Full text of Commercial and Financial Chronicle : December 5, 1946, Vol. 164, No. 4548, Section 1

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tvis.

&*•
■;■'' T

ESTABLISHED 1839

Final Edition

In 2 Sections-Section

JV:;P
Reg. U. S. Pat. Office

Volume

New

Number 4548

164

Price 60 Cents

York, N. Y., Thursday, December 5, 1946

Stock Exchange

German-American Trade Getting
By FREDERICK IIAUSSMANN and NORBERT MUHLEN

prospects for sizable imports from

for its accomplishments in providing impartial,

continuous, competitive and well-balanced mechanism for buying and selling securities.

Appraises re¬
official registration statements and prospectuses
"have become almost a joke and perhaps a boomerang." Says required publicity for purchases and
sales by corporation officers and directors not only has caused loss of services of competent corporate
;;7 officials, bat also prevents them from supporting markets for their'own securities. Also attacks credit
V control and restrictions on short selling.
'*
I '
* \ /
v
sults

control

government

1933.

since

Holds

V PART

liiii!#iIST0CK

high-precision; goods. Prospects good for potash and general
chemicals, jewelry, leather goods, hops, beer and wines.

;

CUMBERLAND

Dr. Cumberland commends New York Stock Exchange

Germany,s
based on changed character of postwar Germany's production and X:
foreign trade. Predict prewar structure of American purchases will ■
be drastically changed, 'because of
(1) Potsdam agreement;;
(2) exclusion of Eastern Germany from world market as result of
Soviet occupation; and (3) wartime destruction of industry.
First;
articles to revive will include toys, radio cabinets, optical and other
survey

Partner, Ladenburg, Thalmann & Co.

Economists

Copy

Functions and Over-Regulation
W.

SliSiilv; Under Way :l;|lll||;

Instalment/C

II—Concluding

•}'

exchange, procedure and regulation

Surprisingly enough, many persons of substantial financial experience are not familiar
with the precise procedure in buying and selling stocks on the New York Stock Exchange.
Germany, which was our fifth best customer in the years before
the war, again enters the foreign trade scene though on an incom¬ This is not the occasion to describe round lots and odd lots, specialists, floor brokers, inde!
F'-C'XX^X-X^XX^pendent trad- ■
" ■F;'
""1 —
':
'•—"V. v
'■
parably more modest level than <»
—:
.

before.

ever

In the last months,

the import-

Mili¬
tary Government has received re-

export section of American

Investor Do Now?
-

Manhattan Research Associates

^ •

•

pose

Sup¬

pricq/'from

one sale to the next.
'(Continued on page 2906)

' w. W. Cumberland

Dr. F. Haussmann

Dr. Norbert Muhlen

quests from 13 countries, includ¬
ing the United States, for permis¬

purchase German prod¬
ucts.
Simultaneously, German
manufacturers
have
presented
numerous
interesting offers for
sion

export facilities. In Munich, Stutt¬
gart and Wiesbaden, German eco¬
nomic authorities have set up ex-

constructive

sale.

include:

factors

General

velocity in late August and early Septem-

are

all

Xjx>„

justified in asking if the economic house will be able to

Aerovox Corp.*
Havana Litho.

& OHIO RR.

Co.*

Prospectus on

request

Hirsch & Co.

Established
INVESTMENT

and other Exchanges

8-0600

HAnover

Geneva

iji'l

York 4, N.Y.

Teletype NY 1-Mt

(Representative)

BOSTON

Troy

Colony

Paid-Up

other
the

Reserve
The

Fund

£4,000,000
£2,000,000
£2,200,000

conducts every description
banking and exchange .business

Bank

Trusteeships and Executorships
also undertaken ; v r*

seller

Stock

INDEX

Exchange,

knows

even

index of

detailed

For

contents

see

page

the

2883

party to the transaction. In
of sale of stock at market,
merely ascertained what is

case

the

highest
Stock

bid

the floor

Exchange

for

the

State and

Municipal
■M

Bond Department

THE NATIONAL CITY BANK BART SMITH & CO.

York 5

Buffalo
Syracuse
Washington, D. C.
Wilkes-Barre
New Haven
Woonsocket
Scranton

OF NEW YORK

New York Security Dealers Assn.
52

WILLIAM

HAnover 2-0680

ST., N. Y.

Bell Teletype NY

Bond Dept. Teletype: NY 1-708

THE CHASE

Members

Air Products,

FINANCE

NATIONAL; BANK

1-395
OF

Toronto

Montreal

New York

Class A Stock

MARKETS
s»

Bought
v

;

>■.

Members N. Y.

REctor

2-3600

Members

New York 5

120
-

Teletype N.Y. 1-676

Philadelphia

FFX;

THE

CITY OF NEW YORK

—

Sold

—

Quoted
1

•

•'

Telephone:

A Enterprise 6016

New

Broadway, New York S, N. Y.

NY 1-635

;

Exchange,

York Curb Exchange

30 Broad St.

REctor 2-8600
:

Values

Hardy & Co.

: Bell Teletype:

Appraisal of

and Dealers

Members New

available upon request

■."

Members New York Stock

England

Public Service Co.

Service

request

York Stock

Telephone:

New

Brokerage

for Banks, Brokers

Reynolds & Exchange
Co.

Security Dealers Ass'n.

45 Nassau Street
Tel.

xv.

Company

INCORPORATED

Prospectus

Bond

Gearhart

Inc.

Common Stock

SECONDARY

India, Burma, Ceylon, Kenya
and Aden and Zanzibar

Capital

stock

MUNICIPAL

AND

Dallas

LIMITED

to the

Subscribed Capital

■'^X/:/F- X

Albany

Branches

1927

CORPORATE

Office: 26, Bishopsgate,
London, E. C. •

Head

Government in
Kenya Colony and Uganda

Bankers

Dr. Cumberland's paper. Port
appeared on cover page of the
28. s ; \ ;

"Chronicle" of Nov.

BONDS

PHILADELPHIA

Baltimore

NATIONAL BANE
of INDIA,

concluding instalment

Bonds X

SECURITIES

64 Wall Straat, New

Pittsburgh
Springfield

London

Cleveland.

Chicago

York

the

request

•

York Stock Exchange

New

Members

the

case

R. H. Johnson & Co.

LILIENTHAL A CO.

£5 Broad St., New

STATE

the market.

COMMON STOCK

Analysis

Successors to

HIRSCH,

Extension

the

nor

(Continued on page 2908)

GULF, MOBILE F
.

•

The seller

either

price obtains the stock. No favor¬
ites are played. Neither the buyer

Vacuum Concrete

stock

and the first broker who bids that

*An address by Dr. Edwards before the Massachusetts University
Course, "Investing in Stocks and Bonds," Boston, Mass., Nov. 20, 1946.

New

the

in years.

ber when the stock market had one of the severest declines

(Continued on page 2905)

desiring to buy
they know

Foregoing

Note:

*Editor's
second and

question is offered on the floor of

Dr. Wm. Edwards

The initial winds reached hur¬

former

the

Warnings have been published aplenty so that
are on the alert for a possible
severe

ricane

his

fixed price or at

investors

economic storm.

offer

can

opportunities."

■'

that

Motors

about his wish to sell.

ing ex-confidence, the hunting season is here for
those desiring good investment

-r-'-X F ■

Obviously, it is to his inter¬

est for all persons

(1) large pent-up demand; (2) return of competi¬
tion; and (3) favorable change in political think¬
ing.
Regarding the future of common stock prices,
he hence concludes that as equities are now "sell¬

one

buyer alike.
;
>:
Both buyer and seller are inter¬
>4
ested in a broad market, where ;
buyers and sellers are numerous
and
accurately
informed
and
where there is little change in #V.

own¬

of ii FIDO

shares of Gen¬

1937.

Affirmative

suggest a procedure which is more
democratic and which better pro¬
tects the interests of seller and

are entirely different from 1919, eral
Motors
Commodity situation is not un^
*
lives in Den¬
ver
and -for
healthy, further reasonable price declines being
reasons
satisbeneficial.' Inventories are not dangerous, particu¬
factory to
larly because of fonsumers' durable giods short¬
Utilise
himself
deages.
Previous foreign trade obstacles are now
cides to effect

absent.

been able

ceives.

or¬

has

in¬

tions.

lots,

are

volved

Money and credit conditions

and

1929

which

para¬

dinary;; opera¬

V ' V*'

By BB- WILLIAM F. EDWARDS*

Dr. Edwards maintains forces that caused previous depressions are now
absent.

100

assuming 100
share trading units, and this max¬
imum price is what the seller re¬

other;;

phernalia and
personnel

What Should the
/ <'

amount of stock offered for sale or

t he

and

ers

New York 4

Tel. DIgby 4-7800

Tele. NY 1-733

ira haupt & co.
York Stock Exchange
Principal Exchanges^-"

Members New
and
111

other

10Post Office Sq.
Boston 9

Broadway

New York 6
REctor

2-3100

cX '

Tele. NY 1-2708
Direct

Private

Hancock 3750
j

Wire to Boston

THE COMMERCIAL &

2882

Trading Markets in:

FINANCIAL CHRONICLE

Is the Price of Gold Too Low?

Chic. & Southern Air

Europe's Future in Our Hands

Standard G & E Com.

7ri"By

Mid-Continent Air

Prospectus

*With

KING & KING

7':

SECURITIES CORP. •
Established 1920
Dealers Assn.
Nat'l Ass'n of Securities Dealers, Ino.
,

Members N, Y. Security

WY 1-423

BXXilj TBLBTYFB

During recent weeks there has been in Britain a,growing volume
agitation in favor of an all-round increase of the official price of
gold
in
all <S>—
;■ ■
7
•
■ 7
—:
countries is expected to continue, owing to
the
political and economic un¬
represented
on
the Inter- certainty in the East and in Eur¬
national ope. The causes for the decline of
Mo neta ry the output during the* war-—lack
W:- "^1:

Automatic

Government

Coal

7;'.,5vi Common; & Preferred 7

Standard Screw
*

Memorandum

pro¬

clause

the
the

Bretton

;

Broadway, N. Y. 5
WOrth 2-4230
'

120

The reason

1-1227

Teletype

change.

Bell

" . -7
for this movement
-

is the evidence of the

ing

rapidly ris¬

not

South Africa. It is feared that

only will rise of wages and other
profits on hold¬

cost items reduce

Hathaway Bakeries
v

New, When Issued

Rogers Peet
Common

Preferred

3/6s,1956.^:7:0-^777-

Savoy Plaza

Class

"A"

of view of the
world's gold position,
7 ■ 1 - 7 It is pointed out that during the
war
the
netincrease
of the
the

from

point

world's; monetary

Vanderhoef & Robinsoi
New

Members

York Curb Exchange

31 Nassau Street, New York
Telephone
Bell System

have divorced their credit struc¬
ture from their
the

stock

of; gold

rather less than
1 % 7 per
annum, which falls considerably
was

short of the prewar

increase. The
of the inadequate increase

cause

COrtlandt 7-4070
Teletype NY 1-1548

curtailment of
the putput and in part the revival
bf hoarding demand in (he East
and elsewhere. Hoarding demand
in

was),

part

gold reserve. But
of a substantial

possibility

dred thousand

which

gold requirements

international

for.

Common

Stock

70-;

owing to the • unbalanced
of foreign r trade. There are
likely to be large adverse balrstate

cific

York 5

20 Pine Street, New

they

might

a n

c a p

credits

Telephone:
Bell

WHitehall 3-1223

Teletype

New

1-1843

120
V

;

York

Curb

Exchange

achieved

BROADWAY, NEW YORK 5 (
i. Tel. REctor 2-7815
77 ;7
•

7.7

]

•

Department
maintained

placement

for the

large

blocks

.
.

•;

•

STeeTxecmiCampauvj
Members

37 Wall St.,
Bell

Security Dealers Assn.

Hanover 2-4850
1-1126 & 1127

N. Y. 5

Teletypes—NY

/Direct wires to

Birmingham Electric

'77!

Scran ton Elec. Com.

normal

conditions

are

hat

Edward A. Purcell & Co.
Members New York Stock Exchange;

labor camps and were never ac¬

tually taught
could adapt

areas

skill which they
to rebuilding the

; Members New York Curb Exchange
50 Broadway WHitehall 4-8120
Bell System Teletype NY 1-1019
'
„

New

115 BROADWAY

NEW

77;.

Principal Exchanges 7
YORK 6, N. Yi
"
..

7>TraDscript of ari extemporane¬
ous

talk

Teletype NY 1-672 7

by Dr. gLubin ^before
Marketing Association,
,

City, November 37,
1946. 7-.,7^';77:77;:-7',' >7 ;:;:7 ,7■

New

York

Common

'•»

7:7; Common Stock

(Va.)

Tudor City Units

Frank C. Masterson & Co.
Members New

York Curb Exchange

NEW YORK 5

64 WALL ST.

Teletype NY 1-1140

HAnover 2-9470

Jim
■U:
7

•

7 '7

for
/77''(7;7;7V.,7:...

Haytian Corp.

Punta fllegre

7.• 7 •' v.,.;

Common,

Trading Market
^Prospectus

■',77■•,7-:7'7V., ;;7
BOUGHT

request

7777*'.

;

Members
New

Neva

120

York

Neva
Curb

York

York Coffee

WALL

Stock Exchange
Assoc. Member

Exch.

& Sugar Exchange

ST.,

NEW

YORK

TEL. HANOVER 2-9612

-»

g0.7«,

• 77 '■;:7.;;-; Vv77/.{

SOLD

—

QUOTED

■7'V;7v.;

•

J'G'White 6 Company

Member New York Security Dealers Association

INCORPORATED

H Trinity Place, New York 6, N. Y.
•

Teletype 1-376-377-378

Private Wires to Buffalo—Cleveland—-Detroit—Pittsburgh—St. Louis

Lady of

Victory Church
A

the

War

Memorial

Financial

District

770v7'.g

Troster, Currie & Summers
Telephone HAnover 2-2400

Our

•
■

FARR & CO.

..<7

Company of Indiana

1
-

Public Service

"Consumers Power Co.

Sugar

Quotations Upon Request

Banks, Brokers & Dealers 7:;7-77777%^,077

37 WALL

STREET

•

Tel. HAnover 2-9300

Your Contribution is

Earnestly

Solicited for the Building Fund

NEW YORK 5

ESTABLISHED 1890

Tele. NY 1-1815

Aspinook Corp.

England is to sow an acreage
harvest a
crop" next 7 year

America

■

Central States Elec.
77-7'

equal to what she did .this year,

"
;

Members TV. Y. Stock Exchange and Other

777

ing projects, are in agriculture/
•

Southern Colorado Power

proximately three hundred thou¬
sand German prisoners of war.
Virtually all of them, with the ex¬
ception of those who are on hous¬

;

of today, have been

them, even as
killed off.

and

York 4,

in which they live. Many pf
who might have taught

In Great Britain there are ap¬

Goodbody & Co.

officei

Northern Indiana P.S. >

of them had been sent off to slave

■

^ V;

pnr Jbraach

American Gas & Power"

existent at the present time. Many

by allowing producers

Canadian Securities Dep'L

Telephone BArclay 7-0100

New Orleans, La.- Birmingham, Ala.

only

that they would have learned un^

CANADIAN UTILITIES

\;<\;

Central Pub. Util. 5V2s

der

to export their output to the East

Over-the-Counter Stocks and Bonds,

St.f New York 4, N. Y.
HAnover 2-0700
/; NY 1-1557
0

through- five years without any
training. In other words, the skills

CANADIAN MINES

Members New York Stock Exchange

25 Broad

en¬

CANADIAN BANKS

accumulation

Bequest

Thirdly: The younger genera¬
tion of working age lias gone

neces¬

CANADIAN INDUSTRIALS

is not

Europe

protect health.

go to

We Maintain Active Markets in U. S* FUNDS for

"Special Situations"./

Steiner, Rouse & Co.

requirements of shelter that

those

\ Our

Secondly;

mum

international

"(Continued *oii" page * 2892) '

Europe

available to them even the mini¬

this

tion^^through; higher prices is
visaged.
This
end
could

Analysis

hopsing. Those who are alive in
too many instances
have not

sufficiently large inter¬
or

Bought—Sold—Quoted

short of food/Europe is short of

the lyolume

loans

it is esti¬
in

\i f e and sufficient
strength to do a day's work..

of; gold
might
inadequate, and in the ab¬

national

are

maintaining

money

moment,
there

that

1,50.0 calories a day. The
dieticians testify that 2,100 calo¬
ries is a minimum necessary for

cannot
gold.

this

living

the deficit ^coun¬
multilateralism, how¬

gold output decline

ac-

2922)

page

in bad health.

something between fifty and one
hundred million people who are

or^in^the

balance which

any

Manufacturing Co.

More significant is the fact thjat
those who were not killed, a

mated

currencies »of
tries. Under

Rockwell

nourished

would / be

settled either in*goods

day's'work

Isador Lubin

large proportion are either under¬

of. these balance?
would not give rise to gold re¬

quirements,

France claims losses of .close to, a

many

In the circumstances the

fujCflONNELL&fO.

the

million.

sity fpr stimulating gold produc¬

,>7 7 o 7 v/7'7 Members
17r?/7.7/v:
71' New York Stock Exchange
0:7

(Continued

continent it- ~

to be settled in gold.* Under
bilateral and regional currency

pacts

Shortage

ta/rebuild their countries;and

that stand out.
on

sible for people to do a

things

First,

Coal

1 y

is - Europe short of
housing and certain areas of. food
-—sufficient food to make it pos-.

the scene

Europe to¬
day, there are

trade.

H. G. BRIINS & CO.

Not

certain spe¬

ances

prove

;:77,;7777-;^
7;77.
Bought—Sold—Quoted

707V-;-

•in

purposes 7 are

and:

materially,

Airlines

The

looks

one

over

available for such purposes

■/

Wells

Struthers

;

feet/
;

expected to be very high, owing
to the return to multilateral trade

sence

prisoners of wai*,

she is anxious to get rid.
They constitute close to one-third
of the total of agricultural work¬
ers in England
today;
;

people during the war.

States,.

In any case,

Should the

American Overseas

solved

United

will have to be settled with

\"'!"

prob¬

Europe is to
get on her

thjis

be settled with borrowed

Campbell Company

Common & Preferred

the

lems that must

with

Atlantic

the

ever,

"**

.Common Stock

.>■

she miist replace those three hun¬

go on to some

time, and then

sonhe
a elf, m any
concern,
especially as the Re¬ countries have been
partially de¬
publican victory at the election is
pleted of their manpower. Poland,
expected here to strengthen the
for example, claims that she lost
"hard
money,
school"
in the six million
side

the

Byrndun Corporation 77/

In discussing • fhe future economic picture of Europe, it Iwould

gold requirements as a result pf
a further expansion of trade and
on

States current desperate need is for: (1) Importation

raw

be best to starjt with a brief description of what,
Eurcipe is like jat i
the. pre sen

internal

American

of ;

increase

Savoy Plaza
'

ings of Kaffir shares, but it may
even, lead to ,a sharp' fall in -tjie
gold output. Such a fall would be
bad thing, it is claimed, not only
for the British Empire but also

most countries will have

materials, for which credit is needed; (2) determination
of Germany's future; and (3) revival of international trade; Coneludes Europe's ideological, political, and economic futures will
7be determined by American policies.■, 1,..

internal requirements, as fhey

production in higher prices'is Envisaged

of gold

cost

provid¬

ing for such
a
uniform

Paul Einzig

is true,
no

reduce the

output.; even 'below 7 itsrwartihjie
At the same time, gold require-*
ments are expected to be
hi£h. ft

Stock Exchdnge^ ;•

Members Baltimore

costs are expected to

leyel.

applying

;

ment

•

Woods Agree¬

MitclielUCompfliuj

of labor and
equipment •
; no
longer prevails to the same ex¬
tent. On the other hand, rising
„

^recovery.

posal in favor

pressed to

submit

Request

expected to

Kaiser

McEwen &

May,
;

The

Fund.

Fire Alarm

Horn

Elk

of gold.,

HA 2-2773

40axchangeFL,Mr.Y.8

.the: President' ^:;th^7^ited/States:0:;,

Dr. Lubin asserts that, despite "miracles" accomplished since
Reports opposition in Britain to 7 0VV-E Day, Europe is severely suffering from (1) depletion of manr
;[• currency devaluation, but points out a higher price of gold will- -power; (2) shortage -of food and housing; (3) absenee of irain| t enable deficit countries to meet more of then; import surplus from ■ / •ing of younger generation; (4) shortage of transport; and
(5) Jack of coal, whose restitution is indispensable for general,
gold reserves and thus expand international multilateral trade;
•
round increase in price

•

^::7 •

By ISADOR LUBIN*

for the metal throughout

Higgins,Inc*

1
V

•

PAUL EINZIG / •

Noting the declining rate of gold production and rising requirements";/
world, Dr. Einzig sees solution in an all-r

DuMont Lab.*
7'

Thursday, December 5, 1940

JOSEPH

McMANUS & CO,

[Volume 164

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4548

INDEX
.Articles and

Our Outlook at Home

News

£:

Page
. >

Haussman

Our Outlook at-Home—Leon He nd e r son

When Will

28 83

;<hciBea*/^rket::End?^^ohn:H^Lewis^ir%r>^^3,

•

^2884V

French Policy in Germany-—Rene ; Sergent: J- 2:vi::

The Outlook for Business—Paul W. McCracken———_i2884

•'

- v-4
—Cover

Muhlen

What Should the Investor Do Now?—William F. Edwards-Ce^r
Europe's Future in Our Hands—Isador Lubin—_.2882

Norbert

and

t Austria's Future Dependent

U. S. Help

—Herbert M. Bratter_.:iur:^l^

1:___:_2885

The Public Controls—Arthur

Walsh__J..;—2885
Against Organization of
?;• Bank Employees—Edmour G e r m ai n __ _ _ _____i_ii-_______2886

}.-< Union Official Disputes Argument
.; i'

-4f ----2886
W» Binns_v-2886
Behind the Iron Curtain—George Moorad.L: .2887
Balancing Civilian and Military Educational Needs

•

Wages

■

Tuck^r

Productivity—Rufus

and

A Union of Property. Owners—Arthur

—Francis

Government

do not want to

sciously

—2887

j' -^-Philip Hauser-'

2889

after the' last

Obstacles to Straight Road Ahe^d—Cong. Carl

Lower

Send

2895

your

their

securities.

•

■

Obsolete Securities Dept.

WALL STREET, NEW YORK

Telephone: WHitehall 4-6S51

Offerings Wanted

All

Leon

1Title Company

Henderson
t

the

was

to sell

list.
'

■J

now

men

inactive

con¬

Mortgage Certificates

-1

Pardon me, that was the first in the jseries of
;>fk.::< :i : '■ »'■t

war.

projection has. not been right ; I think I
in warning that it is conceivable that because of'the
continuance of controls and because of the- advance planning for
reconversion, such as the contract termination, plant clearance, tax
Iegisla;ti6n, and other methods, that the reconversion- period may
easily have been distorted out of the pattern of 1919 and 1920, but

-2895

Prices, Not Higher Wages—Harold G. Moulton

good

and

obsolete

GOLDWATER, FRANK & OGDEN
39

So far that method of.

Hinshaw—..2894

Oil Production Outlook—Eugene Holman

wars.

ought to ■

____2891

Christmas Shopping Advice—Roger W. Babson

all

for

time

Meany ,.:___--u-._-.^^_._--:2&9I
Industry Can Pay Higher Wages—-Walter Reuther
__2891

MAMA
Papa—that

—telling

ride down too much

Teamwork in%Industry—George;

;

REMEMBER

A sizable portion of economic guessing is pure almanacking.
The popular pastime now is attempting to recapture what
happened

"last
-

decry

libidinous zodiac.

—i - - .u JS888:

Dangers of Restrictive. Labor Legislation—William Greern
Labor arid Management Must Bury Hatchet
;
.
' >
:

llCHTtllSTEIfl

B. S.

•

almanac.

Business—W. Averell Harriman

and

outlines

subconsciously, everyone needs an
Now, there are plain and fancy'-■al¬
manacs'.
The: good ones pay attention to the
cycles of weather and of crops as well as to the i

Brown

Making; Labor Legislation. Work^Lewis B. Schwellehbach 2888
The Coal Strike's Impact at Home and- Abroad
[ ;, *•* -

Administrator

Price

the almanac method of forecasting because,

.•

possible course of
events next year: (1) a temporary increase in activity, reaching perhaps
10% in dollar volume; (2) a climatic gyration in
prices; (3) continuing inventory accumulation;
(4) a gap between prices and consumers' buying
power; and (5) a subsequent period of orice and
inventory readjustment, whose depth will be meas¬
ured by political influences. Doubts important bud¬
get or tax reduction.
Mr. Henderson holds crucial
determinants will be (a) the quality of planning to
avoid :"boom-and-bust";
and (b) our Federal
budgetary management.
■

German-American Trade Getting* Under Way—Frederick

;

Federal

Former

ing Instalment)—W. W. Cumberland:^—»---Cover
'

By LEON HENDERSON*

and company

Stock Exchange Functions and Over-Regulation (Conclud-

■;i

2883

Broadway, New York, N. Y.

HAnover 2-8970

say

Teletype NY 1-1203

Member

'•

•,! New York Security Dealers Assn.
'

National Assn. of Security Dealers, Ino.

Dangers of Centralized Big Government—David

Economic

American Industry Supports Worldwide
'*;

Lilifcnthal 2897

Freedom—Herbert H.

•

^Transcript, of extemporaneous talk by., Mr.. Henderson before
American Marketing Association, New York, City, Nov. 27,, 1946.

".
:w^2899:£

(Continued

on page

2911)

Slromberg

Production Outlook for Automobile Industryr

Carlson

.2899

e.' Hutchirison

J3.

When Will The Bear Market End?

WorIdf Bink ->:----_-----.--~-.-----2884
/ Reports More Optimism Among Purchasing Agents
I —George E. Price, Jr,
-—-^—2887
I. Britain and U, S. Split on Fund Parities
1™--.
2888
Eugene Meyer Quits

Steel Priorities to Be Abolished

ing mainly from unbalance in price structure and squeeze
goods like automobiles and housing.f As tbis ' •

will

} —J. Stewart Baker

2889

—

int'l Fund Official Satisfied with'ITO
,;/ v'

,The

Charges

Listed Companies Must

Securities

Canadian.

Dealer-Broker Investment
Recommendations

.2903

"Municipal News and Notes......

2896
2892
Observations—A. Wilfred May...2885
Our Reporter on Governments.. .2901

Mutual

Funds

Notes

NSTA
"

Securities

Salesman's

Securities

Now

;..

Corner

2892

Y.,

♦;........... .2926

under

the

Act

Subscription

WILLIAM B. DANA

Subscriptions
in
United States,
U.
Territories
and Members

COMPANY, Publisher?
York 8, N. Y.

25 Park Place, New

Rates

Pan-American

Union,

Dominion

Canada,

Other

Countries,

$26.00

per

$29.00

-WILLIAM

DANA

Editor & Publisher

SEIBERT,

Bank

President

WILLIAM D. RIGGS, Business

Monthly

and every Monday

issue)

•rertising

plete statistical issue — market
records, corporation news, bank
vtate and city news, etc.) •

•/o Edwards &

(com¬

quotation
clearings,

shall

Earnings

Record

—

state

;

■

opinion

present

John

Lewis

Hiriod

at once.

by Mr. Lewis before The Bond

System

2-0300

Teletype NY 1-84

Haytian Corporation
Punta

interested in

are

offerings of

Alegre Sugar
Sugar Assoc.

Commodore Hotel

High Grade Public Utility and Industrial

(Foreign postage extra.)

*Fidelity Electric

Macfadden Pubs.

Susquehanna Mills
•Prospectus on request

Spencer Trask & Co.

25 Broad

Members; New

York

Curb Exchange

135 S. La Salle St.,

Street, New York 4

Tel.:

Plymouth Cordage
1 Sport Products
Sprague Electric
Grinnell Corp.

Co.

Class A Common Stock

PREFERRED STOCKS

Lea Fabrics
U. S. Sugar

HAnover 2-4300

Chicago 3

i'Tel.i -'Andover 4690

Teletype—NYxl-5
Albany

•

Glens Falls

Boston

DUNNE & CO.
Members New York Security Dealers Assn.

25 Broad St., New York 4, N. Y.
WHitehall 3-0272—Teletype NY 1-956

Reentered as second-class matter Febru¬
25, 1942, at the post office at New

to. INC,
WOrth

Broadway
Bell

Buffalo,

Club,

rrra1

Members New York Security Dealers Asen.

170

;

Members New York Stock:Exchange

ary

Company

National Shirt Shops

Eastern

Company.

Corp.

Billings & Spencer

(Continued on page 2910)

che rate of exchange, remittances for for¬
eign subscriptions and advertisements must
be made in New York funds. *• t v. *
'

Smith.

address

^-.I

Monthly,

Note-r-On account of the fluctuations

0613); 1
England,

National

Y., Nov. 18, 1946.

135 S. La Salle St., Chi¬

Other Offices:

3, 111.
(Telephone: State
Drapers' Gardens, London, E. C.,

sago

at the very bottom
for practical reasons

Quotation Record—Monthly,
year.
(Foreign postage extra.)

$25.00 per year.g

Thiokol

bear

Publications

and

$25.00 per

Manager

Thursday, December 5, 1946 "Every Thursday (general news and ad-

•-

$33.00 per year.

Other

the

year.

REctor 2-9570 to 957ft
8BERBERT D. SEIBERT,

end

Investment Trust should

year;

per

the
an

Possessions,

*An

Match

COMMERCIAL and
FINANCIAL CHRONICLE
Reg. U, S. Patent Office :
The

toward

posible,

1947.

or third quarter of
Obviously such a conclusion is based on certain assumptions.
If these prove wrong, then doubtless I will change my ideas. 'No one
can look too far ahead under present conditions when Governmental

2902

Registration. .2928
Tomorrow's Markets (Walter
<
*,

TRADING MARKETS

I
believe this bear market will end in the second

^Whyte Says) ■

Market

The End of the Bear Market
I

.............2894

Estate Securities^

■Real

York,

Published Twice WeeWj

.2882

Railroad

Bear

Trust

Prospective Security Offerings. .2934
Public Utility Securities
....2888

2890

the

a bear market.
that I have been
trying for some weeks to outline in my mind the
background. or
possible
developments A which
would
signal the beginning of the next bull
market.
The difficulties are very great.

Our Reporter's Report
....2935
Kinzig—la the Price of Gold Too
Low?

Will

be started

Page

2898
2898
2900

Chicago

third quarter

fnent

Notify Exchange of Proposed Divs-2923

Stocks
Bookshelf

New York

tremendously. >. For several
I have hoped that I might form an Invest-

Business Man's

"When

interests

market.

Regular Features
Bank and Insurance

Reilly & Co., inc.

years

2900

FBI'Help

question

Ends?"

——2897 r
Wall St Dominated Government-^A. F.tWhitney->2900

Unauthorized Holders V—i——

Nat'l Advisory "Council Enlists

Request

of 1947.

——2897

:—-

Dollar Script Inconvertible for

U. S. Forces Annonnces

against

occur

the bear market short in the second

^--———2895

CIO's Wage Policy

J. F.

background of depreciating
dollar, anticipation of intensified inflation will cut

Unionization of Bank Employees Against

on. consumer

Conscription
—2889
Public Interest ;

Opposes Peacetime Military

CIO

Preferred

Prospectus

Market analyst expects, substantial business v decline next year, result¬

2888

—;>——

Common

By JOHN H. LEWIS*

Schenectady

Private

Worcester

Wire

Boston

,T,

TTTLE COMPANY

CERTIFICATES
Bon4 & Mtge, Guar. Co.

;

Lawyers Title & Guar. Co.
N. Y. Title & Mtge.

Co."

Prudence Co.

Members

INC.
N.

Broadway

Member* New

York Stock Exchange

15 Broad St, N.Y. 5
IS ell

WHitehal! 4-6330

Teletype NY 1-2033

■

.,.

Bottling Co. of Chicago
Coca-Cola Bottling Co. of Los Angeles €
Coca-Cola

Red Rock

-v

6^1968 :
v

Teletype NY 1-832, 834

"Public National Bank
•-

Bottlers, Inc. (Atlanta)

ESTABLISHED

Harrison 2071

Teletype CO 129

& Trust Co.

Analysis

upon

Request

HonRssESteim

CHICAGO 4
*

Bottling Co.

Board of Trade Bldg.

"NEW YORK 4

Macfadden

Publications, Inc.

Security Dealers Assn

DIgby 4-8640

Newburger, Loeb & Co.

V ga®

Bottling Co. of St. Louis

Panama

STRAUSS BROS.
.

Coca-Cola

Coca-Cola
.

Lawyers Mortgage Co.

Coca-Cola Bottling Co. of New York

C. E. Unterberg &

Specialists in Soft Drink Stocks

'v,

1914

'jy

Members

Security Dealers

Co.
Ass'n

Direct Wire Service

Trinity Place, New York 6, N. Y.

Vew

York—Chicago—St. Lotm
City—Los AngeJea.

Kansas

Telephone:

BOwling Green 9-7400

; -,

■
,

Teletypes:
NY 1-375

—

NY 1-2751

Broadway, New York 6, N. Y.
Telephone BOwling. -Green 9-3568

Teletype NY 1-1668

2884

THE COMMERCIAL & FINANCIAL CHRONICLE

•

;f/i
•ar»r

f?>I!"/,xmr}w

■

*\ 1

Thursday, December 5,
*

i ^h

Xfi2$M

1946

i'1'W "t

W\ltl» & CO

;p||f|:f;p'ff.

By RENE SERGENT

WASHINGTON^

f' Director, French Economic and Financial Peiej
If ,fffPfirp to Allied Cojntr'ol Council, Berlin ^
■.

1926

T
,,
D, C- Dec.- 4-r-Eugene MeJer,iPresidien,t of the
International Bank, for, Reconstruction and
Development, todav artbounced.his resignation from that office, It is believed here
that the
primary reason for Mr. Meyer's action is the recently
growing schism
between him and the Executive Directors over who should set
policy:

■

-f-fap

French authority maintains, despite charges to contrary, Franceafter early hesitaiicy---has wholeheartedly fulfilled London Agree¬
ments

he himself as Presiderit

Articles 'of In-

Allied, Control Jn .Germany.. States that . French, in con¬
tradistinction, .(o Americans, ^ opposed tp; trusts ra^er; than
cartels.
While Americans treat Germans with mixture of lavish-

Abitibi'Pdww

;

against dangerous. potentialities of Germany economy*

Com.

•:

■

■,

corporation

xnot^obd' fbF
prestige

Its officials are
in^line^vtd, attrib¬
ute 1 the Wisconsin
decision

"as

the^dgentfor i
carrying

Directors.'

To^a^j^e Jink's publicity has
been; ^channeled almost
entirely
through^its' Resident, Mr. Eugene
Meyer, Bank employees naturally

Addition-'
France as an Obstructing Factor in the Work off .the Control p,

Council andin the Path of "German Unification•

Barcal® Mfg. Co.*
::,
5

^Diebpldlnc.*?
j; 1 District Tbeatrest

control

..Missouri Pac.
^

|| ' Mohawk Rubber*
Moxie'MmM

N.Y. New Hav. & Hart
■

•

Germany, *< From 'the

the negotiations of
Coun'cil, whatever
practical difficulties may have
been encountered during the or¬
ganization period.
.

French

mittees

f Old PfdL.fUT: f

Purolator Prod.*plf
Richardson Co. fjip
Taylor-Wharton*

have

delegates
in the

been

numerous

com¬

the

quadripartite ma¬
chinery, even more assiduous, on
the whole, than some of their col¬
leagues representing the three
other occupying nations.
>.?' • * <

available

Michigan Chemical
Minn.; & Ontario Paper

If c- ~

Allied

agreements! on

active part in
Control

t| Majestic Radio & Tel.

i
les^

| shortcomings
of p the
French may well have been no¬
ticed in the early days, when pre¬
liminary studies of German eco¬
nomics were definitely better im¬
plemented in the American and
British elements; one should re¬
o m e

valuable contribution to the work
of the Control Council.

One should

\ '

merely^ mention, at

without

preliminary efforts to
convince allied colleagues .of the
moment and urgency of this task.
Such features of French activi¬

ties in; Berlin may be considered

negative. It should be remem¬
bered, therefore, that France took
also an active and positive part in
several attempts to rebuild Ger¬
man economy on same and over¬
member the circumstances under
all principles, i. e. fertilizer proc¬
which the French undertook hur¬
riedly to gather their control essing and allocation throughout
staff for Germany, even before Germany, in the fall of 1945 and
once
again in the last weeks;
their own territory was entirely
liberated and lacking the experi¬
(Continued on page. 2921)
as

| U. S. Air, Conditioning

*Hungerford Plastics

*Metal Forming Corp.

*Dumont Electric

United Drill & Tool "B"

Vacuum Concrete

Mr.

that

Meyer's

are ,restricted in what
they /may
disclose to the press. And even the
Bank's directors speak"

withdrawal is
based

two

other grounds:,
the
unstable

tion

Meyer

Eugene

this

country has forestalled plans for
extending
credits
for
goods
abroad; and the extreme apathy
shown

American | public

the

towards

cautiously
•.If
5, Mr. Mqyer an¬
nounced the appointment of ; Mr.
Drew Dudley asiDirector, of:In¬
formation, Mr. Dudley, who at 36
in public.
I";
On November

price and pro¬
duction situa¬

the' Bank

indicates" tlie

prospective lack of future United
States support for the institutioh.

and

perhaps
dresses, such
week

gaged in publicity work for the
Office of War Mobilization and

Reconversion
War

before

Investment

the

wit h

was

a-! ■ well-known :K

Chicago chewing-guiri company;'
The cautiousness of the Bank's ;

directors in speaking for publica¬
tion is more than ever noticeable
since the experience of Mr. J. W.

Africa
dressed

October, when he ad¬
Savings Bank Asso¬

the

ciation of the State of New York |
1 a t e r answered reporters'

and

; Last, week's announcement by
the Wisconsin Banking Commis¬

investment by banks

that State in securities of the

questions. Mr. Beyen's disclosures i
of Bank thinking were widely re- >
ported in the press, and prpmptly
r

(Continued

page

2927)

rriT

The Outlook for Business
-'
(

•

By PAUL W. McCRACKEN*

Director of Research, Federal Reserve Bank of Minneapolis "

Reserve Bank analyst ascribes

lack of deflationary tr^nd; after
V:J Day to hea|ry consumer spending, kut warns change may come
about through ippre rapid reconversion and accumulation of inyenp
tories. As indications of changing trend, cites stock market, break,
decline in farm prices, and baffling problems of industrial relations.
Sees increas:ed productivity ahead and holds no, serious recession
is likely as long as heavy rdemand for durables is, unsatisfied.

■

Looks for further

*Prospsctue Available

'
I

price^ rise in immediate future, followed late|

by downward trend.

■

the; Office

public ad» Beyen, executive director for Hol¬
the one made this land and the Union of South

be expected.;

and

Information; arid earlier

Bankers' Assocation by the Bank's
American executive director, may

sion banning

is drawing the reported
pre-tax
equivalent of $20,000 a year in his
new post, was
during the warlen- !

connected

i; The World Bank, it may be
noted, is conscious of the need for
better public relations and
ex¬
pects to do something about it
soon. The use of printed literature

fDistrict Theatres

un¬

derstood

Upson Corp.*,,.

random, the discussions on the
plan'; for ; the level of industry,
when the French helped to com¬
promise the somewhat conflicting
views of their colleagues; other
discussions, still pending, on decartilization, when the French is¬
sued definite and 'practical pro¬
posals on which agreement has
been reached; French provisions
on
disarmament
and
warplant
dismantling, which were accepted
almost without discussion if not

Tenn. Products

•

very beginning, she has taken an

Lanova*

j;f ; ^

circle^ more

disrupt all

the

HartfordrEmpire Co.*

Pfdl

useless to dWell on this

seems

London

|| Gt. Amer;1 Industries

IflPPPS

best

latter grievance: France has" ful¬
filled
the' implications
bf '■ the

Expreso Aereo |
General Machinery

Higgins Inc.

their

flip; Douglas Shoe*'

Old

to prevail in American

seems

Headquarters that the French jdelegation. there
ef-<8>J
•
•
forts made towards settling over¬ ence' acquired *in| 3.H.A.E.F. by'
all policies in Germany, or even their American and British col¬
have made it impossible to pur¬ leagues. That period has, anyhow
been overlapped [and-the French
sue the quadripartite activities of
element has actually; brought a
the Control Council,
■:
did

ChicagoiRi I. & Pac.

The opinion

connected with Berlin

Cinecolor

•

ally, it is

of; (he} ;r\ew; ihstiitutioh.

pri¬
marily to ignorance, Whi6h proper
PMblicity would dispel/•
ft;

out:

thq will of the .

]Pfd.

Automatic Instrument

the I

def.ine th\e

;

recalled that the
I
>

President

French treat jhenai with caiition. learns

and complacency,

ness

Amer. Window Glass
,

prfhe Direetors. ;It will, be
*.. \ |
;; •'<»>'.
-T-

„

The Northwest's "1946 income will approach $5 billions. This is
more than 10% above last year and double 1940's $2.5 billions.
T h i s p e r -<$>.

Alabama Mills*
Aspinook Corp.* '
N. J. Worsted, New

;
■

Members New

York

Tel. HAnover 2-8080

volume

equals, and for

Teletype NY 1-2425

lormance

New York 5, N. Y.

some

above the prewar average.
Retail trade, perhaps the

that

New England P. S. Com.

Bought

Sold

2%% Convertible Debentures
Due December 16,
r

Southwest Natural Gas

Circular

upon

22 East 40th

Earnings past three-years about $2.40 annually.
share. .Today's

120 BROADWAY, N. Y. S
REctor 2-8700

"market 'QVz-^-io

Capital Records

;

Aeronca Aircraft

U. S. Finishing Com. & Pfd.

the

•Hovlng Corp.

I/■

Net current asset value (Dec. 81, .1945) $12.80
per

by the Federal Reserve Bank of
Minneapolis, Minneapolis, Minn.,
Nov. 22, 1947.

OSGOOD COMPANY

1926

delivered

Federal Reserve Forum sponsored

Teletype: NY 1-2948

request

PUiP'
Members N. V. Security Dealers Asstt,
♦

Street, New York 16, N. Y.

Telephone: LExington 2-7300 '

request

[

^Prospectus on request

Direct Wires To
Chicago. Phila. & Los Angeles

above last year.,

Incorporated

ENTERPRISE PHONES

.irV

;

One

Established 1908

conclusion

seems

clear.

V-J Day's sixty-four-dollar ques¬
tion has apparently been answered

conclusively, and prosperity was
given the nod. This question, you
will recall, was: Will deflation
and unemployment be our major
problem
during the transition
year? History has now apparently
cast
a
negative vote. Contrary
predictions were bad guesses. On
the other hand, it is wise to pass
judgmenb f»on these predictions
with considerable humility. While
it is always true that
that

predictions

difficult, it is certainly true
at the time of

siderable

J.K.RIce,Jr.&Co.

Seligman, Lubetkin & Co.

optimistic

N. Y. 1-1286-1287-1288
,

best
single index of consumers' will¬
ingness to spend, is running, for
our area, one-third above a year
ago and for the nation one-fourth

are

Circular upon

production! is || 80%

Corporation
address

;

Unemployment at no time dur^
ing the previous year has been a
year will push serious
problem with /February
beyond 1945's and March of this year recording
impressive the
peak of 2.7 million unem-.
total of $160
ployed; currently the figure is at
billion
by a least 20% below the high early
few percent¬ this
year,
*
age points.
Our current

*An

WARD& CO.
EST

McCracicen

this

ESTABLISHED 1927

Standard Gas Elec.
• Bulletin

: *

Paul

Central National

Spec; Part.

f Prospectus Upon Request

1961

Delivery when issue#

pay¬

ments

Subscription Rights
.

Southeastern Corp.

I}'

tionally in¬

Quoted

American Telephone & Telegraph Co.

Na¬

come

Scranton Elec.
/

the
as

whole,

f Paget S'nd P. & E. Com.
••

our

for

nation

Com.
Derby Gas & EIec. f

states, exceeds

mmmmmmmmmrnrnrnm

Cent States Elec.,

Seourity Dealers Association

Wall Street

Textron Wrnts. & Pfd.

■

FIRST COLONY CORPORATION

V-J Day

guess required a con¬
measure
of omiscience

and faith.

Our transitional

problems were

Hartf'd 6111

Buff. 6024

Bob. 2100

Broad Street, New

Members New York Security Dealers Association

:■

York 4

Members

,Si.vi/

.i J.

1 ;> V

Security Dealers Assn.

REctor 2-4500—120

HAnover 2-2100

Bell System Teletype

Broadway
N. Y. 1-714

enormous.

substantial num*!

We did. have

(Continued on page 2912)
*

i. »
I

»« *•

«•

•-

<•'«>..

......

m,'

Volume
1,1

164

* *»-

-1

Number 4548;
' *

-r

f'»

!*»♦

;

asserts' Austria's

•'QiiT

THE COMMERCIAL & FINANCIAL; CHRONICLE

i;,j:

Street,

v,r;

•

The. recent declaration by the Treasury of

amount

financial

were inherent in the dividend-stimu¬
lating Undistributed Profits Tax of 1936-1939.
The enabling provision is Section 102 of the
present Revenue Act, which imposes on "un¬
reasonably" retained earnings a tax of 27%%
on the first $100,000 and 38Vi2% on the remainder.

tures, which

coming from

visory Council has not yet acted
on
Austria's application for- an
Export-Import Bank loan, in

America.

connection with which

Such

sene

aid

forth¬

needed for processing the

than

a
loan,
loan, too,
is among the
objects of

Count

;

Bratter

many

servant

the

running short in-the
inflationary tenden¬

value

of points.

cies in Austria and efforts to at¬

main

Pressures

the

sorts.

the part of Austria of political

abandonment

tain healthy economic conditions.
Pressure
on
the
monetary and

loss

price controls have not lessened

schilling are of
First, the short¬

of goods, and second the fear

age

between

race

number

two
is

Time

significant degree, and
weaknesses have developed

tending to raise prices and lower

-v

coon.':

and of

independence

(Continued

complete

of action.

2925)

page

TkelPublic Controls
Vice-President,

ever

Wilfred

Thomas

started to percolate through
even

/ V •- •;, :/

Edison,

to Wash¬

and

over

our

entire financial system.

the purpose of

curtailing the
production of
" civilian goods
I perhaps Mid
h

:not

a v e

army moves

did

the

Voter

its stom¬

lads

were

period
jective

was

Net Income

4,832

1,480
4,040
4,655

3,222
3,841

1939

1940

The

Walsh

current cash dividend disbursements

Impact

Napoleon

tionship to

our

unbusinesslike, and inequitable lack of
(Continued

proper

page

business, and

page

2916)

our

Public

Domestic, Canadian
.

;

kS*

provision for debt

Cement

Preferred

•*.

re-

2922)

Bought

—

Sold

Quoted

—

Tel. WHitehall 4-6430

" Tele. NY 1-2500

STOKER 60., INC.
Common
1946 Dividend

Public Service

Apparently
t

$3 annual basis, plus

//v*i:
1

Payments

'V/a'"•;.•;;•
.♦
..
'•

extra if

1 "

•

Company of

2
-

warranted.

Indiana, Inc.

;-W |

'• \;."i•■'.'m'v .i.'"'.

•••

-v-

•;»

•

G. A. Saxton &

'•>,

Common Stock

Co., Inc.

Street, New York 5, N. Y.

Our

Teletype NY 1-609

a n a

I y 8 i s dated

December 4, .1946 will
be sent upon

Municipal

request.

Railroad, Industrial

;Specialists in ifi'O'V-- ,•>

Uvp.'M.

American Beverage

unscientific,

United States Government

and

■

peter barken

70 Pine

M State

32 Broadway, New York 4, N. Y.

:(• ■'-v

Albert Pick

Nazareth

that present severe abuses to the creditor class will

WHitehall 4-4970

-MM;-'',

national debt structure and overall financial system,

51st Congress of American
Industry, New York City, Dec. 4,

•

American Insulator

.;U-'San Carlos Milling

seen

it will be

In the main, they gave us back
the keys to our own

S/S

considered in. their rela¬

are

75^ December

discovered

Pfd. '•>,

Bell Tel.—NY-1-493 K vr-,

the Debt Structure

5(ty December 28 (Year-end Extra)

suddenly began

Fruit

Com.

our

to call them off.

Mills Corp.

Cotton

Standard

actually exceeded these earnings

dividend-paying practices

our

*An address by Mr. Walsh be¬

Lane

by $10,000 million—or 25%. Aggressive enforcement of section 102
will undoubtedly accentuate tendencies toward such
malpractice. >

5(ty June 1

economic stability

Members New Orleans Stock Exchange

15,963

that controls

D !

New York 4, N. Y.
.New Orleans 12, La.
41 Broad St.
'
Richards Bldg*. Arcade

4,068

1,14,057

sum

essential to

Sulphur

Pfd.

Jonas & Naumburg

75(f September 3

were

Lake

Com.

T. J. FEIBLEMAN & CO.

interested

fore

-or

Galveston Houston

Jefferson

jV;. The Treasury statistics furttier show that all U. S.
corporations
in the 13-year period 1921-1933 earned $40,973 million, while con¬

of elec¬
Washington

November 5.

Toronto

Montreal

Bo. 9-4432

4-yeax total

eve

NY 1-395

(in millions of dollars)

3,872

porterhouse than in

(Continued

1946.

Hew York

HAnover 2-09M

N. Y. 5

Bell Teletype

1938

50f March 1;;

production — so
decontrolled
meat.

ago

Dividends Paid

convincing. No appreciably
change in our national economy
had
suddenly taken./ place, • yet
those who had been contending

such

Washington

J. Years

Arthur

ob¬

stimulate

52 WILLIAM ST.,

premise supporting taxation of reserves is the assump¬
earnings are being unduly withheld from stockholders. But
precisely the contrary is true. Evidence that American corporate
managers, far - from stinting on dividend payments, have over the
short- and long-terms actually been profligate in distributing assets
to shareholders, is contained in official Treasury records. The Statis¬
tics of Income, covering all American corporations for the years
immediately prior to our War participation, show the following com¬
parative earnings and dividend payments: (
1
'
*
MM
<

very

Hydro-Electirc 6s, 1944

HART SMITH & CO.

totals of that day must have been

when

chief

the

locating

cccured

place during

Int'I

The major

perpetuating the House of Porter.
And, Washington was particu¬
larly impressed by the demonstra¬
tion in simple arithmetic which

for

war

1959

Calgary. Power* 5s,v 1960

tion that

only be further aggravated. Even in ordinary times

ican
in

5s,; 1965

Brown Company 5s,

discover that Mr. and Mrs. Amer¬

system
during

1937

tion

created

J the

Abitibi Pr.f& Paper

reform, this tax technique, in arbitrarily hindering the building
of business reserves, acts as an instrument undermining the soundness

ach, but not until the

that

IN,

CANADIAN

\SECURITIES/

;r a

Inc.

defying tfie courts.

that

ington that the
$ war might be

May

Year

effort to
Just before the elecfion, the news

<§>.

MADE

MARKETS

is- highly objectionable as a per¬
proposition,
particularly
so
at
the
present time. Over the long-term-rever since its
/. endorsement by the Senate Finance Committee
in 1917—the proposal to tax accumulated reserves
has fallen between the three stools of corporate
v
reform, revenue, and politics,
r M
;<l

„

A short time ago the Administration finally made, an

get into line with public opinion.

AMERICAN

reserve-

in the statute, but

M Actually .the basic effects, of such taxatiop,
subordinating the policies of corporate managers—who act in
behalf of (the owning stockholders—to the exigencies of, and super¬
vision by, the Treasury,: constitute a basic threat to the soundness
of our corporate and financial structures.
Far from fulfilling a role

Senator, asserting recent elections
prove voters were more interested in locating a porterhouse th?.n
in a perpetual House of Porter, warns there are still on statute f
books many unnecessary business controls. UrgVs these controls
be removed, but warns journey back to unregimented business
will be an uphill pull. Says free enterprise does not mean "every r|
man for himself," but-holds
tampering with system of competitive
enterprise destroys right to make ^ living.; Points out a balanced •
economy cannot be obtained with politicians perpetuating them- ;
with small groups

with

form,

i i

Industrialist and former U. S.

—

has become as¬
Merrill
Lynch,

Pierce, Fenner & Beane, 523 West
Sixth Street. Mr< Boyd .was pre¬
viously with J. A. Hogle & Co.

National Vice-President, National Association of Manufacturers

selves in office

sociated

manent

By ARTHUR WALSH*
Executive

Truman O. Boyd

any

Ministry, who
Is leaving for ' the United States

ANGELES, ? CALIF,;

the

Chronicle)

(Special to The Financial

LOS

of the Finance

;

i^i

Boyd With Merrill Lynch

appli-

the accompanying article.

left

is not fet forth

Exchange,ft

discretionary judgment of Treas¬
ury officials, reviewable by the courts. • < M
•Taxation on undistributed profits, in what¬

As-

von

civil
M.

"unreasonableness"

accumulation

[cation has yet been * received
from Vienna, hut the urgent na¬
ture of the.case is apparent froxrki

Hartenau, top
Herbert

Definition,

Hartenau of the Finance
Ministry recently visited Wash¬
ington. Not all the information

aid, it'is

felt, must in
large part be
a
gift rathei*
but

Dr.

its,intention of strictly

the widespread injuries to our financial and general economic struc¬

Editors Npte: The National Ad¬

small

■f j '

enforcing the Revenue Act's penalties against retention1 of profits
beyond the "reasonable heeds of business'": will revive and accentuate

'7 relative!"

it.'.''

•

staff

the

Angles Stock

Undistributed Profit^ Taxationv

•

VIENNA, AUSTRIA.—According to the best informed opinion
Vienna, Austria can have a bright economic future if only a
!

6F AN UNSOUND TAX'1,

P The False Philosophy Behind

Marshall & Co., 647 Sduth

=By A. WILFRED MAY=
IMMINENT REVIVAL

;
V

and Philippine
i

Mining Issues

|M|g|Dravo t Corp.|||I||||lf

Utility

;BONDS

American Maize: Prod. Col

Investment Stocks

FIRST BOSTON

Common

CORPORATION

R. W.

MAHER & HULSEBOSCH
Broken
..

"■

Investment

62 William St.

Securities

'»

New York 5, N. Y.

Telephone
WHitetaali

Dealers

Branch

Pressprich & Co.

68 William St.

New York 5

Teletype
NY

4-2422

Bought

Members New York Stock

1-2613

Hudson

St., Jersey City, N. J,

Sold

—

Quoted

•

100

'V.

■

*ProspectU8

BROADWAY, NEW YORK 5

request

Telephone REctor 2-2600

Exchange

201 Devonshire St.
v

—

Boston 10

Experience
jor Investors•

CHICAGO''""'.

Facilities
■

"-PITTSBURGH

FREDERIC H. HATCH & CO., INC.

—

Established 1888
Knowledgev

Office
...

113

•

Maxwell,
Spririg
membersof ft the • Los

added

CALIF.
H
Bingham has been

ANGELES,

Elizabeth

<*4ws

(Special to Thb Financial Chronicle)

LOS

shortage of goods and fear of '/.
political abandonment are causing loss of confidence in schilling |
and
developing severe inflationary pressures. Foreign trade efforts j
nave been abortive, accentuated by1 lack of foreign exchange i
assets. Mr. Bratter concludes
balancing of external payments and ■:
ultimate economic
recovery are possible, but prompt American
.1 financial aid is indispensable.
,:%Y.Vv.-^
;>'\*

V.17,1

■

With Maxwell, Marshall |

HERBERT M- BRATTER

Correspondent

•/>

;

stria's Future Dependent
On American Help ii

M;-

,ttifOi?4C*fLT3 IJAJDWAlM

y/T

MEMBERS

N. Y.

SECURITY DEALERS ASSOCIATION

■

63 Wall

Street, New York 5, N. Y.

Bell Teletype NY 1-897

-"''I.

•

PHlCVDELPHIA '

t~.i/-SAN- FRANCISCO

"/. .arid other principal cities ~'

■iilklwilhwilw'i'i

r-ii^ y-^--^^r.-^yi:r,rL.^Tx—

ii..iiwililij.i.v'

7;..77*77.;': 7.7.7'V*777 •«'7''7;^'<v.:7.::;i-y7,7.7:7.-.V'7
i ''.V

■

;

-yv,

■;■■.77

ly':;

■■;■•";.

THE COMMERCIAL & FINANCIAL CHRONICLE

BALTIMORE

Union Official

Monumental

bargaining. United Financial Employees,

hitherto inde-

•

tract with New York Curb

Exchange within

CALVERT ST., BALTIMORE 2

thereby benefits workers
of wages has increased.

few days.

:
-

Just

when

United

BOSTON
Bates Manufacturing Co.
Berkshire Fine Spinning Assoc.

Dwight Manufacturing Co.

Naumkeag Steam Cotton

Parker Appliance Co.
'

•7

Purolator Products \.

vV7'7>::.;'■

Saco Lowell Shops

the

Bank

the

.777777

Warren Brothers Class "C"

Office

Leon W. Berney, UPOWA Vicein charge of the cam¬

Pont, Homsey Co.
street!!!:*'-

31 MILK

BOSTON 9,

MASS.

HANcock 8200

paign

organize

the

financial

community in and: around New
York, went to great pains to re¬
ply to the assertion (see page

unfortunate
tween

N. Y. Telephone CAnal 6-8100

LOS ANGELES

Seaboard Fin.
Common <& Preferred

Walt Disney
Common & Preferred 7

would

there

came

with

agent

whether

total

istence,

and

*Circular

■

OSCAR F. KRAFT & CO.
WEST

530

Walter J. Connolly & Co., Inc.
24 Federal

Tel.

Street, Boston 10

Tel. Hubbard.3790

6th

LOS*ANGEL,ES,
Trinity

2529

Tele.

argument
675

Tele. BS 128

American

Turf

Utah Power &

Ass'n

Secondary Distributions

Girdler

•

Inactive

limited period

they
paid

Rufus S. Tucker

out

the

goods

can

accumulated

part

store

produced.

previously

much is axiomatic.

The big ques¬

tion is whether wages should not
only^ be fiihitMbut measured; by
the volume of
Are wage

production.

earnings,

in any

the

are:,

hired

em¬

sense,

en¬

wage

given plant, corporation

*An address by Dr. Tucker' be¬
fore American Society of Mechan¬

ical

Engineers, New York
.3, 1946.
: 4:^/?

Dec.

Corporation

Murphy Chair Company

77 Franklin

Sugar

™f

Exchange

Liberty

Asserting property rights

77.77 -7,

trols.

ESTABLISHED 1899-

Floor, Kentucky Home Life Bldg.

;

Springfield

LOUISVILLE 2, KENTUCKY 7

Lake City

•

Utah

MllllllllllllllllllliUIIIIIIIIIIIIIIIIIIIII!

Trading Markets

for

Bassett Furniture Ind.

are
responsible for it through
harder, more intelligent or more,
skilled work.. That, however, is

rarely

very

case,

Man hour

Output and Labor
Productivity

"
y

The situation has been obscured

;by the common use of the termsv;,"
^'output per manhour" and "prprs
ductivity of labor" as if ftiey,
were

the

Increases

synonymous.

output

per

manhour

on page

very

2936)

■

STOCKS

7 j

IOWA^

Bell Tele. DM 184

JACKSONVILLE, FLA.
:77 '7*7/7'

*•

rapidly than population, and lays blame for 7

discouragemen^ of construction through rent

con- >

;

are actively associated
tradq associations as your
great association, or in our 7N517
tional Association of RehlTEstaJte77
Boards, or in our National Asso¬

t h

0 n

r o n

these

that

in such

private
rise

enter p

fifteen

last
Established

,'-v:

Scott, Horner &
7 Mason, Inc.
Lynchburg, Va.
Tele. LY 83

;

.4;y!..7

ST. LOUIS

twenty

Members Salt Lake Stock Exchange

v:v; BROKERS'
^ 7*|; 7
Stock Exchange Building 7 ^
Salt Lake City, Utah
;7:

LD 11

J898

W.H. CHILD. INC.

Teletype 8U 67

.illllilllllllllllllllllllllllllllillllllllllh
♦

the

the firing line
in Washington

old—Quoted

♦

being confiscated, Mr.*Binns attacks

who

stood

whole

BUILDING

are

ciation of. Home Builders, are bpt

;

minute drop in the bucket. Fur¬

3.30% Preferred Stock

—♦—♦—•—♦—♦—♦—♦—♦

are not morally en-4 titled to the increase unless tht^ 7

Warns this is

have

and

UTAH MINING

Dan River Mills

Iowa Power & %

Light Co.

iV'.<v J1-'<7

brokers and dealers7

American Furniture Co.

Phone 4-71S9

The laborers

The matter that I wish to discuis with you is one which, lilce
almost all other human endeavors, is very simple in principle. Those

trading Markets

INCORPORATED

appears1

WHEELOCK & CUMMINS

MOINES

employees1

This also

to be unethical as well as unwise.

(Continued

defend their, rights.

TELETYPE SU 464

"77

LYNCHBURC

DES

the hired

rest.

destroying' our economic structure and con- f
demns Wagner-EIlender-Taft Bill as. socialistic and as; "deficit;
spending.^ Urges, property owners organize a militant union to

„

160 s. Main Street

Salt

Bell Tele. LS 186

BELL SYSTEM

OES MOINES

EQUITABLE

the

creating housing shortages and as depriving propof fruits of their toil. Says in last decade dwellings. 1

owners

shortages

& COMPANY

Incorporated 7.

Long Distance 238-9

B ought~S

take

rent controls as

EDWARD L. BURTON

BANKERS BOND "E

1st

7 v7

2340

Providence

amount and

President, National Home and Property Owners Foundation

erty

Street, Boston 10, Mass.

Tel.

Portland

proposition, not often formulated
but implicit in much dis-^
cussion, is that all increases
output should go to the laborers,
i.e. the management and the in-vestors shall receive only a fixed1

in words

Light

Amalgamated Sugar

Winn & Covet! Grocery

F. L PUTNAM & CO., INC.
Stock

City,

•

preceding 7

By ARTIHJR7W. BINtCa*_

Utah-Idaho

Securities

Boston

J
variation; of: the

government,1'

earners

industry entitled to the whole out-

have increased
Members

of(

capital,'

Insurance Stocks

Industrials—Utilities

;

suits from the combined efforts

ser-

being
currently prod u c e d,
a 1 though
occa¬
sionally for a

Consider H. Willett

Bank and

anyone 1

SALT LAKE CITY

7*777V:'?75^
7.'77*v. 7.77 7;

.American Air Filter

Be tail New England Coverage

; v

2927)

page

Obviously

^Marxian; socialist the an-'

is no, since the wage earners:
obviously not responsible forf
the whole output. Production re-»

vices

th4

the -issues In

(Continued on

New England Markets

William Jr

dispute between the bank and the

LOUISVILLE

•

unit.

with an occasional assist from the1

Kelley, only yesterday heard oral

STREET

but

labor, management, and

ciety?

collective- bar
The State Labor

proper

goods and

collective

Board headed by Rev.

14, CALIF.

industry^

titled to the whole output of so¬

gaining

Request

———

ployees in the broader

•

volume

stituted

Prior Preferred 7. 7,

are

ex-

all the offices of the Bank" con*

;:::;7#77':Common 7?7777777

swer

and

bargaining consisting of employ¬
ees in the same jobs in less than

Cons. Rock Products
Boston & Maine RR,

usually by the

on a

unit 7 for

1'1 *

put of that plant, corporation <ir\

goods

and

basis

of>/

services in

sound finan¬
operating at all
times to serve its banking and
trust customers, both private and
governmental."
bank
is
(The
depository for some state funds.)
It may be significant, however,
that Mr. Berney failed, to com¬
ment on the second part of
IMif
Baker's - statement
questioning
keep the Bank

•

out

Their

be
be¬

responsibility

^77^74; T'^

Holds purchasing power

others.

limited by the
volume- of

and v the

the.. employees

well

duction.

p r o

management; a - union bargaining

cial

Teletype US 424

believes

also

ment

paid

;

President

•

' v "r

relation between wages anct'
the1 first fundamental'fact is thatTwageS can only ben;

productivity,

Professional <$>-

7 '•(»1

In approaching the problem of the

Workers, CIO, to seek collective 2889) of J. Stewart Baker, Chair¬
bargaining rights for the clerks in man of the Board of Directors of
seven of its 53 uptown New York
the Bank of the Manhattan Com¬
branches and, for that matter, to pany, in his annual report to the
resist the efforts of-any, presum¬ stockholders on Tuesday that "the
ably "outside," union to organize management of the Bank believes
some
parts of the financial in¬ that it is against sound public
dustry, the UOPWA repeated its policy to have unions of employ¬
determination
to 7 intensify
its ees of banks which have public
Wall Street drive io the utmost. and trust functions. The manage¬

Inquiries Invited

Manhattan

Company made known
yesterday its intention to take legal action to resist the efforts of

Bell Teletype BA '393
New York Telephone BEctor 2-3327

>,',;

(
-

Exchanges and other leading exchanges

a productive factor
subject to law of diminishing returns, and the marginal wage which'
employers can pay must be determined individually. Contends,
further, greater productivity in industry leads to lower prices and

con-

"-.:C

of managers and promoters. Points out labor is

•

pendent union, votes to affiliate with AFL and expects to sign

' 7,7-7

Refuting' principle that., increase in manpower output represents:
solely the contribution of labor, Dr. Tucker contends chief cause
for increased industrial output has been vigorous
enterprising spirit

collective

Members New York & Baltimore Stock

' .7

•'*/

Radio

STEIN BROS. & BOYGE

6 S.

By RUFUS S. TUCKER*

Economist, General Motors Corporation

EDMOUR GERMAIN

■

4 Leon W. Berney, U0PWA, CIO, Vice-President, in reply to state-'
ment of J. Stewart Baker, Chairman of Bank of Manhattan Comj
pany, says employees of banks with public and trust funds can't j
be denied right to bargain and points cut U0PWA is determined
to compel every major bank to deal with their employees through

Bay way Terminal

;MiV

;

Co.

Issues

All

Wages and Productivity

Of Banks Willi Public Funds Shouldn't

Automatic Pinsetter
Baltimore Transit

Disputes Contention Employees
Organize

Thursday, December 5, 1940

•

'7 ^

Phone 5-6172

the

t y

haye

who financed the homes and who

builded- America

prop¬
as

that

(

owner-

men

pri-j

f i g h t
t

v a

business

putting us in the basement and
calling us economic royalists and
calling us business men, as thoug'h
the men who produced the homes,

after battle in

retain the

conducted this many years,

been

battle

lose

SPOKANE, WASH.

against

years,

and have seen

ship

7iS!

ther, because of smear campaigns

the

Arthur

Binns

way or

other,

some 77

were; * in

little bit under the

principle in
:
^
:
cuff, a bit criminal, somehow or
country, have; felt oyer and other. That, whole campaign, plus
again that somewhere, some^- the fact: that we do have, and
how, we,must find a -very much must have, and should have,: spe-> wider base, a very
much v more ciaLinterests in the promotion of
fundamental place to build an en^- our particular trade or industry/7;
lightened public opinion than any¬ have meant that we haven't been
thing that we could possibly do ih in a good position to build -that
our trade organizations.
\ basic foundation, which rests in
; - .
the
concept which .we have al- ;
y. To start with, there are only a
which our founding 7;:
matter of something like'5% of ways had,
our
population that are business fathers had, and indeed, our Eug- '
.

;

7 =7'

■

'■ .■

:.-i7.

this

northwest mining

Foremost Dairies, Inc.
*
*

Common

securities

Preferred
For Immediate Execution

Winn & Lovett Grocery Co.
;

Common & Preferred

Stix & Co,

Exchange from

A.M.,

7.„
INVESTMENT
509

OLIVE

SECURITIES

of Orders

Quotes call TWX Sp-43
Pac.

Std.

10:45

Time:

other hours.

Floor
11:30

Sp-82
7a

STRE ET

STANDARD SECURITIES

Clyde C. Pierce Corporation
j Florida Municipal & Corporate Securities

J:
7

'.:

Barnett Nat'l Bank Bldg.
Jacksonville 1, Florida

Long Distance 47
Branch—St.

Teletype JK 181

Petersburg, Fla.

St.Louis LMo,

CORPORATION
Members

Standard
of

Brokers
Members St. Louie Stock Exchange

Stock

Exchange

over

men

at all in

line. And those

any

Spokane

Dealers

ago

Underwriters

Peyton Building, Spokane
Branches at

lish

*An

the
7

Kellogg, Idaho and Yakima, Wn.

address

Convention

States

Mr.

of.

Binns

the

at
United

Savings and Loan League
Milwaukee, Wis.* Nov. 22, 19467

forbears

four

hundred years

had, that in the private

own-f 77

ershiip of property, in millions of
small
,-77

hands,

lay

the

way

to the 7

(Continued on page 2918)
*■*..

;.777,"y7.;

CHRONICLE

THE COMMERCIAL & FINANCIAL

[Volume 164 "Number 4548 *

Behind the Iron Curtain Balancing Civilian
And
Former Chief of MoscOw Bureau,

Columbia Broadcasting: Cojnpany

Government and Business

Military

By HON. W. AVERELL HARRIMAN *'
/V;

Educational Needs

Mr.

2887

.Secretary-.of Commerce

r•

Moorad, while praising heroism and sacrifice of ordinary Rus- •
| New Commerce Department head, pointing out that our strikes and
By FRANCIS J. BROWN*
K price inflation are promoting socialization abroad and threatening
people, gives illustrations of rigid Russian Government surveil- jf
Staff Associate, American[ Council i our own
economy, sees new labor legislation ahead clarifying
lance, and notes that no foreigners, not even Ambassadors," are
;Bof Education:;:'/ •
1 relationship between rights of labor unions and their responsibil; . permitted to have social contact with people. Describes what ton- •
>;stitutes so-called <4worfeerS^ freedom" in 'Russia;1 and ? poihts- oiit^l I Educational ' expert warns too , I ities to public. 'Regards.inflation problem still serious and Calls
; much emphasis is being given to
there is no' equality - of treatment," since communists and bureau- ;'
J; for restraint on wages and prices, respectively by labor and by •
erats enjoy luxurious living*, while people are in utter - poverty^:| (training;for war; needs and atmanagement
Says present fiscal policy is anti-inflationary and
Itainment of a proper balance be[ calls for clarification of anti-trust laws.; Concludes we can meet
{JlSkyi1 Workers are' greatest losers by State Socialism, ] and contends ;: v
1 problem of expanding our economy, and pledges Commerce De|tween military and non-military
Russian policy has not renounced world * revolution. ; rCbncIudes^ •
^education, has been neglected.
■\- Leninism still survives.
;
j partment's aid, not in guise of pressure group for business, but
1
Attacks army-sponsored program
as Searching for areas of
agreement.
'SeVeral centuries ago t)ie first British Ambassador to Russia;
for .Compulsory military training,
traveled through ^Sweden to St. Petersburg, where he vwas Imme¬
|
You are meeting today at a critical moment in history. The
land points out its failure to pro¬
War ahd the wake of War have uprooted the life of mankind the
diately locked
sian

•

the

Russia,

pert on

C[zar*s>;«:'secret]]'

claim to know

■

Someone 1 Who ; has

.released: and: v;
given

great

banquet.

there. But I am^one

Re t

a:d:y v|t h e b'v"":'
to
see
when people are being
Navy' has|re([rushed by fascist discipline, or c e i v e d au- f
wheri/they are barefoot or. dying thprization to
Of starvation. It is unspeakably
Select arid^
depressing, all. around this so- train the top

e -

liyed ^through
seri

such

e s;

experiences to
make

observation

Moorad

George

wierd

called
see

;

which

cpmpetely true today.

("There
sia.

are no experts on Rus¬
are only varying
de¬
of ignorance."

There

grees
f

obviously not

x e

ex-

and

former

enemies,

who

are

through
tional

progressive, highly-demo¬

While,

ground under heel.
these

things

are

past

W. Averell Harriman

zation for

physical
Francis

Brown

4, 1946.; ^".:;4:. ■

Add

V**',

1f"

.-P* ^

<■

•

(Continued

page

2915)

Reports More Optimism
Among Purchasing Agents

plan has
tieett -devised'- to; identify, ;much
less to 1 subsidize,; capable- youth
for education' for ' leadership in
Yet

National

;

outlook

ness

taken from the

i t e
opinion of
c o m

p u r

p o's

chasing

agents constit u t i n g
its

membership,
:und

e r

chairmanship
of

George E.
Price, Jr., Pur-

Chasing Agent
of

th$

Good¬

year
Tire
&
Rubber
Co.,

ping

and

labor

still

operations' in

{ Some-: beginning has vheeii made
ognition

handicap¬

pointed

needs.

recently

has

ap¬

pommission of repre¬

agencies of
government to survey"; their rela¬

tive

American
Education;; National
' Council,
and." Social
Societies,

Research

Science Research Council

—

definitely

(pontinued

page /

2925)

*Part

with the grave emergency

individual, with few excep¬
ready to take) initiative

every

tions,
and

task.

faced
of war,

was

address

Dr.

Browh bef ore Eastern^ Association
of College Deans and Advisers of
Men, New York City, Nov. 30,
.

I Come home now with

I have traveled

pansion
Will
free

appeared
field,

superlative

Ofcr

limitless
our

prqductiqn

seemed

well with

and

war ma¬

of the highest

effectiveness

with

speed that amazed our friends and
confounded

our

enemies.

management, Ameri-

*An address by

Secretary Har¬

riman before the 51 st Annual Con¬
gress

-:-'t

of American Industry, New
1946. *

People in all countries are to-;
day seeking economic / security.
People will sacrifice other forms]
;

of freedom to attain freedom from <

want and fear of want.

When

Since in many

countriesi the whole

(Continued on page 2923)

Machinery Corp.

BOUGHT—SOLD-QUOTED

New York Hanseatic Corporation
BROADWAY, NEW YORK 5, N. Y..

Telephone: BArclay 7-5660

;

Teletype: NY 1-583

Rliodesian Selection Trust

CPA

seem

have

created

STOCK

COMMON

con¬

Gaumon t-Br itish

siderable
>

optimism. The change
of trerid has only a slight edge in
the* reports: some areas are:very
enthusiastic

about

tions, while others

■

Maiiufactarers. of.the;Nationally Known

betters condi¬
are

still

very

cautious because the ultimate re¬

had sufficient time to register,

the postwar 1 price and production

problems than in any government

through controls.;

assistance

;

vSBusiness demands continue
Very good,

With shortages of

ma-

UK,
Scophony, Ltd.

rtifS-S-'sSSSSstiivSS1//®.:";/;/'':

■.rift*

P.ROSPECTUS

sults of' price decontrol have not

(>- Generally,, business is more con¬
fident: of its own' ability to solve

"WHIPSTER"

.."V '* .'-A"''• "" /!-

•;'[

- ,v-

}:.'

;

ON
V'i! /.

•.

I-'/

;

■:-

♦-•

*,j.

F. H. KOLLER & CO., Inc.
Members N. Y. Security Dealers Ass'n
Ill

BROADWAY, NEW TOKK 6, N. Y;

BArclay 7-0570

REQUEST
.

British Securities Dept.

GOODBODY & CO.
Members N. Y. Stock Exchange and
115 BROADWAY
Telephone BArclay 7-0100

NY 1-1026

in-]

is endangered,/
people look to collective security.)
Thus people in different countries
are
looking to various forms of
experiment in socialization to at-;
tain security.
This is but natural

Sullivan-Waldron Products Company

Moving Corporation

120

Socialization
V'-»V

York City; Dec. 4,

General

Economic Security andt
:'"*v

•

dividual I security

the skillful organization

of American

society with free enterprise?

itt

allies

of the world economy?]
example encourage men;

ported*.by

the\

in other countries to strive for

in [ every

filling the needs of
oWn fighting forces and thd'se^

our

ticipated

declining business, re¬
industrial purchasing
qgen(;s a., month ago,appears .to.
have been reversed.*; Resumption
"bf'/iriaritim?'^^pei'atibnsf the ^el
tioti: results and the ending of

;

responsibility for doing his

„

have

begun the preparation of a roster
of top-flight persons in all fields.
But neither of these steps go half
fair enough. The problem is more

Commodity Prices'

needs.. The; four
American Council of

Learned

Council

country

research;

Councils

are

non-military

sentatives of various

stoppage at this time would take
as long or longer.
;^

the march.

President

;

the

war

in the research field to give rec¬

many

Commodity prices

human and

by "all.

When

rather widely in Europe, in the
Middle East, and in the Far East.

Under

tions.

plants.
If the coal strike is drawn out,
there will be a rapid paralysis of
production in key industries, and
$11 forecasts will fall flat.
It re¬
quired three to six months fully
to develop production after the
coal and steel strikes last Spring
and the recovery from any lengthy

involved

even'more

shared

you

terial and supplies

|>roblems:^of^t-ihtefnationaL-rela-.

general upward
surge followed the ending of CPA.
rl
\
according
to Most suppliers are not taking un¬
the Committee's /report. , The /re* due advantage of the situation,
and outside of a few conspicuous
port follows"
U The trend of opinion which an¬ IB: (Continued on page 2913)
Ceorge E. Price, Jr.

our

not tell

and since the

tioh to

The

terials

political

tiny.
Opportunity and responsi-;
bility ; have been given to and

resources.

need

positions in
government, or for giving direct quality
for responsible

life,

report, the Business Survey Committee .of the
Association: of; Purchasing Agents reports a ; reversal of

busi-

economic

social

our

anticipated

garding

declining
business. Says business, in general, is; good, and although com¬
modity prices are definitely on the march, the movement is regarded
as temporary.
Sees continuation of cautious buying.
-Jruits Dec,

comparable

our

has been master of his own des¬

From overseas, America's war job

the

our most capable youth by
military.

Survey Committee, headed by George E. Price, Jr., Pur¬
chasing Agent for the Goodyear Tire & Robber Co. <pf Akron, Ohio,

the ex¬

programs

Business

reports a reversal of trend of opinion toward

these

panding numbers engaged in mili¬
tary research and some concep¬
tion is given of the draining off

M".

,i,>.

war

and devel¬

free society with free
enterprise.1 Here each individual
oped in

Our

war.

cans

•
belief that of first importance to;
industrial¬ the future of the world is how we [
ists of the tremendous production handle our own affairs at home, r
job that you yourselves shared so Will we develop stability which |
largely in accomplishing. For the will permit our tremendous pro- ;
better part of the last six years I
ductive ability to expand our eco- <
have been overseas and during nomic life and to aid in the ex-f
!

presented .to
the next .Congress by the Army;

'• "f

out

problems result in no small de¬
gree from the very size of our
own job—from the all-out mobili¬

fore a luncheon meeting of the peer through 4he /chinks) in the
51st-Annual Congress of American Iron •; Curtain, to decide firmly
Industry, New York City, Dec. whether or not we can live like

f.V;

re-

economic

the dislocation of the

num¬

will

bers

seri¬

in the

order

Some"

larger

ous

plan!
involving

and

have only a little time to

is that Ameri¬

grown

most

establishment

similar

now

reason

have

country

the

4ems. are

•

'-exam¬

officers.

most vital

for' hu-

existence.

fortunate, and
j yet 6ur prob-

ination, for its

cratic little countries like Finland

food and farm' products
with fewer hands.
Our fighting,
more

The people of
are;

na¬

and

th is

seleceted I

and stripped of liberty.
is galling to see' worth-

hungry
And it

hien—soldiers, sailors, and airmen
were* unsurpassed in their reSourcefulness and sheer-guts. Why
was this all possible? Perhaps the

basis
•man

•

ranking youth
of our nation,

millions of people, both allies

But

*An address by Mr. Moorad be¬

of Soviet security, to

zone

"'r''

and

many countries the very

andJ^eduCation|;for; the^;purstiits^

does not require a Slavic expert

life

•

^As never before, it is impera¬
] in7] Russia, "travelled tive, to keep a- balance between
European vrsatellite
training/ for military effectiveness

occupied Manchuria. And I think Of."
peace.;/Al-\;\
it

and

'reconstructing American farmers produced
;

the

states and has also visited Soviet-

again given

cal and national needs.

was r

lj a s e d
banquet,

through

world
o v e r.^;
■ ■
—■
'■
—v;.'
■■
—*
Man faces the. can labor—men and womeii alike
learned quickly hew tasks.
grim task ^ of

and to provide
neveri' beeri
of two Ainef* |educa<tfpnal: training to meet logroups

r e

again
ed, again
•

lived

has

co^j'1

| whefiS -he

•

4 for local'

reporters (the other; is Dick
Lauterbach of Life Magazine) .who

tfieh-prbCeedto .M o s

about it tMn

ican

aself-sufficient autonomy

mote

and I 'will only

Other Principal Exchanges
NEW YORK 6, N. Y.
Teletype NY 1-672

;

{

2883

■

.A-V,:1' '''''A ;/■''' ,:;V"

THE COMMERCIAL & FINANCIAL' CHRONICLE

Thursday, DrcertlW $,

is obvious that the new

proposal
to, changed
{ :: { '
\
The new plan presumably will
have to travel through the SEC
and court again before it can be.
makes a; concession,'
inarket conditions. ,:

Legisktwi

consummated.

New England Gas &

Britain and U. S.

previously filed, which had been approved by the Commission June
24 and by the District Court in Massachusetts on July 17,
A
'
'Under the revised plan funded debt would include $8,000,000
subsidiary debt and $20,000,000 collateral trust bonds, whereas the
previous plan provided for some4 /
.:
"A-V1'
what larger amounts ($9,920,000 not more than seven new common
shares of each preferred share.
and $22,425,000 respectively). The

On Fund Parities

the SEC

reduction

"alternate"

$4,345,000 assumes
the early sale of New Hampshire

\{ Under the

Gas & Electric Company and Kit-

rceive eight shares

new plan holders ol
preferred stock would
of the com¬
tery Electric Light Company. As mon stock, together with rights
of Jan. 1, 1945, two small subsid¬ ■to
buy five shares at $9 a share
iaries, Deery Electric and Lamp¬ (for each share of preferred held).

the

River Improvement Company,
been
merged
with "New
Hampshire P. & E.
Sale of the
New Hampshire properties will

$5.50

sold through

shares not

rey

Common

had

the exercises of rights would also

eliminate

State
:

business

state.

General

the

'company

income of

the

of
a

sub¬

Public Utilities Corp..

automatic

favor

accept- ;

proposed parities; while
American representative insists v
acceptance of unjustified ratios
would imperil Fund. Six nations
postpone parity-fixing.
v-:>A-aA
WASHINGTON,
Dec.
4 —
During the World Fund's current
discussions of par values of mem¬
ber currencies—a matter on which
Fund

the
sion

reach

must

deci¬

some

12—Britain and the
U. Sv A. have taken opposite posi¬
by Dec.

tions

Split

tion.

The

fundamental

one

British

ques¬

Executive

Di¬

holds the entire second
preferred and common stocks oi
New
England
Gas
& Electric,

rector holds

would

receive a cash payment of
$1,944,500 for these issues. It also

parities" they^suggest, unless for

holds 25%

which

Current figures.>are {not. avail*
able for New Hampshire but in
^

1945

stock

scription basis.

making

the New, England' system; iritra-

holders

$5.50 preferred

the

outside'

Massachusetts,

available

British
ance

reported

„

that, members being
sovereign countries the Fund
should A
most

automatically >accept

unusual

the

The Amer¬

reasons.

ican^"vpo$iUon'^as:\Voiced';';.throtlgh

stock and would thus be entitled

this1 country's Representative,: is
that the Fund's first duty is to

credit of $73,403.
The latter fig*
ure resulted from the filing of a
consolidated
system tax r' return

of the First Preferred

of Federal income taxes of $145,-r
177 and an income tax deduction

under

plan; consumation of
the plan is said to be, assured ii

the
available

the stock to which it" is

and

$282,033, after paymeni

to subcribe for the .common stock

General Public Utilities takes all

saving

would not be
after the property is
gold. Hence, the pro forma earn¬
ings
(1945)
would
be
around
$209,000.
On the other hand it
should be possible to refund the
institutionally held $1,930,000 1st
3%s of 1963. Assuming these can
be replaced by 2%s the interest
savihg after Federal taxes would
amount to about

since

structure

tional-shares

not

provide

would

sold

the public.
The

plan had pro¬
vided for sale of $22,500,000 sink¬
ing fund collateral trust bonds and
$11,500,000 of new common stock,
the latter being offered to
the
public, after competitive bidding,
with the proceeds going to Gen¬

the

the
cash of
$4,312,500 necessary to
complete A the plan, some addi¬

presentcapital

appears

stock

mon

$10,000. It might

the

entitled.

If subscriptions to the new com¬

also be feasible to issue additional
bonds or a new issue of preferred

stock,

the

eral

Public Utilities.

we are

come

the U. S. Department
large and representative

sioners'

glad

many

here

;t h i

last year.
'

In¬

partici¬
pated in these
since

the beginning.
You
have

helped

involved.

are

l t

"n#
v fg

Us"

•;.»

■

» .t.,

.new
see

♦

i''

it *

•lwa;

j n

sr,

yeu

•H

build

this

tion

into

L. B. Schw*ll*ntMKk

institu¬
a

;

tional Conference

issues

♦

Amu" %

Schwellenbach' before

political

are

new

conferences

ValMtify it
brmfv us.

have

almost

rte*

• you

parities, however unrealistic
apparently indisposed to
changes now. Delicate

;■

num¬

'■«

wh»>

of these may appear, and the
on

some

merit at

ficial

insist

*?t

confer*

here

were

deed,

request*

who

morning

ber

Fund

eully

see

w*fc«

and

union leaders.
am

Aimm*

economic system.

our

As in past years

its reserves: that to ac¬
national clearing house for the
cept a parity Which, cannot be
exchange of experience and prob¬
justified economically is only to
lems in the field of our common
imperil the Fund> ultimately. A
interest — the
improvement
of
At least six countries to date
labor legislation and administra¬
have decided to avail themselves
tion.
The value of this institution
of the privilege of postponing fix¬
is attested by your frequent re¬
ing their parities.; These six are quests that it be
repeated annu¬
Italy, Yugoslavia, Greece, Poland, ally.^ As I said in my invitation
Denmark and China. Apart from
to your Governors to appoint you
these, the other members are ex¬
pected to adhere to existing of¬ { *An address by Secretary
protect

■

crowding lb# peak #1 mmmmk
istration's labor spokesman predict* Mh dec lot m
next year, but holds runaway prices
nnbitfy. $**» « «
policy to stabilize economy at high level* ol
calls for labor-management harmony. Ckims
of Labor Department is effective, and sets mti Iw
wage legislation to meet higher living cost*..
Wmu
many labor laws and concludes labor frgUU&n-a m »
of

13th

Na¬

on Labor Legis¬
lation, Washington, D. C., Dec. X

1946.

Will

n.v

for ft ur t

ing* H

■#

--I -

\ * ;j r

";-*V

thw

•omeUU^g

patirg ' l^.S :-y<

nl!

'•e".

time—

•I

%*h y

rutmn

this mut-a Vl

" r

you

i» .?>

your

ticipaida

way*

davs*
their

•.

trur *

labor.
There

•

t».--

tn-

■

•

Consumma¬

France, for example, were to ask
tion of the plan was conditioned
for postponement as a former oc¬
$4,345,000 decrease in the on sale A of the common stock at
cupied country, ; that would be
proposed funded debt of NEGEA not less than $10 a share (sub¬ taken
by>the black market and
may be partially effected through
ject to approval of General Pub¬ others
as sure sign of another of¬
increased
cash
available, from lic Utilities if the price Was uhddr ficial devaluation later. If on the
operations. It seems unlikely that $11). Due to the decline in5 the other
hand, France unwilling; the
it could be obtained entirely from stock market the
sale
of : this
Fund, were to insist upon post¬
the
sale
of
New
Hampshire block of common stock, at the
ponement or upon some new par¬
Q, & E., since (under the present price limits imposed, proved im¬
ity, political effects might be farset-up) this would mean sale at practicable. *
reaching and some one in Wash¬
-an apparently
high multiple of
A Under the new plan the stock ington would be blamed for fu¬
earnings.
1 '
would be offered to the preferred ture
French ills.
: -•. -' The New England G. & E. plan stockholders at $9 a share. Ac¬
•••"..-aa
-a;..''•'•a.vl.y.;;' -a/v-a*Va
proposes that the new collateral cording to the announcement the
trust bonds and $7,762,500 of new dividend rate is expetced to be
preferred stock
may
be
sold, 800 per annum, which on a price
subject to an exchange offer to of 9 would' mean; a yield of
holders of $34,998,500 Debentures nearly 9%. Since the retail price
of
under the original offering would
The Civilian Production Admin¬
on a par for
conservative side,c

Secretary *t LaWr

Asserting

Electric

New England Gas & Electric Association filed

with
recapitalization plan, superseding the plan

On Nov. 25,

•

By IION. LEMS R SeifWlM.£*S Mil*

„

The

■

•.

...

Steel Priorities

To Be Abolished

basis. The

par

new

have been around 11-12

(includ¬
ing one point for. cost of financ¬
ing, which may be too small), it

preferred stock is to be converti¬
ble

into

common

the

rate

Trading Markets in Common Stocks

istration is expected very

shortly

steel priorities. Consid¬

to lift all

ering the grave general shortage,

At Home and Abroad
:

tional trade and

our foreign relations; nndemke tl# hval.#. and
safety of the people, and usher k chaos, hert mi
world. Holds inflationary maladjustments and a dftp m mmmd
income to $150,000,0(10,000 would ensnt »ihk twn

and threaten the welfare,

a source

and

Bausch & Lo'mb Optical Co.
♦Crowell-Collier

Rockwell Manufacturing Co.

the

Tennessee Gas & Transmission

With
Bingham, Walter & Hurry

Prospectus

U. S. Potash

Request

Paine, Webber, Jackson & Curtis a
A'./

AAAAA

ESTABLISHED 1870

was

and

with

29 BROADWAY* NEW YORK 6. N. Y.
Direct Wire to

Chicmgm

;

Co.

sub¬
and

stituting machines for men,
we have therefore become greatly

supply at
which tends.tu pa*
economy,

.r'l'.o't*

«•'
t*

•

tf:-

'* <*'•

t'w

.
1

■

*•••?.v*

Despite the'TkU f

ergy

daipg
eraUm* it

LOS

ANGELES,
J.

Robert

CALIF.
Jr.,

Waters,

associated

Seventh

i»

,-vv|

t*iw;

ih-at

rk.A'<:

L
tr.-

wide gap in the form
.

manufactur¬

ing; and fabricating processes and
distribution
channels,
between

with

{Company,

has

—•

be¬

Adams-

215

West

Street, members of the

was

previously

The-long chain of supply in which

Tr»'
UtV

with

43. t

Bitumlnmi* «mL
i ms
.

4 4

4 :m

...

i '•;

Natural gas
Water

power...materials are converted into
consumer
goods and services is
*vkh»
Total
only as strong the first link which
■t of im
Source* U S. Ptk* ^
breaks, Bituminous coal produc¬
tion is a fundamental link in our Interior, Bureau ui li •
economic chain of supply, both as
M*kr
C mmmmm

raw

Los Angeles Stock Exchange. Mr.
Waters

There is

of diverse extraction,

materials and finished prod¬ Anthracite
ucts in the hands of the consumer. Petroleum

(Special to The Financial Chronicle)

Fastnow

have gone a long way in

'■

result* in

raw

With Adams Fastnow Co.

come

i.'t

Edgerton, Riley

;

Robbins & Meyers Com. & Pfd.

Gilbert J. Postley

Bayly

& Walter.

Portland Electric Power 6s, 1950

economic

present
organization
our

vr-

•

prior thereto with

O'Neil & Co. and

Munson Lines Pfd.

r f

in the flow «»f

to The Financial Chronicle)

formerly

Brothers

Deep Rock Oil Common

evolution

fwfikl;.

ut \ \
dependent on power to make ma¬ is the nu**t
chines
work.
Furthermore, the energy utdi'M
1,044*1
LOS
ANGELES, ' CALIF.
—
.» k c' iij'i
division of labor which character¬ States tmlay; Ih: *
mf ■(•*
c ii
William L. Geffeney has become izes our economic life, while re¬ plies 43'* of
I t t1
associated with Bingham, Walter sponsible for our high efficiency for all purpose*
in production, has resulted in an
& Hurry, 621 South Spring Street,
Table I—Enefff flrom
almost, complete interdependence
members -of
the
Los
Fuel* *t*4 R*kf
Angeles of the various elements of our
|
Stock
Exchange.
Mr. Geffeney economy.
(la Trillion* <4
Th^iai-lj

(Special

^Foremost Dairies

William L. Geffeney

material in

health,
safety of the American popu¬

lation and of many peoples
The
ecdnomy
of the

form

Liberty Aircraft Products

'ft

A stoppage of coal production, even for a
time, would paralyze our economy, ndtcrwty
merce and international relations,'

it is held,

•

Commerce Department report maktaka that
would paralyze our domestic tcofiomy; terktify

abroad.
priorities, which originally were
United
designed for bottleneck and hard¬ States is peculiarity vulnerable
ship cases, can no longer serve a to a stoppage in coal production.
useful purpose,

♦Bates Manufacturing Co.

By FIIILIP M.

;A Assistant to the Secretary of

*A copy

of Mr. Hauser's report

to the Secretary of Commerce on
"The

Impact,of the Coal Strike on

Adams-Chadwick; Co. and Searle

the National

Merrick Company.

1946.

The major
of coal are

ta4u#P'Ui

which iuppty

f*
P

i r^ U

Economy," Nov. 27, ingredients h* the
(Continued «

THE COMMERCIAL & FINANCIAL CHRONICLE

2888

Is obvious that

makes

iihe

Public

Utility Securities

The
have

By HON. LEWIS B. SCHWELLENBACH*

travel

and court again before it can be
consummated.:'
v
1 r ,1

Asserting

crowding the peak of economic activity, Administration's labor spokesman
predicts little decline in prices within
next year, bat holds runaway prices
unlikely. Says it is national
policy to stabilize jecpnomy at high levels of business activity and
calls for labor-management harmony. Claims conciliation service
of Labor Department is effective, and sees heed for
higher minimum
wage legislation to meet higher living costs.
Wants revision of
many labor laws and concludes labor legislation is
safety-valve

New Englarid Gas & Electric
Association filed with

superseding the plan
previously filed, which had been approved by the Commission June
24 and by the District Court in Massachusetts on July 17.-

Britain and U. S.

revised plan funded debt Would include $8,000,000
subsidiary debt and $20,000,000 collateral trust bonds, whereas the
previous plan provided for some-<t>——
what larger amounts ($9,920,000 not more than seven new common
and $22,425,000 respectively). The shares of each preferred share.
reduction of $4,345,000 assumes
Under the new plan holders oi
the early sale of New Hampshire the $5.50
preferred stock would
Gas & Electric Company and Kit- rceive
eight shares of the com¬
tery Electric Light Company. As mon stock, together with rights
of Jan. 1, 1945, two small subsid¬ to
buy five shares at $9 a share
iaries, Deery Electric and Lamp¬ (for each share of preferred held).
rey River Improvement Company,
Common shares not sold through
had
been
merged
with
New the exercises of rights would also
Hampshire P; & E.
Sale of the
be available
to
holders of the
New Hampshire properties will
$5.50 preferred stock on a sub¬
■

eliminate
State
the

business

outside

the

scription basis.

Massachusetts, making
England system intra¬

New

General
which

state.

Public

holds

Utilities

the

entire

Corp..
second

preferred and common stocks oi
New
EnglandGas & Electric,

Current figures are not avail¬
New Hampshire but in
1945 the company reported

Split

On Fund Parities

Under the

British

favor

>.*

automatic

accept¬
of proposed parities; while
American representative insists

acceptance of unjustified ratios

•

ance

we are

come

large and representative

sioners1"

mem¬

see

ber currencies—a matter

which

the

Fund

sion

reach

must

deci¬

some

by Dec. 12—Britain and the

morning

who

last year.

tion,

ber

British

Executive

Di¬

deed,

ment of

here

were

In¬

you

should

automatically accept the
parities they suggest, unless for

conferences

most unusual

the beginning.
You
have

new

net
income of $282,033, after payment

$1,944,500 for these issues. It also
holds 25% of the First Preferred

of Federal income taxes of
$145,177 and an income tax deduction

stock and would thus be entitled

this

country's

to subcribe for the common stock

that

the

under

into
a
protect its reserves: that to ac¬
national clearing house for
the
cept a parity Which cannot be
justified economically is only to exchange of experience and prob¬
lems in the field of our common
imperil the Fund. ultimately.
interest
the
improvement
of
At least six countries to date
labor legislation and administra¬
nave

credit of $73,403.
The latter fig¬
ure resulted from the
filing of a
consolidated
system tax return
and

the

saving

available
sold.

would

after

the

Hence, the

pro

not

bc-

present
to be

tional

$4,345,000

the

set-up)

the

not

unlikely that

high

multiple
»

•

stock
an

'■*

♦Bates

the rate

than

the

market

decline

the

sale

in
of

new

rate is expetced to be
800 per annum, which on a price
of

would

mean

yield

nearly 9%. Since the retail price
under the original
offering would
have been around

ing

11-12

(includ¬
point for cost of financ¬

one

ing, which may be too small), it

■

Rockwell

decided to

avail

themselves

privilege of postponing fix¬
ing their parities. These six are
taly, Yugoslavia, Greece, Poland,
Denmark and China. Apart from
these, the other members are ex¬
pected to adhere to existing of¬
ficial parities, however unrealistic
of these may appear, and the
und is apparently indisposed to

some

insist

changes

political

issues

Delicate

now.

involved.

are

cupied
aken

others as

sure

French

William L.

Geffeney With
Bingham, Walter & Hurry
The

Financial

Chronicle)

CALIF,

—

Geffeney has become

the

Los

Exchange.
formerly

Walter

Mr.

Angeles

Geffeney

with

refreshing

very

growth

would

you

days,

many

Na¬

their

Labor Legis¬

labor

13th

came

law

boast about

was

State

some

tendency to bepage 2920)

The Coal Strike's Impact
At Home and Abroad
By PHILIP M. IIAUSER*
Assistant to the Secretary of Commerce

Commerce Department report maintains that continuation of strike
would paralyze our domestic economy;
seriously injure interna¬
tional trade and our foreign relations; undermine the health and

]

safety of the people, and usher in chaos, here and throughout
world. Holds inflationary maladjustments and a
drop in national
income to $150,000,000,000 would ensue within two months.

economic

organization
way in sub¬
machines for men, and

Despite the fact that other en¬
sources have expanded tre¬
mendously during the past gen¬
we have therefore become
greatly eration, it is still true that coal
dependent on power to make ma¬ is the most
important source of
chines
work.
Furthermore, the energy utilized in
the
United
division of labor which character¬
States today. Bituminous coal sup¬
izes our economic life, while re¬
plies 43% of the energy utilized
sponsible for our high efficiency for all
purposes in this country.
in production, has resulted in an
almost:i complete interdependence
Table I—Energy-From Mineral
of the various elements of our
Fuels and Water Power, 1945
have gone a

stituting

economy,

long

There is

distribution

(Special to The

LOS

Financial

ANGELES,
J.

Robert

Waters,

associated

Chronicle)

CALIF.

Jr.,
with

Company,

Seventh. Street,
Los

has

be¬

Adams-

215

West

members of the

Angeles Stock Exchange. Mr.

Waters

par¬

administration.

(Continued

ergy

(In Trillions of British
Units)

and

With Adams Fastnow Co.

pass
new

and

channels,

between

previously
with
Adams-Chadwick Co." and Searle
was

Merrick Company.

The long chain of supply in which
raw materials are converted into

consumer

B.T.U

Bituminous coal—

fundamental link in our

economic chain of supply,

both

of Total

15,091
1,485
T0,712
3,662

42.8
4.2
30.3
10.4

Water'po^or—4,333

12.3

Natural

goods and services is
only as strong the first link which
breaks. Bituminous coal produc¬
tion is

Thermal

Trillion Percent

materials and finished prod¬ Anthracite
ucts in the hands of the consumer. Petroleuiii

Co.

the

accomplishments

There

1943.

In many different
said that in the early

raw

recog¬

resulting from
Perhaps

comments

Secreta

lation, Washington, D. C., Dec. 2,

Bayly

& Walter.

BROADWAY, NEW YORK 6. N. Y.

a wide gap in. the form
prior thereto with of diverse extraction, manufactur¬
O'Neil & Co. and Edgerton,
Riley ing, and fabricating processes and

Fastnow

Diract Win <• Chicago

nition

ANGELES,

Hurry, 621 South Spring Street,

come

;

address

tional Conference

ills.

Munson Lines Pfd.

re¬

time—is

this mutual association.

A stoppage of coal
production, even for a relatively short period
time, would paralyze our economy, adversely affect world com¬
istration is expected very shortly merce and international relations,<$>to lift all steel priorities. Consid¬ and threaten the welfare, health,
a source of power and as a basic
ering the grave general shortage, and safety of the American popu¬ material in production. A stoppage
lation and of many peoples abroad. in the flow of coal
priorities, which originally were
automatically
The
economy
of
the
United results in breaking the chain of
designed for bottleneck and hard¬
States
is peculiarity vulnerable supply at
many strategic points
ship cases, can no longer serve a to a stoppage in coal
production. which tends to paralyze the entire
useful purpose, it is held.
In the evolution of our present
economy.

Brothers

by your frequent

Schwellenbach- before

the

The Civilian Production Admin¬

members

Portland jElectric Power 6s, 1950
Robbins & Meyers Com. & Pfd.

glad to

very

something that to me—partici¬
pating last year for the first

ways

*An

To Be Abolished

was

Gilbert J. Postley

are

number

ticipants here.

Steel Priorities

Stock

Deep Rock Oil Common

morning,

are

Sprinkled through the proceed¬
ings of your past conferences is

your

Cutis

this

to your Governors to appoint you

ity, political effects might be farreaching and some one in Wash¬
ington would be blamed for fu¬

William

ABLISHEP 1879

faces.

quests that it be repeated annu¬
ally.
As I said in my invitation

hand, France unwilling, the
und, were to insist upon post¬
ponement or upon some new par¬

associated with Bingham,

EST

oc¬

sign of another of¬

ficial devaluation later. If

ture

The value of this institution

attested

other

LOS

Request

Paine, Webber, Jackson

ideas.

you
and we hope that the
deliberations of the next few days
will be as profitable for you as
for your predecessors.

country, that would be
by the black market and

(Special to

tion.

experience,
viewpoints and

for example, were to ask

ranee,

for postponement as a former

U. S. Potash

♦Prospectus

L. B. Schwellenbach

—

of the

own

see

tion

♦Tennessee Gas & Transmission

♦Foremost Dairies

new

voiced through
build
Representative, is helped
institu¬
first duty is to this

form

Manufacturing Co.

since

Fund's

Liberty Aircraft Products

Optical Co.

♦Crowell-Colller

this

plan the stock

Trariin® Markets in Common
Stocks

& Lomb

the

dividend

sold.

to be converti¬

less

position

cording to the announcement the

Manufacturing Co.

Bausch

Consumma¬

would be offered to the preferred
stockholders at $9 a share. Ac¬

exchange offer to

common

Utilities.

Under the

par for par basis. The new

ble into

block of common stock, at the
price limits imposed, proved im¬
practicable.

may

preferred stock is

sold

the plan was conditioned
sale of the common stock at

stock

holders of $34,998,500 Debentures
on

latter

$11). Due

The New England G, & El plan
that the new collateral
trust bonds and $7,762,500 of new

subject

would

$10 a share (sub¬
ject to approval of General Pub¬
lic Utilities if the price was uhder

since (under the present
this would mean sale at

preferred

eral Public

proposes

;

not
provide the
$4,312,500 necessary to
the plan,
some
addi¬

tion of

decrease

seems

apparently
earnings. ' J '•

com¬

it could be obtained
entirely from
the
sale
of
New
Hampshire

new

being offered to the
public, after competitive bidding,
with the proceeds going to Gen¬

proposed funded debt of NEGEA
may be partially effected through
increased
cash
available, from

operations. It

is entitled.

previous plan had, pro¬
vided for sale of $22,500,000 sink¬
ing fund collateral trust bonds and
$11,500,000 of new common stock,

the

The

conservative side.
The

the public.

capital
on

complete

$10,000. It might
also be feasible to issue additional
bonds py a new issue of preferred
appears

which

stock

cash

amount to about

sihce the

consumation

subscriptions to the

mon

be replaced by 2%s the interest
savihg after Federal taxes would

structure

plan;

the stock to

property is
forma earn¬

ings
(1945)
would
be
around
$209,000.
On the other hand i1
should be possible to refund the
institutionally held $1,930,000 1st
3V2S of 1963. Assuming these can

$tock,

the

-the plan is said to
be# assured if
General Public Utilities takes all

ican

The Amer¬

reasons.

almost

problems .with you
firing line in your
communities, tests the
the

Among us
always, there

would receive

cash payment of

and

validity of our
brings us fresh

partici¬
pated in these

able for

and

are on

states

have

members being
sovereign countries the Fund

holds that,

rector

your

Labor, too, this exchange

needs

who

num¬

espe¬

requests and to continue these
conferences. For the U. S. Depart¬

this

U. S.. A. have taken opposite posi¬
tions on one fundamental ques¬

The

as
delegates, I have been
cially pleased to accede tp

many

here

Commis¬

X/.j''....■n.V'H.jV::

union leaders.
I am glad to

discussions of par values of

happy to wel¬

group of State Labor

and £-

WASHINGTON, - Dec.
4 —
During the World Fund's current

;

economic system.

our

As in past years the U. S.
Department of Labor is

would

imperil Fund. Six nations
postpone parity-fixing.

-:Secretaiy-:-©fv£&b0i*f^

<•>'

On Nov, 25, New England Gas & Electric
the SEC an "alternate" recapitalization plan,

5^ 4946^

Making Labor Legislahon Work

;

plan presumably will
through the SEC

new

proposal
changed

nei?

concession.* to

market' conditions.

Thutsd$y+Becembfir

Total

—

gas

i-J

..—

35,283 100.0

Source: U. &. Department of the

Interior, Bureau of Mines.

Major Industrial Consumers
"

The major

*A copy of Mr. Hauser's report
to the Secretary of Commerce on

"The Impact of the

which

the National
1946.

Coal Strike

coal

are

industrial

themselves

consumers
industries

supply basic and essential

Economy," Nov. 27, ingredients for the entire indus(Continued on page 2902)
.

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4548

Volume 164

CIO

2889

Opposes Peacetime Unionization
Military Conscription

of Bank Employees Dangers of Resbictive
Labor Legislation
Against Public Interest: Baker
GREEN"*

Adopts resolution expressing its
opposition, and calls for U. S. to
cooperate in establishing a fall
understanding among the na«.
tions, particularly among the Big
Three, to the end that world
peace may be assured.
19, the Congress of
Organizations at its
Eighth Constitutional Convention
at Atlantic City; N. J., formally
adopted a resolution condemning
peacetime military ? conscription,
on the ground that it would im¬
pede international cooperation and
joint action through the United
Nov.

bargaining agent with no responsibility to keep bank on a
sound financial basis came between employees and management,

man

bank, through
the

nation.

democratic

the

same

and

caused

all the offices of the bank would

w o r

Amer-

CIO,

filed

the Union

sufficient

per¬

sists, the questions involved will

j, Stewart

hav.e

Baker

determined

the

York

there

between

came

cause

n a

for

return

country in the year
there

and

are

vital

re¬

that

Chief among these are the free¬

founded and upon which human
progress in the days to come must
be built.
All these freedoms are

the
Green

William

fundamental and the full exercise
of each of thepa is essential

less hectic.

preservation

"good old days" and that it

of these freedomsr—the freedom of

job

our

another period

fore

view of the disturbing

which confront

conditions

today, it would

(Continued on page 2927)

want to discuss with you on this

important occasion the status and
the intrinsic significance of one

future and

tQ the
democracy.
I

memories deceive

heights of productive achieve¬
ment, there is reason to hope that
the way may soon be cleared for

of prosperity.

present, which we must
undamaged for the fu¬

doms upon which our nation was

simple and

our

to the

enterprise.

to work for. a better
a

better life.

•

V 'i"J.

•

Enterprise
address by

•*An

34th

Today America is the last cita¬

' Wherever

del of free enterprise.

Borough
Queens, New York City, Dec.

Chamber
of

Mr. Green be¬
Dinner
of

Annual

of Commerce,

else

look, throughout the-en-

(Continued

4, 1946.

page 2924)

carry

occupation duties in for¬
mer enemy territories and to dis¬
charge our obligations under the
Charter of the United Nations. We
cut our

ANNOUNCING

THE

FORMATION OF

all-pervading obligation
assure
our
national security

are

pleased to announce

have the
to

maintenance

through

the

world at

the association with our firm of

Securities

Aetna

.,•■

/ )

•

peace.

military

expanded

lishment

Corporation

toward maintenance

drive

The
of

voke international

armament

INVESTMENT

GENERAL

international
cooperation and joint action
through the United Nations. More¬

TRIBUTORS

whole and to impede

assurance

and the

UNDERWRITERS
OF

BANKING

AND

can

assurance

of actual

come

against those

only through

tional acceptance of

DIS¬

1 Wall Street

WALL STREET. NEW YORK

HANOVER

2-8195

TELETYPE

5, N. Y.
1-1613
4

lines

IRA

KRUPNICK

A. SEARIGHT

Vice President & Secretary

can

be fully met

listment and by

military

needs

SfacA SccAanyes

135 South La Salle Street

t Wall Street
GEORGE

JAMES

legitimate

33aeonJfAipp/e S(?o.
ytiem6ers Al/etv JZ>rA and (/Aicayo

President

interna¬

the principles

of the United Nations.
Our

New York office at

SECURITIES

protection against attack. Our ba¬
sic

BUSINESS

WHOLESALE

CORPORATE

opening of

Temporary Office

in an era of atomic energy

it affords

CONDUCT

com-

jietition, to pervert the thinking
of our youth and our people as a

over,

MR. HAROLD H. SHERBURNE

estab¬

only to pro¬

serve

can

NEW YORK CITY 5

CHICAGO 3

Telephone Digby 4-3860

Telephone State 3100

D. COLYER

Vice President & Treasurer

December 3,1946

by voluntary en¬

DECEMBER

2, 1946.

elimination of ob¬

stacles which have prevented

full

of the methods of volun¬

success

tary recruitment.
the

include

caste

Such obstacles
system

the

WE TAKE

PLEASURE IN ANNOUNCING

THAT

services, the low pay scale of en¬
listed

and

men,

discrimination

pleased to announce that
MR. WILLIAM M. BENNETT

practiced with respect to enlisted
men; now,

are

MR. ALFRED W. BUSBY

therefore, be it

WITH US IN CHARGE

IS NOW ASSOCIATED

RESOLVED, That this Conven¬
tion

expresses

its

opposition

has become associated with our

firm

OF OUR RESEARCH

DEPARTMENT

peactime military conscription. It
__

reaffirms
urgency

its

recognition

establishing full

co~

among

•;v

;

the

operation and

VAN TUYL & ABBE

understanding

all the nations, and par¬

Investment
....

...'

72 WALL

the end that world peace may be
assured through full and open co¬

W& !,VK
„

fi-f >

TEL. RECTOR
as <?r

"1-. -v.

Exchange

'V-/'-:l

STREET, NEW YORK 5

•

Reynolds & Co.
New York 5

120 Broadway

ticularly among the Big Three, to

operation in the JJnited Nations.

'' %

r-'s

Member# New York Stock

Securities

America—Last Citadel of Free

obligation to

forces

are

ture.

life seemed to

adjustments yet to be made if we
is
are
to succeed in reaching new

the

'good old
days" when
more-

there

preserve

riences,

wish

and

fundamental

the

sometimes

things that are
some truths

are

principles;
rooted ih the past find imperiled

and

internatio
e

eternal

are

some

social,

economic

e x p

are some

there

that

Be¬

of these

trying

breath .of
is the inspira¬

very

But there

onv e n-

venience.

is the
progress

timeless,

of Yet we know in our hearts and
just past minds that we can never go back,

have fallen far short of our poten¬

tialities

and

tion and incentive of civilization.

the accomplishments

"While
our

tyr. Baker also says:

"The management of the bank
vigorous drive for continuation
in the peactime of the military believes it is against sound public
controls and military and warlike policy to have unions of employees
trends of thought into a period of of banks which have public and
peace.
This drive carries serious
trust functions, v The management
dangers for our own democracy
at home and for the maintenance also believes it Vduld be unfortu¬

Our nation has an

if the Union

and

highest court of New York State
State
Labor and the U. S. Supreme Court."
Mr. Bakes cites the first year of
Relations Board to be certi¬
fied
as
the
representative for peace as" having "been filled with
collective bargaining purposes of inconsistencies and paradoxes. We
the clerks in the seven of our 53 have had full employment, but
full
production.
Incomes
offices which are called the Up¬ not
town Division."
"The petition," have been high,? but their pur¬
Mr. Bakes goes on to say, "asks chasing power has been cut by
In his obser¬
the Labor Board to declare that the rise in prices."
employees in the seven branches vations as to general conditions,

nate

Change
life

with

New

ldwide

wholly inappropriate arid im¬ distress, ' na¬
priva¬
practical. i
If the Labor Board tional
should not deny the ^petition of tion and com-

Work¬

which,
says
Mr.
Baker,

of world peace.

with others deplores the development of do¬
international emergencies which for a decade at least
common

have

assure

unit - for collective

Labor in

mestic

96,|

they, like the rest of the na¬
tion, are actually aware of the re¬
sponsibilities which this nation alone constitute an appropriate
collective bargaining."
has necessarily assumed for the unit for
assurance of the complete destruc¬
He adds:
tion
of
the
Fascist
menace
"This move is a part of the
throughout the world and for the Union's stated effort to organize
maintenance of world peace.
the clerks of all New York City
In recent months there has been financial institutions.
time

bargaining consisting of employ¬
ees in the same jobs in less than

petition

the armed
forces, very acutely conscious of
the dangers of any trend toward
militarism in the operation of a
service

event,

any

without interference.

Office

sional
ers

means

Profes-j

and

the

Many millions of young Amer¬
icans
have now returned
from

efforts

Local
United

"has

Peacetime

the

clerks

resolution fol¬

—

ating at all times i tdl serve; its
banking and trust customers, both
private and governmental.
In

to unionize the

ic a,

Military Conscription

as they did in England, Says anti-labor legisla¬
government control of labor. Lays down five-point
labor-management plan as: (1) cooperation and mutual trust of
management and labor;. (2) free collective bargaining; (3) volun¬
tary j arbitration, wherever possible; (4) creation of managementlabor committees dealing with improvement of production and
industrial techniques; and (5) ;general recognition of right of '£■:
workers to organize trade unions and right of employers to manage T

employees and the management a
union \ bargaining • agent with ho
responsibility to keep the bank on
a sound financial basis and oper¬

against the at¬
tempt
which
is being made

«•»

embrace socialism

tion

the annual

are his
strictures

lows:

years

moment

York,

recruitment."

Resolution R-22

we mastshqw; fhe world free enterprise system is superior,
Mr. Green wafns restrictive labor legislation may cacse workers to

Stating

;

report of J. Stewart Baker, Chair¬
of the Board of the Bank of the Manhattan Company of New

legitimate military needs "can be
fully met by voluntary enlistment
and by elimination of obstacles
which have prevented full suc¬
cess of the methods of voluntary
the

operating income of Bank of Manhattan Co. higher but net
earnings lower than last year.
»
"
Gross

Nations and ifi unnecessary, since

President, American Federation of Labor

union

Industrial

The text

By WILLIAM

Chairman of Bank of Manhattan Co. sees unfortunate results if

2-8600

2890

v.;'

Financial chronicle

the commercial &

•

Coast

Atlantic

Connecticut

mmim

Dealer-Broker Investment

Peck,

York 5, N.

Recommendations and Literature

Line.

Circular

—

63 Wall
Y.

—

Co.

of Long

Adams

Street,

tive

Also available is a memorandum

Standard Screw, v

Memorandum
ation

Boston

& Depressions

Business Booms

Edition—Hanaford & Tal¬

—1947

bot,

519

San

California Street,

Francisco 4, Calif.

Maine

Railroad

4, 111.

available is

circular

or.

covering
in digest
-form the relationships of educa¬

and the prob¬
lems of trusts, estates and inherit¬
ance taxation — Public Relations
tional philanthropy

Clare-

College,

office, Pomona
mont, Calif.

orandum

Acro-Chemical Co.—New mem¬ & Co., 208 South La Salle Street,

orandum—Greenfield, Lax & Co., Chicago 4, 111.
Inc., 40
Exchange Place, New
Collins Radio Company—circu¬
York 5, N. Y.
Also available is a new memo¬ lar—Adams & Co., 231 South La
randum on United Utilities Spe¬ Salle Street, Chicago 4, 111.
cialty Corp.

pessimis¬
statements—bulletin with a

lenge to the barrage of
tic

Insulator—Memoran¬ —Analysis — L. F. Rothschild &
dum—Peter Barken,
32 Broad¬ Co., 120 Broadway, New York 5,
American

way,

N. Y.

New York 4, N. Y.

stocks for income
and capital appreciation—Strauss
Bros., 32 Broadway, New York 4,

memorandum

N. Y.

Alton Railroad

list of suggested

Connecticut

American Metal Co., Ltd.—brief

ing

with data also on
Co.—in the "Cor¬

Co.

—

Railway

Circular

—

Light¬

Adams

poration' News-Letter" — Penington, Colket & Co., 70 Pine Street,
Probability of Profits Increased— New 'York 5, N. Y.
memorandum on insurance secur¬

ern

Reilly

Delaware Lackawanna & West¬

Natural

Gas^-study of a growth

industry—Ralph E. Samuel & Co.,
New York 6, N. Y.

115 Broadway,

—B.

Also available are data on: Bar-

and

CARTER H.CORBREY&CO.
Wholesale Distributors
Middle West
:

— Pacific Coasts
Vor
'

DISTRIBUTION

650 S. Spring St
Michigan 4181

135 La Salle St.
State 6502

LA 255

CG99

*Wells-Gardner & Co., Com.

*Jessop Steel Pfd.

available

are

circulars

Request

yml hLDavls & Go.
Established 1916

Principal Stock Exchangee

Chicago Board of Trade

10 So. La Salle St., Chicago 3

Tel.Frahklin 8622
Teletype CG 40S
ladiampolis. Ind.
•
Rockford, 111.
Cleveland, Ohio
\

Broad

Street,

aAruba

Combined

Canada.

Revised brochure

including

—

earn¬

South La Salle

Street, Chicago 4,

111.

diana, Inc.

— analysis—First
Bos¬
Corporation, 100 Broadway,;
'
*£

ton

New York 5, N. Y.

Co.—memorandum

& Co., Inc.,

lar

—

Rayonier, Inc.

482 California Street, Sa

Francisco 4,

Nathan

Also
on

sive

memorandum

?120

The

Chicago 4, 111.

available

Chicago

memoranda

are

Corp.

Walnut

Street,

and

The-

Philadelphia

Pa.

Public

ice

N. Y.

Schenley Distillers Corporatio
of articles they hav
running in the Chronick
write to Mark Merit, in care oS
—Brochure

Northern Indiana
ice

Public

Company—recent

Serv¬

analysis-

Fred W. Fairman & Co., 208 South
La Salle Street, Chicago 4, 111.

been

Shoe

Company

Fifth

Suburban Propane Gas Corpor¬
ation—Study—Edward A. Purcell

Co., 50 Broadway, New York 4

available

Also
—

circular—

Seligman, Lubetkin & Co., Inc., 41
Broad Street, New York 4,

available

memoranda

are

Indiana Public Service Co.

Corp.; Mo¬

Selected

our

208

SOUTH LA

Gulf, Mobile & Ohio Railroad—
Analysis—R. H. Johnson & Co.,

Haloid;

64 Wall

Street, New York 5, N. Y.

■We

Maintain ^Active Markets

Paying Common Stocks.

Analysis

CHICAGO
Telephone
Direct Private

Bell

4, ILLINOIS
Randolph
Wire

System

4068

to New

637

Byllesby and Company

South

135 So. La Salle

Telephone State 8711

,
-

New York

Salle

Street,

Co., 12
Chicag

available

Also

circular

Labor and Management Must

luryl the Hatchet
By PAUL G. HOFFMAN*
President

Studebaker

Philadelphia

■

Corporation

industrialist, in recounting appalling losses to ^the
widespread strikes, says labor and management must
bury the hatchet if our economy is to survive. Holds new sef 'bf
nation from

rules must control collective

rather than coercive,

bargaining which ivili be persuasive
and that reason rather than emotion should!

prevail. Concludes unless management and labor demonstrate
quickly a desire and ability to bargain collectively* there will be
legislation damaging to both.
i
_

have

propose

want

with
that

you

plenty of worries but I

Bureau

of Labor Statistics!
98,225,000 man days were lost' be—]
cause
of strikes during this 9month period. That is an all-time
high, according to the BLS, :and
compares with an average of 43,630,000 man days lost in corre¬
sponding periods during the yearsj
1935 to 1939. These figures would

Our

failure

suc¬

t o
about

" put

indicate

Teletype

Pittsburgh

sure

you

CG 273

Minneapolis

loss

workers

of! at

I am;
will agree that these -fig-|

ures are appalling,
but they "tell
*only part of the story. They coveonly the direct wage loss as a-re
suit of strikes.
They do not in¬

our

pro¬
Paul

Figures tell
only part of the

Hoffman

clude

collateral

losses

wage

and

profits in trade and service
for industries, nor do they include! the

story, but
what they, are worth I should like
production and wages lost in! in¬
to cite a few which
represent an
dustries forced to shut down "be
estimate of the enormous eco¬
nomic
loss which strikes have cause of strikes outside their fywn
caused

during

the

months of this year.

first
nine plants. I know from personal -ex¬
According to perience how staggering losses': o
this kind

Street, Chicago 3

least $750 million in wages.

recon¬

—

the

labor-

cessfully

relations.

gram.,

• j

going to be reasonable. I
sharing only three of them with you.
The first worry I

Incorporated

J :>

York

Chicago Hardware Foundry Co.

entire

Brochure

Caswell

—

3, 111.

•

jeopardy
in

NORTHERN STATES POWER CO. 6% & 7% Preferreds

H. M.

Dividen

4, 111.

version

ST.

list

American Airways Corp.—
Study—Sills, Minton & Co., Inc.,
209 South La Salle Street, Chicago

worry

DEEP ROCK OIL CORP. Common

SALLE

Priced

N. Y.

Hydraulic Press Manufacturing that
problem
Associated rTrattS^oi*t, Tnc.^n^l Co.—-Detailed Analysis—Comstock
already
has
alytical memorandum — Budkley & Co., 231 South La Salle Street, cost
us
bil¬
Brothers, 1420 Walnut Street, Phi¬ Chicago 4, 111.
lions
of
dol¬
Also available. are analyses of
ladelphia 2, Pa. •> •
•
^
lars.
It -has

analyzing these Bonds*

Low

Universal Zonolite Insulation
at

managem e n

INTERSTATE BAKERIES CORK Common & Preferred

Write for

Corpnratioi

New York 1

Wis.

Osgood Company

Avenue,

—

& Co., 225
Street, Milwaukee 2,

Mason

Distillers

Schenley
350
M.

Nunn-Bush

Bird & Son, Inc. and'Northern

Alabama Mills; Diebold, Inc.,

Utility

Soundvie

Rouse & Co.,
New York 4,

Serv¬

Co.—study—Doyle,
& Co., 135 South La Salle Street,
Chicago 3, 111.

Also

memoranda

Purolator Products; Upson Corp.;

SM's of '52

comprehen

Manufacturing- Co.—

Analysis—Steiner,
25
Broad Street,
O'Connor

Indiana

Corporation—

Gruen Watch Company—memo¬
randum— Buckley Brothers, 1420

Broadway*

Iron & Steel; Barcalo;

Central Public

a
on

Pulp Company.
Rockwell

Northern

—

Muter-Co.

hawk Rubber; and Taylor Whart¬

jL.

Calif.

Also available is

Trinity Place, New York 6, N. Y.

also

fRED. W. BlSMANCQ

detailed stud

—

of situation and outlook—J. Bart

Company—Circular

Motors

Salle Street,

Goldfields

W. L. Douglas Shoe Co.jiHart-

■

Office

Square, Boston 9, Mass.

■

I SINCE 19081

Circu

—

Lerner & Co., 10 Post

& Co.,

New York S, N. %
Also available are

iPrommenl

Aspinook Corporation—Circular

Trust

Unterber

Co., 61 Broadway, New York 6

ings for nine months ended Sept.
30, 1946—Comstock & Co., 231

N. Y.

progress

Ralston Steel Car Co.

Long Bell Lumber Company

Hayden, Stone &
Co., 25 Broad Street, New York 4,

report-r-Nesbitt, Thomson & Co., Ltd., 355 St.
James Street, W., Montreal, Que.,
—

—

Stone & Co.,
New York 4,

Pan

lar—Hicks & Price, 231 South La

Limited

National Bank

Co.—Analysis—C.

Greyhound Corporation—Circu¬

ford Empire; Lanova

Members

General

memorandum

4, N. Y.

•-^ard ^

''Seismograph ServiceCorp.,Com,
on

DePinna

Foundation

Also

Grand

Public Service Company of In¬

—Seligman, Lubetkin & Co., Inc.,
41
Broad Street, New York 4,

Engineering.

Snap-On Tools Corp., Com.

•Prospectus Available

CakTilc:,

York f, N* Y.

Tennessee Products and Wellman

IftSANGEUSfc

CHICAGO 3

Mem¬

Argo Oil-Corporation—Descrip¬

;

York

MARKET

Lily Tulip Cup Corp.
orandum— Hayden,

N. Y.

•

Co.;
Corporation;
Precision Corpora¬

Materials

tion.

Building,
^

Rubber

O'Sullivan
Creek

Liberty Street, New York 5, N. Y.

tive circular—Seligman, Lubetkin
& Co., Inc., 41 Broad Street, New

UNDERWRITERS
S EC 0 N D A R Y

Silver

Pizzini

Herrick, Waddell

Higgins, Inc.; Highlights of Wall
Plastics

Stamping

Golden Crown Mining Co.;

Street;

Member, National Association
of securities Dealers

First

Broad Street, New

Co.; General Machinery Corpora¬

tion;

Broad

Divi¬

tive yield—in the current issue of
"Railroad and Other Quotations"

calo Manufacturing Co*; The Com¬

Shearing

Lackawanna RR NJ

Mortgage
"A"
4s—
memorandum
indicating attrac¬

5, N. Y.

mercial

—

sion

Co., Inc., 40 Exchange Place, New
York

&
Co., 25
Street, New York 4, N. Y.

East

American Phenolic Corporation

—Memorandum—J.

dum—Hirsch

memorandum—Loewi

N. Y.

Peck, 63 Wall Street, New York 5,

Investment Risks Reduced with

ities—Ceyer & Co., Inc., 67 Wall
Street, New York 5, N. Y.

Co.

memoran¬

Corp.

Gas & Electric

Columbia

Cuide to the Perplexed—a chal¬

Nickel

Straus-Duparquet, Inc.
Co.—Brief mem¬
outlook—Brailsford —Study of history and outlook—
Troster, Cu'rrie & Summers, 74

waukee Railway

Street, New York 5, N. Y.

—brochure

Public

International

Canada, Ltd.—Detailed

Utility

Public

Central

add Education

Bank

Rapids 2, Mich.

N. Y.

Railroads—detailed study of the

Estate Planning

National

—

514s
Philadelphia Bonds— situation, with analyses of thirty
of '52 and Consolidated Electric
valuation and
appraisal—Stroud leading roads — Merrill Lynch,
and Gas Pfd. — Comprehensive
& Company, Inc., 123 South Broad Pierce, Fenner & Beane, 70 P;ne
study and analysis in brochure
Street, New York 5, N. Y.
Street, Philadelphia 9, Pa.
form—Fred W. Fairman & Co.,
Also available
is a valuation
Securities Outlook — monthly 208 South La Salle Street, Chi¬
and appraisal of Railroad Equip¬
ment Certificates and a compila¬ discussion of topics of interest to cago 4, 111.
tion of Pennsylvania Legal Bonds. the business executive and invest¬
Chicago North Shore & Mil¬
ors—G. H. Walker & Co., 1 Wall

City

■■■*

—

Also

December, 1946—containing Mar¬
Circular — Walter J. Connolly &
ket Analyses, 1946 Price Record of
30 Representative Unlisted Com¬ Co., 24 Federal Street, Boston 10,
Mass.
mon
Stocks and
Forecast, and
data on sixteen interesting situa¬
Central Hanover Bank & Trust
tions—J. Arthur Warner & Co.,
Company — bulletin—Laird, BisInc., 120 Broadway, No v York 5,
sell & Meeds, 120 Broadway, New
N. Y.
York 5, N. Y.

monthly bulletin —
Amott, Baker & Co., Inc., 150
Broadway, New York 7, N. Y.
—

Co., —

interesting situ¬
Fred B. Prophet Company—De
Brailsford
& Co., 20£
tailed memorandum—De
Young
La Salle Street, Chicago
Larson & Tornga, Grand Rapid
•

South

;

Pont, Homsey
Milk .'Street, Boston $1

for

Bulletin

Over-the-Counter

Amott-Baker Realty Bond Price

Co.—Descrip¬

analysis-rdu

Mass.
Products

Steel

Queen Anne Candy Co.
Averages

Parker Appliance

and

Co.,
Indiana

Automatic. Fire Alarm—memo¬

Bell
Lumber
Co.,
Manufacturing -Co;

Miller

New

randum — Mitchell & Company,
120 Broadway, New York 5, N. Y.

ft I* understood Iha£ the firms mentioned ioill be pleased
to send interested parties the following literature:

Thursday, December 5, 1946

*Part of an address by Mr.
Hoffman before the American So¬

ciety

New York

can

be.

I think you will

appreciate its seriousness when I

Engineers, give *rnv the following data conCity, Dec. 3, 1946.
(Continued on page 2927)

Mechanical

THE COMMERCIAL

Number 4548.

IVolume 164,,

2891

friend

Opening Braescla in Miami, Fia>

MIAMI, FLA.—Corrigan & Co., Pan American IBank Building, is
business because of demands of other intsrests of'
George M. Corrigan, President. About Dec. 15 BtraUsS Bros., In&,
New York investment firm,; will open a Miami office in the same

terminating its

By-GEORGE MEANT*
Secretary-Treasurer of the

CHRONICLE

FINANCIAL

Strauss Bros.

teamwork in Industry
.

American Federationof Labor

toteamwork betwean labor andempJoyer to the

Pledging AFL

•

worker must

can

come

right to strike
restrictive labor

from his

the market.
Now, a word to parents who
lave
reached
the age of
the

which

: V

may

the

field of labor-

management
relations.
critical years

immediately
of

in¬

period

our

mean

dustrial
a

EACH

will

period of fairly tranquil labor
relations, I do not know. But I am
a

by Mr. Meany at
Anniversary Dinner of

address

*An

25th

the New York

terms
and

extent.

fullest

Building-Congress,

26,1946.

Inc., New York City, Nov.

for

country.

that we

ajre

employer to
A few weeks

By ROGER

this action the Presi¬
stated that it meant a return
free market with free collec¬

bargaining and that it placed
squarely upon management and
(Continued on page 2919)
tive

cash rather than goods

various

goods
As

offered.

result,

ment of those

wages

...

positions

the
that

achieve full

higher and
higher stand¬
ard

of living.

take

this

job on, not as

agreement
road

the
of a

to advance

small

Reuther

the expense

how

of the rest of the na¬
it on as the van¬

ance,

going to be.

and

the

And

productive power in
much out of bal¬

and no

amount of wishing

pious Republican Party
rations will change those

year old

these managers are striving to get
rid of the old stock and especially

the

from

miles

Not

Boston.

only

towns

ban

around

subur¬

many

Roger W. Babson

but

Boston,

considerably

various

small

there

are

motor

visit

and

decla¬

ersatz

adulterated and

the*i War.

during

friends will mever

Insist

upon

Now, these price ceiling have been
taken off within the past three

cities

and

cities.

course,

true

all

weeks.

jumped

whom

people

you

In view of-the above,

better values by buying

home

from

Reuther

power we

another

are

going to get into

get when dealing with green

depression. X don't have to clerks

(Continued on page 2898)

19, 1946.

not

witp

whom

are

you

not

dollar

bill

enclosed

the most welcomed

seems

should ;be

(Special to The Financial Chronicle)

LOS

Nunn-Bush Shoe Company
COMMON STOCK

A Memorandum Sent

We have prepared

Soder

Co.

bulletin

...

-&Y-:

MASON ST.

MILWAUKEE (2)

■

;JNeORPORATEDv"

.leading

field

v"'"

concern

the

radio

commercial

eqi^ipment. Sound financial v
and
competitive position
.

after reconversion.

'Circular

Request

ADAMS Cr CO.
231 SOUTH LA SALLE

STREET

CHICAGO 4. ILLINOIS

PHONE STATE 0101

TELETYPE CO 361

V-

Aeronca Aircraft Corp.

Baltimore Transit Co« Pfd,

Chgo. Auro. & Elgin Ry. Units
Howard Industries, Inc.

Hydraulic Press Mfg. Co.

Corporation

Long-Bell Lumber Ccmpany
* Miller

Manufacturing Co*.

Seven-Up. Texas Corp.
St. Louis Public Service Co.
TralXmdbile Company

Detailed analysis available on

request.
'.v"

COMSTOCK & CO.

■

CHICAGO 4

135 SOUTH LA SALLE STREET
231

CHICAGO 3, ILLINOIS
,

■
*"• 'p

Common Stock

Telephones Dearborn 6161

Company

COMMON

f-v-

Mastic Asphalt Co.,

Copies available upon request

Stock Exchange

G„

Fewel,

Collins Radio

DOYLE, O'CONNOR & CO.
V
Members Chicago

with

and

Active Trading Markets

225 EAST

Hoffman & Good¬

previously

was

Brashears

Northern Indiana Public Service Go.

★

associated

win, 550 South Spring Street. Mr.

;

Request

—

Fred

become

with Walston,

your

have

Old Ben Coal

CALIF.

Bunting^ and

Sdder

ANGELES,

John

wise re¬

enable

This will

cipient.

personally acquainted.

With Walston Hoffman

the best pres¬

if cash is perhaps

tragic
know.
Moreover, you have the ent we can give those whom we
that unless
truly consider our friends. Hence,
the American workers and Amer¬ privilege df making returns and
ican
people
can
get increased .of getting replacements in the the purchase of an attractive
wages and increased purchasing case of breakage which you may Christmas card with a check or

Constitutional Con;,Whition of the Congress of Indus¬
trial Organizations, Atlantic City,

who

subscription to

the publication in which you read

forecast that Christmas

Many merchants have
at the opportunity to
city of 25,000, where my summer mark up goods for the Christmas
home is.
Down there the other trade.
They realize that it is
day I found
better Christmas their one chance; yes, their last
goods for less money than could change; to cash in at high prices.*
Therefore, I predict that after
be secured in Boston.
Christmas this country will see
Therefore, my first suggestion the greatest mark-downs in his¬
is that you purchase your Christ¬ tory.
Why Not Give Money?
mas, goods where you live.
You
„..f
often get

this advice.

Now, as to prices: I venture the

this may not
states, but I am
sure it
applies in Massachusetts.
Take Gloucester, for instance, a

gets as good

appreciate

better goods.

ceilings during the past few years
on most of the goods in the stores.

one

chil¬

material.

in Northern small
towns as
in the big

I find that

some

friends

quality or else give

values and as low prices by mak¬

land.

relatives

your friends a check or certificate
which they can use next year for

prices will
be the highest this year of any
Christmas
for
many
years
to
come.
There have been price

cities in New Eng¬

dren,

thank you for Marache & Co,

shoddy

this

any

good^
Your

basic economic facts,

©t the Eighth

XL J., Nov.

prices, and profits

-^Speech made by Mr.

bad

America

tion; we take

wages,

universal
the high

are on
the next depression;

power

people at

guard in the economic struggle to
create the kind of relationship be¬
tween

why is this? It is because the re¬
lationship
between
purchasing

section

the Amer-

ican

there

only thing they are still debating
is when it is going to happen and

fighting

welfare

in the pa¬

hell bent for another
depression.
The economists in
America are not arguing about
whether there is going to be a
depression,

must bo marked down
to $1 in the stocktaking which will
occur
after Christmas.
Hence,
a

made

ing purchases

Every day you read

pressure

group

consumption

per we are

a narrow com¬

mon

full

economy.

will give us a

this column hasn't

tremendousHamuurit. of junk

this year.
Department managers
have been told that anything over

My home is
about fifteen

employment, full pro-

and

auction,

necessary

Many big city stores are putting
out a

advice. *.

about

absolutely

some

sound

good,

going to fight."

that

giving

now

Workers, CIO

con-3>

people

presents, particularly by older

paring the
quality
and
prices of the

The CIO takes on

move¬

local

I have just returned from Boston, where I attempted to do some
Christmas shopping. To tell the truth, 1 did not buy anything,-but
i
'
spent the en-^
———i ilwlVi iWiwni.' r"it V Vi i*i Utiji>»fl> fiii' iiif 'mil ttilli l iilwi
tire day comQuality and Prices

prices. Urges CIO accumulate war chest of $12 million and warns
"if industry gees on another sit-down strike in next wa^e cycle, we »,

the

thus reduce their estate taxes.

can

REUTHER*

the responsibility of leading organized labor
In the struggle to achieve equity between wages, the cost of living,

said, "Grandpa, I would? like a
subscription to our home news¬
paper."
This seemed very > sen¬
sible on the part of: the boy and
certainly it is an easy way -for me
to select a Christmas present for
him,
I wonder if every reader

Would

who

responsibility for struggle of organized labor
to achieve equity wages and higher living standards, Mr. Reuther
maintains American industry can pay higher wages without higher

stant

BABSON

purchasing rather'than resort to stores in big cities. Holds prices
of merchandise are high and quality poor, and suggests giving

Asserting CIO takes

and

caution in buying, and recommends

advises

Mr. Babson

readers

hard

what- he wanted for Christmas, he

fhiistmas Shop^ng Advice

teamwork

;

President, United Automobile

Walter P.

PENNY

worked

have

been

and

In taking

By WALTIIER

who

I know-it is difficult

OF TAX.

industiy Can Pay Higher Wages

are

CHRISTMAS

PAYING

WITHOUT

wages.
dent

the

PERSONS

THESE

FOLLOWING
;

President Truman removed
practically all that was left of our
war-time restrictions by govern¬
ment in the field of prices and

George Meany

whether

there

leave

money. we

THIS CHRISTMAS AND EVERY

ago

ing, and strug¬
or

labor

the

Strikes, con¬
stant bicker¬

gle

between

1 s,

you

assure

can

thinking

up-

much

"Whether the

Will

run¬

thrifty to give away
$3,000 a year to each of our chil¬
Edward L. English
Wm. R. Edwards
\ Vincent M. Doherty
dren—yes, awful hard!
But if we
degree of accuracy what organized
labor as represented by the Amer^ sdite and staffed with the former peSrsonnel of Corrigan &Co! Tele¬ have any sense we will do it even
ican Federation of Labor is think¬ phone and teletype numbers will become those of Strauss Bros., Inc. if we keep the money locked up
so
that the kids can't spend it
ing about as we pass from a war¬
Edward L. English, formerly Vice-President of Corrigan & Co.,
time economy to an economy of will be in charge of the new Strauss Bros, office. Vincent M. Doherty until after our funeral!
peace—to an economy, we' fer¬ and William R. Edwards will be traders, and Wendell R. Vandemark
One Mare Suggestion
vently hope, of full production Will also be connected with the office.
I have a grandson who is away
and improved standards of life for
to school.
When 1 tasked him
all the people of

ahead

estate

.children^ br others.
YEJT, WE CAN GIVE $3,000 TO i

speaking to you tonight on the subject, ''Teamwork in Indus¬
try,". I have not the slightest thought in mind of attempting to proph¬
esy what the
- .
sure that I can tell you with some
future
in

our

/wife,

our

bring

v"death tax"

how

Supports

The

we &xe

ning; from 15^50%, according to

enterprise system, and opposes

part of free
legislation.

she

Come pri

envelope; and (4) recognition

pay

form and maintain trade unions.

what

only two things of
absolutely sure are:
(1) We are -going to die before
m^ny years and (2) there will be

prominent labor leader praises

"of workers' right to

select

Until the new, good-quality goods

writer:

return to free collecfive bargaining and free markets. Lays down essentials for teamwork as:
(1) joint recognition by management and labor of the
malion^l intereSt; (2) recognition that management has right and
responsibility of Jitfeitiing jirfttstry^iit
^ exploitatjront ^
workers; (3) recognition by all that purchasing power of Amerifullest extent)

wishes after the turn of the year
at mark-down Sales or else wait

So. La Salle St.

Dearborn 1501

Teletype CG 955

Teletypes CG 1200

THE COMMERCIAL & FINANCIAL CHRONICLE

Thursday, December 5, 1946

dwejllrigs.Apartroent houses are
now' showing

profits

the

with

ceilings, they point out. Through¬

country* it; is becoming

the

put

generally recognized, too, that the

NSTA Notes

lawmakers can't with justice keep

Though

much of its

some observers believe the hotel bond market has lost
attraction for speculation, they admit, albeit with some

hesitation, that it offers numerous opportunities for profitable invest¬
ment*.at least for the next five years or;
if ^
Inclined to look upon the hotel industryipsfone which, largely
because of increased costs, holds out the prospect-Of decreasing profits

—though, everyone should be re-^—
minded shrinking profits are still occupancy o£ithe premises but
since
a
few
profits—many professional buy¬ now, I especially
ers
who claim to have analyzed months ago When thie hotel help
the situation with a proper regard was granted a 20% increase in
for what they call the facts of the pay, the figure is somewhere be¬
tween 80 and 85%.
Occupancy
case are bearish in their attitude
and say they are only awaiting now is running around the 95%
the day when prices are down level and it is the narrow margin
far

enough fo warrant repurchase

securities which they re¬
fuse to hold any longer.

the

The

bonds which are now

point and this 95% point of occu¬
pancy which is leading to all the
speculative pessimism.
The profit statements for each
of the successive months since the

yielding 6% at present prices are
considered by this group to be at¬
tractive only from the point of market
view of the investor who
tent

receive only a small re¬
his money, yet a return

turn

which

is con¬

others

;

recognize

will

larger than what is currently ob¬

other places
conceivably might

tainable from
where
be

placed,
this:

Just

few years ago the break¬

point in the hotel industry

even

considered to be around 67%

last

late

;

Gold Too Low?
(Continued from page 2882)
to sell it in Europe for hoard¬

But in that case the

ing purposes.

higher output resulting from the
unofficial high prices would be
swallowed up by the insatiable
appetite of hoarders. There would
no additional gold available for
monetary requirements.

probably would relieve the indus¬
try only to the extent of compen¬
sating it pretty much for the pay
The other side of the
are

bond

picture—

bulls in the hotel

some

Nor would a unilateral devalua¬

of the South African pound

tion

provide a solution, except quite
temporarily.
The
higher
gold

the

level

new

the

last

South

devaluation

sympathetic

Sterling and of the Sterling Area
currencies would, it is true, pro¬

valuation

South

the

stimulus

business

would

boom

used

great

part

came

its way,

it is pointed put, to

retire indebt¬
edness, thus improving its over¬
financial condition while, at
the shme ' time; eliminating the
possible development of the cut¬
throat competition some of the
new
structures, in; a declining
market, could give to existing
properties.
all

The

complaints of the hotel
it is said by some of the
optimistic, arise not from a

lack

QUOTED

men,

business

the

from

lot of it*. Manage¬
ment
naturally chafes at being
compelled to pay higher labor

pressure

Exchango

40 EXCHANGE PI., N .Y.

Boll Tolotypo NY

but

costs, it is pointed out, but it is
worrisome mostly for the reason
of the difficulty it is experiencing
in getting all and the kind of help

Dlgby 4-4950

it would like to hire.

f-95|

filled night

are

Hotel

rooms

after night, it is

declared. The prediction that hotel
bonds will continue to be profit¬
able

investments for five years

based

pretty

much upon

the

fact the hotel trade

was brisk; for
that length of time after the last
conflict and some profess to see a

Firm Trading Markets

repetition of similar
now, after this war.
>

The

bond

its

men

peak

over

who

market has
the-

are

conditions

the

hotel

passed

bullish,

beyond
however,

market

apartment houses and commercial

J. S. Strauss & Co.
155

Montgomery St* Sari Francisco 4

Tflle. 67 61 & 62

EXbroofc 8519

Michael

Heaney

Louis

Gibbs

African

devalue.

giving away part oi
proceeds of British exports
by accepting lower international
pounds for them. This would in¬
mean

the

crease

balance

adverse

payment. Britain cannot afford it.
The: solution that is suggested
increase- of^the

all-round

is-an

price of gold. It is believed that
this would not cause
rise « - in

costsi

additional

prices »' and

production

that the stimulas derived
gold production would
lasting character.
....

Frank

T. Geoffrey Horsfield

Pavis

from it by

be of

Moreover,
round

as a

increase

result of
of

all-

the

price of
gold; the deficit countries would
be able to meet a larger propor¬
tion of their import surplus with
the aid of their gold reserves. The

alternative is to pay with worth¬
less bonds—for there is very little
illusion about it

this side that

in another ten years most of the

international
will

loans

scrupulous

now

default.

The

countries will borrow

they

can

less

deficit
much

and then default cheer¬

fully. The

granted

the

among

them will

feel

securities

wish

the

under

wartime

the extra funds that

Members Now York Curb Exchango

pound. But Britain is not likely

but rather

Mimnri Now York Stock

Mer¬
Lynch, Pierce, Fenner & Beane; Lester T. Doyle, Hardy & Co.
Trustees of Gratuity Fund: William K. Porter, Hemphill, Noyes
& Co.; and Richard H. Goodman, Cohu & Torrey.
National Committeeman: Charles M. Zingraf, Laurence M. Marks

rill

hotel

Directors: Abraham Strauss*, Strauss Bros.; John M. Mayer,

would be short in
existing circumstances when the
trend of prices is in any case in
an upward direction.

construction

SMASKAN & CO.

Co.
Secretary: T. Geoffrey Horsfield, Wm. J. Mericka & Co., Inc. Y*
Treasurer: Wellington Hunter, Hunter & Co.
} r.

African pound

cumb this time to i the temptation
of indulging in an orgy of new

.SOLD,

First Vice-President: Louis A. Gibbs, Laird, Bissell & Meeds.
Second Vice-President: Frank A. Pavis, Charles E. Quincy &

if be said—is long the period during which
South
African
gold
producers
industry, unlike
could enjoy the benefit of a de¬
war,;did not suc¬

the

after

j/i

let

market,

that

BOUGHT

concessions it has made to labor.
there

President:^Michael J. Heaney, Joseph McMarius & Co.
-

37%, it is pointed justment of the cost of production

to permit as much
increase in room rent
as

•

summer

out. Even the lifting of OPA price

ceilings
as
10%

The Annual Meeting Of The Security Traders Association of New
York, Inc., will be held on Friday, Dec. 6, at the Produce Exchange
Luncheon Club, at 5 p.m. The polls for the election of a Nominating
Committee will be open from 4:30 until 6.
This will be followed by the traditional Buffet Supper and en¬
tertainment arranged by John M. Mayer, Merrill Lynch, Pierce, Fenner & Beane, Chairman of the
Arrangements Committee.
The unopposed candidates for the various offices are as follows:
-

Is the Price of

degree

some

something

reason

commodities.,

price in terms of South African
the pounds would stimulate the out¬
fears entertained by the specula¬ put for a short time, but the ad¬
tive-minded, being progressively ditional rise in prices brought
smaller according to unofficial re¬ about by the devaluation would
ports, it is indicated by some. In soon largely absorb the addi¬
October, for instance, the bar and tional profit. The time-lag be¬
restaurant business of the hotels tween the devaluation and the ad¬
broke

substantiate

declined about

bears

The

was

many

money

break-even

80-85%

the

between

ceilings on rents when ceilings
being lifted from all other

are

little

possible, and curtail their im¬

ports

rather than borrow

Alternates:; Thomas Greenberg*
E.
IJnterberg & Co.; James D. Cleland, James D. Cleland & Co.; Elmer
E. Myers, B. W. Pizzini & Co., Inc.; James F.
Musson, B. J. Van Ingen
& Co., Inc.; and Stanley C. Eaton, Bendix Lutweiler & Co.
The following are the candidates for next year's Nominating
Committee, from which four are to be elected.

Nominating Committee: Harold J. Burke, Auchincloss, Parker &
Redpath; George V. Hunt, Starkweather & Co.; Milton Van Riper,
Mackubin, Legg & Co.; Waited Murphy, Jr., Walter Murphy Jr. &

Co.; Walter E. Sullivan, Elder, Wheeler & Co.; Irving Manney, Eisele
& King, Libaire, Stout & Co.; Salvatore J. Rappa, F. S. Moseley &
Co.; Thomas W. Gleason, Kirchofer & Arnold, Inc.; Jules Bean, Luckhurst & Co., Inc.; Otto A. Berwald, Berwald & Co.; James T. McGivney, Hornblower & Weeks.
BALTIMORE SECURITY TRADERS ASSOCIATION
The

power

Security Traders Association has nominated J«

tion to succeed Edward B. Freeman of Lockwood Peck & Co.
*

Other nominations

more.

through

Baltimore

Wilmer. Butler, Baker, Watts & Co. for the presidency of the Associa¬
are:

Vice-President: Charles Gross, Harry M. Sheeley & Co.

The increase of their international

purchasing

Hunter

Roggenburg & Co..
.5 National Committeemen

scrupulous among

try to borrow

Wellington

8^ Co.; Carl Stolle, G. A. Saxton & Co., Inc.; and Stanley Roggenburg,

Secretary: M. David Jones, Mackubin, Legg & Co.

dwellings. For instance, these men higher gold
price
would
un¬
that the effect of the possible
doubtedly increase the volume of
lifting of OPA ceilings on apart¬
international
trade, and would
ment house rents would be onty
facilitate the return to 'the mul¬
to increase the profits pn
the
money invested in the apartment tilateral system.

say

CTIYE MARKETS

N.Y. Title & Mtge. Go.

Series

G-2

B-K

AM0TT-BAKER REALTY BOND PRICE AVERAGES

revising

are

our

iqailmg

list

nationally known monthly Bulletin.

F-l

you

would

please, mail

your

receive

for

this

„

regularly,

request.
Chas. Gross

All Real Estate Securities

SIEGEL & CO.
89 Broadway, N. Y. 6

Dlgby 4-2870

Teletype NT 1-1942

Amott; Baker & Co.
Tel. BArclay 7-4880

M.David Jones

New York 7, N. Y.

Teletype NY *-585

H. Mitchell Bruck

Treasurer: H. Mitchell Bruck, Baumgartner & Co.
jiBoard of Governors: Edward B. Freeman, Lockwood, Peck &
Co.; E. Guy Gray, Mercantile Trust Co., and E. Elwood McClure;

Stein Bros. & Boyce.

Incorporated
150 Broadway

J. Wilmer Butler

the: annual business
meeting and -dinner of the Association to be held at Bonnie View
GoH Club, Mount Washington* at 6
Dee* 6,
i
;;

The election? of officers will take place at

THE COMMERCIAL & FINANCIAL CHRONICLE

''Nutiiber 4548

Volume 164

Traders Association of Philadel¬
phia. • His successor will be choseri by the Board of; Governors
at their next: regular meeting.' j;
■

■

♦

*
;

Pittsburgh's 53-day hotel strike was ended Nov. 22 with com¬
An increase of $2 per ton for
promise wage-increase agreements substantially less than the
strikers* ortginal demands. Managers of the eight hotels= affected pig iron has been announced," ef-i
fective last Monday. The action
were not disposed to negotiate during the term 6f the Duquesne
Xigh^ Co. strike which partially, coincided with the-hotel walkout. reflects increasing ^cpst?. pverf-a
Withput light arid power, hotel space in downtown Pittsburgh (went number of years,' it waS said. New
prices are $30 for basic grades,
begging. and the strike of hotelsemployes at that time represented progress in other scattered arenas, $30.59 for Touhdry;Ahdjma
Pennsylvania viss the none-too- and $31 for Bessemer.
a saving in operational costs.
happy host to more than it$' share
'/>V*
* /'/i* '
;
New contracts grant an 8-centof critical battle-royals, {ft
an-hour increase to tip workers
The Jones & Laughlin Steel
and a 12-cent-an-hour raise to
Pittsburgh, the Steel City, is
Corp., Pittsburgh, has announced
tiontip

with

workers,

addi*

feel

foremost

and

first

the

each
class when OPA lifts room rent
separate agreement
was
reached
with
Bartenders
Union, granting a $7 per week

that

raise

ceilings.

cents

tion

operations sharply, idl¬
ing some 75,000 to 100,000 men
in addition

•.

steel

The

;

The "Big and Little Inches"
sylvania, listing total assets of
The immediate •] conversion
of
$1,714,606 and liabilities of $809,717.
According to W. Wallace the Federally-owned $143,000,000
Kellett, President, the company's Big and Little Inch pipelines to
difficulties were brought
about the transportation of gas to the
by lack of \yoirking capital. The eastern seaboard has been strong¬

solvent/ he said, and ly urged/and equally strongly
can
straighten, out its financial protested by representatives of
problems through reorganization the UMW, the anthracite and bi¬
if creditors, for the time being, tuminous industries and the Penn¬
are restrained from instituting le¬
sylvania Railroad.
company is

$46,000,000 Penna. Turnpikes

for $46,000,000

p Bids

sylvania

Turnpike's
will

Penn¬

refunding

opened at

bond

issue

noon,

Dec. 17, at the Commis¬

sion's office in Ilarrisburg. The.
new issue
is to provide funds

reports, it appears
Pennsylvania State Gov¬
ernment holds the key to certain

$42,300,000
present
3%%
bonds due -196$^ and to defray

tions to the property.

received

four 65,000

used

j0- f

gas,"

for

J ;

at
this week's Miami convention,
the "big four" roster is com¬
plete. The others are:
James
J. Caffrey, Chairman, Securities
& Exchange Commission;-William K. Barclay, Jr., Stein Bros.

ceiver of Taxes, W. Frank Mar¬

shall.

bonded

city's

$30,000,000

debt
Mayor

dis¬
Bernard

was

Samuel.
fi

tj:

i;.

Crisis

Alfred
as

the

o'clock daily in
fore

many

ture

avid

vs.

opens

John

Washington be¬

national

audience,

scarcely less-important fea¬
bouts

are

and R. Victor Mosley, President,

Philadelphia Transportation Co.

* .v:■:;' ''1 -

V.i 3-6$ 2039, Pfd. & Common

)

F. A. Polls to Be Pres.

Street, Philadelphia, %

Chestnut

Phila. Phone

New York Phones
HAnover 2-2280

■

Locust 7-1477

WHitehali 4-2400

PH 257

Of Phila. Nal'l Bank
PA. — Last
Philadelphia
Bank, the city's largest
of the leading banks of

directors

National
and one

eric A.'

jPotts, age 42, would suc¬

and has been, with the

not willing to be

discount

50%

Ji^46- Jfclgfc--—r-, 19

Low, to date—-

boenning & co.

considered

for re-election for another year.,,

served

President has
dsH< Vice-President since

Dec. 31,

1941.

youthful

The

yert^ejjt

Philadelphia 3

1606-\Valnut St.,

PH 30

PEnnypacker '5-8200

new

Phone to N. Y. C.

Private

COrtlandt 7-1202

He entered the in-

business after gpaduat-;

ing from Yale in 1926 as an asso¬
of' Dominick

ciate

Dominick,
Trading Market* in

f^ew York. He later left that firm

Income A partnerof J; W. bavis
also of New York,

Empire Steel

-f1

Common
"v

Available j Publications

"xVv

x\
i

Valuation and

Appraisal

RAILROAD EQUIPMENT

CITY OF PHILADELPHIA

phttudeiphla Stock; Exchange
Bldg., Phil a, 2, Pa

Meniber*

Stock Exchange
Bell System

•

HAnover, 2-4552
Teletype PH 220

Y. Telephone

Appraisal

■

%. jguptcv & Co.

<&ca.

CERTIFICATES

EstabllBbed.WOS^'V'-Xr:^--'-;'';-1^;

BONDS

Investment
American Box

•

Botany

PENNSYLVANIA LEGAL BONDS

Empire

Bldg. 3s 1953
Bldg. 5s 1959

Phila. Transportation

Copies

STROUD & COMPANY

Warner

Truck;

Company

Wawaset Sec. Co.

•

Samuel K. Pbiilips & Co.
Members

Philadelphia Stock Exchange

Packard Bldg.,
Teletype
PH 375

N. Y. Phone /
COrtlandt 7-6814

Allentown

Pittsburgh

120 BROADWAY

TRADING MARKETS

REctor 2-6528-29

tock Exchange

| >J

Williamsport

Scranton

Reading

Byilesby & Company
Bldg. Phila. 2
Teletype

T.i^knnn

Rlttenhouse

6-3717

Pennsylvania
A. Webster Dougherty &

Municipal Bonds

;

•

J/,;

■*'

Roberts &
*

Offered only by prospectus

Bought—Soid—Quoted

Municipal •:

E. H. Rollins & Sons

Dolphin & Co.

Incorporated

Trust Building
PHILADELPHIA 9

Union Tr. Bldg.—Pittsburgh 19, Pa.

Court 2380

»<•

?v;

Teletype
PO 496

;,r

Street

Rittenhouse 6-2580

1421 Chestnut

Bowling Green 9-8184

PHILADELPHIA 2

Telephones:

Philadelphia—-PEnnypacker 5-4646
'if* New-York-r»HAnover. 2-9369
Bell System Teletype—PH 299

Mander Common

*; r' •' ^

Fidelity " Philadelphia
Pittsburgh Stock Exchange

•

Com.

Co. Common

Harshaw Ch©m.
*

Common

Ijid. Pub. Serv.

*Nor.

RETAIL DISTRIBUTION

PHILADELPHIA OFFICE

NEW YORK 5, N. Y.

PA. '

PEnnypacker 5-7330

Philadelphia 2
'

STREET

123 SO. BROAD

PHILADELPHIA

and New Jersey

Co.

Pittsburgh Railways
Sterling Motor

Phila. & Western RR. 5s 1976

Southern Gas

Empire Steel

Request

Pfd.

3-6s 2039

Board

Worsted Mills

simultaneous

WESTERN PENNSYLVANIA

Telephone

yea^,

Phila. Elec. Co.

Me mbers

tol(lrthe board that, hav¬
reached retirement age, he

was

from net current assets, v

bank for

ing

^proximately

as President
Jan.-/Randolph, who is 65

stock

Common

Available

Evai^ Randolph

ceed

& Co.,

nation, announced that Fred¬

the

Compilation of

Market St. Nat.

II. .N. NASI IX CO.
v

Teletype

National Security Traders Asso-

ciation.

Alden Park Land 3s 1954

Cambridge

C. Collings

••

Valuation and

Although each toe-to-toe round
slugfest

Tryder has resigned

President

Stocks

n re r,

Incorporated

of the U. S. Government

Lewis

of America,

Phila. Transportation

Pennsylvania Co-Features in Coal

Association

& Boyce, • Chairman, National
Association of Security Dealers,

penalized permanently because
of the present situation," add¬
ing that use of the pipelines for
gas would be a disastrous blow
to Pennsylvania's economy and
would throw thousands out of
$

Bank & Insurance

& Co.

bcjfW^e^ iy^re/reluc-

City of Philadelphia income
during first 10 months of 1946
was
reported $7,286,921 ahead
of last year, according to Re¬

closed

■ •*

PHILADELPHIA,

practically throughout 1947, bank¬

jobs.

Wm-K- Barclay'Jr-

The; annual meeting of the club
will be held Dec. 11 at the Rac¬

week,

remainder of 1946 and

For the

•.;

Angeles

Philadelphia

•

tary, James D.

Philadelphia's Own "Big Four"

definitely require a

could

(Officials,

nounced

hp. electric motors for
❖

between

Wire System

dent, H. Gates

Lloyd, Drexel
& Co.; Secre-

for

order

$1,600,000

A";■ .■ V,;V Los

are:

•

quet Club.

Grand Coulee Dam.

the

;;

Reduction

Private

1431

ers

spokesman said,

■

" \ ' 'j

Westinghouse Electric Corp. has

the war's duration.

Alt- outstanding 5% preferred tanfcib discuss wfiat action would
stoek, par $10, of Pennsylvania be taken should*a request come
Sugar Co. will be redeemed Dec. from the Federal Government for
31 at par and accrued dividends
changes in the easements.
at Tradesmen's National Bank &
D. L.
Corgan,
Secretary of
Trust Co., Philadelphia.
the Anthracite Committee, said
ffi
"the coal Industry, the miners
November in Philadelphia:
and the railroads should not be

ijc

the state as a war measure when right
in the shadow, of Billy
the lines were constructed show¬ Penn's hat.
v
u
>
•
u
ed many of them limited their use
With the election of Edward
to petroleum and petroleum prod¬
Hopkinson, Jr., Drexel & Co.,
ucts, while others were only for
as President, Investment Bank¬

Philadelphia Electric Co. an¬
$60,000,000 in new fi¬
nancing; said funds would be used
for expansion including comple¬
tion of the $48,000,000 Southwark
generating station.

Roeb-

legal problems present in connec¬ ers, brokers, dealers and traders
tion with such a conversion. Gov¬
and their respective associations
ernor Martin's officS said a check
of the land easements given by can find all the "top" answers

lines

;
f

ppy

Angeles
Pittsburgh, Pa.
Hagerstown, Md,
N. Y. Telephone—WHitehali 3-7253
•

Vice-Presi¬

The cost wiil exceed $1,000,000.
*

York ,Curb Exchange /;

New

Philadelphia, New York and Los

ling's Softs. Co.' at Roebling, N.

change in the permits before the

cost/of improvements and addi*

for John A.

plant

power

Also , Member' of. {, j 'nil

nom¬

inees

and

Philadelphia

York,

New

New York

Samuel Evans, Jr., C.

From recent

"It would

the

Wright, Wood

Treas

that the

retirement of

at lower cost for

Jr., partner of vd

Pittsburgh has been awarded the

•»,»

4420 Walnut Street,.Philadelphia .2

Other

Request

Angeles StocK Exchanges* ^

Los
r

contract for construction of a new

laid off.

bankruptcy petition in the U. S.
District Court for Eastern Penn¬
a

gal proceedings to collect amounts
due.
The company has recently
been primarily
engaged in the
production of refrigeration equip¬
ment.
M
'

Co.

Members

& Co.

■

BUCKLEY BROTHERS

Winsor, III,
Biddle, Whe^
of len & Co.;

Engineering

Rust

v'wtiU

succeed Spen^^f
cer D. Wright, - -

the

five years.

Memos

for

He will

1947.

The

furnaces.

new

delphia

iu.

;

No. Indiana Public Service Co.

Barclay, Jr., Stein Bros.' &
Boyce, has been nominated for the
office of President of the Bond
Club-of Philk-

Company

Bird & Son Inc.

generating plant

new

next four

already

workers

railroad

and

Corp. has filed

to the 150,000

several

work will be carried on oyer

will cut

Kellett Aircraft

and

fabricators

and

construc¬

which will include the

the end of: this week

manufacturers

increase.

Kellett Aircraft

$40,000,000 expansion program

pinch of the empty pits. From
this arena comes the prediction

tional

Gruen Watch

PHILADELPHIA, PA.—William

•

Pittsburgh Coke & Chemical Co.

...

Barclay Nominated to
Head Phila. Bond Club

PEnnypacker

1528 Walnut
New

York
'

■

St.,

r.......

5-0100

■

■;

Philadelphia 2

Boston
San Francisco

Chicago

R. Young, Chairman of the Board
of Chesapeake & Ohio and the

guiding spirit of the whole system,
quoted to the ef¬
fect that "We" (presumably Ches¬

Obstacles to Straight Road Ahead
By HON. CARL HINSHAW*

has been widely

U. S. Congressman from California

apeake & Ohio) "are looking at
the New York Central in lieu of
the Nickel Plate." New York Cen¬

of the stocks, and par

The "war of nerves" to convince holders

ticularly the preferred stock, of New York, Chicago & St. Louis, that
they are in a weak position and had better hurry to accept the terms
that may again be offered them by the parent company (Chesapeake
& Ohio) continues unabated. It had generally been expected that at
their monthly meeting in November the directors of Nickel Plate
would declare a fairly substantial"
~
Plate
management had
dividend on the preferred stock Nickel

Nickel Plate situation had in mind
the

that

fact

Cons. "A"

aggre¬

were

there

Plate

of Nickel

stock

has

relative

the

ag¬

status

the

two

were

New

that

fact

for

reasons

not

Central

York

Nickel

while
around

Plate's

dividend.

Universal Match

The

second

considered

was

make

was

that

inadvisable

payment while the Com¬

tion the question of rate increases.
This may be considered just about

Detent

valid as the first excuse.
Commission already had on
as

The

Plate

short

little

MEMBERS

York Stock Exchange and other
leading Security and Commodity Exchs.
New

120

Broadway, New York 5,N. Y.

231 So. LaSallo St., Chicago 4,

Xli.

ular

rate.

does

not

Also,

reservation

this

ago

that

appear

that

matter,

affiliated*

not

with

"First

Mortgage Bond

Main Line

Properties iof Strategic Nature
Priced to yield better than

Analysis on

according

Request

lack

Coast

is still outside the orbit.

Green 9-6400

are

pulling

the

left.

Obstacles of

serious

pro¬

portions
are
being strewn
in

the

that

Carl Hinshaw

road

leads

straight ahead.

leanings they

may have had.
of an enormous
prison. Any good penitentiary
provides full employment and -the
maximum of security to its in-

any

It is the economy

mates.

There is
the

iterate

don't

mention

want

this country are attempting to

what

destroy

have

built

to bring poverty, distress
revolution, a turmoil in which

they,

may

tery over

revolution¬

trained

being

aries,

hope to achieve mas¬
us. These people incite

strikes and slow-downs
of destruction.

ments

that if
and

the
lead
everywhere. He must
find words with which to express
the great truths he knows, words-

our

instru¬

They know

system of production

follow.

that will
to

bring understanding of
those

who

after the rainbow

would

chase,

the left,

the road that leads to obliteration

distribution

be seriously

can

crippled then distress and poverty
will
rule, and revolution may
J.

But let the clear voice of truth

be heard in this turmoil, and the

people will listen and understand;
and will turn toward truth to lead
them.

The

engineer knows the
speak it wherever

truth. Let him

Livingston, Williams Co.

engineers^
Your kind are in the great raa-f
Let us not mince words
but
chinery maufacturing and in the
speak the truth. Those who would' mass
production industries that
lead us to the left draw a picture
employ millions of workers. Yoi^
of a life thatf few persons now
have the basic information, but do
outside of the Soviet Union have
you translate it into simple truths
ever seen. It is an enticing
picture that anyone can understand, and
of the planned economy with full
that all men of good will would
employment and a fair share of know? For
example:
the products of that employment.
Those Americans who have ex¬
Labor Cost Per Automobile
;
perienced the life in Russia as
Quadrupled

CLEVELAND, OHIO—Clarence
Whitwell

ated with

has

become

affili¬

Livingston, Will^jns^ &

he may be.

Russia's "Economy of

Chronicle)

(Special to The Financial

liberty.

Officje

Y.—John

You

Prison"

are

;

this

erstwhile ardent advocates of that

production of

from it to return here, have
been cured by their experience.
Engineers who have gone there to
render professional services under

down 10% below prewar averages

address by Rep. Hin¬
the Annual Meeting

labor. That means there is almost

the

Crystal Lake Hotel. He was pre¬
viously Cashier for d'Avigdor Co.
of New York City.

action

Co.,

escape

In the automobile industry,

while

*From

before

the

American

chanical

Society of

Engineers,
City, Dec. 2, 1946.

New

Me¬

York

number

say—we

from

hours ;o;

78%. That" is

have 90% of product
of the hours of

178%

50% slow-down. It takes nearly

twice

much labor to produce an

automobile

today

(Continued

Our Lady

labor has increased
tiron

shaw

the

it did from

page

2927)*

of Victory Church
in

the Financial District

for the Building Fund

PFLUGFELDER, BAMPT0N & RUST
JWembert New York Stooltr Exchange

Broadway

New York 6

rrlepftowg—DIgby 4-4933

Mclaughlin, reuss & co.

SPelefrpa—-NY1-3IQ

V/2&,2000
Registered

Trading Markets in—

;r"

F 0 R

MACON, DUBLIN & SAVANNAH

HELP WANTED

5s, 1947

•

POSITIONS WANTED

DENVER & SALT LAKE
6s,

63 Wall

Tele. NY 1-724

Philadelphia

Hartford

1960

—

OTHER CLASSIFIED ADS

Assented & Unassented

LONG ISLAND AIRLINES

Street, New York 5

BOwling Green 9-8120
Boston.

•

\»

i *

, 1

1. h. rothchild & co.
v

Member of National Association

^o/ Securities Dealers, Inc.

52 wall street
HAnover

2-9072

n.y, c.5

Tele. NY 1- 1293

the

and trucks is

cars

Your Contribution is Earnestly Solicited

Adams &. Peck

mechaical

system and who have been able to

offices at

A War Memorial

order
and

ing and correct appraisal. This is
the time when that practical theo¬
retician, the engineer, must take

truth

of individual

Teletype NY 1-1063

Morris & Essex

re¬

only be*
its advocates and agitators

cause

system, except to

that

America.

need here to discuss

Soviet

■

...

■,

Clarence W. Whitwell With

New York 4, N. Y,

'telephone BOwling

straight ahead.
Strong forces

This is the time for clear think¬

analysts,

dividend

and

not deviate.

RailroadlBoiidttiiiiiStoeks

CUARA NIEED RAILROAD STOCKS-BONDS

25 Broad Street *

many

left

the other goes

A storm blows

by ciated with A. E. Aub
Nickel Plate directors, Mr. Robert Union Trust Building.
the

6%%

the

from the right that we must lean
into in order that our course shall

be
cited as a reason for another ^ in¬
With A. E. Aub & Co.
equitable offer to Nickel Plate
CINCINNATI,
OHIO — John
preferred stockholders.
Following closely on the heels of Robert McKee has become asso¬
to

the

■

contract have returned, cured of

Maloy is engaging in the securi¬

The market influence of
non-payment of dividends? may,

Mtg "A" 4s 1993

divide

ties business from

number

any

We$

great

highroad. One
way leads
to

Line

being

are

likely substitute for Nickel Plate

FREEPORT,

group.

1st

ticular.

year

Atlantic Coast
looked on

was

about

Just

stockholders.

John E. Maloy Opens

to affect the
thinking of either the Chesapeake
& Ohio or the Pere Marquette or,
roads

DL&W—Lackawanna RU N 3>

upon this
merely a renewed
impress
Nickel Plate

file Co., Hanna Building. In the past He
company's estimate of this was with Finley & Co. and Paul
year's earnings which certainly H. Davis & Co.
justified resumption of the reg-.

for

latest fantasy as
to

pro¬

rail analysts look

Most

effort

declining

exceedingly critical juncture in the history of the
whole and in the history of our own country in par-

fantastic.

the

Ernst&Co.

in lieu of Nickel

ing considered

mission still had under considera¬

Republic Pictures

world

par.

for

reason

deferred dividend action
it

This

sell

With C. G. McDonald
enough, the parent
(Special to The Financial Chronicle)
company, Chesapeake & Ohio, had
just the day earlier declared the
DETROIT, MICH.—Wilfred F.
regular
quarterly
dividend
of Richardson and David A. Scully
$0.75 a share plus a $0.50 extra, are now connected with C. G.
although it is far more heavily de¬ McDonald & Co., Guardian Build¬
pendent, than the subsidiary on ing, members of the Detroit Stock
coal traffic, and presumably will
Exchange.
be hard pressed to cover the 1946

Common & Preferred

•

reducing worker's buying power, and urges worker be
slow-downs threaten our economy and reduce living

has

Strangely

Interstate Bakeries

Points out increased labor costs due to

standards.

strike.

coal

imminent

then

■

great divide in the highroad/and that strong

outstanding bonds with a 41/k%
coupon selling in the middle 70s,

earnings un¬ Line
centering around the

certainty

Common & Preferred

taught

two

roads, and therefore the liability
that Chesapeake & Ohio would
have to assume in taking over one
or the other, is obvious from the

There was, first, the

Arden Farms

ductivity

gregate market value of somewhat
less than $40 millions. Moreover,

taking dividend action last month. in the
Alleghany empire.

5s, 1927

freedom.

of roundly $100 millions.
comparison, the publicly held

prices
In

hearings and that from there on stock hold¬
earlier this year, on the com¬ ers
might reasonably expect to
pany's petition to purchase the receive at least a major portion
Chesapeake & Ohio holdings of of earnings as dividends.
Wheeling & Lake Erie stock, the
Despite these apparent assur¬
ances of good will, holders of the
preferred were not remembered at
the November meeting. Ostensibly

Chicago Railways

are
pulling us toward the left and placing obstacles in tiie
path leading straight ahead, Rep. Hinshaw characterizes the Rus¬
sian system as the "Economy of a Prison," giving security without

6,447,-

some

we are

No one can deny Mr. Young's
that
financial
resources
right to "look at New York Cen¬
adequate for all the needs tral" but any idea that it is be¬

again

ICC

outstanding

413 shares of stock with

been

At the same time followers of the

has

gate market value based on recent

So far $1 gone on record to the effect that
financial
resources
were
paid out of this year's their
adequate for all of their needs* in¬
earnings.
?
*
The management, in estimates cluding the capital improvement
filed with the Interstate
Com¬ program for the next few years,
merce Commission,
had forecast and to provide for payment for
earnings of $14.50 a share on the the Wheeling stock without jeop¬
preferred for the full year and, ardizing the payment of at least
at least prior to the coal strike, current
dividends on their own
it had been obvious to every rail¬ preferred.
Moreover, at/a later
road analyst that actual results
date, at the Nickel Plate annual
would run well above this figure.
meeting, the management asserted
of

■

forces

tral

1946 earnings.

out

has

Asserting

SEE INSIDE BACK COVER

}

Volume 164

CiO's

Number 4548

Wage Policy

In Resolution

By EUGENE HOLMAN*

wage;

increasesthuslair granted are

Higher Wages

President, Standard Oil Company (N. J.)
Mr.

Holman

higher living
costs and it* ie therefore:
"imper¬
ative that American
industry, in-

points oat that increased peacetime demand for
petroleum products has more than made up for sudden shrinking
of wartime requirements; and; sales, under reasonable*
prices, are
greaterthan ever; Poses as future uncertainties: (1) adequate

stantial wage

quantities of petroleum! (2) continued rate of technical progress;

adequate to

meet

increases."

The CIO Convention at Atlantic

City

tion

R-38,

which

Nov.
it

with

19 adopted Resolu¬

entitled

"Wages,"
that

stated

was

American

people

are

spectre
of
increases
and

price

Earnings," while

"the

faced

now

the

unlimited

and

(3) employer-employee teamwork,

efficient production and distribution.
solved satisfactorily.
'*
.
.
appraise as briefly
industry finds itself today and
me

at the

same

mary

time

rent

workers-

ucts

imperative

American

wage

threat

have

the

workers

the

from

overtime

transfer
industries

war

jobs

timing

tical

able

both

standards

workers

and

the

preserve

American

protect

the

na¬

tional welfare by maintaining the
necessary volume of purchasing
to

keep the wheels of in¬
dustry working. Although the Ad¬
power

ministration itself recognized that
■\yage increases were necessary to
cushion

the

workers

and

shock
to

American

sustain

adequate

purchasing power, its wage-price
sharply discriminated
against wage increases and fav¬
ored price increases.

its

Let

persistent

application of
scientific research and develop¬
ment—before the war, during the
and

war,

since

the

war—the

oil

me give you a quick statis¬
picture of current demand

Excluding Russia, the world's
requirements for oil during this
year will total about 7,200,000
barrels

daily.

75%

Over

world's merchant fleet

the

tonnage

burns oil today—as compared with

toward better

4% in 1914. Diesel horsepower in¬
stalled in the United States in¬

These

use

of its

advances

raw

mate¬

have

ex¬

tended

supplies and reduced costs.
Resulting benefits have, over the
years, been passed on to consum¬
ers

reduced

prices and better

products.

5V2 million in 1935
to 45 million at the end of 1945.
creased

from

During that time, oil heating units
in homes have grown from about
one

million to

two million.

over

Out of this continuous research
The Future

51st

Congress

Holman be¬
of American

Industry, New York City, Nov. 4,

Now, what about the future?
World demand for

oil, again

ex¬

cluding Russia, is expected to in-

1946.
.

C.,

continued

S-

page

Standards of living may "be in-*,,
either by reducing prices?

creased

econo¬

has,! inofac^ been brought; about

author of some 20 books
nomics.

spoke

progressive improvement in ratio. The facts
show that Sometimes the improve-* i
by

.menf has resulted from increase
ing ;money wages and at other
times froin falling: prices. It has
sometimes

The

fundamental

when

occurred

} In the collective bargaining

concluded

organizations
months

during

this

by
the

than wage rates.
The method which

creasing

requirements

labor

natural

American
the

interest

workers
end

had

the

fates.

wage

placed

corresponding

consuming
of

production

mass

unit

cannot

reasons

hend;

The economies

power.

average

throughout I modern times?
ef-|
forts of thq: laboring population f
sponding ; mass consumption. In
have been devoted
to securing.
any nation the ultimate stimulus
higher standards of living through
for economic expansion is found
the medium of higher wage rates. >
realized

the

unless

power

corre¬

its

desires

The

desires

realization

unfulfilled

population.
these

-there

depends

upon

af expressed

The

than

buy¬

Institution's

Brookings

scientific

one

in the |l.,i(Cqntihue(Moh^page^925);;;?-;?p

assurance

Philadelphia Electric

by the

3.8% Preferred Stock

Immediately after the establishof

the

Administration's

wage-price policy in February of
•this year, powerful American em¬

ployers entered into
Which

Par Value $100

Per Share

conspiracy

sought, through unwarrant¬

ed price

living
i

solici¬

300,000 Shares

Administration that the price line
would be held.

circumstances to be construed as an offer to sell, or as a

Securities herein mentioned. The offering is made only by the Prospectus.

the

| This

increases, to destroy the

standards

was

obtaining

of the

workers

Price $104.11 per

done by seeking and

Share and accrued dividend

from
OPA
fabulous
price increases wholly out of pro¬

portion

increases
In in¬
dustry after industry, automobile
which

had

the

been

wage

granted.

Copies of the Prospectus may he obtained from such of the

undersigned

gjtain, electrical, textile and oth¬

as are

registered dealers in securities in this State.

increases were author¬
ised. In addition, decontrols were

ers,, huge
obtained

from

OPA

whole¬

fpray

Glore, Forgaii & Co.

against

standards

fc&fore

wage
and living
became apparent long

Co.

W. C. Langley &

sale basis. The result of this greedy

the complete destruction of

Salomon Bro3. & Hutzler

White, Weld & Co.

A-G. Becker & Co.
,

price control.

|As

part of this campaign to de¬
press real wage levels, industry
cijous attack against the retention

o| any form of price controls Stil

dissatisfied
with
the
fabulous
profits made possible by lax en¬
forcement of the OPA pricing
standards,
American
industrial
monopoly sought an entirely free
Ji|nd in its movement against
wpge and living standards. This
attack was based upon the argu-

Incorporated

%}'4]

(Continued on page 2926)

R. W.

Pressprich & Co.

A. C. Allyn and

Company

Incorporated
December 5,1946

' '

??.

' Blair & Co.

•

f 1,

Lee Higginson Corporation
? Tucker,

Spencer Trask & Co.

Inc.

Incorporated

Hornblower & Weeks

Hallgarten & Co.

Dick &Merle-Smith

Coffin & Burr

Alex. Brown & Sons

then proceeded to launch a fero-

Anthony

Co.

Equitable Securities Corporation
'

;
■

?.?'-

research; i

it is more than that of identifying

economy

labor acceded to official pleas for
contract terms upon a

in e n

man

Accordingly, j

illusion,

an.:

compre¬

it isp
concept, and likely to ?

elusive

be.,

harder-to

the

NEW ISSUE

extended

;

offer to buy, any of the

Higher

successful

sufferec

war.

stabilized

commitment and

appears as
that of in¬

operation of a money wages: cari be visualized fe
capitalistic system may be stated as more dollars in the hand. A
as
follows,
Dr.
Moulton said: corresponding - -improvement by?
Back of each new unit of pro¬ means
of
lower
prices is less
ductive
power
there
must be t:a.n, g,ib Ie . ** lor? * psychological the

for

early
labor ac¬

year,

cepted amounts which fell short of
the drastic cuts in earnings which
since

This advertisement is not and is under
tation of

labor

both \

and price? were rising, but
with prices advancing less rapidly

wages

eco¬

wage-price

"Pricing

the

policy

agreements

Price

or
told
a
by increasing wages—the es¬
management sential requirement being; an im¬
proving ratio between wages and
prices, the speaker said. Over the
ciety of Me¬ past century the enormous im- g
chanical Engi¬ provement
inw living / standards ?

ing

2926)

vs.

Reductions

session of the
American So¬

in
*An address by Mr.

fore

Wage Increases

Policies and Social Trends."

industry has made steady progress
rial.

mist,

be made from oil

for oil.

S-The CIO recognized the impera¬
tive necessity of substantial wage
n

than

other factors drastically reduced
Weekly earnings of the vast ma¬
jority of American wage earners.

la v i

has

made up for the sudden shrinking
of wartime requirements. Reason¬

low-paid jobs, the re¬
of incentive systems and

increases

for

prices
have
prevailed
spite of these new demands.

I t

Washington,
D.

products that we

can

neers
at
its
principal use of petro¬
leum today -is still as a fuel. Our
annual; meet¬
business is selling energy, and we
ing in New
Harold G» Moulton
York City on
are more than holding our own in
D r.
Dec.
3.
this highly competitive field. Less
is
President
of / the
than fifty years ago oil supplied Mbuitda
only one-twentieth as much of the Brookings Institution in Washing¬
nation's total energy as did coal. ton and was formerly of the De¬
Today, oil supplies over half as partment of Political Economy,
much.
University of Chicago* He is the

other

products

Holman

other significant—and

to handle

pulation,

But the

petrol e'um
Eugene

come

Civilian industries, from
high-paid

p o

Dr. Harold G.

ever

down-grading,

—synthetic rubber, fertilizers, sol¬
vents, insecticides, waxes, alcohols,
and a'host of others.
;
• r

words, a great¬
ly increased
peace - time

American

States

demand

have

have found

been.

and"

earner

the situation in which the oil

born

the

higher
than they

R-38—Wages

«eeonomy.
The
elimination

sometimes spectacular — develop¬
ments. New enterprises have been

are

immediate wage crisis for the

grave

pe¬

Unile'd

.The termination of the war and
the needs of reconversion created
an

troleum prod¬

industry in col¬
lective bargaining give substantial
wage increases." The full text of
the Resolution follows:
Resolution

can

of'living: may be increased "either;, by increasing
by reducing price^but the latter method promises., more
br o adly
dis-<fc
tributed bene¬ relationship between wages and
fits7! to th e

wages-

our

of curpositiqji:

Sales

ss&ar& of the national income has

j
|

."-Standards

for maximum

necessary

prospects and goals for the future.
First, a sum-<&

steadily, declihed^STlie rRiek)luti(to
recommends that "it is
that American

Brookings Institution executive stresses need of more productivity and consuming power to spread benefits of mass produclion.
Holds wage rise of one group of workers is at expense of.
all7 other groups, while lower prices are shared by all.

Sees each of these problems

Let

shrinking

'profits:soarand thfe.

2895

Oil Production Outlook Moulton Urges Lower Prices, Not

adopted at Atlantic

Contention^ asserts

Commercial & financial chronicle

the

THE COMMERCIAL &

and jCprties a blank space, for the

dealer's stamp or. imprint.,;■

both contain' <data
emphasizing the attractive / out¬
look ; for;: the building: industry;
Selected Investments Co. quotes
at length from a forecast by F. W.
Dodge Corp.'s President Holden in
which he says: "Construction ac¬
tivity will not necessarily partic¬
ipate in the expected recession in

Tax Transactions

756 at the

Eaton & Howard Balanced Fund

Research

Corp. charts the course of cor¬
poration earnings in ' a current
bulletin.
Taking data from the
National City Bank covering 350

By BRUCE WILLIAMS

Securities

Thursday,- December 5,' 1946.

$5,766,717 compared with $5,446,beginning of the year,

"Perspective"

-•

Corporate, Earnings
National

'»

FINANCIAL CHRONICLE

—Net

assets

Sept. 30,

1946

totaled $23,419,318 compared with

$24,827,400 three months earlier
$15,757,465 a year ago.

and with

Portfolio balance at the end "of the

follows: Cash
Distributors Group's attractive new shows that third quarter aggre¬ will not, but will continue on an and. Goyernmept Bonds; 13.7 %;
Corporate Bonds, 8.8%; Preferred
bulletin, "The Management of Money," discusses year-end tax trans¬ gate
net
earnings / were ,* 70% increasing scale without serious
Stocks, 25.9%; Common Stocks,
actions in language the average investor can understand: ' The sub¬
higher than last year.
The in¬ setbacks If this turns out to be
ject is particularly timely now. Many investors haVe large profits in crease was so great: that it con¬ true, ' construction may be the
securities which they bought during 1942-1945 and not a few of these verted a decline in
,
Dividends
earnings for principal sustaining activity tend¬
same investors have substantial losses in securities which they bought the first six months of
Union Trusteed Funds, Inc. —
this
ing to moderate the
industrial

7;"

introductory issue of

The

corporations, the chart general business.

Odds

are

third quarter was as

that it

•
impact of
to an increase of ,12% over 1945 price
recession on the general The following dividends payable
f* dollars-and-cents for the full nine-month period.
Dec. 20, 1946 to stock of record
business structure.",
savings available to such invest
Dec. 10:
Calvin

year

earlier this year.
The
actual

Bullock's

ors

merely by establishing profits
Sign Posts for Sound Investment

AVIATION
SHARES

under present tax laws

dia¬ ive, analysis

for the Investment Bonds to

a prospectus on request

dealer

Distributors Group, Incorporated
63 Wall

Street, .New York 5, N. Y.

ities

sold

holdings in the

secur¬

Broad

Street

Sales

Corp.

has

repurchased

loss,

wished

your

request from
investment dealer. or from
upon

NATIONAL

RESEARCH

SECURITIES

ized

profits

security
from

cents

come.)

net

and

eight

investment

• •

K:-'U

in¬

Fund—Regular quar¬

Delaware

dividend of 25 cents; per
share payable Dec. 14,
1946 to

terly

of record

shareholders

Dec. 2.

Eaton & Howard Balanced Fund

of 24 cents

—A dividend

payable

1946 to stock of record
Dec. 6.
(In addition to recently
declared capital gains dividend of
The research department of E.
30c.)
W. Axe & Co., in a bulletin on the
Nation-Wide Securities Co., Inc.
two Axe-Houghton Funds, com¬
pares the advances in
wages in —A dividend of 40 cents per share

are

avoid the 30-day waiting period, it
would be necessary,to reinvest in

TRUST FUNDS

consider¬

down

compared with thdse available 1914-1920 and 1939-1946. The re¬
sults will be surprising to those
sum¬
who have accepted current press
impressions
as
accurate.
Here
other securities o|,;§imiJar char¬
Type of Investment
Change
are the conclusions reached:
up 68%
acteristics. In seeking out such se¬ Farm Values Per Acre,
1. In spite of many statements to
up 67%
curities, his problem of selection Cost of 6-room house,
the contrary wage rates have
up 53%
could
be
greatly
simplified Commodity Prices
not advanced as much since the
up 22%.
through use of the industry-type Preferred Stocks
beginning of the recent war as
Corporate Bonds (A)__
up 12%
funds.,.
they did in World War I.
Industrial Stocks
down 13%
| This example portrays just one
2. Present rates are even lower
/After analyzing basic economic
combination from which signif¬
(relative to prewar) than they
to
determine
whether
icant tax savings can be effected. factors
got after the 20% decline of
There are endless other combina¬ stock prices are low or whether
t 1920-22.
"
•
'
tions and, wherever feasible, alert other values must come down, this
3. Real wages increased approx¬
dealers are working out the most sponsor concludes "that common
imately 20% in the period 1914stock values are low."
/ ;
sold

v\/

the

come

can

66%

profit, they could
published another interesting is¬
immediately and
sue of "Items"
in which the in¬
their higher cost basis permanent¬
vestment values available in 1937
ly established.
On the securities
be

Prospectus

could save $1,000
of long-term
without any
for the Lower-Priced Commons. ably
deflation of
capital gains tax on the profit and,
In connection with these invest- wage-"rates or building material
in addition, could reduce his tax
prices/1 Bottlenecks have not had
m e n t
comparisons,
Keystone
on
his ordinary income by $500
a
serious - impact4 on profits ; of
writes:
1
f
' for a total saving of $1,500.
"As a result of the recent dras¬ building material companies, but
Of course, he would have to de¬
tic decline, the securities market a balanced .flow of materials will
duct brokerage and other costs of
do
much
to
promote increased
now offers substantially more at¬
making the transactions, but in tractive investment
opportunities productivity of labor, lower costs
most instances they would repre¬
for income and possible price ap¬ to buyers, and give heart to con¬
sent only a fraction of his tax sav¬
tractors."
'
preciation."
ings, And so far as his market
position is concerned, if he wished Investment Values
Wage Rates
to retain his

presents the results of

Group Securities, inc.

from your investment

"Perspective"

an exhaust¬ Union Bond Fund A—:
_j^_$0.19l
industry and Union Bond Fund
L/0.18
Keystone Co. publishes a
are often so
large that it would be
concludes
as
follows:
"In
the Union Bond Fund • C
—-Z- 0.06
gram in the current "Keynotes"
stupid to ignore them.
For ex¬
long run either rents must go up Union Preferred Stock Fund 0.25
comparing; the yield and price
ample, an investor in the 50% tax
or
building costs must come down, Union Common Stock Fundi-, .0.10
volatility
of
the
10
Keystone
bracket,
$18,000 of
surtax
net
$*'■ •/ ?/
;%■
or* both.
Rental ceilings on new .'* i.' '.(• //
Funds.
Current
income
ranges
Investors
Selective
Fund—-A
income), by taking a $3,000 loss
from 2%
are
already being in¬
for the Lower-Priced projects
on
securities purchased last June
fiscal
year-end dividend of 23
Commons to 5.5% for the High- creased:
Distinctly favorable to
or July
(within six months) and
cents payable Nov. 26,
1946 to
Return Bonds.
Average annual the long run future of the building
by taking a $4,000 profit on secur¬
stock of record Nov., 15.
(Fifteen
price fluctuation ranges from 8% industry is the fact that building
ities purchased in earlier years,
cents of this dividend from real¬
costs

and losses

today. The following is a
mary of the data presented.

Dec.

24,

payable Dec. 24, 1946 to stock of
record

Dec.

16.

Insuranshares

Certificates,

Inc.

—A

regular dividend of 10 cents
per share and an
extra of
cents per share payable Jan. 2,.
1947 to stock of record Dec. 18.

_____

CORPORATION

120 broadway, new york 5, n. y.

[The

views

profitable individual combinations
with

their

various

clients.

•

was

dentally,.
the
Group bulletin

Distributors

new

1939-46

20 and the increase in

Inci¬

Building Industry

Selected Investments Co.'s cur¬
designed as a
dealer
mailing piece, does not rent weekly digest and Calvin
mention
November
issue
of
any
specific securities Bullock's

approximately the same.

Mutual Funds Recommended

Knickerbocker

Distributors

Recommend

It is

Mutual

with

those

the

They are presented as those of the
author only.]
r.

J. Vanderbeck With

: James Vanderbeck is now asso¬
is ciated with Carreau & Company,

mailing folder entitled, "Why

coincide
"Chronicle."

Carreau & Company

making available to dealers a lit¬
tle

in this

expressed

article do not necessarily

Wall

Street, New York 'City,

Funds."

attractive piece and does

good job of summarizing the.
advantages of mutual investment
funds
without
mentioning
any
a

Union Bond

company. The publisher's
does not appear anywhere

specific

FundC

name

in the folder and there is a space

Prospectus

upon request

for the dealer's stamp or

imprint.

Petroleum Shares

"Advance

crude

oil

prices

higher earnings for oil
companies,"
writes
Distributors
Group in its current "Petroleum
News." A revised folder on Petro¬
leum
Shares
accompanies
the
means

HlfdHW. LONG &

INCORPORATED
New York

NEW

48.,VyAtL S
LOS

Chicago

YORK'XN.Y.

ANGIli'j

—

Los Angeles

James Vanderbeck

mailing.

<H(CA,6Q

Quarterly Reports
Axe-Houghton Fund,

SHARES OF CAPITAL STOCK OF

assets

members

Inc.—Net
totalled Exchange.

of Sept. 30, 1946

of the New York Stock

Mr.

Vanderbeck

was

previously with Grimm & Co. and

prior thereto conducted

his own

investment business in New York

City.

PUTNAM
FUND
7
■

'7*

c^£8obton

i.?:

77- 7*

REPUBLIC
INVESTORS
FUND Inc.
Founded

Prospectus

from

your

XLe

may

be obtained

local investment dealer or

Keystone Company
of Boston

Cong nit Street, J)o»ton 9, Man.

Prospectus
your

THE

may

be obtained from

local investment dealer,

PARKER

one court

-or

1932

Prospectus upon request
•

CORPORATION

Street, boston 8, mass.

Putnam Fund

Distributors, inc.

50 State St.. Boston

W.ff.BDLL MANAGEMENT CO^HIC.
7'-Distributors
15 William St.,

New York 5

2897

Dangers of Centralized
Big Government
By DAVID E.

„

LILIENTHAL*

Formerly, Chairman, Tennessee Valley
-

/■

;

Chicago

New

the

,;H.r

corrode* our democratic institutions.Dis-^
tinguis hes between a direct and decentralized• administration -(of £4
national policies and points to success of TVA in enlisting local
administrative cooperation as an alternative to direct action from
Washington. Cites policy of s elling power wholesale, to locally
owned companies, as well sis towns and cities as means* ofvdecentralizing electric -supply.
Says states and communities should -■
not be relieved of responsibilities by Federal government and urges
study of»ways of administering national: policies through local

r
-

instrumentalities.
proposition that I had supposed

If there is one

established and accepted, it is this:
*
*
eminent de-<3>

thoroughly well

that our democratic form of gov-

•

—

...

pends for its
vitality, its responsiveness
to public need,
the

Big Government Not

Inevitable

that Big Government is
inevitable.
I deny that we have
no
workable alternative.
I am
I deny

devel¬

Satisfied With 1T0
George F. Luthringer, International Monetary Fund observer at
the meeting of the Preparatory Commission of the International
Trade Organization, expresses view arrangements will he satisfac¬
tory for Collaboration of both: %orldorganizations. World /Bank

firm

Harold

Sher bur ne,
Com-

head of TVA. asserts'($

Denying -Rig Government is inevitable, former

observer also at London meeting

former
m

USNR,

manager

WASHINGTON, Bee. 4.—On his return from London, where with-

Organization preparatory*
committee's meetings as AhgoryoyA
■■■ ^
- ■■ v
for- the
International
Monetary loans would have been considered
York office,
Fund, Mr. George F. Luthringer, on other than "intrinsic merits,"
located
at
United States alternate executive Bank
officers felt.
It is therefore
their

New

Wall

One

Street.

director of the Fund, expressed to
the writer his satisfaction
with

to the
democratic faith.
And what is
importance of
even more serious—they are mak¬
persevering
and strength¬ ing more difficult the achieve¬
their

the

ening

Lilienthal

local

and state gov-

there is universal as-

ernment

....

sent. But such approval is,

in part,

only lip service, empty of reality
and even of complete sincerity.
For what has happened in prac¬
tice?
The policy of encouraging
and nourishing the responsibilities
of local
government has given

responsibility

high

should

I shall point to

pursue.

experience in the Tennessee
Valley as one kind of evidencethere are others, of course—to
the

Sher¬

to an increasing centraliza¬
tion of administration in the na¬
tional capital.
So far has this

Of Santa Fe

and management
to persuade the
American people that centralized

before

the Fund have

objective
trade

on a

the

common

of
expanding
world
multilateral basis. One

and work of the two Organizations
arises from the fact that quanti¬

of the Santa Fe

tative restrictions can be used for

Mr. Lamont has been prominent

in banking circles for more than 25

financial

everyone

dynamic local

Mr. Lilienthal

desires strong,

government in the

the United States.

states of

The Big Gov¬

ernment apologists never

question

(Continued on page 2914)

1946.

years

reasons

Henry Abbol Appointed
By Nal'ISec.& Research

continuedMr.. Luthringer,

"had

general reference to the ITO
consulting the Fund in this sphere,
but that language has now been

of America.

some

associated

Abbot has been

Mr.

in detail.

"It

kell Lamont.

was

very desirable to have
from the Fund at Lon¬

in the future.

make

comes

and received his A. B, degree

lie

♦
theatre, USFET

stated, the scrip will be honored
only for USFET personnel and
authorized civilians working for
or with the
Army.
Included in
category * also,

this
are

presumably,

of other coun¬
located in the

the members

Aetna Securities

Corp.
Formed in New York
Aetna

Corporation
tlje formation of a gen¬

Securities

announces

eral investment

underwriter and wholesale

quarters at 37 Wall Street,
on or about Jan. 15, 1947..
leges of American post-exchanges,
to permanent offices at 111 Broad¬
restaurants and the like, are per¬
way, New York.
Officers of the
mitted to use dollar scrip.
new company are: Ira Krupnick.
George A.
Searight
The scrip was introduced in the President;
Vice-President and Secretary, and
European theatre in September
The latter,

being given the

privi¬

porary

moving

James

and in Japan
tober.

and Korea in Oc¬

countries prior to the
introduction of the dollar scrip

there

time

had been

use

for some

Colyer, Vice-Presidenl

and Treasurer.

In those two Far Eastern

occupied

time

has devoted most of

listed

securities

and

Robinson & Durst With

served as

Krupnick recently resigned
Executive Vice-President of

Paine, Webber Firm
LOS ANGELES,

CALIF.—Mal¬
colm C. Robinson, Jr. and J. P.
have

Durst

with

Paine,

become

associated

Webber, Jackson &

Curtis, 626.South Spring Street.
Mr. Robinson was formerly Los

Angeles manager for Dewar & Co.
Mr. Durst

was

First

Colony Corp.

Messrs. Sea-

sure

with E. F. Hutton

The London

observers.

mere

meeting proposes close ITO co¬
operation with the Fund on ques¬
tions involving the use of quan¬
titative trade restrictions to in¬
the

fluence

balance

1,1

(Special to The Financial Chronicle)

MERIDEN, CONN.—Edward L.
Brewster will engage in the se¬
curities business from offices at
137

lest

primarily
there be incorporated in the

ITO

charter language embarrass¬

concerned

Colony Street.

Beirnes

WitlT A.

ILL.—James

CHICAGO,

ing or binding on the Bank. For
example, the question of full-em¬

A. C. Allyn & Co., Inc.*

ployment policy was brought out
forcefully at London, notably by
the British, as disclosed in these
columns at the time.
One draft

Newburger,
Broad

Street,

serving in the U. S. Navy.

Hartman With
Mason Moran

national

Co.,

New

York

City,

members of the New York Stock

Exchange,

case

the

man

project.

has been added to the staff;

of Mason, Moran &

this

Bank,

Co., 135 South

La Salle Street.

would have meant that proposed

today announced that

Herbert Wolfe has
as a new

the

CHICAGO, ILL.—Johh S. Hart-

prime consid¬

eration in voting on any
In

(Special to The Financial Chronicle)

to make

orgahizatiohs

full employment a

Loeb

100 West

Monroe Street. He was; previously;

try's representatives on all inter¬

With Newburger,

joined the firm

registered representative.

Mr. i Wolfe

will

located

December 4,

NEW ISSUE

1946

41,666 Shares

57 West 57th Street at Sixth Ave¬
nue,

one

of the four branch of-

fices maintained
firm.

GLEN-GERY SHALE BRICK CORP.
Common Stock

by the brokerage

■

•

'■ ;

Price: $7.00 per

'I C} v V*£

special A?Type yen, which

Presidents, have likewise resigned.
Robert G. Lowndes Dead
Mr*, Searight has 27 years' expe¬
Robert Glynn Lowndes, partner
denominated in yen instead of rience in Wall Street and managed
his own business prior to his as¬ in
the Philadelphia investment
dollars,
was
employed among
sociation with First Colony. Mr.
firm of Brooks, Stokes & Co., in
American military personnel in
Colyer before joining First Colony
exactly the same manner as the Corp. was head of Colyer, Beck- charge of their Baltimore office,
died at the age of 58.
ley & Co.
present scrip. :
•, E ~ :
excepting for the fact that it was

Beirnes has become affiliated with

at London would have
required an ITO member coun¬

Loeb & Co.

C. Allyn

(Special to The Financial. Chronicle)

proposal

& Co.

■11

Bank's observer at

World
was

nu'

Brewster Opens in Meriden

interna¬

right and Colyer, who also were
with First Colony Corp. as Vice-

in' the

private

United States Army in the World

tional payments."

London

Mr.
as

out is feasible and useful.

The

banking business

dis¬
tries'
missions
American zone of Germany and tributor of corporate securities
the American sector
of Berlin. The new firm will occupy tem¬
as

at' Trinity"'.College,

studied

Cambridge, England.

"We

sales promotional work.

announcement of USFET headquarters in Ger¬
many the War and Treasury Departments have advised that military
payment certificates commonly known as "scrip" may not be con¬
verted for unauthorized holders.
The USFET statement discloses that dollar scrip may^ not be
sent from Germany to the United States for credit by individuals,

In 1921 and 1922

War.
His club memberships in¬
were treated very well in
clude Broad Street; Links;. Har¬
including Hayden, Stone
& Co., G. M.-P. Murphy & Co., London, both the Fund and Bank
vard (New York); Cedar Creek
and H. Hentz & Co.
Originally a representatives, knd allowed to
(Glen Cove, L.; I.)
financial analyst and specialist in play a free part in the meetings,
hi'——mwh—"«;
v
■!» / i :.
bank and insurance stocks, in re¬ more like another delegation than
with various Wall Street firms for

his

According to an

He graduated from

Harvard in 1921.

■

Dollar Scrip
Inconvertible for Unauthorized Holders

Englewood,

PhillipS' Exeter Academy in 1917

what

that

want

20 years,

cent years he

U. S. Forces Announce

greatly expanded and worked out Of Thomas W. and Florence Has¬

with the ITO

trusts.

born

was

N. J., Jan. 30, 1899, and is the sonf

course"

the
National Municipal
Philadelphia, Pa., Nov. 12,

In the European

Railway, has been
by President Fred G.

announced

inevitable.

banks or others.

Railway

specific point of common interest Gurley.

someone

communities and in the

League,

tion.

are

Let

administration
have
set out

address by

Bank

Thos. S. Lamont Dir.

Douglas Laird, Vice-President of
powerless.
don? and' it will be desirable to
first describe the stream National Securities & Research
have similar representation at the
of dialectics by which Big Gov¬ Corporation, 120 Broadway, New
ernment
is
being
sold to the York City, sponsors of National next meeting of the ITO prepara¬
American people.
The story be¬ Securities Series and First Mutual tory committee in Geneva in
March
We want to collaborate
gins with full agreement that "of Trust Fund, open-end investment
we

gone—by action as well as by de¬
fault—that we now find this quite
disturbing situation: Experts in

*An

the results of his

The appointment of Henry W.
support my thesis that in respect
to over-centralization there is no Abbot as Sales Promotion Man¬
wave of the future before which
ager
was
announced today by

way

Big Government is

felt that the presence of

observer
at
London, especially
trip to London. one permitted to take part in
burne's
con¬
Due to the presence of the Fund's the
discussions, - safeguarded the
nections
b eobservers, said fMr. Luthringer, Bank's interest in. this matter. ^
fore
the war the
proposed language of the ITQ
were with the
charter
more
effectively
safe¬
Harold H. Sherburne
buying
de¬ guards the Fund's interests.
partment
of
"It is clear," Mr. Luthringer ob¬
Smith, Barney & Co.i in New
served, "that the Fund has a very
York, and Chas. W. Scranton &
great general interest in the or¬
Co., in New Haven. From 1942
The election of Thomas Stilwell
ganization and charter of the ITO,
to 1944, he served on the staffs of
because to h large degree the ITO Lamont, of New York City, as a
Admirals Montgomery and Mason,
member of the Board of Directors
and
Mr.

having been asociated with
just as exchange J. P. Morgan & Company since
control can be used in controlling 1922 and a
partner since 1929 and
The partners of Bacon, Whipple trade.
One of our chief jobs at Vice-President
and
a
Director
& Co. are: William T. Bacon, Jay the London conference was to see
since 1940.
N. Whipple, J. Waller Marshall, that the ITO; charter in dealing
He
is
a
Director
of Phelps
ments and the works that make
J. Preston Burlingham, William with these purposes have in mind
Dodge Corporation, Texas Gulf
that faith the best hope of man¬
D. Kerr, Augustus Knight and Er¬ the specific role of the
Fund, and Sulphur Co., North. British and
kind.
nest F. Hartshorne.
not conflict with the Fund.
Mercantile
Insurance
Co., Ltd.,
We have alternatives. Those al¬
"The American draft proposals," and the Mercantile Insurance Co.
ternatives to Big Government we

prop¬

David

;

of Preparatory Commission.'

others he attended the International Trade

compelled to go further and say after which he was transferred to
this: These prophets of a man¬ Washington in the office of the
strengthening
revolution
and
those Secretary of the Navy. Just prior
and
nourish¬ agerial
among public administrators who to his return to inactive duty in
ing
of
local
seek to persuade the American October 1946, Sherburne was Di¬
institutions of
people that Big Government is in¬ rector of the Aviation Division of
government.
evitable are not measuring up to the Surplus Property Administra¬
To this
—

opment and

osition

International Fund? Official

and

Stock Exchanges, an¬
the. association with their

-centralization em power

York

their

Authority

mMk

Bacon, Whipple & Co., Chicago,

members

nounce

Commission

:Chairman, Atomic Energy

Sherburne N. Y. Mgr.
For Bacon, Whipple

in coat

otat£0

ESTABLISHED 1907

115 BROADWAY

NEW YORK 6,

N. Y.

2898

THE COMMERCIAL & FINANCIAL CHRONICLE.

the beginning of 1936
nearly at a peak, while cur¬
rently it is low.
Such gain as
there
is, however, is in North

Thursday, December 5, 1946

market at

was

Bank and Insurance Stocks

River's favor.
North

DEUSEN!

VAN

Franklin
Jan. 2,

This Week—Insurance Stocks
the

it It
:

significant current ratios compare as
North River

Franklm

The next step is to compare the
'§ relative record of the two com¬
panies over the past ten years, as
+ set forth in
the accompanying

Net Und.

1.45

1.16

March 31,

capitalization

Total Net

Net Und.

Net
Inv. Inc.

Dividends

Oper.

Profits

Inv. Inc.

Oper.

Dividends

Profits

$0.88

$1.60

$2.48

$1.20

$0.48

$1.20

$1.68

$1.05

1.64

1.50

1.40

0.80

1.26

2.06

1.00

1938—

1.09

1.27

2.36.

1.40

0.43

1.04

1.47

1.00

1.61

1.00

1939—

0.83

1.39

1.85

1.40

0.67

1.06

0.07

1.58

1.61

1.40

0.39

1.06

1.44

1.00

1940..

$6.80

$2.77

$5.62
$5.62

$8.26

$5.05

$7.48

$9.80

1.63 times by
operating profits.
Net
investment income and net un¬
ment

total dividends
amounted to $6.80 during this fiV6
year period and they were earned
1.10 times by net investment in¬
come and 1.44 times -by total net
$5.05

dividends

net

FIVE

comparison is as follows:

the

Profits

$0.02

$1.84

1942—

—0.69

1945—

Profits

Inv. Inc.

Oper.

1.00

1.40

0.50

0.61

1.00

0.57

1.19

1.41
1.26

$5.61

1.45

1.00

0.46

1.16

$5.74

$6.20

$0.93

$5.76

before

income,

operating profits, after taxes.

net

total! net operating
profits, after taxes, represented
only 93% of dividends. North
up*
....

the

Total Dividends per Share

♦Total Net Inv. Inc., per

whole ten

Over the

$13.00
14.98
1-15

Profits, per Share

1 Total Net Operating

♦Before Federal Income Taxes.

——

Request

Laird, Bissell & Meeds

'.Franklin, obviously, has been a
generous
dividend payer
than has North River, but the lat¬
ter -has covered dividends by a

favorable

appre¬

died at the

home of his daughter

Denver,

the age of 70.
Mr". Gordon
for

seven

until

years,

retire-

his

ment,

was

Vice- Presi¬
of

dent

CHbbs. Manager Trading Department)

Bank
cago

Chi¬

Insurance & Bank Stocks
—

Sold

in charge
bond

the
was

Pres¬

—

a. in.

to 5 p. m. (P. c. T.)

Bankers Asso¬
ciation

Frank

Gordon

for

1932-33, Treasurer of the Univer¬
sity of Illinois in 1932, Treasurer

department

1909,

man¬

in 1912 and a Vice-President
of the. bank in 1916.
lie became
Vme-President of the First Na¬

OF CALIFORNIA

PRIVATE WIRES

unemployment

as usual,
usual, and

down at the end of the road

war

usual; and when we pass this
resolution we are serving notice

that the CIO is not going back to
that kind of

world,

forward

dreamed

about and

boys

our

over

goihg

that

told

that

fighting for
lying in the fox¬

were

when they were

holes all

we are

world

the world.

win that fight we

they said the standard
would

come

down if

of living
abolished

the 12-hour day, but we got an

hour day,

Planning and Education
Relationships
of
educational

Estate
—

philanthropy and the problems of
trusts,
estates
and
inheritance
taxation—Pomona College, Public
Relations Office, Claremont, Calif.

hour day we got

march

science,

and

Recovery in Europe—John Ken¬
Galbraith

neth

—

National

Plan¬

ning Association—800 21st Street,
processing goes on every N. W., Washington 6, D. C —
day, and I say don't stop that paper—25£.
march of technology, let's speed
it up and accelerate it, but let
Five Week Patterns of Prices &
the people
have their interests
Volume—A classification of the
geared to that advanced technol¬
weekly ; movements
of
trading
ogy, ard let us noiVop only with
velocity and the Dow-Jones In¬
the ticker in Wall Street.
dustrial
Averages
through
the
American
industry
can
pay
twenty-year period 1926-1946 —
higher
wages
without
higher Arthur A. Merrill, 1567 Kingston
prices. This fight is not just for Avenue, Schenectady 8, N. Y. —
more money for Joe
Smith, as I
paper—$1.00.
said before, but we are deciding
today on whether we are going
American Competitive System,
:bacx to Hooverism again in Amer¬ The
Chamber of Commerce of
ica; and the CIO says to the Re¬ the United States, Washington 6,

in the world to go forward to

better world and better life and

higher standard of living. We
hope and we pray—and I know
under
President Murray's great
a

—.

—

Bennett Research Head

Reynolds & Go.

associated with the firm

gan Francises

L, A. 280

—

and

now

charge of its research depart-

will do everything we can

to resolve these matters that way,

that

industry

sit-down

are
wre

goes

PORTLAND,

ME.—Charles

Carr and Rex W. Dodge are now'
connected with J. Arthur Warner

Co.,

Both

Inc.,

were

should take practical
steps in the CIO to get a war chest
we

about

dollars,

ten

which

twelve

CIO

ju«t the
Auto Workers or Clothing Work¬
ers or Steel workers, but a com¬
mon war chest that any CIO union
making a fight in these basic;

could

know that they
.behind

had that whole War chest

them,

and

(ESTABLISHED

1817)

Paid-Up Capital

£8,780,000
6,150,000

Reserve

Fund

Reserve

Liability of Prop._ 8,780,000

unions

all

could have access to, not

struggles

NEW SOUTH WALES

million

I think maybe if we
a war chest the

had that kind of

Seattle

BANKOF

strike in the next wage

I say

Australia and New Zealand

another

it did the last time, we
not going to surrender, and
will fight.

cycle

New York

,210 West 7th St., Los Angeles
Chicago

1925.

Reynolds & Co., 120 JBroadway;
City, members of the
New York Stock Exchange, an¬
nounce that William M. Bennett

BUTLER-HUFF & CO.

TELETYPE L, A. 279

For

Inquiries invited. Orders solicited.

—•

responsibility in that struggle.
When we fought for the 8-hour
day back in American history,

COMPARED,

Special Bulletin and Booklet Service to Dealers & Brokers

N®* York

unless

war

the

tmentj

tional Bank in

Quoted

REVIEWED

Trading daily 7

and

.and to

depart ment.

bond

the old way

publicans, and yes, to the reac¬ D. C.—paper—10c—lower price in
tionary Democrats in the South, quantity.
Big Business and the Wall
Street gang, that we didn't fight
this war to go back to another de¬ Arthur Warner & Co. Adds
(Special to The Financial Chronicle)
pression; we fought and won a

National

First

ager

Bought

back

life, with depression

—

the

over

t-1248-49

ANAYLZED

efficient

Bank.
In 1903 he transferred to
this particular 10-year period
the then newly organized First
does not show up well, for the Trust and Savings Bank. He be¬
reason
assistant
that the insurance stock came
manager
of its

BArclpy 7-3500

Teletype—XY

distribution

York Stock Exchange

BROADWAY, NEW YORK 5, N. Y.
Telephone:

is capable of producing;

people have the
either we get a balance
productive power and

Chapman Building.'
previously with W. H.
statesmanship and leadership, the Bell & Co., Inc., Mr. Dodge being
•CIO has an organization and the manager of the latter's Portland
wider margin and thus ploughed of the Lincoln Park Commission
respective affiliates that will make office.
back a larger proportion of (earn¬ from 1931 until park consolidation
every honest effort to meet this
ings into the business.
This dif¬ in 1934, and Assistant Treasurer of problem of higher wages through
ference has been reflected in the the Chicago Park District until
Joins Schirmer Atherton
collective bargaining over the con-relative growth of liquidating and 1941. Under the late Mayer Anton
(Special to The Financial Chronicle)
ferfcnee tables.
I think nothing
Cermak he was an adviser to the
invested assets per share, Frank¬
would be more practical than if
BOSTON, MASS.—James Lund
lin showing very little growth city controller.
this CIG convention wduld say has been added to the staff of
while North River has experi¬
Mr. Gordon entered the bank¬
that while we are committed to Schirmer, Atherton & Co., 50 Con¬
enced fairly substantial growth.
ing business in 1892 as a mes¬ an application of the democratic gress Street.
for
the
First National processes of collective bargaining,
The investor's long term gain senger

Bank & Trust Company

Bett

Standard

fire

Frank M. Gordon Dead

Inves

3.6%

Central Hanover

Members New

with
of

Fraiik'M. Gordon, financial and
civic figure in
Chicago for 50
years until his retirement in 1942,

23.0%

ICO

River's

North

ident

$' 1.50
:

Bulletin

index

River.

■

The American

choice,

tion economy, and unless we win
that fight all the pious talk about
gives an appreciation of i the economic bill of rights and
50.6%, whereas Franklin's appre¬ the four freedoms will then be
ciation is only 15.8% and North so much
hog wash. We have the
River's is 0%.
On Jan. 2, 1936
job of creating the economic basis
the index was 122.2, its decline to of America
upon which perma¬
Nov.
28, 1946 being only 7:6% nent peace can be constructed, and
compared with a decline of 40.2% 'the CIO has to accept the major

$ 6.89

essary.

which

$ 5.10
19.5%

the adoption of the reso¬
lution, not jusc to get a wage in¬
crease for tne people I represent,
but as an economic necessity to
create the kind of relationship be¬
tween wages, purchasing power,
and productive power that is nec¬

full employment and full produc¬

36.86

production

I urge

stocks, which was 114.6 on Nov.
28, 1946 vs. 73.6 on March 31, 1938

$29.97

$ 0.84"
2.8%-

—-

Invest. Assts.

Liq. Val.

I hope maybe we can con¬

on.

will lose the whole fight to create

31.23

buy this greater
that our

can

$26.13

> '

they

volume

insurance

comparison

Poor's

43:03

3,0,91.

which

economy

$41.53

$30.07!

12-31-45

J-Jj*
13.87

North River

Invest. Assts.

VaL

11.38

15.54

——

Franklin-

Liq.

period

1.19
l-5y
fAfter Federal Income Taxes.

Coverage

12-3146

year

comparison is as follows:
Franklin
North River

Coverage

$ Growth
% Growth

thing

and

1.15

but

Dividend

striking

$5.00

investment

Dividend

+35.0%
about both

+ 68.5%
The

ciation of its stock.

1.00

1.28

five-year RiVer
covered dividends
times by net investment income,
period, Franklin's dividends r, of
hv n^t investment ir
before taxes, and 1.12 times by
$6.20 were earned 1.20 times by;

net

+$ 7.75

1.00

$1.00

0.24

fl During!the* second

taxes,

+$13.05

living but to go beyond the
cost of living, to give a means by

1.00

$1.42

1.12

1.08

with the,

the

$1.17

—0.87

1.12

$7.50

l'cr, not just to catch

greater long-term market

$0.27

1.40

0.40

Totals -—$0,68:.

between

long-term equity growth, if con¬
tinued, may be reflected in

Dividends

$1.40

0..74

1.35

—4).54'

1944—

1.33

0.13

1943—

Dividends

$1.86

1.58

militantly execute that

gram and

and along with that 8the highest liv¬
ing standard in the world. Why?
Because the march of technology,

Total Net

Net

'Oper.

Inv. Inc.

1941—

Year

Total Gain——

however, may eventu¬
ally be in position to restore its
$1.40 dividend; on the other hand,

North River
Net Und.

the practical job as
trade unionists to formulate a pro¬

cost of

Franklin,

1941-1945

PERIOD:

YEAR

Total'Net

Net

$ 7.75

At current prices there is little
to choose between the two stocks.

are

subsequent five years,

-Franklin
Net Und.

after taxes.

were

purchasing power.

have

ance

$10.05

—

Dividends

sider that sort of thing.

between

that will achieve a bal¬
mass
purchasing
-power and mass productive power.
That is the thing we are fighting

Market Gain

this greater

program

for Franklin and 24.1% for North

Over the

1.11 times by net invest-

earned

19
22

derwriting profits are before Fed¬
eral income taxes, but total net

North River's operating profits

operating profits;
total

income, and

total

Franklin's

1938

Nov. 29, 1946-

get

stocks is their poor market action

—0:14

| Totals. $2.73

River

because Joe Smith needs

money

1936-1940
-North River-

Total Net

Net

+$ 3.05
+10.5%
From the low point of the mar¬
ket in 1938, the comparison is as

Franklin

capitalization, un¬
changed during
the period, is
$2,000,000, comprising 800,000
shares at $2.50 par value.

PERIOD:

YEAR

1.75

—4.8%

1.26

1937..

■

and

$13

Loss —$

these

to buy his kids food
them adequa e clothing
and provide decent shelter, but in
the aggregate millions of Joneses
and Smiths throughout America
need
thus
greater
purchasing
power because the nation neeas
more

Investor's Total
or

what

basic facts are, because you know
them as weil as I do.

We make this fight in the CIO

—14%

Dividends

convention

not only

North

1936..

loss

1.68

-Franklin

;

River's

North

tabulations.
FIVE

1.96

Franklin's

vr/

Year

follows:

throughout the entire 10 year
period has been $3,000,000, com¬
prising 600,000 shares at $5 par;

at-

tractive than North River,

$1.42

Div. (1945).

these figures,

basis of

the

Franklin is moderately

$1.41

1.40

Liq. Value per $ of Market (12-31-45)
Invested Assets per $ of Market (12-31-45).
V Ratio 1945 Earnings to Dividends (1945)...
Ratio 1945 Net Inv. Inc. to

5.73%

6.60%

Operating Profits)

Earning Yield (1945 Net

4.55%

Dividend Yield

;

gain

Gain

follows:

Market

(Continued from page 2891)
this

tell

At an asked price of 22,

statistically these two

be of interest, therefore, to compare

may
stocks

36%

1936—_

Nov. 29, 1946-

been evaluating equally
stocks of Franklin Fire and North River, at 20% bid—22 asked,
The insurance stock market has recently

River

Industry Can Pay Higher Wages

great captains of industry would
hesitate before they would take

£23,710,000

Aggregate Assets
Sept., 1945

30th

-.£223,163,622

THOMAS BAKER HEFFER,
General

iHtead

Office:

Manager

George Street, SYDNEY

LONDON

OFFICES:

Threadneedle Street, E. C. 2
47

Berkeley Square, W. 1.

Agency arrangements with Banks

throughout the U.

Volume 164

;

•

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4548

American Industry Supports
Worldwide Economic Freedom
Chairman, Committee on
President, Sidney

political

two

'discuSs

will

reconstruction record.

Commission

Ways

for

re¬

their

dent

the welfare

advance

agriculture.

Meeting with the
ABA President

were

Bailey, who is also Presi¬

of the

First

National

ris,

Bank,

L V. Bower

the Country
Operations Commission and

Chairman

Bank

President

the

First

are

Glen-Gery Shale Brick
Offered by P. W. Brooks

car¬

be made

Public

to im¬

offering of 41,666 shares

par

value

common

stock of

Glen-Gery Shale Brick Corp. was
made Dec. 4 by P. W. Brooks &
Co., Inc. The stock was priced at
$7 per share. Proceeds from this
financing will be used to restore
in part the working capital which
was
expended in improving! and
extending the" company's plant in and general, agricultural schools Wyomissing, Pa. The corporation
was incorporated in Pennsylvania
for bankers. The Commission will
in 1939 to take over the property,
encourage the states to set up
assets and business of Glen-Gery
Special schools on farm credit; 10.
Shale Brick Co.
The company is
Subsidized competition. The Com¬
in the manufacture of
mission will aid country banks in engaged
brick and similar products suited
competing against subsidized ag¬
to
practically all 1 building re¬
ricultural credit; 11. 1,000 Point
quirements, residential, commer¬
bating Program. The 1,000 point
cial and industrial, andcovering
program has demonstrated its use¬
a wide range of color, surface and
fulness over a long period of
finish.
Net profit for. the nijie
years. Further improvement will
months
ended
Sept.
30,; 1946
be made In the manner Of Collect¬
amounted to $162,910. For the cal¬
ing the data iip6n Vphich the re¬
endar
year
1945,
net
profit
sults are based.
amounted to $46,079.

this Clarksville, Tenn.; Clyde D. Har¬

happy to have the oppor¬

maintain

Commission

of speaking with you to¬
day because I want to tell you
about this spirit of free, private

Rejoins

Rice Office in Palm Beach
PALM BEACH, FLA.

Harris Hall ft So.

F. Bice and

National

—

Daniel

Co., of Chicago have

CHICAGO, ILL. ?— Lahman V.
Bank, Cape Girardeau, Mo.; John
opened an office in the Biltmore
N.
Thomson, Chairman of the Bower has resigned as Vice-Presi¬
dent of Iowa Electric Light and Hotel under the management of
Subcommittee
o n
Agricultural
Credit of the Federal Legislation Power Company, and has rejoined Charles H. Tuttle. Mr. Tuttle's af¬

American manufac¬
understand it.
I
Committee;
several
delegations the investment firm of Harris, filiation with the firm was pre¬
am
going to be both frank and
Herbert H. Schell
from State Bankers Associations;
Xiistory of free
Hall
&
Co., Ill West Monroe viously reported in the "Financial
outspoken because T. believe that
and Deans
of Agricultural Col¬
men
and
a
Chronicle" of Nov. 28.little can be gained in the world
Street, as Vice-President.
free country.
Freedom has a way that faces us today unless business leges.
After two days of discussion to
of
developing these qualities men in all lands speak frankly
which can be equalled by no other and honestly. Now, as never be¬ formulate a national program for
banks for 1947, it was decided that
state of being.
fore, business men who believe in
Second, this recovery is due to the free private enterprise system the ABA would continue its re¬
enterprise

which is typi-

cal

♦

Agricultural

met for three days here at Louis¬
ville in the Week ended'Nov. 16

tunity

sourcefulness,
•

ate:

year

activities to

deep
admiration
achievement.

work, common
and

the

youth, and educational projects to
benefit .both bankers and farmers.

speak for the American manu¬
facturers when I say you have

there
as your herit¬
age
of
hard

fastest economic

our

sense

Three

announced

the promotion of soil conservation,
bank activities in behalf of farm

cannot be too complimentary

about your

First,

sized:, throughotit

facts.

customers.

by Commission Chairman Charles

The

attributa¬

ble

country banks ipf

program

field

the techniques: in the field
of commodity credit; 8. CoUnty
key bankers. The Commission will
urge the State Bankers Associa¬
tions to, hold key banker Confer¬
ences and training activities to in¬
form the county key banker of
their responsibilities and opportuhities; 9. *■ Farm credit Schools

of economic progress.

fortune.

the

this

prove

whereby banks
position of
leadership in each community in

stroke of good

•was

farm

will be

loans. Studies will

spirit of free, private enterprise
which has always, been the basis

mere
or

T. O'Neill Which will be empha¬

was

accident

their

oarts

that were occupied by the Ger¬

hailed as having made the

mans, Belgium has been
recovery. This
recovery
not
a

brought to the at¬
tention of all banks; 7, Commodity

the United States to do a more
constructive^
hi. the interests

international interference.

Of all the countries in Europe

ulate the 11,000

ascribed rapid ecomomic recovery ofthatcountryto its adherence to free enterprise
system. Says American manufacturers are opposed to cartels and h
intergovernmental commodity agreements and favor multilateralism. •<
Holds tariffs should be eliminated, unless they are essential to
'
^prevention of ^dumping," subsidies and low wages, and "points
«ouLt V. S. must lake leading Vole in promoHon ^ world trade "and ■
aft maintaining
a free enterprise system* without .governmental i

•

ried

16 an It-point
for 1947 to stim¬

Nov.

national program

Co.,'inc.

industrialist, speaking in Belgium,

American

adopted

Economic Relations, NAM

Blumenthal &

Agricultural Commission

operations

the American Bankers Association

SCHELL*

By HERBERT II.

dising farm credit services: The
technique of how successful bank

Agricdiara! Group
Of ASA Adopts Program
The

2899

*the

turers

that

fact

based on a

was

Mr. Schell be¬
Association of Belgium
Industrialists in Brussels, Belgium,
*An address by

fore

see

and

your

the

Nov. 20,

must speak
I

out.

Manufacturers'
International Eco-

Association

Committee

(Continued on page 2904)

1946.

Production Outlook lor
m

■■

inform

bankers

■■

important matters as farm
land
price
levels,
agricultural
credit, and particularly subsidized
competition in
that
field, and
banking services rendered in each
of the states upon which the an¬
nual 1,000 point award is based.
Of particular interest to mem¬
bers

of the Commission

Chairman, Finance

due to strikes
better outlook
an
large pent-up demand; sizable consumer purchasing power;
sample unused facilities to provide large-scale employment; and
^potential for greatly increased production. Warns if prices of
icars, already 50% above prewar levels, continue to rise, demand
ivill be greatly lessened. Sees also in labor situation another
danger spot, and points to need of greater worker productivity
months since the automotive

It is about 16

production of war

rume

that the pros-

Bpects for the
resumption of
•capacity pro¬
duction of mo¬

peared

stride.

doubtful

bankers

problems which
in

about

farming
be applicable

may

concensus

are

states to

many

the extension of credit.

was

There

members

the Commission that banks every¬

where
out

must

"take

the

services

especial

members

was

erans

their

farms."

concern

the

of the Com¬

welfare

vet¬

entering the farming busi¬

ness.

The 11

points of the 1947 agri¬
of the country
announced
by Chairman

cultural

program

who

and

Impediments to Production

postwar high
:rate of 392,000
units, but
it
it

schools which

also

Vice-Presi¬

The industry then dent and Trust Officer of the Na¬
orderly and tional Bank and Trust Co., Char¬
rapid resumption of the manufac¬ lottesville, Va., follow:
ture
of peacetime products.
A
1. Soil conservation. The Com¬
year ago this time, there was con¬ mission- will urge each banker to
siderable confidence that by April know
what
the
important soil
the industry would be back in its
problems of his community are

:shipm en t s
reached the

;appears

inform

be¬

the agri¬

looked forward to an

October

then.

credit

Fu->

accomplished.

ap¬

America

being conducted in

automobiles
substantially

and trucks had been

now

than

manufacture

the

uncer-

tain

industry ceased vol-

materials, and yet it can be correctly stated
*■
dustry's production facilities to

tor vehicles is
:more

cultural

states

Clubs and

half of farm youth; and

mission

offset higher wages.

are

of the

each

the 4-H

Farmers

ture

Ascribing difficulties in automobile production as
:and material shortages, Mr. Hutchinson points to

out

through

Committee, Chrysler Corporation

the

taking
leading part; the programs being

carried

HUTCHINSON*

work being done in soil conserva¬
tion,in which bankers

By B. E.

about

such

Chairman of the National

industry's inability even
to
attain capacity volume

The
now

ex¬
B.

1 y

Hutchinson

that

production primarily results from
two things: the effects of inter¬
ferences with business by govern¬

follow conservation

Jingle bells! Telephone bells I
Yulefide's

rate

production

encouraged

proved sound.
the bankers will be
to
be
prepared to

make

tion;

loans

finance conserva¬

Outside

-The

"go-ahead"

reconversion

given
shortly after V-J Day.
Within a
little more than three months, the

signal to the industry was

physical reconversion
*An address by

of the in-

Mr. Hutchinson

before 51st Congress

of American

Industry, New York

City, Dec. 4,

1946.

ment from a wartime to a
be

peacetime basis has yet to
accomplished. The results are

v'/.i;,

calls

and Day.

Jingle bells! Telephone bells!
A million

For

rent information as

you

calls

calls get through!

cur*
K " ./'A.

to farm land

BELL

6. Credit files and

merchan-"

examples,, continue to be largely visory Committee in each county
under, government
control, and to Tender specialService to vet-erans;

thanks to

easing up on greeting

So urgent

pricey -The Commission, will con¬

price trends until the danger of
very serious. '
inflation has passed; 5. GI farm
Materials in short supply, of loans. Banks will be urged to co¬
which steel and lead are notable operate with the Agricultural Ad¬

(Continued on page 2901)

,5,

Oil Christmas Eve

through having an officer or em¬

toler¬ tinue'to

able

farm programs.

industry has re¬ banks to engage in activities bene¬
production facilities, fiting farm youth; 4. Farm land

but the "reconversion" of govern¬

-r.

The Commission urges that banks

The automobile

converted its

sparing of Long Distance

In this process

can

one-half million.
'

the way,

tices that have been

ment
agencies, through regula¬ ployee devoting full or part time
he
sustained.
If it were, it would tions, allocations and priorities; to a definite outside farm program
and the interruptions occasioned
will be able to "take their services
«only represent an annual produc¬
by strikes and labor disturbances out to the farm"; 3. Youth activ¬
tion of about four and one-half
both in the plants of the industry
ities.
It will be the job of the
isnillion as compared with a pre¬
and of its suppliers.
Commission to
stimulate more
war
record of nearly five and

this

prac¬

,•

vV--,'

TELEPHONE

yilp. 1%$}$i. C"

V"' c"f'"*?''( \

SYSTEM

THE

.2900,

CQMiMJllClAt ^jBll^NCIAt

r,y-r-

«»

•

*4,i

CHRONICLE,;■

Four New Members of

Canadian Securities
:;>*"<Cf'" '*

•.■

CHICAGO, ?
~ Ralph
W.
Davis, Chairman of the Board of
The Chicago Stock Exchange, an¬

WILLIAM McKAY

,i Can Canada, which is still largely the economic shadow of this nounced the admission of four new
country, serve as the logical haven of U. S, refugee funds?:
members:
v
r*«***
The free market for the Canadian dollar, in spite of the raising
John A. Collett, of B. C. Chris¬
of its official parity to par with the U. S. dollar, has indicated until
topher & Co., Kansas City, .Mis¬
recently that the return to full parity was not clearly justified.
souri.
1
Now the renewed movement into Canadian funds stems largely
Howard F. Detmer, of Detmer &
from doubts concerning the ef-$
*
Co., Chicago, Illinois.
fects of labor difficulties in the tion originated outside its borders,
• »

■

•

-United

States,

which

will

ad¬

result

tariff

British

the

versely affect the domestic acon-

policy of Imperial Preference. As

This support for Canadian

consequence the great
industrial interests of this country

-omy..

also

funds

course

the

strengthened

the greater assurance,
nearly the date for the

direct

migrated to Canada to share the
tariff benefits of firms established
within fhe Dominion. Since then
of course there has been a normal

fixing of the international pari¬
ties is approached, that the Do¬
minion will not depart from its movement caused by the natural
decision to establish the official advantages offered by Canada to
value of its currency at par with foreign industry but in the event
of a world-wide depression this
the U. S. dollar.
industrial tide would be arrested.
So closely are the Canadian
Even without a major economic
fortunes tied up with those of this
recession a further weakness in
country, that should the disasters
the Canadian industrial picture is
foreshadowed by the flight of
the possibility of a reversal of the
capital to Canada ever -material¬
industrial tide from this country
ize, it would be only a question
caused by the abandonment or
of time before their effects would
modification by Britain of its pol¬
be reflected north of the border.
icy of Imperial Preference.
Moreover, the impact on the Do¬
Thus
it
would
appear,
that
minion could be more severe as
Canada lacks,the
great shock- whether the economic barometer
is set fair or foul a blind reliance
absorber possessed by the IT. S.
:

shape of an enormaus do¬
absorption

in the

mestic market for the

capital

the greater security of

funds in Canada as compared

with

Alexander M.

Weld

White, of White,

New

Co.,

York,

New

York.

"markets for the absorption of its
tremendous surpluses of primary

products, [would be
.sharp relief.

thrown into

S As far

as Canadian industry is
concerned, its immunity from the

jaarmnil effects' of

any, depression
in ;this country is even less open
vtd Idoubt* $ The Dominion's first

major step towards industrializa-

Vi*.

CANADIAN BONDS
GOVERNMENT

PROVINCIAL
MUNICIPAL
CORPORATION

Francis
land &

Woolard,

Knee-

of these

admission

mem¬

INCORPORATED

E. F,

150, and indicates the growing in¬
in The Chicago Stock Ex¬

terest

change and the Middle West."
The firm of B. C. Christopher &

Co.,

established

1878, has its

home office in Kansas City, Mis¬

branch offices

souri and operates

Detmer

dent

•

the

Brotherh
of

The text of Mr.

ment is attached.

o o

Railroad

Big business

Co.,

Inc.,

ager

tractive trading and investing op¬

portunities."
Wall

of the firm's trading depart¬

ment.

Cadiz

Mr,

formerly

was

and

manager

charged

tatives

Nov.
state¬

ment

Averell

S. C. Reynolds, Jr., Is
With Me, Winmill
Gude,

Winmill

Co.,

Wall

He was with the of the New York Stock Exchange,
Engineering

in sub-contract and contract

termination work.

that

announce

Corporation during and after the nolds,
war

cabinet

and

cabinet

are the following: Secre¬
tary of Navy James C. Forrestal,
head of - the Wall Street bank,

Har-

Dillon, Read & Co., prewar bank¬
for German and Japanese in¬
dustry; Secretary of War Robert
Patterson, long-time attorney for
the New York money ring; Secre¬
tary of Treasury John R. Snyder,
hopeful and active candidate to

dustrial
'

Truman's

before

riman

ers on

other

government
offices.
Associated with Harriman in the

Commerce

ers

lead¬

A. F. Whitney

Nov. 21.

Referring to

head

the

large banks of
interests; Secre¬
tary of Interior James A. Krug,
pro¬ who is marking time in his gov¬
tected against labor leaders be¬ ernment
post while trying to make
cause
of the "undue concentra¬ up his
mind which of several
tion of power in the hands of any
large corporations he will allow
group," Whitney stated: "Secre¬ to favor him with an executive
tary Harriman should list himself position.
Harriman's

implied charge, made
crisis,

these

one

moneyed

in commenting on the coal
that the country must be

interests."

Big

National

No labor leader has any power

influence, except when he gives
to the accumulated misery
and
the just
demands of the
workers
he
represents.
This
human misery is the direct result
of the paralyzing and monstrous
abuse of the economic power for
or

voice

Mr. Harriman

which

Only

the

last

fronts.

now

decade

have

American

working
men
and
women had the protection of stat¬
utory law in their basic demo¬
cratic right to form and join or¬
ganizations of their own free
choice.
Big Business is deter¬
mined to destroy this right.
To
accomplish this end, Big Business
interests

have,

the

for

time

least, dropped their philosophy of
laissez-faire and have now ma¬
neuvered
the
government
into

serving their fascist ends of using
the government against the people
and to strengthen the hands of
corporate interests.
Yes, Mr. Harriman:

"The rights and welfare of the
people of the country as a whole
be protected against undue
concentration .of power in 4 010
hands of any group that can de¬
stroy our life and our democracy."

must

Advisory Council Enlists FBI Help

At the instance of Under Secretary of State

who expressed concern at last week's meeting

rencies of members of the Inter-<§>—
national

Co.,

Stephen

Rey¬

Jr., formerly with Drexel
is

now

associated

and

assistance

American Government,

on-American

appointee to high
of the Bretton
Woods institutions brought along
the reputation of being a heavy
speculator in foreign exchange.
n

position

one

Slera & Co. Adds

the Fund is too limited to do all
the studying necessary
restricted

with

that

them.

The

executive

of the
thus giv¬
ing rise to much research activity
in the five agencies which com¬
pose the NAC:
State, Treasury,
Commerce,
Federal
Reserve
Board, and Export-Import Bank.
In any case, the research staff of

guidance

•

with the Fund keeping its secrets
director
of is not self-evident. As pointed out
naturally has sought the by the writer at the time, one
Fund.

Monetary

the Fund

ton. & Co., Inc.

Aircraft

dominates the

government through its represen¬

American

NEW YORK 5, N. Y.

Grumman

Whitney's state¬

now

Trainmen,

Cq.

trading department of G. A. Sax- Street, New York City, members

NY-1-1045

v.'

Atchison, Garden City, Hutchi¬
son, Topeka and Wichita, Kansas;
Joplin and Springfield, Missouri;
and Hastings and Omaha, Nebras¬ and several other cabinet mem¬
ka.
B. C. Christoper & Co. has bers as outstanding examples of
been a member of the Board of this concentration of power."
Trade of the City of Chicago for
Whitney named Navy Secretary
over 50 years.
Forrestal, Secretary of War Pat¬
Detmer & Co., one of the young¬ terson, Secretary of the Treasury
er firms in Chicago and the 37th
Snyder
and
Interior Secretary
corporation to become a member, Krug, in addition to Harriman, as
is headed by Howard F. Detmer men who seek through their offi¬
who has been in the securities cial positions to "use the govern¬
business
on
LaSalle Street for ment against' the people and to
over 23 years and was formerly a
strengthen the hand of corporate
in

TWO WALL STREET

2-7231

"Big business now dominates the United States Government
through its representatives on the Truman Cabinet," A. F. Whitney,
P'jr ,e s i
^
;

William L. Clayton,
of the NAC, that in¬
terdepartmental body has enlisted the assistance of the Federal
was prompted by the exceedingly
Bureau of Investigation in protecting the secrecy of its documents.
interesting growth prospects of
Latterly the NAC has been unusually busy studying memo¬
the local Exchange and the at¬ randa of its staff committee on the proper par values of the cur¬

GiBespie & Co.

Vice-President

jRECTpft

ay'

Trainmen,
who strengthen hand of cor¬

men

bers," Mr. Davis stated, "brings to
1,000
New •/
a new high the number of brok¬
England busi-^
erage firms and corporations now
ness
and
in¬
members of the Exchange, totaling

remaining on the side-lines was quoted as saying: "The firm's
pending the elimination of the decision to
apply for membership
many uncertainties which cloud
in The Chicago Stock Exchange
the existing investment picture.

Street, New York City, as Man¬
"

Secretary

Co., Chicago, Illinois.

"The

Edwin F. Cadiz has joined E. F.

A. E. AMES & CO.

porate interests.
v

for

Gillespie

Cabinet is dominated by

says

business
connections
of
these cabinet members, as listed
The
present
firm
of White,
isfactory fiscal agreement with
by Whitney, are: Secretary Har¬
the Dominion.
There was also Weld & Co. is a successor to the
riman,
the '"chief buttress"
of
renewed
discussion
concerning
firm of Moffat & White, a part¬ Morgan,
Kuhn, Loeb, who are
the possibility of a further at¬
"the real rulers of our mammoth
tempt to market a City of Mon¬ nership formed in 1895. This firm
insurance
companies,
railroads
treal refunding issue in this coun¬ has gradually expanded until to¬
and commercial banks.",
Secre¬
try. As a result of the subsidence day when it maintains a number
tary Forrestal, head of the Wall
of rumors concerning a further
of domestic and foreign branches. Street Bank of Dillon, Read and
change in the parity of the Cana¬
Weld
&
Co.
recently Co., "prewar bankers for German
dian dollar and the imminence of White,
and Japanese industry."
Secre¬
the fixing of the international opened its Chicago office under
tary-Snyder, "hopeful and active
parities in Accordance with the the managership of Henry W.
candidate to head one of the large
Bretton Woods Agreement, there
banks of the moneyed interests."
Meers.
was a revival of the demand for
Kneeland & Co., established in Secretary Krug, "who is marking
internal bonds.
Free funds in
time in his government post while
1931 is one of the better known
consequence improved sharply to
3V2% .discount, Internal stocks national trading firms and has trying to make up his mind which
oft several large* corporations he
rallied to some degree with the been
principally known as a deal¬ will allow to favor him with an
gold and paper groups especially
er in unlisted securities.
Francis executive position."
prominent.
C. Woolard, who holds the mem¬
With regard to future prospects
there is still every justification bership registered for the firm,
Saskatchewans following the sat¬

Edwin F. Cadiz Joins
CANADIAN STOCKS

A F. Whitney, President of Brotherhood of Railroad

address

production and its inde¬ this country can prove to be
pendence of foreign sources of placed on an unreal basis even in
the absence of the existing Cana¬
'supply.
'
dian exchange restrictions.
jMbreover a major depression in
During the past week the se¬
this country would have its reper¬
cussions throughout the world. In curity markets continued gener¬
such event the basic weakness of ally dull. In the external section
partner of the firm of Dempsey,
the. Canadian economy, which lies some interest was displayed in
of .-its

iit its undue reliance on foreign

Charges Wall Street Dominates Government!,

>r.

Chicago Slock Exch.

■

Thursday^-December 5, 1946

fair

therefore

not

within the

period ending Dec. 12.
the

least

cause

assume

Mr.

N. Friedman to Staff
Nehemiah Friedman is

sociated

with

Stern

now

Co.,

as¬

129

Clayton's concern is the fear that Broadway, New York City, mem¬
leakage of clues to the stand bers of the New

$200,000

TAYLOR, DEALE
A
64 Wall

COMPANY

Railways

Dominion of Canada Guaranteed

4%% Bonds Due February 1,1956
Principal and interest payable in New

York,

Canada

and London

•

Incorporated*

Corporate

14 Wall
Toronto

Montreal

Vancouver

about

De¬

director cast

largest national vote in the

to be

London, England

well buttressed with facts

to be very difficult to overcome

as
on

Street, New York 5

Winnipeg

Bailey & Selland Formed
FRESNO,

CALIF,—Bailey

and

Selland has been formed with of¬
Fund, but for the reason men¬
tioned above his position is likely fices at 1157 Fulton Street, to en¬

Wood, Gundy & Co.

Municipal

American executive

the

CANADIAN

SECURITIES
Provincial

the Fund

cember 12. Not onl y does the

Price to yield 2.30%

Government

announcement

WHitehall 3-1874

Ex¬

taking on change. Mr. Friedman was i for¬
any given currency's parity might merly with Abraham & Co. and
1 ead to speculation in the;!ex~ Albert Fried & Co.
'
changes before the Fund's
rector

Canadian National

Street, Nefr York 5

York Stock

which the American executive di¬

Non-Callable

economic grounds.

What the FBI

can

gage

the

securities

business.

Partners are John B. Bailey and
A. L. Selland.

do to insure ly:

with

all the various nationals connected pany.

Both

were

former¬

First- California
-

Com*
,

ioans should decliile early next year and
February ot-Match, it is (][uite-Iikely that

•

*•

offered to ultimate investors;!

^Our Reporter on Governments"

the peak" is passed during because the interruption to
there Will be no securities car- production during the

By J OHN T. CHIPPENDALE, JR.

war'»

period , has cost the .country a
potential used car supply of some¬
thing in the order of 15,000,000

* %

and there is
no let-up by March of next year, it seems to he a pretty safe bet
tthat there will* he an, Issue of long-term bonds to ultimate inOn the other hand, if loans continue to -move up,

;

new

cars..■//or

; •

•;f':

,Im4 summary,

The downward drift in prices in the past week has carried some
issues to new lows for the year.
i\ This has not resulted so much

The

debt retiring policy in

the future will be a much more

effective quantitative credit control than in the past.

int.fto„av<"d of the government
Informed followers aLtius„tlme1 ^

iff

inventoiies

may elements of strength—large
pend-up demand, sizable consu¬
mer
purchasing
power,
ample
unused facilities to provide largescale employment, and the poten¬

Too fast a

sharply and would be
of deposits should
o. ^.u ^r be

2f, Stationary.* •. . .for futurp action hv the monetarv authorities
Loans • and the velocity
watched oarefullv
carefully for future action by the monetary autnorit es.

securities marbe taking

kets know that changes and readjustments in holdings will

the situation in
the automobile industry contains

place for the greater part of the month... They also know thai.siich
conditions generally present a good buying opportunity.
.V^^ -

|iOANvl>ATA^

. . .

tial

for /

greatlyw increased

ductiph.;>r;';b^

Reserve Bank o| New York: into the
The danger spot is the labor sit¬
However, there Is now, as always, the ever-present desire?
composition of loans made by member banks, is one of the steps in
A new wave of strikes,
to buy securities as cheaply as possible, which means that until
the debt management program... The Central Bank wants to know uation.
someone starts to pick up obligations at levels they consider athow much of these loans are for capital purposes. . v; These could interrupting production and in¬
tractive the market might move lower on light volume..
be refunded through investment banking channels. .
.
Seasonal evitably causing price increases,
would seriously threaten the con¬
Nevertheless, when this buying does take place, as some of it working capital loans are important to the banks and the volume of
tinuing stability of the industry's
has in the past two days, it shows what a moderate demand, plus a these will have an important bearing on future issues of securities by
operations.
;3v
the Treasury.
thin
The inquiry by the Federal

•

market,

The immediate

decline, such as this one, that is due to tempo¬
factors, can be followed by a quick and sizable

technical

rary

do to prices which were, moved up rather sharply.

can

This indicates that

recovery.

to attain

Production Outlook for

''K3yC

...

BUYING OPPORTUNITIES

The shorter and intermediate maturities in many instances

Automobile Industry

have

through to new lows, and this will no doubt be welcomed by
the commercial banks as a buying opportunity.
In some cases, it
is being advised now that scale purchases be made with at least 50%
of the amount to be acquired being taken on at present levels. . . .
gone

...

The 2s due June and

December 1952/54

being recommended as
attractive for purchase at these prices.
Some of the income that
will be lost in the Dec. 15 retirement has to be made up, and the
longest taxable 2s seem to be likely replacements for the maturing
lVz% notes.
.

are

continue

Strikes

automobile
and

coal

strikes

somewhat

clouded

position,

because

the

talk

tax

spring
production

of at

re¬

least

cles.

to be in

satisfactory profit.
Spare Parts Production

last

account for the loss of

One bright spot is the
cent accomplishment in

Strikes in the electrical in¬

1,200,000 motor vehi¬

have seriously interfered
ductions, there is very little that the commercial banks can
with the production of equipment
acquire to keep up income.
vitally needed for the production
)f
The 2V2S due 1956/58, the 2V4S due 1956/59 and the 2V2S due of flat
steel, which is most ur¬
Sept. 15, 1967/72 are the only longer taxable bank issues that can gently needed. >'
be picked up to improve income.
The now eligible 2J/4S due
In the automobile industry it¬
1956/59 seem to be especially attractive to many money market
self, in the 12 months ended Sept.
followers and are being recommended as a replacement for the
30, more than 73,000 man years of
called 1%% notes.
'
{
.
.'n
!5? •>.
work were lost through strikes.
Factors influencing the market are Treasury financing,'institu¬ This is substantially the equiva¬
tional year-end financial adjustments, the coal strike, talk of need lent of a full year's production of
for higher interest rates, as well as some selling of obligations to get Chrysler Corporation.
Even this
funds that have been used to pay for corporate securities that were incredible figure does not reflect
recently purchased. .
. It is
indicated that there has been liquidation production losses occasioned by
of government obligations in order to get funds that were used to strikes in the plants of vendors
|>ay for the purchases of the preferred stock of one of the country's and suppliers to the automotive
.

dustry

...

•
r
largest industrial concerns. . % . The price was attractive, the issue industry.
went to a premium at once, and the' insurance companies and other
High absenteeism among work¬
non-bank investors were large buyers of this security. ...
* i ers, and excessive labor turnover,
have
both contributed seriously

STRONG

MARKET FORECAST

will be

provement after the turn of the year.
opinions seem to be about as follows:

1947.

currently

shown by factory employment as
of the end of August', of 731,000

tend to decline in the early part of

There is likely to be a

level

The reasons for these

productivity.
cost
prevailing
is

worker

Indication of the high labor

much better tone to the market and considerable price im¬

1. Business will

reduced

believe that there

There are many in the financial district who

falling off in sales, after the heavy Christmas of

2. A

in loans.

Automobile Prices

business decline would most likely end the

$2 billions.
3.

rapid increase

War loan accounts will have been

are

inconvenience,

With loans down, and not the same necessity

substantial

credit
.

currently being

losses

its customers of former years.
It

the

anomalous

seems

matter of

to hold short-term

obligations, against government deposits, it is quite likely that
will be seeking longer-term government
securities in order to maintain income, which has been impaired

not be available next

Resolution^ thus far

adopted indicate a preference for
a
mandatory
Saturday
closing
from May to September and permissivd, closing for the/remainder
of the 12 months/ It is indicated

called for the
to serve about five
users before it reached the. scrap
pile. \The.. interruption to' new that a bill providing'/enabling
car production occasioned by the legislation will be introduced, to
war has disrupted this overall dis¬
the state legislature in January.
tribution system. A restored avail¬
ability of automobiles in voluine
pattern

average

car

at all

price. levels, including the
car user,

depends upon

With Van Tuyl & Abbe
Van

Tuyl

Abbe,. 72

Wall

prOrhpl ^sumption of volume street, frew; Yofk City, announce;
that Alfred
■
production of; new cars.! At best,
this day Will be long deferred, associated with their firm.

WHIM AN HONEST DAY'S
EARNS AN HONEST DAY'S WORK

year!

In the excellent small towns of Georgia yoii 1

Automobile

prices can not be
regarded as stabilized at current
levels if costs
are
further in¬

...

will find

reservoir* of Intelligent/

born workers who believe an

will be much more effective in
creased
by accession to labor's
it will be either from taxes or refundings, and
demands for additional increases
these will have a noticeable effect on the government securities
in wages at this time.
markets.
Because of this it is believed that the Treasury will be
While ' the J demand
for
new
much more deliberate in its debt management program during 1947.
automobiles appears firm at cur¬
Nothing will be done that will adversely affect the government
rent price levels and under the
bond market.
If business should decline, it is quite likely that
there will be no debt redemption by the government. . . . There might J prevailing conditions, the ultimate
even be some reflation to
counteract the down trend if it should, effect of further price increases
be severe enough. ...
this demand will inevitably be
4. The debt retirement program

5-day week.

discuss

used cars, but the

prewar

pay

the future, because

before

for

carry-back on excess
taxes previously paid, a contribu¬
tion to net revenue which will

the commercial banks

...

Philadelphia
a n d
Pittsburgh
Clearing House; Associations may

vehicles of an advanced average be regarded as &ign£pf the tim^s,
age continue to operate is a testi¬ it may be safely considered; that
monial to the success which in¬ a large majority of all Pennsyl¬
dustry has attained in supplying vania banks and financial institu¬
effective maintenance service to tions heartily favor the proposed

unsatisfactory, and

show

largely liquidated and

for liquidity as in the past.

somewhat by higher operating costs.

some

the fact that some 30-odd million

tions for the first nine months of

this year were

there will not be the same need

has suffered

prices approximately 50%
over those prevailing in the im¬
mediate prewar period. Financial
reports on the industry's opera¬

It is believed that borrowings have about passed their

compared with about 5*&
1941.
The demand for
That 5-Day Week in Pa.
spare parts to keep
these aged
vehicles operating has been un¬
PHILADELPHIA, PA. —If ? af¬
believably great. While the public firmative recommendations by the

sold at

peak and with inventory liquidation it is indicated there could be a
rather sizable repayment of loans, which might amount to as much
as

nation possesses aM

ingredients of success.

the

Automobiles

...

because this
the material

years

compared with a peak in 1941

depression instead of a

adequate working capital. / Man¬
has demonstrated.; the
possession of the requisite /'knowhow."
If industry fails to get
going, the next great problem
government, labor and; industry
alike are apt to face wjll be. that
of simple solvency, as has been
on occasion before.
Such an out¬
come would be the more a pity

yearg, as

fifth-hand

buying, and the conversion from a sellers' to a buyers' market will
have been about completed. ;.
A prolonged coal strike would hasten
this adjustment and might even result in a'
recession.
/

magnifi¬

the pro¬
duction of spare parts.
Cars now
have an average age of nearly 10

604^000.

costs should be incurred

until attainable volume returns a

hamper
The steel

production.

...

Aside from the partially exempt issues, which seem

creases :n

production is arbitra¬
rily restricted.

ity now/which Will; validate past
wage increases.
Thrifty investors
have provided magnificent plants,
efficient
10 01 s
and
presently
agement

(Continued from page 2899)

automobile

problem is how
increased productiv¬

deserves

native*\

honest

day's;

honest day's work. Mild

year-round climate affords peak production •
conditions. Write Industrial Development;

Division, GE.ORGIA POWER

COMPANY,j

Atlanta, Georgia.

...

5. The return flow of currency

I
mas

and

from circulation after the

Christ-,Fi^a^hPPn ^PnStive
m°biles has always It unquestionr
been sensitive
to price changes.

period might amount to between $400,000,000 and $500,000,000
while this will be offset largely by the open market action of

Federal, it will no doubt bring some ease to the money

markets.

adjustments, window dressing, and Treasury financing will be completed this month and these favorable devel¬
Year-end

;

the usual demands that come into the
should be the necessary
Ingredients for an improved government security market....

opments
"

coupled with

market at the beginning of the new year

DEBT RETIREMENT

policy will be flexible
they develop, it is indicated that it
will be definitely tied in with the business situation. ... Debt re¬
demption during 1946 was neither inflationary nor deflationary, be¬
cause the deposits retired were not being used.
However, in the
While it is believed that future Treasury

in order to meet conditions

still is.
When the initial
of the demand has been
met, the historic relationship be¬
tween
price
and Volume
will
ably

urgency

doubtless reassert itself.

Whether

hot

sustained de¬

capacity, volume
production of automobiles, even at
prices currently prevailing, can
be maintained is a question man¬
agement, labor and the public
should ponder.
A continuation of
the see-saw increase in wages and

mand

for

the

PLANT the Future in

prices unquestionably will even¬
coming year- it will be < a different situation because debk redemption tually bring /about a limitation of
from surplus or trust funds will be anti-inflationary. . . . This would!
productionj and might easily be
liavd. hn effect on the business picture.
.
Therefore, it seems as
the "occasion for touching off
though the- ddbt redemption program in Order hot to disturb the
economic situation will be tied in with the volume of loans.
If deflationary spiral/ No further in¬

GEORGIA

v..*

.... -.'j

» ■'

;

-•.-w-nf 'Tr-

Thursday^ December 5,194&

SHE COMMERCIAL & FINANCIAL CHRQKICLB;

2902

Securities Salesman's Corner

The Coal Strike's
(Continued from
trial process. Thus,

By JOHI^ DtJXTON

involving the; Same number

page

in almost any

of workers

If there is a business where: constructive effort has a cumula¬
tive effect upon future results, it is the securities business.
The

2888)
a work stop¬

page

of the
final prod¬

trades you make today are the RESULT of the. work you

industries

producing

would

ucts

have

consequences

did yes¬

Impact at Home and Abroad
However,

ing qualities. Coking coal is a
specialized - coal produced in a
relatively few mines. Coal stocks
outside the coke industry could

time.

not

quence. We
the greatest

shifted to

manufac¬

coke

ture in order to keep the steel in¬

condition

nomic

the present eco¬
of the Nation

disruption at this
particular
conse¬

makes industrial

moment

come through,
in history with"
our economy badly out of balance
and with very large accumulated
shortages of many types of goods.

have

war

much less severe. For example, a dustry going. The same is equally
The people you know now are the people you met yes¬ shutdown of the automobile in¬ true of the coal that is used
by
The securities you are selling out today to establish tax
dustry, the textile, industry, or the city gas companies for manufac¬
you learned about another day, and made if your business construction
industry, as costly as turing gas, and to a degree is true Since the end of the war sub¬
to remember.
The new account that you opened last week, because
they would be, would not have the also of steam coal used by elec¬ stantial progress has been made in
some one of your old customers thought well enough of you to
same immediate and
reconversion, in decreasing ac-'
pervasive ef¬ tric utilities.
recommend them to you—this is- the result of good work done in
fects, upon the whole economy as
Even a redistribution of stocks cumulated shortages, and in mov¬
the past: The statement you uttered that turned an interview into
will be the case with coal.
would
not
prevent
widespread ing toward a balance in supply
a sale, even that too is the outgrowth of past learning and experi¬
Three basic industries — rail¬ adverse
economic
repercussions and demand. Nonetheless, the Na¬
ence.
Nothing we do today can help us tomorrow unless such an
roads, electric power, and steel developing long before the stock¬ tion is
act is constructive.
If we work Intelligendy today* even if we
—account for about two-thirds of piles were reduced to zero. Stop¬ ation with dealers' stocks of many
have no IMMEDIATE results to show for our effort, it will follow
the total industrial consumption pages could be expected to occur goods at low levels. Curtailment;
that eventually we. will bo rewarded.- In this business it Js true, that
of bituminous. As these industries very promptly in some segments of production at this time will
"as ye sow, so shall ye reap,"
are dependent upon a continuous
of the economy—indeed, some al¬ materially add to the distortions
This is such an obvious fact that it is strange that so many
of the price system and introduce
supply of coal, and as our indus¬ ready have occurred.
securities salesmen waste their time.
When business is slow, such
trial structure is dependent upon
The
stocks likewise are very maladjustments into the economic
as it is now and has been for the past few
months, there could be continuous
operation
of
these unevenly distributed among in¬ mechanism that will not only be
110 better time to get out and MEET
PEOPLE. Yet there are men. three industries, the disaster in¬ dustrial users, and any attempt at immediately disruptive and costly*
who sit arounrl their offices and bemoan the fact that they have
volved in a prolonged coal short¬ widespread
shifting
would
in¬ but will require a long period to
nothing to do!
If there ever was a time to get out and see some
age would be of almost indescrib¬ volve machinery for so doing not remedy.
new prospects it is when business is dull.
YOU CAN'T DO THIS able
now in existence, and the shifting
magnitude.
WHEN "BUSINESS IS GOOD—THEN YOU DON'T HAVE THE

terday.

terday.
losses,

•

The elimination of much of the

TIME FOR MISSIONARY WORK.

Last week the writer secured
zens

who lived in

a list of about 20 prominent citi¬
neighboring community, and went to work.
In

two days time he didn't make a sale.
He didn't expect to make a
sale.
But he accomplished several more important things.
He met
about

half

dozen

QUALIFIED investors, who were pleased to
grant him an interview.
He got some cobwebs out of his head
becaues he spoke to some new faces and acquired a new outlook.
Next month when he has a promising situation to offer, he will have
some new territory to work because he has already started to till
the ground.
He sharpened up his selling ability that had begun
to get

pretty rusty from lack of work.

He got back some of his pep!
From now on until markets! and retailing activity begin to
pick up again, it seems like sound business to spend a day or two.
qut pf each week calling^ onnew! people* 'Twenty-Jive new pros¬
'

lot of difference in NEXT YEAR'S EARNINGS,
But now! is the time, to start building up good will* not next year,
then, it,will be too late.
And don't forget* people ate always ready
to see another broker after the market has had a severe decline.
pects can

mean

People who buy securities always take the credit for their profits

coal traffic,

sharp restrictions on
passenger traffic, and the possi¬
ble restrictions on freight traffic

you to

acquire

sell

some

tnarket break.
end

pick

some

This

yoprs.

You

are

up some new

customers, and it is

isn't

missing

good time for

fupny—it/Is true after

customers—-you'll

nee| them to make ftp for

T0DAY PAY

$HE THINGS

Two With Schwabacher

With Garrett-Bramfield

(Special to Tub Financial Chronicle),

(Special, to The Financial Chronicle)

SAN'

FRANCISCO^ CALIF, '

Joseph
Sherwin

Mazy

are

and

David

with

now

Schwa¬

bacher & Co., 600 Market Street,
members of the New York and
San Francisco Stock Exchanges.

DENVER, COLO. — GarrettBromfield & Co., 650 Seventeenth
Street, members of the Chicago
Stock

Exchange,

Reel to

their staff.

have

added
Lloyd W. Hammer and Eugene T.

■

■■—p—■

that

within

I-

Harold S. Chase Opens
(Special* to tui Financial Chronicle)

Joseph Wilder Opens

consume

will be exhausted

able would pose an

tributed

badly dis¬

to create

unprec¬

edented transportation crisis. A
cessation of bituminous coal pro¬
duction for 90 days would require

curtailment of rail transportation
all services except those ab¬

for

solutely

essential

life

and

health.
Stocks of coal held by utilities

widely.

vary

situation is
the

The

most

the

states

Mississippi

where

critical
east

industrial

high

energy

is produced by coal. States in the

north, central and middle
region particularly rely
coal for electric power pro¬

(Special to The Financial Chronicle) "

over

90%

and

respectively of the

over

electric

stoppage of bituminous coal min¬
ing for a period of 90 days would
result in the

closing down of most

of the electric utilities which
coal as fuel.
Due to insufficient coal

use

supplies

and the lack of transportation for

strike.

Adams Street.

1101

down

after

Production
has been

stocks,

*I)entnan Tire 4 Rubber

CQi—5% Gpnv. Pfd.

^Memorandum available

Herrick,Waddell

request

55 LIBERTY STREET. NEW
YORK 5. N. Y.

American

Fruit

Growers Inc., Com*

Arden Farms

Co., Pfd. & Com.

Fullerton
'

1-1

V-,4

Oil Co., Com.
'

\a ■* ''IT

WagensellerS DurstJna
-

Membera Loa Angelea Stock
€26

so. spring st.

Exckanga '

trinity 374r.

x°5 angeles u

Teletype i LA ft
QeoteHem «nd lnfornv»Ho«

«n C«nforaU

prolonged

stoppage

exactness

what

about

must

with
be

of informed ' calculation,
since we have not had prior ex¬
matter

perience with a prolonged coal
stoppage at this stage of produc¬
tion and consumption. But taking
into account the rate of adjust¬
that" occurred

ment

last

spring,

and

upon

coal

bituminous

coal

increasing since the tie-

although both absolutely

and in relation to the level of use,
industrial stocks are lower now
than

they

were

last

April.

The

the general economy.
accurately as they have been

able, the technicians of the De¬
partment of Commerce have esti¬
mated that industrial production
at the end of a 60-day period will
be down about 25%, and will con¬
tinue to decline sharply if the coal
flow is still stopped.
By that time employment would
similarly be falling at a rapid
have

would

Business

data of the Solid: Fuels Adminis¬

rate.

tration

in all of the
major classifications of users there
are some plants with 10 days'
sup¬

adjustments in their opera¬
tions, and it is calculated that the
be

show

that

According to. the Department of
Interior the total amount! of coal
above ground at
t^beginnihg of
the present stirke amounted to
75,850,000 tons.f At the September
rate of consumption this is equiv¬
alent to 53 days' supply for all
purposes assuming that no ration¬
ing measures are applied and that
available supplies, could be- and
would be redistributed,
Bituminous coal is npt a homo¬
geneous commodity, and not all
coal is interchangeable for all
uses.

Stocks in

frequently

users'

adapted

hands

are

to their par¬

ticular kind of operation. The coal
that is

commercially marketed

consists of a wide variety of sizes,
chemical constituents, and burn¬

make

loss of incomes to workers would
at

monthly rate

billion

dollars.

over

This would

mean

enforced idleness equivalent to 5
million

full-time*workers.

These direct losses

would be ac¬

companied by incalculable harm
to
all
parts of the
economy.
Profits
are

cease

in businesses which

shut down,

tailed

others

and will be cur¬
which will only

operate under conditions of severe

hnd increasing hardship*
The vast repercussions upon all
sectors of the economic

system of
delay in settling this conflict can
be

summarized

terms

the

national income. It is*estimated
that the

annual rate, of national
income, now running at $170: bil¬
lion, will drop to $150 billion after
two months.

readily apparent that a
prolonged coal stoppage would in¬
volve a major disaster to the eco¬
f Exclusive of an estimated. 10 nomic system and to the welfare
million tons in household bins.
J Of the American people at any
.

Aviation

appropriate to mention the
effect of a prolonged coal strike
on
the operations
of the Civil
Aeronautics

Administration

civil aviation

generally. The oper-!

and

ations of the CAA and airline op¬
will not be • greatly af¬

erations

fected by the coal strike if it does
not last beyond 30 days. If the

stoppage in coal production, how¬
should last beyond 60 days,
power failures and the resultant
collapse at critical points in the.

airways communication and airnavigation system would bring to.
halt airline operations and othercivil
aircraft operations in the,
areas affected. By. the end of 60
days on the basis of best estimates,

available

approximately 35% of*
operations within the
United States would cease; and, in!
addition, approximately 38% of
all trans-Atlantic operations
all

airline

would be halted.

upon

the general economy?,
,
••It iff not possible to speak

of the

days

less, and that a very sub¬
stantial segment of each group has
30 days' supply, or less.

Co., Inc.

coal

ply

*Hytron Radio & Electronics Corp.-rCommon
*Prospectus available

acting as a brake upon
industrial output and distribution,

shut

of last spring at a rate which
has permitted some rebuilding of

*Oberman & Go.—5% Conv, P£(ji

distribution

uneven

of stocks

**A. DePinna, Cp.-rrClass A

and with the

exhausted,

quickly

may secure an approximation of
the serious and cumulative effects

business

offices

materials used. It is estimated that
three-fifths of the plants produc¬

fices at 1012

from

applying this experience to
materials, steel production de¬ the present situation, and evaluat¬
clines immediately with the start
ing relevant material of the re¬
of a. coal strike, Bituminous coal
lationship of coal consumption to
accounts for 80.% of the fuels and! the level of national output, we

ing steel will be forced

a small amount of
production flowing from bitumin¬
ous
mines that are likely to re¬
main open, with the need for con¬
servation imperative in the light
of the uncertainty about the re¬
sumption of mining,
with the
existing
supply for some uses

only

likely

Civil

It is

ever,

Activity
With

bituminous

75%

Economic

what is the effect of

DENVER, COLO, -r- Joseph' s.
Wilder is engaging in a securities

Street.

Effects

upon

SANTA BARBARA, CA&IF. —
Harold S. Chase is engaging in
an investment business from of¬
State

impossible ad¬

ministrative burden.

Atlantic

duction with

in order to

the last ton of coal avail¬

Overall

Effect

trans¬

task of redistribution

indicates

energy generated in those regions
produced
by coal. A complete

OFF TOMORROW!

use

dence

days the supplies of many carriers

east,
every

opportunity if you don't try

those which you are going to lose sooner or later.
YOU BO

the

ply to some extent. But the evi¬

will stretch the railroad coal sup¬

they have losses, it is human nature consumption, is heavy and
salesmen.
Now is a good time for percentage of the electric

their

involve

which
itself will
be
critically hit by the stoppage of
bituminous coal production.
The
magnitude
of
rationing
measures required and the actual

but if the market turns down and
to blame their broker

would

portation

Damage to

Small Business

Special mention should be made
of the impact upon small business,
which, with limited resources, will
be

less

able to withstand

nancial

losses

which

the fi¬

bound*

are

Not

only will small pro¬
directly affected by the>
shortages of fuels, materials and;
supplies, but the small business-*,
occur.

ducers be

in the distribution and serv-.,

man

ice trades will suffer

loss

income

progressive^
customers

his

forced to curtail their

are

buying*.

We had been

banking on a very
large rise in the number of small
business undertakings to boost the;
civilian
output
above
prewarlevels. This hope is in a large,
measure
being fulfilled by the
war

former

and

veterans

numerous

workers who have been

into

these

success

businesses. It

new

going

the

businesses

that

a good part of the post-war
prosperity must be founded. How¬
ever, the new businesses are in a
very precarious
position during,
their infancy. They started witty

financial

limited

since the
build

war

resources

and!

have not had time

any

major reservedhave,

Even small businesses which
been

for

existence

some

time-

have not built up

strong ca^h re¬
serves. Hence, any serious inter¬
ruption in the output or activity
of these firms will put a drain on
their financial

any

reserves.

expected

that

serious

can

draii*

at this time,
speed up the
outright failure of small business
enterprises.
! )

financial

reserves

would substantially

The small businessmen are not
unaware

of the difficulties

face them.
vey

On the basis of

which
a sur¬

to small businessmen on Nov,

25 responses

from small manufac-,

turers, wholesalers anty
showed deep concern
business

strike

retailers

about thei#

prospects should, the coal>

last

for

any

prolonged

period. For example, 60% of the
manufacturers, 42% of the whole¬

salers, and 35%

of the retailers

.Vlolums 164 " Number

THE COMMERCIAL &

454^

ducing regions; will this pinch be
felt, and felt hard.

reported that they expected the
coal shortage would

•

continued

definitely affect their employment
by the end of January; 75% of
the manufacturers, . 82% of the
wholesalers, 77% of the retailers
reported that it would affect their
sales.
When asked what kind of
effect the coal strike would have,
*37% of the small manufacturers
expected to shut down completely
by the end of January. Another
37% expected that it would be
necessary to lay off some 26 to
99% of their employees. Among
*the wholesalers, 21% expected to
shut down completely and an adh
ditional 35% expected a decrease

Apart from the direct and im¬
mediate

above,

a large segment" of the consuming
population will shortly find itself
hard pressed to purchase even the
supplies that are available as the
spreading paralysis of the econ¬
omy resulting from the coal short¬
age ihuts down the
industrial
plants of the Nation and throws
out of work—and out of income—
the wage earners of the country.
This loss of purchasing power'will
result in increasing inability of

the

completely and 40%.
expected lay-offs of from 26 to

position

The work of the Department of
Commerce under its statutory ob¬

employees.

from 26 to 99%.

nations but it. will hamper

of small busi¬
ness
conducted on Nov. 26 also
testifies to the damage expected
Another

survey

by the small businessman. Inter¬
views were held with 1,448 small

-manufacturing

establishments in
country (each

all sections of the

world

thus threatens ir¬
reparable injury to the funda-r
mental interest of this Govern¬
ment
in
security
through the
maintenance of oeace by inter¬
national cooperation in accord-?
ance with the principles and pur-?

recovery

and

The
cover

page

Injury to the

ending July

Consumer

recognized that in

costs of the eco¬
nomic disruption indicated above
will be largely borne by the con¬
suming public. But more than this,
-the consumer will suffer imme¬
the long run the

coal imports

including

present

foregoing observations
the direct results of a stop-

of coal production and food
taking
place imme¬

over

public utilities such as water sup¬
plies, garbage and sewage disposal,
cannot be adequately maintained.
-At the same time,, medical sup-

Italy,

tailed deliveries of the aforemen¬
tioned

supplies.

Finally, it should be pointed out
that the aforementioned obliga¬
tions

are

integral part-of this

government's policy to seek our
national security through inter¬
national

collaboration,

ap¬

The

be¬

possibility of substitution,
immediate

that there will be an

irrevocable injury from any
failure on our part to meet these

and

national

addition, this government

commitments to deliver to

to our commit¬
increasing our de¬
liveries between now and early

able

element
needed

the

materials,

production
or

in enabling

the transportation of goods to
markets. Particularly in our
centers where processed

$>a essential a part
where railroad and

the

urban

foods are

of the diet and
shipping facil¬

ities must.be maintained in order

to bring hew supplies in

live

ments only by

year up to the maximum
capacity of our transportation sys¬
element is of vital

tem. The time

importance as it would not be
possible to make up or alleviate
the results of diminished deliver¬
ies

stances,

these

stringent

by the

Trempelau

18th;

Louisiana

new

municipal borrowings is definite¬

ly in prospect. This is bne of the
factors? (the other being the future
value of the tax-exempt feature),
that has everted such a depressing
effect on the municipal price level
and

market

activity generally in

opt of the way, the trade will be
required to center its attention on
the
series of
substantial deals
scheduled to take place during the
•the week of Monday, Dec. 9. On
that, date the Canton City School
District, Ohio, will open bids on
an issue of $2,925,000. This will be
followed by Tuesday's awards of

$13,500,000 Los Angeles County,
Calif., school district bonds and
the Government policy as well as
$9,450,000 rural credit certificates
his own and receives his full sup¬ of the State of Minnesota.
On
port; The- President also declared, Tuesday also, Fair Lawn, N. J.,
advices to the New York "Times" will assess tenders on an offering
added, that it is most gratifying of $900,000 bonds. The calendar
to find so many representatives of for Wednesday is, at this writing,

State

It will be seen from the fore¬

going resume that no respite is y
in sight for the trade, despite
the fact that the market is con¬

Sim¬

siderably less than active.
ilar / inertia

in the past,

how¬

been
quickly
-dis¬
the rheels - of a fastmoving deal and it may well be
has

ever,

sipated

stimulant may again y
Manifestly, such
an occurrence would constitute
>\
the best posible Yuletide pres-;
ent for both underwriters and
that

spch

presented.

dealers.

Swan-Rowley Incorporates
JAMESTOWN,

—-

Swan-

Rowley Co., Bank of ; Jamestown
Building, is now doing business as
a
corporation.
Officers are C.
Lynn Rowley, President; C. L.
Rowley, Jr., Vice-President; A.
Swan, Treasurer; and T; E.
Purcell, Secretary. All were pre¬
viously connected with the pre-*
decessor firm, of which C. L. Row¬

ley and Mr. Swan were

partners.

Notice of the Sale Of Bonds * y
Sealed proposals will be received in tha
of the Board of Edu¬
Township
Local
Stark County, Ohio, P.'
M; Sutton, R. P. D. NO. 1,. Alliance, Ohio*
until
twelve
o'clock noon, December 20,
1946, for the purchase of bonds of said
school district in the aggregate -amount Z
of Two Hundred Thousand
($200,000.00)
Clerk

the

office

Washington

cation

District,

School

dated January 15, 1947 and bear- /
interest at not to exceed 6%
per
payable semi-annually and issued
for
the purpose of
constructing a fire¬
proof
elementary
school building, and
under authority of the Laws of Ohio and
6f Sections 2293-1 et. seq. of the Gen¬
eral
Code of Ohio, .and under
and #in
accordance with a Resolution of- the Board
of Education
of said school district to
issue said
bonds, which Resolution was y

Dollars,

ing

annum,

duly passed by the
November, 1946.

Board on the 13th of

Said bonds are of the

$10,000,000

advertisements providing,
interest

however, that where a fractional
rate is bid,
such fractions shall

be one-,
(V*) of one percent (1%); or raul-„
thereof.
Said bonds will be sold
to the highest bidder at the time and plac©
above mentioned at not' less than par and
accrued interest.
Bids may be made upon
all or any number of bonds in this issue.
All bids must state the number of bonds
fourth

tiples

the gross- amount of bid and
interest to date of delivery.
AH
be accompanied by a certified
drawn in favor
of the Board -of

bid for and
accrued

must

bids

check

Washington Township Local
in the sum of $2,000.00.
Education of said school
district reserves the privilege to reject any
and all bids,
/v' y•
V-;';■
Education
School

District
of

Board

The

be sealed and
endorsedWashington. Township School

should

Bids
"Bids

for

Bonds". *

C-y
' v
the Board of Education
Local
„
District, Stark County, Ohio*;
,

By order of
of

Washington Township

School
'

F.! M. SUTTON, Cleric
R.

? opening of bids on the

the

specified

the

facing our country today.

the

denominations and '
recent months.
mature respectively as follows.
All bonds
shall be dated January 15, 1047 and thera >
Investors, generally,
believe
shall be issued two hundred (200)
bonds'
that the twin factors of greatly
of One Thousand ($1,000.00) Dollars each, *
increased supply and lower tax
with
interest
payable semi-annually on J
the 15th day of January and of. July in 1
rates will result in a material
each year.
Said bonds shall mature in*
expansion of yields^ For this
semi-annual installments according to tha j?
reason,
they
are
increasingly following schedule: Five bonds of On© \
Thousand
($1,000.00)
Dollars each shall \
disposed to remain on the side¬
mature March 1,
1948 and five bonds of J.
lines, a- fact that has been clear¬
One
Thousand
($1,000.00) Dollars each ,<
ly evidenced in the "difficulty shall mature September 1, 1948. A similar i
experienced v by
underwriters number of bonds shall mature on each
anniversary of said dates; a total of Ten |
and dealers in distributing pew
Thousand
($10,000.00)
Dollars in bonds}
offerings and in reducing in¬
shall mature in each year for a period ;
pi tWQpty (20) years.
'
ventories.
Anyone desiring to do so may present ;;
With the Baltimore transaction a bid or bids for said bonds • bearing a ?
definite
rate
of interest different than•,

generation which took part in highlighted by the $1,850,000 Eu¬
cfrcumr the recent war taking a deep in¬ clid City School District, Ohio, of¬
Thursday will mark the
terest in the various public issues fering.

Office of Defense

Philadelphia
$3,500,000
University
and

ity, Calif., on the 20th.

This fi¬

substantial flow of

Wis.,

and

Agricultural and Mechanical Col¬
lege, on the 19th; and $2,500,000
San Diego County Water Author¬

nancing is entirely for new cap¬
ital purposes and, in that respect,
lends emphasis to the general be¬
lief that

County,

$5,000,000
District

School

is the $23,200,000 Baltimore, Md.,
issue
scheduled
to
be
award¬

On the basis of information fur¬

nished

$2,000,000 Fort Worth,J
Texas, both on Dec. 17; $2,560,000
Richmond,
Va., ; and
$1,248,000 ;;

ing sales, it will be preceded by a I
of projects of substantial
size; Chief among these, of course,1

cooperation will be ir¬

production factor, as an essential

mission and

outstanding

ed tomorrow (Thursday).

;

cisco, Calif., on Dec. 16; $46,000,000 Pennsylvania Turnpike Com¬

number

reparably damaged.

obligations.
In

3% % bonds,
incidentally, are not callable until
Aug. 1, 1947 at the earliest and
the establishment of specialized the Commission, in deciding to
international
economic
agencies negotiate the refunding at this
involved
therein
and
making time, evidently believes that the
funds available for them. Also, it terms currently available in the
is pertinent that the Congress has money market will materially off¬
made large sums of money avail¬ set the temporary dual interest
able
directly, and through the burden involved in anticipating
Export-Import Bank, for neces¬ actual need of the, funds;
;
\
sary financing in furtherance of
„Whil£ the Turnpike issue tops
the foregoing objectives, and has the
present calendar of impend¬

proved by the Congress in au¬
thorizing our participation in the
United Nations and by approving

Truman Again Backs
has
certain Jewish Homelaridt^
for European
countries an
agreed
The delegates at the 23rd .amthese supplies and because of the quantity of basic foodstuffs
huaF convention^ of Junior Hadasr
inability of drug-producing firms largely bread grains and flourto continue in operation without without which the diet in those sah in Atlantic City; N. J., on Nov.
countries would be at a starvation 27 received a.
coal.
message from Presi¬
leveL As a matter of fact, wo have
i Finally, provision of most of the
dent Truman reaffirming that sup*
basic necessities of life for large already fallen seriously behind, in
port of the Jewish National Home
segments of the q population is our agreed deliveries, mainly on
account of the recently terminated in Palestineand theadmission of
dependent upon-maintaining the
maritime strike, and we will be
10,000 Jewish displaced persons is.
supply of coal, either as a; direct
plies will be impaired both
cause
of the extra demand

ber include the following: $8,500,000 City and County of San Fran¬

particularly in view of the dem¬
onstrated earnings capacity of
the project. While revenues fell
off
sharply
during
the war
years,; as result of- restrictions
on
automobile- travel, the resuits since the relaxation of
controls have been impressive
and. in. keeping with original
projections.

from the United States.

weeks.

therefrom, will be reflected at an
accelerated rate in sharply cur¬

ply

next few

develop

from tolls, the projected new
obligations
are
expected
to
Prove
attractive to investors,

dangers which will arise when, because
of lack of coal, necessary

the

volume
to

consequent falling off of our in¬
dustrial production, particularly
of steel and finished goods made

scheduled

matter of fact, the signs are that
December will prove to be the

This
reoresents about one-fifth of their
total consumption. Prior to the
war their imports from the United
States were negligible, and Ger-?
diate and, in many cases, irrepar¬
many
and the United Kingdom
able 'injury. Approximately 55%
were
then large coal exporters.
of the households ;of the Nation
Without supplies from the United
-are heated by coal, 38%
by bituStates, or With1 curtailed deliver¬ Authorized even after the cessa¬
: rainous coal. Few of these house¬
ies, these European countries al¬ tion of hostilities the continuance
holds have, or could have,
ac¬
ready hard hit by war and occu¬ of the President's war powers, in¬
cumulated stocks of fuel suffipation, will not be able to sustain cluding allocations, export con¬
eient to permit them to maintain
even a minimum economy. Since
trols, and the rendering of prior¬
-adequate heat for any prolonged
they have only negligible, or in ity assistance, to be used, inter
period. Many households, depen¬ some instances, no coal stocks, and alia, for carrying out the afore¬
dent upon coal supplies from local
their indigenous production is in¬ said obligations. That is to say,
dealers, will have to shut down
adequate
even
for
minimum we are concerned here with ob¬
furnaces or stoves almost imme¬
needs, any curtailment whatso¬ ligations
of
our
government,
diately.
determined by both the executive
ever of expected and agreed im¬
Should the strike be prolonged,
ports
from
the United States and legislative branches to be as
many additional homes — heated
would result in irrevocable hu¬ valid and as vital to the public
by manufactured gas or by oil man and property damage and as interest as the winning of the war
burners dependent
upon main¬
well a serious setback to their itself.
tenance
of electric power—will
reconstruction.
Should the United States fail to
be unable to
maintain heat. It
Supplies of coal from the other make the shipments of coal and
must be urged that this means
food referred to above, as will be
more
than discomfort. It means exporting countries, namely, Ger¬
the case if the stoppage of coal
many and Poland, are already just
lowered vitality, lessened ability
as
tightly allocated between the production in the United States
to work, the possibility of serious
various deficit countries, so that is continued, chaotic
conditions
illness and even death for many.
there is no possibility of making
will inevitably
develop in the
Perhaps the most serious threat
countries of destination and the
to health -is the possibility that up our deficits in our committed
deliveries at this time. In other prestige of the government of the
the hospitals in the Nation will
United States and its interest in
not be able to maintain heat. To words, there is no flexibility by
this
threat must
be added the wav of alternative sources of supr national security through inter¬
came

substantial

business

busiest month this year for those
diately and increasing in their im¬
engaged in the purchase and dis¬
pact with the duration. In as¬
tribution of municipals.
sessing the Impact of such a stop-?
Heading the list of important
page for a period beyond 60 days,
certain indirect effects also as¬ undertakings currently in view
is
the
$46,000,000 Pennsylvania
sume very serious proportions.
Turnpike Commission revenue re¬
We are committed to deliver
funding bonds, for which bids
abroad a great variety of operat¬
will be entertained on Dec. 17.
ing supplies and producers' goods
Proceeds of the sale will be used
not only to- furthoTlhe rebbjnstruc-i
by the Commission in the re¬
tion of war-devasted areas, but as
demption of its presently out¬
well to support the production of
standing $40,800,000 3%s of 1968
commodities essential to our econ¬
and to provide for improvements
omy, e.g;, tin from Bolivia, lead
to the highway facility.
from Mexico; wood pulp from
Although payable exclusively
Sweden. The lack of coal and the

1, 1946, 43% of the
of the Western Euro¬

countries,

pean

million

deliveries,

poses of the United Nations char¬
ployees, in the aggregate employ¬ ter.
ing 154,240 production workers).
In the first place, this govern¬
These small
manufacturing es¬ ment is committed to the furnish¬
tablishments reported that if the
ing of about 2 million tons per
coal strike continued, their pro¬ month of coal to European deficit
duction
employment would
be countries. Since the end of the
curtailed by 15% in 10 days, by
war, these countries have become
50% in 30 days, by 73% in 60 day?
largely dependent on the United
and 82% in 90 days.
States for coal. During the year
*

shipments

dicated.

of them with fewer than 250 em¬

It should be

transportation

of the size here
Members of the municipal bond new capital bonds being offered
tons per
month—will have to be substan¬ fraternity, particularly those in by the Chicago Sanitary District,
the underwriting
departments, are
tially curtailed in the event of a.
Other substantial undertakings
continued coal stoppage with the not likely to have much time for
immediate' effects
already
in¬ Christmas shopping in view of the on tap for the month of Decern-./
bulk

involved—one

ligation in the field of world trade
In respect to sales about 26% and economic relations indicates
of the manufacturers, 12% of the that the stoppage of coal produc¬
wholesalers, and 9% of the re-, tion will also seriously damage
tailers expected a decline of 100% our economic and political posi¬
by Jan. 30; and over one-third tion in international affairs. Not
in each category expected a de¬
only will it prevent our meeting
cline in sales which would range current commitments to foreign

domestic

our

system, it is clear that, regardless
of what priorities may be estab¬
lished in the use of transportation,

pooulation to buy the things

TJ. Si World Economic

4 a shut down

2903

Transportation as to the effect of
the coal strike on the performance

it needs.

tineniploynient of 26 to 99%,
Among the retailers 19% expected

99% of their

indicated

effects

FINANCIAL CHRONICLE

F. D. No.

•■.;:•••. r.ai ■:

V Alliance, Ohio

...

2904

{THE COMMERCIAL' & FINANCIAL* (CHRONICLE
not

American Industiy Supports
(Continued from page 2899)
rtomic Relations which formulated

tal commodity agreements. Inter¬

the position

governmental

ernmental

cartels, intergov¬

ments

commodity agreements,

bilateral

trade

agreements

and

The Board

going

Directors

the

National Association of Manufac-

the

cartelization;

very

they

deny

abstention from

buying, ultimatesubsequently approvedUy determine commodity prices,
As-' The structure of prices determines
is the size of production in each of
Composed of over 15,000 manufac¬ its branches. A profitable indus¬
turers who are
responsible for try tends to expand, an unprofita¬
xiauvuai

—

greater than 80%

•

our

xi-_

ble

nation's

—

industry tends to shrink.

In¬

production and who employ more
than 75% of the. manufacturing
.

efficient producers are forced to
close
down.
Real
competition

workers in the United States.

makes
sive.

Cartels

American industry has taken

position against cartels.
I should
quote two succinct para¬
graphs from this position:
"The National Association of

cause

"The

United

States

men

lead

take

the

ism.

They

ness; not
born

competition.

is founded

the

basic

spells

for

1. Foreign
trade is a two-way
street
street oil which traffic uut %ji
on
which
ticnuc
out of

ord

visited

&hd fixed low prices.

Free

only instrument that fixes low
tndces.
If industry fixes prices,
government will control industry
in an attempt to protect the
pub-

lie.

forerunner

nationalization

Need

alone does

motivate
trade

world

not

create

trade.

recordPcould
couia
™ora

Nationalization

of'

and

less

profit

initiative

Role

and

obstacles

other

trade

of World

American

cfoomed

to failure.

are

needs

other barriers

many

a free, private
Time prevents my cov¬
ering all of them. However, I am
sure you would feel that I
was

Nationalized

Tariffs

industries; plagued by political
€c«itroversies with resultant in¬

Tariff,

as you

problem and it

efficiencies produce nothing but
high costs and are .easy prey for
the modern free, private enter¬

Trade

industry

The role

world

ble and real.

only
oniy

**j

comrfrom^a
irom a
come

privlte

know,, is

a knotty
continually con¬

fronts all nations.

As the world's

greatest creditor country,
America have the

responsibility

industrial

and

achieve-

cannot be
disregarded in any plan for world
prosperity.
Our American system of free,
private enterprise speaks for itself.
We have the living, vital
proof; this is the best refutation
possible for any promises the colour

country

lectivist theorists
Our

can

make.

American industry

enthusiastic¬

principles. We
pledged ourselves to fight
PjCPvp™ attack* of our froo
free"

ally endorses these
have

Pa3e

aii«*

piiSte
We want

fSlSt

help of

to
—
We want to^ euust tne neipjM
enlist
peoples.
We are convinced
that this economic philosophy of

„

freedom is the only way to

achieve
and a

of prosperity

maximum

lading peace for the whole

world,

sacrificed
Qwn
whRe winning the
Ba^je 0£ Trafalgar.
Then Bellg05

Lord Neison

JL>d 1vx

w .

was

Wil-

rapid.

para-

Europe^

of free, private enhelP save the

e spi,rlt

lng

terP"?e- she can

rest Eur°Pe-

Army, Navy Budgets
social, and spiritual.
Anything that leaas 10 servnuue
Army
leads to destruction.
We have ferred with President Truman Nohad the most destructive war in vember 14 on budgetary matters
history in the past decade. This according
to
Washington diswar was the result1 of the deter- patches of that date to the Assomination of a small group of men dated Press Present at the meetto make the individual subserviwere
General of the Army
ent to the State. On Nov. 5 we Dwieht D Eisenhower, Chief of
had a political election in the Q+off. Admiral of the Fleet ChesUnited States. The forces of the
f
Wavnl
right won an overwhelming vie- ter W. Nimitz, Cniet oi nava*
tory. Governor Dewey remarked Operations; Major General George
that he is convinced that our peo- j Richards War Department budpie want government that will '
nff:rpr' and' Fleet Admiral
'

wealth

sales.

I shoald like to amplify this
statement and say that once more
Belgium by her own exertions has
® „the fastest economic recovery of any occupied country in
eronomS Europe; by her example of foster-

must be shared by all freedom
loving people of the world
The challengers of corrmetition
and free
enterprise seem
to forget that political freed™
can last no longer than
freedom.
One
cannot
survive
without the other. Anv attack on

American

ment

competition with private business;
Freedom
of
production
and

in
is tangi-

If the exchange of

iM« WliUUVVVVit
XV is
it AO conducted.

IUW4

;

government from

giurn's recovery was rapid,
liam Pitt commented, and I

d4 thd manner in economic freedom is an attack on
all individual freedom-political,

whiri!
which

Elimination of monopoly;
Abstinence of

mnAirorv

trade plays
peace

incentive and risk;

P*"Belgium by her own exertions
1 l?eIieve American manufactur-,
ers have a responsibility to lead L
jT' 'iT u i,
the way in achieving ihe maxi- ^ XT'mayTih, save'thfSSt

Jbllsh"\ent an<*and prosmamteworld peace

maintaining worid

Reward for initiative;

Privilege for thrift;
A tax structure that encourages

Responsibilities

recognizes

the people

serve

without trying

** «««». and
William D. Leahy, Chief of stair

living is the
highest in the world, and we enjoy more individual liberty, more

to become their master.
We do
not want another war. Economic
freedom as well as freedom to ex-

cUKtesto1 recreS!S'asmweUf|;
security than the
people of any other nation in the

geniusand ab»ities of that no further reductions in Army
Belgian people, the American &pd Navy expenditures were conpeople, and the people of the en- templated, and noted that he had

world.

tire world is the best guarantee

standard

economic

President.

the

Truman

Mr.

earlier

Two

had

in August that

directed

stated

the War

more6 wiT'the wa«erfrem "aY °f peaCe"
Department cut its budget from
work
than
any
other
^ was with this idea in mind that $9,000,000,000 to $8,000,000,000 and

prise system.

for

American business men know
that cartels foster
monopolistic

free international trade of its
bar¬

hour's

riers.

worker in the world.

practices. They
private cartels
ernmental

Tfiey

are

convinced that

are

cartels

worse.

| convinced| that

attempting

However, you must realize
we are faced
with the fact
that other nations maintain
tariff
i
that

bad and govare

leadership

•.

against

and

some

the

freedom

consumer

itiom

irore

things

ever-more

varied

choose

plentiful and

supply of the good
at
progressively

life

iJwer prices.
Trade functions in
this way when there is fair
play
and freedom from control. It
can¬
not continue to
bring more
within the
when; it

things

means

of more

cartelized.

listic

people

Monopo¬

practices always strangle
bhsiness and short-fation the con¬
suming
public.
Labor
unions
should be the last ones to
support
cartels.
The very fact that
cartels
limit production means
crease cost.
a

consumer

they in¬
The laboring man as
gets

less

for

wages;

his

therefore, he automatically
lowers his standard of living.

controls,
quotas, import barriers, etc.
Of
.

course, I recognize that there is a
great deal of theoretical merit to

the

principle of free trade.

aware

I also
that it may not be
pos¬
in practice to eliminate
all

sible

tariffs

within

now can

For

any

future which

be foreseen.

this

reason, American in¬
dustry recommends that the over¬
all national
policy of our govern¬
ment be one which will
gradually
reduce
protective
tariff
duties

wherever possible with net
nomic benefit instead of net
nomic harm.
In

eco¬
eco¬

America, the free enterprise

system has provided the largest
market in the world.
All nations
are anxious to sell
in this market
and

of the world's

There is

one

to do its best, and insures for

ness

77%

one

barriers

' them high ones, too.
Furthermore,
Of
the
most
important reasons you must keep in mind
that for
i iv the high standard of
living our more than a century our
economy
country produces is the legal re¬ has
developed under a system of
st taint which we place on
monop- tariffs.
It also must be
realized
frles and cartels.
that tariff rates
may not be as
Competition stimulates all busi¬ important as exchange

;

inrf„«trv

American Manufacturers'

Pe$tablishmpnta fnS® piayVn

usu¬

fists; been, flourishing in Europe evading an all-important issue
sihce the war.
However, it is I omitted discussing tariffs.

prlYj
anci .developed this virile and dynamic economy for the past 150

effort,

the part that world trade plays in
the
nance

and impediments to

industries

w..w

un¬

economy.

industry.
;

the

°d^S'c TaT^ostered
enterprise nas lostered

flow, there must be

can

1,..

Before

manipulations, and all

There

___

I have
European

tity but also the quality produc-

lasting, it must earn a
profit
for both
participants.

higher price to the

beyond mere economic
the countries involved.

Those who advocate cartels
must realize that this is
merely a

world.

J^on record of American industry.
1S an, avy?rf°n ?e '?•

constructive

and

production

bilateral
trade
agreements.
Bilateralism reduces
total foreign trade, and it is often
based on pressures that extend far

com¬

several

w *
_

fi™

trade

the

countries recently and every where
people applaud not only the quan-

They
vitally interested in promot¬

artificial

petitive private enterprise is the

•-

•

amazed

country must eventually be
by
traffic
into
a
country.
2. If

effectively

Equality of opportunity;
Equality under law;

pro¬

been to produce more for less,
America's war production rec-

industry holds that
"that competition is the life of
competition and free, private enally associated with bilateralism.
tfrade.
Competition assures the
terprise is the only known ecoA country that
?
depends heavily
consuming public low prices. Carnomic philosophy that makes this
on
tels assure high prices.
foreign trade—both export and
No group
prosperity possible. An economic
til men ever sat around a table import—for her economic welfare
philosophy that has produced the
cannot
.afford

already

an improvement in the
standard of living only if the cost
of this production is progressively
reduced.
Our goal has always

means

tain

hope for

any restrictive barriers.

and

principle

goods

A standard of living depends on
individual productivity.
We can

goods between two persons or two
countries is on a friendly and
ing multilateral trade and putting profitable basis, there is no incentiveor desire to change, that
an end to bilateral
agreements in¬
volving quotas, other forms of basis. The prosperity of the world
depends on not only the volume of
quantity
controls,
foreign
ex¬
change restrictions,
allocations,

es¬

Cartelization is the antithesis of
the free enterprise system, which
•

countries

the

advantage.
World trade
vitally affects the living standards
of all countries which take part in
it.
However, it can only raise the
standard of living if the following
are consistently recognized:

would.

lieve that goods should flow free¬
ly between countries unhampered

are based on weak¬
strength—a weakness

fear

between

best-known

duced.

and

mutual

automatic

American manufacturers are in
favor of multilateralism.
They be¬

defense mechan¬

goods

divide

motivated by a chance of a fair
——1—years.
and profitable exchange.

are

services

be¬

the manufacturer.

tablished"
Cartels

the

market

cost

employment,

seek to promote volagreements with other

abrogation of those already

pose
remains
the
simply to exchange

This pursame.
It
is

business,

nations to prevent the formation
or
operation of international
cartels
and
should
seek
the

trade.

balanced

consumer,
which
results
smaller^ volume of

and

,,;/,untary

free

average

and

opposed to

should

of world

pose

private enterprise system was the

Our goal is to produce more goods
for all the people rather than to

human

the

that the United States

| Government

considerably, but it has
underlying pur-

picture

submarginal producers. This raises

Govern¬

the cartel system. We therefore
propose

World

second

enough to protect inefficient and

majority of

are

which
a

the

not changed the

They substituted monopoly prices
for competitive prices.
They fix
these
monopoly
prices
high

squarely
against cartels of every descrip¬
tion, both private and govern¬
or mental."
r
ment and the great

end

War has changed the world trade

uneconomic

are

that

action

The

the free

of that section was that

bring about world prosperity and
employment, to secure and main¬
world
peace,
and assure
thereby a higher standard of liv¬
ing for all peoples.
It was urged
America's
is
its that governments, adhere to the
production
wealth.
Production is the best principles of free, private enter¬
road to a high living standard,
prise, which are:

be broken down.

commodity

they restrict output far be¬

yond

stands

its business

The efficient prosper.

agreements

like to

Manufacturers

industry keen and' progres¬

Intergovernmental

costs

but

„

turers

these positions.
The National
sociation
of
Manufacturers

costs

enterprise has actually produced
more world prosperity than any
subterfuges. Nor do we want any other known economic philosophy,
goods sold in the United States These are not promises, these are
which have been produced by lit- performances.
We, in America,
eral starvation wages.
That is are proud of our histpry that the
not the way our economy was luxuries of one decade become the
built up, but it is the way it can necessities of the next,

agree¬
essence

the
fundamental basis of the free pri¬
vate enterprise system, the
su¬
premacy of the consumer.
The
consumers,
by their buying or

other impediments to a free, pri¬
vate economy, which
to talk about today.

commodity

embrace

true

adulterated by subsidies or other

Worldwide Economic Freedom
on

reflect

.Thursday, December 5, 1946, '

United

facturers, under the guidance of

automobile registered

nations have

—

International-Business Conference, to—i-

auto-

one

This conference was held at Rye,
N. Y., in November 1944. At this

mobile for each 32 persons.
We
have
many
times more
radios, telephones, washing machines, vacuum cleaners, electric
ranges and other conveniences per
capita than any other country.

which

they

live.

This

reoresented

L. Roose

Alex.

Saikin,

and C. E.

Schroerier

B"fTfh ConferPncet Yas tP

h •
bring together representatives of

business

than 20

billion, dol-

addition, they

persons

40,000,000

organizations

own more

billion dollars of farm

70,000,000
ance;

hold

msur-

persons

have

all

over
.

Presideni

its

Truman Nov.

thl imbere ^ere

pre-

Paf6<l t0 h01^

abl^ ior any business ;which may
board
\
the present price

government bonds.
^ reabze these statements

Americans° have

reputl-

control law remains on the books."

£B*u2c,n*. th'^White House

Press Secretary, Charles G. Ross

said, according to Associated Press

■

problems which affect the business interests of those countries

Washington advices of-that date.
B

and to help

estabUsh

better ba-

TO.(KKW)00 own sis for world relations and world

know

properly come before the

I? ?

worth

ten

V;rfnniiv

The purpose of this Internation- J- = ?

oZ°lL than t4'0i0'.000 fa?«ers
and operate their own farms
in

nrjprc

DeGorter, A. J. Leenaards, Jules

is a

own

than

Fmilo

Bernheim, Charles Fonck, Jacques
» Rene Fribourg Daniel

40 billion dollars.

lars;

J0L

complete approval o£

endmg price and W3ge contro1*
^ostaWy represented by Emile the price Decontrol Board adablv

most

third of the total number of families. These homes are worth oyer

signifyi

conference, Belgian industry was

More than 14 000,000 families in
the United States own the homes
in

$5,150,000,000.

International

Committee

its

States^fhe^four other most Economic Relations, initiated the Decontrol Board to

prosperous

American manufacturers are tion
for
American industry is
immodesty. However,
unalter-1
ably opposed to intergovernmen- anxious that they do—not, howwy are only
ever, at fictitious prices which cjo offered as
proof that free, private

the National Association of Manu- the Navy from $5,800,000,000 to

We produce
automobiles,

Free Enterprise Essentials

...

^ t
^ 40 ^ and 44!at board
^™
advise members of the
cordingly.

acMr. Truman's decon-

trol order removed all wage con-

One of the —*
sections of this con- trols and all price ceilings except
— —
_

ference dealt consensus of opinion'rice. on rents/sugar, syrup and
with "private enter- those
prise." The
.

■ ■
.

JS/olume

164 ^MBef--,|544

(THE COMMERCIAL1 & FINANCIAL

CHRONICLE
peaceful economy. While the pots-

been placed with Great Britain.
An

import-export

cupation

March,

agreement

between the American-British

oc¬

and

Switzerland,
its kind, has just been

zones

the first of

Control

This category in¬
only arms and am¬
but also seagoing ves¬

not

munition,
and

ported

aircraft

from

which

every

the

amount of several million

countries

im¬

Germany

concluded, while trade with other
is

still

tied

by compli¬
cated barter agreements.
The

determined

policy of our
diplomatic and military authori¬
ties to get German economy again
into second gear is fully backed
and promoted by U. S. business
and

financial circles.

"There

goods
that

such

the

shortage

American

market

what

Germany would pro¬
would
be
welcome,"
Mr.
Haggot Beckhardt, economist for
vide

the Chase National Bank of New

York, declared recently after he
returned from a trip to Europe.
His statement was backed up by
Mr.,
Randolph
Burgess,
Vice-

1946.

cludes

sels

Commission

year;

dollars

and in addition,

manufacturers

varian

and

imports from Germany in
semi-peaceful years be¬
longed to what is definitely con¬
sidered
as
"peaceful industrial
production" by Allied agreements;
the resumption and expansion of
these "light exports" is encour¬
our

the

sumer

goods which had

all

North

Ba^-

of which

de¬

the

American

Military

Gov¬

ernment has concluded barter ar¬

providedthat

controlled," the State Department
subsequently interpreted this ob¬
jective as a "drastic reduction" of
these industries. At least .33% of
our prewar purchases from Ger¬
many came from these industries
of the "critical'* category;

the

National

groups.

The present evaluation of

Bavarian china.

fifths

the

At present, four-

Bavarian

porcelain
industry is working on American
Military Government orders, a
high percentage of their output
being destined for export.

con¬

A survey

their products are likely to sat¬
isfy urgent needs in this country.

the U. S. dollar abroad puts the
American importer in

The value of American imports
jewelry, precious stones and

Germany's export goods easily

salable

the U. S. home market.

What Can the U. S. Buy From
Germany Now?

Undoubtedly, the

man

prewar

struc¬

Germany
will
be
thoroughly
changed; and their volume will
have to be cut sharply for many
years to come. There are several
factors which curtail and change
the

composition of our possible
imports from Germany severely.
First,
the
Potsdam
agreement
either prohibited or restricted the

substantial

same

reason,

quantities

Czechoslovakia

before

from

the

exports to this country will

war,

will probably be imported soon
again in American retail from
Germany instead. The skilled
outlets—toys, the main production flower-makers of the
Sudeten dis¬
centers of which are situated in
trict—almost all being of German
the North Bavarian, Americanorigin — were also driven from
occupied zone.
Nuremberg, cen¬ their native
country, and are tak¬
ter of this industry, has already
ing up their handicrafts in Ger¬
been visited by American buyers,
has

first order of

been

Christmas

many.

carloads

agajn,

The

has

zone

long

time ago and is going full blast
for delivery of the Russian mar¬

ket;
U.

aril ;the

well

more SO since the
as other countries

Who are potential customers and
suppliers of tbis country are:
in need of these products.
While the United States is own¬

ing and" deyelppipg ^ very; small
fraction of the world's

serves—hardly

potash re¬
than 2%-r-r

tMs

Germany
United

country, imports "from
handled through the

are

Commercial

States

Cor¬

poration, a subsidiary of the Re~»
construction Finance Corporation;
which

has

been

named

the

that receives, and disposes
of, shipments from Germany. In
Germany itself, the import*ex~
port section of American Milk*
,tary; Government has to- plan and
organize the foreign trade in its
zqnet wbich, - since it * has been
united
economically with the;
British zone of occupation, takes
the shape of a major businesscpa-r;
cerri>\thhthat role, it also con*
tributes indirectly to American
business interests since most
agency

report
that

ip .1945~r~"it. is
imports

potash

after the

serving

war

desirable

resumed
of

means

controlled

the

•

potash

world

nitrogen supplies are apt to

retard
food

relief

shortages,

economic
^

This

from

and

recoyery

the* existing

slow

"critical"

sential

products;

they

international

most

are

set up by

the U. S. CommercialCorporation to advance German
purchases of raw materials and
iprhne the pump of German ex*v
ports.
Since October, progress
has been-made in organizing ad¬
of

vances

raw

|b Ger~

materials

manufacturers who re-export

man

them

products
the

was

the'

successful

of dinlshftd

operation in this

shipment
for

cotton

raw

form

this country*,. First,
line

pf American

processing

into"

printe&textites byGeimanpiaivtiv
and the re*shipment of a percent*

Uge of the finished products to5
textile-needy America,'
,

'The

following ta$e

spine of our more
war

; compare#

important

ppe~

sports from Germany-with

thp*,possibilities

es¬

peace-

Under the leadership, of. George
Allen, a $9,000,000 fund, has been
-

general.

reasoning, applies

pwi».

ppris Irorii Germany.

cartel

market,

suppliers pf this

eobn&riy is strengthened by h»-

con¬

limited potash re¬
"While before the war the

German-dominated

and

country's.' industry after their

our

serves."

man

customers

in the near fu-

ture;
1937 in

1937, in million

1,000 tpns

reichsmar^s

368

Imported goods—

22.3

Substantial

29.1

Rfstr^tid

1947 and later

Chemicals of potash and

dollars

Chemicals of dyestuffs

category.-

item.
Now, the im¬
ports of most of these goods can
be resumed again soon.
Among

marks amounts to less

172

1.'

Restricted

per

the war, paying yearly from half
a
million dollars to two million

Secretary of Commerce from Oct.
18, toys worth 1,000,000 marks are
available for export this year; the
fjrst American
order amounting
to 370.000

since their

more: sp

production in the Soviet
been resumed already

a large variety of other
goods which this coun¬
try bought from Germany before

consumer

Bavarian

the

desper¬

needed

There is

placed for the coming
season.
According to a

communication

foodstuffs

American

ately

reported, Stated, the fqis^ng Ger¬

jewelry.

artificial
flowers which America bought in
the

appear

and

ture of American purchases from

For

One of the oldest items of Ger¬

ing position which is far superior
to that of any foreign competitor.
And the present high level of
American prices makes the bulk

dred costume

The Revival of Toy Exports

bargain¬

7.9

Restricted

Substantial

Machines for leather, textile, print'
'

30
6.9
Substantial
ing- & paper working industries
V
high-quality products of
than 4% of the value of our yearly
29
m
Restricted
the
leather
working
industry,
prewar purchases of.German toys.
: ;
' 3.
'*4.8
Substantial
especially ladies' handbags from
American
dealers
express
the Offenbach; special products of
<2.8
production of many German goods
5.1
Substantial
"Which were not considered neces¬ opinion
that.. U. S. consumers the woodworking industry; musi¬
?
2.3
4-7 .
sary for peaceful economy; it so would easily buy at least the pre¬ cal notes, books and art prints;
4.3:
Musical instruments
Substantial
: 2."%'
other paper goods.
happened that some of them were war
quantities again
especially
11.
,v$" 2.£tm Substential
continuous items on the German
While the large-scale produc¬
-1 \
\
dolls, Christmas tree decorations,
export agenda to this country.
tion of beer hps not been resumed
?
artistic toys—as soon as they will
yet, some quantities of hops, and
Substantial
14,2
w
Second,- the Soviet occupation
of Eastern Germany, and the loss be available, which may be dur¬ approximately ? 100,909^
14
"
of
: °-*7
of German areas to Soviet satel¬ ing the next year.
^r^irown;;^Rhihe-.:
lites excluded these parts - eco¬
Allied Military Government sources expect that th$ total Vglw&
More important in dollar terms
ready beep sold to U. S. buyers,
pf flerriian expprts duririg the fiscal ypar ^diAS h6^
?Q w'W
nomically from the world market. are the German optical goods,
them are

——

•

The production of these areas was
and

is either

shipped

to the So¬

viet Union and its satellites under

alleged

reparation titles;

factories

themselves

were,

still

dismantled

and

are,

radio cabinets and kindred items
of

high

value.

.mechanical

It is rumored

the ami

and order•: of. 50,000

trans¬

;

that RCA

negotiating
radio

comb
tb the target goal of $25,090,000. - This compares with
bppprt German^exports to this country alone amounting to $92^00,000 in

Critical* Peacetime Products?
The bulk pf our prewar

interests in German imports, haw*
ever,

was

concentrated

those

are considered
$86,- "critical" by the Pqfsdaih agree*

cameras were
a

cabinets industries which-

with German manufacturers.

planted by lock, stock and .barrel ,7(K) : worth of Leica
behind the Iron Curtain.
sold in October to

precision

•

,•

this

country
paid for mainly by deliveries

are

sales

-■

•

for American industrial and trade

German

Set-Up

Germany is Still holding the
largest
in its soil. The
Awierican industry is interested
worth of raw materials which are
in
purchases quantities from
necessary for the production of
Germany since—as the National
approximately $8,000,000 worth of planning
Association stated in a ropean countries whl be better,

large
a share in swelling the U. S. im¬
ports of this year to record-size
level, they fit well into our pres¬
ent import trends.

City

The Organizational.

new form of international cpmshows that fully satis¬ imitations increased five times in
Bank of New York: "What now is
mhdhy. agreement will have to
factory substitutes for these Ger¬ the last decade. Although the im¬
needed is positive action to get
be developed.
i<}:.
^
man goods have hardly been de¬
ports of such goods from Germany
things going with trade, to get veloped on the U. S. market or in
As an
"effective way of in¬
were insignificant before the war,
exports to pay for Germany's food foreign countries
during the past it may be assumed that they will
creasing Iwprid, food fprpduction,"
and
other
necessary
imports." years while we were unable to
grow
now;
for the old, highly the immediate return of all nitro¬
And Mr. Philip Reed, Chairman
buy them from Germany.
Their skilled native German industry of
of
General
Electric
Company, value is mainly determined by non-precious jewelry in the idar, gen. plants in Germany to maxi¬
added: "If we could get the Amer¬
highly
skilled
and
tradition- Lahe and Oberstein districts has mum production was urged by the
ican importer and German ex¬ trained labor on
relatively low been strengthened by a sizable in¬ Gnited Nations Food and
Agricul¬
porter where they could meet, we wage
levels.
This
specialized flux of refugees from the Sudeten ture Organization in
September,
could do business."
German labor reservoir with its in Czechoslovakia.
They had for¬
1048.^Fdr 3$ longW&fhe world
To do business with Germany know-how and experience is still merly built up the Czech produc¬
again opens valuable prospects available, and a wide variety of tion and export of glass and kin¬ shortage :|p nitrogen exerts," the

Chairman

wartime economy. :

in Germany.
Be¬
tween
August, 1945 and June,
Our three top-ranking import 1946, the U. S. Military -Govern¬
delivered
approximately
items 'from Germany before the ment
war originated from this group. 72-3,090 tons of American wheat,
Ih tha order of their import value* flour, cereals and crackers to the
German civilian population. Since
chemicals,
such
as
"dyestuffs,
ranked first; half-finished chem¬ there :is more than .$10^00.0,000
ical products, especially, potassium worth of surplus American equip¬
chloride, ;; potash and -nitrogen, ment f available in Germany—»
came next;
they were followed by mainly road-building machinery,
and communication
machinery.
Since ' the Stuttgart vehicles
speech of Foreign Secretary stocks, all of these articles.with¬
Byrnes has buried the plans, of out potential war usage—which
Mr.
RenryjVIorgenthau ^r. and his deteriorate unless they are used,,
the army recommended selling
advisers' to
"pastoralize*? • 4 Gar*
many, ;|t can be expected that at parts of them to Germany on a.
least parts of these prewar indus¬ reiphsmark basis which woukt
tries Will be permitted to work hater be converted into ,dollars, *

rangements with Czechoslovakia
for the importation of $1,000,000

aged
by
Military Government.
Since most of these products are

high-priced

district,

export,

last

high-quality,

turn¬

livered substantial quantities to
this country before the war, will
soon be able to produce again for

On the other hand, at least 12%
of

now

ing put table sets decorated with
Marshal Stalin's portraits, Oh the
other hand, the Rosenthal porce¬
lain working plant, the Nymphenburg factory and the many small

ball

bearings,
heavy
machines
specific chemicals.

the famous Mejssen and Dres¬

den factories which are

Nazis used them for their national

Declaration

these industries should be "rigidly

(Continued from first page)
Furthermore, wartime destruc¬ company.
Though the biggest
port exhibitions -— slightly remi- tions and dislocations had a very plant of Germany's, optical indus¬
niscent of the Leipzig Fair — to
try, the Zeiss Company at Jena,
damaging effect on several indus^
show products which are actually tries.*
Khite 9Q% , pf /the railroad is situated in the Soviet .occupa¬
available for export now, as well transportation
system- in the tion- zone, -and its fuij^Mddqctioh
as those which shall be when raw American zone has
already been claimed and taken by Russian au¬
materials are obtained.
reconstructed,
the
severe
coal thorities, there are several me-r
To a very slight degree, exports shortage and the serious food de¬ dium and smaller plants in the
have already begun to trickle out ficiency are most critically ham¬ American-British zone which can
of Western and Southern Ger¬ pering the reconstruction of most supply badly needed items to our
»'■
market whjch-^before fhe wafe
many.
While still being insig- industries. >
nificent, they have shown a ten-^
Finally, the division of Ger¬ absorbed over $5,000,000 worth of
ctency to increase during the last many's economic unity into four optical and precision mechanical
German goods per year.
months..
In the U. S.-occupied zones with different
governments,
zone, 3,000 tons of bauxite were plans,
rules and an over-abun¬
Old Handicrafts and New
recently sold to Sweden ahd-Nor* dance of red tape supplies con¬
Industries
way, $5:0,000 worth pf electrical tinuous curbs and restraints to the
The situation is similar in the
goods were exported to Austria endeavor for economic recovery.
c h i n a w a r e,
earthenware and
#nd Yugoslavia, $.110,600 worth of
At least 10% of Germany's pre¬
railroad
switches
to
Norway, war exports to this country be¬ porcelain industry which before
the war supplied over 200,000 tons
$450,000 worth of shuttle eyes and
longed to that group of "specific
a
year to this country.
Some
$1,400 worth of chemicals to Brit¬ war industries" the
production of
major plants are in the Russian-:
ain, $1,080,000 of Diesel motors to which has been
strictly prohibited
France and $11,000 of dyestuffs to
occupied zone and heavily pro¬
by the Potsdam agreements and
the
Netherlands;
a
substantial the subsequent resolution of the ducing for the Soviet market, such
Allied

time economies now, although the

dam

German-American Trade Getting Under Way

order for construction timber has

2905

ments,

New York I for

supposed^- ^eing useful
potential as well as for

a war

j80,pQO?000;ih 1936. If the present trend shaped by egp-'
rather thanJemption^ jfycrige/wiU be^

1937/

po^c^easpn

Mr. Byrnes' Stuttgart speech rather than Messrs. Molotoy's and
Mdigenthau's^^^ plans ^Ul>: guMe our econo
policies toward Ger¬

many,

it can be assumed that pur foreign

recover

within 3 to 4 years.

trade,with Germ
~

•

THE COMMERCIAL &

2906

the
seller knows within close limits
what he will receive for his stock,

Under

such

circumstances

of selecting competent
agents, in precisely

reliable

and
the

same

fashion

is necessary

of business
transaction. Fraud is a punishable
and the purchaser knows within
offense.
Bad judgment could not
similar limits what he will have
be made a punishable offense, as
to pay.
Hence liquidity, activity
then the entire population would
and close quotations between bid
be jail inmates, with no jailers
and asked prices should be proand no public at large.
•;K vided by the New York Stock ExQuite understandably, Congress
change if it is properly fulfilling
responded
to
the
smarts
and
iits function,
bruises resulting from the 1929
JgpjToo much emphasis can not be collapse and the ensuing depres¬
placed on the fact that the Ex¬ sion. Organized stock exchanges
change does not buy and sell se¬ were brought under full govern¬
curities.
It merely furnishes a mental control. Hence it is desir¬
other

any

type

this reason many

For

decreases.

medium.
Yet the Ex¬ able to review and appraise the
is
blamed for erratic results of such control and then
movements in stocks and for wide to discuss
briefly a few major
spreads between bid and asked problems which now concern the
prices.
Hence the organization New York Stock Exchange.
has appointed specialists in all
Basic to the new system of con¬
listed stocks, part of whose func- trol is the
registration of listed
5 tion v. is • to
create
an
orderly corporate securities with a
gov¬
market for the advantage of non- ernment
agency. This immediately
member investors. Since the spe¬ raises the
question as to whether
cialist has more intimate knowl- such
agency should be merely a
edge of going prices than an out¬ repository
of
information
or
sider could possible have, it has should attempt to determine the
been wisely provided that the spe¬ terms
and
conditions on which
cialist can only buy stock for his new securities should be offered
own account after others wishing
to the investing public. There is
to do business have been satisfied no serious
disagreement in
trading
change

the

same

would have been inconvenient for

short-term loans from
they resort to private the British treasury and the Bank
of England.
As so often occurs
in order to obtain new
under
"planning,"
the
results
a result, social loss oc¬
Desirable new issues are of¬ were entirely different from those

they make
banks, or
placement
capital. As
curs.

fered to institutional investors

to individuals of large wealth in¬

stead

general public;
lose the advantage

ffl sales.
III Enough

market

;
,

,
.

;

and

corporate history
those who are

practices

contemplating the issuance of

se¬

curities which may be offered on
the market. Thus the Securities
and Exchange Commission is jus¬
tified in meticulously examining

in, providing an impartial, con¬
tinuous,
competitive,
well-balaiiced mechanism for buying and registration

statements

for

the

calculated.

been

under discussion a credit

their

for

securities, and

business

rection

activity

and

always
results
in
higher securities prices was not only de¬
prices for new capital; the "small sirable but was actually taking
man" is damaged, whether he be a place.
Hence government, with
small corporation or a modest in¬ the best of intentions, laid the
this

vestor

ing to start

attempt¬ foundation for the

individual

to enlarge a small

mar¬

runaway

1928 and 1929 and for the

kets of

corresponding gains grinding depression which ensued.
In spite of this unhappy experi¬
Present costs and
complexities of registration are ence with government control of
bad. They smack of regulation for credit, Congress specifically dele¬
its own sake, rather than for the gated
to
the Federal Reserve
accomplishment
of
a
desirable Board authority to determine the
amount of credit which,
subse¬
public purpose.
business.
can

cited.

Another "reform"

concerns

pur¬

chase and sale of listed corporate

formation

has been said to indicate that the New York Stock Exchange was acutely aware of its
responsibilities toward the public

had

case

to spree and securities boom was
corporations touched off in the United States
of a liquid at the very time when a mild cor¬

securities by officers and directors
of the corporations in question.
Cases of abuse attended market

the

which
the

of being made available

the

desirability of requiring
corporations to present full in¬

Spring

corporations refuse to undergo
registration and listing expenses.
this was done for the purpose of
Either they refrain from new cap¬
ital investments which are other¬ preventing the flow of gold from
wise
economically justified, or Great Britain, at a time when this

regard

price, with corre¬
sponding rules in connection with

ered its discount rate in the

of 1927, at a time when such rate
should have been raised.
True,

•

;

in fact

instruments of

Functions and
apparent

(Continued from first page)

operations

officers

corporate

quent to 1934, can be employed
for purchasing securities. In mar¬
ket terminolgy, power was trans¬
ferred from banks, the New York
Stock

Exchange

and

whether

and

decide

brokers to
much

how

margin might be ad¬
and directors before 1933.
Rem¬
vanced for the purchase of securi¬
edial action was highly desirable.
But has the medicine contained ties, and this power was assumed
by the Federal Reserve Board.
in
federal
securities
legislation
Gradually, ' margin requirements
been
best
adapted for
accom¬
have been increased until, begin¬
plishing an appropriate purpose?
ning in January,
1946, neither
Publicity for purchases and sales
banks
nor
brokers
can
legally
by officers and directors is desir¬
loan money for the purchase of
able.
Present procedures in this
listed securities, except under spe¬
connection
are
satisfactory.
A
cial
circumstances,
like
those
money

securities at the highest purpose of requiring that all rel¬
possible price for sellers and the evant facts should be stated so
lowest possible price for buyers. that an investor who is willing to
Not only was a true and continu¬ expend the necessary time and
ous
auction
market maintained, energy may have a comprehensive different
conclusion
must
be
which apply to underwriters and
but the Exchange went much far¬ and accurate picture of the cor-1 reached in regard to securities
opSuccessive increases in
ther than corresponding organ¬ porate security whose purchase he erations of officers and directors dealers.
margin requirements and ultimate
izations in other countries5 in con- is considering.
in securities of their own com¬
prohibition of purchasing securi¬
But who is to decide what cor¬ panies. In the first place,
cerning itself about the type of
corpo¬
selling

merchandise

which

offered

was

through its machinery to the pub¬
lic. Great progress had been made
during the twenties in corporate
accounting and reporting and also

porate facts
ual

relevant?

are

practice

In act¬

registration
prospectuses

state¬

rations

have

lost

the

services

hundreds of competent

men

ties

with

borrowed

rationalized

who

were

money

part of the fight

by the stock market crash of 1929
and the ensuing depression. * Only
modest 'sums were lost by the
public
through
insolvency,
or
fraud on the part of members of
the New York Stock Exchange,

against inflation. With mere men¬
unwilling to become tion of the fact that purchase of
existing legisla¬ securities on
margin is a result
must place in the hands of inves¬ tion.
This is a handicap to our
and symbol of inflation
rather
tors have become almost a joke
economy.
Second, existing regu¬ than its
cause, and that inflation is
and perhaps a boomerang.
For lations operate reasonably well
fear of omitting facts which the while markets are in an advanc¬ impossible so long as governments
do not permit deficits nor expand
Securities and Exchange Commis¬ ing phase, but
they have farmoney supply, it is desirable to
sion or some court by whimsical
reaching adverse effects in periods state the
practical effects of exist¬
decision might regard as perti¬ of extreme market recession.
By
nent, corporations have fallen into and large, officers and directors ing restrictions, or prohibitions,
imposed by the Federal Reserve
the habit of issuing bulky tomes should know
and do know the po¬
Board.
A case can be made that
Which virtually nobody can or sition and
prospects of their own market advances,, such as pre¬
does read. It is not unusual for a
companies more accurately than vailed from the spring of 1942 to
prospectus to contain one hun¬ the general public. In
periods of the
spring of 1946, were more
dred or more large pages of fine demoralized
markets
many
an
orderly in kind and more re¬
print. Since it would take

Whereas

hours

self-imposed
restrictions and high standards of
conduct on the part*of Exchange
in

connection

with

the most con¬

One of

members.

vincing pieces of evidence that
important results at self-policing
had been obtained was provided

banks

were

failing by

thousands, with losses in billions.
This part of the record sets forth
one of the most brilliant jobs in
Stock Exchange
history.
Many
members lost their own fortunes,
.but with few exceptions they met
all of their obligations to their
.

customers.
it

ments

and

underwriters

and

which

distributors

many

perhaps days to become

familiar with all of the informa¬

tion,

common practice of inves¬
tors is to pay virtually no atten¬
tion to registration statements or

prospectuses

pared,

present
succinct

pre¬

whereas a
sum¬
of major features in con¬
with corporate status or
position of new securities

mary

nection

fair

conclude

that

the

prices, would undoubtedly elicit wide in¬
rather than specific wrong-doing terest and close attention.
There
by the Stock Exchange or its is even some suspicion that corpo¬
members, was largely responsible rations which propose to issue se¬
for the government
regulations curities of doubtful investment
Which appeared in the thirties. quality prepare ponderous, prosthe boom and bust in stock

Many persons in this country had,
last money in securities transac¬

cline.

advance

Once

and

should

can

force

ities.

This

the

de¬

sound idea of

tion

for

Stock

way a

with

new

little

customer to buy secur¬
is a voluntary action

prices of securities

neers

can

never

than

has

become

mockery.

statements

are

and

prospec¬

expensive. They require

the services of accountants, engi¬
and

if this

Hence the importance is

unnecessary, but the relative bur¬

broker.

the part of
It

the

his agent,

customer's

money which is involved. He ob¬
tains the profit, if one eventuates.

He must
occurs.

securities

connection

legal counsel.
While
preparation of each
new security for listing under
reg¬
ulations now imposed by the Se¬
curities and Exchange Commis¬
sion varies, a fair guess is that
the average is $25,000.
Not only
is this an appreciable sum, and
not only is most of this expense

formation

the

Needless to say, elaborate regis¬
tration
tuses

anything else than a matter of
judgment, all that the customer
can properly claim is accurate in¬

accept the loss,

under

officer and director would like to

purchase

securities of his own
Not only would such
purchases help absorb stocks and
company.

bonds

offered

for

sale

prices
below long term value, but con¬
fidence of officers and directors in
the

securities of

their

own

com¬

panies would impart similar con¬
fidence to other security holders,
who would then

dump

their

be less likely to

holdings.

This also
relieve
pressure,
to the
benefit of all concerned.
Since,

would

strained

degree

have occurred

strictions.

than

would

without credit re¬

These assumptions can

proved, but they are rea¬
But what of declining

not be

the

cost

that

nine

present it is estimated
million

persons in the
own
directly and
millions own indirect¬
ly the
securities
of
American
corporations.
Expansion of this
number of owners is highly de¬
sirable.
Experience
has
shown
that in particular persons with

United

States

many more

modest

incomes

wealth

who

and

wish

modest

purchase

stocks favor those which

sell¬

are

ing at comparatively low prices,
say $25 or less per share.
Accord¬
ingly, many corporations of the
highest standing have taken ac¬
tion, such as stock splits, which
will

make

their

to the small investor.

available

They right¬

ly believe that it is in the interest
of the country and therefore in
their

own

interest

have

their

shares held by a large

number of
stockholders, rather than merely
by a few. Furthermore, it is dif¬
ficult

for
to

comes

those

funds to make

sufficient

start toward the

accumulation of investment

rities.

the

in¬

small

with

accumulate

same

secu¬

that

manner

automobiles and
other expensive assets can be pur¬
chased
on
the partial
payment
basis, this convenient and perhaps
indispensable facility should be

farms,

homes,

available to those with

small in¬

who wish to purchase sesurities.
Otherwise our premier

comes,

corporate

assets will

concentrated

few.

This is

and better

to be

tend

the

hands

argument for the
abuse of credit,
but the Stock
Exchange is properly concerned
about encouraging persons with
no large means and little financial
experience to become owners of
our corporations, thus assuring a
flow of capital, so as to make
basis

broad

jobs, to obtain a
ownership
of

American

corporations, and plac¬
ing earning assets in the hands
of small investors, so as gradually
to improve the position of such
investors.
At present, however, those re¬
sponsible for securities markets
do not know where funds can be

found for purposes of support in
case of a bad break.
Officers and

of corporations are no
available for the support
which
they formerly
fur¬
nished. Existing stockholders: and
bondholders are prohibited from
using their securities as collateral
for obtaining funds for additional
purchases, even if they believe
that securities are selling at far
directors

longer

reasonable

below

cates

credit

values.

restriction

Advo¬
have

argued that there will be no pressuer to
sell since in the absence
borrowed

for carrying

markets?

Competent market stu¬
dents
have
contemplated
with
real terror what may befall mar¬

securities, no margin calls can be
made. This has proved to be a su¬

sharp or prolonged
downward tendencies replace the

bonds

kets

case

bull

great

market

the

war

years.

common

practice

many

sophisticated investors is to util¬
however, officers and directors as¬
ize their funds fairly fully during
sume tax disadvantages and cer¬
tain legal liabilities for at least periods which seem to involve
normal securities prices, then to
six! months, they ? are
deterred
turn securities into cash or to sell
from giving the leadership which
speculative securities and pur¬
they should provide and which
chase
grade
securities,
higher
they would frequently like to
notably bonds, when markets ap¬
provide.
Publicity in regard to
pear to be advancing into danger¬
market operations by officers and
ously high ground.
In contrast,
directors thus offers ample pro¬
they not only use their liquid
tection to the public, aside from
capital at times of severe market
legal recourse Which is always
recessions and transform invest¬
available in case of fraud and
ment holdings into speculative or
wrong-doing. In the interest of a
semi - speculative
positions, but
stable economy and of investors in
they als6 borrow funds to make
general other disabilities should
additional purchases. As the mar¬
be removed.

tries.

sonable.

his part, for which he must
take
full
responsibility.
Since
on

adequate informa¬

investors

Exchange

mentioned that there is

^member, of

the

simply

directors

t> seek a whipping-boy than to
the

are

tions, much of it previously gained vestors. Furthermore, the pros¬
in like manner, and it was easier; pectus is ordinarily placed in the
hands of the purchaser along with
dmit that "their judgment of the the confirmation ticket of his pur¬
■liharket had been erroneous, both chase. *;Hence
the
inherently
on

-*?fj

if not in law are ally all students are agreed that
government policy sound -public policy should en¬
rather than of industry and com-: courage ownership of family-sized
merce.
To be specific, the Federal farms, of homes for occupancy and
den becomes greater as the face
Reserve Bank of New York low¬ of securities in our basic indus¬
value of the new security issue
which

Stock Exchange

Thursday, December 5, 1946

FINANCIAL CHRONICLE

perficial

money

view.

All

and

stocks

and these
owners are constantly attempting
to evaluate the prospects of com¬
panies in which their savings are
committed. Nothing can be more
unlikely than that persons who
had the intelligence and the en¬
ergy to accumulate capital which
has taken the form of corporate
securities I would «supinely
hold
such securities in the face of high¬
ly

have

owners,

adverse economic
develop¬
They will sell securities
outright about as freely
those owned on margin. There

ments.

owned
as

may

unin¬

also be frightened and

formed selling to the

detriment of

concerned,^Restrictions which
the rn^ket or reduce its
power to defend itself against dis¬
orderly movements are unwise.
all

narrow

Another
suggestion
by
the
"planners" is that credit restric¬
tions should be relaxed in times
of falling, markets. Most students
believe that raising margin re¬
quirements and ultimately plac¬
government.
ing purchasers of securities on .a
One important reason for the cash basis accentuated market ad¬
economic,
political and
moral vances of recent years, since the
strength of the United States is
restrictive Credit policy of the
the
widespread
ownership
of
property in this country.
Virtu¬ Federal Reserve Board was interl"'
■■ *ivv"; "tv■■■"!
j j*

ket advances and becomes more
Credit manipulation is perhaps
orderly these borrowed funds are
the keystone of the "new eco¬
repaid and accounts placed on a
nomics."
Again
acknowledging cash basis.
This occurred with¬
that credit was used in excess for out intervention or direction of

speculative purposes during the
twenties, accuracy also requires,
the
statement
that
speculative
credit excesses resulted directly
from

part

ill-advised

Federal

policies
Reserve

the

banks,

£?|

■

•

preted

meaning that "the gov¬ point out the unfavorable effect
of this regulation on the liquidity

ernment believes that stocks will

rise."

So relaxation

removal of

the

and

market

investors

decades for absorbing mar¬ some of the most astute investors
"During the second world war,
ket 'shocks; ' ' particularly oh-* * the mot only welcome "purchases 'by the New York Stock Exchange de¬
down side, have largely been re¬ brokers for their own account in parted from character in one re¬

oyer:

outside of metropolitan New York.
Since
listed
securities
are
no

moved.

longer of value as collateral with

the Stock Exchange to the Amer¬

or
Instead of merely main¬
paralyzed.
Liquidity* securities which are recommended spect.
which Is the principal service of but at times even insist upon such taining ;= trading facilities,. it un¬
dertook to give advice in regard
ernment believes the market will
purchases. It all adds up to the
Without question
go much lower." Since the "gov¬ brokers, there has been a strong ican economy, has been seriously fact that an investor is unbeliev¬ to investments.
ernment" knows less than pro¬ tendency to shift the former prac¬ impaired. It now remains to be ably foolish if he does business the New York Stock Exchange
whether
fessional market students
who tice of carrying stocks in the name seen
inability of
the with a broker whose integrity he should have made its machinery
do not pretend to "know"—about of a broker, or in "Street name" Stock
Exchange to perform its does not trust and with an or¬ fully available for the purchase
whether the market is high or as it is called, and to issue such function of liquidity, because of ganization, such as the New York and sale of government bonds!
securities in the names of the government
restrictions, in the Stock ^Exchange, which has gone But it went further and recom^
low, interference from that quar¬
actual owners.
Thereupon it is fall of 1946 will start a business to great lengths to devise rules of mended the purchase of govern*ter
in
trying to effect market
or
This
depression in the fair dealing for transactions which ment bonds to the public.
movements or
even
to prevent becoming more prevalent for such recession
owners to
take physical posses¬ United
States.
For
losses
have it handles, along with severe pun¬ was a mistake. For the Stock Ex¬
market movements can only be
sion of their securities, in order to been
grievous and will profoundly ishment for infractions of such change as an institution has no
pernicious.
avoid
service
charges and for affect business perspective. If de¬ rules.
special competence ; in investment
Short selling and the operations
other reasons.
One major result
For many months the Securities matters.
There were compelling
pression comes because of gov¬
of specialists are probably the two
is
that the floating supply
of ernment tinkering with the cap¬ and Exchange Commission has been reasons why citizens of the United
most misunderstood activities in
stocks has been sharply dimin¬ ital
considering the promulgation of States should purchase war bonds,
markets, it will be a high price
connection with trading in secur¬
ished, and this has proportionate¬ for the country to pay for a prac¬ rules under which free credit but the record shows that for four
ities.
Each is admirably adapted
ly increased the difficulty and tical lesson to the "planners."
balances, in the hands of member years, or from May, 1942, until
to the purposes of demagogues,
danger of short selling.
In turn,
As to the regulation of special¬ firms, would have to be segre¬ May, 1946, these bonds - were not,
and they have not missed their
the diminution of
short selling
Theoretically, the correct goo d
ists, certain improvements were gated.
investments,
relatively

credit restrictions would be inter¬

preted

meaning that "the gov¬

—

opportunities.

All

vestors welcome

seasoned

in¬

narrows

and weakens the market

and has

short

entire system for raising,
and
exchanging
those

large short in¬
terest in the market, since the ex¬
istence
of

such

the

best

interest

guarantees of an
orderly market, particularly
in
ease of weakness.
By definition,
one

funds

adverse effect on our

which

are

the

applying
capital

lifeblood

American industry. Second, addi¬
tional delay, inconvenience and

overdue.

By reason of his knowl¬
edge of the "book," or the orders
to buy and sell the stock in which
he

acted

often in

specialist,

was

position to take advan¬
tage of bona fide investors. Hence
a

decision

turns.

whether

speaking.'

broker

Fronri' the! strictly 'fi¬

occupies the relationship nancial point of view an investor
creditor, or that of could hardly have done worse
trustee
vis-a-vis
his
customer. than
buy or hold war bonds dur¬
Practically, the decision should ing that period. In any case; the

of debtor and

rest on whether customers would New York Stock
Exchange as an
be more fully protected than at institution has no valid
opinion to
appropriate to provide that
expense are involved by having
other orders to buy and sell take present and whether the incon¬ express in
regard to securities
securities physically distant from
venience and cost of such dubious
and should express no opinion,}
precedence
over
the specialist's
sales, since stocks sold short must New York, where the transfer of¬
additional protection
would be
purchases and sales for his own
In
accurately appraising the
eventually be covered.
fices for securities listed on the
There is little more
account at a given price. Never¬ worth while.
New York Stock Exchange and
New York Stock Exchange have
reason for compelling brokers to
Although there is a moderate
theless,
specialists
are
now
the manner in. which it performs
Not only are ex¬
short interest in the market, even to be located.
hedged in by so many restrictions place free credit balances of cus¬ its functions, there is, too much
tinder existing restrictions, much penses for insured and registered
that the public undoubtedly loses tomers in special individual ac¬
tendency to search for specific
of this short interest is merely mail substantially increased with¬
counts than in requiring the same
more
by the fact that these ex¬
things, which the Exchange should
represented by arbitrage transac¬ out any countervailing advantage, perts can no longer make a good action by banks for each deposi¬
•or should not do and too little ten¬
tor.
tions against other securities held but there has also been great ex¬ market than it
Moreover, there has only
gains by obtaining
dency tq inquire as to whether an
on long account.
Thus these short pansion in "fail to receive" and preference over their operations. been one failure of a stock ex¬
;investor who wishes- to. put his
sales did not express a judgment "fail to deliver" securities, with
In former years specialists with change house since 1934 with loss
attendant costs, inconven¬
to the public, and this was a case jsavihgs to work' can obtain intelli-;
that the market was in danger of their
large means and wide knowledge
in which fraud was involved. Ob¬ igent advice; honorable treatmenta decline
but merely constituted iences and dangers.
of the companies in whose stocks
and satisfactory results- in 'plac^
A
comical outgrowth of this
One side of a transaction which
they specialized were willing to viously, fraud- would have been ing his funds. Im like manner, it
Was initiated for the purpose of government regulation is the re¬
accumulate
m&ny thousands of equally possible if segregation of should ^ascertained whether the
obtaining the spread between the ported development of the prac¬ shares when for any reason buy¬ free credit balances had been
■Short and the long position. Ob¬ tice of pledging listed securities
mandatory.'
In
addition,- ; there executor, -the" trusted or any- one
ing orders were not in harmony
as collateral with pawnbrokers for
are
numerous
technical reasons else who wishes to place his cap*,
viously, short sales of this char¬
with selling orders. This frequent¬
ital in liquid form for reasons that
acter have little or no effect in the purpose of raising loans. Since
why such a rule would create ex¬
ly happens, because of estate sell¬
member firms of the New York
tra
inconvenience and expense, are only of concern to him can
cushioning a declining market.
ing and at times of market breaks,
do so at the best possible price and
Stock Exchange, with an enviable
without any corresponding advan¬
when
the
In recent
public acts on fear
with the least inconvenience, and
years the Securities record of integrity and solvency,
tage.
Thus the proposal appears
rather
than
facts or
and
judgment.
Exchange Commission has are
to be regulation for the sake of expense. Instead of a pretentious
apparently not trusted by govr
Then the specialist prevented dis¬
made short sales increasingly dif¬
program of regulation for the New
ernmental .regulators, their funcr
order or mitigated it and amply regulation ahd; at a cosl which the
ficult and unattractive. The folly
tions are in part being taken over
publicWduld Inevitably have to York;. S.tock Exchange; more mod¬
justified his reason for existence.
Of this policy has become fully ap¬
examination
bear for a service which it does est /. but. productive
by those whose symbol is three
Now he is "investigated" by gov¬
should be made as to whether the
parent at the time of the market balls.
not want and does not need.
ernment officials in season and
crash in September, 1946. Invest¬
Stock Exchange; and: its member
Another
result
of
restricting
A question which vitally con¬
out of season until the important
ment accounts were more solidly
'firms are attempting to :avoid in-*
the breadth and liquidity of the
function served by the specialist, cerns the New York Stock Ex¬
frozen than at any previous time.
jury to' the investing public, are
market is that the typical mem¬
and
its members, but
Hence there was no resilience in ber firm has become more an until this basic safeguard for li¬ change
alert in searching; for arid adopt¬
which has little to do with public
the market.
Short selling was too investment
quidity and orderly markets, has
ing improved procedures and bet¬
advisor
and less a
been
seriously impaired.
There policy or public regulation, is that ter protection for the benefit of
inconvenient
and
complicated broker.
When margin trading is
of
permissive incorporation; of
are few corresponding advantages
while the market was experienc¬
all
investors,
whether -existing
forbidden, when short selling is
member firms.
At present only
ing its four-year advance from made difficult, when the opera¬ except the increase of "regula¬
machinery affords a free field and
partnerships,' with unlimited per-j
May, 1942, until May, 1946. There¬ tions of a floor trade are impeded, tors"!
no;special favors, and whether vi¬
sonal responsibility
are eligible j
after, during the relatively go6d when specialists are so circum¬
Rules of fair practice are diffi¬
olators of the rules of fair trading
for
membership.;[-Advocates oF
market of the summer of 1946, scribed that
are constantly sought and; appro*
they are unwilling to cult to formulate and difficult to
permissive incorporation draw at¬
the requirement of the Federal take the risk of making a good enforce. Stock Exchange officials
On this basis
tention to tax laws which make priately punished.
Reserve
Board that
short sales
market, and when
short term learned this by long and at times it difficult for young men to make the New York Stock Exchange af¬
had to be effected on the equiva¬
fords a favorable record during
Officials of financial
capital gains are assimilated to painful experience.
progress and thus be in
lent of a cash basis further con¬
ordinary income and long term the Securities Exchange Commis¬ position to accumulate capital and the last quarter century, a desire
tributed to the panic in Septem¬
capital gains are taxed 25%, then sion are now receiving their edu¬ become partners of existing or to make progress, and actual ap-*
ber.
One of the innovations im¬ the decision to purchase or sell cation. Thus far they have been
new firms.
It is contended that complishment in performing its
posed by the Securities and Ex¬ securities
acquires
a
different unable to draft workable rules in income of member firms, being services with greater efficiency
change Commission is that a short aspect than was formerly the case. regard to the amount of stock
fully taxable as personal income, and fewer abuses. Like all other
sale can only be made on an "up- Not only does an owner of stocks which is required for corporate
could take the form of earned sur¬
tick" or "up-beat."
human institutions, the New York
This means consider long and carefully before control, in regard to market ma¬
plus if incorporation were per¬
that a short sale can only be ef¬ he makes his decision to meet the nipulation, and in regard to many
mitted
and that eventually the Stock Exchange is not perfect.
fected at a price one-eighth high¬ costs and taxes involved in sale, other trading practices and cor¬
shares of such corporations would Probably all that can be demand¬
er than the previous long sale.
It and possible inability to make an porate facts which have to be mat¬
acquire
increasing , value
and ed is a desire to improve and a
is supposed to force short selling alternative purchase because of ters of judgment.
could be sold, with profits taxable
to cushion an upward trend in¬ the prohibition on margin trading,
record of improvement. Both of
At the moment there are three at only 25% as capital gains,. Ad¬
stead of to accentuate a downward but most purchasers also have to
problems in which members of the vocates also argue that corpora¬ these are clearly evident.
trend. How it can be argued that think
in terms of at least six New York Stock Exchange are es¬ tions have continuity and sta¬
a change
in price of one-eighth months before they will enter an pecially concerned.
First, some bility which may be lacking in
Editor's Note: Foregoing is secrepresents a "trend" is beyond hu¬ order to buy. As motivation un¬
government agitation has long ex¬ partnerships.
?
arid and;concluding^ instalment! of
man comprehension.
But this and der present circumstances has had isted for segregating the func¬
Opponents or permissive incor¬ Dr. [Cumberland's, paper.
Ptirtl
other interferences- by the
Se¬ to be greatly strengthened in or¬ tions of broker and dealer.
It is poration reply that such tax ad¬
appeared* on cover page of < the
curities and Exchange Commis¬ der to effect either a purchase or
contended
that a member firm vantages as might exist would
"Chronicle*' of Nov. 28.
sion in the exercise of competitive a sale; .the result has been sharp
which purchases and sells secur¬ certainly be promptly terminated
investment judgment prevent the contradiction in the breadth of the ities for its own account can not
by legislation or administrative
New York Stock Exchange from market, as well as a disorderly
give disinterested advice to in¬ action,, that Ithere is no dearth of
properly fulfilling its major func¬ and* inefficient * market; where vestors or act as an acceptable capital for. stock .exchange pur¬
It was reported* In .Washington
tion of an accurate expression of both buyers and sellers are penal¬
agent in transactions for them. poses, that incorporation might on ♦ Nov; - 13
byi; authoritative
the views of investors in regard to ized because of the paucity of
TTiis : situation raises complicated permit the. transfer of .shares to
sources that after Dec. 1 the Re¬
bids and offers.
This is best ex¬
the value of listed securities.
philosophical problems. Suffice it undesirable or irresponsible per¬ construction Finance Corporation
Under
existin^requirements by emplified by the extraordinary to say that there is no such thing sons, and that stock exchange will guarantee loans of only $100,the Federal Refj&Tve Board, no divergence between bid and ask
as
unity of motivation either in business would eventually fall to 000 instead of $350,000 under its
new loans on stock Exchange col¬
prices, where a 10% spread or the field of finance or in any corporations owned or dominated
"blanket
participation" program
lateral can be made from brokers more is by no means uncommon other field. Instead of
engaging in by the great1 banks;: insurance with
banks, according to a dis¬
for the purchase of listed securi¬ in stocks in which trading is light.
hypothetical evaluations of mo¬ companies and other fiduciary in¬
patch from the Associated Press.
ties, except that rights of stock¬ Potential sellers and potential tive, a better approach is to in¬ stitutions.
In short,
opponents
Under • the program, started in
holders and bondholders to sub¬ buyers are both damaged, and the
quire whether abuses have actu¬ argue that proposals for permis¬
April; 1945, to help small business,
scribe for new issues can, under a flow of capital to industry is im¬
ally occurred and to devise rem¬ sive incorporation promise few or RFC guaranteed up to 75% of bus¬
recent ruling, be financed with peded.
Stagnation in new enter¬ edies for those which may be no improvements over the present
iness loans made by participating
borrowed
funds.
To
be
sure, prises during the thirties can not found.
Certainly it is proper for system while involving substan¬ banks. A responsible official is
every • one
except
the
Fed¬ be disassociated from restricted the customer to know when the tial dangers and disadvantages.' At
said to have stated that nine out
eral
Reserve
Board \ knows capital markets, which have been broker has a personal position in present it would appear that the
of ten such loans thus far have
that loans on listed securities are
of the New Yoik
the result if not the purpose of the security which the customer membership
been for less than $100,000. Total
being made, and that the existing
Stock Exchange is opposed to the loans guaranteed by RFC under
wishes to buy or sell. In that con¬
restriction has merely created an¬ governmental intervention.
Of equal importance, those de¬ nection it may come as a surprise innovation of permissive, incor¬ the program to date is said to be
other black market

the market has automatic support
to the extent of outstanding short

was

condition.

present, however, it is enough to

vices

which have

been

built up to

many

laymen

learn that poration.

s.\ 1

$600,000,000.

THE COMMERCIAL & FINANCIAL CHRONICLE
11 |H^ 1T||>III

iiiii

^1^1

I^ir.

nwn.i

rritf irYni

iifirYl T "*i

bushel

and

pound,

Thursday, December 5, 1946?

below 5c per .that money has declined in value.
trouble faced the This should be kept in mind when

copper

only

economy.

speculation but unsound business

(Continued from first page)

banks

serve

their

reduced

re¬

For the Federal
expansion continued. There was discount rates.
heavy buying of commodities for Reserve Bank of New York the
predicted fury.
There are many symptoms ot speculation and the building up of change was from i%% to, 1%.
However, a deflationary cycle had
trouble. In the past it has been inventories on credit.
By the late spring of 1920 mem¬ already set in.
Wise and

withstand the
strike with its

storm

should

consistently profitable

adopt

When

more cautious

a
■

ft.*

X. Freight

shortages

car

business

policy

observed, among other

one

■

already at

was

when
boom

rate of production.

£ inventories
after

increasing

business

had

boom level.

rapidly

reached

;

3. Agricultural prices commencing
to Crack after a steep rise and
While consumers' incomes were
;

ber

banks

their

| perity.

authorities

reversal in a long rising trend
Of bond prices.,'

js)

increased

pursued

policy

rise

before

these

"warnings"

became visible.

These

remember

they lead to
But

6n the basis of

"markets

bearish decision.

have not been

operating

"business

On this

6aust go much deeper in

jjysis.
V

the

who

story

had-

aand.

built

The

■

came, the winds
liouse and it was

are

foolish

his

rains

anal-

our

In the New Testament

told

usual"

usual" since 1941.
occasion I believe we
as

man

house

and

the

upon

floods

beat upon

the

our

economy at the beginning of

the

depressions of 1920-1921; 19291932
and
1937-1938. When we
analyze credit conditions, com¬
modity prices, inventories, de¬
mand for goods, international de¬

velopments' and other controlling
forces, we can understand quite
Well wliat ckiiSCd thbse
readjust-

| ments^l • ;
However,

well

these

analyze
today, I am

reminded more of the wiser man
in this old story. He built his
house

upon

etorm

descended

rock.

fipon the house but it

the

Again

and

beat
was

down

not de¬

increased

was

Commercial paper was also
on a 6% basis, and the call loan
rate had reached an extreme high
of 20%. Loans on securities had
increased

about

billion.

Speculative use of credit Was
rampant throughout the country.
There
set
in
the
longest
severest-cycle of liquidation

and
ever

witnessed.

played only
a minor role during the build-up
stage for the 1937-1938 depression.
Starting in the spring of 1936, the
authorities

cerned about the

became

con¬

inflationary

pos¬

of the tremendous

sibilities

contrast

with

continued

low

rates

individuals."
This

policy supported not
intentions,
but with dynamic action. The Fed¬
eral Reserve Banks purchased a
net total of $552 million of gov¬
a

alone with words and

securities

week

one

during October to keep the money
market
The

even

second

keel.

with 1937
that may be of importance is the
tremendous increase in the credit
base.
Between
September
1937

sup¬ and
1946, money in circulation
ply of unused credit. On July 14, increased from
$6.5
billion
to
1936 reserve requirements were
$28.5 billon. Federal Reserve Bank
raised 50%, effective Aug. 15. The
credit increased from $2.6 billion
adjustment to these increases in¬ to $24.1 billion. Total
deposits in¬
volved little difficulty. The in¬
creased from

vestments of banks

were

$52 billion

not

re¬

duced, loans continued to expand
and
bond
yields continued to
decline.

large inflow of gold

con-

Dec.

21, 1936 the Treasury
Department announced a policy
for neutralizing its effect upon the
on

base.

credit

finances

addition,

have

strengthened

$147

industry's
materially

been

and

private debts
relatively smaller. We are now
in the early stage of an
expansion

are

inued to increase the credit base

and

billion.

This

was

selling to the public
amount

of U.

done by
equivalent

S. Government ob¬

consumer

the

borrowings

beginning of

against
period of con¬
as

traction.

Current credit conditions work
against any deflation or liquidaion in the economy.

trary, they

To the

con¬

are

strongest nation in
a

the world.

We,

people, have tolerated if

not

encouraged a destructive labormanagement struggle that has left
us out in the cold. .<

Nevertheless,

and

almost

spite of ourselves, the forces that
in the

past have caused "depres¬
sions do not now
appear "to be"
present to a controlling degree.
There are strong
supports in the

acondiny .and I believe it
a

lot of

and

ment
most

take

depended

back

with

to
This

upon

vigor.

confidence in the invest¬
outlook. I anticipate that

today's storm- warniiigs
will be taken down
by business-1
men and

investors with regained

confidence, and not blown down

Credit conditions dominated the
Initial phase of the 1920-1921 de¬
pression. The money market had
become
summer

strained

the

of 1919. Bank loans

were

Increasing rapidly and member
banks
were
borrowing heavily
from the Federal Reserve Banks.
a

£err*

finally

m°ney

the fiscal

call

loan

rate

had

reached

high of 18%. These trends Con¬

tinued and in November 1919 the
call loan rate advanced to
a peak
of 30%. This broke stock
marke*

able

brought reactions in the
market
that
were
not

maintain

easy

money

conditions.

authorities,

part in creating the
maladjustments preceding and in¬
tensifying the 1937-1938 readjust¬

Commodity Prices

Commodity price deflation
been

announcement

crease

of the" second

in¬

requirements,

reserve

and before the final increase be¬
came

effective, high-grade bond

between onefourth to one-half percent. Short
term Jntefest rates firmed mod¬

has

ment.

There

sharp rises in
prices between the

were

material

raw

Summer of 1936 and the

eral Open Market COmmittfee an¬

nounced

prepared

April 4 fhat

it "is
open-market

make

ernment

securities

amounts

and

such

times

may be desirable." Following the
ahouncement of this policy and
the actual purchase of bonds, the
money
market
stabilized.
But
commercial banks continued to
sell

government securities. In an
effort to stop this selling and to
encourage them (the commercial
banks) to employ their funds to

clines in agricultural

prices should
good than harm to the
as a whole.

economy

The relative price position of
non-agricultural raw materials is
most important. In the past, these
have been extremely sensitive to
business
fluctuations
and
have
caused

most

the

inventory

of manufacturers.

osses

Prior to

the recent release from price con¬

most

materials

the

industry raw
relatively low

were

prices judged against most stand¬

They were moderate against
the increases in cost over prewar
ards.

They were moderate against
supply and demand relation¬

years.

the

ship

prevail for some
They were moderate

likely

time ahead.

world

against
were

And

prices.

levels. As an indication,
the average increase over 1939 ap¬
proximated
the
increase
from
prewar 1914 to the level that pre¬
prewar

readjust¬
The increases
that have occurred since the end
of OPA controls have not been
excessive with possible minor ex¬
the

after

vailed

severe

1920-1921.

ment in

less than $1.25, cotton from over
40c per pound to under
12c, and
corn from about
$2 per bushel to
50c.

These

are

In order to have a proper per¬

ventory
An

losses

that

alone

could

outstanding feature of the

modity

was

prices

advance.

the fact that

generally

com

did

Nevertheless during the

worldwide

deflation,
seriously and

.»

Irasfe

JSgjfc.,.

^"*kTp
W-v'.
-

"
-

•

There

was

sufficient

success

tion set in.

ple watched the rise in money in
circulation,
bank
deposits and

ing richer while fighting a war.
course, this had to be falla¬
cious. We were in the business of
Of

dollars alone

not an in¬

really richer. In
part,
the
recent

dication of being

considerable

price rises are a

business

having been caused more than
anything else by the necessary"
liquidation of overbought inven¬
tories. Starting possibly in Octo¬
as

ber, 1936, there developed a gen¬
eral feeling that basic raw ma¬
terials were going to be in short
supply and that prices would ad¬
vance. This led to a wave of for¬
buying and a building u£ of

ward

inventories which reached a

peak
1937. Once
business turned down, it became
apparent that inventories were too.
large. Also, many began to reduce
in the early spring of

inventories because of the decline
in

prices and the expectation that,
could be replenished

inventories

They

they

deceiving way by simply
creating more pape? money and
bank deposits—on credit. But the
long-term effect is the same. Our
more.

action

has

lessened

the value

the dollar. It means you have to

have

What hap¬

lower prices.

later

pened to the steel industry is an
but not

extreme

isolated

ex-,

ample of how this affected busi¬
ness. The steel industry operated
an average rate of 84% of ca¬
pacity during August, 1937. The.
operating rate declined to 38% for
November and 25% for December %
During August, inventories were
being built up and during the
closing two month of the year in¬
ventories
of
steel
were
being

liquidated.
One could not look at the cur¬
rent

without

situation

inventory

becoming anxious. During recent
months

have

there

been

strong

pulling in opposite direc¬

forces

tions. The first set of forces have

encouraged the building up of in¬
These include:

ventories.

1. The holding

back of shipments

because of unsatisfactory OPA

prices and the growing prospect
of relief.
2. The

holding back of shipments
of

because

possible decontrol*

(It is only natural that many
manufacturers would act in the
that the cattle raisers
the closing weeks of

same way

did during

meat control.)
3. In

many

built

instances, there were
excessive inventories
retain quotas

of certain parts to

suppliers' schedules.

materials

Some
lated

sible

were

accumu¬

protection against pos¬

delays due to future labor

troubles.
5.

can

assumed

inventories
in
and

were

that

some

accumulated

anticipation of price
an inventory profit.

rises

Offsetting these forces which
encouraged the building up of in¬
ventories has been the inability to

delayed reflec¬ acquire much needed supplies be¬

tion of the inflation that has oc¬
curred.

of the
readjustment

think

students

Some

1937-1938

with

price controls during the war to
justify assertions that the nation
was avoiding inflation. Many peo¬

expected that dur¬

to be

was

ing a boom like the late 1920's, in¬
ventories would be built up that
would cause trouble once defla¬

cause

shortages of such basic
as
steel,
non-ferrous

materials

metals,

building

Were

not for

depression.

1929 boom

tion.

spective on the important ques¬
tion
of
commodity
prices
we
should keep in mind what has
happened to the monetary side of
our economy during recent years.

cause a

sequent actual liquidation of these
inventories intensifed the defla¬

ceptions.

show the ultimate
effect of the government talking
about avoiding inflation while the
Non-agricultural
prices .were
also in a vulnerable position and printing presses are working over¬
time. History reveals many meth¬
had severe declines. For example
ods by which governments created
pig iron declined from about $48
money to help finance extra ex¬
per ton to $18 and crude petrole
penses. The kings of many years
um in the
Pennsylvania field de¬
ago
occasionally
reduced
the
clined from $6.10 per barrel
weights of the coins and made
$2.25.
Such ■ severe declines
more money with reclaimed metal.
commodity prices meant big in
We did it in a modern, easier and
.

passed, the resultant withdrawal
of buying of raw materials and'
manufactured goods and the sub¬

they

in relationship

moderate

than cut in half. Wheat
from $3 per, bushel to

agriculture, in¬ clined
this
dustry and commerce" beginning longed and deepened the
depresirrriii
20 several - Federal Re- sion. With wheat under 50c

—

was

declined

meet the needs of

were more

importan
examples of what happened to ag¬
erately. Banks and others became
ricultural prices.
sellers of
government' securities.
Because of this pressure, the Fed¬

1937.

sustained

destroying and not building. Peo¬
ple could Only appear to be be¬
coming richer. We now see that

iihder

Inventories

Speculative buying of basic ma¬
terials at inflated prices was an"
outstanding feature that contrib-'
uted to the business depression of
1920-1921. Large bank loans were
created to carry these inflated in-'
ventories.
Once
the crest wa^

government bond investments and
concluded that we were, becom¬

major contributing cause
aP, c!?)a^ed and had a deflationary to
past depressions.
From
the
effect on the economy.
1920 peak to the 1921 low,
agricul¬
Within a few weeks after the
tural commodity prices in
general

purchases of United • States Gov

Credit

The

on May. 1. These
measures, which
indicate how great was the con-

abuse-Mstaggering abuse-- yields had advanced

still

bounce

gives

can

important

trols,

contrast

strongly inflation¬
stroyed. It rested upon a strong ligations and by putting pur- ary and
encourage expansion",
chased gold in an inactive ac¬
foundation.
believe it can properly be said
count. On Jan. 31, 1937, reserve
I do not wish to
that we have never had a
imply that as a requirements
major
were
again
in¬
liation, we have been wise. We
readjustment in business when
Mve spent money like the foolish creased, this time by one-third. money and credit were so
plenti¬
To give the banks time to make
sailor and built up a government necessary adjustment, one-half of ful, the speculative use of credit
so
debt that would probably bank¬ the
limited, and the fiscal author
increase
became effective ities so
rupt
anything • less
than
the
determined and apparently
March 1 and the other one-half
'as

played

This

any funds wanted to supply the
credit demands of business and

ernment

conditions

Credit

complete

obtain

6%.

The

■

when
fundamentals

prices

background should help us
"Recent money market ten¬ to appraise the current commod¬
dencies have not, however, al¬ ity price situation.
Agricultural
tered basic easy credit condi¬ prices have again become serious¬
tions. The persisting large hold¬ ly inflated. The government's de¬
ings by banks of Government funct program to avoid inflation
securities, particularly of short- apparently contributed much to
term issues, together with Fed¬ this.
Fortunately, most of these
eral Reserve policy of main¬
high prices stand out as a sore
taining the prevailing level of thumb.
They are above what
interest rates on these issues,
might be called the level of equi¬
make it possible for banks to librium.
Further reasonable de¬

Bank of New York

rediscount rate

fiscal

destroyed.

We know from experience that
tmich was the insecure
position of

time

Reserve Board Bulletin.

forgot, it might be worthwhile
reviewing a few figures. The Fed¬
eral Reserve

unfavorable outward
Indications of business and investment
conditions.
Normally
are

this

those of 1919-1920 and 1929. They
differ from those of 1937 in two

credit contraction.

Most

are

& The stock market completing a enough the credit conditions pre¬
ceding the 1929 crash. But lest
long extended and substantial we
*

judging the price level.

Commodity

spring of
generally felt that a
period of active busi¬
ness lay ahead and that inflation
The reserve ratio had reached ap¬
proximately the legal minimum of respects that may be of con¬ had at last really taken effect.
40%. The New York Federal Re¬ sequence. The fiscal authorities During this brief period finished
serve Bank
rediscount rate rose are guarding
against the com¬ steel prices rose over 25% and
banks
to 7% and short-term commercial mercial
becoming
con¬ copper went from 9J/4c per pound
to 17c, a gain of almost 85%.
paper yielded 8%. The expansion cerned about the outlook for in¬
of credit had gone to the absolute terest rates and are attempting to Commodity prices rose to vulner¬
levels and
when
limit. The trend had to be re¬ avoid any strain on the banks able
business
versed and the next year was one that would cause them to restrict prospects changed, most of them
of
declined sharply.
Quotations for
severe,
urgent
and forced appropriate use of credit. This
liquidation of credit. After secur¬ policy was reemphasized by a wheat, cotton and copper, for ex¬
ity and commodity prices de¬ statement in the latest Federal ample, were about cut in half.
had

borrowing from the Federal Re¬
serve Banks to nearly $2 billion.

V fit high levels.
4. Wages and prices of non-agri;
cultural products rising rapidly, clined and
business turned down
such as so often happens m the
and it was obvious that a depres¬
final phase of a period Of prossion was in the making, the fiscal
5. A firming of interest rates and

conditions

Credit

dollars to buy

the

same

supplies,
etc*
shortages*

these

the influences listed above would
have

caused

tions^

serious

accumula¬

With

price controls re¬
moved, most of the artificial rea¬
sons
were

for

accumulating inventories

eliminated.

These must be among
sons

the rea¬
in¬

for the sharp increases in

ventories during recent months*
There will be cases of excesses to
be worked off.
omy as a

Taking the econ¬

whole, however,

our re¬

ports indicate that inventories are
not a source of danger such as
existed prior to past depressions*
amounts of basic raw

Excessive

quantity of goods. This is another materials have been the cause of
of saying that prices are trouble in the past. Their liquidar
tion
undermined
the economy.
per higher due in part to the sole fact
way

Volume 164

Today, these
mally

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4548

appear to be abnor?
considering
current

low

levels of business.

months after

was

believe that Ihby could have in turn will reduce wages and to our choosing but probably mov¬
their cake and eat it too. That is, salaries. These industries will go ing toward some kind of stability.
they could have much higher in¬ further and cut back on their In the
meantime, our foreign

entrance

our

into the conflict before there was

The trouble is

curtailment of goods for consum¬
ers and at worst the curtailment
comes# not matched by
was only a fraction of what oc¬
tionately greater effort

partly finished goods such as re¬
frigerators without motors and

2909

propor¬

producers' goods and trade prospects are quite definite

for

orders

arid ef¬ in various ways it .will adversely and stimulating to the economy.
: ^
The
elminiation
of
Germany,
school buses without seats. The curred during World War II. A ficiency, and continue to buy de¬ affect the entire economy.
I can understand this cycle of Japan and Italy and the shrunken
liquidation of these inventories as review of the production and sales sired goods at prewar prices. Food
soon as possible would be good for
of various important* items shows prices have been advancing over thinking in the same way that I status of some other countries for
the

that the period of restriction, dur¬ an extended period and to a de¬ can understand why a house may
ing which deferred demands were gree are accepted. However, the become warmer if you have coal
being created, lasted three to four prices
of
consumers'
durable to feed the furnace* but I fail to
times longer during World War II goods have had to make most of See its logic. For one thing, the
than on the previous occasion. In the price adjustment during re¬ prices of food and many other soft
perspective it is reasonable to cent months and it has been disap¬ goods are excessively high ana

It would increase
supplies,
relieve
price
pressure and release tied up busi¬
ness
working capital.
Actually
economy.

needed

when it

to individual

comes

man¬

ufacturing companies, their most
serious problems continue to in¬
clude shortages of certain mate¬
rials

and

There does

parts.

look

not

the

inventories.

should

not

■

clusions.

misread

incorrect

may be led to

one

Inventories of manufac¬

retailers and wholesalers
may be called visible inventories.
The Government gathers a con¬
siderable

makes

amount

estimates

data

these

and

participated

the

Many are asking if the
be able to

will

consumers

pur¬

chase these goods as they come on

through the

years

market at increased prices.

The biggest price increases have
produced nearly 20 mil¬
lion new automobiles. During the been in food.
Retail food prices
five years through 1937 we pro¬ have risen since prewar more than
duced about 15 million new auto¬ 100%. Thus means that today you
1929

con¬

turers,

war.

During the five

; The available figures on inven¬
tories

during part of the strikes.

when

period

whole in the level of

interlude

appear to be danger to the econ¬
omy

This has contributed anything that will force them
talk about buyers* down may do more good than

the period from 1915 pointing.
a boom with only much to

upon

through 1919 as

mobiles.

five years can buy less food with on dollar
will have pro¬ than you could have bought with
duced about 2Vi million new auto¬ 50 cents before the war. Here, we
mobiles. This is an extreme, but have much above average infla¬

During

through

1946

the

inven-1

not a bad indication. Residential tion, and more than average jus¬
There are the figures com¬ building was
severely curtailed tification for consumer resistance.
monly referred to and used as an^ and the need for new homes is The truth of the matter is, how¬

tones.

index of total inventories.

In ad¬

radios, full ward¬
robes of clothing, new homes, etc.

equally acute. The figures for con¬ ever, that food consumption is
sumers' durable goods generally running
about
15% per capita
are similar to those for the auto¬
above the prewar level.
mobile industry. During the war
The consumer is faring better
the consumption of most consum¬ when it comes to consumers' dur¬

These

ers'

dition, there
tories.

mobiles,

inventories

When
1929

include

have

the

upon

they
and

"'live off
duction

auto¬

new

effect

real

invisible inven¬

are

These

very

economy.

large, such as in
we
are
able to
fat," as it were. Pro¬
decline substantially

are

1937,

our

can

and people will get along for a
period of time. There is no prac¬

goods

mands

durable goods

consumers'

are

able to increase the level of ship¬

ments,

the

anxious

will
be
competitive

consumer

buy

prices.
There
the

another

causing

approach

situation that is
students deep con¬

inventory
some

The increase in inventories

cern.

is exceed¬

shows that production

ing consumption. For this to occur
when business is at boom level,
has in the past been a sure

and

warehouses

Shelves

are soon

filled with goods

reasoning in terms
of the past, it will be necessary to
curtail production
and a defla¬
tionary cycle begins.
and then, still

generally

was

sell

demand

and

tremendous

inability

amount

type of reasoning that
does not fit current circumstances.
It

true

some

instances, for

turer, try to build a new factory
or buy some machinery that you
know will
greatly reduce your
of

cost

production.

In these in¬

in the average

than the gain
consumer's income.

through lower quality than as in¬

higher prices.

vestors.

Return

Many

Competition

people

have

bad; is not a sign of approaching
trouble, and would not be the end
of

prosperity.

It is

prerequisite

for real prosperity.
Let

look

back

during the most
war

years.

home,

could

that

group

make
in

soon

new

one

Sunday

out

out of

would

inspect,

payment and move

were

wished

pre¬

wished

select

down

conditions

prosperous

personal arrange¬
completed.
If we
automobile, we

new

could go to Detroit, choose the
make, model and even the color
we wished, watch the car come off

the

assembly

home.

buyers' resistance to
We found that gov¬
price controls could not
protect the
consumer.
Organ¬
ized labor is asking and fighting
for all it can get.
The farmers
want the highest possible prices.
The cost of building a new home
has become exorbitant because of
shortages, black markets and in¬
efficient labor. Buyers' resistance
We

line

and

wished

drive

new

radio

need

ernment

another

should be treated at this

ing brands, select the

tion point. What is needed is
greater production, not less. Many
Of

our

have
for

months

troubles of recent

resulted

from

the

demand

goods than the economy

Is capable of producing. We must

out-produce black markets, ex¬
cessive prices and shortages that
cause
inefficent
and
high-cost
manufacturing.
?
Demand for Goods

Probably the strongest support
to our economy today and one of
the

greatest contrasts with con¬
preceding the earlier de¬
pressions is the potential demand
for
goods.
As
you
remember,
ditions

World

War

There was first

began July, 1914.
a period of hesita¬

tion, but from early 1915 until the
United States entered the

war

1917, we experienced a
supplying Europe with all
kinds of goods at profitable prices.
April,
boom

That will stimulate

these articles.

present to a controlling degree.
In fact, over the There ate many strong supports
it has been shown that the that should sustain the economy
production and sale of an equal and by past standards would in¬

the

economy.

years

dollar amount of consumers' dur¬

has a more stimulating
the economy as a whole

able goods

effect

than the

production of soft goods.

consumer

purchasing power will

created

clear

the

market.

dicate

sired

and

have

delivered

promptly.
If we wished sheets,
towels,
pajamas and numerous
other

items

that

are

now

scarce,

could go to the store and buy

all that we wished to carry
or

have delivered.

man

home
could

buy a suit of clothing with
pair of pants.

even

two

Who

should

fear

return

these

competitive conditions ex¬
cept the inefficient producer or
those charging excessive
prices
for inferior merchandise? Surely,
we as consumers and investors, if
we
own
good securities, should
welcome the change.
It is nor¬
mal and good to have buyers in

Many

misled

extended period of pros¬

times.

people are deeply con¬
Things are going poorly.

But
cerned.

A plague has been upon the land.
Could this create " a depression? -;
The plague has been government
controls and irresponsible : labor

It has-takeny the form

unions.

of.

paralyzing /strikes, acute short-:
ages of materials, high manufac¬
turing costs, unpredictable earn¬
ings,^ .disruptive.price ; relation^
ships that may limit the, buying
power of many consumers, and
impair confidence.
Death of ihe OPA and many
net defla¬ other government contrdlsl could;

place when sales are stepped
up will add to buying power.
It
has always been a stimulus. We
may not see at this time all of the
details of the inner play between
different parts of the economy,
but it is unlikely that the in¬
creased output of consumers' dur¬
able goods

will have

tionary effect upon the economy.

importance

mean

new

life

the

economy.

Many of the bottlenecks that have
held back production and created
inefficiency should be overcome.
The experience of the leading food
company, Corn Products Refining,
tells a hop^fhl story. Their raw
material is corn.
When it wa$f
under government control it was

to the status of our impossible

for

the company*- to

purchaser enough corn to have
Foreign conditions accentuated steady, operations at a reasonable
the most difficult problem during level.
Corn was" removed from
the 1920-1921 depression; namely, price
ceilings and immediately
the deflation in commodity prices.
lumped to ^ high level and then
The French franc, after declining settled back to abdut 10% over
nearly 50% during 1919, declined the old ceilings. However, at this
an
additional 30% during 1920. high price for corn the company
The German mark depreciated al¬ was able to purchase all it needed
most three-quarters during 1919 to operate at capacity and without
and declined further during 1920. interruptions.
The result was a
Most foreign exchanges depreci¬ reduction itt production cost that;

There

that

to Europe, particularly dur¬

ing the second half of 1920. This
added to the glut in our already

curing
hours

steel

with

fewer man
than in

of labor per ton

likely that there will
juncture. over-supplied markets and inten¬ develop hundreds of similar ex¬

concern

1941*

It is

by
Government sified the readjustment.
amples.
predict trouble
A worldwide depression began
The rreteatiod of go^mment/
ahead. National income for 1946 in 1929.
While conditions in the controls ' increases the prospect
is estimated at about $165 billion. United
States
hurt the
world that consumers' durable goods
Consumer expenditures are about
economy, it is also true that our output will increase by the time }
in line with this level of income.
depression was made Worse by the there might be some decline in the
In other words, the consumers are worldwide deflation.
demand
for
consumers' goods*
buying all that would be expected
Foreign conditions had a mixed This should smooth the transition
Considering their current earnings.
stressed

economists

who

However, consumers are spending
about $12 billion more on con¬

effect
the

upon

incidents

economy

during

depression.

Many

our

1937-1938

pointed to the approach¬

they normally
ing
war.
Japan was fighting
considering the current
China.
The war in Spain had
of spending and about the
taken on all the characteristics of

sumers' goods than

would,
rate
same

amount less

consumers'

durable goods. There is no ques¬
tion but that the consumption of

Euro¬
systems fought on

major conflict between

pean political

consumers' durable goods will be Spanish soiL These were depress¬
Their
increased as these things become ing incidents to investors.
disturbing influence was mod¬
available. The fear is that when
control and not sellers or bureau¬
erated, however, by the stimu¬
consumers
shift their spending,
crats.
lated worldwide demand for basic
there will be a reduction in the
Buyers' Strikes
materials.
demand for consumers' soft goods
We are now witnessing the dif¬
The average American is going such as food and clothing. This,
through a difficult period. Prices they reason, will set off a defla¬ ficult adjustment to a new Europe.
have risen and the buying power tionary ispirai* Prices of the con^ This will take time. There will be
of his money has declined.
had hoped and some were

perous

The increase in credit which will
take

gone

Can We Increase Consumption?

whole, I believe it is a mistake of
judgment to assume that invento¬
ries are being built up because the
has reached the satura¬

foif food and clothing to meet her
of the ex¬ immediate i needs and from the
demand.
Few longer term point of view, ma¬
who have survived in business for
chinery and equipment to rebuild
any length of time are undertak¬ her industries.
Hence, it appears
ing an expansion program that reasonable to expect large net ex¬
will bring their normal capacity
ports for a period ahead.
up to the full level of this big de¬
mand. On the other hand, as the
The Plague
production of consumers' durable
From this review you can see
industries increases, there will be
why I conclude that the forces
a
greater demand for the labor which in the past have caused de¬
and products necessary to make
pression do. not now appear to be

refrigerator, we could go to the
store, examine the various lead¬

consumer

addition, credit arrangements are
being made. Europe is "Starving

high prices would be a good ated in value.
made possible the granting of a
The United States was not hurt
thing, especially until there can be
wage increase, the lowering of
restored a better balance of sup¬ too seriously in its own foreign selling prices up to 15%, and sat¬
with
Europe.
However, isfactory profits* The recent ex¬
ply and demand. Only the buyers trade
have the authority to force re¬ many other foreign countries lost
perience of the steel industry
straint. The more articulate they temporarily their European mar¬ shows that operations can be put
kets. As a result, South America on an efficient basis once the com¬
become, the more favorable the
long-term business outlook, and and Asia shipped vast quantities panies are able to produce at sat¬
commodities
to the
United isfactory levels and without inter¬
the higher is the real value of our of
States that would normally have
securities.
ruptions. The industry is now pro¬

de¬

States to

temporary

stances and for the economy as a

one we

United

the

economy.

forgotten high prices.

what good times are like.
The re¬
turn of a buyers' market is not

ments

the prewar years

less

justing the price of the product to
Foreign Conditions
what the market will take. If the
This review of the forces that
ecoomy one must properly judge 1947 models are too high priced, in the*
past have determined the
two
all-to-common^ causes
of adjustments will be made in the economic weather would not be
concern.
I am
referring to ap¬ 1948 models to meet the market. I adequate without consideration of
proaching competition and inabil¬ think as consumers we have more foreign conditions. They are of
ity of consumers to buy at these reason for concern over inflation varied but some times dominating

good white shirt, or enough
and towels to replace the
old ones. If you are a manufac¬

suit,

sheets

over

considerably

and

help supply world needs. Surpris¬
ingly large funds are available
with which to make payment.
In

grasp the controlling importance
of this source of strength to the

afternoon and

costume

car, if you can find one.
It
about 32 weeks at the 1939

at
competitive prices is It should also be remembered that
unlikely to be the cause of it is in respect to consumers' dur¬
serious business recession during able
goods
that
manufacturers
the months ahead.
In order to have the greatest leeway in ad¬

jewelry and
maybe
women's
ready-to-wear.
But try to buy a new home, an
automobile, a refrigerator, a new

example,

took

goods

this is another "business

same

most

Us usual"

Today 600 bushels will pay for the

have risen

Lack

indica¬

retailers'

great.

tion that trouble is in the making.

The

even

machinery, to reflect condi¬ average weekly rate of pay to buy
in another important seg¬ this car and near 27 weeks today.
of
our
economy,
is very Non-agricultural prices generally

tions

had

consumers

broader base than
trial

ment

these

extremely

are

as suppliers of ma¬
equipment puts a big

years

these goods are aware

treme

expected. The demand for indus¬

inven¬

tories

manufacturers

Most

few

demand

high able goods that are gradually be¬
In connection with the increased
level. Nevertheless, the increased coming available. During 1939, it
demand since the beginning of the took about 1,000 bushels of wheat production of consumers' durable
goods, it is almost certain that
year indicates that deferred de¬ to buy a four-door Ford sedan.

low today.
There are shortages rather than
surpluses. This is a strong support
to the economy. It increases the
prospect that when the producers

tical doubt but that

remained

harm*

terials

will decline, and prolonged dickering and develop¬
ments alone
lines generally not
production will be reduced. This
sumers'

goods

normal! conditions and
dangers
of serious
trouble in business during 1947.
The movement away from gov¬
ernment controls appears to re¬
flect a favdrable change in politi¬
cal thinking. Our experiments m
government planning may have
passed the extreme. If history re¬
peats itself, it is likely that we
will keep most of the social good
that has developed since the early
1930's but throw off much of the
bad. Once again the time may
come when the realist may speak
more effectively than the theorist.

more <

lessen; the

Once

again

being

successful

may be an honor.
(Continued on page 2910)
±

businessman

■

ri* *">'. ••••??

tfksa* ^

P%??»y

Once again we may have a gov¬
ernment of law and not of men

The

labor

strength that should support the
through the difficulties
we are now besieged.

economy

with which

They could lead to a sustained
period of good business and earn¬
ings. There is reason for hope
that the
plague that has been

this land may have come to
the turning point.
Common stock prices are now
low in relation to earnings and
dividends. A selected list of good
upon

issues

Generally stocks do hit bot¬
tom before business in a depres¬

spend today, ex¬

In the coming depression there
will be substantial cushioning ex¬

sion, but not by a wide margin.
From the high last May 29 to>
the low on Oct. 9, the Dow-Jones

to 6% in
grade bond

yield

ing

icance of this should

not be

un¬

cause

the

worker

businessman
in turn

and

the

and

everyone

Fortunately, this part
the plague may at last have

consumers.

reached the culminating crisis. The
bid Administration appears to be

take the rougher road that may
iiave success- at the end than to

follow .the apparently:: smoother

roadjthat may lead us only into
another graveyard of despair.

be¬

bills, there would be a rush for
what he had.
Rays of hope are
breaking through the mist and a

changing its labor policy.
The
mewly elected Congress can be ex¬
pected to take steps that will be
constructive to labor-management
relations* It is better for the aver-;
•age American- and the investor
€hat from thiS; crucial point WO

interested

likely

of lack of confidence. How¬

if it became generally known
that he was selling real ten dollar

confidence

restoration

the

longer term outlook could have a
similar effect upon the attitude
toward

risk

The

stocks.

common

further

stock

common

decline

prices

appears

The return for holding

moderate.

good
stocks
is
generous.
The
long-term possibilities for appre¬
ciation

substantial.

appear

This

suggests that the hunting season
is here for those

desiring good in¬

(Continued from
policies and action,'and bur infla¬
tionary potentials, count for so
much in the stock market,

My first major assumption is
that business will decline rather
sharply next year, especially in
v

the second and third quarters. The
basis
for v this
expectation
is

largely * the ^maladjustment

page

the

getting around $175 a month. If
he buys this Chevrolet he will
have $105.42 a month left to live

$128.73 with a 24 months'

on,

financing plan.

We all know that in a

This is the

principal

chaser

the

pur¬

today

will spend in his
of ownership $504.53
fully equipped Chev¬

first

year

for his

rolet than in 1939.
'tfiv'v-

shows

Now the average

hourly

period of

why

reason

machine

that

over

half

of all

in manufacturing
received a postincrease of as much as
hour. Strange as it seems,

earners
not yet

wage
have

average

ings for production workers in all

maintain

free enterprise business boom
In this country without a healthy

manufacturing industries as re¬
ported for July (the latest month)
by the Bureau of Labor Statistics

participation

cannot

the automobile
and construct io n industries.

promised

price supports to
products may be¬
effective. In previous de¬

certain
come

farm

pressions these factors

were

not

present at all, or not to such an
extent.

ments to be made about the pres¬
ent

level

business

activity

which should help to give us per¬

spective. Never before since 1919
when the Federal Reserve Board
Index

Industrial

Production

started has this indicator of

was

physical volume of business
as high for any full month
in peacetimes as the latest re¬
ported level for last August. It is
our

been

45% above its peak level in 1937
which in turn

21% have not received any

increase at all, and 13%%
have received only an increase of
wage

less than 10c

between 5c and

Coming to the non-manu¬

hour.

this

trades

facturing

report

re¬

veals that in the wholesale, retail
service

and

trades,

48%,

some

63%,: and 67% of the workers,
respectively, have received no
wage. increases whatsoever.
Government

showed

that

study for
the

1936

automobiles

bought that year, 21.1% were pur¬
chased
by those with incomes

000, while over half of the cars
purchased were by buyers with
incomes under some $2,500 plus.
This shows the importance of the
to

market

the

automobile

industry. Of curse there probably
substantial demand for

for

cars

some

months.

income

upper

Those

brackets

can

the

was

only 6% above

level of 1929.
Since Aug. 1945 for twelve months
this
Index
has
averaged
65%
previous best

Business

long time.

maintains

rarely

such

boom proportions for an extended
duration. In fact the longer such

periods

activity have
the longer or

boom

lasted in the past,

deeper

were

the ensuing depres¬

sions.

Taking The Cleveland Trust
Company's index of business ac¬
tivity since 1790 we find that not
since the period from Jan. 1836
to March 1837 (15 months) has
that index averaged higher above
a computed normal for so long as
it probably has (September and
October
estimated) during the
last

months.

period this index

earlier

that

averaged

17%

these

demand

sources

are

satisfied and sales become much
on the large mass
normally absorbs
probably about half of the out¬
put.

dependent

market

which

The Home Construction Field

for

statistical

selves
sive

months.

these

Now

indications

by them¬
not necessarily conclu¬
they should
have a

are

but

sobering
effect.
Business
very
rarely proceeds at such a high
level in peacetimes as it has in
the past 15 months. When it does,

invariably it has been
signal.

red light

reach

conviction

that

the

tically 70% above the comparable
annual wage of $1,227 received by
these

prices of automobiles and homCs
are

too

buyer.

high

The

for

damage

the

average

already has

cost

1939.

From

may

expect to

new

wage

construction

real

are

estate

effectively off

see some

rather

demands in the

industry. The peak of
prices probably has

$100 increase,:.the price, is $1,304.25, pr $519.25 or nearly 65%
above the 1939. level. These com¬
parative prices are exclusive of

house

can't

secure

much

the first year of ownership. has than a 70% loan which means he
$300, The purchaser of this model ;
advanced.; $620.69;: or' $504.53 if must put up in Cash $2,500 to
Chevrolet :itodays on r the >instal-s ?
you use a 24 monthsSiristalhient $3,000. According to a Govern¬
merit plari^ would i
payone third plan. So after buying a car
now, ment'Survey earUer^ this year* the.
-down, or $435.25, and the balance or within the next few
months, bottom 40% of thespending units
in
15: monthly
instalments of this wage earner has $234 to $350 in this country have practically
$69.58. each. In. 1939, the instal¬ left
put of his increased wages for no liquid assets (only $40 per
now.

cost about,

•

ment

buyer would have paid $261
$40.71 a month for 15

down and

months.

today,

in the first
year, an instalment buyer of this
Chevrolet pays out $520.69 more

the next year to pay for all the
increased cost of living items,
such

food, clothing, rent fur¬
nishings and equipment, recrea¬
tion, education, etc. There is no
than he would have in 1939. This
adequate index of the cost of liv¬
excludes
all accessories.
If
he ing increase since 1939. The Bur¬

buys the the accessories, and you
assume these are
only 50% higher
than in 1939, then he has to
spend
$620.69
more
for
his
fully

equipped

car.

figures

are

priced

cars

for
on

Remember
one

the

these

of the lowest

market.

eau

Labor's

index

has

been

unit) and the next 30% of the
spending units above the lowest
40% only have on the average
$700 of liquid assets per unit. So
here again we see an industry
that is pricing itself Out of its
mass market. What has happened
in

the

construction industry

this

outlook that

earlier than the

months;

decline in busi¬

does.

ness

Background

The Inflationary

simply the probability?
that the Government will begin*
It is not

another
credit

or subsidizing;
will in some way ease?

spending

program or

alone matters.

that

terms

It is the

projection of such action*

against
an
inflationary
back¬
ground that is highly important..
That is, once it becomes apparent:
that we must go through another*
period of large budgetary deficits^
we should be worried about the?

possible psychological effects. Re¬
member our people- never yet
have been through a currency in¬

Just imagine?
if the holders;
huge liquid assets began to>
desire property or equities instead
flationary

period.

what would happen

our

bonds. More than ever

I think they are going:
through that mental change with¬
in two years. With the Republi¬
cans in power a general fear oft
of

the value

our

dollar probabljr

will not arise as soon as it

other¬

wise would have. But it seems tOM

quite unlikely at this late stage?
that the Republicans or any party:
can command the self-denial and

sacrifice necessary on the

part of:

people to maintain a balanced

Thomas M. McNiece,

the

was

the top of a boom. In

near

last nine bear markets since

1900

Industrial

made its low until
substantial part of the business

Average
a

Dow-Jones'

the

never

which

decline

occurred.

the

forecasted

had

eight of those bear

the

markets

annually, the price of thjr car ifor

able because of this

this bear market will end

market ended while business

the been seen until the. next boom.
between Already there has been some
1939 and today. But that is not tightening of credit terms or an
too illuminating because, whereas insistence On more conservative
these wages have increased $855 appraisals. The buyer of a $10,000
Chevrolet

this bear market. It seems reason¬

budget for long.
I recently had the privilege of
reading an unpublished book en¬
titled
"Inflation
and How" by-

price, of

the

Our people*

the Gov¬
emergencies and5,
difficulties. I feel almost
con¬
fident that this trend will con¬
tinue. Come" unemployment and
even
a taste of hard times,
ther?
Government, like a beneficient
father, will be called upon to do*
something about it and will act..
This is my second important as¬
sumption. It is a factor which in¬
creases
immeasurably the diffi¬
culty of forecasting the bottom of:

Today we are witnessing the
largest volume of peacetime busi¬
ness in our history. Never during
this century at least has a bear

creased somewhat more than

$785. Today, after the recent

accessories which

large

workers

percentage standpoint wages in
manufacturing industries have in¬

been done. In 1939, a Master De
Luxe Chevrolet in New York
City

controls

wage

enterprise.

ernment during

our

individualism,

rugged

free

have learned to lean on

before,

mal

businesses and
pinch will come

fortunately, for over a decade we?
have travelled far from a social:

of cash

necessity for

many

of our*

had to work out

V-J Day the index

afford them. Then, too, they are a

The

present
situation by reducing*
prices, costs and wages as in the1919-1921 period, I would judge?
that this bear market would not:,
end until sometime in 1948. Un¬

above normal for 15 months. Since

probably has
averaged at least 12% above nor¬

services.

suclu
in at

bull market.

above the average level for 19351939 and 36% above the previous

peak in 1937. That is

history of this stock:

price index has there been
a
large percentage decline

and

certain general com¬

are

declined 30%.

Industrial Average
Never in the

system

In the home construction field
$1,093, and the average hours
worked per week was 39.6. Using prices are even more out of line
Normally, nearly 75% of the con¬ a year of 50 weeks, this spells an with the average pocketbook. It
sumer
income
in
the
United annual wage of $2,167.50. Out of is common knowledge that the
States goes for food,
clothing, this a wage earner with a wife $5,000 house of 1939 costs at least
shelter, and automobiles.
and two children would have to $10,000 today. Undoubtedly scarc¬
It is not necessary to envision
pay $85 in taxes, leaving a net ity of materials has been a con¬
another round of wage increases
now
that
wage of $2,082.50. This is prac? tributing factor. But

public works
probably

1924.

programs

some

was

You

consumer.

State

ISV2C

earn¬

nearly

V-J Day

when

The Price Squeeze

and

There

uniformly.

economic

delicate

the

basis

that

1937 national income.

housing

too,

which

year

Our High Production

months.

Federal

Income Disparities

will be

be¬
prices5 of such1 'important
things as automobiles and houses
income

put it another way, the typi¬
is

cal manufacturing wage earner

mass

decline.

will increase. Unemployment and
veterans' benefits will rise. Then,

few months auto¬
mobile credit terms, just as in
1939, will be extended to 24

tween

the

2883)

doubt, within

the

ease

ownership.

$5,000; 19.2% by those with
incomes between $3,000 and $5,-

When Will the Beat Market End?

Federal
Government
is
spending at the rate of about $41

and

over

vestment opportunities.

penditures
Our

$504.53 during his first year of

tics

ever,

a few labor
to paralyze
.uncertainty.
It

broad market.

comman a

five

dollars, at first few, if any,

inability
enough

cheap

our

fered for sale ten dollar bills for

would

the

house

billion

gets badly out of adjustment in
such a period. A recent report
based on Bureau of Labor statis¬

der-emphasized. If an individual
stood on a busy corner and of¬

build

40% of

classes do not advance

They are sell¬
ex-confidence.
The signif¬

difficulties

$182 to $282 of excess funds for
buying a low-priced car requiring
down
payments of $620.69 or

amount of trouble.

business
fiurts

and $1,900

between $1,800

just to live on a scale comparable
with 1939. This leaves him with

spiraling prices, the incomes of all

bad. The ability of
leaders
completely
breeds

earner

yields of 2lk% to 4%. Stocks are
selling at prices that reflect fear
and
discount
a
considerable

continues

situation

will

until business began to recover

biles,

The business fundamentals have

contrast to investment

tgi r

cluding expenditures on automo¬

Stock Market

front-page
mews for the government to at¬
tempt to enforce the law.
Once
again the accumulation of savings
out of earnings in order to take
care of oneself may be more dig¬
nified than poverty and old age
pensions. Once again a balanced
Budget may be viewed as favor¬
able rather than feared as defla¬
tionary. Almost all of our past
progress was made during periods
of a balanced budget.
There is' even room for hope
that we may again learn how to
be prosperous. We must desire to
produce and be willing to work
as. muph aj^ifredesire to consume
and are willing to spend. It is as
important to create an environ¬
ment that encourages production
as it is to have a high level of na¬
tional income, and adequate sav¬
ings and borrowing power.

s^v;*£,

-v.-

dustries has to

Conclusion in Terms of the

and when it will not be

S;'i \

Thursday, December 5, 1945
to

the

(Continued from page 2909)

and

'•:

in
highly paid manufacturing in¬
the typical wage

then

&•?#.

v ",

probably 60%-70% at least,

•

*':V

IH&'CQMMERCIAI. & FINANCIAL CHRONICLE

2910

average

precentage
in

decline

total

business

which had materialized when the
bear

markets

The short 7l/z

ket

1923

ended

was

85.5 %.

months' bear

culminated

monthk before v the

end

mar¬

about

that

:short business recession and while

economist with the
tors Overseas

formerly am
General Mo¬

Operations. Mr. Mc¬

several years in*
of this
book..
While I have read many works;
about
inflationary
periods
in*
European countries, this manu¬
script dissects and summarizes the?
inflationary experiences in those?
countries and appraises the prob¬
abilities in this country better"
Niece has spend

the

preparation

than any other source that I have*
seen.

Therq: was one>table

in this?

book which I think should interest
you.

Iti^eSvth^f^ibs nfiiationaB

;only about--35% of the- business debt to national income and nadecUne had occurred .when the tioijal.: wealth'for. various; Euro¬
bear market ended, still stocks pean countries for 1922-1923 ancH
showed but little rallying power

the

subsequent

depreciation

iha

Ratios of Debt to Income and 'Wealth
1

Debt

PerCent
of

Percent

of Currency

Depreciation
From 1914 Parity
Dec.
June
Sept1939

1923

1927

Belgium

1922-23—

180

34.1

72.0

85.6

90.$

France

1922-23—

267

32.2

67.4

79.8

92.2:

Italy
England

1922-23--

192

30.7

76.3

72.5

84.$

Date

Income

Wealth

is not particularly signifi¬
48.$
5/0.0
5.2
245
35.0
1922-23—
cant. ;It ;hashadi a spurt due to
40.9*
0.0
0.0
6.4
47
United States 1922-23—
necessitous
ties.
buying,
speculative
80.0
257
♦United States 6-30-1945
figure for August was about 44% building and buying by those who
86.0
275
♦United States 1-31-1946
had the money. But you hear of
above the 1939 average
leyel, If numerous instances of large op♦Estimates based on Federal debt, normal income trend and n#
we assume that the increase
is
erators quitting because of theinflation above price levels of early 1944.
based

ceiling prices. That we
not portrayed actuali¬
However, its latest index
on

know has

year

Volume 164

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4548

the currencies of those countries

spending

at various dates up to
Sept. 1939.

quarter

It " gives, ' similar

United

States

ratios for this

January,

data

and

for

the

program..
probably is

should expect news or

the involving subsidies,'

brings

country up to last

rf;

The
third, this will result from pricing our¬
the earliest selves out of the ma& markets for

ing

antees

action
spend¬

a new

relief

program or guar¬
to ease credit terms. But

other developments could happen
Mr. McNiece arrives at this con¬
Which might have a similar effect.
clusion: "Since our ratios of debt
There are approximately $49 V2
to income and wealth are far
billions of XT. S. Savings bonds
greater than those indicated in the
outstanding. Suppose that through
foregoing data, it seems possible a desire to secure income to com¬
by comparison the dollar ulti¬
bat the high cost of living or for
mately may decline by as much
necessitous reasons the monthly
as 80% and
possibly more below
redemption of these bonds begins
its 1914 gold parity or to 20c com*;
;o exceed sales by a wide margin.
pared with the present 59c. If so,
This would portend a drain on
the cost of living in terms of
paper our
Treasury and it might not be
money would finally reach abotit
so easy then to sell 2V2% Govern¬
three times its present levels."
ment bonds to the public. Sup¬

because of

pose,

Inflation in France

business

our

re¬

cession, there is a rush to with¬
stock prices in draw
foreign funds and dollar

The record of
France during the recent

striking example
the fear

war

of how

of money

stock market. Here

can

potent
be in the

was

country
overridden, despoiled, practically
without foreign trade, plagued
by
scarcities, lacking in transporta¬

balances out of this country. Sup¬

the dollar begins to decline
to other currencies. We

pose

relative

can't be too positive just what de¬

velopment

that sud¬
investors to

may

occur

denly will activate
begin turning cash into equities,
tion
facilities
and harassed
by commodities or property. But, to
production interruptions. In 1944/ repeat, it is some such develop¬
industrial production in France ment as this which
probably will
was
as
low as 20% of its 1938
supply the key for opening the
level. I have not the facts, but it door to the threshold of our next
is
reasonable
to
suppose
that big bull market. It is quite con¬
numerous
companies must have ceivable that our next bull mar¬
passed their dividends because of ket will exceed all previous peaks
no

earnings or the uncertain out¬
look. Yet what do we find?
Why,
the index number of the market
value of 300 industrial shares in
France

published

from

134

1940,

to 222 in 1941, to
431 in 1942,-486 in
1943, 495 in
1944, and declined to 405 in 1945.
The

the

stage of over production. Our un¬
precedented
inventories
also
should be a cause of concern; par¬

ticularly

since

highly

seems

there will be
decline

ness

probable

substantial

prices

generally
are "out of line with
average in¬
comes. If the background oyer the
next year involved only a healthy
depression in a country with a
small debt and no important fiscal
problems, the task of a stock mar¬

that
busi¬

year.

part

the first six months

was

1939.

Our

Dow-Jones'

Indus¬

trial Index averaged about 138 in
first six months of 1939. It

the

•would have been at about 714 last

August if it had matched the
formance

market.

of
In

the

French

per¬

stock

one

generation the
French people have witnessed a
Very drastic depreciation of their

currency.

Consequently,

the

French

been

for

have

imbued

years with fear as to the value of
their currency. I remember talk¬

the

bank

manager of Lloyd's
Paris in June, 1937. In
clerk to tell him that

came

there

had been a rush to buy
English pound notes that day and
they were all out of them. Nothing
like that has ever happened in
this country. If. we had the same

distrust

our

currency as the
French have had in recent years,

it would

seem probable that our
prices
would
be
much
higher. I do not necessarily im¬
ply that we should have. All I am
attempting to do here is to point
out how powerful an influence a

stock

at all. We

in the midst of

are

period in which

our

appear

probable

now

depreciate

much

influence in

our

stock

market.

Expectation of Inflationary
Financing

What will be the

velopments

over

news, or de¬
the next few

months which may arouse invest¬
ors with
their very large liquid
assets to the

danger of a depre¬
ciating dollar inherent in our huge
national debt and inflationary po¬
tentials? If we appraise these cor¬

eral

would

come

that

this

bear

the investment in equities. That
person who in March invested in

third quarter of next year.

2883)

say

that

news

equities has lost in his dollar

ac¬

reason of the price
movement has lost in his buying
account."

•

the

Republicans

are

their

;

substantial in¬

materials and

com-

ponents.
Taken together with the scram¬
certain kinds of short in-r

ventory items,
spiral such as

in.o a
have not wit¬

you can get
we

nessed in

thq entire pre-war, war
and post-war periods to date.
So

far,

this

however, and I think

seem

ture

that

impor¬
flight

anything in the pic¬

would produce a de¬
inflation of the charac

structive

ter that

Germany experienced or V
what Hungary^ has gone rfhrougl* ,
with the pengo recently, of what
and

Greece

That

ished the

with

war

have

experi¬

because
our

fin¬

industrial

capacity, not only enhanced
intact—that

had

but

found

pro-,

portionate sources of raw ma¬
terials like copper and other itemsr
that we have no real balance of
external

debt, and that

have

a
greater degree of knowledge
about our own inventories and *

possibilities of supply.
There is not

much ignorance

in the market today as there was

Thinking of this high degree of
instability, the political agitator

the

superior knowledge of mar¬
and trends decidedly con*
tributes to a thrust forward or

kets

downward.
Our Inflated Price

there

Level

But we cannot escape the knowl-*
edge that we are at an inflated
level. One of the things which I

page

recession

there

what

was

likelihood that the fa¬

describe it gently—and the break
in cotton will at some future time

almanac

some

indicators of

reader

the

coming recession.
I am not going to make a fore¬
cast myself.
That is partly be¬
cause

know
cat

was

would

again.

burned veteran. You

not

sit

that
on

the
a

singed

hot

casters
least

there

will

temporary resting period
the middle of the year, and

if the coal strike produces
paralysis, and then will come a
period of readjustment—a period
of readjustment of prices and cer¬
tainly of inventory.
sooner

The

stove

The cat would not sit on

that

What

found

looking back

almanacking

was

overwhelmingly

this:

con¬

big

question

recession is

whether

is
be

normal

it turns into

When I made a projection, by
necessity, I found that I was only
likely to be 55% correct, and at
least 5% in there represents selfpride and egotism.
V
t:
i

just

not

1947
P.

were

an
so

marketeer

instead

idea peddler, I would
much

interestd

the

quarterly estimates of G. N.

I would be

interested in

what are likely -to be the forces

operating in 1947 which dominate
and produce the shifts in business
forecasters—business, government
activity. I would like to list these
—seem to think about the contour
major forces and minor forces as
of next year.
I

can

tell you what a group of

A Forecast of Next Year

the dollar sign to be 10%.

Second, that
to have

we are very

final whoosh in

sort of the final

gyration.

likely
prices,

see

them and then discuss them

individually.
The

Dominating

Forces

1947

nant force at the present time.

Second, I think that the price
gyrations which are taking : place
and

are

the make

are

and

continuing

The corporation, partly because
are
tied up in inventory,

funds

partly because it is impossible to
get materials for building, and

partly also because the market for
securities has not been par¬

ticularly good,

defer building
and
the
additions
to
capacity.
Then, too, that great buyer in the
may

what it

was.

There always have been ideas;
that the American economy could

operate full blast at something;
less than par in prices. The inter¬
esting thing about this Bureau of*
Labor Statistics concoction known
as

"Wholesale

the

Price

Index**

illustrated by the fellow
asked the porter what was

was

average

whe
the
tip he received. He said,

"One dollar." The fellow thought
government, is se¬
it was a little high, and when he
riously thinking of changing its
forward commitments, which is got off he gave him a dollar and
was profusely thanked. The por~
an
amphibious way of talking
iter said, "You are the only one
about the Republican platform.
who has been up to the average
Now, whether or not the fore¬ for a
long time."

market,

the

casters are correct about the 1947

Except in periods of war and
post-war, the American economy
has operated on less than the 192$
•

mid-year .decline, that old devil
Boom-and-Bust
every

will

sit

important decision affecting

business activity; and so I' think
that the boom arid bust psychol¬

j^^ag^whichds;;®

ogy is something
reckoned with.

tion—the real harm that it does-* *

that needs to be
/
"

Now, the real danger of infla¬
is by the inflation which it occa¬

the price
There
has been an increase of over 40%
abide by the free market, which
in the wholesale price index since
maans that you can buy today a
V-J Day.
$1,750 automobile for $2,750.
It has! never been possible for
Some wholesale prices are on
this economy to make a transition
the way up and some of the prices
of a magnitude of much more
are on the way down.
In other
than 20% without a serious dis¬
Speaking of price gyrations, we

have made

First, I think that the "boom
and bust" psychology is the domi¬

now

payment
large payments.

new

period of readjustment

stove.

any

over

down

a "national

decision to

sions.

I would say that

level is

now

around 138.

words, you have a familiar ex¬
perience of this period in the
whole cycle where you have de¬

Third, that the needs of Amer¬ almost equal importance.
flationary and expansion factors
committed to reduce Federal ex¬ ican business are such that inven
Third, I think that labor's eco¬ at work, I believe that we could
penses
and taxes. It looks as tory will continue to accumulate. nomic power and how it is utilized have a price
flurry, and I use the
though they would do this in the
And fourth, that with the rise is a controlling item.
word "flurry" because I feel there
first quarter of next year. It does in prices and
production coming
Above-all, the composition of a are restraining influences, some of
not seem reasonable that after
at this special time, Jhere will be $30 billion budget is of high rank. which will be evident after Christ¬
having taken such steps they a decided gap between what is
And fifth, certainly the Repub¬ mas, which will prevent the rise
would turn around immediately in offered of
goods in the market and lican victory and the Republican from attaining extraordinary pro¬
the second quarter and vote
the consumer's ability to pay.
program.
*
portions.

cient, Now

controls,

advanced

nomena to be observed is that the
in 1920, and a serious question
standard recommendation for pro¬ among observers is whether or not
tection against inflation has been there do not come periods when,

market will end before the second
or

increases,

early days of control,
happening was that con¬ adopts the old technocratic thesis
that there will be boom and bust believe
every
person
dealing
sumer
income,
represented
by
with business activity
increasing amplitude and acutely
miliar concourse may be repeated. wages, was increasing at a faster with
frequency and prepares to make ought to do from an almanac
Today, as contrasted to 1928 and pace than prices or 'goods tha
the, most of it should the occasion standpoint is to go back to what'
1929 when everyone was assured were available in the market.
cofne%to seize power durbig-fa the price level was attthfc begin?
we
were
on
In recent months there has been
ja^'new "plateau,"
breakdown.
ning .of; the European war, what
J
J
everyone seems to. hear the omin¬ more of a classical
example of in¬
The foreign governments are it was in 1940 and what it was
ous clatter of the Fdur Horses of
flationary trend in that the price
in 1941.
the Apocalypse. It may be that tags on goods have been increased aputely conscious of the export of
For the most part, I should say
they are already here.
while at the same time the take- unemployment potential, and their
One thing you find in looking home
dealings on international matters that it was in the mid ^seventies
pay has declined.
and the question of whether they at the time of the formation in.
back over the business cycles is
In recent months there has been
shall buy now or later are de¬ 1940 of the President's Natiorfal
that many times happenings have
a turn up, however, of the aver¬
Defense Advisory Committee.: It
occurred
unnoticed
which were
cidedly colored by it.
age weekly income, as represented
the distinct forecast and forerun¬
The individual," by taking rose to the eighties in 1941 and
by workers in manufacturing in¬
then was approximately ope hun¬
ners of what was to come.
thought, may defer the buying of
dustries.
ivu.r'.t
:
n ■ ■'
dred about/the time )fthat Pearl
It may easily be that the "las¬
a house or a consumer's
durable
The consensus of'these fore¬
Harbor came,.
situde" of the stock market, to
That. > js ^roughly
which
represents a
substantial
if

along it will

developments suggesting that we
are about to enter another period
of budgetary deficits will be suffi¬

basic thing

bring them about have, been high¬
ly accentuated. The banker today,

Oux Outlook at Home

.First, there is likely to be, de¬
help us to time theAo6ttOm of this spite the strikes, a temporary in¬
crease in activity running as much
bear market more
apeu^tely than as 5% in volume. It
may look by
any other consideration. In gen¬

rectly as they

been
eliminated and the factors which

it does not

cisions.

The Business Still Present
One outstanding

to decline. As far

off

were

creases on raw

China

vinced.

will

in the next five years and,

back of them

enced.

judge

taking

from the dollar and there does not

them, talks about
high degree of instability and
stock market will not follow the then
tightens up on credit. The
business trend
down
until
the investor ignores record
profits—
bottom of the depression has been the last
quarter profits of this
nearly seen as it generally has in year will be the highest that
other bear markets since
1900. peacetime or
any other time has
Rather it is expected that develop¬ ever
witnessed. He ignores stocks
ments forecasting or recording an
earning this year, ten to twelve
unbalanced budget, fiscal diffi¬ dollars, and
selling between thirty
culties or a1 depreciating dollar and
forty dollars, and wonders
will signal the end of this bear
what he can do to protect him¬
market.
To repeat,
that signal self against inflation.
is likely to be raised well before
One of the most curious phe¬
ceases

the second and

price

companies

many

the

can

prices to what they felt were the
proper prices and then coming irk

at least some of

one

now

the

the conclusion is reached that the

constantly.

when I

dollar

With

This
trend will be accentuated by a
depression, due to the unwilling¬
ness of out
people to submit to a
balanced budget and a reduction
of our huge debt.
Consequently,

depreciating

if so, this process will be the most

currency can
the stock market. I do think

are

extraordinary
tance, there has not been

servers.

count and

(Continued from

third'rounds

is the realization that the
savagery
of business cycles has not

dominant

our

out that it has been absorbed in*
to the shorthand of economic ob¬

That the only times I have been
correct haVe
been
those times

was

ruary, 1937 for Mr, Roosevelt, and
so T have been interested to find

currency

however, that ble for

the heading of a memo¬
randum which I produced in Feb¬

fairly
simple. But I have tried to em¬
phasize that this is not the case

or whether
a depression.
My own impression is that this
will depend very, very largely on
the wisdom of joint political de¬

rapidly depreciating
be

latest

number

potential *of surplus
the coming controlling
i

I would like to
say,

ket prognosticator would be

timing

fore the year, is up,;
* 4
Now,' on boorii and bust. I do
not want to claim
complete title
to the
phrase, "boom and bust."

Conclusions

and

goods as automobiles, and disposal,
housing. I could have cited Indus- decisions:^on monopoly by the
tries, such as textile and radio, Supreme Court, and the possibilwhich already are at or near the "ty of new
political alignments be¬

summarize my remarks.

As minor forces I would list the

bad

such

business

Summary

when the index stood at 518. The
base (equal to 100) for this index

ing

our

Let

monthly figure avail¬
able for this year is for August

stock

market, with
possible exception of 1929.

the

League of Nations advanced

2911

location.

what is a
price level as a result of
long study. 1 will give you a rule
I do not want to say

proper

of thumb.

I would say that some¬

thing between 110 and 120 is a
manageable wholesale price level
and if we could have kept at that
until

had met the post-war de¬

mands, our transition would

have

(Continued on page 2912)

2912

THE COMMERCIAL & FINANCIAL CHRONICLE

Thursday, December S, 19^6

that his Council of Advisors tell

Our Outlook at Home
(Continued from page 2911)
been

much easier one.

not seem to be

But
what

That did

possible.

pect

violent decline.

cant see

ture of this flurry in
prices
some

spiraling

bringing

pic¬
and

the

wholesale price index up to
per¬
haps 144 before there is a turn¬

ing. Then, accordingly, there will
be readjustments of individual
prices which will tend to pull the
index down.
When

that

index

has

been

pulled down substantially, it will
affect

the prices of other com¬
modities and you will get a down¬
trend in practically all prices.

-I
a

conceive of that as
being
of probable price action.

can

course

One Of the difficulties about the
descent is that even though 115
were a good
magic level at which
business management could ad¬
just over a period of time, on the
way down prices will not stop at
115.

You

will

through

that

and take the familiar rebound be¬
fore you have established a new
basis of operation.

;-m

equated demand by eliminating one—whereby you can save $5
some
demand.
Then when the billion. I might predict and guar¬
price breaks and you would ex¬ antee that tney do not do it.

there is a real danger in
happens to markets with a again

down and find
Then there are the veteran pen¬
strata of demand, sions and benefits. In looking for¬
completely
disap¬ ward to 1948,1 will give you a bet
they do not cut that much. Then

come

other

those

have

peared.
The person who was interested
m an $8,000 house is not inter-

there

the refund of taxes.

matter

contract

That

through

legislation passed by Congress itwords, S01X*
Then there is an item running
there is no great reliance ever,
in my opinion, to be put on what
up to about $15 billion for national
defense. Looking forward to the
is indicated as pent-up demand.

S?^rtin.even a $7>000 house or a
$6,000

house.

Demand is

other

function of the earn¬

prospect

ing power and willingness to lay
down a certain amount of invest¬

almanac

think when

turn,

and

over

this

see

you

what

down¬

look

substantial

obligations amount of backlog that would con¬
ior installment payments that can
stitute, and it be on a very high
come only from a certain degree level of principle, glorified public
of security about the continuance works and WPA, it will seem dement

and

of the pay

Co^e

That
I

take

economic

believe that if
economic

the

sirable

the third item.

now to

labor's

envelope.

rely
that

here

thought of.

maintained.

strong position against

these

the

something I have

There is

that

addition, $15 billion for nation¬

second round need not necessarily
be as vitiating as the first round.
But

have

al defense would enable us to take

power.

can

almanac

that we will have a period when
thing that every¬ the labOF laws will be amended/'
body must be watching is whether ;that the minimum wage biR wjlL
we
make plans or programs of not pass. There will be price gyrar
tions. There will be new oppor¬
some kind, whether it is by the
so-called deficit financing, wheth¬ tunities for merchandising.
er we use the elasticity there is
I could easily predict there will
iri the pay-as-you-go taxation, or be more business failures next
whether we rely entirely on the year
because there were more
free market. A quick decision one starts this year.
I could predict
that we will shift very largely
way or the other would be help¬
from the high degree of non-aurful—delay can destroy us.
consumption to a greater
A minor matter is surplus dis¬ able

him> Ahd.go

that

countries

little too far

are

some

pushing

in foreign af-

posal.

existent

of labor to

power

sup-

very

and that is the trend
to

monopoly. In
the lower courts and increasingly
in the Supreme Court this ques¬
as

tion of what to do about monop¬
olistic competition and concen¬

amount of durable.

I could predict that the present
housing scheme will break down*
But I won't predict these, I will
try to get around it by saying I

will

up.

meaning

and

trends,

say

the

aluminum and tobacco cases, then
we will have
precipitated at the

onset, the unresolved TNEC prob¬
lem of what do you do about du¬
opolies and oligopoliesin American
competition. We have seen how
can

on
how it

finance may run to $3 billion.

there is
time

when there is
insurance.
We have

come

ruling

seen

jpsjt

predict, but I will

back, however, to this:

come

it is not what somebody has pro¬

If the court follows the general

not

mention them to you.

tration of business organization is

tw,addi^n' the,fe

political

one

decision

that
The total frozen budget runs up
to about $25 billion. International

Another matter is

serious
of

one

new

can

come

when

ruling on r ailroads. Each
legislation is offered.

jected

from

past trend which,
The

should be of major concern.

hope of continuance of high level
of production is tied up with tw9
very, very important items, one
of which
and

this:

and bust

Boom

what to do about it, and the

second

the

how

what

manage

does as to its
out-go.
If you are

government

in-take

and

looking to

your

I suggest that

own

all of

adjustment,
going

you are

to have to become not just mar¬
r
?
is agriculture.
difficulty with the cur¬ 8?rf Johnkind of k°ld operation That s a
tnat
L. Lewis has under¬
honey.
As a recall it
I could
price level is that there are
predict, but I will not, keteers but budgeteers.
taken and there is certainly no the price bill specifies that we will
all sorts of distortions that come
kind of active fascist
guarantee certain payments and
or
com¬
from the excessive use in the war
munist power or threat of taking levels of prices to farmers for two
period of certain very precious
over in
case we
get to a tight years beginning with the January
raw materials,
plus the fact that
after the year in which the war
situation.
at the high level such as we
have
is
officially declared over. That
(Continued from page 2884)
The Labor Situation
been operating
recently, we are
is going to run to 1948 also.
bers, employed in purely war in- cars per year to fill the replacenot completely in balance on all
On the other hand, we have a
Public works runs about a bil¬
dustries, to reemploy in peace¬ ment demand. Until production
types of equipment or raw ma¬ completely new condition in the
lion dollars too.
That is a pork time
jobs.
terials.
pushes above this figure the ac¬
aemonstration
of
industry-wide barrel item. Your
guess is as good
We did face the problem of cumulation of deferred demand
I am not
predicting that the strikes with a potential of sym¬ as mine on that.
demobilizing upwards of ten mil¬ continues to grow.
price level will go through the pathy strikes. I believe we make
Then you get down to the reg¬ lion
men from the
All of these figures suggest that
armed forces
roof. I am
saying that we are al¬ a mistake if we think that the ular departments and bureaucrats,
and reabsorbing them into peace¬
the
automobile
industry could
ready at a very, Very high level labor matter is completely solved
inere are a number of fellows time
employment.
produce pars at an annual rate of
and one that it is not
possible, in by amendments to the Wagner here I can see them
along here
The Federal budget was going six million cars per year for four
my opinion, to contemplate as a Act and the passage of things like
and out here—who if they were in to be cut
by about $60 billion, years before saturating the de¬
workable, manageable level, and the Case Bill. I believe that you
I do not believe that from this could find a greater and wider Washington today, would be mad. with a corresponding drop in de¬ mand. The peak prewar year's
there is nobody who makes a bet¬ mand from
what had come to be production would have to be in¬
level we will make the transition use of the economic power.
ter bureaucrat than a business- our best customer
the Federal creased by almost 30% to achieve
without disturbance.
I want to talk again about some¬
You can make a bureaucrat
Government.
this level.
On the matter of
inventory, it thing which seems to me the pre¬ of him overnight. It takes a little
It is certainly no exaggeration
The accumulated shortages and
is quite clear that, first of
all, dominant political matter of the longer with a professor, but by to
the acute demand for housing are
say that never before in our
though we have upwards of $32 next several years at least. That
God, with a businessman you can history had we been faced by such obvious in every community. Here
billion of inventories, that is
hot is the $30 billion budget.
make a bureaucrat overnight. If an
impressive combination of dis¬ we are reaping the harvest of a
-out of line at all with the
In many periods of our history they were in Washington today I
volume
couraging circumstances.
bulge in family formation on the
of sales. Very
properly, I think, we had a small budget. The reve¬ believe Mr. Tabor would be hear¬
Nevertheless, the much-feared one hand and a legacy of lowyou could conceive of a $36 bilnue was derived from import duty
ing from them so I am not at all transition depression did
not, in level production for the better
lidh level of inventories as related
collections.
y optimistic about a great deal being fact, occur. Unemployment never part of a decade and a half on the
to the current

But the

rent

The Outlook fox Business

—

rate of

particularly

as you

amounts of

mous

production,

have

got

and processed items rather

than

done about this item in the bud¬

a$2Mo $30 billion

reached

get.

The Tax Outlook

enor¬

semi-orocessed

come

ex¬

penditure by the government, the

the big

central

store shelves.

^eh~Who the type oftaxation and
Pa}? the taxation. Is
what

inventories in the ware¬
houses and on the department

political question gets to

incentive

taxation?

the

Inventory Piffaculties
kind which stimulates markets or
The great difficulty with
inven¬
is,?f a for what
tory, of course, is this: It is pos¬ class'
sec°nclly, favoritism

AeJhtCh

sible to lose

more money with a
broad price change than
you can
make in any year/ and increas¬

ingly, managements will have to
consider this in taking on addi¬
tional business commitments.

Another is the question of how
much

borrowed

funds

are

purposes the money ls spent and

the timing.

I believe that

go forward our

dominant political

KudgeT8 WiU ^ W*
tWWTSh I\¥d time toI discuss
that.
that
do
I want to
say

actu¬

not

+Wili have a 20.% acrossnpnpfi vf CUt* 1 get when
pencil sharpeners thinkto dis¬

ally used for Inventory purposes.
the
Without making a
plug, I think
it was "Business Week" that had covering what that means in terms
a very vivid chart
furthering of consumer
recently of the
General Motors position and which
indicates the necessity of
re"
going to
the market as they did
today for

be 8 decided

adjustment.

teresferi m.eothingS Which has in"

additional funds.
One of the

interrogation that
ing the TNEC was

included, had

and

real need for a

that

«LmE??* ^uestloh of whether
Ti?S ? hlgh importance

did dur¬

to establish
that most major
corporations, and
General Motors was

had

long time,

stretched back to the
pre-1929 days, for going to the
market, that most of their expan¬
sion had been
made possible by
internal funds.

often overlooked.
it

come

tremendous

houses,

conscious

typically;
you be¬

unsatisfied demand for houses
and

the

prevailing

•

facf that

very, very

attention has been given to

» debt It has all been
taxation
the reducing 0f
*s aiways
tified.

interesting to

see

f faith has been jus¬

dispute

budget that Messrs.
Snyder got into, as
I think if John
Snyder published the exact in¬
take and out-go you would find
he is saving a few dollars. He has
Truman

and

matter of fact,

rible, devastating debf.

iJj™,aUoJntere.ste<1 inthisprob-

wSlihere »g the bu,d?«t down,
there
several mtriguing
vveii

are

here.

course

It is possible, of
t° take off that $5 billion

while

and then you
get the
pyramid whereby price has

nLIfZ01» are interested in econmy? there are a number pf bills
.

Congress—Jerry Voorhe.es has?

million.

National

in¬

running at an
annual rate of $173 billion in the
peak month of Dec. 1944, declined
to a low of $145 billion in Feb.
1946, and pushed rapidly upward
to

wartime
Even

that I talked

rate

about should gene¬

it has in other countries

and decide

not

stop after the

second and third round.

What

Pre-Bust

Planning?

The central question, however,
as I see
4t, and with which you
must be
tne

familiar, is what will be
planning or program for the

anticipated bust.

I think

will

call it

programming" for "plana nasty word. They abol¬
ished it in Washington.
was

conflict

ment situation.

That conflict

not

That

immediate
miss

the

postwar

mark?

depression

What

and
war

labor

of necessity went into
production. Prior to the war

residential

construction

the

important

few
never

was

one

industries
recovered during the

Thirties. Thus

must

now

strug¬

gle with a heritage of heavy de¬
mand, on one hand, and output
deficits of fifteen years when the
industry's new construction did
not keep pace with normal re¬
quirements. One student of the
housing problem has concluded
that we ought to build 1,250,000
homes a year for the next ten
years. This is almost double the
number that will be completed
this year.

Third, consumers were in a
position to make good-on their
demands. Incomes had been high
and were destined to drop less
;

from the than many feared .Furthermore,
the wartime era of high incomes
picture? It seems to me they were
roughly four in number* First, and. low supplies of goods placed
the technical problems of recon¬ the : average consumer in a better
verting our industries from war balance-sheet position than he had
to peace proved to be much less pyer enjoyed in his history. He
difficult than we feared. The war had more money on deposit than

elements

were

machines

were

omitted

moyed out and the

peacetime assembly lines were re¬
constituted
with
astonishing
speed. Both production and em¬

ployment, therefore, remained at
the unexpectedly
high: levels. This

was

other. During the war houses were
not
produced because materials

which

levels.

impressive: A chart
of retail sales covering the last
eighteen months does not conclu¬
a few items on his
books, like set¬ sively reveal just where our post¬
ting aside a little money for fur¬ war
period began. The war's end
ther loans he has to pay, and he
and the subsequent, deflationary
has some money he set aside for
influences, which I have already
appreciation in the "E" Bonds,
mentioned,
apparently
made
but I bet you Snyder is a deflater
scarcely a dent in consumers'
right now but of such a small
willingness to spend.
magnitude that you do not have
to worry about it.
II.
What you may have to worry
Now these are impressive facts.
more about is a flight from the
They pose some important ques¬
dollar in case this flurry of prices tions.
Why did predictions of an

every day that I see how the thirties
over two basic ideas of
Republicans are treating with in¬ how to handle a
large unemploy¬

gets
on national debt. and that
firm, fixed without repudiation of promises at
market. Buyers will follow
up for
same

little

the

ancing

I feel more like a states-

difference the question of that ter¬

impression

abroad that that is
a

this

wan

On the

way up, as you see
and familiarly in

nnt

t+4.? Lls
ittle

Above all, there is an item having to do with price and inven¬
tory and demand which seems to
me

for

terested me, as a person who had

outstanding pieces

higher economic terms about bal¬

payments,

ever

before.

many

For

families

the

held

first

time

substantial

amounts of savings bonds.
'

importantly,

consumer

debts in

unquestionably- was one . of the
greatest single breaks which came

thp^ormof instalment
Credit- andi.fpersonal* loans' had
been- reduced iblow:Jev$&$5yeh
With the pronounced tendency io£

our^wdy

these

liquid assets to be concen¬
trated in the hands of the reJa-4
if the boys in the ih certain critical areaa was real tively few, it still seems evident
back rooms are right, about the and it was enormous.- A few
years that jthe typical consumer was iri
fj.!
Z.
—"•a.'—'JI
mid-year—jt will come up long ago rJ 3 made so: * ealculationiil
before as a party the Republican about the postwar demand for ever ton before. All of these de¬
group has been able to make a automobiles. At that time I came velopments v-meant
that : heaver
automobiles potential ^ demand could become
wellsolidified and .well ordered to the conclusion th
statement of their position. It will on the roadwouldilfinber fen to heavy real demand. The* purchas¬
come up before Mr. Truman has
twelve million belovrnormal.
ing power was there.
:
The
fourth .development
was
complexly made up his....mind
j^ows^be'-ahtomobife:^
whether he can follow everything tmust/produce at lea; t.2 million the one that finally cast the decidresolved.

likely

issue

will

Second, the backlog of demand

come up,

'"*r-

-u.

--wiL-

ai.

at.

Volume 164

Number 4548

THE COMMERCIAL & FINANCIAL

ing vote. It was also the one which after ••'World War Iy
productivity
was
inherently least predictable. experienced a yearly increase of
People, in fact, were willing to almost 10 %. I see no reason why

spend their money.

similar performance may not be
of us in the succeeding

ahead
III.

decade.

Recently, however,
become
pessimistic;
skeptical.

have

The

somewhat

raised

Warning signals have
They
raise
certain

fourth
in

red

flag has been
of inventory
During July the

the form

recession
to

within the

eighteen

months

twelve

activity,

nomic

Paint prices are up 20%. Alco¬
hol, soap and rosin are up.
Stationery, office furniture, steel,

sustained

can

of ' when our new houses are finally
be deter¬ built and each with a new car

will

seriofis proportions will

29li

CHRONICLE

files and miscellaneous office sup¬

a very substantial
way! parked in front. After we get
develops in the imme-' through the current difficulties,
diate future. There is real
danger this process may well require the

mined in

plies

by what

that the very intensity of the de¬
mand in these crucial industries

better part of

then

decade.

what

productive energies

our

can

busi¬

be turned in order to sustain

are up

20%.

There is very definite evidence
the marginal products, some

that

have

which

been

carried

for

practically a non¬
appeared.
ness activity and employment at
profit basis, are going to be lifted
book
value of business inven¬
questions. Has V-J Day's sixtytories, according to the Depart¬ could only make more certain reasonable levels? Toward the into the profit brackets on the
four-dollar question been finally
ment of Commerce, rose $1.3 ibil- not only that a break would de? latter part of the coming decade crest of the current wave of price
answered after all? After a
"
<
"
lucky lion, and in August $1.1 billion. velop but also that it would be of this will be the major question advances.
break
in
getting
through
the
Some very drastic prices are, of
Preliminary ■ evidence
indicates more serious proportions when it with which business statesman¬
transition period, are we destined
that inventory expansion is con¬ arrived. In other words, our major ship must come to grips. There is course, ; reported.
Glycerine
is
now for some sort of
major read¬
tinuing at about this $12-$14 bil¬ immediate problem is still to little evidence yet that we are probably the outstanding exam¬
justment? If so, what kind will
lion annual rate, av rate of inven¬ minimize the further advance of very far along toward the answer. ple, indicating better than a 300%
accumulation.

will induce further price inflation.
This- would
be
regrettable. It

many years

be?

When

will it

long will it last?
ous

occur?

These

How
seri¬

are

questions. You bankers know

there

are no
simple answers. You
also know that it is the
particular

responsibility of the bankers

to be

of the soft spots in a busi¬

aware

ness situation.

The first red flag of substantial
proportions was the break in stock
market
prices which began
in

August. You will recall that dur¬
ing the last week in May the stock
market reached the peak of a bull
market which began four
years
and

month

one

earlier,

bull

market of considerable

longevity.
May 29 the stock market
along somewhat uncer¬

After

-wobbled

tainly,

exhibiting,

■definite

downward

however,
trend.

the

flatter part of August a break of
more serious proportions occurred.
TThere seems to be no conclusive

evidence yet of any major revival.

Second,

many agricultural econ¬
within recent weeks have

omists

been suggesting the
possibility of a
decline in farm prices,
perhaps to

support levels, by the latter part
next year. Since agricultural
prices in general are substantially
of

above these support
levels, a con¬
siderable
decline
could
occur.

Furthermore,
mentioned
the

wheat

one

long-range

mand

relative

ticularly
tural

for

de¬

this

area

usually
for which

outlook

supply is par¬
In our agricul¬

weak.

particularly

crop

red

flag of
impor¬

momentous

tance.

Third, we have become pro¬
gressively more discouraged with
our inability
to find the answer
to the baffling problems of indus¬
trial relations. After

«quick

technical

fortunately
reconversion,
a

heavy industry has ground down
to

low

four

levels

because of at least

separate

major work stop¬
a development of
significance. It in¬

pages. This was

considerable

volved a problem in which our
experience as a nation has been

limited.
On

issue

per¬

conviction is often expressed that
the efficiency of our labor force
is low and
forced

up.

optimism
velopment
The

to be

seems

all.

costs

productivity

force

increasing

Thus

are

Here some degree of
is justified. This de¬
was

depends

expected.

labor

our

the

smooth

meshing together of the complex
that constitute our highly
intricate industrial economy. This
we have tended to
forget. Forcing
cogs

our.

economy

into the mold of

production involved

war

major op¬
It was hardly to be ex¬
pected that the peacetime design
could be effected quickly. Even
after each individual plant was
a

eration.

technically

reconverted

long

threading our supply
marketing lines was bound to

process

and

ensue.

The

uneven

terials

and

parts,

flow

ma¬

bottlenecks of
and

starts
to

—

some

these frustrations
extent

were

inevitable,

even
after •peacetime production began
to grind ahead.
But all of them
tended to hold down the capacity
of

our

economy,

and

our

labor

force, to produce.
Our
war

decade

experience

continued
The

the

last

illuminating. During the
following 1919, there is

enormous.

major part of the

1921

and

costs and prices. Even the intense
demand for critical durable goods
could

choked

down

this

(both exceed¬
ingly sharp) was sparked by pre¬
viously heavy accumulations of

strong

upward' cost-price

should

continue.

inventories^ .The question, there¬
fore, arises as to whether this

would then be the inevitable

current

inventory expansion

may

not presage a similar development
in the months ahead.
On this
that

inventory question

cannot

doctrinaire.

total

much

inventories

are

cannot

On the other

were

inventory

ex¬

sustained

for

considerable period

any

true

It is also true that

war.

the current rate of

pansion

one

higher level than they

before the

of time.

hand, the aggregate

volume of inventories does not yet
seem to be materially out of line
with the current volume of busi¬

activity. Inventories are also
spotty. In some lines they are ex¬
ness

cessive. In other

lines, particularly

durable goods, they are low. Some
increases are involuntary and oc¬
cur

because goods in process are

held

for lack of parts.

It is not easy,

any

therefore, to draw
conclusions about the inven¬

tory

picture.

This

much

rent

volume

total

does not

inventories

to be

excessive, the
rate of increase taking place is at
a pace which cannot be indefinite¬
ly sustained.
Whether a smooth
liquidation of excessive inven¬
seem

tories

increase

Fifth,

can

match

the

inflated

current

values of urban real estate
well

to be

currently
highly debatable.

lines is

scarce

lines

some

continued

the

seem

road to taking

the place of the same difficulties
which occurred after World War, I
with

heavily inflated
and heavily mortgaged farm real
estate. A survey which we con¬
ducted three months ago revealed
that on an average urban real
estate was selling in Minneapolis
for prices about 96% higher than
respect

outset of the

priced units

Lower-

war.

were up

about 120%,

and

higher-priced units by some¬
what less. A substantial amount of
these

transactions

involves

bor¬

rowing.

While it is probably true
that the lending institutions are
still generally protected by sub¬
stantial margins, any considerable
readjustment of values will dras-+

affect the equity which
buyers now have in these
properties. Nor is the new builder
in a much more favorable posi¬
tion. When his house is begun he

tically

current

knows
limits

when

neither

completed

nor

how

structure

within

much

will

broad
completed

even

the

going to cost.

this

does

all mean?

Are

living in a giddy paradise, an
of unprecedented prosperity,
yet one with warning flares pop¬
ping all around? Without in any
sense
attempting to predict the
shape of things to come, these
comments 'seen* to be in order.
we

era

| First, the prediction of

major

recession does bump

squarely into
the very real accumulated de¬
mands for automobiles,
houses,
and

commercial
of these

construction.

cases

is there

douche

The

spiral

traditional

sharp recession

con¬

clusion.
f

the

rapid rise in inventories. There is

danger that we shall be misled
by the very real shortages in some
lines, and a total volume which
does not yet seem excessive, into
overlooking
some
lines
which
even now are unduly high.
Two
points
merit
emphasis.
First, the current $12-14 billion
rate of expansion of inventories
be

cannot

Second, on
upswing inventories seldom
too high. It is only in, the
cold, grey light of a business de¬
cline that they become excessive.
It is also well to remember that
while "inventory recessions," such
as
1921 or 1938, have tended to
be
short, they have also been
quite sharp.
the

seem

What

be made of all this?

can

feeling is that in the im¬

own

mediate future the price level will
rise still further. When the rise
will

halted

impossible to
foretell. Unpredictable and capri¬
cious events often pull the trigger
on

unbalanced economic situa¬

tion.

On the other hand the next year
should see a large proportion of

nondurable

the

goods

industries

concluding the task of filling the
pipe lines. This means that cus¬
tomers will have to take

stuff off the counters

much

currently
plus the volume of goods now
going into inventories—or 'total
will

demand

see

suggests one con¬
clusion. Lagging demand for nondurables will mean price declines
for many types of products within
the

twelve

months.

Such

price decline in non¬
durable goods could induce an
echo weakness in the prices of
durable goods. First, it would in¬
evitably induce considerable un¬
certainty and caution on the part
of

businessmen

both

Second,

sumers.

for

nondurables

and

will

make

the

high prices for dur¬
higher and will fur¬
ther induce postponement of de¬
mand. But it is doubtful if price
seem

declines in the durable industries

will be
the

large

pronounced because of
unliquidated deferred

demands which still face many of
these industries*
This conclusion

seems

to emerge

out' of' the

welter of argument:
price recession next*year is a
possibility. How sharp it is de¬
pends heavily
on
how
much
higher we go. And its duration
will be short.
A

somber

evidence to suggest that the effi¬

recession of any substantial pro¬

the

portions
tinues

note.

recession

within

pose

if activity con¬
these crucial in¬

high

dustries. /
As a matter of fact whether a

controls

as h
production!.
Many jobs are available that can¬
not be filled.
Office employees
and skilled workmen are scarce;

removed,

markets became rather hec¬

prices will level off within a few
months, and then declines may be
expected.
Some reductions are

There seems to be more unskilled
labor looking for jobs.

already indicated.

Wtest Coast situation.

Little change is reported in the

reports indicate
Inventories

turning to £ work, which tends td

climbing.

were

days
There is an in¬

100%

in the number of

crease

indicating higher

reports

General
In

inven¬

riddle

solve

how

the
eco¬

good.

inventories.

ment in industrial business would

being combed to re¬
duce wherever possible. Many un¬
filled orders of long standing are
being canceled.
<
;
\ !
The inventory question becomes
increasingly important as we pass
from a period in which it *was
impossible to build up inventories,
because of shortages of materials,
into a period where at one and
the same time the possibility of

follow if the uncertainty of labdt

and

reduce

Stocks

balance

are

building inventories and the dan¬
ger because of the price situation

conditions

were

removed,

Purchasing agents are beginning
professional buyers
with the old, "buy at any price"
practices becoming exceptional. '
Merchandise
buyers in somd
to function as

lines

and

reported cautious to the

are

point

limiting

commitments

canceling unfilled orders.

•

Chester Terrell Now

must both be considered.

Buying

With Wesfheimer & Co.

Policy

(Special to The Financial

Little

CINCINNATI,

Terrell

has

in a

with

cau¬

it can be summed up
word, "caution," and more

326

Walnut

the

New

CHRONictjt)

OHIO

—

become

Westheimer

associated

and

Street,

Chester

Company,

members

tion.

Buyers are beginning to tighten

and will carefully watch the
from here on. High prices
will
further
a
hand-to-mouth
up,

trend

policy.

are expecting price
protection on long-term

Many

decline

commitments.

,Vc

...

Industrial buyers are

gradually
returning to the old fundamentals
which -allow
sales

conditions,

m arket

production needs,
control

inventory and
the purchasing

policy.

Specific

Commodity Changes

Following the end of OPA con¬
trols, many notices of price ad¬
vances

were

received.

needed
on

items

will

now

the market in

satis¬

factory supply.
'
Special steel sections advanced
$5 per ton. Further steel advances
are expected.
One steel company
has announced further advances
on

pipe; others are expected to

follow.
Nonferrous
vances,

and

Cincinnati

Mr. Terrell was
formerly manager of the trading
department for L. W. Hoefinghoff
& Co., and prior thereto served ifc
a
similar
capacity with
Field,

Richards,

and

Co.

Edward

Brockhaus & Co.

M. & Woodward Willi

Henry Dahlberg & Co.
TUCSON,

ARIZ.

Woodward is now

Henry

Dahlberg

—

Malcolm C,

associated with

Co.,

East

products are higher Pennington Street, as manager of
Mr.
copper, lead and zinc ad¬ the municipal department.

:M-

;,';y\ ■«s

Manufactured

15%

York

Stock Exchanges.

reappear

Chester T. Terrell

Buyers,

however, feel this is a temporary
situation.
Many major items re¬
main steady despite decontrol, and
it is expected this stabilization
will improve after a brief burst
of uncertainty and will help the
over-all purchasing situation.
Scrap prices have risen rapidly,
and it is felt that many badly

leather and paper

attempt

business

merchandise is be¬

when

general,

However, purchasing agents are
ing received.
However, an un¬ becoming more ^ cautious aboiit
balanced condition continues. Raw prices.
Demand and production remaiii
materials inventories have not in¬
creased proportionately with sup¬ high, but the scarcity of some ma¬
ply items that are finished prod¬ terials and the fear of strike irt*
ucts.
terfuptions make conditions very
A general
improve¬
Buyers, however, are trying to uncertain.
tories.

due to

perplexing

In Canada

strikers are re¬

make more work for others.

Inventories in the last 30

year, though it could
difficult problems, is not our
major
battle.
That will come

help is reported

drawback to increased

tic but, generally, buyers are not
too alarmed.
It is expected that

con¬

price decline

relatively

force

can occur

OPA

With

can

in two ways.

First, an out¬
right price reduction; second, a
substantial upgrading of quality.
occur

price

Employment

Lack of

any,

ciency

of our industrial
labor
increased by an average of
5 to 6% per year. But in each of
the second, third, and fourth years

erate.

flow of durables will also be

This

reces¬

„

nave" ween mod¬
There is no indication of a

change in policy among
industrial buyers is reported; if

peting for the consumers' dollars.

price

inflated

In
Canada
little
change
ill
prices is noted, except in the case
of imported items, ■ *
;
: %

inadequate. But
just at this time there is every
reason to expect that an increased
com¬

caused

structures.

runaway'market.
some

considerable

sions

increases

pos¬

how

enced

(Continued from page 2887)
items

Basic farm commodities (cotton,
corn, wheat and rye) have experi¬

Survey Reveals More
Optimism Among
Purchasing Agents

sustained.

It is, I trust, not inappropriate
sibility that the backlog of de¬
mand can immediately be liqui¬ to
conclude these remarks• on a

dated. It is difficult to

increase.

Second, the soft spot which, in

my judgment, bankers would
well to watch very closely is

ables

IV.

What

cold

seems

evident. While in general the cur¬

none

after

would

the 1938 recessions

at the
I

sonally optimistic. The pessimistic

slowly, if at

tory accumulation which if long

to 20%,

items

Woodward

steel,

have advanced
,

had

formerly

connected with Stifel,

been

Nicolaus 8c

•

..J,

If" I

•

>»;

1 1

•'•„'>..'

■.

•

f'C'.'' •.! .•>

.'•••'..•/• •' •<•.••

■•■ ,••;■,.'

THE COMMERCIAL &

FINANCIAL CHRONICLE

■

■■

ly the strategic soil, mineral
phosphate., '4y'4:4; f ■ 4?' 4

Dangeis of Centralized Big Government
rule, the ideal of a flourish
ing community and state govern
ment.
But following close upon
this

prelude

disarming

are

both

phone, swift, transportation
within
the
United • States

and

most complex skein, a

fab¬

quite beyond the comprehen¬
sion of the ordinary citizen,
a

ric

complicated fabric that is no long¬
er separable and hence national in
its every aspect.
What happens

California, affects
Maine,

in Sacramento,
a

transaction in Portland,

and

I need not repeat the

on.

familiar thesis.

•

enough.: But
observe what conclusion is drawn
from this familiar* picture!
It is
this: That since virtually every
true

all

This

problem has become a national
problem, therefore every phase of
our
life must inevitably be ad-*
ministered, nationally from Wash-,
ington.
; Since—as the argument runs—
administration or state ad¬

V local

impos-*
interrelation
complete, therefore Big Gov¬
is

ministration

obviously

sible where national
is

inevitable.

ernment

are

short, that Big Govern¬
the price that must be
paid for the wonderful technical
development of this nation.. ..
in

told,

ment

who

Those
suade

to per¬

trying

are

that Big Government is

rarely if ever defend
centralization.
Their tack is quite
inevitable

deplore cen¬
tralization just as much as any of
the rest of us. ■ They usually ad¬

different one; they

administration

that' remote

mit

from, Washington

will

They

is not desirable.

with you

agree

even

that the withdrawal

and

the

United

States.

The

decisions out

of local com¬

munities and out of the state into

bureaus

in Washington is

unfor¬

tunate and corrodes our democra¬

But they say we
before the

tic institutions.
bow

must

inevitable

heads

our

trend

toward

ization. They tell us
submit

because

central¬

that we must
the

nation

Why?
Not so that those
in Washington may reverse this
unwholesome trend.
Not so that
they may decentralize and dele
gate to the agencies of the states
V

Not at all

and the communities.
but

that these central govern¬

in gen¬

They deal with naviga¬

tion, flood control, electric power,
the problems of our soils and for¬

TVA is

out

carry

such clearly federal
policies through the

functions and

medium
state

than

and
'-i.'

TVA

and

local

agencies

ities.

community

instrumental¬
,

„

•.,

decentralized-in more
sense.
First,: it is a fed¬

one

eral

concrete demon¬

stration that ways and means can
ministration of many of the func¬
the

central

government.

of the public's chief
interests in. TVA these days is as
Indeed, one

practical,, living proof that despite

-may
make the interrelation of our vast coun¬
administration try, despite the need for national
policy on many matters heretofore
more effective and efficient—more
nearly uniform in its nationwide local, the administration—the ac¬
tual carrying out of those national
applications.,4';4
policies—can effectively be placed
At the outset of such a discus¬

centralization

important distinc¬
It is not a
new distinction.
But it is one that
is often overlooked.
It is funda¬
sion

this

tion has to be made.

proposition I am
submitting, namely that Big

mental
here

the

Government is not

inevitable.

the hands of local community

and state

agencies and instrumen¬

talities. TVA's methods of decen¬

administration may well

tralized

to be one of the most im¬
portant, if not indeed the most
prove

important product of that experi¬
ment

the

44?

of National

Policy

'/■

Many of our problems are na¬
Nothing could be more
obvious. Problems that once could
be dealt with as a matter of local
tional.

public
is

development corporation,
agency of the central gov¬
It

ernment.
gress.

charter.

its

Tennesee Valley.

mind that the TVA,

Bear in

Local Administration

was

created by Con¬

charter is a national
Its responsibilities and

Its

powers

-called

was

for

It did not send fed¬

central staff.

eral employees into the

ties

onto - the~f arms

and

Tennessee

the

Valley. -;.TVA rejected

the method of further centraliza¬
tion

and

adopted

quite differ¬

into

entered

ent^-course.

derive from national

than

Thursday, December 5, -194$

decade of

is to aid in the development of'
private industry through research:
and
exploration respecting the
natural

experience

resources

of the region soy-

that they can serve in raising the'4 '

the level of 4.4

level of income and
economic

activity of the citizens |V

region* This, too, as every-:
knows, is not a novel function
government. jQne-r
recalls the Department of Com- 4
merce, the Department of Agri-;:
culture, the bureaus of the De¬
partment of the Interior,
and ^4

of the

one

of the;:federal

have

others

communi

joint program, a single program,
with the state colleges of agricul¬
Here
then
are i< characteristic
federal
functions.. Nevertheless ture, the state extension services,
the county agent system—existing
in virtually every aspect of the
TVA's activities, TVA'S manage¬ agencies* Under this arrangement
it was agreed—and there is now
ment
has found it ? possible to

be devised to decentralize the ad¬

tions

this

ests, and research.

corporation directed not from
persistently overlook. It is a dis¬
Washington but from the Tennes¬
tinction which % unless observed
see Valley.
It is not incorporated
and respected by corrective ac¬
within any Washington bureau or
tion in the way of decentralized
department.: This is the first step
administration of national policies
of its decentralization.
can lead to the progressive atro¬
But there are other steps, made
phy of most local and,state gov¬
possible by the first, but of even
ernmental functions.
greater importance. The TVA has
The distinction between author¬
by persistent effort delegated and
ity and its administration is a thereby decentralized its functions
vital one.
For a long time all of
so that most of them are carried
us — administrators, citizens, and
out not by federal employees* .at
politicians —- have been none too all, but by local and state person¬
clear on this point.
We have as^ nel. This is effected by scores of
sumed that, as new powers were
contracts setting up joint partner
granted to the government with ship
between TVA' and
cities*
its seat at Washington, these pow¬
towns, counties, state boards of
ers therefore'must also be admin¬
health, state conservation commis¬
istered from Washington. We have
sions, city power boards, farmers'
taken it for granted that the price
cooperatives', y county extension
of
federal
action
was
a
topservices, state agricultural col¬
heavy,
cumbersome administra¬
leges, state geology departments—
tion! Clearly this is not true. The
I could continue .this Jist almost
problem is to divorce the two
indefinitely.
"
I.
^'
ideas of authority and administra*»
To sum it up let me say this:
tjon of authority.
that there are few functions of the
It is at this point that many of
TVA which could be executed by
us
as
public administrators are state oh local agencies and per-?
falling short of our high profes¬ sonnel where that has not been
sion of democratic faith.
Effec¬
the course chosen.
TVA's policies
tive techniques of
decentraliza¬ are national. The execution of its
tion—not better ways to central¬
policy is largely in local and state
ize—should claim our first atten¬
hands.
tion.
The very first question we
During a period of American
should ask ourselves is: c "Why
cannot there federal activities be history when centralization of ad¬
ministration in Washington has
decentralized; if not in .whole,
increased at a rapid rate, the fact
why not in part?"
The problem
beyond, challenge
of first concern we must ever keep is, T believe,
that in the Tenessee Valley state
in mind is: does this or that fed¬
and local functions of government
eral program really have to be
have
grown,
in diversity and
centralized and to what extent?
strength, more rapidly than in any
Here is the real job to which our
other region of the United States
students and experts in public ad¬
ministration should be addressing during the same period.

The

farms and among farm¬

ernment.

central govern¬

frequently

cation

ers—all

eral, and taken one by one, familier and long-time responsibilities
and functions of the federal gov

policy, is a distinction of funda¬
mental importance.
And it is a
distinction the apologists of Big
so

region of substan¬

and their development are

administrators

ment

practical tests and

by
embracing parts of seven
the Southeast. £ These TVA's federal mandate.
1j ■ But to carry out-this responsi-?
functions and these responsibil¬
ities of TVA for natural resources bility TVA did not set up a large

decentralized or localized
administration of that national

better and better tools of govern¬
ment.

essential that there be

was

made extensive

states

and the

Government

tial size,

funds.

But because the

resources

effect now
have repercussions on other parts
of the country •— and the whole
world for that matter—that did
not exist in an earlier stage in our

local in their scope and

technically to such
a point that centralized adminis¬
The record of TVA's more than
themselves.
And it is a continu¬
tration is the only means whereby
ing,
day-by-day task requiring 13 years demonstrates that in the
a complex modern national econ
of develop?
the focus of administrative atten¬ broad federal field
omy can be governed.
It is that
tion upon every opportunity: for ment of natural resources—of riv¬
or
chaos.
They assert that, we
decentralization as it comes along. er, land and farm, forests and
must trust our public adminis¬
minerals—there is a resasonable
trators in Washington with more
Example of TVA Administration and workable alternative to cen¬
and more power of decision, with
tralized
administration ' from

has developed

i-J

demonstrations

pf the value of
responsibility of TVA, as defined
new phosphate fertilizers we were
through Congressional action de¬ by Congress, is to develop or aid
developing in those- laboratories
termine such a national policy. the people of the Valley to de¬
Such testing, demonstration, edu¬
Problems
once
predominantly velop and to utilize their natural

throughout the world make it nec¬ ment through the Congress must
and should determine upon a na¬
essary — though regrettable — we
tional policy in a particular field,
are told, that the older ideal must
give way to the facts of of modern it does not by any means always
life.
Over
and over and
over follow that the administration of
■'44 again the story is repeated of the that policy must also be on a na¬
complex interrelation, the intrica- tion-wide basis, must also be cen¬
c i e s,
the
interdependence
of tralized. This distinction between
American life. The nation has be-; a centralized or national policy
come a

defined in the Constitu¬

powers
tion of

policy or state policy now defin¬
itely require a national policy
The
central
government
must

of mod¬
ern living
make this older ideal
merely nostalgic.
Our technical
development. These often require
society, so they say, has made it!
the enunciation of a national pol¬
obsolete and unworkable. The air¬
plane, the telegraph, the tele¬ icy and expenditure of Federal

told that the complexities

■;.; ;

nptrients—chief¬ agencies.. Part of the TVA's task';

This meant soil

home

<•.■;•; ;i:;-..;',' -M-;•••■, }/,,•„••;■;■ ?,*«•*•--'

■'.*•!■.-. vVs-:

■'

2914

(Continued from page 2897)
that
proposition.
Indeed, how
could they? We are told that these
are
"fine
ideals"—the ideal of

•,,!'■»{i\t/.';\m'.-v.--v.

,"f vr.y-.v

v/i '• "'

had

comparable

oh-4

jectives and responsibilities for

»4

considerable number of years. . * ,•
These research and resource de-.

velopment activities of TVA are ;
as fully as possible carried out by
a combination of TVA sponsorship 4';
with actual execution in whole or.

part by various state agencies. Assy
a
matter of legal authority all
activities

such

could

;

been?

have

carried out by the TVA directly*.;*
A
further
illustration:
Wheii
.

arrangements — that TVA began to harness the rive-r j
the state extension services, the by building a series of dams, many
county agent system, and the state communities along the river were
under these'

colleges of agriculture would un¬
carry forward the ac¬
tual demontsration hnd
testing

directly affected in many ways-?
The flooding of lands wrote new* 4

together with the agri¬
cultural ^education <aspects
in¬

trade

areas;

their

usefulness

dertake to

program,

volved, within the counties of the
Tenensee. Valley.
Thus a federal
program and state and local pro¬
became
one
program,
manned by r and1 directed by the
local agencies.
;
gram

activity of TVA
deal with the
not ^federal
em¬

In this federal

the

experts

farmers

ployees.

who

are

They

the

old^4

the

families

unflqodejd V

Nearby TVA construction

areas.

camps

brought large numbers of

pe 0 p 1 e
into counties who^e
health and school services were

inadequate for the heavier load. *.
TVA did not view these prob-;

local

agriculture and of the state and
county extension systems, >4 They
are
selected" by those state and
local agencies* not by TVA.- The
TVA agrees to reimburse the local
agencies for the salaries and ex¬
penses of these local experts who
are carrying out a national policy

which remained in the

state colleges of

members

place

in many instances;
bridges* schools and! churches had;
to be relocated or reappraised In 4 ;

lems

are

the staffs of the

boundaries sin

isolated bits and pieces pf

communities to
as

urged the
these problems

disruption.
see

•

opportunity to replan their %
as a whole in the light

facilities
of

new

physical setting.^ Rut

*
brought
with their
state planning boards-—and where
they didn't exist we suggested to
and responsibility.
the state that a planning board ber
Operations of TVA Power System set up to assist the local commu¬
nities.
TVA provided modest fi- ? 4
Another illustration is afforded
TVA did not want to make plans
for

community.

communities together

TVA
than 20

by the TVA's power system.
has

system bof

the

Tennessee

dams

on*

Those

structures

carry

River*

out fami¬

flood

responsibilities—the
of navigation and
control on an interstate

river.

These

liar

federal

development

are

multiple purpose

They provide a navigable
channel now being put to exten¬

dams.

sive

use

merce

the

and also

barges

a measure

of com¬
of flood

unprecedented
in
this
country.
The
same
structures

control

nancial
tracts

assistance

through con-;
boards and 44

with the state

encouraged the communities iri
turn to establish local planning
boards to work

with their newly 4

created state agency.
These arrangements, as you will

community plan-' '
the local
people with TVA standing by for

see,

brought

ning into the hands of
technical

guidance

and

advice

through the state, and then

only

when invited to do so.

effective¬
ness of these contractual relations
through their control of water
is the
financial support given;,
generate huge amounts of electri¬
these agencies by their state legis¬
city.
latures.
In 1935 there were rto
Congress
directed
that that
state appropriations for this pur-/
electricity should be sold.
It is
pose either in Tennessee or in"
customary in private utilities that
Alabama.
In 1946 the state plan-,
electricity be generated, trans¬
ning
agency
appropriations in
mitted,
and distributed to the
these
two
states
amounted to
homes and farms and factories by
about $200,000. And in these two
a
single company.
That is the
states alone there was an increase
customary way.
But in the Ten¬
in the number of local planning
nessee
Valley the disposition of
commissions from. two in 1935 to ■
electricity is divided up.
The
35 in 1946.
TVA, a central agency, operates
the generating plants and 6,000
State Participation
miles and more of transmission
These relationships with state,
lines
that
carry
the electricity
One measure of the

Washington. The widespread ap*proval of the TVA among the peo¬
ple of the Tennessee Valley region over an area as large as Great planning commissions have yield?-*
is attributed by the people them¬ Britain.
But the distribution of ed other results. In several of the
selves largely to this method of electricity is decentralized.
One states where the development of,
decentralization.
'
hundred forty- locally owned, lo* industrial resources, is a function t
of .the state planning bodies, co¬
A
few
illustrations of TVA tally: managed, locally Hnanced
operative studies with TVA have 4
practice
will make the point distribution agencies carry - the
the city gates uncovered new industrial oppor¬
clearer. Agricultural development; electricity from
tunities based upon the special
and control of water on the land, where TVA delivers it wholesale
local resources of the region...
4.,4
for example.
The TVA has a-re¬ in bulk to the ultimate consumers.
In a similar way several of the
Here-again an alternative was
sponsibility in respect to the der
Valley states are now showing!
velopment of the land of the Ten¬ found to centralized administra¬
tion./ An agreement between TVA, leadership in recreation develop¬
nessee Valely, as one of its.basic
ment from which a whole new in¬
natural 'resources.
Part of that the federal agency, and these 140
dustry is emerging.
The Tennes¬
statutory responsibility arises out cities, towns, rural cooperatives,
see River is now a chain of beau¬
of
the v use
Congress
required fixes broad general policies, of
tiful lakes abundant with fish, As 4
of general financial
TVA to make of the great labora¬ accounting,
dams were; built many towns and ;4
tory
and
production plants at policy, of tax payments, and deter¬
counties suddenly saw an unpre¬
Muscle Shoals. These plants, built mine the level of rates subject to
But the ad¬ cedented opportunity for- waterduring World War I for munitions mutual adjustment.
front,. park, and water recreation
purposes,
(and incidentally they ministration of electricity supply
development. To assure the pub- ;
has been effectively decentralized.
again rendered service as muni¬
lie—the taxpaying owners of these
Let me present another illustra¬
tions plants during World War II)
beautiful lakes—the fullest oppor¬
—these munitions plants TVA was tion of how in the Tennessee Val¬
tunity to enjoy them, the TVA
directed to turn to the benefit of ley federal policies, federal func¬
worked with the State Depart¬
agricultural development in the tions, federal responsibilities are ments of Conservation (and .in
Tennessee Valley, and elsewhere. carried out through local and state
.

Volume 164

some cases

lish

such

Number 4548

THE COMMERCIAL & FINANCIAL CHRONICLE

helped the state estab¬ Only as the consequences of ad- purposes.
We
are
threatened,
departments) to assist ministrational errors become more however, with an even more dis¬
astrous consequence, the loss of
exploiting the localized, can we expect citizens

the communities in

recreation
new

possibilities

these

Great Lakes of the South,

•;A final illustration: TVA's

cial function
im .the field

as a

to know which rabbit to shoot.
;v

spe¬

regional agency

of mineral resources

development has been

to focus at¬
tention on the efforts of the small

Most people,
to the

service

centralization

1 say, give lip

hazards
of

over-

the

Behind the Iron Curtain

people's confidence, the very

foundation of democratic govern¬
ment.
:
When

administration.

Most people are concerned
the trend, the way in which

2915

confidence

the

com¬

about munity gives place to uneasiness,
cities fears develop thaf the granting of

(Continued from page 2887)
this, and then make bur own po¬ where, and the Kremlin's fear of
economic
and- military its own people is so deep, that
litical,
there is, In my opinion, no possi¬
plans accordingly.
'
This expression, "the Iron Cur¬ bility of change outside a com-;
tain,"- was first used by a corre¬ plete collapse of the Soviet totali¬
spondent in the days of Adolph tarian system. So it is the heightHitler, but it has become widely of naivete for people, who might

further powers may be abused.
Now, Ridicule of the capriciousness of
turer.
fiery speeches about states' rights some government officials takes associated^ with
Sov 1 et Russia
ize all of the state arid local facil¬ and local home rule are easy to the place of pride.
Democracy
since Winston Churchill on Aug.
ities
for minerals
development make. Finding workable alterna¬ cannot thrive long in an atmos¬
and to draw upon the broad na¬ tives is harder and less showy. phere of scorn or fear. One of two 16, 1945, spoko to the House of
Commons about the blacked,-out
tional fund of
knowledge and What, is needed is not .emotional things ultimately happens: either
areas
of
eastern
Europe.
Mr.
services
available from
Outbursts but rather a clearer rec¬ distrustful
citizens,
their fears
minerals

operator and manufac¬
TVA has helped to mobil¬

federal
minerals, agencies.
In connection
with one minerals
project, TVA
enlisted five public agencies, none

of which could have done the
job
alone, and helped to demonstrate

that native
prepared

green

could

mica properly

serve

well

imported ruby mica in the
facture

manu¬

and states have lost functions to

the

Federal

Government.

radio and other elec¬
trical equipment,
For over-centralized administra¬
This will help
keep hundreds of mica mines tion is not something simply to be
Operating in the Tennesese Valley. made more palatable, more effi¬
And the experience in this in¬ cient, and better managed, i It is
stance, gained by the state agen¬ a hazard to democracy. It is a
cies, equips them to advise these hazard to freedom. And for those
private mine operator in a helpful interested more in results than in
method. over-centralization* is a
productive way,
Now, in pursuing these decen¬ bungling way. to do a job. / Cen¬
tralizing methods, the; TVA has tralization at, the national capital
encountered plenty of resistance. or within a business undertaking
There are those who would direct always glorifies the importance of
one or another phase of TVA's job pieces of paper.
This dims the
from some centralized specialized sense of reality.
As men and or¬
bureau—in the interest, we are ganizations .acquire a preoccupa¬
repeatedly told, of uniformity. As tion with papers, they become less
though uniformity were an end in understanding, less perceptive of
itself, regardless of the diversity the reality of those matters with
Which is one of the great sources Which they. -should be dealing:
of our national strength. But note, particular human problems, par¬
too, that the centralizer's control ticular
human
beings,
actual
rests on a double assumption: not things in a * real America—high¬
only that uniformity is desirable ways,?/ wheat^barges, - drought,
as an end in
itself; but also that floods, backyards, blast furnaces.
4

capitalized

We face

upon

dilemma; there is

Z Mr. Churchill's statement at that
no

which of those central powers c;an
be decentralized in their admin¬
istration,

;

Every important administrative

decision; need not be made in
Washington.
We must rid our¬
selves of the notion that a new

gle

between

viewpoints

the

and

sor

have

artist

every¬

thing to lose: freedom,
I
The one viewpoint has come re¬ v
State socialism has proven in
luctantly to Mr. Churchill's warn¬ communist Russia, as it did irk
ing/that behind this screen of se¬ state-socialist Germany, that the
crecy, enforced by the guns of great executives, the monopolies,
secret police, communism, total¬ the politicians
aqd even capital-;
itarianism, in fact the very es- ists can come to terms with al¬
sense of fascism, is being crammed most any
regime. I thought ofv
down,
the 'throats
of
helpless the Kruppsi under Hitler, when
.

two

this self-same Iron Curtain,

that the op¬

to conceal its

•

it is incredible to

time—shortly after I left Russia- position to communist or totali¬
proportions.
was
highly unpopular with per¬ tarian standards comes in this
I. do not minimize the complexi¬
haps a majority of people in the country chiefly from the wealthyties and difficulties it presents.
United
States
and England. In and ; the
so-called
reactionary;
We nepd a strong central govern¬
fact, his; attitude toward Russia classes. Actually these classes—
ment. This is plain to every one
largely contributed to his defeat as classes—have almost nothing to
who sees the changed' nature of
as Prime Minister. ;.
fear from state socialism—but the
our
modern; world.
But I have
But now we are witnessing in working
man, the union member,
deep apprehension for the future
the United States a fateful strug¬ the clerk, the scientist, the profes¬
unless we learn how many and
reason

staff, with every member paid out
of the Federal treasury, has to
administer every detail of each
millions.
new
Federal law or regulation.
K
The other school, which besides
We who believe devoutly in the
communists
embraces
many
democratic process should be the
thousands of well-meaning, peacefirst to urge the use of methods
loving theorists, feels that the
that' will keep the administration
similar practices can be obtained The reason thgre is and always
western democracies are vaguely
of. national functions from becom¬
only by direct centralized super¬ has been so^much bureaucratic
responsible for Russia's strange
ing so concentrated at the national
visory control, ^Neither ; assumpr spirit,
such ^organizational
in¬
suspicion, and that Soviet Russia
capital, sq distant from the every¬
tion is self-evident.
* trigue, so mtaift pathologic per¬
is still pioneering democratic so¬
sonal ambitionpsso much burning day life of ordinary people as to cial reforms, I'd like to
copiment
wither and deaden the average
Temptation to Over-Central- >
jealousies an^pndettas in a cap^
on this from the observations of
ital city (anv capital city, not only citizen's sense of participation and an ordinary American who went
^
\ ization
Over-centralization is to many Washington) ffmo mystery. The partnership in government affairs. into
Moscow
neither
pro
npr
For in this citizen participation
attractively tempting. It has a spe¬ facts with whl'Wa highly central¬
anti-Soyiet Jmd if anything filled
lies the vitality of a democracy.
cial appeal to the administrator ized institutieAdeals tend to be
with admiration, as. I still am, for
who quite conscientiously sees the the men
Big: Government; is not inevi¬ the heroism and sacrifice of the
and/vtn^nen of that insti¬
True, the growth, of our
tution itself, and their ideas and table.
complexity of his job in a coastordinary Russian p e o p 1 e who
to-coast responsibility.
To maintain perspec¬ vast, .central administrative ma¬
The over¬ ambitions.
largely won this war.
simplifications; the uniform rules tive and human understanding in chines meeds no encouragement
and regulations, which centraliza¬ the atmosphere of centralization from, .anybody.
Big Government Rigidity of Russian Surveillance
tion encourages, are convenient is a task that-many able and- con¬ does get bigger and more highly
In the first place, I was amazed
for him, however inconvenient it scientious /
people
have
found centralized unless there is a con¬ to find—almost from the first
may be for the public.
scious, ; continuous, creative ad¬ hours of
well-nigh impossible. /
/
entering Russia—that prministrative effort to reverse the
•'••</ Again, there are those managers
Many of us, as administrators,
dinary
social
contact
between
who honestly doubt whether they
recognize this simple truth.
But trend. The community's impulse Russians and Americans or any
to hand its local problems over
can discharge their own vast re¬
we. are so prone to accept Big
foreigner in Moscow is rigidly
sponsibilities for nation-wide pro¬
Government, to improve and re¬ piecemeal to one remote agency prohibited. There is a small group
grams if they should rely upon fine it at the center to the sad after another, feeds this hazardous of writers and
propagandists and
units of governments over which
neglect of the periphery where push/toward Big Government. The bureaucrats who are allowed to
they do not have the authority to the people live and work, that surrender of local responsibility
talk to us at official functions, and
for a part of
hire and fire.
the community's
the federal administrator who tries
we are able to employ secretaries
But it seems to me that as
to reverse the trend is hailed as function generates further local and translators who are first
ap¬
weaknesses
which
furnish
the
against the folly of centralized the
exception to the rule.
I cite
proved by the secret police, and of
reason for yet another surrender.
administration the risks involved one
newsworthy illustration —
course
make regular reports on
in
delegations and agreements would
thai ...there were many Local communities and State gov¬ our activities. But plain friend¬
with
state
and
local
agencies more: Speaking in the Northwest ernments can help by resisting
ship—dinner in a restaurant, a
seem
clearly preferable—indeed, recently, the Secretary of the In¬ these temptations to take the easy
night at the ballet or a visit to a
these risks are implicit in our de¬
way out, They can help the ad¬
terior, J. A. Krug, urged with
out.
ministrators of Federal programs private, Russian v home—is
mocratic faith.
forceful words the creation of a
Even our. Ambassador, Mr. Averell
Nor
should we
overlook the regional agency, decentralized and to,work out the methods of decen¬
Harriman, had not a single Rus¬
deeper question of how we can autonomous, td aid in the unified tralization case by case.
Local
sian friend whom he might invite
help our state and local govern¬ development
of
the
Columbia governments can resist surrender to dinner at the embassy.
ment gain in competence and in River
Valley.
In explaining the constructively by raising questions
If pur government ever labored
wherever the community or, the
capacity.
Surely we should not decentralizing
consequences. , of
under the delusion that the Soviet
encourage state and local govern¬ this proposal Secretary Krug said: State is able to do an executive
Union had accepted us sincerely
ment to escape from, its duties or "Final decisions would be made job which the advocates of Big
as
full wartime allies, then we
abdicate its responsibilities to Big here
(in the Northwest) instead Government want to do them¬
were
indeed in grievous error.
Government,
for,-V this
process of in my department in Washing¬ selves.
We
Americans, British, v F r e e
merely
perpetuates - the
local ton.
It will take a lot of such ques¬
Contrary to the charges fre¬
French, Czechs and even their
weaknesses.
quently made of federal officials, tions and a far greater awareness
Yugoslav and Polish puppets in
If we turn administration of I desire this.
I would like to give of the heavy price which cen¬
Moscow, were treated with the
localized problems over to Wash- up some
ofjmy power and author¬ tralization exacts before Federal same Hard suspicion which the
ington on the ground that thus we ity exercised~fat Washington and administrators and, the manage¬
Kremlin has for all outsiders and
escape the inefficiencies and poli¬ see it exercised here."
In such a ment experts will find ways to
even their own people.
tical shenanigans of state and local
spirit of self-imposed restraint as decentralize.
Here, indeed, is a
I would like to. make quite clear
communities, we are- fooling no this lies true democratic states¬ great area of neglected adminis¬
one but-ourselves.
A more likely
manship, and. the road to a work¬ trative study of fruitful experi¬ that I am not anti-Russian, and to
result of centralization in such able alternative to Big Govern:- ment., In this vital field of public hope that you will feel, as, did
circumstances is merely to trans¬ ment.
'::
•,
management lies great opportu¬ nearly every American in Mpsfer the political pressures in ad¬
nity for- administrative ingenuity, cow, that there is a clear distinc¬
ministrative matters from local
Centralization Reduces
a
challenge to the joint interest tion to be made between the
into
federal
Efficiency'
political channels.
and efforts of the experts in local, Russian people and their Soviet
Moreover, centralization to avoid
The cumulative effect of over- State and Federal operations.. The masters.
This secrecy and suspi¬
unsavory local influences surely centralization of administration in methods
applied in the Tennessee cion is an official attitude. All of
deprives the people of the chance a national capital is greatly to re¬ Valley, and the results achieved us had the feeling from rubbing
to draw their issues locally and to duce the effectiveness of
govern¬ there by the. working partnership with; people on the streets, chance
clean up their own local inade- ment.
It is serious enough in it¬ of public agencies engaged in a meetings, on, trains and subways,
quacies,
self when, because of remoteness resource-development job, are not that the ordinary Russian would
Clearly, the fundamental solu¬ and ignorance of local conditions inconsiderable proof that Big Gov¬ like nothing better than to be
tion is to crowd more, not less, or the slowness of their
operation, ernment over-centralization need genuinely friendly. But. the guns
responsibility into, the community. laws and programs fail of; their not be inevitable,
of the secret police are every¬
J?
'

lumped into the Henry Wallace

school of thought, to beat and
castigate themselves because theSoviets do not. trust us. The So¬

viet government will not and in
Churchill said:
fact cannot afford to have normal,
by selfish
"Guarded accounts of what has human relations with the outside;
men, refuse to yield to the na¬
happened, and what is happening, .world. We must understand this
government
the
powers
genious efforts to find particular tional
have filtered through, but it is
thoroughly, or tragedy will ensue.
ways and means of administering" which, it should have in the com¬
not impossible that tragedy on- a
national
policies through local mon interest; or an arrogant cen¬
Who Loses by State Socialism?
tral government imposes its will prodigious scale is imposing itself
and- state, instrumentalities. >
What do the Soviets wish to
by force. In either case the sub¬ /behind the iron curtain which at
hide?* Since living inside Russia
Over-centralization a Hazard to stance of democracy has perished. present divides; Europe in twain,
often

ognition of the dangers of overcentralization and persistent in¬

Freedom

spring in Rumania the com-,

last

assured

munists

that

the

Bratianu family, thq great bank¬
ers
of Bucharest, would not be:

Said

liquidated.

Madame

Anna,

Pauker, the Moscow-trained chief
of; the Rumanian communists, "We:,
need the capitalists and eventu-%

ally they will be
operate."/

to cq->

happy
■

There are bureaucrats

and exec--

utives and monopolists in Moscow,/
who

capitalists iri the most*

are

unbridled sense, for; they own not.
only the machines, and their prod-;
ucts but the very lives
of the,

This cap?
reactionaries#;
own palatial apartments and sum*?,
mer homes;
they ride in luxuri-?
ous bullet-proof cars; their wives;
who operate

men

italist

furs

wear

them.

these

class,

and

silks

and

drink

Crimean
wines, while
hungerstalks the streets outside; theirgo
to private ; schools*
private doctors and ballet;
It's great to be a,
communist in Russia — for less,

children
have

instructors. :-

rule and,

than six million of them

personally own a nation which has;
now passed the two hundred mil-,
lion mark.

porkers' Freedom in

Russia

ordinary working man in(
Russia ia told where he may work,;
under what conditions and how,
The

Of course he must;
union, to which he.
must pay dues and. which takes its.
orders from
the communist or
group of communists at the top.
It was and is a criminal offense
for a man to change his place ot,
work.
The skilled workers o£
Leningrad,
for
instance,
wera
transferred with their factories to.
the primitive towns behind the,
Urals. Thqir families, had to re?t
main behind, to starve and endure
the seige of: Leningrad, because
there was. no transportation and,
no housing in the Urals.
They are
still separated, because there is.
still no housing in the Urals and
the Soviets are too busy with war
production to build homes for or*?,
dinajy people.
.
.
\
I knew a Soviet union man—A
hours.

many

belong

coal miner

who had injured his

back in the Donbass

and who was

allowed to take a job as

translator

British news agency.

Since

permitted by the

secret

for

was

police to do this work, over a pe¬
riod of weeks we became
and

sometimes

late

friendly

night he

(Continued op, page 2916)

;

should

Behind the Iron Curtain

hell

page

ter

because

sent

was

his

would

also

I said he

hurt in the mines.

was

case

when

own

hospital

get hospital attention

America, that we had a work¬
compensation law and so¬
cial security for the sick and aged.
Then I asked him, rather crit¬
man's

ically, about the degree of free¬
dom

and

was

times
who

in Russian

democracy

admitted *there

unions.

trade

supervision and

some¬

graft by the union leaders
members of

were

munist

the

com¬

he said that
.graft was punished when discov¬
ered, and told how his brother had
unmasked a grafting communist
his

But

party.

factory.,

"Well," I said,
"perhaps this
question of freedom or democ¬
isn't too important to the av¬
erage working man who has no
political ambitions, but how would
you feel if some night the secret
police came to your door and took
off your wife, or some close rel¬
ative?"; ; :

racy

My friend looked at me
long time. Then he said: ;

for

"I know what you mean.
took

brother."

They

•

;••• I won't continue with this story

incomprehensible,; except to say
that during my time in Moscow,
in

circle

small

our

acquain¬

tance, three people "disappeared."
was a secretary who was giv¬

One

ing Russian lessons to

and to

pened

that

never

but the night before I

duce world unrest, poverty and
thertbyixevolutibn.-./vv.:^'-^.'^' Y AY.,
Can any thoughtful person.be¬
hap¬

"To

out:

left Moscow, as

I was packing my
bags to board Mr. Harriman's spe¬
cial plane for the San Francisco
conference, there was a rap at my
door. •' It was the girl from Ber¬

She was doing a very dan¬
gerous thing
visiting a foreign¬
er,-with a letter for • her - mother
'and; ' father
in
California,
She
keley.

Admiral

mission.

Olsen

and, I
think, Ambassador Harriman, also
protested her arrest, but the So¬
viet Government seemed to

important

anyone

enough

Harriman's attention

get

certain¬

was

they bundled

and

spy,

onto

think

her

boxcar and took her away.;

many

outsider

course

how

deportations to Siberia
the

estimate

usual

turnoYerof

barbed

the

1936

who

purge

Some

are

guarded

offices.

But

and

night the NKVD takes them back
to
Lubianka prison.
Sometimes
whole

families

youngsters

are

taken and the

their

spend

entire

youth behind the fence with their

The Right to Work

%
Now

with regard to

the Soviet
publicized "right
to work," this is assuredly - true.
For, if the Russian citizen doesn't
Work where, when and as his gov¬
ernment
directs,
then his food
citizen's

card

course
■

;■■■

much

taken

and

the

normal

of events he will die.

-Y

So the average man will choose
work under whatever condi¬

and in orders to arrive at
comparison between Ameri¬

tions,
some
can

and

scales

Soviet

several

wage

things

and

hour
be

must

.that is

bullet wound

bayonet stab. The soldier who con¬
tracts a bad heart, kidney disease

Iron

Curtain

and

because

;

statement

some
psychiatric ailment is think no outsider is qualified to
simply turned out on his own. give a pat answer. I should guess
The militant Soviet system has ho —and this is a guess—that the
Russians
dislike their gruelling,
further use for him.

-•f

(Continued from page 2885)

admit that olir old
fashioned system of free enter¬
So everyone'; must struggle for' shabby lives and would change
things if they could. I think peo¬ prise might work after all. Y
a high category food card, and out
I use the term "in the main" be¬
of this a national scandal sprang ple are never quite as stupid as
their political leaders assume.
It cause some of the controls were
up. * Not only the party members
doesn't take a very smart man to not removed and, what is equally
and Red Army and top production
know when he is hungry ... or to important, the bureaucratic habit
workers held one or two or five
resent the secret police who may of finding new ways and means of
food cards, but their friends and
intrusion into private business is
relatives
rolled
in
comparative rap on his door at midnight, YY
But I can tell you something still very much in evidence. There
luxury, while the average family,
about, a
small group of former are still many men in the govern¬
the unimportant Ivan without po?
Americans
and
Britishers
in ment who will go to extremes to
litical influence, languish.
On a
convince the Administration of the
national scale, it is not at all un¬ Russia—people who went to the
Soviet Union in the flush of ideal¬ political expediency of their spe¬
like the arrogant and foolish cap¬
ism over communist reform and cial ; type of sophistry and they
italist who hands largesse to his
became Soviet citizens.
Some of will doi everything in their power
friends and relatives, and in that
them were bailed but by wealthy to retain their right to meddle—
favorite Soviet expression "grinds
relatives in
America, but there and will stubbornly exercise that
down the workers." ';:Y,,YY :
>
remain in Moscow about 200 of right regardless of the damage to
What Russian. Wages Buy
them, chaiiied to their passports, the welfare of the American peoappeared to

Here

are

and

some

throw

some-

wage

light

scales
on the

They are official figures,
might add that Russians

work regularly a six-day,
week. Anything over 60

unable

ever

to leave that country.

They are a sad community. In
days before the purges they

the

were

treated like citizens and al¬

lowed to

associate with Russians.

Ple-

the

worker

dition

can

two

censors

Who

stood

enough and here

are

some

prices:

wom¬

about

what

would

happen if we

the
differ¬
ences quietly within the wartime
rules, and at the same time co¬
operated to the limit of our ener¬
gies on the job of turning out the

orderly processes of law, on
whole, we settled our own

materials essential to

the winning

of the
We were

140,000,000 people with

single purpose/ and we accom¬

that

plished

Now we
purpose—the full
of the "America^

purpose.

another

have

rehabilitation
'

Time

for

Relaxation

way."

•

We went into the war with very
■/•Of course, we are grateful for
this long-awaited opportunity to little more than the modest peace¬
move
again in ; the direction of time equipment of a peace-loving
which
was
practically
free enterprise.
Now, let us go nation,
over this subject of controls and
nothing compared to the arma¬
be sure /that we all understand ment in the hands of a well-pre¬

with

but when the
has* passed they want
rights back without any un¬
necessary delay.
YY\ vY
yyY
\ During the war we submitted to
every
rule and regulation and
abridgement that our chosen leaders considered essential to the war
effort. Being firm believers in the
blood and treasure,

emergency -

those

•

60-hour
But now they are outcasts because
hours is
they are foreigners—native Rus¬
overtime.
sians fear to be seen with them,
Here are some monthly salaries:
and they fear to be seen
with
draftsman $50 to $60; engineer $70
Americans temporarily living in what we are guarding against and
to $140; university students $30 to
the country. They are a tight, sad what we still have to do. In the
$40 depending on their grades;
little group
who mostly eke first place, this is no time for be-?',
janitor $25 to $30; chemical tech¬
out
their
living by
translating laxation:
nician $85 to $160; shop directors
It should be said that even a
documents into English, teaching,
$100 to $115; office workers up to
or
working for newspapers and- v§mall group ,of people must have
$80; Red Army general $450; bal¬
radio where a knowledge of Eng- a few rules of conduct and rela¬
let daricbr $160' td $600 depending
tionship to remind them now and
lish is needed.
upon her political benefactors. An
then where their rights end and
At Moscow Radio, from which I
outstanding man on piecework or
where the other fellow's begins.
a peasant who exceeds his normal
broadcast, one of the engineers
But there is a vast difference be¬
was
a
former' American
from
can also make up to $400 a month,
tween the policeman who walks
so
the
scale
is not
necessarily Brooklyn, and his proudest pos¬ his beat with his mind on the oc¬
measured by graft or favoritism. session was a moth-eaten camel's
casional violator, and the pompous
It can be done by gruelling speed¬ hair coat he had bought in Detroit
official who- rings your doorbell
16 years ago. There was another
up labor,
morning, noon and night with a
And what do these wages buy? girl who was once an honor stu¬ list of questions and injunctions
dent at the University .of Califor¬
As I've pointed out, the food card
regarding your behavior, your fi¬
nia in Berkeley.
Her job, in ad¬
is
of
first
nancial condition and your plans
importance
because

half

on our

read

Russia

always been one of the most
backward countries of Europe, I

buy his
over
me
while
I
broadcast —
Russian
food
cards, black bread and fats in govern¬
watching to make sure I did not
hours, and finally the ment stores at low prices.
But
this does not include such luxuries change or deviate from my writ¬
price of commodities.
*
ten script, her job was to listen
The salary is secondary in Rus¬ as shoes, a coat, socks, a tooth¬
and report if by
sia. What really matters is which brush, a water glass or a frying to my voice
anv inflection or tone I should in¬
Class out of about 20 food and pan. These luxuries, and believe
dicate irony or sarcasm for their
clothing cards the person receives. me they are luxuries in Russian
Soviet regime. It was rather un¬
This is a classification by amount
eyes, must be purchased with big
and
quality which ranges from money in the so-called commer¬ canny and at the same time amus¬
£he communist party member's cial stores, which are also gov¬
ing
to
broadcast
under
such
I went through
top allowance, an ample amount, ernment-owned.
down to the unskilled worker or one of these stores—the Mostorg scrutiny and Paul Winterton of
dependent aged who during war¬ in Moscow—at Christmas in 1944 the BBC and I often debated
about

dictator

has

considered:

received

friendship agreement with Mar¬
shall Stalin and cast the Soviet

...

salaries and

time

was

arrested parents.

condition

Hitler ruptured his

subject.

they

fundamental

any

altered when

which

same

lution?

taken during

Moscow factories

always

the

Union has re¬
of world revpCan Yanyone; think , that
Soviet

the

...

still working
old jobs in

were

daytimes at their
are

10
are

in concentration
doesn't
always

wire.

engineers who

political
to

Russians

constantly held
camps.
Arrest
mean

annual

said

are

million

but

occur,

million

one

There

arrests.

knows

"disappearances"-

;

Admiral Olsen of the US military

lieve

nounced its dream

side? I would like
a
remarkably
frank
which was made long
with me to conceal it before this war by a Soviet leader
lowest forms of labor, had to beg, a clay figure of Father Christmas pleaded
under my woolen underwear or in to a British diplomat in Moscow,
steal, sell whatever possessions and a few tree lights for $75,'and
and in no circum¬ This statement comes from the
they might have . .
or die.
It it really hurt to see the crowd my shoes
book
"Memoirs
of
A
British
of worn,' pinched women eyeing stances to let the Russian censor
was a survival of the fittest, rec¬
the fantastic prices and carefully see it. I insisted upon reading it Agent," written by Bruce Lock-*
ognized by Soviet Law.
;• and it was just a let¬ hart and first published in No¬
calculating what child's present myself
ter home, a cheerful letter saying vember, 1932.
The Soviet leadeif
-Y, ■ Rule of Human Utility
they could afford; "My God," said
said to Lockhart: (page 239)
YYT,,
This rule of human utility is a Bill, "this government is black- that her health was good and that
"Our ways are not your ways.
she heeded for nothing'., "
constant factor in Soviet society. marketing on its own people." 1
We
can
afford
to
compromiseIn other words, it might take an
She said this was the first letter
It was merely exaggerated and
with capital.
It is:
made more vivid by the pressures office worker his or her entire she had written home in seven temporarily
even necessary, for, if capital wereof war. But if you could go to the salary for six months to buy a years. I said I would try to visit
to -unite, We should be 'crushed at
peasant market in Moscow today cloth coat, or perhaps a year to her parents/ since hiy -faihily also
.
and this stage of our development.
you would see this "rule of 'util¬ buy some imported leather shoes. lived near San Francisco
Fortunately for us, it is in the na¬
ity" in - operation.
The Central So the difference between wages so she said: "Please tell them not
ture
of
capital that it cannot
Market is one of the places where and the price of Commodities must to write to me. * I'm afraid."
unite. So long, therefore, as the
beggars are allowed to work-and be and is made up from devious
What Russia's Policy Means
German1 danger exists, I am pre¬
it is always crowded with old peo¬ forms of graft: in stores between
What does
all
this mean to pared i<5 risk a cooperation < with
ple, ragged and dirty, children, clerks and favored customers, by
To' Finns, to Ger¬ the Allies, which should be tem¬
and men in Red Army uniform bribing ; and Y stealing
rents
in Americans?
who are asking alms or selling a apartment houses, all sorts of pet¬ mans, to Rumanians and Poles, porarily advantageous to both of
us.
In the event of German ag¬
few cigarettes, a lump of sugar or ty thievery which inevitably fol¬ and Bulgars, to people of the cap¬
some
incongruous thing like a lows a program of scarcity • and tive little Baltic states, it means gression, I am even, willing to ac¬
ff
pair of pliers or a cup which was government control. In the sense hunger and fear. And to Ameri¬ cept military support. . .
v
Who said that? Stalin?
No; it
evidently taken from their homes. of graft and squeezing Russia is cans it is inseparably connected
was not Stalin.
It was Lenin who
every
domestic
problem
Some of the old people are for¬ remarkably like China.
In both with
said that
in 1917, during the
mer
bourgeois, who have'been countries it is a chronic, national which we face: labor differences,
It was Lenin,
lack of housing, faltering produc¬ first World War.
condition.
disenfranchised
and
should - be
tion
and most decidedly the the first dictator of the Russian
dead by this time . . . but are not.
Russian Opinion of the Octopus
And the soldiers, I learned, were
decay
of
moral responsibility.
proletariat. It was Lenin, whose
What do the Russians think of And all these in turn are intimate¬
begging because Soviet military
words are still the holy bible of
law recognizes only wounds which this octopus which has hastened ly related to the Kremlin's con¬
are caused by "mechanical forces"
upon their lives?
Because of the stant, cynicaL campaign to pro- the Soviet Russian Government.
.

of pu nishments and constant fear,
which to the American mind js so

shout

Stalin."

Needless to say,

cotton
to keep alive. I have the official en's
stockings'.$6; men's
2915)
wouid
eui^e
into
my
office for figures, which are too detailed to cotton shirts $80 to $100; woolen
recite
toothbrush
$1.20;
here, but what it boils gloves ;$23;
coffee,
''; .' ''.I'-;"';/*-.,
electric
heater
$50; chil¬
Y. One night we commenced talk¬ down to is that high-production small
dren's soap cake $14; face pow¬
ing about America, and he was workers, the Red Army, children
to der $8; lady's skirt $34; brassiere
amazed when I told him that our and bureaucrats were fed
depression and soup kitchens and continue the strength of the na¬ $13; wristwatch $400 to $700; high
bread riots were not the normal tion and
particularly the com¬ heeled shoes imported from Ru¬
thing in America. But he felt the munist party. The sick and aged, mania $300. Bill Lawrence of the
wounded
war
veteran,
the1 New York "Times" and I bought
Russian working man had it bet¬ the

(Continued from

suddenly

with

1946

Thursday, December 5,

THE COMMERCIAL & FINANCIAL CHRONICLE

2916

for the future.

In the latter situa¬

from
most
powerful war machine in the his¬
tory of the world. We broke every
known record of speed, efficiency
and quantity. "Now, may I ask
you, how- did that happen?,; It
wasn't an
accident.
It wasn't
pared enemy. Starting
scratch, we built up;.; the

Yankee luck.

We were not

de¬

pending on horse shoes and rab¬
bit's feet. "It was the inevitable

training, of

our know
enterprise.;;
the many years that preceded
war,
what was going on?

result of our

how, of our free
In

the

Genius
were

was

free to develop;

Invention
encouragement.
of flourishing free en¬

development
was

There

limitations placed on the

given

The years

of skill,

every

tion, the government is the tres¬ terprise gave tremendous power to
passer. Well/such dispensation of
our production line as a weapon
justice became reminiscent of the
Gestapo, and the people decided of war. The brilliancy of our war¬
to call a halt. '
time performance was the natural
The American people are the
result of personal and economic
•

most

sensible and

the most gov¬

the world,

ernable

people

long

they are using their own

senses

They

and governing themselves.

are

willing, in an emergency

We went under

freedom.

controls

cheerfully to attain a single
and

result*

threw everything we

accomplished

had

in the -way of vi*

suspend some of their private sion,: imagination, free thought,
rights, in addition to giving their; inventiveness and energy into the

■

: •:

>'•

•

'■>

V >V

......

'•■s. most gigantic achievement of all Journey Back Is An Uphill Pull
lime..

■;!;7,;7,

/
v

-our

controls.

ment

That

how

lation spent lis

were able to liquidate Hitler and
..Company, Limited. ;777;;v7;/7/

t
'

would

have

dozen

each and every detail of our

V":v

^ness?
V

and; punch-Lne,^
■^-golct-plateu rhetoric and propria

•

work.'

busi-

show, that

rules

and

-us

prospect of profit that encourages
the
enterpriser
to
invest V his
money

tation

in mechanical experimen¬
and

essential

training. Skill that

costly

tools

designed

for the rapid and extensive devel¬

opment of skill. It is the certainty

remain

adjust

What

get for

you

for it.

Those dead-end collectivist kids

technique,. Watch for it. It
subtle and dangerous as
that of a thief in the night. They
exaggerate our minor defects and
our
temporarily
unsatisfactory
conditibns to the point where they
appear to be of perilous propor¬
tions and call for a general over¬
hauling of our national economy.
They; picture a gust of wind as a
hurricane and a sneeze as an epi¬
is

just

our

demic.

rid of all

.Perhaps

common

protected
against any unmoral forces of
business; labor and government. r
The

proposition is clear. The
man who tampers with the
princi¬
ple of free competitive enterprise
is working toward the destruction
of his own right to make a living.

of
hisj property rights, the right to A government that promises to
,his share of the reward that keeps give you everything you want will

going

and

Achievements.; /,/77;
What I

many

about

.to

higher

!■ X V,:

■ 7;

tell

you,

become

soon

will

tell

have."

of you.already know. I dis¬

•

;

have been guilty of

have

done

what we are. Remember, we have
only 6% of the world's population.

political gang that

how little you
; -7.

you

can

;/ ;;,,

We who live

in the greatest

now

vital

most

world would

ing

what

the

country

do well

forces

that

are.

will

the

examine

made
then

note

We have 59% of the world's tele¬

that the economic prescription of
phones, .the product of our in¬ those vigorously constructive days
genuity, and a perfect symbol of that brought us to our present size
our desire for free speech and ex¬
and strength contained no deterio¬
change of opinions. We have 49% rating and discouraging controlsof the world's radios, the instru¬ no hand-outs of bureaucratic wis¬
ment of communication which in dom—no imported ideologies. Let
typical American manner renders us apply our constructive experi¬
the double service of distributing ence of the past to the building of
the future. Let us from now on
thoughts and merchandise,
,

When you get that car you have
on order, we will have more than
75% of the world's automobiles. It

especially

that

our

interesting

note

take counsel in the authentic voice

savings accounts. It
speaks well for our system when
so many of our people find it nec¬

are

mistake

in this

the assump¬

—

trouble because

him;: You don't even have
to
we that controls will not be
we asked for it. It's our fault and,
bother about facts. There is no
put back from time to time? The therefore, our business to clean
law against free speech when you
•lact that the war is not officially
it .Up..k ' '
\
are
telling the boss where to
k)ver and that the power to re¬
Must Act Fast. .«•
head in.''
establish controls is still in exisJ "* '/•' "' /;7; ^ 1 £ 5- *
'V If' we don't act fast in -driving
fiut if you are an employer, all
'tence makes it possible that pres¬
home the facts to all the people,
sure
you can do, just now, is to blame
applied in the right place
we cannot escape a regimentation
f-could bring some controls back.
everything on yourself, keep your
which will mean ; mediocrity or
mouth closed and go back to work.
"You may be sure that those who
decadence for all of us. And then
There is something lopsided abopt
want them back are not asleep-—
I can visualize two lads, leaving
our free speech, right at the place
an fact, evidence of their activity
school some afternoon 100 years
where people afe in! the greatest
•as quite apparent. 'They are.work¬
from nbw1 after finishing their
need of frank' consultation. Here
ing underground and hoping that
history lesscm, and hear one say to
we will relax. / .
certainly is. a situation we've all
>r,'
.-7;
the other, "I wonder ' if those old
There
are
got to"do. something\about;
approximately \ 500 so-and-sos ? fooled 1
great-gfandpa
'war and emergency acts still on
back in
those//Alice-in-Wallace- / What Free Enterprise Means 7
the statute books.
Those emer¬ land
days." '•
There is no substitute for work
.

statutes whose termination
depends on the official end of the

gency

hostilities or the emergen¬

war,

cies, deal with a wide variety of
subjects some of which directly
or
indirectly affect many phases

have

touched

value of free
and

war.

times
rial

upon

enterprise in

have

heard

the

peace
many

that America's great mate¬

wealth

the

result

free

Until the war is economy. But we have also heard
complaints about inequitable dis¬
officially at an end, those emer¬
tribution
of
its, benefits—that
gency statutes will afford the busome

!<of

our economy.

opportunities to
in the affairs
df private business. We should not
he too much encouraged by the
•fact that some of their activities
Teaucrats

many

interlope and meddle

have

been

curtailed by the, sus¬

of us get more and some of
get less than we deserve. The

members

the

legal profession

have been searching for centuries
for what is called perfect justice.

The

just

big

question

is "Have

now

lesson?"

Will

mistakes

mind

learned

their failure

That is the judicial means of giv¬

ing every

man

exactly what he is

pension in certain controls.
As entitled
toi under' the law. The
long as the authority is intact, we
cannot be sure that we have the greatest legal minds of all times
have thus far failed to find it.
full and unhampered right to in¬
Economic justice has been the
dividual initiative. Candidly, it is
objective of many men in many
'.my belief that the battle to re¬
prieve our lost liberties has just places for many years; It has not
yet been found, but here in the
begun.
'
,
United
'
States, in spite of; our
On the other hand, there are
shifting
inequalities,
we
have
'considerations
involved in the
more
nearly approached it than
'abolishment of wartime controls
has any other place in the world.
'which do not meet the eye. We
The answer is simple and clear.
>have
a
military
establishment
Our system encourages the full
spread throughout the world. We utilization of our resources
and,
have foreign relationships, politi¬
therefore, America has more to
cal and commercial, which have divide
among its people than any
grown during and since the war, other
nation. _7 "
777.77
which
might' be seriously dis¬
turbed by

mination

thority.

indiscriminate ter¬

of certain wartime au¬

In removing

remaining

and emergency controls, con¬

;war

sideration must be given in each
•case

to the influence of decontrol

Many other areas in the world
have great natural resources. Why
is America the champion of pro¬
duction? How did

bring about

term

free enterprise does not
"every man for himself and

devil

the

Freedom

take

the

hindmost."

in this country

includes
against those who
would destroy it. As I said in the
beginning of my remarks, we
must have rules and regulations
protection

our

those

who would

restrict

de¬

vidual

indi¬

intrusion

trade.

monopoly or restraint

The

man

curtails

who

initiative.

The process of
production by monopolizing the
competition ac¬
foreign trade and the operation of
labor of human beings is just as
celerates technological improve¬
cur military establishment in safements, by which thousands of reprehensible as the -man who
men can attain profitable skill in corners the market
on materials
guarding our national security.
■on

our

international

amity,

our

meeting

our own

the

men

Elizabeth's Hospital
ton

who have

consequence. I have

in mind those

regulations, the ad¬

ministration of which ge , into the
hands of men who have a flair for

tearing the heart out of bushiess
enterprise. Now,
lucky stars that

tional Association of Manufactur¬
to provide us with centralized

ers

attention, constant vig lance, quiqk
and thorough action.
An adequate discussion of the
principles of action which we

Americans
our

employed

great nation
hundred

one

v '7

building

period of
seventy years

over

and

cannot be compressed into'Twenty
minutes.1 But I have had time

enough

remind

progress

that

you

not

was

our

product

Alladin's

lamp. That it did
for the asking. That it

come

not

achieved

and

interruptions.

without

should

not
was

resistance
>.

remind

ourselves,
too, that we will not keep what
we have gained by
merely hoping
that it won't get away from us.
We
the

••

continue

must

efforts

our

spirit, with the same
ideals which inspired our

same

high

forefathers when they wrote those
immortal words, familiar to you

all, yet worthy of daily repetition:
"In order to form

perfect

union, establish justice, insure do¬
mestic tranquility, provide for the
common
defense, promote the
general welfare, and secure the
blessings of liberty to ourselves
and our posterity."
■

New Posts in SEC for
Lobell
The

and

Kelly

Securities

and

appointment

;;r' 4'

the

}

our

have the Na¬

Commission announced

thank

we can

what they themselves have failed
s

are

or no

succeeded, and then they join the

to attain.

Washing¬

those other acts which

of little

ranks of those who seek to destroy

Exchange
Nov. 21

Nathan

Lobell, formerly Special Assistant
in

the Opinion Writing Office, as
have noticed that
In
Republicans are Adviser to the Commission.
that
one respect. They
capacity, Mr.
Lobell will
both have to make a living. It may serve as a special consultant to
also be noted that the Republican the Commission on policy and op¬
likes to live as well as a Demo¬ erational problems.
At the same

Perhaps

you

and

Democrats

alike in at least

crat, and vice versa, so it should time
be

possible for them, in view of

their

common

financial interest in

result.

one

ever

our

over-all

gets to first

that

the

Commission'

William

signed

announced"

Malone had

re¬

Administrator! of

Baltimore

Regional ' Office,

its

aqd

that E. Russell Kelly ,had

been ap¬
pointed as his successor1, effective
Nov. 27.

;•

g './;;• 7

Mr.

Lobell, who has been with
the Commission since 1939, is a
graduate of.;the Columbia LawSchool.

Prior

his

joining the

Commision staff he tutored in
was

assistant to

the

Columbia

the

field

and

was

of
a

law,

A. Berle, Jr.,
Law School in

corporation finance,

member of the.staff of

the Temporary National Economic
Committee
which
participated
with the SEC in its

study of

cor¬

porate practices. Mr; Lobell has
served as an attorney on the legal

base when he is

thinking, working

and

scheming

Our

success

only for himself.
always been in and opinion writing staffs of the

has

; 7 i
proportion to the friendly coop¬ Commission.
erative spirit of our customers,
Mr. Kelly was first appointed to
our fellow workers, our suppliers
the Commission's staff in Febru¬
,

and

our

stockholders

zation that

every

—

one

have

of butter substi utes in St.

use

•

stroy it, whether by bureaucratic

encouragement

we
don't have to
about the law tnat permits

course,

worry

the

under

our reali¬
ary, 1939, and has since served as
of us is a an attorney in the Baltimore of¬
component of the force that makes fice. He has participated in some
and avoid encroachments on our
prosperity for all. America is of the Commission's most impor¬
rights and liberties. When you put
never going to survive in an at¬
tant
litigation cases arising in
a bunch of men together with
a
the enforcement of the fraud pro¬
bunch of money, sooner or later mosphere of Marxian class war¬
fare.
hibitions of the securities laws. A
someone will show up with a five
It is entirely possible to win a graduate of the Georgetown Uni¬
ace deck or loaded dice. Trickery
versity Law School,. Mr. Kelly
and
skullduggery are not of battle and lose a war. In our
was
engaged alternately in the
American origin. The art of trim¬ thinking from now on, we will be
private practice of law and in
on the safe side if we regard the
ming has been in existence ever
since tfie beginning of human decontrol to date as nothing more government service, including two
than a preliminary skirmish with years' service as Assistant United
nature. '
7; ;
7'7;/7
signs pointing to future possibili¬ States Attorney in Washington,
If we are to preserve free enter¬
D. C. ;
7 7 >; •
ties.
.h
prise, all of us must be constantly
Appointed to the Commission's
We dare not become compla¬
on
guard to protect it against

as we have fences and traffic
signals—to discourage trespassers

just

the most thoroughly equipped na¬
tion in the world? The answer is
our

profit

interest, to do what
they can, jointly, to remove any
barrier to our economic expansion.
But, we cannot have a balanced
economy with politicians, looking
in the production of goods. And solely toward perpetuation in of¬
there is no substitute for experi¬ fice, providing laws whereby
small groups of citizens defy the
ence in the management of busi¬
courts—can be above the law that
ness. You cannot acquire experi¬
applies to you and to me and by
ence
by reading press releases
their very selfishness hamstring
from Government agencies,
and
America and work untold hard¬
you
cannot manage
a
business
ships on all of us.
successfully if your authority is
Let us understand that every¬
not'-equal to your responsibility.
Let me make this clear. The body is a partner—everybody has

mean

"Have We Learned Our Lesson?"

•

We must keep the latter
microscopic scrutiny.

of American tradition.

32 million families have

million

liave

the
paid for? Are
removed without damage to our
tion that a man can think as well
we convinced that free enterprise
essary to use the services of a
•economy.
It is our job to see to as he can talk. Too
many of us
bank to take care of what they and competition have and will
it that controls do not remain in
continue to give us the kind of life
have been sold on the idea that have left over.
And, one more:
force a single
day longer than the man who can make a
good- You can get more goods and serv¬ we Americans desire and deserve?
'necessary. We must beware that looking promise to solve our eco¬
ices in exchange for an hours' ; The amazing thing to me is that
-we do not take one more drop of
nomic
problems has, ipso facto, work in this country than you can there are still many otherwise in¬
medicine than is essential to our
the ability to do the job,
get any place else. If you get less telligent people who can't let go
complete recovery. We must re¬
of the idea that they can be suc¬
Too many of us have been going than
you think you are entitled to,
move at the earliest possible date
to the polls and handing over the of
cessful and prosperous without
course, you have a right to
everything that slightly resembles
cpstody^of our sovereign fights to squawk. You also have a right to doing anything about it them¬
un economic straitjacket, and get
selves. When they, find they are
men,; without giving the question
do something about it.
back to the full freedom of enter¬ of
not getting any closer to the
their ability and sincerity as
If you are ah employee, you can
prise, that made us what we are. much consideration as we give to
dream that some clever showman
tell the boss what you think of
i
f Now
it seems in order to ask the
employment of an office boy.
painted on the sky, they blame
your job and what you think of
•this
question.
What assurance

controls,; as fast as they can be

...

the past for a better understand¬

have

Job id Get Rid of All Controls t

;

ourselves of what

»•

ing him what, he cannot do?

:•

business. America

and

pay

body get anywhere on the advicp
someone who is constantly tell¬

free

like to burden you with statistics,
but it never does harm to remind

performance.

inclined to

nothing is worth exactly what you

record

phenomenal develop¬
ment?
Can the government give
us courage, initiative, enthusiasm,
.vision and imagination? Can any¬

something to

say

prophets. There can be a
very painful difference between a
political promise and a practical

have given

Our job now is to get

are

\ i

weeks

2917

false

those qualities which have ac¬

tivated

••:,?,

their thinking to the effusions of

lions handed down from adminis
irative agencies would

those who

regula

let

few

would otherwise require years of
low pay apprenticeship. It is the

be realized!
7^,

•

Now

only

by the substitution of magic for,

you

Is there anything in the

slogans

that could

ecies

really think we would
.have been able to accomplish the
miracle of production and win the
war if we had spent our 170 years
under
the
tutelage of Wallace
Pepper and Bowles?
V
v
Do

;

Day after day tney
read beautifully turned

and

pnrases,

been

bureaucrats

years in

7 paternalistic

atmospnere

nearo

Do you think our wartime pro-

duction record

formative

propaganda.

possible, if we spent those many
"years as the "regulatee"- of a

back to the Amer-.

apprenticeship ican Way winy be an upnili pull.
for the big job in an industrial We musi not lorget for a moment
atmosphere unfetted by govern¬ tnat a large portion of our popu¬
served

uur journey

„

ii^")'

wivrmwy •*

COMMERCIAL & FINANCIAL CHRONICLE

164 : -Number 4548 774/

Volume

cent. We must make it our busi¬

staff

attorney

Novem-

"1934, Mr. Malone /became
supervisor of its Washington in¬
constant observation.
', 7,'■
vestigating staff in
November,
I have said before, and it will 1935 and Administrator in charge
of the Regional Office in April,
bear • repeating — there • are
five
1942. He is a resident of Denison,
hundred war and emergency acts
Texas, where he expects to en¬
on the. statute books; Some.of
gage in the private practice of
ness

them

keep .the situation under

can

give

us a

ber^

lot of trouble. law,;.

77,

■■■

•'•;• :

THE

COMMERCIAL & FINANCIAL

Thursday, December 5, 1946

CHRONICLE

2918

if the challepge was
if we 'were ever
the spot, we are on the spot
those of us who are on one side
had better choose, up sides.
Not now, because we must make this
property is sound, then we will
which we Say we belieye
•youMrgde group, riot my, nor any thing
applies to rents. When you arbi¬ have
prosperity for all, but yoir other trade
(Continued from page 2886) 1
group, but all of us, work,
trarily maintain at a very low can't destroy property
withoutprotection of all free institutions
the twenty-five million, men and
Private Enterprise No.
level rents, and you double the
Now I don't suppose that I have
destroying the whole
economic women who own homes, the prop¬
Sacred Cow
>
income of the renter, he consumes
structure. And so, as I said in the
to spend any time here presenting
erty owners^ the owners of farms,,
twice as much space. It is the
This jis no sacred cause. - Pri^
the thesis that there is no differ¬
beginning, the thing about which
cheapest thing he can buy. And we are engaged is entirely a-very all of us, had better get together, vate enterprise is-* not a sacred
ence between human
rights and
the result is that the density of ocunite, and-give-a^proprietary Or--; cow. Even the Constitution, ;as
simple thing; it is- the protection
property rights. It is utter nonsense c U
ganization ,o.f the people who be¬ but an instrument, is not sacred in.
p a t i o n "in our metropolitan
of the right to enjoy the fruits of
to talk about any human free¬
lieve
in property ownership a itself. And unless this system; of
cities, as far as we can now figdom, freedom of religion, the right
chance to give the stabilizing in¬ free man and free enterprise, and,
ure it, has decreased about 40%, the private
of assembly, freedom of the press,
In other words, where there were without
any fluence iri" this picture which the Constitutional ,j government, in': a
any other freedom, if you strip a
three girls occupying
country has - alright to expect of ■ representative ; republic •
an apart- source whatsoever,
under
man
of the fruits of the owner¬
ment, there is now one. In other OPA
US..._,.. ..(,...■
•.■...
..• •.Vv
government by law, and not by
ship of his own property. Beggars
words, we followed a policy, in in the case
.,.,^ -1 don't: know, ^Mr., . Chairman,* the whims of men, works, unless
Old
v are not choosers, nor ever can be.
order that Our returning serviceIf every home owner,
every whether there is anybody in this I we lay it on the line, unless we
Now, we have gone down a path
men and our homeless might not
mother of a family,
room who thinks that a change of produce -in the shortest length of
these many years in which one by
have any homes, of, when housing kind of polaroid
on, political parties is going to cure time possible a good home for
one the rights of the private own¬
was scarce, having everybody who
she could go out and
W
our troubles.
-I can say to you,, every .American family, unless We
ership
of property have been
had it consume twice as much of home right now
anybody who believes the election perfect and put into force plans
plans
stripped away. We have seen a
~iUm clearance, and the ireclearance, and the reit, and, of course, that produced isunshine
see
of a Republican Congress and a for slum
vicious and one-sided administra¬
scarcity.
mortgage on every
>pment nf r»nr
Republican President will cure our development of our outworn and
tion of OPA which became nrofit
And we have followed a policy her share of the Federal
cre- basic troubles is in tor a very blighted cities, unless we make.it
wdaiu
uuuuies
is
for
control—not price control at all.
where, if we had sait down in the ated by
great disappointment indeed, and work we are licked, we are gope
We have seen eight million men
I speak as a very devout Pennsyl- ducks.
beginning and said, "Let us do
L[
and women who were the owner
the thing which will guarantee to made inflation,
vania Republican.
The challenge is on us; evei^
of rental housing in this countryproduce the least possible housing If she
see
U
I have just spent the last five one of us, and not a one of us. you
most of them little people; 95%
to rent, and give the least possible property
days in the State of Ohio, and I or me, or any. of. the rest of us,
: of them only owning one house
chance
to our servicemen and much taxes per
have toured the State of Ohio in dare turn our backs, not for one
we * have
seen
these men and
others,"
we
couldn't have de- personal
the interests nf iho nrcravii-j-o+t/v*
Women
marked for liquidation
signed a more perfect policy for
Now, why is it that
late, but it is late, and the time

A Union of Property

ever

has

ever

before us,

Owners

come,

before,^when

as -never

us,

•

••

„

ownership of property
destruction from
sacft^SVi,the
regulation I have just quoted
of rental housing.
if
had the right
glasses to put
look at her
in this bright
and
about an $8500
home. That is

We have seen a

rental housing

more
confiscated property
Rental Division of OPA

Herr Hitler never

fiscated the

Effect of

need

trust to

though it were a

ertv

Wellpfcbiirse

than there

toiat

way.

there

than there

now

Of course

housing

be less

now.

will be less

from how

than
end of

from now,

-*■

■

*•

wno own tnr

irinn. tisv

a"greaY Ri'piibficanTrerinv,?r?n ,TT '^,1.U1 a great Kepuoncan Fresi- r^-": •■ ^5 fnS?ii«nt nJt
lent' u3.ndopposed we have always dAeaIer.s won't
whom the to"rerntro-1 dealers Won
united and intelligent umt, the thought now"proposes creation of ^^crsw( get it. The Nationat
w 1
. .

,y'

produced by a planned scarcity at
twice what it is worth. He has
gotten all right. He has gotten out
of business, and gone to Florida

•

for

vacation.;.

the

But

nailed to

man

Rent

Control

:i.„

won't get itThetheHdfiae
in Natget it. The-lumber

than

powerful

for some strange
President of the United

Now,
the

won't

turned

housing for the
land this un-American plan for the^ orgamzed.__If we_ could ever|son of
lords you destroy tenants. Oh, the production of
scarcity under
"
landlord hasn't been particularly planned
economy, plaiined this «
men and the women who own the I deficit^
hurt in the main. He has sold his wav
men and the women who own the
house under the artificial scarcity
land,..we would
- --•
- < .Economic XAws;Apply to
When you destroy

consumer.

—WW

is less

destroy the

you

——---'J

ereat surprise.
great surprise, our

day--as

seem to
point out
destroy the producers

wouldn't
"

■■■r*

•time.-toe and

super

Paul Porter,

now

happened? It

has

a
a

were

con

And what has

: '

——

debt
deficit spending, and the
production of little dollars in manplanned that way.
could
the fact, real
paying what? Twice as
dollar of value as
property!
progressive- -the interests of the organization of
that purpose than the one we have |y the forces of taxation, of regu- prorierty
owners. We had 19
followed. And now, as though it lation, and of control have under- great meetings in that State this

ise
surprise that there

property

men.

""7

"Ui" DacKAs, not for ppe
;e^?P^ihe_?.immediate.
responsibility which; iff
friend.
x. *lCi\L ™eetmgs m tnat State this ours.
inax
ims
" <
friend,
HpsTrnvS
announces—the other eni*thefnritsofnHvntp nrl! week beginning Monday; and if
.v. w nI ...^Se ,thlnSs can be
* , v
great
owneSrin trv th^
you *hmk that the Republicans,
ruthlessly
housing
wL «t£S w no^ in P^r, are going to corthan the nowthantherehasbeenat any time.
toll viSi
reit a?d
alone,- unaided,
,®rg have the buitheers,havewe.^ave
have
there is less housing SSntiol
^P1.0114 •' the trend towards the soth® pressure of public
weef kS'magnificent ldfinengin l
of the smal
has been at any ft™ofIn SnS °P^on,
ih ; y°u .-.JMen, and the we
ancifia
his ilk have planned rights that In with it? Wht
fialization of property, the social- SSi1}!;
Rent Control
there will
stand Li Wht nrl* 3 Kpi« %*il0n£ Pf^edicine, "the socilizabankers, we
happened? Whait
six months from
S
Si tioii Of jobs, and the whole leftwouldn't seem
is
Of course wfthout numLrs? Nn»
movement, you might read
uiidfower a^
erneathadl
intelligence;
housing a^^ year
^^nnno'nnn IS th% PaPers, about four days age,need
brain
there is six months hbw~?n nnn nnn
^ tsyps. t}?e statement of the senior Sen- ^hing else, is the mobilian drlx of a
n
that when you
t.hp
/if zatioPublic
course we will wh^"7wn^^th'p^toSf? tirim °f °hio, Mr. Taft. j •
at°r
Mr. Taft, ODini6ri"~wthft
of housing
policy-of confisca

practiced by
OPA. You can't freeze rents ab
solutely, and double costs, with
out
confiscating ;i< property; and

tion of

'7-

that might say
States, lmi r.^ [-lonmnn
go, and no farther" — a
ir
reason

great jI.. new"CongressJ.T bSl1'which IsmaI1' oloeel
the* •. . .
UI I Hirnnrt t0°

inadequate, in' ;the

has been
is the return¬

who

the cross
^

ing
service man, the
tenant. About one-third

homeless

ing to

the other j

death, announced

day that we, as

of all the discovered thait it
was^necessary
rental housing in the nation sold,
to
strip off controls before we
or' forced
into sale, out of the
rental market! Nothing new can
tX hld VfounUd
LSVI '.a ^+
be produced. Only an insane man
will build new housing at twice the^electorate had
the cost and be absolutely helpless before the OPA as to the set¬ ^ ++v, ^ lu
despite
fact that these economic controls,
ting of his rental with no redress and this economic planning for
at court—stripped of his constitu¬
scarcity had now proved that we
tional rights. You can't build any
new houses.
The old housing is
forced out of the market. Our fig¬

ically—our democrats—Jeffersonian Democrats, at least, who be-

dollars of dishonest deficit spend- ..

ing. The man whom we had sw-

in the

?10ns intelligently; and

there" is

one P.lac.e. to of the If is,in
organization: grasp:itproperty
owners of-the nation. . v

hnn^t aetS,raste Tnd lleve ffolidly in Constitution, prj- posed did of further vast bureauccon- A Union of Property Owners
more ^,,tke. favor of the are centration not b®eve
the
RePublicans * "than racies in the Federal Government
the now proposes to set up/nn™^ Now, starting
confirmed it. vate ownership of property
little less th;an
LUIIUIIUlUiy uufCduudtj UX ail.
• »
the North. is a medium, a community so-called housingall. Always be- a vpar a0n enmn rxf
bill,x-liways DCthe largest,
Here
bureaucracy of
0f interest, the common belief at fore these great powers -have been yuu—some nf your members are
vou—som* oi
,,
. .
...
~
.
the level of philosophy that in the limited to two years orlAmonths"
s"1,le 01 y°ur

;

ucic

—.a/i

indicate that

ures

and five

•

lucuiuiu,

Pf^L-.Plvate

Thisjs perman^_years-fo

°„?

memoers are

between three

hundred thousand

empty

standing idle today
throughout this nation in homes,
in houses, in apartment houses,
because of the one-sided provision
of OPA that virtually confiscates
possession, and you dare not let

units

are

"fi a political action committee, if
morie [and serfs living as wards of y0U choose, moderated a little bit
the State, less free ir^n standing —^f property owners; a union, if
P/1 , 1 own ^ands;
proposes you choose, of property owners—
'
' '* - ,
again, moderated quite a bit. ,;We
And further, he enters into a have so far been able to, set up;. in
making shortages! Planned econ¬
industry, is in liquidation—plan- protection of fr6e institutions. And bill which is a fraud. He calls -it 38 out of the 48 states paid, highly
for scarcity!
ned that way.
here is this new theory, lately so Veterans' Housing Private Enter- trained executives to organize
Dwelings Increased Faster Than
N°w'}} » necessary, it we are dominant, that we should create prise Bill. There is no veterans' property owners. . In the other 10
be effective in thei service ot bigger and better bureaucracies, housing in it, believe me,-at all, states we have, some activity. .We
Population
country at all, that These eco- greater arid greater Stateism, and it is 80% public enterprise, have set up an office in WashAnd what other strange thing
and more
cradle-to-the- as far as the donation or the allot- ington where we have about:30
nomic -farts, that thesp great nnn- more
facts, that these crreat. prin
happened? Well, actually, as you
ciples which apply to the founda¬ grave controls over the lives of ment in the bill. It is neither pri- people. , We have excellent, able
probably know, there are in this, tion of all prosperity, which is
individual, the centraliza- vate enterprise nor is it veterans', men on the Hill whose first job is
country today about two hundred
the one-third of all human ac¬ tion, the adopting of all of the housing. And that is proposed by. to know what is happening^ to get
sixty-seven—according to the tivities of this country, which per¬
philosophies we fought the senior: Republican Senator, the facts, to be the bird dogs, so
of
Census — dwelling
abroad. In the balance hangs that from Ohio. •.
, - * - ,
that we are;not asleep at the
tains to the building, financing of
units
per
thousand; and there
;
- So if you have-any tendency to switch, and something happens bebuilding, real estate, the decision.
about 10 years ago about
ij
-i '
relax, if you have a tendency to fore we know it,-We have facilthings that deal with the landProperty Owners Should Unite, j^t down, if you have a tendency iti0s for disseminating widely that
two hundred forty dwelling units
it is necessary, if we are to con¬
And there
many men, and to quit, forget it. : This battle is information t6 the points bf cr^sper
thousand. In other words, tinue as free men, that w6 stand
the
total
supply of dwelling
there ^iay still be men who. say, barely opened. - We have -stood taliz&tion of public opinion. Our
own land as free men, and
units
in
this
country has
"It is too late; that the die is cast; with our backs to the post; dug in," littleis now going out. ; I hope pne
paper, "The Property Owner,"
not become wards and' serfs of thO

in your house because
>
can't get them out. And that city,* more and more confusion,
still further crucifies the return¬
just continue your controls. No,
ing service man and the man who rental housing hasn t had a strike;
would have found a home—mak¬
it has
had a stroke. It is halt
ing shortages, making shortages,
dead; it is paralyzed, and a great

person

-•,•

Munuui

you

up,

v-uAx^cptiwii

mat

g0vernmerlt derives its just
p0wer by the consent of the peopje.
conception that in the
prjvate ownership of property in
minions of small hands lies the

omy

our

nnmir*

every

very

Bureau

home

•-

;

were

tft.

were

about 18%—or some¬
thing like that—per person in the
increased
last
the

and still we have
greatest housing shortage ever..,
10 years,

Why?
cisely
which

and pre¬
the same economic laws
applied to all commodities.
Well, the same

our

state in

rabbit hutches

Federal

Government,
politically.,

trolled

built by the
and con¬
.
" .> •':;

Destroying Economic
If the land is sound,

Structure
if the teal

that

might as well go

forthemainenterprise in,

fishing." fighting for our lives,

And, "It is no longer possible to tenance of private '
maintain the conception which has these last '15 , years. •

it will be one of;the most
powerful instruments in this land.
to about 250,hope within a
day

Maybe we. It is now going out
made us great."
But brave men, have a little break. Maybe we, 000 people, arid we
....
.....
fit to be free, dare not say,'I have that ball just a bit out from year to have it go
"It is too late."
It just isn't too the goal post, but if the bee was
:

men

i»ii.

•»' -

to two and a

V, "v'-!

,:v:

*y;-

.Volume 164

Numbed 4548

THE COMMERCIAL & FINANCIAL CHRONICLE

2919

half

million property
owners sponsibility;
and new perform¬ bor-management relations in the recognition of their right to form I America is based on the firm bethroughout the nation, informing ance, there had to be a great years .just, ahead.- This factor, if a union on the p^rt of the em-1 lief that what has been accom'; them of the facts, mobilizing sen- movement at the level of educa¬ it comes into the picture, will not ployer.'
'/'v/;-'•'/!!-'!• .,plished in the past could only
tfment,
calling
local
meetings, tion,^ the grass-roots movement. I can assure you, be conducive or
l)own through the years since have been achieved under a sys-

having the property

from I

sought 4hese many years helpful in achieving the teamwork
their for something to do about it. Not in ,! labor-management
relations
Congressmen until this great chance came did that we so earnestly desire.
owners

have

the

the grass roots level bringing

4 influence

their

'We

out to mobilize and

ercise

and

made

us members, to give us. leadership
unions? *
'
1
performance of a and direction and advice, and to
Are we going to be allowed to
Now we are in join with us in this'great crusade. work out our problems with those
infancy.
We have
I said a moment ago no. man who employ us as free men selling

all

about

judges,

vise.

the

with

the

of.

mistakes
didn't

cently in

'Wi:

'seemed to m'e at least-^if we were

to reverse this conception that the
£ government owed the people a

So when I

50% of the world's wealth.

America"

have

of the world's

You may
at

idea

and that

time

whose

has

earth

living, and turn it back to where
the people supported theigovern-i will turftiusiback^
ment; if we were to have a reu- united we cannot fail. Join us!
riaisance of new support and re¬ help us put "this .thing over.
come,

no power on

gaged

an industry that
few major strikes in

has had
the last
years, that I should lay great
stress on the high value we place
on
the right to strike.
Well, let

the

months

and

years

the
America

you see

or¬
en¬

a
struggle to preserve
rights which they feel are

and

fundamental

continued
free

possesses

certain
basic

from the American people to crack
on labor.
We hear of pro¬

statement:

goods and

ganized workers of

senting
so

this

only

immediately ahead

perhaps wonder why
gathering sucn as this repre¬

makes

with

6%
of the
world's population produces 25%

fought in the past.

union

trade

the

existence

our

structure,

keep in mind that the major dif¬
ference
Of

between

philosophy

our

that

and

government

prevails in totalitarian
lies in the freedom of

government interference and con¬

believe-that this has the pow¬ down
of

our

advertisement, by
the New York Stock Exchange,
referring to what they call the
"Miracle of Opportunity Here in

ally, and I am very sure that you movements when their time has ganized labor by repressive legis¬
lation. There has been much big
have, for something to do about it. come.
Victor Hugo,
you
remember, talk' lately from some politicians, us remember we have been talk¬
Ij have never been? comfortable
aione with political affiliation. I said, "There is no power like the who profess to see in the results ing about free enterprise, about a
recognized if there were to be; it power of ari Idea whose time has of the recent election a mandate return to an economy free from
come."

America

per¬

This

dence of the fact that

in his

one

by an ad¬
appeared re¬
leading peri¬

which

odicals.

so-called

individual.*

achieved

been

vertisement

will

bor

make

has

tell you that la¬
fight any new attempts
to destroy our right to maintain
and operate effective trade unions,
I can point to the record as evi¬

right mind would undertake our labor in a free economy, or
it, and I assured you that if I are we going to be compelled to
them it was just because we missed
thought for one second we were devote all our energies to a strug¬
them
by
accident.
This is
a doing this in the power of our own gle for survival?
gigantic problem. It is a terrible strength I Wouldn't undertake it,
There is considerable evidence
problem.
No man in his right but I have / the feeling that the that there Willi be a serious at¬
njind would undertake it.
God of the nations has always in tempt in the near future to
destroy
For years I have sought, person¬ the proper
time brought forth the effectiveness of unions of or¬
think

can

the

haps best summed

bor

the

extreme

our

recognizes the dignity

freedom

What

the country

ac-

free ^enterprise.

and

have had

drying: if I could, to more to fight, as they have many "American plan" and with every
tlvate in order to see to it that leg¬ get the support of men such as times in the past, to preserve their other
type of'devilment that those
islation is properly guided; that myself to help us organize, to get right to form and maintain trade who would destroy us -could de¬
are

the foundation is laid for the ex¬

tern which

American

corporation dominated sheriffs and
their thug deputies, with anti-la¬

the

to contend with the company spy,'

through the representative form of I see any way that I, as a little in¬ j \ Are the workers of this nation
/ government under our Constitu¬ dividual,
could
do
something who believe in the trade union
tion.
about it. So I have been around movement going to be forced once
"

formation

Federation of Labor

trol, about the rights of manage¬

Which

countries
the

indi¬

posals to enact legislation outlaw¬ ment to manage, of investors to vidual. Remember if you will that
ing the closed shop and of placing a reasonable profit, in short, we there never has. been a free trade
a definite limitation, if not a com¬
have been talking about the free union where a dictatorship existed
a
dictatorial
government
plete prohibition, on the right to American way of life. I submit nor
strike.
'Well,
labor
has
been that there can be no free enter¬ where there were free unions.
through this sort of thing before. prise for the owners and managers
There are no strikes in Russia.
Our industrial history is saturated of industry to enjoy if freedom is There are no closed shops in Rus¬
with struggles .ggainst every'type denied to the worker.
And the sia, Then again there are no prof¬
of device that the ingenuity of basic foundation of a free society its for
private employers in Rus¬
'

Teamwork in Industry
(Continued from page 2891)
labor the responsibility for

imagination of; the entire world.

work

entrenched wealth could think up
for the destruction of the trade

insofar

union movement.

profit of another if for

Labor

has

had

need that same full produc¬
Jing out their differences in a
to fight for its existence since the
tion and full employment now. It
v
peaceful manner. To me the Pres¬
early days of our nation's history.
ident's action presented both labor is up to the private employers and
In a sense lhe efforts of capital
ahd management with a challenge. free labor, the same people who
to
deny the workers the right of
provided
the • nation
For some time past labor has been yesterday
collective action was responsible
: detnanding
the lifting of wage with full production of war goods, for the growth of trade union or¬
f controls and a return to free col- to meet the nation's requirements
ganization in this country. In the
lective bargaining. Likewise pro¬ today, in the full production and
early days of the republic there
consumption of peacetime com¬ were few trade
ducers, distributors, and manufacunions—mainly of
modities.
turers. have been loudly calling
the craft type scattered through
Labor must recognize that pri¬
for an end to price controls. Both
the principal cities. Their efforts
vate enterprise means that man¬
employers and workers! have in
were not in any way coordinated.
agement possesses the right and
\ effect been demanding a complete
Each group was concerned with
directing and its
return to an economy of free en- responsibility rof
own craft problems arid con¬
tterprise - based on the American managing the operation of indus¬ fined its activities to the limits of
try.
Also that it* is within the a
«^system of free competition for
particular city. In the days im¬
province of management to deter¬
profit. All of us have thus indimediately following the Civil War,
mine policy* in the operation of
cated our faith in that system. The
there was a
strenuous attempt
private enterprise.
Labor must
elimination of controls presents at
.made on the part of capital to re¬
recognize that private enterprise vive the so-called
once a challenge and an opporconspiracy doc¬
is quite naturally motivated by a
trine of colonial days under which
tunity to all who believe,in.-and
desire for. profit.
v
there was a generally accepted
have boasted of the superiority of
After alL.it must, be conceded
our American system of free en¬
philosophy" that it was criminal
that thereris hot much sense in for two or more workers to simul¬
terprise. We must meet the chal¬
lenge implied in the/, words of bargaining, over the amount that taneously
stop producing for a
President Truman and seize the is to go into the pay envelope un¬ private employer. Under this doc¬
opportunity which has been pre- less the bargainers definitely fig¬ trine; the workers who collective¬
dented to us, to once again prove ure /thatsup¬ ly exercised their right to stop
-to the world " the'superioriiydf posed to fill the pay envelope is work were looked upon' as con¬
going to stay in business for the spirators against the public wel¬
our free economy.
^

his

care

;

to work. '

announced

in business

engage

to; do

all he

that the only
is

free

effective

trade

the /.

seen

chowwan

if for any
not desire

does

Labor .firmly

so.

regarded

believes

over,.

have

name

Nov.

Goldman
that

for

(Fort Bayard) are now
part of China. Kwang(For Bayard), more¬

choWwan

trade union

union.

China

Albert

has
of

been

given

the

Goldman's- advices added:

other kind iri Hitler's

new

"Chankiangshih."

Mr.

./"/•;

Germany, ^lussolini's Italy and in
"Consequently, effective at once,
Russia, ahd we want ho all surface mail matter, including
part of that type of so-called parcel post, for Taiwan (Formosa)
union. Experience has shown that and Chankiangshih (Kwangchowthe American system of free em¬ wan) will be accepted subject to
ployers and free labor, with all the conditions and at the rates of
the faults there may be in that,postage applicable to China.
For

««

Stalin's

those

better results for the present, no air-mail service to
toil than does any other these places is available.

brings

system,

who

V:"The Treasury Department has

system.

■■•v

postal purposes, Taiwan, (Formo¬
sa) and Leased Territory Kwang-

vidual not to invest his money nor

•

Mail Service
Postmaster

individual not
to give his labor to another close¬
ly parallels the right of an indi¬

•reason

pri¬

are no

employers in Russia.

any reason

The right -of

Incidentally; there

vate

satisfactory to himself, he does not

•

sia.

the worker is concerned

right not to work for the"

;

•

/■:%

j-.-

v'« '•

American

Worker

the

clothed

issued

v.?

Best

the

circular under the Trad¬

Paid

best

ing With the Enemy Act removing
The American worker today is Taiwan (Formosa) from the cate¬
without question the best paid, gory of enemy territory." \
best

and

life of the contract.

On the other

housed worker in the world.

children

have

America's

greater

The

Teamwork

achieve the degree

How can we

Newburger, Loeb & Co.

educational-oppor¬

fare.
tunities -than do the children of
employers must recognize
In 1864, one branch of the New
any • other workers in any other
enterprise implies York State
Legislature passed an country on earth. The wives and
•of teamwork necessary
to dis¬ no license for the exploitation of anti-strike bill which embodied
families
of
our
workers. have
charge
our
obligations to the the worker. The right to a profit this doctrine of criminal conspir¬
greater comforts and opportunities
country as a whole in this critical on funds invested in an enterprise acy. The
comparatively few labor for social and cultural develop¬
period of our nation's" -history. must always run second to the unions then existing in the State ment than have the families of
Well, I am sure we can all agree right of the worker for a fair day's of New York formed themselves
workers in any other land*
that this is a big question and one pay in return for a fair day's work;: into a
coordinating group for the
f; During and prior to the recent
"that would call for a large degree Let me put it this way—after con¬
purpose
of defense against this
war, spokesmen for the dictatorial
of presumption on the part of an ceding the /right pf the owners of
type of legislation.
When they states referred to our American
individual who would attempt to industry to manage;: of the inves¬ were successful in
preventing the
system of free enterprise with a
give the answer to it. Without at- tors to a fair and reasonable prof¬ final enactment of this anti-strike
icertain amount of contempt. They
tempting to give the answer, may it—that any business that depends bill, these unions formed them¬
contended that our system involv¬
for its continued existence on the
V I- point out, howevef, certain re¬
selves into a state-wide organiza¬
ing as it did a full measure of
payment of less than a decent fair

Requirements of Real

New Branch Office for

workers

hand

that freedom of

Newburger, ,'Loeb

Company,

Broad Street, .New York City,

members of the New 'York Stock

■

Exchange,
of

28th

new

the

announce

branch office

opening

at 4

East

Street, in the Hotel Latham.

The

new

branches

office,

one

maintained

four

by ! New-

burger, Loeb, will have complete

quirements which I feel are essenytial' tq the achievement of real
'teamwork between. -'management

and labor.
-

employees

should

that management going

jointly must recognize

the national interest in all
undertakings, in all our prob¬

fully
our

in whatever solutions
find for those problems.
High levels of production with full
consumer
purchasing power
through full employment are es¬
sential to the maintenance of the
; dynamic economy that we speak
:; of when we refer to the American
lems
we

and

may

; way of

life.

! .1, We proved
that

..,

•

■

had in our possession
America the resources, the

and the machinery to
jobs for all those who

We proved that we
produce the weapons of war
quantities t^at staggered the

/wanted .jobs.
could
in

omy,

post-war econ¬
must have a continuing

our

market for the things we produce.
This market must be found here
at home if

it is to be found any¬

where, and it must

come

from the,

best customer the American pro¬
ducer has

groups.

It "was

the

combined efforts of these various
groups which finally culminated
in the formation of the American

Federation of Labor in 1881.

For 40 years after the New York
State
Legislature
attempted
to
pass

this conspiracy legislation, a
struggle was waged

tremendous
in

the

ever

courts

and

the

various

such

Right of
There

Workers

another

Organize

factor

which

legislatures which involved

union.

that

instrumentality

as a

trade

In fact records will show

the vast majority of strikes
into consideration which were conducted during the
contemplate the prob¬ last three decades of the 19th cen¬
ability, or I might say, the possi¬ tury were strikes where the main
bility of reasonably tranquil la-1 demand of the workers was for
we

must

when

take

individual

freedom

could

not

erage

fast, efficient brok¬

service.1 '

Other locations
Loeb

of Newburger,

branch offices
successfully against the are at 2091
Broadway at 72nd
dictatorial
systems where deci¬
sions affecting the entire popula¬ Street; 57 West 57th Street at 6th
tion of a given nation were made Avenue; and 525 7th Avenue at
.

Company

function

one
individual and immedi¬
ately carried out upon his order.

88th Street.

However, the war proved the ef¬
Arthur Seligmann Dies
ficacy of the American free en¬
Arthur
R.
Seligmann, retired
terprise system without enslaving
labor, without giving away our stockbroker and former member
cherished
rights
and
liberties. of the New York Stock Exchange,
American industry in cooperation died of a heart attack at the age
with
American • labor
out-pro¬ of 53. He was formerly a partner
duced and out-fought the slaves in the New York Stock Exchange
of Hitler, Mussolini and the Jap¬ firm of G. & A. Seligmann.
.

state

had in

during the late war

manpower

provide

maintain

the forerunner of

peace-time the
right of workers to collective¬
—the American worker. And gen¬
ly quit their employment, In the
tlemen, the consumer purchasing essence it was
really a fight dur¬
^--.r power of the American worker ing this period for the right of
must come from his pay envelope.
workers to establish and maintain

here in
■

to have the full production
peace-time goods that we need

labor

was

other state-wide and nation-wide

coordinating

In the final analysis, if we are

■*

First, 1 believe

and

■

tion which

its
cease to exist.
wage

facilities fof

anese

lords.

war

The

American

system which had proved itself as
best from the viewpoint of wage
earners

proved

defense of

R. L.

Bouse Dies

Robert L. Bouse, President and
peace-time, likewise
the best system for the Director of Mackey, Dunn & Co.,
in

our

during

of all time.

Labor's

national sovereign¬

the most terrible
,.

faith

123 South Broad

war

Street, Philadel¬

phia, died at his home at the age

the

future

of of 61.

FINANCIAL CHRONICLE

THE COMMERCIAL &

2920

It has also helped to develop
policies for the promo¬

ago.

Work

Making Labor Legislation
that

were

all

"doing

There wasn't much more
consider.
But you
with the years almost

right."

attention inland ask them for a brief report
'
on
their problems as they then
employment prob¬
Forty percent of the un¬ appeared. This year you will find

considerable

need

(Continued from page 2888)
lieve

solving
lems.

that

said

the evidence of their greater inte¬

employed

they

nomic break in 1947.
Consumer
conference will offer
appreciative of
the basic role
expenditures appear to be slow¬ State labor
you an opportunity to report on
departments play in
ing down.
Business inventories
your State situation.
Of course,
promoting the interests of wageare rising.
But I am not willing
if you have had triumphs we want
earners. - He knows how
impor-;
to agree that a recession in pro¬
you to tell us so that we may re¬
tant it is to strengthen the states
duction and employment is either
joice
with ycu and with the
so
they, may
efficiently
meet
inevitable or necessary, although
wage-earners
who will benefit
their responsibilities.
from them.
But you may be sure it would appear to be possible.
The same Act of Congress es¬
of a sympathetic audience if you Most of those who do expect a
tablished y three Assistant Secre¬
tell us of your headaches.
We downturn, anticipate a moderate taries of Labor.
One of them,
and short-lived recession.
But
have a lot of the same ones.
John Gibson, is well known to you
everybody seems to;> agree that as
One of the things I'm sure you
a
former labor commissioner
underlying
demands for many from
are
thinking about is your next
Michigan.
He has met with
kinds of goods arid services are
legislative
session.
Forty-four
you in these conferences for many
great enough to assure a strong
such sessions will be held next
recovery if a recession occurs.
year.
You are already planning
Many of you know Phil Hanna,
Of course many people are con¬ also
to have new labor legislation or
an
Assistant
Secretary of
cerned about what prices will do. Labor.
amendments to' existing laws in¬
He has a rich background
troduced.
Your thinking about BLA price analysts see little price in labor and administration; Y > f
them—and
the
thinking
your relief in sight for the next six to
The other Assistant Secretary is
legislature will do—indeed, the nine months.They expect that David A. Morse, who has assumed
prospects for success—are all af¬ consumer prices may rise still responsibility
for
the
interna¬
But
overall
increases tional' labor affairs of the Depart¬
fected by the kind of economic further.

this

4tr*

which will

conditions

this country in
We

•

now

are

prevail in will probably be moderate.^ Some
prices will |all as others rise.

the next year.

those

one

times in our economic
when
everyone
expects a

Unlikely

Runaway Prices

critical
life

turning point of some kind. But
there is a wide variety of opinion
just what kind

'as

of turning

point it will .be and when it will
come.
During the war, the pres¬
sure was

always toward maximum

utilization

scarce

manpower.

With the end of the war,

there was

Growing consumer resistance—
the break
in cotton and stock

prices—the

evidences

many

of business

the part

caution and restraint on

and labor—all suggest

prices are unlikely.
Most helpful of all is that the
"makie^ready" period for post¬
war production is about over. We
that runaway

argument about whether the may ekpect an enlarged flow of
goods to market without any con¬
large scale readjustment would
siderable rise in current incomes,
be
deflationary or inflationary.
much

Actually, for the last 15 months,
although take-home pay and other
incomes

reduced

■; were

tempo¬

rela¬
that is
high prices.

There will be more goods in

tion

our

dollars—and

the ultimate check on
:.! As a nation we had

the fore¬

suffi¬
wide- sight, too, to recognize the in¬
stabilities- in our economy, espe¬
Spread unemployment and loss of
rarily, reconversion was
ciently rapid to prevent

When we are cially in the postwar period. We
general upward passed, the Employment Act of

purchasing power.
in the midst of
or

vilians.

you

I lose

the

same

downward

nomic

swing in our eco¬
is easy to speak
continuation of that

life,

freely of
trend.

Peak of Economic Activity
We

economic activity.

peak

have
^

virtually full

Out

the
We

crowding

today,

are,

labor

employment.

force

between

61,000,000 and 62,000,000, we have
57,000,000 to 58,000,000 at work
■

:-^iVi^nd ;"ahother two and a quarter
the
V-J
and

the armed forces.?

million

"V-

since comes
have absorbed ten levels.

last year and a quarter

Day

half million veterans

are

school

—are

had

slipped

prewar

these special employment prob¬
lems is the United States Employ¬
ment : Service,-while doing
its
major job—matching jobs and job
seekers in an economy where both

opportunity and public policy re¬
quire high levels of employment
and production.
,!
,

not

seeking work.
Even women's re¬
turn
to the kitchen—so widely-

tion

all

this

mean

has

not

been

great

some

that you

the

war

than

thought dur¬

There are 17,- ing the thirties. There are certain
employed today. obvious conclusions to draw from
They constitute 30% of all em¬ this fact, both for us in Wash¬
ployed workers. They are being ington, and for you in the States.
people expected.

000,000

hired

women

faster

than

men

most

I want to
industries.
Despite a leveling-off report on the expanded resources
of
employment for
youngsters that this year has brought to the
since the war, two and a quarter U. S. Department of Labor. These
million 14 to 17-year-olds are still resources, I hope, will better en¬
at work full or part-time.
able the Department to meet the
Over-all unemployment today responsibilities
growing out of
But

before

do that,

conclusions

draw.

When

chal¬

offices

ment

Nov. 16.

returned

were

Between 1933,

when the

Wagner-Peyser Act was passed,
and
1942, when those
services
loaned to the Federal Gov¬

were

the

time

now,

many,

many

them

interruption of produc¬
Indeed 90% of the disputes
handled by the U. S. Conciliation
Service

have

been

adjusted before
As
of

satisfactorily

stoppage

administrator

the

assistance which

proud

our

Throughout
these
services
further - 'expanded. * Since

were

V-J Day, they have handled com-

mendably initial peacetime em¬
ployment problems. - I am sure
that the gains made will be re¬

con¬

ciliators have been able to render.
As

citizen, I

even

prouder

of the sense of

ity

public responsibil¬
by those representa-

shown

of services rendered.

period,

occurs.

agement

war

who

made- this

man-

record.

Their patriotism has not received

the

public

appreciation

•

de*-v %

serves.

Wartime

controls

have

been

tained under the Federal-State re

virtually removed.
Labor and
management again have full op¬
portunity and responsibility for :
genuine collective bargaining

lationship provided for in' the
Wagner-Peyser Act, as amended.

without recourse to

I wish to express my appreciation
for the fine cooperation we have

Many have availed themselves of
this opportunity and responsibil- * ' '
ity.
Their ability to resolve dif-

received from the States in work¬

ing out the necessary details in¬
local of¬

cident to the transfer of

fice operations to

though

only

ferences without crippling strikes
is basic to our efforts to stabilize

fS'J.
'J

All I have said
Al¬ ■'the economy.
about our opportunity to maintain ;
the State

the States.

few of

Government.

services

were

returned

State

the

Department of
Labor in connection with interna
sibilities

tional

skills, although their pri¬
is for the long pull.
There are now 29 apprenticeship
scarce

mary concern

problems.

agencies in State and territorial
labor departments^ The. Federal
Apprentice Training Service re¬
tivities in the international field. ports enormous^increases in this
We want to count upon your co- program. In the year ending last
operation to assist us in the proper October, the number of establish¬
performance of these functions. ments;'with apprenticeship pro¬
I have therefore asked Mr. Morse grams
increased from 26,000 to
to speak to you a little later this 68,000, and the number of regis
morning and tell you about these terecf apprentices rose from 20,000
to 84,000.
developments himself.
I

knpw you are deeply inter¬
ested in this expansion of our* ac¬

Promoting

* understanding

in
domestic

about what
our

are

doing to carry

Congressional mandate to
America.

Coordination of Labor
Information

Coordination—like understand¬

also

want

commend

the

apprenticeship agencies for
their maintenance of high stand¬
ards of apprenticeship in spite of
pressures brought to bear by the
passage of the GI bill. I hope they
will continue to use their influ¬
ence
to
prevent
the ^ breaking
down of wage standards and other
State

standards of

apprenticeship.

Labor Education

Service

sort
has been furthered this year by
the establishment in the Division
of Labor Standards of a small La¬
bor Education Service. This serv¬
ice does no teaching but prepares
basic
teaching guides
on
labor
Education

different

legislation, history and economics,

grievance procedure and other
aspects of contract administration.
It offers a national clearing house

in labor
ing—is important in meeting the for sound experience
Department's expanded responsi¬ education:;; It assists universities,
unions and other groups engaged
bilities,; The Retraining and Re¬
employment Administration came dn labor education to
develop
to the Department just before our their own programs.
Last March
last conference.
This agency was I appointed a national labor edu¬
authorized by Congress
to co¬ cation advisory committee com¬
ordinate the activities of all Fed¬ posed of representatives of the
agencies, except the Vet¬
erans' Administration, engaged in
retraining, reemployment, voca¬
eral

tional

education

rehabilitation.;

and

This

AFL and CIO to review their own

educational needs and to assist us
in

developing educational stand¬
The establishment of such
was a recommendation

vocational ards.

it has
brought many groups together to
work out common policies.
One

you

such

at least to make a

joint

year

committee

recom¬

service

made at last year's conference
glad we have been able
start. You asked
then for a committee on labor
education to be set up at this con¬

and I am

unreasonable

sence

mands

and. serious

;

the ab¬

de-

wage

and

strikes

lockouts.

Every major and prolonged stoppage endangers our
stability, v: It further exasperates
the people and their elected rep-

resentaitves,v It risks the transfer

(

that

exasperation into hasty
agitation which will make more *0
difficult the attainment of healthy
industrial relations,,
the

National

12th

Confer¬

resolution was adopted
summarizing the common pur¬
poses of the Federal and State
Governments
in
the !, mediation
and conciliation of disputes. Since
that time, we have been trying,
to carry out the spirit as well asence,

the letter of that resolution. Re-

cently

sent to each labor £oma
copy of our instruc¬
tions to our field staff. These in¬
we

missioner

structions clearly pointed out

responsibilities

their

working witi*

State mediation agencies.In ad¬
dition I have told the commis¬

sioners :that^

would be glad to

sit down and work out the details

needed

carry

out our mutual

commitment last year.

Another

recommendation yon
became an ac¬
tuality during the past 12 months.
A Federal Interagency Commitlast

made

tee
up

year

Migratory Labor

was

set

by General Erskine of the Re¬

training and Reemployment Ad¬
For

ministration.

several

years

have been concerned to im¬

you

prove living and working condi¬
tions for migratory workers
irs

industry, agriculture and transportation.
You felt that a good!
deal might be done under exist,
ing Federal and State authority" ;
and you wanted an official state- Yyy
ment of what further legislation®
,

This

needed.

was

Interagency

Committee is composed of repre¬
sentatives of the Labor and Agri—

the Federal!
Security and National Housing:
Agencies and the Railroad Retire¬
culture Departments,

ment

Board,

that

you

And

can

assurer

people in the La¬
have worked very-;
this committee. While its: v.:;
many

bor Department

hard

final

report

subcommittee

gressed

findings may

not

quite ready,,

reports

have

pro¬

point where their
be shared with you.

•

tion.

tives of American labor and

the

without

ernment, they made enormous ad¬
in the variety and quality

vances,

2,000,000—out of 60,000,000.
That's pretty close to a you gathered here last year, we mended a set of employment prin¬
for veterans
and other
minimum in a period of great eco¬ rejoiced together that a repeated ciples
Designed to minimize ference. You will see from your
recommendation
for workers.
nomic change in a country so vast conference
the consolidation of labor func¬ the competitive disadvantage of agenda that we have met this re¬
as ours—with
a large number of
;
' ;
overlapping
but distinct
labor tions in the Department had pro¬ long-term absence from civilian quest.
markets
in which there cannot gressed
substantially.
But;, the employment, it is hoped that these
Labor-Management Harmony
be complete mobility of labor,
A consolidation had taken place so nrinciples may be a useful guide
I am especially glad this morn¬
cloud on this generally sunny sky shortly
before
the conference, in reducing some of the employis
the growing number among that about all we could do was to I ment problems of those job-seek- ing to be talking to so many rep¬
resentatives
of
organized labor
fhe remaining unemployed who introduce the new agency heads 1 ers I mentioned a few moments
is about

increase in the duties and respon¬

in the States and
we in Washington will be think¬
predicted for the postwar period- ing more as we thought during
means

the

that

confident

proposed labor legisla¬
and
administration?
* It

no opportunity to say ;
thing to management 7
every time I get the chance.
Now anybody who understands
such things, recognizes the need
of working people to seek reason¬
able wage adjustments in periods
of rising prices, x These adjust-* '
ments have been going for some'

inflation, is predicated

Proposed Labor Legislation
does

lenge'of the months ahead will be
met
by the State agencies to
whom the State and local employ¬

developments labor departments, you will have
labor, economic and social an opportunity this afternoon to
fields vitally affect the American consider the job to be done and
worker.
Participation by the the transfer at a committee meet
United States in all phases of in¬ ing on the subject.
,r
ternational relations is
growing
Fortunately State labor depart¬
fast, as we all know. Consequent¬ ments are well equipped to meet
ly, -there has been a substantial the need for training workers in

out

What

meet

in the

the wage-earners of

terms

whose

agency

strained

have

y ^,

ment. International

now; our

into

peacetime employment. Less than
a million
are
seeking work and
one
and a half million—most of
whom

;

Department's

The

facilities

concerned

high levels of employment and
production and avoid disastrous

prime na¬ the world and on the
On
tional policy to try to- stabilize scene are equally important.
the
economy
and to maintain your chairs this morning is one
evidence of a revitalization of our
high levels of business activity.
With the removal of most remain¬ Departmental Information Serv¬
ice.
It is a copy of the first issue
ing wartime controls, we now
face the crucial test of whether of a modernized Labor Informa¬
The Department's
we can do it.
I realize we face tion Bulletin.
difficulties.
But I point out that activities today—in operation, re¬
maintaining the high levels we search and publications—cover a
It is my hope
now
have is considerably easier tremendous scope.
than pulling up an economy from that by this bulletin and other
depression lows. We might have means, we can keep the nation's
had to attempt the latter, if re¬ labor, industry and people in¬
simply
and
truthfully
conversion employment and inr formed
It

1946.:

labor officials who are

State

withe maintaining, la.4
bor-managemerit
harmony
and
avoiding work stoppages. I assure

way,

and

tion of employment opportunities
for handicapped veterans and ci¬

common

their

are veterans, although
represent only 20% of the gration into the Department, in
labor force.
About one-third of the committees which have been
the mark of an experienced con¬
set up for this conference,
the veterans now receiving com¬
ference delegate came to be his
•Y Since last we met, an
Act ; of
pensation for unemployment have
frank admission of his problems
been\ on the rolls 20 weeks or Congress was passed which today?
of the things he hadn't achieved.
permits me to introduce to you
longer.
•/v -;:C
He Came seeking help from other
the Under-Secretary of Labor, Keen
Now we Americans have had a
states who had met and perhaps
Johnson.
He is the administrator
solved a similar problem.
I was good deal of experience with of the Department through whom
booms
followed by depressions.
very impressed by that spirit of
all division and bureau reports
Are we now approaching a danger
humility.
And I think it's a
and
problems channel.
I want
point?
If you read the business
pretty good guide for me—and
you to know Keen Johnson.
You
perhaps for you—not only here pages, you know business ana¬ will find him, as a former Gov¬
but
throughout the year.
Any¬ lysts predict some kind of eco¬ ernor of Kentucky, ' thoroughly

needed to

Thursday, December 5, 1940

and

tested

ence.
on

the subject

I hope it
ods

against

your

experi¬

There will be a committee?

held this afternoon.

will also consider meth- 1

developing public under¬

standing and support for meeting

Volume. 164

Number 4548

THE COMMERCIAL & FINANCIAL CHRONICLE

F
"♦J"*

the

heeds "> of b thesedisplaced

-people.

•

r,»

?,'v.

Fair

Labor

Standards Y7\,

Last year you went on record
for an increase in the Fair Labor

;

Standards Act minimum to 65 and

ultimately to 75 cents.

If 65 cents

justified last year, it is im¬
perative now after a further 15%
was

offer

labor' <' departments

stater

technical assistance In developing
State-wide safety programs sim¬
ilar

the

drives.:

industry

war

Committee

safety
Safety

and Health and Workmen's Com¬

pensation meeting this afternoon
will bring you a report and seek
your advice on improvements.

the

to provide "a

■

minimum standard

living for health, safety and
well-being of workers.'? It would

: appear

not

that 65 cents today would
restore that standard. A

even

committee

society deems decent. When work¬

in State laws has occurred in

re¬

unemployed—or are paid
less than living wages—the pub¬

British

faces not

than

Americans.

ers

are

Indeed !in
we

afternoon,
Here
will give us your
..best judgment on this problem.
I know you have considered this

pensation as it was conceived over
a
generation ago, that is to pay
the injured workman up to two-,
thirds of his average weekly earn¬
ings. tV At. present wage levels,

will

meet

hope

this

you

question because 16 States and the
District of Columbia are active in

States award him

most

than

less

lied agency, with a
for the purpose of

the

workers,

14 States still have not

minimum.
'

acted

remove

A Four

issued

States

orders guaranteeing weekly wage
rates from $20 to $22.
V

The high levels of
employment
and
production .expected
next
year will

behind

place the

the

same pressure

enactment

State

have,

enacted

injury funds to facilitate
employment of handicapped
to

discrimination

this

excuse

against - their

abled veterans and

for,

German staff,
implementing

whole; later, French

rence

plan
control.
a

currency

dis¬

on
>

concur¬

banking and
,•

civilians.^ Al¬

!>
: :■ t/f
'■:U.'
'•
T'Hr'
though 33 States provide compen¬
French Views on Central :
sation for some occupational dis-.
Administrative Agencies »
eases, only 16 have all-inclusive
Whether the Allies- can or can¬
laws.
Surely today there can.be not
run
the
German
economy
no
argument that : a worker; in¬ without "the"-assistance. of Ger¬
jured or killed by .an occupational
many i»: ho point of discussion,
disease —and his family —needs
nor
is it relevant to Allied con¬
workmen's, compensation just as
trol.Yin the French opinion, there
badly as the one who .suffers or remains a certainty that agree¬
.•

wage
and hour standards and
■I their extension as we find" behind
i'

the; Fair

Labor

Standards

Act.

Those high levels should increase
their

acceptance

which

by '

industry,

induce

cannot

competent
people to work for sub-standard

f wages.
The

;

*
great

Workers

today

threat

demand for

raises

women

which;Ytheir* traditionally

wage-rates offer to .pay
levels of male workers. : Further-

'? more,;
>
unfair
?■

those
to

tially the

rates

women

same

repeat what

basically
doing substanare

work as men. I'll
said a month ago

to a group of women union representatives {meeting
with
the

? "Women's

Bureau:

the

De¬

from

industrial accident.

Many States lacking these tested
safeguards will have legislatures
sitting in 1947.
^

the

anew

'lower
;

dies

On your
have

seats this

series of

showing

the

morning you

Legislative Fliers

States

which

have

those which do not have any
We

and

of the laws I have discussed..

they will serve as signal
for you in checking the
nrogress of your own State, in
determining what you as a labor

hope
flags

commissioner

labor

think

leader

to stimulate

you should do
interest and support

merger,

other

any

has

instance,

allied

thrown

and

agreement

vivid light on; basic differences In
the handling of German economy.

This

"ivY

/.'■ ■ ■

American

meant the renouncement of inter¬

""*1

.<•••;

statement of opinion means
blame, but; the French joining

definitely have made, even-worse
the cleavage with eastern concep¬
tions, which, in the present cir¬

Germany

(Continued from page 2884)

pooling of the proceeds of all ex¬
ports to pay for authorized im¬
ports; one should note as early as
October 1945, French concurrence
in a plan setting up a central al¬

imports and exports for Germany

1940

since

States

Although

to comb,:

French Policy in

second

earnings..

;

The French do believe that the

into the Western New Deal would

inHhe past year. All
except one have hourly standards
•as high of higher than the 40-cent
wage- orders

his

not

years

half

own

It faces

all

says,

labor legis¬
safety valve in Our eco¬
The best way, he
to keep.;'our workers from.
a

minimum wage
standards. Nine States have issued

raising their

you and me but

nomic system.

support,- In addition,
lation is

important respect,
today to enforce

one

failing

are

only

only
against the economic backdrop of
1947 but against all kinds.of eco¬
nomic conditions and-..for many

the basic goal of workmen's com¬

and

wages

issued.

was

but also for the poor and the weak.
This is the true challenge that

cent years than in any other.f But
we
have a long way yet to go.-

hours

quadripartite agreement and; dim
profound disagreement between
the "'allies,' which all concerned
and Germans not last, noticed as
soon
as
the American proposal*
a

lic foots most of the bill, for their

Workmen's Compensation
cost of essentials,:as ."i
shown by the consumers' price in- i t- Workmen's compensation' is a
dex. Congress set 40 cents in 1938 field where more i 'improvement

■Pise

they'"'' have- become' ■ meahlngless. turning communistic is to make
labor vlegislation can be: of our system work.
It must work
great public value. In a civilized for the benefit of all.
We must
society, Mr: Witte says, all bur constantly raise our sights.
We
people ' must somehow be sup¬ must achieve a better life not only
ported—and at standards which for the well-to-do and the strong,
But

292#

could

ment

have

months

been

reached

rectives

control
agencies, under allied supervision.
American

tice1

by the three western powers con¬
cerning allied control of banking.
This too has failed, due to insuf¬
ficient preparedness of all the oc¬

cupying
basic

economic. agencies as
in the
Potsdam

central

for

to concur on the

powers

financial

principles
pro¬
as a whole.
:
The French proposal on central
agencies;; may have been once
termed
as
a
mongrel, which it
may well be; the hurriedly pro¬
ceeding American project may
posed for Germany

well

termed

trying to push

| t',\ '{■yn

brave horse

unfinished cart.

soon

III

all:

Cartels

The Dodge plan has been gen¬

considered, in French cir¬

Council,

with

Control

the

'a sound basis for the

occupying

un¬

this

respect, the French
play their part. '

A'y
American

are

readjr
,

'•

■

Economic Policies in

Germany

Seen by

French

The French admire the

sive

powers

effort of

the

impres¬

American

ele¬

ment in'Rerliri and in the zone to

reach

prortiptly a semi-permanent
organization of German economy.
There is

the

some

doubt, however, as
centralizing

relevance^ef

policies

this

Time will

present

stage.

obviously diminish this

difference between American anrid*
French views. The American treat

the

Germans

with

and

mixture

complacency; the

French treat them with caution.

FinancialiPolicy, Trusts,

connected

;

degree of

some

derstanding^ can \ bd reached be¬
tween

lavishness

cles

,
;The French, .believe that, if a
German staff is necessary to build

aforementioned

similar view has been adopted

erally

no¬

cumstances, can .still possibly be
avoided,. [

put forward by the U. S. element
in art earlier plan, of May 1946.

provided

the

should

French proposal was identical in
its terms to the interim, solution

cerped.

ago

readers

that

the extent
and timing of German adminis¬
tration, if the fundamental issues
of economic unity had been gen¬
erally accepted by all parties cons
many

settled

rehabilitation of the German fi¬
nancial fey stem. Although
sions are still pending on

discus¬
the va¬

rious

terms of the American pro¬
agreement, still the responsibility,
difficulty will
cannot yet be delivered entirely posal;-'no major
intoJ German hands. ( One, simple probably arise from the French

Bitter experience has taught the
that their eastern neigh-

French

bors:

are; haughty if victorious,
cringing if defeated, and both,
plaintive and insistent when they
recover.; German economy is fetill
weak, yet it bears within itself
great, arid the French believe,
dangerous «potentialities.; United
allied

policies, backed by the rpo^t
appreciated American good will,
will not eliminate further evil de¬

question should make this clear: attitude., No more will the French velopments unless they are im¬
against : any
provisions plemented with
Does anyone believe that a Ger¬ argue
proper caution.
which tend to eliminate excessive
man
official ? taking
alone
the
tween employees.
Seven States
concentrations of economic power
whole -responsibility
of; foreign
have already taken the lead in document which — whatever else
'trade would make his utmost ef¬ in German hands, either at home
equal pay legislation.
And the you lack time to read-r-I hope you
forts to balance the imports by or abroad. Some slight difference
economic
outlook
again would will make vour oWnV It is a soeech
has appeared, howeveryi between
exports and moreover obtain a
seem
to call fqr further efforts on "The '-Future : of State Labor
the American and French view
surplus? The French answer is:
on the part of other States next
Legislation" bv YEd -Witte of the No, and would point out that any points,
as
regards
trusts,
i. el :<?; An investment banking syndi¬
%year^;>V'; MffY
University of Wisconsin, and for¬ conscious German'would rather "Konzerne" on the one hand and cate headed by W, C.
Langley &
The
cartels or "trade associations" on
large number]; of • young merlyf here with the War" Labor make a point of getting free de¬
Co.,.:and- Glorey Forgan & Go, is •'
<■:
It is really an extension
the other. Americans as a whole,
people still employed has: kept Board.
liveries of -wheat from > abroad
offering today (Dec. 5) an issue-of
both State and Federal enforce¬ of his address to the International
than get his fellow countrymen seem to foster their chief preju-; 300,000
shares
3.8%
preferred
ment problems boiling. ! They also Association of Governmental: La¬ hard at work to
dice ] against the latter,... as con-*
pay : for
it or
stock; (par,; $100) ,of Philadelphia
keep the goal of a 16-year mini¬ bor Officials at their, recent Mil¬ eventually have a surplus of ex¬ chived, in American law; whereas Electric Co. The shares are being
partment is unwavering in its op¬
position to discrimination as be¬

changes in

for

needed

laws next year: o:
On your chairs too is a masterly

■

•

your

Phifa. Electric Pfd.

by Langley So.

mum

waukee convention.-

or,

heard it.

age for factory employment
during school hours right be-

fore the eyes of State administra¬
tors. Georgia was added this year

•

to the list of States

attaining that
The legislative sessions in

goal.
1947

;

opportunity

for

other

States to try for this standard.
•

offer

and were. kind

all have copies,

enough

Mr; Witte indicts

our

to let

American

failure to keep our labor laws upto-date—better to repeal our la¬
bor

This child labor discussion has

Some of you

The Association printed

laws, he says, than to keep
kidding the American public

that they are adequate. Little new

probably caused you to wonder
what we in the Labor Department
are doing in this field since' the

since

transfer

;

since the Supreme Court gave the

the

child

welfare>''functions

:of

health
the:

and

Chil¬

legislation

has
been
developed
1937—less has been-passed

constitutional

dren's Bureau to the Federal Se-

when it

curity

low.

was

.••

lighti

green

red

than

least yel¬

ports pay for occupation costs or;
as has been lately suggested, for

reparations

outY of turrerrt: pro¬
duction: Y The French believe that
top directives

imports and ex¬
established ( by
some
Allied agency, should also
be implemented under the imme¬
on

if V firmly

ports,

diate control of

Agency.

He says our laws are spotty

The
Industrial
Division of the Children's Bureau,

control board

—with many gaps—and I am sure

which

you

administered

the

child

la-

and I agree, : Only 15

million

bor provisions of the Fair Labor
Standards Act and carried on pro¬

dollars a year is soent by all the
48 States in the administration of

grams of research

labor law.

and promotion

of child labor and youth employ¬
ment standards, remained ..in the

Department? I transferred it intact
to

the

Division

ards where it is

Child

Labor

now

known

and Youth

ment Branch.

The

Labor

Division

Stand¬
as

the

Employ¬

/
Labor

Stand¬

ards will tell you this move was
salutary for them.
For example,
V they have been enabled to inte¬
grate even more closely their gen¬
eral safety and health work with
the need to safeguard special haz¬
ards for young workers.
Many of
you
know concretely how the
Division has attempted to convert
the best of its war safety experi¬
ence into long-term use for peace¬
time production.
You will recall
,

that that

was

mendations

one

last

of your recom¬

Modest
budgest increases permit them to
year.

] Economic -Changes have made
bur old legal standards well-nigh
meaningless—this desoite the fact
that

progressive economy
calling for constantly rising levels.
It's no protection to young people
to keep maximum 48-hour week
ours

laws
the

the

statute

books when

industrial pattern is 40 hours

for everybody.

■

Y] Ed Witte calls

;

]:•; Y

back to funda¬

mentals—and that's good in a pe¬
riod of change.
He reminds us
that
the
it

labor

law

basically protects
unorganized.
But
protects organized labor

weak

also

and

against the threat of undercutting.
safeguards progressive employ¬
ers against unfair competition, its
It

ultimate

sanction

course

whether

offered

that big concentrated firms, with
their technical and financial con¬

accrued"

dividend.; The issue

allied body or

atop.

share.

industry. The French would there¬

the

fore

elimination of the

stress the

accept to t maintain
of the cartels, under perma¬

trusts, ? and
some

nent allied control.

transport,

will

sons

lead

during
called

discussions

the
and

ill-called

to the

same

con¬

French

the proposed French pol¬
One should nevertheless re¬
that

allied

as
long
as;,one
soldier remains on

German soil any misforipne, col¬
lective or private of the German

people will be charged • by. them
against "occupation" as a whole.;

Views

T American
France

occupying countries will
obviously commit themselves into
further
responsibilities if
they

single

so-

"decarteliza-

food, in¬
similar rea¬

The

member

clusion.

icy.

This view has

not, however, prevented excellent
American
French understanding

In other fields such as

dustry

awarded

nections, constitute the main fac¬
tor of war potential in German

official with a German staffs This
is merely an illustration of the
French proposal, issued in last
August; on the establishment of
central agencies with
an
allied

the French would rather consider

share and

bid

was

sale

102.289

per

Proceeds from the sale Of

preferred

new

stock

and

bond issue of

new

per

competitive

awarded

Dec.

10)

will be used to

$18,000,000
notes

$30,000,000 (to*^
competitive sale

and

company's

pay -off
promissory
part of the
construction program

lVa%

finance

now
under, way
and
planned
through" 1947, requiring approxi¬
mately $42,000,000. ;•;•:■•

J:; Other members of the selling

and

Dec.

$104.11

Merger

British

has ] declined

Zones

General

syndicate include: White, Weld &
Co.; Salomon Bros. & Hutzler;
A. G. Becker & Co. Inc.; Alex.

McNarney's proposal to join the
bi
zonal
organization
already
adopted
by
the
British.,- One
should bear in mind that, doing
so, the French have stood on a
determined principle, abandoning

Brown & Sons; Coffin & Burr,
Inc.; Dick & Merle-Smith; Hallgarten
&
Co.;
Hornblower
&
Weeks; Lee higginson Corp.; R. W„
Pressprich & Co.; Spencer Trask

the

numerous

and

facilities

advantages in kind
which

they

have derived from their
tion

might

connec¬

Co.; Tucker, Anthony & Co.;
C. Allyn & Co.; Blair & Co.
Inc.;
and
Equitable
Securities
Corp.

the

neighboring zones:
Wheat, coal steel and other com¬
modities are
in the
hands of
j- At a further stage, it maycwell
Western
Allies,
and
happen, very, soon in some in¬ France's
stances, that the Germans'1 are standing alone the French zonal
able to control their own activi¬ authorities have to fight hard and
ties in some definite field. France pay cash to secure these commod¬
will not object to that, provided ities, with doubtful success, the
the general frame of German ad¬ prosnect of famine and certainty
ministration has been drawn, on a of comparative weakness in the
decentralized basis, provided that French zone economy. The French
the basis of such overall jmanage- definitely hope that nobody will
•

ment

it .promotes the general
public welfare. Most of. our labor

established

laws won't meet this test because

implement

the

settled, i. e. that
agencies have been

firmly

Lander

previously and
in the field such

can

di¬

blame

them

their

determina¬

considering that they did
best, on this occasion, to
maintain
publicly
the
original
tion,

their

N.Y. Office for Allied

Products Corp.
J. M. Doroshaw,

President
ucts Corp.,
age

Financial Vice-

Allied

Home

Prod¬

Beloit, Wis., will man¬

the company's newly opened

office at 20 West 43rd Street, NewYork

past
ness

City.
Mr. Doroshaw in th^
in the investment busi¬
in Chicago.

was

has

Europe's Future in Our Hands
(Continued from page 2882)
tually expand them—but Europe
also short of coal.

importing approximately

half

with

her

the

United

States,

one-

and
in ' the

average,

prewar

strike

present

the

few

weeks she will import considera¬

bly less than that amount. I need
not

emphasize the importance of
in rebuilding any industrial
anywhere; in the world.
Now, this shortage of coal is, of
course, due. to many factors. One
is a shortage of miners,

coal

economy
'

t The largest coal-producing area
in

Europe,

as you
Those mines

Ruhr.

tained

the

know,, is

main¬

were

during the
war
by slave labor; As soon as
Allied troops entered the Ruhr,
these people scurried for home.
Those German miners that still
large- part

remained
derfed.

existence

They had

the result has
those

areas

un¬

that even

where- you have some¬

thing.

were

shelter. And

been

the

necessary;- labor

supply, you have high: absentee¬
ism.
People take a day off to go
out looking for: food. They take a
day off to repair the roof or get
their houses in living condition,
and this

eighteen months after the
Allied troops came to the Ruhr.

Moreover; there has: been: vir¬
tually no replacement of mining
equipment.. Not only has a tre¬
mendous amount been destroyed,
but that which wore out in normal

4 If you take that single factor in

tjie

economy of Europe; there is
little hope for real revival and
expansion of industrial activity
without very radical changes.
How

much

that

| situation

gineers who have
recent months

agreed
with

have

that it would

much

tion of mine s- over to mining
engineers rather than to distribu¬

tion
could

engineers much
be gotten from

the
>

coal

Ruhr
v.-

•

Transport Situation

Europe is short of, transport; Lo¬
comotives, freight cars* bridges
and rails
are
all acutely short.
Rights of way still have to be re¬
paired and rebuilt.
Many a

double-line

track

single-line
fact

that

f$als

track

there

available

become

has

because
not

were

the

enough
both

maintain

tracks in efficient operation.;
;

Despite

the" difficult

situation

admit, after looking the situation
over, that Europe has actually ac¬
complished miracles in the past
year and a half.
.
r

many instances, output has
tripled and quadrupled, and. if
oine were to point to any one fac¬

tor

that accounts

that

has

think

taken

for

revival

place

that that

thus far, I
single factor

one

is UNRRA.
At "a

the

meeting in September at

which 21 nations

represented
the unanimous
opinion of everyone present that
in

London, it

•

had

many

were

was

not

been

the

for

railroads

UNRRA

that

are

operating, could not have
been operating; that much of the
progress
that has been made
would not have been made, and
now

political chaos as well as economic
chaos might have reigned in many
parts of Western Europe.
Need

for

Raw

af the
how

Materials

are

move

will'follow.
of

Europe cannot reach the stage
production where she cam pay

for

the

credits

imports she
are -

until

needs

made available which

will make it possible for her' in¬

dustries to get going at a rate- in
excess
of what
they are now

operating on so that she
surpluses to export,

may

have

future

trade.

ing economic

and with¬

recovery,

ests

where,

the

present ^

that

same

moment are

asking

question,,"What is going
to happen to' Germany?" And un¬
til the Big Four get together and
decidev once-and for all' what, is
going to happen to
Germany,
these

countries

cisions

make

cannot

de¬

Foreign;;; credits

can

tell

which
we

way

going
sources
of foreign
ex¬
change to-pay for the things we
need to import."
Holland, which was an impor¬
are

tant

of German

user

machinery,

is short of spare parts;, She asks:

"Shall

have

re-equip Our
plants with machinery from other
countries

or shall we be able to
continue in the. future to get spare

parts from Germany?".

She is not
a sking that
we enlarge the ma¬
chine tool industry of
Germany
but

she

wants

answer

received

have

Western Europe. There is not a
single country in Europe that does
not feel absolutely convinced that
if our economic system, sags; they:
go down with it..
s
There is no longer any way; for:

1^
loans

large

fears, all

behind it all of the

prohpecies of European dis¬
integration, all the - talk of na¬
tionalization and Communism in

it possible

that

those" countries are countries

itself from the
of what happens

Europe to isolate

from

repercussions
here.

the United States already-ris go¬

were

available and, consequently,
foreign exchange was available
which- would permit; buying' in
the markets where they would

*-r\

Observations

Finally,
to

conditions

during, the next year or two,, that
of fertilizer.

present time

are

allocations

been

have

ple rather than in the fields that

they themselves cultivate*
If

is to look into the future,

one

is quite evident that there are

certain

responsibilities that rest
either on the^United States^ or on
the international

which

are a

organizations of

part.

•

Credit

of their

needs and: still have

own

.surplus to sell abroad to pay for
the things that they need,

*«.

|V •

The

Uf (

Extinction; of

•

JV1'f}

other

matter

; For
a

and

'
The

the Stockholder

illusion advanced by. the

Another

Impact

proponents of undistributed

profits taxation; is tfie claimed benefit accruing to the stockholder
class.
Actually, however, it harms equity holders as well as the
creditor class.
For^despite temporarily inflated dividend receipts,
the legitimate investing stockholder is penalized by the arb tranly*
and irrevelantly directed dissipation of reserves and working capital
covering his equityby resultirigly [increased dependence pn.banks
and creditors in times of depression;, and by an increase in. reorgani¬
zations and receiverships through the accentuation of the cycles in
corporate* health. In lhus increasing: the degree
by the bondholder and stockholder, such tax
counter to the basic aims of the SEC,
'

The

needs

want

sound

$7,157,000,000.

example, in England if you
businessman

disregarding

}

U,''

,•

V }

l'.. !. v

of speculation born^
policy runs directly
>

' ?

<■

Discrimination Against Small Stockholders and Little

The

that

long-term corporate, lending,

' ^ r 1 y '

T1"' ''I

Private

emphasizing .ij& the fact that priv ate eri terprise as we know it in
the: United States isri, no longer
existent in. Europe.
are

our

Enterprise
One

"Ponzi System"

practice we. have been com¬
technique and purposes in borrowing,
such as are followed by banks and other short-tornv creditors^iir
their commercial lending. .Despite debtor corporations , indisputable
obligation to provide for the repayment of their debts at maturity,
in this country corporate behavior has been woefully lax in safe-*
guarding the rights of the creditor class.
Our fiscal custom, legitimises perpetual "cham"-re£unding in lieui
of repayment at maturity. We engage in the "Ponzi system" of debt^
thiaf is^PauU is ^paid by borrowing; from Peter, and if -there is.
Peter available when a debt is due, Paul just does not jet paid.
This has resulted in recurring:; injury to bondholders and^ in fre¬
quent creation~-as in the railroads—of topheavy and unwieldy debt
structures. Unwisely we have not. followed European practice ut
providing sinking funds to retire entire debt issues- at their maturity*
A chief cause of abuse in "milking away" assets whichshould,
properly;cpnstitue the*backing,for:4©bt obligations^
over-borrowing,; has iri, many casesibcen: rooted in;the4above^ite<^;
Excessive dividend .paypients, In the railroad and traction spheres
such unsound dividend policy has in specific instances led to actual;;
default on debt. In the case of the railroads, we find that the aggre¬
gate: debtduring the period from; 1916 through 1934 showed a net
increase of approximately 21%—from $9,916,000,000 to $11.835,000,0Q(^;v
in the; face of dividends concurrently paid out . in the sum, of

the
pletely
to the effect that

Europe will cover about
70% of the 1947 fertilizer heeds.
Unless means are found for in¬

;

Our

(

Such, figures as we have at
such

system, At times

payment is a thorn .in the side of our capitalistic
Europe, of depression the repercussions are cataclysmic;

fourth factor is going

affect

(Continued from page 2885)

prefer to buy.

expand your plant, you must get
permission from the Board of

to make

power

twn/countries,

you

question, you

behind that

not

The Need for

have

States?"

United

the

see

Europe to develop econom¬
ically in the immediate future..
The possibility of expansion and

Concretelyy Belgium, for exam¬
There
is- no
way
of getting
ple, used to secure a large amount around the question of raw ma¬
of foreign exchange from trans¬
terials, .without credit. That an¬
portation through Belgium waters swer is going to have to be faced
and
through Belgium ports of both by our own government and
German, products. Belgium asks:
by the International Bank,
v.,,-Are; we going to have anything
As I said a minute ago, and I
like that traffic or shall we have
want
to
emphasize, the longer
any traffic at all in the future?"
credits
are
delayed, the longer
They
are
not
asking
that will
be, the length; of time re¬
that,
traffic < ■> be revived.
All.
quired to get m&ny of these coun¬
they ask is: "Tell us whether tries back
to the point where they
it is going to be revived or not so
carf produce enough to take care
that

growth, with the exception of one

necessity,

significant;
question that I; was asked wasi
"Is there going to be a depression:
most

the

think

of the

ing back wood pulp at a price iri
excess of what she could get it

Will be.

will have to turn if

next few years.

probe

nomic

We found hundreds of bilateral

one

picture in the United States in the;

for

remember

must

thing: What our policy Wilh be^
will, in effect, be determined,; by >
one
other thing: The economic:

only in the United States
is. there the financial and the eco¬

what their next steps

But

Europe's Future Up. to Us;,/f;i

Sweden

have a lot to say
will determine

That

it.

which way Europe goes.

cause

was

the Interna¬

subscribers to

gest

Europe will go the way that the
United States wants it to go, be¬

be. found elsewhere for these peo¬
at

that first

be assured

order, to

;

creasing that supply, the crops of
certain countries of Europe £be
now is in, is a decision,pit.what
going to be smaller than they
we- are
going to do about Ger¬ otherwise might have been, with
many.
•
■
1
the result that food will have to
The German Problem

their

agreements,
many
of things come first,
which are uneconomic, many of J, All* of this, I think,: in the last
which the governments of the va¬ analysis,
leads to' one definite
rious countries would rather be [conclusion as to which way Eu¬
relieved of.
But they have had rope is going to go/-" •
"

rapidly beyond the stage she

All of Germany's neighbors

inter¬
respective countries

bilateral

out which Europe cannot progress
very

alternative other than

the policies of the business

literally covered with

Europe is

for the governments to determine

international

course

made to

A second factor which is delay¬

Business?,

procedure'discriminatorily penalizes both small stockholders

and small business.

The differential between

the 27V2% and 38y2%

retained

imposts in correlation with the $100,000' dividing line of
earnings, means that the predominating humbers;bf; smaller Share-;;
holders in the bigger corporations pay personal income- taxes at a.

higher rate than do the wealthier owners of the majority .of smallec
And this additional impost; further aggravates" the evils

businesses.
of

double-taxation-^-actually creating triple-taxation,;

the relatively weaker corporations^
strong corporation, possessing large reserves, can escape the levy

; This tax discriminates against

;

The

Trade to expand that plant.
The by' simply disbursing its earnings; while weaker companies are
is-going to be able
probability is that the Board of definitely prevented from building up the reserves- of which they,
to get spare parts from
Germany Board, of Trade will say;, "You.
may be in dire need.;
.
<
,
so that she: cah; make tier
plans can expand it on the condition
-:
' •
' Present Untimeliness
;; .. ..r
4;''' - -. for' the future.
that you build your new plant
The contempla'ted, tax policy is particularly indefensible at the C z e c h o s i o v a k i a, which de¬ down in South Wales." In other
pended upon certain raw materials words, the right to invest as you present time:; Strikes'; have severely depleted the cash positions • ot,
and
which
sold
a
considerable will and where, you prefer is no many industries; the/resources of many businesses are being underr
mined by the cost4price. squeeze; and liquid assets are required for
amount of goods, to Germany, is longer a free right in Great Brit¬
asking the same question: "If we ain. In more aggravated form this the maintenance ol ; increased inventories on the higher, plateau o€
are going to plan for the future of
is. true every where in Europe.
prices.
(;
'
,
,

whether she

industries,

our

much of

must know how

market

we are going to
have in Germany and how much
can

raw

depend

upon

emphasize that in

instance

did

countries

these

Germany for

materials."

Tn want to

"Tell

the most

about

agreements of that, sort in exist¬
ence.
They were the result of

tfle

for

the

purchase these
very rapidly
beyond where she is at the: present
time; without credit, and the. long¬
er the availability of these credits
Is delayed the longer will be
the period of. reconstruction that

many

ended, is

tional Bank and

there is

essentials and

has gotten—how to build on that
base that has been created since
war

ly ideological.. In many instances

lor in Finland..

that Europe faces

present moment, namely,
build beyond where she

stimulate

ing to be determined by what we
do 'directly
and what
'v do
through the International Bank—
because after all we are the big¬

which is going to

A third factor

going without it.
:
Europe cannot

The problem

them

of Europe

whereas

need

that

economic recovery

that prevails in Europe, one must

them,

getting,

countries

longer has the right to

to make a deal with
whereby she is sending
much, more badly and where the to S weeded steel, of which Sweden
possession of these things " would herself is a big producer, and tak¬

unanimously
be possible

tration and by turning the opera¬

can

The privato international

buy and sell where he will.
,Nor are these restrictions mere¬

short of, plus a lot of determine the extent and rate of
Europe is short of European economic revival, is the

are;

course,

different type of adminis¬

short of everything

trader

to, invest where

freedom

permitted to go, so we
make our plans accordingly."

things.

other

there in

been

■

will

Europe is khott. of "fundamental
productive equipment in terms of
machinery and of parts for that no alternative other than to make
such bilateral agreements.
machinery.
J
■
Belgium needs wood pulp and
Europe does not have the fh
the only way Belgium could get
nancial ability to buy these things..
Certain countries that are able to wood pulp, having no foreign ex¬
purchase certain things ■ are, of change with which to buy it else¬

what it actually was no one can
answer. But American mining en¬

lumber; Europe is short of hides;
Europe is short of steel. She is
short of lead, coal and coal by¬
products, zinc, tin and many of
the other*' Essentials that go to
maintain modern" industry. And

avoided had the

approach to the mining of coal in
Germany been different from

other

operation has not been replaced.

could have been

materials.

■} Europe is

Europe today is producing ap¬
proximately 72% ot the coai that
she produced" before the wan She
i^

part one of the importation of raw

the

he will.

1946

Thursday, December 5,

THE COMMERCIAL & FINANCIAL CHRONICLE

2922

the

officials
ask

that

any

Ger¬

be revived along the lines

the past.
us

the

All they asked was:
direction Germany

Similarly in regard to foreign
trade—both

imports and exports.
can sell
their goods
areas
where they can

Businessmen
in

those

get the type of foreign exchange
that is needed and then can im¬

those

port only

things

that-; are

maintenance of
the economies of their respective
countries.
'.' ■ ■ ■ " ^
essential

the

Presumably two cornerstones of
increased

this tax, in
structive

employment. But
hinderjing;the devotion of accumulating earnings to con¬

investment in earnings assets, like building, and machinery,
and employment.

assuredly retards expansion in heavy goods industry
It fallaciously assuhies

private investor no longer

that "profits" are an arithmetical

of accumulated idle cash.

purchasing

power;

The

ourVcuixent economic aims are

'production.; of durable goods and full

employment and

And, basically, it embraces the

rather than production is the
high national income.

expression.,
fiction that

mainspring of full
.

1...

Volume
yvy.:,

THE COMMERCIAL

Number 4548

164

FINANCIAL CHRONICLE
&

tioned

I
•"

(Continued from page 2888) •
economic
processes
have been

completely disrupted, and it. is
only through government that the

economic life of the country can
fee reconstructed,-We must recog¬
a considerable degree oi
socialization is not necessarily in-

nize that

/V *... consistent with the preservation
.!
of the basic personal freedoms in
•

•

which

fervently believe.
degree
of
socialization,

•

The

however, is still to be determined,

•

and

that

I ram- speaking,; of

;

mitted

find

success we

expression.

The

attain in developing a

stable and expanding economy in
this country will influence the

-•

trend of opinion abroad.

•

since the end of the

doubt

course, of those countries where
the will of the people is still per¬

•

.v.,

can

countries;

;

there

our example will affect the politi.cal and social movements in many

war

So far
our

ex-

ample has not been encouraging.

From

•

abroad

economic

our

and

/ social
//

our

life appears chaotic with
series of strikes and with our

price inflation.
' 1
In spite of the many diffieul-//ties, I personally, feel that ouraccomplishment in reconversion has
»

•

-'. been

: in many • ways remarkable.
The speed with which we turned

/ fully i

employed, /

economy

high.

our - national
record peacetime

on a

We have, of

;

course,

many

problems

and - many difficulties
But I take great encour-

ahead.

agement from, the fact that, these
.are widely understood and can, I
believe, be effectively dealt with.

;
-

million people gain-

■

Labor-Management Problem
The labor-management problem

is certainly

/
-

ous.

The

disclosed."

public has a right to expect
management and labor to

both

restraint

show

risen

sharply, and thus real

one man

of price rises and
eventually gain a firm increase in

understand

real

wages if it will show re¬
straint now in its wage demands.

believe

that

all.

that

recognize

our

free enterprise

society.
can

ly in the public interest

I do

wheth¬

I feel

force.

that

thought

should be given by both govern¬
ment and business to the way in
which- new,:

business

ly,

our

can

small, and

free enterprise cannot

vive with overconcentration.

Policy

mass

labor leaders
point where we
defying the govern-

t
.

lonly. hope that any action taken will be
based on due regard
for the rights and responsibilities.
of : both management and labor

and will

give

lasting. basis on
sound relationship hea.,

;

„

which

;

tween management and labor

can
to serve the in¬

be built, designed
terests of the. people of the coun-

The National Association of

/try.

Manufacturers

portant

•

can

make

contribution to

im-

equj-

$ table solution particularly in using its influence to see that legis-

lation is practical in its appiication and not unfairly restrictive of

■

•

labor.;r Anw opportunity

to do a
really constructive job will soon
be given in" the hearings of tbe
Labor Committees, of the Con,

Members of these commit-

gfess.
s

tees have been grappling, with the

;;. details; of
■

labor

legislation v for

months,. .-and. according to

inany

their own observations,, they are
'//• still seeking, assistance in formu//; lating ; precise
measures ?- which
.

will

deal

with the present situa-

r;/ tioh. * It is easy; to point out the
v difficulties; and abuses of. present
.

conditions,
.be;

but

if ; you

effective, it: will be

desire

necessary

to.have specific, corrective propo:

;

sals which will protect the public
and at the same time obtain the

-'active cooperation of

your

em-

^-/vidoyeesrintfulfiBingythe^spbr^
■i
•

sihility of industry to
nation.
•

■

the

serve

M/;'/;

Question of Inflation

"■

';< ■:/:

i
/

Another .immediate problem is
the question • of inflation-r-of ris¬
ing prices, with the attendant day
of reckoning.
We are still in the

;

>
.

period when production has not
,

caught

with the

consumer

de¬

mands, pent up by the war. Steady
and increased production is, of

a per¬

that it is

time for cooperation ol
all American groups, If is no time
for

narrow

thinking.

rea

t e r

study must be given by all groups
to our broblems as

velop

-policies

whole to de¬

are in
We
must

that

welfare.

common

the
all

have

Expanding

full agreement between groups on
all

questions.. But I earnestly be¬

lieve that in

approaching the va¬

holders taken for any purpose

give prompt publicity to

and
any,

dividend action.
"This
for

is essential
business on

notification

;

conduct

the

and is particularly

important now in view of the re¬
cently. adopted 'Three-day De¬
livery Rule' under which securi¬
ties are traded 'ex-dividend' at;
least two, full business days prior
to the record date set by the cor¬

}

difficul¬
ties in setting up a schedule tor
the
distribution of a year-eno^
dividend,
please
communieato
with the Department of Stock
: List
so that our staff can assist
you in working out a mutually
,

reached,; and

gradually

perhaps arrive at

ear

greater and
agreement in

Various government. fiscal polir
greater degree of
of men the world
can
be helpful both during over.
This desire for security is wider and wider areas.
The people of the world look
and later Certainly in the minds of the peo¬
when deflationary tendencies ap¬ ple of this country.
Security of a to us for leadership and aid in the
pear.. I for one feel that high tax lob, security in sickness, security reconstruction of the world eeom
levels should be maintained for for one's family, security of the omy. Que government has devel¬
the present in order to avoid fur¬ farmer in the possession of his
oped
policies for international
ther • inflationary
pressures.
Of land/security of the businessman, economic c'ooperatiem The Inter¬
course*; taxCs must be reduced to particularly the small business¬
national Monetary Fund and the
give incentive to enterprise, but man.
International
Bank; have
been
reductions can be more useful to f
America and the life of Ameri¬ brought rntd being, At our initiaour economy at a later date.
Now« cans have been developed
tive discussions are proeeeding to-.
by op¬
our energies should be applied to
portunity, Opportunity is a cher¬ ward the formation of a World
check as far as possible inflation* ished inheritance that
Trade Organization to break down
must be
but we must at the same time be
preserved,, but our free enterprise barriers: to' trade and to expand
prepared to deal with the defla¬ system cannot survive unless it multilateral world c o m m e r c e
tionary tendencies when they ap¬ develops stability.
Free enter¬ These steps have been taken with
pear. v, '
.
' .
prise has developed the ability an unusual degree-of bipartisan
/; On these questions government, to produce which is the envy of support but our foreign economic
managementj ; labor, "and ; farm other, nations. : Every industrial policies need further implementa¬
groups should :work^; together;.;to nation desires to learn from us tion. There is. well-nigh complete
understand fully
our
teehhiques
of
production. bipartisan support for our for¬
vblved and attempt cooperatively T hse re
are,
however,
doubts eign political policies.
to deal with
It is equally necessary to work
them; effectively. abroad;; as to whether we ban at¬
May; I suggest that the National tain order under.: the dynamic for bipartisan agreement on the
Association of Manufacturers can forces of free enterprise.; I have further development of1 bur for¬
play a useful role in developing no such doubts, but I do feel that eign economic, policies, I hope
Wise, policiesand recommenda* greater-; attention .must be given your Association will work dili¬
tions in these areas.
by all groups—government, man- gently in this field in which busi¬
agement^ labor, and farm—to the ness has such a vital interest
Monopolistic Practices / methods, by which we can attain Certainly the objective of all is
Another field1 that is causing greater stability in our economy to promote an expanding world
businessmen concern is that of as a whole than we have had in economy through an expanding
monopolistic practices and anti¬ the past; We certainly know how world commerce.
^
trust, administration. In this ques¬ to
The vitality of the American
produce. We must learn how to
the minds

cies

the inflationary period

of a

policy

rious problems, large and small,
we
should attempt- to* find> the poration.
■
,
areas in which agreement can be
"If you encounter any

pf the urge for security that exists

the

view

large number of companies of de¬
claring dividends payable on the
closing days of..the year, your
special, attention is invited to the
listing agreement; to; notify; thd
Exchange at least 10 days in ad¬
vance of the record date of stock¬

the Exchange

It is easy to find areas of disagreemenf. It is difficult to find

Develop

"In

manent mark. I earnestly believe

important fective.

this

period is a
The Stock Exchange in its no¬
history of the world tice dated Dec.
2, issued by Vicehistory of our country President John
Haskell, said:
j,

the

greater unders t an di ng.
bership "includes big and small greater objectivity—in fact, more
business, can, through the devel¬ economic and social 'literacy. In all
opment of policies for business it¬ of this I hope the Department oi
self and in its recommendations to Gommercewillfbe; useful and; ef¬

How to

•

toward

when our actions will leave

can

Economy
equately housed must have special
;
consideration. Industry should do
To, my mind, however, the vital
everything it. can to avoid com¬ long-range question is
how we
peting for materials, needed for can develop in this
country a
this essential requirement and in
stable economy as well as, an ex¬
other' ways assist in furthering; panding economy.' I have spoken

low-cost, housing construction.

and in the

develop and prosper. Here again
I believe the National Association
of
Manufacturers, whose mem¬

for our veterans and other inad¬

"♦

efforts

its

VI believe that
time

Our

service.

Both the New York Stock Ex¬

companies regarding notification
the development of policies in the to the Exchanges of the declara¬
economic field through which in¬ tion of dividends in advance of
dustry and commerce can -best the record date of stockholders
serve the public interest.
set by the corporations.
/

render

<rA

direct

should

our people and to main¬
tain conditions under which new,

government,

Notify
Exchanges 10 Days
Before Declaring Div.

government of business as a pres¬ change and the Curb Exchange
sure
group,. but the Department have issued reminders to listed

sur¬

Housing

interpreted

meaning that the Department
should he the representative in
as

much to raise the standard of

small, rand growing business

Commerce Department

Listed Cos. Must

Pressure Group

I do not wish to be

production which have done

living of

all sponsibility, as you did so magnif-1

come

problem is to retain the values of

Fiscal

assistance.

growing

be fostered. Certain¬

free

responsibility as well as an op¬
portunity. I have confidence that
you industrialists and businessmen
in cooperation with your govern¬
ment are prepared to seize your
share of the opportunity and re¬
a

icently in the war, to contribute
tenure of office I can now to world economic progress,
assist in developing a proper re¬ and thus to contribute to peace.
lationship between;; business and
government. In this I invite your

assist

feel

during

through its own policies. In con¬
sidering proposals for absorptions
or integration, Boards of Directors
should give greater thought to

they tend to limit free enter¬
prices- and wages. This is now ip prise; In our democracy and our
the hands of management and la¬ free enterprise system, new and
bor to deal with.
growing business is a life-giving

price increase spiral.

should

to the future. It is

ourselves and

times with their problems. I hope

pri¬

whether these proposals are real¬

Your Association urged decon¬
trol by government. Now that the
controls are off, certainly the pub*
lie is looking to you for construc¬
tive- policies and actions to aid
in the avoidance of a- further

the
Department
in
with them. The Depart¬
ment of Commerce is the place in
government
where businessmen

enlightened

feel that business itself

not immediate profit.

The government has practically
from the control of

with

dealing

vate unregulated monopolies and
overconcentration are a danger to

■

then considering still ex¬

was

businessmen

further spiral

The policies of government can,
however, affect; inflationary pres¬
sures. It is the President's policy
ment ana the nation. There is not that government capital expendi*
•
time this morning to analyze all
tures should b^ kept to a minimum.
.of the factors that have brought
These needed expenditures can be
;
this situation about. It seems evi- more
beneficially made at a later
U dent that in the coming session of
time when supply of material and
Congress measures,- will be, pro-, labor is
more plentiful. The same
posed with the objective of. claripolicy should be adopted by state
'• fying the relationship between the
and municipal goyernments. in¬
/ rights of labor unions in repre-,
dustry should also defer as far as
senting their members and their practicable its capital expend¬
[responsibilities,to the public'.
*: itures for construction.
grown

and

work

power of

has

1914

ists today.:; Certainly the whole
question is one to which con¬
tinued study should be given.

fallen. But labor can
contribute to the avoidance of a

business
groups
will
to the Department of Com¬
merce
with your problems and

wages have

By the same token the public has
the right to expect that manage¬
ment will adopt pricing policies
based on long-range consideration

other

come

President Wilson's at¬

many of you feel that the problem

at the present-time in
their own long-term good as well
as that of the country. During the
last six months, the cost of living
has

was

titude

real " states

and

all

/ This

manship

one of the most sen-

find

people, and in contributing to

withdrawn

our

industry

and

our

vitally

tions
are
being applied which
is permitted make orderly conduct of business responsibility of the Department The people of the world want
difficult. This is no new problem. is to promote and foster commerce peace and security. The American
to / produce
without
stoppages
and industry. It is largely a ser¬ people want peace, security, and»
from
strikes,
production
will I quote from a statement of Presi¬
rapidly come in balance with de¬ dent Wilson made in 1914: "The vice agency. It collects and dis¬ the preservation of opportunity
mands in many lines. / In the business 6f,, the country awaits tributes much useful information. which has been traditionally ours. <
Peace does not come alone from
meantime,
however,
until., our also/has long awaited arid has Through the analysis/of .this in¬
and
through special political settlements made; by dip¬
economy gets into a more normal suffered definition of the policy formation
balance, every effort should be and Meaning of the existing anti¬ studies I hope that the Department lomats. Peace rests on economic
as
well.
An
ex¬
made to check as far as practi¬ trust law. Nothing hampers busi¬ of Commerce can develop policies considerations
cable price increases. The great¬ ness like uncertainty
surely we which will be useful in shaping panding economic life for all of
the actions of government and in the people of the world is an es¬
er
the price increase, the more are sufficiently familiar with the
difficult will be the day of reck¬ actual processes and methods of assisting
business to shape its sential to permanent peace. In this
oning. When consumer pressure monopoly and of the many hurt¬ policies in dealing wisely with the field American business—Amer¬
begins to ease off, prices will turn ful restraints of trade to make current and long-range economic ican free enterprise—can play a
downwards,
in
agricultural as definition possible, at any rate up- problems that the country faces. leading role. Today we have the,
well
as
industrial commodities. the limits of what experience has I hope that your Association, and opportunity for great service to

With

and in others that

affect our economy, I. hope that world prosperity. I cannot believe
the Department of Commerce can that it takes war to unite us in
play a uselful role. The statutory common effort and make us great.

course, the basic cure for *this sit¬

uation.

from war to peacetime production
has been a great achievement.

;

•

2923

■■

satisfactory plan."

•;;;^;;:/;'v;/'':

/; The announcement of the Curb
Exchange, also released Dec, 2,
:said in part:

designed to assure'
its ability to give uniformly ade¬
quate public notice regarding all
ex-dividend dates established by
"In-a

move

it, the New Ydrk Curb Fxchange
all companies hav¬

•

has requested

ing stock issues dealt in on its
trading floor- to inform the ex¬
change of the declaration of divi¬
dends

far

in advance, as

pos¬

the rec¬
ord of stockholders entitled to the
sible of the date on which

//;
/
the !

dividend is to be taken.
"In

letter

mailed

over

tion

sides.

find

There

business
are

those who

both
are

complaining

of
discriminatory
the part of other business,

acts

and

those

who fear

that

restric¬

maintain

high level of distribu¬
tion.
Here again: I suggest that
you give this fundamental ques¬
tion thorough study.
/ In the questions I have men¬
a

people

was

supreme

in war.

opened higher vistas for our coun¬
try. That vitality is our heritage.
It can be effective in peace in de¬

veloping

week-end

Martin

Director of its Department

curities,

Keena,
of Se-

the Exchange seeks the

assistance of the managements
all

listed

; or

admitted

unlisted

trading privilege^ on its floor,
two

companies with stocks either

respects.

asks first that

the companies, in declaring divi¬

dends, allow as long an interval
as

possible

prior

to the

date and, second, that they
the

exchange

immediately

much fuller life for all the 'declaration." //:..;

record
notify
after

T-

THE COMMERCIAL

2924

& FINANCIAL CHRONICLE
choke

the virtue

enterprise system, it seems appro¬

out that at
the present time there are leaders
of industry who are appealing for
and-: advocating the enactment of]
legislation d e s i gn.ed. to limit,
labor's rights, to substitute com¬
pulsion for freedom and subject it
to governmental' domination and
priate for me to point

government., In a very real sense,

economic; systems
constitute ,V a grave challenge r to
our -owns ^^-44
\:
The postwar world in which we
live
is not
a
free world.
Our
these

40l eign

•,

control.

victory in the war has not appre¬
borders

economic

the

extended

ciably-

the

democracy.

pursuit of such a

action

blow

accelerated even among

tem.

frOe economy

..v

against
policy. Such

solemly warn industry

the trend away from a
and toward Statism

contrary,

and value of our free

would
at

our

damaging
free enterprise, sysy
strike

maintain individual
capitalists if we.
our Allies.
England has adopted freedom • for
j
socialism and is putting into ef¬ create regimentation of l&bor?;(
The leaders of industry, here1
fect ^goyeiinhent ; ownership, ; and
operation
of
rriajor' industries. cannot afford to follow the same
France and Italy have swung even course as the Tories of England.
furthers to. the Tefti ^ Soy let; Russia They
exploited,
regulated and
has not only maintained complete regimented labor. .They /seemed:
that working , people,
sway over industry and labor and to i, forget
agricuicui e in her domain,; but; has were sovereign citizens as well as
also extended the same totalitar- laborers. ,; Now: tlie workers
of
ian, .systemover... neighboring Great Britain have abandoned the
.countries in eastern .Europe, u
*
free % enterprise system and em¬
Might ,not the
These economic, changes abroad braced socialism.
^ill; bring goveimmentrsubsidized workers here do the same tiding
competition;, to our ;qwu way cf under similar circumstances?,:
doing .business in the field of forLet me caution American .busi¬
eign .traae.
In time., this compe¬ nessmen 'against employing the
tition may even develop into ho s- same methods against labor which
tility and economic warfare,.
they fear and dread when directed
has been

Can we

•

we
an

But

must face this threat.

must also face and overcome
serious threat from

even: more

within

land.

own

our

True, our free enterprise, sys¬
tem survived the test of total war;
American.

labor,

industry

•

and

produce for military purposes
record-breaking quantity and
speed which no other nation and

economic

other

system

demonstrate

the

the: free enterprise* sys¬
produce for peace with

world that
tem:

can

triumph over
-disastrous

inflation

it '

that

and

can

and

gressively higher standards for all
people.
V
.

nationalization of industry and all
of;

socialism

if,fit is to

supported ? and
main¬
tained.
It will be supplanted by
experimental forms of collective
publicly

ownership
if
who
•own' ana operate industry use it
ior purposes of exploitation and

.and

government

those who possess wealth and

oppression.

Under

free

applied

enter¬

private
labor.
businessman who
against

labor-management disputes is the

property and to manage
industry is both sacred and funda¬

possess

exercise

that

right is guaranteed by the laws of

eral Government.; Before the, war

ended,

every

effective means

of main¬

taining prices, at a stable level.?

purpose of dealing
tion problems and

lanu

and

and en¬
forced by the courts of the nation.
protected

ranks

become

industrial

have wel¬
from

converts

many

who

management

true

you' all,

believer$. We invite

a'hd how, tq "join

here

ther.'faith,";'.
For faith in

•

collective

bargain¬

ing is, after all, faith in the Amer¬
ican way of life. It is based upon
the

philosophy

and

labor

prise

;

are

that, management
co-workers in, n

enterprise—a free enter¬

common

the/;highest meaning of
enterprise which

that

has

the

needs

term—an

its goal the fulfillment of
of

all

the

American

people with generous rewards jto
every one who contributes to that

goal.

Working together in amity and
cohesion,

management

and

labotf

achieve heights of production

can

in
of.

They

undreamed

America: hitherto

create a tremendous
purchasing ( powers dis-»
tributed equitably among: work¬
ers, farmers and employers alikef

fund

can

will

which'

assure

consumption;; of

the

prompt

that; production*

They can attain^; if they will, a
progressively higher standard of
living for all Americans and ban¬

ish^permanently:: the fear of*? de^
pression and privation.

enterprising work¬

The free and

of America offer this opportu¬

ers

nity to management and industry

sincerity and trust
accepted.

with complete

that the offer will be

Willard S. Bain Opens

Firm in San Antonio
ANTONIO,; TEX.—Wil*
Bain is» engaging in th^

SAN

lard

;

of.

force

free labor?

For your own

bound

level

revert

and

the

their

inflation

natural

relationships.

balloon

bargaining

interests of business as well as the

til

after

that it

Peeler Bros, in Houston
HOUSTON, TEX.—G. D. Peeler

engaging in
from of¬

and R. M. Peeler are
the

business

securities

fices in the Mellie Esperson

Build¬

ing under the firm name of Peeler
Brothers.
Both were partners in
the firm in the

past.

John Witt Co. Admits
CLEVELAND,

OHIO—William
part¬

C. Witt has been admitted to

nership
Union

John

Witt & Co.,

Commerce Building.

■cesqsbsbdb

Now

Proprietorship

; ?J

sole
proprietor of Keiper & Zimm,
30 Broad Street, New York City,
Rudolph W.„ Zimm is now

;

J. Keiper

having withdrawn.,

Dean Titus Admits

MICH.—Dean W.
has admitted F. L. Cavan

ANN ARBOR,

Titus
to

Titus
Bank Build¬

partnership in Dean W.

Co., State Savings
ing.
■

With Herrick

...

Waddell

the
have

^ with

the November election
which genuine collective bargain¬
finally ordered the end of
nation as a whole, I advise you to
ing has been practiced over' a long
wage controls and the abandon¬
But working men and women do reject' and spurn the 'policies? of
period of time.-The record shows
ment of price controls, except on
not
own
that in industries where collective
orf%, possess
material the vengeful but vociferous mi¬
k few items which are fated to
wealth. '
They
must
work
for nority who would turn over con¬
bargaining
machinery ' functions
remain scarcefor some;tim6 ;to
wages and salaries in order to trol of your relations with your
with the sincere support of labor
come.
earn a living.
and management, new wagq
Their labor is their employees into the hands: of the
Perhaps it is still too soon to
capital.
They own it.
They pos¬ bureaucrats.
agreements ■ are regularly nego¬
judge the results of this action. tiated for definite, fixed periods
sess it.
Like those who own cap¬
Surely any: good businessman is
ital they must invest or withhold capable enough of handling his But, as of this moment, production of time, through peaceful methods.
has not yet responded sufficiently
it.
In fact, no strikes have occurred
They may serve in industry own labor relations in a fair and
to the stimulus provided by the
or
refuse to do so.
It is incon¬ square way without government
in some of these industries for al¬
elimination
of controls.
H i g h
ceivable that under our free en¬ intervention and all the evils that
most half a century. If such, an
prices are mounting even higher. achievement can be attained in
terprise system, anyone who pos¬ go with it.
,1
\
Shortages still plague the nation. some lines of industry, why cannot
sesses money or capital should be
Management
and
labor have
These are danger signals which it be reached in others?"Is there
forced by the government to in¬ learned and are
learning through
we
cannot afford to ignore. Pro¬ any other solution for labor-man¬
vest it in industry against his will.
experience that serious vital post¬
duction; can no longer be safely agement problems?
What other
It should be equally inconceivable war
problems are subjecting our
delayed or limited. We must re¬ rule could be followed? The law
that under the same system any free
enterprise system to a very
store a new spirit of confidence of the jungle and the survival of
worker should be forced to give severe test.
However, these costly
and
enterprise to our regained the fittest can no longer apply to
his labor—that is, invest his cap¬ and
trying experiences have again free
economy. We must dispel the industry and to management and
ital—against his will. Freedom of taught us the simple truth—that
accumulating suspicion that de¬ labor relationships in America.
;
choice must apply equally to cap¬ the law of economics is inexor¬
After all, why shouldn't all of
ital and labor.
That is the es¬ able and cannot be modified or pression is just around the corner.
In my opinion, no greater boon industry pattern its labor policy
sence
of our free "enterprise sys¬
changed through artificial means.
tem.
public • confidence, - business on a plan which is a demonstrated
The experimentation of the gov¬ to
success, instead
of persisting - in
However, in the exercise of ernment in the setting up of wage confidence and labor confidence
following the paths of repeated
these
rights,
both capital
and and price patterns must be classi¬ can be found than the solution of
failure? ■ ■■ -•;
\
We
labo>r should use good judgment fied as a complete failure.
the recurring labor-management .-I assure
you that labor will re¬
and self-restraint.
They should must respect and conform to the
difficulties which curtail produc¬ spond willingly and wholeheart¬
place the public welfare above operation of stern economic; law.
private gain. In this discussion of Otherwise, all classes of people tion, discourage investment and edly to such an approach by busithe

comed

Where collective
has been genuinely
and frankly accepted by manage¬
will be burst.
ment and labor, it has proved it¬
The Government, however, hes¬
;
self to
be a
complete ; success.
itated and delayed. It was not un¬
There are important industries in
interests, for the

and compulsion?
industry prefer to
deal with slave labor rather than

law

The

The.; major economic problems
the nation today and de¬ np linj ustice toeithyr side^ All it
requires is the exercise of a little
manding constructive solution are
more ; ;common ;; sense ; and
good
all closely related. They''are the
that applies to
problem of ^inflation, the prob¬ judgmfent—and
:
lem
of
labor-management rela¬ everyone involved.
First,
management and labor
tions, and the problem of s^cur-i
should be conscious of their per¬
ity against future depressions."
sonal and public ^responsibilities.
Our first and most immediate
They
should
willingly, freely,
problem is the inflationary spiral honestly, and sincerely enter into
which began with the, war but
a
cooperative, relationship. 'Good¬
has not ended with peace. It keeps
will
should
be
substituted for
pushing the cost of living contin¬ hatred, confidence for distrust and
uously higher and makes it im¬
sincerity for suspicion.
;
v
possible for either! lahor or indus¬
Second-r-On the . basis of this
try to establish any kind of order mental
attitude, employers and
or stabilityin the ecpnomic life ,pf
e,m p, l b y e e s should accept, and
our nation.
\
l.
freely engage in collective bar¬
prevent inflation from reach¬ gaining
in
the negotiation of
ing runaway: proportions during wages and conditions of employthe war,, drastic legislation, was luent, Both employers, and
em¬
adopted placing -supreme ■ power ployees should participate -irigoiover <prices• and. wages
and .pro¬ lective bargaining without mental
duction in the; hands of the Fed¬ reservation,; inspired by a siricer.e
;

our

Does Ameri can

mental.

is
perfectly simple,
feasible and practical. It involves
dustry.

trade-union phil¬
Federa¬

It is

prise system the right to own and
t

in¬

facing

Our free enterprise system must
demonstrate:; its superiority over
!

loims

leaders

our

to religion. In the past

anxious

root of

tion of Labor.

pro--

our

the

deflation

provide

■

ne^, .Collective bargaining ;is thd
very

that it can
recurring cycles of

effectiveness,

•equal

industry as well as against

match.

now

achieve

!-• .7.» v ?

securities business from offices ir^
produc¬ the South Texas Building. Mr,
improving in¬ Bain was formerly with Russ\&
Caught, inra tight squeeze; be¬ dustrial
techniques.
Labor and Co, and
Gentlemen, any
prior thereto conducted
tween fixed wages and rapidly
advocates government control of
management can make contribu¬ his own investment business. /
expanding prices, the workers of tions
labor' through legislation is dig¬
toward; yolume:^^production,
vj" |
"
- vv,;
the nation grew restless and im¬
economies in operation and the
ging his own grave and the grave
patient; Responding, to .their der
of the free enterprise system. \
establishment an<^ maintenance of Kupfer With Smith, Haguei
mands, the American Federation
There is another important con¬
understanding, .goodwill. and co¬
(Special to The Financial Chronicle) .*4 of Labor at its annual convention
sideration which
we
must take
operation—all of which are essen¬
DETROIT, MICH.—Raymond A.
last October in Chicago urged the
tial to the realization of both high Kupfer
into account.
That is, what good
has become > associated
abandonment of the pitiful rem¬
would such legislation accomplish?
quality and high (vplume produc¬ with Smith, Hague & Co., Penob¬
nant of price control, the abolition
tion.
,'
Does ' any
scot Building, members of the De¬
practical businessmen
of wage control and the resump¬
believe that you can prevent or
Fifthr-The right-of labor to or¬ troit Stock Exchange. 5 In the past
tion of high volume production; •
abolish strikes merely by passing
ganize into unions and the right of he was with Crouse & Co..
Our reasoning was clear khd
a ,la\y?
Don't we have sweeping
management to manage, free from
logical. We were convinced that
interference of any kind whatso¬
laws on pur statute, .books today,
Strauss Bros. Incorporated!,
Government controls had outlived
laws under which the government
ever, must be fully recognized and
Strauss
Bros.,
32Broadway,
any usefulness they may have had
can
exercise J almost
conceded by the owners of, in¬
unlimited
New York City, is now doing busi¬
wartime powers even though the during wartime-and were acting dustry, labor and public.
" :
ness as a corporation. Officers are
as
a
dangerous brake on peace¬
war ended more than a year ago?
\ The most valuable service which Abraham
time expansion of production. We
Strauss, President; Rob¬
Have these laws served to pre¬
management and labor can render ert Strauss, Vice-President; Frank
felt then and we believe now that
vent
work, stoppages? - - Has
it
to themselves and to the public
the
Ginberg, Secretary-Treasurer; and
only eventual antidote and
come to the point where the only
V.
cure for inflation
is full produc¬ would be to concentrate upon the Howard
Bullock,
Assistant
remedy industry and management
tion. Once supplies are adequate acceptance and application of this Treasurer.
can
find for the settlement;■ of
to meet the demand, prices are simple plan in management-labor
will

can

/<"' But we will not be permitted
to rest upon these 5 laurels.
We
must

just

* >■

■

agriculture demonstrated to the
entire world that; we can unite

Laboris

? fe ii-f-v

■

that osophy in the American

you

purpose^ ;to> reacjha,( settlement
the American, Federation based; upori, the economic facts,
of Labor foresaw] that these con¬ fair and just to both employers
trols could: not; continue to be ex¬ and employees.
ercised. indefinitely during• peaces
Third—While the; right to: strike
.
time without destroying the free
must
be recognized and main¬
enterprise system. Therefore, we
tained, employers and employees
began advocating even before V-J should
explore the field of vol¬
against
themselves.
Anti-labor
Day that the Government under¬
untary arbitration and,, wherever
legislation is nothing else than take to
relinquish price and wage
government
control
of
labor. controls as soon as such action possible employ that procedure
for the settlement of differences
Would it be consistent or even
could safely be taken. Our advice
which cannot be negotiated
safe for the spokesman for free
was
unheeded. The Government
through collective bargaining.
enterprise in the business, world
persisted in maintaining its tight
to denounce government controls
Fourth—In
order
to
develop
grip on the nation's economy until
in one breath V!and Ufge''govern¬
and maintain cooperative relation¬
a
rebellious Congress adopted a
ment 1 'controls In • thk1 figxt? Orice
ships between employers arid em¬
pew law .which kept the name of
the entering wedgd1
achieved,
ployees, .management-labor com¬
price control but tossed overboard
mittees should be created for the
government
controls inevitably

V,£

this solution lies within our grasp

kets, inflation and varied degrees
of food shortages and human suf¬

fering. 'J

both in¬

oijf tije, incomp yf
,

will be the victims of black mar-

i ■{■+>"*

'i»

Thursday, December 5, 1946}

."v.r'r:

dustry and labor: r • >
Gentlemen, I assure

Dangers of Restrictive Labor Legislation
(Continued from page 2889)
tire vvuixu, we see tnat the econ¬
omy or every other great nation
is conironea
and dominated by

»'

(Special

to The Financial

Chronicle)

MO.—Herrick,
Waddell & Co.," Inc:, 1012 Balti¬
more
Avenue, has added Ira J»
KANSAS

CITY,

Lavton to the

firm's staff;

•

mTPE, COMMERCIAL £ FINANCIAL' CHRONICLE

Volume } 64.;, Numbe£, ^48

0»'

Austria's Future
t " ;
(Continued from page 2895)

the steps taken to rebuild indus¬

try

and restore normal conditions

almost

had

st0r$s

are newly open, but the volume ot
""supplies, is kept to an almost
"•negligible amohnt by the deple¬

tion of iaw materials and the in¬

ability

to find machine parts and
'accomplish a vigorous recon¬
struction.
:

I"to

The

lack

fschilling,'

confidence

the

is not
catastrophic, amounts to a general Un¬

easiness

which

and

hesitation to part

•with goods for money. So strong
the sentiment with regard to

'is

future dangers that many
the financial crisis,

think
1

peoP^
if

corned, will develop suddenly, and
perhaps irrationally, out of some
small. event.
Similarly it is a
general view that small evidence
of; concrete;
assistance, u ev en

resulting
in
large
amounts of foreign, exchange, or
.imports into Austria, might easily
turn the tide and give the neces¬
sary ' board
basis < for continued
-though

not

I!control

and

-foritis.* It

monetary

new

re-

striking to observe
pnceshave
considerably oyer the

.that all black market

declined

the

*past 12 months, including
vprice of the dollar.
,

cases

spite

'but

able

young

businessmen and also government

From

to confirm their

which would

hopes that finan¬

assistance,

cial

least

£ca}&t Would come ,from

levels

U.; S.. I^hen they have seen
no concrete evidence of help from
the
S. or other we'stern powers,
the

wars.

there

have

tria's

sn?a*

tially;
The* recently concluded
agreement with Great Britainwi 1
give Austria some wool and iesu
in
export of some, timber t°

As
ing up trade with-England:
toe regarded as important, but the
Commercial valuesi are> not ex

foopen-a
anaem

exceed

the

muuu

a.5 million pounds sterlingi set
fnr
wool imports into Austria.
Thus at the pace at which things
are

g'ofng

secure ■

months. P°P

.materials for: many

■still centers for the

la6

^Sort-Import

there is

mlnt

that.me^ential_,raw

« is hot likely

Aislry will

m°gaParfrom

But
considerable disappointthe slow pace at which
Bank.

at
this matter has moved.
Dearth of Foreign

adequate

Exchange

last six

i slight

improvement

taM"|>so"little

that it
position,
v

basic

scarcely alters tne ud

travel-

r^rom Austria
lers from AusWan werTbegagars
to pay their
for the fund®
to^ay^
board and room

Austrian

economy,

doubt that

consider¬

to this wealth.

access

some

less

industry

develop¬

striking,

still

A,"fian

few

ranheAciteed

dramatic incidents
to iUustrat-a ten-

organizations.

temptation of some busi¬
nessmen and officials to sell out
Austria's interests for the sake
The

conations

number

in Austria

are

portance of
of

Austria in

the

sense

that her

education.."

>:fduii

even

significant when

would be six months'

followed

tary skills that
even

tional

more,

basic

enlists

There

reason

■

to believe,'

'■/

the basis of analysis of Austria's

economic

potential, and aRo the
political intentions as expressed:
elections, in the press,'and:
also more informally, ." that Aus-'
tna can survive as; a reasonably '
in

the

prosperous

economic unit with a
degree of economic

considerable

There

freedom.

evidence

convincing !to< most ( students

Austria's economic resources that
the

present borders are too conthe* area /is too
small to permit a sound economic
development. The necessity for
prompt reconstruction and assist¬
fining,1- or .that

ance is

based rather

the threat

and psychological
might bring about
catastrophic inflation or unhealthy
of

political

which

nature

alliances.

economic
ture

Austria's

fu¬

can,

can

surmounted

the

near

future.
>

self-sufficient

•

and

neighboring,
fairly well balanced.. Trade
with the U. S. and England s has
always been small. It is probable
that the sound development of
Austria's trade program will call
for fully as much diversification
in the future as in the past.

countries^ has

been

While forecasts

cannot be

isfactory in view of the uncertain
conditions

prevailing,
prospect of = Austria's increasing
exports and bringing her external
payments approximately into bal¬
ance
can be
anticipated.
Some
now

have said that in .1950lor

Austria already has to ner credit

the execution of a

vigorous mone¬

tary program, despite delays and
difficulties resulting from failure

sat¬

1951 pay¬

to agree
*s

frozen. The behavior of the Aus¬

trian

cates

financial
r

firm

authorities

indi¬

determination

the

there

LOS

ANGELES,

local needs.

CALIF.

Togni has been added

the

less general

productive

laborers

tbe

of other, labor ,groups,

industries.

The

buying
of

farm

population, and of the
professional and nublic service
would not be dheetly af¬

groups

fected. Only by gradual processes
could the benefits be broadly dis¬
tributed

throughout the economic
system...; Jr.
.

contrast, when prices

are re¬

duced
(without a reduction of
wages) the benefits automatically
to the entire population.
That is to say, it not only adds to
accrue

the

purchasing power of the labor

group,' but

income

recapitulate briefly. We
have abnormal situations now in

employment; arid

manufac¬

;

the

result of

power,

the

increases

real

urban

non-wage

populations and of the farm

popu¬

in' college eh-;
Our placement
procedures face only mechanical
problems feo long as we have "full
employment." But in Order to
guard against the- Valleys and
peaks of a normally unregulated
economy
we
should now take
three immediate steps: First we

balance; is maintained between the
different -divisions.'of our
eco¬

should

tries of this country have

rollment

seek

fectiveness

Classes

phasis

increase

to
of

mass

has

become

production effort.

too

are

the ef¬

educational

our

Education

process.

largely

well.

large and em¬
placed too much

still

memory

instead of thinking.

present

uoon

The

teacher
shortage
we could inspire

could be met if

can

be laid out. It must be

soul

searching

yet fact finding ap¬
praisal
by
every
college
and
university. And third, until reli¬
able

national

data

can

made

lation
are

tire

well.. Since the benefits

distributed throughout the en¬
; economic
systerri,
better

nomic life.

• *

Now that price control has at
last

been

eliminated,

responsibility,
clared.

•

Dr.

the

indus¬
a

grave

Moulton

numerous

cases

de¬

where

government controls have elim¬
inated or unduly restricted profit
margins, prices /will have to be
increased somewhat. But it is of
the

utmost

future
the

importance

of American

free

the

for

industry and

enterprise

system

that

businessmen—knowing that

pur¬

chasing

power

should not follow

abundant "

—

short-sighted
policy of raising prices in order
to take advantage of : a seller's
market. Such a policy could only
serve
to shorten the period of
good business and lay the founda¬
tions for subsequent collapse. This
is the plain lesson of the 1919-20
period. Rrofits should be made out
of production, not out of advanc¬
ing prices. Profits derived from
a

available, and it must always be

mark-ups are uneconomical and

compounded of local information,

fictitious

this

well en¬
courage the development of coun¬
selling and guidance procedures
already in effect in many of your
institutions. This includes! (1) a
organization

may

opportuni¬
local communities in

survey of emnloyment
ties in

the

your

various

fields represented

curricula; (2) a survey of
graduates in terms of the
relationships of their present jobs
your

preparation; (3)
efforts at improving

to their fields of

formalized
the

personality, inventory proce¬
in use at your institutions;
to the staff of Livingstone & Co., and
(4) a concerted and sustained
639 South Spring Street.
effort to secure the sympathetic
Walter T.

effects, said

turing

educational facilities to meet

your

Chronicle)

its

efficiency
manufacturing industry as a
whole, the benefits would, im¬
mediately speaking, be confined

intelligent
and improve

expand

strenuous. and

(Special to The Financial

When,

were

increase

approach to cquiiselliqg in terms of national needs
efforts'; to

'•

they are not extended to the con¬
suming public generally. Even if

soundest

lies

repeated

benefits are confined to the par¬
ticular group of workers involved;

autonomy, of local

youth with the job of teaching
ments could even be
on
others
and
pay
them a decent
foreign credits, provided the nec
wage to follow their profession.
essary imports can speed up cu Second, we should evaluate within
rent recovery.
The paradox of
our
individual
institutions
the
Austria's position is
somewhat
functional
relationship
of
our
characteristic
of
a
number
of
schools and colleges to the con¬
countries in Europe, but is more
centric communities around each
strikingly
evident,
perhaps,
in
institution.
No
overall
pattern
Vienna than elsewhere.
Grave

With Livingstone & Co.

technological * progress ' in
any
given line of industry, wage rates
are ? increased,
the
immediate

The present situation is
-exception to this rule.; That

Let

restricted

the speaker.

groups.

our

<•

whole lead to the conclusion

and

and American education is in the

gen¬
elabo¬

been

ury

specialties, novelties, and lux¬
goods has always been ot in¬
terest to Americans. Nevertheless,
it is a general opinion that Aus¬
tria's trade must not be largely
concentrated on any one country
or even
closely- allied groups
countries.
Misconceptions with
regard to past; gains has led many
to exaggerate dependence on Hun¬
gary and the* Eastern Danubian
countries, and on< Austria s eco¬
nomic relationship,with Germany.
Actually t*ade between Austria

often

the wage increase method
is at best uneven in its operation

as¬

too

that

'Austria Can* Survived

the national picture, it
welL,;to reverse the title
of; thijS, =:■ address and* tp; (consider
the lines of production of interesf briefly local functions in terms of
to Americans are largely situated national need. The fundamental
in the Western Zones. 'The export strength of American democracy
be

■

(Continued from page 2895) 1
impact of wage and
price1 changes upon the economy

the only defense against
hideous
self-destruction
of

will

■*

studies of the

—

coun¬

commen¬

and antic¬
college enroll¬

Urges Lower Prices.
Not Higher Wages

the

atomic and general war.
With this view of certain

size

of
-

here»..:

institutions in the • Mdo'ctrination of the inevitableness of

the

existing

implications of these

rated

peace

levels

The

attitudes.

staffs

eral statements have

important, but

are

indoctrination

expanding

ipated

uninter¬

-of

year

the

the counsellor and fur¬

ment.

nical schools and colleges is more
insidious than the former pro¬
one

'ever-increasing
professional

counselling
process pre-

surate with the present

by six months' further
in vocational- and tech¬

for

poses

selling

con¬

sidering the Army-sponsored pro¬
gram
for
compulsory
military
training. The plan of one-year
compulsory military service for
some

the

ity of

circles of Austrian economic life.

ther suggests the strong desirabil¬

balances.between' military
and civilian needs i isj./numerically

economic

''potential is expanded
national basis, it is still in¬
teresting to observe that many oi

This entire

awdreness
status

This

pects ,pf

resources

s u p

tourists

insisting on the im¬
political unification

•

program.

in an
attractive manner by those who
seem to guide policies of neigh¬
boring countries, is not confined
to the younger and less experi¬
enced individuals. There are) in-

2887)-

page

and

military

with * equal
inducements for •thosso of-' high
ability to enter into airfields of

replace some of the

While the American authorities

of short-term, gains offered

their
part, supported fully by
which may, in fact, b
public opinion, to avoid inflation¬
come more general if
'r *;•*" '
* *
do not improve in the near future. ary excesses.'

dency

insistence

interests

war—that >. armed
might is tthe
only basis of world organization
from Eastern Europe,; they will at the
very time when we, are
greatly increase the net value oi struggling < to form an effective
exchange from this source.
It is international
organization
for
probable that the beauty of the world peace. It is sheer hypocrisy
Austrian countryside and the po
to assume that we can at one and
sibilities for sports, motoring, and the same time counsel our
youth
cultural enjoyment, have never in the skills and attitudes of war
been fully exploited.
and yet build in them a will to
•'
reduction

|.gnificant
business-

the

civilian

cooperation of established educa¬

*«ggjigg

xne

■and

And,

withdrawal'

and

the

countries to

•'{'

%,'f

».

rupted military training. It is an
admission that it is not the -mili¬

howeVQ

shift

needs

definite balance between

posal

from the U. S. and other Western

assistance

P^^SLres.

Vif'inathPer0damtudae TU

«'

III'

increasing the potential
In addition to new pros¬
pects for i valuable exports, the
possibilities of greatly increasing

in the. Allied Council. It
generally known, although not
elsewhere, it officially recognized, that the con¬
"France, Eng a
t traveners version program would have been
is now vosslWIOvu
for their very much longer delayed, and
to secure
It is perhaps have failed, without able dangers surround the next steps in
most essential expenaim
^ &ny leadership on the part of U. S. economic reconstruction and the
nQt possible,
^ ^ financial officers, notably Lt. Col adjustment to the grim necessi¬
number of person
future purcontracts abroa
A/thur Reichsmauk, which meant ties for the postwar period. On
Marget. The
of the
the other hand,-close observers
or t0 buy small
chases of any siz,
delivery. a quick and somewhat brutal am¬ say recovery is possible and infla¬
putation of the Austrian economy tion can be avoided.
from Germany, was not, in fact,
a
monetary reform measure
~
■With Marshall Adrian:^
There are expectations that at a
(Special to The Financial Chronicle)
later period, when the future be¬
comes clearer, tax, loan, and other
{■ DENVER, COLO.—Roy S. Price
world in waiw
measures will be put into effect
has been added to the staff of
case 0f
other respects and
and withdrawal is planned of at The Marshall Adrian Co., Colo¬
gatly reother countries been s
least portions of blocked funds rado Building.
w h i c h
are
now
temporarily
even

■

(Continued from

practiohers. It requires a careful I understanding of the whole fa~
survey of our entire manpower culty with regard to the functions

training

impressed the Americans in
feel that by in¬
creasing the number of tourists

the U. S. and from compe¬

reasonably high standard of liv¬
ing if the crisis presently feared
The
-■which has

tl.,

Austria. .1 Some

keep her boundaries\ iopen in all
directions and to carry on a free
and
diversified
trade, will be

in all likelihood* be
democratic; and could permit a

lets

1 "•

have

inclined to believe that the only
thing which can turn the tide in
the other direction and reinforce
the natural desire of Austria :to

•nprted

j. •' h''..'"

the returns from the tourist trade

resulting from this

independence, are obvious. Those
who have been close to the eco¬
nomic and political struggle'are

conditions substan¬

Great Britain.

V).

output.

attitude, in the sense
Austria cannot develop' a real

and

ments
.

prompt

cannot be fully .cpqnted

the

There have been
but

from

9£ electric power,

advantages will be reaped,
even in spite of the present polit¬
ical ' complications limiting Aus¬

change in
that

above, ; .the
between,- ;the. ,two

able

The dangers

obtained

; for

ships which seem not to be in the
interest of Austrian reconstruc¬
tion.

production,

resources

indicate

been agreement
to
deliver
Austrian
production
which was needed in the country,
and there are suggestions of con¬
tracts for future business relation¬
there

it, possible to

opportunities opened up for
thbm by Russia, fin some cases
that

make

events

will free Austpa almost entirely
from coal .imports.
While the oil

ness

other

is the present and prospective in-

rumors

thereTare

*: Notable in this connection

'crease

they
have
become ;./ involved,
directly or indirectly, with busi-1

well-confirmed

view

expand

the volume of actual importa
Indications that this tendency may
Austria, as well as the
ume' of exports from the copmry, go further and permeate many

affect general

general economic point

into

3have continued to be too

Balancing Civilian & Military Educational Needs

Expanded Production Possible

officials who have eagerly sought

tent international
,

of considerable talk,
negotiations, and conferences, the
attempts to* open up trade and
bring in importshave yieldedfew
results. Negotiations with Czecn
oslovakia, Italy, and Poland have
made possible barter agreements
with regard to a few commodities,
In

are

six

wasi

months ago. Here and there

There

The goods shortage which might
be expected to have lessened with

Dependent

2925

dures

in character. Moreover,
they "quickly evaporate the mo¬

ment

the business

Industrial

price

tidp

turns.

nolicy in the
obviously be

months ahead should
to

sell

the

lowest

rates

00s-

sible, said the ecooonrst. It is of
course

idle to talk of absolute

ductions

prices

when

re¬

wage

rates
are
sharply rising. It is,
however, still the part of wisdom

insist

that

price

rises

should

be held within the rQrrowest
pos¬
sible limits. Only thus can con¬

tinued freedom from

government
control be assured and only thus

[can enduring prosperity be maintained.

de¬

read
son

Tomorrow's

The

Stock may

Markets
Walter

Whyte

bays—
WALTER WHYTEs
stocks

Individual

domi¬

will

ularly care what the conclu¬
I'm interested only

nate/ not abstract theories of sions are.
bear or bull markets.
Up in one
of

last

over.

Look for dull reaction

appears

for next few days.
'

said in recent weeks whether
not

are

bear

■

how much fur¬

bull market;

those

you can see a profit, I
can't say. I can't even guar¬

fore

1 '
"
' '1:*•' >
in April,
1945. More¬ billions.
the skyrocketing of prices V> While profits soar- the workers*
and the spiraling:. increases in the share
of
thenational
income
cost
of
living has reduced the steadily declines. Millions of
workers
worker's earning power by almost American
today
find

less

has to

antee you a

further

go,

Theoretically,

buyer in

Last week the market indi¬

bull market will make money

iff'he holds

cated

incipient rally. The

that

long enough. day

the

written

was

averages
were at
By the same token, an abstainer during a bear market 164.37. Before the week end¬
will save money if he doesn't ed they were at 170.66.
So
far .so good, bo far as the mar¬
buy anything. Both theories,
But as I
or
rather the 2 two facets of ket is concerned.

familiar

r
t

the

theory,, are funda¬
quoted they
usually evoke a sage nod of
the head indicating complete
same

When

mental.

pointed out before, the action
of averages, while nice to
point to, doesnT mean any¬
thing to individual accounts.
individual

It is the action of

agreement.
*

issues you

have in your list

Thursday.

bull and bear

is not

expected1 to become a
markets are always plentiful.
dynamo. At best it's a longYet there are stocks which
pull proposition.However,
will go up during bear mar¬ the
Stop at 10 should be
kets and stocks which will go

maintained.

down in bull markets.

about 14.

Actu¬

a
7

all the

news

you

il-V

Established

its

promise of more to come
present.

H. Hentz & Co.
: v

York

New

Orleans

Trade

Exchanges

until it

was

got to about 51 and
Advice here

tion.

N. Y. Cotton Exchange
NEW YORK 4,

Policy

page

living.

This
in an

result

early and inevitable economic de¬

pression; as in 1929 with ^the; ;ac4
companying human 'misery: .> and
chaos."

(Continued from page 2895)

about

8,350,000

7 7:

barrels

good wages, healthful working
adequate quan¬ conditions, thrift plans, annuity
benefits and insurance. Productivtities of petroleym?
2. Will oil technology keep pace ity; aided by technological ad^•with general technical prog- Vances, has Increased/- Most 4m»
portant of all, a practical basis, has
been ' established lot; continued
3. Will the employer-employee
progress toward the goals of alluf

three things:

1. Will there be

housewife -hunt¬

.the

crease

2895)

Profit-hungry lobbies sought to
blackmail

ing desperately for meat, the vet¬
eran
111
search of a home, the

teamwork nece^sary for
maximum

t ton/an

efficient

produc-

distribution

During the early part of 1946
maintained?
same
powerful employers
Let's look at each of these ques¬
persisted in their campaign against
American wage standards by de¬ tions in turn.
nying pleas for wage adjustments
The future holds plenty of
these

to restore cuts

take-home

pay

liquid fuel. Our geologists believe
resorted to
the : iniquitous that in-this
country alone we will
carryback provisions of the tax discover new ; reserves of nil at
which subsidized

law

blackmail

their

con¬

the

and

labor

who work for

opportunities

living-^better

for

im-

individual

p r o v em e n t and advancement, ^
more
satisfactory safeguards
against insecurity. ;
We believe .that men can learn
to do

getting

was

better and better job of

along, together. .We "are
as (practical men and
to do our. best to. that end.

determined
women

least equal to the vast quantities

public

of vigorous competition

stimulus

without financial loss.

profit system, the art of
finding oil has been steadily im¬
and the

As part of the conspiracy to de¬

Conclusion'

;';/7(;;p;;:

this, quick appraisal of

Now if

the outlook for oil in the world of

optimistic

tomorrow, sounds

press wages,

you, it is; because; the facts them¬
selves make it so. The hundreds of

thousands

to break the strength proved. /Furthermore* w£ h a v e
OPA, industry learned how to extract more of
engaged in a program of delib¬ the oil we find. A few decades ago
erately
creating
scarcities
and it was not unusual to recover only
speculatively hoarding goods. This about 20% of the oil in a new
conspiracy has now borne its bit¬
ter fruit. The American people are
now faced with the spectre of un¬

field. Today, we recover as

large reserves of natural gas

frac¬

to take

50.

midst

the

this

high

80%.

this

Also,

and shrink¬

ing earnings.

Bldg.

N. Y.

only

can

ployers and employees to sit down
ment
and the
threat; that only per day by 1950^-an increase of together and find solutions to the
human problems created by mod¬
high prices would remedy exist¬ 46%. Ability of the industry to
ern industry. Out of this spirit and
ing shortages >of goods and ma¬ meet this demand will be largely
determined, it seems to ~me, by practice of cooperation have come
terials.

(Continued from

sold last week when

profits "when it crossed
.

liv¬

necessities

Oil Production Outlook

ClO's Wage

•

cost

limited price increases

profits.

International Paper bought
at 43

Inc.

Cotton Exchange

other

And

Hold

•

Exchange

Exchange,
Board

Chicago
New

gets across 42 and then take

Exchange

Cotton

Commodity

last week.

Exchange

Curb

York

New
„

your

Stock

York

New

Members

the

mum

situation

of labor, and to gut

is still

bought at 37, stop
33, managed to get across 40

1856

rises

and

Anaconda

■

now

7' '7/77

Profit isn't much, but

ISV2.

Based

budget providing for the mini¬

Dresser bought at 17, with spiracy against the public welfare
already discovered. The truth of
stop at. 15, is ndw about and which permitted them to the matter is that, under the

nothing axiomatic about mar¬
kets;

Stock

;"7 ,-•/

> *

nothing fixed,

ally there :is

themselves totally unable to meet

the contrary by American indus¬ confronts us.
This is the important task for
try,^ industrial profits have "soared
[The views expressed in this
steadily. During the peace-time GIO unions in their approaching
article do not races^ily at any
years of 1936-39, American; corpo¬ collective bargaining conferences.
time coincide with those of the
Chronicle* They are presented as
those Of the author only.] |

haviorisms of

-—Walter Whyte

Unfortunately theory .and that is your primary concern.
starving
peoples
of
the world
practice have nothing but a
looking to America for food, upon
Gulf
Mobile
and
Ohio the argument that only - with
nodding acquaintance. /There
are few laws That help every¬ hasn't done much since,it was rising prices can full production (J ''
be obtained.
r
, ; 4
«*»•,
body. Arguments about be¬ bought at 12. At its price it

■

Under present conditions it is
ing are inevitable. With the com¬
plete abolition of OPA, industry therefore, imperative. that Amer¬
is running amuck with ever ad¬ ican., industry in collective bar¬
vancing prices; rent increases are gaining-give substantial; wage'in¬
imminent. Unless the worker re* creases. Our people .must have
ceives substantial wage increases sustained purchasing power and
he and his family face dire want. a decent Uvlng wage to avert the;
Despite the false propaganda to Swift economic tragedy which now

More next

that.

proves

nancial importance.
v

than

over/,

if it is a that many of the laws which
For the time being I'm not
bear market, and lots of other theoretically hampered busi¬
folderol.
All of this I find ness will be changed. But one recommending any new pur¬
chases.
Maybe in the next
highly interesting, or at least thing I don't agree on, that
column the picture will'have
stimulating. But in its final social progress can be halted
•
;
essence
leads to little of fi¬ by legislation. All history dis¬ changed.
it

ther

war

net

■

an¬

years the annual average
profits, after.; taxes, in¬
creased to approximately $9 bil¬

■

A lot has been written and

the
of

profit. Every time
I buy (or sell) and where can you buy a stock you must also
prepare yourself to take 7 a one-fourth. With tax reductions—
I get out of it with a profit?
loss* 7.1 try to limit the loss the;; real
purchasing.: power j of
*
♦ ', *
hy
.1 ■
workers'1 income is, even further
Even the probable action by placing a! stop at a figure reduced.
I consider wipes out all the
of
a
Republican Congress
But there is no immediate pros¬
promise. In the case of South¬ pect that runaway prices will be
means little.
I say this be¬
checked. By the end of this year
cause
everybody ; is agreed ern Pacific the figure is 38.
thing: what stock can

week

trend

Last week stock was

between

average

a wage freeze and
discouraging wage lions. It (is anticipated that the
increases, the increases which the annual net profits, after taxes, for
workers
actually received were 1946 will be; $11,300,000,000, It is
totally inadequate to make up for also anticipated that with contin¬
their decline in earnings. By Sep¬ ued sustained high production the
tember^ 1946, despite the wage in¬ last quarter of 1946 will show a
creases/weekly earnings in man¬ profit return, after taxes,j at .an
ufacturing
industries', were
far annual rate of approximately $14;

available
figures time
and again, g So I assume you
ket isn't ^acting
top badly.
You'eaii|interpr^l tKi£; Any managed to get it. /yHow lohg:
way you like. I. don't partic¬ you will have to hold it; be¬

your daijy paper* But despite
the pessimistic news, the mar¬

o..-'

enemies

its program of

and 43.

between 42

You

met'profits/^fter^ taxes/ of
the approximately $4 billions. During'

tion^ policy of

Southern Pacific was to be

give you the ramifications.
bought
can read about them in

earned

nual

by mouthing
fraudulent slogans of big business.
As the result of the Administra¬

dustry to a walk. I don't have

standards, but
the> ranks of la¬

actually joined
bor's

rations

living

its

protect

do better after a
for the market to go * up. while/ but I don't aim-ito pick
'■
coal strike is slowing in¬ tops or bottoms.
there is little rea¬

now

Thursday,-December 5, 1946

FINANCIAL CHRONICLE

THE COMMERCIAL &

2926

country

possesses

al¬
;
V most equal in energy value to
proved reserves of petroleum.
conflict,
taught

Modern science has

the role played by so-called lead-?
ers of labor outside CIO has been

to convert this

how

natural gas to gas¬

women

of American

and

men

Over: the; world

all

make their living out of

who

oil have

played a significant part in bring¬
ing a new- standard of living to
their fellow-citizens and, neigh¬
bors. Because they

have seen their
the American
position, of world
leadership in finding oil, adapting
it to human use, and getting oil
products to consumers at ever
lower costs, they know the great
own

efforts

bring

oil industry to a

pitiful and in its historic context, oline, at a cost already approach¬
tragic. When the successful out¬ ing the cost of gasoline from oil. benefits of i human freedom and
come of the vigorous
CIO strug¬ And back of these reserves are the the stimulus of vigorous free com-.
gle brought in its wake increases country's shale oil and coal, which petitidn. ■
;
These people—the people of the
for workers throughout the na¬ are great sources of liquid fuel.
oil industry—with confidence in
We may " look forward to -the
tion, these leaders of the rockingchair brigade, who had watched steady
development; of oil re¬ the American 7 pattern ofindi¬
vidual • freedom and competitive
sources in other parts of the globe.
the fight from their front porches,
.

DETROIT

CHICAGO

GENEVA,

PITTSBURGH

SWITZERLAND

Pacific Coast

rank and file /to
fight - alone,
sought to recover
some stature in the eyes of Amer¬
ican workers by claiming credit
for achieving without strikes those
wage
increases which came to
their membership as a result of
their

leaving

Securities
Orders Executed

LAMBORN & CO.

Pacific

99 WALL STREET
NEW YORK

5, N. Y.

m-\

'1/ v-'

.tip,

*/.'

Coast Exchanges
^ *' "■

>" r"..' ;

Schwabacher & Co.
-I

Members
New

New

York

York Stock Exchange
Curb

Chicago

Exchange

Board of

Exports—Imports—Futures

COrtlandt 7-4150
Private
San

DIgby 4-2727

—

Teletype NY 1-928

Wires to

Francisco

Monterey

(Associate)

Trade

New York 5, N.

14 Wall Street

—

Sfcfita
—

Barbara

Sacramento

Fresno

•i

;

•'.
•

•

'•

'1'..

i
7--.

r, •'

; -ft '

1 't.

7'V4.

the

;

•.

'v|,

supplement
of

own

our

enterprise, approach the challenge,
of tomorrow with hope and en¬

keep production

thusiasm.

;

r,j

hopeful, too, about the
rewards
of; .continuing research
and development. We are already
prepared with equipment and
We

fight of the CIO

•

fields at maximum ef¬

ficient rate.

With Harris, Uuham & Co.

are

steel,

(Special

The

Chronicle)

Financial

*.7-

LOS ': ANGELES, - CALIF.
—
Paul J. Anderson has become as¬

auto,

take

industry

has

these same
so-called leaders of labor not only
turned tail to run from the battlefront on which labor sought to

fortunate

its

achieving,

v.'
v

i'/w,':-.

there

general

willingness
:

has

7
.7 V.

•

',i

:
:

77.-77'

■.

(

particularly
rela¬

'CHICAGO,

Chronicle)

Financtal

ILL.

Gordon M.
Galloway has become, associated
with E, H, Rollins & Sons, Incor¬
—

or three porated, 135 So. La Salle Street.
developed a Mr. Gallowav was previously with

two

among- em¬

Chesley & Co.

'7; :'7

.-7. ';i -

--7'

--f'

•:
:,7777

'' '

7.7.,

7>':7 '7 "

to The

the oil

employee

tions. Over the past

j/j

•J,

e e n

decades

.■
.

of you know,

most

(Special

of them.

advantage

by the final destruction of price
control to beat down the gains
which American Workers had suc¬

"/X-.

domestic supply

our

and enable us to

sacrifices

and

imports are needed, they can

sociated with Harris, • Upham &
electrical processes to produce the new Co.; 523 West Sixth Street. - ,
manufacturing, and other indus¬ high-octane fuels of tomorrowtries. When big business redoubled just as soon as the automobile in¬
I Galloway With Rollins
the fury of its attack and sought dustry
can produce the cars to

• s ••

militant

workers

ceeded

Principal Offices

Oakland

determination

the

#•

SUGAR

'■ ■7,..;:

•"

•

7. v'..'7-

■

• '•,

i; *

'/i

; "V *• ...,;f ,7

7 /7.,)i:^7

v-"'.''..-•'7-.,'7 ■7'-'

Volume 164

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4548

292
'

'
'
U?
the presidency of Mr. E u g e n
Meyer. Some officials here fee
■

.....

brains and hard work. Strikes and

iy>ciAndManagement Must
Bury the Hatchet

mobiles.
half

cerriing the company with which* strictly tip* to
1 «&m -associated.

own?;

to prove to our

people; and

the

general

Studebaker, unlike most of its public that above all we propose
-/competitors, was able to recon¬ to fight and fight hard for indus¬

-v

vert to
out

peacetime operations with¬
strike in its own plants.

Nevertheless,-the 'indirect cost of
strikes to

From

Oct.

has been tremendous.

1945,

June

trial 'peace. Only if we are able
to achieve this change in attitude

hope to make
bargaining work. ■

can

30,

Unless

When

the work

the labor

(Continued from page 2890)
'•

management

vention

Florida

reflecting

slowdowns will kill it.
/
;
; j the American Executive Director's
;;sThe a u t o workers who slow personal
discouragement at the
down on the job, also buy auto¬ rate of
progress which has been

collective

this

worker

does

for twice the

cost

his

new

made

the

pay,

would

car

labor

much, and pretty

soon

cost

times

y7<

crease

but

labor
line—it is the same story. The car¬
desire and
penter who loafs on the job makes

fective

July 1,

stockholders and

our

rest

may

assured

agement of
Of

the

that

our

the

which

new set

collective bargaining. In this, con¬

nection, an intensive study of the
entire problem "is being made by
special committee of the Com¬

mittee for Economic Development.
show you what I mean by
1 new

set

of ground rules,: let me

tell you

about one of the: many
suggestions that has been made
before - our

special

committee.

j has been suggested that the rules
I governing collective bargaining
should by iheir very natme put
pressure on both management and
; labor
to rely > upon persuasion
'

Jirather ^thah>c6ei:cion ;ior the? at-^
tainment of their objectives. For

management should be
.prevented from entering into col1 e c t i v e bargaining negotiations

example;

with the
ers

authority from the own¬

of the business to stage a lock¬

Washington
/

ent."

activity

the

greater

vi-i;
tf.»

„

"The. outstanding

need of

our

and

(Continued from page 2886)
and
a
spokesman for'/the

urnon

union said comment

govern¬

■•y

■

1939.

But

wages, are

Worker Slow-Downs Threat
to Economy

their
views after negotiations under ',the
to reconcile

Until

shall'/'continue

fall

sibilities."

The

;

"J.
of

this

The -workers

many

/ places

have been taught by their leaders
that to slow down would "spread

has

and

been

revived

since the

date.

Some

s e e m

in getting

going,

even

pos¬

has

placed

Bank.

fact

Others

that

after

Bank

that

for 'sinister

collective

bargaining.
to j.he

statement

'The
management
the Bank believes that it is
against sound
public -policy to
have
unions
of
employees
of
banks
which
have
public
and
trust functions,''.
!
of

"It
the

interesting

officials

this

that

note
Bank

are

among leaders of the reactionaries

shouting

loudest

for

free

enter¬

prise and the right to run their
business without any government
controls. Mr. Baker would
deny
his

.
employees rights granted to
all other employees in
private en¬
terprise. This head
of
a
Wall
Street corporation thinks he can
,

Both
and

decrease
the

grant bank employees the
right to collective bargaining.

declining with the
this portfolio while

amount

other interest

been

^increasing

rates

the

securities

on our

due

;

loans and discounts.

raated
gross

for
1946 are <;esti$15,200,000 or 75% of
operating income and will
at

be about 20% more than last year.
in other lines sof business, it

light

inevitable that our costs
operation will continue to rise
long as the national trend to

pany

.largest financial
in ithe world — the

some -ten

—

President

Com¬

years ago.

that

The

corporation

that time also stated that his

em¬

ployees, because they work for a
company that has a 'Public and

■.

samei

the

Metropolitan Life Insurance

higher prices continues, but ex¬
tremely careful attention is being
given to all expenditures."
j-'y. »Mr. Baker likewise stated:

with

•corporation

appears

deter¬

the State and the nation.
"The UOPWA faced the

CIO, is

through collective bargaining as a
right guaranteed by the laws of

"Expenses

pears

"The UOPWA,

mined to compel the
managen&nt
of this
and
every
other major
bank to deal with their employees

has

higher

the State Labor Board Act
the National Labor Relations

Act

been

war

said,

ment of the State and the nation.

received from government securi¬

an •* unnecessary

comment

the

decide better what is good
public
policy than the elected govern¬

ties has

the Export-Import

World

Company,

stockholders,

obligations accounted for >a
part of this income.
For the past six months interest

allowance for the delay in desig¬
of its -President, and that

this

purpose

•

substantial

nation

burden

Chairman

Directors

ment

think that the Bank has been too
slow

Baker,
of

from investments in U. S. Govern¬

the evolution of the Bank's
to

Stewart

the Board

challenged the rights of his em¬
ployees to join a .union for /the

-of

'
'
;
Turning to the bank's financial
..

phase
.

Bank ,of the Manhattan

short

full production

our

this

statement, follows:

in the interests

nation.

unity of purpose is realized,

in the institution's

still
purposes. It ap¬ are
ineligible for savings
logical f o the worker be¬ bank and insurance company in¬
cause he
sees
only the job on vestment in many states is attrib¬
to tell their story in full and in which he is
assigned. He does not utable to remissness of the "Bank.
writing to the people who would see clearly that the slow-down
The conditions described above,
suffer .most as a result of a-Strike increases the' cost of the article he however
unjustifiable they may
or- lockout—^management 'disclos¬
is making. He only sees that the seem from the Bank's viewpoint,,
ing the terms of its most favorable things that he buys for his living seem to spell the need for a public
U Offer, labor leaders revealing their today seem to go up in price. So relations job. In addressing itself
reasons for refusing to accept it. he ■: wants
higher pay, and in fact, to this task,: the Bank of course
Then,"and only then, should the he does need more money to must tread carefully. That the in¬
people involved—the owners and maintain Ms -living standard. But stitution exists at1 all is due in
the > workers—be
asked to em¬
higher pay only adds further to large part to a tremendous publi¬
power their respective representa¬ the costs and his accustomed liv¬
city campaign conducted by Gov¬
tives to resort either "to a lockout
ing "standard goes out of reach ernment departments and agen¬
or «a strike. This illustrates what
again. The immediate result is cies, -notably the Treasury, State
£ I have in mind,
,1 strikes and then shortages.-and and Commerce Departments, in

i hew ground rules I have outlined,
then both sides should be forced

question.

the part of our
willingness to exer¬

whole

the

issue

Mr. Berney's reply to Mr.
Baker,
made in
the form - of a public

tradict

with

True bargaining.-cannot the;work?> and that the slow-down
be carried on when either party would
provide .more work ttnd,
is pointing a loaded and cocked more
jobs;'That false theory be¬
"gun at the other. If management came prevalent during the thirties
labor fail

cision of the board

cise self-restraint

the

collective bargaining

proper

of the

story: -"World

'.'-•■•• affairs

pockets.

and

leaders and

unit would have to await the de¬

performs a vital function but can
avail
little
single-handed.
To
achieve this spirit
of coherence
will require responsibility of the

out if its terms are not met. Sim¬

ilarly, labor leaders should not be
permitted to -enter y negotiations

ment, stemming from a common
recognition of the fact that each

highest order

steady

is for a greater degree of
enlightened .cooperation between

labor

employees

generally prevailing today." /;;/.

times

management,

continued

upward trend to the higher levels

again pres-

are

Mr. Baker declares that:
;

in connection with the cost of. liv¬

Bank Heads Con¬ operations,> Mr.
Baker ,'said in
Beyen." The New York part:
;
;;/;s-nearly 100%, too, so the cost of "Journal of
Commerce," under the
"Based on actual figures. for the
labor in dollars/per car is four
caption "Blame World Bank for first nine months and estimated
times as great as prewar times.
Secretiveness," discussed the "re¬ figures for the last three
What does Mat mean to the
months,
pudiation" of the Dutch executive the net
operating earnings for this
worker? Today he gets twice as
director. A later news, report de¬
year,
not including net profits
many dollars: as he;;used fo yget^1
scribed investment, groups
as realized on the sale of securities
but he can only buy half as much
"bewildered by the lack of infor¬
as he used to
be able to buy. If
and;, without deducting taxes on
mation" Vwh i I e the New York
such
profits,
will
amount
to
everyone was paid a million dol¬
"Herald-Tribune's"; financial col¬
slightly more than $5,000,000 com¬
lars
a ctay,
and nobody did any
umnist entitled a weekly review:;
pared with $6,248,000 for 1945. j ;
work, the million dollars would be 'World
Bank Seen :Off to 'Bad
worthless, because there wouldn't
<fGross operating income/for the
■Start ^*5
current year is estimated at $20,beanything to buy< So let us find
; Not only investment circles and
the basic truth and tell it to every¬
300,000 which will be about 7%%
the press,, but also American. Gov¬
one:
it is more productiqn that
greater than last year.
During
ernment agencies express—al¬
makes the wages worth more;
the war .years interest received
though in private—dissatisfaction
to

increase which has been made

ary

our

necessary;

offi¬

''■/.;•/; '•*

■

show

business

New York "Times" headlined this

(Continued from, page 2894)

1935

conditions

page

headquarters.

staff other than

when

ef¬

mem¬

"In addition to the over-all'sal¬

have

expansion

achieving

official"

1946, to all

ing/the salaries

Bank

First, we must have a
of ground rules controlling

necessary.

salary in¬

granted,

economic

2884)
thereafter Mr. Beyen's forecasts
were
thrown down by "a high

(Continued from

was

it: will be in a position to pla.y an
important role in the nation's

•

further

cers.;'';;/;/'"',-;:

lie

ahead and is making plans so that

Eegeie Meyer Resigns
■

10%

bers of the

man*

bank is conscious

our

opportunities

rise

staff

—.

opinion, two major moves are;

undul

(Continued from page 2889)
hardly be appropriate for me to
predict that such will be the case,

been

Against Public Interest: Baker

the auto¬

mobile business would shut down.

1946, Studebaker was scheduled to demonstrate quickly a
produce-1134,500 passenger cars an ability to bargain collectively,
the house that his G.I. son buys
and trucks.
But what happened?
they face the risk of legislation
cost more than his boy can afford.
Through no fault of ours, we pro¬ based .on emotions rather than
The plumber who doesn't want to
duced only'Some 43,000 "units dur¬ reason. The
public already is in work
on Monday, but insists on 16
ing this 9-month period, and our a dangerous mood as a result of
hours pay for 8 hours work on
failure to attain scheduled pro-- our strike
experiences since V-J
Saturday, is building toward the
duction was due almost entirely
Day. The results of a Gallup poll
day when he will live in a hovel
> to
strikes and
slowdown in published only a -few days ago in misery and
poverty. Production
plants of our suppliers.f This^fail- reveal that fully 50% of the peo¬
is what really .counts in any sys¬
ure
cost our employeeVapproxiple reached by this poll favor leg¬ tem. A
man, a faimly, a nation,
mately 15,000,000 man-hours of islation which would prohibit all
gets rich by working—not by loaf¬
work, or more than $20,000,000 in strikes and lockouts for a year!
ing on the job. America was built
wages, and deprived our transpor¬ Some 66% of sthe people canvassed
by hard work. The great Ameri¬
tation system of some 90,000 bad¬ are in favor of
Congressional ac¬ can
standard
of living was no
ly needed; automotive vehicles.
tion - which * will
control labor
miracle
it' - was the product <of
unions. ; Jf. : this mood should ex¬
brains and hard work. The Ameri¬
Must Bury the Hatchet
press itself in the form of puni¬ can
people will live only as well
From "figures such as these it tive
legislation directed - against as the
average man does his wotk.
Is apparent that labor and man¬ labor
unions, the results would be
agement must bury the hatchet if as unfortunate for management
our
economy is to sutvive. We as 'for workers. We
want ^new
cannot long continue to suffer the ground rules, yes, but
ground
staggering losses that have her rules that will ••/ promote
peace
fallen us during the past year. In rather than bitterness and conflict.
.

has

initiating its first bor
rowing and lending operation.

Unionization of Bank Employees

automobiles, in refrigerators,
in washing machines — in
every

and

Bank

only one-fourth the work for four
times

World Bank under

the

pay,

car

four times as much as it was be¬
fore. If he slowed down to • doing

the

that

cautious in

;

trust

function'

should

denied

"The average rate of

Change

Attitude of "both

slow-downs.

vicious

connection

.with

the

assets
has
shown
improvement due to a gen¬
eral firming of interest rates and
will
.amount
to
approximately
1.80%
compared with 1.70% in
1945.
The average yield on our
government obligations so far this
year/has been 1.51% per annum
as against ;1.54% last year."
'
our

Bretton

cycle 1 that,- unchecked, can' end Woods conference and resultant
only in death to our economy.
Congressional bills, The echoes of
r: ; The
second - major move re¬
"The worker must be taught the that campaign ha v e not "com¬
quired is a change in attitude on truth. He must unlearn the false pletely died down even yet, as
the part of both management and Iheories of the thirties and learn
witness the editorial, "The Cost of
labor.
Today, 'emotion plays, too that it is
greater production, per Propaganda," in the New York
great a part in collective bargain¬ hour that makes abundance ;at "Times" of "November 30. Simi¬
ing negotiations. Both parties too lower cost and his pay check
larly, as reported in the current
often
enter negotiations with a worth more to him and
his family.
issue-of the "NAM News," Con¬
chip - on - the - shoulder attitude.
The worker must learn that the gress has become very .conscious
They are both ready1 to fight abthe slow-down
official
brings inflation and of
press
agents.
It
drop of a hat. Rather than to that the
has
speed-up will stop it. He also
become; conscious of
hanker to fight each other, both
must learn that fhe slow-down at the existence of the Fund
and
~

Labor and Management

and labor leaders work brings
poverty and misery,
should be determined -to fight for while
the return
employers

peace—to

fight for a quick (set¬

tlement of their differences.

And

responsibility for a
rhange in attitudp must rest with
the -employers.-We've had long
the

major

experience in leadership and

duction

normal

brings; abundance

happiness for all.

must

pro¬

and
learn

Bank,

and according 'to financial
reporters will devote some atten¬
tion

session

those

institutions jn

the

which begins in January.

that the important
thing is'not the
Some Washington official's.-are
dollar—but what the dollar will
Interpreting comments yesterday
buy.~The high standard of living
by E. G. Collado at the Invest¬
it s |n America was built
by inventive
ment Bankers' Association Con¬
^

"-earning

some

Teturn

It is noted in the report of Mr
;

Baker ; that
latter ; part

assisted
meet

members

the

until /the

"from 1941

the

1945
of

its

bank

staff

rising cost of living by

the

the 'right to collective bargaining.
The Metropolitan took the right to
all
of 'the
courts.
It lost. The
UOPWA
creased

has
pay

than

ployees

ments."

•

contracts

;

.nation-wide

in¬

agree¬

I United

The

for

and job security for
35,000 insurance em¬

Financial

Em¬

ployees, a hitherto independent
union,' voted last Friday to af¬
filiate with the AFL and it is
derstood

that

the

AFL

has

un¬

ac¬

cepted that union's application tor,
a

charter. The vote for affiliation

ran

six-to-one in favor; it was an¬
Last
Wednesday,
the

payment of supplemental com¬
pensation at increasing rates."

nounced.

j The *>Qnort adds:

Relations election on the issue of
collective bargaining agent among

"About

year,

ago

was

de¬

UFE

cided to make a part of annual
salary5the aggregate 15% of such
supplemental compensation pay¬

Parker

ments.

that

During the year and espe¬
cially since the expiration of the

Price

Control

Law

June

30,

last, the cost of living continued

the

lost

2-7

runners

ment

was

the

Labor

Auchincfoss;

Redpath.
made

State

Announce¬

yesterday

contract

also

between

the
UFE and the New York Curb Ex¬

change is expected to be signed
within

few days.

THE COMMERCIAL &

2928

INDICATES ADDITIONS SINCE PREVIOUS ISSUE

•

Acme Electric Corp.,

132,740

program.

Offering date indefinite.

Fidelity Co., Montpelier

American

•

Dec.

(letter of notification)

;

10,000 shares

(no par)

•

stock, to be offered to present stockholders.
Price—$59 a share.
No underwriting.
For additional
capital funds for expansion purposes.

Of the net proceeds ($292,940) $50,000
will be used to pay current bank loans; about $20,000
will be used for machinery and equipment, and the re¬
mainder for working capital.
,

■}'> i?','
,V;

No under¬

For, organization of magazine publication.1

writing.
.

•

Associated Manufacturing &

Foundry Co. N.S.L.,

Nov.

(letter of notification) 10,000 shares ($10 par)
common.
Price—$10 a share. Underwriter—E.H.Mar¬
tin & Co.
For erection of modern grey iron foundry
and for working capital.
»
J;
k

Albuquerque, N. Mex.

China Corp., New York

I
ilk1 i

;

Trenton, N. J.

Acme-Hamilton Mfg. Corp.,

Atlantic Refining Co., Philadelphia

American Locomotive Co., New York
filed 50,000 shares 5% cumulative preferred^ :
stock ($20 par) and 82,000 shares
($1 par) common
July* 18 filed 100,000 shares each of $100 par prior pre¬
stock.
Underwriters—G. L. Ohrstrom & Co. and S. R.
ferred stock and $100^par convertible second preferred
29

Livingstone & Co.
Offering—Company is offering the
50,000 shares of preferred, while the 82,000 shares of
common are being sold for the account of certain stockholders.
Prices—$20 a share for the Preferred, and

. .

Bedford, Mass.

Aug. 22 filed $1,500,000 of 5% sinking fund debentures,
1961, and 50,000 shares ($1 par) common stock.*'
vUnderwriter^-Ames, Emerich & Co., Inc., and Dempsey
due

Co., Chicago. Offering—The debentures will be offered publicly. The common shares will be issuable upon f
the exercise of stock purchase warrants for purchase of J
common stock at $2 a share above the bid price of such $
common on the effective date of the registration.
Com¬
&

Oct. 29 filed 293,000 shares ($100 par) cumulative pref¬
erence stock.
Underwriter—Smith, Barney & Co., New

York.
Offering—Stock will be offered for subscription
Corp., New York.
to common stockholders on the basis of one share of
amendment.; Proceeds—Net proceeds, with
M;-. preference stock for each nine shares held.
Unsub-•
other funds, will be used to .redeem $20,000,000 of 7%
scribed shares will be sold to the underwriters who will
cumulative preferred stock at $115 a share plus accrued
1 reoffer it to the public.
Price by amendment. Proceeds
dividends. Indefinitely postponed,
—A maximum of $15,540,000 of the net proceeds will be
applied to redemption of the company's cumulative pre:
American Water Works Co., Inc., N. Y.
M ferred stock, convertible 4%
Series A, at $105 a share.
March 30 filed 2,343,105 shares of common (par $5) plus
The balance will be added to general funds for corporate
an additional number determinable only after the re¬
'M purposes including repayment of obligations, acquisition
sults of competitive bidding are known. Underwriters—
of additional production, and
expansion .of refining,
To be filed by amendment. * Probable bidders include

stock. Underwriting—Union Securities
Price

$11.50 a share for the common. Proceeds
Company will
apply proceeds to fully discharge secured demand
notes, mortgage notes and partial discharge of de¬
I'M
benture indebtedness. Offering temporarily postponed.

Louis

Sept. 6 filed 336,550 shares common stock (par $1).; Un¬
will sell warrants for 25,000 common shares to the
underwriters at 10 cents a warrant. The remaining warderwriting—No underwriting.
Offering—Stock will be
rants will be sold to officers and employees of the com-goffered
for subscription to common stockholders in

Price—Debentures at 98. Proceeds—Company willed the .ratio of

one

additional share for each two shares

$1,025,000 of proceeds of debs, for payment of an-f held.-, Unsubscribed shares will be offered for subscripIndebtedness to Bankers Trust Co., New York. Balance, ration- to officers and directors of the company
Price—By
amendment.
will be added to working capital. Offering postponed.
Proceeds—Working capital. Offering in¬

Australia, Commonwealth of

( 12/16)

3%% bonds due Dec. 1,
1966. Underwriter — Morgan Stanley & Co. Price by
amendment. Proceeds — Net proceeds together with
Nov. 27 filed $25,000,000 20-year

American Zinc, Lead & Smelting Co., St.

;

III

arily postponed.

/ '• '«*

»;

transportation and marketing facilities. Offering tempore

Dillon, Read & Co. Inc., White Weld & Co., and Shields
& Co. (jointly), and W. C. Langley & Co. and The
First Boston Corp. (Jointly).
Offering—Price to public
by amendment.
;
'
\ '

pany

pany.

and 10c per share of Class B common.

mon

Sept. 25 filed 75,000 shares of common stock (par $1),
Underwriter—Riter & Co. Proceeds—Stock being sold
for account of Harry Bloomberg, President. Price—By
amendment.
Offering date indefinite.

Aero vox Corp.,

N. Y«

American Limoges

price of $200.

Aug.

Inc.,

(letter of notification) 400 shares each (no par)
preferred and "(10c par) Class A common and 100
shares ($10 par) Class B common.
Price—$100 a unit"
for 1 share of preferred and one share of Class A com-

capital

the sale of 68,880 shares and four selling stockholders
the proceeds from the sale of 63,860 shares.
Company,
also will receive proceeds from the sale of 20,000 war¬
rants for common stock to underwriters at an aggregate

Magazine Contributors,

V Nov. 26

>4iV.

Associated

•

funds for its building and expansion

pates it will use the

Cuba, N. Y.

($1 par) common stock.
IJwJerwritersT-Herrick, Waddell & Co., Inc., and First
Colony Corp J Offering—To be offered publicly' at $5
a share.
Proceeds—Company will receive proceeds from
filed

Thursday, December 5, 194(J

in Registration

Now

Securities

June

FINANCIAL CHRONICLE

/, :

•treasury funds will be Used to redeem on Feb. 1, 1947.

$18,000,000 New South Wales external 5s due 1957 and
to pay, at maturity Feb. 15, 1947, $8,700,000 State of
<0*
Queensland External 6s.
• j '-mm:- •

''''V'

use

Air Lanes,

definitely postponed.

Inc., Portland, Me.

(letter of notification) 15,000 shares each of pre¬
ferred and common.
Offering price, $10 a preferred
share and 1 cent a common share.
If offerings are made
in the State of

Maine, they will be made by Frederick
C. Adams & Co., Boston.
To complete plant and equip¬
ment and to provide working capital.
'
*
.

American

Broadcasting Co.,

Inc., N. Y.

(letter of notification)

Dover,

Del.

20,000 shares each

($10

^par) 5% cumulative preferred and no par common. Price,
share of preferred and one
share of common. Underwriter—E. M. Fitch & Co., Phila¬
delphia. Proceeds—For additional machinery, working
capital and other corporate purposes.
j
:
^
$10

unit consisting of

American

one

Cladmetals

Co., of Pittsburgh

July 8 filed 196,500 units comprising 196,500 shares of
voting common stock ($1 par) and 589,500 shares of non¬
voting common stock ($1 par), each unit consisting of
I share of voting common and 3 shares of non-voting
common.
Underwriters—None—the company intends to
distribute its common stock directly to the public. Offer¬
ing—Price $6 per unit.
Proceeds—Net proceeds esti¬
mated at $1,179,000 will be used to pay a mortgage on
plant, pay accounts payable, purchase equipment, for
building alterations and working capital. *
,
American Colortype

Co.

filed

33,639 shares of common stock (par $5).
Underwriters—Rauscher, Pierce & Co. Inc., and E. H.
Rollins & Sons Inc.

Price by amendment.
by six stockholders.

Co., Clifton, N. J.

;

Aug. 12 filed 30,000 shares ($100 par) cumulative pre¬
ferred stock.
Underwriter-—White, Weld & Co.
Price
,

by amendment.
Proceeds—Net proceeds initially will
be added to general funds, however, the company antici-

Armour and

Co., Chicago

preference stock, Series A; 300,000 shares of convertible

share for each

new

scribed

will be purchased

of.common

shares of

covers

reserved for issu¬

common

($100 par) preferred, 4,750 shares (no par) common and "
$50,000 10-year 5% debenture notes, all to be offered to T-/.
the public. Prices—$5 per common share to stockholders;
$10 per common share to public, $100 per preferred share,
"
No underwriting.
and debentures at face.
To increase
working capital.

Beaunit Mills,

...v

....(

Inc., New York

Sept. 27 filed 180,000 shares ($2.50 par) common. Under-'
White, Weld & Co., New York. Price — By
amendment. Proceeds—Of the total, 140,000 shares

writer

—

being sold by St. Regis Paper Co., New York, and the
remaining 40.000 shares are being sold by I. Rogosin,
President of Beaunit
\

\...

Mills, Inc.

Berbiglia, Inc., Kansas City, Mo.

(letter of notification). 41,000

shares of 5%

cumulative convertible $6 par preferred.

Berg Plastics & Die Casting Co., Inc.

Artcraft Hosiery Co., Philadelphia

It also

Materials, fnc^ Cleveland, Ohio;

Offering priced v
$6 a share. Underwriter—Estes, Snyder & Co., Topeka,
Kans. To pay outstanding indebtedness and expenses and^/ |f; ; |
to open five additional stores in Kansas City, Mo. Offering postpone'd indefinitely.
i
t "
y^ :
—

the

Sept. 27 filed 53,648 shares ($25 par) 4V2% cumulative
convertible preferred and 150,000 shares ($1 par) com¬
upon

common,

Food

(letter of notification) 5,000 shares f(no par> ft
to be offered to stockholders; 295 shares of

unexchanged shares of $6 prior stock and to redeem its
outstanding 7% preferred stock. Temporarily postponed.

ance

Sept.

Price—Public offering prices by amend¬
Proceeds—Net proceeds will be used to retire all

mon.

Basic

Unsub¬

share held.

common

underwriters.
ment.

Nov.

Offering—The 350,000 shares of first

preference stock will be offered in exchange to holders
of its 532,996 shares of $6 cumulative convertible prior
preferred stock at the rate of 1.4 shares of first prefer¬
ence stock for each share of $6 prior preferred.
Shares
of first preference not issued in exchange will be sold
to underwriters. The 300,000 shares of second preference
stock will be offered publicly, jThe 1,355,240 shares of
common
will be offered for subscription to common
stockholders of the company in the ratio of one-third
of

•

second preference stock, Series A, and 1,355,240 shares
common stock
(par $5).
Underwriter—Kuhn, Loeb &

Co., New York.

„

Shares are being sold
.
\
,
.

July 12 filed 350,000 shares (no par) cumulative first

(12/23-31)'

preferred stock (par
$100) and 200,000 shares of common stock (par $1)»
Underwriters—Kidder, Peabody & Co. and Bear, Stearns
& Co. Proceeds-—Will, go to selling stockholders. Price
by amendment,
*
'"if-

Offering—Stock will be offered to

the public.

Nov.

27 filed 950,000 shares ($1 par) common stock.
Underwriter—Dillon, Read & Co. Inc., New York. Offer¬
ing—A maximum of 100,000 shares may be sold by com¬
pany to persons, firms, or corporations with whom the V
corporation had network affiliation agreements on March
31. The remainder will be offered publicly. Price by
amendment. Proceeds—To prepay notes payable to ac¬
quire radio station WXYZ, to construct broadcast trans¬
mitter for station KGO at San Francisco and for working
capital.

Building Corp.,

Western Gas

Arkansas

June 5

June

American

;

Oct. 9

Bachmann Uxbridge Worsted Corp.

Nov. 27 filed 45,000 shares of 4%

conversion of preferred. Underwriter—New-

(letter of notification) 75,000 shares (10c par> k*
Price—$4 a share. Underwriter—E. F. Gilles- /
pie & Co., Inc. Proceeds—For acquisition of machinery,,
tools and raw materials, and for working capital.
Oct. 31

common.

burger & Hano, Philadelphia. Price—$25.50 a preferred
>

share and

$12 a common share. Proceeds—Company will
receive proceeds from.the sale of all of the preferred
and 100,00
shares of common. The remaining 50,000
shares of common are being sold by three stockholders.
Estimated net proceeds of $2,300,000 will be used by
the company to pay off bank notes of about $1,100,000
and to purchase additional machinery and equipment
in the amount of $1,200,000. Offering date indefinite.

Nov.

Birmingham

Electric

Co.,

;

Birmingham, Ala.

■

j' /

($100 par) 4.20% preferred- - 1
determined by competitive bid- - ^

filed 64,000 shares

Underwriting—To

ding. Probable bidders include The First Boston Corp.;
Dillon, Read & Co., Inc.; Blyth & Co., Inc.; Lehman
Brothers; Kidder, Peabody & Co. Offering—Company
is offering the stock on a share for share exchange
basis to holders of its $7 preferred stock and $6 pre-

: I

,'.'a

☆

•

:• v"-

—

Corporate and Public Financing

SPECIALISTS IN

•

Underwriters and Distributors

States Government Securities?
•

'•v

•

Stale and

■-'

■

Corporate and Municipal

Municipal Bonds

•

Securities

t
i:

■

•i.'.
!

The

C. J. DEVINE

FIRST BOSTON
CORPORATION
Boston

•

New York

•

Pittsburgh

48 WALL ST., NEW YORK 5, N. Y.

•

Chicago

and other cities

CO.

INC.

•

Boston

•

Cincinnati

☆

Philadelphia
•

St. Louis

•

HAnover 2-2727

Pittsburgh

•

San Francisco

Cleveland

Kidder,
'/
Members
New York

f '
- Founded 1865
of the New York and Boston Stock Exchanges
Boston

Philadelphia

Chicago

jVolume

.164

Number 4548

NEW ISSUE CALENDAR
December 5,

Offering date indefinite.
Bowman

1946

V'-'

iv,

"'■i'-V

December 9,

■

"V''

;4^!v v
General Engineering & Mfg. Co.—--Pref. and Com.
Kerite Co.
Common

■

:/A

•

A Braunstein

-.'l,''A

1946

December

10,

& South West

"V''v'

; December

••

*"?'

11,

■

V/V-J'7/'. '

■

Prospectus will be issued

merger into the issuer of American Public
Service Co., to provide funds for
retiring the preference
shares of the
not

issuer

exchanged

Underwriters

for

and

American Public Service Co.,
of the merged corporation.

by amendment.

Possible

bidders:

Forgan & Co.: Lehman Brothers-Lazard

;»

Glare,

Freres

Co,

(jointly); Smith, Barney & Co.-Harriman, Ripley & Co.
(jointly); Blyth & Co., Inc., Stone & Webster Securities
Corp. and First Boston Corp. (jointly). Price
by amend¬

ment. ;

Central Soya Co., Inc., Fort Wayne, Ind.
■/' Aug. 21 filed 90,000 shares (no par) common. Under¬
^

;

Briggs & Stratton Corp., Milwaukee
;4
V, A
writer—None.
Offering—Common shares initially wilt
Aug. 9 filed 76,000 shares (no par) capital stock. Under¬
writers—A. G. Becker & Co., Inc., Chicago, f Price by V; be offered for subscription to common stockholders at
: rate of one share for each
7% shares held. Unsubscribed
amendment.
Proceeds—Shares are being sold by stock¬
shares will be sold to underwriters.
Price by amend¬
holders. Temporarily postponed.
A
ment.
Proceeds—Working capital, etc. Offering indefin(v itely postponed.
y:,:
:'v;!
Brooklyn (N. Y.) Union Gas Co. «:

.f'/

•v

company,, the remaining' 5,500 pre¬
all of the common are Keing sold by

Offering date indefinite.

1946

Kansas City Power & Light Co.,
(12 noon, EST)-——

Proceeds—7,000 preferred shares

common.

proposed

($25 par) 4Va% -cumulative

present stockholders. Net proceeds to the company, es¬
timated- at $147,500, will be used to prepay to the ex¬
tent possible outstanding $149,300 mortgage liabilities.

-——-Preferred

.'-'.V'-'v

for

being sold by

ferred shares and

Philadelphia Electric Co. (11:30 a.m.; EST)--Bonds

•

are

Common
Gulf Mobile & Ohio RH._l______Equip. Trust Ctfs.
High Vacuum Process, Inc
r,7Commoii

■

Corp. (Del.)

Preferred

in connection'with the
public invitation for sealed bids
for the purchase of a sufficient number
of such shares
as
same will be constituted
upon consummation of a

'. convertible preferred stock and 50,000 shares (200 par)
common stock. Underwriter — C. K. Pistell &
Co., Inc.,
New York. Price
$25 a share for preferred and $11

1946

St. Regis Paper Co

Central & South West Utilities Co.

—

Carson'Pirie Scott & Co.^-__Continental Car-na-var Corp

Aug. 30 filed its ($5 par) capital stock.
Company's name
is to be changed by
post effective amendment to Central

(Harry) i Inc., Wilmington, Del.

•( Sept. 25 filed 12,500 shares

corporate purposes,

Gum,. Inc., Philadelphia

holders who will receive proceeds.

Dobbs Houses; Inc.!.- —:-------1 Common
'

outstanding $6 preferred shares, redeemplus dividends; balance for general

able at $105 a share

....

Sept. 27 filed 268,875 shares ($1 par) common. Underwriter—Van Alstyne, Noel &*Co., New York. Price—By
amendment. Proceeds—Stock is being sold by share-

7-Up Texas Corp.-„—A and CI. R Common
December 6,

tion of 19,900

be used to pay the company's 2%'subordinated note in
the principal amount of $5,268,750 and accrued interest.

(Showing prohahlm date of offering)

2929

,V Proceeds—Net proceeds, together with other'funds; will

>.U"

THE COMMERCIAL & FINANCIAL CHRONICLE

Bonds and Pref.

Minneapolis-Honeywell Regulator Co._-_Preferr?d
New York Central RR.
(noon, EST)_Equip. Tr. Ctfs

/;%44/x- December 12, 1946 y'yy;:■
Drayer-Hanson, Inc.-___—

——Class

Westinghouse Electric Corp.
December IS,
Read

1946

(D. M.) Co

-i

11'

May 3 filed 70,000 shares of cumulative preferred stock

Preferred

Common

Chase Candy Co., St. Joseph, Mo.
Sept. 12 filed $2,500,000 of 4% sinking fund debentures,
Bids Rejected—Company
July 23 rejected two bids re¬
due 1961; 100,000 shares
($20 par) 5% convertible curauceived for the stock.
Blyth & Co., Inc., and F. S. Mose- t lative
preferred, and 170,000 shares ($1 par) common.
ley & Co. and associates submitted a bid of 100.06 for a
Underwriters:
F. S. Yantis & Co., Inc. and H. M.
4.30% dividend.
Harriman Ripley & Co. and Mellon
Byllesby and Co. (Inc.), Chicago, and Herrick WaddeB
Securities Corp. bid 100.779 for a 4.40% dividend.
In-,
4 & Co., Inc., New York. Offering—Common will be ofdefinitely postponed.
4 fered for subscription at $10 a share to common stock¬
holders at rate of one share for each two shares held "If
"}• California Oregon Power Co.

($100 par).

Underwriters—To be filed by amendment.

—

December

16, 1946

Australia, Commonwealth of--I-i

;;:f -. 'a•*4• !,V-'/v; •'

Hartman

-Bonds

•Cyy ...;.'.v

December 17,

V'-y\..rfefe-'

••

1946 !

Ohrbach's Inc

—

;

December 23, 1946

Oct.

19. Shares of

not subscribed

common

for

writers—Names

Pennsylvania Turnpike Commission
(Noon, EST)
———————Bonds
Pittsburgh & Lake Erie RR. (noon, EST)_ 1 l -Bonds
-

Stock will be sold

Preferred

—

of record

May 24 filed 312,000 shares of common stock (no par).
through competitive bidding. Under¬

(Wm. H.) Corp.—______-Capital Stock

employees. Price—The debentures will be offered at
$100 and the preferred at $20 a share. The common will

by amendment.
Probable bidders in¬
clude Blyth & Co., Inc.; The First Boston
Corp.; Harri¬
man

Ripley & Co..

Bachmann Uxbridge Worsted Corp.__Pref. & Com.
Kingsport Press, Inc
—Debentures and Com.
i
January 15, 1947
;
White's Auto Stores, Inc.-——Pref. and Common
.

offered

for

sale

be offered to stockholders at

Offering—Stock is

being sold by
Standard Gas and Electric Co.,
parent, of California.
Bids Rejected—Standard Gas & Electric Co.
rejected
June 25 two bids for the purchase of the stock as un¬
satisfactory. Blyth & Co., Inc., and First Boston Corp.
bid of $28.33 a share, and Harriman
Ripley & Co. bid
of $24,031 a share.
Stock will again be put up for sale
when market conditions improve.
\
1 /

will

common

officers, directors

$10 a share.

and
'

Pursuant to the

stock

subscription rights, F. S. Yantis & Co,
shares of the 170,000 shares of
common for investment.,
Any of the remaining 70,009.
shares which are not subscribed for by stockholders and
officers, directors and employees will be sold to the
will

purchase

100,000

underwriters. Proceeds—Net proceeds, estimated at $5^
856,125, will be used to pay the balance of the purchase-

„

price,

amounting to $5,150,000, for acquisition of the
candy manufacturing business operated by Clinton In¬
dustries, Inc., as its national candy division with plant*
in St. Louis, Mo., and Chicago. The balance will be used

Cameron Aero Engine Corp., New York
Oct. 2

ferred stock, plus a cash
.expires 3 p.m. (EST) Dec.
the exchange will be sold
price not less than $100 per

Blumentha!

(letter of notfication) 60,000 shares of common.
Offering—Price $2 a share. Underwriter—R. A. Keppler
& Co., Inc., New York.
Proceeds—To demonstrate the

adjustment.

Exchange offer
Shares not required for

23.
at

competitive bidding at
share net to the company,

Camfield

(Sidney)

& Co. Inc., New York; C
Aug. 30 filed 119,706 shares (no par) common and sub¬
scription warrants relating to 30,000 shares thereof.
^Underwriting — None. Proceeds—For reimbursement ;
of

Mfg. Co., Grand Haven, Mich.

Offer-,

Sept.

ing date indefinite.

Oct.

Book-of-the-month Club, Inc., New York
28 filed 300,000 shares ($1.25 par)
capital

July
stock.

Underwriter—Eastman, Dillon & Co., New York. Offer¬
ing—Of the total, the company is selling 100,000 shares
and six

stockholders, including Harry Scherman, Presi¬
dent, and Meredith Wood, Vice-President, are selling
the remaining 200,000 shares.
Price by amendment.
Proceeds—Company will use its net proceeds for work¬
ing capital to be used for expansion of inventories of
and

paper

other

materials

raw

Boston Store of

and

book

Offering—Preferred

will

Co.

and

have

Stroud

Co., Inc.

non-detachable

purchase warrants for purchase of 30,000 shares of
stock.of the total common,

mon

($1

par)

stock.

Offering—Stock initially

common stockholders of Admiral Corp.
Proceeds—$75,000 is earmarked for pur-'
machinery and equipment, and tools, jigs, dies

share.

and

fixtures:

purposes.

balance

will

available

for

Indefinitely delayed.

corporate

stock
com¬

issuance upon exercise of warrants attached to
preferred
and 95,000

cise

are reserved for issuance

outstanding

warrants.

Price—By

upon

exer¬

amendment.

expected

Co., Chicago

Becker

Underwriters—William Blair & Co.
&

Co.

members

Chinese

communities

proceeds,

Price—$101
estimated at about

share.

stock

the

Pro¬

$748,500,

are

establishing

branch plant in Canton, China.
(H. H.)

Sons, Inc., Augusta, Ga.

Nov. 7 filed 7,500 shares

($100 par) 5% cumulative pre¬
ferred and 35,000 shares ($1 par) participating convert¬
ible preferred. Underwriter—Johnson, Lane, Space &
Co., Inc., Augusta. Price—By amendment. Proceeds—
The securities are issued and outstanding and are being
sold

by the executors of the estate of George F. Claussen.
by Euclid Claussen, President of the company, who
sole stockholders.

„

Colonial Airlines, Inc., New York

Oct. 25 filed 150,000 shares ($1

par) capital stock. Undcrwriter—Auchincloss, Parker & Redpath, Washington,
D. C. and Hornblower and Weeks, New York. Price by
amendment. Proceeds—Net proceeds will be used to pay
off

;

■

;

$550,000 loan to the Continental Bank & Trust Co.

of New

York; purchase equipment and development ex¬
route. The balance will be used to in¬
working capital. <,
'
,

(12/10)

\ Nov. 15 filed 50,000 shares ($100 par) cumulative
ferred.

additional

applied as : additional working capital,
payment of indebtedness and to provide capital to aid

crease

Carson Pirie Scott &

for

;

penses of Bermuda

reserved for

and
„

Offering—Company expects to sell the
to

ceeds—Net

400,000 shares of common stock.- Under¬
writer—F'2gistrant will supply name of an American
underwriter by post-effective amendment.
Offering—
To the public at $1 a share in Canadian funds.
Proceeds
—For a variety of purposes in connection with explora¬
tion, sinking of shafts, diamond drilling and working
capital.

Ltd., of Toronto,

Ontario

375,000 shares will be

offered for sale for cash. 30,000 shares are

largely

are

Carscor Porcupine Gold Mines,

;

United States and elsewhere.

and

✓

serial debentures

July 1, 1947, and to participating dividends. Underwriter
—None.

Claussen's

common

will be offered to
chase of

China Motor Corp., New York

Corp. Ltd., Toronto

June 24 filed

Chicago, Inc.

H. Davis

150,000

Underwriter—Dempsey & Co.

inventories.

Sept. 10 filed 30,000 shares ($50 par) 5% cumulative
preferred and 500,000 shares ($1 par) common. Under¬
writers—Paul

filed

its

Oct. 24 filed 7,500 shares ($100 par) Class A stock, en¬
titled "to 6% preferential dividends, cumulative from

Canadian Admiral

redeem

July 29 filed 220,000 shares ($1 par) common stock. Un¬
derwriters—Gearhart & Co., Inc. Offering—Of the shares
registered, 100,000 are issued and outstanding and will
be sold to the underwriters by three stockholders at
$4.50 a share for their own account;, The- remaining

company's
treasury for funds expended in
re¬
demption
of
3,907
shares
of
7%
cumulative
120,000 shares are being offered by the company. Price
pre¬
ferred on April 1, and for funds deposited in trust for.
4 $4.50 a share. Proceeds—Company's share to pay rene¬
redemption on Oct. 1 of remaining preferred shares. Al¬
gotiation refund in amount of $180,000 to the U. S.
though it was proposed to offer the stock for subscrip¬
Government, and for additional working capital.
tion to stockholders at $10 per share,
company on
20 decided to withhold action at this time.

working capital.

Cameron Engine by flight tests in company-owned plane.

and

pre¬

Inc. of

Chicago.
Price—By amendment.
Proceeds—Proceeds will be applied toward the redemp-

•4

Colonial Sand & Stone Co., Inc., N.

4/, v-'

August 15 filed 300,000 shares ($1 par) common stock.
Underwriters—Emanuel, Deetjen & Co., New York. Price
by

amendment. Proceeds—Company will receive pro¬
and Generoso Pope,

ceeds from the sale of 150,000 shares

selling the remaining 150,these shares. The
company will use its proceeds for payment of mortgage
notes, open account indebtedness and for purchase o£
additional equipment. Any balance^will b.e added to
working capital. Indefinitely postpi led. y l*-1
President of company, who is

000 shares will receive proceeds from

UNDERWRITERS—DISTRIBUTORS—DEALERS

The Marine

•

ia'$

-A

•

Industrial, Public Utility, Railroad
and

Members New York Stock

PHILADELPHIA

Midland trust Company
■'

OF NEW YORK

ALBANY

PITTSBURGH

TRENTON

INDIANAPOLIS
■

•

Registrar

NEW YORK 15, N. Y.

Exchange

CHICAGO

Transfer Agent

WASHINGTON

•

Trustee | ;

ONE HUNDRED TWENTY BROADWAY

Hemphill, Noyes CS. Co.
YORK

Municipal Securities

;

NEW

;

RECTOR 2-2200

Colorado Milling & Elevator

Gd., Denver, Col«u

Aug. 20 filed 70,000 shares ($50 par) cumulative con¬
vertible preferred stock.
Underwriter—Union Securi¬
ties Corp., New York.
Price by amendment. Proceeds ,-A
—Prior to the proposed issue of preferred stock, the
company plans to call its $3 cumulative convertible pre/,
ferred stock for redemption at $55 a share plus accrued
dividends.
Funds for the redemption will be supplied W
by

short term bank loan. .Proceeds from the sale of
(Continued on page 2930)

2930

preferred, together with other funds, will be used to
repay the bank loan. Indefinitely postponed.
Columbia
26

Aircraft

Products

Inc.

filed

150,000 shares ($4 par) 30c cumulative
convertible preferred stock, convertible into common
stock in the ratio initially of IV2 shares of common for
each share of preferred. Underwriter—Floyd D. Cerf
Co., Inc., Chicago. Offering—Company offered 59,585%
shares for subscription to present common stockholders
of record Aug. 6 at $4.50 a share in the ratio.of one share
of preferred for each share of common held. Rights
expired Aug. 20. Stockholders subscribed for 735 shares.:
The offering to common stockholders excluded the two
principal stockholders who waived their rights to sub¬
scribe.
The
remaining 90,414% shares and 58,850%
shares not subscribed to by common stockholders will
be offered to the public through underwriters. Price—$5
a
share. Proceeds—Approximately $50,000 for payment
of Federal taxes; $250,000 for payment of Lincoln-RFC
loan; $50,000 as a loan to Palmer Brothers Engines, Inc.,
a
subsidiary; balance for purchase of machinery/ and
equipment and working capital.
*

Delta

Hybrids Co., Tuscola, III.

filed 100,000 shares ($5 par) class A stock and;:
300,000 shares ,(10 cent par) common stock, of which
200,000 shares reserved for conversion of class A. Each i
share of class A stock is initially convertible into 2i
shares of common stock. Underwriters—Herrick, Wad-1
dell,. & Co., Inc., New York. Offering—To be offered f
a unit consisting of one share of class A {,
one share of Common stock, i Proceeds—$201,- }
000 jfor retirement of 2,010 shares ($100 par) preferred i
stock at $100 a share;" remaining proceeds, together with
other funds, will be used for production of educational

publicly at $8.10

stock and

;

v...-.:'V''.*- ■;./

Detroit Typesetting Co.,

;

Sept. 25 filed 70,920 shares

Aug. 5 filed 60,000 shares ($15 par) cumulative preferred!
stock.
Underwriters—Eastman^ Dillon & Co.
Price .by v
amendment.
Proceeds—To be used to redeem 15-year 4

writer
a

—

holders who

Cleveland, Ohio V;

common.

Under-'

will

Detroit. Price — $5.50
Stock is being sold by six share-

—

be- added *

ulative preferred at $53 a share.
Balance will
to working capital.
Temporarily postponed. .
!'"■

C. G. McDonald & Co.,

share. Proceeds

3% % sinking fund debentures, due 1959; and $2.50 cum- j

Detroit, Mich.^^

($1 par)

I j

Food Fair Stores, Inc., Philadelphia

(letter of notification) 500 shares ($100 par)
Price—$100 a share.No underwriting.
For
production, harvesting and marketing of white. hybrid
seed corn now growing to be sold for planting in Spring
common.

of 1947.

Inc., New York

June 25,

Nov.

Columbia Axle Co.,

Films

300,000 shares (200 par) common. Under-,
writers—Names by amendment. Price, $8 a share. Pro¬
ceeds—Of total, company is selling 150,000 shares and
remaining 150,000 shares are being sold by Apponaug
Manufacturing Co., Inc. Principal stockholder estimated
net proceeds to company <?f $1,007,913 will be added
to general funds to be applied for corporate purpose.
Company anticipates expenditures- of $300,000 in 1946
and $300,000 in 1947 for equipping and absorbing costs
of starting operations of four plants, two of which already have been contracted for, The balance : will be
added to working capital. ;•. /' jv
2 filed

Oct.

June

Inc., Jackson, Miss. ?

Delta Chenille Co.,

(Continued from page 2929)

V' '

!■

' ''

•

;

-v-i.:;;}
'•: 0, ^ j.-i'-J I

-.o■ • ■ ^

Foreman Fabrics Corp., New York

•

i\Jhly 29 filed 110,000 shares'($1 par)
outstanding.

receive

proceeds.
capital.

stock, all
Underwriters—Cohu & Torrey/ Price by |
common

amendment. Offering date indefinite.
^ > fi
!
89,540 shares ($5 par) common.
Under¬
writing—None. Offering—Of the total 56,420 shares are £
DevonshireChemicalslnc.,Boston,.Mass.
-Jv, Foster & Kleiser Co., San Francisco- V
!
to be issued to persons Under a trust agreement in satis- | Nov. 7 (letter of notification) 10,000,, shares! ($1 par) U
July 29 filed'.100,00ft shares, of $1.25 cumulative con-!
faction of funds loaned by the trust to the company;
class A and 20,000 shares (10c par) common. PriCe,
$10^•; vertible preferred, stock.:(par $25). Underwriter—Blyth

Oct.

filed

options, 2,300
expected that £

10,500 shares are to be issued to satisfy
shares will be sold to employees and it is

the remaining 20,320 shares will be sold to persons under
the trust agreement.
Price—$7.25 a share. Proceeds—

For

For working

Boston.

purchase of machinery and inventory.

unit

consisting of

shares of

common.

one

share of class. A stock and 2

General Stock &-Bond

selling agent. For working capital.

Madison, Wis.

Sept. 23 filed 16,071 Shares ($100 par) $4 cumulative
preferred. Underwriters — Paine, Webber, Jackson &

$5 cumulative

Shares will be offered for exchange for

share for share basis, plus cash adjust¬
ment. Shares not exchanged will be sold to underwriters.
Price by amendment. Proceeds—To redeem at $110 a
share, plus divs., all unexchanged old shares, t
V
1
\
•

Conlon

Nov.

Corp., Chicago

common

Price—$2.50 a share.
additional working capital.

Continental

Car-na-var

(12/10)

W;::

Corp., Brazil,

Ind.

(letter of notification) 132,500 shares ($1 par)
common and 35,000 warrants for purchase of common
4

one

after present public offering. Price—$2 a com¬
share, one cent a warrant. - Underwriter—L. D,

year

mon

Sherman & Co., New York.
'

For working capital.

Continental Oil Co., New

York

;

V : ;;;

number ($5 par) capital
stock shares. Underwriters—None. Offering—The shares

Nov.

filed

unspecified

will be offered for exchange on or

before Feb. 1, 1947,
of Texon Oil & Land
be filed by amendment.

to holders of $2 par capital stock

Co.

Inc.,

The

exchange ratio will

Proceeds—If

substantially all of the stock of Texon is
acquired by the company pursuant to this offer or other¬
wise, merger, consolidation or liquidation proceedings
subsequently

may

be instituted.

Los Angeles

-^S^fbr expansion, Working capital, etc. Dividend rate and

Fresh

Oct.

off loans and accounts payable.
Inc.

(letter of notification) 12,000 shares ($5 par)
Class A common and 8,000 shares ($5 par)
Class B
common.
Offering—Price $5 a unit. No underwriting.
For purchase of additional flight and servicing equip¬
ment, payment of deferred salary balances, for working
capital and other expenses.
'
"
Durasite Corp.,

Hall

Clearwater, Fla.

(jointly); Smith, Barney & Co., The First Boston Corp.
Eastman, Dillon & Co. (jointly). Proceeds — Pro¬
ceeds, supplemented by other funds, will be used to re¬
deem the outstanding International Paper Co. 1st & ref.
5% sinking fund mortgage bonds, due 1947. These bonds
were assumed by Hudson River Power Corp. which to¬

Inc/

($1 par) common. Under¬
Co. Price $8.25 per share.

(Originally company filed for 80,000
par $25 and 350,000 common shares.)
Crawford

Aug.

filed

preferred

gether with System Properties, Inc. will be merged
V Eastern New York Power, subject to approval of

($5

par)

stockholders.

Offering

into

stock.
Price by

Empire Millwork Corp., New York

common

President,

date indefinite.

co"

Cyprus Mines, Ltd., Montreal, Canada

corporate purposes.

will be used for
•

Dallas

Nov.

;-V-

'/■'/;

■

Glen Industries

Inc., Milwaukee, Wis.

the

cumulative converti¬
ble preferred stock,
(par $25) and 150,000 shares ol
cqmmon stock
(par $1). Underwriters—Van Alstyne,

Glencair Mining Co.

will receive the pro¬
from the issuance of 50,000 shares of the common •;

fering temporarily postponed.
Ero Manufacturing Co.,

Railway & Terminal Co.

Sept.

filed

105,000

Mark

Ltd., Toronto, Can;

Chicago

common

Funds).

development./.

Proceeds—For mine

Glensder Textile Corp., New York
Aug. 28 filed 355,000 shares ($1 par) common, of

which.'

55,000 shares are reserved for issuance upon the exer-'
cise of stock purchase warrants.
Underwriter—.Van-'
7

40,000 shares ($25 par) 5% participating1'
Underwriter—Straus
preferred stock.
Underwriters—Names to be supplied
a share.
Proceeds
y.
by amendment.
Probable Underwriters—Kidder, Peaholders. Offering date indefinite,
v
v<v T
b
body & Co., Merrill Lynch, Pierce, Fenner & Beane;
Rauscher, Pierce & Co. Price by amendment. Proceeds
Falk Mercantile Co., Ltd., Boise, Ida
—Proceeds will be applied to the? redemption of 3,843
Oct. 21 (letter of notification) 3,000 shares of 4%% .pre-r
shares of 7% preferred stock and for purchase of new
ferred ($100 par).
Price—$100 a share. Underwriterequipment and for construction as part of its modern¬
Richard Meade Dunlevy Childs, Boise, Idaho. Proceeds
ization and expansion program. Business—Railway, trol¬
—

($1 par) stock. Underwriter—/
Daniels & Co., Toronto. Price—40 cents a share

(Canadian

stock (par $1).
& Blosser, Chicago.
Price—$11.50
Shares are being sold by stockshares

Oct. 2 filed 300,000 shares

stock

mining operations,

(Texas)

/-/-,:■ .,7

July 31 filed 50,000 shares of $1.25 cumulative convert!-.,
ble preferred stock series A ($20 par) and 150,000 shares,
(10c par) common, all issued and outstanding and being
sold by eight selling stockholders. / Underwriters—Van;
Alstyne Noel & Co. Price by amendment. w Proceeda-r.
To selling stockholders, Offering temporarily postponed.:

Aug. 28 filed 50,000 shares of $1.25

ceeds

stock which will be used to increase productive capacity,
(par $1).
Underwriters—Sabiston-Hughes, Ltd., Toronto.
Offer- V add new lines of products and expand the business. The
ing—Shares will be offered to the public at 75 cents a
remaining 100,000 shares of common stock and the pre¬
share.
ferred shares will be sold by present stockholders. Of¬
Proceeds—Net proceeds, estimated at
$300,000,
common

space

■

Noel & Co. Proceeds—Corporation

May 31 filed 500,000 shares of

company's new product, the "Gemcooler (an air conditioning unit) and other

used to finance the

sec./

Clothes, Inc., L. I. City, N. Y.
300,000

Underwriters—First Boston Corp., New York.
amendment.
Proceeds—Go to Joseph Levy,

selling

(letter of notification) 99,000 shares of commoivof its holdings of such stock.
and purchase warrants covering 50,000 shares -Of com¬
Following the sale of its':
mon. Offering—Price $3 a common share and five cents
holdihgs J. G. White will no longer be parent of Frontier*
a warrant.
Underwriter—Amos Treat & Co., New York. f: /Company wiU/receive none of the prqeeeds. v
/
t
For machinery, plant renovation and working capital, f
General Engineering and Manufacturing Co.,
Offering date indefinite.
...
„**
>
:
St. Louis, Mo. (12/9-13)
Eastern New York Power Corp., New York
Oct. 21 filed 50,000 shares ($10 par) 5% cumulative con¬
Nov. 15 filed $9,861,000 of first mortgage bonds, sinking
vertible preferred and 100,000 shares ($2 par) common..
fund series, due 1961, and $3,000,000 ($100 par) pre¬
Underwriters—Dempsey, Tegeler & Co., and J. W. Brady.
ferred stock.
Underwriters—To be determined by com¬
& Co., St. Louis.
Price—$10 a preferred share and $5 a/
petitive bidding. Probable bidders include Halsey, Stuart
common
share.
Proceeds—Net proceeds, estimated at.
& Co., Inc.; Blyth & Co., Inc. and Kidder, Peabody & Co. f
j $893,000, will be added to working capital and will be

Proceeds—To repay demand loans and for general funds.
<-'■

Co., Trinidad, Colo.

Frontier Power

.Oct. 25 filed 119,431 shares ($5 par) commons Under¬
writer by amendment. Price by amendment. Proceeds—*
Shares are being sold by three stockholders, including
J. G. White & Co.,: Inc., New York,, which is selling all

Oct. 11

Aug. 2 filed 150,000 shares
writers—Aronson,

Dry Foods, Inc., Columbia, S. C.

Aug. 30 filed 450,000 shares (100 par) common. Under*!
writer—Newkirk & Banks, Inc. Offering—Of the total/
company is selling 350,000 shares and two stockholders,/
Roland E. Fulmer and Louis H. Newkirk, Jr., are selling,
the remaining 100,000 shares^ Price—$6 a share; Proceeds |)
—For purchase of sweet potatoes, plant expansion, addi-**
tional storage facilities, research and development work,
and working capital. Offering date indefinite.
•

Co., Los Angeles. Price—To public $10 a share. Pro¬
ceeds—Net proceeds, estimated at $694,761, will be used

and

Industries Co.,

Continental-United

(12/12-13)

Duluth (Minn.) Airlines,

For.

Nov.

Proceedi-rApproximately j

$1,060,950 for redemption of class A preferred; balance

Aug. 12 filed 80,529 shares ($1 par) 60c cumulative con¬
vertible Class A stock. Underwriters-^-Maxwell, Marshall

to pay

No underwriting.

holders.

basis plus a cash adjustmenti

Sept. 27 filed 75,000 shares R®' common. Under- > price by amendment. Offering temporarily postponed.
writer—Emanuel, Deetjen & Co., New York. Price^-By
amendment. Proceeds—Net proceeds will be used for V
4 Fowler Farm Oil Cdrp^ Duncan, Okla. ;f
< '
^
expansion of business consisting of airline catering and < Nov. 25
(letter of hotificatidn) 80,000 shares of common.}
restaurant and coffee shop operations.
Cg
Price—$1 a share. Underwriter—-John <3. Fowler, Presl-,j
dent. For drilling oil well.
/ o
i
Drayer-Hanson,

(letter of notification) 15,109 shares ($1 par)
to be offered for subscription to present stock¬

(12/6)

Curtis and Stone & Webster Securities Corp. Offering—

preferred, on

Dobbs Houses, Inc., Memphis, Tenn.

7*1

Commonwealth Telephone Co.,

& Co., Inc. Offering—Underwriters are making exchange
Corp. Boston,g, offer to holders of Class A preferred on share far shire.

Alstyne, Noel & Co.

Offering—The 300.000 shares are.

issued and outstanding

and being sold for the account,

of certain stockholders.:

Company has also issued 55,00ft,

stock purchase warrants to the selling stockholders
10 cents a share entitling them to purchase up to Aug.

1;-

Price

1949, common stock of the company at $11 a share.

by amendment. Offering temporarily
,

postponed.

Grand Canyon-Boulder Dam Tours, Inc.,

Bouldeti

to retire debentures and for

ley and bus transportation.

Farquhar

(A.- B.)

expansion purposes.

Co., York, Pa.

City,

Nev.//-:/^;'///::;^

Sept. 3 filed 500,000 shares ($5 par) capital stock. Under*
Writing—There will be no underwriting but Everett N.

Ctosby, President and James Manoil, Treasurer, will act:
as selling agents.
Price—$5 a share. Proceeds—For re-;,
financing of company and for working capital and funds
for development and construction program.

Danly Machine Specialties, Inc., Cicero, III.
July 26 filed 62,000 shares ($25 par) 5% cumulative
convertible preferred stock and 71,950 Shares (par $2)
common stock 40,000 by company and
31,950 by certain
stockholders. Underwriters—Paul H, Davis & Co., and
Shillinglaw, Bolger & Co., Chicago. Price by amend¬
ment. Proceeds—Company will use proceeds, together
with a $1,000,000 bank loan, to purchase machinery,
buildings and to retire bank indebtedness. Offering date

Proceeds will be used to redeem

Price—By amendment. Proceeds —»
$355,350 4%% sinking
fund mortgage bonds, due Aug. 1,
1957, to pay ofl
certain contracts and chattel mortgages of $72,000 and

(letter of notification) $190,000 of Class B com-;
moh and $10,000 of Class A common. Price—$10 per unit.:
No underwriting.
Erection of commercial building in

indefinite.

$800,000 to reduce principal on outstanding bank loans.

shopping center of Greenbelt.

Sept. 26 filed 30,000 shares

($25 par) cumulative con*
vertible? preferred; 45,000 shares ($5 par) common; and
ah unspecified number of common shares to permit cornversion of the preferred. Underwriter—Stroud & Co.,
Inc.,

Philadelphia.

Greenbelt

•

(Ind.)

Consumer Services,

Inc,

Nov. 26

.1V'.
*'

'v ;-it

'■

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"■

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•'•

'i!)

':;XvV-':v:-^T^':;•:'-:.j;:--V:; XXMXXX

•

'i;^

;",;'1',: '" ^T'": .,' ':-:

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•

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ffi''" M ",V;»
,

Volume 164

Number 4548

• vGreen Mountain Mining Co., Dixon, Mont.

•

Nov. 22

(letter of notification)'70,000 shares (25c
par)
common.
Price—62^c a share. No underwriting. For
exploration and development of
mining property.
'

Corp.

! E!?11!011 shares for each preferred share held; and 120,-

®"ares °1 $1 Par

common stock.

Byllesby and Co.,, Inc.

Underwriters—H.

Offering—Underwriters

purchase from the company
18,500 shares of preferred
and 20,000 shares of
common; and from Fred P. Murphy
and J.„ C. Graham, Jr., 100,000 shares of issued and out¬

(

standing
mon $14

•

■j

common,

notes,
porarily postponed.
pay

discharge

loan.

-/ "

Nov.

Offering

Gulf Atlantic Transports

)

-Jan.

17 filed

Provisionally offered Nov.
days, but time has been extended

18 for

stock

(par $1).

Oct; 23 filed 100,000 shares
(50c
writers—E. F. Gillespie & Co.,

•

♦

To be offered to

share for each five held.

writing.
*

stockholders in ratio of

Price—$10

share.

Nov.

Power & Light Co..
(12/11)

Kansas City,

filed $36,000,000 of first mortgage bonds, due
and 100,000 shares ($100 par) cumulative pre¬
Underwriting—To be determined by competitive

i; 1976;

York"

bidding. Probable bidders include Halsey, Stuart & Co.
Inc. (bonds only); The First Boston Corp. and Dillon,
Read & Co. Inc. (jointly); Central Republic Co. (stock)
and Smith, Barney & Co. (stock); Glore, Forgan & Co.
i and W. C. Langley & Co. (stock). Offering—To the pub/ lie.
Price—To be determined by competitive bidding.
/ Proceeds—Proceeds will be used to redeem $38,000,000
of 3%% bonds, due 1966 and 40,000 shares of first preH ferred stock, Series B.
Bids Invited—Bids for the pur; chase of the securities will be received at Room 1730, 165
1'Broadway*City^up to 12^Noon EST Dec. 11*
,
.
.

par) cbmmonrtJnder-

Offering

definite.
1

date" in■,>.■

Hammond Instrument Co., Chicago
Aug. 8 filed 80,000 shares ($1 par) common;

writer: Paul H.. Da vies &
*

Co., Chicago.

•.

Under¬

•
*

Price by amend-

Kansas-Nebraska Natural Gas Co;, Inc.,

Proceeds—Net proceeds will be used to redeem
/Its outstanding 6% cumulative preferred stock at" an
'estimated cost of $213,258,* exclusive of accrued divi¬
It also will

Phlllipsburg, Kan.

ment.

dends.

Nov. 29

(letter of notification) 2,800 shares (no par) $5

cumulative

preferred. Price—$106 a share. Underwriters
Co., Chicago; and The First Trust Co. of
Lincoln, Neb.
Proceeds—For payment of indebtedness
Cruttenden &

use

approximately $402,000 toward
'the purchase of a manufacturing plant in
Chicago; balance for working capital. Offering date indefinite.
; !

and for

improvements.

Harman
Nov.

(William H.)

Corp., Phila.

(12/17)

280,000 shares of capital stock. Under¬
writer—Smith, Barney & Co. Price by amendment. Pro; ceeds—Will
be applied to the purchase and installation
•of:machinery and equipment and to the carrying of in.ventories

and

receivables.

Additional

working

ris expected to be made available under
*

ment with the
*

/:•:

•

> *.
r

k4'

Chase' National

-V;

♦

■-x:)%
'

■■.{,

credit

filed

100,000

^ *;>'•••'■'/
*

•

■

X''. 'V":.rJ

($1

par)

common

rA/,r

stock.

*To be offered to the public at $8 a share.J Proceeds—
■} Company is selling 60,000 shares and stockholders are
'selling 40,000 shares.
The company will use its proceeds
1
to pay the costs of opening additional stores and to ex¬

pand merchandise in its existing stores. Offering tem'porarily postponed. VXXXX

High Vacuum.Processes,
(12/10)
2

notification)

(letter

Inc.,

Philadelphia

9,900

cumulative preferred stock-(par $25) and
of

common

offered

•

'shares at

stock
units

$25.15

initial

organization

Estates,

Inc. (730 shares),
(640 shares). *

Worthington

Scranton

(12/23-31)

share.
Proceeds—For exploration and development of
mining property and for administrative expenses. Busi¬
ness—Exploration and development of mining claims.

Leader

Corp., Burbank, Calif.
*

Enterprises, Inc.,

New York

Sept. 26 (letter of notification) 150,000 shares of (100
par) common and 57,000 shares ($5 par) 6% cumulative
convertible preferred, Series A. Price—10 cents a com¬
mon
share and $5 a preferred share.
Underwriter—
Gearhart & Co., Inc., New York. Proceeds—To replace
working capital used to promote new publication called
Fashion

Trades

and

provide

additional

working

capital. Offering date indefinite.
•

Tucson,^A.riz.; J, Earle May & Co., Palo Alto, Calif.;

Lynchburg

Nov.

(Va.)

Gas Co.

May McEwen Kaiser Co., Burlington,

N. C.

Aug. 22 filed 175,418 shares ($1 par) common stock.
Underwriters—Goldman, Sachs & Co., and Hemphill,
Noyes & Co. Price—By amendment. Proceeds—Net pro¬
ceeds go to 11 shareholders who are selling the stock
being registered. Offering temporarily postponed.
•

Meyer-Blanke Co., St. Louis, Mo.

Nov.

common,

(letter of notification) 1,200 shares (no par)
50% on behalf of George A. Meyer Finance Co.,

St.

Louis; and 50% on behalf of Robert L. Blanke, Jr.
and Marian Blanke, both of University City, Mo. Price—
$31

share. Underwriter—Smith-Moore & Co., St. Louis.

Michigan Gas & Elec. Co., Ashland, Wis.
'June 24 filed $3,500,000 of series A first mortgage bonds,
due 1976; 14,000 shares ($100 par) cumulative preferred
stock and 120,000 shares ($10 par) common stock.. Un¬
derwriters—To be determined by competitive bidding.
Probable bidders include Blyth & Co., Inc.; Kidder, Pea-

body & Co.; The First Boston Corp.; Harris, Hall & Co.
(Inc.); Merrill Lynch, Pierce, Fenner & Beane, and Ira
Haupt & Co. Offering—New preferred will be offered
on
a share for share
exchange basis to holders of Its
outstanding 7% prior lien, $6 no-par prior lien, 6%
preferred and $6 (no par) preferred.
Of the common
stock being registered, company is selling 40,000 shares,
Middle West ip selling 57,226 shares and Halsey, Stuart
& Co. Inc., New York, is selling 22,774 shares.
Proceeds
—Michigan will use net proceeds from bonds to redeem
$3,500,000 3%% series A first mortgage bonds, due 1972,
at 106.75 and interest.
Net proceeds from sale of com¬
mon and from shares of new preferred not issued in ex¬
change will be used to redeem $375,000 3y2% serial de¬
bentures, due 1951, at 101.2 and interest. It also will
redeem at 105 and accrued dividends all unexchanged
shares of prior lien and preferred stocks.

work.

Middlekamp Building Corp., Pueblo, Colo;

Inc., New York

Macco

Corp., Clearwater,

filed

Calif.

par) capital stock.
Underwriter
Dean Witter & Co., Los Angeles. PriceBy amendment. Proceeds — To pay off outstanding
25

—

bank loans.

Minneapolis-Honeywell Regulator Co.

100,000

(12/11)

($100 par)' 3.20% convertible
preference stock, Series A, and 32,400 shares ($3 par)
common into which the preference stock is convertible.
Underwriter—Union Securities Corp., New York.
Price
Nov. 21 filed 24,300 shares

amendment. . Proceeds—Proceeds will be used to
supplement current working capital.
Business—Manu¬
facturer of automatic control instruments used in a wide
variety of fields including heating and air
Nov.

natural gas.

Sept.

(letter of notification) $95,000 4% first closed
mortgage sinking fund borls, due 1960.
Price—Not
more than 98^2 per unit, / Underwriter—Boettcher and
Co., Denver, and Hutchinson & Co., Pueblo, Colo. For
retirement of debt and for working capital.
/
'

(letter of notification) 5,000 shares ($10 par)
common.
Price—$10 a share.
No underwriting.
For
conversion of company's facilities from manufactured to

June 28, 1946 filed 20,000 shares of 4Vz% ($25
par) cumu¬
lative convertible preferred stock
and

33,884 shares
($1 par) common stock. Underwriters—Otis & Co.,-Cleve¬
land, Ohio. Offering—Company is selling the preferred
.shares and stockholders are selling the common shares.
.Price—$25 a share of preferred. Price for the common
by amendment. Proceeds—Net proceeds will be added
to general funds. Offering date indefinite.

Oct. 23

■

119,500 shares of ($1 par)
capital. Price, $3 a share. No underwriting contract, however, 55,000 shares to be issued to or through H. R. O'Neil
.of Buckley Bros., Los Angeles, will be sold
by one or
more of the following firms:
Buckley Bros.; Durand &

$1,000,000 in bank loans with the balance going
Business—The company consists of

into general funds.

♦

& Co.,

shares of $12.50 par common.
Underwriter—Hornblower ,& Weeks, New York.
Price;
by > amendment.
Proceeds—Proceeds will be used to

non-

Oct. 16 (letter of notification)

(Henry)

160,000

preferred and three common
unit.
Proceeds will be used for
and operating expenses, business

Hollywood Colorfilm

filed

$1,200,000 of sinking fund debentures, due
1961, and 60,000 shares ($2.50 par) common,. Under¬
Midas Yellowknife Gold Mines Ltd., Toronto,
writer—Alex. Brown & Sons, Baltimore, Md.
Price—
Canada
By amendment. Proceeds—Company will receive pro¬
Oct. 21 filed 1,250,000 shares ($1 par) common. Under¬
ceeds from sale of debentures, and common stockholders
writer—R. J. Hale, East Aurora, N. Y. Offering—Of the
f,- will receive proceeds from shares. Company will use
total company is selling $1,000,000 shares and the re¬
$577,500 to redeem 5,500 shares of 5% prior cumulative
preferred and $281,017 to prepay note to Equitable Life ! maining 250,000 shares are being sold for the account of
the principal underwriter, brokers and dealers, which
Assurance Society of the United States.
shares they will receive as additional compensation on
•
the basis of 250 shares for every 1,000 shares sold for
Kiwago Gold Mines Ltd., Toronto, Canada
the company. Price—60 cents a share. The underwriters
Dec. 3 filed 1,000,000 shares (no par) common.
Underwill receive a discount on the 1,000,000 shares of 15 cents
| writer—Jack Kahn, New York. Price—70 cents a share,
each. Proceeds—For exploration and mine development
the underwriting discount will amount to 21 cents a

■

Holt

and

Nov. 14 filed

.'needs, etc.

.Co.,

per share.
Proceeds—To selling stock¬
Higginson Corp. (4,130 shares); Donner

one

per

29,700 shares

(par 50). :,Not underwritten.
of

common

'*'

:V,

Alstyne, Noel & Co., New York, and
Johnston, Lemon & Co., Washington, D. C.
Offering—

Dec.

holders:* Lee

Kings port Press, Inc., New York

X/i

rf; i

(letter of notification) 5,500 shares of

Price—$17.75

Bank.
i

Underwriters—Van

•

Dec. 2

stock; Underwriter—Neergaard, Miller & Co., New York.

capital
agree-*

Hartfield Stores, Inc., Los Angeles

June

!•!; Kerite Co., New York (12/9)

filed

/ Manning, Maxwell & Moore, Inc., New York

No under¬

Mo.

Thorndike, Inc., New York. Price, $4.50 a share. Proceeds—For purchase of all the
outstanding stock of the
Benton Stores, Inc. and its affiliates from
William Book¬
man and Maurice
Hoppin pursuant to terms of a tontract entered into last August 15.

•

one

For expansion purposes.

Kansas City

shares (lc par) capital stock."
Underwriter—Slayton and Co., Inc., St. Louis.
Price—
$5 a share. \ Proceeds—For investment.
Business—In¬
vestment business.
v

division, the instrument manufacturing aqd repair divi¬
sion and the export sales division.
XXjX

Co.^ Mount Morris, III.

(letter of notification) 20,907 shares ($10 par)

common.

Inc., and Childs Jeffries

2,300,000

Kable Brothers

ferred.

HallidayStoresCorp., Hew

filed

repay

busi¬

seven

to Dec. 18.

// Managed Funds Inc., St. Louis, Mo.

four principal divisions designated as Shaw-Box Crane
&. Hoist division, the Consolidated Ashcroft Hancock

Nov. 6

of price.:!

common

Co., Preque Isle, Me.

determined

Offering, date indefinite..

are issued and
outstanding and are being
by members of the Pittsburgh banking family of
or trusts created
by members of the family. Reg¬

ness

par)

Offering—Price $10 per share.
! Proceeds—Selling / stockholders will receive : proceeds.

istration statement became effective Nov. 18
and orders
for stock may be solicited
subject to final determination

•

Underwriter—Otis & Co.

Mellon

($1

International Dress Co., Inc., New York

Corp., Pittsburgh, Pa.
Oct 31 filed399,860/ shares
{$25par)/capital f stocks
Underwriter—The First Boston Corp., New York,
^Pro¬
ceeds

25,000 shares

150,000

($10 par) capital stock.
through competitive
bidding.
Probable bidders include The First Boston
Corp.; Kidder, Peabody & Co., and Blyth & Co., Inc.
(jointly); Harriman Ripley & Co; Coffin & Burr and
Merrill Lynch, Pierce, Fenner & Beane. Proceeds—The
shares are being sold by Consolidated Electric and Gas
Co., parent of Maine Public Service, in compliance with
geographic integration provisions of the Public Utility
Holding Company Act.
;

company.

Aug. 28 filed 140,000 shares of

Gulf Oil

/sold

filed

Underwriters—.To

Nov.

their preemptive rights. Offering date indefinite.

(letter of notification)

•

June

Dec.

Co., Jacksonville, Fla.

270,000 shares of common stock (par $1),
Underwriters—Blair & Co. 'Offering—Stock is
being offered to present shareholders at
$3 per share.
Holders
iof
approximately 200,000 shares have agreed to waive

Corp., Tulsa, Okla.

Pietch, all officers of the

Income Shares

:j. common.
Price—$1.75 a share. Underwriter—Bonner &
tem¬ ;! Bonner, Inc., New York. Shares being offered on behalf
>
of Russell F. Hunt, Morris L. Bradford, and George R.

•

Prices, preferred $100 a share; comProceeds—To retire $6 cumulative

share.

preferred,

Co. and W. E.

(jointly). Proceeds—Net proceeds from the
preferred will be used to reimburse the com¬
pany's treasury for construction expenditures. Net proceeds from the sale of common will be
applied for re¬
demption of 5% cumulative convertible preferred stock
not converted into common
prior to the redemption
date. The balance will be added to treasury funds.
Company has asked the SEC to defer action on its fi¬
nancing program because of present market conditions.
sale

purchase warrants entitling
registered holders of shares
-of the
$4.25 preferred to purchase at any time 64,750
shares of common stock at
$16 a share at the ratio of 3%

and Morgan Stanley

will be used in operation of the

Maine Public Service
,

Hutton & Co.

stock

(jointly)

company.

Underwriters—By competitive bidding. Probable bidders include Blyth & Co., Inc. and Mellon Securities

July. 29 filed 18,500 shares at $4.25 cumulative
preferred
($100 par), with non-detachable common stock

Decatur, III.

June 17, filed 200,000 shares ($50 par) cumulative pre¬
ferred stock and 966,870 shares (no
par) common stock.

—

York

June 7 filed 250,000 shares of capital stock (par 40c).
Underwriters — Names to be supplied by amendment.
Offering—Stock will be offered publicly in the U. S. at
40c a share (Canadian money).
Proceeds—Proceeds,
estimated at $75,000,

Illinois Power Co.,

(letter of notification) 12,000 shares ($X par)
: Underwriters—Kalman & Co.,
Inc., St. Paul.
Price—$25 a share. Proceeds
For improvement and
modernization program. Offering
indefinitely postponed.
common.

2931

Mada Yellowknffe Gold Mines, Ltd., Toronto

(letter of notification) 1,000 shares (no par)
common.
Price—$100 & share.
No underwriting.
For
working capital, raw materials and equipment for manu¬
facturing plant. '

Sept; 3

(Grolier Society, Inc., New

»»

Home-O-NSze Co., Muscatine, Iowa

Nov.

Griggs, Cooper & Co., St. Paul, Minn.

•

;

THE COMMERCIAL. & FINANCIAL CHRONICLE

:-v»tU!'

shares' ($1

(letter of notification)

conditioning.

such, number of shares

Modglin Co., Inc., Los Angeles
Nov. 20

(letter of notification) 35,000 shares of ($1 par)

capital stock. Price—$4 a share. No underwriting. For
additional working capital and other corporate purposes.

(Continued

page

2932)

'■

' '] V.'

mmwpm

COMMERCIAL & TINANCIAL

THE

Thursday, December 5,

CHRONICLE
V

(Continued from page

Northern

2931)^^^^:^

'•

maximum" of 384,016. shares of common
stock. Underwriters by amendment as shares will be
offered under competitive bidding...Probable bidders in¬
clude Blyth & Co., Inc.; The .First Boston Corp.; Stone
& Webster Securities Corp., and Harriman Ripley &
Co., Inc. (jointly). Of the shares registered, 182,667 are
being sold by Midland Realization Co.; 54,426 by Mid¬
land Utilities Co., and 146,923 by Middle West Corp. \

Philadelphia

Monroe Sales Corp.,

(letter of notification) 250 shares -($100 par)
6% cumulative preferred and 100,000 shares (500 par)
common. -Price—$100 a preferred share and 50 cents a
common share.
No underwriting. To carry on business

Nov.

of the corporation as

factory representative and

.-'V;' ■ ' iS
?V
Moreno-Cripple Creek Corp., Denver '

•

dealer.

r«fI

Nov. 27 filed

gold,; silver, ,|ead and

Exploration and development of
other metal deposits.

ceeds

.stockholders. Offering

of common stock (no par).
Underwriters—To be determined by competitive bidding.
Probable bidders include Blyth & Co., Inc.; Kuhn, Loeb

June 6 filed 140,614 shares

fLw &
Ripley

Offering—Shares,

Co.; The First Boston Corp. y

common

Standard Ga3; & Electric Co. and con¬
stitute 56.39% of the company's outstanding common.
Sale Postponed—Standard Gas & Electric Co. asked for
bids for the purchase of the: stock on Sept., 4,i but the
owned

are

-'.J

postponed../

temporarily,

sale has been

'kc.A'-'iP-

(G. C.) Co., McKeesport, Pa.

Murphy

shares of common stock> (par $1)..
Underwriter—Smith, Barney, j& ,Co.
Price by amend¬
ment.
Proceeds—Redemption/of outstanding 4%% pre-

June )3 filed 250,000

ierred stock at $109 a
K:%

postponed.
'

share plus dividends. Indefinitely

*
^

'it

/' f

1* n

'»«'

Higginson Corp.,

Chicago. Price—By amend¬

ment. Proceeds—The stock

is issued and outstanding and

of the

selling

stockholders and the number of shares to be sold

by each

being

will

sold

shareholders.

by amendment.

supplied

Newburgh Steel Co.,

Aug.

Names

£■

Noel & Co. and associates.

preferred stock (par, $45) and 666for pre-:
shares
(par $5).
Price—$45 per share

share for common. Proceeds will be
in the manufacture and sale of cellulose products.''
per

\ '

Inc.,'Detroit

$75,000 to

{ reimburse treasury for sums spent in acquisition of the
electrical division plant of the company, $30,000 for con»

Instruction of space for executive offices in the economy
% baler plant, and the balance will be deposited with gen««
eral funds. Offering temporarily postponed.
.

Quebec Gold Rocks Exploration
Nov.

filed

100,000

Underwriter—Robert

Ltd.,

Montreal

(500 par) v; capital stock.
Soden, Montreal, director of

a share.
Proceeds-^-For
tion and development of mining property,
company.

Price—500

ex^lora-;
' ''
_

(D. M.) Co., Bridgeport, Conn. (12/15)' *
Nov. 27 (by amendment) filed 50,000 shares of common
stock (par 250) and stock purchase warrants.
UnderRead

York (12/17)

writers—Warren W. York & Co., Inc., Allentown, Pa.*
Price by amendment. Proceeds—Com¬
and Richard J. Buck & Co., New York. Price—$5.75 per
pany will receive proceeds from the sale of 5,000 shares
| unit of one common share and one warrant. Proceeds—
and five stockholders will receive proceeds from the y
s Net proceeds will be used to pay off a loan.
c
;? 1
sale of the remaining 35,000 shares. The company will
Realmont Red Lake Gold Mines, Ltd., Toronto*
apply its proceeds to general funds.
:

Inc., New York.

Canada

Brooklyn

sold by three stockholders. Underwriter
—The First Boston Corp., New York. Price—By amend¬
shares are being

ment.

of common stock ($1 par)*
Offering Price—$0.60 a share to public.
Company has
not entered into any underwriting contract.
ProceedsDevelopment of mining properties and exploration work;

Nov. 20 filed 800,000 shares

($5 par) common. The

140,900 shares

19 filed

Sept.

convertible
preferred (par $10), and 30,000 common shares ($1 par).
Underwriters-—Nariies by amendment. Offering--Shares

will be used to pay

filed 40,000 shares ($50 par) cumulative pre¬
ferred stock series A. Underwriter—A. G. Becker & Co.,

! Old Town Ribbon & Carbon Co. Inc.,

2 filed 30,000 shares of 6% cumulative

Price by amendment.. Pro-»

3% notes held by National Bank of Detroit,

Ohrbach's Inc., New.

<•

ceeds—Of the net proceeds, $250,000
"

Nov. 27

Sept. 27 filed an unspecified number ($2.50 par) com¬
mon shares. Underwriters—First Boston Corp., New York,
Lee

89 shares--$3 dividend

Ohio Associated Telephone Co., *
\ -V XV
Sept. 11 filed 35,000 shares (no par) y$2 cumulative pre¬
ferred.
Underwriters—Paine, Webber, Jackson & Curtis
and Stone & Webster Securities, New York... Offering—
Of the shares, registered; 21,000 are being sold by the
company and the remaining 14,000 are being sold : by ;
General Telephone Corp.
Price—By amendment. Of¬
fering " indefinitely postponed.
'

National Aluminate Corp., Chicago

and

July. 5 filed 75,000

;

.Precision Parts Co. of Ann Arbor, Mich.
shares 5% cumulative convertible
preferred stock ($10 par), Underwriter—Van Alstynea

;

-",vy; vi'./yy:y?y

York:

stock

iferred and $5
used

•

temporarily postponed.

(letter^ of notification)

Philadelphia^'

Inc., New

Molded Arts,

Plastic

-Au^: 27 filedj 60,()00 shares of preferred stock ($10 par)
and 75,000 shares of common (par 50c). : UnderwriteF—
Herrick,: Waddell & Co., Inc.
Offering—Company ia
offering the preferred Stock! to the public, while the
common is being sold by certain stockholders.
PricesPreferred, $10 a share; common, $4 a share. ProceedsProceeds from sale of preferred will be used to purchase
equipment, pay bank loans, and other corporate purposes.

stock of two affiliates, and bal¬

O-Cel-O,Inc., Buffalo, N. Y. '

•

Dec.

Bids Invited—Bids for the purchase of the
11:30 a.m., (EST) Dec. 10 at

company's office Sansom St.,

$197,000 for other corporate purposes. The" pro¬
frbm the mther 3,000 shares will go to selling

ance

bonds will be received up to

purchase 100% of the

States Power Co.

Mountain

$42,000,000.

June

with James T. Chile's,
Denver, who will act as their selling agent.
Price by
amendmentProceeds—Proceeds, estimated at $438,770,
will be used for current property payments, exploration
of mining properties and for working capital. Business-

1946i

■»,■*

which will require approximately

construction program

Nugent's National Stores, Inc., New York
%
21 filed 85,000 shares ($1 par) common stock.
Underwriters—Newburger & Hano, and Kobbe, Gearhart
& Co., Inc.
Price, $6.75 a share. Proceeds—Net pro¬
ceeds to the company from 62,000 shares, estimated at
$350,200, will be applied as follows: About $111,300 for
retirement of outstanding preferred stock; $41,649 to

paf)°comraon. Under¬

7,399,500 shares (10c

writer—Company is negotiating

' J' ,;•/

■

Halsey, Stuart & Co.; Morgan Stanley &
Co;"and "White,..Weld & Co;, Price by amendment; Pro¬
ceeds—Proceeds of about $60,000,000 before deducting
expenses will be used to pay off $18,000,000 of \xk%
promissory notes and to finance part of the company's

/: r1

!*r

"■)

Boston Corp.;

Public Service Co.

Indiana

Aug. 28 filed

•

-iv.

)■

Red Owl Stores, Inc., Minneapolis
15,000 shares ($100 par) cumulative con-*
July 22 filed
vertible preferred and 50,000 shares ($3 par) common;
warrants. Underwriter—Floyd D. Cerf Co., Inc., Chicago.
Underwriters—Piper, Jaffray & Hopwood and J. M. Dairi:
Offering—Price $4.75 a share.
Proceeds—Of, the total
& * Co., Minneapolis.
Price by amendment;... Proceeds—►
shares of preferred and 15,000 shares of common. Price
company is selling 37,500 shares and stockholders are
Company expects to use $800,000 of the proceeds for
—$10 a share1 for the preferred and $6 a share for the
selling 87,500 shares. The company will use its proceeds
reduction of its bank loans.
Of the remaining proceeds*
common.
1
for equipment and working capital,
,
it will use $500,000 for equipment of its general office
and warehouse being constructed at Hopkins, Minn.;
;
Pacific Power & Light Co., Portland, Ore.
New England Gas and Electric Association
$300,000 for equipment of warehouses at Green Bay* <
July 10 filed 100,000 shares ($100 par) preferred stock. "Wis., and Fargo, N. D., which it expects to construct ir*
July 11 filed $22,500,000 20-year collateral trust sinking
Underwriters—By amendment. Probable bidders include
fund Series A bonds, and a maximum of 1,568,980 com¬
the future:
Any balance will be used in its moderniza¬
Blyth & Co., Inc., White, Weld & Co. and Smith, Barney & y tion and the expansion program, •Business^Wholesalur
mon
shares ($5 par). - Underwriters—By amendment.
Co. (jointly); The First Boston Corp., W. C. Langley & Co.;
Bidders may include Halsey, Stuart & Co. Inc. (bonds
and retail sale of food products. /
»Jm.-',
Harriman Ripley & Co.
Offering—Company proposes to
only). Bear, Stearns & Co. (stock only), First Boston
Reliance Varnish Co., Louisville, Ky«
,
. :
I: '
issue the 100,000 shares of new preferred for the pur- :
Corp., White,,Weld&Co.-Kidder, Peabody & Co. (jointly).
Nov. 20 filed 60,000 shares of common stock ($2.50 par).
pose of refinancing at a lower dividend rate the 67,009
Offering—Bonds and common stock are being offered in
outstanding preferred shares of Pacific and the 47,808
Offering
connection with
a
Price—$10 a share.
Underwriter—Bankers
compromise recapitalization plan
approved by the SEC, on June 24, 1946, which among " preferred shares of Northern Electric Co., in connection
Ai^stedt Bros'
other things provides for the elimination of all out- ; with the proposed merger of Northwestern into Pacific. •' CrnttendQn& Co Chicago
Of'the total of 60,000 shares*
standing debentures and preferred and common stocks,
In connection with the merger, the outstanding preferred i,. h company is selling 40 000 and seven stockholders are
stocks of Pacific and Northwestern w.dl be exchanged
disposing 0f the remaining 20,000.
Proceeds—Company
and for the issuance of $22,500,000 of bonds and 2,300,000
share for share, with cash adjustments, for the new preusebHs proceeds> together with $500,000 bank loan,
of new common shares. Bids for, the purchase of the
ferred stock of Pacific, the surviving corporation. Offer*
to finance naint« anH varnish plant now under construe—
.
paints and vnrnish nlant
construc¬
bonds and the common stock which were to be received
tion.
lug price—To be supplied by amendment.
.by the company Aug. A13 were withdrawn Aug. 12.
sold by
Maurice
Cohen
and; Samuel
Friedman,
President
and Secretary-Treasurer, respectively, each selling 15,000
issued

are

and

outstanding

and

being

are

Cuba
125,000 shares ($1 par) common and 40,000

Orange-Crush de Cuba, S. A., Havana,

Nov. 29 filed

botrS^ouisvine^Tnd

alternate plan

filed Nov. 25 with the SEC provides
for the issue of 77,625 convertible preferred shares (par
$100) and 1,246,011 common shares (par $8). Under the
proposed plan consolidated funded debt would be prac¬
tically unchanged from that provided in original plan,
the Association to issue $22,425,000 coll. trust bonds.
These bonds and preferred stock may be sold, subject
to

tures

exchange offer,;to the holders of present deben¬
on

for

par

new common

with

rights to subscribe to 5 new jcommon shares at $9 per
share. The present plan does* not affect the status of
original plan, but determination as ta whiich will be used
will be left to the SEC and the court.
Hearings on the:

New

York

scheduled by the SEC for Dec. 19.

State

June 28, 1946
Underwriters

filed 227,500 shares ($1 par)
F. Eberstadt & Co., Inc.

Electric

Gas

Corp.,

Ithaca

(jointly); Fir^t Boston Corp. and Glore, Forgan &
(jointly), and .Halsey, Stuart & Co. Inc. (bonds only).
Proceed^—Estimated' proceeds of $28,000,000. together
& Co.
Co.

PA NJ Utilities
Co.. parent, will be used for redemption of $13,000,000
of 3H % bonds, due 1964, and 120,000 shares ($100 par)
5-10% cumulative serial preferred and to finance new
$6,000,000 contribution from NY

constructions.
Northern
<-r

?°

filed

:■

•;

••

Engraving & Mfg. Co., La Crosse, Wis.
70.000

($2

par)

common-

stock.

Underwriter—Cruttenden & Co.
Offering—All shares
are issued and outstanding and being sold for the account
of Present holders.

a share.
Proceeds—To
Indefinitely postponed.

Price—$16

selling stockholders.

Offering

225,000 shares are outstanding and are being sold
stockholders, and 2,500 shares are being sold by
Marlman to all salaried employees. Indefinitely

—

by 10
A. L.
post¬
'

poned.
Palmetto

Fibre Corp.,

.Washington, D. C.

time business.

August 16 filed 4,000,000 shares (100 par) preference
stock. Underwriting—Tellier & Co., New York. Price
50 cents a share. Proceeds—The company will use esti¬
•

Peninsular Oil

Corp., Ltd., Montreal,

Canada

Sept. 3 filed 600,000 shares of common (par $1), Under¬
writer—Sabiston Hughes, Ltd., Toronto, Canada. Price—
60 cents a share.
Proceeds—Net proceeds will be used to

purchase

drilling

machinery

and

other
V fr';

'.V

Pharis Tire & Rubber Co.,

Rowe

ers,

cumulative con¬
Underwriter—Van Alstyne, NOel &
York. Price—$20 a
share. Proceeds—For payment of loans and to replace
working capital expended in purchase of building from
RFC and to complete construction of a building.
>
w,
Sept. 27 filed 100,000 shares ($20 par)

i. date indefinite

St.

Regis Paper Co., New

Electric Co.

York (12/10)

Sept. 27 filed 150,000 shares ($100 par) first preferred.
Underwriter—To be supplied by amendment. Probable
underwriter,

(12/10) '
Nov. 4 filed $30,000,000 of first and refunding mortgage
bonds due 1981.
Underwriters — To be determined by
competitive bidding. Probable bidders include The First
(Pa.)

President, are offer¬
public through the underwriters;
Price, by amendment. Offering

who include Robert Z. Greene,

for their own

Co. and G. L; Ohrstrom & Co., New

Philadelphia

'.>'»» '

New Yorki

ing the shares to the
account.

Newark, O.

vertible preferred.

Corp.,

July 29 filed 100,000 shafes^'ommon stock. Underwriter®
—Hayden, Stone & Co. Offering—The selling stockhold¬

equipment.

7 J,\

York

originally filed July 31 covered 184,821
shares of $1 cumulative convertible preferred ($10 par)
and 277,231 shares (50c par) common stock, with Sterling,
Grace & Co. as underwriters.
Company has decided to
issue 454,465 shares of common stock only, which will be
offered for subscription to stockholders of record Sept*
5 to the extent of one share for each five held. Issue will
not be underwritten.
1 " >;/
Registration

of a new
of about
$951,928. It will set aside $150,000 for research and de¬
velopment purposes and the balance will be used as

factory near Punta

Republic Pictures Corp., New

of $1,473,000 for purchase
Gorda, Florida, at a cost

mated net proceeds

operating capital.

y-'yymnyy

$13,000,000 first mortgage bonds, due 1976,
and 150.000 shares of ($100 par) cumulative preferred.
Underwriters—To be determined by competitive bidding.
Probable bidders include Blyth & Co. and Smith, Barney

capital stock.

—

Oct 30 filed

with

Republic Aviation Corp., Farmingdale, N« Y^» ,
Oct. 9 filed 100,000 shares ($50 par) convertible pre¬
ferred stock.
Underwriters—Hayden, Stone & Co., and
Kidder, Peabody & Co.
Price—By amendment. Pro¬
ceeds—Proceeds, together with bank loans, will be used
to increase working capital.
Such funds are deemed!
necessary in view of the additional facilities that com¬
pany intends to acquire and its large backlog of peace¬

Inc., New York

basis. Present preferred would

receive for each share held 8 shares of

alternate plan are

Pal Blade Co.,

White,

Weld

& CO. Offering—Terms

:ol

offering and price by amendment. Proceeds—Net pro¬
ceeds will be used to redeem company's 5% cumulative

prior preferred stocks; an

unspecified amount will be

advanced to Taggart Corp., a

subsidiary, for redemption

(Volume 164

Number 4548

THE COMMERCIAL

FINANCIAL CHRONICLE
&
■

.S '

1 *

{

4 J,

> } *, *

i■-.-

of its

Tla.
;'

Scripto, Inc.* i Atlanta, Ga.

•! I, it,

Undemriters^Clement A* Evans .& Co.^InC.i At¬
per share; price of com¬
Proceeds—Company is selling
preferred to the underwriters at

share and stockholders are selling 244,000

the

underwriters,• at $5

share.

of common

and

one

Co., Inc.,
of race

■ -

advance

• -

The registration

Trenton, N. J.

Co., Inc., St, Louis, Mo.; and Rauscher, Pierce
Inc., Dallas, Tex. Price by amendment/< ~

Underwriter

;(

—Amos Treat & Co.

Proceeds—For payment of i notes,
jnortgages and for: general corporatepurposes., Offering

temporarily postponed.

Co.,

Tele-Tone Radio Corp., New York
Aug/ 1 filed 210,000 shares of common stock (par 50
Shatterproof Glass Corp., Detroit, Mich.
/))'*
cents).
Underwriters—Hirsch & Co, ; Offering—Com¬
Oct. 28 filed 280,000 shares ($1 par) common, tinder-'
pany is offering 75,000 of the shares registered.
Eleven
writing—None.1 To be/sold through brokers on over-'/
stockholders are selling 135,000 issued and
outstanding
the-counter market.., Offering—The shares are issued
/) shares, for their own account.
Offering—Price $6.75 a
and outstanding and are being sold by William B. Chase,
share.
Options—Selling stockholders are also selling to

President, and members of his family or trusts created
by Chase or his wife. Price—At market.

the underwriters at 7 cents
per option warrant options to
purchase 18,000 shares of the issued and
(outstanding
common owned
by them. They are also selling to Hall-

Industrial Foundation, Inc.

garten

Price—$50

share.No

underwriting.
For. •Constructing buildings to attract additional industries to X

Sherman.

•

common.

Proceeds—Net proceeds for the sale of com¬
pany's 75,000 shares will be used for
increasing working

) :f> < .?•.■!*.>£•;.$-■
^

)p( capital, with

Solar Manufacturing Corp.

a view to entering the
tion and Television fields at an

Alstyne, Noel & Co. Price by amendment.
^Proceeds—Net proceeds will be applied for the redemp¬
tion of outstanding series A convertible preferred stock
Which are not converted into common stock. Such, pro¬
will

used

for

additional

:Sept 3'filed 40,000 shares ($25 par) 5% cumulative con¬
vertible preferred. Underwriter—Ames, Emerich & Co.,
Inc., Chicago. Offering—To be offered to common stock¬
holders for subscription at $25 a share in the ratio of
one preferred share for each five shares of common held
unsubscribed shares will be sold to underwriters at same

dividends.

(O.)

Edison Co.;

Mit?

l \

_■

nwj .v
- •
• . .
Union Telephone Co., Blair, Neb.

Nov.

—

•!^ '

Underwriter—Wachob Bender Corp.
For retirement of outstanding 3% % bonds.
•

U. S. Gold Corp.,

Nov. 25

Proceeds—

V/'

■

Seattle, Wash.

(letter of notification) 300,000 shares of

common.

Underwriters—Elliott R. Henderson, A. A. Fagnant, and
B. E. Holland, all officers of the
company.
For mine

:.Miss.gfy^^
20

(letter of notification) 25,000 shares ($10 par)
Price—$10 a share. '; No underwriting.
To
purchase real estate for factory site, erection of factory
building and organization of business.
'V v.r,

exploration.

•common.

vertible
Oct.

Corp., New York

(leter of notification) 2.985 units of stock, each
consisting of one share of $6 cumulative (no par)
mon-voting, non-convertible, preferred stock and one
share of common stock (par 50c). Underwriter—Ayres
/Barley & Associates, Inc., (165 Broadway, Suite 1717)
New York. Price — $100 per unit. Proceeds—for working

>;•

preferred and 150,000 shares of common (par
to be offered for special purposes. Underwriters—
Names by amendment. Price $5 per share for preferred.
Proceeds—For working capital
ness.

-V".

Upper Michigan Power & Light Co.. Escanaba.
Mich.

July 18 (letter of notification) 5,500 shares of 4%% first
preferred stock series B ($50 par). Offering price, $50
a share.
Underwriter—First of Michigan Corp., Detroit.

Stix, Baer & Fuller Co., St. Louis

stock

and expansion of busi¬

capital, machinery, equipment, etc.

(par

lerred and common stockholders.

Price by amendment

froceeds—Net proceeds from the sale of the company's

added to Rebuilding construction and

improvement fund." Offering date indefinite.
•

•

''or- ■*

I Stone Container

Oct. 24 filed

•'

underwriting.

edness

the

Pay off indebt¬

clubhouse building and to equip same;

■r;

V/J

>/■

;

)• Wentink Industries,

•

f."'-it

Vandervort

(G. W.)

Inc., Grand Rapids/ Mich.

(letter of notification) 25,000 shares ($10 par)
preferred and 35,000 shares (no par)
common;
Prices—$10 a preferred share and $1 a com¬
mon
share, i No underwriting. ^ For purchase or con¬
struction of manufacturing
building, purchase of equip¬
ment, tools and machinery and for operation of business.
6%

cumulative

•

West Coast

Airllh^$V;liic.^Seattle^

Wash. (I

Sept/; 2 filed 245,000 shades ($1 par) common.: Under¬
writer
Auchincloss, Parker & Redpath, Washington,
D. C. Price—$7 a share. Proceeds—Will be used for
pay¬
ment of various expenses,
repayment of bank
purchase of equipment and for working capital.
•

Western Air Lines,

Nov.

filed

capital, (stock..

par)

Price by amend¬
of an unspecified

Proceeds-^-Offering consists

number

loans,

Inc., Beverly Hills, Calif.

1,200,000 shares (($1

Underwriter—Names by amendment.
ment

shares being Sold by the company; and
by
Coulter, President and Director. The amounts
being offered by each will be stated definitely by amend¬

William A.

ment

and

the

total

number

presently

stated

will be reduced if the offering consists of a smaller num¬
ber of shares.
Company will use its proceeds, together
with a $1,000,000 bank loan, toward payment of its prom¬
com¬

pany has obligations amounting to $1,667,000 which will
be paid following the sale of the stock.
It anticipates the

completion of its equipment and facilities program next
of about $8,600,000.

year with a required expenditure
/ Business—Air
transportation."
/

filed

500,000

'■>

•

Westinghouse Electric Corp.

Nov.

(12/12);....y

cumulative

preferred

stock, series B ($100 par).
Underwriter—Kuhn, Loeb
Co., New York, and associates.. Offering Price—^To be
filed by amendment/; Proceeds—The shares are being
sold in connection with company's projected $132,000,000
&

f/^)/-

4/ / White's Auto Stores, Inc. (1/15/47))''

Aug. 29 filed 75,000 shares $1 cumulative convertible
preferred stock ($20 par) and 50,000 shares common'
stock (par $1).
Underwriters—First Colony Corp. and
Childs, Jeffries & Thorndike, Inc.
Offering—Company
is offering 75,000 shares of preferred; the 50,000 share*
of common are outstanding and being sold by four in¬
dividuals for their own account.
Price by amendment
Proceeds—Proceeds from the sale of the preferred stock

funds for a wholly-owned sub¬
sidiary, retire loans from banks and from White's Em*
ployees Profit Sharing Trust, and for additional working
capital. Offering date indefinite.
<. <
; v*
f.
,

;•

;

•

." ;;

\i•;; .v.''/.;".^/, 2:.• /!xfir..1 ;V iJs,'

Co., Portsmouth, Ohio

•

-<%

•;V|•

Wisconsin Power & Light Co., Madison, Wis.

May 21 filed 550,000 shares ($10 par) common stock to
be
sold
at
competitive
bidding.
Underwriters—By
amendment.
Probable bidders include Merrill Lynch,
Pierce, Fenner & Beane; White, Weld & Co.; Glore,
Forgan & Co., arid Harriman Ripley & Co. (jointly);
The Wisconsin

Co., and Dillon, Read & Co.
Proceedsare .to be sold by Middle West Corp.,

Part of the shares

top holding company of the System, and part by pref¬
stockholders of North West Utilities

common

Nov. 13

of Wisconsin, who elect to sell such

which-will

distributed

dissolution of North West Utilities

Co., parent

shares of Wisconsin
to

them

upon

the

Co.

Nov. 26

(letter of notification) 12,000 shares ($25 par)
5% convertible cumulative preferred. Price—$25 a share.

Wyatt Fruit Stores, Dallas, Texas

underwriting., To retire 7% preferred and to equip
foundry.
v
//'• / :
Velvet Freeze,

Under¬

Chicago. Offering —Of

total, company is selling 200,000 shares and stock¬
remaining 100,000 shares. Price

holders are selling the

toy amendment. Proceeds—Of net proceeds, company will
use $1,225,000, plus a premium of $12,250, together with

syccrued interest, for payment of a bank loan, and $493,500, together with accrued interest, for discharge of its
10-year 6% debentures.
Any balance will be added to
working capital.

Club

2530

Nov.

12 filed 5,000

shares (par $100) preferred stock.

Underwriter—Rauscher, Pierce &

Corp., Chicago
& Weeks,

Men's

No.

•

erence

■

300,000(shares of ($1 par) common.

writer— Hornblower
the

Post

plant facilities. Offering date indefinite.

Offering—Eight

will offer 40,759 shares initially to its pre-

shares will be

Ex-Service

Church

Proceeds—For enlargements and improvements of
power

$5).

celling stockholders are disposing of 62,000 shares, and
the company

Y.)

;
U. S. Inc. •
* ..•;/ - -/.i-^,
Nov. 27 (letter of
notification) $50,000 of first mortgage
bonds. / Price, at par.
No

$1)

unit

Aug. 28 filed 102,759 shares common
Underwriter—Goldman, Sachs & Co.

(N.

Frank

will be used to provide

U. S. Television Manufacturing Corp., New York
Nov. 4 filed 300,000 shares (no par) 25c cumulative con¬

Pictures

the

unit.

Stanley (C. V.) Furniture Co., Inc., Magee,

Stereo

Wellsville

plant expansion, of which $49,000,000 had been expended
\IP tO Sept. 30. .(';( ( ••■;((/ (((;: •:

(letter of notification) $56,000 of closed first)
mortgage 20-year 3Y4%. bonds due 1966, at 103.75 per

Public offering price of unsubscribed
•shares by amendment. Proceeds—For expansion of plant
facilities and for additional working capital. Offering
postponed.

Nov.

$32,000,000 first mortgage bonds, due 1976,
and 160,000 shares of
($100 par) cumulative preferred.
Underwriters—To be determined by competitive
bidding.
Probable bidders include The First Boston
Corp.; Halsey,
Stuart & Co. Inc. (bonds
only); Blyth & Co., Inc.; and
Smith, Barney & Co. Price to be determined by competi¬
tive bidding. Proceeds—Net
proceeds together with $4,500,000 bank loan and if necessary, the $5,000,000 to be
contributed by its parent, Cities Service
Co., will.be used
to redeem outstanding debt and
preferred stock, involving a payment of $5 3,906,590,) exclusive of interest; !and

«A Soss Manufacturing Co., Detroit, Mich.

Price

•

Oct. 25 filed

manufacturing
facilities in the amount of $600,000; for additional inven¬
tory amounting to $400,000. and for additional working •'
•capital. Offering temporarily postponed.

rprice.

•

balance,, will ; be
•
)
••

issory notes, .aggregating $3,926,946. In addition the

Toledo

writers—Van

also

Frequency Modula- i
advantageous time. Of¬

fering date postponed..

June 14 filed 80,000 shares of $1.12% cumulative con¬
vertible preferred stock, series A (par $20).
Under-

ceeds

Co., for $1,500,) plus $360 as a contribution
toward the expenses of
issuance, options to purchase an
additional 18,000 shares of the issued and
outstanding

(letter of notification) 2,100 shares ($50 par)

•common.

and
accrued
dividends.
The
added to general corporate funds.

/Nov.

company

underwriters who are also the
selling
stockholders arerDempsey-Tegeler Co., St. Louis, Mo.;
JDittmar & Co., San Antonio, Tex.; Stifel, Nicolaus &

(Texas)

and by shareholders.
The
respective
will / be < supplied by> amendment ? Price by
amendment,
proceeds—Company will use abour $210,•
000 of, its net
proceeds to redeem 645 shares of its prior
preference stock'at $110 a share and accrued dividends*
and 1,386 shares of second
preference stock at $100 a

writing—The

Sherman

the

195,000 shares common stock (par $1).
Underwriter—C. K. Pistell & Co., Inc.; Offering—Com¬
pany is selling 45,000 shares, and eight selling stock¬

■/..

amounts

Xs X

holders are disposing of the remaining 150,000 shares.
Price—$10.50 a share., Proceeds—From ;45,000 shares/
Of the company at 50 cents a warrant.(;/' Company .will, «( sold by company/will be applied to working capital
initially. Offering date indefinite.
use its' proceeds for
•general corporate purposes. Offering
postponed indefinitely.
///
jy
fg.'
/
•
Taylor-Graves, Inc., Saybrook, Conn.
.>c
2■ j.;;?i■/ s/p.,v.r'??*.'+■!**■'' i
July 12 (letter of notification) 44,300 shares of ($5 par)
V ■/.':( 7-Up Texas
Corp., Houston, Texas (12/5-6) V-/; cumulative
convertible preferred stock and 44,300 shares
Oct, "28 filed 71,141 shares (45c par) Class A common
common stock (par
50c).* Offering—Price $6 a share for
.and 35,441 shares (45c par) Class B. common.
Under¬
preferred and 75 cents a share for common.

unspecified number of shares of com¬
mon stock
(par $1). Underwriting—Loewj <v to.; Mil¬
waukee., Offering—The shares are being sold both by

Aug. 28 filed

of .the' 2l44,po6 shares of common are
a period of four days following the
effective date of the registration for sale to employees,
officers and directors at $5 a share.
The company, also
As selling 200,000 stock;
purchase warrants to executives

Swern & Co.,

being reserved for

Webster Electric Co., Racine, Wis.

;

Sept. 3 filed

to
r

notification) $300,000 of first mortgage
Price—$1,000 a unit. No underwriter. To
off outstanding, notes $nd for expansion of service,

pay

Wilmington/Del/Proceeds—
track and

Wakefield Water Co., Narragansett, R. I.

2%% bonds.

share of preferred. Underwriter—

partnership for operation of track.v

stated that 24,000

Nov. 20 (letter of

(letter of notification)-120,000 shares (10c par)
60,000 share's ($4.80 par); 25 cent non-cUmulative preferred. Price—$5 a' Unit
consisting of 2 shares

For rehabilitation

lanta,' Price of preferred $10.75

*•//•'

John K. Walters &

mon, $5,625 per. share.
the 25,000 shares of
a

Nov., 25

7 filed 25,00Q shares ($10 par) 5% cumul. converti¬
ble preferred stock and 244,000 shares ($1 par) common

$10

common and

Aug,

stock.

Racing Association, Inc., Tampa,
■
V
/■/' -v/

2933

it"

'))
>
l.
r;
' ; >?,
$2.50 cumulative preferred; advances from .time to - ;
& Smith Publications, Inc
time to Alabama Pulp and
Paper Co., towards proposed
July 17 filed 197,500 shares of common stock... Under¬
acquisition .of certain paper mills, etc., from Timel ine;
writers—Glore, Forgan & Co.
Offering—The offering
and subsidiaries;-balance for expansion," etc/. Company "
represents a part of the holdings of the
present stock¬
also proposes to issue 50,000 additional'shares to
Time.; " holders.
Indefinitely postponed. *
:
'
", /'
Inc. and subsidiaries in connection with acquisition pi
paper-mills, etc.
' <'>
Sunshine Park
v
J

used in

Inc.

July 24 filed 150,000 shares of stock which
for the account of certain stockholders./

are

to be sold

super

share.

•

;

ceeds—For

yet.

Price—25 cents

share.

Philadelphia

(letter of notification) $100,000 5%

cumulative

preferred stock (par $100) with common stock as bonus.

Victory Gold Mines Ltd., Montreal, Canada
as

markets and to increase working capital.

Zatso Food Corp.,
Oct.

Nov. 13 filed 400,000 shares ($1 par) capital sto.ck.

derwriter—None

C6^JjProceeds—Will be
cafeterias, to remodel its

Underwriters—

Sherck, Richter & Co., and Straus & Blosser.; Price—
$7.50

part to equip three new

Un¬
Pro¬

developing mining property.
Business—
Acquiring and developing mining properties.
;

Price, $100 per unit. For purchase of raw materials and
for

general

conduct of business.

Underwriter—Ludolf

Schroeder, 1614 Cambridge St., Philadelphia.

THE COMMERCIAL &

2934-

Thursday, December 5, 1946

FINANCIAL CHRONICLE

*>)

(NOT YET IN

REGISTRATION)

ISSUE

INDICATES ADDITIONS SINCE PREVIOUS

•

(Only "prospectives" reported during the past week

are

,«iv>

£';:;

given herewith* Items previously noted are not repeated)

transmission line from Hough¬ \ to be dated Jail. 1,U947, and due $2,000,000 annually t
in Texas, to Michigan and Wisconsin. The V J an; IV1948-57. - Probable bidders include Halsey, Stuart
& Co.!vlhc.i and Salomon Bros. & Hutzler, and 'First '
cost of the project is estimated at $70,000,000.^,;Included

field,

ton

(12/10)

in the plan

trust
bids
are to be opened Dec. 10.. The certificates, to be dated
Jan. 1, 1947, will mature in equal annual instalments
of $300,000 each from Jan. 1, 1948, through Jan. 1, 1959.Probable bidders include Halsey, Stuart & Co. Inc.;
Salomon Bros. & Hutzler, and Mid-West banks.
$3,600,000 of equipment
certificates has been issued by the company.
The
An invitation for bids on

Boston

of financing, it is reported,- is the* issuance

$34,000,000 3y4% 20-year first mortgage bonds. Prob¬
able bidders, when securities are to be offered, include,•

Mid-Continent Gas Transmission Co.

•

Michigan-Wisconsin Pipe Line Co.
Commission approved by a
3-to-2 vote the application of the company for permis-

recently

company,

before

FPC

for

organized,

authority

has

build

836-mile

pipeline from Houghton fields, in Texas, to St. Paul,
Minn., via Kansas City. Otis & Co, Inc., Cleveland, has .
agreed to underwrite the project, which it is stated,!'
will cost in neighborhood of $73,000,000.
*
' •
;

United States Government,,

Montreal

•

•
4

(City of)

;

reported City is exploring the advisability of:
early sale in this country of new. dssue of bonds to
retire in part its outstanding higher cost debt.
Probable

bidders if bonds
man

sold in United States include Harri- £

are

New York Central RR.

•

:|v

CHICAGO

BUFFALO

CLEVELAND

Co.; Halsey, Stuart & Co.Inc.
•

(12/11)

was

appear,

garding

£ to conserve

/'viz:

Dec.

;on

the

■

of (the

taxation, Mr. Spinney said,

vidual living standards

High Taxes/

Penalize Incentive

NOTICE

the

tasks"

General

Mortgage 4^4% Gold Bonds, S
Series E, due July 1, 1977

to be called

duction
level of

and

"immediate

confronting

to put a

Great Northern Railway Company

urgent

Canadians

sound foundation of pro¬
under

the

present

Canada

gave

the

meet eco¬

one

such belief; "the

that purchas¬
rather than production
is the main-spring of employment
income and material well-being."
still prevalent idea

ing

power

Of social security measures Mr.

Spinney said he believed that a
certain amount of^-social security
planning had a place in the Can¬
adian economy but that if it is
to supplant the personal integrity
that

in £ hand

£ hand

goes

with

rounding out one's welfare in pro¬
viding for the future, "then I
believe that
come

soft"

will tend to be¬

that both incentive

enterprise and capacity for ef¬
are undermined. "It is good,"
he said, "to stand on one's own
feet — good for the individual
to

fort

for the national fibre."
general manager's re¬

and good
In his

port, Mr. Gardner told of deposits
at a new year-end high of $1,736,000,000, an increase of $123,000,000 over the4 previous year.
He; expressed

growth
thrift

and

thq view ,that this
tribute

was

common

and

sense

strong

to
of

added
000

Bank

of the City

publish appropriate notices calling for

irrevocably-

increased

money

merchants, builders, farmers and
primary producers."
'
,;

■

.';;v

Holders of said Series E Bonds may
bonds

the

obtain prepayment of said
of principal

redemption price thereof, viz., 105%

amount

together' with accrued interest to July 1, 1947, by sur¬
rendering such bonds with all unmatured appurtenant coupons
to The First National Bank of the City of New York, at its office,
No. 2 Wall Street, New York 15, New York, on or prior to the
close of business December 27, 1946. Payment as aforesaid in
respect of bonds so surrendered will
after the surrender of such bonds.

be made within five days
•

Financial writer whose work has been
from coast to coast.
enced

servicing

syndicated

Effective speaker—experi¬

Customers,

Salesmen

Traders—Listed and Unlisted Securities.

$10,000.

Box

J 119,

By F. J. GAVIN, President
St.

"'£

• *

The Franklin D. Roosevelt Me¬

morial Foundation Inc.,
on

announced

Sept. 15 that its new President

would be Henry Morgenthau Jr.,
former Secretary

of the Treasury,

according to advices to the New
"Times."
Mr. £ Morgenthau
was elected to succeed George E.'

York

Allen, who had resigned to take
up his new appointment as a Di«J
of

rector

Reconstruction

the

Fi¬

nance

Corporation The announce¬

ment

added

that

Mr.

had

Allen

been named head of the new ad¬

visory committee, and that Frank i
C.

Walker,

General,

Postmaster

former

was

elected Chairman of

the newly formed Finance
The

place

Hopkins

the

Com-,
late

the

Founda¬

tion's board of directors is. to be/
filled

by David K. Niles,

one

the late President's executive'as¬
sistants.

\ f \

;

■

•

—

Trader

and

Salary

Commercial

York 8.

years

TRADER
f -Bonds and/or Unlisted1;
.V ;
Securities.
f
„

Experienced
controls

who also
commission

trader
some

desires new connec¬
tion with member firm in trad¬
business,

ing dept. Can handle all orders,
work with salesmen and orig¬

inate

situations.

Box

123,

Commercial & Financial Chron¬

icle, 25 Park Place, New York
<

experience execut¬
ing listed and over-the-counter orderswould prefer small trading inventoryknowledge of all securities.
Box D125
Commercial
&
Financial .Chronicle,
25
Park Place, New York 8, N. Y.
«

Financial Chronicle, 25 Park Place, New

■

Roosevelt Foundation

S|||p|pl|;/£ ANALYST if

required

GREAT NORTHERN RAILWAY COMPANY

Paul, Minnesota
November 7, 1946

■-

Appointments to

SITUATIONS WANTED

SECURITY

105% of principal amount plus accrued interest to

and, diversified increase,
in£ advances
to
manufacturers,

Harry

Transition from wartime to peace-

general

our

supply."

EXECUTIVE

redemption on July 1, 1947

the entire issue of the above mentioned Series E Bonds then out¬

standing at
said date.

with $202,000,000 at

1945.- This represents

31,

Order Clerk

of New York to

and

loans

at $277,000,-

in Canada

compare

Oct.

mittee.

bulwark

"current

that

discounts

Veteran—many

First National

whep conditions f■
%

the

against the inflationary potential

SITUATION WANTED

jor redemption July 1,1947

Great Northern Railway Company has heretofore

corporation

the

place

„

•

high people

purchasing power. He ex¬

pressed guarded confidence in

ability

NOTICE OF PREPAYMENT

directed The

author¬

■

REDEMPTION

but added that'he noted a number

Finds

;

future, lime production .w$s 'reflected in4
the higher level of commercial
Mr.;-; Gardner said, £ and
popular beliefs about such con¬ loan?,
coiiditionS

nomic

129th annual meeting of the bank.
Such

had to be
reduced. "As such, wartime taxa¬
Office of Defense of Transporta-^
tion was
an
important weapon
4.
Effective at 12:01
a.m.
on
tion, ordered a general freight and
in the fight against
inflation."
express embargo, effective
12:01 Dec. 4, the Association of Amer¬ "But" he
added, "have we not
;
a.m., Friday, Dec. 6.
This does ican Railroads "froze" all soft
already more than a little evi¬
■l not affect Essential commodities coal awaiting shipment to Europe dence that
high taxation in peace¬
in order to make 1,100,000 tons
and supplies.
time
is likely
to have an En¬
available for home consumption,
2. The Post Office Department,
tirely opposite effect? To the ex¬
and made all export shipments,
also effective tomorrow morning
tent that it penalizes incentives
except bulk grain, livestock and and leads to additional
at the same time,
limited the
wage de¬
shipments for the armed services, mands to maintain take-home
weight of parcel post packages to
pay,
subject to shipment under special onerous taxation becomes a
five pounds and the size to
18
po¬
permit.
~
inches in length and 60 inches
tent inflationary
and disruptive
force." in
:
length and- girth combined.
As the same meeting the bank's
£ A complete ban on international
General Manager, B. C. Gardner,
parcel post was also ordered.
reviewed the progress of the bank
3. The Office of Defense Trans¬
during the year and revealed that
portation increased the recently
demand for banking services had
The concept of high taxation as
imposed 25% reduction in rail¬
reached unprecedented levels. De¬
road passenger service performed
an
anti-inflationary measure in posit accounts increased by 100,by coal-burning locomotives to
peacetime may be far from valid, Q00 during the year to reach
50% effective at 11:59 p.m., Sun¬
W.
Spinney,
G.M.G., 1,500,000 or 40% more than in
day, Dec. 8.
Service has been cut George
1939.
President of the Bank of Mont25% at 11:59 p.m., Nov. 24.
Mr. Spinney warned that one
.

4...,

held guilty of contempt of

Viify ';£" V;:£
The Interstate Commerce Commission, at the request of the
"

appropriate.,

Mine Workers of was
accepted during the war as ditions which (now were "an ab¬
court for disre¬ an essential contribution to vic¬ solute hindrance
to
a
clear¬
order designed to avert the soft coal strike, four steps
tory, and in the knowledge that, sighted appreciation of the funda¬
the nation's dwindling coal stocks were taken on Dec. 3, because of war demands,, indi¬ mentals of progress and welfare."

Shortly after John L. Lewis and the United

declared

advisable

deemed

position/ to obtain additional funds

purchase of $20,000,000 equipment trust certificates,.

real,

were

ized-capital stock from 1,000,000 shares to 3,000,000 ,
shares.
Company announced that although no plan for >
the sale. of additional shares had been formulated,„ it:

will receive bids until Dec.;II (noon) at i
Treasurer's office, 466 Lexington Avenue, New York,:

Freight and Express Embargo Ordered

America. (AFL)

Transcontinental & Western Air, Inc-

for

General

Probable bidders include Morgah Stanley.

Dec. 23 stockholders will vote on increasing the

Company

ST. LOUIS

PITTSBURGH

PHILADELPHIA

States Trust Co.,

C,; McHugh, Treasurer, c/o United

Ripley & Co. Inc., and Dominion Securities Corp.

£'' NEW YORK
BOSTON

Pittsburg, Bessemer & Lake Erie RR.i (12/17) £

New York. V
•

(jointly); The First Boston Corp.; Smith, Barney & Co.; I
Glore, Forgan & Co.; Halsey, Stuart & Co. Inc.; Blyth
& Co.;' Inc., and Shields & Co. (jointly).

Blair 6- Co,

Company will receive bids until noon (EST) Dec. 17 for
the purchase of $12,000,000 series A first mortgage bonds
due 1966, the interest rate to-be fixed by competitive >
bidding in same multiple of Va of 1% and a bid price of
not less than 98 and interest.': Bids will be received by r

Dec. 2

State, Municipal and

(12/17K

Commission

preparing to enter competition, are: Glore, Forgan & Co., £
and Lazard Freres & Co., Inc. (jointly); Shields & Co., *
and Alex. Brown & Sons (jointly); Drexel & Co.; B. J. >
Van Ingen & Co., and Blyth & Co., Inc. (jointly).;V.

application

pending

-ity

J-

(noon) has been set for the sale of $46,000,000
refunding bonds. Investment banking groups reported'

XyyiMM

Co., and Halsey, Stuart & Co.. Inc.

Dec.

•

!■

•.

Pennsylvania Turnpike

Dillon, Read & Co.; Glore, Forgan & Co.; White Weld

Nov. 30 The Federal Power

Corporate Securities

Corp.;

Nov.

INC.

•

sion to build a natural gas

(Continued from page 2933)
Gulf, Mobile & Ohio RR.

i*,-V

8, N. Y.

."„

'" •-"'.

•?"•'.,••

.•

;l'''-.v}-vV

,"''.•• *?> V<"'

■

,:',V -J'*

<:'■

•

■'*"

•'

--v .'

-...»*

»•

k-.

.ir^v/^VV

164

■"-■

.-.

•'

>■*

•

•.

;T'.»

■; i

'■ /

■

.ij v

i'.'imV't

i J,1/,iV/

i-J •

Volume

v,;l

-s

.■

■',v-.'' '.i*i ••••'.■!4-■-*•.' ?'•;''*.'"J
>iiiw

Number 4548

ii'i'f.

•

;

THE COMMERCIAL & FINANCIAL CHRONICLE
-.

->i\

•'**<!

' i,

-t

•

-i

•

h|4I

•

financing should reach market

DIVIDEND NOTICES

Friday of next week in: the form
of the

$50,000,000 of $100 par pre¬
ferred stock
recently placed in
registration..,
,:y,....
.

2222

orter

The

plated the issuance of

conditions
and

because

similar

revised

substituted

its

ume

issues and

new

busy, pe¬

":i 'v■ J'-'

^2/ '••••

bit less fearful of the in-

,,jr.;

Sizable Spreads

fluence of the mine strike at the
ers, on ideas of price, though the
; ? moment, though they are not
was
not too pronounced
i inclined2&q2, discountiM»ssibl£;:~ spread
giving consideration to conditions
;
consequences of the conviction

of the moment.

of John L. Lewis and the United

Mine/Workers for contempt. ;

|But at the" moment plans -

are

equipment

trust

icates.
( >

Quality is, of

the best names in

their

and

SANTA

,;.Ne\v

($2.50)

share,

per

for

the

holders of
tered
close

being

Revised

the

and

able

and

March

1947

Stock

Cents

No.

new

$30,000,000 issue
first mortgage bonds.

«.

96,

June

30,

1946,

Stock

27,

which

attended the sale : of its tures'—is ^ larger and. far moye
preferred oil Tuesday, should eombfehehsfVe t; in/; its;; coverage
bring out stiff banker competi¬ than the Exchange's' previous
tion.
booklets.
The subject matter is
<„:,
;
St. Regis. Paper Co.
pres0nted|ih/three sections^: Thh
i
:
On' Tuesday the same day >et first is devoted, to a short history

HOWARD

NICHOLAS,

this

divi¬

Cents * ($1.50)

Fifty
No.

this

day
136,

the

Company,

27,

J, I. Case

':
'

pay¬

the'

books

business

Company

;

(Incorporated)

holders
of
record
December 12, 1946.

the

200

The

December, 1946

1 24 Federal

EATON &

payable

De¬

Street, Boston

HOWARD
FUND/

BALANCED

business

PETERS, Secretary,

Avenue,

Directors

gineering

New

York

■...-

Combustion

dividend of twenty-four cents
($.24) a share, payable De¬
cember
24,
1946. to share¬
holders of record at the close
of business December 6, 1946,
The dividend previously de¬
clared from capital gains i®

Engineering Co., Inc.

Madison

Board

share,

The Trustees have declared

WM.

Combustion

Racine, Wis.; November'27. 1946.
A dividend of $1.75 per share upon the out¬
standing Preferred Stock of this Company has
been declared payable January
1, 1947, and a
dividend of 40c per share upon the outstanding
$25 par value Common Stock of this Company
has been declared payable January
1, 1947, to

En¬

Company, Inc. has declared a divi¬
dend
of
$2.25 per -share on the outstanding
capital stock pf
the
Company, payable on
January 9, 1947, to stockholders of record at
the close of business December 27, 1946.
H. H, BERRY,
7
-f'
Vice-President and Treasurer.
,.

,...;

also

..v,

payable

" 1946.

V*"-

Dehember, 1946

Dividend

checks

December ,24.

■

24 Federal

Street, Boston

November 27,1946

to holders
this

office.

Broadway,

New

York

YORK

New York, December 4, 1946.
of

Directors

has

declared

•

CITY

POWER

First Preferred,

Series B

Kansas

Dividend

S.60% Series B

Number 4

10(16

f record at the close of business Jan¬

uary

Dividend No.
November 18,

'<'1

December 2,1946 2

Secretary

7 * -'

'*■'

■'

*", ■ .*

Dividend No. 2

The Board of Directors today declared a divi¬
dend pf one shilling per share on the
Ordinary
shares of the Company.
The dividend is payable December 27, 1946 to '
thej record holders as at the close of business

December

13,

of { "American

1946,

Shares",

issued under the terms of the Deposit Agree¬
ment dated

June 24, 1946. After deduction of

the South African non-resident shareholders tax
the net distribution will be approximately 18

H. E. DODGE, Treasurer,
New A'ork, N. Y., December 2, 1946.

& Company

;

Wilmington, Delaware : November. 18,1946
■The Board of Directors has declared this day a
dividend of $1.12
a share on the outstanding

Stock, payable January 25, 1947, to
record

the

business
;

Janudry; J0>'.1947;. also $2.25

a share, as the
year-eiid dividend for 1946, on the outstanding
Common Stock, payable December 14, 1946, to
stockholders of record at
on November 25,
1946.

THE ATLANTIC REFINING CO.

;

v,./y;;

' ;•
;
/.
By order of the Board of Directors

stockholders of

RICHARD ROLLINS

Limited

1946

E. I. du Pont de Nemours

Preferred

6,1947. Checks will be mailed,

new

HAMILTON, Secretary.

,y>

cents.a share.

held December 2,1946, a dividend of

inety cents (90c) per share was declared
n
the Cumulative Preferred Stock
?
60% Series B of the
Company, pay¬
able February 1,1947, to stockholders

1946

O'okiep Copper Gompauf^

meetinq of the Board of Directors

JOHN

19,

COMPANY

persons
holding stock of the Company
requested to transfer on or before Decem¬
4, 1946, such stock to the persons who
entitled to receive the dividends.
i.
r:';'H. B. MUNSELL, Secretary. ■

ber

November

All

are

20,'

;

regular

1946 to stockholders of
record
?:00
M., December 10, 1946.
will
be
mailed
by
Irving
Trust
Company, Dividend Disbursing Agent.

quarterly dividend of $1.50 per
share
on
the
First
Preferred,
Series
"B",
Stock of Kansas City Power & Light Company
has been declared payable January 1, 1947, to
stockholders of record at the close of business

are

LIGHT

City, Missouri

Dccc mber

Preferred Stock

Checks

Secretary
KANSAS

STEPHEN G. KENT

ber

o'clock

par $10,, payable January 2, 1947, to stock¬
holders of record at the close of business
December 9, 1946.
/

quar¬

terly dividend of Three Dollars ($3.) per share
the Capital Stock of this Company for the
quarter ending December 31, 1946, payable on
January 2,
1947 to stockholders of record at
the
close of
business
December
11,
1946.
MATTHEW T. MURRAY, Secretary,

COMPANY

The Board of Directors has declared dividend
No.
862
of
forty cents
($.40)
per
share of
$12.50 par value Capital Stock, payable Decem¬

The Board of Directors has this day de¬
clared (a. quarterly dividend of 15 cents and
an extra dividend
of 20 cents (total 35 cents)
per share on the capital stock of this Company,

mailed

MINING

DIVIDEND. NO. 862

? ?

therefor

GUARANTY TRUST COMPANY OF NEW
The Board

HOMESTAKE

| IRVING TRUST COMPANY

Capital Stock who have

will

orders

the

January

V22 2: D- O. WILSON, Assistant Treasurer,

($.15)

cember
24,
1946, to share¬
holders of record at the close
of business December 6, 1946.
The dividend previously de¬
clared from capital gains is
also payable on December 24,
1946.
'
•
■
'

Mass.
Secretary: ■

1946

FUND

The Trustees have declared a
dividend
of
fifteen
cents

Boston,

Boston,, .November

the

1946.

1947.

filed -Suitable

STOCK

Capital Stock of
Consolidated Copper

Hecia

regis¬

Company

THE ATLANTIC REFINING CO.

EATON

net

COMPANY

Company of record at the close of business
December 7. 1946.
Checks will be mailed from
the Old Colony Trust Company,

preferred stock, heading

j£he list with

and

Company,

to holders of said Common

registered

the

Preferred and Common

enlarged edition
York / Cotton - Ex¬

New

Calumet

The

Exchange

NOTICES

been

...

Fifty

this

Capital
the

Dividend

Capital Stock

"120

Of Cotton

Dollar

One

Common

]h^d

bidders

other

ended

Preferred

business December

share,

per

and

1946.

out of undivided

1947,

books

2<3,

day declared

Dividend

The, Board also declared
dend

this

Stock

year

said

the

COMPANY

has

being

AND

November

Dollars

Capital

payable February
profits

Y.,

Two

Preferred

of 3.65

Evidently

of Directors

dividend

the

RAILWAY

Yqrk,

The Boiard

TOPEKA

pleting the sale of 300,000 shares

ATCHISON,

with reoffering
at 104.11 for an indicated yield
proceeded

change's : descriptive booklet is
being prepared for early distribu¬
tion to visitors and correspondents
of new
requesting information concern¬
The impending bond issue will ing the Exchange and the opera¬
•
round out the Philadelphia utility tion of its cotton futures market.
r
company's refinancing program at :^An;vannouncement by the Ex¬
least for some time ahead, and change on Sept. 14 stated that the
1;?■ judging
by, the brisk
bidding new
publication—"Cotton
Fu¬

31,

New Description Booklet

rank

respective industries, with Phil- :
adelphia Electric Co., just com-

THE

pros-

paid the company I a price of
102.289 for a 3.8% dividend rate

cer-

tainly the issuers with
/■* pective business in sight

the low tender 100.9799.

the key

course,

:;S.\ influence at this time and
among

declared on

JR. A. BURGER, Secretary.

Company

hopeful
of
affording ,a
certif¬ slightly better yield, since, the
second highest bid was 101.35 and

f ing! bonds, preferred stocks and
K railway

Capital

The successful banking group

financing which is in sight for the
ensuing. week with indications
pointing
to
an
aggregate
approaching. $175,000,000, compris-

J' going along for handling the new

quarterly dividend of

per cent was

Books will remain open. Checks will be mailed.,

registration,

Tuesday of Philadelphia
Electric
Co.'s 300,000shares pf
new preferred stock revealed sub¬
stantial differences among bank¬

-Investment bankers are feelr

ing

Sale

R-irV*
»

three-quarters

payable
January 2, 1947j'to Stockholders of record at the
close of business December 18, 1946. Transfer

preferred

•

:;'V

and

the

stock

riod for the underwriting f rater-

COPPER

DIVIDEND

CONSOLIDATED

develop further im- due before offering, will fix the
\ provement
it
now • looks:i as dividend rate on the issue which,
though next week will be produc¬ will provide funds for the repay¬
tive of exceptionally heavy vol¬ ment of outstanding bank loans.
keel

even

HECLA

DIVIDEND
No,
57
dividend of twenty-fiye cents ($0.?5) per
share will be paid on December
21, 1946, to
holders of
the outstanding

the Preferred Stock of this Company,

program

the

/ Amendment of the

company

v;".-,-PREFERRED

On November 26, 1946,

orig-

shares.
Provided the markets hold to

of: markef

AND

one

y inally, * hut
>

of common stock

amount

AMERICAN
can

contem¬

had

company

CALUMET

V',2 222'2'i:'2

the
-

v-IA i

JB,

close of business

2'2'^ '2:':2'

V':;

RADIO-KEITH-ORPHEUM

W. F. RASKOB, Secretary

for the sale of

of the

tricy

tion

Philadelphia ElecCbt's- bonds, the St. Regis

cotton plant—its introduc¬

United

the

to,

States

and

.Paper-Co.r through its bankers is spread of cultivation in the Cot¬
slated.' to isell publicly 150,000 ton Belt. The second section con¬
| shares of new $100 par cumulative tains a history of the New York

Preferred Stock

preferred stock.
2^2 Of the total

■q

the

preferred,

new

The

^•offered initially in exchange for

138,814

$50

prior

par.

the

basis

outstanding

preferred

one

which

22 tor each two shares of the out- ,
J Standing stock held.
22222
Proceeds

the

from

balance

floor,
the
manner,
in
trading is conducted, and

one

for construction

subsidiary

purposes.

tained from

the

Office of Public

the

New

York

Cot¬

ton Exchange,
Two Issues Wednesday

"On Wednesday bankers will be

afforded

the

for

peting

first

mortgage; bonds

new
cumulative
shares. of Kansas City

nnd

;

Pershing, 86, Visited
By President Truman

opportunity of com¬

preferred

Light Co., and for $20,000,000 of tionary Force during World War I,
new'^quipment trust certificates Celebrated his 86th birthday anni¬
of tire New York Central Railroad versary on Sept. 13, and received
System.
>
■
C 2 4
2 a call on the occasion from Presi¬

mortgage

bonds,

due

1976

where

and

100,000 shares of new $100 cu¬

Present

.1066,

stock

and

for

$.80

York

cember 23,
at

2' The Board of Directors has de-

the

| will be mailed.

•

November 26,1946

months, will as indicated provide
partially financing pur¬
chases of new rolling stock.

cians

and

expressed

country's
;

things being equal the re¬
vised Westinghouse Electric Corp..

nurses.

the

hope

production

be used "to create

will

make

The President

work

that
line

this

would

situation that
as

hard

peace as we did to win the

for

war,"

'■>)
GREGG,

Pres. end Treas..

CELANESE
CORPORATION OF AMERICA

General Offices

Secretary

20 North Wacker Drive, Chicago

:'K\ 2:22"

Dividends

American

were

/declared

Board of Directors
>

21, 1946,

Bank Note

Company !

follows:

Cumulative

180 Madison

THE Boardthe Directors has this day
declared of following dividends:

the

first preferred stock

4;:,.-«4.75 series

Preferred Stock

The

2.;'22:2i 19th Consecutive
^
Regular Quarterly Dividend
of One Dollar ($1,00) per share.

Preferred Dividend No, 163

Common Dividend No. 149

''7Common Dividend

No. 150

•

./ 7.7 :

75^ per share.
the Preferred Stock for the

ending December 31, 1946 pay¬
able January 2, 1947, a year end dividend of 700 per share on the Common
Stock payable December 27, 1946 and

dividend of 400 per share
mon

Stock payable

December 17, 1946.

dividends

are

payable

The

regbfar quarterly dividend for
the current quarter of $1.75 per share,
payable January 1, 1947 to holders of

De¬

30, 1946 to stockholders
of record at the close of business
December

13, 1946.

record at the close of business Decern*
ber 17, 1946.

Checks will be mailed.

;

V".

Robert P. Resch

declared, to respective holders of
record December 9,
1946. The stock

■2'".

cents

common stock

per

'
•

R.O.GILBERT,

November 27,

1946

•.

Secretary

Mining and Manufacturing
Phosphate

Potash

Fertilizer

•

share, payable December

31, 1946 to holders of record at the
close of business December 17, 1946,

Vice President and Treasurer

W. F. Cox.clough, Jr.

7'% second preferred stock

Fifty Cents (50$) per share.
Both

been

quarter

Adders of record at the close of busi¬
ness

January 2, 1947 have

transfer books will remain open,

current

$5.00 Par Value Common Stock

the Com¬

regular quarterly dividend fojr

of $1.18^4 per
share, payable January 1, 1947 to
the

cember
;

Avenue, New York 16, N. Y.

November

con¬

J. MILLER WALKER

November 29, 1946

business

;

quarter

briefly

'•

'v:^• Secretary

De¬

CORPORATION

hundred

MINERALS & CHEMICAL

(1/4%)

addressed

business

;y <

A quarterly dividend of

several

16, 1946.

1946. Checks will be

2':^^J-22-22:h'Vice

dared a year-end dividend of Fifty
7
Cents (50c) per share on Common / ■
7:'K; Stock, payable December 28, 1946
to holders of record at the close of 7 '
7 vs. business December 6,1946. Checks

suf¬

valescing veterans, Army physi¬

funds for

Hospital
since

1946 to stockholders of
10,

January 2,

«IA**

crowd

issue, one of the largest in recent

Westinghouse Electric

resided

has

the Common Stock

CLIFTON W.

vices,

Central's equipment

All

has

BUTLER BROTHERS

according to Associated Press ad¬

preferred
1

Reed

the

stockholders of record

per

of this corporation, payable

record

utes in the central plaza, where,

additional work-

capital.

New

Walter

fering a severe illness in 1938. On
his /way into the hospital
the
President paused for a fe\y min¬

will provide funds for redemp¬
tion of outstanding 3%% bonds,

V due

at#;

eral

mulative preferred stock which

■!

been declared

mailed.

dent Truman who visited the Gen¬

:-f The Kansas City utility is
.'offering for bids $36,000,000 first

lug

dividend

December

EDWIN 0, WA<5K i '■

General John J, Pershing, com¬
mander of the American Expedi¬

Power

1947

December
A

Secretary

Relations of

poration payable

December 4, 1946

Common Stock

record at the close of

/This sec*

for advances to another

•

' V:

February 1, 1947, to

December 2,1946

payable

stockholders of

tract and its

by all segments

New York 20, N. Y.
■

Convertible 4% Series A of the Com¬
pany,

quarterly divi-;:
per share on

cents

the Common Stock of the Cor¬

30 Rockefeller Plaza

dollar ($1) per share was declared
the Cumulative Preferred Stock

company

COMPANY

business January 6, 1947. Checks will
be mailed.
RICHARD ROLLINS

of the cotton/industry.
tion is presented in a

declared
dend of 30

meetinq of the Board cf Director
held December 2,1946, a dividend of
a

outlines some of the technical fea¬
tures of the cotton, futures con¬
use

npHE Board of Directors has

niHTKon

style de¬
issue, would be used by the
to
retire any
unex¬ signed for easy interpretation by
the layman. The booklet is fully
changed 5% preferred to finance
by
half-tone
cuts.
retirement of preferred shares of illustrated
a subsidiary, Taggart
Corp.,-and Copies of the booklet may be ob¬
the

Number 43

Series A

final section describes the

trading

new

Exchange, • and describes
which led to its

conditions

founding in 1870.

however, 69,400 shares would be

•

Dividend

Convertible 4%

;

Cotton

CORPORATION

•

Chemicals

December 3, 1946.

Secretary
'1

THE

2936

this way laborers obtain part
the increased output in their

rarely represent increased effort
■—
^
x
or improved skill on the part of
s~

Y^^^'^Y/YYiY

scientific disj-i~
for the
benefit of the consumers:,' The
profit %notive has been the device

management,

duced

making

supplied by inves

of capital

use

•

and methods

tors, and of materials

devised by scientists, and adapting
the
product to the needs and
means
of consumers. If any la-

■,

borers are responsible for the in¬
creased output of any plant or in¬

dustry, they are more likely to
employed in that

equipment.

exaggeration

would scarcely be an

11...

by ^ich philosophical and
demic): speculations
have

aca¬
been
compelled to serve the wants of
the common man. If we wish pro¬
ductivity to continue increasing
we
must carefully avoid taking
steps
that will discourage
the
profit motive.
YY'YoYfe

plant or industry but in the inY dQstry
supplying that industry
materials

■ j

••

■

foe laborers not

with

that

investors

and

coveries can be exploited!

the result of
;

promoters

medium of managers,

They are almost always
improvements intro-

workers,

Although the output per manno

for

demand

themselvesa

large

part of the increased product, the
forces and motivations that lead

Marginal Productivity
hour considered as an average

has

them¬

killed off and the laborers

bearing on the proper remune¬

state that output per

tendency

marked

YY
-

;YY Y;

past.

;

moti¬

possible

increase

consideringv what

without

productivity

of increased

those

whether

and

past

the

are

causes

permitted to continue in

to be

the fu-

Y'y ture.
YY: :Y-':^ ;-'yY
;Y;YY The vast Increases in output per
in

manhour

borers.
admit

Anthropologists will not
any improvement
in the

character
>Y
v

intelligence of work-

this country. Some oldfashioned Anglo-Saxons and nar¬
row-minded Nordics would claim
in

ers

been in the

that the change has

opposite direction. Workers certainly work no harder. On the
Y contrary, not only have hours
been decreased but the effort re¬

has been remore

quired in each hour

Y, duced. There is more power,
comfortable
seats,
more

con-

venient work benches, better venY illation, better lighting,
better

;Y;

facilities—even
music.
jazz hound, I do not

sanitary

Not being a
say

enough

numerous

spoil

Re-election of Directors
Of Atlanta Reserve Bank
of

Directors

year

•

••

better music. Probably there
fewer illiterate or non-Eng-

found that the most

has

staff of Hannaford &

Talbot, 519

Frank

Bumb

California

Street.

Bowen With Calif. Bank
The

Finanoial

Chronicle) -v

ANGELES,
CALIF.
6. Bowen has become

—

as¬

term beginning Jan, 1, 1947,

President of
Merid¬
ian, Miss,, and
Donald Comer,
Avondale
Mills,
Birmingham,
Ala., it was announced on Nov: 19
by Frank H. Neely, Chairman of
W. D. Cook,

will be

INDEX

the First National Bank of

Board

the

is learned

For detailed
^'yS:;-1.<■''

WTYyy

contents

from the

index of

YpyA/y''. YV:7YY'YY;■;:<> ."'-vyy

see

2883

page

"Constitution"' of Nov. 20,

Atlanta

which added:
Cook

Mr.

re-elected

was

Group 2,

member

banks

Class A

director, and

Mr. Comer

reliable way

skills.

specialized

ployed at any given wage. The
laborers also make their own esti¬
mates
as
to whether they can,
wish or must work at the wage
offered, and they seek out the em¬

able, willing or

ployers who are

anxious to make the most attrac¬

tive

This

offers.

the

is hin¬

other

the

willingness
changes.

spirit of
and the

of investors to take

It is only

through the

hour is

industries

vAvA'*"- i A'y '.. A

Markets

HI CUBAN;) SECURITIES 1§§
Government

J
Rockwell

"Y;.

Farrel Birmingham

YY-YY Merrimac Hat
Y Y

Fairbanks Co.

Boston Woven Hose &

Rubber

Boston Ground Rent Trust

:YK>Y;-Y;yyY::;

•

;YY;Y:",YYV;:';Y;

Milk Street, Boston 9, Mas*.

Boston

Now York

Hubbard 6442

Hanover 2.7913

;

Teletype
BS 328

Sugar

Railroad

FOREIGN SECURITIES

Y Y

New York 4, N. Y.

50 Broad Street
AFFILIATE: CARL MARKS &

usually

specialize in <dl

Insurance and Bank Stocks

SPECIALISTS

CO. Inc. CHICAGO

Industrial Issues

Investment Trust Issues
Public Utility Stocks and Bond)
TEXTILE SECURITIES

Securities with

New Eng. Mark*

Frederick G. Adaifis & Co.
.

Specializing in Xlnlisted Securities YYY'YYY
AY:Y

Y
Specialists in1
New England Unlisted Securities

24 FEDERAL STREET, BOSTON 10

Established in 1922

'AAyAYA^Y-V.* 'J:%

pay

AV. •••';'

•

'I'v/" '*?.

■

Y"»

YY;-;; '?

Tel. HANcock 8715

Tele. BOston i

Bank — Insurance

■

given indus¬

concern

usually

Puklic

higher wages than the others.

Utility—Industrial — Real Estate Y

large

business

volume

car

Seaboard Fruit

Co., Inc.

'General Products
■■■■.

:'s.

Corp.

■'
'

"'[

'Susquehanna Mills:

Bonds, Preferred and Common Stocks

for

Empire Steel Corp,

RALSTON STEEL CAR CO.
(freight

•..'■■r-ii

Freight Cars i:

long-term

Gerotor-May

Consolidated

Marlin

—-

rmi marks & no- Inc.

in order to attract
from established indus¬

Even within

indicates

Sunshine

Ralph F. Carr & Co., Inc.

Lumber & Timber

Mastic Asphalt

t;,h 5

wages

Shortage

Delhi Oil

9, Mass.
if

Teletype BS 859

Y. Telephone HAnover 2-7914

output per man-

the growing

try

j..K;);; •'A,!Y.' v: >''A"v ;7Yv''- 'A*V-vY

increased for any reason

away

tries.

pays

•

Firm Trading

On
it is helped by

hand,

average

men

y'-'
s

Diamond Alkali

concerning hours and wages.

manhour has been higher

vigorous enterprising
and promoters,

CALIF.

Teletype—N.Y. 1-971

HAnover 2-0050
I'vjj-A.'iVr.'.-* .;Y? YY-Y Y- Y> "V.A>?,'

by governmental regulations

for the increase Growing

managers

;
:

by labor union restrictions

dered
and

process

output per

hiring another man, de¬
termine how many shall be em¬

Consequently the figure obtained
whatever, ' the chances are that
Y: by dividing total output by the
the marginal output will be in¬
Y
number of manhours is no meas¬
creased, if not; in a particular
ure of real contribution of labor,
plant, at least in some plants.
;
and its use as such serves only to
Under those circumstances some
Y -mislead. YY-'- 'v Y: Yy Y-Yy"YY;'
employers become more anxious
Chief Cause of Increased Output to get men and offer higher wages.
The chief cause

;4 ;Y.

Tel. CAP. 042B

Chronicle)

to The 'Financial

ANGELES,

LOS

148 State St., Boston
,

added by

years

prentices

Company,

better

workers tl^an there employment offices, whether run
ago; but on the
by unions, governments or private
other hand, there are fewer who
agencies.
have had years of training as apIf the
30

Brashears

(Special

produce more and

to do that is to

lish speaking
were

A:.

CALIF. —
joined the

Re¬

Federal

the

Y-

•

FRANCISCO,

Bank of Atlanta for a three-

serve

C.
Markson
has been
goods at a price that more Marcus
consumers can afford to pay.
And added to the staff of Fairman &
sands of employers, their plant to the extent that they have suc¬
Co., 210 West Seventh Street,
managers,
superintendents
and ceeded in increasing their sales
members
of
the
Los
Angeles
foremen, each making his own es¬ they have found it necessary to
timate of the value that might be hire more
labor, bidding for it Stock Exchange.

ployers sometimes assisted by cost
accountants.
Hundreds of thou¬

(Special to The Financial Chronicle)

SAN

sociated with the California Bank,
625 South Spring Street.
Y

istic or
sentimental attitude on
additional cooks are the part of employers; not be¬ 510 South Spring Street, mem¬
plainly not worth as much as the cause of the acceptance of any bers of the Los Angeles Stock
original staff, and in any well-run economist's fine-spun theories— Exchange.
*
kitchen the wage rate will be ad¬ but
merely because entrepreneurs
justed accordingly.
are
at all times anxious to in¬
Fairman Adds Markson
.This
calculation
of marginal crease
their
profits
and have

are

:•

Y LOS

broth,, the

Hannaford & Talbot Adds
..

Francis

with

the

decade do
productivity is a matter of esti¬
changes in the la- mates on the
part of each em¬

the past

not reflect any

ANGELES,
CALIF. —I
E.- D'Orsay,,* Roy
W,
Swafford, .Jr. and Mrs. Nellie K.
Warburtorx are with Slayton
&
Company,' Inc.,
3277; Wilshire
Boulevard,; ...;yY," /•
;YY''Yy V*•:

Kenneth

This has not been

the years.

have been the causes

(Special to The Financial Chronicle)

> LOS

(Special to

Y't-'-AA fe-'

•

Three With Slayton & Co,

automatic process. It

rate

in the

at which the further applications the
activities
of labor
unions, re-elected by member banks in
of any one production factor in¬ since it occurred in places where Group 3 as a Class B director.
would be crease the output less and less.
unions were not strong or where
unsafe to project into the future
Labor is a productive factor sub¬ they
came
into existence later;
the same rate of increase that has
Two With G. Brashears
ject to the law of diminishing re¬ not because of the activities of the
prevailed in the past—even if turns. Perhaps this is most vividly
(fipecial to Tub Financial Chronicle)
government, since it was most
LOS
ANGELES,
CALIF. —
agreement could be reached as to stated in the old proverb "Too
conspicuous in countries where
what that increase has been.
It many cooks spoil the broth." But
the
government
did the least Lipman Duckat and Michael J.
would be unsafe to project that
Flannery
are
now • connected
even
before
the
cooks become about
it; not because of any altru¬

over
an

•

vations that have made it

■

the essential conditions and

increasing productivity will be

ration
of
labor,
economists of selves will suffer along with
manhour
In other words,
what is known as the neo-classi¬ everyone else.
is usually a better measure of the
"the-ability-to-pay"
theory
of
cal school have come to agree that
actual productivity of almost anyif adopted,
what is called marginal productiv¬ wage determination,
:
foody or anything else than it is
would be an effective device to
ity is the proper and in the long
of the actual productivity of the
industrial
progress ■ and
to
run
the effective determinant of end
'Y laborers on the job.
.YYyyYY
wages.
The value of an hour of bring about, a perpetual depres¬
Output
per
manhour differs labor is the amount by which the sion...
r i' •
1
from place to place and from shop
output of any plant or operation
to
shop.
Can anyone maintain would be increased by adding one Purchasing Power of Wages Has
Increased
that the differences between prof¬
hour or decreased by subtracting
itable and unprofitable industries
one
hour.
This is obviously not
Everyone knows that during the
in this respect stem from the dif¬
the same as the total output di¬ last century the purchasing power
ferences in
the effort, skill, * or
vided
by the total number of of laborers' wages has increased
strength of the workers? Output hours. In all industrial or physi¬ enormously in nearly every part
per
manhour also has differed cal operations (there is a law of of the Western world.
This in¬
from time to time and has shown
diminishing returns, and a point crease took place not because of
.

against each other. Consequently,
money wages in the United States
rose 346% between 1860 and 1932

In their ca¬
pacity as consumers they get even and, after adjustment for the cost
of living, real wages rose 85%,'
a larger part, because the increas¬
ing productivity of industry in¬ This was at the rate of 2.1% pei;
creases -V competition
and causes year for money \yages and 0.9%
prices to be reduced for goods of per year for real'Wages.; Even in
equal quality.
In this way the I860, real wages were higher here
benefits of increased productivity, than anywhere else in the world,
although obtained in the first in¬ to such an extent that millions of
stance
by the management and Europeans migrated here to share
We
stockholders of the firm initiating in the workers' prosperity.
the increase, are speedily diffused all, I think, would like to see the
throughout the community.
If, increase in real wages continue
however,
laborers
exert
their indefinitely. The only way to en¬
power,
through organization, to sure it shall do so, is to maintain
capacity as laborers.

(Continued from page 2886)

Thursday, December 5, 1946

COMMERCIAL & FINANCIAL CHRONICLE

BOUGHT-SOLD-QUOTED

♦Prospectus

manufacturers)

request

Market about 7Vz
1946

•/'•.Y

W. T. BONN
120 Broadway

New York

Telephone COrtlandt
Bell

& CO.
5

high

about

REMER, MITCHELL & REITZEL,

Circular Available

208

LERNER & CO.
,

Y Teletype Be 69

SALLE ST., CHICAGO 4 .
•

INC.

PHONE RANDOLPH 3736

BELL SYSTEM TELETYPE CG-989

Hill, Thompson & Co., Inc.
Markets and Situations for Dealers

120

Square, Boston 9, Mass.

Telephone Hubbard 1990,

SOUTH LA

WESTERN UNION TELEPRINTER "WUX"

Inactive Securities

10 Post Office

7-0744

Teletype NY 1-886 I/Y

Broadway, New York 5

: Tel. REctor 2-2020
>

Tele. NY 1-2660

Full text of Commercial and Financial Chronicle : December 5, 1946, Vol. 164, No. 4548, Section 1

FRASER