The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
^7.—-»
ESTABLISHED 1S39
UNIVERSITY
OF MICH.GAN
9 1950
DEC
Btisikus mm
Reg. U. S. Pat. Office
:
EDITORIAL
The
the day are a sort of "reasoning by
where the correspondence is severely
are
of
Lenin
Stalin
argument
—
on
tion
on
the
was
If
or
Continued
to attack in any
fundamental
are
the
lar,
purchasing
such
power
currency
a
bringing
of
redeemable currency.
people the
The
direct
ernment's
control
use
of
the
the
-i
*An address by Dr.
National Committee
CONVENTION
IBA
ISSUE
of
rear¬
a
depend on its size,
growth,
its
of
it
the
of
effort.
The
important,
gov-
F
c„aK,
nation
speed
of
be
speed
page
affects
rigor
of
the
A slow rate
on
page
34
*Excerpts "from an address by Dr. Blough before the Finance
of
the American Management Association, New York
Conference
Spahr at Luncheon Meeting of the Economists'
Monetary Policy, N. Y. City, Dec. 4, 1950.
City, Nov. 30, 1950.
"Chronicle" of Dec. 14 will feature
the
Hollywood, Fla,
recent Annual Convention of the Investment Bankers Ass'n of America at
State and
Franklin
Bishopsgate, E. C. 2
8 West Smith field,
Municipal
Custodian
Funds,
60# Branches
inc.
^
E. C. 1
Charing Cross, S. W. 1
Burlington Gardens, W. 1
64 New Bond Street, W.
1
A Mutual Fund
COMMON STOCK FUND
across
Bonds
Canada
Monthly Commercial Letter
PREFERRED STOCK FUND
upon request
Bond Department
BOND FUND
TOTAL
ASSETS
£156,628,838
Associated Banks:
Glyn, Mills & Co.
Williams Deacon's Bank, Ltd.
THE NATIONAL CITY BANK
UTILITIES FUND
INCOME
(BALANCED) FUND
OF NEW YORK
Prospectus sent free on request
TheCanadian Bank
4(Sommme
Head
FRANKLIN DISTRIBUTORS, Inc.
64 Wall Street, New
York 5
Bond Dept.
Teletype: NY 1-708
New York
Seattle
We
maintain
Brown
Massachusetts
(all
Canadian
Underwriters and
Investors Trust
Distributors of Municipal
Prospectus from authorized dealers or
VANCE, SANDERS & CO.
(Incorporated)
,
Established
BOSTON
Los
Angeles
New York
Cincinnati
Chicago
Columbus
OF
THE
CITY OF NEW YORK
Agency: 20 Exchange PI.
Portland, Ore. San Francisco
Los Angeles
markets in
active
New
CANADIAN
Company
issues)
Superior Oil
bonds & stocks
England
Public Service Co.
J
An
interesting workout situation
DEPARTMENT
Goodbody
«
%
1699
&
Co.
ESTABLISHED 1891
MEMBERS NEW YORK STOCK
Denver
Toledo
Dottimox Securities
Grporatkwi
EXCH.
40 Exchange Place,
CLEVELAND
Chicago
New York
NATIONAL BANK
Office: Toronto
Company of California
CANADIAN
OTIS & CO.
Devonshire Street
THE CHASE
Steep Rock Iron Mines
and
Corporate Securities
Ill
the
Continued
28
economic
the defense
growth in the rearmament program might be matched
Scotland
OFFICES:
LONDON
49
the
to
which must be made.
possibility that
on
of
devoted
at which the program is executed is
because
economic adjustments
public purse.
'
United States Treasury, and
must
OFFICE—Edinburgh
Branches throughout
3
Roy Blough
problems
Incorporated by Royal Charter 1727
HEAD
the
and
is important be¬
determines what proportion
Size
by it.
power
ex¬
WEEK—The
effects
taken to meet the
V
on
NEXT
speed
cause
'■
Continued
30
remain
measures
It would force Congress, the
Ver-
page
that the
(3)
would
raised
the Federal Reserve banks to respect the
in March,
on
the
over
economic
■£»
under
to
tension
mament program
It would re¬
power
spending; and
international
of our dol¬
should be
our money managers
general settle¬
icy was based—and I think neces¬
sarily based—on the last assumption.
redeemable
a
a
high for a long period of time with¬
out major war but with a high level
bf defense expenditures. Official pol¬
would have the benefits of
currency
little
military
-
VV
institution
and
war,
open
achieved, which would per¬
mit major reduction in the level of
offered
abolished.
The
that
(1)
ment be
proper
of
subside
would
correctives:
(1)
Since an irredeemable cur¬
rency is one of the most basic causal
factors in the profligate spending by
our
government and in the decline
as
'
proposals
development;
erupt into full-scale
the reck¬
way
obstruct their fundamental causes.
The following
and is the head and front of
Royal Bank of Scotland
are
we
uncertain
with three possible lines
international tension would
calling for a maximum
military effort accompanied by ex¬
tremely large government expendi¬
tures; (2) that international-tension
of
the desirable restrictions imposed by
1935, that Adolph Hitler, in defiance of the
<
The Korean attack of last June presented an
spending by our government, rising prices, and the
reciprocal fall in the purchasing power of the dollar,
it follows as a matter of logic that we should remove
store to the
was
increased.
be
future in international relations,
less
this point.
"appeasement" blunder. It
should
(4) independence of Federal Re¬
serve
from government fiscal and debt management
policies; (5) funding of large part of Federal debt in
new consols bearing high enough interest rate to induce
non-bank investment; and (6) curtailment of direct
government lending.
notion, and not the act of yielding
there,
a
civilian demand, holds
notes
ercise
or
balance between civilian supply and
(1) incomes should be prevented
from rising; (2) there should be imposition of credit con¬
trols, so that past savings and newly created credit
should not be permitted to be spent; and (3) taxes
|
of deposit currency;
a
here
retard further depreabolition of irredeemable cur¬
(1)
ROY BLOUGH*
Blough, in stressing major economic problem, as
maintaining
(2) repeal of authority of Federal Reserve to
against government securities; (3) limita¬
monetization of Federal debt through creation
What Is Appeasement?
This foolish
dollar:
rency;
issue
analogy"
leaves
Dr.
Monetary Policy
on
of
said, perhaps,
there
Committee
ciation
likely to be sated or even tem¬
and
for much
^
Dr. Spahr proposes as measures to
—including the history of the Czars as well as
room
Vice-President, Economists' National
Executive
pered by concessions here and concessions there.
In the light that history throws on such matters
that
By
Member, Council of Economic Advisers
Professor of Economics, New York University
limited.
In the popular mind, "appeasement" is linked
chiefly with Munich. Munich, however, was but
one of a
long series of occurrences which together
constituted the "build-up" for World War II.
Through them all it was folly to suppose that
"peace in our time" was promoted by yielding
and yielding to an individual and a "movement"
which really was insatiable in its appetite for
expansion and domination. It would be equal
folly to suppose at this time that the ambitions
of the Communist world (or better
Stability—An Urgent
By WALTER E. SPAHR*
*'
Copy
a
And Difficult Task
Dollar Depreciation
"appeasement" is now playing so
large a part in the discussion of the Korean situ¬
ation, and threatens to have so great an influence
upon the decisions of political leaders through¬
out the world, particularly in this country, that
it would be well at this point for the thoughtful
man to review the history
of the term and the
circumstances which gave rise to its widespread
use.
When such a study is made, it is quickly
found that no small part of the arguments of
term
the Kremlin)
Price
How to Retard Further
,
We See
As
Price 30 Cents
Neu( York, N. Y., Thursday, December 7, 1950
Number 4966
Volume 172
Dallas
Buffalo
115 BROADWAY
105 W.ADAMS ST.
NEW YORK
CHICAGO
New York 5, N. Y.
IRA HAUPT& CO.
Members New York Stock Exchange
and
other Principal Exchanges
111 Broadway,
WOrth 4-0000
Teletype NY 1-702-3
WHitehall 4-8161
Boston
N. Y. 6
Teletype NY 1-2708
Telephone: Enterprise
1820
The Commercial and Financial Chronicle
2
.
.
Thursday, December 7, 1950
.
(2178)
TRADING MARKETS IN
American
The
*
Express Co.
A continuous forum in which, each
Southern Production Co.
in the investment
Puget Sound Power & Light
R. Hoe & Co. Com. & Class B
Public
Central
Security I Like Best
week,
(The articles contained in this forum
they to be regarded,
are
intended
not
are
particular security.
a
be,
to
Alabama &
and
Selections
Louisiana Securities
—Herbert
E.
Manager,
nor
Corporation
Gas
Commonwealth
offer to sell the securities discussed.)
as an
Participants
Their
group
Coburn
Greene,
Resident
&
Middle-
Bought—Sold—Quoted
brook, Inc., N. Y. City. (Page 2)
New York Hanseatic
HERBERT E. GREENE
Resident Manager,
Corporation
pas +has recently acquired an in-
Coburn &
Middlebrook Inc
Miaaieurook, inc., New
mew
Commonwealth Gas
York 5
Teletype NY 1-583
have
Detroit International Bridge Co.—
terest ln approximately 5,000 acres
York City
ionc v.uy
^
Corporation
-
Cottageville
good reason to characcapital stock of Com-
Schaub,
P.
Harry
in which
area
§Tr|NFP ROUSE & CO
'
President,
Harry P. Schaub, Inc., Newark.
has been completed
Members New York Stock Exchange
Members New York Curb Exchange
N. J.
it is drilling two exploratory wells.
One of these
,
I
West Virginia
taking place.
now
Established 1920
BArclay 7-5660
Forum
of experts
and advisory field from all sections of the country
participate and give their reasons for favoring
Utility Sl/2/SZ
120 Broadway, New
different
a
i:
This Week's
25 Broad
(Page 27)
HAnover 2-0700
good producer. These wells
relatively shallow and inex-,
monwealth
Gas
Corporation as
pensiVe to complete. It is too early
the security I like best for it has to estimate the final outcome of a agrees
to take a minimum of
been
very
thorough drilling program in this 50 million cubic feet daily com¬
kind
to
me
field.
mencing at 7V2 cents per thousand
over
the past
If
successfully carried out it cubic feet and increasing-lucent.
15
years.
It
l
could become a substantial income per thousand cubic feet in each
has
made
;/I■; -' producer, as industrial gas in this subsequent five-year period.
In
many
friends
fparea sells -at approximately .,30 addition a minimum of 25 million
cubic feet daily must be paid for
for me during
cents per thousand cubic feet,
the
terize
Specialists in
as
a
>
St., New York 4, N. Y.
NY 1-1557
New Orleans, La. - Birmingham, Ala.'
are
Mobile, Ala.
Direct wires to
our
branch offices
••
Rights & Scrip
.
Since 1917
this
period.
McpONNELL&rO.
Members
New
York Stock Exchange
New
*
York Curb
Tel.
postwar
ex-
of New York, liquefied petroleum
the
been
Unionville
1
<
of Cortland, Rome and Horse- per thousand cubic feet with in¬
heads, N. Y.; and Lancaster, Lew- creases every two years over a
iston, Burnham, Telford, Chambersburg and McKee, Pa. These 20-year period.
In order to process the wet gas
transmission lines extending
to two companies have a sound value
from
the
Hico-Knowles *Field
practically every large city in the in excess of $5,000 000.
phases, notably the development of huge gas reserves (over
180 trillion cubic feet) and the
construction of a vast network of
its
American Air Filter Co.
Common;
Churchill-Downs Inc.
Stock
Dobbs-Houses Inc.
country.
Common
The ownership of Monla (100%)
•
BANKERS BOND ^
Incorporated
Kentucky Home Life BIdg.
LOUISVILLE 2, KENTUCKY
1st Floor,
Bell Tele. LS 186
Long Distance 238-9
Bought—Sold—Q uoted
The next decade from
5y« SnnlS*
f
the
for
contract
Nat'1 Assn.
of
Securities
Dealers
Inc.
Tele. BS 142
Tel. HUbbard 2-5500J
Portland, Me.
Enterprise 2904
Hartford, Conn.
/.
Enterprise 6800
•
.
Open End Phone to New York Canal 6-1613
Balatoc Mining
Co.
Keyes Fibre Co.
Mexican Lt. & Pr. Co.
Norma Hoffmann
Bearings Co.
plant
Bought—Sold—Qi^ted
operation.
'
probably see it double
^ \
,
Truly this is a growth in- ih°se of 1948 as a result of new
Mississippi River Fuel is now
c«i,rfa
ii
a(,acfmfiH
sales contracts made with Southdustry so<and and
^"S*f
ern Carbon Company and Therm- taking close to 70 million cubic
will
1945
*
75 Federal St., Boston 10, Mass.
Southwest and Feazel jointly con¬
agement
.
J. B. Magniie & Co., lac.'
Members
industry today has over 50 while of no great immediate imstructed
a
gasoline
extraction
million
customers,
over
20,000 portance as an income contributor
plant at a cost of $4,200,000 de¬
users, a quarter of a million miles might have important long-range
of pipe lines, far in excess of our prospects. From a modest start in signed for the processing of 100
railroad mileage.
Production of 1947 wrth four gas well comple- to* 125 million cubic feet daily.
natural gas has been quadrupled tions, the company had increased
Commonwealth Gas has the man¬
during the last 20-year period, the number of Productive wells in
1925-1945.
i
•,
The
m
•
:
.
dedicated.,to
is
area
and necessary appliMississippi River Fuel.Co. under
ances are supplied to over 25,000
retail consumers in the vicinities a contract starting at 11V4 cents
H- E. Greene
gas
business in all
Capital
,
The gas from the North Ruston-
(propane)
pansion of the
natural
,
.
and Atlantic States Gas Company
i
Manufacturing
,
has
period
REct'or 2-7815
*■'}
;
major
developments
of
the
Exchange
BROADWAY. NEW YORK S
120
West Virginia's investment in even ii nox taxen. The contract
the propane gas distributing busi-; also contains provisions protecting
ness has developed
into, quite a the sellers against future higher
sizeable operation.
Through its prices. Texas Eastern is to pay
two subsidiaries, Atlantic States comparable field prices within a
Gas Company * of
Pennsylvania 100 mile radius.
-
r
the
of
One
outstanding
Bates
again.
"V.
jT—r
T no
U. S. THERMO
will
cta+iirA
stature
CONTROL
atomic
in
doubt continue to grow in
thp
arnnnP
among
ndus.
major
e
1S
—
subsidiaries
wholesale
Analyses
on
Request
directly, a5+in the
azje
Ulj
West Virginia and
to utility
active
earnjngs
mogt
oyer
Field
wholesale
in the
also carries
and
to
acreage
gag
still produces and
at
gag
com-
Ug
of
Monia
sells
Monroe
on
a
feet
North
Ruston-Unionville
which
of
is
being
small
from
45
welJs
in
the
in
ed
a
the
Ora
liquefied petroleum (propane) and
Louisiana. ■!.
necessary appliances to a growing
number of some 25,000 customers
far the most important sub- hydrocarbons running
sidiary of Commonwealth Gas is 7,000 barrels per day.
the
Southwest
Gas
Producing
As respects reserves,
148 State St., Boston
.
N.
7-0425
:
Y. Telephone
9, Mass.
Teletype BS 259
:
in various communities in eastern
Pennsylvania
York
WQrth 4-5000
r
Purolator Products
Smith & Wesson
Hytron Radio & Elec.
gas
where
and southern New
artificial or natural
WHitehall 4-2530 Teletype NY 1-3568
pames are as
which
at
half
j
and
Y
n
.
fieids
term
pany, is engagedin the production
and
sale of natural gas
in
the
Appalachian
such
as
js
soid
contracts
to
PL., NEW YORK 5, N. Y.
DIgby 4-4950
Teletype NY 1-953
under
long-
Texas
Gas
area
to
contract with Southwest and W. C.
Feazel until 1967 to Texas Eastern
industrial
Transmission
Internatwnal Nickel
Company
basis of 50 million
•
on
the
cubic feet per
•
'
*
-
Amount of
Stock Owned
States
States
Gas
Gas
Co.
Co.
98.-33%
of
of
(c) Monickel Gas Co. (95.28%)
(2) Carbons Consolidated, Inc
made
by
500
to
billion
cubic
feet,
com¬
the
but
of the
higher figure.
Henry B.Warner & Co., Inc.
Members
Earnings for 1950 will
very
like¬
123
Phila.-Balto.
680
share which is
per
increase
reported
over
for
the
Phila. Telephone
Exchange
Bell System Teletype
PH 771
New York City Tel.:
BOwIing Green 9-4818
a
620
1949
the
and
beginning of operations out¬
The
common
BUY
wealth
Gas
Corporation
purchased at
a
U.
S.
Pa.
N
(100%)
Y.
(100%)
•
Producing
BONDS
be
can
price below what
Company.
this stock is
tive,.
a
cheap- and
future
I feel
OVER-THE-COUNTER
that
INDUSTRIAL STOCK INDEX
medium
safe
to
participate
11-Year Performance of
in
35 Industrial Stocks
growth of the natural
industry. These shares at
Gas Co., Inc
100.00%
(4) Southwest Gas Producing Co., Inc.—;
56.85%
Capitalization includes $1,900,000 loan at 3.4% to Chase
National Bank, due April 1, 1951, and 918,680 shares of cap¬
ital stock of $1.00 par value of which Commonwealth owns
ent
prices,
represent
N. Q. B.
satisfactory, attrac¬
through .which
the
pres¬
BOOKLET
near
the all-time high,
sound
value
and
of time.
'\
•
Incorporated
46 Front Street
Continued
on
REQUEST
National Quotation Bureau
-
course
ON
give
promise of real capital apprecia¬
tion in the
SAVINGS
stock of Common¬
gas
522,300 shares.
Stock
South Broad St., Phila. 9, Pa.
PEnnypacker 5-2857
ly exceed $1
76.20%
(3) Monla
I
Chicago
esti¬
many
Company and Union Carbide and day minimum and 75 million cubic
seems to be its sound liquidating
Carbon Company.
fee^
maximum
daily
delivery.
value and at only a little more per
Although production in this area About two-thirds of the deliveries
has been steadily declining in re- are made by Southwest andi one- share than the market value of
cent years a new development is third
by Feazel. Texas Eastern its holdings in the Southwest Gas
(a) Atlantic
Phone
Ames, Emerich & Co., Inc.
West
(b) Atlantic
NEW YORK CURB EXCHANGE
as
The &as from Monroe and Lis- 1948/respectively, which reflected
|;)0n
.
(1) West Virginia Gas Corporation!
to EXCHANGE
been
high
as
management is thinking in terms
and
,
NCW YORK STOCK EXCHANGE
have
feet
liquid
of
petent geologists varying from 200
North Ruston-Unionville
com-
•
mates
cubic
recovery
substantial
Securities
MEMSCRS
pro-
Common-
125,000,000
with
Hico-Knowles-Dubach
'
a
controlled
follows:
Over-The-Counter
ShmkankG
present
of
exceeding
daily
Direct Wire Service with
side the Monroe-Lisbon areas.
A
Virginia Gas Corpo- Transmission
Company.
Producration
directly and through its tion from Hico-Knowles-Dubach reasonable
expectancy
for
1951
subsidiary, Monickel Gas Com- area j[s dedicated under a joint
would be at least $1.50 per share.
users
Primary Markets in
•
over
consisting solely of 966,326 comman shares, with no bonds or
pre-
The
37 Wall Street, New York 5
Northern
earnings.
Southwest is
The corporation is a growing engaged
in the production and
enterprise of much promise, from sale of natural gas in four importhe viewpoints both of assets and tant producing fields in Northern
earnings.
The
management
is Louisiana:
thrify, dynamic and capable.
Monroe
The capitalization is simple,
Lisbon
Affiliated
V0GELL & CO., Inc.
in
in
wealth's
Petroleum Ht. & Pow.
Southwest Nat. Gas
oil 'field
Company
vides
is not available.
operation
oil
Hico-
capacity rate of operation
profitable
owned subsidiaries distribute
TeL CA.
processed
Knowles-Dubach area, has result¬
t>ut
Louisiana.
all
area
Milk Street, Boston 9
Tel. HUbbard 2-6442 Teletype BS 328
plant. This, together with the gas
Two wholly
pames in
31
daily from operations in the
through Southwest's extraction
time goes on.
as
Carbons Consolidated has turned
production and
of natural
distribution
to industrial companies in
?i?S
an
Louisiana and might , develop siz-
..
Commonwealth Ga^ Corporation
SIMPLEX PAPER
The
Company.
k carrvine nut
eXpjoratory program in Northern
tries of the nation
n
Carbon
comnanv
company IS Cdriymg OUl dll dLUYt
inrill«-
mainr
Ralph F. Carr & Co., Inc.
page
27
NewYork4,N.Y.
Volume 172
Number 4966
Economic
.
.
The Commercial and Financial Chronicle
.
Price
manhour and
—Sumner
_
Excess
cludes neither indirect
or
and holds investing in
Business
in
the gravity and magni¬
tude of the military and economic
Asia,
The
Outlook for
for
havebeen
greatly under¬
however, cannot permit the stand¬
I
may go a
step
further
and
that
say
the
of
nature
The United States,
ard of living of its
people to sufindefinitely because Of the
necessity of maintaining a large
military establishment and giving
help to other countries. That
be
bound
to
with
economic
discontent
problems
onfronting
the
nity has not
\l\
\ I
.
•>
been
\
clearly
This
see n..
NX
:1
commu¬
standard
start
of
why
an
v
...
the
magnitude of
has not ■ been con¬
.
problems
fined to any one part of the com¬
munity. It is true of businessmen,
trade union leaders, and govern¬
alike.
officials
ment
has
It
been
evidenced by too little discussion
of the need of increasing the pro¬
ductive
capacity of the
economy,
by proposals to control prices by
limit
would
that
means
the
ca¬
pacity of the economy to finance
increases in productive capacity,
fey
^nd
the outcry of some business
labor groups against meas¬
ures
for
designed to limit the demand
goods.
consumer
to
expend
lavish
The
would
be
rent defense and war needs. Next
that
the
*
primary economic
problem is the one of increasing
the
productive capacity of the
This
a fairly rapid rate.
spending substantial
at
economy
means
a
on
annual
dollars
expenditures
rate
of
that
of
because
one
30
quarter,
effect of the Korean
War has been to step up
First Year of Midwest Stock Exchange Successful
We Must Take These Things Into Account!
21
(Boxed)—__-i
22
..X
■•.
:
Regular Features
Skiatron Corp.
As We
See It
Cover
(Editorial)
Bank and Insurance Stocks
Continental
—I
18
Coming Events in the Investment Field
15
Canadian Securities
Copper & Steel, Inc.
.Dealer-Broker Investment Recommendations
.
-
'.
Einzig—"British Rearmament and U. S. Aid"
prices, purchases of industrial
second
slightly
and
1%
" than
5
Our Reporter's Report
—
strength
of
countries grows, the United
vulnerable to
States will become
attack.
A
second
reason
is
that
in
37
Public Utility Securities
comparison
to undermine
23
to
weaken
us
by inducing
overextend ourselves,
the duration of the contest with
Continued
us
to
it is merely
on
page
33
,
States
Savings and Loan
League,
Washington, D. C., Dec. 1, 1950.
on
on
Corp.
Associated Dev.
& Res. Corp.
2
5
The State of Trade and Industry
(Walter Whyte Says)
—
GOUL.ET
30
25 Broad
40
Washington and You
&
CO.
Street, New York 4
Tel. WH 3-6816
1 These
figures are based
ally adjusted annual rates.
request)
Gerotor May
35
Like Best.L
Tomorrow's Markets
(memo
26
-
Securities Now in Registration
*An address by Dr. Slichter before the
United
Salesman's Corner
The Security I
Kold Hold Mfg.
I
27
Railroad Securities
Securities
our
institutions and that is attempting
Trading Markets in=z
27
Prospective Security Offerings
1948,
11.5% in 1949, and 10.4% in 1929.
When the country is engaged in a
is endeavoring
39
Our Reporter on Governments
conflict with another country that
the industrial
'
'
high by historical standards. They
were about 12.6%
of the net na¬
is low-for the
vyhile
Exchange PL, N.Y. 9
19
Observations—A. Wilfred May
pur¬
construction
more
product,
40
Teletype NY 1-1825 & NY 1-1826
.
were
MACKIE, Inc.
higher thah
quarter
industrial
&
HAnover 2-0270
24
—
News About Banks and Bankers-—
with 11.0% in 1947, 11.6% in
other
Singer, Bean
6
in
of
j
17
From Washington Ahead of the News—Carlisle Bargeron
equipment in the third quarter of
the
Soundcraft, Inc.
•
14
tional
several years
Reeves
8
NSTA Notes
14%
Mfg. Co.
40
Business Man's Bookshelf
expendi¬
will be improved if
the United States is strong. If out¬
lay on plant and equipment here
next
Teco, Inc.
12
Bates
plant
is that the chances of avoiding a
war
Direct Wires
17
Mutual Funds
over
Teletype NY 1-3370
BO 9-5133
32
were
NeW York 6
Broadway,
*■
higher.* Nevertheless, the second
quarter rate of expenditures were
general
61
Contest Awards- 16
Indications of Business Activity
industrial
on
productive capacity of the econ¬
omy
of such vital importance?
this
Incorporated
15
and
equipment. For example, after al¬
lowance is made for the change
tures
Reilly&Co.
Payment Plans of
Philadelphia and Los Angeles
or
chases
for
J.F.
:
'
■
billion
in
reasons
-
on
Why is maintaining at least a
moderately rapid increase in the
principal
conclusion. One
:jc
Senator Frear to Address N. Y. Security Dealers Association-_
about as
high as they were during the sec¬
ond quarter of 1950. During the
second quarter they were running
an
22
'
Elmer E. Myers Presides at Veterans' Essay
equipment
ing plant and equipment.
several
%
satis¬
a
1950
are
#
satisfactory
a
equipment? I think that
and
Not
Mutual Funds
factory target for the time being
plant
Jack & Heintz
us
dmounts'on replacing and expand¬
"There
?
■
rate of expenditures on plant and
would be to keep
Smith & Wesson
21
Situation—But Longer Work Week
,
What
20
^
Edward E. Mathews Defends Periodic
nearly 33 billion in dollars of the *
primary economic problem third quarter of 1950. That would
confronting the
country
is, ot be lower than the present rate, •
to
Recent Corporate Profits
Needed!—Hon. Maurice J. Tobin
The
cur¬
Tight Labor
Alegre
Sugar
to
way
II
to produce enough for
on
Punta
20
Winter Business Outlook—Roger W. Babson
sHay©
defeat
avoiding
unnecessary expenditures (prima¬
rily a matter of wise diplomacy)
and partly by building up
our
productive capacity.
at
,
resources
our
scale.
forcing
Remington Arms
18
;
,
that strategy is partly by
in
course,
:
tive
weaken this country by
and
Liberty Products
12
Miller
increase in produc-«
nature
Prof. S. H, Slichter
see
11
Opportunity Through Full Development
Arthur W.
new
clearly the
to
MARKETS
9
___
Balanced Budget—Wesley Lindow
a
Some Realistic Observations
capacity is vital is that the
strategy of Russia seems to be to
failure
8
.—Cyrus S. .Eaton—:
institutions.
levels is to
keep up a high rate of outlay on
and
equipment.. A .third
plant
to
7
What Lies Behind Sapping of Dollar's Strength
the drop in the.
living short and to
it rising
reason
Telephone: WHitehall 4-6551
It Seems!—Curtis ter Kuile
as
much
arouse
our
Dark
Canada's
.
The way to keep
c
A
m-.
STREET, NEW YORK
WALL
_
fer
would
Economy
6
Requirements for
as
one
Rearmament
Securities Dept.
Obsolete
99
the
Why Assail the Steel Industry?—Charles M, White
Not
estimated.
4
TRADING
Some
Tax
think that
to New Year's!
Exemption and
1
Whiskey Distilling Shares—Louis Stone
defense goods.
nation
Inequity,
Appraisal—V. Lewis Bassie
people will be necessary in order
to release productive capacity for
the
confronting
problems
TAX-SELLING DAYS
3
B. Dorsey
A Stock Market
temporary drop in
standard
of
living
of the
the
of
prevent inflation,
can
Russia is unknown. It may last
years.
Brew
—
20 More
:
Tax—Evil
Probabilities in
—Harold
homes, best prospect for small investor.
Ever since the outbreak of war
Slichter
H.
Profits
Privilege—Beardsley Ruml___^
more
direct controls
to Christmas
Cover
Economic Implications of the Korean Crisis
reduction in current consumption and requires more out¬
per
SHOPPING- DAYS
Further Dollar Depreciation
—Walter E. Spahr
people to work. Sees rising incomes
offsetting trend for reduced personal consumption and suggests
excise taxation along with greater savings to close gap. Con¬
put
15 More
Cover
University Professor, Harvard University
vitally important to increase pro¬
ductive capacity, Dr. Slichter estimates about $33 billion of
output a year will be needed for replacing and expanding this
production. Says this outlay and military spending means
some
AND COMPANY
—Roy Blough—
After giving reasons why it is
-
Pag©
Stability—An Urgent and Difficult Task
How to Retard
t
licrasiEir
B. S.
Articles and News
By SUMNER H. SLICHTER*
y-
3
INDEX
Implications
Of Korean Crisis
Lamont
(2179)
Tele. NY 1-3446
*Not available this w«ek.
season*
Published Twice
Weekly
-
papers' Garaeuc, Lonaon,
c/o Edwards & Smith.
E.
C.,
Eng¬
land
COMMERCIAL
The
We
are
Copyright 1950 by William B. Dana
interested in offerings of
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U. S.
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4
The Commercial and Financial Chronicle
(2180)
additional
which
Excess Profits Tax—Evil Brew of
defined
wholesale
restraint
Inequity, Exemption and Privilege
BEARDSLEY RUML*
By
Business Committee
Mr. Rumi points
Emergency Corporate Taxation
on
fundamental defects of
out
profits
excess
he says "poisons the spirit of tax-paying system as
leading to ineqnity, exceptions, exemptions and privi-
tax, which
well
as
Calls proposed tax veritable engine of concentration
will grow bigger and the small and weak
leges."
?
under which "the big
with them or die/' Holds needed revenue can be
a defense emergency tax on corporate earnings.
Concludes excess profits is a subsidy, since it provides
"cheap dollars/'
will merge
obtained by
<.
seriousness of our na¬ mention the semantics which
The deep
considera¬
tional situation causes
tion of emergency
The
time.
very
situation de-
per¬
consideration
whole
the
vade
of
taxation at this the excess profits tax, and the
gravity of tne hysteria which accompanies it. We
have
all
been
exposed to the
the amount of
catch phrases, and if there were
merit and substance behind them,
revenue
this
d
ma n
that
s
not
should
raised
adequate
and
that the
et h o d
raising
What
it
that
it is in "excess" of "normal," what
There is
is normal?
know
as
de-
any
fense
the
such thing
no
national "normalcy" for cor¬
any more than
national "normalcy" for
business,
porate
will
be high. We
a
salaries
and
indi¬
viduals. The concept of "normal¬
cy" negates the concept of growth
also know that
Beardsley Rumi
be
must
a
there is
emer¬
gency tax
we
profit is to be taxed if
a
of
wages
This
not
Business
Committee
with
argue
dollars.
the
Whatever
Congress
from
taxation
make it.
ence can
decides
taxes
should
corporate
on
that
amount
Our
recommendation
we
do
not
method alone.
cerns
cerned
not
with
does
of
number
the
amount
profits,
dispute.
here
We
how
come
con¬
con¬
are
much—but
only with how.
We
certain that greater rev¬
be
obtained from a
are
enue
tax
corporate earnings than will
sult from
on
re¬
profits tax.
certain
that
any
excess
people
that
there
are
attain¬
which they
Must
we
along to
be
can
a
no
hysteria
sweep
covered.
We
taxation
result
level
profits
the
of
of
large
of
deal here
with
arising
increased
the
as
a
general
business
defense
activity which
expenditures pro¬
duce.
It
is only necessary for
me
to
lasting advan¬
for the sake of
or
Business
Committee
that
excess
the
reebmmends
profits tax pro¬
posal and principle be rejected,
and that
in its place there bo
levied
an
across-the-board
cor¬
porate profit levy that will pi oduce as much revenue as would
be proposed excess
^Statement
Senate
D. C.,
by Mr. Rumi before the
Committee, Washington,
as
much
and
sary
profits tax and
it„ is deemed..neces¬
desirable to withdraw
as.,
Finance
Dec/5, 1950.
from the
earnings of business ^cor¬
porations.
Let
me
forth
set
considerations
Net Markets In
that
the
briefly
have
led
to
this recommendation.
The question must come to the
mind of every
thoughtful person,
"Why is it so difficult to write
excess
profits tax?"
Listed
After
is hot
RAIL BONDS
all, the
a
new
excess
an
profits tax
experi¬
and untried
ment.
In
and
years
Inquiries Invited
both
the
Joint
Committee
the
Treasury, -experts with
of training and experience
with tax legislation have worked
diligently on the problem of an
excess profits tax.
These experts
have
gladly sought and have
abundantly received advice, sug¬
gestions and cooperation from all
J. Arthur Warner & Co.
INCORPO R AT ED
*
120
Broadway, New York 5
WOrth 4-2300
—
Teletype NY 1-40
Direct Private Wires to Boston,
Philadelphia■, Hartford,-
&
Co.,
Chicago, St Morgan St Co., Los Angeles
segments
of
the
national
com¬
munity.
Why then is the writing of an
excess profits tax so difficult?
Analysis shows that basic de¬
fects exist, and that they are in¬
herent in the tax.
•
Providence and Portland, Me.
Private Wires to Paul H. Davis
new
and distribution which has served
this
country
long.
well
understood
is
What
the
legislating gross and conspicuous
inequities into-the tax system. *
No tax
is
fact
\ ;
:
■
and
well
so
.
,
.
for
.
,
so
.
created
cheap dollars
its dis¬
at
it
system will work unless
is
two
defects
basic
search
to
be
have
made
for
relief
The battle for markets,
better
These two basic defects already
have forced liberalization of basis
levels
tion
the
and
nal tax;
^percentage margi¬
but with this liberaliza¬
the
revenue
disappears, and
that
tax
a
is
con¬
inequitable will de¬
stroy the moral compulsions that
to make
are
needed
tem
acceptable and efficient.
I
have
that
tax sys¬
the rec¬
Committee,
already given
ommendation
of
our
across-the-board rate in¬
an
should
crease
any
substituted
be
for
cheap dollars will win
because they can extend further
the
and
the-board tax may be summarized
and
provisions palliative.
that
alone:
spicuously
posal.
through
service, better coverage,
inventory stocks—yes, and
methods of relief, sometimes by
administrative
relief
provisions, through better advertising and
sometimes
by
exclusions under promotion, too—will be a battle
between
cheap expense dollars
the law itself.
The record as it
and
expensive expense dollars,
stands declares the failure of the
al)
that
left is
is
tax
a
structure
the
can
take
Thus, by
profits tax,
more
reason
the
have created
a
risks.
the
of
excess
government will
proposed
The
as
excess
profits
for such
reasons
an
tax.
across-
follows:
(1) It will be equitable.
double standard of
dollars with favors
who
still
are
Basic Defects
These basic defects
are
are
readily at hand.
that all business wants to avoid
first, I wish to show briefly putting tax considerations before
market
considerations;
because
But
(1)
(1) It is impossible to select a
basis level
of earnings
above
creating
in
tax-oriented
a
business management,
(2) in imposing limitations on
growth of investment, and
(3) in legislating gross and con¬
spicuous inequities in
kind.
a
tax sys¬
orientation
Tax
quence
of
profits
tax
is
when
the
conse¬
high marginal excess
rates.
Under
such
rates, to the extent a business is
subject to excess profits taxes,
demands will have been distorted
by artificial and irrelevant factors
which
the
have
nothing
to
do
with
in
making and distributing
things and services that peo¬
breeds
waste
has
at
509 OLIVE
•
Imposes Limitations
on
every
level
of
Growth
a
The
system of Federal in¬
or
for
disallowed
tax
enterprise
would
getting
new
of these
sources.
of
The
inflationary
consequences
government-induced
-
private
Placer
The
Development,
Limited
OWNS
INTERESTS
PRODUCING
OIL—LEAD—ZINC—GOLD
Trading
Analysis
market
available
John R.
1006
maintained
on
request
Lewis, Inc.
SECOND
AVENUE
SEATTLE
Teletype, SE 105
ELiot 3040
Trading Markets In
Additional debt
American Furniture
Bassett Furniture Industries
Camp Manufacturing
Commonwealth Natural Gas
Dan River Mills
opportunity for gain.
excess
fare and the
stopped before it began.
,
t
St. Louis 1,Mo.
profits tax puts se¬
in
the way of
investment from any
profits tax will hold
back dangerously the expansion
of
American
productivity,
so
be needed both for.-the general wel¬
Since a business man¬
ager
could only know the tax
consequences of routine actions,
purposes.
and
'
obstacles
money / is more risky, and more
spection are entirely unrealistic.
difficult to pay off. Undistributed
Such proposals would set up a
profits fade away. New invest¬
post-audit of all business expense
ment of savings becomes unat¬
and a government agent would be
tractive since the dangers of loss
required to judge after the fact
are
not offset by commensurate
whether an expenditure is to be
allowed
STREET
-
excess
rious
Proposals to correct this weak¬
by
«
Investment
two
management.
ness
Stix & Co
ple want.
The second danger in an excess
kinds of
is that of imposing
dollars to work with. It has cheap profits tax
limitations on the growth of in¬
earned. dollars
and
expensive
vestment.
We must
have con¬
earned dollars; cheap earned dol¬
lars are those which, if not spent, stantly expanding productivity to
serve
the
requirements of de¬
will be taxed at high marginal
fense preparations, the needs of a
rates; expensive dollars are those
which are taxed at ordinary rates. growing population, and an in¬
Ex¬
Under the bill proposed by the creasing standard of living.
Ways and Means Committee, the panding production requires ex¬
marginal rate is 75%, so the cheap panding investment — more ma¬
earned dollar is worth 25c.
The chines, more buildings, more in
ventory and all the rest.
ordinary rate is 45%, so the ex¬
The new investment required
pensive earned dollar is worth 55c,
more
than twice as much as the for expanding production
must
come
from either (1)
increasing
cheap dollar.
business debt by borrowing the
The creation
by tax law of
necessary money, or (2) reinvest¬
cheap dollars has resulted, ana.
ment of undistributed profits, or
will result again, in carelessness,
waste
and
extravagance.
The (3) new investment by the people
of their savings.
cheap dollar is demoralizing and
management
MIDWEST STOCK EXCHANGE
this
happens, competitive
enterprise based on efficiency and
ingenuity in serving the public's
skill
tem of any
risk
two:
MEMBERS
the serious dangers,
us
There
result?
wrong
real
haste
in
tage
let
equally
through effective procedures
negotiation and renegotiation
are
knowledge.
common
less
dis¬
matters
are
dif¬
ferent and better ways of
ing the objectives
properly desire.
empty haste, or in rushing to the
for adoption of hurtful and mischie¬
vous legislation just because of its
any
undue profits arising from direct possible psychological appeal.
In this frame of reference, our
defense expenditures can be re¬
We
of
fully
been
■
can
sound defense emergency
growing
have
by others and
(2)
It will not involve dis¬
going to those criminatory exceptions and ex¬
already strong. The ex¬ emptions.
grossly inequitable and still
perverse in its impact on man¬ cess profits tax is a veritable en¬
(3) It will not produce a double
gine of concentration, compelling
agerial judgment.
standard of dollars, thereby cor¬
Because of these defects, which prudent and aggressive business
rupting managerial judgment.
are inherent in any excess profits
management
to
use
wisely its
(4) It can be made to produce
tax, we must conclude that the cheap dollars to entrench and to
believe that we need an excess
as much revenue now as an excess
problem of devising an acceptable expand. With government-excessprofits tax for psychological or
excess profits tax is insoluble. Ac¬
profits-tax-cheap dollars, the big profits tax, and, at the same rates,
for political reasons.
But are the
produce
more
revenue
as
will grow bigger and the small will
people so swayed by the lure of cordingly, any excess profits tax
times goes by. The excess profits
which involves a basis level of and weak will merge with them,
words, that we may be forced to
tax will produce less revenue over
or die.
I'
put a bad law on the statute earnings and high marginal rates
the
years
because of increased
If this is true, why then does
books?
If so, we must find dif¬ should be wholly rejected. Alter ¬
native methods of raising revenue even
Continued on page 23
ferent and better words that v/ill
big business oppose the ex¬
from taxes on corporate earnings cess
show
profits tax?
The reason is
and
expansion and progress. And
based upon such a con¬
live with
defense taxation cept will, as I shall show, obstruct
for many years to come. Accord¬ the development of efficient pro¬
ingly, it is imperative that the duction throughout the American
form of defense taxation be right, economy.
as
There are those who honestly
right as wisdom and experi¬
to
high
prepared
damaging
and
spending
cussed,
better
"Normal" Profit?
a
inequities,
on
These
Is
But if
be
sound.
We
profits
an excess
will be
without
largely self-enfoicing.
The
business, and on new. and growing that the existence of cheap dol¬ average taxpayer, individual or
lars makes prudent many business corporate,
processes or production.
must feel that he,is
(2) It is impossible to impose a activities that would not be pru¬ fairly treated He must .compute
dent except for the fact that the and pay his tax as a matter rof
high marginal rate on a portion
conscience and duty, and must be¬
of the earnings of a single com¬ dollars expended are cheap.
lieve that by and large other
pany, or of many companies, or
tax¬
"Not a Burden, But a Subsidy"
of all companies, without violent
payers are not privileged as com¬
distortion
of
pared to himself.
/
managerial
judg¬
The excess profits tax is there¬
ment.
What should be a disci¬ fore not
a burden, but a subsidy.
"An Evil Brew of Inequity"
plined effort to meet with effi¬ It
provides cheap dollars to the
ciency the public's needs for prod¬
The excess profits tax is an evil
profitable and established com¬
ucts and services is transmuted
brew of inequity, exception, ex¬
pany, dollars which can and must
into
skill in ;the
avoidance of be used
It will
by a responsible man¬ emption and privilege.
taxation and shrewdness and even
agement to safeguard and to ex¬ poison the spirit of the tax-paying
carelessness in the manipulation
public. It will undermine the
tend ihe position of such a com¬
of business expense.
As I shall
moral compulsions that make the
pany
against competition.
If a
show later, the high marginal rate
competitor is not in excess profits, tax system of the United States
forces
even
the
most
prudent if it is weak in
so successful as compared to that
earnings, or young,
management to tax-begotten judg¬ or with
of many other countries. -Even if
inadequate capital — in
ments
which
are
individually other
words, if it has only expen¬ an excess profits tax with all its
sound, but which in the aggregate sive dollars in its arsenal—it is at other defects were needed, which
will destroy the free competitive
a
double disadvantage as against clearly it is not, it should be re¬
enterprise system of production its entrenched rival with
tax- jected in principle on this ground
caused
of
should
opposing
tax today.
be
m
be
would
Committee
Business
profits
"excess"
as
Thursday, December 7, 1950
.
.
.
common
defense.
Life Insurance Co. of Va.
STRADER,TAYLOR & CO., Inc!
•
The third1 danger, and the/last
that I shall mention, is that of
Lynchburg, Va.
LD
39(
.
TWXLY77
I
*
Volume 172
Number 4966
.
.
.
The Commercial and Financial Chronicle
NY Curb
Steel
The
Output
John J. Sheehan
,
Carloadings
State of Trade
Retail
-
-
Trade
The
Commodity Price Index
Food
and
Price
Business
rector
Failures
J
A marked decrease in total industrial
try
as
whole resulted
a
crippling
trial
last
week
production for the
following
the
coun¬
occurrence
of
of
the
anticipated
damage
by
underwriters,
the New York "Journal of Commerce" reports, can be gained by
a
comparison of Saturday's (Nov. 25, 1950) big blow with the
Atlantic
when
Coast
hurricanes
destruction
was
of
Sept.
17,
and Sept. 14, 1944,
at $400,000,000 and
1938,
estimated respectively
$100,000,000. The insurance men agree that the week-end storm
was more devastating and widespread than the
hurricanes; there¬
fore, property damage will be higher.
Aggregate output showed
for
the
similar
claims
for
claims
rose
1949
falls
It
week.
unemployment
short
no
material change from
also
was
insurance
noted
dipped
that
the level
while
slightly,
initial
continued
somewhat from the low level pf recent weeks.
The extent of
of
price increases just effected in the steel industry
by a wide margin, says "Steel," the
expectations
magazine of metalworking the current week. Up to $10 per ton
the average had been predicted recently. United States Steel's
advance, however, averages only $5.50 per ton, less than 3/10ths of
1 cent per
pound, and just about covers the wage increase aver¬
aging 16 cents per hour. Since United States Steel's action in a
general way served as a pattern for other producers, the markup
prices means the industry will absorb raw material cost in¬
creases, which Benjamin Fairless, President of the corporation,
several weeks ago said averaged $4 per ton for his company
alone. The increase in prices by United States Steel is confined
to base prices, extras not being affected.
finding themselves in
are
an
increasingly
tight position with respect to steel supplies, the magazine adds.
With the mills accepting only DO and other rated tonnage beyond
January, for which latter month they are booked solidly, more
consumers
turning in
are
Mr.
desperation
to
the
premium
the
steel
is
possible that a renewal of adverse weather conditions
in Pittsburgh and West Virginia may actually force steel
output
this week to a level lower than was estimated on the basis of
proved
a
be
looked
for,
deterrent to production and,
of General Motors divisions
a
Thanksgiving Day. Normally
but the week-end snowstorm
were
as a consequence,
assemblies
tions
Sheehan
associated
was
Western
abroad, have been widely publicized with
arresting statistics.
But there remains ; for
Electric
with
Company.
York,
Sheehan
Mr.
World
of
War
addition
to
is
Even
force where,
artillery, he wrote, produced and
directed radio shows based
War Department "Why We Fight"
Before the war he was a
theme.
in New Jersey.
newspaper man
A. Wilfred
facing aluminum and copper curtailments plus
continuing steel shortage, was concentrating on the increasing¬
ly difficult task of maintaining production, this agency added.
Sometime this week the industry's
7,500,000th vehicle of the
will be produced in a United States plant, it noted. A year
ago the six million milestone was passed on about the same date.
of
the
past,
111.—George
E.
Brown has become affiliated with
Cruttenden
&
Co., 209 South
La
Salle Street, members of the New
York
Midwest
and
Stock
Ex¬
changes.
this
recovery) in the face of
82% in commodities.
year's
Slayton & Co. Adds
to The Financial
has
become
Slayton
&
Co.,
Building.
Bank
Chronicle)
Between the successive 1935-'39 and 1940-'44 periods taken as
18% in the face of
averages, common stocks fell
a
impor¬
commodities.*
^
;
1
factor of timing has similarly been important in the,
inflations, reflected, for example, in a 50% rally in the
gold value of the franc between 1920 and 1922.
In support of doubt about a fillip to stock prices from credit
inflation here the argument has been advanced that the public
and private debt of $500 billion being double the taxable value
of the nation's property means that there is no real "equity"
The
with
existent.
Our
,f
ROCKFORD,
Whitsell
has
111.—Eugene
the staff
&
B.
of
Co.,
depreciation
monetary
the
W.
ever
more
important is the problem of preserving
capital value of trust funds, which now aggregate the huge
of $50 billion in national banks and trust companies alone.
of Chas. A. Day &
Co., Inc., Wash¬
ington at Court Street, members
of the Boston Stock Exchange.
the
past
decade)
well
as
inflation
threats
gifts
constitute
Considerable
leeway
in
the
anti-inflation sphere has been
Man-ism," adopted by
furnished by the introduction of "Prudent
12 States since 1943, with New York joining up last July.
The
question arises, however, whether the "Prudent Man" relaxation
as embodied in the New York statute permitting a 35% placement
in otherwise ineligible bonds and
the investor's inflation concern.
(Special to The Financial Chronicle)
as
nettlesome difficulties.
to the staff
added
interruptions;;"
Confiscatory taxation (entailing the making of $7 billion of
(Special to The Financial Chronicle)
Price has been
short-term
total
With Chas. A. Day Co.
Joseph
with
stock investment offers partial and
Inflation and Trust Funds
Talcott
Becoming
—
common
convenient protection.
Building.
Mass.
stocks, goes far enough to satisfy
In any event, for those particuContinued
BOSTON, Mass. —Daniel H.
on
page
Inc., 77 Franklin Street, members
of the Boston Stock Exchange.
With Schirmer,
*
From
"Inflation and the
Investor," Axe Houghton Economic Studies, Series
C, No. 4.
Atherton
(Special to The Financial Chronicle)
A.
Mass.—James
BOSTON,
Hodder Jr. has been added to the
Output Rebounds to
an
Estimated 100.5% of
Capacity Following Severe Storm of
Steel
consumers
are
a
staff
reacting mildly to last week's steel price
increase, states "The Iron Age," national metalworking weekly,
in its current summary of the steel trade.
To most of them avail¬
ability of steel is the primary consideration.
importance. ;
Another
had
reason
anticipated
for their mild
the
price
boost.
it
for
the industry so far
came
most
it
was
is actually only $5.88
per
ton of finished
voice in labor still to be heard in the fifth round.
With
He is expected
predicted, the National Production Authority has found it
necessary to revise its rules on steel priorities (DO ratings).* Lead
time on orders, which had been uniformly 45 days, now'varies
on
DO
the
to
orders
Significantly, limits
depending
the product.
Also, some of the
which mills mustf;accept have been raised.
on hot and cold-rolled sheets were raised
staff
of
Merrill
Calif.—
Lynch,
Pierce, Fenner & Beane, 454 North
Camden
Drive.
Fairman Co. Adds
LOS ANGELES,
Calif.—William
D.
Street, Jr. has been added to
the staff of Fairman & Co., 210
West Seventh Street,
the Los
members of
Angeles Stock Exchange.
INVESTMENT
Members New York Stock
BANKERS
Exchange and Other Leading Exchanges
in under the control barrier.
As
limits
Lynch
BEVERLY HILLS,
union, and the resultant
latest cost-of-living figures at an all-time high, price-wage con¬
trols are much nearer this week. John L. Lewis is the only big
from 45 to 120 days
previously
(Special to The Financial Chronicle)
The settlement with the steelworkers
at top speed to get
was
Chester P. Guziel has been added
paper assets.
steel price boost almost complete the fifth wage-price round.
move
He
(Special to The Financial Chronicle)
smaller
companies, but this is
the average increase for the industry.
The price increase covers
only the cost of the wage settlement; most steel firms are absorb¬
ing increased materials costs which now average more than $4 a
to
Exchanges.
of them
This figure will vary slightly among
ton, this trade
&
Atherton
with Burgess & Leith.
With Merrill
that
than they had expected. Pre-settlement estimates of the increase
had ranged from $6 to $10 a ton. The weighted average increase
steel.
Schirmer,
of the New York and Boston Stock
Cost is of secondary
reaction is
When
of
Co., 50 Congress Street, members
Week Ago
on
Continued
on
page
29
16
Levan is with F. L. Putnam & Co.,
year
Steel
"
inflation-equity share question would f
be offering the guiding principle to the estate planner, for him¬
self and for his heirs, that over the very long term there will be
secular
joined
Sandeen
'
conclusion to this
against which threat
A.
Joins E. F. Hutton Staff
ANGELES, Calif.—Gerald
M.
Burrill
E.
F.
UNDERWRITERS AND DISTRIBUTORS OF
INVESTMENT SECURITIES
(Special to The Financial Chronicle)
LOS
>
12% rise in the,
initiating the hedge.
Germany an investment in stocks if made in 1918 would
by 1925 have lost 64% of its value in terms of the gold value of
the mark; if invested in 1919, would have lost 24%; but if the
investment was made in January, 1920, there would have been a
gain of 240%, which far exceeded the accompanying net rise in1
National
associated
Illinois
Joins S. A. Sandeen
S.
con¬
a
current rise of
French
(Special
thal
•
In
(Special to The Financial Chronicle)
CHICAGO,
must
we
The evidence from abroad also indicate the worldwide
F. L. Putnam Adds
the
basis
tance of the time chosen for
Cruttenden Co. Adds
grew
The industry,
the
many
cost-of-living index.
affected and other producers to
darker according to "Ward's Auto¬
motive Reports," complaints about credit regulation W faded
away
in automotive circles the past week.
news
May
the
on
the
country we have since 1929 witnessed a 40%
drop in the stock market averages (even after
in
assignment in the
an
on
evidences of non-correlation
between
monetary
depreciation and
stock
price action during long intervals.
In this
recall
having served
II,
the future from the past.
assume
A
veteran
a
planners the $64 question—how far to
estate
graduate of Pace College in New
slighter degree.
As the Korean
to the long continuing
private capital and to the likelihood of
monetary depreciation,
makes appropriate re-examination of
estate planning and attitudes toward inheritance.
Irrespective of
one's forecast of the details, surely confiscatory
over
Automotive output last week managed to advance above that
would
future of
joining the public rela¬
staff of the Exchange, Mr.
areas.
of the previous week which included
increase
the
outside supervision.
BOSTON,
an
threats to
Capital Conservation
international crisis," adding
as
telegraphed reports from steel plants. Flood conditions are re¬
ported to have caused plant shutdowns in these two important
steel-producing
new
Prior to
will
mouth supply basis and jeopardize maintenance of
manufacturing
schedules. More serious, however, is the alarming turn of events
in Korea, this trade paper concludes.
It
The
and
10 days will intensify current shortages. Delayed ship¬
likely force more metalworking shops to a hand-to-
past
ments
'
—
public relations
QUINCY, 111.—Robert H. Rosen¬
hope held in some consuming circles of an improve¬
supply conditions after January has been dashed
by recent events. Loss of steel production due to the snowstorm of
in
World Crisis and Long-Term
.
director, succeeds H. Vernon Lee,
Jr., recently named director of the
Curb department
of
admissions
markets
The faint
ment
By A. WILFRED MAY
taxation, inflation and declining bond yields
prompt us to relinquish the lawyer's "habit of
judging the future in the light of the past.
The last decade's misfortunes of the bond¬
holder vis-a-vis the stockholder here as well
not encouraging.
are
Sheehan, who has been with
Exchange since 1946 and
has been assistant
for supplies. They are not having much success,
however, and the
prospects
di¬
Curb
the board of governors at its reg¬
ular meeting held yesterday.
in
consumers
York
•
•
•
"J.
relations
New
with the armored
on
General
the
John
the Curb
of the nation.
Some -estimate
public
as -
of
of
'
Exchange
wasannounced
last
night by Francis Adams Truslow,
President of the Exchange:
The
appointment was confirmed by
and damaging wind storms throughout many indus¬
snow
areas
appointment
Sheehan
Index
Auto Production
Industry
Appoints -C-.
Production
Electric
5
(2181)
of
623
BROKERS OF
has joined the staff
Hutton
South K Spring
formerly with
&
Company,
Street.
He : was
Blyth & Co., Inc.
Private Wires
•
BONDS, STOCKS, COMMODITIES
Home Office: Atlanta • Phone LD-159
The Commercial and Financial Chronicle
Business Probabilities in
The Rearmament
Economy
Trading Department
>
.4
Merrill Lynch, Pierce, Fenner & Beane
70 PINE
STREET, NEW YORK 5, N. Y.
Offices in 97 Cities
,
.
.
.
.
Thursday, December 7, 19f»0
Volume 172
Number 4966
not
The Outlook for
munitions, for high octane gas,
1i wartime plastics, dyes, paints, in-
parent that speculative purchases
f
assume
'
Hornblower & Weeks
secticides and
■
Members, New York Stock Exchange
Reviewing effects of Korean crisis on whiskey producing com¬
panies, Mr. Stone points out that threatened excessive supply
over-production and
averted.
Gives
-
if
June
the
26,
it
distilling
looked
industry
in
was
building itself up for an awful
let-down—whiskey in storage had
reached
had
1940 and
the
normal
its
that
our
of
come
gallons,
enough
structure.
for
eight
—with
to
years
retail
at the
the
productive facilities
I
com¬
1949 consump¬
tion
a
that had
ments
been
laid
down
1945
and
just beginning to
Stone
Louis
the
to
the industry's price structure.
Korean
The
low.
completely changed the picture—
weaken
threat
of
being
the
to
as
of
stocks
so
back
to
whiskies
blends. In the
total
place, be it whiskey or any¬
thing else, the superficially ob¬
vious course of events has again
been confounded by the unpre¬
review
to
be
of
some
some
perspective
value
of
the
>
stocks.
When
only
duction
the
"
high
of
245,477,000
for'23%
distilling
during
all-
paration
a
quired
in
12%
Low
41/2
14%
5%
.11%
j.
Publicker
Brown
renewed
whiskey, in
Alcohol is
large
very
Brown
Low
Low
1950
17%
31 :
80
17%
23%
11 %
17
171/4
20%
;
133/4
as
a
believed to
totals shown in the tabula¬
partly to increased vol¬
ume at satisfactory profit margins,
and partly
to the Government's
alcohol program, which has the
effect
of reducing overall costs.
tion
due
The
high earnings base built up
1946-49 period, plus fairly
in the
high book values, will provide a
of
im¬
profits taxes—
any case
to allow
maintenance of the present divi¬
relatively
munity to
sufficient
high
dend rates, plus
cases.
degree
excess
in
increases in most
Although the rate of
First
To
for 3 year old
inventories are gen¬
at
much higher
a
the
seven
different stocks tend to
if the basic
all of these issues
have appreciation possibilities.
move
as
trend
is
a
group;
up,
Inclusive
#2,500,00.0
on
each December \ri 1951 to 1966, inclusive
principal and interest, jointly and severally by endorsement, by the
Railroad Company, The Cleveland, Cincinnati, Chicago
Louis Railway Company and The New York, Chicago and St. Louis Railroad Company;
all as provided in the Guaranty Agreement dated December 1, 1950.
guaranteed unconditionally
as to
proprietor companies, The New York Central
191/4
8%
11
9%
103/4
961/4
1273/4
.
2,
and St.
Priced
17%
to
yield 2.00% to 3.40% according to maturity
Issuance, sale and guaranty oj these Bonds are subject to authorization by the Interstate Commerce Commission.
The Offering Circular may be obtained in any State in which this announcement is circulated from only such of the undersigned and other dealers as may lawfully offer these securities in such State.
1961/4
II
Net Current
Book Value
Assets
HALSEY, STUART & CO. INC.
Gross
Inventory
8-31-50
$48.14
$38.34
$30.61
49.07
35.86
HARRIS, HALL & COMPANY
DICK & MERLE-SMITH
BEAR, STEARNS & CO.
49.80
27.70
21.88
14.32
28.26
1
15.48
SALOMON
20.80
30.51
2.96
•
BROS. &
HUTZLER
COFFIN
BURR
HAYDEN, STONE & CO.
&
40.81
17.12
•
WERTHEIM
(INCORPORATED)
&. CO.
i
15.60
-
14.36
1
'
24.77
'20.71
'
4-30-50
12-31-49
.
share)
..
12-31-49
Company
Mortgage 3l/*% Serial Bonds,
Series D-1951 to Series D-1966,
mature
v
20.27
CORPORATION
-
SWISS AMERICAN
TABLE III
A. G. BECKER & CO.
INCORPORATED
'
INCORPORATED
AMERICAN SECURITIES
CORPORATION
OTIS &. CO.
(INCORPORATED)
HIRSCH &. CO.
-
j
1
SHIELDS & COMPANY
A. M. KIDDER
TUCKER, ANTHONY &. CO.
CO.
WEEDEN & CO.
INCORPORATED
'
i
Year
,
1
'
*
Net Per
1946-9
Share
Aver. Net
$4.77
$4.45
12 Mos.
'
'
a
*
*
Distillers
'
National
>
Seagrams.
_
Distillers..
Hiram Walker—
'<
£Divd.
$1.70
*
Glenmore
__
_
_
Forman.
♦Estimated.
8.47
7.19
*12-31-50
*3.30
4.00
9.68
7.16
_
& SON
MILWAUKEE COMPANY
THE
.
...
,
WM. E. POLLOCK & CO., INC.
.j
INCORPORATED
;
BACHE & CO.
BALL,
'
BURGE &, KRAUS
-
R. S. DICKSON & COMPANY
INCORPORATED
'
4.30
19-30-50
f2.08
3.60
4-30-50
4.74 '
4.64
■
V 2.00
§
3.63
0.80
FIRST OF MICHIGAN
NEW
YORK HANSEATIC
KEAN, TAYLOR & CO.
CORPORATION
CORPORATION
RITER &. CO.
STERN BROTHERS & CO.
1.15
6.74
t9 months through September. " ^Through latest declaration..
§2/4% in stock in March and 2%% in stock in September.
GREGORY
2.00
8-31-50
_
12-31-50
[ Publicker
Brown
7-31-50i
8-31-50
Schenley
'
'
;
Ended
.
**•.!*>
December 7,
1950.
earn¬
ings improvement will vary con¬
siderably between the different
inven¬
gallon
as
23%
per
12-31-49
<
are
year
The Cleveland Union Terminals
251/4
14%
20%
Distillers-
earnings
higher rate than the full
a
25%
32%
7-31-50
_
are
far
so
at
37
30
67
Seagrams
Glenmore
fluctuations
regarded
be
companies, with Publicker, Schenley, and Brown Forman appearing
tories would« rise appreciably. As to hold the most attractive possi¬
a
matter of fact, bulk whiskey bilities, experience indicates that
price -stocks, and
concerned, despite erally insured
48%.
Dec.
8-31-50
Forman
riskless investments
To be
5%
Date
Publicker
be
to
quantities,
38%
TABLE
National
means
Current
re¬
2%
(Figures
Distillers
no
v
2993/8
>
a
raw
because the value of their
from the tabula-
war pre¬
any
30%
*
market
alcohol, which is
High
Glenmore
Schenley
pro¬
only about $1
leading companies.
seven
the
1950
Forman___l__: *
'Walker
of
costs
very
whiskey. The usual
runs that the distillery
stocks should be prime benefi¬
ciaries of any general inflation,
leading
is apparent
be
relation to average
Table III presents pertinent in¬
and dividend figures for the
.
come
$40,000,000
upon
2%
.
It
would
increase
in
duction
-
-
•Income and Dividend Figures
the
1947-9
'
•V./'
small
gallon for
argument
the
firm
dicated.
I
High
National
shows
the
10%
a
distillery
company stocks at the key turn¬
ing points since 1937,
•
a
whiskey stocks, no appreciable in¬
crease
in sales prices seems in¬
forced conversion
program.
1946
Seagrams..
of
Crisis
industry
prime requisite in
a
1940-2
i
I
of
the
price structure, but in the face of
the
present
record
level
of
only
against
immediately
1937
Schenley
record
maintaining
in
portance
of
(Adjusted to present capitalization)
Distillers
generally
carried at lower of cost or market,
would produce a roughly equiv¬
alent increase in book values, and
are
$3.50
10%
ture of industrial
gallons
Walker
:
can
values, which
tory
re¬
Record
of their facilities to the manufac¬
TABLE
Hiram
Table
.
lever¬
affect per share
values. A 10% increase in inven¬
which
age
deteriorating price
been dissipated.
Market
market,
/,
anticipation of
pro¬
an
a
have
are
prices have already risen to about
full scale production of
reached
whiskey and
name
outbreak of hostilities in Korea,
present
came
rapidly
about
Almost
distilling
large stocks, and
that they show the extreme
depend
overproduction
an
preferred stock,
or
of particular interest to the extent
by
Effect of Korean
in 1933, the
immediately started to
down
time
"
repeal
distillers
lay
the
on
leading
of
deduction for
without
tion that the distillery stocks are
period.
the
liabilities
al¬
the
of
share
mon
From
will
brand
inventory values is of im-"
in the previous 12 months
war
basic figures, in an attempt to gain
inventory figures, represent¬
ing the total inventory per com¬
conversion
pace
The
gross
the
to
assets.
to
accounted
and
of
of
production
fixed
on
of
months through
consumption
15%%
of
month,
capacity.
rate
the
on
dangers
the
1950 straight and bonded
whiskies
valuation
opposed
as
12
considerably for the in¬
companies; on the whole,
it may be said that current market
prices place a ridiculously low
dividual
provide
a
the
in
rise in
but vary
percentage
higher
a
straight
the
not
of
to
balance
figure—National Distillers'
inventory, for example,
is in¬
sured for $280,000,000
against a
1949
balance
sheet
-year-end
figure of $125,000,000. But from a
realistic point of view, it must be
kept in mind that these inventory
profits are going to be realized
only as they show up in improved
earnings over the next several
years, except for companies such
as
Publicker, which is weak on
brand name sales, but in a posi¬
tion to realize big current profits
in the bulk whiskey market. For
the major companies
competing
price
of market
,
sheet
low
about 80%
age
armament program; in any case, it
seems
clear that any immediate
"
ket
may
number
requiring
production
directly
marginal producers, and
partly because of a gradual shift
June 30,
it
large
a
be forced by war
requirements. As so
frequently
happens in the affairs of the mar¬
interest
cohol
weaker
trol which may
realities;
did
strengthened position of
leading distillers who had ab¬
sorbed
now
industry's ability to make profits
for the next eight years regardless
of the degree of production con¬
dictable
structure
greatly
the
ageing
looked on as
much liquid gold, assuring the
are
price
Office
gallons
total
whiskey
seriously in the postwar
partly as a result of the
period,
a
price structure, the
accumulated'
whiskey
regarded
5,000,000
.structure
The
is
distillers
on,
from
than doubled since the 1945
quent developments to date, have
Instead
here
a
more
outbreak, and the subse¬
Government's
Reserve
estimated
high of 170,686,000 gallons
in 1948, and stocks in storage have
ing
resultant threat to
a
from
which involves only about 20% of
a
large and increasing scale, reach¬
in
volume, with
by
from
straight whiskies to
blends, which contain 25% to 40%
straight whiskey and 75% to 60%
neutral spirits. Beginning in 1945,
production
again
started
on
a
were
come
only
about
shift
in
1946
market
satisfied
were
the
domestic
1945 level of around
aged whiskies
of
alcohol; the balance will
Rubber
indicated
the
to
stated
the
than
value
balance sheet ap¬
praisal of fixed assets—replace¬
ment costs would, of course, be
much higher than stated values.
The net current asset figures aver¬
generally
gallons
come
can
relation
market prices
appear
reasonable,
particularly
when consideration is given to the
come from the distilling
industry—less whatever - quantity
can
be imported. At the present
time
300,000,000
gallons, and consumption require¬
and
rate,
In
of which about
year,
to book values are pre¬
as
book values, current
have, to
;
war
pletely converted to war uses,
whiskey stocks in storage fell to
come
a
dividends and
share
sented in Table II.
regular manufacturers of in¬
dustrial
price
advent of tne
The
period again changed the picture
than
more
the
about 230,000,000
ques¬
investment
the
Pertinent per
values.
figures
7,000
as
reactivation
scale
100,000,000 gallons
to market in a volume suf¬
break
full
a
of alcohol
1941, when large supplies
to
book
synthetic
much
as
confronting
relation to earnings,
of
synthetic rubber facilities will
require
of bonded whiskies first started to
ficient
into
went
1947-49.
buyer is whether present prices
represent
reasonable values in
gallons for the rubber on one big
currently estimated
in
effect
record total
643,300,000
total
of
tion
bulldozer. It is
1936—a
stocks
this
jeep and it takes
production level far
in excess of annual consumption.
The
rapid
build-up
of
ageing
as
gallons
from its
The basic
lows
October,
793,000,000
ad¬
section of the market
a
which is already up 100%
rubber—it takes about 50 gallons
of alcohol for the rubber on one
analysis
1950
of
substantial
further
a
in
vance
alcohol. About 650,000,000 gallons
-of
whiskey distilling stocks.
On
total
a
deteriorating price structure has been
of financial standings of leading
a
from
necessarily
made at current levels
war
1942
through June, 1945 and turned out
largely abated, since it now seems
needs for alcohol, immediate dangers of
war
basis
shift
of their inventories has ben
clear, because of
other
numerous
products. The extent of the coun¬
try's war-time requirements for
j alcohol are not generally realized;
in the last war, the distillers op¬
erated continuously on a three
By LOUIS STONE
-
solidity of the particular com¬
panies and their assured place in
a basic industry. And it is also ap¬
rubber,
but also for
'smokeless
powder
and
other
Whiskey
Distilling Shares
j
the
only for the manufacture of
synthetic
f
7
(2183)
The Commercial and Financial Chronicle
;
.
.
t
I
8
The Commercial and Financial Chronicle
(2184)
Thursday, December 7, 1950
;.
.
liminary reports show that profits
A Stock Market
in the third quarter of
Appraisal
quarter of 1949.
and
only
not
subject to brief, violent reversals
as
fears gain dominance or are
them
the
by
of
reports
news
the
putting
its
is
perhaps
characteristic
of
speculative
sentiment in
periods of dis¬
turbance and
best of shape for
operation, but is expanding
as rapidly as possible.
future
This
day.
In
an
and
being expanded
for war, require¬
economy
organized
for
ments
equip¬
ment are overwhelming.
Illustra¬
tive of the drive for quick expan¬
sion of capacity is the railroad car
building program, which has called
plant
new
uncertainty;
forth
but
allocate steel for
it
seems
in
aggravated
recent years
the
first
and
of
use
controls
nonmilitary
to
pur¬
The aluminum
industry, too, must
expand, and this in turn will re¬
tial
V.
Lewis
Bassie
r a
events
di
o
by
com¬
mentators. To gain the stable per¬
spective necessary for sound judg¬
ment in speculative or investment
operations, it is
necessary
sider
factors
the
basic
expansion
of
capacity
to
generate electric power.
to
con¬
that
will
persist through the transitory ups
and downs of market sentiment.
All such expansion will be done
under
certificates
of
necessity,
which
costs
over
The international situation pro¬
duces reassurance as well as un¬
five-year
a
period.
large and heavily-taxed corporate
profits. It seems almost inevitable
that
War Dominates Business Outlook
permit the amortization of
This adds the incentive of writing
off new capacity in a period of
direct
will
hardening
a
be
military
procurment
overshadowed
by indirect
military and essential civilian re¬
quirements in'this period as in
World
War
of
expenditures
recession.
Even
war
in
intervention
Korea,
on
a
rules
out
conservative
spirit, and thus tend
state of excitement
depression. Fear
may still produce the immediate
reactions.
It is not so likely to
prevent the subsequent advances.
to
produce
rather
a
of
than
The Bogey of Historical Ilighs
As the market hesitates
highs,
a
near
is
It
the
that
fear
the
market has become vulnerable be¬
prices
cause
confined
to
120
This
that
notion
the
peaks of the past provide a sound
basis for
judging the present is a
bogey whose influence cannot be
entirely discounted. It dwells in
imaginations tied down by preoc¬
cupation with the lines on a chart.
Lacking vision beyond these con¬
fines, such imagination fails to
perceive the essential differences
that justify striking out into new
territory.
industries.
The
clear
is
fact
food,
Natural
spending during the next year;
and clearly, it is not just a oneyear effort, but will carry into the
ord.
indefinite future.
now
It is this latter aspect
that has
ulus to business which brought on
the first flush of inflation. Every¬
seeks to protect against future
shortages and to anticipate future
needs. Stockpiling is pursued by
private business and individuals
one
well
by
as
government;
and
in
the
from "Illinois
published
by
the
Business
Bureau
of
Re¬
Eco¬
largest
on
continuing basis
rec¬
for
ex¬
increase in income
that
is
taking place. More workers
being employed, longer hours
being
are
worked, and
higher
being paid. These and
wages
are
other
increases
in
income
will
security
meas¬
expenditures for durable
goods, so that we may again see,
in the
years, both a sharp
war
increase
in
personal
savings and
at
production, is
annual
an
rate
of
and
Business
Research, College of
Commerce, University of Illinois, Novem¬
ber, 1950.
in
1937.
ing
the
and
war
is against
and
postwar
being increased at
of
higher, there is just
tries besides those
LAMBORN & CO., Inc.
99
WALL
gaged in
is
many indus¬
specifically en¬
The broad
market
middle
of
last
removal of "recession" fears.
The
of future earnings
is, in
effect, an assurance of future se¬
curity values. But how high prices
should be in relation to earnings
is something the market insists on
deciding for itself.
assurance
Raw
—
Refined
—
Liquid
Exports—Imports—Futures
DIgby
4-2727
for
son
prices
rea¬
regarding stock prices
in
the
the
additional
lend
to market trends.
as
Just
two
entitled
H. Hentz & Co.
Members
New
York
York
York
Chicago
New
Orleans
And
out some of the influences
respon¬
sible
for
this
market
situation.
speculation has
to
appearance.
Exchange
with
of
Cotton
other
Inc.
Trade
Exchange
Exchanges
put in
*
Exchange Bldg.
NEW YORK 4, N. Y.
DETROIT
PITTSBURGH
GENEVA, SWITZERLAND
increase
shift
it
are
freeze
psychology
The
is
from
in
brokers'
definite signs
on
speculative
relaxing
its
avoidance
increase
public is forced to
of
above,
and
income,
in
save
grip.
of
as
more
pension
fund
postwar
made
highs
in
recent
months, price-earnings ratios have
been kept low by the
sharp up¬
surge in corporate profits.
Pre¬
Dallas
1,
—
Gulf
Tex.
memorandum
a
&
Manu¬
Malleable
Castings Co.
&
Steel
Memorandum
—
—
Shearson, Hammill & Co., 14 Wall
Street, New York 5, N. Y.
of
news
1, Mo.
Placer
Development, Limited—
John
—
Second
R.
Lewis,
Avenue,
Inc.,
4,
Seattle
Wash.
Over-the-Counter Index—Book¬
let
Riverside
showing an up-to-date com¬
Cement
parison between the thirty listed Card
memorandum
Company—
—
Lerner
&
industrial stocks used in the Dow-
five
Averages
Co., 10 Post Office Square, Bos¬
thirty- ton 9, Mass.
the
and
over-the-counter
industrial
Textron, Inc.—Analysis—Bruns,
Quo¬
Averages, both as Nordeman & Co., 321 Broadway,
to yield and market performance New York 7, N. Y.
over an eleven-year period—Na¬
Textron, Incorporated—Review
tional Quotation Bureau, Inc., 46
—Watson, Hoffman & Goodwin,
Front Street, New York 4, N. Y.
265 Montgomery
Street, San Fran¬
Rails—What Now?
Progress cisco 4, Calif.
Also available is a progress re¬
report — Bache & Co., 36 Wall
Street, New York 5, N. Y.
port on Newport Steel Corp.
stocks
used
tation
Bureau
the National
in
—
•
•
*
it
for
unnecessary
draw
more
savings.
ment
industry
heavily
some
such
outlets,
to
those
upon
In addition,
invest¬
same
term inflation creates
desire for
a
securities that
can
price.
Rising
desire
for
late
a
also advance in
the
higher
available from stocks.
American
increased.
they
average
prices
while
to
over
moment,
6% of market
interest
short, the' market
move
ahead into
economic
future.
keeps
economy
liquid
there
on
capital
can
stock
bonds
on
an
be
As
-
no
prices.
,
likely
expanding
long
as
growing;
keeps
Steel
Foundries
effective
the
La
Co., 61 Broadway, New York 6,
ceiling
f.
—
Salle
Corporation—Analy¬
&
Co., Inc. 39 South
Street, Chicago, 3, 111.
N. Y.
U. S. Thermo
j
Armour &
Co.—Brief review in
"Gleanings"—Francis
&
I
du
Pont
tabulation
a
Control—Analysis
&
Co.,
148
State
Street, Boston 9, Mass.
Also available is
an
analysis of
Simplex Paper.
Also available in the
is
Raymond
—
Co., 1 Wall Street, New York 5,
N. Y.
pose"
of
securities
Cincinnati
issue
same
"double
and
Winters
Pur¬
report
a
on
Milling Machine.
&
Crampton
Corpora¬
tion—Analysis—C. E. Unterberg
& Co., 61
Broadway, New York
6, N. Y.
Bibb
Manufacturing
Co.
—
Memorandum
Johnson, Lane,
—
Space
&
Co.,
Bay
&
Drayton,
Streets, Savannah, Ga.
Brown-Forman
—Memorandum
Distillers
Federal Home Loan
Bank Offers Notes
Corp.
Hayden, Stone
& Co., 25 Broad Street, New York
4, N. Y.
—
Canada Dry Ginger Ale—Mem¬
orandum—Auchincloss, Parker &
52
Wall
Street, New
A
issue of $89,000,000 Fed¬
Loan
Banks
1.80%
new
eral
Home
consolidated notes, Series
E-1951,
non-callable, was offered on Dec.
5
by the Federal Home Loan
Redpath,
Banks
York 5, N. Y.
cal
through Everett Smith, fis¬
agent.
The notes, dated Dec.
15,
Bond
Memorandum
&
Share
Co.
—
Paine,
Webber,
Jackson & Curtis, 25 Broad Street,
—
New York 4, N. Y.
Also available is a memorandum
on
West Pennelectric
Co.
Emery Air Freight Corporation
—Analysis—Reynolds & Co., 120
Broadway, New York 5, N. Y.
1950 and due June 15, 1951,
are priced at
par.
A countrywide
selling group of securities deal¬
will
ers
ing.
participate in the offer¬
•
Proceeds
from
the
financing
will be used by the Federal Home
Loan Banks to provide funds for
making
credit
member
available
to
their
institutions.
Upon completion of the financ¬
Firemens
Insurance
Co.
of
ing the Federal Home Loan Banks
Newark—Memorandum—Geyer &
will
Co., 63 Wall Street, New York 5,
dated
N. Y.
1
,
Giant
of
Portland
Cement
have
outstanding
consoli¬
obligations in the amount
$561,000,000.
Co.—
Memorandum—Price, McNeal &
Co., 165 Broadway, New York 6,
N. Y.
Wholesaler & Dealer Contact
Haile Mines, Inc.
dum—William
25
Broad
L.
Street,
—
Memoran¬
Burton
& Co.,
York 4,
New
Representative Available
Knows
dealers
throughout
the United States and Canada.
Illinois
dum
Power
Co.—Memoran¬
Kalb, Voorhis
&
Co
25
Street, New York 4, N. Y.
—
Broad
i
*
.
,
Lumber
Company—
Analysis—Pacific Northwest Com¬
Exchange Building, Seattle
14, Wash.
pany,
Willing
and
able
to
travel.
Will
relocate
Box
'»
Long Bell
up,
Ultrasonic
&
and
piling
circular
Tex.
—
N. Y.
seems
New
—
Lentz, Newton & Co., Alamo Na¬
tional Building, San Antonio
5,
sis— Leason
the
less than 3%.
averages
In
At
New
Corporation
Memorandum—Zuckerman, Smith
in¬
Al¬
though dividends have risen sharp¬
ly, they are still low in relation to
soaring profits, and are being fur¬
ther
—
Corp., 120 Broad¬
New York 5, N. Y.
way,
living costs stimu¬
comes
Company-
York Hanseatic
mortgage
as
credit, will be curtailed.
At the
Express
memorandum
Electric
re¬
High profits, reserves, and
government assistance will make
serves.
the
participation has begun,
probably continue.
Gas—Bulletin
National
&
indicated
as
will
Although the market has
new
still
Buying
largely for cash,
Yet there
the
market to
CHICAGO
an
little
loans.
that
and
N. Y. Cotton
Ba¬
pointed
we
to date has been
Exchange,
Board
Market
Exchange
Cotton
Commodity
Stock
rometer—"Exploded,"
article
an
Out-and-out
Curb
New
"That
in
ago,
Exchange
Stock
New
years
Securities
money
time, reluctance to
put investment funds into stocks
tremely low rate, in keeping with is being undermined by the rise
the pattern of the last four years. in commodity prices. Fear of long1856
Co.,
on
Texas Engineering
facturing Co.
1006
strength
The flow of in¬
will
funds
—out
At this time it continues to cap¬
italize record earnings at an ex¬
Established
Corp.
&
Analytical
—
Louis
much
so
sound
no
high.
vestment
reflects, in large degree, the
year
SUGAR
the
commodity
Developments
the
advance in the stock
since
production, net earnings,
markets
in
Factors
Market
NEW YORK 5, N. Y.
and
production.
war
Psychological
STREET
expansion
in
years,
extremely rapid rate. With real
an
be
war
Building,
Analysis
tremendously expanded dur¬
was
stimulus
felt
than
more
than
wealth,
to
running
the rate in early 1946 and
three times as high as
Our capacity to produce
as
bound
nomic
Co.
or
$280 billion, and will soon exceed
$300 billion; this is half again as
abnormal expansion of expen¬
ditures for nondurable goods. The
an
high
since
aggregate
high
rial
considered
previous
years
in
which present price levels were
approached.
The gross national
product, our broadest measure of
more
restrict
be
can
vance
make for the usual
stepping-up of
purchases.
But mate¬
shortages and controls will
Airplane
Also available is
producers—Scherck, Richter
Company, Landreth Building, St.
American
only in relation to
other
things. Consider our economic ad¬
consumer
as
♦Reprinted
view"
A
the
are
other
some
pansion of civilian industries lies
are
provided the extraordinary stim¬
as
industries
and
Timer
&
Weyerhaeuser Timber Co.
States
19
on
analysis of
an
Pulp
Memorandum—Beer
Meeds,
New York 5, N. Y.
way,
low
chemical,
&
Research Corporation, 120 Broad¬
Follow-up
that
prices, like other economic
military program
be large enough to more than
offset
any
decline
in
private
will
and
Sound
Transcontinental Gas Pipe Line
developments be
war
I
and
brochure—National
Stock Market Appraisal
the
Bissell
Broadway, New York 5, N. Y.
Inflation
the highest in two Jones
are
Puget
Luscombe
Bank Stocks—Discussion of their
the
fear gains in effec¬
new
tiveness.
ures,
the
com¬
panies—Eastman, Dillon & Co., 15
Broad Street, New York 5, N. Y.
aggravate
this crusading
Also available is
Com¬
12
vestor—Laird,
Announced expansion plans in the
appraisal,
Manufacturing
Stocks—Review of
pany
firms mentioned will be pleased
parties the following literaturel
prospects for the conservative in¬
to strike out at anything
everything communistic. New
incidents, like the Chinese
certainty, because the increase in
military
Aircraft
interested
desire
II.
Nor will these
send
and
decades.
news¬
casts and
been
public
attitude that changes reactions to
it. What has been developed and
may be observed, for example, in
the
election returns,
is a blind
large program for steel
expansion
has
also
been
an¬
quire
It is understood that the
to
A
poses.
nounced, and the industry is under
pressure for still further increases.
inconsequen¬
seem so
justified.
has
facilities in the
relieved
Recommendations and Literature
large,
higher prices will
then
War scares, too, have lost much
of their power to depress the mar¬
ket.
War is still feared, but there
Concludes, "as
long as economy keeps growing and liquid capital keeps piling
up, there can be no effective ceiling on stock prices."
is
even
be
ing to short reversals of sharp movements.
industry
prices will not
but
Writing before recent break in market, Mr. Bassie analyzes
factors which have caused violent stock market reactions, lead¬
continues
Dealer-Broker Investment
as
deeper into profits, the
disparity between earning power
Director, Bureau of Economic and Business Research
University of Illinois
action
Perhaps,
cut
taxes
market
were
than 50% higher than in the
same
By V. LEWIS BASSIE*
Stock
1950
more
1026, Commercial and
P
Financial
-Place,
if
necessary.
Chronicle, 25 Park
New
York
7,
N.
Y.
(Volume 172
Number 4966
4
.
.
The Commercial and Financial Chronicle
(2185)
marked
extension,
such
will
has
as
been witnessed
years.
.
President, Republic Steel Corporation
That
and on.
I
contends, barring shortage of raw materials and manpower,
military demands will be met. Cites heavy increase in plant
construction costs, but despite this^ industry has invested
$2 billion in last four years in plant expansion mainly without
steel.
going
Then
talk
to
I'm
about
these
cure
talk
large
politics.
Both
steel
and
politics have a profound effect on
the
present
ning.
going
to
about
and
future
stability
-
the
n
the
of
of
-
and
For
tne
which
was
cold eye
same
examines
bacteria
under
Out of all this
conclusion
the
came
that the
industry was over-expanded.
under-expanded, gentlemen,
but over-expanded.
the
for
TNEC
scientist
a
of
amazing
Not
some
a
Dr.
The steel industry was
culture
steel
itv has
been
and
microscope.
m
*'
years
called in.
a
peo¬
ple.
worked
with
on
-welfare^"®
-
our
of state plan¬
transfusions had
examined with the
i t e d
U
•States
not
country,
This
it
on
Mr.
million
five-fold
population
During the
period steel
century
from
300
past so,
in¬
tinue
to
in
expand
fact
as
and
the
judgment backed by
and
rience
is
that
the
for
a
four
Then
of
wide streak
There isn't
of
anything unrealistic in the argu¬
discovered
stead,
ments
begin
industry.
have
told
We
been
that
the
industry
failed
has
to
ognize
C.
its
to
demands.
I
that
meet
don't
could
social
and
not
have
we
unusual
peak
with the
agree
unable to
am
have
see
steel
criticism
industry has
the
of
from the
come
Administration
with
the
pacity
81V2
and
its
million
The
tell
suffered from
the
shortage that
the
made
look
like
gnat
a
com¬
remember that back in
middle
'Thirties
professors
have
and
the
sages
mature
a
population
popular
planners,
"We
was:
economy." You
remember their story.
growth
Since
had
our
ended,
to
be
industrial
expansion
halted
like
horse.
"Our
overly spirited
horizons," the plan¬
"have been reached."
said,
ners
had
an
From
there
to be
going downhill.
on
we
supposed
were
about
95V2
in
1945.
And
then?
catastrophic
a
depression.
would
men
searching for jobs.
be
The economic
black
was as
Eight
soon
hurricane
as a
we
obsolete
steelmaking capacity, which had
held
wire
together
during the
Then
ped.
with
was
war,
con¬
ditions.
devote
and
we were
ourselves
welfare
government
told
to
social
financed
—
work
the
by
under
and
should
we
govern¬
ment
direction; the leaf-raking,
projects,
the painting and
dancing and all the things that
went along with it.
the
If
had
we
philosophy,
then
swallowed
as
expounded by the
President
States,
the
not have
10V3
of
the
United
steel
industry would
expanded its capacity by
million
and
this false
1939.
tons
between
Certainly,
the
1929
indus¬
try's steel production of 15x/3 mil¬
lion
in
tons
1933
in
1932, 26 million tons
29
and
million
tons
in
1934 did not encourage expansion.
During these three years steel
capacity was between 78 and 79
million tons.
About 1939, the TNEC
was
hold¬
the
gountry.
government
•Transcript
White
before
For ten
had
of
the
an
been
the
trying to
years
address
Economic
by
Club
troit, Detroit, Mich., Nov. 27, 1950.
of
Mr.
De¬
proven.
from
is
problem
ingot
nothing to
their
want
sheet,
or
steel
cide
what
more
more
a
sheet
bars
and
problem.
Republic alone has taken the
with
any
brought
In the first nine months
lion
dwelling
and
cars
units,
6V4
ton of that
to
our
whole
a
of
make
nearly
That's
cans.
in
first
the
suitable
and
equipment
installed to meet steel
purposes.
goes
constant
The sul¬
and
we've
to
got
we
right
not
steel
plants at $300 per
nual ton of capacity.
Instead,
new
rounded
facilities
out
though
of annual
based
today
on
what
or
30
you
Continued
manpower.
on
The'
which
This announcement is not
an¬
nounced
for
recently
Cleveland
is
that
Union Electric
First
result
of
expansions
100 million
end
million
Company of Missouri
Mortgage and Collateral Trust Bonds
2%%
Series due 1980
of
the part of many steel
on
Dated December 1, 1950
companies, steel capacity reached
the
buy these,securities.
an¬
110 Million Tons Capacity by 1952
a
to
we
a
this sort
offer to sell or a solicitation of an offer
offering is made only by the Prospectus.
an
The
steel
annual
we
tons this
of
1952
year
will
reach
tons.
By 1960,
pacity will be whatever
study of demands
and
Due December
1, 1980
by
110
steel ca¬
a realistic
seems
Price 102.542% and accrued interest
to indi¬
cate.
Mistakes of this sort by governofficials are anything but
meint
We
new.
more
than
had
a
evidence
N.
The
them
Prospectus may be obtained in any" State in which this"announcement is circulatedfrom only such
of the undersigned and other dealers as may lawfully offer these securities in such State.
century ago.
One hundred and
Henry
of
six years ago
Ellsworth,
then Com¬
missioners of Patents
under Har¬
rison, said wrongly, "The advance
of the
arts, from year to year,
taxes
HALSEY, STUART & CO. INC.
EQUITABLE SECURITIES CORPORATION
credulity and seems to
presage the arrival of that period
when human improvement must
OTIS &.
end."
E. F. HUTTON
ago,
another
government
official, Carroll D.
then
Commissioner
of
Labor, made this startlingly bad
guess, "It is true that new proces¬
Wright,
ses
of
manufacture
will
will not leave
room
WERTHEIM
CO.
&
CO.
WEEDEN
for
a
HAUPT &, CO.
SCHWABACHER
December 7,
1950.
CO.
GREGORY &. SON
WM. E. POLLOCK & CO., INC.
THE
INCORPORATED
BACHE & CO J
& COMPANY
THE ILLINOIS COMPANY
IRA
&
INCORPORATED
(INCORPORATED)
COOLEY
&, CO.
COURTS & CO.
_
—
&
COMPANY
GREEN, ELLIS &, ANDERSON
ROBINSON-HUMPHREY COMPANY
THOMAS
&.
COMPANY
SINGER, DEANE & SCRIBNER
un¬
doubtedly continue, and this will
act as an ameliorating influence,
but it
MERRILL LYNCH, PIERCE, FENNER &, BEANE
our
years
25
a
$25,000,000
672,000-ton
you
years
page
up
capacity.
increase
as
thought the public taste in auto¬
ton
per
It's
had to install equip¬
you
elimi¬
and
bottlenecks at $100
nated
means
only of to¬
mobiles would be 20
which
face, is
we
stockholders'
our
guess
studies
If
requirements of tomorrow.
ment
problem,
must
of
don't
you
day's markets but of the possible
These expenditures
Manpower Problem
Another
and
and
willy-nilly.
To
money.
keep going.
The
which
up
dollars,
them
truckload
a
for
don't give us an additional pound
of coal.
They merely enable us
top of this civilian de¬
mand for the past few months has
demand
more
rec¬
on
military
coal
phur
to
a
We
more.
spending further millions to
get it down.
Meeting the Military Demand
come
be
of
scrap
spend
pro¬
ords in these industries.
Piled
re¬
nine
this year.
These
constitute all-time
of
What kind of fin¬
plants
for
furnaces.
will
millions
metallurgical
are
metal
of
more pipe,
what?
A steel
have guessed wrong, we have lost
as
hundreds
trucks, 4.5 million
tons
strip,
demands, not for today only, but
the next 20 or 30 years?
A
strip mill or a pipe mill costs mil¬
be
can
do
make
we
lions
plus refrigerators, nearly 3.5 mil¬
gas and electric stoves and
million
ore
blast
ishing
built
be
de¬
to
dustry
mil¬
lion
3
must
expand
sponsibility of $100 million to
develop new resources.
The in¬
this
year
the industry has
shipped enough steel to build 1.1
of
million
ships
pipe,
company has only begun when it
has decided to increase its basic
one
say,
Should
or more
before
I'll
to
going
are
we
of
form
or
must also
we
with that steel.
Ore will
the
or
They
hundred forms.
a
capacity,
big customers.
The
big people in the country see the
our
product
little
bars,
decide
we
steel
in
or
of
one
when
should
and
other of
of
means
strip,
or
any
So
year.
General
very
problem.
customers.
our
and
Motors;
with
third,
a
technical
the
steel
A
Republic operation, sometime next
the
expand
mix.
a
Liberia,
is
docks
had
we've
breeches and started building.
We didn't built vast, eye-catching,
Sixty-six
ing its solemn powwows to diag¬
nose and prescribe for the ills of
and
come
to
there
*
complicated,
That
ore
was
to
II
our
As
Instead,
industry
War
steel capacity.
talks
expansions, no more
developments, no more dreams of $75 million.
a
bigger,
better
country
with
higher living standards and
as
iron
Then
;
ago
years
probably
to the steps taken
World
But this is only the beginning.
Railroads, towns power facilities,
our
rounding-out job. This
expansion will cost in excess of
more
what
about
five
will
scrap¬
pulled
really
we
baling
had
industry is concerned and
ability to do it, as far as the
ductions
First,
been
steel
Again the steel industry had its
doubts.
Again
it
disregarded
government pessimism.
Instead,
the
industry followed its own
judgment.
never
or
steel output
as
We
c a r.
a
increas¬
manpower.
largely in wild and unsettled parts
of
three
continents, have been
that.
Republic should do, as far
months
best
have
or
than
more
I'll say this: There has
sky.
kind, of
•
No
to
They told us, with
horror in their voices, that the
nation was right on the brink of
been
doctrine of government
now
present
elephant.
an
all
steel
a
have
You
tons
ended
war
us
future
favorite
government's
whipping boy—the steel industry.
Yet, if we had followed the ad¬
vice of high governmental offi¬
cials,
the country would have
pared to
five years,
help, ca¬
from
nearly
million tons.
of
shortage
and
following
expanded
million
would
World
us
government
some
proponents.
We have heard too
often the crash of the whip as it
descended around the shoulders
the
expanding.
on
what did the Washington planners
the
of
Federal
during
anticipated
the second.
Much
decisions
own
War II soon crashed about
charge and
we
its
it made
went
and
industrial
expanded
how
White
rec¬
responsibility;
first
M.
to do
If
problem
a
or
will
and
increased.
during
spending on the part of steel
and ore companies.
New deposits,
expects
us
is
gun
a
is
have to return
painstaking searching and lib¬
Happily for the country, the
industry did not take the diag¬
nosis and cure too seriously.
In¬
who wants
room
ingly be
•
eral
assail the steel
in this
man
iron
and
serious
problem.
began to reap the results
we
a
cutting
Manpower
more
additional
steel
our
pressing
good
of optimism indicates.
to
source
itself down to size.
about
ammunition,
the
ore and coal,
there
building steel plants.
use
what
do
the
hole in the ground.
political
pastime to
could
are
over
know by long expe¬
the
richest
deposit
we
no
the
con¬
as
materials
transform that
airplane motor,
many manhours to
ton of steel into an
-
don't find
we
future—
far
as
in
raw
Only nature does that.
to have the iron and
ends up a
half-
will
mate-
We can't create
coal.
Up
we
raw
problem is
Our
coal
production
expanded
gentlemen,
cor- ' many manhours to produce a ton
better * of ingot steel, but it takes a great
We've. got
pounds per capita
have
we
.
had
expansion
basic
ages.
or
to almost 1,300 pounds.
As
60
they aren't solved
results of nature's work
merely
same
Some of
be made.
A
rials.
to 1950, steel capacity
from 20 million to 100
while
crease,
doubled.
rose
not
a
a
the
demon¬
steel
—
If
rectly,
industry is
growing, expand¬
aggressive industry.
tons
the
to me,
solved.
1900
increased
Of
working approxi¬
mately 15 million are employed in
„
more ele¬
to
level.
are
motivated in part at: ing at the rate of 120 million tons
: annually.
If we were, where
Whenever a steel company < would we get the men to cut up
plans to expand, it has several and fabricate the additional 20
problems
which
must
first
be million tons?
It doesn't take too
Wright
history
million who
have recognized the. manufacturing.
least by political ambitions.
developments
slightly
the
lusty,
From
just
see
this
that
static, but
ing,
im¬
plied, and the industry should
.pop¬
ular
not
bad
was
TNEC
Dr.
cite
I
strate
transfusions
the
In
language
expansions.
This is below the normal
unemployment
the demands
of the
you
ployed.
pro¬
difficulties which steel expansion
We are told by some that the
entails.
Others
have
been,
it " steel industry should be produc¬
said
just what the government's mas¬
ter minds said in the 1930s.
They
were equally cockeyed.
ills with frequent and
But
industrial
gant
financing. Decries accusation of profiteering in industry.
I'm
remind
industry's
No
seems
not
since 1886.
and
and greater
>
need
vast
60 million
employed, thbrd
only abzout 2 million unem¬
re¬
automobiles, no airplanes, no
frigerators— we could go
Predicts steel producing capacity of 110 million tons in 1952,
First,
sixty-six years ago.
was
With
by
duction there are—and have been
—insistent demands for greater
in the present era of civilization."
.{tainting out switch in attacks of governmental planners on steel
industry from accusation of being over-expanded to one of
being under-expanded, chief executive of large steel producer
recites industry's growth through its own
optimistic planning.
week
are
In the face of the
intensive, but not ex¬
development of industry
tensive,
become" heavier
week.
for further
By CHARLES M. WHITE*
outside
during the last 50
There may be room
.
.
9
-—
—
(2186)
10
creased
vania
Pennsylvania Brevities
'
Gets Fare Increases
The
Public
'months, the Pennsylvania
Transportation
Co.,
which,
it
add
$4,482,000
to
communication
the
too
come
be
to
year
234
Local
renewal
is the cry of the
to
%
of
of
1948.
February.
in
up
Reynolds,
has
last
the
union
will
become
it
J.
Mac-
Sell
S.
The present
will
buses
10-cent school fare
be reduced to ll/z
the same
school rail fare.
•cents,
Charles E.
the
as
"They tell
present
they
year
every
us
have the
don't
how they are always
able to meet
our demands and give the
mem¬
bers the pay increases to which
they are entitled."
Ebert, P.T.C. Presi¬
dent, asid that the fare rises "are
not sufficient to enable the com¬
How
to meet its obligations, earn
the
fair rpturn to which it is
entitled add continue the quality
servicel
of
essential
13-cent
a
cash
fare
plus
transfer charge. Mr.
an
order
appeal
may
be
a
taken
who
P.U.C.
the Su¬
hastens
of
perior Court.
the
that
add
to
the
recommend
doesn't
cbmpany's
he
purchase
for that
stock
On behalf of the
Citizens Com¬
mittee against the
seph
Sharfsin
The uranium, he told a meeting
Fare Rise, Jo¬
and
Jaspan announced
H.
that
of
Jerome
a
curity
super¬
fine
sedeas to halt any increase would
be
sought, pending
Mr.
Sharfsin
former
a
also
recommendation
that
Analysts,
particles
though
the
per
City of Philadelphia acquire the
ton,
E. & G. Brooke Iron
Wilbur-Suchard Chocolate
7
is
ore
The
Vh
%
do
a
Al¬
down.
worth
$70,000
has figured
no one
to extract it at
value.
We solicit inquiries in
the
very
to
far
very
Se¬
probably
veins
which
a
of
in
occurs
in
thick
extend
not
Society
York
New
inches
court appeal.
reiterated
the
construction
a way
cost less than its
he
company,
said,
is
willing to spend "a little money"
in
diamond
the
deposits,
of the
depth
enthusiastic
not
to determine
drilling
about
but
is
possible
results.
,
;
.
A. B.
-
Pulley
General Manifold & Printing
Philadelphia
Bethlehem
out
HERBERT H. BLIZZARD & CO.
1421
CHESTNUT
STREET
LOcust 7-6619
that
"Inquirer,"
Steel
has
Co.
3,000,000-ton
magnetite iron ore
proved
deposit
on
land
a
cently purchased
of
re¬
here, about
near
15 miles southwest of
will
Reading.
centrated
in
about
area
surface
which
body,
ore
2,000
a
is
square-foot
1,000
share
Balderston
believes
that
possible shortages of cobalt,
per
and aluminum-can be
cop¬
the
new
of
to
Gas
stock
of
holders
be
"frozen
&
out"
Electric
with
cash
share and
per
10
McNeely
The company
is considering the
large new plant
to be built adjacent to its present
construction of
Class
"A"
mate
investment
future
holders
panies
of
and
legiti¬
a
in
the
development
growth,
expansion
have
that
interest
and
the
operating
that
this
should
*
main
that
about
Thomas,
of the
and
dis¬
United
Gypsum
has
'
-
Phila.
Chapter of
AIB lo Meet
adelphia Chapter of the American
Institute of Banking will be host
Dividend Rate Increased
Dec.
paying
of
semi-annual to
$1.50,
directors
Company
have
on
a
of
ofr North
decided to put the
quarterly
declared
basis
a
first
*
and
*
-
"
I
'
-
Warner
'
'
'
;
-
of
$1.00
directors
of
Warner
share,
per
Company
brought the 1950 disbursement up
$1.65 paid
in 1949. The regular
quarterly dividend of 40 cents has
declared,
payable
Jan.
of record
15 to stockholders
pected
chapter
to
for
meet
.
the
and
ex¬
all-day
panel discussions.
Boy for Tyson
PHILADELPHIA, Pa.—Mr. and
Mrs. Harold Tyson of Springfield
(Del. Co.), announce the arrival
of a baby boy Dec. 1.
*
'
Mr. Tyson is Executive VicePresident of Tyson ,&
Co., Inc.,
investment bankers of this city. ;
Prescott
Adds
Co.
Joseph Lerner to Staff
.
%
100
Dec.
29.
*
Over
conference.
leaders,
faculty
members
bank personnel officers are
A
special December
a
dividend
been
11, at the Bellevue-Stratford,
regional faculty * personnel
•
..
Company Extra
In declaring
a
«
quarterly
dividend of $1.00 payable Jan. 15.
*
(Special to The Financial Chronicle)
Penna, Pwr. & Lt. "Rights"
Expiring Dec. 13, Pennsylvania
Power & Light Co. is
offering its
stockholders rights to subscribe to
stock
mon
at
ratio of 1
for 7.
per
Ohio.
CLEVELAND,
—
Joseph
William Lerner has become
with
ciated
tional
bers
Prescott
&
asso¬
Co.,
Na¬
City Bank Building, mem¬
of
the
New
Mid¬
and
York
com¬
west Stock
$23
share in the
Proceeds will
be
Exchanges. Mr. Lerner
formerly
was
added to the
company's construc¬
tion fund.
Harshaw
officer
an
(Special
to
The
W. E.
is
Sibley
Financial
Mass.
(Special to The Financial Chronicle)
Albert
affiliated
now
COLUMBUS,
Chronicle)
—
B.
with
Sibley & Co.-, 10 Post Office
Square.
Minot,
He
was
Kendall
formerly
&
Co.;
with
Inc.,
and
Shea & Co., Inc.
Fenwick,
Jr.
Ohio—Robert
become
has
Huntington Bank Building,
of
the
Midwest
change.
He
was
bers
mem¬
Stock
formerly
City, Mo.
workers
Northhampton
and
Lehigh
counties have been awadred an 8cent
was
hour
an
increase,
pay
scheduled
a
5-cent
not due until next
*
al¬
raise
Active
April 1.
Trading Markets
*
Maintained in
It
reported
was
hem's
purchase
of
bracing the deposit
1949
after
air
an
that
and
ence
indicated
location
indicated that
a
of
em¬
made
was
search
section, which included
magnometer,
Bethle¬
acreage
of
use
the
ore.
in
the
of the
pres¬
It
is
pilot shaft will be
sunk next spring to determine the
position of
an
operational shaft to
follow. Actual mining cannot
before
moved
a
be¬
heavy
machinery is
in and set up and is prob¬
year in the future.
Voluntary Pay Raise
By S. K. F.
increases to
The
Philadelphia Suburban
Water Co., serving more than 115,000
customers
in
Montgomery,
Chester,
Delaware
and
Bucks
more
ployees,
runs
incentive
A
company and
"The
pay
(CIO).
statement
issued
made
though "the
-contract
company had
with
respect - to
the
last week filed
union."
STROUD & COMPANY
by
union officials said,
increase,-
to
in¬
CORPORATES
to
Union
joint
between
of
EQUIPMENTS
em¬
basis, were promptly
by the
United' Steel
approved
will lead
schedule
2,800
though the present
Aug. 1, 1952. The
raises, averaging 5V2 cents per
hour for straight
wage earners and
slightly higher for workers on an
counties, adjacent to Philadelphia,
a
than
even
contract
Workers
Water Rate Increase Asked
MUNICIPALS
In
recognition of higher cost-ofliving conditions, SKF Industries,
Inc., has voluntarily granted pay
even
better
-company
Incorporated
even
a
relations
and
PHILADELPHIA 9
firm
wages,
the
•
•
•
/
ALLEXTOWX
<•
'
-
•
'
PITTSBURGH
NEW
Ex¬
with
Prugh, Combest and Land in Kan¬
sas
in
though
C.
asso¬
ciated with John B. Joyce & Co.,
announced
6,000 cement
the
of
Chemical Company.
With J. B. Joyce Co.
With W. E.
Goodhue
EASTON—Victor
35
factory in Philadelphia.
BOSTON,
Cement Workers Get Raise
office,
Mr. Gumpel was for¬
PHILADELPHIA, Pa.—The Phil¬
be
*
York
New
Co.
com¬
recognized by an allocation of in¬
terest in the merged company.
their
a
475,409 shares of additional
believes
Stock
merly with Bendix, Luitweiler &
$7
Gas
New York
satisfactory substiuttes.
'
of
Electric
&
preferred stocks. Holders
Pennsylvania
would
the
company
Pennsylvania
and 7%
all
members of the
Exchange, announce that William
H. Gumpel has become associated
met
also
operating gas compa¬
single company and
Gumpel
Walston, Hoffman & Goodwin,
with
Mr.
'
distribute
from the property.
;
each
a
into
(AFL)
ably
for
of
one
nies
then
Lime
gin
share
of
subsidiary
Workers
facilities for carrying the ore out
by railroad. The Reading's Joanna
station, now closed, is three miles
2,500,-
shares
issuance
to $2.45 per share, compared with
Cement,
Reading Co., stated that he had
interrogated about available
William
au¬
company's proposed plan of
liquidation. As presently set up,
Pennsylvania Gas & Electric Corp.
plans to merge or consolidate its
tions.
been
from
5,000,000
the
on
in 1949.
Wall Street.
*•
common
protective
a
trict representative
Brown, President of
stock,
held.
have
the
depth,
is considered sufficiently high in
quality to warrant mining opera¬
Revelle W.
additional
stock
committee and engaged counsel in
an
effort to force a revision of
in
feet
present
stockholders
to
and
Formerly
con¬
1,500 feet beneath the
and
shares
America
Class "A"
formed
at
$345,-
each
George
H.
McNeely,
Jr.,
a
Philadelphia investor owning 2,600 shares of Pennsylvania Gas &
*
The
000
,
Mr.
the
and
increase
an
common
Two
program.
week,
thorized
Stockholders Objects
To Reorganization
Reading
MORGANTOWN—According to
Bearings Co. of America
Last
spend
cents per share, respectively.
Iron Ore Near
Farquhar
the
I
to
Power,
payments of $2
American
the
on
Insurance
has
rep¬
estimated
are
of $214,884,306
subsidiaries, Potomac Edison and
stock,
1950
share
•with
disclosed
proposes
Electric Corp.
reason.
quarter,
rate of billings
$335,000,000
dividends
Lehigh
accord¬
ing to Robert V. White, President,
the
increased
an
jsales
from earnings and reserves.
sylvania " properties
of
Coal & Navigation Co.,
flat 2-cent
to
sale.,
There is uranium on the Penn¬
Ebert hinted
from
of
com¬
had sought
(or 2 for 25
first
quarter will
000,000, with earnings of about $9
$10,000,000 through the sale
of bonds. The balance will come
McCoy
a
Sales for
$36,000,000 in 1951 in carrying out
its
the
„
will
compared with $3.17 per share
Thompson
company
mo-
government orders.
on
raise
The Real
company
cents token rate)
that
the
to
the
satis¬
are
business
during the third and fourth
per
time
Monongahela
high is up?
pany
munity." The
Mr.
but some¬
money,
through
Walston, Hoffman
'
quarters the company will benefit
%
Thompson,
the
at
normal
second
from
next
Stock
Earle
$60,000,000 back¬
business and"
a
Gumpel With
period of conversion and
that
West Penn Elec. Co.
submitted
already
of
between
To
v
government
resent
*
%
the
that the
than
efefctive
has
that
Thursday, December 7, 1950
..,
Win.
President
states
prospects for 1951
carry
January 27.
tors
-on
that
$7,500,000 for supply and service
improvements. If granted, the new
rates
of
mentum
three
the company has spent more
Corp.,
factory. He believes that the
the letter states, operating
have increased 25% and
years,
Vice-President,
P.T.C.
the
schedule provides for
log
contract
William
to
During
Balderston,
Philco
company
cent
one
President
of West Penn
Electric Co., an¬
a basic 12-cent cash fare
(or four 21 demands which amount to the
nounced that the company plans
-tokens for for 45 cents) for all "equivalent of 57 cents an hour
to raise approximately $7,000,000
-single trolley,
bus or subway- increase per employee and would
through the sale of additional
elevated
rides. Where transfers add a total of $15,000,000 a year to
common stock early in 1951. The
are involved, the flat charge will
operating expenses."
stock may come into the market
be 15 cents and the transfers in¬
Andrew J. Kaelin, President of via
rights to stockholders, or may
terchangeable on any type vehicle the
local, says the company's ap¬ be underwritten, depending on
with the single exception of "Cproach to collective bargaining is market conditions and other fac¬
bus routes on Broad St.
unrealistic.
The new
of
day and was the first sought
by the company since the spring
Transport
the
whose
comes
According
.car-riders.
of
Union
Workers'
about
to
William
company
average
amount
addressed
Philco Corp. Outlook
:
stated that
increase would
by the
-
of
plant of the Citizens Commit¬
tee
Against the Fare Rise, and
the
plain "Ouch!"
com¬
1950
says
and
"Excessive
current
the P.T.C.;
unnecessary," is
late,"
the
to
late in the
reflected in
operations, the fare increase
is expected to stiffen the demands
will
pany
annual revenues.
Reactions are typical: "Too little
Pennsyl¬
Commission.
expenses
benefit
Although
the company's
too
early
by the company.
is
will
placed
be
in the month
the required 10 days' notice
after
the
per
will
fares
new
effect
into
-Utility Commission ordered a new
fare
schedule
for
Philadelphia
and
be
maintained.
eight
After deliberations lasting
estimated
could
with
rates
Public Utility
users
fare
10-cent
a
means
A
properties by which
street railway
Philadelphia Transp. Co.
-
The
Commercial and Financial Chronicle
.
YORK
SCRANTON
•
LANCASTER
Volume 172
Number 4966
.
.
The Commercial and Financial Chronicle
.
(2187)
for
tures
Tax Requirements for
A Balanced Budget
defense
side
have
only a small increase, even
though huge new appropriations
were
is
passed by Congress after the
War began.
Before the
do
with
face
we
long
a
struggle
powerful and insidious
No one can tell what the
a
enemy.
future holds, but we can be certain of one
requirement
must
r—w e
expand
the
end
ures
from
the
Government
to
guide
my
ex¬
did, 1
am
panding
our
would still loom large in my mind.
In the first place, I don't think
the Government has any inside
industrial
ca¬
re-
to
enforce
thinking but,
sure
even if I
that uncertainties
our
information
about
the
intentions
industrial
of the Chinese
strength.
In
tions
this
of
bloc. Everyone is in the/dark.
Policy must be developed in the
light of events, with all the diffi¬
kind
economic con¬
have
of
or
the
the probable ac¬
whole
Communist
the best cards.
You
gentle¬
will play
Wesley Lindow
vital role.
after
My job is to
a
long
and
tortuous
1951.
which should be under¬
more
let
First
be
consider
us
nonmili¬
tary
expenditures, which have
grown
very
sharply in recent
years. I have reviewed the spend¬
ing trends and have attempted to
allow
realistically
in
making
some projections.
Back
in
the
fiscal
year
clear.
notably in farm support expendi¬
tures and in mortgage purchases
by the Federal National Mortgage
Association.
Nonmilitary
cash
outlays are now down to an an¬
nual rate of about $27 billion. I
would like to say that there will
be further reductions of several,
billions.
Now, we can proceed by mak¬
ing two assumptions regarding
military spending, always going
the
War
basis, of course, that World
III
is
not
going to start in
that
this period.. Assumption A is
original hatching in the
military branches to the final pro¬
I
am
that all of
sure
of
us
writing checks a long per¬ and will be at around a
$35 bil¬ would like to cut these activities
twisting route has lion level as of the beginning of to the bone. It is
simply unthink¬
realized that a series of steps which may mean
able that there should
be any,
the calendar year 1952.
•
there
were
many
uncertainties modifications in the figures all
business-as-usual attitude regard¬
Assumption B is that military
about the future, but I certainly along the line. It is like a hazing
ing the civilian programs of Gov¬
didn't expect to deliver this paper line in school in which each fellow spending will go up faster and
will be at a rate of $45 billion at ernment.
^t a time when the headlines were takes a whack at you as you go by.
the beginning of calendar 1952.
Nevertheless, I personally doubt
proclaiming a new crisis every
Ill v determining
a
military In both cases, military aid pro¬ that there/Will be any sizable re¬
hour. I hope I am not completely
spending program, there are at
ductions from the present levels
grams for other countries are in¬
out of date before I finish talking.
least 8 major steps: (1) DeVelop-t
cluded
but not economic assis¬ of nonmilitary spending. I have
There are several things which ment of
programs by the military tance
programs even though they three reasons for this belief:
we ought to know in working out
planning groups in the three ser¬ may have some military motiva¬
a tax program.
(1) Some programs have close
First, of course, is vices. (2) Review and revision
by tion. Also, in both A and B, the connections with
defense, particu-.
the size of the budget and, second, the
Secretary of Defense to pro¬ armed forces are assumed to be
is
larly atomic energy, the Maritime
the
probable gross national duce
a
consolidated
program. somewhere around 3 million. The
Commission, and economic aid
product, which reflects both pro¬ (3) Alterations by the President in
higher spending in Assumption B programs for foreign countries.
duction and the price level. I am
conjunction with the Budget Bur¬ would go mainly for development
There is also the probability that
going to make a number of as¬ eau, the Council of Economic Ad-'
programs.
a
big Civilian Defense Program
sumptions about these matters in visers, the National Security lie-,
One qualifying word should be will come along, but I have not
brder to provide a broad base for sources
Board, and others. (4) Ac¬
said about these estimates of $35 allowed for this.
your thinking about tax problems. tion on the President's requests
and
$45
billion
for
military
(2) A large part of our nonby
the
House
Appropriations
Summary
spending. While this is a range of military expenditures has a con¬
Committee.
(5)
Voting on the.
Perhaps a quick summary will floor of the House. (6) Action by $10 billion, I do not visualize the tractual basis by law and not
figures as • representing the out¬ much is going to be done about
be helpful at the outset. I have the Senate
Appropriations Com¬
developed two packages of as¬ mittee. (7) Voting on the floor of
sumptions—both stated in terms the Senate. (8) The Conference
of annual rates as of Jan. 1, 1952. Committee
between
the
two
In Package A, military spend¬
Houses.
*
This announcement is neither an
taken
ihis
in
When
1951.
assignment
I
accepted
cess
roads and
Welfare-assistance.
fall
in
this
category.
We
must remember that every cut in
such
expenditures hurts some¬
body. It is easy to preach econ¬
omy bpt hard to get these pro¬
grams curtailed much.
Under
the
to
seems
ft
circumstances,
that
me
we
should
as¬
that nonmilitary cash ex¬
penditures will be running at the
rate
of
about
$27 billion for
Package A, and $26 billion for
Package B. I have developed the
$27 billion estimate by working
out
the
following detailed as¬
sumptions
regarding
different
sume
Nonmilitary Expenditures
This
1947,
This will fit the Congressional total
nonmilitary cash outgo ag¬
time schedule very Well. The new'
gregated $20 billion. Then it grew
Congress ought logically to adopt rapidly to $25 billion in fiscal
a
tax program to meet require¬
1948, $28 billion in fiscal 1949,
ments up to around January, 1952 and
over $30 billion in fiscal 1950
—leaving it up to the second ses¬ —the year that ended last June
sion of the Congress to re-exam-' 30. This was swollen
by the cash
ine tax requirements at that time dividend to
veterans. Several re¬
when 1952 requirements will be ductions
have now taken place,
on
route
from the
discuss the size of the Federal tax
program
the ba-'
spending at
billion rate sometime this summer
Second, the actual expenditures
are
only going to be determined
a
to
military spending will hit the $30
culties that this involves.
men
on
am
now going to develop two
complete packages of assumptions
to follow up A and B.
,
pacity
we
calendar
months
I
it
figures
and
test
of
us
changing these contracts. Exam¬
ples are grants to states for public
works
13
So much for military spending.
superior to working out
for either the calendar
Now as to the details of my. year or the fiscal year. It means
thinking, let me start with the that we will set our sights on a
military program where we have, goal about 13 months off and pro¬
uncertainty piled
upon
uncer¬ ceed to analyze the tax situation
tainty. I have no confidential fig¬ required at that time.
Military Program
on
keep
thinking today
our
will
Now
„
circumstances,
most useful for
sis of annual rates of
Foresees little chance of reduced non-military spending.
taxes.
these
seem
It
(3) Still other programs have
political popularity with strong
support among certain parts of
the
population. ; Some
public
pen
rate of $30 billion next June and
will then go considerably higher.
Under
direction.
the
be expected to hap¬
hence and they
give us something to shoot at in
tax planning.
annual rate of perhaps $18 bil¬
lion a year. The President has
said that it will be
running at a
would
♦
be
an
military expenditure of $35 billion and total cash outlay of
$62 billion, which would require additional taxation of $5 bil¬
lion, and (2) a military outlay of $45 billion, and total cash
outlay of $71 billion, which would require $12 billion more
either
that
of what may
War, military spending
running under $15 billion a
year. By now it has advanced to
Mr. Lindow, in predicting tax requirements to balance budget
in fiscal year 1951-52, makes two assumptions, viz: (1) a
in
too high. But as things stand
today these are working estimates
Korean
was
Vice-President, Irving Trust (Co., New York
limit
obvious
$45 billion
estimate may turn out to be too
low. It is also possible that the
$35 billion rate will turn out to
Korean
J 1
By WESLEY LINDOW*
national
shown
11
iod hence. This
I
programs:
Interest
■
,
the
on
about $6 billion.
Veterans'
aids
,
.
public
;
debt
'
benefits
and
about
$5% billion — down from
the pre-Korean level Of about $6
billion because
levels
for,
are
mean
high employment
benefits called
less
benefit programs
and some
expiring.
aid
^International
programs,
about $3 bil¬
allowing for further de¬
other than military,
lions
—
new
and
ECA
in
clines
for
including
programs
possible
aid to
Korea
and economic aid to some
of
military partners.
our
General
domestic
programs
of
$10% billion. This assumes*
that agricultural support programs
will cost very little, that housing
expenditures will be cut sharply
because of mortgage sales by the
Federal National Mortgage Asso¬
about
ciation,
that
public
works
pro¬
harbors and
will be cut
perhaps 10%, that atomic energy
expenditures, Maritime Commis¬
jects (like rivers and
reclamation projects)
.
sion
outlays
TVA
and
develop¬
.
t
•
ing, including military aid to for¬
The
The final product at
the end of
eign countries, is assumed at an this
long road may be quite dif¬
hnnual rate of $35 billion. Total
ferent from the original figures—
cash outlays of the Federal Gov¬
and even then it will Still only
ernment would aggregate $62 bil¬
represent an appropriation. Ac¬
lion. Receipts from the present
tual-spending will follow and will
fax structure would be accruing
lag a good bit. Now, I mention all
at about $57 billion, leaving $5
this not to make a confusing pic-.,
billion of new taxes required to
ture more confusing, but to em¬
balance
the
cash
consolidated
phasize how terribly uncertain an
budget.
estimate
of
military
spending
In Package B, military spend¬ must be. It must be literally true
ing, including aid programs, is that no one knows what the final
assumed at an annual rate of $45
results are going to be a year or
billion—again as of Jan. 1, 1952. two from now. We are all in the
Total Federal cash outlays would
dark, including the people who
aggregate about $71 billion. Re¬ must mold the program and fi¬
ceipts from the present tax struc¬
nally administer it.
ture would be accruing at about
The new budget of the Presi¬
$59 billion, leaving $12 billion of
liew taxes to avoid a cash deficit,
.
Is
I believe that
a
balanced budget
essential under present
This
tions.
means
that
condi¬
tax
re¬
quirements would range from $5
to $12 billion, depending on how
fast
military
would
suggest
program
spending
a
rises.
first-step
I
tax
of $6 to $8 billion, in¬
cluding anything which may come
out of the present
session of Con¬
will be
dent
out
in
a
the
results
because
a
Other
cash
expenditures,
In Package B, nommilitary caSh
outlays are cut from $27 billion
...
$26 billion on the basis of fur¬
relatively small cuts in some
these j programs
stemming
largely from the extra economy
to
ther
of
Continued
be considered later in the spring
when requirements may be more
Corporation
Stock, $5 Par Value
Price $51 Per
Share
Copies of the Prospectus
;
he obtained in any State in which this announcement
of the underwriters, including the undersigned, as may
may
is circulated from only such
>
f
legally offer these securities in compliance with the securities laws of such State.
•
White, Weld & Co.
.
Eastman, Dillon Si Co.
Harriman
Ripley
'
The First Boston Corporation
Blyth & Co., Inc.
Hornblower & Weeks
Si
Co.
Kidder, Peabody Si Co.
period.
Then
a
second step should
Certain.
by Mr. Lindow before thfe
Sixth Conference of Capital Goods Ecolomics, Machinery and Allied Produtts
•An address
Institute, Washington, D. C., Dec. 1, 1950.
We can be certain of one'
thing,
however, and that is that the fate
of military spending will increase
very
page
road
opinion, which shifts about a good
bit. Anything can happen during
the
Congressional
incubation
gress.
on
offer to sell nor a solicitation of an offer to buy any of these securities.
offering is made only by the Prospectus.
Common
sharply during the next 12
point expendi¬
months. Up to this
Incorporated
Lee
>
,
Higginson Corporation
Merrill Lynch, Pierce, Fenner & Beane Smith, Barney SC Co.
Stone 8C Webster Securities
J
December 6,1950
j
"
Union Securities Corporation
Corporation
'
,
,
.
net,
about $2 billion.
International Minerals & Chemical
the
through the Congres¬
sional process will still be ahead
of Us. The President's figure will
have to be tested by
Congres¬
sional sentiment and by public
long
over
200,470 Shares
us a
ultimate
well
lars.
few weeks
guidepost for the full
fiscal year 1952—that is the year
beginning July 1, 1951 and ending
June 30, 1952. Even when we have
the budget estimate of military
spending we will not be certain of
giving
run
and
will
half billion dol¬
NEW ISSUE
<
i
ment expenditures will go up,
that the Post Office deficit
13
12
The Commercial and Financial
(2188)
internal
an
No! As Dark As It Seems!
the
82nd
strict
decide
contends, despite foreboding outlook, pic¬
as dark as it seems, and investors who
Investment analyst
to*
force
adopt
of
of future is not
on
withdraw
to
from
the
at
and
time
same
have
and
new
a
continue to attract the attention of investors.
capa-
more
have
the gold standard; we had no arti- ble Secretary of State. If some
ficial control over interest rates or all of these possibilities should
the highest point reached since tending to keep them very low; come to pass and the true strength
Sept. 18. 1930, when it stood at we did not have an administra- of our free economy be allowed
tion
in
Washington which used to develop, it is likely that a tre234.18.
This
Dow-Jones in-
closed at 233.81,
average
every
state of affairs
caused
has
tion
so
ing over us of an invasion by some
foreign enemy. In fact, everything
might
be advisable to
it
seemed to be just perfect, except,
for prohibition. Conse¬
quently, it is understandable that
stocks should sell up to 40 times
their earnings estimates. Purchas¬
ers believed that such prosperity,
perhaps,
reexamine the
general
over¬
all situation in
to
effort
an
determine
whether
price of
secu¬
ly
a
are
real¬
high
as
on
Curtis
comparative
as
they
Kuile
ter
low
basis
selling in 1929
compared
as
analysis it might be well with those of the same corporato begin with the reminder that tions today.
our
currency has been devalued
The comparisons in Table II
since that time, and that actually seem
to indicate that whereas
the dollar is now worth only 56% there was entirely too much opretically
about
prices
stock
44%
higher
the
on
be
fidence in the future.
same
*
Another
important
point
the
is
North
the
for
war
We
not
are
United
in
population
States in
recent
Steel
at
their
demonstrating
be
the
in
confidence
of
future
the
United States and will be in ^
position
the developments which should
™d probably will take place in
Salomon Bros. Partner
the
well.
A
in
place in our
in the past 20 years.
Merrill D. Freeman, manager of
the
armed strength
up to
municipal
bond
department,
Street. New York City, Exchange,
members
of the New York Stock
on
in
not
were
Restrictions for
1929.
in
over
which
effort
an
force
some
increase
to
parently
in
As against this dark and fore-
in-
Admit Middendorf
Henry S. Middendorf, manager
above
in
population
there
would
attempt
any
be
done
with
in the firm
that Mao should
suppose
sep-
changes
*J, k
State; suppose Russia should have
now
realiza-
totally
different
In
than
1929
they
we
TABLE
Steel
on
and
is
a
member
of
Cotton
Corn
will
production
production, bushels
production, bbls
TABLE
'
<
Divid.
Market
Yield
150,697,361
95,360,000
6,000,000
9,869,000
3,117,967,000
1,010,069,000
890,000,000
1,900,000.000
91,000,000,000
323,660,000,000
100)
124
215
=
8/2/29
%
10
198
5.02
21.69
10
262
3.80
20.37
10
270
3.69
Est.
Market
Per Share
Divid.
12.2
Union
Sell
1950 Earn.
13.7
Chesapeake & Ohio.
13.5
Earn.
Yield
X
4.41
6.31
show
312
1.92
25.0
4.80
3.00
57
5.22
3.09
27.0
7
5.35
82
6.52
11.7
8.97
5.50
375
1.46
41.7
4.50
3.80
49 y2
7.67
11.0
National Biscuit
8.21
7.50
205
3.62
25.2
4.75
1.875
57
3.29
12.0
124
4.39
11.4
Standard Oil N. J.__
Bethlehem Steel
11.01
General Motors
5.50
3.50
2.30
35
6.57
5
121
88
5.67
4.10
12
5.49
3.60
70
5.13
12.7
9
_
4.94
3
74
4.06
15.0
18
9.75
American Tel. & Tel.
9.10
8
290
2.75
31.9
12
9
11.16
8
384
2.08
34.5
124
1.99
17.6
70
2.82
20.2
Chrysler
___
Detroit Edison
Harvester
7.11
2.50
Pacific Gas & Elec._
3.52
.
2
Internat'l
Investment
determinants
Singer Mfg
Call money
27.47
_
1
#.
*
-
13
fft'
548
4
8%
2.37
19.8
46
6
in
the past has
dividend
policies.
for
insurance
a
8.91
3.82
12.75
47
69
:•
5.23
14.10
3.83
5.95
12.6
1.20
23
5.22
10.7
4.30
1.95
32
2.40
2
32
2.15
-
at
a
business
are
of the primary
one
favorable results being
likely one of the main
dividend policy on the part of
liberal
more
been
The
many
companies.
Some of the changes
made this year by major companies are
discussed below.
end payment of
Company of North America recently made
$1.50
semi-annual
a
a
an
year-
share. Formerly, INA has paid dividends
According to the latest announcement
a
basis.
beginning Jan. 15, 1951, dividends will be paid quarterly with a
$1.00 payment on that date. The $1.50 year-end payment to be
paid Dec. 20, will bring total payments for this year to S5.00 as
against $3.50 and 20% in stock in 1949. If an adjustment is made
dividend, the present payment of $5.00 compares with
Continental
The
cash payment
Insurance
:i ?
269
12
18
increased
Company has also
its
considerably during the year.
year-end
of 50
payment
cents
a
share recently declared
put
equivalent basis the amount is equal to $2.80 a share on
present shares for this year as against $1.76 a share in 1949.
on an
the
Some of the other
1950
companies which have increased their pay¬
include: Agricultural Insurance $3.50 a share for
compared with $3.00 last year; American Insurance $0.90
ments this
as
year
compared with $0.80 in 1949; Fireman's Fund $3.20 for 1950 includ¬
ing a 60 cent extra payable Dec. 15, against $2.60 a share last year.
The Home Insurance this year
has paid two semi-annual divi-,,
In 1949 the company
paid
dividend of 65 cents and one of 75 cents equal to $1.35
one
for the year.
American
Great
have
which
Insurance
another
is
Disbursements for 1950 equal $1.50 a
at the
1949
If
share and 25% in stock paid
adjusted for the stock dividend the payments in
equivalent to $1.04 on the present stock.'
were
Boston Insurance also paid a
year
and has announced
Dec.
8
on
was
companies
stock dividend.
a
Last year payments of $1.30 a share
beginning of the year.
made.
were
those
of
their payment and paid
increased
stock dividend at the end of last
that stockholders will be asked to vote
a--proposal to increase the capital from $4,500,000 to
dividend. Last year the dividend in
12V2%.
The' total payment for 1950
is equal to $2.65 a share against
Adjusting to the present shares, last year's
is equal to $2.13. >
$2.40 plus stock in 1949.
payment
Phoenix Insurance has
distributed $3.25
a
share this year as
shares
Earlier this year, however, the company paid
stock, so that payments this year on the basis of the present
are equal to $2.90 a share as against an amount equal to
$2.80
share in 1949.
against $3.50 in 1949.
25% in
a
the current
complete list, as many other companies
distributions in
payments and increased their
period.
-
,
1%%
6.10
4.46
of INDIA, LIMITED
and
INSURANCE
STOCKS
Bankers
7.44
13.3
14.9
to
the
Government
Office:
26,
London,
Laird, Bissell & Meeds
Colony,
Burma, Ceylon, Kenya
Kericho, Kenya, and Aden
and
Zanzibar
Exchange
Subscribed Capital
New York Curb
Exchange
Paid-up
120 BROADWAY, NEW
YORK 5, N. Y.
Telephone: BArclay
Teletype—NY
<-3500
1-1248-49
(L. A. Gibbs, Manager Trading
Dept.)
Specialists in Bank Stocks
Reserve
The
Bishopsgate,
E. C.
in India,
Members New York Stock
Members
in
Kenya Colony and Uganda
Head
Branches
Bell
6.24
NATIONAL BANK
BANK
7.34
151
-
1
income
of
in this end of the
achieved
reasons
10.0
•
.
investment income should
record level.
11.9
188
12.60
_
year
good improvement over the results of 1949 and be
a
8.25
General Electric-
t
the very favorable record of last year,
7.55
99
5.85
_
making larger payments this
are
While underwriting results in 1950 will not duplicate
5.45
34
6.25
12
6.66
1.50
4.50
%
60
6
_
on
Earn.
11/21/50
4
11
6.99
duPont
of them
most
have made similar
Estimated
X
14.48
Allied Chem. & Dye
shows that
This is by no means a
Sell
.X
■
1950
II
Atlantic Coast Line_
Pacific
to
are
-1950-
Actual
Per Share
StrL
Both
A
kwh._
-1929-
1929 Earn.
Stock ExJosenh
Jan. 1.
on
13.500,000
2,000,000,000
885,000,000
Electric energy production,
Personal inc. (value 1935-39
dynamic effect
dends of 80 cents for a total of $1.60 a share.
and Harotd
45,500,000
4,587,900
production, bales.
Petroleum
the Cornell
New York
Society of Security Analysts.
i
Stock
1.
admit
122,000,000
production, bushels
Wheat
a
of the needs of the stockholder.
awareness
an
than in 1949.
partner
I
production, tons
Automobile
have
can
comparison of the major companies in the insurance field
A
$5,000,000 by a 111/9% stock
Population
were
were
shown
stock
""The writer, who is connected with
Hallgarten & Co., New York City, is a
graduate
mechanical
engineer,
Cornell
University. He has engaged in engineer¬
ing and the investment business for many
Engineering Society and the
Jan.
a
1Q9Q
\
years
York
associated with the firm,
tion that certain factors today are
at that time.
on
China as his own independent partnership
compare
the
New
York and Los Angeles
arate from Russia, as Tito did, and
£ecide t0 —ate.C—st
to
the
Exchange, will become
Hes5
present prices with those of^1929
should
of
Street,
corre-
a
sponding increase in the demand
cerned,
members
Congress
19
shown
as
be
Co.,
&
boding picture, it might be well
Daniel Reeves to Admit
to look at certain possibilities
which might change the whole
BEVERLY HILLS, Calif.—Danconfused state of affairs. Suppose,
for example, that India should iel Reeves & Co., 398 South Bevswitch to full support of the Al- erly Drive, members of the New
possibly have resulted in
causing cotton, for example, to
inove
contrary
to
the
general
trend.
It would ordinarily stand
to, reason that with such an income,
crease
tremendous mistake is
being rectified.
crops,
farm
a
volume
earnings. However, the larger payments have not been confined
any special group as banks and insurance companies have also
adjustment is made for the stock dividend and the payments are
ers
tion
spectacular payments have been among the indus¬
more
to
A
of the local office of Wood, Struth-
controls
The
brings payments for this year to $3.00 plus 25% in stock paid in
March. Last year a total of $2.20 a share was distributed.
If an
Wood, Struthers to
possibly four
Controls are, being
planned, stockpiles created and
heavy new taxes imposed.
Ap-
have certain
agricultural produc-
conservative proportion of the earnings being
trial companies where high
Jan. 1.
1950,.at should be borne in mind million men.
we
a
$2.91 last year.
that
present
represent
for the stock
all mustered out, every effort is
now being made to rebuild our
econ-
In comparing the year 1929 with
at
ments
realized.
The Insurance
Merril! Freeman to Be
year
Most of the major companies have made larger disbursements'!
during 1950 reflecting an extremely favorable period of operations '
an improved financial position.
Although higher taxes have
been one of the major uncertainties in the outlook for future
operations, most managements have been more generous with dis¬
tributions this year than ever before.
Nevertheless, current pay¬
important change in its dividend policy and also declared
now
with
as
Payments this
the outstanding features of the financial scene
of
one
and
our economic anairs.
years.
that have taken
omy
will
ly
only with
but
Koreans
Communists
Chinese
tremendous
a
the great deal of pressure is being
If brought to bear to try and conthis factor is taken in conjunction vince the United States' citizens
with the growth of industrial and that Russia intends to wage war
agricultural production, it may be with us in the near future. All
easier to comprehend the major of the ordnance that was given
economic trends that have been away, scrapped or sold for a frac¬
instrumental in causing securities tion of its value in the past four
to
sell
at
their present
levels. years is now being frantically re¬
Table I may serve to present a placed. Although the armed forces
brief picture of certain changes of our country were practically
increase
purchase
or
National
as
been
will undoubtedly establish a record.
and
on
in
engaged
earnings.
consideration
stocks
50, Bethlehem Steel at 45, Stand¬
ard Oil of New Jersey at 88, Allied
timism in 1929, there is today possibly too little courage and con¬
theo-
should
hold
who
Investors
such
much money.
make
almost never
at
In this
of its value 20 years ago, so
4
that
forever.
existed
thought
yields at which certain stocks
were
20 years ago.
were
mendous impetus would be given
to business and to the security
markets in our United States,
The picture is not as dark as
it seems. The future may be a lot
brighter than the present seemingly dismal outlook. Timid souls
Chemical at 58, Union Carbide at
time, could just go on
52, General Electric at 49, CleveTable II will serve to show the land Electric Illuminating at 41,
abnormally
high
price-earnings Singer Manufacturing at 265 and
sure¬
ratios and seemingly ridiculously Union Pacific Railroad at "
they
as
the
rities
and had
war
any
major threat supposedly hang-
no
apprehensive
that
not in
were
we
inves¬
many
tors to become
effort to exercise jurisdicthe affairs of citizens;
over
Increased dividend declarations by a wide range of companies* '
might
would dare to attack "iis. We
even
JOHNSON
Week—Insurance Stocks
This
augment the defenses of our own
country so that no foreign nation
economic affairs.
On Nov. 22, the
By H. E.
some
widespread foreign entan¬
our
glements
purchase or hold certain selected stocks may benefit financially
from developments which probably will take place .in our
dustrial
Bank and Insurance Stocks
a
non-military
expenditures; suppose we should
economy
Thursday, December 7, 1950
.
.
,
suppose
should
Administration
the
By CURTIS ter KUILE
ture
revolution;
Congress
Chronicle
Bank
Capital
Fund
£4.000,000
£2,000,000
£2,500,000
conducts
benking and
every description ol
exchange business
Trusteeships and Executorships
also
undertaken
'
.
'
Volume
172
Number 4966
.
'
K«:
Continued
from
The Commercial and Financial Chronicle
•.
.
*•'' '•
'
■'
•
• •'
.
(2189)
41
-
*
tween
Tax
:
a $5 billion program and a
$12 billion program is enormous,
•
r
^
stances?
pressure
tremendous
~
Adding together military and
lion-military
outlays,
we
thus
grams now
reach
have
total
Package
A
of
and
cash
total
not
be
called
elude
ment
the
productive
higher
a
po-
tential.
Personal income in this pattern
-
would be
to $246 billion com-
up
so-
pared with the level of $225 bil-
lion in the third quarter this year,
of
Govern-
In considering
impact of Govern-
consolidated
underway, and (b) the
shift of many people to jobs which
ex-
ment, it is better to. deal with the
cash
pro-
the
funds.
economic
equipment
new
which
figures
operations
trust
should
and
with
confused
the
in
figures for
are
outgo
budget
in
billion
$71
Package B. These
the
billion
$62
The
required
taxes of $5
new
billion have been arbitrarily assigned as follows: $3 billion from
corporations and $2 billion from
individuals. I would have put it at
figures.
50-50 but I assumed that the presFederal
Now let
Receipts
receipts. How much will the
ent
tax laws
bring in in
pres-
revenues
of
January, 1952? To answer
this question I have worked out
as
series
effort
ent
turn to the matter of
us
of
increase
to
would
taxes
raise
to
$3
on some
rather
billion
than the $4 billion the administration has requested. Then the other
figures for each of
the two Packages, assuming also
the
probable levels of business
billion probably would come
directly from individuals,
In Pattern B, tax requirements
conditions
would be about $71 billion to meet
a
under
sumptions.
To
here, this is like
tail
for
I
these
two
certain
a
as-
extent
dog chasing his
a
have
had
to
assume
$2
cash
outlays.
something about tax increases in
making my projections
of
the
pressures
business situation.
creases
this
For
sumed
I
purpose
that
creased
taxes
enough
have
would
to
as-
to
government
cash
would
be
Of
equal
course,
from
to
use
national
billion annual
be
rate
of
increase
an
$325
January,
in
This
B.
of
" program
sures
about
If
once.
calculated
on
the basis of the tax
liability which
be accruing to
would
currently
taxpayers whether
would
to
be
the
not
or
they
ti°n
of
taxes
tax program
a new
lion would be
It is to be
will
gram
ably such
is
structure.
Under
lties
at
estate
Assumption A, tax liabil-
would
have
rate of
a
ent
tax
about
$62
be
to
$57
would
billion
and
required
$5 billion.
The
present tax structure
strong
very
one
as
you
is
can
1952.
In
have
assumed
making this
product
billion
this
will
year
in
to
estimate,
I
national
from
the
the third
an
ac-
January,
that gross
rise
level
in
a
see
from the fact that it would be
cruing at $57 billion
of
annual
$284
gift
taxes),
corporate
about
taxes,
$5
and
billion
$2
miscellaneous
that
of
excises
taxes.
these
I
and
want
to
purely
were
arbitrary assumptions used to fill
in the picture. I am not trying to
pre-judge the recommendations
coming from the other speakers,
but something had to be assumed
in the way of new taxes or else
new
of
Taxes
what
to
be
appro-
patterns
a
from
another
is
why I had to astaxes were going
in making the esti-
new
would
the
present
tax
bring in in the two
assumptions I have
of
developed.
..
"J
I
Living necessitated by
...
.
^ J-
used
are
effec¬
^ f
Tellier, of Tellier
mental programs.
He
on
the contrary, inflation
the
distributor
told
inets who is
his firm.
audience
the
manufacturer
of
about
television
would have driven prices up much
and necessitated a complete
offering stock through
that
purchasing
power
is
A. variation of this
gram
the
same
pioneer
station.
a
mil-
Bain Joins Courts
(Special to The Financial
BURLINGTON,
E.
Bain
with
has
become
&
Courts
N.
Co.
Chronicle)
C.—Walter
associated
of
Atlanta,
members of
the New York Stock
He
previously
+b
the relation of taxes
itary effort is ' to pay for it to the
Exchange.
to the burden of rearmament. For
fullest Possible extent on a pay-
Burlington representative for Mc-
society
as-you-go
considered
•
is
as a
whole, the burden of
This announcement is not an
_
_
was
_
basis since in economic
ojjerojsecuritiesjor sale
or a
Daniel Lewis & Co.
solicitation oj an ojjer to buy securities.
December 6, 1950
New Issue
reexamination of both sides of the
Federal
200,000 Shares
greater degree of inflation.
budget
on
the
basis of
a
$315 billion in January, 1952. This
is
an
increase of about 11%, which
be accounted for
partly by
Ne*v Taxes Required
would
an
increase in physical production
and
partly
Prices.
The
by
in
should
in
physical
account
for
promore
than
half of the increase in gross
product for the following reasons:
(1)
that
expansion in the labor force,
(2) extension of the
work week,
(3) greater output per manhour.
The
greater
productivity
new
taxes
to the
required
to
fact
Texas Eastern Transmission
Corporation
bal-
the cash consolidated budget
to $5 billion in Assumption A
ance
run
increase
duction
increase
an
All this boils down
Preferred Stock, 4.50% Convertible Series
and to $12 billion in Assumption
B-
These
two
figures
are
(Par Value $100
This is not
conclusion.
a
Price $100 per
particularly happy
The
difference
per
Share)
asso-
ciated with assumed military expeditures of $35 billion and $45
billion, respectively, representing
annual rates as of Jan. 1, 1952.
and
share
plus accrued dividends from December 1, 1950
be-
SUMMARY TABLE
Copies oj the prospectus may be obtainedjrom such oj the undersigned
(who are among the underwriters named in the prospectus) as may
legally ojjer these securities under applicable securities laws.
Annual Rates January 1, 1952
'
/
(In billions of dollars)
Assumption Assumption
A
B
Federal cash outgo:
Budget Expenditures
Defense
and
Military
/
Aid___
$35
......
Total
Federal cash
Present
cash
2
62
71
57
outgo
59
Blyth & Co., Inc.
Lazard Freres & Co.
income—liability basis*
law
New taxes assumed to avoid deficit
5
62
315
Personal
246
Lehman Brothers
Kidder, Peabody & Co.
Merrill Lynch, Pierce, Fenner
& Beane
71
Gross national product..
Goldman, Sachs & Co.
•
12
income
Total
.
Dillon, Read & Co. Inc.
24
2
budget
Other cash outgo—net___
$45
25
Other
"Cash
cash
income
'ncome
basis plus current acruals
of tax
-
1 "
*
Union Securities
325
liability by taxpayers.
Stone & Webster Securities
Smith, Barney & Co.
254
1 t
pro¬
repeated last night on
was
being
stored up in the fomKbf pieces of
PaPcr represented by the public
debt- Present problems are made
more severe and future problems
are multiplied. Many more government controls over economic
activities will be invoked. The
to face the burden of
He
more
rate
a
cab¬
medium."
the
of
burden among the people. A continuance of deficits also means
way
.
Merchandise Secure.
What Walter
adjunct to taxes.
final
becomes
what
bur¬
explained a little of
rcal burden of rearmament among
the background of the company
different groups of our citizens,
and the purpose of the stock issue.
Taxes do not create the restriction
Mr. Tellier stated the present
in the standard of living which
may be imposed by the military programs "are in the nature of an
program, they simply distribute experiment and results will be a
factor in our future plans for con¬
it among the people. The failure
tinued and more extensive utiliza¬
to levy enough taxes does not
tion of this new merchandising
mean that the burden has been
that tax dol-
avoided;
levied
of
the
ob-
This
source.
an
analysis, the role
°f taxes is to help apportion the
completely different inflationary potential than
sume
standard of
indicated deficit of $12 billion
an
quarter
of
In
controls
as
one
taken
will like the extra tax
volume of good- and services & Co., New York City, investment
available to them. There will thus bankers, said he believed to be the
have been a reconciliation of the first use of television to merchan¬
financial side of the coin with the dise a specific security occurred
physical side. Supply and demand on Tuesday night, Dec. 5, when:
are. kept pretty well in balance, he appeared on WPIX in the
This, of course, assumes that opening of a series of experi¬
since it is
have
dollar
what the government is
a
taxes
military requirements.
wih correspond with the physical
taxes
point of view it
deal where the
from
and
budget is balanced,
us
excuse
any
enough tot
balanced budget. None
raising
den, but it will help if we keep
things in perspective and remem-i
ber that the extra taxes represent •
our share of the limitations on the i
income left to civilians after taxes
dollar taken from
a
*
yield stress
taxes would amount to about
new
billion
accruing about
billion. The pres-
^structure
and
this
source may
laws
.
Role
great
a
come
levying its
of
is
there
think
not
i
couple
credit
From
matters
the
claim
support
don't
Video Used to
lars have a double function: (1)
they provide the government with
spending money, and
(2)
they
take that money away from somebody else and, therefore, have an
important anti-inflationary function.
-
reasons
goods and services. It follows also
that in this way the volume of
closing, I think it is
taxes
(including
off
tively
you
be
ought to be
billion rate.
In
>
total war, r
why a
in
year
a
would
taking from the physical flow of
the* first
priate to remind
in
to
pur_
certain volume of good
a
ance
be
$5 billion of in-
income
pro-
the New Year.
Economic
js
into
fit
that the
then taxes will take away enough
(rom the fIow of income to bal_
with
The
d0 taxes
say
taxes
services. If the
considered in the spring,
primary consideration, of
course,
on
whether or not the
military
spending
program
is
heading towards the $45 billion
annual rate rather than the $35
to
dividual
tax
there
Prefer-
expedited.
program
a
on
January.
in
0f
where
would
government
underway, a second bite ought
present
our
order
j
pose
in
of $2 to $4 bil-
After this first bite of
mates
about
of
now
this?
then
hoped that this
within
enacted
consist
in
in
be
of months in
significance
payments
that
economic
under
Personal income would be up to
an estimated level of $254 billion,
enacted
is
$4 billion present goal
s
a
making cash
government
the
prices,
bil-
closing days of the present
Congress to meet the administra-
working out the figures in
Package B, I again assumed that
the required new taxes would be
enacted, and in this case would
quickly,
The accrual basis pretty well refleets
increased
and
pres-
the
Vious that
been
bill
tax
a
anyway.
balanced
budget would be too
words, the real stand- drastic medicine and a growth in
ard of living is determined by the public debt would be the lesser
But with
a
required tax
physical level of goods and serv- evil.
ices available to civilians after the program this next year of the
I
have outlined, I
government takes its bite of the magnitudes
a
first step a $6 to $8
a
production
have
$100 billion
produce
as
go
In other
lion tax program be undertaken at
dollars
figures
This is, therefore, the
that
would be roughly equally divided
as
between
increased
physical
levels.
use.
step at which the standard of living of civilians is being set.
$5
inflationary
be almost entirely
we
as
v
are
for
14% from the level in the third
quarter this year and I believe it
income
civilian
mini-
a
it must
paid for
surplus in the
budget rather than simply balanc- goods and services for government
ing it out evenly. This suggests use.
collections
lag behind rising
However, the tax
.
strong and it would be
are
ment of taxes and the actual payments to the government, and tax
also
.
need
we
of
desirable to have
up
seems
estimated
an
Assumption
under
would
It
product
gross
1952
going
further.
reasonable
lag between the enact-
a
the
than under Pattern A
doubtful that tax in-
prices
keep
to this ques.
terms
.
taken by the
What I have just said is par¬
;yv-j
ernment. This sets the limitation ticularly appropriate in a period
on the remaining goods and servlike the present.
If the govern¬
ices which will be available for ment were going to spend over
under the cir,cum-
answer
also know that
would be effective enough
the
balance
expenditures.
there is
to
is
it
somewhat
budget—i.e., that cash receipts of
the
and
in-
be
this pattern
In
higher government spending
would mean greater inflationary
set
we
billion to
simply balance the budget under
the conservative assumption regarding military expenditures. We
corporate
compromised
be
somewhere along the line
basis
My
'We know that
mum
military expenditures' would reflect two things: (a) the
as
rise.
a
Budget
*
•
goal should
a
taxes
new
tion is as follows:
A Balanced
*■»'
f
and services
for
Requirements lor
>
the military effort is levied when
the spending is done and the goods
What sort of
11
page
13
■
Corporation
Corporation
White, Weld & Co.
14
The Commercial and Financial Chronicle
(2190)
"The outbreak of
Joins Merrill Lynch
East
(Special to The Financial Chronicle)
four
Henry Vance Elected
President
Succeeds Anderson
Who Remains
Directors of
this
Prospectus
your
upon
National
research
securities
&
corporation
NEW YORK
120 BROADWAY,
5, N. Y.
conflict
third world
o
future
the
in
f
of
American
our
addition offers
important tax benefits to individ¬
Mutual
costs
h i
uals who desire to transfer invest¬
a
decline in over-all corporate
profits from current record-break¬
ing levels; but the sustained large
volume of production now in pros¬
in
Million
Hundred
and
investment dealer
or
CALVIN BULLOCK
Established 1894
One Wall Street
New York
as
a
ner
of
Boston
^
Henry T. Vance
part-
report of Affiliated
A
partner of Vance, Sanders &
Co., principal underwriter for the
appreciation increased $8,353,379 so that for the year there
was an over-all increase, realized
and
unrealized, of $15,822,084.
Dividend
Second Fund, Inc., and chairman
of the board of The Bond Fund of
New
Boston.
Shares
-
Out¬
Shares
for
of
assets
net
Shares, Inc.,
Oct. 31,
on
were
the
43% in Bonds and Cash
largest for the close of any fiscal
year in the history of the mutual
Fully Administered Fund
the
highest
bonds
and
rating,
cash
as
announced
was
The balance of 57%
primarily in
with
cient
of
different
in¬
of
materials
to
Prospectus
may
be obtained from
type that
the
should
record
high
spending by
prosper
income
consum¬
Keystone Company
of Boston
50
Congress Street
Boston 9, Massachusetts
and
with
share
on
share
on
$79,715,958, or $1.60
April 30, 1950.
During the 1950 fiscal
idends
year
per
Stock
Common
the
of
report
on
cents a
paid from net invest¬
per
year.
from
net
recent message to its share¬
holders the corporation, comment ¬
ing
made
was
cents
a
on
its percentage of defensive
reserve, stated that "because of
the current uncertainties of the
investment
foreign situation it is felt that this
increased
-reserve
should
prove
advantageous to shareholders, who
will recall the effective
use
which
was
made of it at the outbreak of
in Korea."
•
-
.
Shares'.Gift Certificate
3V2
income,
cents
from
net
a
a
share
securities:
share in 1949.
7
Oct.
31,
1950,
was
$15*360,608
greater than the prices at which
they were purchased by* Dividend
Shares. A year earlier the market
value was $7,308,826 greater than
cost.
Bullock
said
maintained
that the
Fund
shows
S 3
$14,165,478 at the
close of October of this year, equal
to
$14.42
share
per
982,483
on
shares, which compares with net
assets of $12,362,834 on
Oct. 31,
equivalent to $10.96
1.128,207 shares.
1949,
share
and
The firm, a member of the New
York Stock
Exchange, and one of
a
materially
houses
steel
stocks
were
holders
per
stock,
held
for
80,000
value,
par
at the
$52
at
one
common
stock
per
share for
stock
common
close of business Dec.
4, 1950. Subscription rights will
expire at 3 p.m. Dec. 19, 1950.
Proceeds
pany's
has
the
from
will
stock
be
of
sale
added
general
in
the
to
funds
securities.
the
com¬
be in¬
offering
to
The
oversubscribed
been
and
of
Balanced
Howard
for
cents
48
Fund
set
Fund
from
record
new
investment
investment
pay¬
income
companies.
payments for the Balanced
this year are $1.23, and
Fund for
The First Boston
Lisle
of
agers
Corp., Brown,
Marshall
&
Struthers
& Co.
and
Wood,
joint
were
man¬
of 23 investment
group
a
firms which underwrote the offer.
is
convertible
par value,
price of $35.50 per
preferred
stock, $10
common
the
initial
common
stock
until Jan.
1, 1957, and thereafter at $40 sub¬
ject to adjustments.
Holders of
the
will be entitled to
preferred
receive cumulative dividends from
Dec.
10, 1950, at the annual rate
payable quarterly on March,
June, September and Dec. 10. The
stock is redeemable at the option
of $2
of the company at
from
$55
per
Dec.
85 cents for the Stock Fund.
31,
1952,
prices ranging
on or before
share
to
$52
share
per
after Dec. 31, 1960.
Lexington Files 500,000 Shs.
Lexington Trust Fund, spon¬
by American Trusteed
sored
Funds, Inc., New York, on Dec. 4
filed
with
the
closed.
books
share of
declarations
dividend
Trustees
both
for
$10
share at the rate of
at
Make Record Payments
Total
to
stock
common
subscribe
to
The
Eaton & Howard Funds
Stock
its
Insur¬
offered
5
each five shares of
into
&
Dec.
shares of $2 convertible preferred
on
the
of
rights
Washington
on
the Securities
and
THE FULLY
Ex¬
change Commission a registration
covering
500,000
Lex¬
<
ADMINISTERED
ington Trust shares, to be sold at
net asset value plus a selling fee
FUND
OF
EATON & HOWARD
Group Securities, inc.
BALANCED FUND
end dividend front
income
of
48
a
A Balanced Fund
year-
investment
cents
share,
payable December 23. 1950 to
a
shareholders .of record at 4:00.
p.m., December 11,1950.
24 Federal Strict, Boston
EATON &
"
>'~V
HOWARD*
STOCK FUND
A
Trustees have declared
a
year-
of
40
cents
payable December 23, 1950 to
63 Wall
shareholders of recdrd at 4:00
p.m.,
24
your
RE£UEST
investment dealer or
Distributors Group,-lnco«|BOrated
share,
a
PROSPECTUS OI*
from
^
end dividend from investment
Street, New York 5, N. Y;.
December 11, 1950.
Boston
Federal Street,
EATON & HOWARD
BALANCED FUND
PROSPECTUSES
MAY
~
THESE TWO MANAGED INVESTMENT FUNDS
OF
UEOBTAINED
FROM
EATON
,
.
STOCK FUND
YOUR
INVESTMENT
DEALER
OI<
& HOWARD
INCORPORATED
BOSTON
IN VEST MEIST MANAGERS FOR OVER
TWENTY-FIVE YEARS
increased
and principal reduc¬
tions took place in the utility and
offering a mu¬ building supply
tual funds service, introduced the
groups, he stated.
Co.
ance
fund
substantially
fully invested position in care¬
fully selected, broadly diversified*
good quality stocks. As of Oct. 31.
investment securities.
retail
Stock Underwritten
Providence
EATON & HOWARD
Mr.
gift certificate method of common stocks amounted to 89%'
acquiring mutual fund shares has of total net assets as compared
been
made
available
again by with 87.6% on April 30,' 1950."
Kidder, Peabody & Co. to those During the six-month, period to
contemplating Christmas gifts of Oct. 31 holdings of oil, railroad
the
Fidelity Investment Associates,
Inc., Boston, on Nov. 29 filed v/ith
the Securities and Exchange Com¬
mission a registration statement
covering 20,000 shares of $5 par
value
capital stock.
No under¬
of
assets
net
income
Market value of investments on
"has
Kidder, Peabody Offers
of
profits in 1950 compared with 1.65"
a
Fidelity Files 20,000 Shares
vested
Speculative
Trustees have declared
div¬
amounting to 8V2
compared with 7.35
share in the previous
In addition to the dividends
cents
.
.
Investors
Management Fund,
Inc., New York, filed on Nov. 29 a
registration statement "with the
shares.
with $70,002,974,
Oct. 31, 1949,
compared
$1.45 a share
distribution
ers.
The
The
or
totaled
a
outstanding
These
were
COMMON STOCKS
(Series S1-S2-S3-S4)
31
income
war
f
50,956.652
on
ment
even
the
In
Oct.
on
share
a
available for
{
assets
stocks of "service" industries
from
INVESTMENT FUNDS
The
statement
r
$82,490,705, equal to $1.62
high level of opera¬
during a war economy
tions
Certificates of Participation in
(Series K1-K2)
17
year-end.
Net
invest¬
stocks di¬
special: emphasis
allocation
maintain
Funds
PREFERRED STOCKS
Group
was
common
among
and
BONDS
it
upon the stocks
of companies
owning raw materials, stocks of
companies likely to receive suffi¬
Custodian
(Series B1-B2-B3-B4)
by
30,
Securities, Inc.
Keystone
IN
Nov.
according to
Hugh Bullock, President.
Divi¬
dends per share paid during the
year from net investment income
were
the highest on record, and
the number of shares outstanding
on Oct. 31 was the largest for any
fiscal
dustries,
their capital
Government
of
today
versified
investing
were
defensively invested in bonds of
ed
amounting to $22.58
703,634 shares then outstanding.
earlier,
investment company,
Forty-three percent of the assets
*
to $17,-
1950, equal to
$24.90 per share on 698,389 shares
outstanding. This compares with
net
assets of
$15,889,863 a year
ments
Dividend
Because of Foreign Situation
PHILADELPHIA 2, PA
Oct. 31,
on
and 40 cents for Eaton & Howard
Set
standing and Dividends Paid
of
392,948
Eaton
Total
<
•
Files 100,000 Shares
ten
the end of Octo¬
B 2 amounted
Fund
Bond
by
At
High
Records
Fully Administered
Defensively Invested
dealer
the
of $29,655,500 from the total
Year-end
mittee of Massachusetts Investors
or
of
alized
shares of the Fund, Mr. Vance is
Chairman of the Executive Com¬
prospect us from
yovr investment
net assets
Net assets of the Medium Grade
Oct.
director of the Fund.
a
'
Million
ber, 1949. it is disclosed by the an¬
nual reports
of Keystone Funds
B 2 and S 3.
annual
for the fiscal
year ended
31, 1950, shows net assets of
Management and Research Co., in¬ $107,593,348 on that date compared
vestment adviser of the Fund.
with $88,914,179 a year earlier.
Active in the investment field
Shares increased from 22,906,232
since
his
graduation
from the to
24,998,709
and
shareholders
Wharton School of Finance and from
49,451 to 57,197. Net asset
Commerce at the University
of value per share was $4.30 against
Pennsylvania in 1927, Mr. Vance, $3.88. This was after the payment
since
1930, has been identified of a 25-cent distribution of net
with the development of the mu¬ realized
security profits on Oct. 30.
tual fund method of investing. He Total increase during the year in
was
actively participated in the net asset value per share, includ¬
management of Boston Fund as ing the 25 cents paid out, was
partner or principal in the Boston 67 cents a share.
Management and Research Co. and
During the year the company
its predecessor since formation of realized net profits of $7,468,705
the organization 15 years ago, and from the sale of securities. Unre¬
as
Hundred
crease
Fund
S
•
Prov, Wash. Insurance
Funds Over
Keystone
of $186,295,100 at
The
v
writer.
Realized Profits at $7 Million
Fund
director
a
common
Shareholders Over 50,000;
agement of
as
current
to
prices."
Combined
association
\
Investors Management
Keystone Funds on Oct. 31, 1950,
amounted to $215,950,600, an in¬
Breaks
Affiliated
with the man-
Boston
relation
stock
Two
ments to their children.
s
9.3%.
to
taxes, materials alloca¬
and
in
Anderson will
continue
4.7%
general distributor is Cor¬
porate Leaders Sales Company.
in
and
economy,
the New Eng¬
approximately
The
seems
ing the younger generation a stake
become
President
Company. Mr.
your
war.
of
Thursday, December 7, 1950
.
.
Securities and Exchange Commis¬
probable that higher sion
covering 100,000 shares of un¬
specified par value capital stock.
tions, price controls, and defense No underwriter.
contract renegotiations will result
♦"It
to
land
data obtainable from
if the present
"precipitate
a
even
does
not
years,
In offering the gift certificate, pect suggests that corporate earn¬
and
dividends
should
be
Kidder, Peabody & Co. point out ings
that it is a good medium for giv¬ maintained at satisfactory levels
Life Insurance
Prospect lis and additional
profound
derson, who
has
resigned
O. Kelley An¬
investment dealer, or from
gift certificate a year ago. It is
being made available again be¬
cause of popular reception
it re¬
ceived last year, as evidenced by
widespread demand for the certif¬
icates from purchasers who de¬
cided to give mutual fund shares
as Christmas presents to members
of their families, particularly to
their children.
succeeds
He
from
request
$55,-
investment fund.
mutual
000,000
T.
Henry
of this
President
as
Fund, Inc.,
elected
afternoon
Vance
Director
as
Boston
it
prospect now is for an aggregate
volume of defense expenditures of
at least $125 billion over the next
By ROBERT R. RICH
Boston Fund
in*the Far
war
with
changes in the economic environ¬
ment," Mr. Bullock said.
"The
Mutual Funds
Ohio—Ralph J.
Waldvogel has joined the staff of
Merrill Lynch, Pierce, Fenner &
Beane, Dixie Terminal Building.
CINCINNATI,
brings
.
24 Federal Street
BOSTON
333
Montgomery Street
SAN FRANCISCO
Volume 172
Number 4966
.
.
The Commercial and Financial Chronicle
.
LETTER
Field
Investment
Dec. 8, 1950
Edward E.
(New York City)
of
Securities
"Chronicle" of Oct. 26.
Roof).
Dinner
Annual
the
at
Club
Bond
&
annual election and winter dinner
"Chronicle '
"(2)
received
I.
Johnston,
cannot
com-
Name
of
presently
"(4)
em-
"(5)
Date of birth.
of
"(6)
Do you carry
Mr.
by
in
Johnston
count?
Group
Valley
oi
IBA Christmas Party at the Parl<
Plaza Hotel.
Detroit,
The
-
>
Feb. 4, 1950
? Board
ation
Firms
~;'*
-
.
Governors
of
Stock
Associ¬
of
Exchange
Firms
meeting.
Feb. 8-9, 1951
Board
ation
of
of
Governors
Stock
1951
'
Firms
/
(Philadelphia, Pa.)
Philadelphia
June
15, 1951
of
Winter
Traders Association
Philadelphia
Dinner at
and
Golf
and
Banquet.
(Philadelphia, Pa.)
Investment
Johnston,
Summer
the
Outing
Manufacturers
Country Club, Oreland,
Pa.
tional
of
Inc.
associated
and
of $6,000,000
Chronicle."
Financial
and
am
Electric Co. first mortgage bonds,
series D,<2%%, due Dec. 1, 1980,
'
/at
100.50%
and
interest.
accrued
The group was awarded the bonds
,
Dec.
on
*
-
4
from
Proceeds
issue
will
tensions
its bid
on
be
100.111%.
this
of
sale
to pay-for ex¬
additions
to be made to the
tric
of
the
used
and
and
made
company's elec¬
broker-dealer
a
A
selling
a
in
,
furnishing electricity to
public utility engaged solely
an
es-
timated population of about 435,000 in northeastern Texas, north-
"I western Louisiana and in western
1
and
anticipate registering
state outside
of New England.
Tue reason I
am writing is that your published
address left me with two very tiistinct impressions, to
wit:
deemed by
the
company
re¬
at prices
be
withheld
.
ginning
in
1952,
100.49%
from
loss to
termination
tion
100%.
to
'
WASHINGTON,
W. Fleming
'in
teenth
i
the
.
-
Street,
New
a
be
a
Fleming is
and
an
associate of the firm
is Vice-President
of the
cor¬
porate affiliate, Folger Nolan, Inc.
L__
-
$14,024,400
1,447
1,737,000
12.4%
"
terminations
12.4%
payments made prior to termination—
to
Total
Percentage of total payments-/-..-Average loss per $1,200 unit
-
These
figures
speak for
thein-
whom
"At
)
•
$243,055.00
235,389.56
7,665.44
3.15%
$5.30
terminating planholders
resulting from terminations
loss
-
are
these
• •
-i
'
plans
se{VQS]
an
'
,
- They
certainly indicate
extremely favorable history of
These figures show that a very with small minimum and montbthe-small lapse rate was experienced, ly payments and the termination
"
_«•.
carefully
read
our
representative
the
the
op-
them clear.
•
of
my
war
and its effect upon
only those planholders who
.had to let their plans lapse be-
*
terms
due to the
mot
peri-.cause
they
entered
the
Armed
•
tion,
individual
$3 000
to
$7|500
and
cannot
same as an
periodic
like to
be
considered
account in
payment
a
plan
bank.
cnc
My
*
.
■
Ak<;0,in y°ur address, you asked
after
incomes,
taxes, in 1948 were as follows:
Les'g
plan
certainly honorable
forthright. For this reason I*
like to quote certain per¬
tinent parts of the application that
'>
This
announcement
than $3>000
* '
32%
51%
$7500
dverlHIIII
17%
0(.
The
Continued
on page
offer to sell or as an offer to buy the Common Shares herein mentioned.
offering is made only by the Prospectus.
as an
the
planholders are required to
and sign before tlieir appli¬
cation can be considered. They are
The Diversey Corporation
read
follows:
as
that
understand
desigincd for the
not
this
investment
long-term
is
a
143,000 Common Shares, $1 Par Value
program,
seek¬
person
ing quick profits or for the person
unable
for
that
continue
to
his
as
time is
in
the
a
understand
and
of
plan,
my
will
that, since
prob¬
me.
I also!
$1,000,000 3.92% Promissory Note
the securi¬
due November 1,1953*62
property comprising the
consists
of
of
bonds,
stocks,
investments,
Fund, Inc.,.
preferred and
or
other
-
The
classes-
obligations
privately with
Equitable Life Assurance Society of the United States
and
that may be purchased \
provisions of its by-,
the
the value
time
will
"In order
plans
are
of
shares
my
depend
upon
at.
the1
to
by
avoid
the adoption
persons
for
whom"
not*suitable, the applicant-
please
"(1)
answer
you
presently able to*
periodic payment plan and:
maintain
F. Eberstadt & Co. Inc.
the following''
Are
a
Copies of the Prospectus may he obtained from the undersigned only in states in which the undersigned
qualified to act as a dealer in securities and in which the Prospectus may legally be distributed.
is
questions:
adopt
Placed
,
conditions of the market.
of
share
essential ele¬
very
success
withdrawal
early
ties
Price $10 per
payments
period of years; furthermore
a
the
schedule
of
pay-
December 1, 1950
,
Don't you feel that the 32% of
provides, the question:
is not to be construed
;
According to published informa-
*
the comple¬
prior to
asks in their application blank.
-
would
will
Mr.
11,687
____
that the intent of the sponsor*
Washington
and
Amount
felt
and
they
York
Face
-
Units
large
you
very
of the plans is
N. W., members of
Stock Exchanges, on Dec. 21.
you
"Under
you
partner
& Co., 730 Fif-
sold
'T
'
Number of
SI,2<M> Periodic
■».
Mr. Johnston, is to convince
any
C.—Robert
will become
Folger, Nolan
„
D.
give
'"•*
.
The first thing I would
laws,
.
"Will
do,
undei
Fleming to Be Partner
*
no
-
payment plan.
their plans.
of
property
'
§14,024.400. During
total o£ M47 units
aP" W--.teIral?-a.te.d:: (A Un" is,®,pI~"
calling,for total payments of $1,200
odic payment plan, I understand services, but also many other disthe following important points:
.'locations even for the ones who
planholders in the event of"(D That my periodic payment: t
d
t home
there would
that
common
be redeemed, be-
may
^
first
the
from
costs—
only the.y
.
assure
important
payments
portfolio of
from
I
questioned
103.50% to 100%,
and,, for. sinking
fund purposes
ranging
case,
the intent
the so-called
You
ably be unprofitable to
••
be
may
than
Further-
the
aimed?"
Following that, you pointed out
cancelations.
These
figures are. that %rds of our national income
"It is our desire at all times to; taken from the annual report filed goes to people with incomes of
furnish the best possible service. with the Securities and Exchange' less than $4,000 a year. Follow*to each planholder. - We wish to - Commission on Form N-30-A-2. ing that, you stated, "If periodic
assure«ourselves that you thor--They were prepared by independ- purchase plans are drawn to a\oughly understand your periodic -ent auditors.
*
■
tract dollars from these incomejs,
;
.
not
a
statements below and sign your- your attention is called to the penalties, then some serious quesof the spensors of
name in the space provided?
If-fact that during the period ccv- tions are suggested." To this, I
second type of plan which called any statements are not clear, we,ered,
the country underwent a thoroughly agree, and refer you
for approximately 50% deductions would appreciate it if you would-very drastic period of dislocation to the questions that the sponsor
(1)
and Marshall.
bonds
Paid
v
■
not
do
an
new
other
representations
.
to do business in any
Shreveport, Texarkana, Longview
The
Total
-
more,
mutual,,
outstanding
ment
...
of
As
1948, the company that I am re¬
ferring
to
distributed
periodic
payment plans calling for total
me.
terminations
Percentage
purchase
am
Arkansas, including the cities of
-
and
those contained therein.
,
Total
accumulation of shares of-
Fund, Inc., dated
presently registered.
four of the New England states, -
"I
is
Total
and have relied on no information
I
only
percent
periodic-
are
the
of
large
very
sales
one
properties.
Southwestern Gas & Electric Co.
_
for the
is
matter of actual fact,
from October of 1940 to Dec. 31,
of which
copy
,
I have read this application
before signing it and have an-,
plans for accumulating shares of swered the questions shown above. -
underwriters
Southwestern Gas &
a
^
ad- r
"I have received a prospectus of
Na-C
Corp., covering your
Securities'offering of periodic payment plans
reproduced in
as
Such
you.
1 thlnk' Mr- Johnston, you will over a 10-year period.)
:
agrde, after reading the above
The following' shows' that
Quotations, that certainly the in- great loss was suffered:
the
(2) An impression that
.
made
.*
the Oct. 26 issue of "The Commer¬
cial
sition
Offering is being made today
(Dec. 7) by Halsey, Stuart & Co.
large
a
are
Xeatfons3 for pl1ins"°
the
read
plan suggests a fairly high
expected lapse rate."
explained
-plan?
....
which cover a portunity to make
considerable portion of the acqui-: /
*
*
2%% Bds.
funds
in the bank and the
your insurance
if
insurance) sufficient to
unexpected financial demand
without having to terminate your
.
Association
year's
Offers Southwestern
reserve
your
of
.meet
before
made
Administrators,
to
Halssy Stuart Group
Gas & El.
Are
money
value
that
year as
ond
States
-you carry
carefully
you
funds.
Investment Traders Association
„
of
have
dress
in
21,
"(10)
(your
loan
furthermore,
are
plans of this type
examined. Then,
of this feature in this sec¬
ence
are
th»seJ«utles to perform which are payments of
States'stated in the plan and the pro-.that perio[1 a
United
a
the
custodian
the
have
withholding
a
selling expense
from early payments is not pe¬
culiar to mutual funds, the pres¬
manner
.
my
Associ¬
of
Exchange
vou
and
all
I
too,
although
large part of
'(5) That the custodian has only
'«■
c
Are
"(9)
and
has been delivered to
hold other invest¬
citizen'
Assistant Chief
panics.
(Dallas, Tex.)
you
amount
deductions for both
life insur-.the prospectus,
carry
you
Do
ments?
of
shares of mutua kin vestment com-
winter meeting.
Feb.
page
WiUiam I.
I
meeting.
of
winter
was
"Chronicle"
13.
the
Dear Mr. Johnston:
Exchange
Do
"(8)
Toledo, Ohio
wFeb. 6-7, 1951 (San Antonio, Tex.)
ation
1950.
of Mr. Johnston
in
on
11,
Associ¬
of
Governors
Stock
Board
Oct.
Division of Securities
(Houston, Tex.)
of
of
winter
"(7)
The
monthly payments
in
which
Fund shares
on
and
lower
above on the application and in
-
ance?
Mr. Johnston follows:
Mr.
Gov¬
Officers.
Election of
and
Associa¬
The text of Mr. Mathew's letter -
ties Dealers, Inc., Meeting of
ernors
26
Oct.
to
of Securi¬
Association
National
the
Administrators
Mich.,
address
published
Jan. 16, 1951
•.
Securities
of
tial
distribu-
of
amount
during the first
ac-
..
in
Mississippi
before
address
tion
(St. Louis, Mo.)
naturally
are
part of these deductions
bank
a
^
his
Dec. 21, 1950
ticularly in terms of the lower
income groups.. - Minimum ini¬
definitely be known in ad-
company
made;
Chief, Division of Securities, State
made
The
which
in
company.
"(4) Title.
Ohio, taking exception to state¬
which
to be drawn more par¬
appear
securities
the
vance.
ployed?
"(3)
shares is based
of
property comprising the
portfolio,
plete the plan?
Assistant
value
subject to market fluctuations.
"(3)
you
is all that it
my.
fund
the
and other
published in the
heavy losses to
Are
sponsor
at
of
upon
-tions paid
"(2)
tent cf the
should be, and,-in fact, the sponsor
v
any
returned
ue
cause
called for in order to
'
15
plan does not has
leaned
over- backward
to
specific amount to make certain that the person who
any future date, starts such a plan is reasonably
the liquidation value at any time well qualified to complete it.
being based upon the value of my
in y0Ur address you stated:
-—-Fund shares; likewise the val¬
"The second type plan woiild
plan.
ments
Mathews, of Edward E. Mathews Co., Boston* a
copy of a letter, dated Nov. 28,
1950, which Mr. Mathews wrote to
That
profriise
r
has
Edward E.
ments
Gibson Ballroom.
at Hotel
from
William
(Cincinnati, Ohio)
Stock
,
„
The
Pittsburgh Athletic Club.
Cincinnati
under
•
„
(Pittsburgh, Pa.)
Pittsburgh Security Traders As¬
Dec. 14, 1950
Administrators,
Denies lapses
investors
A
sociation
relatively long-term invest-
a
be
Mathews, in letter To William I. Johnston, takes
Association
sociation Silver Anniversary Din¬
ner at the
Waldorf-Astoria Hotel
Dec. 8, 1950
for
exception to statement made by latter in his address before the
New York Security Dealers As¬
(Starlight
EDITOR:
Defends Periodic Payment
Plans of Mutual Funds
EVENTS
In
THE
ment program.
COMING
.
TO
(2191)
^
24
16
The Commercial and Financial Chronicle
(2192)
Los
Presides at Veterans' Essay Contest Awards
Celebrates 51
of George B. Wallace & Co., New York City,
awarding prizes to disabled G.ls.
Elmer E. Myer»
Angeles Exchange
Continued
Years
from
.
Thursday, December 7/1950
.
.
5
page
Observations...
delivered short address in
LOS ANGELES, Cal.—Southern
At
dinner
a
modore
Nov.
on
held
Hotel
in
Com¬
the
at
City
York
New
30, in honor of the win¬
ning contestants in
con¬
essay
an
test,
partici¬
pated in by
non
tory
service
ability,
d
train
e
veterans
an
Crossroads
the
goin^ into extensive
details at this time, I can tell you
that
by t h
I
formulating plans to
group of non-ambulatory
am
a
and
salesmen
as
of
business.
these
by
my
own
Elmer
can,
E.
the
I
to
propose
boys through lectures
termination
their
of
At
the
they
hospital
course
if still confined to
a
at home, conduct their business
or
from either place.
Trading
Department of
George
B.
"I
Elmer E.
Myers
Co.,
shall
assist
and
security dealers, presided and de¬
livered a short address of wel¬
his
in
correspondence.
Foreign Wars,
In
Mr.
address
of
them
will
take
sonal
interest
make
a
continue
course
with
their
proud
a
in
to
problems
and
per¬
seeing that they
topic of this year's Essay
Contest, as you know, is 'What
strategy should the V.F.W. recom¬
mend to our government in com¬
bating the Communist threat to
most timely one and, as
will observe
by the winning
essays printed in our "Journal,"
has been handled in a most cred¬
itable
and
adult
by
manner
the
contestants.
Halsey, Stuart Group
Offers $25,000,000 of
■
shown
by
buddies and
hospitalized
our
I
want
take
to
this
opportunity to thank all the
testants
for
their
efforts
Stuart
associates
due
trust
1980
therapist
to
Cu^ick,
the
at
of
Recreation
section
Co.
and
Inc.
bonds,
27/e%
Union
Electric
of
Missouri
of
&
today offering $25,mortgage and col¬
are
000,000. first
lateral
at
102.542%
interest.
bonds
was
Co.
and
ac¬
of
the
Award
made
series
5
at
competitive sale to the group
on
Dec.
on
Proceeds
from the sale of these
bonds will be applied toward
cost
of
construction
Union
The
Electric
subsidiary,
a
the
plans
the
that
1951
in
to
pro¬
place
its
and
the
in
Southland's economy, according to
Witter.
pub¬
a
lic-interest nature will be carried
in
on
1951,"
which
will
be
San
in
course
said,
he
"among
investment
an
Fernando
Valley,
in¬
Exchange tours of
plants
and
several
out¬
The
Los
Angeles
Stock
Ex¬
Calil'orna's
and
new
One
of
rapidly
the
ex¬
Southland's
early oil prospectors and promi¬
nent
Wallace
producers,
Hardison,
He
President
Oil
Libby
the first Exchange
was
President.
then
was
of Hardison
Co.,
&
the
Stewart
organization
the
which
formed the nucleus of the present
Union Oil Co. of California.
"While
the function
Stock
said,
played
a
of the
en¬
are
which is expected to
re¬
quire the expenditure of approxi¬
mately $153,000,000 for the fivehave devoted a great deal of time
year period 1950 to 1954, inclusive,
and effort In
assisting the boys in which will be
chargeable to prop¬
the
typing and preparation of
erty and plant accounts.
institution
has
vital role in the develop¬
ment of Southern California to the
position of the nation's third larg¬
est industrial community."
White, Weld Group
Offers International
Min. & Ghem. Shares
essays.
"The
sudden
turn
of
events
in
Korea brings to us more forcibly
the
problem
of
our
returning
wounded, more particularly those
boys who have been rendered
Regular redemption prices
range
from
105.55%
to
100%.
future
and
omy,
status
it
is
in
my
our
econ¬
conviction,
Weld
& Co. heads an
investment group which on Dec. 6
be made publicly offered 200,470 shares of
Special redemptions may
at prices from 102.49% to 100%.
Union
International
Electric Co. of Missouri
non-ambulatory. These Veterans is engaged primarily in the trans¬
are
seriously
concerned
about mission, distribution and sale of
their
White,
electric
ates
which it gener¬
purchases from its sub¬
energy,
and
ical
stock
Minerals
$5
Corp.
at $51
Chem¬
&
value common
share.
Proceeds
par
per
sive continuous
queries from
added
the
to
cash
funds
the
of
corporation and will be available
sidiary, Union Electric Power Co.
Territory served by the company
for
themselves, that these boys,
than anything else, wish to
includes
more
take
St.
Louis, with
city
of
estimated popu¬
an
rightful place in the business lation of 853,000, portions of five
world. Among those of us who are counties in Missouri adjacent to
in a position to either
St. Louis, and portions of three
help gain
their
or
grant employment to these men
—there rests a grave
responsibil¬
ity.
"I
give
late
counties
in
Missouri
the
near
company's
Osage
hydroelectric
plant.
Union Electric Power Co.,
should
a
you
St.
East
'Independence? That's middleclass
blasphemy. We
pendent
St.
Louis
and
Alton
with
of
on
us
one
all
are
another,
de¬
every
of
82,000
and
respectively, and in small
Iowa
and
Illinois,
32,000,
areas
including
in
the
'This is the true joy in
life, the
being used for a purpose recog¬
nized
by yourself as a
instead
mighty
the
being
thoroughly
out before you are thrown
worn
the
on
scrap heap; the being a force of
nature instead of a feverish self¬
ish little clod of ailments and
grievances
world
complaining
will
making
"For
plan
you
not
devote
•
men
to
ters
the
Missouri
affiliated
an
be
of
Power
&
Light
company,
and
Co.,
to
an
non¬
affiliated utility companies.
States and
potash,
the
a principal producer of
both main ingredients in
making
corporation
fertilizers.
of
also
The
produces
and
chemical
ponents, and amino products.
Vincent M. Doherty Joins
John L. Ahbe & Co.
place
it
in
to
done
say
about
day
every
the
necessary
and
prevent
idea.
mat¬
the
ex¬
*
"I propose to take the initiative
in a small way and can tell
you
Of
latter, the most important is
vegetable
glutamate
sold
under
the
corporation's
trade
"Ac-cent," which is sold to
food-processing industries, insti¬
users
and
for
household
use.
The corporation maintains
plants and properties in 20 States
throughout the country.
A stock distribution of
for
share
share
each
Dec.
1950,
20
of
was
subject
owned
declared
to
the
ad¬
one
stock
common
of
record
sale
Dec.
of
4,
the
BEACH, Fla. — Vincent 200,470 shares of common stock
Doherty has become associated being offered. On the same
date,
with John L. Ahbe &
Company, a cash dividend
equivalent to 40
268
South
County
Road.
Mr.
cents per share on the 2,000,000
Doherty was formerly connected
with Emerson &
Company, and shares of common stock to be out¬
&
&
was
Co.,
with Frank D. standing
Leedy, Wheeler able to
Alleman,
Inc.
and
RansonDavidson Co. In the past he con¬
his own investment busi¬
ducted
ness
in Palm Beach.
an
Dec. 20.
was
also
declared
stockholders
of
pay¬
record
Both the cash and stock
dividends
about Dec.
will- be
mailed
28, 1950.>
on
or
unaccustomed
and
un¬
on.
own
maturity of his child and the coming of the time
when he should make his
own
decisions, good
bad.
or
Post-Mortem "Bites"
The "bite"
technique
also be applied after death
can of course
in connection with the trust set-up.
Such arrangement will afford
the living "trial run" advantages except that of parental coaching.
The
after-death
"bites"
can
be spaced
at say five-year intervals
starting with the
Another
age of 25 or so.
device for combatting
the inflation threat available
estate-planning testator is for him to provide for the trust's
to the
payments from principal in case of future monetary
depreciation causing loss in the buying power of the income. This
emergency
will
cause no tax penalty, assuming the lawyer
drawing the will
performs his job competently.
Function of Life Insurance
Our net conclusion
insurance
needed,
nature
is
but
it
that
for
not
about
should
advisability of purchasing life
bought
investment
ramifications of
or
the
be
where
the
protection
Irrespective
purposes.
of
is
the
policy, the diminution by selling and
a
administrative expenses of the
income earned
on the companies'
investment holding.
industry's present portfolio setups, life insurance
affords little protection against the long-term inflation threat.
The companies' composite holdings of common stocks still com¬
prise less than % of 1% of their composite security holdings; and
own
securities, makes it unsuitable
Based
on
as an
the
in only 28 States are life companies permitted to hold common
stocks with four of these being confined to bank stocks.
From an investment viewpoint, a portfolio composed of gov¬
ernment bonds and
common
stocks, or of perhaps a mutual fund
equity holdings, would seem to be preferable.
undesirability of insurance for investment is not
unrealized seems to be indicated
by the fact among retired men's
families, only 52% own insurance contrasted with 86% in the case
in lieu of one's
That
own
this
of business and
professional folk.
pany
Halsey, Stuart Group
in the following pro¬
portions: The New York Central
Railroad
C!eve.Un. Term. Bds.
An
underwriting group headed
Halsey, Stuart & Co. Inc. is
by
offering today (Dec. 7) $40,000,000
The
Cleveland
Co.
3V4%
bonds,
each
first
series
Dec.
to
3.40%.
The
due
$2,500,000
on a
Proceeds
award
won
the
of
sale
the
bonds will provide the major
portion of funds
and
St.
Louis
Railway Company,
required
Whitman Naff With
Peter P. McDermoll
to
Whitman
C.
associated
New
&
York
11.
Mr.
with
A.
W.
bonds
call
are
to
D-1966
owns
the
the union passenger sta¬
the southwest
Public
Cleveland.
corner
of
Stock
Exchange,
Haff
on
formerly
was
Benkert
&
Co.
and
& Co.
Delalield & Delafield
to
Delafield
&
Delafield.
14
Wall
Street, New York City, members
of the New York Stock Exchange,
on
Jan.
1
will
LeBoutillier
to
admit
Martin
partnership.
Square in the City of
It
also
owns
or
has
perpetual easements covering two
approaches to the station, one of
which is known
proach,
Mc-
Admit New Partner
tion and coach yard and the tract
of about 33 acres occupied there¬
near
become
P.
redeemable at varying
price's.
The Cleveland Union Terminals
by
with Ward
will
Peter
Co., 44 Wall Street,
City, members of the
York
Dec.
gage sinking fund gold bonds now
outstanding.
Haff
with
Dermott
New
D-1953
Company,
7%.
re¬
Series
The
Chicago-
St. Louis Railroad
and
principal amount
5V2%, 5% and 4^2% first mort¬
deem $41,614,400
of
71%;
Cincinnati,
22%; and The New York, Chicago
of
competitive sale yes¬
bid of 99.3899%.
from
Company,
Cleveland,
serial
mortgage
D,
group
the bonds at
new
Terminals
1, 1951-66, inclusive, at
,yield from 2.00%
to
prices
terday
Union
is owned by three proprietor
companies
Offers $40,000,000
Co.
on
M.
Newman
as well as the psy¬
recipient in getting early "bites"
with
arising from the parent's resulting worries
security; and over threats to his authority, superior¬
ity, and perpetual youth.
Too often the parent "is the last person
his
over
The
PALM
prior thereto
inheritance,
confronted
existence of inhibitions
pure
ditional
(Special to The Financial Chronicle)
prone
press
other
intrude
ecution of
to
shortly. Too fre¬
are
'Something should
affairs and
itself
now,/:!'have
about a workable
very
but
the
time
thinking
and I hope
quently
that
of
15,000, respectively.
The company also sells
energy to
happy.'"
some
operation
this'
largest producer
of phosphate rock in the United
tutional
populations
becoming
on
young
Insofar as psychological factors remain, they are likely to
apply rather to the parent in deterring him from making living
gifts.
It does not require esoteric psychoanalysis to recognize the
im¬
and
name
with
of
earned windfall later
International Minerals & Chem¬
Iowa,
16,000 and
son,
levied
those
chological advantage to the
ical Corp. is the
cities of Keokuk and Fort Madi¬
earth.'
on
population
"
been
additions
products derived
energy directly
Illinois, opposite from phosphate rock and potash;
Louis, including the cities of complete plant foods and com¬
"
one;
extensions,
sells
subsidiary, sells
with
compared
for
and
in three areas in
like, at this time, to
two quotations from the
George Bernard Shaw who
said:
soul
facilities
plant
new
to
answer
in his or her investing explorations.
should be no compulsion for permission to make specific
issue selection.
This "trial run" method offers the advantages
of supervised investment training, the
opportunity for flexible
handling of the inflation problem, and savings on taxes on gifts
provements to existing plants.
the
availability for the giving of advice in
his offspring
There
from the sale of the stock will be
based partly upon letters received
from
the
hospitalized Veterans
principally
can
Los
the general public,"
"the
parent
give his offspring a "trial run" with a gift of
portions of his capital while still living.
The money should be
transferred in instalments, because this may save gift tax; and in
any event this is helpful to the morale and investment education
of the recipient.
The parent should maintain an attitude of pas¬
Exchange is little
understood by
Witter
give their trustees wider discretion in equity invest¬
are available.
The "Trial Run"
A
change was founded Dec. 7, 1899,
to
provide capital for Southern
com¬
Power
larly fearful of inflation's corrosion of their capital and who "do
not want to
ment, two devices
to recognize the
standing special events."
extensive construction
an
program
of
program
the company's system.
Joseph V. Mc Loone of Halloran
Hospital in Staten Island, who
their
disclosure
public
industry
Angeles
its bid of 102.07992%.
gaged in
Chief
institu¬
brought
highly accelerated
a
of
gram
Witter.
Halsey,
Kingsbridge Hospital, Chief of
pany and
Special Services, Frank J.
De
Company,
Scipio of Brooklyn VA Hospital
and
the
the
date
panding oil industry, according to
con¬
and
further thank Mrs. Lucille
Educational
it
Exchange
■■>■■■
crued
"The Post appreciates the inter¬
est
with
local
dustrial
America?' This subject matter is,
in
the
light of current world
you
of
anniversary
numerous
'go' of it."
Myers
"The
a
Co., announced.
Announcement
tion's
"Many new projects of
stated:
events,
Angeles
Los
information de¬
signed to intensify public under¬
standing of the local investment
train
come.
and
continue
Veterans
Wallace &
board
business, which is the investment
Post, No. 310,
of
erning
Dean Witter &
securities
of
World
Myers
profitable
a
—
partner of the investment firm of
"Without
connected dis¬
held
efforts
own
vocation.
veterans
with
is
their
ambula¬
-
financial
institutions
that the plan I have in California
a
training program for is
today
celebrating
the
51st
non-ambulatory buddies who anniversary of the Los Angeles
may be interested in adopting an Stock
Exchange, Phelps Witter,
interesting and depending upon Chairman of the Exchange's gov¬
briefly
mind
our
occupies
as
the West Ap¬
about
35
acres
John C. Kahn Co. Adds
Lombard
WASHINGTON, D.
M.
Lombard
is
now
to
Staff
C.—George
associated
of land and extends
westerly, and with
John
C. - Kahn
Company,
other, known as the East Ap¬ 1108 Sixteenth Street, N. W. Mr.
proach, occupies about 36 acres of Lombard was
formerly with Rob¬
the
land.
The
ert
capital stock of the
com¬
C.
Jones
ton, D. C.
&
Co., of Washing¬
-
Number 4966
Volume 172
.
.
(2193)
Financial Chronicle
The Commercial and
.
but will soon
drive should
be pursued on a reasonably large scale.
Of course, it is now very
difficult for the British Government, having claimed credit for
restoring equilibrium, to admit that its claim is not fully justified.
There
NY
Security Dealers
British Rearmament and U.S. Aid
To Hear Sen. Frear
standard of living,
Marshall Plan aid.
Dealers
Security
York
of the New
Associa-
tion to be held
dinner
/anniversary
'
-•
Wal¬
the
at
dorf
Friday,
on
Dec.
is
it
8,
announced
Amott,
R.
H.
by
Baker
Co.
Inc.,
Amott,
&
of
Chairman
the
official denials, there
be little doubt about the existence of disagreement within
British Government on the full adoption of the £3,600,000,000
armament program in the absence of adequate American aid.
though Mr. Aneurin Bevan was not very dip¬
lomatic when he disclosed to some American
Dinner
Committee.
Other
the
of
bers
Com¬
Dinner
mittee include
M.
Richard
/
Kidder & Co.;
„
Leslie
of checking the
d Avigdor
d'Avigdor,
B.
Dowd, Hodson &
Co.; Paul Emert, W. L. Canady
Co.; Charles H.
Co.
&
A.
Paul
Inc.;
Gammons
Bradley,
Gammons,
Inc.;
Co.
&
Gearhart, Jr., Gear-
Frederick D.
Would
it
absence
Co., Inc.; Rob¬
Herzog
& Co.,
I.
ert
Herzog,
E.
Kuehner,
Joyce,
Co.;
John H.
Kugel,
Hanns
Inc.;
&
Kuehner
Kugel, Stone & Co.; Harry A.
Micnels, Allen & Co.; John J.
Jr.,
&
Co.; Charles D. Pulis, Pulis,
Dowling & Co.; Fred J. Rabe, F. J.
O'Kane, Jr., John J. O'Kane,
Co.; Stanley L.
&
Rabe
Roggen-
& Co.; George
Eiselc
&
King,
Libaire, Stout & Co.; Bertram
Seligman, Townsend, Graff & Co.;
Herbert Singer, Singer, Bean &
burg, Roggenburg
Searight,
A.
"
Mackie, Inc.; Charles E.
C. E. Stoltz Co.; Melville S.
Stoltz,
Wien,
S. Wien & Co.
M.
of
Celebrating 25 Years
ATLANTA, Ga.—Courts &
N. W., memYork Stock Ex¬
Marietta Street,
11
*
of the New
bers
change, and other
celebrating
'
Co.,
•
the 25th anni-
f
versary
<
founding
exchanges, is
of its
in
Rich¬
1925 by
ard W. Courts,
Jr.,
•
his
and
father, the late
'Richard
W.
Courts, Sr.
W. F. Broad-
-
V;
a
-
with
is
ted
Richard W. Courts
ning.
firm
expanded from one small of¬
fice in Atlanta to a home office
in
Atlanta and
offices in New
has
York
and
19
southeastern
with service facilities
cities,
in 16 other
cities in the South.
Present partners
Richard
W.
William E. Huger,
Hugh
D.
Means,
of the firm are;
Malon
C.
Courts,
William
Courts,
F.
Broadwell,
John F. Glenn,
Carter, Jr., James
McKee
Nunnally,
W.
and
Frank B. Sites
Fulton, Reid & Co.
Formed in Cleveland
Ohio — Fulton,
Reid & Co. has been formed as
successor to the business of Maynard
H.
Murch
&
Co., Union
Commerce Building, members of
the
Midwest
Stock
Exchange.
Members of the firm are W. Yost
CLEVELAND,
Fulton, Frank B.
Reid, F. E. Ba¬
W. C. Handyside, Jack R.
Staples, and R. C. Chapman, gen¬
ker,
eral
and Maynard H.
Daniel J. Wilkinson, and
Murch, limited partners.
partners;
Burch,
B.
D.
advertising, marketing,
service in
a
A. V. Lewis Opens
<v
publicity and promotion.
WASHINGTON,
Bankers Securities Adds
PHILADELPHIA, Pa.
M.
of
board
Corporation,
has
them
as
Albert
in the
Opens
Y.—Franklin
in
business from offices
a
securities
at 229 Hart
Street.
of the board.
man
361
N.
Lyman is engaging
Chair¬
the
to
assistant
offices at
Franklin Lyman
BROOKLYN,
Irving P. Tur-
associated with
become
opened
V.
—
securities business.
the
of
has
A.
Pa.
East Beau Street to engage
1315 Walnut Street,
has announced that
man
Lewis
Securities
Bankers
the
—
Chairman
Greenfield,
This advertisement is neither an
offer to sell nor a solicitation of offers to buy any
is made only by means of the Prospectus.
of these secur ities.
s
The offering
cost of living.
December 5,1950
NEW ISSUE
80,000 Shares
influenced subcon¬
:
'
1
%
«•
•
'
M
*»#•
•
large scale means less raw
.
*
-
,
■
Providence Washington^
Insurance
$2 Convertible
negotiations between the United States and British Gov¬
termination of Marshall Aid and the form and
of such rearmament aid as the Washington Administration
Company f
Preferred Stock
K
(Par Value $10 Per Share)
to grant are awaited with considerable interest in
Their outcome is bound to influence profoundly British
prepared
defense policies and foreign policy. Even though
majority of the Cabinet are at present
in favor of going ahead with rearmament, a marked deterioration
of the standard of living resulting from it would tend to increase
the relative strength of Mr. Aneurin Bevan and his Left-wing sup¬
economic policies,
begin¬
The
that Britain's supply of coal is
One's political views are apt to be
London.
firm
the
its
at
a
Einzig
interests. It is possibly because rearmmaterials and less food,
higher prices and taxes, and lower real wages, that there has been
lately a growing feeling in British opinion that American policy
in the Far East is too aggressive and that Britain should take a
more independent line.
The suggestion that Britain should cur¬
tail rearmament in order to be able to do without American aid
and thus become more independent in the sphere of foreign policy
is putting the cart before the horse.
It is because United States
assistance is now expected to fall considerably short of require¬
ments and anticipations that there is a growing feeling in favor
of less rearmament and more independence in foreign policy.
extent
partner, was
i
Paul
ernments about the
become
a s s o c
Dr.
The
well, who has
since
the
sciously by one's material
on
42nd
East
110
at
and
making sacrifices for the sake of national defense, and Moscow
will probably be too clever to make the British public rear¬
mament-conscious at this stage by transferring the storm center to
mament
Vice-Pres¬
Street, New York City.
Any of these solutions is bound to be very unpopular. It is
bound to antagonize large sections of the electorate. The conflict
in the Far East is too remote for the public to realize the need for
Europe.
Other nominees are:
Co.; Governors, Raymond H. Gage,
Jr.,
Paine, Webber, Jackson &
J. M. Hickerson, President, said Curtis; James P. Magill, Eastman,
that
the
Washington office has Dillon & Co.; John H. Blye, Jr.,
been opened to make available to Wurts, Dulles & Co., and Willard
S. Boothby.
the
agency's clients a national
Francisco
inadequate
and that it would be necessary to import American coal gives one
indication of the conditions that are likely to develop as a result
of rearmament on a large scale.
There are already shortages in
base
metals, timber, and other essential raw materials, even
though the actual extent of rearmament has so far been negligible.
There will not be enough materials to go round once rearmament
has come into its stride, unless their imports are increased in spite
of their present ruinously high prices. Economies will have to be
enforced in domestic consumption in order to husband the inade¬
quate stocks and to save foreign exchange.
Economies in consumption could be achieved in one or several
of the following ways: (1) Cuts in rations, and rationing of goods
which are at present unrationed.
(2) Allowing supplies of con¬
sumers' goods to run out.
(3) Allowing prices to rise in order to
discourage demand. (4) Reducing the consumers' purchasing power
through taxation. (5) Resisting demands for higher wages in spite
ister of Fuel and Power
of the rising
Courts & Co. Is
aid
agency,
Headquarters of the ident, Gordon Crouter, DeHaven
agency are
at 131 Cedar Street, & Townsend, Crouter & Bodine;
New York City. Other branch of¬ Secretary, Sidney S. Blake, H. M.
fices of the firm are in Boston, Byllesby & Co., Inc.; Treasurer,
Philadelphia, Detroit, Chicago, San Alfred Rauch, Kidder, Peabody &
increasingly evident that in
substantial American
living in Britain is bound to be
The announcement made by the Min¬
affected.
&
Inc.,-'advertising
PHILADELPHIA,
Law,
Street, N. W.
rise in the cost of living, etc.
to assume that una¬
of
Guenther
-
office is located at 1510 Nineteenth
reasonable
It is becoming
...
the
Phila. Bond Club
Pa.—Norbert
estab¬ W. Markus, Smith, Barney & Co.,
lished
in 1872, announces today has been nominated for President
the opening of a new branch office of the Bond Club of Philadelphia
succeed
Willard
S. Boothby,
in Washington, D. C., under the to
management of Day Thorpe. The Janney & Co.
Frank
Albert
siderable extent?
hart, Kinnard & Otis, Inc.; George
Geyer
be
Present Slate to
Opens New Branch
re¬
Al¬
nimity prevails on rearmament, seeing that it
tends to affect the standard of living to a con¬
standard
Geyer,
the
nationalization, controls, leasehold reform, the
method of financing rearmament, the method
~
Albert Frank Agency
can
journalists the existence of such disagreement,
merely stated the obvious. For one thing,
disagreements between moderates and Leftwingers within the Cabinet are known to occur
very frequently on most controversial subjects.
There have been lately such disagreements on
Barnes, A. M.
Frear, Jr.
A
J.
Sen.
smaller scale than that indicated by
he
mem¬
probable that British rearmament will be on a much
the figure of £3,600,000,000.
scale it seems
Britain's
Eng.—Notwithstanding
LONDON,
difficulties which are becoming
for the
blamed
is
evident, and this fact tends to increase further the unpopularity
of rearmament.
Unless American aid is forthcoming on a liberal
Dr. Einzig sees need for continuation of
Says otherwise British large scale rearm-
might become politically impossible. Holds
economic improvement is exaggerated.
ament
-
Astoria
-
others. They are as yet concealed,
surface, especially if the rearmament
many
the
Rearmament
Pointing out Britain's rearmament program if carried out with¬
out extensive U. S. aid, will have a depressing effect on nation's
will be guest speaker at the
are
to
come
By PAUL EINZIG
Sen. J. Allen Frear, Jr.,
silver
U.. S.
j
17
Mr.
Attlee himself and the
porters in the country, in Parliament and in the Government. A
stage might be reached before very long at which their influence
on rearmament policy would prevail.
Government, Congress
and public opinion will have to decide in the near future is
whether it is worth while from an American point of view to en¬
sure the execution of the British rearmament plan by means of
granting financial support on a substantial scale. It will be a
matter for the American experts to form a judgment whether the
same
amount spent on additional American rearmament would
increase the combined strength of Democratic countries to a larger
or
smaller extent than it would if it were spent on support to
Britain. What matters is that American opinion should realize that
in the absence of substantial American assistance British rear¬
mament on a large scale might become politically impossible. De¬
plorable as this is, it is a fact that must be faced.
One of the major difficulties in the way of granting Britain
large-scale assistance has been created by the British Government
itself.
It is the result of the official efforts to exaggerate the
extent of Britain's economic improvement.
The reaction of Amer¬
ican opinion to claims that Britain has now succeeded in achieving
economic equilibrium has been only too natural. A nation which
has a large budgetary deficit, whose balance of payments has
turned adverse, and which has been losing gold in consequence,
may find it difficult to see reason for supporting a nation with1
balanced budget and foreign trade and with a rapidly increasing
gold reserve.
Before long it will be evident, however, that Brit¬
ain's economic position is not nearly as strong as it was made to
appear to be.
The announcement of the government's decision to
import American coal disclosed one hitherto concealed weak spot.
The
question which the United States
Company's outstanding Common Stock are being offered the right J
$52 per share for the above shares at the rate of one share of
Preferred Stock for each five shares of Common Stock held ot record on December j
Holders of the
to
subscribe
at
4, 1950. Subscription Warrants
Time,
on
The several Underwriters
any
will expire at 3:00 P.M., Eastern Standard
-j
December 19, 1950.
have agreed, subject to certain
conditions, to purchase
unsubscribed shares and, prior to and after the expiration of the subscription
may offer shares of Preferred Stock as set forth in the Prospectus.
'
offer,
Copies of the Prospectus may be obtained from any of the several underwriters
only tn States in which such underwriters are qualified to act as dealers
in securities and in which the Prospectus may legally be distributed.
'
—
I
ft
■
"
.
M
:t
The First Boston
Corporation
G. H. Walker & Co.
Merrill
Lynch, Pierce, Fenner & Beane
Richardson & Clark
Putnam & Co.
Miller & George
Dean Witter & Co.
M. Joseph Cummings
Robert Garrett & Sons
Herbert H. Brooks & Co.
Barrett & Company
Fraser, Phelps & Co.
Davis & Davis
Wood, Struthers & Co.
Brown, Lisle & Marshall
McDowell, Dimond & Company
Paine, Webber, Jackson & Curtis
John C. Legg & Company
Shelby Cullom Davis & Co.
Granbery, Marache & Co.
Fulton, Reid & Co.
W. B. Freemari & Co.
Reynolds & Co.
18
The Commercial and Financial Chronicle
(2194)
fessor
the
The
and
resources
Cleveland, where
urges
leave
But
before
made
after
and
na
t
af¬
ural,
ideal
the
ford
combination
for
an
era
of
nationwide
prosperity.
The
crucial
question
will
is,
of
ernor-General
as somewhat of an expert
subject. My approach nec¬
essarily is not that of a profes¬
sional
economist.
The
opinions
expressed here are the outcome
a
lifetime spent
largely in
of
in¬
and
to
bold
courage
adopt
the
and
progressive policies re¬
quired to turn Canada's boundless
steeL
Those
of
who
us
this
great
nation
take
her
priceless
much
too
make
for
fresh
a
born
were
are
in
to
prone
the early, formative, years of
national policies were
studies. In Nova Scotia,
life,
my
of my
family
my
lumbermen
also
and
farmers,
were
merchants,
we
kept
communities.
Here
was
Let
appraisal
of
us
them.
newspapers of
detailed
the
Canada and to read
accounts
that they
comic
pages, of the proceedings
and speeches in Parliament.
Joseph
Howe,
Liberal,
great
iather's
Scotia's
Nova
was
closest
though
my
friend
grandand, al¬
Charles,
Canada's Untapped Resources
Tupper, her leading Conservative
was
the physician who brought
Canada's
territorial
extent
of
3,800,000 square miles is as large my father into the world, he was
as
Europe's.
Canada's 14,000,000 named Joseph Howe Eaton. From
people have plenty of room to the beginning, I had the good for¬
breathe,
tune
in
later
Dr.,
know
to
Sir
from
statesmen
nadian
west
well
In
lakes
the
disillusioned.
both
on
Pacific,
the
with
extending
2,000
When
Atlantic
rivers
miles
and
into
interior, and sharing a 3,000a friendly neigh¬
tario
ing
I
four
bor,
known
cated
for
world,
with
the
lo¬
whole
particularly lor com¬
with the 150,000,000
poten¬
merce
tial
strategically
trade
but
customers
United
in
States.
the
makes
energetic
for
people.
college. Dur¬
in
the
to
debates.
personally
Minister
Oliver
of
from
and
the
of
Sir
Federal
vigorous and
a
That
cli¬
same
lege,
forest, mountain and
there that I learned
tutes
and
of match¬
sea
variety,
irresis ible
an
Sir
Prime
Govern¬
to
consti¬
year-round
Birks,
now
portant adjunct the
to
through col¬
I had a part time job
advertising
department
the
mate, coupled with lake, stream,
beauty
Prime
Charles Tupper
To help put myself
climate
a
successful
early
and
in
at
it
what
was
an
im¬
newspaper
merchandising.
is
I
Province
Bracken
Since
1928,
in
farm
most widely heralded
perhaps are her vast,
but
largely
untapped,
mineral
treasures: gold, silver,
nickel, cop¬
per, lead zinc, iron ore, oil and
uranium.
The
farm
is
tent
land
of
her
richness
unrivaled.
forests has
world leadership
water
of
abound
with
the
sources
of
is
The
tremendous
limitless
a
Her
I
and
of
re¬
her people,
their
love of hard work
in
factory, office, forest, mine, mill,
store
and
home,
on
farm
and
sea.
at
m
A
Soil
of
which, in
I
my
my
♦An address by Mr. Eaton at
of the Empire Club of
policies
Canada,
Can., Nov. 30, 1950.
daily
to
desk, and continuous reading
them,
and
especially
their
splended financial pagesplias been
of great value.
Canada's Problem
During
ronto.
meeting
Toronto,
student days in To¬
Smith was at the
my
Goldwin
height of his
tive
career
analyst of
the
as
a
provoca¬
political
and
economic problems of Canada and
the Empire. His home, the
Grange,
was a Mecca for those who were
deeply
concerned
him,
the
with
economic
what
Nova
never
Scotia,
that
passes
grandchildren
spend at least six
not
I
have
de¬
never
winter
got
can
when
I
of my family to ac¬
some
company
holiday
is
me
spent
skis
on
had
he
backward¬
have
been
ested
the
in
of
one
pations
has
famous
a
for
his
penetrating
brilliant
pen.
tact,
but he
intellect and
For a former pro¬
the
the
probable in view of the
more
Canadian
proposal
as
tion
in
Dominion's
the
of
had been expected
most
small
of
native
my
recent
the
to
step
to¬
the
in
western
years
with
when I joined
ago
the
late
General
Ho¬
Dominion
auc!
have provided a
operation, espe¬
terms could not be
the
bed
of
deep
a
lake.
Today, in its sixth full
season
production,
has
Steel
of
set
a
record of
new
000
shipments of 1,215 high grade ore. More
tons of
important
still, the "Steep Rock
high quality iron ore
of
reserves
are
Rock
know
now
other
to
have
to
old
range,
continent.
aim
shipping
In
at
those of
exceed
or
five
least
new,
years,
six
on
we
mines
minimum of 10,000,000
a
annually.
Every hour of every days since
1942, I have been in direct touch
the manifold
Steep
Rock
brought
me
difficulties
aspects
matched elsewhere.
further
heightened
Government
drastic
plies
kets
creating
a
new
announcement
in
cutback
de¬
mar¬
enter¬
immediately
following the rejection of the of¬
also
There
fer.
decided
appeared
Smith
to
undertaking can flourish, of
unless there is a ready
60
years
ago
ber forever" possible
Goldwin
foresaw
to
that
suppress
geography and that, despite politiContinued
on
be
a
inconsistency
this
of policy
instance when
particular
comparison
made
of
bond
the
internals
market
again
were
lower in
sec¬
but
the
slightly
scattered selling and
influence of the recent
the
dip of the
Canadian dollar. The longest term
Dominion
bond
has
on
the
Canadian
level'
low
registered
now
of
in
prices
internals;
speculative
only
revaluation of the Cana¬
on
dian
dollar
to
U.
dollar
but
S.
of
mum
parity
also
bond
market.
anticipated is
to
display
at the 5%
level in Canadian terms
ternational
situation
tin, and other stra¬
rubber, wool,
materials strong U. S. bid¬
in competition with others
tegic
ding
has
led
markets.
world
has
not
fill
chaotic
to
conditions
in
Furthermore
always
it
possible
to
been
requirements despite willing¬
to disregard cost.
ness
has
There
been
moreover
derived
from
considered
fabulous
ada's
Can¬
so
S.
portunities in favor of dubious do¬
mestic
would
projects
evidence
previous
Stocks
market
appear
to
short-sighted, especially in the
develop
needed
the
defense
is
his¬
in
program
running desperately
Canadian
willingness
to
now
out fully
carry
urgently
most
Defense
the
Agreement
be
lightly dis¬
regarded.
The
impact
of
the
the
on
inclined to resist the general
were
trend
and
showed
the
all
displayed
New
the
finally
groups
rallying
a
whole
tendency.
Canadian
resiliency
greater
On
market
than
York.
Edwards &
Hanly to
Be Formed
HEMPSTEAD, N. Y.—On Jan. 1
Edwards & Hanly will be formed
with offices at 100 North Franklin
Street.
The
recent
of
partners
the
new
firm which will hold membership
in the New York Stock Exchange
will
be Herbert G.
Edwards/Mor¬
timer G. Hanly, Robert N. Snyder
Lester
and
member.
Talbot,
Mr.
gers
of
Parris
the
&
Exchange
Mr.
mana¬
office
Talbot
Bendix,
Mr.
and
resident
Hempstead
Co.
in
the
Edwards
Hanly have been
partner
shocking
nat¬
upside,
the
industrials, basemetals, and Western oils, the prin¬
cipal sufferers. The golds however
provisions of
Pooling
sup¬
with
leaders
present emergency. Time in which
to
of
were
result of the in¬
a
source
descriptions, is
interests, the in¬
clination to disregard external op¬
U.
by
been
port operations.
Pre-Cambrian
conveniently situated for develop¬
ment
has
low-
expense.
that
Shield, the world's richest
of metals of all
pos¬
of base and
sources
at uneconomic
is
it
a
beginning
now
weaker tendency but
a
as
of
case
mini¬
a
the Canadian
The Canadian dol¬
lar
as
the
with
on
change in
urally lower
the
pur¬
chasers of bonds had counted not
stockpile
In
Canada
of Domin¬
absence
there
items.
de¬
a
partial explanation
a
curious
wiih the
action taken with regard to other
was
is
& Co.
strongly suggests
that it will not be long before the
immense
possibilities of the
new-
Defense Agreement are viewed in
their
the
proper
light.
Acceptance of
aluminum
Canadian
offer
CANADIAN BONDS
would constitute the obvious first
of the
recognition
in
step
neces¬
sity to set in motion the joint de¬
fense program.
U. S. private en¬
has
terprise
trail
in
cent
already
magnificent fashion.
epic
the
blazed
achievements
Re¬
such
as
development
iron,
are
and
page
of
Alberta
Government
Provincial
Municipal
Corporation
titanium
Lake
Allard
oil,
sufficient testimony of the im¬
mense
possibilities of U. S.-Cana¬
dian economic
cooperation. Look¬
26
CANADIAN STOCKS
World II it is only
necessary to recall the construc¬
tion of the Alaska Highway and
ing
back
to
the
Shipshaw
wider
Dam
scope
to
exemplify
for
celerated
activity
in the field
of
peacetime enterprise, the present
crisis is
likely to impel urgent
consideration
difficult of
normal
that
tention,
vanced
Two
Wall Street
New York 5, N. Y.
WORTH 4-2400
NY
1-1045
of projects that are
accomplishment under
Among those
conditions.
have
A. E. Ames & Co.
INCORPORATED
Consequently in addition to ac¬
already been given at¬
but have so far not ad¬
beyond the talking stage,
Fifty Cengregs Street
UoMloii D,
of
a
Luitweiler
however
events
pel record-making effort.
course,
product.
a
sup¬
achievement
when emergency conditions com¬
Vast Export Market Beckons
its
of
civilian
aluminum
of
the
for
S.
the
and
Canadian
tion
lit¬
was
Steep Rock and Quebec-Labrador
prise.
market
U.
the
finance and
power,
for
No
the
has
veloping a new industry in Can¬
ada, and it has given me a first¬
hand knowledge of the problems
of transportation,
communication,
electric
by
was
of
face to face with the
of
American
During the week there
ion
bewilderment
Canadian
It
undertaking.
of
increasingly
an
North
the
period
resources
tle movement in the external
of the
therefore is not to
far
play
in
role
the
in
defense effort.
might offer
of
lying
vital
that
immense
will
the
as
the
quantity
the
cially
pioneering task, the Steep Rock
deposits were a dubious prospect
unknown
question
Canada
initial
short.
venturesome
or
put into operation, there is lit¬
tle
ahead
welcome
friends
below
aluminum
would
proposal
tory
that
Whether
cline since the freeing of the dol¬
lar of approximately 3 points. The
Defense Pooling Agree¬
the
ment
garth, Julian Cross, "Pop" Fotheringham and other Canadian
in
Alaska Railroad.
not ambitious schemes of this kind
are
market
be
Ontario.
Eight
It
Ihe St. Lawrence Seaway and
the
Canadian
metals
development of
Steep Rock iron ore range in
hands
offer.
in Canada that
are
following the signing of the U. S.¬
ore
some
that
the curt rejec¬
result of
a
alloy
preoccu¬
ap¬
has been created north of the bor¬
grade
that goal has been my par¬
ticipation
the
supply
impression
unfavorable
edly
When
impetus
an
progress
The
ward
to
proximately one-third of U. S.
stockpile needs of this strategic
metal. Such a development would
also serve to dissipate the decid¬
Canada,
of
life-long
been
give
to
way
welfare
my
ex¬
likely to be recon¬
light of recent
change of policy is all
in
A
inter¬
constantly
the
logical outlet for Canadian
Canada, and who, like
products was the United States.
were
constantly searching
He pointed- .-out- -that-it would not
was:
sidered
sible domestic
Steep Rock Shows the Way
and
for
growing tendency to look to
Canada.
I
that U. S. long-
notably
domestic production
the
events.
in
of
for remedies.: GoHwm Smith
not
a
this, Canadian
come
of
termed
judgment,-must.be
large
a
my
there.
any
with
to
have
newspapers
Canada
outline- the
had
years.
veloped the habit of going south,
From that time
ness
Before
the
con¬
tons
seas
Canada's
me
over
native
summer
do
weeks
the newspaper world. I regret
that I did not have the
privilege
of knowing John Ross Robertson.
in
enough to feed
continent.
But
the
the honest,
intelligent and energetic men and
women who.
day by day, demon¬
strate
Joe
"Globe," Macdonald, and of
Atkinson, then a rising star
fish
all
successor
the
on
ex¬
given her
electricity.
entire
greatest
Her
offer
powers
source
her
in the pulp and
industry.
paper
of
considerable of his
saw
of
left
Mani¬
of
brought
have
children,
my
I
Canada's
resources
had
I
my
and the
the
who
has
stantly to Canada
but
panding
in
Business
any
acquaintance
Premier
was
John
toba.
the "Globe" to found the "News."
the
Willison,
when
planning
of aluminum is
centers
Brandon, until I sold them
the
to
year.
made
John
eastern
ties in
Sir
every
the
power
vacation land, which attracts mil¬
of American tourists
lions
1
busi¬
and
the electric
business I owned the utili¬
have
since
every
Ryrie's
less
I
every
Ontario
Mowat,
Minister
ment
years
Mackenzie King.
•
Canada is blessed with
which
nbarby
and
Toionto, I
attended meetings of the Ontario
Legislature as often as I could to
listen
is
15, I went to On¬
was
school
to
my
mile border with
Canada
since,
ever
early days in
my
land.
the
the Ca¬
to
social
my
of Toronto, Ottawa, Montreal, St.
John, Charlottetown and Halifax.
frustrated
Fronting
years,
back
and,
in
as
material
and
led.
Al¬
and
seven
have maintained
contrast to Europe's
548,000,000.
And
the both sides, and I have been per¬
acquainted
with
population of Canada is young and sonally
every
of
Nova 'Scotia
since
optimistic in spirit, while Europe's Premier
people
are
for
the
most
part Fielding.
crowded
and
next
vacations all
golden
a
opportunity-to learn to know the
potentialities
granted.
Saskatchewan
The
berta.
as
carried, in those days before the
account?
to
resources
of
activities, including ex¬ ness relations in the western cities
perience in electric power, rail¬ of Victoria, Vancouver, Calgary,
roads, lake shipping, iron ore and Edmonton, Regina and Winnipeg,
the post office, which
labor have the was the sorting and distributing
imagination center for a dozen surrounding
Cyrus S. Eaton
Gov¬
inaugurated
practical
In
It would appear
range
der
Grey
inces
finance,
and
at
when
1905
in
the governments of the new Prov¬
my
where
agri¬
ceremonies
on
government,
dustry,
the
myself
one
culture
present
was
Prime Minister Laurier and
Canada's
leaders
I
assets, I shall endeavor to qualify
unprec¬
edented
Canada
five months ranching in
and spent
to give every Canadian
the full benelit of these priceless
of her his¬
Her geography, her climate,
her
resources,
human and
graduation,
western
of
tour
a
the
I
in
settling
States
Saskatchewan.
tory.
By WILLIAM J. McKAY
lucky
was
loved Canada.
my
United
pursued
Canada today faces the greatest
economic opportunity
I
D. Rockefeller, Sr., in my
estimation, the economic titan of
all time. From this inspiring re¬
lationship came my decision to
make my business headquarters in
Ohio, reluctant though I was to
adoption of bold
and progressive policies of development.
Says vast export
market beckons to Canada, but aggressive attitude is required by
Dominion's big Institutions if prosperity is to grow. Points out
more highways and hydroelectric power is essential, and banks
and railroads must play full part in promoting development.
untapped
Canadian Securities
college
rny
spent across the border
John
opportunity for unprecedented era of prosperity, points to that
nation's vast
as
he
enough to find employment with
Ohio
Canada's
Canadian-born American industrialist, commenting on
of
summers
years were
in
Banker, Cleveland,
Investment
and
testified.
no
mean
By CYRUS S. EATON*
Industrialist
and a writer, he was
financier, furthermore,
estate of $1,000,000
that
left
Canada's Opportunity Through
Full Development
Thursday, December 7, 1950
.
.
.
Mass.
Number 4966
Volume 172
.
.
.
(2195)
The Commercial and Financial Chronicle
former
Corporation, payable Jan. 2, next,
to
with
CONSOLIDATIONS
NEW
At
BRANCHES
NEW OFFICERS,
42V2
REVISED
M.
Bankers
and
ETC.
the
additional shares to be issued
meeting,
the
First
and
Clifton
Trust
*
H.
W.
the
of
States
Trust Company of New York
on
Dec.
on
the 40,000
5,
150% stock dividend
a
outstanding
Dec.
27
approved.
The
be paid on
was
will
stockholders of
to
Dec.
on
shares of stock now
dividend
stock
held
This
11.
record
in¬
will
action
the number of shares from
crease
40,000 to 100,000 and will transfer
$6,000,000
tal.
surplus
from
will
value
Par
share
be
to capi¬
$100 a
present. Capital then
will stand at $10,000,000 and sur¬
Pursuant to
it is ex¬
pected that the trustees will take
plus
$13,000,000.
at
stockholders', approval,
action
formal
their
at
regular
Benjamin
Strong, President, said that it is
meeting
intention
the
7.
Dec.
on
the
of
trustees
to
of
$3.50
share
per
the
on
A previous
the existing stock.
regarding the plans to in¬
Capital
the
crease
appeared
issue, page 1799.
Nov. 9
our
%
in
purchase vthe Flushing
National Bank, of Flushing, N. Y.,
will
if
serves
Northern
Boulevard
25.
Nov.
on
in
The
82nd
and
Heights,
Jackson
Street,
Queens,
of
the
Company
New
Trust
the
declared
have
York,
share quarterly
dividend
for
the
period ending
Dec. 31, and an extra dividend of
25c per share, both payable Jan.
2, to shareholders of record Dec.
50c
regular
per
20, 1950.
a
a
favorably
is
institutions
The
appointment of Harvey L.
President, of the
Trust
Wall
70
Company,
New York to the
Committee of the In¬
ternational
Trade
Section, New
Street,
Monetary
York
of
Board
is
Trade,
an¬
by
Dr.
New
York Director of
Company of North
Traders
America
Committee.
voted
W.
of
the
Prior to
Requiring the
Company,
Mr.
Trust
President
was
financial
in
interests
the
of
In addition
National Bronx Bank.
his
J.
Edward
Chairman
and
the
stockholders
of
Flushing National at a meeting
to be held on Dec. 16, according
to an announcement made by S.
to
Sloan
Colt, President of Bankers
Following approval by the
stockholders of the Flushing in¬
Bronx
Trust.
stitution, Bankers Trust Company
cir-
Building Industry League,
City's welfare organizations.
by
upon
operations at 36-63
Main Street, Flushing, on Dec. 18.
The fconsolidation will give Bank¬
ers
Trust
its
third
office
in
will
civic
the
Bronx
of
Chamber
Director
in
Commerce,
and a
New York
of
many
begin
Queens
Greater
New
presently
It
York.
and Long
in Jamaica
offices
14th in
its
and
County,
has
Mr, Schwamm is active in
affairs, being a member of
Real
Estate
Board,
fcles,
Industrial
"Austrian
as
is the theme of
of the
(Aug. 7) and merged with
Lawyers Trust Company
(Sept.
18). In addition, it opened a new
Americas, of Colonial
will remain
pany
office
Avenue
Madison
1002
at
of
Company
York.
New
by the Austrian Con¬
and prepared by
Sponsored
sulate
the Av¬
Street and
Office at 48th
enue
as well as in
Man¬
Brooklyn and the Bronx.
Earlier this year Bankers Trust
acquired the banking business of
Title Guarantee and Trust Com¬
City,
hattan,
window display
a
view at the Rockefeller Center
on
Trust
Island
Recovery
Result of Marshall Plan Aid"
a
General
the United States Austrian Cham¬
ber of Commerce,
Inc., the exhibit
throughout Uie month
A
December.
of
special preview
the press was held
for members of
The preview
1.
Dec.
on
fol¬
was
lowed by a reception at Holland
(Jul.y 7). In announcing the pro¬
posed consolidation, Mr. Colt said House, Rockefeller Plaza, attended
Dr. Franz Matsch,
Austrian
that M. Lester Mendell, Chairman by
of the Board of Flushing National Consul General in New York, the
Bank, will become Vice-President press, officials of the bank, and
of
Bankers
Trust
Company in members of the host organization,
of its offices in Queens
County.
In addition, the entire
staff
of Flushing
National will
continue in the employ of Bank¬
ers Trust.
Mr. Mendell became a
Director
of
Flushing
National
charge
1943.
in
Chairman
elected
Bankers Trust
and
1942,
in
Bank
was
Company will gain nearly 25,000
new customers, and approximately
Albert L. Gettman has
been ap¬
Joseph
after
tires
Glass,
E.
25
as
years
who re¬
Auditor.
Gettman has been with the
(Guaranty Trust Company since
{1917, except for a period of mil¬
itary service during World War I.
He' has been Assistant Auditor
since 1931.
Mr. Glass, the retir¬
President of the
the Insti¬
of Internal Auditors.
is
He
New
tute
a
announced
if
by
effective
as
of the
Bank
Paterson
11, 1924, and was elected
in January,
1948,
Dec.
Officer
Trust
his discharge from the
in which he served during
World
Mr.
II.
War
Feo
De
was
by the former Pat¬
National
Bank
in
1923;
after
Manufacturers
New
opening
on
Dec.
have
approved
been
of
a
new
with
su¬
of
$150,000,000
on
the
date,
same
by
000.
The
fective
to
preference
the
The
Mr.
❖
of the
Bank
World
War
II.
the Navy, Mr.
entering
Sec¬
Cumber¬
of
Bank
National
the
of
stockholders
The
ond
❖
❖
#
Chicago,
of
its
|
6.
*,
,-T
'
National
Bank
the
death
announces
Chairman William
on
H.
if
which
Cress, President of the
Co.
company
that day.
handled
in
or
of dollars.
of Ann Ar¬
announced
From
acts
25
as
'Secretaries;
Griffin,
J.
Frank
Humphrey,
Victor
L,
Kaestner,
Arthur
few trust
years,
the
trustee,
cus¬
many
The Trust
Department
approved on Nov. 28
assets are now valued at approxi¬
the proposal to increase the au¬
thorized capital of the bank from mately $15,000,000, while the com¬
Md.,
land,
pany is acting as trustee of bond
11,000 to 16,000 shares of $25 par
had been associated with
issues of more than $20,000,000.
value each, or from $275,000 to
Keane, Rawls & Co. of New York
The company was chartered by
$400,000.
In furtherance of J;he
City, and Halsey, Stuart & Co. of
the State of Michigan on Dec. 1,
plans a stock dividend will "be
Chicago, both of which are en¬
paid in the ratio of five new 1925, for a syndicate headed by
gaged iri the securities business. shares for each 11 shares held by R. T. Dobson.
Less than
three
At the present time Mr. Lillig is
stockholders of record Nov. 29. A years later, a group led by Earl
attending classes conducted by Dr.
previous
item
regarding the H. Cress, present President, pur¬
Marcus Nadler, at New York Uni¬
plant appeared in these columns chased its holdings. Mr. Cress was
versity. Mr. Siebert was employed
Nov. 23, page 2000.
elected President in January, 1941,
by the former First National Bank
if
$,
if
during July, 1933, in a clerical ca¬
after
serving as
Vice-President
Stockholders
of The Bank
of
pacity. He advanced through vari¬
from 1928, when his group, pur¬
ous departments of the bank, and
Virginia, at Richmond, Va., ap¬
chased the firm.
He also serves
for some time has been serving proved
on
Nov. 27 a charter
Depart¬
Em¬
permit the increase on the Board of Directors.
capital stock from
ployees will observe their quarterAs indi¬
The present First National Bank $1,800,000 to $2,000,000.
century of business on Dec. 14, at
cated in these columns Nov. 23,
and Trust Company of Paterson is
a staff party.
the result of consolidations of the page 2000, this increase will be
as
Manager of the Credit
ment.
amendment to
of
This announcement is not
bank's
the
offer to sell or a solicitation oj an offer to buy these securities.
offering is made only by the Prospectus.
an
The
$6,000,000
:'
|t/.
Office),
'
•
"
,
Southwestern Gas and Electric
First Mortgage
•
Company
Bonds, Series D, 2
Due December 1, 1980
Dated December 1, 1950
E.
John B. Crouch (34th
Office), and Robert Pape
(Rockefeller Center
Price 100.50% and accrued interest
As¬
sistant Treasurers.
❖
'f
At
the
board
regular
directors
of
Farmers
York,
held
appointed
Vice-President.
formerly
an
directors
Midland
Y.,
if
The
an
As¬
He
Prospectus may be obtained in any state in which this announcement is circulated from only such
0/ the undersigned and other dealers as may lawfully offer these securities in such state.
was
a
share
on
Inc.
HALSEY, STUART & CO.
of
their
the-
of
meeting
&, COMPANY
(incorporated)
Marine
Buffalo,
held on
BLAIR
WILLIAM
OTIS & CO.
if
Corporation
at
Bank
of New
Harold
Assistant Secretary.
if
The
5,
Dec.
on
was
of the
City
of
Trust Company
Bottenus
sistant
#
meeting
millions
Lillig
Johnson,
Street
1
years
company
a
a
early
agent for
Dec.
on
was
only
its
company now
todian
Far*
#
Ann Arbor Trust
on
W.
Nov. 24.
«
Earl
Bank
increased
has
$250,000 to $300,of $50?-
Mercantile
of
old
9,
/'■$
capital became ef¬
new
Nov.
deposits of
Oct. 4. As of the
Mellon had de¬
of
Nov.
National
Ind.
&
rell
Bank
stock dividend
a
accounts
A
if
Mercantile
Hammond,
000
permissible under the na¬
tional banking laws.
had
$205,000,
$595,000 to $800,000.
its capital from
longer
Farmers
of
effective
Ohio,
if
absorption action resulted be¬
cause
this
ownership
was
no
"The
>)!
National
Second
The
Assistant
Office), As¬
Charles
L.
Street
(42nd
Company Dec. 6, in New York, declared a
announced the quarterly dividend of 12 l/z cents
2,
the
Warren,
the
and
Trust
York has
Vice-Presi¬
become
branches.
THOMAS
MULLANEY, WELLS &, COMPANY
*
of
of
June 1, 1946.
on
during
to
will
*
has served to increase the capital
the
during March, 1948, following his
release from the Navy, where he
Prior
Smith,
cash
usual
the
dividend
stock
Mich.,
Lillig entered the employ
former
Second
National
served
S.
in addition to the
of
*
A
proposed
merger appeared in our issue of
made Comptroller Nov.
2, page 1704.
Cashier he was
the
to
dividend.
that
as
equal
earnings of the bank in
1950,
bor,
serving
of the bank
the
year
distribution
posits in excess of $1,280,000,000."
first employed
erson
it
makes
of
following
army
the
from
The Mellon bank
has owned a majority stock inter¬
est in the Farmers for years, and
National
on
from
six
lon
Currie entered the employ
former
its
in
said:
pervision over the two new Mel¬
promotions
of Dec. 1. Mr.
Board of Trustees: Wil¬
Callaghan, James T. Gill,
H.
Pettit and
Ford
H.
the
sistant
N.
-
were
Pitts¬
The
President
years,
All
Cashier.
increase
000 both have been made available
were
"Post-Dispatch"
issue
2
the
branches of
as
National.
dent of the Mellon bank
Robert W. Siebert, Jr. to As¬
sistant
of New York, has
that the following ap¬
pointments
liam E.
Chapter of
Hi
and
Bank
Dee. 4
on
of
as
of
offices
Deposit
"John
Vice-President;
Assistant
on
the Farmers Bank for the past
to Vice-President and Trust
Officer;
Sullivan
S. 1 De
Feo,
Comptroller,
to
Vice-President
and Comptroller; F. Norman Lil-
Chamber
Bank
Hanover
Central
Trust Company
former
York
Offi¬
cer,
to
Dec¬
capital of the bank to $2,-
is President of the Colonial Trust.
JVIr.
ing Auditor, had a wide experi¬
ence
with corporations and with
the
Federal Trade Commission.
Austrian
Dec.
effective
The
Mellon
burgh
The officers and clerks
Albert S. Currie, Trust
This
18.
Dec.
record
of the
Arthur S. Kleeman
of Commerce.
Jones
O
pointed Auditor of the Guaranty
Trust Company of New York, it
was announced on Dec. 1.
He suc¬
ceeds
States
Robert
$13,000,000 in deposits.
if
United
are:
opened
offi-
senior clerks to
two
cerships.
lig,
Schwamm,
American
of
and
approved
were
became
Farmers
the
Company
Trust
and
date.
that
promotion of two officers of
bank
to
Vice-Presidencies,
the
and
Bank
of
000,000
by the stockholders of the
named
institution, and the
change
Company,
Paterson, N. J., has announced
the
tional
Trust
and
Bank
presently held.
present surplus of $2,000,000.
1
first
of the Board of the First Na¬
man
of
if
Chair¬
Peterson,
Raymond
of Phil¬
*
if
Pittsburgh,
Dec.
F.
Title
Land
«
Bank
tional
of
tional
company.
%
of both
5,, by the directors
Gas Com¬
of Canada, Ltd.
pany
the
each
The
surplus was increased to this fig¬
The plans of the merger of the
ure from $1,800,000 in April, 1950.
Farmers Deposit National Bank of
The stock dividend of $200,000 and
Pittsburgh with the Mellon Nathe addition to surplus of $200,-
directors
Buffalo and the Union
The directors of The Public Na¬
the
of
board
the
of
director
a
if
Marine Trust Company of
the
America,
adelphia.
oper¬
He also
charge of Malcolm
Office"
of
on
and
owners
elevators.
office will
new
B. Diffenderffer as Manager, and will
be known as the "Crosby Avenue
be
and
of grain
of
on. •American
Schwamm
approved
proposal
a
Dec.
merchants
a new
Proffitt,
of New
Bank and Trust Company
opening of
nounced
o
f.-
Bankers Trust Company
York
one week the
branch office at
Charles
ators
of
place at the board meeting
Vice-President
on Dec. 8.
The new shares will be
Company
of
issued on Dec. 29, to stockholders
was
on
Dec. 4
North
opening follows by
new
present dividend of $35 per share
item
The
quarterly cash dividend
a
stock, or at the annual rate of
$14.
This is equivalent to the
on
in the
of New York.
section
a
declare
Crosby Av¬
1705
at
Roberts Avenue,
at
enue,
Bronx
at
as
office
branch
in
share
new
Insurance
elected
years in
He is President of
Kennedy
& Co., grain
stockholders
one
take
Farnum,
the
of
of
10,-
laration of this stock dividend will
$
is
ratio
nine shares
Company of Clifton.
Di¬
Mr.
a
former
Bank
National
Charles
elected
Corporation.
was
the
grain business for many
a
special meeting
stockholders of the United
a
present
Kennedy has been engaged in the
At
of
to
and
Paterson,
as
Buffalo, N. Y.
(
declaration
000
15.
compared
cents declared in 1949.
same
of
the
the former First National Bank of
1950
Kennedy
rector
CAPITALIZATIONS
by
stock dividend in the form of
in
declared
effected
the former Second National Bank,
Dec.
record
makes total
News About Banks
Bank,
National
Paterson
This
dividends of 50 cents
of
stock
19
.,»•
I.
.r.1
December 7; ,1950
ire J >■.
the capital stock of the
!
'
"4
5JJ('
1
•
.»;»/(J i
i\y.
f
■
.'.';iid*iU'
1':./.
bp'
l "i
i
>.!'
ria
,4
:
1
.
>
I
»
-7'
-
&, COMPANY
20
The Commercial and Financial Chronicle
(2196)
Thursday, December 7, 1950
.
.
.
t
toward improvement and
go
What Lies Behind
Sapping
Of Dollar's Strength
tensions
By LELAND REX ROBINSON*
dangerous delusion that business
funds
the debauchment
of
our
continue
process can
acting
with
dollar
a
which
is irre-
deemable
in g o 1 d .
It
will
continue
profits with
replacement
allow¬
as
long
as
the
First, the net profits by Amer¬
ican business corporations, after
allowing for inventory
adjustments
placement
in
capital goods
of
costs
valuation
rising re¬
the
and
Federal
consumed
budget
un¬
risen little since 1948 and
and
balanced,
long
as
Federal
as
and
Reserve
banks
pur¬
huge
volumes of
debt
public
Leland Rex Robinson
which
have
seem
to
losing ground currently.
Re¬
duced to actual purchasing power,
these
profits
economic
than
less
were
commercial, while
chase.
production
1949
above
45%
in
1929,
industrial
country's
our
production topped 1929 by a full
60%.
The capacity of the na¬
tion's business to command goods
and services with
should' ings
has
its actual
tapping
earn¬
apparently Slipped fur¬
institutional
In
the
the
investors
than
30%
1920's,
excluding
average a
the
on
little more
all
of
and
stock
new
upon
which actually do not
anything like the amounts
In
under
there
short,
storm
accounting
shelter
period
of
costs.
con¬
The
is
for
adequate
no
in
anyone
inflating
bell
prices
rings
a
and
for
the
whole business
for
as
loan
community as well
insurance holder, the
the
savings
banks
savings
and
and
depositor, and for workmen
fighting
for
We
this infection
face
tire
retirement
economic
pensions.
of
the
organism,
en¬
through
the
poisoning at its source of the
dollar, the people's medium of
exchange and store of value.
the
monetary
form
this
1929,
Last
shares.
equity
of
figure
reached
In
72%.
To
the
of
tion.
sane
and
Present
the
are
under
of
prospective profits
system of business
nervous
American
our
organization
enterprise
and
our
private
institutions
related
closely
them in
initiative,
employment, wage
democracy.
Upon
fair
depend
measure
nation's
of
the
and
salary payments, our nation's eco¬
nomic health and, therefore, its
material
strength
Exacting
war.
based
in
and
peace
payments
wage
mis-reading of busi¬
earnings cannot, in the long
ness
be acquired largely by individual ther since last year.
In the
and
institutional investors
second
as
ar
place,
upon
urgent as
war
fiscal
malady is to
treatment,
the figure was only
15%, one-half the former propor¬
year
this
diagnose
made
and
prescribe
even
more
into the rigors
pass
we
have
We
economy.
no
choice but to keep public and
private
outlays
bounds;
far
so
within
within
prudent
possible to spend
as
income
our
governmental
and
the
both
on
individual
the
savings.
•
behind
the
sapping
strength
ing
the
of
dollar's
be illustrated by tak¬
can
look
a
progres¬
the
at
changing
ment
on
1940
instance,
the
the American
for
supply
of
money
people,
a
modest
very
an
this
and
1930.
or
less
was
The
than
and
dollars
power
Over four-fifths of
then
exerting
their
flooding
the banks;
and to move resolutely toward a
fully convertible gold standard
which
both
is
condition
a
and
a
by-product of these time-tested
policies of national solvency.
in the market places came
out of loans,
ments in
discounts and invest¬
private securities by the
nation's banks, mostly evidencing
goods and services competing for
these dollars.
Just
broke
before
the
Korean
War
than 50% of
the 1731/2 billion depreciated dol¬
upon
lar money
purchase
more
us
supply arose from the
of United States Gov¬
ernment
bonds
Reserve
to
a
condition of .basic
which
a
creasing
equipment, the results
prisingly low. American
tion's
real
earnings
4%
and
net
worth
-3%
are
sur¬
corpora¬
varied
be¬
their
on
eco¬
during most of
the decade just passed, about the
same
in the 20s, and much less
than this in the 30s.
In
the
When
This
of
are
expressed as a per¬
centage of net worth, adjusted for
replacement value of plan and
nomic
market.
price
profits
services
the
the
own.
these corrected corporate
When
sider
in
is
barely holding one's
trade; but as they represent defi¬
cits in Federal spending they add
little to the supply of goods and
available
volume
These
■bonds, thus converted into money,
put their tremendous push behind
•demands
upon
production
and
instability in;
ican
third
place,
payments
let's
made
by
corporations to their
turn
we
moderate
contemporary process
whereby large debts incurred by. earnings
from
con¬
Amer¬
owners.
these
very
often
and
inadequate
of corporations to the
cumulatively con¬ dividends which they pay to indi¬
verted into purchasing power for vidual stockholders, some startling
the people threatens to step
facts emerge.
The total purchas¬
up its
pace as we move toward a war
ing power of these dividends was
government
No
economy.
made
ever
are
medieval
alchemy
greater claims of pro¬
ducing something out of nothing.
The
struggle for honey money,
and for the fiscal and credit
poli¬
almost
exactly the
in
same
1949
in
as
the
the
1930, 1936 and 1937, despite
great rise in capitalization,
substantial
increase
busi¬
in
ness
activity, and the encouraging
gains made by labor. As a source
cies making it possible, must
eh-,
list the militant support of busi-' of personal income for the people
of
the
United States, dividends
ness and labor.
The subtle means
fell from about 7% of-their total
by which money is robbed of its
income in 1929-1930 and 6V2% in
purchasing power throws up a
1936-1937 to little more than half
smoke screen
disgusing the weak¬
ening effects
costs upon
source
and
of
the
of
soaring prices and
private enterprise, the
economic
our
bulwark
of
strength
liberties.
our
One of the most dangerous delu¬
sions of our times is that business
can
somehow
quences
of. i
n
the
escape
f 1
a
t i
o n
conse¬
or
even
benefit from it.
reflect
•An
Earnings reports
accounting fictions often
address
'
uncheon
by
Meeting
National Committee
New York
Dr.
of
on
Robinson
the
at
the
Economists'
Monetary Policy,
City, Dec. 4, 1950.
that proportion last year.
One
reason
for
this
appointing dividend
smaller
percentage
profits which
able
for
Much
i
are
record
of
is
dis¬
the
reported
actually) avail¬
stockholders'
payments.
Terms
excess
1939
and
losses.
of
one
was
subnormal
between 1930
profits
Well
over
generally
half of
our
cor¬
porations reported aggregate op¬
erating losses of about $33 billion
in
10
of
these
ther
time;
years
and
corporations
the
assets
fur¬
were
reduced
by the payment of
more
than $9 billion out of sur¬
pluses built up in the preceding
decade.
Any
with
parison
present-day
such
com¬
period
a
of
general depression is meaningless.
The
investment
manufacturing
ured
at
on
50%
the
average
corporation,
1940
a
least
in
cost
than
in
net
indicated,
level
profits
even
had not
than
more
be
price
doubled
during the past ten years. With
the sharp advance in investment
costs, and with the increased
pacity,
a
profits
would
3- to
4-fold increase
ca¬
in
indicated.
be
apparently high profits
largely to continuance of
capacity or actual over-capac¬
ity production. This is not a per¬
due
full
manent
condition.
The
"break¬
even"
point in business, particu¬
larly in manufacturing, is much
higher than formerly.
have
gone
New
•
prewar
be
up
more
construction
cost
well
figure.
Wage rates
than 100%.
and
over
All
replace¬
twice
reserves
correspondingly
the
must
higher.
A
comparatively small drop in
ac¬
tivity would in
net
many cases reduce
profits drastically.
The
most corporations is around three
times
quate
replacement
inade¬
charged
to
necessarily been
expenses,
has
used for maintenance of
plant and
equipment.
earnings
a
Of
the
remaining
goodly part has had to
tends
be
to
rela¬
tively high.
Wherever risks and
uncertainties are greatest, profits
should
equitably
be
relatively
highest.
Similarly,
the
profit
"rate"
must
be
high when re¬
search expenditures are
heavy and
initial expenses are great.
Because
of
the
difficulty of
raising "venture" capital under
our
sharply
"progressive"
per-'
income tax rates, growing
corporations must now retain a
large proportion of their earnings
as "reserves," both because of the
sonal
high cost of replacement of exist¬
ing plant and equipment, and for'
desirable
expansion
present-
of
capacity.
In recent years .< the
stockholders, or "owners" of busi¬
ness,
have tended to receive a
progressively lower percentage of
earnings in dividends. In the past'
five years, on the average,
rather'
more
than 60% of corporate earn¬
ings
after
Again
have
taxes
the
in
should
it
been
re¬
business.
explained
be
high profits, or in fact any
profits at all, do not, in the long
run result from high prices. Con¬
trary to public opinion, high prof¬
its do not make high prices; but
they
the contrary, the re¬
efficiency and
are, on
ward
superior
for
Under
management.
profits
econ¬
"residual."
are
is
what
our.
"free
They
system of
left
after
over
all
including materials, wages, sal¬
aries, etc., and after all overhead
charges have been met, such as
a
present
the
sales
prewar
proportionately
if
wish
we
in
the
light
at
be
their
of
taxes,
purchasing
will find that they must
power, we
discounted
order
to
more
than
by
fully
100%
price
U.S.B.L.
index average in
almost
170
level
now)!
lowest price; and thereby such a
producer sets the pace which oth¬
ers
must
follow, provided they
(from
79
1940 to
Popularly, both politicians
volume
of
volume, and
larger invest¬
and
labor leaders, as well as the press,
instead
Little
profits before taxes
net
of
more
such
thing—
profits after taxes.
than
ten
ago,
years
however, the rate of Federal in¬
taxes on corporate earnings
come
around 15%
45%
at
present.
comparison
is
business
is
Thus the whole
distorted,
return
actual
compared with
as
to
the
the
and
owners
of
grossly
exaggerated.
On the average, net earnings after
taxes, as previously stated, should
now
equitably
times
as
large
as
be
around
four
continue
of
etc.
the
From
expressed
as
percentage of "investment" or
of sales, vary greatly from indus¬
try to industry; they are
vastly different for various
same
foregoing facts and
the futility, as well
"in-equity," of a so-called
"excess" profits tax can be seen.
Ovqr
the
pending
profits
whether
be made by a manu¬
and the more efficient
can
facturer,
will
operator
profits.
An
the
make
higher
"excess"
profits tax,
from its very
nature, represses
initiative, destroys incentive to
greater
effort,
waste,'
higher costs and
higher prices. It is probably the
most
inflationary kind of tax
and
leads
so
encourages
to
which could be devised.
tion,
such
prevents
tend
to
addi¬
discourages or
investment, which
new
hold
In
tax
a
increase
would
capacity, and thus
prices down.
E. F. Hutton & Co.
(Special to The Financial Chronicle)
CHICAGO. 111.—Alfred M. Sea¬
ber
E.
has
F.
high, and the "profit mar¬
become
Hutton
Trade
been
recently
office
and
&
Building.
of
Chicago.
very
of
our
determines
customer
return per
gross
period
highly com¬
petitive economic system, only the
years
or
reasonable
time, and under
also
com¬
industry, de¬
■
the
particularly
upon
the
ment must be made in
inventory, quality of "management." In some
receivables, and cash reserves for types of industry the "turnover"
tax payments,
etc.
The rate of of capital "invested" is naturally
dollar of sales
*
*
the
as
business, the risks
Profits,
the
*
Alfred M. Seaber With
a
panies in
business.
conclusions,
related to net worth,
vary all over the "map," depend¬
ing on the capital structure, the
taken,
do
*
as
nature
to
in 1940, in manu¬
facturing companies.
Profits,
is
usually true, under the conditions
which have long prevailed in the
United States, that the more effi¬
If profits were
any
It
the
not been nearly doubled in
interim, just to make up for
shrinkage in purchasing
power of the net income dollar.
refer to
rate
same
labor.
in
the great
if there is
their
cient producer tends to sell at the
reasonably "normal" in 1940, they
more than twice as high
now, even though the investment
now
for
wages
prices for
in
should be
—as
of
price,
paying
same
are
same
the
increase
general
interest,
for
50%
allowance
make
substantially the
their materials and the
look
to
depreciation,
selling at virtually the
and even though all
lower
cases
present net earnings, after
was
Recent
are
many
the
would
though the
in
had
the
immediate prewar period. Hence,
for this reason alone, a 50% in¬
crease
is
Again,
fig¬
in
at
of
profit margin per
sales
In each industrial group it usu¬
than in prewar normal years.
now
basis, is
higher
profits
because
of
ally works out that a large pro¬
portion of the companies fail to
make profits, even though all are
and sales with
power,
receipts
heavy
and
padded reported*
corporate earnings, which are not
all
is
taxes, and the like.
meaningless comparisons with that period.
profits taxation futile as well as inequitable.
The entire period
these
of
render
prewar,
ments
mpst
in plant investment, purchasing
prewar
gross
constant scramble for in¬
Federal
by
dollar
the
cases
insurance,
This creates for business
.
such
omy,
By ARTHUR W. MILLER
general rise in
ascending
tween
other banks.
and
its
investment
the
long process¬
ing involved, or because of the
high degree of mechanization. In
are
Wherein it is alleged that comparisons with the "subnormal"
1930-39 profit period are meaningless; that changes from
breakeven points, with increasing
production costs and heavier cor¬
porate debt, is adding its toll to
income,
of
of
that
from
in
billion, arose largely! mounting taxes in preventing any
peacetime needs of trade; natural increase in ratios of prof¬
industry.
the
because
Federal obligations and thus keep
them
On Recent Corporate Profits
iess than $51
from the
"turnover"
costs of operation have been paid,
per¬
for each dollar of
average
sales
the
low
tained
Some Realistic Observations
replacement
rela¬
types of manufacturing, however,;
competitive
centage on sales.
Last year the
equivalent of 5 cents was earned
rencies in tills and pockets, during
the last quarter century.
In June,
i926,
adequate
costs, make
of our money supply; that
is, all bank deposits and all cur¬
.sources
and
is
sales
of
low, as in the wholesale
business, for example.
In many
better
the net
people's- profits of American corporations,,
: after inventory valuation adjust¬
the
-
lies
What
sive
of
reflection
dollar
per
tively
level; to tighten our belts on per¬
sonal
consumption in order di¬
rectly and indirectly to buy
*
■direct
gin"
dollar
fictions.
and
debt financing for Amer¬
ican business corporations was in
funded
be
is
new
lending
as
1929,
Now what, are the facts?
ances.
to
and
of
intermediaries
great numbers of small-scale
for
inventory
indefinitely inadequate
i
issuance
to
debt
other
and
glowing statements which combine
fortuitous
resorting to borrowing
funds of life insurance companies
Our financial columns are full of
This
own
and undistributed profits,
banks,
funded
their
beyond
prof¬
corporate
excess
earnings
exist in
reported
from
debt is the modern printing press
built
taxes
ventions
savers.
to
seems
up.
have been
straying far from economic reality.
money.
by hastily improvised
its
is gradually
reserves
can
monetizing of government
route
risk-bearing
venture capital
ing
Points out rising net profits under
inflation are unreal and a delusion.
Says, as result, riskbearing is becoming a lost art in U. S., since there is no
adequate storm shelter for anyone in a period of inflating
prices and costs.
The
sacrifices.
Govern¬
ment can easily kill the proverbial
"goose that lays the golden egg"
necessary
More and more our
business corporations, when seek¬
its harmful effects.
escape
of
The
the way of becoming virtually
lost art in the United States.
drying
is open-door to inflation, Dr.
currency
a
that
is
truth
a
Vice-President, Economists' National Committee
on Monetary Policy
Holding irredeemable
conclusion.
sobering
very
labor from its due share
run, save
of
This
New
Robinson says it is
ex¬
the dearth
of
equity financing.
brings us to a fourth and
new
in
Adjunct Professor of Political Economy, New York University
because
prior
Wm.
associated
Co.,
Mr.
with
E.
thereto
with
Board
Seaber
the
Chicago
Pollock
was
of
has
for
&
Co
many
with Merrill Lynch, Pierce,
Fenner
&
Beane
in
Florida
and
Number 4966
Volume 172
.
.
The Commercial and Financial Chronicle
.
(2197)
unless
Winter Business Outlook
be
their
section
away
and already
in wages will prove to
illusion.
Subsidies given
an
one
industry during recent months
a price reaction has set
in. Warns present is no time to buy everything in sight, and
looks for much stricter credit regulations to have a depressing
I
effect on inflationary spiral.
Mr. Babson contends output of
■
improve
increases
By ROGER W. BABSON
has exceeded consumption,
employees
1 output to compensate for increases
in wage rates; otherwise, future
mean
taking wealth
from another section. In the
long run employers are only cut¬
ting their own throats by charging
too high prices.
Honest
>
services
value
for
should
be
and
goods
the
aim
of
us
Minneapolis, St. Paul and Chicago
has
enabled
of
members
the
Ghrisfensen Joins
ex¬
change to do a much finer job for
the investing public. The addition
of each transfer agency in our
territory adds to 'the ease with
which
the
public
and it creates
broader and
a
Andrews & Wells
Andrews &
Wells, Inc., 70 Pine
Street, New York City, dealers in
state and
municipal bonds, an¬
served
be
can
more
nounce
fluid
market
for
the
securities
which
are
will
listed
be
on
the exchange.
that C. Raymond Christen-
has
sen
There
21
Dec.
their
joined
1, 1950.
staff
as
of
Mr. Christensen was
additional transfer
formerly with Chemical Bank &
higher taxes bonds except Convertible Bonds. all. Regimentation is not the an¬ offices announced within the near
Trust Company where he was an
The plan¬
is casting Have the other half of your in¬ swer to our troubles.
future."
vestment funds in Cash, Savings ners, whether they be in Washing¬
Assistant Vice-President in Charge
a shadow over the Business Out¬
London or Moscow, never
look for the coming winter. These Accounts, Government Bonds, etc. ton,
of
the
Government Dealer De¬
create wealth
all they do is to
With C. H. Wagner
apply
to awaiting more favorable buying
partment. He was associated with
redistribute
the
fruits
of
other
automobiles, opportunities later.
(Special to The Financial Chronicle)
the
latter
organization
for
22
peoples labor. This is not treating
refrigerators
Political Outlook
one's neighbors fairly.
Basically
NEW ORLEANS, La.—Thomas years, during which time he built
and television
No one in this world has gotten what really counts most of all is
sets;
but not
J. Flynn has joined the staff of one of the largest dealer organiza¬
for nothing for any how we people treat one another.
as
to
most something
C. H. Wagner Investment Co. of tions in government securities in
Only through an economy based
great length of time.
I should,
con sumer
the country.
therefore, like to point out that on the Teachings of Jesus can we Tulsa, Okla.
items.
The
•
prospect
credit
and
of
restrictions
—
•
.
During
know
we
the
of
industry
First Year of Midwest Stock Exch, Successful
has
con-
s
u
m
t i
p
been
trucks
and
Roger W. Babson
have
been.-
produced
a
Homer
t
year;
now
of
20%
over
the road.
on
had in member firms and member
operation of
year's
"Today, Nov.
recorded
However,
prices
we
has
set
member
year's
age
tion
the
opera¬
of
Exchange.
last
ness on
1949.
back to pre-June
New
construction
rently off sharply.
is
cur¬
sults
We know that
bank loans
further
Homer P.
chase
of
boom
in
the
pur¬
during
goods
consumer
will
18,668,486.
with
certain
the
to
year
materials
in
short
of
cial
supply
effect
ness
on
and
have
an
are
estimate for the
month of November.)
reaucrats do
hedge
in
an
in¬
taxes
verse
years.
companies
civilian
to
154%
now
by
buy
that
11-state
by members of
area
"During the first year the
Every Thursday, The Commercial and Financial
Chronicle devotes
brings the total number of issues
available for dealings on our ex¬
(These
464.
to
47
new
estimated, the 400 members of
figure compares
income for all members
30 different
the
Chronicle?
received
of
Purpose?
a
The
subject to final audit, will be
of $35,000.
"Memberships in the new ex¬
change which were sold
1949, at $2,500
1,
originally
latest
per mem¬
"Great
on
of dividend
Corporation
was
founded 111 years ago to
help its subscribers to be acknowledged as the
posted individuals on financial and general
best
business affairs in their
community.
emhasis has
been given
Today, many thousands pay $45 per year for
$
§5
the privilege of receiving this
g
has7een"givenl\o'°the' pbcfng'of |
memberships
inactive
publication,
&
CHRISTMAS GIFT SUBSCRIPTION ORDER
in
bei;s who will make the Midwest
Stock Exchange their main line
of business.
This policy will be
——
——
—
«
the
exchange, to the great ben¬
The increase
$ The Commercial and Financial Chronicle
g 25 Park Place, New York (8) N. Y.
in a
business done
by Chicago members of this ex¬
change, but for outside members
as well, as in the
past 12 months
are
continued, thus forming a strong
base for future growth.
k*
public investor innew
fast growing
^
Commercial and Financial Chronicle for one year
g
E
-p0
Cleveland
ing, and this together with the increasing numbers of applications
not
the
only
Stock
most
apparent
of the
Louis
St.
offices
branch
and
of
the
Midwest
Exchange have poured in a
volume of
3,305,470 shares of busi¬
this new exchange.
This
to
ness
compares
two
with 832,316 shares these
exchanges did in 1949, or an
increase
of 297%.
"Possibly
from
a
of
more
"The unusual
in
terest
exchange
importance
long-term standpoint than
this
has been most gratify-
est
,
a
$
I
•
,
...
enclosing check for $45.00 lor which please send
am
#
tfjf
Address
listing, from
the interof investment corporations and
g
$
Cit
acquiring
«
continued
certainty.
«
and
inquiries
for
suitable companies, and
investment
"The
offices
seem a
makes
addition
in
in
dealers
memberships,
growth
money
a
securities;
announcements;
earnings, and a
$7,000.
by the Board of Governors during
the
year
to the elimination of
memberships
held
in
inactive
these
data
The Chronicle
The present
for sale at
both listed and
Municipal News Section.
figure of $5,000. There is still a
demand for membership with a
offerings.
record
complete
price through the months. The last
sale for a membership was at a
of
on
over-the-counter
bership have increased steadily in
dearth
Monday Issue includes
quotations
excess
Dec.
and
Registration
day edition.
ure,
'
In
ings sections, in the Thurs¬
What is its
profit in their first year. This fig¬
in
are some
Prospective Security Offer¬
of all the
at
there
departments and
features, including Securities
Now
participating in this
for a similar period in
$2,185,067.
"The exchange
operated
1949
All told,
ers.
What is the
exchanges
merger
special
by top authorities—
banking and business lead¬
$5,551,732. ■ This
with an estimated
approximately
edition to current invest¬
articles
their commission
from
income
an
ment, financial and business news and
listings,
incidentally,
are
more
listings than the four merging
stock exchanges have had all told
in the last 12 years.)
"With the month of November
Midwest Stock Exchange
★
ex¬
change has admitted to listing the
stocks of 47 new companies. This
change
*
*
New York Stock Exchange.
the
in
Give
Subscription to
THE COMMERCIAL & FINANCIAL CHRONICLE
compares
maintained in the
with 301 offices
same
This
offices.
505
a
members main¬
the exchange, our
tain-
area,
g
comparison
only securities
make some
state
adjacent to
of new and younger mem-
is
both during good times and
bad times; and where the manage¬
ment is of high character. Buy no
Midwest
11
the
and
ex¬
*
★
★
of the markets for all shares listed
Have less than half of
half
"In
which is the territory
Ex¬
of these four
efit of all investors.
the total funds in common stocks.
this
all told
Stock
other stock exchange.
gift problem
broker¬
firms who maintain
hands
on
of 1946-47.
pouring water over the infla¬
on which they were
companies
and
137%
volume for its first year
an increase far and be¬
any
held
are
investment
changes has increased the liquidity
gasoline only a short
time ago.
This vacillating policy
requires careful diversification of
investment funds during the com¬
For
of
Midwest
memberships
membership market is $5,000 bid;
there is one membership offered
much accelerated,
increase
"The merging
tionary fire
of
in
be even closely
not
dumping
ing winter.
period
and is an increase that can¬
approximated
ness,
manufacturing
policy makers
the
active
yond the increase in general busi¬
Diversify Your Investments
Government
more
gen¬
represents
margins cut, War stocks are cer¬
tainly at their peak. Don't forget
what happened during the renego¬
tiation period
for
the
in
change
More
their
than
this
but
fully converted from
military
production
have
will
much
stock exchanges
it has
than
20
previous.
business in
been
1950
in dollar
1949, and naturally the activity on
common
been for the
burdensome
during 1951 will have an ad¬
effect
on
earnings.
Many
higher
last
security
in¬
an
share volume,
the year
over
has
eral
in
137%
increase of 154%
an
"The
stocks
should watch their step. The DowJones Industrial Stock Average is
is
of
volume
things.
Investors who search for
flation
and
adverse
Government bu¬
queer
an
"Percentagewise, it shows
crease
the normal flow of busi¬
profits.
$502,629,-
was
figures for November, 1950,
not available,
the foregoing
figures include
ities, business profits will not be
uniformly good. Dislocations will
take place. This will create short¬
ages of materials throughout the
can
This compares
with a dollar
volume
of
$197,811,122 for the
previous 12 months of these merg¬
ing exchanges. (In that the Secu¬
rities Exchange Commission offi¬
being funneled into defense activ¬
nation which
of operations
264.
un¬
allocation
period Dec. 1, 1948 to Dec.
"The dollar volume for the first
doubtedly maintain high employ¬
ment, at least during the coming
Due
was
compares
changes merged to form the Mid¬
west Stock Exchange.
Outlook for Defense Spending
will
figure
Minneapolis, St. Paul and Chicago
Exchanges, which were the ex¬
certainly have
1951
months
12
This
vol¬
1,1949, by the Cleveland, St. Louis,
depressing effect on the infla¬
tionary spiral. Now, is no time to
buy everything in sight.
winter.
figures:
volume of 7,885,644 shares
a
for the
a
Defense orders in
the
for
ume
recent months. Much stricter cred¬
it regulations
Hargrave
following
"Share
Recent increases in
tremendous
b,y
cut-backs
outstanding have been
of
by
914 offices in 44 states.
as
the
largely siphoned off into consum¬
er credit
expansion. * This caused
a
have
indicated
Government Agencies haveartificially stimulated home build¬
ing.
With the tightening up of
controls
re¬
isfactory,
eral
will continue.
Decrl;
The
been most sat-
the easy credit "policies of the Fed¬
Credit
It
busi¬
started
few weeks. The sales of many con¬
levels.
the
Midwest Stock
sumer-items
are
outstanding mem¬
400
are
these
summer.
during
there
berships in the exchange; 287
to your
felfl f||V&
%V: 'It
time
of the first full
find already that
in, with lumber
breaking
At the present
offices.
firm
has
exchange
the
the completion
by over 50%. Scare
buying lifted the sale of household
appliances to unprecedented
reaction
growth
great
30, 1950, marks
annual output
heights during the
solution
result of the first year's
mere
on the first
the new Ex¬
change,
said:
reporting
Exchange,
all
The recent
previously
any
the
operations of the exchange is the
rate of home construction has ex¬
ceeded
Chairman
Hargrave,
says
of the Board of the Midwest Stock
the unprecedented rate of 10 mil¬
per
P.
Best
the
results have
satisfactory and operations have been profitable.
Hargrave, Chairman of Board,
Homer P.
o n.
Automobiles
units
in
trouble
serious
that
output
exceeded
lion
for some very hope to maintain and improve our
this country splendid standard of living.
heading
are
we
re¬
months
cent
of
.
transfer
St. Louis,
new
Cleveland,
slate
Mention that this is a Gift from
„
t,
,
-
-
*•'
,
^
tg
i/
■
...
.
.
:
TI
Ihe
«-
-
12
The Commercial and Financial Chronicle
(2198)
Have
Tight Labor Situation—But
Longer Work Week Not Needed!
By HON. MAURICE J. TOBIN*
\
Secretary of Labor
Women, the physically handi¬ and health. In the current posture
and the older workers of affairs, safety assumes a new
special consideration in hir¬ and urgent priority.
We simply
ing, in training, and in all other cannot afford industrial accidents.
respects, clearing the way to the Every eye that is lost, every arm
fine
contributions
these
groups that is injured, every human body
can make.
No one is better quali¬ damaged or killed is an asset to
fied to bring these considerations those who would destroy us and a
forward than State Labor Com¬ calamity for the free countries of
capped,
need
missioners.
Secretary Tobin, though stating we face tight labor situation,
holds labor
supply
workers, and therefore
a
more
standards is not needed
minimum wage
However,
now.
We have the machinery now for
the orderly channelling of man¬
pre¬
immensely increased apprentice supply will be required,
dicts
and
power
of
into the necessary jobs. The
great
against neglect of health of workers and conditions
warns
for Channelling
public
Federal-State
em¬
ployment services
agencies
employment.
are
manpower
pool
to
the
proper
re¬
quirements, and release the supply
staggering changes which situation will be tight, but not be¬
where it is most needed. The Fed¬
Lave taken
place in the world yond our capacity.
eral-State system of employment
Now, in a tight situation, pru¬
gince this labor legislation confer¬
offices
reaches
into
virtually
ence
first met in 1933 challenge dence in conserving what one has
becomes the first law of survival. every community. They can do the
the imagina¬
job.
We are already aware of pressures
tion.
Seven¬
For the moment, at least, our
to relax maximum laws in the in¬
teen years ago,
chief difficulty has to do with par¬
terest of defense production. When
all of us were
ticular skills and occupations, in
we get into mass production, these
thinking only
areas with a heavy concentration
o f
domestic
pressures may grow.
Surely we
of
defense
employment.
This
cannot so soon have forgotten the
problems
shortage points up the need for
experience of World War II. When
against a back¬
more apprentice training.
relaxation came, the hard realities
drop of four
I am sure you will want to face
of
fatigue,
illness,
absenteeism,
years
of de¬
up
to this need to increase our
and labor turnover forced a re¬
pression.
In
skilled working force.
It is not
turn to sound standards to main¬
those
distant
far-fetched to say that the deci¬
tain production.
days, we gave
sion in the struggle of the free
scant
There is general agreement that
thought
world against the slave world may
to interna¬
current
defense
production has
depend upon how well the train¬
tional
affairs.
not reached a point where relaxa¬
ed, efficient productive force of
None
of
us
tion
of
hours
laws
is justified.
this country can out-produce the
Maurice J. Tobin
dreamed then
Should it become necessary later,
manpower at the disposal of the
that
the
we will want to work out coopera¬
day
aggressors.
We certainly cannot
would come when far-away
places tive operating procedures, to sus¬ win
unless
every
American is
and far-away events would force tain basic labor
laws, and to take trained and equipped to give the
us to take measures to
protect the care of real emergencies when, utmost service.
We rightly boast
free world. Now, of
necessity, our for brief periods and under cer¬ of our know-how. This is the hour
thoughts and energies must be di¬ tain conditions, hours standards to
spread that kno\y-how.
rected to making our nation
strong may be relaxed. I can assure you
The total number of apprentices
and invulnerable.
For that pur¬ that if and when all-out produc¬
in
training at the present time
is at hand, we
pose, we must think in terms of tion
shall have meets
only about 25% of the need.
unleashing America's great pro¬ worked out, in advance and in co¬ In
fact, we do not have enough
ductive might.
operation with all interested Fed¬
apprentices in training now to re¬
Obviously, that great might is eral agencies, a national policy on place workers who, through death
production. or
dependent upon the men and wo¬ hours for optimum
retirement, leave
the
labor
men
who are trained and avail¬ This, we believe, will further sup¬ force. This
situation would be se¬
able to man the machines which port your standards in the States. rious even in
peacetime. The sup¬
turn out
materials for defense.
What I have said about hours ply of trainees is
inadequate for
You are all familiar with the
fig¬ also applies to all other kinds of the partial mobilization in which
ures that spell the difference be¬
working conditions. We must not we find ourselves and will be
tween the manpower available in
only maintain our high standards, dangerous in the extreme ifs the
1940 when we began to
Can anyone climate changes to total mobili¬
tool-up but move forward.
The
,
for
World
War
II, and the situa¬
that
free, untired, healthy,
tion today. We had a reservoir of
vigorous, and highly skilled work¬
more than 8 million
unemployed ing force is not superior to a slave
ready and eager to produce the working force? Should we not .be
argue
volume of guns, tanks, and
planes,
that overwhelmed Hitler and Mus¬
high standards?
solini.
tions
What
day?
this
is
the
situation
Unemployment
year
was
1.9 million and
in
estimated
to¬
October
than
more
that
our
our
Speaking of conservation of
resources,
let
right here about
It is obvious that, as our armed
forces expand from 1.5 million to
3 million, and as our resources are
sters
channelled
correct the
More
to
forces,
the
needs
of
the
will
manpower
emerge as one of our major prob¬
lems. We already have a civilian
economy
level in
Our
our
labor
large
so
operating at the highest
peacetime
force
has
history.
never
been
it is today. Yet it must
be expanded to meet the nation's
defense requirements.
as
Labor Supply Can Be Expanded
That
labor
can
and will be done.
supply is much
Our
for
.
our
.
.
the
most
me
future.
our
say
to
a
the
last
train
ers.
the
and
labor
war,
be
absorb
serve
new
due strain
as
instructors for
In this way, we can
workers
without
un¬
industries and work¬
on
ers
and
escape
the evil day of
by
employers.
Praise¬
worthy as the motives of some broken trade standards and prac¬
youngsters may have been, what tices.
In the light of this apprentice
happened was not good for them
in the long run.
A better educa¬ shortage, I think you will agree
tion would have prepared
S.
them that the U.
Department
of
better
service
the
to
nation.
Labor
should
be
enabled
to
pro¬
flex¬
Together, we must strive to put vide technical and promotional
ible than is
commonly believed. into practice our democratic ideal assistance to industry in situations
It can readily be expanded in the that all our
boys and girls should not now covered in the operation¬
year ahead by roughly 2 million have freedom from early toil and al
scope of the Bureau of Appren¬
in the context of partial mobiliza¬ should have an
opportunity to ob¬ ticeship. Actual training will, of
more
tion.
Normal growth of the labor
force will add at least a half mil¬
lion workers. An increased inflow
tain
good
a
education.
to it that our children
in
school
where
they
of
teenagers, housewives, the han¬ trained for better
dicapped and older persons may days to come.
be
expected to the
least 1V2 million. In
extent
of
at
Women
addition, 100,- greater
dOO veterans will be out of school
and ready to go to work. If neces¬
We
see
will
must
course, remain in the usual cap¬
kept able hands of management, labor
or
vocational education experts.
will be
are
service
in
the
But,
with
of
ance
be
returning
measure to the labor
the
advice
labor
and
and
in
much
force.
can
assist¬
management,
and in cooperation with the
States,
be done to promote de¬
greatest unused re¬ velopment and adoption of plans
servoir.
We must remember and and
programs
to
improve
the
sary, an increase of one hour in
recognize their continuing and es¬ skills and techniques of those emr
the average workweek would be
sential
contribution
as
home- ployed in industry, to collect and
the equivalent of
400,000 workers. makers and mothers. Our recruit¬ disseminate information, to give
Adding up these and other fac¬ ment of women must
put empha¬ advice on and evaluation of pro¬
tors, we should have a substantial sis on
cedures and methods used in in¬
those
increase in the labor
supply next
our
who
are
without im¬
family responsibilities— dustry, and to conduct studies for
the full utilization of the work¬
single and older women.
And
our present foreseeable
needs. The wherever
lsl
hojenemakers are used, force.
we will have to make
In
*An address by Sec. Tobin before the
adjustments
considering manpower for
17th National Conference
which will eridble them' to
pn Labor Leg¬
carry defense,,
yqu will undoubtedly put
islation, Washington, D. C., Nov. 29, 1950; the double"ldad.*XiJ
*
great
year
XJt
They form
—
portant
probably enough to meet
•
\
I
>
y
\
r
r.O).n!
I h. > -II r'; >1.' '
'"->0
•
i
<
\
•* m.'i
'
i
'•
total trained manpower sufficient¬
ly to permit total mobilization if it
becomes necessary.
This is more
practical and sensible than trying
suddenly to
is upon us.
expand after
Series of Orderly
crisis
a
Industrial
Steps
Contemplated
course,
The Presi¬
on
What
of
contemplate is
we
series
a
orderly steps proceeding from
Safety has drawn up a voluntary conditions of today and tomorrow
blueprint
that
represents
the into circumstances of increasing
know-how and skill of over 500 of stringency
in
the
nation-wide
the nation's leading safety experts. labor market. It will not be easy
These recommendations
to
as
use
mote
is
you
are
fit
see
yours
to
pro¬
to
expand
needs
mnapower
for
defense production, for the armed
The important point forces and for civilian production,
these recommendations and still get the right men into
the
work-bench
level the right places at the right time.
safety.
to
get
down
to
where accidents
occur.
In the de¬ That is the reason we must try to
for either partial plan now for future contingencies.
or
total
mobilization, the States I repeat, we cannot wait for the
will have increased responsibility crisis to be upon us.
in the feild of industrial safety.
We do not know how much time
fense
program
That
responsibility
action.
mediate
for
calls
Manpower
im¬
may
be the decisive factor in the strug¬
ahead. We need to conserve
every single human being.
gle
In
each
should
be
State,
given at
will have
we
have to
like the confused
ladelphia
we
we
are
far
is
the
answer
it
station,
York?"
New
to
it
that
bit
in the Phi¬
man
railroad
may
a
who
"How
asked the information clerk,
basic
to
how far
nor
Perhaps
go.
consideration
once
and
85
was
got
miles.
legislation which will insure ade¬
He wandered away only to return
uniform
codes
and in a half-hour to inquire: "How
injury statistics on far is it from New York back to
which sound preventive measures
Philadelphia?"
can be based; to continuing State¬
The tired information clerk tes¬
and
quate
standards;
to
wide programs
that spotlight crit¬
industry safety
tily answered: "Look, a few min¬
utes ago I told you it was 85 miles
problems; and to plant service by from
Philadelphia to New York.
State safety personnel
that will It's the same distance back." The
meet
the
requirement's of both man
waggled his finger at the
large and small operations. No clerk
and
said:
"I've
got
you
ical
essential
or
in
State
the
overlook
will
important
conservation.
manpower
As
Union
this
want
to
angle
of
doesn't
It
low
that
it
only
a
background for your deliber¬
to
let me point out that our
immediate and foreseeable task is
to
there.
It's
ations,
expand our defense production
New
necessarily fol¬
the
New
distance,
same
Christmas
week from
Years,
from
year
is
but
it's
Years
a
whole
to Christ¬
mas."
possible, while at the
The time and the distance may
maintaining
a
high
be long, or it may be short. What¬
level of civilian production. If we
are
to have total mobilization—a ever it is, a free America must
as
rapidly
as
time
same
development
but
with
the
resting
not
with
Kremlin—the
us
basic
need, of course, is plant capacity
and adequate trained manpower
we
hope
at this
to achieve
and
will
coerce
be
us.
ready.
We
will
voluntarily and in
a
No
do
one
the
will
job
spirit of true
cooperation.
We Musi Take These
empngs^ oi),industrial safety
M
lift-.
Things Into Account!
ap¬
work¬
ignored
for
by the States.
Conference
dent's
needed
new
repeat that wasteful ex¬
Trainers must be de¬
veloped to
often
too
of
Many of
perience.
attendance.
were
expan¬
are
how
combination
school
laws
us
increased
will
influx
green hands.
Child
of
most
shortage, and the
are
being taken to
supply
impossible through
a
be done
must, of
Apprentices Required
must not
work
gradual
more
total
plant by adding
defense production to civilian pro¬
duction.
Thus,
we
enlarge our
A
This safety job
the What
at
shortage.
of our boys and girls flocked
into jobs of all kinds, hastily de¬
serting school, or attempting the
of
is
you will remember
unsatisfactory the "quickie"
training of the last war was. We
young¬
precious asset
In
shortage
immensely
prentice
our
many
armed
word
the
steps
proper
An
human
this
a
our
pro¬
it is reasonable to
expect this level to drop by a good
half-million by late next year.
doubt,
a
serious
of
aware
dividends in
pay
most
Fortunately,
upon
methods
be thrown about
Without
of
moment.
All of the protec¬
only ducing force will
the long haul.
at
insistent
ever
and -conservation
can
zation.
a
Thursday, December 7, 1950
moment is
sion
worker.
every
Manpower
utmost
our
.
insure the health and safety of
to
Have Machinery
than 2 million
longer work-week or relaxation of
be expanded by
can
We must do
the world.
.
.
"As
regards Europe our case will be ruined if
we reject
outright the deep conviction, notably in
Great Britain, that a socialist economy is for Euro¬
the only alternative to communism—'capital¬
being considered both inadequate to produce
greater economic equality and obsolete in relation
to the problems facing Europe today. Whether we
like it or not, we must recognize that this conception
is widely and firmly held; and that we cannot ask
Europeans to abandon it and return to the doctrine
of free enterprise merely because this doctrine still
appeals to influential Americans.
peans
ism'
"Nor should
we
assume
that since the
unilingual
and
largely agrarian American colonies managed
(not without difficulty) to unite into a single tariffless market in the 18th Century, multilingual and
highly industrialized Western Europe ought to be
able to do the same thing in fairly short order today. v.
We must get over a tendency to look upon Western
Europe as a backward area that needs only a bit of"
vigorous American pushing and bullying to advance
into an economic situation resembling that built
upon our continent in totally different times and —
conditions.
"As
regards Asia,
we must abandon equally naive
the assumption that the demo-
attitudes, such
as
cratic electoral
system is applicable there and that
iin¬
former colonies of Western powers can step
straight
from complete dependence to complete indepen¬
dence if only their rulers transfer the power to
native nationalists."
Harold Callender, chief of
—
the New York "Times" Paris Bureau.
Here is
some
good advice for the "re-examinists."
f
J
Volume 172
The Commercial and Financial Chronicle
Number 4966
(2199)
Blair
Public
Utility Securities
Stock of First California
Columbus and Southern Ohio Electric Company
the
City of Columbus and a large surrounding area, which includes
portions of 23 counties. Transit revenues contribute about 16% of
total revenues, but late in 1949 a separate company—Columbus
Transit—was set up to take over this portion of the business. The
the
of
most
important de¬
ties
$7,553
and
the
was
second
Utili¬
largest
of the
under¬
Coast
participant
Kaiser Steel
nation's
leading
distributors
Dating its history back to
1919
when its predecessor company had
but
office.
one
First
California
Company has
shown
growth until today it
steady
a
1948
23,355
6,410
1947
21.432
6,728
1946__.
19.168
6,293
29
2.17
1945__.
18,453
6,264
199
2.20
elected
1944__.
18,263
1.25
17,312
6,021
5,811
547
1943__.
659
1.46
5,311
405
2.00
5,059
43
1.38
1942..
15,561
1941
14,058
12,950
1940
£$642
$2.33
+317
2.01
+ 158
2.22
,
4,832
H.
T.
E.
Jr.
Birr,
Evans
J.
the offer of
Blair Holdings Corporation to ac¬
to
accept
quire their stock. "First Califor¬
nia
Company
will continue to
serve its clientele as an indepen¬
maintains
Its
offices
two
personnel
mately
200,
in
Nevada.
approxi¬
numbers
fully
is
and
mentalized
serves
with
depart¬
and
Northern
Southern California divisions. Pri¬
vate
wires connect all
offices, in¬
of the holding
without change in name cluding direct communication with
its
New
York
correspondent, a
personnel," E. J. Evans. Chair¬
subsidiary
dent
1.38
--
company,
^Includes
negligible
heating
operations
(also
gas
1940-1941).
in
or
^Deficit.
"i Consolidated.
ing the announcement.
One of the largest retail
regulatory conditions despite the very favorable regu¬
favorable
latory basis provided by the state law and its application by the
State Commission and the courts. The difficulty is that the cities
have the initial right to set
residential rates and where these rates
unsatisfactory, the matter of an appeal to the commission and
courts is cumbersome and slow. Thus in Columbus, Cincinnati and
are
Cleveland residential rates have
with local
been involved in varying degree
politics, and rate regulation has followed a tortuous path.
of Columbus residential rates have admittedly
side, averaging 4.07b in 1949 compared with the
national average of about 2.950. On the other hand the company
continued for years to maintain a nickel transit fare, which the
In
been
the
on
City
the high
then
administration was
electric rates.
city
willing to "trade" for the above-
average
However, a new city administration proved tougher, and
electric rates reduced while transit fares remained low.
wanted
Surcharges in its electric rate schedules which the company put
into effect in 1948-49 under the terms of the 1944 ordinance (re¬
flecting increased labor, fuel and tax costs) were rejected by the
city, and the company had to impound or bond these surcharge
revenues.
Finally in September 1949, in anticipation of the expi¬
ration of the old ordinance in November 1949, a new five-year
ordinance
.
November
passed by the city, and ratified by the
This ordinance, which was not
was
voters in the
election.
accepted
by
reductions from the old rates
(including the 6.4% surcharge now in litigation) as follows: resi¬
dential rates 33%, commercial 11%, and industrial 7%, or an aver¬
age tfo 20% for all business in the City of Columbus.
The final
agreement, made in September, 1950 and ratified by a 3-to-l vote
in the recent election, will permit the company to recover contin¬
gent earnings of approximately 430 a share for 1950 and a credit
to surplus approximating 330 a share.
The overall reduction in
future electric revenues of the company, due to the rate cut, is
the
company,
estimated
The
at
new
make this
about 5.5%.
will
ordinance also provides that the City
no
longer
These rates are
portion of the business more flexible.
protected to some extent by escalator clauses on
fuel, wages
of con¬
tingent earnings based on final settlement, are estimated at $2.30
42% tax basis, or $2.17 if the transit company's loss is included.
on a
present transit fare of 7 tickets for 50 cents
has been in effect since Nov. 23, 1949, as a
local courts.
Tim¬
(or 8 cents cash)
May 1950, the City passed a new fare ordinance
being contested by the company in a Federal court,
In
now
where
special master may be appointed to decide whether the
Continued
jrom
permanent fares.
Eventually
a
"cost of service" franchise
satisfactory in
be enacted, since this move has proven quite
Toledo and other Ohio cities.
may
virtually relieved of its transit burden,
with tax savings absorbing a good part of the electric rate
With the company now
adjustment, the decline in earnings should be less than might be
surmised from former press reports of a 22% cut in electric rates.
The $1.40 dividend rate would seem reasonably secure in 1951
profits taxes make very heavy inroads into earnings.
managerial
the
in
skill
of
use
(5) It will be less of a handicap
investment.
to new
Hobbs and
Dodge
&
Dayton
Co.,
61
Wall
New York City, members
of the New York Stock Exchange,
on
Jan. 1 will admit William A.
Street,
«
Stanley
Street,
Heller
New York
finally,
And
(6)
reason
sented
why
to
as
compelling
no
has been
pre¬
profits
Both ex¬
an excess
be adopted.
should
tax
perience and reason warn clearly
against the adoption of this mis¬
chievous
tax.
arguments
made in favor of the
its
and
few
are
have
been
,
they
will
on
Dec.
Prince to
14
can
do
A.
panies
represented
mittee
would
than hurt
least
at
But
the
by
in
be
few
rather
profits tax,
ahead.
an excess
the
de¬
com¬
Com¬
our
on
favored
years
the interest of
in
public
the
general
they still oppose
being fundamentally
welfare,
tax
as
unsound.
Even
though the excess profits
might improve their immedi¬
tax
ate current
across
the
earnings
as
board
tax
against
an
increase,
though 'their bargaining po¬
sition might be improved
against
-
-
even
lower-cost producers, nevertheless
they reject this unsound tax
meas¬
Public offering of 200,000 shares
of
Texas
Eastern
it
lowered
if only
cents of the profit dollar
be kept.
Such
reasoning, often
proceed¬
lack of managerial ex¬
tax
and
limited
be
to
use
of materials and
by
investment
tools
machine
and
serv¬
in
new
equipment
with significant de¬
profits." To serve the latter
purpose,
the
$25,000
minimum
credit was proposed. This exemp¬
tion of small business just as eas¬
The
excess
on
materials
maintain
and
profits
tax
aggressive
and
extend
puts
services
to
markets.
At
dollars
less
to
time, since
maintain
efficient
new
the
machinery
old
and
rather
$100 per share plus accrued div¬
idends.
Each
share
also
something
Treasury
that
tax-wise
earnings
itons.
of
graduated
the
seemed
should
level
successful
down
to
be
the
corpora-
through exemptions and
rates,
it
thereby
pro¬
to put into effect indirectly
progressive taxation of corpo¬
rate
income—an
issue
of
convertible
at the
option
of the holder at any time prior to
Dec.
1960,
1,
vertible
stock, taking the con¬
at $100 per share.
series
Proceeds
used
into common stock
at $20 per share
company
the
of
sale
will
in connection with the
be
com¬
program.
Thin
includes
the
Oakford
Storage Project, recently author¬
ized by FPC for the development
of underground natural gas stor¬
pany's
expansion
program
By introducing differential
treatment
poses
to
the
of
series is convertible
the
grave
importance which has not been a
subject of explicit discussion.
We have contended that the ex¬
age
Westmoreland
in
facilities
It also includes the
New England Project, the princi¬
pal part of which will involve
County, Pa.
construction of
a
30-inch pipe line
extending from a point near Kos¬
ciusko, Miss, to a company station
at Connellsville,
Pa., a distance
of about 790 miles.
Eastern
Texas
has
pending
an
cess
ed
To
just because it is so "selective."
the taxpayer, such selectivity
becomes
plain discrimination.
Tax Has Limited
invest¬
ment
is
not
aq,.expense
but a
capital charge, it Is better busi¬
ness judgment to spend the cheap
same
Inc.
common
The
yesterday (Deo.
banking
investment
headed by Dillon, Read &
The stock was priced at
group
Co.
made
an
of
Application
a
bidding"
by
of
which cut costs.
premium
6)
"taxpayers
profits tax is not equitable.
perience, completely ignores the The Treasury's proposals and its
place of costs in pricing. Business supporting tables prove that the
managers
have kept unit costs formula purposely discriminates
down in the face of rising wage
in
favor
of
some
and
against
rates and other expenses by eco¬ others—and that it is recommend¬
and
was
preferred stock, 4.50%
convertible
series
of
$100
par
fense
feel
of Costs in Pricing
is
additional
should
value
Transmission
new
corporate
selective,"
"more
be
because
not
have denied the inflation¬
ing from
Exchange,
Milton
should
the
the
because
rate,
in
increase
flat
ily could have been included in a
nature of the formula. They
insist that surely the incentive for
15 to 25
cost-
flat tax increase measure.
(1) Advocates of an excess prof¬
its tax
in
investment
prof¬
under examination.
up
Ignores Plate
the
admit
risk
to
cutting new machinery.
(2) The Treasury has urged an
excess profits tax in preference to
done
stand
for
partnership. Mr. Prince,
partnership. Mr. Dayton is assist¬ who will acqiiire the Exchange
ant manager of the bond depart¬ membership of Philip Gossler, Jr.,
was formerly with Dreyfus & Co.
ment for the firm.
Hobbs and John W. Dayton, Jr., to
than
argu¬
excess
substantive
The
tax?
ments
& Co., 30 Pine
City, members
of the New York Stock
in
tail. A substantial number of
Dillon, Read Group
Stewart Roussel.
a
ices,
Stanley Heller to
Admit M. A. Prince
over¬
excess
Tex. East. Trans. Go,
cheap dollars.
nomical
Clark, Dodge to Admit
an
Angeles Stock Exchange.
Inequity, Exemption and Privilege
raising prices
Clark.
Stock
whom
are
profits tax in general and
Corp.
fare, and another increase in wages will be necessary. The Federal
can allow an
interim increase in fares, although it cannot
court
unless excess
York
New
principals with
have been in contact
whelmingly opposed to
4
page
ary
and
the
Excess Profits Tax—Evil Brew of
city order is confiscatory. This seems obviously the case, as the
transit company is currently operating at a loss even with a 7-cent
make
of
Business
Offers Pfd. Stock
result of litigation in the
which is
a
on
Co., Puget Sound Pulp and
What
Earnings for the calendar year 1950, after adjustment
doing busi¬
in
tax
a
ure
that, over a period of years,
In 1947
would wreck our economy. They
the
organization
was
enlarged
cific Coast, First California Com¬
understand full well that the final
with
the
acquisition of Nelson,
pany, distributed securities valued
answer in our conflict with those
in excess of $60,000,000 during the Douglass & Co., a Southern Cali¬
who would destroy our free insti¬
fornia
investment
firm
with
12
past year, the greater portion of
tutions will be given in substantial
offices in that territory.
•which represented
a
capital in¬
measure
by which way of life,
First California Company will
vestment in western industrial en¬
which type of economy, makes the
terprises.
Among
the
western continue to be directed by E. J. greater, the sounder
progress in
companies whose securities were Evans, Chairman of the Board; the next decade.
recently distributed by First Cali¬ H. T. Birr, Jr., President; Richard
These are the facts.
On these
fornia Company were the Bank of W. Wild, Vice-President and Sec¬
facts the excess profits tax should
America N.T. & S.A., Pacific Gas retary-Treasurer,
and
with
the be forever
rejected as bad for
&
Electric Company, San Diego following Vice-Presidents: Dwight
America.
Gas & Electric Co., Southern Cali¬
Baum, A. M. Bleiler, John F. Egan,
fornia Edison Co., Sun Ray Oil R. E. Evans, John Mackey, Joel D.
Co.,
Portland
General
Electric Middleton, M. A. Rogers and F.
of securities
tributors
substantive
and taxes.
The
dis¬
the Pa¬
member
Exchange. First California Com¬
pany is also a member of the Los
would have effected
regulate rates for large commercial and industrial customers—only
the State Commission will have jurisdiction over these. This will
also
in mak¬
of the Board, stated
man
of Ohio have to contend with un¬
Some utilities in the State
Such
ing a proper share of profits arising from defense.
we
all
the important cities of California
all of the common stockholders of through its 21 offices and repre¬
sentatives.
The company
also
the First California Company have
*t"
to
to farmers.
a
tax which excludes individual
earnings and reaches perhaps only
one
out of sixty business enter¬
prises cannot claim to be either
equitable or efficient in recover¬
of
trust shares and bank stocks.
Per Share
Transit
Electric*
$25,483
Year
Langendorf United Bak¬
writing last month. First Califor¬
nia Company is also one of the
Amount
Operating Income Before Income Taxes
Gross
Revenues
1949
of
$40,000,000
.
Calendar
royalties,
nor
the corporate form of
ness.
Pacific
company's earnings record in the past decade has been
1
(000 omitted):
follows
and
excess profits
tax applies
only to earnings which arise under
Company
eries and California Pacific
to sink any more parent company
money into transit operations, which have been in the red for four
years. The company can dispose of its investment in transit opera¬
tions—in fact, provision for such a transaction is made in the com¬
pany mortgage, the terms of which require that the proceeds from
the sale of transit operations be deposited with the trustee.
as
rents
The
ber
stock
top management doesn't wish
The
to
personal services,
World War H
Co., Harbor Plywood Corpora¬
was paid by only one out of
sixty
velopments in the history of the tion, California Oregon Power Co.,
business concerns.
Pacific Coast financial business is and Lucky Stores, Inc.
Since economic activity is gen¬
revealed in the announcement that
More recently the First Califor¬
nia Company headed the under¬ erally stimulated by expanded de¬
fense preparations, then
obviously
writing
groups
distributing
the
One
By OWEN ELY
Columbus and Southern Ohio Electric serves electricity to
apply
Holdings Corporation Acquires
23
The public has been led to
believe that the excess profits tax
can
recover unusual profits
aris¬
(3)
ing from the defense effort. '
Few7|pepple ubdej'gtand that the
profits tax applies to only
small fraction of profitable en¬
excess
a
terprise. It does not apply to un¬
incorporated business; it does not
application for a certificate for
the New England Project.
Con¬
nection
is planned between the
New England Project line and a
proposed pipe line system, to b£
built
by Algonquin Gas Trans¬
mission Co., which will serve a
part of the New England area.
Texas
Eastern's
share
of the
Oakford
mated
Storage
at
timated
will
project
Project
is esti¬
$15,100,000 and it is es¬
the New
England
that
cost
approximately
$99,200,000.
Daily
delivery capacity of the
system will be in¬
Texas Eastern
creased"'
million
tion of
by'
cubic
approximately
47fr
feet upon comple¬
the proposed new facilities'*
The Commercial and Financial Chronicle
24
Thursday, December 7, 1950
...
(2200)
SECURITY TRADERS ASSOCIATION OF NEW YORK
TIIE
people
Bowling League standings of the Security Traders Association
of New York, as of Dec. 1 are as follows:
Won Lost
TEAM
Notes
NSTA
19
17
15
15
14
14
13
13
12
Leone
(Capt.), Krasowich, Nieman, Pollock, Gavin
(Capt.), Klein, Flanagan, Manney, Ghegan
(Capt.), Lytle, Reid, Kruge, Swenson
Mewing
Hunter
DALLAS BOND CLUB
the
At
of the Dallas Bond Club
following were elected to serve as officers
regular monthly luncheon
Friday, Dec. 1, 1950, the
for the year
(Capt.), Smith, Farrell, A. Frankle, La Pato—
Serlen (Capt.), Gersten, Gold, Krumholz, Young___
Goodman (Capt.), Casper, Valentine, M. Meyer, H. Frankel
Donadio
(Capt.), DeMaye, O'Connor, Whiting, WorkH. Meyer
1950-1951:
meister
(Capt.),
Kumm
Weseman,
Tisch,
Strauss,
Jacobs
mark.
Since
8
13
13
14
14
15
(Daniel F. Rice & Co.). is still bowling in his
Arthur Burian
flawless
17
19
Siegel_____
Greenberg (Capt.), Sullivan, Stein, Wechsler,
usual
15
10
Burian
8
10
12
12
12
(Capt.), Kaiser, Growney, Gronick, Rappa
(Capt.), Manson, King, Voccoli, G. Montanyne__
Krisam (Capt.), Bradley, Montanyne, Weissman, Gannon
Bean
keeping his average well over the 170
Krisam (Geyer & Co.) took off all that
Wilber
Lastly,. I think it should be
action
in
a
This
investor.
who
person
this
holds
buys
annuity
premium
annual
and
contract,
below.
table
You will notice in that table,
the end of the
at
has
annuitant
the
his
in
The table below provides
account.
for
that
10th year,
loss
a
of
true
an
shown in the
is
even
insurance protection what¬
no
and is a straight annual pre¬
ever,
mium annuity contract:
;
It should be common knowledge
that
the
purchaser of a home, -an
policy, an annuity, or
an automobile, or goods and serv¬
ices of all kinds, who has tp for¬
insurance
usually
years
and,
Association of Los Angeles are:
of
does
the
eariy
at ;a loss,
is certainly
so
that
course,
against
indictment
no
in
investment
the
feit
ANGELES
newly elected officers for 1951 for the Security Traders
The
rec-
is, as we state so definitely
application, unprofitable to
our
the
sparking his team
SECURITY TRADERS ASSOCIATION OF LOS
them¬
availed
have
ognized that the early termination
of any long-term .financial trans¬
manner,
weight, his bowling improved and is really
mates, they won three games last Thursday.
who
selves of these wonderful plans.
them
for
making such purchases, but is to
be
jo a-certain extent.
expected,
is so little,
I feel
Where this percentage
is
as
Hugh D. Dunlap
Winton
President—Hugh
Dallas
A.
Jackson
Dunlap,
D.
Sam Johnson
Ellis
Binford-Dunlap
&
Jackson,
First
Southwest Com¬
JDdllctS
and
ciation
Saxton
do
People
they
want to start one
periodic purchase
requires
It
specially
a
trained sales organization
Fort Worth.
officers will take office at the next regular luncheon
Robert D. Diehl
will be held Thursday, Jan. 11, 1951.
Richard
William
O'Neil
R.
R.
O'Neil,
& Curtis.
Wykoff & Co.
Edgerton
peo¬
the advantages of having a
planned investment program.J It
is not economically feasible to do
ple
A. Johnson
President—Robert D. Diehl, Paine Webber, Jackson
Vice-President—Richard
who will
out and constantly show
go
SECURITY TRADERS
On
inhabitants.
say
plans.
Dallas Union Trust Company,
ASSOCIATION OF NEW YORK
Dec. 1, at the annual meeting, the Security Traders Asso¬
of New York, Incorporated elected Leslie Barbier of G. A.
& Company, Inc. its President for the year 1951.
such
possible for
it
economically offered
be
of the so-called
coming year,
to complete the seven-man Board.of Directors: W. R. Newsom, Jr.,
Sanders & Newsom, Dallas, (Retiring President); Lewis F. Lyne,
Merrill Lynch, Pierce, Fenner & Beane, Dallas; Harry W. Phillips,
new
very
a
not walk into brokers and dealers
chosen as directors for the
meeting of the Club, which
make
and
to
their
to
Company, Dallas.
Southwestern Securities Company,
•
The following were
rendering
state should welcome
plans,
Dallas.
Johnson,
letter,
outstanding service, and I feel that
Company,
them
Treasurer—Sam
this
in
are
we
every
A.
Secretary—Joe W. Ellis, Rauscher, Pierce &
The
shown
that
•
Vice-President—Winton
pany.
W.
Joe
this except on a
basis which per¬
Secretary—William A. Johnson, Sutro & Co.
Treasurer—Tim D. Spillane, J. A. Hogle & Co.
mits the salesman to make a rea¬
Board of Governors—Harold C.
and
Alexander, Walston,
sonable
Frankel, Fairman & Co.; Jack
Dean Witter & Co.
1945 has remained active in Traders affairs.
held at
was
ducted
the
page
How
time.
believe there would be if
received their commissions
equally spread over the life of a
policy? I am sure you will rea¬
lize
that
practically no person
The election meeting
the University Club with Jack Alexander presiding.
from
of
you
would continue
salesman
—
Continued
length
they
Miller, Chairman of the Nominating Committee con¬
election.
j
—r—-—
—-——
A.
William
——
the transaction,
on
this profit within a
life insurance salesmen' do
many
Diehl, served as President of the Cleveland Security
Association in 1941 and since moving to Los Angeles in
Mr.
Traders
profit
secure
reasonable
Goodwin; Nicholas P. Kirwan,
Hoffman &
to
as
a
life insurance
that basis.
on
They
are,
however, compensated adequately
15
for
having made
ceived
the
sale, and 're¬
part of their
a
greatest
commission out of the first years
Defends Periodic
Payment
riodic
Plans of Mutual Funds
the
in
people
lower
than a plan that does not carry
this penalty. The reason for this
is that if there is no penalty to
terminate a plan, the average in¬
dividual will do so when security
income
.
and the 51%
in the
$3,000 to $7,500 brackets, should
have the same opportunity to inbrackets,
vest their future
are
in
The
much
the
of $7,500
as
the 17%
higher
who
bracket
plans which my organiza-
First
son
&
Curtis.
Vice-President—John J.
Meyers, Jr., Gordon Graves
Company.
Directors—John
F. McLaughlin, McLaughlin Reuss & Com¬
John S. French, A. C. Allyn & Company, Inc.; Joseph C.
Eagan, Frank C. Masterson & Company; Nathan A. Krumholz,
Siegel & Company.
John M. Mayer, Merrill Lynch, Pierce, Fenner & Beane, re¬
tiring President will be a carry-over Director together with:
pany;
Richard H.
Goodman, Shields & Company; D. Raymond Kenney,
D. Raymond Kenney &
Company; John D. Ohlandt, Jr., J. Arthur
Warner & Company, Inc.; T. Frank MacKeesy, Abbott, Proctor &
Paine; James F. Fitzgerald, W. L. Canady & Company, Inc.
Trustees of the Gratuity Fund—George V.
Leone,
Pollock; Lawrence Wren, Allen & Company.
National Committeemen—Samuel F.
Leone
&
Colwell, W. E. Hutton &
Company; Irving P. Grace, W. C. Pitfield & Company, Inc.; Stan¬
ley L. Roggenburg, Roggenburg & Company.
National Committeemen Alternates—John J.
O'Kane, Jr., John
J. O'Kane, Jr. & Company; Charles M.
Zingraf, Laurence M.
Marks & Company; Henry Oetjen, McGinnis & Company; Harold
B. Smith, Pershing & Company; Edward J. Kelly, Carl M. Loeb,
Rhoades & Company.
Michael J. Heaney, Michael J.
Heane.y & Company; L. A. Gibbs, Laird, Bissel & Meeds; Milton
Van
Riper, John C. Legg & Company; Arnold J. Wechsler,
Nominating
Committee
—
Ogden, Wechsler & Company.
The
is
discount
same
given
to
purchases of large plans as is cus¬
tomarily given to purchases Of a
large block of shares in mostlinvestment companies. For example,
starting a $250 monthly
is beginning a $30,000,. 10year
program.
He is acquiring
this $30,000 worth of shares at
the rate of $250 a month.
If lie
a
person
plan,
bought
outright
shares
the
and
custodian
der the Federal Investment Com-
1940. I believe that
they offer not only the small and
the sum of money available to
them when the plan is complete,
total
ten-year period, thus saving him
I could quote you many cases of
money
$10
as
$40
a
These
pany
a
.
month.
plans
are
qualified
income
bracket
an
and
.are,
un-
Act of
medium
Treasurer—George V. Hunt, Starkweather & Company.
Secretary—Alfred F. Tisch, Fitzgerald & Company.
purchase plans.
"
pie having kept their plans who
otherwise would never have had
to
Vice-President—Harry L. Arnold, Paine Webber, Jack¬
Second
&
Tisch
selling 'pe¬
paid the sales load it would 'cost
month up to and ineluding as much as $750. The size
of the average plan sold for the
firgt ten months of this amounted
F.
bring
what
exactly
in
records prove, that the
planholders keep it up during
depressed markets which, of
course, works to their advantage,
We have many instances of peo-
tie
Alfred
conditions
about low prices. On the other
hand, if there is a penalty for
dropping the plan, the chances
tion sells call for payments as lit-
George V. Hunt
economic
and
and over?
do
salesmen
our
is
That
premium.
op-
of only
$10, $20 and $30 a month have inmany people in the higher income
dicated that without such a plan,
brackets who can afford plans of which forced them through pen$100, $200, $300 and more per alty to continue it during doubtmonth, are rendered a very out- ;ful
periods, they would never
standing opportunity to put this have had the funds available to
money
to work regularly, thus them at a time when they were
getting the advantages of dollar- very badly needed,
cost average.
All of these planBelieve me, Mr. Johnston, I am
holders, both large and small, are not exaggerating when I say that
better served by a plan that has it brings me pleasure to see the
the penalty of early withdrawal good these have done for many
portunity to help themselves, but
as
our
records definitely show,
Annual Premium
where
Elective Annuity
small planholders
(no insurance coverage)
Payments
Cash Value if Terminated
Loss if Terminated
1
$120.00
$79.20
$40.80
2
240.40
189.96
50.04
3
360.00
303.60
4
480.00
420.00
56.40
60.00
538.80
61.20
Year
5
1,200.00
15
1,800.00
20
2,400.00
'
600.00
10
*
—
Profit.
"
1.182.00
1,932.00
2,780.40
18.00
(132.00)*
(380.40)*
him
8%,
whereas,
in
buying
through our plan we give him
the
reduced
sales
charge oh a
The sales load,
fee, Federal issuance
fact all of his charges,
$30,000 purchase.
in
tax,
but
7.63%
and
vantages
of
giving him the ad¬
a
plan which will
automatically
dends
8%
I
ter
for
on
am
as
a
his divi¬
saving him
reinvest
thus
him,
such dividends reinvested.
sending
"The
to
nancial
entire
the
for
a
copy
of this let¬
Commercial
and
Fi¬
Chronicle," and trust, that
service
to
millions
the
of
people in this country who shpuld
have plans such as I
that
give
they aid
I
ful
specialize in,
they will feel disposed to
it the same publicity that
your
would
address.
appreciate
consideration
of
-
your
the
>
care¬
points
covered, and in the interests of all
would be very pleased to hear
from you if any part of this letter
is not entirely clear.
Very truly years,
EDWARD E. MATHEWS.
Nov. 29. 1950
53 State Street
Boston
9, Mass.
,
Number 4966
Volume 172
Continued
front
.;
.
The Commercial and Financial Chronicle
9
page
,
Few things can wreck
steel become
company quicker than a
the answers to all these
When
problems
hind
smack into the
difficulty.
Building
us,
we
financing
run
important
any
plant
the
be¬
satisfactorily
are
of
real
money
into
runs
is
cost
unit
going
like
up
steel
and
jet-
a
a
thereabouts, we could
complete coke over plant
or
build
a
with
by-product and
benzol plants, which would car¬
bonize 2,000 tons of coal a day,
for $2.4 million.
plant would
In 1939, the same
have
$4.4 mil¬
cost
Today the cost is $10.5 mil¬
lion.
finishing mill used to
about $2 million.
To
day, we dig a lot deeper because
the bill is $5 million.
Even a 15back
heavy-duty crane with a 100span
has gone
from
$23
to $54 thousand.
And
foot
thousand
and
so on
But
and
on
since
ton,
the
1939
composite
69%.
already said, a new
Steel plant built from the ground
up would represent an investment
today of $300 per ingot ton capac¬
ity.
In this is included the cost
As
or
have
I
the
of
ore
together
with
deposits
coal
and
necessary
auxiliary
facilities.
over
$100
plant costs about
a
annual ton of capacity.
per
explain what I mean by
me
five-year
a
a
What
year.
would
1949.
build
To
s;ee!
e
steel
new
a
nftons rafwSdUCcoS
tSC3 year would cost
l
lion
SI 8
$1.8
a
eminent
set the strike losses in the last five
£
None
the
...
outside
circles—realized
official
that
June
.
.
least
us—at
of
Korean
a
building
furnace.
a new 1,400-ton
But
the
new
door
next
goes
to
one
which is already in operation.
So
utilize the existing ore docks,
ew
facilities
and
other
built
some
railroad
plant,
power
which
were
early in
war
If
unforeseen
demand
war
on
doSn'trdsound like good
likeeg o^d
sound
that
a
would
tried
rearmament
of
major
to finance expan-
money
would
It
be
for
cold-rolled
but the
an
exist¬
kind
This
of
expansion,
this
be done for
ton, in many
cases.
We have been looking at
another possible program which
would cost $200 and have for the
rounding out, can
approximately $100
time
being
that
at least shelved
it
because
a
is
too
rich
for
our
blood.
But the
plants of Republic
investment of $50
annual ton of capacity.
resent
rep¬
per
an
The Question of Steel Prices
Our
per
price structure is on a $50
basis—not on a $100 or
$200
$300
or
cost of
So
ton basis,
entire new plant.
an
are
we
serious
the
per
question—serious
to
a
you
and serious to us.
How
can
to
much
we
high cost expansion
still hope
undertake and
keep steel prices at
able
level
construction
material
For
prices
costs
gone up hand
But
tion,
the
in
not
a
gone
and
reason¬
only
have
but
up,
wages
have
We
with
us
scare
threats
desire
understand
seeks
has
interest
or
to
That
problems.
our
in-
and
there
often
Too
little
been
been
Bill.
investigated and
The government
equipment and other costs,
has invested about
industry
$2 billion in its expansion pro¬
gram during the last four years,
and
will
more
than
double
that
expenditure in the near future.
By contract, in 1939 the invest¬
ment
in
the
entire
industry
No, the steel industry has not
stood stilly nor does it intend to
still.
As
new
needs
for
to
and
been
good
are
we
non-
against
or
has
has
more
been
teen
eive
give
to
to
and more benefits
more
and tax and spend
and
des-
need
Is that
in
atmosphere in which
be carclimate in
can
that
a
which venture capital will be encouraged into the markets?
our
to expand,
are
we
the
be
must
then prof-
major source of
funds.
when
But
make
we
enough
propa-
ganda.
Never mind what it costs,
either.
Just trust
for
vide
more
sense,
business
and grow and so
making
survive
to
you'll get yours."
Opposing the radicals
of
group
of
men
lieved
in
continue to pro-
opposed the
citizen.
the
hard
seemed
in
making
the
dollar
hundred cents.
how
come
be-
economics
was no
and
such
^
They
pf govern-
expansion
his
as
we
are
reach
to
For instance, we
pay good wages, but
believe wage increases can
from profits while others
over
everything, of
their political
emphasized the
oppose
They
boeev
gentlemen
only notice given to
the
the
increase is
ment
in the
brief
a
announce-
papers.
empty
crises
of
promises,
to
cover
the
common-sense
its
fail-
and'the"^Amerlca^Ld^ratiort
get
some
our
that
a
of
the
Congress
to
fair
profit
Railroad
•
o
othtr un<ionS' orslmSations S
we're
dates.
thev
flecrtheT'can^
collected "voluntary.
unable to
They
a«cpcampnti?"
iions
tntalpri
whirh
mil-
the
members
on
"right
were
and
ca-
Union
way."
ordered to lay ofjf
election day and not only vote
of
This, incident
am told cost the members^
building trades unions in
the
$500,000 in lost wages.
Candidate*
were
threatened with
ciaus false face from
the
Snence
*
$$$& Branntn%Z and
ized
medicine.
in
many
what
n0Se
a
A
socialgreat majority
states recognized these
they are—creeping soplan to get the camel's
under the tent.
Now
we
people
know
don't
handouts
sure
that
want govern-
linked
with
in-
They want the freeopportunity to live their
They are sick of government
interference,
heckling
and pestiforous regulations.
Instead, they want freedom to mind
dom and
lives.
own
business
within
a
reasonable framework of governmental supervision and help.
The election
on
showed the people
The so-called labor vote has lost
its threat just as the prohibition
difference in this country, and I vote did a few years ago.
have had little fear as to how our
We know that Americans vote
people would decide it if the is- as Americans—not as employees,
sues
are
sharp-cut.
Happily, in not as employers, farmers, city
abroad
and
cprved
+?011
Notice
+hat
attitude
soft
a
down
toward
Communism
and
wrath
the
Communism
voters
was
the Federal Administra-
Communists
brought
for
competence.
their
home
the
of
the
in
gov-
ernment was an issue—a real
You
easilv
can
wuh
down
w
to
resounding
who.
defeat
in
communism
...
.
a
tarred
were
sympathies
Communist
went
half
count
dozen candidates who
live
the'idea
People didn't like
and said so with ballots,
issue
_-n^®1^®nntr
anIpla.Cf°r f?rm' a"d W6 Sal? ^
The third is really important,
We found that where good mei*.
were candidates and had the coura^e
meet issues squarely, "jo#
were generally electedstiig
P3*!* .fa a ^m®b°dy with a no£ody' 111 my J?QOk good candidate*,
ftad u]e courage m in t issue.*,.
55?
Thpv
'
tup?r
thp
liked
Thpv
wh
ron<?P
„
voter-4
with*
men
afraid
weren't
ami
mjnd«
thp
takp
FviHentlv
A
"me?
HiHn'f
kp
L p+
mipnppq
their own lives.
leaders!
threatened
to
vote
to
Union
dollars
of
candidates, a united labor vote Labor opposiwon by a surprisingly
large ma- tion sunoosedlv was the eauivajority.
The voters were tired of lent to defeat
hokum.
They tore the Santa
Thp
le„011 +hp plertim>
of
tho
cars
'
is only one fundamental
^
to
aa
w
9?
Uabor joined with
candidates,
the recent election, the funda- folks, not as shop keepers or
mental good, sound, common sense bureaucrats, not as class-conscious
and realism of all the people—not groups. There is a real job in
able to hold on to much more than any one class—again rose to the front of- all
those who believe
seven cents out of each dollar you
top. The question is simply this: that the idea of sound economics
customers paid us.
And out of "Is the United States going down must prevail.
that seven cents we paid divi- the
drain toward a Socialistic
The issue must continue to be
dends and footed the bill for a Superstate, such as helped reduce drawn—the issue of sound against
substantial
part of these costly the standards of living in Great faise economics.
expansions I've talked about.
Bratain and Russia, or is she
^
gjn-ne time we must proof
Vu
,
economics
sound
still, in spite of everything
do in the way of price
structure, last year we were un-
try
,
Cleveland
The
may
understand
vote
under
of votes
7,7
Cio
buried
tally, I
creation
And
But
indi-
labor
the
was
avalanche
freedom to
and
et
but bring in voters.
its
are
unwilling to give up their
they can only come from independence and let themselves
increased productivity.
On the be pushed around by anyone,
one hand, we have people who They are not willing to follow the
believe in the economic and social orders of self-constituted political
fallacy
that the government, leaders or unioi\ bosses.
Union
through our taxes — and by "our" members will follow their leaders
There
was
He listens ta
judgment
of
affairs,
know
run
good
own
The
with Klieg lights
and newspaper headlines.
Other
industries can increase prices by
complete
I see it.
learned
cates
i mean "everybody's"—can be all —not always wisely—on questions J
„
things to all men; and on the 0f wages and hours, but when it
*,
other hand, we have people, and a comes to politics they think for
lot of them, too, who still believe themselves and vote for them- SL .
in opportunity, work and the selves.
: lpa
tion,
he pleases.
as
to finance expansion and
improvements, we are labeled as
profiteers.
If we increase the
price 5% we are summoned to a
quick
Congressional
investiga-
money
conclusions
as
we
government's meddling in foreign
own
all want to
some
actly
a
They told the truth,
truth, even when it
to
interest.
ment
You know, as a matter of fact,
almost everybody agrees on our
objectives.
The
disagreement
comes
who
% ** ta squarely.
the issues the ^
faced
most
in
sense,
sound
was
candidates,
courageous
common
told the people there
and better jobs at top
wages.
one
The first lesson
us
and
cialism,
common
on
and vote
us
We'll redistribute the wealth
phasis
easier
three
are
ai" and Russia, That's all
where they tried his leader and then casts his ballot
our
scheme.
for
worth
as
has happened in Great Brit-
consciousness and getting something for nothing, and more em-
these objectives.
Is
out?
to be romantic?
we
government build
expansion
ecovery
told
with the ever-present
an
false
doesn't sound
We need less emphasis on class
it
There
preached
We need less spending for
the sake of spending and greater
nationalization
of
maximum
If
maA
from the last election.
any -attention to what they tell that the union member votes
you
of
some
should ha4Te?rne|
ioled their members to force then*
romantic, but who would expect a
steel
briefly
sum up
the
and
sound
This
me
t<|
meddling in the economic life of
the
Great Britain.
its
between
witft
alonp
work and get others
the lessons we
Don't pay
Ures.
need
that
do
dollars, which can be drawn,
tax
of
Utopia.
a
Let
can't
contribution*?
and spend.
nistic Russia.
we
You
ment control
To me this economic cleavage,
born of the desperate days of the
What
time.
campaign
bureaucrats at the
millions
of
We muak
started—the program of teaching
sound economics—and that take*
you will
vote as we tell
you," the radicals said, with the
"you'll have
they vote.
spread the program business ha;i
crop
marked
old
same
ter and that
bill,
people—to tax
for
expand; the next it is recom-
steel plants
control,
footing the
rent control,
preach the gospel of sound economics on the precinct and ward
levels. They must be encouraged
to see that their neighbors regis-*
ting the Federal Government run You must
the whole show and provide more work.
classes, in.
pitted
the
and
more
interest
moment
One
..
inmr
Pan^R.v
^
frmr.
wav
j
todav
j^aven»t
beam
If
T
hav
'ffmip
«
the subiect of steel
and
in the
j'am
^
econo'mics
.
for
battle
steel
won
future
right
on
th<i
sound
and alt
0^ber business will be encouraged
—
greater
to
gamble
take
in
an
the
even^
futurey
favorably*
climate in which to grow and pro-*
vide more and better jobs and
surer earnings. Fear of the future
Busjness
will
have
a
will evaporate. Confidence wil$[
return. Barriers will be removed
and we will maich ahead to nevif
Soing to be the land where all m0^e and fight for ideas that are
citizens still have the opportunity £or
iasting welfare of the na- horizons,
*°.
themselves what they ^0n an^ all
people. We must
^
wish with brains ana nanas.
It is just as simple as that.
Warren P. Smith & Co.
ideas that improve stand0f living, increase freedom
public I know from personal exWhat did we see in the last and broaden
opportunity.
We
perience it can't be done.
Gen- election?
We saw one group, a must be positive as well as negatlemen, it can't be done.
They radical group, base its campaign tive. We must have a program as
Qn Jan. 1. Warren P. Smith,
don't
understand
English—the on false economics, on increased well as an opposition.
member of the New York Stock
way I speak it.
,
government handout and priviYoung men and women, and Exchange, will form Warren
doesn't
your
mean
that you're gouging
customers
and
robbing the'
sponsor
ards
To Be Formed in N, Y.
was
only $4*4 billion.
stand
it's
country.
members
spite of high construc¬
has
^The'oolicv
The policy
Spence
a
been
timidation.
and
have
we
with
bedeviled.
to
encouragement
of
threatened
have
in hand.
antagonistic
to
nomics.
Instead
we
always faced with
people
part of the government instead of
harassment.
5%
ton
our
the
have
perately in this country is an
understanding of the differences
ried
ing plant.
,
change to have a little encouragement and understanding on the
theat
increased,
,
decades
leaders
lowincome tax payer against the high
income
tax
payer,
the
farm
against the city, the young against
welcome
a
mill.
be
.
depression, this attempted alignnot ment of class against class, is crazy
only on the part of steel, but other and un-American. To try to proindustries.
Something more is mote it for political ends smacks
needed beyond the mill to expand of Socialistic Britain or Commuand the
—
same old deck.
All
these schemes were based on let-
aid
its
expansion
encourage
mended that the
capacity
the
There is another element which
would
must
will
un-
for
on
two
reduce
management,
proportions by the end of the year,
Here, again, we will use facilities
already in operation.
No new
booming mill.
No new hot strip
Increase will be around
and
to fulfill
is
political
to
Labor
the midst of
program
country
groups - of
early last June
be in
carried
s*ructur?the past
more
we
farmers
cards in the
our
For
be good politics, but I won-
sheet
the
f
sens
sense ■
whether
Our
encouragement
dominant
to me.
We didn't know
produce
prices for the farmers, with the
tax payers—the consumers and
control—the
,
top_ of the old, the "have nots" against
der
a
A
potentialities, we at
broad look must take a new
basic po-
dustry have expanded to meet an
may
have
J
and
m
was
15-furnace
open hearth plant which we are
expanding to a 19-furnace plant.
years ago.
We already
.
.
PurPOse of vote-catching.
Should the steel in-
offing.
understanding,
furnace
.
bedevilment
tbl tn+jfi net investment of the
total it inypdipnt J° the
1939, just to off-
higher
.
the
steel industry in
and
consumers
PerJ?d derstanding. We don't ask for jobs for more
°r p[?ff?nce' „We hope same time.
only for relief from demagogic
"if
dard; that
a
hav^ n?ad®, ln
shortage!
announced last week.
blast
A1
wnat the steel industry needs—
all
industry needs—is gov-
continuous
are
.
SS Tnn? ^ hSSTSnto
supply by .about 6 m llio
steel
"rounding out" by discussing for
a moment the expansion Republic
We
Encouragement
by government doc-
Lower produce prices to the
Needed
„rl
,
of strikes between 1945 and
sion.
To round out
Let
.
doesnt
on.
finished steel base price has only
risen from $45.34 per ton to $76.?4
per
_
tors.
the
steel lost because, what
of
years-
us
ton
_
Spread
steel enterprises.
new
handed out
Price
that there would be 29
war
.
A 72-inch
set
in
Government
million tons
necessary
lion.
difficulty in interesting investors
apparent, those needs
didn't know at the end
we
of the
tons
propelled plane.
In 1915
But
company
If the steel in-
dustry really were a gold mine of
profits, there would have been no
will be met.
now.
steel
a
privately-financed steel
has been started.
Why Assail The Steel Indnsby?
from
*2$
(2201)
It may be
significant that in the
face of the great demand for steel
and in the face of what the government and the unions describe
as
vast i
profits, not a single
new
leges and on promises of a there are thousands of them in the Smith & Co., 14 Wall Street, Newf
Utopia under government super- little and big business organiza- York City, in partnership witk
vision.
"
tions of the country, on the farms Thomas W. Bowers, Jr. Mr. SmitI*
Free medical care—even though and in the unions, must be en- has been active as an individual?
you were able to pay for it— couraged to get into politics and dealer in New York.
26
(2202)
The Commercial and Financial Chronicle
Continued
from
Swift telephone communication
18
page
with
Canada's
like
Opportunity Through
Full Development
cal reasons for
the
Mother
Canada
with
trying to trade with
would
the
in
country,
do
the end
business
more
millions
of
customers
a
few miles away across the border
than
with
Great
Britain
4,000
miles
the
across
Professor
How
sea.
Smith
is
was
right
clearly
shown
by the statistics: in 1890,
Canada's exports
to the United
Kingdom
totaled
the
United
the
first
United
1950
of
mate
business
lead
agencies united among themselves
and separate from the continent
of which
My observation is
dividual
front.
eco¬
of
case
Scotia
was
native
my
uppermost in Professor
Smith's mind.
Up to the time of
Confederation in 1867, Nova Scotia
was
a
separate
entity, sharing
only
adherence to
the
Empire
with
the
rest
of
Canada, and
lively trade
prospering from a
with the United States. Confeder¬
ation and the ensuing
#
high tariffs
impoverished
Nova
there
Scotia.
progress,
are
Federal
and
ments
and
owned
the
The
the citizens
forced
now
to
high prices for all manufac¬
pay
tured
goods.
A
consequence
though
the
was
reluctant,
flower
the
further
of
Nova
United
to make
wholesale,
exodus
of
the
youth to
find a way
to
decent
a
serious
Scotia's
States
extent
living.
She
years.
and
can
ket
in
recent
has
developed a pulp
industry whose prod¬
paper
ucts
alleviated
enter the American
mar¬
duty free. Her tourist trade
brings in worth while rev¬
also
But
enue.
her agricultural
prob¬
lem is acute, and 5,000 of her
thriving farms
doned.
We
have
are
been
once
aban¬
trying to develop
a
pure'eread livestock industry
there,
by urging concentration on
regis¬
tered
breeding stock that
can
duty free into the American
ket.
I
sent
go
mar¬
first such ship¬
ment of Shorthorn cattle from
last
I
Scotia
spring,
the
on
of
the
make
to
United
States.
friends,
could
would
States
what
be
ever
politi¬
Canada
As
I
and
tell
my
the
only way
accomplished
be
the credit needed
of
most
of
Independence and by
designation of a Canadian
city, probably Toronto,
of
the
lieve
of
new
that
nation.
the
the United
are
as
But I
economic
States
I have found
extensions
that, where
of
and I do want to
fullest possible inter¬
change of goods between the two
countries.
the
Canada's exports to the
United
have caught
up with and
States
even
overtaken her
the
United
months.
imports from
States in recent
The American
market is
so
that Canada is in
excellent
a
position to launch
large scale expansion of
segment
chooses
of
to
optimistic
There
who
policy
as
reach
and
in¬
persuaded
com¬
local
highways, profitable business de¬
veloped for everybody concerned
and
splendid
sprang
Ohio
has
communities
new
The
up.
Chesapeake
hesitated
not
to
and
spend
her
economy if
follow the bold
of
dollars
mine
new
to
enable
a
those in
not finer
are
world
Toronto.
than
Go
inflationary.
such
The
a
an¬
the
maximum
universities
de¬
make its
can
contribution
to
{he
increasing and
Mother country by
fellow Electors
must
own
maintaining
its
own ~ economic
strength.
Canada especially has
everything to gain by strict ad¬
majority vote in favor of
Carnegie.
strengths
the
of
Canadian
There is
and branch bank heads.
of
fine
These
character
and
that
when
could
all
afford
to
dence
per¬
the
for
last and
panies, to
a
own farms and to take
active, part in developing
more
Canada's
If
credit
provided
are
power
in
British
Empire's
and
development of gentlemen and
amount, there can be tre¬ scholars, her genius did not in¬
increased activity in clude the economic
upbuilding of
production not only of raw the vast
"undeveloped estate" of
articles,
both
for
and
domestic
export.
trend
there is
reason why
community of
should not have
try of its
a
and
business
leaders
their
leaders
ganizations
of
which
to
baiter
is
his
a
the
the
mem¬
world.
has been
selling more merchandise than at any time in many years.
People think they may not be able to get any more of his product.
Metal shortages and the like haVe made it
only necessary for him
to go in to see a customer and
open up his book.
His sales talk-
employees
the
labor
or¬
their
em¬
proudly
belong.
Any
executive who bases his claim to
on
course
of expansion
bring the economic status of
every Canadian to the highest in
courageous
to
days ago I-met a salesman for one of the nation's
largest novelty jewelry houses-and he was telling the ustial story
which we hear on all sides
today.
He said he was getting ready
to pack up and take it easy for a few
years.
He expected this to
be his last, or his next to the last trip through his
territory.
He-
would
ployees
office
economy,
bold and
the
on
By JOHN DUTTON"
not to rely
on
agencies to handle
matters, but to get to know
the
contracting
powers
as
is, "You better buy what you can now, while you can get it."
Those of you who remember back a few years will recall that
it wasn't so long ago that
you could offer customers some very
labor
a
few
A
advised
understand
and
a
embark
Securities Salesman's Corner
governmental
labor
of
to
size
thriving indus¬
An
essential
element
in
Ca¬
nadian economic progress will be
the closest harmony and
coopera¬
tion
between capital and labor.
well
economic
any
Capital's Partnership With Labor
be
to
the
Ca¬
every
own.
Canadian
devoted
are
by
decentralization,
no
nadian
who
us
icies
something for
Empire to cherish. But each
modern
of
low
years
and
England's charm and
remain
all
the
With
toward
Empire.
cultivation
consumption
her
Govern¬
Now,
later, it is time for her
big ins itutions to abandon the
penurious and unprogressive pol¬
20
mendously
the
laid
was
quate
the
by
Provincial
depression of the 'Thirties.
ade¬
materials and semi-finished
goods,
but also of manufactured
ex¬
highway construction.
Can¬
like the rest of the world
ada,
greatest
intellect of his day, earned un¬
popularity by asserting that while
England led the world
in
the
resources.
transportation, electric
and
the
as
and
by the
banks, rail¬
and
ments, especially in their approach
to
electric
power
development
Viscount Milner, whom our old
com¬
back
utilities
and
Federal
friend Lord Tweedsmuir described
directors of local
and
Unprogressive
Canada is held
roads
best years
Bold
the Penu¬
or
cessive caution of her
of his life.
to serve
The
Policy
choose
the
world, he selected
Nova Scotia as his place of resi¬
are
rious and
spent his boyhood in
and, after his retirement,
he
from
Choice:
Courageous Course
Bell
Ontario
sonality who ought to have more
to do.
They have plenty of time
as
Canada's
attaches to other practical men of
affairs.
Some of you will recall
immense talent going to
railroad station agents
in
heavy liability to his
company.
that
to join
ways
high¬
the
out¬
side world.
Just across the border
Minnesota are modern roads
in
connecting
towns,
villages
larger than the
and
hamlets no
iso¬
lated outposts of
neighboring On¬
tario.
It is obvious that the next
will
years
ada.
in
motor
The
tably
be
a
needed
in
will
could
The
of the good things
than any other sys¬
the life of the mind
more
And
of
demand for electric power
exceeds
the
present
supply, but the undeveloped
are
potential
a
wa-
source
you
churchmen
electricity for Canada's
full
a
future
requirements,
substantial
hydro
is
government-owned, there is an
especial obligation on the part of
the public servants to
prevent this
consoicuous waste of one of the
people's greatest
To
of
the
United
Canada, to
States
reserve
the
pay
forcing
horsepower
dustry is
nomic
a
almost twice
a
as
an
new
as
up
power
progress.
industry
much
established
serious check
of
years
The
on
low
I have been
of
success, to persuade
electors
to
honor
by
policy
As
a
and
salesman
is
would
any other line except
gladly work the hardest and put
when
overload
and make
your, customers1—but
the
most
money
you
when
would
do
the
business is the proper course trrfollow in the securities business.
you have to be tactful because the average investor thinks
that he knows quite a bit about the best
financial affairs.
an
These
fel¬
industry. When he retired, Car¬
negie gave away his immense furtune to promote the
spread of
.
r
to handle his
own
;
the
speaks for itself—certainly any man who tells his customers to
take it easy is only
building up a substantial backlog of good¬
will that will repay him many times over in the future.
bringing
in¬
;
are
are
have
Andrew.
together the iron ore of the Great
Lakes and the coal of Pennsyl¬
.
the people, however, who are your best customers*
the venturesome ones, the chance-takers, and those who*
self-confidence to make important decisions.
Many of
them are reasonable, many will listen to
your advice when you
stress the importance of building up reserves and not
following the
line of least resistance. The fact that
you do suggest such a course
They
I
vania and Ohio to create the
steel
customers
And
Fame,
my
your
-
Carnegie, the Scottish genius who
possible
sound
But securities buyers cannot be handled this
way. "Even if
today people are much- more eager to buy investments than at
other times, they must be curbed in their enthusiasms.
Just the
bpposite of what would be good "sales policy in almost any other
made modern American industrial
civilization
£
...
between
"ready to buy."
per
eco¬
conflict
people were in a buying mood.
overselling—it would not be necessary for you
mean
out and
go
were
as
recognition to
Hall
out
bonds,
and rationing.
But even if their
have the most sincere convictions,
that they have had a difficult task con¬
way
some
go
and
salesman in almost
a
you
effort
well
as
America's Westminster
Abbey.
have tried
out
opening
industries, the public
calities of
were
business
pursuits.
For
the
most
the
Elector
me
fashion,
repeatedly, but with¬
resources.
encourage
new
you
to
the
stocks
confronted with the necessity of doing business, making
up your own financial welfare.
Putting it
This doesn't
promoting material prog¬
much
of
and building
straight, if
of
statesman, the military man
surplus to sell and
the literary
man, as opposed
for cash to the United States.
Once to
the industrialist, the
the water has gone
farmer,
unharnessed the
engineer, and the banker who
down Canada's
mighty rivers, the take the
leadership in practical
power is forever lost. Where
with
are
money
lead
too
thinking-
they
constant
a
the time
is
shortages
no
be
.
is
most
It
than
more
can
effective salesmanship in the investment business.
forth
in
income
vincing their customers that they should refrain from going "all
securities,
ress.
be
and
sound,
have told
earth, and they must encourage
recognition for those who take the
in
of
allocations
is
men
There
the worthiness
loss
out" at this time in the stock market.
Leaders
enunciate
will
attitude
democracy.
and
There
despite priorities,
Men of Practical Affairs True
must
business.
these
system of economics with the po¬
litical system of
educators
temporary
primarily about their clients' welfare—they don't expect to
and the spirit will flourish if there
is
material
progress
in nations
which
combine
the
capitalistic
The
the
striving for the good things of this
Canada
own
tem.
built
economic
cially where
accounted for later on, when and if opportunities arise.
Unlike the jewelry salesman, these securities men are
of this world
Can¬
advantage.
in
provide
inevi¬
be
tremendous
to
produce
tremendous
traffic
that
roads
with
now,
see
where clients already have ample commitments in common
stocks,
and it is certainly prudent to maintain substantial
reserves, espe¬
their central aim.
for the material
well-being of the people. Func¬
tioning properly, capitalism can
no
with
spirit;
miles
will find
have
them
the
circle
that
you
and
is
thousand
a
west, however, and
communities
highways in
those
commissions ought to make
ample
power
available at low
prices.
she JThe piesent practice in
some lo¬
high places
of rry
Commonwealth
velopment, and each
to cast a
mind
There
the
to
sincerely decry
of
American
the
look to itself for its
to
on
and
I
Presidents
the
get
great
our
new areas.
peace.
of
excellent values in securities and
they did not appear to be very:
enthusiastic.
But today,
almost like the situation referred to
Turning to the intellectual and
ship tonnage
above, sales resistance among securities buyers is certainly muchto
its
market.
The Chesapeake spiritual aspects of the program I
less than it was in 1946 and 1947.
This brings up a very
am
and Ohio has just
important;
outlining, I thinkAhe educa-.; >
lately placed
consideration which is almost unique in its
relationship to the
orders for $130,000,000 worth of tors
and
churchmen,, of *-Canada * securities
business.
I happen to know several very conscientious <
have an important
new freight cars and
locomotives.
j>iay,A
Socialism and communism are not' ^Securities salesmen who have been having a difficult time keeping
their customers on the sidelines, rather than
More Highways and Hydro
trying to convinceprimarily
concerned
with
en¬
them that they should invest more at this time.
Essential
These are cases
couraging the life of the
millions
every
course.
are
will
an
to
hitherto
and
lines and the Federal, State
authorities to construct
power
eager for more and more
Canadian
products,
in
buiit
we
telephone and power
panies
to
build
telephone
do
be¬
line
our
on
border,
the
of enough
interwoven,
urge
new
terpowers
Canada
unprece¬
the American side of the
capital
destinies
and
its
to
to
economy
Chesapeake and Ohio Railway
by repeal of the Decla¬
ration
the
pro¬
In my long association with the
increase
of
to
it
opportunity.
ten
American
that
the
demonstrate
consolidation
the
to
pri¬
owe
scale
Canadian
the
dented
not one who favors
am
cal
farm
Govern¬
Canada
vast
extend
must
enable
done.
be
can
my
my
Nova
be
required
and the strong nationwide banks
ways
single
Nova Scotia's plight has been to
some
institutions,
railroad
and
or
tariffs,
was
the economic
appropriate
Nova
need
want her
Scotia
move
companies
areas,
not
ready to
Provincial
accessible
did
opti¬
major
holding back.
The
products of farm, forest,
mine and sea; the American mar¬
ket was closed to
them, and be¬
cause
of
the
new
high
Canada
in¬
an
can
mines
of
in
big
coal
rest
of
nationwide
men
facilities, telephone
service, electric power and high¬
Nova
opening
not
international
of
universal
On this St. Andrew's Day, I am herence to the
precepts of Vis¬
happy to report, however, that I count Milner and that other Em¬
banks and was able to help the election to
pire builder, Cecil Rhodes, whose
railroads is their size. It is also one the Hall of Fame of that other
vision, ambition and driving power
of their grave weaknesses. The di¬
Scotchman,
Alexander
Graham make exemplary models for Ca¬
vision superintendent of the rail¬
Bell, for an inventor somehow nadians to follow.
road who cannot buy a wheelbar¬
seems
to escape the stigma that
One
waste
that the
is
on
the
But
ticipation
vide
Up the
Problem
The
Canadian
goals
and others
without whose wholehearted par¬
to
Scotia Points
unem¬
Institutions Participate
vately
geographically and
nomically they were parts.
Nova
to
Canada Bound to Prosper if Big
rapidly forward
went so far as to doubt that the
four blocs of territory
constituting
Canada could be kept by political
could
great
bureaucrats.
ployment and depression.
to
the
Smith
now
and
deflation,
accom¬
by drastic artificial meas¬ row and the local bank
manager
contract
credit,
check who cannot make a
loan without
speculation and reduce prices, can head office
approval are reduced
play sufficient havoc with legiti¬ to the role of minor
lished
Goldwin
its
justice
to
ures
mistic mood, and is
1890,
of
panied
In his historic essay on "Canada
and the Canadian
Question," pub¬
in
ber
toward
Play Their Full Part
deliberate
of
I
Banks and Railroads Must Also
only
reduction
Canada's
see
knowledge and to help humanity
to
would
essential
volved in
prices is increased production, re¬
a greater abundance of
goods. On the other hand, a policy
of
United
the
to
the
to
is
enterprise.
tele¬
phone system join in the risks in¬
sulting in
Kingdom took $394,000,000
Canadian products, the
States $1,661,000,000.
worth
road
that
In
$38,000,000.
months
sound
is
to
$48,000,000,
States
ten
them
to
swer
the continent
successfu
a
Thursday, December 7, 1950
.
.
.
■
..
.
If your
customers know that
you are more
interested in what
happens to their money than you are in your commission check, it
will only be a question of time until
you won't have to think about
your
end
proper
of
it.
Sometimes "Why
thing to say!
not wait
a
while" is the only
Number 4966
172
Volume
.
.
The Commercial and Financial Chronicle
.
(2203)
the hands of the
Continued
The
from
2
page
Dec.
of
public, estimated
1,
1950, to be 317,000
shares and quoted at 14y4-143/4,
carries a present-day stock valua¬
tion of this bridge at less than
as
Security I Like Best
$5
million.
Most all privatelybridges erected during the
past 30 years have been sold to or
owned
equity without the fear that
HARRY P. SCHAUB
*
ally accompanies the ownership of
common
stock—that
of
having
President, Harry P. Schaub, Inc.,
Newark, N. J.
senior
Detroit International Bridge
Only
chance
jumping
on
Brooklyn Bridge, but
from the
many an un¬
suspecting soul bought the Brook¬
lyn Bridge, or
thought
he
had.
But,
financing
future
there
is
no
portance
have
presented
and
oppor¬
tunities
most
be
stock-
in
ers
such
$14
expended
Harry P. Schaub
proven
enterprises as these modern toll
bridges which operate at very
land
of
a
sub¬
those who had
should
not
be
exception, and it would not
tional
an
2V2% of gross, less charges for depreciation of way and
structures, and the sinking fund at 1% of the face value of bonds
issued, total charges ahead of the Income bonds would be some
$19.8 million based
1948 operations.' 1949 operations cannot be
on the company's lines.
on
used because of the
prolonged strike
On top of these prior charges there would
presumably be
$6.7 million of contingent interest (assuming a 4y2% interest rate)
and a sinking fund of $1.5 on the Income bonds.
Thus, total
charges coming ahead of the preferred could be $28 million. More¬
over, some of these requirements (sinking funds and part of the
Additions
Betterment
and
fund) would not be deductible before
Obviously any such attempt as that now
being made to create an equity for the old Missouri Pacific com¬
Federal
income
taxes.
stock is unrealistic when the long-term and
earnings history of the company is considered.
mon
even
current,
sur¬
Our
Authority within the next
few years.
In the meantime,
Reporter
con¬
tinued acquisition of stock in the
market
open
Governments
on
By JOHN T. CHIPPENDALE, JR.
by the company is
building up constantly increasing
for the remaining shares
by the public.
In addition,
equity
held
this
policy helps to create an
active market for the stock—thus
promotional fees, at
to $16 million were
cost
to
latter at
prise the writer to note the sale
of this bridge to some Interna¬
good banquets, the
last, and I have
for
exception at
profit
International
served
other
least
for
investors'
hold
of
purposely withheld this part of
my limited discussion until now
with the hope that you
will not
forget the most important part of
this article.
The original funded
debt amounted to $20 million, and
after
underwriting, engineering,
to
actual
property
earnings.
is
commission, and al¬
only the foresight to buy, but
the patience to hold securities of
the toll bridge industry.
Detroit
and
replacement
of
equipment is ordinarily provided
Like
the cities they
connect
stantial
public
not
property
out of
or
most without
because
of
means
expansion. Yearly maintenance
best
im¬
to
quire
to
equal
authority
the
The usual toll bridge, like
average
investor, many
other
bridges
of
in
issued
absorbed by some form of
Detroit International, does not re¬
un¬
beknown
the
securities
future.
Company
Steve Brodie took a
once
usu¬
27
ap¬
proaches, steel, concrete and
equipment
during
construction.
Today's replacement value would
certainly represent an increase of
50%, yet the outstanding stock in
affording some assurance of good
liquidity.
Space prevents inclusion of
additional
important factual in¬
this attractive com¬
formation
on
The government
market is under the influence of the refund¬
operation, and this carries with it the usual shifting and
switching of positions. Those that are not interested in the l%s
of 1955 are selling the iy2s and lVss to Federal and are using the
proceeds to acquire shorter-term obligations from the Central
Banks. There is considerable activity in this operation. The longer
sector of the market, with not nearly as much volume, continues
to be under moderate pressure, because of selling by non-bank
investors and only modest scale buying of the longer eligibles by
ing
commercial banks.
mon
stock—a
still such
a
sleeper
if there
is
security in this market.
The
maturities
1956
seem
to be settling within a yield range
that brings them in line with the new
strategic locations throughout
further minor
the Country.
bonds, their
bridge • securities are still
comparatively, new in American
Although
13A% obligation.
1956s at current
steel
Securities of the modern
bridges
Fran¬
after the first World War.
chises
Non-Bank Holders
obtained to build toll
were
crossings such
Missouri Pacific
Bear Mountain
as
Bridge over the Hudson and the
American Toll Bridge across up¬
Last week in this column we discussed
stated that
These toll
bridges were so successful that the
public from 1925 to 1929 bought
any and all types of this new kind
of security—mostly bonds bearing
a high rate of interest, promiscu¬
San Francisco Bay.
per
zation
most
securities
prices
—
sell
than
lower
even
low-
grade rails.
•Those
obtained
into
high
stock
common
of
the
This
De¬
Bridge—oper¬
its
ment'
create
increasing problems of labor,
inventory and credit. Labor rep¬
resents a small ratio of operating
fixed
alone.
siring
the
an
problems.
dei
automobile/ even before;
buggies will continue to expand:;
This
trend
plus
the
new
roads-
being built should assure modernbridges like Detroit International
a
continued increase in value
of
business.
of
line
with
constant increase
its
traffic and net earnings.
rent
annual
share.
the
to
is
the
profits
purchase
making
it
80
cents
per
of
of
use
and
its
undis¬
surplus
own
for
stock,
particularly attractive
investors in
bracket
is
in
cur¬
An unusual feature of this
situation
tributed
rate
Its
who
a
high income tax
prefer
to
make
in¬
vestments for future capital gains
rather
present
vestors
than
for
a
high
rate
of
taxable income.
In¬
buy this type of
may
as
an
independent unit con¬
over
will'certainly remain undisturbed no
be, the new Alleghany plan would
$294.5 million of fixed interest debt for Missouri Pacific
The I.C.C. plan calls for distributing only $161.8 million of
interest debt to present Missouri Pacific bondholders.
An
obligations,
-.
**
Non-financial
securities
the
owners
Federal,
while at the same time they are buying issues from the Central
Banks that are due within the coming 12 months or slightly less.
The
iy2s
desire
for
lVss
the
and
the
and
are
need
selling
these
for what
is
believed to
to
be
greater
_
».
light side.
which
*
How many
<
Banks will not be known until the books
lieved
in
some
issue will
are
on
by the Central
closed but it is be¬
quarters that quite a sizable amount of the n^ew
taken
be
.
of the l3As of 1955 will be taken
This will tend to reduce the
by Federal.
on
supply and some astute followers of the money market
will look upon this as a favorable development as far as the future
action of the l3As is concerned.
floating
Long Bonds Under Pressure
The
offering of a 1%% note by the Treasury, although in line
with the rate pattern which was being developed by the Central
Banks, apparently had a disturbing psychological effect upon many
obligations.
Treasury
in
operators
The weakness in the longest
bank issue is due in no small measure to this offering of
to
the feeling
in the future,
l%s and
that longer-term eligible obligations will be issued
when the occasion warrants it.
There is talk at the
present time about 2s and even 2]/4S being used, when, as and
there should be need for raising money by the Treasury.
So much for the
if
intangible future and the offering of higher
bank bonds, and the probable influence this might have on
outstanding obligations. What appears to be of more imme¬
diate concern to some, and which is no doubt having an effect upon
coupon
the
debt over
September 1967s, is the narrowing of the yield after taxes be*
eligible short and intermediate maturities and the long¬
est taxable obligation. The opinion is held in certain quarters that
hardly be
the
outstanding debt would be compensated for principal and accrued
new bbnds, if the new bonds were to be
taken at their face amount. This new proposed Income bond capitalization would compare with $131.2 million of Income bonds
allocated by the^LC.C. to holders of old Missouri Pacific bonds,
so
that the new plan,-aside from calling for a wide increase in
the
tween the
yield after taxes on the 2V2s of 1967/72 will have to
net
in¬
tg make the longer maturity as attractive as the
less distant maturities.
Also the fact that substantial amounts of
the tap issues become eligible for purchase by the commercial
banks in
1952 is detracting somewhat from the most distant
crease
in
order
interest in cash and/or
bank issue.
fixed debt would
there are many in the money markets that
are of the opinion
that the longest bank 2V2s are getting more
attractive with each decline in price. As this bond gets closer to
debt
by
also increase
the amount-of contingent interest
than $18 million.
this new proposal total
more
nonequipment debt would
amount to $443.8 million for the Missouri Pacific alone.
This is
more than $110 million higher than the company's present debt,
Under
; Detroit
International has pe¬
riodically increased its dividend in
substantial increase
given serious consideration.
*
The Alleghany plan also provides for the issuance of $149.4
million, of new Income bonds.* In this manner, all of the present
American; family
ownership, sales of gasoline
home
a
million, or 8£%, in the fixed interest
that found reasonable by the I.C.C. and the court could
swim" there are
receivable
accounts
:With
That
increase of $132.7
costs; they have no inventory ad¬
justments. and with the usual
no
intact.
With respect to International-Great
matter what the final plan may
others, is not beset with the usual
or
capitalization
the securities allocated Mis¬
souri Pacific holders in the I.C.C. plan. In addition to the equip¬
and
policy of "pay
present
The details for Missouri Pacific
template
all
like
bridge,
given in detail. New Orleans, Texas & Mexico
be brought out of bankruptcy without reorganization and
was
considered reasonable.
ating the big suspension "Ambas¬
sador Bridge" across the Detroit
River
to
Windsor,
Ontario,
in
Canada.
financing, which is resulting in considerable activity
of
Northern,
particular phase is
North¬
ern, however, it was merely said that a new plan would be forth¬
coming later. It is, therefore, not possible to judge just what the
overall system capitalization would be under the proposal.
with
and have
of income.
rate
International
troit
would
investment have since
a
new
position in the l%s of 1955. This will also enable Federal to con¬
tinue its dominance of the government market, and build up their
holdings of intermediate-term maturities, which have been on the
Pacific itself
situation still exists today
a
the
and
substantially
profited
in
foresight
purchased
who
imagination
this type of
Such
the
with
the
in the short and intermediate end of the list.
liquidity than is afforded by the new five-year l3As is behind this
liquidation of the called issues. The Central Banks are acquiring
the "rights" to buy the new notes and this will give them a good
undisturbed. The three constituent
Missouri Pacific and New
Orleans, Texas & Mexico—would be treated separately. It was
proposed that they could be consolidated later, not in the reor¬
ganisation as is now contemplated.
Whether this campaign to have security holders reject the
court approved plan will be successful is a moot question.
How-,
ever, even if it is defeated in the voting, the feeling is almost
unanimous among railroad analysts that no such plan as that out¬
lined as an alternative is feasible. Only the proposal for Missouri
bridge
toll
on
leave the present common stock
bankruptcy
at
pertinent to take that up and postpone
a later issue.,
Baltimore & Ohio for
roads—International-Great
conditions
these
of
to
more
on
to
Corporation and the debtor company started a campaign designed
Full page advertisements appeared in the press
calling for a voluntary Mahaffie plan readjustment which would
through the wringer—usually by
Federal
Court
77B
proceedings.
caused
developments in the Missouri Pacific reorgani¬
to defeat the plan.
and
most
of
newly-built bridges went
market
week.
the I.C.C. reorganization plan for the Missouri Pa¬
by the District Court, got
under way Dec. 1. Holders have until the middle of January to
cast their ballots.
Coincident with the start of voting Alleghany
Voting
occurred,
Resulting
Baltimore & Ohio, and
Liquidating Called Issues
government market is in the process of adjusting itself
cific System, which has been approved
consulting engineering
firms, and alluring circulars (be¬
fore
SEC).
Then the crash of
these
appears
further comments
own
'29-'33
it
The
extension of the comments would appear this
an
Due to last week's
ously financed, supported by rosy
future traffic estimates from wellkn
appears
dropped its guying prices a few thirty-seconds.
offered
first
were
doubt be witnessed in these
no
to be considerable interest developing in the
quotations. The longest bank 2J/2% is still in the
process of finding a level that will attract more than just token
buying. The tap bonds were moderately lower because Federal
,Toll
finance.
price changes will
and
it was the inability to support the present debt that resulted
bankruptcy in the first place. Adding to the difficulties, the new
plan would call for an increase in preferred stock from the present
718,001 shares to 1,723,202 shares. The I.C.C. plan calls for 921,912
shares. Finally, the Alleghany Corporation plan calls for the dis¬
tribution to the holders of the present First & Refunding 5s of the
in
company's holding of 237,030 shares of Texas & Pacific preferred
stock. This would eliminate an asset of the company bringing in
dividend income of $1,185,150 per annum.
Assuming a 4% coupon on the new fixed interest bonds, and
allowing for equipment trust interest, etc., fixed charges under the
It is obvious that
such plan would have to provide for a sinking fund on the
bonds and an Additions and Betterment fund. Taking that
proposed
any
new
new
plan would be around $14 million.
Scale
Buying Under Way
On the other hand,
103 V2
the
level,
it is
indicated there will be considerable scale
buying appearing, with more to follow if there should be further
declines in quotations. It is believed there will be a change in the
loan trend in the future and with Regulations X and W being felt
more as time goes along, there will be fewer mortgages and cor¬
porate obligations available. Commercial banks
posits appeared to be the most likely buyers of
2V2s on price weakness.
It is indicated there will be a
with savings de¬
the longest bank
moderate firming in the shorter
list, because of the demand for these obligations from
institutions that will be seeking near-term liquidity. This firming
of the
end
of rates
the Central Banks have the
from going beyond levels they believe
will be very minor because
securities to prevent rates
to be desirable for
the money market as a whole.
the long partially-exempts have shown price de¬
sympathy with the rest of the market, volume has been
Although
clines in
very
light.
The
readilv absorbed.
few
bonds which came into
the market were
23
The Commercial and Financial Chronicle
(2204)
including
Continued from first page
with
How to Retard Further
American
people,
well
as
foreign holders of dollars, might lated; in high degree
<draw
ihe
down
the
Federal
gold
Reserve
banks
len
of
reserves
approval.
to
gress
It
should
end
force
<governmentally-managed
banks
It should free
omy.
aster inherent
«nd
in
could
irredeemable
an
although
currency
it
would
not
understand
not
the
of
lessons
do not have the proper
or
Federal Reserve
deposit currency,
Federal Reserve notes,
create
can
well
as
against United States government
securities, there is need to work
out a system of contraction and
limitation
the monetization
people
of
against sharp ups and downs in
productive
activity
and
prices
of
«ince
quite proper in principle for the
not
insure
our
no
monetary system can do
that. It would give our people the
^benefits of an honest currency. It
would give us the best type of
monetary standard and currency
Jknown to man. Multiple quota¬
tions for the dollar should disap¬
Private enterprise in foreign
pear.
trade
should
be
revived
since
a
on
Federal
the
debt through
It would
channel.
Federal
capital, surplus, and other
accounts in government
securities since those items should
capital
when the
Reserve
deposits
against govern¬
securities as collateral, mon¬
create
ment
redeemable currency require that
the government abandon its endtess interferences and permit pri¬
begins.
started, there
vate
eral debt either is
•ehould make the
countries
to
work. It
to
return
by other
redeemable
curren¬
cies much easier. It should revive
the
of
Once
tized;
is,
little
a
fronted
confidence in individual planning
for the future, and it should pro¬
zation
vide
procedure
is
point.
The
is not
or
good,
with
is
apparently,
it is done little
or
debt
government
this
logical stopping
If
funds.
But
banks begin to
invested
represent
etization
go
invest
to
their
thorough-going gold standard and
enterprise to
it is
that
seem
banks
Reserve
this
the
Fed¬
mone¬
much.
or
we
no
are
con¬
question
to
as
better.
greater
incentive
for
more
why
great
a
is
of
amount
not
also
moneti¬
good
even
or
the
Repeal Power of Federal Reserve
To
Issue
Notes
Against
ment
Govern¬
Debt
and
eral
Reserve
banks
Reserve
notes
ernment
issue Fed¬
against
should
gov¬
be
re¬
It
monetization
the
1932, and made
as
of
the
June
Federal
12,
«notes
permanent part
Reserve
Act on
a
1945.
should
Federal
be
Reserve
issued,
as
origi¬
nally provided in the Federal
Act, against gold as a
Re¬
serve
serve
and
re¬
against self-liquidating
*hort-term
commercial
paper
as
be
the
evils
of the
clear-cut
and
a
peo¬
of
Federal
by banks unless they
a
largely
for concerned
discuss
to
to
seem
waste of time
pealed. This authority was grant¬
temporarily by the Glass-Stea#*all
Amendment
of
February,
ed
the
debt
state in
can
defensible
way
principles
that
should
guide
what
and
is
sound
to
procedure.
being
is
That
stated
in
not
principle
is
not
discussions
such
for the reason, apparently, that it
is* not well recognized even in
circles where is should be under¬
stood.
that
at
any
exceed
time.
one
in
to
$5,000,000,Direct pur¬
Treasury special one-day certif¬
or
overdrafts, the purpose
of
such
arrangement being
an
stabilize
We
that
need
principle
so
to
the
money market dur¬
ing tax-paying and Federal bor¬
rowing periods—not to engage in
longer-time
financing
of
the
United States government.
endeavoring in every
possible to maintain the in¬
of
dependence
System
serve
the
Federal
from
Re¬
government
domination, as should have been
done, the Federal Reserve author¬
ities
joined
forces
of
vocates
with
the
ad¬
governmentallymanaged economy and of an irre¬
deemable
Federal
a
They
currency.
Reserve
made
monetary policy
integral part of Federal fiscal
an
and
debt
policy.
management
Members of the
Board of Gover¬
fought persistently and long
to open up the Federal Reserve
banks as a dumping ground for
nors
United
States
securities by
authorization
ing
of
without
chases
these
banks
seek¬
direct
pur¬
restriction
from
States Treasury.
the
by
United
Although such
a
proposal would rank next to ad¬
of outright issuance of fiat
vocacy
it is symptomatic of the
general policies and practices of
money,
Federal
Reserve
the
of
power
United
States
dollar.
In
effort to justify their fit¬
ting of the Federal Reserve Sys¬
agement mechanism
official
machinery
man¬
part of the
as
of
a
govern-
mentally-managed economy, high
Federal Reserve officials, in re¬
cent years,
have been stating that
of the Federal Re¬
serve
System is to foster mone¬
tary and credit conditions "favor¬
able
to
sustained high employ¬
ment, stable values, and a rising
purpose
level of
consumption"; that it is to
contribute "to the maintenance of
high
a
best
level
employment,
of
and waste
rising stand¬
sum
country would be served
our
if
There
into
funded
to
two
government, under
the
them.
absorb
that
the Federal Reserve Act, that call
for consideration: One is the vol¬
Reserve authorities to the
toward
do
political
hands
investors
of
commercial
and
An
interest
than that
term government
Treasury which the latter
demand
under
with
the
Section
fiscal
and
15,
and
de¬
now
of
rate
the
positary functions of the Federal
Reserve
wholesome restriction
ority of Section
of the
paragraph
this
10, paragraph
6,
Act
strued
6
reads:
"Nothing
contained
taking
as
heretofore
shall
be
law in the
Secretary of the Treasury which
relate to the supervision, manage¬
ment, and control of the Treasury
Department and bureaus under
such
department,
whenever
and
any
power
vested
the
Board
of
Federal
The
by this Act in
Governors
Reserve
System
the
of
Fed¬
or
eral Reserve agent appears to con¬
flict with the powers of the Sec¬
of
the
Treasury,
such
shall be exercised subject
to the supervision and control of
and
it
and
the free
on
borrowing
by
should
government
strive
con¬
by
of
and
added
an
the
Federal government.
in
away any powers
vested
constitute
spending
Federal Reserve Act. That
point
investors,
would
Banks, and under auth¬
higher
long-
on
bonds is needed
from
such
than
Reserve
prevailing
desirable
view
other
Federal
is the cooperation with the United
may
per¬
we can
is
to
devise
proper
to shift most of it into the
States
dealing
Federal debt
a
now
means
The other banks.
economy.
have
now
we
manent in nature. The best
government-
a
consols
huge that it has become
so
untary, excessive, and unwise co¬
operation given by the Federal
movement
These
date of maturity.
no
fact, as did England particularly
following the Napoleonic Wars,
of
terms
were
We should recognize and face the
Federal
System and the
debt
bearing ah!
sufficiently .high, say.
3%, to induce non-bank investors
aspects of the
relationship between the Federal
Reserve
that
consols
interest rate
by the Federal authori¬
are
of
most
should have
maintain
to
budget
by
prudent
balanced
a
pursuing
then
a
of
course
and, when a
surplus unexpectedly occurs,"it
should be employed to retire a
corresponding part of the Federal
debt, including some of the con¬
economy,
sols.
In this manner, taxes could
reduced if government expen¬
be
ditures
who
are
curtailed;
the
earn
given the right
cide
how
and
dollars
once
their
those
would
to
more
dollars
be
de¬
shall
be
hands
of
retary
spent.
powers
the person who earns it is in
gen¬
eral a much more valuable dollar
the
Secretary."
A
task
of
Federal
the
Reserve
authorities is to maintain the in¬
dependence
other
been
the
Federal
government
compelled,
Re¬
should have
should all bor¬
as
submit to the terms of
rowers, to
the
of
System from Treasury and
political domination. The
serve
free, money markets.
Secretary of the Treasury
open,
The
should cooperate with Federal Re¬
authorities
serve
maintain
to
the
independence and proper func¬
tioning of the Federal Reserve
System. If the Secretary does not
cooperate in this manner, we are
confronted with
an
impairment of
the proper functioning of our cen¬
tral banking system and with the
possible need to amend Section 10,
paragraph 6, of the Federal Re¬
Act.
serve
stable values, and a
fabulous
a
on
major problems involved in
huge Federal debt, it seems
our
since Federal Reserve
policy has fostered easy and cheap
borrowing and fantastic spending
Federal
an
the
the United States
(5) As another basic attack
of money
authorities
which, as a consequence, have
been powerful factors contribut¬
ing to the decline in the purchas¬
ing
that
ally-managed
Instead of
way
governmentally-managed.
a
the
ties.
an
icates
of
economy.
authorities has cost the people of
the
the
the
the
buy
obligations
directly
States
banking system
tion, the better it is for the coun¬
try." The repudiation of these
lessons by the Federal
Reserve
States
United
the
central
a
is removed from political domina¬
with
to
tem into the fiscal and debt
would
ple
United
amount not to
000
banks
guaranteed
or
from
devise
system.
to
securities
to
this procedure are
on
principles
that
should be applied in our banking
(2) The authority for the Fed¬
eral
lessons
Reserve
the
the
A
saving, more investment, more
commission of careful
stu¬
production, more trade—domestic dents of monetary and banking
and foreign—, and a safer
pros¬ principles should be appointed to
perity.
determine as best they can what
business and
chases should have been restricted
moneti-
Since the
(3)
as
dis¬
or
first
century.
respect for them.
econ¬
of the pros¬
us
the
bond-se¬
a
currency—that is,
history
do
the
pects of the great trouble
de¬
zation of the Federal debt—either
its
profligate waste
people's national patri¬
mony. It should provide the peo¬
ple of this country with their
most
potent weapon against a
of
in
Law
advocate
direct
em¬
currency
eighteenth
the
who
cured
Con¬
John
of
fallacies
the
the great
predator
part
Those
that obtains general
manner
into
back
braced by
and
Treasury when the people's purse
$s not used carefully,
wisely, and
a
Federal
have fal¬ of
we
to
and
farther
government
be
governed
accommodating
regard to their bearing upon
general credit situation of
country." Section 14 (b) of
Act unfortunately authorizes
since been compromised and muti¬
as
view
a
of
"shall
commerce
Dollar Depreciation
the
those
securities,
Thursday, December 7, 1950
.
.
.
that
Wise
section
amendment
of
would
probably be
extremely difficult to effect since
A
dollar
in
the
than if it is in the hands of
gov¬
ernment which is inefficient and
wasteful and is not forced to
pay
the penalties for bad management,
Although it is in
tion
to
best tradi¬
our
not only a
urge
balanced
Federal budget but sufficient
to retire
enue
debt, taxes
the
debt
now so high and
great that it seems
clear
that
the
best
are
so
reasonably
for
course
ceptance
and
us
of
lies in the
now
this
debt
institution.
manent
as
a
ac¬
per¬
Lower
properly-funded
a
rev¬
of the Federal
some
taxes
perpetual
debt would appear to be safer and
better for
than
us
a
low-interest-
bearing debt, so heavily absorbed
by our commercial banking struc¬
ture, with the consequent invita¬
tion
to
tures,
heavy
and
Federal
with
expendi¬
taxation
suffi¬
ciently high to support a program
progressive retirement of the
of
may conduct our debates ard of living"; that it is to do its
debt.
understanding of the crite¬ share in creating conditions
the Secretary of the Treasury ap¬
rion being employed in our ap¬ favorable "to sustained high em¬
A
commission
of
Treasury,
we
could
parently must have the power
proval or disapproval of current ployment, stable values,
and a
banking, and non-government ex¬
granted
in
promissory
notes
of
contemplation of
a
member
practices of monetizing our debt. rising level of consumption"; that
perts in sound principles of public
serious national emergency such
loanks, with a maximum maturity
it is to provide "enough credit
finance and of central
banking
Make Federal Reserve
of 15 days, and with
as that of a
devastating war and
government
and money to keep pace with the
should be able to devise a work¬
a
securities as collateral, such 15Independent
possible or actual invasion.
needs of economic growth and a
able
program
for
funding the
day promissory notes to be elig¬
(4) Closely related is a need steadily rising standard of
The impairment of the appro¬
living
proper portion of our Federal debt
ible as collateral
against Federal for Federal Reserve authorities to for all the
priate independence of the Fed¬ into a
people"; that it is to
perpetual debt and
for
Heserve notes.
adhere to the
purposes
of the expand money and credit suffi¬ eral Reserve System apparently
driving it from our Federal Re¬
As of September 27, the Fed- Federal Reserve
System as stated ciently "to foster full utilization of has not been so much a conse¬ serve and
commercial banks into
oral Reserve
Agents held $10,- in the Federal Reserve Act. Fund¬
expanding
physical
resources, quence of the provisions of Sec¬ the hands of other investors.
665,000,000 of United States gov¬ amentally, the Federal Reserve technical
tion 15 and Section 10, paragraph
skills, and manpower."
en
asset in excess of the
For
•cerve.
ernment
securities
against
the
Federal
gold
re-
collateral
as
$23,698,359,000
Reserve
notes
then
of
out¬
standing. Repeal of the GlassSteagall Amendment would force
a
retirement
notes
to
we
with
emergency
purposes,
authorize the
use
of
of
the
Federal
extent,
as
System is supposed to be
agriculture, and in¬
dustry, chiefly through the medi¬
of
um
is
replaced
by gold,
commercial, agricul¬
tural, and industrial paper, or the
15-day promissory notes of bor¬
rowing member banks.
Such a change should be most
wholesome. For well over 50
years,
the best informed and most
experi¬
enced students of money and bank¬
the
principles
evils
rency.
of
a
have
pointed
bond-secured
out
cur¬
They have been thoroughly
in
correct
framers
their
of
the
Act
knew
the
elimination
that
contentions.
Federal
and
of
The
Reserve
provided for
bond-secured
currency.
the
proper
which
the
Federal
tem
should
have
principles
Reserve
operated
on
Sys¬
have.
time
place, it
the
is most desirable that
effort be made to adhere
fundamental
purposes
as
provided in the Law.
Section
15
of
that
banks,
no
such statements
upon
them. The purposes of the Act are
stated
in
the
long title which
Banks, to furnish an elastic cur¬
rency, to afford means of rediscounting commercial paper, to es¬
tablish
a
vision
of
States,
Act,
which
provides that the Federal Reserve
direction of the Sec¬
more
effective
banking in
and
for
super¬
the
other
United
purposes."
The "other purposes" are set forth
specifically in the law and
of
none
them includes any of the pur¬
retary of the Treasury, shall act
as
fiscal
agents of the United
poses
quoted
ments
made
States and depositaries of Federal
Reserve authorities.
revenues,
does
not
authorize the
financing of the Federal govern¬
ment
by
the
Federal
Reserve
banks.
which
But
from
of the basic purposes of the Fed¬
eral
Reserve
banks
has
taken
to
Act has
to purposes and never has had
Secretaries
of
the
the Federal Reserve
nor
Section
states
12A
the
of
above
by
from
various
state¬
Federal
When the Banking Bill of 1935
proposed
to impair the desirable
independence of the Federal Re¬
the
Act,
serve
principles
that
servient to the
System and to make it sub¬
shall govern in open-market pur¬
chases under authority of Section
tration,
14, provides that these purchases,
tral
warned
69
political Adminis¬
monetary
economists
that "The lessons of
banking
teach '
us
that
cen¬
the
Direct
Government
Lending
Treasury
authori¬
(6) Finally, there
are
the funda¬
ties have
mental problems inherent in
gov¬
ernment
lending institutions,
for
tion.
added
as
Curtail
it has of the fact that neither
as
the
establishment of Federal Reserve
been
every
serve
6,
reads: "An Act To Provide for the
Al¬
have
a
of
progressive impairment
banks.
though non-commercial activities
as
fact
to
member
of
that
easily-determined
the matter is that the Federal Re¬
seriously attempted since
early 1933 to protect the inde¬
pendence of our central banking
system from government domina¬
the
Reserve
discounted
ing
is to
The
com¬
aid commerce,
date, of $10,665,000,000, unless the time,
collateral
a
banking system. It
mercial
The problem now is to extricate
the
Federal
best
we
of
mass
money
Reserve
System
as
from the far-reaching
Federal
debt,
cheap
can
policies, and net-work
government
management
of
which
hold the people of this coun¬
now
Basically, the
private
lending.
It
Well-conceived
be
partly
or
government
be
unwise
to be
enterprise.
of
umpire
is
not
policies
of credit control instituted
by the
Federal Reserve
authorities can
try in their grip. This promises to
slow, mammoth, and dis¬
couraging task. But there seems
as
proper nor good for our govern¬
ment to enter into the business of
They
a
function
proper
government is to act
a
have
largely impaired by
lending institutions,
contributed
credit expansion
depreciation of
no good reason for
suppos¬
ing that the Federal Reserve au¬
democratic
and to
to
a
dollar.
our
much
thorities
much
will
use,
or
will
use
properly, the dozen
tive
of
and
credit
or so qualita¬
quantitative instruments
control
placed
at
their
Furthermore, although we talk
about the
desirability of
processes,
we
substi¬
tute the machinery of
government
dictatorship
for
such
processes
when
we
create government lend¬
disposal until after these authori¬
ing agencies.
ties have been made
tem the government does not
per¬
mit the people to decide whether
appropriately
independent, of the Treasury and
of the machinery and advocates
they
will
or
Under
will
such
not
a
sys¬
invest
in
Volume 172
Number 4966
.-.
The Commercial and Financial Chronicle
.
(2205)
such
enterprises;
it
decides
for
Continued
jrom
them.
For the good of this country and
to obtain the benefits of sounder
monetary, credit, and fiscal prac¬
tices, the business of these in¬
stitutions
should
be
pyivatl». enterprise
ernment
liquidation would
national security.
our
There
of
course,
corrections
are,
fundamental
be
to
-
made
made,
should
to
and
restriction
the
cases
spending,
other
which
which,
contribute
of
waste,
is
greatly
debt,
destructive taxation, and the de¬
cline
in
the
purchasing power of
Perhaps the most out¬
dollar.
our
standing are the following three:
(1) Our Congress and Adminis¬
tration should return to Constitu¬
tional
government.
respect
basic
They
adhere
and
principle
is
government
fact
to
that
should
and
Federal
our
of
one
delegated
and that all
and specified powers
The State of Trade and
from
to
selves.
The
the
states
in
has
dollars
Consumers
otherwise
only
the
people of the United States.
(2)
ing
play
agreements
and
them to bind
of
ment
and people, instead of em¬
ploying treaties that can be made
for
Senate and provided twothirds of the Senate present con¬
should
cur,
reasonable
be
to
ended.
It
agreements have
people
of
fabulous
the
cost
United
in
sum
seems
that Presi¬
suppose
dential
our
States
(3) There is great need for gov¬
reorganization in the in¬
ernment
efficiency and
We should take
they
as
by'
made
the
Hoover Commission.
The last three recommendations
for
reform
in
government
car Guilders are scrambling to place as many orders
under the allocations system which starts in January.
can
American Iron
The
and the decline in the
waste
purchasing
power
of our dollar is urgent.
Therefore, let us employ the fol¬
lowing six correctives which have
the
two-fold
virtue
of
being
fundamental in nature and
able for prompt
the week
for
81.7%
statutory
rate
beginning Dec. 4, 1950, compared to
present
$35
fine
per
(2)
The
thority
of
banks
the
the
Federal
issue
to
of
than
This
steel
ingots
and
castings
week
a
Reserve
against government securi¬
-
(3) The appointment of
a
com¬
mission to establish fthe principles
that
should
banking
be
system
employed by
in creating
amount
light and
posits against government securi¬
It
the
(4) The establishment of the in¬
dependence of the Federal Re¬
System
from
Treasury
domination and the return of that
System to its proper major func¬
tion of aiding commerce, agricul¬
ture, and industry.
(5) The funding of
tion of
our
a
major
Federal debt into
sharply
a
electrical
energy
previous
week,
the
of
973,358,000
kwh.,
or.
16.9%
above
the
toal
output reported for the corresponding period two
years ago.
tone
The
21,515 cars,
Auto
total
represented
the corresponding
or
increase of 36,866
an
in 1949, but
week
cars,
or
decrease
a
of
3% below the comparable period of 1948.
Output Scheduled This Week to Reach 7,500,000
Combined motor vehicle production in the United States and
Canada the past week,
according to "Ward's Automotive Reports,"
151,004 units, compared with the previous week's total of
122,683 (revised) units and 72,994 units
a year ago.
and
of 123,926 cars
21,938 trucks built in the United States and a total of 3,731
and 1,409 trucks built in Canada.
United
the
States
alone, total output was 145,864 units,
against last week's revised total of 116,059 units, and in the like
week of last year 68,385. Canadian output in the week totaled
5,140 units compared with 6,624 units a week ago.
Commercial and
rose
to
160
vegetable
colder
a
of
$5,000
or
-
construction
retailing mortality
was up
failures having
but failures were not as numerous
more
last year.
and
increased
Fresh
and
to 84 from 75, wholesaling to 24 from
manufacturing where they dipped from 26 to 25, the lowest
trade groups except whole¬
saling had fewer failures than last year. The sharpest drop, 62%,
The
as a result of
in
was
better
low
demand, aided by
Hogs developed
prices.
curtailed receipts.
irregular and fluctuated
were
touching
a
over
wide range
a
showed a loss of 65 points for
all-time high early in the period.
new
The downturn in
prices was attributed to talk of the possibility
of an early peace in Korea and the
announcement by the Depart¬
ment of Agriculture that
prices on next
year's crop would be sup¬
ported at 90% of parity whereas the trade
generally had expected
a higher loan rate.
Early strength in the market was due to active
mill and export
price-fixing and expectations of a tightening in the
supply position. Other supporting factors included
buying influenced by the high rate of domestic mill
consumption and the previously announced increase in export quotas. The volume of sales
in the latest
holiday week declined to 253,600 bales, as compared
with 347,100 bales in the
preceding week, and 302,300 bales in the
corresponding week
a
year
Cotton textiles
ago.
were
firm
*
-^
w
.
■-
with
-
constructions edging higher.
I
Credit Restrictions
*
There
was
an
appreciable decline in
consumer
buying in the
period ended on Wednesday of last week,
follovying a siege oi
violent storms over much of the
country, as well as the continuing
burden
of
credit
goods purchased
restrictions.
The
dollar
aggregate
volume
1
oi
slightly above the level for the similar 1949
period, states Dun & Bradstreet, Inc., in its current summary oi
vvas
.1
While there
was a moderate rise in the sale of small
articles
apparel this week, in keeping with the pattern of Christmas
shopping, the consumer-interest in suits, coats, and dresses de- '•
creased noticeably in
many localities.
Shoppers generally concen¬
of
trated
haberdashery for
upon
The
demand for
The
total
dollar
a
children's
and
men
and
infants'
accessories
wear
volume spent for apparel
rose
was
:
year ago.
for
very
women.
slightly.
about even
r,:
with
Housewives bought slightly less food last week than in the
preceding week; dollar volume was moderately above the level
comparable period in 1949. The interest in dairy products
and eggs rose
somewhat, while the demand for fresh fruits and *
vegetables declined. Inexpensive cuts of pork and beef were in-—
creasingly popular with shoppers in scattered communities.
^
for the
,
The
consumer
..
»
demand for large appliances and television sets
particularly decreased, while the interest in floori-coverings, paints,
and hardware dipped fractionally.
There was a slight rise in the
lamps, and tableware.
buying of
some
housewares, **
Total retail dollar volume in the
period ended on Wednesday
of last week was estimated to be from 1 to
5% above a year ago.
Regional estimates varied from the levels of a year ago
New England and Pacific Coast
and
Northwest
Wholesale Food Price Index Just 2 Cents Under
Post-Korea Peak
+1 to
+3 to +7; East 0 to +4; South
+5; Midwest — 1 to 4-3; and Southwest.
Wholesale ordering throughout the nation was
largely unchanged in the week, as increased bookings in some lines were
offset by the adverse effects of inclement weather. The total dollar
of orders
-
<
was
moderately above the level for the corre¬
sponding week in 1949.
While the number of buyers attending
wholesale centers dipped somewhat as compared to a
year ago, it
was slightly above that of the
preceding week.
Department store sales
in foods this past week carried the Dun
price index for November 28 to $6.67,
& Bradstreet wholesale food
,
+ 2 to +6.
the
Federal
Reserve
on
a
countrywide basis,
Board's index
for
the
week
1950, declined 3% from the like period of last
as
taken from
ended
year.
Nov.
This
*
25,
com¬
to absorb them.
,
»
-
slightly
New York spot quotation
the week after
volume
place in manufacturing.
The steady uptrend
*
•»
percentages:
level to date in 1950. All industry and
an
..
largely in sympathy with weakness
pork
comparatively
last week.
during the week;
appeared in commercial service where casualties fell from 21 to 9
took
•
*
by these
■
failures
II, and construction to 18 from 13. Declines, on the other hand,
and in
oils.
weather
firmer trend
in the week
level of 264 in 1939.
as
up
The nation-wide selling of
house-furnishings declined moder¬
during the week; total dollar sales remained moderately
the level of a year ago.
preceding week, Dun & Bradstreet,
Inc., reports. Although casualties remained well above the 1948
total of 126 for the comparable week, they were down 28% from
the 221 which occurred a year ago, and 39% from the pre-war
All of the week's increase was centered among
«
above
ended Nov. 30 from 146 in the
liabilities
irregular with spot prices
was
ately
Slightly Upward
industrial failures
-
Lard prices worked lower
the level of
Total output for the current week was made up
cars
coffee market
trade.
Vehicles in 1950
totaled
somewhat easier.
revenue
week's
above
some
Trade Volume Falls Due to Storms and Burdensome
freight for the week ended Nov. 25, 1950,
which included Thanksgiving Day totaled 701,421 cars, according
to the Association of American Railroads, representing a decrease
of 135,644 cars, or 16.2% below the preceding week, due princi¬
pally to the holiday.
The
from
for the week.
Carloadings Decline 16.2% Due Mainly to Holiday
5.5%
»
>
on
was
some
Loadings of
•«
export trade generally was slow. Country
remained small but prices worked lower in
other grains. Trading in grain futures on the
oats
heavy selling induced by talk of possible early peace.
was also weaker with
trading at a virtual standstill. There was a slight
pick-up in demand for raw sugar futures
but the spot market was
quiet. Prices held steady but the under-
to
capacity,
to increase their
offerings. Substantial
during the week. There was little interest
The spot market
bear¬
interest rate sufficiently
high to induce non-bank investors
ing
compared
new
on
Rises 16.9% Above Like Week of 1949
of
con¬
permanent nature
industry,
based
208,764,000 kwh. higher than the figure reported for
was
excess
por¬
a
ago,
distributed by the electric
industry for the week ended Dec. 2, was estimated
power
Trade
sols of
entire
A month
output for the week ended Dec. 3, 1949, and 1,070,587,000 kwh. in
ties.
serve
the
for
ago.
1,938,400 tons of
6,716,273,000 kwh., according to the Edison Electric Institute.
our
de¬
of
Cotton prices
is equivalent to
it stood at 91.7% and 1,690,500 tons.
Electric Output
at
average
noted
and
chain baker huying early in the
week,
domestic bookings of bakery flours continued
at a low level with
most users said to be well
supplied for the next few months.
Export flour business remained small. Cocoa futures declined
of
103.0% and production amounted to 1,986,600 tons;
was
The
an
of farmers
were
wheat
sympathy with
•
Chicago Board of Trade was quite active with sales
averaging *4
about 41,600,000 bushels
per day, as against 38,000,000 bushels in
the preceding week, and
36,400,000 in the like week last year.
100% of capacity.
week's operating rate
I,575,800 tons
the rate
Reserve
Federal
average
au¬
ties.
in
offerings
in
Business Failures Turn
removal
an
steelmaking furnaces have been operated at
of gold.
ounce
notes
of
redeem¬
a
the
announced this week
week ago.
a
more
avail¬
use:
at
currency
Steel Institute
Output for the current week will represent 24th week of 1950
For
(1) The institution of
able
and
94% of the steelmaking capacity for the entire industry will be 100.5% of capacity
prob¬
government
shown
that the operating rate of steel companies having
ably could not be put into effect
against
export sales
seems
their total first quarter needs in January.
Such practices as over-ordering will prevent a fair distribution of
steel under the freight car program and prevent the industry from
reaching a 10,000 car a month peak during March or April as
would be expected, this trade authority concludes.
quickly. Prompt and fundamental
action
curb
Some have tried to place
economy.
advantage of the
recommendations
to
the failure
Aside
Freight
a
dollars
young men.
terests of
Harvesting of the new corn crop was reported well along
completion, but the cash corn market remained tight due
to
the
and, in
addition, in the lives of thousands
of
being used
now
unsettled and prices, turned'downward as a result
of liquidation influenced by favorable war
news early in the week
talk of an early cessation of hostilities in Korea.
.
substantial amount of its steel.
a
only with the advice and consent
of the
methods
year
toward
->-•
entirely unnecessary,
"The Iron Age," points out.
Regardless of the reason, steel de¬
mand pushed to a new high this week. One very large consumer
is extending its conversion through the first quarter of next
year;
this firm is paying $200 (about double regular mill price) a ton
permitting
Federal govern¬
our
the
wild scramble for materials that
a
year ago,
The practice of giving free
to the use of Presidential
that
-
a
were
and
inadequate
prove
civilian consumption of materials are causing confusion and creat¬
of
for
feel
Industry
limit will also
.
.
recent
in
been costly not
but
a
in which
years to convert the Federal gov¬
ernment
into
one
oi!
general
powers
The higher
few weeks..
•
them¬
and
tendencies
5%..ta.J0%r
within
other powers are reserved by the
people
compared with 303.47 a week earlier. At this time
the index registered 248.13.
as
Grains
government
heavy
28,
*
ago
institutions:
such
endanger
*,
to
gov¬
those
in
except
which
need
and" the
lending
liquidated
in
shifted
5
page
29
or
(6) The shifting to private en¬
terprise and the liquidation of all
August 29. The latest index advanced 4 cents over the previous
level of $6.63 and is the highest since September 19 when it like¬
pared with a revised figure of 8% for the previous week. For the
four weeks ended Nov. 25, 1950, sales showed a rise of 3% from
the corresponding period a year
ago and for the
wise registered
tered
government
those
except
lending
institutions
necessary
to
the
increase of
Were
these
six
basic
31
proposals
course
the
in
recent and present
in
affairs
our
and
due
place
and
our¬
selves upon more solid ground.
with $5.79
a
year
ago,
or an
represents the
use and
general
total of the price per pound of
its chief function is to show the
sum
general trend of food prices at the wholesale level.
Wholesale
of
unhealthy
monetary
to
compares
pos¬
to extricate ourselves from
tendencies
fiscal
foods
$6.67. It
15.2%.
The index
maintenance of national security.
put into effect as promptly as
sible, we should be able in
only 2 cents under the post-Korean peak of $6.69 recorded on
Commodity Price Index Unsettled by Reports
Early Cessation of Hostilities in Korea
The general
level
of last
level of prices receded somewhat from the high
The daily wholesale commodity price index,
week.
compiled by Dun & Bradstreet, Inc., closed at 302.02 on November
year
an
to date regis¬
advance of 5%.
Despite storm conditions prevalent in the New York
week, retail trade
rose
about
area
last !
5% above the corresponding period
in 1949.
According to the Federal Reserve Board's index, department
sales in New York City, for the weekly period to Nov.
25,
store
1950, dropped 12% from the like period of last year. In the pre¬
ceding week an increase of 6% was registered from the similar
week of 1949.
For the four weeks ended Nov. 25, 1950, a decrease
registered under a year ago, and for the year to date,
volume advanced 1% from the like period of last year.
of 3%
was
Financial Chronicle
The Commercial and
Thursday, December 7, 1950
.
.
.
(2206)
30
I want
mean
Tomorrow's
Walter
Whyte
By WALTER WHYTE=
for which he
v
lot closer
generally believed. There
were
various signs
that
decline was a
than
unit
you
I refer
price increases.
to the glass stocks I men¬
tioned
a
few
*
no
pointed to it, among which
Eastern blow, more
was the fact that the averages recent
had managed to get down to glass became immediately
the 222 figure I mentioned as necessary as a replacement
than any building boom has
the resistance level.
Union;
The
war
light of hindsight, where were the real
made—assuming of course that
it would not have been the part of wisdom to maneuver
in such a way that Hitler and the Kremlin were left to
bleed each other to the death?
Certainly a case could
in
minds
in any
or
demerits
most
cases
as
marketwise.
its
effect is
served,
.
.
the cream's off
the market.
Holding back
.
.
.
.
.
grudgingly
.
the intensification
.
.
.
of the Ko¬
is not bearish.
war
rean
.
.
He-reading the above it
deliberately took
looks like I
quotes out of context
to high¬
light my brilliance as a mar¬
ket forecaster. While I have
objection to having readers
regard me as some sort of a
genius, the fact is that the
above quotes were chopped
no
to save space. If you've
got the columns I re¬
up
still
ferred to you can
time
not necessarily
with
those
In
those
easily check
of the breathing spell from Munich in 1938 until
later, really to get ready
to oppose Hitler in an effective way the Munich appease¬
ment would not have paid off in dividends? Who can say
that had these opponents of Germany made full use of
the two years elapsing between Munich and the invasion
of the lowlands, Munich might not now be regarded in
a wholly different light?
•
Now turn to the present situation.
For fully five
years we have been "appeasing" Russia in a rather real
good
Executed
at any
the
,
H
As
e
in
year later, Hitler calmly
violation of the Locarno
York
Stock
Exchange
New York Curb Exchange (Associate)
San Francisco Stock Exchange
Chicago Board of
Trade
Teletype NY 1-928
Munich
Private Wires to Principal Offices
San
»
Francisco—Santa
Barbara
Monterey—-Oakland—Sacramento
Fresno—Santa
Rosa
SPECIAL CALL OFFERINGS
Per 100 Shares Plus Tax
•
Feb.
•
$325.00
Alleg. LnclIum@37V2
Am.F.Pr. $7p.@88y2 Jan. 29 287.50
Gen'l Motors @46
Feb.
2 325.00
2
And
might be termed token operations in support of Poland
own
interests.
Whether such
a
policy rested upon conviction that it would presently be
possible to bargain with Hitler is not clear. If so, even
the first half-year or a little more of World War II itself
was conducted on the part of Britain and France on an
appeasement basis. If not, it was simply lethargy or some
other ailment of a like sort which kept them asleep and
more or less
contented during these months. Then the
avalanche came, in the spring of 1940, and the horrible
blunders of a half decade or more were painfully evident.
now
need to do is to face
if
'
to them requires withdrawals o^
even
the acceptance of defeats in one quarter to gain
strength in more important quarters, that is not appease¬
facing
up
vy.-V;
ment.
Ebersfadt & Go. Offers
Diversey Com. Stock
F. Eberstadt & Co. Inc.
1
publicly
offered
shares, $1
mon
par
Dec.
on
offering
com¬
value, of The
made of securities of
ever
New York Stock
Exchange
Weekly Firm Changes
The New York Stock Exchange
has announced the following
the company.
Transfer of the Exchange mem¬
bership of Henry L. Harris to Ar¬
E.
thur
Goetz
537.50
87.50
Corp.. @16% Mar. 7
Feb. 26
Gulf, Mob.&0. @ 20
137.50
Budd
&
Radio
175.00
6
mos.
150.00
Collins&Akmn@ 19% 6
mos.
137.50
Pepsi Cola
..
Amer. Airlines
@ 8%
@ 11%
6
Explanatory pamphlet
mos.
on
112.50
request
THOMAS, HAAB & BOTTS
.
Part of the Victor Chemical Works
holdings
are
in
turn to be
from
chased
F.
Eberstadt
&
pur¬
Co.
Members Put & calls Brokers &
Dealers Assn., Inc.
50
Broadway, N. Y. 4, Tel. B0 9-8470
The
partnership in Morgan Stanley &
reclassified
The rest of the stock
shares.
owned by
F. Eberstadt & Co. Inc.
is
being reclassified into 143,000
common
shares, which are the
shares now being offered publicly.
As
a
part of the program, F. Eber¬
the
company
a
Nov.
Co.
30.
Washburn
from
drew
was
not fully understood and realized
M.
Chipman with¬
partnership in Dean
Witter & Co. Nov. 30.
Stern Nominated
stadt & Co. Inc. is also arranging
for
.
remaining outstanding will
into 220,000 com¬
stock
mon
.
...
Wister, general part¬
in Gammack & Co., became a
ner
to
Head Curb 5 & 20 Club
term loan of
Lawrence
M.
of
the
Stern.
$1,000,000 with the Equitable As¬
surance
Society
of the United
member
States.
Exchange
nominated
for
> a regular
York Curb
since
The
in
1923
Diversey Corp., organized
as a subsidiary of Victor
the
New
1923, has been
the Presidency of
Curb
Exchange
members*
Five and Twenty Club on a slate
is engaged in the
presented to the membership for
and distribution of
Chemical Works,
development
approximately 100 organic and in¬
organic chemical specialties, prin¬
action
Jan. 16 of next year, v
on
Announcement of the slate was
made
by James J. Hopkins of
Hopkins & Burgers, President of
tomers, about 80% of sales being retary.
George
made to the food industry, par¬
facing—although it
•
mem¬
limited partner effective Dec. 6.
Clarance Stanley retired from
Inc. by Diversey and retired.
be
William R.
cipally bactericides, cleaners and
or resist a powerful rival—a rival far more
ready for war than they. It was more nearly in the nature
of a police action that they had to consider. By the time
of the ill-starred Munich episode, Britain was apparently
considered
F. Eberstadt & Co.
bership of Adolph Woolner to
Inc. has agreed to purchase the
Emelie Z. Weinberg will be con¬
75% of the stock of the company sidered
by
the
Exchange
on
owned by Victor Chemical Works.
Dec. 14.
should attack
Co. @54% Feb. 19
Co.... @15% Feb. 20
Merck
will be
by the Exchange Dec. 14.
Transfer of the Exchange
we begin to
apply these experiences to
situation, let us take careful note of certain
basic differences.
When in 1935 Hitler began to build
up his army, he was in an almost defenseless military
position. This aspect cf the situation had not very greatly
changed when he occupied the Rhineland. The nations
considering what should be done were not at either of
these moments faced with a question as to whether they
But before
the present
firm
changes:
143,000
at $10 per share.
represents the first public
This
year later when Germany marched into Poland
"appeasement" in the usual sense came to an end.
The fact is, however, that even after World War II was
in progress, there was a definite inclination on the part
of France and Britain to limit their participation to what
of their
we
Diversey Corp,
a
in defense
What
to the facts.
up
which time further acts of
aggression were consented to in advance, acts which were
to grow into much wider scope than had been agreed upon.
and
New York 5, N. Y.
14 Wall Street
COrtlandt 7-4150
at home and abroad.
Again the interested
and
Members
nothing to be in a position to present an
against the Kremlin and its satellites, and
even since Korea, if current accounts are to be
accepted,
confusion of counsel and gross inefficiency have tragically
reduced the net product of our rearmament effort both
parties shrugged the matter off although it still could
hardly have been a major task to put down the growing
forces of the Nazi regime.
The reaction of Britain and
France, as well as the others more or less directly affected,
was the same when two years later Hitler took over Aus¬
tria—although by that time the Nazi regime had been
able to build up considerable military power. It was only
about six months later that Mr. Chamberlain made his
ill-starred visit to Munich, at
almost
effective front
marched into the Rhineland
Pact.
have been from time to time
a
done
the organization and training of a
conscripted army in Germany. Nothing was done about
it by other parties to the treaty although at the time
Germany could hardly have been other than a helpless
victim of the military might of France and Britain. About
a
we
good deal of scolding. True it is that we went
vigorously to work at the time of the Berlin airlift. More
recently we have stuck out our chests in Korea—or was
it our necks?
But until Korea, the Western world had
See It
sailles Treaty, began
about
Schwabacher & Co.
True it is that
doing
tion by Britain and France at that time is a matter of
conjecture. The Hitler regime had by that time developed
German might to a point which made it formidable—at
least in comparison with what later proved to be the
weakness of France and Britain. At any rate, it was only
Pacific Coast Exchanges
New
,
They are presented as
of the author only.]
What would have been the result of active interven¬
on
use
the invasion of Poland 18 months
sense.
Continued from first page
Pacific Coast
Securities
during the preceding two or three years—that
preparing really to meet such a situation as then
Who can say that had Britain and France made
arose.
psy¬
of
By
is in not
Chronicle.
Hitler Was Strong at
Orders
do
coincide
confronted today.
we are
been made
the prudent
would therefor be
path to take." In the column
of Nov. 30, I observed, ". . .
certain issues
will give
ground
article
and those by which
Munich, it should have been clear that the blunders had
The
ticipant, I said I liked the oils, containers. The end result is
heavy glass stocks and some that such stocks an Anchor
specialties. But so far as buy¬ Hocking, Libby Owens Glass
ing then was concerned I ob¬
against the lethargy of 1935 or 1936, possibly
But there is little similarity between these
1937.
years
glass con¬ chological rather than actual.
In the column of Nov. 23, taining companies, though no I prefer to look to the market
in discussing the problems of recipients of any storms, will for clues than to military or
make more money because of
political pundits.
buying and selling and the
the shortage of
metals for
[The views expressed in this
optimum of each market par¬
done to date.
*
*
#
made
even
the leading
potential down
or
up move. I'm not going into
any discussion of its merits
many
factor
;
Now in the
an¬
uppermost
then in far
mistakes of appeasement
%•
*
is
even
The Real Blunders
be
liked them
knowledge of any
hurricanes or storms.
In the
had
Western
is
apparently prepared
he marched into Poland.
other is Cities Service.
paragraphs back.
When I first said I
I
that
was
greater measure than those who were eager to put an end
to his campaigns. ^Certainly this was true by the time
of this ing at least one healthy move
in the immediate future and
have been due to per
may
indicate in last
week's column that the end of
the
*
#
market, though part
tried to
I
*
'•
Some weeks ago
I referred
To get back to the market: flatteringly to the utilities. So
The worst recent actors were far they have done little of
the motors. They pulled away importance. There's one, how¬
in good
style in Tuesday's ever, that gives signs of mak¬
Says—
=
V
analagous to that
more
by which the world is confronted today. ; That is to say;
Hitler could not then be stopped short of a large scale war
ahead.
•
x,,.:
%
*
%
denuncia¬
or
somewhat
at the time—a situation
Bottling will be in
flock of either heavier demand in the weeks?
a
congratulatory
tory mail.
-
Markets
and Owens
Incidentally that doesn't
this.
insecticides
industrial
for
sanita¬
tion, and oil absorbents, cleaners
and other products for industrial
manufacturing
and
It also produces
maintenance.
and sells "Enoz"
products for household moth con¬
trol.
The company sells its prod¬
ucts to
approximately 24,000 cus¬
ticularly
products,
the
dairy
beverages,
and
the
which
club,
in 1946.
Jacob
Treasurer,
Feinstein,
this
year's
was
nominated
for
Vice-President
and
George
rel, currently serving
was
formed
was
•
as
chosen for Treasurer.
McDermott
~
was
,
-
Her-
Secretary
John S.
proposed for Sec¬
..
•
•
f-
-
y
Bernhardt headed the
Nominating Committee, which
dairy also included Clarence
Bettman,
baking,
brewing and canning industries.
Moe Edward
Herman, Rudolph W.
Kerpen and John S. McDermott.
Volume 172 ^Number 4966 ;
Continued
from
The Commercial and Financial Chronicle
.
6
page
-
.
••
piling
*i*l■
1'
1
KrAhaDllltieS 111
K1K1V1PCC
While we are noticing new ferise next Spring,
the time expenditures
up of. inventories of
ness-
-
- •
'■
(2207)
AJUJlUCaa i *
cars and tbe l°wer
'
I
'!%■*»■■
r
«
.
.
,
Commerce
the
for
data
purpose
..
,
,
.
...
,
large
production and as the government under
.
here to stimulate thinking continues with its stockpiling pro-
not
on
economy
billion of accel-
additional $5
an
depreciation charges, so the
erated
really be
to
on
lustments in the projections
low as it might appear
as
the surface.
beP|dju1te™ls wVgo^llng Th^
.
figure we really want to
But the
get at in this category is the con-
will
Operating
in
expenditures!
defense
become
definite
more
later
an
atmosphere »f shortages and sellmarkets,
that^ ^business expenditures?- for
bflthis
mind:
fluenced
Bear
this- year.
of
quarter
third
the
for
indicated
lion
W1".
of
item,
thprp
mere
whirh
wnicn
t
In
aid'
course,
is one
iq SO muui aris qo much di
militarv auarters
huHdpt^of $70
?alked at for the
nnifprcian'ri
that
hiifSn
a
veaJ
1051 52 Bscal
lyoi-oz tiscai year,
assisting in the devel-
S
of these efforts is less than
Peilonal
still
it
Suar!
In oiner
in other quar
over
for°he a7re^aUbTeeai
pqtin^fp
between
nf
and
and
hi hAn
billion,
o
o
over
run
I get
anv
and
S50
.
an
$60
S
that is the figure that
that
the figure t
I have had in mind in my
I
indicated
tabu a-
that
this
tion
when
item
ml§bt add another $34 bilto Gross National Product,
lion
Let
me
emphasize again that the
projection here is for the
that
rate
may
annual
^0r wor^ stoppages.
the very heavy capital expenditures for Plant and equipment in
There is no way yet for judging
the ex:ent to which these benefits
might be offset workers increased
by the or by the
of
factors,
of
deterioration
p0Sjble
a
full-
in the atti-
rdruiers W1U De ^ruilP mossier,
and Eliphalet N. Potter, mem-
a Partner ln Bonner & Gregory.
Mr. Gossler has been active as an
change in timing. Conversion individual floor broker,
change
in the
demand fundamental trends, there would
rising de-
be a
gQ^
broad
^ ig 0bvious that the
outline
by
presented
product
of
the
the
figures
^ go
broad
very
economy
/
Total
more
there
all
of
Product
Income
(Srendin5) (■»««» (Spcndins)
$178
.
4-j
27
26.6
10
$261
11.9.
—
—
$224.8
—
Gross National
will
have
to
tjons
and
TndirafpH
30
$231
20.0
$204.8
$33.5
104 9
$27
126
$198.4
$219
*
yet
to
be
__
--
'
—
$6.4
_L5A
Indicated Net Personal Saving or
Dis-saving
Corporations (Argus Estimate)
Earnings Before Profits Tax
$45,Q
—-—
——
^
ous
,
.
~~T7
,
#
-
,
'
$11
22
$16.1
17.0
Equals: Retained Disposable Income.
...
Add Back: Extinguishment Charges (Deprec., etc.)
coo
_
1
$3d
$33.1
Equals: Retained Cash Disposable Income
Deduct: Investments in
Plant
Equipment
J7-4
n
r
While
we
are
observing
a
de-
cline in residential construction
contracts, we will be hearing
about plans for larger plant and
equipment expenditures by busi-
34
1.5
Total ...
Equals: Retained Cash Earnings Over Investment
NET FOREIGN INVESTMENT...
'
'
.
,
-
***
—11
3
0.1
—3.3
u
Government Purchase of Goods & Services
Federal
State and Local
o
$21.2
19.6
—
2U
—
Total
...
—-
.
Theoretical Assumptions
Production of Manufactured Goods (FRB Index)..
Price of Manufactured Goods (Index)
Productively Employed Workers
Average Hours Worked Per
Average Hourly Pay
Man-Hour Productivity
*42% rate.
t53% rate.
$75
$40.8
T
,
TOTAL GROSS NATIONAL PRODUCT...
-
-
* «
^7.1
Inventory
that an
.
m
10-0
Dividends
^
t$24
=^18 0
Less. Profits Tax
"
'■
.
rr„v
.
T
$3
«p
6
u
deter-
_9
-$9.0
—
Hesldent'al Construction (Includmg Farm)
mined
$12
Saving
Personal
Indicated Personal bavmg
be
along. But with
pattern in mind, we
laws
_
---
as
in the immediate future.
w
Endofinsi
Disposable Gross Nat'I
Product
tude of workers toward their jobs.
be felt the government. The latter sort
in the economy before the busi- of news is already beginning to
ness
capital
expenditures
and "break" in a semi-confidential.
higher defense expenditures have fashion and I feel sure that there
time to provide a full offset.
will be much more of the same
emphasize once
that I do not consider that
is anything very precise in
these projections.
It is my
SPENDING
Services
may
Perspective
.
serious
any
Non-Durable Goods
uge
give consideration to the durable goods lines, we will be
matter of timing; the decline in hearing
about some companies
consumers' durables and in resi- getting very large contracts from
Now, I want to
IIaux
.
„
does not
construction
„
Russia. The ber of the Exchange. Mr. Potter
of course, has been a partner in Stanley
Equals Disposable Income
Deduct: Personal Consumption Expenditures—
Durable Goods ......
interpretation of an
"interim dip" in business at this
point involves much more than
an appraisal of the effects of lower activity in the consumers' durable goods and residential construction industries.
While we are worrying about a
decline in some of the consumers'
dential
,
feT^y "stuld Heller & Co. and prior thereto was
be
Personal Income
plant tional Product is the effect that
to $11 the indicated trends will have on
also
with
war
emotional
Less Personal Taxes....
fewer types of a given commodity.
interesting to
observe that a $6 billion decline
in consumer expenditures for durables and another $6 billion decline for residential construction
could be nearly offset by an $11
billion increase in business expenditures for new plant and equipment.
This observation, however,
it is
fledged
in
Transfer Payments
business conditions in the immediate future.
It should be obvi-
think
nattprn snme-what would
development
^
Interest, Rent and Dividend Income——
recent years. the greater produc_
Nor, have I made
allowance for
billion, and government expenditures might increase $34 billion.
I
.
® llOSSl6f| N6W
NV^F Firm III flllM!
« I «t NHII 10 ll|IGII
Another contingency that might partners will be Philip Gossler
Individuals & Unincorporated Enterprise
(Receipts)
Compensation of Employees
$148.3
■ Proprietors Income (Farm and Unincorp. Business)
38.0
Worker productivity that
m'ght be expected to result from
ment in
In other words, PerShorter-Term Indications
Consumption Expenditures
Perhaps of more importance to
$21 billion, residential this diSCussion than the precision
construction could drop $6 billion, 0f these projections of Gross Na-
for
.
„
DaUai1 9 OaccIap
Income
rise
expenditures
-
—Third Quarter imo—
Disposable Gross Nai'l
year.
equipment could rise
part
re-
-
sonar
business
necessary
seem to be a
- everv economist's oninions All
bets are 0ff if Russia agrees to
OF DISPOSABLE INCOME AND
(Gross National Product
in Billions)
line
$60 billion, or 21% above the rate
indicated for the third quarter of
and
th^
ESTIMATED ANNUAL RATES
is developed by decisions, regula-
could
an
ti(£^?abo7force and pro
ductiVe facilitLs of the count™
operatLg at caoachv
country have been at any time in the
op®r^ng 1* c£cent history of the country.
I have not
of reasoning it
possible to increase
Gross National Product by about
this
of fact> the psychological reactions
made allowance for any improve-
the
seem
civilian
in
setback
the
should be in a position to fit each
this
near~war economy. As a matter
to the inflationary forces may
wel* be one
tbe mosi; important
variables in the whole outlook. In
my °Pinion, looking beyond the
next few months, the inflation potentials will be stronger than they
unlikely to me that
wjR be fully offset by
Total GNP
By
should be at least firm if not ris-
inS- The strength of inflation potentials would be even greater in
a war *ban *bey would be in a
definite period I have in mind
tben
t
neriod bevond o'ur
<«interim dip" k going to ■witness
dynamic and verv active condi
live with for
can
PPerafe- There is no elbowroom
prevail around the
end of next year.
would
vprv
trying to enlarge the size
we
Income In other words,
seems
the^expemhturesToulc? not tion that might be achieved by
SfqqiWv'
$40
billion
longer and continuous runs of
run
in
in-
that
* v
^k^heTesulTmav^^
.
th
FRr> fndpv and
that'
possibly
seems
a
0f over_an nroductive facilities so
that we mav have an economv
terial shortages and some confu-
Furthermore,
the
preliminary
estimates make no allowance for
the possible failure of labor to co-
;
rnclJdtaa
foreivn
e
esneciallv while
economv
we are
P
f
dit restrictions
maeftects 0± credit restnctions, ma-
als0 be in- made in the projections.
Government Expenditures
nhnut
aoout
h'
disruption
the same time, I don't see
wby tbere would be anything deflati°nary involved. Consumption
of raw materials and the employ™ent of labor would be at a very
bigb level- Commodity prices
Based on the foregoing line of disarnli to iet down the Iron
r-nb^with"an
' Curtain> and to Permit U-N- in"
we will have to cope with an un- spectators to examine her mili-
100%, adjustments will have to be
,
This
erS) and by
success
in
by higher prices.
it
now
should
more
raw
stimulatedI by. the
privilege of accelerated deprecia- tential shortages of this type are
tion, and under government pres- being recognized and that efforts
sure
to enlarge productive facil- are being made to remedy them
ities, it * seems quite reasonable by encouraging marginal producers'
•
e
cause
aenniie later. ^gual number of conflicting forces tary potentials. As I understand
Potter & Gossler> members of
^hen too, there is the matter of ln thf econ°my f°r tbe *^xt iew it that is the only condition under the New York Stock Exchange,
material bottlenecks.
I am montns.
This will be the real which we will abandon our own will be formed Dec. 15 with offices
impressed with the fact that powUl feel the adverse
substantial military program. ' . at 61 Broadway, New York City.
™
tribution of business to Gross Na-
tional. Product.
for
£igure
*
K*
*
that
me
acti
pen0<' 0
mearfingfui ad- th^^nterim'diD^
the .interim dip.
?D1f t0 maxe some meamngtui aa
after taxes would not
net earnings
and into the near-war
pattern that seems to be
^he prospect right
would
in it- the civilian segments of business
Looking beyond this transition
period
putting in during the next few
months, it is likely that the money
and credit factors will balance out
be changed When this uncertain- 0n the moderately deflationary
the
gets
program
jn the foreign situation
if any;- and>rfur-vtionaHactual information becomes
profits would be available. For example, we do no
stated after making allowance for know as yet how the tax laws will
ventory profits,
defense
way, and that factor
seif wri probably be influenced
somewhat by the degree of tension
this subject so that we mayigraip,The- raw material price deyet available and I have had to take into_ our current considera- flafron that is characteristic of reestimate
some
of these figures, tion the immediate effects of the cession^ in the
normal business
There •' probably
will
be
some impending
trends. Furthermore, cycle is likgly to be absent.
question as to why I have pro- as we proceed through the transiFrom a monetary viewpoint, the
jected "Corporation Earnings Be- tion toward a near-war economy, deflation—or at least the sharply,
fore Profits Taxes" at the same
I think that there will be a dis- retarded expansion — of personal
ievel as the figure indicated for tinct advantage in having before debt is likely to be offset partialthe third
quarter of this year, us this broad blueprint of an econ- ly by some expansion of corporate
namely, $45 billion. It must be re- omy that might be enlarged to a debt to cover capital expenditures
membered that the current figure sufficient extent to permit a cer- and to carry the expansion of inincludes a substantial inventory tain amount of "butter" in addi- ventories and payrolls that will be
profit which may or may not be tion to guns.
caused by higher prices and war
present around- the end, of-1951.~-*>We all realize, of course, that business. However, with the govMy projection of pretax corporate constant revisions will have to be ernment taking more money out
earnings would not1 include in- made in the projections as addi- 0f the economic stream than it is
third quarter of this year are
therniore
more com-
.
~
of
productive facilities to war
work would have to be
However, I am not inclined to plete. There would be less maUsed C?r market> we willof short- Place much emphasis onand dip of panding productive facilities. De¬
have to this character. Its depth a dura- terial and labor available for exrecognize an,.atmosphere
IUU
ment
some of
prices in the
m.
11
ages in. raw material markets as tion are likely to depend rather fense expenditures would mount
Ha KPaTmaiH0Ilt fcCOnOniVv^
^ar?
rSM^
heavily upon the speed with which more sharply and this, in itself,
,+vuptheirritiventories for military the
mi
-
until
31
Week...
r
,
214
199
61.3 Mil.
$344 +21%
$284.3
'
250 +17%
220 +10%
65.0 + 6%
+ 5%
+ 8%
No Gain
32
(2208)
The Commercial and Financial Chronicle
The following statistical tabulations
Indications of Current
Business
latest week
Activity-
week
or
month available.
or
month ended
on
*'•«!•«
.
.
Thursday, December 7, 195Q
production and other figures for the")
cover
Dates shown in first column
that date,
"
,
'0!
In
or,
of quotations,
cases
either for the
are
of that date:
are as
U
"**•
Latest
AMERICAN
STEEL
AND
IRON
INSTITUTE:
Week
Previous
Month
Year
Week
Ago
Ago
"
Indicated
steel operations
(percent of capacity)
Equivalent to—
ingots and castings
"
Dec. 10
.
100.5
,
81.7
103.0
(net
tons)—
Dec. 10
—
1,938,400
1,575,800
1,986,600
oil
Crude
and
condensate
output —daily
Gasoline
1,690,500
Residual
fuel
42
(in
short
oil
of
tons)—Month
aluminum
of
(short
August—
end
of
63,006
Aug.
5,887,870
5,882,400
Nov. 25
116,238,000
6,002,000
—Nov. 25
19,847,000
2,386.000
output
oil
output
Nov. 25
8,591,000
(bbls.)
(bbls.)
5,895,250
6,851,000
5,191,850
5,331,000
19,702,000
2,319,000
19,878,000
18,204,000
2,288,000
2,033,000
8,231,000
8,259,000
6,971,000
New
8,449,000
8,104,000
New
PERMIT
nonresidential
Nov. 25
8,470,000
*3,783,000
106,424,000
105,468,000
105,062,000
28,382,000
28,634,000
26,069,000
Nov. 25
86,768,000
87,117,000
84,057,000
91,795,000
Nov. 25
45,566,000
*45,600,000
44,310,000
67,087,000
TION
IN
—U.
URBAN
S.
DEPT.
September
All
AREAS
OF
OF
THE
U.
—
oil, and distillate fuel oil (bbls.) at
Residual
fuel oil
Revenue
OF
(bbls.)
at:_„——
AMERICAN
freight
Revenue
$1,088,854
of
*
(000's omitted):
building
construction
:
Additions,
—
256,222
loaded
RAILROADS:
(number
of
V
cars)
98,212
freight received from connections
(number
of
701,421
Nov. 25
642,159
cars)
837,065
Total
new
704,130
$2,806
$2,177
1,982
*2,071
construction
Additions
and
1,214
ENGINEERING
CONSTRUCTION
ENGINEERING
—
*1,195
alterations
86
RECORD:
r.<
i
'
"v~
(nonfarm)
construction
Public
State
and
municipal.—
OUTPUT
Nov. 30
$260,346,000
Nov. 30
———.1—Nov. 30
—
127,681,000
132,665,000
101,250,000
Nov. 30
31,415,000
——-—
——.—i———
—
——
—_
Bituminous
——Nov. 30
:—-
——
S.
BUREAU
and
coal
$235,119,000
142,919,000
92,200,000
$199,716,000
$219,G47,000
89,874,000
109,842,000
115,496,000
104,151,000
79,061,000
86,392,000
53,684,000
13,139,000
23,450,000
50,467,000
Warehouses, office
Stores,
Other
lignite
anthracite
Beehive coke
OF
loft
and
nonresidential
——-—Nov. 25
9,050,000
*11,845,000
11,650,000
13,030,000
Nov. 25
692,000
854,000
1,056,000
781,000
———.Nov. 25
133,600
♦149,100
157,400
11,500
319
368
313
330
—
—^—-—:—
—1—
recreational
Miscellaneous
Farm
i
.
29
STORE
TEM—1935-39
SALES
INDEX- -FEDERAL
RESERVE
.Nov, 25
Other
All
ELECTRIC
INSTITUTE:
(COMMERCIAL
AND
INDUSTRIAL)
—
&
6,716,273
6,507,509
6,550,615
5,742,915
Nov. 30
146
181
private
Other
IRON AGE
COMPOSITE
Finished steel
Pig
gross
Sewer
(per lb.)
Iron
(per
Scrap steel (per
METAL
PRICES
28
ton)———
gross
(E.
—-i—
M.
&
J.
3.837c
3.837c
3.837c
3.705c
$49.69
$49.36
$45.88
Conservation
$40.75
$40.67
$28.92
All
QUOTATIONS):
BUSINESS
24.200c
24.200c
S.
BOND
PRICES
Government
24.425c
24.425c
24.425c
DAILY
138.500c
121.000c
85.000c
17.000c
17.000c
COMMERCIAL
16.000c
12.000c
ERAL
15.800c
11.800c
As
Oct.
17.500c
of
31
SEED
5
101.34
101.56
101.40
104.23
5
115.24
115.43
115.24
115.43
5
119.41
119.61
121.04
Received
at
118.60
118.80
118.60
119.61
Crushed
(tons)
114.66
114.85
114.66
114.85
S'ncks
5
109.06
109.24
108.88
106.92
119.61
Average
5
111.44
109.60
Stocks
5
115.63
115.82
115.63
117.00
Produced
119.00
119.00
119.00
119.61
Shipped
111.44
Stocks
corporate
2.38
2.39
2.19
Produced
5
2.89
2.88
2.89
2.88
6,782
*6,277
6,877
$312,000
$286,000
$278,000
1,118,717
619,435
*599,914
1,382,294
*403,932
748,269
971,201
'471,919
1,574,820
YORK—
NEW
SEED
(tons)—
PROI)-
of
—
——
—_i
——
31
-
Oct,
31—
89,468,000
*63,370,000
123,462,000
194,584,000
*121,808,000
242,687,000
156,588,000
i
—
Oct.
31
*93,241,000
191,572,000
5
2.68
2.67
2.67
2.60
5
2.72
2.71
2.72
2.67
5
2.92
2.91
2.92
2.91
Produced
5
3.22
3.21
3.23
3.34
Shipped
.Dec.
5
.Dec.
5
2.87
2.86
2.87
2.80
.Dec.
5
2.70
2.70
2.70
2.67
3.09
3.07
3.09
3.19
Stocks
(tons)
Dec.
5
480.4
471.0
339.2
Oct.
181,234
228,399
.Nov. 25
228,706
237,895
.Nov. 25
240,123
100
103
104
Stocks
(tons)
Produced
Oct.
723,350
694,741
Nov. 25
671,985
—
31
(tons)
Oct.
334.030
315,194
96,794
*62,470
124,264
141,176
—
.
*93,436
174,448
*83,931
161,578
31.
"
Stocks
*72,009
186,970
226,922
*111,885
180,123
981
969
2,549
-
*132,329
188,590
——
;
89,772
206,353
1,451
1,781
2,537
199,368
374,086
639
1,367
(1,000-lb. bales)—
Oct.
31
-
Produced
Shipped
Stocks
1
140.6
AND
SPECIALISTS
EXCHANGE—SECURITIES
Odd-lot sales by dealers
Number
Number
of
of
Dollar
ON
EXCHANGE
THE
N.
Y.
Oct.
31
4.091
—
*2,645
Customers'
short
other
935,447
$37,324,115
$43,015,819
$30,614,497
31,053
23,798
36,075
28,507
Nov. 18
348
377
186
269
30,705
23,421
35,889
914,278
28,238
700,913
1,034.529
782,893
9,615
Nov. 18
Nov!
13,046
14,279
6,711
18
Znov.
901,232
686,634
18
1,027,818
$36,312,668
773,278
$25,626,727
$38,463,216
$28,598,905
279,210
199,740
340,410
278,910
Nov. 18
-
-Nov. is
Round-lot purchases
by dealers—
279Z2T6"
199,740
366,980
351,210
3T0Z416
2781910
Nov. is
SERIES—U.
S.
1926—100:
DEPT.
OF
324,180
284.410
LABOR—
28
185.7
184.9
179.7
156.0
172.6
171.5
167.0
222.1
162.3
219.8
28
223.9
187.8
178.2
177.5
Nov. 28
All commodities other
than faim. and foods
Textile products
lighting
and
metal
materials
products
Materials,
Chemical and
•Revised
151.5
174.0
157.9
243.1
240.6
239.8
211.2
Nov. 28
162.7
162.4
161.9
145.2
IIInov!
Meats
and
169.6
ZZZZZZZZZnov!
Livestock
Fuel
171.2
Nov. 28
Grains
171.7
28
Nov. 28
j,
Foods
Metals
allied
figure,
OF
products
*
IIII_IInov.
I__III
Nov!
I I
Nov.
III_I
Nov.
28
I"!—111—1111 Nov!
28
[Includes 481.000 barrels of
foreign crude
24,156,684
23,646,106
20,877,864
430,679,900
387,522,000
44,497,408
421,089,900
44,283,690
13,021.000
*12,794,000
11,770,000
of
—
Sept. 30__
PAYROLLS—U.
LABOR—REVISED
S.
DEPT.
42,342,680
SERIES—Month
>
of
September:
All
manufacturing
(production
workers)
Durable goods
Nondurable goods
7,024,000
All
6,062,000
*5,903,000
5,708,000
158.9
*156.2
143.7
403.6
manufacturing
*6,891,000
5,997,000
Employment indexes—
All
manufacturing
*393.9
335.1
15,442.000
14,312.000
Estimated number of
employees in manufac¬
turing industries—
manufacturing
15,687,000
Durable goods
Nondurable goods
8,435,000
SIZE
AND
IRONERS
AMERICAN
LAUNDRY
MANUFACTURERS'
TION)—Month of October:
VEHICLE
PLANTS
IN
FACTORY
U.
S.
28
166.2
166.6
163.6
28
135.4
135.4
135.5
130.0
180.6
180.4
179.7
167.3
218.4
Number
*218.1
219.3
189.6
Number
136.6
of
motor
*135.8
—
116.5
Number
of
motor
439.924
number
of
ASSOC.)— Month
passenger
runs.
♦Revised.
,
36,045
31,399
15,760
FROM
MANU¬
of
Oct.:
vehicles
of
333,728
41,400
28,882
coaches
FACTURERS'
Total
424,043
47,500
trucks
133.2
138.7
6,903,000
HOME
SALES
(AUTOMOBILE
28
7,409,000
*7,155,000
ASSOCIA¬
Factory sales of washers (units)
Factory sales of ironers (units)—
Factory sales of dryers (units)
MOTOR
*8.287,000
7,252,000
;
WASHERS
STANDARD
Nov
products
Building
consumers—
omitted)
customers—month
September
Number of ultimate customers at
HOUSEHOLD
commodities
Farm
ultimate
(000's
ultimate
All
shares
NEW
from
Payroll Indexes—
Nov. 18
sales
TRICES
Revenue
2,603
INSTITUTE:
Sept.
EMPLOYMENT AND
Nov. 18
Round-lot sales by dealers—
Number of shares—Total sales
All
$41,324,077
755,910
25,417
Nov. 18
-
total sales
sales
WHOLESALE
850,965
32,848
1,001,253
of
3,611
<
—
total sales
value
Number of
28,586
.-Nov. 18
sales
Customers'
31,998
Nov. 18
sales
(customers' sales)
Customers' short sales
Customers' other sales
Number of shares—Customers'
ELECTRIC
Month
Nov. 18
Number of orders—Customers'
*1,195
5,869
*2,264
1,923
Kilowatt-hour sales to
Nov. 18
total
3,369
EDISON
COMMISSION:
value
Short
124.5
(customers' purchases)—
shaies—Customers'
Other sales
138.4
STOCK
orders
Odd-lot purchases by dealers
Dollar
139.2
Produced
Shipped
DEALERS
1,842
Motes, grabbcts, etc. (1,000 pounds p—
INDEX—1926-36
Dec.
LOT
116,912
*180,934
*148,635
126,852
—
.
(tons)
Hull Fiber
90
*153,478
275,861
215,380
—-
(running bales)—
Stocks
164.709
r
129,424,000
213,959
—
;
Shipped
221,590
178,666,000
*116,937,000
31
(tons)—
Produced
.Nov. 25
125,176,000
*85,825,000
112,573,000
—
Hulls-
Linters
481.5
*73,621,000
143,075,000
(tons)
Shipped
ASSOCIATION:
107,144,000
—
(pounds)
(pounds) —
Cake and Meal—
Dec.
PRICE
OF
Consumption
Dec.
REPORTER
t
f
omitted)
—
(pounds)
2.40
Dec.
DRUG
8
&
(pounds)
5
.Dec.
AND
22
80
8
IN THE
(NEW)
(pounds)
.Dec.
,
Baa
PAINT
17
*82
8
COMMERCE—Month
Oct.
(pounds)
Dec.
Aaa
OIL,
15
74
Refined Oil—
DAILY AVERAGES:
Bonds
NATIONAL PAPERBOARD
56
Crude Oil—
5
111.31
mills
(tons)
.Dec.
YIELD
60
enterprises—
COTTON
OF
5
.Dec.
BOND
62
October:
5
.Dec.
Government
16
233
Cotton Seed—
-Dec.
.Dec.
S.
71
*17
310
———.
BANK
AND
.Dec.
U.
44
18
OUTSTANDING—FED¬
(000's
-Dec.
MOODY'S
11
9.750c
Itr-TP—QEPT.
Baa
43
BRADSTREET,
October—————
RESERVE
16.800c
17.500c
.Dec.
;
48
——
-
of
16.800c
-Dec.
Aaa
85
*39
development
PAPER
17.500c
AVERAGES:
Bonds
215
*22
*108
18.425c
146.000c
COTTON
corporate
*213
290
STATES—DUN
Nov. 29
U.
41
building
INCORPORATIONS
.Nov. 29
Average
7
671
*28
37
public-service
and
INC.—Month
18.200c
.Nov. 29
_Nov. 29
Lead
7
735
facilities-
public
UMTEI)
24.200c
.Nov. 29
MOODY'S
7
29
112
naval
Miscellaneous
$49.69
$40.75
29
40
230
217
water__—
.Nov. 28
Electrolytic copper—
29
43
713
.
other
30
228
—
;
and
and
11
25
.Nov. 28
ton)
12
104
.
.
Highways
PRICES:
22
40
—
nonresidential
Military
29
299
Industrial
223
24
22
106
Hospital and institutional
160
y'r-A
;•
226
building
Nonresidential building
BRAD
23
.
301
telegraph
utilities
construction
Educational
DUN
33
'
£8
—
Residential
2
FAILURES
public
other
Public
EDISON
112
-
28"
29
Telephone and
SYS-
AVER AGE—100
60
295
—
—
Railroad
DEPARTMENT
84
12
—,
utilities
63
24
.38
.
23
construction
Public
-
'
and
i6
264
*82'"'' V
29
Hospital and institutional
(tons)-—.—
*
■'
130
39
,
■y
"i
'
76
,
39
"
.
132
;
.•+
■y
740
•
*121
43
92
building
Religious
■■
*100
135
buildings-
garages—
Educational
MINES):
(tons)
(tons)——
and
restaurants
Social
(U.
Pennsylvania
,
\
——
construction
Federal
COAL
construction—
S.
U.
Private
•
17
351
111
-
Commercial
'
;•
*
'378
•
Total
832
<
*94
.
18
Nonresidential building
Industrial
NEWS-
1,506
*1,306
1,110 •
Nonhousekeeping
CIVIL
649,376
•
I
building (lionfarm)—
dwelling units
New
611,719
729,422
84,242
$2,695
etc
construction
664,555
887,607
114,651
473,129
alterations,
Residential
—Nov. 25
324,827
$726,433
424,219
217,972
BUILDING CONSTRUCTION—U. S. DEPT. OF
LABOR—Month of October (in millions):
Private
ASSOCIATION
48,411
S.
LABOR —Month
104,917,000
28,291,000
at
Finished
Gas,
52,001
15,529
VALUA¬
residential
refineries, at bulk terminals, in transit and in pipe linesand unfinished gasoline
tbbls.) at
Nov. 25
Kerosene
(bbls.)
at
—Nov. 25
Stocks
63,518
10,516
$827,563
tons)
BUILDING CONSTRUCTION
Nov. 25
—Nov. 25
output 'bbls.)
and distillate fuel
oil,
Gas,
of
——
(bbls.)
average
itbls.)
output
Kerosene
daily
—
(bbls.
average
.—
stills
to
runs
Ago
primary aluminum in the U. S.
INSTITUTE:
gallons each)
Crude
Year
Month
ALUMINUM (BUREAU OF MINES):
Stock
PETROLEUM
AMERICAN
> %>
Previous
Month
91.7
Production of
Steel
vi-.
Latest
760.529
488,176
105,562
85,201
545
1
573,699
616,827
108,815
..
722,812
651,169
cars
423
322
Number 4966
Volume 172
Continued from page
;
.
The Commercial and Financial Chronicle
;
(2209)
prices
3
of
yield
goods
consumer
of $14.2
will be
believe indirect controls alone
or
direct controls
alone
can
com¬
following table shows the
tional
pletely prevent a fall in the pur¬
chasing power of money. The best
taxes
$15 billion more revenue, personal
incomes
Economic Implications
01 Korean Crisis
devote
prudent to
little more
a
part of our output
toward increasing the productive
than the usual
capacity of the economy.
chasing
Putting about $33 billion of out¬
put
into replacing and ex¬
the productive capacity
country while spending
a year
panding
of
the
huge amounts on defense will re¬
quire some reduction in current
consumption. The extent to which
consumption will have to be re¬
duced will depend (1) upon the
(2)
the success of the coun¬
upon
total output
try in increasing the
the
of
and
of defense expenditures
size
how
fense.
Let
fiscal
take
us
tioned figure
tures
knows
one
must be spent on de¬
much
the
No
economy.
year
oft-men¬
an
namely that, for
—
expendi¬
1951-52
defense will have to be
on
at the rate of more than
$40 bil¬
present dollars. In the fol¬
lowing fiscal year defense expen¬
ditures will probably be larger.
Let us assume that the $40 billion
lion in
of expenditure
rate
The
product that can be achieved in
the next year will depend upon
in output per manhour
and the growth in the number of
the change
people at work. The normal in¬
in
output per manhour
seems to be about 2.5%. During a
crease
savings
quarter
nual
to
be
would
If
1950
of
rate
of
expenditures
the
the
at
were
$6.4
third
billion,
an-
addi-
.
puted on the basis of the assumptions indicated:
198.4
by the third quarter of
in
present prices— taxes that
of
terms
billion in case the larger rate
of national output were achieved
$5
and $12
rate
billion in
achieved.
were
the smaller
case
that
think
I
consumption
by the third quarter of 1951 will
the
needed
than to 2.5%. In
closer to 6%
be
event,
any
that
plain
is
it
maintenance of
vestment
in
drop
the
high rate of in¬
a
plant and equipment,
on
tures
defense,
on
can
be achieved
only by some reductions in con¬
sumption. In 1952, when defense
expenditures will undoubtedly be
running at well above $40 billion
a
year, the drop in consumption
will need to be greater than in
of
these
reducing
The
are
taxes
being levied. Some
have no effect in
expenditures,
corporate income tax, which
yields around $15 billion
is
example.
an
it
re-
at all,
expenditures
duces
it
re
duces outlays on plant,
inventories.
and
year,
a
as
Insofar
»
equipment,
Expenditures
on
tures on defense rise above $40
billion a year, however, the need
that
kind
1951.
be
not
must
cut
be absorbed entirely by
in
con¬
The
seem
the
the smaller decrease in consump¬
by industry, and when there are tion would not reduce personal
bound to be many shortages of
consumption quite to the level of
raw materials, the normal rise in
the second quarter of 1950.
But
output per manhour will probably needed reduction in consumer ex¬
The bond issues are undoubtedly
attractive to institutions with
fixed-dollar liabilities, but they
are not suited to the needs of individuals in a period of rising
prices-. The stock issues may not
be suitable for direct purchase by
individuals, but they do give investment trusts, which may give
increases
tax, the
yield of that tax would have to
be considerably more than dou-
there
Perhaps
achieved.
increase at all, and
no
a
surpris¬
small drop would not be
ing.
the
in
rise
considerable
A
penditures will not be easily ac¬
personal in¬
comes are rising. The advance in
consumer incomes is partly a re¬
sult of the increase in employ¬
complished
because
is prob¬ ment, partly
number of people at work
a result of the rise in
partly a result of the rise
unemployment
averaged
nearly in charges by the self-employed,
2.7 million — considerably above and
partly a result of dividend
both 1947 and 1948 when it was increases. By the third quarter of
2.1 million. It is unlikely that un¬ 1951, the annual rate of personal
1950,
able. In the third quarter of
will
be
the low levels of
the
employment
reduced
to
period,
war
wages,
incomes is likely to be at
least $25
billion above the third quarter of
the
yield
the
of
tax
small investor the diversification he needs, an opportunity
^ ®xPan<** The striking thing
about the stock issues is the smallness
their s*ze'
Nor does the government have
any security suitable for most in-
about
was
11% of all personal incomes. You
will
this
I believe, that
would be impracticable.
/
agree,
possible
One
the
with
and
way
problem
higher excise
of dealing
excessive
dividual investors in a period of
Prices. Money put into E
bonds is likely to lose purchasing
Power during the next year faster
taxes on
con-
Unless excise taxes
imposed,
however,
goods.
broadly
sumer
are
of
demand is through more
consumer
? "
redemption value of the
bond rises. During the last several
months, when the annual rate of
they will probably have little effeet in
discouraging spending—
they may simply divert spending
from
some
Personal
consumption expendiSU,J " y jumped over $13
Ex-
articles to others.
cise
taxes, of course, raise prices,
but
they
give
the
income
billion, the Treasury should have
been helping to hold down prices
from
the raise to the Treasury.
,,
■
..
,
.
a
further reduction of at least
normal
million is probable. The
labor
the
in
force
next
year
as
this. It ought to be possible,
how¬
ever, to raise the labor force, in¬
cluding the men in the armed
services, by about 1.1 million dur¬
ing the next year. This assumes
no
change in the proportion of
males under 65 years of age in the
labor force, but a rise in the pro¬
1950
and
incomes
personal
(assuming tax
taxes
rates
(at present rates)
taxes
and sav¬
women
of
44
to
64
same
rate as it did last year.
By
increasing the proportion of young
men
and
young
women
in the
labor
force,
increase
an
of
more
than 1.1 million could be achieved
in the next year.
If there is
an
expansion of
(including
em¬
the
armed
services) of 2.1 million during the
next year (1 million as the result
of a drop in unemployment and
ployment
1.1
million
as
the
result
of
the
the net national
viduajs
^
fits
bond
the
that satis-
when
needs
the
indi-
of
Treasury
should have been selling E
considerable
jn
it
under present conditions,
^me
a
a
because
bonds
sales
volume,
present prices by about $22 billion
$250 billion) to an annual rate of
tions
to
$29 billion
a
The task of
year.
$30 billion, or 12% of perincomes.
This would make
around
limiting expenditures on consumer
sonal
goods will be made more difficult
by the drop in the opportunity to
the
from
spend money on new housing.
wartime
increase
Some
in
the
present
industries and the higher taxes on
income.
corporate
The
needed
percentage increase in consumer
prices
will
depend
upon
the
change
in output
per
man-hour,
but it will need to yield additional
the
to
60%
to
above
income
1943
was
of
about
11.8%;
The
in
ratio
1944,
in
billion
below
Since
yielding
inflationary
into
thus
pres-
quarter
of
1950
and
buy goods. If out-
put per man-hour can be raised
sufficiently so that only a 2.5%
drop in the
consumption
physical volume of
by the third
occurs
the quarter of next
year,
the need for
con¬
them, such
is
that indirect
con¬
only the demand side
of the problem of inflation. They
fail
is
to
the
reach
just
side
cost
important
as
which
the
as
de¬
mand side. The
principal element
in the cost of production is wages.
Everyday,
however, large new
wage
increases
are
announced.
Many of the contracts provide for
hourly
manufacturing
cent; in 1948, by 8.1
per
cent.
per
Advancing
bound to
mean
labor
costs
are
higher prices be¬
inde¬
the price level is not
cause
pendent of the cost of producing
goods. Many people, it is true, be¬
lieve that
higher wages could be
of profits. In a few
absorbed out
cases
this is true. The rise in the
cost
of
inventories,
replacing
however, leaves most corporations
with fewer dollars than last year
available
for
increases, for
wage
and equipment,
and for dividends. Consequently,
plant
expanding
unless rising wages are
to
Next in importance to the
prob-
lem of increasing the productive
capacity of industry is the probof
subjected
kind of control, prices are
some
appreciably
increase
to
bound
during the next year or two.
In theory it would be possible
to
apply indirect controls so dras¬
tically that unions would be un¬
faster than
engineers can
raise output per manhour. This,
however, would require that de¬
mand
be limited sufficiently to
able to push up wages
the
and
managers
million
3
create
4 million un¬
or
employed. This would be a waste
of labor that the country could
not
tolerate, especially in a period
it is engaged in a produc¬
race with Russia.
when
tion
likewise
Direct controls are
un¬
entirely a drop in
purchasing power of the dol¬
able to prevent
the
lar. Under direct
controls the pur¬
chasing power of the dollar dropy
because there is a drop in quality,
because transactions shift to black
industry
quality
most de¬
because
and
markets,
fails to make the kind and
of goods
sire.
that consumers
Thus
consumers
are
com¬
pelled to spend their dollars on.
goods that do not quite fit their
needs. Direct .controls on wagey
are
likewise (difficult to enforca
in a sellers' market.
Employers
have
a
strong
in
"inequities" for various groups
worker
or
ot
joining with
asking
removals oJf
by
and
workers,
unions
temptation to evade
fictitious upgrading
them by a
by
consenting
oj£
to
working rules that in¬
earnings and, of course,
changes in
crease
labor costs.
controls nor
If neither indirect
■>
earn¬
increased
V
preventing or controlling
inflation. Here one encounters the
rather than to
5
VI
•
lem
vestment
a
trols attack
sures.
opportunities that have
a
strong
attraction, that make
them eager to invest in securities
goods by about $20.6
an annual
rate. If the
-
aggravating
when
individuals need to be offered in-
consumer
third
deem his bonds and to shift
goods, real estate, or stocks,
personal income tax
$30 billion a year
personal incomes are $250
billion a year would not close the
inflationary gap, it is plain that
increase
in
personal savings is
rates
even
physical output
1950, personal incomes after pres¬
ent taxes will exceed the supply
of
prices are likely to rise, he is
naturally inclined to sell or re-
that
1945, 12.2%.
a
consumer
6%
bilities. When the individual fears
11.4%;
goods is down about
the third quarter of
amount and if the
of
$15
by individuals rather than by in¬
gtitutions with fixed-dollar lia-
before taxes above the
necessary—particularly if the outyear. If prices of consumer goods put of consumer goods is down as
as
6%. This means
that
advance sufficiently to yield this much
revenues
was
and
amounts.
purchases in the three-
period August to October
over
$300 million. This ex-
perience illustrates the inflationary dangers in the present type of
Federal debt, at least when held
the
would raise
ratio of income tax payments
yield
wartime
in
50%
over
month
yield of the personal income
tax
growth of the labor force), no in-« billion as
crease in output per manhour and, physical output of consumer goods
is down by only 2.5% below the
no significant change in the length
of the work week,
factorily
bave
this
do
output of consumer goods at
the
prices of consumer goods will be
proportion of women between needed in order to offset the
14 and 44 years of age in the labor
higher
wages
that are
being
force, but it assumes that the pro¬ granted by the consumer goods
of
noj-
^oes
to
slumped and redemptions rose, so
the total excess of redemp-
the
portion
able
yield of the Federal personal income tax
(at personal incomes of
ings (at present rates) will exceed
portion of those 65 years of age
or more. It assumes no change in
years of age in the labor force
continues to increase at about the
selling
been
This would raise the total
posed.
individuals
bonds in
substantial quantities. It has not
by
...
Another way of dealing with
after
in ef¬ the problem is through a comincrease in the labor force be¬ fect after Oct. 1, 1950) about $17 bination of increases in the inabove.
If the output, of come tax and inducements to intween July, 1950 and July, 1951 billion
to
save.
Increases
in
would be about 600,000. This as¬ consumer goods is down by $5 dividuals
sumes that the same proportion of billion to $12 billion
(at present income tax rate yielding an addipopulation of working age will be prices),
personal incomes after tional $10 billion might be im-
but
a
trouble
tant
ings in
by 11.9
income
personal
indirect
of
out of work. In 1947
If the inflationary gap were to
IV
some
very
the
are
that
is
very
needed. In view of these facts, it
is startling that no arrangements
much if the country is to continue exist for making saving attractive
to expand its capacity at a good
to individuals, and for inducing
rate. As a matter of fact, I do not them to save on a large scale. The
believe that the corporate income new capital security issues brought
tax does reduce corporate profits out by corporations in the third
or
corporate expenditures appre- quarter of 1950 consisted of $647
ciably in a sellers' market—it en- million of bonds and $170 million
courages an increase in prices.
of stocks—nearly four-fifths bonds.
plant and equipment
and
around
for more personal savings will wage advances next year as welt
now.
With
rapidly
grow.
Furthermore,
in as
unemployment
order to keep prices from rising down to 1.9 million and destined
above the levels needed to com- to go lower next spring, unions
pensate for recent and current are likely to raise wages faster
wage and tax increases, some inl¬ than they did in 1947 and 1948",
mediate increase in savings is when about 2.1 million men were
bled. In fact, the yield of the tax
experienced
workers
into
the large in view of the fact that per¬
would have to be raised considerarmed services, and of workers sonal
consumption expenditures
from one plant to another, when are now running at the rate of ably higher in relation to personal
incomes than it was in 1943, 1944,
there
are
important changes in about $200 billion a year. Indeed,
or 1945, the peak war years, when
the kind of production turned out
be
201.4 to 208.4
6.4
consumer
cent
per
(perhaps
as
20.-3 to 13.6
1951 and
expenditures on industrial plant
Inflationary gap over and above 1950 vol¬
and equipment were kept at the
ume of saving
14.2 to
7.2
second quarter rate of 1950, the
This is a larger inflationary gap a large increase in savings will
physical volume of consumption
would need to drop about 2.5% than can be offset by higher taxes not be developed until after the
by
some
of the third quarter of 1951. As expendito 6% or by $5 billion to $12 bil¬ —particularly
lion
i»
the corporate income tax, ac¬
tually tend to bring about a rise
in prices. An even more impor¬
186.4 to 193.4
1950
saving
10
drop
One trouble with
trols
prices
above the third quarter of
lion
them
of
cent) in the years following.
per
Output of consumer goods yielding $15 bil¬
Personal
when there are abnormally
How can the needed cut in
shifts
of
inexperienced sumption be brought about?
workers into the labor force, of needed reduction may not
be
$250
222
204.7
expected
than
smaller
Output of consumer goods at third quarter
1950
be
can
they will keep the fall in the
purchasing power of money mod¬
erate. By "moderate" I mean a
drop in the purchasing power oj(
more
19fil
I__ $224.8
that
that
the dollar during the year
begin¬
ning with the Korean War of no
Inflationary gap
large
not
inflationary gap corn-
Disposable income
reached annual rate of $40
year
will
■
,u
,
slze
Personal income
defense
billion
on
in
1!>5)>
$16 billion.
nearly
-phe
—Third Quarter—
increase in the net national prod¬
uct
consumer
(in billions)
If output per manrise by 2.5%, the
power.
were
will
taxes
of
$17.2
to
SEASONALLY ADJUSTED ANNUAL RATES
present pur¬
is reached in together with substantial expendi¬
quarter of 1951.
increase in
the national
third
the
hour
of
dollars
present
output
goods by about $13.6 billion. Since
personal
would
of
savings
billion
on
needed.
after
the
rise between the
third quarter of 1950 and the third
quarter of 1951 by a little more
than 3.3%, or nearly $9 billion in
product
terms
Ill
billion
exceed
33
direct controls
some
alone will
rise in prices,
going to do? Perhaps
answer
prevent
what are wo
the frankest
shall do
is to say that we
schools "the best we can", using that ex¬
proponents of inpression in the colloquial rather
direct controls (cuts in government
spending,
higher taxes, than the literal sense. There wili
stricter terms of credit, and the be a mixture of direct and indi¬
encouragement of saving) and the rect controls. This will keep the
advocates of direct controls—ceilContinued on vaae 34
ings on prices and wages. I do not
controversy between two
of thought—the
34
The Commercial and Financial Chronicle
(2210)
Continued
from
Continued
C. W. Hall Opens
33
page
from first
Thursday, December 7, 1950
.
.
.
page
(Special to The Financial Chronicle)
Economic
PORTLAND, Oreg.—Charles W.
is engaging in the securities
Implications
rise
in
prices moderate,
but will
In
what
be
to
in
areas
direct
rents
there
are
likely
Certainly
controls?
likely to be controlled
communities.
Let
us
however, that controls in
are
many
hope,
this
field
will
be
fairly than they
Second
war
World
the
average
There
operated
more
during the
were
War and
Landlords
years.
to have their
the
post¬
entitled
are
prices rise by about
of all prices.
are
some
such
areas,
as
textiles, apparel, and meat where
direct
bonds.
controls
do
not
they do not come close to
working. Let us hope that they
will not again be
attempted. The
way to keep down prices in these
fields is to make it
highly attrac¬
he
way,
avoided
thinking about in¬
vestments, however, rests upon
implied assumption that the
price level would remain more or
less stable. In a rising price level,
however, the type of investments
that formerly gave the maximum
protection
to
principal
assures
loss of principal—because, though
the saver can get his dollars back,
he is
really interested in conserv¬
the purchasing power of his
principal.
But
is the
what
going to do? The
is not
economy
prepared to meet the
problems that confront him in an
era
of slowly rising prices. One
possible outlet for his savings is
tive for people to save. The mem¬
bers of the
community will then
decade there has been
get
and
of about 8 million in the number
otherwise
of owner-occupied dwelling units.
More than half of American fami¬
just
meat
be
clothing
would
obtained.
The clothing will
quality, the meat will
evenly distributed, and
better
a
be
they
as
have
much
as
more
the real prices will be less
ity
of
(qual¬
goods
home
lies,
ownership. During the last
—though
have
BOSTON, Mass.—Gordon Coogand Peter G. Estin have joined
an
the
staff
H.
of
Wainwright &
C.
the prices and incomes which
receive
the
of
supplies to civilians.
of
rate
would
the
York
and
Boston
Stock
be
Exchanges.
that
so
A
in
growth
ments.
New
economy,
no
general cuts would be required in
Co., 60 State Street, members of
Civilian
inevitable,
rearmament
adjust¬
sacrifices
in
and
would
some
there would
areas
rapid
very
necessitate sudden
nomic
eco¬
be
tem¬
unemployment and low¬
production.
The measures
porary
Joins Gibbs & Coe
ered
(Special to The Financial Chronicle)
taken
WORCESTER,
Mass. — Charles
joined the staff of
Gibbs & Coe, 507 Main Street.
H. LeMaitre has
facilitate
to
these
adjust¬
ments and to prevent them from
upsetting the economy are impor¬
tant.
The
Charles Lumaghi Joins
Merrill Lynch Staff
defense
program
for
poses
major economic problemsy-The first is to move quickly
toward
achieving adequate pro¬
(Special to The Financial
duction of material required for
Chronicl^
ST.
LOUIS,
Mo.—Charles
G. the arming and expansion of milLumaghi has joined the staff of itary, naval, and air forces, and
Merrill Lynch, Pierce, Fenner & for civilian defense.
Beane, 511 Locust Street.
formerly
with
He
Central
was
Republic
The
second
probIem
raised
program
Company.
is
homes
With Central
Republic
the
the
the
of
power
defense
total
whole
economy.
Production and the ca¬
pacity to produce are basic sources
(Special to The Financial Chronicle)
beginning of 1940, about $50 bil¬
by
economic
increase
to
productive
paid for. Since the
major
considered)
than
would be the real prices
paid un¬
der price ceilings. Up to the
pres¬
ent, however, as I have empha¬
sized, no real effort has been
farm
made
prospect that prices will continue
Maintaining a stable economy,
Building.
Mr. Johnson was pre- particularly price stability, is an
viously with Ellis, Holyoks & Co. immediately
urgent
and
im-
to
of Lincoln.
to persuade people to
Some kind of direct
will
wages
be
rise in prices is to
erate—unions
the
labor
leave
market
to
wages
if
of
the
be kept mod¬
too
are
save.
control
necessary
is
"strong and
too tight to
uncontrolled
col¬
lion
has
investment that these
have
controls. The best
arrange¬
ment
would
restraint
be
a
wage
between
agreement
the
unions
and the government. It would
not
need to be a wage
freeze—and, in
view of the absence of
price con¬
trols,'
it
should
be
not
a
wage
freeze.
For
example, it should
permit wages to be adjusted up¬
ward
the
as
out
come
cost
Union
vances.
of
living
members
better
under
ad¬
would
such
an
posits
in
investment
with
borrowed
ginning
of
1940
at
small
most
it will
need to
years
the
next
worsening
to
relations
increase
tures
on
that specializes
The small
need
part
three
or
Even if
with
Russia
the United
greatly
its
armaments,
would have been for
expendi¬
the
this
happens,
cannot
be
per
high
outlook
slowly rising
manhour.
when
the
even
the
prices of
stocks of well-
investment trusts, are
Perhaps the government
help meet the needs of the
without
a
able
in
fixed
a
of
that the long-run movement
price level will be upward.
Individual prices will
go counter
to the
general trend; there will be
periods when the general
movement of prices is downward.
short
of
the
time,
however,
the
price level will be rising.
#
The prospect of
rising
price
level
reconsider
about
ticular,
even a slowly
compels us to
accepted
investments
to
thinking
and,
reconsider
in
par¬
thinking
about the investment
problems of
savers.
It has always been
small
of
the
value
small
might be willing to put his
funds
in
rate of
return
for
a
low
very
interest.
In the
able to
that
assume
of the small
for
quidity
if
ing
loan shares,
or
or
high-grade
less satis¬
of
source
for
need
type
the
small
storehouse
A>rn
a
of
run,
value
the
very
precise
investor
an
as
i—i
the
New
York
will
not
on
I
.
a 1
best adapt himself to
economy
which has the pros¬
slowly rising price level.
plain, however, that in such
economy
the small investor
should
the
a
make
very
namely
bonds.
only limited use of
kind
of
investments
have
as
heretofore
most
•
f
LOS
has
associated
Co., Inc., 639
NEWARK,
curities
N.
is
J.
^
—
Francis
C.
^
engaging in
business
from
also
if
suitable
savings
,
se-
offices
•
'
H
Fact
^
rarv
;^ennger
Pioneer, En-,
Inc
been
for
accounts
re¬
him,
and
re-
of the
of the economy.
power
Despite substantial increases in
total production, which seem well
wlthin the Power of industry to
achieve, civilian supplies cannot
be
expected
and
to
are
show
increase.
We
the
possibility
Prospect
of
of
war
may
saw
Merely
the
and
large-scale
rearma-
ment brought a big bulge in
sumer buying,
con-
the
absence
of
and
after
World
War
II.
Fnr*ru»rl
rormea
Gerald.
A second method of forestalling
inflationary price rises is to pre¬
vent current incomes,
past sav¬
ings, and newly created credit
from being spent.
Controls
achieve
and
Frank Williams Opens
the
to
also
to
-
persuade-
people that it is in their in¬
the
and
more
save
public
interest
to
and spend less.
The third method of preventing;
inflationary price rises is by in¬
creasing "taxes. Higher taxes not-
supply
only
"businesses
*
superior
preventing
other,
to
inflation¬
rises in important re¬
price
ary
and
down
cut
spend.
is
of
methods
also.
persons
thus
and
Taxation
they
revenue,
WitfidTaw funds from
spects. It does not interfere with
the operation of market
does not present
inflation.
ture
forces. It
the threat of fu¬
distributes
It
the'
financial burden at the same time
the economic burden must inevit¬
ably be borne. It protects the men r
and women of the armed forces
unfairness
ironic
the
from
of
and coming home;
for it too.
fighting
to pay
a
war
is
Taxation
the
also
necessary
of
forms
foundation
for
other
It
has
sometimes
control.
been;
argued that price controls and.
wage controls are a substitute for,
taxation.
Quite the contrary is,
price controls, for exam-,
If
true.
pie,
— and they must ,
controls are to work
be¬
demand and supply at pre¬
to work
are
work if wage
there must be no large gap
—
tween
vailing prices.
problem of what to do in^
of the prospective de-;
The
the
face
fense
program
is largely
of
one
unpleasant alternatives. They are,,
course, not altogether alterna-;
tives. It will undoubtedly be ne-,
of
all-
to use in some degree
cessary
all the methods avail-,
fight inflation. It is im-!
nearly
or
to
understand
to
portant
that
taxes are raised the
necessary
it is to resort to
higher
in-
(Special to The Financial
They would
change
the distribution of wealth and incomes.
They would impair the
relative and absolute economic
positions of those persons and in-
Merto
Sims
own-
money
value.
assets
executive
rising.
If
geles
whether
at
labor
or
in
business,
agriculture,
government,- must
come^concerned*with
Co.,
634
ft "n if 3.
(Special to The Financial Chronicle)
LOS
E.
be-
preventing
ANGELES,
Mayer is
now
Calif.—Ralph
associated with-
Paine, Webber, Jackson & Curtis,
South
626
Spring Street. He was
with
Wagenseller
&
Durst, Inc., Turner & Poindexter
formerly
and
Nelson
Douglass
&
Co,
-
-
Now With Lester Co.
(Special to The Financial Chronicle)
-
we
want to stop inflation, each of us,
secu-
89
incomes
have;
Marache*
Paine, Webber Adds
branch of the Government, in the
own
with
South Spring.
the Los An¬
Stock Exchange.
*
of
„
the
William E. Pipal
connected
&
Street,- members of
stitutions which have relatively
fixed incomes
or
and
become
Chronicle)
Calif—Thomas-
LOS ANGELES,
crease the money cost of the de-
our
offices
help
Allocations
may also be used in
circumstances. It is
important
terest
effective as long as we insist on
r
PROVIDENCE, R. I.—Frank S.
Elmgrove Avenue.
result.
rationing
very
which we pay, shall not
rise. That is likely to be quite in-
a
credit
on
this
appropriate
prices,
in
be
prevent
controls.
,ILis-imperative, therefore, that
there* be - the strongest possible
Kuhner, Vollebregt and Gerald
engaging
to
In-
would
opened
offices
at
37
Wall
Congress, and by the public that
Street, New York City, to engage 'extensive inflationary price rises
in a securities business. Partners
shall
not
happen
again.
This
are Frederick M.
Kuhner, Petrus means a great deal more than reH. J. Vollebregt, and Lewis G.
solving that the other fellow's
is
is
from rising. This is theprincipal function performed by
price
controls,
including wage"
able
preventive
has
rities business from
first
the.
less,
mand would inevitably be price
the
increases. These price increases other, less desirable methods of ;
lead to a price spiral.
preventing inflation — up to the
Any large or continuing rise of point where taxes exceed their,
economic limits.
Pr*cea would be a major blow,
especially coming so soon on the
°f ll?.e p",?e /"creases clur- .Two With Marache Sims *
In
^resolve+ ,.within
Williams
there,
may
incomes
much in¬
likely to decrease.
expected to
fixed
Kuhner, Vollebregt &
Geralrl
oeraia
be
requireof defense production ex-r
fense effort.
*/r
er\gagln& in a se,cuJJ"
If I0?1
nrf y.ef'
terprises
1
Pouglas •¥*
>'ft
to
increased
flationary price rises
r\
mr*ui\/rmvTrt
have
may.
The
rises
j
at
Douglas Deringer Opens
TWintm»-
other goods which do
the
production,
price
,
a
355 North Thirteenth Street.
p.
checked.
regard
steps, the result of increased de¬
Exchanges.
F. C. D'Annunzio
D'Annunzio
with
Civilian demand, however,
Spring Street, members of
Angeles and San Fran-
Stock
many
voluntary restraint-
three general ways by which
are
Civilian sup-
materials.
goods
be
Los
cisco
rubber
that happen last summer.
Chronicle)
become
Akin-Lambert
South
the
Financial
ANGELES, Calif.—Dewey
Janney
with
to The
steel,
issued
been
duced
L
Joins Akin-Lambert
(Special
ne¬
It is
an
Stock
cer-
not compete directly with military
crease,
best
to how the small
main-
Allocation orders have
on.
few
a
productive
Exchange,
Sidney Fisher to partJan. 1.
will admit
nership
so
ceed *be rate of growth
x
New York City, members of
way,
aluminum,
copper,
ply of
^
William Fisher & Co., 120 Broad-
safe
can
pect of
^
William Fisher Admits
'
may
of
tainly have to be restricted, for
example,
commodities made of
to
investment
of
long
investor
The prob-
one
from
expanded
their ability to
of some commodities will
use
ments
117*11*
li¬
cessarily best satisfy his need for
liquidity. It is still too early to be
garded
savings bank, build¬
his
over
the
first importance, had best put his
a
or
..
.
essentially
already
Camp & Co.
Camp & Co., U. S. National Bank
prices would
investor—namely his
the
which
into
more
reliable
a
and
which,
give
&
Building.
was reason¬
storehouse of value. Now it looks
as
have
Kirchofer
? ?
C
'ePr?e JK*
has become affiliated with
pu
Elden
single type of in¬
a
vestment could
a
supply presents a twoproblem.
The non-military
fold
ing
days when it
remain stable,
thought that the small saver, to
whom security of principal was of
money
nnnmr
secure
need
Most
With
pur¬
a
■>,and
s^ronS civilian economy.
and
^
storehouse
saver
amount
Into such
power.
economy make it more
of the
Ellis
B.
of
Associates, Inc., Johnston
Building.
* *■
'iHp
investor by offering him a
non-negotiable savings bond pay¬
factorily meet the two basic needs
likely than
staff
small
chasing
t
power
'Civilian
Paul Tru-
Arnold
is likely to
saver
diversified
will
Emma
the
—
in
rise in prices. The
strong demand
for goods and the
tight labor mar¬
ket that will exist in the
defense
ever
joined
of his money in times
recession
stocks,
If
employment
maintained
of
and
man
not sensitive to
States Wwn.
When employment is
high, unions
will be able to raise
wages a little
faster than
managers are able to
output
If it does,
saver.
are
ness.
prices. The country is committed
to a policy of
high-level employ¬
ment, and it has strong unions.
increase
meet the
can
be the type of in¬
trust
extends
rate
two
immediately ahead.
had not forced
Perhaps
savers.
...
.
,
lenvMs
(Special to The Financial Chronicle)
rising prices. Unfortunately, indi¬
vidual corporate
issues are not
likely to be a suitable investment
need of the small
military
mensely difficult task.
.
(Special to The Financial Chronicle)
will
prices
-
.
CHARLOTTE, N. C
of
possible outlet for in¬
dividual savings are the stocks of
corporations. Earning of corpora¬
tions have, on the whole, made
good
records in
the period of
both
With Kirchofer oc Arnold taining a baiance between civilvvun ivircnorer &
/irnoia^1an SUpply and civilian demand.
the cyclical ups and down of busi¬
that
moderate
a
beyond
end
of
we.
rising.
inflationary
Farnam
.
Another
securities that
rise
made
—
the
and
vestment
vn
Company,
-
1949.*
drop in the quality of goods.
prospect
associated with Central
now
Republic
de¬
individ¬
ual non-farm mortgages increased
about $25 billion between the be¬
money
the investment trust
The
been
has
for
not
bank
Fortunately, for
home buyer a large part of
general price freeze they
get wage increases to
compensate them for the gradual
a
could
savers
savings
under
would
is
son
bonds.
or
arrangement than they would un¬
a general price freeze
because
der
the
made—distinctly better than
investment
the
wage
a
rise, this investment in houses
probably prove to be the best
the
satisfactory
—
view of
In
means.
OMAHA, Neb.—Harold B. John-
non-
will
difficult to
out
in
construction
large part of it by families
modest
lective bargaining. It will be
very
work
invested
residential
very
of
been
from
Aside
and
several
us
homes
own
these
of
many
not been
increase
an
"own" their
now
by increases in the total produc¬
tion
(Special to The Financial Chronicle)
investor
small
well
too
And Difficnlt Task
Wainwright Adds Two
risk to his principal. All of
the
ing
Stark.
west
this traditional
work—in¬
deed,
this
In
much
Stability—An Urgent
business from offices at 419 South¬
Of Korean Crisis
not prevent it.
Price
Hall
LOS
ANGELES, Calif.—William
B. MacLean is
Lester
now
affiliated with
&
Co., 621 South Spring
Street, members of the Los An-1
geles
Stock
Exchange.
Volume 172
Number 4966
.
.
The Commercial and
.
(2211)
Financial Chronicle
•
ADDITIONS
INDICATES
Securities Now in Registration
35
SINCE PREVIOUS ISSUE
\
'
Middletown, Ohio
$50,000 of 4% convertible
promissory notes and 50,000 shares of common stock
(latter to be reserved for conversion of notes on basis of 1
Aeronca
Oct.
2
Mfg. Corp.,
(letter of notification)
share for each
unit of notes.
$1 unit of notes). Price—$2.121A per $1
Underwriter—Greene & Ladd, Dayton. O.
Proceeds—For
working capital.
from the
to plan of recapital¬
amendment. Under¬
writer—Clement A. Evans & Co., Atlanta, Ga.
ization.
utility company pursuant
Price—To be supplied by
Circle
Wire
Cable Corp.
&
(12/14-15)
200,000 shares of common stock
27 filed
Nov.
(par $5).
share. Underwriter—Van Alstyne Noel
Corp., New York. Proceeds—To four selling stockholders.
Offering—Expected latter part of week of Dec. 11.
Price—$15
Office—Municipal Air¬
port, Middletown, O.
per
Duriron
Dayton, Ohio (12/13)
cumulative preferred stock
(par $25), with common stock purchase warrants at¬
tached for 40,000 shares of common stock, exercisable at
$16 per share through Dec. 1, 1960. Price—To be supplied
by amendment. Underwriter—Lee Higginson Corp., New
York. Proceeds—For payment of notes and for general
funds.
•
Hollywood, Calif.
80,000 shares of common stock. Price—At
Gold
Aihambra
Nov.
1 .filed
($1
par
share).
per
further development
.
Mines
Corp.,
Underwriters—Straus
—
Office—2340 Eighth
Consumers
Investment Co. of
American
10
offered
97,121
common
of
rate
filed
Mo.
$1,000,000 of 5-year 3V2% certificates of
indebtedness and $2,000,000 of 10-year 4J/2% certificates
of indebtedness to be offered to members of the Associa¬
tion and "to others."
Underwriter—None. Proceeds—
stock (par $1),
of record Nov.
stockholders
share for
one
Illinois
shares of common
20 shares owned;
each
29 at the
rights ex¬
filed
14
Business—Farmers' coop¬
association of the feder¬
type. Price—At 100 issuable in multiples of 100.
To be added to general funds.
Price—$17.50 per share. Un¬
derwriters—Kidder, Peabody & Co., Alex. Brown & Sons
and Glore, Forgan & Co.
Proceeds—To retire preferred
stock and for general corporate purposes. Statement ef¬
erative
fective Nov. 30.
stock.
pected to expire Dec.
Nov. 29
14.
ated
•
(by amendment).filed 91,583
shares of common
general funds. Business—Manufactures
Offering — Being made
Oil
Corp., Tulsa, Okla.
Price—At par ($5 per
stock.
tinental
Corp.', Tulsa, Okla.
and
Nov.
stock
•
..
stock.
Proceeds—For equipment and
Realty
300,000 shares of 6% cumulative
are
to be issued to underwriters as
5,400 shares.
Bros.
Co., Inc., New York. Proceeds — For working
Offering—Expected after Dec. 15.
&
capital.
Davison Chemical Corp.
Nov. 7 filed 128,533 shares
rigfrts to expire Dec. 12.
V.-,
Telephone & Telegraph Co.*
shares of common: stock now offered
record Nov. 22 on basis of one new
each five shares held; rights to expire on
Kidder, Peabody
Oct. 26 filed 20,825
Price—$25
per
share. Under¬
& Sons of Baltimore, Md., and
Co., New York.
Proceeds—For ex-
andJmprovement program. Statement effective
to stockholders of
for
rvV--r.
•
-
-Dow Chemical Co.: (1/3/51)
Nov. 10 filed-&&);000 shares of common stock (par $15),
Statement'of which a. maximum of 125,000 shares will be offered to
'
" iw common stockholders of record Dec. 21, 1950 at rate of 1
12. Price—At par-($100 per share). Underwriter—r
None.
Proceeds—To repay bank loans the proceeds ofv
Dec.
which
were
used for
effective Nov.
Central
construction program.
17.
Illinois
T
4
4
*
'
13 filed
Public
Service Corp.
267,600 shares of common stock
Temporarily postponed.
r
*
Illinois Public Service Corp.
of 2%% sinking fund debentures
1970. Underwriters — Issue awarded on Dec. 5 to
Central
'Nov. 13 filed ^6,000,000
due
Blyth & Co., Inc., Kidder, Peabody & Co., and Merrill
1 Lynch, Pierce, Fenner & Beane (jointly) on their bid
of 99.64. Price—To be reoffered at 100 and interest. Pro¬
Gas Co., Chattanooga, Tenn.
Nov. 24 filed 650,000 shares of common stock (par $1).
including 500,000 shares acquired by Equitable Securities
Corp. from Southern Natural Gas Co., and 150,000 shares
•
"
14
stock
Fidelity
Investment
Chattanooga
ing capital.
1
Inc.,
Associates,
Boston,
Massachusetts
shares of capital stock (par $5).
Proceeds—For investment.
Price
—
Ltd., Los Angeles, Calif.
Corp.,
Un¬
(12/14)]
100,000 shares of capital stock (par $2.50).
Underwriter—
Proceeds—To
employees' benefit funds established by
To be supplied by amendment.
Co., Los Angeles, Calif.
William R. Staats
of two
the company.
•
Globe-Union, Inc., Milwaukee, Wis.
28 (letter of notification) 30,000 shares of capital
Nov.
(par $5) to be sold to company's profit-sharing
employees' savings plan. Price — $18.50 per share.
general corporate purposes. Office—900
stock
and
Proceeds—For
E. Keefe Ave.,
Milwaukee
Oil
Lakes
&
i, Wis.
Chemical
Co.
(letter of notification) 284,616 shares of capital
stock of which 259,616 shares are offered to the stock¬
holders at rate of one share for each seven shares held
Oct.
26
expire on Dec. 11) and 25,000 shares
exercise of stock option held by
par
($1 per share). Under¬
writer—None. Proceeds—To develop certain oil and gas
lands.
Office
Michigan National Bank Bldg., Grand
Rapids 2, Mich.
Nov. 20 (rights to
on
be issued
to
are
Herbert
upon
Price—At
Herff.
—
Greenwich Gas
Sept. 1
Co., Greenwich, Conn.
(letter of notification) 8,000 shares of $1.50 pre¬
ferred stock
(no par) and 9,777 shares of common stock
(no par), to be offered first to stockholders. Price—Of
preferred, $25 per share, and common $10 per share.
Underwriter—F. L. Putnam & Co., Boston, Mass.
Pro¬
ceeds—To retire bank loan and for working capital.
Hamilton
Oct.
2
stock
Fire
Insurance
Co., Philadelphia
(letter of notification) 64,000 shares of capital
(par $5). Price—$4.50 per share. Underwriter—
Jenks, Kirkland & Co., Philadelphia, Pa. Proceeds—To
increase capital and surplus in order to offer additional
lines -of insurance, including automobile casualty and
Financing may be abandoned.
liability coverage.
Hammond
Lumber
Co.,
San
Francisco, Calif.
(letter of notification) 7,000 shares of capital
stock (par $20). Price—$42.50 per share. Underwriter—
None.
Proceeds — For working capital.
Office — 417
Nov.
17
Montgomery St., San
remaining 75,000 shares
to be offered for subscription by employees up to 10% of
their annual wages 011 a payroll deduction plan.
Both
offerings will terminal on Jan. 29, 1951 and are expected
to be made on Jan. 3, 1951.
Price—To be supplied by
amendment.
Underwriter—None. Proceeds—For work¬
Francisco, Calif.
Continued
on page
-
Drayer-Hanson, Inc., Los Angeles, Calif.
Oct. 3 (letter of notification) 255,033 shares of common
stock offered to stockholders on a pro rata basis; rights
expire Dec. 15, 1950.
Underwriter—None.
and for
Price—At par (40 cents per share).
Proceeds—To pay creditors' claims
Address—P. O. Box 2215, Los
working capital.
Angeles, Calif.
Duggan's Distillers Products Corp.
27 (letter of notification) 340,000 shares of com¬
stock (par 10c). Price—75 cents per share. Under¬
writer—Olds & Co., Jersey City, N. J. Proceeds—To pay
Oct.
ceeds—For construction program.
,
Co.,
'share for each 50 shares held, the
(par $10)
to be offered to common stockholders of record on or
about Nov. 17 at rate of one share for each 10 shares
held; rights to expire Dec. 12. Price—To be supplied by
amendment. Underwriters—The First Boston Corp. and
Blyth & Co., Inc. Proceeds—For construction program.
Nov.
Boston, Mass.
(letter of notification) 1,750 shares of common
(par $10). Price — At market (estimated at not
more than $10 per share).
Underwriter — H. C. Wainwright & Co., Boston, Mass. Proceeds—To two selling
stockholders. Office—210 South St., Boston, Mass.
Nov.
of common stock (par $1) be-
<ing offered to^common stockholders of record November
28 at-the rate of one share for each four shares held;
Carolina
share
each class of stock
additional compensa¬
There will be reserved for con¬
version of the preferred stock 1,300,000 shares of class B
common stock. Price—$6 per unit. Underwriter—Dansker
writers r—Alex. Brown
V
operating expenses.
& Securities Corp., N. Y. City
tion for resale to public.
(N. C.)
Oct. 2 (letter of notification) 100,000 shares of class B
(non-voting) common stock (par $1) offered to stock¬
holders on'basis of one share for each 2(£ shares held
on
Nov. 1;, rights expire on. Dec. 14. :, Price—$2.50 per
share.
Underwriter—None^ Proceeds—To retire 5*784
shares of preferred stock (cost $121,464) and to increase
—
purchase of El Monte plant.
has completed
Great
basis." An additional 25,000 shares of
Insurance Co.
-
Under¬
convertible
preferred stock (par $5) and 300,000 shares of class B
common
stock (par 35 cents) to be offered in units of
one preferred and one class B
share "on a best-efforts
Nov. 20 filed
Underwriter—Goodbody & Co. and/or John
New York. Proceeds—To Otto E. Kuhn,
Vice-President, the- selling stockholder.
Offering—To
commence on Jan. 24 with respect to 2,300 shares and
capital stock and surplus.
along with dividend rate. Underwriter—Smith, Barney
& Co., New York.
Proceeds—To pay promissory note,
to complete purchase of a new plant at El Monte, Calif.,
and for additional working capital.
Statement may be
withdrawn.
It was reported on Oct. 5 that company
Fluor
(letter of notification) 1,500 shares of preferred
Price—At par ($100 per share).
Underwriter—
Dansker
Inc.
21 (letter of notification) 7,700 shares of common
(par $1). Price—At market (estimated at $8.75
Casualty
Fedders-Quigan Corp.
June 21 filed 103,402 shares of series A cumulative con¬
vertible preferred stock (par $50) to be offered to com¬
mon
stockholders on basis of one preferred share for
each 12 shares held. Price—To be filed by amendment,
Inc., Tuscon, Ariz.
Daily Reporter,
None.
Mills,
-Carolina
Administration.
Electrification
derwriter—None.
Corp.,
share and to public at $6.25 per share.
Proceeds—For investments.
per
Nov. 22
Underwriter—None. Pro¬
insurance business. Office—221 No.
share).
Jan. 28 with respect to
10.
writer—None.
P. White & Co.,
on
($25 per share). Underwriter—None. Pro¬
equity to secure loan allocation by Rural
ceeds—For cash
Felters
Carrizozo. N. M.
Ind.
(letter of notification) 1,700 shares of common
stock to be offered to company's telephone subscribers.
trustees
$5
share).
per
Telephone Co., Corydon,
27
Nov. 24 filed
St., Birmingham, Ala.
Botany
par (50 cents per share).
Underwriter
Proceeds—For working capital. Address—P. O.
Chicago, ill.
Oct. 23 filed 132,182 shares of common stock (par $5),
of which 4,818 shares are to be offered to stockholders
and 127,364 shares to public. Price — To stockholders at
Birmingham (Ala.) Fire Insurance Co.
17 (letter of notification) 10,000 shares of common
stock to be offered to present common stockholders.
enlarge
M.
/Price—At
Culver
Oct.
21st
Eureka
Cooperative G.L.F. Holding Corp. Business—Farm co¬
operative. Statement effective Nov. 10.
and for working capital.
ceeds—To
•
Nov.
Sept. 28 filed 500,000 shares of common stock to be sold
to cooperative members. Price—At par ($5 per share).
Underwriter—None. Proceeds—To reduce obligation to
Proceeds—To purchase oil
by amendment. Underwriter—H. M. Byllesby & Co., Inc.,
Chicago, 111. Proceeds — For drilling and development
Price—At par ($10 per
N.
Cooperative Grange League Federation
Exchange, Inc., Ithaca, N. Y.
Big West Oil & Gas Co., Dallas, Tex.
Sept 5 filed $1,760,000 of 5% sinking fund debentures
due 1965 (convertible into common stock on basis of 200
shares for each $1,000 of debentures). Price—To be filed
expenses
notification) 600,000 shares of common
mill). Price—15 cents per share. Under¬
Proceeds—For working capital.
one
Nov. 29 filed 20,000
48,046 shares of capital
share). Underwriter—Con¬
properties.
gas
Carrizozo,
Co.,
(par
writer—None.
•
(letter of notification)
13
Kansas City, Mo.
Mining Co., Spokane, Wash.
Nov.
v
Atlantic
Lemhi
Property
holding and financing instrumentality for
G.L.F. Exchange, farm cooperative. Statement effective
sells thermal installation.
Nov.
Engineering
Cooperative G. L. F. Holding Corp.
Sept. 28 filed 25,000 shares of 4% cumulative preferred
stock to be sold to patrons of Grand League Federation
Exchange. Price—At par ($100 per share). Underwriter
—None.
Proceeds—To reduce bank debt.
Business—
_
today.
purchasing
(letter of notification) 490,000 shares of common
Box 56,
shares are offered by the
company and 39,320 shares by certain stockholders. Price
—$11.25 per share. Underwriter—Bacon, Whipple & Co.,
Chicago. 111. Proceeds—To company to retire notes and
and
Continental
—None.
stock (par $5)r of which 52,263
balance .added' to
wholesale
Nov. 29
Rock Wool Corp.
American
East
Price—At par
Ave., New York 27, N. Y.
Cooperative Association, Kansas*
City,
Nov.
Nov.
•
stock
on
Underwriter—None.
share.
Office—119-121 West 8th St.,
Nov. 15 (letter of
(no par) and 4,000 shares of 7% non-cumulative
preferred stock (par $10).
Price — $12.50 per share.
Underwriter
None.
Proceeds — For working capital.
the basis of 72/100ths of a
American Gas common stock for each Central
common
Sills, Fairman &
stock
116,662 shares of common stock (par $10),
to be offered in exchange for common stock of Central
Nov. 9 filed
Ohio
and
Proceeds—To reduce bank
Community Finance Corp., N. Y. City
Nov. 15 (letter of notification) 20,000 shares of common
a
share of
Blosser;
Co., Inc., Kansas City, Mo.
(letter of notification) 56,250 shares of common
Price—$2 per share. Underwriter—None.
Proceeds—For working capital.
Additional Issue—165,014 shares for exchange for stock of merged companies.
stock (no par).
loans.
Electric Co.
Light Co.
&
Dwinell
Nov. 27
(par $1), to be offered in units of $500 of de¬
10 shares of stock. Price—$500 per unit.
Harris; both of Chicago, 111.
share). Underwriter—Hemphill, Noyes, Graham, Parsons
& Co., New York.
Proceeds—To Charles R. Anthony,
Chairman of the Board, who is the selling stockholder.
Ohio Power &
(12/18)
and
bentures
(letter of notification) 62,000 shares of common
(par $1). Price—At market (about $1.121/fc per
American Gas &
stock
mon
Carnegie, Pa.
19
stock
Acceptance Corp.
$1,500,000 junior subordinated sinking fund
debentures due Dec. 1, 1958, and 30,000 shares of com¬
Nov. 20 filed
Underwriter—None. Proceeds—For
of mine and for working capital.
American Cladmetals Co.,
Oct.
Colonial
Co., Inc.,
Nov. 22 filed 40,000 shares of
mon
balance of
purchase price for building ($20,000) and for
working capital.
New York
Boston
Philadelphia
Pittsburgh
San Francisco
Private IVires to
all offices
Chicago
Cleveland
36
36
(2212)
Financial Chronicle
The Commercial and
Continued
from
page
35
'
./*
W'
:
in
"
.
Thursday, December 7, 1950
.
.
.
proposed new plant to be located east of the Rocky
Business—Manufacturer of gas and electric
heaters.
a
Mountains.
Hearn Department Stores, Inc., N. Y. City
Nov. 17 filed 40,000 shares of 5% cumulative convertible
NEW ISSUE CALENDAR
preferred stock, to be offered for subscription by com¬
mon stockholders on the basis of one preferred share for
each
shares of
seven
($25
December
Price—At par
stock held.
common
Honolulu
Preferred
Oil
December
present stockholders.
Wilcox-Gay Corp
Underwriter—Dean Witter &
excess
of
Co., San Francisco,
102%.
Wachob Bender
Corp., Omaha, Neb.
temporary loans.
Hub
December
Idaho
Miles
Preferred & Com.
Shoes, Inc
Price—
Common
Common
Corp., Ltd
St. Louis-San
(letter of notification) 40,000 shares of common
(par $1). Price—At current market (about $1.10
Noon
share). Underwriter—E. F. Hutton & Co., San Fran¬
cisco, Calif. Proceeds—To two selling stockholders.
Francisco Ry.
(EST)
Equip. Trust Ctfs.
December
Vitro
15,
1950
Manufacturing Co
Common
Idaho
Maryland Mines Corp.
Nov. 21 (letter of notification) 10,000 shares of common
fdock (par $1). Price—At market (approximately $1.10
jper share).
Underwriter — Walston, Hoffman & Good¬
win, San Francisco, Calif. Proceeds—To Siegfried Bech-
Colonial Acceptance Corp
Ihold, San Francisco, the selling stockholder.
Western Pacific RR.
Nov. 3
18,
common
p.m.
20,
(EST)
Bonds
initially offered to stockholders; unsubscribed
vertible
(12/11-16)
common
con¬
stock
(par $1). Price—$5 per share.
Underwriter—Sills, Fairman & Harris, Inc., Chicago, 111.
Proceeds—To pay off promissory notes and for
working
capital.
•
Lexington Trust Fund, New York
J)ec. 4 filed 500,000 shares of capital stock
(par 25 cents).
Brice—At net asset value, plus a
selling fee of approxi¬
mately 4.7%
Sponsor
General
January 3,
—
to
9.3%
(depending on size of purchase).
Funds, Inc., New York.
American
Trusteed
Distributor—Corporate Leaders
Sales
Co.
Pro¬
Lit
Brothers, Philadelphia, Pa.
Nov.
17
(letter of notification)
approximately 7,500
.shares of common stock or such
number, more or less,
which
shall not exceed $100,000 at the
aggregate sales
Price—Estimated at $13.25 per share. Underwriter
«—None, but one or more of following brokers may be
employed: Newburger & Co.; Hallowell &
Sulzberger;
Iteynolds & Co.; and Elkins Morris & Co. Proceeds—To
Bankers Securities Corp.,
Philadelphia, Pa.
price.
Lockheed Aircraft
Corp., Burbank, Calif.
Nov. 6 filed 33,875 shares of
capital stock (par $1) to be
offered officers and
employees who have been issued
«»tock options exercisable on Nov.
fJiare. Underwriter—None.
26, 1950. Price—$22
Proceeds—For general
porate purposes. Statement effective Nov. 29.
Lorain
Oct.
per
cor¬
Telephone Co.
5
(letter of notification) 2,830 shares of common
fitock (no par) offered to common
stockholders of record
Oct. 7 on a pro rata basis;
rights expire Dec. 15. Price—
$20 per share. Underwriter—None. Proceeds—For work¬
ing capital. Office—203 9th St., Lorain, Ohio.
Lucky Stores, Inc.
(12/12)
No>v. 15 filed 160,000 shares of common stock
(par $1.25).
Brice
To be supplied
by amendment. Underwriter—
Blair, Rollins & Co. Inc. Proceeds—For
working capital.
—
Lytton's, Henry C. Lytton &
Nov.
Price
17
filed
83,000 shares of
Co
Common
(par $1).
To be supplied by amendment.
Underwriter—Blunt Ellis & Simmons,
Chicago, 111. Proceeds—To the
executors of the estate of
—
Henry C. Lytton.
•
McCormick
Macy
(R. H.)
&
Co., Inc
(12/20)
of
offering. Underwriter—Lehman Brothers.
I'o selling stockholders.
Proceeds—
voting
Magnolia Lead & Oil Co., Salt Lake
City, Utah
Nov. 29 (letter of
notification) 200,000 shares of non¬
common
stock.
chare).
Price—At
par
(10
cents
—
'
Mascot Mines, Inc.,
Kellogg, Ida.
Oct. 27 (letter of notification)
400,000 shares of capital
ctock. Price—37 V2 cents per share.
Underwriter—Stand¬
Corp., Spokane, Wash. Proceeds—To pur¬
chase controlling interest in Pine
Creek Lead-Zinc Min¬
ing Co., for development costs and working capital.
Baltimore, Md.
the
common
share).
(no par) and 4,590 shares of voting
Price—The preferred at par and
stock (no par).
the
at
market
Underwriter
capital.
(approximately
None.
—
$22
Proceeds—For
per
working
be
to
basis of
one
share for each 15 shares
plant replacement fund for construction
Office—414 Light St., Baltimore 2, Md.
McCoy-Couch Furniture Mfg. Co., Benton, Ark.
Oct. 16 (letter of notification) 12,000 shares of common
stock.
Price—At par ($25 per share).
Underwriter—
None.
Proceeds
working capital.
—
To repay
RFC loan and to increase
Address—P. O. Box 312, Benton, Ark.
Mercantile Acceptance Corp. of California
(letter of notification) 1,395 shares of first pre¬
ferred stock, 5% series.
Price—At par ($20 per share).
Underwriter—Guardian Securities Corp. of San Fran¬
Oct. 5
cisco.
Proceeds—For
corporate
Office—333
purposes.
Oct.
Duplicator Co.
(letter of notification)
31
Price—At
Proceeds
•
Mercantile
($100
to be offered to
Nov. 27
subscribed
vidual
Keene, N. H.
19,500 shares of
(letter of notification)
(par $5)
record
common
per
—
Office—2000 Russ
Nov. 10
shares of
3,000
share). Underwriter—
To operate manufacturing
business.
Bldg., San Francisco, Calif.
par
on
shares
basis of
share for each
one
(EST)
noon
common
stockholders of
common
on
11
shares
Dec. 11.
Un¬
be later subscribed for by indi¬
Price—$15 per share. Underwriter
may
stockholders.
Proceeds—For
Office—19 Fed¬
working capital.
Street, Keene, N. H.
Pennsylvania Power & Light Coji
filed 475,409 shares of common stock (no par),
being offered to common stockholders of record Nov. 28
Nov. 9
on
one-for-seven
a
privilege;
rights
to
basis,
with
expire
an
Dec.
on
oversubscription
Unsubscribed
13.
shares
also
share.
Underwriters—The First Boston Corp., New York,
to
offered
be
to
employees.
Co., Philadelphia, Pa.
Price—$23
Proceeds—For
per
con¬
struction program. Statement effective Nov. 28.
Pennsylvania Salt Manufacturing Co.
Nov.
to
on
15 filed
be
124,879 shares of
offered to
basis of
one
common
will expire on Dec. 22.
ment.
seven
of
(par $10)
record
Dec.
6
shares held; rights
Price—To be supplied by amend¬
Underwriter—None.
and expansion of plant
stock
common
stockholders
share for each
Proceeds—For
improvement
facilities.
Pig'n Whistle Corp., Los Angeles, Calif.
(letter of notification) 4,000 shares of $2
Nov. 10
cumu¬
lative convertible
Montgomery Street, San Francisco, Calif.
Dec. 1 (letter of
;-
:
Niagara
and Drexel &
Acceptance Corp. of California
notification) 492 shares of first preferred
stock, 5% series (par $20) to be offered as a bonus to
employees only. Office—333 Montgomery St., San Fran¬
cisco, Calif.
prior preferred stock (par $7.50). Price
—$8 per share. Underwriter—Fewel & Co., Los Angeles,
Calif. Proceeds—To Steven Kormondy, the selling stock¬
holder. Office—945 Venice Boulevard, Los Angeles, Calif,
It is understood no general public offering is planned.
•
Pillo-Pak Management Corp., Providence, R. I,
1
(letter of notification) $220,000 of 5% 10-year
Dec.
Metropolitan Edison Co. (12/12)
Nov. 7 filed $5,250,900 of first mortgage bonds due Dec.
1, 1980, and 20,000 shares of cumulative preferred stock
(par $100). Underwriters—To be determined by com¬
petitive bidding. Probable bidders: (1) For bonds: Halsey, Stuart & Co. Inc.; First Boston Corp.; Carl M. Loeb,
Rhoades & Co.; Drexel &
Co.;-Kidder, Peabody & Co.;
White, Weld & Co. and Equitable Securities Corp. (joint¬
ly); Harriman Ripley & Co. and Union Securities Corp.
(jointly). (2) For preferred: Drexel & Co.; Smith Barney
& Co. and Goldman, Sachs & Co.
(jointly); Carl M. Loeb,
Rhoades & Co.; Glore, Forgan & Co, and W. C.
Langley
& Co.
(jointly)^First Boston Corp.; Harriman Ripley &
Co., Inc. and Union Securities Corp. (jointly). Proceeds—
From the sale of the aforementioned
securities and from
the sale to General Public Utilities
com¬
shares will be used as follows:
$1,247,500 to retire
York Haven Water & Power Co.
50-year 5% gold bonds
due June 1, 1951, and for construction
program.
To be received by the
company at 67 Broad
up
to
noon
(EST)
on
Bids—
Street, New
Dec. 12. Statement ef¬
fective Nov. 29.
Feb.
Middlesex Water Co.,
Newark, N. J.
9 (letter of
notification) 5,200 shares of
on
a
Co.
to common
one-for-five
basis.
stockholders at $50 per share
Underwriter—Clark, Dodge &
Indefinitely postponed.
Miles
Nov.
20
Shoes, Inc., New York City
filed
Price—To
be
77,400
shares of
supplied
common
and
stock
common
at
par.
aging material.
Providence
Nov.
10
Washington
Insurance Co.
filed
80,000 shares of cumulative convertible
stock
(par $10) being- offered to common
preferred
stockholders of record Dec. 4
share for each five
pire Dec.
common
Price
19.
—
on
basis of
shares
$52
per
one
preferred
held; rights will
share.
ex¬
Underwriters—
The First Boston Corp. and Wood, Struthers & Co., both
of
New York, and Brown, Lisle & Marshall of Provi¬
dence, R. I. Proceeds—To be added to general funds.
Ramie Products Corp.
Sept. 21 (letter of notification) 25,000 shares of common
stock
(par $1).
Price—$3 per share.
UnderwriterSmith, Talbott & Sharpe, Pittsburgh, Pa.
Proceeds—
For purchase of additional machinery and equipment and
working capital.
Office—507 Liberty Avenue, Pitts¬
burgh 22, Pa.
Rohm & Haas Co.,
Philadelphia, Pa.
(letter of notification) 900 shares of 4% preferred
stock series A (par $100). Price — At market price on
New
York
Stock
amendment.
Underwriter—
Wertheim & Co. and Lehman Brothers. Proceeds—To two
selling stockholders.
Underwriter—None.
Pro¬
Haas, Chairman and President, the sell¬
ing stockholder. Office — 222 W. Washington Square,
Philadelphia, Pa.
Schick
(par $1).
by
Exchange.
ceeds—To Otto
(12/13)
stock
the
(par $20),
$100 each
Underwriter—None.
Proceeds—To purchase certain patents of moulded pack¬
•
Proceeds—To pay notes and for additional
working
capital.
debentures and 3,750 shares of common stock
Price—The debentures in denominations of
Dec. 5
common
per
Underwriter—Cromer Brokerage Co., Salt Lake
City, Utah. Proceeds
For acquisition of
property and
for working capital.
Office—328 Atlas Bldg., Salt Lake
City.
ard Securities
Co., Inc.,
common stock
common
stock offered
•
assessable
&
Nov. 22 (letter of notification) 1,000 shares of 5% cumu¬
lative preferred stock (par $100), 4,500 shares of non¬
York, N. Y.,
Dec. 1 filed 111,692 shares of common stock
(no par).
price—To be related to the
existing market price at time
—To reimburse
eral
mon
stock
$25),
on
held; rights to expire at 12
1951
Corp. of 24,220
Co.
common
(par
Oct. 20
—None.
ceeds—For investment.
•
Common
filed
Kaye-Halbert Corp.
Light Co.
17,717 4/5 shares of com-?
offered to stockholders of
held; warrants evidence right to subscribe during period
Dec. 5 to Dec. 20. New England Gas and Electric Asso¬
ciation owning 97.37% of outstanding stock has agreed to
purchase 17,254.2 shares and all unsubscribed shares.
Price—$67.50 per share. Underwriter—None. Proceeds
stock
Investors
Oct. 6 by amendment filed 120,000 shares of class A
Edison
&
Peerless Casualty Co.,
Common
Dow Chemical
Management Fund, Inc., New York
100,000 shares of capital stock (par $1).
Underwriter—None. Proceeds—For investment.
Gas
(letter of notification)
stock
record
1950
Honolulu Oil Corp
8t., Boston, Mass.
29
New Bedford
None.
1950
IVfacy (R. H.) & Co., Inc.
•
operating capital, and to complete purchase of tools, dies
Office—1000 Grey
and inventory from Kurtis-Kraft, Inc.
Ave., Evanston, 111.
stock.
19,
Co., 1
•shares to public. Price—At par ($1 per share). Under¬
writer—None. Proceeds—To finance the purchase of 100
Automatic
coffee-roasting machines.
Office—84 State
Nov.
of 20 individuals.
group
1950
Debs. & Common
December
December
207,000 shares of
to be sold to a
share. Underwriter—None. Proceeds—For
per
expenses.
December
Roast, Inc., Boston, Mass.
(letter of notification)
*;tock to be
Co., Evanston, III.
(no par)
mon
Circle Wire & Cable Corp
r>er
Infra
stock
Nov. 28
14, 1950
Fluor
Proceeds—For working capital.
Car
Nov. 29 (letter of notification) 300,000 shares of common
•
Maryland Mines Corp.
|
Muntz
Common
December
3
ctock
1950
13,
Duriron Co., Inc
*
Loan
share.
•
Price—$l
Proceeds—To retire
cumulative convertible preferred stock (par $2).
Nov.
(EST)_Pfd. & Bonds
noon
.-Common
Co., Jersey City, N. J.
Gept. 18 (letter of notification) 100,000 shares of 18 cents
per
,
Common
Schick, Inc
Underwriter—
•
Co.
Nov. 28.
12, 1950
Lucky Stores, Inc
Metropolitan Edison Co.,
.od
Power
Sept. 25 filed $10,000,000 of 25-year sinking fund deben¬
tures due Get. 1, 1975. Underwriters—To be determined
by competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; Blyth & Co.; Union Securities Corp.; Merrill
Lynch, Pierce, Fenner & Beane; Kidder, Peabody & Co.
and Smith, Barney & Co. (jointly); White, Weld & Co.;
Lehman Brothers. Proceeds—To repay bank loans and
for expansion and extension of gas and electric proper¬
ties.
Withdrawal
Registration statement withdrawn
—
Hooper Telephone Co., Hooper, Neb.
Aug. 18 (letter of notification) $30,000 of 3%% bonds
Price—In
Common
December
Proceeds—To selling stockholders.
1970.
Common
Price—To be filed by amend¬
Calif.
due
Common
Webster-Chicago Corp
(12/20)
capital stock to be offered
Corp.
11, 1950
Kaye-Halbert Corp
1 filed 120,000 shares of
ment.
$3
Montana
1950
per
Dec.
to
10,
Spray, Inc.
share). Underwriter—None. Proceeds — From
this offering, plus a $2,000,000 term bank loan, to be used
lo repay bank loans, for improvements to properties and
for working capital.
®
water and space
Stamford, Conn. (12/12)
shares of common stock (par $1).
supplied by amendment (probably about
Inc.,
Nov. 20 filed 243,000
Price—To
be
$11.50 per share).
Underwriter—Merrill Lynch, Pierce,
Proceeds—To certain mem¬
Fenner & Beane, New York.
Appliance Corp., Hawthorne, Calif.
July 24 filed 50,000 shares of 6% cumulative convertible
bers of the Schick family.
preferred stock. Price—At par ($20 per share). Under¬
writer—Lester & Co., Los Angeles* Calif. Proceeds^-To
Dec. 5 filed 23,529 shares of common stock (no par) to
be offered to employees of the company under its "Em¬
Mission
,,
retire bank loans and install
machinery and equipment
•
Scott
Paper Co., Chester, Pa.
ployees' Stock Purchase Plan for 1951."
The
company
Number 4966
Volume 172
.
.
Facsimile
maximum of 5,000 memberships in the plan
any eligible employee may subscribe for
amount up to but not exceeding 10% of his weekly
a
earnings.
City, Okla. April 27 (letter of notification) 225,782 shares of class A
stock (par 50c). Price—$1.25 per share. Underwriter—
Genesee Valley Securities Co., Rochester, N. Y.
Pro¬
ceeds—To acquire properties and for working capital.
S«neca Oil Co., Oklahoma
'.»V
'i
'
j
r
'
t
•ijSouth
■ -
■
State
Mines
Uranium
share).
per
Martin of Toronto.
Proceeds—For commissions, explora¬
tion and development expenses,
and working capital.
•
South West Box Co., Keokuk, Iowa
Nov.' 27 (letter of notification) $200,000 10-year 6% sub¬
ordinated instalment debenture bonds. Price—To be sold
multiples of $100 plus accrued interest. Underwriter
—None. Proceeds—For corrugated machine.
in
Southeastern
Co., Tallahassee,
Telephone
Fla.
notification) 10,000 shares of common
stock (par $10). Price—$11.25 per share. Underwriter—
Wagner, Reid & Ebinger, Louisville, Ky. Proceeds—For
Nov. 20 (letter of
construction and improvement.
Discount Co., Atlanta,
Southern
Nov.
Ga.
30,000 shares of common
Price—At par ($10 per share).
Underwriter—
Proceeds—To purchase stock in Southern Fire &
stock.
None.
Marine
Insurance
Co.
•
reduce
to
and
Office—79
debt.
East Orange, N. J. (12/10)
notification) 2,500 shares of 7% cumu¬
lative preferred stock. Price—At par ($10 per share).
Inc.,
Spray,
Nov. 29 (letter of
Proceeds—To be used
Underwriter—None.
capital for expansion of business.
East
Office—519 Main St.,
Engineering & Manufacturing Co., Inc.
notification) unspecified number of
shares of common stock (par $1) to amount to $100,000
at
(letter of
market
current
per
$6
Price—Estimated at $5 to
value.
Underwriter
share.
None.
—
Proceeds
To H. L.
—
Howard and Robert McCulloch, officials of the company.
Illinois
Texas
Natural
Gas
Pipeline
Co.
300,000 shares of common stock (par $1),
to be offered to common stockholders of record Dec. 8
on
the basis of
new
one
share for each 7% shares held.
(Peoples Gas Light & Coke Co. owner of more than 50%
of outstanding common stock will subscribe for its pro¬
portionate share of new stock, plus any other unsub¬
Rights will expire on Dec. 28.
Price—
Electric Co.
estimated that about financing to the
$2,000,000 will be required in connection with
its construction expenditures from Sept. 1, 1950 through
18
company
which will amount to $6,898,000.
Dec. 31, 1951
of
indebtedness, consisting of a $3,000,QQ0 first
mortgage to mature serially and a $3,000,000 second
mortgage to mature on Sept. 30, 1957. Proceeds—To re¬
mortgage
bank loans.
fund $6,000,000
Capital
common
Plastics,
stockholders of Rochester Button Co.
subscribe for 131,025
of
share
one
Inc.
shares of capital stock
rights to
the basis
on
capital stock for each present share of
of
held
Rochester Button stock
of record Dec. 18, 1950;
as
Rochester Button
Co., which
are
engaged in plastic oper¬
Offering—Rights expected to be mailed early in
ations.
1951.
January,
Power &
Carolina
Nov. 20 it
Vitro Manufacturing
(letter of notification) 30,000 shares of common
stock (par $1) to be offered to common stockholders of
record Dec.
15
on
basis of
one
share for each 5.64
new
shares held; rights to expire Jan. 2. Price—$10 per share.
Underwriter—None. Proceeds—For initial working capi¬
tal
Chemicacl
Vitro
of
Co.,
formed in December, 1950, to
Inc.,
a
subsidiary,
acquire and operate
be
to
a
plant
000,000 of new bonds. Previous debt financing placed
privately. If competitive, probable bidders are: Halsey,
Stuart & Co. Inc.; W. C. Langley & Co. and First Boston
(jointly); Kidder, Peabody & Co. and Merrill
Pierce, Fenner & Beane
(jointly); Lehman
Brothers; Equitable Securities Corp.
Proceeds will be
used for expansion program.
Carpenter Steel Co.
Oct.
voted
stockholders
30
increase
to
the
authorized
stock, par $5, from 500,000 shares to
common
1,000,000
presently 396,000 shares outstanding).
The management has no present plans to issue any addi¬
tional common stock.
Traditional underwriters: F. S.
shares
(there
&
Central
Inc.,
Wallace,
Idaho
Price—31 cents per share. Under¬
Hogle & Co., Spokane, Wash.' Proceeds—
For initial working capital for ore development. Address
—c/o H. J. Hull & Sons, Wallace, Idaho.
(par 20 cents).
writer—J.
A.
Corp.
Webster-Chicago
Nov.
(12/11-16)
103,158 shares of common stock (par $1).
Price—To be supplied by amendment. Underwriter—F.
Eberstadt & Co., Inc., New York, and
Shillinglaw, Bolger
Chicago. Proceeds—To finance acquisition of plant
site and for construction.
Offering—Expected week of
& Co.,
Co.; Hemphill, Noyes,
White, Weld &
Co.;
Hudson Gas
Power
Co.
stockholders of International
Hydro-Electric System asked SEC to order B. A. Brickley, trustee, to sell sufficient Gatineau common stock
to pay off a $9,000,000 bank loan. Probable underwriters:
Merrill Lynch, Pierce, Fenner & Beane; Kidder, Peabody
& Co. and Harriman Ripley & Co. SEC dismissed appli¬
27,
cation
preferred
the
Nov. 13.
on
Kaiser Aluminum
Oct.
27
it
Chemical Corp.
&
reported
was
plans new financing
Probable underwriter: The*
company
Kansas
Gas
&
Electric
I
Co.
$5,000,000
first mortgage bonds, which had tentatively been sched¬
uled for Nov. 27, has now been deferred, probably until
1951. Underwriters
To be determined by competitive*
bidding.
Probable bidders: Halsey, Stuart & Co. Inc.;
Oct. 10 it
announced that proposed sale of
was
—
Securities
Union
Corp.; Merrill Lynch, Pierce, Fenney
Kidder, Peabody & Co. (jointly). Proceeds*
& Beane and
—For construction
was
program.
reported company is considering refunding
(held privately by a group of insurance com¬
1970
due
panies) and $5,000,000 of first mortgage 3Ys % bonds du<^
1978.
•
(See also accompanying item).
LaCrosse
it
4
Dec.
was
Telephone Corp.
reported that 55,500 additional shares of
would be publicly offered to
Price—$11 per share, less a
discount of 60 cents per share to Wisconsin security deal¬
ers.
Underwriters—Loewi & Co., Milwaukee, and Bell &
stock
(par
$10)
Farrell, Inc., Madison, Wis. Proceeds—To repay advancej
from Central Telephone Co., the parent.
Offering—Ex¬
pected this week.
Lone
Steel Corp.
Star
reported that company may issue and sell
additional securities should it receive government con¬
Nov. 12, it was
sent
the
to
a new plant.
Probable under¬
Blosser; Estabrook & Co., and Dallas
building of
Straus &
writers:
Rupee & Son.
Electric Corp.
&
r
.
company
Probable bid¬
Hutzler.
petitive probable bidders may include The First Boston
Corp.; Harriman Ripley & Co., Inc.; Glore, Forgan & Co*
$26,200,000 moderniza¬
Mississippi River Fuel Corp., St. Louis, Mo.
<
was announced that plans to finance the instal¬
lation of additional compressor units on the company's
remainder
during the following six months. Previous
financing was done privately. Proceeds—For con¬
in instalments
bond
struction program.
•
Dec.
of
r;>
Chesapeake & Ohio Ry.
4 it was reported company contemplates issuance
of which it plans to sell
early in December at least $7,000,000 and the
$7,500,00 equipment trust certificates.
Halsey, Stuart & Co. Inc.; Salomon Bros. &
Bids—Expected in January.
Colorado
Fuel & Iron Corp.
3, the directors approved a
tion and improvement program
Oct. 4 it
for the company's Min-
Works at Pueblo, Colo., which is expected to be
completed by 1952. Traditional underwriter: Allen &
nequa
Co., New York.
Columbus
&
pipeline system in Arkansas and Missouri will be supplued later. The estimated cost of the new facilities is
$5,500,000. Previous bond financing was arranged for
privately through Union Securities Corp., who also acted
underwriter for a common stock issue in April of thi*
Southern Ohio Electric Co.
as
reported planning new equity financing before
in the form of common stock. Pro¬
the company's construc¬
9
year.
the end of the year
ceeds will finance a portion of
which calls for total expenditures of
$45,900,000 in the years 1950-1952. Traditional Under¬
writer—Dillon, Read & Co. Inc., New York.
tion
program,
Consolidated Gas Electric Light & Power Co.
11.
Dec.
underwriter!
Traditional
1951.
1,
New York.
Michigan-Wisconsin Pipe Line Co.
j
July 25 company received SEC authority to. borrow nc£
more than $20,000,000 from banks.
A permanent financ¬
ing program provides for the elimination of these bank
loans prior to their maturity, July 1, 1951, and such pro¬
gram will include the issuance and sale of $12,000,000
additional bonds and $3,000,000 of additional common
stock (latter to American Natural Gas Co., the parent)*
Previous debt financing was placed privately. If com¬
March
24 filed
March
on
Gatineau
Oct.
are
announced it has asked New York
P. S. Commission authority to issue $12,000,000 of new
25
Oct.
Nov.
Extension,
tribution
residents of Wisconsin only.
•
(letter of notification) 250,000 shares of capital
Nov. 20 company said it may sell during 1951 some addi¬
tional common stock following proposed 200% stock dis¬
common
ders:
Vulcan
V
Co., New York.
Foote Mineral Co.
Corp.
City, Utah, for the processing of uranium
and manganese ores. Office—60 Greenway Drive, Corliss
Station, Pittsburgh 4, Pa.
^
Nov. 27
nolds &
Lynch,
in Salt Lake
stock
stockholders will vote Dec. 20
announced
was
creating an authorized issue of 30,000 shares of nev*
preferred stock (par $100), of which it is initially
planned to issue and sell 10,000 shares to provide additional working capital.
Traditional underwriter: Rey¬
early next year of $16,000,000 first mortgage 3%% bondi
Light Co.
reported that this company will be in the
was
30-year first mortgage bonds,
(12/15)
Co.
4
Carpet Co.
Oct. 31 it
Graham, Parsons & Co., and H. M. Byllesby & Co., Inc.
•
Firth
announced that it is planned to offer
it was
28,
Moseley
Dec.
•
Nov. 30 it
(may be placed privately).
First Boston Corp.
Underwriters—Probably White, Weld &
Co.; A. C. Allyn & Co., Inc.; Bacon, Whipple & Co., et al.
Proceeds—To finance proposed pipeline from Texas to
Chicago.
shares of class A convertible stock (pay
$1), all or part of which are to be publicly offered in thp
near future.
Price—$2.50 per share. Underwriter—Gra-r
ham, Ross & Co., Inc., New York. Proceeds—To repay
indebtedness to RFC and for working capital.
Atlantic City
Oct.
scribed shares.
$10 per share.
issue of 400,000
Estabrook & Co.,
extent of
20 filed
Nov.
stock.
ferred
market, probably in February, with an offering of $15,-
Texas
21
a new
tive preferred stock (par
this issue, it is proposed
increased
as
Orange, N. J.
Nov.
creating
rights to expire about Jan. 16. Price—$1 per share. Pro¬
ceeds—To acquire Techperl and Brodhead Divisions of
E., Atlanta, Ga.
Ponce De Leon Ave., N.
announced stockholders will vote Dec. 18
was
issue of 40,000 shares of 5% cumula¬
$100), to be issued in series. Of
to place privately with a group
of insurance companies 16,500 shares of series A pre¬
ferred, the proceeds to be used to redeem all of the pres¬
ently outstanding 16,336 shares of 5% cumulative pre¬
on
•
Inc., Atlanta, Ga.
Electronics, Inc.
stockholders
2
on
American Bosch Corp.
Nov. 22 it
Nov.
(letter of notification)
2
Probable
Brewing Corp. of, America
Nov. 3 stockholders approved creation of $6,000,000
Office—220 Healey Bldg., Atlanta, Ga.
Southern Insurance,
offered first to stockholders.
stock to be
mon
•
Sept. 18 (letter of notification) $191,500 of 5% subordin¬
ated debentures, series E. Price—At par. Underwriter—
For $100,000 of debentures, Allen & Co., Lakeland, Fla.
Proceeds—To reduce bank loans and for working capi¬
tal.
Algonquin Gas Transmission Co.
8 the FPC said it was of the opinion that certain
cf the New England markets should be served by this
company, upon showing that it has an adequate amount
of gas.
Necessary financing, probably about $40,000,000, likely to be 75% bonds and 25% stock, with com¬
Nov.
•
capital stock. Price—At par
Underwriter-Optionee — Robert Irwin
Dec. 1 filed 560,000 shares of
&
of this company
(formerly Finch.
Telecommunications, Inc.) voted to create an authorized
underwriter: Dillon, Read & Co. Inc.
Ltd., Toronto,
Canada
v.ii-
($1
Oct.
which
under
31
'
,
anticipates
an
(2213)
The Commercial and Financial Chronicle
.
f;
Missouri
Central
Natural
Gas
Co.,
Macon, Mo.
asked FPC authority to build approxi ¬
mately 60 miles of pipeline in Missouri at an estimated
cost of $1,200,000.
The project would be financed from*
Nov.
the
1
company
proposed
issuance
$1,000,000 of first mortgago
5% preferred stock.
of
bonds and 2,000 shares of $100 par
of Baltimore
•
Westerly
Dec.
stock
(R. I.)
Automatic Telephone Co.
7,000 shares of common
(letter of notification)
1
to
be
offered
to
stockholders
of
record
Dec.
9,
1950, of which total 4,434 shares will be subscribed for
by New England Telephone & Telegraph Co. Price—At
par ($25 per share). Underwriter—None. Proceeds—For
general corporate purposes. Office—38 Main St., Wes¬
terly, Rhode Island.
Western
Nov.
stock
on
a
Light & Telephone Co., Inc.
(letter of notification) 14,870 shares of common
(par $10), to be offered to common stockholders
l-for-20 basis.
Price—To be filed by amendment.
managers.
(Inc.) and
dealer-
as
Proceeds—For construction program.
(12/11-16)
Oct. 25 filed 500,000 shares of common stock (par $1).
Price—To be supplied by amendment.
Underwriters—
Gearhart, Kinnard & Otis, Inc., New York,' N. Y., and
White & Co., St. Louis, Mo. Proceeds—To pay obligations
<»<»
>
the
was
SEC
1
)
announced
company
plans
to
Halsey, Stuart & Co. Inc.; The First Boston Corp. and
White, Weld & Co. (jointly); Harriman Ripley & Co.
Inc.; Kuhn, Loeb & Co. Bids—Expected to be invited
during the latter part of January.
Nov. 20 it was
Electric
reported that the company was said to
be
the
tyne, Noel & Co.;
Newhard, Cook & Co.
Williams
Corp.
authorized com¬
600,000 shares to 1,000,000
shares so that company may be in a position "to act
promptly by broadening the scope of business and op¬
erations."'" Traditional
underwriters:
Hornblower
&
Oct. 31
mon
stockholders voted to increase
stock
(par
$5)
Weeks and Kebbon/
Nov.
9,
Dec.
20
it
stock from
up
Machine
Tool
Co.
announced that stockholders will voto
plan to increase the authorized common
was
on
a
250,000 shares to 750,000 shares and splitting
the present 210,000 outstanding shares on a two-for-
If any new financing, probable underwriters
will include F. Eberstadt & Co., Inc., of New York, and
basis.
one
Prescott,
Hawley,
Shepard
&
from
McCormick & Co. *
•
Monongahela
Dec.
Inc., of Cleveland,
Co.,
I
Ohio.
Manufacturing Co.
sale of an issue of convertible pre¬
ferred stock first to stockholders on about a l-for-8 basis.
Probable underwriters: Smith; Barney & Co.; Van Alsconsidering
Monarch
register
by the end of December a proposed of¬
fering of $25,000,000 new bonds. Underwriters — To be
determined by competitive bidding.
Probable bidders:
Eureka
Wilcox-Gay Corp., Charlotte, Mich.
to all unsecured creditors.
24
with
Emerson
6
Underwriter—None, but Harris, Hall & Co.
First Trust Co. of Lincoln, Neb., will act
it
Nov.
1
it
was
Power Co.
announced
company
plans issuance and
bonds. Underwriters—To bodetermined by competitive bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; Equitable Securities Corp.; W.
C. Langley & Co. and The First Boston Corp. (jointly);
Union Securities Corp.; Salomon Bros. & Hutzler; Leh¬
man Brothers; Kidder, Peabody & Co. and White, Weld
& Co. (jointly); Merrill Lynch, Pierce. Fenner & Beane;
Glore, Forgan & Co. Proceeds—For expansion program.
Offering—Expected in March, 1951.
sale of $10,000,000 of new
Continued
on
page
33
38
The Commercial and Financial Chronicle
(2214)
Continued from page
Utilities
Montana-Dakota
11
asked FPC for authority to
company
be refunded by
to
permanent financing before April 1.
Traditional underwriters are Blyth &
1951.
Pierce, Fenner & Beane. Stockholders on
on
increasing authorized preferred
Merrill Lynch,
will
27
Nov.
vote
100,000 to 150,000 shares and common stock
stock from
2,500,000 shares.
from 1,500,000 to
dent, stated that about $10,000,000
the next six months.
Video Corp.,
National
Oct.
23
it
Co., Inc. and
R. M. Heskett, Presi¬
will be raised within
a
new
for
new
$1,200,000 building and an additional $1,000,000
equpipment. Most of the funds necessary for this
expansion
are
expected to come from earnings.
Natural
Nevada
Pipe Line Co.
Gas
asked FPC to authorize construction
and operation of a 114-mile pipeline for the transporta¬
tion of natural gas, which, it is estimated, will cost
$2,331,350.
Nov.
15
•
company
Niagara Gas Transmission Ltd.
(Canada)
Edison
Potomac
Dec.
it
1
of
$10,000,000
that
to
See
issue
Underwriters—To be deter-'
bonds.
new
plans
company
•
Colorado
Oct.
Inc.
Texas
Co.,
of the Niagara border. The
total cost of the project is estimated at $6,000,000, of
which $2,000,000 will be represented by 400,000 shares
of capital stock, par $5, and $4,000,000 to be raised by the
natural
by
gas
order to take
way
holders for Jan.
Oct. 24 the company
require not
estimated that, through 1951, it will
equity financing in connection with its 1951 construction
which is expected to cost $52,328,000. This amount is in
addition to the sale on Oct. 31 of $40,000,000 general
Probable bidders for
Halsey, Stuart & Co. Inc.; Morgan Stanley
mortgage bonds due Oct. 1, 1980.
bonds:
new
&
North
Penn Gas
was
Co.
announced
company
Transmission
Gas
Co.
common
South Jersey
needs. Traditional underwriters for
Weld & Co.; Stone & Webster Se¬
gas
curities
Oklahoma
Gas
equal
plan
& Electric Co.
amount
par
dividend rate
"as
of
preferred
soon
as
stock
having
a
lower
the transaction becomes
eco¬
nomically sound," and to finance part of the company's
a
Lehman Brothers
and
Michigan Gas Co.,
>
Port Huron,
Michigan
1 it
facilities and
first
the
mortgage
stock,
the conversion
company proposes
$500,000
bonds,
of
of the
system to
to issue $3,300,000 of
5% prior preferred
cumulative preferred stock and
$200,000 of 6%
stock, subject to the approval of the
Michigan P. S. Commission. The FPC authorized the
company to construct natural gas pipeline facilities to
$400,000 of
common
the southeastern
serve
Southern
Michigan
Sept. 27, W.
mulative preferred
riman
stock.
of 4% cumu¬
165,000 shares of $100 par cu¬
par,
Probable underwriters: Har-
Ripley & Co., Inc.; Smith, Barney & Co.; Lehman
tion
C. Mullendore, President, announced that
involve $55,000,000
Halsey, Stuart & Co.
Inc.; Blyth & Co., Inc.; The First Boston Corp. and
Harris, Hall & Co. (Inc.) (jointly); Shields & Co.
in
program.
new
bonds.
Total financing
Probable
may
bidders:
Brothers.
Southern
Pacific
Nov.
Lighting Corp.
13
corporation
estimated
that
approximately
$24,000,000 will have to be raised through the sale of
securities next year to finance its 1951 construction
pro¬
gram.
Traditional underwriter: Blyth & Co., Inc.
Pacific
Northwest
June 30 company
Pipeline Corp.
sought FPC authority to build
a 2,175
pipeline system—from southern Texas to Washing¬
ton—at a cost of $174,186,602.
Negotiations for major
financing requirements are now in process of being
completed. Probable underwriters: White, Weld & Co.
and Kidder, Peabody & Co.
R. R. Herring, President,
on Oct. 12 stated permission to build the line is
expected
Indiana Gas & Electric Co.
Nov. 6, the company applied to the Indiana P. S. Com¬
mission for authority to issue and sell $3,000,000 of 30year
Pennsylvania
Electric
sey,
first mortgage bonds. Underwriters—May be deter¬
by competitive bidding. Probable bidders: Hal¬
Stuart & Co. Inc.; Kidder, Peabody & Co.; First
Boston
Corp.; Equitable Securities Corp.; Otis & Co.;
Carl M. Loeb, Rhoades & Co.; Salomon Bros. & Hutzler.
Proceeds—For expansion program.
early next
year
of about $10,000,000
new
bonds. Probable
bidders:
Halsey, Stuart & Co. Inc.; Kidder, Peabody &
Co.; Merrill Lynch, Pierce, Fenner & Beane; Union Se¬
curities Corp. and White, Weld & Co.
(jointly); Equit¬
able Securities Corp.; The First Boston
Corp.; Kuhn,
Loeb & Co.; Harriman Ripley & Co., Inc. Proceeds are
to be used to finance construction program.
Pennsylvania Power & Light Co.
9 Chas. E. Oakes, President, stated the
company
will require about $34,900,000 of new
capital over the
next four years through the sale of securities.
It is re¬
ported that not over 75,000 shares of series preferred
Nov.
Southern
Nov.
Natural
Gas Co.
1,
Chirstopher T. Chenery, Chairman, announced
company will soon file with SEC a financing program
which
is
expected
to
comprise
$17,500,000
of
20-year
first mortgage pipeline bonds and 155,546 shares of ad¬
ditional common stock (latter to be offered for subscrip¬
by stockholders in ratio of one share for each 10
held). Price—For stock to be announced later.
shares
planning the issuance
new
through underwriting. If through underwriters, • stock'
may be sold at straight competitive bidding.
Probable
bidders: Lehman Brothers and Goldman, Sachs & Co.
,
(jointly); Morgan Stanley & Co.; W-. C. Langley & Co.
The First Boston Corp. (jointly); Harriman Ripley?
and
& Co.
Offering
Inc.- Proceeds—For expansion program.
—Expected early in 1951.
Westcoast
;■
Transmission
Co.,
'
Ltd.
v
-
.
10, it was announced that Westcoast Transmission,
•
imately 615 miles of pipeline for the transportation ofc
in the States of Washington and Oregon (this.
natural gas
project is estimated to cost $25,690,000). Both companies ;
are
sponsored by Pacific Petroleums, Ltd., of Calgary,
Sunray Oil Corp. and other members of the "Pacific
Group" engaged in active.oil and gas exploration anddevelopment in Western Canada. The completed line of
both companies, to be about 1,400 miles, will, according
to
estimates, cost about $175,000,000, to be financed
75% by bonds and the remainder by preferred and com-mon
Underwriters—Eastman, Dillon &
stock.
The First Boston
Co.
and
Corp.
•
Western
Pacific RR. Co.
(12/19)
Nov. 30 company applied to ICC
and sell
gage
for authority to issue
$22,000,000 of 30-year first and refunding mort-.
bonds, dated Jan. 1, 1951.
Underwriters—To be de-
-
by competitive bidding. Probable bidders: Hal¬
sey, Stuart & Co. Inc.; Blyth & Co., Inc.; Lehman Brothers and Bear, Stearns & Co. (jointly); Union Securities
Corp. and Glore, Forgan & Co. (jointly). Proceeds—To
redeem $10,000,000 of first mortgage 4% bonds and $6,termined
tion
Co.
Oct. 4 company was reported to be
•
~
was
mined
mile
within six months.
>
reported company plans to^ell $7,000,000 v
common
stock, either to the stockholders or1
it
1
„
negotiations for '
Electric Co.
West Penn
Dec.
and
Com-
in Louisiana
Co., Inc., its American affiliate, has filed an application
authorization to construct approx¬
company will have to raise $50,000,000 in new capital
within the next 18 months to finance its 1951 construc¬
shares, $20
fields
with the FPC seeking
stock
authorized but unallotted
?
Nov.
area.
Edison Co.
California
off-shore
is now in process of completing
its major financing requirements.
of
announced that in connection with the fi¬
was
and
Coast
pany
•
Southeastern
Dec.
Gulf
Texas to markets in Indiana, Ohio and Michigan.
Bear, Stearns
on
lative preferred stock to
sought FPC authorization to construct;
$144,500,000 pipeline project to carry natural gas from
the
Co. (jointly).
•
construction program by the issuance and sale of addi¬
tional common stock. Stockholders will vote on Dec. 4
changing each of the 1,076,900 shares of $20 common
now outstanding to two shares of common
stock,
$10 par each; and on changing the 825,000 shares of
j
Valley Gas Pipe Line Co., Inc., Houston, Tex.
Gas Co. (154,231.8 shares, par $5 each.)
bidders:
natural gas,
was
from 325 miles to 469 miles.
Gas Co
nancing of the proposed pipeline, the acquisition of dis¬
filed with the SEC, which provides,
in part, for the refunding of the outstanding
$6,500,000
5Mi% cumulative preferred stock (par $100) with an
a
-
to $32,000,000 (from $25,000,000 in the originalapplication), according to John A. McGuire, President,
and the length of the proposed transmission increased
an
tribution
Sept. 28
Gas Co.
creased
the company at 120 Broadway,
advisory report submitted to SEC provides
sale of entire holdings of United Corp. in the stock
Nov. 20
&
parent, to carry out a $118,645,545
expansion program, part of which will supply some of
Natural
21, the company applied to the Utah P. S. Commis¬
sion for permission to extend the proposed natural gas :
line from northeastern Utah to include additional areas'
in that State. The estimated cost of the project was in-'
(12/14)
Ry.
Utah
the principal officers of the cor¬
June 27 company
of South Jersey
Co.,
White,
Corp.
•
are
Nov.
Harris, Hall & Co. (Inc.); and Salomon Bros. & Hutzler.
England with natural gas, and authorized Tennessee Gas
Northeastern's
York, N. Y.,
poration.
cates, series H, mature in 15 equal annual instalments.
Probable bidders include: Halsey, Stuart & Co. Inc.;
Probable
Tennessee:
New
to
Francisco
Louis-San
Nov. 8 FPC authorized company to supply part of New
Transmission
Pipe Line Co. (Del.)
Was
special meeting of stock¬
1951, for purpose of increasing au¬ privately, with no public offering expected for at least.
two years. E. Holley Poe and Paul Ryan, of 70 Pine St.,
stock from 350,000 shares
(209,221
Bids will be received by
for
Northeastern
Engineering Co.
York, N. Y., up to noon (EST) on Dec. 14 for the
purchase from it of $5,595,000 equipment trust certifi¬
plans permanent
financing following merger of the Pennsylvania sub¬
sidiaries of Pennsylvania Gas & Electric Corp., the
parent. Proceeds—To retire, in part, proposed bank loans
of $3,000,000.
it
25
stock. In event of competitive
18,
outstanding)
St.
common
announced that this company had been
build, own and operate a petroleum product®
pipeline from the Texas Gulf Coast to St. Louis, Chicago
and other midwest markets to operate as a "common
carrier."
The initial financing has been arranged for"
New
Co.; Kuhn, Loeb & Co.; The First Boston Corp.
Sept.
•
GasjCorp.
United^ States
2-for-l stock split-up.
than $35,000,000 of additional debt or
more
and'
dispose of its holdings of 2,870,653 shares (26.95%) of,
Sept. 25, it
1,000,000 shares and to effect a
The stockholders would then have
preemptive rights in 531,558 of the unissued new shares
while 50,000 shares would be reserved for future sale to
employees and for other corporate purposes. Traditional
underwriter: Hayden, Miller & Co.
shares
Niagara Mohawk Power Corp.
&
issue
formed to
of its construction program.
Electric
plans to
bidding, probable bidders may include Lehman Brothers.
Nov. 22 directors voted to call a
thorized
issue of bonds.
care
Reliance
company
$4,500,000 equipment, trust cer-s
16, the Division of Public Utilities of the SEC has-
United
during the period prior to Dec. 31, 1953, to
of approximately $46,000,000 in
required,
Gas
or
recommended that SEC order Electric Bond & Share Co.
obtain additional funds
this company, a subsidiary
plans to build a pipe line in
Canada to export from Tennessee Gas Transmission Co.
Consumers'
$3,800,000
United Gas Corp.
Nov.
31, company estimated that, in addition to the $40,-
Oct. 20, it was announced that
1
Ry.
announced
was
either
000,000 bank credit arranged with eight banks, it may be
of
[
Harris, Hall & Co. (Inc.); Lee Higginson Corp.; R. W.1
Pressprich & Co.; Harriman Ripley & Co. Inc. and Leh¬
man Brothers
(jointly); Blair, Rollins & Co. Inc.
to
Indiana,
:
tificates, series I, to be dated Feb. 1, 1951. Probable bid¬
ders: Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutzler;
$7,000,000 of debentures which company had
planned to issue earlier this year were: Halsey, Stuart
& Co. Inc.; Blyth & Co., Inc. and Smith, Barney & Co.
(jointly); The First Boston Corp.; Lehman Brothers;
Kidder, Peabody & Co.; Harris, Hall & Co. (Inc.). This
latter plan was abandoned last August.
of
it
5
Dec.
Pacific
&
Texas
sell
for
Co.
Corp.
Dillon, Read & Co. Inc. New York.
I,*J. E. Loiseau, President, announced that "it will
be necessary to raise additional funds for construction
purposes in the second quarter of 1951.
The amount
needed is estimated at about $7,000,000." Probable bid¬
Service
Gas Transmission
it was reported that this company is understood
to be'studying further expansion plans, although no'
financing is considered imminent. Probable underwriter:
Nov.
Public
•
.
Texas
(jointly); Kidder, Peabody & Co. and Alex.
Brown & Sons (jointly); Glore, Forgan & Co.; Salomon
Bros. & Hutzler; Harriman Ripley & Co., Inc., and Union
Securities Corp. (jointly).
Proceeds — For expansion
program.^ Offering—Expected in April or May, 1951.
ders
Co.'
Northeastern Gas Transmis¬
on
Nov. 9,
Boston Corp.
of
accompanying item
sion Co.
mined by competitive bidding. Probable bidders: Halsey,
Stuart & Co. Inc.; W. C. Langley & Co. and The First
Service Co.
Transmission
Gas
Tennessee
Co.
announced
was
Public
offering of additional capital stock, the proceeds of which
are to be used to finance, in part, the cost of erection of
&
struction program.
Chicago, III.
reported this company contemplates the
was
Prexel
finance, in part, the company's con¬
Proceeds-VTo
Co.
Co.
issue $2,800,000 of 2Ms % promissory notes to banks to provide
funds for its expansion program. These notes, together
with $3,000,000 of notes authorized by FPC last May, are
Oct.
Inc., handled the financing early this year of $18,000,000
first mortgage -2%% bonds and $3,000,000 of 4%%
preferred stock (par $100). Proceeds—To repay $3,000,-'
000 of bank loans and for construction expenditures.
Traditional
stock may be sold late this year or early 1951.
Underwriters—The First Boston Corp. and
37
Thursday, December 7, 1950
.
general mortgage convertible income
the balance used to reimburse the
treasury for road improvements.
Bids — Expected at
1 p.m. (EST) on Dec. 19.
113,300
Underwriters—For bonds to be determined by competi¬
2% bank loan due July 1, 1951, and the balance (ex¬
pected to exceed $1,500,000) to provide some additional
working capital. Bids—Tentatively scheduled for bonds
in first week of January.
Southern
Oct. 20 it
was
Union
Gas
County Electric Co.
Sept. 25 a plan was filed with the SEC, the FPC and the
Massachusetts Department of Public Utilities providing
for the merger
sidiaries
of
with this company of seven other sub¬
New
England
Electric
System,
following
which Worcester County proposes to issue and
sell $12,- *
loans of
Probable'
Halsey, Stuart & Co. Inc.; Lehman Brothers;
000,000 of first mortgage bonds to retire bank
the
Co.
reported company plans to raise between
$7,000,000 and $8,000,000 through the sale of
ities next Spring.
4V2%
Worcester
tive
bidding. Probable bidders: Halsey, Stuart & Co. Inc.;
Blyth & Co., Inc. and Kidder, Peabody & Co. (jointly);
The First Boston Corp. Proceeds—To repay a $20,000,000
of
bonds due 2014, and
Underwriter
—
new secur¬
Blair, Rollins & Co.,
companies
bidders:
Merrill Lynch,
&
participating in
the merger.
Pierce, Fenner & Beane; Kidder, Peabody
-
Co., Inc.
r
Co.; First Boston Corp.; Harriman Ripley &
Number 4966
Volume 172
.
.
.
■
.
there
though
been Inklings
had
might be held
it
'
'
because of
spell
a
up
general conditions.
out
Brought
at
par
members
San
Francisco
reported moving out
Mr.
Davis
was
Doubtless the conversion
feature—holders may convert into
common stock at their option until
readily.
Dec. 1,
Bidding
has
for
close
been
a
the
for
remained
it
to
two
within
groups
of
breadth
Tuesday
a
i
previously
Carlson
Hooker & Fay
has
SAN
fred
associated
become
with
with Standard Investment Co. of
jn funcis to carry out extensive expansion which it has in the
California, 87 South Lake Avenue,
He was formerly with Samuel B.
" 2% % ^ ing
"ate102'07"2
But it required the fourth digit
the- decimal
to decide the
after
the syndicate
winner since
position
tered
"runner-up"
of
in the
had
en-
bid of 102.079 for the same
a
.
two
was
where
instance
an
bids were separated
top
Jected sale of 20,000 shares of $100
par value preferred now appears
the
gradually
down
to
iow ' of
a
101.7099.
and indications are that the
day
-
....
,
.||
price
a
of
quiry that the issue would
out qiuckly to investors.
pass
■the issue
helped considerably
was
T
,
The tions, a -period of -relative slugincidentally, was only igishness looms ahead for the bal-.
per $1,000 bond under the<ance of the yeaf
'20 cents
iwinning figure.-'
L_i
JL.
;
:
•
December
series,
convertible
$4.50
new
THE byrhdun.
4,
Fifty Cents per share on the
Stock,
payable
December
stockholders of record December
27,
AMERICAN
CAN
COMPANY
STOCK
PREFERRED
dividend of
one and three-quarters per cent was de'clared on
Uhe Preferred Stock of this Company, payable
January 2, 1951 to Stockholders of record at the
"close of business December 14, 1950. Transfer
books will remain open. Checks will be mailed.
1950 a quarterly
November 28,
On
Corporation at
its meeting Held on November 30th, 1950, de¬
clared a dividend of $1.50 per share on the
Participating Preferred Stock, a dividend of
$2.50 per share on the Class "A" Participating
Stock, and a dividend of $3.50 per share on
the Second Preferred Stock; also a dividend
of Twenty-live cents
(250) per share on
Class "A- Participating Stock, Class "A"
Common Stock and Common Stock; no divi¬
dend on fractional shares, all payable on De¬
cember 2 'nd. 1950 to stockholders of record at
'
3:00
the Byrndun
H. G.
and
Board
of
ment
Cents
York
New
York,
The Board of Directors has this day
y
dividend
a
($2.50)
per
of
Dollars
Two
share,
Dividend
being
of
1950.
Cents
104
No.
of
i
tered
88th CONSECUTIVE
December 29,
of
-dend
Two
Dividend No.
t
on
i
on
checks
Dividend
Preferred'and
this
on
day
share,
per
divi-
a
on
the
of
the
,
December
business
of
11,
dividend
1950.
.
COMMON STOCK DIVIDEND
.
63rd Consecutive
par
dividend of 45-
MIDDLE
/
^ Am
*
I
jpy
mailed
be
to
to
on
The
of business
holders of
on
December 15, 1950.
Capital Stock who have
LEO
W. GEISMAR, Treasurer.
f
I
33-M cents a share on $1.35 Convertible
Preferred Stock, and 33 Va cents a share
•
on
has this
day declared a dividend
Stock,
payable January 2, 1951, to stock¬
of
record
of record December 21, 1950.
A. E. WEIDMAN
November 21,1950
H.
1950.
F.
SANDERS,
Treasurer
Y.
December 5, 1950
De¬
-
Iff..
/Yinmg and
Phosphate
($1.75)
of
per
one
share
dollar
on
EATON
MANUFACTURING COMPANY
Cleveland 10,
twenty five cents
Common
Stock
of
170
seventy
Ohio
,
cents
of Eaton Manufacturing Company
(250)
has
this
end dividend of
per
share
on
Company- have
forty cents
the
on
per
1950. These dividends
payable to stockholders of
record at the close of business
on
December 13,
1950. Transfer books will not be closed.
CARL A.
SUNDBEkG
November 30, 1950
-■
Secretary
an
extra
($1.00)
1
the
H.C.STUESSY,Secretary
,
Declared
on
0
Manufacturing
Fertilizer • Chemicals
*
pi
1
M
November 29, 1950
AA.
M
Preferred
Cumulative
$4.25
Stock
declared,
was
York, December 6, 1950
The Board of Directors has
January 1, 1951 to
of record
business
on
at
stockhold¬
the close of
December 8, 1950.
Common
Stock
I
closed. Checks will be
Wm.
mailed.
J. Williams,
Vice-Pres. & Secy.
'%A.WS-v/#.AAAAA.f.WAAAAAAAAA?A.ffyA
share
the Capital
on
on
follows:
of Two
Dollars
($2.)
share, both payable on Jan¬
uary
Dollar
Stock
of
Eighty Cents <80p) per share on
1,000,000 shares outstanding
prior lo stock dividend.
$5.00 Par Value Common
Regular Quarterly Dividend
Stock of this
Company for the quarter ending
December 31,1950, and an extra
per
Both dividends are
payable December
1950, to stockholders of record at
the close of business December 20, 1950.
29,
15, 1951, lo stockholders of
Robert P. Resch
the close of business
Vice President and Treasurer
record
at
December 15, 1950.
1950.
not be
declared by the
Quarterly Dividend of One
($1.00) per share.
dend of Three Dollars ($3.) per
dividend
quarterly dividend of $0.20
per share on the Common
Stock was declared, -payable
December 20, 1950 to stock¬
holders of record at the close
of business on December 8,
A
Transfer books will
litis
clay declared a quarterly divi¬
m
payable
were
4% Cumulative Preferred Stock
35th Consecutive Regular
New
regular quarterly dividend
$1.0625 per share on the
If
dividend
per share
1,792,520 $2.00 par value
common
shares of the Company
issued and outstanding, payable
December 23, 1950, to share¬
holders of record at the close of
business December 8, 1950.
A special
(400)
declared
of One Dollar
been
the Common„ Stock has been declared,
payable December 27,
have been declared
110)
The Board of Directors
the Preferred Stock and
declared, payable January 1, 1951-.
on
(DIVIDEND No.
103
five
Potash
Board of Directors
Preferred Stock
A
ers
Dividends
•
December 4, 1950, as
DIVIDEND NOTICE
%
EXTRA DIVIDEND
and
Treasurer
the close of
at
business December 15,
New York 6, N.
Convertible Preferred Stock,
of 300
share on the Common
holders
$1.35
B. All preferred dividends are
payable January 10, 1951 to stockholders
Series
CANADA DRY |
'M
■'//A
November 30, 1950
New York 8, N.Y.
Preferred Dividend No.
regular
Inc.
*
of
Common Dividend Nos. 102
declared
also
quarterly dividends of 65 cents a share
on
$2.60 Convertible Preferred Stock,
m
I
30 Cbnrcb Street
directors
UTILITIES,
\
/-VW
January 2, 1951
stockholders of record at the close
therefor at this office.
LOCOMOTIVE COMPANY
Common
PREFERRED STOCK DIVIDENDS
SOUTH
a
a
*'51
v.A.
AMERICAN
on
payable January 10, 1951 to stock¬
holders of record December 21, 1950.
Stock
Common Stock of the Com¬
payable
1951.
will
regular quarterly
share
,,
/T
/
/
a
cents a
$10., payable Janu¬
stockholders of rec¬
the close of business
at
Quarterly Payment
of Directors of Seaboard
Finance Co. declared
per
slock of this
COMPANY
FINANCE
The Board
B.- T.
m
share
5ERB0RRD
stock outstanding
December 11,
common
close
Dividends
pany,
D. C. WILSON, Assistant Treasurer,,
120 Broadway, New York 5, N. Y.
r
year
of busi¬
quarterly dividend of 1 5c per share
being
the Common Capital Stock
Common
filed suitable orders
of
common
Babbitt, Inc. has declared a regular
the Company at the close of
books of
the
,
all shares of
of the close
Company,
business January 26,
■'
of
as
STEPHEN G. KENT, Secretary
($2.00)
Dollars
152
Directors
of
Board
The
on
of
all shares
cember 8, 1950.
payable March 2, 1951, to
holders of said Common Capital Stock registered
this
of
extra
the capital
2, 1951, to
ord
QUARTERLY DIVIDEND
1950.
declared
also
Board
The
ary
regis-
Stock
the books of the Company at the close
on
business
of
Capital
Preferred
said
on
an
(total 40 cents)
cents
Company,
ori
the Preferred Capital Stock of this Company,
payable February 1, 1951, out of undivided net
.profits for the year ended June 30, 1950, to
I
holders
20
share
declared
Fifty
and
quarterly dividend
a
of 20 cents and
company
Y., November 28,
N.
Directors has this
,
11,
The Board of Directors
November 30, 1950
and
topeka
railway
share
December
DIVIDEND
day declared
fe
President
December 6, 1950.
1950 and an extra divi¬
dend of Twenty-five (250) Cents per share
ness
/ V~7r
The Board of
atchison,
a
per
Henri Sadacca
of this Company
1950, authorized the pay¬
dividend of Twenty-five (250)
outstanding
stock
LOUIS
28,
Company
One Wall Street, New
1951, to
30,
January
of
(25%)
cent
per
15, 1950.
& ST.
V If
November 30th, 1950.
dividend
COMPANY
of Directors
November
per
the
NOTICE
MINNEAPOLIS
1950.
Irving Trust
stock
Twenty-five
,
payable
1
EDMUND HOFFMAN, Secretary.
santa
LEWISOHN,
a
stockholders of record December
/
S
FAHLBUSCH, President
and
to
Jr.,
15,
1950
By order of the Board of Directors.
JOHN J. O'BRIEN, Secretary
Secretary
the
of business December
President.
on
CRONMILLER,
Vice President
December lltli, 1950.
P. M.
F.
G.
13,
December 27, 1950
stockholders of record at
to
1950, such dividends to be payable Decem¬
ber
15, 1950 to the holders of record of
shares of said stock at the close of business
1950,
share on the
close
extra dividend
No Par Com¬
Board of Directors has declared
mon
The Directors of
tion, payable
1950
of
DIVIDEND NOTICES
declared,
a
Stock of this Corpora¬
Capital
Pennsylvania
Pittsburgh
(25c)
five cents
has
dividend of Twenty-
The transfer
A.
SAM
a
Y
Directors
of
will not close.
books of the company
as
REFRACTORIES COMPANY
Texas Eastern Transmission
Corp.'s offering of 200,000 shares
declared
(50c)
Corporation
13th St.. New York 11, N.
Board
The
1950
4,
fiftv
been
December 14, 1950.
on
,
HARBISON-WALKER
DIVIDEND NOTICES
of
Degitz
r-—
Texas Eastern Preferred
,
H
DIVIDEND NOTICES
•
-
of
has
share
per
ness
on
m._john
Electric
payable December 27, 1950, to stock¬
holders of record at the close of busi¬
The
'"c'ne
° PUm,. 6m9
a. bas been added to the staff of
.9 December adjusting fhejr^posi- Waddell & Reed, Inc.
bid,
Noma
December
dividend
extra
RAILWAY
(special to the financial chronicle)
P.
Co.,
York 6, N. Y.
61 Broadway, New
With Wadkfell & Reed
by the closeness of the bids.
third
Mutual
MIAMI COPPER COMPANY
DIVIDEND
QUINCY>
1950.
55 W
THE
institutional investors
large
CAMERON, Treasurer.
C.
November 29,
Joseph
—
First
®. J5 ~
Ahbe with Richard
as Assistant Man-
-
With this issue out of the Way
and
Presumably the marketability of
^ ^ of John ?
f
tion
L.
of
29,
DIVIDEND NOTICES
capital is in- ager.
indicated yield of 2.75%,
an
was
at
.
,
.
Wl11 be keen since H Landrum
for
102.542 llttle underwriting
in volved.
indicated by preliminary in-
reoffering
for
scheduled
bonds
the
With
leather co.
Directors at a
meeting held
1950,
declared
a
dividend of
50 c-;nts per share cn the Class A Convertible
Preferred Stock payable December 19. 1950, to
stockholders of record December 12, 1950.
Board
The
November
600 Woodward Avenue.
cents
sdiBMotehcs of Pahn Beach wiU open a
for this stook.aro Co,
be opeoed-tir Hies- branch oflra m the Gateway
Wds'backed
remaining
Mich.
with
is
An
Fffpe
Fla
Johnson
with
united. states
the
members of the
Francisco Stock Exchange.
Wells
Ahbe Co. to Open Branch
taUDFRAT F
is
Seeley
(Special to The Financial Chronicle)
undertakinff «ve Jan. 2, 1951, John L. Ahbe &
maj0r
°nly
the
as
after
Mont¬
315
P.
DIVIDEND NOTICES
connected
Fay,
Street,
DETROIT,
„
pt
FRANCISCO, Calif.—Wil¬
Cp., Russ Building.
Calif.—Al¬
now
With First Mutual
Building to conduct an investment business. Mr. Scarborough
was formerly with Pioneer Enterprises, Inc.
Co.'s pro-
Edison
Metropolitan
here
So
the
&
Hooker
San
Hampton, Va. - P a u 1 Scarborough, Jr. has opened offices
in the Citizens National Bank
Ahead
Week
So far as new offerings via the
competitive bidding route are concerned, next week promises to be
one
^ e
in months.
coupon.:
~
&
' dead-heat.
a
I ip-ht
;
is
Perlin
gomery
;
works, including creation of huge Franklin & Co., Fewel & Co. and
With
six
syndicates
entering underground natural gas storage Gross Rogers & Co
bids for the issue of first mort- reservoirs, and a pipe line to carry'
gage and collateral bonds, the sue- its product north to connect-with
i
c
l
i
r\
cessful group carried it of with a projected New England distributrail! ocarborough Upens
est
liam
Add
FRANCISCO,
M.
of
Chronicle)
(Special to The Financial
(Special to The Financial Chronicle)
PASADENA, Calif.-Michael C.
staff
Joins Johnson Co.
& Co.
Courts
and
SAN
(Special to The Financial Chronicle)
P
pany
Co.
&
the
to
Rayvis Company, Inc., Langford Building.
securities business. Mr.
was
previously with
a
added
been
J. A.
MacQueen
with
The financing will put the com-
bring
hairs-
in
gage
Exchanges,
With Standard Investment.
;t
Niccoli
$25,000,-
Uuu
on
common
v
w
Union
the
Electric Co., of Missouri s
oiieriiig
pnmmnn
uaoia
and
York
New
Stock
was
Johnston
Fla.—Philip
MIAMI,
has
Johnson & Co.
the basis of $20 for
wa«s
a.
hplnfnl
—
was
a
helpful
on
fe!ture
number of issues in recent months.
but
1960
the
of
(Special to The Financial Chronicle)
BIRMINGHAM,
Ala. — G.
E.
has
formed
MacQueen and Co. with offices at
2000 First Avenue, North to en¬
Goodwin, 265 Montgomery Street,
tracted considerable buying interand
With J. A. Ray vis
MacQueen & Co. Formed
MacQueen
filiated with Walston, Hoffman &
yield
to
^(sp^i to t« financial chronica)
SANv«gBANCISCO, Calif.—
Jerome G. Davis has become af¬
4.50% to the buyer, the stock atest
>
'
Walsto"> Hoffma« "
reached
that
39
(2215)
The Commercial and Financial Chronicle
.
■
■M
STUART K. BARNES, Secretary
INTERNATIONAL MINERALS
Guaranty Trust Company
& CHEMICAL CORPORATION
of New York
General Officer. 20 North
Wacker Drive, Chicago 6
40
The Commercial and Financial Chronicle
(2216)
Thursday, December 7, 1950
.
.
.
BUSINESS BUZZ
Washington.
BeVind - the - Scene Interpretation*
from the Nation's
WASHINGTON, D. C. — From
on,
everything which had
been established during the past
several weeks as the. pattern of
.governmental action is obsolete.
An entirely new pattern must in¬
evitably develop. It will range any
where from a greatly accelerated
-
now
effort to total mobilization.
war
What
the
will
pattern
Administration
itself
f/CX
xJL I
JL U Ut
Obviously the forced resignation
States from any in¬
terest in the continent of Asia, es¬
of the United
Accounting Trends and Tech¬
niques
in
Published
Corporate
Reports — Fourth Annual
pecially when assisted by "Allies"
in the UN upon whom the Truman
Administration has spent billions,
would be a bitter pill.
It could
mean political disaster to the Tru¬
Annual
Cumulative Survey—American In¬
stitute
of Accountants, 270 Madi¬
Avenue, New York 16, N. Y.
—paper—$10.
son
Administration.
man
So
the
be
gJ
y*
Capital
..
the
ing the
situation
confront¬
now
Economic Life in Russia's Orbit
—Stella
with respect to
Know, for difficult as it may seem governmental action is closely
to
believe,
the
Administration analogous—but infinitely worse—
does
not
economy
to that which
from
faced when the
Boston
actually took into account
that one day as during the past government finally woke up in
week, its foreign policy would go mid-summer to the fact that its
former police action was at that
«>mash.
For a month the. top military time a major undertaking instead
never
Headers have known that Commu¬
nist China
Korea
;
massing troops in
was
in
preparation
for
of¬
an
of
which
An
entire hold of the U. S. and United
tive
Wations forces in Korea.
an
itary leaders may have been sur¬
prised by the size and speed of the
offensive, but they were not sur¬
prised
at the
finally
would
doubtful
be
maintain
fact
that
the time
when it would
come
that
the
itself
U.
S.
the
on
could
Korean
entirely
—E.
is
entirely
budget,
framed.
With
outlook
new
on
expenditures,
taxes,
controls. It might be that in
perate
state
of
ministration
der
total
rather
anxiety,
will
when
years
are
had declined to believe that disas¬
could be threatened in Korea.
ter
actual
The
position of the Ad¬
ministration
was
belief
a
that
oomehow Communist China could
be persuaded to call off her dogs.
There
was
a
grasp
the
fact
complete inability to
that when U. S.
and
advise
the
U.
S.
to
"make
"Making peace," however,
is
exceedingly difficult as perhaps
Che
Administration
The
Commies want nothing more
less
than
the
ejection
of
nor
now
American forces from the
continent,
drawal
which
from
Formosa.
knows.
Asiatic
with¬
means
the
protection
of
In the few weeks which
have elapsed between the time the
well-informed in the military re¬
alized
Communist
China's
inten¬
is
peace
If
ment
.
mobilization
of
of
some
is
the
mosa
100,000
power
and
pletely
save
man¬
greater scale than
mobilization.
Even
ma¬
in
American
to
to
the
troops
surrender
Chiang Kai-shek
Reds.
The
lives
For¬
com¬
latter
try
sure you
gentlemen realize
my
firm's offering
say, my
firm's offering is the soundest in the investment field—
er—my
the restrictions
on
credit sales, but
also with the cutting off of essention raw materials. Something less
than
for
$1
billion
of
electronics
passed
to
on
contracts
war
have
that
yet
been
industry.
An¬
other $1 billion is provided for by
appropriations.
The pending
sup¬
plemental
defense
program
of
$18 billion is supposed to provide
an
additional
$1
billion
of
elec¬
mer
durables to
war
production.
conversion to
ease
#
troops
now
the
lives
of
facing disaster.
those
on
Govern¬
1950-1951
Tax
—
officials and to civic and taxpayer
Southern
Democrats
will
be
in
—
sold
at
to
cost
others.
ures.
Southern
of
conservative
Democrats and
threatened.
Mr. Koehler intends to
Republicans.
Administration
unions,
or
vice
has
on
the
$3 billion has been
firmly ordered, it should be about
war
*
production.
*
H.
that firm to continue to manufac¬
cannot
sell
regulations,
voices
cause
both
the
tougher
there
stem
the
talism.
is
advance
Once
passed,
luctant
to
a
of
the
piece of legislation
however,
get
it
they
modified
a
are
consumer
of
be
And
ever
if
regain
when
the
credit
Joins Westheimer Staff
(Special to The Financial Chronicle)
CINCINNATI,
J.
Roth
has
nut
William Beeken Adds
Ohio—Frederick
joined
Westheimer &
the
staff
regula¬
cur¬
and
Cincinnati
Stock
Ex¬
changes.
For
Large Appreciation Potential
WE
SUGGEST
RIVERSIDE CEMENT CO.
A
B
(common)
leading
in
producer
fast-growing
STOCK
of
cement
Southern
California.
Analysis
of
this
review
of
the
a
available
on
Company
and
Cement Indus¬
request.
Selling about
$9.50
.
WEST
PALM
L.
BEACH,
Clabby
is
House,
Fla.—
LERNER & CO.
Investment
now
Securities
con-
10 Post Office
S. Beeken
Square, Boston 9, Mass.
Tel. HUbbard 2-1990
Company, Harvey Building.
Teletype—NY 1-971
Allied Electric Products
Garlock
Packing
Gisholt Machine Co.
FOREIGN SECURITIES
All Issues
Jessop Steel
McBee
Company
r.ARL marks & ro. INC.
FOREIGN SECURITIES
SPECIALISTS
Hill, Thompson & Co., Inc.
Trading
50 Broad Street
New York 4, N. Y.
70 WALL
Department
STREET, N. Y. 5
Tel. WHitehall 4-4540
consu¬
of
Company, 326 Wal¬
Street, members of the New
York
CLASS
Beaver
to
come
Exchange.
(Special to The Financial Chronicle)
^IIAnover 2-0050
of the
to force
production of
of the
re¬
Republicans^ected with William
White
Floor
try
Merlyn
and
the
loud
Adminis¬
purpose
was
60
re¬
or
voting vested
Congress who will rise
They will protest, be¬
specific
Co.,
governmen-
it reports
of credit
will
within
tions of Oct. 12
tailment
because
&
Street, members of the New York
Stock Exchange, on Jan.
1 will
Southern Democrats will cooper¬ admit Henry A. Zoeller to part¬
ate
with
Republicans to try to nership.
Firm Trading Markets
Should the RFC grant the loan
to Kaiser-Frazer auto to enable
is
Hentz
This objection exactly spotlights
the character of the "coalition."
*
ture automobiles which
H. Hentz to Admit
labor
versa.
this
to protest.
save
Figures
there
❖
interest.
When
tration and
could
Wilson—
Publishing
Governors, and other public
men,
firm's offering is the soundest—er—"
pealed if it affects
tronics orders.
that something in
surrender to the Communist
China
and
Finance,
organizations
were
would not appear to be in a
posi¬
tion to force the Seventh Fleet to
leave Formosan waters. It
may be
the nature of a
Lloyd
Boardman
Inc., 30 Rockefeller
Plaza, New York 20, N. Y.—paper
—free of charge to editors, col¬
umnists, commentators, Congress¬
is the soundest in the investment field—er—I
total
sponsible representatives of indus¬
completely in
the
-
bucking conservative meas¬
Many Southern Democrats,
Midwest Exch. Members
war
it would be pointless, they
Tentatively at least Republicans for instance, who now oppose pub¬
lic housing, may be expected to
CHICAGO, 111.—The Executive
think, to order into uniform men have given up any idea of getting
for whom there are no training improvements next year in either support it if it is safely sure of Committee of the Midwest Stock
facilities and war implements, and the Taft-Hartley or Walsh-IIealey defeat by a Republican Congress. Exchange has elected to member¬
Southern Democrats are inclined ship:
government
contract
acts.
perhaps, not even uniforms.
Russell Ebinger, Wagner,
Why
they had to give up the idea af¬ frequently to be Democrats first, Reid & Ebinger, Inc., Louisville,
*
*
*
fords a case study in the short¬ and
conservatives,
second — in Ky., and Thomas S. Koehler, Chi¬
At the very moment when Asi¬
in
which
their
comings of the so-called "coali¬ cases
party
is cago, 111.
atic war news was so black, re¬
tion"
terial
About all that Mr. Truman has
bargain with to
Michl
Foundation,
made
be
to
Facts
or¬
war
and the present, the
enemy equivalent to the entire output of
probably has put himself in a po¬ the radio and TV industry. How¬
sition to take care, of U. S. forces ever,
many firms in this industry
in
Korea, and lessened thereby may not be able to participate
to
E.
Ad¬
tions
U. S. bargaining power.
H.
Company, 30 Church Street, New
York 7, N. Y.—cloth—$2.95.
and
the
The—G.
Simmons
the
(This column is intended to re¬
noting that the Services
forces
were
established
on
the
Influential GOP members ap¬
flect the "behind the scene" inter¬
were, in their opinion, exceedingly
Korean peninsula they constituted
proached leading conservative pretation from the nation's
slow in ordering war materials.
Capital
a classical military threat to Rus¬
Democrats on the idea of amend¬ and
may or may not coincide with
Although Regulation W was de¬
sia's entire position in Asia, and
ing the acts. Both are said to be the "Chronicle's" own viewsJ
that Russia would at all costs see signed to cutback civilian produc¬
in need of amendment, and one
Co It that those forces were eject¬ tion of hard goods to ease the path
consequence of legislation would
of conversion to war production,
ed.
They constituted a threat to
Harold Jennys With
be to drive something of a wedge
big' industries hit by that
Manchuria which is the geograph¬ two
between labor union members and
order report a serious danger that
Delafield & Delafield
ical
funnel
through which Red
the big union chieftains who work
they will lose their employees be¬
power flows into Asia.
Delafield & Delafield, 14 Wall
100% for the Truman Administra¬
fore war orders come in. It is re¬
tion. Thus the political power of Street, New York City, members
In its pre-occupation with the
ported,
for
instance, that
only labor
could be weakened some¬ of the New York Stock Exchange
United Nations as such, the Ad¬ about
3% of the Detroit area's in¬
what at the same time these acts and New York Curb
ministration was not prepared for
Exchange,
dustrial capacity is currently obli¬
announce
that Harold W. Jennys
were improved.
the psychological shock brought
gated to war orders, although car
has become associated
with the
from Europe by Prime Minister
Southern Democrats said, "No,"
sales were badly hit by Regula¬
firm. In the past Mr. Jennys con¬
Attlee. It did not occur to the Ad¬ tion
they wouldn't go along with Re¬
W.
ducted his own investment busi¬
ministration that as between se¬
publicans on any enterprise which
The radio and television indus¬
curity and the UN, Europe was
would have the effect of weaken¬ ness in New York.
willing to let the UN go hang, try took a nose dive not only with ing the hold which the Truman
peace" with Communist China.
Alderfer and
Elements of Transportation Eco¬
with China, that could well occur.
power on a
memoirs
written by those now high in of¬
ficial
trust,
the
Administration
B.
nomics,
is
des¬
a
impulsively
mobilization.
than
it
"Now, I'm
become known until in fu¬
never
ture
r
Co., Inc., 330
West 42nd Street, New York 18,
N. Y.—cloth—$5.50.
reasonable
a
:
»•
—McGraw-Hill Book
military objec¬
new
be
must
On
the
other hand,
short of
assumption total
war, the coolest brains among
that these military leaders com¬
the military and control authori¬
municated this information to the
ties decidedly oppose full mobili¬
-White House and State Depart¬
zation.
More than that, they do
ment.. For reasons which may not want
It
63, Mass.
.
peninsula.
,.
Review,
Soldiers
Field,
House,
backing down of the Reds.
fensive which would threaten the
The mil¬
Reprinted
—
Business
•
to be the
expected
was
Margold
Economics of American Industry
show of force the result
mere
a
of
was
K.
Harvard
Gallatin
@FedFRASER