Phila. 9»PE 5-7330
*
'
particularly in Lenin-
•
Economic Club
Nov.
COMPANY,
123 South Broad
!
museums,
■
of
Russians Want Peace
.the word
thusiastically performing tasks '
that we normally consider the ex¬
clusive province of men.
At the
Members New York Stock Exchange
sense
countries.
could neither read nor write.
Oppenheimer, Neu
was
pro¬
forget that Russia has traditionally
held
a
position of
prominence
r.
take
of the fact that the
enthusiastically sold
Mr. K expounded in detail the
who had Russia's
reasons
why the Russians want
industry and bank¬
peace.. First he cited the colossal
with seven cabinet cost of armaments, and pointed
members, numerous other govern¬ out
that, in these days of astound¬
ment officials, a number of indus¬
ing scientific progress, today's ef¬
try leaders and the head of the fective weapons may well be ob¬
State Bank of Moscow.
Let me
solete six months from now. The
of hard work occupies a high place
say a
word concerning Russian
in their credo. Especially striking
Continued on page 22
banking. Deposits draw 3% in¬
is the large number of women en¬
the
among
»
system for the Rus¬
On the other hand, I
our
way.
vestia and Tried, the three
with which the Russian peo¬
they walk along
You
40
of
name
trade
full cognizance
reminder of Rus¬
I met the editors of
move, even as
fail to marvel
business will be conducted under
the
to
produced. jjWWnt.
•'
.V'L'Vr
*
From my 90-minute1 interview
nounced. trait,, I. feel there goes
hand in hand an overwhelming with Premier Nikita Khrushchev,
desire for peace.
Here, in my I believe I gained some insight
mind, lies great hope for the fu¬ into the Russian attitude. I hope I
ture harmony of the world, for I also left with him some notion of
believe / the
intensity
with
which
an
people of America the
and old to learn.
From
10,000 people come each
day to Moscow's Ail-Union Lenin
Library, which contains 20,000,000
books and pamphlets. You cannot
1958, its
r],
I would not know where to look
think
their friendliness.
versal literacy of a
and after December 1,
;'••• ./ '
-
,/System
sian
characteristics, of
young
that
1
j
5,000 to
announces
/ '■
/
-
_
for the American who would want
Peace-Loving
with the obvious eagerness of both
Oppenheimer, vanden broeck & Co.
|/,v"
aU the
of our
political match the Soviet populace both in American industrialist can and
capacity for friendliness and in does believe in both capitalism
some
and economic ostriches.
pace
industry's resourcefulness in offsetting infla¬
tionary costs are the new design features instituted in oil and
chemical refining operations. - Such design and process improve¬
Exemplifying
thinking of
to
from
crumble
actual tie-in with the stock market that is
role.
not
is
likely
\
me
commu¬
nism
the built-in
Surely it behooves the investor to examine realistically the
envisioned as inflation's
At present, he has
Throughout my stay in the So¬ lectual progress on a mass scale,
relatively viet Union, I made a determined and they are determined to con¬
brief period, effort to meet and talk to as many tinue to get ahead. Furthermore,
and I do not people of all ages and occupations they are as imbued with devotion
Regrettably, I do not to Mother Russia as we are with
pr eten d .to as possible.
have come speak Russian, so I was obliged to respect for our beloved Stars and
through an inter¬ Stripes. The nation that succeed¬
away with all communicate
ed in launching the first Sputnik
the answers. preter. I did not have to rely on
must be taken as seriously as the
But I saw my interpreter, however, to sense
country in whose laboratories the
enough
to that one of the most, marked
Korean War. The cost of
larly cited
serve as a
/
i
-
powerful banks, and
Soviet
,Union for a
three-quarters of the/total rise connected with the
living in 1956 was no higher than in 1953.
over
grad,
his
of
Russians Are Sold on Their
cently went to Russia to try to see- sia's reverence for the arts.
for myself what makes the rival
Russians Are Friendly and
system of communism tick. I vis¬
14%—an average of less than 1 xk % per year—•
amounted to only
tention.
--i' the industrialist and labor leader.
dedicated capitalist, I re¬
a
furnishings
the
and, if he has an automo¬
and a radio, those are! his
market well worth American at¬
understanding between- labor and capital. /To: this,
Mr. Eaton recommends that we seek additional leadership from
•
the
for
rent
quent increase in demand for con¬
sumer products will create a mass
warmer
.
Since
more
no
cash on the barrel head for
everything." If instalment buying
is ever introduced in the Soviet
Union—and my hunch is that it
will come eventually—the conse¬
and threat of nuclear
war
is
to pay
annihilation; and prescribes a program to'make capitalism
flourish which indiides cessation of subsidization of Socialism
increas¬
ingly concentrated in -the stock market com¬
munity (with some spilling-over into the art;
market).
-'.v ■' b
. ,:. • -v:; „■ ^
Actually, the Consumer Price Index which
was
stable during the four-year period from
Wilfred May
1952 to the spring of 1956, and which subsequently rose by 8%, has again been turning
down since last August—with coming non-inflationary stability
expected by Commissioner of Labor Statistics Ewan Clague. De¬
clines are specifically looked for in the food area, which has been
strongly bolstering "the overall cost of living to the consumerinvestor,
*/'■'
' '
:
' V
of the cold
house if
property tax based on
a
property, too.
we
to the astronomical costs
highlighting the practical
stabilizing effectiveness of generally overhang--ing capacity, copper's de-flation demonstrates
addition
In
-
bile
take up Khrushchev's expressed
desire for a rapproachement with the west with our President
taking the first step by visiting Moscow and by replacing our
Secretary of" State. The sponsor of the Pugwash Conferences
cites objective testimony of UiS^S.R/s and China's progress;/
notes the enthusiasm of the Russians for their system; refers
suggests
is
all
owns
home
big enough for both capitalism
least worth the try, a leading American
and communism—or at
own
the value of the land. The Russian
Mines, Ltd.
Convinced that the globe is
Surely the most consistent thing about the stock market is its
bulwarking by "inflation" fears (and hopes).
This week, typi¬
cally, the convention of the Florida-tanned investment bankers of
the nation was confronted with the inflation specter via its Presi-
it
There
land, but
& Ohio Railway
Board, Chesapeake
of the
his
but the land on
built belongs to the
to,
state.
By CYRUS S. EATON*
By A. WILFRED MAY
A
ly for the building of homes.
Russian
1958.
4
by Mr. Eaton before the
Detroit, Detroit, Mich.,
of
NEW YORK
•
PITTSBURGH
•
AUENT8WN
•
LANCASTER
6
The Commercial and Financial Chronicle
(2306;
Just to take
plastics
TheDynamicWofld
g
Rubber
industry head and
supermarket.
Today
around
leading producer of plastics pre¬
of plastics in the
next ten years.
Labeling current excess production only a
"momentary problem in the course of the long success which
piastres is sure to follow," Mr. Humphreys foresees a tripling
of present world's
notes
a
part
of
production of 9 billion pounds by 1968 and
are giving the United States a lively
Finds foreign competition a healthy devel¬
competitive
race.
opment, states "there is
room
for all of
one
is
world /as-far as plas-
tics^re/ctm
-
nation ;
the
in
t
*
in team
rug padou^. States. . The poundage production
plastics. >-,,We .<? Of- resin had ^quadrupled in f juste
have plastic luggage. Whether.we/the last 10 years<//// '*[■
travel"by car, train, plane or bus > A number of these other nations •;
we
may
find plastics in foam haye^ *giv.en the United States ; a
We
in this wondrous
us
plastics -' all
-
Ialrfeady
iry
us.
Us.
and
number of nations
a
find
we
fbr all nations.as they develop,
economically. ; In many countries
*
,
••r •
They take an active 'the expansion-in tlie-use of plastic/or grpupaf/nations/e^
daily -livesfbf/.eat^nray/Jwell• develop much fasted"t assume;it has an advantage over *
1 ;
; v !
Since they may have less tradition others thai-can last^Tbi&will con- :
We wear plastics inraincoats of_other-materials to overcome. + > tinue to be a lively; competitive,
and in cold weather jackets.; 'V- v it Since .World War ll the most*. swift-moving industry
in which
We walk on plastics in plastic/rapid growth in plastics pi aducthe only advantage any of us can
floor tile, in plastic soled footwear tion-'has beeiT Outside the United *cxpeci is-that Of being ori.out tOes,
tremendous rise in the production
a
futdi'fe/£-V;^£l^:
ucts,
Chairman, United States Rubber Company, New York City
dicts
example, see what noted in the United States have rnand
for .*» them
will> * increase j
dorte in our kfood -/been :experienced; ,.T , know/ by/ manyfol
of their use ihpther nations invarying/
degrees..; Fourth, /and/ finally diet's . look >
Because
of. fruits; vegetar.i befieve mat tnose nations which "a head to the
bles, meats and other food.'.prod^haVe&/Iarge con^umptidfi .of
they have
contributed yin "tics per/ capita have shown the.
large measure to the success of the potential available in; this mdds-/-W^ri^^
•
By H. E. HUMPHREYS, JR.*
.
Thursday, December 4, 1958
pre-packaging
-a
.,
rMfillCS
1PE
•
■*«
.
Imlllflh ill
WplwWrME
,
one
haye
markets.
■mm
..
plastics industry," outlines four goajs toward research, and
hopes tariffs will riot hobble this new industry. ;
travel
lasncs
piasac
with
are
I have arranged
my paper Un¬
four main headings.
everywnere
m
ourat, senmg
prices
rnai
nave
sent
c reati n g;/y hew*
opportunities
through VreseariA';" and; • develop-
acting
merit./ and
•;
/
quickly :an$.
!
fearlessly on! the^e opportunities
with faith in the great future of
as
vvc
uieis
wy
ies.'
living and toward greater employ¬ homes There are plastic curtains American producers scurrying to continue and, * wherever possible,^
? ■ and ..upholstery
First,. I ment for people, ;
material,/!foam find ways to reduce their costs, step up our research effort, T see
shall comment on the
tremendous,
plastics in furniture and rug pad- This lias been disturbing to the -four directions in which this re¬
Present Excess Production
•
;
growth of plastics and the impording. There are plastics iiri .paint.- American coippanies, but on bar- search; effort-can -be•
tant place
The foremost problem of the Plastic
panels decorate our walls, ance I believe it,, has been-a
.First, there lies a great opporthey are mak¬
plastics industry today is over¬ cover our patio roofs. We have healthy-development. It has dem- tunity. ahead for those, who caii
ing for them¬
capacity. We do have excess ca¬ plastic wastebaskets and, laundry oxistrated the growing world-wide develop types of plastics with
selves in these
pacity in some countries and some baskets, radio and television cab- nature of the- plastics industry.better resistance to heat. Already j
rapidly chang- T.f|
companies will suffer. ; /V/T,://.A. ipets.* Out on the lawn we have^ It - has j .shown
that
no
single our military people are asking for v
ing : uiuV.SGrowth in demand wil come,
plastic hose. : y
' nation has- a monopoly on re- materials that will withstand the:
around
the
but it will not be automatic. - It
We eat from plastics — plastic1 s e a rc h, development resources, temperatures of 300 to 500 degrees
world.; :/*■/•'•••
must be created. Those who con¬
dishes, glasses and tablecloths. ; 'production ability; or marketing Fahrenheit generated in superSecond, I
tribute most through research arid
We use plastics when we write/ ingenuity.
'
sonic flight. It will not be long
want to touch
low cost operation will enjoy sue-' in the shells for fountain
pens,
.
Recently I have noticed a curi- before they will need producjts
upon the sig¬
cess as in the past.
ballpoint pens
and
mechanical 'ous and interesting developrinent! that will withstand 1,000 to 1,500
nificance of
When we take a careful look
pencils.
'
**■'} Plastic resin shipped from the degrees. Thus a good goal to set
plastics as I
at the great possibilities ahead for
We play with plastics in boats, United States to Europe is today before us for the next few years
know them
plastics world-wide, it seems con¬ roller skate wheels, balls, doiis, molded into numerous partswfor is types of plastics that will funeclose at hand
servative to expect production to
games, beach toys and hula hoops, adtomobiles.
One make of auto- tion at temperatures up to 2,000
in this counjust about triple in the next 10
We find plastics at work in in-" mobile -alone
contains
10
such degrees.
Markets t for such high
-"rv.
H. E. Humphreys, Jr.
years.
This would bring us to a dustry in pipes, housings, hoppers/ parts. These cars are then shipped temperature plastics will certainly
Third , I
world consumption of 27 billion
gears and many other places, and
back to the United Stales wnere not be - limited* to military uses,
shall exp^e the patterns of in¬
pounds, or 13 Va million tons, by on the farm, where they are be-' they are sold in competition with There will also be important apternational expansion in plastics. 1968. This would
certainly make ginning to be used as temporary American-made
cars.
And
we
plications for such materials in
And fourth, I would like to take our present capacity look meager silos and
mulching material.
talk about our Yankee ingenuity! industry.
r
:
up the international goals of plas¬ indeed.
Plastics have been with us in.
Some areas of the plasties in-' f Just as jet planes and missiles
,
der
.
"
.
,
•
*
"
.
tics
the
for
future
review
and
Now let
of the problems we all now
will face as plastics busi¬
ond
us
move
to the
on
sec¬
which
some
this subject and get
things more specific.
this
industry
grows
so
rapidly that it
almost
takes
part of
face
or
down
to
ness
continues to grow.
What
is
Tremendous Growth
,
behind
believe
just the past 10 years the vol¬
plastics production world¬
I
wide lias more than tripled. In the
'•
this
In
of
3958, an esti¬
pounds of plas¬
tics will be produced.
This is a;
nice round figure but perhaps it
year
mated nine billion
hot
does
with
it
compare
else.
to
much
mean
As
II,
wide
100 years.
a
production
of
will
b ear
natural
all these plastics go¬
It is
practice to talk!
many instances in which!
plastics have replaced other ma¬
terials.
Such talk implies that
Plastics are gaining at the expense
of other areas of
industry.
common
the
Actually plastics have
come
to
the aid of
steel, rubber, wood, paceramics, glass and., many
pet,
other materials.
of
these
other
Meanwhile most
materials
^rbwing in volume in
the
are
still
uses
which they are best suited.
for
There
icertainly no decline in demand
tot steel or rtibbeiy either natural
w, synthetic. Nor are the require¬
ments for !wood and paper taper¬
ing off. Our greatest problem with
ss
wood and paper today is to make
sure
that our replanting and re¬
forestation
with the
oqr
programs
ever
natural
It
laken
is
keep pace
mounting drain on
resources.
true
that
plastics
have
some
packaging
particularly
plastics
have
opened up vast new oppor¬
tunities. Plastics have shown the
why toward
a
higher standard of
which
lic
has
been
willing' to accept
a
.
been
•
\
Compares
.
:
k.
of
pi
this
in is
growth
in
Plastics
and
between
oeiween
the
ine
plastics,
rubber.
Since
World War II
even
we
start
the
have
seen
of
the
rapid growth in syii-
more
thetic rubber.
And since
tic products in the postwar period
is truly a tribute to the men who
of the war
have witnessed the
have
discovered, developed,
duced
and
versatile
also
merchandised
types of plastics.' It is
tribute
a
the Plastics
to
the
Society; of
Industry for its
dynamic rise of plastics.
pro¬
more
we
the end
The
rubber industry
"In
the
plastics
It
^
Egypt
tutos
^
i
^ ? other as
*1 d 'millions of
feet are being shod in footwear
with plastic soles.
.
;
materials
but'
■
In
the
;
•.
largely!
as
spe¬
5
-
first
decade following
1938, the United States' share of
world
plastics production grew
from less than one-third to more
than two-thirds. In trie most re¬
10-year
period,
although
United States output lias contin¬
ued to mount, this
country's share
of
world
output has
about
one-half.
flects the rapid
nations
in
declined
This
^
Natioiiii
>
Rown for All Natwns -
^ ,
;
As in all other industries, theye
'
T even understand' that the hula .is,room lh' this industry^ for trad—.
hoop "craze, . which. I am told -ing our know—how internationally,
(
started in Australia, and which I, and licensing our patents among
takeii' witnessed as it whirled through each other where there is a mu.
r --1 "*
»
' *
has
part in the
vaneement
raw
cam¬
qualify products adapted to
cific needs.
well:
All7
•
"
m
the rubber ; industry
paign aipong product manufactur¬ think of rubber- as the orieinal 4hPre$r§ any ,eountries(which have
ers to get them to select and
apply plastic. Perhaps' this is ^bgcauee'^ot' -#et>43ieen i subjected-. Coi thls
plastics in products where they it
gives us the feeling we' have craze/ L have ■ two suggestions to
were truly useftil.
Today plastics been in the plastics business mtieft: make. Firet. fcy all means get into
are no longer looked
upon as sub¬ longer' than anyone else. * But I i -bu.siness immediately (and get
stitute
i
kets.. As we:do this,-we shall find
PlasUcs com^tmg not.
other matenals, ;but witli
;
*'•
.v.
^
^Aeeds
bowls
-
^
*
^0a! i.s to,kee.p f multiplying the
variety of plastic *types to meet
to do->„
,rppH- ^nd r-reatp new mar-*
mesticallv- - produced elastic
-L
in- i"u?^ corr^lon' rat^and^craeking.
v;: /
Meanwhile, our fourth research
age-oldf hand-'
the
made pottery is giving way
-
since my industry is
involved
with ' both;
Over the years we have watched
the growth in consumption of nat-
ural
,
rubber and the ; growth
intimately
for
-dustry:
/
conscious
am. very
comparison
compauson
in
significance
^^
; :
,
.
Rubber
Naturally, ,1
rapidly increasing volume of plas¬
trend
to
re¬
how/and; part>of *the ^capitaT re-
qu^dJalong;it^e.^facilitymarket and additional capital of
a company in,another country/ '
As for the competition among
companies in one nation, I for one
welcome it; among companies in
different .nations—we must learn
|0 live with it. I have seen this
rubber industry
*
the younger generation, fbr the competition at ' work -here in--the
In any case, I am ^lad to be middle aged' 1116 gyfations can be
United States stimulating us! to
able to say that the rubber indus- rough on .the sacroiliac.
develop lower cost1 processes and
try has made some valuable conPlastics are (versatile. They are' higher
quality
products,
thus
tributions to the plastics industry becoming more so every day. Al- helping us to improve our position
as we know it
today. Methods of ready ■ plastics- are
superior to not only within the United States
compounding, molding, extruding many other materials in resistance but in competition with the rest
and curing developed by the rub7
to . corrosion, weather and, in of the world.
'. ■*
ber industry have come in handy niany eases^wear.
/in the future, this world-wide
in the manufacture of many/plasr v The number of
applications in competition
will, keep
United
tic products. ■
1 .which plastics are;less expensive States manufacturers on their
What does all this have to do is growing year by./ year.., This toes. This will Tend to speed-'up
with international expansion *• iri growth
will - continue A as
the the development of more autoT
plastics, which is my third topic? Ametals .become more expensive matic processing to obtain lower
«/:' and the plastics less. * *
/ ~
costs and better quality. For the
...
glass people alsd ^u^ Qpic^ly). -• It is a wonderful
their product as waY to use up surplus, inventories
the original plastic and, of course1,' °f resin in a hilrry. Second, leave
that puts them ahead of u's in' the4the.use of the hula hoop strictly
understand
like
to
the
think
of
-
.
_
.
recovery of
this field
other
after World
War II.
v
.
Today
into
10%
of
our
plastics
go
packaging. To me the most
thing about this de¬
remarkable
velopment is the great impact
PAn address by Mr. Humphreys before
t
International Plastics Dinner. Chi¬ .which these new materials
have
cago, IU., Nov. 19, 1958.
had on
J
available, supply of naturel der their arms. Some of thenv^re"^^tics<whi^i;.can-cPfnpete YYitjh woqd
synthetic rubber would have now beginning to carry -loaves andv other traditionaL/materials,
able to keep up with the wrapped in plastic. If this is the
still carry-, the advantage of
swiftly rising demand.
'
start of a trend, it could have real
r®sistant i° weathering,
the,
and
they
which would easily break.
~
The fact that the American
pub¬
cent
of the jobs of the
traditional materials and are
doing
Liitese jobs better, but in
many
other areas plastics have created
new markets out of research.
In
over
metals,
.
.
of
"little-
handles and -many other
products,
was
one
of
a
cheap substitute
output of rubber.
ing?
War
ing the war. At that time the pub-*
lie's experience with plasties- in
toys,, radio cabinets, combs, brush
to only seven bil¬
Thus the world out¬
are
the
as
had been forced to do without dur¬
and
this
put of plastics is 30% greater than
Where
to
gadget stage."
Most people
plastics
as
colorful
but
substitutes for materials,'
particularly
come
lion pounds.
of World
out
refer
cheap
Yet world¬
combined
synthetic, rubber-
came
found plastics In what we;
knew
growing and it has been foh
than
we
we
red
something
The production of rubber is
more
cue
I
this
answer
*
sometimes
until
us
best
can
question if I will take a look at
plastics as I best know ihein per¬
sonally—as I have seen them de-i sumption equal to 19
pounds per - serve as a reminder.
though plastics are already beginvelop here in my own country.
pcrson. Without the rapid growth
For
centuries,
Frenchwomen
to play a significant part in
>
in the,use of plastics since World, have been a' familiar
.sight*eari'v--- building co^tructK>n,-the really
No Longer a Gadget
War II, there is some doubt that
ing home bare loaves of bread ufl- b.lg market still, a waits those pla^-
last 20 years output has increased
more than 20-fold.
also
away?
dustry presently face the problem
^
In
ume of
we
breath
our
.
call for materials that will resist
for only about 25 years. Yet we of-Dver-capacity. As I mentioned high temperatures, so does space
now use more plastics than rubber,
before, this is a temporary situa- flight demand those which w$ll
which has been an industry to be tion. I do not know of any indus- do their job at very low temperareckoned with for about a cen- try that has greater potential for tures. This is another goal for our
tury. This year the per capita con- future
growth.
In
the future, research in plastics.
: Pre¬
sumption of plasties in the United-.'wherever we see nations devolopOur third research goal is jto
States will be about 24 pounds, ing, we shall see plastics expand develop types which we can pfroThis compares with rubber con- rapidly. * A few sample glimpses duce and sell at lower cost.
Allarge volume in the United States
merchandising
methods.
,
,
Faster
-
v
.
Foreign
Production
Many nf these same rapid.deVelplastics which I have
opments in
Plastics
of
are
also
on
the
verge
pushing back the high temper-
ature barrier.
As they do, the de-r-
plastic products with very high
Volume potential, • ;'this is the
-
Continued
on puge
29
Volume
(2307)
The Commercial and Financial Chronicle
Number 5800
188
unusual popularity of the
G. A.Hart Elected
t-
MONTREAL, Canada — G. Ar¬
Hart, ; General - Manager of
Ahead
nold
tlje Bank of Montreal, has been
ejected •" a director and • a 4-VicePresident
of
f*m'*- ;
He .?•
the bank;
continue
will
to
J
General Man-
r;
Uo
announce
bank's
o
will
f share-:
V
holders.
r
■
.
r
been
of
be
-to
the':
ini Toronto » and . has rules. The ef- y
j
Canada and1 in the -fort will, be .to."
Carlisle Bargeron
United States. During World War ■change the
rule; - underIf he served with-the Canadian
Armyoverseas-: asa - major and which the Senate has long opwas created a Member of the Or¬ erated permitting unlimited de- -where complete freedom
der of the British Empire (Mili¬ bate, to provide that debate, can-bate is permitted. It has
ago
years
in
served
;H V "
tary Division).V>
NieMng & SclnH With
t
off ,by
,
a
,well.7 In
riorse,
Representa¬
Virginia.
Smith is supposed to work closely
with the House leaders. He is said
to have acted high-handed, and
war
Howard
now
there is
House
to
Smith
a
of
movement in the
provide
continuous
almost
H. R. Resell Witt
the
Herbert
using steam roller tac¬
A filibuster by one man is
mob action
tics.
However,
annoying.
quite
has 2*0" or 25 members
Hantaan
<
Ripley Ce.
Gesell is
R.
;
now
asso¬
ciated with the investment bank-*
it
if
engaged in
it, the Senate should take it seri¬
ously and give serious considera-.
tion to whether they wanted, to
take -the
upon,
action
they were
r;
/
bent
y
....
Although little publicity has at¬
it, t there y is- strangely
action pending iq the
House to liberalize its rules. Con¬
tended
;
of de¬ enough
worked
world where iegislatiye sisting of 435 members (436 with
bodies are - becoming : more y and Alaska) the leaders; hold it in
ft takes TwO-th.irda* of the:entire more mere rubber stamps, either check, otherwise we would have
shut
mere majority
of the senators present. At presept
be
,
committer is presided over
tive
makes the Senators stop
y
ginning of every session only a
majority vote will .be .needed this
time.'.VicerPresident Nixon has
indicated he would rule that new
rules: can bey adopted from the
floor and .a VQte called in an effort
to override him. -However,, a ma¬
jor ityvote.willsustain him. • •
-;2The Seriate, throughout history,
has priced;: itself, . as a* chamber
effort
the
change
•
.
The
by the old
filibuster
and think
twice about the action they are
about to take. It militates against
two-thirds
y
the
to
filibuster by holding
in
At. best
session.
rules must
vote^.^-y
First on the
calendar.vWl 11
began nis banking career 28
He
a
Senate
the
a majority to adopt
Therefore, if it is held that
be adopted at the be¬
.rules.
ty
y.
Arnold Hart
the bank since
would take
'majority vote.
f" It takes only
v
a
hOv-N egr o?._
General
Manager
spend
month or two
bargaining for
Mr. Hart has
•
that this
Lbusiness they
meet¬
determined
time > even in the midst of a
session but |t is agreed on all aides
\any
y
•-:any; seriousy
.t
141st
annual
ing
the
It was
the
i
undertake
get
can
that after 15
the session. There are limitations days the bill can be brought di¬
to the length of time a filibuster rectly before the House. This ac¬
tion,- taken .in connection with
can be
sustained,\? y
.vy.'-y "
what
the
Senate
plans to
do,
When the late Senator.Taft was
makes for some wild and wooly
leader of the Senate, he broke a
legislation ahead of us.
continuing body. Of course, it has
right- to change its rules at
y
\
.
;
When. Congress meets Jan. 7 it, two-thirds carrying on.,
.first", before
they -are- able
a g e rTh eyv
election w a s
following
*
they
floor;
of
wpl prevail, is towards the end
'.Will be confronted with just about originally intended that the Senate
as. grave
problems as ever-, con- tefms'of;office would be rotated
fronted the legislative body. But .and that the Senate would be a
"
.as;?
serve
of the News
By CARLISLE PARGERON
before
tee
moment
which six months later had
become a dead issue.
Not in all
history can it be shown that any
important legislation of lasting
value has ever been permanently
blocked by filibuster. If it has real
value it
will subsequently bepassed. .The only time a filibuster
but
:
1
./yt.
a
>
iT
by' voluntarily giving - up their many crazy laws. Heretofore, this
control has been exercised through
H. It, Gesell
the Senate is not a freedom or by bluntly having it
the Rules Committee.
All bills
continuing body which it unques- takerr away, it would seem that
ing firm of Harriman Ripley &
tionably is, and That new rules this is a very grave action for our except the run of mine ones
Model, Roland 'ji &;7 Stone, 120
Co., Incorporated, 63 Wall Street,
must be. adopted at the beginning" Senate to take.
y
J.
pertaining to individual claims, New York City, as a bank stock
Broadway, New York City, mem¬
of every sessipn. Unlike the House,Often the unlimited debate rule
bers of the. New York Stock Ex¬
agaiqst the government, etc, must trader. Mr. Gesell was formerly
one-third of the Senate is elected has prevented some hastily conchange have announced that Rob¬
be cleared by the Rules Commit- with Kugel, Stone & Co., Inc.
every two years, the remaining ^ceived action which enjoyed an
membership.
To do this it. must
be held that
Modd, Roland Finn
.
.
...
.
ert E. Niebling has become asso-"
ciated With them as director of
research
industrial
in
-
and Werner
securities,
Schott has joined
S.
^
the firm and will be charge of re¬
search in oil and gas securities
-t
This annaunceinent is under
with special emphasis on interna¬
tional developments.; ri
,' •
• •.
;
no
any
"
'
circumstances to .be
construed
offer to sell, or as a solicitation of an offer to
as an
of these securities. The offering is made only
*
^
1
\
*
J
;
-
•
[
.f.
Wallace, Geraldsen
""1^.
by the Prospectus.
" "
'
; -
'
.'
.
.
r
.
December 3,1958
■'
A.
buy
* " ; ■
..
I
'
:
-I
........
700,000 Shares
:
'v
V
{
Wallace, Geruldsen & Co., Chi¬
cago, .investment
firm, has an¬
nounced the opening of their New
York office at 111 Broadway. Rob¬
ert
E.
Brindley. ,' hasbeen - ap¬
pointed manager, 7y Mr. Brindley
was formerly with Bache & Co.
any
Common Stock
"
■v
ORANGE, y N. j; —On
Jan. 1 Nugent & Igoe, 592 Main,:
Street, members of the New York '
Stock Exchange, will admit Ralph i
.;
£AST
>■■■■■■
H /••*'"'-
(without nominal
;
/
;
.
+■
L.;Mitchell
elected
Wm.
E. Pollock & Co., Inc.,
Street, New York City.
U
(
.
\
.
Jv
'
.
y
'
20
With 6aroiina Sees.7
>'
Copies of the Prospectus niay be obtained in any Stale in which this announcement is circulated from only
such of the undersigned or other dealers or brokers as may lawfully offer these securities in such State.
vice-president of*:
a
Merrill
\
'
j
+
has
been
!•
f
Share
E. Pollock Co.
.
Ashmore VD.
•
Price $37.75 per
$$:
...
.
.
i-
value)
„
H. Peck, John J. Unkles, Jr. apd ;
Martin White, III to partnersip.
y
Pine
or par
*
i
Lynch, Pierce, Fenner 8C Smith
■
(Special to The Financial Chronicle)
RALEIGH,. N. C.—Charles F.
Dlffendal, Jr.,:. is now with Carolina Securities.. Corporation, In¬
surance
Building.
j
Harriman
Lehman Brothers
Hornblower 8C Weeks
Ripley 8C Co*
Incorporated
.„
Two With Glore, Evans
: ■
i
Reynolds & Co., Inc.
Carl M. Loeb, Rhoades 8C Co.
Hemphill, Noyes 8c Co.
^Special to The Financial Chronicle)
Dean Witter 8C Co.
White, Weld 8C Co.
Paine, Webber, Jackson 8C Curtis
*
LOS
ANGELES, Calif.—Walter
'Daley and Irving G. Searcy
have become affiliated with Glore,
Evans
&
Co.,
1722
v
.
I
A
«
-
'
J
~
-
*
i'
1
•
Corporation
2*
.
Laurence M. Marks 8C Co.
Francis I. duPont & Co.
Clark,* Dodge 8C Co.
r
*
Shuman, Agnew Adds
R.
'^Special to The Financial Chronicle)-
SAN
A
*
Bear, Stearns 8C Co.
Westwood
Boulevard.
T ^
*
•»
American Securities
Wertheim 8C Co.
FRANCISCO, Calif.—
William F. D. Merrifield has been
added to the staff of Shuman, Aghow & Co., 155 Sansome. Street,
members of the: New York and
Pacific FRASER
Digitized for Coast Stock Exchanges.
i
W.'Pressprich 8C Co.
f
,
»
"•*
~
A. C.
Allyn and Company
Incorporated
i
:
:
Bache & Co.
A. G. Becker 8C Co.
Incorporated
»
.
Johnston, Lemon 8C Co.
7
G. H. Walker & Co.
I
>
i
-
»■
The Commercial and Financial Chronicle
3
Thursday, December 4, 1958
...
(2303)
Bank
of New York
Bulletin
Laird, Blssell & Meeds, 120
Broadway, New York 5, N. Y.
Bowling Areanas—Memorandum—James Anthony Securities
Corporation, 37 Wall Street, New York 5, N. Y.
Celanese Corp, of America—Analysis — Reynolds & Co., 120
Broadway, New York 5, N. Y, Also available is a report on
Pacific Cement and Aggregates, Inc.
Coastal Ship Corporation—Analysis—L. H. Rotbchild & Co., 52
Wall Street, New York 5, N. Y.
Cooper Bessemer Corporation—Analysis—Mitchell, Hutchins
Dealer-Broker Investment
Recommendations & Literature
it is understood that the firms
send interested parties
to
mentioned will he pleased
the following literature:
Atomic Letter No. 43
—
W., Washington
1033 Thirtieth Street, N.
Inc.,
Co.,
7, D. C.
General Instrument.
Federal
Vf:
of market outlook—Shearson,
Street, New York 5, N. Y.
Business & Securities—Analysis
favorably situated — Gude,
Street, New York 5, N. Y.
Winmill
Co., 120 Broadway, New York 5, N. Y.
Steel Industry
Indian
-
Data —Markis^ndass
—
Lukhmidass, 5,
Bombay, India. Also in the same bulletin are
Tata Locomotive and Hindustan Motors.
Hamam Street,
data
on
Japanese Market—Review of current
situation—Nomura Secu¬
York 6, N. Y. Also in the
Asahi Breweries, Nippon
of the Japanese Nonferrous Metal In-
rities Co., Ltd., 61 Broadway, New
same review are brief analyses of
Hodo, Nikkatsu, and
dustry.
.
Current information—Yamaichi Securities
Company, of New York, Inc., 111 Broadway, New York 7,
Japanese Stocks
New York.
;vrf,
■
,
,
.
.
Over-the-Countcr Index—Folder showing an up-to-date com*
"
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 Ss to
yield fandvmarket performance over a 19-year period —
NationalQuotation Bureau, Inc., 46 Front Street, New York
4, *L Y.
Puerto
available is
Securities—Report—Government
Bank ifor Puerto
Real Estate Bond
•
East Mason
-
on
Rico, San Juan, Puerto Rico.
& Stock
Prices—Review—Amott, Baker &
Co.,-incorporated, 150 Broadway, New York 38, N. Y.
Revenue Bond Projects—Progress report—Smith, Barney &
Co., 20 Broad Street, New York 5, N. Y.
Securities for Christmas—Suggested portfolios—Francis I. ,du
Pont & €o„ 1 Wall Street, New York 5, N. Y.
government.
school
used
—
Memorandum
gram
in
—
•
Argo
•
a
Oil—Report—Hayden, Stone & Co., 25 Broad Street,
New York
4; N. Y. Also available is the December Invest¬
containing a discussion of "Blue Chip" Chemi¬
U. S. Plywood, Safeway Stores, Philip Morris and
ment : letter
cals,
Bausch & Lomb.
$100
million
bonds
on
Bankers
State
Dec. 3.
to
of
Trust
purchase
California
The State sold
the; state.
the
by
issues
The
school
or
districts
k
m a r
e
t
e
d
today
$400' million.
underwriting accounts it
manages in the past 12 months
have supplied California-commu¬
nities
with nearly $725 million
public facilities and civic im¬
provements required by the state's
rapidly expanding economy.
The other major members of
the syndicate which bought the
$100 million State of California
for
bonds
"
today
Blyth
were:
-•
Co., Inc,; The First
Boston Corp.; Harriman Ripley &
Co, Inc.; Harris Trust and Savings
Bank; Smith, Barney & Co;; Leh¬
man Brothers; Kuhn, Loeb &
Co.;
American Trust Company,
San
Francisco; Security-First National
Bank; California Bank, Los, An-
.
&
■
Drexel & Co.; Glore, Forgan &
Co,;
Chemical
Corn Exchange
Bank; C. J.; Devine Ar;Co.; Con¬
tinental Illinois National Bank &
Trust Company of Chicago; The
Northern Trust Company; R. H.
Moulton & Company; Goldman,
,
Sachs & Co.;
Kidder* Peabody &
Co.; Eastman Dillon, Union Secu¬
rities & Co.; Bear, Steams & Co.
Merrill
on
Lynch,; Pierce, Fenner
Smith; Blair. &; Co. Incorpor
rated; Weeden & Co.; The First
National Bank of Boston;- The
First National Bank bf J Oregon;
The Philadelphia National" Bank;
Seattle-First National Bank;
Equitable Securities Corporation;
&
,■
Market
Stone & Webster Securities Cor-
poratioin.
Dean
syndicate
the
school
Bank of America N. T. & S. A.
Title Insurance & Trust Co.
$100 Million California Bonds Placed
Company
of
and. the
Inc.-—Study—Loewi & Co., Incorporated, 225
underwriting syndicate
for
will be repaid in whole
calendar 1958 to
Soviet^Economic Offensive:
A.
in
aid
raised the total of general obliga¬
tion bonds sold by California in
Outboard Marine Corp,
Co., Lic.^Analysis—Peter P. McDermott & Co., 42
Broadway, New York 4, N. Y.
merged .with .the
Proceeds
provide
part
The
—
Van Kaalte
S.
construction
amounts advanced under the pro¬
Street, Milwaukee 2, Wis.
The Bank of America N. T. &
the
building aid bonds will be
to
construction
Telecomputing Corporation—Analysis—George, O'Neill & Co.,
Inc., 30 Broad Street, New York 4, N. Y.
.
April, 1958.
of
nance
major building construc¬
tion, equipment and site acquisi¬
tion for departments^ of the state
Republic National Bank in Dallas—Analysis—Eppler, Guerin
& Turner, Inc., Fidelity Union Life
Building, Dallas 1, Tex.
Also available is an analysis of Tekoil Corporation.
Development
Its effect on our investmentsStudy—J. H. Williston & Beane, 115 Broadway, New York
6,N. Y.
Tax Exempt Bonds and Influence of Population Trends—Anal¬
ysis—New York Hanseatic Corporation, 120 Broadway, New
York 5; N. Y.
Textile Indiistry—Survey—E. F. Hutton & Company, 61 Broad¬
way* New York 6, N. Y.
Trust Institutions
New edition of directory of active trust
departments in United States, including volume of assets, of¬
ficers in charge of trust and investment divisions, and names
of trustee nominees—Fiduciary Publishers, Inc., Dept. D, 50
East 42nd Street, New York 17, N. Y.—Prepublication price,
$10 (orders by Dec. 22, 1958).
memorandum
Red Owl Stores,
:
Rican
a
$100
July, 1958 and with 2.96%
$100 million California
and school building aid
Proceeds
Co., 29 Broadway, New York 6, N. Y.
D. S. Kennedy & Co.—Analysis—H. Hentz & Co., 72 Wall
Street, New York 5, N. Y.
'
Kewanee Oil—Analysis—Tweedy, Browne & Reilly, 52 Wall
Street, New York 5, N. Y. ; r
•';'
' '
' ■?
;
:
McCrory Stores—Mc Lei lan Merger—Memorandum—Hardy &
Co., 30 Broad Street, New York 4, N. Y.
McGregor Doniger, Inc.—Report—Newburger, Loeb & Co., 15
Broad Street, New York 5, N. Y.
Merritt Chapman & Scott — Memorandum — Oppenheimer &
Co., 25 Broad. Street, New York 4, N. Y.
Montgomery Ward—Report—Thomson & McKinnon, 11 Wall
Street, New York 5, N. Y.
Pacific Indemnity Company—Analysis—Blair & Co.
Incorpo¬
rated, 20 Broad Street, New York 5, N. Y.
: /
Pennsylvania Railroad — Report
Alkow & Co:, Inc., 40 Exchange Place, New York 5, N. Y.
r
f
,
■.
Perkin Elmer Corporation—Analysis—Stieglitz &Co., 67 Wall
Street, New York 5, N. Y.
Pioneer Natural Gas Co.—Memorandum—Bateman, Eichler &
Co., 453 South Spring Street, Los Angele3 13, Calif. Also
stocks which ap¬
& Co., 1 Wall
com¬
the
program bonds will be used to fi¬
&
Options—Descriptive booklet—Filer, Schmidt &
How to Use
on
3,61%
on.
receiving aid.
Association
memorandum
a
the
bonds sold in
*
Mortgage
^nd
3.23%
veterans
port—Government Development Bank for Puerto Rico, San
Juan, P. R.
,<
Iowa Southern Utilities—Analysis—A. G. Becker & Co., In¬
corporated, 60 Broadway, New York 4, N. Y.
Jones & Laughlin Steel Corporation—Bulletin—Schweickart
able is current Foreign Letter.
pear
on;
Government Development Bank for Puerto Rico—Annual re¬
investment letter—Burnham and
Company, 15 Broad Street, New York 5, N. Y. Also avail¬
ffpryihatw view—Monthly
Equities for Investment—List of 231 common
sold irf
Company, 44 Wall Street, New York 5, N. Y. Also
available is
—
Hammill & Co., 14 Wall
National
Shields &
Gold, Nickel, Ron and Uranium
Stocks
Draper Dobie and Compan> Ltd., 25 Adelaide
Street, West, Toronto, Ont., Canada.
Blue Book of Active Copper,
3.58%
with
million California veterans, bonds
Co., 1 Wall Street, New York 5, N. Y.
Kodak Company—Data—Oppenheimer, Neu & Co.,
120 Broadway, New York 5, N. Y. Also in the same circular
are data on General Acceptance
Corporation, Pure Oil Compiny, Southern Railway Company and Twentieth. Century
Fox Film Corporation.
*
Erie Railroad—Analysis—du Pont, Homsey & Company, 31
Milk Street, Boston 9, Mass. Also in the same circular are
analyses of Sobering Corp., Chicago <&; Southwestern, and
Discussing current expenditures on
of
pared
Eastman
atomic energy and comments on Baird Atomic Inc., Tracerlab
and Pronto Uranium Mines Ltd.—Atomic Development Secu¬
rities
state
—
&
y.
Company, 420
Market—Report—J. Walter Thompson
Lexington Avenue, New York 17, N. Y.
Alaskan
—
r
-A "•;
f.4
Witter,
•
;
&
Co.; Phelps,
underwriting group; bid a Fenn & Co.; White, -Weld & Co.;
Salomon Bros. & Hutzler; R. W.
premium of $2,721 for a combina¬
tion of 5%, 3%%
and 3^% of Pressprich & Co.; Paine, Webber,
$50,000,000 State construction pro¬ Jackson & C u r t i s; Mercantile
gram bonds. With a dollar bid of Trust Company; Lazard Freres &
100.05, the average net interest Co.; Shields & Company; Reyn¬
The
$50 million construction program cost to the State is 3.58%. The olds & Co.
bonds
and
$50
million
school bonds were reoffered to investors
Crocker-Anglo -National Bank;
building aid bonds at competitive to yield from 1.80% to 3.65%, J. Barth & Co.; Ladenburg, Thalbidding.
according to
mann & Co.; John Nuveen -& Co.
maturity Dec. 1,
The merged syndicate is man¬ 1959-1983.
(Incorporated); William R. Staats
aged by Bank of America, with
The group bid a premium of &
Co.; American Securities Cor¬
Bankers Trust Company acting as $26,021 for a combination of
5%, poration; Bache & Co.; Bacon,
joint managers. The Bank of 4%%
and 3^%
of $50,000,000 Whipple & Co.; A. G. Becker &
America syndicate^ includes The State School
Building Aid Bonds, Co. Incorporated; Alex. Brown &
First National
City Bank of New or a net interest cost to the State
York; The Chase Manhattan of 3.61%.
The dollar bid was Sons; Clark, Dodge & Co.; Dick &
Bank; American Trust Company, 100,052. The bonds were reoffered Merle-Smith; Dominick & DomiSan Francisco, and
Security First to yield from 2.45% to 3.65%, ac¬ nick; Fidelity Union Trust Com¬
National
Bank
and
California cording to maturity March 1,
pany, Newark, N. J.
Bank, Los Angeles. The Bankers 1961-1985.
The overall average
Trust
Company group includes net interest cost to the state was
Firm Trading Markets in¬
The First National Bank of Chi¬
cago
Inc.'
and
'
Halsey, Stuart & Co.,
'
3.5968% for the total of $100,000,000 bonds.
The
net
interest
costs
to
COMING
the
EYENTS
In
fo) Operating Utilities
*•
'
*
'
4
"
'
,
,
r
r
Dec. 10, 1958 (New
■
York annual'dinher.at thOWal-
dorf Astoria. Guests invited.^
Jan.-16, 1959 - (Baltimore, Md.)
& Distribution
-
Bank & Quotation Record funning consecutively
"from Feb.
1938
to
Jan.
1957 inclusive. Which
.would actually cover quotations from the full
Troster, Singer & Co.
Members New York Security Dealers Association
calendar years 1938 to 1956
*
Baltimore Security Ttadersr
Teletype NY 1-376-377-378
As¬
sociation 24th annual dinner at
Ithe Southern Hotel.April 1-3,1959 (San
inclusive.
,
Antonio,Tex.)
Texas ,G tv up o f lnvestment
Bankers Association of Amer¬
ica annual
.
Trinity Place, New .York 6, N. Y.
HAnover 2-2400
York City)
Investment Association .of New
(b) Natural Gas Companies
•"
Transmission, Production
74
Inrestment Field
meeting at the Hilton
Hotel.
Write
Edwin L;
or
Phone—REctor 2-9570
Beck, c/o Chronicle, 25 Park PL, N. Y. 7
Nov. 2-5, 1959 (Boca Raton,
-
Ffa.)
National Security Tradere A««ociation Annual Convention at
the Boca Raton Club.
Number 5800 ,..: The Commercial and Financial Chronicle
Volume 188
(2309)
of benefits assuming of course, no
well as decrease,, as absolute sta¬
lapsation of policies. Such a bility is impossible. It is probably
period is certainly, long enough no coincidence that the life insur¬
for inflation, even operating at ance business as we know it
today
the modest rate of 2% per annum, had its origin and reached matu¬
Inflation and Insurance
Vice-President, Lincoln National Life Insurance Co.
Fort
to reduce the value of
Wayne, Ind.
industry could profit¬
ably utilize equity investments more substantially, particularly
stocks, to help offset price inflation and, also, on investment
merits alone, aside from inflationary considerations.
After
reviewing what has happened to money, and not ignoring that
inflation must be resisted with all possible means, the execu¬
tive advises hedging adjustments must be made and he fur¬
ther suggests the industry add to its present offerings policies
with benefits tied to equity investments^ He illustrates how
this Can be done with 20-year endowment, 20-payment life
and even ordinary policies which would include term reserves
(1910-14=100)
18<KL—-
a
currency
case of an
In the. case of endowment
the
cies,
time
average
between
of benefits does not tend to be as
long,
as
for the whole life plans.
However,
since
the
former
are
in
shillings per' fine
the
13th
Century
value
invested in
equities^ Provides thorough analysis of
stock performance record and adds warning about problems
for
1820-
the
hand, term plans,
a
143
1880—,.,— ——-l,—
104
83
——
1900—
_
1910
86
_
102
—_________
1920—*231
1930———118
* Wartime * high.
r
SOURCE:
tPostwar high.
~
Warren:
and; Pearson,
pub¬
Department. of Commerce
Supplement to Statistical Abstract.
re¬
life Insurance company, was
serve
*253
—-—:
1890-
this
table, the first old line legal
88
102
1870—
lished
even
97
1864*-—
On generations when the Old Equi¬
relatively long terms, show
98
1860
price from
that
114
,
——
1850-————
1931, except for
notable
145
*221
1840—
Napoleonic Wars and World.
It is
133
-
-
183Q-.
had
their future stability had existed for. over two
tends to be magnified.
the other
pitfalls in handling such investments.
on
onward
——
1814-^—,.
from
ounce
remarkable stability in
the year 1700 to"
predominantly savings plans, the War I.1
effect of inflation
1810-
poli¬ obtain, However, the price of gold
payment of premiums and receipt
invested in traditional fixed dollar media and deferred life
and
.
rity during one of the few long
unit by 44%. In the
periods in recorded-history when
ordinary life policy issued at the money fairly well maintained its
same age, the corresponding time value.
A meaningful measurement of
lapse of about 17 years can be
highly significant if it occurs over the value of money over an ex¬
such a period as 1940 to 1957,
tremely long period is difficult to
Mid-west insurance official suggests his
reserve
TABLE H
Wholesale Price index of
30 Basic Commodities
no
By F. J. McDIARMID*
9
in -:U.' 8.
•
This set of index -numbers
cov¬
father short average time lapse founded in London in 1760.
ering .30 basic commodities rather
During the first 200 years of its vestment media, seems in order. from payment of premiums to
The record of prices in the
The alternative would seem to be
closely parallels certain other in¬
history, life insurance from a
receipt of benefits; and the erod¬ United States is necessarily short¬
technical
point of view has
con¬
sisted very largely of a combina¬
tion of life
contingencies
and
tual
contract
type in-
-
stments.
v e
Like
most
of
roth e
o u
for
the
business
to
in¬
become
ing effect of inflation is corre¬
creasingly a provider of term in¬
surance, with its savings aspects, spondingly minimized.
which have been very important
In order that the currency unit
in the past and very beneficial to
may serve as a satisfactory unit of
our economy as a
whole, tending
account over extended periods, it
to
decline in
importance both
maintain
its
purchasing
relatively and perhaps absolutely. must
r
modern finan¬
Money As
cial
Money in
media, in¬
a
our
power
Unit of Account
within reasonable limits of
fluctuation.
society serves two
cluding bonds,
functions
mortgages,
and preferred
Stocks, it
reached a high
stage of dev e 1 o pment
This
value
increase
must
that
times
as
Indices of wholesale prices for
30
basic
commodities,, published
dices purported to cover a' wider
range of items.
by the United States Department
of
Commerce,
present
frpm 1800 to 1930,
are
1
a
record
These indices
for certain years over
its
means
at
er.
this period
presented in Table II.
It, therefore, prob¬
ably * expresses
measure
in
the major
satisfactory
price
The most striking conclusion to
be drawn from
after
Twenty-First Annual Report of Bank
major
this
wars
Continued
for International Settlements.
data, is that
in
the
on
the
F. J. McDiartnid
during that
unique
period of human history extend¬
ing from the Napoleonic Wars to
War
twilight
I
which
and
lasting
zone
In
latter.
a
medium
life
of
insurance
ex¬
the
This
announcement is not
aries,
Cincinnati, Oct. 2, 19S&.
function of money as a unit of
account
is
of
dominating
im¬
had
a
to World
up
offer to sell or a solicitation of an offer to buy thtsa securities.
offering is made only by the Prospectus.
:
'
;
an
The
v
NEW ISSUE
December 3,1958
portance.
rather
World
as
The
technology of life insurance
it has existed up to the present
as
$65,000,000
has been based very largely on a
combination of life contingencies
War II. This period was generally
one
of stable money values in
Which
Its
-:'--
:
and contractual-type
unit proved
satisfactory
account over long periods.
respect, it differed from
all other periods of re¬
human history, including
the
be
to
nearly
corded
currency
the present one.
Since
1940
half
over
dollar
our
of
value
its
lost
has
and
most
other currencies of the world have
fared
What is
worse.
even
even
serious is the fact that these
more
currencies, including our dollar,
no tendency to regain any
appreciable part of their lost value
show
and further loss in their value is
considered
likely
by
many
stu¬
dents of the subject.
This inflationary trend is some¬
thing
to
means
long
in
run
resisted
be
our
economic
our
by
power,
as
it threatens to
all the
in the
destroy
social
and
fabric.
as
on
as¬
unit
over an extended period of time
would provide a reasonably satis¬
factory measurement Of value or
purchasing power. This assump¬
tion was necessary because in the
case of many types of policy con¬
tracts long periods of time tend to
elapse on average between the
collection of premiums and the
payment of benefits. Such periods
vary
greatly with the type of
policy contract. In the case of
group insurance, or term insur¬
ance for
relatively short terms,
there is little time lag between
premium collection and benefit
payment. However, for retirement
annuity contracts entered into at
a relatively early age, this aver¬
age time lag may cover several
However, there does seem to be a
case for hedging against its con¬
tinuance insofar
structure has been reared
conscious or unconscious;
the
reasonably
a
unit of
In this
investments,
mainly bonds and mortgage loans.
life insurance
is concerned, by
sumption
that
the
ture
*
its technical
in
as
An address
annual
meeting
Company
currency
First and
Refunding Mortgage Bonds, Series DD, 4/^%
Due June 1, 1990
,
Price 100%
Plus accrued interest from December
1,1958
Copies of the Prospectus may be obtained from any of the several under¬
only in States in which such underwriters are qualified to act as
dealers in securities and in which the Prospectus may legally be distributed.
writers
decades.
In
the
other
case
of
life
insurance
than
term, there is a sub¬
stantial lapse of time on average
between receipt of premiums and
payment
of claims.
This time
lapse varies with the plan of in¬
surance
and age at issue, as is
illustrated in Table I. It is greatest
with the limited-pay life plans
issued at the younger ages. For
making such ad¬
struc¬
present day conditions
seem to require. If the life insur¬
ance
industry is to continue to
fully perform in the future the
role which it has performed in the
past, then some attempt to merge
life contingencies with equity in¬ example, in
the case of a 20vestments, and to depend less ex¬ payment life policy issued at age
clusively on fixed currency in30, a period of about 29 years
justments
Pacific Gas and Electric
by Mr. McDiarmid before
of the Society of Actu¬
would elapse on average between
payment of premiums and receipt
aries, Cincinnati.
The First Boston
Halsey, Stuart & Co. Inc.
Corporation
Hallgarten 8c Cor-
Equitable Securities Corporation
Ladenburg, Thalmann & Co.
Wertheim & Co.
Salomon Bros. & Hutzler
A. C. Allyn and
Company
American Securities Corporation
Dick & Merle-Smith
Incorporated
L. F. Rothschild & Co.
R. W. Pressprich & Co.
Hayden, Stone & Co.
Clark, Dodge 8c Co.
Schoellkopf, Ilutton 8c Pomeroy, Inc.
Dominick 8c Dominick
Alex. Brown & Sons
Laurence M. Marks 8c Co.
Francis I. duPont & Co.
TABLE I
Average Elapsed Time From Issuance of Policy to
Premiums and Receipts of Benefits
(Based on Commissioners' Standard
Payment of
Coffin & Burr
W. C. Langley 8c Co.
Bacbe 8c Co.
Baxter 8c
Company
Incorporated
Ordinary Mortality Table)
Estabrook 8c Co.
Gregory & Sons
Reynolds & Co.
F. S. Smithers & Co.
-Average Elapsed Time From Issue—>
To Payment
of Benefits
Difference
(years)
(years)
(years)
30
Life
of Premiums
Issue
21.1
38.2
17.1
45
Ordinary
(
To Receipt
Age at
Plan
14.9
25.7
28.9
30
20-Year
Endowment
30-Year
Endowment-
30-Year
Term*
—
—
:—
.
9.3
8.9
25.7
16.8
9.3
19.1
9.8
8.9
17.5
13.8
27.3
13.5
12.5
23.0
10.5
30
13.8
19.7
5.9
45
12.5
18.9
6.4
Company
Auchincloss, Parker 8c Redpath
Incorporated
J. Barth & Co.
Ball, Burge & Kraus
First of
R. S. Dickson & Company
Cooley 8c Company
Michigan Corporation
Goodbody 8c Co.
8.6
30
45
:
30
45
Life
38.2
45
20-Pay
G. II. Walker & Co.
10.8
Stroud 8c
Incorporated
H. Hentz & Co.
*
Hirsch 8c Co.
Wm. E. Pollock 8c Co., Inc.
McDonnell 8c Co.
New York Hanseatic Corporation
Swiss American Corporation
past,
page
change and as a unit of account.
It may perform the former func¬
tion satisfactorily while failing at
—
move¬
ments during the period.-
Yan Alstyne, Noel & Co.
30
10
The Commercial and Financial Chronicle
(2310)
at its low point in May, when
at 15.9
mtfUojn^-2.0 mil^
was
The Business Outlook
Economist, Allied Chemical & Dye
that the recovery
--v
,
evident in the
fall of last
.
As
matter
a
f
7.2%.
to
i
cor¬
rective
proc¬
sprvicel
could
and
«pndfft?rps
an
in
increase
and local
hv c+atp
penditu
y
penditures by
have been ob-
ISM unprovemem
i»s* Imnrovement
.
its
spring business activity ^goods showed little change.
The
aggregate showed some imr /Federal, Reserve index of indusprovement. Gross National Prod- Atrial production, after reaching
uct in the second quarter made ; 144 irt ftecember, 1955, averaged
-PAV ia*«
*rSc*l-i+
a moderate advance of $3 billion *14Q for 1956 oVi.? fzt«
143
j0w
its
billion
$426
of
T.__
Ing
mon
sci
,
v.
became
mTduSMesUSwhteh had® pro^
two
omy
or
~
.
nredominant in the
o 111
n
111
*
•-
,
services'
,
same; period
except
the
during
for
slight
a
din in the first a
duarter
dio
' According
.
..
*•
preliminarv'
to ' the
exCess productive ca- data on gross national product for /
.
.
-
the
.
s
third
a u a r
t
contraction
e r,
>
i
in • spending on du-/
rabies The abaity
rablea. The abi..., of consumers to'
ceased
——,
evett
-—
wx
^
their flow' ot
maintain
uv,
expendi-'
level-was primatV:;
thaf decisions to cut ly due to the fact that "perspnat
inrnjrip hplrf
income hekl tm surprisingly xxmlt
up
well,
'
^
.
^ 5
the recession, as
K ?a?P'-of
exr
a
lion.
Activity
in
the
ar^s which
^^n?-
registered gains, m
QUarter
continued
to
increase
d«Hnrjulv^en'tlmber
.
Advances
1956d)y ;pix>d^
in wage earnings' Was to a
^
df consumer durable, goods and great extent offset by • imemployju e?irly 1957 by produc^rs-of con,- -men! compensation and higher re^k,
sumer; nondutable
oa-«r,ooof7»'
oonital
goodsv
-
/Mitlotro
Actual tiremcnt benefit^ as well as by the*
fn
imnrmtvomorvt
Kodon
firu-n '.' thpnmo ''
aggregate v, capitaloutlays ~Mgan ' • improvement. iri; farm'Ricome.'
during July September. Advances ^;
: also occurred in two new;.
decline only in the ^thitd-quar- More'. ;:Tece»tly^: persOtiat;: income
capacity other factors-coniributed Federal civilian and military pay.
econ-
3C?J
Stimulated
Z
the
the
to
f°
.
downward
.^wra^ ..r?vi:sW of. To
_w.
-j,-aT-
®c!r Sl!?Ehasc.?
...
.
.
..
slackenirig ^usiriess ihvestmeht p f og r a m s.' consumers also drew od their;
pace of inventory reduction, an The most importaht of tfilm were savings.
:
I
: '
acceleration in awards of defense shrinking profit margids,\eduCed
.
: 7;2 ,7'^'
contracts and some increase in the
'liquidity of iorporatibn^, ^hrgfi Skeptical of Consumer Initiative ■
Keif
mkX.A-. vg.1: -"if*.
pmnlnv-
by
stimulus to the upswing, showed a substantial_re- ment, andl meows-,
u, em
cluction in output during 1956. The their yecora levels ana
bvuk
«* ««
automobile industry, after pro- ployment advanced.
Over
pe- £jow 0f new business from other
Cueing 7.9 million passenger cars
in 1955, turned out only 5.8 milMan in 1956, a decrease of 27%
Construction-of houses fell from wauunai ri^ uuJ?1 U1U^U
tember
er.
This was a level ihigher
a level of 1,330,000 units in 1955
more than 4%,
The main factor than in December of last year, but
CIX1UC1
to 1,120,000 units in 1956, a 16%
contributing^ to
was
# pojnt3 _belowr the level in
arop. , i
>
'
.
vided
•
"
expenditures nn nianl. and pruiinoh plant and equip-
.
more
nondurables"has'ad-
on
.
th€
oi
and general business activity
+nrnp/i down
"
viuca.
.
steady increase in
^ ,*a«cea
1
J*1,0*11161 ^^^^rIpvn^i^itHrpfl
tians suggest
remained unchanged.
decline
t"
^Byvthe ^
_
^ ..w,
not deby
peak
imuaeFaieiyThe faflure ^ of vancedTmoderately
rmopths^ of 1957.
National Product either continued
py-
a
.
.
f
Dr. Avram K,«selgoff
anexpanof boom
and
'
,
rftui
its
This stability in! the
and-1^ for 4fie'eight! Spending
pacity in any ipajor industries,
Ventory liquidation and an expah- Their expectations
damperied,
..j.
,,,.
'..
.;T_.
on -businessmen
sion
in
consumer
spending ' On : businessmen started to revfse into
revfseinnondurables
and
services. "Allt vestment programs nrtumtfiftTH"
All tfiuuTi'MO'nr'.nmdrarric downward.
1 mi in u 1 wnifs
below
aggregate has been a, result however, of a; sighificant deehne: in
the purchases <rf consumer durable
good s, especially automobiles «■'
the
In
expenditures did
crease
_
productive capacity, output of
^..ditm^Fe^al, rate of instat^^
local, a decline in the
:
govg
Summer's End in 1957
further risevin capital spending,
The consumer: s e c t o r of the
White industry .was. expanding than 1%.
" ./•
.
,.
wniwn
Follow-
incentive for.
sumer
-
reached in the /Januaryrkfareh demand to: * keep pace with * the
.period. This Miwc««s was w<u»u« 5 growth in business fixed investincrease woa caused gruwui in" utisiitess iixeti myesipenuu.
rnamKr hv a rise in government ment, i«»/i to the appearance of
risp
uovprnmpnt »-«.»*»+ led
oMnauronoa *.f:
mainiy by
ernments.
1956.
'SLJiL*
*
j
r^were
^hl^es
Sni
i
.Changed Capital Spending
~'y
,
in the.
•
De-
««
;
.
Swine
spring
.
period.
c
portant
esses
the
PiinPtf^n6 varinn^s
im¬
t,
a c
a
an
stood at 30% above the proceding
dfc»ne in unemployment,/stood :
spite the weaknesses in the economy,
general business
activity
1was
able to edge up as the de-
preceded it.
of
during
increase
developents that
in
-in the third quarter of last year,
the rate. of capital spending also
in
7
by about 50%r existed before the recession but
also would create
•
■
and cer¬
year
tain
sea- ^third quarter, 1957,
economy,
accounting for about
peak m 1953. Available estimates 65% of gross national product;has
jindicaje that these expenditures shown great stability since thebei
.resulted, in au increase of/about ginning, of the recession. Even iri
the 1949 or 1954 recessions.
In 512%
in mamufacturing
capacity the worst stage, of it the first
September, the ratio, reflecting a between 1955 and 1957;
v>'
quarter of this yeaH total con-
be made spending, a sharp drop m tne raw?
"recession of inventory accumulation and a
downward movement in the voldownward movement in the volume of new
^nstroction. Total
retail sales, adjusted for higher
prices, registered only a slight
became
that
'■»
of economic *
areas
when measured in current dollars,
slight decline in business capital from
—
mands in other
a re-
May and June, .the
of unemployed
adin July and further in. August to 7.6%, .a: larger
jobless percentage of the labor
force than at any tune during
by
increases,
price
for
Fallowing
vanced to 7.3%
business prospects cannot
without reference to the
.
some
decrease
distant future.
for
changes.
proportion
nondurables and service*. Foresee*
overall cohstruction expenditures' advancing moderately, gov-.
ernment spending moving up, and moderate accumulation of ,•
inventory stocks commencing in first half of 1959. Notes re¬
covery is occurring with capacity greater in delation to output
at the peak of the latest expansion than in previous declines,
and without past housing and consumer demand exuberance.
Looks to new investment boom to keep us from serious trouble
ance
after accounting
sonal
durable goods than in
in the not too
As
a
million
2.6
7.5%,
out of steam
Any appraisal of the current
economic situation and future
12% less than In." January; -modernization programs.
large scale,; unless there: is
considerable >; increase* in/ de-
on. a
'Jthe financing of, expansiori- and
Unemployment rose suit,, the<rate of outlays for new. activity.;^ This- increase must r.be
in August 1957 plant
and equipment advanced- of a size that would; hot only
or 4.3%
of the labor force to its from the recession low in the fir^t redress the lack of balance bepeak Of 5.2 million in April ,or quarter, 1955., to its peak in the tween output and capacity, which
before a full fledged expansion develops
in depicting the probability] that economic activity wit advance
to higher levels on into , 1959.
With rising incomes, Mr.
Ksselgoff envisions accompanying faster increase in consumer
may run
or
borrowing,, facilitated
easy
Thursday, December 4, 195$
.
ol last year.
from
Corp., New York City
raises the possibility
Business economist
lion
KISSELGOFF*
By AVE AM
vand
it stood
.
.
a major
c^d d.,fr
.
,
«»u
There
/Under other circumstances, such
pronounced downward moveinents ih these two key segments
of the economy could have led to
a contraction in general business
jiptivitv
acti\
Such
a
ity! bucn a
JTfn
dustries, which experienced
brunt of the recession.
IS^n»Qr?ir
io+f
gams
10(-Q
ftvmont
expansion
.
ThP
4ces.
current re*f
the
in
rpmilfpYl
ennnmv
economy
uunuiny
xcsuxtcu
xu
re-
a
a,
xc
tq go orr ain the recov*eries;nf'I949
diid 1954 when there was Stiff lA-
...7,__.
ftq^nces
were
produced
the
by
bfgh rate. 0f inve$thient
..
,
_
spree as
I"
hoc
in
'Hprhari^
the
liAiSre
avnoru4orl
:
rtf.
inventory
liquid a tionwhich.
si,u7'
1
ran
iii
After eight mcmthS of?
indebted.
miv
- ?
; ^
L.«;
f.;:-V-r7Sve-',been»:':.py.e^ 4uraW ft may
production; em-
'n
•
9^ consumer debt to cprfsumer in~<
dAlYMS
fVlAH ffVt
Whether-
«rwTflPwtl»t: tTTVlW^WWli
•
purchases^
occurred
in total economists is that recovery from
1 What are the prospects that the
aecllne n1nr>4.
tVlo ' Vmoinoco
.Annosinn
io
trpinrl "f 'Aol*'^' "'liiKip+fVl flTCT
'"t*frTt
will make important new gains;
expenditures on plant and equip- the business recession is . firmly,; tr^d' in'i'capitar; ^eriding yvffl will r
ment which dropped by $5 billion underway. Only a few•' rhu:-l
analysts reverseitself-ih theriearifuture? m the cdmhrg months wfll depeAd
' u'i
««<^lanppfi
-
in
trpnH«
cnnflicting
that:
ftis tohne
^
substantial
unsatisfied:' deferred;
r.to-in^j^ktoy"»* Th^nW ^ The adjustoent of xapitaLprp- demknd and consumer: indebted-'
ness,was low: ConshnierS entered;
Busto^ wMch added to its rJovery output ^
the recession
stockij rt Jspread^and particularly,! pro^ ' with durablein 1957 welt stocked^
J*nceduoni in the durable-goods i»goods arid heavily
contraction"how- billionrpv,;,, in the- first quarter, Wi""v.uvi •TC"A.WCSM>^'
rate
contraction, now
With
outlays on nondurables and serv-
indication
playing
....
.
little
is
.
nn<1
,
AM
'
..
-
consumer
■
_j_w
Consiimer
outlays
on
durable question is whether recoVery will business intentibns by:the, Depart-, consuniersjvill ire wilhng and able;
the first three miarters of 1956
goods were down $4 billion or be completed in a short period of of, Commerce: and ^the?Securities, ^ contract-addifcional debt; The.
' 10% and net'foreign investment, time and whether it will.be foi- and
Exchange /Coiririiissiori, the fact that disposable, income per
lowed by a vigorous expansion. A drop in_expenditures"bti.rian<f capita,^ after adjustment.'for;rMK
cline in total industrial output, $3 billion or 85%.
brief discussion of the reasons for equiprnent, ended .last^.qu^rte)rL In log prices; awwed a (fechne^ to
which, when measured by the
These substantial decreases in
Federal Reserve index of nroduc- arttvifcr
"«n»4iv"nA«t»"tovKoT" the
current recession may be the rclOsirig' mohths'ofto : yqar ;April-June fontheTfourffrsucceg
of Gross National Product, during
•m
r
i-x
i
j.
_i
«,pW
j eaerai Reserve maex or proauc
activity were partly counterbaltoon, edged down from 144 in anced by a continued moderate
December, 1955, to 142 in June, rise in consumer
spending
on
1956. In July of that year output services of about
$3 billion and
dropped
because
further
of
'the
1956
the
.In, the
Strike.
to
137,
mainly
nation-wide
final
steel
quarter
'paee
further
ss
advance
in state
" ""~"i
WqI
of billion
Expenditures
Sw?nond^SS11^
nn
r*
A
•
-
i
A1
i
and
of the rise in exports
c«n,
due to the
.Himiinn
wllcity operations^ in Ihe
mifloje
and
°Govern-
fat
alnnf
aanlnmnat
were
'
jntarrnn^
characterized,
w
mainr.
productive
f
Y
expenditures "
show
.
'
are
fc
exnfecf ed
VJt
factor
xvx^0
caxisp^' it
thai caused'' it
that
capacity
and
output,
cycllcal
started with
upswing
a
ter of
pxxinct^xxy
which
1^,1955-56 1953-54,
V"*"*1?*.?**'-and that of
areas,
capital
measured.-
expenditures,
.'^fropt / .-pcglt-
conccnxraiea, w1
to
respec...
-
7
;;
•
;
• quarters, com pa r e d: With four
When operations in most indus- quarters in 1948-49 and six quar-.
gouus.
tries
reach advanced ters in 1953-54. Since even at the
levels of utilization of capacity in lowest point of this recession,
1955, business set out on a mas- business is spending on plant and
sive investment program to; keep equipment at an annual rate of
'
began
to
pace
,
pie occupied in marnrfacturmg, on
since
_
of time.Also^little stmmterms^
since for practical purposes their1
liberalization; cannot be
further.
„
»
,
carried
-
t?.
*
With
rising income, however;
consumers will, probably, increase
the rate of their expenditures
oci
durables to a greater degree than
on nondurables and services since
not reduced in the
were
cession.
The outlook
is
re-
that, al-
they will lack much buoyancy.
Moderate- Construction
Construction
the etict of 1956,
'tinder the Revenue Act of ^1954)
the /rise; in
capital i expenditures
Advance
expenditures, an¬
other important area of economic
-
months
iv^tier\,^
°* 1908, exhibrted little'change in
i
real terms frwn the_corresponding
PerlG<*
1957. Tnese expenqi-
"tances._(iin n£Stb™^'>ec*^e.-®f traction, an early resumption of moocratety
ep.acceleratedl rate of depreciation ?fte!.®nly toee Quarters of con- tuiw^re.
f^r1b?" eh
an
,y.e:a7
advance^a«
cuxhuxettxv
tafartrto producing durable hi^ rate.
the decrease
^
these
The duration of the" dScfeise in
With expected growth. Funds $36 billion, of which a significant
after allow- Jnsted, began to fall last >July made. available through greater portion- represents expansion in
'
reaching their trough in February profits, rising depreciation allow- capacity, it is difficult to-visualize,
Shcixi^l c».f J;»c. "fX E.oL.5:
Outlook, Unj,v«r«ity ol MkMftan, An*
Digitized Arbor, Mich.
for FRASER
quarter is mot encouraging in
'respect The
x
highlation,iW;be e
lalt yeai will be 20%. In fmm instalmentsales credit
recession of 1948-49,
was .characterized *by a consider-
spectacular rise in when
other consumer goods. The strong
»vrto
sive^^
took place in the third quartet
does not modify the general pic-;
total de- ture sin^it Covws tmly a short
Reflecting recessionary influ- the demand for houses and auto- trough, fell 20% and 11%,
ences in the economy, industrial mobiles which rapidly spread to tively.
x6
to
slight rise:;,
as
that the iilV^^ttrtent 'outlays have reached their low point
a
W a
sumption
many
The general deterioration in
tVlp Aafi rin„ri_'
S fr? i?' business activity and the adjustaorivTios'? rpvTZ merits preceding it were accomfavity.r
me
e
ly
^n 195 .The panied by a drop in employment,
first pine months of last year Total" civilian jobs,
seasonally ada^inctmnnt
;
Singe be?w<£n thefthdquarter"
a
Tha
answer
seems to be an balance between the
M
steel
significant increase in government expenditures.
.
multitude of forces:at;wprk,preceding
niulllluuv
a
major
tqaeayt «but rather was a re- this year,
newftoaeNrf cydlcal.«» second quarter of
expansion
flection of the combined influence
to
Although the recession,'as all in this recession, the
economic situations, was a result crease in such spending from the period,
mk
average.
This advance, however, did not
^
V
Explains Recent Recession
°n-^°n" of
i
attpmntine
me Question.
n
new construeconstruetion and purchases of goods and
services by the Federal
®.lS sumer nondurables,
showed acceleration with produc6i
4
IattaI
1 A K
4U
tion rising to a level of 145 on the
/\n
a
xn
fh^uesUon
the question.
m xne-^ remameer or,
Volume
Number 5800
188
t
.
.
The Commercial and Financial Chronicle
(2311)
funding,operation of the Treasury permit that to happen here
had, of necessity, to be carried America there will be no need
out
through use of only the intercontinental missiles.
>t;:
"
III
-
shortest term securities.
•
ThisJ sudden
;
ii fidence in the
By H. L. SPENCER
f
ment securities
All those pressure groups, spe¬
interests
and
so
called
cial
con-
"liberal"
politicians
who
urge
the
United. more and more government
serious. matter, It may, spending are playing, a deadly
well mark the end of that
period game of Russian roulette with the
during |which inflation has not safety of this
country at stake.
^ been
a
critical question in this When
they proclaim from the
:V country. It must serve to convince
housetops that more
in the recent dumping of govern¬
sees
"decline in confidence in the long-term credit
a
of
in
for :
a
,
California contributor
,
,
in
long-term credit of
the^Government
States is
Pasadena, California
,
'
decline
,
inflation is
the most naive and optimistic not
only inevitable but desirable
"serve toconvince even the most naive and
that there is a bottom to
optimistic that
the; —whte they claim that the rotting
there is a bottom to the barrel of unlimited
barrel of unlimited
spending and debt."
spending and dollar will some day be worth no
debt* Congress has
clearly over- more than a dime and cast asper¬
Agrees it is nothing less than foolhardy to continue our vast
,v loaded the
Treasury Department sions on die obligations of our
splurge in foreign aid and welfare spending beyond our tax
£ with obligations to raise new government, they
are, in effect,
; .<■ V.;r;r.-revenue ability. '
'
"V"
"
money beyond its ability to mar-;
selling the United States, short
+
V
.
A,
,V*x
- T
r
•
.
ket its securities on any reason-^ and creating that very climate in
In the October issue of "Reader's and that
military help be tapered able
cost
basis
and' Secretary which
rabid, inflation: flourishes.
Digest" U,, S. Senator Harry F.r off.
*
<' ",
•
Anderson, with some $70 billionj
Thoughtless acceptance of a made
Byrd of Virginia has set out some
pAmnapA<1
coming due in the next 12 months,, in Russia program for the United
-pretty grim figures, on Federal
Compares Forelga.Indebtedness ^ g - a
rugged problem on his. States'
of
America
wotild
be
debt, spending
•
~' ' ->-?*'*** Outs
hands. In the face of these hard tragic..
*.•:I •
cfiffd inflation;
o;;.f\ \
Since • .a start towatd- a>- more;
f
in effect a crisis in conT&e
Senator
realistic program of fiscal
Finds We" Have Been Warned "i
sanity-.fidence, if is nothing less than
knows
his',
J. has to begin somewhere and since
foolhardy to continue our ; vast
Let no
one ; say
that Sehatof
the subject of foreign aid appears
subject.
As :
£piUFge irt foyeign aid and wel- Byrd and Demaree Bess have not
-Chairman
of
to excite greater public resentfare. state spending
beyond our made a sincere and powerful ef¬
-the/Sena te;
meht than most other forms of :
ability to pay for it .in taxes.
•
fort
to
warn
us.
The
Senator's
IF i n a
;
of the Government of the United States" and hopes it will
-
even
<
"*s
.
^
_
x
Is New Firm Name
Oppenheimer, Vanden Broeck &
Co., 120 Broadway, New York
City,
members of the New York
Stock
Exchange • and
Exchange have
Stock
fective Dec.
-
spending, -this
nee
holds
he
of i
one
r.the £ most
tempted to do
im-
attr
j
.
for
govern¬
ment and
fully
qualifies
as an
long
t—
Spencer
experi.
ence in
him
a
of
m.
Congress, since 1933, gives
background of knowledge
the
affairs
of
government
possessed
by few men in Washington
today. His unquestioned
integrity entitle his opinion to our
utmost respect.
The Senator proposes, as a first
step toward solution of the whole
hnnfiioin« nrnV,lom rvf
confusing problem of debt, spendlag and inflation, that Congress
must forthwith proceed to balance
flafiniailw1i
will
of
some
compared with
as
1957,
our
clients
information
to
as
never
Oct. , 8, 1958, give the latest costly responsibilities all over the
information available as to the world, thereby causing a debilipublic
debts
of
the
following gating drain
rp
•
„
_
To
,
of
many
.
,
;
t
overburdened
our
the
approximate
astronomical
figure of $300
have assumed an additienal contingent debt liability of
more than $250 billion; on account
o£ expenditures
guaranteed and
insured by the government. Since
the Commerce Department openly
billion,
we
admitted
Fublic
this
and
spring
Private
Debt
o
aS
1
little
chance
iiiuc
than 25% of
of
to
IU
cnaiiuc
gci
get
in
brink
Oppenheimer, Neti &
still
the
richest
world. We
nation
afford
can
economics
U.
S.
portant
debt
changed.
the
in
sor
or
a
Trillion
Dollars
i
Annual Dinner Dee. 10
The Investment Associatioh of
New York will hold its anhual
dinner
served
.
sum of
quarters
of
this
in
good
nearly threetrillion dollars of
a
reason
Responsible members of the next
the
best
informed
in
men
America today.,
Fdr those interested in economy
Senator .Byrd outlines six different lines of attack on spending,
each
capable of producing great
savings.
But he places special
enrphasis on the apparently interminable problem of foreign aid.
He
estimates -^that- in
11
years
expenditures for this purpose have
amounted to $75> billion, divided
into
$22.5 - billion for
military
assistance
and
$52.5 billion for
economic
aid.
He
nn+inna
nf
Anatprn
Franee
of
has
disaster
are
approached
the
future
welfare
and
safety of
•
-
In
this
post-election
period,
many
political crystal
bell experts are trying to figure
out what happened to the
Repub¬
lican party, this thought may be
worth consideration: That people
all over the country are confused
and dissatisfied by the fear and
when
so
ous
6
Palmi "Room,
advises
that
economic aid should be terminated
to
dinner at 7.
"
-
:
•'
United Kingdom
France
-ftaly
the
many other
in dangerous condition,
does
paid
it
owe.
at the time
refunded.
it
:
spund
of
economists
in
the
wisdom
and
good judgment of those to whom
been
ment
of
those
have
Germany
India
Brazil
^
was
probably
the recent rather
Guest speaker will
entrusted
this
by
\«
be Admiral
Forces in Southern
Europe.
>
Admil New Partner
CHICAGO, 111 —James D. Stet¬
son
Coleman will be admitted to
■
partnership in Bacori, Whipple &1
Co., 135 South La Salle Street,1
members
of
Midwest
the
New
Stock
York
andf
Exchanges,
Jan. 1.
on
f-
'
Midland Sees. Branches
ORLANDO, Fla.—Midland Se- '
cprities Company, Inc. has opened
rated.
conditions,
a
was
opened
Sixth
manage¬
vote
of
NO
a
written
ernment
securities
them'into
a
have
market
that
Securities
branch
has
103
at
sudden realization
of
management
Mr. Shaver
Floyd
was
created
for
Three With Yerke
McKelvy Opens Branch
of orthodox capital-
^ning
the cold,
warfare.
If
unthinking
of
the
Stock
New York and
Exchanges,
has
Pittsburgh
opened
a
(Special to The Financial Chronicle)
branch office in the First National
via economic
Bank Building under the manage¬
luxury loving,
and careless people ment of Robert C. Arthurs.
COLUMBUS, Ohio
E.
Mink,,
Harry
H.
—
'
filiated
and
with
Marvin
Associates,
Inc.,
Broad Street.
525,000 Shares
dumped
no
WW.
of the infla-
Common Stock
(#1 Par Value)
by
•
.
loss of confidence in the financial
intelligence
and
integrity • of
Congress which has reflected adversely on
the
credit
of
our
Price: $10 per
Share
government
except
on
a
very
short-term basis. The October re-
The Prospectas may be
1956
—.—1957
1957
—
—^
—r
1954
—:——1957
U.- S. Treasury Statement October 14-
1958
TT. S. Contingent Debt (Senator Byrd)-.
1958'
U. S. Public & Private Debt (Dept. Com.) 1957i
,
$76,222,800,000'
15,280,560J)00
7,635,840,000
4,753,707,000
4,511,465,000
8,965,152,000
257,162,000'
1,235.0OO;0OO
280,445$73,353
250,000,000,000
726,000,000,000
•
or
brokers
obtained from the undersigned and such other dealer*
lawfully offer these securities in this State,
as may
Baciie & go.
and
:
David W. Patch have become af¬
December
before
Wendell
Naugle
war
our
a great Federal
1959
deliberately
1956
'
,
use
istic principles at home is the
Conwiitmist prescription for win-
even
Congressional
approval of spending some $12 billion
in
excess
of
prospective
revenue. This has caused a public
N. ^
formerly
resident manager for First Florida
CHARLEROI, Pa.—McKelvy &
tionary effect of
deficit
f
Investors.
inevitable.
support from the Federal Reserve
Board or anyone else. There was
a
also i
South
Street, Leesburg, Fla., under
Shaver.
currencies abroad through infla- Company of Pittsburgh, members
debt
had
;
.
.
Midland
the
the
great nation. Under
CONFIDENCE
something approaching panic has
occurred. Large holders of gov-*
1957-
the
.
Charles R, Brown. U. S. N. Com¬
mander-in-Chief
of
the
Allied
frightening near'1
—,—1956
_______________
in
'
,
C.. Yerke '
West
40
r..
'One feature of Senator Byrd's
fine and honest statement is that
-
Japan
.
p.m.
followed
:
■
stub-
balanced budgets and
money.''
Debauchery of
fion but
to
must
faith
lost
bornly clung to such old fashioned
im-
appear
Unfortunately,
become
important,
Netherlands
-
7
be
to'
An of
■
at the WaldorfCocktails will be
^
"Soviet
the
magnitude
"We
brink of national bankruptcy
—
to Mr. Bess, who served as an
American correspondent in Russia
for many years, ever since 1936
country should be.,^failure in the
government bond
for. thoughtful and market. In the
last few months
Congress to stop, look and listen
to advice on this subject from one
o£
afford to
10
Hotel..
from
Sudden Dumping of Governments
*n- anY ^vent, the, existence of
debt
can
Dec.
Astoria
•
*
^
the1 fantastic
we
the greatest experiment in human,
economic
and
political freedom
that ever existed.
has
v
-
trv +h#»
'But what of Russia? According
it." And to
not
because
be
Three-Qnarters of
(Congress, which
'::
Inv. Ass'n of New York
rieglect only at very great risk to
Keynesian bent' notions as
a
will
acutely
on
Fed¬
budget and assure our people
it will stay" balanced" is a
notice
to
all
of
us,
and
in
particular to members of the next
*
those who have
in
that
that
Co.-The
.
nations
others,
however,
who
feel
they
are
profiting from inflation, the reaction may be, "So what? We are
$726 billion, it would
tfee Senator's figures
the conservative side.
be
a
™
,
1Q17'
war.
To
ourselves,"
may
exas
eral
1, the firm's business
partnership roster and manage¬
ment of the firm will remain un¬
Europe an^ to China since the last —^that, iri consequence, they have
hard earned
our
own?"
our
United States in 1957 amounted to
appear
become
inflation
of
uge
admonition, "to balance the
announced that ef¬
above figures will
frightful
weapon * of
economic
shocking. They will be
a branch office at 51-53
warfare. As inflation has brought
East Robparticularly so to young People
+
+
tensions created as we have awk¬ inson under the management of
,„1
dOOUl
etDnOmiC
pdlcUy&lS
dllQ
just starting out in life, who have
Emory L. Kendrick. Mr. Kendrick
complete loss of security,. Com¬
wardly scrambled from the brink
taken on a heavy load of installwas
munism has moved in. We have
formerly President of the
ment debt and who, after
of war to the much more danger¬
taxes, seen
First Florida Investors
Incorpoth^s happen to Russia itself
the
of
tHe
in
economy,
appear
the
that
our
The Russians have
ert
taxpayers the
fraction
to
on
nations:
Federal debt
„
more
dollars to help support other na¬
tions whose debt is only a minor
soon
Soviets,
?n
He also points out that, in addition
to; the officially
admitted
:
certain degree of
the armaments race
a
promising of
results.
Public Debt of member nations in
(Demaree Bess, ".Saturday Evetheir own currencies. These
fig^; n'ing Post," Oct/18, 1958). They
ures, converted into dollars at the •
hope to push the United States
foreign exchange rates in effect into .acceptance of * still, more
more
r.
-
.
the
we
uutil that is done.
-
the latter have now turned toward
economic
warfare
pressures
as
pinSnthey to contribute
ask' '
be controlled
be called upon
1
:
between the U. S. and the
519-562, provides
pages
'
,
U'.S.S.R.'s Flan
stalemate in
Book
,
-'
-
,
jn the face of
our own.
Nations -Year
UM7
tue budget anu thereafter hecjj At. iiuu there is
and uicicaiici keep it find wicic is
flation
of
prominent #relief
authentic
:
His
expert.
t
abroad
beprt>•
little research on;•;
status
•'The -United
in/
posts
debt
more
-portant finanIda!
the
writer- has
a
American
will be conducted under the
name
of
,
^Committee
11
4, 1958
'»
The Commercial and Financial Chronicle
12
Standby Procedures
«A
FNMA's Role in
BAUGHMAN*
By J. STANLEY
ability to increase
sale of addi¬
surplus and.
proceeds of portfolio liquidation; (3) attractiveness of FNMA
Purchase Option Plan despite current conditions; and (4)
extent of its Special Assistance Functions.
Advises builders
and lenders that competition for investment funds is and will
be keen and that private enterprise needs to become more
discussion
Our
volume purchaser; (2) its
in
occurs
an
considerable con¬
fusion as far as housing and its
financing is concerned. During a
period of just
one
year
folio
turned
e r
d
z e
of 1957
Market
Secondary
a
hen
b y
a
downward in¬
rates, a
better
supply
J. Stanley
Baughraan
became
indica-
that it will again become
are
volume
Reflecting
purchaser.
conditions, FNMA's average
.hese
terest
it
Present
seller.
sizable
ions
and
declined
jhasing
a
monthly secondary market offer¬
funds
of¬
by investors competing for
home mortgages, decreasing dis¬
counts for FHA and VA mort¬
merely
transitory.
One thing is clear.
There is a
big unsatisfied demand for low
and moderate priced housing.
It
is housing's business to devise
ways and means of satisfying this
as
demand.
sion
The
real
represents
in the
chain
a
estate
very
profes¬
vital link
between home
con¬
struction and ultimate home
own¬
reflected
also
sales
of
ership.
With
these
comments
as
back¬
ground, I will review briefly what
is
excellent for
a
The Management and Liquidat¬
ing Functions deal with the dis¬
position of the old FNMA port¬
folio
acquired
under
contracts
months they totaled
$393 million but in the last
ter
quar¬
they fell to $69 million. A siz¬
able volume
gages
- was
banks and
of
the FNMA mort¬
purchased
by
savings and loan
their
community's
local
asso¬
The
billion
$1
housing.
FNMA
Special
of
that
program
completed a little
and altogether
ago
of
liquidity to
sellers needing FNMA's assistance.
Treasury subscribed preferred
stock, together with FNMA com¬
mon
measure
stock
and
bility
having been reduced by
about 30% during that time.
So
far this year about 6% of the port*R»marka of Mr. Baughman before the
National
Association
of
Real
Estate
Boards,
San
Francisco,
Calif.,
1956.
.
Option
Nov.
10,
Plan.
first
at
Although
glance the procedure may not ap¬
pear to be attractive in view of
market
current
estate
conditions,
real
the
option
year and
materially.
enjoyed
advantages
plan
substantial
thereby.
The
procedure
works
FNMA purchases mort¬
from sellers at FNMA's cur¬
prices in its usual manner,
also, concurrently, permits the
gages
rent
but
seller to obtain
nine-month op¬
a
which
under
tion
would
not
pared
with
be
legislation
re-enacted.
current
Com¬
they
may
market
con¬
re¬
the same mortgage at
FNMA purchase price.
The
V
gages.
,,
••
that some. may be in
1 realize
its
assistance
special
mort¬
I would like, however, to
say
a
few words for the other
side.
As
you
may
know,
the
Administration
has
consistently
gages.,
taken
the
position that FNMA's
Assistance Functions,
Special
which
are
financed with Treasury
should
supplement
and
private financing
in
funds,
encourage
the
home
should
construction
field
and
supplant such financ¬
not
the
mortgages are valued by the mar¬
ket at less than par, the continu¬
In
circumstances,
the
when
purchase price is the same with¬
out regard to whether the seller ation
of
FNMA
par
purchase
obtains
a
purchase option as a prices together with the statutory
part of the transaction.
Sellers controls on fees and charges make
wishing to obtain a purchase op¬ it impracticable for^ private in¬
tion are charged a purchase option vestors to compete in the purchase
fee equal to one-half of one per¬ of even the more desirable of the
cent of the unpaid principal mortgages
eligible
for
FNMA
amount of the mortgages involved
addition, the usual Pur¬
Marketing Fee and
in
and
stock
common
quirements
subscription
be
must
cash
re¬
observed.
to raise
their
on
special assistance. It is quite clear
in the
long
run more
gories of housing mortgages if
private capital were actively en¬
couraged to invest in, and became
familiar with, such mortgages.
mort¬
in larger amounts than are
In regard to the recent change
under customary bor¬
in
FNMA's special assistance
rowing arrangements,
and
also prices and current market condi¬
gives them an additional period tions, I think it may be appropri¬
of time in which they can seek
ate to suggest that builders, lend¬
to sell the FNMA-owned mort¬
ers, and realtors make sure that
gages elsewhere.
they have not been lulled into an
While FNMA will, to the extent attitude of
complacency by the
of its ability and in response to easy mortgage market of a few
sellers' needs,
strive to provide months ago, lower interest rates,
liquidity for home
$2
billion
925
This
ments.
creased-
stock
to
and
by
for
be
Of
this
additional
commit¬
further
additional
in¬
common
subscriptions and additions
surplus,
as
well
as
to
be
industry,
it must also sell mortgages.
Un¬
Association
the
well
folio
as
buy mortgages,
will
not
revolve
of
effectiveness
Market
can
its
sell
as
by the pro¬
ceeds of portfolio liquidation.
The more
meet
their
the
the Government
major
field,
factor
sibilities of these programs in your
operations.
and
better
investment
needs
the
private
the
programs
approved
by the President, the*
Congress has authorized FNMA to
for low and moderate
of
priced hous--
$13,500
mg
mortgages
and
$500 million for armed
ices
housing
latter
Section
a
the
of
less
than
mortgages * (housing
employees connected
civilian
with
serv-v
reserved for FHA
was
809
not
less;
or
mortgages;
authorization
$58,750,000
military research or devel¬
installation). About $37
million
remains
commitments
available
to
purchase
for
con¬
type mortgages and ap¬
proximately $40;t million •-fis"cur¬
rently ^available for Section 809
sumer
mo
rtgagefe
? -
.,f;
7*The entire $1 billion authorized
for
low and
the
moderate priced
housing
program
mitted.
Under
this
FNMA
issued
commitments
has
been
com¬
program,
to
purchase 82,996 mortgages which
provide for the construction of
82,996 units of new housing in
1,550 different communities lot
cated
in 43 states, Hawaii,
and
Puerto
Rico.
This
program
is
playing a significant part in the
housing revival of 1958 and in
.
providing
the
wide base on which
business as a whole
a
housing
build.
can
Incidentally,
commitments
will
tended, but sellers
not
these
be
-
ex¬
offer the
mortgages to the Association for
purchase
under
its
Secondary
Market
Operations if they are
many
unable to deliver them under the
contracts
within
commitment
the
periods.
ance
of its Special Assist¬
Functions, the Association in
1958
entered into immediate pur¬
Under all
chase
commitment
advance
or*
contracts
aggregating $1*304 mil¬
lion
and
purchased mortgages
totaling $182 million.
.
The Association has
unquestion¬
ably provided for many4>uilders,
brokers, home financing organiza¬
tions, and home buyers a supple¬
mentary source of mortgage funds
without which much
new
housing
construction and many home sales
could not have been
The
extent
assistance
the
to
1958
is
in
of
the
all
housing
reflected
of
accomplished.
Association's
its
activities
industry during
in
the
Associa¬
tion's purchases
totaling $385 mil¬
lion and $1 billion 488 million of
commitments
issued
for the
pur¬
chase of mortgages.
Three With Schwabacher
(Special to The Financial Chronicle)
enterprise
prepared to live
with
1958 Authorizations
SAN
Blake
direction
of
the President
FRANCISCO, Calif. — G.
Calder, Robert D. Clam-
pett, Austin C. Dowling,. and S.
Ray Huntington have become as¬
sociated with Schwabacher &
100
1958
legislation increased
the Association's authority to ex¬
pend
special
assistance .funds
under
;
to
purchase $200 million of Coopera¬
tive housing mortgages, $1 billion
the
the times.
The
"
addition
In
is to
in
cease
* simultaneously
housing
investment
will need to become more realistic
entirely.
than $1 billion 300 mil¬
or
for
that unless
housing
portfolio affords' local
banks and savings and loan asso¬
ciations an excellent opportunity
and
and
the
and
Secondary
lion FNMA
to
recognize that com¬
funds is
will continue to be keen and,
petition
become
Operations
will
lenders must
its port¬
diminished
standby
will
continue
than
million.
available
purchases
to
mortgage
total
has about $1 billion 460
now
million
is
the
to
authorized by the Emer¬
Act of 1958.
Of
Housing
gency
funds should
be available for the selected cate¬
gages
Association
was
moderate priced
opment
nevertheless, in the
■ipper range of the market and in
some
cases
are
above the prices
being paid generally by private
investors for comparable mort¬
par, are,
ing.
chase
but
low and
for
purchase
and,
million
program
FNMA's revised special
assistance
prices, although
less
ditions,
for
last
very
of the sellers that had uti¬
like this:
price
purchase
par
favor of FNMA paying par prices
changed
Some
pired. The Association revised its
special assistance prices suo* u>
after it was definitely certain that
existed
conditions
later
program
will recall that similar
men
a
has pro¬
tion
liquida¬
to recommend for
more
surplus,
During the last four
-
I should like
will, for all
practical purposes, be materially
purchasing potential, the Associa¬
years
stock
common
consideration the FNMA Purchase
less
a
has totaled $4 billion 964 million.
tion has proceeded at a good rate,
the portfolio and purchasing lia¬
2%
$200
this program were included in the
than
usual
subscription.
useful
chasing
was
immediate purchase basis sub¬
the
for
subsequently reduced by $196 mil¬
lion and terminated on April 4
since the mortgages covered
by
new
mortgage in¬ decreased investor selectivity,
vestments through its purchasing and, what is more important, the
program, FNMA's Secondary Mar¬ prices FNMA was required to pay
known, expired at a time when ket Operations must not, however, for its Program Number 10 and
the mortgage market for a variety be considered only in relationship other special assistance mortgages.
of
reasons
was
becoming tight. to its purchasing activities; if the It seems to me that builders and
Program for low and
moderate priced housing, or Pro¬
gram Number 10 as it is better
purchasing potential of
year
'
ject to the payment of the re¬
quired Purchase and Marketing
Fee of one-half of one
percent
and
a
available
six
next
vided the Association with
a
fees; are charged.
Sellers may also elect to sell the
mortgages to the Association on
the
made before November, 1954. Pur¬
over
additional
of
other
no
vide
Functions
under
but
does not mean, of course, that the
Association will be unable to pro¬
Management and Liquidating
1V2%
million,
for low and ,
moderate priced housing was es-;
tablished, and (2) the par pur¬
chase
price
provisions
of
the
special assistance legislation ex¬
billion
$1
stock must be purchased
immediate
The termination
and
Association
the
$500
by $50 million and
creased
be ob¬
If the mortgage
during the last half of 1957 were
less than $200 thousand; during
tion.
are
—
to
by
the title VIII authorization was in¬
may
changing market conditions. Sales
doing,
high
volume of housing starts this year
and we in FNMA are proud of
the part the Association is play¬
ing in bringing about this situa¬
prospects
done
credit
of
proved
of
increased
were
other
some
This plan enables sellers
Assistance
has
commitment
to
or
seller may elect. Prior
as
contract,
very
record
can
common
lized
ciations having funds to invest in
FNMA
the
were
—
situation
sellers
in Alaska ($20 million); (5)
military and defense personnel
($11
million);
(6)
for
Elderly
Persons ($70 million); and (7) for
low cost housing ($4 million). The
latter program was initially ap¬
1958.
during
enactment
in
percent
year
FNMA
sold
ings
during the last half of 1957
about 6,200 and purchases
averaged about $68 million; the
mortgage situation during the first
and second quarters of 1958 im¬
gages, and favorable selling terms
—in short, a sort of paradise for proved considerably and the need
lor FNMA as a source of liquidity
builders and their associates in
decreased
thus offerings in the
the housing business.
Now, we
first quarter averaged 2,700 per
appear to be getting back to just
month and only 1,100 during the
about where we were this time
second quarter.
Offerings during
a year ago.
the
third
quarter totaled 3,503
The situation today is very un¬
and 1,905 of these were received
certain, to say the least.
Some
in September.
Offers in October
experts tell us that we can ex¬
alone exceeded the total received
pect the present trend of rising
during the entire third quarter.
financing costs, increasing yield
Purchases amounted to $131 mil¬
demands and larger FHA and VA
lion during the first quarter of
discounts to continue for some
1958, $43 million in the second
time—or to state it a little dif¬
quarter, and dropped to $22 mil¬
ferently — conditions will get
lion during the third, the lowest
worse before they become better.
since the third quarter of 1955.
Others, however, are more opti¬
As might be expected, FNMA's
mistic
and
regard the
present
of
fered
one
stock
tained if desired.
in heavy volume; in turn,
mortgage credit eased, pur-
gages
sev-<
characi
t
Operations have proved to be a
fairly accurate barometer of pre¬
vailing market conditions. A year
ago, when financing was tight, the
Association was purchasing mort¬
eral months of
ease
FNMA
The
one
a
-
to
approval
an
has
of
occurred
(4)
for
These were (1) the these programs, those pertaining
the
Emergency to Urban Renewal and Housing
Housing Act of 1958 under which- for the Elderly are probably oF
FNMA's special assistance fundsi", most interest ot realtors* J, sug¬
under direction qf the President gest that you investigate the pos¬
commit¬
a
and the purchase
common
investor
Secondary Market Operations
plete cycle. A
year ago home
financing was
extremely
tight. Then
followed
obtain
For
Functions
Assistance
under which the mortgage can be
sold
private funds.
is financed with
the
com¬
a
FNMA
is
at the end
hand
on
one-half
of
liquidated,
including
sales of $3 million. At the present
time about 37% of the portfolio
mortgage
business
ment fee of 1%
been
has
mort¬
.
commitments.
the
prepared to live with the times.
of
home
finance
to
are
sive sales to the Association under
present purchasing potential of $1.46 billion by
tional common stock subscriptions, additions to
atmosphere
used
be
Under this pro-
sufficiently below the level national economy.
Two
events- of -major - Impor¬
regular secondary'
market prices as to prevent exces- tance affecting the FNMA Special
which
expert conversant with subject first hand. Mr. Baughman s
about FNMA deal with:;(l) prospect that it will
realistic and better
unable to obtain hous¬
FNMA
Association's
comments
a
national population
of the
are
issues
advance gages generally as a means of
commitments to purchase market¬ retarding of stopping a decline
mortgage lending and home
able mortgages at prices which- in
building activites which threatens
are sufficient to facilitate advance
planning of home construction but' materially the stability of a high
tradictory outlook regarding mortgages, and a brief review of
overall Fannie May activities, are topics discussed by an
again become
lenders.
of. acceptable
ing under established home fi¬
nancing programs. They may also
ket conditions that procedure can
and
designed to provide of major disasters ($10 million);
standards' (2) in Guam <$7.5 million);1 (3)
economic costs for seg¬ for Urban Renewal ($400 million);
programs
full
at
especially
are
help meet the needs of both build¬
eedure,
market situation, con¬
complete reversal in the mortgage
ing
FNMA's" housing
about
•
in order at this time because dur-" ments
which
ing this period of unsettled mar-,
ers
Association
President, Federal National Mortgage
Washington, D. C.
The
words
few
'
standby procedure
Today's Mortgage Market
t
Thursday, December 4, 1958
.
(2312)
Co.,
Montgomery Street, members
of the New York and Pacific
Coa?t
Exchanges. Mr. Calder was
with Mason Brothers.
Clampett was with Denault &
Stock
formerly
Mr.
$500 million to $950 million Co.
help finance specific programs
business.
approved by him. About $523 mil¬
C. O. Williams Opens ;
lion of these funds has already
been authorized by the President
^
Special Assistance Functions
JENA, La.—Charles OrWiHiams
-These activities furnish assist¬ for use in financing the following is engaging in a securities busi¬
ance
for financing special hous¬ special programs:. (1) For victims ness from offices here.
communities
in
serve
which
they
do
by
to
•
Volume 188
Number 5800
.
.
The Commercial and Financial Chronicle
.
(2313)
day of additional: oil w.ill be re¬
quired for the U. S* alone.by, 1^66J
outlays; for a; shale oil industry
.
Competitiveness of Oil Shale
important also to note from
this table thai: Free Foreign de¬
outside
Head, Chemical Division, Denver Research Institute
University of Denver, Colorado
procuring oil
deposits is ^presently
a reasonable
rate of return on investment. In
submitting evidence to support
daim made ihat we can create this
entirely new industry, Dr.
Prims reminds ou we are
changing from an oil surplus to an oil
deficit potion and, from a defense
point of view, is mindful
thai U.S.SJI. is
conducting far more fundamental research on
oRshale than we are," After
summarizing: processes producing
od from shale,
including the Union Oil Company and the
Aspece processes, the scientist states we desperately need still
more basic, fundamental research.
Notes, further, that our
untapped reserve is equal in Size to the Middle East's and we,
thus, -can 'do much to alter and ^strengthen our foreign policy
with respect to
oil
shale
the
.
of
States
are
one
of
The
initiation
time
the next 20-25
tious, however,
years.
It
is
reasonable 't o^
arises
t that
vast idle
this
source
—
its place in the
an
OIL
of
one
energy de¬
new
details
the
hereon
are
It is
literature.
or
ries.
to
attempts
SHALE industry is
example of the above.
unfavorable
of
;
in
propi¬
enterprise
are
dustry have all failed
Dr. Charles H. Prien
"of this-enormous
as
a
an
in¬
result
circumstances
in
of the above catego¬
more
It appears,
however, that the
appropriate time has now arrived
for development and utilization of
U.
oil
S.
shale, deposits.
sufficient to state that the USGS
show why I
estimates these total
.
new
Past efforts to create such
required to
a portion
available
takes
all
Let
me
case.
reserves
to be
over
troleum
ever
12 times all the pe¬
extracted from the
anywhere
ground
since the first well
in
the
was
world
drilled.
-
Even
Future Petroleum Demand
estimate quoted
previously (that U. S. energy de¬
mands would double between 1958
the National Planning
1980)
Association predicted that the pe¬
troleum industry's proportion of
.
of these reserves-^-a strata deemed
continue
hold
to
at
its
present
J
*
•
.
is at hand.
This of
course
therefore, as it appears at present,
ularly was proposed last at great will not
appreciably alter the de¬
length and with the usual specula¬ mand curve for
petroleum in the
tive promotional efforts, some 40
next 25 years.
years ago. At that time new Texas
It
oil discoveries and 10-cents-a-bar¬
rel
crude, prices effectively de¬
use
of our oil shale re¬
It can reasonably be
whether this will not hap¬
again, and whether cheap
sources*
asked
pen
Middle East oil has not
now
is
a
well-known
ceeds-
.
Institute
which is the most likely
which
atT costs
with
crude
present,
prices.
> Insofar
as
market,
^competitive
posted ;. domestic
are
the
future
is
con¬
cerned shale oil will be
•more
produced
cheaply than crude petro¬
leum, as crude prices continue to
increased " petroleum demand or increase as a result of the de¬
not* There is every reason to be-1 creased drilling return per' foot,
by approximately;-1965,at
lieve, of -course,. that improver previously discussedThe inevitable future improvements in
ing 14 million barrels/dayr Cer¬ ments^. in .shale technology have
shale technology/ of course, will
tainly j therefore, a market will alreadyreduced; the capital out¬
exist in the immediate future, for lays required, arid will Continue only emphasize this gap/;
to do so Rs research continues. r
The effects of inflation on the
at least one million barrels/day of
above are not significant,, as long
oil from shale. Even one million
Future Domestic Crude Oil Costs
as
their influence
both- cost
barrels of shale oil per day would •
It is a well known fact that structures* is proportionately the
be only 7% of daily U. S. demand:
the' cost of finding new petroleum same* In the long term" it is prob¬
in 1965.
reserves-is increasing sharply/ in able tfcaf shale' oil prices will, in
V
part as a result of the greater part at least, determine the future
Future Capital Requirements
drilling depths required.
At a allowable price for domestic
In order to finance its growth
depth of 4,000 feet drilling costs petroleum crude.
4
the U S. petroleum industry is
are approximately $12 • per foot.
It is desirable, of course, that
expected to expend $80.3 billion •At
8,000 feet this cost rises to $20 shale oil obtains equitable tax
in the 10-year period 1957-66, for
per each new foot of depth, at treatment with crude oil as far as
increased production, plant facili¬
12,000 feet to $41 per foot, and at depletion allowance is concerned*
ties, transportation and marketing. over 15,000 feet depth to $105 per A recent Internal Revenue Servr
Approximately 70% of this total foot. Average well depths have ice ruling has indicated thai the
(or $57.6 billion) is required for increased from 3,000 feet in 1940
present 15% mining depletion, al¬
increased production alone.
to 4,000 feet in 1955, and are ex¬ lowance is applicable to oil shale.
Using these figures Dr. W. C. pected to reach 4,700 feet by 1965. This should, course, be based upThe new reserves
added
Schroeder, former head of the Of¬
per 011 the value of the shale oil pro¬
fice of Synthetic Fuels, has cal¬ foot of well drilled have continu¬ duced,
since this is the only
culated the average capital cost of ously declined, from 25 new bar¬ "value" inherent in oil shale rock.
.
;
•
.
and
replacement
petroleum
productive capacity in the/U* S.
for the< two periods 1955-60 and
1960-65, on a per daily barrel basis.
rels/ft. in 1945 to around
barrels/ft: iri 1956.
They
pected to drop to nine
compared
th^m^Yhbw applicable to
bar-* petroletim,* the; material > with
13 fffew
Thr iS/Miguref is to be
to
are ex¬
new
which shale oil hiust compete*
rels/ft. by 19651
'
The over-all result of the above
are
shown in Table II.
is
,
.
..
,
is
and,
constantly higher
price for
crude oil. At the 1956 discovery
rate of 13 barrels/ft. the crude
a
,
r
'
fact
.
.
.
,
shale
costs
oil
is
already
com¬
petitive with domestic petroleum,
without
even
ments
in
further
shale
improve¬
technology,
one per year in1 the
World War II.)
Conclusion Four:
Continued
pro¬
AITof these shares having been, sold,' this, announcement
■appears as a matter
;j
,
?
Ml
period since
It follows
on
page
i
of record only'
December 2,
NEW ISSUE
1958
that
petroleum production and
admittedly temporar¬
ily out of balance at present. There
is every indication, however, that
the
long-term
demand-growth
trends
of
3
to
5%
per
year, ex¬
perienced by the Free World dur¬
ing the past 3
decades, will con¬
tinue.
This relative growth in
anticipated petroleum demand in
the U. S. and Free
Foreign
700,000 Shares
American
International Bowling Corp
*
Common Stock
Priced
areas
at
$3.00 per Share
10-year period 1956-66 is
shown in Table I, taken from the
.
try", Chase Manhattan Bank, N. Y., Sept.
1957; Schroeder, W. C., "Economic Pos¬
sibilities-for Liquid Fuels. from Oil Shale
and Coal in the U. S., First Energy Re¬
sources '/Conference,
Denver, Colorado,
October, 1956 j and miscellaneous sources.
It
only reasonable that shale oil
petroleum: be given, equiva¬
Y • '
TABLE II
"
'
lent tax? treatment if the products
Average New Capital Requirements for
from both must - sell in the same
Petroleum Production
"break-even price" was $2.75/bbl. market;. A bill ;to accomplish tiiis
Capital Requirements for Each
New Barrel of Daily Production
By 1965 at nine barrels/ft.^ this fact, recommended by v the Secre¬
Dollars/Daily Bbl.
price will become $3.55/barrels, tary of Interior, was unsuccess¬
1950-1955
$5,900
>-!
for only break-reven operation, ex¬ fully
prosecuted in the recent
1956-1960
7,500
clusive of any effects of inflation. Congress.
1961-1965..,..;......
*
.
9,200
,
; This
It is the general conclusion of
upward price trend! can be
In this paper, presented at the
the. petroleum /industry that no
First Energy Resources Confer¬ expected to, continue.
It is important to note, in this major new domestic; oil field, yet
ence in
this city two years ago,
to. be. found, as far as is now
Schroeder estimated the capital connection, that no finding costs
known, could appreciably alter
requirements for an oil shale in¬ are required for shale oil. Pres¬
domestic crude prices in view of
dustry to be approximately $7,500 ent-day finding costs for new
the aforementioned level of fu—daily barrels, or essentially petroleum are now estimated at
This fact is
to
$2.30/barrel
of tur'e U. S. demand.
equivalent to present capital re¬ $1.65/barrel
quite independent of any pros¬
quirements for new petroleum, if new reserves. This is exclusive
of
the cost of producing such pects of a- future shale industry.
we include, as we must, the cost
Of
finding this new petroleum petroleum when found. On the Thus, a new domestic bit area is
particular threat to a
other hand, the loctation and ex¬ also no
(exploration ^(fost). There is, of
shale industry's ■ growth.
(Inci¬
course,
little pr no exploration: tent of the 1,500 billion barrels of
oil shale deposits in western Col- dentally, -the rate of discovery of
cost for shale dil.
:
prado, Utah ; and Wyoming are major new petroleum fields has
I mention these capital costs
declined from ari average of four
known.
' \'Y
since the enormous new capital
In the light of rising drilling per year irithe* prewar years, to
These data
demand are
for the
*An address by Dr. Prien before the
,2nd Energy Resources Conference, Den¬
ver, Colo., Oct. 15, 1958.
Data in this
paper
are* taken
from "Future Growth
of, the 'World Petroleum- Industry", Chase
Manhattan Bank, N. Y., 1957; "Future
Productive" Capacity and. Probable Re¬
serves of the U. S. , OH & Gas Journal,
Feb. 24, 1958; "Estimated Capital Ex¬
penditures Free World Petroleum Indus¬
oil
processes under
their; respective investigation can
be laid down on the West Coast,
world
re¬
placed cheap Texas crude as the
deterrent to development of ah oil
shale industry in the United States.
I shall attempt to answer this lat¬
ter question as the discussion pro¬
Research
produced by the
t
Conclusion One: Nuclear energy,
has been said before, and partic¬
layed the
Denver
have recently stated that shale
'some,;3.3
commercially mineable today and level of approxim ately 40 %. Nu¬
yielding .an average of>55 gallons clear energy, while; definitely a
of oil per ton—we have over 200 long-term
competitor, is not ex¬
billion- barrels at oil available. pected to advance with a sufficient
Such a 200-biliion-barrel-oil re¬ technical rapidity to absorb more
serve,
incidentally, is approxi¬ than 10% of the energy market by
l it is
recognized that other sources
mately the size of the total Middle 1980.
(e.g^ Oil & Gas Journal) place -1965
"East petroleum reserves that are
Even this advance is not visual¬ demand at closer to 12 million bar¬
of such great political concern to
ized as influencing significantly rels/day. The conclusions to be drawn,
us today.
however, will still be valid.
petroleum's role particularly in
It is my purpose in this paper the field of
transportation, which
to sho\y; that the day for utiliza¬ is the
major market for petroleum
tion of our vast U. S. oil shale re¬ products:
*
serves
Company
the
.
In its July 1958
restricting our thinking to
Mahogany Ledge strata the energy market would probably
rich
"
Oil
to be obvious.
.
and
Commercially Mineable Today
"
the
to be the
1,500 billion barrels, which
over
"is well
<\'
believe this
are
production costs;
'
upon a
new
a
total
which time its total consumption
will be in the order of ait-astound¬
new
classic
a
meet
Adequate
when
history
launch
re¬
OIL
SHALE—will
mand.
and
The
,
natural
occurs
the Free
to
now
shale oil pro¬
equal to crude
Both" the; Union
of California, and
duction costs
.
economy.
e x p e c
be
any
pear
in¬
,
greatest
will double in
.
of
dustry is dependent
exports
ments
the Middle East.
the
vided that present
ob¬
,
in¬
favor¬
energy sources still able combination of political, eco¬
untapped in this country. Accord¬ nomic, and technical factors, all
ing to a recent
of which, acting together, catalyze
report of t h e
its birth and stimulate growth in
National Plan¬
its early years. Any of these three
ning ASsociafactors, if disadvantageous, can ef¬
t i o n, United
fectively delay an industry's be¬
States energy
ginning, or hamper its expansion
requirements
to
a self-sufficient size.
When a
western United
,
deposits
an
7.4 million
incidentally,
competitive with posted crude petroleum, prices at
The
as
World,; .cannot be considered an import¬
ant factor in deciding;; between
million barrels per day. "
" .shale Oil and crude petroleum.
For. these capital outlays are re¬
Conclusion Two: The U S; must
oil is to
add over 5 million barrels/day of quired whether shale
new
oil to its presents require-. substitute for a portion of the
East
from America's huge
untapped oil shale
'
will
mentioned
Conclusion Three: If a competi¬
barrels/day in
this same period. Most of this in¬ tive shale industry can be created
creased foreign demand is occur¬ with a capital requirement per *
ring in Europe, which at present daily barrel
of production
no
receives about 80% of its oil from greater than that for petroleum,
the. Middle East. Present Middle these new capital outlays, per se7
crease
By DR. CHARLES H. PRIEN*
cost of
the. Uv S.
often
stacle to its growth. The conclu¬
sion from the above would ap¬
It is
mand
Recognized authority deems commercial
; are;
13
1957
port
Chase
on
Manhattan
Bank
re¬
Future Growth of the Pe¬
troleum
Industry.
TABLE
Alkow &
I
Co., Inc.
'
Petroleum
Demand
in
the, Free World
195(>
••Area—
United
Millions
States
Free
World
-
14.3
_6.8
Free Foreign
Total
1966 *.
Bbl./Day
8.7
14.2
15.5
28.5
Note that 5.6 million barrels per
J. A.-Winston & Co., Inc.
J
•V
,,
,
,
Netherlands Securities Company, Inc.
^
Bruno-Lenchner, Inc.
Vennilye Bros;
i.
38
U
The Commercial and Financial Chronicle
(2314)
the
bank
News About Banks
to
of
record
NEW
BRANCHES
NEW
OFFICERS, ETC.
Bankers
and
REVISED
held
the
at
price
The
snare.
CAPITALIZATIONS.
evidence
rights
of
Directors
Chase
The
Man¬
ts
Trust
Clinton
approved
have
York,
New
merger
a
would
to aid future develop*-
act
ment of lower West Side Manhat¬
where Chase Man*-
tan in an area
hattan at
present has no branches
Silver
tion.
>
1
.
*
-
-■/'
•
call for
Terms of the merger
an
•exchange of 55/100 of a share of
Chase Manhattan stock for each
share of Clinton Trust stock, to
effected
be
Ohio, was
its
on
and
Trust
Clinton
of
shares
13,090,000 shares of Chase Man¬
hattan outstanding. •
Stockholders
of both institu¬
tions and New York State and
banking authorities must
'Federal
1
opened
Midland
„
currently operat¬
Trust Company,
addition
The
-
would
total
of
•York
offices
Manhattan a
deposits
had
New
Chase
30,
Sept.
On
•Manhattan
in
locations
103
City.
Clinton
four
of
$6,*-
*874,000,000, capital funds of $625,**
-000,000 and total assets of $7,836,-
,000,000..
*
•
this column
,<
;
appeared
in
Nov. 20, page 2106.
article
Previous
on
i
t'f
:;t
-
its
In
extension
an
the
In
of Manufacturers Trust Co., N. Y.,
at
it
announced
was
C. r
board
*
*
The promotion
the
\
'
,
"
•
election of four staff members
officers
junior
Midland
The
with
been
Feodor
were
by
Vice-President
Assistant
from
S.
.
Vice-President
Advanced: to
.•
as
New
announced
George C. Textor, President.
has
■York,
[
Marine
Company of
Trust
Cekich
D.
and
Roy
Greer.
Elected
Comptroller
sistant Vice-President
from
of
space
one.
'
contrast
In
As¬
the
while
services
bank's
its
at
John
old
North
of
Andrew- A..
Formal
Mount
jincluded fonper. Assistant Treas¬
urers
Harry1 W. Baechtold, A.
Hunter Bowman,
Charles F. Hickox, and former Assistant Secicetary Vincent B. Hubbell.
Company
since
!
laub
named
Assistant
(Treasurers went to John S. Boert-
was
*
J.
Hillside
Grosso
elected
was
Secretary in
Department.
the
if
'
Bankers
York,
Branch.
Trust
&
Trust
opened
Assistant
Personal
«s
Louis
its
Company, New
ninth Queens
Central
ester,
of
the
the
1936
when
Trust
office
its
Of
the
*
Company last
in Queens, in
Van
l*egan operation.
Wyck
The
new
Office
office
Board
$190).
Roch¬
-N
G.
-
«
by
its
'\
of
of
of
the
bank
authorized shares of capital stock
of the bank, to 2,256,714, of $5
value
each.
The
additional
a
comr
dry
of
evil.
for
up
all
borrowers
essential
mental
.
non-Federal
services.
municipal
sance, or
Who
the
Bank
of
There Is
and
a
Montreal,
elected
was
Vice-President
the bank
on
to
serve
ager.
The election
Dec.
1.
He will
General
as
was
a
of
con¬
Man¬
announced
credit
would buy
them
government" any
a
beneficiaries.
requiring individual han¬
dling should offer no insuperable
difficulty.
!
! a
!,
in-
era
dollar
to
amount
from
the:
purchasing power • of sub¬
stantially
all long-term
dollai"
would
be
allowed
a
an.
the .whole
as
it
sounds
at
Nor is it unreasonable.
Federal
Government
has
a
monopoly on the issuance of dol¬
lars
.—
and
;
dollars
are
the
sole
sufficiently
economy
the
and
of
justice
dollar
assets
-
tbJe
to
suf¬
ficiently compelling
to requite
this government guarantee.
*
rise
undertaking
The
savings
dollar.
the
apparent,
pre¬
.
?
seek
may
holders
mium in
future
the va?t
equally shade by all. The need is
sufficiently great, the benefits ip
ac¬
counts, life insurance, pensions or
bonds. This would me,an that on
all
long-term do 1 la r; holdings
savers
by
accumulated
of
safety in flight
Any residugl
creeping inflation would be kept
in manageable bounds, and
that
economy..
savings
threatened
inflation
protect the
Without
assets
holdings, whether in
.
Only by some such method can
the country escape the runaway
Long-
Holdings
way
the
All
and
premiums
the
to
Holders
Let . the
1 Government guarantee
first blush.
Canada,
the
from
anti-inflationary
,
Guarantee
Would
the like,
facilitate
processing/1 Qn' - their long-term
obligations, they would re¬
ceive
Govern¬
school bonds, for
private mortgages?
Most savings
programs.
dollar
discourage private
building, business expansion, and
J ; This is not nearly'.as-formidable
.
;
cept at prohibitive interest rates.
•
channeled through banks, in¬
surance/ companies and
whose; ! records!;; would
We would
j
;
ernment
are
other
than the Federal Government, ex-.
:•
mechanics? No
formidable than other gov¬
more
would
-Funds
Hart, General Man¬
^
What about the
of government
step in the right direc¬
new
a
■*
purchases.
own
power
dollars equivalent to any
in the cost of living.
Government cost of living indices
c<Mild be .the yardstick.
f
director
,
.
Prompt action now can
catastrophe.
Government
antee
necessary
ago.
years
ment
guar¬
purchasing
today as
of bank .deposits wa£
against loss/of
power is as
the guarante
25
avoid
Had
the govern¬
acted
instead of
promptly in 1929-20
wating until 1933, much
of the tragedy, of the Depression
tender.
Everyone -in the
country is required.-- ta* use the might have been averted. HoltfU. S. dollar as the basis'!of all ers of dollar
savings are grum¬
legal
,
the
authorize
on
banks
on
haps keeping down the cost of its
t
tion—but by itself it would bring
Fed
stock,, effective
tinue
Directors
bonds is
fear
Once
\
runs
flation guarantee, the entire cost
might be offset by direct govern¬
ment savings — by keeping down
interest rates on its debt, and per¬
stampede to buy
/
d,
stopped, and sq did practically ail
bank failures.' With an anti-in¬
The< suggestion to guarantee the
''
dividend
stock
a
new
Arnold
ager
»
322,388 addi¬
tional shares of capital stock, thus
increasing the total number of
par
;,
National ! Bank,
(Number of shares out¬
Montreal,
par
stockholders
to
<1
■
a
nothing.
remove
guar¬
government
the
cost
have
Probably
deposit
Bank
little.;
practically
was
the
over
Billions and billions
public in
upsetting
standing—3,000 shares, par value
following the bank's 141st annual
Manufacturer? and Traders Trust
Company,
Buffalo,
New
York,
voted
an
Y»
•
Boulevard in the Rego Park sec¬
tion of the Queens borough.
ppened
N„
disastrous
when savers,
fear grows into panic.
*
stock 1 from; $200,Q00
sale, of
19,
j
$250,000 to $300,000 by
value.
lOuffy, is located at 97-03 Queens
Bankers
Company
received
'
Following the recommendation
The
new
branch, headed by
Manager Adolph J. Fortunato and
Assistant
Manager
Robert
W.
r
Trust
'
value of $20
each, to $2,822,400 consisting of
141,120 shares of the same par
(office Nov. 29.
;
from
the
purchasing
What about the cost?
very
antees
a
alarmed
more
1786,' holders, of
:'
N.-M. increased
$250,000
and
approval
to increase the capital stock from
$2,352,000
consisting
of. 117,600
shares
Oct. 30, page
on
capital
Nov.
•
me
and
to the
appeared j in
'
■
on
Terra
Clovis
Clovis,
President last December.
«
inflation,
the dollar,
elsewhere.
it
:
*
articles
•
The
mon
consumers re¬
of their accumulated sav¬
power
■■"•>'/'/,
.
purchasing
increase, in the capital and
.The
1942, Mr.. Rind¬
Regional Vice-
tf
run
more
;
an
to
'
Manager
.
:
v
runaway;
National
Currency, Washing¬
C., Tuesday,- made effec¬
White
An, officer of The County Trust
tein, Exchanges & Transit; Robert
Cording, Jamaica Mortgage De¬
partment; and Francis M. Lenhart,
-of
With
the future
of
assured
The danger we face is a possible
as
and Nov. 20, page 2106.
27, 1958.
■
Company,
Trust
v
President.
Plains, N. Y., completed 30 years
of service with the bank on Nov.
office
Vernon
County
assets,; in sayings accounts, life
insurance, bonds and pensions, are
victims of .the dollar's shrinking
were
tive
the
of
buying would be avoided. Inflg"
at a slow creep
tion would be kept
if not halted.
of dollars of savings are available
Bank
D.
Previous
charge
and higher living stand¬
ards,, the people who depend for
their future security pn dollar
;faith,
5.
approval by the Comp¬
this column
in
.
resources
surplus of the Republic National
Bank of Dallas, Texas, to $100,-
Rindlaub, Regional
Vice-President
y
be
ton,
con¬
trative Vice-President,
j New Assistant Vice-Presidents
as
will
000,900, it was announced' jointly
Marine
Midland,
which/ has ■Tuesday by Karl Hoblitzelle,
maintained a branch on the Wil¬ Chairman of
the Board, Fred F.
liam and John corner for the past
Florence,
Chairman,
Executive
38 years, is continuing its banking
office in the new structure and Committee, and James W. Aston,
!B, Decker, succeeding P. A. DeJaney, who continues as Adminis¬
would
lending funds more plentiful, in¬
terest
rates lower, and
panicky
;money
of
troller of the
approxi¬
earners
(workers, farmers, businessmen)
enjoying the jingle of more
;
•
by
While current
inequality.
- be
the probable
guarantee? Savings
become
more
attractive,
would
effects of this
are
Bank.
totaled $564,990,935.
•
a
enlarging its space
mately two-thirds.
-
shares Of
Central
•
Street
The. real .evil of inflation is its
As of the same daie.
#
New official status
•
share
total
American
:
process was
Robert
was
t
.
..
.
Bank
much more involved
instituted for Marine
Midland Trust Company. V
quarters,
.
number of
like
a
Sept. 30,
resources
Savings office which was erected
tinued
for
$21,236,449.
River
East
the
to
Traces Effects of Guarantee
What
tiie
of
As
relatively simple
a
-
-
American
shares.
of
words, ^ while everyone
decries
inflation, most people want the
things that cause" it.
very
i?
And
apply to as¬
way
generally, such as common
stocks, real estate or tangible per¬
sonal property.
:
/
Barfk ..shares shrinking value of their holdings,
will be panicked into buying any¬
total
outstanding
after the merger.to 1,085,- thing at. any, price. We have seen
stock
000
Street, the transition
was
y
would in no
sets
National
Central
>
"
'
of seven officers
posts
and
the
official
new
of
of directors.
a
to
Horace
Chairman
Flanigan,
;bank's
by
John
/
each
for
North
exchanged
ings, where the new and substan¬
tially larger 110 William Street
office replaces the one formerly
maintained one block to the west
55
stock
of
bringing
George H. Gribbin has been ap¬
pointed a member of the Advisory
Board of the Fifth Avenue Office
*
•
The 60,000 outstanding
North .American Bank
East River Sav¬
of
case
ings such as one or two years.
it
are
-
of
capital
*
*
only on long-term dollar holdings.
It need not cover short-term hold¬
ings, they could safely increase
purchasing power. ■ Any promises their present spending on goo4s
to stop inflation are probably as
an
they want. And with borrowing
They
shareholders of North Jdle now- as in the past.
plentiful at low rates, business
only mislead the unsophisticated, and building could expand.
Bank
receiving
one
land even they are rapidly, losing
Central National Bank
for
stock
planning method, the East River
Savings space was completed in
advance of the
normal building
schedule.
purchasing; power of the dollars
themselves, when and if paid. And
sufferers
supposed
inflation
from
exising guaran¬
only guarantee the
beyond
debtors,
tees. It would
to merge pro¬
exchange of stock,
the
share
this
of
Subject to this
»
.
American
main¬
its complete services while
new
quarters
were
being
erected.
•;
agreement
vides
with
Marine
Midland Trust Company to
tain
action
presented
approval at the regular annual
The
the
allowed
that
;
joint
approval, it is contemplated that
the merger will be effective Feb.
28, 1959..
; ;
J
develop the banking areas, a
multiple stage project design was
devised
;
Slichter
H.
Sumner
North Jsays that- the
of
.
banks in January.
To
the
of
Company's
give Chase
Trust
Prof.
other,
John
meetings of shareholders of both
it expanding requirements.
before
effective.
become
can
<■,
issue, you pub¬
interesting articles on
In: one, Mr. John E.
two
inflation.
The' proposal will be
for
its William Street office in
the
on
a
temporary
building
checkerboard
basis,
have
em¬
ployed different approaches to
their common problem of meeting
ing
.
proposal
the
approve
/
,
In your Nov. 20
lished
announcement
by the di¬
rectors was subject to the
ap¬
proval of the shareholders of both
banks and the Comptroller of the
Currency. : ; V
: .
Street office
Marine
and
banks.
President
that the
stated
area.
William
110
Dec.
Chronicle:
:
Bank,
the
making
at 110 William Street in the
new
government ? guarantees : of pay¬
ment, or of the solvency of
Editor, Commercial and Financial
;
voting in the
and Loring. L.
Gelbach, Chairman and President ."spenders" who presumably will
of
Central' National
Bank,
in speed up the inflation. In other
American
the
as necessary as
f
a
*
of both
Seliskar,
A:.
-
Cleveland, -Cleveland, •Rovehsky speaks of "the terrify¬
approved by the Boards ing problem of inflation." In the
of Directors
down—if not halt—inflation.
for itself and claims it is
-
merge The North
Company, Cieve-
Bank
of
Bank
office tower under
East River Savings Bank
**
proposal to
Sees it paying
capital
surplus of $250,
a
his proposal wauld attract savings;
reduce financing rates, and slow
Jand, Ohio, with Central National
the
in
tenants
are
downtown financial
7 7,0 0 0
additional
years,
31-story
way
Chase Manhattan
by
an
shares.
000
many
new
Mr. Boksenbom explains
the
oil
■■;*■/r"
.
American
Both
<
A
.
banking
At present there are 140,r
issuing
"
*
institutions, retaining
their business identity in the com>munity
they
have
served -for
Bank.
The bank has
Two
banks, utilizing distinctive
design
and
construction
tech¬
niques to
achieve solutions to
theirexpansion
problems,
are
occupying neighboring street
floor space in a single building—
a
rare tenant grouping for Man¬
■
Maiyland,
office
the
$500,000 and
ooo.
,
hattan office, structures.
:
from
is Cashier.
of
:
•
...
•/' *
of the Currency w
open a new bank. H. F. Taylor is
President and Kilbert A. Corley
r;
i
*
*
of
Bank
;•
•
•
beyond John E. Royensky's proposal for
goes
the purchasing power of. Government bonds
(Chronicle, November 20, p. 18) in suggesting our Govern¬
ment guarantee most long-term dollar holding $ut not such
'assets as equities, real estate or tangible personal property*;
guaranteeing
Comptroller
Manhattan's
on
by
bringing more directly to its
the
large
capital re¬
sources
of The Chase Manhattan
-f
Correspondent
on
Spring, Md., received per¬
mission
Third
Avenue and 67th Street intersec¬
•December
support
•
National
hattan; 10 in the Bronx and eight
in ' Brooklyn
besides
nine
in
Queens. The 46ih office of Bank¬
ers Trust
Company will open in
•proposal that would join the four
banking offices of Clinton Trust
■Company, all located in Manhat¬
tan, to Chase Manhattan's metro»politan branch system. *
' "
*
j
George Champion, President of
Chase Manhattan, and Theodore
R. Schwarz, Clinton Trust Preshdent, in a joint statement on Nov.
28 said:. "In general, the merger
to
so
expire
:v.' w
.;
,
-t
'
Company has 18 locations in Man¬
Company,
shares
of
will
and
in New York. Bankers Trust
pany
"
a
of
one
e
'
17.
Dec.
Com¬
Trust
Bankers
4scn
me
••
York, and the
New
close
$24 ,;per
providing
subscription
mailed to the
t h
being
are
-r
warrants
of
stockholders
ila.,.,....
the
at
share for each six
new
THE EDITOR:
1958
Thursday, December 4,
.
stockholders, of ; the
business Dec. 2 at the rate of
CONSOLIDATION S
TO
LETTER
322,388 shares of capital stock of
$5 par value each are being of¬
fered
.
.
meeting of shareholders.
-
Mr. Hart has been General Man¬
ager
He
of the bank since Jan. 1, 1957.
began his
years
served
ago
in
in
banking
Canada
United States.
career
Toronto
and
contracts.
That
goes
for
28
banks
bling ominously about loss of pur¬
depositors, insurance
companies and their policy hold¬ chasing power. The time to allay
their fear is now, before it cul¬
ers, and even states and munici¬
palities and their bond holders. So minates in panic. - \
and
their
It
only right that the
is
and
has
ment
in
the
dollars in-which
govern¬
guarantee the quality of the
we
all* must deal.
This proposal would not extend
SAMUEL
BOKSENBOM
.
J.0 West 74th Street,
New York 23
Nov. 24,
1958
4
Volume
188
Number
5800
.
.
The Commercial and Financial Chronicle
.
15
(2315)
gold mining shares and also
objects made of gold are now re¬
garded once more as a hedge
against inflation. 1
j {
reason
Our
Reporter
Hedging Against Inflation
Governments
on
•
By PAUL EINZIG
British
By JOHN T. CHIPPENDALE, JR.
refunding operation fairly
well digested, is
following the same-old pattern, which has been
pretty much in vogue for. quite some time
now, namely as the
stock
market
increased
.
continues
~
its
up ward, movement
the
pressure-,, is
«
on
recovery in quotations of Govermnent issues.
°f Government
"
because, the
-
This upturn, in
prices
lived,
display.strength
the opinidh/of most
securities, however, turned out
stock market put. .on a
common
non-inflation
be short
to
British
conscious
about inflation's
which made up most of its losses;'!* is still
money market specialists that a
booming :stock market is not going
to have a bullish effect on
the market for .Governments or other
fixed income bearing issues.
1
•
i:\
Other Hedges
of hedges generally
variety
>
Many wealthy people have long
discovered objects of
etc.
Refers, for example, to what HMghi happen to stocks in the
event of a labor government's political victory.
Dr. Einzig
describes the problems the Government, banks and insurance
companies wxU have in attracting savings should the presently
income bearing obligations. The
Sharp decline which
f took place in prices of equities last week
brought with it a modest
■
summarizes
resorted to for protection against price inflation and explains
their applicability and inapplicability in the case of his country.
The Government
market, with the
,
economist
art, antiques,
hedge against inflation.
popularity
of
this
hedge
as
The
a
those who can afford to
dispense with yield over a long
period of years must have in¬
creased considerably, judging by
among
people change their views
inevitability.
the steep rise in prices for
French
post-Impressionist paintings, aiv
tique books, antique furniture and
various collectors' pieces. A stagte
may well have been reached, how¬
ever, at which these prices have
>
LONDON, Eng.—Day after day United Kingdom, throughout its
and more people are reach- long history, has so far escaped
ing the conclusion that taking the runaway inflation such as less for^ -.'/x'}
long" yiewf;creeping inflation has tunate countries have experienced, discounted
inflation
for - many
'J'. A'.'
.-•-A;
^ : Refunding Attrition Small? L
' V^
come to stay.
The general public is not really "years ahead. It may well be open
If there is dis- interested, therefore, in hedging
to question whether a post-Im■:
The. Treasuryr-in, its irecent $12'- billion, j:efunding.;6pemtioh
was
able to get the holders ,of the"
; ' agreement * against inflation. It is only the pressionist painting, h o w e v er
maturing issLies to turhVim "
'•'
amongst them wealthier
investors
who
have beautiful, is really worth £150,00©
nearly $11.7* billion, so that the cash payout amounted to
only.
'.
it only com- been doing so on an appreciable
$414,000,000... The attrition aggregated only about 3% of the
-and;more, and a Louis XV table
total,
involved ; in the operation. This is
cerns
their jscale.
'
;is really worth £36,000. In this
considered • to
'
€
•
•
more
_
.
•
be
venture
On
as
the
maturities
turn
did
in
so
out
far
the Government is
as
other
were
their
a
(favorable
.
reviews of the
concerned."?>&.i
hand. tlie fact that -the bulk
of
the
probable pace
December
tof
•>
owned by the Federal Reserve
Banks, who usually-'
look
too
maturing issues
when
the non-Federal" ownership' of
taken into
meagre,
are
the
gress
holdings for the refunding obligations 100%, and:
in this case also, does not make the
$414,000,006 cash- pay- '>•
*
most
rtic
consideration.^
-
Qwitrhinp.
-respect
intf>
the
is
fas!**
and
come
of hedging have to discover line*
;.against inflation. It is, however,
f^r frnm fonlnmof esbeeiallv in lonable,
optimis-
Britain
the'next
Socialist
that
so
in
.addition
t©
Government is certain to national-
ex-
%
pects prices at
^fJnupnpfffinw th^^hmicf
S
benefit by the cha
n
ize
shade of
opinion
fashions
-ions g0- Those skilful in the ark
pro^
of infla-
tion. Even the
the\
It is evident that the public
holdings in the area of $4 billion
were the ones that were turned in
for *cartv?o that the. attrition •
in the just completed
refunding was much in excess of the 3%.
figure, as far as the non-Central Banks holdings were:concerned. •
Discusses Hedges
fasbion.
i
a
where
e
number of industries.
Only
immune from this
Needless to say, the rank ana
danger, and investment in small -fJle of the public, even if pna
Dr. Paul Eiuclff
"firms cannot be regarded as suf- when it realizes the need for
tion.
As for
ficiently safe. Almost any large'hedging, would not be able to .re4;;
It had been indicated that many coiporations" would heed V the pessimists, they anticipate an
which would attract capital .sort to such a kind of hedging^
cash for year-end purposes
acceleration of the pace as and
and, with the money market .still
seeking safety against inflation is Their demand would be directed
the tight side, so that the
deposit banks could not take up the, .♦.Vfhen.the inevitability of a further
-exposed to nationalization.
And towards ordinary goods in com—
slack, it was not top surprising that some of. them turned in their; .rise in ■ prices comes ,to'-be .more
even
though it is possible that mon
use. . Once
that stage is
„
r
.
,,
.
,
small firms
least to double
in a
genera¬
.......
,,
are.
,
.
.
-
maturing issues for-cash.:
*~
-
""**'
-J.-*-••••■
Central Banks Extended
-
The Federal Reserve
System, in
.widely realized. XJp to now those
who take a pessimistic view of
<
■.
;
..
-
.
characterized'
change in the Board's;
policy (Bills only), turned in part of its maturing,
holdings for
the new notes, the 3due
May .15, 1961. It was pointed out4
that the $7.8 billion which the
Central, Banks owned in the old'
certificates was one of the largest positions
they had in Govern-J
ment obligations, outside of
Treasury bills, p
*
>
!»
loans
%.-■
Accordingly, by making this .move into the 2-year-51//2-months
note, the Central Banks were able to take a smaller < position in
•the
:
11 y2 month
new
too large
Reserve
•
certificate, and at the
position in the
Banks
notes that
come
will
new
still
be
due in 1961.
3%%
the
*r
not,
a
However, the Federal
principal
*
time take
same
note.
ce.
of
owners
.
f.
the
3s/8%
j
.
:
a.
;
still
represent
would
have^ depreciated tp
com-
pOTver^l tlfeir
a
.
„u
...
•
„
,
•
It
^a-
was
■
X
by taking
a
position in the
sufficient size to make
t.v .A.,
j
,
,
.
lengthy article
.
issue
on open
the
of
Federal
Reserve
Bulletin, in
a;,
market operations by Winfield W. Reiffler,'
by. this
policy.
;
decades
British
one
insurance
has devised a superanwhich is based on
/'
'
•
'•
I
.*./*
•
;
■
.
.*«
>
regard. it *
rely
Th
;of
^
,
.
j^rest
n
in
hedging
,
cold
t
,'
mining shares
Until
nurnoses
cently it was
ihat "a pound is
gold
American
v>oq
>
the
Anmn
price
fr>
of
stev
NASHVILLE,
Tenn,_ J
the
financing of
a
•
4 Problem of
-
For
the
or
which
a
-assumes
cline
pound."
'
Attracting Savings
same
reason
the
an
££ood
in
the
American
gold
w
Callaghan> Charles U.
Grannon, James D. Robertson, L.
Jay Tencnbaum, and Harold S.
Wass.
re¬
and the victory of the Dem¬
Congressional
elections, however, the possibility
of a higher gold price has come
idea
that
the
banks
in
.
With Powell, Johnson
will
come
;
(Special to The Financial Chronicle)
-
PASADENA, Calif, t-Bob Bounow with Powell, John-
dakian is
"e widely, envisaged. For this son & Powell, Inc., Security Bldg
-
The
Comptroller of the State of New York
will sell at his office at Albany, New
December 10t 1956, at 12
to
York
o'clock Noon
(Eastern Standard Time)
this
inflation
crease.-
f
should
$51,000,000
be
such a pressure will in¬
In Order to attract savings
SERIAL BONDS OF THE STATE OF NEW YORK
Government, the banks and •
companies will haveto
offer
safeguards against the
-erosion of savings.
maturing
this
point
of
view
the
Housing Project
for
Republic
the
of
Exchange,
may
.
$21,000,000 January 15, 1960-1974
$30,000,000 HIGHWAY CONSTRUCTION BONDS
:
well be regarded
*
maturing $1,500,000 annually January 15, 1960-1979, inclusive
$21,000,000 MENTAL HEALTH CONSTRUCTION BONDS
maturing $1,400,000 annually January 15, 1960-1974, inclusive
switching
into equities.
In the
prolonged absence of setbacks in
Cuba
In Association With The Latin American
Principal and semi-annual interest July 15 and January 15
business profits and equity quota¬
payable at the Chase Manhattan Bank, New York City.
tions,
Development Corp.,
the
switching-over might
by. now such di- 4
pmensions. as to raise the cost of assumed
Government borrowing to a ruin¬
follows:
..
as a
blessing in disguise. It tem¬
porarily arrested, or at any rate
slowed
down,
the
process
of
have
December 2, 1953
as
$50,000,000 January 15, 1960-1979
business recession in 1958 and the
recent ups and downs on the Stock
Public
ous
70 Pine
Street, N. Y. C.
C.
On Jan. 1, Goldman, Sachs &
Co., 20 Broad Street, New York
^ity> ™embers of the New York
"Stock Exchange, will admit tb
partnership Artllur G. Altchul,
ocrats at the recent
/
follow the Finnish example of ac¬
cepting ' deposits with a cost of
living clause, has been firmly re¬
jected there appears to be no note¬
worthy pressure to induce the
Treasury, the banks and the in¬
surance companies to change their
From
$10 MILLION
.
Goldman, Sachs Co,
the
concluded
4
John
$35
for
Z refult^f the^bSess^ rl^s^ a in the United busme the de
: the States, ^ reces
sion "suh
con-
the insurance
has
*
■,
To Admit New Partners
serve,
:
uous
:
re-
that
assumed
.realized
Co.
revival
l°r neagmg purposes, until re
assumed that
respect. * As and
when the inevitability of contin¬
&
an
fiation in the long run
the traditional
on
attitude
attitude
Truman, Wasserman
as
a
tinue, to
British
All the rest
cannot
absolutely safe hedge against in"
is
popular., So
loan8^with°guarSteedS purchasing >
Assistant to the Chairman of the Federal Reserve
Board, indicates
:
that the "Bills Only" policy will continue for a long time to come,
-"since the results thus far obtained,
according.to the study,, indi'** eate a minimum of
disruption to the financial markets
i
only
the investment.
:
r
1*
,
of
other fixed
securities,
power
November
.
acquisition
refunding* botes, gave this issue * equities and offers therefore a
.4Vv«
^
it readily transferablemr tradable.'
A •:*•*») s«3g3inst "the erosion of
Spokesman Upholds "Bills Only" Policy
;The
.
_
new
belief that these notes will eventually belief out and the proceeds *
reinvested in Treasury bills.
'
; ™
<„.j. ,
•
.
the
nuation policy
no intention of
selling .'
market, but. will likely hold *
them to maturity and again exchange thera
for, pew Government"
securities, there are some money market-specialist "who hold the •
.•
.
_
m
bearing
company
open
?
a
or
-far
Reserve Board that the Central Banks have
the new refunding notes in the
;
j
saving
bound to become less
tho-^ederal Reserve System,
In spite of the statement by the spokesman for the Federal
a
.
.
a
Government Loans
,
It is likewise evident that
-'M,
^^ar^conceJtmd^it^itonly V-WlH AdfllH PirflKr
reasonable yield.
of
mterest
,
market.
•
piers.
Landlords are a favorite Bradford & Co., 418 Union Street,
target of Socialists and are likely members of the New York Stock
really pessi¬ to have a lean time under the next
Exchange, on Jan. 1 will admit
mistic view on the prospects is
Labor Government. Although the James C.
Bradford, Jr. to partneralso indicated
by the fact that nationalization of
agricultural land ship. V
.there is a continued expansion of
js 110f af present in the program of
,life assurance. Once the inevita¬ the Labor
Party, sooner or later
bility of non-stop inflation comes
it is expected to be included so
to be realized this form of,
saving,
investors thinking in terms of
giving them
The, absence
:as
officially conceded that the new refunding note, which '*
was taken on by the Central Banks,
% "a lohger maturity, than"
1, these institutions had been using, but the^belief among the powers"
that be is that this will give the
System not. only a better distributiori of its holdings, but also better," cdritrol .ovei' the
money ■*
-
J IJ RfJI(|{r|f|| fif|
D" Wb DM QUIUl 11 UUi
^
•
,
Possibility
a
,
^
The acquis:Ltinnof^re^property
'
.
Resale of Notes
the creeping stage and would profaster and faster.
savtogs
to
;
_p0ssibly at the wrong moment.
yield between 8 and 10%,
to compensate holders for
a
so.as
con-
fronted with the difficult problem -ceed
0f finding alternative investment *
level at which they would
a
paid fair 'reached inflation would soon pass
be
compensation, they would be
a
Otherwise, Government
woiild
mand
.
-r
prospects
minority.
a move that was
unusual but which is
supposed to be no
as
shareholders
•
.the
Holdings
leveL
Descriptive circular will be mailed upon application to
ARTHUR LEVITT, State
,
The British
people
inflation-conscious,
are
not very
because
the
Dated: December 3,
1958
Comptroller, Albany 1, N. Y.
The Commercial and Financial Chronicle
16
.
.
Thursday, December 4, 1958
.
(2316)
help the company broaden
operations. After a slow
start the company has been
to
its
THE MARKET... AND YOU
developing
chemicals
By WALLACE STREETE
uphill showed its earnings holding
week, filling in the up well and headed even
breakaway gap left by last higher next year. The 'com¬
week's hard selloff, and then pany in the past has benefited
issues
wavered without showing any when atomic energy
serious intent at the moment were the fad, its output of
Stocks worked back
of trying to scale the record heavy steam generating
equipment for utilities being
peak posted last month.
;
i t s
participation in this
It left industrials, particu¬ sphere. While utility ordering
of heavy equipment has been
larly, in something of a trad¬
somewhat laggard, Combus¬
ing range between the 567
tion held its backlog virtually
high and the 540 low, the two
level and benefited profitwise
extremes reached over a total
both from holding costs down
span of only six trading ses¬
and the decline in capital out¬
sions. And before confidence
would be restored on any lays. To some sources, its im¬
broad scale either, or both, proving per share earnings
were
taken as making it a
of these levels seemed des¬
tined
for
a
more
thorough
for
a
better
end
its
considered
still
is
tentialities have
There
give much ground even under
selling
pressure.
American
Telephone, where hopes for a
stock split or an improvement
its
about
The
month. It seemed to
a
dividend
long-steady
#
The
Jjf
brighter
off the
new
*
•
.
the
month—and De¬
dividend
items carved out their
gains.
beeh
seen
in
more
century.
$
if
a
The
rather
if
abrupt depar¬
of its top executive
chilled interest in Mack
Trucks
a
bit but it is still
a
company
that appears des¬
tined for progress and offers
a
yield of above
such
a
5%
when
return is hard to find
grave
a
definite turn and
production cur¬
other factors
including new points to lower per-share rently is improving operating
products and mergers, as with earnings next year even if its results. In addition, some new
models have been introduced
Siegler where the company business holds steady.
knowledge
specific
reasons
to
ahead
of
for the stock
\
if
are,
in
Chemicals Sluggish
to
you are
if
have
no
both
medium
Roger W.
Babson
emergencies, equal to your annual
if
not build¬
you are
and
heavy
column by
last week's
forecasting that
we
will find the
inflation
for
cure
than the Republican
This week let
of taxation.
to
law
a
billion.
$288
at
This
is
an
$6,000 per
I suspect that by the early
debt
average
family.
1960's
nearly $260 billion since
figure now pegged by
of
some
Federal debt limit may
our
well be lifted to $300
billion.
A first important reason for the
climbing Federal debt is that our
government is fighting an
ex¬
tremely active cold war. America's
concern
what goes on in the
increases the
over
of
rest
the
world
national debt.
weapons
the
and
of
Stepped-up nuclear
research and production,
expensive probing
space, also add to the
very
outer
national
dumps
debt.
raw
And
world
onto
if
Russia
markets
still
materials produced
by
slave
labor, the U. S. Government
undoubtedly have to under¬
take financial operations to help
protect American agriculture and
industry. As the debt limit goes
up and government activity ex¬
pands, you can be sure costs will
go up and nobody's dollars will
go even as far as they go today.
will
A
second
inflation
tude
of
ment
We
is
important
the
both
reason for
"easy-buck" atti¬
labor
toward
and
manage¬
government
all know
work.
that if
productivity
increases faster than wages, prices
decline.
On the other hand, if
wages go up faster than produc¬
tivity, prices rise. In the interest
of national well-being we must
fight a vigorous cold war. In so
doing, however, it is obvious that
unless we give our government a
full measure of productivity, we
only cheapen' our own dollars in
the long run.
duty lines which could keep
trying times operations headed upward.
for the most part, despite the
at around a 5% return. Full
points in short order, more
Technically - the stock has
results of its expansion
pronounced pickup in earn¬ broken out of a
than doubling: its
year's low
trading range
haven't yet been reflected in
ings in the most recent quar¬ on the
in the process.
topside which could
if
£
ter, a possible reason being be the start of a
per-share earnings. The chain
happier mar¬
that 1958 results will still not
showed poor first quarter re¬
Oils continued
ket experience.
among the
sults but has been perking up
compare favorably in general
more
laggard items and air¬
Caution Toward Retailers
craft severe far from achiev¬ with those of last year. The
smartly since. The chain's
The usual interest in de¬ rapid growth was achieved
ing any general popularity or issues, consequently, are
resorting to debt,
even, for-that matter, short- mostly available well below partment and chain store is¬ without
their highs despite
term trading interest;"
prospects sues at the holiday season of incidentally, and the time is
of improving profit
results the year was somewhat lost approaching when its better
next year. Atlas
Powder, in the general caution toward profit-margins should begin
An individual newcomer to
available at nearly a 4% re¬ the
market, leaving some of to enhance its earnings re¬
the limelight was Combustion
turn which is
high in this sec¬ the better yields available in ports.
Engineering which rolled up tion, has been a better
this
run
unusual
service
a
volume
handful
of
Chemicals had
per¬
following
recommendation
company, e s t i mates
a former
and poor
section.
despite expectations of despite
earnings
an
W.
T.
aggressive
Grant,
expan¬
comparisons sion program in the last
that and the prospect of
financing
eral years, was
[The
article
time
sev¬
still available
views
do
not
coincide
"Chronicle."
as
eocpressed
necessarily
with
They
in
at
considered
for
all.
will
or
I
15 years ago.
urge
a
of
program
conclude
carefully
finances
that
oldsters
have
profited from experi¬
Here, then, is a program for
young people. First, build up your
cash
reserves
to a point where
they equal a year's earnings (Sav¬
ence.-
ings Banks, Federal Savings Asso¬
ciation,
Savings,
ment
second,
straight
Postal
Bonds);
inexpensive
surance
a
program;
Govern¬
start an
life in¬
third, purchase
good non-cancelable health in¬
policy as a protection
while you are getting established
in the early years of your work
and while your earnings are but
surance
modest; fourth, buy a home of the
type and in an area that will ap¬
preciate in value; fifth, with the
help of a good financial counselor
commence
investment
an
pro¬
preferably of good common
stocks, to help offset the infla¬
tionary spiral. Keep your hold¬
gram,
ings well diversified.
Remember
the
well-being
is
clue
financial
to
saving
and investing part of
every pay check before spending
any
of it for the necessities of
living.
William Kegg
With
Kidder, Peabody, Phila.
PHILADELPHIA, Pa. — Kidder,
Peabody & Co., Fidelity-Philadel¬
phia Trust Building, members of
the New York Stock Exchange and
other leading
exchanges, announce
is now asso¬
ciated with their Philadelphia of¬
fice, specializing in Corporate Underwritings and Private Place¬
that William B. Kegg
He
ments.
previously associ¬
was
ated with the New York office of
the firm in the
partment.
new
Prior
business de¬
thereto
he
was
with the Paris office of the Guar¬
anty Trust Company of New York.
He is
a
member of the Investment
Association of New York.
With A. G. Becker
ROCKFORD, 111.—A G. Becker
&
Co.
Stock
New
York
Exchange members,
Incorporated,
have
announced the association of
liam H. McCoy
Wil¬
with the Rockford
office, 206 West State Street, as
representative,^
registered
McCoy
and
turned
to
this for
any
dozen
a
therefore,
I,
ex¬
me
Both the war
and
peacetime demands of our
economy have increased the Fed¬
1932
started
disease
pand this thought.
eral debt
porate, standards of financial con¬
lacking. Like the
prodigal son, many have awak¬
ened during this past year to find
they have spent all their resources
and
are
right back where they
duct have been
Inflation Wave Ahead
worse
their way to prosperity
perhaps done a3 much as any¬
thing to combat Soviet ideology.
But there has been serious danger
inherent
in
consumer
spending.
Adequate personal, as well as cor¬
has
available for
Democratic
startlingly high levels in recent
This example of Americans con¬
cash
ended
so
years.
you
I
in¬
The American spirit of
suming
and
or
con¬
have
opportunity is there if you
want to make something
of it"
has driven our standard of living
a young mar¬
ried couple
earnings,
that
standard of living
our
"the
You
nances.
in
rise
tremendous
spending
markedly.
fi¬
own
your
the
creased
of
manager
nation must
productive. Productivity comes
from
two
sources:
government
be
sumer
are
poor
very
more
ture
electronics items. But much of carry-forward will be
ex¬ have made
was
apparently based on hausted this year which increased
any
a
Against Inflation
To be prosperous, a
and
many
elsewhere ing solidly in that direction!
dotted
was
than
Where the
it
denied
in
Now Your Own Hedges
spending and consumer spending.
It is both government spending
success¬
ways, you
offer
over its prob¬
action by de¬
a
/
reserves,
questions ahead, where any sort of growth is
&
#
%
notably all the talk of the Big ahead. Like so many other
Some good earnings esti¬ Three invading the economy companies,
Mack will not
mates were responsible for car market with 1960 models. show
earnings comparable to
some of
the interest in the Moreover, American's tax loss those of last
year. But results
some
ful
with
5% stock payment
cember traditionally is one of and the issue quieted down
the brighter months of the rather
quickly in recent mar¬
year for the market—was the kets. The issue could well af¬
electronics one. And here, too, ford a market pause, having
profit-taking moved in rather increased some four-fold over
rapidly after the favored the 1958 low. And there are
claring
while
cepvbriefly in 1946, it hadn't
increase
speculation
group to start able
both
meet?
with children
list
Big Auto Question
quite enough money
payment were go high and so
ill-advised, was still toying
with the 200 line where, ex-
for the 1959 phone's classic $9 dividend,
spell out increasing caution model year. So far the evi¬ and the recurring stock split
until the' market's technical
dence was inconclusive, the rumors,
have pretty much
pattern is clarified.
recent rash of strikes holding obscured the fact that while
*
$
*.
down production and sales. more than doubling the num¬
Of interest to the techni¬ Also
intangible was whether ber of capital shares in the
cians was that the low posted further inroads would be last dozen years the company
on the latest correction was made
by foreign imports to has forged ahead earningswell above that reached on limit domestic
output. Market wise to make it one of the
the mid-October selling drive, action of the
Big Three as leading money-makers among
so
that there are two test well as the
independents was American corporations. Even
levels on the downside where
dreary so there was little clue on a per-share basis comfort¬
support developed in the re¬ here as to what the future able improvement has been
cent past
made despite the heavy dilu¬
and, conceivably, holds.
*
«
*
could be found again on any
tion through its many rights
new selling.
American Motors ended all offerings in that time.
30%
to have
never
you
Perhaps,
seesawing
some
was
among the blue chips but not
much disposition generally to
in
Do
future?
make
to
quality items that now
a
yield of around 3%,
That a test was indicated
The big question mark, and Telephone with its 4Vijo re¬
was
the
fact
that
trading it weighed heavily on the turn is still the income item,
dried up rather sharply in the
steels, was whether the auto apparently.
if
*
if
latter stages of the rebound,
business
was
coming anyturnover dipping to a low for
All
the talk about Tele¬
where near the predicted
Test Ahead
financial
ends
Seesawing Blue Chips
Plan
who finds yourself
worrying about your
Are you one
constantly
seem
discounted marketwise.
principal factors propelling
price inflation and offers five-point financial planning pro¬
gram for young people.
item
an
growth po¬
not yet been
the
adviser discusses
Financial
heavy
where the future
divi¬ quarter
dend next year.
test.
By ROGER W. BABSON
wide variety of
a
to
dependence o n explosives
and, despite its better action,
this
candidate
Inflation and Financial Planning
a
Mr.
his family have re¬
Rockford, their home
many years,
his interest in
a
following sale of
Cleveland machin¬
those
are
those of the author
of the
presented
only.]
ery
firm in which he had been a
partner.
Volume 188
Number 5800
...
The Commercial and Financial Chronicle
In
this
country the press and
publications are constantly
telling the public how to "beat"
inflation—what to, buy—what ^ to
sell-—what to: hold-—all' of • Which
adds fuel to the fires of inflation
other-
•f
L-
I*
buy when it is Ultimately repaid,
; Are we going to permit our dol¬
lar to continue its down-hill slide
until it has a value of only 25
being neither radical nor extreme. Mr. Krensky
propeses placiugour economy and fiscal policy on anonpartbanbnsinessbaMSyqFeatingaWmtchdoyCommitteefor
Expenditures, enactment of Saltonstall Refutation requiring a
minimum of even one percent siphoning of tax revenue into
debt retirement, and a vast pnbBe relations educational cam¬
paign to awake Americans to how inflation jeopardizes
:><
as
'
■
; our
economy.
-
cents, and perhaps
few
years
later down to the value of French
or
of
our
eco¬
other
currency that ha$ gone
tober Monthly "Bulletin."^ The radio to write their Congressmen
through;thev.bitter experience of same
"Bulletin" also contains the and. Senators about it;— combine ^
inflation? vr t
V**
following statement made Sept. with, and- encourage other institu¬
tions such as banks, insurance
Does this prospect seem fantas¬
15, 1958, by
Federal
Reserve
tic or impossible?
'f'
Board Governor M. S. Szymczak: companies,- pension- funds, labor
unions' arid the public generally to
I for one feel this is a matter
"The hardest, most tragic way
demand a fiscal policy that will
of time and; degree and will cer-; to
-'
V"^'.
.■
a
phases
zens, interested in the broad noa«
.: partisan problems of our com¬
Congressman Clarence: Cannon, ; munity -and country, and I have
Chairman of y the House Appro¬ every confidence that other like-'
priations • Committee j- Congress- ~ minded/ organizations and people
man Wilbur D.
Mills,' Chairinan of will lend their efforts and cooper¬
the House Ways and Means Com¬ ation.
Civic clubs can- take construc¬
mittee, Congressman Keith Thom¬
son. of Wyoming, and Congress¬ tive steps
: arrange committees
man John Byrnes of
to work with other groups such as
Wisconsin, all
spoke forthrightly in opposing the the Bar Association^ Kiwanis dubs
vast expenditures that were being and many other community and
voted by;our last Congress.
civic organizations for the purpose
of acquainting' the* people- with
Excerpts of many statements by
these men appear in- the First Na¬ the problem of. inflation—and ask
tional City Bank of New York Oc¬ people through^ the4 press
and
income investments and trades on
the fear of What our dollar will
Gravely concerned about the dollar's down-bill slide, prominent
Chicago mortgage banker submits anti-inflation proframwhich
all
-
'discourages investments in
long-term bonds and other fixed
Mortgage Bankers, Chicago, HI.
be describes
lording
nomic And industrial life."
•
and
By MILTON J. KRENSKY*
Milton J. Krensky and Company
17
(2317)
>
prove the folly, of the notion
tainly be the end result unless we that there can be any such thing give us hope for greater economic
companying article by Milton
develop some concrete plans to as 'permanent inflation' is to let stability in -the future. This is a
J, Krensky was originally
counteract this dangerous trend, a little inflation snowball into a very brief outline and obviously
Will have to be expanded upon. '
time more of us gave thought to which would ultimately ruin our
i published on this page in our
big one that must in time collapse
issue of Nov, 27 but, due to an
We must develop a reversal of
this serious problem.
country even though it is still the with consequences heavy in hu¬
the defeatist thinking that now
unfortunate error, the author¬
People living on Social Secu¬ number one nation of the world. man hardship.
I know that I am not alone in my
exists among many people, includ¬
ship thereof was erroneously
rity, modest pensions, small fixed
"The
more sensible way is
concern.
ascribed to >: Mr.
Donald C.
ing those who have. an under¬
income,
workers
who
receive
to pursue a course that will make
; Miller, Second Vice-President
standing of the problem but are
minimum wages, and others of
Politics are usually blamed for for a sound, stable
dollar, and thus
waiting for leadership to push
of the Continental Illinois Nasmall means are feeling pinched all of our ills. Actually we fre¬ overcome
expectations of inflation it in the
tional Bank & Trust Co. of
right direction.
by the reduced buying power of quently get the type of politicians by. demonstrating
they
are
The "Mortgage Banker," Publi¬
Chicago.
today's dollar, and as time goes we deserve and much of the legis¬ groundless."
cation of September and October
lation we demand. Many of our
For the past 20 years our econ¬ on, more and more of the popula¬
Senator Byrd has for years de¬ has had excellent articles
by pro¬
tion will be affected.
Yet the Congressmen are devoted public
omy has been affected by our ef¬
manded economy and fiscal san¬ found
thinkers, including Dr. Ed¬
forts in World War II, the Korean average person feels little or no servants and are trying to do a ity. Senator Saltonstall has intro¬
win C. Nourse and Dr. E. Sherman
concern
for these problems
constructive job for an altogether
so
War and the necessity for con¬
duced an excellent resolution that
Adams, pointing up the dangers
long as he enjoys prosperity, and too apathetic constituency.
tinuous
will be referred to later. Senator of inflation.
expenditures to defend
These articles state
he usually says, "It is up to the
our nation.
This constant spend¬
Williams of Maryland has con¬ the
Cites Substantiating Views
problem and what the future
government."
ing has created an inflated econ¬
sistently argued — less Federal Will be unless there is concen¬
Congressman Leon Gavin of
Because of the many
world
omy
that was unthinkable
a
spending is the only way to get trated efforts on the part of all
for
example, lower taxesgeneration ago. As a result of this crises in recent years and? the? Pennsylvania,
leaders' in finance; business,
warned* in the closing days of the
labor,
false prosperity, we as a nation general level of prosperity en*
Thesfe are but a few of the mem the press and opinion molders
las# session of Congress:
have developed a habit of na¬ joyed by the American people,
in* both houses of Congress that* generally to fight hard' until this
".
the government tocfey is
tional extravagance far and be¬ they have become apathetic to the
recognize the danger of our infla¬ problem is solved; We will have
latent dangers of our economy— becoming a government of pres¬
yond our wildest dreams.
tionary madness in recent years. to stop thinking in terms of busi*
an appalling situation.
sure groups—in fact, a
govern¬ This
Certainly all visionary people
minority can be made into a ness as usual,- partisan politics or
In
1918, after four years of ment of subsidies. We subsidize majority if we take time to do whether our personal interest is
recognize the inflationary dangers
many and varied programs—from
involved and can see the possibil¬ World War I, five French francs
something towards making it so. favorably affected.
agriculture to minerals, and we
could
be
exchanged
for
one
ity of ultimate economic chaos.
Unless
the
economy
of our
Certainly all of us, and all other
are
creating a Utopia where no
American dollar.
Today, 450 or
The Communist nations, • with
enlightened people want to do country as a whole has stability,
one can lose. The government will
more French francs are exchanged
our
their low standards of living and
something to help those in Con¬
personal economic' security
for one American dollar, and all protect and finance all phases of
gress that are making efforts in will suffer proportionately.
This
single-minded ambitions to over¬
of us know the hundreds of mil¬ our economic and social life. We
the right direction. 4
take the capitalistic world, are
applies even more /to* the aver¬
may
go
bankrupt
and create
i
EDITOR'S NOTE: The
tional debt of
ac¬
more
than $280 bil¬
lion is coining due at the rate of
about $75 billion per year. It's
.
.
.
:
(
:
.
.
,
lions
hoping and waiting father impa¬
of
loaned
tiently for this to happen.
dollars
that
we
have
given France to help chaos; however,f these programs
must go on. Certainly we did not
each time a
build our country on subsidy pro*
same situa¬
or
In
Calls
stabilize her economy,
crisis has arisen. The
Democratic form of gov¬
ernment we demand the right to tion
applies in varying degrees to
criticize, except in times of war, Italy and many other countries in
yet we feel our responsibilities to Europe and Asia and to almost all
our
government are discharged the countries of South America.
primarily through taxation. Every¬
German currency has twice be¬
one criticizes the government re¬
come worthless during our life¬
gardless of administration, but
time, but in each case we have
very rarely does anyone offer to
been able to help her start over.
help, solve the problems. :
German economy
is now mak¬
For many years large segments
ing apparent sound progress—
of the population have been de¬ with memories of its
bitter expe¬
manding more and more from our rience.
r
central government in Washing*
Praises England's Efforts
ton. Our strongly organized labor
unions
have
demanded
higher
England is the one major nation
•
our
America
grams.
I
we
will
end
with
up
government
bureaucratic
Civic Clubs
person
.
ernment
bonds, savings banks, in¬
otlier form of in¬
vestment.
"
surance or any
,
change the trend, I am quite
we
on
certain that civic-minded
vital problem, and I felt that this
is one of the first places where it
should be presented,
work, thrift and frugality. Unless
certain
am
clubs would want to discuss this
built by hard
was
of
small
means,
whether their savings is in gov¬
age
a
r
Civic
highly
over-
clubs
composed
are
intelligent
patriotic
of
citi¬
NOW—what
can
be done about
this perplexing, problem?
After much
thought,, many dis-
Continued
on
page '30
-
-
,
electric power
is
irrespective, of productiv¬ that has not permitted inflation to
ity, and our large corporations in ruin its economy in spite of its
-turn have raised product prices,
inability to grow enough food to
all of which has raised living costs feed itself and
despite its need
to a point where the purchasing to import
many other vital ma¬
power of our dollar has been re¬ terials.
Their economy also suf¬
wages,
for investment
Use of electric power in Puerto Rico amounted
to 1.3 billion kilowatt-hours in 1958—
fered greatly from war and other
last 20 problems. We should
briefly men¬
tion that England undertook to
years.
solve this difficult problem for it¬
Adding to this problem have
-been the demands of veterans' self. True, we have given England
.organizations,
agriculture /and considerable help, but the English
/other subsidies, without mention •people have made special efforts
of the many billions that foreign to keep the cost of living down,
which in turn has kept wages at
aid has cost us.
a relative level.
;
England has re¬
This type of prosperity tends to
duced imports to a bare minimum,
•create an increasing inflationary
made greater efforts to export,
•condition that could, in time, dev¬
astate
value
...
within the
economy
our
as
we
raised
now
7%
the
at
Central
Bank
rate
it,
-
.
225 per cent since 1950, and 18 per cent
just in the past year ... another sign of
Puerto Rico's amazing economic progress.
up
.
.
ii
Electric power
II
is_
a
vital key to the
rapidly increasing wealth, diversification and
stability of Puerto Rico's economy.
m
0
W'
Twenty-three steam and hydro generating
now serve Puerto Rico, whose Water
w
stations
Resources Authority,
to
sole supplier of electric
has been steadily
facilities to keep/pace
with the swift industrial expansion.
service jn the Commonwealth,
times
(the highest ever
known in recent years) „and main¬
tained very high general and in¬
.trend.
heritance taxes. In a few words,
How long can we continue to
every element of the population
be Santa Claus without ruining, has bad to share
the burden for
our economy.?
Do you know of the
good of the country - as a
-any nation that would help us whole.
This should serve as an
unless we take steps
promptly to reverse and check this
know
opportunities
new
;
duced to less thah one-half of its
former
sparking
■
building
new
;
have object
other nations of the States.
shore up our economy as we
helped
many
'world?
lesson
for
the
'
.
Developments of this kind give sound merit
-
to Puerto
11
GOVERNMENT
w.
im
Fiscal Agent, for ^ tbu. Puerto Rico Water
,
•An
,
the
by Mr. Krensky before
.Aftairf Committee,
City
Chicago, Chicago, IIU Oct. 28,
address
^iatiMal
Club --of
1958.
*
we
■
.
.
;
.'
.
reach
a
to France?
merrily along until
condition comparable
RICO
v4
Resources Authority
P.O. Box 4591, San Juan,
Puerto Rico
'
.
go
DEVELOPMENT
*
I-..
..
try to follow in her footsteps
we
those of the
BANK FOR PUERTO
.
we
as
m
■
1 or shall
bonds, such
United
In spite of her many problems
land^.Ia^k. of, many natural re¬
by approximately two billion in sources, England" has maintained
the last year, our exports are less a relatively stable economy/Shall
imports more. s Our na-
revenue
Puerto Rico Water Resources Authority.
Our gold reserves. y;ere4 reduced
fand pur
Rico's tax-exempt general obligation
and
'
m
m
-
37 Wall Street,
New York 5, N.Y.
i
-
,
r
The Commercial and Financial Chronicle\
18
.
Thursday, December 4, 1958
.
(2318)
contracts provisions deprovide independent
milling
sighed
Union of
to
nfTn'IT'
Produces Pleasure Rather Than Paut
(6) Today's; action is not due to/
forecast of a redu/ction in. the.
AEC revised uranium
purchase program, uranium industry's spokesman optimis¬
tically explains why the new program is a blessing in disguise"
Reversing initial pessimistic reaction to
The
'
United
The
-
Atomic Energy Com¬
new
any
require/
in the potential
for
commercial
ments
or
ments
Atomic En¬
States
require/,
uranium
Commission's
atomic
-
•
However, it is in the best
of both the industry and
power.;
•
Notice is interest
program
[full ergy Commission:
the government to hold uranium
announced, last hereby given of. modification of
the 1962-1966 domestic uranium production in reasonable balance:
Monday, Nov. 24, is proving a
concentrate
procurement
pro¬ with requirements.1
: - ' v->
"blessing in disguise," according
' 'u
/
to studies now in progress by the gram.
Uranium : Institute
of'" America,
(1) On May: 24, 1956 the Atomic
Gordon - A. ' Weller,
Executive Energy/ Commission
announced
Vice-President of the Institute, that it would guarantee the pur¬
uranium
mission
below:
text
Ed.]
■
said last week.
from the
Institute's headquarters
in Grand
Junction, Colo.
./'./V
// He said:
'
findings
show
studies
"These
' '•!
with
directly contrary to the
initial interpretations which were
made of the AEC action.
"The UIA studies find that the
almost
new
program
for
several
uranium
ore
the
under
will create a market
million
tons more
than
the
was
have become apparent
A legally binding reaffir¬
of the post 62 price for
uranium of $8 per pound of uranir
make
"(1)
will
give
due
of
the need
adequacy
reserves,
exploration and development,
the maintenance of the domestic
uranium industry, and other fac¬
tors which may be important to
'
(3) The effect
will
tion
be
to
of this modifica¬
provide
mestic- uranium
the
do¬
with
industry
a
Substantial continuing market for
the period 1962-1966 for concen¬
trates derived from already de¬
veloped ore reserves and, at the
time, guard against over¬
production.
•
: '
(4) Under this revised pro¬
gram, the Commission's 1962-1966
same
'
pegged
$300
annual gross of over
domestic
uranium
/;'7'7/7
Rem-) 1
Pay 7,
brand t
Dividends?" is
the title of Mi*.
May's lead
t i
c
1
the
in
e
.
ar-
Dec. 6 issue of the "Saturday Re¬
view."
His
is: "Yes, Rem-
answer
;
should be
bought with the expectation... of
His Excellency1 W. C. du Flessis, South African Ambassador /
generous interest and dividends. ,/ to the United States
(left), signs loan agreements totaling the <
But in the form of aesthetic plea¬
equivalent of $50,0000,000. Kingman Douglass, Vice-President of
sure,,, not cash!—any material gain
Dillon, Read & Co. Inc., (standing) signed on behalf of the underbeing mere windfall (or bonus)." / writers of a .$25,(MO,000 issue of -External Loan bonds, to be offered >
brandts
Gauguins
and
-
publicly.
documentation,
detailed
With
fluctuations in the market
pictures
fpr
price of <y~
concentrate
ment"
the
to
picture buying,
zationalizatiou.
Mr,
who
.
....
r,
;»^s.
buying program for the 1962-66
period, this alarm was due to a
lack
of
understanding
of
the
ities
the
and
•
•
' :
original
by an AEC press re¬
May 24, 1956, was
formalized by insertion in
announced
dated
never
(c) New milling contracts or
to existing
con¬
the Federal Register.
tracts
may be executed
to the Commission's
April 2, 1958 announcement of
the limited
expansion of the
ively nullified by a
policy announcement contained in
an address by an AEC official on
Oct. 28, 1957.
7
"As a result, the study report
atates, 'the only guarantees to the
industry, with the exception of
three of 23 contracts for the pur¬
chase of concentrates, were AEC
are
practices which evolved through
series of press releases, public
and consequent inter¬
a
addresses,
pretations—legality of which was
in serious doubt.'
industry,
which
was
with the Federal Register, a
filed
logi¬
cally sound program is rendered
upon
which the J industry can
rely."
Text of AEC Program
The
Energy
following
is
the
Atomic
Commission's 1962*1966
uranium
program,
concentrate
purchase
dated Nov. 21,1958:
v.
y
>t
filming television film series
srnall one-series beginning
T-iw>vM
1951-1952 season when tfte
the now famous "X
shows was nroduced
Loyt
this
,
hn'y producer for that
season.
The
lelevision, series predueed by the
company
1nto
two
are 'classified broadly
categories; ' those for
West . Germany; and
production elements and those for
which others bring to 'the goml
pany4 the principal creative ele-
avail-'
llx\^es^ Ger~
ments and the company supplies
many.
r
amine steel
.
.
'
/.
:
the princq»I production elemenii&.
Generally, the company owna aja
interest in the series in which it is
principally creator and producer.
Normally,; it owns, np interest? in
CHICAGO; 111.—G. L. elements,
'lMOThWthe series for which the creative
President of Jewel Tea Company,-;
The first; public sale of securi- elements are supplied by others,
will
be
guest speaker
at
the ties of Desilu Prodhctions Inc.',
_
■
■■u iauii.
luncheon meeting of the Invest- .the largest .producersQf filmed
R/
EpMIMHII Vh||
ment
Analysts Society of Chi- te)evision series in?the cbhntry, is
w mm
emcago to
be held Dec. 4 in/the i being made today/(Dec. fK by an
-V
x
Room
.
fiimiWIIHI ttliftlfifltftlfflft
I
/ Midland: underwriting grouh mam^ed by
the
rof
vt
"
&, Co./ Which is offering
shares of the company's
common stock, <$L par value), at
Bache
Hotel.
325)090
Named Director
a
The
appointment of Charles H.
which
price of $10 per share.
Qf the fotal amount of
CHARLOTTESVILLE,
Va.
Charles L. Churchill has become
associated with Wythe and Thorax
--*1'
hill, 204 East Market Street/ in
shares charge of theip municipal bond
Percy, President and Chief Exec-: being/offered2 for
publie" sale,^ department/
m
be negotiated for the pur- 7 utive Officer of Bell &
^ Howell; ^8,Q00 shares are being sold for
• Mr. Churchill for many years
of appropriate quantities
Company, as a director of: Theaccount of- the cohtpahy end has been engaged in> the business
of concentrates in the 1962-1966
Chase Manhattan Bank has beeh
gTjj/QOO shares in2 equal propor- of municipal- financing and in Whperiod from ore reserves devel¬
announced
by John J. -McOloy, rtions for the accounts' of Desi cent years has specialized in Comoped between Nov. 1, 1957 and
Chairman of the Board.
/
Arnak/President and director; and m©nwealth Of Virginia internal
..
„
may
„
„
„
„
chase
the date hereof.
(5) The action taken today is
guard against serious overpro¬
duction which might occur under
an
unlimited purchase
program
if very large additional uranium
to
discoveries
mission's
"By virtue of the new notice to
i
l
a
procurement
amendments
.
*
whieh the company is. the prjnei^
paj,. g^rcfe; 0f both creative and
^
each.
.
Adams
(d) New milling contracts or
contract
',-yT/nv''m 'j/"'
A. G. Siemens, a manufacturer of
a:..-.,:
/
Reprints of the article
cents
g
BranO;Peghai, Mex-r
dyAlfredt - yoh
processes.
25
i*
first of
-
company, sxew
the art market with actual invest-
program;
effect¬
change of
"Later the program was
the
which
pursuant
domestic uranium
/
Financial Yerjfr€lty^ G,
highlights the con- iJ5a"- • i^ustrialis^
goings-on. m*.
,en l^^upp, active
Chicago Analysts to Hear
pres¬
amendments
k•
plan extending
uranium markets beyond 1962.
lease
for the
-;w
debt and eqqity. ftpancmg.^.
of the "Commercial and
pi
ently existing mining operations
and developed ore reserves;/
newly established substitute pro¬
gram.
"The
...
ul^r^Cha^kTAUen J^nSt'
Depart-.-a«
Chronicle,"
,
in the
Formed in Mexico
/'
the Commission de¬
needed
V
'"
From a
ment and is now executive editor
at
termines that the milling facil¬
are
•
^change Commission
U.«S. Treasury
able fyom the "Saturday Review'
Appropriate extensions
current milling contracts to
(b)
the extent
1 '
_
associated with the Se-
curities and
(a) Current milling contracts;,
of
"■
-
t
A/is ;seriefe
ai(bindurtr^!Qncen5^fa t01*
'1958-99 season;'presently
-igv-J-Qm representing, the largest- volume? of
pure
investment authority
iviay,
was
constitutes
ment
wide-spread t, alarm was
Urst created by the advice of the
withdrawal of the original AEC
1 1 ■;
and
$6QQJKK)- V
current
,io
though
'*■/
essentially the result/,
are
purchases from ore reserves, al¬
ready developed will be limited
states that al¬
1,11
changes in fashion,, which are/
wholly unpredictable, He asserts/
that the attribution of "invest- J
Union of South Africa ;
$28,0#<WMMk
v
>
loan in various currencies equivalent'to
a
^
trasts of the current
Explains Reversed Opinion
"The UIA report
Eugene R. Black, President of the World. Bank/ signed a
loan agreement between the bank and the
Mr.. May's article declares that, in
contrast to investment, processes)
to:
eight years—
total of $2.5 billion.
:
of
atomic energy program.
the
t
of a
confirmation
million per year for
a
ore
may
upon.
agree
for
"
Legal
total uranium market, now
or
time
programs
domestic
% 1957, which were heretofere
subject to serious market uncer¬
an-
to
consideration to the
'•
at
such
Commission
the
Future
"(4) Creation of, a market for
uranium reserves found after Nov.
,
as
time
from
"(3) Enhancement of the indus¬
try's position in securing future
capital requirements for mine development, transportation equip-
"(5X
$uch
and on
dictate
and conditions and at
prices
;
purchase con¬
extent that re¬
the
to
quirements
terms
oxide.
"(2) A sound basis for the ex¬
peditious completion of contracts
now pending for increased mill¬
ing capacity for Wyoming, the
Colorado front range, and south¬
east Texas, as well as the exten¬
sion
of
existing mill contracts
which now expire on or before
March 31, 1962.
'* !/ ;*'/ ;v ,
,
"Does
developed after
contracts to
centrates
mation
tainties.
market,
withdraws
will
frenzied
the
an¬
Energy
Commission
the
date,
..
squanderingin
today's,7 art
the
reserves
ore
calls
he
prevalent /
justification ofv
concentrate
purchase program announced
May 24, 1956.
With respect to
new
.
the
this
of
hereby
prospectively
in the anal¬
facilities.
what
/
,
col-
art
and
during the
Atomic
the
invest-,,
York
of
issuance
By
this
ment, and processing
✓
lector, attack^
ysis of the new program are:
vm
time," A. Wilfred May, wellknown 'New-/
7
appropriate
quantities of concentrates derived
purchase
the
Commission
that
"one -;
as
ment authority
(2)
Purchase
industry
the
investment
captivating myths of
veloped prior to this date in re¬
liance upon the May 24, 1956 an-,
nouncement
by negotiating for
nouncement
Program
to
as
the most
of
de¬
reserves
ore
tion of art
our
Such purchases
will be at the previously estab¬
lished price of $8 per pound for
U308 in an acceptable concentrate.
will receive $2.5
billion in the business of mining
and milling the uranium reserves
which are now assured a market.
"Benefits
to
respect
Pay Dividends?";
Describing the popular concep- /
/
1962-1966 period.
western industry
Analyzes New AEC
May 24, 1956 commitment
from such ore reserves
case
program—that
former
produced and delivered during
the period April 1, 1962—Dec. 31,
1966. The Commission will carry
out its
7
concentrates
in
U308
of
chase
his statement
Mr. Weller issued
-
•-
are
made.
action
The
Com¬
recognizes
the
for placing definite limita¬
tions on annual deliveries of con¬
need
centrate and
gives
who
due
at
the
same
consideration
time
to
already have developed
reserves
in
reliance
upon
it:
those
ore
the
Commission's 1956 announcement
protection
will, be given the in¬
dependent
miners
by
incorpo¬
rating in all new milling con¬
tracts and extensions to
existing
Lucille Ball Arnaz/Vice-President issues.
; He was formerly
and director, of the company. The Scott,. Horner & Mason, inc. akd
company intends to apply:fpr list- prior thereto was with Otis & Co.
ing of the common stock on the in New York.
American Stock Exchange.
.
Net, proceeds. from the sale of,Forms Exec. Sees,
the 250,000 shares of common
.
stock • by the company will he
Samuel Goldberg is conducting
added to its geperai fund% to be a securities^ business from o^ces
used for general corporate pur- at 80 Wall Street, New^Yerk City,
Mr. Percy is a director of Burroughs Corporation, Harris Trust
& Savings Bank
(Chicago), arid
the
Fund for Adult Education
The
Ford
trustee
of
Foundation.
He
is
of
a
the
University of Chicago, a member of the Business
Advisory Council of the U. S.
Department of Commerce and a
board member of the
_
Committee
-poses, including payments to RKO under the firm name of Executive
./,Teleradio Pictures, Inc. represent- Securities Co.:,, ,
ipg instalments of the purchase
Irving A Fox
With Sloan Co.
price Hof the • company's DesiluCWRONICUE) Irving J. Fox passed away Nov. 7 Hollywood ..and Desilu - Culver
PORTLAND Orei -- - JB. h:Leo
24 at tne age of 69. Prich to his studios bought: in January, T958.
m
for
a
National Trade Policy.
»
.
,
,...
..
retirement
senior
Co.
in
he
had -been
partner of Fox,
O'Hara &
of New
1952
York City.
/'
(
//
i
//Desilu Productions Iftci, .incQF- Calkoa. aiwi IrfWliso
poraled in California, in 1950, is are witbr ®enaW, C:
engaged principallyiin producing Cascade. Building.
^flfcADister
.
Sloan! A: Co.,
Volume
Number
188
5800
::
.
The Commercial and Financial Chronicle
Republic of Austria
Drv Wilfried Platzer, Ambassador of the
the
to
United. States;
(seated, left)
Republic of Austria
ran underwriting group headed by Kuhn; Loeb &
Co. and LadenYb«trg,: Thalmann & Co*. which is offering the bonds today, and
'?'■;•/_
'
"/ ~:v
n
-
,
are,
1
seated, center, John
in
Ladenburg,
Thalmann
& Co.
Y..Y:'
;
;
;
M.-Schlff, senior p»rli*er of Kuhn, Loeb & Co.; at right, Eugene
Black, President of the World Bank, and, standing, Of ta Marx, Inf
partner
y
Observing,
'
4/
-;
dd uments covering a S25,0O0,00O World Bank loan to two Austrian
pfcbliy iioWef dorporations.
Basic Products Corporation, Milwaukee, WLscousiii/ invitesjenders for
purchase of 75,000 shares of Ileyi-Duly Electric Company Common
Stock at $^.00 per share. Basic lh'odiicls Coi'jioraluon liow liolds
63,585 shares of the Common Stock of ITevi-Buty Jilcetric Company out
fiAf;
signed agreement for sale of;
-$25,000,000 of the' Republic's eternal sinking fund dollar bonds to
.
.
Y
'
.
Y 1
,
d^rorft, : page
.
2
t.
.
.
'
Stock
u.
4a
yy y
iTfns request for tenders is made witli the knowledge of the management
of HevirDuty Electric Company. Only shares represented by certificates ;
bearing, a date prior to November,28, 1958, sulimiltodavithin the % . T
fime and in the manner indicated below; will be accepted.
.
- ■
Y, Y Y
;
a total of .'145^58(>shaivsoutstandiiig.BaSicis at present the,
largest siiigle stockholder jn IIevi-l>iiiy Electric Company.
.
.
of
transfer
taxes
.
will be paid by Basic Products Corporation.
;
-
I
■1
Hmv
•
..a,i
Submit Tenders.
to
YY-'^Y-Y'Y/YYC'"'
Stock certificates for the Common Stock of 1 levi-Duly,
of'equipment which characterizes
-Neptune meters.
Y/ i t
■ >'
throughout 1959, "with -prospects •
indicating a rise of about 10% for '■
try are a small part of total-sales
The new plant in
iPennsylvania, completed in 1956,
..?. will permit increased
production
-of gas meters at lower overhead.;
The distribution ability., of- the
For
•
■Y for the present.
-
.
,
-
I
-
-
the
the
entire
both
home
next
/
five
liquid
and
to
10
meter
industry,
years,
is
/
expansion of.nat- /.factoring process.
Highway toil.;,
throughout,.the.United and accounting equipment should
1 availability and
gas
Agiuit, J. P. Morgan.&A n, Incorporated, 23 ATall Street,
New York 8, N. Y.,, before 5 P.M., New York City,Time,
■■December 15, 1958, unless such date is extended by Basic.
.
Conditions
-
■
Industrial meters
ucts; should secure a substantial means for accurate measurement, • ;
portion of the gas meter market, .recording of ingredients, and close;
Sales potential for this equipment
quality control, which are vital t:
has
grown-, with,
the increased mete rs of any automatic raanu-
-Ural
'
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.
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.
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-
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following conditions: • •
'
*
are received for shares in excess of 75,000, the first 75,000 shares deposited
with Agent, pursuant to this request, will be purchased.
v
•
V-
.
.
r
•
tenders
'
1
■"
*
r
Vfi Basic may at-its
-
States.Natural gas transmission. ^crease in demands and there is .
',
-pipelines have- opened the entire,
potential employment of this
country as a source for gas appli- equipment in other industries.. To.
.
before December 15, 1958, or on or before the date to which Basic shaft
extendt the period in which tenders may be made, subject to the
Y
-
of Purchase
,
Basic will accept tenders of Ilevi-Duty Electric Company stock on or
;
T
,
•
Y
5
market,
duly endorsed
accompanied; by duly^executed stock powers with signatures " '
r
guaranteed, and otberwise in proper'form for transfer,/together witk a ■
signed letter of transmittal (forwarded by letter to ^11 Ilevi-Duty
stockholders dated November !^(k 1958-), nuist be received at/the office of
y pi?
v.,
provide;
chemical* drug, cement arid ,/
other
industries
with
a %
company* combined with newly-. food
developed high-quality meter prod- .many
"-Y.
//*
.
peeted to; grow. Home meter saleswill rise with water;conservation, v
efforts.
-:
ft'
the entire year.
Gas meters for home and indus-
•/:>'
:.l
u
/'climate forecast for 1959 will stim- ' lor Electronic Signal's products,
iilate capital expenditures partial- Sales and income are likely* to
'larly for the cost-cutting variety benefit from a more even demand
sole option, reject
or
accept all or any number of the shares L
/
tendered above 75,000 shares. * /
YY-
anee users;
-
.Y
.Electro-mechanical
.
•
,
I
•
p •
exploit this dynamic-future,.man-,
-
products. agement of the
Neptune Coriwere the mam-stay mi Neptune s
poration at all levels is experi- "
business .m the early months ot enced and voune '
:
•* A-:
f;
'
•
-
1957■
f
-
and the abundant
agricultural
crop
of
assured sales of the, grain storage
current
-were
*
s
^
e^»,
*lon
-
incu^re
30, 1958, sales were $27,557,998
which were about $2,294,000 above..
Y the 1957 lever." Net income per
of
Dee
V
-■■
of
f
toe
$719
The
$2 40
.
1:
y\
-
nor-
,
.
may,
pre-
maior
;;
'
but need not, waive any deviations from the terms hereof Ivy persons
making tenders and it may accept tenders from time to time received without Y
prejudice to its right to accept or reject further tenders.
:
Y
"
t\XBasic
; : •
3!,
$10>892>000> consider-//
stS
'
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assets
* $1*276 Wfiand
f
detecting equipment of Hot Spot... h
: For the, nine months ended Sept.
J.®
as are validly tendered or reject any or all tenders, provided that if
accepted, and others rejected, the shares' will be accepted in the order in
which they were.tendered.
;
• ;•
Y
' '
•
•/ some are
•
■
Net'
-
Y such shares
-
-
-
-
"
If the total of 75,000 shares are not tendered, Basic reserves the right to either accept 1
'
'
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loo'vii 38?
•
Price: $22 per share
' pa^L
p^
de^t, • $1,250,000; was
*2 connection _vvithrYY\e f,
Payment for accepted shares at the rate of $22.00 per share will be made
by J. P. Morgan & Co. Incorporated as promptly as practicable
p"rch?f e
a new New-York City
area pIant to man«facture meters.
For-Existing-plant facilities had been
Y
after the termination date.
~
'
'
:
/"
,
share for nine months of 1958 was
•
10-'versus
$2
iff
"//
$2 13
for
1957
ofMB* sales !wUL probably
iocrinonnn
.
'
:
income
$2.90
W
.
per
outstandiHg'
724 shares.
4,
i
*
.
as
a
and
w
family
stock
own. about 21% of the total
outstanding.
v;
.
Neptune
Meter, listed on, the
American Stock Exchange, repre¬
sents an interesting long range
holding.
This - is "an established
m -its, initial market,
with growth prospects in closely
apied areas. At the present price
about/33» the stock sells at about
12 times estimated 1958 earnings,
:and y^Ids-4.2% on the $1.40 annua* dividend.
Y
Y
f'
i.
Y
/.
j-
'
company
„
Y
i
this advertisement has been sent in a letter to all
Hevi-Duty Stockholders dated November>26{ 1958. A Letter of Transmittal for use,
in forwarding your slock was also enclosed with this letter.
The information contained in
result of The? continuance of
the presenf
r
L
Management and their
Basic will pay a
fee of 25 cents per share for all shares which are
accepted if they have been tendered through-, or if such tenders have
been solicited by, a securities dealer who is m member of the National \
Y "Association of Securities-Dealers, Inc. This fee will be paid to such * 'C
- ; securities dealers who are responsible for thejsolicitaiion of or handling y
of the tender/ as evidenced by tfie dealer's name appearing at the place
,
indicated on the LeUerof Transmittal. Loewi & Co. Incorporated,
225 East "Mason Street, Milwaukee 2, Wiseohsin, is assisting
Basic in the request for tenders.
-
f
•-
Y
See Your Broker
-
Commqn
totalled 1,042,•
.
»
•
'"adequate to handle 'efficiently,
present volume.- Net property .was
valued at $8,747,00,0
$2.85. to stock
M
approximately
share. Current sales are
about equal to those of 1956. 4, .
In 1957^ as a result of low hous¬
ing starts and defense cutbacks,
cht a" string ot steadily
rising
yearly sales that resulted in a
./ doubling from 1950. to 1956. Net
income per share despite increased operating costs and aci
quisitions via stock: exchanges,
maintained the same rising pace.
1 v Projections for 1959, depending
upon toe
general level r of the
economy, are favorable/. Sales of,
liquid meters'; should remain high
•
an
S'a^dard Investors
rateofhousing starts
capital expen-
increase in
(
BASIC
'■'*
PRODUCTS
I'm
YONKERS, N. Y. —Josenh W^-
\
,
is
assu
/ed under ^Cold War" con-*,
diliemrt
.The highway program
will continue to
http://fraser.stlouisfed.org/ affect the market
Federal Reserve Bank of St. Louis
/.
business from offices, at 63 Orchard Street under the firm
of
Standard Investors Co.
name
i
Post Office Box 712,
Milwaukee 1, Wis.
r. j
/j ^
1
The Commercial and Financial Chronicle
.
.
Thursday, December 4, 1958
.
(2320)
20
Economist Cites
'•
A MUTUAL
"While
*
^
has
FUND
E
such
"Healthy Condition"
W 3it
woiild appear that the paper industry .is in a healthy condi¬
tion,' and, if its past barometric qualities prove reliable, it is fore¬
casting an improving level of general business activity in 1959,
according to; the November issue of "Perspective," published by
Calvin Bujlock, Ltd.!, managers of mutual funds with assets in
excess of $450,000,000.
The publication pointed out that for many
-
WRITE FOR
In economic circles that the trend of
paper and particularly paperboard consumption was an excellent
guide as to the course of general business activity.
In the first half of 1958, "Perspective", said, total paper and
paperboard production was off 3.6% from that of the 1957 period.
However, in line with the improvement in general business activ- ■.
ity, total production for the first nine months of 1958 was only
down 1.7%, and it is estimated that full year 1958 paper and board
production will approach the overall total of 30.7 million tons for *
1957. In recent weeks, it was pointed out, paperboard production
has been at 95% operating rate of an expanded capacity while
paper production has been 92%.
In fact, paperboard production
at slightly over 300,00 tons for these weeks has been at new output
FRtt INFORMATION
it has been recognized
years
PROSPECTUS TO
YOUR INVESTMENT DEALER OR
FOLDER AND
NATIONAL SECURITIES &
RESEARCH CORPORATION
Ittablithtd 193 0
Now York 5, N, Y,
i
<
1965 U. S. net demand (required production) for paper and
million tons, an increase So 40% over peak
board would total 48.8
1956
production of 31,336,000 tons, v i:
.vV-^..V'Vv' \r. C
might be well to point out a few negative aspects over the
for this industry whose long-term continued growth
"It
J Incorporated {
Investors
J
ESTABLISHED 1925
|
A mutual fund investing in a
|
list of securities selected for
I"
'
possible long-term growth of
v; !
,
is
A mutual fund
list
investing in
.
.
restraining influence on needed price advances, and it is diffi¬
see 1959 earnings equaling peak 1956 results.
This assumes
that, there will not be any wave of excessive inventory buying,
cult to
although such
|
i
a
a
possibility cannot be ruled out in the present
economic environment."
•.
of securities for current
V
■
,/;•
It is generally recognized, "Perspective" said,4hat the capacity
operations enjoyed in the 1955-56 perio^^qre abnormal, andAt jfifelt that a 90-95% operating rate is a more realistic figure in that
provides some surplus capacity to satisfy temporary peak re¬
quirements. Such a rate should result in satisfactory earnings and
an adequate return on invested capital.
Furthermore, the antici¬
pated continued growth factor for the industry should in a few
years eliminate any present excessive capacity..
it
each
J
fund is available from
'
A prospectus
your
on
investment dealer.
I The Parker Corporation
200 Berkeley Street
Boston, Mass.
„
.
diversified
holdings of bonds, pre¬
ferred and common stocks
selected for income
»
j
•
A BALANCED
FUND
and
f.
Chaimiiig Corp.
Buys Hare's Ltd.
cents
per
Corporation an¬ post-tax
Channing
as
'consumer
t
k
a
Funds
stronger
even
evidence
th
e
that
,
recovery
in
the
from
Scudder, Stevens & Clark Fund,
stock
is
Inc.
far
X.
to
with
New
and
economist
York
of
Vice-President
Inc.,
ties,
a
Executive
Group
$145,000,000
Securi¬
mutual
fund.
television
Dec.
on
1,
said,
in
interview
Mr. Schreder
the
prices' of
"Although
well-known stocks have run
of their advancing values
and
need
healthy
corrections,
seldom, if ever, have the usual
stock market 'Averages' been less
representative of the price posi¬
tion of the majority of stocks as
many
ahead
on
total
net
assets
a
ago
year
$61,993,245, equivalent to $31.04
per share on 1,997,082 shares then
outstanding.
Scudder, Stevens & Clark Com¬
mon Stock Fund, Inc. reports total
net assets on Nov. 13,
1958, of
$24,575,002, equal to $27.64 per
share on 889,173 shares outstand¬
ing. This compares with total net
assets a year ago of $14,294,579,
equivalent to $19.94 per share on
717,008 shares then outstanding. • ;v
Fund Flans
gy
10-fdr-l Stock Split
fV'.
v
now;
*■
assets
net
of
Harold X* Schroder
Scbreder,
leading
total
13, 1958, of $77,634,117, equal
$38.73 per share on 2,004,430
shares outstanding. This compares
to
ac¬
Harold
reports
Nov.
com¬
pleted,"
cording
Report
Asset Gains
business
and
market
•
e
place, there is
The
"It is front page news," he ex¬
Board
of
-
'Averages'
are
mound their ,'all-
recently com¬
pleted study: by our research de¬
partment shows that, pv^r threea
.
fourths of all
the
common
stocks
the New York Stock Exchange
on
below their 1955-57
highs, and over onethird are still selling below their
1946 highs!
are
selling
individual
plain
facts
are,"
Mr.
continued, "that 'Aver¬
ages' of business and stock market
activity are always — not mean¬
ingless, just not very meaningful."
He illustrated this important
money management point with a
Schreder
to
shareholders
meeting,
Jan.
at
the
annual
that
1959,
20,
President.
New York and Pacific Coast Stock
The
corporation directors have
announced
a
regular quarterly
on
the
common
Exchanges. He was formerly with
Victor Troendle & Co.
stock of
shares be split 10-for-l,
and the authorized capitalization
be
increased
having
a par
to 1,000,000 shares
value of $1 from the
presently authorized 50,000 shares
value. Energy Fund,
with $10 par
mutual
a
without
fund
a
sales
charge and specializing in invest¬
in
ments
the
energy fields, has
than 30,000 shares presently
outstanding of the 50,000 author¬
ized. On the basis of the offering
more
price
of
the
shares
on
investing pri¬
CUSTODIAN
stocks
and seeking possible long-
FUNDS
and income.
container,
trade,
etc.
The
senting
other
finance stocks,
stocks, repre¬
50
14 of the more dynamic
he
said,
"declined
chases."
.
-
.
;
-
the
on
average
despite
are
still
requiring extremely care¬ lic offering to $177.44, not includ¬
selection, should ing capital gains distributions paid
provide
very
profitable
selling during the period totaling $14.13.
and buying opportunities over the The ranks of shareholders have
"while
investment
your
Find out
now
about this series of Mutual Funds
seeking
possible growth and income through investment in Amer¬
ican
industry.
Fund
one
□ Wellington Fund
FRANKLIN CUSTODIAN FUNDS,
□ Wellington Equity
*4 Wall
-
Fund
INC.
A Common Stock Investment
Street, New York S, N. V.
Please send me, without obligation, the Prospectus
are
«nd other infor..
.
Prospectus
name
A
*
v
upon
request
'
ADDRESS
CITY
,
Lord, Abbett & Co.
ADDRESS.
CP
crrr.
ZONE.
Fund
objectives, of this Ftaad
possible lonp-term capital and
income
(rowth for. its shareholders.
Investment
mation concerning the Franklin Custodian Funds.
jbtatel.
.
first ,publiQ offering
October, 1955, total assets of
Energy Fund, managed and dis¬
tributed by Ralph E. Samuel and
Since
in
during 1955-57
sizable 1958 recov¬ Company, members of the New
selling 32% below York Stock Exchange, have in¬
their 1955-57 highs. They all now creased to $5,498,570 from $950,216
three years ago. Shares outstand¬
appear to be in a basically favor¬
able price trend regardless of the ing now total 30,988, up from the
price
level
of
stock
market 7,920-outstanding at the beginning
of the period. In the same period,
'Averages.'
"This wide disparity in
stock net asset value per share climbed
prices," Mr. Schreder concluded, 47% from $119.98 at the first pub¬
ful
growth of capital
Check
28,
Nov.
1958, of $177.44, the split would
result in a net asset value offering
industries,"
FRANKLIN
Fiuul
Wellington Company
Philadelphia 3, Pa.
the
Fund's
earnings
of $518,591,
series of charts showing that both price of $17.74 per share.
equal to $1.39 per share on 372,In announcing the recommenda¬
business
and
the
stock market
817 shares. Comparable figures for
the directors,
Ralph E.
distributor of shares of the five 1957 were $550,944, equal to $1.67 experienced violent crosscurrents tion of
President, stated that,
institutional
mutual
investment per share on 330,350 shares. Man¬ within a general downtrend dur¬ Samuel,
"the increase in authorized capi¬
funds and Canadian International
agement reported a substantial ing 1955-57, and during 1958
Growth Fund Limited. The acqui¬ improvement in earnings of the clearly appear to have established talization to 1,000,000 shares will
a far from completed new
major not only make it possible to pre¬
sition was made through an ex¬ third
quarter and a favorable
pare for an increased participa¬
change of stock with Mr. Emlen S. outlook for the remainder of the uptrend.
Mr. Schreder showed the tele¬ tion in the growth of the energy
Hare, founder of the Institutional year.
Funds.
This development places
vision audience price charts of 100 industries and companies, but will
all phases of distribution for the
well-known stocks out of the 1100 also permit substantially broad¬
ownership
of
the fund's
Institutional group under Chan¬
Joins Barth Staff
stocks that Group Securities con¬ ened
shares. The new, more popularlyning sponsorship, the retail selling
(Special to The Financial Chronicle)
tinuously reviews. "Half of these
priced shares will, moreover, ac¬
being done principally by another
SAN FRANCISCO,jCalif.— stocks," he pointed out, "gathered
commodate the many who have
Channing division, King Merritt
strength during 1955-57 and now
Michael H. Gault has joined the
& Co.
Mr. Hare is Chairman of
are
selling at a average price expressed a desire to accumulate
the Board of Directors of Hare's staff of J. Barth & Co., 404 Mont¬
41%
above their 1955-57 highs, Energy Fund shares over a period
of lime by means of periodic pur¬
Ltd. and Mr. H. L. Jamieson is gomery
Street, members of the i. e., tobacco, utility, food, retail
Get the facts on
The
of
Directors
plained, "that most stock market Energy Fund voted to recommend
the acquisition of Hare's
principal underwriter and
An Equity
investment dealer
for the prospectus of your choice
or use coupon below
favorite
1955-58
-Two Scudder
periencing,,
w111
56%
Writs
ually shift their preference froih
the
which
we
eries
common
-
*
investors grad-
as
ex¬
and
marily in
ahead
nounced
Ltd.,
dividend
growth possibilities.
term
from
"The
share, payable Nov.
20, 1958 to shareholders of trecord,
Nov. 13, 1958.
The corporation reports for the
nine months ended Sept. 30 last,
15
....
j
months
,
market
stock
area
timeTilghs," yer
>
income.
I
Buying-Opportunities Ahead
increasing
a
~"•"I
Income Fund
i
apparent," the study said. "Estimated capacity in 1959 will
while estimated production for next year
32-32.5 million tons. Obviously this surplus capacity will have
seems
be about 37 million tons
Incorporated j
I
short term
I
|
|
|
|
--y.
capital and income, "r •
r-7~" 7
the
an
now
.
\ In
a
V.-•
Miami
From the longer term, the publication said, it is estimated that :
by
FREE ON REQUEST
I
are
peaks.
EITHER PROSPECTUS
I
that
reached
an
periodically wide and disturbing goods' stocks to the long-decorrections,
pressed dynamic stocks." •
By ROBERT R. RICH
Paper Industry Seen in
|
is
likelihood
INVESTMENT
120 Broadway,
there
New York
—
Chicago
—
Atlanta
—
.
Loo Aageles
.
Number 5800
188
Volume
ten-fold
increased
to
.
.
total
a
.
(2321)
The Commercial and Financial Chronicle
of
Keystone S—3 made on D66; 31^
1947. If all distributionsKad-been
taken in cash, the shareholder^
Rfl 1*1*111
Udlliugei UdllUUHh
than
1,100.
Upon approval by shareholders,
the split of the shares is expected'
more
1'
T-a
.
Ull iUarKet X r0HCl;
effective Jan. 21, 1959,
stock of record Jan. 20, 19597
2Y
would
account
worth' $19,414
be
to become
on
Commenting
of 10 shares,*
purchases, and pur¬
chases by present Energy Fund:
shareholders, may be at a mini-:
mum of only five shares.
succeeding
craft
National Investors
Broad
Street
;
periodic investments and to plow
back dividends have passed the.
7,000 mark, according to Francis
F.
Randolph, Chairman of. the
Board and President.; At Oct.
Accumulation
7,103
shares
22-year ' old fund
This meant that 39%
National
all
of
use.
holders
Investors'
The number of Plan
all
-
steadily.
Starting at 5,440
by 31% in the ten months
31.
The 7,103 Plans on
covered
1,880,345 Na¬
Oct.
to
that
to
%
v
covered
by Accumula¬
tion Plans averaged 264.73, an the
average holding had a value of
$3,020.59
Oct. 31.
on
r m
Aviation, Qrand Unwm,-^Outboa^d
®®ar*nf and Seaboard. Oil' C°m~
\
^ ' ',v
'
7
j,a
'
;
«
pi^
TaCIlIC (l3S ft Cl6Ca
41/2% Bonds Offered
Corp.? and
First /Boston:
The
Halsey, Stuart & Co., Inc. yesterday : (Dec. 3) headed, an under-
'
-
ratSS
n
™a»-and Worthmgton Corp. Elim-
explanations prob-
of
contain some
conviction
the
of
ever-rising
terest.
powerful
more
won
of
Award
the
issue
was
by the group at competitive
motive.;:;;>;,J./,
• sale Dec/2 on a bid of 99.301%.
yIt is axiomqtic, the mutual fund nNet proceeds from the sale' of
^ex,ecutiye contends, that a market the bonds will- be applied by the
Built upon such hopes is vulner- company towardHhe retirement of
'
*
Shares
both
earnings/as; the
date
tional Investors shares.
of investment.
other forms
While
ably
at the beginning or 1958, the fig¬
ure rose
p
SS'^ cZvSrW
writing syndicate Which: offered
the truth, an issue of $65,000,000 Pacific Gas
Mr. Barringer went on; the rela- & Electric Co. first and refunding
lively sluggish
action
of ; real bonds, 4^% series DD, due June
estate and commodity prices point 1, 1990, at 100% and accrued in¬
holders of
the $90 million fund has continued
to grow
Pnt
panding earnings, or are motivated
by an overwhelming fear of-the
destructive power of inflation on
share-"
using the convenient
facilities and services provided by
this Plan.
*
f
.
were
,
^e^caniAmim^, Am^ican Pot? S
1
Clearly, he reasons, in-V
vestors
buying* stocks
at-/such"
prices either have their eyes hope¬
fully fixed on-;indefinitely ex--
for
*"•*■■
its historic;
on
months."
the
of
Were in
Plans
g
.'..erally rising markets.
Average is appraised .at over 20
times the earnings of the latest 12
31,
able to reversal, and he^cited the
short-term bank i loans incurred
in connection with the construc¬
toward the cost
In his latest Letter, Mr. Bar- of additions to its .properties.
It
'Charles E. Kimball, Robert D. Duncan, William H. L. Sullivan,
ringer also reported the complete is estimated that construction exBruce Bales, Raudai M. Keater, Jr, Rawson Lloyd, Robert J. Ogilelimination of Brunswick-Balke-' penditures for 1958) will amount to
vie, Lawrence Council, Richard J. Beall, James E. Halbkat, A.
Collender from Delaware Fund's approximately $186,000,900.
•Bruce Brower, Henry S. Grove, Joseph E. Canning, Lewis G.
portfolio. This company, he said, * ^ The series DD bonds will be
Kearns, Henry C. Dugan, A. Moyer Knip, ClaudeD. Mackay, C.
whose well-timed entrance into redeemable
at1 prices
ranging
"Howie Young.
(Bottom row) Joseph' E. Welch, A. J. Wilkins,
the /field
of automatic bowling from. 105%- to par, plus accrued
Walter L. Morgan.
^"■
pinspotters brought it a huge in-^ interest. However;: prior to Dec,
crease in earnings, has turned in ^,4963, none of the.bonds may be
tion is. that current, price-earnings
a
sterling ^ market performance, redeemed .either at the option of
to
ratios on many stocks are much
But; he told his board, it seemed the: company or for'the sinking
too high."advisable to accept the profit on fund, with funds: incurred at an
:
As evidence of. the 50-50 defen¬
this holding in view of the com- interest cost to the. company of
sive and cyclical investment pol¬
pany's predicted earnings • being less .than the interest cost of the
Recent
financing by Madison
icy, he cited recent investments realized, its stock having risen series DD bonds. :<
;
Fund, Inc. was not a step toward as
including * two ; banks
(First 250% above the 1957 low, and / Pacific Gas & Electric Co,, with
open-end
status,
according
to National City and Chemical .Corn
other competitive consideration?
its principal executive offices in
Edward A. Merkle, President of
'
u
;
Exchange), / some chemicals (in¬
'
San Francisco, Cal.r is an operthe closed-end investment trust.
cluding Stauffer, Dow and ^Ten¬
ating public utility engaged prinHe said that questions raised dur¬
®^
nessee Corporation)^-and Ameri¬
cipally in furnishing el^tric and
ing a recent six-city tour of finan¬ can Airlines.
n■
gas service /throughout most of
cial institutions pro m p ted the
Madison
Fund • currently
has
~
recent sharp
(Very top row) William S. Knox, Thomas P. Emmons, Danforth Field II, Victor J. Brady, Danforth Field, E. Martin Engwis,
reversal
proof of
as
tion program, and
ting.
-
EATON & HOWARD
■
"BALANCED FUND
20 CENTS A SHAKE
:
; Dividend from iureoiment income
Madison Funci
55 CENTS A SHARE
Copiial doing Distribution
'j'
Remain Closed-End
-f
STOCK HIND
H CENTS A SHAKE
t
,
EATON & HOWARD
-
•
*
,
Dividend from Invegtment Income
3t CENTS A SHARE
'
>r"
.
Capital doing Distribution
"C
Dividends and Distributions payable
to shareholders of record
December 23
at 4:30
•
;
1
P.M., December 2, 1958.'"
24 Federal Street, Boston
statement at this time.
about
and
its
of
10%
short-term
-s
Two,
changed
we
ration
to
the
eliminate
popular
misconception that we were a
holding company. And
railroad
we added $20 million to our
investment funds through the one-
three,
BOOKLET- PROSPECTUS
SKVtmU,
IMC
Madison
A mutual fund
share investment income,
investing for in¬
Fund will in all likelihood main¬
$0.15 < quarterly
dividend.
With realized
tain
and pos¬
sible
growth
through com¬
its
gains
stocks
new
■elected for
income
more
quality.
the
established
annual
in
the
distribution
Mail this
1959
advertisement.
should
equal
the
ago
an
Fund's
all-time
to $44,062,711 during the 12-
month
period,
an
increase
President S. L. Sholley
for the fiscal year
ended Oct. 31.
Part of the increase was attribut¬
able
investment
the
to
tiooAAnnnn{«nt
tu
period,
the
of
more
«m„na«uai
largest
the
the fund's
>
Total
assets
went to
f
1
Oty_
INC.
Yarfc 5, NLY.
87%
about
of
California.
which
served the 12gas'
Wlth months
For
30,
the
1958,
are
also
ended Sept.
company
had total
operating revenues of $527,102,000
and net income of
$83,478,000. f
With Brush, Slocumb
(Special to The Financial Chronicle)
$41,-
SAN
000,827 for S-3 at the end of the
FRANCISCO, Calif.—
of
quarter
included
common
of J leading
the
during
stock
companies
interim,
early in in the steel, building, farm imple¬
$0.63
year,
Keystone S-3 paid a regular
semi-annual
distribution of
14
The Fund's
shares
are
ment
held in
share from net investand
mcome
tribution
from
gains, of
eight
More than 71%
vestors
both
de¬ ment and railroad fields.
Jouis Reynolds Staff
of shareholders.
stone's
special
a
d
-
capital
realized
CFC
stated, "until there is a more tan¬
In the Fund is
gible reason for the high prices of jamin
many
popular stocks. Our convic¬
a
to
reinvest
under
Key-
Account Plan, thus
Franklin's
City of Boston.
portion of Ben¬
bequest to
the
:
"
—
Comparative figures in the
from a
investment
port show the results
pothetical
j^oj-pp
Reyn^s
js
ROSA, Calif.—John C.
n0w
affiliated with
& Co., 211 Exchange
Avgnue
per share.
of the fund's in-
distributions
Open
(special to the financial chronicle)
SANTA
cents
chosen
have
10 years.
GROUP,
central
served haa an estimated
area
population of around * 6,310,000.
On Sept. 30, 1958, the ccunpany
had 1,834,840 electric customers,
inception.
net
taking advantage of the comAt present, the Madison Fund
trust by the Massachusetts Hospi¬
pounding principle that has helped
portfolio is approximately evenly
tal Life Insurance Company, the produce such spectacular results
divided
between
defensive and
for the fund and for the investcyclical issues. "We expect to con¬ nation's oldest corporate trustee,
ment company industry in the past
tinue
this
way,"
Mr.
Merkle which was incorporated' in 1818.
Noroo_
*3 WsN SON, Now
told 22,272
shareholders in his annual report
cents per
investments,
New
purchases
clared in February, 1958.
DISTRIBUTORS
reached
capital 31.3%.
$0.56 per share on the
capitalization reported for
of
the first nine months of 1958 and
their invest¬
>
the past year,
The
w^ile the total for all Key- James P. Walsh is now with Brush,
stone/fundS passed the $400,000,000 Slocumb & Co. Inc., 465 Califigure in November. The S-3 re- fornia Street, members of the New
capitalization from 5,000,000 to holders, Mr. Sykes pointed out port shows a 29% increase in net York and Pacific Coast Stock Exasset value per share, 49% in num- changes,
6,433,095 shares has temporarily that the Fund's net asset value
resulted
in
slightly lower per increased from $33,524,951 a year ber of shares, and 61% in number
ruwo/
ment
assets
almost doubled in
and
northern
Keystone
amount of annual purchases since
Massachusetts Life
The
of
assets
Growth Common Stock Fund S-3
during
Fund Gains
rights offering to stock¬ high at Sept. 30, 1958, Lawrence
holders to spread operating costs A.
Sykes, President of the Trus-,
over a larger number of shares."
tees, announced.
'* ~ *
V
;
Although the recent increase in
In his quarterly report to share¬
COMMON STOCK
mon
Massachusetts Life
total
net
Total
..
for-four
describes THE
come
.
the
from The Pennroad Corpo¬
name
CROUP
cash
in
assets
bonds, as against
us in better competitive posi¬
a normal positioirof less than 5%,
tion," he declared. "One, we made because this seems to be a proper
it possible for our stockholders to
cash reserve at the current level
reinvest their capital gains with
of this market.
:
the same ease as mutual fund in¬
vestors.
t
Almost Doubled
^
"We have taken three moves to
put
-
■
:
us
-...- t
-
last; March, it has almost;
cscaped the setbacks 'euphemistically called correctiorlis. fWith-f
out
hesitation" hecommented.
"stocks have moved upward to a;
point at which thcyr are yielding
considerably less; thah bopds^ and
at which the Dow Jones Industrial;
Group*
Funds, who • are using
Accumulation Plan to make
its
.*•
of;n™ ^!?b!
$10,000 would:
of ; fair ;
•
has been with
long
distribu ions,
almost
clirnb
Shareholders of National Inves-;
Corporation, the growth stock
Mutual
so
the;
•
prediction
the market started
tors
the
replace
Mr. Barringer recalled that since
-
Holders Show Gain
of
to
weather which
for
t
warning has certainly been
monotonous
Accumulation Plan
of
-
rt
SSSSt small
hoisted
i
v^5, /n
H ?
reinvested cap-,
gains ^istributions,^ his acj i
of^bme- count would he worth $32,984 and >
tremor or the forerunner
,
fund
Kin"
rectors'
minimum
a
in
market's
Mm.
os
nj r-An' in vestment
.income.
decline, in his Nov;, 25 Di¬
Letter, Delaware Fund's
D... Moreau. Barringer said ..that
while it is still too early to tell
whether this is only a temporary
While new Energy Fund share¬
holders will be required to pur¬
chase
HanHnn
monf
recent
the
on
$10,000
Firm Nam**
liewrirmname
*
DALLAS, Texas—The corporate
of Dallas Union Securities
Company, Adolphus Tower, is now
name
Dallas Union Securities Co., Inc.
With Richard Harrison
(special to ths financial chronicle)
SACRAMENTO^Calif.—Earl L.
re- Jensen has become affiliated with
hy- Richard A. Harrison, Inc., 2209
in
16th Street.
The Commercial and Financial Chronicle
E2
.
.
.
Thursday; December 4, 1958
.
(2322)
I told to.. communist; nations, vWheqv: I: astronomical amounts. Ever-; in- 7
sounded like/a traveled through Europe recently, creasing expenditures have /been j
good sensible program to me, and I was chagrined to.discover that, accompanied by eypr- increasing ff
that, in my modest and unofficial rthe newspaper- of such countries, hatred- arid bitterness;.Coritmu^/f
France, Germany; ation of the cold war will create a' /
way, I would encourage it.
.77 •as .'Denmark,
roads
Continued from page 5
Mr.
our
agriculture.
7if
that this
.
;
i
/,
,
/V
.
Enough lor
Is the Globe Big
and
K
Austria and
England were unaiur crushing burden of/taxation that
U. S. Specialists Testify to
'•
mously critical; Pt pur Formosa-.
Soviet Progress '' '7
Strait policy. Our high govern¬
Meanwhile, make rid mistake
On this subject of see-for-your- ment officials can no longer visit,
abouft' this: every day : that the'
self trips, I should like to call the republics of South America,
arms
race continues,
the qhanceZ
attention to three distinguished without inciting riots. In Canada, of
mutual
destruction
,
.
Capitalism and Communism ?
.
•
spend on armaments, history, had dedicated his large
fortune to the promotion of peace
in fact, the more you have to
and
education, and I suggested delegations
spend. Then he quickly enumer¬
more
ated
you
half
dozen
a
itself,
mitted
and
for
has com¬ gie
ist.
the rapid
which
of
accomplishment
to
programs,
which the Soviet Union
that the Russians consider Carne¬
typical American capital¬
who
business¬
I told Mr. K that anyone
the pictured the American
man
labor are
maximum of money and
as a
as
encouraging
war prepara¬
of
specialists
tour
who
have visited the Soviet Union and
come
away
months.
headed
near
grows/,
neighbor and best cus¬
greater. Any day, by accident or V
by design, some fool, some fanatic/ .
tomer, the latest Federal election
impressed, in recent was won by the party that pro¬
steel
group 'was claimed its lack of warmth, if not
Edward T. Ryerson, its downright hostility, to the
some fumbler, may touch off
explosion that Will cause the
holocaust; ? Consider
the conse¬
even
The
by
retired chairman of the board of
\
f
the
United States.
quences from your personal standy
point. - One h yd fog en bomb ;
Cisler, President of Detrpit Edison U. "S. State Department Simulates
At the top of his agenda was a
dropped anywhere within 40 milesThe Ostrich in China Policy
Company, led the electric power
broad expansion of schools, col¬
of Detroit, whether in the lake or"
had
long advocated a working group. Prominent among the edu¬
We have elected to invite the on the land; will Obliterate every *
leges, and other educational facil¬
cational delegation was my long¬
enmity of the 600,000,000 Chinese / form of life in this great city arid
ities, requiring hundreds of thou¬ partnership between capital and
time friend Dr. T. Keith Glehnan, on the
sands of new buildings and addi¬ labor, and that I liked to have the
mainland; and have sub¬ reduce all its institutions to dust* •
men
and women who work for former member of the Atomic
stituted
for our old friendship and ashes.
tional teachers.
"
/
companies with which I am asso¬ Energy Commission, who not long with that proud and powerful na¬
Second came an ambitious hous¬
ciated become stockholders, as I ago left the presidency of Cleve¬
Friendship With Russia vs.
tion a futile alliance with Chiang
:
ing and home building program.
believed that the ownership
of; land's Case Institute of Technol¬
Cold and Hot Wars
"You will observe the great num¬
Kai-shek, an exiled has - been
American
industry
should
be ogy to become head of the new whom
ber of apartment houses that have
we
have
installed
and
Which course shall we choose?
National Space Agency.
been put up in Moscow," Mr. K widely diffused.
maintained on a neighboring is¬ Certainly the risk in a treaty of
Mr. K did not overlook the op¬
No one can conceivable write land at fantastic expense to the
said. "We have only started. We;
peace and friendship with the So¬
want every citizen of the Soviet portunity to inject good-humor- these men off as being weak in American taxpayer.
Thanks to viet Union is fraught with far less
Union to have a comfortable mod¬ edly at this point that while he the intellect or lacking in devo¬ the ostrich-like antics of pur State hazard to
humanity than either
ern home."
" -';
considered this
a
commendable tion to their country.
The ac¬ Department, few Americans have the cold war or the hot war.
/
counts they and those who accom¬ been
permitted
to go see for
Next Mr. K called attention to policy, in his country they did
Assume that we do reach an
even
better:
the people owned panied them have given of what themselves, what is happening in
important
developments
under¬
understanding with Russia. What,
way in the agricultural field, in everything. He went on to assert they saw can certainly be accept¬ the People's Republic of jChina. steps must we take at home to;
by their fellow We can take the word of such re¬ make
which he takes particular interest that he had no desire to try to ed as reliable
sure
that capitalism will ;
Americans.
While their reports; liable
and
distinguished1 Cana¬ flourish on the same globe that r and pride
because of his own change the form of government
of economics of were issued with restraint, they dians as Barnes Muir, head of the
farm background. He mentioned or the system
tion' in
'required..
order
to
sell
more
iron
,
Inland Steel Company.
Walker L.
coal and steel, misunderstood
the United States. I stated that I
ore,
.
-
u.
,
.
that he had opened up
America.
great areas
viet
He
Union
added that the So¬
was
eager
to live on
qf virgin territory. He wants to
expand that program, while also
introducing
the
most
modern
good terms with the United States,
agricultural methods on
States would stop our worldwide
denunciation of the Soviet sys¬
scientific
all farms, old
and
Also prominent
and
new.
on
Mr. K's list,
transportation plan calling
for new highways as well as sub¬
stantial additions and improve¬
ments to existing railroad facil¬
ities.
Large scale expansion of
Soviet
electric
generating
and;
transmitting facilities is also in
progress.
Attention is also being,
turned to the chemical industry,;
was
and
a
so on
down the list.
that
he
wished
the
United
tem, and cease to try to ring Rus¬
also holds communism?
all emphasize the great progress Royal Bank of Canada, and Dr> J.
Russia has made in the respective Tuzo Wilson, President tof tlte In¬
fields of steel, electric power and ternational Union of Geodesy and
education.
What is more, all of Geophysics, who have/ been- in
these
men
testify to the friend^
people.
sia with missile and bomber sites/
If visits like these
>
can
this
countries.
/
agitated State of mind; tion headed
by the President go
if the Soviet Unidn were able to
to -the Soviet Union? With Ameri¬
China
or
the progress of other]
The Soviet Union, Red
Africa
are
deter¬
We
civilizations.
ful
industrial
will
nothing/to fear :frofp
part of the vvorid if we con¬
have
any
centrate
(Neither of us raised the point,, ductive, would it not be worth¬ his fellow; bpsinessnien, on his/rea graphic mental image
while to have a political delega¬ turri to Canada, was to trade with
our own
r
mined to create their own success¬
tori upbuilding
capitalistic system. .
but I had
of
.
will, have to stop fuss-,
China, India and
year.
scientist alike testify to the
be pro¬
we
ing about
Banker * arid
tre¬
mendous advances of the Chinese
iri rill fields, Muir's injunction to
China
liness and kindness of the Russian
First
:
miss the opportunity of
own.
our
;5
'
time, I should like], *
to "ugfie/t that our government /;
build similar installations in Can¬
; NoW
let's consider
ca spending $5O,OOO,OOQ;O0O a year
ada and Mexico.)
for defense, and the fate of hu¬ natives to reaching a livable ac¬ quit subsidizing socialism in other
countries.
If/a,, riation forbids;
manity at Stake, surely the head s commodation with communism.
Does IT. S. Foreign Policy Follow
American .corporations or indivi¬
of .our government, with his finO Through the Pugwash conferences
The Election Returns?
"
duals to hrive /a firiancial interest
personality and his infinite cri-. I have for several years been try¬
I
told Mr. K that 1 had been
a
a.lifetime. ;
;
,/,.
/ ;
the, alter¬
pacity for friendship, can afford ing to promote understanding on
to make an attempt to deal di-. a private and; informal level be¬
rectly with his Russian counter¬ tween scientists and scholars.. of
East and West.
The proceedings
part on the ground.
and
conclusions of our. several
The ^GHobe IS Rigr Enough for
Pugyarih Conferences of Nuclear
At the
•
same
in one; of its natural resources or
.
Suggests U.S.-U.S.S.R.
Trade and -Friendship
Mr. K
"To
.
take
our
.
country from its
backward position of 40 years ago
to the modern ideal we hold for
lifetime
student
of
Russian
his¬
tory and Russian literature. In re¬
cent years,
I noted, I had enjoyed
meeting Russian scientists, schol¬
and others visiting
and, from my visit
Soviet Union, I had 'become
ars, journalists
North America
•
any tof its/other business institur
tioris, our,. jgov^'riment has no
business] /trirning /the American
taxpayers' money Oyer to that na¬
tion
to create
»
states
to -develop those natural
conduct those other
By this time, I think itinusttoe able to the heads of thie world's
convinced of the friendliness of abundantly clear to
businesses,
:
you that I major estates, as well as the Pope
the Russian people. I expressed
From
emphatically "believe the globe; is and/ the United Nations.
How We Can Make Our?
and
materials from the United the 'view that we ought to reach big enough for both capitalism President
Eisenhower,
I n d i a's
Capitalism Flourish
States could be "used in these vast friendship and ^understanding, and and communism.
For capitalism Prime Minister Nehru, The Vati¬
To begin with; all of lis, what-*
Soviet expansion programs, and that we Should trade with each, to flourish as I am convinced it can," Canada's Prime ( Minister Dieever our calling, are going to have
that there should -be profitable other, and I ventured to suggest can, though, 1'suggest that rapid fenbaker; Yugoslavia's President
to repledge. our allegiance to the
opportunities for trade between thata, in due course, the American and radical changes are required' Tito/ to name jU3t ,a few, have
old-fashioned credo Of joyful har<b our two countries. By engaging in industrialist, the American labor hot only in our international rela¬
come letters endorsing' the
pur¬
mutual trade, furthermore, he felt leader, and the American farmer tionships, but also in. our domestic' pose of the Conferences. When I work that .originaily made Ameri¬
demonstrate
that
that we might find a way of es¬ would
ivas
introduced
to
Premier ca great. We must give close at¬
they, industrial relationships.'
r
v
tention. to the physical fitness and
tablishing friendship between our' agree with me. Meanwhile, I sug¬
I have already had considerable; JChrushchev in Moscow; his first
the mental development of every /
two nations.
/ gested patience and forbearance to say about our freign policies. words were, 'T have personally;
on
the Russian part.
woman
arid child ] in the
read the Proceedings bf the Pug¬ man,
I also in¬ Let me
Then Mr. K made the observa¬
go further and suggest
'*
vited Mr. K to watch the election
wash Conferences, arid I want to. United States.
tion that I consider the most sig¬
that we
urgently need a new
returns carefully in November, to
Next we must search for further
thank you on behalf of the So¬
nificant <of the entire long dis¬
Secretary of "State.
Mr. Dulles
see if the American voters did not
viet people for bringing thd'scieri- and 'surer ways to ward off the
course. If by some means, he said,
goes gaily on gambling with the
express strong sentiment in favor
tists of the world together. It is depressions and recessions with
genuine cooperation and under¬
destiny of the world, without re/
of fresher and wiser foreign poli¬
ri highly ctohstructiye*fnbVfeJ'ft' \ which our economy iri; periodically
standing could be created between
straiht from -any quarter. Rejected
cies.^ 7
beset. Few if any of you will re¬
■'!
the Soviet Union and the United1
by the voters of his -own /state
Pugwash Scientists Warn • Against member the financial panics of
In the course of our discussion;
when he ran. for, office in New
States, if these two most power¬
Nuclear Annihilation 7
1907/1914 arid 1921. Some of you
ful nations the world has ever when I commented en Mr. K'S
York, and then elevated/tohigto
At the recent Third Pugwash will: recall, arid vividly, the de¬
seen could come to work together
ability to speak decisively for his office by • appointment, he evi¬
pression that began in 1929 and
in harmony, all of the political country, he replied emphatically;
dently is impervious to the" 1958 Conference of ZNuclerir Scientists,
disturbances in every other part rtAny policy I announce must first flection' returns, which his' in¬ 80 experts "gathered from 22. erist- took years lo Trin its course. Outof the world would be adjusted by- be 'discussed with; the cabinet and flammatory
ern arid
western nations taL con¬ Weak banking %ystem was the root
activities helped to
of our trouble then and, while
compromise and peaceful means, backed toy it.
Furthermore, we render "critastrophhic -for the Re¬ sider "The Dangers of the Atomic
have, strengthened
it some
instead of becoming the occasion make no decision unless we are' publican .Party.. He blithely courts' Age and What "Scientists Can Do" we
tor fomenting renewed bitterness sure it win have the support of the "Ultimate; world catastrophe tot About them:" "Bear in mind that since, we still have a distance to
go.
and hatred between the U.SA. the people." Mr. K added that the the' bomb,
without 'consultation rill that united these participants]
and the U.S.S.R.
Both of these cabinet "customarily meets several with even the Senate Foreign Re/ was that they were scientists and]
Black Friday, Oct. 18, 1929, has
times a week; and holds daily
giant nations* are,so .extensive
had . given much of; gone down in history as the fate/
lations Committee and the House that they
their' individual thought to the ful (day when: the stock markets
geographically and so richly'en¬ meetings in. times • of emergency. Foreign Affairri Committee. "' ■
dowed in natural resources that
In reply to my question, how
implications of modern Science started their downward pliinge.
tJ. S. Foreign FoRcy Has Lost
neither needs have much incen¬ can our two countries move to¬
for the* future of mankind* At the The following Monday/ pet/ 21,
International Friends*
— - conclusion of their
tive to impose en other countries.
meetings/ they^ When I ;was in Detroit for a cele-f
ward friendship and understand¬
BL the two giants agree, the rest ing/ Mr. K said that a first and
Let's -take an objective look -at reached, the unanimous conclusion bration of the 50th anniversary of
of the world will pose no major, important
step "would toe a good the present state of' our - inter-: that enough j atom and hydrogen: the invention of light, with such
problem.
This suggestion* I be¬ will visit from President Eisen¬ national relations. When I came bombs have now been Stockpiled familiar figures Vas -Thomas Alva
lieve, is realistic and' offers pro- hower to "the Soviet Union. Mr; to the United States' from my na¬ by both sides to blow all the-cities1 Edispn, Henry. Ford, and President
K thought it .would toe fruitful for- tive" Canada at/the beginning 'of off the face of the -earth and to Herbert Hoover,/word came .that
ise of a workable peace.
--.•»■
the President to determine
"the; the century, this was the? only annihilate all their inhabitants. panic had struck the markets/ The
Mr. K Hegrs That Capitalism
friendliness of the I Russian, peo¬ major nation: in the world with¬ They, f urther.agreed that there, is5 banks started failing all over one
v
Is Ideal for U. S.
or • military, another to .see which could sell.
ple and their/government for him¬ out a :single enemy. Sinee; then no ' defense, civil
For my part, I told Mr. K I
out their customers fastest, in aq
self, and to observe at first hand we have contrived to tread/on- the. against the bomb.
thought - capitalism had produced the progress.that the nation was toes bf. practically every country r
In the
absence
of an; under¬ effort to keep liquid. - This, of
excellent results in my. country, making. For his own
on earth/ We are Constantly -med—
part, Mr. K*.
standing./. between the capitalist' course, heightened the crisis.
^Be¬
and. would remain the ideal sys¬ said he would like to
pay a visit dling in both the internal: and rind the communist nations, tooth
fore thefensunig debacle was over,
tem for us. I, reminded him that to the United States and
external affairs of other/nations, sides will go on increasirrg their
Canada;
Andrew
Carnegie, perhaps the to see. for himself our .great -cities,, friendly and unfriendly.
lethal stockpiles. Twelve years of the stocks of sound companies bad
V*
xhosf successful steel man in our our industrial companies, our rail¬
Our' critics 'are
hot" ebnfiried' this cold war have already cost; shriveled almost to ^nothing,, and
and
for the labor of all of our people,";
Mr. K ;stated emphatically.
He
added that machinery, equipment:
it calls for unlimited capital
to the
Both Capitalism and Communism
Scientists have
been made
avail¬
prises
resources, or
.
•'
1
,
'
.
.
'
'
'
«
•
,
.
;
.
Volume 188
Number 5800
ss
had ground
standstill.-';w's.
.
almost
.vf:! Two-examples;from
lustrations.
industrial like
stock
a
share.
il¬
great
deal' of importance to the
demonstration by the free countries of Asia of a
oapacityA;to improve the living standards of their
people. We believe that; unless that capacity is
•> '.}*■?#. zi/J
demonstrated there will be a
very. gfeat danger that in des¬
peration they will say, 'Cruel
sf-S and ruthless} as the Communist
y^ methodv is, 'we';would accept it
1 rather ;thah stay in continuing
h^ednpmiestagnation.'
%^T^oW" there is no reason that
we see why they should stay in
continued economic stagnation.
Ip freedom, they should be able
to find the ways to raise their
living standards. It has always
got to be done primarily by the
*!**■' 'V
efforts of the people themselves.
But also there is need to supplement that, and the
Colombo Plan is a way of cbordinating the efforts
in that respect of the more mature countries that
have: capital resources, coordinate their efforts in
these; programs for the countries of South and
Southeast Asia.*
Secretary of State John Foster
-
market around;-
a
share, sold doWn to $7
The Stock
of the
"i
a
,
ative old National
Public
my
as
a
Bherwm-Williarris, "
which today -has
$190
of
(2323)
conserv¬
Refining Com-
;
Ipany,-whose -assets in}, 1929; con- :
sisted largely of cash and govern-
"We attach
a
' great
K
not
'attempting to prove
there.--^001)1^ ;jhUye^;^e<^ri"^.Rp
am
R829 readiiistmeht' 1 f
db
nor.:
Piedmont Natural Gas Company
Piedmont
the
-h
firmly believe we Could have'}
the ^depth's to/which the
avoided
combination
own
We
.
powerful
banks';;: "'y'"'■
V,,'"
-i*
IX- IS.
'•
,
Needs
** *.,y
Rapproachement
'
* '
i"
Now I come to what I consider
the most important step we must
take to 'give our capitalism fresh
impetus.
JuSt as we need a
paroachement between;' east
west on.' the international
rap-
and I
.
scene,}
We need
Warmer
a
understanding
*
and
farmer.
the full ap- .*■'
cooperation of the ,
.
-
-
"
.
*
f
Tb get started in this direction, - '
f suggest that, in every important V'
in / the
United
States, ~
.
a
meeting at least
between, top
month
a
*'
.
4
one
and
..
v..
~
,
I;—..
5
'
~
.
straint
' Wisdom
required
are
and re-
the
in
is
fastest
growing areas
country, both lb population
industrial
area
with their
the
cents
black
with
earnings
share
plus a taafc
credit (resulting from a loss carryforward) of; 40 cents.
In 1954,
a
year
$1.17
earnings were stepped up to
plus a credit of 28 cents.
In 1956 with full taxes how
a
24,000 square milfes lfead\Thus, if special factors be elimi-
hated from share earnings, they
population, income and bush* have shown a steady increase
ness
volume.
However,' 70%.- of from 50 cents in 1953 to perhaps
the area remains in small farm $1.-70
(on h
basis of
normal
in
lands, and the farmers furnish a
fine supply of patt-time workers.
■
.■
weather) for 1958.
Another favorable factor
last year or so
in the.
has been the increased industrial growth of the
Carolinas, despite the recession;
an important contributing factor
was
the more liberal tax
law
tiles, furniture and. forest products, chemical end allied products,
ceramics and glass, tubacco processing and mandfeCture rtfid food
products.
Agricultural products enacted in both states. The corninclude cotftoh, corn, tobacco, hay, pany expects that its rapid growth
fruit and vegetables'; one county will continue and that plant will
alone in 1953-54 produced more about double in value over the
peaches than the Whole State of next five years.
.Georgia.
j
■>
]M0 dividends were paid until
,
.
being}
phid, earnings were $1.32, and for
1957, $1.48.
For the 12 months
fended June r 30, 1958, earnings
development.
has
any equal-sized areas in the South
"...
,
,
The company serves about 51,-
,
both sides.
on
in
50
j
reached $1.96 and President Dun-.
great abun-. cap estimates about $1.85 for the.
dance of hydro power, which re- calendar year 1958 — of which
suited
in mahy .factories' being about 15-20 cents are extra earn-■
located thefe in elarlier days.
As ings resulting from the very cold.
a
result the Piedmont CarolinaS weather in the last heating season,
"
.
Burlington
in
andr Greenville,
and
Anderson
Carolina.
This section
The
•agement and labor leaders, to dis¬
cuss their .mutual problems in a
friendly spirit.
of
in the
Continued jropi pctige 1U
man-''
popu-
was
of
Industries in the area include tex-
«
t
Carolina;
South
"By the efforts of the people themselves" it will
he d.on?e, for 'the1 most part, «or it will »ot be done.
Let's, not forget that (simple, but vital fact.
industry
once
"
•
a
and
Spartanburg
.
,
there should be
North
■■
Dulles. I}
„;.i/
1
domestic front, with
Carolina, which has
Thomasville i and
—
between capital ahd labor On the
•fSJoval
r
serves
665,000 and includes the
Charibfte, Winston-Salem, they earned 95 cents plus a tax
Greensboro, High Point, Salisbury, credit of 88 cents. In the next
*'
-
-
.
Gas
of North
lation "of
*•
Between Capital and Labor
v
area
cities of
v
;of weak hanks and
emotionalism ^carried us..;
still need larger and more
our
Natural
Piedmont
South
"
ftiife
Utility Securities
By *OWEN ELY
'
I
iS
a
.
The
Chronicle
The'Commercial and Financial
to
among
companies will suffice
own
v
.
500
customers,
1956 when quarterly payments at
including 124 In- the rath of 20 cents
were
initiated.
This rate has been increased twice
this year to
the present 25 cents.
fully ; learned some lesson
The defeat not only of this
measure, but also of tthe
dates who went d w
With ft.
*:<
.«
Era
of
that
me
we
talism
conclude
optimis-
an
Carry American capi-
can
to
on
new
heights.- We need
additional leadership and, with all
due credit to the politician
who
-
look
must
beyond
these
sources.
I should like
sentitig
the
ments of
dynamic capitalism.
to
old
"nomi-
indispensable
ele.
Let
the teacher, the preacher and the
schalar add their best thinking,
./]
and i know we can look forward
to
a
new
talism
taiian
i.
of enlightened capi-
era
that will
mat wui
excite tfte
»dmiadmi-
ration *of the entire world.
N.
Robert
J.
L.
T^ikar
is
now
associated, with
Richard .E, Kohn & Co.,^30 Clinton
Street, members of the New York
Stock- Exchange,
Stock Exchange,
Representative.
as
as
as
whnlp
£>
Customers
Customers
a
a
contract
in
^ common stock has rcccntty
»>;
•*
/'
plants. Reynolds Tobacco recently h
erlnauntp/arnimS
A glance at the historical rec- announced plans for a new $25 2oi/ to vieid o5%
^ DriVpord of business fluctuations since million plant.
earnings
ratio
based
on
$185
The eompahy began its career »^ap^mate
isl' wlSS
continuation^ of . a high level of faction of ^8^
^as the by taking over the gas system sfeems reasonable for a ''growth
activity tin this sector,at least dp sh1^t®sJ1^0"f
15mn i;? 011 Duke Power which served 14 utility," although allowance must
j£jthe sec°n(d qu;arter of nexit year, wh:ich also wasi of ■the same dura- cities ^11(j conversion to natural be made for the weather stimulus
The .recent improvement m resi- tion. Although the size of the de- gas was compieted in 11952. Pied- to earnings.
dential
construction
centered
cline
;m
BOSTON,
has
Mass.
—
Albert
production from the peak
wrncn (about 5,000 mcf). This
SSffi rats 1 Ve
ti.
1
®
Pa 1 °
•
Dart
the
of
of
?h}
ine
therti^^ri
characterized
T
..
,
Manager
been
o^^Burtalb
of-
-
.
Government
and
Government
at
the greater
many
neriod
Fi-
Important iteai
ig
,
expenditures have
-
in business 4n recent years,
jjkeiy
^he
t# -be more
current recovery
and con-
controlled
sefvative
.'Although,
this
against
annual rates.
from
the
component.
Powell Adds
FAYETTEVILLE,
:
to
N.
Staff
Federal
C.—Robt.
higher
*
D,
Baskervill
has
been
added
to 3%
Bowling Corp.
Common Slock Offered
A modern peak: shaving Excess 'funds will be added to the
.
These ib-
state
budget .-and
„
and focal
Prospects
.purchases,
j
-II
to
Plant has been completed/
»wnlw
has
of-
may
run
out
before
0f steam
..."
arc
that
of
because
defense
_!
•
j.
■ness'
activity,
re-'
vitalized
mterruptible basis at competitive centers. The company expects to
Prices, which helps to maintain a finance the balance of equipment'
good year-round load factor.
required in its bowling centers-
by incurring commitments with a
by
^
renresentfoa
qf'sg^/lnd^he
TsaturatloiJ leading manufacturer of bowlmg
company
it to raise this to 100%.
a full-fledged expan^ tke probability is that busi-
current
large industrial tustomers on an sitlon of additional bowling
back*
creases,, however, stemmed pri- deveioPs in
marily
fice.
Am. Int.
.
66MViofZhi
1BCreaSe ? > rises
19D9.
nostwar
lion,
became associ-
was quad-
;
The working capital of the company
in- and will be available for any
ii^ IS ™t®„ It
activity through credit, a factor "eased 40% since 1952. The ex- proper corporate purpose, includyear ^
ago. it tHat ^reatlv eontrtihuted to raoid cess of summer gas is sold to ing without limitation, the acquipe
VA. a ?
ctreatlv contributed'to rapid
..
Mr
who
small
,
C. Morton & Co., 131 "State Street,
_
a
rupled in two years and has since
expanded in each off the four past' ground, the possibility should not
quarters by $1.0 billion to $2.0 b'il- be. excluded that the recovery
Brown,
-obtained
•In addition to the
malion has been funning at-con- vironment wneie .excess pioauc
+Ua
share.
'siderabiy? lower levels, 'shoft-ruiv five capacity is greater in relation ^
The company will use the pro¬
siaeraoiy^ower ievei>, smut- uu
'
cost of changeover to natural gas,
factors apparently determine flue- to output at tne peaK oi tne latest
.
• ■
^ rrrainc. and
ceeds
from • 420,000
shares
for
.residential1 building, expansion than in the previous J™ch lepairing of mains andmeThus it would not-1 be surprising declines, while Wth consumiition tew was found necessary, but the opening
expenses in connection
tn
hoiiKine'
starts
riext- vear' und
housing demand essentially company has now Teduced the with the eight bowling centers
JuLiuf*.
ilr tbpSapUf are lackine the exuberance which percentage of -lost gas from 26% contemplated to be operated by it.
A.
join tea
viceappointed VicePresident "in charge of sales of B.
nasi
inai auuui
xvjr ^e 1iaie.SL .°ip.
the heating season of 1959-60. The Weston ^^o.^Inc^onYDec. Af
}5 miTlion of tiew dwellings lhave business were e^^ely eliminated. cogt of gas at 10O% ioad factor offered 700,000 shares of Ameribeen compieted since the end of Thus, the r^W&yundw way ig nQW about 33 4 cents per mcf. can International Bowling Corp.
afeon"' vlronment where excess produc- ' Ih - 1951-52 the company was 10 cents par common at $3 per
lUdtlUH uah uccii i uiiiiiiig €Xv w-'i
v
ii
j
Inventories
been
jn
aemaira ior nomes.
,
Brown
in
market conditions and in the^ in- man me oecnnes roi
.eligibilityrequirements ofi; occurred^in obchyOf
.tner in
B. C. Morton Officer
normally
MUdUC^vUl if
Quarter oi
whole as compared
in 1^957. Advances
awards, observed in
POtat
a
cop
With Richard E. Kelm
NEWARK,
ac
with 1,040,000
Capitalism
Let
vPaf
yeat
a
for:■-wiU^PWttalbiy. stajrtt m tne tirst service textile, chemical and paper
eating about- 1,1S0 000 starts
ihn
the
j
Enlightened
^ jviajor warehouses of seven steel warranted, assuming
fjrms at.e located in'Charlotte to cold winter.
jfrfoderate accumulation of stocks
recently to levels ifi'di-
ness> roise
Ntew V S. Leadership Needed for
New
1"; \me /W" expanaiug -mi».
winter ahd the .contraction in buri/f
the
expects
Gas mr-
conditioning is now being pushed by the company's subsidiaries for
r® ^L'itJI.r^evoeafo/next automatic pinsetters, 40 bowling
S Gas" for
l^es and auxiliary equipment at
expansive forces at work, water-heating are'now being used
continue to advance to higher
in 90% of new homes where gas
ir.
;
equipment. As of Sept. 15, 1958,
commitments were entered into,
oTToiloKln
PmrnntiOc
in
10^*7
Ramsey, N. J. located at the intersection of Route 17 and Franklin
™
-JJiii
ml
the staff of -Powell and -Company,
120 Anderson Street.
Iftc.,
N. St Clair Kramer
N.
with
York
St.
Clair Kramer, associated
Glore, Forgan & Co., New
City, passed away Nov. 26
ernmerit outlays
are
likely to con-
timistic
to $3.0 billion annual rate.
Inventories, which together with
vestment boom, the
riod
Francis I. du
Pont & Co.
expectations
During the difficult early .years
leases will contain approximately
lanes,
A. Winston,
Alkow & Co., Inc.,-
in- the equity ratio ranged between an aggregate of 256
prosperity pe- 5% and 21%, but as of ^cent date
Associated with J.
a new
will probably be prolonged,
fllnei.aSPrior to° joining ^lore' g°vernmen1- expenditures were the but the
Forgan & Co. he had been with
business
tinue to exPand at a $2-5 b'niion created by it generate
f^frer? <Sock G12%e and
common
& Co., Inc. are:
economy may be heading st0ck equity 25%.
Netherlands Securities
main factors in the present busi- ior new and more serious trouble
in 1&5S, with conversion to nat- Bruno-Lenchner, Inc.
ness
upturn, probably will ex- in the not too distant future.
ural gas completed, the company milye Bros.
Co., Inc.,
and Ver-
£
4*
O
JO
O
o
P
O
i
s
i
o
£
*o
8
«—•
-i
3
o*
2
<T>
CO
•- deicson. --.vY,
PR0A ILDGAB0NDSIN Registr*aon$5S0C,PB(rMIougancdmcshBphdylsefSTfzuoMI1$590,obtreoi"gnaips•trnehclysd.l, I19sS7,ubrajemt,finaohpydrpeinctSlBAchoMldgMI(w1b9r8ue,ot0d)inaPasmf¬.3hhtyosyreieLAClIgn,ubcnasdtag, biforFsnSeeaxdpdtmsiltn Inv1'e:stm•ifbofNatuiYCrnaeokldgswrk,Cncpdlcstyi1. CoPBnArs(tSCughac9oeair'57umdtf09)lictpnsogn,m¬IpPywBbholraedtfidclfuuehvsasnjry
"'••. sretagculnoid,t
CONSTRUI SSCH0LBUTAE *'Paym-nedt(inJIDftIsecmorah-ahns)ubdrl$S5B0Ah,tuielderof.ngSCiCaatlcnoafomrofaefrtt,STtINYeahFoagseuenfwrsk.BACbdioo$nunion1pddd,is0as.f RPedromvpistnCfoPeBnsraotoDrugtencoucaiadrnfmmt.isdbrgD(I1bpco9hamp7,nbreit8,o)inthaaacnoreuddsdftn.tSsoueabjpempctiionsn,dhatpyrhmeraeamncfroteulfbrtesdaowhmnwneptiolnkksCSFSheoat'a©ciecfminsfod,bIsvchteaularheplred,;l inbStctiepoharutyuaspsseoll,n LfeogarlitybotnhwmrqdueislmsnfbMosaatnavecridhkugetriVmob;ls- PSuearp•con.sdityBis"SoPtrhnugndeadmer,AXCtrothoiVciaolefIfarib-glgatrlsGtFShTehunutoaeairedanlfhld.Ibpfinoncdasrlsrze
C,0 ALIFORNA3B<OaANn%DdS
TExeam•pxt,ion Intacoxuemnexdiesstrng
:
....
personal
STATE
'
'7;,.
Bu;ildng iwnohorle thaemrouontf 19a8r1e; interst ofnoticfe irnedmption, thredemeyd,
Princaipnadl SeIpt m)ber Treasouf;rtehe inctlhudeing
opinf
•.
;
HO
4%%
-
State
and
%,
a
any
as
I,
;1
the
tion
thes other Construci S4eco.tio5nf counsel 19o5uft bopofaytmhent
,
\
t
v.
A
beli ve certain 1.
Y(
State
We
and
In
:
of. of
Act
and
ion
J
"
•
.
•
;
•
, ' •v«.
•
•
•
•
■
■;
or
Yield Pricet
Due
•
•
•
-
r
•;
•
•
•
•
•
•-
*
._
0
_
i
-
-
•
.
V
'
v
-
2.45% 2.70% 2.85% 3.00% 3.10% 3.15% 3.20% 3.20% 3.25% 3.30% 3.35% 3.40% 3.45% : 100 100 3.55% 3.55% 3.60% 3.60% 3.60% 3.65% 3.65% 3.65% 3.65%
100
1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 77 1978 1979 1980
19
cal and
to
on
1981* 1r982* 1983* 1984* 1985*
- subject Inter st,
85
Bonds, incl.
BAuildng
Series
S
Scho l
Due
PRICESi(bntAcaeordused)*.PBrognadms, 1in95c-8lv.3,
ARMAOTUNETSS,, MAYOAITENURLIRDDESS
,
AtConsruci 1958D1ecmb,er
*t"<•. 1Sof*e5ris, D1;ecmber
,.
*
tt
Act
*.
:
Amount
5%
5
5
5
5
5
43/4
3%
*
3V2
3%
3%
3%
3%
3%
3%
3%
3%
y2
3
3%
y2
3
3%
3%
3%
3%
Dua
,
ac rued
3y2
$1,60 , 0 1,60 , 0 1',*60■, 0 1,60 , 0 1,60 , 0 1,80 , 0 1,80 , 0 1,80 , 0 1,80 , 0 1,80 , 0 2,0 ,0 2,0 0 12,0 ,0 21,0 ,0 '2,0 ,0 *2, 0 , 0 2, 0 , 0 2, 0 , 0 2, 0 , 0 2,*0 , 0 2,40*, 0 2,40 , 0 2,40 , 0 2,40,0 2,40 , 0
i
maturiy. 1m98atu-ring plus
to
fYield
•Bonds par,
of
*
'
or Pricef
Yield
Duo
Coupon
s
1.80% 2.20% 2.45% 2.70% 2.85% 3.00% 3.00% 3.10% 3.15% 3.20% 3.25% 3.30% 3.35% 3.40% 3.45% 100 100 100 3.55% 3.55% 3.60% 3.60% 3.60% 3.65% 3.65%
1959 1960 1961 1962 1963 1964 1965 1966 1967 1968
1969; 1970 197K 1972 1973 1974 1975 1976 1977 1978 1979* 1980* 1981 1982* 1983*
*
Rate
Dated
,
State
Coupon
Rate
Dated
State
IS UES,
D1,1ec9m5b8er 1,M19a6rc-h85,
-
•'.*
w
Amount
$1,60 , 0 1,60 , 0 1,60 , 0 1,60 , 0 1,60 , 0 1/80 , 0 .1,80 t,80 ,0 1,80 , 0 1,80 , 0 2,0 ,0 2,0 ,0 i,0 0, 0 2,0 ,0 2,0 ,0 2, 0 , 0 2, 0 ,0 2, 0 ,0 2, 0 , 0 2, 0 , 0 2,40 , 0 2,40 ' 2,40 ,0 2,40 , 0 2,40 , 0
1
1m9a7stuuobr-ijn8g3cpInalctuearursnedsdD,e11c9smc7brieb,8re
cal
•Bonds par, after
at
<
2
5
O
a
C
CO CO
Cn
cr
fd
p
O
3
o
3"
CO
-r
i-i
3
o
w
8
<P»t
ar
to
3
'
Bank
P&aCe obo.dy
Co. Incorpated
Hutzler (Incorpate,d)
NBationkl
CGF&-oClo.ragaen.,
Co.
Baird
ft
&
Brds.
Sftutra s
W.
S.
PldiaelMa
The
&
Dread
JfNCouvhtoen.
CrNBTaatiounnaskdlt hOica#go
Oregon White,
Goldman,
California
fTBCICInnlytoocch..,
of
First
Los
The
fcBSisAL(CuDc1tp2u3Eorhohaaii9nvlvddiedns5spw4ueft¬7oef,nrgXACrnht»Vicc--lIflSt"goeblnimyaerfb'sfituabhhsoradnyghitttesanlaesubeunlciedgr,Snshchodrvpmoqhfidl¬,ybbbtTeNocu6f1wanavte9mizs5.d,iStbneoaswmruaytc,'ra';~e■•cidv-.ng SNBecaurtioyn-Fksl
City
Blunt
Irving
&tSuart
.fsi;lBBAuoinddnsg,CSoedcotei}-na-n1f8 avnda,legliydrbi FStthuaonneefdd,,UnterKtshe, isrtvanueebintothenoardenss opacrhoirvdlng
The
;
CMode.l,
Dtft
t mar
Industrial
Wftsil ton
R.
Stern Simons BftLJAHfdoegtli.lne NBaationnkal
CMercanotH-.
SftaCchwobch.er Elftlis
Lftundborg
Halsey,
FiNBaatironsktl Cho•ica-gfo
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26
The Commercial and Financial Chronicle
<2326)
1^4s We Sec jit
almost inevitably raise them. What is
haviqg
more, a growing proportion of the people of the country
appear to be convinced that inflation is "inevitable. -A ~
great deal of the resistance to excesses of one sort or an¬
other which bring serious inflation seem to be melting
away.
'
• : :
:
Many Prescriptions
/
.....
.
and
requires
from first
,?v
from
practical
men
to
who
a
The second very
elementary truth which must never
Is that these relationships may be and
usually are affected by many and varied types of circum¬
stances or events. No one in his
right senses would deny
that Federal Reserve
policy, gold policies, foreign trade
restrictions, or most of the other factors commonly men¬
tioned are all among the causes of
changes in the demandsupply relationships. But all too many of us are inclined
be lost to sight
to
leave
the
matter
there.
The
truth
is
that
a
much
broader view is required if we are to understand the basic
causes of the
inflationary dangers that lurk ahead.
A society which
produces ,just the goods that the
people want and are willing to buy, and in which the pur¬
chasing power of the people Is that which grows out of the
production and distribution of these goods and services—
without supplementation
by arbitrary creation of funds
through the banking or credit system or by government—
could have
which
no
no
such
thing.as inflation. Production of things
wants
(at prices Commensurate with costs
production) and the compensation of the producers in
part at least with funds arbitrarily created
through the
Central and commercial
hanking systems inevitably throw
supply and demand for other types of goods out of balance.
Production of goods which do not
go into the marketdefense materiel; for
example, with funds not withdrawn
one
of
from current income is another
certain disturber of eco¬
nomic balance.
Monopolistic practices which enable one
element or a limited number of
elements in the popula¬
tion to take more of current
production than they put into
it is another factor which must
throw economic relation¬
ships awry.
°n.e
particularly unfortunate aspect of these matters
the circumstance that the
consequences of economic sins
live long after the
commission of the sin. Thus it is that
funds
arbitrarily created for war purposes or for New
Deal-like programs stay in existence and
may at any
moment be utilized
by their owners for the purchase of
current output, fit is for this
reason that inflation
may
.
pot rising, but may
son
even
oven
when money
supply 4s
be declining. And it is for this
rea¬
that inflation
may occur at a pace more rapid than
might be
expected from
any
given
increase in money sup¬
dropped
are
The
and
automobiles,
during the past
more
answers
tion
and
durable
iini
1957-58 Downturn?
ags^
Lheicori-Various
the v: second
quarter
a
and
equipment spending.
While surveys had indicated that
a downturn in these
outlays could
anticipated, few
be so abrupt.
vestments
>
believed it
Capital in-
climbed at almost
un-
believable, rates during .1955 and
1956 and they had reached, by the
third quarter-of 1957, an annual
rate of $37.75 billion, or 48% above
the first quarter
1955 level.
It
unreasonable
was
to
assume
conseouence
expansiony
such
'
From
J950
through
thp
From
1950, through
the third
third
quarter of last year, almost onequarter of a trillion dollars had
gone to increase the nation's produotive oononiftr
patiacitv
Wo
Wp
hart
ethT
onrL^
cninvcrt
local governments, : These funds will be in the f orm of suonitems as < interest payments on
Government debt, subsidies, un-employment payments, and other
I.and
pi nts
*as
grants—in—aid
fro-m
c7ntro?s.
ahj
cession
.
review
.
of
the1 forces
.u
..
.
that
.
,
^
.
.
of last ^eai should make
VL iasL year SIlt>UAa maKe it ^clear
and
fV
.
we
were
now
1955, industry was ^ a serious depression. .;Af
operating at approximately 92% time' Jhe months That "were ^head
capacity; by the end of 1956 )vera to offer an excell^ltopporthis had dropped to 86% and by the tunity to test our abilityrtovkeep
third quarter of last year, it fell the contraction phase of the bpfeibelow 80%. As business watched,!ness cycle within bounds. f Coma
larger and larger share of its pensatory fiscal policy, monetary
plant being placed in the "unused" pmmy ail(t the automatic funccategory, it became apparent to > tionmg of the built-in stabilizersmany businesses that some of the were att to take their place in'Our
plans for increasing
capacity efforts to stem the downtuim.. *
.
downturns
the
force
.
.
in
upturn
reduction in industrial production,
we
,,
^
P°int
October
our
it
was-at
.
wneie
we
niately 7% of
-
the
anm.ovi
na«
approxi
civilian labor
unemployed,
the index aof
wa<7 down
industrial
The; United
were
billion
rate
of
$3.1
in the first quarter
this rate increased rapidly
$9.5 billion.
(3) The decrease in non-farm
and
of 1958,
to
income that occurred in September
of
cline
last year.
in
income
While this dewas
due
to
a
17
r._i„xc
down
$7
|n
fo®
^
fiscal >59 it wtn be necessary
1he Federal Government to
Sp^nd
approximately $12
billion
than it will take away from
public in the form of taxes
and
miscellaneous
levies.
The
more
Treasury
Will have
to seek
new
fun(js to finance these outlays and
not planned to obtain
through increased Taxes, it
<vin be necessary to either 'create
s^ce it is
ihem
new
money
or
to ^stimulate
the
.private sectors'propensity to save.
ment-is the behavior t>f plant
and
equipment expenditures. The
latest survey of business plans for
snpn^m?
equipment spending
by the Department of
Commerce and the Securities &
onrt
and
conducted
August peak, expenJitures
billion
on
a
sea-
sonally adjusted annual basis from
jng
upward.
operating
ferred
win be again movWith business still
well
capacity
below
the
level,
it
is
pre-
not
likely that there will be a capital
the precedln« thlrd. garter peak apenJing boora anything like the
$22.1 billion. With this situa- 1955^57 period. However, the. imtion in mind, we need to look provement in sales which has oc..
„
working
position
to
a
* W
+.i.
at the forces that
traption
dhases of
durables, such
ifc
.
17 polnts from
decrease in employment, it weakened
consumer
markets.
Purconsumer
Treasury De-
Exchange Commission indicated
AlltfllUthat by the end of this year, these
an^ corporate profits after taxes
annual
States
nroduction
clined
an
f
All of this adds up 4o the fact
„7orif
plant
our
consuming more than we
producing. Thus, in the last
quarter of 1957, inventories deat
^
.
history.: When
began
,
.
were
were
$3
around
♦
.
producers' sales turned
sharply downward. This was soon
followed by an even more drastic
consequence, by
up
May
or
perhaps Tune ^of 7 t>io«i ir«ninm»ni
Plant-Equipment Expenditures
y ar' ^
corner ^ad- been - >pjie seccm(j force ^bringing us
turned, ending one of the briefest back to a position of full employ..
last year,
a
be
the average for 1959.
on
AMv,m
partment has estimated that dm-
brink
the
on:
of
As
local levels of gov-
than any rolling readjust- that 'the total impact of govern^7 a.^ _inventory^cessihn. ^en< upbn business during the
'
as thauSh~tne
^ ip.g year will be bolstering;
of
consuming. Then in July, of
,
various
ernment;r* will
1
essary44,ingred^e!?ts11^)
coming
grants-ia-aid from the Fed-
the decline in business ^y the
,
during . 'the
proximately $ly2 billion, it is reasonable to expect that total outlays
:
-
uh5
were
,'
eral Government will increase ap-
way."
This
I
.
1953-54 recession, we had been
producing more goods than we
•
-
iAdd to this the expectation
plant operating at anything close/ 7^,
to what might be considered a backlog of demand csnused by tbe
preferred rate. Productive capac¬ w£r,eiSwn
TT
,Thlrt,fe=:J\''d
World War II had beeir satisfied
ity simply outstripped demand.
should be postponed.
(2) The
rapid
liquidation
of
inventories. Since the end of the
v.:
•
billion in such ex-
least
Pe"ditures
The
more
end
*§tate
to
programs
local governments.
and it became hiore and more dif-
the
^
individuals, business and state
S nL™^ SriSf
J November 15, hfterthe Pe
was well on Its
ficultfor business to keep its total
at
.
.
.
that the recession had.alipe nec- billion
essary
ingredients
to
make
it
.-lin
This is illustrated by the fact that,
outlays to
<increase m the funds transferred.
long sustained period of^ Mgh
level-expenditures for this purpose
a
in
increase
purchase goods and services there
will be a $3 billion ^o $4 billion
rL it lln'at
o,utp
monetary
/"T"11'
of
-
■
y® p
3
In addition to the Federal Gov¬
which
^n+
that
rate
a
-*
ernment's
irF^h^and
notcapmjelbazis
feH
c
at
'
Expenditure Are Up
tbat monetar/TJohcy influences
State and Iocal < government
tu?nine DOints then the Federar expenditures have : consistently
r™r g P°2 beTbsMv^hf .^>?oved upwal'd'as oui ®«>u,at?n
Se iTAumt
WiW and our,--demands for
theTscount rafe was ra^dlmm better and more hea? ^ u°m"
3% ?o 3%% iust J^anv of7hl amities have increased. -Highway
Sicators werl turning down! Programs, hospital programs, puto^d'rt %his Tncrease^as stroire?v J1C sch°o1 Programs,
J
th5 Aoii^cll 'nf Ern building programs and public util™m?c Advisors huTIt wls rel ity Programs seem to assure us
££Y^s'Pr~"[ ,
™as
that there will be aP increase of
business could Or would ™nUnue
indefinitely
te
oSto^fheBOT-
1
Ib^
p
em
then
and
stuffs, cotton and metals and,
..
plant
would
^
The
impoSc^waf'th|bld«hnea3li
be
Q<iQ:-'
1
Sl^^lrlase
mo^ti^S^rchase'
in
future.
.
in
o&ScS-'
<4) Last year national" security
expenditures readied their
•"
.
?
soft.
*
What Did Bring on the
to
£
commodities and thejiew space
market
'(5) The drop in our exports.
relatively large" decline in
trends in- exports
to
Europe -and
Japan
placed ai major burden on food-
the probable
expected
are
195fiftb
remained
sumer
to these questions
the months ahead.
they
•
picked up primarily
unemployment payments,
■,
have already tutnedA up¬
year than in any Other po^Wbrld
War IV period.
While vllfcdihes
should give us a..little, clearer picture of our current business situa-
is
proceed in times like these
questions
appliances
brought the
halt
anfl
..
to bring
,
us
con-
arfi
,
..back
„ow
,
to
of full employment.
•
-
declined moderately through
(1) What were the forces .that first quarter of this year~^
brought on the 1957-58 recession? though the dollar decline m such
(2) What are the forces cur- expenditures was small, less than
rently leading us back to a posi- $2 billion, there was a great $eal
tion of full employment?
of talk about reducing goveim(3) Are we in for more infla- ment outlays and this, in" ttfrn,
tion and a continued decline in served as a
psychological depressthe value of the dollar?
ant on businesses planning for the
suggest.
A Vital Truth
the
raised by those
genuinely concerned with
what the future might hold. The
most any one person can hope to
accomplish in the face of the numerous complexities is
to throw
just a little light upon the total
problem. This is my goal at this
time and it Will be done by attempting to answer the following
three questions:
:
of business who have
good thing if the rank and file of the
people would sit 'down and do a little calm and careful
thinking for themselves about this thing we call the
danger of inflation, "which in the public press and else¬
where is far too *often discussed almost exclusively in
terms of gold, Federal Reserve policy, labor union ex¬
cesses, and alleged lack of competition among industrial
concerns. Let us not
forget that prices are still determined
by demand and'supply relationships. Any factor which
tends to raise or lower such prices must take effect
through changes in these relationships between demand
and supply. It would appear that such elementary truisms
would not need repetition at this or any other time, but
evidence enough exists that all too many current com¬
mentators tend to forget or overlook this simple fact.
passed by Congress, Federal Govit^-erninent purchases pflgobds and
(
be given Tas
,
approved by Con-
was
ward ;.and
proved themselves exceptionally able in the field of pri¬
industry. Few if any of these suggestions are com¬
plete or fully rounded, and most of them seem to us to
remain too much in the realm of the vague and uncertain.
Such remedies as "cooperation" among businessmen, gov¬
ernment and labor often leave open the highly important
question of just what should be jointly sought. Some ate
quite unrealistic inasmuch as they demand things of gov¬
ernment which government is not at all likely to do so
long as popular demand does not insist upon it. At other
times the demand is for steps by businessmen or wage
earners which competitive conditions do not require or
It would be
^
answers can
-
vitniirft
fi, .services
vate
even
-rna
programs
*'r
and clear-cut
is required-under the
grass-.7 -7'x.3;,7,
^73.;- As. " a -resuita of -^special ; * acts 1
K.-'i
L
Federal;
Since 'the
^
of
activities
the
i
V
Of course, among
come
listed
be
?-4haXitriize Airriduptinn 4»r\W»irtP finrt
production, income and
^^employment,- a : Variety of new
page
.
the economic doctors each has his
own preventive. A number of business leaders of late have
had something to say about how inflation ought to be
prevented. Some of these prescriptions come from learned
men
like Professor Burns of Columbia University, and
-
.
[' ''t
Continued
Position of Full'
a
of forces
must
basic changes in our
some
^
some
Us to
elusion that avoidance of inflation in the
years t© come iSi goverhment.
a much more difficult task than is
commonly suppos€d^ :;G^4ePime^t
have been
.
Thursday, December 4, 1958
.
What Are the ForcesHetiirnliiff
ply. This is the essential meaning of changes in #he. rate
of deposit turnover at the commercial banks.
When thethoughtfulman has turned these
aijd similar
facts over carefully m his
mind, he is driven to "the con-
Continued from first page
.
.
a
curred in many lines, the upturn
in employment, the increase in
industrial production, and the recent upturn
the
in new orders in both
durable
and
non
-
durable
Volume 188
Number-5800
.
.
TheCommercial and Financial Chronicle
.
(2327)
unemploynient; almost ; exclusively to the wide¬
decline, we still have spread publicity that has been
; modernize
or; to ; expand: .their approximately 7}% bf our civilian given to the expected $12 billion
capital plantJ Tf plant and equip- : labor;'force oi& - of ! work.;- We deficit of the Federal Govern merit expenditures increase only; should find jobslfor approximately; merit. Many believe that a deficit
to;^2 bUIion during 1959,lhey_ 13£r. to 2 million;; more people be- of the government automatically
Me^:whdi"tiMr of full^empldy?.:- '^ells ^inflatibnv and, ^ therefore, it
wilf )riive^
f luence. Even this small increase * ment of the labor force will exist; is /assumed that the only safe step
is a good indication that the busi¬ Such a rise in .employment Would for individuals or businesses is
i: ave
nessman has; regained, his corffiquite-.a bolstering effect to purchase equities in order to
dence in the economy; Such /con¬
upon
the.l:,supply of goods .and hedge against further price ; in¬
fidence ' spreads; to. others hnd sei*vices and, thus, it would have a crease's. Such an assumption re¬
feeds the wave of optimism that. tendency to " hold down the de¬ garding .deficit spending
is in¬
seems to be spreading. ;
Y
/ ~ Y mand for ahy: immediate increase correct, asis borne out by what
in prices.,
happened between the middle of
.C
27
g(K>dsindusti^esraUareencoura^:
is
ing tp those businesses anxious, to
the
on
,
v
V
-
Inventory Liquidation;
The -third
BesidesYthe
force
bolstering the
economy is the decrease in the
rate of inventory liquidation. An
economy -cannot Continue to con¬
sume more than it produces for
long once total sales have turned:
up. Our rate of Inventory liquidation has dropped during this year
and
it
early
is
labor'
amount of
of
a
of
sizable
our
Satisfy the short-run demand, it is
unlike'l3r therC will be any. sudden
1959 the
level of- upsurge m'capital outlays. With¬
Al¬ out a marked increase in plant
and equipment expenditures, busi¬
nesses will not be bidding up the
prices of the materials needed to
increase plant capacity.
of personal income is the fourth
Increases
in
productivity are
factor pushing us back to a posi¬ additional factors working against
tion of full employment. The be¬ inflation. While it might be ex¬
havior of personal income during pected -that labor will increase its
the downturnwas the chief reason income as
productivity rises, the
why Consumer spending held close tendency for production to riseto
previous ; levels. During the faster - than 7 employment means
downturn, rental income, "farm unit labor-costs are on the decline;
income, business and professional As long as this is occurring, and
income, dividends and personal* if usually does during the early
interest
income
all
held
quite stages bf •ah upturn, the pressure
steady. Labor income did decline to increase prices is reduced. In
from a seasonally adjusted annual
fact, unless labor costs absorb the
rate of $250 billion in August of amount
saved
by increases in
i957 to $241 billion by April, 1958. productivity, 4t is possible to bonHowever,;. this $$. billion* decline ceivbib^i3a7 situation where com*
^ubstantially v/as offset t by $ $5v petition Upright; even force a debillion rise, in ,unemployment pay¬ :creasee.vin prides.
/ /,
ments. ; From April .through Sep¬
Thb present Stock of goods held
though it can be expected that the
build-up will be slow,, the total
impact will be considerable.
The continued rise in the level
,
.
!
tember of
iliis
labor income
has advanced whileunemploy¬
ment payments have continued at
about the same rate. As * private
employment expands and as wages
increase, total* labor income will
also rise. AS' this happens. more
consumers^ goods will be
bought
year,
by; Americans
.
deterrent
serves
as
to; inflation.
another
The
tre¬
mendous backlog of demand that
was built up-durmg the depression
of the thirties and later in the war
years hasmow been satisfied.
Americans
On
are
encouraged by the expected rise in
personal, income*
Non-durables
eohsurri&t Opposition. Such opposi-
and services are likely, to continue
and*
tion
accompanied by
change in the
level.
of
1955.
Over
practically
no
price
consumer
In
July, 1952, the consumer
price index stood at 114.1 and as
of
December,
The
wholesale
haved in
from
a
111.8
month
lion
me
1955, it was 114.7.
price index be¬
similar manner, going
to
111.3
period
tional Product
over
while
rose
this 42-
Gross
Na-
from $350 bil¬
to
$400 billion. It seems to
that here is rather convincing
proof
that deficit
automatically
spending does
mean inflation.
What has been said should not
not
be
construed to mean that gov¬
ernment spending is neutral and,
therefore, does not feed the forces
of inflation. Indeed, if the econ¬
omy is already operating at full
capacity,
even a
to
if
is
conceivable
that
balanced budget could lead
further
price increases.
The
Critical point is reached when all
the resources of the economy are
operating sit
capacity. It is at this
level that inflation begins to un¬
dermine the vigorous strength of
the entire business system.
While I
that
belief
have
expressed
the
substantial
price in¬
creases
are
unlikely within the
next few months, creeping infla¬
tion
reluctant to
flationary
.
fear
to produce'products tbat will7 The
the
consumer; but the
yield to further in-
.pressures.
relatively
and,
Should
the
of
develop
maintaining
ways
and means
stability
in
the
value of the dollar.
.
•
....
.
.
.
.
.
.
,,
'
situation is ripe for a big year iii
the Sales of such products as cars
up
this year.
few wnich
net this year will
above the $6.02 a share
that
be well Korean War high. The system set
reported a high mark of 42.9 billion in 1956
year and may: approach as compared with the former. top of
much as $6.35 to $6.50 a share. 41.4 billion ton-miles in 1952. YY
Moreover, the annual $3 dividend
Recovery in business activity,
rate has been maintained through-,
along with good crops, are ex¬
out the recession.
pected to expand earnings ,of the.
For the first nine months of this Southern
Pacific
considerably
year, the road reported a drop of over the
coming months. While
3 6% in gross revenues. However, the
road will seek further -to con¬
despite higher wage rates, ex¬ serve cash for'capital improve¬
last
penses
were
$18,322,000,
cut
or
increases, it is
thought might be
given to increasing the dividend
some time during 1959. Over the
efficiency were the chief factors. longer term, it also is expected
Non-rail
income
has
helped that a merger with the controlled;
Southern
Pacific
over
the past Cotton Belt
might be undertaken;
few years. For this year non-rail
income is estimated at $24,000,000
as
compared with $22,400,000 in
4.6 %
under the like 1957 months.
ments
traffic
as
believed
some
A cut in the number of employees
and improvement in transportation
Public Service El. 6
1957
and
better
than
twice
the
$10,000,000 of 1948. Included in
this
expanded total are larger
dividends from Pacific Fruit Ex¬
Co. (50% owned by South¬
ern
Pacific and 50% by Union
Pacific System). Other items in¬
press
clude
rental
income
mercial
properties,
interest
on
bonds
and
controlled
the
from
from
com¬
oil royalties,
dividends
St.
Louis
Gas at $37.75 a Share
Merrill
Smith
Lynch, Pierce, Fenner sfc
and
associates
yesterday
(Dec. 3) offered 700,009 shares xtfnb" par value common stock of
Pubic Service Electric & Gas Co.
at $37.75 per share.
v
Net proceeds from the sale of
the additional common stock, w^l
be added to the general funds *bf
(Cotton Belt) Rail¬
road. Southern Pacific's equity in the company and will be used for
corporate purposes,- in¬
the undistributed net income of general
this road in
1957
amounted to cluding payment of a portion of
the cost of the company's .current
more than $6,000,000.
There are possibilities of further construction program. As of June
growth in other income over the 30, 1958, the current construction
years. The railroad owns 3,947,000 program -of the company, based
Southwestern
recent prices, amounted Yto
approximately
$279,000,000,
of
which $261,000,000 Was for elec^
trie facilities and $18,000,000 for
cipally in Nevada, Texas, Utah
ancjl California. The company has gas facilities. The company esti¬
of inflation stands
a
very
mates that of the $279,000,000 con¬
engaged ah outstanding engineer¬
chance of becoming a reality.
struction program, approximately
ing firm to study its entire land
inflation potential is great1
holdings and a full report should $64,000,000 has been or will be
therefore, it is now that we be made available with the next expended in the last six months of
remains
low
level
of
Proposes an Immediate Step
general' business activity in Eu¬
Probably the very first step
rope and othei? foreign areas has that should be taken in the battle
restated' in }a decline in our ex-; to stabilize'
and appliances.
prices is to recognize
V
ports ; and until- this demand picks that this
problem is every bit as
The forces that I have men¬
op, there will be little pressure
great as the problem of depres¬
tioned are strong and When they
from this Source to increase prices. sion.
Perhaps thC most effective
are combined with the underlying
Foreign/dollar and gold, reserves way to give proper recognition to
long range expansionary forces,
have risen' and this seems to be the
danger is to state, in the form
such as rising population add im¬
an indication that local currencies
of a Congressional Act that it is
proved productivity, they add up
arestrengthening.
If
foreign the continuing policy of the Fed¬
to a 1959 Gross National Product,
countries'are able to expand their eral
Government to promote rea¬
in the neighborhood of $465 bite.
lion compared to a $440 billion in output, sooner * or later, purchases sonable price stability as well as
from the* United States will rise
"maximum employment,, produc¬
1957 and an estimated $435 billion
and eventually more inflationary
tion and purchasing power." Once
for this year. In other words, bur
pressures from this source will this is accomplished, everyone, the
economy; has
the potential
of
result.
'*•
consumer, labor and management
achieving full employment within
will know that creeping inflation
the next'12 months. Our recovery,
Growing Labor Force Size
will be fought as courageously as
will be complete when this posi¬
One other factor should be con-'
is unemployment under present
tion is reached;- '* 7
7
sidefed when appraising the antilegislation.
inflationary powers of our econ¬
{
More Inflation
•
Once we officially make the
omy.
Each year brings us closer
1 The question remaining to be
control of inflation a matter of
to the time when the baby crop
answered is whether we can ex¬
national policy, I am convinced
of World War II will enter our
perience an Upturn of the magni¬
we can enjoy a reasonable
degree
labor force. The youngsters born
tude suggested without inflation.
of price stability, and at the same
in 1942 will be 17 years of age
The fear; of inflation has already
time, a reasonable amount of full
next; year -and It is likely that
had
an
effect
upon
the stock
employment.' The long-term forces
many of these will be seeking
market and unless it is overcome,
operating within our economy are
employment.' As the labor force
laborj management and the con¬
increases our ability to increase, strong and they ;point to a level
sumer
will
become
still
more
of production twice our current
inflation-minded. Such a condition output; will also 'increase and, as output by 1975. Such a level of
this occurs, certain pressures for
could lead us oil a buying spree
business activity can be achieved
that Would end in higher and highef-prices will be somewhat within the framework of a free
weakened.;'
\
:
higher prices and perhaps: an
enterprise society if we will in¬
The preceding factors cause me
eventual -collapse bf our entire
telligently apply both fiscal and
to conclude that we are unlikely
productive processes.
monetary policies; We have seen
to experience any great
.increase how the 1957-58 recession was
r
Downward Price -Pressures . >, in -prices;- over the, next few quickly reversed through the di¬
c
There are several factors that months;- -Our expansionary, abili¬ rect application -of fiscal policy.
^
interest
Southern Pacific which now accounts for more than
exceptionally well 50% of total freight revenues, bus
The road is one of the already surpassed the 1952 peak in
probably will report a both tonnage and gross. Growth
higher net income this year than in manufactures has enabled the.
in 1957.
Current indications are road to lift the volume above the:
of
Earnings
have held
of land and oil, gas, mineral
rights or royalty -interests in an
additional 1,309,000 "acres, prin¬
acres
upon
,
ifsually- means fewer sales good
thus;i loWer profits. Busi-: The'
their Upward trend, but ev.en of
pesses that' believe sales will drop
greater consequence, will be the if they increase prices will be
have
end
most
critical
Well
housed, well fed, and well clothed problem *|hcing' our economy; As
soon as we return to the position
aridbecause* Of this, increases - in
of full employment, the present
prices are8 usually met with strong
the ^ whole,-
and factory output will increase,'
All levels of business should be
rise in the spending for consumer
durables. Jt is true that firms will
the
-
inventories will begin to rise.
.
1952 and
this period a sizable amount Of
deficit spending occurred and the
productive capacity
remains idle. We are operating public debt rose from $259.2 bil¬
at around '80% Of capacity with lion as of the end of June, 1952
92 fothe desired rate. Until output to $280.8 billion as of the end of
increases to the point where it is December, 1955.
This $21.6 bil¬
necessaf y to increase capacity to lion increase in the debt was
likely that during the
part
level
current
unemployment,
Southern Pacific
1958 and the remainder in subse¬
two years.
separately quent years.
The company supplies electricity
operated subsidiaries also have
contributed to the system's earn¬ and gas to about two-rthirds of the
ings.
Net income in 1951 from population of the State of New
this source:amounted to $4,172,000 Jersey (1950 censuSj— 4,835,329).'■■■
and in 1957 was almost twice as The company's electric and .gas
large at $8,245,000. These subsid¬ service area, located principally
iaries include trucking companies between New York City arid Phil¬
Pacific's
Southern
which
operate over 20,000 miles
highway truck routes in the
territory. Other affiliates
are land companies and pipelines,
Last year the pipelines contributed
$4,021,000 to profits, $2,558,000 by
rail affiliates, $1,310,000 by the
land companies and $160,000 by
the trucking companies.
of
rail's
adelphia, along the main line of
Pennsylvania Railroad, ex¬
tends generally from the New
the
York border
in the
northeastern
part of the state to Camden and
vicinity in southwestern New Jer-r
sey.
The territory has a highly
diversified industrial development,
which
includes
major plants
of
Southern Pacific has spent large many companies©! national prom¬
sums on
^Principal industries in¬
chemicals, iron and steel,
electrical
machinery, electronic
equipment, food processing, teix*
tiles, nonferrous .metals, pharma¬
old ceuticals, and a variety of assem¬
rehabilitation of its road¬
and equipment.' Of major
importance has been the; increased
use of diesel power. The road has
been slow in dieselizing hut grad¬
way
inence.
clude
replacing
particularly for bly plants.
helper and switching work. This
ually
has
been
steam locomotives,
has done much to cut the trans¬
portation ratio. Despite large ex¬
penditures, the carrier has been
able to maintains strong financial
6. A. Preston Joins
Albert Freak
Agency
On Aug. 31, 1958, cash
George A. Preston has joined
and its equivalent amounted to
Albert Framk-Gueather Law, Sac.
$99,957,000, which -does not include as an account
'executive, ft has
$50,000,000 Government
obliga¬ been announced by Howard W.
position.
tions held in investment accounts.
.
Current
liabilities
on
the
same
Calkins, chairman and President
of the
agency.
Mr, Preston mam
$115,174,000. Net
formerly with Riedl and Freede,
working capital was $76,654,000 as
Inc., Clifton, N. J.
compared with $81,072,000 on Aug.
31, 1957. The annual rash flow
With Irving Lundborg Co.
from depreciation! is around $39,(Special to Thb Finmkoai. Cobowicle) •
000,000, or well above the $25,should be considered before we? ties are., tremendous and should The same tools'can be effectively 133,000 equipment and other debt
SAN PRANCING0^, Calif.—
not be overlooked by those exam¬
jump -to jthe conclusion that run-applied to fight Inflation if we maturing over the next 12 months. Rawson E. Knight is now with
hway inflation is inevitable. First ining.-the current situation.
The road has aggressively sought Irving Lundborg & Co., JIG Smwill but recognize, that once we
bf all, We -are presently operating. Deficits; Need «Not Mean Inflation
are enjoying full employment, our to bring new industries and plants soine -Street, members of the l$ew
at a -level well below full, em¬
to
its
territory.
Manufactured York and Pacific Coast Stock Ex¬
The inflation-mindedness that system win stand but a limited
ployment of all of the factors of is sweeping the country is due amount of additional spending.
items and miscellaneous freight changes..
date
totaled
*
.
.
28
The Commercial and Financial Chronicle
(2328)
Continued,
jrom page 3
products, etc., is definitely a wast¬
age
of our wealth,
considered
governments, as reported by the
Commerce
Department,
totalled
;
billion!
The Federal taxes strictly from an economic point
70% of the total, state of view, though it may have a
15% and local taxes 15%. humane value and possibly far¬
fetched
political
and economic
Figuring on a population of 175
.
.
on
.
Thursday, December 4, 1958
stocks
much
$98.9
Security
Illusion
or
and
made* up
dividends
taxes
about
were
the
as
interest
twice
on
averaged about 5%.
return
Government
about
bonds
as
bonds/
Today's
3.77
and/
between
3.50
and 3.80, while tax free bonds re¬
turn 4 to 5%. United States
value. Whatever goes out of our
if one tries to compare the pui- million, this amounts to about
sav-j
/chasing power of the dollar today $530. per capita; it includes men, wealth, which the dollars help ings bonds yield 3.25 if held until
children,
and
of produce, decreases the value of maturity — eight years and 11;
land, with that of a dollar of say 1840, women and
the dollar.
months—and recent issues of cor-:
goods, services and securities may when it had a purchasing power course a goodly percentage do not
(G) Welfare and New Deal Lar¬ porate bonds will give a return of'
'
'
change hands several times, with of almost six times
much. In pay any tax.
over 5%.
each buyer making a profit and other
words, in ;1840, a dollar;
(C) Cost of Living:
We are gesses: If the Democratic Party
nobody a loser until bad times,- bought six times as much as it indebted to Delmonico's a leading started the New Deal handouts, ;
The reason is very simple.
It :
the welfare state attitude is con-, is a
the recession period, comes, when does today. Fantastic, isnt it.
restaurant
then
and
precipitous flight from the"
today, for
ing which many can secure gains,
savings and thus apparent
rity.
During good times,
secu-
,,
.
.
.
'
.
"
will be the losers, when -; wh
..
noIlap fa shrinking
~
land, goods, services or securities.
Why the JJoIlar is Shrinking ■.
continue to be offered at a dis-(A) Seigniorage and Brassage:
count with each sale, and with5 The ruling- authorities when isvery few escaping with their sav-; suing coins charged a fee,
supings or security, i
posedly at cost, known as seignOne is reminded of that oriental; iorage. Sometimes the profit for.
story of the two pushcart';ped-:- the ruler was rather substantial,
dlers, each one having a supply; but in general the rulers protected
of raisins with no buyers.
One, the gold or silver contents of the
many
•
.
tells the other,
'Til sell you half
of may raisins at a small profit;
and I'll make money; then you;
can sell it back to me at a profit
their
1834. In this
of
plush
could then have a
40, a whole roast
chicken for 100, and in proportion
the cup of coffee was expensive—
10. If you wanted a complete
regular dinner, you could have it
for 120 from soup to nuts. Del¬
monico's has preserved its quality
menu
restaurant,
beefsteak
you
for
tinuing with the Republican Party.
The "handouts," whether to help
those in want or to start building
and
reconstruction
projects fori
ment
which
the
is
there
no
necessity, again
contribution
economic
real
be a definite
the cause of hu¬
may
to
dollar.
People
do
not
"what
care
the return is, as long as they have
the expectation that their invest-~
will rise in proportion to
in the value of
decrease
dollar.
the;
Safety of principal is the
major consideration.
/
V
manity but from the point of view, } To formulate the Law of Infla-;
of economics it is a wastage of tion; inflation
arises when many;
of food and service,- but unfor¬ dollars, of necessitiesand hon-; people would rather have durable
coins. Brassage was a later de- tunately at a much higher price; wealth producing objectives and and even. consumer goods
"than,
velopment. It was substituting of not; their fault but due / to -, the therefore depreciates the dollar. J money./ 'H
a
baser metal for the more ex- vanishing purchasing power of the
(H) Deficits and the National;
A Comparison of Security Values
Debt: Taxes, in spite of their be¬
pensive metal, less gold and a ■dollar. v; -f.:-'.:;
little more copper, less silver and
The United States Department ing so high, are not sufficient to
; (1) Cash: Naturally this would
a
little more brass or lead, de- of Labor
statistics show us that pay the costs of Government. The be in the form of bills. In the old
pending upon the extent of the the cost of living, as it is labeled New Deal, started by Roosevelt,
days, very rich people often put
cost us almost $4%" billion, the
greed or need of the ruler. On "Consumer Price
Index," taking
away some of their savings in the
Korean
gold coins we in the United States 1947-1949 as
War almost $21 billion for of bills in safe
100, in 1938 averaged
deposit boxes.
had practically no seigniorage. On 60 and as of June
and so on and on. For this fiscal
19, 1958 aver¬
Though they knew they would
silver there was seigniorage but
aged almost 124 — which means year, beginning July 1, 1958-r- have no income thereafter, they
the purity and weight were main-that the cost of living is twice as one year—our deficit will be be¬ were sure of their capital to be
tained. However, all this changed
tween $12 and $14 billion dollars. used when needed.
much.
/
:
Money is the
in 1933. Gold could not be deThe Congress had to vote an in¬
subject matter of this study, and
(D) Salaries and Wages: When
manded
in
crease in the legal debt limit of
exchange for paper
it means dollars as we know them;
workingmen and employees get
the United States, raising it to the
currency" and
gold certificates
and therefore if held since 1938;
increased wages and salaries with¬
were called in. Then a brassage of
formidable figure of $288 billion. a
out a corresponding increase in
$10,000 cache would have a
a
different form began very acJ.
purchasing power today of a little
production, the result is inflation.
Inflation
tively and perhaps not intentionover $4,700.
Building craftsmen can make be¬
;
:
ally.
Paper
money,
notes
and
Perhaps it is oversimplification
tween $80 and $150, if not more,
; (2) Salaries and Wages: At first
to interpret inflation asra condi^
treasury bills were issued without
a week against $20 some 30 years,
blush; it may seem that salaried
corresponding
backing of
gold,
tion in which it takes more dol¬
ago, though they are not produc¬
people and wage earners have ho
Much of the money collected for
lars of buy today the/article that
ing four to eight'times as much as
pjace under,this heading. Yet from
social
security
is
being
"boryou could to a ve bought a month
the point of view -of economics;
they did then. —
rowed" by the Treasury on IOU's;
ago, a year ago or ten years ago
the salaried man and the wage
Some 20 odd years ago, certain
All this naturally tends to defor less. To be in the same
posi¬ earner have future
chain stores
were
savings which
paying their tion and to
crease
the purchasing power of
equal the purchasing means future securities in their
the dollar. Furthermore, as the sales girls $10 a week and today power of the
comparable period in own continued
is
the
dollar
positions. We have
per
hour the
dollar buys less and less, people there
past, a person must earn in seen that
wages and salaries have
wage,
salaries being
want to exchange their dollars for minimum
wages, salary or income at least
outdistanced
the
rise
of
four to five times as much for the
living
real values
the same percentage of increase
properties, jewelry
same
work, or even less as the as is the decrease in the value of costs/ Theoretically, if a salaried
and securities.-This is a vicious
man
and working man could be
working hours per week have
circle. The dollar
.
.
and
thus
profit."
will
each
we
the
At
each had the
end
make
the
of
a
day,
load of raisins,
same
huge
paper
profits,
but
not
enough money to buy the eveningmeal. So securities and
has
profits
one
be analyzed very care-
must
fully; otherwise the story of the
two peddlers repeats itself.
The purpose of saving, of acquiring
securities,
is
twofold:
First,
the
preservation
of
the;
original investment of capital; and
secondly, the securing of an in-,
come which.would grow until the;
income reaches, the end goal-—to^
provide security to the saver, investor or speculatox* via his in-,
come. In the light of th£; afore-mentioned!i virtues J or
qualities
looked for in securities, we shall
examine the
various types
of
se-
curities.
As
all
securities
evaluated
are
in terms of the
exchange,
we
the
dollar, the unit of
shall first analyze
it exists today.
:
as
dollar
~
,.
,
.«
„
„
Gyrations of the Dollar
There
time not
/
.
"
•
,
—-
has
less
value
long today than it had a year ago, and
£go, but that many of us can still considerably less than
10 years
remember, when one could go to ag0. The question is what will it
the bank with a $20 bill and cash be worth next
year and five years
it for $20 in gold. Gold was then from
today.
the
real
medium
of
exchange,'
.■
„:
principally in the form of gold
Taxes:
.xes are oae
2?e
,
was
a
so
__
coins
(for
small fee the governmcnt would give you gold coins
Weight for weight in exchange for
gold). It had the same value in
a
-
Pr*me Jac*ors. m, corroding; the
ya ® ?. *ke Purohasmg power of
the
been decreased.
dollar.
We
the fact that his investments
were
all of
category
•—bad. It is basically fiat money,
in spite of the gold that is buried
in
Fort
could
Knox.
go
up
same
Theoretically
down,
or
it
depending
upon the confidence of the
people
but in prac-
in the paper
money,
tice
it
has
been
steadily
viciously.
There
dollar
going
down
lately
rather
and
was
a
devaluation of the
April 5,
Roosevelt
on
President
1933,
when
issued
his
Executive Order requiring that all
gold coins, gold bullion and gold
certificates
Federal
the
be
Reserve
banks
all
Furthermore,
price of one
raised
turned
to
$35
to- the
Banks
through
the
country.
over
on
in
Jan. 31, 1934, the
ounce
from
of
the
gold was
price of
.fdly a hkelihood that taxes
will be reduced materially in the
foreseeable, future; everything
f>omts to thc: contrary: they will
be; increased Just to mention a
few factors, the cold war, the near
bet war, and the small wars, the
ever expanding foreign help and
increasing social security benefits
and the general tendency to increase the welfare projects by the
Federal Government, by the states
and by cities, and the ease with
which such vote getting largesses
can be secured, definitely militate
agamst any reduction of taxes on
those who have investments and
savings. "Soak the rich" may not
as yet be the general battle cry
on .street corners,, but it is the
basic policy that permeates the
Seneral philosophy of the so-
$20.67, which was in effect since called common man — the Wage
1837., The probabilities are that farneF and the salaried—forgetwill be some form of de- tmg that by bearing down further
valuation
of
the
dollar
within and further on investors they are
three years in order to stabilize ultimately killing the goose that
there
the purchasing value of the dollar.
Jays .tae golden
When,
*ar
not
kept
with the de¬
pace
of the purchasing value of
the dollar. There comes to mind
only
some
the
of
lower
echelon
government employees, who prob¬
ably feel compensated by assur¬
ance of lifelong jobs and ultimate
pensions.
(E) Wasted Production: When
$40 to $60 billion are to be spent
for the armed
therefore
,
The
from
not create additional
wealth, such
if building
a
factory or buying machinery
and equipment, or even manufac¬
turing chairs. These weapons of
war, even if no war occurs, be¬
as
would
be
the
obsolete
come
case
and
useless
and
therefore wasted.
of
our
creases
In
a
the
was
What does that portend?—
continued decrease in the value
side
make
who
an
have
Annuities:
d
worked
:
of
;
coin
the
word,
one
been
in
a
quite
for
"Inflation."
a
dollar
bear
while,
but
cipitous,
is getting more pre¬
and one shudders with
happen.
One need not dig deep into the
economic history of France and
Germany to find out what hap¬
,
pened to their francs and marks.
The
French
people,
had a
traditional reputation of being a
very
saving people, are today
great
who
spendthrifts.
"Rentes,"
literally translated means
incomes, was synonymous
or
with
French
Government
notes
and bonds, that sold for centuries
at returns
of as low as
lJ/2%.
Today
the
French
Government,
bonds, has an
escalator clause, guaranteeing the
when
it
puts
out
and
saved for
annuities, pensions and
social security, have been hard hit;
They lost since 1938 almost 53%
of the dollar purchasing value—
exactly the depreciation of the
dollar.
'
;
(4) Savings Accounts and Mort¬
gages: What was said about those
living
can
on
also
come
bank
a
fear of what may
rents
debt
almost
decline
the value of the dollar.
national
two
combination.
market
which
our
earn
that reads "The Vanishing Dollar"
This is wastage
wealth and therefore de¬
1938
to
The
reverse
have
necessary
us
years.
guess.
\s
fiendish
We
very
have
inflation.
precaution to
invasion by the
Communists, we are nevertheless
spending dollars for non-produc¬
ing assets, for something that will
a
protect
Taxes are comparatively easy
to trace. There are direct taxes of
is
would
$10,000 in 1938,
$24,000 today to have the same
purchasing power. It is due to
the jump in taxes and doubly
so,
the
We shall examine the
gyrations
the dollar during a compara-
how
earned
one
one
to
Pensions
Those
profits.
If
has
under $40 billion, and this year
it will be $288 billion and perhaps
more—seven times as much in 20
and
the
services, admittedly
eggs and our dolconstantly decreasing in purchasing power.
body's
of
has
crease
any-
where
(3)
,
j
is in the
money
their. good
can
.
our
jobs,
understand ex-Presi¬ health and ability to work to their
Stenographers, who some 20 dent Hoover's
comment, on hear¬ last days, then such persons have
years ago received salaries from
ing that the Congress voted $25,- security within themselves. How¬
$10 to $25, depending upon their 009 to
ex-presidents. He said that ever, there are certain flaws al¬
experience and ability, are paid he did not need the
money and
ready
suggested:
sickness, dis¬
today $50 to $80 and some as high would
give it away to charity, ability, old age and the possible
as $125—this being five times the
as he had made his
money when
loss of the job,
temporarily or
salaries earned some 20 years ago.
taxes were 1%. He forgot to add
permanently, during bad times.
Salaries of workers in manu¬
jF; Faxes ^ave been going facturing plants saw a rise from of the
type that' had advanced
y evel Slnce the .First $23 per week in 1938 to $83.10 per
faster than the inroads made by
New York, in Amsterdam and in
}Yoldd War, and very rambunc- week in 1958—3.6 times as much inflation. More power to him!
Bombay, except for the small cost Piously since the Second .World in 20 years.
Unfortunately today our taxes,
of transportation and insurance. War. In spite of vague promises
There are very few categories
Federal, social security, county
Today's
Gresham's
Law,
"Bad made by some public officials who of
wage
earners
and
salaried
and city taxes, etc., direct and in¬
money chases out good money," ?u^l\
°
^
1S people whose increase in earnings direct, take
away
over
half of
■does not hold true because
their
of
sure
,
pensions and annuities
be
said
derives
savings
those
in¬
interest
on
about
from
and
interest
from
mortgages. The returns from their
savings or securities are fixed and
therefore
depreciate both in prin¬
cipal and in income, to the same
extent that the dollar depreciates.
In other
a
words, their income is of
fixed nature, is a constant meet¬
a dollar depreciation, which is
variable, and which has come
down to the purchasing value of
ing
a
slightly
over
470, as
with the 1938 dollar.
compared
(5) Bonds: We have already
given above the interest rate on
the various types of bonds, Gov¬
ernment, tax free and corporate.
The principal, the original invest¬
ment, has depreciated, being a
constant meeting the variable, the
declining dollar. The depreciation
of bonds (the principal—the in¬
vestment) is about 53%, the same
as
all the previously mentioned
constants. As to the income
interest,
it
or
the
has gone up, at the
of the principal, and yet
tively short period, a recent the Federal Government, state, of the dollar.
income as well as the return of expense
period, from 1938 to 1958, just 20 county and city, as well as in(F) Help to Other Nations: For¬ capital based on the cost of living. the differential does not meet the
years.
The purchasing value of direct taxes, such as sales
tax, eign help in whatever form it may
Our Treasury will have to put depreciation of "the dollar. ~
the dollar, its power to
buy, was amusement tax, etc. etc.
be, whether the supplying of arms, out a large issue of bonds in the
(6) Jewelry, Precious
Stones,
$1 in 1938, while today it is just
For the fiscal year
just ended * ammunition,
etc.,
or
financial very near future. One wonders Rare Books, Stamp Collections,
a trifle above 47 cents—or a loss
June 30,
1958, the taxes collected Straight gifts or supposed loans at what rate and with what condi¬ Works of Art and similar "rari¬
of 53 cents in the short period of
by the Federal Government the which
undoubtedly will never be tions such an issue would be at¬ ties": These advance in price as
20 years. One is really frighened state
governments and the local
repaid, or the gift of agricultural tractive. For years the dividends the dollar depreciates, but they
Number 5800
Volume 168
>
.
.
The Commercial and Financial Chronicle
not havea standard ;^nark^t^
arises—in what should the
price like stocks or bonds. It is proceeds be invested. ~ ^
a matter of^trading- and finding
Now
we
shall examine the
the buyer. When
are offered income front the; stocks and bonds
for sale, toey Will fetch a lesser held. The bonds return an average
price than if one wants to buy, of 2Yz% for 20 years, which is
and the discount may be consider- 50%
or $50,000.
Stocks on the
able.
other hand paid an average of 5%
do
.
-
(7) Real Estate:
(2329)(29
miding,which might double such corrections. There was the sweat representative of the best inter*
k return. Is it any wonder thait shop, tow wages and salaries, and o£ thenation—statesmen and
there is av continued
the dollar to stocks,
survive financially?
One should hot get
sion that the 20 year
1938 to 1958 was
Xhis favorable to stocks; I
(a) Farmland for 20 years, ;which is l00%.
flight from
in order to
long hours; but it was the individua! employer,. hefcl a. united
#
front, that had the whiphaiid; over
the impres- his employees. This has been more
period from remedied. Laws are on the books
particularly regulating employment, as well as
politicians — and not catering
special interests whether lab^or
capital. Legislation must be passed
behavior in .general,
Labor has slowly; grown into > a
nionolithic monopoly. It is no
more the case of laboring men in
.one shop or factory, but the pressure is exerted by a few/unions
therefore the life of the whole
nation.
Furthermore,
Congress
should pass laws to have the
Treasury of the United States and
the Federal Reserve Board stabilr
,
the
_
Undeveloped
'
"
ize the dollar and thus stop the
.that control the majority of labor; further
rnatps a vHffprpnr»<» in in^nmp hp. in tho vnlnp nf r»r»mmnr» ctnnlro +n the Tooms+we tfnmn 4K<i T}nil«n«J
^
lsild" is
to
the -fingers that slowly
strange the economic body and
detach
am indebted business
53% h®s te - be1
^ Jhe study -mode - by Edward .E. .
average* and. some: land• in^^®^~stwtin^ with
e,j ? ^
-"Brevits"*: pub^
has doubled and tripled in value; .and ending with $350,000 or $450,- lished by yance, Sanders & Com(b) Investments in land must be -2S2mean therefore. is $2:25,r pany, which proves . that "the
divided into two general divisions',
The . dividends of 100% on mechanwal odds have been over a
undeveloped and- developed.
' ' $225,000 equals .$225,000.
This long period of years for increases
has increased in ; value over
on;
to control labor and its funds
increases
in
the
of
cost
z
._•»
speculation,; which may
not'
prove
paying*
a
Meanwhile there arc
pre
taxesteTbe
considered, which the owner must
pay or tosi the land. If one happens to buy a piece of land which
in
a
comparatively short time
becomes
the $175000 to the< $250,000
The study gives the following the economy of the country in rae
,®®kes_ $^5,000 net gata! An<l In "Chmge in_Value ef^Stock Prices hour.
^/,ci/ul?tA°?1s, we_1?»Y,l_noLf!SJDcluslve : (used by
Labor has secured a strong hand
in; the control of some of our
urec> the possible gains by pyra- permission).
.
a
.
w^e^hfn
basle™ aluS di^aDi^ar Lch?aa
culture,
morality,
reject and
*?ri admiration for brains—at least to
Change in Value of Stock Prices 1871-1957 Inclusive
development or a site
for new industries, then of course
one has hit the jackpot.
a
.A
dae
1™+™? Thm
mnvcln ^!
87
50
36
1
57%
growth value like a growth stock,
but on the other hand it may be
5 year
10 year-.—.-
83
56
27
0
67
*
«Si?
be equal to brawn, justice and
nonot brute force, together with the
S« T aHnr- T>Lf^ T? ie +Ca
*u
l disappearance of the dollar. Let
-J1
£
is time that us not feei that this is our last
decide where we are
78
65
13
0
83
where
has-been, Which slowly depre¬
73
64
9
0
88
shall
ciates in value and returns: There
15 year
20 year-4—_
68
64
Dow-Jones studies or charts
•for land.-Each piece of land must
25 year—
80 year——
63
62
"Chance"
the
Gain in
Value
Value
58
V
74
:•
..
0
.
.
1
in Value
■■•".94.'.
.
of
(8) Banks and Creditors: Since
the investment is money given by
the lender who is to be repaid at
future date, these securities
deDreciated in the same ratio
depreciated in the same ratio
the dollar. The longer the re¬
some
times
denotes
number
prices
that, stock
ad-
securities. It is
payment; the lesser the value of
these securities.
r
If one keeps on reinvesting
in similar offers as the old ones
poses.
1958. Let us
now
tbc length of, the period,- the per-
and
centage ; chances 4 of
gains and
Values are higher: "In the* tabula¬
tion of 30 years (starting from
eciauon of the; aoiiar.
preciation oi ine dollar.
nnv Businesses
^ Manufactur-
WhnlfMMde^tetailwnoiesaie, neiaii.
Provided
proviaea
they are estabhshed concerns and
are
averages from M0
to
1957 inclusive)
percentage
in
around
our
to
the
with
the
ton
arena
glorious toast and
Criteri
his
income from
paid on the
4u'
i«^„
in
luou, nis
stocks would
today. Owing
he
can
pay
+..ioi
logical answer to the challenge, this most promising, new indussee great opportu- try, which bidsf air to revolutionnjtfes for large scale production tq Jze/ .business and/industry .and
serve a new mass market as the
along with it everyday living, for
wioSiKS' Incidentally, I
to 1938 to 500
$zuu,wu wortn
oi
be worth $700,000
European Common Market devel- all people.
a total of $200,000
ops it, strength in an area equal
There is room for all of us in
this
,inis off from his in nnnulgfinn In fVtnf nf IhA TT S A
in population to that of the U.S.A. IVile nmrulrniie nloctina inrlno+rw
this wondrous plastics industry,
v
+s
^iS on the other hand, for the multi- We shall need to visit each other,
? ittuae j>f items, of lesser volume, exchange information, make mu-
linna2a
Which Securities to Boy
*Kn
iS8
?
^Sn
S
same
?
'
nih^c
Jhn
listing, and one could have
even
}
£
Tvvto
in
went m mnw thnn others in the
up more than
and done
aggressive
secondly
i^rs
better with stocks not
ito aecicie exactly which
are
not
so
adaptable to tually profitable business agree-
would be thes average^ rate automatic processing, there will ments. Furthermore, we must
x" ?0W A
^7°v?17 sti11 be attractive opportunities continue our efforts to work out
'
u
+was JiOT-. a si?or
period 26%, but mostly less than
that. Taking^n arbitrary 20% (it
was probably less), which is equal
.
^ ®
,
°f personak selection, the hst of
^
tones, which rfiould not be held stocks zncludedLin.-.theDow-Jones
for long. Inventories may be re- averages is good enough.
placed at higher
prices^ nut the
We have not mentioned the railselling prices are also higher. The roads and the utilities; though
more
often the inventories are they did not perform just, as well
turned over, the better the secu- as the industrial averages, their
rity.
performance outdistanced the deStocks
crease in the purchasing value of
on
are
together
Siator
Continued from page 6
for fabricators With lower wage world standards for plastics.
COsts
know
'
the average the the dollar.
that
Plasties
Tariffs and Duties
.
There is an additional gam, businessmen, is the
one
thp
Industrv
is
I
of
the
alreadv
en-
Societv
cased in thi«? matter of standards
k^°W;f^tirJ^S^n^n'pt
fhp ^on jjcluded in ^
^would leave- Probably the most controversial
securities,
^P^^^^n^theeon- However, precluding the hotter $400,000 gain.
..
subjectin a group of international
tnrued rapid
These
an<i
gaSD
dividends vs. interest
mature, in the long run these investments are subject to the de¬
owners
or
our
vanced (or the value of the dollar • : There are two factors to condeclined) in relation to.the.total 'sider: .
;
c
>
4
number of periods involved.
First, the ultimate worth of his
^ yoHnot^ce.' tbe longer securities compared with his debt,
there are
•X»>'*58 periods AVith no periods of loss;
and Tax-Notes: Deviation is rather
iodg showing
'
^
^ all Periods showing gains. The
aI1
small, as they areof short-term ghor£r to periods' there
shorter the periods,.there> is aland/or-intended for specific pur- wavg - gain
but the
the
Much,
most, is rotton in
Congress be te salutant,"
how well he fared..
see
1871
:are
are
inr
tug,
say
its merits in rela¬
tion to the neighborhood and to
its possibilities.
as
we
100
0
•
going and
want to go.
we
De^k-the United States.
It is time that the
98
/
0
•
.
V::,7 O
58
:
Chance of Gain
Same
i
74
' ;-7i
%
:
Loss in
•Periods
1 year
are no
be judged ori
No. of
Period
Length of
Developed land can also have a
a
Periods of
Periods of
Much remains to be done, how-
ever, so that our customers everyof tariffs where will have a clear under¬
namely, the differential between and duties. I admit it is a touchy
the dividends received and the one. But I am one of those who
interest paid. The average interest
certainly not more than 4%
that is equal to
80%. 80% of $200,000 is $160,000.
The average dividend rate was
5%. For 20 years, that is equal to
exactly 100%. If we take the
was
and for 20 years
standing of what each type of
plastic can be expected to do, as
believes strongly that problems well as what it cannot do, and
and controversies are never re- thus come to rely on each cornsolved by ignoring them,
pany and its products.
i do not pretend to have an
Sees Tripling of Production
answer to the tariff problem. We
By 1968
cannot
help but recognize the
With these goals before us, I
philosophical virtues of free international trade, at least in the see ahead a future so promising
^
_
faces a variable that average between the original inhave advanced even more per- has practically no limits until the vestment of $200,000 and the final abstract.
for the plastics industry that I
centagewise than has been the complete deflation of the dollar investment amounting to $700,000,
When we take a current and dare say none of us here tonight
decrease in purchasing power of is theoretically reached, the better this gives us a figure of $450,000 practical point of view, we may, fully comprehends it. I mentioned
type of savings or securities that
When
one
play is industrial stocks that can
the. average capital. 100|$ of
$450,000 is $450,000 received in
dividends. Subtracting the $160,000 paid out in interest, that
leaves a net difference of $290,000
earned. The $290,000 has naturally
been reduced by taxes paid on
in good conscience, feel different- earlier that world plastic producly. As managers of business, some tion more than tripled in the 10
of us have employees' and stock- years just passed and that there
holders' interest to protect. How- is good reason to expect it to
ever, when we plan for the future, triple again in the next 10.
points. Taking a more con- remembered that the premium Adding the $232,000 to the $400,figure of 500, the in- one pays -for the usual mutual 000 gain in capital, that makes a
fund on acquisition, which runs total gain of $632,000 made on
In other words, taking the figure as high as 9%, may take some money borrowed and repaid after
of 500 for 1958 and 140 for 1938, time to be covered by the rise in all taxes, In our calculations we
the former is 3 V2 times the latter, the resale value and the income have
not figured the possible
All this in 20 years, with all they produce.
gains by pyramiding, which might
other types of savings except those
T)phtK* Tf mav
Debts: Itma^ sniind naradoxlcal double such a return.
.of
''
This is not for the uninitiated or
wage
earners
and salaried
piaeeifv Sfac a "seeuritv"
debts as
h/tonnmr
those without the know-how. It is,
protecting the tf^wer however, a definite demonstration
or more than half.
w
against tne dollar decline but
the aoiiar aeciine out
convertible currency, have first already reached in the U.SA.
been removed.
That alone would add at least 11
I am a believer in allowing billion pounds to world consump-
the dollar.
the
Dow-Jones grow rather than railroads and
Averages, we utilities that have fixed rates,
find that in 1938 it was in the which they must submit to au140s. There have been in between thorities before they can make
at
Looking
Stock
Industrial
..
recessions
and
interesting
booms,
to
note
but it is any changes.
4
that each
Mutual Funds: For the uniniti-
as
of 380
servative
crease
from 140 to 500 is 3% times,
competition to regulate markets, tion. That alone would increase
and we can make progress in this the size of the international plasdirection internationally, except tics industry by 120%.
■
where there are such obstacles as
As we pursue our goals for .the
government subsidies or an in- future with earnestness, we shaU
ordinately low standard of livmg. find that we are promoting world
At the same time we must rec- trade and international cooperaognize that there are conditions tion. Thus we can do our part to
during inflation the borrower under which short-term tariff pro- build human understanding, betreaps"handsome"profits, while the tection is necessary to prevent a ter living and world peace. Any
a
^moreXnhflfby
tbe
relative to
today
in
Averages
fared
investment in bonds,
in 1938; $100,000 in
an
made
stocks
l^aAWOuldBonds still
be^worth
$350,000,
over
remain at
rUfS
of
•—
ia
Dow-Jones
both
their redemption value
pnon vaJ
u
$100^00, though they are much
lower in the market today.
difference is
a
today. Parenthetically
that
one
may
had
Hollar
W
hidden
a
of
the
savine
^ quest
in borrowine
throne borrowed
bank in 1938,
un
aa
Putting up as
l state
would.be foolish in sellques-
<•ss-ssartsysrs srstssftrsss
Conclusioit
7 "
or
$ioo,ooo from his
nilttin£r
gain of $250,000 in note
ing the stock today,
http://fraser.stlouisfed.org/ as the
Federal Reserve Bank of St. Louis
deterioration
continued
it
without
collateral.
ditions it is difficult for any busi.
S/^fand
has^ ^ Wid fofus to
n
.
rpvalnaM
o^SiS^f&piSl
to toke
a
Mfe
will receive—the richest
rewards.
_
.
5es??ail }° be f statesn?5n-
security ^
security real estate, yet " h®!, to be
securitv real estate.
lngUrance
policies, and, if his
The credit is good enough, his 6wn
favor of stocks over bonds, if sold
-
,
^
how>'an hivestoient^of f^fpniipnTnn^k^winp^
compare
SSK
we cannot help but take into acI may be conservative. Jtist
count the fact that the exchange consider for a moment where our
1
an"^
Leo Kaufmann
throat
Leo Kaufmann, New York City,
over the long run, if we
member; of the New York Stock
want this plastics industry to rise
Exchange, passed away Nov. 26.
tnS?r
But
i.
^
...
,
to Labor, to the great potential that exists
This They have all sinned, and some for it, we must work always to
^
^
into
Julius Klorfein v
-*
to purchase industrial securities in
At the torn of the century, long-term solutions. We certainJulius Klorfein, New Y6rk City,
the Dow-Jones Averages on an
w«q in the
and ly do not want to allow unneces- member of the New York Stock
equity of V2 or $200,000 worth of labor had many justifications for sarily high tariff walls to hobble Fveh"n?c.
away. Nov. 27.
amount he put iip with the broker
are
still sinning very heavily.
turn short - term problems
The Commercial and Financial Chronicle
30
tends
17
undermine
to
dence of
people in
The
Danger of Inflation
And a Program to Combat It
ated increase in reduction of the
cussions,
correspondence 7 w i t h
debt in future years. This Resolu¬
public officials; elected and ap¬
tion
did
not
receive sufficient
pointed, I would like to offer the
consideration when it was introfollowing as the basis for a pro¬
duceod.
However, the public^ is
gram
which I believe can be
achieved, providing we can fire becoming more aware of the prob¬
lem of inflation and the sentiment
the
imagination and energy of
who
those
understand
and
in
though
Offers Anti-Inflation Program
vast resources,
aspects
some
of
have to be modified.
Onx/prnmpnt
Daily
,
closely tied to
first,—would be for the lead¬
ership of each political party in
CQQgpess to select two qualified
representatives •; each
from
the
Senate and House, making a total
of eight members. These men, to¬
gether with the Secretary of the
Treasury or Director of the Budg¬
et, as the President directs, can
be
regarded
as
the Watchdog
Committee for Expenditures. This
Committee would carefully review
A
second
step,
expenditures
and
appropria¬
danger
ness
is
it may
7.A ;
analysts tell us that business
the upswing and many peo¬
spending programs and
the deficit that will have to be
financed in the near future, all of
which means more
inflation.
Committee would be to eliminate
Emergencies
verse
conditions.- It is to be un¬
that the President will
derstood
expenditure not approved by the Committee in ad¬
veto
,
any
dition to his normal veto powers.
"This
may
affect
economy
our
Again,; after World War I, our
part', but
not ad> °f its former purchasing
of infla- v
The imnlementation of this nro-
is probably, the most, disturbing
as it took place during a
5
^
federal gov?
^ ™pS and
power, except as this/ applied to
will require a considerable
planning by competent'
amount of
in
dep™?™n'
government people supplemented
by finance'industry and
The
radical
laborv
?pui1^
for a moderate but
consistent reduction-,of
e^endir
tures and a method of fiscal operation that should establish confiis
purpose
'y
^
^Currency depreciation in recent
^
:
nor
an
dedicated to sound money;
.
r
outlined here is
extreme./ Its
program
neither
dence
u
f** ,s"cha
years has been a world-wide
nornenon; and co mpar e d
n
pher
with
most countries of: toe; world, the
J7hat has -been. ,S£tia* £bout the
these
long-range
a
program
s
y
/covered; For the 11 years 1946 to
most widely, used and one 195c, inclusive,, the average annual
.of the nrmst^meaningful indices of rate- of money depreciation extoe purchasing powenof the dollar ee©ded the highest, available rate
currently available if . the Gon-/0f:retum from government bonds
Price Indextof fhe United purcdiased iH'194h inithe case of
States Department of L^or/ Tliis ^ countries except Switzerland,
.index is designed to-take into ac- jn ^e 6 yeai*s from 1949^ to 1956,
count the cost of food, housing,; the record was a little better. The
apparel, and all other items which average rate of depreciation was
normally determine the cost of ~a£ a lower rate than the yield on
living. From December, 194(1 to - government bonds; purchased in.
December, 1957, : a period of 17 1949 in the case of four countries,
years, -, this index, climbed from • including- the United .States, al59.9 to 122w indicating; a decline . though in the case of the latter
weakening of
and later, measures
drastic that'our very form of
so
currency
government might be threatened,
We must keep uppermost in our
minds the simple fact that without a permanent, sound economy
we
cannot have strong military
.
*
.
Certainly the leadership of the
American: people toas
sufficient
Now for our goals to be accom¬
after
for
tiori with continued
our
must make certain that it
we
plished
vision, courage and patriotism to
positive steps to prevent today's "creeping etnergenby from
becoming tomorrow's realitv.
take
in the value of the dollar of about
steps " have
and the
capacity
productive
great¬
in
the
world—a know-how envied by the
entire world and
ization. second
a
to
military organ¬
none.
Our
ca¬
pacities have been developed in a
relatively short period of years
by a well - organized economic
system (thanks to the Federal Re¬
serve Bank) that has grown with
This
151%.
taken.
mineral resources
est
in
pre-war
dollar regained a large
gram
u^asteful and extravagant appro¬
The positive
priations so that the budget could
values and re¬
be balanced in average years and sources of our great country are
all too often taken for granted
some, definite portion of our taxes
couht be used to begin reducing and must be put into proper focus
the government debt. If we can¬ and dramatized to a much greater
not operate on this kind of fiscal degree.
policy during times of prosperity,
We have enough food,
great
imagination is necessary
to visualize the results under ad-
wito labor
lion.
does not get any; nearer.
been
not much
and
other fields of business and
Sst?f together
defense.
usually rise sud¬
denly — but ours is a creeping
emergency that is approaching—
The purpose of the
ful screening.
manv
industry'
banking
the Korean War took 10% from
levels. This was a the .value of the. dollar..probably
feat of monetary deflation such permanently. Then, after three
38 has not been Performed since years of a stable cost of, living,
and is very unlikely to be per- prices entering the cost of living
formed in our timagain began to. rise.. This last rise
the
comnanies
insurance
hanks
mortgage
7
^Jkindof ratchet system—it will go
up and then is stabilized at the
higher level until it is ready, to
go up some more. Value once
taken out of the dollar has not
been r es t or ed* Following two
years of stability in 1949 and 1950,
dowe a rather superior-job of
c^^I^ies ^ldl maintaining the' value77of their
equal force to the Canadian del-*/money; In/Table TV1 a comparison
that will give us stability of cur.^e
^2 X!?*
i
is* made feween the average anrency
and the high regard for P">\ ide a highly^suita.ble^back-^^
qf money depreciation
government securities they for- ground for the origin .and growth for ia countries with the rate of
merly enjoyed, with particular to maturity ol the-lite-insurance return obtainable from purchasing
emphasis on the savings bond pro- business on this continent in the the highest yielding government
the press warns of the gram.
7
in which it exists today.
;bonds 0f those countries at the be.
of inflation, while busiV
Our alternative is more infla- ;;
pdn
cin#ii iqin
7^ - : ginnirig of thiie respective periods
ernment
and
inspire the cSeraMon o£
iSckd iSituttf^kUc^ ^Ttheir
combatting the dangers
prosperity is due to enlarged gov¬
and
ran
should
ple are under the delusion that all
is well; whereas our anticipated
give its recommenda>tions to the President after care¬
tions
on
7
ipnrfprehin
' ;7/v V.
.
.
high standard
our
jeopardized by inflation.
This would help establish con¬
perhaps
fidence in our fiscal policy and
one
of the most difficult steps,
but not an impossible one,—the give concrete evidence of at least
a
minimum of national debt re¬
economy and fiscal policy of the
duction each year. I recognize that
country must be put on a non¬
this cannot be done for this com¬
partisan business basis. Our for¬
eign policy has operated in that ing fiscal year and there will ob¬
viously be necessary provisions
manner on many occasions in re¬
cent years.
Surely the inflation to alter the case in times of ex-,
treme
emergency.
There
have
danger we are confronted with is
been times, because of large mili¬
equally deserving of such con¬
tary expenditures, when deficits
sideration.
v
'
7.>.
'
have been a real necessity, but
We must have a solemn pledge
unfortunately we have permitted
from the leadership of both politi¬ deficits
to
become
almost
an
cal parties that the economy of American
way of life.
the country will be put on a busi«*
This can and will be our ruin¬
ness-basis and operated as such,
ation unless it is stopped.
the
^ : 7
prices have ultimately -7deflated
close to or even below their prewar levels. In 1979, just 14 years
after the close of the Civil War,
the United States dollar was again
made freely convertible into gold
at its pre-war ratio, and prices
had' returned to approximately
cam-
for the average man are
First and foremost, and
hereafter.
Campaign '^77
living, our great opportunities
all being
of
is sound, even
Resolution
this
--7-.
...
public relations
a
Continued from page 9 " ~
: *
; ./ ;
'
:
paign to awaken the American
people to a recognition that our
rapidly. The thinking
is changing
are
v:';7:1
concerned:
We need
-
confi-
American
Education
Public
\hist
the
our
7
system.
.all
Thursday, December 4, 1958
.
Continued jrom page
-
.
(2330)
t.
•
'/
AinF
AnuliSk-tf ni!
111
nounces
—i
tbat'John
CARE
•
firm
country the margin was small/
-
7'
an
.
This decline in value - working towai'd declining value
with
of course, uniform over. in OUr money stem from the kind
w!licl1 is
o£ world lit which we are living,
■cat. u,n11Tf^J H;.iT."^na'Pc.ZniLtt■ y
'.
?sumc
was not,,
New•.„,^:maC'zed here:
headquarters in Chicago and
York, this year will make a con- 'Stidf. mtd
tribution for CARE food packages
lfrl!;l5":o.
in an amount equal to the ex- •
toe
creation
of
„
incurred last year by the%__,
in the production, ad-.
dressing and mailing of thousands
i.
pense
holiday greeting cards
of corporate
distributed® on
•••*.
'
.
a .disorderly
this'
(1) We live !i«
* vrorfd^, neeessitoting
|®Jf
huge governt t Jrt inr<S ment budgets swollen, principally
a
very
large
by
trtU
fi^mtin^
expenditures
armaments,
on
—
"m-Cwhiteh rare -loifwductwe.. The
hiring
: armament
race,. > acceicrated by the advent of ballistic
■,^missUes, will throw an increasing
.
mS?
a
he fnture rf
»
.
company
always before
nationwide basis.
7
-
v
valuel;/Current Outlook ; 7
r
ut the rate of over 4^4% com- -. .The -forces which seem to he
pounded.
an-
Nuvecn & Co.,
banking
investment
to
' annual discounting; of this
UflnE uOinnPyUUIl
CHICAGO
equivalent
is
rina*^ng aurmg ana 1m
War IL
r
y f.
curi^nt
-
short time, but as
people, as well as
ChesterW. Laing, President of - monetf this c?7ated in/he form of
and is entlrely inflationary rn tts
the rest of toe world, see that we great rapidity in the last 40 years. John Nuveen & Cog
this-SereW
upoa the value of °^r
are achieving not only a balanced Perhaps the very rapid growth of break from industry tradition rebe a pennan,.nt thing.
Its exist-? ma?e5L
/
' l?
our
budget, but a permanent fiscal
country and its rapidly ex¬ suited from s §rowiii8 feeliii^ giicg msdc rather ineffective the
(2.)- hie strength siid nulit^ncy
stability, our prestige will rise and panding economy has given us a
the eompanys
employe^of labor unionshaveled to a wageour currency will be sought after
false sense of security..
that CARE's food packages for the inflation
for a
period of years
prtoe spiral in1 which wage inthroughout the world as it has
hungry were more in the spirit - Barring a great expansion of the creases tend to outrun increases in
slightly for
a
toe American
torlihg'of monetary clntrols o^
Answer Is
been in the past.
effect
All
we
for a
permanent stability in the
ment
of
Any temporary
•
will be the: price
more
adverse
we
pay
future.
-
This
must
be
done
in
a
sound
7 policy will continue in future ad; ministrations as well as this one.
"
economic
inflation
system
so
that
country will continue to pros¬
per
so
r
this
manage¬
permanently on a sound basis,
our
people will- be em¬
and realistic manner that will im¬
press the American people—and ployed and that our Government
the world generally — that we- Bonds will retain their place as
the foremost security
anywhere
mean what we say a»d that this
•
~
need is sound
further
without
our
Sound Management
This step will develop a desirable
climate for the other necessary
that
Christmas
than
impersonal,. money supply as a result of war
quickly forgotten corporate* greet-, or some other catastrophe, one
ing cards.
; *
' would
expect a slower average"
'*
John Nuveen & Co., the oldest. rate of inflation in future. Such'
of
„
largest .organization in the
States dealing in tax-free
Public Bonds (Municipal Bonds)
and
deficit financing as may
United
as a
exclusively,
It
was
maintains
founded in 1898.; tionary scale than that which
in Atlanta,, eaused the inflation of the 1941-*
offices
Boston,. Cincinnati,
been
We
Detroit,
In short, it would be* Angeles and St. Paul.
Economic Era many have
in the world.
the new
hoping for.
*-
Los. 1948 period.
7„.
Bache Appoint Lerner
will
require a vast educa¬
steps and give people a greater tional program led by the govern¬
sense of security in their savings
ment and in which all financial
banks, government bonds, insur¬ and commercial institutions should
ance
policies
and
investments participate and which will be
generally, as well as a feeling of spelled out in simple language so
confidence in our future economy. that
people in all walks of life
will have a complete understand¬
Favors Saltonstall Resolution
ing of the purpose and goals of:
The third necessary step would the program. Labor leaders recog¬
be the adoption of the Saltonstall nizing the value of this program
Resolution S1738, introduced by for their people will
certainly
Senator
Leverett Saltonstall
in want to share in, these activities so
Asst.
Foreign Dept. Mgr.
Bache
New
the appointment of Alfred;
Lerner as Assistant Manager of?
Department located
home office at 36
Wall Street, New. York City.,
Mi;. Lerner has. been in the in¬
vestment field for the, past five,
years..
;
*
;
in
„
,
,
lications
«■
have
•
been" spreading
and in the years,
comparable
periods, in
Here- the -resemblance-
the past.'
-* -
(3)
inevitably follow
*
f
;
Economic pressure groups
force tending
ceased., are an inflationary
to increase both prices and government- spending. Farm - price
World War L Instead, our price supports are a well-recognized
level now seems to operate on? a example. • Other pressure groups
,
v
TABLE HI
-
Consumer Price Index-
Decline in Value of U* S. Dollar Based on
£
.
■
v
-
Of U. S, Department of Labor.
-
,
* -f
Alton Securities Company.
.7
.
* Cemp«anded
Stobder Period 1940-50 (2^ years)
■m%
51%
22
-
■-5%-
-
'
t Ct:
25 7
No Chdnge
10*
Korean War Period 1951-52 (2. years),Stable Pericd 1953-55 (3 years).
..
Jtoraary-19W to December-199T (2 years,
.
.
5
•
Rile ot Discount-
in P-Hod
December 1940 to December 1957 (17 yearsl
Wartime 1941-45 (5 years).—____________
Immediate Postwar 1SI6-4S (3^ y^trs)
7L_^-
-
Aianal
Tctal
Decline
,
as to protect the
savings of the
Forms Alien Sees. Co.
;
working people in whatever form
JACKSON: MSss; —Bryamt M."
mum of
1% of the income re-v they^ may be. We must develop
ceived from Federal taxes each a feeling of confidence to the fu¬ Allenvi IhtoftcbvFoatoreBj BuBding^
is now conducting his, investment
year be applied to the
forthe national debt each payment of ture. The constant, detrimental business, under the firm-name ot?
FRASER
year, with publicity that so many of our pub¬
gradu¬
,
immediately, price - increases
thereafter followed those of other .wage increases.
war
firm's
of 1957, which requires
(among other things^, that a mini¬
for
„
Foreign
the
April
Digitized
http://fraser.stlouisfed.org/
reasonable provision
Federal Reserve Bank of St. Louis
—
The pattern of prices during the
Co., members of the; There has been no indication of a.
Stock Exchange an--, price decline such as followed?
&
York
nounce
the
be
be used
depression cure will probably
on
a smaller and'less
infla--
productivity. In fact, throughout
large areas of industry substantial
hourly wage increases, ^ coupled
with costly increases; in fringe
benefits,, are now regarded as a
normal annual event. During the
last twa years in 7 the United
States and probably in- Canada
also, there has been little increase
in real productivity per hour of
work. .• Under these * conditions,
-
"5%
3
:■
the.,
oppose/
The Commercial and Financial Chronicle
Number- 580%.
Volume-188-
such
of,
use-.
provides
basis torm/,and
in-w stocks constituted 30%- of the
^ assets of uninsured corporate pen:fi
wh^i eggtsmt this! swing to-* sion funds at the end of 1957, and
iri&bfeee has been due in that year 37% of: the net re-,
promptly/ suck w e a;P ^
contrast so strik/ tu inflation fears and to what ax-* ceipts of such funds, were invests
sheathed, at the sbghfe^ sign of tnglx-witti vtoose of the preceding tent it
has; been rdue to, other fac^ ed in common stocks, a higher
deflation mid" before any; drotp/ iq century;?* /
-/ ■ ;
;
1/-. > ; „•£*. tors, such as the" growth of pension proportion than in any preceding,
the cost vpf living has been ex^Itisonly to state an unpleasant plans and other types of social year.
f
weapons :>asi"idgber> mfe(»?esl x!a^les
fo^ afctbeheftoatit
no
be made
can
group
,
insurance
OTeased:-276.%;^/;-^';-::v:;-
■
,
■■
,
.;
•
31
( 2331)
ment prob,lenig. of substantial* prCH
portions which not alF Mfe* emn*
panies may be prepared to.undertake. However, considerable scope
no? doubt; exists fox: this type of
equity investment, particularly on
the part of. the. larger, companies,;
,
perienced.
v.:,////: /,.'a V; ^//f^t^thatr'there is. an, increasing security,, is difficult to, say. In any
} (4)v The nations of; thei. world ;;b.®liei. abroad that further infla/ event, it, has had its effect on the
life
insurance
and their* currencies are no longer tion^ jt notmevitable, is at least asset f. growth of
subject to the discipline of the:
possibility. Certainly, companies. The, annual growth of
Standard,/;ifc; • prices
within:
.worId,:including
a
our own,
hayq
hit,gSt^epStedyrand
creatures of governments, and are
little subject to, automatic
discipline from outside.
very
•
It
is!doubtful if
democracies,
mind
to
submit
frame
a
'""J*
of
type
.of
the
to
discipline
necessary to avoid mCertainly our experience
in the present business recession
would indicate that they are not
works and
tax cuts are
widely proposed, even when this
means budget deficits which can
only bo naet by the expansion, of
bank credit.
This, m turn,
° *?rf-V
u
^
4-u
?r
further lnflation when the climate
jri^
modern
Apparently
government
when
■employment
a
the record*
that
and
so
will
it
after.it declined? each year through
1957 when the growth was $5,300,- «e
-^stable curfar1 indicates
^
With respect to
000,000j
only period
the
all of the above
on
•relatively stable money value, the
Perrtury- from;*18I5'to 1914. Over
that period, we had- a relativelypeaceful world; Wars tended to be
of
in
assets
equity
One
ments.
-
-
had
over
ative course, the life insurance
industry runs the risk of with-
of the 43 companies had over 30%
in
drawing
large
measure
and property combined, and 13; out
of their assets thus invested.
from
,
some of-the most important func-
laissez-faire, economy of the time,
The
highest proportion irof^ assets.
commom
the mobilization of capital,
•the recognized economic responsibilities
of
governments*/-were
force
; The analysis of
,
in
stocks alpne was that of
in
assets
life insurance in
common
stocks.
These
equity percentages represent book
values
and might he higher if
^resehted in Table V points
strictly, limited. For example, the out certain trends within the in•maintenanpe'of full'employment dustly; In the 10 years ending
"was not then recognized as a gov- with'1956,. life and endowment
ernmental fUHetion,. nor was the insurance, representing the plans
maintenance, of prices ;of,r"basic which produce substantial reserve
commodities,. In the years 1911. to and bsse.t accumulation, declined
.1915, the-annual expenditures of from! 79% of total insurance in
the
United' States
Government force to 58%, while term insuraveraged $720,000,000, which is ance,. including group, increased
well under- 1%
of the present from 20% to 43%. Reduced to
.dollar level of such expenditures, dollars of constant
purchasing
taken at market values.
value of the
The book
stock hold¬
common
has
years
against
the
an
43%.
book
value
The
of
increase
their
:
of
their* total
over
Yield
to
Long
on
Settlements)
yield
Long:
on
Government Bends
was
l»Ub$6
4.3%
2.3%
1940-
,
•.•'4.6%
4.2%
4.8
4.8
3.6
4.4
13.4
5.3
3.2
4.8
T.O
2.2
4.7
5.4
4.3
4.2
3.4
3.3
4:9
6.3
3.0
2.5
4.9
5.3
3.0
3.0
1.4
1.3
3.1
2.9
United Kingdom
0.0
5.6
2.6
United
3.7
2.2
2.2
//
:
Italy—
Netherlands
Norway:
>
—
Sweden
__—--i,
Switzerland
,
—-
Rtates
—
the
seven
increase
year
in
assets
period end¬
,
v<
3.0
,
-
2.3
-
31.-.-
Endowment
Dec.
,;••■/
_■izz-L-
ljenm.|w»d
UlrideAd^
Group
QrpujJ
Additipns
28
-•••
1956
•
_/_£/.
79%
243:
Term >'? '*■
T
138
-
4%v-
35
47
11%;;
or Con»t#nt Purchasing Power
;
166.;..
..1956.-^
m,
8..;:
,
-•
formula, would
smoothing
long way
The two types of equity invest¬
ment media which suggest tbem-
go, a
toward4 ironing but- sub¬
stantial fluctuations in. th» asset
values
of
would be
common
an
stocks
and
important step in en-
abling hfe insurance^ companies
to substantially increase their^ inhappens to the value of common stocks. The former, if it vestment therein,
money during the life of a policy. is
serve its purpose in this re-*
guch a
suggestion seems no
In
its ; participating
assurance spect, cannot be subject to longradical
than
the* longbusiness, indeed, the policyholder term lease rental payments in a
accepted practice of valuing bonUB
haa a direet interest in the results fixed amount of dollars. In such
-in good standing at amertined
of the life fund; and each office,
case, it would become just another vaiues even though these values
in competition with the others, is contractual
money
myestment. joay for long periods differ* widely
anxious to do well for him. More¬ The rental must either he subject
fron^ raarket values. Many bends
over,f competition fey way of rates to frequent adjustment^ or it must purchased: during the low interest
and service » felt no less keenly be
geared, in some way to the period, of the 1940's and. eai^ty
in non-participating business. The earning power of the property.
1950,g have for extended,
trend toward* equities is a policy The profitable ownership of a
sjnce that time been selling much
aimed at growth and at some pro- large amount of real property on
taction against inflation.
It is this basis would raise manageContinued, on page'«
rational and. inevitable.
TABLE XI
One
does ..not
need
to
look
-
Total
Pension Funds vs. Life Insurance Companies
(Amounts in Millions of Dollars>
,
Corporate Fassiw
Total
Cam.
% hkQvm-
Assets
insured corporate pension funds
in this country have become heavy
Steeks
Stacks
11^
Imneatcd Assets
i
Cash
Can.
% in Cam.
Stacks
Staaka
&
100%
purchasers of
stocks, and,
1951—
6,870
812
432
1852—
8,505
14.4
16.1
Mm
594
4
100%
relative basis, such stocks are
the most rapidly growing part of
their assets.
In Table VI. this
58,544
60.336
1%
18.3
68406
791
14
t^47-4»=100)
42
34
40...... 118
Digitized % IncMMV'•' 25%
for FRASER
••
_
insurance
3
43,%
32%
the life
1%
186
130
.
that
175
,
2
20%
m%
as
assure
abroad for a similar trend in the
handling of funds accumulated for
the purpose of providing social
security in its broader sense. Un¬
(Spectator Year Book)
(Billions of Dollars)
Lilt 2nd
.
1946
of
London
investment
follows: "It is too simple at all.
small im the case of common
stocks, in. which* ease one-fourth
or* even one-third might ha
stituted. To be conservative,
dividend paying stocks might bo
carried, at market value* Buch> u
p^fl^
•
••/—"
To ac¬ might possibly/ be? considered? tog
complish this is not likely to be
an easy task, and it is not to be
expected that it can be accomHowever,
plished to perfection.
because a task cannot be performed perfectly is not a good
reason
for failing to attempt it
,
TABLE V
Life Insurance in Force in tT. S; Companies
dent
what
AnniyURekl* of.
France-
the
industry is merely in the business
of selling'money claims for future selves as at least partial substisettlement, and therefore need not tutes for contractual money inconcern
itself tod
closely with vestments are real property and
Money Depreciation
—
offset
element to
in this period. On the same basis,
./ (From Annual Report of Rank for International
Belgium *
Uenmark
an
trend
Annual Rate of Currency Depreciation vs.
Government Bonds
MhUted to rather small proportions ot assets.
/
Fortunately, a valuable* precewas recently set in establish**
declining real value of tbe prin- ing such a smoothing, formula- in
cipal. To rely on the latter prem- the case of preferred stocks. < This
ise
might prove
unsatisfactory formula or some variation theree#
since it requires an advance judg- might* well be extended to cover
ment of the rate of expected infla- common/stocks. Along-these lines,
tion and it might require the im- ifc might be provided' that; com¬
position of interest rates which mon stocks be written up or down
would appear usurious.
im the course of a* year by some
Therefore,
if
in
the future fraction of the difference between
money does not promise to serve their book on asset value* at: dm
as
a reasonably satisfactory
unit beginning of the* yeary on their
of long-term account—there is no cost; if purchased during* the* yean
contain
little, more than keep pace
with the growth in our population
•
/
extended
over
periods of years, or the fixed rate
of. return received is designed to
in ments
payable in money.
common
stock holdings accounted for 27%
TABLE: IV
•.
maintain its value
such thing as a perfect one—we and thein market: valuer at the end
doubled over the are at least encouraged to search
of the year/ The fraction used to
ending
with
1956, for more satisfactory repositories the case of preferred' stock i&
increase in their total of value than contractual invest¬ course, one- fifth. This fraction
of
assets
else, did
everything
The fact that money was able to
retain its purchasing power under
IS
PP
than
more
Of this,. $333>,000,000 was for the power, the growth, in life and
ing witk 1957,
Army and Navy* $105,000,000 was endowment insurance over this / The
"Economist"
for veterans' pensions, arid $222,- period was 25%, a growth which
comments
on"" this
covered
SSSS ortoS ^i»&-they
ings of this group of 43 companies
five
~
"000,000
to® fluctuate muriB
widely than has the eostt ot
type invest¬
company
half of its assets in common stocks
localized/ and- military establish- "tions in our society which it has the; Scottish Widows which had
ments consumed only a smalbpart heretofore helped perform to a
41.4% of assets thus invested, but
Of total productivity. Government very/important
extent, namely,
eight out of the 43 companies had
budgets/.were low; and, in the th^ encouragement of sayings and over 25% of their, life insurance
.
^
more
a
also seem like a defeatist attitude
in itself. In following such a neg-
record when
world
experienced
modern*
consumption.
mwn® a
/pSil?^ °£ the
ponditioris^ our- present ^ plaee: in j psfments imthat technical operahistory
in sharp ^nlr^s^witli/UQi^tii; the light of events might
the
over
trifs
full
a
generally choose the
former.:
(
a
choose
must
between the maintenance of
^
.
Public
J^n+v»
extefr in common stocks or sharea.
VfZ
•
flation.
a much broader fl&ftd
investment nq douht
equity
aval^ble
drop, of 11% from 1954. energy in a flowing stream. They
purpose^., « .
In view;-of the rising trend of can be stored; for future use only
Equity investments, and; most
dollar incomes and savings of in¬ by transforming them into some
dividuals - over
c o m m onthis
period,
it Other media, j.ust as the energy in particularly,
stocks^
an electric current can be stored
might be introduced: more widely
seems
that
life
insurance
has
by transforming it into a chemical into the structure of life insurtended to become a less favored
pened in other comparable his¬ medium for the accumulation of change in a storage battery, or ance by two approaches. The^conxthe energy in a stream by storing panies could continue to sell polltorical periods. In fact, there is savings than formerly.
water behind a dam. Media which cies on the same fixed1 dollar basis
widespread feeling that further / When faced with such a dilem¬
are commonly used for storing the
as heretofore,
at; the* same- time
ma as now confronts the industry
?„
energy represented by the savings adding substantially to* their cornon this continent, it is interesting
,
i!
process are real estate ownership, mon
stock holdings: The- long**
to observe how others in some¬
bonds, stocks, bank deposits, or term capital appreciation and* ulwhat similar; bircumstances have
*
,
"
f
life insurance, all of these repre- timajtely higher rates of return
reacted;;::;;;/!:/;/-'/': /
Dilemma Facing the Life
*
senting a claim on future produc- whiqh would be expected* to reIn
the 1 United
Kingdom
the tion.
The effectiveness of such suit from such a policy could he
Insurance Business
postwar rale of money deprecia¬ media in
preserving or even en- reflected in more libeinl dividends
The impact of currency infla- tion has been *
considerably more hancing the fruits of savings can, on
participating policies:, K such
.tion and the strong possibility of virulent than here, resulting in a of course, vary a great deal. If higher dividends were-paid, in ihe
decline in the purchasing power
they prove ineffective to the point fprm of paid-up* additions* to the
further inflation faces the life in of the pound to about one-third of
where a large amount of loss in face* value- of
the* policy, this
surance business
with a difficult
its
1939
value. v Without
much
real value results, then the sav- would; of course,, provide* some
and cruel dilemma. To adjust its
doubt, this inflationary trend has ings process, which is the life offset'to inflation.
i
entire technical operation to the had a substantial effect on the in¬
blood of our economy, will be dis¬
assumption that inflation is going
To* accomplish: an increase in
vestment policies of the British
couraged and slow down. This has
to. continue rather
indefinitely life insurance
companies. At. the already haooened in some coun— equity- investments: in? this,' woy%
jhto. the future on a substantial
end of 1957, 43, British insurance
'
two, things would? probably
,SCale wiould be a difficult, if hot
offices had on average 17.7% of
The ultimate justification for
1
impossible, procedure and 'Mould their
life, annuity, and capital re¬ investing life insurance reserves in many cases would have- to^ tp
also^ no doubt, be construed as a
demption assets > represented by largely in contractual obligations liberalized. Also, some smoothing
defeatist attitude toward the most
common stocks at book value, and
s^riou^ economic problem of our! another 9.1 %'\.represented by real payable in a fixed number of eur*time.'^ However, to make no adproperty, or a total of nearly 27%
~
western
most
in
are
However,
one
duction
pr<^yeu,vto. be unsatisfactory units,:
of lp^einx account. Nearly all
of them have lost at least;, half
to deflate- prices back into line. of their purchasing power during
The processr was usually accom-r that period, and some of them
panied, by some unemployment much- more; - There seems little
and economic discomfort.
Today k?pe of them regaining any sigcurrencies:
are
exclusively
the nificant part of this loss as hapcouhtry rose unduly, imports' roser
exports
credit was^ restricted. This tended
savings are
thing in the world that canthese assets increased at an irre-. not be saved. They are dynamic
rather than static by nature since
giilar rate: to; reach a peak in the.
year 1954; of $5,946,000,000; There-* they represent the excess of pro¬
the .last 17 years the
currencies of most countries of the
International Gold Standard.. Under the classic working of -this
It has been said that
/
for
New Investment Media Needed
158
23Q%~*
2
3
.
on a
„..
;
trend" in
209,
3«1
common
pension-fund investment
that, of the
insurance companies.
is /compared*^^ whh
,
.
major
Based .en marke* value, common
537
1953—
10,222
1954
12,153
im
i.w
2m
1055—
14,230
2,858
20.8
14
3,774
4.770
22.7,
7243D
76401
929
16,639
965
24.7,
80,750
1.085
14
U
*1956
1857—
19,316
•Securities an# Exchange
Cummlsslan.
U4fe InsumnenAssaefatlan of America.
The Commercial and Financial Chronicle
32
31
Continued from page
^
^
,
dividends, and yields are annual
averages of the month-end fig¬
ures.
Unfortunately, this series
.
amortized values, depending upon whether the re20% below, serve accumulated in such partic¬
ipating shares was worth more or
Technical Suggestions iess than the conventional reserve.
In
which
would
life insurance
the
At the end
period the insured
then current value
business is as pany.
both to
issued involving
be
might
nolicies
of
tvnes
rw+oin
market values which
than
for
eould not be earned into orchnary
examples.
for the^irst 20
Purchase a fixed dollar
Sre endowment poficy The 20- 20-year term policy. The rema nterm nfrt t^ld have its reder would be invested in equity
eerves set up
in the traditional shares to go
Reserve'at
vear
years to
20-year
term policy and a
S'SMS thPe °end3o1 20
tudty.
serve,
all
or
The pure endowment rehowever, might be invested
in substantial part in equi-
duction,
was assumed to be re¬
annually at the end of a
of experience and reinvested
in the stock averages at that time.
The
three
20-year
periods
chosen for experimentation had
widely differing
characteristics.
The
1915 - 35
period
embraced
Pty?S5=
llf
vv0UJd be a variable amount de¬
pending on the dollar value of
amo}\
prior to ma-
,
the equity shares m the reserve,
The reason for selecting 20
years as the initial term in all of
these cases is because experience
has shown, that except in the most
unusual circumstances, a reserve
of dollars de- intelligently invested in equities
behavior of the over such a long period will tend
equity investments to
consist of participating shares in
the
company's
entire common
stock portfolio. While the amount
pavable at maturity would be a
such
ties,
number
variable
The
ceived
luto^ontributef The
nitarc^mo'wZ
in
event death occurred
profits.
and
expenses
World
War
I,
the
stock
guaranteed amount for a long period of years and who were prepared to more fully and immedi-
If this reserve were to
entirely in equities,
*uch minimum guarantee might
run
as high
as 80% of the face
amount
of
the
policy without
much risk to the company, while
invested
be
a
ately trust themselves to an equity
position, a shorter initial period
of fixed term insurance might be
of the re- in order.
permit a
partial investment
iserve
in equities would
A
type of 20-payment life
new
broken down into those applying
20-year term policy and to a
a
life policy deferred for 20
The 20-year term reserve
•
i
*•
,
plan might also be devised along
eomewhat similar lines. The preaniums
and reserves would be
to
^
Some Experimental Calculations
Certain calculations based on
the market price behavior and
>ields on stocks over vanous 20yeaf pefnPds of time ^ f
claal °* encouragement to the
?qoo e/U8i oil10??' j°f
e years
? ? 0' ^956 Moody s common
stock averages for 200 stocks were
jhigher percentage guarantee.
-
-
„
years.
would
used; ^his common stock averf^e_.is~ai0on'
eilV
be invested in fixed-dollar media
to provide for the payment of the
<ace amount of the policy if death
A ^ f1 ' 25 railroad,
utility, 15 bank, and 10 lnsura2c® st™ks' Eack stock is weightInvested entirely or in substantial e
by. the number: of shares cuipaif in equities which again might r
y outstanding. In. computing
should
take
could be
reserve
participating the averages, adjustments have
company's common been made for all stock splits and
form'-of
the
Chares
the
in
account. The amount payable
20 years
Sjac?r!
in the first 20 years.
occur
The deferred life
.would be greater
after stock dividends, so that the series
or
less
•than the face amount of the policy
1
;
,
,
,
/
throughout
comparable
are
period
Market
covered.
the
prices,
TABLE VII
Accumulations Resulting From Investment of $100 Per Annum in
Common Stocks vs.'Fixed Dollar Accumulations With
Mortality
Experience
At the End of Various Periods
Factor
None
1929-19491-
1936-19561-———
5 Yrs.
$595
None
,
'$ Accumulation at
3V2%
450
None
-
462
1915-1935s::—
20 Yrs.
1,204
$3,365
4,186
1,620
3,904
CSO Initial Age 30
CSO Initial Age 30
____
Pure Endowment at
'
467
1,872
2,927
3,696
4,590
11,391
4-——.
CSO Initial Age 30
'1915-1935______
CSO Initial Age 45
CSO Initial Age 45
1929, and the period
ended in 1935 when recovery from
the
depression was just under
In 1935 the Dow Jones In¬
Stock Average was only
level.
The 1929-49 period began in a
year when Moody's stock average
way.
dustrial
at 38% of its 1929 average
at
was
a
peak level which it did
not
regain for 25 years. It em¬
braced the period of the depres¬
sion and of World War II, during
which excess profits taxes tended
to depress corporate earnings and
The
most
*I)ow
Jones
Industrial
5,275
4,494
1.299
2,712
476
1,969
4,596
5,558
13,990
573
1,314
2,331
3,863
.
'
No. of
Periods
.
Period
1
.
.
-
year—,87
83
78
5 years.
10 years
20 years^—,,
30 years———
.
'
;
table vm
Periods '
of Gain
in Value
part
for the generally excellent
experience of the accumulation
.
50
56
,
65
.68
58
,
'
While the data in Table VII is
not
all-embracing, it does
.27
13
.
57%
clusions.
48.6
67.3
63.0
to
seem
in¬
accumulations.
practical defect of such a
type of policy would be the sud¬
den change in the amount payable
in
0
some
significant
con¬
period this has been almost uni¬
in
the
past when this was not
but such a period would
have to end in the depression
years 1932, 1933, or 1934, which
were
very
exceptional years in
our
economic history.
It is un¬
likely that such a period will be
true,
repeated.
Even
shorter
over
ac¬
cumulation periods than 20 years,
the
comparison has in general
been favorable, to
In
common
stocks.
determining the end results
as are sum¬
marized in Table VII, the level of
the stock market at the end of
the period is
However,
out
a
at
extremely important.
it is not necessary to
period which ends with
a
relatively high level
such
accumulations turn
superior to fixed-dollar
accu¬
mulations.
equity
One
0
0
a
more
draw.
Some
on
common
94
an
100
of the
one
earnings per share
have been
compared with the Gross National
Product as computed by the De¬
partment of Commerce. As pre¬
viously
stated, these
per-share
earnings have been adjusted for
dividends
stock
so
to
as
indicates
that
extended period
over an
which
splits
comparable
a
table
The
series.
stock
and
produce
of years,
depressions
included
has
20-year term.
a
World War and
substantial inflation, cou¬
pled with a revolutionary
in¬
crease
in taxation, earnings on
likely
these
at
end of the initial
after the
or
That this change is
to be substantial is indi¬
cated by the accumulation figures
in Table VII. In the case of the
first three sets of equity
accu¬
mulations shown in
this table,
which do not contain any sur¬
the amounts at
of 15 and 20 years, with
the end
factor,
endowment
issue
pure
and
booms,
quite
shares
fairly
maintained in the form of
ers
have
them
of
a
to
Hold¬
well
earn¬
ings their share in the total na¬
tional income. It is quite true that
there have been fluctuations in
this
relationship.
at the end of an
normal
equal period of time from issue.
relationship
the Gross National Product.
1929-33
ages
maintained
have
consistent
fairly
at
for
reserves
and 45
30
the
exceed
exception,
one
stick.
cannot
be
The period
regarded as
by any economic yard¬
the late 1930's selling
In
This suggests that some frac¬ prices of products tended to run
tion, 25% might be a suitable one, ahead of costs and corporate prof¬
endowment premium its tended to recover rapidly, with
might be invested in stocks and a setback in 1938. During the war,
accumulated
within
benefit
of the excess profits tax restricted
survivorship.
This part of the the share of corporate profits in a
stock accumulation could then be rising
Gross National Product.
of the pure
paid as
benefit
supplementary death
a
in
in benefit
the
addition to
payments at the end of
initial term would be
some¬
on
or
gests that it would be
sible to guarantee some
values
cash
of
level
also sug¬
in the
case
policies. It appears likely
that
such minimum
guaranteed
cash values could be set at not
less than 75%
of those allowed
in the case of the same initial
amount of fixed dollar insurance
for the same premium and age at
issue, without exposing the issu¬
ing company to appreciable risk.
minimum guaranteed cash
the
propitious time to with¬
in
existence
be
forced
case
of fixed
involved
the
which
rather
prices.
Reasons for
Satisfactory Behavior
Accumulations
of Stock
One reason for
behavior
of
the satisfactory
stock ac¬
stocks
proper conditions.
electric
utility
industry
there
some
fluctuations
in bond
large number of
in which a life
company might invest
very
a
insurance
have
wide
in market price to
they would no
under
risk, in view
taken place
have
life in¬
a
would care to
longer be attractive.
This train
of thought seems erroneous
on
several counts. There are in ex¬
dollar reserves
some
up
where
levels
common
justify. After all, the
guaranteeing of cash values in
which
invest, and if heavy life insurance
company buying were concen¬
trated in these stocks, they would
istence
tions might
in
company
surance
supplemented by
such additional
amounts as the
behavior of the stock accumula¬
values could be
the
the
heard
These
has
several oc¬
thought ex¬
writer has on
casions
quite pos¬ pressed that there are a compar¬
minimum ably small number of blue stocks
of such
part
deposit in the
By Life Insurance
The
The data in Table VII
Investments
Companies ;
ing Common Stock
what mitigated.
of
In the event that the initial pe¬
ends at a time when stocks
riod
83
'
be
In Table IX
life plans with guaranteed
payable on death
but with the
balance of the premium over and
above that required to pay for
be
to
important in this paper.
for Moody's 200 stocks
dollar amounts
to
believes
writer
most
the writer
insurance
How¬
It appears that over an
versally the same. It would be
possible to pick a 20-year period
67
-
0:
4
V;
Gain In Value
-
1;
0.
;
37.7
in the first 20 years,
vested
they have been able to
through to net: earnings
after taxes. ..Such earnings as a
percent of sales have fluctuated
by individual companies and by
industry, but for business as a
whole the showing has been a rel¬
atively favorable one.
It would
not
be
possible to demonstrate
this accurately .without a great
carry
sertion is
34.7
75.5
term
which
Allowing for these factors, the
the fixed constancy of the relationship be¬
dollar term insurance.
The re¬ tween earnings on these stocks
extended period of years common
mainder of the pure endowment and the Gross National Product is
stocks which are selected with an
premium would be accumulated fairly impressive. Earnings per
average amount of skill and good
in stocks with benefit of survivor¬ share have tended to represent
fortune are a more efficient ac¬
ship and would be payable only throughout a fairly constant share
cumulator of dollars than fixedin the event of the insured living of the Gross National Product.
dollar investments which yield
to the end of the term. By such
3%% on average. Over a 20- year
Some Fallacies and Facts Regard¬
an arrangement the abrupt change
encourage
of the proceeds
% Change ©f
.
Same
..36.
.,
,64
58
this period.
over
might choose to leave all
Periods
in Value
_
of
form of equity shares to wait for
of Loss
.
available.
a
selling
at
relatively
low
levels, the insured or beneficiary
Change in Value of Stock Prices 1871-1957 Inclusive
Length of
38.0
36.2
Earlier in this paper
such
long period of years have done
pretty good job of maintaining
the
percentage
of
their
sales
ever,
End
of Period
of Period
1873-93....
suc¬
the general truth of the as¬
implied in the data pre¬
sented
in Table IX,
which the
Index
Index
Beginning
Period
the
deal of statistical research.
follows:
as
are
"
stocks.
the
covers
years
the 1950's, which accounts in large
to make
2.048
1 Moody's 200
period
20
braced the stock market boom
stocks
615
Averages.
of its 1929
peak in 1936
which they did not regain until
.1945, nine years later.
The last
part of this period, of course, em¬
3,202
.
were
vivorship
Common stocks hit
Pure Endowment at
3 ¥2 %
1936-56
recent
2,105
CSO Initial Age 45
1936-1956r
still at only 54%
was
level.
1,249
462
.
period. These periods and the
over them
behavior of the index
suggested 20 year endowment and
in
562
CSO Initial Age 45
1929-19497.
lower than it began
index ended
the
of 20
which the
in
20 pay
crest
seek out
-
years
to
a program is the fact
American corporations over
a
1
boom of the 1920's which reached
of such accumulations
1,997
4,714
2,456
4,128
consecutive
a
fundamental
of such
that
four periods
were
its
10,311
555-1,214
603
1,945
454
1,237
CSO Initial Age 30
3 V2%
15 Yrs.
$4,446
2,333
10 Yrs.
$1,889
.
None
1929-19497
1936-19561-
3"H% Int.
Market Value of Fund
Survivorship
Period of
..
1915-1935*..;...
18742-93
There
market
pending upon the
common
stock account, it would to represent a larger dollar accuseem
that
the
company
could mulation at the end of the period
without ' much
risk
guarantee than a fixed-dollar reserve. For
some minimum amount depending
shorter periods one cannot feel so stock market values.
In 1949, at the end of the pe¬
upon the proportion of the pure confident, of this. For those inendowment reserve invested in sured who cared less for a fixed riod, Moody's 200 stock average
Equities.
More
cess
-
marized in Table VIII.
return
.year
the
years, to which
V2 % less
was
dividend
dividend return, less the ^^ de¬
in!oa wouFd° bT used"
20
the rate of
actually achieved on such values.
This deduction was made to allow
best
mtadcan
in
summarized
ages
that^dine seemed to
frX'Uir investments #£1 "to seems*toteTrea£™ ?n
SfL- ®^vhy the same line of thought
trated by some practical
been
level of the market.
weight equal to the price
a
share multiplied by the num¬
ber of shares outstanding.
t
per
flved'doIlar^toDe if*
coiSttoraaf
1929, 1936, or 1957, when stocks
attained peak levels; and a larger
number of shares would
The period covered Includes 87
single years, 83 periods of five
in each of 20 consecutive consecutive years, 78 periods of
years, 1915 to 1934 inclusive, for 10 consecutive years, 68 periods
of the 20-year example, with the accumulation of
20 consecutive years, and 58
might use the being carried through to 1935. In
periods of 30 consecutive years.
of the reserve making such an
accumulation, a The behavior of this stock index
eeonomfc rate of return was allowed on in these various periods is sum-*
more
•follows:
have
calculations
Table VII, I assumed the invest¬
ment of $100 in the stock aver¬
far-reaching suggestion Here again some substantial miniinvolve some basic mum guarantees might be made
technical changes in the nature of without material risk to the comA
which
&
Index
Stock
Common
the
for
ceived
of 30 Stocks.
making the
age
Gometimes as much as
Some More
Cowles
Alfred
the
on
be pur¬
period 1871—1937 which
chased in periods when stocks
in 1929 and so for has been grafted into the Stand¬
ard's Statistics Index which began Were at relatively low levels. The
common stock experience prior to
that time resort had to be made about 1918. In compiling these in¬ average cost per share, therefore,
dices each stock price has
re¬ tends to be below the
average
to the Dow Jones Industrial Aver¬
their
l>elow
based
Associates
only
begins
Inflation and Insurance
;
Thursday, December 4, 1958
.;
.
(2332)
of
are
In the
alone,
about 130 companies
_
of
stature, at least 105 of which
annual revenues in excess
In
$10,000,000.
past the
the
of the smaller, of
these companies have been much
more
rewarding than those of
stocks of some
some
of the largest
well continue to be
at least 69
and
may very
so.* There
substantial
gas
are
utilities
common
cumulations, even in the face of
conditions which at first
in the
country, of which 46 have
market
,
additional
lone-term
hv
light
is
shed
behavior
shHv
of
of
index which goes back over a
period of 87 years.
This index is
annual revenues over $10,000,000.
glance would seem to mitigate
against the process, is the bene¬
ficial effect of dollar averaging.
While these industries may be ex¬
As
a-result of this, fewer
would be bought
shares
in such years as
treme
examples, they point to the
fact that the number of common
stocks
from
which
an
insftitu-
.Volume 188
tional
Number 5800
investor
may
.
.
.The Commercial and Financial Chronicle
properly
choose is very large.
One should not lose
sight of the
fact that bonds, preferred
stocks,
and
stocks
common
are
simply
media through which
savings flow
into investment. The
supply of no
class of such media is fixed in re-
property in terms of dollars, go
entirely
to tne common siockholders, as tne holders of tne
bonds and preierred stocks have
only fixed dollar claims,
Likewise in tne industrial field
very large amounts oi bonds have
been
issued in tne last
Id
years,
dend
only,
with that
may not compare well
bonds and mortgages.
on
This is held to be
an objection to
the former from the point of view
of a life insurance buyer which
The
real
return
on
pie who will buy them.
been purcnased by life insurance
companies. If a market had not
stocks, of course, accrues in two
ways, from the cash dividend paid
and from the earnings retained in
thus
been
provided for
these
bonds, these industrial companies
would have had to issue a much
larger volume of new common
the
stocks than
mean
If bonds
and preferred stocks could not be
sold readily, or if
they could not
be sold other than on a
very high
yield
basis,
Stocks
then
would
be
mOre
common
issued
and
the
supply of these increased. Again,
take the utilities as an
example. Jt
has been their custom to raise
hy
far the greater part of their outside capital requirements
the sale of
bonds, and to
through
a much
lesser extent by the sale of common stocks.
At the end of
1955,
about half of all public
actualljrthe case,
This would have tended to depress the market for these stocks
and added to their attractiveness
was
potential purchases,
as
At
the present time, taxable
corporate bonds "are sold very
largely in what may be described
as a captive market.
This mar¬
ket is largely provided by instiby life insur- ,tutional investors which, by law
utility
bonds
ance
owned
were
companies. These bond hold-
ings, purchased largely
last
15
whole
have
years,
been a
over
not
the
the
on
rewarding invest-
ment.
Generally speaking, they
have been poor receptacles for the
retention of real value. Not
only
has the currency in which
they
payable lost value, but their
market
prices have
tended
to
are
shrink
as
rising inter-
stocks
common
of
these
utility companies, on the other
hand, have been purchased to
only a small extent by life insurance
because of the nature of their
of
example,
stock
in
companies.
By any standard
of comparison, they have been a
be
are
As
so.
progressed,
the
as
con-
inflation
public
commissions, either
or
likely to
their
on
has
service
own
result of pressure
a
from the courts, have had to
pay
increasing attention to reproduction costs in setting permissible
levels of earnings for the utilities,
benefits
accruing from this
trend, which is in
the
.
upward
The
pur-
part
'to
offset
the
of
interest
of it
as
any
perhaps
all
rean
loss in the real value of
principal, and not
as an inUnfortunately,
learned after the
nature
minor increase of one-tenth of
over September, 1958.
is
largely toward tax exempt municipal bonds, common stocks, or
some other type of equity investment, such as mutual funds or
real estate.
It is
the writer's
Stock Investment
is
It
of
captive
size and
market
for
may even
corporate
have started to
decline. As has been pointed out
previously, life insurance assets
appear
to be
growing
at
less
a
rapid
rate than formerly and
pension funds, particularly the
private ones, are directing their
attention increasingly toward
of
the
not
/»«■[?,ducL
(Billion
Famines
$)
1956
412.4
1955
390.9
1954
360.7
1953
per Share
200 stocks
2.1
9.25
2,2
9.39
2 4
2 2
7.54
2,1
2 1
363.2
7.25
2.0
6.80
2.0
22
328.2
J»50
6.80
2.1
22
7.67
2.7
2.3
5.94
2.3
2 3
285.1
1949
257.3
257.3.
6.48
2.5
1947
4.93
2.1
3.48
17
1945_____:
213.6
2.97
L4
2114
315
1.5,
3.6
159.1
3.10
.1.9
3.17
2.5
J?4®
1939
100.6
2.67
2.6
91.1
2^2
2.23
2.4
2 4
35.2
1.40
1.6
2*6
1937
90.8
2.79
3.1
32.7
2.57
3.1
.72.5
1.69
2.3
65.0
1.17
3.8
19
.90
3.6
.43
.7
{.9
2.0
2 5
'
>
1933—41, '
56.0
•
1932
,
58.5
1931—; 76.3
1930
-
1.55
91.1
,1929
•Earnings
3.03
104.4
'
4.91
share
per
In
cents
divided
by
TABLE
r
and
suspicion.
k now ledge,
V"
.
,
Product
in
to
crawl
before
it
before
it
runs.
walks
Oiie
is
than while
handling
a
indi^dual stock investment
must be
in the working
Until
this
staff
has
been
billions
tle
—
l
•
.
discretion
ment staff.
left
•
the
to
*
-
—40%
_September 1929 to November 1929—
April 1930 to July 1932
—48%
ow
seems
increase, but has it not al¬
is
revision of the tax
companies.
a
insurance
indication
no
will
matters
shape
how
to
as
up,
but there
to be more general thought
been a cardinal principle of
injured in a suit against a
COrporation that the latter is to
«>»
be really "taken?"
has
it
not
Life
been.
based
now
companies
are
underwriting
011
results, and it has been somewhat
difficult
the
We
found
have
much
more
hopefulness about the underwrit¬
ing outlook on the part of the in¬
surance
company
officials
to
whom we have talked recently.
More
increases
rate
been
have
granted, particularly in the trou]desome motor vehicle lines, and
more 0f the increases are making
Columbian National
of
The
Life Insurance Co. of Boston.
merger
is now being checked by
Connecticut
and
partment,
seven
De-
Insurance
pany.
very
aw
iww*
„
complication
serves, etc.
Also a
arises over the fact
that there Is
important group of mutual
companies and a very large num¬
writers. The
former may be said to belong tothe policyholders;
the latter to
an
ber of stock company
stockholders,
a
very
general sense the
companies favor taxing only
income
from
investments,
the
present
procedure.
The
main
body of mutuals, large and small,
favor taxing both sources of in¬
jn
stock
The
come.
likely
to
.
additional
be
tax
is
large
very
not
when
spread over more than a thousand
life
companies;
the
and
market
in life stocks seems to be saying
that
it
will not be
too
onerous,
will
re-
stockholders,
but
policyholders
also, ought to keep an eye on the
hearings.
»
This is the second of the
iarge fire units to get into
Two With E. F. Hutton
life
business, Insurance Co.
of North America having already
set up its own life department,
And,
of
course,
the move is
likely to continue.
pany with an
a
However, not alone life company
shares of Hartford Fire
Continental
at
the
10 shares of the life com-
for
to
taxing that part of the business, what with provisions for re-
approved,
shareholder
Columbian
ceive
if
arrive
method
of
Casualty,
com-
a
important .position
in the life field via two
affiliates,
(Special to The Financial Chronicle)
LOS
ANGELES,
L. Fisher and
'associated' 'With
now
are
Hutton
Calif. —John
William S. Watson
&
623
Company,
Snring Street
]Mr
Fisher
E;
F.
South
was
for—
merly with Merrill Lynch, Pierce,
Fenner
&
Smith
j^s gone over to
NATIONAL
a
com¬
stock program is continuity.
The rate of buying may be main¬
tained at a constant level over ex¬
Point
39
66
—47%
.
64
195
—86%
41
March 1937 to March 1938
—49%
97
October 1939 to April 1942
—40%
93
May 1946 to October 1946
—25%
160
June 1948 to June 1949
—17%
161
January 1953 to September 1953
—14%
254
July 1957 to October 195?
—19%
419
of
life
on
invest¬
.
A valuable attribute to
31
—49%
November 1916 to December 1917—
November 1919 to August 1921
subject
pers?naLi?" that the levy wiU be lieavi?r than
GRINDLAYS
A Top-Grade
AND
OVERSEAS
■
-of Decline
♦
—46%
January 1906 to November 1907
.
,
congressional committee is
about to
start hearings on the
A
BANK LIMITED
Conservative Investment
mon
Drop in
Stock Prices
June 1901 to November 1903
stock dividend
a
be paid.
331/3%
of
ways
the
portfolio is
Co. that
surance
averaSe in~
1947 to nearly $90,-
in
proposed
by
Hartford
Steam Boiler Inspection and In¬
the fire field by .
'
built up to a level where it has jts
acquisition of National Fire of
Mitchum, Jones Adds
the
confidence of the manage- Hartford.
We are witnessing
a
(Special to The Financial Chronicle)
ment, the carrying. out of any trend toward "bigness," just as it
LOS ANGELES, Calif. — Davie?
common
stock program will be \s
taking place in the banking
difficult. It is different from the and industrial fields. Presumably, T. Driscoll is now affiliated with
case
of bonds where individual
due course, such "bigness" will Mitchum, Jones & Templeton, 650
purchases may be authorized at invite investigation and opposi- South Spring Street. He was preperiodic meetings of a finance tion as in the cases of First Na- viously with Hooker & Fay.
committee and comparatively lit¬
X
■
an
held.
now
is
It
JESTS,
shown that
This may seem to be a fan-
000.
tastic
Company
,
-
there had be€n
cases
share for two
new
one
There
was
crease from $2'585 in
in
a
out
in¬
great
a
awards
study, it
jury suits
brings
state
been
jury
on
healthy amount
It will include a
while running
staff.
17
Major Declines in Common Stock Prices as Reflected by
Dow-Jones Averages of 30 Industrial Stocks
*■
has
in
Office
a
required
walk
an
3.4
National
of
placed
4.7
Gross
,
of a
common
day to day and
hour to hour proposition. Therefore, a good deal of responsibility
as to the selection and buying of
2 4
1
under¬
themselves felt as time passes and
old policies expire.
with caution,
An important addition
to the
patience and
fire-casualty companies acquiring
basic humility.
It is no field for
life units is the proposed take¬
a
perennial optimist or a pro¬
over by
Hartford Fire Insurance
of
The
2.4
1934-
skill, which is a
...
relative
thing, will be
judgment,
stock
25
1936.-™.'.
>1935
This
...
worse
22
-
required in
fixed
dollar
of
walking.
20
125.8
;—
and
type of invest¬
unlikely to stumble badly while
crawling, and one can stumble
i.?
1941
1938
higher
a
that
than
purchas'e
and
2*5
1942
.
ment skill
content
1 8
,
likelv
Keiy
type of investlikely to be built
up over night and an institution
embarking in this field should be
1.6
3.10
192.5
,
ri^ht
is
s
process
P
css
a group of prob¬
lems, trials, and doubts far ex¬
ceeding in intensity and continu¬
ity
those
encountered
in
the
making of fixed dollar investments. It is probably a fact that
the intelligent handling of com¬
mon
stocks and other types of
This
2 4
209.6,
v
easy
the
in
an
ment skill is not
2^
232.2
1946__
1943-
The
A
•
that
in
there
moter.
2 1
345.4
„
1951
better
a
blending of daring
along with much
$9.10
;
is likely to be
compounded
Average
that
stock
common
to be beset with
purely
Running
per
Share to G.N.P.*
this
crease
leading alwavs
direct
,
Ratio of Earns,
of
Vestment Va1 SSE -«
In this
company
the
toward
Information
surance
county
intention
infer that
paper to
media.
jj Year
434.4
the
ehuity investments.
equities.t,-requires
'? f?metimes P°inted ouJ that somewhat different
on some common stocks,
taking into account the cash divi-
most welcome as a con¬
is
writing showing.
A study by the Oklahoma In¬
Problems and Pitfalls of Common
of
Security
by
-
the improvement that is taking
tribution
only
was
Connecticut
of
;New Haven,
Seasonally, they should be on
Northern
Insurance of New
the
uptrend
for
perhaps
six York is to issue a stock dividend,
months; the winter months bring one new share for each share
a greater burning ratio, what with now held; and at the same time
defective
furnaces,
upset
oil will issue rights to subscribe at
stoves, and much overheating. But a price still to be announced to
event.
Ildluxej ?1 the yield
..
revaluation
1957
.
a
this
dividuals
In¬
,
uals unless these bonds happen to
Gross National
1
basis
place
Investment by innow
directed very
its
over
demnity Company.
This, how¬
ever, Js! different, as the Indemnity company has right along
been wholly owned by the par-
to 10%
terest return at all.
Common Stock Earnings
Compared With Gross National Product
-
-
of fixed interest media
case
ceived,
extent by individ-
12-month
a
mergers,
of Sail
Insurance
-
large
any
on
is to take
.
.
pension funds,
Corporate
bonds
which
fully taxable are no longer
chased to
reports
Fund
Francisco
..
companies and public and private
are
monthly
of
speaking
And,
Fireman's
they had been running 5
higher than the preceding
cruing to
like period, they are now trim1about 7.1%, of which 4.1% was
ming that range. In the-first JO epf, and now that multiple-line
paid in cash and 3% was retained, months of 1958 they were 3*3% writing
is
permitted
in
most
The latter was about sufficient to higher than in the like
period a states, the matter of competitive
offset the rate of inflation then year
earlier, > according; : to- the operations is of no consequence
going on, so that the 4.1% could National Board of Fire -Under- here.
•
'
at least be regarded as a real net writers* October losses were 5.6%
Also on the way is a take-over
return.
s
below those of October, 1957; and of Fire & Casualty Insurance Co.
liabilities, feel that they must in- is, of course, different. There the
vest largely in fixed dollar media, interest
paid is the sole return A
The largest segments of this cap- realistic bondholder of the last 17
tive market are life insurance years would have had to regard a
TABLE IX
1952
130.55,
and paid in diviThe real return acthe stockholder
was
bonds has become rather static in "direction
an
of
$9.26,
companies, and
The
value
dends $5.31,.
opinion that the above described
volition
For pany losses, are materially more
Moody's 200 -hopeful than for a good while,
(Table XI) had a Whereas for a long period of
1956
market
much more rewarding investment
media than the bonds of these
tinue to
ultimate
Insurance Stocks
—
A miscellany of insurance notes, tional
City Bank and
County
Fire losses, an important com- •Trust, and
of Bethlehem Steel
ponent in total insurance com- and Youngstown.
stockholder.
average
earned
the
for
the
This Week
*
be convertible.
result of
a
est rates.
The
or
business
benefit
By ARTHUR B. WALLACE
common
a
large proportion of which has
Bank and Insurance Stocks
is trying to maintain or improve
the average yield on its funds.
lation
to the others.
Bonds are
issued only because there are
peo-
33
(2333)
>•'
Almalgamating National Bank of butt* Ltd.
and Grindlays Bank Ltd.
THE BANK OF
Head Office:
tended
periods or it may be made
to fluctuate depending on relative
conditions in the stock, bond, and
other financial markets. However,
if
the
program
gether, it
it
started
buying
is
halted
alto¬
be difficult to get
again before valuable
may
opportunities
have
been
lost.
Also it might be difficult to
maintain the attention of the in-
tt BISHOPSGATE, LONDON,
13 ST. JAMES'S SQUARE,
54 PARLIAMENT STREET,
Bankers
to
the Government in
Bulletin
S.W.I
S.W.1
: ADEN,
KENYA,
UGANDA, ZANZIBAR A SOMALfl-AND PkOnCTORASS
Branches in:
ADEN, SOMAULAND PROTECTORATE,
on
page
34
Available
Request
on
Laird, Bissell & Meeds
Members New York Stock
Exchange
Members. American Stock Exchange
120 BROADWAY. NEW
YORK 5, N. Y
Telephone: BArclay 7-3500
■4DIA, PAKISTAN, CEYLON, BURMA, KENYA.
TANGANYIKA, ZANZIBAR, UGANDA,
NORTHERN AND SOUTHERN RHODOUu
Continued
NEW YORK
E.CJ
London Branches:
Bell Teletype—NT
(L.
A.
1-1248-40
Glbbs, Manager Trading Dept.)
Specialista in Bank
Stacks
34
The Commercial and Financial Chronicle
(2334)
Continued
from
page
economic
our
33
and
tems
and
political
restriction arising from pres¬
the
ac¬
ent
altogether.
methods
bookkeeping
removed from
be
The chief technical problem in
connection
with
common
stock
would
stock
common
investment.
Probably the
greatest safety
investing is that stocks go down
factor a life insurance company
as well as up in price.
This it
can find in investing in common
clearly illustrated by Table X.
This
table
four
were
1900
indicates
occasions
the
and
that
onset
of
great
of
industry. This
industries,
no
matter how unpromising
or
regardless of the price of their
shares, should be represented.
It
single decline.
The
period was, of course,
1929-32
some
within
an
a
does
enthusiasm
that
mean
for
industry or company
of the recurrence of such a period should be kept within bounds to
the point where a disproportion¬
would put a damper on any com¬
ate part of the available common
mon stock program.
There were
one
any
unique, and the active expectation
stock fund does not become rep¬
two occasions between 1933 and
World War II when stocks
again
lost nearly half of their value in
resented thereby.
The fortunes of
industries
different
inflation
stocks may be moving in differ¬
the course of a decline.
After
World War II the declines have ent directions at the same time,
and with broadly diversified stock
net been as great
J
-
-
ability.
One
a
and
prob-
well-known
——
—
some
on
possibility
strong
a
of them consider it
pro—'
——
/Yv
Continued
from first
,
■
•
"
spending by our resource indus;*
•
page
•
{
[
Y tries but world capacity is now
; sufficient to take care of fore¬
seeable
requirementsV
materials
The Canadian Domestic
*■
achieve
the
in
of
Taw
immedr-
years
Yately ahead.
.'■>
'•*
.
''t
drop in total capital spend¬
ing has not been nearly as great
.v-"1-'>-■
,,
The
as/the v decrease in mew capital
Vinvestment toy business. Increased
*
peak in 1958. Avail- ; of growth experienced in 19554)6
that^it Will* is not a near-term prospect./ -
a new
data
able
1953
a
'
indicate
their
and
^
;
does not mean that all
nearly half of their value in the
course
scale
panies
depression in 1929 when indus¬
trial stocks, measured by the DowJones
Industrial
Average, lost
further
make
cation—diversification among in¬
dustries
and
also
among
com¬
between
V
However, most economists today recognize that our economy
does contain strong forces which
stocks is the element of diversifi¬
there
the
debauch its currency, and he must
be granted the status of an expert
in this field.
Thursday, December 4,
spending has been a major support for the economy and this
should also be true in 1959;
j
— New;' capital-" investment/ by
business in 1958 has been about
10% below the 1957 figure and a
further drop appears to be " ih
prospect for 1959. Re-establisfrment of a decisive growth trend
could alter; the situation "materially but it should riot toe over¬
looked that many Canadian ihdustries have excess capacity.- One
ignore insofar as its technical op- of the important elements in our
eration and investment policy is capital'' investment * program / 6%
concerned.
'
!; *
? 1
^earlier postwar years was capital
stroy the capitalistic system is to
vestment staff in stocks after
tion ceases
.
lecture to the Life Insurance
investment Officers Seminar':in
1957, • expressed the belief that
modern governments lack either
the will or the ability to maintain
the value of their money. Many
people and institutions desire to
hedge against this in their'investment and pension programs and
many are already doiftjg'so. This
is* something which the life insurance business canrtbt very well
of
must, therefore, be
by all the means in our
Lenin is said to have dethat the best way to de-
power.
clared
.
fessor of economics in the course
sys-
it
resisted
Inflation and Insurance
.
/capital outlays by governments
:tbe *a"
business
cap«Tl
»ri™!e£emotVhan ?32-"li0n' 'Ahfs "T1' fh6re hf Yth faV0'" te»tn TUh^ algJeSe"
Unfortunately,^nost of
Y
le/I.Stated-towS*
crease has been due
percentagewise,
to, advances important of these is the: economic
probably due to the buoyant ef¬ investments, favorable trends in prices so that volume-of; pro-tclimate in the United
'bethit
fect of inflation on stock prices have a chance to offset unfavor¬ duction shows little change;
In ,the largest market' for our exports.
and the freedom from major re¬ able ones.
It is true that staff considera¬
cessions in this period.
tions and the supervisory problem
as
recovery
■ m
, m a.large part
The encouraging feature of the
v, appears to be more vigorous ihap-nf +h
- f.
will impose some limit on the as,f^er.
What is true for the
table is that stocks as a whole
economyas/Was generally regarded two
1
8
:
r
„
number
of
stocks
represented. a whole is not
have come back in
necessarily true for ,m0nths ago. Assuming this trend / House Building ~at Peak Level
price after
However, the ability to select
each decline and have
proceeded
through close analysis and the
ha
tln-od
•an
A Tecord rate of residential con'to go higher.
Except for the
ability to supervise may turn out most ofthe
*increafe °™r.
^ sanction has been an important
1929-33 period, the low
points to be less acute than was ex¬
schiSb
we^ S' eC°7my^
ZProducing
much,turned upward and the
,
roaX^Xr sS
<ass£
^ nrevalled
^Imut ?antinues then
iQppor
lmstw^r neidod^Sorne
19?»
Sdustiiei have^^xDeSen?^ ^ %lXP.°rts
tradltlonafto :pr0pto; economic activity thrdugh'cession in proc^t^n ;^^'sales
mark.et
, V-'--JM: out 1958.: It is estimated that new
wlSreds thevolume Tfbthers has '" As a^ainst thls> Prospects for housing starts this year will totall
^^ation
w
reached in each successive decline
tended to be progressively
higher
than the preceding low
points.
and it will prove more
comfortable in the long run to err
pected,
on
It is evident from this market
performance
of
that the size of
stocks
common
a
company's
the
■rather
One
.sur¬
side of
than
too
advantage in
•names
many
that
on
a
of
names
too
few.
to work from is that in pe¬
plus, investment contingency re¬ riods
of
relative
high
stock
serves, and mandatory security
•prices, a long list permits better
valuation reserves will be a lim¬
selection
of
the
comparatively
iting factor on its common stock few fields where
-investments
ities
must
dollars.
good value
long as its liabil¬
be rigidly valued in
as
may
Deduction
Industrial
increased
has
long list of the
e*P0lts to the United Kingdom at least 155,000 units, which is
^een bel^w neak ?evek but and Western Europe have dete- considerably higher than in any
se^ce indus?r£shave con^ •riorated.'.True Britain has .rre-;previous year.-Continuance of a
a . wide high level of house building into
Canada and 1959 seems assured, especially as
we have been oroud 0^^^ Announced that dollar discriminahouse sales have been good. HoWSrencth otonfUon:^ wiU ^.reduced further: arid fever," doubt-exists as to whether
landed as soon as possible. Y But the 1958
moved
tinued to exnamL
Throughout the
nostWar neriod
restrictions; on
range of imPorts from
pace
can
be maintained
still exist.
A company under these
Conclusion
circumstances .should probably so
conduct its affairs as to be able to
look with some indifference on
a
This
Thfevent,
States.
will probably raise
questions than it can hope
to answer. There are probably at
25% decline in the market value the
present time a number of ob¬
of its common stock
holdings. H stacles, including legal ones, to
Should even be able to bear
*ip •putting
some
of the suggested
under a 50%
decline, possibly ideas into effect. Some of these
with
some
discomfort,
being ideas may have superior alterna¬
paper
of
-
^
tivity in Canada has not been
great
in
as
south
and
as
our nieghbor to the
ample evidence still
exists of strong underlving forces
expansion
of
in
Canadian
the
mortgage
ff™e slackening of business actiy-,Bmment inoney into the
the
more
aspects Mixed
are
One of the favorable develop-uients of the current^ year has
been the reduction in our Irade
'deficit» particularly/ with the
United States. Exports in the first
nine months of the year were
slightly higher than pi ;the same"
economy.
.
.
hopeful that the discomfort will tives. This paper
is, in a sense,
In a dynamic free economy penot toe too
long lived. It is also exploratory, but it deals with a
riods of ranid growth are bound' Period
evident that
of
some
asp^ts
bf tte
residential-Uh<rusing - situat^qp
which give me some concern. One
of these is the danger that the
1958 rate-of. starts may be considered a precedent for the fu-
,
ture. If housing construction is to
be stimulated by; government ac1957 whereas,;r imports tion in years of slackening activ-
in view of the short field which seems to
require ex¬ •to be followed
by periods of cort- were down by
.;ity then the government and the
durations of the periods of de¬
ploring at this time.
solidation and correction. In fact
should- be recognized ...that ;the. housing industry must be pre—
cline during the last 25 years that
The
writer
believes
that
a
they are necessary in '■ order to maintenance of our (exports^ ..in .pared to allow, residential- coh—
a
smoothing formula such as has
strong case can be made for a eliminate distortions in the econ- 1958 has largely , been due to in- sitruction to; fall below the .long—
been advocated earlier m this
substantial amount of equity in¬
omy which booms are bound to creased shipments .of wheat and tei*m rtrend rate in boom, years,
paper would toe a great help in
vestment by life insurance com¬ breed
Perhaps
the , surprising of such unusual items as cattle, There is always the _ possibility
expanding permissible common
panies aside altogether from in¬ thing is that the correction has uranium and aircraft. YNext year -that we will over-stiinulate d£stock investment.
'
flationary
considerations.
Cer¬ imt been deetier and
•
,
/our wheat is likely to. be; faced mand and create an over- built
In the event the
with, increased competition as a situation. -If we attempt to uie
technicalities tainly this paper is not meant to
of the business were so
altered as convey the thought that continu¬
Should Count Our Blessings
' result of heavy crops in the Unithd successively easier credit terms ox
to permit some liabilities to be
ing large-scale inflation over the
Briefly, I am suggestihg that States and other exporting coun- other for'ms 'of subsidy, to support
expressed in equity shares having
long pull is inevitable.
Such n we Canadians should count our tries.
As a-result-Of^a/build-up some arbitrary rate of housing
fluctuating dollar values, much of prospect would be calamitous for
blessings as well as our misfor- of U. S. herds there may be a starts on a continuing basis then
11%./However,/it
_
longer^
>
,
tunes and shortcomings.
Taking
everything into consideration we
have had a relatively good year,
However, this does not mean that
TABLE XI
Moody's Common Stock Averages of 200 Stocks
.
Market
■
Market l»rice
per Share
1357
125.46
1356
Price Index
1
276
.
130.55
1355
Price
Earnings
per
.Share
Earnings
Dividend
Ratio
per share
we
Yield
$9.10
$5.43
9.26
287
136
14.1
531
487
433%
should
be
results—far
the
of
satisfied
from
it.
with
The
the
failure
Canadian
economy/ to
achieve any growth in real terms
is disturbing and since population
117.36
258
9.39
126
1954
4.75
89.07
196
4.06
7.54
116
4.23
,1953
72.81
4.78
160
7.25
4952 :
10.0
4.00
5.49
7U3
158
6.80
10.6
has continued to increase it means
that there has been some reduc-
3.94
1951
66.98
5.50
148
6.80
tion in
9.9
4.09
=1950-
6.12
56.23
124
I
7.67
78
353
637
detail
1958
J349
4668
103
5.94
7.9
1948
3.09
47.46
6.63
105
6.48
7.3
2.74
.3947
46.46
5.78
102
4.93
9.4
238
1946
5.13
5L34
113
3.48
14.7
262
46.02
3,97
101
2.97
15.5
1.92
4.19
.1945
,
•4144
38.12
84
3.15
12.1
1943
3536
78
3.10
11.4
8.6
„
1.84
,
6.67
1942
2666
59
3.10
1941
30.50
67
3.17
9.6
1.90
:1##0
6.25
3364
75
2.67
12.7
1.78
5.31
<1939
35.72
79
2.23
16.0
1938
1.48
4.15
3325
73
L40
23.8
1.43
1937
4464
4.38
97
2.79
15.8
2.04
4.77
100
1936
45.41
2.57
17.7
1.59
32.44
71
1.69
19.2
130
1934
29.74
65
1.17
1935
"
/
.
3.50
-
4.06
25.4
1.21
1933
26.78
4.11
59
.90
29.8
1.13
1932
4.42
2165
46
.43
49.0
1.50
1981
40.«2
90
L55
26.3
2.42
1930
65.90
6.17
145
3.08
21.4
283
1929
4.54
86.00
189
4.91
17.5
389
3.41
economic
the
trends
climate., of
in
various
7.36
_
.
have said that trade prospects are ; Inventories are a form of capmixed for 1959. However, if /the jtal investment and the liquidarecovery trend in the U. S. proves tion
of inventories in 1958 ex„
decisive then
one
can
expect our
plains in part the downward trend
exports to exert a mild expan- in business investment.. It also acsionary influence op our economy, counts for part of the. fall in mPerhaps I should say frankly .that dustrial production. Recently Ufe
resumption of a desirable rate of xate of inventory reduction has
That is growth for the Canadian economy
largely past history and I know is dependent on recovery and exsegments of the economy.
you
are
interested
more
in
the
pansion^ of our traditional exports
of
future.
4.89
1.77
and
standing of living.
propose to discuss in
4.81
1.73
our
do. not
the
lessened demand for our cattle, we may cause serious harm to
^
major contributing iterns economy through diversion of
our favorable export situation necessary capital funds from othor
1958 uranium alone has pros- worthy* projects. Then, again, it
P^ts for further improvement in should not be ..overlooked that iij1959*
Y
flated housing costs arise in part
-'.You will gather jfrom what I from easy mortgage credit.
" /
products
of
our
mines
-and
slackened and in the year ahead
inventory
pujr-
poses may be expansionary
than a recessionary force.
rather
production
for
forests.
The Outlook for 1959
What, then, is the economic out¬
look for 1959?
A
number
Borden
Consumer suid
•
of
uncertainties ob-
scure
the view of the road ahead
but it
seems
Personal
Capitol Spending
disposable income has
continued to increase
in
1958 de-
Commission
on
Energy
In earlier postwar years one
of
the important factors in the capi«tal investment program has been
the development of our oil industry.
More recently the pace of
can
look forward to
1959
with
development has slowed down
cautious
optimism. ' During
the increases in a number of impor- and expectations have been that
past eight months economic activ- tant industries this upward trend this slackening in the oil sector
ity in Canada has been following is likely to continue and this-sug- would be offset by further expana gentle upward grade.
Continu- gests that consumer spending will sion of the natural gas industry,
ance of this trend is to be expectremain on a high level. The more Now, some doubts exist on this
ed and some acceleration of the money
Canadians have in their score. The Borden Commission on
rate
of progress
may
develop, pockets
the
more
they spend. Energy in its preliminary report
However, a resumption of the rate During the past year consumer recommends broad regulation of
to
me
that Canadians
spite the fact that we have had
a
large number of people unemployed. In view of recent wage
Volume 188
Number
the oil and. gas,
5800
.
.
The Commercial and Financial Chronicle
.
indu^ryand the much, today
very possibility of - sucft/ regula¬
tion is Jjound; to have; a depressr.
ing effeet
investfnerit
on.
natural gas
a
year
greatly
ago.
if
its
is of business and labor will be
value
of/economic, growth-and
maxi-
the * intelligence of most
Canadians. If people become convinced thatr depreciation of the
is
then
to
currency
nitely
The
oil
volves
and
full
industry " in¬
gar
considerable
risks.
Since
oi
of
the
industry and.,
this risk-taking has contributed
rpaterially to Canada's economic
reasonably
for
power
are
gree
somewhat ' short
the
1958
existence throughout
period then development of
industry would'► have
been;
slowed down considerably. -v
Canada
of
objective
tion
have pursued since the end of
the war with a considerable de¬
this
Government
an
of;
True,
success.
;
of
the
on
done very well.
\
in
I.
«n.
considering implementation of the
report should weigh carefully the
implications of some of its recom¬
mendations. If risk-taking is dis¬
What About
...
;
coin
a
—
;
./
/.
currency,
couraged both the industry and
Canada as a whole, will suffer.
Here, We have fallen far short of
ess.
success
Rather, the'purchasing
power * of
the dollar has fallen
The report is
steadily
ment
for
been
a
an
pace-setter
a
postwar
-
discouraging docu¬
industry that has
Canada's
in
development.
Canada
is
the
Relax¬
ation
of
controls following the
war was
major factor in creat¬
ing an economic climate favorable
production have been
monetary and fiscal devices which
to
inflation.
instruments
have
we
have
^\..
also
the
contained
So
engrossed
seeds
my,
have
u'
we
Tho- ^uCstibn, of course^ arises
as to :swtiether
the objectives ot
comments
outlook, I would say a fullr« employment ^ and a
modest Upturn in economic activ¬ /currency are
compatible. Can we *
ity is underway and expectations
are
that this trend will continue
ation/in
have
a
continuing high level of
emplpyment without inflation?
rapid; acceler¬ </an .w^ pttaiti a sustained rate of
activity
does grbwth for our economy without
a
business
npt appear to be in prospect?; add
is not likely to develop until a
ereepjhg-infJation?. V
^
-^
.
reflected
in; an expansion of
th^t I dp not mean that we can
export trade. This means that: expebt'vmaximum
utilization of
unemployment, will continue to Jbe pur /rrisb^ces jrit all times. There
a worrisome factor next year.
It ard hills ,krid valleys on the road
looks as
if the /seasonal
peak, to.ecbriptoic, progress..
out.
'
our
-
usually
which
will
in
occurs
March, B
In any
the time has
case
come
in 10 workers
for Canadians to face squarely the
unemployed as was the case in
March, 15(58.
Furthermore, the
same
degreee of unemployment
question
whether or not they
want-a stable dollar and it is one
Will
see
one
hardship
$ince
will
about
undoubtedly bring somewhat
rpore
last
than
of
some
winter
the /unemployed
exhausted
have
their
unerm
that has to
be faced not
only by
tte government but also by Mr.
T
Mrs. Average Citizen.: In the
final analysis It will be the Aver-
hge; Citizeh- who will provide the
ployment insurance
benefits
and
answer.'; If
/
^
hie
favor
^.Throughout the postwar period
has
made. / remarkable
progress
in diversifying her
duction.
More and
fprmerjy imported
in
Canada
but
more
are
pro¬
products
being made
evenso
the
ex¬
decides
to
vote, in
for industry
" items "imported,
including
cannot manu¬
parts, to see if we
facture such items here.
The Inflation Danger
A year ago
I spoke of the dan¬
.creeping inflation and the
need
for
maintaining a stable
currency, and I make no apology
ger of
for
•
reverting to it today.
It may seem paradoxical to talk
which
currency
retains
its
purt
chasing power.
;In
my
implied
remarks so far
that we have a
I
thing
,
spending and deficit, financing.
These also are inflationary instru-
justified
by increased output per manhour.
Depreciation in the purchasing
power of the dqllar has been an
important contributing factor in
the demands of labor.
of
were
to
stable
eral
embark
flationaiy fire has been laid and
it will not take much of
breeze
a
If the
money
*
through, the purchase of
govern-
ment bonds by the banking system. Net new borrowings by the
government during this period
totalled $950 million, which means
that $300 million were purchased
by; thp
This•-
banjw from tlm public.
is^another indication of a
secun-
flight from fixed income
ties. Deficit financing
js^inflationbut doubly so
^
..
ary at any. time
when the funds are raised by way
of sale .of bonds to the banking
system.
~
T
wT
,
f
lj*58.
Prices
arid
a
have
throughout
continued .jo
dollar will not buy as
tr^hpln
vSflS
Tivtag staLd^
What
are we
going to do about
^
„
going'to require the co-operation
of all segments of the
vs.
sus-
booms
Galloping Inflation
examples of the evils and destructive powers of inflation
Canaare-inclined
cannot
this
happen
to
to
feei
them,
and
J
proved in principle a proposal to
enlarge the resources of the two
organizations. The proposal, if ac¬
cepted by the participating na-
Public
acceptance of policies de¬
signed to maintain the purchasing
of the dollar
power
f
essential
are
4
•
tions
,■
Then, again, he
stop agitating for increased
government spending for every
ready
faced with
everyday
is
jofiationary process and this en"1?n€ta[y and
^
f !!
?
,
the
government
but
in
are
creating m-
fjationary pressures which make
holdi„g the line difficult
pQasibie<
or
im-
'
r
has been popular in
new
tial
sections
who'f^vor creeping inflation
as-
that
people's
habits
handling money will not
in
,
sume
be
Canada's
to
economic
prog-
cPPUritv utid wei-
th_
rp__
demands
Nat'l Bank Supervisors
William A. Burkett,.President at
the National Association of Super-
government nor the public wants, visors of State Banks and Superinthrough economic growth and tendent of Banks in California, has
only if the government has announced
the
appointment , of
or
then
the
ability and determination to District Chairmen for the 195«-59
avoid expenditure increases in the
meantime.
year.
ppbiic understanding of the
problems 0f full employment and
a
*
ijc^of the^States^ th^lr
d^t-lcts a!?
tive
monetary and fiscal tive dlstrlcts' are"
policies is not as great as it should '
First District — Robert E. MeNot long ago we had a Royal Daniel, Superintendent of Banks,
Commission
study the probable Ohio, Chairman (Connecticut,.Deleconomic development of Canada aware, Maine, Maryland, Massaover the next 25 years.
Its sittings ehusetts, New Hampshire, New
and report enlightened a great Jersey, New York, Ohio, Pennmany Canadians. Perhaps another sylvania, Puerto Rico, Rhode IsRoyal Commission to study the land, Vermont).
in£iatlon and
problems of full employment and ;
Sec<>Bd District_W. P. McMul-
Ijoifd/f incluTnf "he8"^^ 1?«. Jr-State ComptroUer, Mlcsis-
Z.ctnre
thp
hlln 7^1
M
wm
p
ffrnwth
r o sn
whinh
OTt Chairman /Alabama, FlorKentucky, X-OUigiana,
ect
thp Rovai r™n
indicated
s
mieht
Mississippi, North Carolina, South
faroMna' Tennessee, Virginia,
be
^ Vir^inia^
< /
..
undertaken, should be assigned to
Third
District -r— Goriden
H.
the best economic and financial Maxam, Superintendent of Banks,
brains in the country.
South Dakota, Chairman (Arkan<^
.
to
sas, Illinois, Indiana, Iowa. Mkfc.
igan, Minnesota, Missouri, North
„
The International Scene
.
l*clo*to& let me turn briefly Dakota, South Dakota, Wiseonfin),
International
the
na<!t
hnc
scene.
The
RPr;P<l
i^,,
in
voar
hppn
a
-
{
.
fourth District
nf
Sse/Tensfon haf nrevaitod
T
—
***
J, Floyd Mc-
^ director of Banking, No
SfmddleS, Astateof^li?
braska, OiairmaMCokuado, IUn-
number
sas, Montana, Nebraska, New hfex-
surprising
thing is that these crises have had
lc0' °klahoma> Texas, Wyomuig).
0f
countries
and
a
the
.
some
to
trade
substantial
a
ical turmoil orevails in
I fully appreciate that inflation
^
impetus
world
1**1 J*
al-
are urged upon it and the prov-inces and municipalities are seeking a larger share of the Federal
tax pie. A balanced budget is de-
Cosiness,
againsUnHation^f°the^^^oUcto^f
fuB iniiauon xi tne policies or
.
Fifth District
—
Joseph. C. Mc-
community and governraents miist concern themselves
little economic impact. Neither Murray, Supervisor of Banking,
the present economic situation nor Washington, Chairman (Arizona,
political as well as the future prospects have been radi- California, Hawaii, Idaho, Nevada,
h
that it
respect
,
an
of
—a
project which is dear to his heart.
Government
give
exnansion
further expansion which is essen¬
of world trade
development
o
Federal
should
fiirthpr
can
The
Monetary Fund and the
or-
role to play.
within our grasp. Such a study, if
Ecoriomic history is replete with
dians
community
1 p
f
,
Creeping
a
^vornmpn^to^it^^t1 *tr thC
or
.
organized business
ganized labor has
mfsston 1on^ T^mada's EcoS
fowth. . Recent
proof oftbis. Inflaand
annual meetings of the Inter-
national
distinct
agriculture and investors.
The !irst ahd foremost require-
eeonomic
booms
beget recessions.
as
,Xe
choice.
may be the case but if one
looking at the long term wel-
experience is
tion
begets
"
.-The average citizen,
„
H
would
—governments, business, labor,
x
tained
,
Decisive Action Is Needed
,
actions.
,"r'e
need
to
o^
But the Canadian people
"
^
^
be told what the stakes
—
continued
,
Sjnhft*
growth in the future.
,
''/>
thCommon wealth economic coh-
na-
a
which
policy
wage
on
oux
.
Canadian bank deposits rose by
$1,250 million between April and sirable and can only come through
October. This came about mainly higher taxation, which neither the
-
war
One of the encouraging featuijfl
P
year.
s befn T16.?
,^
a s^ps taken to further
• ^onomic cooperation between the
policy.
perhaps labor
ments^The_ kjndling.|or. the in- ^deficit but
Statesmanship
has
to; improve
possible
trade position and trade Telation-
those
to
..
o
rise
demands
wage
we
^bstantiallv
showing states-. shiDs and attempt to keep
manship which would rebound to priCes on a competitive basis.
its own benefit if it limited its
n«*!««•
to its attainment.
large
supply
a
say
think
I
Wui
tviAimtr
.
should
I
or
nroeress
in the not too distant future. This
means we shouid be doing every-
callT alter.ed* Apparently people Oregon, Utah, Washington).
becoming accustomed to crises
*
—
* *
assume that no shooting war
is likely to develop.
Canadian people will choose the
right road.
As I
indicated, the co-operation
-
axe
During
and
serves,
trict
are
dollar
ranid
be
future.';
" Not only have we had
expansion of the money
m
liv-
of
materjais and finished prod-
raw
ha VP
about inflation when
tries
would
from
An
they may be over¬
are
what the consequences of
many indus¬ confident. The only difference be¬
continued inflation will be.
operating below capacity tween creeping and galloping in-~
and we have a good deal of urn
flation is that with the former
^
rather than poemployment.
Yet, deterioration kind the crisis or day of reckoning litical action is needed.
Given
in the purchasing power of ttie is slower in developing.
Those leadership I am 6ure that the
..
it
strong inflationary bent. In fact,
r venture to predict that the huge
Avnrvnci
onvrnltr
expansion in the money supply
that has taken place has sown
the seeds for more inflation in the
,
.
has
constructive
a
aa<f Uassare^ound8e°conomlc
a
this inflation problem?
employment
to examine
and
monetary policy in
.
forego short-term economic gains
the long-term benefits of a
is
r
and
^
T-'hen, again, Canadians, individual fare of the Canadian economy
and corporate, can assist by re¬
there" is really no alternative; to
viewing their buying policies and- a policy directed toward: mainpurchasing Canadian products taining a stable currency.
;'
wherever price and quality are
Creeping inflation will not ascompetitive. Another avenue open sure us full emolovment or susiuu
all
Fiscal
Canada is the past year has had
anada
for
incentives to speed up this process.
is
conditions
been
and I hope it will
However, labor now
great
political power
continue,
inter-
see
:.C.
this
us
may
;of a Stable dollar he will
have to recognize that there may
be times when he will have to
pansion of our secondary industry
is not as great as we would like
tp see. Perhaps attention should
be given to developing positive
to
working
exercises
considerably higher than
now prevail.
.
and
personal savings.
Canada
we
standard
Droeress
v^v
tive efficiency
deprecia-
> ;Bf;tplnake it burst into flame.
My Pwri view is that we can. /
Berhaps I should hasten to point
strong revival of business abroad
i$
inflation
and
In indus-
year
that Should
recognize
that
Russian
and competition in world markets for
foree making for greater produe-
to
souruX^vb^JlSb: increased"government
However,
pressure
Fanning the Inflationary Fire
;
ifn/ni-
a
about the
in 1959.
firmly
believe
for higher wages
organizations would be willing to
co-operate in developing a gen-
of
..
Worrisome.,,-.;;,-.
summarize
I
tion
est rates
...
To
Diant
TaDid
not against all wage in-
am
creases.
those which
used, to
.
•
demands
halt
they contemplate tight control of been in achieving our full em¬
an essential industry
the recom¬ ployment objective that we shut
mendations are, in
my opinion, our eyes to the fact that what we
a
step backwards.; ; ^
v,
r ' were doing could not help resiilting in debasement of our curUnemployment Continues
rency. 1
:
,/•/ ;
I' '/
;
VvB'B7:
are
made
encourage
expansion. To the extent that
f
we
has
Please note the word "excessive"
for I
historically
to recoup them for the
as
One of the factors in this is that
.
free enterprise economy.
a
trial
labor
I visited
nrobablv know
vou
excessive wage increases not jne she "is
still far behind
the
justified by rises in productivity. western World but she is making
tion in currency. In other words,
unless we take decisive action to
I pointed out a
moment ago this has been true
even in/the past 12 months. 1
: v
and-
tainly,
-
for
plementation
of
monetary and
fiscal
policies.
In the face of
creeping inflation people will not
continue to buy long-term bonds
except at interest rates adequate
side
other
stable
if
necessary
political implications.
RUSSia early this
tbejSitua- better
and
the
Canada
in
worrisome at
more
by many to be the most important
factor in creeping inflation. Cer-
have a sound bond market and
the latter is essential to the lm-
,
Currency
both
dollar is
/
n
Stable
'Butwhat about the
of the
.
Wage Demands Excessive
prices?
yield a
now
Even
abroad.
ways
ironing
The wage-cost push is believed
-
.Confidence in the value of the
have
we
bond
indications that exports from
nopoly of Western nations on economic aid to under - developed
countries. I need hardly tell you
that this has broad economic and
means
excessive build-up of inventories,
States, more
^particularly
the latter, has all the earmarks
r fhght from the dollar,
in
in
ideal
whole
are
vestment and endeavour to avoid
United
fell
we
this
—
7
,
but
have to seek
of
re-
have to Russia may prove to be a disturbpricing ing factor in some of our markets
the moment is the fact that Russia is challenging the virtual mo-
least, .to the expectation of further irflation. In £act,
we
had been in.
The
Its benefits
employment is
may
its
out the
peaks and valleys in business in-
larger return than many common
stocks and this is due, in part, at
purchasing
dollar.
our
and the decline in
Government bonds
an
multitudinous.
Full
progress. If the regulations con¬
templated by the Borden Report
stable
and
A general expectation of
inflation can be a great accele-
objective of economic policy.; Few
will quarrel about the desirability
lj946 companies and individuals
have, poured huge sums into de¬
velopment
employment should be
in
trouble.
.
.
will
restraint
policies. It
continue indefiare
in for real
we
Business
exercise
nuum,.I^pl03rinent .with, that .of rates
' stable
rec-
report, if adopted, would subject time.
:
..
rator of inflation.
the oil and gas industry to bu¬
Everyone will agree that we '
The experience of the past year
reaucratic control — to greater should endeavor to attain maxi- indicates that the fear of inflation
regulation than exists" for
any mum utilization of our human and
is real. How else do you explain
Other major industry.
material resources—that so-called
'
the inflated stock market prices
•
quired.
away a little bit at a time,
Thisview,itseems to me, under-
money is, in my view, the
N°;,;l economic, problem- factog;
ojmnendatiOn for a National En-;' Canada, today ..Our economic well-.
ergy Board but there will be wide being in, the future depends on
disagreement
with
the
powers our finding a way to achieve both
suggested for such a board. The of these "objectives at the same
Few will
v
affected
^Reconciliation of the objective eroded
the,
in
mdustry,
disagree with the
it did
as.
35
(2335)
js that the free world
as
trade
with
amount
to
the
very
West
going to
does
not
arranges
%
meeting of the
^
f^ae Bank Supe^vi-sdrs of ^ia
stands out on the economic front
be faced with increased competition from Russia. As yet Soviet
the year in which hit
the Chairman of each Dis¬
.
'
All of
.
these meetings
are
at*
tended by the President ^f Hlf
National Association and the Ex*
much hut there ecutive Director.
,
36
(2336)
The Commercial and Financial Chronicle
Continued
Financial Leaders
from
4
page
total
A
of
leading members
world is serving
committee planning the
the
.on
of 70
financial
the
dinner in
going
are
tion for
honor of John H. Bud-
so
well that Detroit may have to maintain full produc¬
time to come.
some
Market improvement is
prompting more steel buyers to place
orders
farther
ahead.
The
mills
are
still
inger,
Vice-President,
Bankers
Co.; James Coggeshall, Pres¬
ident, First Boston Corp.; and Ja¬
cob C. Stone, senior partner, Asiel
& Co., to be held Monday, Dec. 15
Trust
getting plemy of
orders, but they are becoming harder to fill. As a conse¬
rush
quence, steel users are keeping closer tabs
The metal working
weexiy noted tnat
not a strong factor in the market at
their inventories.
on
inventory reouilding is
present.
at the Waldorf-Astoria.
"But it will become
major stimulus after the turn of tne year," this trade weekly
stated, adding that the volume of orders for January delivery is
good.
■
-S..'*
;!.■ va
S.
Eugene
Hooper,
President,
Manufacturers Trust Co., is Chair¬
man of the event sponsored by the
"The
National Conference of Christians
Serving
.
the committee
on
Malon S.
Andrus, R. Harold Bach,
Bache, John E. Barrett,
Bartsch, Mrs. Charles
Ulrick
Bay
Walter
Benedick,
Robert E. Broome, I. W. Burnham
Harold L.
sheets, galvanized sheets, terne plate (used
tanks) and aluminum-coated sheets," "The
Iron Age" added. "Demand for
plate, structurals, oil well casing
and tubing and linepipe has
improved some, but not enough to be
in
making auto
much
pick
Thomas F. Fagen.
Elliot D. Fox, J. George
Frings, G. Keith Funston, Lloyd
S. Gilmour, Lester Ginsburg, Jo¬
seph L. Gitterman, Jr., Horace W.
Goldsmith, Semour Gottlieb, Mon¬
roe C. Gutman, Harold Helm, John
C. Henderson, William T. Hender¬
son, Philip Hettleman, Howard C.
Hirsch, Leonard R. Hockstader,
Ralph Hornblower, Jr.
Also Roscoe C. Ingalls, N. Bax¬
ter Jackson, Stephan A. Koshland,
Harry B. Lake, Robert Lehman,
George Leib, S. D. Leidesdorf,
Jerome
Lewine, John L. Loeb,
Thomas P. Lynch, Edwin T. McCormick, T. Murray McDonnell,
Lloyd W. Mason, Harold C. Mayer,
Andre Meyer, Clarence G. Michalis, Harold S. Miner, Morris New-
will
be
'
Frank,
Meyer &
Eighth
Street,
the
New
York
and
to
New
York
Dec.
on
Stock
will
15
Smith, Jr. to limited part¬
nership.
New Alkow Branch
Hotel
Co., Inc., has opened a
in
the
Diplomat
office
under
Jacob M.
mour
J.
the
management
of
Alkow, President. Sey¬
Weisbach
is
Assistant
Manager.
Metropolitan Investors
BROOKLYN, N. Y.—Metropoli¬
tan
with
Investors
offices
has
at
been
4401
formed
Thirteenth
Avenue.
Joseph Glassman
principal of the firm.
is
a
Willard E. Loeb
Willard
Howell W.
Murray
Howell rW. Murray, Vice-Presi¬
of
A.
as
upturn
in demand.
supply pinch
a
in the second
/
develops at all next
quarter. At that time, steel users
hedge against
a
>,
:
following
a
possible strike
For this reason, the
C
...
than
more
a
of
year
steady
decline,
G.
Becker
&
Co.
corporated, Chicago, passed
hqv. 27.
In¬
the
August, 1957, had
a
by
Thursday, December 4, 1958
.
Today's level is about 13,750,000 tons and user stocks of almost
products are, low. By the year-end, total steel inventories
will be 14,000,000 tons, or 1,000,000 tons, above the August low
point, but 5,000,000 below the Dec. 31, 1957 level.
During the first half of 1959, "Steel" predicted consumers will
add 5,0u0,0u0 tons to their inventories, 2,000,000 in the first quarter
and 3,Out),000 in tne second.
In deciding how much to buy and how soon, consumers will
be influenced by three considerations; that is the steel industry's
adjusted $28,000,000,000 at
increase, to an adjusted
$21,300,000,000, in stocks held by non-durable goods maker's.
The end-of-October
figure for total manufacturers' inven¬
This
was
an
offset by an
tories was about
$5,000,000,000 below the August, 1957, high,
adjusted $54,200,000,000.
an
rose
'•
by $100,000,000 to
adjusted total of
an
$14,200,-
October
sales
gain, the department reported,
stemmed
mainly from a substantial rise in the rate of deliveries
by auto
producers, and a more moderate increase in shipments by
primary
metals companies.
In
the automotive
industry a 38% spurt in new car buying
industry's Nov. 11-20 sales to the highest point since
June, promising a new peak for 1958 before the year ends.
carried the
late
New
sales
car
daily from 11,740
the
opened
ports" stated
for
Nov.
on
11-20
day Nov.
a
industry sales
since
been noted.
period soared
1-10
to
16,190 units
rising factory production
as
floodgates, "Ward's Automotive
Re¬
Friday last.
June
21-30
this year
when
17,775
new
car
cars
were
market
The statistical service
sold
activity
period some 94,000. Dealer new
and topped 460,000 on Nov. 20.
'
Commenting
car
inventories
are
on
passenger car assembly and
mated last week were
strikes, resulted in
a
a 13% decline in
drop in truck volume.
Esti¬
23%
120,733 cars and 19,246 trucks compared
preceding week's counts of 138,727 and 24,838, which are
the 1958 high points to date.
Final assembly lines were at a
complete standstill throughout
the industry
Thursday, this trade magazine noted. With one ex¬
ception, Ford Division's Atlanta, Ga. plant, all factories resumed
activity on Friday last. Almost all units also were scheduling
Saturday work. Studebaker-Packard remained idle most of the
week by a strike that
began on Monday of the past week.
the
Truck-making remained partially throttled by the Interna¬
tional Harvester walkout which entered its third week last Thurs¬
day.
Bargaining
was recessed until
Monday of this week.
"Ward's"
noted that despite S-P's
difficulties, now settled, the
industry will turn out an estimated 500,000 new cars in November,
top monthly figure of 1958 and best total since December, 1957
at 534,714 units. December
programming will better this month's
as
overtime
"Ward's" declared.
operations
continue
on
wide-scale
a
Steel Output Set This Week at
74.6% of Ingot Capacity
Look for surging
activity in; the steel industry next year to
be above the level cf the general economy, "Steel"
magazine
stated in its comments
Accumulation
of
the steel
on
steel
industry
inventories
is
on
Monday last.
gathering
making for increased activity for the steel mills.
■
tons
Steel
and
Institute
announced
companies will average
the
week
of
ingot
beginning
steel
and
weekly production for 1947-49)
of
Dec.
(based
compared with
as
the
that
*125.3%; of steel
1958,- equivalent
1,
castings
*123,8%' of capacity, and 1,988,000 tons
an
to
averaged
on
actual rate
week ago^
Output for the week beginning Dec. 1, 1958 is equal to about
a
74.6% of the utilization of the Jan. 1, 1958 annual* capacity of
140,742,570 net tons compared with actual production of 73.7% the
before,
week
r or
like week
me
duction 2,011,000 tons.
a
month ago the rate was
A
year
placed at 1,831,000 tons
was
*Index
for
ago,
*125.2% and
114.0%.
or
^
.
of production
is based
pro¬
the actual weekly production
■
-
■"+
-
on
average
■
c
'■
weekly production
1947-1949.
;
,
Electric Output Declined in Thanksgiving
Holiday Week
The amount of electric energy
distributed by the electric light
industry for the week ended Saturday, Nov. 29, 1958
at 12,274,000,000 kwh., according to the Edison
Electric Institute.
Output eased in Thanksgiving holiday week.
t
'
'
estimated
was
For the week ended Nov. 29, 1958 output decreased by 305,000,000 kwh. below that of the previous week but rose by 661,000,000
kwh.
above
that
of
the
comparable 1957 week and by
169,000,000 kwh. above that of the week ended Dec. 1, 1956.
Car
Loadings Declined 3.8% in the Week Ended. Nov. 22
Loadings of
were 24,445 cars
revenue
or
freight in the week ended Nov. 22, 1958
3.8% under the preceding week.
:
Loadings for the week ended Nov. 22, 1958 totaled 619,350
cars, a decrease of 13,413 cars, or 2.1% below the corresponding
1957 week, and a decrease of 31,270 cars, or 4.8% below the
corresponding week in 1956.
•'
■-
Car
momentum,
of
as a
Thanksgiving Holiday and Strikes at
Studebaker-Packard and International Harvester
Passenger
car production for the week ended Nov. 28, 1958,
"Ward's Automotive Reports," decreased by 13%
and truck assemblies by 23% due to Thanksgiving holiday and
strikes at Studebaker-Packard Corp. and International Havester.
according
to
Last
week's car output totaled 120,733 units and compared
138,727 (revised) in the previous week. The past week's
production total of cars and trucks amounted to 139,979 units, or
with
decrease of 23,586 units
output, states "Ward's."
a
below
that
of
the
previous
week's
Last week's car output fell below that of the previous week
by l'/,»94 units, while truck output decreased by 5,592 vehicles
during the week. In the corresponding week last year 114,795
cars and 17,312 trucks were assembled.
Last week the agency reported there were 19,246 trucks made
in the United States. This compared with 24,838 in the previous
week
and
Lumber
17,312
a
year
ago.
Shipments Dropped 11.1% Below Output in the
Week Ended Nov. 22, 1958
Lumber
shipments of 472 reporting mills in the week ended
Nov. 22, 1958 were 11.1% below production, according to the "Na¬
tional Lumber Trade Barometer." In the same period new orders
were
of
10.8%
stocks.
below production.
Production
was
and
Unfilled orders amounted to 32%
2.0%
new orders were
0.4% below
above the like week in 1957. '
above; shipments L3% below
the previous week and 11.5%
Business Failures Continue Decline in
Holiday Week
Commercial and industrial failures declined to 244 in the
holiday week ended Npy. 27 from 260 in the preceding week, Dun
&
■
.
Output Dipped 13% and Truck Assemblies 23%
Result
basis,
Truck output in November was placed by this
authority at 93,000 units, highest volume since July, 1957 at 94,997
units. The statistical
publication forecast December production at
100,000 trucks.
away
for
2,013,000
rising
production, "Ward's" pointed out that the
Thanksgiving holiday, combined with Studebaker-Packard Corp.
to
capacity
Iron
of steel
.
forecast 370,000-plus sales for
November, fully 100,000 over October.
The Nov. 11-20
selling rate produced 145,700 sales, the Nov.
entire
1-10
American
;
and power
t
.
The
operating rate
also
showing the effects of the con¬
rose by $400,000,000 in October to an
adjusted total of $27,200,000,000.
Most of the gain was in the
durable goods sector, which
reported a rise of $300,000,000 to a
$13,000,000,000 adjusted total. Non-durable goods industries' Octo¬
sales
'
—_____.
Manufacturers' sales,
tinued business
recovery,
ber
increased capacity, estimated for 1959 at 146,000,000 tons; the
possibility of a steel strike and their own business prospects. Al¬
though some consumers will not hedge as much in 1959 as in prior
years, others expect no departure from tradition.
Steelmakers are extending delivery promises as major con¬
sumers come into the market for big tonnages.
A month ago, it
was five weeks for cold-rolled sheets, while today it is six or seven.
Last week, steelmaking operations slipped 1 pointrto 74% of
capacity. Production was about 1,997,000 net tons of steeL District
rates were as follows: Detroit at 100.5% of capacity, down 2.5
points; St. Louis at 93, down 5 points; Chicago at 35.5, up 0.5
point; Wheeling at 83, down 2 points; Cincinnati at U2.5, up 0.5
point; Western district at 79, up 1 point; Cleveland; at 73, up 3
points; Eastern district at 71, no change; Buffalo at 685, down 9.5
points; Pittsburgh at 66.5, down 1 point; Birmingham at 60.5, up
2.5 points; and Youngstown at 59, down 2 points.
*
November's output hit 8,600,000 ingot tons or 200,000 less
than the industry produced in October.
Total for the 11 months
is 76,500,000.
v.v.-'
The metalworking weekly reported that world steel production
totaled 216,300,000 net tons in the first nine months of 1958 as
against 244,000,000 in the same period of 1957. Every major nation's
output declined except Russia's which jumped from 41,600,000
tons last year to 45,000,000 in the 1958 period.
"Steel's" industrial production index is at a 15-month high
and only 1 point shy of the August 1957 peak that preceded the
recession. This does not mean that the economy as a whole has
regained all its lost ground, but it does indicate that the uptrend
has been solidly based and should continue well into 1959.
The publication's price composite on the prime grades of
steelmaking scrap declined for the second week. It dropped 34
cents to $40.33 a gross ton. Mill buying interest is sagging as the
holiday season and inventory-taking period approach.
Durable goods makers' stocks continued
$100,000,000, to
the end of October.
total
E.
Loeb, partner in L.
F. Rothschild & Co., New York
City, passed away Nov. 26 at the
age of 62 following a brief illness.
dent
come
and International Harvester
HOLLYWOOD BEACH, Fla.—
&
stated that if
from the previous month.
to fall slightly
Ex¬
admit
Abel I.
Alkow
major
daily, the present 1958 high, has such
Morgan Davis & Co., 63 Wall
Street, New York City, members
branch
a
halt and that inventories would start
turning upward.
At the end of
October, the seasonally adjusted book value of
manufacturers' inventories stood at
$49,300,000,000, unchanged
come
Not
Morgan Davis Partner
the
even
Officials stated that they were not ready, on the basis of one
figures—and those s.yftjpct, to.reyision, to claim that the
fall in manufacturers' inventories that started in
Johann-
been added to the
West
of
change,
handle
month's
Gene
Pacific Coast Stock Exchanges.-
"of
.
in
still
are
have
sonally in the month, continuing the upward irend which started
spring, the agency noted.
Stern, and Maurice
Stern,
325
.members
—
Uew-Karsten
sen, Alfred P.
L. Weiss have
of
mills
000,000.
LOS ANGELES, Calif.
staff
The
part.
to
last
S.
(Special to The Financial Chronicle)
Fox,
most
expected
..
United States Department of Commerce
reported.
Manufacturers' sales and new orders
jumped more than sea¬
Stern, Frank Co. Adds
Davis,
are
book value of manufacturers' inventories at the end of
October held steadjr with the
previous month, after seasonal ad¬
The
E.
the
building inventories
justments,
Zuckerman.
.v
products
The
Raiss,
Charles
Samson,
Morris
Schapiro, Robert Silver, Albert
C. Simmonds, Jr., David L. Skin¬
ner, Milton Stein bach, Walter W.
Stokes, Jr., Clarence E .Unterberg,
v
These
probably will be the best of
son, Bernard G. Politz, Clarence
Politz, Jr., Bayard Pope, John
Paul
to
the year.
.
and
for
seat
s
it will
year
Also J. Wilson Newman, Maur¬
ice
Newton,
Herbert
Osborne,
Perry R. Pease, E. Norman Peter-
Wasserman
market.
when steel labor contracts expire on June 30.
mills figure that first half business
,
John
driver
It further
Also
•
the
4
capacity
Dietz,
'
to
help
plenty of
Delivery
promises would stretch out somewhat but there would be
enough
steel to go around, declares this trade
weekly.
Benjamin
J.
Buttenwieser,
Ives Cobb, Jr., John A.
Coleman, S. Sloan Colt, A. O.
Henry
-
gas
up still further in the first half of 1959."
;
Despite growing market strength steel buyers
the
II,
burger.
cold-rolled
of
are
Thomas W.
"
lion's share of current market support is
corning from
of
users
^
and Jews.
.
all steel
On Committee
-
.
Bradstreet, Inc. reports.
While fewer casualties occurred than
„
The Commercial and Financial Chronicle
Number 5800
yolume 188
(2337)
in any \yeete
since early September, they remained slightly above
However, failures were
from the prewar level
"of 264 in the comparable week of 1939.
v ; Failures' involving liabilities of $5,000 or more declined to 210
from 229 in the previous week but exceeded slightly the 203 in
this Size a year ago. Small casualties under $5,000 edged up to 34
from 31 last week and 32 in 1957. Liabilities in excess of $100,000
were incurred
by 25 of the failing businesses as against 16 in
the preceding week.
A
Billmi Rise in BMP Forecast for 1958
the 233 in the similar week of last year.
"lower than the 254 in' 1056 and down 8%
Carrol
,
Trade and service accounted for the lower tolls in the week
just ended.
Retail casualties dipped to 111 from 122, wholesaling
to 23 from 29 and commercial service to 21 from 22. In contrast,
failures among manufacturers rose slightly to 50 from 48 and
among construction contractors held steady at 39. More concerns
succumbed than last year in all industry and trade groups except
construction and retailing. The most noticeable upturn from 1957
,
M.
All major
tion's
segments of the
sumer
ry' In
all
three of
na¬
the
decreases
reported.
forecast, which is prepared
annually by Dr. Gordon W. Mc¬
Kinley and his staff of Prudential
The
only increases during the week occurred in the East South
Central, West North Central and Mountain States.
Trends from
last year were mixed with five regions suffering higher totals,
while four regions had fewer casualties. A marked rise from 1957
prevailed in the Middle Atlantic Region, whereas there was a
sharp drop in the South Atlantic States. "
economists,: also
predicts
stantial increase in
rise
in
a
employment,
a
wages,
The Prudential economists anti¬
Wholesale Food Price Index Rose Moderately the
.
•
There
was
a
cipate a high rate of production
during the year, contending that
a
reversal
in
inventory
policy
from "liquidation in early 1958 to
Past Week
?•••"/•.
moderate increase
last week
in
the wholesale
food price index,
compiled by Dun & Bradstreet, Inc. On Nov. 25
0.8% from the $6.38 of the prior week, and
1.1% higher than the $6.36 of the comparable date a year ago.
Moving higher in wholesale cost were hams, bellies, sugar,
eggs, steers and hogs.
Lower in price were flour, wheat, corn,
barley, beef, lard, cheese, coffee and cocoa.
The index represents the sum total of the price per pound of 31
it stood
raw
at
$6.43,
up
foodstuffs and meats in general use and its chief function is
to show the
general trend of food prices at the wholesale level.
Wholesale Commodity Price Index Turned Fractionally
"v
Lower Last Week
;
.
There
a
slight decline in
the general
commodity ^price
scrap,, cotton, flour and butter.
The daily wholesale commodity
price index, compiled by Dun & Bradstreet, Inc., stood at 276.48
Nov. 24, compared
with 278.81
a
week earlier and 276.64
on
the comparable date last year.
Most
was
culture
Light farm marketings and anticipation of increased export
held wheat buying close to the prior week with prices
steady. Corn prices advanced fractionally as supplies were reduced
and receipts were light. Purchases of wheat slackened and prices
fell somewhat from a week earlier. Strength in the meal market
and dwindling supplies helped soybean prices remain at prior
>
trade
week levels.
Trading dn flour was sluggish during the week and prices fell
moderately at the end of the period. The call for rice was steady
with prices unchanged. Purchases of coffee declined at the end
of the week resulting in a moderate dip in prices.
There
a slight decline in cocoa prices as transactions fell
preceding week.
Despite a slight drop in supplies,
sugar prices were steady during the week and trading unchanged.
below
was
the
*' The buying of hogs picked
substantially in Chicago last
week and prices moved up appreciably. Hog receipts were down
from the prior week, but slightly exceeded those of a year ago.
:
There
was
a
up
noticeable decrease in cattle receiots from
a
week
earlier and
prices climbed moderately. Cattle buying remained
close to the previous week. Lamb prices slipped somewhat at the
beginning of the week as turnover lagged.
The anticipation
of a substantial gain in 1959 plantings dis¬
couraged cotton buying last week and prices on the New York
Cotton Exchange fell below the prior period. For the week ended
Nov. 25, cotton exports were estimated at 58,000 bales compared
with 64,000 a week earlier and 175,000 in the comparable week
last year. Total exports for the season through Nov. 18, came to
913,000 bales compared with 1,519,000 in the similar period a
year ago.
.
Trade Volume Last Week Showed Moderate Increase
Above Level of Previous Period
Numerous early
Christmas sales promotions offset the effects
weather in many areas the past week
boosting total retail trade moderately over the prior week. Sales
were
close to those of a year ago.
Year-to-year increases in
women's apparel, furniture and gifts offset
declines in men's
clotving and appliances. There was a noticeable rise from a week
earlier in sales of new passenger cars, but volume was still down
of
in
unseasonably
1959"
in
an
The total dollar volume of retail trade in the period
ended
on
Wednesday of the past week was from 1% below to 3% higher
than a year ago, Dun & Bradstreet, Inc. reports. Regional esti¬
mates varied from the comparable 1957 levels by the following
percentages: Pacific Coast States +2 to +6%; Mountain 4-1 to -f 5;
will in it¬
additional $7.5
"Employment will increase by
1,600,000, which will be'
about
sufficient to
absorb the expected
growth of the labor force and to
reduce
sending the total economy to a
billion in output.
high of nearly $475 billion.
Business, they believe, will up
is
the
prediction being
made in the Prudential Insurance its plant and equipment expendi¬
tures by $2 billion.
Co.'s
"Economic
Forecast
for
Middle Atlantic, South Atlantic and West South Central 0 to
Central
—
to
+3; West North Central —3
4-4;
to +1;
New England and East North Central States —4 to 0%.
Apparel stores reported appreciable gains from both the prior
a year ago in sales of women's sportswear, dresses and
fashion accessories. Volume in coats and suits showed a slight
week and
,
year-to-year gain. Although purchases of men's apparel were
close to the prior week, they were down moderately from a year
and suits. Best-sellers in furnishings
Digitized for especially hi topcoats
ago, FRASER
unemployment to
nor¬
a
mal level by the second half
the year," says the report.
The
temporary excess : in
force,
together
with
labor
of
the
in-.
creased productivity per manhour
and an excess in plant
will
exercise
ence
capacity,
restraining influ¬
during the first:
a
prices
on
half of the year.
.But
the
.
"
:.
report
\
that
warns
'
"as
the economy moves toward capac¬
ity operation the threat of infla¬
tion will reappear."
•
.
The '58 Recession
This
The Prudential economists also
1959," released this week by Car¬
believe that Federal Government
Shanks, President.
After noting that "the recession expenditures
will rise by $3.5
of 1958 is over," the repovt; fore¬ billion and that state and local
rol M.
In reviewing the recent reces¬
sion, the economists contend, "Al¬
though all recessions involve in¬
ventory adjustments, the business
dip which occurred in early 1958
was
"V''i
\
i'
r-:
.
1 '
•'
r
•
socks, hats apd dress shirts.
A slightly greater interest was
ments.
buying of furniture was up moderately from the similar
1957 week, with principal gains in occasional items, bedroom sets
and case goods.
While volume in floor coverings and draperies
The
ranges
moved
volume
was
from the
up
of the
in linens was un¬
sets, vacuum cleaners and gas
prior week, but; over-all appliance
last year, interest
over
'inventory
an
either of the two
"t;
;
net
reduction
of
$12 bil¬
lion in the rate of inventory pur¬
chases during the declining stage
than
for television
call
>
"The
The
substantially
than
previous postwar business adjust¬
noted in children's clothing than last year.
climbed
clearly
more
recession'
1958
adjustment
double
the
fall
was
more
experienced
in 1953-54 "
preparation for Thanksgiving housewives stepped up their
buying of canned goods,-fresh produce, poultry and dairy products.
However the forecast notes that
"The recovery from the recession
has been just as dramatic as the
Interest in frozen food, baked goods and fresh meat was sustained
previous decline."
down somewhat from last year.
In
at
a
high level.
apparel
"By
Most
wholesale
centers
reported a marked rise in
Spring suits last week. Volume in Spring
dresses and coats moved up slightly.
There was an appreciable
gain in re-orders for winter coats, suits and skirts and trading
approached that of a year ago. Interest in men's winter topcoats
and suits equalled that of the prior week.
Sales of furnishings,
especially hats and socks, expanded moderately. A slight rise in
the call for children's winter merchandise occurred with principal
gains in boys' slacks and sports jackets^
for
orders
Transactions
in
wide
industrial
fabrics
and
of
quarter
the
being brought into
are
line in the closing quarter, output
is surging ahead into new high
ground.
to
rise
.
.
.
With sales continuing
and
businessmen
confidence
will
restored,
move
more
wholeheartedly
to
the
task
broadening stocks on hand."
synthetic
of
W. H. Newbold's Son
especially print cloths and sateens.
was
third
inventories
goods
climbed noticeably the past week and sales exceeded those of a
year ago. There was another gain in trading in cotton gray goods,
and worsteds
the
year, production was back close
to the 1957 peak,, and now that
women's
Although volume in woolens
sluggish, interest in carpet wool picked up sub¬
To Admit H. R. Neilson
stantially. Mid-Atlantic dyers and finishers reported a slight rise
in incoming orders, as volume matched that of the similar 1957
PHILADELPHIA,
Pa. —W.
H.
week.
Newbold's Son & Co.,. 1517 Locust
Bookings in occasional tables and chairs, upholstered chairs
were sustained at prior week
levels, with vol¬
ume close to that of a year ago.
There was a moderate increase
Street, members of the New York
Philadelphia-Baltimore Stock
Exchanges, on Jan. 1 will admit
Harry R. Neilson, Jr. to partner¬
ship.
and
and bedroom sets
in orders for
the
call for
unchanged.
and
television sets and
radios from
a
week
earlier, but
refrigerators and automatic laundry equipment held
Retailers stepped up their buying of gifts, housewares
glassware.
Volume
in
draperies
and
floor
coverings
Now
also
heightened.
fish
Ray Robbins Co., 500 Fifth
Avenue, New York City, is now
doing business as a corporation,
B. Ray Robbins Co., Inc. Maurice
Food wholesalers reported a slight rise in orders for canned
and vegetables and fresh produce during the week, while
interest in frozen foods faltered.
Volume in fresh meat, poultry
maintained at the level of a week earlier.
Machine tool orders in October rose noticeably from Septem¬
ber and were slightly higher than a year ago, the National Machine
Tool Builders Association reports. Much of the rise was attributed
to purchases by customers to beat price increases and November
orders so far are lagging behind October.
and
dairy, products
Corporation
B.
was
Department stores sales
on a
country-wide basis
the Federal Reserve Board's index for the week
Robbins,
as
formerly
President
is
and
proprietor,
Treasurer
of
is
the
corporation. Elayne Wadman
new
Vice-President; and B. Robbins,
Secretary.
,
With F. I. du Pont
taken from
ended Nov. 22,
BROOKLYN, N. Y.—Abraham
1958 advanced 2% above the like period last year.
Deutsch
ing week, Nov. 15, 1958
with Francis I. du Pont & Co., 26
Court Street, as a registered rep¬
In the preced¬
For the
four weeks ended Nov. 22, 1958 a gain of 3% was registered. For
the period Jan. 1, 1958 to Nov. 22, 1958 no change was recorded
from that of the 1957 period.
an
increase of 3% was reported.
Retail trade sales volume in New York
was
ago,
unchanged to 1% above the level of the like week a year
trade observers estimate.
Rainy weather
at the
on
has
become
associated
resentative and co-manager of the
Brooklyn office.
v
City the past week
Friday adversely affected prospective sales
night opening, which was changed to Friday, due to the
'
East South
$475 billion."
warm
moderately from last year, spot checks show.
"Gross
says,
record
changed.
grain prices were close to those of the prior week.
discouraged by a United States Department of Agri¬
report on grains and soybeans that had gone into the
Government price support loan as of Oct. 31. Although the report
showed record high impoundings of wheat, corn and soybeans,
they were below expectations.
.
Buying
accumulation
self account for
were
was
level last week, with much of the dip due to lower prices in steel
on
Gordon W. HcKia«o>
forecast
the United States) is
likely to rise
by about $34 billion, to produce a
figure for the full year of almost
sub¬
and an improve¬
in corporate profits.
ment
op¬
National Product (the value of all
goods and services produced in
The
to 55 from 62 and in the East North Central States to 32 from 34.
as
a return to "capacity
operation" by the end of 1959, the:
""
.
units,
the previous year.
over
Prudential
increase of $16 billion in
billion.
1,150,000
Predicting
sharp rise will bring consumer
expenditures
to "a
record
$307
nine
were
an
billion
be moving the public's purchases of automo¬
1959, with con¬ biles, household appliances, food
taking the lead and other goods and services. This
during
spending
major geographic regions,
Failures in the
Middle Atlantic States dipped to 86 from 89, in the Pacific States
except
week-to-week
sees
to
posed to about 1,095,000 for 1958,
accounting for an outlay of $1
"will
economy
upward"
occurred in the service lines.
mild
Private housing starts will total
close
reports that bis economists, headed by Dr.
•
.
governments Will-up their, spend-*
ing by $4 billion during 1959.
Shanks, President of Prudential Insurance Co.,
McKinley, foresee
a return to
"capacity operation" by the end of 1959 amounting
in Gross National Product terms to an increase of
$34 billion,
or a fall
year figure of almost $475 billion. The forecast terms
the business dip of
early 1958 an 'inventory recession" and
submits that not only will profits and wages rise but also
unused resources in plant and labor will be
steadily absorbed.
1
37
Thanksgiving holiday.
According to the Federal Reserve Board's index, department
City for the week ended Nov. 22, 1958
a decrease of 1% from that of the like period last year.
In the preceding week, Nov. 15, 1958 a decrease of 2% was re¬
ported. For the four weeks ended Nov. 22, 1958 no change was
noted. For the period Jan. 1, 1958 to Nov. 22, 1958 an increase of
2% was registered above that of the corresponding period in 1957.
.
Cyril E. Cunningham
Cyril E. Cunningham, New York.
City, member of the New York
Stock Exchange, passed away sud¬
denly Nov. 26 at the age of 62.
store sales in New York
showed
Joseph D. Goodman
Joseph D. Goodman, senior part¬
ner in Joseph D. Goodman & Co.,
New
Nov.
York
22.
City,
passed-
away
*
38
The Commercial and Financial Chronicle
(2338)
Continued jrom page
uncertainly, into the crystal ball Standard Oil of California, Sintechnology. - clair, Atlantic Refining; to name
Three
shale
processes
are r at
only a few. ' Ti*e more important
present known to be of interest of i these patents, along. with the
in the United States.
These are: over-all status of oil shale tecfaThe Union Oil Company's verti- nology in all its
aspects, are discal-retort, rock-pump process; the cussed each year in the September
13
With Crude Petroleum
gas
-
combustion
the
of
process
discussion that
the previous
from
will inevitably
oil
shale
become'
increasingly cheaper to produce
than domestic crude petroleum,
due
to
the
inescapably higher
Imports,
of
could
course,
finding and producing domestic crude. The improvements
which will still logically occur in
shale technology will serve only
to hasten the rate at which this
As
occurs.
has been selling at average prices
costs of
.
.
_
..
S. Production vs.
Future U.
Demand
It remains
fa-
to examine the
prospects for U. S. petroleum
production in relation to
demand. It is expected that do-
ture
crude
increase
will
production
mestic
S. Bureau of Mines; and the
Aspeco rotating-kiln, heated-balls
significant competition for shale
oil in the future is foreign oil.
The future price for imported
crude is, of course, indeterminate.
a
general yardstick foreign oil
approximately $0.70/barrel under
comparable domestic crude prices,
The price differential is naturally
an
artificial one, and could be
changed at any time.
The
trend
in
foreign crude
prices would appear to be upward.
This is particularly true if
nual research review
process of The Oil Shale Corpora-
sup-
p]y the entire deficit between docrude production and aernand- in
1970./ Thus, the only
mestic
esses now
What; I. should like to -do^ how¬
briefly "orderof-magnitude'* figures to point up
the economic problems
facing de¬
velopment; of a competitive oil
b,•.
ever, is to present
issue of "Industrial and Engineer-
U.
Future Foreign Crude Situation
ject prepared by
ing Chemistry,"
as
part of the
on
shale
an-
not
this sub-
to
speaker,
your
Thursday, December 4, 195&
.
the economics of the various
proc¬
under development.
of oil shale's future
Competitiveness of Oil Shale
.
.
These
process.
to
be construed
of the
one
any
figures
are
applicable
major /proc¬
as
3
esses
previously mentioned,; al¬
though, in : one sense, they; are
tion under investigation at. the
J should like to direct your atDenver Research Institute, Uni- tention to one of these processes,
versity of Denver. Several others that of underground or "in situ"
under apparent less-intensive in- retorting, as disclosed by Sinclair
vestigation
will , be
mentioned Oil and Gas Company as U. S.
later.
<
- V'
\ ^ 1'
Patent \ 2,780,449 in 1957.- This
The Union Oil process has been process was studied at Sinclair's
developed on the largest scale to oil shale property on Haystack
date. A large pilot plant and as- Mountain in western; Colorado
sociated mine has been operating: several years ago:
v ■
in western Colorado near Grand
A gas is introduced into an
rValley since March, 1957. Dr. ? input well under pressure to proFred Hartley, vice, - president of4 duce parting of the oil shale; and
the company, stated in Salt Lake increase permeabilityAAhotzone
City last month that the vertical is then established by/Injecting
upward - flow retort utilized riiti fuel gas and air. The hbt zone so
these studies had attained capac- ; produced 'Underground
' moved
to
common
known
,
all
that
succeeded
of
some
in
them.
improving
categories of these costs.
.
It
-would5
certain
•
•
thatit - costs
between.' :$1.40: and
barrel; to
per
is
have
appear
somewhere ;
$1.65
It
processes
mine,
crusfi,
-
and retort 25 gallon/ton. oil shale
to shale oil at the
present time.
This
might
be thought of as the
the "well-head,"' except
the resulting shale
oir,*a£
price
at
that
usually
able,
-
obtained, fis
A-coking
is; / therefore
This
-
will 4
not
pump-
visbreaking step5
usually- necessary, c
add
approximately
or
$0.33/bbk,
so the cost range now
becoines: $1:75 to $2.00 per bbl. as
the
in the period
around 1970, followed by a dedine thereafter.
Imports, which
now represent approximately one
barrels
day
per
barrels/day (or 12% or
demand),, are expected to
barrels/day (25%
million
total
rise to 3 million
of total demand) by 1965.
The trend of the future U. S.
demand-production picture suggests that a shale industry as
large as 1 million barrels/day in
the period from 1970 on would be
quite reasonable, and that an industry of such size would still
furnish only 1/3 or less of thedeficit between U. S. demand and
U. S. domestic crude oil production.
y
companies, to 75-25 in favor
the governments involved.
of
investments made by
an(j British companies in
Capital
Eigure
figure
selected
„
as
.L.
being
consistent
with water
availability in western Colorado,
will
in
chance
have
this
better
a
future
than
respect
^
is
It
possible
quite
that
im-
the
the
pipeline
If
'
a
in
rea- :
down
in.
cost of
California
be¬
Sinclair "undergroiMtf/xetortr/ comes
$2.25 to $2.50
a commercial
ciently improve shale
thayt sh£e
so
when
oil shale
could
do-
,
the
enter
TT
greatly
radioactive
reduced
Fundamental
yield before this nuclear explosive
_•
0
The second principal U. S. proc^-
technique
e
1w
with
h,lt
*"
•
order
prove
oil shale. either underground
niques
>ven as a means of amoving
oil
Oil
Shale
'
Research
'
-i
to
scientifically im¬
shale processing tech¬
substantially
from
this
point on, however, we desperately,
su«ace overburden.
.
.• need more
basic, fundamental re-,
1 do-not wish to appear pessi- : search on the, chemical nature of
mistic but it would appear at- the organic matter
therein, (the
or
0il can be supplied
/
-
In
be pursued further
can
'/i®, fJJJhTVr" '°n.,for
^
technology
West Coc.st as cheaply as,,',aw ihale
At the flfne' that*
foreign crude. There is some rea- the Rifie Colo oneratinh* of th#>
son
even
today, to believe that
Bureau ^ere discontinued in 1955 Present that practical, economical t so-called
"kerogen") from which
thls goal can be attained in the
at a
recovery of shale-oil must con- the shale oil is derived.- We need
near future.
Limitations of im- 200-ton-ner-dav
caoacitv
inter
tinue, for the foreseeable futuresthe
to
requirements for
creation of an industry of this
size. It is possible that alternate
"synthetic fuel sources will also
be available to aidta supplying ports, as has been suggested, to
the deficit by 1970.
The most say }/6 of domestic production
likely of these is the Alberta tar wouid
further
aid
shale
oil's
sands, since it is doubtful, m the caUse.
.»•
light of the current status of techConclusion
Six: There are a
nology, that
^thetl€^is.^a^i number of reasons to believe that
on coal will be low enough m cost
,mports will „ot be allowed to
to be competittv .
time
with
and
oil laid
is a reasonable^ extrapolation" for
.
.
.
chale
of
bee
has
duction
.
per barrel. V
plant,- tM'yt://*//V/ ring process will still, r^U^e.con-/^
jyj;icicile East oil can be returned
Union somewhat confused all siderable further investigation be-■> Of the $1.40 te $1.65 required
c01T,pietely in one to two years, proponents of oil shalevwheh, }%\ fore any evaluation1 bf iti/future/ to; mine,' crush, and retort the
Decause
0f the high production closed down its experimental pilot;. potential cart berhade/VIf is in- shale approximately $0.90/bbl. Is
rates per well drilled.
By con- Plant a"d mine in July of this foresting to note in this''connec- required for mining and5 crushing
trast oil shale requires an eightyear- Its reasons tor so * doing tion, however, that Frojeet Plow- alone. The balance of $0.50 to $0.70
to-tcn-year payout period.
Forstated to be that (1) -ithad.share at Livermore,---Ca;nfprnra,' per barrel is required for retorting.
Of course, if we could produce a
eign oil is therefore a "slot obtained all necessary ;tecifoical which is devoted to a/^hia^Qt
machine" against which it is pracr,;data, without further prolonging underground hydrogerr bomb ex- pipeline crude directly from the
retort we could save most of the
clcally impossible for an "honest the
costly operations lnyolyed;;plosions, is known to/have specuman" (either domestic crude or ana (2) the present world-wide ]ate(j on ^he possible applications $4.35/bbl. required for upgrading
0il shale) to compete^ Jt; would oversupply of. crude and resulting of nuclear explosions to oil shale the shale oil. This would there¬
appear, however, from the previunstable domestic crude price pic- technology. Much research is still •> fore appear to be a most fruitful
cus
discussion that cheaper oil ture necessarily postponed the day neeessary on "clean explosions" area for research.^
/
g
^
1 million bar- mestic petroleum.
rels/day "ultimate shale oil proThe goal, of course, is to suffiThe
oil" enters
Colorado
$0.50/bl.vis
single retort (of this same design) >output well. C-.!
sor.abie pipeline tariff the
with a capacity of 3,000-•ions/day.";
date it AVbhM'^a&eir^iiia't?.'
supply the entire growing deficit
between
domestic
crude
produc-
^^0^
to
mjttentlv
over
9-month
a
sustLLd
A?
2
■:
-
'
to depend on mining, and then reto^ting the shale above ground,
neriod
*
-
T
-
J
T"e f Jrm 01 Cameron and Jones,
^ fhi^ retor?
of
lS
tnns^dav ^
^ paulo Brazd for
Pacity, near_pa° Paulo, Brazil, for
Dacitv
ne
r
This
particularly
appears
know
and
true-
of
j/ole
of .'the
and:
when one considers the new econ-"
Do,
omies being effected in both min-:
/iriiiincf
^orr.nt.cirvn
its
decomposition,
the
of
sulfur, compounds
nitrogen
;
present.
realize that we do no-t
know,
as
yet,'-what^^ the
you
even
inS and above-ground retorting,
The use of amonium nitrate as
an ■ exPlosive and rotary drilling
fn Tanihho
about the chemical
more
mechanism
chemical
structure
of
oil
shale
; organic matter is?
Such.; fundamental
research
is
m-P
slow in,
yielding results, so it must
be started years ahead of its ex¬
pected
application to improved
processing fechnii^tues.
Realizing
this the. Denver Research Institute
S wi
staiur
^op^nt
SproblemS
to
nSitT for
cheap extraction techniques,
difficulties a s s o c i a t e d
with
their
respective locations,
and great distances from eventual
market are common to each sub-
process
CTude.
^
P
(2)'
Further
combustion process i? now
nationalization of
other
foreign
crude reserves will keep foreign
crude prices high.
(3) Demand for crude in the
Middle
East
and
under construction m Brazil,
The
recent new shale
process is the modified Aspeco
process of The OU Shale Corporation, und«• investigation here at
t0„be
These
ar«ue weU for a commercial oil
shale industry based upon aboveground
retorting in the
ture.
-
*
One
•
-
further
"4
'
new
attempting to. organize an Qjl
Foundation,, which is to be
3 /year cooperative program of
Shale
a
fu¬
near
:r
is
research into the
oil. shale.- It is asking
petroleum artd chemi¬
companies to contribute, on ah
intense
** •
/basic
nature" of
development
interested
technology, deserves
I refer to the hydrogasi-
cal
equal
share,
initiate
this
non-profit Jbnsis,
basic
research
to
now,
in order that oil shale
^ale
technology
fbom its findings 3 to
years
hence.
We invite • in-,
converted to a fuel gas by reaction quiries from companies interested
with hydrogen at 1,200-5,700 lbs/ in oil shale's future.
:
ther-
square :
may benefit
5-
markets for foreign crude out-
appears
quite improbable at pres-
er
ent that
the tar sands of Northern
side the U. S„ at continued high s»ale »"! fed.
Alberta
hope
can
to
be
mueh
oi^le6^ besCt° eSh'^n
At besL, each can
with oil shale.
hope to obtain its resoective share
of
future
the
The
total
gap
domestic
market,
in anticipated de-
mand by
1970- to be filled by imports and shale oil (or tar sands),
prices.
fhiidized
_
barrels
million
acme
,
**•
t
.
.
...
.
advances in shale technology wiU
improve this competitive position
barrel/day oil shale
in-
tktdariy
by
this
time, can-also
disturbing
oil
,Lle
inch pressure and 1,300°
I might mention, in 'this .con¬
nection; that I am quite impressed
by the increasing volume iOf fun¬
damental researeir papers on shale
reported from Russia in the last
few years, The Russian^ have ob¬
viously recognized the long-term
I should like
ly
to
shale's
those
Energy
ence,,
and
now
recent
to-
provide improved operation and
will be placed on-stream again iai
r
a
24
We at- Denver
the near future.
Research Institute
are
confident
feasible.
as
The
organic
intheU.'S.
fUej gas
a
Because of'patents at present un-
in
Ir°r
applicatron it is not possible to
discuss these in detail at the mo-
ment.
Shale CHI Proeess Economies
t
have
deliberated
avoided
-
so
Thepatentfiteraturep-t
Confer— other companies
look, however torting
—
m
oil shale
The -Texas
this, controversial
simply because,: unless
is crystal. clear as to the bams
to
enter
of estimates-
of
presented-, the meth¬
calculation, the assump-
»SLVTS»LIS
on-
of o<i
shale's
present status and tremendous fii-
arpa now,
one
It is- time to cfose .thisT?tour de
force'*, in, support
pose
ods
several years indicates activity by
"
Summation
proce»_ economics. I db^not pro;
der
advances
years
Resources
also
matter- in
velopment of their own off shales.
oif shale is wprth twice as much
By contrast,, little T fundamental
per pound,
at today's prices, in
shale research.
being supported
the. form of bquid shale oil than
as
- way-
to turn- brief-
need^ for basic research in the de¬
ton/day pilot
plant here in Denver for a period
of nearly one year. This pilot
plant is now being modified to
operated
oil that thia process offers several far,
Technologry
dustrv by 1970. Tar sands, if com¬
petitive
A
Recent Advances i» Shale-
adequate market for a
an
million
the
-
ZZiV S°TrZd f« aandd/d - research proceeds.
S^wui be subtly large to mdUStry »•
provide
reheat
nrnre«5<?e<?
•
per
C^nclusion^lve: We conclude
the resulting
to
Overaft Conclusion
mospheres. In both the Union and d:Ir0™2^tfdHf'Sd^in^Sr
'
Bureau
the eornHirstion
data presented it would appear,
The six specific conclusions
however, that this process must
previously presented have each
^furnishingtliea:fortheproc- await considerabiy higher natubeen favorable to an oil shale in- ess 's ™
same vess?' ral gas prices than those anticidustry. The over-all conclusion is as me retorting zone.
pa{ed jn the re^onahie future,
therefore obvious. Oil shale techThe Aspeco proeess has been before
becoming
commercially
nology has now advanced suffiday. In such a large market there ciently to yield shale oil at costs
i# certainly room .for both oil which are at present competitive
shale
and tar sands to supply with'
posted
crude
petroleum
even as much as one million barprices- at a reasonable rate of rerels per day each.
turn on the investment. Further
is
bed
capital, profit, royalties, etc
,
reemployed it is almost imoos«ible
Companyy to*- fairly and accurately compare
„ture. .1 have triedt,
throughout the
discussiorv .to detour
ar^trnd
the
obvious arguments: as to rrl shale: s
key
role
xrr
the defend of
eoimtry.. Rather, the
been
that oil shale
,
upon
fhesis
our
has
stand
its own compefftiv^ oosifion
in the market
place; an* -that it is
Volume 188
Number 5800
...
The Commercial and Financial Chronicle
a position to do
just that.
J.
An eloquent plea can, of course,
ber ihade for- bur mWed
(2339)
States,- that- is equal in size to r 195&;upi-7.2% from 1958 and 10^
those Middle E^st reserves. An oil times die: dollar: volume.;of 1947.
industry {[capable of using This; class of construction still has
reserves$ can ydo ^great groivth^ahef^d, Mr. Wilkinson
a workable oil shale industry for mhth'in tite heiar future ■ to alter1 saidi
: ^
/f }**'■'
defense purposes.
Perhaps these and strengthen our foreign policy
Commercial construction will
rapidly attaining
shale
Securities Salesman'sM
arguments canf be" siim- ^. with reject-to' the Middle -East.; reach - $3,45 ^billion, in 1959, off
' —;
By JOHN BUTTON
best by " the following
The next few years will be ex- 1.4% from 1958 when it reached,
simple facts: In 1938 the Ui. S. .had- citing ones few; oil shale. It is al-i about $3.& billion. Effects of the
59% of the free world's petroleum ways challenging to be part of the recession and excessive building
V
reserves, excluding oil shale. ; To->; creation of an entirely new in-of shopping centers in some areas
The evidence is clear that public' bear markets and bull
markets,
day'if hasiOttly 17%>^In^T988 the-^dustry^^th aU that such an in- , arestill being felt in this category.
psychology as it pertain? to cur- : than there is in tzyhrg to pida the
Middle Bast ha&;bnty .14%-*^
new: jobs for; our „Constrticti^. rate of new; office, rent thinking regarding invest¬ right stock for a 10- or2<MMnt
free wbrld reserVes. Tbday ii h^
further;buildings,however, isexpected to ments is rapidly approaching the
move in a boiling buB markel A
Tl^.^These -trends" arei;exi^tedr;^)i^mn»t%n-rOfs the 'Rocky:i;staKat .the ,195ft level.
>
stage where many people are good broker can provide the gaidto continuer :
and utilization
•
more concerned with
obtaining a ance that can assist an investor in
But in' the comm^Ciall^mihe-TV of an"untapped national resource,
About Industry
Winner in the market than they
protecting and even increasing
.
/ Construction
ablestrata^aloneof'theiwestern^ I, hope ibat some small degree of
are in following time-tested prin¬
capital over the longer term bid:
Tf "ci^rov,«ffl
ithat-challenge has been communis ; z ^Industrial construction, hit hard ciples of investment This
may anything beyond that lies hi the
defense
.
marized
.
■
-
'
■
.
..
,
-
.
~
,
.
^
H
_
...
,
,
T
..
.
.
.
««
staled
untapped
within
:
reserve
the
explain, for example; the current realm
-Ot- 0nV
^aeep pre^ent status and its promise for out ofthe woods. The total yolpopularity of investment advisory
United tomorrow.
' ume in 1958 will come to some
continental
.
$2,85 billion. • A further decline of
services,
especially
chance with, all the at¬
tendant risk involved
those which
capital gains
Resist the Tendency to Try to
Outguess Hie Market
outpace the
rest of the market. Then, too, the
There are trading accounts that
'yWiikinsori."■: "•. - '
■*
tension packed atmosphere of the at times ask for an opinion on
i
Gonservation type construction
Johni-Manville executive predicts 1959 bousing will be dose
board rooms is spreading outward the course of the market or a par¬
such as flpb4 control dams, public to the business office and
?• t«> 1,206,000 comparedtol,169^»ial95S,aiid that tetd
among ticular stock and there are people
.j,
parks^. .reforestation facilities and professional men. An article will who are inclined to speculate and
L1959 construetiofr wilt iinwrf} likely weed$79 btHion for record
tbe like, f6gether with some other
appear in a financial magazine who know what they are doing,
classes- in -the public service sechigh. Mir. Wilkinson Relieves: imfitftrial eonffruetion' m not
one day that is favorable to some or
at least think that they do.
vtpr,,; should-Vireach about $1.7 bilyd out of the wood* to detail* ettopriiicipal type of coucompany and its shares will be Certainly they* too* deserve the
lion in
1959,,cqmparecl with $1.6 eagerly bought the next. It is be¬
type of service that is needed by
.yfVstractionreachiiignewFevele.' -v
vY+:
^;billiph;ini^958^1'*I;.; .;
'' coming more evident that the them to
operate as-efficiently as
An industry study made public ; likely to show/a decrease inl959. - '
construction general public is reaching that possible. By all means try and
indicates that (Construction in* the Almost all other types of construct ^should show abput a 14% increase stage of thinking which disregards supply the quotations, the toots,:
United Statedin : 1959; will; prob-- ;iioriindicate substantial gains withbillion,;,com- such fundamentals as income pro¬ and the opinions which they seek.
ably passf the $70- billion -lever for ? increases ranging as high as 17.2 % »
billion in duction and capital preservation, But when it comes to your invest¬
the ^irstrtime in history;. -jvWCv
and is more concerned with out¬ ment accounts* and yon notice a
muclP
than - 6ffsetting the iypv-|,
;
'
*
;
New construction alone • will al- Tagging sectors.
:■
t!;
^MB^»-social and recrea? guessing the other fellow by try¬ tendency to stray away from their
mo^ certainly exceed: $50 billion':4
■ 'iAc/'
tional-4ype, building^ for 1959 .is ing to select a stock today that program and to seek out tips and
and " could- pbssibly Teach :$02'bil- :*
• I^0d*O00...Hoiiies In 1959 f . • > • estimated- at; $ 1.& billion, up 1.9%
many other people will be willing join the parade* then it is just
lion, according to ;W:* Ri; Wilkin" Information compiled by Johns- t^m - the r.1958 .figures of $1,275 to buy tomorrow at a substantially good business for them, and for
soni Vice-President of Johns-Man-^Mahvilieio date indicates that the ^fBop;
higher price.
^
■ r
'
you, to have a talk with-them.
Make if plain that the best course
villc CbrpOratijon; manufacturer of "J number -of :new.« homes to be; buBt t j Construction of military faciliSound Values Pius Patience
is to follow their program of sound
building materials' and industrial- hi"1959xwill come fairly > close to ^ties ia.expected to jump 8.7 % over
about 14% to $2.45 billion in 1959
Tke1S5S
DaItook
offer
the
situations
so-called
that
will
se^si'prnbable;'according to Mr.
•
,
'
#
,
1^00;000,. compared
prbdudi. ^
i
Cuireiit restimatCs
.
additional $20 biliion
with about the $1.15 rbillion of 1958 to reach
indicate:- an l,160;000in:;1958, up about 40,000 , $1.25:.bilji0nin 1959.
wilt be spent' new^ homes.
•
^ i
•:.i: AhbthCr category
expected
to
in; i959
on .modernization, remQd- ;:
;;Single-'family houses, which ac- register.a gain is in hospital and
elir^^ raaintenaBcC and te^ir .of- counted:foci 80% of the new con- .institutional ^ construction, which
existing.structuresv Mr; WUkinson^structioniin^the residential cate- ;yvill rise
billion in 1958
said ME.vWilkhi8on maintaiimcon- gory during 1958 will register a to $1.05 :biliion in 1959, up 5 %.
I suppose what most people de¬ investment and not to start trad*
sire more than all else when they ing in a market that is difficult
have
a
broker is
practical guid¬ enough for the professionals.
m
j
Those of us that have success¬
Many people have a certain
urge to get into a market that is fully acquired stocks in companies
boiling with activity and even to that have grown in valiie over the
take a flyer once in a while. That years have discovered that you *
tihilfng tiOontaCt^ with^ i^eioAtcct^rsomewhat^sniaUer ^percentage ;in^balance sheet is certainly not anything to be often make more money by sitting,
indpstrial^ consttuctiqn engineers igsa but will-be. more4han bfiset-fon^A^^c^strucUon of all types decried per se* But the best method than" your do by changing. Prtm
and buildmg materials dearers all by^anr anticipated large increase;
put together by Johns-Manville at of approaching the two objectives "your, client's vieviq>otot,"hbwiverf "*
ove^ tfie( United, Btates. &i»£v;y.bit !^mifltl««faiiiHy; dwelling due, tO ; year-*end, «hows a grand total of that all investors should always it is only natural for him to beTlie iixml figuri^. h^^ said^ will;contirtuing^. strength in this type around
$49,250,000,000 for 1958 recognize, namely, capital conser- come restless witlr sr stodr he has
depend -somewhat:; on) .the^-ease^ of 2. ofr construction^ £ New.^ apartment ^ compared" with- about $52,075,000 - vation and income production, is held for several years and thai has
: get!h^Jportgaige-moncy^is-'yiesvhetwes^irr? 1959 may/reach > 190,000;
000-expected: in 1959. This fore- to follow a plan and a program not increased comparatively in
is that as long^ as our present-eco- ^r? :even; touch fhe 200,000 mark casts a 5-.7% t6tal increase in new that is personal and patternedr sa market price along with many
nornic; " recoVe^- vcontrnubs ^at :;its ;.,the: way denrands are now shaping - construction of all types in the as to fit their particular situation. other stocks that skyrocket to
ance.
.
'
.
not-toorrapid'pacr(^ :and ,does; hot:>up.j-i
conipef the
-
1
-7-
;
^deral^Re^rve^ to ^ About;$19.4 billion will
"3rd 0^^JPOQGy*t
IpCSfcCS tQ.^,hoteCS
in T 193ft.
.:
.Ipe quick responsc ofihousing -^jjj^y^
jUie; easing^ of^mortgigte2TatesiM^^.^^- i:>;f\
earlier thii;, year,1 the "Continued
Highway Construction
the marriage-age
vPQPulat>^
bers
m
tion
after
a
The Vaddfi^
InpllMlerf
-
$20
billion
mn/teinii7afinn !.nlmr/
of
ivtrtIn
push the Agrand total of all types
to
^;HWway--constructiou
y^e'ar-ahead.v
>:
be spent
«::w of U059 construction. to well
over
the $70-billion mark.
.
-lias, .ibe-
I..i
.
...
.
business; Early ^WiA '
10-ye.ar; .declxpe, and>^sti*nateS for 1950 show that $6.8.
an enormous
,
If you have some women clients headlines: on the financial page;
who are dependent upon their in¬ But somettimes real growth is not
come from securities for an im¬ so aiHparent and a stock will be
portant part of their living ex¬ neglected, yet if you do khow that
penses, certainly they should have developments are such that sooner
or later a higher market appraisal
a portfolio of high quality stocks
and bonds that are selected for should be established certainly
this purpose. Any inclination on your client should know the facts.
the
'lil*.
part: of
such an investor to
Your customer should be
kept
disturb a good program by trading posted on developments concern¬
_
Russell Le Vesoue
chro^S
be.<«pent:;: foy
in
highly volatile market leaders ing the growth stocks in his port¬
should be resisted. When you hear folio. He should understand that
the familiar, "What's the matter his financial welfare depends upon
with my XYZ common, why isn't the oVer-aH Stability of his invest¬
it moving?" and if XYZ-common- ments* over the longer term and
xugiiway
tne annuai amount spent on nign-
bined to create an annual need m
waV{
excess
©rf}20fl,<W0^
to be
tower of
construction
as
,
.
recently
„r.
.
^
>
-^" T^-7""^*
ag
strength
in aiyear
of business
adv^ity^d^ithout
question^was^theup the national
biggest single
proq? that shored
1
^2-y w- ?
195^Mr^il)£msbn said.
New
construction
of
. v
all
types
"W? fre in an era in which the
huildint of great superrhighways
from
cbast-tOHCoast and from Chn-
>da- to Mexico:is comparable to
the railroad building period in the
^gth
Century," Mr. Wilkinson said.
a
that
high-grade
dividend
V
h*""'
'
volume
of» Wm.
—
E.
—
Pollock
&
~
Co.,
Inc.,
~
19,000 more new dwellings
an
of
$11 or $12 billion by.,
1965«
Each
.
-
:
•
(special to the prN*wciAt Chronicle )
BEVERLY
KILLS,
Calif.
Dealer-Broker
from now on," he Morton Kandell and Robert H,
In spite of the recession, almost; said, "new highways will generate Left are now affiliated with Towere
[than in 1957. After
low first quarter in
1958,..-con¬
rapidly recov¬
ered and in. September and; Octo¬
ber new homes were being started
a
struction
"at
an
•
volume
annual rate close to l,300,-
Total new starts for
1958 actually wiU be close - to
1,160,000 when final figures are
tabulated, compared with 1,041,-
000
a
year.-
There
immense amount of secondary
boco. & Co., Inc., 9235 Wilshire
brought Boulevard; members of the Pacific
about by demolitions near the new Coast'Stock*
Exchange.
highways and replacement of a
£
large volume of residential and!
Bingham, Walter Adds
commercial construction, as well
-(Special to The Financial Chronicle)
as creation of entirely new busi¬
LOS ANGELES, Calif.—Allan
ness and residential projects."
business.
-
This
is
Johns-Manville.;
-r
have
a
firms
Addressing charge for the entire united States- or
Canada $7.00 per thousand.
Special N. A. 8. D-. list (Main offices only?, also
arranged geographically and alphabetically, approxi¬
mately 3,900 names. Cost for addressing N. A. B. D.
list $8.00 per thousand.
Utility and Other Construction
.
Public and private educational
Joins Evans MacCormack
(Special to The Financial Chronicle)
BAKERSFIELD, Calif.—Donald
1959, present construction, with schools burststudies reveal. Only two catego- ing at the seams with Increasing M. Worsley has been added to the
ries
conimepcial building a n d floods of new school cjhildreiv is > staff (rf^ Evans MacCormack &
indftistrial* ^
— appear
expected tor reach 3;7- billiori in: Co.;-1675 'Chester. Avenue.
tion expenditures in
approximately 9,000 Investment dealers
States, and 900 In Canada.
metal steneil lor. every one of these
in the stock and bend business, all arranged
alphabetically and geographically by Mate* and1 CMIes.
This list is revised continuously and offers yoiv the
most up-to-the-minute sendee available.
We
W. Hanlon has become connected
highway and Utility—rwill account
for ;about 62% of all new construc¬
are
and brokers In the United
being
struction
-Three, big sectors of the con¬
industry — residential,
Addressing Service
year
with Bingham, Walter & Hurry,
Inc., 621 South Spring Street,
Utility construction in 1959 may
members
of
the
Pacific
Coast
exceed
the $6 billion mark it
Stock Exchange.
reached in 1958, according to pre¬
liminary
reports assembled
by
00d started in 1957.
of Certainly* financial health can
only be achieved with a program
that is soundly conceived find it
should not be disrupted to Order
to try to make temporary market
profits which is another type of
game entirely.
-i ■
"AII signs Jiow indicate that highr.^ ^3 ^anta- Monica Boulevard.
Way cbnstrwtibh will continue to
•
^ L'
,
expand until it reaches an annual
1W0 With Toboco
put in place in 1958 totaled $49.25
billion exceeding the $48.5 billion
erdcted in 1957 by about 1.5%.
built in 1958
payer that is* the only worthwhile goal.
is there for the purpose
stability and income production
then explain this fact again to
Joins Pollock Staff
your customer.
There is a very
i ii
dtSpeciatto .The J!in*nciai. Chronicle)
important difference between
BEVERLY HILLS, Calif. — J. holding the right securities over
Robert Hall has joined the staff the
longer term, through both
T'
::
a
is
^
^d Associates, 321 South Beverly
nTnTrd
Drive.
We can
a
also supply lists on gummed roll
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small additional charge.
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—
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—
New York 7, N. Y.
The Commercial and Financial Chronicle
40
.
.
Thursday, December 4, 195S
.
(2340;
The following statistical tabulations cover production
Indications of Current
latest week
week
Business Activity
Latest
Indicated Steel
Equivalent toSteel ingots and castings
Dec.
Week
on
that date,
in
or,
71.5
"1,988.000
2,011,000
DOLLAR
BANKERS'
1,831,000
6,967,885
12,013,090
7
——Dec.
(net tons)
ACCEPTANCES
oil
and
6,918,635
^
Crude
(bbls.)
to stills—daily average
runs
Gasoline
(bbls.)__
(bbls.)
output
Kerosene
output
—
2,474,060
12,695,000
6,366,000
output (bbls.)
Stocks at refineries, bulk
■
AMERICAN RAILROADS:
freight loaded (number of cars)——Nov.
freight received from connections (no. of cars)—Nov.
Revenue
CIVIL ENGINEERING
NEWS-RECORD:
Total
U.
CONSTRUCTION
RESERVE
12,071,000
•12,138,000
6,744,000
7,227,000
OF NEW YORK—As of Oct. 31:
183,390,000
31,883,000
32,942,000
164,330,000
163,916,000
169,877,000
67,251,000
67,854,000
59,286,000
Domestic
shipments
Domestic
warehouse
Dollar
goods stored
on
foreign
643,795
674,264
632.763
550,374
554,425
568,741
$243,008,000
$272,924,000
BRADSTREET, INC.
113,064,000
119,612,000
105,881,000
UNITED
STATES—DUN
159,950,000
123,396,000
167,043,000
INC.—Month
NEW
(Millions
108.890,000
146,820,000
191,389,000
16,056,000
14,506,000
20,223,000
17,524,000
745,000
*3,510,000
8,460,000
9,593,000
384,000
405,000
414,000
481,000
157
140
166
—Nov. 29
DUN &
-Nov. 27
274,000
12,579,000
12,330,000
11,613,000
244
260
299
235
Nov. 25
Nov. 25
$66.41
$66.41
$66.41
5.967c
6.196c
6.196c
6.196c
Nov. 25
(per gross ton)
steel (per gross ton)
U.
<
^
$66.42
$32.33
of
As
To
PAPER
Oct.
1
COTTON
CROP
31
at—————————————~—Nov. 20
Lead (New York) at——.
Nov. 20
Lead (St. Louis) at..—
Nov. 20
JZinc (delivered) at—
-Nov. 2u
Zinc (East St. Louis) at
—2
Nov. 20
Aluminum (primary pig. 99%) at——
——Nov. 20
Straits tin (New York) at
—:
Nov. 20
27.175c
29.300c
29.475c
22.575c
All
13.000c
13.000c
(DEPT.
500-lb,
12.800c
13.300c
12.000c
11.500c
10.500c
11.500c
11.000c
10.000c
24.700c
24.700c
24.700c
26.000c
99.506c
99.560c
97.125c
87.500c
11.500c
.
.
Duram
—
—
Barley
90.48
89.92
89.51
Cotton
95.01
95.01
94.26
96.23
92.93
92.35
Public
Group ———J:
Utilities Group—
88.13
87.86
86.78
90.63
89.64
89.37
Beans,
92.79
92.79
92.35
92.50
Peas,
Industrials
Group
—
BOND YIELD DAILY AVERAGES:
U. S. Government Bonds
;
89.64
89.09
83.53
81.17
corporate
Average
Aaa
;
Dec
Dec.
.
3.51
3.50
2
2
2
Dec.
—
■
\
3>14
3.64 :
4.38
4.38
4.42
4.07
4.07
4.12
i
4.45
Public
Group—
Utilities Group
4.41
4.44
4.48
4.86
4.85
4.90
2
4.55
4.55
4.57
4.65
4.37
4.44
5.09
Dec.
2
2
4.22
4.22
4.25
NATIONAL PAPERBOARD
Orders received (tons).
2
393.1
395.3
392.4
387.7
Nov.
Nov.
Nov.
,_Nov.
22
22
272,186
SOUND-LOT
=
22
94
94
94
94
22
398,251
431,670
421,384
388,664
ACCOUNT
FOR
OF
109.65
109.69
108.97
109.26
Transactions
Total
o? specialists in stocks
purchases
Short
Nov.
Nov.
sales
8
8
481,800
sales
2,346,070
,307,560
NOV.
2,952,590
1,273.960
2,542.650
510,350
606,520
,825,750
Other sales
Total
3,037,450
,265,180
376,150
(tons)
575,046
572,586
3,270
479,841
1,849,385
1,445,110
4,780
6,790
3,904
4,408
26,901
30,104
11,006
11,006
9,047
34,940
32,209
176,345
156,981
257,876
239,539
18,074
18,268
1,764,197
7——.
1,771,679
18,053
1,660,553
Pears
,
crop
.
(12
(barrels)——__——
ERAL
SALES
STORE
DEPARTMENT
RESERVE
SECOND
62,335
31,676
2,903
2,599
186
186
117
—
71,618
29,064
2,932
(tons)
(tons)———
(5 States)
1,020,470
118,548
117
190
1,127
1,108
158,000
States)
1,396,620
40,135
125,338
71,618
7
(pounds)
Pecans
43
47,611
124,717
28,983
——
—
—
States)
Cranberries
6,750
15,497
33
47,611
_r_
(bushels)———
(bushels)
(3
7.332
15,015
33
—
—
7,332
15,186
(tons)
_——,—
Hops (pounds)
-Apples, commercial
Peaches (bushels)
1,899,500
170,500
1,050
141,350
240
FED¬
FEDERAL
DISTRICT,
RESERVE BANK OF NEW YORK—1947-49
Other transactions initiated on the floor—
Total
15,771
2,353
34,940
-
for sugar and seed
beets (tons)„.
2,409,850
-
4,852
18,695
2,353
260,579
Apricots
in which registered—
5,434
18,786
3,904
—
.
Sweetpotatoes (hundredweight).
Tobacco (pounds)
Cherries
BERS, EXCEPT ODD-LOT DEALERS AND SPECIALISTS:
69,092
22,087
26,901
■.
,—
summer
Grapes (tons)
MEM¬
11,313
68,400
23,849
179,048
Late
295,993
304,776
313,809
306,086
121,402
10,641
.
———7
Early summer
Sugar
Nov. 28
!
100
TRANSACTIONS
/
—
——
spring
Broomcorn
OIL, PAINT AND DRUG REPORTER PRICE INDEX—
AVERAGE
Late
250,778
291,364
284,288
120,374
4,780
spring
Sugarcane
Percentage of activity
Unfilled orders (tons) at end of period
1949
(hundredweight)—
Early
_
ASSOCIATION:
(tons)
.
—
—
4.24
Dec.
—
10,964
120,374
1,885,525
.
,
4.46
4.37
Industrials Group
MOODY'S COMMODITY INDEX
Production
4.25
2
————Dec.
Dec.
,
4.21
4.41
2
Dec.
Dee.
A
Baa
Railroad
4.19
11,675
25,754
5,434
—
3.99
4.19
561,977
23,849
(100-lb. bags)
(Cleaned) (100-lb. bags)
for beans (bushels)
l
Potatoes
43,130
607,118
66,400
-
dry edible (Cleaned)
(pounds)
47.637
639,303
:—
dry field
Peanuts
26,528
39,969
11,764
(tons)
34,093
47,657
1
466,301
39,969
Hay,
Soybeans
MOODY'S
39,680
200,221
1,308,360
435,695
34,093
—
____
90.63
2
2
2
Dec.
—Dec.
Dec.
90.06
84.17
22,053
256,677
1,419,351
466.301
;
*
88.13
90.06
22,053
947,102
707,201
239,901
256,677
.
wild (tons):
Hay, alfalfa (tons)
Hay, clover and timothy
Hay, lespedeza (tons)
1,170,768
278,730
1,419,351
Hay, all (tons)—
93.23
3,402,832
1,449,498
278,730
—
—
(bales)—x
3,686,218
10,641
bag)—
Sorghum grain (bushels)
84.04
Railroad
Uu-
(100-lb.
90.48
10,963,680
1,170,768
—
92.50
11,675,000
1,449,498
—
Flaxseed
87.71
$516,000
5,593,251
3,785,544
-
:
89.23
$958,000
'
•
11,764,000
—
88.27
■'
1:
(bushels)
(bushels)
Z'1
AGRICULTURE—
(bushels) „_7——
(bushels;
Rye
$738,200
OF
Nov.
(bushels)
spring
(bushels)
2
Dec.
—
$91,300
REPORTING
'j,
(bushels)—
2
Doc.
——
DEPT.
of
as
CROP
93.23
corporate.
S.
U.
crop
■
7,316,102
;
—
bales
gross
Other
Oats
$1,638,000
$961,000
•'•
COMMERCE):
OF
(bushels)
spring
Rice
Government Bonds
Average
$772,000
Crop as of Nov. 1 (in thousands):
Corn, all (bushels)
Wheat, all (bushels)—
.!
13.500c
12.800c
12.000c
13.000c
$85,400J
YORK—
NEW
*
MOODY'S BOND PRICES DAILY AVERAGES:
S.
OF
BOARD U. S. DEPT. OF
Winter
12.800c
24,400
OF
(000's omitted)—
PRODUCTION
26.325c
"
12,800
23,900
(000'8
-
(running bales)
PRODUCTION
28.775c
Export refinery
12,100
v
OUTSTANDING—FED¬
AGRICULTURE—1958
28,650c
at——
$54,200
12,100
DEPT.
October
,
BANK
GINNING
Nov.
28.625c
Electrolytic copper-
U.
-
8.
of
Month
RESERVE
-Nov. 20
QUOTATIONS):
—
—
COMMERCIAL
$42.50
refinery
"$49,400
";"
U
CORPORATIONS—U.
8.
omitted)
$41.17
Domestic
$49,200
Sept.
u
.
11,251
$85,000
$40.50
(E. & M. J.
.
I
12,932
'
Production
pig iron
Scrap
METAL PRICES
<
of
CASH DIVIDENDS—PUBLICLY REPORTED BY
ERAL
169
—
SERIES —Month
COM¬
23,700
COTTON
IRON AGE COMPOSITE PRICES;
Finished steel (per lb.)
13,633
OF
DEPT.
—
dollar?.):.
of
"
October
of
INVENTORIES
MERCE
BRADSTREET,
208,913,000
143,394,000
Nov. 22
—
9377567000
192,249.000
(NEW) IN THE
&
169,814,000
RESERVE
—
234,518,000
$378,727,000
Nov. 22
INDUSTRIAL)
(COMMERCIAL AND
FAILURES
215,296000
135,900,000-
1,254,960,000 1,280,925.000 1,224,821,000
BUSINESS INCORPORATIONS
573,999
$273,014,000
—Nov. 22
DEPARTMENT STORE SALES INDEX—FEDERAL
SYSTEM—1 947-49 AVERAGE =*= 100
:
Manufacturing V—
£7
464,590,000
10,559,000
300,343.000
between
Total
619,350
2..
22
shipped
and
countries
BUSINESS
COAL OUTPUT (U. S.
EDISON ELECTRIC INSTITUTE:
Electric output (in 000 kwh.)——
$248,287,000
279,622,000
116,650,000
;
18,981,000
242,354,000
credits
355,094,000-
16,509,000
__
exchange
Based
COMMERCE
BUREAU OF MINES):
Bituminous coal and lignite (tons)
Pennsylvania anthracite (tons)
$236,089,000
$246,187,000
,1
7,107,000
168,350,000
66,619,000
~~S0V' 7?n
Nov.
Nov. -7
—
Ago
BANK
Wholesale
S
municipal—
and
State
2,061,000
169,309,000
32,220,000
32,155,000
162,415,000
y.
construction
construction
Private
Public
26,715,000
2,523,000
ENGINEERING
—
construction
6.
27,546,000
if
169,932,000
ASSOCIATION OF
Revenue
7,753,000
12,798,000
27,861,000
Nov. 21
terminals, in transit, in pipe lines—
Finished and unfinished gasoline (bbls.) at
—Nov. 21
Kerosene <bbls.» at
Nov.,21
Distillate fuel oil (bbls.) at——
—Nov 21
Residual fuel oil (bbls.) at
—
Nov. 21
fuel oil
Residual
7,755,000
28,095,000
2,393,000
J 7,880,000
Nov. 21
(bbls.)—
Distillate fuel oil output
Year
Month
353,638,000
6,832,535
7,699,000
6,974,835
—Nov. 21
Nov. 21
N°v- 21
—Nov. 21
gallons each)
42
Previous
OUT¬
AMERICAN PETROLEUM
Crude
of that date:]
are as
Month
Ago
74.5
either for the
are
Latest
STANDING— FEDERAL
INSTITUTE:
condensate output—daily average (bbls. of
of quotations,
cases
Tear
Ago
•73.7
§74.6
7
month ended
and other figures for the
Dates shown in first column
month available.
Month
Previous
Week
INSTITUTE:
operations (per cent capacity).
AMERICAN IRON AND STEEL
or
or
purchases.
-Nov.
724,030
523,440
671,710
306,560
Average=100—Month of October:
(average monthly), unadjusted
(average daily), unadjusted
Sales (average daily), seasonally adjusted—
Short
sales.
-Nov.
55.300
121,900
43,800
103,800
Sales
143
127
*134
Other
sales
-Nov.
467,500
725,710
691,550
223,190
Sales
135
129
♦127
128
125
119
Total
Other
sales-
-Nov.
transactions Initiated off
847,610
522,800
735,350
326,990
the floor—
Total purchases
Short sales
—Nov.
678,500
1,073,690
905,390
470,810
—Nov.
117,330
154,700
186,090
132,150
Nov.
859,291
956,420
1,141,580
345,180
Nov.
976,621
1,111,120
1,327,670
Nov.
*.437,120
4.895.170
4,119,750
2,151,330
Nov.
654.430
883,120
740,240
612,100
Nov.
5,152,551
4,028,200
3,732.630
1,588.840
5,806,981
4,911,320
4,472,870
2,200,940
Other sales
Total
Total
sales
;
round-lot
Total
transactions
for account of
purchases
Short
,
Other sales
STOCK TRANSACTIONS FOR ODD-LOT ACCOUNT <)F ODD~
LOT DEALERS AND
SPECIALISTS ON N. Y. STOCK
EXCHANGE
—
SECURITIES
Odd-lot
sales by dealers
Number of shares
EXCHANGE
short
Customers'
1,686,273
2,140,798
1.277,297
$76,733,823
$104,351,503
$52,512,111
1,720.369
2,162,292
911,726
12,550
8,473
27,646
—
value
8
1,489,787
dov.
8
8,098
—
sales
Nov.
1,481,689
Nov.
$69,670,667
—
1,707.819
2.153.819
Short
shares—Total
of
sales
sales
$101,053,962
$38,132,123
Nov.
;
562.320
473,060
681.860
182,280
Nov.
473,060
562,320
681,860
182,280
purchases by dealers—
Number
Nov.
TOTAL ROUND-LOT STOCK SALES ON THE N. Y.
433,780
532.170
646.800
589.640
STOCK
EXCHANGE AND ROUND-LOT STOCK TRANSACTIONS
FOR ACCOUNT OF MEMBERS
Total
Short
*
t.
sales
Nov.
808,540
1.150,030
Other sales
Nov!
15,895,300
20.617,120
19,287,560
9.200.470
Nov.
16,703,840
21,767,150
20.190,410
10,180.330
Total
sales
WHOLESALE PRICES. NEW SERIES
LABOR
—
(1947-49
=>
■U.
S. DEPT.
902.850
979,860
Farm
—Nov. 25
products—
Processed
119.1
119.1
118.6
117.8
—Nov. 25
91.7
"91.8
90.9
91.6
Nov. 25
108.6
*108.8
109.6
106.0
Nov. 25
102.2
*102.4
103.8
91.5
—Nov. 25
126.9
1268
foods.
Meats
AH commodities other than farm and foods.
126.1.
125.6
figure,
if Includes
976,000
**
°{A&n' '
Monthly Investment Plan
one-half cent a pound. ■i—
(000's
30
™
barrels
of
foreign
crude
runs.
P Based
on
new
annual
capacity
of
1957 basis of 133.459,150 tons. tNumber of orders not reported since
on delivered basis at centers where
j Prime Western Zinc sold
^
140 742 570 tons
.
introduction of
$31,073,000
£11,143.000
£50,280,000
$67,198,976
$68,460,972
22,635,750
19,698,646
89,834,726
4,848,346
4,850,386
66,667,562
84,984,340
88,159,618
4,403,374
83,756,244
35,056,184
4.142,596
53,190,746
52,783,103
3,764,516
4,163,155
30,913,588
49,426,230
48,619,948
50,295,896
50,259,921
48,898,574
14,708,954
18,779.410
21,423,925
18,045,485
22,416,144
26,301,264
778,976
839,967
542,662
2.11
2.67
2.70
$17,347,000
$10,613,800
$26,571,900
$1,419,000
$1,677,300
1,050.000
1,042,500
INCOME ITEMS OF U. S. CLASS I
Other
income
.
—
deductions from income
Income available for fixed charges
Income
after fixed charges
Miscellaneous
deductions
income
r-
Depreciation (way & structure &
Federal
income
equipment)
taxes
appropriations:
common stock
preferred stock
of income to fixed charges—
Dividend
RECT
OF U.
—
—
TRANSACTIONS IN DI¬
AND
GUARANTEED SECURITIES
S. A.—Month of October:
TREASURY
MARKET
Net
sales
Net
purchases
STATES
—
EXPORTS
BUREAU OF CENSUS
(000's
—
AND IMPORTS
Month of August
omitted):
$1,395,900
freight from East St. Louis exceeds
*
$31,371,000
£24,758,000
$51,638,493
omitted)
IN GREAT BRITAIN
LTD.—Month of Oct
ISSUES
BANK
)Interstate Commerce Commission)—
of July:
UNITED
•Revised
77.1
middle of
railway operating income
Ratio
commodities
64.9
19,877,415
Employment at
Month
On
100;:
Commodity Group—
All
Sept.
SELECTED
On
OF
146
Oct.:
CIRCULATION—TREASURY DEPT.
of
Net
'
142
139
$31,245,000
of
—
COMMERCE COMMISSION—
CAPITAL
Other
(SHARES):
round-lot sales—
137
RESERVE
FEDERAL
100—Month
Total income
shares
of
54.817,533
—
MIDLAND
Net
Nov]
;
55.657.248
71,515.908
=
31
OF GOV¬
(1947-49=100 )—
October
MONEY IN
NEW
47,97W4
$796,383,000
138
at Aug.
adjusted
Railway
of
RYS.
Other sales
Round-lot
SYSTEM—1947-49
884,080
$77,508,344
■
Round-lot sales by dealers—
Number
THE
OF
ERNORS
Seasonally
As
—Nov.
—
other sales
Dollar
1.470.488
$69,346,567
46,645,615
$805,925,000
66.6
ultimate customers
of
INDUSTRIAL PRODUCTION—BOARD
Index
48,919,378
55,830,000
(000's omitted)
customers—month of
July
INTERSTATE
COMMISSION:
Nov.
Customers'
customers—
143
of
from ultimate
Unadjusted
(customers' purchases)—t
Odd-lot purchases by dealers (customers' sales)—
Number of orders^—Customers' total sales
ultimate
$836,479,000
Month
Revenue
Number
,
sales to
Kilowatt-hour
477,330
members—
;.
.
sales
INSTITUTE—
EDISON ELECTRIC
Imports
——
952,500
;
yolume 188
Number 5800
....
The Commercial and Financial
Chronicle
.
2341)
'
\
in
Advanced Research
Associates, Inc.
Dec. 1 filed 400,000 shares of
share.
per
Proceeds
For
—
•
American
stock.
common
research
Price—$6
-
Nov.
development
program; and for equipment and
working capital. Office
—4130 Howard Ave.,
Kensington, Md. Underwriters—
Wesley Zaugg & Co., Kensington, Md., and
Williams,
Widmayer Inc., Washington, D. C.
10
;u.
.fjjL
I'"." v./
ITEMS" REVISED
'
Bowling; Equipment Corp.
market.
(letter of notification)
50,000 shares of noncumulative convertible preferred stock
(par $3) and
5,000 shares of common stock (par one cent) to be
offered in units of 10 shares of
preferred: stock and one
share of common stock.
Price—$31 per unit Proceeds
—For purchase of
bowling equipment and working cap¬
ital.
Office—135 Front St., New
York, N. Y. Under¬
and
w
At INDICATES-ADDITIONS ! 4/
SINCE PREVIOUS ISSUE :
;
Proceeds—For
investment.
Distributor—Ed-
ward A. Viner & Co., Inc., New York.
^
.
American Growth
Fund, Inc., Denver, Colo.
Nov. 17 filed. LOGO,000 shares of capital stock (par.
Price—At
cent).
Office—800
.
market.
Security
Proceeds—For
Building,
Colo.
Denver,
curity Bldg., Denver 2, Colo.
>
,
Under-;*
writer—American Growth Fund Sponsors, Inc., 800
Ambassador Oil Corp., Fort
Worth, Tex.
Nov. 12 filed 705,000. shares of common
stock (par $1),
writer
York
Securities, Inc., 80 Wall St., New York,
of which 5,000 shares are to be
offered for sale to com- ~ N.
Y...
pany employees. Price—To be
supplied by amendment.
American Buyers Credit Co.
Proceeds—For general corporate
purposes.
Underwriter
—Dempsey-Tegeler & Co., St. Louis, Mo. Offering— ; Nov. 13 filed 5,000))00 shares of common
stock, of which
Expected today (Dec. 4).
'
v
;
;
4t,545,455 shares of this stock are to be offered for public
sale at $1.75 per share. [Shares have been issued or are
American Art Metals Co.
one
investment.
Se-
(
—
(12/9)
Nov.
due
10. tiled
1968.
.
American Mutual Investment Co., Iiic.
3ec. 17 filed 490,000 shares of capital stock. Price—£10,20
,
,..
supplied by amendment.
ievelop shopping centers and build or purchase office
buildings. Office — 900 Woodward Bldg., Washington^
D. C.
Underwriter— None.
Sheldon Magazine, 1201
Highland Drive, Silver Spring, Md., is President,
t *
issuable under agreements with various
policy holders
in American Buyers Life Insurance Co. and American
Life Assurance Co. (both of
Phoenix) permitting them
Pro-
,
ceeds—$156,500 to retire outstanding notes; $145,500 to retire the
to purchase stock at $1.25 per share.
presently outstanding 6% cumulative pre¬
Sales personnel
stock;? for construction of plant, and acquisi- ' have, been given the right to purchase stock at $1.25
tion of
per share up to the amount of commission they receive
equipment and relocation of facilities; and for
working capital. Business—A manufacturer of alum- •; on stock sales made by them.] Proceeds—For the opera¬
trusions.
and
store
fronts
from
aluminum
Office—433
:
Highland Ave., N. E., Atlanta, Ga.
Underwriters—The Johnson, Lane, Space
Corp., Atlanta
and Savannah,
Ga.; W. E. Hutton & Co., New .York; and
J. H., Hilsman &
Co., Inc., Atlanta, Ga. 'V "
:
Gaberman
;•—
American
&
Hagedorn, Inc., Manila, Republic of Philippines.
•
Enterprise Fund, Inc., New York
Oct. 30 filed 487,897 shares of
common
■
NEW ISSUE;
llAK
■
V-'-
December 5
(Offering
;
isfcofckhoWers—not
onQerwritten), $7,346^25
.
.(Milton D. Blauuer. & Co.,. Iniv -aifcl Hallowell
\j
-
'Jenks,
; Miles
•i
-!
'
Kirkland
&
Co.)
V:
"
Corp.)
'
.rw
December 8
December 17
'United
States'Freight Co
(Monday)
&
Manufacturing Corp,....
(Johnson,
Lane,
Space
Northwest Airlines, Inc.
„.
-(Milton D.
.Bonds
'
120,000
■
>
t.
••
,
"
(S.
American Art Metals Co.
J.
H.-Hilsman
&
E. Hutton
Co., -Inc.)
__
Common
Acceptance Corp
(Paine, Webber, Jackson
Union
&
Curtis
Co.)
and
Eastman
300,000
r
San
Southern Bell Telephone &
Telegraph Co
(Bids
11
EST)
a.m.
Oecember 10
&
r
Co.,
Inc.;
and
Gardner;
(Bids
,
11
a.m.
EST)
65,952
.Common
&, Co.)
(Berry
Securities
515,021
(Smith,
shares
•
&
Co.)
126,780
shares
Abacus
Philadelphia Electric Co
.
r.
*
(C.
H.
December
Upjohn Co.
♦
r
i
-
&
Co.:,Inc.)
11
'
-
M.
Rhoades
Fenner
,
Co.
&;
&
Cuneo Press, Inc.
Michigan
Two
(Hemphill,
Smith)
$1,000,000
,
Common
Merrill
800,000
Lynch,
Pierce,
shares
:
Noyes
Co.)
$5,000,000
Guys From Harrison, Inc
C
(Bache & Co.)
Telephone
$2,500,000
Price—
and for general administration expenses.
Office—Mont¬
Modinos & Co.
(Washington, D. C.) in the United States and by Forget
& Forget in Canada.
real,
Canada.
Underwriters—Nicholas
Debentures
$40,000,000
.
.
$8,000,000
Debenture*
XBIds to be invited) 0110,000,000
to
be Invited)
For
r
new
•
Biddeford A
Saco Water Co.
stock
(letter of notification) 1,000 shares: of common
being offered for subscription by stockholders of
record
Nov. 26
on
the basis
of
one
new
share for each
t
:
-.
IP shares held; rights to expire on Dec. 15. Price—At
par ($100 per share). Proceeds—For improvements
and;
additions to property.
Office—181. Elm Street, ..Bidde¬
ford, Me. Underwriter—None.
.
Utah Power & Light Co.
(Bids
1973.
Nov. 10
Bonds
Southwestern Bell Telephone Co
-
-
Bond*
(Kuhn, Loeb & Co. end Lehman Brothers) $24,000,000
Pennsylvania Power Co
.
„
.....Bonds
Moore-McCormack Lines, Inc
(12/15-18)
Price—To be supplied by amendment.
inventory and operating equipment for
products recently developed, and the*
balance for working capital. Underwriter—Carl M.
Loeb,
Rhoades & Co., New York.
due
Proceeds
manufacture of
Debenture*
Co
Co
(Bids to be invited)
-.Debentures
&
Power
(Bids to be Invited) $20,000,000
Debentures
and
stock.
change, at the time the offering is made. Proceeds—To*
be applied Over the balance of 1958 and the next three,
follows: for annual assessment work on the com- :
pany's properties (other than mining claims in the Mt.
Wright area in Quebec); for general prospecting costs; '
tures
Preferred
(Bids to be invited)
.
-
Bell
Montana
(Monday)
Columbia Gas System, Inc
(Carl
common
Nov. 12 filed $1,000,000 of convertible subordinate deben¬
(Morgan Stanley & Co.) $15,000,000
Common
—
(Carl M. Loeb, Rhoades & Co.)
-
Consumers Power Co
iMorgan Stanley & Co.) 2,410,000 shares
Belock Instrument Corp
■.>
$7,500,000
Postponed Financing
$300,000
(Thursday)
-December 15
Mining Corp. Ltd.
800,000 shares of
Belock Instrument Corp,
Common
Abraham
filed
.
Woolfoam Corp.
-
Fund)
<
years as
Bonds
(Bids noon EST) .$50,000,000
>
Bonds
$10,000,000
(Offering to stockholders—underwritten by Johnston, Lemon &
Co.; Eastman Dillon, Union Securities & Co. and
l.Common
Barney
(Monday)
invited)
Bellechasse
Oct. 29
Government Employees Variable Annuity
Life Insurance Co
Common
Common
•<
Southern, Inc.
April 14 filed 8,934 shares of common stock. Price—At
par ($100 per share).
Proceeds—For general corporate;
purposes.
Underwriter — Bankers Bond Co., Louis¬
ville, Ky.
;
Related to the market price on the Canadian Stock Ex¬
January 20 (Tuesday)
$300,000
Corp.)
be
filed 400,000 shares
10
York.
Preferred
$10,000,000
Utilities Co.
(Bids to
Common
National Old Line Insurance Co
(Equitable
Gulf States
rights
Nielsen (A. C.) Co
$144,000
Utilities Co
January 19
■
*
Management Corp.
of common stock (par 29 *
cents.) Price—$1 per share.
Proceeds—To reduce out¬
standing indebtedness and for working capital. Office^
Houston, Texas. Underwriter—McDonald, Kaiser & Co.,
Inc.
(formerly McDonald, Holman & Co., Inc.), New
Feb.
Bankers
.Common
Co.)
(Bids to be received)
Nlcolaus
100,000 shares
Scherck, Richter Co.)
Debentures
(Friday)
Stifel,
Carolina Telephone & Telegraph Co
,
Gulf States
Common
&,
Securities
Underwriter—None.
$15,000,000
January 13 (Tuesday)
(Wednesday)
Reinholdt
(Thursday)
January 9
(Albion
Marcus Transformer Co., Inc.__
.
$247,500
Heliogen Products, Inc.__
Debens.
$70,000,000
Anheuser-Busch, Inc.
(Newhard, Cook & Co.;
:
$1),
ana'
,
lanta, Ga.
-
Common
Co.)
(Bids to be invited)
;
Bankers
(Friday)
&
;
•
133,740 shares to employees pursuant to stock purchase*
option*. Price—To public, $6 per share. Proceeds—For
expansion and other corporate purposes. Offiee — At¬
.
(Tuesday)
Diego Gas & Electric Co
Inc. and Dominion Securities Corp.)
$28,559,000 "
'
r
"
Plohn
January 8
Dillon,
shares
Metropolitan Toronto (Municipality of)—,-Debens.
(Harriman Ripley & Co.,
'
Preferred
&
Securities
Debens. & Pfd.
Mechmetal-Tronics Inc.
150,000 shares
<Charles
General
-
Bankers Fidelity Life Insurance Co.
Debentures
January 2
:
,
Feb. 28 filed 258,740 shares of common stock (par
of which 125,000 shares are to be offered publicly
$6,000,000
$240,000
will
shares
common
Price—$5 per share. Proceeds—To increase capital and
surplus. Office-*—Atlanta, Ga. Underwriter—None.
*,.
,
shares
(City of)
Common
(Myron A. Lomasney & Co.)
(Blyth & Co., Inc.)
Edmonton
the
Oct. 16 filed 250,000 shares of common stock (par $2.50).
Portfolios, Inc.) $500,000
23
be offered fbr public sale for the
Atttosursnce Co. of America
(The First Boston Corp. and Dominion Securities Corp.)
Cardinal Instrumentation Corp
-
and
$1,250,000
Cutter Laboratories
■,
Co.
&
Plan
December
Debentures
(The Johnson, Lane, Space Corp., W.
154,000
are to
the
amendment.
..Common
Elmsford, Inc
(Sire
(Tuesday)
Co.)
.
selling stockholder. Price
supplied by amendment. Proceeds—To acquire
bowling centers and increase working capital (part
to be used in defraying cost of acquisition of stock o£
owner of a Brooklyn
(N. Y.) bowling center.
Office—
135 Front St., N. Y.
Underwriter — To be named by
Common
Fuller &
D.
-
new
$5,650,000
(Glore, Forgan & Co.) 63,467 shares
Sire Plan of
'
*
.
Equip. Trust Ctfs.
...
invited)
Filmways, Inc.
Common
Decembers
to be
Co., Inc. and Michael
60,000 shares
Colonial Sand & Stone Co., Inc._
$564,225
underwritten)
Common
&
4
—To be
4
December 22' (Monday)
-
..Preferred
stockholders—not
to
(Bids
<
;
shares
_
West Ohio Gas Co.
(Offering
Merrill
Co.)
Norfolk & Western Ry
.Common
stockholders—underwritten by The
First Boston Corp.) $11,226,000"
f
Blauner
Kletz Ss
G.
of
company and
be offered for the account of a
(Thursday)
Narda Ultrasonics Corp
•
$5,000,000
^
Corp.:)
•
1
.(Offering,to
-
v
account
Common
December 18
(Allen &Oo. and W; C. Pitfleld & Co., Ltd.)
Morton
.
'
Ptedpath) $600,000
v
-Associated Bowling Centers; Inc.
;
Nov. 24 filed 300,000 shares of 20-cent cumulative con¬
vertible preferred stock (par one cent) and 50,000 out- standing shares of common stock (par one cent). Thw
preferred shares
to stockholders—to be underwritten by
Lynch, Pierce, Fenner & Smith) $210,000
Campbell ChibOUgaman Mines; Ltdw^•>
i'
(Wednesday)
(Offering
Common
(Auchincloss,,Parker
.
;
.Bonds
■
$6,035,400
Bowl America Corp.^._—
;
-
:
Light Co.
(Bids to be invited) $12,500,000
..
v
■
"
(Bids to be received) $4,920,000
.
Power &
future.
,
_
The First Boston
.
1
.Debentures
stockholders—underwritten by
'
-'
"(Offering to
r
Sulzberger,
$300,000
Laboratories,, Inc
Texas
-iJ
(par $1). Price-r-To be supplied by amendment (expected
to be approximately $11 per share). Proceeds—Together
with other funds, will be used for development of the*
company's properties and for working capital. Underwriters—Carl M. Loeb, Rhoades & Co. and Dominick At
Dominkk, both of New York. Offering—Expected in
near
(Tuesday)
York, Chieago & St. Louis RR.__EqUip. Tr. Ctfs
t
-
Ferro Dynamics Corp.________„_„_.__C©mmon
.
-
December 16
..
New
-
.Common
.
r'c*?;
'•/ HP*
•4y;
.
(Friday)
Carolina Telephone & Telegraph Co.~
l
"j
Arvida Corp., Miami, Fla.
28 filed 2,500,000 shares of class A common stock
Oct.
Price—At
stock.
14 filed
Estate of Alice Busch.
Underwriters—Newhard, Cook &
Co.; Reinholdt & Gardner; Stifel, Nicolaus & Co., Inc.;
and Scherck, Richter Co.; all of St.
Louis, Mo.
/
Office—Magsaysay Bu,ilding, San Luis, Ermita, Manila,
Underwriter
•
500,000 shares of common stock (par 200).
Price—To be supplied by amendment. Proceeds — To
discharge current liabilities and to drill ten wells. Un¬
derwriters—To be named by amendment.
...
Republic of Philippines.
>
>
Price—
,
(12/10) :'
100,000 shares of common stock (par $4).
Price—To be supplied by amendment. Proceeds—To the
Nov.
(N. Y.)
Feb. 28 filed
u-\.y
capital stock.
A...
—Formerly United States Telemail Service,; Inc.
Anheuser-Busch, Inc.
American-Caribbean Oil Co.
Proceeds—To selling stockholders.
Two cents per share.
purposes. Office—Salt Lake City, Utah
Underwriter
Amos Treat & Co., Inc., of New York. Change in Name
derwriter—None.
.
American Asiatic Oil Corp.
Nov. 24 filed 100,000,000 shares of
,
.
>
(par $1).
Price—$4 per share. Proceeds—To purchase equipment
ind supplies and for working capital and other corporate
tion of other branch offices, both in Arizona and in other
states. Office—2001 East
Roosevelt, Phoenix, Ariz. Un¬
ex¬
•
American Telemail Service, Inc.
17 filed 375,000 shares of common stock
,,
entrances
.
Feb.
•
ferred
inum
'
share. Proceeds—For investment in first trust note%
lecond trust notes and construction loans. Company may
per
'
$1,250,000 of 6% convertible debentures
Price—To be
.
,
.
..Band*
$20,000,000
Continued
on
page
42±
.
42
The Commercial and Financial Chronicle
(2342)
Continued, jrom page
+ Boston Fishing;
,
.
Santa
Boat Co.
Aug. 21 (letter of notification) 300,000 shares of
construction, purchase, leasing and operation of
waterways. Office — 220
Boston, Mass. Underwriter—None.
• Bowl America Corp., Arlington, Va.
(12/8)
Nov. 10 filed 300,000 shares of common stock (par 10
cents). Price—$2 per share. Proceeds—For acquisition
of land, building improvements and working capital. Underwriter—Auchincloss, Parker & Redpath, Washington,
gage in
filing vessels in all proper
Colonial Aircraft Corp., Sanford, Me.
-
d.c.
Bridgehampton Road Races Corp.
Oct. 23 (letter of notification) 15,000 shares of common
stock (par $1) to be offered for subscription by stock¬
holders of record Nov. 1, 1958 on the basis of one new *
share for each four shares held; unsubscribed shares <
will be offered to current creditors in payment of all
#
Columbia Gas System,
16,1957 filed $25,000,000 of first mortgage bonds due
Sept. 1, 1968, $20,000,00 of subordinated debentures due
Oct. 1, 1968 and 3,000,000 shares <d common stock to be
offered in units as follows: $l,00o of bonds and 48 shares
of stock and $100 of debentures
nine shares of stock
Price—To be supplied by amendment;
Proceeds — To
construct refinery, Underwriter—Lehman Brothers, New
York. Offering—Indefinite.
Under-
Consumers Cooperative
Kansas City, Mo.
•
Oct.
Nov. 12 filed $5,000,000 of 6%
•
Consumers
held; rights to expire on Dec. 29.
Price-~$125 per share. Proceeds—To reduce short-term
bank loans. Underwriter—None.
Research Fund, Inc., St. Louis, Mo.
100,000 shares of capital stock, (par one
Priee—At market.
Proceeds—For investment
filed
cent).
Carolina Telephone & Telegraph Co. (12/10)
Nov. 17 filed 65,952 rights to subscribe for common stock
(par $100) on a one-for-five basis at $125 per share to
b$ issued to Southern Bell Telephone & Telegraph Co.,
owner of 22.6% of the outstanding Carolina stock. Un¬
derwriter—Tq be determined by competitive bidding.
Probable bidders: R. S. Dickson & Co., Kidder, Peabody
Underwriter
Louis.
—
Counselors
Research
Sales
Robert H. Green is President.
Corp.,
St
'
t
a.m.
Proceeds—$1,176,000 to be used to pur¬
12,000 outstanding 3 V2 % cumulative preferred
shares ($100 par) at a priee of $98 per share,-pursuant
to agreements entered into with the holders- of such
shares; the balance to be used to,augment the com¬
pany's working capital.
Office-r-2242 Grove St^ Chi¬
Association, Inc.
cago, 111.
York.
Underwriter—Hemphill,
&
Laboratories, Berkeley, Calif.
filed
17
Noyes
Co.,
';r>
r
Cutter
Nov.
150,000
shares
of class A'
New.
'
(12/9)
common,
•
-
r
^
*
'
CNwjwl Fire 4 Casualty Insurance
of shares of class
B
chasers of the class
non-voting
common
Dutch West India Co., Ltd.
Nov> 3 (letter of notification) 222,220 shares of
Co.
stock.
Pur-
PO*to6 of *8 months after the company receives permisPrice—$10 per share.
Proceeds
"r- *
X Clnomark II Production*, Inc.
June 30 (letter Of notification) 300,000 shares of common
gleek (par 10
eents). Price—$l/per share. Proceeds—
Proceeds—For expansion
amendment.
Office
Underwriter—S. !
program.
Street, New York, N. Y.
Fuller & Co., New York.
.
D.
Fleetwood
,
"
Motel -Corp.
24 (letter of notification) $294,000 of 10-year 6% r
convertible debentures due 1968.,Price—At par (in de-/
nominations of $400; $500 and $1,000. Proceeds — For <
construction of a five-story motor hotel. Office—1400
Philadelphia National Bank Bl^g., Philadelphia, Pa.
Underwriterr—R. P.^n'd R. A. Miller & Co., Inc., Phila¬
delphia/^Pa. /Qffeiliig—Expbcted this week."
ipc.
'■ /n*
$4,OQO,000. of 6% 15-year sinking fund sjab-
if Florida. Builders,
Dec.
filed
l
ordinated debentures and 40,000 shares of common stock,
offer^ jn umts.of $100 priheipal
to be
tures and one sbare 'o'f cOmmqn
Stock.
r
^
>
amount .of deben¬
Price
$110 per
.
arid-project site facilities; for financing ex-1
pansjon prpgram; rand "for liquidation of barik loans arid
corporatfe purposes/' Office—700 43rd St., South,;
ment
other
St.
Petersburg;
FJ^//;Lnderwriter—None/'
'
Fluorspar Corp.' of America
Oct. 14 (letter"of notification) 133,333 shares of common
stock (par 25 cents)." Price—$2,25 per share. Proceeds^For mining expenses. Office—4334 S. E. 74th Ave., Port¬
land 6,
York,
Orb.' Underwriter
—
;
Ross Securities Inc., New
N.^/7 /;
Pifrc, Port & Terminal Co.
2,138,500 shares of commoh stock (par $1).
Price—$1.25 per", sfyare. / Proceeds—To pay short-term loans a:nd,for^ completing company's Port Development >
.
Nov. 25 filed
Plan
and rest
Office
added to 'general funds.
—
Fori
Pierce, Fla. Upjlerwriter—Frank B. Bateman, Ltd., Palm
Beach, Fla./; ^£: v
.
•. j
.
•
Gener^
.,
O^iw-ai4<>ro & Electronics Corp.
Sept. 29 filed^^,500,000 shares Of common
cente)r^wiJicli;JOO,POO riiares
common
materials, containers, etc.,<and leasehold improvements.
Office t 129 S. State St., Dover,,Deb Underwriters-Ross
Securities, Inc., New York.
*.
if Edmonton
Dec.
3
filed
(City of), Canada
(12/23)
'
$6,000,000 of sinking fund debentures, due
Dec.
15, 1978. Price—To be supplied by. amendment.
Proceeds—To be applied to the extension of electric
light, telephone and sewer service or to the payment
of bank loans incurred for these purposes. Underwriters
—The First Boston Corp- and Dominion Securities Corp.,
both of New York.
are to
stock (par 10'
be j»oW tor foe
account of seRin»,|fockholders,. Priee—*$2,25 per share.
Proceeds—For acquisition of stock of; National Missile &
Electronics
Corp., additional working capital and other,
E.:Burnside\&
' •
corporate purposes, Under writer^ Willis
Co., Jnc« New -.York- "'7t''
General Alloys Co.
Nov; 17
to
(letter of notification) 45,250 shares af common
$10vof/whteh 16/000 shares are to be
employees, aqd the remainder to the publie. employees/$1.1805
per
share.
offered
PriceProceeds—To purchase
install machinery and equipment.
St., Boston, Mass.
PreScott- & Co;, Boston^ Mass.-
per
capital.
"A"
ston to write insurance.
(par' 25' '
stock
common
—18 East 50th
Office—367-405
Underwriter—William
West First
June 5 filed 350,000 shares of common stock,
shares will receive with each
share purchased a warrant
granting the right to purchase
fihare bae shares of
class "B" stock for a'
/•
•
cents), of which 14,000 shares will be sold for the ac-^
count of a selling stockholder. Price—To be supplied by
and
Person Mines Ltd.
stock (par 10 cents). Price—$1.35 per share. Proceeds—
For retirement of notes, purchase of equipment, raw
_
if Filmways, Inc; (12/22-26)
Nov. 28 filed 154,000 shares of
,
.
,
cisco and New York.
Nov. 24 filed 210,000 shares of class "A"
voting common
stock and
$10^00 warrants to subscribe to a like number
working
Checker
;
To
taxicabs.
for
sells
;
stock (par
Price—$1
share. Proceeds—For new equipment, repayment oi
loan, acquisition of properties under option, and other
corporate purposes. Office—Toronto, Canada, and Em¬
porium, Pa. Underwriter—None.
and
;
/
common
Price—To be supplied by amendment.- Pro¬
ceeds—To repay bank loans, and for Other corporate
purposes.
Underwriter—Blyth & Co., Inc., San Fran¬
Nqv. 7 filed 133,112 shares of common stock (par
$1.25)
to be offered for subscription by holders of
outstanding
common stock of record Dec. 4, 1958 at the rate of one
new share for each seven shares then held
(with an
oversubscription privilege), Price—To be supplied by
amendment- Proceeds—For exercise by company of its
option to purchase 19 presses and accessories leased
and
(12/5)
(par .25 cents). " Price—$3 per share. Proceeds^For acquisition "or lease of machinery and working capital. -Office—TLodi, N. J.; Underwriters—Milton D. Blauner & Co., Inc., Nbw York, N. Y., and Hallowell Sulzberger, Jenks, Kirkland & Co., Philadelphia, Pa.
stock
(par $1).
Corp., Kalamazoo, Mich,
Inc.
Dynamics Corp.
(letter- of.notification) 100,000 shares of
stock
chase
plant and acquisition of equipment. Office—Charlestown, W, Va. Underwriter—None. Statement effective
Oct. 23,
Co.
Ferro
amendment.
Underwriter—L. A. Huey Co.,
sons, who may sell such shares at the market. Price—60
cents per share. Proceeds —* For
construction of racing
Taxi
•
Nov. 12
ProoeriM-r-Fof expansion and working capital. Underwriter&nr-Paine, Webber, Jackson & Curtis and Eastman
Dillon, Union Securities & Co., both of New York.
.
Sept. 9 filed 4,000,000 shares of common stock (par 10
cents), represented by voting trust certificates, of which
3^530,000 shares are to be offered to the public and the
remaining 470,600 shares have been issued to nine per¬
Checker
capital, tp make loans, etc. .Office—2104 ,/kO" St., Lin-T'
coin, Neb. Underwriters 1:1 J.. Cliff Rahel & Co. and >
Eugene C. Dinsmore, Omaha, Neb.V*
'-r*
Acce|»tance Corp. -(-12/9
Nov; 10, filed .300,000 shares, of voting preferred stock,
convertible aeries. Priee--To, be supplied by amendment.
Press, Inc. (12/15)
Nov. 20 filed $5,000,000
of convertible subordinated
debentures due Dec. 1,1978/ Price—To be supplied by
Denver, Colo.
from
..y*
-
Cuneo
Address—P. O. Box 1849, 3720 E.
Bnriness — Manufactures
Underwriter—None.
'
(letter of notification.) $300,000 of 10-year 6% 7
senior subordinated debentures.»Price—At par (in de- nominations of $1,000 each); Proceeds
For working
Fort
Cryogenic Engineering Co.
Sept. 22 (letter of notification) 150,000 shares of class A
common stock (par 10 cents);
Price—$2 per share. Pro¬
ceeds — For repayment of loan; purchase of plant and
office equipment; raw materials and supplies; and for
working capital, etc. Office—U. W. National Bank Bldg.,
1740 Broadway, Denver, Colo. Underwriter—L. A.
Huey,
Denver, Cojo.
V
Cemex pf Arizona, Inc.
Nov. 17 (letter pf notification) 300,000 shares of common
stock (par 25 cents). Price—$1 per share. Proceeds—
9 Checker Motors
Co.
Counselors
5
if Federated "Finance .Co.
Novt 17
Proceeds^For purphase and development of sub-j/
division Jand^^i^lu<|ing; shopping site; for new equip¬
.
Feb.
tion.
unit.
Aug. 29 filed 150,000 shares of preferred stock f(no par) "
supplied by amendmentProceeds—To re¬
pay short-term bank loans and for expansion and im¬
provement of service facilities. Underwriter — Morgan
Stanley & Co., New York. Offering—Postponed indef¬
initely.
■
'
.■ ;.y ■
each five shares then
Charles Town Racing
25-year subordinated
Price—To be
Carolina Telephone & Telegraph Co. (12/5)
Nov. 17 filed 58,773 shares of common capital stock (par
$100) to be offered for subscription to stockholders of
record Dec. 4, 1958, in the ratio of one new share for
Street, Yuma, Ariz.
Power
par
Oct.
$6,000,000 of 5V2V0
of indebtedness, and
Underwriter—None.
arise.
filed $00,000 shares of common stock. Price**($5 per share). Preeeeds—To cover operating '
during the development period of the corpora- 0.
Underwriter—None, 7'//y;—
*"
Feb. 20
At
•
unit; and the preferred stock at $25 per share. Proceeds
—For retirement of maturing certificates of indebted- '
ness, redemptions on request of certificates of indebted¬
ness prior to maturity and of 5Vz% preferred
stock; the
possible improvement and expansion of present facili¬
ties; and the acquisition of manufacturings plants and
crude oil properties if favorable opportunities therefore
.
32nd
filed
Association,
60,000 shares of 5%%
preferred stock (cumulative to extent earned before
patronage refunds). Price—For certificates at $100 per
Cardinal Instrumentation Corp. (12/9)
Nov, 4 letter of notification) 240,000 shares of common
6tock. Friee—At par ($1 per share). Proceeds—For pay¬
ment of notes, capital additions and inventory. Office—
4201' Redwood Ave., Los Angeles 66, Calif. Underwriter
—Myron A. Lomasney & Co., New York.
working capital.
29
certificates
Co., Ltd,* Montreal, Quebec, Canada.
For
(12/15-24)
Commerce Oil Refining Corp.
writer—Kidder, Peabody & Co., New York.
11
Inc.
be
Dec.
Price—To be supplied by amend¬
—
Expected to be received up to
Dec. 10.
(12/22)
stock to be issued
Laboratories, Berkeley, Calif.
expense
.,
common
(par $10).
supplied by amendment. Proceeds —To
selling stockholders.
Underwriters — Carl • M. Loeb,
Rhoades & Co., Merrill Lynch, Pierce, Fenner & Smith
and seven other firms, all of New York.
pec. 2 filed $7,051,675 of outstanding 5.4% subordinated
Bids
shares of
Nov. 21 filed 800,000 shares of common stock
if Burlington Industries, Inc., Greensboro, N. Car.
on
,
exercise of warrants at an adjusted price of $6,912 '
Price—To public, to be supplied by amend¬
Price—To
porate purposes. Business—Rolling and fabrication of
magnesium and magnesium alloys, etc. Underwriter—
Witling, Lerchen & Co., Detroit, Mich.
(EST)
/
Proceeds—From warrants, to be added to the
general funds of the company.
Underwriter — Glore, :
Forgan & Co., New York/
.VrjT'y
if Brooks & Perkins, Inc., Detroit, Mich.
Nov. 28 filed 100,000 shares of common stock (par $1).
Price—To be supplied by amendment.
Proceeds—To
complete the company's commitment to purchase at par
5,000 shares of the $100 par common stock of Alabama
Metallurgical Corp.; and the balance for general cor¬
& Co.
,
ment.
part of claims, at the rate of one share for each $4
rights to expire about two weeks,
after mailing of offer. Price—$4 per share. Proceeds—
To pay current creditors.
Address — P. O. Box-506,,
Bridgehampton, L. I., N. Y. Underwriter—None.
Campbell Chlbougatnau Mines, Ltd. (12/8-12)
first mortgage convertible
sinking fund bonds due 1968. Price—To be supplied by
amendment.
Proceeds—To repay bank loans, and the
remainder will be used for corporate purposes, including
commencement of development of Henderson ore body.
Office—55 Yonge St., Toronto, Ontario, Canada. Underwriters—Allen & Co., New York, and W. C. Pitfield &
Epsco,' Inc.;/
;
5 (letter "Of
notification) 2,200 shares of common stock (no
par). ;* Priee-—At the market." Proceed—To a \
selling stockholder./ Office — 588 Commonwealth Ave., I
Boston, Mass./Underwriter—Hayden, Stone & Co., Bos- ton, Mass. - No public offer planned.. * '
; * I *T
r
Ethodont
share.
per
of claims discharged;
Proceeds —To selling debentureholders.
Colonial Sand & Stone Co., Inc.
upon
or
ment.
~
-
■
Nov. 26 filed 63,467
,
•
cents).
(
share. Proceeds—To sell-/
Nov.
.
filed
8
per
,
346,492 shares of common stock (par 10
Price—75 cents per share. Proceeds—To reduce
loans, make certain capital improvements and for working capital. Underwriter—Mallory Securities, Inc., N6w
York.
.';'V VV
7'
"
1
Oct.
4^)//Price—$24
7,500 shares of common/
ing stockholders: OffidC^588 Commonwealth Ave., Boston, Mass.' Underwriter—"W. G: Xangley & Co;, Boston,
Mass. No public^offbr planned.1
^
.*
stock (par one
Northern Ave.,
■'
.
common
cent). Price—$1 per share. Proceeds—To
pay additional costs of construction; and for retirement
of obligations and working capital.
Office — c/o John
Harlatn Lowell, 2200 Kenton, Aurora, Goto Underwriter
—Lowell. Murphy & Co., Inc., Denver, Colo. ;
Thursday, December 4, 1958
Epsco, Inc. : - 7.
(letter of notification)
stock (no
Clute Corp.
(letter of notification) 2,000 shares of common
stock. Price—At par ($100 per share). Proceeds—To en¬
.
Nov. 5
N. M,
Nov. 18
debentures due 1974.
capital. Office — 937 Acequia M&dre Rd.,
Fe, N. M. Underwriter—Watson & Co., Santa Fe,
For working
41
..
-
General Aniline & Film Corp., New
York
14, 1957 filed 426,088 share* of common A
Jan.
stock fne
par) and 1.537.500 shares of common B stock (par $1).
Proceeds—To the Attorney General of the United States.
Underwriter—To be determined by competitive bidding-
and The First Bos¬
Loeb & Ce.i Lehman
Brothers, and Glore, Forgan & Cou (jointly)^ Bids—Had
been scheduled to be received up to 3:45 pan. (EDT) on
May 13 at Room 654, 101 Indiana Ave., N. W., Washing¬
ton^, D. Cm but bidding hjui been postponed ;
Probable bidders: Blyth & Co., Inc.,
ton
.Corp.-(jointly);
Xuhn,
.
.
•
Employees Variable Annuity. Life
Insurance Co.- (1/20)
«'
Government
1
Nov. 13 filed
2,500,QOQ shares of common Stock* (par $1)
about Jan. 29,-1959 viz:
to be offered by company on or
(1) to holders of common stock (par $4) of Government
Employees Insurance Co., on. the basis of one warfant per
share Of stock held ori Jan.t6» -1959 (1,334,570 shares are
now outstanding);
(2) to holders of common stock (par
Volume
188
Number 5800
.
.
.
The Commercial and Financial
Chronicle
$1.50) of Government Employees Life Insurance,
Co.,
on ' lated
equipment an£ supplies. Proceeds -4 For working
^ shpre of ,st'6cfc:he%on ^an.
^pital and general rcor^erato purposes, including the fi¬
ahares 'are now.joutstnnding.); -and (3) to,
nancing of increased inventory and receivables. Under?
(Par--$5) pf <^VeEnment Emwrttcrs^Tabor. &- Co:, Decatur, 111., Fusz-Schmelzle &
Corp., dn the basis of
warrantfpri; sfcare of ; Co^ Inc.. St. Louisa Mo;$;and«.
stock held
Ellis, Holydke & Co., LinohJah?6,1959 (as of Sept 30, 19&8lhere were
c'olii, Neb. ;
?'-'
'
W>127 jhafes of ^tacfe outstanding and
$614,360" of 5%
/
Indiana A Michigan Electric Co.
convertible capital debentures due 1967: convertible into
jSept. 26.
shares of common at $28,0374;
iged $20,000,000 pf first mortgage bonds due ;
per' share? Jt jdl these
Nov. ,1,-1988. Proceeds—To
debentures were converted tiftd fcoittmdh stock
retire bank loans used foi
prior to
construction program.
tlte record datetra
..Underwriter—To be determined
totaj 6f 164;724 -dmrhoii- sh^ferwould
by competitive bidding. Probkble
bidders: Halsey, Stuart
^ outstanding. Wan-ants syiTI; expire on Feb. 10, 1959.? : & ,Co.
Inc.; Eastinan Dillnn, Union Securities &
^Ftief^$3 3rfcr share: Pteceeds-—For capital and,
Co.; The
surijius^; First Boston
Coip j IIarrimari Ripley & Co. Inc. OfferOfficeGovertinwnt Employees Insurance
Buildingj
ufig—Date' indefinite,
Washington, D. C. ; Under\vrrters
Johnstoil, Lemon &
Co., Washington;' »■„]<:%?E&fJn&n
^
1
Diheih Dmonr5e^urities •Washington, D. C.
?
: iulys 24; tiled
&?CC., New Yoi"k> and AbaeuS'^FUnd,
600,000 shares ..of common stock
Boston, Mass. '
'
the basis of
1959 (216.429
.
.
.
.
v
an exchange basis to holders of
outstanding 5% sinking
fund debentures. Price—$10.50 per share to
stockholders;
$11*50 to public. Proceeds—$328,300 to reddem outstand¬
ing 5 % sinking fund debentures and $189,200 to tedU6C
short term, bank loans. Office—Los
Angeles, Calif*
v
;
derwriter—Quincy Cass Associates, Los Angeles, Calif. J1
Lowenstein (M.) A Sons, Inc.
Nov.
7
(letter of notification) 3,225 shares of common
(par $1) to oe offered on a basis of 1^4 shares In
exchange for one share of capital stock of WamsuHa ?
Mills. Office—1430 Broadway, New
York, N: Y. U*#fefT;/«
stock
writer—None.
.
.
LuHoc
Mining Corp.
■
—
(par one
per share. Proceeds—To develop and
; >perate graphite and mica properties in Alabama. Un; len^tert—Dearborn & Co. and
.'ent j.v
Nov. 3 filed 100,000
outstanding Shares of Common stock
(pah 10 cents).- National Alfalfa
Dehydrating & Milling
the 100,000 common
shares, proposes to
offer to its stockholders
preferential warrants to sub¬
scribe te 98/750 shares of-Grain
Elevator* stock- on the
?
both of
Co., holder of
offer
;
reb.
:
Grand Union Co.
Oct. 29 filed 187,534 shares of comrrfon* stock
(par $5)
to be offered in
exchange for outstanding common stock
of Sunrise Supermarkets
Corp. at the rate of one share
pf Grand Union stock tor each 2.409 shares of
Sunrise
The
Oct. 9
(letter of notification) 55,555 shares of common
stock (par two cents). "
Price—$4.50 per share. Proceeds
—For capital account and paid-in
surplus. Office—At¬
lantic Federal
Building, 1750 E. Sunrise
★ Israel Investors Corp.
Dec. 1 filed 46,260 shares of
share.
per
Street, New York, N. Y.
record
Oct.
four
'purposes.
•
r
1958 at the rate of one new share foi
shares held (rights to expire on Dec. 22).
share.
Proceeds—For general corporate
Underwriter—None.
'
14
of America
.
N. W., Washington.
D.
C.
to test
per
of such
Haverhill
Gas
$33
Lake
fbr
offering.]
Co., Haverhill, Mass.
one
share of convertible
preference
10.shares of common, stock
1958.
on
or
Stockholders will have .43; days in,
cise'' -the
rights.
—
To
Laughlin Alloy Steel Co., Inc.
Aug. 28 filed $500,000 of 6% subordinated capable de¬
bentures due June 30, 1968, and 150,000 shares of common
stock (par 10 cents) to be offered in units of
$100 of
repdy :
investments, arid for general pur-:
Address—P. O: Bbx-348,t Albany,. 'N/ -.VCUndcr-
:
^
z\£.
.
Highway Trailer Industries.Jnc.
Nov;
24. filed r 473,060
outstanding gfiares. of common
stock (par 25 cents). Priced—At
prices generally prevailihg on rthe American Stock Exchange.
Proceeds — To
selling stockholders. Office—250 Pali: AvCnue, N. Y.
'Underwrite!*—None. *
V« ■
■'
"'U:'
-/* :
HoariandA Dodga Drilling
-
.
debentures and 30
27^000 shares of capital stock. Price—fit
share. Proceeds—To be used 4b part for the ex¬
ploration of mines and development and operation of
alines and in payment of indebtedness. Office—Tucson
per
'Ariz.
Underwriter—None.
-fe Home-O-Nize Co.
v-i
.
stock; (par $10). Price—$25 per share. .Proceeds
For
construction, .repayment of loans and purchase and % in¬
stallation, of machinery and equipment., Office—701 E.
Third St., Muscatine, la. Underwriter—None.
•
-
Home-Stake Production Co., Tulsa, Okfa.
116,667 shares of common stock (par $5).
Price—$6 per share. Proceeds—For working capital and
general corporate purposes., Office2202 Philtower
Nov. 5 filed
Bldg., Tulsa, Okla.
Underwriter—None.
..
')■
>
"T
'
Honeggtrs' A Co., Int., Fairbury, III,
«
*No\v 7 filed 19,000 shares of common stock (no
par), of
•which 18,000 shares will be sold for
company and 1,000
•shares for a-seUing stockholder. Price—$30.50
per share.
Justness—Manufactures and sells formula feeds for livestock, animal and poultry, farm artim^l shelters and re¬
a
shares.
Price—$100
unit.
$175,000 mortgage loan from
per
the American Brake Shoe
Co., will be used to meet ex¬
acquiring latter company's South San
Francisco foundry and for working capital/Offices—Las
Vegas, Nev.; and South San Francisco, Calif. Underwriter
—Sam Watson Co., Inc., Little Rock,
Ark., on a best
penditures. in
efforts basis.
Life Insurance Securities
Corp.
ilarch 28 Bled 1,000,000 shares of capital stock (par $1).
Price—$5 per share. Proceeds—To acquire stock control
'if "young, aggressive and expanding life and other inmrance
companies and related companies and then to
iperate such companies as subsidiaries." Underwriter—
nrst Maine Corp.. Portland, Me.
Line
Electronics, Inc.
Oct. 28 filed $922,500 of 5%% subordinated convertible
debentures due Dec. 1, 1970, to be offered in exchange
on
the basis of equal principal amounts for the out¬
standing 3% convertible subordinated income notes due
of
the
pany
of common
—
,
,
1967
_
,No\£. 19 (letter of notification) lybOO shares
common
Proceeds—Together with
Co*? Inc.
June 12 filed
;
Ontario
;
of
,
com¬
Canada. Underwriter—.None. The company's two
prin¬
cipal shareholders together with Kidder, Peabody & Co.
and Nesbitt, Thomson &
Company, Limited, have agreed
that they will subscribe for a total of 343,432 units.
each
• Heliogen
Products, Inc. (1/9)
Oct. 22 (letter of notification)
28,800 shares of common
Btock? (par $l);
Price—$5 per* sftare/; Proceeds—For
payment of past due accounts and loajas ; ahd' general
Working capital. Office — 35-10 Astoria. Blvd/,' L; I. C.
3, N. Y. Underwriter—Albtom Becurtties Go.,' Suite 1512,
11 •' Broadway, New Ybrfc
4, N. Y.
Price—
oversubscription privilege); rights to expire on Dec. 12,
1958. Price—$2.25 per unit (payable in either Canadian
U. S. dollars). Proceeds—For construction program
and for corporate purposes.
Office — Picton, Ontario,
writer—None.;:;v: T'T,*
i
Dec. 8.
part of the
or
about;$ov. 1;
which,\d exer¬
Price —At; ■ par.' v Proceeds
debts, acquisition
boses.
held
.stockj for
on
finance
unit (consisting of one common share and one
warrant)
each two shares held as of Nov.
25, 1958 (with an
subscription by, .stockholders, ion the basis
will
notes
Calidyne Co., Inc.,
from
offer
those
notes for cash, at
cipal amount.
Lorillard
(P.)
to
purchase
stockholders
a
subsidiary. The com¬
face value Calidyne
a
at
who
desire
to
sell their
price equal to 100% of their prin¬
„
Co., New York
Nov. 5 filed 364,670 shares of
common
the rate pf one new share for each
eight
Nov. 25; rights to expire On Dec. 9.
short-term bank loans.
Underwriters—Lehman Brothers
Smith, Barney & Co., both of New York.
Los Angeles Drug Co.
Oct. 3 filed
for
50,000 shares of capital stock, to be offered
subscription by holders of outstanding stock, on a
basis. Any shares not so sold will be offered on
pro rata
?;?'/
Underwriter—Plymouth Bond
Corp.; Miami, Fla.
;
& Share
*.
,
Mankato Citizens Totephond Co.
Nov. 19
(letter of notification) 5,454 shares of commbii"
(no par) to be offered for subscription by stock- ;
stock
holders
shares
the basis of
on
one
new
share for each seven ; <
held; unsubscribed shares to employees.
Prices-;;
$55 per share., r Proceeds—^To complete dial "oonverrion ;
program, r Office—315 South Second St.; MankatO, Minnv ;
Underwriter—None.
Marcus Transformer Co., Inc. (12/lO-lS) 1
'■»
(letter of notification) 75,000 shares of common"?
stock (par 10 cents); Price—$4 per share.
Proceeds-¥
For purchase and installation of new
production equip-;*
and working capital. .Office—900 Leesville
.Ave,//
Rahway, N. J. Underwriter—Berry & Co., New York,
N.
Y.
.
.
Marine
.
;
•.
.
i
•
Corp., Milwaukee, Wis.
Nov. 10 filed 501,500 shares of common stock
(pqt $10) /
to be offered in exchange for all the issued and butstanding shares of capital stock of the following banks at the ;
indicated ratios of exchange: (1) two shares for each of £
220,000 outstanding shares of Marine National Ex¬
change Bank of Milwaukee, $20 par; (2) 22 shares tor,
each of the 1,000 outstanding shares of
Cudahy State;
Bank, Cudahy, Wis., $100 par; (3) three shares for bach
of the 7,500 outstanding shares of Holton State
Bank,
Milwaukee, $20 par; and (4) 17 shares for each of the
1,000 outstanding shares of South Milwaukee Bank, 1
South Milwaukee, $100 par. Each of the
exchange proposals is conditioned (among other things). upon exr, /
changes being made wjth the holders of not less than I
80% of the stock of the bank with
proposal.,is. made.
1958.
respect to which the^
The offer will terminate..Dn.
.
if Mechmetal-Tronics Inc. (1/2)
Nov. 24 (letter of notification) 90,000 shares of common
stock (par 20 cents). Price—$2.75 per share. Proceed*—
For payment on contract to purchase
invention; researchand development expenses; and working
capital. Office
—c/o Virgil F. Every, 20 Lexington Avenue, Rochelle
Park, N. J. Underwriter — Charles Plohn & Co., New
York, N. Y.
Merchants Petroleum Co.
Oct. 8
stock
(letter of notification) 159,395 shares of common
(par 25 cents) to be offered for subscription by
stockholders of record Oct.
new
Dec.
one
share
15,
or
for each five
1958.
more
15, 1958
shares
Unsubscribed
on
the basis of one
held; rights to expire
shares may be
offered to
persons selected by the board of directors.
Price—$1.40
to
per share. Proceeds—To reduce bank loan;
working capital and for general corporate
Office—617 W. 7th Street, Los Angeles, Calif.
increase
purposes.
Underwriter—None.
Metropolitan Toronto (Municipality of)
(12/6)
25 filed $5,852,000 of instalment debentures, ma¬
turing from Dec. 15, 1959 through 1977, and $22,707,000
of sinking fund debentures, maturing in
1978, 1983, and
1988.
Price—To be supplied by amendment.
Proceeds
—For various public works projects.
Underwriters—
Harriman Ripley & Co., Inc. and Dominion Securities
Corp., both of New York, and five other firms.
Nov.
Mid-Atlantic
Marina, Inc., Baltimore, M«L
.
Oct 28 (letter of notification) 60,000 shares of 7% pre¬
ferred stock (par $3.30). Price—$5 per share. Proceeds—
For construction of a marina. Office
Room 404, Old
Town Bank
Bldg., Baltimore 2, Md. Underwriter—Mary¬
land Securities Co., Baltimore, Md.
Milos
Laboratories,
Inc.
<12/5)
Nov. 14 filed $6,035,400 of convertible subordinated de¬
bentures due 1978, to be offered for subscription by com¬
mon stockholders of record Dec.
4, 1958 in the ratio of
$100 of debenturse for each 20 common shares held;
rights will expire on Dec. 19,1958. Price—To be supplied
by amendment. Proceeds—For expansion program and
general corporate purposes. Underwriter — The First
Boston Corp., New York.
stock
(par $10),
stockholders at
shares held on
Price—$68 per share.
Proceeds—To be added to genefal funds of the company
and used for corporate
purposes, including reduction of
common
being offered for subscription by
and
'•
M. C. A. Credit Co., Inc., Miami, Fla.
Oct, 6 filed 100,000 shares of common stock,
Price—$5
per share. Proceeds—To reduce current indebtedness to'
Walter E. Heller & Co;'
.
Proceeds—To
for
v
of
stock
19th
Portland Cement Co., Ltd.
Oct. 29 filed 671,376 shares of common stock and war¬
rants for the purchase of an additional
671,376 shares
being offered to common shareholders at the rate of one
(letter
offered
re¬
Underwriters—Blyth & Co., Inc., New York, and J. J. B.
Hilliard & Son, Louisville, Ky.
Heartland
23
interests
pany's construction expenditures, including the payment
of temporary bank loans incurred for that
purpose.
Development Corp.
of notification) 22,820 shares of non¬
votingrep avertible" preference stock (par $12) to be
.
fractional
held; rights to expire
share.
per
Offices—Wilmington, Del., and Emporium, Pa.
poses.
Underwriter—None.»?''
the
12 shares then
share:
Nov. 12'(letter of notification)
-12,285 shares of captftai
stock (par $10) to be offered for
subscription by stock¬
holders of ^record oh Dec. 3, 1958. Price—$20 per share.
Proceeds—To repay bank loans. Underwriter—None.
Oct.
4%
their
Kentucky Utilities Co.
Nov. 3 filed 206,446 shares of common stock
(par $10)
being offered for subscription by common stockholders
of record Nov. 17, 1958, at the rate of one share
for each
Underwriter—None.
Underwriter—None. (The registration includes an ad¬
ditional 588,000 common shares issuable iipon exercist
of 1,176,000
options rights previously offered (Oct. 19,
1957), which rights entitle the original purchase*
thereof to purchase one-half share of stock at 50 cents
per share at the expiration of
13 months after com¬
mencement
for
dividend of Nov. 1, 1958.
Avenue, Portland, Ore. Under¬
Lynch, Pierce, Fenner, &< Smith, New
E.
York, N, Y.
common stock
(par 25
Proceeds—To acquire funds
drill, explore, and develop oil and gas properties*
cents).-Price—$2
the
N.
writer—Merrill
%
Hamilton Oil A Gas Corp.
Oct. 22 filed 1,000,000 shares of
,
cash
5
•
Sept. 29. filed 350,000 shares of common stock. Price—$1
per share. Proceeds — For the acquisition of properties ?
under option and for various geological
expenses, test
drilling, purchase of equipment, and other similar par- ';
ment
<
in
sulting from
Office—411
;
88,740 shares of class A common capital
stock (par. $1.80).
Price—$5.35 per share. Proceeds—To
increase capital and surplus.
Office—815 15th Street,
Price—$100
Office—19 Rector
Underwriter—None.
(letter of notification) 938 shares of common
(par$l). Price—At the market. Proceeds—To pay
stockholders
filed
stock.,
21
stock
per
Guaranty Life Insurance Co.
Nov.
Jantzen, Inc.
Nov. 25,
-
Nov. 6
common
Proceeds—For investment.
Oct. 28 filed 90,218 Shares of
capital stobk (par $5) be¬
ing offered for subscription by common stockholders of
Price—$8
Boulevard, Ft.
Lauderdale, Fla. Underwriter—None.
is
subject to acceptance by at least
80% of the outstanding Sunrise shares
by Dec. 31. •
•
Gray Manufacturing Co., Hartford, Conn.
each
Carr-Rigdom & Co
best efforts basis. State¬
on a
Industro Transistor
Corp. (N. Y.)
28 filed 150,000 shares- of
common stock
(par 10
ents). Price—To be related to the market
price. Pra*
«eds—For working capital and to
enlarge research and
levelopment department. Underwriter — S. D. Fuller A
do., New York. Offering—Bring held in
abeyance,
investment Corp. of Florida
basis
stock.
Washington, D. C.,
ment effective Nov. 18.
of one wafrafit to
purchase onfe-eighth'share of
Grain Elevator stock for each share of
National Alfalfa
common held on Nov.
17, 1958; rights to expire Dec. 31,
Price—$2 per share,/ Preceeds^-To selling stockholder^
Office—927" Market Street,
Wilmington, Del. iUnder-4
T> 'J
writer—None. />■■
-
Pi"ice-r^$l
/
Montana Powor Co.
July 1 filed $20,000,000 of first mortgage bonds due 1988.
Proceeds
Together with other funds, to be used to
repay $15,500,000 in bank loans and to carry onkthb
company's construction program through 1969. Under¬
writer—To be determined by competitive bidding. Prob¬
able bidders: Halsey, Stuart & Co. Inc.; Lehman B1094
Merrill Lynch, Pierce, Fenner & Smith, and Stone A
Webster Securities Corp. (jbtntly); White, Weld 8c Co.;
Eastman Dillon, Union Securities & Co.| Kidder Pea—
Continued
on page
41
44
The Commercial and Financial Chronicle
Continued
from
to defer sale
Life Insurance Co.
Nov. 20 (letter of notification) 300,000 shares of com¬
mon stock (par 30 cents).
Price—$1 per share. Proceeds
—For working capital.
Office—211 No. Marshall Ave.,
Phoenix, Scottsdale, Ariz. Underwriter—None.
ic Oxford
pending improvement in market conditions.
Oct.
price on the New York Stock Exchange. Proceeds—To¬
gether with other funds, to carry on the company's con¬
struction program through
1959.
Manager-Dealers —
Smith, Barney & Co., Kidder, Peabody & Co. and Blyth
basis of
Manufacturing Corp. (12/8-12)
120,000 shares of common stock (par .$1).
be supplied by amendment.
Proceeds — To
selling stockholders. Office—2101 Hudson Street, Lynch¬
burg, Va.
Underwriter—Johnson, Lane, Space Corp.,
Augusta, Ga.
: y. a
filed
4
Packman Plan Fund,
Nov.
filed
10
outstanding shares of class BB
Price—To be supplied by amendment.
selling stockholders. Office—Capital Ave.
and Wood Lane, Little Rock, Ark. Underwriter—Equit¬
able Securities Corp., Nashville, Tenn.
Offering—Ex¬
pected the second or third week of December.
At par
writer—Waldron &
Co., Salomon Bros. & Hutzler and Ladenburg, Thalmann
(jointly); Merrill Lynch, Pierce, Fenner & Smith
and Dean Witter & Co. (jointly).
Bids — Tentatively
had been expected to be received up to 11 a.m. (EDT)
on Aug.
27 but company on Aug. 22 decided to defer
sale pending improvement in market conditions. /.'
& Co.
Blvd., Los Angeles 17, Calif. Under¬
Co., San Francisco 4, Calif.
Nedow Oil Tool Co.
-.Philadelphia Electric Co. (12/10)
Nov, 13 filed $50,000,000 of first and refunding mortgage
bonds due Dec. 1, 1986. Proceeds—To be used to finance
construction program and to repay bank loans. Under¬
writer—To be determined by competitive bidding. Prob¬
Underwriter—T. J. Campbell Investment Co., Inc.,
Houston, Tex.
•
Nielsen
(A. C.)
Co. (12/10)
126,780 shares of common stock (par $1),
64,500 shares are to be sold for the account
Nov. 20 filed
of which
of
the
and
company
Felling stockholders.
ment.
Proceeds
62,280 shares for the account of
Price—To be supplied by amend¬
To
be
for
used
•
Northwest
Nov.
13
Airlines, Inc.
filed
457,873
(12/8)
shares
of
cumulative
preferred
etock, convertible series (par $25) to be offered for sub¬
scription by common stockholders on the basis of one
preferred share for each three
common
shares held
on
Dec. 5; rights to expire on Dec. 22. Price—To be sup¬
plied by amendment. Proceeds
Together with other
funds, to liquidate the borrowing under the present
credit agreement with banks now
amounting to $34,000,©00, and the balance, together with cash generated from
depreciation and retained earnings will be applied to¬
—
ward the
acquisition of the
turboprop and turbojet
aircraft and related spare parts, equipment and
ground
new
facilities, and for other corporate purposes.
—The First Boston
Corp., New York.
Underwriter
Northwest Gas & Oil Exploration Co.
Aug. 22 (letter of notification) 300,000 shares of common
stock (par 10 cents).
Price—$1 per share. Proceeds—
For acquisition of additional gas and oil interests and
corporate
administrative
expenses.
Office—150
New York 33, N. Y. Underwriter
Co., Inc., New York 5, N. Y.
way,
—
Broad¬
Greenfield &
★ Nylonet Corp.
Nov. 24 (letter of
notification) 600,000 shares of
common
Stock (par 10 cents). Price—50 cents
per share. Proceeds
—For working capital. Office—20th
Ave., N. W. 75th St.,
Miami, Fla. Underwriter—Cosby & Co., Clearwater, Fla.
Oak Ridge, Inc.
Sept. 4 (letter of notification) 100,000 shares of common
stock (par $1). Price — $3 per share.
Proceeds
For
working capital. Office—11 Flamingo
Plaza, Hialeah,
Fla.
Underwriter —Henry &
Associates, Inc
li Fla¬
mingo Plaza, Hialeah, Fla.
—
,
Odlin
*
convertible debentures
stock
(par 10 cents). Price
—Debentures at 100% and stock at
$3 per share' Pro¬
ceeds—To purchase a textile
mill, machinery, equipment
anJ.^ materials, and to provide working capital. Office
—375 Park Ave
New
York, N. Y. Underwriter—Harris
Securities Corp., New York, N.
Y., on a best efforts basis.
Oil, Gas & Minerals, Inc.
etodk
Drexel
and
Pioneer
Nov.
10
Trading Corp., Bayonne, N. J.
10,000 shares of $8 cumulative preferred
filed
stock, series A (par $100) and $1,000,000 of 8% subordin¬
1, 1968 to be offered
five shares of pre¬
ated debentures, series A, due Dec.
units of a $500 debenture and
stock.
Price—$1,000 per unit. Proceeds
general corporate purposes. Underwriter—None.
ferred
—
For
common
stock (par $1) be¬
ing offered for subscription by common stockholders of
record Nov. 25, 1958 on the basis of one new share for
each 21 shares then held; rights to expire on Dec. 9.
$70 per share. Proceeds — For expansion and
working capital. Underwriter—Kuhn, Loeb & Co., New
Price
(letofr of notification) 116,000 shares
of common
★ ORRadio Industries, Inc.
if^k2^iie9-e™0ftnw" uation) 32'255
shares of
for
"
Ponce de Leon Trotting
Association, Inc.
Aug. 7 filed 400,000 shares of common stock (par one
cent). Price—$1.50 per share. Proceeds—To pay current
liabilities, for new construction and working capital
Office—Bayard, Fla.
Underwriter—Robert L. FermaD
Co., Inc., Miami, Fla.
4c Powelton Village Development Associates, Inc.
(letter of notification) 5,617 shares of preferred
stock (par $10); 25,474 shares of common stock (par $1);
75,000 shares of class A common stock (par $1) and $25,000 of 5H% and 6% notes.
Price — At par or face
amount.
Proceeds—For working capital.
Office—3601
Nov. 17
Powelton
Ave., Philadelphia 4, Pa.
Underwriter—None.
Prairie Fibreboard Ltd.
Aug. 18 filed 209,993 shares of common stock (par $1.50)
to be offered for sale to residents of Canada in the Prov¬
inces
of
Manitoba,
Saskatchewan and Alberta
and to
residents of the United States "only in the State of North
per share.. Proceeds — For con¬
Office—Saskatoon, Saskatchewan,
Canada. Underwriter—Allied Securities Ltd., and United
Dakota."
Price
struction
purpose.
—
common
stock (par 2o cents) to be issued
to holders of warrants
in connection with a prior offering; warrants
expire Nov.
to offer $8,-
outstanding 4%% convertible debentures due March
1,
of
terms
5%
and
1967,
the
offers
to
are
price
offering
an
offered
be
equal
to
are
be. supplied
by
$1,000,000 of,the new de¬
company employees at
An additional
bentures
(the
March 1, 1967
debentures due
exchange
amendment).
to
95%
to
of principal
amount.
The remaining $13,500,000 of debentures, plus any part
of the $12,000,000 not taken pursuant to the exchange
offers will be offered for public sale at 100% of prin¬
Proceeds — For general corporate pur¬
including the financing of the cost of any acquisi¬
cipal amount.
poses,
tions and
Underwriter—Sheraton Se¬
construction.
new
/
curities Corp., Boston, Mass, on a best efforts basis.
Hotel
Sheridan-Belmont
/
Co.
Aug. 19 (letter of notification) $250,000 of 6% convertible
offered for subscrip¬
tion by common stockholders on a pro rata basis. Price—
At par. Proceeds—For working capital.
Office — 3172
North Sheridan Rd., Chicago 14, 111. Underwriter—None.
debentures due Sept. 15, 1963 to be
Sire Plan of Elmsford,
Inc., New York
(12/22)
Nov. 10 filed $250,000 of 6% 10-year debentures and 5,000 shares of 6% participating preferred stock (par $50)
to be offered in units of
a
$50 debenture and
share
one
stock. Price—$100 per unit. Proceeds—For
acquisition of motels. Underwriter—Sire Plan Portfolios,
Inc., New York.
of preferred
Southern
Bell
Telephone
&
Telegraph
Co.
(12/9)
Nov. 14 filed
$70,000,000 of 35-year debentures due Dec.
Proceeds—To repay outstanding advances from
& Telegraph Co., and the balance
will be used for general corporate purposes.
Under¬
writer
To
be
determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co, Inc.; Morgan
Stanley & Co. Bids—Tentatively scheduled to be re¬
ceived at Room 2315, 195 Broadway, New York, N. Y.,
1, 1993.
—
—
York.
proposes
American Telephone
Polaroid
Corp.
Nov. 6 filed 173,616 shares of
The company
debentures.
000.000 of the debentures in exchange for outstanding
common shares and an additional $4,000,000 in exchange
in
$3
Securities, Ltd., both of Saskatoon, Canada.
June 26 filed
$1,000,000 of 15-year 6% series A sinking
offered in denominations
$1,000. Price—At par. Proceeds—For work¬
ing capital and general corporate purposes. Underwriter
—Rassco Israel Corp., New York, on; a "best efforts"
basis.
Offering—Expected late this year.
fund debentures due 1973, to be
of $500 and
Realty & Theatre Ventures, Inc.
18 (letter of notification) 200,000 shares of class
stock (par one cent).
Price—$1.50 per share.' Pro¬
ceeds—For general working capital.
Office—50 Broad
St., New York, N. Y. Underwriter—Willis E. Burnside
& Co., Inc., New York.
Nov.
(par 35 cents).
Price—$l per share. Proceeds—
* or development of oil
and gas properties.
Office—513
international Trade
Mart, New Orleans 12, La. Under¬
writer—Assets Investment
Co., Inc., New Orleans, La.
Co.
Rassco Financial Corp.
V.
V
Halsey, Stuart & Co. Inc.; Morgan Stanley
& Co. (jointly); The First Boston
Corp.; White, Weld & Co. Bids—Expected to be received
up to noon (EST) on Dec. 10 at 1000 Chestnut Street,
Philadelphia 5, Pa.
./■• ; = *•-•'•** \/
&
Industries, Inc.
KfJorvn nnneshares of common
$250^00 of
and 250,000
fund
s.-
'
f
capital income sinking
Sheraton Corp. of America
Oct. 24 filed $26,500,000 of 7%%
able bidders:
»
corporate purposes,
including expansion, improvements, etc.
Office—2101
Howard St., Chicago, 111. Underwriter—Smith, Barney
& Co., Chicago and New York.
—
,
bonds due 1987. Underwriter—To be determined/
by competitive bidding. Probable bidders: Halsey, Stuart'
& Co. Inc.; Kidder, Peabody & Co.; White Weld & Co.;
Equitable Securities Corp., and Shields & Co. (jointly);
Lehman Brothers, Eastman Dillon, Union Securities &
May 5 (letter of notification) 150,000 shares of common
stock (par one cent). Price—$2 per share. Proceeds—To
pay loan; to acquire fishing tools for leasing; and for
working capital. Office—931 San Jacinto Bldg., Houston,
Tex.
Worth, Tex. Underwriter—Kay & CoV Inc., Hous¬
ton, Tex.,/;/.r-/■; / •/;'
Pasadena, Calif.
gage
($1 per share). Proceeds—For organizational ex¬
and first three months' operational expenses. Of¬
penses
fice—1250 Wilshire
.
Pennsylvania Power Co.
Aug. 1 filed $8,000,000 of first mortgage bonds due 1988.
Proceeds—To redeem a like amount of 5% first mort--
Naylor Engineering & Research Corp.
Sept. 29 (letter of notification) 300,000 shares of cumu¬
lative voting and non-assessable common stock. Price—
V,»
v'v*/
Fort
Co., Detroit, Mich.
C. Roney &
Proceeds—To
-:'w
Sept. 26 (letter of notification) 3,567 shares of common
stock (par $1). Price—$18.75 per share. Proceeds—To
go to a selling stockholder. Office—400 W. Vickery Blvd.,"
gregate of $100,000). Proceeds—To a selling stockholder.
Office—1365 Jams, Ferndale, Mich.
Underwriter—Wm.
(12/10-16)
/."'///v-vftW;">;Stvci'
.'■/
Service Life Insurance Co.
(letter of notification) 10,000 shares of common
stock (par $1). Price—At market (not to exceed an ag¬
515,021
debentures,
writer—None.
Oct. 6
stock.
common
and
Peninsular Metal Products Corp.
:
,
National Old Line Life Insurance Co.
' " *
at par (in units of $100 each);:
share. Proceeds—For investment!
working capital. Office—Alexandria, Va.:/Under¬
Price—Of
Inc., Pasadena, Calif.
writer—Investors Investments Corp.,
:/
/
V
and of stock, $1 per
May 19 filed 20,000 shares of common stock (par $1).
Price—At market. Proceeds—For investment. Under¬
—
/.
Sept. 22 filed $1,000,000 of 10-year 6% cumulative con¬
vertible debentures and 99,998 shares of common stock,
.,
(12/18)
*
•
Robbins Investment Corp.
Routh
graph Co. 640,957 preferred shares and 10,790,943 com¬
mon shares.
/
-" < ■:. ..v,-:•
shares of common stock (par 10
cents). Price — To be supplied by amendment. Proceeds
—To Narda Microwave Corp., the selling stockholder.;
Underwriters
Milton D.
Blauner
&
Co., Inc. and
Michael G. Kletz & Co., both of New York, and six other
Petroleum
Canada.
couver,
preferred stock (par $100) and 11,936,835 shares of
stock (par $100) outstanding as of Oct. 24, 1958,
there were owned by the American Telephone & Tele¬
60,000
underwriters.
share for each eight common or pre¬
common
To
Narda Ultrasonics Corp.
new
one
6%
Nov. 17 filed
Nov.
being
held; rights will expire on Dec. 30, 1953.
Price—At par ($100 per share). Proceeds—To repay ad¬
vances from American Telephone & Telegraph Co.
Un¬
derwriter— None.
Control — Of the 832,000 shares of
Morton
—
stock
ferred shares
Co., Inc.
Price
filed
24
offered for subscription by holders of outstanding com¬
mon and preferred stock of record Nov. 26, 1958 on the
Price—To be related to the current market
of Montana.
& Telegraph Co.
1,594,604 shares of common
Thursday, December 4, 1958
(with an oversubscription privilege). The subscription
period will be for 30 days following issuance of sub¬
scription rights. Price—To be supplied by amendment.
Proceeds—To pay off demand note, to pay other indebt¬
edness, and the balance if any will be added to working
capital. Underwriter — Pacific Securities Ltd., Van¬
Pacific Telephone
•
July 1 filed 100,000 shares of common stock (no par).
The stock will be offered only to bona fide residents
•
.
June 26 filed
Underwriter—None.
Opelika, Ala.
Montana Power Co.
:
.
Ltd., Alberta, Canada
1,998,716 shares of common stock (par $1),
Of this stock, 1,174,716 shares are to be sold on behalf of
the company and 824,000 shares for the account of cer¬
tain selling stockholders. The company proposes to offer
the 1,174,716 shares for subscription by its shareholders
at the rate of one new share for each three shares held
Richwell
14, 1959. Price—$2 per share. Proceeds—For manufac¬
turing and selling magnetic tapes. Office—Marvyn Rd.,
43
page
body & Co., Smith, Barney & Co. and Blyth & Co., Inc.
(jointly). Bids—Had been expected to be received up
to noon (EDT) on Aug. 26 at Room 2033, Two Rector St.,
New York, N. Y., but company on Aug. 22 again decided
&
.
(2344)
A
Remo Corp., Orlando, Fla.'^
Sept. 22 filed 100,000 shares of class A common stock.
Priced—To be supplied by amendment.
Proceeds—For
working capital. Underwriter — Citrus Securities Co.,
Orlando, Fla. <
up
to 11 a.m. (EST) on Dec. 9.
Arenas (Delaware)
Inc.
$2,000,000 of 6% 10-year convertible de¬
bentures (subordinated), due Jan. 1, 1969. Price—To be
supplied by amendment. Proceeds—$750,000 to pay AMF
Pinspotters, Inc. for bowling alley beds; $350,000 to pay
for other installations, fixtures and equipment; $85,000
to
expand two present establishments by increasing
the number of alley beds by eight at Yorktown Heights
and by six at Wilton Manor Lanes, ,Fort Lauderdale;
$300,000 for deposits on leaseholds, telephones and util¬
ities; and $395,000 for working capital. Underwriter—
Sports
Nov.
18 filed
None.
/V
_
Arenas
Sports
(Delaware)
Nov. 18 filed 461,950 shares
Inc.
i
of common stock (par one
cent). Price—At the market (but in no event less than
$6 per share). Proceeds—To selling stockholders. Office
—33 Great Neck Rd., Great Neck, N. Y. Underwriter—
None.
-KJ
./
11
s
*
- -
Life, Health & Accident Insurance Co.
July 9 (letter of notification) 50,000 shares of common
stock (par $1).
Price—$5 per share. Proceeds—To be
invested in stocks and bonds and to acquire other life
insurance companies. Address—P. O. Box 678, Gulfport,
Miss. Underwriter—Gates, Carter & Co., Gulfport, Miss.
State
Strategic Minerals Corp. of America, Dallas, Tex.
of first lien mortgage 6% bond*
March 31 filed $2,000,000
975,000 shares of common stock (par 10 cents). Pries
95% of principal amount; and for stock $1
share. Proceeds—To erect and operate one or more
chemical processing plants using the Bruce - Williams
and
—For bonds,
per
Process
beneficiate manganese ores.
to
Southwest Shares, Inc., Austin, Texas.
Underwriter-
-
„
/
Structural Fibers, Inc.
Nov. 4
(letter of notification) 15,700 shares of , common
stock being offered for
subscription by stockholders of
17, at the rate of one share for each two
shares held (with an oversubscription privilege); rights
to expire on Dec. 15. Price — At par ($10 per share).
Proceeds—To retire outstanding debts and for working
record Nov.
capital.
—None.
Office—Fifth Ave., Chardon, Ohio. Underwriter
*
'
-.//
""
'
'
-I f
i
Volume
188
Number 5800
The Commercial and Financial
Chronicle
(2345)
i
Super Food Services, Inc.
.
v
.
preferred share and
able
at $2.50 per
one warrant
(warrants are exercis¬
share). Price—$20 per unit.
common
Proceeds—To purchase outstanding shares of F. N. John¬
Co. Underwriter—W. H. Tegtmeyer &
son
Co., Chicago,
111.
[In addition, the company is offering warrants to
purchase 6,347 common shares to holders of class A cap¬
ital stock,, if converted to common shares
Dec. 31, 1958; and warrants to
on
or
before
purchase 6,000 shares are
being given to Central Illinois Securities Corp., which
has subscribed to 25,000 of the units
total of 42,356 common shares are
A
capital
shares
on
shareholders
in
being offered. A
being offered to class
exchange for said class A
share for share basis.}- Offering—Expected
a
this week.
">
"
'/•":) 'V'/'r
,
•
Texas
,
'
'
*•
>
■
*
-
Myrl
L.
McKee
of
Portland,
•%" .X\.
...
4
^
'* '
*
'
' '•*
-
*
'
\
♦
■
*
.
4
- •
/
,
_
Ore., if
1 .'
.?
;
.
*
'
•
'
'
Unitod Security Life & Accident
Insurance Co.
Aug. 22 filed 120,000 shares of class A common
stock.
Price—$3 per share. Proceeds—To provide the
reserves
required to be held in life and accident
insurance poli¬
cies, and to pay the necessary expenses in
producing
insurance.
Office—Louisville, Ky. Underwriter—None.
Edmond M.
Smith, is President.
1
:
Power
& Light Co.f (li/lS);-;^
$12,500,000 of first mortgage bonds due
1983.
Proceeds—Together with a cash contribution of
$2,000,000 from its parent, Texas Utilities Co., and funds
derived from
operations, will be used to finance con¬
to repay $4,000,000 of - loans from the
parent. Underwriter—To be determined by competitive
bidding. Probable bidders: Halsey, Stuart & Co. Inc.;
Kuhn, Loeb & Co., Blyth & Co., Inc., Kidder, Peabody
& Co., and Merrill
Lynch, Pierce, Fenner & Smith
(jointly); Eastman Dillon, Union Securities & Co. and
Salomon Bros. & Hutzler (jointly);
White, Weld & Co.;
Lehman Brothers; Drexel & Co. and
Hemphill, Noyes
& Co. (jointly); The First Boston
Corp. Bids—Expected
;to be received up to 11:30 a.m.
(EST) on Dec. 16 at
Room 2033, Two Rector Street New
York, N. Y.
and
Timeplan Finance Corp.
United States Freight Co.
(12/17)
Nov. 13 filed 210,000 shares of
capital stock
be
offered
Dec.
17,
for
1958.
of
common
of
one
stock
(par 10 cents) to be offered in units
share to each class of stock.
Price—$11 per unit
Proceed®—For working capital Office —111 E. Male
Bt, Morristown, Tenn. Underwriter—Valley Securities
Corp.,1 Morristown, Tenn.
subscription
the
at
rate
by
of
(no par) to
stockholders of record
one
new
—
acquired by the company for use in
"piggyback" opera¬
tions, and approximately $1,750,000 will be
applied to
additional "piggyback"
equipment, the balance will be
,
,
Mart, Inc., Boulder, Colo.
Nov. 10 filed 500,000 shares of common stock
(par $5).
Price—$10 per share. Proceeds—For working capital and
program.
Go., Boulder, Colo.
Underwriter—Allen Investment
V
*
if Transonic, Inc. V
notification). 72,726 shares of
(par 40 cents), of which 36,363 shares are for the
of a selling stockholder and
36,363 shares for
Price—$2.75 per share. Proceeds—To re¬
pay part ©f existing bank indebtedness.
Office — 808
Sixteenth St., Bakersfield, Calif. Underwriters—Steph¬
enson, Leydecker & Co., Oakland, Calif.; Hooker &
Fay and Denault:& Co., both of San Francisco, Calif.;
the company.
Co., Los Angeles, Calif.
if Trout Mining Co.
Dec.
2
filed
278,376
281,596 shares of
shares
are
to
be
common
offered
stock, of which
for
subscription by
common stock of record Dec. 31,
the basis of three new shares for each share to
be held Allowing a distribution to stockholders of rec¬
ord Dec. 5, 1958 of American Machine &
Metals, Inc.
There will be an oversubscription privilege. Price—$1
per share. Underwriter—None.
•
holders of company's
1958,
>
on
Tucson
Gas, Electric Light ft Power Co.
Nov. 5 filed 110,000 shares of common stock (par $5)
being offered for subscription by common stockholders
at the rate of
one
new
share for each 10 shares held of
record Nov; 25, 1958;
—$49
of
rights to expire on Dec. 15. Price
Proceeds—To be added to general funds
company and used for payment of promissory
per
the
notes.
share.
Underwriters—Blyth & Co., Inc., and The First
[Registration also cov¬
Boston Corp., both of New York.
11,000 additional common shares to be offered to
regular full time employees, including officers of com¬
ers
pany!
.
.
Tungsten Msuntsin Mining Co.
(letter of notification) 100,000 shares of com¬
mon stock (par $1).
Price—$1.50 per share. Proceeds—
To extinguish present indebtedness, increase reserve for
contingencies and working capital. Offlee—511 Securi¬
ties Bldg., Seattle 1, Wash.
Underwriter—H. P. Pratt
& Co., 807 Hoge Bldg., Seattle 4, Wash.
-A-Two Guys From Harrison, Inc. (12/15-19)
Nov. 26 filed $2,500,000 of convertible subordinated de¬
bentures due Jan. 1, 1974.
Price —To be supplied by
program.
Proceeds—For expansion
and
construction
Office—Port Newark, Newark, N. J.
Co., New York.
Under¬
writer—Bache &
Union Finonco Corp.,
Tampa, Fia.
Sept. 26 filed $500,000 of 6% 20-year sinking fund con¬
vertible capital debentures due Oct. 15, 1978. Price —
■
100% and accrued interest.
Proceeds—To be added to the
general funds of the company and initially used to re¬
duce bank loans and short term notes. Underwriter—
Beil & Hough,
Inc., St. Petersburg, Fla.
Offering—Ex¬
pected this week.
United
EMptoyoos Insurance Co.
April 18 filed £,800,000 shares of common stock (par $6)
Prise—$10 per share. Proceeds — For acquisition of
operating properties real and/or personal, including
office furniture, fixtures, equipment and office
Digitized for or purchase. - Office • -*■ Wilmington, DeLspace, by
lease FRASER
Under¬
-
—
.Underwriter—None.
•
Woolfoam Corp.
,
(12/10)
Nov. 6 (letter of
!
Smith, New York.
'
Wyoming Corp.
.
United States Glass
Nov. 26 filed 708,750
&
Chemical Corp.
outstanding shares of common stock.
Price—At market. Proceeds
To selling stockholders.
Office—Tiffin, Ohio. Underwriter—None.
»
—
Upjohn Co., Kalamazoo, Mich.
(12/11)
Nov. 21 filed 2,410,000 shares of common stock
(par $1).
Price—To be supplied by amendment.
Proceeds
To
selling stockholders. Underwriter—Morgan
Stanley &
'
Co.
.•
:
•'
■'
:/
,
5
Nov. 17 filed 1,449,307 shares of
common stock. Of these
shares 1,199,307 are
subject to partially completed sub¬
scriptions at $2, $3.33 and $4 per
share; and the addi¬
tional 250,000 shares are to be
offered initially to share¬
holders of record Nov.
1, 1958, in the ratio of one new
share for each 2.33 shares held on
that date. Price—$4
share.
per
Proceeds—$300,000 will
contract to purchase shares
on
—
of
be used for payments
International Fidelity
Insurance Co.; $325,000 for
capitalization of
ance
company; $500,000 for capitalization of
a
fire insur¬
a title insur¬
company; $500,000 for additional capital contribu¬
tion to Great Plains
Development Co.; and $300,000 as
an additional
capital contribution to Great Plains Mort¬
gage Co. Office—319 E. "A"
St.,
ance
:
Uranium Corp. of
America, Portland, Ore. :
April 30,1957 filed 1,250,000 shares of common
stock(pai
16 cents).
Price—To be supplied by amendment
(ex¬
pected to be $1 per share). Proceeds—For
exploration
purposes.
Underwriter—To be named by amendment
Albert
-;
ident.
<■
•
Griswold
of
Portland,
:
•••
Utah Minerals Co.
April 11 (letter of
V-
•
Ore.,
is
v\,
notification) 900,000 shares of com
Price-—At par (10,cents per
share). Proceed*
—For mining expehses. Office—305
Main St., Park City
Utah.
Underwriter—Walter Sondrup & Co., Salt Lak*
...
,
Utah Oil Co. of New
Acme
—
—
development of oil and gas lands. Office—574 Jefferson
Ave., Rochester 11, N. Y. Underwriter—Frank P. Hunt
& Co.,
Inc., Rochester, N. Y.
Utah Power A
Light Co.
$20,000,000 of first mortgage bonds due
i988.
Proceeds—To redeem $15,000,000 of first
mort¬
gage bonds, 514% series due 1987, to
repay $4,900,000 of
bank borrowings, and the balance
together with further
borrowings under a bank agreement and cash generated
26
filed
in the business will be used to
carry forward the con¬
struction program of the
company and its subsidiaries
amounting to approximately $43,000,000 for the
period
1958-1960. Underwriter—To be determined
by competi¬
tive bidding.
Probable bidders: Halsey, Stuart & Co.
Inc.; First Boston Corp. and Blyth & Co. Inc.
(jointly);
White, Weld & Co. and Stone & Webster Securities
Corp.
(jointly); Salomon Brothers & Hutzler; Kidder,
Peabody
& Co.; Eastman
Dillon, Union Securities & Co., and
Smith, Barney & Co. (jointly). Bids—Were to have been
received
in
N.
to
Y.,
up
Room
2033,
(EDT)
noon
2
on
Rector
Street, New York,
Sept. 9, but were postponed
Sept. 3. Bids will now be received on such
day sub¬
sequent to Sept. 22,1958 but not later than Nov.
25, 1958
as shall be designated
by
on
company.
Vernon Co.f Newton, Iowa
Nov. 25 filed 50,000 shares of
stock.
Price—
per share. Proceeds—For
working capital. Under¬
writers—T. C. Henderson &
Co., Inc., Des
common
$9.25
Moines, Iowa,
and
Quail & Co., Inc., Davenport, Iowa.
ir Vim, Inc., Washington, D. C.
Nov. 19 (letter of
notification) $245,000 of 6%
trust notes with
second
a
warranty and repurchase agreement
(to be issued in units of $3,500 each) and 350 shares of
common
stock.
Price—Notes to be sold at
a
discount;
($100 per share). Proceeds
For
working capital. Office—509 Perpetual Bldg., 1111 E.
St;,
N. W., Washington 4, D/C.
'Underwriter—None.
—
Vocaline Co. of America, Inc.
Nov. 10 (letter of notification)
writer—Paine, Webber, Jackson & Curtis, New York,
N. Y.
Waltham Precision Instrument
Co., Inc.
(letter of notification) 300,000 shares
Oct. 24
of
com¬
stock
being offered for subscription by stockholders
on
the basis of one share for each
eight shares held
as of Nov.
12, 1958 (with an oversubscription privilege);
rights to expire on Dec. 12, 1958. Price—At par ($1 per
share).
Proceeds—For working capital.
Office—Wal¬
tham, Mass. Underwriter—None.
West Ohio Gas Co.
(12/8)
Nov. 17 filed 37,615 shares of common stock
(par
be offered for subscription by common
$5) to
stockholders of
6,1958, at the rate of one new share for each
10 shares then held; rights to expire on Jan. 9.
Price—
$15 per share.
Proceeds — For construction program.
record Dec.
Office—319
None.
West Market
St., Lima, O.
Ce.
/
two, including
loans.
Proceeds—For expansion
program, work¬
ing capital and inventories.'
Underwriters—Blyth & Co.,
and Merrill Lynch.
Pierce. Fenner & Smith.
Commonwealth Edison Co.
Aug. 25 it was reported that the
company may issue and
sell $25,000,000 of
preferred stock.
Inc.
Underwriters—May
be The First Boston
Corp. and Glore Forgan & Co., both
of New York.
Offering—Expected late in 1958 or during
the first three months of 1959.
•
Consolidated Edison Co.
Nov.
25
it
was
announced
of
that
New
York, Inc.
the
company plans to
stockholders $59,778,600 of converti¬
ble debentures in the latter
part of January on the basis
of $100 of debentures for each 25
shares owned. Price—
To be determined
just prior to the offering date. Under¬
writers—May be Morgan Stanley & Co. and The First
Boston Corp., both of New
York.
Registration
Ex¬
pected on Dec. 23.
offer to its
common
—
Denmark
Sept. 2 it
000 to
(Kingdom of)
was
reported that
$30,000,000
may
market this year.
New York.
can
an
issue of between
possibly be placed
on
$20,000-
the Ameri¬
Underwriter—Kuhn, Loeb
& Co.,
Equitable Gas Co.
July 18 it was announced
that the company expects later
in the year to issue and sell
additional securities, prob¬
ably preferred stock, to
secure
approximately $5,000,000
of additional funds.
Proceeds—Together with $7,000,000
from private sale of 4%%
bonds, to repay short-term
bank loans and for construction
program.
Underwriters
—May be The First Boston Corp.;
Kidder,. Peabody &
Co.; Merrill Lynch, Pierce, Fenner &
Smith; and White,
Weld & Co., ail of New York.
First City National Bank
Sept. 19 it was announced Bank plans to offer to its
stockholders of record Oct. 2, 1958 the
right to subscribe
for 125,000 additional
shares of capital stock (par $20)
the basis of
on
rights to expire
Proceeds—To
Main
one
new
share for each 10 shares
held;
Jan. 10, 1959.Price—$40 per share.
increase capital and
surplus. Office—931
on
Street, Houston 1, Texas.
•
21,500 shares of common
stock (par $1.50). Price—To be
supplied by amendment
(approximately $2.25 per share). Proceeds — To repay
short term bank loan; reduce accounts
payable; acquire
inventory and the balance for working capital. Under¬
mon
Steal
March 21 it was announced that
the company plans addi¬
tional financing this
year, in the form of common
stock,
preferred stock, or a combination of the
bank
York, Inc.
May 6 (letter of notification) 300,000 shares of
capital
/ stock. Price
At par ($1 per
share). Proceeds
Foi
June
Under¬
Pres¬
arton stock.
City, Utah.
Casper, Wyo.
writer—None.
;;
and the stock at par
Aug. 11
amendment.
of debentures due 1991 (non in¬
bearing) and 800 shares of common stock
(par
to be offered to members of
this club and of
Concord Ltd. Price—$375
per common share and
$1,000
per debenture.
Proceeds
To develop
property and
build certain facilities.
terest
$25)
&
primarily as addi¬
tional working capital to finance
expanded "piggyback"
operations. Underwriter—Merrill
Lynch, Pierce, Fenner
.
common
account
and Evans MacCormack &
Oct. 27 filed
$500,000
used for general corporate
purposes,
:
Nov. 17 (letter of
stock
Statement effective Nov. 18.
notification) 150,000 shares of common
stock (par 10
cents). Price—$2 per share. Proceeds—
For general corporate
purposes.. Office—44 W. 13th St.,
New York, N. Y.
Underwriter—C. H. Abraham &
Co.,
Inc., 5C5 Fifth Ave./ New York
17, N. Y. 1
/
Tower Merchandise
construction
Yonkers, N. Y. Un¬
derwriter—Edwin Jefferson, 39
Broadway, New York 6,
N: Y..
Wilmington Country Club, Wilmington, Del.
share for each
four shares held,
rights to expire on Jan. 6. Price—To
be supplied by amendment.
Proceeds
Some $750,000
will be used to
prepay conditional sales contracts for
Graham
March 25 (letter of notification) 27,272 shares of 70-ceni
cumulative preferred stock (par $5) and 27,272 share*
Wilier Color
•
21 filed
struction
•
Television; System,: Inc. I.
;0
April 2 (letter of notification)
72,035 shares of common
stock (par $1); of which
10,000 are being offered to stock*
holders at $2 per share
(rights to expire on Jan. 17),
and the
remaining 62,035 shares are being
publicly, of¬
fered at $3 each. Proceeds—For
general corporate pur¬
poses. '• Office—151 Adell
Avenue,
trailers, tractors and miscellaneous equipment
previously
-V' I
Surrey Oil & Gas Corp., Dallas, Tex.
Nov. 12 filed 300,000 shares of
common, stock (par $1)!.
Price—$3 per share. Proceeds—To retire current liabil¬
ities and for drilling and exploration costs and
working
capital. Underwriter—Peter Morgan & Co., New York.
Nov.
writer—None.
President.'
v
Oct. 28 filed 110,000sharesof preferred
stock, first series,
and 110,00ft warrants, first series, to purchase a like
number of Common shares to be offered in units of one
45
Underwriter—
First National Bank in
Dallas, Texas
Dec. 3 bank offered 290,000 shares cf
additional com¬
mon
stock (par $10) to stockholders of
record Dec. 2,
1958 on a
one-for-eight basis; rights to expire on Dec.
Price—$27 per share. Proceeds—To increase
capi¬
surplus. Underwriters
Merrill Lynch, Pierce,
Fenner & Smith, Fort
Worth, Texas and, Equitable
Securities Corp., Dallas, Texas.
18.
tal
and
—
First National Bank of
Nov. 19 it
Jersey City
(N.J.)
announced Bank is
offering to its stock¬
holders of record Nov. 19, 1958 the
right to subscribe on
a pro rata basis for an additional
17,000 shares of
was
capital
$25); rights will expire on Dec. 5. Price—$55
share. Proceeds—To increase capital and
surplus.
Underwriters—Van Alstyne, Noel &
Co., New York. •
stock (par
per
if First National Bank & Trust Co., Tulsa, Okla.
(1/13)
Nov.
Bank
25
it
will
was
vote
reported that the stockholders of the
Jan. 13 to approve a plan to offer
on
100,000 shares of additional capital stock (par
$10)
about
13,
a
1959.
on
one-for-six basis to stockholders of
record Jan.
Price—$27
per
share.
Proceeds—To
Covt'nvcd
en
increase
Tiioo
ifi
The Commercial and Financial Chronicle
j,
.
./Thursday, December 4, 1958
(2346)
46
'
-
i.
i
."I
^
^
-J
Continued from page
•'
Lynch, Pierce,
Co.
on Sept. 16, but on Aug. 26 it was voted to post¬
this refunding program because of present market
conditions.
if General Telephone Co. of California
Nov. 21 it was reported that this company
the
P.
California
U.
has applied
Commission to issue and sell
(par
cumulative preferred stock
of 5%
500,000 shares
$20).
Proceeds — For capital improvement program.
Underwriters—Paine, Webber, Jackson & Curtis, of New
York and Boston,
Mass., and Mitchum, Jones &
ton, Los Angeles,
Temple-
Calif.
Nov. 3 it was reported
Midland Enterprises,
V-
.
that the company plans an
ing of common stock to holders of Giant
erties, Inc. Underwriters—May be Kidder,
Co., New York, and Auchincloss, Parker
Washington, D. C.
offer¬
Food Prop¬
Peabody &
& Redpath,
it
24
announced
was
<
Tea Co., Inc.
Power
Commission
for
unsecured notes and common stock
pipe line system to cost about $111,r
000,000.
Underwriters — Stone & Webster Securities
Corp. and White Weld & Co., both of New York.
"
secondary offering of common
voting stock is expected this year. Underwriters — May
include; Blyth & Co., Inc.; Lehman Brothers and Smith,
Co.
Barney &
Utilities
Gulf States
21
Nov.
it
Co.
(1/19)
announced company plans
was
to issue and
$10;000,000 of first mortgage bonds.. Proceeds—To
bank loans and for construction program. Under-
sell
repay
writer—To be determined by
able bidders:
competitive bidding. Prob¬
Halsey, Stuart & Co. Inc.;
Lehman Broth¬
& Smith and White,
(jointly); Stone & Webster Securities Corp.;
Merrill Lynch. Pierce, Fenner
ers:
Weld & Co.
and Salomon Bros. &
Securities
Co.
&
Dillon, Union
Bids—Expected to be re¬
Hutzler and Eastman
(jointly).
:
,
■
■
•
■'
'
was
announced company plans to issue
★ New York, Chicago & St. Louis RR. (12/16)
;
are
expected to be received by the company on
Bids
Co.
Inc.; Salomon Bros. & Hutzler. /v
'
Of?-
January.
time in
.
White,/ VFeld
Co. and Stone & " Webster Securities
Corp.;/both of New York.VOffering—Expected in ? the
early part of January.
••,///;
{/•
-
Union Electric Co., St. Louis, Mo. /tv:'//';
Was announced company plans to markeU
March 28 it
'/-V/-"
•about
$30,000,000-of
common
stock.in the latter part of
this year, br in the first quarter of 1959, but this financ¬
announced that
approximately $7,500,000
financing will be required for construc¬
expenditures for the balance of this year. The management intends to negotiate a new line of credit with »
was
some
if Transcontinental Gas Pipe Line Corp* v.:
-"'.V.'
l; it-was reported that the corporation plans to
$30,000,000 to $35,000,000 of first mortgage bonds.
/Proceeds—For construction program.
Underwriters—:
New York State Electric end Gas Co.
March 7 it
•
"
issue
certificates.
trust
:
Dec.
purchase from it of $4,920,000 equipment
Probable bidders: Halsey, Stuart &
Dec. 16 for the
expected
;
Co., New York. „Registration—Expected Dec. 10.
&
fering—Planned for
and
sell $24,000,000 of government insured bonds secured by
a first preferred ship mortgage on the liners S. S. Brasil
and S. S. Argentina. Underwriters—Kuhn, Loeb & Co
and Lehman Brothers, both of New York.
Offering —
Postponed because of uncertain market-conditions. ///
« ;
March 24 it
been
-
if Thomas & Betts Co. * /
Vv;-'V/- r"
24 it was reported that the company plans early,,
registration of about 250,000 to 300,000 shares of common
stock.
Price—To be supplied by amendment. /Proceeds
—To selling stockholders. Underwriter—Smith,
Barney
V
*
Bids had
Nov.
Proceeds—To build
Moore-McCormack Linos, Inc.
postponed.
1958.
been
about Sept. 30,
mortgage bonds,
,r
Feb. 19 it was reported a
fering—Has
this
Tennessee Gas Transmission Co. has
eral
Telephone Co.
35-year debentures. Proceeds — To'refund outstanding Z
$100,000,000 4%% debentures/ Underwriter—To be de¬
termined by competitive bidding.
Probable bidders; *
Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.
Of- »■
subsidiary of
applied to the Fed¬
permission to issue first
that
Boll
July 10 it was announced Missouri Public Service Com*
mission authorized the company to issue $110,000,000' of
Inc.
<9-
Great Atlantic & Pacific
Southwestern
28, company announced it plans to issue on ox
before Dec. 31, 1958 $3,200,000 of first preferred mort¬
gage bonds.
May be placed privately. Proceeds — Tfc
repay bank loans and for working capital. ;
.
;;
%
Midwestern Gas Transmission Co.
Halsey,
.
'
'
-
March
March
Giant Food Stores, Inc.
bidders:
and Kidder, Peabody & Co.'
ceived
pone
to
competitive bidding. Probabje
Stuart & Co; Inc.; Blyth & Co., Inc..
(jointly); The First Boston
Corp. Bids—Expected to be received on or about Jan.
20,1959. *
,
be
bidders:
capital and surplus. Underwriter— Merrill
Fenner & Smith, Oklahoma City, Okla.
determined by
be
—To
determined by competitive bidding. Probable
Halsey, Stuart & Co. Inc.; Morgan Stanley &
Bids—Had been tentatively scheduled to be re¬
—Tq
45
on
Jan.
ing may he put off until June, 1959.
Proceeds—For
con¬
from additional
19.
Gulf States Utilities Co.
13
Nov.
sell
it
was
(1/13)
announced company plans to issue
100,000 shares
of cumulative preferred
and
stock (par
bank loans and for construc¬
tion program. Underwriter—To be determined by com¬
petitive bidding. Probable bidders: Lee Higginson Corp.;
Stone & Webster Securities Corp.; Kuhn, Loeb & Co.
and Salomon Bros. & Hutzler (jointly); Lehman Broth¬
$100). Proceeds—To repay
Securities Corp. (jointly); Glore, For¬
gan & Co. and W. C. Langley & Co. (jointly).
BidsExpected to be received on Jan, 13.
and Equitable
ers
Heublein, Inc.
that the company plans early
registration' of 400,000 shares of common stock; of which
100,000 shares are to be sold for the account of selling
stockholders.
Proceeds—For expansion. Underwriter—
Aug. 25 it was reported
struction program. Underwriter—May be determined by
tion
ceived
competitive bidding. Probable bidders: White, Weld &
Co. and Shields & Co. (jointly); Lehman Bros.; Merrill
group of banks and expects to sell equity securities later
this year or in early 1959, depending upon prevailing
Lynch,'-Pierce, Fenner & Smith; /
market conditions. Underwriter—For any common
The
this
York. Offering—Not
expected
year.
Aug. 13 It
Bids
are
will
expected to be received by the company on Dec.
18 for the
purchase from it of $5,850,000 equipment trust
Probable bidders: Halsey, Stuart & Co. Inc.;
?
_
■
Japan (Empire of)
Aug. 20 it was stated that an issue of
10 it was announced company will sell late this
$10,000,000 mortgage bon<js but on Sept. 12 it was
dated that immediate financing will not be necessary
Underwriter—To be determined by competitive bidding
Probable bidders: Halsey, Stuart & Co. Inc.; First Boston
Corp.; Glore, Forgan & Co.; Blyth & Co., Inc.
between $30,000,000
and $50,000,000 of bonds may soon be publicly offered
on the American market.
Proceeds—For public works
projects, etc. Underwriter—The First Boston Corp., New
York.
& Co., and Goldman Sachs & Co. (jointly).
Kansas
Power
year
Northern Insurance Co. of New York
,
Chairman, announced that com
pany plans to sell some bonds originally scheduled foi
mid-year. The proposed sale was subsequently deferred
until late 1958 or early 1959. Proceeds—About $8,000,000
for construction program. Under writer—To be determined
by
competitive bidding.
Probable bidders: Halsey,
Stuart & Co. Inc.; Kidder, Peabody & Co., and Merrill
Lynch, Pierce, Fenner & Smith (jointly); Lehman
Brothers; Eastman Dillon, Union Securities & Co. and
Stone & Webster Securities Corp. (jointly); Glore, For
March 31, G. W. Evans,
gan
& Light Co.
Nov.
it
announced
was
capital stock (par $12.50)
it
1
was
construction
program.
A Co.; Blyth & Co.. Inc.; Equitable Securities Corp
;
Laboratory for Electronics, Inc.
July 3, Henry W. Harding, President, announced that
the directors are currently considering refinancing $790,000 of outstanding notes ($658,750 held by a principal
stockholder and $131,250 by a bank) on a more perma¬
nent basis. This may be done through equity or con¬
vertible debenture financing. Office—75 Pitts St., Bos¬
ton, Mass.
if Manufacturers & Traders Trust Co.
Drexel &
San
—
Master Fund, Inc., Fairfield, Calif.
was announced this newly organized invest¬
ment company "fens to offer to bona fide residents of
Jan. 27 it
California 10,(F1 shares of capital stock (par $1). Price
—$16 per shar
less an underwriting discount of 8&%
fteread*—For investment
Michigan Bell Telephone Co.
Aug. 12 director* approved plans to sell $40,000,000 of
for FRASER
34-year debentures. Proceeds—To redeem a like amount
Digitized
of 4%% debentures due
November, 1992.
Underwriter
First
—
.
(1/5)
;New
•
Corp., New. Yorkj
reported that the
and
interim loan obtained in
of
connection with the purchase
properties from Gulf States Land &/Industries, and
bonds due I960,.
Underwriter — May be HornWeeks,. New York.
-"
. '
blower &
Southeastern Fidelity Fire Insurance Co;
Aug. 26 it was announced that the company in all prob¬
ability wfll offer additional' common stock? to its share¬
Office
Proceeds—To expand opera¬
197 Auburn Aye;, N. E., Atlanta, Ga.
near
-r-
Underwriter—None;
future.
•"
.
....
L
*//■'•"»
.
.
'
Wisconsin
March 17 it
Power
was
A
Light
Co.
'
announced that company
and sell $10,600,006 of first mortgage
plans to Ismm
bonds. Proceeds—
To retire bonk loans and for construction program. Un¬
derwriter
To be determined by competitive bidding
—
the company is planning
Proceeds -f- To replace an
4^4%
holder* in the
■
Dec. 1 it was reported that the company/plans early
registration of $15,000,000 of first mortgage bonds. Pro¬
ceeds, — To. repay bank loans and for new construction.
Undeiwriiersr—Kidder, Peabody & Co., Blyth & Co., Inc.,
White', 'Weld & Co. and Laurence M. Marks
Co,, all of
New York. Registration—Expected' Dec. 9.
/r
»
•/
South Coast Corp.
27 it was reported that
long-term financing*
-
Washington Water Power Co.
.
some
"1
!--?-/
.
Expected in about 10 days.
(1/8)
company
sell $15,000,000 of
Oct.
York.
Vita
issue
'approximately 15,000 shares of common stock. Proceeds
—To acquire Mother's Food Products,/Inc. Underwriter
'—Granbery, Marache & Co., New York.- Registration-4-
-
Co., Philadelphia, Pa.
was
,
Food Products, Inc.
Dec. 3.it was reported that the*company plans to
For construction program.
Boston
(Government of)
Virginian Ry.
Aug. 26 the directors approved a proposal to exchange
2,795,500 shares of 6% cumulative preferred stock (par
$10) for $32,148,250 new 6% subordinated income sinkv tng fund debentures to
mature Aug/ 1, 2008 on the basil
of $11.50 principal amount of debentures-for each pre¬
ferred share. Offer began on Nov, 17 and will expire on
Jan. 16. Dealer-Manager—Harriman Ripley & Co; Inc.,
plans to issue
debentures. Proceeds—To repay
bank borrowings incurred for capital expenditures. Unlerwriter—To be
determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.; White, Weld
& Co. and Shields & Co.
(jointly); Salomon Bros. &
Hutzler, Kuhn, Loeb &. Co. and American Securities
Corp. (jointly); Eastman Dillon, Union Securities A Co.
and Merrill Lynch, Pierce, Fenner & Smith (jointly);
Lehman Brothers; Blyth & Co.r Inc.; The First Boston
Corp. Bids—To be received on Jan. 8.
'
and
tions.
'
Proceeds
Underwriters—Expected to be Leh¬
Kidder, Peabody & Co., both of New York, have
as financial advisors to develop a financial
program for the country.
As a first step in the prOf
gram a'short-term credit is being negotiated between the
/government in cooperation with -the two investment
banking firms and a syndicate of commercial banks in
"the
United. States,, Cgnad^ and the. United Kingdoiq.
/The th^ee institutio..s which are to-head this syndicate
«=tre The Chase Manhattan Bank, The First National
Citjr
Bank of New York, and Bank of America National Trust
& Savings Association. The Chase Manhattan Bank will
.be the fiscal agent for the credit.
The amount of the
-new financing involved is in the neighborhood of $250,rt)00,000. The purpose is to restore government balances
(Which have been reduced by the repayment of excessive
-<hort term obligations previously incurred.
z
'
•
offering of 295,841 addi¬
Diego Gas & Electric Co.
12 it
Nov.
Dec. 3 bank offered to its stockholders of record Dec. 2
rights ta subscribe on or before Dec. 17 for 322,388
shares of capital stock (par $5) at rate of one new share
for each six shares held. Price—$24 per share. Proceeds
To increase capital and surplus. Underwriter — The
First Boston Corp.. New York
plans to offer to its
of common stock will be offered by com¬
subscription by common stockholders about
5, 1959 on the basis of one new share for each 20
shares then held..
*
Su¬
been selected
for
Underwriters—The
ceeds—For
was
Society.
Venezuela
tional shares
Underwriter—To b*
determined by competitive bidding.
Probable bidders
Halsey, Stuart & Co. Inc.; The First Bosion Corp.; Glore
Forgan & Co.: Harriman Ripley & Co. Inc.; White, Weld
it
an
the New York State
1
on
reported that
Jan.
14
company
if Pennsylvania Power & Light Co.
Dec.
transaction rests with
July 1 the Government announced that Kuhn, Loeb A
the basis of one new share
for each two shares held (following 100% stock dis¬
tribution). Stockholders will vote Dec. 10 on both pro¬
posals. Subscription warrants are expected to be issued
late in December or early in January.
Underwriter—
May be The First Boston Corp., New York.
pany
announced company plans
8
stockholders the right to subscribe for 290,400 shares of
to issue anc
sell $10,000,000 of first mortgage bonds due 1988. Pro
Feb.
.
Northern Illinois Gas Co.
June
.
Kansas Gas & Electric Co.
stock, and has applied to the Interstate Commerce Com¬
mission for authority to do so.
"
/
t
stock
common
Co. and
20, James D. Edgett, President, announced com¬
plans early in 1959 to make a public offering of its
pany
1 it was reported
issue of
Brothers, Smith, Barney & Co. and Merrill Lynch,
Pierce, Fenner & Smith, all of "New York. Offering—
Expected/in November.■'^
■
Van Lines, Inc.
an
man
'
•
reported that
between $50,000,000 and $60,000,000. Approval
Chemical
★r North American Equitable Life Assurance Co.
Dec. 1 it was announced that the company plans an of¬
fering of 950,000 shares of capital stock. Price — $10 per
share.
Proceeds—To increase capital and surplus. Un¬
derwriter—John M. Tait & Associates, Cincinnati, Ohio.
'
' '• '
*
Motor Freight System, Inc. '(Mich.)
that the company plans to issue
and sell 125,000 shares of common stock. Underwriters—
A. C. Allyn & Co., Inc. and Walston & Co., Inc.
if Interstate
Dec.
the
was
be offered to/the public, the proceeds of which *
preme Court (expected within two months). Proceeds—
To
the
Petroleum Research
Fund
of
the American-
Salomon Bros, & Hutzler.
North American
run
of
certificates.
Nov.
soon
may
(12/18),
Ry.
'
Glore, Forgan & Co., New
stock:
Fir^t Boston Corp., New York.
Norfolk & Western
*
Universal Oil ProductsCo.•
*
'
-
it Southern Natural Gas Co. (1/ 20)
Nov. 24 it was reported that this company plans sale of
about $35,000,000 of first mortgage bonds. Underwriter-
,
bidders.^ Halsey, Stuart & Cov inc.: Smith
Barney & Co. and Robert W. Baird & Co., Inc. yointiy);
Equitable Securities Corp. and Eastman Dillon, Union
Securities &. Co. (jointly); White, Weld & Co., Kidder,
Peabody & Co. and Salomon Bros. A Hutzler (jointly);
The First Boston Corp. Offering—Not expected until
late in 1953 or early in 1959. '
' ?;
r
Probable
Worcester Gas Light Co.
Aug. 18 it
was
'
'
f
r
I
reported that Vie company plans the sale
of
$5,000,006 first mortgage bonds. Proceed*—For con¬
Underwriter—To. be determined by
competitive bidding.- Probable bidders: Halsey, Stuart A
Co. Inc.; Estabrook & Co. and Coffin & BUrr, Inc.
(jointly); Kidder, Peabody & Co. and vWhite, Weld A
Co. (jointly).
struction program.
Volume
18fr
Number 5800
.
.
The Commercial and Financial Chroi&cle
.
(2347)
taking .will get considerably more
was {he case a brief
attention than
spell back.
At
porter's
v
Astute
observers are
becoming
impressed by the behavior
more
funds
of
tions.
;
:
the seasoned
re-
Not
too
long
'
.
the
ago
substantial
f
ap¬
the
proper*
r> v r,'
\/ .'■
,
price; is
buyer and seller are
right,
to
get
together than
been for many
they
have
weeks.
,
-
.
be spilling over into the new issue
99.2299 for the
market.
This
Things look better in that
direction,.but it should not be
sumed that
in any
prospective buyers
Rather
if
are
that
if
the
less in line with what buyers
or
for,
looking
are
r
given
a
70
over
$45,500
or
of
Offering
debentures,
DIVIDEND
present
on
Electric
Canada Dry Corporation
Wednesday,Philadelphia
Co.
is
scheduled
an
Subscription
open
plans
■'
*•••,
tN
Aild
to
books
slated to
are
Monday on Northwest Air¬
Inc.'s offering of
preferred
lines
stock to its shareholders on
rights.
The company seeks to raise
.
$11,226,000 through the sale of its $25
par preferred at the rate of one
share for each three shares
of
held.
common
DIVIDEND NOTICC
preferred stddk
Thd following dividends have been
declared by the Board of DQectois:
The Board Of Directors W d*
re¬
offering of $50
Any unsubscribed
fe
santa
The
Board of
dividend
a
share,
being Dividend No.
Capital Stock of
the
Preferred
June
Capital
December! 26,
120,
NOTICED
Bbard
also
B, 5%
$1.25
Stock, payable January 1, 1959 to
Series
D, 4.25%
$1.0625
Series
Series F,
$1.0875
$1.0875
Series
E, 4.35%
4.35%
G, 4.40%
$1.10
stockholders of record at the close
of business
on
of; this
Checks will be mailed.
'
declared
.
In
per
at
.
day
share,
a
being
the Common Capital Stock
payable March 2,, 1959* to
Common Capital Stock rCgls-
off said
oto toe
books
close'of" business
r-
..
this
on
i
the Company
23,
January
the
addition,
of
Board
dividend,
No.
189,
for
Twenty-five
Cents
(25'C)
at
1959,
9,
PREFERRED
of
/
120
r
an
the
year
per
share,
extra
1958,; of
one
on
pany,
payable January
holders
the
of
•
•
1958.
12,
2,
the
at
1958.
1959
close
Transfer
Checks will be
open.
of
106 Wall Street,
Stock¬
to
business
books
will
mailed.
of
The
Board
declared
(50c)
Directors
of
dividend
a
share
per
on
record
New
December
at
Stock
16,
the
close
1,
1958.
Dividend No.
on*
-
On November
D. David
rectors
of
26,
1958,
Aircraft
Common Stock
poration declared
-
twenty
cents
the
per
Southern
District
of
dated July 28, 1937.
New York, December 3, 1958
Cor¬
per
stock
to Stockholders of
on
record
the
.
Semi-annual—$1.25
per
per
a
J
4
an extra
cents
dividend
stockholders of record
to
1,100 offices
in
U.
37|^
K. BARNES
Cottipcuv^
<
tkih*
-
•
PER SHARE
1958
Record December 12,1938
Declared Deceate 3,-1^58
WEST EENN
Canada. Hawaii and Alaska.
suauia
COMMON STOCK
at
BLEtMlC
SYSTEM
Monongahela Power Company
The Potomac Edison
Company
West Penn Power
Company 0
Because
Ov-ter
-
share
of the impending consolida¬
Amphenol Electronics Corpora¬
The George W.
Borg Cor¬
poration, it has become necessary to
tion of
tion
ri-r-ii-n
Payable December 2§t
STUART
Secretary
at
Quarterly dividend
per
ber 15, 1958.
on
Thompson
-j
(Incorporated)
the close of business Decem¬
share
7 958
a
■
shard, both
payable oh January 15, i959, \
Assistant Secretary
Wm. E.
1.
Gonzalez, heatum
1958.
Electric
•
share
ending December 31,
1958, and
of 80
1958.
centd
payable December 31, 1958 to stockholders^ of record
at the close of business December 12,1958..
December
l,
York,
N6w
the
capital stock for the
quarter
the close of business Decem¬
ber 8,
today declared
dividend of 80
the
5% Cumulative Preferred Stock
.
Gold
Guaranty Trust Company Of
New York
share
of
Vice-President and Secretary
.
with
harmonise
and
the
payment
panies
by
dividend
dates
of
adopting
-declaration
the
a
two
com¬
dividend
new
schedule.
During
1958,
Amphenol
has
paid
quarterly dividends of 30 cents
Share which were distributed in
four
per
the
AMERICAN
months
and
October.
Corporation
Preferred Dividend No. 211
Common Dividend No. 201
A
quarterly dividend of 75# per skate (1
on
^he
Stock for the quarter ending December 31,1958
and a dividend of 30^ per share on the Common Stock
have been declared. Both dividends ate payable JafcUaTy
2, 1959 te holders of record December <8, 1958. The
Preferred
stoek trassfer books will remain open.
mmmm
m&m
tmenrer
January,
April,
July
Borg
quar¬
cents per share
payable
in
March, June,
September and December.
It is an¬
1058
ticipated
that ah
initial
dividend
Electronics Corpora¬
tion, the hew Company, wiil he 35
cents per
share and that it will be
paid in March, 1959. It is also an¬
ticipated that future dividends, when
declared, Will be paid in March, June,
September and December. Since the
adoption of the new dividend program
will
be
a
matter
for
the
Directors, of
the
new
company, the Directors
and
Bo<rk
further
the
have
dividend
agreed
Board
of
consolidated
of
to
action
Amphenol
take no
until
after
proposed consolidation has been
Voted upbn
by shareholders
cember 30, 1958.
Dated at
on
De¬
Chicago, November 25, 1958.
ELECTRONICS
CORPORATION
FAEO fc. RACE,
Secretary add Treasurer
-
SUNDSTRAND
MACHINE TOOL CO.
A
fcf
Amphenol-Bofcg
AMPttfefcdL
Louis T. Hindenlang
November 26> 1958
of
The George W.
has declared four
terly dividends Df 45
in
BANK NOTE
t<0
Deposit
Twshty-
The board of directors of
dividend of
a
(20(?)
common
QUMltEftLY
—$.25
of
Kind
of
the
Plan
of
Reorganisation
confirmed by order of the United
States
District
court
for
th*
the Di¬
Radio
-J
.
dividend
Mortgage
Sinking
103
Secretary,
Directors has declared cash dividends
of thli
Certificates
First
IVa %
unnntnini
■
300 Park Avenue
old
and
yemf
President.
December
COMMON STOCK CASH DIVIDEND
„
Z |*ytt6nt
holders of
1958.
Jersey
Y.
oi
record
john m.
HERBERT M. KINGSLAND,
"
business
of
Boon ton
v-
■
New York 22, N.Y.
CONSECUTIVE
a
stockholders
CORPORATION
fma/ice
The Board
Capital
outstanding, payable December 24, 1958,
j
AIRCRAFT RADIO
|
Corporation, December 29, 1958,
of
of Directors has thl«
a dividend of
Twenty
Cents (20#) per share on the ConW
P»nV'8 81 par value Common Stock,
payable
December
24.
1958,
to
stockholders of record at the eiose
of business on December
16, 1958.
day
Cents
surrendered and the stock issued
in accordance with the
provislqna
at
-
Fifty
•
1958,
.
the
on
this
Shares of the Company's $1
par
value Common Stock, will be madd
When and if said securities are so
Company, payable December 17,
,
of
has
Bonds,
entitled to receive,
upon
the surrender 6f said
securities.
Stock of the
on
Street, Now Vork f
^hJ,^6krd
day declared
^
December
on
i
10$ Wall
New tOrk 5
,
-
Assistant Treasurer,
Broadway, New York 5, N.
BlVlDiND
154
Directors
r, Michael
SWEARINGEk,
M.
R.
,
Treason*
MANATI SUGAR COMPANY
sugar company
Preferred Stock of this Com¬
record
December
December 12, 1958.
the
oil
of
stockholders
to
Company, payable
stockholders of record at
'
VINCENT T» MlDfiA
November 26,1958
the feancisco
stock
25, 195S a quarterly dividend
and three-quarters per cent Was de¬
clared
a
payable
1959.
declared
business December 5,
,
On November
JOHN R. HENRY, Secretary
Pasco
•
the close of
:
to
■
ijj (ii.wrii nifjti
Pasco
de
Board
mon
the
Common Capital Stock of the
January
,
•
AMERICAN
Corporation
meeting held on Decern-,
ber 2, 1958, declared a cash
dividend of twenty-live cents
(25<0 per share on the Com¬
.
Company,
holders
{.•tered
The
Cerro ' de
close of business
the
December 8,1958.
CORPORATION
Cash Dividend No.
for
Stock
dividend of Thirty Cents (30c
on
profits
Pet Shire
Series
the Preferred
payable Febru-net
1953.
'Dividend'No;. 190,
Cerro
:
12,1958.
Series
B. RIONDA BRAGA,
(250) -per
the close of businesi
at
December
Common stock—-A quarterly dividend
of $0.25 per share on the Common
to
1958, to holders of
registered on the
30,
at
on
of business 6n December 8, 1958.
J. W. Reilly, Secretary
remain
day declared
on
undivided
the Company
of
The
of
of record
stockholders of record at the close
CAN COMPANY
under-
Cents
this Company,
out
ended
year
books
has this
Twenty-five
1959 to holders of Preferred Stock
$4.25 Cumulative Preferred
Stock, payable January 1, 1059 to
Transfer books will not be closed.
DIVIDEND
en¬
the bonds Were really moving. In
fa<?t the Street termed the response
"very good" and the issue one of
the most heartening in some time.
November-25.
Directors
«f
:,arj'»2; ' 1050;
/said
Y.,
following quarterly
dividends payable January I,
the
company
railway
York, NT.
dared the
Preferred Stock—A regular quarterly
dividend of $1.0625 per share on
of
New
NOTICES
NOTICES
LONG ISLAM UGHTttB C6MMV
anw
topek.%
DIVIDEND
of $70 million
if
hold.
DIVIDEND NOTICES
v;'atchison;
2,410,000 shares
market
to
open
bids for ait
NOTICES
OIVIOENO
wiuig
of Metropolitan Toronto for
pub¬
On the same day South'
brn Bell telephone (To.' will
per
the
on
of the
lic sale,
rate.
cents
un¬
Thursday,
spread of
,,Upon reoffering at a price set to
yield 4.50%; it was reported that
price is right, and the yield more
-
little
a
coupon
On
On Tuesday, bankers are slated
to offer
$26,559,000 of debentures
tire. issue.
merchandise.
appears
only
same
indicated
an
$1,000 bond
moOd to "reach" for a par¬
ticular piebe of
v
as¬
was
by
derwriting bankers.
;
million of bonds.
fering of $65 million of first and
was
true/ Each time the market
refunding bonds, due 1990, found
attempted to stick its head up, it investment .bankers
thinking
appeared to attract new liquida¬
pretty much along the same price
tion. Currently, trading seems to lines when
bids were opened.
/*/'
dry up wheh the list, that is the
The top bidder paid the com¬
;
gilt-edge end of the market, tends
pany a price of 99.301 for a VA%
to slip off a little.
j
\
interest rate.
The runners-up
-1
And the better feeling seeiqs to
sought the big issue on a bid of
.
But several sizable
equity Opera¬
tions will help swell the total, i
Pacific Gas & Electric Co.'s of¬
reverse
offer¬
•
ceive bids for
Pacific Gas 4^4s
r:
debt
ings and an Isstte for Metropolitan
likely
more
shares will be taken down
Upjohn Go* for the account
of selling stockhOldefS. ^Otld
of
bankers will I the proceeds accrue to Die cdtti*
Toronto
will -round
out
next make one of the biggest of recent pany.
i
> (
week's fixed-term debt calendar* secondary offerings when
they ,
public Utility
Two
.
sistance to selling pressure where
:
too
j "
as
of
be on the side
It develops.
t
market
time goes on. < They are quick to
point out that any real emphasis
appears to
?
bond
:
price levels, it
where
So
~
Ot
current
-i
-
pears,, there has been some notice¬
able change in the thinking * of
those who manage the portfolios
of, large
investing
institutions.
lLoaded With cash, thejy seem to
be more willing to add a bit to
their holdings rather than close
the books fpr the year with idle
j-;':
*
>
Fair Week Ahead
47
Diversified Closed-End
Investment
Company
DIVIDEND NOTICE
Final Quarter Dividends
The Board of Directors de¬
clared
regular quarterly
dividend of 2 5# per share on
the
a
common
stock, and
Record Date December 9, 1958
57
a
2% stock dividend, both pay¬
able December 20,1956, to
shareholders
of
on
cents
a
share
the COMMON STOCK
Payable December 22, 1958
record
December 10,195$.
67vt
G.J.LANDSTROM
cents
a
share
on
the
$2.70 PREFERRED STOCK
Vice Presidetit-Secretary
Payable January 1, 1959
Rockford, Illinois
November 2\ 1958
J
15
BraadWay, New York 6, N.
ft
i
Chronicle
The Commercial and Financial
'48
Thursday, December 4, 1953
...
/
(2348)
Manual
Credit
BUSINESS BUZZ
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NATL BANK
WASHINGTON, D. C.-Presi-
number
Eisenhower, in a little
a month from now,
will send his sixth and one of
this largest budgets to Congress.
The
big telephone directorysize
document is expected to
call for $72 billion plus in ex¬
dent
;
budget.
than
more
for the
penditures
safe to predict that
will provide for
continued "push button"' de¬
fense
spending.
Big business
and little business will be in¬
terested in the President's rec¬
ommendations.
There is spec¬
ulation that there will be "neg¬
lect" to a certain extent of the
"conventional forces" like the
The defense program for the
£ next fiscal year, is expected to
be
the greatest in
peacetime
I Neil
recently
McElroy
H.
less than
proposed expenditures
of the
the forthcoming budget
for
will
in
bureaus and agencies
expenditures to a
minimum for the coming year
in view of the tremendous defi¬
cit that is shaping up.
the
it
has
a
1 this
cial
United States,
;
the people in the
;
Perhaps from a percentage
standpoint, the population
of
the country is unfamiliar with
the reasons why there is need
for a budget.
The budget, as
1
former Budget
'«•
1
process
itself.
in
■)
which recom¬
mended that all budgets should
be kept on an accrual basis, and
all
appropriations
should ibe
^limited to the amounts spent in
Director Harold
said
he
sound ;
was
'
'cies, bureaus and departments,
; merely
prepares
the ground
:work
for Congress. .Congress
must make the final decision in
;
unsound.
.
the CpnstituWhen the President has
ever appropriated.
As st. result there is going to be
'h huge deficit of" some $12 bil¬
lion by June 1, 1959, according
to fiscal experts at the Treasury
Department.
Congress
raised, rather than lowered the
President's budget. It could be
that the new Congress, overwhelmingly controlled by the
At
■
the
last
session
Democrats, will reject some: of
the asserted thrift plans that
are scheduled to be included in
the forthcoming budget.
On
<
n
*
the
Senate
side
of Con-
two of the most power _ful figures in fiscal affairs, are
gress.
Senator Harry F.
crat of Virginia,
Byrd, Demo¬
and
Senator
tures.' % '
can
there will- be
lot
more
spenders
a
what
to hold down spend¬
ing. Nevertheless,
in
no
the
and may or may not coincide with
the "Chronicle's" own views.]
marked
in
made
a
""'•!
only
Democrat
members
.
Albert
the
committee.
Man/s
will continue
as
the
people
would
take
Ask
ter
Company,
Avenue,
New
420
York
es^iepditures.
But
have been clearly, over¬
powered like a powerful colle¬
over
would run.
high school team. Their
football
a
have
team
been
to
no
avail.
Fixed Expenditures
There is
paramount thing
that perhaps not many Amerione
days from
ninety
them
them
for
out at
Booklet
which-
average
an
on
profit.
a
How
to
Options
MEMHKS PUT 1 CALL MOKE*S A OIAIEKS
Benjamin Strong, Central Banker
—Lester
.
ap¬
hundred
Rler, Schmidt* Co.
17, N. Y.
chairman
per
Market—Report—J. Wal¬
Thompson
Lexington
Ari¬
days at
them
cost
if the stock should
next
Use
Alaskan
however,
thirty, the Call purchased
to
give
would
J
Committee;
the
may
or
buy addi-
ninety
$200.00
many
of buying
twenty
for
Then
Call.
in
V.
120
Broadway, N. Y. 5
ASSN. INC.
BA7-B1B0
"
Chandler—The
Jack¬
son Place, Washington 6, D. C.
(cloth), $6.00.
Brookings Institution, 722
TRADING MARKETS
Senate
they
has declined
fearful
could
which
very
a
twenty;
to
at
good
rally
American Cement
Byrd and Bridges
and Representatives Howard W.
Smith of Virginia and William
M. Colmer of Mississippi, the
No. 1 and No. 2 men. respective¬
extravagant
is
Option. Suppose
own
you
stock
Calls
like Senators
ly, on the House Rules Com¬
mittee, that have tried, with
numerous
colleagues
of
the
Senate and House, to reduce the,
an
either
are
twenty
Senate
and Currency
of
contracts
break
a
thirty-four
share
Senators Robert
of Tennessee. **1
use
which
stock
from
twenty
Oklahoma;
Gore
after
interesting
a
of buying Call
idea
average
proximately
Appropriations
Committee, and Senator J. Wil¬
liam Fulbright of Arkansas will
again head the Senate Banking
of
of
are
to
buy
conservative
the
on
he is about
Senator Carl Hayden of
Certainly
the
Democratic
controlled Congress of the past
few years has done nothing to
reduce expense. Sure, there have
Business
J. 'Allen
Frear of Delaware^ Russell B.
Long of Louisiana: George A.
Smathers bf Louisiana; Clinton
P. Anderson of New Mexico;
Paul H. Douglas of Illinois, and
of
Kerr
! '
Spenders Prevail
members
real
AFTER A BREAK
H?t have the free funds to
tional stock.
They could,
The other incumbent Democrat
zona
been
are
TO AVERAGE
additional
Sen^t^^iflSK'ce Commit-
bRl tTie facts
that the Eisen-*
BUYING CALL OPTIONS
•
with monetary
origi-
,
i efforts
•} they
be
/
[This column is intended to re¬
flect the "behind the scene" inter¬
pretation from the nation's Capital
Senate committees
in the next Congress which deal
the
effort to reduce ex¬
penses, but no all-out effort has
ever been made by the Admin¬
istration to really cut expendi¬
American people can depend on
two Senators doing
will
There
changes
a
administration
giate
these
„
com-
""The
signed to cut the Federal deficit.
j
passive
Styles Bridges, Republican, of
New Hampshire.
Certainly the
t
recommendation to
spending, it should create
kind of fiscal poliqy de¬
some
spent,
<
Cj^'tnTS office
with
hower
•fcobgfesi has
House
and
swept the country.
curb
executive
result has been
funds than any peacetime
Senate
Commission
-
promise that Ex¬
penses would be cut, and taxes,
reduced, if at all possible. The
1958
OPTIONS
mittees,. of course, will have
more Democrats on them beeause of the November general
elections when the Democrats
of the
tration
!
All
Federal budg- \
et and spending, the greater the 1
inflation. If Congress does not
see
fit to implement a Hoover
vert to the Treasury.
Republican
Democratic Congress at
session appropriated
The
j
The bigger the
President Eisenhower and the
by the House Appropriations!
Committee, acting
principally
through subcommittees.
more
i
Department and foreign aid.
agency
or
A SERIES
ON THE USE OF
v
Under the recom¬
Department
*3 W
affairs. SenatQf
Byrd will continue a§ skafrhi'an
gress/ thrǤtimates reg studied j TiSlly
the
;
would be spent, or it would re¬
/transmitted ^is budget--to Con¬
,
until
Soci¬
and
University,
Princeton
quest.
the
of
side
House
the
about the Federal
Capitol, Representative Clarence
Most of the domestic
Cannon of Missouri, will conspending, other than the Defense
Department, is already ! tinue as chairman of the Appro¬
priations Committee; Represen¬
fixed by law. This of course in¬
tative Wilbur D. Mills, chairman
cludes pensions, Veterans Adof the powerful Ways and Means
! ministration, payment of $7.5
Committee. The lineup in the
billion in interest payments on
! the
Federal debt,
and many ; House Banking and Currency
other things.
Committee, which RepresentaOf course there
could be made many cuts, but f
tive Brence Spence of Kentucky
has headed, will continue pretty
the big items in reduction would
have to come from the Defense .1
much the same.
? j
mendation, the amount appro¬
priated in any one year to a
Federal
with
*
years,
Economics
of
budget.
letting Federal agencies pile up
billions and billions of dollars
several
On
realize
cans
businessman reasoning,
current practice of
for
Interna-
—
Princeton, N. J. (paper), on re¬
with
?
Hinshaw
tional Finance Section, Depart¬
nincompoop!"
ology,
felt that, the
joint effort of all Federal agen¬
cies.
All of the long hearings
various agen-
Deficits May Continue
r.:\
•«..!
•
;
and studies by the
tion.
"
>
The Hoover Commission,
Preparation of the budget, as
an
annual work plan of the
Federal. Government,
is. the
:
year."
any one
role in the man¬
agement of government affairs.
tt plays a vital
.accordance
you
Convertibility
European
ment
several years ago
once
Nevertheless,
shaves—SAVES,
"Not
Commission! of
Hoover
the
Beane, 115 Broad-
New York 6. N. Y.
Randall
—
Congress has thus far turned
down on the proposal
of
&
The
Investments—J. R.
on our
Toward
the lawmakers to
gasoline tax to keep
Interstate
Highway
con¬
thumbs
;
Offensive:
Economic
way,
the
Hoover Commission's Views
;
said, is only a
and in no sense an end
j D. Smith,
v
90% of the money for the
41,000 miles of divided, multilaned, access - only interstate
highways. The cost is going up.
upon
Preci¬
ex¬
up
tremendous
the, economy of
country. It affects the so¬
and economic affairs of all
impact
—
(on request).
Williston
is
Eisenhower
secondary road programs have
priority and those programs will
continue uninterrupted. But the
Federal Government is putting
important document. Why?
Because
111.
Soviet
A
struction program moving ahead
on "schedule." The primary and
Every agency in Washington
at this time is busy in prepara¬
tion of the budget. The budget
quips
Co., 4411 F Ra-
venswood Avenue, Chicago 40,
;
request
also
raise
Budget's Impact on Nation
an
-
President
their
and
cartoons
sion Equipment
pected to ask Congress to con¬
tinue the present taxes. He may
ments,
is
of
May Raise Gasoline Tax
Meantime, President Eisenhow¬
er has directed that all depart¬
hold
Laugh Book—Containing reprints
effect
defense of the country,
the
publication layouts — The
Clinic, West Washington
Road, Mendota, 111., $3.75.
101
further reduced at this
be
time.
will be
Butler's Layout Scrapbook—
Butler
unlikely it
it seems
However,
-
,
Navy, in order to
the "push button"
operations. In the last
three or four years the size of
'the Army
has been reduced
from 15 divisions to nine or 10.
billion, than the current 1959
fiscal year. Congress authorized
$42 billion for the current year,
-Thus, it is obvious that most
i
-
Annual Re-
—
port—Government Development
Bank for Puetro Rico, San Juan,
p. rR.
(paper). ~ : ?
Ken
defense
? $2
;
-
further push
ac-
fknowledged that it might run
$1 billion or more, but
for Puerto Rico
-
,
Bank
Development
Government
and
Army
Secretary of Defense
history.
.}
John Magee,
Mass.—*
—
Publisher, Springfield,
cloth—$12. •
,
It appears
fiscal year
John Magee
—
HERE!
v
the new budget
starting July 1.
=
,
General Semantics of Wall Street
SHAVES
7
>
Service,; French Embassy, 972
Fifth Avenue, New York, 21,
N. Y. (paper).
;
MRS. NAN RJCHBUCKS
than the
interested in a balanced
session
forthcoming
la
Assistance
Equatorial
Africa
1948-1958 — Press Information
and
West
:
JL l/M
-J3.il/tM/
Ina Ik Natiw't C.,it»l
.
—
Economic
French
271st
A vs/JF
B.WoJ-lh.-Sctiu
Commercial
of
National Associa¬
tion of Credit Management, 229
Fourth Avenue, New York 3(
N. Y. (cloth), $12.00.
>
Laws, 1959
,
Botany Mills
Heywood-Wakefield
Indian Head Mills
W. L. Maxson
Morgan Engineering
National Co.
Carl Marks & Ho. Inc.
Southeastern Pub. Serv.
United States Envelope
20 BROAD STREET
TEL: HANOVER 2-0050
•
NEW YORK 5.
*
'
"
FOREIGN SECURITIES SPECIALISTS
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_
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-
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