The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
Final
Edition
1943
DEC 10
"H
v
In
ESTABLISHED OVER 100 YEARS
|>S&
2 Sections-Section
1
I and.
ommatciaL
Beg.
Volume
New
Number 4236
158
I
t''
.
Office
Pat.
York, N. Y., Thursday, December 9,
Higher Interest Rate On A Refunding
Accomplished Fact To
Associate
Issue To Insure Making This An
Curb Inflationary Spending.
We have
yet
so
far toward
a
Biltmore,
country
not
Nov. 30.
3>
and soaring prices that all of the
war
by
Compared to
1943 had doubled in
pre-war
Sweden, Switzerland, Argentina, and Peru; had
France, North Africa, Bolivia, and India;
-<§>andhadrisen5
:
Economic
a
Fallacies
Of
MSB'S
"better world"
Profit Limitation Rule
kind of better
By A. M. SAKOLSKI, City College, New York
that
world
they
they
want
and
is
not
in
one
of
In
"free
a
has
handout." Mr.
sition
The
prog¬
have
nothing to fear but fear itself." As
to how we are going "to end the
(Continued
2320)
on page
is
material
with
in
appear
and
For Illinois
the
fundamental- nature of
profits.
A. M.
this
(Continued
see
page
on
page
General index
Sakolski
2334)
2314; Wis¬
2318.
page
widely
times, profit margins applicable
a trade or
industry. The
lies in
reason
States of Illinois
Wisconsin
conceived
on page
United States Savings and Loan League
War Conference Proceedings
2340.
Included in Special Section
Starting with
2325
page
United Lt. & Rwy.
United
Light &Pwr.
Dealt
in
the
on
York
New
bounds of the law."
the
Middle
countries
4 in
East,
price
have
tended
but
table
increases
-
to
be
for
it
this
but
on page
most
is. true
time
half
THE
as
2319)
and
other
NATIONAL BANK
Brokerage
Broaden your customer
Service
Established 1927
INVESTMENT
London
Geneva
-
NEW YORK 4, N.Y.
HAnover
CHICAGO 3, ILL.
State
2-0600
Teletype NY 1-210
SECURITIES
Troy
8770
HUGH W.
Buffalo
Williamsport
on
Request
LONG and
COMPANY
INCORPORATED
PHILADELPHIA
Albany
Pittsburgh
Teletype CG 1219
Prospectus
*
Street, New York 5
BOSTON
135 So. LaSalle St.
25 Broad St.
/_y
Rep.
64 Wall
15 EXCHANGE PLACE
Syracuse
634 SO. SPRING ST.
JERSEY CITY
LOS ANGELES
(
Dallas
I
correspondent
Hardy&Co.
facilities
Members New York Stock
Exchange
Members New York Curb Exchange
30 Broad St.
Tel. DIgby 4-8400
Year-end
We
m
are
SELLERS—
Public Utility
Welder Co.
Preferreds
■■-r-Net Prices—
Bought—Sold—Quoted
Over-The-Counter Securities
•
'
INCORPORATED
Membert
HART SMITH & CO.
Kobbe, Gearhart & Co.
—
MEMBERS NEW YORK STOCK EXCHANGE
TELEPHONE-RECTOR 2-6300
Corporation
Tele. NY 1-733
Federal Machine and
BUYERS.
BONDS
NEW YORK 5, N.Y.
Deposit Insurance
Member federal
New York 4
Trading Markets, always
BROKERS and DEALERS
14 WALL ST.,
service with Chase
I
Actual
BULL, HOLDEN & C°
;
and Dealers
R. H. Johnson & Co.
Exchanges
CHASE
OF THE CITY OF NEW YORK
Bond
for Banks, Brokers
Members New York Stock Exchange
reporting this went on to say:
Landon
said Republicans
Mr.
Exchange
Hirsch, Lilienthal & Co.
due
United Press
Richard Allen Lester
in' the
that
/
N.
Y.
Security
45 Nassau Street
Tel.
REctor 2-3600
Dealers
Ass'n
New York 5
Teletype 'N. Y. 1-576
Philadelphia Telephone:
Enterprise
6015
REYNOLDS & CO.
Members New
120
York
Stock Exchange
Broadway, New York 5, N. Y.
Telephone:
Bell
REctor
Teletype
NY
2-7400
1-635
Members
New
,
advices from Washington on Dec.
NEW YORK STOCKS, INC
Curb
within
bureaucrats
ting
should reject suggestions that both
as
it
was
in
1
<
parties adopt in their 1944 plat¬
November, 1918.
forms
"similar
declarations
on
In general, price inflation did
foreign policy."
not progress as rapidly during the
"Such a course would accelerate
first
four
years
of
this
war
the danger of a drift toward one
(August, 1939-July, 1943) as it
party in our country," he said.
did during the four and one-third
"This administration's : record on
years of World War I (July, 1914foreign policies is as uncertain as
November, 1918). As the accom¬ on domestic
policies. That record
panying table indicates, official
shows no one can be sure what it
price
levels
have,
generally
will do next."
speaking, increased perhaps half
Expressing fear that the Mos¬
as much so far in this war as they
cow
declarations
"settled little
did during the last war.
There
(Continued on page 2335)
are, of course, marked exceptions
like Greece, China, and parts of
SECURITIES
Preferred
in drafting legisla"arrogant and strut¬
as
Common, W. I.
Transport
Alf M. Landon
pro¬
Republicans
(Continued
Air
a
posal that "real Democrats" join
ends
war
for¬
tion to keep
great, if not
greater, when
this
coun¬
policy
with
the
be
be
and
certain"
be¬
will
the
to all dealers in
of
dealer
to
well
issue.
consin,
1
essence,
clear and consistent instance of fixing
no
in normal
items
and
reference
the
activities in
J
•
defined
the
eign
threat of post¬
war
inflation
adopted economic doctrine. There have
been examples of governmental price and
wage controls throughout history, but there
In This Issue
Special
to
pre¬
are
of the Admin¬
is
that
lieve
they
cisely
would
istration's "un¬
100 times
there
at
Moscow before
denunciation
Greece.
And
destructive of economic
regulation violates, in
with
ance
words of the President, "we
and
so
principles of
merchandising and trade, and is at vari¬
Walter D. Fuller
the
in
in
fundamental and established
and
Interest
a move
ciation of Securities Dealers.
and pros¬
that
or
over
reached
for
Occupied
China,
and
reason
of, the in¬
gredients of a
recipe
for
perity"
business, there
stability than the Profits Limitation plan
recently announced by the National Asso¬
all
peace,
half century of Federal regulation of
been a more preposterous propo¬
said
Fuller
that "we have
ress
a
never
agreements"
try." Mr. Land o n
coupled
and
Free
of
"so-called
the
and"disastrous
cities
some
in¬
dorsement
shortsighted"
7
Tur¬
100 times
or
in
Economist of the Federal Trade Commission
an
in
GOP
that
"reckless
Iran
Iraq,
times
80
can
have
Formerly
and
in
key and Syria,
know that the
and
levels, prices by the Summer of
times
all
of
talk
directly after
World War II has certainly not proved an exception to the
increased from 3 to 4 times in
Mr. Fuller said that the people of this
are
are
University.
have been accompanied by price in¬
being
fooled
the
on
war.
general rule.
one, Walter D. Fuller, President of the Curtis Publishing Company,
told the members of the Lions Club of New York at a meeting at the
Hotel
inseparable
Landon, addressing a
meeting of Republican
Junior Senators, in Washington on
Dec. 4, s a i d
luncheon
A. LESTER
of Economics, Duke
wars
Copy
Alfred M.
world's well-known inflations have occurred during or
and' there is much fighting and sacrificing ahead for every¬
won
So
flation.
victory that it is now apropos to
consider seriously the problems of peace, even though the war .isn't
come
Professor
Throughout history,
a
On Moscow Pact
Post-Wai
By RICHARD
Cents
60
Landon Urges Caution
-
Walter D. Fuller Expresses Belief That Large Percentage
Of Investors In War Bonds Will Hold On To Them
And Advocates
Price
1943
World Inflation: War And
When Peace Comes
.
S.
U.
York
Security Dealers Assn.
52 WILLIAM ST., N. Y. 5
Bell
New York
HAnover 2-0980
Teletype NY 1-395
Montreal
Toronto
ira haupt & co.
Members of
111
Principal Exchanges
Broadway, N. Y. 6
REctor 2-3100
.» WW"Hi-feU
Teletype NY 1-1920
aa.A
j.
.
2310
THE COMMERCIAL & FINANCIAL CHRONICLE
Thursday, December 9, 1943
;Trading Markets in::
Remington Arms
American Cyanamid Pfd.
V
BULOLO GOLD DREDGING
Alabama Mills
Botany Pfd. & Common
Birmingham Gas
Remington Arms
BROWN CO. Com. &
Bendix Home Appl.
Osgood, Common
Common
ELECTROLUX CORP.
United Gas Improv.
Warren Bros. Class "B" & "C"
MINNESOTA & ONTARIO PAPER
Residuals
Triumph Explosives
NORANDA MINES
KING&KING
;
■
GOODBODY <Sl Co.
40
New
York
Members N. Y. Stock
Dealers Ass'n
Security
Telephone
EELE TELETYPE NY 1-423
Axton-Fisher
BArclay
7-0100
Teletype
NY
120
1-672
Cinli
By KENNETH S. GASTON
Kearney & Trecker
Royal Dutch (New York Shares)
NY 1-1557
NewOrleans,La.-Birmingham,Ala.
Direct wires to
2-7815
CINCINNATI,
O.—At an an¬
meeting of the Mu¬
nual election
our
branch offices
Bond
Dealers
Group
New England P. S. 6%
New
Social Security
development that promises a greater stimulation" to their
respective activities than anything that has happened in - years.
Social Security led quite directly to corporation Pension
Plans,, and
these in turn have led to Employees
Profit-Sharing and Retirement
Pi. Pfd.
England P. S. 7% PI. Pfd.
of
Cincinnati, Ohio, held recently,
following
Directors
were
Dumont Lab.
the
Investment dealers and trust officers may thank
for
St., New York 4, N. Y.
HAnover 2-0700
Municipal Men
nicipal
President, Distributors Group, Incorporated
■
Pittsburgh Hotel, 5's, '62 & '67
t'
•
,
American Util. Serv. Pfd.
And Retirement Trusts
|
Labor., Common
REctor
•
Members New York Stock Exchange
25 Broad
BROADWAY, NEW YORK
Tel.
«'
■
Stei ner, Rouse & Co;
"
Employees Profit-Sharing
Tob., A & B
Consolidated Mach. Tool Units
Du Mont
NEW YORK 6, N. Y.
\
-
,
Members
New York Stock Exchange
New York Curb
Exchange
;
Exchange and Other Principal. Exchanges
115 BROADWAY
Exchange PI., N.Y. 5 HA 2-2772
"•>'
McDonnell
::
Established 1920
Members
Brighton Mills, Units
Walworth Pfd.
a
.
men
aiiij
Baltimore
Members
120
Stock
The
Trusts.
Exchange
Pension
Plan
was
the
man's prayer
Broadway, N. Y. 5
—
Profit
—the
WOrth 2-4230
answer
to
Y.
1-1227
<
mittee
profit
-
plans
were
mony as
dealer
MacMillen Co.
most
his
in
Social
*
$3,000
the ||
and
Vanderhoef & Robinson
31
New
York
Curb
Nassau Street
Telephone
Bell
t i
r e
do
employees.
1939
an
to
higher-paid
raise
the
testi¬
Central States
*5%
of
set up
Kenneth
S.
Gaston
Pension Plans, in that con¬
made by the corpora¬
within certain limits, were
tributions
tion,
In
•
elaborate
considered
•
investigation of
deductible
this subject was undertaken by a
business
as
before
(Continued
expense,
computing inpage 2324) -
on
Difficulty Getting Small Business
*Dealt in
J. Allison Dryden, DryCo., Inc., William Einhorn,
Einhorn & Co., James M.
IJutton,
Jr., W. E. Hutton & Co., Carl Mittendorf, The Weil, Roth & Irving
Co., Wm. C. Seufferie, Wm. C.
Seufferle &
the result of the failure of
20 Pine Street, New York 5
Teletype NY
our
fi-'
to
1-1843
machinery to adapt itself
changes in our business and in¬
the part of commercial
on
investment
or
the
bankers.
banks
But
if
exists, and if America is
gap
The
Association
will
Electronics
Room
of
Moxie Co.,
Punta Alegre
Sugar
vestment market Seem to be
Time, Inc.
Vertiente-Camaguey
37
N.
Y.
Sugar
Teletypes—NY
1-1126
more
&
of
ficulties
obtaining
credit
through the commercial banking
system.
Nevertheless,
bankers
should
be developing
the facts
and, on the basis of facts already
developed or to be developed,
they should see if there is any¬
thing which they can or should
Security Dealers Assn.
Wall Street, New York 5, N.
Tel. HAnover 2-4850
Bell
to
generally admitted than the dif¬
SreeueaXompcmu
Members
or
enterprises, have no
place to go to obtain. the funds
they require. The difficulties of
obtaining capital for small busi¬
nesses through the organized in¬
Com. & Pfd.
Y.
1127
meeting
do about the situation.
have been
no
There may
sins of commission
is going to
gap
should
it is
say
private
ness
ture
must have
well
as
an
as
well
as
eye
an
as
busi¬
New
to
the
ground if it is going to thrive and
develop.''
plans and planners.2'
point he said:
war
On this
"At times they are aq irritant
to those who want to get on with
the war to the exclusion' of
every¬
thing else., As
of
review
the
leading
com¬
an
irritated friend
mine
put it, ~ these planners
nothing about the past, very
(Continued on page 2338)
know
'
.
5
4s, 1934
BUCKLEY BROTHERS
Members New York Stock Exchange
63 Wall Street, New York 5,
N. Y.
WHitehall 3-7253
Direct Wires to Philadelphia & Los Angeles
Hawley Is Sales Mgr.
For Paul & Go., Phila.
PHILADELPHIA, PA.—The in¬
vestment firm of Paul &
Co., Inc.,
Walnut St., announces that
Philip E. Hawley, formerly asso¬
ciated with the Philadelphia of¬
1420
Dick & Merle-Smith
.
Mr. Sproul in his remarks. took
occasion to refer to the fact that
"the world to-day is full of post¬
.
YORK
Chicago, Milwaukee,
York
to. the fu¬
ear
Exchange
NEW
HAnover 2-9470
St. Paul & Pacific
on
panies in the field.
credit with which to start
carry on new
Elastic Stop Nut, Com. & Pfd.
a
Exchange, 11 Wall Street,
6th floor. Speakers will be David
Smith, director of research of
Philco Corp. who will discuss fu¬
ture developments of the indus¬
try, and S. Logan Stirling who
agencies. Banking
or
I
v;
Stock
will
And
,!
Customers'
the
of interest to you how it is filled
and whether by public or
borrowers, worthy of capital
America, the
ST.
Chicago Rock Is. & Pacific
at 3:45 p.m. in the Board of Gov¬
still
filled.
York Curb
HI
WALL
1
Tuesday, Dec. 14
sized
Atper. Utilities Service, Pfd.
of
hold
on
dustrial organization. It is claimed
that
many
small
and
medium
be
Members New
64
Teletype NY 1-1140
5s, 1975 and 5s, 2000
ernors'
be<^
nancial
Telephone: WHitehall 3-1223
Bell
is held to
Exchange
Frank C.Masterson & Co.
for the ensuing year.
Brokers
The financial gap
York Curb
Co.
newly
elected Directors
met and appointed J. Allison Dry¬
den, Chairman and William Ein¬
horn, Secretary and Treasurer,
our attention."
Mr.
Sproulr whose remarks were made in a
talk before the Mid-Winter meeting of the New
Jersey Bankers' As¬
sociation in the Reserve Bank Building in New
York, went on to say:
H. G. BRUMS & CO.
New
The
Hear Go Electronics
serves
on
elected:
den &
With respect to post-war problems which will concern our whole
banking system, Allan Sproul, President of the Federal Reserve Bank
of New York, cited on Dec. 3 "the financial
gap" as one which "de¬
6s, 1952
.
Preferreds
Harriman Bldg. 6s, 1951
Customers Brokers To
Limestone
&
J. Allison Drydeu
The im¬
the special tax
was
Elec.(Va.)
sy2 % Debentures
Reiter Foster Oil
of Gov¬
reward given to corporations who
&
Common
rather
man
sights
Security.
ernment Social
WHitehall 4-8120
given
was
leading industrial¬
hearings the insur¬
mediate result
ment
executives and
1-1543
than
the
higher- paid
7-4070
Teletype NY
System
solve
problems
Exchange
New York 5
COrtlandt
hence
not
r e
and
our
At these
Broadway
Bell System Teletype NY 1-1919
of
"incentive"
and
examined
to their results
lem of the
per year
salary scale
Preferred
65
forms
industry was well repre¬
sented, the investment bankers
conspicuous by their absence.
v
The* objective was to persuade
industry itself to solve the prob¬
||
above
United Cigar Whelan
Members
ists.
Se¬
do not increase
Preferred
sharing
All
ance
curity benefits
Taggart Corporation
Finance.
on
by many of
||
optimis- J
tic mood.
Common
Members New York Stock Exchange
Members New York Curb Exchange
;
sub-committee of the Senate Com¬
Sharing Trust
goes beyond
the dreams of
Teletype N.
Edward A. Purcell & Co.
salesr-
.J;-'J
■
.
the investment
Bell
insurance
an
To Admit H. L Mills
fice of R. H. Johnson
Mills, member of the
New York Stock Exchange, will
become * a partner
in the New
York
Stock
Exchange firm of
Dick & Merle-Smith, 30 Pine St.,
New York City, on Dec. 16. Mr.
Mills
has
recently been
doing
business
broker.
as
associated
become
Herbert L.-
an
Prior
individual
he
thereto
partner in Auchincloss
floor
was
Sales Manager.
&
with
Co., has
them
as
;
,
Carey Trust-All Issues
Galveston-Houston Co.
Jefferson Lake Sulphur, Pfd. & Com.
a
Jonas &
& Mills.
Naumberg
Lawrence Portland Cement
*
Trading Markets in
FASHION
$6
Convertible Preferred
Common
Pfd.
Preferred
Members
6% & 7% Pfds.
I
G. A. Saxton & Co.. Inc.
170 PINE ST., N. Y. 5 WHitehall 4-4970 I
Troster,Currie & Summers
Simons, Unborn Sr Co.
Members New York Stock Exchange
25 Broad
HAnover
St., New York 4, N. Y.
2-0600
Tele.
NY 1-210
74
N.
Y.
Security Dealers Ass'n
Trinity Place, N. Y. 6
HA 2-2400
Teletype NY 1-376-377
Private
Wires
Detroit
-
to
Buffalo
Pittsburgh
-
-
Cleveland
St. Louis
New York
BOSTON:
NEWARK:
201 Devonshire St.
744 Broad St.
Pittsburgh Railways
Queen Dyeing 5s, 1944
(J. S. Radiator Pfd.
GOVERNMENT,
Bought—Sold—Quoted
Virginia Public Service
Teletype NY 1-609
& "B" Common
FASHION PARK, Inc.
Pfds.
William Street,
68
Nu-Enamel
Oklahoma Texas Trust
Members New York Stock Exchange
FASHION PARK, inc.
Eng. Pub. Service
All
*
*
Pfd.
Green Mountain Power
New
R. W. PRESSPRICH & CO.
Deb. 5s, 1963
Central III. Pub. Service
$6
PARK, Inc.
MUNICIPAL,
York
RAILROAD, PUBLIC UTILITY
8C
INDUSTRIAL
INVESTMENT
BONDS
Corrugating
♦Analyses
upon
request
STOCKS
T. j. FEIBLEMAN
Knowledge
•
...
Experience
•
for Investors
Facilities
Members
New
& CO.
Orleans Stock Exchange
41 Broad Street
BOwling Green 9-4433
New York 4
Tele. NY 1-493
LkwIX.
JL&UlllUU* iiiJU^xUa^yiu^.K'ik W kilfltU' It^'duHJUw ^uSH' M.
a.
u
luV
1
,
uWili'H Ml *1
,
•'V1
THE COMMERCIAL & FINANCIAL CHRONICLE
Volume 158 ''Number 4236
:
;
The COMMERCIAL and
(
Reg.
-
CHRONICLE
FINANCIAL
U. S. Patent Office
William
B.
Dana
25 Spruce Street, New York 8
BEelcman
We
Ralston Steel Car
are
interested in offerings of
-
Chicago Rwy. Equip.
-
;
^
.
H. H. Robertson
William
Dana
D.
Seibert,
Riggs,
President
Business
Manager
Stromberg-Carlson
P. R.
Thursday, December 9, 1943
Published twice
■
every
(general
Thursday
and
news
and every
,
advertising issue)
(complete statistical issue—market quorecords,
corporation,
banking,
clearings, state and city news, etc.)
Other Offices: Chicago—In charge of
Fred H. Gray, Western Representative,
Field
Building (Telephone State 0613).
London—Edwards & Smith, 1 Drapers'
Gardens, London, B.C.
Copyright 1943 by
f
Spi
B.
William
Dana
STRAUSS BROS.
Members
32
Subscriptions in United/States and
Possessions, $26.00 per year; in Dominion
of Canada, $27.50 per year;\ South and
Central
America, Spain,
Mexico
and
Cuba, $29.50 per year; Great Britain,
Continental Europe (except Spain), Asia,
Australia and Africa, $31.00 per year,
Monthly Earnings Record—Mth.. .$20 yr.
State & Municipal Compendium—
Semi-Annual ................... .$35 yr.
,
NOTE—On account of the fluctuations
in the rate of exchange, remittances for
foreign subscriptions and advertisements
in New York
NEW YORK 4
Wall
Harrison 2075
Teletype CO 129.
DIgby 4-8640
Teletype NY 1-832, 834
Research Professor
funds.
PRUDENCE- BONDS
CORPORATION
PRUDENCE COMPANY
Bought—Sold—Quoted
Newburger, Loeb & Co.
II
Members
40Wall
New
York
Stock Exchange
WHitehall4.6330
St.. N.Y. 5
Bell
TeletTP*
NY 1-2033
'
.
||
The
at
L J. GOLDWATER &
Director,
re¬
spectively, of the National Association of Securities Dealers,
made it clear a couple of weeks back that the Association did
not have the slightest intention of rescinding its obnoxious
"5% " profit limitation rule, dealers throughout the 'country
pinned their hopes on the SEC. They felt sure that because
in which this rule
was
<£-
query
39
HAnover 2-8970
ever
the
correct
it
the
—
—-
of the Sherman Anti-Trust
Act, which bears date of July 2,
1890.
So, for nearly half a cen¬
tury we have been striving to
solve
this
problem.
Numerous
be
may
is
Federal Water
Mdxie Co.
Mo. Kansas "A"
have been added to
amendments
that
the original act, all with the pur¬
r e a son
of strengthening it and mak¬
it really effective.
Who is
there to say that we have made
substantial progress to that end?
does not lie in
pose
the absence of
ing
those huge ac¬
cumulations of
which
be
The absence of
here called
in
for
are
found
in
England
e r
a
some
a
respects
so
United States, and
A in-
solution of the
problem, suggest
may
has
tended
Members
to
defeat
New
111
membership, the Commission would take prompt steps
nullify it since, as the "Chronicle" previously pointed out,
the Maloney Act, which gave birth to the Association, and
thereby made it a quasi-governmental agency, makes it man¬
datory upon the Commission to see to it that the affairs of-
Tax
Bell
More Dealer Comments On NASD Rule
Such
earned.
bonds
were
.
unfettered^
"income'
called
debentures.
or
:C'"
;'•?
Fixed Interest
interest is payable only if certain
Because
a
vs.
conditions
bond
"Income"
debenture
occurs
not
(usually
are
if
met.
an
that
it
Firni Bids On
Active
or
The
a
Securities
'II
Pacific Qaait
SECURITIES
SecWUtieA
COMPANY,
Qompsey-Tegeler Go.
(Special to fhe Financial
.
ST.
Chronicle)
has
become
associated
with Dempsey-Tegeler & Co.,
North Eighth St., members of
New
F.
LOUIS, MO.—Clarence
Blewer
York
and
St.
Louis
407
the
Stock
Exchanges. Mr. Blewer was for¬
merly in the municipal trading
department pf the MercantileCommerce Bank and Trust Co.,
with
which
he' had
been
asso¬
ciated for many years.
Public National
Bank & Trust Co.
National Radiator
Bottling of Chicago
Panama Coca-Cola Bottling
Company
United Gas Improvement
Residuals
Wyeth & Co.
•Since 1893'
Members New York Security Dealers Assn.,
f^
C. F. Blewer Mow With
Inc.
DUNNE & CO.
n
170 Broadway
COrtlandt 7-6190
Bell System Teletype NY 1,-84
Coca-Cola Bot. of Los Angeles
Coca-Cola
Est. 1926
tttRlOR&lOM
Coca-Cola Bottling Co. of N. Y.
SUGAR
Inactive
or
is
met, and no default
interest payment is
interest, however,
company, while stock is usually cumulative.
find any support whatsoever among the dealers.
What support
there is, just as was the case with the repudiated and discredited represents essentially partnership
with preferred holders resembling Advantages of Income Debentures
disclosure rule, seems to be coming from the larger houses.
Can
Income debentures differ from
it be that there is a division of the industry into two camps of limited partners, a fixed interest
bond or debenture of the normal preferred stock chiefly in repre¬
opposite interest and opinion?
Surely the larger institutions are
not trying to drive the smaller fry out of business?
This is a type requires that both principal senting an obligation rather than
dark thought, but as I. observe what goes on from time to time, and interest be paid or else the a share and in having a maturity
throw
the
issuing date; but the important difference
such as the apparent anxiety of member houses to force as many holders can
over-the-counter securities on to the listed boards as possible, while company into receivership even is that interest on income bonds
for a single default in interest.
is a charge deductible before Fed¬
constantly opposing any move to reallow any part of the their
board commissions to non-members, and the seeming more than
"Income" bonds or debentures, eral income and excess profits
ready disposition on the part of the larger units to endorse any are obligations of the issuers, or taxes, while preferred dividends
restrictive * measure proposed, such as the above-mentioned dis« "debt"; but, according to the pro¬ cannot be so deducted, except in
(Continued on page 2335)
visions of the individual issue, the
(Continued on page 2317)
ceiling should
is debt of
165
a
Over-the-Counter
earned)
IIODSON &
System Teletype, N. Y, 1-2480
YEAR END SALES
Advantages Influence Corporate Financing
securities
.
A&sn,
our
Mods
when
DEALER NO. 83
Dealers
Broadway, New York, N. Y,
The following is taken from a recent issue, of "Investment Tim¬
ing," issued by the National Securities and Research Corp. of this city:
Many corporations in the past, particularly railroads, in reor¬
the Association are conducted in a democratic manner. As
ganization proceedings have employed the device of replacing fixed
the days slip by and the SEC shows no sign of taking action
interest-bearing securities with subordinated mortgage bond or de¬
benture issues upon which a return was payable only if, sis and
;
(Continued on page 2335)
I cannot understand why the proposed ,5% profit
Security
_-—
efforts,
the absence of which in England
dustry.
'
Our anti-trust policy may be has spared that country the necessaid to have started with the pas(Continued on page 2318)
.
York
REctor 2-5288
be
something at the very founda¬
tion of our anti-trust policy that
' ■{
J.F.Reilly&Go.
after nearly
jthe possibility that there
Fred'k C. Hicks
Wickwire Spencer
trust problem
mapy
50 years
of striving, to reach anything like
this feature of
b d
to the
failure
our
of the largest
examples
of
m
England, in
similar
to
to
Teletype NY 1-1203
foisted upon
the
Tel. WHitehall 3-0272
Broadway
New York 6, N. Y.
sage
"Why?" What¬
trusts,
& Co., and Wallace H. Fulton, Chair¬
St., New York 4, N. Y.
CO.'
INC.
arises:
once
are
of the Board of Governors and Executive
Broad
QUOTED
-
tem, should not be struggling over what here is one of our most
G. Biter, 3rd, of the New York Stock Ex¬
;
SOLD
Complete Statistical Information
vexatious problems!
there
manner
-
Members New York Security Dealers
Recently I put the question to an English economist: "Has
England?a trust problem such as we have?" Promptly came the
reply: "No, nothing of the sort."
Strange, isn't it, that a country,
supposedly resembling ours in the main features of its economic sys¬
ALL ISSUES
01 Dealers
of the autocratic
BOUGHT
And Undesirable
capital
Jtiter
CERTIFICATES
University of Cincinnati
Individualistic, Profit Motive Economic System,
Competition Is All-Pervading And Of The Highest
Importance—But Unlimited Competition Is, Scientific¬
ally Speaking As Well As Practically, Both Impossible
Delay In Abrogating NASD
"5% Profit" Rule Sths Anger
When Henry
of Economics,
TITLE COMPANY
In An
SEC
25
Street, New York
By FREDERICK C. HICKS
certain
man
bonds
Telephone: WHitehall 4-6551
CHICAGO 4
.«
Dealers Ass'n
answer,
change firm of
99
Our Anti-Trust Policy
Security
Other Publications
Bank and Quotation Record—Mth. $20 yr.
be made
listed
and
Obsolete Securities Dept.
Teletype NY 1-5
Board of Trade Bldg.
New York
Broadway
3, 1879.
must
both
on
stocks
high. Contact us .now—before
the tax selling rush starts.
Members New York Stock Exchange
Company
as second-class matter Feb¬
ruary 25, 1942, at the post office at New
York, N. Y., under the Act of March
•
V
Telephone HAnover 2-4300
Cramp Shipbuilding
bids
unlisted
are
25 Broad Street. New York
Reentered
,
Xdchtenstein
and
Monday
tation
,
GET GOOD PRICES
CUT TAX LOSSES
Trask & Co.
•encer
Mallory
week
a
GAIN TWICE-
PREFERRED STOCKS
Editor and Publisher
William
AND COMPANY
Public Utility and Industrial
3-3341
Herbert D. Seibert,
[\mm
"
High Grade
Company
Publishers
rl
2311
NEW YORK
LOS ANGELES
Broadway, New York
Hon Rqse $ Truster
Established
Members N.
Dealers Assn.
Trinity Place, New York 6, N. Y.
Telephone:
Teletype:
BOwIing Green 9-7400
NY 1-375
74
Members Los Angeles Stock Exchange
1914
Y. Security
C. E. Unterberg & Co.
Members New York Security Dealers Assn.
61
Broadway, New York 6, N. Y.
Telephone BOwling Green 9-3565
Teletype NY 1-1666
THE COMMERCIAL
2312
& FINANCIAL CHRONICLE
Thursday, December 9, 1943
PHILADELPHIA
WARREN BROS. CO.
TRADING
Our Unlisted
Trading Department is prepared
to
Buy, Sell
or
Quote stocks of the following
/
Bought - Sold
Coca Cola
Brill
Quoted
Members N. Y, Stock
<5^ '&
new york
TELEPHONE
V
Chicago
BARCLAY
7-0100
C
Cum. Pfd. :
Memorandum
BUCKLEY BROTHERS
Members New York Stock Exchange
\
Walnut St.,
1529
Bell
NEW YORK
Philadelphia 2, Pa.
Teletype
Pbila. RIT 4488
'
v
•
•;
;
o *
York
Du
REYNOLDS & CO.
Corporation
120
New York
Broadway
.
«.
.
!
j-..-.-.. /;■
-
b,,,
'
iV
.
■■
We
|
ing Ry. 5s, 1927
;
have
continuing
a
interest
in
Southern Advance
Chicago City Ry.
Bag & Paper Co.
5s, 1927 "A" & "B"
\
Common Stock
i
Members New York Stock exchange
Hearst Pub.,
V'v-'
Chicago City & Connect¬
:
-
Mont laboratories
Moxie Co.
■
N. Y. DI 4-1527
1v
"■
upon request
*I
'
J.
vi'X.
PR, 265, V. ?::
—
/
CINCINNATI
Statistical Data
Request
on
Members Philadelphia Stock Exchange
TELETYPE .NY' 1-672 '
"
;
Corporation
.7%
Exchange and Other Principal Exchanges
1
105 west adams st.
115 broadway
LOUIS
LOS ANGELES
MARKETS
Goodbody & Co.
CHICAGO
ST.
-
•
COMPANIES
BOTTLING
"C"J|
Class "B" and
.
"A" Pfd.
I
■
:
^
ijPl
JSkT li
^
Established .1926
:
Direct
.
120 Broadway. New York
.
bHw
Bell
:
Members New York Security
Wires
BOSTON
to
HARTFORD
—
BOENNING & CO.
Phone: HEctor 2-8700
Teletype NY 1-1288
h
:
1606 Walnut
Association
St., Philadelphia 3
Pennypacker 8200
PHILADELPHIA
—
Private
*
ACTUAL TRADING MARKETS
PH 30
Phone
N. Y. C.
to
COrtlandt
7-1202
;
DALLAS
BOSTON
ST. LOUIS
MOXIE CO.
Convertible
Preferred
'' /
\
TRADING MARKETS
|
\
„
Bought
So'western Pub. Serv. Com. & Pfd.
ELASTIC CORP.
Dallas Ry. & Terminal
Check
LUCKHURST & CO.
:
Members N. Y. Security Dealers' Assn.
,
fl. S.,
Britin Mi
Capitol
Common
from
dallas, TEXAS
days
the
(Nov. 28-Dec.
confidence
voiced
ing
peace",
and
active
1), also
"an
in
endur¬
through cooperation
participation oL both
large and small nations.
these
At
Governments
joint
j
guarantees
three
on
a
statement
that
sure
Participation In World Reconstruction
Only With Private Capital Dependent On
Government's Attitude Toward Neighbor Countries ;
American
many
text
of
three
cording
from
the
declaration
by
follows,
ac¬
leaders
United
to
Press
We, the President of the United
States of
Ameripa,- tfce Prime Min¬
ister
Great
and
the
the Soviet
Union, have
met in these four days past in this
the capital of our ally,
Iran, and
have shaped and confirmed our
policy.
common
nations
our
gether in the
that
As
will
war
shall
work
to¬
and in the peace
follow.
discussions
concerted
struction
our
of
the
We have reached
ment
as
With
diplomatic advisers
our
to
the
and
have
we
for
the
German
de¬
forces.
complete agree¬
scope
and timing
Teletype—SL
80
repeating
underwriters
in
the
'twenties
in
with
the
extension
of
Jamieson § Go, Now
Bache
Correspondents
J. S. Bache & Co., 36 Wall
St.,
City, members'- New
York Stock Exchange and other
leading Exchanges, announce that
Jamieson' & Co., members New
New
York
York Stock
"
:
go
Exchange, and Chica¬
Board of Trade, have become
their
correspondents. The main
_
we
office of Jamieson & Co. is in the
have surveyed the problems of the
We shall seek the cooper¬
First National Soo Line
Minneapolis, with other offices in
future.
and
active
participation of
dedicated,
as are our own
to the elimination of
slavery,
ance.
oppression
We
will
peoples,
tyranny and
and
welcome
intoler¬
them
as
they
may choose to come into the
world family of democratic: na¬
tions.
I
,
destroying the German armies
by land, their U-boats by sea, and
our
their
war
plants from the air. Our
attacks will be relentless
and
in¬
Dr.
conferences
dence
to
from
look
we
the
these
day
untouched
(Continued
by
with
when
peoples of the world
lives
friendly
may
confi¬
all
live free
tyranny
on page
the
2336)
and
Winkler
'J
&
Co., and Professor
Jordan of New York
Henry P.
University. Dr. Frederick Haussmann, former adviser on oil to the
Venezuela
Government,
Trustworthy, Experienced,
Unlisted Stock & Bond
spoke
briefly.
.'.'
TRADER
j •!;
with
Supporting Senator Butler, Dr.
Ibero-American affairs, and advo¬
cates
of
American
closer
ties
among
instances
seems
and
ts ve
*:
spending.,
to
affect
a
non-produc¬
"Loans,
adversely
the
Dr.
whether
economy
credits
loans
to
Henry P. Jordan
on
the
and
behalf
of
and
of
southern
republics.
What the Govefnment
has
so
severely
attacked
and
sharply
criticized
(Continued
only
on page
or
association with,
interested
in
a
decade
2339)
existing
facilities.
pointing
time
interview.
cial
?5
and
N. Y.
Reply
for1
ap¬
personal
Box S 8, Commer-
Financial
Spruce
St.,-
■
may
conservative
expansion of profits with their
issuance
the
by,
high standing firm who
be
constitute
prlvrte or governmental, unless
employed for strictly productive
project^, are bound seiner or later
to
ment
the
republics
have
been
disturbed by what in
indiscriminate
connections
good
references locally and through-^ j
out the country seeks employ¬
Winkler declared that students of
some
Emerging
Max
Building,
St; Paul and Duluth, Minn., Fargo
■and Grand Forks, N. D. and Sioux
Falls, S. D. '
Winkler
seriously
.
plans
v ;;
"The Administration appears to
connection
the
war,' our miltiary
staffs have joined in our roundtable
re¬
for
war
creasing.
to
i-v
' '•
Excerpts from Dr. Winkler's
overwhelming masses of the peo¬
ples of the world and banish the
No power on earth can prevent
;
We expressed our determination
that
which
generations.
System
the
Rio
V?:
marks follow:
nations, large and small, whose
peoples in heart and in mind are
Powers
Britain,
;
and
the
of
all
A Declaration of the Three
of
States
south
the mistakes made
by certain American bankers and
of
509 OLIVE ST.
Bell
ation
advices
Teheran, Iran, Dec. 1:
premier of
United
Grande."
be
jance.
the
tween
will command good will from the
terror
Co.
^
Members St. Louis Stock Exchange
countries
nations
and
240
of both lender and borrower, and
thus tend to impair relations be¬
will. be
peace
D.
SAINT LOUIS
/♦>-
; •
a
L.
City College of New York, member of the brokerage firm of Bernard,
peace, we are
concord will make
make
MO.^p
problems at the New School for Social Research in New
The speakers included Dr. Max Winkler of the
enduring peace. We recogni2e fully the supreme responsibility resting upon us and all the
to
Bldg.
York City on Dec. 2.
the
our
.
5r/x
The pros and eons of Senator Hugh A. Butler's recent attack
against the Government's program of financial aid to Latin American
nations were vigorously debated at a round-table discussion on Latir.
an
scourge
The
to
as
Landreth
803
-
•
San Antonio
.ST. LOUIS 2,
v ■
And
regarding rela¬
tions
with
Iran,
assuring
that
country of its "independence, sov¬
ereignty and territorial integrity"
and of post-war economic assists
the
victory
ours.-/:
it
meetings the
also
agreed
that
Houston
Teletype BS 424
•
,
four
Peltason, Tenenbaum, Inc.
••
-
Effective
concerted
were
reached "as to the scope and
undertaken
Southwestern Securities
RAUSCHER, PIERCE & CO.
9, mass; :. v:;r..
■
Holds
Former
and complete agreement
timing of operations which will be
east, west and south." This was revealed on
Dec. 6 when the joint declaration, which was signed by the three
leaders on Dec. 1, was made pub- o-———
—
——
———
lie.
The common understanding , of operations which will be un¬
reached, it. is said, "guarantees \ dertaken from the east, west and
that victory will be ours."
The j south. The ,common understandtri-power conferences, which lasted ing which we have here reached
was
Preferred Stocks
;
request.
on
GoverEtstteEifs Financi&l-AEd Program To Latin
Amer. Republics Oebted by Winkler end Jordan
Roosevelt, Prime Minister
Teheran, Iran, plans
"for the destruction of the German forces"
on
Analysis
Teletype—SL 486 "f:
Mndorstanding Assuring Victory
•Churchill and Premier Stalin in
4330
v
;;
-vc':';'!'COMMON*
^
RMsda''Rea8h;^;®f;|,§^
At the conferences between President
us
Shawmut Bank Building V
boston
New York 4/ N. Y.
60 Broad Street
Pont, Bontsey Co.
g
Situation
Industry
6% 1951
,
All Texas Utility
Quoted
du
Growth
a
York Corporation
Southern Union Gas Common
,
REMINGTON ARMS
—
Interesting
In
'
,
Republic Insurance
COLONIAL STORES
UNITED STOCKYARDS, PFD.
Sold
b'. b
An
:
:
UNITED
—
Quoted
—
■'i-vC'-S'V;''-•?*■/'■ Dr. Pepper
BIRD & SON
"B" Common
Bought
Sold
—
Chronicle,
New York
8,
:
mmmmmmmm
»*•••
AM u k
k*
XAku'iJttt i'iujr Jlti'Jlkt Hi ♦("
vVolume 158
^
s^ivw^vt
Western.
& Rio Grande
Denver
An Inactive Rail-Attractive for Dealers
2313
CHRONICLE
THE COMMERCIAL & FINANCIAL
Number 4236
<UAfmmmkhummw^
vtffl liJhr^»»rH4i»ww,iiM** ubif
U -i*'
Chicago North Western
Minneapolis, St. Paul & Sault Ste. Marie
Midland
Valley Firsts
Western Pacific
(recently reorganized)
New, when,
-
Brown
and if issued
as
SOLD
BOUGHT
Canadian Bank Slocks
Vilas & Hicicey
■
Members
pflugfelder, bampton & rust
Exchange
Stock
Ydrk
New
New York 5, N. Y.
49 Wall Street
"
•
,
Telephone; IIAnover 2-7900
New York 6
61 Broadway
,
Sui Life Assurance
Exchange
Stock
York
New
Members
HART SMITH & CO.
1-310
Bell Teletype—NY
Telephone—DIgby 4-4933
NY 1-911
Teletype:
52
'
Operating Earnings For 1943 Of $4 ISiSlion
Improved treatment for the bulk of Seaboard Air Line Railway
securities, made possible by allocation of an additional $5,091,085
cash and $8,989,120
High Exceeded Billion Dollars; To Coiv
stockholders, J. Stewart
Baker, Chairman of the Board of the Bank of the Manhattan Com¬ in
equity receivership since De¬
pany of New York, stated that, "based on actual figures for the first
cember 30, 1930. The compromise
nine months, and estimated figures for the last three months, the net
operating earnings of the bank for this year will amount to approxi¬ plan >vas presented to the court
mately $4,000,000, compared with $3,623,900 for 1942." :.
by E. E. Sunderland, chairman of
•
went
Baker
Mr;
report on Dec. 7 to the
annual
on
to say:
ized
on
feel
However, the directors
present conditions^ in
th'e greaV^kpansion in the
under
view of
of
business
securities for eleven
months of this year, after
their
on
company.
the sale of United States
Government
—
~
investment in the
1
turn
figures do not include
net profits realized on the sale of
securities/ The net profits real¬
'These
deduct¬
the ''company, a con¬
policy which
dividend
servative
appropriate ► amount for permits substantial sums to be
added to undivided profits and re¬
taxes, amounted to $2,530,000. In
accordance1 with our policy of the serves is.,in the best interest of
the company and, therefore, of its.
past five years, these profits are
ing
an
added each
stockholders." v:
for
"i
our
quarter to the reserve
Government bond- port¬
the
folio.-On
securities
net
realized.
were
of return
of
sale
profits
The
on
year
with
pared
as
the
items
funds
invested
averaged
have
as
in
our
com¬
these
$165,000,000
more;'our net operating earnings
have increased in
that
taxes
•
,
,
we
-
also
\;
spite of the fact
charged against oper¬
ating earnings will be over $1,000,-
1, 1941, providing for quarterly
payments of an amount equiva¬
lent to 6% of the first $3,000 of
officers and other
annual salary to
employees whose annual salaries
are not more than $5,000. In order
help the members of our staff
'meet the further rise in the cost
to
application has been
000 higher than in 1942."
, T made to the proper Government
;
Mr. Baker announced in his re¬ supervisory authorities to permit
port that "in addition to the regu¬ an increase in this supplemental
lar dividend for the current quar¬ compensation
to - 12%, effective
ter, the directors plan to declare Oct. 1,. 1943, and to allow it to
be paid on the first $4,000 of an¬
a special year-end dividend of 10
cents per share, as they have done nual salary. If this is granted, a
for the past several years."
Mr. further application will be made
to permit this compensation to be
Baker further said:
;
"If this is done, dividends de¬ paid also to those whose salaries
are between $5,000 and $7,500.*'
clared for the year will amount
of
living,
It is noted in the report
which will be ap¬
proximately 45% of net operating "during the year, a milestone
earnings, not including net profits reached when the assets of
realized on the .sale of securities. company exceeded one billion
$1,800,000,
the
The directors are conscious of
lars."
natural desire of the stockholders
to
■
The report
.V-v
adds:
(Continued
obtain if possible a larger re¬
■
that
was
the
dol¬
::
-
'
.
on page
;-:
differences
to " compose
Seaboard ;
security
further
or
missed
the
by
order
"One way or
and
dis¬
and '
au¬
cation
can be presented and acted
Consequently, it likely will
be some time in January before
solicitation of deposits can start.
Stock
;
j
allocations
Frederic H. Hatch & Co.
per
>'
63
.
!
Approval of the Commission is
required under Section 20a of the
Incorporated
*
New York 5, N. Y.
Bell Teletype NY 1-897
Wall Street
,
(Continued
2337)
on page
!<$>SEABOARD
OF
(Per
SECURITIES
UNDER
$1,090 Principal Amount of
COMPROMISE
PLAN
Indebtedness)
<
Common at
First
Income
mtg. bonds
mtg.bonds
claims plus
Cash
est to 1-1-44
Pfd.stock $100 a share
Totals
Underlying Divisional Mortgage Bonds:"
Central
Carolina
1st
Fla.
West
1st
Cent. & Penn.
Fla.
4s
cons.
*
'
1st
Shore
5s
1934
Georgia & Alabama 1st cons. 5s 1945——
i
Georgia, Carolina & Northern Ry. 1st 6s 1934
Seaboard-Atlanta-Birm.
1st
South Bound -(So.
4s
First
1950—
4s
Seaboard
Colla
158.09
898.48
1,854.69
835:04
311.31
367.38
146.98
290.93
420.94
237.05
651.08
1,660.71
1,600
80.08
480.74
110.79
630.56
1,302.17
136.81
699.53
460.33
368.53
1,665.20
261.32
33.78
566.34
969.51
194.47
338.32
55.56}
598.72
1,187.07
.155.56
270.62
44.44
478.91
949.53
1,665.20
'
-
''
108.07
:
1,933.33
.
_
<
'
*-*1
1,867.05
ix&Cs~------—-
6s_
441.33
1,600
'
——
1949—:
1,043.78
t
.v
4s, •; 1959_r_i_^^iiis^.i_
5s
614.61
t
See
$674.60
107.88
356.69
—.
See
$377.14
262.55
1,871.88
Bonds:
:
2,108.09
terajt Trust Obligations:
Secured Notes
,
555.50
1,703.47
—l—;
1941
Div.) 5s
Seaboard General Mortgage
1,435
1,725
117.76
•
1,258.50
1933————
1931-
Seaboard & Roanoke 1st 5s
1,000
58.74
1,725
1,625
1,866.10
1,240
Raleigh & Augusta Air Line 1st 5s 1931—
Raleigh & Gaston 1st 5s 1947——L—I——
$1,340
$170
$830
:
435
1,435
5s 1943—
cons.
$340
$1,340
1949__—___
■p
1,961.13
:
2,117
Northern
The
1st
9
/
,
NEW
N. Y.-Phila. Private Wires—Rector 2-6528
YORK
5
3s
these
subject
:
1936-———
these
now
securities
$305,000,000 in
in
settlement
principal
terest claims submitted
& 2-6529
holders.
Without
348.65
■'
914.64
746.53
1,300.28
.750.00
,
130.98
1,075
1,075
1,075
and
of
in¬
by, bond¬
interest
the
claims would
Baltimore,
system,
'
.
total approximately
$160,000,000.
Steps have already been under¬
taken by the committee of reor¬
ganization
managers — Charles
Makell, Baltimore, Joseph France,
who
represented
New York,
the
underlying bondholders, and Otis
our opinion the proposed allocations, suggested by the
Compromise Committee in the
-u
Lackawanna &
Western Ry.
.
;.»! i.
4
'.i
■
t'
t
f
Brief
SEABOARD AIR LINE
Profit Potentialities
566.32
~
■
In
"Rock Island" Reorganization
.;
99.48
198.76
74.12
750
—.i' •
railroad and terminal companies are operated by the receivers as part of the
mortgages to be acquired by reorganization committee through foreclosure.
plari of reorgan¬
provides for distri¬
bution of approximately $5,500,000 in cash, and $185,000,000 in
new
;
subsidiary
to
modified
ization
120 Broadway
'
50.08
1,873.75
Tampa
South Broad Street
t
1,819.27
2.063.75
Tampa & Gulf 1st 5s 1953
INCORPORATED
See
.
Georgia, Fla. & Alabama 1st & ref. 6s 1952_
Stocks
Obligations
:
for
Commission
Commerce
thority to solicit deposits of bonds.
It is expected that it will require
several weeks before this appli¬
General Income 4s, 1996
going to be
;
Preparations are already being
by the reorganization man¬
agers to. apply to the Interstate
made
"New"
and Terminal Companies:
Seaboard-All Florida ,Line 1st 6s A & B 1935
STROUD & CO.
■
MINNEAPOLIS &
ST. LOUIS RAILWAY
of the
ALLOTMENT
tProperties
297
ture.
put
promise committee's proposals:
Properties, of
296 and
The order is now
made ready for his signa¬
being
■"Subsidiary
Special
Teletype
Teletype: NY 1-8050
organization.
the
$1,000 of principal under the com¬
5%
-
PHILADELPHIA
general mortgage bondholderspreliminary to its efforts to re¬
organize the railway. Judge Ches¬
nut is expected to sign the order
confirming the compromise re¬
WALL STREET, NEW YORK 5,
Georgia. & Alabama Terminal 1st 5s 1948—
Serial
PH
1
WHitehall 8-8450
The following is a tabulation of
claims^ and;
Glazebrook, New York, who is
of
the
committee of
upon.
closed," he said.' *'
!
Mortgage Bonds
Guaranteed
A.
Quoted
—
LEROY A. STRASBURGER & C(L
another this
must be closed and is
the
*
Chairman
equity court
the
receivership in
;
Sold
—
within
either
receivership
outright
court.
Teletype BS 259
: :
Telephone HAnover 2-7914
Registered
&
Coupon
.
,
Bought
proceedings
bankruptcy
through,
started
that
Adj.
123
'
CAP. 0425
N. Y.
k
com¬
should; !be
reorganization
First & Cons.
.
the
months
Ref.
Equipment Trust Certificates
which
Special Master
asserted
three
or
request
on
148 State St., Boston, Mass.
Tel.
has been offered them."
now
free
sent
:
4s/88
Gen.
ity. holders, "must take or leave
two
Discussion
& Pacific
promise plan asserted that secur¬
He
R. R. Bonds
last July. Judge
approving
in
Louis, San Francisco
the plan present¬
Tazewell Taylor
Chesnut
St.
Appraisal of the
Rock Island
among
groups
ed to the court by
2316)
Railroad Securities
A Post-War
com¬
;
had objected to
.
Chicago,
mittee, selected by Judge Chesnut
.
to
arbitration
three-man
the
what
reported previously, a
plan of supplemental compensa¬
tion was established effective July
last year, but
1.80%
>.; - '
report
I
"As
loans and investments has been at
the annual rate of 1.60%
'
quote:
of $122,000
rate
average
far this
so
other
our
-.;
From Mr. Baker's
9
compromise plan of reorganization, was approved by Federal Judge
W. Calvin Chesnut on Dec. 1, in the U. S. District Court at Baltimore.
This action of the court paves the way for completion of the reorgan¬
ization of the road which has been<fe
■.
———
—:
—-—
tinue Extra Dividend
his
In
Toronto
Montreal
in
in first mortgage bonds, as proposed in a
more
1-395
Teletype NY
New York
Railroad Securities
Met
Baker Of Bank Of Manhattan Go. Reports
HAnover 2-0980
St., N. Y. 5
WILLIAM
Bell
Assets At New
Company
Stocks and Bonds
Letter available for Brokers and Dealers
resume
i
'
-
,
of plan of merger
available upon request.
Reorganization would mean higher values for every out¬
;•
Circular
request
on
^
•/
•
/
standing Seaboard bond, with two exceptions. We believe
this reorganization should be effected in an equity pro¬
ceeding.
Mclaughlin, baird & reuss
Members New York Stock Exchange
NEW
ONE WALL STREET
VTEL. HANOVER 2-1355-
' ' }
■
■
"
•
YORK 5
TELETYPE NY 1-1310
'
1. h. rothchild &
co.
63
specialists in rails
120 broadway
COrtlandt 7-0136
n.
Adains & Peck
y. c.
5
Tele. NY 1-1293
Wall Street, New
BOwling Green 9-8120
Boston
York 5
Tele. NY 1-724
Philadelphia
Hartford
2314
Recent
Analyses
Merchants
'
Ryan-Nichols
William A. Fuller & Co.
York and principal
105
St.
209 S. La Salle S treet
mation
Deep Rock Oil
.
Pfd.
208 So. La Salle St.
CG
ZIPPIN & COMPANY
Exchange
exchanges 1
principal
;
So.
208
New
1399
York "
Indianapolis
La
Salle
CHICAGO
Toronto
Street
4
RANDOLPH 4696
new
a
association
of
securities
dealers
in
Illinois.
Two
selecting the
com¬
left to Henry T. Berb-
was
The
idea
gained root, and last
meeting, also held in the
offices of Sills,
Minton, came as
week's
an
outgrowth of the Nov. 26
Adams
&
Co., 231
South La Salle
St., have prepared
a
four-
memorandum showing recent figures on securities of Chicago
Surface Lines.
Copies of this interesting memorandum may be had
page
from the firm upon
Brailsford
&
request.
'
/;/
South
Salle
La
St., now have
October
earnings of*
rent situations in Midland Utilities
& Milwau¬
Chicago North Shore
kee Railroad,
be had upon
208
Co.,
available on
figures
..
Debenture 6s of 1938 and Federal
copies of which may
request. .: •; vV ;
Water and Gas Corporation
;
r
Copies of these
mon.
com¬
momeran-
dum will be sent by the firm upon
•
—y\ ■.:■'*
recent request.
Berblinger had not announced attended by
representatives
of
three-page circular showing data
the personnel of the committee at about 40 firms.
on
Government of Chile obliga¬
Enyart, Van Camp & Co., 100
week-end,, -i'7;
One point was made clear fol¬
Monroe St., specialists in
tions. This comprehensive memo¬ West
While preliminary steps have lowing the second
meeting.. This randum prepared by the firm's Chicago
and
Suburban
Bank
been taken, it is not definite that was
that
the
new
association
foreign department will be sent Stocks, will furnish latest quota¬
a new association actually will be
would not be formed as a
tions on request.
protest upon request..
' /v: .:/,//;/;./■
:
' i
Incorporated
at the session held last
S. La Salle Street
9600
of
linger, secretary and treasurer of
Sills, Minton & Co., who presided
Doyle, O'Connor & Co.
Dearborn
CG
.
taken in La Salle Street last week toward the for¬
were
The task of
mittee
135
St.
Stock
231 South LaSalle Street
CHICAGO
1520
'
Andover
all
and
dealers already have been held, the
latest of, which took place last Thursday in connection with the
movement. At the last meeting, it was decided to
appoint a com¬
mittee and delegate to it the task of drafting a
report, which will
outline the objectives of a new^
40 Dealers Attend Meeting
organization.
Robbins & Myers
&
Salle
Quoted
■—
McKINNON
Members
York
New
meetings of over-the-counter
Federal Water & Gas
Com.
La
"\v .; ;Y
..
Sold
—
Chicago Recommendations
Steps
Pfd.
&
South
Chicago 4
•
Tele. CG 146
Tel. Dearborn 9200
Arkansas, Mo., Power
Com.
SECURITIES
1
time.
request
on
THOMSON &
& Co.
Members of Chicago Stock Exchange
Tele. CG 15G
1430
this
at
Bought
So. La Salle
Andover
Phone
investors
request
on
Copy
CHICAGO 4
I
\
study of particular, interest
Stock
Stock Exchanges
208
A timely
to
Analysis
FAROLL BROTHERS
Member New
///■;•':'
PREFERRED
Real Estate Securities
„
Standard Silica Corp.
i
FOREIGN
\
NICKEL
PUBLISHING
,
Common
Thursday, December 9, 1943
.«
INTERNATIONAL
FIRST CONSOLIDATED
ALL CHICAGO
Stock
'
I
Inquiries Invited in
Request
on
Distilling Corp.
Common
I
!
& FINANCIAL CHRONICLE
THE COMMERCIAL
Thursday.
sion.
Last
week's
ses¬
meeting
was
Mr.
1200
Brailsford &
Salle
Co., 208 South La
Street, have
a
.
very
,
,
.
.
We
have
prepared
a
recent
formed.
analysis of
has
SURFACE
CHICAGO
After the
drafted
its
dealers
counter
committee
new
report, over-thewill
called
be
to
policies, of NASD.
Some
leading dealers, in attendance at
the conference, were understood
over
another meeting, at which time a
decision is
to
be
made
as
to
have
to
the
whether
LINES
to
tion
:
shall
association
an
formed.
be
-'[r. ':
:
■
voiced
strong objections
formation
of
an
organiza¬
whose policies were not in
harmony with those of the na¬
tional'association.'
V,
Fred W. Fairman & Co., 208 So.
Cruttenden & Co., 209 South La
Salle St.,
on
have compiled late data
Maryland Dry Dock Co.
from
Salle
St., have issued
at¬
an
tractive
30-page descriptive
chure
Interstate Aircraft & En¬
Copies of these data may be
mon.
had
com¬
La
the firm upon request.
on
bro-^
gineering Corp., copies of which
..
;
Question To Be Decided
The movement for the
ADAMS
231
South
CO.
6-
sociation has been launched
cently that
Salle Street
La
had
Chicago 4, Illinois
tended
said
the
decide
to
most
recent
meeting
of the questions that will
one
have
be
to
decided
is
whether
a
organization could serve any
purpose that is not now handled
new
Descriptive Brochure Available
on
so re¬
dealers have not
opportunity
an
as¬
whether there is any need for it.
Some
leading dealers who at¬
Phone State 0101
Teletype CG 361
many
Some
new
Request
by the National Association of
Interstate Aircraft and
curities
Dealers,
vestment
Engineering Corporation
Inc.,
Bankers
or
Se-j
the In-
Association iof
The
BOUGHT—SOLD—QUOTED
to
new
organization, according
dealers who have
been
FRED W. FAIRMAN & CO.
Chicago Board of Trade
that
dealers
matters
could
sion
of
,
of
in
that
out
La
Salle
St., have prepared in¬
teresting memoranda on the cur¬
some
to
last
rumors
when
(Continued
occa¬
associations
week's
had
Of
Tomorrow's Markets
of
circulated
attendance at the. meet¬
to;
Industrial
-
stocks continue to
act; better than market.
Cer¬
of
tain issues appear on verge
County
fact
Financingi)>•■'
that
the
v
disregarded.
the widely pub¬
conferences
will
un¬
/
doubtedly have an effect on
the price structure in months ;
on
Spreads.These
ings.
The
of
be
licized
that
[£Un}ors .were quickly spiked ^byin
C.:
element
the
cannot
The results of
the purpose of the session was to
question
2315)
on page
course
news
of
meeting
protest the stand of the NASD
the
;'//":'W;•,'.;/ '
request.
importance
dealers exist in many other States.
Prior
available from the firm upon
are
so
In this connection it is
arose.
pointed
an asso¬
Illinois,
local
be 'considered
Doyle, O'Connor & Co., 135 So.
right
Still, I don't know
come.
what
/plans
tween,
and
were
made
Roosevelt,
Stalin
but
the
Impact of early which
•always has
should not affect rail idea of the
new
be¬
Churchill
move.
It
would
v
a
market,
shrewd
be
'M.BU
CHICAGO 4, ILLINOIS
Members Chicago Stock Exchange
RANdolph 4068
felt
$8,346,000 peace
direction of pre¬
funding operation of Cook County,
equipments.
111., is yet to be finally consum¬
vailing winds, doesn't seem
open; to all
securities dealers in Illinois, both mated continues to be a subject 2
Of course
WALTER WHYTEj^M to be. concerned.
those handling listed as well as of interest along La Salle' Street.
the decisions reached at the
unlisted obligations. It would han¬ The county, which embraces; the : After last month's' market
conferences are long range in
dle matters of local, rather than City of Chicago, awarded an $8,reaction
the I consensus
of
character and daily market
national nature, and among other 346,000 bond issue, for the purpose
opinion was that prices would
things would consider State legis¬ of funding its unpaid bills, and
fluctuations should not be ex¬
go lower. ' Two weeks ago I
lation
affecting
the
securities judgments as of Dec. 1, 1942, to
pected to mirror them.
But
Seipp, Princell & Co. The munic¬ wrote here that a bottom was
business,.
even minor moves like
ripples
The movement toward forma¬ ipal bond firm was to take deliv¬ in sight even though lower
on
the water /indicate com¬
ery by Dec.
1 on the first $3,tion
of
a
new
association
was
prices would be seen first.
launched following the release of 633,000 of the bonds, but it failed
:)"■ ///i;
Last week I indicated that the ing storms.
to do so. According to its
the report by the board of gover¬
bid, the
remaining $4,713,000 are to be de¬ reaction may not run as deep
nors of the National Association of
livered by Dec. 15.
On the domestic front we
as I first thought and recom¬
Securities Dealers on the question
The financing operation has not mended
the purchase of Steel. are better informed and what¬
of spreads.
Dealers in informal been consummated,
because.V an
ever reflection occurrences at
conversations began to discuss the approving legal opinion on the Up to this writing the stock
has not gone to the purchase home have, on the market pic-..
bonds has not been obtained from
implications of the report, which
a
firm of municipal bond attor¬ level and from the action of ture \y can
bepretty • well
led to a meeting on Nov. 26 atneys.
The firm of Chapman
the market in the past seven gauged.
The fact that there
tended by representatives of about I
Cutler, which normally passes on
days it doesn't look as if it is concern about the impact of
seven firms, in the offices of
Sills, bond issues of Chicago govern¬
will.
- v
peace on a war converted in¬
Minton & Co., It was at this meet¬ mental units, declined to approve
dustrial set-up cannot be
ig¬
ing the idea of forming a new the county flotation until the unnored. Ifeel however that
The marked divergencies in
association first was brought up.
(Continued on page 2315) :; V
much of this concern is ex¬
not
NASD.
208 SOUTH LA SALLE STREET
Tel.
ciation
prom¬
inent in the movement, would be
in the nature of an addition to the
have
along that there should be
dealers
America.
dealers
';
Belt Sys. Tele. CG 537
,
BOUGHT
SOLD
—
—
QUOTED
Hearst Consol. Pub. "A"
■
//
.
7%
•
Pfd.
Black Hills Power &
Light
Com.
Steel Products
Engineering
I
Straus Securities
135
South La
Salle
Tel. ANDover 5700
Company
St., Chicago, 111,
Tele. CGO 650-651
onlygroups but indivi¬
dual stocks within the groups
I commented on in last week's
ONE DOLLAR GETS YOU
column is
TEN cents
have
We
prepared
analysis
STOCK,
nothing ahead of it, yield¬
ing about 10%.
of
an
an
Maryland Drydock Company
industrial PEACE
with
You
can
have
a
Memorandum
on
request
will
120 South La Salle Street
Teletype CG 1122
Phone Central
Dearborn 0500
Teletype
3
5690
Chicago 35
York Stock Exchange
Chicago Stock Exchange
Direct Private
Wires
209 South La Salle Street
Chicago 4, Illinois
/Whether
or
not
this
war
into
with
a
the
case
now
of
peace" economy
minimum of disturb-;
The industry is the rail
equipments.'
'
y
ance.
,
.,
prove
can come out
a
is
;
H'
■, •
If the
war
si4''
"•
,
,
.
' %
v
continues for
a
But from the action of
Members New
and
the casual eye.
something only time will tell.
cruttenden & co.
Telephone
becoming evi¬ dustry which
not
even
Frequently such action indi¬
cates the beginning of a new
move.
copy.
CASWELL & CO.
CHICAGO
dent to
aggerated. But assuming it
isn't, there is at least one in¬
East
to-
and
West Coasts
more
longer period the, rail equip¬
just a-handful of stocks ments-will still continue to
the odds seem to be in favor make money: If it has to con¬
than
of
more
advance before
serious decline.
.
'
any
vert to
peace-time activity it
(Continued
on page
2337)
m
,
...I
tVolume 158
A-UAlt
».
First
•
INTEREST
Mortgage 5%
supplied at
Copies with dealer's imprint will be
charge on request.
Ask for
ship
our
Markets
on
all
:
Reliance Steel
Sold
-
Quoted
•
United
,
3, Illinois
Tel.
965
is
Co., 231 So.
STANY Elects Willis Summers President;
their
Other
officers
ican
However,
231 S. La Salle St.
own
our
Randolph 5686
not
are
interesting
companies and
140) with a special ar¬
are
on
which
of
railroads
(guaranteed
there
Lackawanna.
&
E. de
Allyn
good proportion of them being
devoted to international or foreign
a
Their most recent circular
El Segundo,
V,
Electric and Gas
ing Thomson & McKinnon's Sta¬
tistical Library, 231 So. La Salle
Revenue Bonds
F. S. Yantis &
Sold
—
Salle
issued
have
St.,
special
a
report of Consolidated Biscuit Co.
Common Stock.
Copies will be
sent by
the firm upon request.
DANIEL F. RICE & CO.
York Stock Exchange
Members New
and Chicago
Board of Trade
'
DeKalb, Illinois
approximate $312,509.75, or
tax
Industrial
to
31, 1943 total $677,305 or ap¬
proximately
$5.30
per
share.
Approximately 45% of Interstate's
production is derived from pro¬
prietary articles — a favorable
factor in the renegotiation of war
contracts.
Dividends
$5.00
stock
cash
to
Dec.'
far this year were
so
1943, 25 cents
of record
April
3,
stockholders
1943, payable Dec. 10,
Capitalization — 128,000
common
stock. No Bonds.
1943.
shares
No Preferreds.
Butler-Huff & Co. of
California,
Los
Street,
Seventh
West
210
Angeles, Calif, are distributing an
interesting booklet discussing the
for
prospects
after
.the
memorandum on
"National Liberty Insurance Co.
of,America" may be had from the
and
booklet,
George
John
Leone
&
Co., Inc.; Treasurer, George V.
Leone, Frank C. Masterson & Co.
Trustees of the Gratuity Fund to
serve
two years:
Cyril M. Murphy,
Mackubin, Legg & Co., and GiisJ. Schlosser, .Union Securi¬
tave
ties Corp.
French
S.
Gundy & Co., and Frank Edward
Mulligan, E. H. Rollins & Sons..
Three
of
Members
Directors
Herbert
to
of
Incorporated
Associated Ga$ & Electric
The current situation in Assoc¬
iated Gas & Electric Corp.
possibilities
the
firm upon
Board
Co.;
&
a
request.
from
Iowa Electric Co. Pfd.
P.
Fox, P. F. Fox & Co.; Frank
A. Pavis, Chas. E. Quincey & Co.
Robert
A.
Torpie,
Lynch, Pierce, Fenner &
Beane; Roger S. Phelps; Camp¬
bell Phelps & Co., Inc., and J. J.
Delegates:
Merrill
in the
By-Laws of the Association by the
Board of Directors were approved
O'Kane, Jr., John J. O'Kane, Jr.
& Co., and five alternates: Michael
J. Heaney, Joseph McManus
&
Co., 120 Broadway,
City, members of the
New York Stock Exchange. Cop¬
ies of this circular and a brief
New
Co.? Thomas,Geoffrey
J.
Mericka
&
Horsefield,
Oliver Kimberly, J. K.
Rice, Jr. &
Wm.
Co.,
Inc.;
Co.; Allison W. Marsland, Wood,
proposed
spirited discussion, par¬
ticularly regarding the creation
of an elected
nominating com¬
This
latter
measure
was
adopted and hereafter the Asso¬
a
history, summary of the plan of
reorganization,
litigation,
and
on
request.
each year
at
will
the annual
elect
meeting.
'
Offices In
Our
Throughout
Country
Specialists in
7
CHICAGO
Traction Securities
&
Chicago No. Shore & Milw. R.R.
•
Comprehensive analyses
available on request.
Foster, Brown to Admit
Broad¬
members
Foster, Brown & Co., 120
way,
New
York
of the New York
will
to
City,
admit Margaret S.
S.
208
La Salle
Street
CHICAGO
Faircloth
partnership in their firm as of
Jan.
Brailsford & Co.
Stock Exchange,
Tel.
CG 95
State 9868
1, 1944.
MARKETS
for the
*
1
Issued
Stocks—When
STRAUSS BROS.
'
Sincere and Company
■
Members
and
231
York
New
Other
Stock
Principal
South
La
Salle
CHICAGO
State
2400
Exchange
Exchanges
Members
New
Security Dealers Ass'n
Board of Trade Bldg.,
Chicago 4
Telephone: Harrison 2075
Street
Teletype CG 129
4
CG 252
York
Direct
Wire
to New
SERVING INVESTMENT DEALERS
We specialize exclusively in under¬
writing and distribution of securi¬
ties, providing investment dealers
their
retail de¬
partment of our own, we compete
in no way with dealers, but serve
them exclusively.
Correspondence
with
MIDWEST
Northern R.R.
Bonds,
•
five-man
nominating committee
ciation
the
York
/
Issued
Com.—When
a
mittee.
To
Cities
&
Wertheim
Waterloo, Cedar Falls
after
Principal
long-term outlook, according to
an interesting
circular issued by
So. Colorado Power Co.
changes
Wires
Direct
a
NEW YORK
Iowa Elec. Lt. & Power Pfd.
Fred
The
Central 7540
CG 530
offers
'
National Committeemen—Three
v
CHICAGO 3
Situation of Interest
attractive
La Salle Street,
135 South
,.
two .years:
serve
Allen
Allen,
war.
insurance
stocks
Copies of this
Over-Counter Securities
E. H. Rollins & Sons
corporate chart may be had from
the firm's Research Department
Ins. Stocks After the War
Railroad!
-
Active Trading Markets
in the Leading
$2.44 per
shares of common stock.
"•> Net
current assets
as
of Oct.^-
C. E. de Willers
1276
Municipal Issues
-
We Maintain
$10,068,322.40,
share net after taxes on the 128,000
months ending Oct. 31; 1943 were
Sales for the six
amounts
CG
Utility
Public
months of the current fiscal period
the equivalent of $2.44 per share after
reserves.
which
Blvd., Chicago
141 W. Jackson
Gardenia and Los Angeles, California
J
,
Quoted
—
Co., 18 South La
Engineering Corporation
Figures for the initial six
Abbe
TEX.
SAN ANTONIO,
Copies of these releases may be
obtained without cost by address¬
is -ob¬
trend
glancing over Thomson
McKinnon's recent publications,
Interstate Aircraft &
r.
YORK
BOwling Green 9-1432
Teletype
Richard
CG 972
their long-term outlook, and their
Bond
Review
to
Leased Lines
served in
issues.
Willis M. Summers
»
WALL STREET, NEW
I
Bought
Richard F.
Abbe, Van Tuyl & Abbe;- Second Vice-President, Chester
Willers, C. E. de Willers & Co.; Secretary, John S. French, A. C.
Listed and Unlisted
and Bra¬
St., Chicago 4.
An
Vice-President,
First
bonds.
WESTERN
SECURITIES
Tel., Amer¬
Power,
cement producing
Association of New York for 1944
were:
Chicago Board of Trade
MIDDLE
on
overlooked as
their "Review of the Week" goes
into detail on the subject of the
5s due 1927.
Currie & Summers was elected
analysis
an
Foreign
&
zilian
Railway,
City
is
♦industries
Railway, all first
Chicago
South
annual meeting.
elected
Chicago
on
producing com¬
sugar
,
Exchange
Chicago Slock Exchange
New York Curb Exchange (Assoc.)
Prominently featured in
current
"Review
of
the
to International Tel. &
Chicago Railways and Calumet &
Proposed Changes In By-Laws Passed
st the Association's
a
data
Members
New York Stock
Canada
Dry stock, and their latest Bond
Review gives considerable space
Week"
St., will send upon re¬ ticle
late pamphlet showing
Salle
quest
Cuban
the
panies.
Straus Securities Co., 135 South
La
Summers of Troster,
HICKS & PRICE
International Nickel Co. of
on
Canada; the previous one was on
are
640, 641 & 642
Tele. CG
Tele. CG 878
Randolph 6960
.
CHICAGO 4
JACKSON BLVD.,
W.
Tel. WAB. 8686 and Postal Telephone
3
(Continued from page 2314)
John J. O'Brien &
La Salle St., are issuing reprints
being form¬
of their original analysis of Amer¬
ulated in Chicago for the Fourth
ican Superpower Second Prefer¬
War Loan Drive of the Treasury
ence
Stock, listed on the New
ject to receipt of an approving Department, which will open Jam
York Curb Exchange, with addi¬
opinion from Chapman &. Cutler 18 with $14,000,000,000 goal. Frank
tional material to bring it up to
or
any other
firm of attorneys McNair, Executive Vice-President
date.
Copies of this interesting
acceptable to the bidder.
and Director of the Harris Trust
analysis will be sent by the firm
P.
P. Princell,
Vice-President &
Savings Bank, has been ap¬ upon request.
and
Secretary of the municipal
bond house, was in New York last pointed chairman of the drive in
Sincere
& Co., 231
South La
Irvin L.
week conferring with a firm of the Cook Coiifity area.
attorneys, and said on his return Porter, Vice-Prdsident of the First Salle' St., will supply late data on
Iowa Electric Light and
Power
to Chicago that he was hopeful
National Bank of Chicago, headed
Preferred Stock, copies of -which
that he would be able to take
the Third War Loan drive of Sep¬ will be sent upon request;
delivery on the entire $8,346,000
tember in the county.
of bonds this week.
already
Plans
141
Chicago Recommendations
War Financing
to be funded were
certified by the Illinois Supreme
Court in a test suit. Seipp, Princell offered to buy the bonds sub¬
CHICAGO
CG
INCORPORATED
BOARD OP TRADE BUILDING
,
120 South La Salle Street
3
2424
ANDover
(Continued from page 2314)
bills
Bldg.
Kneel and & Co.
Established 1922
Street
West Monroe
CHICAGO
Teletype CG 993
President of the Security Traders
208 So. La Salle St.
Stockyards
C. L. Schmidt & Co.
Enyart, Van Camp & Co., Inc.
Chicago Brevities
M.
Chicago Mill & Lumber Co.
Preferred
100
La Salle Street, Chicago
City Public Service Co.
American Gas & Power Co.
Corp'n
Traction Issues
Chicago
Telephone State 6001
Willis
Kansas
Pfd.
Common
Bought
Incorporated
39 South
&
Common
ILLINOIS
nominal
Leason&Co.
paid
Com.
Fuller Mfg. Co.
CHICAGO—SUBURBAN
Municipal Owner-
study, "Chicago Tractions Under
.
a
North Continent Utilities, Pfd.
Central Elec. & Tel.
BANK STOCKS
Bonds Due Sept. 1, 1941
have
\
J
IN
Elevated Railroad Company
prepared a memorandum covering the above issue?
outlining the proposed treatment of these bonds under the
Unification and the proposed
Municipal Ownership Plans.
"We
1 ».-Mf. mm.i
2315
TRADING
Northwestern
.iin# «
FINANCIAL CHRONICLE
THE COMMERCIAL &
Number 4236
,ivwm«» rmiwn
M»!l Mt t"
.
I
York Office
attractive
clients.
issues
Maintaining
for
no
invited.
FLOYO ». CEBF
Exclusively
Wholesalers
and
120 South La Salle
Chicago
CO.
Underwriters
Street
THE
2316
Thursday, December 9, 1943
COMMERCIAL & FINANCIAL CHRONICLE
Baker Reports
1943
Operating Earnings
Bet
OFFERINGS WANTED
We
interested in offerings
are
(Continued from page 2313)
"This
PREFERREDS
UTILITY
'
'*►
i
"
* 1
Paine, Webber, Jackson
ESTABLISHED 1879
the result of a
was
of
gen¬
deposits and the large
balance to the credit of the United
States
Government's War Loan
Account. Purchases of Government
large
small blocks of
or
eral rise in
Real Estate Securities
securities from the Treasury De¬
|
partment for account of our cus¬
tomers and ourselves are made
& Curtis
Seligman, Lubetkin & Co.
Incorporated
by credits to this account, in ac¬
cordance with the desires of the
Members
So far this
Treasury Department.
this account
averaged approximately $93,000,000, with a high point of over
$163,000,000.' Our deposits today
are almost $400,000,000 more than
Security Dealers Association
HAnover 2-2100
balances in
tne
year
York
New York 4
Broad Street,
41
New
have
Public Utility
Securities
Anticipated Settlement Of United
Recapitalization Problems
they
Gas
five
were
ago,
years
investment in Government se¬
our
$353,000,000 and
loans and discounts $84,000,-
curities increased
our
Real Estate Securities
while
interested in reports several weeks ago 000. The large increase in recent
that a final decision was imminent at Philadelphia regarding settle¬ years both in deposits and in hold¬
ment of the long-standing difficulties over recapitalization of United ings of Government obligations in
Gas Corporation.
While executives from 2 Rector Street were re¬ the commercial banks suggests
ported in conference with SEC officials, nothing tangible or official new problems which must be
.
yet been forthcoming regarding changes
5, 1941, which would have<$>.
facilitated streamlining the com- ratio). But
has
in the refunding plan
of May
there is no basis what-
whether the
any such
and its relations with the ever for determining
two
holding companies, Electric, common will be assigned
Power & Light and Electric Bond share
of the current
pany
earnings,
& Share.
| which amount currently to about
However, Street reports seem to $8,600,000 after estimating interagree that there may be an in- | est on the new bonds. Thus the
in the proposed bond issue anticipated
amount would be
Government
faced when war-time
requirements
by
succeeded
are
peace-time civilian demands.
"On Dec. 1
owned $432,368,-
we
000 United States
Government ob¬
ligations and $22,500,000 obliga¬
tions
fully
guaranteed by the
United States Government.
The
crease
$75,000,000 to $100,000,000 equivalent to about 8V2% of the
aggregate earning power, which
(permitting Federal tax savings).
seems on the high side.
Of the corresponding amount of
In recapitalizing holding com¬
cash, some $42 to $44 million would
from
of
maturity
average
our
The Court And Bondholders.
dates
used
are
accepted by the bondholders and approved by the
the current market price
present first mortgage bonds.
He is convinced that any plan
finally consummated as a result of the bankruptcy proceedings now
going on must give almost the en-<^are about
$818,955. After operat¬
tire property to* the present first
mortgage bondholders. Therefore, ing expenses and taxes this should
plan is finally
Court
entire
securities
callable, 40% will ma¬
Dec.
31, 1944, and
are
His premise is predicated on
not.
or
the actual
_
which
the writer's
the Trustee's
of the
7 years
earliest call
for the
will be very little difference in
this bond issue whether or not
there
Actually,
conclusions regarding
Government portfolio was
and 4 months..'If the
BONDS
And The Significance If
The Trustee's Plan Of Reorganization Is Accepted By
Street was much
Wall
BROADWAY FIRST MORTGAGE
61
Brief Resume Of The Property
We
reorganizations.
may,
$278,386 for amort¬
on the new
about
leave
securities finally given
interest
ization
and
bonds,
accomplish this purpose do not
matter. However, it seems
that
the trend of the times is for the
Federal Government to insist on
a reduction of the funded debt in
to
before administration ex¬
penses.
should
figuring,
Roughly
be
sufficient
to
this
pay
ap¬
proximately 5%% interest on the
new
bonds, with something left
there¬
over
for amortization.
fore, asume that the plan offered
Electric Bond panies the amounts thus far allot- 95.5% before Dec. 31, 1951, and
Successful renting of the store
by the Trustee has an even chance
in settlement of United Gas debts j ted to common stockholders have
and
other vacant space of the
they will have an average matur¬ of success.
to
that company approximating. varied roughly from 5 to 15%. In
building
(about 13.82%) might
ity of 5 years and 2 months." k
The
present
first
mortgage increase these figures consider¬
$53,000,000,' it is said. The remain-1 the United Light & Power case
At the conclusion of his report,
bonds are currently selling below
der, it is generally assumed, may about 5% was allowed (one pre- Mr. Baker observed that "while
ably,
possibly
enough to pay
ferrefl stockholder is suing to re¬
25. The plan proposes cutting the
be used to refund the United Gas
dividends on the capital stock.
duce the amount). In the/ Com¬ at war we must prepare for peace,
bonds in half. For our resume we
An extremely important fact in
$7 preferred stock at the call price
monwealth & Southern case stock- as peace will bring problems per- can, therefore, consider the new
of
110, plus arrears of $11.62,
connection with this property is
nolder groups have recently naps more difficult to solve than
bonds at a price somewhat less
which would require about $55,that out of the total income of
reached a compromise agreement chose which faced us two years than 50. In view of the facts con¬
000,000.
$818,955 only $51,118 represents
to reduce the proportions from 20 ago."
cerning the property, the writer
; ,■
"
What would EL get out of the
income from Government leases.
to
15%. In the Virginia Public
In part Mr. Baker added:
'
7 believes these securities are far The
deal? It owns the entire issue of
space occupied by this type
Service case 5% was proposed but
"We must be careful,
in our under-valued by the present mar¬ of lease amounts to only 30,800
884,680 shares of United Gas $7
ket.
the SEC suggests raising this to eagerness
to solve a particular
second preferred stock, on which
square feet out of a total rentable
9% (Associated Gas is dissatisfied problem, we do not adopt a plan
The Trustee proposes to give
arrears total nearly $83 per share
area of 451,000 square feet.
with
this
because of offsetting or policy which will lead us into each first mortgage bondholder
—a
total
book
claim of some
Despite the fact that this new
losses). American Power & Light paths we do not want to follow a new $500. first mortgage bond
$162,000,000. It also owns 48V2%
mortgage will be cut in half,
recently proposed 10%. But in the and perhaps to a place we do not for each $1,000. bond now held.
of
the
common,
while Electric
similarly reducing the first mort¬
want to be. Not until the end we
The
Bond has 9.6% and the remainder present case there are two pre¬
present
second ..mortgage gage bonds, at current market
is held by the public.
One guess ferred stocks, one with small ar¬ seek has been clearly defined can bond issue will be eliminated and price a value of less than 50 is
rears
and the other with very we wisely decide the best means those
bondholders
will
receive
has been that EL would receive
placed on the new first mortgage
substantial arrears. While the lat¬ of obtaining it. So, in preparing capital
stock representing only bonds with stock. If the writer's
the entire issue of a new $5 1st
ter is held by the parent holding for peace, let us first determine
about 2%% of the ownership of estimate
of
preferred
stock, and that this
possible income is
theL property,
while the major correct, it will mean a return of
stock might eventually be turned company the SEC apparently rec¬ the goal we would reach and then
over
to holders of EL 1st pre¬ ognizes that it was a legitimate proceed to a consideration of our
portion
of the
ownership—ap¬ over 12% on a present invest¬
investment and hence does not re¬ problems in the light of the re¬
proximately 9714% — will be ment. Considering the value of
ferred. Another rumor is that EL
sults desired.
v
given in the form of capital stock the new securities, it would seem
would get $12,000,000
cash and quire subordiaation or cancella¬
tion. Therefore it appears rather
the
present first ; mortgage as if current prices are far too
"With this in mind, I shall re¬ to
97% of the new United Gas com¬
dubious the common stockholders
frain at this time from discussing bondholders, in addition to their low. -• ' ■■
■
'7 '■
■ •
'■\
mon—presumably leaving only 3%
would get more than 5% of the
new
first mortgage bonds. Pro¬
for the public holders. (This as¬
The new first mortgage bond
any of the financial and economic
new common stock issue, assuming
vision is also made in the plan issue will
sumes that United Gas would have
amount to $3,961,000.
problems which are sure to arise
that the remainder goes to EL.
with the coming of peace.
The for a distribution to the first At 50% a value is placed on the
only bonds and common stock.)
On the other hand, if the SEC
mortgage bondholders at the con¬ entire property of only $1,980,500.
solution of some of them will be
Evidently there is a wide range
should permit issuance of a new
of
reorganization
pro¬
of opinion as to what public hold¬
difficult and will require a most clusion
So much for suppositions if the
$77,000,000 1st preferred stodk is¬ careful consideration of all the ceedings of the balance of any Trustee's plan is approved. Let
ers of United Gas common stock
sue to be turned over
to EL (as
cash on hand, after payment of us see what we
actually have
may salvage out of any forthcom¬
angles involved;uNew and untried
ing plan.
This stock has enjoyed conjectured by a writer in Bar¬ schemes will be suggested which the expenses of the reorganiza¬ now. As stated before, we believe
wide price swings due to the big ron's) this would make a vast dif¬
must be subjected to the severest tion and the setting aside of $100,that
in any event the present
ference since it would permit car¬
scrutiny before being adopted, in 000. for working capital for the first mortgage bondholders will
capital leverage, with an all-time
be
ture
before
handed over to
of 50V2-V4:. During 1942-43 rying down to common stock earn¬
If the old
from 5/16 to 4%, and in the ings nearly $5,000,000.
common received the sole claim on
past few weeks it has had erratic
these
earnings,
market
value
swings, the price at the moment
range
worse
not prove
It is most
order that the cure may
it
rose
than the disease.
irhportant that both the problems
and
the
proposed solutions be
being 2xk. Assuming that-in the might jump to around 17—unless, clearly and accurately set forth
as
assumed by - Barron's, public so that the people will have the
reshuffle the common stock held
stockholders would get only one- facts
unadorned, and uncamouby EL and EBS is subordinated
third of a share of the new com¬
or cancelled, the 3,271,207 publicly
flaged,
before
decisions are
held shares,
at
ketwise
pears
to
claim
on
000
currently valued marabout $7,350,000, ap¬
reflect
an
anticipated
mon,
with an estimated value
$6.
The above is not
intended as a
forecast, but to illustrate the dif10-times-earnings ficulties of appraising the situa-
earnings of about $735,-
(assuming
a
of
Thus
reached.
they
guard
can
against the adoption of unsound
projects and the assumption of
unwanted commitments.
This is
procedure;
American way."
the
wise
the
is
this
Common Stock
Obviously, it is dangerous to
any
definite value for
United Gas common until the SEC
has rendered its official verdict
forecast
companies involved
indicated their agreement.
and the three
have
groups
might
tie
up
,
the
time
matter in the courts for some
to
Bear, Stearns
&
Co.
Members New York Stock Exchange
come.
seems
that preferred
seem
NEW YORK
CHICAGO
Only
warranted
one
at
conclusion
rpcf.orrtinn
of
time—
this
stockholders of EL
likely to benefit by
from United
a
Gas.
flow
819.72.
The
the
further provides for
first 25% of the
plan
of
use
the
net income of the
tire the
ance
if
will be used to pay
earned,
the
property to re¬
bonds. The 75% bal¬
new
interest,
to 6% per annum on
Any
balance
up
bonds.
new
might be used for additional bond
retirement or applied to any cor¬
of
eventual
income
..
■
eventually own practically all
places a value on the entire prop¬
erty of only $1,823,210.
.;
Compare this $1,823,210 with
the value placed on the property
.
by
the City of New York in its
assessment.
After
com¬
of a Certiorari pro-
1942-3
mencement
continued on page 2333)
Di¬
the
ital stock.
The
.
new
company
will be man¬
aged by a board of 5 or 7 Direc¬
tors as may be determined by the
Court.
The
Trustee,
Committees
and
consummation
make
any
of
the
plan,
to
suggestions to the Court as
Directors.
to who shall be the
In spite
of store space now va¬
cant that prior to the War pro¬
duced rental of over $110,000 per
annum,
ine
current
gross
rents
of
property. We now have a first
mortgage bond issue of $7,927,000
currently
selling at 23%. This
this
payment of dividends on the cap¬
Bondholders
holder of
first
mortgage
bonds shall
be
whole given the privilege, prior to the
possible that
recalcitrant stockholders or stock
Even then it remains
Bought—Sold—Quoted
Company.
ported
porate purpose the Board of
rectors may elect, including
tion.
Public Service Co. of Colorado
The Trustee re¬
cash on hand as of June
30, 1943 in the amount of $254,-
new
TRADING
MARKETS IN
REAL ESTATE
SECURITIES
At
.
■.
it
it
SHASKAN & CO.
AUmbers New York Stock Exchange
Members New York Curb
40 EXCHANGE PL7, N .Y.
Bell
Exchange
Dlgby 4-4950
Teletype NY 1-953
'■awnW! I'm* 'k. mn
Volume 158
SEC
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4236
"*
,
which
industries
have
the
profit-limitation
associations
tree
whose
a
members
stick
it
believes
.10%
the
and
which
to
sell
fair
a
business and
our
return
on
has
issue
security from the prospectus originally.
10%
on
first
the
been
"holier
cut
than
and
the
interest
less
to
thou"
than
crowd
of normal
10%
propose
Do
is
Or
away
some
/.v.'/
the
I
shadow
black
of
FACISM
democratic
hovering
way
of
around the
life?
corner.
wonder.
account
well
as
the
as
fact
purchases of about twice
purchase
a
that
the
sale
or
is
believe
that
security business permits
me
to qualify any comments or suggestions.
I have been' on the
Street for 39 years, 22 of which have been spent heading my own
organizations. I have been interested in your criticisms of the recent
ruling of the NASD pertaining to profits and to offer my views and
reactions would be a repetition of those which you have published.
a
collateral posted will
its amount.
;
;
>
that the direction
allow
1
:
the other hand, with some little statistical work
and preparation, finds a security which he presents to his clients,
setting forth some particular virtue such as profit possibilities,
attractiveness as a sound investment at a decidedly reasonable price,
The dealer, on
experience in the
my
not, and, with telephone calls and personal visits, uses
his salesmanship to make the sale.
He brings something to the
customers attention which might not otherwise have come before
what
or
him.
J.1'
1
'•
•'
'
selling
and
in
may
after
idea.
an
profit ceiling, I must sell this stock at a profit of 17V2
cents per share.
Suppose I sell 25 shares.
My commission would
be 4.371*, and if par value was $1, my tax would be 80 cents,
leaving me $3.57V2.
If, to may bad luck, the stock was "no par,"
With
5%
a
$2 in tax would come off, leaving me with $2.373/4.
The stock
exchange minimum commission on such a sale would be $5 and
no
tax would be involved.
Edgar Bergen once told Charley Mcthat
Carthev
while
an
an
exact
they were looking at cost $1,000
available for $50, explaining to the in¬
was
the worm holes in the original were genuine
while those in the reproduction were man-made.
"Good heavens!"
credulous Charley that
exclaimed
days?"
men
working cheaper than worms these
]
■
the
As
far
as
should
not
he
and
"are
Charley,
angle
use
in passing upon
the
to the investor goes, why
discrimination in selecting a dealer
security offered which he uses in making
of protection
same
any
to
me
dealer and
a
be
high time that there be
broker.
is
a
differential
see any occasion, but I prefer that my name does
in connection with these comments. In this feeling there
weakness, but unfortunately
As
dealers
we
not with strength.
are
86
security dealer, member of the NASD and Detroit Stock
Exchange, I am writing in answer to your recent request.
First, being a dealer in a small town, with a limited amount
of business, and not doing any' underwriting, I did not feel that
the I opinion of a dealer of' our size was just what you wanted.
so
for not
reason
answering before is that I
am
not too sure.
First,
much
be
may
security dealers and promoters have abused the public
high-pressure selling that these kinds of promotions
essential to our present system.
Many unsound corpora¬
with
tions have been
organized, and management selected by them which
qualified by experience, ability or integrity.
not
was
Now
ful, and
just what percentage of our industry that is how success¬
started in this way, I am not in a position to
has been
even
estimate, but I do know that a big majority have been so
milked by,management who become united with the promoters that
the
public
and
should
my
final
of
have
have
been bled of billions
been
of
dollars
that
would
spent to much better advantage.
Therefore,
that while 5% will not allow the kind
conclusions
are
have
that it
will not allow the kind of promotion that will be much more of a
promotion
we
seen
in the past,
I
am
not so
sure
Because there might be danger of his credit to our business as well as ourselves and our clients.
being cheated by an unscrupulous dealer, is that any reason that
Enclosed you will find a clipping out of Sunday's Detroit "Times"
the whole industry should be constantly suspected?
that you may or may not have seen.
This impressed me, because
as a
So far we have never had a chance to vote on anything, nor
stockholder, owning approximately 4,000 shares of stock, I was
never
at all satisfied with the Board of Directors or the officers;
have we even had the opportunity of a small voice in nominating
Governors of the NASD.
If we could vote on the present propo¬ but not wanting to be a heckler, and have a request for information
sition it would be no in unmistakable form.
repeatedly ignored, or replied to in such a manner, that they only
amounted
dealer no. 84
Editor, Commercial and
I
am
Financial Chronicle:
much interested in the articles in your paper relative
very
in tne security business, and take this opportunity to
thank you for the support you are giving to our cause.
The articles
mentioned have voiced my opinion 100%.
I would like to cite the conditions under which the security
to
profits
'
dealers in this wide country territory
Now for
a
have to operate.
good picture of that end of our business known as
"getting the order," let some of the "intellectuals" take out their
map and note:
We serve a clientele located in seven counties.
Please bear in mind
that 99y2% of our business is secured
below
I
of
the
this
If
for
like
one
ask
the
to
insult, I sold
must be taken
be
be
on
care
of in any way
damned.
a
the board of the
I
am
they
saw
like
fit, and the stockholder
"
-,
Incidentally, I have been
While
stock at
my
much interested, and happen to
Investors' Fairplay League (B. C. Forbes);
very
most
people, a little confused, I am very certain
that I would like to help preserve the capitalistic system, but man¬
agement operating like those reported in the "Times" article, as well
as many of the stock
promoters, have not represented the interests
of stockholders
honestly, and have in many instances been the cause
of trouble and misunderstanding with labor and the
public in general.
members of the Board of Governors
2.
In
that
case
they obviously
this year comes through the sale of
aircraft gun
needs
precious
same
four shots. But
gallon of this
a
alcohol for
war
used to
we are
every
bigger
figures nowadays, and here they
The
are:
beverage distillers will produce
about
a
war
purposes.
And since
quarter of a pound of alcohol
is used in making a pound of smoke¬
less powder,
forms
simple arithmetic in¬
us
that this amount is sufficient
to make
approximately three billion
hundred
two
eighty-five
million
pounds of smokeless powder.
To
make
16
one
of
tire
600
x
synthetic rubber, 53^ gallons of alco¬
hol
required. So the amount of
are
alcohol the beverage distilleries
produce this
could make
year,
than 41,000,000 sy nthetic rubber
will
more
tires.
Now you will understand why
the
Distilling Industry discontinued mak¬
ing beverages when the
and is
arose,
now
emergency
wholeheartedly de¬
voting all of its distilling facilities 24
a
day, 7 days
a
week. .to hasten
.
the day when we can resume
normal
our
peacetime pursuits.
How fortunate the nation is that
this industry was on
Repeal,
bo
hand, because of
that its facilities could be
converted, literally overnight, to mak¬
ing alcohol for war purposes. Had the
present world catastrophe occurred
during the late, lamentable prohibition
period, the plaintive
cry
of "too little
and too late" would have been
audible
of
our
over
the length and
country.
plainly
breadth
-
So please, if you cannot get your
favorite product just
it,
often
or as
when
as you,
remember that not
a
you
want
would like it,
drop of whiskey
has been made by any
legal American
distillery since October, 1942.
We have tried
our
our
stocks-made
ably to
our
inpeacetime-equit-
tried their best to do likewise to their
cease
to function.
capital expansion will have to be financed by
,
4.
In that
appear
case we
—and
no
rationing.
to want—BUT.
will have National Socialism,
you
do get last
longer, and please remember it
made in
peacetime. And
was
no compro¬
mise has been made with quality.
Qualitatively, the product of
distillery is the
same.
it is less. A much
as
good
Quantitatively,
simpler
ing this is: it's just
a
way
of say¬
good, but there
much of it. Greater apprecia¬
isn't
so
tion
always—when it's hard to get.
Agree?
.
,
FREE—Would, you like a handsome book¬
containing the first ten articles in this
and address
on theback of a penny postal and send it to
me, care of Schenley Distillers Corp., 350
let
series? Just write your name
Fifth Avenue, New York 1, N. Y. It's
yours
for the asking.
MARK MERIT
of
,
,
best to distribute
distributors; they have
So, make what
.
business
powder. And the 3 inch anti¬
gun
trade—the retailers. "Cocktails"
an
and
of our
alcohol in the
for the Axis come first these days
good salesmen.
One-half
enemies,
our
war
a
also members of the SEC, if they can cover the Government.
1
on a straight 10%
basis- and make a living wage.
3. In that case the Government will control industry which is
of them are interested, please remember I am looking what
NASD,
territory
any
to
of
gallon of
big loss, because I felt that the management had always
adopted the policy to h—— with the stockholders. The management
at
capital market that it will substantially
zero.
would
direction
a
ridicuously low price,
and
of this amount is secured from
This ^answer will no doubt be much different than the majority
175 miles from our office.
of the answers you have
received, but I am sure you wanted my
When you double this mileage for the return trip and then add
opinion, and while mine is more or less indirect, it is the only way
extra mileage for making sometimes two and three trips before
I know how to answer
your request for comments.
you are able to close a deal, what is your net profit?
We sell only to individuals and the average order is less than
dealer no. 87
$500, which averages over 100 miles driving per order.
It is a
You have missed the SEC's point entirely.
swell job when there is from two to four feet of snow on the
1. They appear to be trying to so confuse and demoralize the
ground and the temperature is anywhere from 10 to 30 degrees
through personal contact and 90%
clients living anywhere from 25 to
the
require
have
purchases in other lines?
,
in
;
AM
155
millimeter howitzer, aimed and fired
hours
'
;
a
Another
con¬
a
-
P. S.—I cannot
not appear
table
antique
copy
to
seem
a
dealer no.
Ideas are what keep any business healthy,
any other line they usually receive their just reward.
I
find a very promising and worthy stock which I can buy,
I have made a very thorough check of the market, at 3y2.
he's
would
between
was
V:--
the salesman is not merely selling a security-
In other words,
monopolized by Houses of Issue.
I make the
request that you consider inviting through your medium the retail
dealers throughout the country to express their willingness to form
and join such an association with common interests and problems.
It
alcohol is
war
Every two shots from
of alcohol for
85
fair enough
proposition, where the transaction is purely of a brokerage nature.
The broker simply acts as middleman, between two parties who
I believe that the retail dealers have a pertinent need for an
are ready
to buy and sell, and he usually acts in a well defined
It would
market.
The parties are brought together, for a fee paid for the oi-ganization of retail dealers for their self-preservation.
agency service, and no greater effort is expended than a couple appear that the NASD and its directing is being monopolized by
those houses who have membership on the New York or other
cf telephone calls.
The volume is likely to be greater than would
be the case with the average sale of the dealer, as principal, to a Stock Exchanges and I can hardly conceive that they have our
interest at heart.
I remember that years ago the Investment Bankers
typical investor and, furthermore, the listed broker in the case of
Association lost a good many of its members because of the opinions
a
margin account has the advantage of easier turnover in the
on
sumed.
8-inch howitzer
an
gallon of
a
this year about 230,000,000 gallons
no.
dealer
I
Every time
barks,
mortgage.
regiment the American people.
hear someone say this is our
I
the
i
for the Axis
production,
taking
up
to
!
YORK
"Cocktails"
1
Americans, "wake up" before the outstretched claws
us still further through the mire.
Yes, and all this while the young "intellectuals" are warming a
chair and receiving fat salaries to formulate still more rules with
limited
commission
NEW
in
butter.
on
series.
DISTILLERS CORP.,
If
a
Wake
fellow Americans.
as
of bureaucratic government draw
themselves, and will continue to so
limit themselves, to a maximum gross profit of 5% on all underwritings and sales of blocks.
'
small
SCHENLEY
transaction, why is it net
transaction?
second
is down
bread
our
and
taxes
getting
wet, but after all there are still such things as common sense and
fairness, aild these qualities are bound to operate in the long run
■for the good of all of us. - We will of course assume that the larger
A
will be of interest to our
invest¬
our
secondary hiarket
a
bright future for the security salesman over there who
upon his return after many months of fighting through blood, tears
and mud to'his waist to protect you and I only to find, that job
which paid him an honest living then, will now barely meet the
proposals, it makes a difference whose hay is
always
of
What
•
,
have
entitled
are
same
the
on
the
now
private investors and whose individual sales may not average high
no matter what his annual volume
may run.
I will concede that,
houses
we
market
business
our
more
these
of work to establish
years
worth
was
NOTE—From time to time, in this space,
there will appear an article which we hope
price we automatically make less in
terms of dollars and cents, and after all is said and done, what is
it that pays the grocery bill?
'
Through mal-distribution of gasoline and other socialistic rulings
profit-limitation rule looks to me like just one more move
toward firmer control' and supervision of the industry, and for that
reason it should be
eyed with suspicion.
But even if you accept
the theory that it is for the good of the industry and the investing
public, in its general outline and intent, there is still no reason
that you should rush to join the cheering section.
Of course, if
you represent a larger house, where your main business is underwritings, blocks of securities sold after the close, and brokerage,
the latter usually in substantial or large lots, then you cannot have
the same concern as that of the small dealer whose work is among
all
ADVERTISEMENT
This is number ten of a
many
the
sell
to
service
If
This
in
on
It" costs just as much to
did
the
profits
year.
taken
worth
pride and faith in one's own line of business.
of
for the
writer
the
in-fighting hostile legislation and rulings, and" in defending
the inherent rights which they feel they have.
We could have
such an organization,-parallel to, and not interfering at .all with
our membership
in the NASD, nor being in any way inconsistent,
and perhaps it might help to create a more friendly and cooper¬
ative spirit among us and more of the courage and independence
born
$25 per
deficit
ment.^
each
by
this busines^ the'owner has drawn
week for his salary and yet the company shows
It has
other
that is
than
less
Such
rule.
has averaged about - 8y2%.
gross
of the'. net
Out
houses would
be a good deal smarter if they would show a disposition to act
for the good of the whole industry,, a very considerable and impor¬
tant pax t of' which-is'represented by the smaller houses.
Other
and
our
'
(Continued from page 2311)
rule
2317
securities; by prospectus which, have, paid a gross of 10% or better
and the other half from the, sale* of' secondary market issues on
Delay In Abrogating NASD "5% Profit"
Rule Stirs Anger Of Dealers
closure
'WirWjtowswrowwT'M.
Schenley Distillers Corp.
Thursday, December 9, 1943
& FINANCIAL CHRONICLE
THE COMMERCIAL
2318
NATIONAL TOOL CO.
descriptive
new
to Brokers
;
price making have existed for
centuries, perhaps 'as long as buy¬
ing and selling themselves have
existed.
During the Middle Ages
it was known as the doctrine of
of
way
introduction
an
to
a
Briefly stated, the present anti¬
Teletype MI 488
States and
laws of the United
Wisconsin Brevities
last year.
'
\'
'
and in various proposals'
to amend the laws so as the more1
surely
their
accomplish
to
*
pose.
pur-!
.
.
^.
<
Many examples might be given
Manufacturing Company declared a yearin illustration of this policy.
One
end dividend of $1.00 a share one>
~
will, however, suffice.y^The Anti-i
the common stock, payable Dec. pany, Inc., has called $155,000 of
its recently issued 3lk%
deben¬ Trust Law of the United States
15 to stock of record Dec. 8. This
declares that:
>
dividend is the same as that paid tures due in 1958, at 104 and ac¬
"Every contract, combination in
crued interest.
• i
Directors of Hamilton
!
in each of the last two years.
The regular
of
25
cents
a
quarterly dividend
share was declared
the Class A Preferential Par¬
on
ticipating stock, also payable Dec.
15 to stock of record Dec. 8.
Directors of Wisconsin Invest¬
of
the. form
Cellucotton Pro¬
ducts Corp. will pay an extra divi¬
dend of ,;75 cents a share on Dec.
lb to holders of record Nov. 27.
The first regular dividend for the
International
trust
entertained by so¬
general, exemplified
by
aforemen¬
laws
tioned, economists lend the weight
of their authority. It must suffice
the present discussion to
for
but
of
one
cite
example of the teaching
economics, but it is a
current
typical one, taken from a widely
used treatise entitled the "Out¬
there
district
or
lines of Economics."
Speaking of
is
trusted thus to admit the real
be
the
was
followed that it
of the proper au¬
duty
thorities
State, town, or guild
of
conspiracy, in restraint of trade
commerce
among the several to step in and determine what the
States, or with foreign nations, is just and reasonable price really
or
The
a
value of things, it
otherwise;
or
in
anti-trust
the
showed that individuals could not
.
'
ciety
.
forced,
"
,
judicial
the several States; in their
Wisconsin's leading
producers of specialty papers, reports net income on the common
stock of $7.21 a share for the first nine months of 1943. Comparable
figures for 1942 are unavailable; The company showed $10.23 for all
oi
in
fairness
secure
for fair prices under competition, it
every
article, at any particular is said:
time, some one just price: that
"There is
a deep-seated conprices,
accordingly,
should not 1'Action that normal competitive
vary with momentary supply and prices (measured hy the expenses
demand, with individual caprice, ofproduction)
are, natural
and
or
skill in the chaffering of the
just, prices.
This conviction is,
market.
It is the moral duty of
however, brought face to face with
the buyer and seller to arrive, as the fact of the growth of a large
nearly as possible, at this just industrial field in which monop¬
price." Moreover/"as experience oly,-rather than competition rules.
country
of;
interpretation; in the demand that
these laws be more rigorously en-;
Company, one of
Paper
Nekoosa-Edvvards
to
policy of the United States
is an attempt to destroy monopoly; "just
price."
As described by
and
thereby leave the field to: Professor W. J. Ashley in his
competitive industry. This policy "English Economic History," -it
finds expression in the anti-trust was held that "in any particular
MILWAUKEE 2
Chicago: State 0933
To this view,
undiminished.
Efforts
trust
MASON ST.
confi¬
its fundamental purpose
continues
consideration of its merits.
225 EAST
at¬
been
popular
it,
dence in
by
PHONES—Daly 5392.
under
essential, under-1 tained
you,'but it should be recalled here
request!
on
...
ours.
the
.
have
that
results
the
•
competition is society's safeguard
against injustice, and that public,
authority is needed here, if at all,
only to assist in securing free com¬
petition. Competitive price is fair;
monopoly price is unfair.
-
dissatisfaction with
is widespread
a
lying features of our anti-trust
policy? The answer to that ques¬
tion is doubtless familiar to all of
Booklet available
and Dealers
as
are
What
such
solve
to
seeking
of
problem
Stock
Common
A
(Continued frompage 2311).
sity
holds
still
Our Anti-Trust Policy
concerned,, public opinion
to the idea'< that free'
is
try
.
.
question of just price is again
live issue—as it was before the
growth of the competitive system.
Public authority is frequently in¬
voked to insure that the prices
or
fixed
by
franchises
of
holders
other
and
municipal
monopolists
'
■
are just and reasonable. The chief
hereby declared to be illegal.
j
The application of such a prin¬
"Every person who shall monop-j
fundamental test which our courts
next year has been declared, pay¬
olize, or attempt to monopolize; ciple to actual business transac¬ are able to apply to the reason¬
ment Company declared a divi¬ able on Jan. 2 to holders of record
tions necessitated a standard by ableness
or combine or conspire with any
of amy particular price is
dend of 8 cents a share, payable Dec. 18. Total dividends for the
other person or persons to monop¬ which to determine whether the its conformity to what the price
on the
capital stock of the com¬ year 1943 will be $3 a share.
olize, any part of the trade or prices at which commodities and would have been under competi¬
pany on Dec. 22, 1943, to stock¬
Kimberly -Clark Corporation commerce
among
the
several services were offered for sale tive conditions"
holders of record Dec. 8.
will pay an extra dividend of 50
Such a standard was
States, or with foreign nations; were just.
It
follows,
according to this
The dividend of 8 cents a share cents a share on Dec. 23 to holders
shall be deemed guilty of a mis¬ found for the producer of that
view, that if monopoly is elim¬
compares with 7
cents a share of record Dec. 10.
time, not in "what would enable
demeanor.
."
inated, as a matter of course free
paid on July 1 of this year and
This law has been the subject him to make a gain," but in "what
Weyenberg Shoe Mfg. Company,
competition
will prevail.
The
to 6 cents a share paid a year ago.
Milwaukee, will call $100,000 of of numerous court decisions, in¬ would permit him to live a decent fundamental aim, then,
of our
Total dividend disbursements in
its convertible 41/2%
debentures cluding several by the Supreme life according to the standard of anti-trust
policy is to eliminate
the current' year amount to
15
which
public
opinion
due Dec. 15, 1945, at 101%,-on'Dec. Court of the United States. Among comfort
monopoly, so that free competi¬
cents
a
share, compared to 11
the most important cases to reach recognized as appropriate to his tion
15, 1943.
may automatically insure fair
cents a share paid in 1942.
class." Moreover, it may be noted
Mid-States Shoe Company, Mil¬ this high tribunal was the one
was."
.
<
!
Directors
National Tool
of The
declared a dividend of
15 cents a share, payable Dec. 20
Company
to stock of record Dec.
3, bringing
total-payments for 1943 to 35 cents
a share against total payments of
30 cents a share in 1942 and 25
.
,
waukee, reported earnings of $1.26
per
in the 1942 fiscal year.
The Board of Directors declared
Oilgear
of
80
declared
share,
has
Company
dividend
a
.10
*
cents
a
payable Dec. 15 to stock of record
Dec.
year
1, bringing the total :for the
a share.'
'
to $2
Gisholt
clared
,
Company
dividend
a
Machine
of
payable
share,
Dec.
de¬
cents
25
14 to
of
business last year
company's
went to the Gov¬
ernment.
a
Burgess
clared
Battery
of
dividend
a
de¬
Company
cents
15
a
share, payable Dec. 15 to stock of
3.
record Dec.
Carnation
Company,
Milwau¬
payable Nov. 30 to stock
Nov. 23, bringing the kee, has declared a year-end divi¬
total for the year to 40 cents.,
dend of $1 a share on the com¬
,
record
Goods
Mfg.
Com¬
Manitowoc, Wis., declared a
year-end dividend of 40 cents a
pany,
share, payable Dec. 10 to stock of
stock in addition to the reg¬
mon
ular 25-cent quarterly.
dend
Nov.
A
25.
paid
was
a
similar
dends
payable Dec. 18 to stock
are
of record Dec.
divi¬
ago.
year
14.
declared
tion
cents
a
.stock
a
dividend
of
25
share, payable Dec. 15 to
of
record
Nov.
27.
declared
Co.
of
dividend
Power
a
cents
50
&
year-end
share,
a
bringing the total for the year to
'The dividend is payable Dec.
$2.
21
v
Water
Consolidated
Paper
Wisconsin Bankshares Corpora¬
.
to stock of record Dec.
6.
,
Line Material Company reports
Northwest
earnings of $1.36 a share for the
first
nine
months
1903.
of
1943, com¬
a share in the
corresponding period of 1942. The
company has paid 50 cents a share
in dividends this year—the same
amount as in the preceding year.
pared with 61 cents
Froedtert Grain & Malting Corn-
Northern Securities Company, was
market
pany
Engineering
declared
year-end
a
dividend of 50 cents
able
Dec.
Dec.
4.
1943
to
15
This
to
$2.50
to
Com¬
a
extra
share,
stock
of
pay¬
a
share, in contrast
$3 paid in 1942.
Among
'
these
by the Antiprescribed the rule
of free competition among those
engaged in" interstate and inter¬
"That Congress
.
.
.
national commerce.
Markets in Wisconsin Securities!
Lake Superior District Power Co,
Common Stocks
Chain Belt Co.
Wisconsin Electric Power Co.
Kearney & Trecker Corp.
Wisconsin Gas & Electric Co.
KoehringCo.
small scale, the
a
on
articles
most
for
was
a
price.
Fully to appreciate this theory
and
to
judgment
pass
its
upon
validity, it is necessary to ascer¬
tain just how prices are deter¬
mined according to the generally
effect
is
prevent
to
this play of
competition restrains instead of
promotes trade and commerce."
"That
and
a
a
new
determine
to
new
view
Here
to
vitiate
a
It
fairness.
full discussion of
though, in view of
to enter upon a
this
subject;
over
as
the act of Congress
will result in a total suppres¬
or
of
sion
trade
or
in
complete
a
monopoly/ but it is only essential
to
show
that
by its necessary
operation, it tends to restrain in¬
terstate or international trade or
"earned" and
commerce
tends
or
create
to
a
monopoly in such trade or com-:
merce
and to deprive the public
of the advantages that flow from
free competition."
Throughout the opinion, numer¬
references are made to the
ous
"natural
laws of
competition," to
arising therefrom,
and to the purpose of the act to
secure the operation of those laws.
the advantages
have
not
modified
this" funda-'
competi¬
monopoly. The so-called
"rule of reason," later applied to
the. enforcement of the law, went
no further than to recognize that
tion and
suppression of competition
necessarily in restraint of trade.
not all
is
before,
as
and
the law remained,
to
prevent
thereby to secure
petition.
Moreover,
Anti-Trust
in
Law
public opinion.
this
a
reasonable standard.
The absence of
a
definitely for¬
determining
mulated standard for
intent,
voices
the
correctly
Although there
of purchasers.
It may be said
to exist wherever the effort of one
to sell involves the effort to over¬
an
come
obstacle in the shape of
alternative
an
available
which
purchaser,
may
the
to
be
pre¬
ferred.
The
effect
of
this
competition
prices. ,; Under its in¬
fluence, price tends to equal so¬
cial cost of production, i.e., a cost
that includes a fair; return for the
services of enterprise and man¬
is to lower
agement. For, if in any industry,
the price is so high as to yield
more than this, others will be at¬
tracted to the industry and com¬
petition will bring the price down,
whereas, if price should fall be¬
low this point, some would leave
to the method by which fairness
the industry and price would go
is to be secured—a method under
up.
Social cost of production,
which the question of what is fair
then, may be said to afford the
may be left to take care of itself;
standard of fair price.
for fairness, it is believed, will
Contrasted to competitive price
follow as a matter of course from
the method of securing it.
That is so-called monopoly price. This
method is the- establishment
of tends to the point that will yield
the largest profit. An increase in
free, competition.
Whereas .for¬
price tends to increase profits by
merly public authority exercised
increasing the rate of profit per
directly upon price was relied
unit sold, and at the same time
upon to insure justice, today the
to decrease profits by decreasing
same
end is sought through the
fairness is not
is
due
to
a mere
accident.
unimpeded operation of
tion.
*
It
the prevailing view as
V
competi¬
be recog¬
field of ac¬
True, it has eome to
nized that there is a
tivity
in
the number of units
the
•
competition can
to secure fair¬
Such, for example, is the
monopoly ness.
case with the telephone, lighting,
free com¬
and other similar industries. Here
of
intent
veloping an urgent need for a
thorough analysis of the basis of
fairness with a view to arriving
at
,
rival sellers to secure the patron¬
age
Nor is it intended here
combination, the controversy
•
follow the usual
standard point of the seller.
So viewed,
fairness competition is a contest between
is, perhaps, too much to
mulated.
may
practice in discussion of this sub¬
to the proper
as
we
ject and view it from the stand¬
increasing tendency to call in the
aid of public authority to secure
reasonable charges, there is de¬
The
Bell Teletype MI 291
which
by
and how does it work?
"unearned" increments and of the
Le Roi Company
,
however,
come,
con¬
Wisconsin Bankshares
1, WISC.
But there
remained and still
remains the
basic idea of fair price. There has
demns, it need not be shown that
the combination, in fact, results
such
Wisconsin Michigan Power Co.
THE WISCONSIN COMPANY
old policies
ideas and
longer suited.
no
af¬
petition is to increase commerce, firm that the present standard of
and ah agreement whose direct fair
price has been definitely for¬
Wisconsin Power & Light Co.
was
old
which
effect of com-
mental attitude towards
Preferred Stocks
MILWAUKEE
business inter¬
when
method of securing
"That the natural
Subsequent decisions containing
interpretations, of the act
Telephone Daly 0525
course
were
Trust Act, has
record
brings the total for
decisions.
further
Active Trading
passing, this standard was not
ill-adapted to the conditions then
prevailing,
Both divi¬
*
record
■
in
opinion, affirming the decree
of the Circuit Court against the
The
propositions are the following:
was
share,
Aluminum
Case, which was decided in
those
paid in 1942.
About
30%
of the
Safway Steel Products, Inc. de¬
clared a dividend of 10 cents a
of
the Northern Securities
payments for the year to 70 cents
share. This is the same amount
a
stock
.
.
that
of record Dec. 4.
;■
limited one, and the consumer and
of prepared by Mn Justice Harlan.
accepted view.
this
opinion, after extended producer as a rule dealt directly
cents a share and an extra of In
.First, then, what is this free
reference |o previous decisions- of with each ol/her.
cents, payable Dec. 20 to. stock
With the passing of years, new competition whose
unimpeded
Court,
sevQsal propositions
record Dec. 10, bringing total •the
were
stated
as
deducjble from industrial conditions developed to operation is to result in fair prices
15
1941.
in
Among Wisconsin dividends:
as
■,
dividend
quarterly
regular
a
,
cents
share for the fiscal year, ended
1943, against $1.58 a share
Oct. 30,
known
■
.
which
not be relied upon
Government
regulation
is
cepted as essential. But so
the broad field of general
ac¬
far as
indus¬
sold.
Hence
monopolist seeks to find the
point
times
at which profit per unit
amount sold will yield the
largest returns. To carry the price
higher would result in a condition
where the advantage of an in¬
creased rate would be more than
offset by
the disadvantage of fall¬
sales.
According to current
theory, the monopoly of any coming
(Continued on page 2332)
Volume
Number
158
World Inflation: War And
and 36 times in Russia.
ly Turkey and Russia were the
only
belligerent
countries
in
which prices increased more rap¬
Post-War
the
of
rate
in
increase
In Japan the cur¬
outstanding increased 275%
during the four years ending in
July, 1943, compared with a 173%
increase during the last war, yet
the official price level in Japan
has risen only about one-third as
rapidly during this war as during
World War I. In Iceland, despite
a
wartime
increase
of
almost
risen only 9%t,
during this war as in the last one.
middle
the
of
1939
of
the
to
in the
expanded
perhaps 200 times in Greece, 35
times in China, 10 times in Ice¬
land, 5 to 6 times in North Africa
and Iraq, about 4 times in Italy
and Japan, and almost 1xk times
middle
1943,
of
hands
currency
the
public
the
Failure to meet
of
Obligations
External & Internal Payment
the
large propor¬
a
Wood, Gundy & Co.
in expendi¬
through taxation mainly ex¬
plains the large increases in the
money supply in belligerent coun¬
tries during the last war. In World
War
I,
France
and
Germany
tion
increase
tures
Incorporated
14 Wall
Street, New York 5
Wires to Toronto & Montreal
Dirkct Private
raised less than one-sixth of their
total
expenditures through taxes,
Britain
Great
military ex¬
of Allied
strain
Direct & Guaranteed
money
circulation of the money.
and
900% in currency outstanding
the
supply was absorbed during the
war by a decline in the velocity of
had
rency
currency
in
increase
the
of
of this war, the
years
official wholesale price level
outstanding has not been as great
From
four
first
Canadian Government Securities
idly than the volume of money.
In other warring countries, a part
(Continued from first page)
With some exceptions like
Greece,
China,
Iceland,
North
Africa, India, Japan, Iraq, and the
United States, it is also true that
great.
Bulgaria,
Apparent¬
and
Austria-Hungary
2319
CHRONICLE
THE COMMERCIAL & FINANCIAL
4236
and
Russia
Canadian Securities
raised
with only one-fourth, and the United .*
By BRUCE WILLIAMS
in the U. S
120,000 inhabitants, price control States, Italy, and Turkey about
It is astonishing how many of us here, and still more surpris¬
measures,
begun in December, one-third. On the Continent, es¬
As will be indicated more fully
ingly also many Canadians have only a superficial knowledge of
in a later section, the less rapid 1942, had reduced the cost of liv¬ pecially in Germany and France,
Canada.
The general conception seems to be that, apart from a
ing about 7% by July, 1943, after a large part of the budget deficits
development
of price
inflation
penditures
during this war is to be explained
largely by. differences in war fi¬
nancing and in price control. Al¬
though
the
note /; circulation
tripled in Germany during the
PRICE
V
Prices
'
risen
have
war
WARS
135
206
132
215
149
231
137
(1920)
180
364
102
180
345
194
*200
United
Kingdom
Sweden
—7--
.,1—
■„
—
Norway
.
Denmark
Hungary
133
(1920)
475
167
"(1925)
+200.000
(1924)
+229
+ 114
(1919)
ers,
830
399
(1925)
on
239
+588
+208
—
Egypt
\
*400
Greece
+ 1,675
"(1918)
+521
(1928)
+3,900
(1927)
'
382
246 (June 1941)
Roumania
Africa
North
t245
—
-
.
;■
their
:
;•■'•••••V.
;
about
"
T
Iraq
Syria
.•
■
.
.
—
„
■■
.
;1„
+ 1,160
„
+117,700
(1924)
4252,167,700
(1924)
Russia
11,200
3,346,017,700
(1924)
Sources:
Monthly Bulletin of Statistics, League of Nations; Federal Reserve Bul¬
letin; J. P. Young, European Currency and Finance, U. S. Senate, 1925; and Carnegie
Endowment Series on Economic and Social History of the World War.
Estimates.
tCost of living instead of wholesale nrice level, and for period July
1914 to July 1918 and July 1918 to post-war peak, except for Turkey which splits at
November 1918.
JCost of living with July 1914=100.
glridex for April 1943. ■'
———
—:
.
—
—
-----
—
,
.
—
*
centralized economies, like China,
India, the Middle East, and Africa,
where price control, tax increases,
and bond financing are especially
difficult for reasons peculiar- to
the area. In the Middle East ad¬
important
inflationary
factors have been Allied military
ditional
number of times
normal
national
combined
with
drastic
expenditures a
the
country's
budget
curtailment
of
in
resulting
imports,
overseas
building
the
up
blocked balances in London.
prices
where
items
rice
as
and
Land
such
for
flour
may
be
tion.
North
as
and
Africa
the
Middle
East, where curtailment of trans¬
portation facilities for civilian use
•caused a
wide spread between
prices of food products in cities
and in the nearby country.
Prices
rose
more
European
only
rapidly
countries
the last war than
because
in
during
during this one
of larger per¬
centage increases in currency out¬
standing the last time but also
because
price control measures
ineffective in
increases in price levels
■,relatively
checking
like
Sweden, Norway, Denmark,
Hol¬
and Switzerland, price in¬
creases from 129 to 292%
(in Hol¬
land,
during World War I were
infla¬
post-war price in¬
ranged from 1% in the
creases
in Denmark.
33%
Netherlands to
>
a
to
neutral
these
ceased
plentiful
gold
countries,
flow
to
and
in,
their
badly unbal¬
anced because military expendi¬
tures were sharply reduced, there
budgets
not
were
reconstruction
no
costs,
floating debt was but a
minor percentage of their total
debt, and the real burden of their
national
doubled dur¬
ing the war, whereas prices had
tripled and quadrupled in all of
them except Switzerland). In the
immediate
post-war
years
the
contrast between financial condi¬
tions
in
former
the
neutral
former
and
countries on
very marked.
belligerent
the Continent
was
lated
is the
cupied in developing the abundant
resources of the territories in the
war
vicinity
In
it
to
more
generously
been
has
and France and 25% in China.
deed,
it
China
will
expansion, with credits
to belligerents so that
imports
(especially in Sweden), and with
curtailment or actual decline in
that
likely
seems
finance
a
Free
and 113 times
in
Russia.
The
price increases
seem
to have
been mainly ac¬
Turkey,
counted for by large
increases in
expenditures that
financed by bank loans and
government
issues
supply
counts)
of
money.
paper
During
War
,
I, the total money
(cash and checking ac¬
increased almost 2 times
true last time.
;
Although not
at the
as
floating
yet
as
end of the last
of
debt
serious
war, the
so
European
many
increasing
rap¬
For example, floating debt
for around 60% of the
accounts
debt
total
of Germany and Fin¬
about 45% in Italy, about
for
40%
France, Belgium, and
Holland, and approximately 25%
land,
Great
for
Britain
and
20%
for
the United States, compared with
rect
borrowing
bank
to
from
the
central
meet
budget deficits has
occurred on a large scale in most
of
the
German-occupied coun¬
tries.
In
France, Belgium, and
Denmark, for example*, between
35 and 95% of the annual budget
deficits has been financed by ad¬
vances
the
from the central
central
bank's
bank, and
out¬
currency
War
war
than
I.
Germany,
Greece,
11
or
and
times in
Roumania,
12
In
to
the
section
River
Peace
found
be
tremendous
are
of
areas
Further
results.
mendous
south,
of
area
the
more
accumulation
of
end
war
immediately, and
have recently re¬
who
liquidated; at this time, however,
normal
behavior
market
fected by end-year
is
af¬
transactions.
tar sands of Alberta is considered
the largest
potential
From New
of oil
source
limited
N. J., was sworn
suitable road-making mate¬
most
dent Wallace
latitudes.
northern
the
for
rial
the Northwest territories are now
nadian Northwest has a large pro¬
portion of the world's fast dwin¬
dling forestry reserves, and its
numerous
powerful rivers are a
of
colonization
Russian
successful
will see a new era of
pioneering. The war-weary peo¬
ple of Europe and especially the
young men all over the world
who have fought in all its cor¬
ners
will have the opportunity
new
by
by the death of W. War¬
Mr. Barbour, who
died
in
Washington
on
Nov. 22,
Republican. Mr. Walsh, who
a
was
is Executive Vice-President of the
Thomas A. Edison Industries,
will
serve
next
November, when
The
Inc.,
election
the
pending
a successor
unexpired term
expire in
appointment of Mr, Walsh
leaders-
in
Senate.
the
Albert W. Hawkes, a
civilization across these
aided especially
revolutionary
Nov. 26 to fill the vacancy
Barbour.
give^ New Jersey two industrial
was
frontiers,
the
on
January, 1947.
period
to push
United
caused
ren
is chosen. The term will
post-war
the
that
indications
as a
New Jersey.
Democrat, was ap¬
a
for Mr. Barbour's
Siberia are strong
Northern
Dec. 2
pointed by Governor Charles Edi¬
son
this
parties to
survey
In addition, the entire Ca¬
area.
Walsh
Mr.
on
South Orange,
in by Vice Presi¬
Senator from
States
discoveries of radium,'
gold and other precious metals in-
Striking
attracting
Jersey
Arthur Walsh, of
asphalt,- the
of
supplies
of
President
Senator
Republican,
Congoleum-
Nairn, Inc.
develop¬
ment of air transport.
Reverting to current affairs, the
significant in this
market, during the past week at
the
in
it'is clearer that the
Barbour As Senator
Athabaska
the
not
Walsh Succeeds
tre¬
inflationary
important
last
one,
is the
"blocked"1 credit
clearing balances in Berlin,
London, and New York to the
credit of foreign central
banks.
Balances
of
European
central
We
specialize in
last, felt the effects of the unset¬
tling
repercussions of the recent
CANADIAN
or
banks
in
Berlin
have
been
esti¬
political warfare and prices eased
in most sections. Direct Dominions
were
1960
slightly lower
were
mated at 13 billion Reichsmarks.in
Fall
the
of
1943,
less than half
a
compared with
billion before the
London balances in the Em¬
countries alone have risen
from £200,000,000 before the war
Italy,
population
a
of many millions.
percentages that were no potential
source
of
unlimited
more, and usually much less, than
hydro-electric power.
half as great.
Furthermore, di¬
Experience in Canada, and the
war.
in
richly sustain
have
markets
cently remained on the sidelines
will
be
encouraged to resume
operations; markets are basically
technically
stronger
as
many
weak positions have been recently
Columbia, the Yukon
Northwest territories
the
now
buyers
pre-war
Great
Belgium and Turkey, 5 to 6 times
the
in the world and can furnish un¬
in the U.
S., more than 2 times in
Britain, about 4 times in
British
im¬
momentous
events;
will
'larger prop fertile,
higher percentages of financing
by taxation in this war should
make it easier to balance budgets
in the post-war period than was
factor, far
in
especially
area,
of
rumors
ties;
pe¬
well watered farmlands;
portion of her total expenditures huge deposits of good quality coal
through tax revenues in 1943 and are readily accessible, and
oil
1944 than will Japan.
The much prospecting has yielded promising
Another
times
post-war
the
In
this
and
In¬
111/2%
and
been vulnerable to bearish activi¬
re¬
northern sections of Alberta and
can
10 %
general, the market is-suf¬
as
have other markets,
pending
tion of the northern regions, and
ex¬
between
stant
exigencies of war have
intensive explora¬
The
riod,
and Bel¬
Italy
New
and
still quoted
were
discount.
ments.
for
national
World
Europe rose all the way from
in
Scotia
from the unsettling effects of con¬
led
in
times
Nova
settle¬ fering,
earliest
the
of
tax
war,
World
War
I, price
levels in the belligerent countries
During
almost 5
on
basis.
Brunswick issues
Canada, as they are fully oc¬
of
standing increased corresponding¬
ly.
This was the practice that
proved to be so inflationary in
„
World
(the total
neutral
these
in
debt
countries just about
that more than doubled
gold holdings of their central
banks and caused corresponding
imports
the
to
declined
debt
national
—
issues
term
climate
congenial
Finland,
45 in Australia, perhaps 40% in
Germany,
35%
in
the
United
States and Italy, and, since the
middle of 1939, for perhaps 30%
of total
expenditures in Japan
idly.
in
3.35%
medium
its
and
country
warded.
shackled, goods for sale (especial¬
more
—
the
Similar
own
our
strain
accounted
total
countries has been
were
exports rose relative
of
After international trade was un¬
largely tied up with a sharp rise
in the prices of imports, with gold
extended
war
in "Canada, 65%
in
50% in Great Britain,
gium to 12 times in Australia, 17
during World-War I.
In
the
neutral countries
currency
of
:
with
very
resources
penditures
Their
their
in
land)
not
suffer much from post-war
were
one
were
did
countries
neutral
these
8'and 10 times higher
much
in
not
In three European
sale.
city'thaii in another, and
as
most
available for
neutrals,
the
price level increased more
than did the money supply during
the war.
As the table indicates,
the volume of goods
of ly imports) became
transportation has been an impor¬
tant' factor in price increases in
China,
have
70%
—r'
'
*500
*520
700 ■
7,000-12,000
1
—
Austria
Poland
are
,
.
China..,
i.-'
'
.
-A—i—■'./
Iran
'
*350
Palestine
the
the
into
entrance
revenues
(1920)
116
180
329
———
'.—
•
*300
---—->
India
cessible
larger percentage of war
financing
through
taxes
and
funded debt this time.
Following
'
A———
or
much
(1926)
234
+ 132
10,000-20.000
— ■->
before
total
In contrast to the last
(1920)
150
•
354
V
*700
Turkey
;
211
§263
France
:
of the^—
areas
sparsely popu¬
lated is certainly true, but it must
be remembered that the easily ac¬
(1924)
205
»
Iceland
at times put a heavy
national treasuries.
+854
207
-
Bulgaria
.—i
(1920)
302
the northern
Dominion
from 5 to 10%
rose
the
§212
__________—u
Switzerland
Finland
(1918)
123
■
floating
of
(1920)
168
A.
short-term,
was
country
That
result, not
a
times, but the proportion
unfunded debt
(1920)
141
U. S.
As
the
human habitation.
generally more on a 3.35% and 3.65% yields, re¬
have diverted spectively. Manitoba 4%s of 1956
were offered on a 4% basis.
Sas¬
40, 50, and even 95% of the total emigrants from settlement in Can¬
The 11,500,000 actual popu¬ katchewan 4V2S of 1960 were in
national debt at the end of the ada.
88 % and Alberta 5s
war.
In the post-war period, the lation in an area,'if we include supply at
expansion and redemption of this Labrador, greater than that of this were obtainable at 77%. Internal
floating debt, some of which ma¬ country, have not yet scratched issues were still in the doldrums
tured at the option of the hold¬ the surface of the potential wealth and the "free" exchange rate oscil¬
for Post war Peak
(Nov. 1918=100)
(1923)
6/080,000,000
1914=100)
334
/'
..
20
to
that
Index
November 1918
(July
.
loans.
only did the national debt of the
warring countries increase from
3
,
the
make
II
AND
I
Index for
1939=100)
109
this
in
rapidly than in World War I
mainly in less developed and less
1943 (Jan.-June
■wAii.
Germany
were financed by
borrowing from the central bank,
which printed money in order to
more
belt, immediately adjoining our northern border, the rest of
is a v/ast frigid waste almost entirely unsuitable for
narrow
during the war
ending December, 1942.
years
Index for July,
Country-
the three
it had risen 135% during
WORLD
INCREASES:
economy
an
on
pire
to
£1,000,000,000 in the
(Continued on page 2322)
well
over
tionals
an<f
the 4s of
quoted 109-109%.
we're
generally
point lowey with the
obtainable at 1163/4.
Columbias
a
Municipal
Corporation Securities
Na¬
about
•
a
Ontarios and
fraction.
were
-
4%s of 1957
Quebecs were inactive with
marked down
Government
little
prices
British
changed
H. E. SCOTT CO.
49 Wall
St., New York S, N. Y.
WHitehall 3-4784
Tele. NY 1-2673
"AFFILIATED
Prospectus on request
.v-Xv-'V/ 'v'-y^
actual ex¬
saving of
be made on a net in¬
savings and shows an
JLt-
deduction.
•
.
New York
"
•
*•
•'
'
•
.
*
*
$
-
of the "Chronicle" is an article by Ken¬
President of Distributors Group, Incorporated, on the
Elsewhere in this issue
$
•
.
'
.
.
•
7
that
needs
to
Employees'
What bet¬
ter form of investment could such
a
committee find than that of¬
fered by the balanced type of mu¬
tual investment company?
Here,
it would seem, is a broad new
field for mutual fund activityin its extreme ram¬
ifications may include up to 15%
la field which
.of
of
annual payroll
corporations!
the "total
American
i
Aviation
■
.
tremendous accumulated
deadline—points which may jus¬
tify taking action for the purpose
of establishing taxable gains or
losses. Accompanying the bulletin
is a tax work-sheet listing and
all dividends paid on
Keystone Custodian Funds during
1943.
•'
defining
The
In
|
Mailbag
inflationary
"How wide is the
.
.
purchasing power in the thirties.
in the banks and
of
the
New
This York Letter contains an interest-1
.article brings out the fact, that no ing series of tabulations showing
one really
knows just how wide the changes in the portfolio ol
the so-called inflationary gap is. Fundamental Investors by; quar¬
Timing.
^Various estimates are
listed, rang¬
ing from $42 billion by the Treas¬
ury Department to as low as $3.5
billion by the National Associa¬
tion of Manufacturers.
The dis¬
cussion
of
this
question is
informative and
the
of
moot
ing of income, or
adequate
savings,; without
"
trols.
the
In
the
con¬
-
x
current
stracts, Lord,
is
wage-
spend¬
the spending of
UPS
the
it
is
more
necessary
of
Ab¬
Abbett asks: "Where
performance coming
to
this
have
but
company,
vision
are
his problems of super¬
proportionate and no
less difficult or real."
The
Letter
to
contains
also
"act
an
for
tax
now
and lists a number of
important things to keep in mind.
savings"
:i:
Business
Shares
And
such
*
the
tax
savings under the present
and lists four
law
important points to
Steel
Tobacco
'
.06
How
.05
.05
_.-L Ai—
'
.10
.03
.04
v——
1
Shares—A div¬
Insurance Group
Jan.
3%0
1944
30,
of
per' share payable
to
of
idend
1943
Dec, .15,
that
1943
15,
share¬
to
holders of record Nov. 30.
■
140 a
1943 to
23,
Dec.
Shares, Inc.
240 per Share
American
of
dividend
—A
payable
1943
27,
Dec.
to
share¬
'
holders of record Dec. 17.
Trusteed
Union
declared
been
Funds,
Inc.—
1943,;to stock of record Dec. 13:
Total
Per Share
Extra
''Regular
1.02
.52
.17
-
UBC
UPS
UCSA
.67
.23
.15
UCSB
of
not
of
.15
to
build
'
industry
to
produce
of civilian living.
What,
with
Talk
the
people
of
this
country, wherever you find them,
of
restaurants, and that is what they
are thinking.
The
people of America have
of the Phileo
been, told
Reserve iBank
Corp./as
a
Director
Jan.
begirnmg
term
Mr. Buckley,
Stout, who
1.
succeeds Frederick C.
served
as
15 years
di-Me
a
direcetor for the past
but declined to be a can-.
again.
TheiRank, also
from
may be
authorized
The PARKER CORPORATION
ONE
COURT ST.,
-erkctien
obtained
dealers, or
BOSTON
,
of
announced
John
B.
the
Hennin&,
Nation¬
your
by
so-called economic
experts that if inflation doesn't
get us then another and bigger
depression will. They remember
well the decade of depression dur¬
ing the dismal thirties. They have
been
told all
manner
of ghost
stories
are
until
today
haunted by the
many' people
fear of another
of idle men, idle money,
President of the Wyoming
era
Tunkhannock, Pa., as a
Director .for another
three-year
plants
term.
helping to win the war, fear
al
Bank,
new
need
for
ever
to
the
of
wheels
slow
down
industry
again.
The
goal of a greatly increased income
annually and of steadily rising
employment, when peace comes,
need not be a pipe dream. It can
And
attained.
be
new
with it
we
can
the threshold into the brave
cross
world of progress
and
pros¬
perity for everyone^'*
I don't say
We
'"that"1-dt%ill be
know
all
it
that
easy.
won't
be.
Anything that is worth having has
to
be earned.
What
have
we
ac¬
complished in this country in 150
brief years hasn't been easy. But-
^ ^as been well worth all of the
I effort. In that brief period a great
the! pation has been built out of what,
ican
in
progress.
wants and desires
selling,1 marketing and
*dvert;sing, so that there is no
stantly
war
winning weapons should fear that
peace will bring disaster?
They
do not doubt the ability of Amer-
and
know how to create con¬
we
through
strange
offices, in the stores, on
the trains and street cars, in the
Federal
And
who
industries
our
expansion
for
ity,
have been so
supremely confident of the power
people
The filling of the present
job.
oeople will provide every oppor¬
peace.
it
Is
defeat?
than
more
tunity for employment, for secur¬
job of work.
afraid
comes.
peace
There is
wants and needs of the American
want and can
free handout. The^
then, do they doubt? Is it not that
they question the national will to
so organize our efforts and activ¬
ities that real post-War progress
will result? '
•
;
;
.69
.23
+„_
nomic
goods
...-$1.22
.56
.17
—
$0.75
.50
UBB
$0.47
.46
UBA
a
They
fear victory. Is it not strange that
people who have 'never feared
military defeat should fear eco¬
are
when
America,
enough useful work to employ
satisfactorily everyone who wants
The American people today are
skeptical about how that is going
to be done. That is why many of
that
dividends
have
payable Dec. 20,
following
The
; •
they
a
■' 'v
;
out the world.
It' is
something that will have to be
produced
in our factories and
plants and brought about by sell¬
ing with ingenuity and aggres¬
them
shareholders of record Dec. 10.
Selected
a
cannot do the same for
There is work to be done through¬
siveness.
Second
Massachusetts Investors
is
it
know
Custodian Fund "K$1.75 per share
Dec.
world
have—isn'4
to share¬
A dividend of
payable
in
silver
a
there is no
guns,
There is much work to be done
better world—the kind of a
a
better
holders of record Nov. 30.
Keystone
on
we
the bottom of
scrape
for
butter.
world" to be handed
everyone
can
we
barrel
reason
platter when Hitler and Hirohito
They know
dividend of 67$ per share
payable
If
the
throw up the sponger
Custodian Fund "B-
Keystone
I"—A
to
our
but fear itself."
couhtry
this
•
that there will
ingenuity, initiative and
.The words of President
Roosevelt, under more adverse
conditions, are truer than ever
now—"We have nothing to fear
being fooled by all the talk
"better
a
around
shareholders o'
1943.
record Dec. 31,
:
public thinking?
The
people
of
so
energy
.11
.115
selling job
ulate
this text tie in with
does
as
always be unfilled desires to stim¬
war.
!
'
_
-
.04
.06
equipm't.
■___
.09
.07
.05
Railroad
Railroad
cer¬
.16
.11
opportunity
an
takes, if we do the job wisely, of
taking the brakes off of produc¬
tion and then everlastingly doing
lose the peace
we
,
.
these times will have be in vain.
If
'
has never been
prosperity.
With unfilled wants
and needs, with purchasing power,
with capacity, skills and methods
to produce, we have everything it
America will
end up behind the eight ball just
as
surely as if we had lost the
0.6
.09
Petroleum
i
.20
.
of the Bank for a three-year
Prospectus
Keystone Corp.'s Keynotes calls
attention to the possibilities for
Mining
i
.02
,03.
'.03
Merchandising
The
com¬
*
.11
-.12
than
more
before any
there is today for Amer¬
ica. We haVe all of the ingredients
of a recipe for peace, progress and
Philadelphia announces!ithe elec¬
tion of James T. Buekleiyn Chair¬
man of the Executive Committee
posite summary folder of all Lord,
Abbett-sponsored funds have been
issued recently.
*
.03
Low priced
;
capacity
there
yet
people
we
win the peace, much
suffering and sacrificing of
of the
Phila. Reserve Bank^
American
a
.10
'
Elected Directors Of
excellent
and
",02
j
Dividend
agement concentrates a
tion of UPS funds in that grotrp.
on
company
#
of se¬
nihnlarge $6r-
folder
Investing
It is
had
we
used in the thirties.
we
this
losing
unprepared.
were
Unless
.17
.10
payable
tunity in a particular group
curities presents itself, the
revised
machy._
.10
share
performance record, according to
the bulletin, is to be found in the
flexibility of the UPS manage¬
ment. Whenever a buying oppor¬
A
Industrial
portfolio
management. Although an inves¬
tor may not hold as many differ¬
ent issues as a large investment
30, 1943.
answer
.20
.04
Inc.—A dividend of
MIT's
Brevits
discusses
the
referred
to shows UPS up 40.6%, exclusive striking
contrast between stock
and bond yields today as com¬
of dividends, as against an ad¬
vance of only 8.5% for the Dowpared
with
their
relationship
Over this period, the
Jones Industrial Average in the since 1900.
period from Dec. 31,1942, through
The
.17
.09
.13
Fund,
from?" The performance
Nov.
.10
.11
well advised
of securities is
a
successful
to
Fund¬
that some¬
evident
than
selection
initial
of
record
market
admonition
issue
.07
administered-
The Letter comments: "In view
amental
it&ES,- such as increasing
price spiral, the confident
ended
portfolio.
An equal number
holdings were added.
thing
we
months
new
think, the inflation¬
ary gap is not so large as pub¬
licized, it does not represent the
menace
it is supposed to be; in¬
flation, if it comes later is more
! likely
to result from other facas
12
Sept. - 30, 1943. ' During this period
28 securities were eliminated from
of
"If,
the
for
ters
and
concludes as follows:
interesting
we|
risked
we
stayed there. They know we
great capacity to produce,
it
tainly possible to lose the peace if
we are equally unprepared for it.
!
.03
aren't
issue
1
Dec.
The
ities & Research Corp.
issue of Investment
.08
Gen'l bond shares-
Pull
Utilities
National Secur¬
in its latest
questions
•pap?"
'eqiiipm't
purchas¬
power—probably a hundred
dollars by 1944. But they
know there was also great unused
billion
in Pearl Harbor days because
war
,18
.03
.03
that
now
'
Pood
considered before the Dec. 15
.08
.05
the
They know that there is
The money was
!
.32
were
in
needs
ing
.18
.10
1-
Chemical
Electrical
be
.06,
.12
.,32
—
Building
street—new york
63 wall
and
and with a busier,
happier America we can lead the
way to a brave new world."
Mr. Fuller's address follows in
$0.15
$0.06
$0.09
—
Automobile
Incorporated
GROUP#
busily. But
that there
also know
full:
Agricultural
an
keep
can
thirties.
.
_
in
that
wants
Shares
funds
and
wants
are
filled
fears
these
hold
there
be
all
,
unfilled
,,
the
•*.
factories humming
our
they
•1
Profit-Sharing Trust?
a peace
incentive
stifle
that
know
•
Oct. 31, 1943, amounted to $8,760,'subject of Employees' Profit-Sharing and Retirement Trusts. These
Here are a few facts which I
593, compared with $8,516,012 six
trusts are comparatively new to American industry but have been
months earlier.
:
./■
think we will all accept.- They
made so attractive by recent tax laws that they are bound to become
Total net assets of the series constitute the text of my talk this
increasingly popular.... \
A.
,
: ■ ■' ■
,r
"S-3" fund were' $1,138,613 as of noon, so let me list them—
The significance of their de- ^
First—We have come so far to¬
Oct. 31, 1943." This compares with
yelopment to the mutual fund
ward a United Nations' victory in
$1,033,577 on March 31, 1943, the
field can hardly be exagger¬
this war that it is now apropos to
rih'tdate of the previous report. Comated.
For these trusts involve
Railroad
bined asset values of all ten Key¬ consider seriously the problems of
dIuc
annual allocations of up to 15%
The war isn't won yet.
stone Custodian Funds on Dec. 1, peace.
nob
of a corporatipn's total PAY¬
There is much fighting still to be
•!
amounted to $61,032,000,
I':
ROLL, such funds to be invest¬
Equipment
done. And there is more sacrific¬
ed in any or all types of secur¬
Dividends
ing ahead for everyone.
But we
ities at the
discretion of the
A Class of Group Securities, Inc.
Group Securities, Inc.—The fol¬ are definitely on our way to Ber¬
corporation trust committee.
lowing dividends have been de¬ lin and Tokio.
What corporation trust commit¬
Second—The problems of peace
clared payable Dec. 24, 1943 to
Prospectus on Request
are
unsolved.
Peace
tee, busy with other management
presents
shareholders of record Dec. 11:
problems, will want to assume the
—For Fourth Quarterproblems almost as great as the
full responsibility for supervision
Class——
■'
Total! problems of war itself. We know
Regular.. Extra
DISTRIBUTORS
of
will
Those
is
way
confidence,
of Keystone
Custodian Funds series "B-2" and
"S-3" have come to hand.
Total
net assets of Series. "B-2" as of
The annual reports
fearful of
along the line.
opportunity far greater than our
"If we
take advantage of this opportun¬
ity
we have no need to fear."
"We can greet the future with
$43,902,-
$
.,
never
And
of freedom,;
as
are
in Which the lack of pre at'oppor¬
tunity
of life as
have before.
It is an
selling
our
well
as
businessmen
record of accomplishment.
V--'-.A
•
■-
use
we
■
Mutual Funds
-
"the opportunity before us now
to
Total net
1943.
31,
that date were
on
853."
Investment Tresis
neth S. Gaston,
*
*.
.
Bullock's
Oct.
assets
A New Field For
*
ities
idle men and
now means
plants."
Mr. Fuller concluded by saying
.•
ended
I
idle
Bulletin re¬
views the annual report on Divi¬
dend Shares for the fiscal year
ANGELES
LOS
know
we
•
Calvin
JERSEY CITY
CHICAGO
.
and Services'.more
which
goods
desirable than idle' money,
$184 may
come of only
$3,000 through es¬
tablishment of a $1,000 taxable
Abbett & Co.
INCORPORATED
63 Wall Street,
makes
ample of how a net tax
"u:
,
possibilities for tax
of
summary
«'f a
.
(Continued from first page)
cycle" and "turn purchasing ; are working themselves out of
jobs.
Civilians fear peace will
power into action so there can be
progress
and
prosperity,"
Mr. mean a continuation of rationing
and
Fuller said "the answer is by dy¬
shortages, of price ceilings
namic
selling, the selling that and freezes—freezes of opportun¬
fear
interesting
Brevits, too, has an
v:
When Peace Comes
stocks.
from
jl* '!'!*/■
been
has
yield
bond
average
4.50%, as compared with an aver¬
age stock yield of 5.94%,
Today
a yield of 2.77% is available from
bonds as compared with 5.62%
A
•v*''-j
Thursday, December 9, 1943
COMMERCIAL & FINANCIAL CHRONICLE
THE
2320
Some
and
idle
workers
in
idle
opportunities.
the
factories,
■
in
the
beginning,
only
was
thin
a
and poor strip of civilization along
the Atlantic coast, with perhaps
95%
the
of
people
ill-fed,
ill-
clothed and ill-housed by present
standards.
'
;
It
has
vies
to
this
is
of
fight
the
miahty nation which
equipped the armies and
ourselves
on
world;
ward
and
fifty battlefronts
energized
industries of
the
China
na¬
allies
our
over
back-,
and
In¬
dia; provided plants and machines
for
Russia, Australia. Persia and
America;
built
railroads
the
desert; spanned the
oceans
with
bridges
of
ships;
girded the globe with airliners
and performed industrial miracles
South
across
frcm Iceland to
Egypt.
Yet today we are not tired.
Do
weak
wonder
you
which in
the
and
that
thirties
a
nation,
seemed
decrepit. to
work for ten million idle
too
provide
men
and
they women, was able to amaze the
■-Ml
'.V,!'""!'''V
'*'•
'
V l.
"
•
'
•
il
i,
'<n
r.
.
-
,
;
,1
,
iH;. '
:>■
4
uiy
i
'
;
.
.<
,
1
t
Volume
158
Number 4236
-■,„i
i
•
world
and
with
its
1943?
We
is
eliminate fear?
easy.
We
when for the first time
make
that
have
We
bless
failed
we
making / ingenuity
fear, and thereby help¬
We didn't do the selling job
the products of
that would make
factories
row
impels
men
ative
and
and
to be
women
It
is
in
want. We
job that
wonder
no
that
who
had
done
Isn't
there
to
utilize
save,
ourselves
when
peace
allied
governments.
feared defeat
else
and
The
but
to
at
the
customer
cost
in
war
This is
national
dom
did prove to every¬
one that customers are the answer.
we
peace
again? That
They must be
economic;,
customers
who
buy
debt.
increasing national
We certainly can't afford the ex¬
travagance of another depression.
to
will
customers
be
the
135
simply have
million
Americans
and the people in other countries
who want and need the
things
that
factories,
our
They must want
a
and
of life.
and.
keep
If
our' /
and
mocracy
imprisoned
disaster,
free¬
preserve
preserve
freedom
selling
selling
our
win
we
in
the
war
i and
do^-
of
life
way
concentration
<a
avid
people, to
"wolf" today have a purpose. I do
not. know and I'm. not
going <to
point
But
finger
a
they
may
they
say
at
■
think
/, What
the
buy
.want and need?
causes
things
How
their
there is
motives.
are
they
we
go¬
than
more
desirable
idle money, which we know
means
idle
men
and
idle
.now
plants.
It can't be done by threats.
Nor by raising the
ghost of an¬
other depression. Nor by scaring
ourselves to death with the possi¬
bilities of inflation. Nor, by freezr
ing
our
ecopomy and our/oppor¬
tunities^ancjL,purr)|reedom, Nor by
"
continuing rappping, price con¬
trols, ceilings-other war-time
^necessarily
expediencies
the future.
/ 1 Many
be mistaken, when
that dangerous inflation,
tion .and
the
depression
time.5
same-
that
all
we \
•
hurried off
to
at
did,
I;
know
when
work
war
and
one
And
we
•
was
to
are
restrictions
gladly accept in order
to. "back the attack" upon the
Axis. But when the war; need is
finished they become denfensive
weapons in the battle on .the eco¬
we
nomic front.
We meed aggressive
,
Weapons to win, In the coming
days dangerous inflation must be
prevented. But is "defense"' the
best solution?
The
tack."
.
term
very
Americans
"back
that
means
long
this
same
ago
war
and
predicting
were
have
about, both
any
an
They can't
predictions.-
than
more
inflationary
we-
a
as
the at¬
nation,
.
We can't be hell-bent for destruc¬
tion in two directions.at one and
the
time. '
same
I
.
have
,.v;V;.»
•./;
fintention of, joining
no
the camp •, of; either of
j, the
eco¬
nomic dogmatists,: What I do want
to
do, however, is urge that we all
a. good
square look at the
take
really
.American,
constructive;
way^
If depression is ahead.,: let's
set out to solve ft;
not-temporize
,
with it. If inflation is inprospect,
let's find ways to combat it,and
derail it that are based on Amer¬
ican
principles
and
incentives.
Let's prepare for ipeace in sound
and: logical ways..* » ♦ >■ '■'. / /
:»
The inflationists fear, that when
will
.front
on
holding,
the
eyen
eco¬
now?
succeed?
,
go
binge
on
and
such
Dnieper, or
Did, the
French hold the Maginot line?
/ And let us ask ourselves this
have
never
the Germans hold the
the
Volturno
lines?
.
.
question—if we continue ration¬
ing, etc.,, into post-war, won't we
continuing
regimentation,
Won't we be substituting danger¬
ous
experiments
in
managed
be
economy
racy?
for freedom and democ¬
Are
problems
we
of
going to solve the
peace
by
creating
a
;
had
want, to, you
mate, of
big; spending
afterwards
hangover as they
wake
With
people
great
a
Did
ever
that
thing
the
•
i,«.»
>
J.
."
•*>«*■
1
«•
•
.
«
«
tau
i.«tiOm.
ut
mj
n
i
'*>4#
h
instead
people
is
power
alone
power
for
,
energizing
that
in
duction.
money.
and
more
and
how
much
purchasing
shirts
of,
,
tion
gadgets
in
Certainly
fear
the
'
the
49
They
panacea.
up
before.,
can
If
you
look at the esti¬
hundred billion dol¬
lars backlog in
buying power by
1944
one
and
needs
the
of
accumulated
feel
the
your
hands
But
let's
and
people,
wartimes,
of
Lots
their
prospect right
wants
American
in
throat.
shaking
unfilled
the
and
inflation
of
heads
people
over
on
are
-that
now.
not.
jump
to
conclu¬
Bishopsgale, E. C. 2
will
be
Burlington Gardens, W. I
64 New Bond Street, IV.
sounder
wartime
TOTAL
emergency
of "thou shall not"
'
again.
We
need
and
in
turn
put
before.
ever
be
a
Isn't
out
end
an
of
income
and
instead of splurging it/ we
have little cause to fear
We
thejn
have
BANK OF
(ESTABLISHED'
Pald-Un
to
to induce
war
to
conserve,
do
this
Fund
Reserve
'
people
and
those
bonds.
SIR
ALFRED
that
lessons
wiil
be
for
—to
con¬
that
own
live
We
peace comes.
forgotten
portance
income
can
about
and
will
not
come;off
870
branches
production line for six months
a
year after complete victory.
And
what
about
the
fact
.
or
,
..Part
will
is
war
will
•,
end
bombshell
of
our
with
efficient
traders
y
But
dropped
peace
over
the.
is
war
most
service
!
complete
to
investors
Interested
In
thes#
<
OFFICES:
,
29 Threadneedle Street, E. C.
Berkeley Square, W. I
with
arrangements
throughout
buying,,war
by
the
Banks
(].'8.
A.
t
NATIONAL BANK
bonds
of EGYPT
Head
to
make
the
stronger,
and
thus
FULLY PAID
RESERVE
induce¬
still
It
to
'
.
would
make
it
Cairo
CAPITAL
FUND
.
£3.000,000
.
£3,000,00t
.
.LONDON, AGENCY
and
6
7
;
•.
KJng
J
William
s;
t
In
principal
Towns
■
.
E.
Street,
It.
Branches
EGYPT
desirable
more
Office
Register ko/' I Cairo
Commercial
public
the barrel and have little remain¬
*
LONDON
47
provide
■
-
Agency
be
ment
in
now
the
travellers
,
,
j,,.
a
greater incentive, the
might, be offered a little
for? some; industries.
The
construction industry; the cemerit higher interest rate in, a refund¬
industry and others have filled ing. That would appeal to many.
laps.
banking
and
countries.
offers
our
Therefore,
sudden
a
Id.
it
and
sell the im¬
weight to the importance/ ducement to keep them, and par¬
change? There has,.been ticularly if there is a tangible ex¬
tendency to assume that this tra, incentive \ of some nature.
a
over
London,
proper
of this
war
oldest
the
With
Australia,
Fiji, Papua and New Guinea
selfish in peace and cash
pretty well over for
some
individuals and some fac¬ them in. Many people will; un¬
tories? ' They already are in the doubtedly. But certainly many,of
them won't, if there is a real in¬
transition period. Have we
given
the
of
worry
about the
future is that those who have been
patriotic
that
Wales is
Australasia.
States
and
.when
of
of
in
all
in
New Zealand,
incentive is there.
the
Manager
George Street, SYDNEY
and largest bank
self-protectidn/, too
out yof
Office:
~~
_£150,939,354
The Bank of New South
we employ the
selling to induce them—
their
£23,710,000
30th~^
DAVIDSON, K.B.E.,
General
Head
Why can't
power of
L_-
Aggregate v Assets'
Sept., 1941
tech¬
£8,780,00b
6,150,00C
8,780,000
Liability of Prop.'
would
sales
our
1817»
Ji-J-.
Capital
Reserve
inflation} ;
utilized
nique in this
apt
have been taught thrift and
servation.
Can we assume
Ltd
Glyn Mills & Co.
NEW SOUTH WALES
to
keep their
savings for personal
for
future
home
major investments;
backlog 'of
restraining and sobering
For two years now they
factor?
•
Bank,
Australia and New Zealand
to
emergencies,
building and
but;I
that
Deacon's
some¬
our econ¬
People know they are go¬ important to the war
effort; and
to have to pay higher taxes to put their
surplus funds into war
than
ASSETS
" Associated JBankst "
•'
<
Williams
world.
to
I
£108,171,956
; If, when peace comes, the peo¬
ple of this country decided to live
will continue to think war bonds
are
the
best investment in the
ing
Smithjield, £. C. /
Charing Cross, S. W. I
post-war lives.
exist
omy
future
large percentage of
Scotland
OFFICES:
fear in all of its hideous forms.
are
not 'going to
their principal protec¬
tion
against unemployment { and
misery. Do you think people who
fear, idleness are going to spend
themselves
/into
/ destitution?
Maybe they are going to, rush out
and .cash their war
bonifs;
a
3
8 West
salvation.
thing that will stimulate
dissipate
think
only
throughout
LONDON
with human nature, that
permits freedom and democracy
people'' who
many
Branches
along
\
...
some
worth
of the American
people. What we
need is
something that goes along
first
/■;
are
be
may
contrary to the human nature
for silk to
the
flush of peace?
of
our
is
accumulated
power will go
and
1727
OFFICE-—Edinburgh
hopeful than continua¬
An economy
if
properly predict
the,
which
more
into
he wants and for what he wants.
can
which
simply ideas to consider. Per¬
haps they may point the way to
wants, where
Who, then,
have to offer
methods
pro¬
every American to spend only
he wants, when he
Incorporated by Royal Charter
glory
are
No*one has to spend his
It
is
the
privilege of
:
their
HEAD
economy is
our
These are not a
as
payrolls
with
considering before we plunge off
the deep end and
say that a con¬
trolled,
managed,
regimented
produces worthwhile results
jobs,
Royal Bank of Scotland
shovels
made-work
on
'
proposals
important
as
machinery. It is the
of purchasing power
are
along
What I
means
Purchasing
thing. Purchasing
in the bank creates nothing
itself, except trouble. Markets
are dynamic.
They are intangible
they,
plants and
rust
and skills?
of
but
WPA
new
will
projects
goods.
static
a
returning heroes are
^jobs and payrolls
with
of
which
Above
i
2321
our
rewarded
another,
all?
or
facts.
that
sure
dangerous
a
power
and
all
the
C
i
•
.
,
the
'
!
in
SUDAN
ing war work to do. Some car¬ to hold the bonds to maturity than
tridge plants have been taken out to cash them in for purchase of
of
production.
Some
some
locomotive
and
stopped making tanks
again building engines.
are
The-
Civilian
WPB
has
tories
to
Supply ' Branch
authorized
make
washing
some
electric
machines
•
cost
higher, but if
it will be
of.
Tfie'se
'fac¬
But
of
we
it
war
a
will
little
NATIONAL BANK
control inflation
cheap.
are.
Yes,
the
.
,
,
only steps/of
course.
i
of INDIA. LIMITED
i
haven't exhausted our possibihties by. any means. There are
irons,
and
extravagance.
make the
works have
other
products of civilian,
industry. This
tendency will increase as more
industries got over the
taxes, for instance.
}•"
j
Bankers
we
Head
An excise tax
hot money.
r
.
" 1
t
Government
Colony
in
.
.
Uganda'' i-'1!
and
Office:
26,, Bishopsgate,
London, E. C.
'
\
•
on
/
(
the
to
Kenya
A tax adjusted .to
production rate of those items
hump of
war
production. The Army, this | Which ' are in greatest demand,
month turned back thirteen bil¬ would avoid the danger of putting
lion dollars. That
is: thirteen bil¬ brakes on our* whole economy; It
lion
dollars
of
war
production might'he a smart way to elirfn-
07ll!
Branches
the
•t;
-
in India, Burma,
Ceylon, Ketftii'
.poiony- and;.Aden, and Zanzibar
-jbiq
,
.
'
that
no
longer is contemplated.
Also it is 'thirteen billion 'dollars
future and then, prepare .to deal
with whatever danger exists in a;
taken
peace comes the American
are
defense
can
depression.
Is the line of defense
nomic
the
depressing in¬
a
primarily aggres¬
sive. Is' the defense way our way?
Does
that
depression
can't have
flation
so
known.
ever
right
"We
not
would end in the biggest
grandest
world has
be
who
ones
,
controls
war-time
necessary
'which
the
are
into
Vrow
of ' -these
•
one
all
markets
chance
a
ing to end the fear cycle; turn lock the depression in a closet
purchasing power into action so; and it is still there
ready-to haunt
there .nan. be* progress - and pros¬
us if we
give it a chance. I know
perity? The answer is by dynamic that some of those who are shout¬
selling, the selling that makes ing the
warning of inflation today
goods and services
i
■
,
I do
get fearless and
we
customers?
a
.
vices more than they want dollars/, is
unavoidable, except through
•They
must
want
them
badly continued
regimentation.
I
do
-enough to work and earn them. know that we cannot have infla¬
So how do
'tl
«t
keeping 1 reserves to
camp, what have we won?
That just because/the war is won?; ;!?./ provide j,obs through investments
is not preserving them-—that is
// Many people may. prefer to and. expanssion, just as certainly
embalming them.
fYr/
'£.
4; wait for the wonderful new prod¬ as we can sell the importance fo
which
Maybe • thosev who are crying ucts
have
been
talked saving fats and .salvaging tin; The
that
ser¬
to
is
democracy, to
and
goods
way
our
to
war
produce.!
can
from
comes,
way
the
sound
■,
without
The
•
is
comes
problem.
economic doctors are
freedom of choice and
Who will be the customers when
•
take this bitter, pill,
we
some
bureaucrats ration
problem temporarily
colossal
a
But
.
to let the
lives, put
ceilings on our efforts, and pri¬
orities on our futures, let's em¬
ploy our ingenuity a bit.
They
of
way()
of
prescribing,, that the only
spend.
gigantic
-shelved
debt.
had
Before
than anything
more
.still
.
ment total mounted and the relief
•rolls melted. The customers were
•
a
instead
which
-the
and
which
ignore our
incentive principles, a way which
will let freedom and domocracy
reign again in this country, a way
which will inspire confidence and
stimulate rapid progress?
:
will
have goods instead of money came
•along in 1940 and 1941, then- the
wheels began to spin, the employ¬
•
selling job which
an
expanding
for
successful. future
lems?
designed to relieve un¬
employment failed to cure the
depression.
They piled fear of
taxes on top of fear of unemploy¬
ment.
/ / • /
/.
•,. /'.,/"
customers
can pro¬
right after the war, as some ex¬
perts insist there is, can we meet
that danger in an American way,
as we. have always met our
prob¬
programs
When
do the
we
be
and
purchasing power into
and changes dollars into
-markets;
domocrac'y. We
prevent inflation? And if there
is as great. danger of inflation,
translates
.action,
do
is
purchasing
must
cre-
productive
more
order to get what
they
didn't
do
the
selling
will
without
eco¬
real
Can
of figures in a bank book.
We didn't do the selling job that
a
dynamic
our
solve
can
It
! assume
let's not repeat the mistake made
in the thirties of
assuming that
desirable than
more
We
can
,
ing to create both fear and dis¬
our
the picture.
pastime to
.
security only,; through
aggressive selling, which creates
jobs and payrolls and opportun¬
ity. Through ways which necessi¬
tate more production we can suc¬
ceed economically in the future
just as we are succeeding in a
military way today. /_..'
v
money"
aster.
to
.
economy with
our
vide
,
for fear of
•
sions/ Let's look at both sides of
dom and
enough to do the job., They wpre
fear bound, freezing their
money
for fear of
disaster, or freezing
their
•» * r i
»■'
,
nomic .problems.
But we can do
these things only through free¬
progress, was
have
customers
didn't
working
by
eliminate fear. We
can
customers.
economic
we
fear—or
more
had the power air of the time. The
trouble in the depression years,
to
'
.
THE COMMERCIAL & FINANCIAL CHRONICLE
in'1942
answer
weak;
never
■
—
strength
The
were
1 ■ I
1
1
out
of
And .that .is
I am not
when
the
lot of dynamite.
a
trying to establish that
peace
comes
the
it
Either
will
be
a
not
I work. for
1
make
we.
the
tax
a '
booby-
automatically
con¬
Trusteeships
y
American
each
of
still- another
tical
demand and
Can
defer
that
go
of
balance?
down,
The
releasing
the
of the public
production rate
do.this;so
as
to; make
sure
We might call it
!
production is patience. V --- '
'
being encouraged instead of dis¬
We would
be"
t
tax
on
im-
controlling
the
a
times
couraged? Can we do it so as to
stimulate employment and- make
inflationary
time
be
urge, and at the same
ready to have a normal
hit
a
-
the
first
more prac¬
miss
or
spiral is started all
taken off too
or
system
soon
over
again,
so/that in¬
flation
more
thdse desires
exceed
economy
than
continuing, wartime controls,
so long that the deflation¬
ary
tax
employ our sales tech¬ prevailing in the early post-war
nique, our selling way of life, to days. It would be adjustable and
bridge
this
dangerous
gap
of temporary, and apply only to the
transition from war to peace? Can hot
spots in consumer goods.
we
'
'
: ■
either
supply would be in
we
that. at 'all
j" '
opportunity/.Isn'tThis
consumer
the-' war-time controls- into demand as
production of specific
period of peace, without be¬ goods
increased,/until finally there
ing: certain that inflation is on the would
h,evpo/need /for such a tax.
way, andoiwithout trying desper¬ The
danger- wpuld be. passed.
ately too find : a better * means •' of
It would in.
effect bf an antiavoiding it,- we may * be bringing inflation htaxv, * *if
-fs •;Intended to
disaster
Executorships
'
us?'
tinue
variety.
and
also undertaken
system
gets away from us? And
perhaps .it is a suggestion that
would prevent penalizing every-
the
about
^£2,200,000
conducts
every
description... of
banking and exchange business
Why, not have a
sliding excise tax/, that would .be
the production rate in
would
Capithl__;J^£4,000,000'1V:'
CapitaL^„4.«i:_£2,000,000
Fund^
Bank
are
going to have high taxes'; any way,
approximate
if
Reserve
The
industry • where
shortages/ will exist, so that at all
block-buster. times during the transition period,
assumption As
But
We
too.
Paid-Up
inflation i adjusted to
bomb will be a dud. That would
be as shortsighted as to assume
that
jnate black markets,
bomb. tWhy
inflation
Subscribed
one witlt^prioTities,, price/.ceilings,
etc..- when the danger may exist
"iq^ply a relatively, few lines and
,
i
piquets.
yfp.
taxes
is
/.
have
as
our
thought
destructive force.
a
because
has been
;
always
sound
no
made
economic
to
effort
ever
relate taxes
scene.
of
That
to
They have
regard¬
been levied and collected
less of what harm
might be done.
But do they need to be destructive
alwayc. Taxes
are a
(Continued
lot like elec-
on page
2324)
"v.,
►
2322
i.,»i,»* 1*1
THE COMMERCIAL & FINANCIAL
CHRONICLE
Thursday, December 9, 1943
stabilization loan in 1942 to China,
in order to buy gold from the
(Continued from page 2319)
Fall of
1943, and India is now accumulating such balances at the
rate of £300,000,000 a year, which
largely explains why India's cur¬
rency outstanding has more than
quadrupled since the outbreak of
the
In
war.
Middle
the
East-—
Iran, Iraq, Egypt, Palestine, Syria
—England acquires local currency
to
meet her
giving
in
balances
to
late
pound sterling
London, which tends
return
in
local
cause
crease
military expenses by
as
currencies
to
in¬
those countries accumu¬
London
balances.
Much
the
expansion occurs
ill the German-occupied countries
as their
clearing claims accumu¬
same
late.
in Berlin.
•.
a
;
result
of
the
the
during the last
'iy,-•' '•
was
of
the
central
banks
in
paper
coun¬
circulation
existing
to
in
this country
military expenses,
import gold and use
will
Chinese money
received_from
sale to meet China's military
its
in that
expenses,
Germany at the
exchange
from
money
China
the
than 5 times
more
avoid
further
increases
in
rate,
Middle
this
In
war,
gold
great
our
hoard of 22 billion dollars also has
served in
no
either
to check infla¬
way
here
It
abroad.
or
only important resource, that
we
have
mobilize
to
for
have so
that
l/35th of an ounce of gold has
been valued as high as 4, 5, and
purposes.
restricted its
kets
in
Far
East.
has
to
those
700%
mar¬
the
words, gold
premium from
a
dollar
the
over
and
areas
in
and
East
other
In
commanded
300
dollars
Middle
the
we
and export,
American
8
even
Indeed,
use
we
in
could make
a
profit of that magnitude by mak¬
ing payments in gold rather than
in dollars)
In
in
a
of
surplus funds.
that
the
Chungking
had
$200,000,000
of
absorbing
their
We need not fear
hands, although it would help
to win the
be
us
if the Axis would
foolish
giving
in
war
us
enough to absorb it,
important war materials
return.
There
hood of'that,
has
now
is
little
likeli¬
however, for Japan
command
of
so
many
gold mines that she is reported to
have sharply curtailed gold pro¬
duction
in
under
areas
her
con¬
trol.
II
was
that
Government
and
announced
the
Chinese
decided
our
to
Turning again to the table, it is
evident
that
countries
pean
World War
of the
many
use
$500,000,000
I
more
price inflation after the
did
Euro¬
participating
suffered
during
the
war
in
from
than
That
war.
was
true
of
Germany, Austria,
Hungary, Greece, Russia, and per¬
haps
Roumania.
Poland
is
special case, as the Republic
'a
Poland
in
into
came
existence
November, 1918, and Poland
at
with
war
Russia
until
of
was
1920.;
Other
countries, such as France,
Belgium, Finland, and Bulgaria,
experienced a two to fourfold in¬
in their price levels in the
post-war period, y
crease
It is worth
noting that countries
Germany, Austria, and Hun¬
like
gary, which experienced the most
extreme inflation after the
war,
were
among
their
the first to stabilize
currencies. They did not de¬
lay stabilization
ii^ hopes that they
Plight be able to return to pre¬
war parity of their
currency with
the dollar. It is also worth
noting
(see the last column of the table)
that
the post-war peaks
in the
price levels of most European
countries that were in the
curred
in
6
years
8
to
There
are
not
basic
oc¬
1925, and 1926—
after the Armistice.
number of reasons,
a
mentioned,
did
war
1924,
of which have
some
why
end
reason
was
already been
price
with
the
inflation
war.
that in
The
most
of
these countries
national expendi¬
continued far in excess of
tures
tax
revenues, so that the budget
deficits in part had to.be financed
in ways that continued to
expand
the money supply. In each one of
these
countries, the post-war peak
in the money
supply prior to legal
currency
stabilization
occurred
about
after
the
the
time
same
post-war
price level. For five
after
gets
peak
shortly
in
the
years or more
the Armistice of
continued
or
1918, bud¬
unbalanced
in
France, Belgium, Italy, Poland,
Greece, and Russia. Budget def¬
icits
jRcren a Girtkmas rusli
continued
because
tems could not be
tax
adjusted
so
sys¬
that
revenues
could keep
pace
with
price increases and because large
sums
were
spent for
reconstruc¬
tion
Hel p
costs, relief and pensions,
subsidies, reparations, interest and
principal on government debts,'
one wires
7
keep war-crowded
circuits
clear
use
on
Long Distance only if it is vital.
War needs tbe
BELL
wires
—even
on
TELEPHONE
liolidays.
SYSTEM
tria and
of
perhaps with the selection
exchange rate that did not
the
currency,
which
an
overvalue
rate
the
central
would
bank
en¬
force
by the purchase and sale of
exchange when necessary,
number of countries the
great deal from the experience
currency stabilization after
with
the
last
The
war.
neutral
coun¬
tries and England returned to the
parity
gold content of
their currency units—Sweden in
1924;
Switzerland, Holland and
England in 1925, Denmark in 1927,
and Norway in 1928.
Such res¬
pre-war
toration
for
or
of
deflation
drastic
meant
them.
Against the
warnings
of
financial
experts,
Swedish
wholesale
prices were
reduced 50% in one year (Sept.
1920 to Sept. 1921) through a de¬
liberate deflation policy that sub¬
jected Swedish industry and com¬
some
to
merce
a
strain.
severe
From
cur¬
new
old currencies had
even
to
Hungary control the ex¬
change rate and balance the bud¬
get
stabilizing,
while
loans
were
no
necessary for
in Germany,
stabilization
Finland,
France.
or
Experience
The world should have learned
a
and
rency
foreign
actual
Russia,
V
,;
v:
inflation
with
and
currency stabilization after World
War I clearly indicated the pre¬
requisites for successful stabiliza¬
tion:
(1)
budget
ability
or
to
balance
the
to meet budget deficits
without
increasing
the
money
supply; (2) clear-cut determina¬
tion, in advance, of the goal to be
achieved and,- if necessary, full
of
use
the
nation's
powers,
especially those of the central
bank, to achieve that goal; (3)
the selection
that
the
does
of
an
exchange rate
greatly overvalue
Failure to accom¬
not
currency.
plish these three steps largely ex¬
plains why currency stabilization
in
Europe
delayed from 5 to
was
the middle of 1924 to
1927, the ex¬
change value of the Danish krone
10 years after the Armistice.
and
get, it is not possible to stabilize
the currency.
In some cases, as
in Belgium and France in
1926,
it was necessary to
place dicta¬
torial powers in the hands of the
the
Norwegian krone almost
levels fell
nearly 50% as a result of a delib¬
erate policy of appreciating the
doubled and their price
exchange value of the krone to
pre-war parity. Although wishing
to appreciate gradually, the very
of
announcement
intention
that
led exchange speculators to' an¬
ticipate the goal, with the result
that Norway and Denmark ex¬
perienced
a
major
depression
.
during
the
period
from
1925
to
1928, when the rest of the world
was
enjoying prosperity.*
The
depression, at least - in Norway,
than the
was more severe
one
be¬
ginning in 1929. As is well known,
England's return to gold at a
price level 10% too high helped
to »depress her export industries,
increased her unemployment, and
put
pressure
serves.
I
her
on
bank
to
between
and
one-eighth of
gold content. This
pre-war
included
one-
their
group
Finland
of
the
Francqui
the
over
Government
and
M.
expenditures,
finances
in
bud¬
(M.
Poincare)
and
order
stabilization.
F,
in
Td
internal
put
preparatory to
accomplish the
Austrian and
Hungarian stabiliza¬
tions, extraordinary powers were
used, and supervision
internal
with
over
certain
matters
financial
rested
an
agent appointed by the
League of Nations. Huge expen¬
ditures for reconstruction,
repara¬
tions, relief, revolution, and coun¬
terrevolution, kept budgets un¬
balanced
in
Europe
for
many
after the Armistice.
years
Lack of
tive
currencies
fourth
head
control
order to increase
revenue, reduce
re¬
'
Another group of countries sta¬
bilized by devaluing or reducing
their
Without
an
objec¬
agreed-upon
was
responsible for failure to
accomplish stabilization in a num¬
ber
of
European
vaguely hoped
countries
to
return
to
that
pre¬
war
parity.
The result of an¬
nouncing that the country hoped
stabilize, but without revealing
returning
to
in 1925, Belgium in 1926, the approximate
exchange rate or
Italy in 1927, and France in 1928.. rates was that speculators had a
Belgium and France wisely picked field day and the central banks
to
gold
a
rate that somewhat undervalued
their
currencies, and Finland's
rate
so
closely
approximated
purchasing power parity that her
price
level
remained
constant
from
1923
to
1929.
lost exchange reserves.
For ex¬
ample, the Bank of Belgium lost
approximately $100,000,000 of ex¬
change reserves in a few months
in
Janssen's
attempt'tat stabiliza¬
Mussolini, on
the other hand, was determined,
tion late in 1925 and
against the advice of his financial
rate he wished
experts,
ently because he1 hoped for grad¬
have
to
the
exchange
value of the lira above that of the
French
franc
even
the "last drop of
change
value
quently
rose
of
if
it
blood."
the
from
required
The
lira
3.30
ex¬
conse¬
cents
in
August 1926 to 5.26 cents in De¬
cember 1927, where it was stabil¬
ized. As a result of stabilizing at
too
high a value for the lira,
Italy's exports contracted and the
Italian
price
level
fell
off
30%
from
M.
ual
Janssen
appreciation
currency tends
its
internal
other
countries
like
Ger¬
to
be
lower
than
power.
Therefore, selection of the exter¬
nal, rather than the internal, value
for stabilization tends to
stimulate
business,
In
exchange
purchasing
tress/'
;/■/•.'
the
following tem¬
stabilization.
exports
.
in
the.
appar¬
During an inflation with uncon¬
trolled exchange
markets, the ex¬
ternal
or
exchange value of a
August 1926 to September
1929, causing serious economic
disturbances
and
banking
dis¬
.
t'6f,achieve,
value of the franc
porary
early in 1926.
neve^'revealed
relative
building
ances;
up
to imports, thus
foreign exchange bal¬
tends
as
tinue to rise
also
to
internal
stimulate
prices
con¬
somewhat, thus mak¬
ing it easier to balance the budget
increasing revenues, declin¬
ing relief costs, and a lower real
debt
burden; and consequently
losses from attempts to
peg ex¬
change rates, and similar items.
December 24, 25 and 26.
Please
be doubled, tripled, and. even
quadrupled in amount to preventf
prices from falling. Although for¬
eign loans, were used to help Aus¬
bonds
buy
gold may fall into Axis
*
September it
to
by
save
metals
induced
means
to
the
in
natives
precious
be
cannot
The
accustomed
hoarding
as
failed
East.
are
is
the
war
East
1929, and Japan in 1930.)
intro¬
duced really had no reserves as
backing, but they began to appre¬
ciate rapidly in value as people
hoarded them. Indeed, experience
proved that with currency stabil¬
ity the velocity of circulation of
money fell so sharply that in a
Some of the new currencies
bined
the
yet the
paper
money •'». outstanding
in
depre¬ China. This
Summer it was re¬
ciate.
Her gold holdings did not
ported that the same technique
benefit Germany because she did
of importing gold for sale locally
not use them to halt the printing
was
being discussed as a means
of paper money and its rapid de¬
of
combatting inflation
in
the
preciation.
■
\
\ J
mania in
borrowing from the-banks. This
could only be bro¬
ken by determined action to pre¬
vent further government borrow¬
ing from the central bank, thus
restoring to that agency full con¬
trol over the money supply, com¬
helping to
way
in large
vicious circle
German mark continued to
they
dil
was at times
quantities for
repayment and it was difficult to
fund the floating debt into longterm debt. Also higher prices per¬
mitted a larger volume of business
presented
in order to pay
the total amount of currency then
case
During World War I, the gold
reserves
those
in
rise
to
1921 to redeem
in
and
ship it to
In other words,
instead
importing hundreds of tons of
*of
Indeed, the German Reichshad enough gold in January
bank
tion
.L-Avi;'
blocked balances
abroad
and
the
financing
of
budget deficits by currency issue
or bank credit, the money supply
has
already increased more in
China;
Greece,
Iceland,
Japan,
Italy, India, United States, the
Middle East, and perhaps in Great
Britain and Canada, during this
war
than
during World War I.
Undoubtedly by the end of this
war
the money supply of most
European countries will have ex¬
panded by a larger percentage
war.,
continued
tries.
currency
Largely
as,
building up of
than
creased
ing, the floating debt
States
China.
Germany inconsiderably, yet prices
and
Italy,
France,
prices in the country's currency.
With prices and interest rates ris¬
United
many, Poland, Austria,. Hungary,
and Russia, the currency depreci¬
ated to a negligible fraction of its
Indeed, a vicious circle tended
develop. Rising prices tended
to stimulate
spending and to drive
prices up further through increased
former value and, in all cases ex¬
cept Hungary, a new currency or
tends
unit was introduced to
replace the old one. Stabilization
of flight capital. (One of the
rea¬
sons for some
post-war inflations
velocity of circulation of money.
occurred
is
to
The
expectation
of
increased
prices and depreciating currency
currency
in
Austria
in
1923,
in
with
to
result
in
a
repatriation
that public debt had increased
Germany and Russia in 1924, in so much that the burden on active
Hungary in 1925, and in Poland elements in the society would
tended to ■ stimulate a
flight of in 1927. '(Bulgaria returned to have been too great at pre-war
capital and bear speculation, with gold in
1927, Greece in 1929, Ru- price levels.) Successful stabiliza¬
the result that a
tions in Austria,
drop in the ex¬
Hungary, Ger¬
change value of the currency in¬
*See. Chapter 9 in my Monetary many, Finland, Belgium, France,
creased
et cetera, were based on
import
and
export Experiments (1939).
exchange
J
Volume
W
158
-^4 J
1u
.r.
wt Li
Number 4236
appreciation
i
promptly
failed.
increase, and the .expectation of
reparations receipts may prove to
be
inflationary as it was after
World War I. Iii addition, it may
be
imports
and
so
obsessed
with
thoughts Of the unfortunate effects
political
out after the
of
panied by
low
exchange
currencies
of
values
for
the
occupied countries,
likely to repeat the
that they are
mistake of the
to
have
1920's, in striving
high an exchange
currencies, for rea¬
too
value for their
sons
of
bat
inflation
prestige
as
well as to
com¬
and
improve their
Especially is such
likely to occur if stabil¬
ization is attempted shortly after
these
the
revolutions
ends,
scarcities
while
//•;
;;
first
level
after
years
hostilities
likely to be almost
are
after
as
follow
World
War
tern.
the
cease
diverse
as
I
somewhat
a
in
movements
and
may
similar
pat¬
..•■.<
Inflation will continue in India
and
Middle
the
East
long as
large military expenditures occur
in
those
£500,000,000
in
sum
India*and
Middle
of
1943.
has
military
estimated
were
in
the
Summer
prices
—Allied
areas
expenditures
as
the
rise
in
due
largely to
Allied military expenditures and
a decline in civilian
goods for sale,
rather than to badly unbalanced
budgets, prices should cease to
rise shortly after the war. This is
all the more likely to be the case
since price controls have not been
effective
during
the
war
and
there will not, therefore, be
a
large volume of dammed-up pur¬
chasing power exerting upward
pressure
be the
the
prices
on
as
is likely to
Japan, especially if their ad¬
machinery collapses
ministrative
that price and exchange control
meeting
their
lose
Both
effective¬
countries
have
been
large percentage of
their total' war expenditures by
inflationary
financial
methods.
a
addition, they Will haye sizable
debts
external
and
reparations
with prices
and as the money supply in these
areas is not likely to be reduced
and there will be huge
years,
short¬
ages of goods, and varying degrees
of political revolution.
In Ger¬
especially, fear of the
many
etition
the
of
rep¬
previous
post-war
inflation is likely to drive up the
velocity of monetary circulation
and, thus, prices.
Post-war inflation
ans
in
be
may
in the Balk¬
marked
as
Bulgaria, Greece, and Rumania
after
the
Greece
last
This
war.
time
at
least, will experience
the evils of hyperinflation.
At
the
end .of
the war, price
rationing
in
the
United States, Great Britain, Cancontrol
and
and and Australia will have built
large
up
in
of liquid funds
reserves
the hands of the
public.
Such
100
billion
dollars
for
by the end of 1944, as¬
suming that price control is rea¬
sonably successful.
Under those
circumstances,
shall be faced
we
the
at
end
of
the
with
war
the
"transition"
though China
inflation.
The rate of price increase appears
have
to
China
has
as
a
been
since
runaway
and
period, or - of with¬
drawing those controls and ex¬
periencing a post-war rise in our
price
level
of
perhaps
200%.
Churchill
already selected the first al¬
Judging from previous
experience
and
public
opinion
polls, the controls here are likely
the end
creasing very much, and, for rea¬
sons peculiar to the Chinese econ¬
price
stable government after
and
issues
there
the
does
of
not
paper
resort
to
money,
prices
same
reasons
that
did
they
the^vil War—increase
in the goods available for sale
in the area of circulation of
of hostilities
level
will
and
the
after the
that
rise
purchasing power parity (com¬
parison of the foreign currency's
of
rate
Turkish
and
the
Australian
dollar.
the
With
1941.
In terms of their
respective
purchasing power (sopurchasing power parity),
called
the
to
rate
should
now
be
over
200
In
war
of
German-occupied coun¬
post-war rise of, 100 to
300% in official price levels is
not unlikely during the first post¬
war
years.
Black market price
a
levels
now
are
at
least
double
or
portant
there
point
is,
bound
are
ferences
in
in
however,
to
be
assurance
of
post-war "t
little
real
for
ends;
such
wartime
a
few
after
years
Failure
to
r a n s
a
period of adjust¬
tate
V
••
•**.
•
to
ir.
'T
.<
adopt*
■
j.
4.'
hew
a
•
M
official
"
■
„;
by
should
that
will
but
be
forth¬
on
a pro¬
to
those
lead
cessful
stabilization.
nection,
(
be
the
suc¬
this
In
League
for
programs
for
con¬
necessary
of
Nations'
stabiliza¬
currency
outrunning
available
a
pressure
gary
1923
and Hun¬
in 1924 offer models for the
forthcoming post-war period.
The threat of post-war inflation
contains
and
devastating potentialities
must
solutions
ence.
be
met
based
on
by
past
practical
experi¬
It is time that international
arrangements
for
assisting
coun¬
tries to combat post-war inflation
be
considered
and
ences
other countries in the
1920's,
much
our
can
adopted.
The
ill afford to repeat the
of the
inflationary
experi¬
1920's, which bear so
responsibility
for
income
supply
the
with
prices."
on
of
resultant
some
recent troubles.
of
"We
have
where
upward
The
letter
the
there
stage
reached
is
a
between
race
and prices, and unless this
is checked it may form a vicious
wages
circle that will defy control. Since
the fuel for inflation stems from
the huge deficits created
by
tremendous
most
the
war
effective
on
ditures.
forces
all
the
curbing
of
force
is
Twenty million people
banded together
Obviously
be
materials
controls
the
to
armed
our
furnished
equipment
military demands dictate, but
that
war
running
about
ten
times as high as
during the First
World War, there is a
large mar-,
gin for savings. It is estimated
that
reduction of 10% in the
a
World
War.
Such a saving over
period would in .the long
relieve the taxpayers of an
equivalent burden. While as large
the
war
run
a
proportion as possible of the
Federal deficit should be financed
by
taxes,
have
practically
ceiling on taxation
large percentage of
population is concerned. This
reached
far
as
our
we
the
as
a
applies
particularly
fixed
a
to
persons
income
and
those
whose incomes have not
kept pace
with the rise in
living costs. The
of unnecesary tax bur¬
dens not only threatens the ruin
piling
up
of the middle class in this
country^
but tends to
destroy the incentive
taking on the part of those
of risk
who
have
money
to
invest,
without
risk taking private
terprise cannot survive. So as
approach
the
peak
in
our
production, It is timely to
inize
of
require
a
parable
our
harm
to
the
Army
are
for mutual
Prudential.
i.O
,
!
wartime
of
considerable
uniformity
monetary and price policy
all member countries.
ognized
in
This is
provisions
for
•
in
rec¬
the
abandonment of
except in the
fers
Fund
in
and
or
exchange control
of capital trans¬
provisions for the
case
Union to exert influence
plans
contain
no
statement of the
mon¬
scrut¬
foundation
society and economy.
fairly
world, relatively free from
controls, and would also
we
war
itary purposes, and to be mindful
that needless waste
may do irre¬
Wouldn't you like to join them1
.11
en¬
carefully^ the colossal amount
appropriated for mil¬
monetary mechanisms.
would
and
money
the Keynes and
White plans for new international
schemes
war
program would be about -35 bil¬
lion dollars, an amount in excess
of the total cost to us of the First
on
Neverthe¬
less it should be pointed out that
successful
operation
of
such
ex¬
penditures
mon¬
This is not the place for Exten¬
with
and
combat
inflation partly explains the
sive comment
in The
cut
expen¬
protection through life in¬
surance
to
unnecessary
should
the
the
spending,
means
inflationary
down
of
nother Great
is
goods
continued:
with
tion in Austria in
•;
rate
needed;
agency,
to
Italy,
a
be
only
appear
England,
following the adoption of
will
is
"Consumer
that
maintain
or control over national
financial
Berlin may prove of,1 and economic
policies.
The Keynes and White
value, the velocity ofj
only after the
i t i o n" period.
ment, many countries would hesi¬
dif¬
in
monetary circulation is likely to
ex¬
success
Prior to such
economic,
and ■ mon-.
budgetary,
war
require
countries
and
help
gram
'
commercial
outside
conditions within the country that
in
change-control policies, exchange
can be readjusted with some
by
coming after agreement
our
significant
-country
cases,
international
some
such
economic
and with
but
preferably under the auspices of
some¬
changes
help
"Inflation
and
that
wide
national
trols
and the elimination of
occupation
help to reduce budget
deficits.
Nevertheless, the large
costs
for
reconstruction, relief,
repatriation, restoration of indus¬
try, et cetera, will undoubtedly
keep budgets unbalanced for a
few years after the war ends. The
clearing balances credited to these |
are
rates
etary policies in various countries
stable
will
financial
too
many
be
scheme,
attacked
In
Letter,
30, states that'
growing menace"
the fact remains that with
cannot
the above "guesses" could, at best,
be only roughly correct. The im¬
triple official price levels. After
the war the relative scarcity of
goods
will ..gradually
disappear
costs
times
to obtain'her pre-war volume
imports)
shifts
\VvVv/v;*
iv
the
tries,
high,
global
a
be
country.
posi¬
tion of countries during and
right
aftef the war (for example, the
loss of her large net foreign in¬
etary chaos after World War I.
1 U. S. dollar.
£
marked
international
continue price and exchange con¬
internal
too
what undervalued in terms of
Prediction of future price levels
is
a
hazardous occupation,
and
which
since
4
over
must
Chinese
high, the Indian rupee over two
times too high, and the British
£ perhaps 10% too
high. On the
other hand, the Canadian dollar
during the first post-war years.
Many countries will and should
been maintained
times
by
England
"transition" period.
rate of 20
Chinese dollars to 1 U. S. dollar,
has
£
ex¬
the
inflation
New
to
the
exchange
35
solved
war-time
;
Post-war
that
official
the
values
about
with
power
dollar),
our
change
dollar
buying
of
controls.
of
internal
maintenance
its
during "the
financial,
official
the
to
in terms
in
under date of Nov.
our
,
relative
It will, of course, be
necessary after the war to adjust
currency.
now
for mon¬
between Britain
program
internal
policies, particularly with regard
completely revised
Even
of
immediate post-war years in view
of probable differences in
problem.
war.
■
tried.
and this country would encounter
a
number of difficulties in the
Furthermore, exchange parities
will have to be
issue
be
The First National Bank of Bos¬
ton
after
soon
so
the British price level
the
new
should, begin to decline for
here after
and
uncertain terms that Britain
to be withdrawn rather
a
or
and
no
Minister
etary circulation has not been in¬
war
meet the
of
along
Professor
could
stability
experienced
Prime
great as in 1940 or 1941. This
indicates that the velocity of mon¬
has
in¬
or
joint
a
etary
other British officials have stated
ternative.
and spending habits, is not
likely to increase much.' If China
2%
investigation
without
Even
all
in
has
omy
to
been
areas
countries
Affairs
world
year
half
loans
member countries at 1
terest
Foreign
unfortunate
Free
probably been less than
automatic
have
suggested by
in
the
July
Williams
infla¬
combat
stability
'international
important
leading
lines
exchange rate for fear of suffer¬
in
as
the
mechanism that pro¬
a
for
to
national
In
world.
ing the adverse economic effects
this
declining
1940
tion, and
vides
be
surplus purchasing power, in the vestment
and the relative decline
form of cash, checking
accounts,( in her shipping position will re¬
Government bonds, liquidation of
quire that England export per¬
credit, et cetera, has been esti¬
haps 50% more than before the
ing
looks
will
war
the
political
in
between
above, the big prob¬
right after
was
least until the end of the post-war
it
the
the
it
as
maintaining war-time controls, at
would avoid
period,
lem in most countries
reconstruction costs, severe
be adjusted to take account of the
less
As indicated
when
and
and
proposed
after the
the meantime, ar¬
rangements
for
monetary
co¬
operation and exchange stability
real threat.
a
ends,
the
world-wide deflation could
again be considered
seem
American
have
three years
established
the
war
decline in their internal purchas¬
In China, price control has been
completely ineffective. Neverthe¬
after
n"
their
it would
prerequisite
for
monetary
stability
specific approval is not well suited
choice of keeping prices down by
relative to the pound
sterling and the dollar.
-t
o
war
the
as
or
economic
more
to
after the war, the exchange value
of these currencies will have to
power
or
be
burdens to meet in the early post¬
at
up
when
time
i t i
overvalue
Treasuries
until two
infla¬
an
and
S.
gone
with
some
so
mechanism
British
introduc¬
r a n s
the U.
have
wages
The
scheme
appropriate
mated
As
increased.
a
post-war "t
post-war
years.
greatly
of
money
would
reserves
tion
severe
in this country during
case
early
international
currency
tionary bias would be much
like
a
East, by the
As
been
at
of
ume
issues as was
European coun¬
to
For these
reasons,
plans, and especially
under the Keynes plan, the vol¬
break
may
proved
preferable to delay the introduc¬
tion of any such world
monetary
both
post-war inflation is
likely to occur in both Germany
A
In
JII
Price
under
2323
currencies.
required tb conform.
simply provide a mechan¬
ism—a mechanism, however, that
is inflationary in character since
of
tries after World War I.
ness.
war
some
that
be
They
gov¬
is over, accom¬
war
some
completely
the
would
currency
in
case
an
still exist.
in
etary and price policy (the objec¬
tives) to which member countries
certain cases,
In
countries.
terms of trade.
error
stable
restored
is
ernment
this
so
before
time
some
war, most countries
anxious to obtain cheap
After
will be
i
THE COMMERCIAL & FINANCIAL CHRONICLE
stabilization, not exchange appre¬
ciation, The Hungarian attempt in
1921 to stabilize by
aiming at ex¬
change
'W» iMtfc
'%
Insurant? ^ (Enntpang
nf Autrrtra
Home Office, NEWARK, N. J,
2324
THE COMMERCIAL & FINANCIAL CHRONICLE
contingent to
Employees Profit-Sharing
plan to
thfe- corporation's
by
treated
are
degree determined
a
\
highest tax
a
as
deductible
ration
besides
the
provision
for
;
be spread
period of years
thereafter or made in full) and
makes provision for a Trust Com¬
'
.
mittee
over
to
exercise
investments
over
details
of
its
discretion
and
is
the
corporation's income and
ex¬
personnel
cess
profits taxes. The limitation
is J.5%
of the total annual
(Continued from page 2321)
.;
tricity. Electricity was only a de¬
be
may
structive
used as generous "notice" or "lay¬
off" pay. In post-war years a par¬
tial payment could be used as an
other
appointed
the
by
cuts in
to
ness
its
greatest
heeded
A Trust
It
not
is
this
in
new
field.
set
of
sciousness
tions
increasing ' con¬
of
labor
problems,
investment
the
man
able
tax
treatment
to
favor¬
discretion¬
for
the
exclusive
benefit
and. employees
of
until
he
ex¬
his
receives
retirement
when it seems reasonable to exon
his tax rate will, be
substantially less than at present.
On the corpus he pays, the longterm capital gains rate in effect
that
pect
that
at
trusts created by corporations
ecutives
taxed
not
time.
Because
in such
a
<;;•/; V.k
kvkkk
participant's interest
a
trust is "deferred"
com¬
trusts pensation,, these trusts do not vio¬
whose funds are sto be? invested late present salary and wage sta¬
and reinvested in securities. And,
bilization^ regulations, provided
as will be noted from the descrip¬
;hat disbursements are prohibited
tion
which
or
follows, in cost, in
the duration of such regulaflexibility, in simplicity and in ;ions except in case of disability,
breadth
of
ployees
Profit-Sharing
usefulness
—
such
Em¬
leath
or
and
sel
sion Plans
regulations,
already established.
How
They Are Established
A detailed
Board of
/.'* Their Tax Advantages
the
with
and
coun¬
Act
adopted
by
and
the
Directors, sets the stand¬
ards determining which employees
A corporation's contributions to
an
plan, drawn by
familiar
Employees Profit-Sharing and
re
eligible,
interest
is
when
to
be
a
the
with the
proper
Agreements
Bureau
of
In¬
approval and
and salary
wage
stabilization authorities. Decisions
embodied
in these documents
are
participant's
changed from
a
contingent interest
interest
Certain
It
ky-v
to year.
be
pleted before the end of
ration's
fiscal
in
com¬
corpo¬
a
order
to
advantages with
re¬
year
obtain the tax
trusts
structive
of
lem,
Bona
Be
Fide
Each
trust is subject to indivi¬
scrutiny by the Internal Rev¬
Department.
However, the
law itself makes plain the mini¬
mum requirements
which, if ful¬
filled, will make a plan bona fide
.
dual
and
non-discriminatory in char¬
acter.
(A
plan
based
on
uni¬
a
form
15%
full-time
years'
employees
service
included
with
less
or
must
participants,
as
and
.he broadest possible inclusion of
full-time
employees V is
recom¬
mended.
The
a
number
of partici¬
consideration for the
benefits
are
How They
'k
The
income
made
irrevocable.
tion's
cated
and
They cannot
Employees
it
also contribute
tax advantage. For
many reasons it is recommended
that
may
their
contributions
Each
that is each
SALVATION
ARMY
employee
the
kkkk
WAY
is
year,
in the appropriation made for that
for
is
is
(unless
rules
YOUR
through
SALVATION
Trust
tb
the
or
non-for¬
a
ARMY
the
trust
ing his pro-rata share
(includ¬
of
all
in¬
and
profits accrued to that
is disbursed to him in one
of several ways as determined
by
Committee.
If he dies it is
the
paid to
his
estate
or
ficiary that he has
FRONT
Since
wide
the
Trust
discretion,
to
a
bene¬
designated.
Committe
the
It
a
No
higher over¬
inclusion
of
fine
their
selection
sional
trust
has
has
many possibilities of usefulness to
both the employee and the
corpo¬
responsibility
of
have
our
If
to
need
no
to
fear.
f^ar depression or
We-ca|i $8# the future
confidence.
than
individually
to
And
at¬
tempt the selection of securities;
of mutual fund
seems
ideally suited to this re¬
quirement—a combination of high-
Governments, "business
men's" bonds and preferred, and
or
well-diversified
•
of record
The
a
stocks.
keeping and their
favor the mutual
liquidity
as
common
vehicle.
writer
-,
with,
has
fields
of
the
served
by
one
banking
trusts
be
are
no
most
the
industry.
here
questioned
set
by
must
we
we
do.
w
Spence Heads House Group
Representative ! Bert
Spence
(Dem.,, Ky.) has succeeded the
Representative
Henry
B.
Steagall (Dem., Ala.) as Chairman
late
of
the
House Banking and Cur¬
Committee in view of his
position as ranking majority mem¬
ber of the group. Mr. Spence has
rency
been
a
1931
and
doubt
member of the House since
member of the Bank¬
a
to
by
but
ten
years.
and
be¬
impotrant
investment
That
these
will not
anyone
who
stay
thought, bydabor and by manage¬
ment.
And their appeal to cor¬
poration management is so strong
that
The tax rewards for
establishment, deliberately
by the Congress, are favored
all
divisions
of
political
we
found
and
that
our
90%
associates
of
the
have
corpora¬
tions approached have accepted it.
opment and the character of their
their
That
new
That
ing and Currency Committee for
studies the record of their devel¬
sponsorship.
do.
brave
.;a
world.
a
can
.f
that Employees Profit-Sharing
Retirement Trusts will rapidly
come
better
a
the
The balanced type
grades
the -way
can
investment
rather
we
to
reason
with
experienced prpfesmanagement
an
opportunity does not knock
inflation.
a
as
is
accomplishment.
often—we
of
period
of
*
is
advantage of this opportunity
—and
the
where
an
as
fund
date)
EVERY
years, they prefer
all rate—and the
high
in
fund
a
important part over a
Ease
interest
In
take
compounding of income plays an
succeeding year).
come
ON
vestments.
His vested interest is his under
his
THE
usually disposed to favor
"institutional" or "legal" type in¬
any circumstances,
\yhen a par¬
ticipant reaches the stipulated re¬
tirement age (usually 60 or
65)
CHRISTMAS
of life
way
before.
to
his. interest, reverts
feitable in each
selling
have
world,
stated period
years, a specified percentage
his interest becomes non-for¬
of
SHARE
our
never
cor-;1
now
lead
otherwise) if he
(or, after
use
we
us
ultimate post-war certainty.
There is a general desire to con¬
participants. After a stated
period of years, however, his in¬
feitable
to
experience of the writ¬
before
trend which most of them foresee
other
of
The opportunity
not
are
the.
was
opportunity to sell,- sell and sell.
interest
the
corporation's employ
voluntarily during that period or
is discharged for .cause.
In such
terest becomes vested
idle
pmca,™5
leaves
event
opportunity in the thirties
busier, happier
the
ca¬
The
now.
years,'and
period of
forfeited
Committee
pacity.
con¬
sold to
or
good proportion of equities as a
protection against the inflationary
contingent
a
stated
a
capacity
Not even
record
year, based on the relation his
total compensation bears to that
of all the then
participants. This
interest
to
opportunity far greater than
interest
or
been
indica¬
porations to establish Profit-Shar¬
under
that
has
an
ing Trusts that Trust Committees
plan,
eligible
set. for
designated share
a
the
what
> :•
officer, executive and
who
standards
has
in.
of
be
not
kkvkk:
participant
cour-
kkkkkk; k/ k-k'kk
record
sumed
.''>-■kk ;'k:k "k,
er's organization in assisting
above
history, produced to capacity,
providing a stated dollar
amount, and an interest in equities
that presumably will protect his
purchasing power in case of 'in¬
It is the
And
future.
ance
flation.
sur¬
do in the
We will have the oppor¬
tunity, such as never existed be¬
fore.
We have never, in all our
Profit-Sharing Trust is an
companion for it. The tax
advantages are added, not alterna¬
tive. And the participant in both
has the equivalent of what every
prudent man - strives for—insur¬
ideal
no
accepted., ?*•
THE
re¬
-
accomplished is only
tion of. what we can
ex¬
the
to
must have faith and
The
less-expensive; second,
af¬
If
We must be ingenious
adventuresome.
we
the
•
to thrive in the days to
must be realistic and
we
age.
ist the
by the
in each
v-
but derive
all
can
•
complacent.
way of life is
aggressive.
and
when
America
be
and
come
corpora¬
pensions plans
of
to
vive
point of view, less compli¬
Once made they
ticipants.
the
from
suc¬
k;kk -•'•'!k;\kk'k kv
American
They
need not fear the competition of
the Pension Plan, first, because
che
Profit-Sharing Trust is far
large
corporation are optional
year—they are truly of a profitsharing type. In poor years none
v.
ford
quarter.
every
will
we
day has passed
business
in
flexible
Operate
contributions
The
good year, and reinvestment
every
of
invest
world
in
the effort.
For there will
more
Jk.k-kkk:
v.;:,
better
bringing progress and
prosperity, with opportunity and
security, to America of the future.
Certainly the prospects are worth
dealers, surveying
possibilities of this extraordi¬
large and new field of activ.ty, are especially pleased with the
repeating nature of the demand
appropriation to
in the fu¬
and will provide a way of
freedom and
opportunity to enter
Field
to
applicable
inspire confidence
ture,
Investment
an
it explored. If
concentrating con¬
thinking on the, prob¬
see
in
that out of various ideas
with a program that
so
will
the
oe
more
emerge
the
Investment
for their services.
all
vert to the corporation under
any
circumstances but only to the par¬
share
we
ceed
of
are
we
com¬
comfortable future.
A New
like to
it succeeds
pensation—o r e v e n " 5%—with
quarterly reinvestment of income,
appears to him as about the only
practicable method of assuring a
percentage of total compen¬
paid to each participant is
not discriminatory.) At least 56%
sation
need be made.
if
total
the
would
for
nary
r
us
tax
difficult
of his annual
because where
of
personal
certainly
plan I have just outlined
roughest of suggestions. I
make
ones,
happier for all
The
is
him to build, up any personal fund
for retirement. The accumulation
small corporations as well as
will be
can
people. And
satisfying. ;.
rates
.ax
i
ment, might have turned the trick.
the long run, it would have
been far cheaper for the.Ameri¬
In
time up to the required time
of filing income tax returns, '
Must
ex¬
new
markets, expanding facilities,
modernizing plants and equip¬
His
They
stimulate
have
those who spent a per¬
centage of their income in tapping
X
very
ven¬
speedily
way to jobs and pay¬
tax, providing! conces¬
A
him.
it
to
had adopted
for
spect to that year's earnings. But
riling of the plan can be done at
any
we
might
we
the
rolls.
sions
To the higher-paid executive a
Profit-Sharing
and
Retirement
Trust has a powerful appeal.
So¬
cial Security is of little help to
present
fraid
were
expand,
pansion
the establishment
now.
we
incentive to
found
Appeals to Executives
.
should
steps
such
tax
a
holders may well be saving them¬
selves very. considerable amounts
in the future by
year
businessmen
ture and
has, in effect, been con¬
by Government, share¬
of
irrevocable, they can
amended at any time and the
standards set can be changed from
pants is not
mas
might have
If,-instead of
steadily increasing taxes, so that
willingly. And since, in
this period of high corporation tax
rates such a large part of this
tributed
plans
suffered mUch less.
sacrificed
Dy no means
oe
AGAIN
The
be
rive
SERVING
with
Revenue for
enue
retirement.
Re¬
tirement Trusts have many ad¬
vantages over Pension Plans and
are desirable companions to Pen¬
filed
ternal
V,
1 share—presumably
For the framers
1942, real¬
izing that in many cases Pension
Plans were not practicable, ex¬
ary
The Plan and Trust
are
bad.
of those who had tax
some
incentive
built up is far too valuable to be
ex¬
an
proceed¬
tax-free, both
as to income and realized profits.
The participant, or beneficiary, is
of the Revenue Act of
same
considered
renegotiation
and
a
bank, trust com¬
individual, under the
or
direction of the Trust Committee.
(Such contribu¬
The trust itself is
is to have his day,
tended in that Act the
the trust with
pany
em¬
ings.) kkk\;'V'
is
corporations have adopted them.
now
in
and
centive it provides for executives
Agreement provides for and employees to stay with- the
custodianship of all the assets of corporation throughout good years
participants,
executives
also
are
pense
enough to set any alert manage¬
ment at least to investigating the
Pension Plan's possibilities. Many
But
of all
ployees included.
treatment—high-lighted by the
excess
profits taxes—against a
fax
background
of all
compensation
that is
This favorable
officer.
Benjamin
If, in the late depression, we
had been realistic about taxes and
useful¬
corporation is in the in¬
a
until
Lightning
still does damage but we have
made electricity - work for man¬
kind in many beneficial ways.
bad year, etc., etc.
a
Obviously,
force
Franklin flew his kite.
offset to necessary wage and sal¬
ary
Board and often includes the chief
surprising that in the
subsequent years—and today—the
insurance industry has done well
Payment
Trust
the
bracket.
paid out.
This
computing
before
be
can
over
operation.
Committee
business expense,
a
>
When Peace Comes ;
interest, the retirement age, retirement.On death or in case
the method of disbursing interests of
disability the. entire' interest,
attretirement-(the payment may even if contingent at the time;
come and excess profits taxes.
In Retirement Trust which is bonaetfect, therefore, Government con¬ fide and non-discriminatory as de¬
tributes
to
the
maintenance
of fined in the Revenue Act of 1942,
the
or
vested
And Retirement Trust;
(Continued from page 2310)
non-forfeitable
a
Thursday, December 9, 1943
FDITOR'S
NOTE—The
of Pension Trust
an
article
in
the
the "Chronicle"
•
Plans
b" Peter
-
oensjon
leased."
1
Trust
legal
were
July 29,
aspects
discussed in
1943,
issue
of
Guy Evans, enRegulations Re¬
4
.Volume 158
iNumber 4236
U. S.
THE COMMERCIAL & FINANCIAL
CHRONICLE
2825
Savings and Loan League War Conference
51st Annual
Meeting Studies Post-War Housing Problems
.'V'U
United States Savings and Loan
League Elects Private Enterprise At
Crossroads,
John F. Scott President At Annual Meeting
Ralph H. Cake Tells leape
John F. Scott, St. Paul, Minnesota, was elected President of the4States Savings and Loan League at its 51st annual
meeting tional
war
conference at the Palmer House in Chicago,
succeeding
.United
and
Savings
tion, Chicago.
Ralph H. Cake of Equitable Savings Loan Association of Portland,
Mr. Scott is President of the Minnesota Federal
Savings and
Association, which has assets of $20,500,000.
Ore.
Loan
Fed-^
Founder of the Minnesota
eral in 1922 he has been its
aging
has
executive
been
Tax
Relief
home
city
member
tee
in \the
He
Organization
in
his
and
was
recently a
advisory commit¬
construction industry
Chamber
of
by the
appointed
Commerce of the United States.
Elevated
the
to
First
were
of the
Citizens
of the
the
on
since.
ever
active
men
elected
tion, Eureka, Kansas.
Kentucky: Thomas A. Barker,
Avery
Building Association,
session
Arizona: J. G. Rice, First Fed¬
eral Savings & Loan Association,
City Buliding and Loan Associa¬
tion, and Second Vice-President
the
National
Organization for
the past year.
...
The
George
is
Colorado: Malcolm Collier, First
Federal Savings & Loan Associa¬
:
,
Connecticut: Frederick T. Back-
strom, First Federal Savings &
Loan Association, New Haven.
Baltimore Federal
District of Columbia: Wilfred H.
Savings and
Loan Association, the largest in Blanz, American
Building Asso¬
Maryland.
ciation, Washington.
-H. F. Cellarius, Cincinnati, O.^
Florida: C, L. Clements, Chase
was
elected
Federal Savings & Loan Associa¬
Secretary
of
the
League for his 48th term.
tion, Miami Beach.
Morton
Bodfish
Executive
United
Vice-President
of
as
the
Savings and Loan
League.
,
Executive
the
continues
Vice-President
States
of
Vice-
President
W.
Illinois: Edward J.
President
i!„ 0nVfi'rmg President of the United States
told
League
t h
e
<$>-
*
of
the
League's
Fifty-first an¬
nual
meeting
INSTITUTIONAL
and War Con¬
ference.
Johnson,
"Everybody
Cumberland Savings & Loan As¬
sociation, Portland.
:
; ;
Maryland: James H.Jones,Loy¬
public hous¬
•
Federal
Savings & Loan As¬
V
sociation, Baltimore.
Massachusetts:
Warren'
Oliver,
Newton
Bank, Newtonville.
Michigan: Joseph
Surety
Savings &
tion, Detroit.
Minnesota:
W.
Co-operative
knows
ing
1
Standart,
Loan Associa¬
R.
Dahlen,
First Federal Savings & Loan As¬
not
the
m,"
Czekala, Na¬
Association,
"Wouldn't
we
able
whole
First Federal
to
think
the
SAVINGS & LOAN ASS'N
prob-
em
through
more
clearly
and to
a
American
basically
we
of
Ralph H. Cake
more
solution
if
decided to give rent relief to
those' who
need
relief
funds
DURHAM, N. C.
could
Vice-
President
Secretary
to
We
keep the title to the homes,
the
27,000,000
or
AN INSTITUTION
residential
so
structures in America in the
WITH CONSERVATIVE
name
MANAGEMENT
I
-"1
to
,/
keep them decently housed?
2nd
President
St.-Louis.
by
<
Mr.
Cake declared.
1
Stanton
will
u
FUNDS INVITED
that
clear
s
be
G.
Port-
Savings and Loan
opening
•
Vice-
1st
Sumner
Georgia: J. W. Battle, Decatur sociation, Thief River Falls.
Missouri:
George S. Metcalfe,
Building & Loan Association, De¬
catur.
Roosevelt Federal Savings & Loan
y,"
v.::
■
A.
? lo™ ineome group's need," Ralph H. Cake,
.•
Eureka
Federal
Maine:
Henry P. Irr, of Baltimore, Md.,
Executive
McCue,
L. Wedge
worth,
Savings & Loan
Association, Shreveport.
ola
tion, Denver.
J.
Louisville.
Home
M. "Eason
tion, Los Angeles.
Second Vice-President
new
F.
Louisiana:
.
Presidency was W. M. Brook, (elected but
resigned), Standard
Dayton, O., President of the Gem Federal Savings & Loan Associa¬
of
Government has never built a
comparable dwelling any
more
cheaply than private enterprise and that
private ownership and
private building will
get the short end in any program which pro¬
fesses to give them a
free hand only up to the
point where they
r
Kansas:
California:
"The
Federal Savings & Loan Associa¬
,
Vice-
Edward W. Springer,
Savings & Loan Associa¬
tion, Indianapolis.
T.
Bostick,
Guaranty Savings & Loan Asso¬
ciation, Birmingham.
•.
Emergency.
Indiana:
the meeting
at
James
Phoenix,
Declares Government Controls Must
Inevitably Paralyze
Initiative If They Remain After The
Associa¬
Atkins
League:
Alabama:
Loan
Iowa:
E.
M.
Klapka,
Home
Building & Loan Association, Fort
Dodge.
The following national council-
man¬
&
of
the
citizens.
(Continued
would
We
be
2332)
on page
u
Franklin
v
SAVINGS
Federal
LOAN.
AND
ASSOCIATION
ra
53
of Richmond
Assets
over
$4,500,000.00
*
We
Invite
Your
Investment
Morton Bodfish
M.
W.
Brock
John
F.
Scott
Henry P.
H.
Irr
F.
Cellarius
Of
V
17
RICHMOND
*i
Inquiry On.
i
Funds
Trust
,
.
.
VIRGINIA
ob'
Anderson Sleeted Secy.
Growth of the
By Hennepin Federal
MINNEAPOLIS, MINN.—Oliver
W. Anderson has been elected
ex¬
ecutive secretary of the
Federal
Hennepin
and Loan Asso¬
Savings
ciation succeeding Louis H. Kelly,
managing officer
of the associa¬
resigned to
vice-presidency [ with
Federal
Savings
&
since
tion
accept
who
1916
a
Minnesota
Association.
Loan
Mr.
For
52nd
53rd
56th
more
several
in
the Twin
than' 25
years.
he was associ¬
Minneapolis mort¬
gage
division of the, Equitable
Life Assurance
Society of New
York, later becoming local loan
correspondent for Union Central
Life Insurance Company. For the
past 13 years he has operated his
own
mortgage loan, real estate
with
years
the
and property management agency.
He also
resigned as resident man¬
of the Metropolitan Life
Building when he accepted his
"" *
a
,
57th
58th
59th
60th
,
a
i
8,447,613.08
1931
;
office
eral.
Prior
with
to
(Continued
Hennepin Fed¬
coming to Min-
on page
2331)
Statement of Condition
26,749,387.08
1932
1933
ASSETS
32,046,298.20
35,989,219.58
39,834,747.90
Outstanding Loans
1936
43,399,131.66
Accrued
1937
46,784,020.67
United
1938
48,413,076.24
1939
50,253,515.75
1934
ii
tt
a
1935
/.
"
it
a
a
ii
1940
1941
September 30,1943
30,596,813.40
"
"
^ 51,792,313.18
Insurance
Interest
States
Federal
Cash
Home
on
Office
-
___
Loan
and
Building,
1942
3,865.37
54,718.13
—
Bank
on
Bonds
,!!
60,093,956.07
Deposit---
Fixtures and
Equipment-—
..
in
Process——
Dividends
Other
U—
Accounts
Unpaid
Liabilities
and
——
13,700.00
25,550.02
—
3,234.89 1
—~—
Undivided
Profit
———
1,370,567.33
-
$12,111,993.30
CARL
WASHINGTON, D. C.
59,996.55
$10,698,941.06
..
Building Association
Largest"
-
LIABILITIES
Share
Reserves
"America's
100,000.00
499,202.89
—-——
$12,111,993.30
Loans
PERPETUAL
1,300,000.00
-
—
Stock—_
fUK56,734,244.06
1943
$10,094,210.36
Advanced-—-—
Government
Hand
——~——
,—-
Premiums
54,216,152.33
ager
new
Washington 4, D. C.
3,428,144.88
a
u
a
61st
62nd
•
1943
Washington Permanent Building Association
2,353,359.39
1922
a
50th
900,822.64
1912
a
55th
for
Cities
ated
31st
$27,843.28
•'
SIXTY-TWO YEARS
1881
"
1902
ti
41st
51st
"
1892
21st
active
insurance fields
and
a
a
mortgage loan, real estate
in the
been,
1882 Resources
year
54th
has
Anderson
1st
11th
Perpetual
J.
BERGMANN
HERMANN H.
BERGMANN
Vice-President
President
URBAN
M.
DONNELLY, Treasurer
JULIUS
A.
jVIAEDEL
Secretary
f
2326
THE COMMERCIAL & FINANCIAL CHRONICLE
John H. Fahey Warns Of Unsound
Boom In leal Estate Prices
Federal Home Loan Bank Head Agrees That Farm Land Prices Are
Being Hoisted
Just As During World War 1—Holds That Bulk Of Workers That
Migrated To
War Jobs Will Return To Former Abodes When Peace Comes And
Housing
H.
that
said
Of
Communities
Fahey, Commissioner of the Federal
an
unsound
boom
in
real
developing rapidly in the crowded
estate
war
condition
made
as
-
in
it
erty
which
Govern¬
ment
to
panic
of the
thirties.
Mr,
Fahey
been
ceilings
which fol¬
prices of
up with
nearly equal speed. Although new
privately financed war housing
estate
amortized home
are
moving
to
been
communities war workers
are
being sold existing houses
which they are almost certain to
abandon after the war, at prices
many
John H. Fahey
as
whole is the only kind of prop-
far in
excess
of real values.
While
it is true that some of these work¬
ers
will remain in the sections to
which they have migrated, let us
remember that an estimated 3,000,000
workers
have moved
from
their former homes to the
ST. PAUL
dustries,
war
in¬
migration never before
equalled in this country.
Opti¬
mistic predictions that the war¬
FEDERAL
time
a
increases
permanent
Savings and Loan
cities
Association
1922
for
recall
to
of
not
1928, but
population
these
only
every
MINNESOTA
20-year
down
years
decades.
the
great
a
the
in
to
gradually
$2,500,000
the
expectations,'
the
tend
in
little
preparedness will need¬
cost us the lives of thou¬
world
when
the
equalled
involved
were
business, was?
the
fact
that
to
pay
is
time
of a sound consideration
of future values. The situation can
easily become
real
a
must
the
debt problems
difficulties arise. In
many
credit
country for generations led
giving people a chance
acquire
their own homes
through the medium of long-time
the way in
in
mit
amortized
right
think
the
when
of
to
meet
again
League,
loans.
The
travel it is
are
is
with
the
to
sure
fact
that
for
to
us
12-year,
it will within
the
is
war
in
at
a
the
our
of
do
not
Mimieaiioli*
shocks which will
be
prepared
and
first
judge,
her
to
believe
they
the
Japan
will
growing
realization
of
open-,
of
expe¬
of
one
the
wildest
indulged and its log¬
ever
an
unprecedented
every
nation
enterprise 'in
radical
the
type
has
changes. In no busi¬
changes been more
have such
than
home
millions
not
of
otherwise
people,
crisis
it had
as
;
disclosed
been
never
which interest only was
expected
seldom a reduction of prin¬
and
As you knew, these loans
usually surmounted by sec¬
mortgages
and
sometimes
were
ond
third liens at intolerable rates for
both.
This
method
of
making
mortgage loans
was and is a posi¬
tive deterrent to home
ownership
and
an
imposition on American
citizens
who
are
entitled to
a
opportunity
to
their
own
homes.
As you
know, the Howe Owners*
Loan
Corporation, created by the
Government, was called, upon not
only
to
homes
save
closure, but to
sands
of
ruptcy.
terms
from
in
fore¬
many
thou¬
from
save
bank¬
institutions
;Congress,
of
the
in
fixing
HOLC
loans
the
went
beyond anything previously known
in this country.
It allowed bor-\
15
free
to
years
obligations
at
rate
of
5%
charges
any
placing such loans
their
repay
flat
a
from
.
mortgage
lending. Nothing is more impor¬
tant in
contemplating the work of
for
the
books.
authorized to loan up
to 80% of fair value—a valuation
which could only be estimated at
HOLC
on
was
the time, since there was
prac-,
tically no market.' The effect of
thus
extending
amortization
has
the'"period of
ce'fikinly been
hhs
the post-war
years than that mort¬
important
gage
surprising results. You will recall
lending
institutions
should
recognize the far-reaching charac¬
ter of these
changes
or
fail to
re¬
and
it
had
some
that the establishment of the Home
Owners'
Loan
Corporation was
member the incidents which influ¬
enced them.
There would have
been no
followed by the legislation which
'30s but
provisions
mortgage
is
tinue its murderous
campaign de¬
spite German surrender and the
not
most
conspicuous
be
con¬
consideration
smashup in
ness
Ger¬
There is every reason
that
an
of
come
know
from
depression, practically
complete
now
our
and
seen
not
will
^
could
mortgage
rowers
ical
it and
for the
that
satellites
accept
which
inevitable.
is
time when
developed
made
to
apparent before, the weakness of
the so-called "straight loan" on
country
and
the conflict is intensified.
As you are aware, the
assump¬
tion
of
those
who
are
best
to
to
senseless business and
financial "joy-rides" in which
any
as
equipped
a
critical examination
but
Following
one can
inevitably
a
figures
and
anticipate
we
was
rience.
unexpected collapse in Eu¬
rope, but those who are best in¬
SAVINGS AND LOAN ASSOCIATION
never
facts—facts
minded
unconditional
No
The
are
needed to assemble and
study
more
few months
foes.
There
us.
an
must
plan and replan, if
equal to the tasks ahead of
we
that the
of course, that there will
formed
to
we
who
cost
for
be
alone from
hand
It is essential
it
prevailing
enjoyed its advantages.
fairer
interests but the
own
us
important that
of
people
have
own
an
to
problems
assume
for
and
reasonable
cipal.
should
we
problems that
interests of all.
complete victory is
It is, however, dan¬
assured.
at
merely their
never¬
of recent months and
successes
stability
-
arise.
especially
associations
the
was
ownership in this country possible
exchange of
ideas with those who are
thought¬
ful/dispassionate in their
ap¬
proach, and anxious to serve not
country.
In
present-day necessary
on
neg¬
seriously and persistently of
opportunity
who represent such an important
influence in providing homes for
the
people of our
of
peace
our
arise
pleasure
with the members of this
to
again
us
irrespective
are
certain to
in the post-war
period. We
should take advantage of
every
•
defeat
error of
thinking that
everything will be all
It is imperative that
a
by
lect to plan for the readjustments
We give below Mr. Fahey's address in full:
is
com¬
again
that are necessary to our
and progress.
less."
many
blunder
same
with
returns
on this trend.
It is not
sufficient to pass resolutions about
it or to issue
warnings to the reck¬
the
the end of this ap¬
into the
us
the brakes
be
the
somehow
"Every banking and lending or¬
ganization in the country should
give earnest attention to placing
It
at
permitting over-confidence to lead
ends.
war
meet
palling tragedy. We must not
and
menace
interfere seriously with the prompt
resumption of home building when
say,
which
for
the
prevailed
panic
unsound
in
the
in
the
lending
country
from 1922 to 1929. It is true that
unwise extension of credit in other
Japan's
directions, which
responsible
for
\!as
the
so
largely
collapse of
1929, would have generated wide-
brought the Federal Housing Ad-^
ministration
The
years.
with
existence
purchase
down
a
became
country
of
payment
common
before
with
homes
of
10%
throughout
the
the
outbreak
of
Indeed
war.
private lending
carrying
an
undue
institutions
We Invite Institutional and Trust Funds
into
which
extended
the
amortized mortgage system
up to
20 years and in some cases 25
the
proportion of real estate in many
instances went
so
far
as
down payments as low
Assets Over
a
the
to
equanimity and
our
ex¬
and
of this
intelligence
our
to
of
to
preserve
mortgage field, as you know,
savings and loan associations
the
imagined would be im¬
affairs, if
longer
answer
best young men and
with a debt such as no
we
success-
obliged
to
nation's
demonstration
of
which
was
order
restore the
us
with
iv>;
Government
leaders who well
menacing signifi¬
cance of what was
developing in
Europe and in the Orient.
Our
ever
deal
■
The most significant
thing which
developed out of the aid which the
posed upon any nation.
If we
really had understood the extent
instead
culminate
RESOURCES $25,000,000
to
fully.
amortized loan
surrender of
of this institution in the Twin Cities.
our
only the Government—had
power
type among your savings and loan
that
past year is outstanding proof of the popularity
this
the
notwithstanding
the far-sighted
of
understood
—and
into
commercial,
United States would not today be
confronted with the problems
they
end
$6,000,000 during the
unprepared
a
deal
forced
over-extended
farm and mortgage credit created
a situation which the
Government
dif¬
to
have
ditions and exaggerated appraisals
temporary market
on
gerous
Loan Association in the U, S.
have
conditions
warnings
pro¬
more
itself
self-sufficiency, the people of the
now
Savings
were
will
and
of
con¬
Write for further Information:
St. Paul
We
had
the
TWIN CITY FEDERAL
with.
stitutions of all types are
making
inflated loans based
almost en¬
the
ESTABLISHED IN 1»2»
war
our
of
to
It
Exec.-Secretary
and
the
set
would
widespread
trouble.
Thb
combination of wildcat speculation
lands liber¬
is
an
The collapse of a mortgage lend¬
ing structure built upon a shaky
enemy.
from
such
flationary mortgage lending.
foundation
If, however,
longed beyond
to
can
caused
leave
serious attention should be
given
to these questions now in view of
Our remarkable growth of
peace.
help in the
States, because in many
parts of the country financial in¬
which
%
and
pro¬
we
and' would
serious
so
contributed
of the
one
the United
effectively
Federal
war
been
have
extent to the general business de¬
bacle if it had not been for
in7
our
sands of our
conditions promptly after
this war to meet and plan to deal
largest
of
not
of domestic essentials and will be
in a better position to
lessly
.
theless wise for those charged with
tlie responsibilities 'of restoring
Fourth
convert
troubles, however, would not
have
lack
type of finan¬
normal
OLSON,
ter
begin earlier to meet the shortages
few among
past
"What is needed is a
thorough¬
going overhauling of our appraisal
system by lending institutions of
limitations
A.
spread unemployment and caused
mortgage difficulties. These lat¬
time will probably
us
in the United
duction to
the
needs
of
Under such circumstances
the
encouragement
ownership
but such
period of the mortgage.
spite
Assets Over
AXEL
turned
to
industries from 70%
war
payment,
cing demands the application of
safeguards in view of the chang¬
ing nature of neighborhoods over
land and
housing boom that was encour¬
aged by unsound lending and ex¬
cessive
prices
during
many
ST. PAUL
to
are
crowded
the
a
15
mortgage, requir¬
small
a
home
decade
ha$fbeen limited to $6,000, in too tirely
the fact is that
estate
not famil¬
are
collapse
to
"It is obvious that the
pricesMn line,
a
the
urban homes
on
helped to hold
real
Those who
with
month
and
lowed that boom should read the
have
rents
from
war
record.
credit
sumer
in the last
as
increasing
iar
on con¬
real
rate
month.
placed
have
,
modernized
ing only
are
"While curbs
have
"The
over
has
same
added:
and
inviting
speculation
no
adequate checks
"Only ten days ago Secretary of
Agriculture Wickard warned that
the
prices of farm lands have
already been hoisted at about the
the
mortgage
early
States
has
campaign follows this
more
available
prices and inflationary practices in mortgage lending it is clear that we
industry cities of this nation—threatening to bring on such a somewhat different
yet been established.
step
halt
to
pattern,
be
tide
surely engulf her.
war
ficult
for
necessary
the
will
If the
the
ated
Of Population
Home Loan Bank Administration, in an address
before the War Conference of the United States Savings and Loan League in
Chicago, on Nov. 30,
are
and
Thursday, December 9,1943
that
reconstruction
Boom Brought About By Temporary Swelling
Will Collapse
John
leaders
SAFETY
$4,750,000
to
as
accept
5% and
even
less, where the credit stand¬
ing of the purchaser was unques¬
tioned.
Forty Years of Uninterrupted Dividend Payments
Such small payments were
exceptional, however, and in
many
cases
PIEDMONT FEDERAL SAVINGS & LOAN ASS'N
N.
Mitchell, Exec. V.-P. and Treas.
"In
the
Member
Heart
Federal
of
the
Home
Tobacco Belt"
Loan
Bank
United
States
AND
LOAN ASSOCIATION
OF
which have
350 Cedar Street
St.
ST.PAUL
System
Federal Savings & Loan Insurance Corp.
Member
j]
Federal Savings
WINSTON-SALEM, N. C.
Member
FIR ST
probably unnecessary.
The
changes in mortgage practice
Savings & Loan League
Paul, Minn.
ized
United
it
Surplus & Reserves $290,000.00
Resources
over
for
fact
$3,800,000
developed in the last
plainly have revolution¬
mortgage
lending
in
the
decade,
States
many
must
seems
to
and
years
be
will
to
influence
come.
recognized
This
and
it
imperative that with
(Continued on page *2329)
me
I
Volume
titles.,
streamline
Savings and Loan
Taylor, New York City
W.
Gardner
It
nor-*"
une" Forum in
New York last
velop
Dewey, at the
Trib¬
"Herald
who
friend
a
his
asked
12-
defense is a
o1d
daughter,
i n
seventh
what
grade,
the
class
was
taking up this
year. She said:
"We
i
post-
up
plan-
w a r
n
tak¬
are
ing
n
g."
Gov¬
Dewey
ernor
c o m m
ented,
"That
Taylor
W.
Gardner
makes
it unanimous."
smile
The
'■does not
that
mean
little
this
in
story
Gov. Dewey
last
have
we
the
is
so
that
building)
a
modern
Let
old
as
our
our
likeness.
attainment of
victories
of
peace
as
it
to
the
attainment
of
the
tempo
are
we
block.
Let
this
day
and
age;
our
preparedness to
handle and operate quickly and
new
all—or
proverbial peas in the pod,
all chips from the same
the
The
of the savings and loan
business and its adjustments to
the
After
perhaps better still, before all—
while we may not be as alike as
progress
that
to
damental
world.
antiquities and
PROUNIFICATION,
SIMPLIFICATION.
AND
lead
recognition of our fun¬
watchwords,
GRESSION,
US
generally
be
would
which
the ready
changing
and
bury
us
take
could
that
slogan
used—one
of
demands
the
be
still
the spirit and
inexorable
the
meet
can
we
The first step might well
adoption of a name or a
plans.
hundred odd years
attune ourselves to
the
to
cessary
they
institutions, (the
our
one
sound
of
For at
learned
of
result
bold and decisive action is as ne¬
the
encroachment,
an
LET
FOR PEACE.
PREPARE
long
WAR
OF
TIMES
IN
Our best
powerful offensive to
the
resist
WAR," runs
business
our
will recognize us when
look us in the face.
This,
PLAN."
ORIGINAL
ITS
character of
axiom. Reversing it, we must say,
higher income groups.
year-
the
agree
and
consolidate tax-free
housing
plans for
higher and
month, told of
FOR
PARE
that we should
stand up and fight any effort on
the part of the government to de¬
will
"NOTHING
CAN REST
that
recognition could be initiated by
moving toward a uniformity of
sound
operation, by having fewer and
traditions,
without
diminishing identical savings plans, definite
our
respect
for
the venerable nationally-adopted
ra'o r t g a g e
Executive, told the War Conference Meet¬
—-
—'
we
truism
a
Let us simplify, let us
the public
Without departing from our
"if the businesses and industries of
thorough job." Mr. Taylor is
Post-war Savings and Loan
Program Committee of the League. A goodly portion of Mr. Taylor's address was given over to discuss¬
ing the need for simplifying and streamlining the savings and loan business.
His speech follows in full:
o v e r
is
PROGRESSION
IN
ing of the United States Savings and Loan League in Chicago that
this country are to be run by private enterprise, we must do a big job, a
Chairman of a group of 35 savings and loan executives who compose the
G
the.
UPON
They Look Us In The Face"
nize Us When
one
another of 157 different names
or
ble heretofore.
For Peace
Confused Because 4,000 Savings & Loan Or¬
Operate Under One Or Another Of 157 Different Names Or Titles—
Simplyfying And Streamlining Business "So That Public Will Recog¬
Advocates
under
operating
alike,
or
these
with
Savings And Loan Official Sees Public
ganizations
less
obligations presents us
opportunity for expan¬
sive service to a degree not possi¬
of
In Time Of War Let Os Prepare
2327
& FINANCIAL CHRONICLE
THE COMMERCIAL
Number 4236
158
of
us
and reflect on
pause
the fact that there
thousand
of
some
are
four
institutions
our
throughout
the
country,
with
probably twelve to fifteen million
members, and' then realize that
the weight of this thrift army is
largely dissipated by the fact that
we operate under
157 banners or
titles.
If we dwell upon this for
usurping of any of the functions
soundly
under
new
conditions
victories of war. • When the last
performed by us in the vari¬
cannot result from the work of
gun is fired and our turn will
ous
phases of our business.
But
ihis committee or any other com¬
have come to pay off our debt—
an offensive of this kind will ac-1
mittee
of
the
United
States
then the
job for which we are
complish little—indeed, it may be
League. This progress will be
now preparing will be just begin¬
a boomerang—if it is made up of
stopped in its tracks unless it is
ning. We have a real and solemn
nothing but attack. The best way
backed up by the unified effort
to take care of some plan that is obligation to the young men who
of the individual managers and
have done the fighting.
We can¬
not in the public interest is to dra¬
operators all over the country.
not
push it aside. We
cannot
matize and drive home the merits
Since we must all be aware of, the
That obligation is to
of some other plan, or some existing dodge it.
necessity for post-war planning,
create work — "lives" for every
and sorely threatened practice, that
no
one individual can
afford' not
one of them.
In the meanwhile,
is in
the
public interest.
Two
to do his part.
Each of us must
we
can
do
many
things: give
bodies cannot occupy
the same
give careful consideration to the
blood
to
The
Red Cross,
put
space—if our plans are strong, if
social and economic perplexities
money and more money into War
our
plans are good, if we offer
of the post-war future and bom¬
Bonds
until our pocketbooks
real service, and this is effective¬
bard
this
committee
and
the
ache—continue to do our part in
ly publicized, there will be no
League officers with suggestions
the production of war materials,
necessity
now
will not won¬
have a larger
public acceptance or why only a
small number identify us as one
only
a
moment,
we
der why we do not
.
large unit in the field.
A
suggestion
(Continued
was
made recent-
on page
2330)
—
advocating
post-war
Throughout
his
not
was
planning.
he stressed the
talk,
unqualified neces-
room
or
for socialized,
OAK PARK FEDERAL
and criticisms.
high speed, and to give of our¬
coordinated, subsidized, alphabetical entrench¬ selves by planning and building
Right
now,
individual man¬
ments.
progressive
planning
by every
for the future progress of the na¬ agers all over the country
are
If the businesses and industries
citizen
capable of
objective
tion so that we shall fulfill 'our constantly planning for the > fu¬
thinking. "In all this picture," he of this country are to be run by
part in seeing that these men do ture, constantly projecting more
declared
emphatically, "govern¬ private enterprise, we must do a not return
to
find
themselves varied operating policies to meet
ment must also plan
its poli¬ big job, a thorough job. We must tossed into the midst of an un¬ local conditions and local needs.
cies so as to create the conditions recognize what our specific task
controllable chaos.
But as we look at our business as
under
which private enterprise, is today and we must be acutely
a whole, I think it is only fair to
increasingly
conscious
of
Because of our relation to the
spurred on by the profit motive, and
say that the complexities, the lack
will plunge into peace-time pro¬ what our obligations are to be in
construction industry, that obli¬ of
unification, the odd ramifica¬
duction with all the energy and the
post-war future.
And our gation is peculiarly ours,—sav¬ tions of some of the services we
of
the
effectiveness that it has devoted vision
post-war
future ings and loaners are obviously in rende'r the
public, make it difficult
to war.
That means government must be as broad as the nation. a key position to create quickly a
for the potential saver or borrower
must .not only plan the things it The youth of America is stand¬
demand for labor by being ready
to understand what we are and
should do, but most particularly ing up and taking it right now. to sponsor and press for the con¬
what we are doing. How many un¬
the things it should refrain from When our country at last shakes struction of new homes.
The sav¬
at
SAVINGS & LOAN
ASSOCIATION
.sity for cooperative,
,
.
.
.
I like that last
ests
the steely grip
free from
doing."
end!
no
me
phrase.
And I
If
.interests you, too.
It inter¬
am sure
we
it
consider
of war,
they will have paid their debt to
humanity and to their. f. country.
What about
TIMES
"IN
it in relation to our own business,
our
debt?
PRE-
Eidmann Discusses Progress
of
Sav'gs & Loan Post-Wai Committee
Arthur G. Erdmann of Chicago,
Vice-Chairman of the Post-War
Program Committee of the United States Savings and Loan League,
at the recently concluded war conference meeting of the League in
Chicago went more into detail on the progress of the committee's
date, stressing especially the job of developing savings
plans of financing, The uniform standard plan of
endeavors to
and loan standard
would vary according^
of home loan desired: associations are now testing out
plap^or the home purchaser this plan under several variable
financing
to the type
(1)
a
hc^£Refinancing, (2)
for
or
plan
j individual
for
home
plan
property improvement loans,
struction
loans,
(3)
a
a
con¬
,
(4)
plan
nancing plans have been outlined
and discussed with a number of
savings and loan
Erdmann
executives," Mr.
pointed out. "But we are
obtain the suggestions
■anxious to
savings and loan execu¬
tive in America and of every per¬
son in our business who has views
of his own and who can think of
of every
,-any
,
Mr.
Erdmann
for briefly
for multiple-unit financ¬
ing, and (5) the operative build¬
ers
financing plan.
"These suggested standard
fi¬
a
rates."
of
on
the
between war production
re-organized peace produc¬
tion than .is' any other business.
We
must
"ready" ourselves to
play a proper and an important
role
in
shaping the things to
come. Acceptance of the challenge
'
methods
the
facilities of this
Federal Savings Association
serving one of the nation's
most highly industrialized
are
general
housing,
and
and
and
slum
redevelopment
(6)
to
financing
.,.
$1,800,000.00
for booklet explaining
why Oak Park Federal is a most
desirable place for your savings.
Write today
104 N. Marion St. Oak
Phone Village
4,000 organizations
in the United States, all more or
there
are some
Park, III.
8790
AND
LOAN ASSOCIATION
DETROIT
profitable place for reserve funds
of
individuals, estates. .Member of
Federal Home Loan Bank and Federal Savings
and Loan Insurance Corporation. Out-of-town
inquiries are invited.
Established 1921.
GRISWOLD
AT LAFAYETTE,
DETROIT,
MICHIGAN
Over $5,000,000.00
ASSETS
OVER
$15,000,000
CITIZENS FEDERAL
Savings and Loan Association
(5)
clearance
of Cleveland
programs,
1876 East Sixth Street
prefabricated
'
Cleveland, Ohio
engineered housing.
for
improvement in our present
loans.
"In addition to the plans just
described for different types of
Assets Over
strange then that there should be
confusion in the public mind when
A safe and
Assets:
customers,
loan
Government.
corporations,
reported
services
financial
and
invited to investigate
^investment
expansion of savings
savings
an agency
3%
insured up to
of the Federal
INVESTORS
volume, (2) merchandising of the
savings and loan business, (3) ad¬
ditional investment outlets,
(4)
additional
$5,0Q0 by
accounts
Is it
many
OF
the other undertakings
including: (1)
of
com-,
plex mortgage plans work.
How
SAVINGS
TRUSTEE
areas
then
savings plan.
know how our
share
FIRST FEDERAL
Committee
the
gap
and
PEACE
OF
derstand our varied
ings and loan business is proba¬
bly in a better position to short^ja
Current Rate
All
Institutional
the hundreds of
Funds
investments placed
with
by
us
and
methods of making
there
financing,
plan
gested
for
is also a sug¬
the progressive
the
monthly pay¬
principal and interest al¬
ways the same.
It is considered
that
this adjustment of interest
downward, if started at a fair
base and continued downward to
the best possible low rate might
reduction
of interest paid by
borrower:
Home Loans
the total
many
and
beneficial
in
to both the borrower
association.
Several
substantially
ways
to
the
Trustees, Insurance
Companies, Public Bodies, etc.
★ Now Paying Our 101st
Semi-Annua!
Dividend
ment of
be
Corporate and Private
comparable associations by
★ Low-Cost
CHICAGO
FEDERAL
SAVINGS ami LOAN ASSN.
&
LOAN
ASSOCIATION
Griswold at Jefferson
211
S.
La Salle
Street
Chicago
Detroit 26, Michigan
Assets
over
$4,000,000.00
THE COMMERCIAL & FINANCIAL CHRONICLE
2328
Wm. Green Urges
Food Bodfish
Continuance
And Loan Conference
William Green,
American
Effect Uncontrolled Inflation Would
Have On Real Estate And Mortgage Values. Says
Stresses Devastating
Placing Chinese On Regular Quota B^js Not A Prel¬
Gates To Floods Of Immigrants.
ude To Opening
urged Congress
tinue
;
was
.
land,
in
before the J>—
the United! going, after
address
of
conference
war
Savings and Loan League
at the Palmer House in Chicago.
States
J
,1'You
know that if inflation be¬
and
rampant
comes
unmanage¬
to
holdings, and all other
able, the injury to real estate,
mortgage
in land are bound to be
interests
Speaking of housing needs after
war,- Senator Radcliffe
said
the
did not'
that
he
try
would
reckon
to
have
new;
few
immigrants
days
spoke
,1
ago
on
this
_;/■■' '
to
on
the floor of the Senate in favor of
would
the
Chinese
on
the
regular
quota
basis.
Our action was a fitting,
a
which
bill
well-merited
ization
and
gallant,
ful
have
The
the
as
place
of
token
real¬
our
of
appreciation
the
best
benefit
fare."'
designed
National
our
•
the
"If
dier!
sailor
or
provide him a home, es¬
furnishing homesteads as was
to soldiers returning from
certain
other
Chinese
States
Government
against
making
the
to
gangsters
^con¬
But
of that bill does not,
most assuredly, mean
that
we are
about
for
for both rich and poor,
effect will this
of
"These
prices
must
months,"
the belief that the
largely effective* he said Congress
should broaden the plan by giving
the President and the price con¬
direct authoriza¬
subsidies.
:,Up to now, he said, "Congress
has taken no affirmative, positive
trol
wel¬
agencies a
tion
success
your
three
predicted. "This the American
Expressing
which you
depend
plans
within
double
will
present subsidy program had been
of the
few
a
outlawed, food
are
people do not want and will not
stand,"
'■
* v
v.-, .:%>
V
decisions and the
your
he.
Upon the wisdom
grapple.
of your
of
only
are
have
which has never
cent
have
to
to
thing which
Treas¬
do it;"
that
e n
t
real
that
some
e r-
pay
lic
do it
given a
The
a
housing
the most tremendous agregation of capital seeking investment
in home mortgages after the war
policies and in
Government
con-
"Some of our planners have al¬
ready planned the next depression
immediately
place
after
the war, but
I can't see how it can
happen unless a hobbling-ring is
private enterprise." *
on
.
Mr. Bodfish said,
however, that
he felt the general policy of Gov¬
ernment is changing with regard
to;; business : and ;. enterprise and
that the opportunity will be given
to
progressive business men to
show what they can do.
that
the
ever
of
trols.
put
to
employment has
direct bearing on pub¬
be
Bodfish
Morton
ity in the tax
take
determination
programs.
Mr. Bodfish said that there will
real opportun¬
relaxation
not
but
universal
therefore
can
is
deteriorates
people do not have in¬
housing.
have
makes slums
estate
sufficient to pay for decent
comes
"Actual¬
vate-
to
to do
undergo changes. . As to public
housing, let us remember that the
we
if it is
able
job, if
a
fish.
been
Then the whole sphere
of the need for public relief will
the
ury
before.
so
will
work
prise
months and treble in six
have upon values
questions with
many;
is
to
man
.
Green
"If subsidies
what
big existing houses?;
who
willing
A whole group will
be able to buy or rent small homes
ly I think pri¬
—through avoidance of price in¬
creases—at $2,373,000,000.
our
saved before.
every
said Mr. Bod¬
placed ' the cost of
subsidies this year at $925,000,000
and estimated consumer savings
returning sol¬
diers?
The
servant
problem
makes smallness of houses essen¬
tial
eco¬
theory,
that
in
Mr.
How much of that land would be
available
quer and enslave the world.
United
owns
or
tion. A whole group of people will
be able to save who have never
it takes every
ton advices said:
land in the country.
oh the
20%
The
wars.
,.
party
nomic
"
-
f
o
Regarding Mr. Green's testi¬
Associated Press Washing¬
if there is a war bride?
have no
adequate facilities
done
,, .
B.
mony,
pecially
for
program.*'
subsidy
of
regardless
is
which social, business Governmental America
agreect,
Dec. 1 in (defense of food subsidies.
facilities, will it also be
We
elimination
the
has
dustrial Organizations, also testi¬
fied
before
the ! Committee
on
sol¬
asked to
of
by Morton Bodfish, Chicago, executive vice-president of the United
States Savings and Loan League, speaking, before the war conference
of the League at the Palmer House in Chicago.
1
' .
Carey,
SecretaryTreasurer of the Congress of In¬
job and some edu¬
a
result
the present
Govern¬
cational
success¬
passage
tain
wel¬
returning
a
the
international
to
against the entire
program.
price stability will be the cer¬
James
States
United
furnishes
on
Universal employment in the United States after the war with
private enterprise doing 95% of the job of employing was envisioned
"One thing upon
seeking in¬
The stam¬
to break price control.
and utter destruction
Complete
of
Speaking of the returning soL
dier, Senator Radcliffe said:
ment
The War.
' :
(i.
groups
forces
pede is
....
and
-sinister and hideous efforts of the
our
best
seems
;
price control
be, taken on the entire sub¬
ject
Administration's
the
price control program. He
merged
immigration
carefully after
and I believe such action
war
1, Mr, Green
dividual price increases have now
of
field
broad
will be considered
House-ap¬
subsidy foes intend¬
"Individual
absolutely forbids it.
ourselves
to
the1 Senate
the
after Jan.
wreck
to
stated!
floods of im¬
migrants.
No obligation to hu¬
manity calls for such action. Duty
which
been
to open
peace comes,
courageous
defense
ed
whole
think this coun¬
country.'
"A
opposition' to
subsidies
gates wide to
our
Savings And Loan League
Equivalent To Put¬
ting Hobbling Ring On Private Enterprise
Sees
Greatest Aggregation Of Capital Seeking Investment
In Home Mortgages The Country Has Ever Seen After
Views Plans Of Some Planners As
proved bill barring price control
—
:
will
devastating."
many
in
Radcjiffe of Mary¬
the statement of Senator George L.
an
Executive Vice-President Of
sub¬
v-
before
asserted that
curbed."
! This
con¬
food
Banking and' Currency Committee
losses to individuals
tendencies are to be
sidy payments in some cases should be made if
are to be avoided, or if dangerous inflationary
the
.
,,
Appearing
Labor,
Dec. 1 to
on
broaden
sidy program.
"The payment of subsidies at its best is no more than the choice
of'the ldsser of two evils, but I cannot escape the conclusion that sub¬
•
and
of
Urges End Of Government
Control And Sound Tax
President of the
Federation
Thursday, December 9, 1943
seen,
tions of
has
country
and
that
probably
implica¬
the
this circumstance
the
on
cost of
mortgage money are obvi¬
in the light of the experience
ous
Of older countries with
larger
ac¬
cumulations of capital. As the vol¬
ume of capital
increases, its cost
decreases, he emphasized.
"Lots of planning for the post¬
war period is
being done at com¬
munity levels," he continued.! "It
is too easy to ridicule commissions
and organizations on a local level,
when as a matter of fact they can
be
tremendous influence, study¬
a
assuring
"The implications of universal ing how America lives, and what
Stability
of \ commodity
prices, employment have to be studied in kind of homes it has. With such
upon what you do in this respect
tyhhe permitting tho use of sub¬ our planning," he continued. "It information more carefully stud¬
will depend very much indeed of sidies through the lijnited and in¬ means a whole redistribution of ied
many of our impractical hous¬
the welfare of our entire welfare adequate channels it left open to the purchasing power of the na- ing experiments will cease"
fare.
of
Much
more
entire
our
it
is
country."
true
V.
;
action
that
any: program
on
branch."
the executive
-
;
Principles Of Wilson ;
Advocated By WilSkie
Nov.
of
avoid control
the principles
to
Woodrow Wilson to
And
government"
according to a United Press dis¬
patch from Dallas on Nov. ■ 27,
by1 "overcentralized
"tailor-made"
to
fit the needs
of each customer is the
policy
of this
;
institution, nbw in its
69th ye At of servi.ee to the
Northwest, Member Federal
Savings &
Corp.-' '*
Loan
Insurance
"The
said
many
regulatory ' laws " which' Wilson
advanced sought;to control forces
in our economic, life which would
jenslaVe
not
so
men,
lives as
regiment
to
many,
laws do
today."
.
;
J'
Frequently Finding Ourselves Unable To Pay.
Wage Level Falls to Lesser
Degree Than Previous Depression So That History Of
Money In This Country Is that Of, The EverL Decreas¬
ing Purchasing Power Of The Dollar.
qii-t ■
;
j
With Each Depression Says
,,u
•
Willkie
Mr.
"men's
Established 1874.
,
which, added:.
:
.
-
i
;.
the
r
,
Executive
the
curve
of the
United States
a
society based on default."..
He said that the
at par
—$100. Investments
to
HILLS—
BEVERLY
★
An
advantageous
plus
_lo¬
conservViQ
a
tive .management
or
'
ha^>A
17
$10,000
dividendu
•
For
.
v
'
,
Further Information,'
Write
GEORGE W.
,
.
DAVIS* Mgr.
$5,000,000 ★ Largest in Pasadena
BUILDING
&
First Federal Savings
and Loan Association
LOAN
ASSOCIATION
BEVERLY HILLS
of pasadena
38 South Los Robles Avenue
★
coherence'of
war
the
i,
...
,
.
.
'
t
•
-n
;
story of American progress > is tied in with the
prosperity
of
fre¬
and
depression.
that with each
Downs said
it4 falls to
lesser degree
previous de¬
pression, so that the history of
money in this country is that of
the
ever-decreasing
purchasing
Pasadena, Calif.
it
fell
in
a
the
of,the dollar.
Speaking of.the' kind' of house
power
u
consecuti#^
semi-annual
payments.
suited in
..
Current yield 3%.
Resources Over
decreasingmdlue of the
ever
the word.
Mr.
cation
demand
•
to pay it back in a
C'!.
Institutional Funds Invited
invited.
morns J
■
is a pretty conservative
place to live, in the good sense of
than
on
.J-,-- -
,
system of borrowing money in a<«>-
falls,
At all times, all investments have been
paid
•„
Savings and Loan League while pointing out that: "We
depression,' when the wage level
more.
.
quently finding ourselves unable
Secretary
Since 1925, at all times, Mutual has paid 3%
u..
......
•
the velocity, of .human living is increa^jftg^so wRl. be
continuation of
period
MINNEAPOLIS
OLIVER W. ANDERSON
as
dollar; James C. Downs, Jr., Chicago, told the
over
•$6,000,000.00
704 MARQUETTE
:■(-
...
Just
live in
Assets
HkjP
Society Based On Default
Holds Story Of American Progress Is Tied In With Sys¬
26 said that the nation
tem Of Borrowing Money In A Period Of
Prosperity
return
must
In A
in Dallas Tex¬
Wefidell Willkie,
as, on
James C. Downs, Jr. Avers We Live
1
are
for
are
the basis of.
system.
back
come
men
the
Women
business
our
When
from
war>
the
they
going to do pretty much what
who have been waiting
them to do; and
women
them
women
want
both
are
courageous
and
conservative"
,
Mr.
>.
Downs i said
that
his
lay¬
man's
will
opinion of why the • Con¬
didn't pass the $11,000,000,measure asked by the Ad¬
ministration was that it would in¬
house
volve
which
American
the;, returning
soldier will
want, he said-that it
be/"a custom-built American
costing.'! frorh
$6,000
to
$8,000."
'"C
"More people will want and will
get more things after this war
than at any period in the history
of the world,"- he said..
"I think we have gotten over
our fears about .'isms' and what is
,
.
,
going to happen in America.
Beverly Hills, California
America
can
relax
in
the
assurance
We
that
gress
000 tax
greater
taxation
than*r any
people has ever endured in the
world, and it was a symptom of a
tax revolt among the people.
Thus,
he
the
concluded, the only
^great
country
low
lar.
indebtdeness
that
of
the
be' paid back is by
can
purchasing
■
way
•
power
a
of the dol¬
,
.Volume 158
..
2329
CHRONICLE
COMMERCIAL & FINANCIAL
THE
Number 4236
limited
Of Unsound Boorri In
Have Best
Liquidity Position In Their History
Savings and Loan Institutions
•>"
to
* -
Real Estate Prices
(Continued from page 2326)
liquidity position, including both cash and govern¬ the very general acceptance of the mis country under present condi¬
ment securities, which cooperative banks and savings and loan asso¬
tions and we experience inflation
long-term amortized mortgage we
ciations have ever shown was reported to the war conference of the should not neglect to provide the in any degree, comparable to that
inflicted upon sdrrfe" of the Euro¬
United States Savings and Loan League by H. F. Cellarius, Cincin¬ obviously
necessary * safeguards
countries jfisl a result of
nati; Secretary-Treasurer. Revealing total statistics of the
which should surround it. This is pean
as of the close of 1942, for the first tirpe that these have been made
especially
important , when we World War I, we will fail miser¬
available, the *
'
"
f
rr:
-—
~T~
contemplate the enormous increase ably in our attempts to provide
"Ohio continues to be the lead¬
for the people of this country such
v e t era n
in savings.
ing state in the nation in volume
a standard of living as they have
League ' offi¬
When we make a loan on a
of assets in thrift and home fi¬
a right to expect.
cial said that
There are few
nancing
institutions,
having house which will run for 20 years, businesses of any kind which will
the tide of the
reached $942,469,168 at the close we need to exercise very real
business
for
represent much of a future to those
of last year, Massachusetts is in
:aution.
Few of up are blessed now
the course of
engaged in them if in the
second
place with
$534,409,747, with the judgment to anticipate years ahead the economic machine
the
war
was
and New York third, with $488,;he developments of two decades,
set in 1942.
gets out of control and goes into
n a
rapidly changing world. Go an inflationary tail-spin. During
084,097. Gains of more than $10,\ The institu¬
000,000 were made in four states back to a city or town with which the
decade
immediately
after
tions
entered
last year, Ohio, Indiana, Califor¬
/ou were intimately familiar 25 World War I, I had the oppor¬
this year with
nia and New York.
years ago and observe the changes
total assets of
tunity to observe each year in the
"Because the increase in mort¬
hat have taken place in most of
countries of Europe most affected,
$6,139,036,211,
ts homes and neighborhoods as
gage loan investments by savings
a gain of 1.5%
the tragic results of extreme in¬
and loan associations and coopera¬
well as its business sections, and
over the
flation. I am sure there are men
business
;
year
tive banks was
main¬
taining for the
only $5,223,131
for
will realize what may happen
affect the value of home prop¬
you
of
their
market
increase;that margin. Consumer
credit is strictly regulated, as you
The highest
before,
60%
to
value and the Board has the power
in this audience
who had the same
know, and all bank loans up to
$1,500 are granted only upon a
statement of purpose which shows
a
legitimate need." >. Such loans
in t\yelvermonths.
purchases of ar¬
ticles listed in the Board's regula¬
must
For
be
paid
installment
of 20% to
and these
payments mupst be made from the
purchaser's own funds. On the
other hand, while ceilings have
tions, down payments
33%%
are
required
rents, and they rep¬
restraining influence on
been fixed on
resent
a
prices, the fact is that
as a whole is the only
real estate
real estate
important kind of property, which
has
always invited
speculation,
where adequate checks have not
yet been established.
Wick-
Secretary of Agriculture
repeatedly warned of the
ard has
dangers inhex*ent in the farm land
boom which has already reached
alarming heights. Only ten days
the percentage of total ;o
experience and I am equally sure
in
mortgages erty within the life of a 20-year
ago,"addressing the National Asso¬
they will all agree that no more
ciation of Real Estate Boards, He
swung downward in 1942 for the mortgage.
'' '
evil thing could come to our coun¬
sive year the
first time in six years.- We closed
H. F. Cellarius
Vis it not obvious that if the long try except nation-wide pestilence pointed out that the" prices of farm
upward trend
lands have already been hoisted
1942 with 78.2% of assets in mort¬
:erm
amortized mortgage is to or war itself.
of
assets,
he
>
•
at about the same rate as in the
gage loans.. The low margin of
Drove itself beyond controversy iri
said.
y,; •->- "
• V»;?"
Thus far we have been fairly last war and are increasing from
increase
in dollar volume was die
"Practically all of the statistics
years ahead of us—and in my
successful in .curbing the evilsobf month to month. Some people rejudgment it will—it must be sub¬ real inflation. In World WabbJ,
reflect the slowly increasing in¬
lents of loans ahead of schedule
(Continued on page 2331)
jected to a variety of careful tests from
flationary trend in the economy,"
July, 1914, to July, 1918, the
as well as to some decrease in the
if value. Present-day credit status
said
Mr. Cellarius.
"More , and
cost of living in the United States
volume of new loans made, re¬
of the borrower is not enough,
more money in the hands of the
rose
50.3%.
From August, 1939,
flecting the restrictions on con¬ lor the location or supposed cost
people,
greater ability to set
to August, 1943, it rose but half
struction of new houses.
Df the property.
Certainly such that
some
of their earnings aside as
figure, or 25.2%. The whole¬
The
"By and large, the savings and appraisals as have so long been
savings,
less
need to borrow
loan
and
cooperative
banking tolerated in many parts of this sale price index,- including all
money, greater desire to own real
commodities other than farm pro¬
atkins
system has managed to keep its country cannot be regarded as a
estate as a hedge against the de¬
ducts and foods in the last war,
head clearly above water during
dependable basis for long-term rose 96.1%. For the comparable
creasing value of the dollar, all
saving &
the war, to do its part in financ¬
mortgage lending.
these conditions can be read be¬
period in this war, the increase
ing the gigantic expenditures of
tween the lines as we look at the
In that connection may I say has been held to 37.5%. While in
association
the nation in the global conflict,
consolidated balance sheets of our
that
I know of no
feature; of World War I, as an illustration,
institutions 13 months after Pearl and to turn those of its resources
the price of steel plates increased
mortgage practice which can en¬
As of Dec. 31, 1942
Harbor. Most of these trends have which
were
conveniently situ¬ list the attention of the lending over 187%, thus far those prices
been accentuated, rather than to
ated, to the solution of the war institutions of this country to have shown no advances since Au¬
I
ASSETS
any degreed counteracted, in the
greater advantage than' a thor¬ gust, 1939.
housing problem."
;
first ten months of 1943.
'While these figures, which are
c."
$1,515,331.21
j
ough overhauling of our appraisal
the
year,
invested
assets
fourth succes¬
,
Sartly due to stepped up repay-
.
loan
: Because
right now; in dependable and lately verified by
direction institutions of all one of the country's leading bank¬
classes are making inflated loans ers, are encouraging, we certainly
based almost entirely on tempo¬ ought to understand the difficul¬
rary
market conditions and ex¬ ties we will confront if they begin
aggerated appraisals, we are de¬ to baloon or if any other impor¬
\\viov •««••*': "
system.
:
ivery
resolutions one asking for the re-establishment of the
Bank Board and for the transfer of the func¬
tions of the Federal Home Loan Bank Administration from the
National Housing Agency to this Board, was passed by the war con¬
ference of the United States Savings and Loan League at the Palmer
House in Chicago.
The five-man Federal Home Loan Bank Board,
which
administers the Federal^
credits is no more reason for plac¬
Home Loan Bank system, and the
ing the Federal Home Loan Bank
Federal Savings and Loan Insur¬
ance
Corporation, was abolished system in the National Housing
Agency • than, there * is cause :io
by executive prder^m February,
.place the Federal Reserve system
1942, for the duration of the war
;m the Department of Agriculture
and its functions placed; in ah
because
its member institutions
operating unit under the tempor¬ make loans to farmers.
ary super-agency known
as the
"Just as the very tenets of state
Among other
Federal Home Loan
Housing
savings and loan
The
Agency.
executives held
for the permanent ex¬
istence of the super-agency are
now evident and that the instru¬
mentalities under the former Fed-;
that plans
eral Home Loan
place * at" all
no
The
in the housing
*
set-up.
agency
Bank Board have
statement presented
socialism
diametrically
are
of'
from day? to
in the Federal Home LoaiT Bank
Administration
assuming
op¬
business
bureaucratic
flanking the
fundamental opposi¬
private citizens and busi¬
men who believe in the im¬
tion of
if things get
No
25,
1908
Association
L-
.
dividend payments.
well knows
out of hand in
'
INDIANAPOLIS,
ASS'N"
Current
Dividend
:2Vz%
INDIANA
Investment
Legal for Trust
in
SAVINGS AND LOAN
Fluctuation
Market
Insured
most
Assets Over
Funds
States
$3,000,000
MID KANSAS
independent
an
as
INSURED
:Q
record of semi-annual
banker,
in this
business,
but
that their supervisory and
central credit sources be equally
ate
An
UNION FEDERAL
associations be permitted to oper¬
•
independent of objectives or con¬
trols emanating from hqstile
of the free enterprise unfriendly motives."
system is to create a temporary
agency to meet what are termed
emergency needs.: Then from such
a temporary bureau, and at tax¬
"V
payers' expense, ■ there flows a
stream of propaganda urging Con¬
CITIZENS
gress and the public; to make its
activities a permanent department
ness
of common sense
by the prefer the free enterprise system
"
device
of* the
planners for out¬
Incorporated April
Street/INDIANA"
professional
and
man,
man
by every instinct, tradition' and
self-interest, may be expected to
favorite
East Market
INDIANAPOLIS,
Throughout its 56 years of'existence this
institution has maintained an unbroken
which de¬
Every
that
associations
of peple who,
,
"A
proportions
attention.
mand
and to assume that such institu¬
iresolution'cdiiciinittee and adopted
tions are aggressively seeking to
by the conference reads in part:?
maintain it as the American way
"The
people of our country
of'life.
Unless the trend to state
must decide whether housing is to
socialism is to engulf the housing
be an activity of private industry
field, then, it becomes essential
and private capital, or whether it
not only that' savings and
loan
is to be turned over to state so¬
cialism.
;
SAFETY SINCE 1887
forced to
are
we
recognize the fact that threaten¬
ing practices of the kind to which
I refer are developing rapidly and
these
constitute a group
of
:
yt'y
facts which come
Because of the
posed to the principles fostered
and
encouraged by the savings
and loan associations, so do the
customers
legment
$184,624.70
to our attention
.
National
tant
\
159
the ' American
economy goes "hay-wire."
As you know, under the powers
•-esumption
of
home
building delegated to the Federal Reserve
when this tragic war ends.
Board, loans agairist securities are
veloping a situation which can
easily become'a real menace and
interfere seriously with the prompt
Total Reserves ;
V."
v
FEDERAL SAVINGS
AND
LOAN ASSOCIATION
.
WICHITA, KANSAS
Financial and
or
operative statements
request
sent on
portance
"V*
government.
of
: ".
■ '
savings and loan
m
,
.
associa¬
tions of the country have confi¬
dence in the Federal Home Loan
Bank system and in its official
personnel. They wish to have its
operations continued in conform¬
ity with the law—as an indepen¬
<
"The
unit,
in¬
in¬
extend home mortgage
dent agency.
It is a financial
members are financial
stitutions. Because its member
as
its
stitutions
-FEDERAL
'
-
f
T
•>
4
/. it
V_
/is.
Yield
Qu
On All Kinds
'i
i
r
•
ASSETS
•
OVER
$30,000,000.00
:0K
I
of TRUST and
••
.'.'HI
-
■
AB !
INVESTMENT ACCOUNTS
\
V SAVINGS
by this
ADMEN'S
•
2y2 Million Institution
FEDERAL
5272 HODMAN AVE.
JUST MAIL
WE
CHECK*
V
HAMMOND, INDIANA
C. E. Bagley,
Pres.
SAVINGS
21
All Accounts
Insured To $5000
AND
LOAN ASSOCIATION
OF INDIANAPOLIS
.
DO THE REST—
Virginia Avenue
Indianapolis, 'ndiana
where and how savings and loan-
For Peace
In Time Of War Let Us Prepare
of
(Continued from page 2327)
that regardless of what our
legal
monickers might be, we
speak of ourselves — in releasing
publicity —. as SAVINGS ASSO¬
CIATIONS.
This
is
only one
ly
phrase,'
ter
a
suggestion, that might
or
used, (there well may be bet¬
thoughts among us) but what
be
tremendous step
toward having
public mind conceive of our
business as a unit, if these two
words
"SAVINGS
ASSOCIA¬
the
TIONS"
or 'some
other
equally
descriptive phrase were used all
of the time by all of us.
If such
a name or phrase were publicized,
we would make a real impact on
consciousness,
not
units, but as
a large integral chunk of the na¬
tion's financial structure — a six
billion dollar chunk.
We have
most of the ingredients but what
we need is the cohesive cement to
mold ourselves into a recogniz¬
able keystone, in the savings and
mortgage financing. structure of
public
the
locally as individual
the nation.
purposely general
been
have
I
to this point to show the di¬
thought the post¬
up
rection that the
war
committee is taking,
program
of and rea¬
and to show the need
existence as a com¬
for our
son
The report that
mittee.
is being
today is a progress
to you
made
It is divided into two sec¬
report.
submitted
for the committee by myself as
chairman—is simply a broad out¬
line of the scope, the direction we
The first—being
tions.
taking, and an expression
are
membership's
cooperation. Again let me
fullest
the
for
need
our
of
that we seek suggestions and
constructive criticisms.
The second section, our Vice-
say
Chairman,
will
cover
detail
Mr. Arthur Erdmann,
dwelling with more
upon
our
before us
have
we
Combined
material.
nomic
plethora of
with the
socialistic propa¬
commentators, column¬
even politicians, we have
groups,
gandists,
ists, yes
<
adds up to a con¬
hand what
on
itself, is a revival of local initiative in Government," Cyrus Crane
Willmore, St. Louis, told the war conference of the United States
carded in our committee meet¬ Savings and Loan League at the Palmer House in Chicago. "As Fed¬
eral Government has expanded there has been a weakening of local
ings, but v we can well review
some
of the things which seem administration with increasing local dependence upon Washington."
Mr. Willmore is President of the people.
I have not been able, in
to us to constitute threats to the
National Association of Real Es-<s>————
—r
progressive growth of our,institu¬
looking at permanent public hous¬
tate Boards.
' »
tions.
"Sound local planning for post¬ ing projects from one end of the
How
deep
will
the
socialcountry to the other, to find one
minded in government have their war is most important, but what
we need are more plans by indus¬
project in the United States where
fingers in the private enterprise
as
many as 10% of the families
pie?
What will be our competi¬ try and less by Government. If
tion for mortgage loans, for sav¬ municipalities, counties and states who. formerly lived in the area
continue to plan to go to Wash¬ moved into the new project. Most
ings accounts, and whence will it
of the public housing projects pay
come?
Will postal savings grow? ington to get the money to carry
small service charges in lieu of
Will
public
housers perpetuate out their plans, then private en¬
taxes,
about one-sixth to onethemselves? Will an already suc¬ terprise is doomed.
"We will have to fight those tenth of what you would pay if
cessful FHA continue, and per¬
who think we cannot survive un¬ you owned the property.
haps,
eventually let down the
"The public housing projects are
bars so that anyone can invest in less we surrender to bureaucrats.
an
FHA
insured
mortgage and Those who give up their liberty planned to stand for at least 50
have the benefit of insurance on in order to procure security will years. Are these people to be sub¬
find that they have lost both their sidized for 50 years? That is two
his investment?
thought, what we discussed, what
we
accepted and what we dis¬
of Commerce, eco¬
Chamber
conglemerate mountain
Our endeavor has been
siderable
of ideas.
to subtract, to add, and
that are appli¬
part of
to screen,
to orient all ideas
cable to our own plans as
have
abil¬
and
suggestions
bearing
upon
all
phases of the savings and loan
business, past, present and future
—accentuating and underscoring
post-war program.
We
analyzed to the limit of our
our
ity all of the subject matter
We
future.
the
endeavoring
In our
to the
are
the
for
search
problems
front
believe
we
the
after
us
will
there
are
zen's
and
a
of
division
tural
the
a
Can
na¬
divisions were given
point in each case to
accomplishments larly apply.
It
to date.
My sincere thanks go out to
the
proposed that the first
develop savings and
was
sub-division
standard plans of new homefinancing.
That
of Los
committee
to the
second submit
the
as
a
expansion of
whole methods of
savings volume.
our
That the third point
Angeles
the way to
other
additional investing outlets
Accounts
That the fourth work upon ad¬
Solicited
ditional financial services to sav¬
ings and loan customers.
That the fifth make suggestions
Insured Safety
for
our
participation in general
housing, slum clearance and re¬
development programs.
Write for Our
Financial Statement
That
and
Wilshire Federal
determine ways
the sixth
merchandising the
of
means
savings and loan business.
That
seventh
the
*
better mort¬
sions
system?
savings
we
are
do about this?
some
of
the
ques¬
that
feel
we
is
be
can
our
first
developed
with
ing
through
our
supervisory
our
keeping them informed
of what we are doing.
May it be stated again that this
progress
a
Council
Executive
and
for the membership's further
expressing
committee
as
of the
on
behalf of the
whole
a
our
appre¬
cooperation of the
staff of the United States League,
forward buying, and in profits. In
ings, and rationing; new business
other
particularly
ventures,
post-war years have
and
the
in
out,
summer
business was
American
one
of
The
1914,
combat¬
various
the
United
States
LEGAL
AND
FOR
YOUR PROFIT
This strong Association
an
attractive
offers
combination
of
safety and yield. It has paid
semi-annual dividends with¬
out
since
interruption
founding 21
counts
are
years
insured
ago.
Ac¬
for safety
to $5,000
by
an
on
U. S. Government.
TRUST
to
FUNDS
in business
assets, in
short-term debt, in inventories, in
Safety and
agement.
sound
.
conservative
League committees, whose mem¬
at first
work, I thought
we
overlapping.
Over
☆
&
2101 Shattuck
Loan
Association
Avenue, Berkeley, Caiif.
I
A
I
ASSICIAIIIN
OF HOLLYWOOD
☆
Hollywood Blvd.
•
Hollywood, Calif.
HEmpstead 4141
to
extended
us
a
SAVINGS
LOAN ASSOCIATION
tive
standards, but in the post-war
business assets deteriorated
in quality as they increased in
quantity.
years
Post-War
Financial, Collapse
Prices fell
sharply
ments
were
Cancella¬
imperiled.
flooded
orders
commit¬
Business
of. 1921.
sales
man¬
14 Commerce St.
Newark, N. J.
the
almost as
the three-year liquida¬
year
as
in
write-downs
and
sales
1921
tion of 1930-32.
was
Inventory write¬
downs of 64 large concerns
totaled
The fact
$344,000,000 in 1920-22.
helping hand from the
League—its officers, com¬ inventory holdings had been fi¬
nanced by short-term debt proved
mittees, and the < membership at
entire
a
serious factor.
■
can
commend¬
I resist
the committee for
enthusiasm
their
accepted
unabated
splendid work.
saying
the spirit collapse
which
with
WORLD.
If there is any lesson
_
its
assign¬
that has re¬
through
all
There is an
leaders
reau
for
today,
in the 1921
American
the
business
National Bu¬
declares, it takes this form:
the crisis could hardly
avoided
have been
by makeshift policies
of
—"ENTHUSIASM IS
business, banking and government
ASSET IN THE
BEATS
MONEY
conceived and applied at the last
IT
moment.
Nothing except a differ¬
INFLUENCE.
LESS ent set of post-war business ex¬
THAN FAITH IN ACTION." EN¬ pectations, a less ambitious scale
THUSIASM
FAITH IN AC¬ of business expansion, and strict¬
TION, if it spreads through all
er adherence to older standards of
AND POWER AND
IT IS
NOTHING MORE OR
—
NATIONAL NEWARK BLDG.
\
the last
months of 1920 and the first
seven
tion
over
that the bulk of the swollen dollar
THE GREATEST
MOHAWK
AND
6763
had
sides
friendly
old
(
caliber of the men
the
business that from all
have
their
Write for
FIRST FEDERAL SAVINGS
Building
our
members
$4,500,000.
1918, financial expansion of busi¬
conformed to fairly conserva¬
wires single
severe
It speaks vol¬
ment—an enthusiasm
latest financial statement.
BERKELEY GUARANTEE
in
mained
Assets
All
for
umes
of
$4,000,000.00
easy
ness
might be crossing
ing
by mail?
goods,
hav.e given so much time
thought to the work that we agers.
The reduction in the book value
are
doing.
Because
of
the
of inventory that resulted from
breadth and scope of our' com¬
bers
Neither
ASSETS OVER
for
demands
and
man¬
May we send you our Statement of
Condition, and explain the simple ar¬
rangements for opening your account
new
inflation, the rise in book value of
inventory, and inadequate inven¬
tory reserves. The period was one
of
substantial
buying
power,
half
large.
Your account here earns you the high¬
est
return
consistent
Vith
Insured
its
each account
instrumentality of the
up
up
by a direct instrumentality of
States Government.
outburst of consumer
expansion of
activity,
we
United
developments in 1919war were featured by
spending,
business proj¬
ects, growth of short-term debt
for working capital, rapid increase
in bank deposits, commodity price
an
story is
and
FOR YOUR SAFETY
Business
20 after the
in business
rapid growth
that
insured
broke
of
war
boom while the war was in prog¬
ress.
credits, ready availability of cap¬
ital markets, and over-optimism
that led to many excesses.
Up to
ting mild recession. The shock of
war at first increased the negative
tone of trade but a boom soon
made itself felt.
words, the country financed
private business and speculative
world
Booms
Post-War
and
War
mittee's
is
a
passed.
When the first World War
jtuuctumuMiumwnMi
here
is any guide, ac¬
by scarcity of goods, wartime sav-
cannot close this report with¬
ciation
account
Financing:
period of high-level activity in the
business faces a
American
agen¬
and
cies
out
the
free."
tax
post-war period, if experience after World War I
cording to a study of the effect of World War I on
ob¬
League's
legislative
committee.
In the meanwhile, we are advis¬
I
$5000.
half
Manufacturing And Trade, World War I
to
suggestions and criticism.
Your
other
Bureau's study, makes all too evi¬
definitely find out dent the possibility that American
what we may ultimately want and
business may confront a serious
need in the way of enabling legis¬
problem of restoring balance in its
lation.
This aspect of the work
financial structure before
many
jective
open
2%% CURRENT RATE
not
ership. Home ownership cannot
survive, one-half taxed and the
build them.
barn to
problems, your American goods.
committee
has temporarily laid
However, business history dur¬
aside any thought of the restric¬
ing the period of World War I and
tive boundary lines encompassing
the post-war years of the early
us through legislative control, be¬
twenties, as traced in the National
through them to you. And all of
the subject matter will be wide
Calif.
a
these
on
-
the
461 South Western Avenue
where they did not
spaces
The Effect Of War On Business
of
threat
the
report and our work
will be submitted, in sections, to
Loan Association
clear slpms.
They
the city's edge in
in fields
tions before this committee and whose development was delayed
before all of us.
In progressing by the outbreak of war; and de¬
and endeavoring to reach conclu¬ mands from
world markets for
These
is
Los Angeles,
national
real
ascertain
Savings and
housing does
social gains.
It is a cancer¬
ous growth and unless stopped it
will develop into a running sore
that will destroy our home own¬
mean
business financing
potentialities? Do we realize that
savings and loan associations are just completed by the National Bureau of Economic Research.
Factors which, according to World War I experience, are likely to
the only type of business, with a
country-wide
coverage,
which promote a strong financial expansion of business include deferred
r
*
could if co-ordinated constitute a consumer demand being built up?>~
cause
than first mortgages.
Institutional
of
most
What should
loan
Wilshire Federal
a
government in business? Are we
prepared to take advantage of our
to which they particu¬
the phase
Public
world?
mind?
conceive
we
eliminate
membership-at-large through sub¬
mission to the Executive Council.
seven
at
down
tear
—
titles which
not
built
open
plan?
Can we lead as sav¬
ings institutions?
Can we lead in
individual
enterprise
and thus
brought back, surveyed, re-organ¬
ized and then sent along to the
These
nothing less than
gage
program
the members of the com¬
their conclusions to be
among
mittee
did
ects
were
American's
component parts
work into seven
eration to be born in a subsidized
Certainly that was not slum clear¬
tive for thrift out of the average ance but a fraud on the American
In our
general ventilation.
citi¬
each
envelope, they will in¬
governmental compulsory savings
plans, and thus drive the incen¬
being given analytical study
deliberations, we came to
of
out
more
pay
deed be finally
no
phases of our present opera¬
tions and policies and restrictions
All
are
still
and
We are aware that
single solution.
be
can,
Are the second gen¬
generations.
liberty and their security.
—
—
trying to have vision without be¬
ing:, visionary.
security
"Under
the USHA
many
sosponsored by State and
slum
clearance
projects
National
Government
multiply called
and expand until by taking more were built. But some of the proj¬
plans
con¬
we
war,
all sorts of social
Will
sound.
solutions
to be rational and
beginning to manifest
great need in this country, and it is
"Our
Indus¬
By Government: Willmore
try And Less
take
time to tell too much of what We
stuff, garnered from
background
the
a
Post-War Need Is For More Plans By
housing.
It is not necessary here to
thinking
their aid,
representing
objective
planning. Through
and
financing
the
into
publicized prefab¬
much
the
ricated
have already made
constructive suggestions and have
sent
to the committee material
who
many
fit
to
are
ers
Thursday, December 9, 1943
FINANCIAL CHRONICLE
THE COMMERCIAL &
2330
our
our
membership,
PROGRESS.
will
guarantee
(Continued on page 2333)
Volume
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4236
158
John I!.
not
(Continued fr< >m page 2329)
•who
what that
Those
to.
with
familiar
not
are
led
the
facts should read the record.
the
on
properties, an average in¬
of over $1,500 a property
crease
78%
or
than the HOLC bal¬
more
and pay off. its bonds.
develop presently. I do not
to assert, however, that
there are complications involved
which are not realized by those
who are under the impression that
Home Owners'^ Loan Corporation
^v-Real, Esla le Prices
member
then
hesitate
Fahey Warns Of Unsound Boom In
'•
be
can
closed
evident that the prices
of urban1 homes are moving up
with almost equal rapidity and
the trend
farm
is
land
sections
serious
as
prices.
that of
as
In
too
many
workers
war
are
being
.sold houses which they are almost
certain to abandon after the war,
at
prices far out of line with real
values.
develop¬
ing where a worker goes from his
former employment into a war in¬
dustry center remote from his
home and leaves his family be¬
hind.
After a time, anxious to
have the family with him {and
unable
because
of
the
housing
Many
cases
Moreover, they
104.2% of the original HOLC
were
loans
let
pay-off.
these
on
us
and
repairs. The houses on which
new loans were placed aver¬
these
aged
22 years old'.-.
over
These
confined
not
of the
loans
inflationary
to
Government, private lend¬
little
more
than
While
rent.
it is true that some of these work¬
ers
remain in the communi¬
where they now have
war
may
ties
jobs, let
remember that about
workers
have
moved
us
'3,000,000
from
in such
gage
work,
"country.
a
before
equalled
"never
homes
former
their
to
en¬
migration
iiy this
shifts
in
the
location
of
in¬
in
the
post-war
I
from
interested
most
am
one
to
associations, mutual savings banks;
insurance companies and private
mortgage concerns.
,
I submit that this trend is
some¬
thing to which not only this
or¬
ganization, but every other bank¬
ing organization in the country
should
I
do
give its earnest attention.
think
not
it
resolutions
pass
sufficient
is
about it.
ings will not, in
strict
the
to
Warn¬
opinion,
my
of
activities
re¬
reckless
whose
lenders
practices, if per¬
eventually
react
in
greater Or lesser degree upon the
entire business.
I think organi¬
sisted
turned
sale
The
loahs
of
which
have
carried
like
this
should
address
leaving
make
that
ods
of
which
suggest meth¬
forestalling
almost
are
the
troubles
certain
de¬
to
possible
brakes
influence
to
put
the
inflationary mortgages.
1930 to 1939 the savings
on
From
and loan associations of the United
Such
sense.
the
plan
a
Government
which, after
have
finally
basis
sound
been
loans
on
placed
of
cost
a
be
adjustments,
many
at
means
would
deprived of the income
on
tens
a
of
millions of dollars and would still
be
obliged to maintain
organization to
wide
of
nearly $3,500,000,000.
30, last, the end of the
On June
fiscal
$1,852,000,000 of
been
liquidated,
53%.
This
left
liquidated
its
or
$1,632,000,000.
$1,440,000,000
was,
represented by
loan balances
and $191,000,000 by
the capital value of properties on
hand. The Corporation had taken
terest
and
on
accumulations, taxes, repairs
foreclosure
costs.
The
the properties to June 30
the
The result would
be, of course,
lacking the interest revenue
that
from
the
"good"
were
for
money
to
cover
That
expenses.
its oper¬
in¬
would
volve greatly increased losses and
necessarily add
large
a
sum
Government debt.
Every executive
a
to the
connected
with
responsible financial institution
knows,
certainly should know,
or
of less
ances
than
75,000 of them,
Over
80,000
our
ciation
and
writers
Association.
E.
J.
Loring, president; John
first vice-president;
Maurice Schumacher, second vicepresident; O. J. Hanson, treasurer;
Fogerty,
L.
B.
Byard, attorney.
man,
Henry A. Johnson, James E.
O'Donnell and John T. O'Donnell.
three-year moratorium
cipal payments which
allowed.
portion
At that time
of..these
a
on
borrowers
than
a
year
By 1937
prin¬
Congress
large pro¬
seriously
in
default
and
165,000 of them were behind
their
on
were
over
more
payments.
$1,000.
on
More defaulted loans
by
over
HOLC
from
mortgages than from
the
smaller
communities,
HOLC
this
individual
class of
Many of these were
institutions.
in
taken
were
and
any
more
and
The
loans
for
extent
remote
smaller
to
which
scattered
are
over
country in small towns and
villages is .little understood.
even
are
thousands
where
of
them
there
in
are
no
or
lending institutions of
type and a great many out¬
side
the
operating
areas
of
the
over
schedule,
1938
this
or
nearly so, but by
dropped
to
number
360,000, and large numbers
heading toward foreclosure.
turbed
it
the
1939
were
Dis¬
this prospect and what
in additional losses"to
over
meant
Government, the Congress in
passed the Mead-Barry Act
and directed Home Owners' Loan
Corporation
to
extend
for
10
accounts which had become
years
delinquent
and
faced
Over 255,000 such ac¬
gravely
foreclosure.
lending institutions.
as
Directors
include the officers and C. A. Olt-
lem.
serve
man¬
Other officers of the association
ance
Such officials who
executive
operated by directors.
agency
counts
debt represents
be
of the realty and insurance
ager
banks
war
our
will
also
son
any
of
One
Under¬
addition to directing affairs
Henenpin Federal, Mr. Ander¬
of
greatest, if not the
greatest, American post-war prob¬
extraordinary
Minneapolis
In
380,000 of these ac-,
counts had been improved to the
point where they were being paid
communities
reduce
a
neapolis real estate boards, Min¬
neapolis Mortgage Bankers Asso¬
accounts
of HOLC
all
member of the national and Min¬
$4,000.
of
on
drives, is
$250 and $500 last
June. Now they are smaller still.
222,000 of them were less than
There
and
$2,000 and but
only about 10%,
excess
Mr. Anderson has served
the Community Fund
pur¬
were-between
posed
carry
or
had balances in
that the taxes which must be im¬
to
were
mortgages; 470,759
Corporation's accounts, or
63%, had outstanding bal¬
amounts.
t
140,000
money
the
over
HOLC
loans
would have to resort to the Treas¬
nearly
chase
(Continued from page 2325)
was in the commercial
banking business.
neapolis he
are
by interest, rent and other
income, to a total of $189,000,000,
leaving a net deficit at the end of
of
Secy.
By Hennepin Federal
losses
offset
these
Andersen Elected
balance to
a
of
nation¬
a
serve
slower loans.
ury
and
loans
the fiscal year of
$65,000,000.
As of the June
accounts, which are coming
billing dates, the
through all right but require time Corporation's total
outstanding ac¬
and
attention, simply does not counts numbered 743,630.
Of
ating
involved
it with the still
and widely-scattered
slow, small
in,
zations
its
That liqui¬
ahead of schedule.
Corporation made total ad¬
vances
be
collect
over for cash
at a given date to
responsible
institutions
without over, as a result of
deaths, aban¬
grave sacrifices by the Govern¬ donments,
foreclosures, etc., 195,643
ment, that would be one thing, properties and had sold
170,652
but to sell off merely the "good"
houses, or 87.2%. The book value
loans is quite a different matter.
of these properties included in¬
themselves vigorously to the prob¬
hear
city after another where
be
while
lenders, com¬
savings and loan
banks,
period,
are just fooling themselves, in my
opinion.
could
classes of mortgage,
mercial
States and
our
velop unless preventive measures
It is par¬
but those, who believe that a large are applied promptly.
proportion of the workers now ticularly important, in my opinion,
that tlie savings and loan associa¬
employed on war contracts, re¬
mote
from
their former homes, tions of the country should be in
will remain where they are now, the front rank in exercising every
dustries
loans and remain¬
properties
lems
>
Undoubtedly "there will be cer¬
tain
all HOLC
If
ing
have* been spreading from month
to month. They were made by all
than half
more
'
but
and the public, and no unfair¬
ness to HOLC borrowers.
along at great ex¬
pense and finally made good, al¬
though hopelessly defaulted when
taken over by the Government,
in
The
to
well
over
the
ers
made .been
were
compara¬
is
to
section
one
any
They
country.
were
a
dation
tively short time with advantage
properties, which,
remember, included delin¬
quent principal and interest and
usually overdue taxes, insurance
are
shortage to rent anything accept¬
able, he is ready to buy even at
an excessive price.
He is not dis¬
turbed about the price because of
higher wages than he ever before
enjoyed and the ability., to buy
with a limited down payment and
long-time
amortized
mortgage
financing which really represents
at
ance
in
out
proceed
year,
asests
had
'
It is very
2331
were
with
made
the
over
in accord¬
amendment
Con¬
adopted. This reduced the
monthly payments on these ac¬
counts by nearly 40%, but it has
gress
States suffered a decline in assets trustees of the
The HOLC accounts as of June
savings of millions
brought a substan¬
had a remarkable effect in giving
of $3,750,000,000, a larger amount
were
distributed
in
of, people must be fully aware of 30
every
tial, sometimes sensational, in¬
this large group of borrowers a
than any other class of lending in¬ the fact that to an
expert hitherto county in the United States, ex¬
crease'in population, that* a large
chance to work out their prob¬
stitutions.
The remarkable gains unknown in our
country, that ta^- cept a very few, and in 19,047
part of it is going to remain, that
lems to an extent wholly unex¬
which have been made since 1939 .,ation will
Of
this
bp levied, directly arid communities.
number
.things have changed for that city
are certainly a tribute tofyour as¬
indirectly, on the masses of our 5,815 communities had but one pected. They have been meeting
and it is on the way to permanent
sociations, and it is important that people who constitute these sav¬ loan, 2,637 had only two loans and their payments on schedule in
!and greater growth. All this is not
after this fine record of recovery ers.
Banks and mortgage-lending 1,588 had but three loans.
Out steadily increasing numbers and
only reminiscent of 1922 to 1928
by most of the associations they institutions clearly should be the of the 19,047 communities there reducing their debts, with every
:, but of every land boom and housshould
not
experience
another last to adopt policies which un¬ were 14,266 places, or about 75% prospect that a very large pro¬
,ing boom encouraged by unsound
setback or impairment of public necessarily increase the Govern¬ of the total number which had portion of them will pay out.
lending and excessive prices, for confidence
as a
result of the ac¬ ment debt and
The Corporation has been work¬
prolong burden-' less than 10 loans. They repre¬
many decades.
4,,;
•
tivities of lenders who neglect to some
taxation, in order to gain a sented a total of 37,700 separate ing steadily to improve these ac¬
A good many of the Home Own¬ exercise
discretion in an uncer¬ few extra dollars for themselves. loans and over
10,000 of them counts and the smaller loans, as
ers' Loan Corporation loans which tain
No class of business men has done ranged
period.
between $250 and $500. well as to persuade borrowers to
have been paid in full, particu¬
My reference to recent infla¬ more to aid the war effort than Over 11,000 more in these smaller increase their principal payments
larly in the last year, have been tionary loans made in connection the
managers of our financial in¬ communities had balances of but beyond
regular amounts.
Last
the result of sales by Corpora¬ with
the sale
of properties
by stitutions. In the advancement of $500 to $1,000.
It is true,
of year they responded by paying
tion borrowers. It is interesting to HOLC borrowers
prompts me to the common
good there is no course, that some of these scat¬ the Corporation over $35,000,000
observe the
inflation of values
bring to your attention certain group more helpful or construc¬ tered communities are within the beyond what was due and in the
which has taken place in connec¬ facts
concernings HOLC problems tive, and it is difficult for me to lending areas of cities, but we last fiscal year they paid us $53,tion with such sales.
with which I believe you should believe that
any
of them who must 'remember that this, is still 000,000 more than their contract
Other HOLC loans have been be familiar. They relate particu¬ really understood the HOLC
prob¬ a country of great open spaces, called for.
paid in full as a result of money larly to various proposals for ac¬ lem would
These are the heartening signs
campaign to take over and in the thinly populated areas
advanced /by institutions anxious celerating the liquidation of HOLC. the
Corporation's "good" loans, the there are hundreds of miles be¬ about these loans which were
to get loans 'Which now represent I think it is
my duty to present
made to people of limited means
only ones they have a right to tween these loans.
little
risk
although
previously them to you in your own interest take, and inevitably impose upon
You will recall that
There are, of
Congress in dire distress.
badly in default. The extent to as well as the public interest be¬ the Government serious losses and fixed a flat interest rate on all course, constant shifts in the status
work has
war
,
,
,
,
.which
loans
,of
of
some
proportion
is
ures
Such
these
refinanced
have been increased all out
also
reasonable
to
rather
fig¬
■
;.
of the public responsibility
you
institutions which I know
recognize.
It has
is
a
been
suggested that this
subject. It should
certainly is not so
controversial
not
During the period when people
be encouraged to reduce
more
of your
disconcerting.
lending is plainly inflation¬
ary.
cause
be
far
and
as
I
it
am
concerned.
If, with¬
causing losses to the Govern¬
publicity about HOLC liquidation.
Despite all the information that
has
been
ment, which could not be de¬
fended, and injustices to borrow¬
to lend them
HOLC could be transferred read¬
in
ily to private hands and the
people,
more
money
and in¬
the
great volume of dan¬
gerous cash which is already loose
.in the land.
crease
There
may
sometimes be good
which are not apparent
on the surface, for lending more
money on a home than seems just¬
ifiable. This can hardly be true,
reasons,
the
ation-
loans
of
the
nated in the
and
properties
Corporation
of
oper¬
termi¬
future, I would
a policy
emphat¬
near
recommend such
ically.
It is easy enough to talk
about
however, but it is something
else to develop a plan which will
however, when loans of this, sort
are being made in
all sections of
the country. The figures on 1,186
stand
loans
long to all the pepole of the United
sales
the
made
in
connection
with
by HOLC borrowers during
last
three
months
are
cer¬
tainly disturbing as an indication
of present trends. The new mort¬
gages made were $1,793,723 in ex¬
cess
of
the
HOLC
loan
balances
the
will
test
not
of
sound
represent
business
exploita¬
tion of valuable assets which be¬
States.
dation.
an
jected
to
and is
now
nation.
long been sub¬
discussions
and
study
under careful reexami¬
I do not say a
satisfactory
solution cannot be found
or
may
to
some
It is claimed that there is
attempt to keep it in existence
order to provide
jobs for
notwithstanding
that its organization
some
the
fact
has been
re¬
duced, from
to
over 21,000 emplyoees
3,500 and its administrative ex¬
the
at
top
has
been
cut
to
approximately
$10,000,000. The fact that the orig¬
inal Home Owners' Loan Act pro¬
in
definite
terms for
its
vided
liquidation
looked.
HOLC
pay
The problem has
time
tempted to liquidate and that no
plans were provided for its liqui¬
penses'' 'of $37,000,000
it,
and
from
directions that HOLC has not at¬
out
their debts it is certainly not in
their interest, in the interest of
business, or in the public interest,
ers,
printed
time, the impression exists in
should
:
HOLC
debt.
There has been much inaccurate
is
generally
over¬
Congress fixed the time
borrowers
should
have
to
off their loans and the maxi¬
mum
rate
of
interest
as
the final maturity of the
tion's bonds.
It also
well
as
Corpora¬
provided that
no
loan should be made after June
12,
1936, and that HOLC should
loans.
This
applies,
of
of
delinquent accounts and
many
course, to the small obligations
and those in the
sparsely settled
unexpected
regions, both of which usually in¬
volve a much higher cost of ser¬
operation.
vicing
spots of the HOLC problem. There
than
in
the
cities
where
the loans
are
greater, and the net
earnings better.
It
is
large
most
encouraging
proportion
accounts
serious
do
of
not
the
now
that
a
HOLC
represent
and that
many of these borrowers have
arrearages
so
are
represent
other
many
upon
from
month which affect the
month to
These
developments
the
but
facts
high
bearing
it which cannot be recounted
since time does not
permit.
I am
will realize, however,
from this sketchy summation that
sure
you
there
are
ments
of
numerous
other
ele¬
real
importance which
duced
handsomely the amounts cannot be disregarded in any at¬
they owe, as compared with their tempt to ■ devise 'new plans for
peak of indebtedness to the Cor¬ quick elimination of the Home
poration. This fine progress, how¬ Owners' Loan Corporation.
I know it is rather superfluous
ever,
does not alone determine
their marketability at the
present; for me to take up your time by
time
for
what
they are really1 •talking about the present status
worth.
Your long and intensive of the Federal Home Loan Bank
experience has taught you that System or the Federal Savings
many other
factors have to be and Loan Insurance Corporation.
have
taken into
consideration in fix¬ Both
proven
their indisre¬
.
ing the real value of
loan.
Home
tion
a
mortgage
-
Owners'
started
gram
counts
in
in
its
1936
Loan Corpora¬
liquidation pro¬
with
arrears,
625,000
ac¬
in spite of the
pensability, their value to
country and to the lending
the
in¬
stitutions.
in¬
You
are
well
formed concerning their progress.
As of Sept.
30, if it has not already
(Continued on page 2332)
2332
THE COMMERCIAL & FINANCIAL
CHRONICLE
John Hi
Fahey Warns Of Unsound Boom In
Private
Enterprise At Crossroads, Ralph H.
Cake Tells U. S. Savings & Loan Conference
Real Estate Prices
(Continued from page 2331)
attention, you will reaching a figure which even the
be
interested to know that its most
imaginative never antici¬
3,764 members had assets of $6,- pated.
Individual savings were
200,000,0,00, the peak of their de¬ about 10% of our national income
velopment.
Of this membership in 1929 or a little less than seven
3,720 were savings and loan mem¬ and a half billions. For this
to
come
your
having assets of $5,400,000,-
000.
The
Federal
Home
the
Loan
existence
position to
to
been
service
tested.
a
na¬
the
time
but
It did not lend
took
over
quarters of
a
savings
and
been
three
disposal in the years that followed, the member institutions of
the Bank
to
System had
utilize
the
no
occasion
of
resources
Federal Home Loan Banks
the
as
they
made
when
up
we
try whenever it wishes to distrib¬
obligations. They
command excellent prices, since it
is not easy to think of a safer
or
better investment.
As you know, various
proposals
for adding even greater
to
mem¬
'
design of Homes, the employment
of materials, new loan plans or the
out
lic
have
been
before
Congress.
Despite earnest and persistent ef¬
follow
to
consider
and
I
opportunities
For
myself,
about
These
for
I
here
meet
am
sure
great
not
am
as
the
service.
concerned
possibilities of great
descending upon us in the
after the war if we keep
vague
We
have
the
us.
to
resources
We have the energy and
survive
can
If little
Dunkirk
a
England
and
the
such
an
inspiring
example
of
real
directly affecting the war effort greatness,
power
and
sublime
that it has not been
disposed to spirit; if Russia with all the de¬
take
feats
not
to
to
up
proposals which it did
regard as being of a character
demand immediate attention.
We
are
assured, however, that in
the coming session these desir¬
able changes
affecting the Bank
System will receive the attention
they deserve, and I believe they
will.
'
the
Insurance
end
of
the
Corporation
last
quarter
insured the accounts
stitutions
with
000,000.
of
assets
had
2,440 in¬
of
Corporation,
it
has
made'
such a record that
the prin¬
ciple:'of insurance as applied to
this type of business is
now
es¬
tablished
thoroughly and
complete
that
handicaps she has had
public
stitutions
had
won
confidence.,
confidence
stability of
has
in
our
not
the
the
terrific loss
of life she has sufffered
turn
can
about and win the greatest battle
in
and
by
conscienceless
If
been
estab¬
"whelmed us, we would have
faced
really serious difficulties in this
country.
and
on
come
back;
Hitler-enslaved
public standpoint is
clusively by the record of savings
entrusted to the institutions in
the
coun¬
remorselessly crushed can, as
they have, plan greater things for
their people in the
years ahead;
then
surely
the United
America, which has
world
and
miracle
our
of
establish
States
startled
own
of
the
people by a
has the
production,
ability to meet
any emergency
and
frontiers of achieve¬
ment for the benefit of
mankind
such
as
as
new
have
never
been regarded
possible.
NYSE Advises On Bonuses
With
Stock
reference
New
York
Exchange rules, relative
permissible
tion,
to
the
bases
of
Exchange
to
compensa¬
has
deter¬
mas
or
year
end
bonuses
or
justing payments to their own
Insurance Corpo¬
employees.
The
ration compared
Exchange an¬
With'-similar in-'
that
it
stitutions which have not secured nounces
"expresses
no
such protection for their
opinion in regard to the
savers.
possible
In the period since the
organiza¬ applicability of Federal
regula¬
tion of this
ings aj.id,Loan
Insurance Corporation
j
tions
is, from 1934 to 1942, in¬
clusive, the member institutions
"Any payments
Corporation gained $1,814,000,000 in savings, while those
which
tection
failed
for
to
their
secure
savers
this
persons
$2,-
ber
797,000,000 of assets.
As you
stitutions
know, these insured
are now
in-
continuing their
development at an unheard of
Savings as a whole are
rate.
who
are
or
been
set
"In
with
whom
though there
have
are
this
to
they
full
public
of
turn,
deal,
"I feel
terprise
nation.
at
home
the
by standing
business
as
mean
individual
en¬
in
ment.
We
and
men,
see
terprise.
friends
We
of
have
call
had
of
them/
private
11
of
en¬
years
letting the Government step in
supposedly to right a difficulty
remain
to
run
the
show.
I
conference
heard
for
the
and
that
been
able
certain
as
to
the
of
successive
business
has
strength in
our
operations,
the wartime
econ¬
not
or
policy rests?
Consider
first
the
theory of
monopoly price.
Its current ex¬
planation stops with the conclu¬
sion
mem¬
member firms
making such
j
444
Directory and Guide."
.
production,
will be
some
competitors
forced out, and the
price
will go up.
turn,
However, it
is
there
prices rise,
is that
be asked why
may
decrease
a
in
sales
to which the
some
as
answer
would-be purchasers
prefer the purchase of
something
else.
But
sellers
ties
of
what
those
sustain
There
is
to
but
relation
other
the
one
do
the
commodi¬
monopolist?
answer
to
they
this;
business.
remaining in the
of
This implies a cessation
competition, and the introduc¬
tion
of
a
new
influence under
price can be raised.
This
influence might be called co¬
operation but for the fact that it
manifest itself in the act of
may
a
single individual.
able,
therefore,
fluence
unit
fact, sets
the price of
as he is
Competition,
the upward: limit to
his offering, so
long
pos¬
sible profits.
price,
gards
us
turn
which
business
Now
of
to
current
competitive
theory
a
this
Those
ence
case
in kind
of
a.
cease
unit, be
if they
wish
that
their
so
longer
unit
be
con¬
action
which
to the social
up
is
as
the
same
cost
influ¬
that which, in the
monopoly,
above
tion.
no
as
in¬
who
loss.
this
social
carries
cost
price
of
produc¬
The difference here is one
degree, not of kind.
It
follows,
re-" valid, that
determined by competi¬
tion alone.
Viewing the situation
still from the
standpoint of the
as
will
production
far
of
now
call
action.
competing and act
they one or many,
price to be raised
keeps price
in
It is prefer¬
to;
remain in the business must
control of the
supply of His com¬
modity, is not free from the influ¬
of competition.
leads
to
not exist.
This,
the
good,
The
to
adjust their working relations
so
to utilize the beneficial
pos¬
as
sibilities of each and to eliminate
the evil possibilities.
fact
that
competition
has
not within itself that which
auto¬
matically
its
it to
causes
effects
injurious
are
another
defect
when
cease
of
reveals
our
anti¬
trust policy. Owing to the lack of
such
automatic
working,
trust
inevitably from
there
anti¬
an
policy which seeks its end
by eliminating unit action and
leaving the field open to unre¬
competition, that sellers
facing bankruptcy from such un¬
restricted
competition are forced
in self defense to
adopt what are
upon
anti-social
as
Doubtless, there
in
large
in
the
meas¬
advan¬
are
scale
production
natural
order
of
things tend to develop large in¬
dustries, but this natural trend to
industrial consolidation has been
intensified by an anti-trust
policy
that is open to the charge of cen¬
tering its attention
upon securing
price for purchasers, leav¬
ing sellers to look out for them¬
fair
selves,
ducted at
ence
auto¬
power
problem of properly balancing the
two involves the
problem of how
tive
are his competitors.
If this
true, then it follows that the
monopolist,
though in
absolute
be
seems
contains
Each
has
possibilities of
each has possibilities of evil.
PUT up by those
new
X V:'
It
observation
that neither competition nor
unit
action is,; in itself, good or evil.
Here, again, closer examination
shows that the analysis is inade¬
quate. Price does not GO
up; it is
profit.
-
the
injurious, does
in
a
which
if
every
this
analysis is
market price is
the result of two
opposing influ¬
and, in the last analysis,
confronts them with the alterna¬
of
bankruptcy
consolida¬
or
tion with competitors;
There remain
to
:
be
considered
the interesting question
England has
no
lem
and
as
quiry
ours
such
the
as
to
why
trust
prob¬
further in¬
to what, if anything, we
might learn to our advantage from
as
England's experience.
While the query put to the
lish economist as to whether
land has such
ours
brought
a
a
trust
Eng¬
Eng¬
problem
prompt
reply
as
in
the negative, the further
question
as to why was not so
quickly and
spontaneously answered.
In fact,
the hesitation which followed
sug¬
to me the thought that it
gested
a
matter that he had never
had occasion to consider.
Finally
there came the observation:
was
"Well,
I don't know unless it is that
Eng¬
land is inclined to allow one to do
as he pleases."
Of
course,
that is
not to be taken too
some
literally, for in
respects England is stricter
than
we are
ness
activity.
in the control of busi¬
ences; competition and unit ac¬
To the suggestion that it
might
tion, the former tending to lower, he due to England's common laio
prices. the latter to raise price.
It fol¬ doctrine which does not unquali¬
it tend lows also that a fair
price is not fiedly forbid all restraint of
to give a return that
trade,
equals so¬ to be secured by the operation of hut limits its condemnation
to uncial cost of production?,
The tra- competition
alone, but by a proper
(Continued on page 2333)
or
ma^
ma(*e
I °, y in accordance with the pro- seller, its effect is to lower
Why, it may be asked, does
visions of Rules 443 and
of the
are
which
Policy
that the
monopolist seeks to
discover the point at which
rate
of profit times
volume of sales
will bring him the
maximum total
Let
full-time,
to
tages
(Continued from page 2318)
modity, if absolute, involves the ditional
answer is that if
competi¬
elimination of competition.
tion carries price below social
cost
of
■
power
ures.
What is to be said of the
valid¬
ity of this doctrine of price, a doc¬
trine upon which our
anti-trust
'/
further criticism
a
itself
bank¬
'
.
This automa¬
of competition,
leading
its suspension when its
effects
tic
looked
omy."
Our Anti-Trust
•
stricted
"derive
phases of
result
a
fourth
to
J
anti-trust policy.
follows
year;
if continued
lead
destructive.
comes
still
1942
price,
must
.
matically to cease its working at
the point where its
influence be¬
institutions have the best
liquid¬
ity position in their history, that
they have gained in assets during
we
Govern¬
evidences
loan
is
competition/
imply that competition
H. F. Cellarius,
Cincinnati,
Secretary - Treasurer
of
the
League, that the savings and loan
we
what
on
and
from
on our own feet
bureauocracies which
selves- the
and
ings
sav¬
competition
to
The
The opening session of the
this
what
by dependence
preserve
of
in¬
to
frequently
"competi¬
our
initiative."
crossroads
between
"to
concept
ownership
it
distinction
construction,
American
.
within
be util¬
and
eliminate
of
enter¬
thrift
lowers
This suggests
■' '■,■'
encourage
free
unlimited
ruptcy.
as
home
and
to
protect
and
maintain the spirit and
principle
of free
enterprise and
the
which
So many of those who
ap¬
are not
clear as to the
plaud
to
by
indefinitely,
Green's letter held it to be
determined purpose of the
AFL
to
free field for
a
with the term
if
which
Mr.
the
efforts
leave
no such phenomenon
pos¬
sible, by which is not meant prac¬
tically possible but scientifically
possible,
for
the
competition
that the
can
of,
'
there is
associations
so
balancing
It must suffice here to
say
that
'
private
of
one,
permitted, it would be
meant
incomes," the -President's
message said.
al¬
deeply that private
is
tion,!'
ized to provide American
families
with better homes at a cost
with¬
ex¬
among
agencies
of
to
time
•
appears
these
serve
sound,
prob¬
how to
the
quire into the significance of the
term "free" which so
agencies
;•.
these
resources
in their
such mushroom growth
seen
'
prise and government
consists
few fine
a
rule
to
up
they have in the past
pointed
seeking the largest
gratuities to
bona fide
employees of the
pro¬
lost
governing salaries 'and other
compensation," and adds:
of the
government
have
attitude toward
the
membership of the Federal Sav¬
that
those
arrogant
can
if
mined that members and
member
firms need not
report to, or ob¬
tain
the
approval
of, the Ex¬
change in connection with Christ¬
from the
shown con¬
means
an
savages
fighting with bare hands
carry
strength
said
institutions. '
part
are
remain
interesting and profitable
loan
should cooperate in the future
grave
nation
and
military history; if China, tor¬
tured
financial in¬
lished, you may be sure that when
the disaster of Pearl Harbor
over-
What insurance
and
tries
at
$4,038,Like the Federal
Deposit
Insurance
and
and
overcome,
occupied,
The
take
mean
through which she
us
the
savings
velt
think
the
on
fairness to the
proper
by
.and
If
-
.leadership
encouraging
thrift
home ownership, Mr. Roose¬
and
in the past dozen
years.
fi¬
home ownership and
every¬
else we need in greater
abundance than any country in
the "know how."
the
one
of
program
importance far beyond their de¬
serts," he said.
"Their personnel
nance
terrible ordeal
measures, Congress has
absorbed with legislation
of
multiplicity
heads about
executive
of
one
period
has passed and
give all of
so
League
that
ceptions
our
of
fighting for it."
troubles
forts to advance the consideration
been
on
that
this
the other;
deserve the coopera¬
tion of their government in their
,
* to
will
you
keep
no
still
difficult
a
attained
associations
light to Gov¬
I
for
action;
secure
competition and unit action.
We
may be sure that it will not be
if
about the will to
look
Stating
peace¬
of
the / relations
between
the
agencies of Government in
gen¬
eral and the
people.
:
\
"These agencies have
grown in
the
are
in
housing.
initiative
Federation of Labor.
appli¬
demands
green
lem, '
secure:
reading of messages to the confer¬
ence
of savings and loan execu¬
tives assembled frorp all
over the
country, from President Franklin
D. Roosevelt, and from William
Green, President of the American
will present the
era
will
sellers, to
If these. conclusions
re¬
the
policy
housing
a
problems
prevent
of
these
this
The
The
policies which the lending institu¬
should
is
enough
to
tions
who
the
practical
paralyze
concerned
am
unit
there will
anywhere outside of Washington.",
Mr. Cake's address followed the
this business which has
fostered
home ownership for 112
years be¬
lieves in home
ownership
not going to even suggest
what the changes may be in the
history.
bers, to be of service to the pub¬
same
follow from
of
time.
am
strength
the Bank System and improv¬ thing
ing the opportunities of its
will
of
prolong the emergency by those
deeply entrenched in Government
ownership during the
period. The
sults
cation
How
number
beyond
anything previously known in this
I
which
kind
they remain after the emergency.
I
income
this
the
going to show in detach¬
inevitably
specious
that
under
ernment-owned
realize the dangers as well
ute its debenture
know
are
fairness to the pur¬
secure
sellers.
about
courage our business
ing our economy from wartime
Government controls which must
definite blow to the
program of
small home
war
demand for an enormous
of
houses; far
firm foundation that it has
ready
and immediately responsive access
coun¬
not
a
were
country.:/yv;•
low
most
a
men
know that
using this slogan the
housing officials managed to deal
of
fol¬
troubled
am
war
will be
a
sub
housing program of the past
two years has been
conducted. We
danger of
overdoing the job.
things which you
to the money markets of the
the
is
the post-war
might have done under other cir¬
cumstances.
Today this banking
system has been placed upon such
a
of
This
ulation, but it is clear that there
also purchased the shares of in¬
stitutions to the extent of another
-
shortage
needs
many we can and will build when
this war ends is a matter of spec¬
the United States and placed that
much cash at their disposal.
It
their
the
houses in the United States.
mortgages from the
loan associations of
quarter of a billion dollars.
With a billion dollars at
that
relief
seems
argument.
We
the philosophy
We
ing to
chasers:
of
thinking and
group.
forced this second world
tragedy.
In
1935
we
built
over
937,000
billion dollars worth
defaulted
know
the'
mortgages
building of homes.
homes in this country which
lowed the
1929
panic had
against,
outright,
the
all
Home Own¬
Corporation served thd
of a mortgage reserve in¬
stitution.
$35,000,000,000.
able for investment in
and
never
Loan
purpose
of
in
the national income contin¬
about
to
everybody
is in love with
private housing;
The
most
rabid
public houser
will tell you that
private enter¬
prise should be given the big job.
But there is always this catch. We
should have the job
only up to
the point where we cannot
supply
uing to rise, it is estimated that
the total savings next
year will
reach $45,000,000,000, or 20. times
the low figure of 1933.
A large
part of these savings will be avail¬
Its abil¬
has
In
of greatest crisis the
ers'
is
advantage.
render
really
it
ahd the
serve you
tion to great
ity
and
save
subsidies
"Nowadays it
people
our
With
System faces the problems
of
the
post-war period in the
strongest position in its history.
It is the largest institution of its
in
indicate
will
Bank
kind
figures
balancing,,}of these,' two influences,
competition between sellers tend¬
(Continued from page 2325)
limiting
sidy.
year
bers
Thursday, December 9/1943
leaving the liquidity of too many debt com¬
however
consistent
unreasonable- mitments,
with customary practice and with
nessof the restraint to be deterthe commercial credit theory un¬
mined by legal procedure, the
derlying the new established Fed¬
gentleman was inclined to assent.
eral Reserve System, was solely
At least without committing him¬
dependent' on impending trans¬
self definitely,' he ventured the
actions at the inflated level of
opinion that this might be the ex¬
prices then prevailing; in other
planation of the absence in Eng¬
words, too few concerns took suf¬
land of such a problem as ours.
ficient account of their future
Whether or not this affords a
capacity to retire debt from funds
full and satisfactory explanation
retained from operations in case
of the contrast between the two
short-term
market
expectations
countries in this field, it does re¬
failed to materialize. Lastly, too
veal a very fundamental differ¬
many business creditors and debt¬
ence
in policy which may easily
ors
were
unprepared to make
account for the contrast in experi¬
debt adjustments once financial
ence.
Our law specifically con¬
crisis was at hand; too few of
demns acts'that are "in restraint
them had anticipated the possi¬
of trade or commerce among the
bility of such a crisis, and too few
several States or with foreign na¬
debtors
had
refunded
excess
tions."
England's law, on the
short-term debt in time, or con¬
other hand, as has been said, con¬
verted it into equity.
demns
only
unreasonable
re¬
"In
restraint,
reasonable
*
reasonableness
*
:
*
1
■' or
straint.
*
by
implication, leaves the question
Such
policy as England's,
a
to whether
results in an
as
open
which
combination
in
increase
is to be
which presumably
price in any given case
"condemned,
would
-
sion
be
as
2333
& financial chronicle
the commercial
Number 4236
.Volume 158
to
determined by a deciwhether the increase
greater than is necessary to
insure fairness. In other words, it
was
brief, businessmen, bankers,
and public officials had
simply
raised their sights on the future
high and in so doing had over¬
looked immediate realities."
The
study from which these
too
findings are taken was
Charles H. Schmidt and
made by
Ralph A.
the National
Bureau's
Young, of
Financial
Research Staff and the
faculty of the Wharton School of
Commerce
andv Finance of the
PRIMARY MARKETS IN
(Continued from page 2316)
ceeding, the City reduced this as¬
sessment by $500,000 to $8,075,000
in which they value the land at
$4,100,000
$3,975,000.
building
the
and
STOCKS
INSURANCE
at
■:
Huff, Geyer & Hecht
this $1,823,210 wiuh
appraisal of the property in
Compare
the
issues were sold to
that
was
PRIVATE
ST.
Boston
5
Street
10
Post
135
Square
S.
0650
WIRE
CG-105
SYSTEM
LOUIS,
LOS
CONNECTING:
ANGELES,
NEW
HARTFORD,
Enterprise
<»011
PROVIDENCE,
BOSTON,
YORK,
CHICAGO.
SEATTLE
AND
FRANCISCO
SAN
TELEPHONES
White.
Chicago 3
La Salle Street
FRanklln 7535
9
Office
HUBbard
3-0782
1-2875
NY
ap¬
praised at $1.6,079,736—the land
at $4,900,0.00 by George R. Read
& Co. and the building at $11,179,736 by McKim, Mead &
York
Wall
WHitehall
the public. At
property
the
time
bond
original
the
when
1925,
New
67
TO
PORTLAND,
Enterprise
Enterprise
7008
7008
Compare this $1,823,210 with
the 1925 financing of the property.
First mortgage
bonds sold to the
Bank and Insurance Slocks
public were $9,500,000 and second
mortgage bonds were $3,000,000—
a
total funded debt of $12,500,C00,
and
scheme.
This Week—Insurance Stocks
was no unloading
August
Heckshire had
this
paid
$14,000,000. for the
property. You will note that the
junior, subordinate loan at that
time was
more
than one-third,
By E. A. VAN DEUSEN
just
greater than the current market
value placed for the entire prop¬
erty
by the present price of
bonds.
the
first mortgage
comparison
$1,823,210 is
that the income of this property
Another interesting
with
this
value
of
Two weeks ago
this column stated that "fire insurance .is still a
growth industry." It is well known, however, that an industry or a
company can manifest growth over a period of years, as measured by
capital funds and gross sales, yet at the same time exhibit a definite
downward trend in net earnings, and eventually in dividends. This
week
we
that the'fire insurance industry exhibits a
propose to show
growth trend in net earnings and^
dividends,
as
well
as
capital studied, covering the period 1925
in
funds and volume of business.
The records of a group
of thirty
to
1942, and certain pertinent fig¬
for significant years in the
period are presented in the ac¬
ures
plainly recognizes, by implication, University of .Pennsylvania. It is
representative stock fire insurance
in the years 1925
that a fair price is one that is fair
jto 1932 inclu¬ companies have therefore been companying tabulation:
one of several in preparation by
".to both producers and consumers the National Bureau's Financial sive, averaged close to $2,000,000
Total Net
a
and that law should not concern Research
year
and in 1930-31-32 ex¬
Divi¬
Net Premiums
Program that deal with
Operating
Liquidating
Capital &
> '
'r
Profits
Written
dends
Value
itself with fairness to consumers effects of the war upon our fin¬ ceeded this figure. During these
Surplus
($0007
($000)
($000)
($000)
latter three years the
($000)
property Year—
alone leaving producers to take ancial
system. Funds for financing
416,190
21,860
505,394
26,837/
1925-.:
357,948
scare of themselves, with no other
it
were
made
available by a was assessed at $11,300,000.
22,873
536,323
32,358
430,425
1926
382,537
defense against cut-throat compe¬
26,147
Should inflation or a post-war 1927__
422,947
52,116
623,932
468,694
special
grant to
the National
34,911
842,905
427,160
71,605
tition except consolidation.
' Bureau by the Carnegie Corpora¬ shipping boom in the City of New 1929—— 684,885
28,471
26,495
510,899
303,646
1932
384,326
Three conclusions seem to fol¬ tion of New York.
York
cause
rental
values
of
36,171
399,089
58,671
395,868
755,759
1940
low from the foregoing analysis:
downtown office space to go back 1941
456,784
37,491
58,532
862,299
707,497
36,431
501,521
41,375
First: An anti-trust policy which
886,467
732,644
to
the
rentals
of those three 1942—
; seeks to secure fair prices through
years, you would have a situation
It will be noted that in 1942
the working of competition alone
of the annual rental of this build¬
capital and surplus, liquidating
.is bound to fail, and that for two
ing exceeding the value the cur¬
value, net premiums written and
Chemical
reasons:
competition, which has
rent market of the bonds places
dividends not only were higher
both good and evil possibilities,
ST. LOUIS, MO.—The invest¬ on the entire property.
than at the start of the period in
Bank and Trust
.does not contain within itself that ment firm of Dempsey-Tegeler
Personally the writer feels that 1925, but were also higher than
/which will automatically suspend Co.
is this
year
observing the such a supposition is being over- in the peak year of 1929. Net
its working when its effects be¬ tenth anniversary of its founding
optimistic indeed, but by the same operating profits, however, were
come
evil; and, in the second with the publication of a booklet
category he feels that the current not up to the 1929 peak, but they
Bulletin on Request
place, free competition, - in the entitled "The First Ten Years."
market of these bonds indicates were substantially above those of
sense of unlimited competition, is
Harking back to 1933, an event¬ just as an exaggerated degree of 1925 and 1926, despite heavy warimpossible;
ful and hardly a good year to pessimism.
marine losses in 1942. In order to
Laird, Bissell & Meeds
Second:
An
anti-trust policy launch a new investment banking
Members New York Stock
Exohange
The bonds are secured by a first indicate the trend somewhat more
which concerns itself only with
firm, the booklet reminds,us that mortgage on,land owned in fee clearly, and at the same tirpe to
120 BROADWAY, NEW YORK 5, N. Y.
securing fairness to the consumer, we were in the midst of Ameri¬
Telephone: BArclay 7-3500
at
the northwesterly
corner of avoid the use of any single year
'leaving the producer to look out ca's worst and longest dperession;
Bell Teletype—NY 1-1248-49
Broadway and Exchange Alley, as a base from which to measure,
for himself, is doomed to failure, of
[L. A. Glbbs, Manager Trading Department)
the
first
inauguration
of one block south of Wall Street, the following additional figures
because the time comes when the Franklin
Delano
Roosevelt
as
New
York
City, together with are presented, in which the aver¬
only alternatives left to the pro¬ President of the United States;
with the averages of
the 33-story office building stand¬ ages of the three years 1925, 1926 ures and
ducer are bankruptcy or consoli¬ the nationwide bank moratorium;
ing thereon. The plot fronts 105.1 and 1927 are used as a base and 1940, 1941 and 1942. In this way
dation; and
,
■
Chicago's Century of Progress; feet on Broadway, 202.2 feet on are designated 100. They are then the effect of a non-typical year
•Third: The effort to secure a and in Europe, 1933 began a dec¬
is modified.
Exchange Alley and 110.9 feet on compared with 1929 and 1932 fig.fair price by,any automatic social ade of strife and turmoil.
Total Net
Net
Trinity Place, comprising an area
Divi¬
Premiums
Operating
.machinery, be it free competition
Liquidating
T. F. Dempsey and J. F. TegeCapital &
of about 22,180 square feet. The
dends
Profits
Written
Value
Surplus
Year—
or any other, cannot succeed. Fair
100
ler, founders of the firm, were building contains a net area of
100
100
100
100
1925 to 1927 (Av.)——
143
193
price in a voluntary economic sys¬ both formerly associated with the about 451,000 square feet. It is 1929
101
152
170
112
77
72
tem (usually called an individual¬ Mercantile-Commerce Co. and its
92
95
serviced by 24 high speed eleva¬ 1932155
143
107
159
182
istic or capitalistic system) can be predecessor
in St. Louis. They tors and also contains an inde¬ 1940 to 1942 (Av.) ■<
secured only when such brakes started their firm in a one-room
This
table
brings
out
quite operating profits of the thirty
pendent electric plant. It has its
are provided for both competition
office at 407
North Eighth St. own entrance • through the base¬
sharply the marked growth trend companies. The year 1925 was one
and unit action as will prevent with personnel of one salesman.
ment to the Wall Street Station over the period of all items, with of rather heavy fire losses, but the
unreasonable restraint of trade Today, they are still at the same
of the East Side. Subway.
the
exception of net premiums years 1926 and 1927 were profit¬
and permit reasonable restraint of address, but are in their sixth
able underwriting years. Total net
Originally reorganized in 1936, written. The latter show only a
trade.
"
expansion of quarters and employ the
Company/ again
defaulted moderate trend, as a result of the operating profits for these three
more than thirty people.
April 1, 1942 and is currently be¬ 30% reduction in average prem¬ years, including net investment in¬
Since its. inception, Dempseycome,
averaged $37,104,000, #and
ing operated by Harry Forsyth, ium rates which has developed
are designated
Tegeler & Co., has specialized in
100. The year by
Esq., Trustee under Federal Court since 1925.
underwriting and distributnig in¬
year record for the entire period
appointment in bankruptcy. This
It is now of interest to examine
stitutional securities of various
last default was attributable in a little more closely the total net is as follows:
100
religious denominations.
During a large part to the failure of the
1925-1927 (Av.)
(Continued from page 2330)
171
1928
the ten year period, the firm has
North German Lloyd Line to pay
193
1929_
financial
prudence, could have underwritten an average of two
122
rent of $110,000 per annum after
1930
altered the result.
loans per month aggregating the
126
1931
July 15, 1941. Their lease for the
77
1932principal sum in excess of $50,- store and second floor still had
Financial Overextensions Wide¬
147
1933
000,000 on institutional, commer¬ about nine years to run. The rent
158
1934
spread in Manufacturing
cial
and
residential
properties roll of the
183
1935
And Trade
building has increased
:
GREENVILLE, S. C.—J. Robert
1936
throughout the United States.
over $150,000
since the Trustee's
167
"Unfortunately," the National
1937
Lindsay and John O. Dysart will
On Dec. 18, 1941, the firm was
141
appointment and he still has this form J. Robert Lindsay & Co.
1938
Bureau says of the 1921 experi¬ admitted as a member of the New
151
1939
North German Lloyd space left
with offices in the Franklin Na¬
ence,
"business departures from York Stock Exchange. On March
158
1940
to rent in addition to some other
158
tional Life Building as of Dec. 16.
1941
prudence in commitments to buy 14, 1942, became members of the
vacant space.
112
1942
and sell, in inventory holdings, St. Louis
The new firm will be members of
Stock Exchange, and
1940-1942 (AV.)
Whether or not the building the New York Stock Exchange,
and in short-term business debt associate members
of the New
It is not particularly signifi¬
had gone too far in too many York Curb Exchange on April 7, will even be able to collect the Mr. Lindsay acquiring the mem¬
some $900,000 which will be due
cant that the 1929 peak year has
cases.
Furthermore, the partici¬ 1943.
bership of Fairman R. Dick.
:
v,
on this lease, only the future can
not since been surpassed, but it is
pation of manufacturing and trade
-
0
_
_
__
—_
Dempsey-Tegeler Co,
Celebrating 10th Year
Company
.
-
'
.
Effect Of War On
Business Financing
—
—
R,
Lindsay I Co. To
-
.
___
■
_—
■■
__
_
_
—
___
__
_
__
—
—
in
.concerns
cesses
of
the
the
tell.
speculative ex¬
period
was
wide¬
Good Return
Plus-Safety
Any
1950
for
rent
this
received
before
and
second
store
Greenfield V.-P. of Fewel
floor would have to be credited
LOS ANGELES, CALIF.—Roy
certain industries—of From Insured Investment
rubagainst the final amount that the S. Greenfield has been appointed
The Oak Park Federal Savings
-ber, paper, retailing and whole¬
of Fewel & Co..
North German Lloyd Line would vice-president
453 South Spring Street, members
saling were outstanding examples & Loan Association, 104 North
eventually owe the building. But,
Marion St.,
Oak Park, 111., will
—financial
overextensions were
of
the Los Angeles Stock Ex¬
if by some lucky chance some of
be pleased to send upon request a
numerous and conspicuous.
change. Mr. Greenfield will con¬
booklet giving full details on the this money could be recovered, tinue to make his headquarters
"Orders for goods were too often
desirability
of insured Federal it would certainly be a windfall in the firm's Beverly Hills office,
placed and accepted with a reck¬
Savings & Loan investments. Cur¬
of which he is manager.
less disregard for the responsibil¬
for the bondholders.
rent dividend rate 3%.
ities
.involved.
The. - ultimate
spread;
which
in
automobiles, textiles,
significant that the trend of earn¬
ings since the 1932 "slough of de¬
spond" has moved steadily up¬
subsequent
ward and that in every
earnings have been greatly
above the
1925-1927 level, even
year
including 1942 with its
submarine
losses.
The
business
and profits
of fire
insurance are
affected by
(Continued on page 2337)
2334
THE COMMERCIAL & FINANCIAL CHRONICLE
Limitation Rule
'
"
states
general economic con"The term 'profit,
cept of profits is that it is a the late Professor J. S. Nichol¬
differential. This means that son^' of Edinburg University,
profits are not uniform or "includes classes of income
fixed, that, in some cases they that differ widely in charac¬
up" on cotton
fur coats and even¬
as on
be positive and in other ter: it includes interest on
negative quantities. In loanable capital and interest
a
competitive market each on capital not loanable with a
individual
trader, producer great variety of sub-species;
it includes what is called com¬
or dealer is subject to varia¬
tions in gross profit margins pensation for risk, which may
and out returns, because each mean anything between a suf¬ chases
and
sales
can
be
has
different
costs, under¬ ficient inducement to gamble counted upon as
coming in
takes
different
degrees of and a private mercantile in¬ such close proximity as to
risk, and performs different surance, and it includes earn¬ time, that a reasonable ex¬
ings of management of cap¬ pectation of profit can be
degrees of services.
There is no predetermined ital, by the owner and the counted upon, but even in
in large and in these
or
"fixed" rate of profit un¬ borrower
commodities, because of
der economic laws as there small business, and in busi¬ small profit margins, a
sys¬
ness of endless character.—It
tem of hedging is
may be a fixed rate of wages
required to
is well observed by Adam insure
or a common rate of interest.
against heavy losses.
Individual profits vary not Smith that from, the very na¬
That
the
security dealer
ture of profits of stock it is
only from day to day, and
plays an important role in
from place to place, but may much more difficult even than promoting price
stability for
with wages to obtain an aver¬ the
change suddenly from less
property with which he
than nothing to high amounts. age for the whole of a great deals cannot be denied. Un¬
And there is hardly such a country at any time—with the like the broker, he acts not
of
industry merely as an intermediary
thing as a "riskless transac¬ development
may
cases
—
tion"
in
business
a
which
in
it
of
function
trader to
the
is
the
assume
ownership.
economy
peculiar
dealer
or
since the time of Adam Smith
these
have
difficulties
in¬
creased."^
No
the risks of
ever
refuted these assertions. To
,
As the late President Had-
attempt to fix "a reasonable
ley of Yale University, in his
profit margin" for all en¬
gaged in the same trade or
industry,
without taking
treatise
on
Economics has
so
aptly pointed out, "A large
into consideration the dis- '
speculative element is involv¬
ed in trade of every kind. The
parities in costs, risks, mer¬
chandise
turnover
and
trader seeks to buy articles at
other marketing factors is
as low a price as he can and
like trying to fit every man
to sell at a higher price.
He
in a community with the
may do this either by buying
same size suit of clothes or |
them in a market where they
are cheap and
pairs of shoes.
selling them in
a market that is dearer; or
The merchandising of se¬
by
buying them when they are curities does not differ essen¬
cheap and selling them when tially from other fields of
they»-are dearer. The un¬ merchandising. In the case of
certainty attaching to the securities having an active
amount of such profit makes and broad
market, the margin
the operation a speculative of
gross profit will be rela¬
one."
in
exchange transaction,
an
but
as
tank.
has
economist
This
certainly can be applied tion of bureaucratic domina¬
classes of securities. tion of private business, ren¬
ing gowns.
Neither can a The relative positions of buy¬ dering it helpless in a straight
dealer in any line of mer¬ ers and sellers in
effecting an jacket, continuously changed
chandising, tell definitely at exchange need not be known and tightened by rules, ord¬
any instance what price he is to each other, and each seeks ers, classifications and all the
to obtain for his
goods. Pur¬ to ascertain what is the high¬ other machinery of arbitrary
chases are ordinarily made est or lowest
price, as the control and supervision.
before sales, and a sales
price case may be, the other will
The
security dealer, be¬
may be asked but never re¬ bargain for. Now this "mar¬ cause of the nature of the
ceived. The margin between ket
higgling" (as economists property which he handles,
bid and asked is constantly call it) would cease, if
buy¬ assumes a greater risk of
changing. It is only in stand¬ ers and sellers (as the Com¬
ownership than dealers in
ard commodities
would
be commodities. He does not
having very mission desires)
buy
wide markets, such as wheat,
compelled to make known and sell a product which has a
cotton and the like, that
pur¬ their position to each other. relative stable cost of
produc¬
cloth
(Continued from first page)
The
"write
same
Economic Fallacies Of IfASD's Profit
Thursday, December 9, 1943
a
He
temporary storage
is like a reservoir,
taking in supplies that have
no
other
and
immediate
then
outlet,
later
to many
Hence, there would be
of
truction
basis
the
a
des¬ tion,
fundamental
for
establishing stabil¬
ity in exchange value. It is
only
in
commodities
and
goods in which there are at
all times many buyers and
many sellers that the effects
of the relative position of the
parties involved are "ironed
out" and
become equalized
through the '' operations of
averages applied to' the law
of large numbers. Because a
security dealer occupies a
position midway between the
buyer and seller, and is or¬
dinarily neither forced to buy
or forced to
sell, he is, in real¬
ity a factor in the equalization
of the position of the parties
to the transaction, and assists
in
listed
on
the New York Stock
Exchange, 'have
been
nished
and
a
better
more
stable market
through dealer
Consequently, few of
this class of securities, though
listed are bought and sold on
the floor of the exchange. The
trades.
same
of
holds
some
true
in; the
classes
of
A matter which the NASD
case
bonds.
or
ten
in
scarce
the
same
his
own
prices.
make eight made for him.
percent upon a stock security
of ten thousand,"
dealer.
They
So
A
with
are
the
depart¬
ment store does not make the
or
His
upon
steadi¬
a
market
elasticity of demand.
may
be taken
from him almost over
night—(as witness the stock
away
market
crises
of
Moreover, he has
of
the factors
the
past).
control
no
which
fix
the
value of the merchandise
handles.
he
He cannot make his
market," even if he con¬
the. effective supply of
own
trols
that
which
risks
than
he
that
and
deals
of
with
His
greater
manufacturers
merchandisers
sumer
in.
therefore
are
of
con¬
goods. He is concerned
"capital
goods,"
the
value
which
of
depends,
among other things, on future
income.
In other words, he
must exercise
gains, without
a
floor against
a
losses.
ins
Probably
trous
the
effect
dealer
of
most
proposed
limitation will
profit
market in
disas¬
the
be the elimination of
a
dealer
inactive se¬
curities, and thus injure many
many
holders of this class of invest¬
Should
ments.
any
dealer
margin too small to
find the
offset
of
to
the
risks
handling
ties,
can any
make
and
worries
inactive securi¬
rule compel him
market for them?
a
This condition would
possible
result in the concentration of
inactive
security dealings in
of so few special¬
ists as to seriously limit com¬
petition and create a sort of
monopolized
market.
It
would, moreover, greatly in¬
the
hands
crease
as
the number of brokers
compared
with
dealers.
Brokers do not make
*
merchant
ness
Moreover,
he
personal skill
ation in its "profit limitation" and
foresight, which requires
rule, is the disparities in the years of experience and busi¬
size of transactions.
It is an ness
training. With these con¬
ageold recognized principle siderations, it is difficult to
of trade
that
where
large see on what economic, or po¬
quantities are involved, the litical, or moral basis, a ceil¬
profit margin should be small¬ ing shall be placed on his
.
sale
can
competitive.
fur¬ neglects to take into consider¬
,
place will
may be
he count
distributing
serving both, by stabilizing
supplies into orderly prices. This is illustrated by deals in
futures—i. e. uncer¬
marketing channels. In this the function of the "floor tainties, which must be dis¬
on
the
stock 'ex¬
respect, he may perform the trader"
counted in the risks he takes.
service better than the "open
change. It is he who absorbs He has little opportunities for
market" or the organized ex¬ the overflow when
selling is hedging his transactions, and
change, with its trading floor. forced or excessive and who he must
supply large amounts
Experience has shown that supplies the dificiencies when of
capital in relation to his
bank and insurance company buyers
are
more
plentiful rate of "turn over" and
prof¬
shares, which were formerly than sellers.
its.
His business is highly
these
er than in the case of small
tively small and still afford
The first great writer on opportunities for reasonable These are now almost uni¬ quantities.
On what basis
bought
and
sold would the NASD distinguish
economics, Adam Smith, call¬ and even high compensations versally
dealers acting as between wholesale and retail
ed attention more than a cen¬ to dealers.
But with securi¬ through
tury and a half ago to the ties, little known, of limited "specialists," and judging by transactions? Security quota¬
the
margins
of "bid
and tions do not ordinarily desig¬
diversity of costs and risks quantity and that come upon
asked"
quotations, there, is nate differences in prices on
the market infrequently,
among dealers. He wrote in
a
his "W e a 11 h of Nations" much larger margin would be little ground,: for complaint a quantity basis, yet dealers
that a fair and equitable mar¬ in
(Book I, chap. X) : "The whole required and still make deal¬
large lots are entitled to
ket is not furnished investors wholesale
drugs which the best em¬ ings in them precarious to
prices and quantity
for these classes of securities.
discounts, and "odd lots," par¬
ployed apothecary in a large the traders. Because., in the
market town will sell in a case of such securities, the It was even noted by Gover¬ ticularly in the case of inac¬
nor
Hughes' Committee on tive securities are logically
year may not perhaps cost dealers, in addition to bearing
him above thirty or
the risks of market changes Speculation, as far back as bought by dealers at lower
forty
pounds.
Though he should —which may be more drastic, 1909, "that the practice of prices and sold at higher
sell them, therefore, for three there are the expenses and specialists in buying and sell¬ prices than "round lots." The
or four
hundred, or at a 1,000 delays in finding buyers; the ing for their own account spread between "bid and ask¬
often serves to create a mar¬ ed" is
percent profit, this may fre¬ relatively greater overhead
expected, therefore, to
ket
where
otherwise
one
be greater when small quan¬
quently be no more than the charges; the slower "turn¬
reasonable Wages of his labor over," and other worries and would not exist."
tities are dealt in on a retail
;
Manifestly, what the NASD basis, and the spread may
charged in the only way in costs.
has in mind in issuing a profit also be larger when securities
which he can charge them,
These vary in
time and
limitation rule, is that the are
upon the price of the drugs. place.
bought at wholesale and
They vary with the
The greater part of the appar¬ size and
resold on a retail basis. These
scope of the firm. The public in purchasing or sell¬
ent profit is real
wages dis¬ corner grocer certainly does ing securities should receive complications would require
guised in the garb of profit. not attempt to add to the cost "fair market values." The considerable "ironing out" by
In a small seaport town a of each item in his
courts have time and again any set of regulations which
stock, a
stressed the fact that although may be imposed by a govern¬
little grocer will make forty fixed
percentage to arrive at
or
fifty percent upon a stock a sale price, and when he "fair market value" for real mental organization which at¬
estate and similar property is tempts to
of a single hundred
set up rules on
pounds, must meet the competition of
"what a willing buyer would "profit margins" and "quota¬
while a considerable whole¬ other
dealers, he cannot make
•
.
which a market
based. Neither
upon
price
bilize
market.
nor
sta¬
At
best,
brokers depend upon dealers
to effect their transactions,
a
and when dealers
brokers
are
few and
the market
pay to a willing seller," the tions" applicable to any and is narrowed.
There is, then,
means
of
ascertaining this all dealings, whatever may be little opportunity to "shop
condition in individual trans¬
their
actions
mean
are
rarely
present.
variety.
a
All this would around"
ruthless intensifica-
i
trades.
are
to
many
make
the
best
Under this. situation,
Volume
Number 4236
158
THE COMMERCIAL & FINANCIAL CHRONICLE
investors,
particularly those
holdings, will suffer
.for want of an adequate mar¬
ket to dispose of their prop¬
SEG
of small
The
CHRONICLE
comments
invites
Because
should
be
addressed
to,
Company
Commercial and Financial Chron¬
8,
Landon Advises Caution
On Moscow Pact
(Continued from first page)
outside of the military arrange¬
ments," Mr. Landon said there
no
agreed
ment
that
assurance
with
the
Russia
nonaggrandizeof the Atlantic
principles
the
Soviet
gov¬
party should not "accept respon¬
sibility for a probable disillusion¬
.
.
that when the
so
.
the
comes
He
tation
Republican
up
In
aid
of
Other
the
on
this
party
work
"real
he
Democrats."
the
highlights-
the. United
Press reported from Mr. Landon's
speech are:
"Regardless of the causes that
decree
in the
25
subject.
The
prosperity; For
of
ideas
the
that
names
not
for
paid,
interest
tax
in
as
cumula¬
be
can
purposes
the
de¬
if
even
Third
case
are
bonds.
tax
dends
credit
on
does
keeping pur standard of
living the highest in the world and
for
as
is
be
can
received
paid only
duction
stocks
credit
;
>
disadvantage
preferred
"The greatest problem of allforeign or domestic—is how can
we enjoy the benefits of mass
pro¬
>
corporate
compared to
that an 85%
taken
divi¬
on
(with income tax
the
balance)
which
not apply to interest.
Recent Instances
Recently,
dividual
natural resources.
arising
must
pre¬
that opportunity for. the in?
as
it must conserve its
answer because
the little fellow has taken a tre¬
mendous
beating under the
pres¬
: "•
ent administration.
,"Government should be setting
the example of the spirit of Amer¬
ica
which
people.;
we
-
is
If
the
spirit of
don't
•
a
free
work
won't; be long
self-governing.
"i have no fear
<.
together
either free 'or
J
•'*
of post-war un¬
employment if business is relieved
of the constant
Roosevelt
sound
Nonmilitary
should
be
uncertainty of the
administration,
fiscal
policy
is
must
be
made
a
adopted.
expenses
cuL'25%;
and
and
can
The
Repub¬
lican drive for frugality and
omy
knowm
The New Deal
has not found the
econ¬
effective
legislation.
by
•..
^
>
"Furthermore, in view of the
administration's record of irregu¬
lar short cuts, and
by-passing or
ignoring the clear intent of Con¬
gress, who can trust it?"
the
TACOMA,
Coen
WASH.—Harry
is
A.!
.engaging in a securities
from, offices
at
1106
North Prospect Street.
business
,
reason.
financial
Thus
it
straits
appears
as
that
advantages in¬
herent in the plan itself.
■
The
things being equal, the
saving at the total rate of Fed¬
eral
income
taxes
paid
and
last
excess
profits
would
year
be
$140,000 annually, comparing the
equivalent
advantageous
extended
were
by
and
use
whose
to
stock.
;
; V
Last
Company
A
are
in
80%
from
tax
the
$900,000 net income of Company
A, referred to above, leaves $180,000 for the common, while in the
case of
Company B the total Fed¬
eral
taxes
lated
of
$800,000
and
on
original
deducted
income
calcu¬
are
from
the
of
$1,000,000 so
that $200,000 remains, from which
comes
the
$100,000
preferred
stock dividend, leaving a final net
for the
of
common
$100,000—$80,-
000 less.
Railroad
Stockholders
Armour & Co. (of
Delaware)
offered
cumulative
1978,
in
income
$35,000,000
debenture 7s,
exchange
amount of its
for
like
a
$52,358,100 cumula¬
proportion
greater.
and
B
of
senior
Thus,
the
capital
instances
if in
senior
The
to
tendency
become
Becoming
for stockholders
bondholders
from reorganizations)
ed
in
another
000
in
the
securities
of
case
and
$160,000
80%
direction, also im¬
by
tax
considerations.
railroads have guaranteed
dividends on the stocks of leased
Many
line
companies, but
as taxes be¬
burdensome and the liabil¬
came
ity
for
their
payment
controversial
found
the
in
issue,
the
a
became
solution
A
in
the
the
Profits
further
plan of exchanging
company's stock for
mortgage bonds of the operating
road, usually secured by a divi¬
on the properties hith¬
operated under lease.
The
question
connection
forts
to
raised
in
Government
ef¬
was
with
collect back
taxes
junction because of the
tion.
tax,
of
Tax
the
Feature
the
Interstate
Commerce Commission approved
such a plan for New York Central
the New York & Harlem stock
on
provision which gives
optional base for the excess
profits tax. As long as this con¬
force
preferred and
minority
stockhold¬
common
would be offered fixed
ing
latest
instance
is
that
of
Corpora¬
tion, which plans an unusual type
ofrefunding of its outstanding 6%
preferred stock. This corporation
registered with the SEC on Oct.
30, $6,737,300
4%
cumulative
income
debentures, 1973, and 134,746
shares of
holders of the
$39
stock.
common
dividend
preferred,
Present
on
which
have
arrears
ac¬
cumulated,' will be offered the
right to exchange each share for
$100 principal amount of deben¬
tures
and
stock.
two
shares
If holders of
of
common
57,250 shares
of preferred accept the
offer, the
will the issue 208,446 ad¬
company
ditional shares of
to
be
offered to
stockholders
$5,500,000
will
common
present
1
a
for
senior
stock,
common
3
which,
the
be
sale
used
with
of
the
a
banking syndi¬
unsubscribed
tion, $15,517,700, at
6.32%.
is
on
payable
the
110
the
new
yield
debentures
onJ ah1 income
cumulative
basis,
feature providing
protection
analogous
preferred stock.
the
to
por¬
;
Interest
that
to
A
of
sinking
the
years.
Debenture net income
fined to mean
ings
after
income
to, retire
the
and
accrued
and
all
was
the
This
procedure disposes of the
Federal income tax question and
gives the lessor company's stock¬
holders a mortgage status and as¬
surance of regular income in most
least
at
large
as
as
deductions
excess
interest
de¬
arrangement, with the
operating
road
by
benefitting
lowered
fixed
charges
and/or
.
taxes.
The
divisional bonds
in
the
Portland
ference
if
between
on
debt of the company or
subsidiary
any
nois)
On
to Armour
its subsidiaries.
or
a
(Illi¬
comparable amount of in¬
debentures
Armour
&
Co.
stock,
out-
standing $7,100,000 fixed interest
in
it
amount
amount
make
can
the
interest and
the
on
capital, the advantage is obvious.
Increasing the proportion of in¬
also
avialable for
larger funds are
available to be plowed back into
the
business, if it is considered
advisable, instead of being paid
out
as
Of
dividends.
long
the
course,
advantages
from
accrue
ditions
as a
present
result of war
tax
con¬
highly probable that the
practice of deducting interest be¬
fore computing taxes will be re¬
The lower the rate of
cor¬
porate tax, obviously, the less the
advantage.
Moreover,
the income deben¬
inherently the fun¬
damental advantage that" if a cor¬
contains
a
ruptcy. In this respect the income
interest
can
be
arrears
accumulate
and
paid off when conditions
improve, without the necessity of
reorganization consequent upon
failure
to
meet
the
terms
of
a
interest-bearing bond, as
long as the principal can be met
at maturity.
Thus
it
is
that
income
bonds
they represent the employment of
such issues by solvent companies
lies
in
in
chief
the
fact that
interest
is
a
charge prior to taxes and can be
illustrated in a simple comparison.
were
stances above cited
Principal Advantage
The
actual problem has yet
Pennsylvania, Reading
the
for the
move
able
Southern
rental
is
It
may
similarly
elimination
of tax¬
payments.
also
interesting to note
tendency is at variance
the
objectives of another
that this
with
division
of
the
Government, the
SEC, which, doubtless quite
cor¬
rectly, in general favors a larger
proportion of corporate financing
through
equities
than
through
debt obligations.
Conclusion
The two recent issuances of in¬
debentures
come
cerns
and the
railroads
to
by going con¬
tendency for solvent
exchange
bonds
for
guaranteed or leased line stocks
indicate the pressure exerted by
Federal tax laws on the forms of
corporate financing,
period of lean
advantage to a corp¬
oration issuing income debenture
be
and
no
It is true that income-type ob¬
ligations avoid some of the typical
bond
disadvantages in case of
earnings the resultant inability
inability to meet interest pay¬
to meet payments does not ipse
ments, as well as providing tax
facto raise the spectre of bank¬
advantages. And it is also true
poration suffers
previously employed princi¬
pally to reduce fixed charges in
reorganization.
The
recent
in¬
would
176,000.
its
the
hardly remain for
the advent of peace,
$1,-
'
though
but it is
ture
of
will
after
tained.
stock
arisen
stock
common
that
means
fixed
with preferred
stock, the tax saving annually to
come
the
pays
except
-inter-company debt, 'and in¬
terest
Central has offered
it
corporation
the
invested capi¬
ulative preferred stock in that the
debentures
Maine
exchange for
& Ogagrees to transfer densburg leased line, also approved
one-half of the interest it pays
by the ICC, and the Delaware,
annually to its earnings before Lackawanna
&
Western
has
a
taxes. Considering the usual dif¬ similar
program under way. Al¬
base
its
debenture is analogous to a cum¬
profits taxes,
on
under
the former
a
earn¬
consolidated
basis,
proceeds
common
debenture 5%s of 1948.
$1,000,000 annually is con¬
tingent on earnings, but a $6,900,000 reserve was set up to antici¬
pate interest and sinking fund
requirements for the first two
debentures
maximum interest rate of
a
4%-%-i
from
on
(June 7)
sold
inter-
mortgage bonds giv¬
same return
as
existing
dividends.
cases
advantage lies in the
an
in
situa¬
tax
Recently
et divisional
had
40%
case
in the
of Delaware, Lackawanna &
Western leased line stocks, where
dividends were held up by in¬
case
ers
war-time
provisions
cate
a
was
lessor
is
tax.
Excess
which
Later
(aside
is witness¬
pelled
A
been $4,000,000 instead of
$2,000,000, the advantage would be $80,-
tive
7%
preferred stock which
guaranteed by Armour & Co.
Illinois, the parent company.
ca¬
Bondholders
under which the latter's
The advantage is greater as the
come
■
.
summer
more
corporations
solidity
earning
pacity would warrant it.
erto
issue of preferred
fund of
Certain-teed * Products
with
1
from
this action must be taken because
of certain specific
and
Coen In Tacoma
these
sional lien
of
■ •
however, two wellcorporations
have
em¬
ployed the principle without re¬
organization : or
any
necessity
Government
enture
general
maximum
was
the
equality of opportunity for the in¬
Other
tax
an
A
;
dividual.
of
case
companies
tal
amount of income debentures with
holders of bonds
swift and disastrous.
serve
Financing Methods
income
ex¬
preserve
of
funded debt in
Avenue and Hudson & Manhattan
next.; Uncertainty rules. The
penalties on producers of all kinds,
time
view
$1,000,000.
interested
are
paid unless earned.
In
features it would not be
surpris¬
ing if the use of the income deb¬
the class that is subject to excess
profits
taxes.
Deducting
the
of those submitting comments
utility operating
Apparently
income
ducted
ambitious President will
same
some
companies.
no one can be sure
especially in these days ''of
panded government power,
of
case
tive
do
the
other
(Continued from page 2311)
confusion
destroyed the stability of gov¬
ernment, so essential to national
at
invites
Congress who
Tax Factors Influence
administration) also has
a
our
"Chronicle"
for the provision that it need not
be
corporation is
allowed to include one-half of its
has
what
The
pattern
nesses.
"It (the
the
tinues
for the American system of a mul¬
titude of little independent busi¬
created
omitted.
were
requested.
Communications should
addressed to Editor, Commercial & Financial
Chronicle,
Spruce Street 8, N. Y.
/
be
wrong.
.They seized the op¬
portunity to substitute the totali¬
foreign
a
In
will be omitted where
replaced them v/ith those who
thought the capitalistic system
a
measure*will want to read the article on the outside
of this issue by Dr. A. M.
Sakolski, entitled,
cover
"Chronicle" and to members of
it
was
of
profit limi¬
a
giving their views on the subject. Pub¬
lishing these letters will be helpful to the Editor of the
and
state
are
dealers to write in
discarded its original planners who
believed in the capitalistic system
tarian
preferred stock, and each
net income before interest
and taxes of
Every dealer should exert himself towards this end. We give,
starting on page 2311, as many of the letters received on this
subject as can be accommodated in this issue. None favoring
in
asked
gave the administration power,
has
the
"Economic Fallacies of NASD's Profit Limitation Rule."
This profit limitation rule MUST and WILL be killed.
to
minority party
"investigation and
of
checking
the
Republicans
their
functions
power."
front
the electorate."
by
exhorted
out
carry
Those interested in the economic effects of
•
leadership might be held partially
accountable
tell
they don't do so shortly the "Chronicle" predicts that
Congress will appoint a special committee with the power
of subpoena to
go into the whole subject. We feel sure that
Congress just will not stand by, even though the SEC is will¬
ing to, and see the bread and butter of the smaller dealers
of the country snatched from their
very mouths.
declarations, Mr. Landon said his
showdown
dealers
some
and if
ernment
"have
already
placed
conflicting interpretations" on the
"completely indefinite" Moscow
ment later.
inaction
towns, and hamlets of the country.
T^uly, it is high time the SEC took action in the matter
Asserting that the Roosevelt ad¬
and
SEC's
of' the
streets of the
Charter.
ministration
has $2,000,000 of 5%.
B has $2,000,000
contemplating doing so and are ignoring the profit limitation after deducting the bond interest
rule entirely in the interim, but all make it clear that
they of $100,000 the net income is
feel the Commission is indifferent to the plight of the small $900,000, which after taxes of
40% (using only the normal and
dealers and is perfectly satisfied to see them snuffed out.
surtax for purposes of
simplifi¬
Two representatives of the "Chronicle" called on
prac¬ cation) leaves $540,000 available
tically all of the dealers in 16 cities in the Middle and Far for the common stock.
In the case of
West and found only five that were not
Company B taxes
opposed to the
of $400,000 reduce the net income
NASD's profit limitation rule. It is significant, too, that or¬
to $600^000, which after
deducting
ganized opposition to the measure has developed in New the
preferred
stock
dividend
York City. If the bulk of the dealer firms in Wall Street feel leaves $500,000 for the common
that the rule will work a hardship on them it is obvious that stock—$40,000 less.
The
advantage is even more
it means
virtually crucifying the small dealers on the main marked if the
N. Y.
was
us say,
of 5%
„
"Chronicle" they have resigned from the NASD, others
Editor,
icle, 25 Spruce St., New York
hypothetical
stock outstanding but
differing in
their senior securities.
■
by Dr. Sakolski in this article, or
any related phases of the sub¬
ject under discussion. Comments
on
the
patience of the membership is obviously bonds; Company
being sorely tried.
the views expressed
on
the
A, let
in the matter the
"
take
us
of two companies, each with
same
amount
of
common
case
(Continued from page 2311)
erty.
Let
.
Delay In Abrogating NASD "5% Profit"
Rule Stirs Anger Of Dealers
2335
no
differ in that
danger of bankruptcy.
The interest rate
debenture
is
this
a
being
of
an
income
usually fairly
high,)
that
to
this tendency should be¬
widespread some alteration
if
come
it
meet
might be made in the
It does appear, how¬
ever, that the inherent advantages
in
the
situation, under
present
conditions point toward an exten¬
tax
laws.
sion of the trend.
Md.
Drydock Attractive
Maryland
Drydock
Company
offers an interesting situation ac¬
cording to a memorandum pre¬
pared by Cruttenden & Co., 209
South La Salle St., Chicago, 111.,
members
of
the
New
York
and
Chicago Stock Exchanges. Copies
of
this memorandum discussing
the situation
be
had
compensating factor quest.
from
in
some
the
detail may
firm
upon
re¬
,
2336
;
THE COMMERCIAL & FINANCIAL CHRONICLE
,
The Securities Salesman's Cornei
Incentive Plan For Salesmen's Compensation
There
are
many
divergent viewpoints
to the efficacy of various
Regardless of the method
as
plans for the compensation of salesmen.
of computation and payment used, whether it be straight
commission,
drawing account against commission, straight salary, or any com¬
bination of these plans, it is our opinion that the most effective and
generally acceptable plan is one wherein an incentive arrangement
can be incorporated as a determinant of total earnings.
Whenever there is an incentive motive for increasing a sales¬
man's earning power both the salesman and the firm will benefit.
This idea is based upon the premise that CASH speaks
anything else.
and this is
It
is
it should be.
as
louder than
Good work is rewarded,
fair arrangement.
a
;
"V
■.
<
■
•
-
,
Some months ago we were apprised of a sales organization that
had been allowed to go to pieces. • The draft and the lack of a good
sales manager had cut the organization down to skeleton size.
one
man
Only
producing anything besides the business the two part¬
was
the "so-called"- sales manager brought in.
Other men were
hired and they would last a few weeks or a month and then would
ners and
leave.
Several
methods
of
compensation were tried during this
around.
One was a small drawing account
which was limited in the gross amount a salesman could overdraw.
Another was a straight 50% commission.
Then several men were
hired on a straight salary.
None of these plans attracted the right
type of men.
The turnover was high and the sales organization
period of floundering
looked like
collection
of whirling dervishes.
things the new sales manager did after he took
ever
the job of rebuilding this sales organization was to put the
following method of compensation into effect.
The plan deserves
study if you are looking for such an arrangement—we think it has
a
One of the first
much to recommend it:
First two months
-
a
basic
$110 month
\
Commission refigured every six months as follows:
monthly
gross
is obtained.
The
wherein
months
An average
production
gross
fell below the monthly average for six months are to be
recomputed
again (not at the commission rate they were originally figured) but
the
at
rate.
average
The difference between the
salesman's
orig¬
inal credit in these months and the rate of commission he would
have earned at the average basis would be
paid to him as an incen¬
tive bonus.
/V
'u,
to
and
including
Salary
$400
month
1st 2 Mos.
gross:
—
60
..
the
and
Commission
'•
gross:
l';[
25%,(on $600
$130
150
to
and
including 5800 month
Commission
30%
(on
$800)
::
v.
Up
to
and
■
»
including $1,000 month
Salary
.v
Commission'35%
/
' \
$110
240
change
Commission
At the
out,
the
Y;
"Times"
that
the
defer, many other potential
issues, between now and the"
Utility's offering.
If
brought
was
said
national
market
become,
but it
never
then
went
to
on
But
has
but
23
has
one
Swift
480
the
This
ager,
Y'Y.Y'i,
$610
$590
plan of compensation gives the firm, and the
more
control
the
over
sales
force
than
sales
man¬
plan of straight
commission, as well as most drawing account against commission
methods of compensation.
The slightly better
salary (which is
nothing more than a "getting started" aid) for the first two months
is helpful in
attracting the better type salesman who would like
to
break into the securities business
and
any
who
has had
no
previous
investment experience.
The retroactive compensation feature makes
it possible for the sales
manager to use the last two months of
every six-months' period as the TIME FOR A
SPECIAL SALES
CAMPAIGN, These are the months when
the salesmen
can
bring
up
their monthly average and receive
additional earnings for the first
four months of the
period.
The commission rate advocated
here
can be
changed to meet your own ideas. In our
opinion, we think
this basis is fair for the
average retail
last
Stock
on
Exchange
of
the
the
Board of
New
York
Stock
Exchange,
following
disscusions
Governors, has initiated
by
Those
who, -in indicating
preliminary research already has been
undertaken, stated:
As the program
develops, the$>
Exchange will invite the views
ultimately, seek to list their se¬
of leading authorities in the
fields curities on the New York
Stock
of banking,
investment, industry, Exchange is indicated as another
foreign commerce and govern¬
—
■>
phase of the study.
ment. The over-all
objective is to
"The
enlarge the usefulness of the ExChange, by the mdst practicable
methods that can be devised con¬
sistent with national
policy, in
facilitating the flow
and
of American
foreign capital."
Mr. Schram further said:
"One phase of the
deal
study will
with the
feasibility of mak¬
ing the facilities of the New York
Stock. Exchange
more
available to
der
such
readily
foreign interests
provisions
as
necessary. The prospect
ditional foreign
un¬
may
be
that ad¬
companies
will
Board
approaching
involved
and
.
in
in
of
the
world
the
Governors
large
is
questions
reconstruction
reopening
of
trade
channels with the realization that
substantial funds will be available
for investment after the war. Part
of this capital
will,
presumably,
seek
employment in American in¬
dustry. At the same time both
American
be
and
seeking
foreign funds will
advantageous invest¬
ment outside the North American
get
under
Loan
at
way
the
among
investment
information
bureau
in
the
in connection with
area
War
Loan
Drives
are
figuring
on
finding themselves
employed in other capacities when
the
new
campaign opens next
month..
Y;.
..
n-.;Y
Y,
They point out that since the
aim
is
the
to
Stock
been
done
largely by the foreign
branches of New York houses.
"The
study, accordingly, will
consider
the
of
possibility
or
arrangements
foreign
under
partners may be
NeW-r York
firms.
no
is
now
rule against the
although it has not
generally followed.
indirectly
conviction
that
in
should
basis,
debt
with'
service
country.
we
be
on
an
returnable
The
to
from
paper
Schram
an
more
fully
article which
appeared recently in the Financial
Times of London. He said:
"Our
abroad
funds
on
a
cannot
be
invested
short
term, pay-meback-in-money basis. To a large
extent they should be
equity com¬
mitments—ownership—and,
lesser
extent,
make
eco¬
they
loans for the
to.
a
pur¬
pose of encouraging capital, both
continent, particularly in the Far domestic and
foreign.
Presum¬
East, Europe and South America., ably, some of the new
foreign
This suggests the
possibility of securities would sell on a high.
.
.
and
will
available
con-1
to
the*
ing regard to the heavy demands '
upon them by their world¬
wide military operations and to
the world-wide
shortage of trans-*
port, raw materials and supplies
for civilian
consumption.
With
respect
to the post-war
Governments of the
States'< of America.
the
period, .the
United
U. S. S. K. and the United
King¬
dom are in accord with the Gov- '
ernment of Iran that any; eco¬
nomic
problem
confronting
at
close
hostilities
the
receive
of
full
Iran
should
consideration
along
with
those of other members of*
the United Nations by conferences
or international
agencies, held or
created, to deal with international
economic
matters.
The Governments of the United
States of America, the U. S. S. R.
on a
house-to-house and
of the
indepence, sovereignty and
territorial
integrity of Iran. They
the: participation of
Iran, together with all other peace
count- upon
loving nations,
ment
of
in
the
international
establish¬
peace,
se¬
prospective buyers
was observed.
'
may
Still
Await
Call for
bids
its $65,000,000 first mort¬
bonds, for last Monday, are
on
now
disposed
down
will
on
to
put
the calendar
reach
market
in
the
as
prosperity after the
in accordance with the prin¬
ciples of the Atlantic Charter, to
which all four Governments have
continued to subscribe.
Bids
Bankers who had expected Illinois-Iowa Power Co. to call for
gage
and
Actively Discussed Prospects
issue
Aside
that
one
due
the necessary registration cover¬
ing $45,000,000 of new bonds plus
$10,000,000 of debentures.
\ j;
course,
Co.
from
the
financing,
Illinois
which
;
>
Power
constitutes
Meanwhile those who special- " the largest single issue in the of¬
ize in utility financing are lend¬
fering, there are a number of
other sizeable undertakings which
ing an interested ear to reports
could materialize given the
that the Florida Power &
right
Light
Co. plans have reached
where
early
funding
revival
program is
of
a
point
its
re¬
Exchange Commission,
a
market in the near-term
future.
Among
soon,
these
Michigan
.>
Consolidated Gas Co.'s $38,000,-
•
likely.
,
and
kind of
are
000 of first mortgage
bonds, plus
40,000 shares of 4%% preferred
stock, on which bids are ex¬
pected next Monday.
went
into this matter in
need
Reports say the company prob-.
this ably will file with the Securities
which
to
that
special
for* Iran
made
as
quote added.
Mr.
little
require, it
re¬
than
difficulties
The
realize
caused
Government such economic
assistance as may be
possible, hav¬
supplied with such informa¬
equity
rather
has
Iran
tion
investments
profits
governments
war,
abroad, like most British invest¬
ments,
to the Soviet Union.
they agreed that
building-to-building basis, will be
to
the growing
investment circles
American
United
war
well
the last paragraph
Schram's statement it was
observed by the "Times" that
fers
with
!-Y-_
America, the U. S; S. Rl
Kingdom recog-J
the
curity
Respecting
in Mr.
be
Those who will make the direct
contacts,
of
split
commissions onathe London
pat¬
will
provided.
Exchange rule
against split commissions, foreign
houses have had little
participa¬
tion in this business, which has
there
previously
here.
,
Due
relations
•
the Treasury, under its
and the United Kingdom are at'
set-up for the next drive,v one with the Government of Iran
to intensify individual con- i in theirdesire for the
maintenance
for maintenance of the vast in¬
formation facilities
investments
\
of
of
tacts
in
Minister
new
apparently refers to the
possibility that European bankers
funds
and
clear
a
War
and dealers may
eventually be al¬
lowed to profit from placing for¬
eign
Prime
The Governments of the United
nomic
natu¬
.
previous
the
of
"This
,
tiiat
would
to
New York
stated by Mr.
phase
Y:
tinue
banking fraternity who operated
corpor¬
latter course,
its
to
Fourth War Loan
the
was
"one
Prime
regarding
States of
the
weeks.
some
issuers
that time.
York Stock Exchange
readily available to foreign
interests under such provisions as
may
be necessary
the "Times"
had the following to say:
been
studies looking to the
development
mobilization of private
capital to aid in world re¬
construction after the war has been
won.' This was made known on
Dec. 2 by Emil
Schram, President of the Exchange,
itself
reg¬
*
that
the
.
wT"
Fourth
scheduled
Ex¬
Securities
ments
three
in keeping with
its
on
the
There
of plans for the
adjust
Treasury
track
New
admitted 1 to
The
to
more
Potential
New
which
Private Gapital For Post-War Reconstruction
market
hiatus of
a
are
since
and
by facilitating the
transportation of supplies from
the past, to stand aside after Jan.
18 and give the
list
United
Premier of
particularly
rally be inclined, ds they have in
to
r.,
the
Iran.
overseas
Argentine company.
is the only foreign
an
tern
organization.
by
velop, informed underwriting in¬
study, will deal with the feasi¬
bility of making the facilities of
$460
slow
Inter-
one
with
ac¬
terests are pretty well convinced
that corporate market would face
are
is
list,
Should the latter condition de¬
of
and
it prove
investor ideas.
com¬
Fifteen
Canadian, three
is Swedish, three
are
should
conditions
say:
foreign
represented.
the waiting
of substantial
are on
S.
Iran, desire to declare the mutual'
agreement of their three Govern¬
to
of pricing^ it would prob¬
ably be the sighal, it was con¬
tended, for other prospective
issuers to sit back and wait for
Japanese and Italian Issues
it
and
market
reason
considerable number of Ger¬
a
man,*
the
of ; the
America, the
S.
nize the
"At the moment its list is shorn
of
of
period
a
the
"Times"
and
goes through in a
make for confidence
ability
U.
Minister
:
;
'
assistance which Iran has
tivity is almost certainly assured,
given in the prosecution of the
it was argued.
;^ war
against the common enemy,
more
V*-.'.:;-
here
and in
of the United
Kingdom,
having consulted with each other
absorb further sizeable undertak¬
pale shadow
a
-
deal
to
ings which
of London.
The
the
in
new
than
more
this
manner
the
study will
of
channeling
capital
into
worth¬
while
foreign investments and
providing free markets for the re¬
sulting securities on the Stock
Schram
$110
480
$1,200)
hope and
leave
fact, in spirit,
President
States of
the
middle of January, will depend
on investor
response to the Utah
methods
concern
Noting that it
350
$130
(on
We
concerning Iran:
The
or
American
$110
(on $1,00Q)_
$40%
in
that decision to go ahead with,
expected.
discussion
ations."
$1,000:
Commission
time, it
same
in
is
ment
banking quarters.
It is the
studied opinion of security men
will be consulted. The close
coop¬
eration of the Securities and Ex¬
foreign than for domestic
gross:
Salary
friends
bonds
in
know
we
ulations under that act made reg¬
istration
far
less
onerous
for
$350
$130
questions
change Act of 1934, although
.
$480
Over
1,000
where we're going." He
indicated,
however, that leading authorities
in banking,
investments, industry,
foreign trade and. Government
York
'
$370
..
mortgage
determination.
the
with
,
"as'500 to
vague,
must be answered before
passage
'/■
>
240
—
first
receives
consciences.
own
here
came
v
corporation
••
•
$42,000,000
We
in¬
referring to- the plans of the of the Utah Power & Light Co., purpose. '•
\
Exchange, stated that John sold to bankers yesterday in com¬
Signed at Teheran, Dec. 1, 1943,;
Coleman,
Chairman
of
its petitive bidding, will be scanned
roosevelt "a
Board speaking in the .absence of
; stalin,
closely by the underwriting world.
•
Y
;•
Mr. Schram who was
V;:-. ...V, .v/-;, churchill.
ill, declared
Observation
will
be
more
that
any
explanations
of pro¬
critical than has attended most
Following is the text of an
cedure now must
necessarily be
recent offerings, it was averred
Anglo-American-Russian s t a t e-
.
$260
/, .'•**;
$130
__
market
the
3,
"This
.
150
gross:
Salary
'
$110
*
$280
Up
■'
■
_
-1
i
vestment
sires and their
which
Stock
$170
:
■
including 5600 month
Salary
in
manner
A.
Cuban
60
$190
to
The
Victory Accord
(Continued from page 2312)
according to* their varying de¬
REPORT
in the invest¬
The New York "Times" of Dec.
nacional,
Up
1920's
U.S., Britain, Russia
Reach
REPORTER'S
ment abroad of American funds."
British,
$110
(on $400)___——
15%
in
these
Thereafter
•_
Commission
made
panies
FOR THE MONTHS WHEN HIS EARNINGS WERE BELOW THE
AVERAGE
Up
OUR
■
.
a large
body of experience gained fol¬
lowing World War V American
finance is in a position today to
proceed along sound lines, thus
avoiding the mistakes which were
Exchange. In 1927 the Stock Ex¬
change briefly entertained ideas
that it might become a real inter¬
salary $130 month
Thereafter
investment
"Having the benefit of
„
'
.
soundly
established
companies.
-Thursday, December 9,1943!
Armour
yield basis. Certainly they would
involve speculative risks. But I
approved
visualize
ware
this
for risks
In
a,;s new
country
the
which
generation
will
be
-
in
avid
iri'jiew, romantic lands.
post-war
society
will be disposed, I
believe, to re¬
economy
ward rather than hinder the risktaker."
Mr.
Schram,
President
July
1941,
Chairman
of
the
had
who
has
been
Exchange since
previously been
of the Reconstruction
Finance Corporation.
v
which
&
Co.
and
is
in
have
of the Dela¬
Illinois
expected
refinancing of
\
holders
a merger
companies
to
produce
$75,009,000
;
the form of bonds and notes.
-
And
on
some
Dec. 22 Standard Oil of
Ohio stockholders vote
on
a
pro¬
posal to issue $10,138,900 cumula¬
tive convertible preferred stock to
be
offered
holders
syndicate
on
to-
present
"rights"
would
a
common
banking
underwrite
unsold portion of the issue..
any
-
.Volume 158
THE COMMERCIAL & FINANCIAL CHRONICLE
Number1 4236
*
Arkansas
Western
DIVIDEND
Gas
Company
STOCK
,
The Board of Directors of Arkansas Western
Gas Company has declared a dividend of fifteen
cents
(15c)
a
share
on
the common
stocic
payable
record
1943.
■
December
at
the
1943,
20,
close
Checks
to stockholders
business-on
of
will bo
1-1
L.
1943
*
American
BAXTER,
*
:
~r",~
*
:
/
NOBLE
WEST
AND
NEW FORK
of'
of
Board
Directors
The
regular quarterly dividend for
current quarter of $1.25 per share,
payable January 1, 1944 to holders of
the
American
Manufacturing Company has declared the regu¬
lar -quarter^ dividend, of
$1.25 per share oh
the Preferred Stock and a dividend of $1.50
record
ber
.
share oir the Common Stock of the Com¬
pany. Both payable December 31, 1943 to Stock¬
of
Record
December
will
15,
closed
be
stock
1943
at
the
until
the
at
close
3.
1944.
,ROBERT. B; BROWN,
.
New
November 30,
York,
ber
The
Board
of
Directors'/has this day de¬
a
dividend of Two. Do'lars
and
Fifty
($2.50) per share, being Dividend No.
90,
on
the Preferred Capital Stock of
this
Company,
payable February
1,
1944, cut
of
undivided net profits for the year ended June
30, 1943, to holders of said Preferred Capita?
The
the
clared
at
registered on-the
books of
The
Board
dend- of
the
ber
Company
ord
.
able
March
Common
of
1/ 1944.
Capital Stock
the
Company
January 28, 1944.
Dividend
holders
Stock
will
C.
D.
close
be
-afid
have -filed
who
this office. /
at
the
Preferred
of
mailed
suitable
orders
Assistant
AND
j.
'
of
*■
"
A
dividend
be
Checks
Colony
have
an
dividend
extra
declared
Trust
Boston,
a
of 20 cents
„
'
LOUISVILLE
GAS
A.
CHICAGO
The
and
of
Directors
Old
Mass.
NICHOLAS,
December 2,
the
of
cember
lecord
Secretary.
1943.
close
of
business
De¬
11, 1943.
COMPANY
Louisville
New York & Honduras Rosario
Electric
Company (Delaware) at a meet¬
ing
held
On December
<3,
1943/" declared *^4
quarterly -dividend
of
thirty-seven and
onehalf cents
(37'/2C) per share on the Class A
Common Stock of the Company, for the quar¬
ter
-ending
November, 1.30;- J194.3,. payable
by
Check
December 23.
1943,
to stockholders of
record
as
of
the dose of business December
15, 1943.
At the same meeting a dividend -of • twentyfive cents (25c) per share was dec.ared on ine
Class B Common Stock
of the company, , ror
,
the
quarter
ending November 30,
1943,. pay¬
able
by check December*/23, 1943, to stocky
holders of record as of the close of • business
December 15, 1943.
'*
Mining Company
120
'
■
.
*
;?,'.
Broadway,
>
New
York,
DIVIDEND NO. 365 '
.
Y,
N.
December 8th, 4943.
.
.
*'.* '
»,
The
Board
of
Directors
of
this
Company,
meeting held this day, declared a dividend
of Eighty-five- Cents ($.85)
per share on
the
outstanding capital stock, payable on December
at
a
24th,
1943,, to
stockholders
of
record
at
the
close, o! business op December 14th, ,1943, This
distribution' represents the final dividend in
-
G.
W.
respect' of
-earthings/for
the
year
1943.
WILLIAM C. LANGLEY, Treasurer.
V
KNOUREK. Treasurer.
close
of
business
of
DIVIDEND
*
cents per
ary
share
$25
stock will be paid Janu¬
1, 1944, ,to stockholders of record at close of business
/" December
on
par common
10, 1943. Transfer books will not close.
''V
H. F. Lohmeycr, Secretary
' "
NO.
55
160,090 shares
of incorporation of April 27,
January 10, 1944, to stockholder
close of business December 20,
.......
American Car
and
^
Foundry Company
New York, N. Y.
E.
D.
•
declared,
now
current,
out
a
of ihe earnings of the
dividend
of
one
and
*
three-quarters
per cent
(1%%)
on
the preferred
capital stock of this Company, payable December
24, 1943 to the holders of record of said stock
the close of business December
Transfer books will
mailed
not
at
13* 1943.
be closed. Checks will be
by Guaranty Trust Company of New York.
delays
the
matter
December 2, 1943
J. Hardy, President
Howard
C.
Wick, Secretary
77.
likely cause
might throw
which
into
be¬
looks
the
Thomson
predecessor.
South
share or two per
value of the shares
of The Texas Company has been de¬
clared this day, payable on
January 3,
1944, to stockholders of record as shown
(2%)
per
on
CORPORA
hereby
of
$.50
1
given
Thomson
&
time;
be ob¬
may
So far
bid
to
Big Steel is
as
cerned I
con¬
suggest raising your
49%-501/4.
recommend
In
YB
34^ to
...
*
.
<•
V
v#,
#'
.
.
There is still another stock
which acts well.
It
Sim¬
is
Co.
mons
On
the
other
side
mobile
of
the
a
growing list
which act badly.
the rails
are
closely by the auto¬
stocks.
You
caa
see
therefore from the choice of
stocks
given above that the
market does not act in unison.
But if you guide
your self ac¬
cordingly the results should
be
satisfactory.
'4f
More
sk
'
'
'
t
next!, Thursday.
7;7
&
Bros.
Street,
Levy
Hutzler, 60
York
City,
New
of the New York Stock
1,
Mr. Salomon,
1944.
member
Exchange,
[The
article
time
views
do
not
coincide
in
expressed
necessarily at
with
those
this
any
of
the
Chronicle.
They are presented as
those of the author only.]
a
of the New York Stock
has been associated with the firm
LAMBORN & CO.
.
OBJ Hi.' BACH,
for
Treasurer.
time.
some
99
follow
approximately
of .' the
.Federal
the
wall street
new york 5,
curve
n. y.
Board's
Reserve
Index of Industrial Production.
The
experiences
companies
as
well
within
of individual
the group of
influ¬
thirty show wide variations, as is
indicated by a few selected exam¬
they tend to
INDEX
OF
NET
OPERATING
Phenix
Amer.
North
INA
Home
Hanover
100
1920_,---„.
100
100
100
100
134
156
191
214
185
180
151
153
190
270
194
163
168
123
97
99
129
137
119
83
..
100
174
104
_
100
170
_
168
87
118
102
201
117
136
.
100
154
73
100
€0
89
172
129
196 ' *
137
114
374
161
199
134
107
135
-
206
118
170
169
136
114
123
149
143
lr38—
170
150
_
168
120
134..1.
147
229
.164
139
.
,
88
249
•
147
49
103
186
98
70
135
70
-110
_
181
125
1942
90
135"
1940
-
.
*167
92
-
121
*
129,
Members
65
.
New
York
New
York
207
141
133
241
126
164
254
125
62
189
21
40
Commodity
120
98
..
H. Hentz & Co.
116
181
-
228
91
88
New
151
-
105
85 •'
.
107
115
New
109
York
Chicago
(Av.)—-
_
—
104
Orleans
And
Bearing in mind that the 1940-
42 average of the
1856
97
'
'
151
114
15.2
190
'
136'
43
75
191
121
_
_
Established
91
113
!
52
128
.113
1937_^—
DIgby 4-2727
Prov.
Wash.
River
224
_
Exports—Imports—Futures
PROFITS
Fidelity- Great
Aetna
(Av.)_.
SUGAR
ples shown in the following table:
special
as
thirty companies
over,
Home,
North
River
and
Washington, on ac¬
of exceptional marine losses,
count
experienced
figure of 228 for Insur¬
Company of North America
net
results
well below the 1925-27
interesting con¬
trast.
Fidelity-Phenix, with 167,
is also substantially above aver¬
age. It will be observed, however,
that
were
in
1942
River and Providence
Aetna, Great American, Han-
Stock
Exchange
Curb
Exchange
Cotton
Exchange
Inc.
Exchange,
Board
Cotton
other
of
Trade
Exchange
Exchanges
Providence
is 143. the
stands out in most
I
buying price of
35V2 with a stop at 33.
a
McKin¬
Exchange,
will
admit
Maurice
Levy and William R. Salomon to
partnership in the firm on Jan.
dividend
a
the
on
particular
request.
members
ION
that
shave
per
from
upon
Wall
is
of
;
investors at this
Salomon
STATIONERY
&
Nweek, the
Youngstown Sheet.
second is
followed
To Admit Salomon &
NOTICE
TABLET
was
last
—Walter Whyte
Treasurer
1928__—
1940-42
to
non
at
issued anti
outstanding snares without par varus of th,
Common Stock of Western Tablet & Stationery
Corporation has bsen declared payable on Janu¬
ary 3,
1944, to ths holders of -record vpf such
shares at the close/of/ business on December
20, 1943.
,; '
rate
Company
tained
L. H.XlNDEMAN
DIVIDEND
side. The
up
In the forefront
McKinnon,
231
Street, Chicago.
Copies of this study
stock transfer books will remain
open.
7
&
Salle
interest
company at the close
December 3, 1943. The
on
La
Nickel
par
by the books of the
of business
unobtainable
fence there is
111., members of the New York
Stock Exchange and other lead¬
ing exchanges, have prepared a
timely
study'
of
International
•" (
-
the
on
first is U. S, Steel which
uncertainties
COMPANY Situation Of Interest
--
The specialty steels,
Crucible, not only look
lower but actually
dangerous.
Only two steel stocks show
of securities,
ance
Charles
Section
would
move
of the post-war period.
165th Consecutive Dividend paid
by The Texas Company and its
1S41—
•
"A"
43 Y2
higher.
■
International Nickel
A dividend of
cent
1934
fiscal- year
favorable condi¬
OLDENBURG, Treasurer.
1943.
1933—
There lias been
advan¬
Tulsa, Oklahoma, December 1,
—
30 Church Street
take
1943.
1925-27
'
a
long
provided by amendmen'
ences, but generally
/
to
under
Such
certificate
cyclical
,
order
stated, is
proceedings
(Continued from page 2333)
i:
and
attractive.
alternative, it was
resort to bankruptcy
of
payable
Notice
of 1943 of seventy-five
sjc
sjs
Union
42 V2
tween
tions. The only
record at the
the
A dividend for the fourth, quarter
in
war
tage of present
WESTERN
Railway Co.
the
CORPORATION
OIL
November 19,1943
and Ohio
emphasized that the road should
be reorganized before the end of
Secretary
THE TEXAS
THEO. JOHNSON, Secretary.
•.
Gas
the
at
STEPHEN G. KENT
Board
the
1926,
of
ILLINOIS
of
1932056—,.
to
Company
the
at
record
14, 1943.
Directors of
the
MARGAY
OIL
CORPORATION has this day declared
a
dividend of twenty-five cents a share on the
outstanding stock of
the corporation of the
Racine, Wis., November 26. 1943.
A dividend of $4.00 per share upon the out¬
standing Common Stock of this Company hus
been declared payable December 24,
1943, to
t
of
MARGAY
The
Incorporated
holders
/
Board
D.
from
Boston,
J. I. Case
24.Federal St., Boston
AND. ELECTRIC
Directors has this day de¬
quarterly dividend of fifteen cents
on the capital stock of this Company,
$10., payable January 3, 1944, to stock¬
issue
OFFICE OF
■
-
■'
share
per
,4943/.."i*s'J-'j"/'r.M
1943
per
share and
per
share, payable December 24, 1943
shareholders of record at the
close
of
business
December
17,
;
($0.20)'
mailed
Company,
to
Decemb:r 9,
be
will
-
Trustees
cents
-
.
and
1943.
The
twenty
ijt
Western
compromise
reorganization
plan as
soon
as
possible was
stressed by sources close to the
reorganization managers. It was
Board of
December
'/•"•/
46
paid on December 22, 1943, to holders
outstanding Capital Stock of the Calu¬
-Hecla Consolidated
Copper Company
at the close of business December 11,
the
met
of
No.
as
anything
Desirability of putting through
the
a
holders
COMPANY
Dividend
of record
FUND
7
share
par
CONSOLIDATED
HECLA
COPPER
Treasurer,
will
'\div-duid cf 20 cents
The
clared
(Continued from page 2313)
-
Interstate Commerce Act, for the
new
securities which it is pro¬
posed to issue under the plan.
December 2, 1943
per
CALUMET
-\
.
....
Vice President & Treasurer
LARKIN,
Vice-Pres. & Secy.
December 7, 1943.
the
EATON & HOWARD i
BALANCED
-.'/'.
therefor
-
busi¬
1943.
DAVID BERNSTEIN,
.
.
.
iCapital
-V
■ ■••
WILSON,
to
Common
at the close of
on the 17th day of December,
Check's will be mailed.
IRVING TRUST COMPANY
A.
Tube.
like
,
the out¬
on
closqftfitysin.ess December
'
\
business
120-Broadway, New York 5, N. Y.
'V
£be
to the holders of said
registered-on the books
at
checks
of
at
&
ing
technical
Treasurer.
ness
share, payable
holders of rec¬
December 31,
Fifty Cents ($1.50)
per
share, ■ being Dividend No.
124, -on
the
Common Capital Stock of this Company, pay¬
and.
share
stockholders of record
to
COMMON STOCK
A dividend of 50<! per
En¬
standing Common Stock of this Company,
payable on the 31st day of December. 1943
.
Dollar'.and
One
'-50c and SI.50 e|xtra per
17, 1943.
:
points wouldn't
a
^
the close of business Decem¬
at
Mines, Western
Youngstown Sheet
Union and
American Car & Foundry
281/&-291/£; stop 27. American
Steel
Founders
2\V%-22lh\
stop 20. Both stocks are in a
York
Combustion
THE Board of Directors on December 1st,
1943 declared
dividend at the rate of
current
record
cf
2314)
the other stocks I consider the
regular quarterly dividend for
quarterof$l.75 per share,
payable January 1, 1944 to holders of
December 30, 1943.
also declared on this .day,-a'divi¬
the close of business
.....
7% SECOND PREFERRED STOCK
1943.
Cents
Stock
the close of business Decem¬
at
17, 1943.
New
Avenue,
Directors
page
'k
Not all the steels show a
position to advance
and given a continuation of
promising market picture.
LOEW'S INCORPORATED even current general market
Bethlehem, for exam p 1 e,
•'THEATRES EVERYWHERE''
behavior should do so.
Among looks lower, or at least not
December 2, 1943
COMPANY
RAILWAY
FE
AND
of
Vice-Pres.dent
of $1.75 per share,
payable January 1, 1944 to holders of
record
SANTA
for
theeurrent quarter
Treasurer.
THE ' ATCHISON,' TOPEKA
,
PRIOR
Th? regular quarterly dividend
•„
Beard
gineering Company, Inc. has declared a dividend
of $2.00 per share on the outstanding capital
stocK of tae Company, payable on December 28,
1943,
to stockholders of record at the close
of business December 23, 1943.
H. H. BERRY,
PREFERRED STOCK
1943.
The
stock
record
books
for the purpose of transfer of
of business
December
15,
close
January
Madison
2C0
The
; ;
7* CUMULATIVE SERIES
business
of
Combustion Engineering Company, Inc.
the close of business Decem¬
at
17, 1943.
per
holders
Checks will be mailed.
R, A. BURGER, Secretary.
PREFERRED STOCK
•
the.
Books will remain open.
SERIES PRIOR
5% CUMULATIVE
STREETS
BROOKLYN,
The
~(
Manufacturing Company
sjt
aver¬
Dome may be act¬
it does on inflation
mean
much
if the
group's fears. Yet, whatever the un¬
market
action
didn't
show
derlying reason, the stock acts
higher prices. That being the well enough to buy. I suggest
case I
suggest buying the fol¬ Dome between 20V2 and 21Y2
with a stop at 19.
lowing stocks:
But all these
January 3, 1944, to Stockholders of record at the
close, of business December 16, 1943, Transfer
THE Boardthe1, Directors has this day
of following dividends:
declared
President.
,
"
the
better than
market performers:
Dome
will continue to make money,
quarterly dividend of
and three-quarters per cent was declared 011
Preferred Stock of this Company, payable
one
Whyte
(Continued from
STOCK
On November 30, 1943, a
YORK, N. Y.
NEW
•
age
Savs
company
PREFERRED
mailed.
L.
December 6,
r':'
180 MADISON AVE.
of
10,
December
can
f olio wing as
Walter
AMERICAN
CORPORATION OF AMERICA
_
NOTICES
Tomorrow's Markets
mimi
NOTICE
COMMON
DIVIDEND
NOTICES
DIVIDEND
DIVIDEND NOTICES
2337
thermore.
ages
cf
even
Great
the
level; fur¬
1940-42
N.
Y.
Cotton
Exchange Bldg.
NEW YORK
4, N. Y.
aver¬
American, North
Washington
below the 100 of 1925-27.
CHICAGO
DETROIT
GENEVA,
PITTSBURGH
SWITZERLAND
2338
THE COMMERCIAL & FINANCIAL CHRONICLE
Municipal News & Notes
An
(Continued from
260,503 and comprising $353,330
of
for accrued interest to
it is human to
and
future and
United States bonds. Immediate
the
Triborough
bonds,
outstanding
Bridge Authority
calculated requirements
together with a series of tables of
projected earnings based on past
assets
experience,
particularly
during
the 1943 period of enforced re¬
strictions on motor vehicle travel,
has
just
issued
been
by
firm
the
states
of
that,
30,
must
In
public works
program.
tive
ure
borrowing
on
any /given
whose revenues is de¬
pendent on motor vehicle traffic.
measures,
with
for
is
which
post-war
described
study
says,
a
bond issues
contention that
the
dependent
investment
or
Frankford
sustaining
and
However,
ception
it
toI
is
this
said,
an
leading
kind in
the
the
enterprises
the
world.
of
its
Failure
of
authority's bonds to regain
their
former
status,
is
relative
attributed
Stearns &
market
by
Bear,
Co., to three factors,
to wit:
A
in
than average decline
more
earnings
as
a
result
of
the
small percentage of commercial
essential type traffic contrib¬
or
uting to the
Authority's
peace
Limited accumulated
due
to
the
reserves
abbreviated
normal
or
excluded
operations
of
the
emergency
of
the
will
excess
of the
all
be
canceled
im¬
restric¬
received
from
the
Transportation
operating
is
company,
more
enough
to
provide
for
amortization of the bonds issued
with
to finance the structure.
in
espe¬
affected by the ratifi¬
July
1943
of
certain
amendments of the Bond Reso¬
lution,
due
to
the
absence
of
Thus
widely
published
financial
statements and a hitherto in¬
toward
sufficient period to observe the
full effect of various gasoline
the
restrictions
the
on
earnings with
a
Authority's
view tp meas¬
payment
of
reduction
a
debt
gross
and
the
of
Of the
$12,000,000
the city's
exclusion
$7,000,000 still owed by
city
the
elevated
of
the
will
line,
than wipe out the current
on
more
amount of
uring its ability to avoid tem¬
porary
default for any given
period of duration of the war.
excess
pacity in the black for the first
time
in
the
years,
administra¬
sewer
nounced
excerpts culled from the inde¬
pendent audits of the city's fi¬
a
respective
years.
auditors stated that the totals for
both years did not allow for "cer¬
tain items of assets to be allo¬
cated
to
interest
and
sinking
funds,
as
interest
on
vestments,
other
realized:
viz
Accrued
cash balances and in¬
amounts
due
from
recently, plans to impose
rent
sewer
each property in
on
Philadelphia. It is estimated that
approximately $7,500,000 will be
raised annually by this method.
With this income assured, the
city will be in a position to
substantiate its claim that the
sewage
ing
system
and
is
that
the
therefore, does
charge
self-support¬
$58,000,000,
not constitute
against
the
city's
a
bor¬
rowing capacity.
that
no
by
new
bonds
points
were
the
city during the year
Sept. 30, 1943, and that
ended
the
total
debt
on
outstanding
that
debt,
funded
including
direct andi assumed
obligations,,
amounted to
$33,502,000.
The
comparable figure on Sept.
30,
1942,
was $35,427,250. A break¬
down of $2,090,572
sinking fund
assets on Sept. 30 last shows
cash of
of
$1,113,082; Dallas bonds
$23,000
and
$954,490
of
Attractive Possibilities
out
issued
anything
disparage
I
,
if
month,
a
the
monthly
net
the
expenditures
need
current
for
and
the
amounts
to
be
raised, If
which,
the
these
fix
we have passed the peak
expenditures, and if we had
of net
achieved
full
a
in
do not
selling
to
non-bank
should
further
of
measure
success
securities
investors, then we
government
have
not
funds
from
had
the
to
borrow
banks,
have had
amounts
we
right
in
in
to this moment.
up
vestors
from
rose
or
are
the way out
The
current
situation
in
Mer¬
tough spot. Maybe they
I think they have their place;
bankers
should
avoid
giving
substance
to
the charge, which
made, that every time
the going gets tough the private
banking system requires govern¬
ment help,.
If that charge could
be
substantiated,
the
private
banking system would pretty soon
be busy justifying its existence.
has
been
It is hazardous to expect the gov¬
ernment to step in when things
look
risky and to pull out when
have
largely disappeared
and profits seem secure. The gov¬
risks
ernment
tends
in,
gets
to
stay in
borrowers
and
know where
they
well
as
want
can go
in winter
as
in
it
once
to
for credit
summer.
I
should not want to be understood
an
average
during the second half of
chiefly as a result of the
ahead.
You want to do your share
trying to develop an economy
a high level of
produc¬
tion will be the
rule, not the ex¬
ception. Your contribution must
something more than holding
be
cash and government securities.
Incidentally Mr. Sproul declared
"we
that
the
in
Bank have
a
Federal
Reserve
real interest in the
preservation and improvement of
the private banking system."
/
.
At
the
outset
of
his
remarks
Mr. Sproul had something to
say
regarding the war loans, mention¬
ing that the Third "was success¬
fully completed
that
and
the
a
few weeks ago,"
Fourth
War
Loan
begins a few weeks hence. Con¬
tinuing Mr. Sproul said:
The Secretary of the
Treasury
has already announced the gen¬
eral
of
terms
the
new
loan.
In¬
creasing emphasis is to be placed
sales of securities to non-bank
on
to
individuals.
the
banks
sell
securities
The
job
on
of
again will be to help
to
their
customers
Distilling
Standard
members
Stock
ing
of
the
New
York
Exchange and ohter lead¬
exchanges.
circulars
may
ond half of
during the
as
sec¬
1942.
"The apparent inconsistency be¬
tween these
increase
figures and the rapid
s&les of government
in
securities
to
non-bank
investors,
reported in each succeeding War
Loan
Drive, arises chiefly from
the fact, which is familiar to all
of you, that non-bank investors
have
been
making (increasingly
large sales of government securi¬
Copies
be
had
of
these
upon
quest from Faroll Brothers.
re¬
tures have
dency
of
this
to
shown
flatten
year.
a
definite ten¬
since
June
receipts
have
out
Tax
been rising at an accelerated pace.
Net expenditures of the Federal
Government
(budgetary,
sia for stabilized currencies in the
postwar world, said an Associated
Press
dispatch from Moscow, on
6, which went on to say;/
/ The possibility of participation
by international banks or the use
Dec.
of stabilization funds is ruled out
by the fact Russia has state-con¬
trolled currency, the article said.
"As a country which partici¬
pates in foreign trade the Soviet
Union,
like
United
England
r
and
the
States, is interested in the
stability
of currencies in. those
countries with which it carries on
trade
relations," the article went
adding:
;'.//.■ /.//•: /■■'
on,
"If
Soviet
countries
gold
trade
could
with
other
conducted
undoubtedly
currency,
circumstance
be
would
in
this
facilitate
trade operations."
The
current
situation
in
Pitts¬
burgh Railways System, particu¬
larly certain of the underlying
bonds, offers attractive possibili¬
ties for
appreciation, according to
study prepared by T. J. Feible& Co., 41 Broad
St., New
York City.
Copies of this inter¬
esting study, which is available to
a
man
dealers
only,
request
from
be had
may
upon
T. J. Feibleman &
co.
Profit Potentialities
The
tion
"Rock
offers
Island"
attractive
reorganiza¬
profit po¬
tentialities according to a detailed
circular on .the situation issued by
McLaughlin, Baird & Reus?, 1
Street, New York City, mem¬
Wall
bers of the New York Stock Ex¬
change.
Copies of this interesting
circular may be had upon request
from
McLaughlin, Baird & Reuss
upon request.
/■,/// ■/
ties to the banks between drives.
:
Cutting Tool Industry
We
Outlook Attractive
have
there is
reason
The
can.
skimmed
of
do
to
got
War
funds
we
The cutting tool industry offers
attractive post-war prospects, ac¬
cording to Loewi & Co., 225 East
Mason St., Milwaukee,
Wis., in an
cream
of
the
interesting study of the industry
larger investors. The second and
Third Drives had to tap more ef¬
with
fectively
tional
the
smaller accumula¬
tions of savings and the stream of
current savings.
With better or¬
ganization, and with, even more
Fourth
War
the
raise
Loan
actual
totals
net
their
exist¬
'/■'"•• -T/;V
"We won't get these funds into
ence.
the Treasury, however, if you and
and others who work in the
Unusual Potentialities
Midland
appreciation, accord-;
detailed study of the sit¬
uation prepared by Doyle, O'Conner &
Co., 135 South La Salle St.,
Chicago, 111. Copies of this study,
ing to
and
War Loan campaigns,
sales
sales
held.
in
The
one
banks.
nor
to
non-bank
which
reminder
way
It
are
benefits
up
the
by
neither
the government to
bank
and
taken
another
or
banks
have
non-
investors
pad their pur¬
chases, either to make a specula¬
tive profit, or to create an
of
illusion
rapidly expanding sales of gov¬
ernment
securities
outside of
the
banking
system, or to reach a
quota. We not only have to make
sales to non-bank investors; we
have
to
make
sales
where
securities will stick for
a
interesting discussion of
an
attractions
Gas
stock
from
of
Federal
Corporation
may
be
had
Water
common
upon
request
Doyle, O'Connor & Co.
investors
bought
is
4
Debenture 6s
due 1938 offer unusual potentiali-,
and
rest on past
accomplishments or take the easy
way to a full quota in the future.
Utilities
ties for price
the
are
Copies of
request.
I
Real
Company,
brochure prepared by Loewi
& Co. on the situation
may be
had from the firm by dealers on
of
highest figures yet reached. The
funds are there.
Every estimate,
every study, every observation of
day-to-day
living
in our own
shows
Tool
the
sales to non-bank investors to the
communities
particular reference to Na¬
should
Drive
or
;
Drive
Loan
good deal of the
a
and
to believe that
First
investment
idle
better
a
the
Chemical Bank & Trust
Situation Interesting
The current situation in Chemicle
Bank
and/ Trust Company
possibilities, ac¬
offers interesting
cording to a bulletin issued by
Laird, Bissell & Meeds, 120 Broad¬
way, New York City, members of
the
New
Copies
of
obtained
York
Stock
this
Exchange.
bulletin
from
Laird,
be
may
Bissell
&
Meeds upon request.
while."
Empire Sheet & Tin Plate
Silica
expendi¬
111.,
figure
same
counseling banks to take long
am
suggesting that you/
aid from banks and bankers, the
bankers, take a long look
chances. I
as
and depositors; not to buy securi¬
Corp. common
ties themselves.
Corp. com¬
How well are we getting on
mon
offers interesting possibili¬
with this job of selling to nonties according to circulars
pre¬
bank
investors?
When
all
the
pared
by Faroll Brothers, 208
tumult and shouting dies, not so
South La Salle Street,
Chicago, well as we should. War
chants
and
the
the
Pittsburgh Rys. Look Good
/
.
billion
government
and
to borrow,
monthly rate of $1.1 billion dur¬
ing the first half of 1942 to $2.5
1942,
"War
in
-
the
"The net absorption of govern¬
ment securities by non-bank in¬
questions will in¬
government
sales
Bailey
glamour
international
investors, and major emphasis
funds, and delinquent tax
balances."
Auditor
much
in which
exempt the city's gross
investment of $58,000,000
ments and figures in the form of
the
is
ations
development of an international
point of view. That would not be
in
to
.
for
that
to
tion plans to ask the court fur¬
from the legal debt.
City of. Dallas, Texas, had
total assets of
The current amount outstand¬
$2,090,572 in its
sinking funds at close of the fis¬ ing in this item, however, is
cal year
on
Sept. 30, 1943, as slightly more than
$40,000,000.
against $2,004,719 on Sept.
30, The other $18,000,000 is held by
1942, according to a memoran¬ the sinking fund either in bonds
dum just issued by Stuart
Bailey, or cash.
City Auditor, containing state¬
The administration, it was an¬
reporting the sinking fund as¬
sets,
Mr.
Bailey
observes, the
sys¬
proportionate attention.
wish
ther
The
In
planning
as
borrowing.
With the city's borrowing ca¬
Dallas, Texas, Sinking Funds
Totaled $2,090,572 on Sept. 30
nances
will
are;
Co., /
$10,000,000 debt presently out¬
standing, $3,000,000 is held in
the sinking and the other $7,000,000 is held by investors.
cation
which
billion
as
aver¬
borrowing by the Treasury, or the
rate of use of past borrowings.
They are the basic factor govern¬
ing the timing of borrowing oper¬
of every
Phil¬
the current financial status and
Authority,
So
guaranteed loans
petition, the
city maintains that the annual
outlook of the
as
It
some
but
than
cially
be
$4.6
looks
they will
average during the first half of
1944 would not exceed that figure.
bears that label is apt to command
our immediate and
sometimes dis¬
that
if
In support of its
between
unfamiliarity
to
surround
as¬
declared self-sustaining.
tions.
General
to
seems
it
that
taxable
court grants the petition of
city to have the elevated debt
adelphia
war
age'about
of
banking
whole
our
related
remainder
various
pact of
should
going
problems
1943.
dicate what I have in mind.
First, First War Loan Drive and the in¬
there is the question of govern¬ tensification
of
the
War/Bond
real and personal.
Of ment
lending, and government campaign.; During the first half
this excess, approximately $12,guaranteed loans, in fields which of
1943, however, net sales out->
000,000
will
be
automatically have been or
might be considered side the banks averaged only $2.3
eliminated
next
year
through fields for
private banking enter¬ billion a month, and during the
sinking
fund
earnings,
budget
prise. In looking ahead to the dif¬ second half of the
year it is esti¬
appropriations
to
the
sinking ficult
problems of post-war bank¬ mated that the monthly average
fund
and
the
retirement
of
ing, it can be too readily assumed will not be more than $2.5
billion,
serial
bonds.
The
period
the
self-
are
peak of
a
June
and
property,
rental
and
kind
estimated
and
from the
valuation
sessed
completion of the Triborough's
facilities
the
is
therefore
which is fixed at 10%
the
time gross revenue.
line
That
1942
During the second half of 1943 it
is
.
bonds of the Triborough Bridge
Authority, which is one one of
the
and
sewers
that
confined
keeping with the whole history
legal debt of this bank. But we must not
limit.
■;.' i
-: y:/y' /■, / - /
/" lose sight of the fact
that, in bank¬
It is reported that the city, at
ing and finance, we have quite a
the close of the current year, will bit
to do at home and it is time
be $18,900,000 over the limit of
we were
getting at it.
;* W
its statutory borrowing capacity,
Two
be
ex¬
are
trend
in
December
article
Working Class," of Dec. 6, ex¬
pressed the desire of Soviet Rus¬
about $5 billion a month between
calling.
our
international.
fig¬
city's present
elevated
for payment directly
indirectly on this mode of
transportation are currently sell¬
ing at or near their all time peak
prices.
/. ';/./
is
An
to have reached
appear
tem, and not all of them will be
post-war
This
As
the
"There
conservative
part—on the expectation of court
approval of the administration's
revenue
not
2310)
page
demanded of those
.which
now
who practice
the
by city officials and is based—in
of
But,
others.
suggest
be
Favored By Russia
plus net expenditures of govern¬
ment agencies and trust funds)
planning is all right and has its
definite place, but a little more
next
provide
as
to
than
hazards.
vision is
capacity
to
and
solely to how best to protect their
own individual institutions
against
project
result,
want
concern
extended
a
I
000,000
basis
less
no
planning
post-war
an
number
plan
materialize, the City of Philadel¬
phia will have in excess of $40,year
present,
try to plan for. the
bankers being human
their
the event that present plans
varying stringency have been in
effect
18
months, a sufficient
period has now elapsed in which
to project "with some accuracy"
the incidence on the approximate
earnings, under different restric¬
the
What
over
Bonds From Debt Limit
gasoline
types and
about
everything about the future.
Philadelphia Asks Court To
Exempt Elevated & Sewer
Bear,
as
various
Sept.
on
1943,
immediate requirements.
Stearns & Co., New York 5, N. Y.
In connection with the analysis,
restrictions
little
of $1,-
Sept. 30
$907,172
to
meet
term
bonds, resulted in an excess of
$830,069 in the sinking fund
revenue
Gold For Postwar Trade >;/
Difficulty Getting Small Business Capital Serious
informative analysis of-the
factors
determining
the
security of interest and principal
salient
Thursday, December 9, 1943
Situation Attractive
Securities Held In Wis.
Loewi & Co., 225 East Mason
Street, Milwaukee, Wis., have pre¬
Empire
pared their annual list of quota¬
offers
tions
cording to a memorandum pre¬
pared by Hill, Thompson & Co.,
Inc., 120 Broadway, New York
City. /Copies of this interesting
and
on
bonds, preferred
common
stocks
stocks
which
are
widely held in Wisconsin. Copies
interesting tabulation may
of this
be
obtained
deficit request.
from
the
firm
upon
The first mortgage 6s of 1948 of
Sheet
&
attractive
memorandum
request.
Tin
Plate
Co.,
possibilities
may
be
had
ac¬
upon
.Volume 158
,
M
■l
THE
Number 4236
I
.
I
|
COMMERCIAL &
2339
FINANCIAL CHRONICLE
I
Govt. Aid To Latin
America Discussed
Moscow
(Continued from page 2312)
is now being repeated with
one notable exception: While pri¬
vate
bankers
may
not
always
have loaned well or wisely and
An Attractive
President Hails
Welding Unity
ago,
Calendar Of New Security Flotations
"Inactive"
first 4s offer an
situation for dealers,
Midland Valley
attractive
Pact As
registration state¬
These issues
are grouped according to the dates on which the registra¬
tion statements will in normal course become effective, that
is twenty days after filing (unless accelerated at the dis¬
cretion of the SEC), except in the case of the securities of
certain foreign public authorities which normally become
Following is
with
promising possibilities for
appreciation, preferring inactive
issues according to an
interesting
list of issues whose
a
filed less than twenty days ago.
ments were
memorandum just issued by Vilas
Roosevelt has de¬
& Hickey, 49 Wall Street, New
scribed the recent Moscow agree¬
York City, members of the New
ments as another step in the unity
York Stock Exchange.
Copies of
while private investors may not which exists within the United
this
memorandum may be ob¬
always have used sound judg¬ Nations and making the uncon¬ tained from Vilas & Hickey upon
effective in seven days.
ment, the funds which were sup¬ ditional surrender of the enemy
request.
These dates, unless otherwise specified, are as of 4:30
.
plied to Latin America were, on inevitable.
This
Presidential
expression,
P.M. Eastern War Time as per rule 930 (b).
the whole, furnished freely and
Now R. D. Bayly & Co*
voluntarily. The Government, on disclosed on Dec. 4, was contained
Offerings will rarely be made before the day follow¬
(Special to The Financial Chronicle)
the other hand, in the role of in a statement given The Army
ing.
LOS ANGELES, CALIF.—Fol¬
and Navy Journal, unofficial ser¬
banker as well as investor, is using
the funds of its citizens who, to vice
publication, for a special lowing the retirement from part¬
Reynolds & Co. are named principal under¬
SATURDAY, DEC. 11
say the least, have the
right to "United States At War" edition, nership in Bayly Brothers of
writers.
Others will be named by amend¬
know precisely how such funds according
to
Associated Press Harold Bayly, the name of the CLEARING MACHINE CORPORATION
ment.
Clearing Machine Corporation has filed
Offering Price to the public will be sup¬
are being employed and
to what Washington advices, which gave firm has been changed to R. D.
President
.
being directed in¬
non-productive channels. *
state¬ Bayly & Company. Partners of
the new firm are Roy D. Bayly,
dated Nov. 15:
Indelibly written on the map of member of the Los Angeles Stock
and limited
destiny are the fact and figures Exchange, ' general
which foreshadow the doom of partner, and Donald D. Foss, gen¬
the evil
men
who brought the eral partner.
horrors of war upon humanity in
pursuance of their design to en¬
Brill Corp. Looks Good
slave it.
These facts and figures
The 7% cumulative preferred
attest to the growing power of the
United Nations and the employ-, stock of Brill Corporation offers
ment
of
that
power;, for
the attractive possibilities, according
achievement of our common aims to an interesting memorandum is¬
—freedom for all peoples, eco¬ sued by Buckley Brothers, 1529
nomic
security,V^for them, and Walnut St., Philadelphia, Pa.,
realization of the age-long dream members of the New York and
Stock
Exchanges.
of furled battle flags in a feder¬ Philadelphia
ation of the world.
Copies of this memorandum will
As we march with stout hearts be sent upon request by Buckley
toward the goal we have fixqd Brothers.
we
manifest our good faith by
giving to those we liberate the
Railway Situation Has
rights and privileges democracy
the text of the
follows
extent they are
as
to
ment, which was
{ "If the Government
participating U in
after the
it should realize that such
of
desirous
world
war,
is genuinely
reconstruction
participation can, in the final
analysis, be effective only if done
by private capital, which, owing
to unsound fiscal policies pursued
by the Government with respect
to neighbor countries, may refuse
or be
reluctant to take a part in
post-war
rehabilitation.
Government
"The
should
.
V
:
en¬
American nations
default on
their debts to resume the service
in accordance With original debt
agreements, or, when this would
be impossible or too burdensome,
payment should at least be re¬
sumed in accordance with the ca¬
pacity of the respective debtors to
discharge
contractual
commit¬
ments.
Extension of credits on a
liberal basis on the part of the
Government to such nations as
continue to desregard entirely, or
show little regard for the rights
ancl
privileges of creditors,
is
bound to be misunderstood and
misinterpreted both South of the
Rio Grande as well as by Amer¬
ican investors.
The recent sanc¬
courage
Latin
complete or partial
in
Peru
are
substantial credits to
illustrative of this view,
neighbor policy should
If these is to be
understanding between the people
of the United States and those of
the
Latin
American
republics,
work both ways.,
peace
Address—6499
■:
Denying
the
implication by
Senator Butler that Government
expenditures in Latin
America
are a waste of American funds for
bring
their
is
held
S-i,
let-up in our
effort. But their loss of a part¬
ner,
their costly retreats every¬
there
must
be
no
diminishing
political purposes, Professor Jor¬ capacity to wage war, make their
dan declared that the "essence of unconditional
surrender
inevi¬
the Good Neighbor policy is not table.
a
hand-out
of favors
by the
The path to that end will be
United States to the 20 republics
tortuous and thorny to our feet,
of Central
and South America,
but inspiring us will be the hu¬
but-the satisfaction of a mutual
manity of our vision, and the in¬
interest in economic and political
vincible spiritual strength of the
where
and
their
.
.
Nu
-
Enamel
offers
tration
cates for 14,519 common
Form
41
by T.
Broad
Copies
of
J. Feibleman
St.,
>•
New
filed a registration
shares of capital
12,500,000
for
25 cent par value.
Address—1 Wall Street,
Business—Investment
lock.
•
New York City.
company.
ing.
*
Registration Statement No.
(11-23-43.)
Street, Chicago.
and sale of radio
Present production con¬
sists
of
radio and electronic equipment,
manufactured for the Army and Navy..
2-5259.
Form
Underwriting;—Jenks, Klrkland
is named underwriter.
OF HAWAII, LTD.
Co. of Hawaii,
Ltd., has
registered 20,000 shares of common
par value $20.
Address—Honolulu, Hawaii.
stock,
Business—General insurance.
Underwriting—No underwriter named.
Offering—Stock is to be offered to stock¬
holders through warrants at $30 per share,
of
which
7,683 shares to be taken
by
Castle
and Cooke,
Ltd., for investment;
6,407
shares
to be taken by Hawaiian
I
for investment; shares
representing warrants which are not exer¬
cised
and
full shares representing frac¬
tional
interests will be auctioned at an
Ltd.,
Co.,
price
upset
of $30 per share on
1944,
or such subsequent date
directors may determine and
of
of
$30
board
2-5260.
Form
S-l.
P.
circular may be
firm upon request.
registration statement for
Post-War
post-war
500;
Mrs.
Florence
Address—3029
East
York
City.
Freese,'1,000; Joseph J. Neri,
and
Mrs. Marie L. Tracey, 56,945,
Janet M. Van Meter, 5,000.
will
stockholders.
Proceeds—All
selling
be
Registration Statement
S-l.
(12-1-43.)
'
•,
"
GRAHAM-NEWMAN
the
by
received
No. 2-5264,
L
t
.
TUESDAY, DEC.
Form
-
21
CORPORATION
Corporation has filed
I'egistration statement for 8,040 shares
capital stock, minimum stated value of
Graham-Newman
a
of
$50 per share.
*
Address—52
Wall Street, New
York.
Business—Investment company.
Underwriting—Graham-Newman Corpora¬
tion is named sponsor.
Proceeds—For
investment.
Registration Statement No.
(12-2-43.)
Form
2-5265.
S-5.
DATES
per
Washington Street,
Indianapolis, and 6 East
ap¬
Foster,
Mrs.
amounts to be
F. Barlle, 500;
Casagrande, 5,000; Dudley E.
1,000; Mrs. Margaret Foster, 980;
Cora
60,000 shares of
cumulative convertible stock, par
share, and 60,000 shares of com¬
mon,
without par value, latter reserved
for the conversion of the preferred stock.
Appraisal
interesting
has filed a
4'/4%
$25
An
MALLORY & CO., INC.
R. Mallory & Co., Inc.,
selling stockholders and
sold by them are; Edward
Mrs;
Offering—At market.
SATURDAY, DEC. 18
P. R.
Offering—Price to the public is $3.75 a
and net proceeds to the selling
$3,125 per share.
Names of
stockholders
proceeds
per
Registration Statement No.
(11-26-43.)
Co.,
&
share,
Jan. 31,
as
share will be dis¬
tributed to stockholders whose subscription
rights are not exercised or whose frac¬
tional interests are sold.
If shares sold
at auction are underwritten terms will be
filed
by post-effective amendment.
Proceeds—For capital and surplus.
excess
sets;
Phila.,
WEDNESDAY, DEC, 15
Trust
-
Address—2600 West 50th
receiving
S-5.
Home Insurance
TELEVISION
Business—Production
Offering—At market.
Proceeds—For investment.
HOME INSURANCE CO.
&
Television Corporation
has
filed
a
registration statement
for
70,925 shares of common stock, one cent
par
value.
The ' shares of stock to be
offered are already issued and outstand¬
Underwriting—Supervised by Calvin Bul¬
this
had from the
RADIO
Majestic Radio &
stock,
City.
Form
CORPORATION
SHARES, INC.
Dividend Shares, Inc.,
statement
& Co.,
York
Salle
La
period of 10 years to July 19, 1954.
Registration Statement Noi 2-5263.
F-l.
(12-1-43.).
MAJESTIC
interesting
South
135
Business—Apartment house.
Underwriting—None named.
Offering—As'soon as practicable after
registration statement becomes effective.
Purpose—To extend present trust agree¬
ment which expires July 19,
1944, for a
SUNDAY, DEC. 12
in
Inc.
issuer,
Address—Of
Street, Chicago.
cular discussing.
sued
Cedar Street,
20
(11-22-43.)
DIVIDEND
according to a cir¬
this situation is¬
possibilities,
trustees, have filed a regis¬
statement for voting trust certifi¬
shares, par $1, of
Mackey,
M.
president, treasurer and director
prior to proposed sale 30,272
2-5258.
STREET, INC.
R, Fugard and Frank
Lucius Teter. John
shares.
Registration Statement No.
to
amount,
MONDAY, DEC. 20
CEDAR
20
P. Isham,' trustee, 366; Elisabeth T.
Isham," 796; John I. Shaw, nominee, 1,597,
and
Rudolph
W., Glasner,
14.509.
The
and
retire,
at
all of the
used
face
promissory notes of the company in
the principal amount of $2,000,000; retire
3%
promissory notes aggregating $800,000
and to provide additional working capital.
Registration Statement No. 2-5262,
Form
S-l.
(11-29-43.)
Henry
latter
the
of
100 '/a %
2%#
Whipple & Co.,
Chicago, head
the list, with names of
others to be supplied by amendment..
Offering—Price to public to be supplied
by amendment.
Proceeds—The shares registered and to
be offered are being sold by certain stock¬
holders of the company who will receive
the proceeds from the sale.
The stock¬
holders in the selling group and number
of shares being sold are: Henry P. Isham,
individually, 2,000; Henry P. Isham, trus¬
tee, 366; Henry P. Isham, trustee, 366;
Nu-Enamel Interesting
destriction
work¬
metal
of
ing machinery.
Underwriting—Bacon,
Chicago Surface Lines
about
Street," Chicago,
63rd
Business—Manufacture
As a result we have become a
Chicago Surface Lines offer an
understand. The
single sword which combines in
interesting situation according to
Administration's
conception
of
its strength all the resources of
a memorandum being distributed
reciprocity and its apparent defi¬
the Allied Powers, and it is being
by Adams & Co., 231 South La
nition of the term, viz., that we
wielded as as if by a single brain
Salle Street, Chicago, 111. Copies
give and Latin Americans take, and a single hand.
of this memorandum may be had
are - economically
unsound and
Not for a moment do we forget
from the firm upon request.
ethically wrong, and should be
that our enemies continue to pos¬
revised.
It cannot be done too
sess formidable force, nor that to
r
W.
111.
both sides must
soon."
plied by amendment,
Proceeds—Will
be
registered
ing by the company,
of the
at Moscow.
stock,
common
shares
pledging to {hem Interesting Possibilities
good neighbor
Adams & Peck, 63 Wall St., New
ancl denial of aggression through
York City, have prepared a brief
a
system in which all sovereign
resume of the plan of merger of
nations, great and small, will have
the New York,
Lackawanna &
equal rights.
Western Railway.
Copies of this
We
are
on
the way to the
interesting resume may be had
achievement of our aims because
upon request from Adams & Peck.
of the unity which exists within
the United Nationas and which in¬
One Dollar Gets 10 Cents
creasingly has marked their mili¬
tary and political collaboration.
Caswell & Co., 120 South La
That
unity was forged domes¬
Salle Street, Chicago, 111., have
tically when the Japanese bombed issued an
analysis of an industrial
our fleet at Pearl Harbor. Simul¬
peace
stock, yielding about ten
taneously it developed between
percent; copies of thi§ analysis
the nations whose lands and pop¬
will be sent upon request by the
ulations
were
coveted by the
firm.•
greedy
dictators,
and it has
flowered in the agreements, signed
the
"Good
i
of
enjoys, and by
tioning by the Administration of
the Brazilian debt plan and the
extension of
statement for 20,000 shares
$1
par
value,
The
are already issued and
outstanding and do not cover new financ¬
registration
a
45th Street, New
OF OFFERING
UNDETERMINED
present below a list of Issues
registration statements were filed
days or more ago, but whose
offering dates have not been deter¬
mined or are unknown to us.
We
whose
twenty
increased prosperity. peoples of the United Nations.
Business—Business consists of the manu¬
praisal of the St. Louis-San Fran¬
in recent years
facture
and
sale of
specialized metal¬
cisco railroad bonds has been pre¬ lurgical, electrical and electronic products,
have clearly resulted in military
as a model for private investment
for
a
wide range of applications in the
DERBY GAS & ELECTRIC CORP.
and economic Advantages for all
pared by Raymond & Co., 148 aeronautical, automotive, electrical, radio,
which will also be necessary and
Derby Gas & Electric Corp., a subsidiary
parties concerned; they must not
State St., Boston, Mass. Copies of communication, transportation and gen¬ of Ogden Corp., registered 91,577 shares
should be encouraged.
eral industrial fields.
be lost."
of its common stock without par value with
"In any case, investments must this discussion may be obtained
Underwriting—Lee
Higginson Corpora¬ the SEC.
This stock is already issued
Dr, Jordan further stated:
tion.
be so placed, and under such con¬
and outstanding, and the shares are not
upon request from Raymond & Co.
"The central problem is, then,
Offering—Price to public plus accrued being offered by or for the account of the
ditions, that they aid the growth
dividends from Oct. 1, 1943, will be filed
how capital investments and loans
company.
They are to be sold by Ogden
of new industries and the devel¬
by amendment.
Corp., as part of its plan to dispose of its
can be made safely.
The answer
Hettleman to
Proceeds—Will be added to the general
opment of buying power in the
public utility investments in accordance
is that investments have to be
funds of the company.
Company isobtain- with the Public Utility Holding Company
borrower countries.
Investments Admit Kaufman
made more sanely than in
the
ing these additional funds with a view to
Act of 1935.
and loans will then repay in an
Address
One Exchange Place, Jersey
using them in connection with conversion
past. The excellent record of the
Ernst B. Kaufman will be ad¬
from wartime to peacetime operations and
enlarged
import-export
trade.
City, N. J.
Export-Import Bank proves that
Business
The
company
is engaged
New consumer masses for Ameri- mitted to partnership in the New the re-establishment and expansion of its
investments by public agencies for
peacetime business.
primarily in the generation, distribution
man
industry will be found in York
Stock
Exchange firm of
Registration Statement No. 2-5261.
Form and sale ,of electric energy and manufac¬
industrial development
projects,
countries which, in the course of
A-2.
(11-29-43.)
tured gas!
Hettleman & Co., 52 Wall Street,
road
building,
transportation
Underwriting—Ogden Corp., after the
political evolution, are striving
equipment and similar ends ap¬
New York City, as of Jan. 1, 1944. STOKELY BROTHERS & CO., INC.
registration becomes effective, will publicly
toward freedom from the colonial
invite sealed proposals for the purchase or
proved by the governments can
Stokely Brothers & Co., Inc., has filed a
economic system.
Latin America
underwriting of these shares.
The result
be made without the risk of losses
registration statement for $4,000,000 15- of the bid opening will be filed by amend¬
will offer many opportunities for
Haff With Ward & Co.
year
3 Vz % sinking fund debentures, due ment later.
that characterized the loan activi¬
trade
development which will
Dec. 1, 1958.
Offering—Terms will be filed by amend¬
ties of American bankers in the
Whitman C. Haff has become
Address—941 North Meridian Street, In¬
contribute to the increase of world
ment later.
'twenties.
There is no insurance
associated with Ward & Co., 120 dianapolis, Ind.
Registration Statement No. 2-5213. Form
prosperity."
Business—Engaged
principally in the S-l (9-15-43).
against faulty investment prac¬
Senator Butler's criticism of the Broadway, New York City. Mr. purchase,
processing,
packing and de¬
Amendment filed Nov. 11, 1943, to defer
tices except the safeguarding of
hydrating and sale of an extensive line of effective date.
Administration's spending policies Haff was
formerly with Louis H. vegetables and fruits.
public responsibility by suitable
in Latin America was reported in
(This list is incomplete this week)
Underwriting—Blyth & Co., Inc., and
authorities. If that is secured, pub¬
Whitehead Co.
our issue of Dec. 2, page 2233.
lic investment policy can serve
security and
Investments made
(
»
—
,
—
^
.
THE COMMERCIAL & FINANCIAL
2340
For Dealers
& Pfd,
Old Common
...
Markets
Firm Trading
1943
Missouri Pacific R.R.
Teletype—N. Y. 1-971
IIAnover 2-0050
Thursday, December 9,
CHRONICLE
Chicago, R. I. & Pac. Ry.
8
Old Pld.
BONDS
SOUTH AMERICAN
Minneapolis & St. Louis
Railway Co.
all issues
INC,
PARL MARKS & HO.
Old Pfd.
Chgo., Mil. & St. Paul R.R.
Old Pfd.
Stock
Common
New
Chicago & N. W. Ry.
FOREIGN SECURITIES
M.S.WIEN&C0.
SPECIALISTS
Bought—Sold—Quoted
New York 4# N. Y.
50 Broad Street
Members N.
Ass'n
Y. Security Dealers
HAnover 2-8780
25 Broad St., N.Y,
CHICAGO
AFFILIATE: CARL MARKS & CO. Inc.
Teletype
N.
Y.
1-1397
Kobbe, Gearhart & Company
INCORPORATED
On Governments''
"Our Reporter
Members
announcements and steps taken
But they indicate the trend
. Which is as sig¬
nificant a
of the game. » . .
For instance, the Treasury is redeeming the $420,971,000 of
1%% notes due Dec. 15. ... And it paid off $280,000,000 of-the
certificates of indebtedness rolled over Dec. 1. . . . That's a total
of $700,000,000 added to the money market in two small oper¬
ations.
Also, the Federal Reserve Banks have been in the
market on a large scale recently and may be expected to con¬
tinue active.
A fortnight ago, purchases for a seven-day
period amounted to .$532,000,000, of which $80,000,000 represented
buying of certificates, notes and bonds. . . . Open market opera¬
tions surely will be maintained as long as the market needs the
help and, judging from the figures and the lack of spirit in the
is
important.
.
Even together, the
.
.
aren't greatly impressive.
date
to
.
.
COUPONS MISSING
1-576
york
OR
Loan.
.
and the mood of the authorities. . .
development as we want at this stage
.
BIDS MADE ON BONDS WITH
Teletype
Bell
new
6015
that the institution may
cated at that time so
of thinking
.
Enterprise
2-3600
REctob
today that tell us the Treasury and Federal Reserve
are
determined to ease the money situation sufficiently to insure
the success of the January drive. . . . None of the moves, by itself,
;•
YORK 5
NEW
telephone
philadelphia
telephone '
in the Government
things which are happening
little
the
It's
bond market
Association
Dealers
Security
STREET,
NASSAU
45
By S. F. PORTER
York
New
.
.
.
enter the Fourth War
„
certain.
thing is considered
One
:
n
permitted to fall below par between now and January 18
or
between then and late February. ... Which means the buyer
has a bottom at par.
Is paying only a small premium to get his
bonds.
Is picking up interest at 2 or 2V2% for more than a
will
.
be
...
-.
month.
.
.
.
;
.
;
,
Inquiries invited
S. H. JUNGER CO.
Members
40
have any idle cash sitting around, it's a good
before the market gets out of your
If you
deal.
. .
reaclu . .
Insurance companies reported to be looking at the new 2}4s
for purchase this time.
Story is, several big buyers of
in the past have indicated to dealers that they hold enough of
that coupon and maturity classification and will switch over
into the shorter-maturing 2!4s of 1959/56 in January and Feb¬
Think it over and act
...
MUTILATED
'
•
Neither the 2s nor the 2 /2S
...
.
ruary..
Y"
...
Phone
DIgby 4-4833
.V""-yY"
'
'
.
.
.
.
this observer has
by at this moment, the fact is a eut is being
nothing official to go
drawals
from
reinvestment
factors......
.
.
that
.
.
.
easing
up
Common
L. D. SHERMAN & CO.
Members N.
the short-term debt and
on
be a restricted move and designed
getting more securities
r
tremendous need
rates, for Morgenthau simply can't
...
low
continued
money
afford to refund these debts at high
rates.
Pine
30
Y.
Security Dealers Ass'n
Street, New York 5
Tel. WHitehall 4-7970 Tele. NY 1-2218
BUY WAR BONDS
To Form Mol & Go.
The New York Stock
Exchange
firm of Mol & Co. will be form¬
ed
. . .
the great need for
longer-term classifications. ...
one more thing.
It suggests the
the
for
terrific."
indicates
it
further,
comment
to
And
.
.
summarize in two words, "it's
To
into
■
,
a
And
a
.
Mission Oil
taking
good chunk of the certificate issue, attention is focused on the
refunding schedule ahead of the Government for the next 12 months.
Coincident with the worst reports of money
.
1-1779
.
being paid off and the Treasury
With the December iy8s
in
change will be announced toward the end
with¬
the commercial banks.
And before the January
period and the Fourth War Loan become dominant
One story is
of this month.
Y.
6s, 1952
MATURITY SCHEDULE
frequency in Wall Street.
rumored about with more and more
Teletype N.
.
.
.
requirements, of course; and although
Ass'n
Indiana Limestone
'
Excess reserves now are
reserve
Dealers
Security
.
need the support. . . .
That will mean emphasis on the 214 s right down the line, from
around the $1,000,000,000 mark for the
corporations to insurance companies td banks—buying as many of
country as a whole, and the New York market is as tight as ever. . . . the bonds as
they are permitted under the Treasury's limitations. . , .
While the over-all total doesn't seem so bad, the maldistribution is
One gossip is that the 2i/4s will be worth y4 point premium by
serious enough to warrant strong action when the Fourth War Loan
mid-February.
Assuming the market is stabilized at a level
gets within talking distance. ...
.
slightly above the current mark. Y . .
And that leads, into the current rumor that "something may be
Free riding restrictions talked of more and more. . . . Seems
done soon with reserve requirements." . . .
that Secretary Morgenthau is determined to prevent people from
buying large totals on margin and making interest on the money
A CUT IN REQUIREMENTS?
borowed from banks.
It will take severe restrictions to cut
The Treasury can pay off a bit of debt here and there, but that's
out the major speculators and Morgenthau will be risking a lot
a minor supporting move at best. . . .
if he goes too far. . . .
Y
" Y
'
■
Y
The Federal Reserve can maintain its high-speed open market
list, the market, does
in
Y.
...
,
operations but the help there will be offset in major part by the
money circulation increase in December, so the net effect of open
market buying may be to keep matters under control. . . .
What's next?
And what really would be effective?
A reduction
N,
Exchange PL, N. Y. 5, N. Y.
of Jan.
1, 1944, with offices
Street, New York City.
Partner will be A. A. Mol, the
Exchange member, and George L.
Murray,
general
partners,
and
Isabel S. Mol, limited partner.
as
at 1 Wall
Mr.
...
tive
Mol has recently been ac¬
individual floor broker.
as an
and bill maturities, the Prior thereto he was a
partner in
3V4s, up for call April 15. . . . Granberry & Co.
$1,037,000,000 4s, up for call Dec. 15. . . . About $2,000,000,000 notes,
For, as you know, psychology plays a mighty important role in clue in March, June and September. .
.
And five issues of guar¬
the market.
And all that's needed is a real rally in prices to antees,
representing the FFMC, the HOLC, the RFC and the Coca-Cola Bottling
make every one forget the recent discussion of "a top being reached USHA.
If this
does happen,
it
may
psychological as much as actual effect. . . . And if the story
actual moves may be made unnecessary. . . .
for
addition
In
the
to
certificate
huge
big deals will involve $1,519,000,000
is talked about enough,
.
.
.
.
.
.
in
high-grade bond prices."
.
.
.
;
To sum it up, the chances are
good shape in time for Jan. 18.
.
.
action to
of
And
in
ease
in
while
reserve
there's
requirements.
much
not
between
Governments
time
INSIDE
New
The odds favor additional
.
.
now
...
hope for
the
and
York
being.
.
.
Finds Full Disclosure
...
important rally
War Loan, the
any
Fourth
indications today are that the market has
the
Reynolds & Co., 120 Broadway,
York City, members New
Governments will be put into
the money situation and possibly the strong step
reduction
a
Full Of Headaches
its bottom, for
seen
.
,
.
a
We
close technical
markets"
"Locked
.
market.
.
action.
;.
.
:
•
Still much bewilderment in Wall Street
,
...
.
over
the failure of insti¬
cago, St. Louis,
cinnati and Los
New York, Cin¬
Angeles,., Copies
interesting data may be
these
of
Calendar of New Security
Canadian
Page
HAY, FALES & CO.
Members New York Stock Exchange
Broadway N. Y. BOwling Green 9-7027
Teletype 2STY 1-61
Flotations.2339
Securities
Investment Trusts
Municipal News and Notes
Our Reporter's
Report
Our Reporter on
Public
Governments.
....2340
Railroad
shares.
would
5%
A
have
on this stock, which
approval of the N. A. S. D.,
mark-up
the
....2316
Security Salesman's Corner,
....2336
Tomorrow's Markets—Walter
him.
a
deal
He
to
even
New
..................2314
To Admit Three to Firm
BALTIMORE, MD.—Mackubin,
& Co., 22* Light Street,
Legg
members
of
Baltimore
the
Stock
admit John
New
York
and
Exchanges, will
C, Legg, III, William
M. Legg,
and Eleanor P. Long to
limited partnership in the firm as
of Dec.
16.
»
Empire Sheet &
on every
squander
went
York
so
far
and
as
is
Tin Plate
First Mortgage 6s,
Memorandum
available
1948
upon
request
to check with a local branch
told him that
them under their
Stock Exchange house who
minimum charge rule of $5, so we gave
left of the $2.50
Whyte
Mackubin, Legg & Co.
transaction, so we had $2.50
felt pretty good about it.
Delivery was taken and the money changed hands. Unfor¬
tunately, however,, the stock was not in g;ood delivery form
and we found it necessary to transfer pirior to redelivery.
That took a little of our $2.50, but we were still in the clear.
Today we were informed by the bank that their client ran
a slight temperature when this $7.50 charge was revealed to
the
the transaction could have been handled by
Securities
Real Estate Securities
Says
15
sell
approximately $5
run
.
of
Utility Securities.......'
10 years
recently called us for a quotation on an
from Reynolds
Co.
$11.40, but we preferred in this instance
to act on an agency basis and executed the order with a
commission charge of $7.50. We know that our fixed charges
in
have pre¬
statistical data on CocaBottling Companies of Chi¬
would have given us
INDEX
-
about it.
assume
we
.
Bank and Insurance Stocks.... .....2333
to
us
that the 2 and 3/32s cost for purchase is overwhelmed by the inter¬
over the next 35 days. .
Even if sale is indi.
might be interested we would like to
you
over-thecounter security. They depend upon us for this information
and we try to keep ourselves prepared to serve them.
We
informed them we could get $18 per share and they asked
over
or
advantage of the interest carry between
now
and the time when new bonds may be bought at par. . . .
Particularly on the 2s and 2V2S, which are selling so close to par
est to be obtained
beginning to hear about the so-called Full Dis¬
it a try on a recent trans¬
The bank with whom we have done business for
.
.
are
Thinking
tell you
.
....
Bell
Cola
&
closure Rule and decided to give
have
tutions with idle cash to take
71
& Financial Chronicle:
Editor, The Commercial
position at several recent
been frequent, as for
example, the hours last week when the 2s were bid at "3/32 plus"
and offered at "3/32 plus."
Rare are the times when a bond may
be bought and sold at the same price in the
over-the-counter
times.
Stock Exchange,
pared
had upon request
.
THE MARKET
The 2s have been in
trading
Situation Attractive
.
.
Hill, Thompson & Co., Inc.
them back what was
and now assume that the client in question
happy.—An Upper New York State Dealer.
Markets and Situations
-
120
for Dealers
Broadway, New York 5
Tel. REctor 2-2020
Tele. NY 1-2660
@FedFRASER