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umvtnii
OF
i
i
MICHIGAN
4m * *
ESTABLISHED 1S39
Reg. TJ. S. Put. Office
New York
Number 5696
186
Volume
EDITORIAL
We See It
It
to be
seems
By RICHARD P. CHAPMAN*
beyond question that the recent
gendered
optimistic feeling in
a more
a
quarters. This is, perhaps, particularly
true of the
stock market. Bonds, too, have fared
better and
prognosticates in several other quar¬
ters have of late
developed
There have been
a
a more
cheerful tone.
Federal Reserve
the
on
as
well
as
erroneous
in conservative trust circles
extraneous
to
trustees
are
resurgence
holding
stresses
spending spree."
a
opinion that the Fed
can
signal for
a
Pointing to growing
"manage" the
econ¬
recession to become serious,
and to previous instances of inflation following credit ;
ease, Mr. Shepardson fears that this overly-optimistic
CQpfidence in monetary-fiscal power contributes to mis¬
direction and over-expansion of credit based on the
"view that it is 'safe' to go ahead because the risk of loss
from cyclical reactions has been greatly reduced." Denies
economic stability objective jeopardizes growth and full
employment goals.
not im¬
-
liquid assets as a buying reserve; assumes
will continue to be with us, and
need for selectivity in stocks as well as in bonds.
some
booms and depressions
by the Reserve people
of
and would not allow
omy
propitious to be fully committed in stocks; suggests
is
spokesman admonishes those who view
signs of credit restraint relaxation "as a
influences and that all too many
essence of Prudent-Man Rule as a
principle. Does not believe the time
regard the
to
"follow the leader"
for actual curtailment here and
The action taken
there.
opment of well balanced programs which "would offer
future vindication of our present judgments." Finds that
seem
signs of business trouble they thought they saw
ahead
Federal Reserve
mune
for
authorities
problems involved in carefully constructing a trust
portfolio over a period of time are scrutinized by Mr.
Chapman in discussing selection of securities and devel¬
even
good many for a long while
System
Member, Board of Governors, Federal Reserve
The
past who have been much inclined to put the
blame
By CIIAS. N. SHEPARDSON*
President, Merchants Nat'l Bank of Boston, Boston, Mass.
number
of business
Copy
Monetavy Policy
Do in Our Economic Climate?
Portfolio Today
action of the Federal Reserve authorities has en¬
a
What Can
Tomorrow's Investment
'
As
50 Cents
Price
7, N. Y., Thursday, December 5, 1957
a
and the words of the Chairman have led at least
some
on
our
way
back,
as
It may or may
great forward strides that have taken place in
ment work in modern times; both in
it were, or shall be in the
,
and in our research
the
not be that such ground as has
weeks will be re¬
24
PICTURES
IN
surpass
own
my
of
extent
really
in
it
an
can
but this be¬
administrative prob¬
We
Continued
address
by
Mr.
of
Chapman
the
before
Bankers
American
by
on
26th
page
of some
credit and
shortages
Demands
for
Continued
Continent
Mid
Association, New Orleans,
ISSUE—Candid photos taken at Annual Beefsteak
of the Invest¬
and
*
r;
STATE
Municipal
MUNICIPAL
and
Securities
Public Housing
.
$
copies
are now
on
MONTHLY
MEMBERS NEW
ST..N.Y.
15 BROAD
CABLE!
YORK AND
EXCHANGES
N. Y. • Dl 4-1400
TELETYPE NY 1-22S2
AMERICAN STOCK
STREET, NEW YORK 5,
COBURNHAM
Bond Dept.
Members
Active
Stock
Markets
Exchange
-
DALLAS
CANADIAN
.
*
-if
-
*
..
STREET
PERTH AMBOY
CANADIAN
DIRECT WIRES TO
DEPARTMENT
Domduox Securities
MONTREAL AND TORONTO
Goodbody &
115 BROADWAY
NEW
YORK
BONDS & STOCKS
For
1
Co.
MEMBERS NEW YORK STOCK EXCHANGE
•
bank
to coast
coast
Exchanges
Teletype NY 1-2270
BRIDGEPORT
from
Orders Executed On All
Canadian
Exchange
NEW YORK 4, N. Y.
£><Mthto€4t COMPANY
offices
Brokers
SECURITIES
District Bonds
FIRST
34
Chase Manhattan
BROADWAY, NEW YORK 5
Maintained
Banks and
CANADIAN
Commission
25 BROAD
DEPARTMENT
1832
established
New York Stock
Teletype: NY 1-708
Dealers,
T. L.Watson &Co.
American
■,
BOND
available
Harris, Upham & C120
To
County and
•
request
Members New York Stock Exchange
OF NEW YORK
Company
Net
State, Municipal,
.■
THE
THE FIRST NATIONAL CITY BANK
Burnham and
Agency
Bonds and Notes
....
LETTER
BANK
30 BROAD
report
DRUG INDUSTRY"
view
burnham
CORN EXCHANGE
department
our
"INVESTING IN THE
BONDS
HAnover 2-3700
CHEMICAL
op
'
the
bond
28
State, Municipal
Section.
....
telephone:
page
Dinner of the Se¬
in
U. S. Government,
State and
on
before the Sixth Annual National
Agricultural Credit Conference of the American Bankers Association,
Chicago, Nov. 21, 1957.
♦An address by Mr. Shepardson
curity Traders Association of New York, and Fifth Annual Dinner Dance
ment Traders Association of Philadelphia, appear in today's Pictorial
DEALERS
were
26
La., Nov. 21, 1957.
TIHS
there
although
ing demands were outrunning the
supply of savings being generated in
the economy. Values of capital assets, such as farm and
urban real estate and common stocks, were increasing
experienced analysts actually reduce or change the risk
Conference
and
peak
Gov. C. N. Shepardson
Richard P. Chapman
panies and of careful appraisals of investment values
*An
1953
capital were strong and expanding.
Interest rates were rising as borrow¬
question is to what extent
does the availability of a mass of de¬
tailed Information about leading com¬
The key
Trust
surpassed
had
Production
the
materials.
it
encounter
strong
defense
spending had been greatly reduced.
Utilization of our industrial capacity
and man-power resources was high,
judgment,
selection.
very
markets.
have
we
knowledge to
hamper our
detailed
that
of
that
elsewhere in life.
thing really untoward that has been taking place
during the past half-year or so may be laid at
page
surfeit
lem
all too many business
on
it almost seems
comes
part, we do not believe that any¬
Continued
times
exercise
to make and' unmake
our
far
the
prosperity is
assigned to the Federal Reserve authorities by
the unthinking among the great rank and file—
For
in
out
the
bank
a
prophet nor the son of a prophet. We do not pro¬
fess to know what is ahead during the next six
months or the next year. We are quite certain in
our own minds, however, that a great deal of too
and, for that matter among
turned
work
accomplish¬
ments of my own active days, and of
that I am extremely proud.
Some¬
gained and the boom resumed with vigor again
comparable to that which existed in, say, 1956
within a relatively short time. We are neither a
men.
quality and quantity of invest¬
ment
been lost in recent months or
much power
were
fields of knowledge
techniques. Both
enlarged
our
not too distant future.
inflationary pressures in the economy
following rapid recovery from the
mild
reversal
experienced in late
;
1953 and early 1954. Wholesale price
averages had been rising since mid¬
year although farm prices were still
tending downward. Consumer prices
were
not yet advancing, but there
were developing pressures
in retail
Two years ago
the
invest¬
The trust business has been a full participant in
of these observers to feel that we are now
1
NORTH LA SALLE ST
CHICAGO
(ORPORAXIOH
40 Exchange Place,
Teletype NY 1-702-3
I
New York 5,N. Y.
'
WHitehall 4-8161
California
Municipals
MUNICIPAL BOND
DEPARTMENT
ISttttlt of America
NATIONAL
irftVcs ASSOCIATION
309 Montgomery St., San Francisco, Calif.
2
The Commercial and Financial Chronicle
'
(2426)
The
Dealers only
For Banks, Brokers,
of experts
advisory field from all sections of the country
participate and give their reasons for favoring a particular security.
In the investment and
Because Our...
wire
private
they to be regarded,
•re
system
McLouth Steel
Complete OTC service
.
.
better executions,
mean
.
McLouth
faster
.
for you.
.
.
formed
producer
carbon
Instead,
1920
Exchange
5
PHILADELPHIA
a
1
FRANCISCO
SAN
•
it
g iv e
unique
Private
Wires
Principal Cities
to
'
§
IBlS
posi-
MSjji!?'!'
of
one
RIGHTS
i
SCRIP
Since 1917
McpONNEII&fO.
Members
New
American
Detroit
Exchange
Stock
Exchange
120 BROADWAY, NEW
the
28%
over
iron
from
ore
contracts
U.
S.
Allied
Chemical.
of
25%
1950,
$3.53
in
1956.
For
shave the
more
distant
supply and to rely
for quick
on
sources
contigu-
delivery.
YORK 5
General Mortors Coris one of the principal
3953
at
i956
and
and
2-for-l
a
into
$o.50
months
of
the
and
earnings
$1369 miHion
lin
in
nine
current
year
sales
sfyare
$4.38,
Air Control
assisted
Products, Inc.
Bank of
First
Company
Colony Life Insurance Co.
Scott, Forner & Co.
Lynchburg, Va.
Tele. LY 62
in
its
incurred
in
to
ticipating
in
LD 33
even
preferred/ to purchase
larger quantities. Re-
cently, General Motors accounted
for around 35% of McLouth's total
dollar
gross
Opportunities Unlimited
sales, with no other
customer accounting for as much
as
6% except for a fabricator oC
oil-country pipe, who took 12Va%.
IN JAPAN
Third,
Write
for our Monthly Stock
Digest, and our other reports
that give you a pretty clear
picture of the Japanese
ness
and
or
Nomura Securities Co., Ltd.
Broadway, New York 6, N. Y.
Telephone: BOwling Green 9-0187
not
orders
for
an
offer
any
or
solicitation
for
particular, securities
a
MASSACHUSETTS
SECURITIES
♦Trading Markets
♦Retail Distribution
KELLER BROTHERS
largely
ZERO COURT
STREET, BOSTON 9, MASS,
2-2530
BS-6B0
....
date.
It
„
® A ®
Q
t]™
\
SSSTbS?
iW^; 'Vb?
;X+]
J? }
J,
1
?
\
SI
i
3
.
n,
...
°3
i
including
new
a program
steel
At
Corp.
Keyes Fibre Co.
a
BOENNING & CO.
invest¬
an
has
launched
Established
1914
1529 Walnut Street
115
Broadway
New York 6, N. Y.
CO 7-1200
Philadelphia 2, Pa.
LO 8-0900
ATT Teletype PH 30
the
products, (2) the improve¬
existing ones, and by (3)
Emphasis
fV stock dividends are
110 imP10L>able.
which
branded
which
sold
sumer
is
put
companies
into
Corn
operations.
as
Bosco,
well known to the
and
have
revolutionary
and
basis of the cost reduction
earnings
increase
oil
into
the
Mfg.
Guarantee Bank & Trust, A.
C.
Reading Co. 3Vss, 1995
Phila. Transp. Co.
3-6's, 2039
con¬
Samuel K. Phillips & Co.
Members Phila.-Balt.
consumer
in¬
Stock Exchange
Pennsylvania Bldg., Philadelphia
Teletype
N. Y. Phone
i
COrtlandt 7-6814
PH 375
in¬
mar¬
lower,
Successful
the
Buck Hill Falls Co.
Whitehall Cement
market
accept¬
Thus, the promotional and
are
t
Pocono Hotels Units
acquiring
on
products, such
are
troduced
ket
John B. Stetson Pfd.
r
the
cklJed>
common,
a
to increase its output of
acquisition
of
? cancel debt, we question
whose
products
fit
any oai y cash dividends on the
Products
scheme
of
com™°*b although, as debt is re-
pated
process.
Capitol Products Corp.
at
price of $30
a
ment of
Because of the
^
and
oxygen
Continuing Interest in
stock
common
investment
specialty items which
highest profit to the
company. It is pursuing this pro¬
gram by (1) internal research into
return
•
furnaces
untried
the
Products
consumer
}
f
Corn
program
fl&Vre
Tn k|epil?S
t
back a substanP1(?P01^lcln of earnings into
McLouth
Bankers
Company Operations
v!-1
The
mid-year 1957, the result was
McLouth putting down its oxygen
its
iai^ general bL1.sl
,
fl
Investment
Fischer & Porter Inc.
prod¬
ment
in
a
well' managed
and
soundly financed company which
is enjoying a new growth.
+1
tb<*k' f
?
food
share Corn Products is
c°stinsavlagsnfrom th®
™
and
prices.
earn-
TaHn/Into
share
A
have
of
success
branded
attractive
an
current
cash
in its
At
the
Bosco
and
the
integration
chocolate
of
both
flavor
line
oO\)R WOfo.
Kaseo
dog food line has
confirmed the company's faith in
a well-conceived
acquisition pro¬
pro-
the issue lias appeal for
1011 8_r a n g e enhancement. For
those needing income, the 5%
6ram>
* The
company is alert to
opportunities to acquire and inte¬
gram.
($100 pai*) convertible preferred grate suitable
attractive products
ton as against a cost of $240 a ton stock,
selling at around 90, to that fit into
its pattern of manu¬
at
the time for integrated
pro- yield 5.5%, could be substituted,
facturing and marketing expe¬
ducers using orthodox methods. This stock ranks equally with the
rience. In March,
1957, the com¬
More recently, Dominion Found- participating
preferred;
is
repany acquired the assets of Re¬
ries & Steel in
Canada, and Jones deemable at $105 a share through fined Syrups and
tonnage at
Laughlin
U.
S.,
Louth's
a
and
Kaiser
have
oxygen
cost of $110
Steel
followed
a
in
Mc-
lead.
manufacturing
^ common and convertible
in another expansion
program, to
be completed in 1958,
and
P1 eferred are traded in the Overinvolving the-Counter
Market and large
expenditure of $34 million, that Pulckases should be entered after
is designed both to reduce
proa
+?n
^ a ,a
Quotations
duction costs and to increase steel iathei
than be placed
at the
producing capacity. At completion malket'
will
have
an
annual
capacity
company
steel
The
companies
to
utilize
this
.
.
,
es^e(^
are
.
111
capital
with
Price
also
a
for
sugars
provides
an
to
liquid
eastern
Corn
indus¬
are
thus realized.
provides
Corn
The
Products
desirable location for
tribution
of
company
has
its
products.
N. Q. B.
OVER-THE-COUNTER
INDUSTRIAL STOCK INDEX
18-Year Performance
35 Industrial
of
Stocks
the
warehousing, packaging, and dis¬
primariiy inter-
FOLDER
ON
REQUEST
The
.
appreciation
gain rather than
convertible
cane
of
Considerable savings in
freight costs
is suitable for large in-
who
vestors
with
trial site.
addition
line
Products,
Products
site
in
a
granulated
Corn
The conimon stock of the above
of 1,812,000
net
ingots. The program
will incorporate the
Dravo-Lurgi
sintering plant, placing McLouth
among the Drst of the American
tons of steel
Sugars, Inc. of
«1une 30, 1962, and lowering prices
Yonkers, N. Y.
thereafter; and is convertible into
This
company
common at $46 per common share.
Currently, McLouth is engaged
rated
Richmond
the
McLouth
nO.. INC.
Teletype
in
to
open-hearth
adopted
the
Telephone
? ae <e"
with
earnings and under two times
estimated cash earnings. Because
expansion program, for
its unique position, as disinstance, short cut the time lion- cussed above, including antici-
&
C_3
better
&
111 Broadway, N. Y. 6 COrtlandt 7-5680
Stouffer
manage-
programs, as evidenced
accomplishments,
ored
Is
lacked
not
the
earlier this year at 43%, is cur- ance.
aggressive- Gently quoted at around 30, or
advertising expenses usually
its policies under five times estimated 1957
curred when a new product is
McLouth
astuteness
profit,
1953-56
economy as a whole.
Fhis
the
has
ment
61
is
$105
only guaranteed to take annually
5% of its total steel requirements
from McLouth, but holds options
through May 31, 1967, or so long
as it owns
any of McLouth's pap-
Its fortunes
from
formation
that
million expansion program
is repaid, General Motors has not
prices.
corn
benefited
period of 1956.
h
Inc.
of
Tokyo, Japan
Brokers
longer chained
similar
the
Company
York,
Yamaichi Securities Co., Ltd.
no
The stock market has not fully
evaluated Corn Products' trans¬
1953-56
connection-with
is
progress
lion
for
New
Affiliate
products, its
Wm. J. Holbrook
ucts.
expansion program. Until May 31,
1967, or until all long-term debt
Virginia
Alabama-Tennessee Natural
Gas
McLouth
the
V
based
corn
of
near-by supply, General Motors,
through purchase of $25 million
of participating
preferred stock,
in
v,
production, of
tively, compared with $117.5 mil$3.57
of
company
factor
write
or
Yamaichi
While
high
and
Call
Securities
growth
largest
information
current
;
a
respec-
and
; ;
Corn
the
is
,
at
ran
non-
Products for
1948, ran
1946, were
in 1953, arid
first
For
V:,,.
higher-
poised
1950
the
per
branch offices
our
a
items has
corn
in
split
share
a
to
STOCKS
of
up¬
margined
in
each
100%
1-1557
IA P ANESE
company's
product line
"
Trading Markets
An
grading of the
Earnings, after adjusting for
$5 01
poration
income.
the
manufacturers, when cutting back
orders for steel, are more inclined
Second,
dividend
around $164 million last
dividends
Direct wires
with a long record
profitability
which;- provides
liberal
new
year.
NY
Birmingham. Ala
Mobile, Aia.
carry¬
company,
$86.4
of
phase.
stock
HAnover 2-0700
New Orleans, La. -
growing
a
ijon jn 1945 had grown to $50 mil-
in
TEL. REctor 2-7815
is
and
$3.87
firms
Products
down"-in June, 1958), $32.2 mil-
and
ous
Corn
iion in 1950, to $96 million in 1953,
operating in the tern-
in¬
McDonnell & Co., New York City
lion of
were
York
Stock
Exchange
American Stock
Exchange
19 Rector St., New York
6, N. Y,
Corn Products Refining
.
consists
Members New
and.
long-term debt (includ$12.7 million to be "taken
that serves the large steelconsuming automqbile industry.
The strategic value of such location
is
important
since
motor
of
for
Steel
Steiner, Rouse & Co!
-;yWILLIAM J. HOLBROOK
content,
Steel (a
National. Steel), is
two
integrated steel
tory
to
vestment, that is, a security
ing only moderate risk.
and,
area
of
companies
.
Stock
York
the
subsidiary
be-
businessman's
a
by 1,487,000
shares
having a year-end book value of
$40>97 each. Net sales of $11.9 mil-
Collins
is
along with Great Lakes
Specialists in
Wisconsin
termed
represented
thing,
in
Refining—William
participating and convertible preferred-stocks, and somewhat over $60 million of common,
dustry.Tor
located
iron
ing
ttBMfliL
tion in the in-
one
bearing
Capitalization
a
McLouth
in
be
million of
that
o n e
properties
011
Bought—Sold—Quoted
■
,
also mentioned in the article may
•
Company
(Page 2)
Members
to plant and equipment. In additipn to a 50%. .interest in leases
and
factors peculiar to the
troit, Mich;
.
iJJs"$ •'McLouth also has
lr':S8
Letters,
Products
Louisiana Securities
Chairman,
Inc.,
De¬
Collins,
additions
new
KiiidM IK«y| Cleveland Cliffs and for other
it if raw materials from U. S. Steel
there
CHICAGO
•
V
on
J.
J.i Holbrook, of McDonnell &
Co., New York City. (Page 2)
lieved to contain upwards of 160,000,000 tons of crude iron ore
y
certain
are
Teletype NY 1-40
BOSTON
sheet
-
for
reason
cold
ISM
ing the stock.
120 Broadway, New York
WOrth 4-2300
stainless
a
as
and
recommend-
Member
Stock
American
hot
strip. This
our
Corporation
Established
ranks
now
of
and
is of interests,
but it is not
New York Hanseatic
Associate
1943,
major
Corporation,
share
common
Alabama &
Corporation-
Investment
Corn
since 1948, will have
approximately
$100
per
spent
Thursday, December 5,
1957
Participants and
Steel
Charles
of the 1957-58 expansion program,
Corporation
rolled
and
nor
sell the securities discussed.)
to
the company,
Steel
in
be,
to
promising improvement in steelmaking technique. At completion
Chairman, Investment Letters, Inc.
Detroit, Mich.
department
3. Broad contacts and
4.
offer
CHARLES J. COLLINS
Large, experienced trading
2.
as an
intended
not
are
.
Their Selections
McLouth
(The articles contained in this fornm
.
Week's
This
Forum
A continuous forum in which, each week, a different
group
Try "HANSEATIC"
1. Nationwide
Security I Like Best
.
or
income,
preferred
stock
!
not
neglected
its
standard product line in its
quest
Continued
on
National Quotation Bureau
incorporated
46 Front Street
page
33
New York 4,
N. Y.
Number 5696
186
Volume
.
.
The Commercial and Financial Chronicle
.
(2427)
Do Rights Offerings Cause Dilution?
INDEX
By RALPH L. NELSON
f
JL S.
Articles and News
ICHTfflSTflf
Page
AND COMPANY
Assistant Professor of Finance, School of Business,
Northwestern
What Can Monetary Policy Do
University
—Charles
Prof. Nelson cites recent offering of
Do
balancing of possible dilution of earnings by expansion of
sales and net income within year of issue.
Urges careful
•
,'
...; t..,
••
g
•:
and
widespread
A
often
un¬
questioning attitude among inves¬
tors is that the offering of rights
to purchase stock at a price sub¬
stantially be¬
low
market
will dilute the
of
Investment
Generating—Ira U.
tion.
Changing Patterns in the Automobile Market
It
compared with a book
share as of the
preceding year-end. And the sum
of $220 should be able to develop
earning
power
of\ considerably
more than the $6.76 per share re¬
value of $32.20 per
one
More
recent
for
-
how,
from
mounted
illus¬
Ralph L. Nelson
rather than dilute per share value.
This privileged subscription offer¬
ing of 1,050,000 shares at $220 per
share represented a record figure
for a stock issue, second only to
in
Motors'
issue
mammoth
borrow
3%%
in
tained
A
myth
com¬
in the market that every ad¬
equity
issue
of
dilutes,
common
in the
by
which the offering
price falls short of the market
price. In this instance the market
range was from $288 to $337 dur¬
ing the subscription period. The
rights ranged in value from $6%
to $10., This value was enough to
measure
might
had
be
make it worthwhile for
holder
smallest
exercised
sell
to
even
the
any
un¬
Actually only
2,035 (or 0.2 of 1%) of the shares
offered
rights.
were
unsubscribed
when
the subscription
period ended. For
the holder who sold, the rights at
lowest
sented
a
figure
$6%
of
repre¬
"melon"
tax-favored
equivalent to three
years
of nor¬
current rate
mal dividends at the
of $2 cash.
However, whether the
rights were exercised or sold, we
shall show that the effect of this
timely equity financing would be
more likely to enhance than dilute
the investment of the IBM share¬
to add
66.7%
than $221,000,000
more
book
equity, even
under the assumption of maxi¬
mum
underwriting commissions
to
syndicate headed by Mor¬
substantial
price
was
discount
market
from
indicated by the situa¬
tion: The price of the
stock, aided
by a 2-for-l split on May 7, 1957,
had risen sharply from a 1956 low
of 149V4 to a 1957 high of 345, in
the week before the offering.
An
adverse turn in the market might
Expansion Problem
V
with
early 1957 IBM found itself
a
major problem of expan¬
sion.
Sales had increased five-fold
In
the dilu¬
May, "Real¬
ism About Rights," Commercial and Fi¬
nancial Chronicle, April 4, 1957.
tion
concise
problem
see
summary
the substantial aver¬
age
annual rate of 20%
com¬
pounded. The 1955-1956 increase
was an impressive 33%, and first
quarter sales in 1957 were up a
whopping' 38% from the corre¬
sponding 1956 period. The com¬
spent $208 million on new
plant
and
equipment in 1956,
equal to 51% of net plant at the
end of 1955 and resulting in a 23%
increase in net plant after retire¬
ments
and
depreciation
allow¬
ances.
Further capital spending
for 1957 was expected to exceed
pany
of
1956
by
amount.
The
rapid
that
sion
substantial
a
Spaak
11
Ending the Discount Embroglio in Housing Industry
—Norman P.-Mason
'i'__L
Open Trade and Investment for Canadian and World Growth
—N.
R.
Crump
13
Why the Deep Gloom About Business Prospects for 1958
—John R. Haas
-Hon. II.
heavy
additional
capital
needs,
which
not
were
being met from
In 1956 working
capital, far from growing in pace
with sales, actually declined by
million.
$7
Clearly any dilution
by the new is¬
increasing shares outstanding
of earnings caused
sue
by 10% would almost certainly be
more
than
counter-balanced by
expansion of sales and net income
within the year of issue.
Capital Constant
Return'on
The effects of the
sion
may
be
seen
rapid
in the
Continued
on
expan¬
accom-
page
For many years we
DDCCCDDrn CTflPKQ
specialized in ' HE ■£ It'll Ell. U I UlllVO
Some Reflections About the President's Illness
—Roger W. Babson__
Spencer Trask & Co♦
Members New York
TELEPHONE IIAnover 24300
TELETYPE NY 1-5
•
i
Nashvllls
•
•
39
A.
Exchange PL, Salt Lake City
DAvis 8-8786
Teletype: SU 155
22
Is Tax Reduction Essential for the
—Richard
HEnderson 4-8304
Teletype: JCY 1160
21
Salomon
Economy?
25
Musgrave
Florida Steel
the Armed Services!
29
(Boxed)
Rights
Pacific Uranium
Regular Features
As We
See It
(Editorial)
L 0. F. Glass Fibers
Chlcaga
Schenectady
•
•
Glens Falls
Worcester
Cover
__.
—
Bank and Insurance Stocks
Tenn. Gas Transmission
19
Business Man's Bookshelf
8
Coming Events in the Investment Field___________
8
Dealer-Broker Investment Recommendations
8
Singer, Bean
&
Einzig: "Paradox of Sterling's Recovery With Poor Balance of
Payments"
Mackie,
HA 2-0270
Funds
________
Direct Hires to
40
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18
News About Banks and Bankers
Observations—A.
Wilfred
Our Reporter
Governments
on
Salesman's
The Market
—
29
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34
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.
.
The
State of Trade and Industry
and
You
Corp.
Epsco Inc.
29
,____
._
and You—By Wallace Streete___
Security I Like Best__.
Lithium
37
Corner—
The
Washington
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Security Offerings
Prospective
Securities
8
in Registration
Securities Now
Dallas
30
Securities
Railroad
Los Angeles
Chicago
27
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Securities
Utility
Philadelphia
5
—
Report____
Our Reporter's
Public
May—
N.Y.
Teletype NY 1-1825 & 1-4844
42
Indications of Current Business Activity
Mutual
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Ahead of the News—Carlisle Bargeron
From Washington
inc
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Twice
Weekly/
COMMERCIAL and
FINANCIAL
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Reg.
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S.
Patent Office
B.
Park
DANA
Place,
COMPANY, Publishers
New York
HERBERT D. SEIBERT,
Editor & Publisher
WILLIAM DANA SEIBERT,
President
as
B. Dana
second-class matter
1942,
Common & V. T. C.
Vitro Corp.
Febru¬
at' the
Subscription
Pan-American
Union,
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Canada,
of
Countries,
Rates
$65.00
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of
W!! V. FRANKEL & CO.
INCORPORATED
in
year,
39 BROADWAY, NEW YORK 6
year.
WHitehall
Other
(general news and ad¬
vertising issue) and every Monday (com¬
plete statistical issue — market quotation
records, corporation news, bank clearings
state and city news, etc.).
Other Offices:
135 South La Salle
St.
Chicago 3, 111. (Telephone STate 2-0613);
Eng¬
Subscriptions in United States, U.
Territories
and Members
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Possessions,
Thursday, December 5, 1957
Every
E.
post office at New
York, N. Y., under the Act of March 8, 1879.
25,
7, N. Y.
2-9570 to 9576
&
1957 by William
Company
Copyright
Reentered
ary
WILLIAM
London,
Smith.
Gardens,
Edwards
c/o
CHRONICLE
Stock Exchange
ST., NEW YORK 4, N. Y.
Boston
DIgby 4-4970
Reconciling Our Economic Goals and the Problems of Inflation
—Ezra
Exchange PL, Jersey City
20
,
Quality of Consumer Lending—Hon. C. Canby Balderston
REctor
•
Spokane Stock Exchange
16
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1
25
Albany
Members Salt Lake City Stock Exch,
V. R. Iengar_
land
BROAD
J.F.ReiIly&Co.,Inc.
14
The Credit Approach in Underdeveloped Countries
Published
25
RESOURCES
12
._.
The
have
RADOROCK
sales expan¬
imposed
working
of
A. Wilfred
LISBON URANIUM
10
since 1947, at
endangered the financing.
Even a price of $220 per share was
a
9
Corporate Giving—Gerhard B. Bleicken.
But Don't Forget
have
1 For
___L
Common &
internal sources.
subscription price at a fairly
%
Stanley and Company.
gan
needs
holder.1
A
debt,
and
financing in addi¬
By increasing th,e shares
amount
the
stock
sential.
the
in
—Hon. Paul Henri
1959.
If
to be main¬
retained earnings was es¬
to
7
(
The Atlantic Alliance: Russia's Public Enemy No. 1
31,
to
tion
or
Common Myth
adopted the
one
ditional
a
$330,000,000
were
between
common
was
If
had
Company to
Dec.
balance
even
an
than
later
not
HYCON
ex¬
time to time
notes from
WHitehall 4-6551
MANUFACTURING
additional $150,000,000
an
.
FEDERAL URANIUM
.
outstanding by 10%, the company
1955.
mon
Trends
a common
Prudential Insurance
price adjustment, common stock
financing may actually enhance
General
total of
a
Wall
HAILE MINES
stock
The com¬
further obligated to the
pany was
market
ing
to
99
STREET, NEW YORK
Telephone:
6
Nobody Seems to Want Preferred Stocks
—Curtis V. tor Kuile__.
___:
equity of $331,662,189.
fleet¬
a
indebtedness
compared with
as
vividly
aside
base for its
a
at
6
Toward Budget Balancing With Flexibility
—Hon. Robert B. Anderson..
By the 1956 year-
long-run
end,
Ma¬
chines
as
panding debt.
International
trates
indicated
was
Private Enterprise—Sidney J. Weinberg
—Byron J. Nichols
For
however, was the
had reached
where equity financing
WALL
99
5
:_
basic,
point
a
offering of
new shares by
Business
Called
fact that the company
ten
-
Financing
Equity
deals
enough to turn anyone's head!
3
4
The Challenge to
stockholders.
cash
The
are
J
Cobieigh__
ample from the point of view of
avoiding genuine long-run dilu¬
common
The
Look Back in "Glee"
Cover
Rights Offerings Cause Dilution?—Ralph L. Nelson.
Unrealistic Profit Reporting and the Stock Market
—Leonard Spacek _______
L__
:'i
ported for 1956.
existing
the
Cover
-
;•
•••
...
]
Shepardson
Babcock and Wilcox: Expanded Profits From Steam
analysis of each case pointed to comparison of new funds'
contribution to that-previously existing behind each share.
I
in Our Economic Climate?
Tomorrow's Investment Portfolio Today
—Richard P. Chapman
by IBM as demonstrating the reverse. Holds that common
stock financing may actually enhance rather than dilute per
share value. Maintains IBM's financing exemplifies counter¬
>.
N.
shares to stockholders
new
3
Bank
$40.00
Quotation Record — Monthly
year.
(Foreign Postage extra.)
and
per
Note—On
the
rate
of
3-3960
Publications
account
of
exchange,
the
fluctuations
in
remittances for for¬
eign subscriptions and advertisements must
be made in New York funds.
Teletype NY 1-4040 & 4041
Direct
PHILADELPHIA
Wires to
SALT LAKE CITY
The Commercial and
4
Financial Chronicle
.
.
.
(2428)
Expanded
from Steam Generating
Profits
By DR. IRA U.
COBLEIGII
An honored
luster,
in boilers and tabes takes on new
sales and profits rise.
name
further increase indicated for 1958,
as
e
f
r,
Ira
o r
u.
year-was awarded a $10
contract by the Atomic
cousesgn
these
goods, is
the electric utility trade and for¬
tunately the demand here is not,
at this juncture, tired and downsloping (as in a number of other
areas of our economy).
On the
contrary, the capital investment
outlay bf public utilities has been
moving sharply ahead from $3.8
billion in 1956, to $4.65 billion this
year,
and
still larger figure in¬
In all these fig¬
a
dicated for 1958.
the money spent for addition
to, or improvement of,'power gen¬
erating capacity looms large. Sev¬
enty-five per cent of the electric
power
produced in the United
States
is
steam-generated
and,
since boiler room equipment in a
power plant comprises 35% of its
total cost, when Babcock and Wil¬
cox gets an order it isn't for pea¬
nuts!
: Steam generating equip¬
ures,
sales
ment
of
BAW
should
Commission
chant Shfbt
only boilers, but fuel burners, su¬
perheaters, heat exchangers and
pulverizers.)
An even larger segment of BAW
business
in
is
tubular
products,
welded and seamless, made of car¬
bon, alloy and stainless steel. This
tubing it uses itself in the instal¬
lations
it
sells
and
for
sale
to
A
thirds major
company
a
i
wide assortment of industries,
component
of
sales is found in insulat¬
very
cope
high
cause
encountered
power
not
temperatures
only
generation,
in
but
mills, foundries, etc.
at
criteria
equities
expending in recent years on re¬
a
atomic
r:'"rrJ~
energy.
'
Any stoek singled out for con¬
by
investors in our
sideration
present
market
timid
the Dow slumped over
(in
which
a pro¬
nounced forward look in both the
gross
Sales
a
The past weex
a
years
rose
decline
moderate
ital
for
cited above.
reasons
will
troleum,
and
to
dramatic
the
same
from
38
—
from $2 million
million in 1956. In
period net per share
rose
cents
cash
to
dividends from
So much for
a
$2.74, and
23 cents to
decade of
chemical,
but where is BAW headed
Still
There's
up.
no
flat-top,
immediately * in
plateau,
today?
shipbuilding industries, plus
nicipalities,
seek
should
automatic
the
measurement
or
in
tradition
a
manship
Fischer & Porter
an
endless variety
ami control.
Leeds &
Company
Rockwell
quotes,
of
quality
Manufacturing
out, there still remains,
on
Thursday."
A glance at the
production figures for the previous week shows
a sharp
decline
trucks below the week before. Steel
production this week is again scheduled to strike a three year
in
the
low
output of
point
lower
electric output
and
the past week also registered a
trade for the country as a whole
continued
slightly under the like period a year ago.
Retail
level.
in the latest week
One
and
cars
piece of
this week of interest to business in general
news
the
proposal of Richard J. Gray, President of the AFL-CIO
Building and Construction Trades Department wherein he asked
the construction workers to give up their fight for wage
increases
was
in 1958 to
in its
help combat the inflationary trend that held the country
grip. The recommendation was made as the group's annual
convention opened this Week in Atlantic City.
He further proposed
the setting up of a committee to seek a voluntary moratorium on
in industries dependent
wage boosts
reported,
was
coolly
was
receivek
on
construction.
The plan, it
by most labor leaders.
Unemployment rose during theautumn in most of the nation's
major industrial centers, but the increases were generally "small
to moderate," the United States Department of Labor reported.
Three-fifths
areas
the
of
149
major production and employment
jobless totals, its Bureau of Employment
Only 15 of the areas, however, had sufficient
showed increases in
Security added.
changes to warrant transfer to looser labor supply classifications,
the Bureau declared.
Areas with
large aircraft industry concentrations reported the
significant unemployment increase, due to defense procure¬
ment cutbacks. Machinery and primary metals industries also had
significant increases. Seasonal curtailments in food processing,
most
lumber and construction added to the supply.
Over-all autumn employment
conditions, while less favorable
September, generally had not been seriously affected by
greater numbers of unemployed, the Bureau said. Job totals
than in
the
remained
at
or
record highs, for the season in many areas,
near
it noted.
to
Employers told the Bureau they expected employment losses
same as or a little more than, usual.
mid-January to be about the
The 15
transferred to
areas
groupings with higher unemploy¬
previous classifications were: Hertford and
ment levels than their
Stamford-Norwalk, Conn.; Los Angeles-Long Beach and San Diego,
Calif.; Bridgeport, Conn.; Wilmington, Del.; Peoria, 111.; Wichita,
Kan.; Minneapolis-St. Paul; Syracuse, N. Y.; Lorain-Elyria, Ohio;
Salt Luke City, Utah; Seattle and Spokane, Wash., and Atlantic
City, N. J.
A•
-
The
Flint, Mich., and Fall River, Mass.,
areas were
reclassified
because of reduced labor surpluses.
The steel market
is a lot better than it seems, reports "The
Age," national metalworking weekly this week.
It points out that actual steel use will set an all-fime record
of 84,000;000 finished tons this year.
This is often lost sight of
in the face of steel's falling ingot rate.
9
No one in steel is trying to cover up the drop in new orders,
says the metalworking magazine, adding that everyone agrees that
steel users will go on living off their inventories until there is a
definite reversal of the present trend. This may not come until
the second quarter of 1958, or even later.
Steel, nonetheless, is being chewed up in metalworking plants
at a terrific rate and unless there is a sharper downturn in the
overall economy than appears in the cards, this rate of use will
Iron.
Marketing Department
70 PINE STREET
Bf we
NEW YORK 5, N. Y.
Offices in 112 Cities
.
and
the
Is
today's market?
stock
cheap
in
Is it essentially
undervalued at today's
price?
To
in
less
recent
from
"The
Iron
up
BAW,
sidered
a
we
not
now
1957
say
that the
selling at 11 times
earnings which is
extravagant ratio for
any
the
only
can
is
stock.
a
34
year's
are
a
so
Further, these
13
high
points below
and
only
five
And it's
better stock today than
was
a
customary selection for lists de¬
six months ago.
to
provide
It has been
a
quite
worthy
equities
marked for
you
may
have
or
(including disgust!),
humbly suggest that BAW
is not without
merit'.
Age"
slightly
move
reports
during
one
oi' the
time
these inventories have been cut back
that
the
up
into line with actual con¬
incoming
last
reversal of the downtrend.
week,
steel
but
this
Orders in recent
orders have
is not con¬
months have
adjusted their
Longer-than-usual holiday shutdowns of metalworking plants
next, it observes.
area
operating rate still further this month
Some appliance plants in the South
are
"The
delivery, or setbacks into January.
Age" further reports that steel
Iron
holding down year-end orders
ernments
year.
impose
This
has
to
the
a
tax
on
prompted
bone,
for tax
reasons.
and
Ohio River
after both
shutting down the remainder of the week
Christmas and New Year's. This is resulting in reduced
lor December
users
ordering
also
are
Some local gov¬
on hand at the end of the
smaller companies to cut in¬
larger outfits have at least been
inventory
many
while
discouraged against rebuilding inventories.
In
term
switch from less
disposition, for tax
other reasons
may we
hopeful long
as a
once
will depress the steel
ventories
representation
But
This has caused
tended to be up one week, down the
next, as users
stocks to avoid shortages of various sizes and
gages.
es¬
it
mills themselves.
to "normal," steel output will
sumption, it continues.
picked
common
the
years.
resolve that point with respect to
holding, and
&
months.
some
What is hurting the steel business at the moment* declares this
trade weekly, is that more steel is coming out of users' inventories
hottest competitive markets for most steel products of any
As
Merrill Lynch, Pierce, Fennfr
continue for
is taken, one final question to be
in atomic energy securities.
"Ward's Automotive Reports" stated with respect to last
week's
the decline "reflected more than the general
before any positive market action
signed
just call—
the
given equity have been
a
sentially
Perkin Elmer Corp.
work¬
during
points above the low.
Moore Products
sys¬
After all the statistical elements
favoring
shares at
Northrup Company
to
past 76 years.
indicated
find markets for:
Fisher Governor Company
current
,y. -
control
established
seasoned
Baird Atomics
For
.
mu¬
continue
tems, pressure vessels, and boiler
view.
of Instruments that American
or
paper,
equipment which BAW turns out
$1.
history,
of the companies in the field whose stocks
make markets in,
lower
.
more
business can't get along without, turn out
we
Not: only
The rise in net earnings.was even
"pi-
some
in
re¬
1946
Measure lor Measure
are
cap¬
pe¬
in
.million
answered.
Here
overall
in
expenditures by industry
public utility equipment
$57.7
prouu^txon
automotive output,
shutdown for Thanksgiving Day
,.
quirements increase, but the
from
Some $70 million will be added to
indispensable units for
in stock.)
1958, this is not expected to im¬
10
as
(In addition
they pay.
While there is expected to be a
trundled
of
back
$281.5 million in 1956—over 400%.
cement
They make thousands
inter¬
in cash, there has been
distribution
small
those
to
pede the forward motion of BAW
past
over-all industrial
levels, due in part, to the general shutdown on the part of several
industries because of the Thanksgiving Day Holiday.
However
an
Well,
the
in
than
is
which plow
shares
the $1
mature
BAW
pretty good job there.
and net departments.
BAW does
more
to
same
grade common making
appeal
in
the moon),
should have to demonstrate
logical
ested
which
by
judged,
are
investment
search and development in
the
By most of the stand¬
$25.51.
ard
assets.
current
in
conservatively expressed
was
field, but because of the import¬
ant money the company has been
steam
•
million
date
from
current * liabilities
in
$171
be¬
this
in
start
head
its
of
were
up
Book value per share on
then we can
for
good doctor is right,
with, and contain,
furnace
and
lion
2000 will be nuclear
not fusion."
If the
in 1946 to $14
ing fire brick, and other refractory
items to
year
expect a very bright future
Babcock and Wilcox, not only
total
million for this year.
specific items include not
!f,i
cently stated: "I would guess that
the-main industrial energy source
the
Production
Business Failures
Jj
y
.
thirty-five
the capitali¬
to 5,886,638 shares of
common, listed on N.Y.S.E., pre¬
ceded only by $32 million in debt".
Net working. capital at the ! 957
mid-year was a fat $127 million
arrived at by deducting $44 mil¬
zation
Dir.
fission
Industry
sold in 1957 bringing
-
in
...Av-.
.
and
shares of common
thousand
Edward Teller, one of our
most eminent ^nuclear scientists,
and inventor of the H-bomb, re;
A.
hundred
Five
engineer, and produce a water re¬
actor and propulsion elements for
the first nuclear powered mer¬
around $140
(The
design,
to
million ture,
Energy
develop,
Price, Index
Auto
and
its
Its chief cus¬
Retail Trade
Commodity Price Index
Food
$3.50.
A great deal of the romance in
Babcock and Wil¬
We've
already mentioned re¬
present eminence has BAW has stemmed from its pion- search
outlays as a propellent of
neer
position in atomic power.
virtually paralleled the growth of
higher profitability here, Prudent
the electric power industry. BAW After sub-contracting in this field
for a decade, it entered produc¬ outlays for addition and improve¬
paid its first
ment to plant are likewise pro¬
tion on its own in 1953.
BAW
dividend in
turned out the reactor vessel and phetic of future profits. BAW has
1881 and has
not been stingy in this regard. In
related equipment for the "Nauti¬
mainta i n e d
the five year period 1952-56 the
lus," the first nuclear powered
this ingratiat¬
submarine. It is now at work on company spent $50 million on cap¬
ing custom
ital assets and will have spent an
t hi 0-0 million nuclear steam genthroughout the
additional $35 million in the 1957erating plant for the Consolidated
years since. It
58
period.
These monies make
Tdison Co. at Indian Point, N. Y.
is now the
For rears BAY/ has been a prin¬ significant improvement in plant
largest manu¬
efficiency,
lowered
costs,
and
facturer of
cipal manufacturer of oil and coal
burners for both the United States higher margins of profit. Yet the
steam
gene¬
Navy and our merchant marine. company has not impoverished it¬
rating equipself by giving this quite substan¬
It aims to continue a leader in
in e ri t
in the
tial financial hostage to the fu¬
that business and in April of this
world.
tom
1
Carloadings
.The growth of
to
Production
Electric Output
State of Trade
net of
cox
Steel
The
already predicting a per share
are
19-7
Y
judging by the June 30 backlog of
$429 million. Net profits are ex¬
pected to reach an all-time high
this year, and to push the per
share figure from $2.74 (1956) to
past $3. This is plenty of cover¬
age for the present $1 dividend
and suggests that same might be
increased. For 1958 some analysts
Enterprise Economist
o
5
substantial
sales this year with a
Babcock and Wilcox:
Thursday, December
the
automotive
industry, bright "comebacks" by
Motors
General
Corp. and American Motors Corp., are highlighting
duction and sales, "Ward's Automotive
Reports" declared on
day last.
In¬
Fi i-
*
American Motors Corp. since October has been operating <•='
13,000 to 14,000-unit monthly production rate, its best level snice
early 1956, while General Motors Corp. in November £arneie
a
Continued on $age °
.
Number 5696
133
Volume
(2429)
The Commercial and Financial Chronicle
. . .
5
1957
thought
I
trustees
Observations
time goes
.
tion
in
called
^
time to talk-
Prudent-Man
the
i t h
\v
„
warning
*
5mi
.
vou
find
below
the
com¬
in
buy
jtlt? that you save by giviiig
York
This
about
public accounting profession is taken to task by Mr.
Spacek for using outmoded and inconsistent methods resulting
in profit overstatement which is said to have whetted the appe¬
tite of labor, speculators and investors and, in turn, to have
The
stocks. But this
permission
affirming
to
unlimited amounts of com¬
stocks, or rather, as in New
mon
significantly created inflation and stock market debacle. The
author reports on such practices as:
(1) failure to show .%;■
leasebacks as a long-range liability, and to depreciate property
on a current price-level basis;
(2) improper usage of L1F0,
OWVIWS
jiiwii
State,'over 35%'in
common
aVaoTrt^from whafvmi stocks- You miSht do wcI1 in
te
f
on
give
making trust provisions, to split
™
free bf tax, as we have
just spelled it out. 'f-: *■*■■■■
t. a xsaving—or at¬
your
wills
gift and estate rates of
tax; showing the amounts in each
ino
vital need for
realism
will
to
ol
common
away
between Government
one hand, and com¬
funds
your
Bonds
(3) legislation of needless and discriminatory ta* laws.
the profession to act upon the problem of price
inflation which it recognized ten years ago, but failed to do
and
the
on
Calls upon
stocks; and if the estate is
big enough, as part of your bond
portfolio, you should include Tax
mon
tempted taxsaving —ac¬
Comparative Rates of Tax
tivities.
In
(after exemptions)
estate
planning, first
let
,
midst
of
run
a
tween
incidentally are dealt in a cliffi-,
stock market fluctuations
h
o u t
500,000
145,700
109 275
the entire
fi¬
1,000,000
325,700
r o u
g
For
with.
exam¬
with
the
gift tax exclusion (that is, exemp¬
tion). The trust must provide that.
course,
the trust property
and the income
convenient p r o t e c t i o n against
by or for the
long-term monetary depreciation,
shall
be
expended
+t,„
:
benefit of the
ing the
psychological poten¬
those bound up with the
acquisition
of unaccus¬
of 21.
age
psychological and
procedural reasons, the transfer
of wealth to your inexperienced
with the installment, or
it,
"bite,"
technique.
guarded
call
I
as
and
Besides
the
emotional
aberrations for sudden
acquisition
reducing
medium.
there
advantages of tax
lower
to
the
removes
will
From
provides
permanent
up
multi-purpose
a
fund
for
a
in
-
,
wealth, this offers the
:
tunity to the tyro to experiment
in
A
investing operations tentatively
and
on
major
way
of
you may
getting his
her feet
or
wet under your
you
supervision while
around. Your leg¬
still
are
atee's activities, during your
time,
should
guidance,
your
You,
of
parent,
knowledgeable
the
should merely
life¬
control.
not
but
maintain the status
if and
availability for advice
when it is requested.
also entails
degrees
and
child
a
to
going
income
prescribed.
many
that
to
ago
any
have
should
which
have
different
those
from
pictures,
would
been,
much
produced
profit
rc-
lead
as our
us
In
was
to
current reports would
believe. It is
our
state
that has changed.
1956
better
and
to afford
seem
more
balanced
principal
ultimately
si0n for
protection against long-
grandchildren, provides'term inflation.
safeguard against later conl'isca-
double
in-
payable to vesting medium—including provi-
:
Exemption Via Death
'»
taxation which may
get
session, I
into the tax end of this
worth. The
from 45%
to 85%
of earnings rather than
30% to 65% as reported. The ex¬
50%
over
actual
its
dividends paid out were
cess
of
market
over
book
to
of in- tailed in making a second-genera-
number
any
,
.
„
„
But in the case of a stock
It can be tion trust to save one set of taxes.
bv
the
with
basis
is
the
market
time
of
the
donor's
money
the;'.
wife merely giving
formal assent.
Additionally,
individual
the
In other wordsrit would
into
til
Ttnliin aT f hn
business the value of the capital
take from 8 to 28 years to put
n
a
iMieinncc
market
a
said
stock
the
the
can
once
in
a
That
gift.
lifetime,
dividual
the
spouse can
above,
year, to
any
is,
to $60,000
up
—all of which is tax-free.
of
or
make a so-called
once-and-for-all
The in¬
give one-half
$3,000
is,
that
a
number of individ¬
uals, plus $30,000 once in a life¬
time—all tax-free.
Incidentally,
on
gift from, husband to wife
any
should
you
^Transcript
series
of
from
lectures
in that
inclined
feel
one
at
Social, Research,
the
New
of
a
New
York
current
School
City.
which was sufficient
but not today.
50
has failed to keep
with our economic system in
its perspective. No general stateri
4- V* 4
ment, of course, including this
one, is ever entirely
true. Accounting has, to a certain extent,
tried
to recognize 'certain
ecoAccounting
pace
i.
-
/*
n
v>
-w
factors
that have changed
not
to
Flexibility
Indispensable
Now, another major
want to
principle I
lay down for you is pro¬
bequest
avoidance
or
vision
your
Over
for
investing flexibility in
of
estate and trust: provisions.
the
years,
there
is
evcr-
growing proof of its desirability,
capital gains
portant
was
tho
at the
price
death.
the tax
on
Wc
for
older
profits.
In
other
words, for older people holding an
realize the
imponderables and
issue
investment which make it unwise
and
impossible to set
down any
a
large
I
was
^fn
investment
I know in
expert
.
arc
p
***
he has known
which
under
prepared. However, even he
l
Lr>«t/v
#1 nfay»'
could
not possibly have
deter¬
mined
the extent to which re¬
were
actual
earnings
on
gain, which of course everybody
until a couple
JOHN R.
death.
holesale Distribution
BOLAND & CO.
INCORPORATED
30
BROAD STREET, NFAV
YORK 4, N. Y.
BOwlinc Green 9-0292
of months ago, it is a considera-
I-tax by-waiting until
President in charge of
Dealer Relations and W
has had, at least up
tion whether they should
"
'
Trading Telephone
BO 9-3242
Even
page
pleased to announce that
has been elected Vice
the
overstated
results of operation.
Continued
' • J r *«
un-cashed
sell the
my own case when I first made a -stock, pay the tax and
get into
will, and in my earlier years, since something cheaper; or avoid the
rigid rules in advance.
cause
ELMER E. MYERS
accrued
along in years you will
predictability of events affecting
this" accounting
investor be¬
the conditions
accounting reports
I can't say that
has misled the astute
This
at death is an im¬
consideration
with
recognized in our
not
received
As you get
un-
are
financial reporting.
inheritance, its cost-
people having large accrued, but
unrealized,
lmncial reports generally, This is
thp effect of price-level changes
which
ported
by Mr. Spa„k
■
couple
porting
bookkeeper to
a
It was a concept of re¬
years ago
•
dividual*, $8,000 each.
husband's
owner.
an
values
already
discounted - future
earnings by periods of from 8 to
had
28 years.
Now, while I don't want to
,,
free
accountability by
nomic
living trust and in the male-
tax
owned by
few
calculation
a
On the other hand, there is great Usually it is the cost of a stock, 25th annual meeting of the National
Paperboard Association, New York City,
ing of gifts.
The husband and danger in your trying to foresee that is, the price paid at time pl No'v
12> 1957
wife, together, can annually give a generation ahead, as thus enpurchase, which is your tax base.
.
the
small and
family or individual, just a
people, or people who had a
close association with the finan¬
cial side of the business. This was
one
during this period, but it has
which showed that the recognized ' them
according
_
.
March of
made
were
nesses
of
busi¬
principle
proper
a
was
accounting years, ago when
_
ported to stockholders. Therefore,
conditions have
not changed as
tate when re-distributed by your just want to say one word about the
in direct heirs later on.
the capital gains tax provisions.
as
This
not
color. Yet, two
reasonable com¬
putations of the reported financial
positions of companies, adjusted
for what wasn't in the reports, but
insurance?"
procedure
tax advantages,
an.accounting of how it was spent.
Leonard Spacck
1
long enough everything would
years
spent—it is solely
the money was
s
,
,
a
excessively burden your gross es~
transtW
as
of mind
ask. Insurance should bq
discretion, mutual fund would
of
be definitely
can
trust" with
A
tory
Transfers
early
which
a
Tax Advantages of Early
This
s
trust bought for the protection it af- income reported for six different their importance in our system of
+u„crt
to
those ,.7Vl^
who nced (hn(
thal~~ types of companies following the finances and government responAnd
orthodox method of accounting, sibility
as they exist today. I
remember that a trust can have not for any investment attributes, overstated the real earnings by would say at least one important
flexibility. It may well make pro- Because
of
numerous
inherent from one-sixth to one-third. On over-all factor has been omitted
the basis of the real price-eai'n- from consideration. I believe this
visions for payments from prin- management
characteristics, inings ratio, the stock, by any fair has resulted in the public's being
cipal in cases of emergencies, with eluding operational expenses, the criterion, was selling at 25% to greatly , misled by corporate fi-
under varying
pursued
be
>
are
a
the
,.
legatee's
life
s
method, in many variations.
provide the medium for your
can
about
1 h
kept, our rose-colored glasses
we
much
What About Insurance?
"What
transferring
through
is
assets
your
it
And
scale.
reduced
a
Instrumentality
Trust
a
(•
'V
nc
1 d. 11 i
e
change
it
Portfolio,
Investment
u
rosy
on
Trustees,
getting into
of
way
and for all.
»!*»"./•,> ' Ci.'V
"
.
oppor¬
The
if
once
r i'
minor.
-
of
the
is
r
our
of us thought-—
primarily because we refused to
look at the facts. We thought that
solves the difficulty that
estate-planning
a
accounting does not concern itself
with the basic values for which
backscratching. The investing
company
considerations it
medium for building
'the
business trip/This
who goes on a
delays in investing,
between
on
of
as
the
Trustees for
expert
prevent
and
from
property
portfolio,
your
principles are based upon steward¬
ship aceounting-7-the same prin¬
ciples that; apply to an expense
report prepared by an employee
recent
gence
busi
things
For
common
accounting
of
influence
intelli¬
This is so, even whqre
are
bickering
brackets;
taxable estate.
donor's
the
safe¬
be
should
income
able
fhe
is in
d
p p e a r e
of
the
t
closed-end variety, is a useful
or
transferring the tax¬
reduction bv
both the
of
end
real
reports on our economy. Most of
our generally accepted accounting
the
by
w o r
investment company of the open-
This type
to the minor at 21.
Technique
child
stock
priii-
eipal not expended must be turned
of trust has the
or
the trust,
But
in stocks is, of
that they offer partial and
la(leiYlhat
the
the
accentu¬
reflection'
advantage
and also provide for growth.
before reach-
must be irrevocable and any
over
"Bite*'
~
minor
The
have
gloom that has
Stock Management
Common
minors, and qualify for the annual
later.
stressing, technical
and theoretical procedures but not
keeping our eye on and evaluating
months, which
1. believe is a
be made in trust for
may.
or
sooner
We irt'the accounting field
have
within
risks,: best security and free
of all worry. Confine your worry-;
ing 'to common" stocks!;* j1 '/
brought.;1 to; bear
days.
1 remendous
a
best
non¬
earnings
.labeled,
as
"growth•!',so far in the future
that
some ^realism
had, to
be
habit
been
things like that, then buy a com¬
mon
stock.
Your
Tax' Exempt
boiids should be confined to the
We were discounting
existent^;
the
ated
t
Gilts
30
These
ing on income. If you want to
worry about, or figure, income
which depends on toll roads and
11%.
this amount saves
last
experi¬
worth.
the
in
enced
bonds, that is, bonds depend-
uuc
approximately $100,000 or
gross estate the taxpayer
a tax advantage in disposing of his property by gift.
A
single individual with an estate
of $200,000 saves 30% through the
gift device; a married donor of
tomed wealth.
wife
o
secures
harbors
For
17!-
244,2i
•
of
more
mining of the parent's emotional
security; or perhaps his aversion
to- facing the subject of deathall
preventing the parent' from
acting in a logical, sensible way in
making plans for the disposal of
his estate.
And then the legatee
as
Cldt professional market, stick to
8eneral obligations, and not rcve-
At
by
tials,
the
on
cmpts. In your tax exempts, which
interferences
sudden
comment
15,525
t
a
a
parental authority with under¬
too.
necessitates
connection be¬
unrealistic profits and the
The situation today
Tax Ex-
on
49,275
e,
parents in transferring
money to children.
These may
take the form of a feared threat
to
word
65,700
r
adequate advance measures to be
taken
Exempts
Tax
on
another
Just
20,700 '
t h
d
n
ple, there are the serious psycho¬
logical
Advice
$5,250
anything about it, and to place accounting on a stewardship
basis to replace proprietorship accounting, i
'
.
100,000
e
psychological in¬
major factor
reckoned
be
Gift rax
$4,800
;/
.
250,000
i
fluences constitute a
to
(After Exemption)
$50,000
personal' foibles
world,
nancial
ytm,.utus
Exempts.
s
m
h
t h
,
Estate tax
to bear in
you
A. Wilfred May
Taxable
ask
me
on
Estate and Gifts
& Co., Chicago, III.
Managing Partner, Arthur Anderson
still leaves the need for provision
You
parative
the
By LEONARD SPACER*
so-
legisla-
*s heing adopted ever
invest in
to tax.
about estate planning and
financial problems, with
accompanying tax incidence;
ng
the
Under
advance.
new
.
„
as
widely, there is broadened
permission given to trustees to
direction, only one-half is subject
family
Unrealistic Profit Reporting
And the Stock Market
my
But
and you realize the
on
YOUR ESTATE AND INHERITANCE PROBLEMS* t*on'
more
will devote some
executives.
rules change, you also realize the
mistake in throwing away discre¬
By A. WILFRED MAY
I
on
to
rules for
of
kinds
and
lay
called
was
all
down
Teletype
NY 14487
32
The
Commercial and Financial
Chronicle
.
.
-Thursday, December
.
5, 195-
(2430)
is
Challenge to
the
is
battle
same
And
themselves.
describe
The
now
that
Changing Patterns in
in
underway
atomic power
new
industry.
Some
Pri irate
people, realizing that the
power to tax is the power to de¬
stroy, are willing and anxious to
use
this power against the busi¬
Enterprise
By SIDNEY J. WEINBERG*
Goldman, Sachs & Co., New York City
Senior Partner,
our own
abuse when
noting
servant,
i
socialists to destroy private enterprise. Condemns
perpetrated by management as well as labor, main-
.
taining that irresponsibility on the part of business will bring
the roof down on its head.
Strongly urges businessmen to
their government,
serve
of government
for neglect
No informed
today believes
that he can
pursue
his narrow
business objectives without regard
£or what is happening in the world
around
We
him.
that
companies
is drawn from
the
strength
the
of
as
nation
anti-social abuses.
structure
well
there
e n
shared
occurrences,
all
of us are
talism,
hurt
tive
must
to
all
help
the
bad
ple's
we
cure
Sidney J. Weinberg
When our way
life is attacked, we must rally
to the defense. The businessman,
like all other Americans, must ac¬
cept the full duties of citizenship.
This has always been
private
than
so
true, but
For
now.
enterprise
our
life, has
living in
very
dangerous times. Those Rus¬
sian
moons
that
have
been
spin¬
ning around the world night after
night, often out of sight but never
of
mind,
advance which
and
I
am
symbols
are
an
must surpass—•
we
sure
of
we
will.
What
is
ahead is not, I believe, a struggle
of war and destruction.
It is a
struggle between two
where
our
ways of life,
thoughtlessness
own
granted.
vived
and
Mr.
Krushchev, in his cups, has
said, "You capitalists, I will bury
you!"
He has said, cold sober, on
American television, "Your grand¬
children
will
all
be
Socialists."
More recently he said,
would be
war
''
I want to make this
fought
011
"The next
the Amer¬
out
productive
survive
past,
stronger and
more
it
and
over
not
automatically
future.
American
shown,
does
ever,
will
in the
The
in
sur¬
the
than
that
mean
people
tions
Not
on
an
the free
enterprise sys¬
change in the laws
affecting business is a step toward
Not every
socialism;
many have been neces¬
in
sary
and
We
must
the
public
interest.
distinguish
between
changes that are normal
those
evolutions
those
of
free
a
changes
society, and
which
tend
to
destroy the foundations of liberty.
Sometimes the attacks
are
obvious
he
Krushchev
has shown
that
is
usually right in his own
country, where might makes right.
But
about
this
He
wrong.
country,
underestimates
strength of democracy
dom.
in
We have
the
faith.
a
dignity of
of God.
he
is
the
free¬
and
We believe
the child
man,
And this faith makes the
difference.
As
to
the
private enterprise
system, it has provided its under¬
lying
strength
power
as
and
well,
its
staying
its
astonishingproductivity.
Even the dictator
grudgingly admitted that
American productivity won World
as
Stalin
War
IT.
lidve
Street.
50
these
years
50
in
years
Wall
I have
two world wars, several na¬
.seen
tional
and
spent
In
emergencies,
depressions
panics. Yet after all the crises
changes that have resulted
and the
from
these
upheavals,
•
The
defense
ciples of
our
of
the
prin¬
economic system is
inseparable from
the
whole
basic
the
defense
of
American
concept
of
liberty, and yet the greatest
dan¬
ger does not come from those who
attack the principles of private en¬
terprise, for their
ally a weak cause.
seated
peril
is
cause
in
A
is
more
the
basic¬
deep-
possibility
of weakness within the
system it¬
self. Any signs of narrow sell'ishand
ness
ness,
A
Plague
among the lead¬
business
world, will
weaken
the people's
faith in
the
steps
to
seen
tory of
correct
abuse, as we
times in the his¬
country. Some of their
many
our
correctives
ments,
with
are
but
too
so-called
eco¬
destroy
private
is what
our
nomic system is still a free
tic
have
the
we
sound
improve¬
much
tinkering
correctives
whole
could
system.
must guard
This
bols
of
is
just
the
irresponsibility
whetlier
any
trusted.
be
can
it
sym¬
that
It
is
is
true that
more
*
People's
Capitalism
the
We
government
active in many of our af-
who
have
actually
operation
private
Remarks by
ing
the
the
1957
Mr.
Public
Weinberg in accept¬
Service
Advertising Council at
of
the Council, New
Dinner
Pec.
2,
1957.
Award
the
from
Annual
York
City
our
native
prefer
socialists
government
of business rather than
enterprise.
between public and
tric power is a
The
struggle
private elec¬
struggle
socialist and capitalist
110
matter
how
the
between
convictions,
opponents
for
unnecessary
how important
course,
discuss
people
nance
to all of
are
us
businessman
Recently
the
at
McClellan Senate Committee hear¬
ings, some unusual labor practices
by a few important companies
very
disclosed, as well as, some
bad and criminal actions by
some
labor unions.
were
condoned.
Neither
before
Also
excessively high corporate salaries
bonuses
and
brought out
was
—
salaries and bonuses which really
recipients
gave the
little ad¬
very
ditional take-home pay
after taxes.
light of these incidents, is
it any wonder that politicians find
support for more controls over
corporate management when some
few companies show such a lack
of judgment and restraint? Being
In the
member
the
of
board
of
direc¬
who
than
those
fair
and
reasonable.
present ? place
in
the
is
this
of
omy
I
going
am
Detroit
as
the
duty of the business
leader to give some share of his
time and talent to the public serv¬
ice, both before and after
ment,
local
can
the
at
level.
most
is
also
one
satisfying experiences
know.
service
In
is
retire¬
national/state,
It
my
the
or
of
a
the
man
opinion, public
highest
form
of
time
and
I
have
served
bureaucrat
I
have
also
in
that
as
a
last
full-
Washington,
been
on
the
remarks
on
con¬
finally, I will
quick look at potential fu¬
a
ture markets.
many
civic committees in my home town
Rapid Changes
In
giving my views, I have 110
special formula to sell. My only
message
is this—the automobile
Scarsdale.
ments
do
not
the national
These
have
local
the
assign¬
scope
of
assignments, but they
Continued
on
page 10
second quarter.
which
for
through
have
data, 1948
only one year,
third-quarter sales sag
1956,
did
1952,
so
In the nine years
we
in
to follow the prewar pattern.
as
(3) In effect, the typical pattern
for
the
be
sales
year
now
seems
to
in
set
March, and from then
through to the introduction of
on
models
new
there
to
appears
be
major dip in sales. Even then,
there is 110 appreciable sag until
January.
no
It may be
premature to say that
April peak and the thirdquarter let-down have definitely
the
disappeared
for
good.
It
could
easily happen, for instance, that
exceptionally bad weather in the
first three months, combined with
unusually good weather in April,
could
create
single
return
a
and
April
an
that would
year
to
the
old
peak in a
look like
pattern.
large, however, it does
clear
that
long
the
By
seem
industry has gone
toward taking the sea¬
way
sonality out of its operations. This
brought benefits to just about
everyone
associated
with
the
has
business. That includes employees,
who have steadier work; dealers,
changing very
fast in Virtually every phase of who can get away from the feasttype of market they
its activity—and it will, of course, or-famine
once
knew; suppliers, who can
go right on changing. This means
production 011 a more
that all of us are going to have schedule
to be fast 011 our feet to adapt level year-'round basis; and you
our plans and tactics to
changing people in the financial commu¬
patterns
of
activity. But right nity, who find the demand for
along with the problems that are your resources and services rela¬
sure
to come with the
changes, tively consistent from season to
business
we
has
been
also look forward to
can
and
steady
the
size
overall
of
When
the
big
a
expansion
business
automobile
and
in
all
about
changing
trends
in
the
market, one of the
subjects they bring up most fre¬
quently concerns the existence of
the spring selling peak. Is it still
there
or
not? And if not,
why not?
Even
as recently as last
springpeople were still definitely
waiting for that big traditional
of
the
in the
men
least
some
most
1956
experienced
business attributed at
of the decline from the
1955 level of
activity to a late
spring. There is very strong evi¬
dence, however, to show that the
April peak—as well as the tradi¬
tional let-dawn in the third
quar¬
ter
:—
have been virtually elimi¬
*
nated.
seems
to
have
season.
In
greater
efficiency
the
of
it
short,
business
*
happened
result
did
not
end
one
other.
the
to
meant
has
from
•
It is worth mentioning
talk
m e n
that this
by
about
come
chance.
We
know
through
season
closed
use
was
of
car
fall
high¬
and
emphasis
the
quarter.
third
look
on
Anj'' way you
it, this is a great accom¬
at
plishment,
of.
proud
through an
selling in
and
months;
increased
be
and
if that
can be
something
we
one
Now
done
January
as
of the
the all-
and
streets
introductions from January to
the
can
achieved
development
through the switch of new-
ways;
car
it
that
the
all-season
maybe
about
that
sag
in
looks
job will have to be done
February.
and
It
by the marketers, if it's done at
all. We aren't making any prom¬
ises,
but
problem
I
assure
can
is
very
you
the
on
our
much
minds.
this:
Adding
(1) The April peak, which
consistent
feature
of
the
was
a
prewar
market, has virtually disappeared.
Our "studies show that in
the last
10
postwar years, 1948
through
1957
despite the
—
of
to
a
is
emphasize
me
few
a
automobile
them from
finance. And
sumer
What
citizenship.
Let
we
view. This will
of
some
we
headed.
discuss
to
see
point
include
take
I
way
where
we are
in
trends
business
this
better
know
stand and where
major
respective
our
In
of view.
all
has strengthened and tended
approximate the levels of the
ter
them from
see
some
the
i m p 0 r t a nt
sales in the third
concerns
the second quarter. But in
postwar years the third quar¬
the
April bulge to show. And in
Government Service
It
March.
second
below
econ¬
many
The High Obligation of
sales
higher
quarter. In the prewar years, the
third
quarter
sagged
definitely
automobile
be
April
has
to its
tomers,
must
of
The
(2)
which
appreciably
business
grown
its associated activities.
employees, and
its
stockholders.
These
plans
are
necessary modern tools of man¬
agement because they are a way
of
attracting' and keeping out¬
standing men. But all such plans
in
year
been
change
companies, I am a
strong believer in financial in¬
centives, such as stock options and
profit incentive plans for manage¬
ment, plans that are for the over¬
all good of the company, its cus¬
its
no
have
Our
another
Senate Committee the question of
is
fi¬
industry.
be:
can
success.
associated with the automobile
are
can
the public and can make it
point.
Devious Socialist Attacks
A
is, of
to
can
against.
enterprise system.
It
me
points
Corporate Abuse
irresponsibility in busi¬
the
failure into
we
Both Labor and
011
Sometimes
particularly
of
ers
integrity of the whole business
indicated, system. The public will take dras¬
As Charlie Wilson has
I
Danger From Within
~
around,
tors of several
Mr.
standing of financing by dealers in order to change business
>
country
and
the people will
in the econ¬
show no patience.
The people
omy
of the
have the power, at the market¬
world through
place and at the voting booth, to,
a
dynamic
bring any company to its knees, \
c o m b i n a t ion
This sobering fact is well appre¬
of volume pro¬
ciated in the managements of most
duction, vol¬
large corporations today. But the
ume
selling
danger here is that any irrespon¬
and
volume
sibility in a few high places will:
Byron J. Nichols
financing.
bring the roof down on all com¬ Proper financ¬
panies
large
and
small, even
ing gives us a chance to help keep
though most of them show a sense that combination in
good working
of integrity and public responsi¬
order. We can do so by reporting
bility.
on
conditions
and
problems as
weight
a
often they are not.
more
With¬
organiza¬
large-scale
much
weaker
defense
against aggression. Yet if any -of
these companies tries to throw its
have
distinctions.
-
much,
again, that
enterprise to
criticism of business is
attack
medium-priced lines. Heavy new demands upon financing is
found to require need for wholesale credit, and a better under-
tions, the United States would be
a second-rate power, with a much
lower standard of living and
a
doubt
make
capital.
of their size.
because
these
out
anger
us
by intensified selling of lower-priced models in virtually all
example: it is foolish
and dangerous to attempt to break
up the country's leading corpora¬
So opponents of private
Let
Mr. Nichols notes this is being countered
cars,
for
Another
enterprise rarely admit opposition
to it.
Instead, they claim to be
strengthening private enterprise
by regulating and taxing away its
vitality, distorting it with sub¬
sidies for particular
groups, and
erecting obstacles to its normal
operation and growth.
economy.
medium-priced
of the gov¬
responsibility
distributing
and
over
they prefer private
any
form of
a
state-controlled
and
ican continent."
we can never take
crises
severe
tem.
Krushchev in His Cups and Sober
Peo¬
a
Just because it has
come
enemy as the
passionate conviction of the Com¬
an
become
It is still capi¬
system of free, competi¬
a
enterprise.
munists.
much of
as
it has
widely
Capitalism.
every
be
can
as
this private enterprise system for
our
system,
whole democratic way of
been challenged. We are
out
that
evening is that
of
more
is true that
so
Chrysler official contends American public wants ever bigger
and plushier automobiles despite rising sales of small foreign
cars.
Commenting on current upgrading lower-priced cars into
-
proposal is sold to the
American people, it will be a ma¬
jor blow to our country's security
as well as its business system,
n
persistent
are
the
raising
of
system
The point
effects.
never
It
harmless ef-
profit system and
hands
the
into
ernment
the responsibilities of our
as
economic
anti-social
and
force
men pay
are
a
If this tax
It is also true that the benefits
whole.
a
W h
are
there
like
help
be to starve the
:
ownership
of
American industry has changed—
for the better—so that practically
everybody in the country is a part
owner of
industry, through insur¬
ance,
pensions, savings, invest¬
ment trusts, or stocks and bonds.
the strength of
our
whenever
to
Group Marketing
Chrysler Corporation, Detroit, Mich.
small business. The
real effect of this proposal would
fairs than it used to be, and will
continue to be increasingly active
the
have
learned
fort
of politics is to be governed by their inferiors.
man
to look
made
warning that the people get the kind
they deserve, and that the price good
By BYRON J. NICHOLS*
General Manager,
system. The proposal to in¬
troduce a systepi of graduated in¬
come
taxes
on
corporations
is
ness
'
of strategically devious efforts
Khrushchev's challenges, warns
by
public
and
banker
investment
Prominent
The Antomobile Maiket
diversity of
conditions, including Korea, con¬
trols, recession, and boom—there
*
A» address
American
ton,
D. C.
by Mr. Nichols before the
Finance
Conference,
Washing¬
Equipment
Another
taking
market
change that has been
place in the automobile
is the trend toward the
purchase of
cars
ing number of
other
trend
with an increas¬
power
premium
affects
the
assists and
features.
whole
This
business
profoundly. It affects in a very
important way the retail prices or.
90
Number 5696
186
Volume
.
The Commercial and Financial
.
.
(2431)
Chronicle
nological
mdnr
nn«nnai
opportunity that we as individuals
havP to pnntrihntp tn thpimnvm^
have
to contribute to the impiove-
ment of man's well-being.
time
In
we
may
help to
determine for
be
'This
tan
of
re-
nomenal expansion had to be financed primarily from savings—
by diverting part of the business
and personal income stream from
current spending into savings and
investment channels.
In the 12
postwar years which I previously
today is one of prog-
spur ,0i con)Petation 1S American
„
and
it
-ourone
mos*v
precious
assets,
which
no
directed
is
Estimates have
very
mentioned—1946 through 1957—•
almost one-third of the total flow
economy.
been
made— of savings—about $175 billion—•
rough estimates, for the early represented
the
from the willingness of free neo-
_>.'pje to
country,
save
and invest a part of
their earnings.
Let
course
us
torically
*
first his-
look at savings
and then to gauge some
SS ^
The Product of saving is by no
nM me?ns. ,e.xcluslve to the field ol
amounted to about $1,075 materialistic -productivity. It is
^iwli m0re than °nG trilll0n translatable as well into ail forms
of better living,
dollars.
A third of this total—about $375
billion—was invested in the period ul3 through 1929. The'thirties
:
creased tremendously in the past
another $125 billion.
decade, and non-farm ownership
has
increased,
by years.
almostLast
17%year,
in
just the
past four,
that we at the Treasury are neverthe beginning, in fact up unBut some measure of the treOne key - to f going to takfe any posifions which til" about 1850, muscle power of mendous expansion of our industhe success of are lnimicable to.«the. defense of
trial potential in the years since
our country as such defense is de- for almost two-thirds of the work World War II can be gained from
termined by:the people respon- ^one in the American economy, the fact that over half of our total
animals
nation, in
;;bur.'
i
-1
.
life, has been the willingness,a
ability of the Amerjcan p.eopib.,to
accept self-discipline and responsibility. ;. Our generation can be no
exception.
'
v
'
We
in-America
the alien
each
do
not
accept
philosophy which places
of power in
source
to
or
...
•„
-n.-x
J
XI
a
a dictator
state.
Here,
monolithic
-
generation grows
new
the knowledge
that'the
in
to
up
power
to act rests with our
millions of free individual citizens.
and
govern
.
Entails
freedom
Responsibilities
This is freedom—at
far end of
a
the scale from the regimented existence of a dictatorship. But with
xu
-X
__x
i
60% of the total dwelling units
hi
use were owner-occupied.
Th
~
....
.
unknowable period / of
time by a. strong .economy" i",
Our military and our economic.
over
an
Today
the
need
npfnnl
for
'
freedom
each
on
Higher costs and prices, to
~
1
'
*
fated
J
sure> have played a part. But
ourin these same 12 years, the physLtual ical volume of production went
of the up 65% and total civilian employ-
assets or marketable
liquid
"""V "JI"4"
inseparable.%The
Almost
all
of the
creased security for families and
Communist world would welcome productive work energy
individuals,
the neglect by us of either,•* .v; %: J.0ljntry comes from machines un- ment increased by about one
Savings mean opportunities for
wii if\ AliP'irl^
?
der the management and watchful Quarter.
bettei education. They provide
vvnats Aiieaa.
care of skilled people.
Yet even
Of this total investment of $575 for increased travel and for leisure
What are the prospects for our wph this substantially decreased billion, over $340 billion went time. As man learns to work more
economy remaining strong in the Dee^
for
actual
human
work into business plant and equipment efficiently, to utilize new and exmonths and years ahead? y
energy,
our
citizens are incom- and more than $45 billion went panding sources of energy, to creWe all spend a good deal of our parably better off in both working into improving our farms—more
f
hpupr m«rhinpc for -nrodnctime looking at the various items conditions and living standards farm structures, more mechanical 1
«a
which go into the plus and minus than
they were a century ago.
equipment, improved production
Continued on page 24
side of the ledger of our economic
health. It is generally agreed that "
SOI73e phases of our economy are
This announcement is not an offer to sell or a solicitation of an offer to buy these securities.
strength
are
,
.
heavy responsi-
go
bilities, resting;
1957.
humans"or be
muscle power of either
hQC hopn Hnsticnllv
S°ing through a period of readJustment. But we have made great
individually and on every group readjustments in our economy m
participating in' our national life.;-decent years without serious imIt rests upon businessmen, work- l3ac^ 011 oul
economy,
ers, farmers, investors, housewives
1 amu confident that today we
—and government. All of us must?: iav^^the basic ingredients tor a■
this
,___.___x^
_
B. Anderson
Robert
the
_
accounted
humans
and
The
offering is made only by the Prospectus.
of us"
one
$20,000,000
,
healthy and growing economy
vvblch can continue to provide not
secu^, security but an improving
lot of standard of living for future gen-
rise above the transient and trivial
to
follow
of
course
a
action
signed to provide necessary
rity asf well
all of
c,,
our
i
to better the
as
*
..
We
cannot
itself."
subscribe
Such
Such
com-
doctrine
a/doctrine
a
has its limitations-.
We must make
hard choices based
on
a
multitude
of complexities, none of which can
be pushed
aside or
considered
apart from the others.
There is much
•days
about
course
of
meeting its
such
things
these
as
Government
tIividua]s of
n1in_ ,
our
nation
ciisci.
use
r
' am
confident
Dated December
that
cise
that
discipline,
of
measure
assure
us
both
P, •ice 100.492% and accrued interest
a
Maintaining
strong and virile economy for
imponderable future.
Instinctively we know this: as
nation we have lived with the
the
a
Prospectus may be obtained in any State in which this announcement is circulatedfrom only
of the undersigned and other dealers as may lawfully offer these securities in such State.
The
tional welfare.
our
budget
balanced
a
So also is
expenditures
within
our
na-
keeping
reason-
able and prudent limits. We must
do everything we can to continue
to achieve
a
budgetary - balance
and
are
to
in
insure
order
'Remarks
fore
Annual
Council,
New
by
that 'expenditures
of
priority
Secretary
Dinner
York
which ushered in the pres-r
ent century seem almost as remote
in 1957 as the classic age of Greece
of
for our
Anderson
the
'
.
R. W.
BACHE &
F. S.
CO..
GREGORY
Both
1957.
Military
and
Economic
Necessary
In
our
tional
modern
tension
age
and
& CO.
YORK
STERN
MERLE-SMITH
FAHNESTOCK
HIRSCH
&
BROTHERS & CO.
IRA
& CO.
THE
CO.
HANSEATIC CORPORATION
&
CO.
SHEARSON, HAMMILL & CO.
& SONS
BACON, WHIPPLE & CO.
Dec-ember 4, 1957
of interna¬
rapid
tech-
&
REDPATH
AUCHINCLOSS, PARKER &
BALL, BURGE &. KRAUS
NEW
■
SPENCER TRASK
SMITHERS & CO.
H. HENTZ
basic reason
must—each of us—
'
DICK
STEARNS & CO.
PRESSPRICH & CO.
is the
why today we
exercise high responsibility?
It is this.
Advertising
City, Dec. 2,
be¬
and Rome.
What then
such
HALSEY, STUART & CO. INC.
BEAR,
years
importance to
1
strong and adequate defense and
responsibilities responsibilities of self-government
financing them. I believe we for nearly 200 years. We have met
•must be governed by sensible the
challenge of war and of an
flexibility. First, we must be real- uneasy peace. We have faced up
ists.
We must not operate from to the
problems of civil strife, of
pat or doctrinaire positions.
We economic insecurity, of technologmust judge our problems in the jCal
change and a host of others,
light of conditions as they exist. as they have developed.
Decisions will have to be based
At times, events have permitted
upon the best collective judgment Us to act slowly.
Mistakes could
that can be brought to boar upon be corrected from time to time,
our problems in
view of all the
But we are not living in such a
information available at the time period today. The relatively quiet
is of great
1,1957
prudence,-
and enlightened judg¬
ment which will
many
have to decide.
December 1, 1987
.
.•
'
this nation will continue to exer¬
•and
we
Bonds
rMQnn
P'V ,1 f t
the'
in
Series N 4M%, due
that both the Government and in-
a
discussion
our
First and Refunding Mortgage
..
_
I think times like these demand
T■
,
pletely to the cliche that "history
repeats
repeats
Virginia Electric and Power Company
erations of our people.
%
people
_
de-
demands
'u
5° t easy;1
demands-lmng
with facte as they
aie.
i
Increase ill Home Ownership
As a further result of personal
and World War II, together, added savings, home ownership has in-
^ sponsibility.
,<its4govern-
savings
P^nr of pilvate businesses and decisions to save ana invest which
mdlVldualS
111 tlllS COUlltry be- lie behind
thlS nptotal
Constitute
a
dnnintf with thp nprinH iii?t aftor hn«in
oftnrpp
niiv
pnnnnmic
the CivirWar
In the total soan Sower
measure of its importance to our
sions we make. • ; ^A'■:•"1 '^productive system and to our way
1' want to make it quite clear of life.
1
u
personal
ec011<3mY
canresults
duplicate.
But to yeays_of
the
grosshiKinPwa
capital investalone. The millions
of individual
match
the
of
ruthless,
'
nf
nri ®fp
™d Hf»pi?inn« tn
nnri invp«:t wlnVh
tho
of our economy, and
try .to be practical rind objective
the
truly is
age
our
every
a source
some
in the multitude of separate deci-
governed.
^
needs of
Now
enough money to set aside
part of it in savings. The
[ng
-
the future
,
a— ;
country
is
These figures on the growth of
during the past cen-4
area
in this tury, and in recent years, are often
*
-•
a.
■»
,
of investment taken more or less for granted.
our economy
Parar funds and most families are male- We tend to forget that this phe-
remark
state-controlled planning we must
'a
.CUnuOliea pidlliung, W<? mubl
put our hearts and souls into dement of the collective determma- veloping the full potential of our
tions of the executive departments free-economy.
and the Congress nor adhere to
Congress^ nor adhere to , A singular aspect of a competiabsolute ngidity. Ours is the.more.tive and dynamic economy results
which people
best
West.
and change.
e(?ge<
on5 ?+
-
in
They
Then
average family
income today is
Our competitive Well over $5,000.
system encourages innovation—a
A quick look at some of the
constant
seeking to find better figures on capital growth in this
techniques,-to use new processes, country points up clearly the vital
to probe new frontiers of knowl—
position of savings in our free
.
can
Our world
,
ress
; WV
many .&W1X.CXC-,
.genera-, Mt^i^Lut
difficult..j task
1
of using judgment
tions to come and reason. We must try to fathom
form
~
Great s
West.
framework of a sound economy,
m.mnt inHnlo'p in nrmrifip
But wp
we cannot indulge m piejUdg-
well
the
? !ue
r>
Peter the
about the
Europe.
were
seaboard
the world
from
set aside out
earnings along our Eastern
and helped finance the
Biey
won
Tint
our
"first
basically strong, but is also quick-
phrase
within
and
came
amounts here, of course, tell only
a small part of the story of imof hard- proved living conditions,
built from saving's.
largely
lion mechanism which is not only
dows open op
within
nnri
cfnnri
good
national
flourish side by
ly adaptable to each new scientific
•advance. We must keep our win-
but
Vwith flexibility, including prudent expenditure in order of
priorities and freedom from doctrinaire preconceptions. Main¬
tains strong defense depends on healthy economy.; States
capital formation is crucially important; and cites great' con¬
tribution of our recent rises in aggregate of savings, domestic
investment; and capital growth to the enormous expansion of
our free American economy.
Hails popularity of Savings
Bonds, particularly- in the small' denominations, as vitally
/
important in the Treasury's debt management task.
>,
see to
side. An adequate military posture
miist be backed up by a produc-
Secretary Anderson strongly endorses budget balancing,
ill histnrvr ic
we
economic
and
Secretary of the Treasury
penod in history is a majoi
basic
two
our
By HON. ROBERT B. ANDERSON*
This
.Lhis nprihH
must have Enormous Increase in Productive processes. A record $135 billion,
it that '
Machinery
approximately, went into residenstrengtns
military
Our productive machinery was tial construction—and
the dollar
change,
responsibility'to
the
Toward Budget Balancing
With Flexibility
7)
HAUPT & CO.
ILLINOIS
COMPANY
INCORPORATED
WM. E. POLLOCK
VAN
&
CO., INC.
ALSTYNE, NOEL & CO.
J. C. BRADFORD
&
CO.
8
Dealer-Broker Investment
Stocks
Recommendations & Literature
Tax
Bank ■&
;;'.y
\
\
,
—
Monjthly investment letter
Burnham and
—
Company, 15 Broad Street,;New York 5, N. Y.
.
„
•
.
Also avail¬
-
•
.
..
;
(
•
r
•;
-If
•
'
W. Woolworth
,
.•
.
is
Y.yy;:
Vyvy/v - v,.
>
■
a
report on Standard Brands, Die.
Current" inf dfmation
—
Yamaiehi Securities
Company of New York, Iiic.V 111 Broadway, New York 7,
New York.
y
;:j/yy: 1
.•
yvy
Beacort"—Nomura
61 Broadway, New York 6, N. Y.
:
Securities Co., Ltd.,
Also in the
same
issue
Stocks—Pamphlet—John C. Legg & Company,
Light Street, Baltimore 3, Md.. r
Defensive
a
discussion of Stocks for Income with
Strength—Harris, Upham & Co., 120 Broadway,
New York 5, N
Y.
—
Discussion
—
:::
New York
Hanseatic Corporation, 120 Broadway, New York 5, N. Y.
Over-the-Counter Index—Folder showing an up-to-date com¬
parison between the listed industrial stocks used in the DowJones
if you're feeling
Also available
and market performance over a 13-year period —:
National Quotation Bureau, Inc., 46 Front
Street, New York
Company
—
Analysis
—
Amott, Baker &
~
Louisiana Land & Exploration Co.—Memorandum—H. Hentz &
Co., 72 Wall Street, New York 5, N. Y.
Louisville
&
Nashville
&
Railroad
•.
,
Company—Report—Thomson
McKinnon, 11 Wall Street,. New York 5, N. Y.
-
J. Ray McDermott & Co., Inc.—Report—The Milwaukee Com¬
207
pany,
East Michigan
available is
report
a
Pioneer Natural Gas
on
Street,
Milwaukee
Wis.
2,
-
Collins Radio Company.
•
Co.—Memorandum—Rauscher, Pierce &
Polaroid
•
:
Corporation—Analysis—Dreyfus & Co., 50 Broadway,
:
:
New York 4, N. Y.
v;
Corporation
Analysis — Taylor, Rogers &
Tracy, Inc., 105 South La Salle Street, Chicago 3, 111,
'
—
Steel Company of Canada Ltd.—Review—James
Richardson &
s
Sons, 173 Portage Avenue, East, Winnipeg and Royal Bank
Also available are studies of
Canadian Nickel Stocks, Canadian Life Insurance
Companies,
Building, Toronto, Canada.
and Canadian Iron
Yuba Consolidated
Industry.
Industries, Inc.—Bulletin—De Witt Conklin
Organization, 120 Broadway, New York 5, N. Y.
—
Industrials—Discussion in current issue of "Market
Letter"—Hayden, Stone & Co., 25 Broad Street, New York 4,
Also in the same issue is a discussion of Investment
Speculation and several
"buy recommendations."
COMING
EVENTS
Corporation, Boston Building, Den¬
ver
2, Colo.
In
for
the
investor
and
business
^ifJiMivingyouwmt most:
vs.
Recommended Procedures in Writing Up Stock
Sales—Pamph¬
let—U. S. Stock Transfer
Securities Outlook
*rif you're feelmg queerltf)
.
vs.
N. Y.
*
Also'
Co., Mercantile Bank Building, Dallas 1, Tex;
4, N. Y.
Rails
very well
Standard Oil of California.
Company—Report—Peterson & Company, 3511
Main Street, Houston 2, Tex.
Averages and the 35 over-the-counter industrial stocks
used in the National Quotation Bureau
Averages, both as to
yield
on
Co. of New Mexico and Bausch & Lomb Optical Co.
Pubco Petroleum
Municipal Bonds for the Individual
Purcell & Co., 50
Lone Star Trust
are
Life Insurance
Market Review—-Wira
—
.
150 Broadway, New York 38, N. Y. Also in the
-same bulletin are brief analyses of American Tobacco Co.,
Safeway Stores, Inc., Pennroad Corporation, Public Service
discussions of the Shipbuilding and Gasochemical Industries.
22
Analysis
Co., Inc.,
Japan's International Accounts—Discussion in current issue of
"Nomura's Investors
—
Co., 1 Wall Street, New York 5, N. Y.
memorandum
a
ITE Circuit Breaker
1
l,v
—
Co.
Machinery & Chemical — Analysis — du Pont, Homsey &
Company, 31 Milk Street, Boston 9, Mass.
V
;
Investing in the Drug Industry —Analytical brochure — Har¬
ris, Upham & CoM 120 Broadway, New York 5, N. Y. Also
Japanese Stocks
Company.
Food
Kidder, Peabody & Co., 10 East 45th Street, New York 17,
:
Fink Products Corpora¬
,
Executive Mutual Fund Program for possible capital growth—
available is
Also in the
York 5, N. Y.
&
Federated Department Stores, Inc.—Memorandum—A. M. Kid¬
or
Cash Dividends Every Three Months up to 93 years—Pamphlet
—New York Stock Exchange, New York 5, N. Y.
•' vj.
N.
Lehn
Broadway, New York 4, N. Y.
■y
der &
'*'■
•
Hold—rList of suggestions—Bache & Co., 36 Wall
■Street,-New York 5, N. Y.- y
';
-
on
Champlin Oil & Refining
able is current Foreign Letter.
.
data
are
tion, Mississippi River Fuel Corp., Pure Oil Company and F.
Bonds—Discussion—Park, Ryan, Inc., 70 Pine
Street, New York 5, N. Y.
Buy, Sell
Company—Data—Oppenheimer, Vanden
Cyanamid
circular
Company,
Corp.
Broeck & Co., 120 Broadway, New
same
Also in the
Instruments, Inc., Union
Corn Products Refining
Paper Corp.,
Fansteel Metallurgical
American
Bull Market in
View
in market letter—McDon¬
Co., 120 Broadway, New York 5, N. Y.
letter are discussions of Texas
Camp
Bag
and
Hammill & Co.,
Street, New York 5, N. Y.
&
same
Stocks—Circular—Laird, Bissell & Meeds,
120 Broadway, New York 5, N. Y.
Burnham
.
New York 6, N. Y.
nell
Insurance
;
■
•
Air Reduction Company—Discussion
Inc., 1033 Thirtieth Street, N. W., Wash¬
ington 7, D. C.
./
per copy.
■■■■.
Laboratories—Bulletin—Joseph Faroll & Co., 29 Broad¬
">14 Wall
Atomic Development Fund's
participation in missiles and rockets—contains text of U. S.¬
British Joint statement on fusion and comments on Nuclear
Chicago and Harshaw Chemical Company—Atomic Develop¬
Fourth Avenue, New
Products Inc.—Memorandum—Shearson,
Air
3, 111.
Atomic Letter (No. 32)—Discusses
ment Securities Co.
25c
16, N. Y.
Lasser Tax
for Investors by the J. K.
Institute—American Visuals Corp., 460
way,
Salle Street, Chicago
Y.
x
Energy and Uranium—Report—Leason & Co. Inc., 39
South La
;
Saving Strategy
Abbott
Atomic
1957
suggestions—In current
"Gleanings"—Francis I. du Pont & Co., 1 Wall Street,
New York 5, N.
York
Thursday, December 5,
Christmas—Some package
for
issue of
It is understood that the firms mentioned will be pleased
'to send interested parties the following literature:
. .
.
Terminal Annex, Los
Box 2097,
Bank,
ity-First National
Angeles 54, Calif.
Chronicle
business conditions—Sedhr-
Southern California—Summary of
.
and Financial
The Commercial
(2432)
Investment
Field
executive—
Analysis—G. H. Walker & Co., 1 Wall Street, New York
5,
N. Y.
■
'
•;
,
1-6, 1957
Jec.
(Hollywood Beacfc,
Fla.)
Investment Bankers Association
Annual
Convention at Holly¬
Airline Traffic and Financial Data
Banks, Brokers, Dealers—
—Quarterly review—Air Trans¬
port
Association
110.7- Sixteenth
re
Space-Age" Stocks
of
America,
N. i W.,
Street,
Washington, D. C. (paper).
Good News for Stroke Victims
We position and trade
Elizabeth
.
Ogg
—
Dynamic Corp. Am. Pf d. Lithium Corp.
Aerovox Corp.
Eastern Ind.
Machlett Labs.
Public Affairs
Airborne Instr.
Elco Corp.
Mallinckrodt Chem.
Aircraft Radio
Electronic Assoc.
Metals & Controls
Electronic Spec.
Mid Western Instr.
Equipment
Manual
—
Pamphlet
—
Precision Equip¬
Co., 4411 D Ravenswood
Avenue, Chicago 40, 111. (paper).
ment
AMP, Inc.
Ampex Corp.
Where
and
When
sociation 23rd
winter
New York 16, N. Y. (paper) 25c.
Precision
dinner
annual
at
the
Southern
Club
of
April 23-25, 1958
(Houston, Tex.)
Group Investment Bank¬
ers
High Voltage Eng.
Perkin-Elmer
calendars
at the Shamrock Hotel.
Ilycon Mfg.
Radiation Inc.
Johnson Service
Sprague Elec.
Leeds & Northrup
Tracerlab
Collins Radio
Ling Electronics
Victoreen Instr.
Craig Systems
Ling Industries
Vitro Corp.
Baird-Atomic
Beryllium Corp.
Brush Beryllium
Burndy Corp.
Cramer Controls Liquidometer
Corp.
74
New
Trinity Place
HAnover 2-2400
York
Security Dealers Association
•
seasons
—?
Some Economic Problems of Pub¬
lic
Enterprises
in
India
Association
annual
meeting
Parmanand Prasad—H. E. Stcn-
New York 6, N. Y.
Teletypes NY 1-376-377-378
Kroese
N.
V., 38 Pieterskerkhof,
Leiden,
Holland
(cloth) f.14.50 (Dutch guilders).
Tax Saving Strategy for Investors
—J. K. Lasser Tax Institute—
American
Fourth
N.
Y.
prices
Visuals
Corp.,
460
Avenue, New
York
(paper)
(quantity
on
25c
request).
-
16,
•
^
have
thorough checkup, including
rV
a
a
chest x-ray for men
and
pelvic examination for
women,
year
...
each and every
no
matter how
well you may
feel.
June 9-12, 1958 (Canada)
Investment Dealers' Association
of Canada annual convention
at
Manoir
Richelieu, Murray Bay,
Quebec.
—
Vocaline
Troster, Singer & Co.
Members
harvest
20—University of Cali¬
fornia,
Agricultural
Publica¬
tions, 22 Giannin Hall, Berkeley
4, Calif.—$1.00.
l'ert
.
and
areas
manual
.
be cured if
cancers can
it's important for you to
a
x-
Fruit and Nut
'■
checkup yearly
,
Sheraton Hotel.
Orradio Ind.
Crops—Maps and
showing production
Chicago
annual Midwinter Dinner at the
California
a
detected in time. That's why
(Chicago, 111.)
Traders
Epsco, Inc.
Astron Corp.
,
Many
Jan. 27, 1958
Bond
have
mid¬
Hotel.
Texas
of
vi
Baltimore Security Traders As¬
—
Committee, 22 East 38th Street,
Advance Ind.
wood Beach Hotel.
Jan. 17,1958 (Baltimore* Md.)
Sept.
29-Oct.
3,
1958
(Colorado
Springs, Colo.)
National Security Traders Asso¬
ciation
Annual
Convention
at
the Broadmoor.
Nov. 2-5, 1959
(Boca Raton, Fla.)
National Security Traders Asso¬
ciation Annual Convention at
the Boca Raton
Club.
AMERICAN CANCER
SOCIETY
Number 5696
186
Volume
.
.
The Commercial and Financial Chronicle
.
(2433)
because of this
Nobody Seems lo
Want Preferred Stock
neglect of good quality preferred stocks at this time
mystifies Mr. ter Kuile who sees excellent opportunities and
advantages in such investments for those desiring to conserve
such
offer
to
excellent
in-
vestment
op-
•
class of
Mp
rity is
hardly worth
mentioning
and
most
|K
V
years
,
of
registered
amon-g
the
if
no
£erre d
clause in their Charter permit¬
ting
Even-
they
are
Curtis
to
elect
their
preferred
balance
stock
offers
the
between
tremes of common stock
bonds
a
selling
ex-
of
the
preferred
such
at
stocks
relatively
of proportion to the rates
legally charge to insure
So they have no money. It
can
is a sad state of affairs for the
preferred stocks.
Many of them
have a feature whereby 85% of
their dividend is
tax-exempt to
corporations.
er
are
high
An individual hold¬
does not qualify for this and
a
charitable institution pension fund
does not need it.
have
Corporate bonds
such feature.
Therefore,
there should be an excellent de¬
from
income
tax
industrial
accru¬
mand
for
stocks
and
industrial
those
of
If
lize
utility
com¬
ture.
But there is not, because the
most
probable
buyers
w
have
no
to invest.
money
to
preferred
overall
an
100
cover
times.
With
investor desires
an
his
income
and
to
stabi¬
conserve
his
monetary situation in
same
our
country
that day
on
clqsed at 83.69 which
has turned, out to be the low for
this year
After
so
far.
long decline in the bond
and preferred stock
markets, this
a
cut in the discount rate could well
mark
the
turn.
indications of
One
of
the first
change cam© with
the announcement of $1.5 billion
financing by the U. S. Treasury.
The municipal bond
market, the
corporate
preferred
a
bondr
market:
stock
market have all
and
the
capital, to greatly reduce the haz¬
ard
of possible future dividend
been firmer sincethe Federal Re¬
cuts
ture
still
and
retain
diversification
for
his
flexability,
and
marketability
it would seem
holdings,
serve
announcement and
of
those
be
can
markets
considered"
than at any
time in
far
a<
the fu¬
certainly
brighter
long while.
advisable at this time to consider
advantages now offered by good
quality preferred stocks of leadingcorporations.
cellent
There is also
opportunity
are
now
for
The
selling at substantial dis¬
Dow-ones
stands
and
low
The
range
average for 40
84.38.
The high
at
for
is
1957
for
91.09-83.69.
1956
99.44-
was
89.59
and
1955.
So
course
of the bond market for the
it
was
if
101.15-4)8.00
for
considers
the
one
In
capital
counts.
bonds
A. J. Stalker Partner
an ex¬
gains, since most preferred stocks
preferred
panies that have the 85% tax fea¬
12
mand for the service.
no
Kidder, Peabody
Alfred
J. Stalker, manager of
the dealer relations department of
Kidder, Peabody & Co., members
of the New York Stock
Exchange,
on
Jan. 1 will be admitted to part¬
nership in the firm. He will make
his
headquarters in the Los
Angeles office, 510 South
Spring
Street.
;
'
Predictions Made
past three years/the average now
Now that the bond and
pre¬
ferred stock market has been
slip¬
ping for so long, predictions con¬
stantly are heard of lower prices
higher yields to
to border
seems
why both
many
since
some
that
were
no
This
end.
the ridiculous,
on
of the very
buying
institutions
is
only 0.53 points above the low,
it is 16.77 points from the
high. As a result of contemplat¬
ing an evident slowdown in busi¬
but
carloadings
housingstarts, and a definite trend toward
lower net income figures for cor¬
ness,
Consolidated porations,
the
and
Federal
Reserve
approved
cut to 3% from 3Vz% in the dis¬
Edison 2%s of 1972 at 102 in 1947
Board
and Cincinnati Gas & Electric 4%
a
Nov.
on
15
last
yields today is, of course, tight preferred stock at 106 in
1946, count rate of four Federal Re¬
money. A second reason is that now will tell you that the bottom serve districts.
The
change in
so many persons believe that the of the market for such securities
policy, announced after the close
volatility
high grade bond stability. It
should ordinarily yield less than
stock
and
reason
of new automobiles
their repair bills has grown
and
Accounts for High Yields
and
common
of
of chronic failure
case
One important
(
The
certain
a
choice
own
to make dividend payments.
,
the
of
directors in
V. ter Kuile
ertibte,
they do not escape unless the con¬
version price is close to the mar¬
neat
holders
number
conv
ket.
by without making any
it, although it was
good business to buy non-cumula¬
tive preferred stocks or those with
are
p r e
go
being covered by a good margin.
That is why it is not generally
lows each day
stocks.
the
to restore
move
1957
new
was
company
Good
stocks will have
million dollars. They claim
a
them.
rations have been known to cut
off the preferred dividend and let
'
-
a good
Fourth of July or
Year's celebration can cost
all out
by Aug. 31, 1937.
arrears
that
they
On the other hand certain corpo-
s e c u
the
the
pedestrians.^ It has gotten
and
regular rate in 1936 and had paid
off
are
that the cost
1933, but re-established the
-ruary,
people
pay
dividends and
als.
how
working capital
interest,
preferred
public utilities this coverage can
safely be much less, say 2.5 times
or better, due to the constant de¬
them
quarterly
dividend from $1.75 to 50c in Feb-
portunities.
Trading
this
The
reduce
to
would
know
net
bilists running into each other and
New
dure may be offered with regard
United States Steel 7% prestock.
fire than
to
the
of
so
to
obliged
casualty
a
interesting
years
harassed by all of those automoover
capital, reduce hazard of future dividend cuts, and, yet, have
flexibility,, diversification, marketability, and opportunity for
capital gains. The author' accounts for occurrence of high
yields, and offers criteria to guide selection of preferred stock.
ferred
by having
bankruptcy.
/'The
The
Nobody, but nobody, wishes to
preferred stocks today, and
tbat may possibly be the best reason why preferred stocks appear
venture
ness
a
By CURTIS V. ter KUILE*
buy
"heavy smoking,"
With the thought that more money
may be rescued from a poor busi¬
9
has nowhere nearly been reached.
of
the
security
markets in
New
1
-
•
•
..
'-V
■
Goldman, Sachs & Co.
To Admit H. R.
Young
Goldman, Sachs & Co., 20 Broad
Street, New York City, members
of the New York Stock Exchange
on
Jan.
will
1
admit
Howard
R.
Young to partnership.
H. B. Shaine Branch
FT.
&
WAYNE, Ind.—H. B. Shaine
Co., Inc. have opened
an
office
is inflationary and they wish to They point out that Fourth Lib¬ York, came just in the nick of' at 3232 Eastbrook Drive, with
invest in growth stocks; oils, erty 4V4s sold at 98 3/32 in 1932 time for the average of 40 bonds Anson W. Smith as
representative.
metals and other things that might and they were tax exempt then
keep pace with inflation. The at that.
common
stocks can conceivably third reason for high preferred
One
famous
financier,
who
cut their dividend rate; if a high stock yields is that one of the
This is not
offering, of these debentures for sale, or an offer to buy, or a solicitation of an offer to
sometimes sits on park benches in
buy, any of such debentures. TJte offering is made only by the prospectus,
grade preferred stock does so, it principal class of customers for
Washington to watch the course of
not only ought to be ashamed of that type of security, namely the
economic and political
events, is
itself, but also has to make it up fire and casualty insurance corn- quoted as
corporation, because it is considerably safer, particularly when
equipped with a cumulative dividend.
Moreover, even the best
an
later
In
or
fact
face all
if
porations,
sorts
well
most
obliged
panies, have
trouble,
of
managed
sible.
as
to
the
have been too high. Fire losses
during the first half of 1957
amounted to $550,155,000, a record
cut
soon
as
pos-
high, and up 6.3% from the first
six
months of 1956.
Conditions
An example of this proce-
•
„
difference
.
,
.
in that industry
...
,
free money for
the purpose. Their business losses
preferred dividend, hasten to pay
off the
no
cor-
*The writer is a graduate mechanical
engineer, Cornell University. He has been
engaged in engineering and the investment business
for many years and is a
member of the Cornell Engineering Society and the New York Society of Secu¬
rity Analysts.
terrible and
are
.
reports
nnlv.
are
circulating
rrnmhpr
«AnQn„
that
nf
the
he attributes to his suc¬
is his having had the ability
and courage to purchase good se¬
curities when nobody seemed to
reason
cess
want
he figured
failures
than
is
not
much
figures
published
the top of
The
Aaa
Consumers Power
A
1st
Atch. Top.
BBB
Aaa
Adj. 4%
5% Pfd.
S. F.
"
"
1st
Bait. Gas & El.
A
•"
Aa
Current
Yield
2%%-. 1975"
$4.50 Pfd.
A
Market
11/29/57
.
—
1995
...
314%— 1990
Aaa
Cincinnati G & E
A
"
"
Aa
Aaa
"
"
General
A
"
Aa
Pacific
present
97
4.25%
4,60%
8414
3.25%
75
5.00%
9214
3.51%
19614
4.69%
—
1975
Pfd. "A"
314% 1979
.
414% 1986
10014
213/4
414 % Pfd.
1.22%
.89%
.35%
1.18%
4.48%
5 1 " %
spread
A
85
23/4%- 1974
Ref.
Philadelphia El.
96
4.68% Pfd.
.68%
A
Deb.
Sylvania Elec.
BB
Aa
"
i
"
-
Virginia
BB
A
$4.00
Ref.
"
Aaa
A
,
"
Aaa
A
"
Kansas City P &
"
Aa
$4.00 Pfd.
Atlantic Refg.
"
2s;%_ 1975
>
Deb. 4%%. 1977
"
L
"
Union Pacific RR.
93
4.30%
733/4
5.42%
92
4.20%
831/4
.
$5.00 Pfd.
Flintkote
BBB
Pfd.
$4.50 Pfd.
Elec.
"
1978
4%
Coll. 3%% 1971
Union Electric
BBB
Aa
"
"
_
Jo
5.09%
85
3.23%
101
4.95%
100
4.37%
84
4.76%
Deb. 314% 1979
93
3.49%
3.75% Pfd.
8114
4.59%
1st
2% %
—
1976
414 % Pfd.
Deb. 2%% 1976
83%
3.29%
92
4.89%
8i y2
3.52%
still
not
preferred
in
current
preferred
A
"
A
"
A
"
"
"
Pfd.
6%
__
—
1995
Pfd.
Cons. 5%__ 1994
Southern Ry.
BB
4%
Ref. 3%
Virginian Ry.
"
5%
Pfd.
*Moody rating for bonds; Fitch rating- for stocks.
77/s
5.07%
78%
3.81%
103/4
5.56%
105
i6y8
table
for
companies
an
stocks
yield
stocks
dealers in securities and itt which the prospectus may legally be distributed,
invest¬
is the
between
and
Blyth & Co., Inc.
a
illustrates
selected
and
shows
this
group
the
of
more
ferred
stock
instead
differential
of the bond.
varies
for
Stone & Webster Securities
A. C.
the
the
preferred
stock
in
the
case
of
Virginian
Railway and Dayton Power &
Light, down to 0.19% for Alumi¬
Co.
that
is
an
a
Sinking Fund
in most cases,
industrial preferred stock
good sinking fund set up
period and also to aid in its
Very
few
utility and practically no
railroad
preferred
stocks
have
sinking funds, but in most cases
the bond sinking funds serve to
1.60%
in
indirectly
the
preferred
holder through a steady reduction
the bonded debt.
The
over-all
cover
of
.85%
fixed
charges plus preferred dividends,
after tax, is an important indica¬
tion of the quality of a preferred
stock. Also a good preferred stock
will have
net
a
Alex. Brown & Sons
Dominick & Dominick
Laurence M. Marks & Co.
Burnham and Company
Kalman &
Riter& Co.
Swiss American Corporation
substantial amount of
working capital per share,
after deducting the debt. It is also
Incorporated
Irving Lundborg & Co.
Blunt Ellis & Simmons
Bateman, Eichler & Co.
Goodbody & Co.
McDonald & Company
The Milwaukee Company
William R. Staats & Co.
Brush, Slocumb & Co. Inc.
Lee W. Carroll & Co.
Chiles-Schutz Co.
Davis, Skaggs & Co.
Ellis, Holyoke & Company
Henry Herrman & Co.
J. J. B. Billiard & Son
Company of Omaha
Talmage & Co.
December 5, 1957,
Courts & Co.
Elworthy & Co.
Robinson-Ilumphrey Company, Inc.
Quail & Co., Inc.
McCormick & Co.
Shearson, Ila nun ill & Co.
|
Incorporated
The National
Schwabacher & Co.
Spencer Trask & Co.
Kirkpatrick-Pettis Company
J. M. Dain & Company
The
Clark, Dodge & Co.
First of Michigan Corporation
Piper, Jaffray & Hopwood
Wachob-Bender Corporation
G. II. Walker & Co.
Robert W. Baird & Co.,
Weeden & Co.
Cruttenden, Podesta & Co.
Company, Inc.
Newhard, Cook & Co.
F. S. Moseley & Co.
Ilallgarten & Co.
>
Incorporated
desirable,
stabilization.
Salomon Bros. St Ilutzler
Tucker, Anthony & R. L. Day
to retire the issue within a reason¬
market
Dick & Merle-Smith
Stern Brothers & Co.
Good
benefit
1.75%
Carl M. Loeb, Rhoades & Co.
Baker,Weeks&Co.
IIayden,^Stone & Co.
W. C. Langley & Co.
W. E. Button & Co.
Higginson Corporation
Dean Witter & Co.
of
Hemphill, Noyes & Co.
Incorp iratect
Hornblower & Weeks
Lee
White, Weld & Co.
A. G. Becker & Co.
Incorporated
1.75%
favor
Lehman Brothers
Smith, Barney & Co.
Corporation
Allyn and Company
Paine, Webber, Jackson & Curtis
1.10%
1.55%
Kidder, Peabody & Co.
& Co.
Incorporate!
public
.39%
Goldman, Sachs & Co.
Glore, Forgan & Co.
preferred stocks in the table from
in
The First Boston Corporation
Eastman Dillon, Union Securities & Co.
the
favorable yield that may often be
obtained
by choosing the pre¬
able
4.76%
5.56%
Copies of the prospectus may be obtained from any of the several under-1
writers only in states in which such underwriters are qualified to act as
jeopardize
A valuable
'
Aa
Price 100% and accrued interest
pre¬
Merrill Lynch, Pierce, Fenncr & Beane
have
1.72%
for
comparatively
Ilarrimnn Ripley
It
.89%
Due November 1, 1977
1, 1957
attached
1.63%
1.12%
Dated November
of
the
same
corporation
ranking immediately ahead. The
3.24%
4.0
a
bonds
This
1.75%
and
in
ment
num
Aaa
market
safety of principal.
point in considering
spread
.19%
4%% Sinking Fund Debentures
good profit,
thought to be
a
low level. It is
possible to obtain
is yields from 4.44% to 5.56% in pre-
certain
4.25%
4.44%
87
Ref.
BBB
,
Pfd.
$5.00 Pfd.
E.
Gas &
4.89%
41/8%-. 1987
Deb.
"
92
1st
3.75%
Motors
5.56%
4.00%
4%
1st 2%%
Dayton Pr. & Lt.
BBB
9
8214
3.75% Pfd.
1.60%
4.34%
81
100
414% 1982
Deb.
A
4.94%
9214
4y2% Pfd..
Aluminum Co.
3.34%
91
Company
the market.
higher
show
Difference
86
had
stocks is at
ferreds
Rating-*
he
and not at what he
hind-
Northern Natural Gas
them, and to sell them when
0niy leaSOn tne numper 01 DUS1- ferred
ness
$25,000,000
saying that the princi¬
pal
Crowell, Weedon & Co.
Estes & Company, Inc.
Mitchum, Jones & Templefon
The Ohio Company
Shuman, Agnew & Co.
Harold E. Wood 8c Company
J. Barth&Co.
Caldwell Phillips Co.
Pacific Northwest Company
Sutro & Co.
Woodard-Elwood & Company
10
The Commercial and Financial Chronicle
(2434)
.
.
Thursday, December
.
5
195-*
r/olu
I
■
.
_,
mOl'e
Tiends in
Corporate Giving
employment,
but
it
also example, there are cases which
that,
hiphlv
trained
rharitahlp
donations
for
that
highly
trained norper- lirvhnlrl
uphold charitable
donations
for
ill
1-v
-4 h
r\-P
ninlni
will
be required
and so the purpose",of maintaining the
the spending of millions of health of employees, maintaining
rvii
n
i-\
/-vl
ttr
sonnel
will
By GERHARD D. BLEICKEN
Said
than a half billion dollars was raised via
"5% charitable contribution" clause in¬
more
Revenue's
stead of the otherwise permitted
can
The economic and
hand
social
tion
Private
political con¬
last
other
hand,
an
r-i
private
chari-
t i
Our
s.
versmes
in¬
our
upon
e
fr
S.
Olds,
has
tovSAfiA A'
V*
rM
"Every
remote towns where the. corpora-
direct
tion has its place of business, and
a
cannot
erg
run
!'un
to ;,the
C0Unter
ever,
»hl*
able
1
p
Supporting General Charitable
of
o
V"\ A
4" V->
recognize in
now
no
ro
or
t
•.
ening the foundations upon which
rest free enterprise and the continued prosperity and progress of
the corporation itself,
Continued from
f<
on no
^onunuea from page 6
The
Challenge to
Private Enterprise
highly satisfying
are
and reward-
I
at this table
^^ZenUs^!
it's
a^ahfaWe^duSon"'
and vou
_et it
it the
lh_ hard
you get
hard
indirect bene-
lv a]wavB
•
voives
a
C
lilt I
y0^
ihelessf
dollar and cent
will support such action.
Tli
im
opportunity for the cor
poration to create in the public
good will for itself, while
strength-
ing.
^^
wnn
*
—
/mo
^tht^h'chSritcontributions
mav'have
the .A!-,??"?
contributions may
have the
can tell
share of . is often substantial
a
increasing!
ropard thic nr.+
° $
regard this not
merely
4/I AaJk
*7
W-O
another tax deduction,• but
ratheas
a
distinct advantage
an
come
consiuerauun, yet there
supporting consideration,
mere
,
legg deseiving
,the courts
though there is
Causes
No
managers will
to
to
romp
ThO
Vi rf
t
clergymen and school teachers important
,
business
tributions
iPaui,fl
more
is a
»
vnit^
anH''
serious nersonal
same
institutions
insmutmns
be-
manner,
of
the
the
vate medica' care and health,' cul-; is a clear example of the present
tural ^d'civic'org^niz^tiin of'the day outlook of the courts on this
citizenship and public subject.
The New Jersey
citizensmp
ana puDiic ouiUJ «.
L
r.g for our dem6-j upheld
the donation of a
communitv
community
court
r
large
I remember World. War II, when
T
*nessmen
had
job of recruiting
on
a
nrash
hasi?
busi-
tn
SfSSIw^ on a crash basis, to
mo.,
man
the:
source—the
wealth
_
people. The question,
there-development
fore, becomes simply whether we
_
can
tions of men's lives, the really terrlb}e decisions thai, men had to
survjval and pr0gress, and that as obligations of good citizenship in make m order to leave home and
t!Sin+8 °ur °wn dliT much attention must be paid ■ to'the same manner as individuals dev. buslne.ss Tor ..a government assigncrf\on>
°r
be taxed inaiscnmi" this as to economics and finance.^ A--,}; " Internal Revenue Code'
. ment were almost beyond belief,
2iately for them.
And it was a wonderful expenBut agide from the broad so_
There has always been a great, v■ The development of American ence to me how businessmen re-
Gerhard D. Bleicken
agrarian units
wish
in-
modern
the
Behind
State.
small
urban
tPrdfMwtdpnt
m
instnimpnt.nlitiPR
instrumentalities
rn'mp
come
self-sufficient
to
competition
itabl?
would,
evolved
o m
wnose
char
charitable
Other
American pat¬
tern
of
life
has
it
bur¬
creasing
den
r\
J^jtiS^e fcXe«Uon w^h l£>«T
"SAlf =
th
general charitable
causes..'which
placed
e v e
ri
upholding contributions to local
community chests. Corporate subscriptions to , charity have frecountry to the limit of its finan- quently been upheld , because of
cial
ability and legal authority, their
advertising value yto .the'
And unless it recognizes and meets corporation. ; The
common
law
its obligation, I do not believe it rule still is essentially that a coris properly projecting the- long- poration may make donations to
range interests of its stockholders, charjty only where it is demonits employees and its customers." stfated that a benefit flows to the
And
let
us
remember
that, as corporation beyond the genbral
Frank
W.
Abrams
stated, "The benefit which is enjoyed by other
long-term interests of sharehold- members of the community. How-
assistance, such an appeal would
be welcomed
by the politicians.
Acceptance of such aid by education, lor example, would ultimate-
hall
have,
the
on
p'hori
nnr
shall our cnanties turn for funds?
If they turn
to the
Federal Government for
g
century
Charity?
+v.on
lo .„unrn
whom, then,
legislan
State
or
m_
American
produced
d uri
the
of $2 billion
excess
years.
ditions stemming from the indus¬
trial revolution that have, on the
one
flow in
Author makes the reminder that we
expect further Federal encroachment unless private busi¬
ness assumes its generally recognized responsibility.
in recent
per year,
J
obligation to supnort the free, independent, privately endowed colleges
and
universities
of
this
general charitable causes and nongovernmental institutions of
higher learning is revealed by Mr. Bleicken who points out that
only little
Irving
American
paucity, and vital importance, of corporate giving to
Internal
iti-Mrt
dollars in research.
Secretary, John IlancocK Mutual i.ue insurance Company
The
porate
mpflns
means
centers
industrial
industrial
l evolution
standards
of
The
our
out
raised
contribute
to
chari
to
of
wealth to corporate hands, co'rpobusiness rations must assume the modern
entire
our
framework is essential to
ies
social
v,
-
Paul
ar,
„
.
but
living,
at
the
ree
.
Tilingto "earning
making
his
living. No longer were food and
clothing and the other necessities
of life produced at home. Instead,.
man earned money to provide the
The
life.
of
nation
nation
nowerful
powertui
rnn«:t
most
earth have also made
warks
mdividual
are
direct
a
become
to
result
of
costs
f/or?
of
our
American
nf
Q
system,
wnrthv'
npv9nnnpi nnfpntial thali
peisonnel potential than any.
i
t
th
oth
anv
llation
nation
.
at
time.
time
any
The
adversity,
happy union of political democracy
Because so few people
people May
today are and free
of political democracy
enterprise has let us
economically self-sufticient,
the
he select our national
times
m
of
Because' so"few
+.^c
^
fVlo
cn1o
tions existed for the sole
Internal Revenue Code
niirnncp
thp funds of tho
rornora-
nolaeit- ine tunas ot tne corpoia-
with
he V
In
government.
laps
T
with all the rules and conflict-of- I Uissi
"appro-
^
interest
d,
laws
adopted
since
that
u—
have
World
aa°Piea sm£e "ol
been
nem
War II, in+,
on
,
,,
...
eluding such, rules as that which
says you must sellyour., stock
holdings when
you
take
a govern-
assiefnmpnt.- .TTnHov
monf
general need be drae^t^-pretations of the conflict of
10W
in-
snmo
-
of
of
numher
number
the
the
states
states
s
vou
be
cannot
a
wenare
,,
01
or
civic
the
the
charities, particularly in
case of the aged, the sick, and the
unemployed.
b?al? d»Pos,ed
stratified «?opie-
shn
his
'The.
011 a Picnic in the country, "The wiinin ine cqipqrate pov
law d,Jes 4101 say that there are to £ta4ute®:toJ: ,ot? u
a
gi° " °
be no cakes and ale, but that there
societies of Europe and Asia, they
a.r? to oe no cakes and ale .except »«""• 8 ec ^
5 4 <;
Economic Interdependence and
demonstoM the Wue of such as are required for the bene- corporate power of donation both;
Charity
mrthSd
F^om
of the company.".
'
- , ,.as to purpose and amount
Our more abundant life has mdljs broad base and'from these
now seems clear that the
creased the life span and tne inmillions of Americans have come
Cites Justice Holmes
early, restrictive common law ru|e'
bv-the nrodupfs of
£ wheteei 19th Centurv Europelns m^th CMimylomiifaHmi
_
^r^XiUUons^ Se
is
very
valuable
to
man
any
econ
he
at. leaf
wa> s ge' exactly the
SO^roment
1
)1'0VG
irobl
to
serve ln g°vernment
1
heir
or
within the corporate power.
™
:
n<
legle
m
hi,«hanH
husband
ffnnH
good
a
t
ay
?conc
on
our
Yoi
;
.
...
+
aJe happy union
primary test seems to be whether £d
fconomicaliy self-sufficientIt
^^.
^Sffead'ers
leaders on tne
the ^S tSted W the gift.'contributes to the public notwithstanding
the trials and
seieci oui national
leacieis
welfare
betterment
to tribulations connected with
govnatkm' creates"vasV demands
m?st truly competitive basis, and. ^SadV^erTo take
charitable purposes. If so, ifo is-ernment service; I still believe it
55?^ nlrtYcuVaT fn
hav®
n—
f
.
he
expense
only 011 the authority of the aireC- terest laws, they could rule that
rhiritv under pertain
donations to cnarny
nonanons
cnariiy under
unaei certain
b
ieen
sary" relating to business
^l?es
power to make so-called corporate
t
do
he S
las
—^
meant
only "helpful". or
tions could be used only,for cor-;.meant «
donatio
to
4
of making profits for their stockholderB
Lib-, sible
was
Ilia]
liu?fndj;^v.wiu^uue w,cl
eraliried wherp. the word neces- some ways I cannot blame them
purpose
I8!??1?'
V* ability of a WOlthy
fhr.se r.i,rnn«.«'. priate.':
7
^ X ntpiv PZn gH porate purposes anH
and those purposes P1^-' rt. , . A'
P
,.
.
;^
rp«ardiPBB
nf
wmlth
Tt
-'his did n0^ include the making of
The legislatuies of the majority,
^
d t
thit 'the' P-enius of ^nations
to charity.
But even °{ ,our sta*es havq, through'
sAeemed t0
that the genius oi
d
tl
orthodox anoroarh
th(v utes, expressed their intent that
American life has been that we mlae}_ ine .<?^inodox a?pl2acf1?
•evtensive.'.^orborate eivins? is intra
±
more deoendent uuon society
uarmore
dependent upon society,
aepuicteni
socieiy, paipar
ticularly
tuition
o
r
and
more
tn
^
nnmplv
of
npnnlos
The
of peoples.
The
specialization of labor and the
great increase in urban popula-
which
law,,both at the Federal ponded to their country's needs,
for
to charities. When this question tax level and at the state level
Too many businessmen seem to
AmeHr^ was first considered by the courtk is Perhaps^the most signilican o feel nowadays that the best way
during the
19th
Century,
the «a,Fede^l ta>c courts had
o.preserve
ree enterpnse
orthodox view was that corpora- reached the point, even before the system is to have as little aspos(roughl>
™l>
on
intovrlo^ndont
interdependent
tion
in
"
c^^t/SSbuti^s^^statutory
thieatens one of the strongest bul-
on
the most
us
1®
ciease
ufo
of
factors that have made
very
thp
the
HQ
us
oLJta
comforts
onri
and
necessities
fas® /nk
t
ot
0
av
nighi
i
Uliai
Teat
they deserve. As the saying goes,
#een
of^lXn
the
p^Uy that g ^ pay for or e:
the neglect- of politics .,is to be
(a)
governed by their inferiors. In a
creasing number of our aged pop- our business leaders as well as our
irrnai
Thus, the early common law has
already , passed the point government of all the People, all
ulation has, in turn, thrown great
political and military and scientific rule was that whether a corpora- .^P' ln.the words 01
Holmef,has
an the
people — including business- ast A
nrivatp
burdens
nln fnrin haH
pnntpnt
mpn—mils'
upon
private
charity, a^"'spirltukr
leaders,"'and""'from
tion maAcoiitribute'to chTrity or old form had new content and has men—must, exercise their citizen-.; ;§f tl
Family
disintegration
resulting this population must come our not is
determined by what real «mved at that place where even ship.
from
the
economic
and
social
leaders" for the"future. The""staffs benefit "toe* corporation" receives
tjle old form is changed ■; Today,
Where does the leadership forp
pressures of our times has also for the American
sucn conirioution.
corporations for irom
from such
contribution. However,
nowever,
r
"
through
leglslahon
or judicial m- a
come_ from?
From
|
T
&
A.,
r
" democracy
—v
mrDvi
added to the burdens oi society.
i980 must come from American the
concept of corporate benefit terpretation,
the
law
ot
most
the
people; from the .people likeL
The depreciation of the dollar i^as
colleges. Is this not a direct and has broadened
to such a
a noint that.
*tates
relative
to
corporate
charltyou, assembled here tonight.
broadened
to
|
point
that
tho \raliip nt
PnHnwmpnTc
r
.
niirnpn<3
linnn
rnarirv
m
,,,,,,,,
i
.
s.
npw
•
^
anri
.—
.•
put
nnv
i
1
j.
-
*
•
■,
-
.
..
,
,
.
-
^
...
Too
American Rev- f
~ ~
vi"vi
oT^the Ihw" Said^Justice In this field, at least, we have in a olution (I looked this up, I didn't f Ctiil
Holmes in his classic volume The §Teat measure arrived at the place know it
before), the combined
Aids Business
Common Law* "The verv co'nsid- where the law views "all business population of Massachusetts,Penn- ^
Greater
orations whicli Judges most rarelv as affected with the public < in- sylvania, and Virginia was only
^
shelter
is
longer
no
charitable
support
generally
the
but
accepted
aim
of -free?
the
now
charitable
standard is that which will sustain
Education
B
t
th
w
« possibly more subtle, hiterests of American businessmen
cha itv mav be laid in nart Pi in education. The first is that the
political nromNors wdio hi ^he last American way of life must be fos^ !ered in American colleges. Colthe advantage of the noliticallv
that bave become merely
beholden
Charities
have
been pa}jtical instruments of the State
anxious to exDand their Ictivit^ Wl11 not strengthen American life.
whicrrt ^Un6 Ser h°
This ra^ne of the standard? of
fprofessionarj have
and
some
t:
IJiUitibblUIlcUS
nave
been
Deen
The
00.r
sey,
guilty of empire building.
~
Tn'io^
own-
+
+k?a
Pluate
charities
t, cost
the American
people roughly S6
mco
in the leading 1953 decision,
th,e. A- R Smith
Co.
^
a
r.HmP
bequests
Bv
todMduak
level
of
far
but
taxes
continually
the
ereat
hnlk
thi nSnt S
tncmtw
decreasing
witn
value
1
of
such
^
motion,
„
and
always^^ with
terest."
an
institutions
would
fa
^
o
evllArt
it
...511
l--.
1
mu
«ziil
been and will be shown in
11.-
H._
-
.
the case, the flow of corporate
funds into private charitable
causes
this
,
wouici
would
billion dollars
nave
have
hh.
per
exceeaea
exceeded
7
-
year
two
two
'
..
i
in recent
hooHpH
needed
in
children.
Where
seriously
^uuu
jlkji
years.
.
iijch,
me
luicii
ui
.
new
form, from the
have
grounds
been
to
half
billion
dollars
per
year,
trans- only
about one-fourth of
could have been realized.
lt°Lci!?r
-
A? our corporations
or
what
ton.
tiino
"
will
they
come
men
are
are
already
aheady
stand out from the
are
here.
beginning
td
gA MavJ
crowd.; Ma>
Others will
fully themselves known.
froin.,
young
mak
This is hov
ss»js»atratwtaTStftt! surer t <•.«« rr
as ssrat■
saa
S
S
arwssaa
wwa sar s arsy» i- —-y -re "SfJ
giving.
mlirf
production. This ened the rule, to meet
better
will
are needed, as long as the love Oij
Of
charitable
intnrn
new
use
be
made
of
the
n
thi
ltiey ale
dmeTl/r^P0^^llh5rheV 1
Keep your eyes open. Some
some
more
oul^
-
the times have been found for that the total of cuipuiaic
corporate cuiithem, and that they generally re-■ tributions to charities for these
sn
tooitcerve
ubirtnaoc
new
ek™
content,
°\
and at last a years has only slightly exceeded a
new reasons more fitted to
nnr
ssur
■
ion
i
Th<
to
J
iu prove
piuvc Mr.
ivn. K
^""7"cV»he
c
wrong, and to *keep
democra ^W^omi
r
^
mri
stvnner
for
our grandallve and strong for our giana
)rogi
neede<t
uecueu
The figures show, however,
book,
jf
,
to a syllogism, it will be found
that when ancient rules maintain
iaier,
way
turtt
iidb
later, themselves in the way
that
has
'
Jat-en theif continuance. Sec- which they
°n?-' 11
are to survive as a planted.
pLXJnooX^
fr
There were many who thought gje generation theie came
that the introduction of the "5% these three coiomes a loaS
charitable contribution" clause in immortals including; George Wasftr
the Internal Revenue Code would mgton, . Tiomas
*; Tames
be considered - as an invitation
ai^s'
^n'nH Benwhich would be fully accepted by Madison, John Hancock, and B
our corporations.
Had this been .lamin Franklin.
Great men are
:
n__:
...
j
1 100,000 people-less than the size
of Brooklyn today. Yet m a st
Closing the Gap
case,
n
nnrt
^
apology, are the secret root from
which the law draws all the juices
of life. I mean, of course, considerations of what is expedient for
the community concerned
and
as the law is administered by able
a^d experienced men, who know
Court of New Jer- too much to sacrifice good sense
which AI will
again icici
refer to
VVA" "sa.iii
iu
Ktnwi tw f,.PO
Kiii
people roughly $6 stated that free and vigorous non?i f:antributionsac- governmental institutions of learnhoif
niiiia.-.
riniin^
""o, are
—w. vital
ono-hiK
ZuL fnoJ?°leA
llln ^
to ""a
our ucuiuwfl^
democracy
rpmainrlP,
withdrawal of corporate au•
_
357
Number 5696
186
Volume
.
The Commercial and Financial Chronicle
.
.
gly
rapidly
r
as
their
the
:or-
Public Enemy Number
blic
5th-
One
of
"NIKE",
and Chairman of the North Atlantic Council
.
i
...
members'
Mr. Spaak
j
,
remind
to
need
not
do
I
.
,
,
with
you,
ible
A
.
•
usi-
,
ernments
lica-
.
ing. p 0.1 n
.
.
to
"politics
.
heads
coming
able
of
the
1
m
.
.
-
•
both
UUlll
to fail to rally to
lu the
mc
as
as
limited
llllUltu
in
HI
warfare,
as
because the
So
continues to face
us
;\
;lief.
"after
Second World
r
re-
llanped
'
"
* great
dcal
proposals
not
deterrent
Union'
with
threat
time
of
d i s
on
of the
purpose
way
prise f
pos-
a
)een
In
t-of-
111-
will
You
often
have
heard
me
ay that it is in the political and
iconomic sphere that we must
dock
-
in-
that we should
heglect the military build-up, and
shall have more to say about
his later. You will recall that in
f-in-
that
band
But
to
not
s
heir
say
report the Three Wise Men
ecommended that the members ot
and
ve
it
m
to
the Russians maintain this high
as
forces in
its
Uliance.
ment
-real
goes,
for
be
state
a
of sufficient
and readiness to disthe Kremlin from ad-
strength
courage
.••->.
NATO's strategy has from the
beginning been directed towards
the deterrence of war. We have
aimed at having our forces at a
strength sufficient to provide this
progress
glad
in
to
deterrence,
our
this
that
field
the strength
forces in Europe
both
ground
during the time of the disIrmament discussions in London
all
ast
(a)
visited the Supreme Allied Corn-
mand Atlantic and
by
an
array
of
which,
together
marked
fleets
difficult
power
the
ear-
for
penetrate the
will make
power
an
the
aggressor'
Atlantic
I
to
visited
|
olid
backing
(b)'
Too
during
audiiig
ast crisis,
vents very
Rev-
their
NATO
recent
letem
Middle
iviiuu
of
the
uie
^
the Council followed
closely. There was a
till and useful exchange of inbidn't
bined it'ormation and the broad outline of
3enn-!Ji
common
ot
only
e size
claim,
•esults
I do
policy suggested.
of
obtained
have
the
that
course,
been
yet
aeri'ect but
they are already suficient to prevent a repetition of
-vhat happened last year and to
sinfrom
of
Yash-
ssure
John
that the Middle East situa-
[ion will not
cause
a
new
crisis
fn the Atlantic Alliance.
Fames
Benn
_
j
am
has
contributed
pregervallon of
certain u wiU
striking
mightily
peace
c01ltfnue
and
to do
«y
Center where'in ndd/tinn
.
where m addition
Jaybr
ies up with the military problem
vhich I will touch on in a few
mutes. Close
cooperation here is
f the utmost
importance because
t is in this
sphere that Khrushchev
ow
tha
ove o
,
.-challenges
the
Western
,
EaropT
jn <modern-weapons
.
mo?| heartening
a
necessary
sigh't
-phis
was
and is
'ork
,
City.
Euro¬
countries have
immense progress in the
made
raw
pean
aircraft
of
facture
the
Boyd,
late
Rob¬
ert E. Pratt
as
President, had
served
Vice
as
and
ISC
of
1948
duri ng
that
time
was
in
charge
its
FHA
VA
'
a
Presi¬
-
dent
of
and
Axigusl Ihlefeld
mortgage
'-"vestments.
Federal
and
Loan
Home
the
with
Bank
Board
of
research
National
Housing
director
assistant
Agency
senior housing repre¬
as
sentative.
://'
V
V/.■
'
Mr. Ihlefeld, President of Sav¬
,
ings
Banks
Company,
Trust
manu¬
fnrees with
these weapons in the near future,
reeeived
.
? 5 yA
+
,
V.
received
mand at Colorado Springs and
vVe have completed
a large was shown the measures taken to
netuinrk- nnd ire
preserve the American Continent
communications network and aic from air attack.
.nmr-k
ThK is
iq also
,i,n what
wli-u
This
daily improving it.
;
,tnmaren"working to bring about in
we
Many of these projects were Europe.
paid for out of a . program
There is one area in which a
which we call "infrastructure"—a coordlbated effort now is vitally
program under which all the required. In their communique
NATO nations contribute a pro- President Eisenhower and Prime
portionate share to a common Minister Macmillan recognized
fund. This is necessary because it
would not be possible for some of .the need for early actioiji. I speak
the poorer countries " of Europe, of course, of cooperation in the
where many of these installations Fields of science and technology.
are located, themselves to pay for
When approaching cooperation in
the installations on their soil.
these fields there are three pe-
has also served
ident
has
strides.
further
I
be
and only
then
that
able to
will
we
the
single-minded
Soviet
in
awe
Union
with
then
compete .with
effort of the
the world
scientific gadgetry,
to
peting
among
of
dispersion
our
a
a
A. Latimer &
37 Wall
act
tors
and
as
themselves. Such
imposes an
general market securities
S. government,
in U.
dealers
and
revenue
municipal
bonds.
A.
J.
is
Latimer
the firm.
He
was
,
bring
defense., effort to
effectiveness will
our
its
mm is to combine our eftorts
towards the development of certm11 specific weapons, particu-
be
larly in the field of missiles, and
costly, both in terms of manpower
to provide nuclear power for our
forces in Europe. The President s
maximum
and money.
Qui-
air
'
warning system
is not
vv<_
ye^ completed and we
must J1WW
now
announcement
that he will seek
modification of the Atomic En¬
a
vv.
the
modernization
of
all
tribution
is
coming
along "as
There are blueprints now on
the
an
of¬
ficer of C. F. Childs and Company.
James A. Howe With
Salomon Bros., Hutzler
.
Salomon Bros. & Hutzler, 60
Street, New York
My message then to the
the United
States is:
people
of the New York Stock
announced
that
Active
James
Exchange,
A.
vestments of The Mutual
surance
has
Company
become
Life In¬
of New York,
associated
with
Trading Markets
PHILADELPHIA
BANK STOCKS
comparison of 12 largest
Philadelphia Banks
STROUD & COMPANY
INCORPORATED
PHILADELPHIA 9
NEW YORK
•
PITTSBURGH
•
AI.LENTOWN
•
ATLANTIC CITY
LANCASTER
Howe,
formerly director of industrial in¬
Maintained in all
Send for
Wall
City, members
firm.
full part."
ergy Act will do
t
of
President
formerly
,
/
at
underwriters and distribu¬
of
state,
On the other hand
whole.
our
offices
Street, New York City, to
confidence in your
play
Company, Inc.
with
formed
been
effort
"Have
faithful allies,
and they will readily share the
burden with you." To the people
of Europe I would say: "I have
found a steadfast loyalty here to
the Atlantic' Alliance, let us also
of
has
keep
pooling of our resources of men
materials would mean an im¬
relief to Western economy
as
Presi¬
its
Formed in New York
J.
financial burden on all
countries.
was
1942, to 1947.
J. A. Latimer & Go.
look¬
am
ing forward to the time when a
real community of scientists will
be established among the nations
of the Free World. We must rec¬
ognize
First Vice-Pres¬
as
and
modern
and
With the development
of EURATOM, European atomic
energy
developments can make
even
ISC
of
dent from
weapons.
a
step towards equipping
Fnrnnean- defence
„nmmnnip,pint1Q
bepin
..
materials.
mense
tnin.
much to inci ease
On repeated occasions he has NATO forces so that they will confidence on this scoie.
L a
nnqunced that the Communist have the nuclear capability which cer"tam i"ai I°r this purpose sat system will provide the people our military authorities .consider' i'act°ry anmngements can be mad .
7T~
essential. In these fields, our goals
The short-range and long-range
Jverseas
press
ciulv o^^merfca^New are clearlY set: the "'German., con- problems are much more difficult.
0ldd-
labora¬
higher learning,
and
tories
and
m-p
and the long-range. In the lmmediate period ahead, our P}0^"
tc|
s.
our
of
tions
Vorimm NATO enimtries;
^he Three Wise Men also urged to overlook the fact that a great
eco- deal remains yet to be done. And
jfomic sphere. We have made some we must realistically recognize
progress here and this essentially that what remains to be done to
young
hov
to
^ie closest cooperation in the
from?,
maki
fuel
m
rand-
ig
necessary
j
I
Sphere
icracy
own
its
officers and technicians from the
liods which must be considered,
*he immediate, the short-range
are
hchev
hold
enormous
Missile
report
this
progress- with
pride, but it does not permit us
Cooperation in Economic
are
has always
wasting their resources com¬
th
doubt its
at Continental Air Defense Corn-
like
been able to
and will unquestion¬
Europe
are
wer
t
in
their
Uitii
proposals
had the
piupusdis, thev
uiey iiciu
liic
j Adiu
vard
,
.
f
succeeds
can
America
that
question
countries at this critical time
v
From
Mr.
who
as
one¬
a
ern
No
forwardf
kept
that
think
not
will be
While there
of jjATO."
there are nearly 200 airfields, all
of them able to handle the fastest
•
naval
with
of Canada and
European naval
d
impressed
was
?"r Euiopean deiense forces with
Sub-Comnnttee
must
of
In
August, the Western membeis
the
o
Board.
,
.
you
be
leads
with its contribution in this field,
t. I
(b) By the end ol this year we
t
'lose touch with their allies in hope to have completed a fuel
jfArMSmrt
5 k
w
ninpiinp
wViieh' wfn
hrincf
the
foi !/;NATO so that when they put lor- pipeline, which will bung tne
h
izen-
the
to
want
n's
o
Chairman
prepare
I
as
able to handle jet aiicraft. Today,
(a)
ness-
our
carrying the threat of disaster.
It is not absurd that the West¬
1949, when NATO was
has founded there were five military
say
example.
oi
In a
I yam
to
people.
t i
pora
since
adapt
the strategic Air Command, which
is often referred to as the "sword
political. > consultation
on well as our strategic retaliatory
problems ot common concern and power. We have done much to
o-avwd edopting'-poUaes which achieve this. Let me cite for you
night affect other members of the some simple statistics
2,al-
y
im-
to
try
fields.
these
must
systems
street.
way
sive and this trip of mine through
brove
least
;o
should
Alliance
he
gov-
basic
Securi¬
That
Jiow strengthen the Alliance. This ventures.
rern-
be
and
our
the
cooperation
no
them
why the
is
||nemy number
diich
ist
this
Russians regard NATO as public level of armament, the North the United States has enlightened
one.
Atlantic Alliance must maintain me on many of these points. * I
|
been
This
world.
free
he
take
enter
young
But
j/ he West, a victory which is per- has in no way tipped the balance States is contributing to the comj laps not sufficiently recognized in of power in'their favor. As long mon effort is indeed very impres-
tiem,
will
now
encourage
we
get her.
Vlliance, to stop the expansion of
he Soviet imperialism in Europe!
lias been 100% fulfilled. This has
to
is
Institutional
Community by itself.
We will
He joined the corporation in 1944
only solve it if we solve it to-'
after
being associated with the
developing
a r m amen
it
men
of
ties Corporation and August Ihle¬
feld
has
been
elected
the
cor¬
we
emphasize that this is another
problem which cannot be solved
by one country of the Atlantic
with modern weapons: 1 our guard and must have the
would like here to say that the weapons to repel any attack.
launching of their satellite and
their / success in producing the
Impressive U. S. Strength
great bloodless victory for intercontinental
ballistic missile
The strength which the United
The
tolerate.
lot
leds.
!T»biiiiierl
fields
to
to
on
these
Soviet
a
people
educational
unU.M-
a
But
age.
Ten to twenty
as
now
Moreover,
him
does
much
foi'
can
Clifford C. Boyd has been named
President
had an active career in bank op¬
is why I do;, not believe strongly-favor those proposals and ably continue to do so. I need noterations, supervision and manage¬
remind this audience of the men
that the Russians
are
system- hope sincerely that the time will
has
produced — ment covering nearly 40 years. He
atieally planning a Third World come when real progress in this which Europe
joined the L'ust company in 1933
/War. But, on the other hand, they field will be made. But until the men like Einstein, Bohr, Fermi,
Penney and Teller. Beyond these as Executive Vice-President and
are not only maintaining immense Soviet Union is willing to accept
forces in being, but are equipping realistic controls, we must be on Europe has contributed institu¬ was elected President in 1938. He
Y
Yar, the repetition of which tne
ree
world could not and would
>eri-
\V:ir
Soviet
^■£° -.soviet. Wai
t - of
space
these
in
as
later
This
and
cillCl
aggression
of
who
education which will enable them
to make
speak of the need for
j do
engineers
from now, our need for
young
emphasize that when I
me
the
must
we
nnv
pay.
=;Let
with
twice
an
our
ahead
in the universities in the
trained
fjjct such heavy destruction on the
enemy,j
LULIllj
jjmited
i
drawn
Atlantic
years;
gov¬
establish
to
Boyd, Ihlefeld Named
By Instil, Sees. Corp.
We
Community
development of men who
deal
December,
posture to the desired level
the
stupid
the end of the
Spaak
Henri
Paul
ign-
n
be
grand-parents^ould have been so realize that
in
in
international
and
5
Defensive
engineer.
stage where
and
11
our
their inventions opera¬
We
need
an
immediate
program
even fuller plan for the coordina¬
tion of our military effort so that
lion 01 our military
ettort so that
we
maybring
our
defensive
-
,
„.
the
of
this
shall
we
so-called capitalist sys-
t,,the real turn-
ter-
i
make
The,^-saying this, and I believe he is, it whose military magnitude is in"coup .^d'etat" Js-not logical,to conclude that the creasing- daily. Last summer the
of Prague was^. Russians want war.. .
-Lv^^rth Atlantic Council spent a
rv
and
The
■
can
in Prague.
man
p
and
during
which
or
must !look further.
hope that
my
discussions
Europe, cul— banner of communism yyhen it
minating in must
have
been
evidentthat
the communist * communism represented the fu"coup
d>Qtat":>ture." If Khrushchev is sincere in
:
hen
e,
.
sion
expansion
inam-
e
•
y
S30 Viet
impe r i all at
by
c an
t-
is
for
a
have
scientists
tional.
Posture
It
1
otherLday on ,American
TVthat:
501 years, Americans
j.
»
would ask themselves how their
said
situa-
created
tion
..
sar-
m
the
of
ion,
.
inventors
entire
Satisfactory
a
scientist
reached
the
defensive alliance
a
:er-
:1
have
that .the Atlantic Alliance tern. I think we must believe that ,s essential because a deterrent is
born out he is speaking sincerely when he;; onjy effective when you can in-
pore
s
single
as
"HERCULES"
the
Toward
higher standard of living
a
but I feel I must emphasize once';than the
gn-
.
soon
as
the
V
of greater
military coordination. Cites present strength, as importantly
contributed to by the United States. Doubts Russians are
systematically planning a Third World jWar. ; ^
,
,;,V-
ird-
to
"MATADOR."
the
High NATO official reports great progress made in
cooperation in; economic and political spheres.
anticipates December meeting's accomplishment
line
NATO
boards,
universities have not developed a
that
us
returned
be
with such modern weapons as the
Atlantic Treaty Organization,
Secretary General of the North
on-
will
drawing
French
the
assured
have
forces
they
can be released from Algeria; and
thanks to American aid, European
forces are already being supplied
By HIS EXCELLENCY PAUL IIENRI SPAAK*
uch
possible;
as
•authorities
The Atlantic Alliance—Russia's
her
im-
3
(2435)
the
12
Chronicle
The Commercial and Financial
(2436)
,
.
Thursday, December 5,
1957
.
*,
less they have some idea of where
Ending the Discount Imbroglio
In Housing Industry
f
FHA
head
Federal
advocates
ing,
that if home ownership costs become
that
word.
not.
of
mortgage lendthat seems to be
We
I
discounts
FHA. It is
the
doing
Norman P. Mas,
.»i
create
ful
as
possible in established
financing practices. That's why I
want to discuss the problem with
you and try to work out a solution, so that as
long^as we have
to live: with discount controls-I
hope it won t be long-we can all
work together.
just said, we don't want to
the
market;
but
home
financing practices vary so much
from
one
and
another
to
area
ampng lenders in a specific
even
that,
—
matter how hard
equitable and rca-
sonable, FHA limitations 011 discounts can't help being in some
degree
disruptive influence.
a
chief
trouble
t^t
*®,?(*ers
FHA. discount
a
accept
as sat-
ligations
the
be
highest
grade
mortgages, but they believe higher
rates should be permitted on less
desirable mortgages.
lsfactory
for
are
-
other
them;
on
all in
category
one
as
In the
early part of this
study of the
a
faults in
where
year we
causes
insured home mortgages
had been transferred
We found that
resulted
from
could
vvlien
the
half
over
conditions
have
not
loans
been
that
foreseen
insured—
were
loss
or
of
income.
out of dissatisfac-
grew
ti0ll
wjtu £he property or
neighborhood, and only 3%
^urre(j
ta^en
because
on
h
the
T.r
.
„
buy
with
.
buyers had
mortgage obligations too
dl
.
„
national
ho?*1 lj*e factory in a sealed
carton.
You know you are sale in
?«?«
through a
sss
of tests to meet
series
high standards, and the manufac-
Every
that the
mortgage
FHA
insures has been tested for qual-
ity.
The
find
requires
law
the
transaction
that
to
be
we
eco-
to indicate that dis-
ount limitations
■
t too badl
j
are
not
ihe j
September applications
ling
about
10%
working
t
t
|
were run-
above
July for
as a whole.
Forty-nine
^ |jie 75 insuring
insuring offices have re¬
na|}on
S™
£
on
Aua
5
In 21
of
came ellettlve on Aug. 5. In 21 of
25%
increase
or more,
between
amounted to
in another 15, it
was
the country,
across
devised
ever
the
for
The property must meet
standards. We make
appraisal
which
an
an
We
ences.
check
the
buyer's
credit, his income and other
sources,
out his
gage.
and
willing
to
even
have
a
record to prove that our
a
the
as
though the diswere
in general
At the
basis for
been
tried
con¬
before
tion
now
There
same
judgment,
discounts
when
will
from the market
disappear
altogether. There
have been Congressional hearings
and
them.
in
United
The
hearings
of exorbitant
some
editorials
made
But
us
be-
financing.
'
up
to
'
$45
have
cases
discounts.
public
do
They
and
even
understand
not
complicating
are
mortgage lending, which
is
com¬
that "isolationism" is dead in
ist" states?
Scientists
disagree
Sputnik
will
that that might be
Oil the Other hand it's
picture builders putting
.
„
one
of the last
so
mean
remaining "isolation¬
question has got the politicians baffled.
the elder statesman, Senator Walter.F. George of
year,
circling
c\o
agree
time—another week, a
the
on
evitable
with
up
of
eve
to Herman Talmadge.
explanation
accepted
statesmanship
world
the
primary for reelection, bowed to the in¬
a
and gave way
generally
ander F.
Wiley,
Vandenburg,
tion.
been
Georgia
the
In
same
was
fed
year,
the
Senator Alex¬
But Wiley defied the or¬
to be world minded.
both in the primary and the November elec¬
won
Wisconsin
the
So
had
stuff.
former "isolationist" who, like the late Arthur
a
came
ganization and
A world statesman,
that
was
of Wisconsin repudiated
Republican organization
represented
on
to
voters
or
session
have
not
were
"isolationist"
as
as
they
the organization thought them to be.
as
Congress
this
sentiment
public
year
"world-mindedness"
against
turned
The Congress severely cut military ex¬
business.
nobody's
Senator
penditures.
of
definitely
It ripped into proposed foreign aid appropriations
part.
our
like
the
in
seemed
how
about
keep
the earth, .but they
The
Does this
had
Jenner
every
think he was
to
reason
riding with the tide.
plicated enough without them.
long
It has long been his
of his state.,Jl(.,, ;
the
throughout
that
or
year—it
a
Sputnik and the tide has apparently again changed.
Comes the
The President speaks of our not being
at
sacrifice
the
national
of
slaves to a balanced budget
Spending is to be on
security';" The
month,
disintegrate,
will
We
Discount
controls,
to
come
Capehart,
early end.
an
good ef¬
some
to
clear
country. Jt has helped
the
is
not
an¬
other pun—of some illusions about
tant
More impor¬
us.
anything
see
the
it
has
necessity
for
else,
his
thing
eternally keeping at work.
same
the
way,
if
it
helps
of
to
present
bring about
mortgage
can
Yes,
we
a
lending
easily lose sight of teasic
siderations.
we
tended
to
lose
get
so
high that they
are
sight
If costs
out
of
his reach, it will be disastrous not
only for him but for
whole
you
lenders
and keep
home ownership costs within
son.
The
alternative
return
a
upon as an
un¬
from
"isolationist"
his record of supporting
not setting too
it
that
was
well
the only
behind
trip
a
the Iron
to
He didn't particu¬
any more.
It
with
He preferred "realist."
lesson to Jenner that last year,
foreign aid, Capehart
was
reelected by a
majority of 212,000, the largest he has ever received.
George D. B, Bonbrighi Dayton Krigney Co.
Boston Exch. Member
ROCHESTER, N. Y.—George D.
B.
Bonbright & Co., Powers Build¬
ing,
members
Stock
rea¬
might be
a
of
Exchange,
the
on
resort to direct Government loans.
York
New
Jan.
1
will
admit Bruce B. Bates to partner¬
—
Dayton
Incorporated,
has acquired a
Mass.
BOSTON,
Co.
Haigney
&
Federal
Street,
membership in
the Boston
Stock
Exchange.
ship.
'
Howard Millett Now
.
With J. F. Lynam
With F. L. Putnam
(Special to The Financial
(Special to The Financial Chronicle)
ST.
LOUIS,
Mo.
—
Robert
E.
Quest has been added to the staff
of( J.
F.
Lynam
&
Co.,
....
for applications
in¬
Some of his most
was
insisted
he
recently
should perhaps have been a
get together—you, the
—
but
larly like the term "internationalist."
housing industry
the building industry
Indiania'ns
con¬
of the central person in the trans¬
action—the home buyer?
considered by
But he has for
we
con¬
must be real¬
istic, but in going along with
haven't
He came up as
so
in possession of the facts could do.
Following
discount situation may be of some
use
still
probably
been voting for foreign aid.
fellow
a man
be looked
the
is
Curtain, Capehart made it perfectly clear that he didn't want
May Prove Useful
In
and
timate friends have advised him that this
with
than
made ms
himself
knowledgeable of the editors and pundits.
several years
Senator
all of this or not. We are inclined to think it was
than political foresight on his part.
courage
the less
air—that
the Russians and
know whether Jenner's senior colleague,
not
saw
"isolationist"
an
fects in this
do
hope, will
we
FHA, and tlie others who make up
apiece
Carlisle Bargeron
regardless of this, he obviously found the outlook not
But
general
Let's
hard
-
who think he will resign be¬
and let the present Indiana
many
good for his reelection to the Senate next year.
States.
builders
some
These
disclosures
the
discounts
too.
can. see
There is considerable specula¬
just what is up, his sleeve.
ambition to be Governor
Last
hope the time will soon come
TTbl rot be completed for lack of
1
State
fore his term is up
the
the
the
his
and
accomplishing their avowed
and
of
in
to
as
are
'
\
out
been
has
Senator
unsuccess¬
purpose."
transactions
many
up the sponge. '
surprise, if not a
politicians generally.
taking stock.
stantly rising home financing costs
application volume is not
thet'but
Convention, Dallas, Tex.,
our
sound
iau.se
judgment,,
an",er* Association of Amcr-
44th Annual
Nov. 7,1957.
ica,
that
carry
♦An Address by Mr. Mason before
above
time, mortgage bankers tell
re-
"20-year
is
not too restrictive.
obligation under the mortWe
This
count limitations
and the likelihood of his
able
total.
This looks
dbjec-
includes
the
average for the year, of 16%.
evaluation of neighborhood influ-
being
have
private
Such
By following current trends,
of
purpose.
adminis¬
interfere
finance system.
and 25%. The in- reappraisal
creases appear in offices scattered practices.
accurate
Our risk rating
be
and
may
the operation of the
10
system is the most thorough and
tive
they
intrude into
iSions it
effective
Construction started under FHA
inspection in September was 19%
nomically sound.
'
seems
throw
to
political fences and run for Governor in 1960.
controls, however
our
0ffjces
lhe 49> the
turer stands back of it.
The
more
,
decides
he
shock to
.
have been foynd to be
also
'if'!
Ke,"fs °" Disc»u»"»S
What we hear from
field
=
appliance from a firm
leputation.
It
an
a
comes
unsound.
was
Sputnik has had
Well, to me a mortgage insured
by the FHA is a highly standaidxzed
commodity
that
can
be
bought In much the same Way as
sudden
oc-
the
for them to h
the late Sen- '?<
as
McCarthy, he is one of the few re¬
maining "isolationists" in the Senate. He has
been a consistent foe of foreign aid. All of a
His announcement came as a
all
and
next
Governor, Harold Handley, come to the Senate to finish his term,
trols
in
controversial
as
1946
again
up
According to this speculation, Jenner will bide his time, mend his
home
I
been
In signing
with
1
Uniform Rating
Almost
have
unexpired
Joe
im¬
above
would
He
to an
terms in
full
to
'
Housing Act of 1957 last July,
tered,
death, illness, marital difficulties,
only 2%
and
and
1944
not
appreciated the fact that the
he said:
of de¬
title
fha.
did
the problems that
saw
involving
is confirmed by
experience.
Our loss ratio
made
away
these limitations
involved
principle
mortgages
opinion
curtailment
to
seems
properly rated
very
these
lending
„mounts to only 6/100 of 1% of
j-j
home mortgage insurance written.
;0
no
try to be
care-
value is concerned,
This
As I
disrupt
mortgage
different prices
hinking
FHA
He
be
ful in
the
on
set
as
he
Eisenhower
see
mortgages- flexibly
aut fha mortgages to my way of
for
posed.
would
ator
do
Eisenhower's Reaction
"Discount
as
in
term
elected
been
htaving
term,
Georgia,
think
and
to
may
risks
ance
want
to
as
peace-loving country.
■"" I ' ■
The Indiana Senator, who has a fanatical
following in his native state, is in his third
year.
the
solution is
only
corn-
not be well defined,
check of the buyer's
of tne
redoubt¬
the Sputnik's first
political casualty in our country and it confuses the weathervane
as between "isolationism" and "internationalism" in our
so-called
going to make everybody happy.
the
are
mortgages cannot be
industry has
disturb-
little
they
as ours.
1
in the FHA has
as
insured
rating.
md whose
jredit may not always be
redhead down the street
gress, our purpose
that
All
same
insured
added attraction.
an
nay or
carrying out the will of Conto
fact
slow,
as
>pects, whose property standards
—it can't be done.
been
classified
of lenders
whose policies differ in many re¬
best to be fair to every-
of
Senate
listed
able "Bill" Jenner of Indiana, may be
1952.
President
Treasury De¬
spared
to
uninsured
written by a variety
{
body concerned, but it's like trying to please both your wife and
the pretty
be
to
FHA
am
my
is
just
s
;
lot
a
from the
retirement
announced
The
^
limitations
President
•
are
explicit in providing
mortgage insured by the
no
The
one
I
L,
other
any
insure.
we
The United States
or
loss.
mortgages have the
handed
me.
give
we
to
doubtful,
signments
ever
ejial
on
as-
in
adjustment
with them altogether.
value
-7HA
most
difficult
mortgages
any
searching review
hat
the
of
the
aminers
mortgages in¬
by
job result
our
.
able
had
helpful suggestions.
is
believe that
a
in
effect
In discussing the
industry advisory
with
committees, I have
partment agrees with us. Standing
instructions to National bank ex¬
:
come
reason
way we do
mortgage
the
me
sured
subject
The
has
am.
job of setting
our
By CARLISLE BARGERON
into
advisable.
seems
of the News
put the dis¬
we
limitations
accepted for FIIA insurance, after
1
wel
.
in good mortgages,
Congress has
you
nonveterans.
But I don't believe that any sort
and the
>
given
too
imbroglio
be of some use, after all, "if it helps bring about a reap¬
praisal of mortgage lending practices."
certainly
we
as
As I said when
resort to direct Government
a
word
causing the greatest frustration
right now is "discounts."- Nobody
is happy about
area
well
and
Mr. Mason trusts that the present discount
the
In
reaiiy
of home
Washington
Ahead
effective in taking
buying veterans as
oe
care
August, these, discounts are sub¬
ject -to adjustment when that
high, the alternative might be
From
asserted, willi
that our
reason,
after pointing out
In the world
to
entirely
of
appeals to mortgage bankers for cooperation in this endeavor
may
of
10
discounts
deal
o^od
business should have gone up 80%
Housing Administration
abolishing
to
count
loans.
u n
Lenders have also
n
is
money
from.
come
By NORMAN P. MASON*
Commissioner of the
/
their,, construction
South Meramec Avenue.
Inc.,
Ill
AUGUSTA,
lett
has
Chronicle)
Me.—Howard
become
associated witr,
Inc., «
F. L. Putnam fit Company,
Boston.
on
Mr. Millett was
officer in Nathan
formerly
C. Fay &
Number 5696
186
Volume
.
.
The Commercial aijxL Financial Chronicle
.
(2437)
ber
Open Trade and Investment for
This
Canadian and World Growth
By N. R. CRUMP, M. E.,
clear in Mr.
primary industry
the
babies
These forecasts, to be sure, do
not portray an economic image of
middle-aged
rotundity
for
the
and
;
.
r
.
I
imagine
can
chal-
more
no
theme
iniernarionai
naac
What about the demand
Canada's 1970 economic
Here
less
"chal181""
lenging,"
be-
cause,
as
fellow-ci ti
nrp-PaihriPn
pr0*C?)Tibri9i]
barrier
,tliJV
of
dcross
0n
m
R.
challenge
the
Four
such
to
as
imagination,
income,
we
the
of
in
found
stens
sicps
nationhood.
nationnooa.
of
expression
which
men
in
these
and
subsequent acts of faith, I suggest,
has been vindicated by history.
trade
invest¬
less
No
on
What
surely,
I
ot
will.-have
suggest,
a
capita
per
basis, cbnsump-
39%.
up
you
the
watersheds
great,
history-—a
for the
vestment
surge be justified
by the promise
of
greater !, progress
which
it
brings.
of
The
yanacta
We
Si
bemi
thp
i
beerr -expen-
nas
evnm
all
know,
too,
tlu
tra<1
tr
h
vo
our
assessment
implicit
lluriai1,
expenditures
cA^cnutiutto
in
111
If
substantially from today, but; its
magnitude
the nni.Pmagnitude suggests that
that the
cntrc
preneur and the businessman bold
I
they do,
think
i
<
AU
in ' Canada
upoir the
re¬
irm<*
Q
Canada
doubtful
nrlimnfnrn
wv
V4AV,
timn
tn
enme
rnntinne
ior a long time to come continue
to make ' spectacular ; demands
h the very resources "which
,
, ,
populace,
is
it
na«onl
or
dastriatly -mature 'countries'•'will
rar
i
Those
fhn
the
AJLWW
and
enterprise,
will
./.It has long been clear to the
investor, whether he be Canadian,
"
American,
British or European,
that the appetites of the more in-
mentary democracy and freedom-
nnr»0
focused
been
Canada of 1970.
Investment,
our forecasters tell based
will L'OOn
\\;llh Ctrnwlh Flf
you
that
realized.
be
rooted in the traditions of parlia
an
,
soun¥ reason's^
oeonle
lpe^inst is ambitious
people.^
Climate
sure
am
confidence
my
enough to seize the opportunities
will not go unrewarded in the
Without
in¬
at
source industries for several very
Let me say a word ahout each.
The first is
minute
a
Investment
do, I
we
has
Canadians
^
*
for
Recentv investment
l^eiy
face the future without fear,
T
If
-
later
factors,
Ix suggest,
will
Aiiuac
lctctuia,
siibswi,
\
continue to make their influc ncc
may
look
the economic front will sooner
shaped
by four great factors.
Those
The composi-
have
shaped
economic destiny in'the past.
share
ante will have a marked impact felt no less surely in the years
(m
the dem!md for consumer ahead.
uon °1 .that demand ma.Y 'dmcr
which
Favorable
;
teen
factors
vestment.;
what evidence is there, other
S
n
^
four
prospects?
thf
takiM
Together with people, trade and
than the say-so of our economists
in
best
is
demands
in
suited
geography
bv
ert
it
to
be
by
nature
provide,
to
reasonably
are
if
sustaincd
for
no
.
or
.nutCilv.ouo
more
to
wondered
dream
of
nomic
last
it
as
American
eco-
way
to
1
which
sees
every
investment dollar as a hated
badge
of economic colonialism,
can hardly be ex-
political and economic, which ex-
its
and
tW
in
undertake
the
as
past achieve-
Canada's
on
Prospects -Charged
nomic
am; discussing should conclude
dlat pnv^tme,l.t 0p2or-VriV
Ecoa
the
S., although somewhat broader
scope, the Gordon Commission,
it is known
in Canada, has
forecast
''I
"aglregSte,
will be
impressively greater even than in
bee.,
Investment
Government
a
expenditures
are
m,rp.v.»,
and nationalization of
Americmi Continent,
Canadian investment scene.
It
is
the
with which
democracy
tenacity
freedom
ami
-
based
per
capita basis Canada
trader.
on
the
Thoughful Canadians know that
Ullited States of today bears
nQ
which explains, no less suiely
why
than do the- economic: lack
a
industry.
loom
(hc
enterprise
freedom - based
such'threats
N
No
Canadians embrace
resemblance in the objectives
f ebher its Government or of its
to the capital-ex-
businessmen,
is
Continued
the world's biggest
"
mi Vhi« nnh.i^ nnhmiifir
u!
on
page
20
CANADIAN
^
^"° ftlh.bPpntpn-1
c«™a
jn
INVESTMENTS
jW. 1 while
substantially higher in the aggro-
s"hs,an1i""v h"",pr ln ,hp
We offer to United States investors
Slfv Mtle^raTha'nPtlm antk-i;} e
oooulation
and
complete facilities for the pur¬
chase of high grade Canadian in¬
P^^ J
vestments.
prospects for the
growth
socialism
CUU1
painful
and
delicate
Nevertheless, they too
b"ecns^
^
«v
abroad bave been focussed upon
the northern hall' of the North
on
experiencing.
matter.
with
in'
Commission
Palev
^
.
.
fr^vthrP1?ePmlS
always
support this verdict on Canada's
destiny is found in the
Commission
ever
of
•
1A?' : ILZSLZZ}.ZlZZ"
the era of boom we have just
birth to
of evidence
array
f.
s^mficantTmng, however^ isTUat
Preliminary Report of the Royal
penty which followed made it imwe
of
men
in
impressive
....
economic
u.
that
doubt when
Refers to Canadian Studies
pros-
perative
did
building which gave
An
World War n and the decade of
•sort of assessment of
the
in
during
they
as
portation services of today,
great
could
growth
just
•
eeo-
Canadian Pacific's far-flung trans-
mastery
circumstances
unparalleled
men
^ossed "orthwa^ o^r
wit
r5
li
ihat
m
half of the North
continent,
the
decade,
courage
economic
political
of the northern
survive
the
the
did
the
as
«i«oo*vv
country
my
whether
achievement
those days of
Canadian .nationhood,
involving
well
in
were
^mviuv-u
assistance, both in terms of
investment, to Canadian
' XZ
n■ d
Canada's
on
x,av^
and
have Canaponder scri-
years
discourse
ol
of nationalism
kind
a
their
...
nomic history. Suffice to say that,
unt.il comparatively recent years,
there
increasingly from the ravages of
could
total investment outlays may be givings a scant 90 years ago c(
expected to be four-fifths as large ever have succeeded.
again as they weie two years ago.
it is this belief in freedom,' >°th
Capital outlays in 1970, will
ously their country's place in the
economic scheme of things
This
fact may strike some
I do not propose to
burden' voii
as
has
countries
trade
decade
dians found time
who
Canada
andVI^
and the prospect of
that these dimensions of Canadian
tbis dramatic rise in living, stand-
eco¬
'
Only in recent
many
Stated
nrovided
may
that lies ahead.
a
than
watershed
of world
course
with
onnortunitv
encing in the ]ast decade.
,
contours of which
the
liberal
on
f?Iedom nfTn
Crump
propriate" because
ise, if one
reads
the auguries arig"
jht, we of the free
3 approaching one
world seem to be
nomic
thn
S tL toduSl eLwth
sinews
Xch
wnicn
devolnnmrnt
will
more
in
interna
based
and
ia^
Let's
ask,
may
economic growth
of
commerce
no
faith
of
Constitution of the United
Factors
attach to this
Canadian
0f
Vital
validity,
may we
.
courage
,*r
In
its
place will be
picture of an economy
the
be
forces
Amer^ans^te?lS
Inpersonal
the aggregate,
a rise of 84% growth wiil"'actually be realized?
consumption is loreCanada's eronmnir
1
N.
is
outlook
goods of all kinds.
eiant
giani
first
iirst
gangling
nnoovinini,,
would
1
DolSs
trade
vestment
side of
ai:e told, will be 39% above 1955.
of
nrvnss
Rockies to
the
the
tne
were
weie
towards
wards
the^manner
ment1! bear
waste
Qhioid
Shield
-
awareness
and
•
tuaav,
Thoso
incse
The
which
suc h
Pacific coast,
keen
a
sppininplv worthless
ihn
ttifv
^
1
share with my
zens
cmii
the lonely Prairie lands, and over
a
Canadian,
the
tioii will be
and
or^-i
the
adolescence
(
vanished.
ledger?
Jheir fortunes in building the first oast.
:
PadS^througT th7 dnptv ' Invcstmcnt Kewar(,s »' 1970
Economic
say
nn„
one
Another.; ;U I may say so was
S.
Frontiers."
I
fairly
..
the
courage of those who ventured
ano
SBound
ODen
„,oe
of
invigorating
tional
of
farm.
deployment
of far sturdier than in the past, its
manpower resources, will be im- angularities ironed out and with
portant in Canada's greatly ex- a well-muscled frame far better
panded output picture.
able to withstand the impact of
So much for the prospects lor external business fluctuations
than
1970 in terms of supply.
in earlier stages of development.
Personal disposable
was
heavily
so
products
the
But they do sug-
much
pv*rb-\*7Qi»riiiooo
was
of
when
efficient
more
.
British and French
^r^n?ematloH1l^.denaSd
Tpphnnincical
1 QfiFi
that
gest
economic
of act of faith.
area
large
as
found
than casual importance.
appropriate
and
lenging
be four-fifths
past
the
in
and
Canada of 1970.
advance, together with the changing pattern of employment oppor-
inter-dependence of U. S. A.-Canadian economies is of
more
mauuo
forest
the
in
concentrated
tumt.es which already promises a
trade and investment to meet threat of Soviet imperialism, and
notes
II
and
in
npaiji
.
.
War
World
than
greater
again M.ln .iasa. Terttaologlcal awkwardness and uncertainty
unrewarded in the Canada of 1970
[and]
will be impressively greater even than in the
era of the boom we have just been experiencing."
Questions,
however, European cooperative trade developments and the
U. S. A. disposal programs as possible drawbacks to growing
.
of
marry,
which will
Crump's brief recapitulation of his firm's private
will not go
larger
expanded too by
immigration, will create an cconomy
the productive capacity ot
study of Canada's economic dimensions of the next 15 years.
The study indicates^ among other things, that "the entrepreneur
and the businessman bold enough to seize the opportunities
investments
Canadians
jikelv to reoeal their
that will manifest itself when the
LL. D., D. Eng., I). Sc.*
Inter-relationship of trade and investment noliries is made
ing in construction, in heavy industry and in transportation far
population
and
labor
force,
expanded
by
the
higher rate of family formation
President, Canadian Pacific Railway Company
.
than 7 million men and
more
women.
13
.
Our facilities include!
A Research
consideration of
Jhis
assessment,
in terms of
public
well
as
suiveys
m
terms
wntimpnta
Hi%n
clian
i
Of
nf
but
the
thn
I
k
1
people, has rendered
mistakable verdict
mi
jn
1
j"
the
attitudes
is
that
destiny
is
taken
con-
-Panitin
a
private
on
behalf
lw'
tistics
Canadian
Let
of
I
Uic by a group oi eminent
economists—Canadian and Amen-
r^nn
^ana
un-
one
fellow-citi-
my
of Canada
niot
+n
wn<?
in
terms
of
of
man-
years
or
progress
s
it
as
As an integrated
enterprise closely
so.
transportation
with
the
country's reindustrial
develop-
identified
s
socialand«tnaterial progress source
and
will
ranK"ttrith
the
spec- ment, long-term economic studies
tacular
achievements
and
the, such
as
this, constantly revised,
Promise
of
the
United
Achievement,
human
and,;acts
affairs,
of fgith.
Courage
and
our
acts
of faith
of
the
colonies
Vork
march
of
American
represented
colonial
the
empire
•
cy Mr- Srump Hef°re the
City,;NW,-ti}lsr957?in^entc0!l''. -ew
.
-
l
'
•
a
..
provide useful information which
deserves serious attention on the
part of management.
Canada of 1970, as forecast in this
rich
-
'Nttf'68!5
among
however, that
A
/,
the pace-setters on the re-
sourCe
front
the following Indus-
-
".
-
•
,
those
in
which
present
investment has formed
mail.
give
part
0f
tbe
ore is
nace-setters
nrohable
Private wire service to
past
offices
impresof
one
are
&
So too will asbestos.
play
a
In
Year,
Add
we
population
are
will
told,
exceed
serves
it
is
i
i.
C*.
r
*
i
',
•
Company
LIMITED
significant role in Canada's
Investment Dealers Since 1021
50 KING STREET WEST,
to these Canada's
great
rc-
of oil and natural gas and
hard
to glimpse the
not
will num-: m&rked expansion in mariufactur-;
.
7
newsprint will continue to
21 million — nearly 35% greater promise of Canada's tomorrow.
than in 1955 and substantially For it is a promise which, if fullarger than today's population of filled,
will
not
only stimulate
m0re than 16 million people.
trade but will also bripg about
' Our 1970 laborfforce
invited.
McLeod,You no. We i r
Nickel and copper will also be
in the vanguard,
And
our
Canada.
Inquiries from investor*
1 VumS fs another
"
anolhei _is non
smeltmg and refin nto.
with promise.
Canada's
across
total,
" Higb grade iron
the
i
or
an
Correspondence Depart¬
deal in securities by
ment to
private study, are challenging and balance-of-payments.
of
Confederation in
North
which
remnants
>'"77"-"
44th
have
countries.
Canadians,
say,
The economic dimensions of the
[Parked
the forward
■h
For
States.
in any field- of
calls for courage
A
mey
lu
ibo
tation in the course of the next 15
economic
promise
with sta-
fULllLL IIonJ»
X"A i:
purpose was to plot me tries? over tbe long-haul, include
nnrnn(!fl
firin
course
Canada's
j wju not burden you
eminent
nf
nrnim
n
pretty impressive totals.
potentialities.
potentialities,
study, under-
already
wnt large seemed likely to ailect transporof
holds ;;the
achievements
kind
that
m
'
,
zens,
This
...
forecasts,
another study of
economic
economic
Canada's
Canada's
economic
,
and
particular
fident
private
as
Department with
up-to-date information on
major Canadian companies.
J 1
■>
■
j
1
•
;'
7
i
'
TORONTO, CANADA
Ottawa
Winnipeg
Vancouver
Hamilton
Calgary
Kitchener
Windsor
Edmonton
Quebec
Sherbrooke
New
York
GOVERNMENT,
AND
Si.
London
Montreal
MUNICIPAL
CORPORATION
SECURITIES
>
,i
\
r
'e: 1
14
The Commercial and Financial Chronicle
(2438)
There is
Why the Deep Gloom About
Business Piospects for 1958
Vice-President, Director of Economic
Lionel D.
Edie
&
Consulting:
Company, Inc., New
Service,
City
York
My
Mr.
Haas
rejects prevailing pessimsim about business
in foreseeing slightly higher
year
business volume than 1957.
The economic
explains why it is expected that
pros¬
to
I
numerous
The emotions
always
formulating
carry some
early
emotional side
has
gotten
hit
out
hand. A
ter"
tight
money
growth'?"
the
summer
®
a
lows
tions
of
What
"hot-
Middle
the nation¬
al
ego
grow-
Rock,
the
stock
market
of
Haas
shington
hearings on monetary policy and
a
other
aspects of national leader¬
ship, have created a general frame
of
mind not productive
tive thought.
In
times
like
these
cially important that
lish
perspective
where we
are
where
of
it
we
that
in
the
been
objec¬
is
espe¬
re-estab¬
note
we
light
and
by
to arrive at
clinical
of
what
to
have
the
future
in store for
Most of
a
likely
a
us.
tant
us
''If only things would get
little better."
Not
too
much
was,
later
we got to feel that
ton and The Lord owed
Washing¬
us "good
widen
to
to
increase
nervous.
Seems
a
lot
of
folks
these days fear we
may be in for
another spell of
"prosperity," ex¬
cept that
sion."
our
call it
now we
We've
come
a
"reces¬
long way in
education in Economics.
a
for
liv¬
of
"per
as
in
capita
dis¬
constant
dol¬
lars," or "per capita consumer ex¬
penditures in constant dollars."
Whether you
before the
include the
This is the thing that gives
straight population rise its real
year.
growth
"kick."
qualifications,
Subject
per
year
to
might
one
that the concept of
some
even say
"normal" 4%
a
growth rate for
average
companies.
But any mental
process that keeps the
emotional
impact of day-to-day news from
driving us off course is a
priority
reqirement in planning for the
future.
The
Basic
I wish to discuss
the future and
specifically,
But
,
views
to
about
,?,An. address by-
11 tn
Annual
income per
all.
The
a
the
element
growth"
large
is
is
in
real
of
related
of
and
upon
living rise.
business
This
spending
for
of economic
our
post¬
growth.
for
major
a
duration.
we
be in
may
recession'
of
some
spondents,
Louis,
St.
Louis,
We
potential,
wherein
we
said before that
in
in
capita
three
rest.
have
I
come
to
the
consumer's
doing
something
about catching up on
interruption of his standard
living rise.
(5) • Personal Tax Cut? The de¬
this
strength
consumer
of
in
the
does
year
we
side
contribute
chances of
taxes
at all
cut in Federal in¬
next
Such
year,
would,
consumer
and
to
ability
the
economy to
second half of
not depend
a
development
expect
the
add force to
a
of
course,
willingness
As
spend.
reduction looks
this
is
better than
a
proposition.
Business
Capital
Expenditures
expenditures
equipment,
for
the
new
plant
preliminary
results of the survey my firm con¬
ducts in the Fall of each year in¬
that
all
private
probably
more,
gloom, and what can one say to
allay doubts and restore perspec¬
concerning the future place
capital investment in our eco¬
growth?
(1) Excess Capacity. As in 19481949 and 1953-1954, the
bogeyman
of
"excess
capacity" is always
this
is any excess of efficient low-cost
flation
from
has
prevented
taking place
it
did
and
been
last
ital
year.
on
cost
income
schedule, but
living this
3%
last
per
have
a
after
to
down
new
for
3%
year
year
has
capita from
Secondly, business
spending,
headed
year,
of
top of
three-year rise
is
just
Yes, popula¬
personal
rising
up.
this
rise
a
cap¬
dramatic
hauled out
may more
other.
like these
so
easily frighten
One wonders if there
We note that companies
have
spent as heavily for
cost-cutting
have
equipment
as
for increased capacity
they
this
enduring
and
next
have
(b)
have
geared
plans to an
100%
operating
ratio
where
expansion
goals
patently
been
set
to
is
year
desirable
ask,
without
Wages
years?"
observe
First,
that
the
terms of normal growth
so,
needs.
sign
coming
Spendingv-
higher publi<
spending
spending
Consumer
—
continues
to
benefit from
Factory
wages.
average
Prices—I
expect
prices
142% -2%
p^nt
will
higher
half
this
and
consumer
average
next
year's
year—
gain
oveiY
Steel
con-!
1956.
cash
flow," that .is,;.,re¬
tained earnings plus set'-asides for
depreciation and amortization, arc
equivalent to two-thirds to threequarters
of
average
corporate
capital investment needs, with the
balance coming from outside ac¬
commodation
including bank term
public or private offer¬
loans and
ings of securities.
pect
plus
aircraft and other mili
industrial
show!'that
studies
our
or
5%.
typical nor
two-year period
a
billion,
hourly earnings should be up 4^i
next year, following 1957's
plu
the
neither
for
corporate
Steel
-
Production
—
sumption may set a new peak this
year, but consumers' reduction of
inventories
will
duction
the
last
in
year's
keep ingot pro¬
neighborhood of
million tons. We
115
look for 1958
ingot output moder¬
ately below the 1957 level.
Cars—Our estimate for '57 pas¬
We do not; ex¬
availability to be a
limiting factor affecting the "cap¬
ital
investment
required5 for a
senger
car
mained
among
tic. The
industry itself has boosted
normal growth in
its
money
(4)
Return
There
is
our
economy;'
Investment—
on
much
cost/price
talk
return
er
penditures.
vote
and
to
capital
could easily
We
one-week
a
low¬
mean
investment
on
deterrent
a
the
of
profits—that
squeeze on
lowered profit margins
seminar
ex¬
de¬
to
but best contribute
can
servations
and
a
few ob¬
a
conclusion
or
two.
The
economy
as
a
whole
continues to enjoy peak
corporate
sales and profits. Relative stabil¬
ity in overhaul production activ¬
ity for nearly a two-year period
has been rough on
many marginal
concerns,
the
same
point,
reflected
as
divergences
among
industry.
1957
wider
More
to
in
the
reported
profits for
have been unduly
many concerns
penalized
in
companies
by
two
factors
(a)
"living off inventories"
delayed benefits of cap¬
—
customers'
and
(b)
ital
expenditures made in 19551956-1957. We look for relief for
profits in
counts.
toration
1958-1959-1960
We
do
of
the
not
look
on
both
for
res¬
above average
of
some
of
the
postwar years, nor do we look for
further attrition in profit
profit
margins
before
taxes
with
the
margins
expected
growth in Gross National Product
and corporate sales
over
the years
ahead.
earlier
500,000.
,
1958
We expect total business volume
for
er
Economic Outlook
1958
than
to average
1957,
slightly high¬
making it a new
peak year for four years in a
We seem to be all alone in
forecast.
But
our
forecasts
row.
this
for
the
has
re¬
optimis¬
more
estimates
Six and
by
400,0
quarter million
a
We don't have
year.
cast for
this
as
1958
this
firm fore
a
yet, at least
good
as
year's output, with
pos¬
a
sible plus 4%
normal growth fac¬
tor, looks like
a
Housing
the
at
reasonable target
Starts—My bets made
end
would
of
keep
unbroken
that
1956
'57 starts
1,000,000 figure
come
through
the
have
rough months but look
some
better
1958
A
now.
10%
much|
for|
increase
today's forecast. Could be
is
more.
Farm Income—The basis of
original
would
for
forecast
be
farm
gross
ourf
1955-1956
period
income remains,
that
bottoming' out
a
unchanged.
The
3%t
average
gains for 1956 and 1957 have come a
from
higher prices. Larger mar- j
keting next year should keep farm
income stable to a small plus.
Banking
1956
—
business
mercial
rate
banks
three
and
For both 1955
loans
of
all
com¬
jumped ahead at a
times
fast
as
as
each
in total
business
volume
as
represented
by the Gross National Product
year's
For
1957
ahead
5%
respective
over
think
both
about
a
last
rise
rise
series should move
the
same,
in
roughly
For 1958, we
loans
year.
business
(commercial and industrial) by an
line with an
commercial banks in
expected
III.
production
should be about the figure for
this
topic and still not resolve all con¬
flicts of opinion.
Here, then, I
—
companies that
capital expenditure
like
5-10
the
modest amount by
a
rising
next
$1()
some
and private construction
power
we
seem
Major worry comes
from two areas
(a) industries
and
and
22% jump in such outlavs in 1956
followed by a further 6% increase
least worried.
peak levels
year.
in times
capacity.
that
put
or
—
Commercialization
for rising capital spending
the
hence
Concerning the future of busi¬
we
point
output of
to
Schools, roads, etc.—still a strong
plus—up 5% -10%.
Business Spending.
The ex
pected 5%-10%-, drop in privati
outlays for new plant and equip
ment, is expected to be offset bj
the
get the necessary
should
Even
each
living rise.
I
in
spending in phy¬
sical terms. The big impetus for
1958, then—in my opinion—will
Price in¬
of
money
over
consumer
from
'of
one
liquidity
"Where will
That's roughly $20-$25 bil¬
of
S.
tary hard goods.
State
and
Local
for' cost-
as
up
—
expense of
rapidly expanding spend¬
sectors.
corporate
lion of
dicate
U.
a
expecta-
key indicators
Department outlays tc
edge up from the $38 billion ievel
missiles/rockets
gaining at the
of this research
years.
standard
going
St.
per
these
average
Corre¬
1957.
an¬
that
kept real income
5,
for
per
expect something in the neighbor¬
hood of 242% per annum
later
Nov.
doubts
we
1958, and
Mo.,
further growth
do understand
our
but
current
in
the
about three years
his standard of
10%-15%.
Reasons for Doubts
Total for next year should not be
much different from the $35 bil For
some
months
past,
our
capacity
for
further
economic .lion so spent in 1956, which except
growth is not only being serious¬ for 1957, was the best year we
ly questioned brit the fear lurks ever saw.
Why, then, the deep
here and there that
ing
consumer
in.
rise
what
on
before
rise
well
as
(3) Money Availability? Some
point to tight money and reduced
in 1958 than this
year. Manufac¬
turing alone will be down some¬
contributor to
rate
most
is
mendous
—
war
processes,
six-12
spending
ness
and
Defense
and
private
spending for research and de¬
velopment of new products and
con¬
industry
will probably invest 5%-10% less
and
Haas
Cycle
next
average
and
on
and-. mines
Index
half—with
.
gap be¬
borrows and what
real
50-50
preliminary
1958
after mid-year.
Public
spending means
heavy capital investment."
2\->%
come
mind
%—helping to keep total bush
ness fairly stable
through the first
vestment.
Research:
the
that
on
wit?
of
public
3 42
demands, for power at
doubling-every-10-years' rate.
This calls for heavy capita! in¬
from
The
without
next
FRB
business
consumer
plant and equipment and re¬
lated facilities
certainly a tre¬
new
rise
Mr.
phase.
over
gone
a
of
is'.;why -
a
cutting, represents
been
"eco¬
to
is dependent
way
standard
element
2%- 24 2 %
a
increase
capita—roughly 4% in
second
nomic
in
and
1958.
Conference of Eank
First
National
Bank
The
resources
num
gree
are
for
year
of
months
tax
rise
annual
about
talk
six
living.
This is another way of
saying that the economy will have
of
That
0i
'th
al
uninformed
both
Production.
pacity to pay for them.
Power: Combined consumer* and
years.
widen
off
have
come
re¬
from
demand,., for', factories
this
services.
more
be
take
I
sources.
Here
services, with the indicated "bhr
pre¬
written, thinking in terms of the
fiscal year 1959 budget, a personal
tion
Question
By late
the
the U. S. economy stems from the
addition of a 142%-2% per annum
as
II.
since
Standard of Living "Catch¬
will be unaware of the
special and
difficult problems
facing the gov¬
industries and
of
up"—By mid-1958, the
will
and
that
will
today. But
strong issue
ur
two above
talks, this year's 1945
level.
before
the
Conference.
Board
Gross National
Product.—To be
about a year arid a half ago, chose
up about 3% to $445 billion
versus
to stress three loriget terin cabr:
this year's $435 billion.
ital spending props—
""V.'"" "•
Consumer
Expenditures
The
People: More of us, each demand¬
big factor in our forecast for
next
ing more and better goods and
the
of
rise
Credit
rising
a
without
meet
to
day
facilities
to
not
"everything - is - goi ng-to-heU
Dr. Lionel Edie, in one of his
months.
nomic
some
financial
pays
realization of
some
each
same
should
(4)
the
night
quired
sec¬
should
Bulk
Index
of
tween what he
tive
and
then.
Consumer
in
is
better
and
in
goods
and mid-1958.
the
the
emphatically do not
share these views. We
anticipate
ernment
en¬
rise
pressures
about 10%.
up
poking this little fun at our¬
selves, it does not follow that we
In
the
of
Member bank time deposits
(3)
years
just the postwar
years, this standard of living rise
has averaged about 2%-2 42%
per
war or
population
the postwar period—1948-1949
and 1953-1954—we
dropped from
"boom," not as far down as plain
old
"prosperity," mind you, but
enough to make some people real
"standard
income
posable
average
in
his
this
to
fair amount of time
a Big De¬
pression
was
at
our
doorstep.
They had a few years of "prosper¬
ity'" forced on them before they
realized they were in it. But
why
be content with
"prosperity" when
a "boom" was
being thrust on us?
Why not a perpetual boom? Twice
demand
ing." You will hear the economists
Right after the war, many
vincing themselves that
the
services, more impor¬
coupt 011 each individual
we
times."
con¬
rising standard of
our
and
spent
a
times
at
to
increase his per capita con¬
sumption of goods and services—
a
here recall the
Early
when our fervent
pray¬
'Thirties
er
appraisal
seems
goods
of
so
doing help ourselves
more
on
refer
—
have
we
out
actually the thing that
economy
its dynamic
In short, while we do
increasing numbers of
—
people
Ross
'
W
find
our
count
John
are
A
No, the thing on which
Americans have long prided
quality.
unfa vorable
1956.
he
living
Living
living by the
Price
rate
in
infallible
gives
cline, and the
than
sumer
we
%
(2) Savings High—Tight money
policy cannot .be justified ,by a
low saving's ratet
People saved
$2 billion more in first half 1957
ries and wages? Ordinarily not a
bad formula but technically not
ourselves is
de¬
effects
"economic growth?"
as
the
concern
want
We!
'
by
now
3%
still
we
of
Inflation
rising population and rising sala¬
like these.
ing out of
Sputnik and
Little
is
to
the savings standpoint.
Growth
of
com¬
respect
resumption
a
the
'economic
me
comment
has
Elements
East, the blows
to
killed
to
private
with
my
'58, CPI rise should only be half
ers, businessmen and economists
these days: "Have inflation and
our
is
interruptions, continue to enjoy a
rising standard of living, it fol¬
tween
question in the minds of all bank¬
in
minus
population will, despite occasional
here
last year has been in farm and
food prices. We expect the latter
to level off if not decline a bit be¬
judg¬
weight
small
a
small
a
capital investment trends:
stands
Consumer
ments and attitudes about the fu¬
ture. Seems to me that since
troubles
future of the stndard of living and
were
briefly
moderate
themselves with the basic
concern
manage¬
the
greets
business ends
plus, no change
for-a-few-years" frame
encouraged by much
extreme,
(1)
matter, must first
of
were
19,5-
see.
(2) Capital Expenditures Props,
—If, you believe that our growing
relate
ceding two calendar
that
sophisticated
recognition
5
spekticism.
the
the
to
superficial
I not first
as
ond half of 1958 because:
combatting inflation.
for
ment
would
same
plans.
in
his standard of
and banking to still be a "growth"
industry. Details "The Edie
Doctrine" and absolves Federal Reserve for sole
responsibility
years
with
business
year
We expect the consumer to
economic indicators examined in this
Perspective
wherein
about
next
the
major
joy
study are those
public and private construction spending is apt
to offset 5%-10%
drop in new plant-equipment outlays, a
more
optimistic estimate of 1957 passenger car production,
I.
have to wait and
Whether 1958
Standard
which show:
in
dustry. The paper industry is a
good example of the latter, but
average
will resume its rise by middle of 1958, and total business capital spending will only decline 5%-10% below 1957 level to
that achieved in 1956. Apropos the latter, included
among
,j-
1955, 1956 and* 1957
considerable time
labeled
be
indicated
an
being invited brought prompt rephasing of
numerous
spending
consulting director
standard of living
consumer
for
for
with
remarks
prospects
pany
pects for the next
a
regard
Thursday, December
.
"normal'' growth trend for the in¬
may
come.
have
By JOHN R. 1IAAS*
^
downward for
much
S.
.
be headed
capital investment
to
that U.
concern
some
.
plus
3%
in
GNP
1S
Loan ^
hav<
meant good operating results to:
banks this year and last. We don
see
much change in the level O'
interest rates next year. The higngood preliminary objective.
rise and higher interest rates
Continued,
on
page
Volume
186'
Number 5696
...
.
(2439)
The Commercial and Financial Chronicle
Melvin Janes, a
in his
friendly, sandy-haired man
early forties, may well be the world's only
trackwalker with a doctor's
Since 1953, Dr. Janes
degree.
has trudged many a mile
along railroad tracks from Maine to Texas. His
mission: to check with his
own
eyes
the killing
of a unique railroad-bed weed destroyer.
Weeds are a menace to railroad men. They are
power
a
lire hazard;
wheels slip on
them; they hold
moisture which rots the ties and undermines the
roadbed;
they make maintenance difficult. More
than 50 kinds of weeds grow
Some die
too
along the tracks.
easily and stay dead—but many are
tough for ordinary weed killers.
developed a promising
When Mobil scientists
new
oil-based
killer—Agronyl
R—Dr.
Janes
took to the tracks to check it out. It killed
weeds, all of them.
doesn't blow
film that
on to
Moreover, it's heavy
the
and
adjacent farmland, it leaves a
discourages
new
growth (and also helps
keep the tracks from rusting).
You can't
buy Agronyl R herbicide for your
garden weeds. It wouldn't work in your home
sprayer anyway.
It was created for a specific job
—and it does that
In the
scientists
for the
your
a-TV* vv
*I«
i
same
job without equal.
way,
Dr. Janes and his fellow
develop countless other Mobil products
special needs of
home. Whether it's
your
a
business, your car,
gasoline
motor oil or a
lubricant, it's unique in its field. And
depend on its quality —for it is a
product of Mobil's master touch in oil.
or a
gear
you
can
For
and
more
information about Mobil research
development activities, write to Room 2400,
Socony Mobil Oil Company, Inc., 150 E. 42nd
St., New York 17, N. Y.
and
£,
i>
i
http://fraser.stlouisfed.org/
4
Federal Reserve Bank of St. Louis
15
16
The Commercial and Financial Chronicle
(2440)
.
.
Thursday, December
.
5
1957
lum
even for the ragged
of late. The issue nas
average
markers
THE MARKET.,. AND YOU
i87
./
•
By WALLACE
STREETE
blucuo
W x_j.ii/
hi
a
ivi
guuU
of
ncvci
tucicab,
iiiciue
occa¬
an
sional
backing and filling
appearance at a
week, waiting on some¬ low where its return
thing that would call for deci¬ better than 10%.
1V1 i
action.
were
popular
not but
i 1
s s
new
even
somewhat
was
Motors in Doldrums
than
more times
the enthusiasm
in this section
was
items
e
Layoffs in Canadian auto
planis were an added bit of
bad
restrained.
for
news
the
depressed
autos and indications tnat the
There
were
signs of
no
domestic
Underdeveloped Countries
'
Recovering Chemical Issue
this
sive
The Credit Approach in
the
peaks
of 19o6 and 1955.
'
'
For
share
from
deflated
well
jeen
lines
weren't
By THE IION. H. V. R. IENGAR*
equally well-de¬
flated, quality issue Allied
Chemical was starting to
build up a following. In slid¬
ing from its peak of 129 in
1955,
Allied has retraced
nearly half the distance at its
an
recent low. It
was
Alternate Governor of the World Bank and Fund
for India
Indian finance official asserts that midst rise in
standard of
living in West, conditions in Asia have remained static
deteriorated, with people becoming astir with demands
show
needs.
Concludes while underdeveloped countries
must em¬
policies to prevent inflation, they cannot achieve
any
increase
in
living standards without "massive" support
companies to
clearcut profit-pinch,
a
Asserts India affords favorable conditions
foreign investor, but her fiscal policy must follow
social
for
of the
one
or
for
ending poverty.
chemical
first
Governor of the Reserve Bank of India;
,
brace
which started the downtrend.
from the West.
at¬
Allied
might be makingAs
far
mad buying rush
as
decisive
my
own
turnabout
in
study of been initiated in the
some
kind of a turnabout,
country in
did
little to brighten their
monetary history over the last 40 recent years.
economy, notably auto sales
since the third quarter sales
years is concerned, it is a fact that
Now, this large mass of
and steel operations, nor any picture. Even Chrysler, which
and earnings made a good re¬ experts have often strongly disa¬
people
has become astir. In
is involved in one of the two
India we have
psychological lifts for the
greed with each other. Moreover,
bound
while
the
period
had two general
elections on the
the world is a large place,
market such as more definite missiles just ordered into pro¬
and, basis of universal
wasn't anything rousing for
adult
franchise
although monetary problems may and the
signs of an easy money policy duction, shrugged off its par¬ industry generally.
peasants and the
be structurally similar in all coun¬
workers
ticipation
in
this
are
glamor
field
conscious
of
their
by the Federal Reserve. Then,
political
tries, they will not be susceptible
and
was
rights. And powerful winds
toying
with
this
too, the season for establish¬
have
of a uniform pattern of solution.
been blowing across
i
Overall
the
preference still
The theme of my talk today
country
ing tax losses is at hand and year's low on a couple of oc¬
may sometimes a
little
seemed to concentrate on the be stated as follows: what
gusty, shaking
should them
there are few- reliable yard¬ casions. Ford was definitely
from their
torpor; and thev
be the credit approach to fiscal
sticks around to indicate how heavy and sank to new lows consumption items, as against
are
beginning to
any
the
tracting
any
1
much
of such
selling is still
to be absorbed.
the
which
ers,
regularity
represents the poorest
price
Institutional Caution
To
the
there
still
was
seen
for
room
the
on
of
trim
more
than
goods manufactur¬
and some of the stores
other
shares and
these
since
they
were
available
followers, publicly. That adds up to a
chart
hard
with monotonous
a
soft-goods items
prominent in reaching
peaks in dreary markets.
and monetary policy in an under¬
developed country which is mak¬
ing efforts to raise the standard of
living of its people, and what
are
were
the limitations of such
new
the context of the standard of im¬
third
policy in
a
provement aimed at?
In
Interesting Food Issue
close to the low of the
for
abroad.
buying.
Year-End Dividend
Watched
A
good
dividual
of
many
moves were
isn't
much
the
in¬
face of any sustained demand,
make for volatile price action
to demand for it.
keyed to
the traditional
year-end extra
The Utilities and Money
which the action of the stock
dividends, Zenith is particular
Easing
belies so far.
There was
soaring on what is pretty
also consider¬
*
*
*
much the gamut for dividend able attention
being given to
Sinclair Oil, seventh
largest
action—a $2 extra, a $2
spe¬ the normally defensive utility
in the field, is another issue
cial, a stock split proposal and section, particularly since
that has commanded
advance indication of
dend
increase
divi¬
a
the
on
split
shares. It ran up a
string of
appearances at a new high on
the news
but a peak for
1957
only and not even
threatening the peaks of last
year or of 1955.
—
%
❖
Outstanding
little in
signs of loosened reins on the
money market could indicate
that
the
passed.
low
dividend
the way of investment atten¬
tion in, recent
years mostly
point has been because the
American Telephone been for the
has been
better for several sessions in
a
row
preference
has
com¬
Yet
does.
Sinclair
has
which isn't the normal
favorite.
of
this
been
making strides to make up its
investment
crude
deficiency, including
,
acouisition
of
the
properties
Part of the attraction in of Southern
disappointment was Western
Production and a
Maryland where hopes for Telephone is the huge con¬ large stock interest in Texas
the initial dividend had vertible debenture
financing Pacific Coal & Oil. The rela¬
ranged up to $1.25. Declara¬ being planned for early next
tively static supply of crude
tion of a 75-cent rate, obvi¬ year. The famous
$9 dividend
ously,
well
was
below
such
expectations
stock
suffered
had been
an
the
since
hovering at
that would show
any
and
bit
a
it
level
a
indicated
yield of around 5Lri%, which
isn't
overly attractive in
section
yields
where
are
7
and
available.
a
on
Telephone has been
ture for
more
ades but
solely
rate
but
the
fix¬
countries.
truism
a
to
erty which, from
a
distance,
may
to
be merely a disturbing
social phenomenon is to
us, living
appear
in India and most other countries
in
Asia, a grinding and
computing the yield
"extra
able
8%
World
via
War
II.
Nickel
turn
this
above
5V,
since
which
is
year
that
35%
a
strong
with
the
good
a
figure
prevailing
could reach 50%
year or
up¬
of
for
next
shortly after.
[The
well
above-
many
parts
of
static
Asia
or
Some 40 years ago, an able and
imaginative
in
India
Englishman
conducted
a
economic conditions in
Bombay State.
at
the
He
poverty
working
survey
of
a
village in
was
horrified
disclosed
by
his
one
same
village
was
resur-
couple
a
of
of years ago by
research institutes. The
our
conditions of the village lent
themselves admirably for such a
resurvey, for it was, like the ma¬
jority of Indian villages,
away
from the main road and the
tenor
of
its simple
agricultural economy
had not been disturbed
by the in¬
tervention in the neighborhood
of
any
large industrial establishment.
According to
the
survey,
time
had stood still in this
village. Dur¬
article
lime
views
do
not
coincide
expi'esfied
in
this
necessarily
at
any
with
of
the
"ChronicleThey
as
those
are
those of the author
period
a
lent
of
nearly
supremacy,
lived in the
tions
and
same
their
as
This
would
presented
only.]
the
years
people
primitive condi¬
fathers
be
40
true
had
of
done.
awakening of millions of
people that has given urgency to
plans of development in India and
other Asian
some
of
countries.
ambitious and desirous of
sored
tional
of
very
in
of the pro¬
development that have
Credit
the
and
World
Monetary
Fiscal
Bank
Fund,
Policy"
and
India
$50, less than
was
spon¬
per
year
dollar per
one
week. And all that is
contemplated
by the Second Plan is to raise it
to
about $60 in five years, or
dollar and 15 cents per week.
With
the
to
are
period of 25
years,
a
to double the
income.
That is to say, in about
20 years from now all that we are
hoping to achieve is
a
capita
per
income of $100 per year.
I
do not think anybody will, in
conscience, regard this as an
all
over-ambitious target.
It
known that the
was
problem
of
mobilizing the resources re¬
quired for implementing a plan
of
the
dimensions
would
turned
plex
be
out
than
crucial
to
be
above
but
it has
its
more
com¬
thought.
The
how
even
had
we
question
of
stated
difficult,
has
been
growing income,
the
community can set apart for capi¬
tal formation—how far, in other
words,
it
sacrifice
can
on
con¬
sumption.
An
is
of
assessment
difficult
because
assessment of the
voluntary
of
this problem
it involves an
sum
total ol the
of a vast mass
But such information
responses
people.
is available suggests that the
increased rate of investment that
as
was
taken into account is not
tak¬
ing place., The new incomes gen¬
erated by development have ac¬
crued, in large part, to people who
are
still
below
the
subsistence
levels, and in retrospect it was
clearly an over-simplification to
that
assume
portion
of
particular P1'0"
any
the
would
sustaining
generated
newly
be
available
the levels of
proposed. A development
of
the
prograjn
attempted i'1
set up inflation¬
magnitude
ary pressures,
fiscal
lot
investment
and
and
a
major
monetary
task o
policy
Interna¬
Washington.
a
successive Plans that
follow, the hope is, in
of
by Mr. Iengar at the Joint
Discussion on "Current Prob¬
by
catching
too quickly with the West. This
far from being true.
up
is
India cannot but
lems
are
who seem to think
.that Asia is in too great a
hurry,
that India, in
particular, is over
Statement
Informal
There
people
incomes
tens
thousands of villages in the
Indian
grams
Awakening and Development
much
survey.
veyed
disease
a
It is this
in
places actually deteriorated.
some
subcontinent, in spite
on
basis
in
have either remained
ing
years
However,
conditions
poverty had continued its malevo¬
control took
valu¬
rights to holders
West
its
on
payments"
changes have taken place in
and, in spite of two
devastating wars, the standard of
living has gone up so remarkably,
the
poverty is
and should be mastered.
capita income
that there
say
is great poverty in Asia. This
pov¬
furnished by properties under
the basis of the cash chance
payment ignores several good
around
rail
stock,
a
than three dec¬
only a cash dividend
Plate, in fact, recently held its
Telephone's yield is
regular
is
This
integrated
showing steady re¬ panies and not for those that
tacking on a point or have to buy crude, as Sinclair
covery,
behavior
❖
o n
Asian
most
It
that
can
background in the light
At the end of the First Five
policy has to be framed Year Plan in April 1956, the per
of which
in
feeling
ven¬
general stockholders early next year.
daily
stock around since the major¬
One new product, a slide pro¬
reality.
jector. has been going well ity of the 1.6 million shares
Action
Contrasting Deterioration in Asia
is family held.
and the firm will be hard- outstanding
In the last half
century, when
This would usually, in the
pressed to keep production up
great
aggressive
any
There
economic
that
the forces of fate is
giving way
with remarkable
quickness to the
that
dealing with this then, I
topside for the year-end from the price at which the
ture
to
speak on the basis of
H. J. Heinz is one producer
Indian experience, not merely be¬
rally, particularly if there is shares were marketed orig¬
cause
I
ani
offering
familiar with it but
comforting sales and
any worthwhile reinvestment inally.
;
;
❖
*
❖
profit figures for the holders. also because I think the lessons
demand.
Therei were few
we are
gathering in India will be
The growth hasn't been over¬
traces
of
What
anything much
found to have relevance to other
buying suggestions
ly spectacular but has been Asian countries
more than occasional
were
bargain
engaged in the
being bandied around
hunting by the \ institutional showed some attention going steady. Marketwise, however, task of economic development
the stock has done little, carv¬ through democratic methods.
buyers who lately have shown to the unbeaten paths, such as
But before starting on the main
a
definite
predilection for Bausch & Lomb Optical in the ing out a 10-point range for subject, I think it is essential to
the year and lately available
lower prices available on a counter
market
which
has
state briefly the general social and
range.
selling climax. The picture is been holding in a five-point
The company, in addition to
different for the longer range,
range,
half of last year's
its important stature domes¬
however, and widespread ex¬ swing. The company has been
pectations that the October showing a comfortable earn¬ tically, also has one of the
low ultimately will be tested ings
picture and recently put larger foreign operations
around. In fact, it operates in
are just another in the
a
20% stock dividend on the
nega¬
tive attitudes that hardly call calendar for
something
like 200 countries
approval by the
demand
something must be done and done
quickly to improve their lot. The
old passivity, the
resignation to
Continued
on
page
4
jlume
186
Number 5696
. . .
The Commercial and Financial Chronicle
(2441)
xi=|U*r
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.
^vvvywv^
•'
.
......
...
,^88^.;:«f«PP::^S^
/iv«w/,'.Nvsv.wA<wiwo:<»y«'»w,N
We build electronic "BRAINS" for
A missile's accuracy
depends
in reaching its target
the reliability of precision elec¬
upon
beginning, scientists and engineers
of the International
Telephone and Telegraph
Corporation have heen at work on guided mis¬
sile
systems,
and
a
score
applying world-wide experience
of
special skills.
Federal Telecommunication Laborato¬
ries
both divisions of IT&T, are
the
and Farnswortii Electronics Company,
deeply engaged in
research, development, and manufacture of
missile
tronic controls.
From the
guided missiles
guidance and precision remote control
contributing to the conception and
as the Terrier, Talos,
Sparrow, Meteor, Rascal and Bomarc.
Missile guidance is one more field in which
systems...
operation of such missiles
the
creative
engineering and the integrated
facilities of IT&T
are
developing
new concepts
in electronics and telecommunications.
ITVT
INTERNATIONAL TELEPHONE AND TELEGRAPH
CORPORATION, 67 Broad Street, New York 4, N.Y.
•
17
Jo urn
(2442)%
18
Chronicle
The Commercial and Financial
i.
.
195J
Thursday, December 5,
.
iieci
3
suiting bank be changed
standing—50,000 shares, par value
present stock and an offering of
an additional 25,250 shares by The
rle
to Zion
ithe
First National Bank.
Queens
National Bank of New
*
*
*
(2) That the capitalization 0
York, Springfield Gardens, N. Y.
By a stock dividend The Batav- dhe former bank of $750,000 bL
has been announced by J. A. Melian National Bank of La Crosse, increased to
$2,550,000 divide
'fLa
nick, Chairman of the Board.
Wis. increased its common capital into 255,000 shares of commoi
The split results in a change in stock from $250,000 to $500,000 efstock of $10 par value,
the par value of the stock to $10 fe^ive Nov. 18. (Number of shares . (3) That authority be given t,
per share.
The sale of the addi-. outstanding — 25,000 shares, par increase the membership in th,
tional shares will increase the to- value $20.)
^
y
-,y
Bwnl.af Directors to a maximun
News About Banks
$10.)
»
CONSOLIDATIONS
,
NEW
BRANCHES
NEW
OFFICERS, ETC.
Bankers
and
REVISED
CAPITALIZATIONS
^
tal
outstanding
•stnrk
Trust
Guaranty
of
Board
the
of
the
directors
held
2
was
dent and
hjanch,
rector
the
of
to
company
Kleitz,
F.
occurredNov.
men
Mr.
of the
Adams,
whose death
19.
•
-n
t-x
•
ta
..
,
the
Duluth,7
of
consoli-
Minn,
n
...
The Northern City
dated to form
of Duluth
Bank
National
fices at No. 1-3 Main Street
235 South Main Street and
AU
these branches be called
tively,
the i Zions
■'
Savings
National
Minnesota
Northern
Bank
i
io
MntzkP
1956
Februarv
as
chairman
and Trust Office.
First National stockholders
of
the Board of Directors of the City
an,
ant
thai
vllcll
^resnop
__
ltL
and'
Office and Utah Saving
rp'tir
Herman C. Matzke retired in Trust
r
uprman
■*
.
wil
Stockholders of Stamford Trust National Bank of Duluth and Mr. elect directors to fill any vacancie
the
with
merger
approved
Conn.,
Stamford,
Co>>
William
National
First
n
Gray, formerly the
The City National
A.
President
of
,
succeed William L.
Assistant
named
was
a.'
n
created by the increase in the si/re*- • ~i
of the
board and any othe? ende
Bank in Greenwich and National
Bank of Duluth, is presently the
vacancies otherwise existing a r "
dent of J°nn E. Morrison, jr., Bank of Norwalk. Combined re- Executive Vice-President of the the
time
of
the
stockholder
head of the banks Long island sources would be over $110,000,- Northern City National Bank of meeting.
"It is proposed tha
GJty^Omce, and appointed Harold q00. Previous article appeared in Duluth.
,
:
representatives of both Zion1
Di-
a
nf
m rfo
a
•
That authority be given t
tional Bank of Duluth, Minn. and maintain and operate branch of
Stephen C. tion rights will expire on Dec. 12.
the oveiseas
*
*
«
Manager.
Mr. Moore also announced the
election to Assistant Vice-Presi-
Presi-
elected
4hAiv»
t"*
u>
o+
4.
that
Wisely, Auditor of
E.
Dale
7,
Sharp
Moi^-
mu
On Aug. 22/ 1957 The City Na-(4)
;'
•
nJno
ic
/a\
_T
..
The additional stock is being of-
Dfidn'oc
4.1
and
Manager
Nov.
on
T
j
__
,
,
P
miViV.aW
board
of
of
85 250
to
c^hir
i
AA-t-
mu
capital
Simultaneously Mr. Moore an- fered to-present stockholders
in
h
IH
of
nounced that C. j. Bridges, Man- ratio to their present holdings at
ager of the bank's London Olfice, a subscription
price of $22 per
was
named Vice-President and share. The stockholders'subscrip-
New York, has announced that at a special meeting
of
Company
Moore,
nounced by William H.
Chairman of the Board.
Chairman
Cleveland,
Luther
J.
of
shares
of
number
Depart-
Trust
Page 22.
Thomas J. McGrath of the Installment Loan Division, as Assistant
Sharp
formerly
"Chronicle"
the
of
issue
14
Nov>
LjfT
Savings Bank and Trust Co
*
*
*
an
Utah Savings and Trust Co. wil]
■■ The common capital stock of the
First National Bank in Harriman,
V:.
be elected to places
on
the boari
Tenn/was increased from $100,000 of the resulting bank."
Ban!
with ^
bank's charge of the Foreign Department to $20ff,000 by a stock dividend ef- , , Zion s
First National
Dale E. Sharp
Vice-Presi¬
HiiT^iorT which' handles1 activities of the Provident Tradesmens Bank fective Nov. 20. (Number of shares would purchase the stock of Utal
dent.
aril
in xitl" the Mddl^ West and Far and Trust Company, Philadelphia,
outstanding - 2,000 shares, par Zion's Savings
and Tnjst
Mr. cjiiciijj
Bank Company
& Trust Coml ad (
Sharp became
ueiiiHie a Jiiemuer
member 01
of a..
~
nPfl
i
value $100.)
the Guaranty staff in 1931.
pany
stockholders should therw el' Ii
He West Territories, has been with
retires
Dec
i
Mr.
Hauckon
who
started
his banked
was appointed a Vice-President in
S?6!. S'
ing*Varee7'46'yk7rago'w¥h
the'The
Board
of
Directors
of
the
be
any
dissenters. In the case,™1942
with
supervision over the
• «■ •
Treasurer
ini948
and
an
Tradesmens
National
Bank
is
a
Birmingham
Trust
National
Ban*rf^lrst
National
Bank
stock,
thje
dqu,
hank,™
reiat.«n«h,.v=
Assistant Treasuier inl948 and ail
company's
was
tea u
Executive
A
Hauck. Vice-President:in
p
•
*
*
4-1-1/v
Twn /I
avi4
X?
ADtvi / kilo
O 12
1r
ivn.
™
cninnanv s
banking
in the Midwest.
He
relationships
to
eeneral management
management ot
hf tne
the
to the
me general
bank
in
1955,
and
offiee
in September of the same year,
Ti.n!t°p«°
•1oinil!g was
the employedGuarant?
Tiust Company-he
the
merce
by
National
in New
John
of
Bank
Com¬
&
Co.,
New
York, 1928-30.
.
uilli
pointment
Jan.
named
Trust Officer in 1944 and
a
Vice-President
Assistant
an
associated with the
P. Gait, Jr., Credit; Charles
Grimes, Jr., Personal Trust
Administration; Richard F. Hunlie well,
City Division; J. Joseph
Quinn, Purchasing; and John G.
Nicholson,
Fred
L.
Rush
and
James A. Turley, Jr., Will Review
rence
B.
^S1t
+
:
„
Treasurers
k
d"' Adl™ms:
D
tration and Mario P. Regna, Trust
Adnnnistiation.
*
v
Arthur
B.
Western
been
to
t h
*
Goetze, President of
Electric
Company,
has
has been
Board
Exchange
by
Harold
man
an
*
*
time
that
since
has
he
been
The Board of Directors of the Board"HrserveraV"president into
Reading, Pa., at its regular meet-
promotion of five officers
The
to new official posts and the elec-
tion
of
eight
members
staff
declared
declared
as
junior officers with The Marine
Midland Trust Company of New
Y'ork
has
been
announced
by
a
2, to shareholders of record Dec: '
is
1957.
This dividend
same amount as that paid
14,
the
year
a
and marks the 12th consecutive year in which the bank has
ago
paid extra dividends at year end.
*
*
Vice-President and Secretary,
and
John R. McGinley and Harold W.
Rasmussen
were
advanced
to
Vice-President
from Vice-President.
Joseph H.
advanced to Assist-
ant
Vice-Presidents
ant
Secretaries.
0f
Emlenton,
common
y<
*
Assist-
from
Emlenton, Pa., with
stock of $150,000,
dated effective
consolidation
the
Frein. and
were
tinue
share and an extra dividend
share payable Jan.
James G. Baldwin was adOil City National Bank, Oil City,
vanced to Administrative Vice- pa., with common stock of $500,President and Secretary from 000; and The First National Bank
O.
^rrfrrmPfi
as
of Nov.
the
charter and
Chairman
duties of
VoJnwI
T950
He wiTl
chief'executive
as
con-
officer
'
rj;
/,
.
also
has
and
V
i
XT
i
»
T,
^a"adega National Bank,
TaUadcga, Ala. increased its comvn caP^al stock from $100,000
$200,000 by, a stock dividend
effective Nov. 19. (Number of
sVares outstanding 16,000 shares,
Par value $12.50.)
,
of $7,450,000 and undividel u'r
profits, including capital reserveJcom,
which when combined with capilj^ n.
ia^ and surplus will be equal \ Jet
p
|be cornbinecj capital structures ( 1 be
the three banks on the merg( mbu:
datg#
uctio
rpbe mei-ger agreement provide—.
that shares of stock of the resultP ' (
blg bank will be distributed I®1, esco
shareholders of three banks upt
,000,
,
i
^apital stock from $1,000,000 to
16. The
under
title of "Oil
of
Details
effective date of consol-
idation the consolidated bank will
of
have
baaks
capital stock of $665,000, di-
vided
into
33.250
shares
Mr.
a
i
t
t—\
of
of
the proposed
major
three
into
Salt
City
Lake
First
ii'gi
stock.
National
For 30,000 shares
of Zion's
jngs Bank and Trust Co., stock
institution $50
sin§le
a
merger
par
value
outstandin
now
Street Branch; Richard G.
Stiene,
Auditing.
Corpora¬
tion, Bell Tela
Bank
$465,783.
certificate was issued
Nov. 18 by the office of the Comptroller of the Currency, approving and making effective as of the
B.
Goetze
^
„
.
On Nov.
orato'ies LNa"s
s a
Smeltins
u
of
business
90
Nov.
'
Northern
Electric
merger of Citizens State Bank of
Bristol, Bristol, Ind., with
efrsnlr
rv*
(top; nnn
common
rru.^,
Vice-President of The Bank stock of $25,000, into The First
R,
Refining Company, Teletype Cor-
29, Mr. Felix S. Wass-
Vicp-PrpsiHpnt nf The Runt
ann
•
thp
Chemical Corn Exchange Bank,
its
to
LeRoy W.
Central
Grand
-
it
nounced
a r
4
by
H
Zion s
Co., and
i0r++P"
^
MS
...n
nnih
T.,r
s,...■ kr.«.uifm
was
an
ol d R
Bank,
presented
him
with
the
bank's gold Bee Hive pin and
a
handsome gold wrist watch.
°
t\/t^
wocc
^
«
J
PrfSSnlS;
tor
i.
each
share
of
Zion's Saving
f
7,
€
o
ii
gai
stock.
or
For
the
of Uk
shares
3,COO
Savings and Trust Company
iViain otieet institutions.
if the* majority"of" stockholders each share of Utah Savings ai
the'mergerT'finkl Trust Company stock,
will be sought from the
flkt i"
t
19!
les
anc
Each stockholder in the
resuJ.
vote
ing bank will have one
h
cach sha"cf
Kof
Morr
Solo
th oi
w
\
uriti
19d7 as tbe pioposed date fox
^ 'Ue effective date of the the merger.
H. A. Renfro, Executive Vic
merger th<5 receiving association
Under the proposed plan, Zion s President, Bank of Encmo.Enri H01
wil1 have capital stock of $725,000, Savings Bank and Trust Co., es- Calif, and Stanley M. Stalk]-!
divide? ^ AV00 share,s of ?»«!: Fblished in 1873, and Utah Say- chairman of the. Board, Fide ; low.
...
Urnrrrt
at-
also
s
U; S. Comptroller of the Currency
Z
Area Advisorv RnarH
City,
sto
^ober
^be Currency, the lettei of $100 par value now outstan
?t!.ves ,a lesume
^be Plans i01 ing, 28,000 shares of common stoc
tbe Proposed merger and sets Dec.
11 as
the date for stockholders' in tbe resulting bank of $10 Pf
value each, meaning 9.35 shar
^ of the resulting bank
" '-"k
stock «
f<
hont
*
New York, has elected
Dec.
n^10Ye+u
,
y"rk waTtonored on'fon^pleUng wfth#commonksWclf'of^Wno^nn' vote
2ri vp'nrs nf sprvirp u-ith
common stock of $700,000. appr0val
Company, Ltd. of Canada.
*
Lake
Utah Savings and Trust Company
..
Arthur
Salt
of
Savings Bank and Trust
Merger
close
e
st ol
rth C
com-
t"i^
Office; Thomas J. Rvan, William
Di¬
and
i..
1
plus
Pios
tded
"1 ^ A
+u- the following basis:
!he sale^of ,ne^v s,toc^ the
For 30,000 shares of First K; 'he
Longvi^w National Bank, Long- ti0nal Bank of Salt Lake City (.^
vie^> Tex., increased its common par value of $25 each, there \vii; at
V
„
National Bank."
At the
shares of ' commoi;,^
255,000
stock of par value of $10 eacl
The' new firm will have a sur®''
[est,
be issued 119,850 shares of
$Ll2a,000 effective Nov. 22. (Num- par value each) meaning issuanMs,JCC
mg
ber of shares outstanding—56,250 of 39g5 shares of the resultii rued
City shares, par value $20.)
bank for every outstanding sh?
consoli-
effected
was
1937
regular
regular
a
semi-annual dividend of 70 cents
George C. Textor, President.
Administrative
1
Oct
of 60 cents per
Branch; Eugene J. Mahoney,
Credit; Harold T. Peterson, Main
rector of San-
Campbell
1952, vlded for dissenting stockholdei
of either Zions Savings Bank am false
ana.sl,\c7" inai lV"e ,ne "as P(-en
romnanv or Utah Saving","0;
Senior Vice-President and Direc- nust company 01 Utah bavint ded
^ Qf
the p.rst National Bank> and Trust Co
Montgomery, Ala.
■
.,.lhe amount of capital stock c
At the same meeting Mr. Cole'he new Zion s First National
man was elected Chairman of the
pank will be $2,550,000, divide
Tampa, Fla.. from 1946 to
City Bank and Trust Company of
per
*
hall
the
poration
and
1951
Assistant Vice President in 1954.
t>
H.
bank.
Goetze is
in
Treasurer
Branch; John D. Griffin, Pornonok Branch; John J. Kane, White¬
Chair¬
of
.
,
on
29
Helm,
to
beai_^he name, Zions there will be 107.000 shares of i1™
departments indicated included: mon stock of the par value of $20
,irf^ National Bank, were set resulting bank stock issued at
Frederick W. Barrett, Credit; A. each; surplus
of $1,850,000; and ^
j1!.3
sem Nov. 30 to par vaiue each, meaning 3.5
Hunter
Bowman,
Midtown undivided profits of not less than stockholders of the First National shares of the merged bank stoc
^Rnnk
nf
S*aH.
T.hK-p
f ifv
/inn s
_i
Cnt'ind
was
announced
Nov.
1946.
New Assistant Treasurers in the
Bank, New
York, it
of01
new
new
ant Manager.
Mr. Hannon was named an Assist- ing
ing Nov.
Nov. 26
26
Scarlett
Chemical Corn
since
Trust
Bankers
James
of Directors of
d i
with
elected
e
is
it
,
ant
42nd Street Office; Arthur F. Boddicker, Chrirch Street Office: Law-
the
tne
bank's division which deals with
Mr. Hannon was named an Assist-
Curtin,
head
neaa
John W. Fox will be Assist-
fice.
Oflice; Miss Margaret M.
L
Saints
Hav
to
see
,
will
win
Treasurer
lieasuiei,
a
later.
and Southwestern states,
^?-s Ja??. Clements, 72nd Street
d
thf4
Church
of Jesus
Jesus iChrist of Latter
tnurcn 01
,
„vpnll„
Monnav
1J„..
„
iiaia a.venue,
lvionaay,
uec.
a.
Girard
Avenue,
Monday,
Dec.
9.
Hans
A.
Jungels,
Assistant
/rred
the ap" activities in the South Atlantic
12 officers.
of
,
letter states: "The intent of
Annual
the
14,
nn
Named Assistant Secretary were:
Miss Jane Clements, 72nd Street
Anal^sis-
Nov. ?27,
Plummer
Plummer
date of the
Stockholders' Meeting.
-
Mr. Hannon,
Bank, New York,
,T
A
Trust
Rankers
r,
year
The Hanover
of
staff of the company in 1934; was
York, 1924-28, and
Nickerson
on
Wall Hon 01 roieign lracie, ana leiues eieciea iyii.. ridim
:\
with a national reputation in the President of the Bank, effective
the
with
Gardener,
Mr
thag
saints is to
dissenting stockholders, if any, a als
Foreign Department field.
First National Bank of Salt Lak;
since 1926. With the Banking De¬
rirmvi
Trust
Cnrn
Fxchance
Mr. Plummer was Executive City shall have an opportunity t( ffei
partment of Bankers Trust Coma"!
Vice-President
and Director of realize the fair cash value of theii
pany
since 1945, Mir. Gardener Bank, Philadelphia, Pa. will open vtce-i-n^aem ana vurecur ui
--- .;"/hr"r;'rT:
7' P
firct
nampri
11,<■
nft'icinl
nfffne
f:3i
rl
Rtrept
near
Manne Bank & Trust Company, "
,
was
first
named 1to the
official
an
office
on
63rd
Street
near
ow
■
ap-
Ala.
Frank
Birmingham,
elected
retires
and
Street Office of Bankers Trust
Vice-President Company, has been with the bank
January,
pointed Executive
by
Mr.
Associa.
Bankers
th£
As;sistal3; Vice-President in 1951.
advanced
was
^
X?
IT* f7 O CT
AAA
oum-1
^ntrmrfo
GPi^-i -»<-t4-
r*
r\
_i
/Art
nj
1
T\/r
kt Q 1 TO:
rk C
as
executive
which
Vice-President.
*
Russell
W.
*
formerly
dents,
retary
Billman,
nni'^onnr
sequently served
*
T'T
T^u
Arthur
named
Vke~-Presi-
it
Assistant Sec-
Vice-Presi-
was
an-
.,
wK
nt
Quarter Century Club
*
A
two
and
*
By
a
stock
dividend,
the
com-
of The
Fir
NaI11UU capital
Cdpuai stock
blUUK UI
JlIierTrWI\amon
,
dents at Bankers Trust
Company,
New York, Dec.
2,
as
Assistant
dent-
AwiJam" Jn^on°S' "
were
and
c
_MA.
its
formal
beginnings
according
Community
Banks,
in 1890.
m. P. Illitch,
Committee
At the Dec. 11 meetings, shareholders
"UlUCia of
UJ. all
dXl three
Liliee banks
UdfiiVS will
Will
and Chairman of the Board, Sou
west
wcat Bank,
liaim, Inglewood,
mgicvruoi., Calif
ChairnJ
® tional Bank of Monroe, Mich, was vote on the proposed merger. The
The Independent Commur
*"1SS 000
!,ncl;eased
from.$400,000
.??°.°i?00to $500,^00
J400" Bank
stockholders,
of. First
National
is a cooperative group
and from
of Salt Lake
City will
vote Banks
23 independently owned Soul
•
*
one-half
had
by the sale of
split
of
Nov. 18.
new
stock effective
(Number of shares out-
cm
four additional proposals:
(1)
That
the
name
of
the re-
iand
banks
organized
size the importance of
to
emph
the loca
los
IRQ
ko\
43
luriti
186
ume
195)|
5,
Number 5696
.
The Commercial and Financial Chronicle
.
.
(2443)
19
_
led bank to the economy of its
rle
area
well
as
that
as
Paradox of
of
ZioiiElthern California.
>
aon
o
000
b
Hon. C. D. Howe, P.C., was
■ted a director of the Bank of
;t.
iivide:
ntrcal,
3mm0[
th
in
ximun
ir
;et
anc
id
period of 22
a decade
a
thai
de
served
Minister of
years,
as
Commerce.
and
He
.
Chancellor
ing inflation, and deplores inflationary effect recent hardening
of sterling is apt to have upon trade union demands and
ij:
$
...
I'
a'
Bank
Manitoba
ant
of
to
r
headquarters
his
at
August
in
served
later
1
the
st Indies and London, England,
ny
leries of senior appointments at
an
including
Office,
that
nd
I
ief Inspector of the bank, pre-
o
transfer
his
ed
to
of
it
in
Pau*
alsey, Stuart Group
Virginia Elec. &
ower Co. 41/2% Bds.
t(|
:holdeip
aiffl<dsey.
bavin^dcd
stock
Einzig
o
divide
Co.
&
Stuart
Inc.
an
;ommoj&fjs> series N 4l->%, due Dee. 1,
ea
®7, at 100.492% and accrued in-
4.47%. Award of
bonds was won by the group
rr
I,6}
'^serve:|
competitive
th
sale
Dec. 3 on
on
caPJlid of 99.6999%.,
tln'ps Rlet
"
™l
merge
provide
action
expenditures
already
for additional construc-
or
Construction
for
rcs
1957
expend-
estimated
are
,000,000, with: $45,700,000
ided through Sept. 30.
Ki
'he
City (
wi
at
ex-
bonds will be redeem-
new
regular redemption prices
iging from 105.50% to par, and
special redemption prices reling from 100.50% to par, plus
of
lissuaw
esultii
;rued interest in each
shp;
electric
n's Sa'
>st
3.5]
tig
stoc|
7,
of
Saving
gas
Df
Ut
ly
sto
or
its
the
stoc
ended
Sept. 30,
business provided
revenues
months
ended
Sept.
operating
revat $126,415,income at $23,471,000.
shown
shar<
Koppelman & Solomon
f<
iship of Koppelman & Solomon
lh offices at 501 Fifth Avenue,
w York City to engage in a
resul
>
vote
f<
leld.
purities
Vic
En^i*
business.
Howard Marcus
Opens
ita'f^1
Fidel* do ward H. Marcus is engaging
f„ ha;^ a securities business from ofof t J es at 501
Fifth Avenue, New
pentFfJck City.
•ding
L
hainrt
Sou&
lif.
nmui"
[roup
and there is no
that November
would
produce a striking improve¬
this sphere. The deterio¬
ment: in
ration of the balance of
the
of
other
payments
Sterling Area
coun¬
istence
in
of
large
a
The
of the cost of
index
continues to rise
ily,
living
slowly but stead¬
Output statistics
appointing
have
the
statisticians
indications that
their
wage
There
trade
the
unions intend to abandon
down
dis¬
so
under criticism.
come
no
are
that
are
sterling constitutes
covering
improve sterling's future
not
pects.
Should
arise—such
another
engage
in
dle
East—the
fact
that
the
lent attitude
by
At
companies
it
two
was
months
the
an
unofficial
National
strike,
Board
Coal
ments
This may sound like one
large crop of jokes pro¬
duced nowadays about the impos¬
the
of
attitude of industrial
sible
but, unfortunately, it happens
ers;
to
true.
be
in
work¬
the
slight softening
a
attitude of
the
unions
are
sufficiently distinct to war¬
optimism. Nor could the im¬
provement of sterling be accounted
for on the ground of any note¬
worthy improvement in the po¬
not
rant
outlook, domestic
or
inter¬
national.
wave
new
a
pessimist
definition
the
of
of
a
one who, [ when de¬
steep slope, is gravely
concerned with the prospects of
having to climb, up that slope
again, in contradistinction to the
optimist who, when struggling up¬
hill, is rejoicing about the pros¬
scending
lar
it
reserve,
their
on
of
reduction
United
their
Bank
States
currencies.
rates
given
has
in
rise
the
to
optimism in continental foreign
exchange markets about the pros¬
of
pects
which ster¬
would
tend
to
demands,
wage
and
impelled to maintain and
reinforce its
disinflationary
but for which any wage in¬
ures,
To
it
sterling.
The
view
is
meas¬
could
easily be passed
give the Government its due,
seems
now
adopt
to
inclined
be
reasonably firm
a
in face of wage
claims by its own
Moreover, the annual
employees.
British
authorities
in
disinflating
Western
to
some
Germany
are
are
degree,
on
the
good. Convention
Underwriting Profit
-
(or Loss)
10-Year Average
to
Margins
to
2.2%
Agricultural
1.9
—0.1
1.8
0.0
^American Insurance
Bankers &
__
Insurance
4.4
3.8
1.8
0.6
—0.5
1.5
0.0
5.6
2.7
1.3
Hanover Insurance
2.5
0.2
Hartford Fire
6.4
5.4
Home Insurance
2.1
—0.9
6.3
5.3
2.7
—14.6
Glens Falls
—
_______
Great American
;
^National Fire
Fire__.
National Union
0.5
—2.2
2.1
—0.5
1.0
—2.0
Northern Insurance
6.3
5.8
North River
New
Hampshire ____[
5.9
3.2
Pacific Fire
8.4
6.0
Phoenix Insurance
3.0
0.4
Provident
—
—2.6
—7.0
St. Paul Fire
6.6
5.5
Security
1.1
—1.0
Springfield
2.4
—0.6
Washington
Insurance
3.0
American
Surety
Casualty
this principle will
practice remains to
But evidently the Gov¬
is now prepared to go
To what extent
be enforced
be
seen.
in
than
of
merely to limit the
bank
Fortunately
the
for
a
Govern¬
the Oppo¬
pretense
statesmanlike attitude in face
sition
all
discarded
has
of the national danger of nonstop
inflation.
The
Government's dis¬
efforts
inflationary
are
opposed
every direction, in the hope
their inevitable unpopularity
that
this
the Socialist Party to
attitude
rests
on
a
But
misjudg-
ment of the mood
of the country.
The
is
Government
forgiven for
a
likely
desired
to
be
great deal, if only
produced
its disinflationary drive
the
5.9
4.0
4.5
—
0.9
6.2
—
Aetna
Casualty
__
_
^Continental
Insurance
and
^National
above.
reflected
1.6
9.5
8.8
—
2.9
—
2.9
—
1.7
—0.7
—0.4
6.3
6.8
5.1
14.6
13.5
12.1
2.0
—
0.0
1.2
1.9
22.6
22.4
31.2
not
Firemen's
of
data
0.6
4.1
5.0
docs
Fire
8.4
—
—
8.3
.__
data
2.6
7.2
—
5.4
Fidelity & Guaranty
Insurance
2.7
—
4.9
Seaboard Surety
'-American
4.4
5.3
__
Fidelity &
U. S.
6.0
—
2.9
__
Continental
Deposit
Massachusetts Bonding
8.2
—
American
include
Newark
not
are
included
working
in
Ins.
Co.
merger,
not
Automobile
on
a
Casualty.
Continental
credit and await
ment's political future,
in
4.4
—
result.
the
at
8.3
—
•
Insurance Co. No. America
5.9
cut down in some other direction.
3.5
3.4
2.1
Re-Insurance
it is inevitable to
in one direction, a
corresponding amount has to be
3.7
—
—
3.6
______
American
if
8.6
2.7
2.7
•{•Firemen's Insurance
Westchester
more
2.6
—
—
11.3
Fidelity Phenix __.i—_____
Fireman's Fund
4.9
—
2.1
Fire Association
_
7.9
—
—1.2
,
12.5
_______
3.8%
—
6.1
1.0
j Continental Insurance
Federal
0.5%
8.4
Shippers
Boston Insurance
1956
l:i/3l/5(i
Aetna Insurance
estimates of expenditure for 19581959 is based on the declared prin¬
that
are
5-Year Average
I3/3L/56
2.7
ciple
association
readily available at practically all companies.
5.5
spend
or
Portfolio lists
United States Fire__
victory at the next election.
the
any
Treasury scrutiny of departmental
authorities
reflating,
to
attitude
would help
now
on
'
taken that, since the United States
are
it
assumption that they would
be able to add the higher wages to
their prices. The stronger sterling
will feel
stockholders
nor
values fool nobody who can multiply figures.
en¬
the
on
volume
and
on
the trade unions to insist
courage
policyholders
as
a
ling depends. Should the present
wave
of
optimism result in a
strengthening of the gold and dol¬
improvement lies not in factors
directly affecting Britain and ster¬
ling but in factors affecting other
countries
serious depletion of surplus account some
for 1957 if underwriting losses continue to
and
increases than have been granted; but of course weakening some
units through serious depletion of surplus will do neither the
further
of
fairly large number of those
"association") values; and one
a
All this may sound, like the ap¬
ernment
explanation
come
(or
portfolio valuations continue to decline started last
July. The supervisory authorities hold to the idea that the experi¬
ence with present rates has not run
long enough to justify more
for
scope
sterling's
The-
may
to
of
wider
resulting from their earlier
strike!
mount
that, there will be much
ago means
becomes the less the Government
of the nationalized coal¬
one
fields there is
mid-year date
convention
smaller
ployers to concede those demands
number of minor strikes.
a
1957
used
position in sterling today is much
Al¬
of labor is indicated
the
At
wonders how close
than
are
increases have been very slow in coming through;
reporting
short
demands.
major strikes
at the time of writing, the trucu¬
still
a
pros¬
devalua¬
franc, or a ma¬
crisis in the Mid¬
or a
For 1956, 23 of these 38 units have com¬
the
and
causing large shrinkages in portfolio
values and hence in surplus accounts, it is not impossible that
some of the smaller companies
may find the going rough. Indeed,
in the current third quarter report of one
carrier, convention
values are shown, with market values roughly 30% lower.
tion of the French
jor strike,
and
with the securities markets
does
adverse factor
some
as
needed.
are
ratios;
five-year average ratio figures of a
well below what insurance companies
presumed to show for such a period.
Rate
tial hidden reserve, and its reduc¬
tion through bear
would also tend to encourage em¬
are no
are
substan¬
a
loss
large proportion of them
position
scale
sterling should improve in terms
of
dollars.
Likewise, there are
indications that wages and prices
to
short
ex¬
or
ROOKLYN, N. Y.—Irwin W.
■kowitz has opened offices at
Street
immediate
But the
tries, brought about by the decline
pects of soon being able to descend
in
world
commodity prices, ist
again. But while the attitude of
causing growing concern in Lon¬
optimists and pessimists does not
don.
■Nlor has the drain
on
the
affect the gradient of the slope, it
sterling balances of Sterling Area
does affect the psychological and
countries come to an end.
loskowitz Opens Office
Soul f?untics business.
locatf.
of the
while
empl
2
change
Sterling is harder because other
currencies appear to be softer. The
-e
I,
im¬
to suppose
litical
Morris Koppelman and Donald
Solomon have formed the part-
ngs ar
unsatisfactory,
reason
Indications of
$10 p
;ock
bined
the
as
plication
7%.
total
and net
higher rates
far
as
majority of these stocks show a decided trend
ten-year average through the five-year and
line. It seems to this writer that material of this
convincing to the supervisory authorities that
the
then to one-year
sort should
be
helpful
position is concerned.
averages.
A considerable
fair amount of
covering of short positions in ster¬
ling curing November.
This is
to the consumer.
operating
12
were
a
this calculation is
as
accurate
working from
creases
business
1957,
les
iitstaa
on
this
incurred to net premiums written),
arithmetically than averaging
expenses
more
■
been
miners for their loss of bonus pay¬
months
electric
Tnere has
is not prepared to compensate the
Virginia and in parts of
stock
rth Carolina and West Virginia,
[tandinl
also distributes natural gas in
is of tlf
rfolk and Newport News. For
d at $11
lk
r..V.,%
London.
Co.
Power
&
of
12
is
speculative selling of sterling.
because
-
is
a
money
utility operating in
/irginia Electric
an
case.
franc
The
gone back to the full dollar
cloud, and some
seeking to
finding its way to
French
October balance of payments fig¬
ures of the United Kingdom were
though there
at
e
ere
lg
the company to
treasury for con-
by
its
|i costs.
uted
ks upc
irst
used
Insurance Stocks
of
the five-year and ten-year averages, we have
relationship of the ratios (losses and
loss adjustment expenses to earned
premiums; and underwriting
bullish
a
Unfortunately, any such assump¬
tion would be over-optimistic. The
proceeds from the financing
be
sterling.
under
more
the
material conditions
mburse
de,
result
;
c
situation for the better.
economic
underwriting syndicate
ich
yesterday
(Dec.
4)
oi¬
led a new issue of $20,000,000.
ginia Electric. & Power Co.
it
and
refunding
mortgage
4ationa
!'
It
b
highly grati¬
fying if we
were justified
in
claiming
fundamental
some
ffers
pro
clk
1 d
u
provement has been the result of
oij
of theii
sis
Zurich.
th»t
It Labi
inity
sterling
almost
o
w
regional
th
in
unobtainable
Latter
any,
there
days
when
was
till 4dquarters at. Winnipeg,,a year,
thi
ck,
and
for
escape
in
N ovember
of
st Corr
thei
were
British
of Uta
point
..
the bank at
Alberta, in 1927,
Hat,
the
September.
in
Indeed,
dicine
Ban
of
lost
goid
Currie joined
Ay.
boar
recover
some
■
>
nnipeg.
)o. wi
case
once
Equalization Fund has been able
Manager
:1 will remain in charge of that
don
increase, which again is
been above its parity of $2.80
for some weeks and the Exchange
Assistant General
tha
has
Sterling
—
and
ikatchewan, has been appointed
Zion'i
2
Canadian
in
Commerce
holder:
'o.,
The
endent of
othei1
d
Currie, Regional Super-
M.
Jt.
Eng.
now
cancies
—
week
In arriving at
LONDON,
iversity, Halifax, N. S.
[he siz
dng
employer concessions.
Dalhousie
of
this
a
tabulation giving the under¬
writing profit (or loss) margin of a group of fire-casualty stocks
brings out clearly the adverse trend that these companies have had
to contend with, for we give not only the
long-term average
underwriting profit margin (ten years), but that for the last five
years averaged, and that for the latest complete year, 1956.
As
readers of this space are aware, we expect 1957 to be at least as
bad as 1956, possibly worse, in underwriting results, so
carrying
the periods forward a year when the data becomes available
would not alter much the general picture.
e. g., lowering U. S. A. rediscount rate.
Einzig credits the government with being firm about fight¬
Dr.
in
universities
now
will
irs
Presentation
and their currencies;
has
law, science and engineering
m
Savings:
This Week
in sterling despite
a recovery
unsatisfactory British balance of payments and
the domestic economy is ascribed by
leading British economist to factors affecting other countries
Canada, the
and1 ited States and
Australia, and
is
paradoxical phenomenon of
little improvement in
!n awarded 15 honorary degrees
respee
^
The
continued
nearly
of
By ARTHUR B. WALLACE
share-
jlr, Howe, who has had a dis[>uished career in parliament
iven t(
Bank and Insurance Stocks
By TAUL EINZIG
the
at
See.
tht
ich
With
Dec. 2 at the bank's head
ders
iven ti
Montreal, Can.,
meeting of
annual
Sterling's Recovery
Poor Balance of Payments
results.
NATIONAL
BANK
BANK
of INDIA, LIMITED
Bankers
to
the
Government
and
1»
INSURANCE
Kenya Colony and Uganda
Head Office: 26 Bishopsgate
West
STOCKS
London, E. C. 2.
(London) Branch■
End
13, St. James's Square, S. W 1
Branches in India, Pakistan, Ceylon
Burma,
Kenya,
Aden,
Laird, Bissell & Meeds
Tanganyika
Uganda, Zanzibar, and Somaliland
Authorized
Paid-Up
Reserve
Capital
Capital
Fund
120
___£2,85l,562
American
BROADWAY,
Telephone:
£3,104,687
exchange business
Trusteeships and Executorships
also undertaken
and
Members
£4,562,501;
The Bank conducts every description
banking
Members New York
Protectorate.
Bell
oi
<L.
A.
Stock Exchange
Stock
Exchange
NEW YORK 5, N. Y.
BArclay 7-3500
Teletype—NY 1-1248-49
Gibbs,
Manager
Trading
Specialists in Bank Stocks
Dept.)
Wold
20
The Commercial and Financial Chronicle
(2444)
Continued
from
referred, taken collectively,
likely to achieve, in the long run,
mi
IV
'
and
Canadian and Woild Growth
equipping
the
threat
Or,
and to remain prosperous at home,
export markets must be found not
only for our resource products,
are por-
of
19th
Americans know, too, that Canas
a
try, bears
to
but
capital-importing counno similarity whatever
jt
of
capital
Century.
imports
in
the
19th
Uncle
for
record
of
its
in
its
in this
Add
to
the
climate
that
for
favorable
developed
and
own.
their
it
and
of
its
hard
onnortunities
north
Lest
i"
/-%
let
me
say
similar
of
views
about
investment
United
i-
the
-1
States.
that
Proof
this
ment in the United
siderably
larger
States is
than
26%
of
thus.
always
United
Kingdom.
with
a
would
wish
not
leave
to
dependent
Kingdom.
outside
it
For
80%
of
is
in
i rarlo
i«
trade
export
our
is
facts,
to
that
be
which
light of
in Canada
we
than
more
to
the
in
wonder,
ordinarily
developments of any
affect the future
may
Questions Trade Developments
I
said
the
at
opening
the
of
-
of
had
paper that we of the free world
seem «to be approaching one of
Canadian
tours
of
that
watershed
-
of
But
advanced
lion's
share
manufacturing.
savings
which
we
of
for
is
of
not
the
know
the
the
whi6h -j
to
short-term
economic
swing
pendulum
the "business cycle."
as
like
re.
Americans,
we
We
nev.er deluded ourselves with the
notion that our economy was
Hiat
cipline of the market-place, and
substantially in excess, proportionately, of the rate of capital
hope, courageous enough, to swing
with the punches in such a way
fhar nnnlinAnnA
pace
-
*
•
_
formation' in
and
rivaling
ments
of the
it
tr__
the
United
• a.
the
even
:i
m.
.
i
...
.
States
achieve¬
Federal Republic of
Germany.
we
the
private
United
confident
am
is
less
that
resilient
are
dominate
at
enough
nnr
and,
uioi1
1
\ui
contribute
to
even
more
the industry
i
will accelerate the
of prog-
pace
by forcing all of us more
promptly to discard old equip¬
our
long-term
outlook
times.
all
of
a
different
capacity
of
old
ways
do so,
respective
our
economies to develop
new invesl-
ment opportunities will expand,
contours
Its
discernible
are
in
to trade—third
Because she is both
economically
internationally spc-
eialized, Canada's
capita trade,
as I have said, is
the highest in
the world.
Although the relative
importance of trade to the Cana¬
per
The
in
represent
large
States.
nature
export
than
more
share of national
a
.
of
Canadian
terms,
is
trade
European Free Trade Plan—patterns which, were they to crystal-
be
disin what I have
remembered,
agriculture,
f no'£>"f Vt
ucts'
acts,
too,
and
cm*
however,
especially
i
whether fnllv
whether
nvimal 1,-)ro<:l"
fully-manufactured
mar-
niMr
detail.-
in
However, I will record that the
Dow-Jones Industrial
Average on
morning of Tuesday, Nov. 26,:
was 442.97,
and closed that night
at 435.34.
As I am writing
this,
the Industrial Average /is 446.03.
the
look up
can
in
ures
to pay
v y our
ou
bills
abrnid
diiis abroad
there
ging
they
off.
will
an
advantage
over
possib
in
the
next
Congressional
year,
no
one
electioi
would
da:
forecast at the moment,
i ?'>■■■ •/ ■
Await Opening of Congress
There has been
.,
Mr.
some talk
abol
Eisenhower's
resigning,
physical situation, I
ha]
his
to
mas
until
and
season
to
Can
Congrt
red it
opens,the first week in Januai
:onsu
If he decides to
resign, he w
probably include such a stateme
his
rally
in his message to Congress at tli
time. Personally, I
sincerely
onsu
hoHhe
,..,'11
~
he will not resign,
jn
closing, let
me say
Eisenhower
west
Point
to
his^country.
pared
die
to
that Presl
utior
tf^nied
;
>aper
life f<
•emei
was
give
He
was
his
always
pri
see
port
to
his
meet
his
to
visitfepay
testimoiifualil
foreign
patriotism,
courage,
a
is
the
basis
of
my.
faith in Canada's tomorrow.
It is
faith
a
js
that
fa^h
a
rational
be-
the Canadian people.
knowledge
based
that
in
Canada!s
vestment
the
on
trade
opposing parties unite
his foreign policy and on de-
on
fensc.
lies, first and
the
on
in-
prosperity and
The
to
it
is
faith
a
based
the conviction that the
of
discovery will give
to
surely
industry
us
new
in¬
face
squarely and
courageously the great adventures
in
trade
If
investment that
and
ahead of
we
are
us.
to
are
prosper, if we arc
we are
to be strong
to
grow, if
and free, then
must
we
take
a
long hard look at any policies ad¬
vanced in the
name
of
affairs
other
expediency,
solitudes.
For
he
put
discernible, also, in the
agricultural surplus disposal poliC^es pursued by the United States,
and they may'be seen in those
attitudes of mind current in some
the threat of import restrictions on copper, lead, zinc, petro-
\T
\
-m
an-othei lesouice pioducts.
I would not wish it
I
am
on
thought that
presuming to pass judgment
these
matters.
I
have
enough
confidence in the spirit of American
enterprise to know that, on
balance,
America
will
in 1110
the III—
fuwcifdutc, xAI
Ilt:I ILd
Will
111
ture, as in the past,
which
will
hold
pursue policies
promise of
They
are
Aie the
bOClcU
which
to
the
economic
ana
is
the
false
free
lure
advance
world's
of
answer
communism
would, m ia(d>
calling into
Question the very essence of ecou°mic freedom in which all of us
ave s^a^ed our faith,
I
am
Canadians
v^aiiauiauo
confident
nor
iiui
that
neither
Americans
xAIlltfl lLdllb
stumble into such follies
as
will
Will
these,
the
tions.
the
With
his
ground
these.
developments to which
lems.
has
Of
been
Bache Inst.
changing
prob¬
situation
fast;, from
so
Harold
and
to
now
missiles
satellites, that
no
knows what the future will
forth.
one
bring
Nevertheless, I repeat that
political bitterness which has
any
existed
during
should
the
now
! few
past
be buried and
approach
a
partner,
a n-
nounced
over
Mr.
velt
his
silver
a
lining to the dark cloud.
We
must
well
as
only
not
have
forget
their
vulnerable
fortunes
liable
at
to
that
any
to
the
troubles
Khrushchev
we.
in
b
o
it
not think
tunes
is
well
is
similar
time but
will
to
financial
personally
handles
himself
1959
I960.
few weeks,
next
will,
those of President and director
this
and
should
the
Fund,
Regency
open-end
diversify
a
companj
Proffloans
investment
President of Universal Food
ucts, Inc.; and
He
dent
is
also
a
others.
of Pi'es
Committee
member
Eisenhower's
headed j
and whi<
Vice-President
Nixon
is
representatives
comprised
V<U1111/1JUVU
of
^
labor, government and the
pcibh
Three With Scranton
also
(Special to The Financial
them
misfor-
NEW
Chronicle)
Conn.
HAVEN,
—
Geor
Bryant II, John H. Griffm,
Philip L. Phillips are w
Chas." *w!' Scranton & Co
C.
and
^
rhnVr-h
New
Street
^
York
members
Stock
of
Exchange.
America.
have
to
he
he
are
not
great
confi¬
dence in Vice-President Nixon.
he
Among
post
holds
mis¬
is
remember
that all the
befall
and
as
shot, a possibility
which our political leaders need
not
fear
today.
These are not
pleasant thoughts for any nation,
but
the
t h
business
be
and
posi¬
new
Government Contracts,
What May Happen to Khrushchev
Russians
Roose¬
brings to
tion, a wealth
of experience
coalition
government. This could be
L.
the weekend.
the
ballistic
Dept.
senior
Bache,
to
long-range
pevei
®ache & Co.,
fields.
advantage
Pierce,- Fenner & Beane.
recom¬
defense
the
on
well
as
be
I
(Special to The Financial
believe
some
Republicans
It
Norman Dacey
If
during
of
should
in
give
]
Roosevelt, youngest sf
* e hite President Franklin
R°osevelt, has joined the Institd
tlonal Department of the inyes|
ment firm of
bombers to short-distance missiles
associated
Lynch,
making
course
the
Merrill
have, his feet
to
as
Maurice H. Bent passed away
Nov. 27 at the age of 66. He was
with
problems.
Army record, the
when
mendations
I
Maurice H. Bent
or
has had such a struggle
through his recommenda¬
President should
were
are
pre-
about
agricultural
or
domestic
we
economic
never
much
President, however, probably
that
And
know
knows Europe better than anyone
in Washington, and it is too bad
yie prosperity of the United States
singularly inter-dependent.
President
to
money
are
on
The
tended
many
solid
and
to
the
redil
last
J. A. Roosevelt Joins!
until
tend
niake
Here, then
to
I know that when his time comiiredil
he will be proud to die at 1 ivelfa
work or "with his boots on." Ttwonsu
fact that he went over to the aisumei
~
challenge.
s
battlefieli>eopl
the
on
e<
iowe
gradual sag¬
a
People will wait
what develops.
of
They
be
cr<
candidates
the latest fig-. on a stormy day is true
their daily papers.: As
ment.
see
followed
to discuss it
me
months should
wou!d Jike to poso two
1
are
less loi
might turn our Atlantic
Community into an isolated group
so
we
"1 1
it
which
tLt'\o1"nnrCAv^;aI? 5'S0 i'5POr" fulfillment of open international
likelv to remain
?
?lld.aJ'e
•rn
trade
f alld investment frontiers.
If
the
ket the past
tf
H
few days know how
jittery it has
been. It will go up ten points and
ize, would undoubtedly affect the
pattern of international invest-
clearly
cernible, in part,
already said about investment in
the resource industries.
It must
that
ap-
investment in Canada's to-Indeed, our very suryi^lj
Political Outlook
may depend upon the maniier,;in
I
feel
certain
that
President
which we respond to this newest;: Eisenhower's illness will
P°se
still
Nixon
and
morrow.
United
llliCC
as
,Believ-
the stock
but
technology may fairly be said to
constitute the challenge of trade,
income than do the exports oMhb
dian economy has declined some¬
what in the last three uccuuua cadecades, ex-
ports
if
future, we fear no crisis 'on. fundamental beliefs,
panic in business or the market,
*° aaPPen, we would be setman-made bounds to those
£°iden opportunities of trade and
al}
us here
?an Shmpse. We would be placing
the
circles in the United States which
the very
very hope
hope of
^
twice
.
any
would
have
Roger W. Babson
Readers
B hie resource frontiers of the
spiration
nature.
of the four great factors to which
we must turn for evidence to
sup-
advanced and
at
following: _r
Those who
ress
we
January Message
hap-
may.
achievement in
of
discovery in the future than in the
past. I am confident, too, that ^,?w^ „ n Points 1,1 a given day.
Canadian participation in research Theiefore, it would be meaning-
II
The watershed to which I refer
Capita Trade
me
like
venture
I believe
which, if
exist
lc
audi
preciate some no right to judge or forecast,
remarks,, from cannot,
however,
imagine hi
a friend of."the 1
quitting now.
He himself w
President, IJ,want to wait through the Chit
in-
Canadians,
discovery.
opportunities
his
pari
and
ing that read-
than Americans,
aware
us;
things
ers
in
of both of the
Ian
parties. As to whether the prese
alls misfortune will help either
that
time.
this
Wh
,i
Congress.
realize
recognized, will enable Canadians
all subject to the dis-
the conscious quest for new and
different patterns of world trade
that are manifest in such devclport; the growth prospects which opments as the European Common
I have already outlined.
Market and the proposed Anglobrings
made
pen
enter¬
States
Vice-President
stock
wonder,
of the growing importance of the;
that confidence, and not fear, will
-
Higher Per
we are
nnH
is
That
in
expansion
Canadians themselves have trans-
•
I
have
formed great quantities of savings
into new capital formation at a
s*
which
sums
cither fully inflation-proof or foremost,
experiencing, hilly recession-proof.
We know havior of
the
have been
That watershed
Canadians,
domestic Canadian
investment account form
and
also
econ¬
might
stabilizing
a
in"
and
hastening the "filling
"'rounding out" of the economy
by encouraging the growth of do¬
mestic consumer goods industries
and
announce
the
this
-
has
has
we
great
should
two,
the
temoo
It
It
vesting in research
the
my'
well determine the course of trade
influence, too, 011 Canada's bal- and investment for a considerable
ance
of
Davments
and
it
is time to come.
payments,
ana
is
growth.
market.
and
?
ment, old methods and
of doing things/And as
patterns of world trade.
the
business
American faith in the industry,
of
discovery is manifest in the
to
ovnorf
mil'
me,
America's
of
general
to
border
our
vestment, it is
a ted
One
arhiPVPinpnt
rvf
the
fulfilled.
nf
sort
investment from
upon
be
these two markets that upwards
Investment in Canada.
I
is
industry of
RHCZ.
would
must
promise of the future
that
sensitive
impression that Canadian growth
and expansion are preponderantly
if the
are no
have
of the United States and the
these
con¬
look
to
to
seems
both
tend
American
which, it
vested interest in the prosperity
Little
is
investment. This is
and
?
the next few weeks it
should
in
Industry of Discovery >
The sad news about President
This brings me to my final point;
Eisenhower cast
a
gloom
over
the impact of technology on
trade
the
Today
therefore,
case—he
to.
last of those four great factors
Eisenhower,
helpful in advancing his candidacy; and, three, if the
were to
resign—which Mr. Babson hopes will not be
prove
;
.
lain
has
trade
friend of President
bi-partisanship;
omists has aptly called this factor:
"the industry of discovery." ;
concentrated.
found, in the fact that on a
capita basis, Canadian invest¬
per
token
a
—
prise
the
is
so
best
by
for an answer.
vast
of
i
climate
opportunity in
a^
At the turn of the century 55%
°' our exports found a market in
United
imagine that I am
or
self-righteous
that Canadians hold
any
Canada's
Canadians,
boastful
»_i.
a
figure is 13%.
border "open boundless economic
opportunities."
being
answer to
the
market.
not
supplanted
Nixon handle himself well
short-sighted not to keep looking
inter-de¬
that
either of these questions
moment. I suggest, though,
a
Mr. Babson ventures several thoughts
concerning the Presi¬
dent's illness. He believes, one,
political bitterness should be
over the last decade?
It would be a bold man, indeed,*
who would venture a categorical
Britain.
the
of
trade
in
Writing in terms of being
invest-
and
remain
their
is, however,
trade
President
customer and
is
which
merit
nation.
States
It
was
the
1o
the conclusion that invest-
escape
ment
fact
well-
a
is
ig
By ROGER W. BABSON
rather, likely to
the pattern of
has characterized
that it would be impiudent and
Historically, the preponderance
of
growing reservoir of
skills
5
The President's lUnes
meet
we
your own country's very consid¬
erable exports look to Canada for
It
the
has
our
that
to
are
these
for
as
Canadian-American
pendence
inter¬
market
^
a
technical
today
capital
we
best
United
of
political
investment
Canada
for
products,
if
Sam's
customer.
relationship.
this
pulp
Canadians, let me assure you,
keenly aware of the fact that
national obligations is a dominant
factor
for
to
distort
international
are
unblemished
integrity
well
as
great trading
field, I think
Canadian-Ameri¬
can
relations
are
as
unique as
they are auspicious.
The respect which Canada en¬
voys in your country and abroad
for its political and social insti¬
and
and
markets
the
look
must
will agree,
tutions
to
manufactured
In the investment
you
is
commodities
nar—
nationalism under the impact
row
wheat
our
and paper products.
those backward countries which
exploded in manifestations of
for
they,
and
growth
better
us
Soviet imperialism?
of
are
limit
ada,
Thursday, December
.
Some Reflections About
greater freedom of trade and in-
t
■
and Investment
for
Open Trade
Trade'and
Investment for
porting countries as they
trayed in the histories
Century imperialism.
.
I have
13
page
.
BRIDGEPORT,
Adds
Chronicle)
Conm--Chai-
Simpson and Alan J. Zinser <
with Norman F. Dacey & Asso
E.
ates, 114 State Street.
IIt
^
Number 5696
186
/olume
r
.
.
.
The Commercial and Financial Chronicle
(2445)
pansion of instalment credit
Quality oi Consume! Lending
Commercial Banking's
rather
Some
ess
Mr. Balderston outlines the development and extent
lending; looks askance at
sumer
wer,
resi-
[ be
credit
consumer
dent
of their
outstanding and reminds
is large, the quality
When debt
if
be
especially
calls
lending
examination.
andid
iage
in
if credit
true
general, and of bank
in
ticular.
lar(
in
par|
our
electioi
nomic
ild
In
dai
most
credit,
credit
abol
chasing
ing.
I
into
ha
of
'eeast,
ne
hi
elf
v
Chri;
*
influences
-ongr<
redit
:onsumer
he
his, influence
w
;ateme
is
iowever, only
at Pries
jutions
Allied
ays
e
redit
the
Also
onsumer
aij
umers
visit
istimoi
aI
loans
of
redit,
)ast
I
of
Before discussing the
epaymcnt.
[uality
con-
assurance
instalment
consumer
briefly
review
shall
growth
its
and
its
prospects.
loins
In
pi.
Credit
instalment
ncreased
mounted to 4%
nklin 1
ome;
Instill
in
ncome
3%
1929, 10%
For
now.
itizens
east
who
devoted
m
half
such
of
our
debt,
their
of
to
level
in 1939, and
the
have
one-fifth
resent
n
of
has
in 1940, 7%; and today it
11%. Repayments took 6% of
s
inves
role
credit
markedly. In 1929, it
of disposable in-
lgest si
;
the
decades
recent
onsumer
at
The
outstandings and
that is dictated by the pruboth of lenders and bor-
ence
owers.
About
9%
of
income
our
is
irobably being devoted to servic¬
ing the debt incurred to buy du■able goods. The proportion of inoine used to service this debt can
increased
>e
ion
used
only if the proporto
buy
nondurable
[ioods is cut.
ector
'aid
for
ersifk
ire
Dmpan;
>asis,
>d
Proj
f
Pre?
or
oans,
<j
t
aded
;
and
lot
>JXCLK)
GeorJ
ffin,
J
w
$
of
1
iser
be
the
devoted
of
the
to
credit
first
when
was
experienc-
great growth, it was
exceptionally
expansive force
n the
economy. Also during most
the. 1930's, its role increased
folatively. During World War II,
however, it fell to very low levels
tfith the suspension of
production
if consumer
durables and the in-
leasing liquidity of the
ng public.
consum-
Its great growth
war was
in part a
its
secular
a4dress by Mr. Balderston
sum
II.
!?*"
^ntTal
since
reaction to
atrophy, and in part
of
Convention
of
the
at
the
Con-
an"eis Association, Atlantic City,
Asso
Commercial
been
few
of
very
years.
credit
been
of
purchase
con¬
goods other than autos, in¬
creased 5%.
The development of
sumer
revolving
not been
a
credit has apparently
major factor in the ex¬
pansion of total instalment credit
during
the
last
three
or
four
years.
related
Closely
cash
ment
loans
instal¬
the
are
that
have
been
during
the
past
two
an annual rate of about
Their
has
growth
to
have
in¬
stable
rather
stantially
been
there is
for
about
apparent
no
in
the
J Another way
sumer-debt is
future.
near
growth raises interesting ques¬
as to the cause and probable
duration.
Personal
well
as
used
to postpone
cash
loans,
as
may
be
revolving credit,
the payment for
purchases that have usually been
paid for in the past
out of cur¬
income.
rent
To
the
extent
that
they are used for such postpone¬
now
advisable.
that
the
of credit granted and
better
When
terms
markedly in
1952,
standing rose rapidly. When ma¬
turities
lengthened
and
loan
ratios
liberalized in 1954-55,
were
outstandings mounted again.
8%
and consider¬
ably greater than that of income.
This
a
gain
year,
of
the
past two
ten
on
36-month
a
The
Quality of Credit
Experience
with
lenient
terms
proven
reasonably
after
of
to
be
acquisition
supported by the
used
to
for
buying
the
explain the
pur¬
consumed
cannot
same reasons
use
of credit
expensive -durable
goods.
age
factor
is
the
changing
distribution of the population.
in
durable
consumer
last
outlet
debt
consumer
for
goods.
saving
has
been quite important for the
past
12 years.
After the war, stocks of
needed to be replenished;
goods
then
people wished to improve
physical well-being. Now
their
that stocks of goods in the hands
of
reached
have
consumers
their
present high level, whether meas¬
in
relation
income
to
rise
to
at
rate
a
to
or
greater
than that of other investment and
other
debt.
expansion
instalment
of
credit has been aided by progres¬
lower
longer ■ maturities
and
down
payments.
Over a
period
of
sively
turities
and
30 years standard
on
1955
paper
ma¬
have
12 to 24, then to 30,
to
now
auto
new
from
grown
36
perhaps
when
the
of
use
months.
the
36-
month
maturity first became fre¬
quent, it was not clear just when
and how the progressive liberal¬
ization
of
But the
good judgment of lenders
maturities
might
36
months; for two years
little
inclination
limit
has
exceed
to
evident.
been
end.
maturities
did stabilize maximum
at
now
this
Despite
the increasing
proportion of busi¬
terms,
evidence has appeared as yet
no
that
delinquencies,
payments
While
repossessions
are
obtained.
delinquencies has
on
low
a
maturities
on
to have
continued to increase, the amount
of credit granted in relation to
paper
values
car
ized.
appear
seems
In 1955
of loans
and
losses
a
level;
reposses¬
have
not
problem
used
car
so
were
disclose
a
to
have stabil¬
sizable proportion
large relative to the
After the
that
too
still being made
Time may
many
loans are
in excess of auto¬
value, but the
wholesale
mobile
judgment of lenders will
doubtless inhibit any considerable
business
being
made
Jones
of
the
again.
Mr.
Board's
Homer
staff holds
the view that loans which are ex¬
especially
when they are
tremely large in relation to value
of the security have proved more
and
risky
young
families
getting established
building up their stock of
durable goods. Just as rapid fam¬
ily formation during the postwar
period has helped expand con¬
sumer
credit, its expansion dur¬
ing the next few years may be
dampened by the low birth rate
of the 1930's. But when the higher
birth
war
rates
years
family
of
are
the
war
and
post¬
reflected in higher
the rapid ex¬
formation
than have those with ex¬
tended
maturities, provided the
borrower has a reasonable equity.
This experience
1955
of
that
are
far.
,
lenders
some
markets,
pre¬
How¬
have
may
have
not
terms
because
that,
and
sound
basis.
being
directly
consumer
with
volume
credit would
sumer
the
be
of
con¬
kept
Consumer
have
on
a
bankers
with,
concerned
credit,
ade¬
special
a
obligation in this regard.
Elmer Myers Joins
John R. Boland Co.
Effective Dec.
will
Dealer
Mr.
ac¬
Myers
experience
prices
of
used
should
cars
the
repossession rate would be
likely to increase and the loss per
to
car
[
rise.
How
i •
the
present
credit
consumer
volume
of
might fare in
downward movement
a
business
of
activity or of prices might well be
pondered.
Consumer credit has
had
a
favorable
experience in
past recession, notably in 1929-33.
In fact the experience with it has
Boland
and
the securities
if
fall,
or
R.
tivities.
sulted in substantial losses. But if
decline,
John
Rela-
tions
Wholesale
incomes
should
1, 1957, Elmer E.
join
Co., Inc., 30 Broad Street, New
York City, as Vice-President in
charge of
re¬
field
in
extends
over
period
a
of 40
yea r s,
covering
types of
all
secu¬
rities. He first
entered
t h
"Street"
1915
e
in
with
>
Hodenpyl
Elmer E. Myer.
Hardy & Co. Inc.
and
later
man¬
aged their trading department for
been better than with most other
many years.
Following the dis-r
However, in 1929 solution of Hodenpyl, Hardy Se^
curities
outstanding
Corporation, he devoted
several years in
amounted to only 4% of dispos¬
travel, both in
able incomes; today it is 11%. At Europe and this
country conduct¬
that time, maturities on durable ing personal
surveys.
instalment
goods
credit
seldom
paper
months;
Down
common.
doubtless
were
since the summer
may
explain why loans
large relative to value
tion
their
of
instalment
of
finance
terms
it
is
have
propor¬
much
was
now.
the
con¬
servicing
In
field
no
volume
since
and
But
1929.
possible
that the good ex¬
perience of the past may have led
to volume and terms that
prudent.
im¬
are
this
such
Prudent
A
Limit
of credit, which is
integral part of the econ-?
should now prove less safe.
type
omy,
These
conclusions
not
are
There
questions.
must
be
but
some
loans made to buy rapidly depre¬
ciating goods, and to the amount
of
relation
in
loans
of security.
ask
It
whether
dence
have
may
be relevant to
limits
the
value
the
to
of
pru¬
exceeded
been
and
whether the long run
interests of
lending
business
and of the economy call for anal¬
consumer
The
of
soundness
the
of lending more
cost
than the
dealer may be
the
practice
new car
open
duly restrictive in their lending
policies and thus injure the sale
of
durable
goods unnecessarily.
The practice of making loans in
of
dealer
the
collateral might
the
long
Some
heard
probably
about
credit
sumer
peacetime
a
Board
interest
run
of
cost
the
be eliminated in
of
both
and of the economy.
lenders
staff
result
the
have
study
Sutro
ices in 1942.
remained
Armed
Serv¬
Mr. Myers saw active
in
Tank
.1942-43.
he
the
Bros.
trading
France
in
1918
with
Corps and in Africa in
Following his discharge
from
the
Army he prepared a
"top secret" report for a govern¬
mental agency before
re-entering
the securities business.
From
1944
member
of
to
the
1947
B.
them
he
W.
to
an
be
was
Pizzini
a
or¬
interlude
Vice-Presi¬
of
of
this
or
con¬
authority
the
"special
study,
that
to
Mr.
charge of sales.
Myers is
izers and
of
the
tion
one of the organ¬
former Vice-President
a
Security Traders Associa¬
of
New
York.
Commander
Foreign
Wars,
Corps
Post
r
War
the
of
of
of
Senior
Tank
American
the
World
Corps Association and
of the B.P. O. E.
he took
Past
a
the
of
member
Tank
is
Veterans
presently
Vice-Commander
Legion,
He
the
of
interested
For many years
active part and is still
an
in
assisting paraplegic
veterans in V. A. Hospitals in the
Metropolitan vicinity.
Answers
Investor's
lo
Yr.-End Tax
Question
Sheldon V. Eckman, tax expert,
New
at
School
session
today,
Sheldon V. Eckman, tax expert
of
S.
D.
lecturer
Leidesdorf
at
Institute,
will
and-answer
vestor's
N. Y. U.
&
Co.,
and
and
the
Tax
head
session
Year-End
a
questionThe
on
Tax
In¬
Problems
at the New School for Social Re¬
seen
completed by the
earlier this
year.
concluded
consumer
where
entering
service
the
joined
to
question.
Not only are lenders
likely to experience losses larger
than they care for, but if their
experience should turn unfavor¬
able they may then become un¬
excess
he
manager of their
department
.until
dent in
an
creased.
seems
as
indeed be unfortunate
It would
if
As
terms
1934
rejoined
proportion of 36-month ma¬
turity auto loans has steadily in¬
the
In
& Co.
ganization and after
,
Setting
Board's
of
goods
that
the
debt
altered
so
the
The
to
smaller then than
of
in
incomes
devoted
sumers
substantial;
more
buyer's equity
purchased, larger.
12
un¬
then
payments
the
have declined in volume, whereas
Liberalization
exceeded
36 months is not
now
prudent limit to the maturities of
average
car
new
the
&
done at the maximum
ness
reached
was
believed
kinds of credit.
Maturities and Delinquencies
The
clusion
Myers
been suffering repossessions that,
in view of the
strength of the
Consumer credit seems to be used
by
have
saving
capital
is invested in
monetary measures and the
application of sound public and
private fiscal policies." This con¬
The
ever,
volume of such liberal loans from
Another
to
good.
saving. Although most
finds outlets as business
some
eral
American Bankers Association
since remained stable.
items
more
outlet for
debt,
developments
restrained by the use of gen¬
are
series
review.
Financing
these
appears
ysis of the trends.
of
With
sented
government
credit
is
un-
price stability, the rate of growth
in credit
outstanding may decline.
great splurge of 1955, the pro¬
portion of these very liberal loans
.was reduced
somewhat, and has
chase
basis.
stabilization of average maturities
and with reasonable business and
emergencies or purchases of ex¬
ceptional size they merit a critical
payment rather than for
years
has been made possible by the in¬
creased proportion of paper writ¬
sions
as
potentially
quate control of total bank credit,
and with the following of reason¬
ably prudent policies by lenders,
gradual,
about
con¬
investment
or
stabilizing
interest
more
as
an
if
served
feels
Board
public
Board
1956-57, though
has
still
been
the
of
Tne
The
broad
rate of increase in
value of their security.
ment
outstanding.
lengrnened
credit
out¬
were
of looking at
rapid than that of other and losses have been greater on
types
of instalment
credit
and this long-maturity paper than on
now
equals 2.6%
of disposable {short when careful quality stand¬
income.
The rapidity of this rate ards are used and adequate downtions
have been associated in recent
times with the increase in amount
remained at
more
of
to
holdings most strik¬
why it should change sub¬
reason
In
the
for
Instalment
m e.
banks
3
total wealth, it may be that this
type of investment and debt will
for
credit has
in¬
creased 6% during the past year
compared with 5%
increase in
inco
have
from
sepa¬
account
national
share
No
neither
case
categories has
dynamic in the past
shortly
consumer
either
In
Unions
Credit
their
and
same
ured
available
these
be
1920's
continuation
2
portion
However, the
purchases made would
ts wartime
Chaij
I-IC'LE)
increasing
would
of
ng its
•he
L
current
revolving account
a
necessarily be disturbed.
In
in
ton
of
now
income
with the proceeds of cash
an
instalment
publi
re
on
purchases
lervicing of debt.
whi<|
itives
If
out
made
ncome
ittee
counts.
Sales
other
Revolving credit is statistically
conceptually included with
consumer
goods
paper"
though some of it might errone¬
ously be reported as charge ac¬
14%.
ome
is
hold-
88%.
at
and
roaching
in-
stores.
institu¬
their
to
at
ingly from 24 to 38%.
The per¬
centage held by commercial banks
"other
ontractual payments may be ap-
limit relative to
7%.
cease
growing,
years, at
a
credit.
them.
incomes
repayments.
of
retail
of
information
Charge
developments Affecting Quantity
of
plans
than
include
not
1939.
creased their
and
do
68%
increased
This
less
financial
are
holding 29
respectively much the
in
as
revolving
but
12%
reciprocal,
a
increased
from
10%
estimated
consumer
estimates
types
- rate
general
to those
are
who provide
total
of
revolving1 credit
consumer
dealers
who
terms.
Tli
5m,
their
velfare is enhanced only if direct
1
the
i
to
s
1%
These
people's wants, rather than to sell
comi
in."
acquire
credit
store
the
third at
a
about
As
companies
is
plans at department stores
order
companies cur¬
ment
to
by
finance companies and small loan
on
rently amount to between $300
and $400
million. This is abqut
20%
of all outstanding depart¬
insti-
from
those
their proper function
sell real goods that satisfy
aper
pr
at
financial
if
a
mail
and
gen-
femember.
i
ttlefie!
a
salutary;
It
receivables
the
credit
for
large
i
tonsumer
ely ho]
life
and
By
rally speaking, what is good for
banking is also good for
he economic system. This is true,
at tli
s
demand
the
goods.
credit.
consumer
;■ that
consumer
Januai
revolving
the
rapid
growth in the past few years it is
not yet a large percentage of total
For in-
stance, the
been
has
recent
volving credit has made
de¬
and
mand.
Canby Balderston
areas
greatest
need
interesting
in
nearly
1939
10 years and
credit account, used primarily by
the department stores.
While re¬
power
the
most
developments
years
flow of pur-
a
the
of
One
credit
consumer
from
end of
has
bankers direct
S'i'ess
income."
Revolving Credit Development
system.
the
portion of credit held
of course,
tions have
eco¬
managing
this
than
faster
in
classes of holders.
the present time.
the liberalizing of terms is- ap¬
proaching a practical limit, the
consumer
debt may grow
little
one
elements
vital
presei
is
the
of
par¬
Bank
credit
Possib
lk
the
sound basis.
on a
the
retailers
financiers
consumer
of
changes
1939
Most marked has been the decline
in
growth.
Is this rapid
postwar
growth nearing an end? If con¬
sumers
have now built up their
stock of durable goods to a de¬
sired relation to income, and if
for
This is
credit
er
instances of improper
some
since
among various
ings
the
•
con¬
Progress
striking
occurred
distribution
of
and cites
responsibility in keeping such credit
>uld
ie
have
Federal Reserve's
recent declaration against consumer instalment credit regula¬
tion during peacetime.
Ponders effect of a downturn on
lowering of quality of credit;
t
Federal Reserve System
may
resumed.
ue
By C. CANBY BALDERSTON*
Vice Chairman, Board of Governors,
-
21
5, is;
regulate
instalment credit is not
search, 66 West 12th Street, Nevr
York
City, this afternoon (Thurs¬
day) at 5:30
ets
are
one
fred
of
p.m.
available
a
Individual tick¬
for this
series given
session,
by A. Wil¬
May and Dr. Leo Barnes.
The
Commercial and Financial Chronicle
.
.
Thursday, December
.
(2446)
22
a tre¬ positions and their
respective nr
in business capi¬ guments, it is necesary to remei '
ber that the problem at
tal
goods
spending
took
its
place
fuses cause and effect. The pur¬
issue '
and the boom continued. Again, the problem
of
reconciling ik
pose of tight monetary policy is
few expected this
sector of dc-. need for stability and the neS
to stem demand by cutting down
mand to be as strong and con¬ for growth when these
on
the supply of credit. Since a
two goal
of Inflation
And the
debate between those
pitting price stability and maximum employment goals against
Chicago finance expert decries present
Senate
Singles out
a
that it would only do
goal ahead of the equally important other
important than the other, in asserting
harm to
place
one
Professor Solomon advises
one.
of economic
stability—as would be the case with the passage of such a bill.
Believes cost-push explanation of inflation is misleading as is
the implication that monetary policy is the wrong medicine.
monetary policy's freedom to act as an instrument
'
Causes of Creeping Inflation
The
standard
The
for
explanation
inflation
emphasizes the demand
equation. In
view, a general rise in prices
caused
by
side of the economic
this
is
too
much
mand
de¬
chasing
few goods
and services.
too
In
technical
terms, it is
of
excess
m
and
tive to aggre¬
gate supply, at
The
prices.
standard
prescription
for the malady
is
to
Prof. Ezra Solomon
forces of
the
stem
demand
either
by restricting money and
through restrictive fiscal
policy — a reduction of Federal
expenditures or an increase in
credit
or
Federal tax rates
According to
having is a
phenomenon.
start
a
or
both.
lot of people, the
inflation
recent
have
we
different
and
new
been
It is supposed
the supply side of the
on
I turn
un¬
demand.
and
text-book
cutting.
services, rela¬
current
cost
nomic equation.
to
eco¬
Rising costs, es¬
are supposed
Most recent
pecially rising wages
to push prices up.
in the opposite direc¬
tion.
I
this
and
and fiscal
turn
and
in
the
modern
Industry-wide
bargaining,
wage
demands in
wage
economy.
of
excess
pro¬
ductivity,, cost-of-living and other
escalator clauses, cost-plus pric¬
ing practices — all of these ; are
supposed to keep costs and hence
prices
moving
than
more
upward.
a
theory. It has
plication.
This
is
simple change in
an important im¬
The basic implication
of the
cost-push explanation is that tra¬
ditional restrictive monetary
measures
against
are
modern
useless
are
demand
and
not
than
important
the
use¬
conse¬
of
restrictive monetary
rise in interest rates.
interest is an element of
policy is
Since
is
are worse
an
They
affect
they
demand
culprit. They
useless
inflation.
because
less because
quence
than
worse
a
cost, this
rise simply aggravates
the rise in prices.
If this impli¬
cation
is
accepted,
two
others
follow:
(1) Inflation cannot be
prevented
without
restraint
on
the part of unions and
big busi¬
ness.
If exhortation does not do
the
job,
trol
over
only
some
kind of direct
con¬
wage-negotiations is the
(2) If there is rea¬
answer.
restraint on the part of
unions and business, inflation will
be kept in harness—and so
long
it
we
rather than gallops,
should learn to live with it.
creeps
My
own
view is
* Ay
address by Dr.
Annual
,,
ine
t.as
•
Convention
that the
cost-
Solomon
before
of
the
Association, St. Louis, Mo.
American
cite
me
Since
the
authorities
almost unlimited power to
restraining
monetary
demand.'
and fiscal
if
demand
that
follows
bring inflation to a quick
halt. They can do so with or with¬
out the cooperation of unions and
business and they can do so in
spite of all the so-called cost-push
they
generates
expenditures.
can
fiscal
and
which
three
items
which
be
is
of
ease
will
or
keep
us
monetary
stringency
exactly be¬
aimed
at
it
but
cannot
be
second
A
is
reason
pact on the economy. The effect
of
monetary stringency can be
partially offset by a rise in mone¬
tary velocity. This rise is due
to better management and more
efficient
utilization
The
third
price
stability is not the only goal of
policy. Maximum employment and
growth is also a goal of policy.
the
Under
had
tives
conditions
of
sort
authorities
had
been
only
is
to
prevent a general rise in prices
they could have done so by taking
drastic restrictive action in early
1955. But action drastic enough 1o
make quite sure that prices did
not rise would have prevented the
in
rise
the
output and employment
has enjoyed since
economy
This
1955.
and
brings us to our third
controversial
issue.
most
Should
stabilize
we
restraint
required
prices if the
and
(1) In 20 peace-time
1897
1917
to
before
from
years
institutional
cost-push factors existed—whole¬
sale prices rose at about 4\k%
per annum.
Since 1947 with all
the so-called
cost-push factors in
full swing, wholesale prices have
risen less than 2% per annum. '
(2) During the past 12 or 18
months, the price level of durable
producer
goods—for which there
has been
a
free
risen
has
price
.lot
a
level
of
more
than
the
durable
consumer
goods for which demand has been
relatively slack.
and
in
costs
have
each
Although
gone
industry,
up
risen
about
8%
much
as
construction
machinery and equipment
have
wages
per
prices
annum
whereas household durable goods
haveVisen only about 3%.
(3) My third item is really a
question.
Maximum Growth
The
issue
of
maximum growth is by no
new one in this country.
versus
means
a
In fact much of the economic his¬
tory of the United States could
plausibly be written in terms of a
other
sometimes
—
—
sometimes
toward
unemployment. The costpush factors complicate this prob¬
lem
enormously. Policy must at¬
tempt to correct for these forces
—but it must not over-correct, or
it will push the economy toward
the opposite hazard.
The recent inflation
deflation
was
our
for
inflation because interest is
a
the
dollar,
sound
good
the
be
accurately in order to know which
kind of correction is necessary and
how much of it should be applied.
should
be
our
—
sure
but
in
problem
would
be
how
1954
in
against
many
and
1956
inflation
and
in¬
people
1955
that
and
1957
not
un¬
goods and houses. A lot of people
expected the recovery to be short¬
lived because they did not believe
and
would
right
and
eventual
source
they
take
of demand would
nothing
its place. They
saw
that
were
the first count—consumer
expenditures
on
durable: goods
on
and houses declined
fairly rapidly
the
collapse.
Nobody denies
evil
of pure credit-fed
infla¬
But this is not relevant
to
tion.
the issue at stake.
there is
icy involves.
In such
a
con¬
conflict of p0lis clear that, the
no
It
of
the paramount
A condition
prices should bt
goal of policy.
of
serious
unem¬
ployment exists when gross out¬
put is falling. This is also a great
evil. ■ But again it is not relevant
in the present argument, because
there is no conflict of policy in¬
volved.
When serious
unemploy¬
exists, it is clear that the
ment
re-establishment
is
ment
policy.
the
full
employ¬
goal 0
V
\
/,
of
paramount
The problem of reconciling ;
possible conflict of policy exists
only when neither unemployment
inflation
is serious.
riod since 1955 is
The pe¬
good example
a
of the kind of situation in whicti
potential conflict of goods ex¬
and
policy must choose oi
compromise between the needs 0
growth and the needs of pric<
stability. It is within this contex
ists
that
must
we
evaluate
the
alter¬
native suggestions that have Ijecv
put forward.
gether
as
The injection of
which
guments
different
serious
inflation
credit-fed
pure
ar
apply in alto
situations, sucl
unemployment,
i
s
m p
01
1
confuses the issue.
The present
Congressional man
policy is exer
wh;i
weight should be given to each oi
date under which
desirable
goals
conflict iin
but
employmeni
maximum
of
and
price stability. The goal out¬
by the Employment Act i
"maximum employment and pro¬
lined
duction—consistent with the other
goals of national policy." Price
stability as such is not mentioned
as a goal but is obviously implied
in the act.- Neither does the Acl
define
what; it
means
maxi|
by
ity and less on growth and some
would prefer a, greater emphasr
on growth and less on stability.
The important question now a|
debate.
One
difficulty to forecasting the future
flation
and a
diversion of investment from
productive capital formation.
All ol
this leads to pure inflation
this
should solve the problem
reconciling the goal of maxi¬
mizing production
and
growth
we
be
is
saving
debate arises because some
monetary policies. There
shades of opinion on
many
should
everybody
of
stabilizing prices.
To simplify matters, we will dis¬
cuss the two extreme
positions in
are
how
should
a
circumstances.'
excesses ]
speculative
disappearance
with the goal of
expansion.
economic
were
Under these
have
we
cs
ere
prjJ
spiralling
of
some
is
Almost
level.
a
Since 1951 the
Federal
Reserve System to the
best of its ability has been free te
pursue
both the goal of stable
prices
and
goal
of maximun
growth. By and large, both goal
have been pursued and, with con
at the cost of
even
action.
last,
is that tight
monetary policy and rising inter¬
est rates is the
wrong medicine
and
achieve perfect corrective
In the first place there
cost-push
theory to the implication it seems that this
to have suggested.
This
implication
the
of
pro¬
at the
even
inflation,
some
proponents
the
example of how difficult it is to
is
an
when
of
cost
between
position is that maximum
growth in employment and output
If all that is needed to
chief enemy?
Let me turn from the
conflict
current
the
or
ation results in
the
price-stability
tion
toward inflation
rise in
,1930's
Price
vs.
Stability
In recent months the issue has
flared up again in connection with
employment?
inflationary rise, is
In late 1954 and early 1955 the
costs, I wonder why we
recovery from the recession was
didn't try this simple remedy dur¬
sparked by, a tremendous upsurge
ing the Great Depression of the in consumer
spending on durable
produce
re¬
the size of ours
generates many forces that swing
it off the ideal path in one direc¬
economy
•
heavy demand—
very
device.
wher
cised is reasonably vague on
A
process.
exact
an
so
employment
output?
ing of the inflationary
simple'or
a
do
to
strains the growth of
not
steering
policy is
that
responsibility
essential for any true understand¬
the
economic
told
occurs
output/ is operating at full
pacity and continued credit
a
their
ponents of expansion,
of
we
since 1954 these objec¬
If
the
credit
conflict.
forget this fact.
serious inflation
nor
have
mechanism
because
avail¬
that
is
reason
tained
the
the
of
able volume of; money and credit.
ing and that the demand factor is
that
there
that
policy action and its im¬
between
cost-push explanation is mislead¬
clearly
the
time-lags and other loose links
are
basic
fairly
monetary
reason
one
perfectly and continuously main¬
indicate
a
sonable
as
Let
in April, 1956.
A
stabilization
denying that costs play tween these two hazards and ex¬
discussions of inflation in the press
a part in the inflationary process.
actly on the path of non-infla¬
and by business leaders have been
The important point is that de¬
tionary full employment. Ideally
stated almost entirely in terms of
mand—demand backed by money we
would like to have the econ¬
this cost-push explanation.
The
—must be there at all times in
omy poised forever on this mid¬
role of demand has been almost
order to keep goods and services
way path—on the brink of infla¬
completely
neglected. * Instead,
moving
at
successfully
higher tion, so to speak, but without an
modern inflation is supposed to
price levels. The cost-push ex¬ actual rise in prices.
originate in cost pressures which
planation ignores this vital point.
Now
this
ideal
position
can
arise out of institutional practices
current
recession
not
v"
everybody
underestimated
strength of the boom.
of
excess
not
am
diagnosis that inflation and
was
the
prime
their
A good part of
t|1(
confusion arises
becausi
current
the debaters
dition
an
reduce
in
a
serious
greater evil.
by
traditional credit
policy? The answer is a
aggregate
demand is a necessary factor in
the inflationary process, it follows
that inflation can be prevented by
have
the
wrong
were
is not
debit,
inflate
unemployment is ut
serious
or
It
whether
enough. And it was not applied
hard
enough
because almost
inflation
modern
clear-cut yes.
Since
that
convinced
was
Reserve
conflict.
about
be
to the second ques¬
now
degree
in
demand
more
he
Federal
in
are
policy did not stop the inflation—
it was not applied hard enough.
And
it
was
not
applied
hard
Can
prevented
Controlled?
Be
.In the short-run, demand is the
dynamic force which starts the factors which have been built into
price level moving. An excess of our economic
system.
aggregate demand relative to ag¬
Why have they not done., so
gregate supply will cause prices
these past two years? The answer
111 general to move upward.
This
lies in three factors. (1) The prob¬
applies to the price of labor as
lem of human judgment, (2) the
well
as
to
commodity
prices.
nature of monetary control and
Without the pull of monetary de¬
(3) a potential conflict of goals
mand, prices in general cannot
between price stability 011 the one
rise
and
sporadic rises that do
hand and growth on the other.
take place cannot be sustained.
Price stability is only ONE of
Rising costs are obviously an
the
goals
of
overall
economic
important
factor '/because
they
policy. Another important goal is
hasten the rise in prices. But even
the promotion of maximum em¬
more
important is the indirect
ployment and growth. Inflation is
effect of rising costs. One party's
only one hazard. Unemployment
costs are another party's income
is also a hazard. There probably
receipts. When costs rise, receipts exists some
rise
Even
enemy
Inflation
Can
analogy is that
both blades of the scissors do the
for
goods
of
to be.
kept on
out
turned
it
as
This
justified and dangerous. The ar¬
gument about the relative role
played by cost and demand in
determining price was settled 80
years ago.
The correct answer—
both for the price of a particular
commodity and for the general
price level of all commodities, is
that price is determined by the
The
de-
d
a n
an
are
tinuous
When the Federal Reserve
tight
may have
tion.
misleading
is
its implications
that
and
interaction
ag¬
gregate
explanation
push
tight money
higher interest rates on demand,
and hence on inflation, far over¬
whelms any cost-push effect it
not emasculate flexible
we
our economy
.
bill recently introduced in U. S.
which would legislate one of these two goals as more
other.
mendous upsurge
credit is anti-infla¬ tightening credit in early 1956 in
tionary.
The
cost effect
is a response to price-pressures gen¬
erated by the capital goods boom,
negligible
by-product
of
this
they did so in the face of con¬
process. Even in the case of publio
siderable
opinion
and pressure
Utilities where interest costs may
have
some1 importance,
interest from glmost everybody else — in
and -out
of
the-administration;
charges probably comedo less
than 5% of total costs. The restric¬ Nobody can doubt Mr. Humphrey's
stand
with
regard to inflation.
tive effect of tight money
and
and
School of Business, University of Chicago
each
in
is financed by credit,
Finance
However,
mid-1955.
after
•
lot of the demand
By EZRA SOLOMON*
Professor
costs lead to
This analysis con¬
higher
and
cost
higher prices.
Reconciling Oar Economic Goals
5, 19571
the primary
policy. Price
a
secondary
goal
of
stability
goal.
Wc
prepared to accept a
creeping inflation that may result
from
the
pursuit
growth.
The
.
of
maximum
.
second
and opposite posi¬
price stability should
be the primary goal of economic
policy.
Monetary policy should
permit
the
maximum
rate
of
tion
is that
growth compatible with
abso¬
an
lutely stable price level.
Each
position emphasizes the
vital
importance of its chosen
goal and is willing if necessary to
sacrifice
Both
the
alternative
positions
judgments,
an
sading
a
and
goal.
involve
element
value
of
cru¬
employment.
mum
siderable
have
success.
preferred
issue
is whether any
.
nize
price stability as one
possibly do some good.
any
move
the
two
goal 0
stability
matter.
rent
is
as
Howeve
to set absolute pru
the primary goal 1
two extreme
evaluate
,
policy.
Such a mov
would
simply
make
exphci
something which has long hoc
an implicit tradition.
As such 1
would
do
not
harm and nugHj
economic
ideal.
to
useful pur
is served by explicitly legis
lating one of these two goals a
primary and the other as second
ary.
My own opinion is that tnt
explicit recognition of one goal a>
primary and the other as second¬
ary would do only harm.
Boll
goals are important.
A bill has been submitted in tn<
U. S. Senate which would recog
pose,
policy
order
somewha'
stabil:
a
greater emphasis on price
tendency to exag¬
gerate the tragic consequence of
departing from its own particular
In
present
would
The
an altogether differei
It represents one ol m
debate.
positions in the cui
The
other
extrem
186
Volume
Number 5696
.
.
PICTORIAL
The Commercial and Financial Chronicle
.
1
Security Traders Association of New York
Hank
Serlen, Josephthal A Co.; Arnold J. Wechsler, Ogden, WechCo.; Nat Krumholz, Siegel A Co.; Jack Ohlandt,
New
York Hanseatic Corporation
sler
M
'a
■
\'
.
:.:.
-
'
■
..
./
,
.
.
Edmund
well,
W.
A. Whiting,
E. Hutton
Carl
^
......
■
; a; a; {: a af
•
.
>
V:>::
: a: >a
' <%
.
a; iaaKa.,
' vJ:/ W
■
A Co.; Jack Wielar, McManus <ft Walker; Samuel ColEdward Zinna, Smith, Barney A Co.; Bob Topol, Greene and Company;
M. Loeb, Rhoades
A Co.;
Jack
Charles O'Brien Murphy III, Pearson, Murphy
Co., Inc.; Don
Hall, Hoit, 'Rzse A Company; William Salisbury, Eastman Dillon,
Union
Securities A
William McKeever,
Reynolds
A Co.
» ?n Co.;
"
»«"
n
,r
_
*MZ&.
■'
.v
A.c
-
;/;::A^ia
Gerard Burchard, Charles King <£: Co.; Ed Markham, Wertheim A
Co.; B. J. Clancy, Merrill Lynch, Pierce, Fenner <fi Beane; Hal
Murphy,
u.. Financial
r:
.•_! Chronicle
r*u
Jack
Cirenza, Gregory <fi Sons; Joe Conlon, Grace Canadian Securities, Inc.; Jce Hayes, Gregory A
Jack Barker, Lee Higginson Corporalion; Bob Brcar'ey, Wood, Gundy A Co., Inc.;
Bill McGovcrn, Gregory A Sons
Sons;
..
Manson, Hardy A Co.
I^
Stanley Kulakowski, Merrill Lynch, Pierce, Fenner A Beane; Jack
Thompson, Wertheim A Co.; Bob King, Charles King A Co.
Bill
Carl Marks & Co., Inc.; Fred Loeliger,
Kuhn, Lceb & Co.; Leon Yaeger, Stern, Lauer &
Springer,
Steve McDonald, W. E. Burnet A Co.; Jerry
Son; C. P. Curti, Hayden, Stone A Co.; Ed
Carl Marks <fi Co., Inc.; Charles Politis,
Co.; Reg Knapp, G. C. Haas & Co.
Hulsebosch, Godnick A
Horn, Kuhn, Loeb A Co.
Les Gannon, Western Securities Corporation, Jersey City, N. J.; Bill
Kumm, Hill, Darlington A Co.; Walter Mewing, D'Assern A Co.
Elbridge Smith, Stryker & Brown; Walter Filkins, Trcster, Singer & Co.; Bill Mulholland,
Cry an & Co.; Sylvester Bies, Edward S. Ladin Company
McLaughlin,
The Commercial and
PICTORIAL
2
Financial Chronicle
...
.
Thursday, December
g
Annual Beefsteak Dinner
Sam
&
Milt, New York Hanseatic Corporation; . Moe Altman, H. Hentz
Co.; Joseph Lann, Joseph Lann Securities, Inc.; A1 Tisch,
Fitzgerald & Company
Henry
Kuiper, Lord, Abbett & Co.; John
<£ Co.; Tom Trager, Merrill
E stab rook
W.
L.
K.
,
Jim
C.
Durnin,
H. D.
Knox
&
&
Co.;
Company;
Burt
Barysh,
Walter
Elmer
Weinberg, S. Weinberg & Co.; William Eiger, Goodbody
Arthur Burian, Daniel F. Rice & Company; Milton Capper
Capper & Co., Jersey City, N. J.
Halk, Tucker, Anthony & R. L. Day; Charles Jann,
Lynch, Pierce, Fenner & Beane; John Fitzgerald,
& Co., Inc.
Co., Inc.; Charles Ogden, Ogden,
Allen
&
&
Co., Inc.; Bob Pizzini, B. W. Pizzini
Weiss, Singer, Bean & Mackie, Inc.;
Auchincloss, Parker & Redpath
Myers, B. W. Pizzini &
Co.,
Mort
Inc.;
Harold
Burke,
Sheldon Silverstein, Reynolds & Co.; Harry Simmons, Simmons & Co.; Jack Sammon, John J: O'Kane,
Jr. & Co.; Frank Aigeltinger, Vickers Brothers; Joe Flanagan, John J. O'Kane, Jr. & Co.;
Pitfield
Tuzo, Union Service Corporation; Jim Crane, Van Alstyne,
Noel
Co.; Bob Topol, Greene and Company
Samuel
Bob
Kullman,
Kane, Shearson, Hammill & Co.; Clifford Channell, First
Corporation; James Kelly, Kidder, Peabody & Co.;
Arnold Wechsler, Ogden, Wechsler & Co.
Jack
Boston
John
Barker,
J.
O'Kane,
Lee
Jr.
&
Higginson
Co.
Corporation;
Co., Inc.
Walter
Johnson,
G. A. Saxton &
Wechsler & Co.; Harry Michels,
Ernest
Co.
CompanyMever^
Bill Meyers,
Legg
gg &
<*
company,
C°
Gordon
J°C ^rasowich,
Gregory
&
Graves
Co.;
Inc.; Gene
& Sons; Wilbur Krisam,
Brady, Gordon
Graves
&
Volume
186
Number
5696
.
.
The Commercial and Financial Chronicle
.
PICTORIAL
3
Nov. 19, 1957 at The Antlers
Green/ie/d
&
Hutzler:
Hutzler;
Ted
de
&Co., Inc.; Joe Smyth, Salomon Bros.
Martineill.
Jnsenhthnl
CK,,.,
Martinelli,
Josephthal
& Co.; Stan Shaw,
Josephthal & Co.
Ance O
Angelo
Joseph Carucci, /. K. Rice, Jr. & Co.; Julius Golden, Greene and
r>~
t~j
di
J
r
c
I
Company; Ted Plumridge, Eastern Securities, Inc.; Ray Kenney,
D. Raymond Kenney & Co.
:
Noble, Cowen & Co.; Sal Rappa, F. S. Moseley <fit Co.; Joe
Paul
Morton,
Peter
P.
McDermott
Riter
&
Co.
I-
I 'N
-• <•
>
'
"
>
H
1
'
.
,
~
'
-
o
.
<
.
*
i
'
Ed
Ceru,
r'.
Vanderhoef & Robinson; Barney Nieman, Carl Marks
'
Charles Zingraf, Laurence M. Marks & Co.; Tom
Mullins, Laurence M. Marks & Co.
-
Co., Inc.;
r*I
1-_
£
T!
r
1.
njr
i
_
a
r,_
.
rT*
Kelly, Carl M. Loeb, Rhoades & Co.; Joe Titolo, Harris, Upham & Co.; Bill Wittich, Grimm <£ Co.;
Larry Helfgott, Kuhn, Loeb <fi Co.; Herb Gesell, Kugel, Stone <ft C©„ Inc.
Murray Barysh, Ernest <£ Co.; Henry Kahn, Ernst & Co.;
Stein, Wm V. Frankel & Co. Incorporated ; Joe North
Francis I. du
Pont <fi
John
Co.
\
'
'
r-v
Co.;
o
&
1
1
U
'
\'
Cowen &
Carlo
v
"Duke" Hunter, Wellington Hunter Associates, Jersey City, N. J.;
Sam Englander, Englander & Co., Inc.; Dick Shipman, Leslie Securities Corporation; Ed Abele, L. D. Sherman & Co.
Roy Larson, H. D. Knox & Co., Inc..; Harry Casper, John J. O'Kane,
Jr. & Co.; Charles Offerman, Troster
er, Singer
& Co.; Charles Lye,
•
Billings,
Co.
&
D__.
i
.
■
'
'
-
,■
V-M,
\
-
f
'
K
<&'<W
<
'
■
:<
>
t
:
I
p
Jap!
•.
.......
/
Dick
Roberts, R. C. Roberts &
Bantel & Co.; Joe Kirk,
Co.; Frank Barrett, H. C. Wainwright & Co.; Rudy Petke, Garvin,
Deltzield & Delafield; Frank Pavis, Chas. E. Quincey & Co.
John
Stevenson,
-s
..
V
^
'
'««*£
\
V}\^
■'
v
9
Singer, Bean & Mackie, Inc.; Bernard
Sledge, McManus & Walker; James
Robert
.
t:
^ •,'
/.
Salman, Singer, Beane & Mackie,
Jones, McManus
Walker
Inc.;
4
The Commercial and
PICTORIAL
Financial Chronicle
Investment Traders Association of
FIFTH ANNUAL DINNER DANCE NOVEMBER
Hannah
and
Grace
Henry O'Shea, Drexel £ Co.
Sam
Laughlin; Ed Knob, Drexel £ Co.; Maryanne Knob; Marianne Hardy; Sam Kennedy,
Biddle £ Co.; Gracy Kennedy;
Rick Sanders, Butcher <fi Sherrerd
Kennedy,
Yarnall,
Yarnall,
Biddle
&
23,
n,an
Dillon.
Union Soonritie,
„
-
Mary
;
..
\
-
/ ■;;
V,
^curlt,„
Radetzky, New
EasiJoT'
Mr
(
&
"vofi,
Mr*
'
HtI
'
Co.;
■
?
"'Ji—f"
n
•
i
a
Mary
^
r-
•
t
New
mLT'^Ioo.incor'^aiT
C
Edgar
Florence
5, V-
York Hanseatic Corporation
-
and Florence Christian, Suplee, Yeatman, Mosley Co., Incorporated; Charles
Wallingford, H. M. Byltesby £ Company, Incorporated; Wally Runyan, Hemphill, Noyes
£ Co.; Jean Wallingford
Hudson;
Carol Rice.
Thursday, December
Mundy; John M. Hudson, Thayer, Baker £
Smith; Joseph Smith, Newburger £ Co.
Anne and Spence Corson, Elkins, Morris, Stokes £ Co.; Ed Gilleran
National ^aU'.noi
.
Philadelphia
Bill
-
Company, Inc.; Will Rice, EastA Co.; Virginia Mundy, Sally Muller
Larry Knowlan, C. C. Collings and
.
1957
Co.
Virginia
,
Christian, Sylvia Markman; Mary
Smith;
Jacqueline O'Shea; Kathleen
Sally
Muller;
Donovan
Virginia
Mundy;
Volume
186
Number 5696
.
.
.
position would set maximization
of output,
and growth as the pri¬
goal and explicitly remove
mary
tion.
of potential future inflation
during the recession. The impo¬
sition of an alternative operating
Continued from page
goal■— whether it is maximum
or absolutely stable prices
Do Rights Offerings Cause Dilution?
price stability as an objective in¬
sofar as it conflicts with growth.
The
output
arguments
which
have
for a policy of abso¬
been
made
lute
price
stability
will
avoid
ohe^ or the other of
But it will also emas¬
these costs.
culate
mary
monetary policy as an in¬
strument
of
economic
stabiliza¬
icy
tion.
the
as
pri¬
objective of monetary pol¬
are
drawn almost entirely
annals
the
from
of
credit-
pure
fed inflation.
They are tenuously
connected to the altogether dif¬
ferent situation under considera¬
tion
the
by
assumption
that
creeping inflation always becomes
galloping inflation.
Nothing in
the history of the United States
this
justifies
assumption.
T li is
approach does nothing to recon¬
cile the twin needs of growth and
stability—it simply makes an out¬
right choice of one
goal
Inv. Ass'n of N. Y.
maintenance
continuous
net
of
be
that
assume
President: William G.
this
Worthington
Merrill
Lynch,
could be
Estabrook &
ac¬
pressured
Treasurer;
into
that there would
so
always
tend
credit
relaxation
Would
of
2%
2%
per
this kind of
teed
pressures for
from
some
The
per
become
soon
of
be
economy.
rise
ceptable
rise
the
in
source
to
more
ac¬
annum
Under
less guaran¬
or
of the illof pure inflation would
a reality.
In other words,
inflation,
effects
become
many
big difference between
economic policy that is aimed
there
an
is
Co.
William
J.
Midden-
a
Lewis
J.
Kaufman,
Entertainment:
J.
G.
Peterkin,
Laurence M. Marks & Co.
Membership:
F.
John
Bryan,
Smith, Barney & Co.
Program: David C.
Clark, Clark,
Dodge & Co.
Publicity:
Burns,
- + f
^
AT
Committee
Nominating
The
F.
James
Blyth & Co.
I,,""
*.
consisted of:
B.
E.
de
O'Connor
H.
A.
S
1 d i
e
11
M.
A.
g,
(alternate).
E.
Frady,
Johnson
F.
(alternate).
R.
B.
McBratney, M. T. Ijams
(ex-officio).
P.
price stability but in which
prices may rise 2% and an eco¬
a
Philip, H. L. Parker.
continuous rise of 2%
In the first case, which is
the cur¬
rent siutation, there is enough un¬
certainty to prevent widespread
inflation
psychology.
The be¬
havior of consumers, savers and
businesses since
ing
testimony
fact.
is
1939
of
this
convinc¬
important
of monetary
The dedication
policy to growth an dthe accept¬
ance by the government of a 2%
rise as normal, could change this
very important safeguard which
now exists against inflation psy¬
chology.
All things
ent
H. G. Hoffman
virtually
is
which
policy
aimed at
tional
struction and
Development.
Reservations
should
made
the
considered the pres¬
framework within which pol¬
icy operates is superior to either
of the extreme
positions which
in
Opens
Henry G. Hoffman is engaging
a
securities business from of-
fices at 318 West 75th
York
Street, New
mopffinc'
in
Improvement
S c h oe ttler,
Wayne, Hum¬
expe¬
—.
Shareholder's
There
for
T. A. Kennedy Opens
WOODSIDE, N. Y.—Thomas A.
is conducting a securi¬
ties business from offices at 64-11
Kennedy
Woodside Avenue.
Form Mutual Funds Sees.
Securities
Cor¬
poration has been formed with of¬
fices at 39 Broadway, New York
to
City
in
engage
securities
a
business.
Chaskel Nussbaum Opens
Mark
stabilizing influences.
The proper function of mone¬
tary restraint is to withhold funds
from
potential demanders during
period of full employment and
rising prices. When demand de¬
clines and employment falls these
potential demanders can then be
Weisel
for
members
will
be
Company has
capital,
the needed funds was a
departure from past patterns of
supply
Careful Analysis Called For
Whether
not the sale of new
or
financing. The last previous publie sale of stock by IBM took place
stock
dilutes
Since that
vajue
0f
in
1925, 32 years ago.
the
company
has grown by
ference to
the
enhances
or
existing
cannot be
of
capital. I11 the postwar pe¬
riod, the company has become one price
of the heaviest users of long-term
common
stock
glibly answered by re¬
the
when
Rather,
ill market
decline
the
a
stock
goes
careful analysis
.blue-chip indus¬ is
necessary -to compare the con¬
corporations. From a debt of
tribution in new funds with that
$17 million in 1945 when it con¬
stituted 19.6% of total capitaliza¬ previously existing behind each
tion and surplus, the figure grew share.
More important, we must
trial
to
$330
the
million
mentioned for the
when
previously
determine
1956 year-end,
it amounted
whether the
hance
or
dilute
earnings
over
found among many
easing of credit conditions. If it
fulfills
h i s
function, - monetary
policy
can
make
an
company
contribution to economic stability.
The
cost
of
such
is
a
contribution
some
loss of potential output
during the boom and some crea¬
Schirmer Atherton Co.
Ore. —Nathan C.
with
634
manager of
has become associated
Schirmer, Atherton & Co.,
Street,
as
department.
President of
C. Fay & Co., which has
the institutional sales
He
was
Nathan
narily high market
to
formerly
been dissolved.
Hicks will
Mr.
assistant
tive
Year
Sales
Interest
(millions)
(millions)
—
Per Share
Book Value
serve
1953, he had been Ohio
(Dayton)
divisional representa¬
tive of Slay ton & Co., national
underwriters of Managed Funds.
Mr. Hicks had spent over
30 years in the insurance industry
in the organization, reorganization
and
management
of
insurance
companies and general agencies.
NASD District No. 14
Elects to Committee
has
Announcement
National Association of Securities
Trask
Sellman
H.
Frank
elected
Those
Dealers.
Co.,
&
Boston;
Massachusetts, New
Rhode Island
and
Maine,
of
Hampshire,
Vermont.
-
,
Howard N. Sellers Opens
DENVER,
Colo. — Howard N.
is conducting a securities
Sellers
offices
from
business
Forms Wilkins Couture
a
MEMPHIS,
Tenn.
gage
in
Walter
a
I.
formed with
Greer to en¬
business.
securities
Couture
is
a
principal
of the firm.
Paul Sturtevant
Paul
Sturtevant
Nov. 28 at the age
an
illness.
Mr.
passed
away
of 80 following
Sturtevant was a
New York
Net
Operat¬
to Average
Total Assets*
City.
Percent. Return on Average*
Common
Capitalization
&
Equity*
Surplus*
Earned*
12/31
ing Margin!
$32.20
21.6%
1.05
0.94
11.8
22.8
21.6
20.3
23.2%
13.3%
27.60
22.4
46*
4.43
23.80
0.85
1954
105.5
22.9
J 1.4
12.1
1963
410
4.60
21.70
0.87
98.0
23.9
0.81
11.9
83.8
3.49
25.0
334
19.70
1952
0.77
1951
267
79.9
3.51
29.9
13.7
17.90
1950
215
63.4
3.37
29.4
15.9
115.60
0.76
16.8
3.17
13.20
0.72
183
55.5
30.3
1949
excess
Wilkins &
—
Couture Co. has been
offices at 1229 South
5.32
"Excludes
1549
at
Washington.
$3.76
19.1
20.9
1
23.4.
26.2
yaat to
shaxe, net bcfoie interest \
i
straight-line depreciation rather than sum-of-digits method adopted that
on
1356 reported earnings, using sum-of-digits depreciation, wore so.o5 pei
1356
and the net operating margin was 21.0%.
ifAverage of year
profits tax of 1950-1953.
tBefore interest and income taxes.
5.
years.
Eugene R.
Davis, Providence, R. I.
126.1
based
were
Spencer
district consists of the states
The
$158.4
earlier
of
Hussey of The First Boston Corp.,
Boston; and Foster B. Davis, Jr.,
564
$154.1 million,
made
been
election of members to
District Committee No. 14 of the
the
of
$734
with
mutual fund
Before entering the
field,
1955
earnings
execu¬
Since
1956
1916
as
President.
the
to
price relative partner in Baker, Weeks & Co.,
previous earnings.
Net Before
Nathan C. Fay Joins
ton, President.
Ratio of Sales
J
important Congress
the table, the
paid out only 33%% in
in
Inc.
of Managed Funds,
announced by Hilton H. Slay-
was
The tion 111
capital gave the fixed charges a
more
generous
coverage
than
shown
Directors
contribu-
future earning power from
invested the new money is likely to en-
to 49.8%.
high rate of earnings on
been
^0 engage in a securities
Mo. —The, election
Vice-Presi¬
of Robert A. Hicks as
ex-
among the
debt
pia Road
PORTLAND,
re¬
oix
dent and member of the Board of
of Davis &
debt
years
Fay
their
and
arranged
Managed Funds, Inc.
ST. LOUIS,
Thp
a
induced to borrow by a deliberate
provisions
Special
R. A. Hicks V.-P. of
_
to the common 1957, the book value of a share of
ieverage> so impoi'- IBM stock was $32,90. By selling
tant in enhancing the return to shares at $220 the book value was
the common
stock through this paradoxically, "diluted upwards"
period, was the result of the com- to $49.00 per share. In this case
pany's unique and successful pol- the evidence seems clear that IBM
icy of heavy debt financing, below so enhanced the asset base, per
share that it actually gave greater
described in detail.
impetus to its growth
than it
New Pattern of Financing
could have possibly achieved by
The use of equity finneing to retention of earnings alone.
equit®
formed with offices at 1093 Olym-
business.
usual
at $4.50 each.
guests
quest.
period long enough to permit the
companies ad¬
new
capital to be put to work.
hering to the maximum of oneThe evidence in this case strongly
third
debt
to
total
capitalization
erating
level,
monetary policy
Chaskel Nussbaum is engaging
should be left relatively flexible in a securities business from of¬ and surplus conventional for in¬ suggests that the growth pattern
and free to act as a balance wheel fices at 250 West 57th Street.
dustrial finance. Further strength of IBM stock has been enhanced
in the economy.
The dedication
lay in the exceptionally high pro¬
substantially by its latest financ¬
of policy to a specific, pre-defined
portion of earnings retained and
Form Mark Weisel Co.
and variant goal will deprive the
the high cash throw-off from de¬ ing — an enhancement that was
NORTH BELLMORE, N. Y.—
made possible by the extraordi¬
economy of one of its important
preciation funds. For the eight
At the op¬
have been advocated.
the
are
guests
tables
return
centage
retaining earnings and the use
Funds
& Co.
mer
past
Eugene R. Black
.
time
City.
Mutual
be
early
with F. Girard
Interest rates had been ris¬
over
Bank
Recon-
for
several years,
as
the result of the tight money
Even at the rate made
situation.
ing
R.
Presi¬
dent, Interna¬
considering the tax de¬
Return
•
ductibility of debt interest, was
Equally important io the com- only 2.95%.
Even if the new
mon
shareholder
was
the im¬ money earned only the average
provement in the return on the rate of return made on all funds,
average common stock equity. Re- borrowed and equity, in 1956, of
turn to common dropped between 13.3%
the earning power of $220
1 040
rinrl
1 Oli'I
Ihon
ilin X'i\70
l j
i
d>nn r\i\
..I
1949 and 1952, then, over the five would amount to $29.00 per share.
years
1952-1956, it rose steadily The actual earning power would
from 19.1% to 23.2%, thus climb- be enhanced in time by the use
ing back to its 1950 level. The Gf the new funds as an equity base
table suggests that the 1952-1956 for subsequent debt increases alrise was mainly due to increasing ready planned,
leverage, as the return to total
This
extraordinary
piece
of
capitalization
and
surplus was equity financing should illustrate
essentially constant from 1952 to clearly why it is improper to ap1955.
Only in 1956 was there a ply the term "dilution" to every
rise sufficient to explain the per- new common issue. O11 March 31,
at
nomic
Black,
riiTOi'
Education:
Goldman Sachs & Co.
minimum
a
annum.
Egbert,
dorf, Wood, Struthers & Co.
credit
than others
C.
Richard
Secretary:
conditions when¬
ever prices were rising less than
2% per annum. In an economy as
diverse as ours, some industry or
region is always less prosperous
easing
to infer
however,
been
be
Eugene
processing field may lead to represented a yield of only 0.91%
-Tm* 4 IT/:*
nV—
1
AL
1
*•!
J
lower profit margins for the in¬ and the 1956 earnings yield was
dustry in general.
only 3.0%
on
this price.
The
overall "cost" of the new equity
IaittOm
Mayo
Smith,
Pierce, Fenner & Beane.
that the monetary au¬
means
Gallagher,
Vice-President:
ceptable inflation is defined as a
general rise in prices no greater
than 2% per annum.
In practice
thorities
dangerous,
dient.
latter
the
data
Kidder Peabody & Co.
begin. Let
or
will
operating margin will re¬ favorable by forehanded planning,
turn to its
1949-1951 level.
For IBM was to pay 3.75% under its
loan
one thing, the entry of new firms
arrangement with Pruden¬
At $220 per share its cash
such as Burroughs and National tial.
on
the common stock
Cash Register into the electronic dividend
William G. Gallagher
This is where
moderate
the
in
the
had
even
in
p.m.
the
Guest speaker
com¬
If so, the
company's
12:15
at
of
Palmer House.
that the
by defining maximum growth and
the trouble is likely to
the
Chicago for Fridajr Dec.
Lacquer
Room
1949
building program may lead to a
revex'sal of the decline. It would
even at the expense of
moderate inflation must end up
us
of
of
1957
Red
The falling mar-
margin.
operating
acceleration
growth
moderate inflation.
13,
Cheaper Than Debt Financing
pany's assets, the ratio of sales to
One of the unusual features of
average
assets rising steadily
through the period, and may have this stock financing was that it
contributed to the decline in the was a good bit cheaper than debt
been
; The other extreme position
equally unsound. The concept of
dedicating monetary policy to the
in
sales
of
,
.1956.
utilization
tensive
history of the
past
decade
might have
vastly different,
f.;V
in
Chicago
CHICAGO, 111.—There will be
luncheon meeting of the Bond
Club
Receives Nominees
as
economic
the
30.3%
21.6%
23
To Hear E. R. Black
to gross plant and equipment. This
high percentage presumably regin did not, however, lead to an suits from a high proportion of
equivalent fall in the return to gross
fixed assets invested
in
invested capital. Return on capi- rental machines,
talization and surplus, after fallThe unusual quality of the debt
The following slate
has been
ing from 1949 to 1952, remained is seen in a comparison of its $330
presented to the Investment As¬
million
total with the
1956 re¬
essentially constant from 1952 to
sociation of New York for officers
1955, and rose in 1956. The main¬ tained earnings of $49 million and
for the coming year:
tenance of the return to capital depreciation
allowances of $106
million.
was partly achieved by a more in¬
from
,
1946
Bond Club of
a
absolute
of
3
panying table. Operating income cash dividend^, retaining some
did not keep pace with sales, the $220 millions. Depreciation allownet operating margin before in- ances in 1956 alone totaled $106
come
taxes and interest falling million, or 13%
of the average
against the
price
stability regardless of its effect
on
growth
would
represent a
basic change in United States pol¬
icy.
A literal interpretation of
such a policy at the operating
level
could
be
very
costly in
terms of output and growth. Had
such a policy been in force since
A
other.
(2447)
The Commercial and Financial Chronicle
beginning and ending
values.
24
The Commercial and Financial
(2448)
Continued
from
could borrow
7
page
well below those they could
were
Chronicle
obtain for
by lending them to their customers.
As to whether such reductions as have occurred m the
tivity,
total
he
of
real
channels
human
of
more
the
into the
of humankind: in¬
purposes
energy
creasing redemptions
off. What is even more
in
the fields
of
the
arts
and
the
I
with the
management of the national debt,
we
the
in
Treasury have a par¬
ticular responsibility and concern
in personal savings because we
the
are
guardians
of
level
high
like
this
take
to
op¬
for the contribution of the Adver¬
Council toward
saving.
tising
America's
full
the
While
this
contribution
of
difficult
to
estimated
sector of individual investment—
that the total value of advertising
the Savings Bonds program. More
time and space devoted to this
than $41 billion of our E and H
program since 1942 is close to $1
Savings Bonds are outstanding at
billion.
Currently, this contribu¬
the
it
measure,
present time and
that
estimate
we
this
represents
40
million
owners—almost a quarter of the
population of the country.
has
dimensions
are
been
tion is estimated to be running at
more
than $50,000,000 per year.
To this effort you have given
your best talents and made the
importance of these hold¬
widest use of your contacts for
ings from the point of view of
and
display.
You
the Treasury cannot be overstated. development
have encouraged millions of fam¬
They represent about 15% of the
The
entire
holdings—we
the
that
chaser
IV2
growth
onto
years.
of
the
his
The
are
pur¬
bond
through
World War II and
through the
rapidly shifting conditions of the
program
In
past decade is the best testimony
I know of that the
Savings Bond
type of security
meets a genuine
Regular saving has become
a pattern for millions
of families.
Not only has it been a contribu¬
need.
tion
to
the
national
welfare
this
us
in
as
well.
age
of
responsibility,
All of
Government, in industry, in
labor, and as individuals, must do
but
Prudence
will
never
be
out of fashion.
Savings and thrift
mean
more
Enlight¬
security, better edu¬
ened judgment will always be at
cation for
children, home owner¬
a
premium but will eternally be
ship; and to meet countless other
individual needs.
indispensable to the preservation
of freedom and liberty.
The features of
saving
has
been
translated
to
will
liquidity,
ease
redemption
values,
and
of purchase through
payroll
other
or
Savings Bonds
a
plans, make
particularly good
investment for the small
a
kets.
While
there
redemptions of
during the past
dence
that
E
have
and
year,
the
trend
been
H
course
energy
is clear: in
civilization
we
our
high-
must work
prove
explore and invest, im¬
and create, always with one
in mind—that
the
lot
of
History is replete with the story
of
there is evi¬
those
who
have
failed.
The
future will be assured by the ex¬
tent to which we succeed.
in¬
Continued from first page
some
and
We See
the door of the so-called
eral Reserve
It
tight
may be that further
that had
developed on
tion
money
policy of the Fed¬
enlargement of the bubble
top of the boom
prevented by
raising the discount rate and in
maintaining moderation in its open market policy. Bubbles
on
top of booms are, however, hardly to be encouraged as
was
business
developments. Any real difficulty
which may now be
threatening to bring on prolonged
major disturbances must be charged elsewhere. Business
can
not
indefinitely thrive on cheap money artificially
maintained, regardless of the rate of spending and saving.
Money became dear—if indeed it could be called dear—
whether
to
as
not
or
there
are
basic
for
reasons
Only
a
-
William H.
of
doubts.
For
some
analysis of the situation definitely raises the
to whether greater
willingness of the Reserve
authorities to create
money will in any important way
contribute to the
general economic welfare at this time.
For a
long while past, indeed most of the time since the
as
system came into being, changes in the discount rate have
influenced the financial situation in this
country more by
other wav. Usually,
member banks were not
particularly in debt "to the Re¬
serve
System and were not much disposed to incur such
debt in volume
quite regardless of the costliness or the
cheapness with which such
borrowing could be done. In
recent years,
however, banks have borrowed more freely
irom
the
psychology than in
Reserve system,
New
nancial papers.
N. Y. Stock Transfer
Ass'n Conference
The
N.
frequent of
annual
Y.
will
Stock
be
conference
Transfer
held
Waldorf
the
Saturday,
Astoria
-
of
the
Association
Dec.
7, at
Hotel.
The
meeting, which will be attended
by; members from throughout the
United
States
begin at
and
2:30
Canada,
in
p.m.
Gallery of the hotel.
the
Consumer
time past reports have been
Gumpel
Stern, at 30 Broad
York City, as a regis¬
representative. Mr. Gumpel
has been a frequent writer in fi¬
very
such
&
tered
prices have begun ^ at
length to hesitate, as have wholesale prices. Consumer •
credit is rising rather rapidly, and pressure for :
longer <
terms is growing—the
allegation being that with the
higher prices now ruling on goods bought with such credit,
consumers have to
get longer term credit in order to keep
the monthly
payment within their reach.
:•
Waldorf
will
day's events.
the
will
Astor
A dinner at
conclude
the
-
The program for the conference
includes discussion of the follow¬
ing topics:
'
•"Why
"The
eral
the
Registrar?"
a
status
stock
of
changes in Fed¬
transfer
tax
rates
and
computation thereof."
"A
a
central
depository for
secu¬
rities."
leveling off of plant and equipment expenditures by busi¬
"The
model
for
act
simplifica¬
ness
partly doubtless because of the greater cost of
tion. of
fiduciary
transfers,
as
funds, but also because of some uncertainty about whether
sponsored by Francis T. Christy."
such equipment would over a
Mr. Christy,
a
New York at¬
longer period find useful
torney, is a well-known authority
and profitable
employment. Housing certainly has .lost
in the field of stock transfer re¬
some of its
steam. Relative
scarcity of mortgage money
quirements. 1
was doubtless one
reason, but there have also been a good '
Joseph E. Williams, Vice-Presi¬
many who were inclined to raise the question
as
to
dent, Chase Manhattan Bank and
whether the "edge" had not been taken off the market
chairman of the Association's ex¬
ecutive committee, will preside at
by the exceptionally strong and exceptionally long con¬
the conference.
He will be as¬
tinued building boom. There have also been a
good many
sisted
—
.
from
and
we
had not been
by William Rieber, Assist¬
going into debt, all of
ant
to
consumer
industrialists, at a rate which could,
certainly should not be continued a great deal
longer.
1
standardization
will conduct
•
Jr.
field
Reid
yond what is
There
considered
in
Now that the
a
regarded
now
are
any
but the rates
at
which
they
Jan.
on
Co.,
135
Midwest
be¬
With
offices
at
1171
Ponderosa Drive.
of
has
been
PHILADELPHIA, Pa.—Stone
Securities
the
sales
Street,
York
and
Exchanges.
Mr.
New
the firm for
with
v
Admit Peck
&
Corporation
that Norris S. Barratt,
associated with
department
office,
of
their
Philadelphia
National Bank Building.
Mr. Barratt was formerly as¬
sociated with Boenning & Co; as a
registered representative.
Dodge
Partner:
as
Co.,
&
of the New York
Phillips Sees.
MILWAUKEE, Wis.
Peck
Louis
—
Chicago Analysts
to Hear
and
officers
Edward A.
of
Abbott
RavenscrOft,
r
„
61
Wall
in
the
land
Adams
Hotel.
Room
the
5
Mid¬
F.
Ailyn
Chronicle)
MILWAUKEE, Wis.—ThomasR.
is
Wisconsin
with
A.
C.
Allyn
Incorporated,
National
Bank
and
First
Build¬
ing.-
Laboratories,
meeting
of
Andrew
partnership.
C ompa n y,
William Vanston
Investment Analysts Soci¬
ety of Chicago to- be held Dec.
Stock Exchange
admit
( Special to The Financial
will address-the luncheon
of the
will
With A. C.
...
Nesbitt
CHICAGO, 111.—James F. Stiles,
Jr., Ernest H. Volwiler, George R.
1
to
C.
Hellermann has joined the staff
of Phillips
Securities, Inc., 5856
North Port Washington Road.-
Cain
Jan.
on
.(Special to The Ejjjancial Chronicle)
...
become
Philadelphia
Salle
La
the
Clark, Dodge & Go. to
-
Stone & Webster Add
has
to
Street, New York City, members
Mont. — Elton H.
Robson is engaging in a securities
announced
admitted
be
factors
BILLINGS,
III,
who
many years.
other than the cost of
money to be
reaching decisions about plaht expansion.
Reserve has acted, it
may be well to take
Elton Robson Opens
Webster
will
Stock
Clark,
from
1
South
members
second look at the other factors.
business
committee,
discussion forum.
a
partnership in Bacon, Whipple &
safe.
as
chairman of the
CHICAGO, 111.—Bryan S. Reid,
.
spines of labor negotiators, and render it the
more difficult to
get that phase of the situation in hand.
We can hardly believe that somewhat
greater ease 111 the
money market will make lenders in the consumer credit
willing to extend the terms of their loans
Chase Man¬
the
Bryan S. Reid, Jr. to Be
Bacon, Whipple Partner
stiffen the
more
of
Treasurer
hattan Bank and
How many of these factors will be
substantially :
changed by the action of the Federal Reserve authorities, *
or
any that they can reasonably be expected to take in :
the near future? If
anything, one would suppose that any
easing that has been effected in the money market would
This
of
Herzfeid
St.,
-
means
the
on
sajung that the very
manded and obtained
for
reasons
other than action
by the Federal Reserve
authorities, who merely refused to create money to serve
the purposes that nonexistent
savings normally and rightly
should be serving.
7
Questions
question
with
Exchange firm
important questions remain. Will business
borrow and spend more freely—as-;',
the part of business and to some extent
doubtless on the part of consumers. If so, has such action
as has now been taken
by the Reserve authorities elimi¬
nated them, or will it eliminate them in the early future?
If not, would it be a good thing for us all to go ahead as
if they had never existed or as if
they had been elimi¬
nated? These are some of the questions that must perplex
the thoughtful man when he reads his daily paper these
days.
;fT
What of Old Complaints
■
not
Federal Reserve action in
wholesome
formerly
now
suming funds are easier to get and cheaper? Would itiie a
good thing for us all in the long run if banks lend, cus¬
tomers borrow and all spend borrowed money more freely.
in the circumstances now obtaining? This raises the ques¬
us
policies.
It
Stock
York
New
is
years,
consumers
who wondered if
"As
seven
.
and save,
net
bonds
toward
Our
individual people is, bettered.
mar¬
But
men
,
.
purpose
in
saver
changing world of variable
be outmoded.
guar¬
anteed
deduction
never
& Stern
Gumpel,
permit greater borrowing re¬
support
sav¬
past services is not
only real and heartfelt—it con¬
forms to the definition of "grati¬
tude" as "a lively anticipation of
favors yet to come."
for
even
votion to self-government.
You have made
tion for your
continued
or
what you have done and what you
will do is a rich measure of de¬
save.
ing an investment, a symbol of
patriotic service.
Our apprecia¬
found
E-Bond
average
holds
about
they
have
encourage
H.
associated with Walston & Co. Inc.
lor
authorities
the Reserve
extent
short time ago almost J everyone was.,
high wages, and shorter hours, de¬
by labor were so adding to the cost
of many types of goods that
higher and higher, prices
seemed inevitable.
Many went further and expressed
doubt as to whether the consumer could
be>persuaded to
buy freely at such high prices. Indeed, it was. a question in
many minds as to whether the consumerjtVby and large,
could buy at such prices at least without further substan¬
tial enlargement of his debt burden—which was and is
great enough in all conscience. Recent..events seem to'
ilies to
national debt and
steady
what
to
William
gardless of rates charged.
hesitancy
program for
crucial
a
record
at
portunity to express the gratitude
and the appreciation of the nation
Concern Over Savings Bonds
our concern
should
would
under—have been
or
at all times.
philosophies.
Because of
is levelling
significant,
and
whether
denomination
small
the
of
sales
ventiveness, creativeness, and the bonds—$200
use of his intellectual competence
maintained
to
rate
Gumpel
Herzfeid
Joins
recently would have any effect upon the
borrowing .policy of member banks, one must form his
own
judgment—as he must about the further question as
discount
Thursday, December 5, 1957
.
.
Wm. H.
the funds borrowed
Toward Budget Balancing
With flexibility
.
William
partner
passed
of
76.
in
J.
K.
Vanston, limited
White,
away
Nov.
Weld & Co.,
28 at the age
Number 5696
186
Volume
.
.
.
tivity" experience, illustrate areas
Continued from page 14
for
fence-
management
some
mending. Management might well
Why the Deep Gloom About
Business Prospects ior 1958
should
volume
loan
er
mean
government
new
Question Marks
"What
about war?"'
about
"What
do
strike next
monetary policy?"
Nobody can ignore these things
.
a
defy
body nec¬
Doctrine"
Edie
public and private objectives and
policies be re-examined in the
if's, and's and but's—we are
responsible for the assumptions
and judgments that enter into our
light of the priority problem we
are
trying to deal with. Let me
sketch
several
of
the practical
forecasts.
points
a
of
Market—Our attitude to¬
Stock
on
investment is based
long term economic growth
equity
ward
our
philosophy.
half
years
the Dow-Jones
30%-
keep
presuming
that
we
have
seen
us on an
mund Burke's words—
omy,
to
the
boosts
in
increases
excess
climate, with all that that implies
concerning defense outlays and
foreign commitments.
hope that
reasonable
-
of
a
I
end this talk
want to
back
ting
FLATION.
Defense and Foreign Aid—
their part
(4)
in
solving
inflaiton
the
problem
benefit from several points
could
even
or
all
we
by get¬
of Life" is
have at stake in safe¬
in seeking Federal
local purposes.
aside
ciple
we
near
are
the
difficult
is
It
a
in
first
the
into
condense
to
short statement
problem which
a
seems
to
be
.
place hardly lent it¬
self to discussion in
a
sponsibility for dealing with them
must rest.
One gets the impres¬
sion that too many people regard
too
closely to
market.
the
matter
establish
public
of
which
have
the Federal Reserve Board
as
its program
matter of self-interest.
as
a
Management
the
management
ing the large contributors to infla¬
the
that
lie
outside
the
"Fed's"
responsibility and author¬
ity.
Washington discussions and
statements by others have high¬
lighted attacks on different sec¬
tors of the problem but nowhere
area
of
reasonably
complete bill of particulars for at¬
tacking all elements in ,their rela¬
have I
tion
I
seen
or
heard
a
to each other.
would
program.
such a
I call this proposal THE
like to propose
Whatever the motive,
biggest
American
has probably been
single factor in the
against
inflation through
large expenditures for increased
capacity and cost-cutting equip¬
fight
ment.
But
(a)
perversion of the
protective feature of the strategicstockpile program by delivery of
imported low-cost foreign metals
for the "fast buck," followed by
clamor for tariff protection and
(b) blind acceptance of steel/auto
wage terms without regard for a
given
company's
own
"produc¬
goods
amount
these
equal
they contribute to the cost or
essence
will
which
bidding,
Voluntary
not.
is the
of the market mechanism,
be
not
forthcoming.
A
po¬
needed to de¬
involving
vote and
compulsory contributions in ac¬
cordance
with
a
common
tax
litical
re-examination of the
content of
in
con¬
market.
the
by all, so that all individual con¬
sumers
are
benefited
whether
by
a
at
because
so
consumed
these
only agency responsible for deal¬
ing with this problem, overlook¬
tion
is
through
than
purchases
sumer
so¬
important than private wants.
rather
taxes
process
is
wants,
majority
(2) The proper allocation of re¬
between the satisfaction
of social wants and the satisfac¬
sources
is that which
selects the most important wants
tion of private wants
and leaves unsatis¬
of
of both types,
both types.
this
may
tion of social wants.
I allow for certain
In
my paper,
other functions
policy, including dis¬
tributional adjustments and sta¬
bilization.
These must be added
to obtain the total picture, but I
shall not comment on them here.
budget
Rather,
I
wish
propositions
to
restate certain
regarding
this
cen-
statement by Prof. Mus¬
before the Joint Economic Com¬
mittee, Subcommittee
on
Fiscal Policy,
Washington, D. C., Nov. 18, 1957.
*A
grave
costs
costs may
merchandise
glamor of
research.
a
would
It
forego
to
pleasure
to
have
this
illustration, but there could have
been no setting more dramatically
designed to focus on the impor¬
tance of social wants, than that
produced
the avalanche of
bared during the
by
Russian progress
recent weeks.
Chicago Inv. Women
CHICAGO,
111.
their sixteenth
—
The invest¬
Chicago will hold
ment Women of
annual Christmas
Bar Associa¬
LaSalle Street, at
Tuesday, Dec. 10.
party at the Chicago
tion, 29 South
5:15
p.m.,
on
important wants
less
the
fied
A budget which does
be called an optimal
budget.
concept
This
(3)
optimal
of
budget is concerned just as much
with avoiding
too low a lower
limit as with avoiding too high
an
upper
limit to public expendi¬
concept of taxable
The
tures.
capacity,
the
by
very
semantics
with
It is
a
biased concept, designed from
the
outset
to
give
a
biased
is concerned
the latter contingency only.
of
the
term,
answer.
(4) At the same time,
the division
wants
social
tion
of
note that
of resources between
the satisfaction
is
of private and of
not
which final
only a ques¬
wants are to
The satisfaction of
in scope and con¬
tent, may affect the functioning
of
the
market
system.
Public;
services may improve the effi¬
be
recognized.
social
wants,
private enterprise in
many ways.
Indeed, the private
enterprise sector of the economy
formula.
could not function without a mini¬
This, in a nutshell, is the prob¬ mum
level
of
public services.
lem of providing for the satisfac¬
Taxes, if excessively high and ill
of
the
cial wants are either more or less
ex-
ditures,
pen
not
that
presumption
of overriding im¬
as
tax reduction or, to say
been
This difference does
a
no
basic
isfied
decision
and
wants.
private wants which may be sat¬
and paid for through
the
taking events,
related only
im¬
certain social wants.
social wants must be
take the form
the
forbidden word, increased taxes;
and they may take other forms,
not
directly connected with the
level
of governmental
expendi¬
tures, such as the channeling of
scientific talent from improving
As such they differ from
budget.
breath¬
my
new
These
of
by
moreover,
a
earlier terminology,
given an overpowering
portance, and the necessary
must be accepted.
(1) Social wants involve certain
the
seems
to
recognized
they be provided for through the
termine
ship into
without
characteristics which require that
task
progress,
have
Advances Propositions
brief paper.
requirements for defense
portance to
is
The
by to prices, the Beck-Hoffa dis¬
closures should jar labor leader¬
form
social
to
turn
of providing for the
of
have been per¬
interfere with meeting
should
is,
These
complicated,
are
singularly: bad practice that add to unpro¬
ductive labor expense, and there¬
lacking, even at this late'; date, is;
a
bringing into foCus of all the
factors
contributing to inflation
and the several areas where re¬
satisfaction
,
great tragedy to me.
I cannot
help but feel that such was the
case.
Recent developments, to Re¬
upper
tral function
its
by
proposition, fallacious
scientific
and
be maintained at
necessary,
it
national
with national defense and scientific progress.
This
Labor
i
Admonitions
f o r
"restraint"
guarding the buying power of the
Awitr'get us nowhere. Besides pav¬
dollar. World peace and national
ing the way for needed legislation
survival can also be involved.
to reduce the drain of abuses and
What
as
mitted
University of Michigan
increased, if
succumb
capitalism will
own
weight.
limit of our taxable
capacity, Professor Musgrave sees in the tax fears held "our
version of the Marxist fallacy that capitalism will succumb by
its own weight." Warns that spending too little for our national
needs can be just as dangerous as spending too much, and
believes that the former has had the tragic effect of interfering
ing opinion that
productivity
These commitments and
to the subject of IN-<grants for
Further improvement
in the "American Way
hot
sion
damaging economy's long-term soundness. In refuting prevail¬
wage
prices.
is without basis in fact and
analysis. It is our ver¬
of the Marxist fallacy that
economic
Economy?
Well known tax authority opines taxes may
.
'
for evil to
triumph is for good men to do
nothing"
i
atti¬
occurred since
of attack: (a) reduction of waste
tudes will prevail when manage-'
through -unified purchasing and. my paper was
ment/union negotiations begin inresearch* and
development pro¬ prepared.
the auto industry next June. But
Public ex¬
grams, (b) consideration of other
hope is - no basis for economic domestic Federal commitments in penditures are
Prof. R. A. Musgrave
judgment.
The possibility of a
constructing the defense budget, needed bestrike must be recognized as more
cause
the
and (c) continuous orientation of
of a risk in 1958 than in preced¬
defense
officials concerning the market mechanism, while ideally
ing sessions.
Our forecasts, are
objectives of monetary policy. \ equipped to provide for the sat¬
based on a no-strike assumption."
V (5) Public Works and Services isfaction of most of our wants, can¬
not provide for all of them. There
Monetary Policy—We visualize*
—We
continue
to demand
that
no
are certain
wants which must be
significant easing in Federal;
more
Federal,
State and
local
Reserve policy while the7infla-1;
facilities and services be provided, provided for through the budget.
This does not mean that the goods
tionary implications of a: wageregardless of the condition of the
settlement
in the auto industry1*
and services in question must be
market for men, money, and ma¬
remain to be resolved.
terials.
State officials who are produced by government, although
outspoken
advocates
of some of them are; my main point
IV.
"The Edie Doctrine"
v most
is that they must be paid for in
'."Federal economy" set this prin¬
and
are
I?y RICHARD A. MUSGRAVE*
inflation — then
higher minimum
spell
for
presses
that
concedes
—
heads
solving
in
interests
"All that is necessary
Professor of Economics,
Minimum Wage—The gov¬
(2)
market—it so happens
wage. — "Arbitration"—Whenever
we have—the jitters'
a
government "umpire" presses
of the moment have carried many
management to settle a bargaining
stocks to levels that will look like
session rather than risk a strike it
pretty good value a few years becomes
party to resulting price
from now, in my opinion.
increases.
Management responsi¬
War
Nobody can p r e d i c t bility exists here too,
whether or nor present tensions
(3) Tax and Fiscal Policies—
in the Middle East will involve us
Objectives
of
monetary
policy
in another war.
We lean to the
merit higher priority in mapping
view that they will not.
As has- tax
legislation.
Corporate
tax
been true throughout this whole
laws encourage debt financing be¬
postwar period, we still hold that., cause Uncle Sam pays half the
the only practical assumption for
interest cost. Other taxpayers pay
future planning is a continuation
the
rest, in taxes and higher
Of
a
"Cold
War"
international
cool
We
larger national
For the
their present rates
in¬
are
tion, that tax reduction is impera¬
tive for the health of our econ¬
platter.
"Doc¬
parity ratios help
inflation merry-go-
plus
argue
the current budget
in
cluded
to
wish
expenditures
our
a
rise above sectional and par¬
can
tisan
the years
over
high
of
problems. In the
days ahead let's keep in mind Ed¬
guaranteed on
not
challenged to demonstrate to our¬
selves and to the world that we
nu¬
all
that
here
Is Tax Reduction Essential
think
Auto Strike—One can
a
period
a
do* not
I
sustain.
That this
Price Supports—With farm
prices the biggest factor
Living Index—price
ernment
cline in the
I
forbid,
God
If,
We
In
economy.
employment,
this
statement
is
equivalent to saying that the level
of public expenditures is in excess
of what a healthy economy can
essential; nor do I wish to argue
that there may not be essential,
expenditures,
including civilian
items, which are omitted.
I do
want to say that the popular and,
let me add, bi-partisan proposi¬
leaders in many walks of life.
.
absolute bottom of the latest de¬
that
the
can
head.
own
We'll have to work for it.
strength, knowledge and
prestige to get something accom¬
plished
through national,
state
and
local
organizations
and
through personal friendship with
round.
and more
competitive
bond yields invited market reap¬
Without
have
They
his
on
pour
it's
merical
food
clauses,
stability
praisal.
suggest
matter.
us
that tax reduction
health of our
is imperative for the
happy
economic potential ahead of us.
It's about as certain as anything
can be in this uncertain world, but
larger responsibility than most in
this
of
Each
heard
have
We
scene.
three years,
or
supports plus cost of living wage
Relative business
clip.
per-year
have
communities,
for
men
in the Cost of
Industrial Average
had advanced at an average
again and again, over the last two
a
current
still have the promise of a
Bankers, as
areas.
would encompass:
(1)
and
the three and a
since September, 1953,
In
the
that
attack
of
trine"
these
of
most
the
on
lapsed * values, it won't help us
much to point an accusing finger
at Washington, or the "Fed," or
labor. It will be too late for "in¬
to
the traditional leaders and spokes¬
brief comment
me
reach down for a handful of dust
that
asks
Doctrine"
problem be considered to¬
gether.
The solution cannot be
left
to
the
solo
forays of the
"Fed" which has no authority in
regional,
lot
behind
hide
cannot
useful,
Edie
points of attack on the infla¬
tion
proposes
and
national
all
"The
all
nor
"The
that
"automatic" pay
add
ahead, we should awaken some
morning in a shambles of col¬
vestigations."
gram.
forecast.
We must contend with these risks
in our business. Forecasts, to be
they
though
even
no
desirable.
We have
adequate competent public
and
private agencies and individuals
to
implement an effective pro¬
year?"
"What about
of
government-
or
consider such
not
essary
auto
an
market?"
stock
the
about,
an
sponsored "super agency" to mon¬
itor an anti-inflation program. We
We are asked—
"What
creation
involves
This
the
boosts.
icy.
Banking is still
"growth" industry.
results next year.
re-examine
to
labor
whole concept of
integrated national economic pol¬
moderate plus tor bank operating
a
DOCTRINE—calling for
EDIE
a
invite
.
25
(2449)
The Commercial and Financial Chronicle
of
ciency
designed, may interfere with the
functioning of private enterprise.
of public
satisfaction of social
Thus, the proper scope
services
wants
due
or
must
be
allowance
determined with
its repercus¬
CANCER LIFE-LINE
Through films, pamphlets,
posters, exhibits and lec¬
tures, our life-line of cancer
education reaches
people in
business and industry.
They learn facts about
)
cancer
which
could
#
mean
the difference between life
and death. For information
about
a
in
program
your
plant call the American
for
sions, favorable and unfavorable,
on
the enterprise sector of the
Cancer Society or write
"Cancer"
economy.
care
of your
local Post Office.
Marxist Fallacy
summary
Leaving aside
abstract matters
these somewhat
of principle, let
•
AMERICAN CANCER SOCIETY
26
(2450)
The Commercial and Financial Chronicle
Continued
from first
Explains Market Decline
page
I
not
only view the decline to
date in the market prices of com¬
mon stocks as
amply justified, but
Tomorrow's Investment
do not
yet
see any assurance that
the movement has
Portfolio
factors
own
in
would
answer
is
research
our
investment?
trust
My
that while
be
fully justified
in
establishing investment policy and
in weighing questions of relative
risk among industries and secu-
ties, its effect in reducing the
investment risks
tual
decisions
our
lies somewhere
be argued that to the
far more pessimistic talk tnan
pessimistic action,
I could readily use up my allotted time in
projecting in detail
current working hypothesis of
my
the business and investment out-
be-
look and how I would apply it to
might
extent that
availability of
about a
security
adequate
tends to
regular
In all truth, there has been
year.
prevent it from either advancing
current detailed investment problems, and I am not unwilling to
share these views with you. Its
usefulness is at best limited and
short-lived, because in three to
course.
nowindulging in the luxury
hindsight, that clearest of all
vision.
a
its
run
am
of
of view for more than
point
in
involved
tween negligible and nil. It
facts
ae-
Today
I
ing
There
which
to
stock
deflate
rection
in
should
market
to
cor¬
regarded
if
even
level
attained, and
the
be
underly¬
the
prices
these
blessing,
two
were
weaknesses
as
a
unwelcome
an
to many.
one
First, there
ing
of
stocks
theories
too much buy¬
was
and
vague
general
discussions
about
on
probable inflation, with too little
consideration
We
know,
of
intrinsic
forget,
that only earnings and dividends
long
range
I
simply consider that present
prices represent an attrac¬
bond
tive
k
m a r
e
t
buying level,
chases made
now
in
spectable
and that pur¬
should look re¬
retrospect.
future
Present bond
yields are favorable
both historically and by compari¬
son
with yields
on
high grade
common
stocks, which inciden¬
tally offer dimmer prospects of
immediately
higher
dividends
than was generally thought likely
earlier
in
risk
a
The
year.
falling too low, it
reduce price risk. But
high
or
Not
in
even
circles
are
extraneous
bonds,
that
now
must
interest
cost
conserative
trust
available
soon
be
month's
less
to
would
It
me.
valuable
last
than
I would pre-
newspaper.
emphasis on less
be
to
later,
or
accepted.
borrowers,
the
to regard
essence
Rule
Prudent-Man
as
stocks
Manufacturing
a
an
extraor-
dinarily
interesting juncture in
our economy,
one
involving imdoubted
risks
but
also offering
great promise for alert and skill-
buying
trustees
many
stocks not
basis
the
on
what they know about
of
them, but;
because
they find them so widely
popular with experienced invesimitation
Slavish
tors.
be
can
arrived at
has
if
it
has
not
period of pause,
indeed ended, and
bond markets
both the stock and
have
been
persistently
w e a k.
prices must ultimately
Lower
promise of forecast or
prophecy; but of course what we
lave
always been trying to do
a
been to select those securities
las
md
develop those well balanced
which
urograms
udgments.
nent
of
The
holdings
offer fupresent
would
vindication
ure
our
invest-
present
in
trusts
our
are
•Imply the portfolios of tomorrow
hat
accumulated
we
yesterdays, and
nuch
tell
to
various
on
such they have
through experi-
as
us
mce
gained that
neet
new
should
help
us
problems arising today
md tomorrow.
real
unanswered
whether
is
It
we
are
needed corrections
not
are
major,
and sometime in 1958 the general
advance in the economy should be
resumed.
I
underscore
only two
The first is that declines
points.
in
possible to build
portfolio today in the
sense that any one of lessrarely
well
a
hat
inder
all
rconomic
to
en
>C
balanced
would
stand
the
the
strongly
vicissitudes
change
twenty
of
business, in the stock market
and in the bond market, with ae-
companying tight money eonditions, are occurring in almost
every nation in the free world,
roughly paralleling our own, and
we
five
must
and
it is to
ness
to find
operate
A
years.
thrive and flower.
Be-
I have concluded these, obervations, I hope to offer some
idemonstration that this is so.
More Pessimistic Talk Than
Action
J
r
To
be
tiany
-
<
are
securities that I would read-
a few years ago we were told
that government securities should
not
and
would
sell
not
ly buy today, particularly bonds,
counts from
Jut while
monetary authorities
tolerate it.
tock
I am
minded,
hat this is
mitted.
I
do
not
such
cannot
a
now
as
quid
a
consider
buying
assets
are
time
will
say;
mean¬
some
liquid
reserve.
These
while, I would hold
ssets
common
time to be fully com¬
When
I
ome
a
strongly
merely
keeping
par
eing carried
n
rash
the
of
away
by
the
cur-
pessimistic talk, for
record
this
has
been
my
dis-
at
value because the
would
the
on
in
this
38, here is an opportunity for
certain capital gain for one's
estate. These issues represent a
to
a
desirable
of
age,
exception to
long
on
estates
advanced
of
and constitute an
remarks
the
for
asset
persons
many
While I
ready,
am
cash
commit
my
government
as you see,
held
reserves
securities
income
fixed
market
to
for
to
the
attractive current offer¬
as
ings come along, I would not be
equally willing to spend
liquid reserves for
purchases,
less
now our
stock
common
I said earlier. Doubt¬
some good
values
as
there
are
available in this less popular
in
ket
mar¬
stocks, and
common
some
advocate the use of cash re¬
in a dollar averaging pro¬
country are low by
comparison with those prevailing
may
in the rest of the world; and even
gram
is therefore
The
and
good, not bad.
downward
the bond
progression
in
market has been slower
predictable.
It
has
prices and yields to a
m o r e
brought
level
where for
the
first
time
investments,
structive
in
say
and
portunity
before
the
will
things
to
add
vanish
I,
or
and
scene,
observations
some
policy.
Favors
I
it,
investment
then
stock
on
positive
con¬
Buying Longer Bonds
consider
that
the
time
has
to buy
long term bond issues
quite freely for trusts. In our own
trust department we have been
spending long-hoarded reserves—
that is
bond, not
our
the
serves—-on
our
stock,
issues
new
re¬
now
I
am
not
because
of
I
judgment
saying
only
me.
a
recession,
possess
that kind
forecasting
don't
not
or
that
foresight;
it
is
I
foolish
am
to
will —r have
recessions because the government will not permit it. Shades
of
King Canute!
all
serves
better
balance
with
demand in the long-term capital
market; and hence I consider that
bonds have reached a price zone
offering a sufficient inducement,
for
investment, if not necessarily
prices that we
Stresses Selectivity
There
is need for selectivity in
well
The
long -1
market
is
an
government
offering little
e r m
area
same
attractive
Both
term
ments.
outside the scope
avoided
unless
attraction
an
version
point
a
tenant
are
and
possess
There
on
a
remainder
which
value
at
bonds,
heads-
interests
present
favor with
and
many
many'of
investment
prices.
as a
In
dis¬
form of in¬
vestment, this relative unpopula¬
rity of prime preferred issues
finds little historical support from
a
long
range
formance
comparison
with
that
of
of per¬
"A"
rated
bonds.
All of this represents a
of
and
ings,
but
widely
the obvious
measure
complished
have
an
acknowledged;
seem
begin spending buy¬
reserves
and actively increas¬
ing
common
stock ratios; the time
come fairly soon or it may
for a year or more, and
may
and
to
be
in
ac¬
ignored.
trustees
interest
would
long-term
issues
bearing low
provided that they were
fully or partially tax exempt. In
years gone by, some issues of this
type were outstanding; and with
government
coupons,
appropriate legislation the Treas¬
could
sell
them
again, and
greatly to its advantage. Such a
suggestion is presently regarded
as politically
suicidal, as offering
a
refuge against taxes for the
well-to-do.
The
irony of this is,
course, that the large quantity
of high grade
municipals of ail
descriptions and maturities now
of
available
all the
come
that
they could pos¬
sibly want. The advantage would
be
all
to
with
the
is
be
to
Treasury in
lower
coupon
would be possible for
rates
new
the
that
issues,
gained
i 11
w
trying
by
timetable
the
guess
events
unfold
as
now,
i
q u
k I y
c
enough. It would- be simply beg¬
ging the question to say that the
will
time
be
ripe when good in¬
obtainable in
vestment values are
common
stocks because
dividual
stocks
wider
even
lence
of
in¬
many
the
insurance
choice, of the preva¬
quantity
considerable
a
of attractive and
more
wide-rang¬
ing opportunities than now, as to
warrant a
waiting attitude, and
not
great deal to lose by it at
a
this stage of the economy.
-.'i-
Continuous Re-Examination
Meanwhile, we should actively
this testing period to discard
from weakness, and by judicious
use
sales
and
purchases to improve
quality and potential of the
stocks we already hold. I cannot
overstress the importance of this
the
continuous,
active,
of
critical
and
we
lay
can
emphasis
our
and
morrow,
the
at
in¬
existing
our
vestment portfolios. Here is
where
to¬
time
oil
same
reduce the total risk factor
quali¬
tatively.
Perhaps
the
thing
worst
we
could do would be to
sive
stocks.
It
buy defen¬
would
be much
wiser to
buy bonds. As in war and
sports, the best defense is a strong
offense, which does not imply, of
course, taking unwarranted risks.
I
look
and
with
utility
mild
favor
stocks,
on
bank
for any
supposed defensive characteristics
not
but because they have a slow
dependable
tory
growth
t
and
but
satisfac¬
prospects. W e
for
stocks
which combine good immediate as
n e a r
should
be
-
e r m
looking
well
as good
long range prospects,
especially those where the growth
factor is no longer discounted by
an
excessively high price-earn¬
ings
provides such investors
refuge against Federal in¬
taxes
come
little
in which
manner
of this could be
seems
Individuals
much
complete
increasing nonbank hold¬
are
some
ury
sound
desirability and wisdom of
Treasury, lengthening the ma¬
turity range of government issues,
factors that might favor
offer
The
the
no
will
it
reasons
examination
con¬
My sanguine point of view ex¬
tends to high quality preferred
stocks, which would benefit from
same
govern¬
such
is
divergent.
long-term
long-term
Issues
be
assuming long-term
often
need
Suggests Tax Exempt Federal
of my rec¬
favorable
market risks
whatever
Any
should
they
as
privilege.
in
money
and
fill
to
we
have for liquidity, and offer
yields substantially equal to those
is¬
offering such protection
ommendation
more
and
immediate
opportunity. Shortgovernments, however, are
insist
are
what
ing
and
available from
ex¬
municipals
corporates offer
returns,
I
favor
buying
longer bonds except, of course,
where liquidity is
required.
We
would prefer
non-callability, and
on
the
out
stocks, for example—may be suf¬
ficiently deflated right now. But
there seems enough likelihood of
interest
least
putting
better.
I cannot now foresee when and
ularly pays to be careful with
municipal bonds in the initial
selection, since they are often dif¬
ficult to liquidate at satisfactory
prices.
short, long, and medium
maturities
producing about the
the
average
not
curve,
protection.
do
to
should
we
for
as in stocks, both as
security and as to ap¬
plicable economic trends. As one
example, the rapid increase in
municipal debt requires m o f e
rigid scrutiny on our part of what
is happening or is likely to hap¬
pen
to many communities.
We
should watch for signs of deteri¬
orating credit position. It partic¬
as
to intrinsic
elsewhere.
at
effort
think
settle
to
without
desirable to
present attraction for trustees by
comparison with what is available
call
don't
I
content
be
results
for
ligations of high investment qual¬
ity.
With
almost
a
flat
yield
not
trustee.
the lowest level of
along,
which
produce
yields of not far below 5% for ob¬
cellent
crements, I have never been able
to see it as a way of life for the
will see.
coming
sues
to avoid the obvious risks
of
headed toward
seems
somewhat
a
bonds
find
support of investing
in
I wish to embrace this op¬
bonds.
from
I
this, supply
in
the 25 years that I have been dis¬
cussing
Despite
such
deferment of good prospects can
do the trick.
What has happened
the
Please do not misunderstand
oysl4TapT«olioTaem0fnX°?eent
bring
but
you-win, tails-I-lose, basis.
"Deep discount" bonds, those
ernment can only moderate, ag- selling substantially below
par,
gravate, or postpone, but cannot provide automatic
protection
abolish, a condition with which all against call; and where they fit
in,
forms of society have had to con- •they offer excellent values.
They
tend. While depressions are theo¬ produce low immediate cash in¬
retically unnecessary, then so are come and therefore do not
always
wars.
You may remember
that suit trust funds, where the life
only
specific, there
more
busi-
cycle, for which I fail as yet
any adequate support.
I
on the premise,
unashamedly old-fashioned,
that
booms and depressions will continue to be with us, and that gov-
next
ore
.
learned how to control the
even
not
to embrace the currently
we have now
seems
popular theory that
or
only be careully constructed over a period of
ime, but requires constant watchulness, like a well tended garden,
f
he
the
years,
next
>ortfolio
portfolio
up
to
come
whether, as many highly
considered economists believe, the
or
omorrow's
•hase
on
a
question is
to have a reces-
should not, therefore, accept
them as limited domestic pheinarrow
nomena which we can attribute to
r
stature than a prophet could simple caues. Secondly, the more
his single day select and pur- optimistic the forecaster, the more
I
not
stock prices
clouds, but-merly
an interruption in
the rhythm of
forward earnings growth. Simply
sion of uncertain extent and duration
performance,
a
flattering to those imitated, but/spell opportunity for investors,
it hardly forms a solid basis for
investment
policy;
more
often
"Shades of King Canute!"
than not, it leads to both buying
The whys and wherefores of the
too late and selling too late, which apparent business slowdown can
jeldom produces satisfying results, be studied in a dozen well reaMy title, "Tomorrow's Invest- soned analyses, so that I shall
nent Portfolio Today," seems to omit my own interpretation. The
jarry
two has
year or
predicated
down out of the
We have arrived at
ful management. The present concensus is that the business
boom
so
much
too
current
sion
vacuum.
as
find
been
death by the decedent, as you
at
know, and since these issues are
available currently at about 86%
specific, but what I believe to be
anticipation of larger earnings and if demand for money should tend of losing opportunities by delay¬
more fundamental, problems and
While dollar av¬
dividends projected well into the to abate, the longer term outlook ing too long.
principles, tracing in only enough
is for continued
capital expan¬ eraging may be a necessary ex¬
future.
We have seen again and
current economics so that we will
again that it requires no depres¬ sion, with accompanying needs for pedient in operating certain larger
not be considering them in a
funds with rather regular cash in¬
long-term credit.
more
growth equities, but it bothers me
these
prices for the last
confidently expected. Our interest
rates
are
pay¬
where held
of estate taxes
ment
influences, and all too
principle. Evidently
some
would
rather
be
wrong but in good company than
risk being wrong all alone. I am
among those
who have a high
regard for International Business
Machines and Minnesota Mining
to
performance of gold stocks.
Then, second, the level of stock
gestion to have the slightest pros¬
pect of adoption.
Certain
Treasury
issues
tenderable at par value in
fer to place
"follow the leader"
and
now
income tax revenue.
of
loss
regard this as too sensible a sug¬
trustees immune from
many seem
Of k*the
Leader
the
Follow
able
I
issues.
six months I will doubtless have
value, and only higher dividends figured on an after-tax basis, is
serves to
been obliged to shift my viewstill
historically low; and as
can recurrently offset higher Jiv¬
human nature, particularly in the point several times, as indeed 1
bankers we know that higher in¬
ing costs. The possession of raw
area
of mass psychology, being
have already in preparing these material
terest rates
are
not much
of a
reserves
is not always
what it is, this possibility should remarks, to accommodate for new
deterrent to borrowing where pro¬
sufficient;
witness
the
dreary
not be too highly regarded.
factors and later information not
fits from the use of the money arc
too
which would far exceed any prob¬
possibility of further price
declines
is
the
in
The
values.
but sometimes
determine
change in my viewpoint in the last
Having been frequently
proved wrong, it is long since I
have held any pride of opinion,
and I offer here no positive fore¬
cast on the future moiiey market.
year.
Thursday, December 5, 1957
.
...
ratio.
I will leave the
tion of
policy
to
excellent
the
ment
specific applica¬
stocks
panel of invest¬
as to common
analysts which is to follow,
underscoring again that
use
this
period
uncertainty
in
of
we
should
hesitation
business,
and
and
of
Number 5696
186
Volume
.
(2451)
The Commercial and Financial Chronicle
:
.
in the belief
market transition, to
serves. I would do so
common
that from these uncertainties will
the 1913 portfolio would be about
$2,513,000, or 98% of its 1913 marnating the laggards, the less effi- ket
value. Compare this 2%
cient
and the less progressive, shrinkage with the 345%
gain
and those in less promising in- which actually took place!
upgrade our
stock holdings by elimi-
should rebuild our
strength, by emphasizing strong and progressive managements, effective programs for
research and development, desirable
economic
characteristics,
such as broad and growing demand for products, adequate
of the 86
only three appear in the present
portfolio. A total of 45 were sub-
We
dustries.
emerge favorable opportunities to
buy common stocks for those will-
financial soundness. It
for our investment analysts to
is
A
A.
Philip
1
mil
vestment
surance
"for"
securities
the
associated
of the
curities
This trust was established as
me.
a
for
material
Stock
Massachusetts voluntary trust in
shares,
transferable
with
1893,
is, therefore, the granddaddy
all investment trusts. Its five
and
•of
always represented
have
•trustees
epitome of that prudent
conduct
■the
Massachusetts Court, in the
famous case of Harvard
College
the
very
•man
of whose investment
side.
leader,
in
Amory
provingly
of
bills.
Intermediate
The
with
While
Mutual
Mr.
Life,
Russell
was
particu-
larly
active
Kusseil
~
TTiilitv
---
Real Estate
2*2
"""""
-
1
Railroad ___i
further
demands
a
ottpntinn
to
nrnh-
scene; and it
rt„on*
rioni
rvf
great deal of
'•
2.0
_________
attention to
of choice
lems
2.0
Hold Elect.
as
between
prob¬
indus¬
BOSTON, Mass.
—
Utilities
Real
———
Estate
—
,
and this
factor
Meeting
The Annual
in president and now Chairman of
generation—and then put aside, the Board of Brown Company. Mr.
a
Utilities
30.3,
—
Estate and
Industrials
-—
8.0
---—
8.3
task
never
and
While what I said
—17.1
Railroads
a
challenge
done. That is
also
its
at-
traction.
Financial
Companies.----
day—except perhaps once
is
It
its
the immediate
ket
earlier about
business and
sounded a
the contrary I am
outlook may have
bit gloomy, on
optimistic — optimistic about the
opportunities we have for genuine
31, 1957, the trust was accomplishment under the more
'invested
entirely in common fluid and self-quesuoning conuistocks, predominantly industrials, lions now prevailing. For any one
Oct.
estate
nominal,
securities
and
railroad
the
as
were
securities
Money Trend Indicated
available economic data is to be given the indicated consideration
in working out thd future course of business, it would seem as
though
a monetary program of easier money is in the
making,
since many of these indices have turned very much to the defensive
ChaHAAi1 Tf24Qlf If)
Admit Hubar, Chapman
Spencer Trask & Co., 25
Board
Street, New York City, members
of the New York Stock Exchange,
really
excuse
•
side.
is
well known that easier money will not in itself bring
change in the course of economic conditions, but it is
of the forces along with others which will, with
time, help
It
about
a
Change in Reserve Requirements Looked For
Even
though there has been very little in the
of help to
way
the money market so far from open market operations, there has
been no lack of rumors or "open mouth operations" as to what
be
expected in the form of aid to make money and credit
easier.
looking for
the
is
It
change in
a
that
rumors
sideration.
W|IGIIwCI 11 QaA 1U
unfavorable
an
market is concerned.
are still going to be kept on the tight
side, it will not be long before this enthusiasm, which has brought
about higher prices and lower yields for fixed income
bearing
obligations, will be lost. It may be a bit soon to be looking for
direct action by the monetary authorities in making the indicated
change in monetary policy a more tangible one. However, if the
if
ture."
<
and credit
money
conditions
_
many
Loans to business continue to decline,
money
Easier
If
is to
pessimistic, there is little
jan. f will admit August Huber
for not replacing substan- and Edward L. Chapman to part¬
had
also dwindled to less than tially
all
stock holdings with nership. Mr, Huber is manager
2% of total market value. Since bonds, not that bonds produce an of the firm's stock department.;
additional stock was sold in 1929, equal or greater income return,
Mr. Chapman is manager of the
it is necessary to use per share and with greater certainty,
trading department.
values to develop valid compariTke
underlying
fundamentals
sons. The Oct. 31, 1957, valuation
continue to favor long-term
George La Sala
of $50.81 per share contrasts with
growth in the American economy;
of
George La Sala, an officer
an
$11.44 equivalent for 1913, a and until pr0ved otherwise, the
gain of some 345%. This compares common stocks of successful lead- General Investing Corporation,
with a rise in the Standard and
jng COmpanies offer the best pros- New
York City, passed away
Poor's composite stock average of
pect for sharing in this. I con- Nov, 29 at the age of 55.
350% from 1913 to Nov. 1, 1957. tinue^to believe as a long-term
In
this
same
period, the con- program in substantial common Merrill Lynch Adds to Matt
sumer's price index of the Bureau
stock ratios for most trusts, rang(s
ial t0 the financial Chronica)
of Labor Statistics increased
ing from 50% upwards. But long-,
'dftrott
Mich —Kenneth J
188%.
The
cash
dividend dis- term growth in our economy has
B
tt Ricbard M* Brandt Fredbursements per share of the trust never been achieved in a straight ^ai c
> Picard Raymond L Sitappear to more than match this;
line trend, and the late stages of
E Steintog and Wilmciuding some capital gams, they a long boom is a time when,
^
L
1°™T
SE
fnr
iifi
v?
a J?ng P?°™ 1S • If TL,;,Vih
liam H. Van de Graff have joined
weie
up about 300% foi
1956 vs. while not losing sight of our ulti- the staff
etaff rvf Mprrili T.vnrh
Pierce,
of Merrill Lynch, Pierce,
1913.
mate objectives, we stand to lose
Fenner
& Beane, Congress &
Real
being bought by
However, until
there is something of a more tangible nature done
by the monetary
authorities, there is only a change in psychology and although
this is a very important thing to have taken
place, it will not
have a lasting effect on the money market.
Can We Expect for
New England Business in the Fu"What
mar-
63.7
On
far
as
Whittemore has chosen as his sub-
jecb
are
for credit has not been
to alter the trend of business.
24.2
Real
lessened demand
one
Common
;
this
Accordingly, the member banks have been forced to increase
borrowings from the Federal Reserve Banks in order to
maintain required reserves.
at 5:30 p.m. on Wednesday,
Dec. 11, 1957.
The Club will be addressed by
Laurence F.
Whittemore, Past
dar
the
for
their
ton
6.3
5.6
2.0
Railroad
be
to
up
Banks, in the form of purchases of
Treasury bills, but these acquisitions by the Central Banks have
not been large enough to offset the other limiting forces which
have tended to tighten the money market.
*
Room of the Harvard Club of Bos-
row's
10.3
---
pay
tions by the Federal Reserve
'
Preferred
to
market is still very much in an optimistic mood
even
though the amount of help which has been given to it in
the form of direct aid by the powers that
be, has been rather
unimportant. So far there have been some open market opera¬
portfolio is a continuous
day-to-day task of selection and
elimination, and not one that can
ever be settled on a single calen-
history
case
continues
money
demonstrating that finding tomor-
this
bond
willing
obligations
as
value
I
12.1
Industrial
term
Meeting and Election of Officers
of
the
Boston Investment Club
will
be held in the EstabroOks
tries and comnanies.
3%%
still
Money Market Optimistic
Ex¬
in the financ¬
and that conservatism
ing of oil and
does- not imply unwillingness to
move with the times, for only in
gas production, in which Mutual
so doing can values be truly con- has taken a leading position,
served. A trustee should be willHe will be a member of the
ing to face facts, to sell no longer firm's .New, Business ,Department,
desirable investments even where according to E. K. Van Home,
losses rather than profits are in- President
of
the
investment
volvecl.. While
his conduct _as banking and brokerage organiza¬
tion.
trustee is to be judged by his in¬
For a number of years Mr. Rus¬
dividual acts rather than the re¬
suit of their sum, he is in no sense sell was associated with the First
5.9%
money
investors
of the smaller commercial banks.
as
'Municipals
new
with
The buying of the short-term Treasury obligations also con¬
to grow, and indications are that certain of the
larger
commercial banks are again putting some money into Treasury
Bcslon Inv. Club
uunp
The
tinues
1831 spoke so apBoston Corporation, retiring as a
the model in pat- a guarantor or insurer of the
terning trust investment. Their funds he manages, and can be an- Vice-President in
1942 to join
1913 investment inventory had a swerable only for the exercise of
Mutual Life. He is a graduate of
then
market
value of
about sound and prudent judgment MIT and served with the U. S.
$2,566,000,
distributed
among under conditions as they prevail. Naval Aviation Reserve,
classes
of
securities
about
as To
establish a good record of
trusteeship requires flexibility of
•follows:
*
to
Bonds
judgment, adapting wise princi¬
ples to the changing investment
vs.
the issues
the
issue in order to round out holdings. It is reported that
savings V
institutions, commercial banks with savings deposits, and pension
funds, both the public and private ones, have been the large
buyers of the recently offered Government bond.
change.
rnmp
but
Midwest
the
economy
there have been periods of profit-taking in
offered for sale have been readily
size of these offerings have been on the
sure,
Also,
market
Cor¬
members
be
limited
poration,
90
Street,
a
comparative
absorbed.
Broad
Property Trust, showed me a 1913 they may appear originally. It
accounting of its funds which I demonstrates that a prudent
•found so pertinent to my main trustee is an alert trustee, recogtheme that I have asked our in- nizing
that change is the only
vestment department to develop permanent characteristic of our
some
&
To
these securities
Webster Se¬
friend of mine, one 0f investment portfolios, no mattrustees of Boston Personal ter how well selected and sound
Recently
Stone
with
offers clear long
range proof of the need for active
rather than passive management
Trusts
become
has
Trust
Property
of All
Stocks Is Granddaddy
in-
Mutual Life InCompany of New York
of
finger to particular and severe depression,
stocks
and
to
develop specific
Need Active Management
programs to i m plem e n t this
The record of Boston Personal
philosophy.
'
formerly
Russell,
J.IWOO
Vice-President
the
point
Governments
By JOHN T. CHIPPENDALE, JR.
market.
Stone & Webster Sees.
suffered one minor and two major
wars, and one short and one long
also
on
The demand for Government obligations continues to
expand,
with investment buying being reported in all sections of the
P. A. Russell Joins
ject to later receiverships and reorganization, or more than half of
the holdings. Several ultimately
became worthless. This is not so
surprising when you consider that
ratio, in addition to two major booms in
control of costs and prices, the intervening period, we have
and
Reporter
*■-.
profit margin, and low labor
good
Our
ing to exercise the qualities of
securities then held, patience and restraint,
lists from
27
Talk
are
evident
reserve
flying
about lower
that
financial
the
requirements in the
around
be
to
are
district
taken
is
future,
near
into
con¬
requirements are as strong
now
as they have ever been in the past,
when new policies, for
money and credit, have been indicated.
This would be a fast and
effective way in which to make money and credit available to
the money market.
The
beyond
reserve
money operation of the Treasury was
a
success
question and the allotments of the 17-year 3%% bond,
new
any
and the 3%% note, were so limited that investors had to pay
prices in the open market in order to round out holdings
higher
y
which in
attrition
sidered
many cases have not yet been completed.
Also, the
in the refunding of the December 1 maturity was con¬
have been on the favorable side,
with only about
to
$141,000,000,
turned
or
in for
7%
of the $2
The
cash.
billion
addition of
held
the
the * Treasury put the Government
debt ceiling of $275 billion.
by
right
the
public, being
borrowing by
against the legal
cash
new
up
Discount Rate Uniform
.
The Federal Reserve Banks in the cities of
San
Francisco and
Dallas have reduced
making the Central Bank rate the
same
Cleveland, Chicago,
3%,
discount rate to
the
for all
12
banks.
_
^CkRoRbeft
history offers
another demonstration of the long
While
range
this
case
investment qualities of good
common
reason
stocks,
that
for mentioning
is
not
my
it. My in-
would
happened to the 1913 port-
terest is in observing what
have
l'olio if
the trustees had
made no
Rttle
by
an
extra
margin
of
Shelby Streets.
portfolio of tomorrow,
therefore, while freely committing
the fixed
income fund to high
the
Quality long-term bonds and preferred stocks, and actively using
this
transitional period
to up-
Two With Fusz-Schmelzle
(Special to The Financial Chronicle)
BELLEVILLE, 111.—Mrs. Laura
Le Tourneau and Elmer L. McCarron have become associated
Burton, Dana Partners
(Special to The Financial Chronicle)
^
CHICAGO, 111.—John P. Lavin
has become associated
Investment
Co.,
208
with
Cook
South
La
has
recently
been
den, Podesta & Co.
his
with
way,
Exchange,
on
Jan. 1 will admit Peter J. Blakney
Crutten-
own
investment
To Be Parrish Partner
business in Chicago.
Parrish
New
With Curtiss, House
(Special to The Financial Chronicle)
Jan.
&
Co., 40 Wall Street.
City, members of the
Stock Exchange, or
York
York
New
1
will
admit
Herman
H
Schappert to partnership.
CLEVELAND, Ohio—Richard S.
With W. D. Gradison
grade present common stock holdjngs by concentrating in indus-
i
New York City, members of
the New York Stock
In the past he
.with Fusz-Schmelzle & Co., Inc., Miller has been added to the staff
22 North Illinois Street. Mr. Mc- 0f Curtiss, House & Co., Union
ceived, (whether in reorganization tries and companies with better Carron was formerly local man- rnrnm_
' Rlli1rMnfy mPmbpre 0f
or
otherwise,
remained
unin- Prospects and sound investment ager for G. H. Walker & Co., wth
g'
_
vested.
On this assumption,
the characteristics, I would continue which Mrs. Le Tourneau was also tlm New York and Midwest Stock
estimated
present-day value of to maintain adequate buying re- associated.
Exchanges.
subsequent changes. We must assume
that all principal cash re-
Burton, Dana & Co., 120 Broad-
Salle
Street, members ofMr.
the Lavin
Mid- and Arthur Heinl to partnership,
west Stock Exchange.
conducted
caution.
fn
Lavin With Cook Inv.
(Special to The Financial Chronicle)
CINCINATI,
Ohio
—
Willis D
Gradison, Jr. has joined the staf
of
W.
D.
Gradison
Terminal Building.
&
Co., Dixi<
28
Continued from
New and unfilled
cautious.
more
first page
have
orders
of
easing
inflationary
have appeared in Can¬
other couniries
well as in the United States. It
What Can
Monetaiy Policy Do
In Our Economic Climate?
expanding output. The slower
of total production re¬
duced goods and services. In short, growth
flected some shifting within the
the economy was being subjected
to strong and pervasive inflation¬ structure of demand with outlays
for new plant and equipment ris¬
ary pressures.
ing very sharply to record levels
The Federal Reserve System, as
in 1956, which were maintained
you know, is charged with spe¬
in 1957.
Consumer purchases of
cial responsibility to use its pow¬
along with costs of currently pro¬
over
of
reserves
in
duced
sustainable
and
in economic
activity. In accordance with the
responsibility, the System policy
of credit ease, adopted earlier in
order
to
foster
rapid recovery
from
the
changed to
straint
recession,
during
Credit
1955.
being used in the
stock market was increasing rap¬
idly, and prices of stocks were
rising. To curb this type of credit
expansion, the Federal Reserve
Board
raised
margin
require¬
ments, first from 50% to 60% and
later to 70%, the level which re¬
in
mains
Interest
force.
rates
in
all
parts of the money market
were rising, and in the short-term
area
they rose to the highest
levels in
In
two decades.
over
re¬
to these developments, the
Federal
Reserve
System ad¬
sponse
the
vanced
discount
times during the year.
nations, too, ex¬
pansion in activity was going on
at a rapid pace, prices were ris¬
ing, and demands for credit and
capital were placing inflationary
strains
their economies.
on
ernments
ities
and
Gov¬
author¬
monetary
finding it increasingly
to
strengthen
their
anti-inflationary monetary and
were
important
other
efforts
from
losing
and
serves
in
order
gold
to
foster
nal balance among
to
keep
dollar
and
re¬
better inter¬
strongly
com¬
in
increased
State
1957.
and
local
and
a
two years ago.
It was
situation that clearly called for
action
directed
toward
moderating expensive pressures in
price advances and
forestall development of a specu¬
lative psychology. Those of us on
the firing line at the Federal Re¬
order to limit
could
serve
see
alternative to
no
maintaining restraint
in view of
serves
on
bank
re¬
responsibil¬
our
ities.
By limiting growth in bank
reserves, thus curbing expansion
in the money supply,
the alarm¬
ing rise in the rate of borrowing
and spending could be retarded.
The
total
of
rate
slower
after
output
in
growth
such
steel
1956, and
generally very high levels of ac¬
tivity and employment through¬
out
the
economy.
Borrowing
as
through
intensified,
pressures
were
interest
rates
rapid
advance.
modities
of
Prices
wholesale
at
and
their
continued
com¬
fur¬
rose
somewhat slower
pace.
In retail markets, where
there tends to be some lag, prices
in early 1956 began a rise that
persisted at least through Sep¬
but
ther
at
this
tember
this
In
During 1956 and until recently
1957, the primary economic
problem
in
this
country
and
ment
continued
of
to
In
forces
were
this
contain¬
be
growing
forces.
inflationary
country,
being
these
reflected
in
credit markets and in markets for
capital assets which might be as¬
sumed to provide a hedge against
rising prices. The sharp further
J advance in the value of farm real
estate over the past year
may be
a case in
point, coming as it has
on
top of an already advanced
I
I
l
j
I
j
level
and
level
of
in
face
of reduced
income.
straint
faced
was
Discount
rates
were
once
These advances
part
of
with
ne¬
raised
twice
in
1957.
more
were
Federal Reserve from
keep
the
feeding in¬
They
also
served
as
the public and to
borrowing and
were
spending
expanding
too
rapidly and that as a nation we
were
trying to go at a faster
pace than we could maintain.
warnings
the
to
banks
that
Recent
(and
Automobile
sales
.high,
reached
aided
"
terms
on
production
by
an
all-time
sharply
eased
instalment contracts and
'(a record increase in the volume
of
.
consumer
instalment
credit.
; Housing starts, although tending
(down during the year, amounted
to
j
1.3
million
units, not far from
the record high in 1950. In 1956
and
1957,
inflationary
and
large
credit
not
pressures
demands
resulting to the
same
were
extent
Changes
•
Recently, economic and credit
developments have become much
selective.
more
has
been
at
The stock market
subjected
to
a
very
weakening
in
of
the decline have
been limited.
Calling of margin accounts, wide¬
spread forced selling and result¬
ing pressures on credit markets,
such
occurred
as
stock
market
in
other
some
contractions,
have
of
in
continued
the
many
stock market,
industries has
expansive, but in
many
others adjustments have been in-
treasingly on the downside. The
rapid expansion of industrial ca¬
pacity, especially in the past two
has
years,
shortages.
terials
eliminated
Supplies
and
of
finished
most
ma¬
have
become adequate, and, in some in¬
stances, excessive.
Prices of
sensitive industrial
such
steel scrap,
as
some
materials,
have declined
sharply, and the broad wholesale
price
averages
have
dipped
slightly.
The persistent rise in
of
services
goods
tapered
off.
consumer
has
and
Al¬
though offerings in corporate se¬
curity markets have been very
large,
demands
for
bank
credit
this autumn have not increased
anticipated.
In
the
labor market, too, pressures have
eased, and the autumn rise in
ployment
has
been
less
em¬
than
usual.
Unemployment has con¬
tinued relatively
low although
moderately above a year ago. It
seems
clear that the boom has lost
much
of
of
its
business
As
know, Federal Re¬
you
momentum.
Surveys
intentions
indicate
lower outlays for new plant and
equipment in 1958.
Business in¬
ventory
policies
have
become
rates
discount
Bank
have
just been reduced from 3V2 to 3%
to the easing tenden¬
which! have developed in fi¬
nancial markets and business
ac¬
tivity.
time, we must
same
con¬
tinue to be vigilant, reappraising
the situation continuously as
it
International develop¬
necessitating a reevalu-
develops.
ments are
ation of
our
defense and scientific
research efforts. To meet this
challenge,
new
of vari¬
ous types may need to be brought
into action. However, relaxation
more resources
credit
to
restraint
meet
our
growth needs must not be taken
a signal for a resurgence of a
as
spending
Chairman
I fully
experience,
Martin
has
stated
credit
the
1953-54
and
—
him—that the
with
active
fight
In reviewing the
spree.
1953-54
mild
was
policy
adopted
recession
to
ease
carried
too
out
of
vig¬
orously, that restraint during the
recovery
period may not have
been reasserted as strongly or as
promptly as now appears to have
desirable.
when
As
it
credit eased.
the
\
of
nature
tions
made
have
and
genuine
in developing means for
progress
dealing
much about
economic fluctua¬
learned
have
We
We have not
with) them.
learned how to abolish the
business cycle nor is it certain
that we should. The Federal Re¬
serve
can
and
does
contribute
yet
the moderation of
business cycles through its power
to influence the supply, cost and
availability of credit. There are
materially
to
limits, however, to the influence
that
it
have
can
on
the economy
that it can ac¬
to the things
and
for
steel,
little
is
there
that monetary policy can do about
it directly. It can, however, help
protect themselves are hurt most.
Another objective in lighting in¬
flation is to avoid the evils of de¬
flation that will inevitable follow
unrestrained
an
and
bear
hardest
long-con¬
These evils, too,
those least able
tinued inflation;
on
themselves. Those of
to agriculture know
better than most the deflationary
consequences
of inflation.
You
may recall that after World War
I the price of Iowa farm land was
double its prewar level. The price
of that land dropped sharply dur¬
ing the 1920's and by 1933 it was
substantially below its prewar I
protect
close
you
level.
also
You
know
diffi¬
how
cult the task is of bringing sup¬
ply and demand into balance.
Costly government programs do
not
provide a simple solution.
The situation can be greatly com¬
plicated and made far more re¬
sistant
ments
correction
to
during the preceding boom
overly enthusiastic
have
become
have
and
commit¬
if
been
supported by ex¬
cessive credit.
We
and
all
our
the
policy of credit easing
strong and insistent that
was
we
were soon confronted with rising
prices and inflationary credit de¬
velopments. In the light of this
experience, we must be doubly
alert to any sign of resurgence of
inflationary
In
some
at this time.
pressures
ways,
the inflationary
problem of the past two
been
years
greater because the
experience
lent
has
1953-54
support
to
the
view that the government and the
Federal Reserve could "manage"
the
economy and
mit
a
This
in
would not per¬
both
want
material
human'
our
resources
to
be
be
freedom
our
wide
as
purchases
of
as
also
want
any
possible
possible
consumer
the investment of
in selection of
of
choice
in
our
goods,
in
savings, and
occupations. We
protection against
our
our
full
foreign, aggression.
things cannot be obtained
merely by wishing for them. It
is necessary to work for them and
to develop policies — public and
private—which will contribute to
These
economic
an
wisdom
become
and
fiscal
and
power
policy
widespread and has
more
contributed to the view that it
"safe"
to
of
loss
has
ahead
go
because
is
the
setting favorable to
cyclical reac¬
greatly reduced.
economists have
This
Moreover, some
gone further to proclaim the in¬
evitability of continuing "creep¬
ing" inflation.
as
a
who
of the two be kept within
of
current
resources.
limits
is
true
as
whole
must
as
for the economy
it is for the farmer
hold
back part of this
for next year's seed
if he expects to
stay in business
and an even larger
portion if he
year's
crop
expects
to
trade
it
for
an
im¬
opinion, it proved seed that will increase his
would not be surprising if some future productivity.
businessmen, bankers, and con¬
Economic Stability Goal
sumers
misjudged the situation
and undertook investing, lending
The Employment Act of
1946,
and
purchasing
commitments among other things, pledged the
more freely than they would have
Government to use its powers to
In
such
a
climate of
otherwise. There
ance
that
such
can
be
no
assur¬
overcommitments
promote
full
employment
oppor¬
tunities and maximum
production
the
goal
if undermined by specula¬
tive misdirection of resources and
tained
rising prices during periods of in¬
and by frightened curtail¬
flation
ments of
activity and sharply fall¬
ing prices during consequent de¬
flations.
.
,
Clearly, economic stability is
not, as has been argued in some
quarters, an obstacle to growth
and
full
employment. ; We are
being told by some economists
that
creeping
inflation
is
in¬
evitable
and
necessary for rapid
employment—in
words, that economic sta¬
bility must lead to unemployment
growth
and full
other
and idle resources. Aside from the
dubious
policy
morality of an economic
that surreptitiously picks
the pockets of some for the bene¬
fit of others, this argument would
be
more
assurance
appealing if there were
that creeping inflation
would not lead to
tion.
No
such
galloping infla¬
assurance
be
can
given. Rising prices, if long con¬
tinued,
must certainly lead to
expectations of further price ad¬
Such expectations, espe¬
cially if they become widespread,
vances.
economic
encourage
decision
on
basis.
that
People will naturally
attempt to take advantage of, or
protect themselves against, this
"inevitable"
trend.
In so
doing
anticipate their future
and
compete
currently
they will
needs
against each other for goods and
capital
assets,
thus
driving
up
prices.
The process of
speculative com¬
mitments, of investing ahead, for
protection or future price gains
will
sooner
lenders
later
or
well
as
anticipate
influence
borrowers
as
such
make loans
increases
on a more
to
and
to
liberal basis
than otherwise. The acceptance by
of this
philosophy will
lenders
lead
both
to
over-expansion
of
credit and also to misdirection
credit toward those
price
windfalls
When
tions
of
profiting from
and
from
away
those
needing funds to
production and growth.
finance
these optimistic expecta¬
change
they
as
volume
of
must,
credit
the
asso¬
ciated with these expectations will
still
remain.
It
must
then
be
liquidated in
ness
ent
period when busi¬
a
expectations
nature.
vances
Gains
are
become
may
of
from
differ¬
a
price ad¬
losses
from
price declines.
Those
who put their trust in
systems, savings bonds,
pension
insurance
for
or
their
other debt to
retirement
or
provide
for
the
needs of their families would find
themselves robbed by inflation of
a substantial
part of their savings.
The
effects
velopment
of
of
a
this
continued
kind
on
de¬
our
economic and social system would
be incalculable. It will be an un¬
fortunate
volves
sum
but
stability is implicit
pledge to assure sustained
production. Maximum production
and employment cannot be sus¬
and
the
danger of
clearly recog¬
so
time
the
sion
the
not
that
economic
of
ductivity, the only sound basis for
a
rising standard of living, in¬
ment.,
depressed condi¬
1930's. The
was
at
people
from
been
nized
their achievement. Increased pro¬
increased
capital invest¬
This, in turn, requires a
proper balance between spending
of for
current consumption and sav¬
has
ing for capital expansion and that
recession to become serious.
the
tions
to
want
the
tions of the
inflated
overly-optimistic confidence
monetary
risk
We
to
return
a
ficient.
turned
The response
was
in
products,
out, fully utilized. We want an abun¬
there was at that time a large dance of economic opportunities,
number
of
potential borrowers growing productivity and a rising
standard of living for everyone.
ready to enter the credit market
been
sustainable basis. The
Act
passed at a time when the
country was obsessed with fear of
a
on
inflation
to
At the
as
seasonally
in
Thursday, December 5, 195?
..
.
whether or not
they are wanted, or to all indus¬
tries, whether or not they are ef¬
all
for
demand
tensions
easing
in response
cies
earlier
goods
of
and
serve
so
Outside
activity
machinery
favorable
If there is not enough
demand for cotton and too much
deflation and inflation with equal
to
been of serious proportions.
sus¬
There is no economic
by which markets at
prices can be assured
economy.
goods markets in re¬
cent months, this has become a to
preserve over-all economic sta¬
period when an alert and search¬ bility by maintaining an economic
ing scrutiny of economic develop¬ climate within which maladjust¬
ments is especially important for
ments
will
be
minimized
and
those of us in positions of re-, their correction facilitated.
sponsibility for financial policy.
We must be constantly aware of
Why Fight Inflation?
the numerous changes going on
One of the basic purposes in
and
be
prepared
to
react
to
fighting inflation is to avoid the
changes from either direction. We
inequities created during inflation
must be ready at all times to fight
itself when those least able to
agree
business confidence in short-term
be
can
them or to the
complish.
credit
of
prospects.
With the stock mar¬
ket largely on a cash basis be¬
cause
of
high margin require¬
ments, however, the consequences
sound basis
a
that
pace
view
reflected
some
on
Changing Policy Problems
In
sharp decline, and this has been
in
a
tained.
essential
an
to
program
a
flation.
the
greater re¬
monetary expansion.
and
1956
Federal
the
exercising
on
prices
Inflationary pressures and expanding credit in 1955 were associated witfy rapidly expanding
production, especially of consumer durable goods and new
housing.
,
the
farm
of inflationary devel¬
It is hoped that this
time the inflationary danger
is
actually over and that after a
brief period of testing, such as we
are
now
experiencing,
growth
opments.
vigor.
year.
situation
cessity of
in
a
followed
soon
was
resurgence
reflected
1955
of
by
moderate relaxation
restraints
closer approach to capacity lim¬
itations in some key industries,
not
in
years,
occasions
a
Continuing Inflationary Pressures
abroad
recent
of
us
vigorous
business .senti¬
ment has become pessimistic and
signs
of
lessening
inflationary
pressure have appeared. On these
in
and
In
fronted
powerful upward thrust of world¬
wide inflationary forces has been
blunted only temporarily or has
been stopped. On otner occasions
will be resumed
peting demands.
brief summary, this was the
broad economic picture that con¬
to know whether the
is too early
expenditures also increased while
defense
outlays were generally
Reserve
other
most
In
nondurable goods
were
as
in many
and
above their reduced level in 1955.
four
rate
services
1956
was
policy of credit re¬
a
events unfolded
as
re¬
were
considerably, but their ex¬
penditures for
growth
1953-'54
houses
automobiles and
member
banks to help in safeguarding the
value of the dollar and promoting
pressures
ada
without cost to
be worked out
can
those undertaking
declining.
been
Signs
ers
Financial Chronicle
The Commercial and
(2452)
day for this country if
get the idea that pen¬
ever
systems are a fraud against
them and that it is foolish to save
dangerous to lend
It will be
those
sad
a
who
are
also for all of
to
others.
day not only for
hurt directly but
us.
Postwar
Experience
Throughout the postwar period,
the
economy
has
performed
reasonably well and much better
than most of
basis
of
World
us
our
War
I
dared hope on the
experience
and
in
the
after
decade
before World War II.
Over the past decade there have
been only two
significant cyclical
declines in general
activity. Both
of these were moderate
and short¬
lived.
The first decline occurred
in 1948-49. It is often
described as
an
inventory
was
able
recession although it
broad enough to include siz¬
reductions
several
in
output
in
capital equipment indus-
Number 5696
Volume 186
mild
second
The
tries.
.
.
The Commercial and Financial Chronicle
.
reversal deflationary trends. In
occurred in 1953-54 when defense
expenditures were being sharply
curtailed. Inventory adjustments
also were being made in many
lines following an excessive expansion in 1952 and early 1953. In
both of these periods industrial
for
order
(2453)
sable
the
to
maintenance
of
sta-
such policy to be most effective, it bility, we should not place sole
is always desirable, and in certain reliance on them. Maintaining
situations imperative, that
an
stantial Treasury surplus can be
a powerful weapon. Conversely,
one- during contractive periods, tax
tenth. Wholesale prices dipped in reductions or expansion in gov- citizens.
1949 but not in 1954. Neither of eminent activities serve in some
This self-discipline is of
special
these reversals was comparable in degree to counteract declines in significance at the present time,
depth to the recession in 1920-21. private demands.
A patient with the flu is confined
Then production, employment, and
In conclusion, I should like to to his bed. When the fever sub-
receded
production
about
all declined very sharply, add this basic thought which al- sides he
prices
received by farmers were ways should be kept in mind. In
cut in half between mid-1920 and a
free enterprise economy the
the spring of 1921. Industrial pro- achievement of economic stability
duction fell about one-third, as it requires more-than
appropriate
did in the sharp but not prolonged government
action.
It
requires
1937-38 recession.
that private individuals, be they
During most of the period since consumers, workers, or employers,
World War II, the economy has act with restraint in periods of
enjoyed high employment and ris- inflationary trends and with calming living standards, adjustments ness and faith in the future during
Prices
i^Th^e rolhnJ'adiustnfents
along, lhese lolling adjustments
sometimes have been sharp in individual lines but, in a generally
but
.
...
worse
policies
the
of
the
first attack.
So
it
fever
and
easing of the
restraint, we must dis-
pressure of
cipline ourselves against the
which brought
over-
on the
inflationary lever initially and the
resumption of which might precipitate a dangerous relapse.
,
indispen-
are
than
is with our economy, which has
been suffering from a fevpr of inflation. Now, with the subsidence
Thus, while appropriate credit and
monetary
be released from bed
may
he
is cautioned against too
quick a resumption of activity lest
he suffer a relapse that may be
periods of deflationary
tendencies.
*1
...
situation, have not lasted
long. Declines in some activities
have been offset by advances else¬
where so that changes in the total
strong
have
small.
been
of
chases
Consumer pur¬
cars
and homes
new
Securities Salesman's Corner
substantially last year
while consumer expenditures for
non-durable goods and services
and business
There,
are
retired people,
many
well
as
those who would
as
like to have additional income to supplement their
earnings that
would
welcome
check from
a
their
investments regularly every
earlier.
stocks that would produce a generous dividend income
every month
-•
.
The
ability
the
has
economy
demonstrated to adjust flexibly to
changes is heartening. The demon¬
stration
provides evidence of the
underlying strength and resilience
of our free
enterprise economy
operating under the guidance of
general credit and fiscal policies.
These
policies have Themselves
been
more
readily adapted
to
changing conditions than might
have been expected from exam¬
ination
of
the
-
record.
historical
The Federal tax reductions effec¬
tive
in
1948
in
also
and
in
1954
been
fairly well-timed in terms of their
for
usefulness
government eco¬
nomic policy. The prompt relaxa¬
retrospect
tion
restraints
credit
of
development of
in
1953
another
case
ease
have
to
appear
the
and
policy of active
a
and
1954
constitute
of expansion.
It would obviously
be unwise
rolling adjustments to
provide perpetual prosperity.
It
would be equally unwise to as¬
sume
that individual adjustments
to count
must
on
become
structure
and
struments
cycles
are
though
The
cumulative.
functioning
the
of
have improved. Our in¬
economy
to
deal
business
with
better than before
they
still
are
even
from
far
perfect.
As is evident, we have not been
completely successful in our ef¬
forts to contain inflationary pres¬
But perhaps
sures.
be too
severe
should not
we
this lack of per¬
on
fection. I doubt.that perfect price
stability
a
free
can
achieved
be
ever
in
enterprise system—or any
system
for
that
matter.
other
Furthermore, I
am
not at all sure
that it would be wholly desirable.
Some upward drift in prices dur¬
ing
periods
when
pressing against
some
decline
demands
our resources
and
following these
un¬
perform
useful
function
in
helping
to
bring about adjustment of spend¬
ing
and
saving
in
decisions
the
One
further
monetary
changing
to
be
in
instrument
policy
or
in
climate
is
available
inflation
connection
measures
economic
emphasized.
monetary
ing
fact
for
.
and
the
only
suitable list of high grade common
a
the
other
district but also
riers
as
For
Oct.
31,
income
pares
10
its
in
nation's
months
road
of
car¬
ended
reported
$1,632,514
of
gross
on
income
net
a
on
gross
$17,323,158
in
the
net
a
$18,461,569. This
with
652,746
the
first
the
revenues
com¬
roads
whole.
a
the
com¬
of
$1,of
revenues
like
period
of
1956.
earnings
equal, after
charges, to $2.29 a share
713,900 shares outstanding and
were
taxes and
on
with
compares
$2.25
share
a
on
733,700 shares outstanding at the
end
of the
has
been
1956
period. The road
market. On Nov. 18 the road
open
reported
that
with
This
in
held
stock
treasury totaled
S.
L.
the
shares
86,100
as
77,700 previously
policy is expected
control
over
entirely
dieselized
these requirements.
to
investment
"!
•
_
Sears Roebuck
__
Int. Harvester
some
interest
this idea
present
to
Dividend
Ind. Current
Dividends
Rate per Share
Payable
25
1935
$1.00
JAJO*
16
1947
1.00
30
1910
2.00
33
1940
1.50
">
-
__
System-
39
3923
2.00
46
1890
2.80
16
1943
1.00
1909
2.00
I
33
Lighting
American Tobacco
General
to
Paid Since
Boston Edison
Pacific
be of
may
like
Price
Radio Corp. of America
Columbia Gas
meet
Recent
_
Engl. Elec. System
American Can
would
would
prospects.
....
New
who
that
stocks
____
Motors
F. W. Woolworth
Standard Oil N. J
-
74
1905
5.00
36
1915
2.00
37
1912
2.50
50
.1882
2.00
a
*JAJO—January, April, July, October. FM4N—February,
MJSD—Marcli, June, September, December.
at the end of the
was
a
have
also
tributions, extras and rights,
industries represented:
had
the
While
the
diversify
traffic
consider¬
principal
At
time
one
were
grain and dairy products. Agricul¬
tt
but in recent years
products
still
play
large
a
products, bituminous coal and iron
steel
and
U
importance. The railroad has been
1
have
aggressive
traffic
There
years.
are
only
to
in
its
been
of
to
new
in¬
territory. This has
increase
which
has
line"
"on
been
major
a
Bat Don't
down
has
tenance
effective
to
visualize
in
"The
your
mind
own
what
just
or
legal phrase¬
confidence
faith
and
in
their
in whom they have
ability to pay them
regular checks.
with
A
and
erally
of
any
investor.
Exchange.
carefully selected investment list of
that will pay you an income every
stocks
to
common
stocks,
rep¬
ten
leading industries. The income return is gen¬
portfolio can be tailored to the requirements of
issues
are
listed
on
the
New
York
Stock
'
May we mail this suggested monthly income program to you?
Please
use
gen¬
operate
particular from a transportation
point of view and also switching
with the attendant labor costs.
This rail sought to acquire con¬
of
the
Toledo, Peoria and
trol
Western
state
Railroad, but the Inter¬
Commerce Commission held
that
the
latter
should
be
sold
Pennsylvania Railroad and the
Atchison, Topeka & Santa Fe. This
1. C. C. ruling has been taken to
the courts. The T. P. & Wf would
valuable
a
"feeder"
line
Currently
it
paying divi¬
quarterly, hav¬
ing paid $1.40 in both 1957 and
3 956.
In the past the road also
has paid stock dividends. In 1954,
a
stock dividend distribution of
dends
35
of
is
cents
200,000
shares
was
authorized,
bring the total outstanding up to
800,000 shares from 600,000 shares.
As
indicated
previously,
the enclosed card.
market purchases.
open
the
For
week
ended
carloadings showed
a
Nov.
Loadings of the
whole showed a drop
of 15.1% under a year ago. While
loadings in the final weeks of this
year likely will run under those
of a year ago, it is believed that
for the full year the Minneapolis
& St;. Louis will be able to equal
over
a
year
country
ago.
as a
the $2.49 a
share reported in 1956.
With Merrill Lynch
A
(Special to The Financial Chronicle)
BOSTON,
Mass.
Israel has been
of
Merrill
& Beane,
—
Ernest
utilization
added to the staff
18 Milk Street.
He was
has
therefore,
set
program
is
concerned
mainly
ensuring that
specialized knowledge and skills. This in¬
creating conditions which will nourish their
professional development and increase their produc¬
tivity and creativity, providing them with suffi¬
technical
and
BLANK
ameliorating
Investment
&
CO.
clerical
as
assistance
well
as
release
to
with adequate
facilities. All of these measures
be taken by employers. The Presi¬
dent's committee is, therefore, organizing a series
of utilization conferences or clinics throughout the
and
problem
part both of the employers and of the scien¬
and engineers themselves and to facilitate the
the
exchange of ideas." — The President's
on Scientists and
Engineers.
All this is doubtless very
Securities
most
Committee
well, but the program
where the
factors
grievous neglect of these and related
is found.
.
formerly with Draper, Sears & Cq^
committee
them from routine duties
:
G.
Lynch, Pierce, Fcnner
ought not to overlook the Armed Services
truly,
16
gain of 0.7 %
.
Yours very
this,
amount has been reduced through
their
tists
for
the M. S. L.
volves
on
to
the
country to stimulate an awareness of the
consists of 12 outstanding
All
expensive
are
must, of course,
year?
the
expendi¬
has been
goals: first, to encourage the most
utilization of the present corps of scien¬
engineers.
equipment
Suggested Letter
Investor,
Would you like to have a
resentative
in turn
main¬
down
our scientists and engineers
work under conditions that make maximum use of
cient
not interested in looking to the future—their future
program
cut
equipment
The management
tures.
is now!
The
This
years.
to
of
Foiget
President's
tists and
expressed in percentages, statistics,
common
11
provide attractive growth prospects.
regularly mailed to them from corporations
high-grade
to
helped
itself two basic
from a Securities and Exchange Commission prospectus.
These people look for the mailman. They expect to have letters
month in the
completely
equipment
and
The Aimed Services!
"The
not
years,
road
but
roadway
were
rehabilitated.
Through
the
purchase
of
new
freight cars, the average age of its
freight
cars
has
been
brought
growing
attracting
ten
ology
Dear Mr. Retired
the
was
dieselized
manufactured
it
retired people desire when they invest in securities you will find
are
its
tural
Sell Income
They
the
agricultural class, it has been able
tended
Oil
considerable
in
May, August, November.
Farm Equipment
that it is not
still
is
part in providing gross revenues,
Electronics
try
road
U
it
Automobiles
will
ago,
it
MJSD*
Chain Variety Stores
you
29.5%
was
year
years.
FMAN::i
The
while
operating ratio, reflecting all
operating costs, was 75.2% against
76.6% in the like 1956 period.
a
commodities
Tobacco
If
ratio
ably in recent
Natural
Several issues also
roads.
its
Mail Order and Dept. Stores
Gas
other
past records of stock dis¬
during good
Containers
to
u
Electric Utility
Food
1956 period and
u
their past records all the foregoing are dependable
and well tested, income producing, stocks. Conservative investors
who would like a steady monthly income should find that this
portfolio can be arranged to produce about $40 per month on every
$10,000 unit of investment at today's market price for the portfolio.
stocks
makes
remarkable showing in
against 29.7%
to
Based, upon
of these
which
operating efficiency. Despite
higher wages this year than last,
the transportation ratio was 33.5%
as compared with a ratio of 34.0%
dustries
Several
expenses
maintenance
The following list
salesmen
their clients and
of
group
good
and
is
for
comparison
representative
very
a
agriculture.
During the past few
be
maintained
has
set
up
factor in reducing its dependence
on
reducing branch lines which
These
this
combat¬
for
Rail¬
sustained
our
needs
Credit
not
parison to
in the year, I have discovered that at recent market levels
you can
erous
economy.
"With
casting around for
are
usual periods of hyperactivity are
not only unavoidable but
a
In
in
point. This latter
experience suggests that flexible
credit policy can have some con¬
tra-cyclical effects during periods
of contraction as well as in periods
Louis
well
earnings this year, both in
M.
month.
/.;,/•
St.
to be continued.
drifted off to levels below a year
Policy Implications
&
shown
reported.
A Check Every Month
plant
,
has
way
compared
By JOHN DUTTON
outlays for new
and equipment increased
very sharply. Non-manufacturing
employment continued to expand
through August of this year while
employment in manufacturing has
Minneapolis & St. Louis Railway
Minneapolis
following a policy of
purchasing its own shares in the
declined
rose
Railroad Securities
stability and orderly growth in a
free private enterprise economy
requires a balanced combination
of fiscal and monetary policy, together
with
intelligent
s e 1 fdiscipline
on
the
part
of
all
ap-
propriate fiscal policy be pursued,
In an inflationary situation, a sub-
29
I
30
takes
while Ontario
Public
Utility Securities
By OWEN ELY
Detroit Edison serves not merely
apparently
application
no
for
a
rate increase is
7,600 square miles in southeastern
Michigan containing over half the
people of the state. The area has
The company has been able to
increase net earnings by reducing
growing faster than Michi¬
whole, and the rate of
growth is well above the national
a
The Census Bureau has
average.
predicted
that Michigan will in¬
population 43% by 1970
compared with 1955, vs. 27% for
the United States. The people in
the area represent a very stable
population and Detroit has the
its
crease
second
highest ratio of city
occupied dwellings.
While
Detroit
owner-
is
generally re¬
garded as the headquarters of the
automotive industry, the increase
in Detroit Edison's industrial
in
enues
recent
stantially
^-decentralizing
suburbs, and
such
will
centers
this
supply,
strategic
shipping
costs,
trained
its
are
and
water
the
within 85
Lakes
11,000 inland
supplied by an average
annual rainfall of about 30 inches.
Water
transportation affords low
shipping costs for raw materials
and manufactured
goods. The area
directly by navigable
is connected
waterways with
omies
Canada, and with the South
by the Mississippi River tributary
system. The Detroit River is the
busiest waterway
in the world and
tonnage passing
Sault
eral
Sainte Marie
times
be
area
and
through
is
Locks
important
should
attract
in
each
units
the
of
(with reduced
line losses)
Modern
have
methods
the
the first to bill
company was
the
with
tomers
electronic
new
It
computer.
promotion
has
and
simplification
training,
de¬
transfer
employees,
for
cus¬
work
etc.
De¬
partment heads this year submit¬
ted 591
"objectives", of which over
half were designed to reduce costs.
The
number of employees has
been reduced by 700 in the past
five
saving of about
year) despite a 45%
(at
years
a
$4.5 million
a
increase
sales.
in
Substantial
obtained
interconnection
about four years ago)
(installed
with
advantage has been
the
Ontario
Hydro-Electric
,
Power Commission.
The company
to
help
Ontario
the
supply
38%
Detroit
of
dollar
revenue
centage
for
The
to
Continued
Capitalization,
following
the
private sale of $70 million mort¬
gage 4%% bonds last July, is 50%
cluding
in¬
debt, 7% convertible
debentures,
and
43%
common
stock (there is no preferred stock).
Detroit
Edison
is
Edison's
obtained
nearly
a
from
also takes
metropolitan
com-
The
lamps.
care
8%
most
ing
policy
issuing
of
met¬
the
pn
10%
during the past ten; an
gain of 7% in the next
the
past five
years,
debentures, and this has proved
very
advantageous both to the
company
annd its bondholders.
For example the convertible de¬
benture 3s sold
has
1947
to
3.1
million
at the end of this year and is
expected to reach 4.2 million kw.
in
1960.
is
carried
By 1960, if this
out,
tripled
the
in
program
company
size
in
will
twelve
However, President Cisler
years.
that "if
traction
we
industrial
an
results
struction
from
the
plan to adjust
with
program
con¬
our
the
con¬
160, and the 3%
12814 although not
until next October.
obtained
interest
less
rate
on
high
as
sold up to
convertible
as
has
198 this
as
314s
The company
than
these
the
going
issues, and
conversion is usually delayed
gradual
that dilution of
so
and
com¬
stock earnings is spread over
mon
period
time.
of
The
also held
ratio is
debt
mortgage
at
have
'recognized the
operating
and financial
sound
management
the
which
the stock has done very
with
pared
other
utility stocks.
has
been
well com¬
"metropolitan"
dividend rate
The
raised
gradually
from
the
recent
price
the stock yields over
30%
of
dividends
although
the
fluctuation.
about
14.5
14%
but
to
a
ratio
is
subject
to
times
12
the
earnings
of
months ended
over
most
of the increase
due
was
on
from
page
to
needs."
Regarding rates and regulation,
the company realizes that it is not
earning the full return which is
permitted under Michigan stat¬
utes, which allow a fair value rate
Last
on
an
base.
the
advised
year
it
earned
about
original cost mid-year
However, while it has
Michigan
about
its
Commission
earnings
.
rate,
appreciably'under that of November,
expectations.
likely fall
The
industry's
metalworking
"Steel"
said
is
there
decline
The
week
a
in
will
year
lack
apparent
an
prices
scrap
relative
of
be
of desire
the
year.
about
for
was
stability.
resumed last
'"Steel"
hard
week, follow¬
composite
The
American
rate
operating
making
Iron
capacity
Steel
and
Institute
steel .companies,
of
for
the
entire
announced
having
industry,
96.1%
will
an
1
gross
a
that
the
of
be
No.
on
heavy melting steel slipped another 17 cents and, at $33
ton, it is at a new low since December, 1954....
;
the
steelof
average
72.0% of capacity for the week beginning Dec. 2^1957 equivalent
to 1,843,000 tons of ingot and steel
actual rate of
an
As
a
rate, steel operations
second
weeki,..
for castings,
this
of
expected
drop
again register
may
;'; ■•/
a
annual
on
For
the
duction
like week
month
a
1,996,000 tons.
A
year
The
not
operating
rate
is
higher than capacity in 1956.
on
an
annual
ago
ago.
output
three-year low for the
rate
the
the
ago
or
based
week
a
steel
for the weeks
capacity of 133,495,150 tons
placed at 2,493,000 tons
was
the
in
■.%.
The industry's ingot production rate
based
compared with
as
72.1% of capacity, and 1,846,000 tons
consequence
as
an
1957 is
of Jan. 1, 1957.
78.0% and
was
actual weekly
pro¬
production
101.3%.
comparable
because
capacity
The percentage figures for
capacity of 128,363,090 tons
Electric Output
as
1956
is
are
of Jan. 1, 1956.
Slips in Thanksgiving Holiday Week
of
amount
electric energy distributed by the electric
industry for the week ended Saturday, Nov. 30,
1957, was estimated at 11,613,000,000 kwh., according to the Edison
Electric Institute.
Output;the past week declined due in part
to the Thanksgiving Holiday.
:
The past week's output (fell
523,000,000 kwh. below that of
Industry
output for the first time in
of
power
previous week and
the
comparable
by 462,000,000
1956
Week
but
above that of the week endfid
as the bright spots in the
production-softening period for the auto industry.
on
this
sales
of
decline next
on
light and
Day
a
the part of the consumer, even though the book value
of backlogs today is relatively high.
Cancellations are becoming
more common.
So far this year they have amounted to over 10%
of new orders in the machine tool industry.
Steelmaking operations dropped last week, falling 3 percent¬
age points to 73.5% of ingot Capacity with output for the week
estimated at about 1,880,000 net" tdfis.' V>V; -; v
goods
construction credit.
4
shutdown for Thanksgiving
a
.
is most likely to take the brunt of
change in accounting foe the
interest
%<%
-
.
plateau.
$140,000,000,000, up from $133,500,000,000 last year. But with capi¬
tal goods expenditures on the downtrend, industrial building off
and a general softness in'consumer durable goods, an increase in
sales in 1958 is thought to be unlikely.
The stock is selling at
the
a*
publication said that the metalworking segment
The
economy
tax-free,
are
Earnings showed a gain
the previous period,
Sept. 30.
of
3714
5.3%. About
around
on
month which wasn't up tot seasonal
$1.20 in 1950 to the present $2 rate;
at
will
volume
company
enjoys under President Cisler and
continues
Buying for
delivery is hand to. mouth, and the pace of specifying
is likely to slow down as the: holidays approach.
This month's
,
December
ing
Investors
plus'the short week.
business
steel
Current
lower
a
level.
contracts to be negotiated then, but they'll still
new
40-cent package,
a
Car
Thursday, "Ward's"
Dec.
kwh.
advanced
3, 1955.
3.8%
or
below
that
by 254,000,000 kwh.
•'
Loadings Fell 2.2% in Latest Week and
2.7% Below 1956 Period
Loadings of revenue freight for the week ended Nov. 23, 1957,
were 14,535 cars or
2.2% below the preceding week, the Associa¬
tion of American
Railroads .reports.
Loadings for the week, ended Nov. 23, 1957, totaled 632,763
a decrease of 17,857 cars, or 2.7% below the
corresponding
cars,
1956
week
and
a
decrease .of 39,187 cars,
responding week in 1955!
the
or 5.8%
below the cor¬
The 1956 and 1955 weeks both included
Thanksgiving Day Holiday while 1957 did
not.
Automotive Output Dipped
The Decline
Sharply the Past Week With
Registering More Than the General
Thanksgiving Shutdow 11
outh
engine plant strike threatened to halt all Plymouth assembly
by Monday of this week.
"Ward's" added, however,, that overtime assemblies remain
Passenger ear production for the latest week ended Nov. 29,
1957, according to "Ward's Automotive Reports," declined sharply
in strong use at General Motors Corp. and Ford Division factories
and car making was resumed last Friday following the holiday at
ing
all plants
witl} the exception of several Chrysler Corp. facilities.
November production in United States plants
edged out the
with
same
1956 month
in
passenger cars 586,000 to 580,803, but dipped
slightly in trucks, 91,000 from 92,596. Some 622,000 car comple¬
tions
had
been
scheduled
for
November,
this
trade
'
ported.
weekly
re¬
.'
-
.
Steel Production Set This Week at 72.0%
of Ingot
Capacity—Lowest Level in Three-Year Period
ex¬
adjusting utility construction
industrial
kept
high
present
pectation of eliminating as much
as
possible the inherent past lag
5.6%
as
the debenture
year,
Chrysler Corp.'s De Soto plant in Detroit was down all last
week to adjust its production schedules with dealer
inventories,
and industry-wide programming for December and January is
being softened in line with sales trends.
The two-week Plym¬
and
is forecast. Generating
increased from 1.4
years
capacity
rate
demands for
seek
pointed out.
in
average
of
base.
convertible,
industry's decline to 139,281 car and truck completions
week from 175,450 last week reflected more than the
past
general
Revenues have
each
a
The
the
has enjoyed bet¬
growth than have
million kw. in
i
continu¬
The statistical service named these
annual
'1
the few
a
year.
a
midst of
of minor electrical
company
increased
in
of
American Motors Corp. during Nov. 1-20 posted a robust
20.7% sales gain over fhe like 1956 period, the strongest increase
of any United States producer.
The company
ropolitan utilities.
'
The publication said to look for a long series of small but
production-cutting strikes, in the auto industry until next June 1
when a big walkout is likely,; probably against General Motors
Corp. Auto workers are,,showing some signs of moderation in
buying.
troubles without charge.
trend,
one
Corp.'s Detroit Transmission Division
Chrysler Corp.'s engine plants.
and
"Ward's" noted that, both companies are backing
up
the
encouraging pace with strong sales, with General Motors Corp.
during the Nov. 11-20 period jumping to a 50% share of new car
a
burned-out
states
is
large utilities to adopt
of this industry's passenger car
50%
supply of lamps for new
residences (with no service de¬
posit) and free replacement of
have
Assemblies of 1958 models, however, have been hurt by work
long-term
The State oi Trade and
the
company is noted for its
residential service, in¬
generous
kw.
of
%
The
residential customers—a high per¬
five
Commission
temporary needs
Niagara Mohawk Power.
is
the
the
Some
ter
year.
the
dustry.
^pany.
a
sev¬
new
an
stoppages at General Motors
million tons of coal
a
$2.60 for
the
by
early pickup in orders for steel. So far, the improvement
in autos has not meant much, but latest reports show auto output
of
about
been
IBM-705
Thursday, December 5, 1957
.
running about 30% better than it did a year ago. Figures for
latest week place production at above 154,000 cars for the
first time since late in December last year.
a
as
highly
efficient
more
installed
still
installing new transmission
lines of 345,000 volts or more.
great as that going
through the Panama Canal. Open¬
ing of the St. Lawrence Seaway
will
before
and
year
by
other States
seven
ca¬
three coming years. The company
also hopes to obtain further econ¬
and
the
and
be
service
this
of
veloped
com¬
also
are
Unit with
1
into
go
end
programs
is
of
one
lakes kept
the
Every
Great
of
will
unit
industrially-
miles
there
gains
good
munity in the state
and
has
adopted in other departments. The
location, low
manpower.
The
economy
pacity of 289,000 kw. is one of the
two largest and most efficient
generators in the world. A similar
help to stabilize the
area
major
River Rouge No.
will
Reasons for the industrial
in
difficult.
more
consumption, and the
efficiency of its steam plants is
nearly 10% greater than the in¬
dustry average.
The company's
larger
Company's electric load.
rev¬
been in fuel
per¬
moving to the
of these new
the engineering
as
becoming
company's
sub¬
by
re¬
but with the cost of fuel, materials
and labor rising steadily this is
the
some
now.
compared with 63% in 1952,
was
than
increase in car output.
auto makers have been
centage
Leading
plants
years
greater
rev¬
contemplated
operating
expenses,
which
cently were about 55% of
enues
obtains power from
some
Detroit Edison has also been able
the city of Detroit, but an area of
as
periods,
.
other times, to the
advantage of both companies. The
investment, which cost Detroit
Edison
only $1.1 million, saves
Detroit at
Detroit Edison Company
gan
high-water
and
.
of automobiles continues to spark hope
Growing production
from Ontario at pff-
power
peak
been
Chronicle
The Commercial and Financial
(2454)
Leading steelmakers
pects for
1958, but they
are
are
mildly encouraged by market pros¬
resigned to sluggish'buying during
the remaining weeks of this year,
"Steel" Magazine disclosed
production total of
a
decrease
output,
expect ingot output to slip no more than 5%
below
this year's estimated
114,000,000. tons, according to the
weekly magazine of metalworking. They think finished steel use
will hold close to the 1957 volume at around
85,000,000 tons.
They
also expect the current economic adjustment to continue.
Sellers are encouraged by a slight improvement in consumer
interest in the first quarter
of 1958 requirements. It is particularly
noticeable in sheets and strip. Many users who have been
ordering
sparingly the last several months now appear to be more con¬
their
early
first
quarter
needs.
of
cars
36,169
and
units
states "Ward's.":%•••
Last
week's
trucks amounted to
below
that
of
the
139,281 units, or
preceding
week's
•
car
output declined, under that of the previous
week by 29,442
cars, while truck output dropped by 6,727 vehicles
during the week. In the corresponding week last
year 159,976 cars
and 25,062 trucks were
assembled.
Last week the
agency: reported there were 16.877 trucks made
States. This compared with
23,604 in the previous
week and 25,062 a
year ago.
in
the United
Canadian output last week
trucks.
Steelmakers
about
period, with the lower output reflect¬
than the general shutdown for Thanksgiving Day.
week's car output totaled
122,404 units and compared
151,846 (revised) in the previous week.
The past week's
more
Last
on
Monday last.
cerned
under that of the previous
In
the
was
placed at 7,900
cars
and 1,281
previous week Dominion plants built 7.671 cars
1,244 trucks and for the comparable 1956 week
9,405 cars and
2,128 trucks.
and
Lumber Shipments Declined
2.4% Below Output
Week Ended November 23rd
in
Lumber shipments of 495
reporting mills in the week ended
Nov. 23, 1957, were
2.4% below production, according to the Na¬
tional Lumber Trade
Barometer. In the same period, new orders
were 13.1% below
production'. Unfilled orders amounted to 26%
of stocks.
Production was
2.5%
above; shipments 6.2% above and
J
Volume
Financial Chronicle
The Commercial and
Number 5696
186
orders were 2.9% below the previous week and 1.1%
production for the like week of 1956.
new
Business Failures
1,512,000 bales compared with 1,875,000 in the similar 1956 period.
Although wholesale buying was sluggish, prices of cotton
above
Touch Lowest Level in 12-Week Period
Casualties with liabilities of
An
$5,000 or more fell to 203 from
below the 219 of this
size a year ago. Small failures involving liabilities under $5,000,
dipped to 32 from 34 a week ago and 35 in 1956. Liabilities in
excess of' $100,000 were
incurred by 19 of the failing concerns
than
week.
year ago.
a
-nrr,
•
Moving higher in wholesale cost
—5
last! week were flour, wheat,
eggs,
The
represents the sum total, of, the price per
index
pound
foodstuffs and meats in general use and its chief func¬
is to show the general trend of food prices at the wholesale
tion
level.
■
Wholesale Commodity Price Index
The Past Week
to —1%
The
for children's
call
Furniture
dining
stores
last
Interest
contrast,
were
close to those of
Midwest resulted in a moderate
of
chases
and
corn
sagged
oats
conditions in the
4herease;in soybean prices. Pur¬
with prices falling below those
preceding week. A moderate improvement in trading
boosted prices slightly.
'/ i:'
Increased
exports to Vietnam and improved orders
of the
in rye
from
wholesale flour prices climb moderately
during the week. Flour receipts at New York railroad terminals
on Friday totaled
42,575 sacks, with 20,160 for export and 22,415
domestic
buyers helped
for domestic
•.-//
from Cuba.
at
up
both
on
raw
,L;
refined" sugar were
and
unchanged last
buying remained sluggish. Although transactions picked
the end of the week, coffee prices showed little change.
as
Disappointing reports on import volume from Ghana and labor
difficulties in Nigeria resulted in a1 noticeable increase in cocoa
futures
trading
at
the
slackened
at
those of
week earlier.
in
New
a
end
the
York
of
compared
of the week, but purchases
period../Cocoa prices were close to
Warehouse stocks dipped to 160,789 bags
beginning
the
with 310,167
a
Cocoa arrivals
year ago.
into the United States for the season to date were
as
Another
against 3,616,065 during the comparable period
A
moderate
increase occurred in prices on
2,926,494 bags
cottonseed
with interest
and
period
in
re-orders
for
women's
during the week.
fashion
Cattle
resulting in
a
dip
Chicago -slightly exceeded those of
noticeably higher than a year ago. Both
receipts in
was
about 32,800
36,300
ended
on
in
bales compared with 33,000 in Septem¬
October
Tuesday of
a
year ago.
Cotton exports in the
last week climbed to 145,000 bales
call
for
that
of
major appliances
a
a
Reserve
and
on a
,
a
week
year.
as
year,
Nov.
18
York
which
was
about 5% above that for
came a
amounted to
about
deduc¬
$20,873,000. This com¬
pared with $111,279,000 and $20,353,000 in the 1956 calendar year
and $104,367,000 and $19,489,000,
respectively, in 1955.
Nov.
the
Stuart & Co. Inc.
and
offering today (Dec.
are
equipment trust certificates, ma¬
turing semi-annually July 1, 1958
23,
to Jan.
In the preceding
City
Equip. Tr. Gtfs.
associates
1, 1973, inclusive.
are
scaled
to
certificates
The
yield from 4.00% to 4.25%, ac¬
cording to maturity. Issuance and
sale, of the certificates are sub¬
ject to authorization of the Inter¬
Commerce Commission.
past week
state
The
250
the fact that
Thanksgiving week last
week earlier.
issue
covered
is
to
secured
be
by
hopper cars; 55 gon¬
dola
cars;
cars;
and 10 road
50
flat
100
cars;
box
switching loco¬
motives, estimated to cost an ag¬
gregate of $6,800,695.
Associates in the offering are:
Dick & Merle-Smith; R. W. Press-
According to the Federal Reserve Board's index, department
store sales in New York City for the weekly period ended Nov. 23,
1957 increased 11% above that of the like period last year.
In
the preceding week, Nov. 16, 1957 a decrease of 1% was reported.
For the four weeks ending Nov. 23, 1957 an increase of 4% was
registered. For the period of Jan. 1, 1957 to Nov. 23, 1957 the index
registered an increase of 3% above that of the corresponding
prich
&
Co.;
&
Baxter
Co.;
Ira
Haupt & Co.; McMaster Hutchin¬
son & Co.; Wm. E. Pollock & Co.,
Inc.; and Shearson, Hammill & Co.
period of 1956.
Joins Merrill
With C. E. Thenebe
Tucker, Anthony Adds
(Special to The Financial Chronicle)
(Special to The Financial Chronicle)
HARTFORD, Conn.—Josephine
of
Putinas
Charles
has
E.
joined
Thenebe
the
staff
& Associ-
Lynch
(Special to The Financial Chronicle)
COLUMBUS, Ohio—William W.
BOSTON, Mass.— Lawrence E.
Brown has become affiliated with
Tucker, Anthony & R. L. Day, 74
Story is now with Merrill Lynch,
Pierce, Fenner &
Beane, 48 East
Gay Street.
State,Street.
ates, 36 Pearl Street.
Pacific Northwest Adds
Joins Shearson, Hammill
Joins J. S. Lynam
(Special to The Financial Chronicle)
(Special to The Financial Chronicle)
ST.
MANCHESTER, Conn.—Hector
Rivard
C.
has
been
staff of Shearson,
913
added to
the
Hammill & Co.,
LOUIS,
Mo.
—
Jaclyn
Co.,
Inc.,
Ill
South,
Meramee
With Equitable Sees.
(Special to The Financial, Chronicle)
(Special to The Financial Chronicle)
has
J.
Oertle is now with J. S. Lynam &
Illinois Mid Continent Adds
CHICAGO,
(Special to The Financial Chronicle)
PORTLAND, Oreg. — Roger A.
Murch is now affiliated with Paci¬
fic
Northwest
Company,
Wilcox
Building.
Avenue.
Main Street.
vestment
through
New
the
5) $5,400,000 Chicago, Milwaukee,
St. Paul and Pacific RR. 41/8%
taken from
ended
Some encouragement was afforded, however, by
Service
Exports
in
12
income
other
and
Halsey,
decrease of 6%
volume
of
in
was
Offers
dipped about 15% below the level of the comparable non-holiday
period in 1956, trade observers reported.
Hielscher
Bureau.
sales
revenues
Gas
Halsey, Stuart Group
during the week
country-wide basis
period last
Natural
Summer furniture
television sets re¬
on
index for the
operating
tions
week earlier.
Board's
Total
Northern
terest
(revised) was reported. For
the four weeks ended Nov. 23, 1957 a decline of 1%
was re¬
ported. For the period Jan. 1, 1957 to Nov. 23, 1957 an increase
of 1% was registered above that of 1956.
trade
Producing
owns
months ended June 30, 1957 were
earlier, but the buying of lamps
appreciably.
There were further
1957 increased 4% from the like
Retail
Gas
Natural
$116,539,000 and income before in¬
week
centering primarily
week, Nov. 16", 1957
compared with 82,000 in the prior week and 105,000 in the similar
last year, according to the New York Cotton Exchange
period
Natural
ac¬
"
'
furniture, bedding and outdoor
close to that of
Federal
dis¬
the company's
Gas
division.
oil and gas
leases and wells is wholly-owned
and Permian Basin Pipeline Co.
sluggish, while sales of men's shoes expanded
Department store sales
the
is
it
where
states
Company which
fresh meat, poultry and dairy
products. A moderate rise in orders for frozen foods helped reduce
high wholesale stocks. Volume in canned goods and baked goods
was
par
at
gas
tributed locally by
and lighting equipment rose
gains in sales of toys and dolls.
oil,
trading and prices on lambs was steady with lamb receipts up
slightly, A moderate rise in hog prices resulted from increased
buying and a fractional dip in receipts.
Reflecting continued unfavorable weather conditions in grow¬
ing areas, cotton futures prices rose moderately. Cotton ginnings
for the current crop through Nov. 14 amounted to about 6,758,000
bales, or about 58% of the prospective crop. This compared with
84% in the same period a year ago. Daily cotton consumption in
ber
rise
was
close to
re¬
annually at
is 90% owned.
moderate
Interest in both men's and women's Spring apparel
mained
retire
purchases
various points in
through a 10.768-mile system of main, lateral,
distribution
and gathering lines
transmits it to points in the north
plants
substantially.
H.
buying of cattle at wholesale lagged,
the prior week and were
October
finishing
A sinking fund,
88% of the
year.
to
the southwest and
last year.
lard futures prices somewhat.
The
and
six
years,
scaling
thereafter to 100 dur¬
Northern Natural Gas
central
dyeing
costs.
non-refundable
are
beginning Nov. 1, 1961.
Whole¬
boys' clothing
reflecting the unfavorable weather conditions continuing in the
Influenced by the movement in cottonseed oil, soy¬
bean oil futures advanced appreciably.
Higher trading boosted
prices.
Mid-Atlantic
its
prior to maturity, will
natural
cessories, hosiery and jewelry occurred the past week. Purchases
of better dresses and sportswear advanced, as retailers prepared
for early 1958 sales promotions.
Wholesale volume in men's and
Cotton Belt.
in
issue
Northern
at
for increasing
deem debentures
Peoples
Incoming orders
lagged again.
bank
construction,
first
salers of cotton gray goods reported moderate increases in trading
sales volume
/
:
the
calculated
use.
prices continued at week earlier levels. Increased buy¬
ing reduced wholesale istocks, and inventories dropped below
those of a. year ago. Many wholesalers find their stocks not suf¬
ficient for trading requirements. There was another rise in orders
Prices
of
print cloths and broadcloths causing prices to rise somewhat.
There was a slight rise in transactions in woolens and worsteds.
Bookings in carpet wool in Philadelphia expanded substantially.
•
of
portion
for
five years, but are
redeemable
at
105 %
downward
in
Rice
week,
for
week earlier.
a
textile markets improved last week.
many
of
first
otherwise
preparation for the Thanksgiving holiday, housewives in¬
buying of canned goods, frozen foods arid some dairy
products.
While sales of poultry advanced, purchases of fresh
Activity in
part
a
construction
bonds
the
for
in
Wholesale food buying climbed substantially
unfavorable-growing
sales
for
costs, including
a
and
for
The
In
j
growing weather in the Southwest discour¬
aged trading in wheat and prices slipped somewhat as a con¬
Report? of good
In
ceived
in
use
sale,, along
acquisition of distribution
properties
creased their
meat
of
ing the 20th
increases
Northern
sinking
investment in subsidiaries, which
will
use
the proceeds thus re¬
refrigerators, dishwashers and television
sets vvas sluggish, showing slight year-to-year dips.
While vol¬
ume
in floor coverings was sustained at a high level, the call
for draperies and linens sagged.
year.
funds,
incurred
for the
sets, bedding and juvenile furniture. The buying of
gifts and glassware rose considerably and was moderately above
The
sequence.
loans
unchanged.
appreciable
reported
other
this
of
construction
repayment
Buyers moderately increased their buying of draperies, linens
and floor coverings, and volume was close to that of a year ago.
the
,
was
4%%
Natural Gas will
proceeds
1957
room
of
/ /,..
clothing
Co.
debentures, due Nov. 1, 1977.
with
year ago.
Best-sellers in fashion accessories were handbags,
gloves and jewelry. While volume in men's furnishings expanded,
interest in topcoats and suits fell below that of a week earlier.
dwindled.
'
the
period ended
from 3% below to 1% higher
was
$25,000,000
Gas
Northern
a
Purchases
week.
the
fund
noticeably boosted their purchases of wear¬
ing apparel during the week, but volume slipped below that of
grains, livestock, steel
rubber,
and
in
trade
of
Natural
and the South Atlantic States —6 to —2%.
general commodity price level dipped
slightly during the week. On Nov. 25, the Dun & Bradstreet
daily wholesale commodity price index registered 276.64, com¬
pared with 277.33 a week earlier and 300.44 in the similar 1956
Following declines in prices on some
scrap
retail
of
issue
an
by the following percentages:
declined again
Slips Somewhat1
volume
by
according to spot estimates collected by Dun &
Regional estimates varied from the comparable
ago,
year
levels
down
of 31. raw
underwriting group headed
Blyth & Co., Inc. is offering
publicly today (Dec. 5) at par,
improved
Women shoppers
Sharply, Marking
hams, bellies, lard, butter, sugar, cottonseed oil, beans,
raisins, steers and hogs. Only corn, oats and cocoa were
in price for the week.
:/
,
buying
Middle Atlantic States
+2 to +6%; Pacific Coast 0 to 4-4%; East South Central and
Mountain —1 to
4-3%; West North Central —3 to 4-1; West
South Central —4 to 0; East North Central and New England
above the $6.16 at this time' a year ago.
rye,
a
1956
Highest Level Since August 13, Last
Following a slight dip the week before which interrupted a
four-week rise, the wholesale food price index, compiled by Dun &
Bradstreet, Inc., went sharply higher last week to stand at $6.36
on Nov.
26. This marked the highest level since Aug. 13 when
it also stood at $6.36.
The 1937 high was $6.39 on Aug. 6. The
current figure reflects a gain of- 1.3%/over $6.28 a week ago,
and of 3.2%
dollar
total
Bradstreet, Inc.
•
Wholesale Food Price Index Rose
consumer
Wednesday of the past week
on
off during the
week.
Manufacturing casualties declined to 47 from 58, whole¬
saling to 21 from 30, retailing to 114 from. 149, construction to
40 from 49 and commercial service to 13 from 22.
While more
manufacturers and construction contractors succumbed than last
year,
declines from the 1956 level prevailed among retailers,
wholesalers and service enterprises.
'
,
Geographically, holiday decreases were reported in seven
of the nine major geographic regions.
Failures .in the Middle
Atlantic States dropped to 67 from 87, in the East North Central
States to 38 from 47 and the Pacific States to 67 from 82. The
week's only increase occurred in the East South Central States,
up to 10 from 6. while the Mountain States held at 2. Trends from
last year were mixed, while mild dips from 1956 prevailed in
five regions, but the East North Central, South Atlantic, East
South Central and West South Central States had heavier casual¬
ties than
Although
The
and trade groups failures fell
all industry
45/8% Debentures
Slightly Under Level of 1956 Week
noticeably last week,
it was slightly below that of a year ago.
Year-to-year declines
in purchases of men's and women's apparel, appliances and linens
offset increases in furniture, food products and gifts. During the
comparable week last year post-Thanksgiving Christmas shopping
was underway.
Sales of new passenger cars were close to those
of both the preceding week and the similar period last year.
preceding week and were slightly
against 32 in the previous
Northern Natural Gas
yarns.
Trade Volume Holds
1
occurred.
In
crop
in carded cotton
rise
industrial failures declined to 235 in the
holidav week ended Nov. 28 from 308 in the preceding week,
Dun & Bradstreet, Inc., reported. At the lowest level in 12 weeks,
casualties were down moderately from the 254 last year, but re¬
mained above the 209 in 1955. Eleven per cent fewer businesses
failed than in the comparable week of prewar 1939 when 264
as
cotton
31
Blyth Group Offers
The rise was attributed to the un¬
predictions. There was a moderate price
somewhat.
goods rose
gray
favorable
and
Commercial
274 in the
(2455)
111.
been
—
Robert E.
added to
the
staff of Illinois Mid Continent In¬
Co., 676 St. Clair Street.
T.
GREENSBORO, N. C.—William
Warmath is now connected with
Equitable
Securities Corporation,
Jefferson Standard Building.
Equitable Sees. Branch
SAVANNAH,
Ga.
—
Equitable
has opened
a
branch office
at 24 Drayton
Street
under
the
direction
of
Securities Corporation
O. B. Wood, Jr.
32
(2456)
The Commercial and Financial Chronicle
Continued
from
5
page
lowing depreciation only
nal
cost,
forcing a
Unrealistic Profit
Reporting
those
of
work with
who
us
com-
At,
that
point
leaseback
a
economic facts have been distorted
complish
in
lower
the
reports
which
on
base
we
appraisal of a company or its
earning power. I shall not
our
future
dwell
accounting
on
have
been
peculiar
made
to
that
errors
statements
in
industry
one
which would have
and
direct rela¬
no
tionship to another. There arc
certain accounting principles,
however, that do apply to every
Therefore, I shall con-
"«vv-vw,
business.
centratc
on
one
which
two
or
I feel
that, if
had been fully
we
constructive
been
expressed.
more
would
views
have
A
good deal of
this pessimism has been caused by
a
general attitude that has been
concerned with
more
consideration
economics
shutting out
certain
of
rather
than
business
trying
to
flivver them and ttteir meaning.
Ko.w that the actual economic consequences
evident that
comes
these
out
being felt,
are
facts,
it
be-
cannot shut
we
and
have to
we
"face the music." This is the
dition in which
today.
Business, in
profitable
reports would lead
been
It
fact,
as
is
also
bad
true
been
shown
to believe.
us
that
these
reports
such
a
in
prepared
that
manner
has not
accounting
as
they
could
continued
have
increases
profits when decreases
in
actu¬
were
ally occurring. This overstatement
of profitableness gave us a
feeling
of growth in our over-all
industry
pattern that whetted the appetites
(a) labor leaders, for increased
wages, (b) market speculators, for
of
more
bookkeeping that would in¬
profits, and (c) small stock
investors, for a "fast buck." Each
crease
of these factors operated to detcriorate our economy. So long as we
thought
prosperity
told
that
In
high degree of
a
didn't
we
want
be
to
didn't have it.
we
state-
are
merely road signs. It is
pretty nice to follow a road sign
that keeps you on a
good, paved
road
without
where
the
worries
any
about
is taking you. If,
road leads you to
road
however, that
in
without
the
a
dead end, which requires
you to
turn back and follow another less
ac-
at
ask, would it in-
leaseback
the
covers
full
method?
life
the
of
building it avoids reporting the
balance sheet liability that would
have been created if the
company
borrowed the money direct. Mind
did
I
you,
wag
not
the
say
liability
avojded—merely its reporting
avoided.
Here
is
where
the
accounting principle comes into
play, that fails to report the facts.
Even
though
the
company had
under a long-term
obligated itself
iease fQ pay
(lie equivalent of the
depreciation which after all is the
principal
ated,
it
this
of
the
obligation
did
not
have
agreement
as
its balance sheet.
borrowed
tne
to
cre¬
record
liability
a
on
If the company
dU4uy*
m0
of unsecured
i h
,oan. jt wmlld be requ!red; under
proper
accounting principles, to
show
the
this
loan
as
have
two
in
situations
condition
of
the
liability
a
So,
company.
of
effect,
in
we
which the
from
company,
equity investor's point of view,
would be practically identical, yet
the accounting principle requires
the liability to be shown 011 the
in
the
one
and
case
not in
the other.
What is the effect of this situa¬
tion
the balance sheet?
on
case
In the
{where the funds are bor¬
directly, the balance sheet
rowed
shows
that,
equity
in
addition
capital
invested
to
the
in
the
business, borrowed capital is also
invested.
To
the
extent
capital is borrowed,
present that creates
to
the
is
entered
sheet,
ance
this
greater risk
equity investor.
On the
hand, where a long-term
other
lease
a
that
leverage is
a
into,
the
the
bal¬
therefore
and
has
business
debt is
no
on
benefit
of
the
fi-
a
nancial statement that purports to
show that the company's produc-
ing assets
funds.
are
all built from equity
Investors
the report that
are
told
not
in
substantial lev¬
a
el
smooth
then
one,
vantage has been
real
no
gained
by
joying the good road. Our
cial
statements
ong
foi
finan-
been
such
signs, leading us
road that appeared com-
a
lie and
a
ing us
en-
road
enoneous
a
have
ad-
optimistic, but bring-
inevitably to.a dead end.
shall
discuss only two factors
.
all
of
his
property
value'-in
specific term of years, plus
of
return
the
011
a
To
There is
no
not
be
reason
entered
-why
you
it for
the
purpose
of avoiding or
suppressing the facts that
actually occurred. In many
the
terms
based,
*
of
such
higher
on
have
cases
leases
were
interest
rates
than would have been paid if the
funds had been borrowed
by the
lessee; that is, the company which
would
have
if
it
but it avoids
stockholder - investor
the
that
there
pa|d
0ff
is
±
capital
any
ahead
rn,. 1
•
_
is
be
to
his equity Til¬
—J
of
This
no
criticism of
the companies that have
employed
the
long-term lease method of
financing—but it is
the
a
criticism of
accounting profession for al-
J?win?
tion -m lepoiting
°f misinforrnathe
financial
position.
There
has
a
.
been
tax
.
..
one
point
.
of
advantage
view
in
.
this
long-term
lease
method, but only when the prop¬
erty involved was already owned
and c,ould ,bf s(dd at a profit and
then leased back. There is no tax
L
1 1
'
m'
advantage
011
a
long-term
guaranteed'
v
to pay
amount
an
sufficient
back the full cost
as
lease
rental
which
is
a
paid.
plus a return, could have
borrowed the nfioney on its own
The depreciation, however, which
is included in the lease rental
credit at
to be paid over the remaining life,
is a deduction against normal in-
a
lower rate. Under these
conditions,
using
Would
a
the
lease
be
to
only
rather
isolate
for
reason
than
the
specific
a
loan
credit
or
property.
come
at the rate of 52%
porate
in
laws
tax
allow
to
de¬
ally create
allowance
an
actu¬
for de¬
preciation at current price levels,
whereas continued ownership of
the property would not.
Our
accounting
with
erroneous
principles
respect
are
lease¬
to
backs, where the lease terms in¬
clude
the
amortization
entire
cost
of
of
the
the
building over
the life of the lease, by failing to
require the showing of the prin¬
cipal of the liability involved.
This principal represents the total
lease
gross
to
the
of
interest
tion of
discounted
payments
date
present
in
used
the
the
at
the
rate
computa¬
lease rental.
Compu¬
tation of the principal amount is
difficult
not
and
in
in
those
most
ascertainable,
mates
to
it
made.
requires
compute
back
and
an
as
it
is
reasonable
be
can
while
leasebacks,
which
in
not
esti¬
Therefore,
thinking
some
record
a
lease¬
obligation of
a
corpo¬
ration, it is not a complicated or
task for the accountant
difficult
with
knowledge of these trans¬
a
actions.
In
instance during the past
one
I
year
observed
violation
income
back
of
as
result
a
most
The
on
of
lease¬
company
number
a
an
the
of
flagrant
the
of
operated
properties
for
most
a
overstatement
procedure.
involved
its
the
of
owned
basis
The
com¬
year.
pany'^ annual
report showed op¬
after depreciation
based upon cost, which profit, of
course, was much greater than it
erating
profit
have
would
been
if
depreciation
a
cor-
tax return.
Therefore, the tax laws, by al¬
Even
this
the
company
the
case
misleading
indication
of
result
future
the
profit from the
of the property had
from income as a
himself.
Only
and he
was,
not obligated
was
to
report it.
fail¬
accounting practices to
meet the ordinary minimum re¬
quirements of fair accountability.
you,
is
a
of
You
might ask why such account¬
could
be tolerated
by the
Securities and Exchange Commis¬
sion. That Commission, by policy,
has accepted "generally accepted
accounting principles" as estab¬
lished by the accounting profes¬
ing
sion.
And, presumably, unless the
accounting
profession
fails
to
properly maintain such principles,
the
SEC
will
continue
to
accept
those
principles which the
counting profession allows
stand.
feel
As
that
public
a
this
is,
as
on
the part of
is
ac¬
to
accountant,
reasonable
matter of fact,
a
at
amounts
the
capital that he
which
originally
providing
depreciation
would
for
truly
represent increments to the
origi¬
nal capital invested.
The actual loss
in the purchas¬
ing value of the dollar, which has
occurred since many of the
prop¬
erties
,
being depreciated
now
installed,
has
been
as
100%, and sometimes
were
high
as
more
where
construction preceded 1935.
Some
long-lived
properties
installed
prior to 1900 are still, in use. As
a
matter of fact, the salvage from
of these properties in to¬
some
I
and
1.9th Century
value, and the
amount of earnings left after such
depreciation is called "profit" or
"income."
Here again the stew¬
ardship accounting principles are
purchasing
the age
ing.
them
•
.•■
the
While
generally, accepted
accounting principle of cost depre¬
ciation was established-, for pro¬
prietorship accounting d u r i 11 g
periods of stable price levels, it is
a completely outmoded method of
accounting in today's economy and
in
upon
at
power
as though we were still in
of proprietorship account¬
■■'.::
applied
of
not
account
income
the governing body.
that
maintaining "generally accepted
accounting
principles"
so
that
they meet the needs of the public
relics
is greater than the
original cost of construction; yet,
the dollar depreciation of such
properties is reflected in today's
generous
What bothers me, however, is
the accounting profession is
that
dollar, the property
depreciated and charged
day's dollars
This, I submit to
ure
far
1purchasing
return to the equity
inves¬
such
profits
transactions
adjusted
the
the
invested—-no more, no less.
Profits
determined
after
this
the accountant, however, was able
to determine what the real effect
of
income
tor
item, the statements, would still
be misleading since, at the end
of the year, the company did not
own
the properties
which were
the
basis
of
the
depreciation
charged in reporting its operating
these
in
change
would
been excluded
nonrecurring
for the year.
So long as
inconsistency agreed with sogeneral principles of accounting, the investor was obli¬
gated to analyze the meaning of
were
the
to
sate
called
depreciation
could be
potential of this company.
if
Thursday, December 5, 1957
.
value
as a rea¬
the
.
the
reports used
as
a
measure
corporate earning power. To¬
day, accounting reports are not
used for stewardship accounting,'
but
used
are
earning
This is
as
measure
a
of the
of the enterprise.'
more significant than
power
even
in
and,
stewardship
accounting
because
the
ordinary stockholder is not
price
end of the of
re-evaluating them, it is far too in a position to judge from the
year
the
company
sold
these slow to meet public
requirements. summary
statements
of
large
properties and leased them back
We cannot find any real satis¬
figures shown in accounting re¬
under
a
long-term
lease,
the faction in the reliance which the ports whether a proper accounting
terms of which involved a high
SEC places upon our profession has been made 011 a stewardship
interest rate as well as the amor¬ unless the
profession accepts as basis. With respect to stewardship
tization of the sale price over the
its
major responsibility the re¬ accounting, the stockholder must
term of the lease. As a result of
quirement to present financial re¬ rely upon the Board of Directors
the sale and leaseback, the com¬
and the public accountant to show
ports that are not misleading.
pany reflected as income the op¬
It 4s
sometimes said that the that there is proper evidence and
erating results of the property accountant
who
expresses
such support for payments made and
on an owned
basis as well as the
been
views, as I have done, is hurting that such payments have
ostensible profit of the property
business since he reveals the in¬ fairly
classified* The report to
on
a
sale basis.
the
stockholder
therefore
is
used
adequacies
of accounting
prac¬
This was actually a compound¬ tices
followed by businesses, and almost entirely for economic and
ing of the overstatement of earn¬ thus undermines the confidence valuation
purposes
—
not for
ings,
all caused
by accounting of the public. I feel that the an¬ stewardship accounting.
principles which permitted the swer 1o this
point is that 110 favor
Criticizes LIFO Usage
company to charge its operations
is being accorded to business by
with
depreciation
on
original the public accountant when he is
What has the public accountant
had
been
computed
levels.
At the
cost
for
the
entire year
take up the
and then
profit from sale of the
properties at
addition
current
at
the
year-end
income
to
and
as
an
surplus.
Yet the entire
back,
profit must be paid
interest, in the lease
with
rentals.
sible
This
only
cuted
at
teed
sale
was
because
the
that
same
the
made
lease,
a
time,
sale
guaran¬
price
interest would be repaid
life of the
(leasc.
pos¬
exe¬
plus
the
over
Thus, by
all
future
years
nalized,
and
amount
of
Yet
there
greater
of
in
"increased
the
the
pe¬
dollar
reflected
building
current
in
was
year
as
equity investment."
could
amount
business
increased
inflation
value
be
to
were
the
than
be
never
of
equity
there
was
any
in
the
the
day
before those properties were
sold,
and certainly the profit was not
attributable to the year of sale.
SEC's
No
accountant
could
of
such
a
transaction
reporting
because
it
in accordance with
generally accepted accounting
reported
was
principles.
recourse
The accountant's only
when his conscience will
allow
him to go along with
reporting is to state that,
regardless of whether it is in ac¬
not
such
cordance with
accounting
in
an
profit
"generally accepted
principles,"- it results
erroneous
and
is
statement
misleading
to
of
the
is in process
with
accounting
done
countant's failure to perform this
task is discovered and its effect
usable from
determined,
but basically he has not made the
one
that
is
1he
most necessary
not
only
will
the
public accountant lose the respon¬
sibility that he has been presumed
to
have
had,
but
business will be
placed under such stringent regu¬
lations that it will be
the
injured, and
public, in turn, will also suffer.
No
business
economic
long
can
realities
and
suppress
expect to
gain benefits from it, and no ac¬
counting profession can gain the
respect of the public by failing
to
properly
air
certification
public
the
counting
a
a
for
reasons
its
the
the
ac¬
.
point
of
procedure,
point
of
to
adopted.
If
justification from
interest
specific
business
bases
disclose
principles
public
for
the
and
there is proper
of
view,
view
from
or
a
even
investor's point of view,
should be clearly documented
and
held
where it
performing the task the public
expects of him.
Once the ac¬
lit
be
cases
not
.from
Responsibility
liable for the erroneous
those
en¬
hancing the current year's profit,
lease
if the Property is built new. The
tax advantage, when the property
is «lder and can be sold and
teased back for its remaining life,
is gained through the treatment
of the profit 011 the sale as a
capital gains profit on
maximum tax of 25%
was
pay
and the leaseback
reported
-
*
the
of
the
Ilolg of Our Tax Laws
from
into.
*
telling
emPl°ym£
should
it
owned the property,
should
should not enter into such
leases,
but if you do you. should not do
-
than
COme
really .approach this problem,
one
must
ask
why such leases
or
of
the same charges, or possibly greater charges, against in-
rate
a
unpaid balance.
on
course,
---—
concerning these road signs. One
is the long-term leaseback method
of getting plant
capacity that has
guaranteed a lessor the return of
.
the
vestment.
Long-Term Leasebacks
I
exists for the obligation
lease. The company has,
erage
certainly
profit
an
books
in
sonable
a
leaseback,
is that when the lease-
reason
back
can
thing
required to be shown
opinion, financial
my
merits
had
we
company
same
you would
dulge
The
a
the
cost
con¬
find ourselves
we
why>
was
merit thoughtful consideration.
informed, less pessimism and
However, if
In
financing
the least amount
This is caused by the fail¬
to
order
whom
to
reports.
preciation at current price levels.
were
investors
as
in
ure
would
accomplish something if that
the only purpose,
origi¬
on
viewed
to indulge
company
The sale
figures all the time have not
stopped to make the computations
necessary to find out how far the
panv
be
the leaseback method of
of tax.
And the Stock Market
could
.
an
stated.
If
this
is
done
the
public has only itself to blame for
accepting such standards of ac¬
countability.
Effect
In
Inflation
opinion the gravest area
of misstatement
in
financial re¬
porting is the one that arises from
inflation.
Its primary impact is
in the error caused
by the failure
to
provide
depreciation of the
property which is actually used
in operations at the
current pur¬
power
of
the
dollar.'
not, properly
economic point of
an
some
changes
system. This
to re¬
port on the decline in the pur¬
chasing value of the dollar. True,
he has devised a method he calls
under
is
economic
our
the
accounting required
inventory
itself is not
related to the change in the value
of the purchasing power of the
dollar or it would not be restricted
first-out"
"last-in,
pricing,
as
it is
not
but
now.
adopt
this
that docs
inventory
required to ac¬
A company
LIFO
purposes
is
count
the
for
for
in
not
for
effect
the
of
rising
price level. Therefore, even where
LIFO
and
of
is
adopted,,
its
partial use
non-disclosure of the amount
reserve
created
to
reduce
the
inventory to LIFO belie the eco¬
nomic
support.
•: j. J
Although
LIFO
is
a
principle, its usefulness
proper
to
the
public is greatly impaired because
the
accountant
has
left to
the re¬
decision as
whether, and if so, when, it
should be adopted in any given
case. Under such a
premise pro! it
reported is largely what manage¬
company
the
to
my
chasing
to
are
view? He has made
porting
of
respect
principles which
If
ment wishes to
report. Most of
all,
the
decision for adopting LIFO is
made because
of
the
eco¬
nomics that support it, but pri¬
not
marily because of the tax benefits'
accruing f^om its,.use. In many
nucne
+
rx
I n/1
t
M
C3
Number 5696
186
Volume
...
The Commercial and Financial Chronicle
.
Only one body — the public
adoption of the LIFO method in
the
balance sheet is not even accounting profession—could have
stated in the report made to stock¬ established an accounting prin¬
holders.
In
those cases where ciple of current price-level depre¬
LIFO is not adopted, usually no ciation for all corporations on a
mention is made of the effect of consistent basis and made it effec¬
the
change
in
the purchasing, tive for all industries and all com¬
power of the dollar so that the panies simultaneously. If this had
stockholders cannot evaluate its been done, much more cash would
effect on the
company's financial
the, point
From
view
of
of
property depreciation, the error is
much greater because there is no
the
prevent
to
turnover
yearly
cumulative effect of the decrease
purchasing power of the
dollar. In the plant account the
effect of the decrease on the pur¬
chasing power of the .dollar is
cumulative and continues to be
cumulative and reflects itself in
each year's depreciation for the
entire'useful life of the property.
In order to eliminate the effect of
the
on
It is hard to
it
price level on depreciation in the
account, prices would have
to remain stable for the eompleie
income
cycle of the property. While
this might be possible, there has
never
been a period in modern
life
to
overprice
Now
stocks.
to
period of at least 25 to 40 years.
One can hardly believe that any
principle could ever
that
requires
such
premise
which
on
adopted
be
absurd
an
produce
to
results—and
done this also.
reasonable
have
we
ones
used
accounting
which will
continue
has
10, 15
or
our
primarily
of the
reports
as
are
economic earning power of a cor¬
poration, it
would
ac¬
would
themselves
countants
that
seem
not
as
profits
be true. This will
with
fairness
American
Public
to
Institute
of
Accountants.
counting
all
the
Certified
If
profession
is
the
will
ac¬
correct
the
accounting principles that it
observes, it will benefit (1) indus¬
try, through a proper protection of
capital, (2) labor, through a more
enlightened industry building pro¬
and
(3)
the
investor,
through proper maintenance of his
capital, by eliminating the un¬
gram,
realistic
profits
heretofore
re¬
20 years—unless we cor¬
depreciation provisions.
Be
sold.
be properly bought and
This will avoid the pessi¬
can
mistic
that
and
optimistic
continuously
the
present
extremes
under
occur
unrealistic
fictitious increase
in
earnings, all the accounting
profession needs to do is to see
that
depreciation
provided
by
each
company
is equal to the
reporting
methods.
Ladenburg, Thalmann
Leo
G.
Shaw
have
been
company
to
evidence
Recently the
channel
to
forts and
in
merit
budget
really
customer.
inflation.
If
depreciation
had
been
pro¬
vided year by year on the basis
deductions,
able
which inflation took its major toll.
Had this inflationary effect been
position
by providing proper
depreciation, it would have sub¬
stantially
reduced
profits
and
shown the inability to pay \Vage
increases that
were
demanded and
no
period
would
lished
that
the
of
one
greatest
of inflation in this country
causes
is that labor costs have
increased
more
rapidly than is warranted by
increased productivity. If a por¬
tion of this increase in wages had
not occurred, we would presum¬
ably
have
therefore
Such
wage
been
done
at
way
less
more
inflation
if
could
could
have
The
been
to have reported depre¬
at.current price
levels.
a
diffi¬
task, and it could easily have
by the
profession. -However,
followed
accounting
it cannot be
by one industfy
company alone.
or
one
appropriate action to
proper depreciation
take
the
arrive
income,
be
Jr.
partnership.
to
time in the sales
some
at
a
fair
statement
of
the tax laws would soon
to
recognize such
William R. Staats to
R. Staats & Co., 640
—
William
South Spring
Street, members of the New York
Pacific
and
changes,
on
Boardman
Stock
Coast
Jan. 1
Ex¬
will admit A.
W.
Colmery, Jr. and William O. Keyes
to partnership. All have been as¬
time.
Ganfield,
with
sociated
Mr.
Harry
firm
the
for
some
Colmery will make his
headquarters in the firm's San
Francisco office, 111 Sutter Street.
our
than is
method which
attempts to grant special benefits
far
advantageous
more
of accelerated depre¬
ciation to those who build property
instead
of
deductions
order
to
granting proper tax
for all businesses in
maintain
capital
which
provides the basis of our economy.
...
the
under
looked
into
by
therapeutic as
nutritional agent. A major
the Division lias
been the efficiency of corn and its
by
well
as
as
a
Albert Didier Opens
Albert E.
Didier has opened offices at 34-23
Murray Street to engage in a se¬
curities
Y.
N.
FLUSHING,
A
business.
high cholesterol level in
blood
CHICAGO, 111.—Charles F. Dykhouse has been added to the staff
Francis I.
Joins
du
Salle
La
Pont
& Co., 203
Street.
Farwell, Chapman
(Special to The Financial Chronicle)
CHICAGO,
nells has
111.—John
La
Salle
S.
Run-
joined the staff of Far-
well, Chapman &
New
Street,
York
in
found
often
is
heart
from
•.«
Co., 208 South
members of the
Stock Exchange.
•
1
1957
1
-
earn-
dividends
,
1
having been paid
e.
W1
in
out
j
j
dividends
paid
were
'ro
out
and
.-
.....
if 1957-58 earnings are m the $3
•
..
ran§
pect
^
+
.
of line to ex-
f not out
dividend increase,
a
Currently selling at about $30
3957 earnings of $2.75
share>
a
are
n
,
being capitalized at about 11 times
and 1958 earnings 10 times. This is
the
below
company's
earn|ngs ratio.
past
price-
Now that the com-
.
PatlY
w
expanding 1 s earnings
1S
base, the stock market might appraise the company's earnings at
least
high
as
ail-
it did for many
as
,
.
,
,
..
also being
when earnings were static.
*n ^le meanth"ne the yield is 5%
directed towards the improvement
mid the company offers little risk
of the
in
years
efforts
are
company's industrial prodof
development
a
Flake"
starch
"Snow
frozen
desserts,
"filler"
new
an
adverse market,
for
use
'•;<
in
puddings, soups,
etc. The company has also devel¬
oped
a
corn
syrup - concentrate
called NuBru for the brewing in¬
Use of this product sim¬
plifies processing steps, shortens
brewing time and increases produstry.
20%
duction
30%
to
without
ad-
ditional
equipment.
ing
techniques NuBru's sue-
l|
to the
conservatism of brewers in adoptnew
has
cess
been
limited.
industry realizes
the
in
Due
use
But
once
the savings
of
this
2*^551
new
product, Corn Products stands to
have a good future moneymaker.
International
Operations
During 1956 international operations
set new records both
in
productivity and profits. Output
increased
and
operating profits
were
higher
than
in
previous
(Special to The Financial Chronicle)
South
believed to help
suffering
paid
are
—
F. I. du Pont Adds
of
Approximately 60% of its
jngs
the development of an improved
reduce the cholesterol level in humans.
in
is projected at 16% in 1958.
.....
.
coordin-
to
activities
products
15%
'
in
.
established
Division
research
inhevent
that of the present
in the form
*.
In 1956 the company
Technical
estimated
t
'
Development
..
the
ing procedure which applies only
replacement programs of
corporations. The effect on
economic svstem would be
and
dn-
011
each year since 1920. In 1956 $1.50
j
_
Research
iqf-2
ucts line and have resulted in the
Admit Three Partners
LOS ANGELES, Cal.
accounting. This is not an account¬
to large businesses. It applies with
equal and even greater force to
small
businesses which
do not
have
the
constantly
recurring
sales
return
It has risen from 11% in
factory.
is
ments
amended
large
this
followed
to
plant
This would not have been
been
have
better
procedures to be followed in order
level.
actual
no
this field
111
of its consumer lines.
Research
with many Congressmen,
that if the accounting profession
profits had been
their
was
ciation
cult
and
stable economy.
increases
resisted
stated
only
had
a
be
corporations
in
Jan. 1 will admit Wal¬
talking
establish
estab¬
would
to pay such taxes than
they are today.
It is my opinion, after testifying
before the House Ways and Means
Committee on this subject and
would
well
been
plant
to some future
when
the
probably be
profits.
has
there
deferred
taxes
granted because of these fictitious
It
of
costs
consumed in operations as allow¬
of
current price levels, it would have
substantially reduced earnings of
the
last
5
to
10
years,
during
eliminated
economic
full
the
W.
department.
every
jusuiication for transferring
published overt, the
proper
depreciation
deductions
years has carried articles concern¬ from one period of operation "to
ing"
the
ravaging
effects
of another. If the tax laws recognized
the
of
Success
efforts
company's'
vested capital has also been satis-
main
Mazola which is
Ex¬
for
economic
no
Product's
is Corn
bers of the New York
Stock
;?T
the house-
appeal to
to
who
attested to by the increasing
a
1.80
3
~~ ~~
being em-
are
achievement in this field has been
magazine
past several
and
newspaper
is
design
;
2.29
—_
j.
higher
intro-
Package design has been greatly
improved in the case of Bosco,
Mazola, and other items. Coloring
people
There
been
2 75
v
——_—__
The
the firm for
tax purposes.
have
$3.0C
__
—
duced.
human
every
may
than before this system was
Co., 120
Broadway, New York City, mem¬
&
'
3953
guidance of mature scientists and
One of the problems
Kothschild
1QrR
1954
ate
F.
Est.
advertising
executives.
L.
1957
up
separate
01
.
Earnings per Share
though initial costs for set-
Mr. Hess has been associated with
though
^
observed
been
a
_
1958 Est.
ting
Hess,
even
has
.
inco
is a remarkable achievement,
even
on
action
sales
will
P10jec^°n °f 1958 earnings. This
the
from
Products
shdio since 195*2 bssod on our
each product line is
efforts
Corn
.
1955
a
Rothschild Partner
30%.
,
result of using this approach
a
ter
into
about
earnings reachfurther gain of
a
]lave about doubled their earnings
executives in charge. An improve-
change,
method
has
company
company decided
merchandising ef-
its
now
maximum
sures
question should be business. It would have been far
for
business
had
this
stabil¬ better
ized. In other words, the account¬ method of adjusting depreciation
ing"
profession
recognized
the on an economic basis been fol¬
problem and failed in its respon¬ lowed rather than the so-called
depreciation"
ing the $3 level>
advertising separately.
This also
pin points responsibility and in-
deferred until prices were
"rapid
that the
is
per share plus
foreign. Profits
9c
with possible 1958
this
ot
success
additional
ail
to
retail
Walter Hess Jr. to Be
year es-
foreign earnings of
15c a share.
In
1956
probabiy
to improve, its ratio ot
advertising" expenditures
in its higher profit items
sales
cided that the
,
Solidated
been able
company s
&
of
borhood of $2.75 excluding uncon-
to give the
knowledge of the
the
of
program
in
Bros.
months
jn 5957 represent an improvement
()f 17%
over
the previous year
wife
Hutzler.
nine
first
earnings were $2.36
partner
Salomon
prod-
consumer
the
3957 Corn Products earned $1.51 a
share compared with $1.33 in the
enabling the company to slant its
adveitising in the direction which
will produce maximum sales. The
the accounting principles original
cost, \ adjusted for the
they follow to see whether such change in price level since the
date
of
construction.
This will re¬
principles conform to the uses
made
of
accounting statements. duce earnings to what can reason¬
The
accounting
profession
did ably be expected from sales at
study the consequences and effect today's price levels. And, as infla¬
tion grows, the depreciation pro¬
on inflation in 1946 and 1947, and
considered the question of whether vision will also increase, thus tak¬
or not depreciation should
be ad¬ ing the inflation out of the re¬
profits and establishing"
justed to take into consideration ported
the
decrease
in
the purchasing stability in the income reported
as
being the actual profit from the
power of the dollar. It was de¬
alyze
For
^a-S1,Cf
ieasons why a consumer
might buy one ot their products
part¬
formerly
Outlook for the Future
on
increased
more
T
was
spent
t.0 Corn Starch, and the timates of the company's per
li!1! naiKL
fS?ra krand,s °i
share earnings are in the neighstaich.
Maiket research studies
phasized
Ladenburg, Thalmann & Co., 25
Broad Street, members of the New
York Stock Exchange, on Jan. 1
admit
great
year
are
T.
Mr. Shaw
sibility to do anything about it.
The profession was not prodded
line of
and package
will
Each
money
as Karo byrup, Mazola similar 1956 period. Full
nuS a^v
nership.
an¬
of
promotion and advertising for the
stocks
To Admit Leo G. Shaw
Done
this
stop
products.
new
amounts
as
a
Must
for
ported. This in turn will provide
reliable economic facts on which
complete
life
occurred;—a period of
What
To
decreasing
until
cycle
rect
reports
increase
are
of
pearance
Accounting' Profession Fails to Act
Since
to
regard
bodies, some of which have al¬
ready recognized the inequities of
cost
depreciation. But I should
like to repeat again that the only
body that can act upon this ques¬
tion
>
many
depreciation on a
price-level basis. A great
33
The Security I Like Best
company s
in
the issues before many courts,
commissions and regulatory
installed and old
removed, thus giving an ap¬
plants
new
Continued from page 2
on
the
continue
will
ties
to
now
deal has been done in this
profits re¬
ported now are excessively stated
history during which such stabil¬ and, to get our feet firmly on
ity
has
existed.
Although we solid ground, depreciation ad¬
to
current
price
levels
should not logically ^design ac¬ justed
counting principles for conditions should be recognized. As our plant
which cannot possibly exist, this is and
property capacities become
what we have done. Yet we can¬ able to satisfy all consumer needs,
not possibly be accurate in bu,r the depreciation of modern facili¬
financial reports unless we think
that stable prices will exist for a
time
take
not
recognize
current
disappears, the market is
interpreted as being "bearish" as
more
realistic conditions prevail.
even
will
instances have already been taken
fiction
However,
not
specify the steps which
this
as
understand
benefit merely because
build new plants.
no
does
I
which led investors
market
or
a
ceives
plant expansion, and a good deal
of the tight money that we now
feel
today
would
have
been
avoided. It probably would have
avoided the gyrations which the
stock market has experienced in
the last few years, by preventing
the over-statement of profits that
resulted from inadequate depre¬
ciation.
Thus,
an
increase
in
profits was reported which was
commonly termed "growth." This
fictitious showing of growth in
business created a fantasy in the
stock
justify
business
which merely
builds
plants should receive a
special tax benefit while another
company,
which is operating its
plants at top efficiency and at
great credit to its community, re¬
why
have been generated for corporate
position.
(2457)
expanded facil¬
England,
commenced operations, and a new
dextrose plant was opened in Germany.
Milling techniques have
been improved, and, in 1957, en-
Bar
Manchester,
in
abled
the
better
quality
costs.
With
coming
produce
uroducts at lower
company
more
East,- an
to
now
be¬
in the
Far
conditions
settled
office
has
been
lished in Hong Kong for
pose
ms.
New and
years.
ities
sgggtgagwm
of
estab¬
the pur¬
re-evaluating marketing
possibilities in that area.
HuVo|W|
Chronicle
The Commercial and Financial
(2458)
34
.
.
Thursday, December 5, 1957
.
* INDICATES
Securities
Allen
(Walter H.)
Co.,
in
Now
if Canada General Fund
Inc.
4
(letter of notification) $150,000 of 10-year 6%
unsecured debentures, due Nov. 1, 1967, to be offered to
stockholders. Price—At par (in units of $1,000). Proceeds
—For construction of a new addition to present building.
Office—6210 Denton Drive, Dallas, Texas. Underwriter
Nov.
American
Hardware
Corp.,
offered
of
in
exchange
common
for
to
Sept.
writer—None.
Oct. 29 filed 6,000,000
Ltd.
(12/16-20)
series B ordinary shares (par one
Price — $1 per share, payable
Israel pound per share).
either in cash
expansion
or
in State of Israel bonds.
program.
writer—Lee
Office
—
Proceeds—For
Hadera, Israel.
Higginson Corp., New York, on a
Under¬
best ef¬
basis.
Provident Investors Corp.
Fe~b. 15 filed 50,000,000 shares of common stock (par one
Price—$2
share. Proceeds — For working
capital and general corporate purposes. Office—Dallas,
Tex. Underwriter—Peoples Securities Co., J. D. Grey,
of New Orleans, John S. Tanner, of Dallas, and C. L.
Edmonds, of Houston, three of the 22 directors, are
Chairman, Vice-Chairman and President, respectively.
cent).
per
Ampal-American Israel Corp., New York
$5,000,000 of five-year 6% sinking fund de¬
bentures, series F, due 1962. Price—At 100% of principal
amount. Proceeds—To purchase machinery and equip¬
Oct. 14 filed
($3.75 per share). Proceeds—For investment in sub¬
sidiary and working capital. Underwriter—Selected Se¬
curities, Inc., Phoenix, Ariz.
par
Artesian Water Co
Oct.
15
(letter of notification) 3,404 shares of class A
non-voting common stock (no par) being offered for
subscription by common and class A common stockhold¬
of record Dec.
ers
2, 1957 on the basis of one new share
of class A common stock for each eight shares of com¬
mon
stock and class A
common stock; rights to expire
1958. Price—$30 per share to stockholders; and
$32 to public. Proceeds—To purchase assets of Collins
Park Water Co.; Willow Run Water Co. and
Sedgely
Jan. 2,
Farms
Water Plant; also to purchase additional storage
tanks, water mains, etc. Office — 501 Newport & Gas
Pike, Newport, Del.
Underwriter— Laird, Bissell &
Meeds, Wilmington, Del.
• B!ack, Sivalls & Bryson, inc.
Nov. 29 filed 114,600 shares of common stock
(par $1),
39,600 shares are issuable upon exercise of
39,600 warrants exercisable at $22 per share on or be¬
of
which
fore
Dec.
31, 1961 and 75,000 shares are issuable upon
exercise of 75,000 warrants at an initial exercise
price of
$27.50 to June 30, 1962, and $30 thereafter and to June
30, 1967.
Blacksmith
Shop Pastries Inc., Rockport, Mass.
(letter of notification) $100,000 of 6V2% deben¬
tures dated Sept. 16, 1957 and due Sept.
15, 1972 and
40,000 shares of capital stock (par $1) to be offered
in units of one $50 debenture and 20 shares of
capital
stock.
Price—$90 per unit. Proceeds—To retire mort¬
Sept. 17
gage notes and for
& Gould,
working capital.
Underwriter—Mann
Salem, Mass.
Brantly Helicopter Corp., Philadelphia, Pa.
Nov. 25 (letter of notification) 21,818 shares of common
stock (par 50 cents).
Price—$13.75 per share. Proceeds
—For equipment, supplies and working capital. Offices
—24 Maplewood Ave.,
Philadelphia 44, Pa., and Fred¬
erick, Okla.
18
filed
$3,000,000
mortgage
i
—Harold C. Shore &
stock
(par
the basis of 2%
on
4.
and
does
not
or
working
general
to
propose
assume
more
retain
than 25%
capital.
than
more
a
of the risk; and
Office—Kilgore,
Mortgage & Investment Corp.
Sept. 12 filed $5,000,000 of 20-year mortgage bonds and
500,000 shares of
stock
common
(par five cents)
offered in units of $100 of bonds and
Price—$100.50
to be
10 shares of stock.
Proceeds—For purchase of first
mortgages or to make first mortgage loans and for con¬
struction business.
Office—Miami Beach, Fla.
Under¬
writer—Aetna
unit.
per
Securities
warrants
may
be
which
expire
exchanged for
on
common
Dec.
31,
stock
1957
purchase
and
which
new
warrants which may be
1958 at 65 cents per share and at 75 cents
thereafter.
Proceeds—For working capital.
Office—West Trenton, N.
Underwriter—None.
exercised in
per
share
.
/:/(
Insurance Co.
Continental
shares of capital stock (par $5) be-'
Oct. 10 filed 1,700,000
ing offered in exchange for capital stock (par $7.50) of
Firemen's Insurance Co., Newark, N. J., at the rate of 17
shares of Continental for every 20 shares of Firemen's
The offer, whiclr is subject
stock.
to acceptance of not:
of the Firemen's stock, will expire Dec. 9.
Underwriter—None. Statement effective Oct. 31.
less than 80%
-
Sept. 27 filed $600,000 of 4% subordinated debentures
due4 Jan. 1, 1966; 10,000 shares- of 4% cumulative pre¬
ferred stock par $100; and 150,000 -shares of common
$5).cJ^ice^AUprincipahamount or,par value.
purchases, to make
cap¬
ital loan advances to retail subsidiaries; to reduce bank
Office
capital.
loans; and for working
Underwriter—None.
Cubacor Explorers, Ltd.
—
Ithaca, N. Y.
b
*
(letter of notification) 600,000 shares of common
stock (par $1-Canadian). Price—50 cents per share-U. S.
funds.
Proceeds — For exploration and drilling costs.
Office — Suite 607, 320 Bay St., Toronto, Ont., Canada.
Securities
Underwriter—Stratford
New York.
way,
if Dalton Finance,
filed
}
,
Co., Inc., 135 Broad¬
■
Inc., Mt. Rainier, Md.
(12/20)
stock
Co., Inc., New York.
indefinite.
Nov. 7
(letter of notification) 75,000 shares of common
(par 10 cents). Price—$4 per share. Proceeds—
development and engineering expenses, raw mate¬
rials and working capital. Business —
Jalousies, storm
windows, screens, etc. Office — 22 Jericho Turnpike,
Mineola, N. Y. Underwriter—Allstate Securities Inc., 80
Wall St., New York.
Chesapeake & Potomac Tel.
Nov. 15 filed
Co.
of
Md;
(12/9)
$30,000,000 of 36-year debentures due
received up to 11:30
195
a.m.
(EST)
Dec. 9 at Room 2315,
on
Broadway, New York, N. Y.
(par
$1—Canadiaiji).
Price—50 cents
common
share.
(U. S. funds). Proceeds—For exploration
costs, etc. Of¬
fice—5616 Park Ave.,
Montreal, Canada. UnderwriterJean R. Veditz
Co., Inc., 160 Broadway, New York.
Offering—Expected at any time,
•
Chicago Title & Trust Co.
Oct.
24
filed
23,907 shares of
common
stock (par $20)
exchange for common stock of Title In¬
Corp. of St. Louis at the rate of five-eighths of
one share of
Chicago Title stock for each Title Insurance
share. The exchange offer is
subject to acceptance by
30,600 shares (80%) of the 38,250 Title Insurance shares
outstanding. Initial expiration date of the offer is Dec.
20.
Underwriter—None. Statement effective Nov. 21.
to be offered in
surance
Cleary
(W. B.), Inc.
Oct. 3 (letter of
notification) 5,600 shares of common
stock (par $5) to be offered to
stockholders of record
Sept. 26, 1957 on the basis of one new share for
each
five
shares
held.
Price—$20
payable;
First
and
per
drilling
National
Daybreak Uranium, Inc., Opportunity, Wash.
filed 631,925 shares of common stock (par 10
Price — At market (approximately 53 cents per
share). Proceeds.—To selling stockholders. Underwriter
Herrin Co., Seattle, Wash.
May 7
cents).
DeLuxe
share.
for
oil
Proceeds—For
and
gas
Building, Oklahoma
Underwriter—None.
Check Printers,
Inc.
Aug. 28 (letter of notification) 25,000 shares of common
stock (par $1) to be offered to employees and present
stockholders. Price—$11.80 per share. Proceeds—To ac¬
quire
machinery and equipment. Office — 530 N.
St., St. Paul 4, Minn. Underwriter—None.
new
Wheeler
Disc, Inc., Washington, D. C.
Oct. 10 filed 400,000 shares of class *A common stock (par
Price—$2.50
share.
Proceeds—For investment.
of real property,
and acquisition of stock of business enterprises. Under¬
writer—None. Irving Lichtman is President and Board
per
Business—Purchase
per
of 7%
$500,000
—
$1).
Chess Uranium Corp.
May 14 (letter of notification) 600,000 shares of
stock
27
Nov.
Dec.
1, 1993. Proceeds—To repay advances from American
Telephone & Telegraph Co., the parent, and for additions
and improvements to
telephone' plant.
Underwriter—
To be determined by competitive
bidding. Probable bid¬
ders: Halsey, Stuart & Co.
Inc.; White, Weld & Co.;
Morgan Stanley & Co.; Kuhn, Loeb & Co.; The First
Boston Corp.; Harriman
Ripley & Co. Inc. Bids—To be
and
development
Chairman.
Doctors'
Oct.
25
Motels, Inc., Kansas City, Kan,.
filed
stock, of which
publicly, 39,568 shares
are to be offered in exchange for
$432,055 outstanding 6%
debentures, 3,085 shares are to be issued as a stock divi¬
dend and 30,850 shares are prcscntlv outstanding.
Price
—At par ($15 per share).
Proceeds—For construction
500,000 shares ol
426,497 shares
and
are
to
be
common
offered
operation of motels and to
repay
bank loans.
Un¬
derwriter—None.
Dow
Nov.
25
issuable
Chemical
filed
Co.
84,121
shares
conversion
of
common
of
the
stock
(par $5),
sub¬
orig¬
inally issued by The Dobeckmun Co., the liability of
which was assumed by Dow Chemical Co. as of Aug. 31,
upon
$4,000,000
4%
ordinated convertible debentures due June 1, 1980,
1957.
These
debentures
companies.
are
neld
by. three insurance
n
wells.
City
2
•
Duraloy Co., Scottdale, Pa.
Nov.
12
(12/9-13)
filed
69,000 shares of common stock (par $1).
be supplied by amendment.
Proceeds—For
modernization and improvements.
Underwriter—Mor¬
Colonial Aircraft Corp.,
Sanford, Me.
July 5 filed 248,132 shares of common stock
Price—To
Price—At
Proceeds—To
timer B. Burnside &
&
Dur#>x of Minnesota,
Inc., Denver, Colo.
Sept. 23 filed 750,U00 shares of common stock (par $1).
Price—$2 per share. Proceeds—For capital expenditures
market.
Underwriter—Glick
(par 10(?).
selling stockholders
Co., Inc., New York/Statement
effective Aug. 10.
ment.
outstanding
for
Lynch,
For
Date
Offering-
stock
of
and
Merrill
subordinated ■ 10-year-de¬
bentures due Jan. 2,
1968 (with warrants attached).
Price—At par (in denominations of $100 each).
Pro¬
ceeds—For expansion, making of loans and to reduce
short-term debt.
Underwriter
McDonald, Holman &
Corp., New York.
Yonkers, N. Y. Underwriter—To
exercise
$4,000,000
—,
Oct. 28
Central
Nov. 26
upon
•
Texas.
ic Bymart-Tintair, Inc.
(letter of notification) 302,000 shares of common
(par one cent) to be issued at 50 cents per share
of
Underwriter
Pierce, Fenner & Beabe, New York.
Underwriter—None. Statement effective Nov. 6.
Columbus Electronics Corp.
Nov. 13 (letter of notification)
110,000 shares of common
stock (par 10 cents).
Price—$2.50 per share. Proceeds—
For working capital. Office—1010
Sawmill River Road
—
term/loans
retire
program.
Proceeds—To finance inventory
company
:
To be supplied by amendment.
—
stock (par
25% interest
collateral
determined
Price
and
for
(12/11)
of sinking fund debentures due
other
indebtedness; to participate in the
exploration of oil properties in joint
arrangements ..with, other: companies in which
venture
Inc.
Cooperative Grange League Federation, Inc.
—
acquisition
1,
Co., New York.
Drilling Co., Inc.
Sept. 27 filed 300,000 shares o£ capital v stock (par 10
cents. Price
$5 per share. Proceeds—To repay bank
loans
Dec;
1972.
:'vv
■
29 filed $5,060,000
Proceeds—To
v;
—
Co.,
ASSUE
Cement Corp., Chicago; ill!.
-Nov.
expansion
Cana¬
Carter-Jones
Okla.
and
bank loans and
Montaup Electric Co. Underwriter
by competitive bidding. Probable
bidders: Halsey, Stuart & Co.
Inc.; White, Weld & Co.
and Shields & Co. (jointly); Stone & Webster Securities
Corp).; Blair & Co. Incorporated. Bids
Expected to
be received up to noon
(EST) on Dec. 10 at 49 Federal
St., Boston, Mass.
be
common
Capital Cities Television Corp.
8 (letter of notification) 52,000 shares of common
(par $1). Price—$5.75 per share. Proceeds—To
retire a bank loan of $220,000 and for general corporate
purposes. Office—North Greenbush, N. Y.
Underwriter
Office—272
(12/10)
first
trust bonds due 1987. Proceeds—To
repay
to acquire securities of
—To
of
Nov.
accounts
Underwriter—None.
Brockton Edison Co.
Sept.
shares
Champion Industries, Inc.
Anita Cobre U. S. A., Inc., Phoenix, Ariz.
Sept. 30 filed 85,000 shares of common stock. Price—At
•
4,851,810
to be offered in exchange for capital stock
stock
Underwriter—None.
ment.
filed
cents)
Statement effective Nov.
the
American
if Consolidated
(i2/i9)
dian Prospect shares for each Canadian Export share,
subject to acceptance by holders of at least 80% of
Canadian Export shares outstanding Underwriter—None.
cash) for each
The other is conditioned upon ac¬
than 100,000 shares of
Savage Arms stock not later than Dec. 17, 1957. Under¬
Mills,
Mortgage Bonds, Ltd., Englewood, N. J.
Price
of Canadian Export Gas Ltd.
Savage Arms share.
Paper
invest¬
'
27
16%
REVISED
of convertible junior,, subordin¬
ated debentures due 1972.
Price — To be supplied by
amendment. Proceeds—To liquidate deferred credits and
short-term debt, to construct additional facilities and to
provide working capital.
Office—Ponce, Puerto Rico.
Underwriter—The First Boston Corp., New York.
Canadian Prospect Ltd., Calgary, Canada
(par $12.50)
ceptance by holders of not less
Israeli
Proceeds—For
market.
ITEMS
filed $20,000,000
1
Nov.
com¬
exceed
basis of one-hall' share of American (plus
American
Price—At
PREVIOUS
Refining
Oil
Commonwealth
Ltd., Toronto, Can.
1,000,000 shares of
—
At par (in units of $250, $500 and
Proceeds — For purchase of mortgage bonds.
Underwriter—None.
250,000
stock of Savage Arms Corp. on the
not
(1954)
(by amendment)
$1,000).
New Britain, Conn.
Nov. 5 filed 125,000 shares of common stock
forts
stock.
tificates.
(
•
mon
filed
Canada
Corp., New York
Sept. 16 filed 256,300 shares of class A common stock
(par one cent), of which 233,000 shares are to be sold
for account of the company and 23,300 shares for the
account of Ben Degaetano, President of the underwriter.
Price—$1.50 per share. Proceeds—For working capital
to be used in realty financing activities. Underwriter—
Midland Securities, Inc., New York.
shares
27
•
Sept. 3 filed $1,000,000 of 8% mortgage bond trust cer¬
Allstate Commercial
be
Nov.
ment.
—None.
to
Registration
ADDITIONS
SINCE
be furnished
by amend¬
Nov.
1, 1977.
Proceeds—To in¬
Underwriters—The First Boston
crease
working capital.
Kidder, Peabody & Co., both of New York.
Offering—Indefinitely postponed.
Corn,
and
working capital.
Business — Building material.
Underwriter—American Underwriters, Inc., Englewood,
Colo.
•
Electro
Nov.
Commercial Credit Co.
Oct. 10 filed $50,000,008 senior notes due
Price—To be supplied by amendment.
and
-
Co., Inc., New York.
26
Instruments, Inc., New York (12/17)
filed
150,000 shares of
common
stock
(par
$!■)»
of which the
company is
shares are being sold by
selling 50,000 shades and 100,000
present stockholders. Price—To
be supplied by amendment. Proceeds
For new main
plant construction, working capital and to retire short
—
term
and
indebtedness. Underwriters-—Bear. S*earns & Co.
Paine, Webber, Jackson & Curtiss both'of New York.
Number 5696
186
Volume
.
.
(letter of notification) 60,000 shares of common
Price—$4 per share. Proceeds—For office
equipment; inventory, working capital,
Underwriter—Nunn-Groves Co., Little Hock, Ark.
stock (par $1).
-and laboratory
etc.
88,000 shares of common stock (par $3)
to be offered in exchange for common stock of Bryant
Chucking Grinder Co. of Springfield, Va., at rate of
four-tenths of an Ex-Cell-O share for each full Bryant
share. Offer will become effective upon acceptance by
holders of not less than 209,000 shares (95%) of all com¬
mon stock of Bryant outstanding.
Underwriter—None.
<
and for real estate operUnderwriter—Eastman Dillon, Union
Securities & Co., New York.
Food Fair Stores, Inc.,
owner of about 45%
of the outstanding common stock,
has indicated that it intends to exercise its subscription
tions and financing.
rights.
Ex-Cell-O Corp., Detroit, IVIich.
25 filed
Nov.
'•% ■'
^Ford Home Leases, Inc.
Nov. 29
(letter of notification) $250,000 of 6% sub¬
ordinated debentures due Jan. 1, 1968 and 12,500 shares
of class A common stock (par $1) to be offered in units
of a $100 debenture and five shares of stock.
Price—
$100 per unit. Proceeds—To repay $90,000 of notes and
for general corporate purposes.
Business—Financing of
homes.
Office
McDonough, N. Y.
Underwriter —
—
Virginia Foods Corp.
Famous
Philipson & Co., Utica, N. Y.
5,000 shares of common
stock.
Price—$6.67 per share.
Proceeds—To selling
stockholder. Office—922 Jefferson St., Lynchburg, Va.
Underwriter—Whitney & Co., Inc., Washington, D. C.
'
(letter of notification)
6
Nov.
First International Fire Insurance Co.
i
of notification) 100,000 shares of common
Price — $3 per share. Proceeds — For
capital and surplus and for first year's deficit. Office—
3395 S. Bannock St., Englewood, Colo.
Underwriter —
Aug. 26 (letter
stock (par $1).
,
Inc., Englewood, Colo.
American Underwriters,
if First Leaseback Corp., Washington, D. C.
27 filed. 500,000 shares of class A Common
Nov.
.
stock
Price — $5 per share. Proceeds — To
purchase properties.
Underwriter — Whitmore,' Bruce
& Co., Washington, D C.
;
;"
.
.
Life Insurance Co., Phoenix, Ariz.
First National
July 29 filed 106,500 shares of common stock (par $4),
of which 90,000 shares are to be offered publicly and
stock purchase
Proceeds—For
Underwriter—
16,500 shares to employees pursuant to
options. Price—To public, $12 per share.
expansion and other corporate purposes.
x
None.
•
:/■ ■'
Florida Steel Corp., Tampa, Fla.
(par $1)
being offered for subscription by common stockholders •
of record Nov. 29, 1957, at the rate of one new share
for each 10 shares held (with an oversubscription privi¬
Price—$10.50 per
16.
expire on Dec.
rights to
lege);
•
with bank loans ♦ - r«nUnderwriters — McDonald & Co.,
Proceeds—Together
share.
mill.
stiuct new steel
New York,
Cleveland, Ohio, and Kidder, Peabody & Co.,
•
'
N. Y.
.,
Fluorspar Corp. of
■v
12 filed
Nov.
America
$1,400,000 aggregate market value of com¬
(number of shares to be supplied by amendPrice—Also to be supplied by amendment. Proceeds—To finance additional exploration work on min¬
stock
mon
Inc.
development and for other general corporate pur¬
poses. Office—Brooklyn, N. Y. Underwriters—Alfred L.
and
Powell
Co., New York; and H. Carroll & Co., Denver,
Colo:
tal
common
Price — $3 per share. Proceeds —
reduce accounts payable, etcjand for working capi¬
and general corporate purposes.
Office — 4o West
45th
Underwriter—To be named
St., New York 36, N. Y.
later.
•
provide working capital. Office—
ing properties and to
Portland, Ore.
General Aniline & Film Corp., New York
Jan. 14 filed 426,988 shares of common A stock
*
of common stock (par one
12 filed 2499,116 shares
Nov.
(12/6)
Properties, Inc.
Food Fair
to be offered for subscription by common stock¬
holders of record about Dec. 6, 1957, on the basis of one
J cent)
-
new
on
Dec.
each
for
share
rights to expire
shares held;
two
Price—To be supplied by amendment.
20, 1957.
convertible
stock
$100,000 of 10-year 6%
shares of common
to be offered in units of one $50
(letter of notification)
8
debentures
(par 10 cents)
and
20 shares of
debenture and
120,000
common
stock.
Price—$100
unit. Proceeds—To discharge short term obligations;
per
purchase merchandise inventory; and for working cap¬
ital.
Office — 1022 18st St., N. W., Washington. D. C.
Underwriter—Whitney & Co., Inc., Washington, D. C.
•
Gold Seal Dairy Products Corp.
Oct.
filed
25
cents)
for
175,000 shares of class A stock (par 10
which 15,000 shares are to be
reserved
offer to employees.
Price — To be sup¬
of
prior
Proceeds—To acquire outstanding
Office
—Elizabeth, N. J. Underwriter—Amos Treat & Co., Inc.,
plied by amendment.
Electric Manufacturing Co., Inc.
of Kulka
stock
Statement has been withdrawn.
Divide Oil Corp.
Oct. 11
(letter of notification) 300,000 shares of common
10 cents). Price—$1 per share. Proceeds—
To pay balance on oil and gas properties, and unsecured
notes and for drilling and working capital. Office—207
stock
(par
Newhouse
Bldg., Salt Lake City, Utah.
Underwriter—
Great Northern Life Insurance Co.
(no par)
(letter of notification) 44,400 shares of common
(par $1). Price—$6.75 per share. Proceeds—For
7
Oct.
and
stock
Probable bidders:
capital stock and unassigned surplus. Office — 119 W.
Rudisill Blvd., Fort Wayne, Ind. Underwriter—North¬
western Investment Inc., Fort Wayne, Ind.
1,537,500 shares of common B stock (par $1). Pro¬
ceeds—To the Attorney General of the United States
Underwriter—To be determined by competitive bidding
and
Blyth & Co., Inc., and The First Bos¬
Kuhn, Loeb & Co., Lehman Brothera
& Co. (jointly). Bids — Had been
(EDT) on May
654, 101 Indiana Ave., N. W., Washington 25.
Glore,
Guardian
Forgan
scheduled to be received up to 3:45 p.m.
13 at Room
OyC.^ but bidding has been postponed.
General Automatics
Ga.
Corp., Atlanta,
Ga.
Inc., Washington, D. C.
incorporators, management, and/or direc¬
Proceeds—For working cap¬
Price—$10 per share.
tors.
ital and
general corporate purposes.
States Land &
Gulf
Underwriter—None.
Industries, Inc.
of common stock (par 50
and $2,754,900 6% first mortgage sinking fund
bonds due 1972 being offered in exchange for the out¬
25 filed 316,814 shares
Sept.
cents)
preferred stock on the following
(a) 11%» shares of com¬
mon
stock, or (b) $100 of bonds, plus V-k shares of
stock. The offer, which is conditioned upon its accept¬
ance by holders of at least 85% of the 27,549 ojtstanding preferred shares, will expire on Dec. 20. DealerManager—Howard, Weil, Labouisse, Friedrichs & Co.,
New Orleans, La. Statement effective Nov. 13.
prior
$4.50
basis: For each preferred share
Aug. 17, 1956 filed $2,000,000 of 6% subordinated sink¬
1, 1971, with detachable
shares of participating
preference stock, to be offered in units of $500 of deben¬
tures and 40 warrants. Price—$500 per unit. Proceeds—
For
which
200,000 shares are to be publicly offered and the remain¬
ing 100,000 shares reserved for issuance upon exercise
of warrants which are to be sold at 25 cents per warrant
standing
General Credit,
Baltimore, Md.
Insurance Corp.,
Aug. 16 filed 300,000 shares of common stock, of
to organizers,
100,000 shares of common
stock (par $1).
Price—$2 per share. Proceeds—To es¬
tablish production facilities for manufacture and assem¬
bly of controls; and for other corporate purposes. Ad¬
dress—c/o Positronic Corp., 2572 Ridgemore Road, N W.,
Atlanta, Ga. Underwriters—Armstrong & Co., Atlanta.
;;May 23 (letter of notification)
ing fund debentures, due Sept.
warrants to purchase
160;000
.
Craft Corp.
Genie
Aug.
Birkenmayer & Co., Denver, Colo.
meni).
■
-
Underwriter—L.^L. LaFortune & Co., Las Vegas, Nev.
Great
(par 10 cents).
Inc.
of notification) 240,000 shares of common
stock (par $1). Price—$1.25 per share. Proceeds—To re¬
tire outstanding debt; for expansion of subsidiary cor¬
poration and for working capital. Office—c/o Edwin
F. Clements, 5312 Glenwood Ave., Youngstown, Ohio.
New York.
stock
To
Parking,
35
June 18 (letter
ton Corp. (jointly);
stock
shares of common
80,000
filed
12
Nov.
Forest Laboratories,
Aug. 28 filed 200,000 shares of capital stock (par 10
cents). Price—$2.50 per share. Proceeds—For sales pro¬
motion of company's products, working capital, addi¬
tional inventory and accounts receivable, for research
if Freeman Electric Construction Co., Inc.
Nov. 27 (letter of notification) 100,000 shares of
cents).
(par five
General
Proceeds—To repay bank loans
Ark.
Electro Precision Corp., Arkadelphia,
'Oct. 30
(2459)
The Commercial and Financial Chronicle
.
expansion and working capital. Underwriter—None
Offering to be made through selected dealers
named.
Applicatioh is still pending with SEC.
Hartford
Electric Light Co.
8 filed $2,400,000 of 3%
Oct.
secured debentures, series
A, due Aug. 1, 1967, being offered in exchange for 3%
first and general mortgage bonds, series D, due May 1,
ISSUE
NEW
Equip. Trust Ctfs.
Baltimore & Ohio RR._-_-..
(Bids
■
10
(Bids
;
Corp.___;—-Bonds
Service
Public
Wisconsin
v
Securities
Union
(Thursday)
Consolidated
—
(Bids
11:30
Duraloy Co.
Co. of
-Debentures
-Common
—
(Mortimer B. Eurnside & Co., Inc.)
Corp.)
(Tuesday)
10
Bonds
to
(Bids
(Bids noon
,
(The
(Bids
$3,435,000
Southwestern States Telephone
'Dean
11
EST)
Pacific Gas &
Curtis)
Webber, Jackson &
--Common
Corp
Gleich
(P.
Litecraft
W.
Co.,
Gas
(Merrill Lynch. Pierce,
Co
West, Toronto 10, Ont., Canada.
to
Bonds
(Wednesday)
—
Equip. Trust Ctfs.
$4,140,000
1958
Dentures
Common
underwriting) 826,500 shares
February 13,
Indiana
&
Michigan
(Bids
11
1958
Electric
a.m.
of
New
Staple & Machine Co.
notification) 20,000 shares of 6% cumu¬
lative preferred stock of which 10,000 shares are to be
offered to the public and the remainder to stockholders
of record Oct. 10, 1957 in exchange for seven shares of
common for each share of preferred.
Both subscription
and tenders for
exchange must be received on or before
ing, Pittsburgh 19, Pas
(Thursday)
Co
Office—New Rochelle, N. Y. Un¬
Stanley Heller & Co., Aetna
Corp. and Michael G KMz & Co., Inc.. all
York; and Roman & Johnson of Fort Lauder¬
derwriters—D. Gleich Co.,
1957. Price—At par ($10 per share). Proceeds
—For working capital.
Office—497 Union Trust Build¬
(Friday)
EST) $25,000,000
Hydra-Power Corp. (12/12)
22 (letter of notification) 90.000 shares of com¬
mon
stock (par 10 cents)
Price—$3 per share. Pro¬
ceeds—To retire $100,000 of debentures and for general
Nov.
Nov. 30,
Telephone & Telegrpah Co.—Debentures
stockholders—no underwriting) about $720,000,000
$17,500,000
Underwriter—D'Amico
Co., Inc., Buffalo, N. Y
Oct. 14 (letter of
be invited) $60,000,000
1958
for
International
(Tuesday)
Electric Co
to
loan, to purchase equipment and machinery
working capital. Office—1551-A Eglinton Ave.
repay
and
dale, Fla.
Inc.) $250,000
Fenner & Beane)
(Offering, to stockholders—no
(Offering
Preferred
$10,000,000
1958
Mines, Ltd.
(letter of notification) 300,000 shares of com¬
stock.
Price—At par ($1 per share). Proceeds—
20
Securities
$15,000,000
invited)
February 7,
American
Common
& Co.,
Permian Basin Pipeline Co
Inc.) $500,000..
Ltd
Brooks
Cylinder
&
Do
(Bids noon EST)
Debentures
Ltd
Brooks
Industries
(P
National
W.
to
market.
corporate purposes.
Bonds
s
invited)
b
January 22,
Co.;
Litecraft Industries,
to
Norfolk & Western Ry
Stanley Heller & Co.; Aetna Securities Corp.;
Roman & Johnson; and Michael G. Kletz & Co.) $270,000
(D.
(Wednesday)
1958
Light Co
(Bids
150,000 shares
$50,000,000
be invited)
January 21,
Common
and Paine,
Stearns & Co.
Hydra-Power
(Bids
$4,500,000
(Thursday)
12
ri^embe^
Bonds Debentures
Light Co
&
Pacific Power &
Bonds
a.m.
Electro Instruments, Inc
(Bear,
Power
(Bids
Suburban Electric Co
'Bids
Pacific
$4,000,000
Co.)
Witter &
Preferred
Co
to
January 15,
CST) $1,545,000
Refining
(Tuesday)
1958
Commonwealth Edison Co
Ry.__Eauip. Trust Ctfs.
Co.
Debentures^
First Boston Corp.) $20,000,000
Oil
Commonwealth
$30,000,000
Co.)
14,
January
Equip. Trust Ctfs.
invited)
be
Chicago & North Western
To
&
(Wednesday)
Ohio RR.i-—
&
mon
Connecticut Light & Power Co
Bonds
(Putnam & Co.; Chas. W. Scranton & Co.; and Estabrpok
&
filed
Horlac
Nov.
(Thursday)
1956
27
Price—At
Bonds
$14,000,000
EST)
a.m.
Underwriter—None.
Fund, Inc., Springfield, III.
Inc., Des Moines, la., of which Charles F. Martin is also
President.
Office—216 E. Monroe St., Springfield, 111.
(Tuesday)
$3,000,000
(Bids noon EST)
December 11
11
January 9,
$300,000
Brockton Edison Co.
Baltimore
(Bids
Inc.) $500,000
Co.,
Lauderdale, Fla.
100,000 shares of capital stock (par $1).
Proceeds—For investment. Distrib¬
utor and Investment Manager—Horace Mann Investors,
June
Ohio Electric Co
Columbus & Southern
69,000 shares
&
1958
7,
January
—Common
Motel Co. of Roanoke, Inc
(Southeastern Securities
December
Holman
(McDonald,
share at the rate of two new shares for each
Proceeds—For working capital. Office
per
Horace Mann
-Debentures
Finance, Inc
$30,000,000
EST.)
a.m.
shares of class A common stock to be
public at $5 per share and 116,366 shares
stock to be offered to stockholders
class B common
—Fort
$5,000,000
(Friday)
December 20
Dalton
Chesapeake & Potomac Telephone
of
five shares held.
Debentures
Corp.—
Cement
(Merrill Lynch. Pierce, Fenner & Beane)
(Monday)
December 9
Maryland
$1,125,000
Co.)
shares
2,499,116
Co.)
&
Fuller &
D.
offered to the
at $6
Fair. Properties, Inc
—--Common
stockholders—underwritten by Eastman Dillon,
.
(S.
/
Nov. 1 filed 50,000
—Common
December 19
V
:.
Home Owners Life Insurance Co.
B ord.
Higginson Corp.) $6,000,000
(Hal) Productions
(Friday)
(Offering to
.
(Lee
Roach
—None.
(Monday)
Israeli Paper Mills, Ltd.--Series
EST)' $7,000,000
a.ni.
December 6
Food
American
$3,435,000
EST)
noon
The
December 16
(Thursday)
December 5
1982, of Connecticut Power Co. on a par-for-par basis
exchange offer expires on Dec. 27.
Underwriter
CALENDAR
Bonds
Underwriter—None.
Intra State Telephone
Co.
Sept. 27 filed 4,900 shares of common stock being offered
for subscription by common stockholders on the basis
of one new share for each two shares held of record Oct.
Continued
on
page
36
36
(2460)
The Commercial.and Financial Chronicle
Continued
from
National
35
page
(
Biochemicals, Inc.
(letter of notification) 100,000 shares of com¬
mon stock
(par 10 cents). Price—$3 per share. Proceeds
—For cost of plant and inventory and for
general cor¬
Sept. 10
18, 1957; rights to expire on Dec. 16, 1957. Price—At par
($100 per share). Proceeds—To reduce bank loans. Of¬
fice—Galesburg, 111. Underwriter—None. Statement ef¬
fective Oct. 23.
Steamship & Salvage Co., Miami, Fla.
May 21 (letter of notification) 300,000 shares of com¬
mon stock (par 10 cents).
Price—$1 per share. Proceeds
—To purchase a ship and for working capital.
Underwriter—Anderson Cook Co., Inc., Palm Beach, Fla.
Janaf.
Inc., Washington, D. C.
July 30 filed 810,000,000 of 5V2-8% sinking fund deben¬
tures due Aug. 1, 1972 and 100,000 shares of common
stock (par 20. cents) to be offered in units of a $1,000
and
shares
10
and
of stock, or a $100 debenture
Price—Par for debenture, plus
share of stock.
one
$2 per share for each 10 shares of Stock. Proceeds—For
construction of
shopping center and other capital im¬
provements; for retirement of present preferred shares;
and for
a
working capital, etc. Underwriter—None.
it Koeller Air Products, Inc.
For
(par five cents).
Price—$2
share.
per
common
Proceeds—
expenditures, equipment, repayment
of
working capital. Business—Welding and cut¬
loans and
equipment.
Heights, N. J.
wood, N. J.
•
150,000 shares of
capital
ting
Litecraft
Office
253
—
Underwriter—Scott Taylor & Co., Inc..
York, N. Y.
New
• National
Cylinder Gas Co. (12/12)
Aug. 28 filed $17,500,000 of subordinated debentures due
Sept. 1, 1977 (convertible on or before Sept. 1, 1967).
Price
To be supplied by amendment. Proceeds — For
expansion and working capital. Underwriter — Merrill
Lynch, Pieice, Fenner & Beane, New York.
—
Boulevard,
Hasbrouck
Underwriter—Pierre Rossini
Co.,
West-
(12 12-18)
(par one
acquisi¬
of properties; for ore
testing program; for assess¬
ment work on the Yellowknife
properties; and for cost
of a concentration plant, mining
equipment, etc. Under¬
writer—Gearhart & Otis, Inc., New York. Statement ex¬
pected to be amended. -/;C7 7 :,v
:7':77/v/7':/Price—$1.25
Nov.
27
stock
(par $1). Price—Of debentures, 100%
interest; and of stock, $5 per share. Pro¬
retire
mortgage
and
other
indebtedness;
Proceeds—For
develop¬
ment
and
general
corporate
Proctor Elder Securities
Underwriter—•
purposes.
Co., Ltd., Fort Worth, Texas.
to
1977.
Read
•
&
reduce
Co.
Inc.
loans.
Underwriters
Dillon,
Co. Inc., both
Halsey, Stuart &
Public
Service
12
Nov. 26
leans, La.
W.
Brooks
&
lighting
Co., Inc., New
Dec.
on
(letter of notification)
18,000 shares of common
Price—$10 per share. Proceeds—To sell¬
ing stockholders. Office—118 East 25th St., New York,
stock (par $1),
Underwriter—None.
26.
debentures
stock
1960
due
Proceeds
—
stock.
common
For
mining
of 7%
ope
Price
expenses.
sinking;
common
$100 deben¬
—
$100
Office
per
1260
—
Simms St., Lakewood, Colo.
Underwriter—Peters, Writer
<& Christensen, Inc.,
Denver, Colo.
Mascot Mines, Inc., Kellogg, Idaho
June 3 (letter of notification) 800,000 shares of
stock.
Price—At par (17^2 cents
common
per share).
Proceeds
—For mining expenses.
Office—Sidney Bldg., Kellogg.
Idaho, Malcolm C. Brown is President. Underwriter—
Standard Securities Corp., Spokane,
Wash., and Kellogg,
Idaho.
it Massachusetts Investors Growth Stock Fund,
Incorporated
Dec.
2
filed
(by amendment) an additional 1,000,000
shares of capital steel.
Price—At market. Proceeds—
For investment.
Dec.
2
filed
(Russell), Dorset, Ohio
$50,000 of participating interests
"Warpula Well Number One"
One."
Proceeds—To
tory wells.
in
the
drilling of two explora¬
Underwriter—None.
motel,
roadside restaurant and gas station.
Business—Has been
processing and selling of gravel. Office—203 Broadway,
Monticello, N. Y. Underwriter—Walnut Securities Corp.,
Philadelphia, Pa.
Montreal
Nov. 15 filed
Jan.
1,
1978
due Jan.
(City of)
$11,000,000 of sinking fund debentures dife
and $7,000,000 of
sinking fund debentures
15, 1978.
Price—To be supplied by amendment.
works and local improvements.
Offering—Has been withdrawn. Will be an internal issue.
Proceeds
-—
For public
Mortgage Clubs of America, Inc.
Aug. 19 filed $1,000,000 of participation units in
Nov.
second
to the company. Proceeds—To be
invested in small loans
secured by second
mortgage on home properties. Office
—Springfield, Mass. Underwriter—None. Charles Hershman
is President.
Or¬
Underwriter—None.
14
filed
25,000 shares of
stock
common
(no par).
share. Proceeds—To repay short term
and for working capital. Business — Sells
eggs and day-old chicks.
Underwriter—None.
per
hatching
George E. Coleman, Jr., is President.
it North American Finance Co., Phoenix, Ariz.
Nov.
27
filed
300,000
of
class
B
common
Motel Co. of
Roanoke, Inc., Roanoke, Va. (12 9)
Nov. 18 (letter of
notification) 60,000 shares of common
stock (par 40 cents).
Price—$5 per share. Proceeds—
For purchase of land, construction
and working capital.
Underwriter—Southeastern Securities Corp., New York.
(N.
Y.j
in Munic¬
ipal Investment Trust Fund, Series A. Price—At
market.
Proceeds—For investment.
Sponsor—Ira Haupt & Co..
None.
Sales
Nuclear Science
& Engineering
Corp.
Sept. 20 filed 100,000 shares of common stock
(par 25
cents). Price—To be supplied by amendment. Proceeds
—To prepay indebtedness to
Norden-Ketay
Fund,
to
purchase additional equipment and for
working capital
Underwriter—Havden, Stone & Co., New York. Offer¬
ing—Temporarily postponed because of market condi¬
tions.
May 8 filed 250,000 shares of
market.
Proceeds—For
&
Gas Ventures—First 1958
Fund,
& Gas Ventures—Second 1958
Ltd. and
Fund, Ltd.,
Oct. 29 filed $2,500,000 of
participations in capital as lim¬
ited partnership interests to be
offered in $25,000 mini¬
mum amounts.
Proceeds—For
of
oil
acquisition,
properties.
Underwriter
—
exploration,
Mineral
Projects
Co., Ltd., Madison, N. J.
—
St., Princeton, N. J.
Hoisington, Inc.,
stock.
Investment Advisor
same address.
Price—At
Office—10
—
Nassau
Harland W
and
—
•
Permian Basin Pipeline Co.
(12/12)
Nov. 22 filed 826,500 shares of common stock
to
be
at
rate
offered for subscription
of one new share for
by
two
12, 1957; rights to expire
supplied by amendment.
be
with
other
(par $1)
stockholders
common
each
record Dec.
—To
shares held of
Dec. 31. Price
on
Proceeds—Together
funds, to repay advances from
Northern
Gas Co., the
parent, and for construction pro¬
Underwriter—None.
Natural
gram.
Pittsburgh, Pa.
Nov. 15 filed $5,646,750 of 5%
sinking fund income suboridnated debentures due Oct.
31, 1992; 112,935 shares of
stock (par $1); and
451,740 warrants to pur¬
451,740 additional shares of common stock to bo
common
chase
offered in units of $50 of
warrants
to
debentures,
purchase
four
one common share
shares
common
to
be
exchange for each outstanding share of
pre¬
ferred stock (par $25) plus accrued
dividends. Purpose
—To eliminate
or
reduce preferred dividend
arrearages.
Underwriter—None.
Pleasant Valley Oil &
Mining Corp.
Sept. 30 (letter of notification) 2,000,000 shares of
com¬
mon stock.
Price—At par (five cents
per share).
Pro¬
ceeds
For geological,
studies, reserve for contingent
liability, for machinery and equipment and other re¬
Office — 616 Judge Bldg., Salt Lake
City, Utah,
Underwriter—Steven Randall &
Co., Inc., New York.
serves.
Polytronic Research, Inc.
(letter of notification) 80,000 shares of common
stock (par 10 cents).
Price—$2.50 per share. Proceeds—
Nov. 4
working
stock
(par $1).
Price—$2.50
per
share.
curities
Office—208
Underwriter—Universal
Se¬
Co., 201 Enterprise Bldg., Tulsa 3, Okla.
Old American Life
Co., Seattle, Wash.
July 22 filed 15,825 shares of class A stock
(par $10) and
3,165 shares of common stock (par
$10) to be offered in
units of one common share and
three class A shares.
Price—$260 per unit. Proceeds —• For
working capital
and other corporate
purposes.
Underwriter—None.
Pacific Great Eastern
Ry.
25
filed $30,000,000 of
sinking fund debentures,
D, due 1987 (guaranteed
unconditionally as to
principal and interest by the Province of British
series
Colum¬
bia). Price—To be supplied
by amendment. Proceeds—
To repay bank loans.
Underwriters—Morgan Stanley &
Co., Harris & Partners, Inc. and Burns
Bros. &
Inc., all of New York.
program
and
Howard Ave., Kensing¬
Underwriters—First Washington Corp. and The
Stanford Corp., both of
Washington, D. C. Change of
Name—Formerly Acme
Tool &
Engineering Corp.
it Public Savings Life Insurance Co.
Nov. 29 filed 113,000 shares of
common
cents).
—To
stock
Price—To be supplied
by amendment.
Public
holder.
Savings
Insurance
Co.,
the
(par 50
Proceeds
selling stock¬
Office—Charleston, S. C. Underwriter—None.
Pyramid Mining & Metal Corp.
Oct. 24 (letter of
notification) 236,000 shares of common
(par $1).
Price—$1.25 per share. Proceeds—For
mining expenses. Office
508 Great Plains Life
stock
1,538,993 shares
rate
of
one
are
Pacific
stock
to be offered
share
for
in
(par $1),
exchange
common
each
two
stock
Merrill
shares; the remaining 15,000 shares are to be
issuable
upon exercise of presently
outstanding options granted
by Merrill, which options will be
assumed by Pacific
Office—Calgary, Alberta, Canada.
Underwriter—None.
Statement
effective
Nov.
28
filed
13.
concentrating pilor mill. Office—295 Madison
Ave.,
17, N. Y. Underwriter—None. 1
Chemicals, Inc.
10
filed 200,000 shares
Price—To be supplied
by
of
common
stock
amendment.
(par $1).
Proceeds—For
expansion program and
working capital. Underwriter—
Blyth & Co., Inc., New York.
Offering — Temporarily
postponed.
Research Instrument
Corp.
7 (letter of
Oct.
notification) $125,000 of 10-year 10%
debentures and 12,500 shares of
common
(110 par) to be offered in units of
one $100 debenture
convertible
stock
and
ten
shares
of
common stock.
Price—$200 per unit.
Proceeds—For
equipment, working capital and inven¬
tory. Office—7962 S. E. Powell
Blvd., Portland, Ore.
Underwriter—Campbell & Robbins, Inc., Portland, Ore.
Resolute Bay
Trading Co., Ltd.
Oct. 29
(letter of
notification) 30,000 shares of common
stock. Price—At
par ($5 per share).
Proceeds—For work¬
ing
capital^ etc. Business—Purchase
dities.
and sale of commo¬
Office-—St. John, N. B., Canada. UnderwriterIrving Weis & Co., New
York.
• Roach
(Hal) Productions (12
16-20)
375,000 shares of common stock
(par $1).
per share.
Proceeds—For expansion of pro¬
duction of filmed
television commercials and for working
Price—$3
capita1.
Business—Produces
—Culver City.
New \ork.
stock.
Calif.
stock (par
$1)
3,000 shares. Price
Proceeds
films for television.
Underwriter—S
—
To
dis¬
D.
Statement effective Nov. 14.
Mountain Quarter Racing
01
r\
Uct.31
(letter
Price—At
Rose
charge trade accounts payable, to
buy tools and equip¬
working capital.
Underwriter—None.
ment and for
nium
New York
notification) 300,000
par
($1
per
outstnding indebtedness.
Underwriter—R. B. Ford Co.
common
to be offered in blocks of not less
than
be supplied by amendment.
—To
Ramapo Uranium Corp. (New York)
Aug. 13 filed 125,000 shares of common stock
(par one
cent). Price—$5 per share. Proceeds—For
exploration
and development of
properties and completion of a ura¬
pay
Co., Houston, Texas
165,000 shares of
Bldg.,
Lubbock, Tex. Underwriter—Sterling Securities
Co., Inc.,
Odessa, Tex.
Aug. 8 filed
common
outstanding Merrill Petroleums, Ltd.
the
Denton,
Offering—Indefinitely postponed.
Pacific Petroleums, Ltd.
Oct. 11 filed 1,603,998 shares of
of which
for
research, development
Office—4130
ton, Md.
Oct.
common
Proceeds—For
development of oil and mineral properties.
Wright Bldg., Tulsa, Okla.
at
capital.
Reichhold
Oil & Mineral
Operations, Inc.
Nov. 4 (letter of
notification) 100,000 shares of
Oct.
common
investment.
class B
—
Oil
Pan American Tool
Princeton, N. J.
one
a proposed insurance
company to be
Peoples Security & Endowment Co. of
America
Office
Montgomery, Ala.
Underwriter-p
None. T. j]
Patterson is President.
I
Corp.,
New York.
Nassau
to be
and
named
For equipment and
stock
to be made
through Eugene M. Rosenson,
President, and Marcus T. Baumann, Vice-President and
Treasurer.
'
Municipal Investment Trust Fund, Inc.
May 9 filed 5,000 units of undivided interests
shares
(par $1). Price—$5 per share. Proceeds—For
working
capital and other corporate purposes.
Underwriter—
Oct.
mortgages of real estate to be offered for public sale in
units of $100, plus a sales commission of
$10 per unit
of four class A shares
—
etc.
Monticello Associates,. Inc.
Feb. 18 (letter of notification) 300,000 shares of
common
itock.
Price—At par ($1 per share).
Proceeds — For
capital expenditures, including construction of
•
con¬
St., New
Madison, N. J.
and "Walker Well Number
finance
Proceeds—For
Baronne
Nichols, Inc., Exeter, N. H.
Oil
it McConnel!
Office—317
bank loans
shares of
(par $1) to be offered in units of
ture and 25 shares of
unit.
and 65,000
Price—$25 per share.
program.
Price—$27
Magdalena Mining & Milling Co.
Nov. 7 (letter of notification) $260,000
fund
offered in units
share,
offered in
struction
N. Y.
Peoples Security Investment Co.
1,000,000 preorganization
subscriptions to
class A voting common stock and
250,000
preorganization
subscriptions to class B non-voting common stock
Oct. 28 filed
and
Inc.
York.
of incandescent and fluorescent
Underwriter—P.
common stock
(par 50
Proceeds—For capital
ex¬
and notes
penditures; to retire loans
outstanding; and
for inventories,
tools, and other: corporate
purposes
Underwriter—Christopher Corp., Miami, Fla.
—
Offering—Temporarily postponed.
New Orleans
Nov.
bank
and
it Luxene, Inc.
—Manufacture
fixtures.
Business
Fla.
of
share.
Pittsburgh Brewing Co.,
mortgage pipeline bonds
Price—To be supplied by amendment. Pro¬
(letter of notification) 5,965 shares of common
stock (no par) being offered for
subscription by minority
stockholders of record Dec. 2, 1957 on the basis of one
new share for each
eight shares held; rights to expire
purchase machinery; and for working capital.
■
share.
10,000 shares of class A preferred stock
(no par) and 5,000 shares of class B preferred stock (no
par).
Price—$100 per share. Proceeds—For investment
,in real estate notes, for reserve for real estate
of New York.
ceeds—To
per
filed
of
accrued
York
tion
ceeds— To
common
shares
per
surplus to finance
Lithium Corp., New
Nov. 22 filed $500,000 of 6lk% sinking fund debentures
1977
(with warrants attached) and 50,000 shares
and
415,450
Price—$1
cent).
National
due
due
filed
7
cents).
Feb. 19 filed 3,120,000 shares of common stock
Natural Gas Pipeline Co. of_America
Nov. 19 filed $40,000,000 of first
Ltd., Passaic, N. J.
Thursday, December 5, 1957
.
Pearce-Simpson, Inc., Miami,
Nov.
•
Industries
.
the purchaser agreeing to donate each ciass
B
share to the Peoples Security Foundation for
Christian
Education, to be incorporated as a non-profit
corpora¬
tion. Price—$2 per share. Proceeds
For capital
it National Mortgage Discount Corp., Waco, Texas
Nov. 25 (letter of notification)
stock
Office—Room 202 Houston Title Bldg.,
Houston, Tex.
Isthmus
debenture
porate purposes.
.
Records,
July 22 (letter
share).
Office
Office
Fuller &
Co.,
Association
shares of common
Proceeds—To re¬
—
Littleton, Colo.
Inc.
of
notification) 11,022 shares of common
stock. Price—At
par ($1 per
share). Proceeds—For work-
nviQCa?T^i
0f.f.,ce—'705
South Husband
St.,
Stillwater,
Stillwa^rio^iralter~Ilichard B- Burns Securities Agency,
Number 5696
Volume 186
.
.
The Commercial
.
dnd
(2461)
Financial Chronicle
37
195?
(C. F.)
Rule
•
Construction Co.
Sept. 13 filed 127,289 shares of common stock (par
$10).
Price—$13 per share. Proceeds—To retire outstanding
Joans and for working capital and investment in addi¬
tional equipment. Offiee—Nashville, Tenn. Underwriter
—None. Statement, effective Nov. 20.
St. Louis Insurance
Corp., St. Louis, Mo.
March 27 filed 1,250 shares of class C cumulative pre¬
to "certain employees and officers. Price—$2 per share.
Proceeds—To pay outstanding obligations to Ogden Corp
Washington, D. C.
June 20 filed 40,000 shares of common stock. Price—$25
per share. Proceeds — For investment.
UnderwriterEquitable Securities Corp., Nashville, Tenn. OfferingHeld up pending passing of necessary legislation by
Exempt Bond Fund, Inc.,
ferred stock (par $57).
Price—$97 per share. Proceeds
—To R. M. Realty Co., who is the selling stockholder.
Congress.
Underwriter — Yates, Heitner & Woods, St. Louis, Mo.
Offering—Indefinitely postponed.
Oct. 1 filed 99,195 shares of common stock (par $10) to
be offered for subscription by common stockholders on
the
Schering Corp., Bloomfield, N. J.
Sept. 19 filed 278,983 shares of 5% cumulative con¬
vertible preferred stock (par $30) and 418,475 shares of
common stock (par $1)
to be issued in exchange for
Laboratories, Inc. (which is to be merged
stoek of White
with Schering
effective
Corp.
Sept.
19,
1957)
the
on
stock for each White class A
class B
or
com¬
Underwriter—None.
share held.
mon
★ Sentinel Security Life Insurance Co.
27 filed 5,000 shares of common stock (par $10).
be
supplied
amendment.
Proceeds—For
Office-r-Salt Lake City, Utah.
working capital.
writer—None.
Shacron
by
Under¬
writer—None.
Simplicity Pattern Co. Inc.
Oct.. 10 filed 155^000^ shares of common stock (par $1).
Price—-To be supplied by amendment. Proceeds—To two
selling stockholders. Underwriter—Merrill Lynch, Pierce,
Fenner & Beane, New York. Offering—Temporarily de¬
'
layed.
t
1
'
Oct.
21
t
v;
f
file^. $1^780,78(1 of convertible debentures due
Dec. 1, 1972 to be offered for subscription by common
stockholders on the basis of $100 of debentures for each
40 shares of stock held
as
of Nov. 26 1957; rights
id
ex¬
pire on Dec. #3,"4957. FHce^lOO % of principal amount.
Proceeds—Together with funds from private sale of
$1,500,000 5%% first "mortgage bonds, to repay bank
loans and for
Underwriters—Stone &
construction.
new
Webster Securities
dorp, and Paine, Webber, Jackson &
Curtis, both of New York.
stock, $1.44 dividend convertible series (par $25). Price
be supplied by amendment.
Proceeds—To repay
—To
bank loans and for construction
program.
—Dean, Witter-, & Co;, Ban Francisco,
Underwriter
Calif.
Oct. 14 filed 600,000 shares
be offered in exchange for
and
working; capital.
Standard
15
Oil Co.
Nov. 6 filed 3,000,000 shares of common stock (par one
mill). Price—-25 icents per share. Proceeds—For land
acquisition, exploratory work, working capital, reserves,
Owens Of
E.
group of investors.
Proceeds — Together with
funds,to purchase assets' Of Highway Trailer Co.
small
sidiary and affiliated companies.
Stanley & Co., New York.
Standard' Steel
Oct.
3
(letter
Products
investments
in
/ Union of
United States Sulphur Corp.
shares of common stock (par one
Price—$1 per share. Proceeds—For plant rental,
etc.; to retire corporate notes; for core drilling; for
working capital; and for other exploration and develop¬
ment work.
Office — Houston, Texas. U ndervvriter —
cent).
None.
Universal Drilling Co., Inc.,
Underwriter—Morgan
Manufacturing Co.
struction program. Underwriter—To be determined by
competitive bidding.
Probable bidders: Halsey, Stuart
& Co.
on
Inc.; Kidder, Peabody & Co. and White, Weld &
(jointly). Bids—To be received up to 11 a.m. (EST)
Dec. 11 at 441 Stuart St., Boston 16, Mass.
Surinam Corp., Houston, Tex.
Oct. 21 filed. 10,000,000 shares of common stock (par
cent). ~ Price—$1 per share. Proceeds—For explora¬
tion and exploitation of
oil, gas and sulphur properties
one
Underwriter—T.
ton, Tex.
J. Campbell
Investment Co., Inc., Hous¬
.
Syntex Corp. (Republic of Panama)
July 24 filed 1,165,750 shares of common stock (par $2)
to be offered for
subscription by common stockholders
of Ogden
Corp. on the basis of one new share for each
four shares held and to holders of options on the basis
of one share for each
option to purchase four shares of
Cgden common stock;, unsubscribed shares to be offered
stock
Under¬
Portland, Ore.
April 30 filed 1,250,000 shares of common stock (par 10
cents). Price—To be supplied by amendment (expected
to be $1 per share). Proceeds—For exploration purposes.
Underwriter—To .be named by amendment. Graham Al¬
bert Griswold of Portland, Ore., is President.
Warwick Valley
Oct. 24.
j//;■ ^'.; c^,//.;;: fv■;
/
Development Corp.
(letter of notification) 50,000 shares of common
stock (par $1) of which 34,280 shares are to be offered
2
publicly at $1.20 per share and
15,720 shares are to be
individuals under options. Proceeds—
For general corporate purposes. Office — 3612 Quesada
St., N. W., Washington, D. C. Underwriter—Wagner &
Co., New York City.
offered to certain
Chrome
Inc.
300,000 shares of common
($1 per share). Proceeds — For
mining expenses.
Office — Suite 901-902 Continental
Bank Bidg., Salt Lake City, Utah.
Underwriter—Utah
General Securities, Inc., Salt Lake City, Utah.
Nov. 4
(letter of notification)
stock.
Price—At par
Western
New
York.
14
Prospective Offerings
! "
Inc.
July 9 it was reported company plans to issue and sell
up to $12,500,000 common stbek, following spin-off by
California Eastern
Aviation, • Inc. of its subsidiaries,
Land-Air, Inc. and Air Carrier Service Coup, into Air¬
craft, Inc., a new company. Underwriter—Cruttenden,
!*odesta & Co., Chicago, 111.
Telephone & Telegraph Co. (2/7)
plans to offer to its
stockholders an issue of approximately $720,000,000 of
convertible debentures on the basis of $100 principal
amount of debentures fpr each nine shares held.
Sub¬
American
Nov. 20 it was announced company
scription rights are expected to be mailed on or about
7, 1958 and the subscription' period will run until
about March 12, 1958. Proceeds—To meet' demand for
-new telephone facilities.
Underwriter—None.
★ Appalachian Electric Power Co.
it was reported that this company, a subsidiary
of American Gas & Electric Co., plans to issue and sell
Dec. 2,
$25,000,000 of first mortgage bonds. Proceeds—To repay
bank loans and for construction program.
Underwriter
—To be determined by competitive bidding.
Probable
Halsey,
Stuart
&
Corp.; Kuhn, Locb & Co.;
Co. Inc.; The,First Boston
Harriman Ripley & Co. Inc.
Offering—Expected to be made in May or June, 1953.
M- Atlantic City Electric Co.
April 9, Bayard L. England, President, announced that
later this year the company will probably issue about
$5,000,000 of convertible debentures. Proceeds—For con¬
struction program. Underwriter—May be determined by
competitive bidding. Probable bidders: Halsey,, Stuart &
Co. Inc.; Kuhn, Loeb & Co., American Securities Corp.
and Wood, Struthers & Co. (jointly); White, Weld & Co.
and Shields & Co. (jointly); The First Boston Corp. and
Drexel & Co. (jointly); Eastman Dillon, Union Securi¬
ties ,& Co. and Smith, Barney & Co. (jointly); Lee Higginson Corp.; Blyth & Co., Inc.
Baltimore & Ohio RR. (12/5)
(12/11)
Bids will be received by the company at 2 Wall St.,
New York 5, N. Y., up to noon (EST)
on Dec. 5 for
the
purchase from it of $3,435,000 equipment trust
certificates. Probable bidders: Halsey, Stuart & Co. Inc.;
Salomon Bros. & Hutzler. Bids for an additional $3,435,000 of certificates are expected to be received on Dec. 11.
Brooklyn Union Gas Co.
announced that company expects to issue
Nov. 25 it was
and
or
of first mortgage bonds next April
Proceeds—To repay bank loans and for con¬
sell $22,000,000
May.
Underwriter—To be determined by
Probable bidders: Halsey, Stuart
& Co. Inc.; Lehman Brothers; Blyth & Co., Inc., and
F. S. Moseley & Co. (jointly); Merrill Lynch, Pierce,
Fenner & Beane; Harriman Ripley & Co. Inc. and The
First Boston Corp. (jointly); White, Weld & Co.
struction program.
competitive bidding.
Copperada Mining Corp.
(Canada) 9
Aug. 30 (letter of notification) 300,000 shares of common
stock. Price—At par ($1 per share). Proceeds—For de¬
drilling costs and sur¬
vey, and for working capital.
Office — 1205 Phillips
Square, Montreal, Canada
Underwriter—Jean R. Veditz
Co., Inc., New York. Offering—Expected at any time.
velopment and exploratory work,
Power
Electric
California
Co.
C. Ernst, President, said that "it now
appears we will be back to market more securities soon
alter the first of the year."
Proceeds—For repayment
Nov.
Carl
20,
and for new
of bank loans
To be determined by
Underwriter—None.
Washington National
Western
Inc.,
Telephone Co.
(letter of notification) 4,708 shares of common
stock (no par) to be offered for subscription by common
stockholders on the basis of one new share for each two
shares held. Price—$20 per share. Proceeds—For con¬
struction of new telephone plant. Office — 47-49 Main
Oct.
Co.,
& Son, lnc.
(letter of notification) $75,000 of 10-year 6%
debentures due Oct. 1, 1967, with common stock war¬
rants to purchase 7,500 shares of 10-cent par common
stock at $1 per share. Price—$100 per unit of a $100
debenture and one warrant. Proceeds-r-To repay short
term debt and for working capital.
Office—Stockholm,
N. Y. Underwriter-—Sherry Co., New York.
Oct. 24
St., Warwick, N. Y.
Suburban Electric Co. (12/11)
Nov. 5 filed $4,500,000 first mortgage bonds, series D,
due 1987. Proceeds—To repay bank loans and for con¬
New Orleans, La.
shares of class A common
Uranium Corp. of America,
—
Co.
400,000
working capital and other corporate purposes.
writer—Kohlmeyer & Co., New Orleans, La.
of
Louis, Mo.
filed
(par $1). Price—$5.50 per share. Proceeds—To pay ob¬
ligations incurred and to be incurred in connection with
construction and equipping of a drilling barge; and for
notification) $165,000 of 7% 10-year
debentures, 11,000 shares of common stock (par $2.50)
and warrants to buy 11,000 additional common shares
to be offered in units of
$30 principal amount of deben¬
tures, two shares of stock and a warrant to buy two
common shales at $7.50 each.
Price—$45 per unit. Pro¬
ceeds
For equipment and working capital. Office—
2836 S. 16th St., Milwaukee, Wis.
Underwriter —• The
Milwaukee Co., Milwaukee, Wis.
St.
Coconut Fiber Corp.
Oct. 8 filed 1,500,000
31
&
.
Sept. 30 filed 735,000 shares of common stock (par $1).
Price—$4 per share. Proceeds—For expansion program
and other corporate purposes. Office—Washington, D. C.
Underwriter — Southeastern Securities Corp., New York.
Oct.
Teden
bidders:
South Africa
Sept. 12 filed $15,000,000 10-year external loan bonds
due Oct. 1, 1967. Price—To be supplied by amendment.
Proceeds—For transportation development prograrh. Un¬
derwriter—Dillon, Read & Co. Inc., New York/ Offering
-^Postponed temporarily. ;
States
Underwriter —«•
Statement effective
erty and for other corporate purposes.
Feb.
standing 5% term loan and/or provide additional work¬
ing capital. Office—Roanoke, 111. Underwriter—White
& Co., St. Louis, Mo., on a best-efforts basis.
_
sub¬
★ Stuart-Hall Co., Inc., Kansas City, Mo.
Nov. 27 filed $630,000 of 20-year 6% convertible de¬
bentures due Dec. 15, 1977. Price—At par (in denom¬
inations of $1,000 each). Proceeds—For working capital
and to reduce bank loans.
Underwriter—White & Co.,
-
-
Sept. 24 filed $600,000 of 6% sinking fund debentures
and 30,000 shares of class A common stock (par $1) 'to
be offered in units of $500 of debentures and 25 shares ol
stock. Price—To be supplied by amendment. Proceeds—
To reduce bank loans, to repay all or part of an out¬
(New Jersey)
increase
Industries, Inc., Detroit, Mich.
Ulrich Manufacturing Co.
Office—3309 Winthrop St., Fort
Proceeds—To
Watej^pBSv is President.
filed
Underwriter—None.
filed
share.
purpose^Mjriderwriter—None. Al¬
$l,650,00Crof 6% convertible subordinate
debentures and 340,000 shares of common stock sold to
2
Dec.
Wycotah Oil & Uranium, Inc., Denver, Colo.
July 29. filed. 375,000 shares of common stock (par $1).
Price—$4 per share. Proceeds—For acquisition of prop¬
Aircraft,
Trans-America Uranium Mining Corp.
★ Trans Continental
(CST) on Dec. 5, at -231 So. La Salle St., Chicago 4, I1L
of oil and
and foi
leases/for drilling and completion of wells,
other corporate purposes. Underwriter—None.
fred
Co. (jointly); Dean Witter & Co.; Lehman Brothers;
White, Weld & Co. Bids—To be received up to 10 a.m.
Proceeds—To repay
by amendment.
gas
6,549,124 shares of capital stock (par $7)
being offered for subscription by stockholders of record
Nov. 8, 1957, at the rate of one new share for each 30
shares held; rights to expire on Dec. 18, 1957. Price—$44
per
Texas
indebtedness, for acquisition and exploration
Worth, Tex. Underwriter—Reilly, Hoffman & Sweeney,
Inc., Now York, N. Y.
,
Oct
of common stock (par $1) to
leases on certain properties.
/Texam Oil Corp., San Antonio,
and other corporate
The First Boston
Inc.; Kidder, Peabody & Co.;
Co.
Nov.
Dallas, Texas
May 29 filed 300,000 shares of common stock (par $1),
be offered for subscription by common stockholder!
on a basis of two new shares for each share held. Price
supplied
&
Corp.; Merrill Lynch, Pierce, Fenner & Beane; Salomon
Bros. & Hutzler and Eastman Dillon, Union Securities &
Young (Donald W.)
to
be
Proceeds—For construction program and to
bank loans.
Underwriters—To be determined by
competitive bidding. Probable bidders: Halsey, Stuart
repay
—
Underwriter—None.
United
Sovereign Resources; I nc;
Nov. 19 (letter of notification) 1,500 shares of 7% cumu¬
lative preferred/Stock. Price—At par ($100 per share).
Proceeds—For construction, payment of promissory note
Rochester, N. Y,
Corp., New York, Offer¬
Office
Tex-Star Oil & Gas Corp.,
•
Southwestern States Telephone Co. (12/11)
Nov. 20 filed 160,000 shares of cumulative preferred
held.
supplied by amendment. Proceeds — To
working capital and
Underwriter—The First Boston
other
,
share for each four shares
new
ing—Indefinitely postponed.
a
Southeviv Colorado Power Co.
one
retire short term bank loans and for
—To
Oil Corp.
Sept. 11 (letter vbf notification) 40,000 shares of common
stock ((par $l)-to be offered for subscription by stock¬
holders; thferi to public.' Price—$1.25 per share to stock¬
holders; $1.37% to public. Proceeds—For expenses in¬
cidental to drilling of oil wells. Office—Suite 14, 1500
Massachusetts -Ave., N. W., Washington, D. C. Under¬
of
general corporate purposes.
Nov.
Price—To
basis
Price—To be
basis of one share of preferred stock and 1% shares of
common
''
Taylor Instrument Companies
-
(12/5)
first mortgage bonds due Dec.
1987.
1,
U nder writer—N one.
Tax
Wisconsin Public Service Corp.
Nov. 5 filed $7,000,000 of
ders:
construction.
competitive bidding.
Underwriter—
Probable bid¬
& Co. Inc.;
Co. (2) For.
(1) For any bonds—Halsey, Stuart
Peabody & Co.; White, Weld &
Kidder,
cominon stock—Merrill Lynch,
Pierce, Fenner & Beane;
Rhoades & Co.; White, Weld &
Carl M. Loeb,
Co.; Kid¬
Any preferred stock may be sold
on a negotiated basis, and underwriters may be Merrill
1
Lynch, Pierce, Fenner & Beane and Kidder, Peabody
der, Peabody & Co.
& Co.
(jointly).
Cambridge Electric Light Co.
Oct. 22 it was reported company may issue
$4,500,000-
bonds.,
Liiderwriier— To be deter¬
competitive bidding. Probable bidders: Halsey,
Stuart & Co. Inc.; The First Boston Corp.; and Coffin
& Burr, Inc. and F. S. Moseley & Co. (jointly). Bids—
Tentatively expected to be received in January.
of
first
mortgage
mined by
Central
Illinois Public Service Co.
reported company plans to
April 9 it was
$10,000,000 of 1st mtge.
loans
and for
Issue and sell
bonds. Proceeds—To
construction program.
'
reducebank
Underwriter—To be
Continued
H
on page
38
38
The Commercial and Financial Chronicle
(2462)
Continued
from
37
page
Stuart & Co. Inc.; Kidder, Peabody & Co.; Blyth
Co., Inc.; White, Weld & Co.; Stone & Webster Securities Corp. and Estabrook & Co. (jointly).
&
by competitive bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutzler;
Equitable Securities Corp.; Eastman Dillon, Union Secu¬
rities & Co.; Blyth & Co., Inc.; Kidder, Peabody & Co.;
and Merrill Lynch, Pierce, Fenner & Beane (jointly);
Kuhn, Loeb & Co. and A. C. Allyn & Co., Inc. (jointly).
Offering—Expected late in 1957.
12 it
announced
was
company
$5,000,000 of first mortgage bonds
plans to sell about
sometime after the
turn of the year. Proceeds—To repay advances made by
Peoples Gas Light & Coke Co., the parent. Underwriters
—Probably Dillon, Read & Co. Inc. and Halsey, Stuart
&
Co.
St., Chicago 6, III.,
purchase
stalment of
from
it
up to noon (CST) on Dec.
of
$1,545,000 equipment
an
11 for
trust
aggregate of not exceeding $3,690,000 of
these certificates.
Probable bidders:
Co. Inc.; Salomon Bros. & Hutzler.
Halsey,
Stuart
&
was
reported company plans to issue and sell
about $15,000,000 of first
mortgage bonds. Proceeds—
To repay bank loans and for construction
program.
Underwriter—To be determined by competitive bidding.
bidders:
Halsey,
Stuart
& Co. Inc.; Morgan
Stanley & Co. and W. E. Hutton & Co. (jointly); Blyth
6
(2) For preferred stockPierce, Fenner & Beane and White, Weld
(jointly); The First Boston Corp.; Lehman Bros
and Blyth & Co. Inc. (jointly); Smith, Barney & Co.Harriman Ripley & Co. Inc.; Kuhn, Loeb & Co.
Any
offering of common stock may be made to common
stockholders, with Merrill Lynch, Pierce, Fenner &
Securities
110,000 shares of
common
stock is expected.
.
Federation Bank & Trust Co.
12
it
;
*
(N. Y.)
stockholders will be
announced
was
the
&
Underwriter
Brothers, New York.
given
Underwriters—Carl M. Loeb, Rhoades
and Merrill Lynch, Pierce, Fenner & Beane.
program.
applied to
company
Inc. (jointly); Blyth & Co., Inc.
Jan. 21, 1958.
•
;
*
& Co
Pacific Gas
to
its
(C. F.)
Co., Waterville, Me.
company plans soon to offer
stockholders
common
stock.
York.
Inc. and The First Boston Corp.
(jointly); Mer¬
Lynch, Pierce, Fenner & Beane and Lehman Bros,
(jointly); Eastman Dillon, Union Securities & Co. and
White, Weld & Co. (jointly).
some
additional
common
Cincinnati Gas & Electric Co.
8 it was also announced that
Nov.
the feummer of 1958 to offer to its
about: 450,000
about
additional
l-for-16
a
shares
basis.
common
of
in
stockholders
stock
common
on
Underwriter—None.
City Investing Co., New York
July 30, Robert W. Dowling, President, announced that
the directors are giving consideration to the
possible
future
issuance
of
debentures
which
could
be
used
largely to acquire investments producing ordinary in¬
come as well as those with
growth potentials.
Coastal Transmission Corp.
July 1 it was reported the company plans to offer pub¬
licly about 191,000 units of securities for about $20,000,000
(each unit expected to consist of a $25 debenture 01
interim note and five shares of $1 par common
$35
stock).
Proceeds—Together with other funds, for
con¬
struction program. Underwriters—Lehman Brothers
and
Allen & Co.. both of New York.
about
$25,000,000 first mortgage bonds
Underwriter—Allen & Co., New York.
sell
29
it
was
and
bank
loans.
be
de¬
termined
by competitive bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; Dillon, Read & Co. Inc. and
The Ohio
Company (jointly); Lee Higginson Corp. and
Salomon
Bros.
&
Hutzler
(jointly); Eastman Dillon,
Union
Securities
&
Co.
and
Glore, Forgan & Co.
(jointly); White, Weld & Co.; Lehman Brothers.
Bids
—Expected to be received up to 11 a.m. (EST) on Jan.
7 at City Bank Farmers Trust
Co., New York. Registra¬
tion—Planned
on
or
about Dec. 17.
Commonwealth Edison Co.
Nov. 4 it
000
of
was
construction
(1/14)
announced company
mortgage bonds
or
plans to sell $50,000,-
debentures.
Proceeds
Underwriter—To
program.
be
For
—
determined
by competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; The First Boston
Corp.; Glore, Forgan & Co.
Bids—Tentatively
expected to
1958.
Registration
December.
be
received
on
Jan.
14,
Planned for about the middle of
—
Connecticut Light & Power Co.
(1/9)
Nov. 25 it was reported
company plans to sell $30,000,000 of first
mortgage bonds due 1988.
Proceeds—For
construction
program.
Underwriter
Putnam
&
Co.,
Hartford, Conn.; Chas. W. Scranton & Co., New Haven,
Conn.; and Estabrook & Co., Boston, Mass.
Registration
—
—Planned for Dec. 20.
Darco
was
reported registration is expected of
proximately 275,000 shares of
about 225,000 shares
pany and
are
common
ap¬
com¬
50,000 shares for selling stockholders. Business
—Manufactures
products
aircraft and missiles.
for
commercial
and
Underwriter—William
military
R. Staats &
Co., Los Angeles, Calif.
was announced
additional
capital of between $25,000,000 and
$35,000,000 during the
next two years.
Underwriter—For any bonds to be de¬
termined by competitive bidding. Probable bidders:
Halsey, Stuart & Co. Inc.; Blyth & Co., Inc.; White, Weld
& Co., and
Kidder, Peabody & Co.
(jointly).
Eastern Utilities Associates
April 15 it was announced
and
company
sell
Proceeds
Electric
mined
$3,750,000
—
Co.,
For
a
of
25-year
proposes
collateral
trust
to
issue
bonds.
advances to
subsidiary.
Blackstone Valley Gas &
Underwriter—To be deter¬
by competitive bidding.
14
Probable bidders:
yPublic Service Electric~&> Gas Co.
it was announced company anticipates it will
or in 1958 $25,000 000 of preferred
ring. 1
sell in the Fall of 1957
stock.
on
an
New
an issue of preferred
increase in the authorized common stock.
Brothers and
Clark, Dodge &
equity financing which was done pri¬
Hal¬
For
construction
York.
Nov.
program.
Under-
1
26
it
was
announced
"stockholders of record
that
bank
is
offering to its
Nov.
25, 1957, the right to sub¬
additional shares of capital stock (par
$12) at the rate of one'new share for each .12 shares held;
'rights will expire on Dec. 11. Price—$45 per share. Prot ceeds—To
increase capital and surplus. UnderwritersWalker, Austin & Waggoner. The First Southwest Co.
/and Dallas Rupe & Son, all of Dallas, Texas.
vately.
scribe for 223,125
Long Island Lighting Co.
16 it
was announced company plans to sell latei
$40,000,000 of first mortgage bonds, series J.
Proceeds—To refund $12,000,000 of series C bonds due
Jan. 1, 1958 and for construction program. Underwrite!
year
be
determined
by
competitive bidding. Probable
& Co. Inc.; The First Boston
Corp. and Blyth & Co. Inc. (jointly); W. C. Langley &
Co. and Smith, Barney & Co.
(jointly).
bidders:
25
it
Canadian
was
for permission
Riddle Airlines, Inc..
\
Halsey, Stuart
Multnomah
Nov.
—
Republic National Bank of Dallas
.
—To
Proceeds
writer—May be Merrill Lynch, Pierce, Fenner & Beane,
Dec.
approving the creation of
on
Smith,
Rids—
about Jan. 15.
on or
'
'
Oct.121 it
was
the SEC
an
announced company plans to register with
issue of
shares and the
Fund, Ltd.
new common stock,, the number of
price at which they will be offered not
yet determined. The authorized common stock has been
increased frorrv 7,500,000 to 15,000,000 shares.
Proceeds
—To finance route expansion and for working capital.
announced company has applied to SEC
to issue and sell in the United States its
class
A common shares, of which there are authorized
;/, Underwriter—James H. Price & Co., Inc., Coral Gables,
1,000,000 shares (par $1) and 10,000 shares outstanding.
Flay and New York, N. Y.-, handled previous public
Office—Vancouver, B. C., Canada.
offering of 500,000 shares of common stock at $3.25 per
Norfolk & Western Ry. (1/22)
share in July, 1956.
: >
Bids are expected to be received
by this company up to
(EST) 011 Jan. 22 for the purchase from it of
$4,140,000 equipment trust certificates (third instalment)
noon
to
Royal Dutch Petroleum Co.
■'
Oct 3 it
semi-annually from May 1, 1958 to and in¬
cluding Nov. 1, 1972. Probable bidders: Halsey, Stuart
& Co. Inc.; Salomon Bros. & Hutzler.
Northern
Aug.
29
until
the
Illinois
this
$8,000,000
Gas
half
of
raise
Co.
announced
company
first
its
1958
that
plan
determined
by
25
the
Natural
Gas
Proceeds—For capital expenditures.
gan
of 456,813 additional shares of
to be offered late in
3 it
January to
on
the
basis
of
Proceeds
one
—
new
share
Approximately
each
Q00 additional capital stock (equivalent to
arid $154,000,000). Price—-To be governed
$112,000,000
by market
prevailing at time of issue. Proceeds—For
Capital expenditures. Underwriter—Morgan Grenfell &
Co.
-
,
outstanding
■
12,210,000 shares.
.
Proceeds
—
.For
construction
reported company to issue and sell in
issue of $1,500,000 convertible
subordinated
(jointly); The First Southwest Corp, Rauseher, Pierce
<%XCo. and Dallas Securities Co. (jointly); Lehman Bros»
arid Bear, Stearns & Co.
(jointly); Eastman Dill°n»
Service Co.
Underwriter—McDonald & Co., Cleveland
Registration—Expected in near future.
&
£#
program. Underwriter—To be determined
competitive bidding.- Probable bidders: Kidder, Pea¬
body & Co. and Merrill Lynch, Pierce, Fenner & Beane
(jointly); The First Boston Corp. and Blyth & Co., Inc.
Oklahoma Gas & Electric Co.
Nov. 18 it was reported company plans to
raise about
$20,000,000 next Spring, through sale of bonds and other
securities. Underwriter—To be determined
by competi¬
tive bidding. Probable bidders:
(1) For
Stuart
0., Ltd,
present
shares
debentures.
Ohio.
conditions
eight
(par $10),
was
an
£55,000,-
to repay
Underwriter
Ohio Water
December
stock¬
plans to offer to
1958 between £40,000,000 and
stockholders
$20,000,000
loans and for construction
program.
—None.
Sept. 26 it
announced company
London, England.
,
• '
/■;./• "
UFTexas Utilities Co.
Nov. 4 it was announced company may sell some addi¬
tional common stock in an amount not exceeding 4c/c of
stock
common
for
was
holders early in
■
proposed issuance
common
v
jpShell Transport & Trading Co., Ltd.
.
--
the
Underwriter—Mor¬
Stanley & Co. in U. S.
,
competitive
Co.
company announced
and
between
bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; The First
Boston Corp.; Glore,
Forgan & Co.; Blyth & Co., Inc.
Northern
million
deferred
For
be
Fls.800
has
$10,000,000 early this fall. No decision
has been made as to the form of the
proposed financing,
but no consideration is
being given to sale of common
stock or securities convertible into common
stock. Pro¬
ceeds—For construction program.
Underwriter —
Nov.
between
and
bonds, to
announced company
was
raise
it
to
T
plans early in 1958 to
Fls.1,000 million
(equivalent to $211,000,000 and $263,000,000) through a
"rights" offering to stockholders.
Price — To be gov¬
erned by market conditions prevailing at time of issue.
mature
bank
company may need
Tentatively expected
Inc.
announced stockholders will vote
was
stock and
held.
Eastern Gas & Fuel Associates
April 3 it
it Litton Industries,
Nov. 25 it
stock, of which
to be sold for account of
program.
Pierce, Fenner & Beane and Retnholdt & Gardner (joint¬
ly).
any
Industries, Inc.
Sept. 23 it
Securities &XCo. ( jointly);/ Blyth <& Co., Inc.,
Barney & Co. and White,/Weld &,Co. (jointly).
Underwriter—For bonds, to be de¬
termined by competitive bidding. Probable bidders: Hal¬
sey, Stuart & Co. Inc.; Lehman Brothers, Merrill Lynch,
this
(1/7)
Underwriter—To
be received up to 11 a.m. (EST)
Proceeds—To repay bank loans and for con¬
struction
,
,
^ Pacific Power & Light. Co;F (1/15)
"pec. 2 it wasfeportedXtririfrfheyq^^
to
issue arid sell 100,000- sharesLof' pdrimiative preferred
stbek (par $100). - Proceeds—Fori construction program.
Underwriter—To. ~ be determined/ by competitive bid¬
ding.
Probable bidders: Halsey, Stuart & Co. Inc.;
Kidder, : Peabody & Co. arid Eastman Dillon, Unioii
Laclede Gas Co.
April
announced
reduce
bidders: Halsey, Stuart
& Co. Inc.: The First Boston
Union Securities & Co. Bids-
Aug. 5 it was announced company plans to raise up to
$11,700,000 new money this year through sale of new
Co. handled last
company plans to issue and
$14,000,000 of first mortgage bonds due 1988. Pro¬
ceeds—To
bidding. Probable
Inc.; Harriman Ripley
Corp.; Eastman Dfcllon,
Ten tatively expected to
on Feb.
13, 1958.
(1/15)
received on,Jan. 15.
Underwriter—To be determined by competi¬
tive
1977.
due
★ Columbus & Southern Ohio Electric Co.
Nov.
Michigan Electric Co. (2/13/58)
announced company plans to issue and sell
$25,000,000 of first mortgage bonds due 1988. Proceeds
—For reduction of Bank loans and for
'construction
Underwriters—Lehman
Colorado Fuel & Iron
Corp.
Oct. 3 it was reported
company now plans to issue
sell
&,
securities.
,v.
.
program. Underwriter
competitive bidding. Probabk
bidders: Halsey, Stuart & Co. Inc.; Eastman Dillon,
u riion
Securities & Co. and Kidder, Peabody & Co.
(jointly); Lehman Brothers; Bear, Stearns & Co. and
Salomon Bros, & Hutzler (jointly
Co., Inc. and
White, Weld & Co. Co. (jointly). Bids—Expected to be
was
program.
plans
company
a
be determined, by
—To
land, Me.
Indiana
to offer
bank loans and for construction
Underwriter—Probably H. M. Payson & Co., Port¬
Nov. 15 it
announced company
was
reported company: plans issue arid sale of
$15,000,000 first mortgage bonds.
Proceeds — To repay
Co.
rill
•
Co.
Electric
Nov. 22 it was
announced
was
To retire
Halsey, Stuart & Col
Bids—To be received on
7^ Pacific Power & Light Co.
Hathaway
—
plans, following bond
small amount of common
stock to keep the capital structure in reasonable balance.
Underwriter—Blyth & Co., Inc., San Francisco and New
for permission to
debentures to mature
$28,343,800 of 5% income
1, 2056 in exchange for the 283,438 shares of out¬
standing $5 preferred stock (no par) on the basis of
$100 of debentures for each preferred share.
June 24 it
&
sale about Jan. 21,
ICC
issue
Proceeds
program.
bidders: The First Boston Corp. and
Nov. 4 it
the
authorised the sale of $60,000,000 first
Underwriter
determined by competitive bidding. Probable
—To be
Gulf, Mobile & Ohio RR.
8
■.
(1/21)
Co.
and refunding mortgage bonds.
bank loans and for construction
vyas announced company plans to issue some
additional first mortgage bonds, the amount of which has
not yet been determined.
Proceeds — For construction
Nov.
■;;V/:
Electric
&
Gas
Oct. 16' directors
Underwriter—None.
capital and surplus.
underwriting.
Pacific
shares held of record Oct. 18, 1957; rights to expire on
Dec. 6, 1957.
Price—$21 per share. Proceeds—To in¬
crease
Co.
Beane
118,900 additional shares of
one new share for each three
right to subscribe for
capital stock at the rate of
Co, (jointly).
&
Merrill Lynch,
offering^ of
Dec.
Cincinnati Gas & Electric Co.
Probable
was
May 3 it
(12/11)
certiifcates to be dated Jan. 1, 1958 and to mature in 15
equal annual instalments. -This constitutes the first in¬
Nov. 8 it
riman
Gulf Interstate Gas Co.
Chicago & North Western Ry.
the
it
—Lehman
Inc.
Bids will be received by the company at 400 West Madison
28
Sept.
Chicago District Pipeline Co.
Nov.
Oct.
Thursday, December 5, 1957
.
Fenner & Beane
.
Falcon Seaboard
Drilling Corp.
reported that a secondary
.
Corp.; Kuhn, Loeb & Co., Merrill Lynch, Pierce
and White, Welcl & Co. (jointly); Har¬
Riplev & Co. Inc. and Eastman Dillon, Union
Boston
sey,
determined
.
bonds—Halsey,
Inc.; Equitable Securities Corp.; The First
.
Union Securities & Co.
//Toledo Scale Co.
.\Sept. 26 it was reported that, following merger
Haughton Elevator Co, Toledo Scale Co. plans to
Lsome additional
&
common
Co, Cleveland, Ohio.
vember.
with
Underwriter—McDonald
Registration—Expected in No¬
stock.
1957
Number 5696
186
Volume
.
.
.
Corp. of California
Transocean
Brothers and Bear, Stearns & Co.
& Co., Blyth & Co., Inc., Eastman
announced company plans a public offer¬
ing of securities to provide about $6,700,000 of ne\*
working capital.
April
(Mo.)
it was reported company plans to offer around
additional shares of common stock, first to
stockholders. Underwriter—To be determined
competitive bidding.
Probable bidders: Lehman
Brothers; Merrill Lynch, Pierce, Fenner & Beane.
Union Electric Co.
(Mo.)
reported
was
company
.
15
it
to its common stockholders
plans to issue and
sell
approximately $35,000,000 first mortgage bonds.
Underwriter—To be determined by .competitive bidding.
Probable bidders:' Halsey, Stuart & Co. Inc.; Lehman
it
11
,
Associates
its
the
the
latter
Gas
Co., it
Blackstone
clear
financing. And it af¬
fects the
size of dealer inven¬
tories.
As a matter
of fact, it
a
the
of
problems
facts
take
dis¬
and
to
get/a
has
trend
this
on
been
only
5.7
with
equipped
were
year
the
market,
the share it had
comparison
it
pres¬
considered
be
captured
with
30%
low
1955,
the
of
market.-
do
six-
any
opinion,
little
a
classes
engines. This year, on
the basis of registrations for the
first eight months, it looks as if
only about 17% of the estimated
need to
we may
redefining of the price
before
begin to draw
real conclusions oil this mat¬
we
models
the
Another
taken
percentage
impressive growth has
place in the
use
of power
steering. About 23% of the 1955
were equipped with power
models
What
place
;7
v
production
At
s.
comlort, more ^convenience,
more
,
trend
schedule
massive upgrading of
a
market, with auto¬
mobile. customers lookin g for
toward
extra equipment—
or, as we say, buying "more auto¬
mobile" is the growing popularity
of
the
station
wagon.
In some
parts of the country the station
wagon is now accounting for ap¬
proximately one out of every four
of our new-Plymouth sales. This
demand is showing up in factory
this
is
the automobile
taking place in the market for
virtually all the other types of
optional equipment, from radios
air-conditioners.
of
certain
of handling,
ease
Car
the
rise
in
off?
level
been
devel¬
Sales
meaning
it
Does
American-sized
favor?
These
this
of
is
losing
interesting
all
are
the
that
mean
car
and important
questions, and time
give us the complete
will
alone
In
answers.
of
absence
those
only offer you
opinions oil this sub¬
believe, first,
that
the
comfortable, all-purpose
can
of my
ject.
1
roomy,
the
I
some
American
that
car
will
take
you
the
theatre, carry a heavy topload, cruise the superhighways, or
pull a house-trailer, will retain its
present place of
overwhelming
popularity.
The
trend
toward
automobile"
"more
nant trend in
Another
our
Plymouth Division 22% of all the
is
domi¬
the
the
used-car
dealers
specialty.
In
Miami there
that handle
It
wagons.
these
point
where
are
Angeles
nothing
is easily
will
a
and
two used-car lots
"wagon lots,"
called,
some
making it
are
Los
become
but station
possible that
they
as
more
are
wide¬
spread.
the market today.
change that has been
a considerable amount
attracting
attention in automotive circles
in
number
the
of
cars
by rental and leasing firms.
By 1950 .the number of cars being
in
used
this
business had
260,000, most of which are leased
with
rate
capacity. Recently, one of
the forms this upgrading seems to
have taken is the buying of the
senger
present
At
80,000.
over
to fleet operators.
growing families, more pas¬
grown
the
number is in the neighborhood of
to
greater ease of handling,
and,
especially for those suburbanites
to
If it continues
grow at the 20 to 30% a year
it has been experiencing, by
the
early 60's the rental and leas¬
industry
ing
half
will
million
a
own
close
The
cars.
to
number
with
evi¬
at
being leased to individuals
the present time is estimated
dence of the same trend is the in¬
at
about
creasing popularity of the luxury
series, in the low-priced lines. In
business
lower-priced
cars
loaded
extra
equipment. Another
the
model
1957
year
ended
just
of
showed
combined increase
cars
clear
This side of
50,000.
is
still
too
growth rates
new
for
have
to
tfie
any
been
established.
the Belvederes, Fairlanes and Bel
Airs
Along with this tendency to
medium-priced cars out of
make
low-priced cars we will probably
see a number of very strong com¬
petitive counter-moves from the
year
been considerable talk
there has
about
the
increasing share
of the market
enjoyed by the lower-priced and
the
higher-priced cars, and the
resulting squeeze on cars in the
ttieciium-price ranges. In my opin¬
ion, it is still far too early to draw
any
conclusions
called
facts
trend.
we
now
about
this
medium-priced
selling of
—
lower-
number of possible
a p proaches
to widening the
medium-price market. One of the
most fruitful may be the intro¬
duction of an increasing number
of conveniences and performance
only
one
features
the
of
Right along with the fast growth
event,
that
the
in
car
At present,
years.
of
stock dn
common
Inc.
Southern Gas Co.,
reported company plans to offer to stock¬
14-day standby, an additional 16,566 shares
a
a
However, financing
l-for-7 basis.
plans may be revised and a full registration statement
filed.
Underwriters — The Milwaukee Co., Milwaukee,
Wis.; and Harley, Haydon & Co. and Bell & Farrell, Inc.,
Madison, Wis.
less successful—regard
company
or
bank
a source of funds that
the
finance
the
merely
as
enables^them
maintain
to
in¬
an
in
cars
wnich
would
make
automobile
best
advantages of a sound
between the dealer
organization.
1957
slightly
units,
it the third
be
million
six
than
At
and
should
1958
better
of
of
ventory
in history.
year
September,
making it possible for their cus¬ our own President, Mr. Colbert,
tomers to buy cars on a monthly
in predicting that 1958 would be
payment basis that is within their "definitely brighter" than 1957,
means.
They sometimes fail to pointed out that the total number
recognize all the other business- of new cars sold in 1955, 1956 and
cars
as
a
way
Miami Beach in
to well
amount
would
over
partnership
19
and his finance
the
The„ upgrading of the market
which I have mentioned,
along
healthy market in 1958, since nor¬
mally a very large proportion of
the
with
need
it
a
in
has
in¬
styles,,
greatly
body
with
brought
creased
increase
tremendous
and
options
the dealer's part
million.
This provides one
of
for
a
conditions
favorable
in
on
one
to
traded
cars
the
from
come
cars
new
three-year-old
class.
significant that in the
1955, 57% of the cars
puts heavy new demands sold on instalment credit carried
upon financing organizations. And, contracts for periods of from 30
incidentally, we recognize that to 36 months. This means that a
this problem has been complicated
very large proportion of the tre¬
by the current high level of de¬ mendous number of people who
mand for money.
contracted for long-term automo¬
We
realize
that
part of the bile instalment credit in 1955 will
for
on
wholesale
This
credit.
situa¬
It is also
record year
tion
to this problem,
answer
from your
view, is to bring about
right balance between your
point of
the
wholesale and retail credit activi¬
And
told
have
we
consistently
that one of the
dealers
our
trucks
in
be
position to take on new
obligations in 1958.
a
instalment
Over and
beyond these consider¬
ations, we expect that the manynew and attractive features of the
1958
models—together with the
are
We
being
of Teasing can mean
opportunity for both dealers
financial organizations. Cer¬
and
tainly it is a trend that needs to
be studied closely by everyone in
the business of selling, servicing
financing motor vehicles.
or
are
notravailable in
models.
competitive
In any
develop¬
in the price bracket
rang¬
The
ler
in
experience of the last few
has confirmed us at Chrys¬
the belief that the dealer's
understanding of his own financ¬
ing
problems,
and
his
effective
working relations with his finance
connections can literally make the
difference
failure.
between
Some
months
ahead
working relationship with his fi¬
find
success
dealers
—
and
connections
nance
set
up
special
a
experienced men
selves full-time to
Their
that
we
have
staff of highly
to devote them¬
this matter.
principal duty is to main¬
tain constant and effective liaison
between finance
organizations and
dealers out in the field. These
our
finance
area
managers
understanding
problems
of
and
your
them
to
enables
that
the
of
and
us¬
and
1960's
reasons
many
be added in a
Growth
little
Chrysler Corporation is the first
automobile company to establish
a full-time field staff of this kind,
business.
is
pretty fair indication
of the importance we place upon
sound
a
to
of
from
man
pected
to
business
the
the
national economy,
Detroit
always
is
a
ex¬
give his views on the
outlook.
For
some
segment of
automobile
a particu¬
out
bright promise — for this
Over 80% of those 77 mil¬
larly
lion, or about
added
62 million, would
the suburban
to
popu¬
the
family is just
about an absolute necessity and
two cars are standard equipment.
And in many homes with driving
teen-agers, it takes three cars to
keep the whole family happy.
There is every reason for all of
us to look ahead with confidence
to a prosperous future.
But nat¬
As
we
all
know,
in
suburbs one car per
kind of indication of the
some
trend
Good Year
when everyone has
ground trying to
These days,
ear
a
holds
reason.
lation.
Looks to
every
But for the
it
business
be
financing.
million will
17 years!
over
this scale means op¬
on
portunities for
it
the present popu¬
lation—and these 77
working out practical solutions.
and
scale
associated with the
automobile business. Consider this
fact alone.
One of the country's
leading population
experts has
said that by 1975 the population
of this country may well be as
high as 249 million. That's 77 mil¬
everyone
problems
in
70's we
for expecting
and
opportunity on a tremendous
for
lion more than
help
immediately
years
the
to
have the
dealer's
rea¬
lot of people have
it won't come automati¬
been looking our way and saying urally
It's going to take energy,
that the automobile industry is cally.
imagination,
and sound manage¬
going to supply the big lift in the
economy.
In Detroit, we know ment to realize our - tremendous
son
or
other,
a
enough about the dangers of lore-
Financing Understanding
years
lines
portance to the dealer of a sound
get
The growth
new
dependable
convinced of the fundamental im¬
under
operated
expect
building
of
ways
and
his
the number to
increase to about 800,000 by 1965.
lease.
best
about 250,000
a
lower-priced
ments
of
Already we
priced models in virtually all of
the medium-priced lines. This is
the
the
cars.
the
the introduction of—or
seen
have, it is far from
On
basis
so-
of
marketers
and
makers
intensified
No- Trend Shift
a
upgrading will probably continue.
have
During the past
ually
ties.
leasing—which is a rela¬
cars now being
built for the na¬ of 260,000 units over the number tively new development — there
tional market are station wagons. produced in the 1956 model year. has also been a steady growth in
As many
the leasing of trucks—a form of
may know, the popu¬ This was a gain of nearly 18%.
larity of the station wagon has It is my guess that this kind of leasing we have known for many
reached
was
both of
owned
really seems to be taking
36. ;
Paralleling
buying more
as
Upgrading Low-Priced Cars
Similar developments have been
to
part payment
with greater comfort,
is
crease
steering. On 1956 models the per¬
centage rose to 27 and on 1957's
to
Oct. 17 it
holders for
effective vigorous and highly competitive
of whole¬ promotion they are receiving —
sale credit is to encourage the will add a strong stimulus that
cars.
Undoubtedly, the growing is the rapid growth of the rental
flow of their retail paper to their will be l'elt for many months to
popularity of the station wagon and leasing industry. Since 1947,
financing organizations. We shall come.
has had an important effect in when wartime shortages began to
continue to give them this mes¬
making the lower-priced cars ap¬ ease enough for the rental busi¬
Long Run Outlook
sage.
pear to be getting an unusually ness to get underway, there has
We at Chrysler have become so
When
we
look
beyond
the
been
a
steady and impressive in¬
big share of the market.
1957's to 80.
on
Valley
popularity? Is it
going to continue? Is it going to
of
1956
as
Small
recent
medium-priced
For
would be rated
with automatic transmissions. But
;
Wisconsin
building
;
What
to
on
of
oping which at first glance seems
to be moving in the opposite di¬
rection. I refer to the increasing
sales of the small foreign car.
example, in the R. L.
Polk classification, a fully
5.9 million cars to be registered equipped
Plymouth, Ford or
Chevrolet station wagon
will have six-cylinder engines.
is still
'
counted in class one, along with
Nearly as spectacular as this
the lowest-priced cars offered by
trend is the rapid growth in the
the
industry.
Actually, in any
popularity
of
automatic
trans¬
missions. Only 68% of the indus¬ realistic price definition, most sta¬
tion wagons in the low-price field
try's 1955 models were equipped
ter.
cars
answers,
In my
cylinder
jumped to 74 and
stock
that
in
through 1954. Its
can
by
when
engine.
recently as 1953, 50% of the
million cars
registered that
As
shift
of
as
—Kidder, Peabody & Co., Blyth & Co., Inc., White, Weld
& Co. and Laurence M. Marks & Co., all of New York.
properties. Dealer-Manager—May be Kidder,
class
25%
same
1951
share
ent
sider, for instance, what has hap¬
pened to the six-cylinder
about
from
how fast
going. Con¬
line
Price
about the
few
a
anything like
Mercury, is at present enjoy¬
ing
look at just
a
is
there
pronounced
two, for in¬
stance, which includes such cars
as Dodge, Pontiac, Oldsmobile 88,
challenging?
more
say,
Let's
is to receive
probably in January, with $30,000,000 of new public fi¬
nancing, mostly in bonds, but may include some deben¬
tures. Proceeds—For construction program. Underwriters
stockholders oi
common
common
another situation has
that
real,
direction.
tribution more complex—or shall
we
of
convenience, and
The Automobile Market
all
and to
$2,500,000
toward
Changing Patterns in
makes
parent)
8, Kensey M. Robinson, President, stated that the
will come into the market early next year,
Oct.
(other than Eastern Utilitiei
ing roughly from $2,500 to $3,300
should be very interesting indeed.
Right
along
with the
trend
consumer
^
company
peabody & Co., New York.
Continued from page 6
automobiles. As a result, it affects
Co., Inc., San Francisco and New
&
Washington Water Power Co.
was announced
company, a subsidiary ol
Valley Gas & Electric Co., plans to issue
within one year, $4,000,000 of bonds, $1,100,000 of note#
and $900,000 of preferred stock to its parent in ex¬
change for $6,000,000 of notes to be issued in exchange
for certain assets of Blackstone.
The latter, in turn,
proposes to dispose by negotiated sale the first three
new
securities mentioned in this paragraph.
April 15 it was also announced Blackstone plans to offei
common
•
derwriter—Blyth
Blackstone
bv
Nov.
Natural Gas Co. authorized the sale of $5,000,000
Proceeds—For expansion program. Un¬
the directors
18
debentures.
in
39
Valley Gas Co.
corporate purposes.
1,000.000
Oct.
York.
Engineering, Inc., Arcadia, Calif.
Nov. 6, Harry Oedelserk, Chairman of the Board, an¬
nounced corporation plans a public stock issue in the
near future.
Proceeds—For working capital and other
Tuttle
Nov. 11
Washington
(jointly); White, Weld
Dillon, Union Securi¬
ties & Co. and Shields & Co. (jointly); The First Bos¬
ton Corp. Offering—Expected early in March.
May 21 it was
Union Electric Co.
(2463),
The Commercial and Financial Chronicle
casting to make us pretty cagey in
matters of this kind.
I will say,
that we are all looking
forward to a good year.
I have
never
seen
such general agree¬
however,
ment
the
Many of the
have
the
among
expected
companies
level
of
on
business.
industry's executives
been saying
the market for
opportunities in a rapidly chang¬
ing business environment.
It
way
is
my
belief that the three-
partnership
selling
and
worked
continue
so
to
-
well
nation.
production,
that has
in the past will
make its full
bution to the
the
of
financing
contri¬
dynamic progress of
1
Ci- (2464)
The
Shearson, Hammiil
In
Minneapolis
Mutual Funds
MINNEAPOLIS, Minn.—Sheargon,
a
Hammiil & Co. have opened
Commercial and Financial Chronicle
Fund
oil
Portfolio Shifts
Shute,
Shute
Mr.
resident
for
manager
Company and prior
Baxter
thereto
&
Slayton Associates, Inc.
on
was
with Jamieson & Company.
the
industry's future
paper
securities
"rank
high"
tion protection.
"The
investment
among
said
glowing picture of
a
currently undervalued
its
investments for growth and infla¬
counselors
becoming increasingly stable," said the
to
Funds,
Managed
ment, reflected in
tive resistance to
The
special
Managed
the recent
Slayton
Funds,
of
made
was
11
including the only investment
in paper company
stocks,
classes
to
of
representatives
mutual
fund
and board
FREE INFORMATION
securities.
FOLDER AND PROSPECTUS TO
tons,
YOUR INVESTMENT DEALER OR
nation should swell foreign per capita
consumption
NATIONAL SECURITIES &
vs.
RESEARCH CORPORATION
435
•
i
k v/>-
Moreover,
here), providing
rising
living
standards
"growing outlet"
a
for
outside
the
(20-25 pounds
American
pro¬
increasing stability of the
industry, the report
paper
tinued, is composed of several factors:
non-durable
low-cost
con¬
manufacturing;
products; larger, stronger, better-integrated and
man¬
particularly important factor combines the hundreds
thousands of
with
)
FUTURE
INCOME?
Investors
INCOME in the years
acres
of timber reserves owned
fast-growing stress
for
CURRENT
INCOME?
,
,
through
and
ahead.
tries which
An
are
scientific
resource
indus¬
subject to eventual exhaustion," said the Slayton
especially favorable investment factor, the counseling firm
said, is the tax regulation permitting pulp producers to charge
depletion
against
current
earnings
because
despite the fact that growth of timber in
to the rate of
to play an
Incorporated
Income Fund
of
many
cutting,
companies is equal
.
research
on
all
at
levels
will
continue
important role in the industry's growth, Slayton Asso¬
New types and uses of paper are
developed.
many
In
and textiles.
serving
paper
timber
use.
ciates believes.
wood
applications,
Today there
has
paper
are
constantly being
supplanted
7,000 different kinds of
over
times that number of different
many
metal,
niques of
paper
production, resulting in
far greater than the
average for all
a
on
each
ailable
from
prospectus
fmul is
m
rise in labor productivity
industry. It said such increases
partially cushion the impact of rising
A
wage
rates
and
moderate
importance of the labor factor in the cost of production.
"A good time to
buy growth stocks is after they have had
substantial
reaction," the report concluded.
"With
the
paper
a
in¬
investment denier•
dustry having experienced the third largest rate of growth since
the turn of the
century, and with an enormous potential for future
Tiie Parker Corporation
growth, the securities of its leading companies rank
high as sound
long-term investments for appreciation and inflation protection.
your
200
Berkeley Street
Today these stocks
be
can
bought at discounts of
up
their 1956 highs."
Boston, Mass.
dropping of rediscount rates
by certain Federal Reserve banks
has
had
Assets
Futures,
Net
New
the
High
commodity
had record
Sept.
30,
1957,
net
amounted
the
company
nine years ago,
chian,
fund
as¬
year
while
to 40% from
was
The
positions, he reported,
substantial current rate
new
all pay a
of return.
fund's
the
out.
continues to
show
tion
in
general.
First, "Lower bond prices do
not
necessarily
indicate
lower
credit
standing for < the issuing
companies, or any basic change
in their financial positon
ity to
connection
in
that
or
bond interest."
pay
the
1954,
abil¬
In this
report points out
when bond prices
relatively high, the average
earnings of the com¬
were
after-tax
panies whose obligations are cur¬
rently held by the fund "were
times their bond interest re¬
quirements. In 1956, they averaged
3.91
times
such
requirements."
Secondly, the report states that
continued
easing of the money
ease
Barringer reminded his
board
that
chased
the
issues
new
value
per
share
rose
Total
pur¬
debentures
when rates of return
ago
year
Fund
Delaware
Sinclair
During
both
any year
in
formed
reported
.
assets
at
the
close
of
the
of
was
within
half
A
the
Delaware
fund
acquired
executive
looks
its
to
Mathieson
Olin
tures for the
and
Distributors
63 Wall
newlydeben¬
Yott
combination of
same
that
ones.
he told
7
van own
yield is fairly
the
conversionprivilege, which stays unchanged
fOr 15 years, is only 22%
away
from the present rather deflated
common
stock. The
YOUR share
through
*
FUNDAMENTAL
"the
market for the
Group, Incorporated
of American business
his
and
generous,
it- ■'«
INVESTORS
t
;
in
mutual fund
a
.
common
of
prospectus-booklet of
Fund, mail
a
facts
certainly
this coupon today.
of their 27%
cause
the
fund's
the
to
attempt
foreseeable
the
continue
future.
it
bonds
higher yield,"
seem
to
about the
Be¬
management
to the
investing
stocks. For copy
company has shown very aggres¬
sive growth in the past and will
in
REQUEST
Street, New York 5, N. Y.
against lower markets
Reviewing the issue,
ON
said
participation in higher
board
PROSPECTUS
V.
and securities decline.
The
man¬
from your investment dealer
security, if properly bought, will
protect against both a business
reasons,
be better
Name.
Address..
present market than
Sinclairs
which
we
sold.7'
[oi3aap^3|pCTcaa|
Tri-Con
HUGH W. LONG
AND COMPANY,
Elizabeth
Trust Holders
TT
.
Up
INC.
3, N. J.
mmim,
27
X957
1R
positions
Shares of
said.
different
Fifteen
commodities,
of
these
he
commodi¬
ties
produced profits, the largest
gains being made in sugar, wheat
soybeans, he added.
tion's
common
stock of Tri-
Corporation, the
largest
diversified
na¬
closed-
end investment
company, held in
domestic trust company and bank
nominee names were increased by
31.6%
during the first 10 months
1957.
of
910.233
shares
objectives
of
this
upon
they
Atlanta
—■
41
CENTS A SHARE
Difttributioii «f lleulhrtl I'm lit 4
for
1"
~i
was
shares, and second and
largest were 111,460 and 93,shares, respectively. Of those
third
601
request
Los. Angeles
of
the
year,
57
at the
beginning
increased
their
holdings
the
during10-month
period and 27 reduced their num,
EATON &• HOWARD
STOCK FUND
^Largest of these holdings
159,400
Loud, Abbett & Co.
t
123
October. At
accounted
of the 6,423,856 shares
Tri-Continental common out¬
who held shares
—>
of
19 CENTS A SHARE
Diciiloml from Investment lnrnine
standing.
Fund
possible
long-term
capital
and
income growth
for its shareholders.
Prospectus
the end
BALANCED FUND
about 19%
are
ONE WALL ST REET, NEW YORK 5
at
level,
EATON &• HOWARD
in
at the start of the year
names
this
Common Stock Investment Fund
Investment
Chicago
A
pur¬
convertible
good
a
"balanced"
agement's judgment.
This, he feels, illus¬
how
trates
point of their
a
price.
stocks, with the
in accordance with
realized
—
investing
bonds, preferred and
proportions
mid-November
chase
of
—
in
common
Yet, he pointed out, the bonds
—all sold between late September
d
inc.
Incorporated 1933
against 49 today.
a n
Securities,
A mutual fund
at the
and the company's
selling
over
60
sale,
common
u
Group
compared with about 430
Continental
year,
Fund
New York
>r.
At that time,
recalled, the Dow Jones Aver¬
age
was
between 470 and
480
he
—
—A U. 8. incorporated mutual fund nruyidinc diversified, managed investment in
Canada, lor free prospectus mail this ad to
Established 1804
ADMINISTERED FUND
much lower than
were
long and short—were taken
18
and
BULLOCK
THE FULLY
a
on
they later became.
bulged to 1,198,640 shares in
investors
yield.
names
:
year
reasonable price apprecia¬
well as an attractive pres¬
a
as
ent
120
i
Inc., in
the
up, this
prior security could
sort of strong
Holdings
Address
for
1957 makes several
points of more than passing inter¬
est to shareholders and to
bond
4.15
man¬
report
agement believes that if the money
market
of
IT aine
annual
ended Oct. 31,
on
Sept. 30, 1956 amounted to $189,-
$136,387,
Dec. 3.
CALVIN
Manhattan Bond Fund,
its
net
Richard D. Don-
manager,
$2.93
Sept. 30,, 1956 to
$5.17 on Sept. 30, 1957, a gain of
81.5% after including a 15 cents
per share dividend paid in Sep¬
tember,
Mr.
Donchian
pointed
;<
to
largest dollar gain in
since
iv
Inc.,
fund,
earnings
the
at
asset
from
$293,041 lor the fiscal
ended
cor¬
commons.
on
"these
Futures, Inc.
sets of
on
porate bonds and preferreds, and
a
similar, though uneven, effect
fitted
mutual
effect
marked
a
protection
uses.
The study noted that research has
greatly improved the tech¬
the
Moreau
D.
den
time
"This is in contrast to extractive natural
Increasing emphasis
INVESTING!
by the big producers
conservation
on
of
study.
Established 1925
A mutual fund invested
in a list of
securities
selected for possible
GROWTH of CAPITAL
the
forestry.
J
fund's
recent
Barringe r,
the
Reporting
shifts,
Mr.
The
One
Incorporated
Machine and Kan¬
Light common.
Power and
to
v'
aged production units; and the financial strength of its companies;
INVESTING!
positions in Auto¬
Furthermore,
paper
12 million
or
ducers.
Established 1930
Broadway, New York 5, N. Y.
1956'.
of
class invested exclusively
company
by 1965 is likely to increase by about 40%,
over
residual
shares,
According to Slayton Associates, domestic demand for
WRITE TOR
was
general market decline."
report
sponsors
paper
result, stock prices have showed rela¬
a
its
Chairman, observed that the sud¬
sizable price correction in
a
pretty well completed. As
to
preferred
6.70%
matic Vending
long
"By last August, the industry's prolonged inventory adjust¬
FUND
120
the
financial position of its leading companies.
INVESTMENT
mission
portfolio, and eliminated holdings
of Sinclair Gil 4%s, as well as
sas
"and
Inc.,
period of prosperity it has enjoyed has greatly strengthened the
A MUTUAL
of
small
;
,
field is
paper
Dec. 4 painted
and
Mathieson 5%s
1982, and Texas Eastern Trans¬
6Fss of 1978, Olin
formerly
was
Pipeline
Gas
Reports
Shareholders
added
has
Fund
Transcontinental
Under-valued Stocks
1957
Reports
Delaware
to
Thursday, December 5,
.
Manhattan Bond
By ROBERT R. RICH
Slay ton Points
.
Delaware Fund
branch office in the Rand Tower
under the management of Preston
.
^
.berof:.shares;.'.
:
'
•
k
.
18 CENTS A SHARE
Dividend frwiii Investment fnrmne
20 CENTS
A
SHARE
Di.strifiulififi nf llrali/eil Profits
Dividends and
December 24
at
4:40
24
to
Distributions
payable
shareholders of record
P.M., December 2,
Federal Street,
1957.
Boston
Number 5696
18G
Volume
.
.
The Commercial and Financial Chronicle
.
situation is likely to affect bond
ized
prices favorably and thus, the net
asset value of shares of Manhattan,
Bond Fund. "While it is too early
to appraise the long-term signifi¬
cance of the recent Federal Re¬
serve action, it should be observed
that the bonds now held by your
per
selling at prices which
provide possibilities for substan¬
tial improvement.
The average
fund are
of
price
market
the
bonds held
Manhattan Bond Fund on Oct.
1957 was 71%."
Net asset
value per share on Oct.- 31 was
$6.25, compared with $7.38 a year
by
31,
net
Total
earlier.
assets
with $22,-
compared
$18,855,312
were
594,864 on the same date last year.
report reminds sharehold¬
The
that "Income continuity is usu¬
ers
ally one of the chief objectives of
the bond investor." Over the past
dividends paid by the
fund from net investment income
have varied * within
a range of
decade,
payable
payment totaled
Dec.
will
the
be
-
period ended April 30, 1957 bonds
newly added to the fund's hold¬
ings included Columbia Gas Sys¬
tem Debentures, series H, 5%s,
stock
cash, at
option of the shareholder.
Ray McDermott & Co.,
Convertible Subordinated Deben¬
Oil
tures, 5s, 1972; and Shamrock
Corp., Convertible Subor¬
Gas
dinated Debentures, 5V4S, 1982.
Eliminated
cific
Southern
were
dividend
share,
per
A fou rth
of
cents
seven
payable
24
Dec.
to
shareholders of record Dec. 3, has
American
Foreign
&
Power
fourth
a
investment
net
at Dec. 3.
will
bring total dividends for the
to 25 cents, the same as paid
.1956 and
the second largest
payment
corporation's
the
in
Payment will bring the
cents, equaling
For those shareholdes who took
distribution
1956
ized
from
real¬
on investment in addi¬
shares, 1957 income from
the
growth stock mutual fund
will be 5.6% higher.
distribution of 35 cents from
gain realized
investments also
on
declared for payment Dec. 24
was
paid by the
ever
Maintenance of
46-cent
rate
crease
of
jrom
who
for
income
in
5.9%
from
the
took
of
1956
cents
40
realized
gain
also
vestments
to
been
was
a
in¬
on
declared
and
is
payable Dec. 24 to sharehold¬
of record Dec. 3.
Payment
will be in stock or cash, at the
ers
option of the shareholder.
from
Income
pressures
jeopardizing development.
Our experience of the
Year Plan
that
In
was
First Five
strikingly different.
although
period,
invest¬
ment in the economy was stepped
from about 5% of national in¬
to over 7% of national im-
there was little pressure
prices and balance of payments,
and, in fact, we asked ourselves
come,
on
time
from
us
Plan,
we
time
to
—
others
and
too—if, in spite of our
were
stretching
our re¬
to the maximum.
sources
Certain ciruinstances favored
of
utilization
the
which
pacity,
Debentures, 4%s, 1989; Tennessee
Co., Debentures,
than
414 s,
ment.
us
Food production
recorded substantial
Gas Transmission
1974.
increases, and
industrial ca¬
was
hitherto,
idle
added to the current output, more
proportionately
invest¬
to
With the commencement of the
M. I. T. Declares
Second Five Year Plan, the situa¬
tion has greatly
involved
133rd Dividend
Massachusetts
Trust
has declared its 133rd consecutive
quarterly dividend from net in¬
the
in
come
of
amount
lie
per
share, payable Dec. 24, 1957, to
shareholders of record Nov. 29,
1957.
This
payment will bring total
dividends distributed from net in¬
come
in 1957 to 41 cents per
representing
share,
highv record
new
a
of per share dividends
paid in
any
year from net income.
Last year's total payments from
net income were
40% cents per
.
share, adjusted for the three for
stock
in June,
split
1,956.
This is the 14th consecutive year
in which dividends per share paid
from
income have been greater
than in the preceding year. Total
distributions from net income for
1.957
with
this
payment will ex¬
$40,000,000, also the largest
amount for one year in the trust's
33-year history.
1
ceed
income
been
has
de¬
clared by directors of Broad Street
Investing
amount of 27 cents per
able
in
Corporation
Dec.
24
share,
the
pay¬
shareholders
to
of
record Dec. 3.
Payment
total to
87
in
the
28
years,
cents
the
bring
will
cents
a
diversified
1957
share, highest
mutual
fund's
and comparing with 86
paid in
Income from
1956.
Broad Street Investing will be 6%
greater
in
1957
shareholders
than
who
1956
in
the
took
for
1956
distribution from realized gain in
addHiqnal shares.
distribution
_
from
,
gain
changed. The Plan
capital intensive
foreign exchange component.
real¬
in
increase
Plan
incomes
the
in
The
First
period has given an impetus
private spending. Owing to the
nature of the agricultural cycle
to
India, food production, on the
other
hand,
has not
increased
in
the peak
above
reached in 1953-
inflationary
pressures. No one in any position
of
authority, and that includes
parties in opposition to govern¬
ment, considers that the difficul¬
ties the country faces can be shortcircuited by recourse to inflation.
Apart from the manifest social in¬
justice of any such course, it
creates unrest and the possibility
of political up-heaval. Both Gov¬
ernment and the central banking
generation
of
fresh
bank
term
-
to
is
are
be
of
but they have had to be
in spite
down much more,
drawn
our
recourse
to
the
Interna¬
tional Monetary Fund for
exchange
to
the
extent
foreign
of
$200
serious.
called
Prices inevita¬
would be regarded as
serious and
inflationary in a developed econ¬
omy is not necessarily so in our
conditions. A really good monsoon
and
consequential
improvment
the situation
markedly. In fact, during the last
few
weeks
prices have tended
downward, contrary to the normal
a
in crops can change
seasonal trend at this time.
In
•.
controlling inflation, the Re¬
serve
tional
Bank
must
weapons
the
use
tradi¬
of any central
banking
authority. It
the bank rate, carry out
may
vary
open mar¬
as in some of the
neighboring Asian countries or in
the industrially and commercially
quite the same
advanced
In
some
of
the
economy
has
situation not developed to any large extent;
the rise in there is no capital market; the
prices in the Western world, the banking system is, by Western
Suez crisis and the rise in shipping standards, rudimentary; and credit
freights.
But certain difficulties is comparatively unimportant.
In India the economy is more
are
inherent in the scope of the
Plan itself, although the target of highly developed, and we have a
increase in national income was relatively extensive banking sys¬
in itself modest.
In other words, tem and not negligible investment
what has happened has happened markets. Nevertheless, the frame¬
was
some
extent
aggravated
the
by
primarily because of the gathering
momentum of development, and
if it can be called a crisis it is a
the
of economic
put pressure
activity and to
speculative inter¬
on
national movements of money. In
India the developmental aspect is
less important than
no
latory
aspect.
Reserve
Bank
the regu¬
For
example,
has
an
the
extensive
able to achieve the
at which
very pace
drawing
down
we
exerting a disinfla¬
tionary effect, but we are reaching
limits in that direction, and the
inflationary implications of the
development program have be¬
come correspondingly greater.
In
such a situation, the purely com¬
mercial activities of holding es¬
and
share of the avilable
to
apex
coopera¬
below the bank
bal¬
has been
ances
state
gives
have been
foreign
our
quire
It
neces¬
expansion of investment and
output to match the investment in
the public sector. Up to now the
sary
sential
movement.
the
ing needs of the economy, with¬
out which the private sector would
works in very close association in
this field with
the
central and
governments and the whole
so as
At
pressure.
agricultural credit department and
commodities
tend
to
ac¬
disproportionate premium
to attract an unduly large
a
credit.
follows
It
resources
in
that
of
some
sectors of the economy credit must
be
in increasing mea¬
in some others, it has to be
provided
rates; and the volume of this ac¬
commodation is rapidly increasing.
sure;
With the spread between the apex
if it became
restricted and it would not matter
loans become available to cultiva¬
more expensive.
situation, in other words,
demands that monetary policy
tors
does not work in one direction biit
banks
the
and
on
primary societies,
today's bank rate at 614%.
It is hoped thereby to reduce
difficulty
one
and
chronic
Indian
of
The
in
directions.
several
to
tion
such
The
solu¬
situation is not
a
a
agriculture,
that is, financing by moneylenders
general tightening of credit or a
at usurious rates. The Bank is also
control.
accommodation - at "the
rate through cooperative
general relaxation; it is
granting
same
banks to certain important smallscale industries, such as hand loom
selective
have, of course, raised the
rate by
successive stages
We
bank
4%, but we have also
certain credit curbs in
weaving, which provides living for particular sectors.
The administration of selective
large numbers of people. Here also
the question of keeping the rates credit control has not, in practice,
structure which takes into account
work
in India is not
either in coverage or
comparable,
in the degree
integration, to that in the West.
Currency is more dominant than
:of
keep in mind certain other factors
that reduce its efficacy.
For ex¬
ample,
the
position
authorities
ment
is
Govern¬
of
somewhat
The variations are
unique.
con¬
siderable in volume in relation to
total
the
quantum
of
stocks and shares, and
3
from
to
imposed
securities,
commercial
bring down their advances in re¬
of - selected
commodities,
week after week, to a certain level
spect
below that reached last year.
practice there are limitations
of banks to exercise
detailed
control over scores of
branches located in widely sepa¬
rated parts of the country with
divergent economic conditions and
credit needs. The withdrawal of a
In
to the ability
inevitably imposes
with
gree
the
that
consequence
any
substantial change in the value of
Government paper
larger
which
imposes
than
strain
countries
in
and
industrially
are
much
a
com¬
advanced. Apart
from this, an increase in the bank
rate has the effect of increasing
the cost of Government borrowing
mercially
more
during the period of the Fflan, and
in view of the heavy program o>
Government borrowing
during thf
period of the Plan the cost of such
borrowing has to be kept at #■
minimum.
Role of Interest Rates
The
role
influencing
and
interest
of
ir>
flow of saving*
capital move*
the
international
ments
and
is,
of
course,
the authorities
recently
increased
in India have
the
rates
ol
interest in certain sectors, for ,ex*
with
ample, small savings, along
the bank rate. However, as I
earlier, we in
stated
India are equally
developmental
concerned with the
aspect and" are
tain
a
structure
anxious to main¬
of
interest
rates
which, while meeting the needs of
the
not
equilibrium,
will
at the same time be too
bur¬
shor,t-term
densome in the long run.
The
dilemma before the mone¬
a
of hardship.
But, added to the natural resis¬
from the constituents has
been a certain looseness in the
effectiveness of managerial con¬
tance
trol
over
a
sprawling network of
branches.
Apart from purely administra¬
difficulties, the operation of
selective control in India has
tive
problem of vary¬
thrown up a new
ing its incidence regionally
apart
the volume
country as a
whole. Moreover, it has been found
that if selective credit control is
from its incidence on
of
to
rates
notice,
certain de¬
line of credit, even at some
bills that circulate in the economy,
recognized
countries in the West. especially in the context of the
world-wide ^shortage
of capital
of the Asian countries,
monetization
million.
in
bly tend to take larger swings in diversified needs in the economy.
a predominantly agricultural econ¬
In considering variations of the
omy,
and the price rise which bank rate in India, we have to
operations, change the reserve
In
consequence, the index
of ratios of commercial banks, and
impose
ceilings on credit expan¬
food prices has risen by 11% since
sion by banks, either generally or
April 1956, and this has given rise
to
industrial unrest and unrest in respect of selected commodities.
The question is one of combining
among the salaried employees of
these various techniques to opti¬
Government.
The balance of payments situa¬ mum advantage.
It is necessary in this context to
tion has also taken a seriously ad¬
verse
turn.
We had expected to take into account some peculiar¬
run down our foreign balances by
ities of India's monetary and
Rs. 2 billion in the earlier part of banking framework, which is not
the Plan,
out
even
fluctuations
this
time, sufficient finance has
not be
coun¬
tries, the emphasis of monetary
policy is generally on the regula¬
tory aspect. The main concern of
central
check
same
of interest low is important.
Ar¬ proved an easy task. As the prices
rangements are also being made to of food grains in India have gone
determined to in¬ enable the Bank to take a prom¬
up more than industrial raw ma¬
sure
monetary stability, even if inent part in the refinancing of terials and manufactured articles,
this means a temporary setback in
medium-scale industries for med¬ we are at present operating a sys¬
investment.
ium periods. The problem in India tem of control principally in re¬
I mustmake clear that the price is thus not one of just raising or gard to food grains.
?
situation in India lias given us lowering the interest rates; it is
The general pattern has been to
some cause for concern but cannot
one
of
operating an integrated ask banks to raise margins and to
authority
ket
1954.
To
Broad Street: The 112th consec¬
utive quarterly dividend from in¬
vestment
more
investment, and it has a substantial
Investors
industrially advanced
tive banks at 2%
Results Under the Five Year Plans
hi the First Plan.
-
of Monetary Policy
cooperative
16
page
these
prevent
tral Railroad
Co.,
In
level
distribution
A
share
Impact
gradually to eliminate
asked
Railroad
to be provided to meet the grow¬
in¬
an
Approach in
Underdeveloped Countries
Mortgages, series A, 4%s, 2018;
Gulf, Mobile & Ohio Railroad Co.,
General Mortgage Income, series
A, 5s, 2015; The New York Cen¬
Louis
mal range of weapons available to
the Reserve Bank.
short
The Credit
come
Co., Refunding and
Improvement Mortgage, Series A,
4%s, 2013; New York, Chicago &
to
accommodation
Continued
up
-
regulate the supply of credit
limits; it does not de¬
stroy the effectiveness of the nor¬
the
will result in
the prices of consumer goods, and
it is of the utmost importance to
it only sets
payments at the
distribution from gain on invest¬
ments in additional shares.
gain
tional
A
payment which was the
shareholders
20%-year history.
the
1.956
the extent to which mon.r
on
payable
balanced mutual fund.
year
in
share from
a
income,
year's total to 46
the
Corporation. This
quarter
tions
41
etary policy of the central banking
authority can make itself felt. But
Dec. 24 to shareholders of record
largest amount
Cleveland, Cincinnati, Chi¬
cago and St. Louis Ry. Co., Re¬
funding & Improvement, series E,
4M>s, 1977; Denver & Rio Grande
Western
Railroad
Co.,
Income
1987;
A
declared
tional Investors
Co., Inc., Junior Debentures, 4.80s,
one
have
directors
Inc.
Fund,
been declared by directors ol Na¬
Pa¬
1981.
Reductions
made in previous holdings
Co., 4%s,
were
St.
Whitehall
or
dividend of 16 cents
National Investors:
quarter
3.
of record Dec.
shareholders
J.
1982;
of
shareholders
to
to
Payment will be in stock or cash,
at the option of the shareholders.
'■ %y....
fund's semi-annual report for the
&
cents
47
The distribution
paid in
3:, ■.' •.
During the six months since the
34.5 cents.
24
of
declared and is
was
of record Dec. 3.
only 3.5 cents per share per year;
from 37 cents in 1952 to 33.5 cents
in 1949. The 1957
investments
on
share also
(2465)
credit
the
for
succeed, some control over the
credit that could be made
total
available^ by the banking system
is
inescapable. *
Current Thinking
thinking
The
Two-Directional
in
India
is now
proceeding in twq directions.
Firstly, so far as selective credit
control is concerned in respect of
primary commodities, such as food
grains, limits to bank credit must
be fixed before the agricultural
season
starts.
This,
again,
is not
task as, in view of the
varying nature of crop seasons and
the difficulties of collecting cor¬
too easy a
rect statistics,
sible
to
it is not always pos¬
in advance the
estimate
degree of control that is required.
Moreover, w6 have to ensure
that the control does not operate
authorities in India is this: in such a way at harvest time as
bank credit; in 1951-52, when the the
very
considerable develop¬ to
crisis of stagnation.
deprive the farmer of a fab
It
is
a
fundamental
aim
of First Five Year Plan was inaugu¬ mental expenditure which is not
price.
monetary and fiscal policy in India rated, currency formed 67% of the immediately productive, on the^
Secondly, in order to impose ef¬
that such
inflationary, pressures ?total money supply, and today great river projects, the power fective control over total bank
after
six
that exist must be vigorously con¬
years it still forms the schemes, and the steel plants,, is
Continued on vacie 43
trolled and steps taken to avoid same "percentage. This sets limita¬ generating an upward pressure on
crisis
of
development
and
not
a
tary
42
The Commercial and Financial Chronicle
(2460)
The folkwing statistical
Indications of Current
latest week
Business Activity
week
AMERICAN IRON AND STEEL INSTITUTE:
Indicated
steel
capacity)
operations (percent of
Equivalent to—
Steel ingots and castings (net tons)
AMERICAN
42
Latest
Previous
Month
Week
Week
Ago
§72.0
8
month available.
or
month ended
condensate
and
gallons each)
runs to stills—daily
8
Dec
Gasoline
output
§1,843,000
Total
2,493,000
1.99G.00O
*1,846,000
of
.
(bbls.)
Nov. 22
6,832,370
6,831,020
6,765,675
7,195,350
Nov. 22
1i7,699,000
7,797.000
7,649,000
8,111,000
—Nov. 22
26,715,000
2.020,000
2,007,000
2,855,000
12,138,000
12,126,000
12,761,000
output (bbls.)
Nov. 22
refineries, bulk terminals, in transit, in pipe lines—
7,107,000
12,074.000
*7,618,000
6,981,000
8.458,000
;
oil
unfinished gasoline
and
(bbls.)
at
(bbls.) at
Distillate fuel oil (bbls,) at
Residual fuel oil (bbls.) at
183,390,000
*182,478*000
CIVIL
ENGINEERING
Nov. 22
32,942,000
33,503,000
35,486,000
36,305,000
Nov. 22
169,877,000
*171,940,000
V 175,469,000
158,871,000
59,286,000
59,867,000
59,465,000
45,745,000
Nov. 23
632,763
647,298
CONSTRUCTION
of
(no.
703,688
650,620
cars)—Nov. 23
573,999
570,575
592,853
620,670
AMERICAN
Federal
Pennsylvania
DEPARTMENT
and
STORE
SYSTEM—1047-49
ELECTRIC
Electric
$332,274,000
$370,736,000
169,814,000
165,063,000
223,819,000
189,585,000
208,913,000
167,211,000
146,917,000
187,533,000
Nov. 23
191,389,000
143,624,000
124,741,000
171,104,000
-Nov. 28
17,524,000
23,587,000
22,176,000
16,429,000
Nov. 23
9,320,000
*9,050,000
9,880.000
9,069,000
Nov. 23
490,000
*471,000
430,000
452,000
SALES
=
100
Nov. 23
INDUSTRIAL)
DUN
—
Pig iron (per gross ton)
Scrap steel (per'gross ton)
(E.
M.
&
(New York)
at
Lead
(St.
at
Louis)
-
(delivered)
'
at
250
254
5.967c
5 622c
2(5
'.
$66.42
$66.42
$66.42
$63.04
$32.33
$32.67.
$34.00
$64.33
Nov. 27
26.025c
26.600c
26.275c
35.700c
South
Nov. 27
22.725c
22.900c
22.175c
34.150c
East
'
13.500c
13.500c
13.500c
16.000c
South
13.300c
13.300c
13.300c
15.800c
West
10.500c
10.500c
91.000c
86.29
89.79
89.23
88.95
96.85
3
N
93.19
110.000c
New
89.09
83.95
88.95
96.69
Dec.
3
81.17
81.77
81.42
91.48
Dec.
3
86.78
86.65
87.32
95.32
Dec.
3
89.37
89.37
88.67
97.47
Doc.
3
92.50
91.62
90.77
97.62
Dec.
3
3.08
3.29
3.71
3.34
Dec.
3
4.45
4.47
4.49
3.95
ERAL RESERVE
As
Dec.
3
4.12
3.72
Dec.
3
4.25
4.28
4.29
3.82
Dec.
3
4.48
4.49
4.49
3.96
Dec.
3
5.09
5.07
4.31
3.98
5.09
4.02
Dec.
3
4.65
4.66
4.61
4.05
Dec.
3
4.46
4.46
4.51
3.91
Dec.
3
4.24
4.30
4.36
3.90
Dec.
3
389.4
388.1
384.9
439.1
250.778
240,710
243,205
Nov. 23
202,463
295,993
290,265
94
294,159
L.;Lb
97
260,253
94
388,664
433,323
UNITED
414,615
109.26
109.76
109.89
transactions
for
account
of
9
1,373,960
1,340.820
9
376,150
358,650
368,300
9
1,020,470
395,130
984,480
1,713,320
1,336,620
1,131,390
1,343,130
'9
2,210,230
2,081,620
9
269,070
9
485,270
103,800
256,260
9
55,600
87,140
223,190
49,400
Znov.
201,500
9
390,910
326,990
260,500
257,100
478,050
309,900
Nov.
9
470,810
_Nov.
471,192.
9
132,150
127,320
jov.
9
345,180
Nov.
390,795
9
477,330
518,115
804,235
628,841
Nov.
9
2,151,330
Nov.
2,081,082
9
1,986,945
Nov.
9
612,100
1,588,840
3.372,010
ZZZZZZZZInov.
1.576,775
9
603,680
2,760,225
2,200,940
1,936,11]
2,118,345
3,363,905
2,465,261
sales
306,560
\
of
short
Customers' other
Dollar
Number
of
mov
"
_
~~
~
Knv
.
Sales
Other
655,995
541.570
NEW
21,817.951
95,006.056
$501,328,013
8524,374,748
39,656,257
-
31,920,975
95,517.231
34,983,647
44,690.851
$535,228,128.
72,251,619
460,344,360
479,683,897
462,976,509
11,251
10,525
11.546
$738,000
$1,671,800
$749,800
$501,000
$574,000
6,757,656
11,100,179
FED¬
FEDERAL
YORK—1947 -19
(average
monthly),
unadjusted
125
manufacturing (production workers)
goods
;
_
—
manufacturing
Payroll
All
indexes
(1947-49
110
127
118
117
110
115
112
149
141
145
133
-133.
120
*130
;
—
(1947-49
1,264,337
1,857,790
1,490.392
$80,770,972
$77,141,062
1,370.166
912,896
851,266
27,646
27,829
32,680
7,683
884.080
823,437
1,337,486
905,213
$63,011,222
$44,633,922
$36,366,778
*12,976.000
-13,465.000
7,402,000
*7,384,000
7,788.000
5,505,000
*5,592,000
5,677,000
104.3
*104.9
108.9
161.9
*164.9
169.0
16,767.000
*16,884,000
17,238.000
Average ==100)—
manufacturing
Estimated
number of employees in manufactaring industries—
.'LL'ZX-.'L \>L
manufacturing 2222:1-2-1—
.
Durable
goods
Nondurable goods _______2.L-2l--~--.-l_
FABRICATED
9,679,000
*9,695,000
9,9.99,000
7,088,000
*7,189,000
7,239,000
STRUCTURAL
INSTITUTE
OF
STEEL
STEEL
(AMERI¬
CONSTRUC¬
TION)—Month of October:
Contracts closed
Shipments
YORK
of
(tonnage )—estimated
(tonnage)—estimated
STOCK
Oct.
31
firms
Cash
net
margin
debit
banks in
._
S
U.
Total of customers' free credit
balances—_
Market value of listed: shares
„1_
Market value of listed bonds
Member borrowings on
Member borrowings on
U.
S.
290.961
287,639
82,607,562
$2,824,130
$2,784,232
other
304,730
173,390
304L30
17~3Z390
589,640
Production; ( barrels)
Shipments from mills (barrels)
591,780
825.990
756,430
Stocks
CEMENT
(BUREAU
39,354
34.955
36,011
353.958
339,142
332.239
878,913
837,727
834.554
19G.674.919
201.622,023
211.627,311
99,014,578
98,481,183
100,290.666
issues—
104,908
*96,166
54,059
collateral—1_
1.847,500
*2,192,821
2,245,749
20,287,000
Govt,
18(7,480
PORTLAND
194,228
294,719
accounts—
balances--
to customers
hand and in
on
177.178
330,950
omitted):
carrying
customers'
Credit extended
...L.
_...
EXCHANGE—
(000's
180,480
g
12,907,000
Avge.=100i-—
182,280
„NoV.
—
__
'
OF
MINES)—
Month of August:
2
Nnv
sales
(at
end
of
Capacity used
(per
35,365,000
25,655.000
20,019,000
24.345.00G
30,055.000
33,324,000
17,068.000
104
67
111'
$796,235
$883,097
31.406,000
month—barrels)
—
0
{Jov" 2
ZZZZZZZZZZZZZZZZZZZZZnov'. 9
NEW
SERIES
—
U.
S.
DEPT.
AREAS
979,860
880,800
972,060
9,200.470
603,170
9,667,900
10,180,330
8,916,480
10,548,700
15,363,520
16,335,580
cent)
OF
9,519,650
~
~~
an
d~ f 0 o d s " ~
^Revised figure,
'Includes 1,068,000 barre
of Jan.
1, 1957, as
as
against Jan
1, 1956 basis
Monthly Investment Plaa.
IPrime Western
U.
S.
Insurance
companies
Bank
trust
and
Mutual
0„
ZZZ
comm0dZtlesothe~r~"foam "farm~
pound
OF
FINANCING
—
—
IN
HOME
NON-FARM
LOAN
BOARD—Month of Sept. (000's
Savings and loan associations
■
foods
Meats
ESTATE
savings
nf
£?* 1%
Nov- 26
117.8
117.8
91.7
.*92.1
Nov. 26
90.9
88.5
106.1
105.7
105.1
103.3
N°V' 26
91.5
90.5
90.5
79.F
125.6
125.6
125.6
124.2
Nov. 26
iOQ
lab,JbJ,090 tons.
sold on delivered
117.5
115.P
srsasea cn new annual capacity of 133,493,150 tons as
i Number
orders not reported since introduction of
t^umuer of
01 orders
basis at centers where
freight from East St. Louis exceeds
BANK
omitted):
i_
companies——
._1_
banks
Individuals
products
a
36,312.104'
42,319,363
16,351,496
96.376,945
$516,000
SECOND
DISTRICT.
OF
Employment indexes
529,150
commodities
one-half cent
73,323.093
544,221
Commodity Group—
All
•
,
SALES
RESERVE
Durable
REAL
sales
Processed
112,992,522
81,057,915
(SHARES):
PRICES,
Farm
122,725,740
86,297,437
YORK—
Nondurable goods
84,620
sales—
LABOR—(1947-49=100):
All
NEW
*
n
—
Total
OF
omitted)
182.280
STOCK SALES ON THE N.
Y. STOCK
AND ROUND-LOT
STOCK
TRANSACTIONS
FOR ACCOUNT OF
MEMBERS
round-lot
Short sales
BANK
(average daily), unadjusted
(average daily), seasonally adjusted—
Stocks, unadjusted
I
Stocks, seasonally* adjusted— 2——
_L.__
All
'
i
TOTA*iROUND-LOT
109,686,291
$25,795,169
119,710,777
BRADSTREET,
Sales
396,485
:
$52,566,539
$38,131,123
'
Other sales
!
~
Round-lot purchases by dealers—
Number of, shares
Total
148,240
.
shares—Total sales
Short sales
676,510
=
1,277,297
911.726
krnv'
_
dealers—
,
$52,512,111
^aies»
sales
sales—
&
Sales
1
Total
value
Round-lot sales by
53,242.014
OUTSTANDING—FED¬
(000's
31
RESERVE BANK
Member
_IZZZ_ZZZZnov\
orders—Customers' total sales
Customers'
76,106,620
38,131,333
IN THE
October
PAPER
Oct.
ERAL
As
_
Number
$32,099,OS9
87,060,337
Average--10(1—Month of October:
NEW
EXCHANGE —SECURITIES
EXCHANGE COMMISSION:
Odd-lot sales by dealers
(customers' purchases)—+
Number of shares
Nov
Dollar value
<cust^>'>,PT,•
of
(NEW)
All
TRANSACTIONS FOR ODD-LOT ACCOUNT OF ODDLOT
DEALERS AND
SPECIALISTS ON N. Y. STOCK
purchases by dealers
__
—
To Nov. 14 (running bales)
CAN
STOCK
Odd-lot
2
_
DEPARTMENT \STORE
members—
I
of
All
Nov.
I
sales
$26,294,519
COTTON GINNING (DEPT. OF
COMMERCE)—
1,526,520
Nov.
purchases
Other
.
City..
STATES—DUN
COMMERCIAL
1,334.200
Nov.
__
Total
2-
109.62
j;
Nov.
floor—
Short sales
842,818,000
.
DIVIDENDS—PUBLICLY REPORTED BY
U.
S.
CORPORATIONS—U. S. DEPT. OF
COMMERCE—Month of Oct. (OOG's omitted)
373,310
Nov.
sales
round-lot
Total
1,224,821,000 1,197,394.000
A;
AND PAYROLLS—U. S. DEPT.
LABOR—REVISED SERIES—Month of
October:
Total sales
Total
132,602,000
OF
I Nov.
s.
180,839,000
EMPLOYMENT
Total
Other
19,175,000
192,249,000
119,436.00')
CASH
89
Nov.
sales
Short sales
74,860.000
CITIES—Month
INCORPORATIONS
INC.—Month
p.
Nov. 23
Nov. 23
BUSINESS
,
-Nov. 23
—
DUN
—
States
98.88
MEM¬
.
93,750,000
between
LI
VALUATION
York
100.49
Short sales
sales
215,386,000
11,779,000
213,305,000
———
City—
New
91.77
floor-
transactions initiated off the
purchases
United
York
Outside
Total
Other
482,520,000
10,559.000
;_i__2—__
shipped
and
...
j.
464.590,000
41,129,655
94.26
sales
Other
credits.
—
95.77
,
Total
S276.642.000
281,130.000
13.833.000
v
_
—
91.91
period
the
:_2
—
92.35
89.51
Nov. 29
on
$234,091,000
-
.
—
96.38
100
transactions initiated
purchases
1-2- t $248,287,000
31:
—
3
Short sales
Other
Oct.
—_——_
_Dec.
;
sales
ol'
INC.— 215
3
purchases
Other
Total
|
BERS, EXCEPT ODD-LOT DEALERS AND
SPECIALISTS:
Transactions of specialists in stocks in
which registered—
Total
72b
"9S
BANK
___
Dec.
OIL, PAINT AND DRUG REPORTER PRICE INDEX—
Total
99
296
Central
90.86
I
OF
56
295
Central
89.125c
Doc.
4,360,923
OUT¬
RESERVE
Atlantic
88.875c
\
ACCOUNT
service—2
,
Atlantic
Central
—Nov. 27
Railroad Group
FOR
England
Mountain
Utilities Group
Industrials Group
TRANSACTIONS
October:
Pacific
Public
ROUND-LOT
in
2____
of
25.000,
—
=
359
RAILROADS—
ACCEPTANCES
stored
BRADSTREET,
13.500c
j.
AVERAGE
by
order (end of month)
011
YORK—As
New
14.000c
Aaa
1949
installed
PERMIT
10.000c
A
of
units
Total
26.000c
corporate
....
J4,629,062
INC.
.•
countries
BUILDING
10.500c
MOODY'S BOND YIELD DAILY AVERAGES:
U. 8 Government Bonds
(tons)
4,568,454
transported
October:
goods
foreign
10.000c
Railroad Group
Public Utilities Group
Industrials Group
Percentage of aotlvity
Unfilled orders (tons) at end
122,250!
AMERICAN
warehouse
26.000c
Baa
COMMODITY INDEX
NATIONAL PAPERBOARD ASSOCIATION:
Orders received (tons)
71,981
exchange
10.000c
—
MOODY'S
65,718
DOLLAR
on
Middle
averages;
Aa
6.532'
5,66(j;
1:
freight
Domestic
26.000c
-
8,450
14.100
91,600
undelivered
and
tons)—
shipments
J°v- 27
Aa
3,257
3,295
—
order
—
Nov. 27
i
corporate
Production
308
5.967c
Nov. 27
-
at
bond prices daily
S. Government Bonds
Baa
235
5.967c
Nov. 27
moody's
Average
Nov. 28
Nov. 27
<
(East St. Louis) at
Aluminum (primary pig. 99% )
Straits tin (New York) at
2,206
cars
delivered—
Domestic
12,075,000
QUOTATIONS):
at
Lead
Average
11,860,000
83,300
Imports
Exports
Based
12,136,000
89,900
4,767,600
4,661.900-
INSTITUTE—
STANDING—FEDERAL
149
Nov. 2G
Nov.
J.
Zinc
.
11,613,000
2(i
Export refinery at
U.
BANKERS'
copper—
Domestic retmery
,
127
therms)--—
CAR
&
BRADSTREET, INC.
tZinc
*142
9,200
locomotive units
Dollar
IRON AGE COMPOSITE PRICES:
Finished steel (per lb.)
METAL PRICES
155
Nov. 30
4,935,200
011
OF
of
Locomotive
New
INSTITUTE:
(COMMERCIAL AND
Electrolytic
$377,118,000
INDEX—FEDERAL RESERVE
AVERAGE
(in
OF NEW
(tons)
(tons)
(in 000 kwh.)
output
FAILURES
lignite
anthracite
Ago
4,842,700
freight
general
carriers
(U. S. BUREAU OF MINES):
Bituminous coal
EDISON
$378,727,000
Nov. 28
Nov. 28
;
municipal
COAL OUTPUT
Year
.*9,300
ASSOCIATIONS,
September:
of
ASSOCIATION
Nbv. 28
construction
and
Month
4,83 7,7 CO
(TRUCKING
Month
construction
State
Month
4,738,500
(M
cars
cars
—•Month
ENGINEERING
—
construction
S.
Private
Public
of that date;
Previous
of
—
hronth)-——1
oi
NEWS-RECORD:
Total' U.
are as
Latest
October:
new
fr^teht
Intercity
freight loaded (number of cars)
freight received from connections
Revenue
of
for
174,544,000
179,288,000
—Nov. 22
—
New
ASSOCIATION OF AMERICAN RAILROADS:
Revenue
either for the
are
sales (M therms)
RAILWAY
Month
Orders
gas
sales
gas
AMERICAN
Bacjtjpgwj
Nov. 22
Kerosene
Mixed
26,816,000
27,350,000
26,853,000
2,061,000
Nov. 22
Finished
of quotations,
cases
sales (M therms)
gas sales (M therms)
gas
Manufactured
—Nov. 22
fuel
Stocks at
(bbls.
average
Kerosene output (bbls.)—
Distillate fuel oil output (bbls.)
Residual
in
or,
AMERICAN GAS ASSOCIATION—For month
Natural
(bbls.)
average
Thursday, December 5,
1957
September:
output—daily
Crude
.
Diates shown in first column
that date,
Asm
101.3
.
production and other figures for th*
cover
Year
78.0
*72.1
on
PETROLEUM INSTITUTE:
oil
Crude
Dec.
or
tabulations
.
1
Miscellaneous
lending institutions
-
Total
ZINC
OXIDE
(BUREAU
of September:
Production (short
Shipments
Stocks at
*Revised
(short
end
of
figure.
OF
132,379
$779,455
139,445
378 221
440.618
121,439
136,769
162,571
288,479
310,316
343,153
367,677
275,209
387,503
$2,026,413
$2,208,459
$2,184,801
MINES)—Month
tons).
tons)
month
123,566
353,541
!
—
(short
JReported
tons)
by 334 carriers.
13,652
15,434
15.067
15,318
15,381
16,550
27,061
28,727
18.070
Number 5696
186
Volume
.
. .
The Commercial and Financial Chronicle
(2467)
capital will flow only if conditions
Continued from page 41
favorable
are
functioning.
its
to
satisfactory
context, the
this
In
criticism has been made that
The Credit
Approach in
Underdeveloped Countries
of the fiscal
India
having
are
some
adopted in
measures
adverse
an
ef¬
fect.
The Social Content
May
duce
I
in
revert,
him
to
turn
ask
for
his
on
again,
on
made
regarding
on
reasonable
a
investment;
such studies
as
profit
re¬
this
on
have
we
after
tax
net
worth, i.e., capital plus
free reserves, the record of India
is good.
'
The
these
issue
their
own
and
monetary
while
policies
which
inflation, they
can¬
impeccable
their
however
not,
this:
just
must, if only for
protection, pursue fiscal
would prevent
But subject to these conditions
policy,
with and subject to accepted interna¬
dealing
is
countries
43
possibly
hope
achieve
to
even
a
modest increase in their
consumption. While the ob¬ this
have to be set
point, to what I said earlier
tional standards of hospitality for
ject of imposing these taxes is in
standard of living without massive
to the accommodation provided by
my
speech, namely that we
the
central banking authority disinflationary, some of them are have to keep in mind the social the foreigner, particular facets of support from the West.
intended to make the tax system
with, perhaps, higher rates on ac¬
context in which events are hap¬ fiscal policy must be allowed to
The problem is thus not only
more
elastic
and to
promote a
commodation above defined levels.
pening in Asia.
'
develop on the basis of the social of sound
more equitable distribution of tax
planning and courageous
The extent to which the Reserve'
The historical forces which have
burdens.
~
needs of different countries; they internal
<
'
Bank e-xtends accommodation
been released as a result of the
policy, but also of the
The ; question' arises whether
cannot be set to a universal pat¬
could make a vital marginal dif¬
independence movements in many
adequacy of external resources. It
some
of
these
fiscal
measures
ference
to the 'total volume ofr
■
Asian countries are working in the tern. 1 v
;v;;
is in the mutal
credit, limits may
_
recognition of the
.
which'
bank credit.
Monetary control has to accord
objectives of
the
with
the
loss
a
criticized
as
incentives
of
Two
possibilities arise in this connec¬
tion.
It operates
necessarily
within the framework of the fiscal
ment.
been
to
could not have been avoided.
Plan
policies of Govern¬
and the basic
have
leading
direction
form
of
a
egalitarian
more
of
society. In giving shape
and form to these aspirations, gov¬
ernments cannot always conform
to the traditional
pattern followed
pricing policy of state in other countries.
commercial concerns.
The Gov¬
and other policies of Government.
It would be entirely proper for
ernment of India have recognized
For this reason and also for the
that such concerns must take a a foreign investor to ask, first of
reasons stated earlier, viz., stage
reasonable profit and thus raise; all, for political stability, and if
at which the banking mechanism
their own resources for further
he has the long-term vision, for
Has reached in India, restrictive!
development. The pricing policy
banking techniques have to play
this stability to be based on a
of state commercial enterprises is
a
somewhajt less dominant role.
On this the
thus .already a flexible instrument sound democracy.
than in countries where develop¬
of fiscal policy.
record of India is good. It would
ment is not subject to planned
Secondly, it has been argued be entirely proper for him, then,
control.
■'
that the tax on land,. called in
The Government of India are India the land revenue, the in¬ to ask for monetary stability. On
I alive to the dangers cf excessive - cidence of which has gone down a this, too, the record of India, in
deficit
financing, and in their great deal in the "last many years, spite of the pressures to which
anxiety to reduce it to the lowest should be increased. There are,
we have been subject, is, I ven¬
possible level have introduced a, however, limits to the extent to
ture to submit, good.
series of taxation measures, some
which, in a democratic country,
of which are both novel and con¬ the burden of taxation could be
It would be entirely proper for
troversial, and have exposed the increased in the agricultural sec¬
One is the
Certain basic conditions
tal— good
faith
treatment.
The
in the nature
vi¬
interrelation of these factors that
of
there lies real hope for a lasting
are
understanding between the West
are
fairness
and
rest, which
of details of fiscal
and the countries that are strug¬
policy are, I submit, matters in gling to raise the living standards
which there could be genuine dif¬ of their
people.
of
ference
opinion; these should
not be allowed to affect the
issue
international
of
major
policy
of underdeveloped
respect
DIVIDEND NOTICES
in
coun¬
LONG ISLAND LIGHTING COMPANY
tries.
DIVIDEND NOTICES
QUARTERLY
.
in
Government
certain
quarters tor.
to considerable unpopularity.
All
The
.
objective
taxation
policy
of
Finance Minister to be
:
To produce a
'
slow.
public revenues;
India, for instance, we were
well aware that we could not hope
provide incentives for larger
earnings and more savings;
To
set
before ourselves in the Second
Plan without a great deal of for¬
eign aid. .'Experience in the last
fairly wide field; and
To
make
sively
tax
more
yields progres¬
responsive to in¬
creased incomes and facilitate
the
orderly
development
achieve the target we had
to
restrain consumption over a
of
12 months has shown
that the need
for such aid is even
greater than
was
to the social
objectives of the
therefore, that fiscal policy should
Vt"
be
A wealth tax is being imposed,
also
tax
a
on
expenditure.
base
by
which
the
reducing
income
A
designed
so
so
tax
level
becomes
at
time such
a
in the industrially
at
is
particularly
as
the present,
A series of excise duties has
been
imposed in
advanced coun¬
of
and
one
count
the
great
that
are
of
three-quarters per cent was^
011
pany,
payable
collect
revenue
and
partly to re¬
It
of
dividend
share
the
on
this
has
Directors
of
a
per
day
Sixty
Cents
Capital
Stock
outstanding, payable December 24,
1957,
the
close
to
stockholders
of
business
on
of
record
December
at
holders
main
record
of
December
December
2,
technological
is also
taking
place.
recognized that foreign
to
de¬
de
Series
$1.25
Series D,
4.25%
$1.0625
Series e,
4.35%
$1.0875
f, 4.35%
$1.0873
Pasco
Amphenol Electronics Corp.
At
of the Board of Direc¬
meeting
a
of
tors
Amphenol
today
a
January
payable
Electronics Corpo¬
quarterly dividend
share
of thirty cents per
31,
1958,
of record at
the
to
the close of
business January 17, 1958.
The trans¬
be closed.
books will not
fer
declared,
was
of
Board
de
Cerrt>
Directors
of
Pasco
Corporation,
a New "York corporation,
at a
meeting held on December 3,
1957, declared a cash dividend
of forty cents (40y) per share
the Common
on
^o^umdit
'.on
A Diversified
Stock of the
payable on De¬
cember^, 1957, to stockhold¬
of record
ers
1957. The
Chicago November 26, 1957.
Final Quarter Dividends
Transfer Books will
be closed.
not
December 13,
on
Record
•
Michael D. David
PACE, Secretary
Secretary
Park Avenue
$.25 per share
—
—
$1.66%
per
share
period from May 1, 1957 to Dec. 31, 1957.
ft*ft
Dividends will be paid Dec.
I
30, 1957 to stockholders
of record at the close of business Dec.
12, 1957.
Wm, E. Thompson
|j
Secretary
Dec. 2,1957
of
S.,
JinancA
($1.75) per share
and of twenty five
on
fa.
the Preferred Stock
-
—
CORPORATION
been
declared,
payable January 1, 1958 to
of business on
THE
December 11, 1957. Transfer books will not
be closed.
CARL A. SUNDBERG
NOTICE
Weest Penn
Secretary
COMMON
DIVIDEND NO. 79
13,
26,
1957,
Dividend No.
Stock
have
been
declared.
Both
payable January 2, 1958 to
1957. The
s/tock transfer books will remain open.
holders of
are
record December 9,
Louis T. Hindf.nlang
Secretary and. Treasurer
1957.
197
quarterly
dividends
the board of directors of Allied Products Cor¬
poration, a Michigan corporation, declared a quarterly dividend of 40c
per share on the Common shares of the Corporation, payable December
27, 1957 to shareholders of record at the close of business December
November
Bank Note
day declared a quarterly divi¬
dend
of
Eighty
(80) Cents
dividend of 75^ per share
(1^2%) on the Preferred Stock for the
quarter ending December 31. 1957 and a
dividend of 30c per share on the Com¬
A
mon
On
The Board of Directors has this
Preferred Dividend No. 207
November 27, 1957
share on the Capital Stock
of this Company for the quarter
ending December 31, 1957, and
an extra dividend of Eighty (80)
per
Cents
Electric
1957
American
Company
Common
Michigan
Broadway, New York 6, N. Y.
ESSw*"
holders of record at the close
CORPORATION
Detroit 23,
the
cents (25<) per share on
the Common Stock of this Company have
ALLIED PRODUCTS
m
65
y
New York. December 4.
/ Ail\h
on
Secretary
A ; ^
Canada, Hawaii and Alaska.
DIVIDEND
share
Kenneth H. Chalmers
dollar seventy five cents
one
November 26, 1957
Over 1,000 offices in U.
a
Payable January 1, 1958
N. Y.
•
for the
the COMMON STOCK
Common Dividend No. 134
Dividends
S°/o Cumulative Preferred Stock
1957
share
No. 198
preferred DIVIDEND
quarterly
I
Street, New York 8,
a
$2.70 PREFERRED STOCK
INCORPORATED
30 Church
;
The Board of Directors has declared cash dividends on
—
December 10,
Payable December 21, 1957
N. V.
ALCO PRODUCTS
114th CONSECUTIVE QUARTERLY
Stock
Date
60 cents
67'/i cents
omeficiai 3mance Co:
Closed-End
Company
Investment
on
Common
Treiisuirr
£7ri-Continental
Corporation,
New York 22,
CASH DIVIDEND ON COMMON STOCK
$1.10
VINCENT T. MILES
Cash Dividend No. 150
300
ftft:.\
4.40%
Nov. 25,1957
The
FRED G.
ft:-:*:
Per Shore
5%
Corporation
Dated at
(ftfft!
the close of business
Series 11,
Series g,
JOHN R. HENRY, Secretary
DIVIDEND NOTICE**
v
at
December 13, 1957.
Series
Cerro
following quarterly
payable January 1,
holders of Preferred S tock
of record
President.
1957.
this Com¬
Checks will be mailed.
open.
1958
BRAGA,
1958 to Stock¬
the close of business
at
the
dividends
on
1957. Transfer books will re¬
12,
clared
1957.
16,
RIONDA
2,
January
shareholders
changes
order partly to
declared
quarterly dividend
the Preferred Stock of
clared
ration held
exceptionally high on ac¬
tries is
pay¬
able.
On November 26, 1957 a
STOCK
York 5
S T O C K
P K E F F. 11 R E D
to attract foreign
This
investment.
way
as
widen the tax when the demand for investment
is being sought to
Board
The
B.
CAN COMPANY'
New
The Board of Directors ha*» de¬
originally thought. It follows,
the economy with due regard
country.
AMERICAN
,
In
To
PREFERRED
Street,
Wall
106
of progress becomes painfully
pace
sizable addition to
'
!
are
foreign assistance the
substantial
follows:
as
that
attempting to carry out schemes
of development find that without
Government
stated by the
was
Asia
in
COMPANY
SUGAR
(60c)
DIVIDEND NOTICES
countries
DIVIDEND
THE FRANCISCO
Company
(incorporated)
■
—————
Quarterly Dividend
on
the
COMMON STOCK
37?0
PER
SHARE
share, both payable
January 15, 1958, to stock¬
Payable December 28, 1957
holders of record at the close of
Record Date Dec. 13, 1957
business December 16,
Declared December 4,1957
on
per
STUART
K.
1957.
BARNES, Secretary
WEST
Guaranty Trust Company
of New York
PENN
ELECTRIC
SYSTEM
Monongahela Power Company
The Potomac Edison
West Penn Power
Company
Company
The Commercial and Financial Chronicle
468)
.
.
Thursday, December 5,
1957
.
vuumuisus
BUSINESS BUZZ
circles
will
eral
in
investment
to
seems
act
be
to
market
the Fed
that
expand
credit
available to member
banks if that
becomes necessary.
But the
big
thing seems to be that the
Washington...
monev
Behind-the-Scene Inierpretitian*
/■
JLjL I l\A/
from the Nation'* Capital
have
managers
shifted
policy of firmness to
Y#"l Jf
/"W
JL \J U/
from
&
relaxation.
Convinced that conditions
gem
erally militate against anv
sudden
reversal
WASHINGTON. D. C.—Weeks
Vice-President Richard M.
ago
the President
of
States
for
as
Nixon had
small reception for
a
upstate New York friend at
an
his
but
palatial,
home
on
mortgaged
dead-end
a
street
Northwest Washington,
in
For the
benefit of arriving guests was a
note
the
on
the
bell
front
of
out
was
door
saying
order,
so
Inside the lovely
home in the
the
of
one
of the guests a young lit¬
ter of kittens.
In many respects
Nixon home
the
scene
was
no
different from that of the other
nice
homes
in
section
this
of
Washington.
Just
hower
had
suffered
his
crisis
health
Eisen¬
third
in
two
years,
much of the world's spot¬
light
is
focused
now
the
on
who
Vice-President,
young
taking
is
and more politi¬
on more
cal stature in the United States.
Mr.
Nixon,
who
old Jan.
years
becomes
45
and
recent illness cf
the Vice-Presi¬
the
President,
dent
remained
House
and
There
turned
the
White
him
to
consultation
Nixon's
duties
larged,
he
advice
rather than
to
Although Mr.
his
been
en¬
position
is
Nevertheless, the
unchanged.
he
are
for
House
for
have
says
White
offices
cabinet members.
facts
the
at
executive
hours.
staff
load off
Eisenhower.
During
the
the
of
more
President
greater role
assumed
a
last week
heart attack
than
he
on
Sept. 24, 1955,
While the third illness of' Gen.
Eisenhower
ated.
the
various
being
was
evalu¬
Vice-President
spent
eight hours at the White House
conferring with Sherman Adams,
Assistant to the President, and
others.
Later
worked
with
in
the
week
obscure
former
Governor
Look to U. S. for
Leadership
President
of
States
is
upon
Latin
American
looked
leader
in
the
United
by most
countries
the
as
Western
Hemisphere, and he is looked
upon in Western Europe as their
foremost leader, because those
countries look to Washington
for either economic or spiritual
guidance or both in their do¬
mestic and foreign affairs.
It
has
been
regarded
in
the
Nation's Capital for a long time
now
that
Mr. Nixon
is heir-
apparent
extremely
President
to
President
Eisen¬
responsibility.
Council
should
in
from his latest illness
Mr.
against
North
praised
at
the
to
the
means
to
House
quarter¬
affairs,
even a more
he
important
places
in
both
Eisenhower
months ago that
said
no man
history of this nation has
a
careful prepara¬
tion of carrying out the
duties
political
big budget is ready to
the
printers.
series
a
of
President
convenes.
one
in
the
important fig¬
world.
has become
The
the realization that he
might be
shoulder
to
upon
reason
important is
so
of
all
the
duties
of
the
President
should Mr. Eisenhower's health
further deteriorate.
Mr. Nixon has
gained in polit¬
fornia
today
has the political
distinction of having a Repub¬
lican Vice-President, two Re¬
publican United States senators,
17 Republican representatives, a
Republican governor and a Re¬
publican legislature.
When
terrible
a
political
breach threatened the Republi¬
party in California several
can
it
ago,
Vice-Presi¬
was
include
these
are
to
not
land.
de¬
Instead
Knight will
seek
the seat that Know land will
cate in 1958.
There is
political
going
no
of
can
his
on
load
in
is
the
because of the tre¬
mendous population gain. There
is already evidence that
reap¬
portionment, which will follow
decennial
give
seats
the
seats
census
California
California
in
in
seven
bonds
three
President
spotlight will be
His
years.
right
more
weight,
or
carry more of the
that now rests
utter¬
wrong, will carry
because
on
he
1
will
of
but
longer any question
no
that
the
investment
world
has accepted the Federal Reserve's
as
in
been
lowering rediscount rates
indicating a complete turnabout
in policy.
Ever
the President's
the
presidential
November,
taken for
1956,
granted
it
in
1960 will be Richard
credit
accommodation,
market, both new issue
for
bond
and
ahead
has
pretty
This
Virginia
Electric
million
price
yield
saw
the
of
been
much
steam¬
on
"full
bankers bid
&
Power
bonds
issue
for
Co.'s
4L>s
as
in
and
reoffering to
4.47%.
to
far
more
the
Federal
than
by
has done
shift
its position
against the wind"
"leaning
one of
"leaning
wind."
■
is
True
the
away from the
Open
Market
in the money market which
might
have made for some
tightening.
If
2
points.
What has happened in the mar¬
ket is best set forth by the change
in yield basis of top-quality cor¬
porate issues.
It is calculated that
return afforded
by such obli¬
gations is currently 30 to 50 basis
points above a month ago.
Astute
the
market
yield
observers figure
about
is
average
points higher.
While
institutional
investors are
of the
newer
in the field
are
ready
to look at attractive situations.
This
case
is
reportedly true
of the
have taken
in the
pension funds which.
on
recent years,
statute in
immense
and also many of the
trust funds.,
TRADING MARKETS
Botany Mills
Campbell Co. Com
Fashion Park
Indian Head Mills
United States Envelope
so
young,
apparently
the
Morgan Engineering
will
Cali¬
desires.
Carl Marks
20 BROAD
STREET
TEL: HANOVER
2-0050
These are very busy
days for
the executive branch of the
National Co.
Co. Inc.
Riverside Cement
mat¬
ters of immediate great
concern.
•
Flagg Utica
NEW YORK 5, N.
Y.
LERNER & CO.
TELETYPE NY 1-971
Investment
gov¬
budgetary
&
FOREIGN SECURITIES
SPECIALISTS
Executive Reports Being
Readied
\
40
of the
many
slowing down their operations to
A. S.
more
politics for many years,
with
to
Adjustment in Yields
college vote
increase from 32 to
he
brisk and the spon¬
close books for the year end, some
Thus
has
views.]
was
institutional investors.
Committee last week
own
and
yield
a
major
was on the
[This column is intended to re¬
flect the ''behind the scene" inter- buying side of governments. But
pretation from the nation's
Capital only to offset other developments
the "Chronicle's"
coupon
They were able to
report quick oversubscription.
A
few weeks ago, such a
yield would
have been virtually
ignored
from
and may or
may not coincide with
4J/2%
Moreover, bonds brought out a
fortnight ago, many of which
dragged, now are moving at pre¬
the
week
new
took
soring syndicate was able to report
oversubscription in short order.
institu¬
throttle."
The President's illness and reli¬
strengthened this belief.
to member
secondary,
ing
of
Bankers
four banks
tions
little
him for assistance
first
rate
M. Nixon.
on
the
million
4.47%.
miums of 1
since
cut their
$20
since
S20
to reoffer with
Demand
There is
responsibility
shoulders.
Ever
changed
This week Vir¬
market.
proceeded
the
ances,
of
to
ad¬
seven
powerful voice in
ernment,
of
Vice-President Nixon for the
next
issue
an
electoral
Because
so
the
has
being
J
,
ginia Electric & Power Co. brought
of
carry for the remainder of
term,
~
picture
the bonds with
the
were
19G0,
Congress.
gains
Vice-President
a
that
4.95%
to
the
How
important to the Na¬
Regardless of the amount
ance
California
stronger
grow
years ahead
va¬
question that the
voice
to
Both
health to deliver his
messages to
Congress about a month from
work
4.90
to
up
becomes increasingly apparent in
publican presidential nominee in
Know-
care
the market itself.
Washington that the leading Re¬
for
this time
funds suffi¬
of demand with
of
re¬
reelection
run
story
demand
supply
the
against Senate Ma¬
jority Leader William J.
the
offered investors.
If the President goes to Paris
for the NATO
meeting, certainly
he should be in
strong enough
has
contest
report.
1
tion and the world.
Governor
the
These
economic
election
Knight
below
a brief few weeks ago topquality
new
issues
found
the
going difficult even though yields
make
January after Congress
dent Nixon who stepped in and
served as mediator. As a result
Goodwin
somewhat
dog?"
a
action in
ical stature, not only
nationally
but also in his home state, Cali¬
a
to
now.
Calmed California "Quake"
be
little to spare.
a
is
the
cided
is
think that stock
the
State-of-the-Union message, and
called
in
is scheduled
go
there
that
realize that he has become
ures
he
Then
addresses
of the
most
will
the
seeking
Really Looking Up
each
shrug off the Vice-President,
if he
Nixon Well Prepared
major
high
that
securities
new
Only
to
fornia
at
in
some
indications
consequence
of
supply and
and
parties, who have been inclined
now
you
looking
are
time
same
cient to take
just what makes
I sold you
to
Many people,
during the next three
received such
conference,
gen¬
industry
the
with
reap¬
ship.
have
years
of
The
be
course
bolstering the
So it appears to be the old
decide
The
role in the affairs of the Nation
least.
the
that
buyers
White House for leader¬
39.
authority
President
will
industry partly of
the pace of recent years.
month
trip.
the NATO countries
overall
White
this
Eisenhower
world
the
will be a bit
conservative in its plans for
expansion in the months ahead
"And
free
reappraise
more
role of NATO in the defense of
the
to
view to
a
At
great
important
making the
would thus
in the
with
Vice-Pres¬
Paris
The
eral business picture.
volume
the
that Mr. Nixon will not receive
some 15
needs of
It
with
ditional
ident Eisenhower's quick recov¬
play
de¬
ident
at
so.
presumably the conviction
strong that the supply of credit
will be kept ample to meet
the
ident might represent the Pres¬
for
back
is
him
The
or
And
in
are
given
weeks
be
developed in
is
Vice-President.
has
four
last
opportunity
he has in Nixon that Mr. Eisen¬
hower
has
overall situation.
is because of the confidence that
will
Republican leadership
the country. Although Pres¬
will
an
role
active
Eisenhower
voted to the
hower's
ery
been
Nixon's
Mr.
one.
been
weeks
inet,
their
the
which
to
investment
borrower and lender have
had an
behalf of the President.
he
Adams and members of the Cab¬
The
since the be¬
has
appear
-
making for the kind of
market
Vice-President
policy, the
Supply and Demand
ginning of this country the role
of
new
are
Circumstances
of the world.
parts
For the most part
much
did when the President suffered
a
to
the
disposed to look
higher prices and lower
yields
Spring rolls around.
has
9, apparently is
headed for world leadership be¬
cause
he seemingly will take
more
good will missions
on
President
Atlantic Trealty Organization
President
after
serious
sent him
young
daughters of the Vice-President
and Mrs. Nixon was showing
some
The
has
please knock.
basement,
Nixon. The records support that
statement.
of
rank and file
United
Vice-President
has
as
of the
Securities
10 Post Office Square. Boston
-
Telephone
HUbbard 2-1990
9, Mass
Teletyp'
BS 69
@FedFRASER