Full text of Commercial and Financial Chronicle : February 1, 1951, Vol. 173, No. 4982

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

W

^M.inSGAN

1951

2

F?3

ESTABLISHED 1S39

Aa—"

ADMINISTRATION

BUSINESS

LIBRARY

Chronicle

Financial

Reg. U. S. Pat. Office

EDITORIAL

In response

and

insistent

We See It

Stocks
Professor of

Washington has "frozen" prices. In defiance, so
reported, of union officials, it has likewise
"frozen" wages
cations

and salaries.

included

are

Dates and specifi¬

offing which would take care of "inequities,"
"hardships," and the like.
If one may judge by the ordinary signs of the
times, the absence of a "roll-back" (as the current
the

and

more

of the appearance

of

an

there

are

heavily

on

One

One of the chief dangers to

Big Danger

questions which at once

24

NOW

SECURITIES

MARKETS

of

silver

money

are

all

Cred¬

creditors.

inflation because they loan dollars
whose purchasing power is greater than the dollars that
they get back. Government saving bonds are a familiar
example. In the 1940s our government urged us to invest
Continued on page 22

.

page

Donald L. Kemmerer

creditors in some respect.

or

lose

IN

during

on

I

would

more

I feel

foreign policy, which I read or to

home

at

abroad, leaves me rather

and

say

that the more I read about

the urge

to put the famous question

even

quoi s'agit-il?" which Foch used

tempt

to

before

us
as

I

Russian problem
as possible, conthat to state a prob¬

the

put
as

clearly
am

.

lem

savings

power

Nearly all of
This
is especially true of people who save.
Bondholders,
lenders
on
mortgages, pebble with savings accounts,
people with insurance, and even hoarders of paper
us are

itors

on

purchasing

period of rising prices.

money

Continued

ACTIVE

of

loss

debate

I listened

vinced

of the
principal.- Investors should, be more
aware of this danger than they gen¬
erally are. It is an elementary eco¬
nomic fact that creditors lose in a

is

arises in
thoughtful minds has to do with the danger that,
One of the

prin¬

best safeguard the

can

to inject when the discussions on. a ■> |
problem were getting fuzzy or mud- .
died.
This article is merely an at¬

Inflation Hurts Creditors

practical
#.

we

can

"De

cipal of our savings?

his mind, but

questions which plague him.

it the

Under these circumstances

war.»

how

authoritarian

immediate and very

many

>

superior

The great

confused.

ahead. We face a future of
costly armaments, cold wars, and
perhaps the devastating effects of a
hot

and

which

because we anti¬

years

regime; but also because he can hardly refrain
from worry about what our system will be like
when this latest emergency has passed.
All
this and other kindred aspects of the situation
must, of course, weigh

now

that the general price level
creep
steadily higher in the

will

enterprise; not only because our economy
social organization are taking on more

our

That question concerns

period of years?

cipate

the mind
thoughtful man free of anxiety. He will
anxious not only because of what all this
well do to cherished American traditions of

and

a

especially

us

sweeping order will certainly not leave

free

for

dollars

of the

may

"rainy

What is the best way to invest any amount from
several hundred dollars to a few tens of thousands of

day."

jargon goes) of either wages or prices, for a time
and in some degree, "relieved the minds" of a
number of elements in the population, but this

,

try to put aside some savings for a

policies with relation to Russia,
viz: (1) the im¬

three differing assumptions,

Soviet rulers

(3)

in future.
us

on

stockpile of atomic bombs; and
be induced to lay aside their
plans of world conquest if a balance of power is created
against them. Favors building up U. S. strength in and
outside of Europe rapidly, and when ready to engage
in war, if necessary, should follow Churchill plan of
reaching settlement with Russia.

large

Gives comparison of fluctuations of stock
and bond prices in last 50 years, and indicates in 35
years out of 41, an investment in stocks was preferable
to investment in bonds.
Concludes this will be result

Most of

based

possibility of the coexistence of Soviet Russia and nonCommunist nations; (2) some kind of satisfactory settle¬
ment can be reached with Russia as long as we have

rising
show that

erty owners.

enough that time and only time will tell
what they really mean. Important areas are ex¬
cluded by law, and the disturbed businessman
and the indignant labor leader were promptly
assured that "adjustments" were immediately in

feel

as

but is less likely to hurt prop¬

inflation hurts creditors,

obvious

;

Mr. Cortney classifies

Economics, University of Illinois

tendency, Professor Kemmerer endeavors to

these actions, but it is

in

President, Coty, Inc.

Pointing out that prices in the long run have a

it is

Copy

By PHILIP CORTNEY

Bonds?

or

By DONALD L. KEMMERER

to what is said to be widespread
demand, the Administration at

a

Long-Term Investment: Meeting Russia's Challenge

For

As

Price 35 Cents

York, N. Y., Thursday, February 1, 1951

New

Number 4982

Volume 173

an

clearly provides half the answer.
Underlying the great debate on
foreign policy there are a few as¬
sumptions which have not been ex¬
plicitly stated and which we ought to
have clearly in mind if our reason-"
ing is to be of any help. It seems to
me
that our military strategy,
the
extent of our armament, the speed
with which
on

which

we

of

consider valid.
three

main

should

these

Let

me

on

Philip Cortnfcy

we

first state the

assumptions which

in the discussions

(I)

depend

rearm

assumptions

V

„

r

implicit or explicit

are

Russia

As the magazine "Life" put it recently, "the co-

Continued

on

page

27

REGISTRATION—Underwriters, dealers and investors in cor¬

afforded a complete picture of issues now registered with the SEC
potential undertakings in our "Securities in Registration" Section, starting on page 34.

porate securities are
and

BATES MFG. CO.

State and

FINE SPINNING

BERKSHIRE
DEWEY

&

ALMY

Municipal

DWIGHT MFG. CO.

HOLLINGSWORTH

WHITNEY

&

Franklin Custodian Funds,

inc.

600 Brandies

KEYES FIBRE CO. CI. A & Com.

LUDLOW

A Mutual Fund

SALES

MFG. &

^

MCDONNELL AIRCRAFT
N. E. GAS & ELECTRIC

CO.

SHOPS

SACO LOWELL

across

Bonds

Canada

Monthly Commercial Letter

WEST POINT MFG. CO.

upon request
,

duPont, Homsey & Co.
Members

31

New York

& Boston Stock

MILK STREET, BOSTON 9,

MASS.

Tele. BS 424

Tel. HAncock 6-8200

120

Exchs.

BROADWAY, NEW YORK 5, N. Y.

Tel. WOrth 2-0115

THE NATIONAL CITY BANK
be obtained
investment dealer or

Prospectus may

Free

from

your

OF NEW YORK

64 Wall Street,

New York 5

Bond Dept.

Teletype: NY 1-708

#
Underwriters and
Distributors of

Ill

(Incorporated)
Established

Devonshire Street

BOSTON
Los

Angeles




1699

CLEVELAND
Chicago

New York

Securities

OTIS & CO.

VANCE, SANDERS N. CO.

New York

Cincinnati

Chicago
Columbus

THE CHASE

NATIONAL BANK
OF

THE CITY OF NEW

YORK

Portland, Ore. San Francisco Los Angeles

CANADIAN

Company

(all issues)

Canadian Superior

Oil

BONDS & STOCKS

Central Vermont
Public Service Co.

Company of California

COMMON

Steep Rock Iron Mines

and

Corporate
authorized dealers or

Municipal

Brown

Agency: 20 Exchange PI.

Bond Department

markets in

We maintain active

Prospectus from

IS etc York
Seattle

Massachusetts

Canadian Bank
4@oim
Head Office: Toronto

FRANKLIN DISTRIBUTORS, Inc.

Tele. NY 1 -31S

Investors Trust

The

■"

Dallas
Toledo Buffalo

Denver

CANADIAN DEPARTMENT

Goodbody & Co.
ESTABLISHED 1891

MEMBERS NEW YORK

Dominion Securities
Grporatiom

STOCK EXCH.

40 Exchange Place,
115 BROADWAY
NEW YORK

105

New York 5, N.Y.,

W.ADAMS ST.
CHICAGO

IRA HAUPT&CO.
York Stock Exchange
Principal Exchanges

Members New

and

other

HI Broadway,
WOrth 4-6000

Teletype NY 1-702-3

WHitehall 4-81611

Boston

N. Y. 6

Teletype NY 1-2708

Telephone:

Enterprise 1820

2

The Commercial and Financial Chronicle

(522)

The Security I Like Best

IN

MARKETS

TRADING

American Tel. & Tel.
Rights & 3%% Conv. Deb.

participate and give their

Issued

When

reasons

for favoring

(The articles contained in this forum
Prospectus

request

on

This

A continuous forum in which, each week, a different
group of experts
in the investment and advisory field from all sections of the
country

they to he regarded,

are

offer

as an

Forum

Their

are not
intended to be, nor
sell the securities discussed.)

to

P.

R.

New York Hanseatic

Teletype NY 1-583

R.

Maflory & Co. Inc.

In

proposing a candidate for
Security I Like Best" forum,
have been influenced by the di¬
of

broad

audi¬

have

meets

J.

Exchange

NEW YORK 5

the

the

measurement

equal

security

certain

materials

of

that

for

I

T.

J.

Moynahan

avoided

-

THEODORE

that

tor

Bassett Furniture Industries

elements

desirable

less

for

estimate

United States Foil, Inc.

is

This

consideration.

Camp Manufacturing

While

profits
fair

ter

(as I

Dan River Mills

meets

broad

security

Lynchburg, Va.
TWX LY 77
'

if

V

.

can

sense

of

old

may

to

some

than

on

he pointed out
the advan¬

tages
then
at '

be obtained by cit¬

can

ing recent statements by Defense
Director Charles Wilson to the ef¬
fect

that

electronics

the

industry

will, in 1951, produce $1.5 billion
of
a
•

148 State St., Boston 9, Mass.
Tel.

CA.

7-0425

Teletype BS 259

:

:

military devices and will have

military backlog of over $5 bil¬

lion

before

These

the

figures

against

an

end

of

be

can

the year.

measured

estimated production Of

billion

$2.2

dends

'

impressive.
lation

ties

PUERTO RICAN

I

_

GENERAL,

and WATER

tablished in supplying component

parts to

a

and

wide

the

range

of industry

aircraft,

electrical

communication, radio

television,:

•

and

and

transportation

fields. The business has been built

Paul Frederick
& Company
Pine Street,

NY

on

margin,

In

net

excess

of

addition, the

paid dividends in 18

the last 22 years and

consecu¬

tive payments have been made in
the

last

15

In

years.

through

paid

were

the

1949,

10-year

43.9%
in

out

of

divi¬

dends.

•

In

premium

as

quality in the trades served.
include

Westinghouse,
General

Motors,

Chrysler,

Ford,

Electric,

Bendix,

neered

has

qAllen & Company
30 Broad St., New York, N. Y.
Tel.

NY




1-1017

and
man¬

ufacturers.
The

—

Cus¬

General

leading radio and television

Bought—Sold—Quoted

company

has

been

paid

cluding

in¬

rent

dividends,

cur¬

and

also

titanium

received

has

pio¬

research

development

and
con¬

tracts from the U. S. Government
under

which

which

are

a

number

superior to

of

pure

Investment

Mission

Tel. HUbbard 2-5500

Dealers

•/

Ino.

Tele. BS 142

*

Portland, Me.

Enterprise 2904

Hartford, Conn.

Enterprise 6800

Open End Phoneto New York Canal 6-1613

Chain Store Inv.

Corp.

Worumbo Mfg. Co.

-

Merrimac Hat Corp.
Boston Wharf Co.
Mex. Lt. & Pr. Co. Ltd.
Bought—Sold—Quoted

companies

wide

a

there

However,

are

range

few

a

stances where the stock of

another

in

in¬
good

a

practi¬
cally exclusively, so that in effect
the
company
desired can be
bought at a substantial discount
by, the purchase of the stock
sucH1 holding company. :

meas¬

security values which

include dynamic growth prospects
within

growth industry,

a

ment

quality,

tions and

strong

dividend

of

manage¬

stockholder

rela¬

particularly available in
purchase of Reynolds Metals
through the acquisition of United
States Foil.
I, therefore, recom¬
the

mend

purchase

United

of

States Foil B, now

It

almost.
Metals
1

Reynolds

55%

Co.,

Metals

in

751,828 shares,

or

of

1/10 shares per

U.

,the

Foil, which has 598,092
shares
outstanding;
outside
of
$263,671 of funded debt there are
6,771

shares

cumulative

of

leges and is held by the Reynolds
family.
The B stock has equal

proportion

of

dividends

maintained,
turn
for

is

5%, but

if

the

earnings paid

out

in

recent

return

a

consis¬
parallel

the growth in the business
may be

anticipated. At its
around

current

high when

net earn¬

than

3%

and

reported

ratio

was

over

current

the

yield

its 1946
was

less

price-earnings

28 times.

60,000

with

and

shares.

Exchange

Bell System

PEnnypacker 5-2857
New York

•*

PH

Teletype

771

City Tel.: BOwJing Green 9-4818

Direct wire

to Ames Emerich,

Chicago

BUY

class

A

manufacturer of

aluminum
1939

and

primarily
latter

as

1950)

metal

has
a

field.

funded
some

of

foil

become

and

since

manufacturer iii
It

has

common

and

million

worth

of

SAVINGS

BONDS

N* Q. B.
OVER-THE-COUNTER
INDUSTRIAL STOCK INDEX
12-Year Performance of
35 Industrial Stocks

some

capitalization, including a
debt of $40 million and

$62

S.

to

1,369,759 *
shares (10% stock dividend given
senior

U.

assets.

Reynolds Metals Co., selling at
(N. Y. Stock Exchange); is

the

Phila. Telephone

The

40V2

in

price of

27, Mallory is still selling

approximately 15% below

company's sales volume increased

preference

a

to

and

divdends

Is
re¬

expectation

Beyond that,

higher

years

better than 6%

reasonable

a

1951.

tently

a

of

Members Phila.-Balto. Stock

123 South Broad St., Phila. 9, Fa.

pre¬

dend paid in 1950, the stock
pro¬

yield

HenryB.Warner&Co.,lnc.

S.

ferred

a

Utility 5 ¥2 6

American Marietta

Reynolds

latter stock has sole voting privi¬

vides

Central Public

is more than
class B stock of

the $1.30 divi¬

of

Foote Mineral

Central Electric & Gas

which

marketability.

the

Penna. Power & Light Common

This is

the

basis

On

*

Teletype BS 328

Pennsylvania Railroad

of

owns

on

Street, Boston 9

"Philadelphia Electric Common

company

1928.

urements of

based

qual¬

Milk

in extensive amounts is

company

held

31

Tel. HUbbard 2-6442

rrpscellaneous com¬

covering

panies

Ralph F. Carr & Co., Inc.

Oil, Pacific Western

Oil and other

to

market

by around 50% and that
be

closed

holding

business

of the best

one

titan¬

For 1950 it is estimated that the

and

Counter

as

alloys

ium have been
developed.

ings after taxes will

be

can

Trusts,

the

ity issues traded in the Over-the-

in

company

in

Securities

have numerous in¬

We

in

stances

selling at 30%
(N. Y. Curb), which is a company
that transferred its properties and

regarded

position,

regarded

are

tomers

EXPRESS

sum,' the

product and top en¬ finances,
consistency
gineering basis and Mallory prod¬
payments, trade

1-2643

AMERICAN

on

Theodore Prince

like
re¬

assets,

and

far in

are

debt

company has

and

better

a

ucts

New York 5

WHitehall 4-1875

Phone HA 2-2600

are

current liabili¬

cover

good

a

long-term

of

Mallory

earnings

current assets

aspect, Mallory has been well es¬

including
REVENUE OBLIGATIONS

70

to

by

of

Debt is modest in

quick assets

.

AQUEDUCT

position

earnings

Apart from the defense program

on

capital

'

_

of

Assn.

$28

since

basis

balancq sheet and working

industry, in period

the

by

1950 for civilian purposes.

Firm Markets

Nat'l

31 Milk Street, Boston 9, Mass.

n o w

which

those

The

Some idea of the extent 6f this

Request

on

/

/

expansion

Analyses

J. B. Maguire & Co., Inc.

Members

selling at 150;
then
owing
$73 back divi-

discount.

VERNEY CORP.

selling

137,

A favorite and attractive form
metallurgic ^com-- An added and important reason
ponent parts and equipment Mal¬ for a generous capitalization of of investment is the purchase of
lory- is in a position to enjoy full profits is the fact that Mallory good securities or a good security
through the purchase of holding
participation in the dynamic .ex¬ products and
engineering enjoy a
companies, which are selling at a
pansion in view for the electronic top rating in a dynamic field.

*

Bought—Sold—Quoted

and

industry.

NICKEL PLATE

the

of

preferred

viewed

liberal

more

a

8,
where

1949,

reports,

profits which are in¬
flation-born, inasmuch as Mallory
has always been able to keep a

Dec.

on

cur¬

Moreover, it is logical that earn¬
ings of Mallory should be capi¬
talized

Manufacturing

analyzed

was

by the author
in this column

still owing
P. R.
substantial
the common stock I then
part of volume and $45;
recommended at 87, now selling
As a manufacturer of literally earnings gains in good
years and
at $212 and having paid no divi¬
thousands of items which can be thus has
consistently raised its
generally classified as electrical, earnings and dividend plateau. dends, but to be split 5-for-l.
compapy

electronic

MAINE CENTRAL

and

expression, "it is a good
to have stock in," i.e.,
Mallory & Co. Inc.

the

STRADER,TAYLOR&CO.,lnc!

analysis

in the true

described

be

Life Insurance Co. of Va.

one
requirements of

the

which

a

immodestly state)

may

assump¬

impressive when

very

Bates

of

hidden value situation, somewhat
akin to- "Nickel Plate."
The lat¬

since 1940.

My selection, therefore, is

Commonwealth Natural Gas

*

instance

earnings would at least
indicated results for 1950.

earnings

V

another

that

compared

branch offices

1

1951
a

our

LL.M.,
City

York

New

profits of
Mallory do not appear unusual.
However, it should be noted that

is

NY 1-1557

Investment Counsel,

little against year-to-year comparisons

present are currently given

St., New York 4, N. Y.

HAnover 2-0700

PRINCE

having one' favorable Mallory is a growth company and
characteristic which, at the mo¬ the wide
improvement in earnings
ment, is so much of a market fac¬ expected to be reported for 1950

American Furniture

25 Broad

Direct wires to

pro¬

military

equipment.

or

premature, it is

rent

Counsel,

NewOrleans, La.- Birmingham, Ala.

be

may

When

In

Investment

Members New York Stock Exchange
Members New York Curb Exchange

M., New York City. (Page 2)

■securities

Trading Markets In

*

Steiner, Rouse & Co.

of

period

Bought—Sold—Quoted

J.

Mobile, Ala.

plants

tion

choice,

LL

engaged to ca¬
pacity without marked changes in

be

have

long

a

seems

facilities

best

s.

Prince,

earnings devel¬

to military needs can be
readily accomplished, inasmuch as

an

this

versus

Analyst,

City. (Page 2)

civilian

my

all

value

3D

I

composing the
yardstick of
for

Tel. REctor 2-7815

LD

Moynahan,

'

.now

qualifications

Members

120 BROADWAY,

Louisiana Securities

United States Foil, Inc.—Theodore

purposes will take up an increas¬
ing proportion of Mallory's output
in
1951.
This change-over from

is

selected

in

and

over

duction

issue

opinion,

Curb

Selections

Arthur Warner & Co., New York

the 483,500 shares

satisfactory perform¬

very

years.
It

to which

forum

an

Stock Exchange

or pur¬

the

poses

directed.

pONNELL & CO.

a

opment

which,

York

a

on

of sales

I

this

Since 1917

veals
ance

ence

Rights & Scrip

New

$2.33

vs.

1949—based

of $4.50 a
share shown in

outstanding. Examination of
the company's previous record re¬

versified investment needs

York

share

neighborhood

"The

Specialists in

New

the

Alabama &
and

now

P.

Broadway, New York 5

BArclay 7-5660

in

MOYNAHAN

Analyst, J. Arthur Warner & Co.,
New York City

Corporation
120

J.

Thursday, February 1, 1951

.

Mallory & Co., Inc.—Theo¬

dore

THEODORE

.

Week's

Participants

particular security.

a

.

pur¬

chase
money
mortgage,
and
a
$5.50 cumulative convertible pre-

BOOKLET

on

page 33

REQUEST
f

National Quotation Bureau
•

Incorporated

46 Front Street

Continued

ON

New York 4,

N. Y.

Number 4982

Volume 173

...

EDITOR:

LETTERS TO THE

INDEX

Into

"Are We Falling

Trap?'7

another

is made in today's
publication
of some problem.

Provision
for

issue

tive

by

article

the

to

Melchior

Jan.

of

our

tions set

McCabe

B.

In

11.

his

comments

Palyi's

Doctor

we

or

ceiling
pay

S.
on

E.

regula¬

C.

the miraculous

for obsoletes.

6

i_J.

Our Defense Program Must

Securities Dept.

Obsolete

Prevent War and Inflation

—Marriner S. Eccles

'

a

System in Wartime

Role of Federal Reserve

—Thomas

President, The Pennsylvania
Railroad Company

censorship

prices

central

*

S. FRANKLIN

WALTER

His¬
tory's Greatest Trap?", which ap¬
peared on the cover page of the

Palyi, "Are We Falling Into

"Chronicle"

on

*

x

4

Glancing at 1951—Melchior Palyi—

received rela¬

of the letters

more

attack

MIRACLE

Cover

_

——

UNCENSORED

Bonds?

or

No

"Chronicle" of January 11.

Palyi's article in the

Kemmerer

—Donald

Stocks

Investment:

For Long-Term

AMD COMPANY

Cover

Meeting Russia's Challenge—Philip Cortney..

,

connection with Melchior

in this issue in

More letters given

Page

.

3

llCHTEIMM

"

Articles and News

History's Greatest
,

(523)

and Financial Chronicle

The Commercial

WALL

©9

6

.__

STREET, NEW YORK

Telephone: WHitehall 4-6551

Inflation and Fiscal Disaster—Harry A. Bullis

How to Prevent

8

and
Babson

9

L. H. Gavin

11

What About the Stock Market?—Roger W.

analyzed Soviet suggestions are both interesting
and provocative and it seems to
aggression techniques and asserted
me that he has made a substantial
that the United States must either
contribution to public discussion
(1 y restrict its defense zone to the
Western
Hemisphere or
(2) of this important subject.
*
*
*
promulgate a new Monroe Doc¬
article, Dr. Palyi

Status of Our Defense in Europe—Hon.
A

Savings Program for the Emergency—Donald B.

Harrisburg Steel

Woodward 12

.

i.

specifying the areas which
are prepared to defend against

we;

C. KENNETH

:

FULLER

communism.
Con¬ President, The Paterson Savings
and Trust Co., Paterson, N. J. tinuance of our present foreign
I read Dr. Palyi's article with a
policy, and a policy of full and
permanent mobilization, Dr. Palyi good deal of interest. I find my¬
warned, can only lead to national self very much in agreement with
his basic thesis.
-.
I made sim¬
bankruptcy.
In
addition to the following ilar comments under the section
letters, reference is made to the entitled "Outlook" in our annual
.

appeared in our
issues of Jan. 18 and 25, and still
others

that

.fact

will

more

in

accommodated

be

subsequent issues.

war

BUFFETT
from Nebraska

U. S. Congressman

Inasmuch

as

I

predicted almost

this

trap
would
take us into it, naturally, I am in
very
close agreement with Mr.
Palyi on this phase of his dis¬

four

ago

years

that

Truman

be set and

would

comments

I teel the Govern- "
to preclude a
with Russia.
As indicated
the above, I dont happen to

war,

Kaiser Steel

talyi's

Melchior

on

*

*

' y.'

*

,

<*'

10

Policy.,.

•

Prefer

Steel

Ludlum

Plain

defense

JAMES

G.

would be in it already.'
as Dr.. Palyi
sug¬

Reports,

Annual

Allegheny

says

Security

.

Topping

Market

the

Exchanges

f

t

.

SjJ

.

-

and

den

18
Best

RALPH E.

FLANDERS

Vermont
I am strongly in sympathy with
the position taken by Mr. Mel¬
chior Palyi and have more than
that

the Senate floor
performing in ac¬
with the desires of the

stated

As

cordance

W.

on

f

.....

think

:

-

x

x

Man's

Canadian

W.

GASSER

National Bank,
Gary, Ind.

Dr.

great believer in the old Monroe
I have felt that we do

a

rereading Mr.: Palyi's
article for detail suggestions as to

y

am

interested in offerings

From

Funds

Mutual

NSTA Notes




-

Haile Mines

—

16
8

,__

Our Reporter on

-

14

Boston 8

Hubbard 2-8200
Glens Falls

5

—

39

—.

36

Securities Now in

Registration

Tomorrow's Markets

Twice

Published

Weekly

and
CHRONICLE

Drapers'

-

Every

-

Worcester

Thursday

Chicago

city

LI

Eng¬

Di-Noc

Company

4?

fc

1879.

Publisher

Business Manager

VoSonTT'erritorYe"'''and^Membm
Pan-American
Dominion

Other

of

Union,

Other

market quotation

per

$48.00

year;

per

ot

135

news,

bank clearings.

etc.).
South

La Sa'le St.,

Stromberg-Carlson

Virginia Dare Stores
%

in

Bank

and

*30.00 P<*

..

,

.

year.

Bought—Sold—Quoted

Countriep, $52.00 per year.

1951

ad^

-$45.00

Canada,

Publications

QUotation

Record

—

Monthly,"

'Foreign postage extra.)

Note—On account of the fluctuations in
<-he rate of exchange, remittances for foreign subscriptions and advertisements must
(Telephone: STate 2-0613); be made in New York funds.

news,

Offices-

3

C.,

Subscription Rates

(general news and

corporation

ard

Other

E.

Reentered as second-class matter Febru-

SEIBERT, President

Dirt!''rtttSi Sue I
state

Schenectady

SEIBERT, Editor &

London,

Edwards & Smith.

c/o

2-9570 to 9576

D. RIGGS,

40

Gardens,

.

COMPANY, Publishers
York 7, N. Y.

DANA

street

St. Louis LMo.

Copyright 1951 by William B. Dana

Office

Thursday, February 1,

records

1-5

S. Patent

509 olive

30

._j-.

r

B. DANA

WILLIAM

2

5

1

Park Place, New

25

34

(Walter Whyte Says)

COMMERCIAL

WILLIAM

——

——

—.

You

and

Washington

Stix & Co.

15

Corner

Trade and Industry

The State of

MEMBERS

28

Like Best-

The Security I

PL, N.Y. 3

& NY 1-1828

MIDWEST STOCK EXCHANGE

—18

Securities

Securities Salesman's

40 Exchange

Teletype NY 1-1825

12

1—;

Securities—

Utility

Railroad

.

8

—____

—

Governments

MACKIE, Inc.

HA-2-0270

20

Security Offerings.—

Prospective

&

32

_______

Report

Reporter's

Our

Singer, Bean

7

——

„____

—

Bankers.—

Observations—A. Wilfred May—

HERBERT D.

50 Congress Street,

Teletype—NY

Chicago

17

16

—

News About Banks and

REctor

Members New York Curb

HAnover 2-4300

-

Lear, Inc.

-

—

FINANCIAL

of

Spencer Trask & Co.
Exchange
New York 4

Continental

Copper & Steel

30

Washington Ahead of the News—Carlisle Bargeron—__

WILLIAM

Albany

Field—

Recommendations

land,

preferred stocks

25 Broad Street,

Giant Portland
Cement Co.

13

—_ —

Indications of Business Activity———_

Continued on page 23

High Grade Public Utility and Industrial

York Stock Exchange

v

;

————.Cover

Einzig—"How Britain Resists Inflation"

Reg. U.

New

26

; •:

•././

:

Securities

......

Members

..

Remington Arms

—

Coming Events in the Investment

The
are

'

Bookshelf

Dealer-Broker Investment

Public

Personally, I have always been
Doctrine.

We

r

Stocks—

Insurance

and

Business

Palyi's position is
well taKen and 1 think he has
summed it up very nicely.
I

Politburo.
I

See It (Editorial)—

We

Bank

President, Gary

are

we

;;

hv;.r ;

\

vj.

armament spending,

x

|U. S. Senator from

once

19

,____

Regular Features

■.

Hon.

.

aggression.

ijt

I'fi

New York 6

Teletype NY 1-3370

9-5133

Philadelphia and Los Angeles

_—,_i

Transactions

Defense

v

quite right in

is

Russia is inevitable.
4

in

I feel, therefore,

.

New York

j

BO

Deposits of Mutual Savings Banks Now Exceed $20 Billion—__

they'll never need to go to war
to win their ultimate objective.

DONOVAN

Congressman from

S.

'-'1 ■;

Broadway,

18

Senator Williams of Delaware Holds Strong Economy as

that Dr. Palyi
saying that our
basic problem is the maintenance
The only comment I can make
of a sound economy within the
is based upon the opinion I have
framework of a military potential
had
for years—that war with which will be a deterrent to sud¬
U.

;

.j

J.F.Reilly&Co.

Furthermore,

Dr. Melchior Palyi's article ap¬
then withdraw with a few peace¬
proached our current internation¬
ful gestures and see how far the
al' problem
from a very sane
economic dislocation carries us on
viewpoint, and I sincerely hope
the way to collapse. If it doesn't
that the executives of our country
go far enough the first time, try
have an opportunity to sit down
it
again. And if we don't show
and read it carefully, for I think
more power and intelligent lead¬
it should be an intelligent guide
ership in Washington than we
to future policies of America.
have during the past few years,

Hon.

.

Direct Wires

gests, the Marxist Doctrine and
tne policy which has been pursued
ready to accept
oy
me
Politburo indicates "that
the solution he proposes, because
they expect the ultimate collapse
1 am extremely doubtful of our
of
our
economic system which
ability — biologically,
militarily
will provide the best possible op¬
or economically—to dominate the
portunity for Communist control
pniverse such as our present pro¬
of the country.
gram involves.
*
*
*
It seems to me
if I were in
Stalin's place I'd do exactly as he
C. D. CLAWSON
is doing, namely, scare the day¬
President, Ferro Enamel Corpora¬ lights out of us to the extent that4
we will blow up our economy by
tion, Cleveland, Ohio

'

'

Incorporated

Corp._____

Over-the-Counter

Finds

not quite

am

'

17

Level

61

Stockholders

1

1

3

Article)

cussion.
I

Portsmouth Steel

■

(Letters to

Purchasing Agents Report Confusion in Buying, With Produc¬
tion at High

Units

21

History's Greatest Trap?"

World Bank Adopts New Borrowing

..

that we

we

17

Must Be Based on Sound Monetary

Falling Into

We

Editor

will have direct
war with Russia in
the near fu¬
ture—unless we start it. It seems
to me she has given clear evidence
of this fact up to date, because if
arfe naa been ready—and wanted
believe

Impending Major War

—_—

"v

''

..

"Are

■

Newport Steel

Foundation!—Leland Rex Robinson.

-

take

should

Taggart—

National Strength

-

to the steps

as

A.

—Charles

.

for specific

You asked

ment

HOWARD

Stock Market Action Indicates No

report.

from
Hon.

-

r

15

—Lionel D. Edie

of

the march

Jessop Steel

Outlook

of Production and the Business

The Battle

13

1

1951—Jacob Baker_

What to Expect in

.

trine

theodore young
40

Exchange Place, New

WHitehall 4-2250

& co.

York 5, N.I.

Teletype NY 1-323R

4

(524)

The Commercial and Financial Chronicle

centers

Glancing at 1951
By MELCIIIOR PALYI

Dr.

Palyi predicts 1951 will ba year of transition from a freely
Spending Hand-Out State to doldrums of self-inflated and

cludes decisive factor in turn of events is

Forecasting the
nomic

job

outlook

near-term

should

be

an

easy

uncertainties
and

fluctua¬

tions

should

well

to

a

defined

-

plan, which
far

so

the

is

in

this

country,
certainly not
beyond

gen¬

eral and oftenk

Dr.

Mclchior Palyi

value outlines
of

policy. While the ultimate

jective

is

understood

mobilization
sources,

no

precise

of

the

one

idea

to

ob¬

be

the

national

re¬

to

seems

about

have

its

a

scope,

and

tional

and
an

common

government's

denominator,

domestic

poli¬

cies consist of the attempt to
the maximum of armaments
der

with

way

ineffective

even

is in the offing.
starting defense produc¬

tion

a

1951

propriations
months

vocal

the

of the

minimum

of

curtailing civilian out¬
intermediary period of
and
unemployment
is

lay-offs

prognosticated.
Of

get
un¬

make the most

"emergency." The extrava¬

course,

fraught

transition

every

with

is

adjustment

prob¬

lems, but to expect serious

reper¬

American industry and the readi¬
ness of the American
government

gant Welfare State still flourishes
the
"austere"
Garrison

to pour out subsidies.

Industry will

readily

multi-billion

State

flow of military orders, while

while

reluctantly

and

the

chiefs

goes into motion

Washington

,

wrangle

for

bureau-

positions

power.

It

;

has

been

of

scarcely

noticed!

military expenditures
slightly higher than in

our

ran

very

the

same

quarter of last year!

are being
military
equipment;
synthetic plants and Liberty ships
are being
demothballed, etc. Con¬

trol

for

measures

largely of the
like the micro¬

are

ineffectual type,
scopic increase of
terest

rates

and

short-term
the

is

government
in

the

deliberately

applying the brakes on the
The
rising demand

raising

in¬

of

of

manpower
and the

take

will

be

a

year

mortgage loans
this nation

strategic

at

sumes

$10

annual

an

billion

rate

and

over

of

of

available

tive

to

interest-b

long-term

about

goods

tracts

1951

union

out

more

of

the

than there is in

take

collective

bin

it.

Small

wonder, loo, that profes¬
professionals and amateurs

sors,
are

prognosticating another

5

to

as

governmental

what we
something

is

costs boosted

matic

to

high

a

"renegotiated" to the bone.

contrast,

in

$30 to $40 billions. Which is what

trying

issue;

In

inflation

means:

by

earing, non-bankable,

purchases and municipal projects
thoroughly scrutinized and con¬

its

by

restored

save

into

above

consumer

uses; farm prices freed
parity supports; the incen¬

from

con¬

ap¬
10% rise, in 1951, of wholesale
every
two prices.
Why just 5 to 10% is their
military (and well-guarded
secret, with no hint
projects keep ex¬ as to whether or not it includes

so,

veterans,

expect
else: food

can

by the parity magic;
hiked by the auto¬

wages

cos.-of-iiving^ formula; raw
material output stimulated
by un¬
healthy inflationary subsidies, etc.
Administration
have

in

and
Congress
putting in ceilings
taking
out
floors.
"fair" price standards

mind

instead

of

Voluntary
bound

are

to

turn

into

involun¬

be

work thin

the

relied
so

labor

as

upon

aid

and

$10-$15 billion.

makes people run out of their

A total of well over

$100 billion

—30 to 40% of the national
output
-—will be

that.

How

will

it

be

Federal

accounts

may

cally balance until May
But

since

the

as-you-go

down,
lion

talk

practi¬
June.

or

about

mobilization

a

pay-

has

died

deficit of about $10 bil¬

a

is

fair

a

prospect

for

the

follow

may

substantial

the

on

heels

increase

of

corporate

and

excise

1950.

to

large

But

a

will

have

in

the

levies

extent,

to

be

inflammatory

creation.

of

income,
in

the

covered

bank

de¬

Appealing to the

saver

promises scant

view

of

the

suc¬

forthcoming

savings bond maturities, if "only"
to the tune of
$1.5 billion in 1951.
The

haps

bulk

of

much

as

fresh

funds,

per¬

$30 billion, may
of the liquid
reserves of
business, the issue of
new
corporate and municipal se¬
have

to

as

come

out

curities, and—bank loans. The
ter

reached

$53

billion

December, having
bled in

a

Small

by

lat¬

early

more

than dou¬

that

wholesale

decade.
wonder

-

-

?

prices have risen by 18% with the
official cost
is

again

to

of

living index, that
be revised,
limping

along.

Disconcerting symptoms of
inflationary psychology are

an

emerging.

Members New York Stock

•

Home Office: Atlanta




•

•

;

Phone LD-159

the

in

forthcoming,

is

printing

a

press

bled

run-away

in

1949-50,

pours

it

fashion.

but

her

Foreign

draft tend to

labor

and

to

uncon¬

Situation

savings bonds

appreciably
bad

omen

outruns
for

new

sales—

However,

the

foreign

the

depression,'savings

Treasury's

deposits

commercial 'banks .'are
severa 1

combined with vital

money

They keep buying "at
price" when they expect no
food, no roofs, and no clothing,
-°nv

But when there is enough of those
essentials to go around, even of

autos and cigarettes, they are very
reluctant
to
revolutionize
their
household

habits

practices.

Nor

financial

and

will

in

situation

will remain the decisive factor in
the domestic picture.

It is

foregone conclusion that

a

(unless

Mr.

action"

Truman

the

will

has

a

Korean

somehow

to

up

result

will

bad

very

mouths, the

our

be—more

taste

aggression,

Tibet, Indo-China, etc. Are
fight

it

Red

out

against

Orientals

Americans

in

able balance of trade (for the first

since 1893!),

year

to

of

morass

of

on

5

page

LAMBORN & CO., Inc.

further de¬

or a

99

cline

of the fantastic gold
hoard,
top of last year's $1.7 billion
loss, should occur, as they mast

on

likely

we

millions

the

Continued

in

budgetary deficit
size, an unfavor¬

a

of unusual

even

be

since the

more so

withdraw their fundamental trust
in the Dollar if

new

"police

deep
scars
on: our international
prestige and
national honor; our strategic posi¬
tion; our pocketbooks. All of this

WALL

STREET

NEW YORK 5, N. Y.

will.

They know
better
Europeans, who already
expect an early dollar devaluation
than the

and

smuggle

and

capital

SUGAR

Morocco

to

Raw

—

Refined

—

Belgian Congo, Mexico, Uru¬
and

guay

than to

South

our

However,
to

ures

backing

Africa,

rather

"freezing"

meas¬

shores.
some

DIgby 4-2727

protect the dollar's gold
are

Liquid

Exports—Imports—Futures

possibility.

a

In short, we refuse to believe
that the Soviet threat to the Old

World, serious

as it may be, must
bankruptcy to us—unless

mean

our

own

brings it
about. It contributes by its prop¬
aganda that the emergency will
last

forever
have

bilization
60

(as if
to

we

could

redouble

six

.every

years);

and

Established

a

ally

by

H. Hentz & Co.
Members

our

military

mo¬

for

New

York

Stock

civilian

New

York

Curb

months

reckless

unnecessary

inflation-creating,

declining

must

consecutive

fiscal

forms

be, of
and

of

York

New

spend¬

Chicago
New

Exchange
Exchange

Exchange.
Board

Orleans

'■And

Exchange

Cotton

Commodity

hodge-podge of many mutu¬
offsetting, i if not actually

Some

J

and

ing (against which even Eisen¬
hower warns); and by the promise
of

1856

government

•

pl^n to embark

through

more

shortages.

Decisive

a

Factor

un¬

(Ger¬
many's money volume almost dou¬

would

on a new bond
drive. For the first time since
the

-

-,BROKERS of BONDS, STOCKS, COMMODITIES

Private Wires

•

The strength of the stock
mar¬
is one of
them, but also a
reflex of the
Republican victory.
The redemption of
a

UNDERWRITERS and DISTRIBUTORS
of INVESTMENT SECURITIES

-•

ket

Exchange and Other National Exchanges

of

a

at

purposes

financed?

cess

'

money

less

genuine

e

more

out

(non-defense) housing
equipment of $10 billion.

posit

•

price

adds

industrial

adaptability.

manpower

the

leaving

dislocations, will proceed "smooth¬
ly"—more smoothly than is desir¬

Established 1925

raise

liquidated,

to spread

BANKERS

is not simply the fact that

corporate

through

INVESTMENT

ages and

frightens
people
out
of
their
monetary wits is the prospect of

market's

monstrosity.

loses its cost-saving

con¬

should

use¬

Over-employment, material short¬

brain-storm)

for

partial

are

price-fixing

selj>defeating

trolled prices did not go up more
than in proportion to ours.)
What

disregarding minor

of

all-round

Business under unpredictable ex¬
ecutive orders by the authorities

cur¬

rency

and

to preserve intact

majority

and

But

controls

subsidies

second half of 1951, even
though
working
crews
for
the another
boost of the income tax
forthcoming superboom.
plus a general sales tax,
possibly
It may be
safely predicted that also some form
of forced
savings,
the transition,

A

less;
is. - a

mili¬

their

able.

controls.

more

"flexible"

"mortgaged,"'and over¬
slow whelmingly
for
n on-productive

Also, manufactur¬

any.

down

and

its
not faced with the necessity of reduce
productivity.
Taxes,
abroad, incisive
privations—and of impro- like the excess profit levy, which
around $50 billion.
vising
ever-new
stabilization provide incentive for evasion by
"Civilian"
Federal
budget
of
agencies—at any rate not for a extra-spending, pour oil on the
$25 billion.
couple of years (short of a world fire of rising costs. Higher output,
State
and
municipal spending
under
such
war).
conditions,
means
(at least) $25 billion.
The constant emphasis on the higher costs per unit. More pro¬
Housing, plant and equipment
duction, paradoxically, may help
for defense
purposes, to be pro¬ quantitative aspec.s of money has
to
raise
rather
than
to
lower
vided, with or without Federal obscured our understanding of the
prices.
guarantees, outside of the budget, phenomenon called Inflation. What

tary

deficit

-

and

"jump"

or

even

forces

armed

enrollments

of

care

backlog, if
can

the

the

skyrocketing trend of ad¬

ministrative

ers

At snail's pace, orders

placed

absorb

sumer.

-

that in the first five months after

Korea,

ment

consideration,

high personal (after taxes)
In 1951, that disposable
income may outstrip the volume

Add
a
interests, cussions in employment means to
presumable volume of
particular, and misjudge both: the exuberance of investment in new private and

in

ones

let the country

to

addi¬

income.

interference with vested
the

the

accumulating in
Taking instal¬

corporations.

record

Actually,

recession"

put,

on

of

A Transition Year

does not follow the abrupt pattern
of a decade ago, that a "transi¬

be compressed.
Put

rate

the

it earns,

liquidity

warm
the Stock Exchange,-not¬ real income of the nation
is sub¬
This is the last country in the
withstanding dire forebodings of jected.
>
world that "must" have inflation.
war, virulent taxation and strang¬
The
basic financial picture of
ulating bureaucratism. - Short-run 1951 may be summarized—tenta¬ Yet, inflation and the concomitant
direct
methods
of
policing' the
anticipations mix indiscriminately tively and conservatively—as fol¬
markets are the convenient "emer¬
with the long-pull outlook.
One lows, assuming that prices do not
gency"
of
the
politician.
For this
example of the confusion is the rise fast from here on:
nation, it should be comparatively
widespread
belief
of
business
"Defense"
outlays, including
spokesmen, who are disappointed civilian defense, welfare of the easy to avoid both inflation and
price-fixing, inasmuch as we are
because
mobilization
this
time armed forces and

Between

the

it

make

timing, or about the
methods by which, and the tempo
at which, the civilian sector is to
range

"hit" in¬

monthly

a

spends all

tives.

not

case

it is expected

as

contracts will

war

dustry
at
$4 billion.

punctured with loop¬
"flexibility" provisions

Thursday, February 1, 1951

.

civilian!)
tary and unfair regulations.
temporary, psychological re¬ panding, though much of the pro¬
Washington
still
gray and black market quotations.
experiments
straints.
jected amounts may not material¬ In
reality, prices may rise much with plans "foggily conceived and
; The confusion in public policy ize
beyond the blue-print stage
It vacillates
more; but they need not rise at clumsily executed."
reflects itself in confused public for
quite some time.
Anyhow, all if.rational policies rather than in two major directions: to foster
thinking. Expectations of an arm¬ Federal expenditures are only a
more
production and to clamp
winning elections were the objec¬
ament
boom
with
high profits part of the drain to which the

ac¬

cording

weeks,

as

t h orities

a u

but
and

which

only if the
operate

matter of

on the skyrocket¬ flated and
thoroughly regimented
ing bank loans; or of the muddled Garrison
Economy.
The
year's
sort, as in rubber. After seven prospective outlays on the Federal
months of incessant talk, a price level cannot be
estimated at any
and
wage "stabilization"
is im¬ degree of precision.
Budget

holes

But that holds

vicious

timid restraints

posed,

be eliminated.

reserve

with

of transition—from the
easy-going,
require- freely spending Hand-Out State
as the to
the doldrums of the self-in¬

ments;of such limited scope

Major

omy.

banks'

member

the government takes
the management of the econ¬

tional

foreign situation.

eco¬

when

over

lic

filled

when

.

already feels the tinge of rising, and deposit volume is ac¬ pruned
carefully and then frozen;
celerating, personal "liquid" hold¬ the right to strike
suspended, and
ings remain practically stationary. working hours
lengthened; critical
In other
words, the general pub¬ materials withheld from all but

acute labor shortage, smaller firms
bidding for workers by the offer
of wages above contractual levels.
Over-employment is the threat,

inflationary
hazards, rather than the opposite.
It will become fully visible in a

thoroughly regimented Garrison Economy. Notes disconcerting
symptoms of an inflationary psychology, and foresees 1951
disposable income outstripping available consumer goods by
$30 to $40 billions. Says voluntary fair price standards are
bound to turn into involuntary and unfair regulations. Con¬

.

''

of

Cotton

other

Inc.
Trade

Exchange

Exchanges

"controls.'" " "
restraints, there

course.

Those of

the

monetary types would
anonths, and those in the savings .-largely do. The national
budget
institutions are at a virtual stand¬ s-should .be shorn
by a round $10
still. While the
money volume"is \ billion,: Public payrolls should be

N. Y. Cotton Exchange Bldg.
:

;

NEW YORK 4, N. Y.

CHICAGO

\

DETROIT

GENEVA,

.

* PITTSBURGH

SWITZERLAND

i

i

Volume 173

Number 4982

.

.

The Commercial and Financial Chronicle

.

Continued from page
Steel

The

Glancing at 1951

Carloadings
Retail

Trade

Commodity Price
Food

Price

Industry

Southeast Asia? Are
Index

Business

that

Aggregate industrial production for the country as a whole
last week held virtually steady, but in a comparison with the
period
As

of

true

was

insurance

it

year ago.

a

periods, claims for unemployment
in many manufacturing sections,

previous

continued

climb

to

sharply.

rose

reconversion lay-offs. The defense effort
has upset the normal operations of many industries and metalworking companies in particular.
reflecting

temporary

These

companies
steel

With

work.

to obtain for

quickening efforts to get into defense
scarce metals increasingly difficult

are

other

and

regular operations, fabricators are deluging govern¬

agencies with inquiries for bid lists hoping
to line up emergency jobs, "Steel" magazine reports. Some manu¬
facturers envision the time as not far distant when they may be
forced out of business for the duration of the emergency unless
procurement

ment

find a niche in the defense program. Government con¬
tracting is speeding up but it will take time for work to spread

they

can

out

in

industry

through

of sub-contracts from prime

the form

contractors.

steel requierments will be stepped up

Defense

in the second

worked

out, this trade paper asserts.

operations

supplies of steel and other metals for normal

As

be

But details of most major programs still remain to

quarter.

of their

when, if at all, something similar
Controlled Materials Plan of World War II will be put into

at

the

Or let

colonies?

again our self-appointed liberator
role.
Even
in
Japan
and
the

generally

prevails

that such

distribution

a

"reluctant"

rough;
to

vism,

that claims supreme

tries

up

quest

of

for,

ing

if

might

stabilization authorities to volun¬

the price line, steel product quotations have been
virtually frozen for the past several weeks at levels established
in December. Consequently, projected freeze of schedules by the
hold

has not aroused too much concern in the trade so

good

are

domestic

the
to

scene

will

1950, and only 5,500 under output last November, "Ward's
Report" discloses.
Truck production in January

motive

"One

fail

pected to top 128,000 units compared with
and almost 98,000 in November, it added.

Bempsey-Tegeler Go.

Auto¬

(Special to The Financial

126,000 in December

clarifying the general wage-price freeze was

Wage

the

1, the hard coal operators

Effective Feb.

$1.60-a-day

a

Co.

L

uis

Statistics notes that average
in

ers

the

on

a

*

*

•

,

'

'y

•

ARE

PLEASED
THE

TO

are

of

Co.

&

Kitchen

and

what extent?

of what may well be foolish

toward

number of intelligent investors who
follow a purely value approach and who there¬
advisers whenever the marts of trade begin to

not satisfied to

their

fore torment

Merritt

life.

v.

"I do not presume

to

Chronicle)

SACRAMENTO, Cal. —Richard
Harrison is with King Merritt

follow

any more

*

principles in his actual

your

sensible enough
practice in the market,

that the average investor is

than your readers would

abandon their pet systems for

in favor of a rational investment

beating the market

approach to

Co., Inc.

Continued

,

...

on page

31

Rejoins Davies & Mejia
(Special to The Financial

rejoined

has

Steele

P.

25

Chronicle)

FRANCISCO,

SAN

Cal.—John
Davies &

He

Exchanges.

cently been with First
Co.

has

PARTNERSHIP OF

re¬

Weil, Arnold & Crane

California
.

THE

OF

'

CONTINUE THE INVESTMENT

TO

ANNOUNCE

Merrill

OF

Lynch Adds

(Special to The Financial

FORMATION

TO ANNOUNCE THE

ARE PLEASED

WE

Mejia, Russ Building, members of
the New York and San Francisco

'

ASSOCIATION

general

satisfying the demand of a

A.

DUNLAP
'■

'

Of
for

Contrary Opinion
of what Benjamin Graham would

questions,' but I think their answers would go a long way

Kitchen

&

(Special to The Financial

Stock

8c

T.

W.

partner

With King

«3>

BINFORD

Do you consider that such

(3)

week

page

favorable speculative trend?

extreme doubts, but put it to you

my

'aggressive investor,' and if so to

an

show signs of

&

empirical systems

there any

Are

(2)

"This, I admit, is a long barrage

Chicago.

the end of 1950,

Continued

call

and

Murphy

the Bureau of Labor
weekly earnings of production work¬

country's factories rose to $64.15 at

•;

place in the strategy

have their

St.

of

Kitchen

in

in wage rates,

advances

widespread

and

broker-adviser

psychological approaches as Neill's Theory of

thereto

prior

have agreed to give

lengthening of the average work

both the

Reflecting

.

o

was

to 75,000 hard coal miners. The
after the wage freeze became effective
Thursday of last week.

midnight on

a

as

me

value would aid the investor in improv¬

of consistency.

purposes

Rich-

Scherk,

agreement came 13 hours
at

troubled

*'•'

investment judgment.

this possibility i have

department of
rier

increase

wage

May

agreement.

ing his results, in uncovering a

Street.

t h

coal miners.

those granted

A. Wilfred

our

these, i

whose possible marginal

Kitchen
was formerly
in the trading

increases such as

adjustments giving recognition to current wage

that

price appreciation after they have become too high to buy

rect

e n

ceiling order has a long list of exempt
that many of these exemptions will be
of

approach

has

investment basis.

an

Tegeler & Co.,

Mr.

begun

items but it is understood
wiped out later.
Stabilization Board are working on

definition

consider

I

Dempsey210 West Sev-

The price

with little progress reported.

be-

with

ciated

,

Jan. 25 rates.

proper

basic

a

feel * that there must be some middle ground
between pure investment and the absurd numerological gibberish
which you have so rightly attacked in your articles.
i should
like to know from you: (1) whether you copcede the necessity of
some
middle approach to aid the investor in capturing at least
some of the speculative profits which ordinarily accrue
to a cor¬

asso¬

come

.

Members

is

your

which

problem

"For

Cald¬

Howard

well have

consumed during"
Chrysler's changeover program in December and January will
permit stepped-up schedules in February, it explained. Oldsmobile and Buick, also slowed by change-over in January, will
improve February output.
' ",
The government on Friday last issued two orders putting a
general freeze on prices and wages. Prices on nearly all products
are
to be fixed at the highest levels prevailing from Dec.
19
through Jan. 25. Eric Johnston, head of the Economic Stabilization
Agency, gave out a separate order freezing wages and salaries at;

Monday of this week

on

T. Kitchen and

/ ;

Stockpiles of steel and other materials not

on

fastest

Chronicle)

LOS ANGELES, Calif.—-William

•V

production in the first six months of 1950.

on

of

~

below the adjusted average monthly

January output is 20%

at

probably much more than you as a writer is what to follow as a
selling policy.
I am willing to grant that the true investor who
buys on value is willing to sell when an alternative of greater
price-value
discrepancy
is offered him.
The overwhelming
percentage of investors, however, even the conservative ele¬
ments of the tribe, are painfully aware of the record that the
majority of stocks not only continue to rise in price after they
have attained a fair price, but frequently enjoy their largest and

react, too.

is ex-;

merits

own

theories of buying are in close

January

Work

their

this

W. T. Kitchen With

production of passenger cars in the United States
total 500,000 units, almost idemical with output in December,

your

indi¬

prices which appear to be
below their fair values.
If

to an¬

not

in

you

vidual securities are bought
on

ticipate that the new Congress
may write incisive
changes into
our
international outlook.
If so,

long as prices are not rolled back beyond Jan. 1, the magazine
adds. Only minor changes in lists have been made since that date
and then only by a few producers.

value

a

whereby

by

articles

it dare to go

reasons

called

be

gested

B. K. Tburlow

There

In line with the request of

be

should

approach: that is, a method
of analysis essentially sug¬

then

voluntary allocation system.

action

any

by an investor to
dispose of a position which
he has acquired on what

what it is head¬

does

nor

con¬

a

taken

to

through with what it sets in mo¬

else's)

anyone

(or

its mistakes by the re¬
ever-growing sacrifices.
Especially is it disgusted with a
foreign policy that demands blind

cover

and

structive criticism of what

moral author¬

that

Administration

with great interest

I have no't found in your articles

excellently conceived.

seems

ity, but is ready to compromise
its high-sounding principles for a
mess
of diplomatic pottage; with
an

followed

have

I

years

pleasure your weekly series in the 'Chronicle' and find in your
current study on the foibles of the investment public much that

N.

ment of those to be saved; a U.

tion.

will

May:
several

"For

the disarma¬

produces

but

investing. It is particularly apposite
a basic hindrance to the conscien¬

work-a-day conformity with sound value-

Bolshe¬

from

at

government

Dear Mr.

spending thai is

world

the

adviser's

tious

into fighting, but are
when the going gets

global

a

save

intel-

appraisal principles in lieu of market-timing efforts.

in particular, is tired
screaming anxieties—of "Allies"

who push us

as an

clearly highlighting

Middle West,

program

tarily

in

people themselves
would be only too glad to liqui¬
date I he Korean enterprise.
Tne
of

publish the following communication

VALUE approach in

.

American

but neither knows

opinion

We

ligent and stimulating contribution to consideration of the

'

of the matter is that

truth

The

the

to the

could not possibly bb made operative until third quarter
earliest. Meanwhile control authorities are going along with the

(The Trouble with Wall Street Is the Investor)

Philippines, the seed of doubt is
beginning to sprout.

obedience to its superior wisdom,

The

"WHEN TO SELL?"

go

shrink speculation is rising as to
effect.

By A. WILFRED MAY

attitude

ends

down the Bolshevist
drain? In any event, few Asiatics
will be willing to take seriously
all

it

•

•

accepting

we

French

and

appeasement

borders

Failures

J
like

British

the

Index

Production

Auto

and

4

Production

Electric Output

State of Trade

5

(525)

BANKING AND

I

V
i

LOAN

MORTGAGE

Chronicle)

"i

BUSINESS HERETOFORE

"

KEITH
AS

A

B.

SAN

REED

Cleland

Lynch,

PARTNER

DIEGO,
is

Cal. —John A.
with Merrill

CONDUCTED BY THE FIRMS

OF

now

Pierce, Fenner & Beane,
Trust & Savings Build¬

Weil

&

Arnold and G. Price

Crane

San Diego
NEW

FIRM

ing.

NAME'

JOSEPH
G.

BINFORD,

(Special to The Financial

Chronicle'

SAN

.

BANK




LIFE

FRANCISCO, Cal.—How¬

McNear
Riverside

9503

-

~

associated with
& Willard, Russ Building.
formerly with Calvin E.

ard T. Pike is now

DALLAS, TEXAS

BLDG.

He

,

,

was

Duncan & Co.

,,

1
'

,

"V

«

1,

1951

J.

*,

WEIL

BUILDING

RAymond .0711

^

•
-

I

•••

I

v

i
£

.

New Orleans

;*.5i

4

February

OF COMMERCE

TELEPHONE

-

.

SOUTHWESTERN

ARNOLD

WILSON

ROSWELL

NATIONAL
i

SECURITIES

WEIL

CRANE

With McNear & Willard

DUNLAP & REED

INVESTMENT

II.

PRICE

H.

Bttnch Office: *
Jackson, Mississippi

'i

The Commercial and Financial

G

Chronicle

.

.

.

Thursday, February 1, 1951

(526)

sound
lar

Role oi Federal Reserve

forts.

McCABE*

Board of Governors

Chairman,
«

System

Federal Reserve

v

up

I

convinced that these •?

am

our

Our Defense Program Must
Prevent Wat and Inflation

problems
and that we will be making a ter¬
rible mistake if we consider them
so.
I am convinced that you can't
solve the one without an attempt
to
solve
the other.
You can't

System in Wartime
'

sound dol¬
military ef¬

a

back

maintain
out

Asserting "you can't maintain a defense program without a
sound dollar," Chairman of Federal Reserve says it is statutory

defense program

a

By MARRINER S.

Federal Reserve System

with- i
Former Chairman of Federal Reserve,

given top priority—and rightly so
—to a reassessment of our inter¬

responsibility of his organization to guard integrity of dollar. |
Warns too heavy taxation may impair our economy, but
stresses need of a balanced budget. Sees more taxes required

>

position, and to the de-

national

of

velopment

comprehensive

a

asserting

unrivalled

our

production capacity is our strongest line of defense, attacks
Treasury's policy of pegged interest rates as inflationary and
contends over-all controls only postpone its disastrous con¬

six months we have

In the past

ECCLES*

Member, Board of Governors,

dollar.

sound

a

separate

two

not

are

By THOMAS B.

and

economy

to

Urges higher income taxes, but warns,

sequences.

without

We have given
wage ceilings, such increases will not prevent inflation.
Pro¬
immediately and decries deficit borrowing from banks. Makes
urgent consideration to procure¬
poses 44-hour week and payroll minimum tax deduction of
ment
problems
and
production
savings a "final essential in fighting inflation," and concludes,
25%. Advocates restrictive monetary and credit policies along
problems.
Now that these pro¬
inflation is not inevitable.
with limited direct controls as situation requires.
grams are launched, the next or¬
tion devoted to the public interest der of business must be to work
Today, well over $100 billion of
Our defense preparedness pro- Russia undertakes aggressiveracin the broadest sense.
out a comprehensive program for
savings of our people are set aside
The
Federal
Reserve
System maintaining the integrity of the gram must be designed to prevent tion
in government and private pro¬
There dollar—a comprehensive program war and to prevent inflation, Out Productive Capacity—Strong¬
grams
for retirement, pensions, was created by Congress.
is not the slightest doubt that it for mobilizing our financial re- while at the same time preserving
est Line of Defense
and insurance
;
r
the
essential
could likewise be destroyed by sources.
■ .• ;
pr,o tection.
We should recognize the facts
f r e edoms
of
Add itional
Congress, or that it would be de¬
That directly involves the Fed¬
our democratthat our unrivaled productive cabillions reside
stroyed or radically altered if it eral Reserve. As the nation's mon¬
ic institutions, pacity
is our strongest line of
in
pursued policies against the pub¬ etary authority, it is our statutory
savings
It
must
also defense, that our ability to pro¬
military program.

,

,

accounts

banks,

our

mutual

the responsibility to be a special guar¬
elected representatives. dian of the integrity of the dollar.
But the point I wish particularly Our function is to press for a
com-;
to emphasize is that the Congress
prehensive ;.credit and monetary
deliberately sought to insulate the program to prevent a "built-in"
Federal Reserve from predatory inflation that would plague us in-

in

lic interest, as interpreted by

in

people's

sav¬

ings

banks,

and in savings
and loan assoc

i

t i

a

o n

s

lions

political pressures.

and

.

Still other bil¬

in¬

the years to come.

tell you from

to

like

would

I

of

for

country is the arsenal of the free
nations of the world and must not
fail
to
make be weakened by a military pro-<
these aims our gram which we cannot maintain
If

time.

It is the duty;
organization,

of

we

indefinitely without regimentation
or inflation or which leads to war.

major goals,
the

very

sys-

own experiences that I have
tern which we
never
seen
men
take their re¬ the government, to bring theseare
trying to
sponsibilities more conscientiously questions to the foreground of
maintain
will
bonds.
or
display greater loyalty than public attention.
> '<•
be
destroyed,
Everyone of
those on the staffs of the Federal
Thomas B. McCabe
This
means
The Overriding Problem
Marriner S. Ecclen
us
counts
Reserve Banks and of the board.
we must adopt
The overriding problem which
heavily on these thrift reservoirs
Their proficiency and farsight¬
to guarantee our future security.
one
edness are recognized the world any government faces in a period a realistic foreign policy
Tonight I want to tell you of over if we may judge from the of war or of
defense which recognizes the limitations
the great concern of the Federal
innumerable requests from the preparations is how to raise the of our resources and manpower,
Reserve over the steady decline
central banks of other countries staggering amounts of money that and one which we can pay for
are

because

my

unique position in

its

of

ground forces
small as possible so as to maintain
our
production -.at; full
strength to meet our civilian and
military needs and help the other
free nations to* arm their available

We should keep our

in

vested

largely determined by our

available manpower, and that our

indef-

an

inite period

central banking

a

duce is

sustainable

be

as

government

-

manpower and build up their defenses. Our manpower can contribute far more to the defense
of the free world in our production hries, in our avy and Air
}£ A f
Europe °
land aimies in as a or u pe.
We should, quickly arrange a
peace treaty with Japan and Western Germany, bringing them into
the United Nations and helping
them and other friendly countries,

large-sca?e

in

the purchasing power of these

savings
any

and its

tell

you

Federal

could,
1

to

arrest

further decline.

I wish there
to

efforts

ave

I
a

advice and counsel
problems of or¬

who seek the
of

staff

our

on

I think
would be interested, too, in

ganization and operation.
time for

were

me

the full story of the

you

the instances where men, coming

Reserve

System1.*
If I to Washington in 'pany different
all of you would capacities, have asked, the board
better understanding of fbr help and con?ultaticn.v# They

think

why I have devoted so much of
my life to it.
Perhaps then you
could
realize the depth
of my

appreciate
the competence
objectivity of our staff.

conviction

the

that

it

the
last bulwark of the private enter¬
represents

prise system.

wish

I

would

branches.

and

impressed

be

about

you

the

by

Re¬
You
ex¬

eral Reserve Act

tremely high caliber of the men
from industry, agriculture, educa¬

see

tion and finance who

I would like to analyze

the Fed¬

so that you could
why it is such a monumental
niece of legislation; how it ad¬
heres so closely to the historical

concept
central

of

the proper

role

of a

bank; how it has profited

by previous experiences, and has
blended

the

best

of

the

philos¬

ophies of Hamilton and Jefferson
into

give so gen¬
time to serve
in this fashion.
Tonight there is not time even
to
touch
the highlights
of.* this
thrilling story. Events are taking

unique democratic institu-

*An address

by Chairman McCabe be¬
fore the Academy of Political and Social
Science, Philadelphia, Pa., Jan, 26, 1951.

their

their country

place with breath-taking, rapidity.
Tomorrow's problems are arriving
ahead

of schedule.

the

On
a

of

erously

problem

one

of

we.

mobilizing

power

and

fense.

At the

the

hand,

our

of

martfor de¬

our

time,

same

problem

have the

resources

permanent

currently.

I cannot - How can we best, within this
importance of the framework,, protect ourselves,

to the economy.

injury

the

overstate

we

have

maintaining

which these funds are maintain our essential economic
raised, whether it be by taxation and democratic strength, and at
or
by borrowing.
If the job is the same time, fulfill our commit-

methods by

properly, the whole effort to mentsito help defend and protect
the economy and pre- the other free countries of the
the soundness of the dollar world?
I believe to do this we

done

stabilize
serve

including Spain, to, rearm as
quickly as possible so as to be able
to deter, or resist if necessary,

easier, both must limit our aggregate expendithe future.
If done tures on our defense and foreign

a

in

and

now

badly, it is
that

it

is

no

exaggeration to say aid program to a maximum of $50 aggression by China, Eastern Gerthe billion annually. This we can pay many, or other Russian satellites,

possible to destroy

struggling to for currently, given a total na- Our present military forces should
tional product of some $300 bil- be maintained in Germany and
History is replete with examples lion, the estimated amount for the Japan until they have fully re¬
ef the distrous consequences
of next fiscal year. This money must armed for defense. Neither they
reckless reliance on central banks be used in such manner as to as- nor the other free countries can
to finance war expenditures. Even sure the maximum military effec- be expected to resist successfully
in our own country, the present tiveness
of ourselves and
our direct attacks.by Russia. The adcomplications in debt
manage- allies,
which means a program dition of such land forces as we
ment and monetary policies are in most likely to prevent war.
could send, and at the same time
no
small measure related to recWe must recognize the fact that maintain ou* supremacy
on the
ognized deficiencies in the.finane- Russia occupies or controls the Production line, and in the, air,
ing of World War II. As the Pres- greater part of the tremendous ?nd on the sea, cannot
ident
so
clearly
and
correctly land mass of Europe and As;a. to Provide the balance of power
pointed out last Fall, "We bor-,This land mass ha/a population necessary to deter, contain, or derowed too much and did not fax. of
nearly a bilii0n people, and feat th? RV,SS1?*?S;
.
...
.
society

very

are

we

./

preserve.

be expected

ourselves
our

run

enough.

Me

must, not

I

just old-fashioned enough

am

believe

RUSSia

is

shores
never
to defeat
0n land.
We would be bled
our own

white and destroyed,
WPn

a«,

and

resources

Expect

we

Now, what does this mean for
present problem/?
'

our

to

material

prpflt

present defense effort on far removed from

that kind of financial basis."

WINN & LOVETT

or

is made immeasurably

Federal

the

of

Banks

serve

tell

could

I

directors

and

without

required

are

.that if we are going

ac,

economically

militarilv

bv

at-

anv

wecSnSt

to do m

hope

state, and we may.
be prepared to supply or mainbe in that garrison state for -years, ^ain
ground forces at every stra-

into

a

garrison

it is

absolutely imperative and cs-^egic point around the 20,000 mile
that we start right.
And periphery of the Communist emstarting right means that we start pjre
we cannot be prepared on
with
a
balanced
budget and a
ground to meet attacks at the
sound fiscal program.
Otherwise, 'time and place selected by Russia

sential

GROCERY
COMPANY

7.x.

.7

deficits

accumulate

will

the

and

inflation cannot be controlled.
I think the

Common Stock

the

fore

how
and

Bought

—

Sold

—

on

security do

much

how

security

we

needs

are

enormous

Merrill Lynch, Pierce, Fenner St Beane
Under writers and Distributors of Investment Securities
Brokers in Securities and Commodities

5, N. Y.

and

so.

Obviously,

can

if all-out war were

with

war as

J1!? 3

air and the sea. From

air

being inevitable- We can-

for

.

,to give us,

W!

destruction

1 believe> by the Plan 1 have ou?"
:? L fhp lined, make it so costly for Russia
cooper^ to
start war that she wil1 not dare
cooperaattemDt d
>
nav

^her free nations are

^

the

ttw
that
rpasnn
For that
reason,
think Gr talk o£

P

y

under the protection of Amerjcan and British air and sea power

strategic
™the
free nations on the periphery
of the Soviet empire can rapidly

and

naval

bases

throughout

rearm
the great help we can
gjve them from our production
threaten lines.
we
must provide for a security swift retaliation with atomic and
We should not attempt to reprogram that can be indefinitely
th
dPotructive weaoons if build great militaiY strength in
sustained.
Too often in the past our ottler destructlve weapons 11 either Germany or Jap?n £or pos_
our people have changed raidcally
statement
. by Mr. Eccles before the
war with Russia.
Russia
sible War
in their thoughts about security jcint congressional
Ccmmutcc cf the may not be willing to tolerate the
Continued on page 28
Continued on page 33
-nD-c"
o,snihsaWJan'
' "peR:1^1

an




as of 3 HV ff*

we

we

EmSre lnd

rightfully

Request

NEW YORK

_

and within the limita

"budeeT

oo

to come, we would.be faced

70 PINE STREET

things we can
:7""0"+""7,

need

are

...

,

know how

mean

however, decisive of, civilization.
do with our suneghouk, n£)t
\/^orditin we

willing to pay for. It is as simple British
such
rtnonoetinnoKi,,
British hmpire ana sucn
as that.
Unquestionably, our mil¬ tk>n as

Quoted

itary
Prospectus

primary problem beAmerican people is just

much

are,

.

threat of worldwide total war will,

J believe, deter the Soviet Union,
because it would mean her; desanction as well as that of her.
enemies. A world war would be
an atomic war or worse, a war
that could not be won by any nation or group of nations, a war
that

.

There

Russia should know that direct
attack by ber would mean, war
with the rest of the free worldJ"*1? a^r' on the sea-sand on
^ land, invo ving .atomic .and a 1
other weapons of destruction. This

entirely

cumstances

ments.

-

At

different set of cir- 1311 miu iiavai
military require- the world, protected by
this stage, however, ground forces, we can

and

A

adequate

Number 4982

Volume 173

.

.

(527)

Commercial and Financial Chronicle
The

.

■From

COMING

Washington

Ahead

Investment

it is hard

on

the blood

Feb.

to live in

pressure

1, 1951

Security

political bunk.
tremendous comic relief.

winter

(St. Louis, Mo.)

Traders

Club

Feb.

Administration, pressing as it has not.
for the proposed St. Lawrence
waterway, is passing out the word to Capitol
The

before,

4, 1951

Board
ation

that, of course, the project cannot be
justified at this time if all-out war is immij
nent. The most ardent supporters of the proj¬
the Hill

City)

Association of

Security Traders

.

St.

Feb.

of

9, 1951

(Boston, Mass.)

Dallas

Boston Securities Traders Asso¬

ker House.

(Houston, Tex.)

of

meeting.
Club

Bond

Tex.)
annual

Memorial Day outing.

ciation Annual Dinner at the Par¬

Stock

Exchange

1951 (Jasper

June 11-14,

?

Park,

Canada)

Governors of Associ¬

Hill

much

(Dallas, Tex.)

May 30, 1951 (Dallas,

of

Party of NSTA.

ect,

of

Board of Governors of Associ¬ New York Annual Dinner at the
of Stock Exchange Firms Waldorf-Astoria Hotel.

,

It is hilarious.

done

Firms

ation,

But the story

about to tell you is a

Exchange

21, 1951

Investment Traders

Associ¬

April 13, 1951 (New York

Louis Winter Dinner for Tri-City

am

Stock

Feb. 8-9, 1951

Field

Washington and be exposed to the daily output of
I

of

Governors of

winter meeting.

of the

By CARLISLE BARGERON
time

of the

Most

ation

EVENTS
In

of

Board

(Philadelphia, Pa.)
Association
Philadelphia Winter Banquet.

Feb.

Feb. 6-7,1951 (San Antonio, Tex.)

Feb. 20, 1951 (Detroit, Mich.)

Firms

winter meeting.

Dealers Associa¬

Investment
tion

Detroit Stock Exchange Annual
Dinner at the Hotel Statler.

Convention

Canada

of

Jasper Park Lodge.

is being told, realize that inas¬
complete

it would take five years to

as

project even to the extent of passing
Labrador-Quebec iron ore to Cleveland, we

the
*

should not be diverting our
and

men

to

this

hands.

But

Hill

being

-

is

energies, materials

all-out war on
is not imminent,

with

it,

an

war

assured;

it

will

not come

our

,

A CHAN G E IN LETTERS

the.

for

about in time to coincide with the
completion of the essential part of the water-/
way. ' ;
• ■
..
ry. , Now this argument is not being put for¬

/

five years,

Carlisle

Bargeron

ADVICE FOR 1951

propagandists,
underlings in the government or by the advocates of the waterway;
it is being made by the President in conferences with Congressional,
leaders, by, others high in the government and presumably in:
position to know.
!
solely by Administration

ward

it

me

seems

far

Jlnd Some Questions Every American Investor Should

^

{ y Naturally, it is causing great rejoicing among the St.: Law-;
rence enthusiasts,
all the way from Ogdensburg, N. Y., to Duluth
But to

Ask Himself at the Peak of

:>

waterway; it should be a matter of rejoicing to all

of the American

people and to the governments of France and Britain and to

It has been

u

Pandit

Nine-Year Bull Market

a

gress,

even

it

seems

today, with

our

fears of

under this pressure; to be able to pass legislationlong-controversial project before mid-summer,

(j

sure of its
it was mis¬
the St. Lawrence for the time being.
- ; ; :

But apparently we do not have to wait that long
another

Because

propaganda

as

though prices

are

just about to go

that at important

being out of step with mass
.

.

in suspense.

piece circulating with official im¬

not

.

.

,

a

Conversely, were not a large majority of investors currently bullish, Bethlehem Steel would
at
245% above its 1942 low; General Motors, 232% above; Minneapolis-Moline, 1073%
Foreign Securities at 1660% above—to mention a few of many examples.

salable
and

three months^'But

'■■H

.$

■

TWO IMPORTANT QUESTIONS

have been

1942 stocks could not
with public opinion.

large majority of investors been unduly pessimistic in early
purchased at bargain counter levels by the discerning few willing to break
Had

get this oil in neighboring Iran unless our government
shows Iran a little more consideration, particularly quit holding,
they

appears

psychology.

primatur is that, of course, it is "generally known" (presumably
in the high councils of the government because I don't think the
disturbed people know any such thing) that Russia does not have
enough oil to fight a war for more than two or

inflation, it

turning points the successful handling of investment funds requires

.if Stalin has not attacked by then, it will be
analysis; if he has, then the Administration can say
taken, hold up on

funds and out of
through the roof.

pouring into the stock market from corporation pension

But, if the history of the American stock market carries any lesson, it is

authorizing: the
and

money

And

stocks since 1942.

profitable—extremely profitable—to hold common

'

government has given the jitters
with; its handling of foreign affairs.
)•
Now, I don't know, but I would ordinarily assume that the
Administration in making this argument, does not expect Con¬
to whom

Nehru,

:

important that its bearing on the

more

not now be

above; U. S.

FOR TODAY'S INVESTOR

can

-AND SOME SIMPLE ARITHMETIC

Export-Import bank loan of $35- million. - ■ • •
^
;
}
Well, that seems so simple that you wonder if the Adminis-;
tration has gone completely nuts in the warlike preparations it
is pursuing.
It seems that we've got one of our best ambassadors
over there in Iran, Henry F.
Grady, showing that the Adrpiiiis-!
tration is alert to the country's importance, so it is to be doubted
that a $35 million loan will be permitted to stand between peace or
relative peace and the Third World War, or to put it in another
way, to stand between building and not building the St. Law¬
rence waterway, it being agreed that it cannot be embarked upon
now. if there is to be this war before it is partially completed.
V
The two items taken together should be most heartening to
our people, and I would suggest to them, that if and when Con¬
gress authorizes the St. Lawrence, it be taken as a signal that the
war is not to come for five years and they demand a cessation of
the nonsense that is going on in Washington.
\
/
Certainly there could be no justification then for drafting,

up an

for

five years away,

war

a

>

,

'

is

time

a

time

a

to

to

conserve

and

sow

a

time

to

reap,

AHEAD

time to plant ^and a time to

a

the

the

year,

by inflation,
of

list

sidered

we

a

•

,

those

tees,

or

Stock Market's course
our Special Study

forward

Investment

v

who
of

are

particularly
capital

at

shculd

under today's

*

.

SERVICE

be of assistance to those
their; own funds but who wish
and alert research organi-.
zation's advices in
the selection of dynamic growth
stocks and in the gauging of broad trends in business
who

funds—

prefer

and

the

have

,

,

i

;

A

securities

* '■

•

SUPERVISORY SERVICE

through

upon

communications,

letter

those

to

markets.

continuous telephone, telegraphic,
the investment funds of
lack of training and experience,
because of other duties and interests, do not care
place the full burden dnd demands of such work

and

or

guide

PERSONAL

—guiding,

.

to

benefit of an informed

the

seriously con^

investment

conditions.

'

•

—weekly Letters designed to

time,

a

via

is

This

A BULLETIN

like the present,, when such
witnessed a rather; substantial
recent
growth—should find this Survey of benefit in
arriving at their own conclusions as to proper action

Indeed, an "Oh, what a

1931,

since

.

whether individuals, trus-

fiduciary institutions,
the conservation

with

Investment

Letters,

of the dollar

good hedges against depreciation
why.

ABOUT INVESTMENT LETTERS
Inc. and its associate institution,
Counsel, Inc., Have been serving investors

SOMETHING

Most companies are harmed

Those investors, however,

cerned

beautiful morning; oh, what a beau- ;
tiful day" is being unwittingly revealed to us.
It should give
surcease to the panickiness of those Congressmen who, deluged
with letters that we get out of Korea, are .trying to show, they
are
on
the job by demanding that the United Nations declareChina an aggressor.
Honestly, the whole thing is a scream.

will also

few benefit. Our study gives a specific
relatively few stocks that can be con¬

and shows you

.<

'

political background, clearly outlines
and others whose attention is
with this Special Study, which

"What About Inflation?"

"partial"

.

clients throughout the
Disagreeing with the
and excited trading
operations, but for

This four-page study, carefully surveying the financial, economic, and
for our changed position.
It will hardly be of interest to traders
on
week-to-week quotations rather than on fundamental values. .Along

reasons

projects business as well as the
for

<

'■ "

'<■

out

Investment Service—now in its 21st year—has prepared and mailed
to
country, whose funds it is guiding, a Special Survey of the current investment outlook. .
unanimity of mass opinion now evident in increased borrowings on stocks and the heavy
over the
New York Exchange, we point out why we regard 1951 as a year, not for expansive
conservation of capital.
'
'
:
'

centered

.

pluck, a time to build capital

it.

This

,»

>.

,...

'

*

:

*

monthly
patently on
being
unless you

.

and

thousands of industries unable ■;
materials and thus building up a pressure for all-out
*

progresses,

A SURVEY OF THE PERIOD

mobilization which is closing down
to get
mobilization.

boom

There

justification for spending; $50 billion annually on the military,'
for building thousands of planes, tanks, other war materials which
would rot on the ground in the five-year period as they did afterWorld War II: of sending American divisions to France and main¬

i

a

We would like every investor to ponder these questions:
One, if the present '70,000,000 shares
buying at 250 on the Dow-Jones average is smart, where was this money in 1942 when stocks,
the bargain counter, were selling at under 100 on the
average and less than 8,000,000 shares were
traded monthly?
Two, where are you going to get capital to buy stocks when they are down
sell them when they are up?
v
1
r
:
.
v

18-year-nlds except those who give

throwing our industrial plant into

of

crowd psychology moves from doubt, to assurance, to ebullience. On the basis
the 70,000,000 shares traded over the New York Stock Exchange in January at 235 to 250 on the Dow-Jones
industrial average, we are of the opinion that the ebullient stage in the long upswing from 1942 is present.
As

promise of being scholars, or scientists, or economists, or leaders,
when the scholars, scientists, economists and leaders have just,
about driven, us nationally nuts;
certainly there could be no

taining them there; of

who,

through

themselves.

a

SERVING CLIENTS

Joins Walston,
-

OAKLAND,
is

Teutsch

-

(Special to The Financial

Chronicle)

Calif. — Norris S.
connected with

now

Hoffman
&
Goodwin,
Fourteenth Street. He was

Merrill
Lynch,
&
Beane
and
Meija. "*
' *

formerly
with
Pierce,
Fenner
Davies &

Two With Merrill Lynch
(Special to.The Financial Chronicle)

SAN
Dana
now

Pierce,

F.

Patton

are

with

Merrill

Fenner &

Beane,

associated

Lynch,
301

Francis

Montgomery Street.




OAKLAND, Calif.—Edward J.
and Robert H. Grayare

Street.;

&

Co.,

i

INVESTMENT LETTERS, INC., 2656 Penobscot
Detroit 26,

Mich.

Bldg.

1404 Franklin

STATES

43

AND 3 FOREIGN

Enclosed i8 $2

for which I am to

air mail your SPECIAL SURVEY
outlook and your

C-l of the current

^

Inflation Study.

This

warded,

.

NAME

1-

ADDRESSJ

—

-fr

•'

Fla.—Frank
Ward and Lawrence C. Well¬

ST. PETERSBURG,

■

i

Special Investment Survey
Air Mail, on receipt of $2
and other cost6.
,

ington' are

now

associated

with

ing.

Both

were

A. M. Kidder &

previously
Co.

-

with

will

be

for¬

to cover dis¬

,

INVESTMENT LETTERS, INC.
Directed by

Charles J. Collins

I
,4.

Goodbody & Co., Quimby Build¬

I

—

(Special to The Financial Chronicle)

AVAILABLE

AT $2

receive by return I

tribution

Two With Gcodbody Co.

COUNTRIES

.

SPECIAL SURVEY
I

I

„

IN

„

Stephenson,

with

affiliated

Leydecker

R.

FRANCISCO, Cal.—Jacob

and

„

Condon
row.

:

i

Chronicle).

.

Walston,
408

Steohenson, Leydecker

Hoffman

(Special to The Financial

7

'

2656 Penobscot

Detroit 26

Building

Michigan

at

8

The Commercial and Financial

(528)

Chronicle

.

.

Thursday, February 1, 1951

.

New York Hanseatic
120

How to Prevent Inflation

Dealer-Broker Investment

And Fiscal Disastei

Recommendations and Literature
It is understood that the

Chairman, General Mills, Inc.

spending for non-military purposes; (3) extension of indirect
flexible direct controls; and (4) industry should inform

Semi-annual

of sacrifice."

31,
In

the year

1861, the first year
of the Civil
War, our national
capital was threatened by the en¬
One

emy.

the

own

of

the

Also

available is

a

offered

Bonds

123
Street, Philadelphia

1950.

Leading Banks and Trust Com¬

semi-annual

panies

of

secutive

York—75th

New

con¬

comparison—

quarterly

of

clear

stay

many
infla¬

forces of

Industry

How

the

The

men

lan¬

of

Harry A. Bullis

quick

Enormous

toward

the

hills.

the

In

distance, lights flickered in reply.

ing

city.

a

Today it speaks of

menace

More

from

At

it

grow¬

a

the

across

important,

seas.

of

warns

right

Notes

NSTA

Monetary inflation is
self-hypnosis

turn

and

faces

our

land

know
sound

the

of

from

easy

as

which

reality,
a

never-

We

money.

An

consequences.

currency

curity just

form of

a

by

look instead toward

never

at

gnaws

certainly

un¬

realize

that

roads before

our

as a

At

the

25th

Club

traders

of

anniversary

America, the following

new

Dinner

Mid-Winter

Chicago, held Jan.

29

officers

of

the

Bond

at the Furniture Club of

elected;

were

there

are

We

us.

only

can

we

two

heed the

the

case

direct

to

the

people,,, who

decide

ultimately

world

looks

to

these

States

for leadership —
social, and moral. For
inflation already has swept most

Europe,: and the forces

set

in

motion show little

sign of slacken¬
with 1939,
Bel¬

ing. Compared
gium's increase

has been 277%,
and it is growing. In
Greece, liv¬

Finland the costs of living are some
850% higher. The average Finn¬
ish worker pays 10 times

clothing

now

as

he

as

much

paid

in

1939.
It
is' exactly what
Lenin
ordered—the debauch of the cur¬

start

can

be

We may

now.

threshold

is difficult

It

war.

war

the

on

of

Bureau

tation

both as

Averages,

well

greatest

paid

dearly

in
that

war

for

ended
history. We

ago

years

tens of thousands of

of

the

controls

pressed

of

inflation.

vic¬

of

our

stagger¬

a

we

years

But

sup¬

when

di¬

general
inflation burst

controls,

more

action.

Today

is roaring
along, full throttle. In the case of
our

world's

total.

squeeze more

trucks alone, we

We

able

are

good

wheat farmer in the West
produce
5,500
bushels
of
with

by
of

Mr. Bullis
New

before'the

of

about

rearmament.

We

York, New York

City, Jan. 17, 1951.




Continued

•

/

:*

f

judge market trends
stocks, incl.

individual

trend indexes,
graphs—Together with

primary

analysis of 440 stocks and

groups—all for $1—Dept. 4-A,
Research
Co., Mihran

Barbara, Calif.

Santa

Bonds

selling

Analysis of

—

below

which ap¬

par

and
115

Utilities Company.

Texas

cial
Fred

T.

Rahn

Situations

plus
ports

Co.

&

1.

issues

week's

Ratings and Re¬

being released, with a
situation supervised ac¬

count

fortnightly

two

report,

commentaries

March

Spe¬

now

special

Fenner

1951

new

and

Special analysis,

—

next four

the

of the

&

Stocks

Recommended

.i

Herman Mell

heavy attendance at the dinner by

SECOND

the

four

and

weekly

supplements—$5—The Value Line
Investment Survey,
5 East 44th
Street, New York 17, N. Y.

190 guests.

GUESSES

hope
on

we

page

can

30

always
of

pleasant

preliminary to the Investment Traders
Philadelphia's annual mid-winter dinner has been

Co., Incorporated, to the
boys and their out-of-town guests. A feature of the predinner "curtain-raiser" is a contest at which the amateur and

local

professional

crystal-gazers are asked to predict
industrial average exactly one year in advance.
On

On

the

Dow-Jones

21,

194 forecast

1950, 349 prognostications were duly recorded.
the D-J closed at 203.35. Of the assembled seers,

uptrend ranging as high as 345.95. The pessimists,
were 155, envisioned a calamitous course of events
which, to the most jaundiced eye, would tumble the average to
116.45.
The over-all prospect,
however, was moderately bright;
the complete average
working out at 214.43. A cash prize of $100
will await the closest figure.
an

of whom there

Last week, as an added
and the customers

will

be

an

and

were

additional

weeks' print.
of the

surveying
the
financial,
economic and political background
study
and

projecting business as well as

fillip, the books were briefly reopened
permitted to revise their estimates. There

$25

awarded

to

the

winner

of

the

three-

It is rumored that the advisory councils of several

largerrjnvestment trusts have asked for

a

year—Included is

be

About

against depreciation of the dollar
and indicating the reasons why—
$2 — Write Department C-l, In¬
vestment
obscot

Letters, Inc., 2656 Pen¬
Building, Detroit 26, Mich.

Understanding
Funds

ty cents

New

Twen¬

—

(lower prices in
Commodity Research

copy

a

quantity)
Bureau,

Mutual

the

Brochure

—

—

82

Inc.,

Street,

Beaver

York 5, N. Y.

Watching

Association
as

of Jan. 26

of
are

New
as

Service

—

Brochure

service planned
help an investor keep posted
on his securities by sending brief
items of important developments

describing

York

(STANY)

follows:

'

Won Lost

(Capt.), Manson, King, Voccoli, G. Montanyne...
Bean (Capt.), Kaiser, Growney, Gronick, Rappa
Krisam (Capt.), Bradley, Montanyne, Weissman, Gannon
Leone (Capt.), Krasowich,
N'ieman, Pollack, Gavin
Donadio (Capt.),Demaye, O'Connor, Whiting, Werkmeister
Hunter (Capt.), Lytle, Reid, Kruge, Swenson__ii
Serlen (Capt.), Gersten, Gold, Krumholz, Young
H. Meyer (Capt.), Smith.
Farrell, A. Krankel, La Pato..
Mewing (Capt.), Klein, Flanagan, Manney, Ghegan.

new

a

Valentine, M. Meyer, H. Frankel
(Capt.), Weseman, Tisch, Strauss, Jacobs..
Greenberg (Capt.), Sullivan, Stein, Wechsler, Siegel

*

on

securities

which

in

he

is

in¬

Co.,

Ill

30

18

terested— Ira

29

Broadway, New York 6, N. Y.

29
26
25

17
17
17
22
23

24

24*

15

Broad

22
22
20
18

26
26
28
30

N.

Y.

14

34

29

__

Goodman (Capt.),

Inflation"

"What

specific list of stocks that
considered
good hedges

a

to

Burian

Kumm

special study

entitled

runners-up.

The Security Traders
Bowling League standings

for the

course

a

giving

list of the winners

THE SECURITY TRADERS ASSOCIATION OF NEW YORK

Team—

market's

the stock

can

Feb.

that date,

Survey C-l—Four-page

Special

PERMITTED

hospitality extended by Stroud &

to

agricultural produc¬

tion per acre out of our farm plant
than does the rest of the world. A

can

• *

New officials will take office
There was an unusually

economy

automobiles and

r

-

Arthur W. Fenton

Beane.

Association

of

out

indirect

—

Secretary—Fred T. Rahn, The Illinois Company.
Treasurer—Herman Mell, Merrill Lynch, Pierce,

on

removed with¬

bringing in the

new

mm-j,

President—Lester J. Thorsen, Glore, Forgan & Co.
Vice-President—Arthur W. Fenton, Ames, Emerich

casualties

rect controls were

into

*

>

Lester J. Thorsen

An

war

select

the

on

in

borders

the

and

,

XMX

victory,

psyschological

within

the

in

we

the fields of battle, and in tens

thousands

better ways to

Broadway, N,ew York 6, N. Y.
Also available is a special item

pi

members and

Only five

Profits

for

Market—Booklet describing

Stock

interesting for income
profit — Goodbody !&
Co.,

exaggerate

to

the crisis.

Street, New York 4, N. Y.

Planning

pear

total

'

Club

com¬

Averages and the thirtyover-the-counter
industrial

Railroad

As

2,000 hours of
rency. Just as inflation damages
work a year. In South China, it
our nation and our
allies, so does
takes the entire family working
it aid our common
enemy.
In the United
to
produce * oneStates, the cost of ineffectively
living has shot up over 75% com¬ twentieth as much, or 275 bushels,
with two crops a year. We have
pared
with prewar.- The
trend
in quantity,1 and war
continues. In 1950, the cost of liv¬ shipping
ing arose about 6%; wholesale plants in standby condition.
Our
productive plant is fiilly
prices rose 16%; the price of farm
engineered, and ready for the job
address

up-to-date

an

stocks used in the National Quo¬

ten

conflagration. We are

a

in limited

wheat

Ecwnemic

showing

Building,

must

issue.

the

ing costs have increased nearly produced last year over 8,000,000
vehicles. We built over 1,400,000
30,060%.
Italy
has
marked
a
5,000% increase. In France, food new housing units. We have the
costs alone were
101,000,000
1,800% higher capacity to. produce
last fall than before the war. In tons of steel a year, or half the

for

postwar

Investors

economic

President's

the

tims

economic,
of

and

averages—Financial Reports, Inc.,
Box 11, Newtonville 60, Mass.

43

in cooper¬
government, can take
for a firm money policy

stepped
our
industrial plant in the
racy shall live. Or we can con¬ up
process.
The
amazing
fact
is that
tinue on the road we have been
we did the job with no more than
following, spending billions of un¬
a 28%
rise in the price level dur¬
earned and unreal dollars.
This
ing the actual war years.
The
way leads to fiscal disaster.
United

annual

Third

pattern of industrial activity and
industrial and rail

current

with

ation

signals,
embrace
the
economics of sacrifice, and pay the country. We incurred
price that must be paid if democ¬ ing national debt. But

free

—

war

the Dow-Jones

charts and

Communist

halt

to

arms

trol inflation. Business,

se¬

defeat

warning

The

Years

the

Front

years,

the

the battlefield. I wonder if

on

20
of

BOND TRADERS CLUB OF CHICAGO

The world looks to us

now.

the

for

production for defense.
production is needed

within
our
advisees
own
country
ultimately could undermine pointed out recently, "To gain
public
support for stern policies
our
productivity and create hard¬
requires> that the public under-;
ship everywhere.
stand the reason why."
In this era of tension, any spark
Nation Has Two Alternatives

trends

we

Next
review

five

Lead

Can

that

national

120

Meeds,

Broadway, New York 5, N. Y.

industrial stocks used in the Dow-

to

means

upon

time its flashing signal is no mere
rehearsal of a possible crisis to
come.

Bissell' &

—Laird,

Jones

aggression. During the past two
the United States has ex¬
stake was the very survival of our panded production and has greatly
increased productivity
when
government.
measured in output per man. We
In this year of 1951,
exactly 90 can do the same
thing for defense.
years later, there is once again' a
The leadership is needed to con¬
lantern in the window.
But this
the

tested

attack

an

comparison and analysis
of 18 New York City Bank Stocks

yield and market performance
an
eleven-year period—Na¬
tional Quotation Bureau, Inc., 4fl

intelligent action and leader¬
ship in this crisis.

hills

was

Stocks—

City Bank

Year-end

to

both

city.

Thus

17, N. Y.

York

parison between the thirty listed

act

to

is equipped to supply

Industry

low

flashed

signal

public¬

on

Over-the-counter Index—Book¬

middle

the

Funds—Data

York

New

let

ruin, if we

The action should take the form

terns

of Dec.

as

1950—Stroud & Co., Inc.,

of
Corporate
publicly
during

to save our

are

we

F.

E.

over

they

around

appraisal

issues

principal

1919-20

in

—

Co., 61 Broadway, New

6, N. Y.

New

at a year¬

tion, America will have
promptly and decisively.

darkened
the

only

destructive

other

Inst itution.

line

was

from financial

to

are

Smithsonian

saw

prices

white-collar

great

.

classes

the

windows

1950, the

of

records

good

&

Mutual

Also available is a tabulation of

Certificates—

In appraisal of City of Philadelphia
rise Bonds.

of the year.

half

1946. If

and in

stairway
leading to the

Through

was

the end

equalled

briefly

the

of

at

second

firms mentioned will be pleased

parties the following literature:

ly rate of 25%, a rate barely and

States,

tower

fastest

The rise

48%.

rose

in wholesale

United

climbed

modities

York

—

Trust

products at wholesale, 23%; and South Broad
the prices of 28 important com¬ 9, Pa.

the

President
the

of

night five men,

dark

them

among

Stocks

Equipment

or

public of inflation dangers and of "economics

unusually
Hutton

Year-end com¬
Equipment Trust Certificates—
analysis of a group of Tabulation of principal issues of¬
the
country's leading banks — fered publicly during 1950—Union
Corp.,
65
Broadway,
Blyth & Co., Inc., 14 Wall Street, Securities
New York 6, N. Y.
New York 5, N. Y.
Bank

rules for sound finance: (1) fiscal policy to
(2) drastically reduced

as

common

parative

confidence in national credit;

restore

interested

34

of

ly offered mutual funds—Kidder,
Peabody & Co., 10 East 45th St.,

Leading industrialist, terming monetary inflation a form of
national self-hypnosis, points out the only way we can produce
what we need for war is by producing less of other things.

Lays down

send

to

Securities—Tabula¬
stocks with

"Look-Up"
tion

By HARRY A. BULLIS*

Corporation,

Broadway, New York 5, N. Y.

Within

the

&

Haupt

Pattern

of

a

2V±%

Long Term Rate—New bulletin—

Aubrey

G.

Lanston

Street,
*

&

Inc.,

York

5,

h

*

Crowley-Milner Co.
—Hicks

Co.,

New

—

Circular

&

Price, 231 South
Salle Street, Chicago 4, 111.

La

The First

Half ended with a great deal of excitement and,
night, Arthur Burian (Daniel F. Rice & Co.) nosed
leader, Julius Bean (Singer, Bean & Mackie), for first
place.
Next week the Second Half will be started, and it is
hoped that it will have as interesting a finish as did the First Half.
after

a

hectic

out the old

Heyden

Chemical

—Comprehensive

Corporation

analytical

Continued

on

bro-

page

33

Number 4982

Volume 173

.

.

.

I'm not advis¬

cost to build them.

What About the

Next, keep healthy, have a good
bank account and a job which
will

ROGER W. BABSON

are

Babson, pointing out cur¬
stock market is very selec¬

Mr.
rent

CHICAGO, 111.—Daniel F. Corn-

paid

war

dividends

for

and which should

give

you

about

"We

just

He

Street.

and

Gernon, Rand
formerly an asso¬

prior

thereto

Frank &

Francisco

San

Stock

was

an

officer

The investment firm of Janney

(Special to The Financial Chronicle)

(Special to The Financial Chronicle)

ciated with Daniel F. Rice & Co.,
Broward Hotel.

proprietor of R. J. Wotring & Co.

Roland

LAUDERDALE, Fla.—Rob¬
Caswell

C.

ert

Market Street.

&

Co., Philadelphia, announce that
J. Wotring has been ap¬
pointed manager of its office in
Bethlehem, Pa., 6 West Broad
Street. Mr. Wotring was formerly

FT.

FRANCISCO, Cal.—MauKeene is now affiliated
Fitzgerald, 649 South with Paul C. Rudolph & Co., 749
Cal.—Barbara
SAN
the staff rice G.

Wotring Mgr. of

has

become

asso¬

high

ting
the

January j>/, igyr

New Issue

get¬

enough

for

$19,225,000

to

public

buy."
Dow-

The

New York City

Indus¬

Jones

trial Averages
struck

in

381

of

fell

P/2%, l3/4%, 2%and 5%Bonds, PomonokHouses, Project No.N.Y.C.-22

they

1929;

Guaranteed by the City of New

they

1932;
rose

in

41

to

fell
again to 93 in
1937;

1 9 4 2 ;

Roger W. Babson

The unconditional guaranty

again to 212 in 1946, from

ance

which

"All
those
hold.:
What is the
The truth, is just the

I

reason?"

Only

of this.

reverse

stocks

year highs." :
.
All the above causes
investors to be neither

\

''. V:
the wisest
bullish nor

and the Internal Revenue Code of the United

by the State of New York, or any political

to

'We

prepare

Counon

Amount

-$214,000

apparently believes
that, unless there is a revolution
in Russia, all of Europe—war or
no
war—may,
for a period ' of
years, try communism and that no
War III can prevent it.
He also
Russians

the

218,000

intention

no

of

war and con¬
strengthening
the
United States militarily, economi¬

should

2%

1953

1:05%

2

1954

1.10

this

Russia

Policy

Hoover

and

one

more

or

of our

commodities,

—securities,
and

wages

We would

and

1977-78

1.95

1979-81

101

100%

1964

1.55

765,000

1.60

1,200,000

■2

1955

1.15

309,000

D/2

2

1956

1.20

314,000

iy2

1966

1.65

1,716,000

2

1982-85

100%'.'

1957

1.20

319,000

l3/4

1967

1.70

2,346,000

2

1986-90

100

232,000

5

100

1,006,000

2

1991-92

99%
99

V

,

243,000

5

1958

1.25

990,000

l3/4

1968-70

5

1959

1.30

690,000

1%

1971-72

1.80

1,046,000

2

1993-94

256,000

714,000

1%

1973-74

1.85

1,650,000

1995-97

5.

1.40

2

268,000

1960

98%

1961

1.50

2,357,000

1998-2001

98

5

2

282,000

'v

A

(Accrued Interest to be added)

•

These Bonds

are

offered when,

as

and if issued and received hy us, and subject to approval of legality by
Mitchell, New York, N. Y., Bond Counselfor the Authority.

not

not unless

—

Messrs. Caldwell, Marshall, Trimble &

The First Boston Corporation

Kidder, Peabody & Co.

Drexel & Co.

A',',

,V:

Paine, Webber, Jackson & Curtis

Harriman
Ripley & Co.
Incorporated

1

Smith, Barney & Co.
A. C. Allyn
and Company
Incorporated

Stone & Webster Securities Corporation

R. S.Incorporated
Dickson & Co.

Braun,Incorporated
Bosworth & Co.

L. F. Rothschild & Co.

rents,

would

be

Geo. B. Gibbons & Co., Inc.

W. E. Hutton & Co.

be ruled by a

would go
who .expect war

stocks

Those

down.
should

m%

w

1962-63

1%

2

Blyth & Co., Inc.

bombed, the Stock Ex¬
changes would be closed to pre¬
vent financial panic.
Everything

dictator

Prices

1.90%

our

are

banks

$739,000

or

1975-76

iy2%

should get into war with

frozen.

Due

Coupon

on

markets should hold up.
we

Yield
Amount

Prices

227,000

and

Under

305,000

or

223,000

spiritually until the
Europeans unite
and show an
enthusiasm to fight communism.
cally

$596,000

Due

Coupon

avoid

now

centrate

Amount

Yield

Due

1965

now

striking
North or South America unless
we attack Russia.
He believes we
have

PRICES

Yield

Mr. Hoover

that

counsel, for Savings Banks and all Either
all Public Bodies and Public Officers.

AMOUNTS, COUPONS, MATURITIES, YIELDS OR

Hoover Believes

What Mr.

thinks

of the State of New York.

Legal investment in the State of Neu> York, in the opinion of bond
Banks, Trust Funds and Fiduciaries, Insurance Companies and

are

Housing Law, Chapter

subdivision thereof, under provisions of the Public

44A of the Consolidated Laws

now 'doing
actively for
World War III; but it may not
come
for
years.
Our hurried
preparations may be useless.
way.

right

of bond counsel, the Bonds together with the interest thereon, will be exempt from all taxation by
of the United States Housing Act of 1937, as amended and supplemented,
States, as amended and supplemented, and are exempt from all taxation

the United States by the existing provisions

just now.

either

payable at the principal office of the Fiscal Agent of the Authority, the
Mantdgcturers.Trust Company iriNjt# York, N. Y.iCoupon Bonds of $1,000 denomination, registerablf as to principal only, or •. < ,
as to both principal and interest, with the privilege of reconversion into coupon bonds at the expense of the holder.

In the opinion

They believe
stocks are good for income, but
not for
speculation.
The stock
market is very selective and the
war
outlook is very uncertain—
bearish

2001 incl.

Principal and semi-annual interest, March 1 and September 1,

few
their "20-

a very

at

selling

are

Due March 1, 1953 to

1, 1951

maturing on and after March 1, 1959 will be redeemable prior to maturity at the option of the Authority on March 1, 1958, or on
any interest payment date thereafter, as a whole or in part, in inverse order of their numbers, at a redemption price of par and accrued
interest to date of redemption plus a premium of 4% of their par value if redeemed on or before March 1, 1963; or a premium of 3]A°/o of
their par value if-redcemed thereafter, but on or before March 1,1968; or a premium of 3% of their par value if redeemed thereafter, but
on or before March 1,1973; or a premium of 2jf£% of their par value if redeemed thereafter, but on or before March 1, 1978; or a premium
of2%of their par value if redeemed thereafter, but on or before March 1,1983; or a premium of\]4% of their par value if redeemed there¬
after, but on or before March 1, 1988; or a premium of i% of their par value if redeemed thereafter.

stocks have gone up except
which

principal and interest will be endorsed

of bond counsel, be pledged for the perform¬
obligated to levy ad valorem taxes,upon all taxable property
amount for the performance of such guaranty.

Bonds

people say:

Many

of such guaranty and the City has power and will be
within the City without limitation of rate or

Dated March

Many good stocks are now selling
for less than they did in 1946, or
earlier.

of The City of New York of the payment of both

each Bond. The full faith and credit of the City will, in the opinion

upon

'

rose

they declined until a few months
ago.
They are now around 245,
the high for 20 years; but this
statement applies to only 30
stocks out of over 1,000 stocks.

cities

yorfe---

194 in

to

If

Housing Authority

high

a

Ira Haupt

W. C. Langley & Co.

& Co.

Tucker, Anthony & Co.

Hayden, Miller & Co.

*

Chas. E.
Weigold & Co.
Incorporated

they are very carefully

Pacific Northwest Company

Stubbs, Smith & Lombardo, Inc.

R. D. White & Company

Hirsch & Co.

McCormick & Co.

Heller, Bruce & Co.

buy stocks—certainly

by experts.
Inflation,
however, should help a few

Whiting, Weeks & Stubbs

selected

stocks.

Dean Witter & Co.

H. M. Byllesby and Company

Field, Richards & Co.

Freeman & Company

(Incorporated)
Stocks

vs.

Homes

Certainly, anyone who does not
a house and an acre of land
in a safe country village, should

Hannahs, Ballin & Lee

John C. Legg & Company

G. C. Haas & Co.
"

Robert Garrett & Sons

The Milwaukee Company

own

Prescott, Hawley,

Shepard & Co., Inc.

Putnam & Co.

Starkweather & Co. Tripp & Co., Inc. RobertIncorporated
Hawkins 8c Co.
»

make such his first investment—
war or

—well
and

no war.

located,

Many such places

with water, fuel

neighbors—can be purchased

today for one-third what it




would

Wm. J. Mericka, Inc.

Ex¬

New Janney Co. Branch

(Special to The Financial Chronicle)

Broustaut has joined

R. J.

of

guess

finally

F.

changes.

Belden, Inc.

With Daniel F. Rice

ANGELES,

Stanley

&

ciate of Charles A. Fuller Co. and

in

partners

was

and

connected with Dean

are

Co., 45 Montgomery
Street, members of the New York

associated

&

Dayton

Harms

Witter

Minn.—Harry

become

Joins Paul Rudolph

market is

the

Salle

La

formerly

Comstock & Co.

telephoned an im¬ of Gerald
portant brokerage house in New Olive Street.
York City to ask its opinion on
the stock market.
The reply was:
Have

South

were

has

FRANCISCO, Cal.—Char¬

R.

Hoffman

With G. Fitzgerald
LOS
L.

209

Co.,
Both

5%.

by investors.

Belden

with

Tower.

years

many

MINNEAPOLIS,
I.

become associated with Shields &

buy a very
broad list of 30 stocks which have

les

(Special to The Financial Chronicle)

stock and Edward P. Renier have

then

income,

(Special to The Financial Chronicle)

SAN

Dayton & Gernon

(Special to The Financial Chronicle)

If you
invest¬

give you a living.
dependent partly on

ment

outlook very un¬
certain, says those who expect
war should not buy stocks unless
they are carefully selected by
experts.
Advises diversification
tive, and

Shields in Chicago

9

Two With Dean Witter

Gomstock, Renier With Harry Belden Joins

ing their purchase for immediate
occupancy; but for insurance and
security.

Stock Market?
By

(529)

The Commercial and Financial Chronicle

John Small & Co.

J. G. White & Company
Incorporated

;

Financial Chronicle

The Commercial and

Thursday, February 1, 1951

.

.

.

(530)

10

subcontracting of parts has-more*

Pennsylvania Brevities
Warner Co. to

kiln at the Cedar
West Penn to Sell Stock
in Chester Valley,
West Penn Electric Co. is plan¬
Taking into account the diffi¬
the
purchase of six new steel ning to offer 320,000 shares of. culties encountered in the two
barges to be added to the Dela¬ additional common stock to pres¬
previous public offerings of its
ware
River fleet, extensions of
ent holders in the ratio of one own obligations, the International
facilities for handling sand, gravel
Bank for Renew
share for each ten shares
and concrete at Morrisville and
held.
Unsubscribed stock will be construction
the
development of additional offered to employees in the West and
Devel¬
ligh-calsium
limestone deposits Penn system. It is probable that opment has
recently acquired in the Bellefonte the
company will request bids for
adopted

Chairman

approximately
$3,000,000, bringing to close to
$10,000,000 the aggregate spent for
capital improvements since 1945.
The company's principal activi¬
ties fall within two categories; the
production, distribution and sale
of central-mix concrete and sand
and gravel in the Trenton- Phila¬
of

area.

than $6
;

credit
operations

Contraction of consumer

likely to affect

not

Lehigh

plant to be built in
of the company since only a very
New
Jersey,
Ernest T.
Weir,
small percentage of the type of
Chairman of National Steel Corp.,
building materials produced by
states that company's expansion
the company goes into home con¬
program will boost annual ingot

supplied
company
are highway,
and tunnel construction,
Major projects

struction.

the

by

bridge

high priorities.

tons

■

the Philadel¬

of

Development

to

Construction of

come.

the Fairless

Works of U. S.

Steel

Morrisville, Pa., will begin in
the spring. National Steel has an¬
nounced plans for construction of
at

a

large plant across

the

within

V'.;• v,"' V,:V
Company's present

We solicit

plans

installation of an ad-

in

resulted

The
crease

Pulley

American

Steel

of Pittsburgh
Co. and Allegheny Ludlum

Steel

Corp.

\ '

15 it

from >12 to

fares from 4 for
cents to 3 for 40 cents.

45

CHESTNUT STREET

1421

zens

■sjs

transportation

.Common

and

"fair

-

Stock

"

'

and

*

will

000,

,

*

,

v

Strikes Averted

at Baldwin

last week by officials of the

win-Lima-Hamilton" Co.

Philadelphia 3, Pa.

have

would

Bellevue Stratford Co,

.

Units

Talon Inc. Preferred
Pratt Read Co. Common
**

.

~i

.

begin .within

will

.

.involved

.

*

Daniel Reeves Adds
BEVERLY

Chronicle)

Calif.

HILLS,

-

the

York

New

and

Stock Exchanges.

398

members of

South Beverly Drive,

;;

—

joined the

staff of Daniel Reeves & Co.,

Harriman Ripley & Co. Inc.

Los Angeles

He

was

former¬

Kidder, Peabody & Co.

ly with Francis I. du Pont &

*Kuhn, Loeb & Co.

.Co.

few months.

a

LOS

ANGELES,

Cal.—John P.

been

E.

F.

added

Hutton

&

to

the staff

623

Co.,

Equipment Trust Certificates

Runciman

Boyd and Alexander P.
have

Semi-annual Appraisals

Chronicle)

of

South

City of Philadelphia Bonds

Two With First California

>

about

approxi¬

LOS

Cal.

ANGELES, *.

—

Pennsylvania Bldg., Philadelphia
N. Y. Phone
COrtlandt 7-6814

of December 31, 1950

Note available

Earl

Write

for

for distribution

!

•

your copy

,

.

.

'!

f".
.

5,700 members of the CIO geles Stock Exchange.

STROU D & COM PAN Y

Steel Workers Union.

With Shearson,

*

*

Hammill

Piasecki Helicopter

MORTON—Although
cilities

ployees

and

of

the

Corp.

plant fa¬

number

Piasecki

(Special to The Financial Chronicle)

of

em¬

-

Helicopter

Corp. have doubled within recent

months,

company

reports

that

^

BEVERLY HILLS, Calif.—Mark
W.

Kosterman

Hammill &
den Drive.

is

with

Shearson,

Co., 443 North Cam¬

ALLENTOWN

f

•

-1i"v

Incorporated

*

(

Phila.-Balt. Stock Exchange

as

(Special to The Financial Chronicle)

i

Samuel K. Philli




this city. :

Charles A. Baggott has

.

Teletype
PH 375

Harriman Ripley and Co., Inc^~

(Special to The Financial

provided wage increases of from Berry and Royal A. Chapman are
8 to
17 cents an hour for 250 now affiliated with First Cali¬
members of Local 1271, Brother¬
fornia
Co.,
647
South
Spring
hood of Electrical Workers .(AFL),
and for 14 to 28 cents an hour for Street, members of the Los An¬

*

Members

of

-

Corp.

Hutton Adds Two

BaldEd- Spring Street."

mately 6,000 workers: Settlements

United
*

the com¬

on

*

Glore, Forgan & Co.
Goldman, Sachs & Co.

at

dystone, Pa., and representatives
of two labor unions, both of which
had
threatened
strikes
"Which

Cambridge Bldg. 3s 1953

Leeds & Lippincott

located

be

of New

hot *Halsey;'Stuart & Co. Inc.

pany's west shore property. Work

*

y

BOENNING & CO.
,

to

of munici¬

pal issues. His brother, Milton C.
Cross, is Executive Vice-President

Drexel & Co.

■

his experience

BANKERS

*The First Boston

new

a

(Special to The Financial

One-year contracts were signed

;

'•

highly esteemed

was

in and wide knowledge

Dillon, Read & Co. Inc.

rolling mill to cost about $3,000,-

company
tariffs are

reasonable"

construction of

plans

less revenue than the
company is
entitled to receive
under the findings of the PUC

Personal Property Tax

♦

'

#

*
Cross

produce

v
.

-

Incorporated

Blyth & Co., Inc.

Carpenter Steel to Build

<

-

"

'

Morgan & Co.

York

*C. J. Devine & Co.

READING—Carpenter Steel Co.

last November.

free of. Penna.

reports
31

Dec.

3J/2 times those of a year ago.

on

Mr.

in both circles for

INVESTMENT

were

court action

maintains that the new

& Power Co.

Co.

orders

government bond

at 63 Wall Street,

''

.

F. Childs & Co.,

house.

k. York

instru¬

unfilled

interfere with the PUC.
The

*

sjs

Pulley

American

cision, that it was without power
to

t

York.

*The National City Bank

that

proposed increase.
In 1948, a similar action was car¬
ried to the Pennsylvania Supreme
Court which ruled, in a 4 to 1 de¬

LOcust 7-6619

negotiating

the

block

to

J. P.

ments.

behalf of the Citi¬
Committee Against the Fare

Rise, have threatened

Robertshaw-

—

aircraft

of

manufacture

the cudgels on

HERBERT H. BLIZZARD & CO.

GREENSBURG

'■■■'k-.

Guaranty Trust Co. of New
Manufacturers Trust Co.

firm's

Street, as Manager of this

municipal department, and with C.

National Bank of the City

of New

:

' i':"

Fulton Controls Co. is

H. Jerome Jaspan,
state
senator,
wielding

former

it

if

,•

First

&

Company's munici¬

pal bond department for several
years and later became identified
with W. E. Hutton & Co., 14 Wall

Bank
Trust Co.

/

cago

distributing concern was or¬

ganized as a separate organization
by the National City Bank inter¬
ests. Mr. Cross had charge of the

-V

.

the
when the
underwriting

absorbed -in

was

nation-wide

lat.+er

National Bank of Chi¬

*The First

merger

and

licitor,

Riverside Metal

"

Bank

Chemical

which

Co.

National City Company

America N.T. & S.A.

*The Chase National

with the U. S. Air Force for the

city so¬

Joseph Sharfsin, former

Bearings Co. of America

Bank Of

^Bankers Trust Company

W. Halsey &

old bond house of N.

National City

["

Banks

with the

His first connection was

*

negotiations have
reported as under way in
a

SPONSOR

bond firms.

York municipal

New

and

Westinghouse

—

Preliminary

proposal''is to in¬

cash "fares

,

former edi¬

George L. Cross, a

X

;

Corp. has announced it MANAGEMENT AND
GROUP
will start construction on two new

cents and token

Farquhar

A. B.

PITTSBURGH

proved

>.?'■■■]■ 4-":v.

present

the

<

George L Gross Dies

about

aggregating

group

400 houses.

Electric

increase

fare

a

k'

erroneous.

Leland Electric

^ ;

',*

;■

proceedings

of income and expense are

E. & G. Brooke Iron

f

V :•

ft:ft

f?

the merits of each suc¬
buildings at its East- Pittsburgh
petition. In the present
plant which wilL increase by 65%
instance, it is held that all perti¬
the production oh large electric
nent facts and, data have.^been
generators.
^ V
that

lending.

own

Authority on State and Municipal
Bonds succumbs at age of 63.

Together they will head a

sors.)
■>

cessive

in

Bank's

to

corresponding

years,

to

stock split.

granted only last December, and
been
that further review is pointless
respect to
unless or until current estimates

inquiries in

was

basis,, with a selling group
comprising 1,700 members of the
NASD; and the second loan—a re¬

selling

studied

developed

this year; with the interest
indefinite, and the maturity to
in
the neighborhood
of ,16

agency

Westinghouse Electric Co.

subjected to what has come to be
regarded as almost an automatic
six months' delay while the PUC

fully

be

the Bank's
distributed on an

Whereas,

annual

.,Vi.

applica¬

company

higher fares have been

for

rate

Blaclc

R.

Eugene

.

2-for-l

Heretofore,

Fla.,

the

At

■

tions

immediate

an

later

R.

meeting to be
sponsor group thus is com¬
held in Allentown April 10, stock¬
prised
of the 'following firms.
holders of Lehigh Portland Ce¬
(The managers are indicated by
on ment Co. will vote on a proposed
asterisk, the others being spon¬

6.

Feb.

the Delaware

locations

area.

call for the

re¬

permitted to become effective

perhaps more large steel pro¬
also
have
well-defined

Warner

is

It

—-

not

cost approxi¬ by "managers" and "sponsors" con¬ tor of the Chronicle's "State and
mately $8,000,000 and Giant seeks sisting of the members of the four City
Municipal
Bond
Depart¬
to
increase
the capacity of
its
ment," passed away Jan. 25 at his
groups which participated in the
home in Ridgewood, New Jersey.
Harleyville,
S. C., ■ plant; from
previous .competitive bidding
800,000 bbls. to 1,800,000 bbls. per operation.
After leaving the "Chronicle,"
;■' .gk
year at a cost of $2,000,000.
The
new
management "• and Mr. Cross had a long career in
sonville,

proved Philadelphia Transporta¬
tion Co.'s schedule of higher fares
ana
that the new rates will be

ducers

for

v::.

Fare Rise

that statisticians and ac¬
countants
of
the Pennsylvania
Public Utility Commission's Rates
and
Research Burea have ap¬

south of Philadelphia and
it is understood that at least one

plans

■:v.;'':

*

,

Favors

PHILADELPHIA

River
and

#

*

PUC

loan

is

prospect, but that from $50-$100
million will probably be sought

ing ihe building and expansion of funding issue of $100,000,000—was
cement manufacturing facilities in
disposed of in 1950 by competitive
the South.
Lehigh asks permis¬
bidding, future financing will be
sion to build a plant near Jack¬
handled on an agency basis headed

from present 4,750,000
to 6,000,000 tons during 1952.

ported

phia district into a new and im¬
portant steel producing area holds
promise of continuing activities
for
Warner Company for some
years

applications with the
National Security Resources Board
for certificates of necessity cover¬
filed

have

capacity

public works and large industrial
enterprises, most
of which are
considered
essential and carry

first

that additional

Mr. Black stated

financing

by

31

"managerial"

of

-"Members
group.

press

President.

Co.

Cement

Portland

Giant

and

Co.

Cement

Portland

4

White, Weld & Co.. <

Black, the Ins t i t u t i o n's

Expanding

Penna. Cement Co.'s

tonnage

Without including any

Shields & Co.

New

Eugene

Bros. &

Smith, Barney & Co.
Stone & Webster Securities Corp.
Union Securities Corp:

This

a

Jan.

*t

from its new

at

Co.
Hutzler

^Morgan Stanley &
•^Salomon

conference

it

ft

I(f

*t

i(.

placed by
Command of the

Force.

Air

S.

ed

York

Pierce, Fenner &

Beane

announc¬

was

equipment

the Air Material
U.

single
commercial

standard

for

microwave

Merrill Lynch,

,

fi¬

future

nancing.

largest

the

awarded

been

order

share.

per

that it has

Philco Corp. reports

Lehman Brothers

.

for
accomplishing
its

& Co.

Lazard Freres

technique

'ft

ft

Jjs

& Co.

Ladenburg, Thalmann
-

agency

new

a

opened on

7.

March

and no new

and

program

that such bids will be

financ¬
ing is anticipated.
Sales for 1950
are
expected to exceed the $18,047,260
reported for 1949 and
earnings for the year just con¬
cluded
are
estimated at better

Michigan.

the

underwriting

will be available
earnings, working capital

and reserves

products for industrial, chemical
and
agricultural use along the
eastern seaboard and as far west

is

v>Vy-v

,

contemplated capital

for

improvements

delphia-Wilmington metropolitan
area and the manufacture and sale
of lime, limestone and limestone

as

;,vW v

Funds

from

designated "managers" and

to

basis. Plans financing later this year.

on agency

plant

Hollow

of
the Board of Warner Company,
states
that the company's 1951
expansion program will involve
the expenditure

-^sponsors"

'

ditional rotary

Spend $3,000,000

Warner,

Charles

distribute future bonds

Will

&

#

Adopts New Borrowing Policy

World Bank

\is

backlog
history.

and

trebled

than

largest in company's

;

PHILADELPHIA 9

PITTSBURGH

NEW

YORK

SCRANTON

•

LANCASTER

Volume 173

Number 4982

•

.

.

the

By L. H. GAVIN*

:

Member, House Committee on Armed Services
'

"

j

ports

i

Germany based
of

status

re¬

on an

of

extensive official tour to check present
Finds economic conditions in

defense program.

our

West Germany

doubt allied military
forces are adequate without a West German army. Says prob¬
lem of German rearmament is broader in scope and more
difficult of solution than is generally recognized, and recom¬
mends complete new basis in dealing with Germany. Finds
political situation stable in American zone of Berlin.
improved, but

expresses

eral

During the period Nov. 18-Dec.
16, 1950, the undersigned visited
occupied areas in Germany and
Austria,
Europe,

countries

U.

the

the

vitational

or¬

of

the

of

each

try

was necesGavin

H.

Leon

brief,
I effort

every

confer with respon¬

made to

was

sible

officials, both American and
foreign, and to observe, at first
hand,

the

general circumstances,
conditions, and attitudes preva¬

lent

the

in

also,

visited.

areas

I could

the result of prior visits
to Europe during the past

as

made

three years, gauge current condi¬
somewhat

tions

than

would

about

accurately

more

otherwise

have

been

prog¬

only in

personnel

the

more

are

The

perienced

of military

forces

in more ex¬
personnel.
Combat
have been increasingly re¬
of

lieved

occupation

or

I

am

that

utility and trans¬
our
forces in Germany are well
While the standard
led, and that, if necessity arose,
of
living is lower than in the
the responsible commanders,
United States, it compares favor¬
would achieve the utmost results
ably with most of Europe, and is
within their power. However, with
in heartening contrast with the
a
Russian numerical superiority
desperate conditions which pre¬
of at least four to one (and more
vailed in 1946-47. Since the ref¬
ormation
of
the
currency
in likely seven or eight to one), plus
Western Germany, there has been overwhelming tactical air superi¬
a
steady improvement in trade ority, we could not expect that
the small allied forces in Germany
and industry.
Stores at present
could long hold out against a ma¬
are amply stocked with food and
merchandise
of
all
kinds,
and jor Russian offensive. Efforts are
now
being made by the Depart¬
there is no rationing. The prices,
ment of Defense to augment the
while
generally reasonable
by
United States standards, are often strength of our forces in Germany;
and it is presumed that those of
high compared to the wages and
other

wi.ll
£Sau
that

the

following! comments and ob¬
servations may be of some value
to the Committee during the pres¬
session of the 82nd

ent

Congress,
of general assist¬

and may also be

to individual members of the

ance

Committee,
particularly
those
whose schedules and engagements

have
permitted visits to Europe.
the

during
not

past

two

years

.

[Editor's Note—Matter omitted
at this point from Congressman
Gavin's report dealt with nature
of building facilities at Air Force
bases
in
Massachusetts, Azores
and Newfoundland.]

groups

of these people,

whose properties
expropriated by the Com¬

were

munist

regimes of the two coun¬
mentioned,
have
been

tries

deindustrialization

harmful

the

the period Nov. 19-24.
undersigned
was
in
the
portion of the United

During

pally

Germany, princi¬

Heidelberg and

Frankfurt,

Wiesbaden.
with

ferred
U.

of

Zone

States

S.

At

Frankfurt, I
John

Mr.

High

J.

con¬

McCloy,

Commissioner

for

Germany, and certain of his staff
advisors, particularly Mr. Horace
Economic

Gilbert,

Consultant

on

leave of absence from the faculty
of

California

the

Technology.

with

conferred

Institute

Heidelberg,

In

the

of

Commanding

members of his staff,

Major

General

baden

I

had

conferring
Cannon,

particularly

Noce.
In Wies¬
opportunity of

the

with

Chief

of

Lieut.
the

U.

General
S.

Air

Forces in Europe and Major Gen¬
ghis is

the first part of Repr. Gavin's

Report.
The remaining portion, dealing
with
Austria, Italy, Great Britain and
France, will appear in next week's issue
of

the

"Chronicle."




In

1949,

capable

of

deter-

a

be

should

personnel

tary

trans-

Unfortunately

r0pe..
done

involved

Korea;
mucb

the

and

problem

create and train
man

force

gret

to

is

an

already

Forces

in

that

U.

S.

Zone.

good.

the

social problems

serious

very

date

-phe

basic

question

is

cal industries

we

permitted to accompany

mans to

participate in the defense

ar.^.,no

personnel

military
serve

to

required

that country for extended

in

I do not pretend to have
solution for this problem; but

periods.
a

commend

and

attention,

to

your

that

suggest

seek

Committee

it

necessary

in-

and

As far

can

avadabie time.
^

vjew

be

taken

to

do

the

but

want

Govern-

German

could

^

s0

Germans

are1' concerned

the

longer

period.

not

defense

on

be

clear that the

two

major condi-

tions met,

before they undertake
program. The first of these,

the'^chief need at present appears such a
be additional bases, better lo- and the easier to provide, is full
cated for the purposes required in equality for Germany. Practically,
event

the

of

Most

war.

of

this

our

existing bases were simply taken
over
from the Luftwaffe at the
end

World

of

War II.

that

means

would

be

not

the

limited

Germans

in the size

0f the units they would

While the

organize,

and that their staff officers would

can

secure

bases

from which

re-education or re-orientation
Continued on pctge 19

it

continue to operate.

been

We

able

the

that

specialize in and offer our facilities
for the

whose

a much
understand¬

It is
British

should

purchase and sale of

STOCKS

BANK

fear

the

competition of a revived Ger¬
man
industry; but it makes very
little

sense

the United

for

Our

States

the

improvement of eco¬
nomic conditions in Germany by
to

seek

ECA

loans

British

and

of

program

of a group of the
available. A copy will be

year-end comparative analysis

country's leading banks is now
r

grants, while the

Government

sent to

you upon

request.

adheres to a

dismantling and de¬

stroying industrial plants.
(b) Military—As far
eral

as

the gen¬

military picture in Germany

is concerned, the

situation remains
basically unchanged from a year

ago.

There is

fense

in

to meet

It

is

a

at

the

borders

This

raised

,,

that,

Russians

of

their

are

now

25

which

will.

troops

estimated

reliably

commit over

visions,

Blyth & Co., Inc.

substantial de¬
Germany able

New York

•

San Francisco

•

Chicago

*

Los Angeles

major Russian offensive.

fany*time,

their

no

Western

Boston

at

could

own

Louisville

exclusive

Springfield
.

.i

•

Detroit

Sacramento

an<J able to move

is

•

Philadelphia
•

♦

Minneapolis

Pittsburgh
•

*

Spokane

•

Seattle

of the

by
n

•

Fresno

•

San Jose

•

•

Pasadena

•

Portland

Indianapolis
Oakland
•
Eureka

Cleveland

di¬

west of

and maintained

forced

very

to

for

program

the

MCQ0y be expressed the

that

matters

in

At my conference

menf WOuld cooperate

consistent policy.

Europe

action

sucj1

the United States Air

as

in

country; or upon what
permission
will be
it is whether and how

0ur

granted;

order to evolve a well

in

considered

Forces

terms

the

formation from the Department of

Defense,

their

of

shall "allow" the Ger-

and metallurgi¬
located, has con¬

are

tinued

not

whether

our

However, the
in

the

Germany.

to

which must be faced if dependents

During the past year, some

terminated

Government

I reof

much

There are, thinking on this matter, both in
however, other factors to consider, Washington and Frankfurt, apparticularly the morale aspect and pears to me to be sadly out of
ported

Germany

is understood that the program
the

we

effective Ger^

resulting

effects

in

remaining,

questionable.

state

we

is now

Whether

jn the limited time

can

was

before

hostilities

in

difficult.

more

little

matter

about the

became

had facilities have generally been ren- participate equally with those of
under
their
jurisdiction
some dered adequate, the bases them- other
nations,
in
formulating
16,000 units of family housing. Al¬ selves are not, in many cases, well plans for the defense of Western
most all requisitioned from Ger¬ sited for use in event of hostilEurope.
man owers.
Many of these quar¬ ities. If our Air Force is to be
Further, it would mean that
ters were poorly located for our
effective in event of a war, it must most of the present program for
Armed

pointed out to the Congress, and
it

I

General, U. S. Forces in Europe,
General Thomas T. Handy,
and

partic¬

policy,

have

therefrom

Zone major steel
the

situation.

force

ularly the dismantling of factories
and industrial plants capable of
producing civilian goods.
The
folly of this latter program, and

British

northern

anomalous

From

security standpoint, it is questionable whether dependents of mill-

on Western Germany, a
region already heavily populated. purposes, and the general state of
have
maintenance and repair was not
Aggravating this condition was the

dumped

in

GERMANY

Po¬

Millions

land and Czechoslovakia.

has been substantially
WESTERN

from

personnel there.

service

,

ethnic

to take care of the
and dependents of our

country

families

While
the
principal income
of
German
consumers.
likewise
be
increased.
In
my
purpose of my trip was, of course, However, most of the people ap¬
the inspection of military instal¬ peared
well-clothed, adequately opinion, however, no such aug¬
lations and units in the European fed and well-shod. The chief eco¬ mentation program can be fully
Theater, .and the evaluation
of nomic problem in. Western Ger¬ effective; and, a3 I shall 'discuss
efforts being made by our allied many
today;.* is unemployment, later," we must) at the earliest
Ger¬
powers in the North Atlantic Pact, which stems from two unfortunate practicable moment, rearm
an effort was also made to deter¬
decisions or policies adopted dur¬ many itself.
So far as dependent housing for
mine,
within
the limited
time ing the last stages of World War
The
first
of these was the the troops in Germany is con¬
available, the general economic II.
found
a
somewhat
situation prevailing in the sev¬ agreement for the
expulsion of cerned,' I
German

personally doiibt

5,'

whether it will be possible to provide sufficient family housing in

will

Powers

Western

military

personnel to Germany ringj if not withstanding, a Comcreate serious problems in munist drive across Western Eu-

"house¬

convinced

large numbers

of

movement

Europe has resulted

maneuvers.

possible.

It is my hope that

readiness must in many instances
depend upon the location and ac~

to have been well planned tivation of suitably located bases,
skillfully executed. I visited as noted above. I recommend that

the past military officials in Europe that Europe.

during

greatly

So far as can be judged, the
United States Army and Air Force

the

eral countries.

and equipment to improve combat

seven

port systems.

coun¬

sarily

not

made

been

storing public

While
the time spent
Army.

in

has

by modern jet fighters. The provision of other necessary facilities

.current program would by
(c) Poiitical-The major politApril of this year, have provided jcai question facing Western Gerefficiently dependent housing sufficient for many today is the rearmament
employed, better trained, and have the need of our occupation troops jssue
j addressed myself to this
a
higher
combat
effectiveness garrisoned in Germany. However, matter during the second session
than at any time since the end the
augmentation program now o;f
congress (jn February,
of World War II. The suspension under,way for that country will 1950) and called attention to the
of normal rotation to and from again
create a severe shortage. urgent need of providing some

every¬

are

one

of

equivalent

keeping" duties, and greater em¬
cleaning up rubble and removing
phasis
has
been
placed
upon
damaged buildings, but in replac-,
training,
including
more
field
ing commercial structures and re¬

Depart¬

ment

of

signs

The

Substantial

Germany.

ress

ders issued by

the

—

recovery

and

year.

where apparent in the U. S. Zone

Serv¬

in¬

Economic

(a)

economic

on

and

ices

certain ob¬

make

„

appear

force, the West¬

changed

below.

House

Armed

this

U.

unit ,at Heidelberg and was the Committee obtain, at an early
greatly impressed with the good date, a comprehensive evaluation
divisions.
The
strength
of the design and high standards of con- and report from the Air Force
It is estimated by our Staff
of
the
air
situation
in
U. S. Forces in Germany has not struction.

period, able to
portion of the

this

about

Zone and

S.

desired.

Powers have in Germany only

the

servations, which are summarized

request of the
Chairman
o f
Committee

during

also,

travel

in

equipment is conS. Air Force in

as

the

ordinate

alone.
only

To counter this
ern

I was

staff.

of his

course

theater if they

General

Brig.

and

Millard Lewis

pur¬

to

suant

other

and

Douglass

German Government and its sub-

This figure has the German Government or local
limited
signif¬ housing authorities, and at such
icance, because they could also time as they are no longer needed
move an overwhelming number of
by occupation forces, will revert
additional
aircraft
into
that to German control. These projects
Germany

economic military and political situation in Western

on

far

by the Europe is in much better condi-

standards,

to; American

So

cerned,

tion than it was a year ago. Most
agencies. The cost of con- of the propeller type of fighter
strength in their Zone of Ger¬ struction has been a charge on craft, which served well enough
German
economy,
but the in World War II but which are
many and are estimated to have the
over
2,000
combat
aircraft
in buildings remain the property of now obsolete, have been replaced

U. S. Congressman from Pennsylvania

■.

6,000 units of family housing for
occupation forces have been built,

of

regimes

Hungary and Czechoslovakia.

,

Republican member of House Armed Services Committee

satellite

Poland,
In
addition, since the close of hostil¬
ities against Germany, the Rus¬
sians
have
augmented
the
air

Status of Oui Defense in Europe

11

(531)

Th# Commercial and Financial Chronicle

.

•

*

San Diego

The Commercial

and Financial Chronicle

It is reported the short¬

of long governments.
of essential materials will mean the

funds for purchase
age

by

Our

debate

The

hot and

interest rates waxes

will subside in the near
that it creates in
the form of "open mouth operations" is keeping the government
market under wraps.
The enthusiasm and confidence that were
'created by Secretary Snyder's remarks have passed on into limbo,
and prices have come down from recent peaks, to about within
the range which had prevailed before the 2Vz% "freeze" state¬

'

Despite the reported distaste of certain monetary
authorities for the frozen interest rate idea, a government market
with protection is still very much with us.
Fluctuations
'limits, such as have been in vogue in the past, are to be
in the near future, because the "fors" and the "againsts" will be
airing their views, and this should keep the market from
'too far in either direction.
The near-term outlook, it seems, is
for no appreciable change in interest rates, but over the longer
:
term with controls,
regulation and higher taxes working, the
trend could be towards lower, not higher interest rates.
ment was

made.

within
expected

postponement of projects
■

-

'

.

centers have been making

(7) Halt inflation—One of the
greatest enemies of saving is in¬
flation itself, following the 15 or
more
years of almost continuous

intermediate and long eliand consumer loans
according to these
put to work in the
l3/4s, the 2A4s and 2V2S. While the purchases have not been sizable
in any one instance, as a whole, they are substantial enough to be
worthwhile element in the eligible market.
Charitable organi¬
zations and "planned investment" funds have been making com¬
mitments on a scale basis in the longest ineligibles.
There has.
also been some buying by these institutions, but in more limited

depreciation of the dollar. If this
lessening in value of the dollar
can
be conclusively halted, there
would
be
substantially greater

have not been
too active because of the storm losses of last year, but here and
there a few of them have been taking on the Vies instead of going

pushed, would itself help itself to

gibles to acquire these securities. Mortgages
are
declining and will continue to decline,
institutions, and this means funds are being

in

a

insurance companies

amounts in the 1959/62s.. Fire

into the stock market.

Views of

security
into the open
the Treasury
in future
be long or
short, brings with it an inflexibility that the various monetary
authorities (other than the Treasury) want none of because of
the inflationary potentials. Allen Sproul, President of the Federal
interest

The

pattern, the level

rate

if

of New York, was

advices.

A

win.

"

..

straint

available for purchase by institutional
investors are coming to an end, and it will not be too long before
these same institutions will be on the other side of the picture.
This could mean a demand for long Treasuries that might change
the whole complexion of the money markets and the action of the
growing

that mortgages

bond market.

forcement of
be

available

with the en¬
controls and the passing of time.
Also there might
in the not distant future more State and municipal
Bank loans should be slowing down

NEW BULLETIN

total

crease

most

are

suitable to
needs.

different

with

sons

in

cashable

only

should

con-

increased on all or most
consumption, except es-:.

items

of

sentials,

per¬

This

or

the

fol¬

tain

.

that
a

amount

Conversely,

(d)

could

the amount and
come

which

form.

";vj

(4)

has been applied toward
making existing savings instru¬
Solicitation — ments attractive, a concentrated
E v i d e nee is effort undoubtedly could do more.
conclusive As a starter, here are several sug¬

Donald B. Woodward

simply
and
person's income
might

tax

a

"

deduction

Add features of additional
attractiveness to existing savings
instruments—Though much inge¬

lowing parts:
'A' (1) Intensify

provided for

proportion of in¬

was

most

any

;yASi

Alfred Foote Director
Election

Alfred

of

S.

Foote,

a

Vice-President of J. P. Morgan

&

nuity

powerful

in

saved

a

Incorpo-

Co.,

rated, New

York,

as a

di¬

of

the

rector

Pond's Extract

(a) Make available a large num¬
to ber of different maturities of gov¬
increase saving. A major increase ernment and corporate bonds to
in the number and proportion of permit easier development of edu¬
people called on and the fre¬ cational and retirement funds.
is the

special-tax

a

be

gestions:

direct

,

(c) Taxation might be substan¬

tially

program

drive

savings

1;

savings instruments
at the end of the
emergency or other stated period,
except for personal hardship cases.

payable

should include facilities
be
started
at for objective, competent personal
once."
This advice, as well as printed matter.
should

saving

,

Co.

of causing individuals

method

to be

objectives can be furthered

which

in¬

drive to

solicitation

Waning

•

(b) All increases in compensa¬
tion in any form might be made

the

by

"a

of hardship

cases.

development of a broad be laid upon
major and de- educational program about saving, proportion of
various
possible forms and not saved.
t e r m i n e d the
Control,"

to

subject

period,

consideration

special

of the fun¬ than sporadic actions. And util¬
anti-inflation weapons ization of the form or forms most
to the individual
is saving.
As I said earlier in advantageous
and his family will develop at¬
presenting my eight-point "Rec¬
ommendations tachment and greater continuity.

that

controls to work, but the feeling seems

stated

other

The least developed

These

of

until the end of the emergency

damental

Inflation

in some form of
instrument not cashable;

be paid

savings

more

for

There
which

(a) Overtime and extended time

convenient. Recommends tax preference for
selected types of savings and payment of commissions on sales
of U. S. savings bonds beyond set minimum figure.

savings

impaired.

number of techniques

a

might be considered.

of New York

is

savings

incentives

production

struments not be
are

the least developed of anti-inflation
weapons, Mr. Woodward outlines plan whereby savings will
be encouraged and spending made more difficult. Urges inten¬
sification of saving campaign and new methods of making

Asserting

;,■.:

Mortgage, Bank Loans

some

harmed, and that confi¬
dence in the dollar and dollar in¬

might

change the mental attitude.

It takes time for

and

be

not

The Mutual Life Insurance Company

interim, while the pros and cons are being hurled about,
what should be the course of interest rates and the trend of

do much to

spending

on

and

work

By DONALD B. WOODWARD*
Second Vice-President,

government

r

■■;';

•

•

Caution would be imperative that

Savings Program

In the

security prices, the Treasury continues to operate
without need for borrowings.
This should be the case for some
time yet.
The inflationary forces continue to gain in strength
without the Treasury adding to them because of deficit financing.
So far, the momentum for higher prices has come mainly from
the fear side of the equation, that is, the fear that prices will
continue to go up./ This has brought about heavy ;anticipatory
buying.
This phase of inflation deals yvith the psychological pr
mental side and when it will subside cannot be readily forecast.
Nonetheless, it is believed a stiff tax law, balanced budget and
really effective enforcement of the various regulations and con¬
trols which are available to the government would most likely

■,

Finally, some forms of re¬

(8)

For the Emergency

the first to point out

'-v

saving program is one item,
forcefully
and
aggressively

of some of incomes
should be carefully considered —

of government

the infla¬
tionary implications of a "pegged" level of interest rates and a
confined government bond market within such a pattern of rates.
Marriner S. Eccles, of the Federal Reserve Board, was the next to
take up the cudgel against an inflexible interest rate curve and
the resultant inflationary effect because government securities
would be held within set limits.
This, it was stated, brings into
being credit which only adds to the fires of inflation.
Chairman
Thomas B. McCabe of the Federal Reserve Board has not clearly
defined his position in the new controversy although he is for
more rigid overall credit controls, according
to latest published
Reserve Bank

suggested, and of which

already

conscription

Sproul and Eccles

prices and their importance in fighting inflation flared
again, following the pronouncement by Secretary of
Snyder that the long-term 2Vz% rate would be the top
government borrowings. Any freeze in rates, whether it

so many

this

'

'

/

Success in this case, as
others, would probably
breed success. The program I have

saving.

going

-

will increase.

sure

recent sell-off in the

good use of the

heavy and there are no indications it
future.
While this is going on, the uncertainty

over

Thursday, February X, 195X

.

saving by exactly the same mea¬

municipalities, until the emergency is over.
short into long governments have already been

announced by one of the states.
„■
Banks outside of the large money

CHIPPENDALE, JR.

the level of

over

the States and

Plans to shift from

Reporter on Governments
By JOHN T.

,

.

.

J

(532)

was

nounced

to¬

F;
Treas¬

John

day.

Betts,
urer

an¬

and

di¬

(b) Provide tax preferences for
surely
rector
of the
Community, shop selected types of savings.
Lock
Joint
and office pressures should be de¬
(c) Provide packages of cash,
Pipe Co., East
veloped.
This effort should at¬ life insurance,- bonds and stocks
Orange, N. J.J
tempt
to
stimulate
the
total on an instalment basis.
and
director
amount
and
proportion of
in¬
(d) Allow special discounts or
of l. Eagle
comes
saved by individuals.
It rewards for prepayment of debts.
Stores
Co.,
Albert S. Foote
should be accompanied by a con¬
(e) Pay commissidns on sales
Charlotte, N.
ditioning
of
the
environment of U. S. Government bonds in
through extensive publicity and amounts beyond some consider¬ C., was also added to the Pond's
able figure each month, in order board at the same time.
advertising.
to
enlist the greater
efforts of
(2) Make Saving More Con¬
Three Join Lester Co.
venient—Quite a lot of evidence professional salesmen.
has accumulated that greater con¬
(f)
Permit borrowing on E
(Special to The Financial Chronicle)
venience
produces
substantially bonds at least for personal emer¬
LOS ANGELES, Cal.—John A.'
greater and more regular savings. gencies.
Bullard, Jr., William R. Hickey
National effort to stimulate sav¬
(g) Provide incentives to main¬ and Roy F. Holcomb have become
ings should seek to increase the tain savings and to keep up sav¬ associated with Lester & Co., 621
convenience
of
savings for the
South Spring Street, members of
ings programs^
*
.
American population.
More ex¬
(5) For saving that does most the Los Angeles Stock Exchange.
tensive availability of the payroll
Mr.
Holcomb
formerly
repre¬
of the calls would

quency

increase saving.

■

/

-

Within

the

Pattern

OF A

2Vz% Long-Term Rate

deduction for all
would

be

a

forms of saving

Regular

major step.

charges to; bank checking accounts
could
for

becqme more widely utilized
savings. Savings

all forms of

institutions might make
tellers

available

convenient hours.
the

ceding

incorporated

■

=■.

<

*

'

.

.*

-

Dealers in.U. S. Treasury,

*

.
.

State

and

15 Broad Street

Municipal Securities

'

•

45 Milk Street

NEW YORK 5

BOSTON 9

WHitehall 3-1200

HAncock 6-6463




*

••

'

.

-

i

Some

spots

solici¬

suggested in the pre¬
could

point,

lectors of

at

all of

or

become

col¬

saving at the shop, the

office, the farm, and the home.

~

•

receiving

key

members of the major

tation effort,

Aubrey G. Lanston & Co,

at

curb

inflation

give

a

greater

desirable sented Fairman & Co. in San
to increase saving in the middle Pedro and prior thereto was with
and lower income groups where Edgerton,
Wykoff
& Co.
and
taxation is lightest.
Higher re¬ Gross, Van Court & Co.
wards ought to be offered for sav¬
ing from such income groups in
Joins

reward—It

is especially

Bingham, Walter

whatever form.

(Special to The Financial

Make spending more diffi¬
cult—Make spending more diffi¬

ular

saving

savings

means

more

to

cult by

M. Jackson

making goods and services

staff

of

This can be done by
materials controls, business man¬

Hurry,

621

ient to buy.

by

-

ing is made
ficult

so

as

sufficiently more dif¬
to be lessened, then

40.

Cal. —James
has been added to the

ANGELES,

other than essentials less conven¬

saving except necessities, could produce
some interesting results.
If spend¬

Washington, D. C., Jan. 29, 1951.

LOS

Walter &
Spring Street,

Bingham,

South

members of the Los

Exchange.

be

Mr. Woodward to the
Joint Committee on the Economic Report,
♦Statement

Chronicle)

(6)

agement, and perhaps supported
by other devices. Probably a little
made regularly and systematically
imagination and ingenuity in ma¬
and in forms most advantageous terials controls to make it. less
to the savers—Systematic and reg¬ convenient- to dbtain most goods,
(3) Encourage

.

to

Angeles Stock

/

With Conrad, Bruce
ii

*■

r,

,

,

i

,

j (Special

LOS

to The Financial

.

u.

Chronicle)

-

"*

*

ANGELES, Cal.—Karl W.

Lundberg is now
Conrad, Bruce &
Sixth Street.

connected with
Co., 530 West
*

Volume 173

Number 4982

..

The Commercial and Financial Chronicle

.

What to

Bank and Insurance Stocks

This Week—Insurance Stocks
The

first, of the

major fire

Pointing out external

companies

insurance

have

operating statements for the year just ended.
Despite extensive property losses resulting from the explosion
South

results

losses

The

in

windstorm

November

final

the

maintained at
which

months

Middle

the

swept

:

Atlantic

in

States

panies.
storm

For

Continental

alone

This

$4,300,000.

was

$3,700,000.

estimated

the

attributable

loss

Fidelity-Phenix., the

For

Underwriting—
Net

Written—

Premiums

1950

1949

$62,563,864

$66,265,469

4,243,567

10,804,354

Underwriting Gain

Investment—
Net

of" interna-'

Before

Federal
Net

2,824,183

■

.

Income,

Taxes

$6,723,804

$5,771,105

18,049,853

9,547,987

13J363.895

Taxes

~i__

*3,480,928

4,981,979

2,041,969

3,659,722

$9,129,§08

$13;067,874

$7,506,018

$10,204,173

Income

of their annual statement

of

Insurance

available

when

reports

Additional

information

should

in public

life

who

"good

old

and

who

will

not

turn

On the basis of the information

presented, earnings

—Continental—
1959

Underwriting
Increase

Profit

—Fidelity-Phenix—

1949

$1.70

Premium

Unearned

•

:57

.

_

1950

1949

$1.41

$4.04

.

$4.32

.08

.

.39

.20

.

Underwriting

Investment

Net

Income

Before

Federal

Net

$1.78

.

3.35

—

Federal

$4.89

2.90.

$5.13''

Taxes.

Taxes

$3.74

'

$4.43

3.36 n.-i

2.88

$7.79

$4.97

1.99

1.02

1.83

$5.80

$3.95

$5.48

1.39;

Income

$1.61

Baker

the

if

they

are

to

the communist intention.

m^y

them

$7.31

of

adjustment has been

dividends of 25%

Phenix

paid in 1950.

should

be

made

the above figures for the
33JA% for Fidelity-

in

for Continental and

Also, in considering the above earnings, it
that these earnings are not consolidated

remembered

with the subsidiary companies.
When results for these companies
are
added to the above figures, earnings will be considerably

I

higher.
One
tion

is

i.:'.
the

of

the

gains

Continental

Phenix

most

made

showed

16.5%.

significant
of

Higher dividends

the' above

in

im investment

increase

an

items

income

15.4%

for

the

that for

and

tabula¬

security holdings

year.

Fidelity-

well as
larger volume of invested funds contributed to the increase ip

a

income.

issuing

the coming months other insurance

their

reflect

as

:

■

Over

on

annual

the

impact

investment

income

These

report.

of

large

and

companies will be

statements

are

expected

to

sustained in 1950; increased
taxes.
While results will vary

from

have

leaders

-read

the

Binford, Dunlap &
:
Reed; New Firm Name
DALLAS, Tex.—Binford & Dunlap

the

and

name

to

Offices

as

a

FRESNO,

Hall &

Calif. —Truman

has

Dunshee

joined

the

staff

of

Binford, Dunlap & Reed.
be

Southwestern

continued

J. Barth Adds

in

the

Life Building.

>

(Special to The Financial Chronicle)

LOS

ANGELES, Cal.—Charles
R. Kelley is now associated with
J. Barth &

OUR

YEAR-END

COMPARISON

•

•

ANALYSIS

&

of

18 N. Y, City

of INDIA, LIMITED

Com¬

Head
Will

be

sent

on.

Office:

London,

request *'
Branches in

Laird, Bissell & Meeds
Member's New York Stock7 Exchange'
Members

New

York

Curb

Exchange

120 BROADWAY, NEW YORK

5, N. Y.

by its leadership, past and pres-

war plant would or fears to tell about it. (The first
be building. This is actually be- duty of a statesman is to get himing done on private initiative, al- self reelected so that the country
though the method is not fully Can continue to benefit from his
defined arid not fully compre- wisdom. The truth about inflation

ent, are:

hended by

seeds

The

steps in its

Bell

Colony,

1-1248-49

Manager Trading Dept.)

Specialists in Bank Stocks




Kericho,
and

Paid-up
Reserve
The

Teletype—NY

defined

program

vious, shrewd, clever, appealing;
creating soft-headed fellow trav¬
can

communists

fanatical

and

elers

who

engage

inr—

.

into

leading

(2)
Subversion,
sabotage;

(3) Sabotage and violence, lead¬

ing

insurrection;

into

Insurrection

(4)

violence,

and

leading to,

Revolution.

(5)

Kenya,

position

eventuallv to

vineial

status

^Note

Lenin's

nro-

Soviet Republic

as a

Works

Stain's Fundamentals

of

Lenfn-

ism "etc 1
'

has worked with
effectiveness. and there is

This program

Capital
Fund

£2,000,000
£2,500,000

Bank conducts every description of
brnkir.g and exchange business

Trusteeships and Executorships
also

undertaken

by Congress. Affer appropriations
made, military procurement
erratic and lurchjng fashion, as varying and
changeable goals are from time to

Went the other way.

of

between

war

war,!'
<

sellers load up with inventory to
sen

f

peace.

prices,

antr

adthose inventories.

currency—are

vanced to carry

Price controls, wage controls,
appeals to patriotism and Congressional rhetoric are alike im-

inflation;

with

deal

to

potent

When you see non-defense expen-

ditures cut back to the vanishing

point, defense-expenditures scru-

appropriated amounts, simply be- tinized until, the cost of stationing
cause experience has shown that a man with a rifle in a foxhole is

11 Is not possible to spend to the
Jimit of emergency appropriations,
This total military expenditure in
1951 will probably be somewhere
in the neighborhood of $40 billion,

(4) Military procurement in
eration

something near that of other nations—now it is nearly three times
as much-and a vastly broadened
income tax or general sales tax

imposed to balance the budget,

op-ffijgr ^This"^ not^to^ay
sa,es

carries

taxV

a

equitable but it is anti_

jnfia*jonary \

that

until

day,

must

you

ff

h

as-

of govern_

t

sume tnat t
g
ment regarding inflation are di
rected not toward checking it but

uncLtafntfe^aM^

and peace. Not prop-

: >
is an

It

•

in

.

any
;

intermediate

—I—l
.i
d
i
- •
.l
aiu
An address by Mr. Baker in the 4th
Annual
Fcrecawting- Conference
of the
Chamber
of
Commerce of
Philadelphia,
Pa.,

Jan.

ing

buy-

of military procurement,

to-

^ntintUhanCu
^ 8^6^Govern^"an the United btates C

erratic stock-piling, ment, which is where the blamew«!
inhibit much civilian produc- belongs.
Forecast
tion that otherwise might occur,

called cold gether with
not
.

situation, but it controls and in-

Philadelphia,

loans—deposit

tions made> The strain on indus" toward laying the blame for its

.

sense

higher

intermediate

-

■

those

at

international

certainly

but
.

Prices jump,

are

will operate in

an

described when

erly
^

as

conflict

havp

WP

situation

looks

it

higher;

wages. Someif the process

times

With it great attendant
from it. It defines not only their waste. In this nation we do things
prospective acts but also what we on a large scale. That includes
need; to do.
IV indicates small the .wastes of military procure-probability of direct military en- ment.
Contracts will be made,
gagement with Russian forces.'
changed, cut back, and substitudeviation

expect

to

reason

cause of

challenged and frequently reduced

time established.

7.

authority and the adja-

satellite and

Thus

and Aden

£4,000,000

for'money, which in turn will be prices and higher

the
communist center is prepared to

becomes

reelect anyone.)

js unlikely to

excessive— demands is;a fundamental

frequently

at this stage that

it is

And

Zanzibar

Capital

governmental agencies.

(3) A military policy is almost
Adding to the supply of money
always a result of compromise. —either cash or bank-deposit cur¬
This case will be no different. It rency—faster than assets equiva¬
will be characterized by high— lent to this money are produced

(1) Propaganda, continuous, de¬

Uganda

Bishopsgate,
E. C.

of living.

meanwhile added

adequately waters the
of conflict within capitalism,
it

if

ceed

India, Burma, Ceylon, Kenya

Subscribed

Telephone: BArclay 7-3500

(L, A. Gibbs,

26,

plant for the

new

commun-WcLfthesis is,*/. of plant would continue for civilian look wise.' The'" reason for this is
course,
simple, ( namely", that the purposes so long as men and ma- that most of Washington—both
capitalist system is dying, torn terials were available for produc- friend and foe of the Administraapart by its own conflicts, and that tion in them, and that in the tion—doesn't understand inflation

Bankers to the Government in

Kenya Colony and

build

improvise a new one in space not ing inflation, the sort of inflation
adapted to the purpose. This would which .for a long time makes
leadership, mean, of course, that existing every-merchandising commitment

communist

acterizes

to

which char-

program

'

i

Bank Stocks

policy of administration will
permit
recurrent wage increases, thus
be such as to encourage or

The A

•// great,

NATIONAL BANK

the

own conduct in the WLB, whicn
world war have been learned- raised hourly wages 46% in 1942particularly that it is more effi- 45 to offset a 22% rise in the cost

Few

_

^

smalh

.

authority that previ-

of

controls, we may be quite sure
that the machinery of control and

production of war materials than
(7) For the long run, the outto tear down an existing plant and look is for continuing and increas-

Co., 210 West Seventh

Street.

about

price control

Even though

(6)

is established with attendant wage

cierit

previous

cent state advances to the

Hall, Helm Building.

This will

year.

century.
Few of
them have acquainted" themselves
w.ith the fanatical devotion to the

the

of

part¬

change of their firm

will

[

(Special to The Financial Chhonicle)

the association with

announce

them of Keith B. Reed
ner

Joins Hall & Hall
V

kind

retain

will

Sudden excursions wil1 be made into the markets> and then periods of lulls and
give its direct military assistance lapses in procurement will occur,
to the communist in revolution in We know that during any given
anv area adjacent to the commuperiod the procurement agencies
The
assistance will expend from 65% to 80% of
E. ni<ft mnthprland

company to company and be below the record earnings of
1949, they should be favorable as compared with earlier years.

the

of

half

munist literature running back to

losses

higher

ond

and armament program of the last

clearlv under-

our

international communism can sueAn

stock

Ued price increase during the sec-

ous Presidents have exercised, and placing further^ pressure of rising
JJjat t e Congressional responsi- costs on the price structure.-Two
bilityTor the guidance of policy members of the World War II
Wl11 also be recognized.
War Labor Board now appointed
)(2) We hope that part of the to the Wage Stabilization Board,
lessons written by the conversion have publicly applauded their

last perceive it and
that

communist
Adjusted

Jacob

to

President

the
on

not themselves

of

per

on a

(estimated as follows:

The result will be contin-

come.

be-

zone

international war
activity will be compromised, that
agreement

Unfortunately, the necessary steps
stood by

of existing law as a
governmental action
very well. However, in

"XI) We suppose that the constiquestion of Presidential
authority versus Congressional

shred of the confidence
of the nation they must take steps

are

jvould a

tutional

Joe"

to. meet

truly as
of peace.

probably be masked by price contween war and
peace, we shall trol,
so
that the inevitable inalso have to take some account of creases must be effected by detepronouncements of intention of rioration of quality and eliminainfluential people. Thus, we make tion
of
low-margin
items and
the following assumptions:
lines.

can

realize

of

us

into

1951

,,

use

to

served

retain any

missioner.

share basis for the two parent companies are

guide

traitors. How-

be

the

of

half

last

will be felt.

:

,

the Current intermediate

men

evl?ry they^at

as

we

war or

that

the

their backs

filed with the State Insurance Com¬

are

of

get along with

prescribed by the National Association

as

Commissioners.

When

the

Even though taxes are raised.
they will probably not be levied
sUCb ways as to blot up excess
have a defined inter- purchasing power. This purchaspolitical status, either ing power will be largely in the
peace, we have found middle
and lower levels of in-

us

war or

national and

those

to

news

the companies rearranged the presentation

as

no

the

is

This, of
course,
is

detailed operating statement comparable with that of

more

that

This

to

conquer

also
A

1949 is not available

clear

it.

world{

8,092,790

$7,245,499

state of

placable,

m

munism

\

12,610,436

fluences

upon

tional "com¬

.

$8,366,869

_

long-

years

so

mistake

last

a

pressure

pa¬
tient intention

$53,638,815,

v

Investment

Income

$52,556,650

become

can

persistent,

.

*

has

was

—Fidelity Phenix—
1959
,1949 ;,

*

few

loss

the result that profits for the full year were
considerably lower than in 1949. They were substantially better,
however, than the showing made in 1947 and 1948.
For purposes of comparison a summary of the operating state¬
ment including the investment results for the past two years for
Continental and Fidelity-Phenix is shown below.
4
—Continental—

last

i

half of the year with

-,'1

probably be trimmed down. Since,

earnings, after taxes, rising $1 billion,

A

external

this

underwriting gains of the

the

the

one

,

catastrophe limited

i

to

;

.

nation arising from patient

1952, we shall have expenditures
running at a higher rate than tax
collections, an inflationary effect

In

us

oper¬

over

existant

one

as

compromise will

of

in

v.,

•

-

ate, and that we will not tax high
enough to cover expenditures
completely in the second half of
the year- or for the fiscal year
ending June 30, 1952. Recent pro¬
posals for increased taxes will

i.e., $22.5 against $21.5 billion in 1950.

of the severest in the history of
the United States. It was particularly destructive to property and
had a significant effect upon the underwriting of the two com¬
recognized

was

cedure

increasing inflation, with increase
aggregate personal income from $230 billion to $265 billion

the

of

profitable level.

a

American

the

he forecasts continuing and
in 1951 and corporate

1950, and widespread
year, underwriting

Amboy, N. J., sustained in May,

were

of

demand

(5) As to taxes, we may assume
that again our characteristic pro¬

Baker finds current situation also affected by pronouncements
of intention of influential people. On the basis of this situation,

panies of the American Fire Insurance Group recently issued their

at

on

the

intention of international communism jto conquer world, which
has caused intermediate zone, between war and peace, Mr.

now

issued their annual reports for the year 1950.
The Continental Insurance Company and the Fidelity-Phenix
Fire Insurance Company of New York, the two principal com¬

windstorm

pressure

mamenD program and most of

consumer.

Management and Planning, Econometric Institute, Inc.
New York City

on

JOHNSON

E.

13

rising

By JACOB BAKER*
Consultant

H.

By

Expect in 1951

(533)

18,

1951.

in

However,

the

course

of; the

adjustments will be
made and we shall probably find
many

year

OUr
.

j

'

a

•

,

a.

4.

^,,v.

contain and support both our ar-

described

methods

upon" the"assumptions"
,

,

,

presented,
industrial structure Can v
•

that

the

Using

the

..

Continued

just

.

following
on

CODStl-

page

16

14

and Financial Chronicle

The Commercial

(534)

Aeronautical
Prospectus
your

Plan

investment dealer, or from

National

securities

120 broadway, new york 5. n. y.

to

rated,

Ltd.,

a

Securities,

in

change for Bullock Fund stock.
This proposal will be presented to
shareholders of Aeronautical Se¬

Dec.

31

share

on

states in the 1950 annual
report that "the conditions which

your

of

conditions

The

share, on Dec. 31, 1949.

or

well justify a higher rate of

may

last, equal to $7.78 a
outstanding capital stock,

capitalization of corporate earn¬
compares
with total net ings and dividends than has here¬
tofore prevailed."
of $1,159,059,
or $5.23
a

assets

war

a

econ¬

the name and ad¬

uct" may not

CALVIN BULLOCK
Established 1894

New York

pact

Securities

Nation-Wide

Services
at

pub¬

Com¬

ot

Investment

shares
:

needs
and
dress

the

meet

to

special

institutional

both

oi

all types

Company

private investors. Ad¬
the Manager, Mutual

Funds

Founded 1865

Curb

Exchanges

Uptown Office 10 E. 45th St., N.Y. 17

MUrray Hill 2-7190

in

of

end

the

fiscal

any

history

the

of

pe¬

com¬

according to its 1950 annual
report.

pany,

Assets

reelected

dents

Investors Group

Increases

$70 Million in 1950
Average

Total
tual

net

Holdings

Capita

Per

$2,189 to $2,642

Increases From

of

assets

three

funds

investment

Continued

mu¬

managed

on

29

page

foreign countries.
the

at

value

asset

share

Per

year-end was $17.65, up 20%
from the figure on Dec. 31, 1949.
The 85 cents per share dividend
1950

payment from investment income
1950 was the highest in the

for

1950,

of

fund

the

Dec.

on

31,

of

directors

as

-ft.,

■

■.

cell,
Mr.
Bradford,
Robert
Bulkley of Cleveland;
Carl

Clarence
W.
and

Va.,

investments

of

Guild,

J.

Charleston,

Meadows,

Harlan

and

Stallman

J.

Robert

total

shares,

Nygaard retail

K.

Min¬

of

The

largest

common

stocks

$7,590,363.
in

net

oil

assets;

$1,098,375,
trade

or

shares,

3.58%.

and

gas

6.98%; and
$564,738, or

/

Reelected

Directors

as

of

In¬

vestors Stock Fund Inc. were Mr.

Bradford, Clarence
E. Drake of Minneapolis, Randall
Purcell,

F. Fullmer of Rocky
and

B.

Eugene

River, Ohio,

of

Hanson

Way-

zata, Minn.

:ystone

were

industries

as

Mr.

the

increase in net
during 1950 is reported

1950

as

directors

year-end

In¬

earlier.

of

Number

were

increased

by

Mr. Bradford,

John

included

individuals

35%

$83,-

were

year

a

shareholders

Inci

Selective Fund

Purcell,

of

to

24,437
in

and

every

Custodian
how

Funds

are

discount

a

selling
of about

35% from stated asset value
of

as

September 30,1950
*

*

*

.

.

in¬

.

10-year record
available.

petroleum, rail, steel,

Eisele & King,

Libaire, Stout & Co.
50

Broadway

'

New York 4, N.

^Individual Shareholders Up

;

Y.

41%; Total Stands at 61,000

and

institutional

of

number

The

shareholders
in
Fund increased 63%

fiduciary

Wellington
the

and

individual

of

number

shareholders

41%

in

1950.

The combined increases boosted

the

total
the

in

fund to
on

number

of shareholders

INVESTORS STOCK

open-end balanced mutual
an

Dec.

FUND, INC.

all-time high of 61,000

1950,

31,

at

43,000

compared

as

the

close

the

of

Dividend Notice
The

Board

Stock

Fund

dividend

of

of

Directors

has

of

declared

twenty

Investors

quarterly

a

cents

per

share

payable.on February 21, 1951 to share¬

Fund's

institutional

and

H.

totaled
1,809 at the year-end against 1,109
on
Dec.
31, 1949.
In a break¬
*

down

Fund

of

this

classification

the

reported that its current
list
included
928

shareholder
bank

and individual trustees;

record

as

of

January

31,

1951.

shareholders

fiduciary

on

K.

BRADFORD, President

Principal Underwriter and
Investment Manager

INVESTORS DIVERSIFIED SERVICES

Established 1894 as Investors Syndicate

Minneapolis, Minnesota

279

insurance com¬
panies;
153 employees' pension
and profit sharing funds, frater¬

corporations and

nal, welfare and other public as¬
sociations; 147 church and re-

t6 express percentage return

Accordance With the SEC "Statement

In

Shares
at

increased in such

Wellington's Institutional
List Increases 63%

The

by Fundamental Investors. Assets
at

SHAWMUT

ASSOCIATION

holders

$28,277,000

asset value

698,000 against $55,421,000

Reelected
vestors

A

economy

000.

'

dealer

or

metal and textile."

with

$28 Million Increase

Mr.

defense

or

war

vestments

preceding year for a gain of 18,-

Fundamental Reports

investment

PHILADELPHIA 2. PA.

mand to the conditions of a semi-

i

public
utility
shares,
J. were in
R. holdings of which had a market
C.; value of $1,613,163, or 10.25%

Washington,
D.
Adams, Mass.;

Jr.,

Henry

of

value

In¬

your

•

.

neapolis.

%

upon

were

52.68%."

Grady

were

^-Ajn**~'~prospectus from

company's history, and was more
than double the amount paid per
share
a
decade ago.
An addi¬
tional 28 cents per share was dis¬
tributed to shareholders from net

Clark, Clyde J. Moore, E. Frank¬
Holdings of common stocks rep¬
lin Hatch, Norman B. Waag and resented 48.23% of total net as¬
Harvey C. Carr.
sets on Dec. 31 and had a market

Gray
• r

the

for

riod

of Minne¬

vestors Mutual Inc. were Mr. Pur¬

Kidder, peabody & Co.
Members New York Stock and

in

directors

Bradford

K.

Reelected

Department.

annual meet¬

est

distributed as follows:
investments for stability, 47.32%,
apolis was reelected President of
and investments for appreciation,
the fund companies.
Vice-Presi¬
Harold

licly offered Mutual Funds.

announced

was

funds

of the
Minneapolis.
ings

complete, impartial

it

Inc.,

close of the

the

Diversified

Investors

of

iates

;. /; Our service covers

and 13,420 men and
jointly owned shares.

state of the Union as well as sev¬
eral

portfolio planning.
There
pany had total net assets of $15,- was a rapid shift from considera¬
Inc., and Investors Selective Fund
tions of ordinary supply and de¬
Inc., the three mutual funds affil¬ 747,280 on Dec. 31, 1950, the high¬
Investors Stock Fund

Mutual Inc.,

Write for

share¬
women,

legally be used.

"will strike with uneven im¬
on different industries," he
said.
"Some
should
experience
capacity operations and relatively security profits at the year-end.
Three Investors Group
favorable earnings for an indef¬
In
commenting on investment
Mutual Funds
inite period.
Others will suffer
changes made during 1950, Pres¬
serious
impairment of earnings ident Edmund Brown said, "The
Robert
W. Purcell
of Cleve¬
particularly as a result of price
land, Vice-Chairman of the Ches¬ and materials controls and the in¬ outbreak of war in Korea had a
profound effect upon the out¬
apeake and Ohio Railroad, was re¬ cidence of
higher taxation."
look for individual industries and
elected
Chairman
of
Investors
omy

information about any

men
who

women

24,400

Any recommendation or slo¬
gan which goes beyond indi¬
cating "exclusively the name
and composition of the prod¬

look,

Purcell, Bradford Reelected
Chairman and President of

One Wall Street

of

maker, the whole¬
salers and retailers."

statement to should prevail for an indefinite
be mailed to shareholders about period ahead are essentially in¬
Feb. 10, 1951, accompanying the flationary, and they seem to rule
notice of the Annual Meeting of out any probability of a business
shareholders on March 6, 1951.
slump beyond the temporary mal¬
Aeronautical
Securities
had adjustments of conversion to de¬
fense production.
This prospect
total net assets of $1,369,026 on

which

dealer

and composition

name

the product,

of

President

included

curities in the proxy

SHARES

investment

"the

the business out¬

on

ad¬

vertising is to be restricted to

dress of the

Bullock,

commenting

Pub¬

decreed that "apertif"

has

Probability

Nation-Wide Securities Company,

ex¬

report by Editor &

lisher, newspaper trade maga¬
zine.
The French Government

Maladjustments

Hugh

of

to

a

23,180

individual

of

list

The
holders

advertising, according

tory

.

Conversion

Temporary

Incorpo¬

fund,

specialty

Minne¬

of
.

Hugh Bullock Foresees Only

liabilities of

assets and

a

C.

Business Slump

Fund,

the

of

it

Prospectus from

Strachauer

general
management fund, has submitted
a
proposal for the acquisition by
Bullock

Aeronautical

DIVIDEND

Arthur

promulgated upon them one of
the strangest laws in the his¬

Inflation Rules Out

10

About Feb.

Lucian C. Sprague and

to

Submitted

Be

V. Dobson,

apolis.

Specialty Fund Shareholders

&

corporation

research

Absorption

request from

upon

Thursday, February 1, 1951

.

homes.

producers of "aperi¬
tifs" and the like have just had
French

By ROBERT R. RICH

Bullock Proposes

French Version

—

.

ligious organizations; 192 guard¬
ians, executors and administra¬
tors; 65 colleges and educational
organizations and 45 hospitals and

Policy

Statement of

Mutual Funds

.

of Policy"

'

Certificates of Participation in

When
the
1

IN
BONDS
(Series B1-B2-B3-B4)

PREFERRED STOCKS

expressed

are

as

a

return

percentage

following must be observed:

INVESTMENT FUNDS
investing their capital

dividends

The

dividends

vestment income

used

only, in

must
a

be

those

paid,

complete fiscal

from

net

THE LOW

in¬

year.

PRICED

2 Such dividends must be related not only to the current
offering price (and its date shown) but also to the average

of

STOCK FUND

monthly offering prices for the fiscal year in which they
paid.

were

3

of

You must also disclose either

(Series K.1-K.2)

a

COMMON STOCKS

b

the

asset

value

per

Group Securities, inc.

share at the beginning and end

of that fiscal year, or

the

(Series S1^S2-S3-S4)

percentage

during that
and in either

Prospectus

Tke

way

be obtained from

Keystone Company
of Boston
50

Congress Street

Boston 9, Massachusetts




increase

case

you may

arately, and
distributions
during that year.
4

It

cussed

will

should

be

represent

decrease

in

asset

value

made

either adjust for, or specify sep¬
paid from profits or capital

clear

that

the dividends being

dis¬

results for the period only, and that they

vary—more

particular fund

or

year,

or

less—depending
class being offered.

or

•—From Distributors

on

the

nature

of

Group "Memorandum to Dealers"

the

a

prospectus

from your

Distributors

on

request

Prospectus from your local Dealer; or

investment dealer

American Funds

Group, Incorporated

Distributors, Inc.

63 Wall Street, New York 5, N. Y.

650 S.

Spring St., Los Angeles 14, Cal.

Number 4982

Volume 173

.

.

The Commercial and Financial Chronicle

.

(535)

lhat is what I mean
by remark¬
ably steady business over-all.

The Battle of Production
Securities Salesman's Corner
salesmen

Some

told

have

me

is warmth,

Chairman of the Board, Lionel D. Edie &

and an ex¬

rather go out and pectancy to their conversation that
see people whom they have never
conveys friendship, confidence,
met before than do anything else. and good-will.
This is something
that they would

Naturally, these men seem to have
difficulty in opening new
accounts—they enjoy it! In most
instances
it
is
their
approach
which not only obtains interviews
for them, but also it is the main
reason why they make sales.
Most sales are made or lost, the
moment you enter the presence of

little

prospect. If you will analyze
why this is so, I think you will
agree that as soon
as you
meet
other people they can see an ex¬
pression of your own inner feel¬
ings and convictions in your atti¬
tude.
I think these things show

that
be

the

in

more

ways

we

than

if

the

on

cannot hide,

believe in what

other

man

will

trying to do
lieve

that

that also

carried

we

of

front

we

If

it.

are

we

and be¬
helping others,

are

is transmitted to others.

if you are doubtful of

And

we

good job

a

we

sign

If

doing—the

are

sense

any¬

a

coat.

our

your¬

that

think

what he

in

a

tries to believe
doing, and does it

is

saleswork,

other

any

or

will cool

In

The

respect to whether or not it
advisable

more

make

to

than

Concludes

we

most

important thing that

American business

do

can

today is

to

going out and calling

is

it is my
depends
upon your own state of mind and
the
territory you are working.
Some morning you may just feel
right about going out into a cer¬
tain section of a highly congested
area
and calling upon six to ten
likely prospects. Another time you
may feel more like sitting down
at your telephone and arranging

this

im¬

so

more

clear¬

ly than he has ever been able to
see them before—you are not go¬

is

and your
either tell

be able to
an

gain

him

that

he

hope
of p e a c e
of
avoiding a 11 -

is

with

war

Russia.

It

is

the

only way
of discourag¬
ing Russia

from

striking.

rule

with

over

clients

there

is

tween

our

and

close

a

actions

one's

in

in actual sales work

or

own

prospects,

but

connection

be¬

emotional outlook

Sales

stantaneous.

in¬

psychologists

of

yourself, you are go¬
ing to have the right "approach"

are

sure

whether

the

you

telephone,

at his home

or

meet
or

your

call to'-

man

see

on

him

office.

ginning

approach,

your

determines

often
you

of

whether

which
not

or

Goodbody Opens Branch
In Louisville, Ky.

will make the sale.

The

same

holds true when

you

&

LOUISVILLE, Ky. — Goodbody
Company, members of the New

York Stock Exchange, have opened
a
branch office in the Heyburn

arranging appointments over
the telephone. A voice with a per¬
Benjamin W.
Cregor
sonality behind it conveys a posi¬ Building.
tive
Mr.
impression.
You have, no will 'be resident manager.
doubt, often made a mental note Cregor was formerly with Merrill
are

of

different

the

that voices Lynch, Pierce, Fenner & Beane.

ways

register with you, when you talk
with people over the telephone.
Those who drop their voice at the
end of

a

sentence leave you with a

"let down" impression.
are

too

Others have
feel

that

them,

a

you

sitting

may

Those who
annoy

you.

Next

I

proceed to a matter of

definition.
that

the

the

win

we

Cohen, Simonson & Co.,
bers of the New York

change,

have

battle

of

mem¬

Stock

opened

a

Ex¬

be

large

as

as

order requirements

third
be

the

And

my

tar¬

of

this

quarter

ofthe

one-third

two

purposes

com¬

-

That
that

will

is not

the

one-third

same

of

production

all

will

saying

as

other

be

forms

directed

to

Certainly not a
food industry, cer¬

purposes.

third

the

of

a third of the clothing
Against that background let me industry.
When I try to get an
come now to certain specific ques¬
over-all measurement of the ratio

tions having to do with the
of
business in the
year

pattern
ahead.

of
I

business

war

arrive

at

to

total

business

this

result—currently
military expenditure is at an

During the past month I have sat our
in
many
conferences of econo¬ annual rate of between $15 and
mists.
I have taken part in their $20 billion.
By June 30th it will
business

the

of

out¬

uncertainties

I grant the un¬

us.

be at

certainties but I do not grant the

at

of about $35
by Dec. 31st it will be

and

annual

an

$55

annual rate

an

these discus¬ billion

the

been

that surround

that

of

of

rate

billion.

What

the

total

from

$50 to

proportion

business

is

trans¬

inference,
which
is
that
since acted in the country?
We have a
everything is so uncertain in the figure we call gross national prod¬
It is the dollar value of all
world today it is impossible to uct.
with

state

conviction

reasonable

business done.

That

would

mean

forecast of the course business that currently the military- ex¬
is likely to pursue during the com¬ penditures are 6%
of gross na¬
ing year. Regardless of the un¬ tional product; by the middle of
certainties
the
over-all
volume the year they will be about 12%
will
remain
remarkably steady and by the end of the year about
any

18%.

during 1951.
The over-all volume will not in¬

battle of

Many people seem to

production?
think

is

What

that

Organization for Government-

much for the simple reason

crease

we

limited

are

to

as

Business Cooperation

man¬

My next step in analyzing this
question is this: what is the :most

production simply by producing power and limited as to the avail¬
more
of everything.
Produce ability of certain essential ma¬ essential
thing that business must
terials of production.
So unlike
more, more, more seems to be the
World

I

Wars

II

and

at

similar

do

and

the

government

cooper¬

I doubt
ating with business must do in
the accuracy of that view. Other stages we shall not see in the com¬
order to win this battle of produc¬
ing year any striking increase in
people seem to think that we win
tion?
The correct answer to that
the
over-all physical volume of
the battle of production by cur¬
is "organization." In a war period,
production.
tailing the civilian economy.
organization always involves some
The Federal Reserve production
Again I doubt the soundness of
team work between the govern¬
their judgment. As a means to an index
recently has been 210 to ment and business.
The President
end, various curtailments will be
but the act of curtailing

necessary

does

battle

the

win

not

battle of

of

pro¬

does win the

What then

duction.

production? It is produc¬

If it continues to be computed

215.

with

change in method it will

no

little different from that

average

throughout

point

the

tation is changed

and in the right
amounts—but the right things.

ber will not remain

the

right

time

man

for the hu¬

mind to react in this manner:

whatever

happened

to

be

the

right things in the last war are
assumed to be the right things
this time. But rarely has that been
the case. The art of war changes.
The methods change and the right
things this time are not the same
as the right things last time. There

and

next

12

If the method of compu¬

months.

ing the right things—of course, at

Now it is customary

Cohen, Simonson Branch

branch
at
151
West 28th Street,
way of making you office
New
York
City, under the man¬
are right
next to
in the same room, agement of Ben M. Lewis.

"breezy"

country

keynote in many circles.

have made studies of almost every

phase of the selling process, and
they claim that it is only a matter
of a few seconds, right at the be¬

confidence anybody in
could have of win¬
ning that war is that we first
must win the battle of production.
primary

this

de¬

tainly not

has

may

almost

Maintained

Be

in 1951

sions

some

reaction

The

to

Business

the

bined.

of

,

out

for

war

The keynote of

planning,

win

production.

look.

should

the

of

will

business

discussions

benefit from
interview with you, or he will

not.

American

area,

face, your man¬ and the way we work at different
tone of voice that times. If you feel right and you

ner,

worries

the

and

the main

days

your

will

despite the problems of

hour I have the utmost confidence

ahead.

ing to fumble around and hesitate.
When he meets you there will be

something in

for

hour

be

That

indirect

industry.

total

that

the

will

purposes.

both

war

would

the battle of

it

—

ualize his investments

the direct

get

add

satis¬

I think the indirect defense

requirements

year

that

several

includes

alone.

mean by the bat¬
production and I hasten to

of

figures for
very

production

defense

So that is what I

because

for

steel

for

tle

portant? First,

upon prospects,
that a great deal

interviews

the

third

and

war

not

are

fense requirements and direct war
orders— it is not direct war orders

field must be maintained.

belief

Second, it is
You may be in a rural
important be¬
and again your own inclina¬
cause if there
just can't hide things like that.
tion and judgment will guide you
should
come
That is why a sound foundation as to whether or not you should
all-out war
Lionel
D.
Edie
is essential.
If you know the se¬ step into a telephone booth with
with Russia,"
curities
business
if
and
I'm
you
have a pocket full of nickels and make
not
background—if you can remember some appointments, or go right trying to predict that there will
and point out the pitfalls of the ahead and make your calls.
come
or
won't come all-out war
I don't mean by this to imply with Russia, but if there should
past—if you can sit down with
another man and help him to vis¬ that
impulsiveness and intuition come all-out war with Russia the
self and your mission, it will also
be very obvious to others — you

electronics

an

directly

some

of

used

imposed inflation fears

are

in

are

make sure that this country
attempt to
appointments, wins the battle of production. Why

telephone

rather

Co., Inc.

in the steel

work.

is

off.

therefore superiority in this

of

kind

mandatory price controls

soon as

as

that is best suited to his
personality, is the man who
scores
the
most
bull's-eyes
in
way

own

purpose

factory but I have an estimate of
the proportion of total steel that
will be going into defense pur¬
poses by the third quarter of this
year.
My estimate is that a third

Economist, in contending big job ahead for business this year
production, and battle of inflation is subordinated to that,
predicts level of industrial activity and volume of purchasing
power will be steady in 1951.
Stresses need of teamwork of
government with business for increased production, and holds

who just

in

your

up

I

Sometimes

man

this

is

must

affected—it

be

cannot

real.

to peace business. The

By LIONEL D. EDIE*

there

and

In this general pattern let us
consider the ratio of war business

And the Business Outlook

JOHN DUTTON

By

15

the index num¬
quite as even

steady, but that is a matter of

technical method in computing in¬
dex

numbers.

index

And

whatever

the

number may

show as a re¬
sult of change in method the true
physical volume of-business in this
country will remain remarkably
steady at around this level.
will

That
level

of

aware

be

steel

true

also

production.

that this is

a

of

the

I

am

center of steel

of the United States recently des¬

ignated Mr. Charles E. Wilson,
formerly President of the General
up organiza¬
tion. I think the majority of peo¬
ple will agree that is an excellent
Electric Co., to head

choice.

ing

a

We

man

in

ence

perience

I

the

last

in

him

fortunate

our

war

and

private

this

assume
owe

are

in

hav¬

of Mr. Wilson's experi¬
his

business

responsibility.

ex-^.

to^
We

support.

What is Mr. Wilson going to do?
believe there is coming rather

quickly, by quickly I mean within
approximately the next 30 days,
an

important

number

of

control

orders both in the field of

produc¬
The level of output tion and in the field of prices.
something new that has been production.
will change Most people at this meeting today
added and that something new is of steel production
in the field of science, the field of very little during the coming 12 may be shocked at the scope of
is

Prompt Wire Service
FOR BROKERS AND DEALERS
To
LOS ANGELES

*

Western

SPOKANE

•

Markets

in

DENVER

•

technology, the field of engineer¬

SALT LAKE CITY

these

fields

Members
and

50
Tel.:

BROADWAY

WHitehall

3-6700




New

other

York

kind.
to

1915

Stock Exchange

Principal

NEW

YORK

be

science

Exchanges

5,

N.

Teletype

Y.
NY

1-1856

American

is known to have

match numbers in

ESTABLISHED

result

It

of

will

increase

more

some

capacity

as

being

these

controls, the speed of them
toughness of them. If so,
don't let that cause you to waver

and

the

brought into operation. That in¬
crease will not be great during the
in your support of the men who
12 months.
The level of produc¬ are
heading up this very impor¬
superiority.
The genius of free tion will not decline because of
tant job. We are going to come to
enterprise and of the American
any lack of demand.
It conceiv¬ grips with these organization steps
business system has been that we
ably could decline if there were very much quicker than we ever
could do more abstract science,
to be a strike in the coal industry have done in
previous emergen¬
more
research in the laboratory,
or in the steel industry itself.
But cies of this kind.
come up
with superior engineer¬ for no other conceivable reason
I think there may be a longer
ing
and
at the critical points would the level of steel
production
period of time before we fully
swing it all into quantity output.
decline seriously.
come to grips with controls in the
Against that element of superi¬
The national income in terms of field of labor.
Nobody knows ex¬
ority of American business the constant
purchasing power of the actly what will occur in the bitu¬
potential enemy has manpower dollar will remain
steady through minous coal industry this spring.
without limit, the hordes of Asia
the year. The national income is
Nobody knows yet just what to do
and of Russia, potential cannona
dollar series and therefore is with these escalator
clauses, the
fodder.
The United States could
affected by a change in prices. If automatic
cost-of-living formulae
never
hope to be prepared to
prices rise during the year, the used in numerous wage contracts
In

ness

I. A. HOGLE & CO.

months.
a

ing.

Our

hope

able

to

a

busi¬

qualities of

contest of that

in the future
match

nominal dollars of national income

is will increase.

superior

deflate

the

But if you were to
national

income

for

these

days.

where

we're

I cannot
see
just
coming out on that.

But I think the treatment of those

change in the price level, that matters will be fairly constructive
deflated national income figure from the standpoint of getting on
*An address by Dr. Edie at the Peo¬
with the battle of production. And
ples First National Bank & Trust Com¬ would remain practcally constant
pany, 24th Economic Meeting, Pittsburgh,
Continued on page 24
throughout the 12 months of 1951.
against superior numbers.

Pa., Jan. 4,

1951.

any

Continued

Galen

How Britain Resists Inflation

Of Towmotor

Einzig, in commenting on Britain's rearmament efforts and
its resulting shortage of civilian goods, finds there is no escape
from higher taxes in order to fight inflation. Takes note of
increase in British
in of

public's purchasing

power

ment drive bears

in

upon

considerably.

United

will

It

States,

easily

it

goods

through cashing

been elec ed

dent

all peacetime
economic situation

beats

the

While

retail

in

the

consumers'

choice

absence of most kinds
In

that

such

it

is

to

com¬

pany's

man¬

Mr.

as

the

present

volume

of
an

tinued

he

by

feared

in

Miller

has

Galen Miller

held

in¬

an

tion with the investment firm for

than

Einzig

30

in

wealthier classes

larger.
It

were

and in New

circles

here

York, having been

ac¬

been

using

up

suggested

consumers

resulted

is

in

to spend,

a

Co.

and

member

a

and

Club

that

process of disinvestment is
wide variety of goods, which
and that as soon as rearmament has
a

the

mouth disease is bound

to

irresponsible suggestion was. made recently that the an¬
problem is a freezing of capital resources. Such an
idea could not conceivably be
entertained, however, by the Gov¬

ered

seriously would cause a
slump on the Stock Exchange.

flight

of

deposits

and

sented

"

The

the

liquid

capital

available

resources

difficulty is that, in order to be able

the

will

be

pre¬
election of

annual

of

Board

and

Governors

will

be:

E. Snyder, Jr., George
Snyder & Co., President.

Leek, Bioren & Co.; Edwara Starr,
Jr., Drexel & Co.; George W. Elkins, Jr., Elkins, Morris & Co.;
Herbert

T.

Greenwood,

Greenwood

Co.;

for

to raise

Harry

more

is if the prices of

primary

or

Unfortunately this could not be done without causing some
increase of interest rates. It is
true, there is a maximum limit to
individual holdings of
Savings Certificates, so that if their yield is
raised the extent to which
money could be switched over from
other forms of investments would be
limited. But an increase of
interest rates on Post Office
savings deposits might compel the
banks to raise their time
deposit rates in order to prevent a drain
on th£ir
deposits. Even so, the effect of the increase of
interest
rates for the benefit of small
savings on the general level of in¬
terest rates would be

relatively moderate.
' •
:
Any new Government borrowing would not be
to higher taxation. There is
indeed
.

every

the Government is determined to
maintain

is Mr. Gaitskell, the

rely

on

and

new

to

.

•

-

alternative

believe that

balanced Budget.

Nor

revenue

Although the

through higher prices

rate

of

productivity has

increased substantially
during the last two years it could not be
relied upon to continue, to, increase
at the same, rate.
raw

is

Scarcity of

materials is expected to check this
increase in 1951.

no

escape

from introducing




new

So there

taxes in order fight inflation.

of

items

of

a

able

are

The

reserve

in¬

recent

requirements

sell

to

to

the

reserve

banks sufficient amounts of short-

result

may

Durable

Goods:

loans,

but

on

no

inventory

some

general

condition

of this sort is to be expected.
In¬
terest rates are
apt to continue

firm and without much
Outlook

for

Earnings
and

change.

Corporate Earnings
rose

more

ing starts, furniture sales will be
off

slightly.

Taken altogether the
production
of
consumers'

total

will be down

below

the

1950

dence

this

will

the

duced

level

with

con¬

10% to 15%

$38

After
in

estimated

are

already in use. Because
about
progressive decline in hous¬

to

billion

allowance

1950

have

before

for

less

or

year

been
taxes.

retroactivity

part of the taxes just enacted,
were about $21.5 billion after

they

taxes,
of

20%

some

above

the

level

1949.

For

the year 1951 both indus¬
By coinci¬
trial production and
personal in¬
probably be just
that can be pro¬ come will be higher than in 1950

level.

the

materials

avail¬

and

corporate profits before taxes
forecast a.t $45 billion.
This

are

able.

Capital Goods:

Still dominating

the total economy, as it has for the
last year, is the very high level of

at least 25% greater than the total
production of these goods in 1950.
Development
of
t h e* required

standby

plant

war

will

keep

or¬

ders for tools and

is

about

the

current

annual

rate.

Profits would be forecast at high¬
levels except for the probabil¬

er

ities
not

that
be

as

inventory
high

profits

Will

$22.5 billion in 1951.
The earnings forecasts are based
on
the assumptions that we Will

not become involved in
war

and that defense

high

production forward into 1952
1951 level.>

i

Construction:: The

total

of

all

,,

about

carry

at the

as

resistance

consumer

equipment at a
during
level through the year and

calendar

amount

to

1951
than

more

an

all-out

expenditures
will

20%

not

of the

gross national product. In
general,
it will not be
possible to collect

construction

will be up
dollars and units in 1951.

Industrial

gives

Grubbs, Scott Merge

us

a

which

Production:

This

rising pattern for the

Reserve

Board

Industrial Production.

National

PHILADELPHIA,

Income:

Index

" V ~

of

;

Personal

.

in¬

that

those

industries

have

good chances of in¬
creasing their earnings after taxes
in 1951 include
cement, coal, cop¬
per, lead and

roads,

zinc, petroleum, rail¬
equipment, steel

railroad

and woolen goods.

Pa.
Jenks,
come, now standing at $230 billion,
Co., 1421 Chestnut
The Year-End
annual rate, will rise by 10% to
Street, members of the New York
If
we
are ^fortunate
we
shall
by the end of the year.
and Philadelphia-Baltimore Stock 15%
gain in wisdom through the year.
Exchanges, will on Feb. 8 absorb Disposable income available for
We
should come to its end with
the investment firm of Grubbs, purchases will not rise quite so
because
of
Scott & Co.
increasing greater confidence and
The firm name will rapidly
unity than
taxes.
be changed to
Jenks, Kirkland &
we
have now.
We should have
Manpower:. Servicing the levels
Grubbs, and Merton M. Grubbs
a
standby* warplant in being and
and
Wilson "Scott
will
become of production as forecast we

Kirkland

—

&

may

.

the knowledge of how that
expect' a rise in employment to
plant
partners,
V,
*
/ The
firm
will', continue
the about 63 million toward the end shall be extended. We should have
of
the
year.
The defense forces repaired some of our
Pittsburgh offices of Grubbs, Scott
past blund¬
will probably at that time number
& Co. in the Union Trust
Building.
ers
and
lessened the danger of
3.5 million, making a total in the

McLaughlin, Reuss Adds
McLaughlin,
Wall

Street,

%

Reuss & Co..
1
New ; York
City,

members of the New York Stock

Exchange,

announce

that

Joseph

H. Gassoun has become associated

with

the

firm

representative.

as

Mr.

a

registered

Gassoun

was

formerly with Samuel Brothers.

working force and the military of
66.5 million.
To accomplish this,
a

substantial

be

must

tion

of

(Special to The Financial Chronicle)

NEW

women

indus¬

with substantial reten¬

older

workers

normally

been-

?

recognized

staff

of

Howard. Weil,

1.7%

sult of the

nia

Building.

strength

ace

half

that

has

century.

been

building for

a

V

E. F. Hutton Office
SCOTTSDALE,

Ariz.

—

E.

F.

and

be

in November.
scare

of

the

As

dale

a

re¬

than

extension

in

of

November.
controls

Road.

William

voluntary associated with the

La- JP.e.cemteL £f 2.44%\ a 50% greater

bouisse, Friedrichs & Co., Hiber- rise

Our industrial

probably Hutton & Company have
opened a
acknowledged by branch office
at 220 South Scottscontrollers.
Wholesale prices
will

ORLEANS, La.—James A. price * control
upon
manufacture
Anderson, III, has been added tto and distribution, we had a rise in
the

ones.

is great; used
properly it will give
us the force to
fend off the men¬

Prices: The effect of the volun¬

tary price freeze of Dec. 1 has not

rose
j

of

new

ready for retirement.

the

Wtyh Howard Weil Co.
»

number

reintroduced into

try along

never

Chancellor of the
Exchequer, likely to

the automatic increase of

higher productivity.

a

reason

'

-

an

Supply:

in

ies, income, price, and the number steadily throughout the

Federal

secondary

driven high as a result of the
withdrawals of small
savings. The Government may find it well worth while to
prevent
this by means of raising interest rates on
small savings.

non¬

level which take into account pop¬
ulation or the number of famil¬

Mac-

Phillips, S. K. Phillips & Co.;

Jenks, Kirkland and

£35 million

are

Money
crease

appears

per annum to the amount of invisible
imports.
Nevertheless, it'is essential to stop the withdr awals of small
savings. It is this rather than the disinvestment of large fortunes
that matters from the point of view of
avoiding inflation. For the
small savings that are withdrawn are
spent mostly on necessities,
or at any rate on
goods required by the masses, while large for¬
tunes disinvested are spent
largely on luxuries. It matters little,
if the value of high-class
goods is driven up by such- demand. -

necessities

the total

consumers'

stantially higher.

suggestions, however, because any increase of the rate
borrowing would increase the cost of the large floatr
ing debt and of the funding of maturing loans. .Moreover, since
practically all of the £31/2 billion of sterling balances owned
by
overseas holders is kept in some kind of British
Government loan,
an
increase of interest rates
by 1% would mean an addition of
new

What matters much

income available

consumer

for

enough taxes to balance the budg¬
both in et for the calendar
year
as
a
Housing whole.
New taxes, of whatever
starts will be down about 25%,
William
DeH.
Townsend,
Denature,
Will
cause
profound
house completions by only about
Haven
&
Townsend, Crouter &
changes in the profits after taxes
10% because a good many starts in of
Bodine.
individual
industries.
These
1950 will be completed in
1951. forecasts of
On or about March 15, the Ex¬
earnings must there¬
But industrial construction and
fore be regarded as tentative.
change will move to ils new quar¬
ters at Broad and Walnut Streets. public construction will be sub¬
It
K.

resist their

some

of

lines, notably, automobiles
refrigerators.
This
is
that

T.

H.

Donald, E. W. Clark & Co.; Samuel

Treasury by a large number of economists who still believe in the
all-curing effect of high interest rates. The Treasury is likely to
on

gov¬
ernmental dicta and the continued

have very little deflationary
prospective level
availability of mer¬ effect because the member banks

may expect

we

capital goods orders and the con¬
sequently rising rate of production
It

Board of Governors: J. Raymond

large amounts, it would be necessary for the Government to raise
the general level of interest rates.
This has been urged upon the

paid

recurrent

buying,

scare

will

Stock

George
E.

not

reducing

at

of

pressure

war

currently and
to
higher
in this segment. We estimate that
will be the first time in three
prices
is apt to develop. Earnings
the
production of capital goods
years, that' a "no contest" election
after taxes now in effect will be
has been scheduled. The officers during the whole of 1951 will be

for the purpose of financing a Budgetary
deficit—to do so would be to try to finance World War III
with
the aid of the discredited method of World
War I—but for the

of

nominees

Exchange to be held March 5.

It has also been suggested that the excessive purchasing
power
should be mopped up by means of Government
borrowing. This

disinvestment.

On

of

about

the Philadelphia-Baltimore

...

done,

of

the

rise of

made

Country durable goods acceptable to

PHILADELPHIA, Pa.—A single

general

a

ber

sumers

slate

ernment, for any attempt would produce disastrous results. There
would be a slump in the market for Government
loans, and the
Treasury would have to pay very high interest on any new issues.
The mere suspicion that some such
suggestion might be consid¬

purpose

•

Receives Slale

And in any

cease.-

the

be

Mayfield

of

Union

the

a

The

should

of

PMIa.-Ball. Exch.

may take a very long time before that stage is reached,
and when it is reached the continued desire of consumers to
spend
out of capital resources will continue to exert
inflationary pres¬
sure on the diminished volume of
goods.

to

Treas¬

this

it

swer

also

and

there will

cattle the foot and
case

the

Club.

scarcity of goods this spending pressure will cease
be no opportunity for spending.
To say that
is, however, like saying that with the death of the last head of

because

of

urers' Club and the Bond Club

the extent to which the
their capital was probably much

largely due to the availability of
tempts

for many corporations. He
director of the S. K. Wellman

grams

■'Y'

-

has

been

be¬

the

Consumers'

he is widely and

years

financial

Cleveland,

million,

have

year

than for the year 1950.

and will also retain

known

With

consumer

low
goods, including apparel, term
coupon
government
drugs and foodstuffs, will be at a bonds to satisfy the new reserve
level
about 3%
higher in units requirements.
Slight pressure

some

more

Paul

process of de¬

durable

amounted

£100

of

production

tive in working out financing pro¬

over

basis

of income and

surplus of revenue. For the effect of theadditional taxation might
easily be offset by the wholesale with¬
drawals of small savings and by other forms of disinvestment.
Already during 1950 rich and poor were living largely on capital,
big and small. The total of the withdrawals of small savings
to

a

Hayden, Miller & Co. as Here we are
approaching the op¬
partner.
Through his associa¬ timum
ownership level in a num¬

a

purchasing power,
inflationary buying

con¬

succeeding six months.

chandise,

treasurer-

long

of

course

that would

the

the

expects

terest in

substantial

a

the

up

of

purchase,
we
may
expect
goods presented during prices to rise rather steadily from
are largely taken out of May or June forward.

the
the

the surge

sales

director

years,

Dr.

speed

course,

terioration

These iron themselves

war.

in

out

Towmotor,"
which position

To prevent this, it would not be suf¬
to
balance the Budget,
or
even
to

ficient

probability

to whether the
is good or bad—whether

consumer

cause

of

pressure.

achieve

a

and

additional purchasing power created
through rearmament, or even the maintenance
of

of

1951:

relationship

the

will continue

any

might easily result in

forecast

war news

future.

for
be

rect

Tow-

the

near

of goods.

circumstances

of

agement in the

stores

limited

was

a

i-

r e s

„

during
the last two or three years, some lines of goods
made of base metals are already scarce, and it
does not require a very lively imagination to
visualize a return of the conditions prevailing
during the war and the early postwar period
the

the

for the year

become active

'

have been crammed with manufactures

when

tutes

motor and will

material shortage.
to be in short

raw

later.

or

Vice-P

rearma¬

expected

are

sooner

further

accentuate

shortage and

manpower

Civilian

.supply

the

13

page

quality and selec¬
partner in the investment firm of
Non-Durable Consumer Goods: tion of the high profit lines, with
hayden, Mil¬
From
time
to
time
disappearance from the markets of
consumer
ler & Co., lias
surges of demand will arise in di¬ all low margin lines.

comparison with the spectacular increase de¬

no

It is bound to affect Britain's general

records.

Lester M. Sears of Towmotor Corp.
has announced that Galen Miller,

savings and through disinvestment.

LONDON, Eng.—Although the increase of the British

.Thursday, February 1, 1951

What lo Expect in 19S1

CLEVELAND, Ohio—President

Dr.

from

v,p-

By PAUL EINZIG

cided

The Commercial and Financial Chronicle

*t.-

(536)

Further

will,

E.

new

Kidd
office.

John A. Bange
John Aloysius
Bange, associ
with Hardy &

Co., of New Y
of died Jan. 28 at the
age of 61.

is

Number 4982

Volume 173

.

.

.

The Commercial and

(537)'

Finar^ial Chronicle

planning is almost im¬

industrial

Stock Market Action Indicates

Canadian Securities

No

.

Canadian oil boom
continues,
the
spectacular
the

While
still

possibilities of the Dominion's re¬
of iron

sources

ore

Unlike the situation with

ground.

to oil reserves,

regard

tend to

now

publicity into the back¬

thrust oil

the U. S.

for domestic
ore
supplies gives rise to
complacency. The foresee¬
exhaustion of the fabulous
outlook

long-term
iron

little

able

Needless to add
the greater competition which will
be provided by the rejuvenated
steel industries of New England
and New Jersey will provoke in¬
creased support on the part of the

deposits has directed at¬
S. steel interests to
external sources of supply. Possi¬
bilities
as
far
afield
as
South
America and Africa have not been

dividends
the

From

be

1951 will

with boom characteristics.

one

There will be

a

iron

of

ore

in

serves

Allard

Ungava,

money

after
able

foresee¬
taxes.

re¬

Lake

which

U.

all

located

are

border

S.

the

to

Coast.

The Steep Rock mines of Ontario
rival to are already in active production
estimates
of
potential
re¬
Mesabi, the Ungava deposits of and
Quebec-Labrador are already ap¬ serves have been recently revised
proaching the stage of active de¬ sharply upwards. Bethlehem Steel,
velopment. This almost limitless Inland Steel, Youngstown Sheet &
source
of supply is
now
being Tube, and Interlake Iron Corp., in
seriously considered as the basis conjunction with the Steel Com¬

base
in

should

a

to

have

greatest potential

all

of a revital¬

and

ing

program

is of

ing all they produce.
The oils and utilities will prob¬

sible
A.

the

with

course

Charles

conversion problems

those

respon¬

for

one

Taggart

with

ably experience larger gross rev¬
enues with net income after taxes

pany

England steel industry.

New

ized

ing

Ungava deposits.

as

the principal market
Labrador iron ore is likely to

However,
for

greatest consuming area in

be the

the

the

world,

U.

Midwest.

S.

Whereas a few years ago

this was

result

a

from
ore
on

offers

firm

recent

of

Japan for the purchase of
from the extensive deposits
.

C

Vancouver Island, t

Thus

in

nadian

wake

the

the

of

Ca¬

Inventories

machine

The

tool

business will

a remote possibility, the de¬ yet only in the initial stages, the be faced by no conversion prob¬
pletion of the Mesabi deposits, and Dominion's economy is now fur¬ lems and should stand high on
the probability of the construction ther fortified by spectacular de¬
priority lists.
Its chief problem
of the St. Lawrence Seaway, vi¬ velopments in the equally impor¬ will probably stem from the ex¬
tant
field
of iron
ore.
As the
tally changes the situation. This
capital involved in developing an
latter project which has long been iron
ore
property is
so
much
advocated on both sides of the greater than in the case of an oil¬

is

border

now

Government
tion

and the Administra¬

New

of

State

York

strongly in its favor, and
ency

is

the field, it

approaching

consummation. The U. S.

reached

in better supply but

were

keenly felt in Canadian price changes

so

circles, that it is anticipated

that
■"

internals
in

Business

will be, conserved for mili¬
tary production, the problem of
evening out the stocks is a big one
and may take a long time.
The
search for substitutes goes on, but
most
acceptable substitutes also
turn out to be critical materials.

were

negligible. The

quiet demand and the corporate

arbitrage rate was also firmer at

The Canadian dollar

61/2%-51/2%.

CANADIAN BONDS
Government

showed
tion

variation

little

Municipal

were

quota¬

steady

Stocks

selling.

and new

generally strong
Provincial

in

apparently

despite

commercial

by the

registered

were

peaks

industri¬

als, base metals, and Western oils.

CANADA
SECURITIES

Arms
Di¬

I

n

d

u s

Inc.,

Olin

t ries,

New
Con¬

Jan¬

A. E. Ames & Co.

any

industrial, mining or
consult us.

security,
We

can

help

you.

Street

New York 5,

•jMlilner,

oss

NY 1-1045

4-2400

&

Co.

Members:

N. Y.

The Toronto Stock
WORTH

The Investment

Exchange

Dealers, Association

Boston 0,

Street

Mass.




330 Bay
Hamilton

St. Toronto, Canada
Brantford
Windaor
Brampton

Sudbury

several regions on common

The migration from

labor supply.

non-essential

essential

to

war

is noticeable.

work

Policy

Buying
As other

trial

major factors of indus¬
are

confused, buy¬

is also

confused. The
is controlled

planning

ing policy

range

and'
limi¬
tations, which are expected to
multiply rapidly.
Many vendors
availability of goods

the

the production and end-use

are

unable to make firm delivery

schedules

the

of

because

uncer¬

tainty of future military demands.
A

much

ment

clearer

a

be

of Govern¬

view

requirements

before

will

definite

is necessary
buying policy

possible.

the

Ang. Exchange

Robert

C.

Swanton

sion, a condition they expect will
become worse, and will continue
a

definite

procedure

is es¬

tablished for the allocation of ma¬
terials

and

facilities

for

defense

permissible civilian purposes.

This

broad range
the re¬

proves

Inventories of pur¬
materials remain at the

controllers.

W.

chased

was

and

confu¬

trial

and

of Canada
Fifty Congress

general indus¬

until

incorporated
Two Wall

a

items.

low

has been
month
of

uary

oil

There is some re¬

are scarce.
111

of
the
Los
Angeles Stock Ex¬
change at the institution's annual
quested freeze is ignored or the organizational
meeting
of
the
profit position of many producers board on Monday, Jan. 22, 1951, it
has been lower than the maxi¬ was revealed
by Board Chairman
mum
allowed by the base period
Phelps Witter.
measurement
set
by the price
Reelected * as
President
was

of

Re¬

of

necticut,

quotations

or

lief

July and August bulge,

have inched up over a

Win¬

chases,
chester

Haven,

SERVICE

help

Officers

vision

on

be

,

this is much lower than

with some

layoffs due to material shortages
and conversion to defense produc¬
tion.
Skilled workers and office

when 68%
Los
and 80% reported such increases.
prise the National Association of
Production, facing curtailment
Purchasing Agents' Business Sur¬
Elects
by scarcities and limitations on
vey
Commit¬
the use of raw materials, is hold¬
tee,
whose
LOS
ANGELES,
Calif. — Mcing at a high level and even in¬
Chairman is
Clarty Harbison, senior partner of
creasing
the
output
of
finished
Robert
C.
the investment firm of Harbison
goods as work-in-process is run &
Swanton, Di¬
Henderson, was elected Viceout
to
beat
the
deadline.
Prices
rector of Pur¬
Chairman of the Governing Board
purchasing agents who com¬

Company,

For information

of draft and enlistment,

by

ever,

high level,

a

though 11% report lower payrolls
this month. Causes are the impact

Survey Committee of the

According to a composite opin¬
ion of

peating

Corporation

CANADIAN STOCKS

Employment

Employment is at

commitment

the other hand were

on

which

materials

in

dominantly

National Association of
Purchasing Agents, headed by Robert C. Swanton, says un¬
settled condition will continue until procedure for materials
allocation becomes definite.
Finds current inventories low.

border.

material

are, or

Purchasing Agents Report Confusion in Buying,
With Production at High Level

week external Do¬

During the
minions

major war this year.

reported un¬

unworked

stocks. As these shortages are pre¬

S.

U.

the

of

not yet been
investment

has

peak

flow north of the

are

its urg¬

be readily foreseen

can

the

that

no

for

At no

needs.

so many

in

balance

should
be
main¬
tained. In the meantime, the stock
market seems to be saying in no
uncertain terms that there will

low

too

time since the immediate postwar

period have

which

dends

production

current

mate¬

industrial

of

continue .much

rials

could
break
all records.
in many industries such as ings
automobile, household appliances Earnings after taxes, regular cor¬
and excess profits, are
and television receivers: This last porate
named would' include radio sets likely to be somewhat lower than
in
1950
but still above 1950 divi¬
and record players.

only

stage of

their
that al¬
formula.
out that

found

have

boosts

position is below
by the 1946-49
Purchasing Agents point
mandatory price controls
lowed

lems

discoveries that are as

oil

price

a

part of recent material and

or

wage

,

from the

establish

to

scurry

profit
no

being able to
of Canada are now negotiat¬
make
such a higher in the case of the former.
with Steep Rock Iron Mines
definite prediction with regard to The utilities will probably have
The promoters of this project are for an option to lease properties
industrial activity. Should Joseph lower earnings after taxes. Such
In Western Ontario,
also looking into the possibilities in this area.
Stalin
suddenly appear with a lower earnings as the utilities
besides
the
400
million
tons
of
of other potential sources of sup¬
halo surmounting his head and a may experience will not, in my
siderite
and
magnetite deposits of
ply in the Maritime Provinces and
dove in his hand, I doubt if the opinion, bring about si reduction
Newfoundland.
It
is.* reported Michipoceten, the Goulais mag¬
in dividends as generally speak¬
program would be altered to any
netite
beds
near
Sault
Ste.
Marie
that a mill will be constructed by
ing the current rates are con¬
great extent.
are estimated at 150 million tons.
a new company, the New England
A
fundamental concept to be servative. The switch from util¬
Steel Development Corporation, in There are many other known de¬
kept in mind is that periods of ities to war stocks, aggravated by
connection with which financing posits that are also in course of
tax
selling
in
December, has
price control are often periods of
exploration
and
development
and
negotiations with the RFC are al¬
firm or rising security prices. The brought about market prices for
ready under way. It has also been it is now realized that the previ¬
some utility stocks that will ap¬
reason for this presumably is that
announced that the National Steel ously rich but now depleted iron
the conditions which create the pear cheap later this year.
Co., one of the five U. S. steel ranges of this country are for the
By way of summary I would
demand for price controls are also
companies engaged in the promo¬ most part duplicated across the
conditions which are usually fa- say that a higher rate of indus¬
On
the
West
tion of Labrador iron, intends to Canadian border.
forable
to
sustained
or
rising trial activity than that of 1950 in¬
build a new steel plant in New Coast
prospecting for iron has
dicates
higher
earnings before
earnings.
Jersey which will obtain its ore now received an additional fillip
There will be conversion prob¬ taxes. I can see where such earn¬
for the establishment

a

prior to all-out controls, and some
to the fact that many manufac¬
turers who have been absorbing

well shel¬

should

from

Some of this is attributed

creases.

report excel¬
a

rollbacks

few

a

price rises.
They are far
outnumbered by the January in¬

position.

textiles

The

at

railroads, there¬

fore, will probably
lent earnings from
tered tax

run

been

is

recent

profits tax as earnings in the
years were not as good as
other industries.

high rate and the

be

have

some

Carloadings

Opinion

and in deal¬
Government there
will tend
The to remove from the market many
money
to would be no renegotiation.
spend
will Defense Department, in a lot of low price-low profit items. Scarce
have to switch cases,
will purchase the same materials and rigid ceilings will
their
desires goods as used by the consuming channel
production into higher
from time to public. The textiles, with no more
price and profit items.
time.
plant capacity than 10 years ago,
Inventories
The defense should have no difficulty in sell-,

the

along

West

will

shortages

land, and the Maritimes, there are
other rich and accessible deposits

lifeline need only ex¬
across the northern border.

In

lines

there

Newfound¬

deposits),

(ilmenite

cess

plethora of spend¬

some

industry's
The

of indus¬

standpoint

trial production the year

able

wealth

enormous

neglected, but it is becoming ever
more evident
that the U. S. steel
tend

after taxes than in 1950, sees, however,
maintained, and a plethora of spendable money.

Canada's

In addition to Eastern

is up in
that volun¬
tary price controls have helped
little in retarding advances. There
movement

price

January.

corporate earnings

project.

Seaway

of U.

the

for

interests

steel

Cleveland

Commodity Prices
The

Philadelphia securities firm, though predicting lower

Head of

proceed

will

absence

its

independently.

Mesabi

tention

cooperation,

S.

U.

seek

to

in

but

Impending Major War

President, Charles A. Taggart & Co., Philadelphia

longer con¬

the Dominion will no
tinue

possible under present conditions.
For most organizations it is a dayto-day adjustment, while keeping
an eye on Washington.

By CHARLES A. TAGGART

By WILLIAM J. McKAY

17"

point reached in December,
reported out of balance.

are

Employment shows a slight drop
from
December, with 11%, the
largest number since last March,
reporting
lower payrolls. Pur¬

chasing

policy

is

largely deter¬

the availability of mate¬
the end-use limitations.
While more and more defense
orders are being issued, they still

mined by
rials

and

G.

Paul,

Thomas

P.

Phelan

reelected Vice-President and

and

Secretary,
merman

(Revel

Treasurer. A.

Vermillion

George E.
Miller &

Zim¬
Co.),

R. Gilbert and Inez

were

both

reelected

Assistant Secretaries.

Midwest Exch. Members
CHICAGO, 111.—The Executive
of the Midwest Stock

Committee

Exchange has elected to member¬
ship: Addison W. Arthurs, Arthurs,
of civil¬ do not bulk large on the produc¬
Lestrange
&
Co.,
Pittsburgh,
ian
items have set, off
another tion lines. Many of them require
substantial "make-ready" time, a Pennsylvania, and Arthur A. No¬
wave of protective buying. Fortylan, Jr., Chicago, 111.
four per cent report increases in period which, in many cases, will
Mr. Nolan will act as a Floor
extend beyond the cutback dates
order bookings this month, com¬
Broker.
for civilian production. Long-term
pared to 31% in December. HowRestrictions

on

the

use

rials for a large number

of mate¬

18

(538)

Since
which

The Commercial and Financial Chronicle

last

week's

various

funding

possibilities in the rail¬
field, a new statement has
been
made
by Illinois Central

Shortly thereafter Louisville &

road

Nashville
the

(the

in

joint refunding 4s and
the

on

June

4X/2S, 1963
redemption
date,

next

1, 1951.

that

because

give

90

It
it

days'

was
was

$3.52

odd

1945 to

rapid

$4.

Some liberalization

improvement

in

the

earnings

and

operating performances ex¬
perienced by the road last year.

to

notice of such call

the time was too short.

from

rate

had been expected in line with

brought out
necessary

its

annually that has
been paid since the stock was split

management. The Executive Com¬
mittee has decided not to call

increased

Simultaneously,

However,

Line

raised

Atlantic

Coast

its

quarterly
rate
further studies will be made of from
$1 (also in effect since 1945)
the possibility of refunding these to
$1.25.
Even this new rate is

Presumably the reference to other
issues would include the unsecured

4%s,

1966

which

ters

have

long

logical first step in

tem

financial

quar¬

considered

the
sys¬

any

refunding operation.

Nashville

for

stock

own

share

each

of

its

outstanding.

In the meantime, also, one other
There are a number of dividend
important railroad has emerged as meetings scheduled for the cur¬

-

possible candidate for refunding.

a

,i

This

would

involve

month

rent

preferred in

a

that may well

good

more

news.

The

are

results

of

a

interested in receiving

that

est

stockholder

is

A colorful, well illustrated

figures from the com¬ report.
panies in which they hold equities
"(2) A one-color, factual report.
and prefer to get them unadorned
"(3) Financial statistics and
with the fancy and elaborate trim¬
mings which have become a trend auditors' letter only."
in recent years in

the publication

Although

of company annual reports.

Preliminary
from

the

figures

recent

reached

resulting

show

survey

stockholders

before

been

questionnaire

the

the

diately
have

a

two-to-one

imme¬

Christmas,

returned

to

being

uled

for

Feb.

20.

A

policy has
by the manage¬

York, Chicago & St. Louis been enunciated
will, within the not too distant ment to the effect that in general
future, offer such a proposal with stockholders may expect dividends

by

a

respect to its 6% cumulative pre¬
which is callable at 110.

equal

ferred

Under

There has been considerable spec*. lation as to whether this would

prospects such

to

about

75%

'present

of

earnings.

rably lower rate than the present til later in the
C% could be secured. ..7" .7,
7

'-Y

A-hese

now

amount to $45 a

share,

and

policy would

industrial

played

•

-

■

•

within

the

arrears

four

next

months at the latest.

five

or

The stock is

stocks
significant

also,

more

the smallest than for the

A

quarterly publication mailed to its

port, 1,787,

13,304

financial

relative

of the

measure

centration

change

stockholders

dividend checks
the

was

with
Dec.

on

is

wide

a

ing

-

difference

the

type

of

annual

as

illustrated,
chock

report

colorful
full

58,

to

with

bination

that

of

matter-of-fact

1.8%,

or

preference,

photographs,
charts and graphs. Others are best
satisfied

54.7%; interested in

or

statistics

auditors'

and

13.3%; indicat¬

preference for various

a

A

com¬

binations of the above three types,

of

they

reports

stockholders.

company

letter only, 436, or

21, 1950,

following item:

"There

their

opinion among stockholders

indicating

and

19,

of

con¬

activity by firms in
and

over-the-counter

of

or

10%

.

ex¬

Partners

Hinckley

Russell

Edward

S.

Adams will act

V.

would

like

to

In

focusing

attention

total

or

68%.

defined

Officials

of

Allegheny Ludlum

important

buck

type

the

of

trend

report

the

to

in

1949

in

this

the

want.

included

herewith

For

that

is

of

distributing its an¬
Results of the stock¬

holder survey to

date indicate, in
opinion of company officials,

the

reason,

that

postcard

a

result

nual report.

the

prepare

decision

buck

to

the

trend

sound.

was

the

was

Adams

of

issues

new

in

counter

only

sales

4%

of

sales

counter

corporate bonds,
over-the-

of

stock,

no

any

type of security.
resales

exchange

three-fourths
for

even

Mr.
A

the'

firms,

Hinck¬

corporate

stock

is

the

total

in

stock

resales

recent

kets

increased

the

occurred

in

greatly from

this
a

Rough estimates
four-fold increase over

a

three

decades

in

the

ratio

to total

stock

The upward movement in

ratio

rise

1920

present.

resales.

the
outstanding at 360,578 shares so
one-quarter for such transactions.1
ley as manager of the stock and
that its redemption, including the
prepared by Irwin Friend for the*
corporate trading department.
Separating preferred and com¬
call premium, would involve
Wharton
School
of
Finance, under mon
$39,- Both were officers of J. S.
stock, it was found that close
Rippel a
663,580.
grant from the Merrill Founda- to one-half of
& Co./ Prior thereto Mr. Adams
preferred stock re¬
tion, and entitled "Activity on the sales but not
The new year has started off was a partner in Adams & Mueller,
quite one-third of
Over-the-Counter Markets,'-' esti-A
common
stock
resales were ef¬
with some good dividend news, a
mates substantial gains in volume
fected
in
the
7 rend that is
over-the-counter

one-third

of corporate

years

of over-the-counter

to

the

the over-the-counter markets, the
relative importance of these mar¬

these

reduced

and

alone,

cases.

point to

of

nearly

former exceeded the latter in 71%

Unit of the Wharton School of Finance of the University of
Pennsylvania reveals over-the-counter securities business grow¬

monograph just published by
University of Pennsylvania,

larger

in

resales

in

over-

were

the

of

stock

sales

Total

sales

3%

and

over-the-counter

the-counter
than

While

over-ther

no

without

were

had

of

better than exchange trading in securities.

over-

amount.

40% of the firms had

to

up

sales.

activity,

the-counter resales exceeded sales

Monograph prepared by Irwin Friend for Securities Research

ing and holding

as

more

of the firms with

Although only about

Topping
The Exchanges in Security Transactions

firms,

exchange

80%

over-the-counter

of

Finds Over-lbe Gounler Market

the

on

activity

study

than

about

For

of

over-the-counter

2,223,
to

corre¬

characteristics of individual firms,
it is interesting to note that for

almost, four-fifths

the company had ever received as

majority of the

a

investors

manager of the

Mr.

resales, while the

sponding proportion of all ex¬
change sales was over 89%. 7 V

total

elaborate

illustrations.

no

type of report

Hinckley.

as

bond department and

two-thirds of the value

ring the plain, factual report and

decided

"This year, officers of the com¬
pany

are

active firms accounted

most

stock

of

is

those wanting financial data only

ports at all.

contained

Formed in Newark

and

markets

for about

no

0.6%.

A com¬
stockholders prefer¬

re¬

ports, and still others indicate that
they do not care for annual re¬

.-'-A,

ihould be able to finish this job of

dividend

of

largest firms.

total of 3,266 holders, or 24.5% of

-

the

sales

much

a

role for

ear.

liquidating

pro¬

stock

common

new-issue

In

most

was

the

corporations
which
listed on any exchange.

not

were

—

.

firms
in

nounced

all

aving been pared by $28.50 last
NEWARK,
N.V J.
Adams* &
With anticipated continued
Hinckley has been formed with
very
high earning power, , and offices at 24 Commerce
Street, to
with currently adequate finances act
as dealers in New
Jersey mu¬
to
be bolstered
by exercise of nicipal issues, public
utility secu¬
lights to common stockholders to
rities, local bank and insurance
buy new stock at $150 a share, it stocks
and
underlying
Public
is the general feeling among rail¬
Service Corporation of New-Jer¬
road analysts that the company
sey issues.
Y;-

Y;

predominance of the

The

smallest

impor¬

as

for the largest

as

pre¬

year.

Adams A

f

conditions

a

<

First, however, it will presum¬
ably be necessary to pay off the
remaining dividend accumulations.;

relatively

preference
for
the
plain, factual annual report over
the report printed in two or more

and, ' accordingly, had the com' •
• ?
•
'2
pariy's annual statement printed
"Allegheny Ludlum in the past
in a single color and used no illus¬
sumably support distributions of has prepared both types of annual
trations
whatsoever. An- indica¬
be done through bond financing at least $3, compared with the re¬ reports.
For instance, the 1948
tion of stockholder reception came
or
sale of a
new
preferred. In cent $2 annual rate. It is possible, report was well illustrated and
from receipt of the greatest num¬
cither case there appears to be however,
the liberalization of colorful, while the report for 1949 ber
of
letters
of commendation
little question but that a consid- dividends may not take place un¬ was printed in a single color and

v

were

firms.

times

three

and

tant

cards

date

firms,

the

are

talk

"(1)

and

has

considerable

each

exchange volume.

by

prefer. Some investors want well-

been

which

upon

stock

the-counter

Allegheny requested to designate his prefer¬
Three choices are given.
Corporation stock¬ ence.

Steel

holders
facts

the

to

conducted

issue, and would mark the awaited with the greatest interest
first
such
operation
that
of
practically in financial circles is
within the memory of man. There Chesapeake & Ohio. This is sched¬
New

.

For the small¬
corporate stock consti¬
tuted the most substantial sector
of their over-the-counter resales,

Ludlum

result

one

stock

.

Replies to Allegheny Ludlum Steel Corporation questionnaire
indicates plain, unadorned, factual annual report is favored
over one printed in colors and illustrated
by graphs and charts.

share of overresales than of

much larger

a

given by the
breakdown of
preferences 'indi¬ proportion of stock resales repre¬
quite conservative in relation to
colors and illustrated with photo¬ cated is as follows:
sented
by the 10% of firms with
Preferring the
earnings,
which
are
estimated
elaborate type of report, 966, or the largest volume of stock resales
graphs, charts and graphs.
around $16 for 1950, and when it
in
each
of the two markets.
In
29.6%
of
stockholders
Tucked away on the back inside
answering;
is
considered
that
Coast
Line
owns
of- the company's regular preferring the plain, factual re¬ the over-the-counter markets, the
one
share of Louisville & page

and other issues later in the year.

most

smallest firms accounted

that the
for

survey

of 1951.

re¬

Thursday, February 1, 1951

.

.

Stockholders Prefer Plain Annual Reports

According

will be forthcoming before the end

in

column

discussed

we

.

represents not

in

absolute

the

over-the-counter

so

much

vilume

resales

as

of
de¬

a

•

•

.

cline

in

sales.

the

volume

Thus

by

.

expected to continue

as

the

year

Accounting Div. of

Chicago,

progresses.

Indianapolis & Louisville started
the

ball

rolling with

paid

£ny of its stocks since the
erty

emerged

•This

was

s'ock

from

on

prop¬

bankruptcy.

$1.25 on-the Class "A"

whicfi

has

Exch. Firms Elects

declaration

of the first dividend to be

preference

as

The

Accounting Division of the

Association
Firms

of

Stock

has -elected

Exchange
following

the

officers:

new

to

if 1.25

;

l

a
year over the "B" stock.
Ibis preferential dividend is cumillative to the extent earned, and

President:

Nathaniel

B.

Her¬

of

over-the-counter

securities:

trading since 1920, and concludes/
that

the

tions

volume

exceeds

trading
changes.

of

the

on-

such

that

of

transac-

•

securities

organized

ex¬

•

markets.

nearly

For

all

stock alone,

common

trading

in

bank

and

insurance shares took place in the
over-the-counter markets, some¬
what

less

(and

communication),

than

half

for

The following is a summary of 17% for industrial shares.* These
findings of the investigation as? three groups combined accounted
reported in the monograph, which for practically the entire over-the-

being published.by the Univer¬ counter resales of common stock.
sity of Pennsylvania Press- at ? a For common stock listed (or ad¬
mitted to unlisted trading priv¬
after payment of this initial dis¬
Vice
President:
Louis
" Y •
Monk, cost of 85 cents>
tribution the "A" stock will still Smith Barney & Co.
In total value oL security trans¬ ileges) on any exchange, the role
have arrears of $3.75 a share. The
Secretary: Warren C. Malpas, actions, the ovef-the-counter mar¬ of Jhe- over-the-counter markets
was comparatively
sharp improvement in the com¬ Cohen, Simonson & Co.
small, account¬
kets are far more important than
Treasurer:
Bernard
pany's operations and
earnings
Coleman, the exchanges. Sales of new is¬ ing for only 8% of the total re¬
man,

Paine,

Webber, Jackson &

Curtis.

,

■.

.

is

•

-

■

s

-

should

continue

in

the

current

Bache & Co.

-

sues

'

leading to the hppe that fur¬
ther payments againSt the arrears

year,
rw

ATLANTA,
Tompkins will

at

all

Times

G a.—Henry
Feb.

8

over-

well

The

as

geographic

and

municipal

transactions

issues, and

in

outstanding

B.

become

The

picture

however,

for

in

quite

different,
outstanding corpo¬

broker-dealer

that

bined

cor¬

ter

is

of

cates

most

porate bonds.

member of the New York Stock

rate stock alone.

-

for

jnco

?•

fo.

be

ZS Broad Street

New York 4, N. Y.

Telephone BOwling Green 9-6400

;

Members Nat'l Assn. Securities Dealers, Inc.




of

all

firm

indi¬

securities

com¬

transactions over-the-coun¬

exceeded

all

those

regions.

ularly

in

true

About one-third

on

This
the

exchanges

was

partic¬

South.

While

for

^

-

-

Wmnini

breakdown

outstanding corporate stock
alone, aggregate exchange trading
Exchange
and
Robinson-Hum¬ of the total resales of corporate
was larger than over-the-counter
phrey & Co. will be formed with stock in 1949 occurred in the
volume, in three regions. — the
over
the
counter
markets;
in
offices
in
the
Rhodes-Haverty other
words, the exchanges 'were South, West Central and Far West
—the
over
the
counter markets
Building, as members of the Ex¬
approximately twice as important
were the more important.
change. Partners in the firm will in this area.
Since transactions
a

Selected Situations

on

as

of such securities.

sales

the

to

markets,

over-the-counter activity by loca¬

To Be NYSE Members

Specialists in

SECURITIES

restricted

virtually all trading in ,outstand-.
ing U. S. Government and State tion

Robinson-Humphrey
RAILROAD

are

the-counter

Mr.

Grady,

Henry

W,"

Alexander
Yearley, IV,
Ragsdale, Roby Robinson,
Henry P. Held, Jr.

Irvin T.
and

Tompkins,

between public or nondealer
tomers

constitute

a

smaller

cus¬

' pro¬

;

-

When broker-dealers

sified by

capital size, it

were

clas¬

was

found

transactions exclude all

dealer-

portion of over-the-counter than
of exchange

activity, the ratio of

over-the-counter

to

total

resales

were
only
one-fourth
of
those in 1920 and one-sixteenth of

dealer

trades

dealer

trades.

and

1929,

stock

one-half of dealer-non-

while

resales

over-the'were

mod¬

erately larger than in 1920, though
still

not

much

one-fifth

over

of

1929.
The

reasons

activity

stock has held

up

why
over-thein
outstanding
better than ex¬

change trading, as well as the fac¬
tors which were responsible for
the

decline in

total

stock

resales,

considered later in this study.
Some of the more important in¬

are

fluences

reflected in the different

movements

be

may

in

the

two. markets

mentioned

here.

It

is

likely that reduced stock activity
resulted

in

transferring

many

transactions from the exchange to
the over-the-counter markets, as
the

latter

are

presumably better

geared to handling inactive issues
transactions

or

with

compared
In

addition,

has
on

had

a

which

securities

more

are

normal

large

demand.

legislation

restrictive

effect

the exchange than on the over-

the-counter

markets.

Changes in

the tax laws which resulted in

ducing

stock

trading

ably also had
the

short-term

particularly
to
the

a

have

re¬

prob¬

greater impact

on

exchange

have

markets,
since
-trading, which
was

affected, is believed
less widespread in

been

over-the-counter

final
1 Public

in

those

counter

counter

only

exchange
exchange

sales

utilities

but

of

1949,

.

for

reason

strength
markets

of

the

may

the

markets.

A

comparative

over-the-counter

have

been

the

im-

Volume 173

Number 4982

.

.

provement in communication fa¬
cilities among the various broker-

there is

dealers

of

handling

such

transac¬

tions, so that a considerable por¬
tion of the competitive advantage
of

exchange trading in this respect
has disappeared.
It

should

be

pointed

that

out

evidence since the end

no

of World War II of a continuation

trend towards in¬
creased importance of the overthe-counter market in outstanding
the

prewar

corporate stock. It is still too early
to judge whether this trend will
ultimately be resumed.

sians removed

from

11

page

Status of Oar Defense in Europe
of

Germany must be discontinued,

and that

they would run their own
and
political
affairs.
It

civil
would

also,

inevitably
drastic

factor

the

to

of the

controls,

which the
of

assurance

defense plan.
vinced

lead
termination or
opinion,

my

revision

economic

the

in

The

sound, workable

They must be
Western

have the will, and the

organize

second

Germans seek is

a

the

that

remaining

capacity, to

successful

a

force.

For

the

ment

must

be

con¬

Powers

defense

Germans, rearma¬
speedily and

done

on. a

large scale, or it will consti¬

tute

merely

and

Mr.
De¬

conditions.
of the State

observing

Clark

Denney

partment, who is director of the
intelligence Division, Berlin Ele¬
ment, HICOG, gave an excellent
report on the political and eco¬
nomic situation.
Captain James
of

Babbitt

T.

Post

Berlin

the

Military

concise summary of
military situation, and Mr.
gave

the

Herbert

a

the

of

Fales

State

De¬

partment,who is in charge of the
ECA program for

helpiul

in

At the

gram.

to

wen

Berlin was most
explaining that pro¬
be

may

because

that

siate

it

outset,

its

of

provocation to the
Russians, and an invitation to na¬
tional
suicide.
The
proposals

history

and

among

German
cities,
an
importance

which

European picture quite beyond its

have

cussed

dis¬

recently

formation

the

for

Ger¬

of

the conditions and

meet

not, in

my

the

to

been

regimental combat teams do

man

not

a

This

opinion, be acceptable

Germans.

sideration

One

there

substantial

other

con¬

mention here.

deserves

that

is

can¬

be

must

military

some

force

or

provided, during the time
rearmament is occurring. Specifi¬
screen

cally,

it

the

means

provision

sufficient

.mechanized

Germany

and

aircraft

sufficient

tactical

theater

that

in

forces
to

deter

attack from Eastern Germany

any
on

in

of

Soviet satellites.

the
be

can

provided,

conditions,
which

the

is

How this

present

under

question

a

Committee

best informed

atvan

early date,

should,

in

military leaders
/

r.

.

During the time I
Legislatures

held

were

Bavaria.

they

in Ger¬

was

local elections for the Land

many,

and

DV;..

.

In

in

in major

resulted

Hesse

instance

each

gains

for

the Socialist party, which opposes
The

re-armament.

results

may

have been due in part to local

involved,

sues

tively small turn-out; but tee
sult

is

unmistakable.

embark

upon

is¬

the /compara¬

and

We

re¬

must

entirely

an

new

for Western Germany,
speedily adopt measures de¬
signed to create conditions under
program

and

which

re-armament

place.
regard

take

can

;•

conclusion
the

that

is

in

this

problems

German re-armament

nized

than

is

the

by

of

generally recog¬
American people.

They present a serious challenge
to your
leadership,
particularly
those
of

officials

State

the

in

the

Department

advising

responsible for

President

of

matters

on

for¬

eign policy, and in implementing
that policy in day-to-day negotia¬
tions with other powers.

We must

have

a
complete new basis, and
entirely new program in Ger¬
many. Most of the changes needed

will

about

come

eventually

any¬

way;

but if they are delayed

shall

get no credit with the Ger¬

man

people,

tion

from

had far
the

them,

and

than
to

our

coopera¬

In view of

j

in which

success

we

we

our

have

in achieving

of

military government
restoring
economic- health
in getting across our ideas

the

urge
for

more

aims

little

and

record to date,

German

people,
too strongly that

a

speedy

cannot

I
we

press

re-orientation

existing program in that
:

tal,

..

■

n

of

area.

v

BERLIN*

importance.
German
regards

only

as

and

of

capi¬

temporary

a

believe,

I

restoration

looks

the

to

unified

a

tional

Ever since

unity.

General

Clay established his headquarters
in that city in 1945, and more par¬

ticularly

the

since

Air

in

Lift

sition in Berlin has been regarded
as

expression of

an

determi¬

our

nation to aid and support the free

peoples
tions

of

Europe.

The

condi¬

prevailing in that city

now

summarized below.

are

.From

the

conferring

26th

with

to

the

(a)

Economic

enjoyed

the

economic

Berlin

—

same

While

has not
of

measure

recovery

Germany.

Western

as

business

activ¬

ity in the Western Zone -is now at
a
level above that prevailing in
1936, the industries of Western
Berlin are operating at only about
40% of that level. In part, this is
due

several




of

either

on

side.

*•

•

The establishment of local Ger¬
labor service units

man

is

in Berlin

interesting development dur*
the last year.
These units,

an

ing

which

tion

the

inflict

permitted
to
city; in part,

sian

the

to

Benin alter the
Potsdam

Russians

from

added

time

have their

in
rebuilding and restoring the fac¬

officers

management and the workers,

tory.
There

is, of course, serious un¬
employment in Berlin—currently
20%

of the available work¬

ing force.

The current improve¬
business,
mentioned

some

in

ment

above, has alleviated this to

degree,

and

relief

some

some

has

ex¬

tended through work relief proj¬
ects

(of

the

Federal

Republic

Berlin

is

from

off

cut

the

and

ECA.,.
No.
permanent
though, can be expected

solution,
long as

arate

with

dent

the

bat

battalions

under

West¬

the

we

regiment

unified

a

U.

S.

While

Zone.

could not withstand

a

could serve as a nu¬
genuine military organ¬

ization. I watched

training

group

of them

their barracks,., and
impressed with their

at

much

was

a

a

this force

major Rus¬

course

ate is

the

currency

in the

business life

city

ground forces of American troops
to Western Europe are the bal¬
rates

standstill,

most

to

yet

entirely
recovered.
How¬
during the past few months

ever,

has

there

drafting

for

military

the

the past
elections

recent

elections

in

Berlin

such trend.

any

did

The

solutions.

They

naturally

the prompt rearmament

Germany

ern

by.

which

as

they

the

sition

and

easy-

favor

restored

to

po¬

genuine

improved by

and

this summer.

United States Senate

Washington, D. C.
Jan.

of

States

_

.

.

In

.

tional

preventative
have

view

my

c

a

is

economy

a strong
the best

the

in

long

na¬
war

subject

was

interrup¬

to

the former

of

achieved

been
of

an

Federal

German

indemnity
Republic

Government).

Investment Service Adds

in

assistance

marked

as

distress
cannot

work of

well

as

staff

I

run.

subscribed to the Ad¬

never

:V

and

consent

have

of
the

United

States

has

joint

a

relations.

The making

with Stalin
Yalta, and Potsdam,

agreements

highly

the

program

This factory, for¬

one

officials by Allied bombing, and the Rus¬

-

I

always

stand

not

and

Sen. J. J. Williams

up

b

e

v

'

*

and the fact that the
European nations which have
counted,
been

the

It

would

friends

recipients of our generosity
the past few years have
volunteered to assist us in
that opinion. I am

hopeful that both political parties

>

"

'

culties

eign

the

•

;

in

our

its

*

countries

is

the

grave

has

become

&

Kidder

M.

He was formerly with Daniel
& Co.

Two With King
(Special to The Financial

Meiritt
Chronicle)

MIAMI, Fla.—Mrs. Peggy Moore
Victor Moore have become
associated with King Merritt &

and

ments

with

(Special to The Financial

the

ap¬

'Even
the

ATLANTA,

C: &
He

with

for¬

result

of

Newell

B,

S. National

Bank Building.

previously

was

with

Courts

& Co.

With Merrill

Lynch Co.

(Special to The Financial

Chronicle)

COLUMBUS, Ga.—Paul A. Mc-

after having traveled
road of Teheran,

Dougal, Jr., has joined the staf»
Merrill Lynch, Pierce, Fenner

disastrous

of

the President

& Beane,

101 Twelfth Street.

of the United States continues to
of

diffi¬

Chronicle)

agree¬

-

-

Yalta and Potsdam,

—

countries for

foreign

now,

Ga.

Murphy, Jr., has become affiliated
with
Norris
&
Hirshberg,
Inc..

by two-thirds vote in
with Constitutional

requirements.

Hirshberg

Joins Norris &

as

insist, despite the plain language

'

country's

relations

to

confront

today

which

Many* .of

effort

an

solution ,to

a

problems
us.

in

in

called

that

mission of all treaties and

accordance

Korea supports

ratification

peasement
of Russia
as
those
secret
agreements • provided has
led
our
country to its present
crisis. It is ^imperative that the
Senate must insist: upon the sub¬

not

roach

A.

ing.

requires.

clear

thus

,is

ratification

be

for

Senate

during

will

Chronicle)

our

the Constitution

lied

a

c

Brown,

last two Presidents has Co., Inc. Both were formerly with
Blair F. ;Claybaugh
& Co., Mr.
the way- for the critical,
Moore
being
manager
of that
situation in which our country is
firm's Miami branch.
now
placed. Those secret agree¬
by

those

o

;

.

paved

down
s

Chronicle)

—

LAUDERDALE, Fla.—John

F. Rice

responsibility

to

officials in charge of

Corp.

affiliates
Co., Ft.
Lauderdale National Bank Build¬

The Senate under the Constitu¬

were

providing

been added to the

of treaties.

chips

(Western
The work

Chronicle)

Investment Service

Haislet

W.

with

with the President in the conduct

buy

friendship.

of the

in the making

Senate
.

world

and

follow

the

unemployment.

too

the

President
to

as provided in the Con¬
stitution, that he seek the advice

tion

scatter

n

the

ments have never been submitted

by

of

(Special to The Financial

that

in that city,
particularly Mr. Herbert Fales.
As
an
example of constructive
economic rehabilitation, I wish to
cite the rebuilding
of the Sidmens-Schukert electrical plant in
merly

Ware have

H.

FT.

the

in the alleviation

due to

praise

our

latter

(Special to The Financial

DENVER, Colo.—Michael Bibin,
Claude L. Chamberlin and Lawton

With A. M. Kidder & Co.

when

fund

Corpora¬

Management

tion, Boston Building.

past he was an officer of
Schlessman, Owen & Co.

feared

pro¬

is

Clark

Hamilton

Raymond W.
Maxwell has
become
associated
with Waddell & Reed, Inc., U. S.
National Bank Building.
In the

condition

in Berlin has been of

of the ECA

credits,

by

Colo. — William R.
now
associated
with

DENVER, Colo.

procedure

at Teheran,

vision

the

failure
United

t;h roughout

leviation

I

the

of Berlin have been the re¬

the Soviet authorities, and
the shortage of credit.
Some al¬

of

Chronicle:

secret

livery

Chronicle)

(Special to The Financial

of Feb. 8.]--

the

Editor, Commercial and Financial

foreign

in the West¬
foreign countries, to

v

.

DENVER,

Republican Senator from Delaware objects to scattering Ameri¬
can dollars to
buy friendship abroad* and scores secret agree¬
ments with foreign powers made without consent of Senate.
Says a new course must be charted.

of

tion by

the

as

of

buyers,

..

With Hamilton Managem't

Strong
Best Defense

American

of

•

23, 1951

Raymond Maxwell Joins
Waddell & Reed, Inc.

dollars

Zone and

WILLIAMS

J.

JOHN

Austria, Franc?„ and Great
Britain,
will
appear
in
the

major obstacles to the econ¬

place orders for goods, where de¬

has

Economy

ministration's

activity;

their

views.

in

"Chronicle"

I am

expressing

citizens

from

of West¬

precarious

and

problems,

these

not

peo¬

only means
be rescued

can

from their present

of

grateful for the large number of
communications I am
receiving

(Special to The Financial

theory that it

luctance
ern

up¬

problems.

all

stable during

While

Senator Williams Holds

if

much
Two

marked

a

business

in

this

been

has not

and

momentous

-

continues, conditions may be

turn

omy

a

new

are

the

EDITOR:

THE

taxes

relatively
year.

city and was repulsed
b.y the stern, and determined op¬
position of the Allied Command¬

TO

Federal in¬
set, the age for
of American youth
service, and many

which

by

come

uation in Western Berlin has been

tions of the

LETTER

debating the many is¬
Wrapped up with
as
to
sending
large

Every effort is being made by
me to reach sound conclusions on

(c) Political—The political sit¬

offensive, it is, I believe, economic health.
capable of dealing with anything,
less magnitude.
The lesson of
; [EDITOR'S NOTE: The con¬
last
cluding portion of Congressman
May, when the Communist
Gavin's
inspired youth movement threat¬
report,
dealing
with
ened to overrun the western por¬
defense and economic Conditions

al¬

came

within

must be charted. The Sen¬
now

other

high quality and evident spirit.

sian

in¬

1948." While Berlin was
kept alive through the Air Lift,

field

ancing of the Federal budget, the

and

cleus of

any

types,

infantry

an

command, which
is ^responsible for the defense of

coinci¬
reform

July,

the

period of time and it is
indisputable fact that they

an

force,

military or¬ indicate

different

of

have

sep¬

blockade

in

divisions

short

a

issue

local

Military—The

(b)

upon
that
isolation of

Russians,

World

the

ganization in Berlin has been sim¬ ple of that city have seen too
plified, and our forces strength¬ much of the Red
Army and suf¬
ened
during the past year.
In fered too much
during and since
place of three or four separate the war to believe in

Another major factor

zones.

during

involved.

are

in
Western
Germany showed a
Zone, and large numbers of
trend toward the Socialist party,
political refugees from behind the
which
opposes
rearmament, the
Iron Curtain come into the city. •

Agreement by the Rus¬
and the later

was, however,
stituted by the

and

sues

so

the

non-commissioned

own

and

ern

were

into two

I

equipped with
only light weapons (carbines and
pistols) for the performance of
guard
duty.
Nevertheless
they
constitute
a
valuable
auxiliary

WPA type) paid for by

a

repudiation of the

of the city

War

to

mination and energy, both of the

Government,

division

World

War II, Western European coun¬
tries placed more than 250 com¬

much greater destruc¬

the

to

western Berlin.

28th

The record discloses that
both

of

of the largest European
November, 1950, I was in Berlin,, manufacturers of heavy electrical
where I had the opportunity of equipment, was largely destroyed
,

particularly Major General
Maxwell D, Taylor, was not lost

ers,

This

po¬

our

avail¬

composed of young Germans, have have more manpower as well as
factory, and its affili¬ been recruited as civilian em¬ productive capacity at this time
ated plant, Siemens-Halske, cur¬ ployees and organized into a para¬ than they did in either one of
rently employ some 18,000-20,000 military unit, with the mission of these two years. You may count
workers
(including a substantial taking over a substantial portion upon me, therefore, to fight to the
number of War casualties) in pro¬ of the guard and security work last ditch and vote against any
ductive enterprise. No doubt the from our combat troops.
In con¬ proposals and appropriations hav¬
current -re-armament
effort
in junction with the unified military ing for their purpose the sending
Western
Europe
has
made - it command mentioned above, such of large ground forces to Europe
easier for this plant to profcure a change will greatly enhance the while its vast manpower sits idly
orders,
but I was greatly im¬ combat efficiency of our forces in on the fence.
pressed with the spirit* 'deter¬ that city. These German elements
It is self-evident that
a
new

being

are

now

1948, trie maintenance of

of the

machinery in 1945. During
my visit to Berlin I went through
this plant, which is now being re¬
built, step by step, partly with
ECA funds. Many sections of the
plant are in operation and others

govern¬

ment in Berlin as a symbol of na¬

broader

are

in scope, and more difficult of so¬

lution,

„average

in

v

general

My

and

The

Bonn

Berlih
the

in

economic

size

upon

judgment, seek the views of

my
our

possesses

preeminence

long

most

able

time.

Continued

19

(539)

The Commercial and Financial Chronicle

.

the

the sole
in

Constitution, that he has
right of unlimited power

committing

American

to Western Europe.

..

-

troops

John H. Goodman
*

John

H.

Goodman,

W. C. Langley &
on

Jan. 20.

partner

in

Co., passed away

" (540)

20

The Commercial and Financial Chronicle

was

appointed to the

posi¬

same

News About Banks
Bankers

and

OFFICERS, ETC.

had

the

served

Pres¬

as

Chemical

Safe

De¬

York

Trust

New

of

pany,

Jan.

an

25

Assistant

York,

the

Montgomery,

Vice-President

as

\

the

at

Foley, formerly Manager
Other

of

appointments

❖

William

bank's Waldorf office, of John C.
office.

ident

that

R.

ings Bank of New York."

H.

of

dency

Switzer, Vice-Pres¬
Bowery
Savings

1943

The

years'

i association

Bowery.

partment.

He

office

an

started

in

boy at the

*

With

New

York

that

Company

announced

of

Jan.

on

24

of its

Municipal Bond Department,

transferred

district
This is

of

to

the

Wall

commercial

Street

banking.

which

functional promotion in
Mr. Duval will be asso¬

ciated

with

a

Robert

Vice-President,
.bank's

in

business

Second

with

investment

Vice-President

charge of the
Department
of

been

in

in

the

in

Municipal Bond
the
Guaranty

Trust.

becomes

The

He

Controller.

Jan.

15

Empire
York

the

annual

the

meeting

stockholders

Trust

Company

approved

The

Bowery gave

was

presented

the

on

of

of

the

New

proposal

of

directors to

officers

with

the

profits to its capital and

declaration

of

stock

a

divi¬

share for each

one

seven

shares

outstanding.
The
plans
approved by the State Bank¬

were

ing Department

Jan.

on

election of

dersen
to

and

Senior

William

R.

Bank

of

of

Commerce

of

Andersen
examiner

Bank

of

of

formerly

was

the

New

Federal

York

Assistant
Avenue
turers

Little,

Fitting

and

Secretary
office

of

Trust

York, has

at

the

the

Company

been

Fifth

Manufac¬
of

promoted

New

to

As¬

sistant

Vice-President and placed
charge of the office at Fourth

m

Avenue and 27th

ing

Philip

H.

Street, succeed¬

Milner,

Vice-President, who
head
don

Assistant

moves

to the

office; and A. Graham
of

the

named

head

office

Assistant

transferred

to

Shel¬

has

been

Secretary

the

Fifth

and

Avenue

office, it was announced on Jan.
25 by Henry C. Von
Elm, Pres¬
ident.

Mr.

Little

Manufacturers
1931
1942
a

to

Trust

for

except

has

the

been

with

Co.

since

period

1946, when he

Sheldon

entered

served

the company in
member
of
Bank

the

1936.

as

service

He is

Credit

a

Asso¬

ciates.
❖

E.

*

Chester

of The Public

Trust

Co.

nounced

Gersten,

President

National

Bank and

of

on

New

York,

Jan. 25 that

Whan

an¬

George R.

'/

/

Jji

*

B.

ft

WANTED

Cardwell

Assistant

125th

Street

FOR

NEW

JERSEY

BANK

immediately.

qualifications.

.

.

.

Broad

Opportunity—

on

&

request. Box F

Financial

Resume

125, Commercial

Chronicle,

25

Place, New York 7, N. Y.




Park

the

of

Cleveland,

count

Union

has

of

stock (par $10).
became effective

amendment

11, and the directors

25

declared

100%

a

stock
to

of

a

presently issued certificate

one-half

of

share

a

of

such

and

,

inexchange

for

a

full share of such

a

at

the

Dunbar

ex¬

Bank, Mr. Cardwell was employed
by the Empire City Savings Bank
in

December, 1941.

the

United

from

February,

for

Under

Marine

1944,

such

resolutions

studied

law

at

John's

Law

and

recently

passed

the

Cardwell will be under the direct
supervision of Arthur A. O'Neill,
Assistant Treasurer,
Manager of
that office.

George C. Johnson, President of
The Dime Savings Bank of
Brook¬

lyn, has
tees

at

announced that the trus¬
a

proved

meeting

the

Jan.

on

payment

19

of

ap¬

future

dividends to depositors on a
quar¬
terly basis. "The Dime" will con¬
tinue to pay dividends from
day
of deposit and will
compound and
credit them
quarterly on the first

day of January, April,

July

and

under

The first dividend credit
this ' new method will be

made

to

ances

of $5

all

depositors with bal¬
or

more
*

on

April 1.

share

a

of

of

the

represented

Feb.

on

this

frac¬

by

his

are suspended ef¬

6,

1951,
'

ft

School

New York State Bar
examination.
At
the
125th
Street
office Mr.

made

until

such

At its

ft

ison, N. J., died

Bank

on

Jan.

73 years of
age.

"Evening

News"

rectors of the Mercantile National
Bank of Chicago elected J. Vin¬
cent
O'Neill, President of the
bank since July
1,

1950; in addi¬

Mad¬

26.

He

Jan.
a

27,

staff

in

corre¬

"Mr.

Servoss
worked
in
the
lumber business several
years be¬
starting as office boy with

fore

the U. S.

New

Mortgage & Trust

York

in

Vice-President

1896.
and

He

Co. in

rose

to

when
the
company merged with the Chem¬
ical Bank & Trust Co. in
1929 he

of

Dallas,

..

9

Florence, President.
cers

were

was"

by

Three

three to Assistant
two

employees

to

Assistant

Officers, and

Bridges

a

York.

and

a century with
City Bank of New

elected

was

Cashier
ident.

to

Trust

to

Trust

Assistant

Vice-Pres¬

R.

Warner

were

promoted

Officers

from

Assistant

Officers. Norval Payne and

James

E.

Magouirk

were

pro¬

promoted to

The
bers

of

the

10

of

seven

of

mem¬

the

Anglo

Bank

announced

was

of

San

on

Jan.

by Allard A. Calkins, President.
office, San Francisco,
B.

Everett

Executive

Vice-Presidents:

and

Horace

past President of

Chapter, American In¬
Banking, and was a

Arthur

C.

K.

Assistant

an

and

Erwin

promoted

ier.

to

A.

Vice-Presi¬
Dankwerth

Assistant

Cash¬

At the

Capital office, Sacra¬
Frank R. Hodgson
and

mento,

Mercantile

Miller, formerly Assistant
Vice-Presidents, were made Vice-

National,

also
at
the
January
elected
John
E.

Presidents. At the Redding
office,
Alfred Thies, previously Assistant

O'Shaughnessy Vice-Chairman
the

Board.

has served
a

Mr.

of

O'Shaughnessy

the bank since

Vice-President from

1918—
1928

Committee;
was

Mr.

Frank

elected

W.

Burkman

Investment

Burkman,

who

John E.

Vice-President and Manager, was
promoted to Vice-President and

Officer.

Elwood
ident

at

its

tions,

Graduate School of Business Ad¬
ministration
of
Harvard
Uni¬

Jan. 24.

versity.
He has been in bank¬
ing since 1923 and has been on
the

Mercantile

Stanley
elected
and

staff

since

1939.

L. Leengran, who was
Assistant
Trust
Officer

Assistant

Mercantile,

Secretary

has

been

in

of

the
trust

J.
the

Schmitt,

as

ment

head

office

correspondent

of

the

*•

the

Peoples

announced

*

of

Jan. 3 declared

on

share

one

each

of

Cor¬
div¬

a

Bank

of

12V2

$2

shares

of

stock.

par

Trans¬

The

divi¬

Transamerica

share.

It

will

paid Jan. 31 to stockholders of
record Jan. 13, in lieu of the
reg¬
ular

semiannual
cents

ings

cash dividend

share.

a

not

are

12%.

of

Transferable

evenly divisible

It is stated

bution

will

that

the

constitute

by

distri¬

another

step in the corporation's program
of reducing
its holdings in the
bank.

The

1937,

started

program

when

Transamerica

added

that

it

will

in

owned

99.97% of the bank's shares.
around

It is

amount

to

788,000

shares, and will
corporation's direct and,

reduce the

interest

in

the

bank

8%.

to

iv,•;

;:;V

ft

"j, *

ft

K. M.

Sedgewick, Assistant Gen¬
eral Manager at the head office oLRoyal

Bank

treal,
ant

has

of

Canada

in

Mon¬

been

appointed Assist¬
Manager in Toronto

General

and will become chief administra¬

tive

officer

of

the

within Ontario.

bank's

affairs

The bank also

an¬

nounced the

appointment of C. B.
Assistant General Man¬

Neapole as
ager, and W.

E. McLaughlin as
Manager of the Montreal Branch.
L.

Mitchell,

has

been

Vice-President,

the

bank's

chief

Ontario,

will

relinquish those duties effec¬

tive

March

main
and

1, next.

with the

bank

He
as

will

re¬

director

a

Vice-President.

a

Ward & Go. Inv. Sees.
Formed in New York
Ward &

Company Investing Se¬
Inc., has been formed

curities,

with offices at 120

Broadway, New
City, to specialize in underwritings, wholesaling and special
York

situations.
firm

Officers

of

the

new

Gilbert

are

Parker, Presi¬
dent; V. M. Kelleher, Vice-Presi¬
dent; C. H, McAuliffe, Secretary;
G.

Parker, Treasurer.

on

Bank

Seattle,

Jan.
H.

directors

17

the

Youell
of

The Twelfth Annual Dinner for

active

and

Stock

Exchange

Approximately

the

addi¬
to

the

bank.

Mr. Youell is President and Treas¬

Quarter

was

200

eligible

employees

cluding

44

Cen¬

held Jan. 25.
of

employees

years

the

244

attended,
who

in¬

com¬

of service during

the past year.

of

Wash.,

retired

tury Employees of the New York

pleted 25

*

National

at

of Thomas

board

rela¬

Green, Jr., President of

Washington,
tion

bank

according to an announce¬
by President
Calkins
on

Joshua

ft

*

be

Vice-Pres¬

Anglo California National Bank,
has been placed in charge of the
bank's foreign department, as well

gradu¬
ated from the
University of Wash¬
ington, is an alumnus of the
was

Branch.

Exchange Group Dinner

Manager.

to

Seattle

Anderson,

dend, at current prices, it is an¬
nounced, is equal to about $2 on

was

member of the Executive Council.
The directors of the

meeting

for

Lee,

previously Assistant Cashier,
named

M.

administrative officer in

National

Francisco

Elmer

Manager of the Dexter

of

america

who

s):

staff

Assistant

North

America National Trust & Savings
Association of San Francisco stock

B.

ft

promotion

California

was

of

idend

Vice-

moted to Assistant Trust Officers.
Thad R. Nesmith was

Mr. O'Neill is

stitute

to

from

Assistant

Robert

J. H.

dent;

a

from

Ferguson, E. B.
Fowler, A. J. Mason, T. G. Smith
and

Vice-President in December, 1949.
New York

E.

Welcome, formerly Assistant
director, Vice-Presidents, were appointed

quarter of
He

one

James

advanced

advanced

were

Louis

National

to

Hays E. Bassett, Gene
and
Nicholas
Roberts

to

Vice-President

poration

indirect

were

Man¬

as

named

the

❖

about

White'

Assistant

Directors of Transamerica

Massey, Leon Rogers and W. Don¬

as

The

Vice-

advanced

Cashier.

been

of

Broad

ald

the Board.
Mr. O'Neill came
the Mercantile in
July of 1949
after

offi¬

to

Vice-Presidents,

were

Assistant Trust

At the head

a

F.

Presidents, five to Trust Officers,

of

named

was

an¬

Fred

promoted

named

receipts will be issued when hold¬

V

National

Texas,

Jan.

on

Chairman

as

The Newark

of

Madison advices by

of

Bank

nounced

:|s

*

First National

S8sv

personnel of the Republic

January meeting the di¬

tion, he

and

50

Promotion of 14 members of the

ft

.

July, 1950, and subsequently as
Henry L. Servoss, President of Vice-Chairman of the
Executive

the

''

r

the

Robert

continues

and

Assistant

each

the
was

Assistant Cashier.

surrender is made."

•

of

share

He has since

St.

be

holder

certificate,

fective

May,

must

of

the

as

tional

1946, after which he resumed his
duties at the bank.

one-half

such

Corps

to

surrender

bank,

He served in

States

r.

Assistant Vice-President

thereon.

ap¬

Officers.

Bachmann,
of
Department,

President.

share heretofore held
by him plus
the stock dividend
today declared

National

were

Trust

common

or before March
20, 1951, and all
rights of the holder of a certificate

Following lour years'

F.

tificate

stock, that is, for a cer¬
representing the one-half

L.

■

on

York.

perience

Department

Assistant

Eugene

common

certificate for

the

Trust

shares of

lation

at

Edgar

Taylor, Jesse M. Bristow, Oliver
Wilkins, Henry J. Mohrman of

the

has

Manager

to

J.

pointed

and

ad¬

at

branch;

been

has

White

appointed

were

Cashiers.

been

Cashier to

Vice-President

Avenue

Branch

Moore, Jr.,

Comptroller's

Jan.

Ed¬

Credit

appointed Assistant Auditor.

stock is required to sur¬
render such certificate for cancel¬

been

Manager

office

Department,

has

Assistant

of the Installment Loan De¬
partment at the main office; M. F.

Credit

Assistant

outstanding 350,000 shares of
stock (par $10) to
700,000

common

'

spondent, stated:

then salary consideration.

of

sucn

was

Available

*

Commerce

William G.

ex¬

ager

Eight
em¬
appointed officers of

were

Peoples

Captain in the Army.

a

from

Cashier

Department, and
George L. Eschbacher, of the Dis¬

Empire City Savings Bank of New

*

ASST. TRUST OFFICER

*

stockholders

Goodfellow

S.

Sours

Loan

promoted

H.

Cashier.

the bank.
the

the

with

as

Assistant

Thomas R. Crone,

of

has

Vice-

than 20 years,

more

served

First

the

Depart¬

common

er

^

^

;■

October.

SITUATION

Vice-President.

for

vanced

promoted
from
Cashier
to
Assistant

Assistant

Assistant

from

an¬

Busch

cept for the war period when he

com¬

the

also

W.

associated

Bank

was

and

of

Green
A.

bank's main office. Mr. Busch has

were

Assistant

ing of its stockholders.

for

*the

Murphy

Mr.
that

up

been

for¬

of

oper¬

President to Vice-President in the

National

Credit

Huvvaldt

Division

Land

"By such resolutions each hold¬

were

from

Major in the Army Signal Corps.

Mr.
of

Vernon

Industrial Bank of Commerce.

Richard

formerly

the

In
the notice to the stockholders Jan.
25 it is stated:

join¬

elected Assistant Treasurers of

16.

Jr.,

of

dividend, payable on Feb. 20
shareholders of record Feb. 6.

senior

A.

of

on

Reserve

before

Stuart

ward

Vice-

ployees

Jan.

on

Consumer

of
Philadelphia at the annual meet¬

Jan.

announced

was

moved

John E. Hauss

Assistant

by Walter E. Kolb, President.
were
Vice-Presidents.
Mr.

Both

the

ment;

*

Directors

Ettling,

Commerce

-

Board

ized

the

G.

Manager
Department,
was

The

the

G.

Mercantile

a

corporation increasing the author¬

Shipway

af¬

He is also Auditor

pany.

Ohio, at their annual meeting on
Jan.
10, adopted a proposed

Eyston L. An¬

Vice-Presidents

Industrial

appointed
James

of

amendment to the Articles of In¬

The

the

elected Auditor of the trust

Mad¬

quarter

Winston

year.,.

Robert

of

to

and

owns

as a

nounces

on

bank's

brother, John
it is the parent

1929;
which

products.

9.

Bast, Vice-Presi¬
charge of the Trust De¬
partment,
were
elected
to
the

Bank

increase the cap-,
ing the Industrial Bank of Com¬
of the company from
$3,500,merce,
and
prior to
that
was
000 to $4,000,000.
As indicated in
associated with several New York
our
issue of Dec. 21,
page 2458,
banks.
Mr.
Shipway was for¬
the
plans
provide
call
for
a
merly Treasurer of the Under¬
transfer
of
$500,000
from
un¬
writers Trust Company
John F.

divided

the

Woodring,

*

silver

a

a

of

•••

H.

of

the

merly Assistant Comptroller,

in

The

ital

dend of

for

luncheon

a

in

Title Bank and Trust Company

Vice-President Jan.

and beginning Feb. 1,

the

or¬

his

division, Diesel Oil Sales
Corporation, retailers of fuel oil

and

board

elected

in

of

A.

the

was

ark "News" said.

dent

He

He

positions

Bank in St. Louis.

and

has

coffee service.

24

their

a

year,

bank

President and Treasurer in charge
of
the
Commercial
Department,

employ of The Bow¬

elected

was

8, this

New York
At

Switzer

Savings Bank since 1919.

ery

of

Mr.

1941.

bank

Warren

E.
Broome, at the Uptown Club on Jan. 30
handling the with Mr. Bay as guest of honor.

banking and brokerage accounts,
On Jan. 30, it was announced that
J. Bradley Green has been made
a

troller

director

a

as

Through the years he re¬
ceived several promotions, becom¬
ing
Vice - President
and
Con¬

Gordon Bisland Duval, Sec¬
Vice-President and Manager

ond

is

Trust

meeting of

century, the advices in the New¬

Bowery

office.

Guaranty

Madison

ft

1908

130

been

ison

The

the

retiring from the New
banking field in 1942.
He

York

ates

Inc., which he

with

company

He was President of the
Missouri Bankers' Association last

after

had

Benson

43

of

of Youell

Youell, in

«

elected Vice-Pres¬

was

11.

Jan.

Mr. Servoss accepted the Presi¬

ft

Ray as Controller of
the bank today, Feb. 1.
Mr. Bay
is retiring from active duty after

Joseph A. Kremar, Assistant Man¬

#

ft

tf

Association, and as filiate, the Mercantile-Commerce
the Empire City Sav¬
National
Bank
in
St.
Louis 'on

trustee of

a

Bank, of New York, will succeed

were

ager
of the Waldorf office and
William H. Mears, Assistant Man¬
ager of the Municipal Bond De¬
•t

the

Assistant Cashier.

an

Jan.
same

State Bankers

Investment
Advisory Division, was appointed

announced

appointment

of

.■>

Curry, formerly Vice-

Company of St. Louis at the

annual

State,

Secretary and
Treasurer of Group 8, New York
N. Baxter Jackson, Chairman of
the Chemical Bank & Trust Com¬

1

ident
and
Comptroller
of
Mercantile-Commerce. Bank

Division of the American Bankers

New

*

President,

Association,
Secretary
of
the
Trust
Company
Association
of

CAPITALIZATIONS

r',

Leslie K.

posit
Co.,
on
the
Executive
Committee of the Trust Company

NEW BRANCHES

REVISED

of

'

Thursday. February 1, 1951 *

.

ganized

1

ident

CONSOLIDATIONS

NEW

Mercantile in 1929.
also

.

urer

tion.
"He

.

Emil

Schram, President of the

Exchange, spoke briefly. William
R.

Lake,

an

employee

Secretary's office, acted
master.

as

in

the

Toast-

Volume 173

Number 4982

.

.

The Commercial and Financial Chronicle

,

it, too.

National Strength Must

Be Based
On Sound Monetary Foundation!
By LELAND REX ROBINSON*

,v

Adjunct Professor of Political Economy, N. Y. University

y

Economists'

Vice-President,

|

Committee

National

-

redeemable

of

There is

no

fear

of

measure

in

appears

personal

the

sacrifices

which

all

America
will

have

to

make

if

tary

impreg-

n

a

mili¬

b i 1 i t y ,
on
in-

and

less

Public

and

should

be

without

loan

peace

into the

serves

not

outlays

as

as

people

a

spending
essentials,

for

defense
A

of our capacities

produce, to earn,
is called

to

to pay taxes and to save,

Our

for.

'

savings, directly and
indirectly
through
institutional
investors, should be ample to pro¬

capital and the longterm
borrowings of productive
They should
private enterprise.
also
cover
the
outright buying
to

holding of government debt

which, from this time forward,

unavoidable,

any

unavoided,

or

life
U.

Americans'

of

insurance
S.

re¬

government
by

more

quarter in five years.

has declined

This

Federal deficits may give rise.

Getting into proper focus these
of growing emergency
have been made immensely more
difficult by the intoxication of
problems

since

nounced

upon

of

State

and

for

turns

surprising that latest figures

end

smallest

the

incorporation
World

of

rate

of

new

the

since

II.

War

its

sacrifices.
In

run, save

share

due

of

labor

necessary

'

short, there

is

adequate*
in a
period
of
inflating prices and
costs. The bell rings for the whole
business community as well as for
the insurance holder, the savings
on an average for each dollar of bank and savings and loan deposisales and this was less than in tor, and for workmen fighting for
storm

1940 or 1930. The general rise in
break-even points, with increasing
production costs and heavier corporate debt, is adding its toll to
mounting taxes in preventing any
natural increase in ratios of profits to ascending dollar gross income. This creates for business a
condition of basic instability in
wmch a constant scramble for increasing volume is the price of
barely holding one s own.
When

shelter

for

no

anyone

retirement pensions.

We face this

infection of the entire economic
organism, through the poisoning
at its source of the dollar, the
people's medium of exchange and
store of value,
To

diagnose
to

case

the

prescribe

ill

the

is

in

thiu

treatment,

The patient fortunately is still in
robust condition.

He is well able

to meet his commitments if only
he can get into his stride.

these corrected corporate

Public and

family budgets must
rigorously controlled. As taxe->
centage of net worth, adjusted for increase they should make less at-

Sources of Our Money Supply

since

profits

expressed

are

a

as

per-

be

tractive all non-essential business
,

tills

expenditures; they should be based
upon earnings realistically calcu-

lated.

and

porations to their owners. When
we turn from these very moderate
in the market places and often inadequate earnings of
loans, discounts and corporations
to
the
dividends
in private securities which
they pay to individual

industry.

Over four-

fifths of the dollars then exerting
their power
out

came

of

investments

by the nation's banks, mostly evi-

been

which

debt

has

times since
eight times
capita terms,

four
than

over

In

per

child in

every man, woman and
the United States owed

on

gov¬

com-

peting for these dollars.
before

Just

Federal,

towering

more

1929.

in

rencies

dencing goods and services

local

and

war

has

stock

no

the

multiplied
1939

Korean

the

us.

yet

as

taken

broke

upon

1731/2

the

of

dollar

Re

the

us

Korean

war

than

50%

more

billion

depreciated

sunnlv

monev

arnso

from

alone

debt

When you and

acquire
set

or

I

.debjt to
television
other of the goods and

home,

a

any

into

go

a car, a

services bought on the

plan,

or

instalment

with the common charge

account, we are presumed to have
assets or earning
power out of
which the debt will be defrayed
within reasonable time.
The ef¬
fects

of

living beyond

our means

As

tighten

we

our

belts

on

per-

stockholders, some startling facts sonal consumption, and cut to the
emerge. The total purchasing proverbial bone all unessential
power of these dividends was al- governmental outlays, the pros-

jeJ^he P6Ct

anrt

J

,

f^Ltfal
sub.st.antial

)h

f

increase

inciease

business

r0?6"5 UJ? ,°£ rftoring and
maintaining balanced budgets —
repaying debt, unless

business the calamity of total

in

war

over-

lifSfVW
our'

States
wMd™*
T
government
bonds
by
Federal pei.sonai income for the people of the full
scope
of
potential
Reserve and other banks.
These the united
States, dividends fell strength. Government obligations
bonas, thus converted into money, from about 7 % of their total
can be lifted frQm th
b
k
^
demands

1949.

ities beyond the reasonable necessities of food, clothing and shelter*
and thus encourage thrift as they
discourage spending,

ununited

purchase

approxi¬
mately $280 in 1929 and $1,900 in put their tremendous push behind
ernmental

vide the risk

and

capita basis, the net

tendency is becoming more pro¬

materials.

and

appraisal

rate threatening

a

power

and

a

But

required

labor

absorb

sober

than

broke

to

enterprise

practice

■

per

securities,

to

private

the

less

to

show

nation of Micawbers.

shares,

fundamentals:

stripped

of

sale

government, to banks
and to insurance companies.
As
breakeven points go up in commerce
and
industry,
as
the
burdens of taxation increase, it is

us a

this

war

down

from

of trade and

purchasing

Getting

further cannot, in the long

liquid assets in the form of cur¬
rency, bank deposits, savings and

cumulating at
On

war.

slipped

They should take the form
of taxes on retail transactions,
pockets, dur- worth during most of the decade well as personal and corporate ining the last quarter-century.
In jus^ Passed, about the same in the come levies and excise charges*.
June,
1926,
for
instance,
the '^s' anc* much less than this in These retail taxes, which may well
money
supply of the American
^Os.
provide for the major part of the
people, less than $51 billion, arose
In the third place, let's consider threatened deficit in 1951-1952,
largely from the peacetime needs payments made by American cor- should be applied on all commod-

dustrial

of

by

needs

preferred stocks be-

and

private

as

loans

liquid

apparently
since last year.

What lies behind the progressavings in the last five years,
sive
sapping of the dollar's replacement value of plant and
however,
is
made
even
more
by equipment, the results are surprisstriking if we deduct from their strength can be illustrated
already
rapidly shrinking pur¬ taking a look at the1 changing ingly low. American corporations'
sources of our
money supply, that rea*
earnings varied between 4
chasing power the load of con¬
9n their economic net
sumer
debt
which
has
been is, all bank deposits and all cur- an<4 6%

strength, is to
change the
nightmare
of

without

the financing of busi-

or

expansion

comes

Liquid

Real

The deterioration of real

to make

promise

of

being seri-

in
the
second
place, the net
earnings
have been profits of American corporations,
greatly
exaggerated
by
inade- after inventory valuation adjustquate replacement allowances and ment and adequate replacement
by the fortuitous inventory profits costs, "make a very modest perwhich
pad income in years of centage on sales.
Last year the
inflated prices and costs.
Risk- equivalent of 5 cents was earned

Assets

built

peace

Leland Rex Robinson

Deterioration

The

complacency.

both

to

answer

these days for

room

or

net and has

our

are

Business

business

either

result,

a

ously undermined.

common

contending problems

currency,

As

liquid assets

ness

of
pending emergency have been made more difficult by rising
costs, prices, etc., in terms of depreciating dollars since gold
standard was scrapped in 1933, finds nation's liquid assets
inadequate and deteriorating. Holds business profits are exag¬
gerated and risk-bearing is becoming a lost art. Urges rigidly
controlled public and family budgets and a move toward fully
convertible gold standard.

Advocate

free

bearing

Monetary Policy

on

21

(541)

and

production

upon

trade; but as ithey represent defitits

Federal spending they add

in

little

the

to

the

market.

contemporary

available

process

services

This

supply of goods and
in

whereby large debts incurred by
government
are
cumulatively
converted into purchasing power
for the people threatens to step
its pace as we move toward a

up

war

medieval

No

economy.

al-

in

come

i929-1930

1936-1937

to

little

and

6%%

that, proportion last year.
Qne

pointing

dividend

smauer

which

profRs
abje

percentage
are

these

of

djsap-

record is the
of
reported

actually avail-

stockholders'

^or

Much

v.

-

for ibis mos^

reason

in

than half

more

payments,

held

by' individual' and institutional savers, thus no longer con-

tinuously
diluting
the
nation'**
money.
We can move resolutely
toward a fully convertible gold
standard which is both a condition
and a by-product of these, timetested policies of national solvency,

reported

padded

Will No Longer Deal in

C0rp0rate earnings, which are not
profits at all because of inadequate replacement charged to expenses, has necessarily been
for ' maintenance
of
plant

q

...

n

*

LP

Securities With rubilC

used

NEWARK, N. J.—J. S. Rippe*
are, of course, to exert upward
chemy ever made great claims of
and founder, owner and President of
pressures on prices and to deflate
producing something out of noth- equipment. Of the remaining earn- J. S. Rippel & Co., who died on
rising prices, costs, and aggre¬ or obliterate our savings.
inSings a goodly part has had to go Dec.
9, 1950,
would
this
gates of national income, savings,
year
Much
more
dangerous things
The struggle for honest money, toward improvement and exten- have
and outgo in terms of depreciat¬
observed his sixtieth anwhen
Uncle
happen,
however,
and for the fiscal and credit poli- sions because of the dearth of new niversary in the securities busiing dollars ever since the redeem¬ Sam lives
beyond his means, as
able gold standard was scrapped
cies
making
it possible,
must equity financing.
ness. Until the end of his career,
he has been doing during all but
enlist
the
militant
in 1933.
These rose-tinted per¬
support
of
t
he was actively and constructivethree of the past 20 years.
Irre¬
business and labor.
The subtle Risk-Bearing Becom ng a Lost
engagedj on a dady basis, in
spectives, these optical illusions
sponsible fiscal policies have
means by which money is robbed
of inflated currency. have given
This brings us to a fourth and both the investment and banking
thrived on the cutting loose of
us
a
false sense of security in
of its purchasing
power throws very
sobering conclusion.
The fields.
the dollar from its
„

gold moorings

certain

directions,

tinuance of their

disastrously

the

potential of

while

causes

still

con¬

a

may

sap

enormous

country.

our

Consider the effects of spiraling

prices
both

ings

in

has

been

of

people,
to the

our

us

as

are

at

highest point of our history.
are the liquid sav¬

banks

note

serve

chasing
and

created

Americans, expressed in
our plunging dollar.
But

the total

since 1945.

when

put

some

10%

The per capita liquid

measured

in

pur¬

power,
have
declined
in the last half-decade.

drop here is about 15%.

In

the
a

years

our

costs

to

some

employment

♦An

was

full

and

pur¬

have been

wages

our

One

is the modern

to the debauchment of

It is like

water

a

into, society's economic
It can continue in¬

bloodstream.

irredeemable

continue

a

in

dollar which is
gold.
It
will

as

long

as

the

Federal Reserve and

cial

banks

umes

be

purchase

commer¬

huge

vol¬

of public debt which should

acquired

by

individual

investors

as

a

and

direct

reflection of the people's savings.
These savings, we have seen,
are

wholly inadequate.

been

having

our

We have

cake and eating

it.

even

or

^nd

with

inadequate
Now

allowances.

.u

debt

Earnings reports

of

replacement

what

»

i

.

,

are

the
.

First, the net pi of its by Ameri-

to tappjng

jnsurance

numbers of Small-scale savers.
the

1920gj excluding

ayerage
Qf ap

new

financing

1948

and

seem

to be

profits

45%

above

country's
topped

in

1929, while our

industrial

1929
1929

capacity
to

Reduced
these
1949 were less

actual purchasing power,

formed

dealjng in securities with,

Weekh

for

American

30%
debt

John Hall Allen, limited partner

in Cohu & Co., will become a

business general partner

corporations was in the form of

production

hv a full 60%
by
a full 60%.

The

of the nations business

command

with its actual

goods

and

services

earnings after taxes

under
f

our

nrosoective

profits

private

closeP1

of Feb. 1^

the

Exchange

Gaines
comes

Co'

&
a

seneral
as

of

partner

Feb

1

in

be-

limited partner
Perkins retired from

Ricnara b. Fei Kins reinea iiom
in

Harris, Upham &

organization

enterprise

related

as

Thomas A. Gaines, member of

Richard S

American

Changes

.

have risen

losing ground currently.

than

hi:.

pubbc

Fr?sent and prospective proms partnership
production,nave risen are the nervous system of business L
Tan
oi

since

economic

on

corporations,

cnn«nimed in
in nroriuction
consumed

to

1929,

more than
st0ck and funded

little

a

allowing for inventory
adjustments and the rising re- proportion.
placement costs of capital goods
prPoPnt and
little

since

The New York Stock Exchange
has announced the following firm
changes: Robert C. MacCorkle,
member of the Exchange, will reIn tire from partnership in Betts,
the Borland & Co. as of Feb. 1.

equity shares. In 1929 this figure
after reached 72%. Last year the figure
valuation was only 15%, one-half the former

business

can

volves

^

SsTSn?ebo0frrnXnfu^ed

inflation

of

combine fortuitous inventory prof-

our money.

continuous injection of

decided

and^nXtrRuteT profits^have New York Stock Exchange

Our financial columns are
glowing statements which

ity.

been

ness

the most dangerous de-

the funds of
companies
and
reflect accounting
fictions often 0^ber institutional investors acting
straying far from economic real- ag
jending intermediaries for great

Process of Monetizing Debt

monetizing debt
printing press route

More and more oui busicorporations, when seeking

in£ UP-

hag

lt

passing to suspend that portion of
^.be company>s activities which in-

of

benefit from

its

This process of

truth is that risk-bearing seems in
the way of Ibecoming virtually a
lost art in the Un ted Stat :.
venture capital is gradually dry-

liberties.

sequences

full

as

by
Dr.
Robinson
at
Luncheon Meeting of the San Francisco
Chamber
of
Commerce, San Francisco,
Calif., Jan. 24, 1951.




and

the other,

of

by the Treasury's failure
balance its budget.

institutional

,

Thus

the one hand,
basic banking

smoke screen disguising the

a

up

weakening effects of soaring
prices and
costs
upon
private
enterprise, the source of our economic strength and the bulwark

compa¬

Prices

high.
address

trust

extent

oc¬

controlled, some goods were ra¬
tioned, many were unavailable,
were

our

Federal
budget is unbalanced, and as long

increase

liquid assets.

were

on

on

definitely with

of the last World

substantial

curred in

and

by

re¬

more

War

to

purchasing

declined

again

chasing
The

current

have

assets,

quasi-cash

Americans,

actual

even

and

cash

of

power,

part

currency.

money

ings

into

in

and

power

reserves

sources

bought

banks, in part by our com¬

mercial

So, it appears,
terms of

$17 ^

nies, and in part it has served
as
backing for our Federal Re¬

part

trend and extent of these savings.

of

from

the

misleading

Prices in the United States
the

risen

central

on

and

debt, which
billion in
1929 to $50 billion in 1939, and to
more than a quarter-trillion now,
has

costs, for
instance,
discouraging liquid sav¬

and
in

The Federal

1933.

in

and our
institutions of de-

New

I

ooner

Branches

INew LooPer bandies

JOPLIN, Mo.—Looper & Comhave opened two new branch
employment, wage and salary pay- offices, one at Fayetteville, Airy,
ments,
our
nation's economic in the Hatchcock Building, and
health, and, therefore, its material the other in Muskogee, Okla
m
strength in peace and war. Exact- the Manhattan Building. Bertheir
ing wage payments based upon G. Gossett is associated with the
misreading of business earnings Muskogee branch.

mocracy>
ure

Upon them in fair meas-

depend initiative, the nation's

pany

22

The Commercial and Financial Chronicle

(542)

know

Continued from first page

the

1941

invest¬

is over,

of

of 1942

results

until

ments

1951

eight instances, therefore, the in¬
vestor could not go wrong;
he
would

investments until 1952 is past, etc.

Foi

in them and thus combine our in¬

stinct to

with

save

desire to

our

be

patriotic. The sayings bonds,
as E bonds, paid the holder
2.9% interest if the buyer held
them to the end of their ten-year
known

bonds paid a
higher rate of interest than any
other type of United States gov¬
maturity.

J

These

quick glance at the history of any
of the world s monetary units will
demonstrate that.
The pound

vestor who chose stocks.

With

of

third

a

But the 1950
back buy only
60% of what the 1940 dollars did.

than it

purchasing power, he
invested $75 (principal) and got
back $60 (principal plus interest).
He actually paid the government
for borrowing
from him.
True,
World War II had to be financed

In

in

1950.

The

cent.

a

In

We

somehow.

with

here

rather
*

however,
but
effect of rising

that,
the

with

not concerned

are

prices on investable funds whose
purchasing power we would like

protect as much as possible.

to

to avoid or at
least minimize this danger of loss

At

borrowed

have

buy property, such as
people who have borrowed on a

money

to

corporations
that
have borrowed by selling bonds.
These property owners and debt¬
mortgage

or

of

15

he

had

the

in

he

gainful

years

for
•

-

-

make

a

reasonably

purchasing

fected ten-year
bond

see

typify bonds

shall

we

widely

10-year

bond type.

of the E

To

Stand¬

use

Standard

use

choice

is

It

bonds the

here

were

in

only

the

that
is

most

21

losing

the

better

the

of

18

evil

lesser

stocks

stocks
and

chose

he

In how many pe¬

of

In

marked.

periods

proceed now with our
period analysis. In how
many
instances was the margin
of
superiority
of
stocks over
bonds, or of bonds over stocks,
very small, say 10%
or less.
In

three

10

year

14

years

it

far

Thus

we

'

.

i

■;

..

have

be

/.

this

fare better because the value

Ci)
y-'r

of the property

that they

own

or

■/■'■

....

'

v

.

.

28%

48.6

84.8

58.0

62.0

106.9

1902

56.4

66.2

117.3

1903

62.2

57.0

91.6

1904

61.5

55.7

90.6

hold title to tends to rise with the

general price level. Debtors some¬
times do
For

than

better

break

even.

sold
{ bonds (borrowed) to get some of
example, if

a

company

its

property, the bondholders
(lenders) will lose, for they will
get back dollars of less purchasing
power.
Who will gain what the

71.1

1

'

-10

v

2

—

2

—

v

Value Index

we

indexes

(104.0)

196.1

—27%

Stocks

109.8

(107.3)

189.3

—25

Stocks

108.7

(108.8)

192.7

—31

Stocks

105.7

(107.1)

169.9

—22

Stocks

104.7

(105.0)

170.2

—23

(104.2)

171.4

—23

—23

7

62.1

92.4

—19

98.5

(105.2)

146.6

—30

Stocks

1908

64.3

61.6

95.8

—41

97.4

(103.9)

151.3

—44

Stocks

1909

64.3

76.9

119.6

—52

99.6

(101.5)

154.9

—53

Stocks

1910

67.9

74.1

109.1

—58

96.8

142?5

—60

Stocks

1911

67.9

73.2

107.8

—62

96.6

142.3

—54

Bonds

1912

72.1

75.5

104.5

—45

96.0

133.1

—42

Bonds

1913

70.7

67.3

90.1

—37

93.3

131.9

—41

Stocks

1914

71.8

88.9

—33

131.9

—27

1915

72.5

91.3

—22

129.9

—42

1916

77.9

.76.2

97.5

—18

1917

91.6

? o68.3

74.5

K 26/

1918

107.5

60.7

56.5

1919

123.8

70.7

57.1

63.8
i

v

>

66.2

v

>

,

94.7

94.1

7

.

97.2

124.5

—39

93.6

102.2

—24

116

89.6

83.3

171

90.1r

91.9

*

64,2

44.8

180

83.7

85.9

59.9

27

40.8

113

82.5

88.2

69.0

22

1922

119.7

67.7

56.5

—12

93.2

96.6

80.7

1923

121.9

69.0

56.6

19

92.9

95.9

78.6

28

99.3

81.2

23

.

72.8

59.6

89.7
100.0

27

-

71.5

12

•

79.1

41

93.7
95.2

101.7

S5.3

103.8

1927

124.0

118.3

95.4

14

96.7

108.1

1928

122.1

149.9

122.3

—32

95.6

108.3

In

1933

92.4

63.0

68.2

of

1934

95.7

72.4

75.7

flight bond prices, and both have

17

52.2

1932

broadly representative stock
prices and also a series of top¬

74.2

143.3

'

-

Bonds'

-Stocks
Ui Stocks
Stocks

7;:

—

127.7

1920
1921

in¬

adjusted for use.
have a series

Stocks

67.2

1907

York

we

Stocks

(104.0)

1931

summary,

Stocks

102.8

<

by the
cost of living index of the Bureau
of Labor Statistics,
1913 to the
present.
Before 1913 the
New
Reserve Bank's

Choice

for 10 Years

—18

/

126.4

Finally,

Better

10 Year

Gain or Loss

110

105.4

—22

115.6

Bonds Real

Bonds

Municipals

<!))

(K)
%

U. S. Govt.

119.9

63.6

125.4

dex has been

1900-1950

76.3

1906

1926

Federal

.....

161.6

1925

before 1937
Department of Commerce's
both

•'

.

m

& Poor 15

Loss

(Stocks)

56.6

61.5

or

Value Index

1900

in the

divide

;

10-Year Investment,

Standard

Gain

1901

series spliced to them

shall

investment in 21

<«)

(5)

(4)

Stocks Real

Stock
Index

122.2

stocks and the

"Historical Statistics."

find that stocks

we

better

periods, bonds were better in six,

em-

.

Stocks

•

Stocks

- ;

Stocks

:/

Stocks

82.1

Bonds

13

.

81.1

-

ors

fact,

the

were

two

1'

comparative gain or com¬

was

for

should

that

:

differ¬

10%

was

parative loss. Making adjustments

were

reached

there

less, usually less, whether

or

ence

better choice.

bonds the

us

'

and Poor's in¬

common

evil?

lesser

In conclusions
'

.

Living Index

1924

dex of 416

lost

stocks the

superiority

in

stocks.
'

.Date

1905

reasonably similar (see Columns 5
and 6 in table).
For stocks we
shall

investor

whether

bonds.

were

his bonds.

on

Let

pe¬

% 10 Year

That 51-

contains 41

period

year

intervals

the

which

10

were

21

and in how many were

eight of

Common

and

1900
a

had

ily
the

only

bet¬ years, he would have lost slightly
on his stocks and lost very heav¬

bonds

to

turn

us

in

better

were

Notice also that if anyone
invested for the entire 51

years

(2)

Cost of

how it would have

investments in

bonds
years.

clearly

1—Comparison of Stocks and Bonds for

(l)

power
have af¬
investments, of the

between

type,

Also

ing in stocks, for stocks were the
better
choice
in
31
years
and

ex¬

How would the chang¬

periment.
ing

practical

TABLE

or

riods

have

invested

with

in

stocks

bonds.

would

Eight of the gainful

for bonds coincided

purchasing power in a period ard and Poor's index of best grade
of rising prices. It is another ele¬ municipal bonds between 1900 and
mentary economic fact that own¬ 1929 and United States govern¬
ment bonds between 1919 and the
ers of physical property generally
suffer
less
from
inflation than present. The individual bond
creditors do.
The most obvious buyer of the earlier period would
property owners are those who more likely have invested in good
own
land, buildings, equipment, municipals or railroads than in
stores and merchandise inventor¬ governments. Dealings in govern¬
ies. But you can also be a prop¬ ment bonds were on a relatively
erty owner by being a stockholder small scale then and the records
in one or more corporations. It is are
not
easily accessible today.,
the stockholders
who own
the The price behavior of the two
corporations that have title to the types, municipals
and
govern¬
various physical properties. Other ments, where the series overlap
property owners are all kinds of in the 1900's and in the 1920's, is
who

invested

be

end

ahead

been

stocks.

of

debtors

had

the

the past half century? Let us

over

affected

as

so

ahead

let

something
pe¬

vesting in bonds and in how many
invest¬
ing in stocks? At the end of 13
of the periods he would have been

the

diversified list of stocks.

There is another way of invest¬

ing savings

of the gainful

.

1950.

Property Owners

In how many

riods

would he have gained by

falling purchasing
power of the dollar or gradual in¬
flation, how would investments in
stocks compare to those in bonds

E

Inflation Is Less Likely to Hurt

bound to lose.

riods would he have gained by in¬

light of the generally upward
tendency of prices, which is the
as

Now

have been safer invest¬

he would

clearly

were

If he chose-incorrectly

time, he lost unnecessarily
or unduly in 33 of the 41 periods.
If he did not know what to do,
and most of us do not generally,

clearly better in 5.

In the

was

other 21 he

been

have

Stocks

ter in 7 instances and

perfect

a

In only 20 years.

guesser?

The 50 Year Experiment

same

gain if he had been

bonds

better?

would the investor have been able

25 years ago.

was

would

of the 41 10-year
between 1900 and 1950

years

bonds.

or

in how many

investment and

10-year investor
and lost in 21,

The

20

every

of the other 12 pe¬
riods of
the
gainful 20 would
stocks have been clearly the bet¬
ter

in

providing, of course, he chose cor¬
rectly whether to invest in stocks

In how many

how many

periods
to

dollars that he got
In terms of

let

us,

us now ask several pertinent ques¬
sterling was once worth $4.86; it tions.
now worth $2.80.
The franc was
Significance of the Experiment
once
worth 19 cents; it is now

worth

phasized.

and in 2 bonds outdid stocks.

before

table

is

original dollar of 1792 contained
24.75
grains of pure gold; the
13.71
ernment bonds.
In the next few present dollar contains
years many such bonds will ma¬ grains of pure gold. In the United
ture.
Thousands of persons will States during the past half century
learn first hand how creditors lose prices have risen in 31 years and
in an inflationary period. A per¬ they have fallen in 17. The cost of
living index is triple today what
son investing $75 in 1940 got back
it was in 1900 and is 40% higher
$100 (principal and accumulated
interest)

this

Thursday, February 1, 1951

.

.

won

whether

figures in Columns 3 and 7 invested in stocks or bonds.
In how many of these 8 periods
clearly suggest, however, that un¬
less we experience a sizable de¬ were stocks better than bonds and
flation, which is most unlikely, or in how many were bonds better
a serious stock
market crash, the than stocks? In 6 of the good pe¬
years
ahead will favor the in¬ riods stocks outperformed bonds

Bonds?

or

ahead

been

The

Long-Term Investment:
Stocks

have

.

•

Bonds

Stocks

•

.

25

Bonds

25

Stocks

87.2

13

88.3

15

85.5

24

Bonds

91.1

17

Bonds

Stocks

Bonds

J

'

1929

122.5

1930

190.3

154.5

149.8

-119.4

125.4

104.8

93.3

—42

v

108.8

—34 '

'

94.7

108.7

87.1

Bonds;

24

85.4

92.8

—18

'

97.6

48.6

49.8

12

88.9

3

93.1

l

95.4
99.5

5

Stocks

100.7

—19

Stocks

99.7

—20

Stocks

101.4

—19

Stocks

91.1

—

*

1935

98.1

78.3

79.8

1936

99.1

111.0

112.0

1937

102.7

111.8

108.6

—

•

12

r

:

—15

101.5

—33

100.8

102.2

98.2

-—16

Stocks

—33.1

S ocks

'

bondholders

lost?

Chiefly

the

stockholders will.
It would be
to

a

mon

mistake, however,
this

from

assume

that

stock¬

value.

These

The

table

explanatory
warn

break

1938

100.8

83.5

82.8

—15

102.5

101.7

—42

Stocks

1939

99.4

89.2

89.7

—13

105.2

105.8

—42

Stocks

1940

100.2

83.4

83.2

3

107.2

—54

Stocks

1941

105.2

75.7

a

;

tion

that they generally

are

lars.

holders often gain from an infla¬
or

com¬

1935-39 dol¬

been reduced to dollars of

the

is

selfshould

reasonably

although we
reader against one

pos¬

*

116.5

65.7

56.5

1943

123.6

87.0

70.4

base and accordingly are not com¬

1947

159.2

these factors into

parable.

1948

171.2

are

investment

better

a

account, stocks
than

do

not

have

a

common

111.0

71.9

1942

sible misinterpretation. The stock
index Column and the bond price
Column

-

106.9

-

105.5

•

•

Heavier taxes, weaker se¬
curity markets, the uncertainties
of changing demand usually tend
to prevent that. Still after taking
even.

—

1944

1 zd.6

94.5

75.3

1945

128.4

115.0

89.6

1946

139.3

132.5

95.1

-

79.9

■/■ /-'//' ■*'

102.0

79.4

•i'..""

75.2

:
"

any

Do not, therefore, draw
conclusions from comparing

116.5

73.2

117.8

68.8

•

'';/•

•T.

'•

114.9

'

■

67.9

103.3

I, :

T/*

;

•

61.8

v

V."'

■

:

'*•'

■

169.1

/:

v

53.8

100.8

'

1949

••

'

v

6o.2

103.8
j

-

<

•'

81.3

V

100.3

104.8

•

/ V: /.

86.4

100.7
100.5

:

'•••

-•

'

■

■!

■"

:

Z

'

'

'

~

■

?•/

•

bonds in

period of inflation.

a

In

such times the investor must face
the

fact
that he will probably
lose, whatever he does; he must
simply strive for the least loss.

Column 2 with Columns 5

or

Column

7.

only
and

comparable

Long Run Tendency

a

For Prices To Rise

Thus

far

we

though inflation
short-run

have

talked

as

were a

relatively
lasting
at

condition,

most

a few years.
Most persons
would admit that stocks are a bet¬
ter investment than bonds under

those conditions.

But

are

stocks

a

better investment than bonds for

longer

period? There is good
reason for believing that
they are.
After all, prices tend to rise more
than they tend to/fall. Keynesian
a

run

economists

notwithstanding, infla¬

tion has been

this world of

a

greater

ours

menace

in

than deflation. A




These

8.

centage of rise

Column

Columns

measure

or

6,

or

are

the

fall in real value

a

loss of 27%

his prin¬
cipals Stocks wer^ therefore the
better investment for'a 10-year
period in 1900. The percentage
a

on

figure opposite each year repre¬
sents the gain or loss realized ten
years
umns

later.
end

in

Therefore these col¬
1940.

139.4

80.7

We shall

Column 4.

4

per¬

stood at 196.1 in 1900 and at 142.5in 1910; the 1900 bond buyer suf¬

fered

173.0

1950

102.8

The

10-year period. The per¬
centage figures in these are ob¬
tained
by comparing
the
real
value index of, say, stocks in 1900
with stocks in 1910, i.e. 84.8 with
109.1.
The 1900 investor got a
28% gain. In contrast notice the
real value index of bonds which

over

There Is

with

3

*

*

not

Column 1. The cost of living: figures
.those
of
the Bureau
of
Labor

loss

a

1935-1939 base.

The

each

1950

figure is .that of September. For
before 1913 the cost of liv¬
ing figures of the New York Federal
Reserve Bank have been adjusted for
Sources

are

the

1949

a

taken

from

Historical

1901
a

the

Statistical

Abstract

for 1949, p, 482 and the Survey of
Business.
The figures since
1937, representing 416 common stocks,
had to be adjusted to fit the earlier

Current

series.

^

Column 3.

simply

an

values to

a

The real value

attempt
common

dollar of 1935-39.-It

index is

to reduce stock
dollar value, the
was

-

in

investor, however,

1% gain, etc.

The
only

The 15 top grade munic¬

and are included
for purposes, of -comparison
with the municipals.
Fpr the years
1919 to the present they are the aver*
age of a number of issues, partially
1900-1909

59.4

•

.

/•

.

v

"

The early
figures are
quoted in A. P. Andrew, Statistics for
the United States, 1867-1909, p. 279.
The later figures, 1919 on, come from
Historical Statistics, p. 281 and the
1949 Statistical Abstract, p. 482 and
the Survey of Current Business.'
tax-exempt.

held

Column 6.
The U. S. Government
bonds are 2 per cents of 193ft for the

purely
^

realized
"*

ipals of Standard and Poor were cho¬
sen to represent bond values, 1900 to
1929 because the dafo on government
bonds
were
so
fragmentary before
1919.
Investors
would more likely
have invested in municipals or rail¬
roads then, anyway. Source: Historical
Statistics, p. 281.

years'

obtained by

the common stock index by
the cost of living index, i.e., Column 2
by Column 1.
dividing

with their real value 10
For example, stocks had ;
of 84.8 in 1900 and of
1910.
That meant that the

value

Column 5.

Statistics,

281 for as for as 1937.-From then
untif the present the figures were
from

gain or
obtained by

later.

real

109.1

p.

drawn

is

person who invested in 1900 and
until 1910 realized a 28% gain.

Statistical

Abstract, p. 308 and Historical Statist
tics, p. 235.
Column 2. The common stock Index
was

years

year

years

the years

use.

10

comparing the real value of stocks in

are

Statistics with

after

The per eent of

The real value index for

Cclumn 7.

bonds is

derived

in

the

same

manner

The bond figure
divided by the cost of living
index, i.e. Column 5. or 6 by Column 1.
Government bond
figures were used
as

that

for

stocks.

was

from

1919

on.

•

.

Column 8. This is like Column 4.
The real value., of bonds is also com¬
-

pared

over

both

that

a

10-year

Columns

for

1940:

1941

4

pared with 1951.

Notice

period.
and

cannot

yet

8

end

be

in

com¬

.

; Column 9.
This tells which choice
the investor should have made.* It is

derived

and
was

1936

by

In
close

8.
.

and

.

comparing
a

.few

indeed,

1937.

cases,

viz.

Columns
4
the decision
1905,

1909,

*

Y

Volume 173

and

the

Number 4982

difference

marked in

.,,

not

was

verv

14.

order.

How

much

and

the

significant.

bonds?

A yield

in

This

for 10 years in favor
of
would make stocks

stocks

some¬

what preferable

riods

because

real

value

.was

the

difference
10.% or less.

was

less

in

vyield margin favoring
on

•basis

pe¬

the

generally

1%

14

just considered, virtually

we

.even

in all

a

in

It

fact.

A

stocks

of

compounded
interest
10 years is about

over

14%.

A margin of
2% is 27%.
would favor the stock

This

investment

.even

more.

•records

Standard

and

that

.snow

and

Historical

Poor's

Statistics

the

discrepancy in
yields between stocks and
bonds,

on

a

10-year

running

average

-basis, ranged from 0.8% to about
:;3% recently in favor of stocks. In
all

but
at

was

ancy,

two

or

least

a

usually

three

there

years

1% yield discrep¬
Thus we may

more.

that whenever the
differ¬
in the value of the
principal

.assume
ence
;

between stocks

•

over

and bonds

What definite
draw

from

conclusions
all

these

better,

on

of the 41

the

was

In 35 years

investment in stocks
preferable. In only six of the

was

41

the whole?

may

calcula¬

tions? Which investment
an

years

These

bonds

were

all

•1931:
•

not

was

10%, actually the stock in¬
vestment was preferable.
we

fall

bonds

paid

off

decade.

pression

above,

the

preferable.

between
As

table

1922

in

and

the

de-

mentioned

strongly

indi¬

cates that the next few
years will
also prove stocks were
the bet¬
ter choice in
1941,

1942, 1943, etc.,

because

have had considerable
in the last decade arid

anticipate

From

more.

ff this it might be gathered
the next half

the

Y;

all

that if

century is at all like

past .half

century, the long¬

time

inure?

jt

'

.

: V

time to

some

"low interest

a

policy because of
that

Treasury will
make

im¬

our

national debt. In everyday

language
•

•

Will the future half century be

that

means

the

its influence to

use

credit plentiful to keep

reasonably similar to the past half terest rates low
century? What do recent business down the service

in

order

to

in¬

keep

the government

on

Jf

should choose
•

a

the proportion

in

bonds.

investor, he
formula in which
invested in stocks

is

considerably greater than that
invested in bonds. He
should, of

'course, always keep
in bonds or cash

funds

some

because stocks

■i are

volatile than bonds and
time is needed to sell them

more

more

to

best

Also
'

advantage

the market.

on

if the investor

is in

a

high

income bracket, he may lean more
strongly
toward
tax-exempt

'

bonds.

But

whether

small

investor,

every
or

or

large,
should

formula

non-formula,
be primarily concerned with protecting

-

his

principal.'

ous.

Perhaps

investor

do

Will the amateur

so.

better

period of time in

over

a

shorter

a

•

•

power

of

amine

columns

If

he

sold

out

every

five

years

years he

the

dollar?

Let

three

us

and

and

ex¬

seven.

re-invested

over

this

51

would have gained in 22

I five-year

periods and lost in 24.
On bonds he would have
gained in
18 and lost in 28. And in 13 of
the

18 periods that he
gained in bonds,
he could
have gained in stocks
too and more

'did the

same

handsomely. If he
thing every year, in¬

stead of
•

'

every 10 or five years, he
gained in 27 years by
investing in stocks and lost in 23.
would have

or

30%

creates

money,

fire

insurance

creeping

inflation.

of

and

taxes

Total

taxes

the

the

possible
bound

are

take

now

national

pared to 6%

war

to

about

income

in 1900.

immediate

as

com¬

In view of

prospects

and

:

of

the

sons

and

produces

there

stocks

and

is

invest

to

stocks is

prices.

Column

tion have generally gone hand-inhand in our financial
when

cause

history be¬
major na¬

face

we

ing

real

high,

as

value

of

glance at

a

of the table will show.

of the

most

higher dur¬
depressed 1930's
was

How

to

•

the

pay

It

is

1900.

Many

spectable
as

to

con¬

are

now

quite

time

in

quantities.

stocks

be

may

In

the

in

the

last

The future
and

more

as
they
century.

half

Diversification

roads

(Class I)

see

of

least to
•are
-

their

sell

inclined

bonds

when
-

popular behavior.

more

and

to
to

People

lay
buy

away

stocks

reached
in

6%,

1920

are

when

they

need




extra

which

be

to

suggests

to

purchasing
of

'

to

power

the

41

Stocks

Company, Boston, Mass.
With respect

in¬

if

the
the

preserve

our

probably

be
We

better for the next few years.
cannot be sure that this will be

see

can

Let's mind
we'll have

with anyone.
'«

!j!

*

*

HUGIISTON

Chairman of
Field

I

anyone

business and

own

no war

of the principal.
10-year periods,

will

to Dr. Palyi's ar-;

how
figure it differently.

century

is

J. BROOKS KEYES

ticle, I don't

least

&

have

Palyi's
spect.

M.

the

McBAIN

Board, Marshall

Co., Chicago, 111.

viewed

always

opinions
In
this

with

Dr.

great

article

re¬

has

he

one

other

want

governments

taining military positions
continent and that
off

other

that

fair return.

a

that

assumed

was

regulatory

tries

that

and

This

bodies

as

regulated

generous profits.

well

may

tries,

indus¬

rule cannot expect very

a

of

should

World

gained

like steel,

aluminum,

cop¬

per, cement, autos,
electric ap¬
pliances and some chemicals, sub¬
jected to regulation. It may be al¬
leged that these industries are
"monopolistic" or are "affected
with a public interest" or are

to

the

Wars

have
I

nothing

national

de¬

Atlantic

should

with his conclusions that
not

felt

stayed

out

and

be

tarily
present

As

is

what

to

big

a

and

more

likewise

faced

are

with

more

labor

prob¬

lems. About 1900 the unions

were

strongest in industries that were
competitive
like
cigar-making.
They tended to be weakest in in¬
dustries

that

But

the

monopolistic

were

like iron and steel

strength

we

do

can

question.

are

fast

the

American

com¬

Whether

to

of life.

How
the people to the dan¬

arouse

each of

that

way

keep doing everything
to
that end.
We

us

we

can

keep

pointing

out

those

The Harding College at.

Searcy, Arkansas, has been put¬
ting out some wonderful material

those

Chamber

putting

of

Our

lines.

Commerce

programs

on

on

has

preserv¬

strength of unions is likely
to grow in a democracy because
of the voting power of their mem¬
bership. Union demands can re¬
profits

goods

out

of

the

to

market.

of

have

of

are

fear

many

tried

only

cost.

to

thoughtful
in

we

even

companies

if

seem

we

as

allies

our

without

can

we

violence

a very

are

do not have

to be committed

U.

S.

is

a

and I am
with him on

Congressman from

•

to

strong

just read

Melchior

Dr.

article, "Are We Falling
Into History's Greatest Trap?"." ,
I

want to

state that

hits the nail

think

I

it

the head.

on

doing serious

economic

our

have

I

Palyi's

keep

we
as

struc¬

ture, I believe Russia will be
tained.

W.

II.

con¬

PIIENTIS, JR.

Chairman of the Board,

Yf

Armstrong Cork
Hon.

Company,
Lancaster, Pa.

WILLIAM

IIENRY

What Dr. Palyi says about plan¬

HARRISON
U. S. Congressman from Wyoming

ning

preparedness program

our

so

as to keep our country strong eco¬
Palyi's article nomically and financially is very'
with a great deal of interest and much
to
the
point.
His views
feel that the author's views were should be
given careful study by
not expressed
without consider¬ persons in authority.

have

I

able

read

Dr.

research

artcile
has

and

which

a

and

well

was

great

would

His

study.

thought
out
deal of merit

bear

serious

study

)J:

Hon.
U.

touched

that
on

one

particularly vital

the

trend

matter

of

of

recent

national

years

spend¬

•
nt

;

>'f

Illinois

written a fine
However, it seems to me
has

are

all based

has

Palyi

conclusion,

the

from

that his conclusions

Dr.

SIIEEHAN

P.

Congressman

article.

feel

*

TIMOTHY

S.

by
serious-minded
Americans,
Y Dr., Palyi
particularly those in the govern¬

ing.

one

accord

Hon. NORRIS POULSON

on

premise

a

workable.

I

doubt

is

says

on

page

4:

let's

call

the

shots

*

backed

ourselves,

.

the last several weeks

During
have

we

had

of

outstanding

an

it

what

ex¬

to

means

"backed by UN endorsement."
CLIFFORD

HOPE

R.

I

have

read

this article with

question

personally

U. S. Congressman from Kansas
a

I think great deal of interest and agree at
least in part with the views ex¬
pressed by Dr. Palyi.
accurate one.

in
by

UN endorsement."

ample

;!'.

which

He

"Instead,
advance

Nations will

United
to

whether

a

be
I

the

amount

ever

anything more than

debating

society and if Dr. Palyi is basing
his conclusions
am

afraid

on

is

he

this backing, I

for

in

a

great

disappointment.
II. V.

R. M. HANES

Trust

Company,

Winston-

I agree

'■«! Salem, N. C.
I
Dr.

have read with

KALTENBORN

New York

President, Wachovia Bank and

select

likely to be found in the tobacco,
food,
beverage,
chemical,
utility and oil industries.

war,

Therefore,; if

of his viewpoints.

point is

whose labor

drug,

Finally,

article

believe

I

crystal clear

his analysis of the Russian view¬

some

small part of the

a

Such

Palyi's

leadership in

article very
has made a

he

Strong

unions

companies

free

price

virtually driven the
industry out of New Eng¬
For

stocks

a

very

entirely

have

textile

costs

threaten

or

by force.

Hon.

Melchior

forceful

and

California '

ourselves and

in

GRAHAM

Chairman of the Board, The First

The

can¬

only argument which
prevails with Russia is one backed

reverse

National Bank of Jersey City, N. J.

unions and giant industries and the
unions have generally triumphed.

we

the

the

I

been

giant

Palyi's

think

been made

has

ment.

steadily and since the mid1930's (if not before) there have
of

It

that

been

manufacturing.
of the unions

clashes

and

namely that we are
and have been playing into Soviet
of government controls, high Russia's hand
through our furious
debts, high taxes, and fight them attempts to bankrupt ourselves.
wherever we can.
I hope that I may be able to help

KELLEY

intelligent

thinking.'

local

ing the American way of life. We
should all be aware of the dangers

grew

repeated

able,

fine- contribution .to contemporary

we

losing what is known as

is

answer

simply that it must begin to show

it

about

gers
of Socialism and Federal
controls I do not know except if

along

i

into further

Dr.

and

get into World War III or not we

should

•'

Department

plications and trouble in my opin¬
ion.

dangers.

Industries

The

carried out by
is almost

program

State

our

certain to get us

ably

a trend would prob¬
affect the profitability of
these industries
just as it has
limited the profits of most rail¬

should

economically.

and

like

I

we

preclude

My

courting national bankruptcy.

much

borders,

our

gov¬

moment.

out

wc

Oceans

with Russia.

war

our

to

impregnable for the future with¬

and

Pacific

and

steps
take

world and plan to make ourselves

them,

powers

v::

should

our foreign affairs'.
statesmanship is more
urgently needed than guns at this

ourselves

arm

II, that

from

stay at home, become strong mili¬

fense." Such

roads.

a

support a world

:

what

ask

ernment

our

have

I

only upset the balance of

The years ahead

other heavy indus¬

see

You

ob¬

should stay

we

continents.

we

on

resources to

police policy.

History's Greatest Trap?"

the

5%

inclined to be strict in setting

rates,

they have extra funds and

them

amounted

of their net property
investments,
and
in
only one year has it

total

at

half

past

concern

35

*

President, Central Aguirre Sugar

our

not

likely to
regulation

The past half-century
has witnessed fairly close
regula¬
tion of the public utility indus¬
tries
and
closer
regulation of

»contrary

or

the

main

*

widely

were

business.

investors

belief

are

for long-time

summary,

better.

Stocks

at

that

also is
more

framed

better

buy most of the time

periods. This is what we should
i expect, theoretically, in a
rising
•price level economy.
But it is

popular

these

"Are We Falling Into

if

and

increasing

event

land.

to

all

in
re¬

they seem safer
well, they may be sought after

less

shorter

leading
companies.
The

19C0-1950, stocks would have been

The careful investor has by

government's

reasonable

the threshold of respectability

unions

over

ing

portant

this
skilfully summed up the problem
as
and
how
to deal with it.
impor¬ true for the next half
His
century be¬
clude, therefore, that if there are tant query. "If I want to buy a cause
thoughts on foreign commitments
industries
probably
face
are
realistic.
sharply rising taxes ahead, there bond and be sure to get my money higher taxes, labor
However, I would
troubles, and
is also inflation ahead. Bonds will back,
I can buy a government more
find it difficult to justify confi¬
regulation as well as further
then still be a poorer investment bond, but how can I get such long¬
dence in the ability of our pres¬
inflation.
Still, as long as rising
time safety in stocks?
than stocks.
ent Administration to successfully
It is im¬
prices seem likely, and they do,
practical for me to buy all the
formulate
and
administer
the
Perhaps in the future the yield
stocks
416
stocks on the list that you diversified
appear
the kind of foreign policy which he
of
stocks
will
fall
to
a
level
have used in your experiment for better
long-term investment.
suggests.
nearer
that of bonds,
especially
I
if
more
fully agree with him that
people
decide
to- buy
there
is a point beyond which we
stocks. That seems quite possible.
Continued from page 3
must
not go in the utilization of
Industrial stocks were
barely on
to

bills.

be the better long run
investment.
Bonds
show
up
to

advantage

of

vestment, say 10 years, a diversi¬
fied list of stocks has proven bet¬
ter than government bonds dur¬

In

Get
in

In

potential" becomes more im¬
than
the
"mobilization
potential."

ness

investment

or

Conclusion

in

than it is today.

emergencies, both taxation
inflation have always been

used

not
4

Stocks' real value

tional
and

the

good

duPont

greater safety in

choose

yet

as

of

of

diversified.

yields and retard the rise of stock
We must remember, how¬
ever, that rising taxes and infla¬

shares

con¬

ditions

If

modest, diversifi¬
by buying

are

realize that under such

them, their price is likely to rise.

stock

the

con¬

counselor.

be achieved

can

holdings of

But

reduce

may

cation

per¬

cline.

That

funds

your

more

As

long-term trends, corporate
profits after taxes may well de¬

duce

to

well, of course, to

investment

an

trusts

With bonds he would have
gained
in only 20 and lost in 29. Stocks
appear

sult

perity. Making credit cheap, how¬
ever,
stimulates borrowing,

market that is

•generally rigged against him from
•the viewpoint of the
purchasing

would do

rise.

costs

ahead,

"necessary

The cynic may remark that
this
experiment proves chiefly that
10-year investments are danger¬

quate diversification yourself. You

ment

They may also follow that
policy in order to stimulate pros¬

investor, say the 10 year in¬
only 6 of the 29 years
vestor, would be well advised to since 1921 has the net operating Y)f Europe. ^Naturally, I take the
put most of his savings in com- railroad income of the best rail¬ position of Herbert Hoover that
stocks rather than
he is a formula

period." That is not' is little danger that we will bank¬
difficult at all, and is certainly less
rupt ourselves by war prepara¬
so
than it would have been in
tions. For the next year or so we
1900.
If you have a
fairly large must go all out in getting ready.
sum - to
invest, you can get ade¬ After that I agree that the "readi¬

debt.

railroads. In

mon

the 1900-1950

experiences and economic trends
suggest?
With mounting arma¬

we

-inflation
may

■

is

per year

for

rate"

What Are the Trends of the
:

the

margin of 1%

They would be wiser to

just the opposite.

23

(543)

mense

discrepancy

was^ there in .yield between

stocks

funds.
do

But another modification is

.

The Commercial and Financial Chronicle

views.

with

VY

many

seems

to

Greatest
me

Trap?".

situation

the

Russian

clear, and I

Los

cause

I

great interest of peace by making it clear what

that his analysis

and

HELEN

of Dr. Palyi's

We will advance the

Palyi's "Are We Falling Into steps by Russia would be followed

History's

agree

is

It by
of

sensible

thoroughly

our

that

our

policy has

which

article.

come

there

Dr.

our

Palyi shows con¬

country finds itself

conclusions

his

to

STIRDIVANT

today and I thoroughly agree with

but

sometime

*

Angeles, Calif.

believe

lacked initiative and imagination,
for

*

siderable insight into the situation
in

entrance into war.

I quite agree

*

City

expressed in ,the

a

24

a-.

(544)

things and

Continued from first page

Financial Chronicle

The Commercial and

"Hi v

credit

approaching war pitch of

not at anything

are

excitement about any.

..

credit

,

Can this nation with its traditions

\

As We See It
with "across-the-board"

controls

now

wartime

announced, under¬

wait to

lying factors which must and will in the long run deter¬
mine prices will be neglected., The "pay-as-we-go" talk
still goes the rounds, but there are signs here and there
of official thinking much too similar to that of World

Let

one

no

suppose

matter how well

planned

Well,

.

.

from

And the Business Outlook
think

I

II.

that

of controls

scope

What will be the impact on

after taxes of all corporations

net

be

will

will include the area of labor.

that any attempt at controls, no
or how vigorously enforced, can

the

those conditions the

And under

by the third quarter

this year the

of

national

the

despite uncertainties in world affaiis
I
think
a
pattern
fairly

gross

civilian

economy?

Here

and

and adequate fiscal policies—do much of con¬
either to cure existing difficulties or prevent an
aggravation of them. Production of such goods creates the

In automobile
electrical
appliance
residential
building

the civilian hard lines gener¬

downtrend

power to absorb it, unless the increase in pro¬
duction is achieved without any concomitant additional

production likewise places purchasing power
providing goods

in the hands of the rank and file without

to absorb it.

These are simple, elementary facts, but are
apparently not very widely understood. The additional
purchasing power generated by defense production, or its
equivalent, must be taken from the markets or inflation is
inevitable. So far as humanly possible, it must be absorbed
by taxation. It is not in any but a strictly temporary way,
or
perhaps only in a Pickwickian sense, absorbed by the
placement of government obligations, even in non-banking
hands, with the understanding that they can either be re¬

be

a

that the

trust

peak and I
commercial

approach inventory
1951 with a much

would

banks
loans

the

to

close

fairly
should

during

to

corporations the banks will be involved in big

good level of divi¬ government bond drives. As far as
dends but will not repeat all the possible these will be aimed to
extra
dividends that have
been sell bonds to the public but in the
a

pronounced dispersed during

the year goes along.

as

dends of the larger,

fast pace

very

in

standard

the

prices are fixed by
rigging.
Under such circumstances these
obligations are something very similar to money.
If

sweeping control orders are permitted to take the
edge off determination—assuming it has ever really
existed in political circles—to do what is needed in these

trend

about 4% above a year
ago. I shall not attempt to provide
a figure for the second half.
I am
talking of sales here in terms of
dollars,
not
adjusted
to
price

dollar

changes.

15%.

The
in

/

next

-

retail

comes

happy.

big

trade

and

ago

year

not

are

dollar

On

Easter.

Easter

out

this

year.

I

about 12% above a
in the two weeks

I

war

if

But

the

about

far

another

if

we

the

value

of

the

probably be cut
the
present level

from

half

last

as

a

and

the

rate

continue

we

on

framework

present

war

in
of

are

peace

as

con¬

authentic

get

of

amount

over

engaged in an all-

think

to

the

all-out

would

dollar

able

have been

hand

other

period

is

decline

would

Now

the value of

years

the

the

of

shrink.

to

engaged in

period of five
the

value

the

estimate that

I would

war

department store sales value.

will" average

which

continues

we

seasonal

think that in the two weeks before

What of These Controls?

if

Were to become

early

very

Easter the

of such

in

sales in the first half of 1951 will
average

market where

government

what

provide

of the last 12 months and I hear so much about Those are the trends of banking.
What about war orders?
Here
of living it that it gets kind of stale with
me.
I feel that over this year—the there seems to be a great mystery
will not be continued.
How will this be reflected in the coming year, perhaps for the next —where are they, where are the
I have never been
retail
sales?
Department
store five years—we are faced with a war orders?
the

months

deemed in cash at the option of the holder by the Treasury

But

to

1950. The divi¬ second half of the year it is not
representative certain that the public will absorb
Probably the
In the soft lines there will be corporations will, on the average, all the bond issues.
decline
some
in
1951.
By some I banks themselves will be back
no
such pronounced downtrend.
mean
not
less
than
10%
as
an
The level of production in the soft
buying governments to finance the
lines will be about the same in the average and not more than about deficit by the end of the year. The
second half of the year as in the 20%.
typical commercial bank, a year
I have chosen not to talk very from now, will own more govern¬
first half.
The standard of living
will decline. It will not decline in much about inflation today. I say ments than it does today and in
the essentials of life in such a way that
partly because the subject particular will own more govern¬
has been pretty well hashed over ments of slightly longer maturity
as to cause undo sacrifice on the
everybody
in
the last
six than those that are owned today.
part of the American people but by
will

there

ally,

^purchasing

fiscal areas, the results will not be

the

net

average

conditions

those

sequence

i

gross

is

That
of

product.

as

will maintain

a

this effect

to

loans

bank

greater spirit of caution that they
national product over the have needed to exercise during the
past 35 years. The ratio of net to past year.
The banks also will be called
clearly outlines itself. First, in the gross national product will be ap¬
civilian hard lines there will be a proximately the same in 1951 as upon to help the United States
steady, continuous downtrend in it has been on an average for the Government finance the defense
production
in
each
succeeding past third of a century. And un¬ program. Before the year is out,

again,

same

der

be sold in

of the

6V2%

about

production,
production,

or

comment

a

that

capital, particularly to
provide inventory, would prob¬
ably be made on a large scale
ana
they could be made with
safety during 1950. Well, during
the year those bank loans have
gone up by leaps and bounds. I
don't
say
that we have passed
the
peak of those bank loans,
but I think we may be coming

15

page

quarter of the year.

itself

made

—

of proper

Defense

private banking system sup¬
ply it. A year ago at this meeting

I

The Battle of Production

possibly prevent further inflation both now and in the
years to come in the absence of basic financial reforms,
indeed it may be said that controls, to the extent that they
are effective, help to dam up inflationary pressures rather
than to prevent their development.
Nor would main¬
tenance of production of civilian goods—in the absence

cost.

the

we

see.

Continued

ject, and it is evident that there is no intention of aban¬
doning the thoroughly unsound money market policies of
years recently passed—an abandonment essential to the
avoidance of further trouble stemming from the infla¬
tionary potential left from World War

.

working

this sub¬

support a feeling of assurance on

War II days to

If not

regulations?

the

supply the credit. It is better that

really extreme
shall have to

goose-step to what are

of mind be made to

private

will supply the
government will

system

or

the

either

and

banking

^ : "
.
; \ *: . *
and in this frame

j.

.

Thursday, February 1,4951

.

.

.

think that

seeing

war

out

fast

few

Now

I

the verge of

on

orders

in

furious

and

weeks

the

are

change of pace. I think
are going to come

a

the

to

in the

up

there.

motion

we

seems

orders but there is

war

slow

a

speeding

a

placing of
still

there

weeks

been

on

that

In the

actually placed.

three

have

figures
orders

war

the

months.

and

next

think

I

organization that Mr. Wilson

is setting up will be instrumental
in bringing about that speed-up.

sweeping orders themselves in a
present? Obviously, any hope of real
success in
enforcing such a ukase must rest with the public
generally. Regulations which, have to do so intimately
and so restrictively with the
everyday affairs of every
Tom, Dick and Harry in the land can be enforced only

prices will slow down consider¬
I think that businessmen have
merchants would not become too ably.
/ ■■;/ to
some
extent been a little bit
During the past six months the modest
discouraged when they see those
about
going
down
to
two weeks of minus 10%/ Minus all-commodity wholesale price in¬
Washington and getting the war
dex
has
been
going up at the an¬ orders. It seems to me the time
signs are never enjoyable in the

if there is

expected because of different dat-

trols

ings of Easter in the two

from here on,
will not continue

time

such

a

of

sort

Have

retail

we

so

any

at this time?

of

announcement

an

the

rules

of

the

What

such state of public opinion in this country
are
quite frank to say that we are unable

just

We

an

spring

evaded and

the

ease

with

which

black

if

the

that

takes

the cold fact for all to

see

is that
many, many

throughout the length and breadth of the
ra.nk

and

file

are




unsure

in

their

doubts exist

land.

minds

The

about

great
many

for

We

have

or

at

Now with

con¬

has

when

come

business

a

suited

broadly to
war
production
should
no
the rate of increase longer sit modestly by and wait

being applied

more

be

to

20%

but

time it will be half that rate

a

less than

fast

as

And

up
a

but not nearly

some

clip.

once

controls

Prices will still

half.

the

have

price

mandatory

been

imposed

over

orders

for

to

to

busi¬

that

the

war

No matter what you

have

them out;

them..

Washington

orders.

do,

The

to

come

Top management should go

ness.

to

blast

time

has

and

get

come

get

to

get

war

orders.

year.

be

passed in time to

first

the

six

months

of

without making it retro¬
a personal tax bill

There will be

some.

viewpoint taken

on

a

more

calm

the subject of

inflation.

first is out of consideration for the

now

the

tax

structure

as

stands is calculated to pro¬

revenue

of about

calendar

year

$51

billion

1951.

The

farm

war
are

war

bloc.

always two loopholes

controls of prices.

The

consideration
I should

first

that

second

for

the

is

The

out

labor

of

bloc.

expect agricultural prices

a

and

production.
materials

mechanized

is

is

the

used

kind
for

of

sub¬

clothing, rou¬
The second is

that

are

suited for

war—tanks,

artil¬

lery, transportation, munitions of
the standard types. But the third
type of war orders is new and
different.

That

is in

the field of

science and those companies that
but not
are
qualified by their research
government
this
calendar
year in a very sensational way because
and
engineering to handle war
will probably be about $55 billion, I think that the production of farm
orders
in
the
field
of science
with additional tax load to be im¬ products in 1951 will be roughly
should try especially hard to ob¬
posed later in the year not exceed¬ 5% higher than in 1950. In physi¬
tain war orders in that area. That
ing $4 billion. The effective bur¬ cal units, 5% higher. The wage
is true both from a selfish and
den
of corporation
taxes on all loophole has not been plugged yet.
an
unselfish
standpoint.
These
business
will
be
It
will
be
slower
to
be
brought
approximately
war
orders that stress
the new
52% of profits before taxes.
By under control than anything else
contributions of science to the art
effective burden I mean not only but I expect that by the third
of war are the ways in which a
normal tax but excess profits tax quarter of this year a substantial
qualified business can contribute
as
well.
Combining the two and measure of control will have been
most in winning the battle of pro¬
applying them to all corporations, accomplished in the wage field.
duction.
The big job ahead of business
the effective burden will be about
The experience gained in that
52%.
And that will be true re¬ this year is the battle of produc¬
ultimate

,

The

The

material

tine

retroactive.

There

ders.

sistence—food

Loopholes in War Controls

the

in the

in

from

place in Europe and other parts of the
hysterical uneasiness is aroused from time
to time by talk of sneak bomb attacks
upon us. But, how¬
ever much we
may talk about "unity" and
"solidarity,"

year

duce

reading stories
exasperated by a good

Some

nual rate of 20%.

withholding feature,
I think it would be impractical to
make any personal income tax bill
it

time to time aroused to considerable heat in
that emanate from Korea. We are

deal

years.

profits tax bill.
That
is not the end. I think

can

to

involves

doing, they can get
they want from day to day—just so long as they
have the means with which to do so and are not
really im¬
pressed with the "grave dangers" about which Washington
does so much
talking, or basically impressed with the
patriotic duty" not to be a party to such transactions.

world.

in

increase

active and since

of such

are

bill

a

relate

what

We

of

I doubt if it a broader area I think that the
In that effort there is a question
will affect personal incomes dur¬ fever heat of inflation fears, of in¬
of
selection.
Broadly
speaking
ing the first six months. I doubt flation psychology, will cool off there are three kinds of war or¬

Nor should we easily assume that many, many
people who have been complaining so bitterly will

Of course, we "hate" the Communists.

cerned

tax bill completed— be going

seen one
excess

ing the coming

markets

not condone and even
encourage the development
evasions and such violations
if, by so

a

there will be another tax bill dur¬

up.

of these

taxes?

about

probably

are

naturally well aware of the clamor about the
living and the popular condemnation of suppliers
who have raised their
prices during the past six months.
•We are fully conscious of the
widespread, emotional sup¬
position that some sort of fiat order would put these gen¬
tlemen and these
enterprises in their respective places.
All this is true
enough, but it should not lead us to forget
the million and one
ways sweeping orders of this sort
be

below

business, but they must be

game.

cost of

can

10%

Question of Taxes

to find much indication of it.

We

about

And I would hope that

ago.

year

nearly universal support of them that the
themselves are really quite unnecessary except as

orders

Easter

after

the

as

tax

take

of

the

Federal

to continue to go up some

gardless, of what the rates are, re¬ tion and the battle of inflation is type of production will have last¬
gardless of what the exemptions subordinated to that. Everybody ing benefits in the future, come
to the individual
are, regardless of what new fea¬ has to contribute something if we war or peace,
tures may

The

end

be put into

result

mately that.

will

a

be

new

bill.

approxi¬

win the battle of produc¬ business that goes through train¬
and
schooling
in
applied
Banking has to contribute ing
something.
Production
requires science. Get war orders for subare

tion.

to

Number 4982

Volume 173

sistence,

get

war

mechanized

.

.

The Commercial and Financial Ckvmicle

.

the delivering bombing power in other industrial

for

-orders

war

to

affairs.

Next, I wish to make a few comments

not
to
in the
Department
or
anywhere
I shall start with a question

here
State

else.

on

foreign policy. I
attack leadership

that I apply to

myself.

am

Do you see

anything good in the situation today?
Strange as it may seem, I
I

do.
of

experience

and

is being driven back into an
test of foreign policy that has

acid

been
all too inconspicuous in the last
20 to 25 years; and that acid test
is simply this — What is the vital
interest?

national

is

That

not

isolationist test,

an

If you go

back to the earlier years
foreign policy was cast by
such
great men as Elihu Root,
Charles Evans Hughes, John Hay

when

when everybody was

and

classic

the

Mahan
back

books

reading
Admiral

by

seapower—if you go
days when nobody

on

those

to

the
will
find that criterion of foreign polapologized

for

national

vital

talking

about

interest

you

and tomorrow. We are
driven back to that.
We
have wandered away from it with

icy today

being

ideologies but

being forced

we are

it.

back to

what does it mean to.

It is in the vital national in-

us?.

that

terest

United

the

States

should not be involved in
land
in
it

war

in Asia.

do to win the battle

You can't do any

,mor.e as steel producers. Thinking inarms of the next 12 months

the steel

But steel wl" n,ot Wln the war.

.,

.

important

General Eisenhower has been ap-

pointed to a very responsible position.
I
shall
wait
for
General

can

be

done

and

I

shall
in

that this is

the field

iea(jers in

of electronics,

partjCularly.

Before I left

fice

York

j

New

in

cauecj

j

an(j

£an you

ga^;

day

tell

one

that
to

advanced science
arts

^ell I guess nobody can be sure
monkey the statistics are correct when one
until I js
referring to such a matter in
pattern for Russiaj but the answer that I got—

no

an(i j baVe

Russia

with

war

to challenge

reason

no

it

to come then

were

to you that the way to win
United States

the

is for

war

it—war 27 million tons. I said, all

Greater

Pittsburgh

the

ancj

was

answer

The

tons.

area

Pittsburgh

last

conduct

can

war

a

against Russia if it should come.
In any such contest, great distances are involved and they are

wars

power

warship

can

to reach

fire

sea

is going

no

So in any con-

develop,

may

of

but

power

to

be of

a

com-

of today.

materials

other

as

they

With Waddell & Reed

no

extremely complicated and
few of us are capable of understanding some of the principles
advanced

science

in

that

Pittsburgh

of

gained

has
a

center

a

of

staff

of

Kansas

been

Waddell

Gentlemen,

as

this defense program

a

in

added

&

the

to

power

knows

Reed, Inc., of

enough.

But there

are

Central Republic Adds
(Special

to The Financial Chronicle)

CHICAGO, 111.—C. V. Dodds has
Republic Company, 209 South La
Salle Street, members of the Mid¬
west Stock Exchange.

(Special to The Financial Chronicle)

CLEVELAND,
Probst

A.

is

with

Ohio

—

Richard

Gottron,

Rus¬

sell

&
Co.,
Union
Commerce
Building, members of the Midwest

With McCluney & Co.

the industrial , leadership of the

(Special to The Financial Chronicle)

new

-The future leadership of AmerI don't know
what an ican business is going to gravitate
looks like or what it is to those parts of the United States

bomb—and

tronics.
electron

in

the

field

of

elec-

Merritt & Co., Inc., and Slayton &

Co., Inc.

exactly—I can't speak as a scien- which have that leadership in
tist on an electron—but it is vi- electronics.
The transition is this
tally important in radar, in bomb

sights,
bomb

in

defense

attacks

on

against
cities

in

defense

atom are now
this

Russia

which
just getting started.'
program

has

on

been

building




operating

enterprises,

in

but

1950

year

The year's decrease in failures was concentrated in the

industries.

manu¬

r

With the

single exception of the automotive category, whole¬
failures were noticeably less numerous than they were

salers'
in the

preceding

A

larger

tral

year.

number

of

failures

occurred

in

1950

in

than

the

in the Middle Atlantic, Mountain, and Pacific Coast
The sharpest drop was 30% in the East South Cen¬

previous
regions.

year

area.

Steel Production Scheduled to Surpass 2,000,000 Tons
For Second Successive Week
The

expansion in history will reach a climax
when annual ingot capacity will exceed
tons, states "The Iron Age," national metalworking
weekly, in its latest release on the steel trade. This new. total
results from a detailed study of capacity expansion by companies
and plans just comple.ed.
greatest steel

the

about

end

1952

of

120 million net

When the last rivet is driven home the

industry's competitive
The Pittsburgh-Youngstown district

will be largely redrawn.

map

million

will retain the No. 1 spot with capacity of more than 43.6

■

The East will replace Chicago in the runner-up posi¬

ingot tons.

tion with 28 million tonsj'compared wi h close to 24 million tons.
Cleveland-Detroit capacity will be 13.3 million tons;- the West
million

6.4

and

South

the

million.

5.6

increase of 21.4 million
trade authority notes.
an

over

This

totals

million

120.7

capacity at Jan.

1,

1950,

three factors:

Opportunity of amortizing part of the cost over five years
for tax purposes, (2) the defense effort, and
(3) encouraging
results from market studies of the long range demand for steel.
still

Confusion

reigns

in the

this trade

steel market, states

still lack any concrete knowledge, of what is
expected of them. As a result they are not able to give their
customers any definite idea as to what they may expect.
Producers

paper.

There

are

indications that the present priority system of plac¬

ing defense orders in steel mills is starting to collapse under its
own weight, "The Iron Age" asserts.
Hot-rolled bars of projectile
or

shell quality

This

witn NPA.
and rolled

plate.

producers are finding it more and more difficult to main¬
production schedules. Just when they think they are all set
government directive forces them to change their plans.

Steel

tain
a

steel have been lifted out of the DO-category en- V

They are now subject to direct negotiation
change also applies to shell quality billets,

new

steel picture would

quickly become

a

lot clearer if the

Such concrete clarification is
The military are now
working out some arms requirements schedules. When this job
is finished the needs can then be converted and scheduled by
of

tanks, ships, and planes.

guns,

believed to be at least 30 to 60 days away.

tons of steel

required.

American

The

(Special to The Financial Chronicle)

is

now

Fla—Edgar

C.

Rowe

'

Iron

and

Steel

Institute announced

this week

rate of steel companies having 93% of the
steelmaking capacity for the entire industry will be 101.3% of
that

operating

the

beginning Jan. 29, 1951, based on the in¬

dustry's increased capacity of Jan. 1, compared to a rate of
a

week ago, or an

This week's

100.9%

advance of 0.4 of a point.

operating

rate is equivalent to

2,025,000 tons of

entire industry, compared to
2,017,000 tons a week ago.
A month ago the rate was 98.2% and
production yielded 1,963,400 tons; a year ago it stood at 93.1% and

steel

ingots

and

castings

for

the

amounted to 1,774,700 tons.

Electric Output Shows
The

amount

of

electrical

Substantial Gains This Week
energy

distributed

by the electric

light and power industry for the week ended Jan. 27, 1951, was
estimated at 6,969,566,000 kwh., according to the Edison Electric
Institute.

It

was

60,748,000 kwh; higher than the figure reported for the

previous week, 997,904,000 kwh., or 16.7% above the total output
for the week ended Jan. 28, 1950, and 1,159,532,000 kwh. in excess

Joins Waddell & Reed

TAMPA,

country, in taking the offensive in and at times has referred to her

almost unchanged from the

was

10,000

63.

facturing and wholesaling lines. Heightened defense preparations
were
particularly reflected in sharp drops in the failures of
mining, iron and steel, machinery, and transportation equipment

of the output

we
up

This
per

of

casualties

capacity for the week

Gottron Russell Adds

.

-

of

rate

amounted to $248,283,000, a
when liabilities totaled $308,109,000. This decrease was due to a decline in the number of
failures involving liabilities of $25,000 or more. Failures involving
liabilities of less than $25,000 rose appreciably.

The

free world, Pittsburgh must add
ST. LOUIS, Mo.—Alvin F. Han¬
things in this realm and in par- to its reputation as the center of
ticular they are in the field of heavy capital goods a new repu- sen is now connected with Mc¬
nuclear
physics — which
is the tation as being the center of elec- Cluney & Co., -418 Olive Street.
He
was
previously with King
atom
bomb
and
the
hydrogen tronics.
•
•
true

.1940

military could make known its definite needs in terms of numbers

what out war, if Pittsburgh is to retain

and air power mean—

the

per

34.3.

failures

drop from the preceding

City, Mo.

that is all there is which we are now engaged and Stock Exchange.
power and air whether or not we get into an all-

Everybody

34.4

of

Liabilities

19%

.

has

Horton

re-

world
heavy

below

BEACH, Fla.—George A.

spect.

air reputation as
the es- capital goods.

well

armor

(Special to The Financial Chronicle)

been added to the staff of Central

win

rate

tirely.

metals

finished products they

for the year to

1949

Mr. Roberts

will make his headquarters at the

PALM

casualties

32.5

to

This tremendous expansion has been spurred by

City, members of the
New York Stock Exchange, will
admit Albert Roberts, Jr., to part¬
as

monthly failure rate
changes, declined some¬
10.000 listed businesses, bringing the

annual basis and adjusts for seasonal

an

(1)

York

nership

.-4

November-to-

drop of 1% from the 1949 total of 9,246.

or a

tons,

story—sea

power.

sea

of

very

result

It may seem
the

and

and

essential ingredients,

raw

and

sence.

to

in¬

battle

•

The

Dun's Failure Index, which extends the

Goodbody & Co., 115 Broadway,
New

alone

are

shot far enough 0f

a

Moscow.

that

bination

world

the

around

into
of protecting

brought

be

can

play for the purpose

j,

aluminum
very

directly brought into play,

power

is what is

Admit A. Roberts, Jr.

0f applied science in which steel
and
are

As

flict

That

Goodbody & Go. to

million

39

area

9,162,

this

tive to develop these newer fields

distances in which sea power can-

bases

*

winning the

production.

the powers to

States

United

Sea

in

year

destroy produced more steel than all of
Russia. Soviet Russia in the year 1950 and
That means the power of her steel they will do the same in 1951.
If
mills, her munitions plants, her oil just turning out steel was all you
refineries, her oil wells, her power needed for national defense, the
dams, her railroads. That is the battle of production is in the bag.
only effective way in which the
But that isn't all. It is impera-

be

war.

applied to the

as

whole.

a

Industry

Business failures totaled 679 in December, last, being slightly
the previous month's level.
The year's total aggregated

and

war

right, now tell me how many ingot firm's newly opened office in St.
the other whether it tons of steel were produced in the Petersburg. Fla.

or

possess

not

of

volved

the industrial potential of

,t

electronics

come—I'm not predicting

way

will—but if
I say

an

must at all times maintain

we

clear superiority in these fields of

how

me

machinery

all-out

to

were

the

at

of-

my

other

steel authorities

some

up

the

that

shoulcj^be done

throw

the

Europe.

if

But

and

Eisenhower

the

and

it involves I want to drive home

-draw- many jng0t tons of steel were
thinks procjuce(j jn Soviet Russia in 1950?

of what he

his blueprints

see

involves

top of the list of the things that

Eisenhower to speak and to

Western

what it

and

as

■.

below

thing Amer¬

today is to
win the battle of production.
I
tried to indicate why that is so

year

"

gain average $1.77.

do

can

this point—to win the battle of
we
must
recognize
techniques production

is

saying this I am not commenting
pro or con as to the Atlantic Pact.

wrench

business

ican

the

•

over

index

weapon,.but
ability to deliver it.

the

for

$8

,'ii'

\

\

hourly earnings were an average of $1.54, up by 13
the year and typical work weeks rose to 41.6 hours in
mid-December, up almost two hours for the year 1950.
cents

also

in

' r

.

of

Gross

construct that sort of

.

it

■,,

December

what

11
is only as steel is wrapped up
in
ultra-scientific

.'

'.

to

excel in those directions. I have Pittsburgh of the United States
confidence that we can do of America must develop the
this.
But the final
proof of power to destroy the Pittsburgh
It will
whether we succeed or fail in the of the Ural Mountains.
battle of production is going to have that power only in so far as
be in the realm of electronics.
we keep a superiority in advanced
Let me bring this down to local science, in the ability to deliver
color.
Where
does
Pittsburgh destructive power at long range.
stand in this battle of production? That is the challenge to this com¬
This is a steel center, among other munity and I have no doubt that
things. You are making steel here this community will respond to
practically at full capacity. You that challenge.
have plans to expand that capacAs a final word and as a key¬
ity further. When you are making note I started out
by saying that
all the steel you can make, what the most

the

'

increase

an

vantage not only in the ability to

every

J'0" have already won
1" of production,

1

5

page

The State oi Trade and
1.'r'

ground.
And it is part of the challenge to Pittsburgh.
It is a
genius of the American pepole to challenge of this kind—that the

of Production?

from

to succeed.

.
..
,
of this day and age that it fights
equally in the vital a war ^or
y0u. You have not yet
national interest that the United won
advance(j stage of the
States should not be engaged in a battle of
production.
major
land
war
in Europe in
You have industries 'here that
which the enemy
is Russia.
In are leaders in the field of science,
A

And

i

happen—a major land

will not

in steel production, in¬
technology generally, in
electronics, whether this is going
up

dustrial

World War II.
Superiority in the ability to de¬
I
see
no
reason
why | we
liver it will
be determined
by
shouldn't proceed effectively in*
this field. Certainly we have the superiority in the field of elec¬
tronics in the years ahead.
scientists for it.
We have the
The battle of production is a
engineers.
We have the back-

interest that'

vital national

the

major

a

in Asia. So clearly is it

war

catch

be much greater in the next two

more can you

•

And today

Continued

whether this attempt of Russia to

result of years than it was in any time in

a

as

costly mistakes, this country

some

the

Pitts¬

It is not entirely a false
analogy.
But 1 the
question
is

maintain

can

in

new

superiority
over
the
potential
Winston Churchill has said that
enemy in this application of sci- the
only
force
that, has kept
eqce to war production.
Stalin from attacking us thus far
> To win the war of production
is the knowledge of our advan¬
means to win the war of electage in the atom bomb.
I accept
tronics. This is an electronics war. that as a true statement.
We
The amount of money spent per must continue to
keep that ad¬
man in unifrom on electronics will

hard school

that in the

see

it

whether

see

the

as

25

burgh.

is going to be the
modern -applications of science to most important new thing in the
production for defense. Those are art of war—in the period ahead
the top notch war orders for any of us. In this way science will be
business that is qualified to obtain brought to
bear and American
them at this juncture
in world business will be given a chance
things get

developments

Ural Mountains

above all countries.
orders in the ultra'Electronics
but

war,

(545)

reported for the corresponding period two years ago.

Carloadings Trend Mildly Lower for Week
Loadings of revenue freight for the week ended Jan. 20, 1951,
totaled

779,816

cars,

according

to

the Association of American

affiliated with Waddell &

Reed, Inc., of Kansas City, Mo.

Continued

on

page.

26

The Commercial and Financial Chronicle
£G

.

.

Thursday, February 1, 1951

.

(546)

Sales in the ten markets were
against 223,900 the previous week, and
263,600 in the corresponding week last year. Cotton textile con¬
tinued active and strong.
A number of government invitations
for bids on substantial yardages of goods have been noted in
somewhat slower last week.

was

25

Continued jrom page

Industiy

The State oi Tiade and

Auto Output

Edged Slightly Above

Previous Week's Level

production in the United States

Combined motor vehicle

output.

above last month's

week was made up of
30,263 trucks built in the United States and a

and

cars

6.703

126,73_
total of

Canada.
States alone, total output was 156,995 units,

and 2,478 trucks built in

cars

United

the

For

for the current

output

against last week's revised total of 153,442 units, and in the like
week of the last year 133,466. Canadian output in the week totaled
a

year

7,570 units

8,963 units a week ago and

9,181 units compared with
ago.

Advanced to Highest Point Since

Business Failures

August Last

week
ended Jan. 25 from 167 in the preceding week, Dun & Bradstreet,
Inc., reports. Rebounding to the level of two weeks ago, casualties
were higher than in any other week since August last year.
De¬
spite this increase, failures were less numerous than in the com¬
parable week a year ago when 232 occurred but they exceeded
the 136 which occurred in 1949. In comparison with the similar
week of prewar 1939, casualties were down 50%.
Liabilities of $5,000 or more were involved in 143 of the
week's failures.
This size group showed an increase from 127
last week but remained below the total of 176 a year ago. Small
casualties, those having liabilities under $5,000, rose to 50 from
40 in the preceding week but were slightly less numerous than
industrial failures rose

Commercial and

last year when 56 concerns
All industry and trade

to 193 in the

failed.

in 1950. A milder
decline from last year's level took place in wholesale and retail
trade, whereas construction and service casualties were above
a year ago.
'
' v
.
"J
Five of the nine major regions reported a rise in mortality.
Exceptions to this increase appeared in the West North Central,
South Central, and Mountain States where slight declines pre¬
vailed. The Middle Atlantic Region was the only area reporting
from 37 and were

than last year.

failures

more

only one-half as numerous as

Wholesale Food Price Index Moves

though mild advances resulted in a further mod¬
Dun & Bradstreet wholesale food' price index

Numerous

rise

erate

last

The number

from $7.04 on Jan.

rose

stood

when it
$5.78 of

The index represents
31

in

foods

general use,

the sum total of the price per pound of
and its chief function is to show the

general trend of food prices at the

Wholesale

daily

wholesale

year ago.
Grain prices were

reports
Trading in futures increased on the Chicago
Board of Trade; sales totaled 251,269,000 bushels for the week.
This represented a daily average of 42,000,000 bushels, against
40,500,000 the previous week and 28,700,000 in the same week
Flour

varieties

prices

was

held

in

narrow

a

dull with most

users

range.

Trading

in

bakery

said to have considerable back¬

Cocoa values were steady and firm with buying
further reselling of cocoa to Europe by United

logs

on hand.
stimulated by

States interests.

at times

as

finished

slightly higher but showed some hesitation
awaited developments in the price control

the trade

There

trade shows continued

as

sharp drop of

week ago.
in lower lard prices for the first time in four weeks.
a

remained

strong with hogs, steers

further slgiht advances

a

new

Livestock

and lambs recording-

for the week.

Cotton resumed its upward

early weakness,
at

by

Activity during the

lar

of the

The
ular

similar 1950 level.

increased approxi¬

increase of 31%

an

course

The

In the preceding
registered above the similar week

was

recorded over that of a year ago, and for the year to
volume advanced 2% from the like period of last year.
was

of
date,

Jr.,

Godfrey

and

R.

Parkerson have become associated
Waters

with

Building,
Orleans

&

Alcus,

members
and

of

Whitney
the New
Ex¬

Stock

Midwest

Mr. Parkerson was for¬

changes.

Following-

drew

offices at

Strength in the market

a

ANGELES,

Kimball

Kimball

attributable to

uncertainties

somewhat better than expected, totaling 41,300 bales per working

compared with

daily rate of 41,200 bales for November,
Activity in spot markets

day,

as

34,900 for December a year ago.




a

He

Kimball & Co.

Broward Boule¬

E.

are

Andrew

at

650

was

for¬

Baker, Chairman of the

R.

New Bulloch Branch
(Special to The Financial Chronicle)

SAN

vin

FRANCISCO, Calif.—Cal¬
a branch
Building. Rob¬
will be associated

Bullock has opened

securities

business

from

offices at 1228 South Flower Street
under

the

& Jones.

firm

name

been

The

a

year

in

ago,

amounts

G.

Hurt

of

Cole

has

been

re¬

of

gain

$8,000,000,000,

reach

to

the

or

compared with

as

48.5%.

ties

of

municipal

and

showed

little

to

assets

of

holdings

Meanwhile,

corporate

S.

$10,900,000,-

to

53.2%

from

U.

declined

securities

$550,000,000
or

of

holdings

year,

securi¬

change, while

holdings of cash fell $80',000,000.
The December

gain in mortgage

holdings reached the record total
$194,000,000,

of

in

contrast ?to

earlier

and

November.

For

year

a

$149,000,000

in

the

consecutive

eighth

holdings

of

contrast to
000

in

S.

U.

obligations fell
a

month,

Government

by $53,000,000, in

decline of $142,000,-

November

$37,000,000

in

and

a

December,

of

gain

1949.

F. I. duPont Branch
(Special to The Financial

LOS

the

in

had

record

a

office in the Russ

Cole & Jones
ANGELES, Calif.—J. Byron
Cole and Allen Jones are engaging

1950

B.

with the new office.

in

of

$82,000,000.

than

for

$111,000,000

ert

\

000,

Board.

W.

L.v

offices

gain

gains

comparison with the

Government

Vice-President;1 Mrs. G. M. Baker,

Calif.—Lester
formed

with

from

President; Jos. I. Rutman,

Knox,

(Special to The Financial Chronicle)
war

report of cotton consumption for December was

and

Co.

has

South Grand Avenue.

year agp.

was

and reports of dryness in the Western part of the cotton belt.

The official

LOS

W.

207

Officers

vard.

business

securities

the

in

Alvin

L. W. Kimball Co. Formed

spot quotations at New York moved higher to
record high of 45.58 cents a pound, comparing

with 32.08 cents at this time

Fla.— An¬
B. Knox & Co. is engaging

FT. LAUDERDALE,

Secretary and Treasurer; and Col.

-,

.

months

35.8% of assets

(Special to The Financial Chronicle)

Chronicle)

La. —Arthur

ORLEANS,

Waters,

in

year

loans,

over

C.

the

30.1% when the year opened. Dur¬

Andrew B. Knox & Co.

With Waters & Alcus
NEW

December

roughly $1,600,000,000 in mortgage

ing

merly Vice-President of Leimert-

the past week.

respective

markable

For the four weeks ended Jan. 20, 1951, an increase

(Special to The Financial

with¬

deposited.

important role.

advanced 24% from the like period of last year.

of 1950.

1949

withdrawals

in

According to the Federal Reserve Board's index, department
store sales in New York City for the weekly period to Jan. 20, 1951,
week

in

corresponding month

Hard goods were
responsible for the higher trend, with higher prices also
an

during

November

the

$230,000,000 and

mately 25% above the like period of a year ago.
mostly

in

higher
and

greater.

deposits

increase,

York the past week

1949,

December figures reflect a greater

advance of 5%.

in New

trade

13%

$88,000,000;

For the year to date department

5%.

gain of $189,000,000 in reg¬

continued

the

or

has been

year

8%

were

in

than

drawals

This com¬
similar increase in the previous week and for the

store sales registered an

of

upsurge

Amounts deposited in regu¬

•

accounts

1950

1951, advanced 31 % from the like period of last .year.

20, 1951.

absent,,

were

rapid

gain had been $887,000,000,

Department store sales on a country-wide basis, as taken from
Federal Reserve Board's index for the week ended Jan. 20,
a

the

wartime had subsided, the deposit

impending shortages helped to accelerate the booking of some
commodities. The number of buyers attending wholesale centers

four weeks ended Jan.

eco¬

and despite the

conditions

although

high.

increased somewhat and was slightly above the

general

and

In 1949, when such dis¬

reported.

turbing

country; the total order volume was considerably above the level
for the similar week a year ago.
The anticipation of alleged

the

affairs

quarter

unsettlement in

buying rush that has been widely

+10 to +14 and

be featured in various parts

to

in deposit

the third

nomic conditions,

noticeable rise in wholesale ordering in the week

was a

Savings,
gain oc¬

This

despite the lag

that accompanied

+7 to +11; East and Midwest +8 to +12; South

+9; Northwest +9 to +13; Southwest
Pacific Coast +12 to +16.
to

(Special to The Financial Chronicle)

slightly firmer following the rather
Liquidation and profit-taking resulted

Inst i tution

I.

R.

growth during

above a year

Regional estimates varied from the levels of a year ago
percentages:

New England

+5

Raw sugar was steady to

close

curred

housewares,
types of furniture was desultory, while outdoor items
in frequent demand.
Total retail dollar volume in the period ended on Wednesday

these

and

Providence

Kelley

Providence,

some

ago.

Savings
ks

a n

for

and bedding were

program.

markets

A. Livingston

markedly above the levels

be lrom 9 to 13%

Na¬

President,

foreign

to

the

tual
B

estimated

Kel¬

President

ciation of Mu¬

appli¬
television sets and floor-coverings. The interest

merly with Beer & Co.
Coffee

half, accord¬

tional Asso¬

Among those lines registering large turn-overs were

from the Southwest.

last year.

century and

a

of

Wheat displayed strength despite better crop

recent weeks.

a

ley,

of the comparable 1950 week.

was

s-

ing to A. Liv¬

level of house-furnishings purchasing rose mod¬
erately last week, as some shoppers were inclined to obtain items
constructed of reportedly sealce materials.

week

h i

ingston

The general

last

time

tory of almost

fresh fruit ana-frozen and canned produce.

of

first

these insti¬

tutions'

staple items, the dollar
volume of food purchased at the nation's grocery stores increased
slightly the past week. The unit volume rose somewhat for pork,

in

increased

the
in

Largely through price rises in some

26%

irregular with most grains showing a slight
corn was less aggressive than in

banks

529

or

slightly.

Both dollar and unit volume were

'

'

4%, during 1950, to
the $20,000,000,000 mark for

cross

Demand for

rise for the week.

savings

$744,000,000,

,

rose

at

are

nation's

sold was moderately above that
for last year.
Hosiery was in noticeably increased demand in
many vicinities, as was nylon lingerie, accessories and knit-wear.
While the interest in
popular-priced dresses was largely un¬
changed from the previous week, some styles of formal dresses
were
increasingly sought.
Dollar volume of men's and boys'
worsted suits

$744

v,

the

country; total volume of apparel

playing

commodity price index, compiled by
Dun & Bradstreet, Inc., continued to rise during the past week.
It closed at a new all-time high of 323.65 on Jan. 23. This com¬
pared with 320.92 a week ago, and represented an increase of
31.8% over the 245.25 recorded on the corresponding date a
The

mutual

•

in

buying of outerwear and other winter apparel increased
somewhat last week, as cold weather came to many parts of the

Retail

All-Time Peak

now

The

wholesale level.

Commodity Price Index Rises to New

outstanding

Deposits

and total retail
above the level
for the corresponding period cne year ago, Dun & Bradstreet, Inc.,
reveals in its current summary of trade.
While the prevalence
of seasonal weather was considered to have encouraged shoppers,
upward price adjustments and a fear of future shortages were
deemed instrumental in creating high dollar sales in scattered
,

aggregated

Savings banks' mortgage

;

continued to increase their spending

the

areas.

Mutual

of

$8 billion.

period ended on Wednesday of last week
dollar volume, as a consequence, was appreciably
in

1950

in

leans

by Higher Prices and
Impending Shortages

nation's consumers

The

pared with

year ago.

gain

million.

Increased Dollar Volume Aided
Fear of

Association

Savings Banks, reports deposits

corresponding date a year ago.

16 to $7.08 on

23, marking a new high level since Aug. 10, 1948,
at $7.18.
The current index is 22.5% above the

Jan.

a

the

in

week.

Moderately Higher

Livingston Kelley, President of

National

and the prospect of large
government buying for military and stockpiling needs. The aver¬
age of 25 domestic wool quotations rose to $2.15 a pound this
week, from $2.01 a week ago, and compared with 97 cents on the
at record prices

wool auctions

ances,

except manufacturing had an
increase; retail casualties were up to 97 from 82, wholesaling to
26 from 14, construction to 26 from 21, and commercial service
to 18 from 13. Meanwhile, manufacturing failures dipped to 26
groups

A.

previous week. There was good demand for all classes of
buying stimulated by continued strong demand in for¬

eign

and

"Ward's Automotive ReportsJ
totaled 166,176 units, compared with the previous week's totar ol
162,405 (revised) units ard 141,036 units a year ago.
The agency estimated January output would total 500,000 cars
and 128,000 trucks.
The car figure is almost identical with output
In December, 1950, while the truck estimate is about 2,000 units

noted in the Boston wool market

wool with

week, according to

Canada the past

Total

Further sharp advances were
the

represented an increase of 160,6o3 cars, or
25.9% above the corresponding vyeek in 1950 when loadings were
reduced by restricted coal mining operations, and an increase
of 69,979 cars, or 9.9% above the comparable period of 1949.
week's total

Exceed $20 Billion

recent weeks.

of 3,209 cars, or 0.4% below

Railroads, representing a decrease
the preceding week.
The

Deposits of Mutual
Savings Banks Now

reported at 181,300 bales,

Chronicle)

Alvin F. Kramer

FT. LAUDERDALE, Fla.—Fran¬
cis
an

I.

du

Pont

&

Co.

has opened

office at 113 Southeast Second

Street under the direction of
erick J. Vieth.

Fred¬

1

Alvin

Eastman,
Jan. 23.

F.

Kramer,

Dillon

&

partner

Co.,

died

in
on

yolume 173

Number 4982

Continued

from first

.

.

(547)

The Commercial and Financial Chronicle

.

with Europe, then the four Ameri- cial ruin and would bring about the Swiss are and that their main

page

can

mm

-■

■

w

lYtPPllItfl KllSClfl
.

■

...

,

.

_

>

,

existence with the present Soviet

This

system is impossible.

the

is

||

LhAllPtKIP

%

H

yilliMVilJJV
AA.

,

„•

.

,

,

..

divisions already in Germany

correctly Churchill's thinking, he

i

i

.

t

the

have

second

more

the

.*»•»-*

«i«

r%~\ it/-l/%

4-Vs

*"v

+■ i am

11K

a# ino

purpose

we

attacki-

can

V

-f-rk I

prospect of being liberated
by the United States after huge

It

destruction

seems

obvious to me that it is the superiority of our air and sea power
which is our main asset in our
cold or hot war against Soviet

communism.
s.
——.-l
.

' r.....

.

..

...

what

is

I

call,

think, the Churchill policy, also
shared,
I believe,
by Bernard
Baruch.
This policy is based on
the fact that the United States has

rt

— _
French

(III) The most complex assumpthe one which is at the

Eurooe.

where between 60 and 80

to

come

tion is

sions. If it can bolster European
morale and can induce the Atlantic European countries to rearm
speedily we should maintain 10
to 15 American divisions on the

them

■

_

•

_

afraid

and also because
that German re-

too

are

infiltrated with

com-

munism to form reliable armies

"jo

terms

°* power. The main aim of thus armies which can be stationed in Russia.
P°licy. ba?ed 011 the Atlantic Pact, Western Europe. Nobody in Eu(V) As
to avoid war, and to prevent, rope really believes that an army defensive

The so-called neutral-

ists argue that France and Italy

munism before

(III) The third assumption, underlying'the Atlantic Pact, is one
of creating a balance of power

.

reasons,

are

divi- hito war.

3ay this is not to say that European continent.
with Soviet com- basis
of
our
adopted
policy, the 'defense' of Europe
in the
(IV) We should not rearm Gerthey have built up namely,
the
rearming of the sense of an ability to repel the many; the bargaining-value of not
a large stockpile of their own of
United States and of Western Eu- Red Army — depends solely, or rearming Germany should be used
these fearful engines.
rope in order to create a balance even decisively,
on
the ground in the proposed negotiations with

and

not offer

yhe so-called neutralists believe that Western Eu~
rope cannot be defended without
a strong German army which they
do not
wish -• for
well -f known
*
1 ' t
'

armament might provoke Russia

WW

Bcuuus-cuvii

cad Churchill s policy implies, of ^jie mjf^ary power of Western
course, the risk of going to war if ■gur0pe and to pr0ye our own
a settlement cannot be reached soiMarity with the fate of Europe,
before the Russians nave made a .g essen^ai not ordy to
sul-_
lai'Se stockpile of atomic bomhs.
vjvaj
to the rehabilitation of

large stockpile of atomic bombs,
on
the hope that we may

a

txiat

......

.

.

might

we

does

any comfort,

they

This

is to avoid a new world

The

or

counterattack Russia if she should

understanding of the issues raised invade Western Europe.

as-

i

_

which

from
even

is .of the opinion that we should ky the policy implied in the Atsumption that Soviet communism build
up
speedily our armed lantic Pact, Mr. Walter Lippmann
will continue to expand and will strength and then, when we can writes in the ''Herald-Tribune" of
endeavor to dominate the world, speak as equals, try to reach some Monday, Jan. 29, as follows:
at least until such time as we shall kind of a settlement, which might
wav or another General
We

form of totalitarian govern-

some

should suffice at least as long as ment in our own countries.
war. They feel strongly that if a
our atomic bomb superiority serves
(II) We should rearm the world war should break out,
as-the real deterrent to prevent United States and build positions Western Europe will be unable to
Russia from attacking Western of strength outside of Europe prevent its occupation by Russia,

late a sufficiently targe stockpile Europe. •
ot atomic bombs.
If I interpret
As if to confuse

lirst assumption.

(II)

27

against Soviet communism. It is
also their view that the Atlantic

Pact which came after the Marsha11 Plan §ave substance to the
communistic propaganda that the
Atlantic Pact European countries
are considered by the United
States only as their stooges and

the European }ilat Athey.are asked to tight for
is ready, and weAmericans, that in the view
which will induce the Soviet rul- d
possible, the occupation capable of defeating the Red have brought our own military ? ■
® masses the present conflict
ers to lay aside their plans to take
Western Europe by Russia. Army can be assembled quickly strength to a state where we can jsmamly one between Riissia and
over the world
This policy assumes implicity tne in Europe. Every one who has wage war if necessary we should
Lnited States and that inter-

fLT two assumptions imply

The
the

deliberate

war

if

n'olicv

a

WorlH

new

a

look

nc

to

of trvinc* to

War

Russian terms than
Let

goi^

of

while the third

necessary

assumntion is
avoid

risk

at

at

closer

at

morp

ours

these

as-

sumptions and what they mean in
terms

foreign

nf

nolicv

mili-

flnH

Possibility of coexistence with So- looked into the situation realizes
viet communism provided there that the armies of Western Europe
is a balance of power'
wil1 long be very much weaker
For tbe time being there seems than the armies of the Soviet orto be some sort of a balance be- bit, and that these Western armies
tween the military strength of can be formed only if—for other
Russia and that of the free world reasons and by other means—the
based on the fact that Russia hasagainst6arFJnvaslon

tar^preparedness
p

p

Suggested iermg in that fight the small

seek the opportunity
by Churchill to reach with Russia

some kind of a settlement which

should include the liberation of
But how do they explain their
the Eastern European countries, contention that the policy they
Eastern Germany and a policy of advocate would avoid war? In a
controlled disarmament. •
nutshell, it is that there is pres-

effective superiority

are

called

the

while

immense

in''what
to destroy the European
arms," before they are of any

"conventional

military importance.

United States has an
superiority of atomic

and

exaggerated

"The

armies,armin|^£13^^

serious five to 10 years as
suggest. We should

our

It

constant acceptance
all-out war"
adds

of

thise

'•Life " It is the hooe of
take this view that if

determination

necessary

viet
and

the

to

So-

change

imhle

rr

Lite

'

be right or wrong
assumption and in its hope,

its

m

start

emmremav

to

who

show the

we

may

Personally, much as I hate comits destruction,

maintenancepossibly

ipr^long deemed

garrison-state AJAderstand tne .real reasons

years of a kind ot

the relationship

think that
Nazi

tween

Russia

least

Soviet

and

indication

an

coexistence

the

that

Germany

at

is

be-

Qn

the

of

world with Soviet Russia

is

free
pos-

Bible if the free world is militarily

strong enough to reach some kind
of
livable
settlement.
But one

ization and stockpile of atomic
bombs to reach at the risk of war
some kind • of a liveable settlement with Russia, which should
include above all, controlled disarmament.
. .
,, ,
.
* *
* .
*
Isolationists and Neutralists v
x left out
my discussion the

American isolationists position as
formulated by Mr. Hoover and

that of the French so-called neutralists because they have one
fundamental weakness in Common, namely, they don't explain
how we prevent Russia from grabjng Western Europe with all its
vast industrial, human and scien-

mans—is that this is essential in tific

land

order

Question of Western Rearmament
»pjie

people

on

mense superiority in the organ-

both
the United States and in the pollcyWestern Europe. It further im"The real reason for rearming
that Russia wil1 Sive us the the Western nations; for organizRme
rearm Western Europe and ing an Atlantic army with an
will not be afraid of our building- American commander, for enlargp
land
u.forces and armed strength ing our own forces on the Eurojn Europe t0 a point which might pean continent—and for rearming
depri^ Russia of her superiority in any form at all the West Ger-

munism and wish
I

some

the conhighly trary take advantage of our im-

misleading idea that the defense
idea that the possible coexistence
of Euiope depends on these
with Soviet communism is a perarmies, including our few divinicious fallacy.
It assumes that
sions, is the product, I believe, not
"Soviet communism will continue
of an objective estimate and a
to
exnand
unless it
is onnosed
considered policy based on that
with all
strength and all
stockpile of atomic bombs by So- estimate. It is almost entirely an
mind andall Wwm^as"Lh^viet communism.
Such a policy, attempt to 'sell' a good idea to
nuts it "'That ineludes'the steadV
if at all realistic, implies the Congress and to a people who are
risk

p0ijcy 0f rearming Western

to

restore

resources.
Mr. Hoover seems to think that

inner stabil-

the

ity, the national self-respect, the

as

diplomatic weight, the sovereign

ern

long

as we

maintain this West-

Hemisphere militarily strong

authority and independence of the and economically healthy we can
great nations of our Western so- with our own air and navkl forces
It seems certain that Russia is ciety. This effort, which is more "hold
the Atlantic and
Pacific
afraH Gf a rearmament in Ger- one of reconstruction than of sheer Oceans with one frontier in Brit-

Europe

raises

a

few

more

ques-

4

a

tions;

defense, is something that has to ain (if she wishes to cooperate);
he done in Europe is ever to be the other on Japan, Formosa and
anything but a satellite continent, the Philippines. We can hold open
of
stand
a
Russian attack without the Eastern half under the domi- the sea lanes for our supplies
implies total mobilization and a rearmjng Germany. Assuming that nation of Russia, the Western half to do this we should arm our air
speedy rearmament in order to Vve renounce the rearming of-Ger- a
dependency of the United and navai forCGs to ihe teeth
have a showdown with Russia beorder to avSd what the States."
;
_
fSheraiy«
The assumption
the impossibility of coexistence
is certain.

thing

It is questionable, howwhether Europe can build up
strong enough to with-

many.

ever>
an

army

.

will Europe be able
to build up a sufficiently strong
defensive army before Russia will

Mr. Lippmann s interpretation
of the idea of rearming Western
Europe seems to me too involved.
r^be opinion of military experts is

Russia already has have manufactured a large slocklarge land forces and an effective pile of atomic bombs which would
superiority in what are now called permit her to terrorize the free
"the conventional arms."
Such a world?
The Europeans insist on
policy may bring war at any mo- our sending at least ten more

deterrent power
of the American air and sea forces
^Y111 Probably b<~ able to PJ*ev®n]
fne occupation of Western Eu op

sufficiently

fore she has made a

which would enable her to terror-

ize

Russians might consider a provo-

stockpile of atomic bombs cation

large

the

should

One

world.

free

to war,

^uS!Ye European army

not forget that

ment

we

or

the Russians choose.

The Churchill

(II)

policy sug-

gests that some kind of a settlement with Soviet Russia should
be

sought

soon

as

opportunity

as

presents

that efforts to reach

a

a suitable
itself, and

settlement

should be made while the menace
of

the

immeasurable

superiority
of the U. S. atomic bomb organization offsets the Soviet
nance

predomi-

in every other military re-

This policy assumes the
possibility of coexistence of the

spect.
free

world

munism,

with

but more

Soviet

at

com-

terms
Y

our

than at theirs.
It

seems

to

that from

me

a

mili-

tary viewpoint this assumption
implies also a big and speedy rearmament so that we might be
able

to reach

the Russians

a

settlement before

are

able to




e^ystrength0of*RuSia
and^hai
stiength of Russia and that

an

organization and stockpile,
The policy which has been adopted
boils down to a race between rearmin§ the United States and Eur°Pe wit*1 conventional arms, and
the manufacturing of a large

the

^he 0nly policy wbich doesn't

overwhelming land army and 1S persuaded against an invasion ma^e any sense to me is the re- *ary

(I) The first assumption is the bomb

calm and

countries, including France, can
only be crushed,

an

Military Implications of Three
Assumptions

our

soon as

army

accumu-

American divisions to defend Eu-

w

.

by 1 e Russians'

^

that Russia has an overwhelming
land army, while the United States
has an immense superiority of air

and uaval forces and of atomic
bomb organization and stockpile>
They feel that if Western Europe
(including Germany) would be
rearmed to the point where it

might deprive Russia of her superiority on land, she would declare
war before such a state of affair*.
becomes an accomplished fact,

if,one

^ one grasps immediately the

weakness of their argument. How
wou'd. they prevent Russia from
grabbing Western Europe when
she will have made a sufficient
stockpile ol atomic bombs which,
together with her overwhelming
land £orees .wiu. destroy the presume(f existing balance of power

which preserves Western Europo
presently? Their answer is that
European nations should build up

strong national armies on tho
model of the Swiss which would
be psychologically better conditioned to defend their own land
and homes.

1 have endeavored to explain

as dearly and objectively as X
possibly can the position of tho
so-called neutralist. It seems to
me unrealistic for reasons just

given. It must be said in lairnesJ,
^wevev that to a certafa extend

(western Europe) must express the weakness of the position de-*
itself in organized and equipped feuded by the neutralists is tho
Combat divisions of such huge same as the one one detects m
llumker3 as would erect a sure unslyzing the assumption underdam against the Red flood. And
the Atlantic Pact. The more
^at before we land another man one analyzes the various reasonsr
or another dollar on their shores." proposed
to meet the Russian
Mr. Hoover does not explain challenge, the more one reaches#whether the United States should tbe conclusion that the realistic
abandon Berlin and whether it answer is what I called above ths>

withdraw the American Churchill policy.
■
divisions now in Germany. Neither
does he explain )vhether we should Now Coleman, Fagan & Co,
abandon the Middle East and all
the European and Middle East
Coleman & Fagan, 2 Broadway,
bases for the strategic bombers.
New York City, members of the
■
New York Stock Exchange, anNeutralists
noun^e.that Jack C. Louis, a memThe Position of the French so- ber of the Stock Exchange, hasi
called neutralists, as I understood been admitted to the firm as a
from conversations I had with general partner, and that the nama
some of them> is more sophisti- has been changed to Coleman,
cated. It may serve our enlighten- Fagan & Co.
ment to understand their views
despite the basic weakness menWith Sterling, Grace
tioned above which it has in com,
,: ,
.
forces if they should attack before of five to 10 years seems to me mon with American isolationists.
Sterling, Grace: & Go., ou^Eroaa
the western world has formed and absurd.
Leave aside the doubt
First, 1 was startled when those Street New Yoik■ Clty»JMembers
that the democracies, - including who are known as neutralists pro- of the New York Stock Exchang ,
e<lulPPed
least 60 to 80 dm- our Qwn^ c0ldd stanci morally for tested against being called neu- announce that Messmore Kendall,
sions. If the American troops are 10 years a garrison state, and I am tralists. They said that they are Jr., is now associated with tneuv
only a guaranty of our solidarity certain that it would mean finan- neutralists in the same sense as as a registered representativ .

while we and Western EuConclusion
*
rope are rearming. As long as we
Are there anv oractical conclumaintain our atomig bomb supe- sfong We may ^raw from the above
riority it is probable that Russia
,yth varimns a^nmnwill hesitate to attack Western f.
y d1i
thinking in
Europe. But this will not be be- fh fi ht a0ainqt Soviet communcause of the ten additional AmeriLet me
can divisions but because of the
t \'
fuem a«? thev occur to me*
atomic bomb superiority. Many
m Under anv one of the above
Europeans maintain that then, 15 th, ' assumr)tions it is imperative
American divisions in Europe will th t we sh0uld arm Western Eubolster the courage of Western rope and particularly ourselves at
Europe and will strengthen their thg greatest possible speed, by
will to rearm and fight. But again, which j mean no more than jg
ten, 15, or 20 American divisions months to two years. A policy of
are no match for the Russian land rearming-at leisure over a period
rope

.

,

.

.

,

on

a-

•

should

rri

.

.

28

The Commercial and Financial Chronicle

(548)

the

Utility Securities
By OWEN ELY

American &

Foreign Power

Electric Bond & Share
American

&

Foreign Power has recently filed with the SEC
a new recapitalization
plan, superseding the plan of 1947 which
failed of consummation. The new plan follows the general lines
of the

old, but the allocations

$7 Preferred
$6 Preferred
Second

Old

New

$110

$90

100

80

-

Common

Stock

Brazilian subsidiary

1.5

2.9^

.375

.65

.02

.02

The pro forma capitalization of the parent company would be
follows, under the new plan: $50 million, 5% debentures (now
outstanding); $67 million, new 4J/2% junior debentures; $10 mil¬

Electric Bond &

Share

securities

owns

We will have to get J
the money from those individuals
;
and businesses who receive it in

relationship to the

With the improved

need

The total

$279 million

investment

carried

was

on

its balance sheet

resources are

jrom

(with

reconstruction
forces

Under the old plan, Bond

its

debentures). Electric Bond receives

no

stock

common

new

How much will the
the

some

if

I

new

common

that the future

stock

fund* which must

may be $1,
out

annual

dividend

rate

with large utility holdings in Brazil, sells in Canada around
$2, to yield about 8.3%.

pany

How

should

The old 5s

the

new

debentures

be

appraised

marketwise?

are

around 98, and allowing for the lower interest rate
the new bonds might
currently be worth about 10% less or 88.
While they are junior to the old
5s, they are supported by sinking
and improvement funds.
Moreover, there is some possibility that
the

over

next

two

three

or

years

the

old

5s

be

may

redeemed

through proceeds of sale of the Argentine properties, in which
event the 4V2s would become a senior
security.
Taking 88 for the debentures and 13 for the new common,
estimated prices would work out as follows:
$7 Preferred

JBG

$126.00
The

Preferred

2nd Preferred

$108.00

$8.50

$0.26

position.

Electric Bond & Share's
breakup value may now be estimated
roughly as follows:
' „•
:

Amount
per

72/100 of

a

55/100 of

a

share of Foreign Power new
share of United Gas at 22
Ebasco Services at about five times

at

common

earnings.

13

___

Estimated cash and marketable
securities less liabilities
Total

What

_______

are

the

there has been

...

Share

.,

the

and

be avoided, I believe,

competitive

and

Any attempt to do

to

provoke

standing

great

so

aggression

armies

cannot

is

oi

;

should not

We

mitment

to

make

the

use

any

Such

commitment offers

a

protection.

We

initiative for

must
of all

use

first.
us

no

the

retain
our

weap¬

including the atomic bomb.
defense preparedness pro¬

ons,

Any

gram may
but

mean an uneasy peace,

will

it

Russians

as

be

as

for

us.

should

I

like

for

uneasy

to

now

the

discuss

fully the inflationary prob¬
related to fiscal, monetary,

as

In

broadly distributed.

dollar earnings.

military and foreign policies
successful
if

world

and

Four countries served by the Foreign

currencies"-Cuba, Venezuela, Panama

a large crop are improving the outatmosphere has also improve^;

the political

*F,°reiST Power's bank

loans

are

to

fundTchar/eUsn m^ntTin^S t0.operate'
3

interest.

lareelJHto rlfcC»kJ'LTning*

be paid




serially

service

are

to

charge thereafter

the,- 12 months ended

V depreciation
policy and
Calendar
year
figures

off

Vth additional sinking

a

expected

1954

or

In

1955

improvement

when

SeP4- 3»th

combined
™as

smaller credit for interest
to

make

a

better

maintaining

permit inflation to

we

strength of

thing.

In
a

as

our

its

is

early

certain

peace

the

sap

democratic

Inflation

insti¬

insidious

an

stages it

can

exhilarating effect.

it proceeds it will operate

destroy

free economy.

our

masses

a

In¬

injustice

grave

of people.

on

It injures

due
on

comparison.

aged, the pensioners, the
widows, and the disabled, the
most helpless members of our so¬
ciety. It diminishes the desire to
work, to save, and to plan for the
future/ It

causes

unrest

dis¬

and

sension among people and
weakens
our

thereby
productivity
and

hence

our

perils

the- existence

defense

system that all of

effort.
of

our

It

the

im¬
very

efforts

are

designed to protect.
We

must

problem
is

more

bracket, the increase
begin there,starting

that

our

of controlling inflation
complicated now than in
no

end in

sight for the necessity

of

main¬

very

expenditures

will

government

though.

non-

regular
with

inflation

on

cer-

People hold

an

that

being

be

increase

an

corporation
credit

some

in

income;:

allowance

part of income

disbursed

'

...

Everyone

will

which is /
dividends,
these /

as

subject

individual

to

in-;

taxes. We should also great¬

should

that

agree

our

creased

tax

pay

will

program

have

a

pay-as-you-go

the

borrow

to

to

make

the

from

nonbank

closed.

be

laws

tax

interest from new securities of

should

Al¬

ury

And

the excess funds avail¬
spending. In my judg¬

up

that

debasement of

further
the

if

inflation

destructive

and

the dollar

an
unbalanced
financed, were

of

policy

however

re-.

with Treas-,

recommendations, and . un¬
expenses and promotional,
advertising
outlays
made

money.

does

not

maintain the

who

morale of the

pays

competent

sufficient

have

give

to

sonnel

increase

enforcement

supply, but it adds to
of the public
debt and to the liquid assets held
total

in

his honest
loopholes must be
closed and tax enforcement in¬
tensified.
The Treasury
should

the money
the

promotes

share of taxes,

from banks creates
Borrowing from non-

sources

purposes. *

inflation, particucommodities, real estate

also

To

sequences

Borrowing

tax

other

are

lary

taxpayer

harness

bank

for

loopholes
should be closed. The present
there

and stocks.

of controls would
only postpone the disastrous con¬

new

al¬

be

capital gains tax is one of these
loopholes for tax avoidance. It

ment, it would be impossible to

the

per-,

strict

collection

tax

of

same

to

professional people, and
the
small
unincorporated busi¬
nesses as is now applied to other

farmers,

volume

by the public, thus storing up in¬ types of taxpayers, notably those
flationary pressures for the future whose entire income is subject to
under
present debt manage¬ withholding taxes.
ment policies. The money supply
Credit Restraints Needed
is already excessive, considering:;
the fact that it is being used

less

past experience. In addition,
the tremendous amount of other
is

credit

money

it

because

can

be

turned

into

prices and interest rates.
proceeds, the desire
to convert liquid assets

will

up

and then into goods
This
is what is
known as the flight from the dol¬
lar. The need to hold money and
money

services.

today
This

as

is

it has been in the past.
of improved in¬
and pension provisions

because

vide

for

Also—the urge to pro¬

the

contingency

of

de¬

and

monetary

and

measures.

corpora-*

continue

as

there

is

an

in¬

inventories,

particularly

of'

goods, to take advantage of
investment opportunities, and to

scarce

speculate
►

liquid assets is not as great

It

creasing effort to borrow to build

increases
into

face.

backed up by restrictive

squeezed by higher taxes, will try
to supplement their incomes by
borrowing. Other credit demands*

Government

and

itself is
inflation

we

tions, when their expenditures are"

Reserve

fixed

to

conditions

Many< individuals

under the present Federal
policy of supporting the
security market at

money

the

must be

held by the public
in many respects

assets

like

under

by
prevent

program

sufficient

with

liquid

tax

No

actively than it could be, compared

-

accordance

non-deductible

and

Depletion
greatly

should

in

duced

banks, there is no assurance that
borrowing could succeed in

avoid

-

governments,,

taxed.

be

lowances

or

local

and

State

such

for

-

source

loan associa¬

panies, savings and

usual

able

This

•

tions, and farm, labor, educational
and religious cooperatives, as well

though borrowing from the public
is
less
inflationary than
from

soaking

cor¬

Exempt income of insurance com^

will
up
its

public.

and

might provide as much as
billion in additional revenue...

$3

Government

deficit, either from the banks

now

increased

individual

on

•

and in¬

alone

provide

as

Without

non-es-

on". non-essentials,

rates

tax

income to those who are
engaged in it, but it will not
provide, a corresponding volume
of goods or services for which
this income may be spent.

program

all

on

porate incomes, it is especially essential that all loopholes in the

for it. The pro¬
duction of the goods and services
this

placed

subject to tax.
With
the
proposed

consumption and investment. This
is a physical fact that will not be
changed whether or not we tax
ourselves to

be

sential goods now exempt

military and foreign aid program
will
divert
large
supplies
of
goods and services from private

surance

they

should

the

tax

balancing the Federal Budg-

et.

for old age.

tainly should be.

There

the income scale.

up

least

to the very

as

1

*

way

come

defense expenditures are reduced

minimum,

;

all the

building
and
other
forms.
are

have

with a
rate of 25% instead of 20, and go
say

ly
strengthen
the
new
excess *;
profits
tax
law.
Excise
taxes •

other

large
even

as¬

As inflation

recognize

World War II. There is

taining

for

in- ■/"

quired. Since the bulk of the tax¬

possible to prevent inflation un¬
these conditions without at

are

most the

through the shortage of
Higher coffee prices aid
Brazil, Columbia and other counCuba,

in

flation works

Latin America
generally has benefited sharply by
conditions.
Chile gains

individual

der

plete

lose the fight against
totalitarianism even though
our

4.70

Generally speaking, the exchange situ¬

in

able income is in the first taxable

tremendous. It would be im¬

now

budget,

shall

to

&

increase

taxes should produce about
half of the additional revenue re¬

long continued. An over-all com¬

Why Balance the Budget?
We

loan

Potentialities

for

bomb

us

policies,
shares,
and

surance

money

com¬

atomic

only if it is used against

unparalleled amount of liquid

—

facing each other for
long periods of time, without war.
In any case, what*is the stopping
point of expansion and how do
you ever demobilize them?

1.90

as

rapidly improving.

construction
construction.

pay.

come

sets in the form of bank deposits,
Government bonds, equity in in¬

be

mobilized,

But

$28.00

.®e^e£ suSar Prices and

with

likely

have

Vargas,

Guatemala.

***

Asia.

or

12.10

prospects for future earnings of American
With the return to power of President

Power system have "hard

copper

be¬

threatening military forces in Ja¬
pan or on the continents of Europe

$9.30

discussion of a possible revision of
exchange
applied to nonessential imports and luxuries.
There has been no
indication that the
Vargas Administration
avors
outright devaluation or a lower value for
the cruzeiro,
where earnings remittances
are concerned.
However, if devalua¬
tion should
occur, rate increases would
eventually restore the

recent

areas,

worlds.

can

tutions.

some

rates, particularly

and

de¬

do not attempt to build up

we

great

Foreign Power??

is

as

and direct controls.

It is hard to account for the
present market values of the junior
of1 the new plan—unless
perhaps
there is an overcrowded short

ation

if

Ger¬

on

senior

securities, following publication

•

plan

Communistic

international

lems

preferreds are selling well below the estimated
breakup values, while the second preferred sells at
nearly twice
the appraised figure and the common at
over ten times as much.

balance

War

rather

Common

must

we

the

Western

making allowance for the sinking

24 and pays

that

they do not
to be the battleground for

of

the parent company's $1.44 earn¬
ings. Yield is the safest yardstick in estimating the price of a new
stock, though earnings are, of course, a factor. In recent utility
markets a number of equities have been
yielding %% and it seems
unlikely that Foreign Power (initially at. least) could do much
better than this. A price of 13 would mean a yield of
7.7%, and
14 would equal 7.2%. Brazilian
Traction, a Canadian holding com¬
come

Japan

or

and Japan developing

tween

the

on

Germany

fensively armed neutral

1946) had been estimated.

year

is estimated

It

than we would
reversed. I

were

seem

believe

many

earnings set-up under the new plan differs somewhat—pro forma
coverage for parent company fixed charges is estimated at 2.57
times and consolidated earnings for the new common stock at $2.59
(on a parent company basis $1.44). Under the previous plan, pro
forma consolidated earnings of $2.16 a share and parent company

$1.47 (for the

her

the defense of the Western world.

values" of $100 to the debentures and $15 to the new common. The

of

would

propose

securities be worth in the market if

by the SEC and a Federal court and
In approving the 1947 plan the SEC assigned "fair,

consummated?

military

great

any more

positions

our

It

new

of

will be parties to such a program.

plan is approved

new

to

distributed.

Western powers on

do not believe

3,750,000 shares

about 72/100 share for each share of

or

of

borders,

stock outstanding.

own

6

page

as

& Share would have received
some $8 million debentures and two-thirds of the new common;
under the new plan this is reduced to :56%% of the new common
of the

Government's

their ability

to

of Sept. 30, 1950, less a reserve of $200 million,
net figure of about $79 million or about $15 per share

a

and

this country income and financial

Our Defense Program Must
Prevent War and Inflation

Foreign Power as

of

9% of the first preferred stocks;
the second preferred; 39% of the common; and 90% of the

of EBS.

'■

subsistence.

An

follows: about $50 million, notes;

making

f

pay-as-you-go tax pro-

increases to raise $16 billion
will likewise have to be broadly

Continued

lion bank loans; and 6,637,000 shares of new common stock.

at

■

escaping the

Tax

as

warrants.

a

no

gram will increase the tax burden
of all who receive more than a

Warrants

85% of

be

can

fact that

Import-Export bank, and
foreign exchange
situation it is believed that the parent company will have little
difficulty in transferring a normal amount of cash to New York,
permitting dividend payments on the new common stock.
should be obtainable.

more

financing is done out¬

How to Raise Tax Revenues

There

sold

was

,

side the banks.

Some loans have been received from the

3.6 shs.

—

a

you can

inflation even if all Fed¬

an

eral deficit

internally to yield about 10%, and more could have been placed.

2.125 shs.

Preferred

in

million of common stock

$8

the

have

Latin America to

cash from

is

Under these cir¬

spend the proceeds. Thus

remittances from Brazil are normal. The big sys¬
considerably scaled down in 1950,
and successful efforts were made to raise some cash locally. About

New

Old

to bring

unemployment

the more liquid as¬
public holds the more
likely they are to cash them and

construction program was

tem

-—Common Stock—

—Debentures—

easier

much

now

and

cumstances

sets

above, the chances seem

New York, and

Allocation of New Securities Under Two Plans
".•/V. 7

is

It

somewhat modified as follows:

are

noted

Thursday, February 1, 1951

.

less compelling.

improved for future sale
of the Argentine properties to the Peron Government, now that
the country's economy is benefited by rising prices.
The invest¬
ment in that country is carried at over $100 million on Foreign
Power's books, but largely due to the expropriation of some of the
properties practically no income is received from this big invest¬
ment. Any sale of tnese properties would, therefore effect a great
improvement in system finances and earning power.
As

.

pression

reorganization of Foreign Power's important Cuban subsidiary
only the Argen¬

has been completed. From an earnings viewpoint,
tine and Mexican situations remain difficult.

Public

.

on

The harm to

the inflationary rise.
our economic stabil¬

ity
from
such
private
deficit
financing is at least as great as
that from deficit financing by the
government.
In fact, the whole
postwar inflation, and particularly
since the Korean outbreak, has

Volume 173

Number 4982

.

.

The Commercial and Financial Chronicle

.

K 3549)
been

due

to

private

government
form

one

must

of

deficit

If

to avoid

financing

surely seek out

check

than

spending.

impose painful taxes

we

a

deficit

rather

we

to put

a way

the other.

on

prevent inflation we must
stop the overall growth in credit
and

the

for

supply

money

whether

financing government

vate deficit

of. money
the

pri¬

or

spending.

must

The supply
controlled at

be

of its creation, which
banking system. Under our

present

of

maturing

frequent refundings, the
of permitting interest

process

fluctuations involves careful
agement.
is

not

If

in

man¬

refunding offering

a

line with

market

rates,

Federal Reserve support is neces¬

to insure its

sary

These

which

success.

important

are

problems

frozen pattern of interest

a

powers,

to

cess

Federal

Reserve

funds

which provide the basis for

fold expansion in

ply.
to

our

six¬

a

Federal

Reserve

withdrawing

funds

Federal

is

by

Reserve

borrowing by the
from
As

the

member

banks

Federal Reserve Banks.

long

the

as

Federal

is required to buy government

se¬

curities at the will of the market
for

the

fixed

pattern

established

bank

of

by

stand

must

amount.

defending

interest

the

in

es

This

System,,

an

denied,

if

and

sellers than

there

were

more

buyers of government

securities, then prices of outstand¬
ing government securities would
decline
rise"

and

until

interest
the

rates

market

self-sustaining.

More

would
became

sellers

of

government securities than buyers
indicates

that

the

public

is

not

willing to hold at existing rates.
only way to restore the bal¬

The

is

ance

let

to

interest

rates

go

higher

to meet public demands.
The government with the
support
of the Federal Reserve has the

machinery and the
what

cree
are

to

to de¬

power

prevailing interest rates

to be.

But

lacking the power
require the holding of its se¬

curities by the public, the govern¬
ment cannot prevent their
being
Offered for sale if the public-is
not

willing to hold at those rates.

If interest rates
lowed

to

market
ment

forces,

must

not

are

rise

in

be al¬

to

response

then

create

to

the

all

If

a

more

tionary monetary policy.
There- is
interest
present
mote

another

rate

expansion

supply.
term

Interest

half

of

long-term

pro¬

money

issues.

rates

are

are

on

Corporations

-

investors hold

term

market

loss

on

announced

But

if the policy

as

by the Secretary of the

Treasury is to prevail, that the
existing pattern of interest rates
will

not

be

allowed

to

rise, then

long-term

to

of

maintain

interest

This

.

demand
ment
a

for

process

generates

long-term

lower long-term rate than would

otherwise

prevail,

and

gives

appearance of tremendous

the

success

;to each government financing ef.fort.
It
is. however, a success

bought by the creation of tremen¬
dous

sums

of money, at the cost of

progressive decline in the value of
'the dollar.

fixed

a

controlling the volume
and money or be

To allow interest rates
securities

to

on

gov¬

to
-the forces of the money and credit
respond




taxes
is

stroyed.

only

causes

and

credit

weakened

There

is

new pow¬

it

is

not

permitted

limited

which

the

to

selective

System

use.

controls

has

now

over

certain consumer, real estate and
stock market credit
may be useful

desirable, although their ef¬

fectiveness

is

certainly much

limited

more

believed.

than

is

Authority

generally

to

increase

reserve

requirements of all

mercial

banks

substitute

would be

for

com¬

a

partial

traditional

credit

control powers to enable the Sys¬
tem
to
immobilize
new
bank

if

even

is

all.

infla¬

avoided, will

ultimately lead to the
of

,for

further

or

war

destruction

capitalistic

our

Therefore,

democracy.
foreign policy must

our

Continued from page 14

be designed
we can

the basis of what

on

for currently, and

pay

our

fiscal program must be
supported
by restrictive monetary and credit

policies, together with only such
limited direct controls
ation may require.

the situ¬

as

,

and monetary
with them, the need for

measures;

direct

controls

is

Mutual Funds

re¬

de¬

and

substitute

no

for adequate fiscal

reduced

to

a

by Investors Diversified Services,
Inc., investment managers of the
nation's
ment

One

the

of

worst

trying to enforce

features

of

so

regiments the entire

as

to

economy

doms.

destroy our essential free¬
It requires the establish¬

ment

of

huge

the'close

comprehensive

a

harness of direct controls is that it

largest

The three

Investors

and

Investors

Investors

of

This

regimentation, under¬
prove

intolerable

so

program necessary

to defend
world, prevent war, and
the
preservation of
the

Totals

creased

put

though

I

have

strongly

stated, I still feel that

it is essential that wage and

salary
ceilings be put into effect prompt¬
ly.
On the overall basis, prices
made up largely of wages and
salaries, and prices cannot be kept
down with continuing increases
are

in

not

salary

salaries.

and

wages

object

to

Labor

and

wage

ceilings, so long as
profits of corporations

excess

are

Another

for

reason

three

freeze

is

come

taxes

wage

that higher personal in¬

of

as

generally

and

pur-

the

as

securities

funds

gains

sub-

during

1950.
At the

end

capita

per

of

1950

the average

investment of

shareholders

in

the

102,400

three

funds

per

during

1950:
Net Assets

Net Assets

Dec. 31, 1950

Dec. 31, 1949

$235,188,150

$175,397,006

18,743,638

6,952,329

13,325,208
1,663,571

$260,524,117

$190,385,785

standing

units.

This

compares

with total net assets of $11,943,848
at the close of 1949, amounting
to $106.97 on the 111,652.53 units
then outstanding.
During
1950
dividends totaling $5.55 per unit
were paid against $4.45 in 1949.
;

held

showed

over-all

The Fund is operated as part of
unusual
type of investment

an

program
combining the fprincipies of a trust fund and a mutual
investment trust. The plan pro¬
vides separate trusts for each in-

dividual

was

approximately $2,642, an increase of $453 per capita over the

investor, with the Massachusetts Hospital Life Insurance
Company as trustee. The Fund is

year.

the investment medium for

During 1949 the average per
capita investment of 87,200 share-

and

trusts,
The portion of the Fund's assets
represented
by
equities
was
48.29%, with 51.71% in protective-type securities.
Of the pro-

three

tective portion, 3.39% of the total

holders in the three funds

was

ap-

proximately $2,189.
In

current

total

net

assets

number of shareholders the

funds

open-end

a

institu-.

securities

values

the

1949

and

into larger

money

of

market

over

alike

groups

more

chases

any

drained off through taxation.

investors

and

gain

$5,800,000

the growth of the funds

—

substantially

individual
tions

opposed a geheral price freeze for
reasons

combined

average

month in the Past year•
^ comParative table illustrates

Inc.

per capita holdings of
shares of the three funds also in-

stantial

should

Fund,

Average

by

value of the dollar.

the

Selective

an

approximately

Mutual, Inc
Investors Stock Fund, Inc

be

cannot

free

Even

Inc.,
Fund,

of

Worst of all, such reg¬

will

assure

Fund

Selective

record

already short supply

manpower.

a

Stock

Inc. gained more than $70,000,000
in total net assets during 1950 to

FUND

policy-making, administration and
policing—a most uneconomic util¬
an

$260,-

funds, Investors Mu-

tual,

Investors

ization of

invest-

all"time high' 3t

of 1950

bureaucracy for

a

of

group

companies, exceeded

minimum.

credit

of

given

partial substitutes for those

as

that
The

of

the

Investors

now represent more
than
10% of the current total structure

group

such

Fund

was in cash and receivables,
20.40% was in U. S. Government
obligations and 27.92% in other

■

reserves

chases

arising

.

from

it^.

pur¬

.

of

government securities
support of the market.
Au¬

in

thority would also be needed

to

require all commercial banks
hold an adequate percentage

to

their deposits in
in government

for

the

like

to

such

at

amount

in

Reserve

require

savings

life

as

have

to

in¬

insurance

hold

certain proportion of their
assets in government securities in
a

order to

ing

prevent them

in

market

a

from sell¬

at

supported

pegged prices by the Federal Re¬

All

these

of

substitute

powers

would be necessary to compensate
for the control over expansion in

supply that we give
the interest pattern on

money

when

up

Fiscal

have

present

credit

and

to

be

action

buttressed

with

quired

to

essential

the

control

on

the

of

use

goods

in short
or critical
products.

the

prevent
will

for

rationing and
They will be re¬

certain

prices

will

some

allocations.

trols

bidding-up
of
these items, price con¬
be

needed.

Such

con¬

trols should be

selective, however,
applied only in those limited

cases

are

where

both

supply,

they
or

of

the

materials

essential

and

and

removed

as

goods

or

short

in

soon

are no longer in short

as

supply

Overall

necessary

imposed

price controls
and

upon

controls

should

are

un¬

not

be

the economy,

cannot

successfully
simultaneously

unless
accompanied
by

allocation

rationing.

controls

Price

and
alone

merely lead to black markets and

open-

bonds, loans and preferred stocks,
In 4he equity portion, -ptntfic
utility equities were 14.77%; in-

likely to

sistent

must do if

they

Union leaders

are
are

as

press

demands for higher wages to off¬
set this reduction in take-home

to

and

maintain

standard of living.
wage

increases

defeat

one

tailment

entirely
major purposes

time

viz., the

purchasing
there

when

is

cur¬

power

at

scarcity
of many civilian goods.
Finally,
due to the shortage of labor, em¬
ployers, especially those subject
to high excess profits taxes, will
bid
employees away from each
a

and

only should wage and sal¬
ary ceilings be imposed, but all
fringe benefits, including bonuses
and
pensions, should be rigidly
curtailed.
should

Escalator

excluded

be

from

clauses

all

contracts—they
built-in inflationary devices.
wage

A 44-hour week,

without

fu¬
are

over¬

time rates of pay, should, I be¬
lieve, be generally adopted for the
purpose

of

duction

and

the

increasing total

increasing

of

group's conunderwriting
sell only its
shares
exclusively
of

to

The

three

its

investments

funds

since

the

c

last

six

months

approximately
total

in

1950

$7,000,000

sales

for

the

were

greater

the

first

j

six

months of the year.

XT

.

en^

!

Trust's Common Holdings

,,

/

e,

j

.1S

.

J30**1 t<3

some

the

in

Fund—there

without

Increased

pro¬

be brought about

can

should

cept

wage
work week

be

willing to

ceilings and
at

a

time

a

ac¬

longer

when

both

essential to the prevention

of further inflation.

labor

31,

1950,

After

than

to

all, the

more

almost

vital

anyone

else.

market values of Dec.

the
of

of Boston

was

the

largest

ceivables

porate

position

bonds
stocks

also

continuous

in-

Trust

72.4% of net assets,

in

cash
to

12.0%

12.1%.

disclosed

made

common

the trust since

amounted

being

are

stock

common

Shareholders'

stocks reported by
its inception.
Net

report

living

of

without increasing costs and pur¬
chasing power more rapidly than
the supply of goods.
Labor

Being Made for Continuous Offering of Shares

vestment

to

and

re-

3.5%

cor-

and

pre-

The

annual

that

plans
initiate the

offering of the Trust's

shares.

1950, total net assets
of
$24.07
per
share
compared
with $20.72 per share on Dec. 31,
1949.
During the year, dividends
of $1.22 per share were paid from
investment

with

In

93

cents

income

compared
share in 1949.

per

December, 1950,

an

additional

distribution of 20 cents per share
was
made from net capital gain
realized

year,

by the Trust during the

compared with

in¬

26 500 more shares outstand-

The per-share net
increased to $17.53

*950

frojn

10 cents in

1949.

asset

value

Dec.

on

31,

ear*j?r*

year

Adding back the December distribution

to

ffom

reaJize<* capital ga*ns»

shareholders

of

$1

^e gain for the year was 20.9%,
^^ipar^ w1*'^ a 10*3% f?aih m
*949Shareholders ^received, a
total of 76c per share m 1950 from
net investment income, compared
with 72c per share
"oc in 1948.

1949 and

m

Dn„:cuaf:A«e

Investment Registrations
Keystone

On Dec. 31,

net

se-

were

0f 1950 than at the

Plans

on

+yas

increase-in the mar-

ket values of the underlying
cunties, and to new capital

vested

Based

d

New England Fund s total net
assets increased to $3,861,995 at

Sales for

of

i

^ew Lngland Keports

Large Gains for Year

outbreak

of the Korean conflict.

than

_

public has substantially in-

creased

the

dustrials were 25.62%; bank and
insurance stocks 5.92% and railroads 1.98%.
y

nation-wide force

own

1,900 local representatives.

ferred

costs.

provided it

to

funds'

own

through its

pro¬

duction is, in the end, the primary
solution to the inflation problem,

so

policy

distributing

helping to maintain

standard

are

the Investors

Largest Since Inception

other.

ture

is

It

would

of the

of

labor's

To grant such

increased taxes,

of

inc.,

Custodian

Boston

registration
Securities

on

Jan.

26

Funds,
filed a

with

statement

the

&

Exchange Commiscovering five series of se-

sibn

curities

aggregating 1,050,000
Keystone
Company
of

shares.

Boston is the underwriter.

Affiliated Fund, Inc., New York
on

jan>

statement

Exchange
5,000,000
stock.

26

filed

with

registration

a

the

Securities

Commission
shares

of

&

covering

its

common

No underwriter.

Conclusion

Price

be

$2,500,000,000

America.

defense of the dollar is

deemed essential.

entire

they
to be effective.

labor,

of

pay

Not

serve.

our

balance

take-home

a

companies,
savings
banks
and
savings and loan associations to

to

end"'investment companyUSkTirT" •

pay

or

likely be essential

Federal

stitutions

of

required

the budget will 'reduce the hourly

reserve

securities,

a

authority

special

a

applied
ernment

required
straints

the

govern-, and

securities, helps to maintain

the effects rather than the

for

supply and of scarce
materials and finished

Reserve.

did

but

Regimentation

tion,

victory for

destruction

and

—they sugar-coat the inflation, so
that the public's will to accept the

estab¬

To

curities held by nonbank investors
will
be
shifted
to
the
Federal

policies

inflation,

none

and

ulation and

rates

The lower

se¬

of direct

weapons, would mean

postponed the in¬
flationary results. They deal with

time,

government bonds in
effect become demand
obligations.

yielding short-term

concealed

by the Treasury, then the
System
should
either
be
dis¬
charged of its responsibility for

long-term issues should they need
their funds.

monetary

long

Selective Price and Wage Controls

a

and

prevent

as

government securities is frozen.

of

not

justified.

the

chance

war

controls unsupported by adequate
fiscal

stop

lished

and

during

even

comprehensive harness

a

to

securities, however,
because they do not wish to take
-

experience that

that public revulsion will lead to
withdrawal of essential support

pattern

ers

and
past

the Federal Reserve is to be

required

short-

on

securities

and other nonbank

short

an

under

to

our

rates

what

of

of

that

works

government

about

aspect

freeze

conditions

infla¬

:

adopt

profiteering,
We know from

taken for any extended period of

It would

is

to

run

tax evasion.

flood¬

option

It

Any tax

credit

money and
left open.

for

pay

are

their

well.

hard to conceive of

the

of

govern¬

adequate

the long

ca'sh.

as

we

likely

are

be

in

money

money out of all government se¬
curities and adds to the liquidity

all private debt

we

hardly

govern¬

the

it takes to keep rates down.
This
in effect makes
interest-bearing

is

value

securities market.

gates

i

engine of inflation.

the

of

booming

ment

as

the action of the Federal Reserve

Federal

inflation

the dollar is the price
the luxury of a

can

through

■y If
access
to Federal Reserve
credit
wqre
strictly limited or

debasement

racketeering,

if we

rates to rise if market forces
oper¬
ate
in
this direction.
Inflation

the

makes

system,

deny

when

in

taking place, and to allow interest

inflation

new

structure.

increases
money

to

credit

program

it

unlimited

policy

banking

a

f rates

Treasury,

ready to create

reserv

entire

of

purpose

our

unwilling

Reserve

and

Reserve

of

accept

we

rate

prevent

volume

are

if

on

interest

cannot

the

take

we

frozen

a

the government se¬
market
and
penalizing

curities

lems that

money sup¬ We

Tne only way to stop access

support from

,

because

the only way to rates can avoid. But they are not
this is by denying banks ac¬
nearly as formidable as the prob¬

do

Of

management

each year and the demand liabili¬
ties in savings bonds.
With large

source

is the

aebt

of

the large volume of debt

and

To

i

market, I realize, raises problems

29

Massachusetts
Massachusetts

In

that

conclusion,
a

fense
and

let me repeat
successful preparedness de¬

program

must

inflation,

v

not

must prevent
lead

to

Total war,

war

destructive

with atomic

Massachusetts

Life
Lire Renorts
Keports
Life

Diversified
york

Qn

Jan

Funds,
26

filed

Inc.,
a

New

registra-

re-

tion statement with the Securities

ports total net assets of $12,854,-

& Exchange Commission covering

614

1,000,000
shares
of
its
Stock. No underwriter.

on

Dec.

$108.30 per

Fund

31, 1950, equal to
unit on 118,691.84 out-

Special

•w'l i-Mi

U
^

60

(550) : ;

The Commercial and Financial Chronicle

fore, is to find something that
place of cash.

Markets

Walter

Whyle

weakens
most

the medium

popular.

that

What

I've been

of

in

them

build

How to Prevent Inflation

trying

advance

the

in

to

guess

for

more

*

As
the

❖

*

market

the

plies

level I believe op¬
years than I care to admit. At portunities for profit will be¬
this point I should like to come fewer.
By the same
upper

of

be

'*J„

we

and have large

sup¬

equipment.
He
enduring solid program

the

American

willing to

period.

do not want to
production for

excess

an

which

And Fiscal Disaster

I

people

will

for a long
also confident that

carry out

am

General

substantially

increase

gross

our

national product so as to maintain
our

maximum

production in
.

the

policy,

Federal

and

fi¬

formulate

a

total, tied-togetherBut getting back again to that program—that will restore con¬
lantern in the window—how about

program—a

fidence in the national credit.

economic springboard for the

our

tests that lie ahead? Here the situ¬
ation is far different. Ten years
ago

faced with the need

were

we
an

increase in out¬

enormous

tary
to

Ask

purposes.

the

exactly

as

govern¬

it asks

us

save.

(3) Continue and extend the

face

we

Europe.

use

States to follow ill

These military statesmen

want intelligent preparations lor
defense, but they also know that

must

not

overburden

our

-vA 'H-C.-:'

economy.

^
anything short of a full-scale
war, it is highly desirable that the
In

the

of

revenues

ment

put and we had large unused ca¬

pacity to produce. Today

for the United

we

(2) Reduce drastically govern¬
spending for all non-mili¬

ment

ment to save

Eisenhower, when he re¬
from Europe, will present
intelligent and practical plan

turns
an

Overhaul

(1)

nancial

stable

a

A-

economy: ;a ••

living standard in the process.

Situation Different From 1941

for

approaches

us,

surplus

up

wants

to do

about it is the chief

=

business

happen to

8

page

is

problem.
There is no real protection.
By WALTER WHYTEs
The only protection to my
A lot has been written in mind is not to be stampeded
recent weeks about whether by events or their translation
or
not it's possible, or even into stock market activities.
feasible, for anybody to fore¬ The 210-260 yardstick should
cast the market and individ¬ be kept in mind.
stocks.

jrom

J

Thursday, FebruaryJ, 1951

.

the military

The very desire to convert
cash into equities, however,

Says—

ual

Continued

will take the

Tomorrow's

.

.

equal

Federal

exceed

or

Govern¬

total

eral expenditures. In other

Fed¬

words,

controls, and during this period of limited war,
in whatever we should do everything we can
to balance the budget by increas¬
fully-loaded productive machine direct controls are imposed.
(4) Enlist the cooperation of in¬ ing taxes and by cutting down
point to my record and take logic as they get down to the from civilian goods to war goods,
less essential expenditures. Only
as well as to convert and expand
dustry to inform the people of the
&
couple of low bows, but lower figure, they should be¬ our
In this way can we keep our na¬
plants.
dangers of inflation, and to ex¬
modesty
forbids.
Besides, come greater. There are ex¬
We will recall that in 1940 our
plain the "economics of sacrifice." tion, to the greatest possible ex¬
some
research - minded low
tent, in the free private enter¬
ceptions to this rule of thumb. national output of goods and serv¬
prise basis.
Strengthen Fiscal Policies
people may ask me a lot of The picture stocks, for exam¬ ices was one hundred billion dol¬
If it happens that we get into a
lars. Eight million of our people
The first objective should be a
questions I'd find embarrass¬ ple. But by and large some were
unemployed. By taking ad¬ program which will provide for war that requires ali-out effort,
ing to answer. So Til beg off compass is necessary if one vantage of this labor slack, and
Federal
expenditures
will
un¬
paying as we go up to the limit
with the statement that fore¬ doesn't want a
dissipation of straining our economy, we pushed of what the economy can stand doubtedly exceed our ability to
our total national output to nearly
pay as we go.
In that case, the
and
still
remain
strong
and
telling them, takes a lot more one's funds in the elusive
$200 billion a year by the end of healthy. In the President's Eco¬ government will have to borrow
than a collection of charts;
chase for profits.
the
additional
the war. We spent $90 billion for
money
that
it
nomic Message to Congress on
*#•
*!•
$
;.•! //iW V >"'
^ V*
needs. The fiscal program should
war in one year. It was a gratify¬
Jan. 12, 1951, President Truman
[The views expressed in this
Now back to the market. article do not necessarily at any ing process all around to put said, "We should make it the first anticipate this contingency and
should provide that such financ¬
people to work. Today it is an un¬
Last week I wrote here that time coincide with those of the
principle of economic and fiscal
pleasant task to throw them out
ing will not be done through
Chronicle.
They are presented as
policy in these times to maintain
of
work
by all present indications the those of the author only.]
in order to create labor
banks where the effect will be to
a balanced budget, and to finance
available
for war employment.
market looked as if it would
increase the supply of money. The
of indirect economic

different set of conditions.

a

We need to divert

part of

a

our

insist

flexibility

on

.

the cost of national defense

stay within

wide

a

between 210 and 260.

Today

That's

quite a range, 50 points, to
play with. In that range there

that

the

equal hazard of losing it.
The touchstone, in my judg¬
ment, is news.
$

The basic

Korean

will be the

news

The

^

Activity

Over-the-Counter

on

Markets—Irwin

Friend—Univer¬

of Pennsylvania

Press, 3436
subdivisions of it will be the
Walnut Street, Philadelphia 4, Pa.
economic
developments
as —Paper—85c.

these will have

an

effect

on

the stock market
ture.

price struc¬
question is what

The

will the effect be.
sj:

To

must first

partially,

back to

grant that the

mirror of most

a

One
mar¬
com¬

ing events, except the
pected

unex¬

The basic fear

ones.

today is that further inflation
Will

make

Guidebook

the

to

Income Taxes

dollar

still

New

York

The

search,

there¬

1, 111.—Paper—$3.

cago

the Dow-Jones industrial and rail

Planning

for

Profits

in

the

Market—Including primary
trend indexes, charts, and graphs
with current analysis of 440 stocks
groups—Dept. 4-A, Inves¬

Research Co., Mihran Build¬
ing, Santa Barbara, Calif.—$1.

pared

by

on

Pacific Coast Exchanges

Mildred

editorial

Cantril

Press,

—

Strunk

direction

N.

under

of Hadley
University

Princeton

Princeton,

J.—Cloth—

$25,00.
Survey C-l—Four-page

study surveying the financial, ecoocnwabacher o£ Co* nomic and politicai background
t

o

Members

stock

York

the

Curb

year—Included

X4 Wall

Street„ New York 5, N. Y.

Private

San
-...

projecting business

New

COrtlandt
r:'

and

York

Stock Exchange
Exchange (Associate)
San Francisco Stock
Exchange
Chicago Board of Trade

New

7-4150
Wires to

shall

we
our

Teletype NY 1-928

Principal Offices

Francisco—Santa

Barbara

.Monterey—Oakland—Sacramento
Fresno—Santa Rosa




made

we

materiel

war

materiel

needs, and to
allies.

own

Let

as

all the

need—war

for

and

rearm

our

be realistic in this crisis.

us

For the

war

we pro¬
needs by

expanding
only 20%

cutting
to

output. We produced
by conversion or by
back selected industries

release their facilities and

goods

There

funds

needed

from

should

be

the

people's sav¬
ings on terms which will make
government bonds attractive to
hold for income purposes over a

and 1945, Federal long period of years. Short-term
financing of war needs should be
averaged $45 billion,

1944

revenues

about 20% of the gross national

product.

This

is

not

enough

at

would

revenues

amount

to

More exactly, the present

system

will

billion

in tax

produce

about
at

revenues

avoided.

Reduce

Non-Military

The second

Spending

objective should be

sweeping economy In government
—Federal, state, and local. With
war
on
our
doorstep, we should
$60 stop spending for public projects

billion.

$55

that

be

can

emergency

postponed until
has

passed.

the

National

present defense

comes first—ahead ol pub¬
buildings, housing projects, or
increases, we can get more tax subsidies to any segment of the
revenue. If the costs of armament
population. If we try, we can re¬
drive the total Federal budget up
duce
Federal
expenditures
for;
to $65 billion in fiscal
1952, we non-military purposes by at least
should get additional revenues
by $6 billion. The government should
adding more excise taxes and set the
example in the sacrifice
lowering
personal
exemptions. of
non-essential
spending,
and
Much as we dislike sales taxes,
eliminate projects which require
we
might even have to have a materials and manpower which

tax rates.

As the national product

Federal sales

Any

re¬

away from the consumer.
simply will not be as much

goods available for civilians.
But

how about the money and

credit supply?

Unless courageous
action is taken, there will be more
money on

hand than
goods

tax

vide

a

tion

are

tax.

lic

could better be used for

war

pro¬

should pro¬ duction.
and effective

program

reasonable

entitled

giving

a

be

can

market's

"What

is

as

course
a

well

as

for the

special study

About

Inflation"

specific list of stocks that
considered

good

hedges

against depreciation of the dollar
and

Here, in
born

a

indicating the

reasons

why—
Invest¬

ever,

to

and less
it on.

spend

nutshell, is today's stub¬

problem.

We

are

ment

—

how

25%

into

far

nomic

the

of

people

will

sacrifices

play,

national

go

in

is

in¬

eco¬

now

con¬
some

their faith and belief in the value

do

of the cause, and the effectiveness

plowshares into swords.
not

limit

the

that

recain—in

value will increase

economy,

of

other

houses,

new

like

—

their

excessively.

This brings us to the
discussion.
How
can

period

we

ability to buy the

words, automobiles,
appliances, and the

stability in

If

crux
we

of

our

attain

in this
short-of-all-out-war

our

and

needs at home?

currency

still
How

provide
can

we

to

program

upon

further

this

We

that

lieve

all

is

want

to

do

everything

for the defense

necessary

inflationary

pressures

be

lesion
power

the

surface,

erupt

builds

on

to

may

be the

when it does

more

we

cess

may

best

tual

our currency, and at, the
time put it to work for us?

doing

are

we

are

Government,

wage

and

price

mean

regi¬

consumers,

is necessary and workers, and businessmen. To en¬
building up ex¬ force such direct controls will call
equipment which for thousands of "OPA" and other

not

military
become
all-out

but the
below
destructive
up

break out.

States, but we should fixing and rationing
absolutely certain that what menting housewives,

that

but

merely bottle them up and sup¬
press them.
They may heal the

and

cause.

for

protect
same

the

of

depends

of the United

Four Rules for Sound Finance
Department C-l,
Letters, Inc., 2656 Penobscot
Here are four specific sugges¬
Building, Detroit 26, Mich.
tions that may point the way to a

$2.00

brought

manpower controls, priorities, al¬
locations, rationing, etc.—will not
come. Inflation has
already robbed alone do the job of stopping in¬
every American of half of his sav¬ flation.
Wage and price controls
ings, half of his insurance policies, and rationing hold prices down,
and much of his earnings.
How but they do not shrink purchasing
much
more
can
be
take
away power or increase the supply of
from the average man? Of
course, goods. Therefore, they do not re¬

around

fronted with the need to beat

plowshares

Special
f

civilian goods

1950 plus

consumer

the

Orders Executed

or

In

extra

borrowed

sources for war production.
To¬
Indirect Controls Essential
pattern for spreading the burden.
day, with a comparable war ef¬
Also there is a limit beyond which
We come
to our third point.
fort, the figures might well be re¬
Ownership in Common—D'ean versed. We should have to obtain taxes should not go. And, if taxes Assuming that we will have direct
exceed
Russell—Foundation for Economic
the critical point,
they controls, we will still need indi¬
about 80% of our military needs
Education,
Inc., Irvington - on - by converting existing industries will take away the ability to ex¬ rect controls more than ever to
the
increase
in
pand production. There is a grow¬ curb
Hudson, N. Y.—Paper—No charge and diverting
buying
factories, men, and
for single copies;
quantity prices raw materials to war production. ing acceptance of the theory that power.
on request.
the
critical
We
level
know
that
so-called
of
direct
taxation,
Obviously this means taking beyond which the forces of infla¬
controls—price and wage fixing,

Public Opinion 1935-1946—Pre¬

Securities

is

averages—Financial Reports, Inc.,
Box 11, Newtonville 60, Mass.

tors

<rr-f

in

angle, in World "War II

the war and postwar
industrial activity and

of

pattern of

and 43

Pacific Coast

pro¬

war

large jepough. to. include a§

much

State

Individuals and

on

Stock

cheaper.

can

present, ours is a problem
Fiduciaries—Samuel M. Monatt— of diversion, more than of expan¬
Commerce Clearing House, Inc., sion.
'
214 North Michigan
Avenue, Chi¬
To look at this from another

review

that

the market action itself.

ket is

we

need for

duced about 80% of

will have to go

one

way
we

tax

by producing less of other things the
present time.
our output of civilian
In 1951, gross national product
goods. We cannot expect our na¬
will probably be about $300 bil¬
tional output of goods and services
lion; 20% of this for Federal tax
to be

equip

Next Twenty Years—3rd annual

s):

answer

only

all that

tion.

—lowering

sity

pronounced by the Washing¬
ton authorities, e. g. price ceil¬
ings, price fixings, etc. All of

the

duce

$

developments.

a

we

valuable time, of which we have
so little. Therefore,
it is obvious

would be all kinds of oppor¬
tunities to make money, plus

$

on

have no labor surplus. 'pay-as-we-go' basis." In my opin¬
Our
idle productive
capacity is ion, we should muster the cour¬
low, limited to war plants carried age and the fortitude to
pay cur¬
over from last time. And even re¬
rently for war costs up to oneactivation of idle plants consumes quarter of our national
produc¬

of

range

obsolete
war

Marshall;, has

before

occurs.

ac¬

General

government
the

officials

taxpayer.

paid for by
Businessmen will

steadying spend many precious hours learn¬
Ever ing the new rules of the game,
the office of and adjusting their businesses.
Prices made in a free market,
Secretary
of
Defense,
several
months
ago,
he has said that, by reflecting conditions of supply
until we know what is going to and demand, show where producinfluence
since

he

in

been

this

assumed

a

respect.

Volume 173

Number 4982

tion

be

should

stepped

..

The Commercial and Financial Chronicle

.

where it should be slowed down,

Under

take

function,

stand. up

possibly guide and direct produc-

production goals.

have, and the

we

His tasks

the observer's reliance

fight for freedom, will be lightened considerably if

and

on measurements of the
crowd's behavior
The "correctly" bearish market psychologists
bucking the crowd in 1928 bought in 1929, and became the suicides
of 1930.
While many believers in value criteria likewise
were
swept "off-their-beam" during that speculative era, the

we will have to move
There is no time to lose,
ket througn many thousands of public
opinion is in a state of unIn the coming months we might
transactions. We are making this
certainty. Our enemies will em- well use this term, "Production
effort to preserve a free enterploy every means to distort the for survival,*''as-the yardstick by
prise ^sys .em for the simple rea- fac^s and confuse us.
which to guide our decisions. If

tion

that

son

it

is

the

swiftly.

efficient

most

A

One of its requirements
reasonably freely operating

system.
is

a

.

,

Tir

mechanism.

price

us.

short

run

to do

as

did

we

1942.

in

entire decade would be
If

then

we

have

some

should

fall.

havp

which

manpower

we

V :.'v

'

nn

are

direct

taxes.

53%

worrt

be

this

are imoosed
are
imposed,

time

they

let's
lets

down

see

see

be

can

contain

they

be

lags.

one

we

have

administrative
aaministrative

jan

iudement
juagment

best

in

ferments

our

do

not

no

longer

be

meeting

watch

when we
meeting

out,

drastic

inflation

between

these

12, 1951

the

in

^3

pay

Wlli

jn

extra

taxes.

We

n[ve

can

the

taxes

\u

money,

a

or

two

them

?i

the

ec°nonJlcs,

of

facts

on

the

on

sacrifice

n

•

u

.

price. controls
rhic

*'ni

this

iTrAf

.

might work.
ond

"butter

fTiinc

and

if we are to have

omy,

i

n

•

'

Such

But
f-* f* O T"1
econ¬

guns"
a

as against taxation.
in{lation might mean that

prices could easily rise to take $10
a
week away from each worker,
l

higher tax bill is good business

a

for

the

broad mass of the people
great middle classes which

strategy must be to curb —the
olation at the source. This we today
achieve,

can

to

a

extent,

large

mostly

are

made

of

up

workers' families

indirect

controls, properly
vigorously
administered.

These

t

_

comes, or rather is Stolen, little
by little The facts are that having

~ur

with

t

long- It

^

pull, enduring program, we must
on a tough fiscal and credit policy.

depend

and

o

v
v

,

-

.

Production

...

"

.

4.

\

*

controls

include, besides
taxation, Federal debt manage¬
ment, interest rates, monetary and
credit policies, and the controls of
consumer

credit

residential

and

•

u

*

In the meantlme. let business,
staircase

together

warning

laniprn

and

in

hang

the

have individuals
income

market
If

save

more

thus

and

window

need

country

for leadership

was

Continued

of

of

self-delusion

possible disaster to
sion

of

security

We

can*,

from

in

greater

never

our

than

is yet to

if

come

we

the

during
are

last

so

such

as

war.

we

The

First

facts

let

Must

Be

with

investor.

Com¬

controls,

'

aid

it

cause

that industry, through
Council, the Na¬
tional Chamber of Commerce, the

and

of Manufac¬

.

and

adopting some Spartan prin¬




judgment of individual issues

to

a

on the one hand,
the other.

empirical systems which
"marginal" degree—to the "investor" in

convinced there

am

on

are no

are

no

results, discernment of

an

individual

stock

must remain

an

or

the

a

market-as-a-whole

unfortunately is

unattainable goal.

As aft

dissolution as

being underpriced two years ago was * additionally endorsed by
finding out in the market place that unreasoned public prejudice
was

the main reasoq

when the

the

therefor—the converse of the 1920s situation

public's speculative mania motivated people to calculate

holding

company as

4

as

Well

as

•*

Buying

material investment reward.
in selling implies, just as it
marginal opinion;
,

^

t

eventually get from it.

practical matter Mr. Thurlow's problem over

course, as a

This would unwar-

%

be bought whenever it

falls below it.

(1)

■

and (3) it would disregard the particular subjective
individual concerned—his income-tax bracket, his

the

of

appraisal figure, but using it as a point of calculated departure.
Finally—our value operating investor must be logical and >
consistent in both selling and buying—keeping at the lowest pos¬
sible
minimum his "glandular"
distraction by environmental'
market-place elements (including even the historical price level •
factor). If it is humanly impossible for him to get along without .
technical tools, by all means let them be used in a subsidiary role. *
For example, if a formula for predetermined cash-equity port- f
folio oroportions are needed for emotional self-discipline, let such
maximum and minimum limits be relegated to a role distinctly v'

appraisal of individual issues. In *
bought whenever they are undervalued
predetermined maximum aggregate of say 60%; '
let his over-valued issues be sold—but only down to the ex- *
of having a total of say a 25% minimum of equities in the

secondary to the quantitative
—but to only a
and
tent

portfolio.
Along with caveat

emptor—let the investor behave.

being worth many times the sum of its

by an

(P. s.—The foregoing purisms happily are authored
academic columnist having no investing clientele.)
* "The

of Investment Value," by J.
Mass,, 1938; p. vi.

Theory

Press, Cambridge,
■:■.

H. M.

"

v

..

11

1

"i"'.

■ ■....

,,

|

B. Williams, Harvard Univ.

^

.......

,

"

Joins Merrill

Byllesby & Co.
Adds to N. Y. Staff

.

■■■...■.

-

~

,

•;

.y-

~

r

Lynch

(Special to The Financial Chronicle)

|

CLEVELAND, Ohio—Stephen J.
Grosse
is
now
associated with

Company,
New York Merrill Lynch, Pierce, Fenner &
City, announce that E. W. Con- Beane, 216 Superior Ave., North¬
nell, Bernard R. Hodge and Ken¬
east. He was formerly with Bai|,
neth F. Springer are now associ¬
H.

Inc.,

price gains constructive confirmation

example, one's appraisal of holding companies in
,

Selling

in

predictable future trend of either

cal'fplble whi£h is Causirtg the market's rtiistakfeh pricing.

*

income.

exemption from this truism is due the holder of

an¬

through discovery (a la Gallop poll-ing) of the public's psychologi-

It must

ciples today, we can reap the re¬
wards of a more bountiful society

the

matter of practical procedure must
fall into hopeless inconsistency between the

intrinsic value and market

it must
binge

the terrific monetary

of

I believe that general psychological factors should be
merely as a tool distinctly ancillary to quantitative value
criteria. One's conclusions as to a situation's disparity between

short-term money

expose

middle approach

some

some

used

proved an anti-inflation campaign
This story must be retold time
after time. The program must sell

show that by tightening our belts

capturing

else who

someone

insufficient

other words, let issues be
•

(3)

The Adver¬

headache that lies ahead.

in

cal

and

tising Council just last week ap¬

the

*

-

Queries

ticipating the continuation of an alleged "trend." On the bases of
logic, of the market's "facts of life," and of demonstrated empiri¬

are

the economics of sacrifice,

•

Specific

forecasting movements of "the market"

of value—even

ayailable, launch a na¬
tion-wide campaign to call atten¬
tion to the present-day lantern in
the .window—the
danger signal

and

-

of

/

investment and speculation under any reasonable

the investor to

(2) I

turers, and whatever other agen¬

end

"investor"

two stools of value

I propose

warning of inflation.

specific

definition of the two; and as a

the Advertising

cies

the

fusion between

will limit inflation.

National Association

three

"speculative"
profits which may accrue to a correct investment judgment.
I
believe that this question as stated exemplifies a common con¬

proper tax policies,
sound money policy, and

indirect

Thurlow's

(1) I do not concede the necessity of

Informed

with

proper

Mr.

nally elaborate with some conclusions, concerning the basic con¬
tinuing attitude to be followed by the realistic value-seeking

point is in many re¬

spects the most important.

#

questions enumerated in the bold-faced paragraph; next, consider
the question of selling policy in a value-appraisal setting; and fi¬

to

a

seriatim

answer

me

form

living-income needs, and over-all portfolio balance. Our margin- \
of-safety (as explained in previous columns) is applicable to de¬
cisions about selling as well as buying—not thereby altering the

'
'

the

selling policy cannot be answered following a rule to sell whenever the price goes above its appraised value—anymore than it is

needs

Exchange,

Replying to the

Public

to be

115 Broadway, New York.

reverse.

The fourth

seems

January 25, 1951.

policies
that more savings bonds are being
cashed today than are being sold.
This is a practice which we must

with

•

"Bradbury K. Thurlow."

*

in

foresake the value approach

Of

Talmadge & Co.,

had

loss is to sell it to

a

loss

rantedly presuppose scientific pin-point accuracy of the appraisal 1
figure; (2) even if completely accurate, such a policy would put ,\
the buying and selling points practically next to each other, and
in the end give no more than the prime investment yield on ,

a

Members New York Stock

the

stock is worth only what he can

keep

"Sincerely yours,

ful of government money

bined

It is

take

of»assuming the ability to foresee changes, in opinion rather thaft
the calculation of minimum future income; and of forgetting that

.

to

•

turn

stock, merely because of his possible emotional turmoil ensu- V
a stock with which he has parted company, y
overcome this foible, it may be asked whether v
To

working together.

problem, however, which
pressing enough to justify some serious attention.

that the public is so distrust¬

The

hope of avoiding

in

even

would in buying, the fallacies of betting on the

5

page

buying securities.

part of the

purchasing
power
and
super-charged reserve-

inflation

credit

his only

V

V

man

he really deserves

our

do

all

business enterprise—in

a

If he is too weak to

and

in

faith

as

ing from a rise in

broader vi¬

a

and

destiny.

common

Observations.

reduce

through deficits, we need a
policy that will sell government
bonds to savings institutions and
to the people instead of to the
banks.
We will thus syphon off
up

lose,

one's fund;

must finance

surplus

never

a

The

war

dry

a

he need

a

pressures.

we

decisions:—"If

Soundness Applicable

warnmg lanlern in the window.
We can leacl the nation out of this
wilderness

as

the attitude of ownership in

Surely

credit.
We must curb
priyate credit expansion in order
to

<

the

mortgage

their

r

government, and labor climb the

with full confidence that the best

Survival

for

1

well

.

of
the market and do not wish to speculate on mere changes in price
must have recourse to estimates of investment value to guide
them in their buying and selling."*

sion 01 security ana laitn in out

,

t_:,'

T

'

difficulty that must be met and faced

Therefore all those who do not feel able to foresee the swings

tney

w°rKeis sr°up snouia understand these facts, they will
consequences support the proper remedies.

Of. inflation

,

,

t

the intelligent Thurlows—

must

If thev

sacruice.

'

buys a security below its investment value
if its price should fall at once, because
he can stilt hold for income and get a return above normal on his
cost price; but if he buys (or holds) it above its investment value,

me tacts on

*•

inflation, and

on

economics

a

If we grant that investment value is the present worth of future
dividends, then in both holding and buying the market price cannot
go above the appraisal figure thus arrived at without adding risk.
It is my conviction that the following principle laid down by John
Burr Williams certainly is valid for selling as well as buying

between these two.

pay most of all future
This workers' eroun should

nossible

shortest

week

a

problem, but

arithmetic.

said in effect that

necause tne miaaie classes
have to

Difficulties

our

to

rhoiee

Emotional

can

postpone

either

Client's

lieu of dealing in liquid counters. In selling, as well as in buying,
his operations must be based not on emotional optimism, but on

it
?
eitner arastic innation or a
™ «• drastic capital levy. There is little

minds

His

otherwise they both become lost in a sea of confusion. Certainly
in selling no less than in the act of buying, must the investor
preserve

our

The final outcome would

debts.

They will

set

wp

in

and

realistically by the customer

We

resources

obligaThe time will come, if we

tions.

danger
^of illation,
be sold.

fiscal

have taken successive de-

we

This is because the middle classes

V n
Perhaps in a total all-out war

.

an(j

per-

politics.

easy
our

possible weigh the ultimate

time
V.

in

thumbs

Truman, in his EcoMessage to Congress on

nomic

our

in

get the 30b done

wav

if

be

to

have watered

in

turned

increase

pr0ved

for

investment

Given the facts, the American
rigid straitjacket to fight inflation, the great mid- People have* never failed to live
economy as com- die
working classes may have to UP to the American heritage.

that will

*

that

said

needed

Derf°.
™%sel our
President

Direct controls at best must

allow 101
for
auow

sold

can

Right "now these

no

an

the

as

land.

5%

a

r>°
? +£n
But

to permit inducements where

plex

on

policies

monev

sonal income tax.

flexible.

are

needed to support production
to

59%

time.

some

Thev
should preserve
oreserve enoueh leemey snouia
enougn ice
way

^

Higher
increases

will be directly related to
success
in building firm our

qa% caid
mu"e.y P°nciesn«w tncse
6i /0 saia policies are confused. The easy
money policies of the past have

work

Adviser

brokerage house partner, investment counsel, and market economist, is troubled
by the fact that
while it is possible for an adviser to get his client into a stock
on the basis of quantitative value
criteria, the subsequent act of
liquidation on that legitimate basis harbors emotional turmoil for
the customer (and potential loss of business to the conscientious
adviser). This is a dilemma going to the very root of the current

military strategists, how¬

our

our

of

When
thev
wnen tney

There

apfpn(?p

eventuaUy, maybe.

'■

■

work week?
need for it,

these weaknesses,
The rest of the survey is in
apparently going to have the same vein.
People are not
wage
and price controis.

spite

that

~vpn

;we

watchword.

our

The

i

Mr. Thurlow, who triples as

ever,

no

even onaeieHse worK.

go

Shall

asked:

longer

a

said there is

price management should

ity in

measuring the
The "aggressive investor," in lieu of
relying on the "strategy"
psychological approaches, should rather concentrate his ag¬
gressiveness on courage in embarking on value situations irrespective of their obscurity, unpopularity, or non-liquidity.

The task of Charlie Wilson and

of

interviewers

63%

get in
result. Flexibil¬

that industry as a

In

nrires

some

sacrifices—sacri-

means

have

we

We should

welcome the extra goods

and

be

The

to

as

so

this

fices now,

mistake.

a

operate

prices

tn

nneralp

and

that

do not wish prices to rise,

we

up

But

reliable and reassuring—at least
comparative degrees of over-valuation.
more

of

a

People

somewhat

were

for

give strong. backing to the war can wait> or serve as a stopgap
until we can get to the main job.
effort, but they do not yet believe

for the long run of this

so

corporation
probiem
problem before

quanti¬

tative tests

Pr°ject qualifies as Production
t°r survival, it should have A-l
priority. If it is anything else, it

leading

a

the

alter

can

bv

survev

emphasized

..

We

recent

researcb

freeze that mechanism for >he

or

But

gram.

would the free mar-

as weii as

his main guide.

as

accept reality if we embrace
the economics of sacrifice, and
knuckle down to what I would
call ' production for survival,

Government, industry, and labor can join together in this pro-

a

even

what

protect

government can

this

over

long period of semi-war
war, those bureaus cannot

During
or

fixing,

price

bureaus

31

parts. But the quantitative value appraisal must always come first.
Under the current uncertain status of the
practice of stock
market psychology, the timing factor is too
likely to undermine

and productivity in
the years today. Charles E. Wilson has the
ahead. And at the Same time we, ability and the courage to reach

and

up

(551)

ated

ment

M.

Byllesby and

Ill

Broadway,

with the firm

in its invest¬

department.

Burge & Kraus.

With Richard J. Buck

'.A* '

With Schwamm & Co.

(Special to The Financial Chronicle)

BOSTON,
Schwamm & Co., 50 Broadway,
New York

City, dealers in munic¬

ipal bonds, announce that Orman
M. Crocker is now associated
the firm.

f

Mass.

—

J
t

Marjorie A.

Moore is with Richard J. Buck &

Co., 8 Newhury Street.

She wajs

with formerly associated with Boardman, Freeman & Co., Inc.

£2

The Commercial and Financial Chronicle

(552)

The following statistical tabulations cover production and other figures for the

Indications of Current

latest week

Business Activity
STEEL

AND

IRON

AMERICAN

steel operations

Indicated

Equivalent to—
Bteel ingots and castings

oil

Crude

capacity)

Feb.

(net

tons)—...

Feb.

Previous

Month

Week

Week

AgO

2,025,000

4

93.1

1,774,700

(bbls.)

6,051,350

5,761,510

5,763.310

4,962,300

SERVE

f6,505.000

6;370,000
20,815.000

6,159.000

5,513,000

credit

20.075.000

17,988,000

20.724,000
2,926,000

2,652,000

:•:& 2,600,000

2,663,000

9,366,000

10,062,000

9,436,000

7,482,000

9,637,000

9,786,000

(bbls.)

Kerosene

Gas,

unfinished

and

Finished

(bbls.)

gasoline

at

at

and distillate fuel oil (bbls.) at

oil,

oil

fuel

Residual

(bbls.)

Jan. 20

123,782.000

121,209,000

112.631,000

122,204,000

Jan. 20

17,177,000

18,027,000

21,819,000

19,046,000

Sale

Loan

,

61,147.000

64,557.000

73,273,000

69,214,000

41,210.000

41,675,000

39,914,000

58,585,000

CIVIL ENGINEERING CONSTRUCTION

779,816

783,025

747,204

731,518

692,543

689,776

619,163

.

;

construction
—!

construction

Public
State

and

municipal—

Jan. 25

$305,269,000

$391,606,000

$111,193,000

$216,406,000

Jan. 25

235,369,000

242,146,000

48.457.000

163,002,000

Jan. 25

69,900,000

149,460,000

62.736,000

53.404,000

50,495,000

59,772,000

33,712,003

98,965,000

2,964,000

19,692,000

.———Jan. 25

48.380,000

—Jan. 25

21,520,000

Federal

FEDERAL

Estimated

—

of Nov.

as

•

DEPARTMENT STORE SALES INDEX—FEDERAL
TEM—1935-39 AVERAGE—100—

CDISON ELECTRIC
Electric output

*11.820.000

11,025,000

7,260,000

956,000

952,000

910.000

732,000

161,700

*158,600

139,500

19,200

11,175,000

Jan. 20
Jan. 20
Jan. 20

(tons)—!—

301

Jan. 20

*305

640

1

•

-

Vf-

230

INSTITUTE:

6,969,566

(in 00q kwh.)—27

credit

AND

STREET

INDUSTRIAL)

AND

—

DUN

In

—

RUNNING

—

DEPT.

OF

^

6,903,818

6,479,302

167

125

5,971,662

Pig

.

iron

(per lb.)

(per gross

:

ton)

Scrap steel (per gross ton)

—

193

-—Jan. 23

4.131c

—-Jan. 23

$52.69

Jan.23

$46.08

—

of

December..
of

as

PRICES

spindles active

COTTON

GINNING

Running
Jan.

30

of

as

Dec.

30——

bales

Lead

Zinc

(New York)

(St. Louis)

U.

S.

Government

Active

spindle hours

DEPARTMENT

per spindle in

STORE

RESERVE

OF

N.

Aaa

—

24.200c

18.200c

24.200c

18.425C
75.250c

Jan.24

17.000c

17.000c

17.000c

12.000c

16.800c
.

^ 17.500c

16.800c

17.500c

•

•

~

/VI

16.800c

11.800c

47.500c

9.750c

'

•

■'

1,650,591
10,694,649

110,250

118,461

131,178

261,001

242,420

117,873

117,013

52,369

20,730,000

20,751,000

20,239,000

9,678,247

_1——

15,635,667

23,119,000

23,751,000

20,751,000

20,776,000
8,544,000

place Dec.

523.2

529.8

383.0

FEDERAL

441

296

*417

(average

dally), unadjusted

450

302

*409

(average

dailyseasonally adjusted—

266

234

239

306

*209

263

266

*229

unadjusted

STRUCTURAL

INSTITUTE

OF

closed

Contracts

Shipments

_a___!

STEEL

STEEL

(AMERI-

LIFE

INSURANCE—BENEFIT

POLICYHOLDERS

—

.

PAYMENTS

INSTITUTE

OF

*245,500

124;25l*

175,575

*167,059

135,500

$136,412,000

$141,539,000

TO

benefits

LIFE

!_*

101.45

101.30

103.75

115.82

115.63

116.41

Surrender values

Policy

120.02

119.82

119.61

121.46

118.80

118.80

il8.80

119.82

115.43

115.43.

115.04

116.02
:

110.15

109.97

109.60

112.93

112.75

112.19

111.62"

115.82

116.02

115.82

117.20,

Jan. 30

119.20

119.20

119.00

120.43-

Jan. 30

2.39

2.39

2.40

2.22

Jan. 30

2.85

2.86

2.87

2.83

2.65

2.66

___

—

dividends

Total

-

40,964,000

8,381,000

-/ 8,282.000

21,253,000

21,056,000

19,689,000

55,930,000

50.362,000

51,073,000

43,378,000

42,439,000

38,638,000

$304,642,000

$276,654,000

$1,458,000

$1,372,000

108.88

INSURANCE

LIFE

PURCHASES

INSTITUTE

—

OF LIFE INSURANCE—Month of December
(000's

omitted):

-

...

>

2.67

2.58

Jan. 30

2.71

2.71

2.71

2.66

Jan. 30

2.88

2.88

2.90

2.85

Jan. 30

3.01

'

3.17

vY-'V>,

3.02

3.19

*:!■'

3.05

■

Group

—

Total

-

-

{.DEPT.

,3.23

Month

3.08

OF

of

-Jan. 30

2.86

2.85

2.86

2.79

—Jan, 3Q

2.69

2.69

2.70

2.63

Durable

INVENTORIES

COMMERCE)

November

&

NEW

(millions

53,0.8

532.3

516.0

356.5

Jan. 20

218,278

262,530

171,484

189,449

Jan. 20

244,416

241,472

241,058

204,852

Jan. 30

Total

432,000

360,000

-865,000

488,000

$2,954,000

$2,669,000

-42,195,000

$14,964

$14,386

17,896

17,190

15,506

$32,860
21,538

*$31,577

$28,615

22,814

21,514

$27,228,000

$27,543,000

SALES

SERIES—

of

dollars):

_

—

at

.Jan. 20

104

106

105

92

_Jan. 20

705,371

746,287

598,431

371,395

MONEY IN CIRCULATION—TREASURY DEPT.
—As

of

Nov.

IN

PLANTS

Total

AVERAGE=100

152.1

Jan. 26

M5TOCK TRANSACTIONS FOR THE ODD-LOT ACCOUNT
SPECIALISTS

EXCHANGE—SECURITIES

ON

EXCHANGE

Odd-lot sales by dealers (customers'
Number of orders

shaies—Customers'

total

THE

N.

OF

Y.

151.5

147.7

122.3

ODD-

U.

jan. 13

51,396

.—Jan. 13

1,553,886

Jan. 13

$65,981,391

41,954 J

1,271,860
$52,861,134

36,232

40,999

1,117,986
$45,655,819

1,266.307

.

Number

of

motor

trucks

Number

of

motor

coaches

November

Total

I_I

Number of shares—Customers' total sales
Customers' short sales

13

47,785

36,895

38,339

42,534

jan"

13

514

415

310

421

I "IJan

13

47,271

36,480

38,029

42,113

jan

13

1,377,606

1,075,006

1,138,749

1,227,242

jan
__

"

Jan

Dollar value

IlUjan!

Round-lot sales by dealers—

13

18,543

15,981

12,217

15,448

13

1,359,063
$53,607,787

1,059,025

1,126,532

$41,367,877

$42,405,513

1,211,794
$42,177,839

13

IN THE

603,567

359,070'

504,445

292,009

118,874

98,538

66,698

664

584

OF

UNITED

369

13

365,040

298,860

392,430

417,850

jan. 13

365,040

298,860

3~9~2~430

4~17~850

jan

551,430

469,420

389,040

413,170

STATES

COMMERCE)—Month
;

Distributive
Service

v

income

disbursements

employer

:

—

industries.

industries

—

industries

4

Government

Less

contributions

employee

insurance

Other

labor

Total

Total

for

rented

interest

transfer

income,

income

and

dividends—

payments.——

nonagricultural income

'

•

:

231.1

151.3

150.7

154.3

153.8

133.4

68.6

68.6

55.5

41.8

41.9

39.0

19.2

19.2

17.8

24.7

24.1

21.1

205.7
•

.

131.3

:

3.1

3.0

....

and

*■',

:

231.9

social

income—

Proprietors'
Personal

PRICES

NEW

SERIES—U.

TURE—August,

—.—

—

3.4

3.4

46.1

45.7

19.3

19.2

2.1
3.1
■

A

41.7

;

17.2

11.8

12.1

12.4

213.0

212.7

187.6

DEPT.

OF

LABOR-

"

Livestock
_

Foods

~

All commodities other than farm and foods..
Textile products
*
Fuel and lighting materials
metal

products

~

IIIIII™
IHIII"

products

^Includes 563,000 brarels




FARMERS

DEPT.

1909-July,

OF

INDEX

—

i

AGRICUL¬

1914=100—As

15:

1

UnadjustedAll farm products
Crops

—Jan.23

179.9

178.7

176.0

151.3

—Jan.23

196.4

191.5

190.6

154.0

Food

grain

—Jan.23

186.2

,183.9

Feed

grain

Jan. 23

257.0

249.E)

184-£

160.3

244^

Jan.23

183.9

182.1

181.4

154.4

—Jan. 23

263.5

261.6

256.8

208.2

Jan.23

169.1

168.9

165.9

145.8

—Jan. 13

~

...

Building Materials
allied

Nov.

BY
S.

.
,

S.

—

Meats

RECEIVED

NUMBER —U.

'

13

of

Farm products
—-

PRICES

-

commodities

♦Revised figure,

640,674
521,136

'

1920—100:

Chemical and

..

——Jan. 13

Round-lot purchases by dealers—
Number of shares

Metals and

jan

__

—

Other sales

Grains

.___

(in billions):

personal

Total

\.V

Number of shares—Total sales
Short sales

All

Dec.:

Wage and salary receipts, total—_________

$46,609,715

Jan
_

sales

of

cars

Commodity producing

Number of orders—Customers' total sales
Customers' short sales

WHOLESALE

MANU¬

of passenger

of

1

sales-

(AUTOMOBILE

vehicles

(DEPARTMENT

purchases)—
sales!

FROM

Number

Odd-lot purchases by dealers (customers'
sales)—

■1

S.

$27,595,000

SALES

ASSOC.)—Month

number of

PERSONAL INCOME

COMMISSION:

;

other

FACTORY

STOCK

*

Customers'

(000's omitted)

30

VEHICLE

MOTOR

FACTURERS

*GIL, PAINT AND DRUG REPORTER PRICE INDEX—1920-36

AND

1

$13,109J

V

ASSOCIATION:

(tons)

Percentage of activity
Unfilled orders (tons)

$1,347,000 :

370,000

1,126,000

—

MANUFACTURERS'

Inventories:

—

——..

—

Industrial

Bonds

other

7,867,000

$305,847,000

—

_

$120,828,000
38,559,000'

40,493,000
:

Sales

Customers'

>

•

NATIONAL PAPERBOARD

Dollar value

^

INSURANCE—Month of November:

101.38

Jan. 30

COMMODITY* INDEX

of

.

,

224,803
•

Nondurable

Number

;

IIY

(tonnage)—estimated

116.02

3.16

DEALERS

*242

I

-

CONSTRUC-

(tonnage)—estimated

Jan. 30

Jan. 30

;

Railroad Group
Public Utilities Group

LOT

733,833

1,832,015

6,995,538

(average monthly>„ unadjusted

Jan. 30

Jan. 30

(tons)

1,008,872

1,998,850
6,663.560

23,149,000

Matured endowments

Jan. 30
__

.<,

Production

272.3

Sales

Disability payments
Annuity payments

Jan. 30
-

-

received

*305.5

Sales

Death
'A'-

Jan. 30

-

-

A

Orders

323.5

Sales

$26.75

24.425c

Aa

MOODY'S

993

December:

$45.13

150.000c

corporate

Industrials Group

i|o56

'■ 12,171,000

Ordinary

Average

996

i'i0go

Y. —1935-1939

of

*$46.03

MOODY'S BOND YIELD DAILY AVERAGES:
S. Government

3 454

1 249

9,376,000

DISTRICT.

BANK

AVERAGE=10O—Month

Stocks, seasonally adjusted—

24.425c

A

U.

5,443

3,703

SALES—SECOND FED¬

$46.05

176.000c

Bonds

Railroad Group
Public Utilities Group
Industrials Group

6,008

3,739
1294

20,730,000

omitted)

$52.69

AVERAGES:

.

(000's

$52.69

24.425c

-Jan. 24

-

6,093

Dec.—.

__

spindle hours

Stocks,

180.000c

Jan. 24

at

Aaa

4 561

COMMERCE):

3.837c

Jan.24

corporate

Aa

OF

4.131c

"i'V

Average

5i5i4

COMMERCE):
linters) prior to

4.131c
.

24.200c

Jan.24

DAILY

5,511

5,880

OF

of

(DEPT.

Active

232

-Jan. 24

at

at

MOODY'S BOND PRICES

2,795

297,087

—

SPINNING

CAN

at——

(East St. Louis)

3,652

TION)—Month of December:

-

Lead

(DEPT.

(exclusive

16

Spinning spindles in place on Dec. 30
;!—
Spinning spindles active on Dec. 30—_____

(E. & M. J. QUOTATIONS):

Electrolytic copper—
Domestic refinery at
Export refinery at
Btraits tin (New York)

3,085

3,629

784.057

Dec.

public storage as of Dec. 30—
Linters—Consumed month of December,
In consuming establishments as of
Dec. 30
In public storage as of Dec.
30—_________

FABRICATED
:METAI.

4,227

BALES:

month

consuming establishments

RESERVE

.Jan. 25

♦IRON AGE COMPOSITE PRICES:
Fin'shed steel

4,179

COM¬

In

BRAD-

&

INC.

10,441

7,879

___

LINTERS

Lint—Consumed

ERAL

(COMMERCIAL

FAILURES

$15 884

13,393

7,308

&
BRADSTREET, INC. (1935-1939=
100)—Month of December
;_____

COTTON

SYS¬

RESERVE

$19,401

13,319

_______

COAL OUTPUT

Beehive coke

$19,412

RE¬

short-term

30:

DUN

Cotton

(U. S. BUREAU OF MINES):
Bituminous coal and lignite (tons)
Pennsylvania anthracite ;(tons).

46^607

credit

MERCE
0

THE

credit

COTTON

T

construction

S.

U.

Private

9^692

CONSUMER PURCHASES OF COMMODITIES-

RECORD:

Total

45 790

13,731

Oct.

Charge accounts
Single payment loans

554,853

ENGINEERING NEWS-

—

Ako

;
59,449

credit

Nomnstalment

Year

62,915

credit

Automobile

"

*

'

—

Jan. 20
Jan. 20

of cars)

Month

—_______

Jan. 20

loaded (number of ca»-s)
received from connections (number

freight

Revenue

Revenue freight

Previous

_______

INSTITUTE:

PETROLEUM

OF

millions

Instalment

Service
AMERICAN

Latest

OUTSTANDING—BOARD

SYSTEM

in

of that date:

are as

Other

Jan. 20

at—

CREDIT

either for the

Month

Total consumer credit—

8,266,000

8,715,000

are

OF

'

Jan. 20

£•-,

—_—

(BUREAU

GOVERNORS

Jan. 20

oil,

of quotations,

cases

(in short tons)—-Month of October..,
Stock of aluminum (short
tons) end of

—Jan. 20
—Jan. 20

<bbls.)

output

in

or,

MINES):
Production of primary aluminum in the
U. S.

OF

and distillate fuel oil output (bbls.)——
Jan. 20
Residual fuel oil output (bbls.)
Jan. 20
Stocks at refineries, at bull: terminals, in transit and in pipe lines-

Kerosene

ALUMINUM

CONSUMER

.

gallons each)
—
——-————
runs to stills —daily average
(bbls.)

Gas,

that date,

Ago

1,963.400

2,017,000

Dates shown in first column

Year

'ft;

93.2'

100.9

on

(bbls. of 42

average

Crude

Gasoline output

month ended

or

Latest

101.3

4

month available.

or

_

PETROLEUM INSTITUTE:
and condensate output —daily

1MERICAN

week

INSTITUTE:

(percent of

Thursday, February 1, 1951

:;

.

of

'

foreign crude

180.7

179.7

V

171.3

V»>.«V

138.4

136.2

136.1

136.0

131.3

Jan.13

188.4

188.3

184.1

168.5

—Jan. 23

224.2

223.9

222.0

191.6

Jan.23

144.9

144.9

139.8

115.6

runs.

—

and hay—

,'Tobacco

191.3

Jan.23

——

-

"•!■'

.

|
'—1

'Cotton

——-

|

—

Fruit

.

|

276

268

250

238

210

224

219

215-

192

188

157

426
327

233

428
346
194

-

237

369

207

172

crops

183

138

213

Oil-bearing crops
Livestock and products

351

300

220

299

Truck

Meat

Dairy

-

animals

products

Poultry
♦Revised.

and

eggs

.

296

262

357

358

285

267
209

261

261

201

216
»•

_J

yolume 173

Number 4982

Continued

from

.

.

The Commercial and Financial Chronicle

.

Continued

2

page

from

page

that

6

be used.

may
broad

X two

Security I Like Best

ferred of 49,558 shares of $100 par

Selling thus at five times

and convertible into 3.47 shares of

ings,

stock.

common

'

and the size of the

rather

small

these years.

in

certain

eral

Now as to the point of
"tale": Reynolds Metals Co.'s

of

ferreds.

It pays $1, including

extra.

an

lmd for

a

completed

financed

1952,

in

Reynolds

plants

government

m<dude
foldings in Reynolds Re- that
search and Eskimo Pie, its ownership and interest

0ne

had heretofore rented,
to increase profitable

is expected

by

of

holding company of

the Reynolds Metal Co.

Dealer-Broker Invest¬

sub¬

large

ment Recommendations

sidiary purchase mortgage above
mentioned.
Naturally, under the

chure_R.

lavCisrwfthCdlvidendsmPany 'S

48 Wal1 Street' New York 5' N' Y'

Three

mines

bauxite

ated in Arkansas.
year

In

concession

Haitian

are

mines.

An

far

a

60-

taken

on

million
Jamaican

$11

w

preSsprich

Central

Maine

vs.

&

Nickel

Co.,

Plate

State Street, Boston 9, Mass.

If

do

we

not

go

this

meet

to

problem

money is

iong

as

1 have indicated that, in my

these

judgment, the overall program
adopted to finance World War IX
was inadequate. I feel also that
the Federal Reserve went too far
m the direction of inflexibility,
profited by that experience
as the subsequent record shows,
\ ask y°u to look at that recora.
" speaks for itself, it exemplifies
more eloquently than any words

securities,
dethe
purchasers as a whole must hold
on to them, not redeem them or

vested

far

in

government

their

inflationary effect is
ferred — that
means
that

sell

to-

to

them

in

I wish

the market.

emphasize that

so

long as these

funds remain invested in govern-

j

for one' am wini"g to sPend ment securities, their inflationary

peoSe^f^'the^ountrTare*wiiling
?or!And IamwilUng "o
of our ability to

to tbe

*tert^'effectWeness and
kefstone of deM-

.

loan

.

will develop

,

.

.

Aiwlysi^

.

.

carriages.

the "«ds of the times,

Savings—Final Essential in

A.

Higher Dividends
With

and

price

Likely

&

Iron

annual

cliffs

Iron,

The $0.25

quarterly
be supplemented by

dividend may

extras,

in 1950.

as

Ingot

output

months will
000-ton

coming

over

at around a

run

annual

250,-

compared

rate,

with 225,000 tons for most of 1950.

The- increased

ingot output

and

larger facilities will raise fabrieating tonnage. Sales will further
reflect price rises of $0.02 and
.

„

rvpatpr
uieax

since

more

May, 1950.
,
.
.......
combined with price in-

,

output

will

creases

despite

widen

costs.

m

rises

margins

the

As

Inc., 650 South
a—i—
Angeles „

Also available

Riverside
Card

Co.,
ton

and

Cement

memorandum

,

,

,

on

Step

Cleveland

CompanyA

Lerner

—

10 Post Office Square, Bo«9, Mass.
available

is

a

People

being Sundered for noilessential Certain^ if^ we have

are

The point must be made that at

Electric

Company

—

Broad
croau

„tw
mm ,
«
i
Street, New
York
4, N.
Y.

oueei

JDloau ou

"ew

lmK *> "•

against their will and ask them to

-

Union

Oil

seems

the

of

at greatly
from original cost

government

those' properties,
as
well as
from
over-depreciated

credits

against normal depreciation which it fairly estimated
and
valued should add

properties

as,

me

if

Pnc^
are

»
not unthose who

we

asking

in

give

to

him

at

o1i

.

.

that

some-

un

tmL
inin§*
First Principle, a Balanced Budget
fundamental

pi5°' ="

inflation

f ghtinv

uJ ® ' I

Kidder,

TS

u

and

nrinis

a

nreferablv

recefnts
substantially'in
receipts^suDstam a y

excess
^

of

t

$50

common v

should

to

book

These

stock.

work

out

torily for. the EPT
ment

basis

record.

value

rather

figures

satisfac¬

very
on

an

than

invest¬

•

VVlttl

^

tion.

earnings

The company's poor past
4

oirntnrt/.

r»

4

r\

ila

1

earnings record is due to the lack

of

a

You may

Joins Field Co. Staff
Oreg.

—

Deal

Robertson

measure

C* C\

Tnn

Plrlrt

*

Field & Co., Inc., Cascade Bldg.

defined place in the country's

economy which now as one of the
world's largest producer of alum¬

inum it has reached.

culties

in

Ralph J. Anderson With
The Marshall

Also, it has

been enabled to iron out its diffi¬

manufacturing

effi-

cently advocated a "quickie" tax
to plug this gap.> I have

O.

i

Wilkins ds now connected with
Xr

have noticed that my
friend, Senator
of
Virginia, has re-

distinguished

(Special to The Financial Chronicle)

PORTLAND,

Company

(Special to The Financial Chronicle)

in

fighting

people from saving. The average
working man who buys E Bonds
is investing money that he would
About one-fourth of our total ordinarily put into gadgets or litexpenditures in World War II was tie richer cuts of meat. The real.

multiple expansion of credit.

™sed through borrowing from significance of the E Bond cam-

lhe banking I system. As a result, paigns is not only to get people
our total money supply more than -to save and thus help to combat
doub]ed
duHng the war>
since inflation, but at the same time to

then U has risen furlher. aud t0" give them a financial stake in the
daV a™aa"ts to over $175 billion, government. This is the same
principle that has led enlightened
World War II Experience
businessmen to encourage em.

_¥

I would like to summarize the
main lessons from our experience
Jn

niovee stock ownership.

\

am,

financing World War n_first>

convinced that, even

purchasi£g po^er

^

-

in *inancing World Waf H—first, though the purchasing power thi
ot
we dld not tax enouShi second, the dollar has diminished, the
t0° large a p°rti011 of the bor" people whose E Bonds are maturrowing
thereby
required
was jng this year will have more to

raised through the banking sys- show for their dollars than would
tem^ and thlrd- to° large a por" otherwise be the ease. Those de¬
tion of the funds we raiscd fr0? lars would have gone into many
nonbanking sources which, though things and they would have little
tl,ey wer? saved a.l,.theJ t,ale' d'a or nothing to show for them tonot remain immobilized alter

the

the broader point

prom

rlav

of

"support for

oi!

our governthe boys in

Right

the

of

essential

inflation is the pronation of savings.
i have no use for those who
scoff at the E Bond campaigns
today. They simply do not realize the implications of their statements wnen they discourage

infi a firm
lnnauon.

.

about

final

ammun11
8
0f the postwar period witn which ment> some> like
we
are
all so painfully familiar Korea,
are
risking their livey,
now—before the rate of resulted in large part fiom the others devote their talents to
defense
spending
builds up—is expancied money supply and also pukiic service, still others take
econour chance.
Never has our econ from the gales of government se- leadership in civic affairs.
But
omy
been
more
prosperous
Never have we been in a better bank:S) and other lenders to the something to* invest "in governposition to absorb higher taxes pecierai Reserve System.
Too menf securities,
without impairing that economy. many individuals and institutions
<pbe lessons of ' what" inflation

California—Dis-

W
*/i
isWhen I read that it may be the
Inomson, McNinnon end of summer before a tax pro(Special to the financial chronicle)
gram can be enacted, I think
CLEVELAND,
Ohio—John d. strongly we are wasting ^six or
stewart is now with Thomson & seven months we ean il -aftord to
lose in the battle against miia
McKinnon.

ii/'.f

The

Umrmoree\mmunUion1toafieght war*"The' infiatio'ilary" problems

cussion—Francis I. du Pont & Co.,
1 Wall Street, New York 5, N. Y.
pany in that common stock equity
Also available are a list of serepresents about 35% of the com- lected stocks offering interesting
pany's capitalization.
However, potentialities and a memorandum
there
are
large credits flowing on a switch suggestion for General
from certain operations by which Motors.
the company
obtained property !
reduced^ price

to

reasonable

17 Wall Street,

of

.

1U

the greatest

pay

Transcontinental Gas Pipe Line

Corp.-Progress report

draft 18-year-old boys

the right to

stated book value Reynolds Metals
Co. is a highly leveraged com-

from

not

hv

Circular—Joseph Mayr & Co., 50

storv—know

the

know

that the dollars
dollars taxed
taxed out.oi
out of tneir
their
that*the

Co.
:

apportioned

are

willing to sacrifice

are

thpv

if

New York 5. N. Y.
New
York 5, N. Y.

,

moderately adverse, y "v."'.'

tbe taxes

.n the proper way

-

memoran-

dum on Gear Grinding Machine
Sprague

seriously impair the econ-

om

.

Also

fPTexemption
should be high, Peabody & Co..
higher tax rate should be only

the

data

are

Mines

w0uld

•"*

Los

Calif,

R0ck

-

t

Avenue>

continuing favorable, early 1951
profits should be at an improved
rate.

Co.,

a

Grand

factors

output

Allen

Steel—Data—Floyd

Fighting Inflation

The limit on our ability to

pay.

—

Portsmouth

work^nceasindv

for a Pr°Sram adequate to meet

crucial
— be a
management policies.

The trouble arises, as it has in
Verney Corp.
pay is not measured so much by the postwar period, when these
ore.
the personal sacrifice as it is by securities
are subsequently sold
Reynolds
anticipates
substanMetals Disintegrating Co. — the
possible v impairment of our either by banks or nonbank investially increased use of aluminum Analysis—Butler, Moser & Co.,
economy.
It seems to me that is tors, particularly when they are
for
helmets, bazooka guns, ba- 44 Wall Street, New York 5, N. Y.
the only consideration—the pos- bought by the Federal
Reserve,
zooka rockets, portable pipe and
Mid Continent Airlines
Tne
sible impairment of our economy. Then the banking system is fur—
Walston
v,awiuu,
iiuxiuiaii
Hrf'fmaii oc If we tax too heavily we nished with "reserve dollars."
arnm^°rne f^vlpm+r? VmC •
g Goodwin, 265 Montgomery Street, could impair it, but I have not These have accurately been called
♦ri,r£0 and infl
JiLl gun San Francisco 4, Calif.
heard any amount of taxes rec- "high-powered" dollars because
irucKs
iub-miiiimeter
ommended yet that, to my mind, they can become the basis for a
ECA

instruments

quired.

So
in-

investment.
funds remain

can

Reserve to restrain credit expansion. It appears likely that further restrictive action may be re-

being absorbed

for spending and

selective

banks

Both types of measures have already been used by the Federal

that would otherwise be available

day.

pay

analysis of

an

My

enough, then the threat of attack
becomes greater because we will
not be prepared.
Therefore, we
must bring sound judgment and

-Analysis-Raymond & Co, 148
Also available is

sustained.

during this period, the people
not continue to support the

reason

oper-

1943,

was

be

The

the

influence

that

market loans, regulation of consumer instalment credit and similar regulation of mortgage loans,

companies
mutual savings
banks
and
other
reservoirs
of

started, it must b^ savings,

can

lend.

can

funds

of

place
limitations
on
particular
types of credit.
These
include
margin
requirements
on • stock

ance

we have

Reserve

supply

bonds and from insur-

of savings

greatest fear is that if we go-too
will

rentals.

this

in

age

that

program.

operations

the

for

accounts

the 54.9%

in

concentrated

is

of

come

military force and have
well thought-out program.
Now

a

they

which

eliminations

must

matter of

be

government, for 75,000 additional tons.
The purchase of six

This

in

by

the

the

interest

79%

a

Metals Co.,.also other investments

adddlon'
P ans +l^a,ve
new plant that will

i

has

While the U. S. Foil Co.

in¬

group

market operations, and the
fixing of reserve requirements,
through the use of which the Fed¬

this We have been like a pendulum, system.
/
a
com- At times
like Pearl Harbor we
When funds are raised directly
1950
against $3.82 in
1949.
It mon stock is selling at 40% and have gone to great lengths, spent from the banks, the money supply
should prosper by the armament United
States Foil Co., Inc., is money to any degree to get secur-' js immediately increased.
This
program (by the manufacture of selling at 303/4.
Why should they ity.
And then when the imme- adds to civilian buying power and
aluminum).
It has never failed be selling at about 10 points dif- diate
threat
was
over,
the in a period when scarcities preto earn some money every year ference?
The only difference is pendulum
swung
to the other vaR> builds up inflationary presin the last 20 years except that in
the very minor capitalization as extreme where we were willing to sures.
'
the periods of 1942, 1939, 1938, above stated of a nominal debt of pay for very little in the way of n
To'the extent that we borrow
1937 and 1932 its earnings have $263,671 and 6,771 shares of pre- military forces.
from individuals through the sale
been

first

The

open

that raised through the banking

military forces,

of.

are

cludes measures, such as the re¬
discount
rate,
Federal
Reserve

System in Wartime

earn-

it represents attractive

speculative possibilities.

The company should earn $8.50
common share (after taxes) for

struments.

Role of Federal Reserve

They

types—(1) general in¬
and
(2) selective in¬

struments

The

33

(553)

a

11-

xi-

a

that the government's
ild
urol nnm o
911
tax
experts would welcome an
opportunity to provide the Congress with specific recommendations for attaining this objective,

n0
-

doubt

i.

I

that

am

realistic enough to know

there

is

a

real

danger that

J. the government will eventually
be running in the red despite the
earnings
of
last
year, Ade
as °e
e
efforts to put the defense program
has not yet seen its dy- with The Marshall Company, 765
nay-as-you-go basis.
If we
possibilities fully devel- North Water Street. Mr. Ander- do start borrowing again, we must

]iqUklated all or a portion of their doeg to a man's savings are somebonds and spent the cash or re- ^ing we cannot overlook if we
invested it as opportunity pre- are f0 escape serious social repersented itself.
cussions in the years ahead. The
We must do our utmost to avoid difliculty is that the innation
repeating these mistakes.
process
is not unlike a habitIn
addition to
financing the
forming drug that lulls our sensigovernment as much as possible bilities to these realities. Actuthrough taxation and borrowing all
inflation as we have thun
from nonbank investois, the next fa4, expericnced it in this country
requisite for fighting inflation is hag not been hard to take. Wages)
to restrict
credit.
Credit of vahave increased faster than prices.
liva/lf
unci
kcvon
i ht"
rious kinds has been vital to the gusiness- profits have arisen to
HpVPlnDmPnt. Of thlS TOlintlV. CreUdevelopment of this countiy. Cred- unprece(jented levels. The farmer
it is absolutely essential for the bag enjoyed substantial gains i«
defense effort as well as for the re£d income. Consequently, it ia
sound functioning of the economy.. extremelv difficult to get the pub-<
.

tritdl

td

.

.

1

Bu^.Jv"e have had fai*

credit for the Postwar inflationary

pa"°.mJ

1

.

*

1

lie as a whole to fight an enemy
whQ masquerades as Lady Bount*-

„m2ress
should se- fuL
economic progress weshould se
I£ wg are to conquer the inttarestr'" c,ed,t '
? tionary forces inherent in our
which
milation and be libeial wilh cred- present situation, we must deal
namic
in periods of recession. This m tbe fundamental causes I
oped. In fact, as per dollar of son was formerly Middle West not forget that some^kinds of bor- 'task is; thei statu ory responsib.L- haye discussed.
/ Only because so many of my
wholesale representative for rowing are much more inflation- 1 yJt ig not necessary her;
friends in Philadelphia have asked
top
of
the
other
companies, Vance, Sanders & Co. of Boston, ary than others, and that the most m0re than enumerate the various
Continued on page 34
namely, Aluminum and Kaiser, with headquarters in Chicago.
inflationary source of money is instruments of credit regulation

ciency.

record

This

is

evidenced




in

its

MILWAUKEE,

Ad

,

Wis.—Ralph

become

we

associated

_

.

,

34

The Commercial and Financial Chronicle

(554)

Continued

Role of Federal Reserve
"What

vidual

answer

indi¬

an

as

prob¬

to suggest
to this question.
"

sential?

such

vital

a

attempt

I

that

behavior

the

attention

the number

have
required

needs

lem

the

well.

as

on

the

full

amount

they

business

flation

when a part, or a larger part,
might have been paid off?
These
same questions apply to insurance
companies and all lenders.
The

business

sum

directors

you

officers and

are

of

kinds

various

of

enterprise
throughout
this community.
In your various
capacities you can make valuable
contributions to the fight on in¬

by making sure that the
is not accumulating ex¬
cessive inventories, or following
other policies that contribute to
inflation.

asked

a

A

short

group

of

time

ago

supply
of

I

has

is

but

of

today—inflation—and on
comprehensive approach that

ingness

swelled

power

reflected

Nov.
par

1

filed

($1

per

Mines

Corp.,

rise

not

Co. (2/13)
exceeding $420,000,000 12-year 3%%
convertible debentures due March 19, 1963 (amount ex¬
pected to be in excess of $410,000,000) to be offered to
filed

not

stockholders of record

Jan.

basis of $100 of
shares of stock held; rights
to expire on March 19, 1951. The debentures will be con¬
vertible into capital stock beginning June X, 1951, at $138
per share, payable by surrender of $100 of debentures
debentures for each

29, 1951

and payment of $38 in cash.
amount.

to

on

seven

Price—At 100% of principal

Underwriter—None.

Proceeds—For

advances

subsidiary and associated companies and for general

corporate

purposes.

Statement effective Jan. 24.

tors

1966.

Price—At 100.

Underwriter—Direc¬

and

employees may be salesmen.
Proceeds—To
develop and expand agricultural, industrial and commer¬
cial enterprises in Israel. Statement effective Jan. 9.

Argo Oil Corp., Denver, Colo.
Dec. 18 (letter of notification) 5,750 shares of capital
stock (par $5).
Price—At the market (approximately
$17.37% per share). Underwriter—Carl H. Pforzheimer
& Co., New York.
Proceeds—To A. E. Johnson, Presi¬
dent, the selling stockholder. Office—1100 First National
Bank Building, Denver, Colo.
•

Armco

Jan.

30

Steel

filed

a

Corp.

(2/26)

maximum

of

884,000

shares of

common

stock (par $10) to be offered for subscription by common
stockholders of record Feb. 26, 1951, on the basis of one-

fifth

share

for

each

share

rights to expire on
supplied by amendment.
Underwriters—Smith, Barney & Co. and W. E. Hutton &
Co.
Proceeds—For expansion program and additional
working capitals

March

14,

1951.

Price—To

held;

be

Atlantic

Oil Corp., Tulsa, Okla.
(letter of notification) 48,046 shares of capital
Price—At par ($5 per share). Underwriter—Con¬
tinental Corp., Tulsa, Okla. Proceeds—To purchase oil
and gas properties.
Nov.

Atlas

Proceeds—For working capital.
B.

&

H.

stock

preferred and

share.

Price—$10.50

to

comprehend

evil

cumu¬

per

unit

the

source

of

We live

Office—513 Carondelet Bldg., New

•

Bayway Terminal Corp., Elizabeth, N. J.
24 (letter of notification) 3,500 shares of capital
stock (par $1).
Price—$2.50 per share as to 2,500 shares
Jan.

shares.

(about

$3.50

Proceeds—To

/Share)^as

to 1,000
New York,

Plfl®^;
stockholdef.^^^t^ '"

Underwriter—James

N. Y.

C6l, Inc., New /York,

per

selling

J.

Botany Mills, Inc., Passaic, N. jJ*x&K&f&xstt4"Jan. 24 (letter of notification) 5,000 .shares «f common
stock (par $1).
Price—At market (estimated at about
$ll.r<5 per share). Underwriters—P. Et*Fox & Co., New
York, and H. M. Byllesby & Co., Inc., Philadelphia,. Pa.
the

selling

Johnson, Jr., Vice-President,

stockholder.

Acceptance Corp., of Allentown, Pa.
Brown

Co., Berlin, N„

fered

in

exchange for 144,151

shares

of

$6

cumulative

convertible preferred stock on basis of one share of each
class of preference stock for each share of $6 preferred'
stock.

Underwriter—None,

solicit
•

Builders

Jan.

Georgeson

&

Co.

will

•

par).
Price—$23 per share.
Underwriter—
Brown, Lisle & Marshall, Providence, R. I. Proceeds—
To The Young
Orchard Co., the selling stockholder.
Offering—Made on Jan. 29. All sold.
•

Bureau of
D.

Jan.

18

National

1,000 shares of

common

stock (no par) to be offered to employees.
Price—$17 per
share.
Underwriter—None. Proceeds—For

porate

Office—1231

purposes.

24th

St.,

N. W.,

cor¬

Wash¬

ington, D. C.
•

Canyon Gold, Inc., Cripple Creek, Colo*
v
(letter of notification) 5,000,000 shares of capital

Jan. 22
stock.
son

Price—At par (10 per share).

Allen

Cleek, of Spokane, Wash.

operations.

Office—209

East

C. Langley & Co. and First Boston Corp.
(jointly);
Kidder, Peabody & Co. and Merrill Lynch, Pierce, Fen-

& Beane

curities

(jointly); Lehman Brothers; Equitable -Se¬
Corp.; Smith, Barney & Co. Proceeds — For

construction program.
noon

•

Private Wires




to

all

offices

(EST)

Central

on

of

25

Light Co.
shares of

stock

(no- par)

stockholders of record Feb.

heldt-/iWith

Glass Co.

of

West

offered in
Public
of

Louisiana

Electric

250,297 shares of

Co.,

Inc.

common

exchange for shares of common stock of Gulf
Co., Inc., on basis of 4/10ths of a share

Service

and

common

share of preferred for each

a

The

remaining 35,497 common
possible future issuance and sale

reserved for

are

by the

l/25th of
share.

common

to holders of common stock then out¬
Underwriter—None. Purpose—To acquire not

company

standing.

less than 429,600 shares
Circle Wire &
Nov. 27 filed

(80%) of Gulf

Cable

stock.

common

Corp.

200,000 shares of

common stock (par $5).
share. Underwriter—Van Alstyne Noel
Corp., New York. Proceeds—To four selling stockholders.

Price—$15

per

Coconut Products,

stock

Inc.
♦
(letter of notification) 4,000 shares of preferred

$1)

(par $50) and 8,000 shares of common stock

to

offered

be

shares.

common

in

units

of

Price—$52

Proceeds—For

None.

preferred

one

per

unit.

Edison

Co.

of

(par

Of¬

purposes.

11, N. Y.

•

N.

Y., Inc. (2/27)
refunding mortgage
bonds, series F, due Feb. 1, 1981.
Underwriter—To be
determined by competitive bidding.
Probable bidders:

Halsey, Stuart & Co. Inc.: Morgan Stanley & Co.; The First
Boston Corp. Proceeds—To repay bank loans; Bids—Ex¬
pected to be opened week of Feb. 26.
//,■/;/
Consolidated Textile

Inc., New York :
shares of capital
stock (par 10 cents), to be offered in exchange for an
unspecified number of shares of common stock of Bates
Manufacturing Co.
(Consolidated now owns " 51,400
shares, or approximately 13% of the 391,500 outstanding
Bates shares).
Exchange Rate — To be supplied by

Dec.

27

filed

amendment.

a

maximum

Co.,
of

500,000

Underwriter—None.

;

-

—At face value.

4 J

Commerce to

construction of hotel.

.

Copper Canyon Mining Co. <2/2) "
Jan. 25 (letter of notification) 500,000 shares of capital
stock

10 cents). • Price—At market (about 21 y2
share). Underwriter—Hunter & Co.. New York.
For mining development, installation of

(par

cents per

—

equipment and for working capital.
Crown Finance Co.,
25

nated

-

/

r"

.TTr»r

I

-

f

/

Inc., New York

(letter of notification) $50,000 of 5% subordi¬
1, 1980.
Price—At principal

debentures due May

in denominations of

$1,000, $500 and $100 each.

Underwriter—Hodson & Co., Inc., New York.
.

.

secure

•

amount

'

Co., Inc., which com-,

will construct Dallas hotel. Business—A non-profit
corporation under sponsorship of Dallas Chamber of

ordinated

.

Price

Proceeds—To pur¬

pany

•

notes, to be sold in units of $1,000 and $500
Columbus, Ohio. Pro¬

Underwriter—None.

chase debentures of Statler Dallas

.

/

Cosmopolitan Hotel Co. of Dallas, Tex.
Dec. 13 filed $1,500,000 of 2% debentures due 1965.

Jan.

,

two

and

Underwriter—

general corporate

fice—460 West 24th Street, New York

Virginia, Inc.

-

an,v

which

18 (letter of notification) $125,000 of 12-year 5!£%
sinking fund debentures and $50,000 of 5-year 6% sub¬

Underwriter—The Ohio Co.,
ceeds—To retire bank loans.

<134

stock (par $10)
21,480 shares of 4.5% preferred stock (par $100), of
the preferred stock and 214,800 shares are to be

and

up

Statement effective Jan. 24.

•

(2/13)
common

share for each eight shares

one

filed

Proceeds

Bids—Expected to be received

Feb. 6.

Jan.

each.

y

100,000

be

ner

Chicago

Illinois

Central

Jan.

Cripple

W.

Cleveland

share

one

Underwriters—Union Securities Corp.; Leh¬
Brothers; White, Weld & Co.; and A. C. Allyn 61 Co.,

man

Capitol Hill Associates, Inc., Washington, D. C.
10 filed 25,000 shares of
non-voting common stock,
offered to members of the Republican
party and
others.
Price—At par ($50 per share).
Underwriter—

to

stock (par $15) to

amendment.

Jan.
to

Co.

Gas

&

common

Inc.—Proceeds—For expansion program.

Underwriter—Mel-

St.,

of

stockholders at rate of

oversubscription privilege subject to subscription?/rights,
of employees to expire on Feb. 28. Rights to stockholders
to expire on March 2, 1951.
Price—To be supplied by/,

Proceeds—For min¬
Bennett

Electric

Jan. 24 filed $60,000,000 of first and

C.

(letter of notification)

ADDITIONS

INDICATES

shares

seven

Consolidated

Affairs, Inc.^ Washington,

the

general welfare."

common

filed

25

at rate

•

(no

We

to

at large, and serve the
general intelligence as well as the

Illinois

Central

Jan.

Jan. 25

Iron

Foundry, Providence, R. I.
'
(letter of notification) 1,080 shares of common

19

stock

but

thoughts

our

program.

exchanges.

Power & Light Co.
(2/6)
$15,000,000 first mortgage bonds due Feb. 1,
1981.
Underwriters—To be determined by competitive
bidding. Probable bidders: Halsey, Stuart & Co. Inc.;

Pittsburgh

each

shares

Jan. 25 filed 144,151 shares of $5 cumulative convertible /
preference stock (no par) and 144,151 shares of $3 cumu¬
lative second preference stock (no par), together with
voting trust certificates representing the same, to be of¬

open

country

in comment¬

Central

Gulf

H.

intelli¬

held, with an oversubscription
privilege. Price—To be supplied by amendment. DealerManagers—Stone & Webster Securities Corp. and Allen
& Co., both of New York.
Proceeds—For construction

Carolina

San Francisco

must

an

SINCE PREVIOUS ISSUE

•

Plastics Corp., Mineola, L. I.
(2/14)
(letter of notification) 100,000 shares of common
stock (par 5c), to be sold to highest bidder at
public
auction by Adrian H. Muller & Son, 39 Broadway, New
York.
Price—It is not anticipated that the aggregate
sale price will exceed $100,000.
Proceeds—To General

Jan. 4

•

such

matters

such

.

.

.

in the discussion.

part

•

•

Jan. 4 filed

Boston

gent

to be offered to common

•

Proceeds—To Charles F. H.

of

talking about and take

are

incomparable

our

Woodrow Wilson,

Proceeds—To erect new building for Republican
headquarters and club house. Statement effective Jan. 19.

Philadelphia

to

strength and of the hopes of free
peoples throughout the world.

None.

New York.

and

whether
that would

forces,

for

market

to

seek

enable
men
of
every kind and
calling to understand what we are

vision

12, La.

at

should

and such general cur¬
rency and such simplicity as will

be offered to

and

applica¬
accumu¬

give the dis¬

For

reoffered to J. Arthur Warner &

of the vast

use

country;

Jan. 29 filed 80,000 shares

Orleans

of

man

man

lated wealth of this

Registration

working capital.

every

the

Creek, Colo.

*

19,397 shares of 6%

$10) and 58,940 shares of
(par 50 cents) to be sold in units of one

one common

voluntary self-restraint.

every

upon

cussions

patience with

or
at home,
destroy the institutions which

of

a

We

and 50 cents per share for common stock. Underwriter-—
Woolfolk & Shober, Inc., New Orleans, La. Proceeds—

ing

Incorporated, New Orleans, La.

Jan. 8 (letter of notification)
lative preferred stock (par
common

force

little

which

publicity

general

Finance Co.,

Inc. (Ga.)
Jan. 22 (letter of notification) 12,750 shares of cumula¬
tive convertible prior preferred stock (no
par). Price—
$23.50 per share.
Underwriters—Clement A. Evans &
Co., Inc., and Norris & Hirshberg, Inc., both of Atlanta,
Ga.; and Johnson, Lane, Space & Co., Inc., of Savannah,
Ga.

the

have

can

in

who have to do with the

tion and

the

and

sense

a

country forces states¬

those who say the American pub¬
lic lacks the courage, the will and

abroad

of others, to
spending, or to
sanction.
Let us

part

social

view

indi¬

bankers and upon all those

upon

>

conquer

such

underestimate

in

13

stock.

•

of

it

It

in

field,

.

will¬

demonstrated

end

the

Brilhart

Ampal-American Palestine Trading Corp., N. Y.
Dec. 8 filed $5,000,000 of 15-year 4% sinking fund bonds,
series A, due

the

on

the

American Telephone & Telegraph
18

ing

in

80,000 shares of common stock. Price—At
share). Underwriter—None. Proceeds—For

is

This

to finance such spend¬

countenance

give

further development of mine and for working capital.
Jan.

money

market

Calif.

Hollywood,

self-restraint.

time

no

the

Proceeds—For investment.

Gold

is

I

leadership in the practice of

dollar,

the

preserve

credit

and

capable of
leading anybody; and this I be¬
lieve to be the particular period
when
statesmanship
is
forced

to undergo sacrifice, su¬
sacrifice, once we under¬

need.

will

us

agant, to spend unnecessarily.

to

Under¬

if each of

time to splurge, to be extrav¬

no

increment

Now

•
Affiliated Fund, Inc., New York
k«Tan. 26 filed 5,000,000 shares of common stock.

Alhambra

take

come

voluntary

marginal

the

an

stand

Undoubtedly, the greatest result
of all will

to

have

we

preme

is needed to deal with it.

prices, wages, and costs in general,

Securities
writer—None.

these

added

and

buying

that

these

bankers

of

total

amounts

questions: How many loans have

r

have

bor¬
rowed?
In how many cases have
you
renewed or extended loans

of

manship
initiative,

It is true that sacrifices will be
necessary

unresolved prob¬

"

Many

democratic

Inflation is not inevitable.

what I consider to be
one

"There, is

Can Avoid Inflation

You

monetary

vidual in this way:

restraint.

immeasurably to focus

help

can

six
es¬

In how many cases

level

the issues of his day in

upon

summarized the role of the

We

be contagious.. So can

gance can

your

national

approved..

are

Thursday, February 1, 1951

.

the

of(

know that hoarding and extrava¬

Col¬

by civic groups.

that

ing

we

Furthermore, there are great
opportunities for action in this

influence may be
multiplied not only locally, but on

past

really

not

were

customers'

your

the

during

made

you

months

lem?", will
an

do

I

can

about

and

respond in our actions to forms

emergency

System in Wartime

environment

social

a

the market today.

lectively,

me,

in

scarcities that pervade

and in the

from page-33

.

.

xirnrlriricf

rnnital

Proceeds

Volume 173

Number 4932

.

.

Indianapolis Power & Light Co. (2/7)
9 filed $6,000,000 of first mortgage bonds due Feb.
1, 1981. Underwriters—To be determined by competitive
bidding. Probable bidders: Halsey, Stuart & Co. Inc.;
Blyth & Co., Inc.; W/C. Langley & Co., Shields & Co.
and White, Weld & Co.
(jointly); Lehman Brothers,
Goldman Sachs & Co. and First Boston Corp. (jointly);

Culver Corp., Chicago, III.
Oct. 23 filed 132,182 shares of common stock (par $5),

;

Jan.

-of which 4,818

shares are to be offered to stockholders
127,364 shares to public. Price — To stockholders at
per share and to public at $6.25 per share.
Underwriter—None. Proceeds—For investments.

NEW ISSUE CALENDAR

and

$5
.

February 2, 1951

*

Realty & Securities Corp. (2/14)
Nov. 20 filed 300,000 shares of 6% cumulative convertible
preferred stock (par $5) and 300,000 shares of class B
common
stock (par 35 cents) to be offered in units of

-

one

preferred and

class B share "on

one

tion for resale to public.

.

There will be reserved for

Instrument

February 6,

con-

version of the preferred stock 1,300,000 shares of class B

„

Emerson Electric

Bros.

capital.

ing offered to

—Preferred
L__
..Bonds

Mfg. Co

Diversified

•

Funds, Inc., New York
1,000,000 shares of 23 series of special stocks.

Jan. 25 filed

.

11

Underwriter—Hugh W. Long & Co.,
Inc., New York. Proceeds—For investment. Meeting—
Stockholders of New York Stocks, Inc., will on Feb. 15
vote to change name of that company to Diversified
Funds, Inc.

Duggan's Distillers Products Corp.
Oct. 27 (letter of notification) 340,000 shares of

*

writer—Olds & Co., Jersey City, N. J.
balance of purchase price for building

Duraloy Co.,
Jan. 11

Central Illinois Light Co

com-

February 14, 1951

Proceeds—To pay
($20,000) and for

Electro

•

:

Refractories & Alloys

Jan. 24 (letter of notification)
lative

convertible

($50

par

per

Buffalo, N. Y.
additions

for

'.

.

Corp.
Dansker Realty & Securities Corp
Facsimile & Electronics Corp

29

stock

>

-

Jan.

Armco

preferred stock, series A.

buildings.

Electric

filed

57,846

A

series

Offering—Expected

at rate of

None.

Common
Bonds

Corp...
...

by

Manufacturing Co.
shares

of

7, 1951

March

$50), convertible into common
1, 1961, to be offered initially for
stockholders of record

common

Feb.

one

Common

23,

1951

March

30,

1951

Bonds

/

York; and Newhard, Cook & Co., St. Louis. Mo. Proceeds
—$1,015,565 to be used to retire presently outstanding 7%

Jan.

Common

April 3, 1951
Georgia Power
;

'.-L

Co

Bonds

,

Eptomac. JJdison, Co.T^^.^TVTri._rr ^.^Bonfls

$450,000

stock;

to

cover

the

cost

of

a

new

plant in Bedford, Ind.; approximately $350,000 to reim¬
burse the

company's treasury for cash funds used in the

April 24, 1951

in

September, 1950; and
additional working capital.
Facsimile & Electronics

the

balance

to

(2/14)
convertible stock

Corp.

(par $1) and 1,000,000 shares of common stock (par 25
cents) to be reserved for conversion.
Price—$2.50 per
share for class A stock, with an underwriting commission
of 50 cents per share. Underwriter—Graham, Ross & Co.,

*

*

Inc., New York.
Proceeds—To repay indebtedness to
RFC, and the balance to develop and produce fascimile
transmission equipment and for materials.

"

Elm

Office—41
•

Fiduciary Association, Boston, Mass.
Jan. 23 (letter of notification) 2,000 memberships
represented

Proceeds—To provide

Underwriter—None.

each.
!

(not
Price—Estimated at $5.80

by certificates).

ket for the

*

10

outstanding shares of common stock.
Post Office Square, Boston 5, Mass.

•

Jan.

a mar-

Office—

Fiduciary Trust Co., Boston, Mass.
23 (letter of notification) 2,000 shares of common
Price—To

stock.

business

on

be

Underwriter—None.
stock.

ferred

value per share at close of
(estimated at $135 per share).

asset

Feb. 23, 1951

Proceeds—To retire shares of

Office—10

Post

Office

Square,

pre¬

Boston

5,

Mass.

Fleefwood-Airflow,

Inc., Wilkes-Barre, Pa.
(letter of notification) 28,000 shares of common

Jan. 22

stock (par 50 cents).
Price—At market (estimated at
$1.25 per share).
Underwriter—De Pasquale Co., New

V
"

York, and J. Howard O'Connor, Pelham, N. Y.
—To
,

•

V

selling stockholders.
24

stock
$20.59

-

Fair Stores,

Food

Jan.

Proceeds

(letter of

$1).

(par
per

share).

New

York.

pired

on

Inc.

Proceeds—To

holders

of

scrip

which

ev-

General

Instrument Corp.

(2/5)

Jan. 2 filed 221,715 shares of common stock (par $1) of

„

which 121.715 shares
holders

of

record

are

Feb.

to be offered to common stock¬

5

'

the

rate

of

one

share

Dec.




filed

28

159,142

shares of class B

stock

common

(par $1). Price — To be filed by amendment. Under¬
writer—Glore, Forgan & Co., New York.
Proceeds—
For working capital
and general corporate purposes.
Offering—Deferred indefinitely.

an

$5

cumulative preferred

.

par) and 122,812 shares of common

Lincoln, Neb., and Crut-

Co., Chicago, 111., and

&

associates.

Proceeds—

construction.

new

Keystone Custodian Funds, Inc., Boston, Mass.
1,050,000 shares covering five series of secu¬
rities. Underwriter—The Keystone Co. of Boston. Pro¬
ceeds—For investment.
King Bros. Productions,

10

Jan.

Insurance

Co.,

Dallas, Tex.
10,000 shares of common

(letter of notification)

$10), to be offered to present stockholders on
the basis of one new share for each 15 shares held; un¬
subscribed shares to be offered to public. Price—$30 per
share. Underwriter—None. Proceeds—For working cap¬
stock (par

Address—P. O. Box

1771, Dallas, Tex.

portion to their present holdings; thereafter to employ¬
ees; and any unsubscribed shares to public.
Price—At
par ($1 per share).
Underwriter—None.; Proceeds—To
make motion pictures and for general corporate pur¬

partial financing of anticipated military contracts
acquire manufacturing facilities. Office—80 Wall
New York 5, N. Y.
Hamilton

Fire

Insurance

Co.,

and to
Street,

Philadelphia

(letter of notification) 64,000 shares of capital
stock (par $5).
Price—$4.50 per share. Underwriter—
Jenks, Kirkland & Co., Philadelphia, Pa. Proceeds—To
increase capital and surplus in order to offer additional
lines of insurance, including automobile casualty and
2

Oct.

liability coverage.
Helio

Financing indefinitely delayed.

Aircraft Corp.,

Norwood, Mass.

(letter of notification) 3,000 shares of non-cumu¬
lative preferred stock (par $20) and 3,000 shares of com¬
mon
stock (par $1) to be offered in units of one pre¬
ferred and one common share. Price—$25 per unit. Un¬
Jan. 16

Proceeds—To develop four-passenger

"Helioplane" and to pursue military business.
Boston Metropolitan Airport, Norwood, Mass.

Office-

Holeproof Hosiery Co., Milwaukee, Wis.
7 (letter of notification) 20,000 shares of common
stock (par $5). Price—$14 per share. Underwriter—None.
Proceeds—For working capital. Office—404 West Fowler

St., Milwaukee, Wis.
Hooper Telephone Co.,

Hooper, Neb.

(letter of notification) $30,000 of 3% % bonds
Price—In excess of 102%.
Underwriter—
Vachob Bender Corp., Omaha, Neb.
Proceeds—To retire
4ug.

iue

18

1970.

;emporary

loans.

Office—4376 Sunset Drive, Hollywood^ 27,

Calif.

Kingfisher Water Co., Kingfisher, Okla.
Dec. 27 (letter of notification) 250 shares of 5% cumu¬
lative preferred stock. Price—At par ($100 per share).
Underwriter—None.
Proceeds—For new construction.
Offering has been deferred.
•

Kingsburg Cotton Oil Co.
24 (letter, of notification)

5,000 shares of capital
(about $4.25 per share).
Underwriter—None. Proceeds—To Fewel Brothers, Inc.,
the selling stockholder. Address—P. O. Box 277, Kings¬

Jan.

Gyrodyne Co. of America, Inc.
Jan. 16 (letter of notification) 42,800 shares of class A
common stock
(par $1).
Price—$3 per share.
Under¬
writer—Jackson & Co., Boston, Mass.
Proceeds—For

Inc., Hollywood, Calif.

(letter of notification) 300,000 shares of common
stock to be offered first to present stockholders in pro¬
19

poses.

Gulf

for

oversubscription privilege;
rights will expire Feb. 21. The remaining 100,COO shares
are to be offered to certain executives and key employees
of company and its subsidiaries.
Frice—To be supplied
each four shares held, with

.

at

For

Jan.

Dec.

Jan. 15, 1951.

shares of

stock (par
55), the latter to be offered for subscription by common
stockholders of record about Jan. 25 at rate of one share
for each five shares held; unsubscribed shares to be
offered to employees.
Rights will expire on or about
Feb. 10.
Price—$105 per share for preferred, plus ,de¬
cerned dividends; and $15 per share.for common.vUnder.^

•

Glfenmore Distilleries Co.

derwriter—None.

notification) 347 shares of common
Price—At market (about $20.37 V&Underwriter—Eastman, Dillon & Co.,

York.

by amendment. Underwriter—Hirsch & Co., New
Proceeds—To expand plant facilities.

ital.

Street, Cortland, N. Y.

10,950

•

Inc.

•

Farmers

Syndicate, Inc., Cortland, N. Y.
Jan. 10 (letter of notification) $250,000 of 30-year 5%
registered debentures due Jan. 1, 1981.
Price—At par
in units of $50, $100, $500 and $1,000.
Underwriter—
None.
Proceeds—To improve and modernize plant and
real estate, to retire loans and for working capital.

filed

Office—2243

Jan. 26 filed

provide

filed 400,000 shares of class A

Dec. 29

5

tenden

Bonds

Monongahela Power Co

purchase of its St. Louis plant from the U. S. Government
'

corporate purposes.
Phoenix, Ariz.
\

writers—The First Trust Co. of

■

preferred

113,840 shares of capital
Price —$1.25 per share. Underwriter —

Kansas-Nebraska Natural Gas Co.,
stock (no

American Gas & Electric Co

Phoenix, Ariz.

Proceeds—For

None.

/

Consumers Power Co

7

share of preferred for each eight common
rights expected to expire about Feb. 21.
Price—To be supplied by amendment.
Underwriters—
Smith, Barney & Co. and Van Alstyne Noel Corp., of New

*

(par $1).

North 16th Street,

preferred

of
Y.

(letter of notification)

19

dock

West Penn Electric Co..

(2/7)

cumulative

320

Insulite Corp.,
Dec.

March

Metrick,

&

Expected end of January.

February 27, 1951

today

for resale. Office—Care
Broadway, New York, N.

chase of merchandise (steel)

Consolidated Edison Co. of New York, Inc.__Bonds

shares held;

..

(letter of notification) 15,000 shares of common
Price—At par ($10 per share). Underwriter—
Proceeds—For corporate purposes and the pur¬

2

stock.

Efrein

Price—At-

(par

prior to Jan.

subscription

*

Steel

Tennessee Gas Transmission Co

cumu¬

Proceeds—To increase capital.

Steel Corp.

Israel

Bonds

Insurance Co.,

notification)

of

Underwriter—None.

Bonds

February 26, 1951

,

(letter

12

.

Emerson

stock,

Common
_Pfd. & Com.
Class A

Southern California Edison Co....

>>

share);;* Underwriter—Hamlin & Lunt,
Proceeds—For additional equipment and
to

v

England Power Co

Den¬
to be

Austin, Tex.
$300,000 special stock
debentures and 15,000 shares of common stock (no par)
to be reserved for issuance in accordance with indenture
covering said debentures and without any additional
consideration. Price—The bonds are to be issued at prin¬
cipal amount, viz: 555 units at $540 each; or 563 units
at $532 each; or not more than 600,000 units at $500 each.
International Life

•

Jan.

February 20, 1951
New

Corp.

5 000 shares of 5%

r(Feb. 1).
Dec.

Plastics

Brilhart

Debs.
Common

Co., Inc., New York. Proceeds
<

Colo.

Denver,

bushel. Underwriter—Robert D. Bowers & Co.,
Colo. Proceeds—From the sale of the wheat
used to erect a plant and for working capital.

February 13, 1951

25,000 shares of common
sold from time to time on New York
Price—$3 per share (net). Underwriter

equipment.

Co.,

per

Bonds

Scottdale, Pa.

—Mortimer B. Burnside &
—To pay for

Fermentation

2,832,200 shares of common stock (no par) to
be offered in exchange for wheat at rate of one share

Telephone & Telegraph Co....

(letter of notification)

'

Industrial

Jan. 5 filed

(EST)

American

stock (par $1) to be
Curb Exchange.

*

& Canal Co.

Jersey RR.

Underwriters—Lehman
First Boston

share.

ver,

working capital.

4

New

noon

10c). Price—75 cents per share. Under¬

mop stock (par

-

United

per

Proceeds—For construction program.

Corp.

February 8, 1951

Price—At market.

.

Price—$28

1951.

Equip. Tr. Ctfs.

(EST)

a.m.

shares of common stock

common

Brothers; Goldman, Sachs & Co.; and The

Nashville, Chattanooga & St. Louis Ry.
;

program.

26.

(no par) be¬
stockholders of record Feb. 1,
lyol on basis of one share for each six shares held, with
an oversubscription privilege; rights to
expire Feb. 15,

Jan. 9 filed 196,580

(EST)____Bonds

Indianapolis Power & Light Co

Statement effective Jan. 26.

Drexel &

Indianapolis Power & Light Co.

i.951

February 7, 1951

common stock. Price—$6 per unit. Underwriter—Dansker
& Co., Inc., New York. Proceeds — For working

r

effective Jan.

Statement

Common

Corp.;

Securities

Equitable

Corp.;

Hemphill, Noyes, Graham, Parsons & Co. and
Co.
(jointly).
Proceeds—For construction

Corp

Carolina Power & Light Co. noon

Securities

Union

...Common

Co._

Service

February 5, 1951
General

basis." An additional 25,000 shares of each class of stock
are to be issued to underwriters as additional compensa-

.

Public

Southwestern

best-efforts

a

...Common '

Copper Canyon Mining Co

Dansker

"

35

(555)

The Commercial and Financial Chronicle

.

stock (par

$1). Price—At market

burg, Calif.
•

Laclede-Christy Co., Chicago,

III.

shares of common stock (par $5).
Price—To be supplied by amendment.
Underwriter—
Paul H. Davis & Co., Chicago.
Proceeds—For working
29

Jan.

filed

50,000

capital.'
•

:>

Lamston

.\./v

1

V

(M. H.), Inc.

shares of common
(about $8.50 per
share).
Underwriter—Childs, Jeffries & Thorndike,
Inc. New York.
Proceeds—To Harold Stone, the selling
stockholder.
Office—25 East 26th Street, New York

Jan.

25

stock

(letter of notification) 3,500
$1).
Price—At market

(par

10, N. Y.

,

Mont.
Jan. 19 (letter of notification) 1,200,000 shares of com¬
mon stock (par 10), to be offered initially to stockholders
of record Feb. 1 on a one-for-two basis; rights to expire
March 15.
Price—25 cents per share to stockholders;
30 cents to public.
Underwriter—Tellier & Co., New
York. Proceeds—To drill wells and develop leases.
Oil

Corp., Conrad,

•

Lexa

•

Marina Aircraft Corp.

notification) 22,000 shares of common
of 6% noncumulative
$100) in units of one
preferred and 10 common shares.
Price—$110 per unit.
Underwriter—None.
Proceeds—To buy tools and ma¬
chinery and for working capital.
Office—37 West 43rd
Street, New York, N. Y.
Continued on page 36

Jan

24

(letter of

(par $1) and 2,200 shares
convertible preferred tsock (par
stock

3G

(556)

The Commercial and Financial Chronicle

J

Continued

from

Mascot

Mines, Inc., Kellogg, Ida.

derwriter—R.

ard Securities

Corp., Spokane, Wash. Proceeds—To pur¬
chase controlling interest in Pine Creek Lead-Zinc Min-

•

ilag Co., for development costs and working capital.

stock.

(Underwriter—Guardian
cisco.

Proceeds—For

par

Securities

corporate

general

($20 per share).
Corp. of San Fran¬

Price—At

Park & Tilford Distillers Corp.

Office—333

purposes.

Jan.

Montgomery Street, San Francisco, Calif.
Middlecreek Valley
Jan.

per share).
York.
Proceeds—To Estate of Davicl A. Schulte.
•

Office—21 S. Market

(no

Price—$1

9

Appliance Corp.,

Office—8 South Case Ave., Akron, Ohio.

Mining Co., Inc.
(letter of notification) 20,000 shares of

ktock.

Price—25

cents

per

share.

(letter of notification) 30,000 shares of common
stock (par $10) to be offered company's employees. Price
•—$2 per share less than the market price of this stock
Stock

Exchange

on

Jan. 22,

50%

as

Co., Evanston, III.
Nov. 29 (letter of notification) 300,000 shares of common
stock (no par) to be sold to a group of 20 individuals.
Price—$1 per share. Underwriter—None. Proceeds—For
operating capital, and to complete purc?fase~bf tools,'dies
and inventory from
Kurtis-Kraft, Inc. Office—1000 Grey
Ave., Evanston, 111.
Jan.

11

stock

Co.,

(par $10).

12,137 shares of

Proceeds—For

nando

capital.

(2/20)

new

construction.

Hampshire Electric Co.

15,000 shares of $4.50 cumulative preferred
(par $100) and 140,000 shares of common stock
(no par). Of the latter, 130,100 shares are to be
offered

American

L

per

Proceeds—For working
St., Cuyahoga Heights,

(Ohio)

capital.

stock.

ln?o!?AT^hmery and for other
-

Jan

expenses.
/.• A.'V

(pai

may

issued

in

share.

Underwriter—None.

expenses

Seattle

Edison

Co.

Proceeds—To

retire

bank

loans

and

be

Bids—Tentatively expected to be
(PST) on Feb. 20.

P?CA#i£ Rivft * Machi"e Co.* Alhambra,
(1|1t/teJ of notification) $44,500 of series
rveihble/4V2% notes, of which

A

par in denominations

Office—709 South Palm
Ave.,




Co.

Alhambra, Calif.

and

to

reduce

debt.

Tennessee Gas Transmission Co.

held,

competitive bidding. Probable bidders: Halsey, Stuart
Inc.; Stone & Webster Securities Corp. and White,
Weld & Co. (jointly).
Proceeds—To repay bank loans
and for expansion program.

& Co.

Toklan

Royalty Corp.,

Tulsa, Okla.
37,536 shares of common
(par 70 cents) to be olfered to certain officers and

Jan.

12

stock

(letter of notification)

Price—$2.59

Proceeds—For
Tulsa

Jan.

9

share.

(letter

Fire

Jan.

of

19

Underwriter—None.

Office—Kennedy Bldg.,

1

Home

'

,

Insurance

Co.

notification)

(par $10),

record

1951,

per

working capital.

3, Okla.

Utah

be

to

10,000 shares of capital
offered to stockholders of

first

for

subscription on or before Feb. 28,
share for each six shares held.
per share.
Underwriter—None. Proceeds—
working capital.
Office—47 West South Temple,
Lake City 1, Utah.
basis

on

of

one

Price—$20
For
Salt

Vitro

Jan.

11

Manufacturing Co.

(letter of notification)

stock.

2,673 shares of

common

Price—At market

(not less than $15 per share).
Stock to be sold through brokers.

Underwriter—None.

Proceeds—To Wenman A. Hicks, the selling stockholder,
who is owner of 37,673 shares.
Office—-Corliss Station,

Pittsburgh 4, Pa.

I

,

West Florida Gas & Fuel Co., Panama City, Fla.
Jan.

5

(letter of notification) 20,000 shares of class B
stock (par $1) and $125,000 of 15-year 5% de¬
bentures (latter in denominations of $100, $500 and $1,000

each).

Price—Of stock, $2 per share; of debentures,
Underwriter—None.

100%.

Address—P. O.

ness.

•

Box

Proceeds—To expand

320.000

at
busi¬

729, Panama City, Fla.

West Penn Electric Co.

(3/7)

additional

shares

Jan.

31

stock

(no par) to be offered to its stockholders for sub¬

filed

the basis of

on

shares

held

one

of

common

additional share for each

March 9, with rights to
expire about March 26. Unsubscribed shares to be offered
to

on

about

or

employees of companies in the West Penn Electric
Underwriters—To be determined by competi¬

System.

bidding.

with

oversubscription

an

Feb.

on

16.

Price—$33

Proceeds—To repay

Langley & Co. and The First Boston Corp. (joint¬
ly) ; Harriman Ripley & Co., Inc. Proceeds—To purchase
additional equity securities of two of its subsidiaries—
Monongahela Power Co. and The Potomac Edison Co.
Bids—Expected to be opened on March 7.

Dec.

1

stock

to

privilege;

rights
share. Under¬
bank loans and for
per

Statement effective Jan. 16.

with

Cohu &

share

for

each

Proceeds—For construction.

31, 1951,

subscription
Price—To

Dillon,
sale of

10

oversubscription privilege; rights
Price—$16 per share.
Underwriter—
Service Co.

privilege;

be

Read

on

supplied

(2/2)

Nov.

&

common

9,

cf

the

New

England markets should be served by this

company, upon
of

Gas Transmission Co.
^
it was of the opinion that certain

the FPC said

8

showing that it has an adequate amount
financing, probably about $40,000,-

Necessary

gas.

000, likely to be 75%
stock

bonds and 25% stock, With com¬
stockholders, Pro,bable

be offered first to

to

ferred

Co. Inc., New York.
Proceeds—From
stock, together with funds received from

was

announced stockholders will vote Dec. 18

creating a new issue of 40,000 shares of 5% cumula¬
tive preferred stock (par $100), to be issued in series.- Of
this issue, it is proposed to place privately with a group
of insurance companies 16,500 shares of series A pre¬
ferred, the proceeds to be used to redeem all of the pres¬
ently

Underwriter—

Inc.

Bosch Corp.

American

to

l-for-13 basis, with an over¬
rights to expire about Feb. 14.
amendment.

Dec.

Prospective Offerings
Algonquin

of

a

by

record

Proceeds—To Sheboygan Chair

Co., New York.

underwriter: Dillon, Read & Co.

new

of

Co., Inc., the selling stockholder.

mon

an

Southwestern Public

stockholders

Brothers, Chicago, III.
Jan. 19 (letter of notification) 4,000 shares of common
stock (par $1). Price—$7.12V2 per share. Underwriter—

held,

expire Feb. 26.

to

Wilson

shares

one

..'

,

•

Nov. 22 it

of

,

by New England Telephone & Telegraph Co. Price—At
par ($25 per share). Underwriter—None. Proceeds—For
general corporate purposes. Office—38 Main St., Wes¬
terly, Rhode Island. ;

on

basis

offered

be

Jan.

on

t

(R. I.) Automatic Telephone Co.
(letter of notification) 7,000 shares of common

Westerly

record

25

Probable bidders: Lehman Brothers and

W. C.

150,469 shares of common stock (par $1) to
be offered for subscription by common stockholders of

record Jan.

-

(2/26)

Jan. 26 filed $35,000,003 of first mortgage pipeline bonds
due Feb. 1, 1971.
Underwriters—To be determined by

Office—79

Jan. 12 filed 233,576 shares of common stock
(par $1)
be offered for subscription by common stockholders

con-

fof $38.65 each and $4,500 of notes will be
offered t6 two
/creditors In satisfaction of issuer's
indebtedness
Un¬
derwriter— None. Proceeds—For
machinery and eauio-

—

Ave., N. E., Atlanta, Ga.

Southern Union Gas Co.

-

$40,000 of notes will be

co^m°n stockholders at

Insurance, Inc., Atlanta, Ga.

Insurance

expire

None.

Calif.

of

1950, of which total 4,434 shares will be subscribed for

Atlanta, Ga.

Proceeds—To purchase stock in Southern Fire &

to

■'

,.t>.

(letter

—

for

None.

;

services.
Price—$1 oer
Proceeds—To pay operatin"
and retire obligations.
Office—418 Lloyd Bldg^

1, Wash.

Ranch, Inc. (N. Y.)
notification) 200 shares of preferred
stock.
Price
$100 per share.
Underwriter — None.
Proceeds
To complete building, purchase equipment
and for working capital.26

Jan. 8 filed

payment of loans and

T

merit.

Co.

expansion program.

Wash.
0
(letter of notification) 35,000 shares
of capital
25 cents), of which
20,000 shares

18

/

Taconic Hereford

Jan.

ten

Price—At

stock.

Pacific Mining Co., Inc., Seattle,

ock

&

writer—None.

Office

19.

Packing Corp. of Pennsylvania
Dec. 8 (letter of
notification) 2,950 shares of 5% pre¬
ferred stock.
Price—At par ($100 per share). Under¬
writer—None. Proceeds—For additional operating capi¬
tal. Office—Smedley
Street, North East, Pa. BusinessProcesses and cans frozen fruits and fruit juices.

scription

(Canada)

(letter of notification) 30,000 shares of common
Price—At par ($10 per share).
Underwriter—

will

and process-

operating

Virginia St., Reno, Vev.

2

shares

—

.NPne..Proceeds—'To purchase refrigeration
—139 North

•

Southern Natural Gas Co.
/
Dec. 18 filed 155,546 shares of common stock (par $7.50)
to be offered for subscription by common stockholders
of record Jan. 30 on the basis of one share for each 10

Inc., Reno, Nev.

effective Jan.

Sunshine

Goidman, Sachs & Co. (jointly); Morgan Stanley & Co.;

California

Ponce De Leon

A

;

Statement

tive

Marine

notification) 140,000 shares of common
At par ($1
per share).
Underwriter

Price

Ltd.

Fer¬

per

Southern

com¬

Office—4455

Ohio.

Tar,09dnFf+Shioiied.,yeat
Prod"cts,
2 (letter of

.Jan

Mines

560,000 shares of capital stock.

Southern

share). Underwriter

•

(no par).
(approximately $63 per

market

•

Nov.

Manufacturing Co.
($100

71st

Uranium

San

$ept. 18 (letter of notification) $191,500 of 5% subordin¬
ated debentures, series E. Price—At par. Underwriter—
For $100,000 of debentures, Allen & Co., Lakeland. Fla
Proceeds—To reduce bank loans and for working capi¬
tal. Office—220 Healey Bldg., Atlanta, Ga.

Stocks, Inc. *
Funds, Inc., above.

Jan. 5 (letter of
notification) 2,500 shares of class B
mon stock
Price—At par

^?*!%'
East

State

filed

Southern Discount Co.,

See Diversified

North

working capital.

received up to 10:30 a.m.

Corp.; White, Weld & Co.; Harriman
Ripley & Co., Inc.
retire $2,425,000 of 2%%
bonds and th€
remainder to retire
4V2 % preferred stock of New England.
York

hygienic

of

.

.

share). Underwriter—None, but will be sold through
brokerage firms, without underwriting, between Jan. 15
and June 30, 1951.
Proceeds—To 12 selling stockholders.

and

common

Proceeds—To

New

Manufacture

—

program.

common

construction program.

stockholders of New Eng¬
land Gas & Electric Association
(parent) at rate of one
New Hampshire share for each
12 New
England common
shares held.
Underwriter—To be determined by com¬
petition biddmg.
Probable bidders:
The First Boston

•

Business

construction

for

construction

share). Underwriter-Optionee—Robert Irwin
Martin of Toronto. Proceeds—For commissions, explora¬
tion and development expenses, and working capital.

Shields

stock

subscription by

Proceeds

(2/20)
Jan. 30 filed $35,000,000 of first and refunding mortgage
bonds, series C, due Feb. 15, 1976. Underwriters—To be
determined by competitive bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; Blyth & Co., Inc.; The First
Boston Corp. and Harris, Hall & Co. (Inc.)
(jointly);

Jan. 25 filed

for

30

($1

par

Kidder, Peabody & Co.; First Boston Corp.; Merrill
Lynch, Pierce, Fenner & Beane.
Proceeds—To repay
New

basis.

Office—2716
Road, Los Angeles 64, Calif.

South
Nov.

mortgage bonds, series D,
1, 1981. Underwriters—To be determined by
competitive bidding. Probable bidders: Halsey, Stuart &
Co. Inc.; Harriman
Ripley & Co. Inc.; Lehman Brothers;

»

efforts"

by

Shopping Bag Food Stores, Los Angeles, Calif.
11 (letter of notification) 10,000 shares of preferred
(par $25) and 10,000 shares of common stock (par
$1) to be offered in units of one preferred and one com¬
mon
share. Price
$30 per unit. Underwriter—None.

Feb.

bank loans and for

50,000 shares not subscribed for

Jan.

share.

per

—

due

the

stock

common

Underwriter—None.
Proceeds
For working
Office—1750 Hennepin Ave.,
Minneapolis, Minn.
New England Power Co.
Jan. 24 filed $12,000,000 of first

to

—

Price—At not exceeding $20

•

of

working capital.
products.

Minneapolis, Minn.

(letter of notification)

offered

initially

be

Price—At $6 per share.

"best

a

Muntz Car

Finch

to

are

basis of three shares for each 10 shares

on

stock¬
holders.
Augus D. Mcintosh of New York will under¬
take to dispose of any remaining unsubscribed shares on

1951.

Underwriter — None.
Proceeds—None to company,
stock will be purchased on the open market.

shares

50,000

Underwriters—Ward and
Co.; Investing Securities, Inc., and James C. Kennedy,
Jr., of New York who have agreed to buy 20,000 shares
each of the remaining 60,000 shares (preemptive rights
to which have been waived by the stockholders) and

Morrison-Knudsen Co., Inc., Boise, Ida.

Nash

which

held.

Francisco

Products Corp., Taneytown, Md.
110,000 shares of common stock (par $1).

filed

stockholders

Jan. 11

the San

18

for

prevailing

stock

of

Underwriter—None.
Address—Box 232,

28

effective Jan. 11.

Sanitary

Idaho Springs, Colo,

on

Dec.

employees.

Dec.

common

Thursday, February 1, 1951

Co., Philadelphia, Pa.
'
filed 191,762 shares of common stock

Co.; Paine, Webber, Jackson & Curtis; Tucker, Anthony
& Co.; and Whiting, Weeks & Stubbs.
Proceeds—To
redeem $1,000,000 of outstanding collateral trust 3Mj%
bonds, 12th series, and for additional capital investment
Business—Closed-end investment company.
Statement

Montezuma

Proceeds—-For mining development.

&

capital.

privilege; rights will expire on Feb. 2.
Price—$12.50
per
share.
Underwriter—Company has entered into
dealer agreements under which subscriptions will be
solicited and transactions may be stabilized.
DealerManagers are: Stone & Webster Securities Corp.; Estabrook & Co.; The First Boston Corp.; Kidder, Peabody &

Hawthorne, Calif.
July 24 filed 50,000 shares of 6% cumulative convertible
preferred stock. Price—At par ($20 per share). Under¬
writer—Lester & Co., Los Angeles, Calif. Proceeds—To
retire bank loans and install machinery and equipment
in a proposed new plant to be located east of the Rocky
.Mountains.
Business—Manufacturer of gas and electric
water and space heaters.

Jan. 22

working

Underwriter—None.

being offered to common stockholders of record Jan. 11
a
share-for-share basis, with an oversupscription

per

Office—Suite 1605, 135 So. LaSalle St., Chicago 3, 111.
Mission

Proceeds—For

share.

.

Oil

Price—At

•

/

on

share.
Underwriter—
Xlone. Proceeds—To retire a negotiable promissory note
s nd to purchase prepaid insurance
policies on equipment.
par).

stock

common

Akron, Ohio

26,850 shares of class A
(no par).
Price—$5 per

loans and

Sun

•

Inc., Chicago, III.
(letter of notification) 25,000 shares of common

5

stock

Products Corp.,

Film

(letter of notification)

Railway & Light Securities Co., Boston, Mass.
Dec. 22 filed 252,552 shares of common stock (par $10)

Midway Airlines,
Jan.

18

(non-voting)

Feb. 15, 1951.
Price—At par ($50 per share). Under¬
Proceeds—For conversion to dial tele¬

writer—None.

phones and for expansion program.
Street, Seiinsgrove, Pa.

Plastic

Jan.

oversubscription privilege; rights to expire

an

1,775 shares of common
Price—At market (estimated at about
Underwriter—Ira Haupt & Co., New

(letter of notification)

(par $1).

$56

Telephone Co.

(letter of notification) 1,500 shares of common
stock being offered to common stockholders of record
Jan. 6, 1951, on basis of one new share for each share
on

18

stock

5

held, with

Underwriter—None. Pro¬
purchase machinery and equipment and for
corporate purposes.

Price—($1 per share).

ceeds—To

(letter of notification) 5,000 shares of first pre¬

stock, 5% series.

Milling Co.

(letter of notification) 200,000 shares of common

.

privately of $12,000,000 3% first mortgage bonds
10,000 shares of preferred stock to be used to repay

bank

Edwards,

American

Pan

Jan. 24

Mercantile Acceptance Corp. of California
ferred

J.

Inc., Oklahoma City, Okla.
Proceeds—To retire certain capital stock and for con¬
struction. Office—212 East Broadway, Cushing, Okla.

(letter of notification) 400,000 shares of capital
Price—37V2 cents per share. Underwriter—Stand¬

Dec. 4

sale
and

Gas Co.,

Jan. 8

Oct. 27

iftock.

Cushing, Okia.

(letter of notification) $50,000 of first mortgage
serial 6% bonds due 1961-1971.
Price—At 100%. Un¬

Pact

35

page

.

•

outstanding 16,336 shares of 5% cumulative pre¬
stock.

;

American

Jan.

-

26

Gas

company

&

/

•.

■

Electric Co.

announced

that

an

^

(3/30)

offering, of about

340,000 additional shares of common stock will be made
to stockholders on or about March
of

one

share

for each

15

shares

30, 1951 on the basis
held; together with an

ff WSWUrtUM* J >■

Volume 173

Number 4982

.

.

Corp.; Blyth & Co., Inc.; Morgan Stanley & Co.
finance construction program. Offering—
Expected late in April.

securities

•

Dillon, Read & Co. Inc., who will

plan

with

Jan. 26 it

was

ket with

an

than

First

of new bonds.
Underwriters—May be determined by competitive bid¬
ding. Probable bidders: Halsey, Stuart & Co. Inc.; First
Boston Corp.; Kuhn, Loeb & Co. and Union Securities
Corp. (jointly); Harriman Ripley & Co., Inc.

15 it

City

Electric

$2,250,000 through

&

Langley
to

25

(A. M.)

L.

F.

110

and

Carolina Power

&

held.

Traditional

underwriter

of

loans

bank

announced

was

•

the

on

company

basis

of

($20

par

Proceeds—For

Detroit Steel

one

share

Light Co.

000

tons

from

to issue

proposal

a

and

A, due

Offering—Tentatively

March.

expected

Jan. 18 it

■:=*■.

Inc.;

bidders

Blyth

for

Co.,

&

debentures:

Inc.,

Halsey, Stuart & Co.
Peabody & Co, and

Kidder,

each

ten

stock¬
shares

Underwriter—

were

•

be used for construction program.

Chicago,

Jan.

24

there

talks

were

may include Halsey, Stuart & Co. Inc.;
Kuhn, Loeb & Co.; Morgan Stanley & Co.

Jan.

15

to

voted

increase

the

authorized

stock (par $1) from 1,500,000 to

2,000,000 shares,
the additional shares to provide "substantial funds for
capital additions and working capital," and "to provide
for the conversion of 100,000 shares of unissued and un¬
reserved 4%% cumulative convertible preferred stock."
writers:

Colorado

Interstate

Gas

1

Columbia
it

7

was

Gas

90,748

issue and

sell $35,000,000 of new securities in the Spring or early
Probable bidders for debentures: Halsey, Stuart

Inc.; Morgan, Stanley & Co.; Kuhn, Loeb & Co.;
Salomon Bros. &
Hutzler; Lehman Brothers; Merrill
Lynch, Pierce, Fenner & Beane and White, Weld & Co.
Probable bidders for

common

Lynch, Pierce, Fenner & Beane; Lehman Brothers;
& Co. and R. W. Pressprich & Co.
(jointly).
expansion program.

Jan.

it

10

was

$181,000,000
securities.

.

financing

;

bonds

Edison

additional

nor

the time

the
of

sale
the

and

the

cation

was

withdrawn.

Probable

new

be

refunding mortgage bonds.

determined

by

«

Jan.
of

15, 1951.

Consolidated
9

it

was

between

reported

Gas

company

has

Michigan-Wisconsin Pipe Line Co.
•
company received SEC authority to borrow net
than $20,000,000 from banks. A permanent financ¬
ing program provides for the elimination of these bank
loans prior to their maturity, July 1, 1951, and such pro¬
gram will include the issuance and sale of $12,000,003
additional bonds and $3,000,000 of additional common
stock (latter to American Natural Gas Co., the parent).

July 25
more

.

Previous

contemplates issuance

competltive. bidding. Probable bidders: Halsey, Stuart
Co. Ine:; White, Weld & Co. and Paine, Webber, Jack-

(jointly);, Dillon, Read & Co. Inc.: The First

Middle

a

26-inch crude oil pipe

Oil Co., Sun Oil Co. and Stand¬

Construction is contemplated to be¬

.

.

Lighting & Power Co.
Dec. 19 it was reported company plans to issue and sell
$15,000,000 of new fir3t mortgage bonds. Underwriters
—To be determined by competitive bidding.
Probable
bidders:
Halsey, Stuart & Co. Inc.; Kidder, Peabody &
Co.; Equitable Securities Corp.; Union Securities Corp.
and Salomon Bros. & Hutzler (jointly); Harriman Ripley
& Co. Inc.; Smith, Barney & Co. Proceeds—For construc¬
tion program.. Offering—Ma.y be indefinitely deferred
as company may be able to finance 1951 expansion pro¬
gram without recourse to outside borrowing.

financing

was

placed privately. If

com¬

South

Utilities,

Inc.

that this company is expected
to sell up to 600,000 shares of additional common stock,
(no par) in the near future;- Underwriters—To be deter¬
mined by competitive bidding. Probable bidders—Union
Securities Corp. and Equitable Securities Corp. (jointly);
Blyth & Co. Inc.;:Lehman Brothers; Kidder, Peabody &
Co. and Merrill Lynch, Pierce, Fenner & Beane (jointly);
The First Boston Corp. Proceeds — To finance part of

Jan. 23

it

was

reported

1951 construction program.

Minnesota

Houston

Co.

debt

petitive probable bidders may include The First Boston
Corp.; Harriman Ripley & Co., Inc.; Glore, Forgan & G»„

gin in late summer or early fall of this year with com¬
pletion early in 1952.

Un¬

$50,000,000 -and




150,000,000 cubic feet a day next winter. The present lira
a daily capacity of 325,000,000 cubic feet a day.

(4/3)

with Petroleum Defense Authorities in Wash¬

Cities Service Co., Pure

•

Curtis

$8,000,000

&

ard Oil Co. of Ohio.

competitive bidding.

$60,000,000 of convertible
debentures- .Underwriters—To be determined through

son

Michigan Consolidated Gas Co.
disclosed that the company is planning a3
pipe line construction program to increase
natural gas deliveries to the Detroit
(Mich.) area by

Jan. 3, it was

appli¬

extending from the West Texas producing area to
refineries on the Gulf Coast. Associated with Gulf, are

Bids—Expected later in February.

Natural

Previous

reported company may issue and sell from

ington for the construction of

Halsey,. Stuart & Co. Inc.; Kuhn,
Loeb & Co.; Blyth & Co., Inc.; The First Boston Corp.
Proceeds—To redeem $12,728,000 first mortgage bonds

.

stock.

line

bidders:

due March

was

filed plans

Connecting Ry. Co.
was reported this company
(leased by Penn¬
sylvania RR.) contemplates issuance of an issue of
$12,000,000

common

Co.

together with proceeds from a proposed term loan of ap¬
proximately $2,500,000 with banks and an insurance com¬
pany, will be used to refund $1,175,000 bank loans, pay¬
ment of preferred dividend arrearages of $1,501,500, and
the balance for working capital.

Gulf Oil Corp.

•

derwriters—To

of

Shovel

Proceeds—The net

Jan. 2 the company, together with four other companies

been

Jan. 24 it

about

sale

Power

Registration—Expected to be effected in February, 1951.
proceeds from the sale of the stockf

common

of

new

First Boston Corp.; Glore, Forgan & Co.; Morgan Stanley
& Co.
Proceeds are to be used for construction program.

J

unissued

in connection with

Hutzler (jointly); Blyth & Co., Inc.; The First
Corp.; Kuhn, Loeb & Co.; Union Securities Corp.
and Equitable Securities Corp. (jointly). Proceeds—Foi
construction program.
Bids—Expected to be opened or.
April 3. Registration—Tentatively scheduled for Mar. 2

determined. Probable bidders for
debentures: Halsey, Stuart & Co. Inc.; The

or

but

to be used

Boston

contemplates

through

financing

Neither the nature

has

company

authorized
are

acquisition of North American Oil Consolidated.

Bros.

Co.

the

announced

proceeds

expansion program.

$500,000 to equity capital, such shares to be first offered
to present common stockholders on a pro rata basis..

—

Proceeds will be used for

Commonwealth

of Texas

$20,000,000 of new first mortgage bonds.
Underwriters
To
be
determined
by
competitive
bidding. Probable bidders: Ilalsey, Stuart & Co. Inc.;
Morgan Stanley & Co.; Drexel & Co.; Lehman Brothers;
Harriman Ripley & Co. Inc.; Shields & Co. and Salomon

Shields

/

Dec. 8, the company announced it plans the sale of addi¬
tional common stock (par $10) so as to add approximately

$18 000,000 to

stock, in event

Star Steel Co.

Marion

plans to file with the SEC
covering a proposed offering

statement

shares Oof

The

Jan. 8 it

of Competitive bidding: Morgan Stanley & Co.; Goldman,
Sachs & Co. and Union Securities Corp. (jointly); Mer¬
rill

Lone

Jan.

stated company

Georgia Power Co.

Co.

(jointly).

Noyes, Graham, Parsons & Co., New York. Proceeds—
To construct additional manufacturing facilitiies.
Plan
reported dropped on Jan. 25.
1

stock

bonds

summer.

&

plans to increase the

Georgia Natural Gas Co., Albany, Ga.
Aug. 2 filed new application with FPC for authority tc
construct a 335-mile
pipeline system in Georgia anc
Florida to cost about $5,100,000, which would
be fi¬
nanced through issuance of first mortgage pipe-lim

System, Inc.

reported that corporation may

was

registration

stock.

Texas to Colorado.

Dec.

common

General American Oil Co.

the

15 it was reported company plans to obtain a loan
$12,000,000 to finance construction of a pipeline from

Ind.

For

a

Dec.
of
-

Indianapolis,

tional

of

Co.

Co.,

the

Nov. 20 company said it may sell

•

financing imminent.
Probable Under¬
Merrill Lynch, Pierce, Fenner & Beane.

Otis & Co.; Robert W. Baird & Co.

&

18, J. K. Lilly, President, announced company may
near
future publicly offer about $10,000,000 ci
non-voting common stock.
Underwriter — Hemphill*

York.

Jan. 29 it

immediate

No

(Eli)

Jan.

during 1951 some addi¬
following proposed 200% stock dis¬
tribution on March 1, 1951.
Traditional underwriter:
Estabrook & Co., New York.

Foods, Inc.

stockholders

common

Lilly

Foote Mineral Co.

probable bidders
Clinton

Stuart & Co. Inc.;

16, E. B. Germany, President, announced that com¬
pany will raise $5,000,000 through a common stock offer¬
ing within the next 120 days to be first made to common,
stockholders. Underwriters—Probably Straus & Blosser;
Estabrook & Co., and Dallas Rupe & Son.
Proceeds—

New

re¬

as dealerUnderwriters—For bonds to be determined
competitive
bidding.
Probable
bidders:
Halsey,,

by

in

company

it

holders, with Robert W. Baird & Co. acting

Gas Co.

announced

29

managers).

of
15-year 3%% first mortgage bonds, $15,000,000 of
4.25^preferred stock and $5,000,000 of common stock.
Traditional
underwriters
are
White,
Weld
&
Co.,

In event of sale by competitive bidding,

funding bonds.

was

de¬

Superior District Power Co.
was said company plans early registration of
$2,000,000 of bonds and 40,000 shares of $20 par common
stock (the latter to be offered first to common stock¬

was

of natural gas per day as part of its $83,000,000 construc¬
tion program. It is planned to issue and sell $62,500,000

;

St. Paul & Pacific RR.
of issuing $60,000,000 of

Milwaukee,

it

(par $100).

m

new

Lake

Jan.

capacity of its pipeline system by 400 million cubic fee:

9

be

.

RR.

Jan.

Lynch, Pierce, Fenner & Beane (jointly); Kuhn,
Co. and A. C. Allyn & Co. (jointly); Lehman
and Bear, Stearns & Co.
(jointly).; Salomon
Bros. & Hutzler; First Boston Corp. and Central Re¬
public Co. (jointly); Glore, Forgan & Co. Proceeds will
&

soon

of 40,000 shares of
Underwriters—To be

Jersey Central Power & Light Co.
it was stated that early registration is expected!,
$1,500,000 first mortgage bonds. Underwriters—To be
determined by competitive bidding. Probable bidders—
Halsey, Stuart & Co. Inc.; White, Weld & Co. and Shields& Co. (jointly); Eqbitable Securities Corp.; The First
Boston Corp.; Otis & Co.; Salomon Bros. & Hutzler; Har¬
riman Ripley & Co., Inc.; Kidder, Peabody & Co.; Glore,
Forgan & Co. Proceeds—For expansion program. Bids
—Tentatively scheduled to be received in March.

placed pri¬

Loeb

Brothers

offering

of

cost about $50,000,being determined.
In

Merrill

•

•

program.

Grande Western

Paso Natural

stock

an

by competitive bidding. Probable bidders in¬
clude Glore, Forgan & Co.;
Kidder, Peabody & Co,;
Merrill Lynch, Pierce, Fenner & Beane and White, Weld!
& Co. (jointly); The First Boston Corp.; Salomon Bros.
Hutzler.
Proceeds—For new construction.
Early regis¬
tration expected. Bids—Tentatively scheduled for March-

Jan.

Ei

with

market

preferred

bidding. Probable bid¬
ders—Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.;
Kuhn, Loeb & Co.
/.
;,-Vy

company

Jersey Central Power & Light Co.
12 it was reported that company may

the

To be determined by competitive

expects to obtain $14,000,000 from
sale, late in 1951 oil in 1952, of additional securities.

Probable

Jan.

reported company may later this year re¬
outstanding first mortgage 3%-4% bonds, series
1, 1993 ($35,062,000 at Dec. 31, 1949) and
Denver & Salt Lake income mortgage 3%-4%
bonds, due
Jan. 1, 1993 ($8,666,900 at Dec. 31, 1949). Underwriters—

in

Illinois Public Service Co.

19 the

Rio

expects to issue additional

Jan. 22

method of financing is

Denver &

Light Co.
company

Probable bidders: Halsey, Stuart & Co..
(for bonds): W. C. Langley & Co., Union Securities Corp.
and Glore, Forgan & Co. (jointly), for bonds or stock.

annually and to increase its finishing capacity
present 180,000 tons to more than 1,000,000
the company's Portsmouth, Ohio, works.
The

The

fund its

the

stock to its

for

January of 1950, $15,000,000 of bonds
vately.
/ v
jy.J-V.

Electric & Gas Co.

approved

at

said

in

tions at the time.

con¬

the

struction

Jan.

1951

was

immediate

1951 to finance its construction
program
which is expected to cost between $6,500,000 to $7,500,000.
Form of financing will depend on market condi¬

disclosed that it had approved
plans to double the company's ingot capacity to 1,290,-

publicly 25,000 shares of preferred stock (par $100).
Underwriters—Paine, Webber, Jackson & Curtis and
Stone & Webster Securities Corp.
Proceeds—For con¬

Central

for

Power &

19 it

securities

Corp.

000.

program.

Dec.

plans to offer about

share).

per

construction

Registration" in this issue).
Illinois

and

common

expansion program is estimated to

stockholders

Iowa

and

No

termined

tons

25

Co.

Edison Co.

tion to the present $15,000,000 bond issue filed with the
on that date (see under "Securities Now in

Central

&

Jan. 30 the management

sell

5

$8,000,000

Commission

•

Weld

White,

(jointly); Morgan Stanley & Co.; W. C.
and Glore, Forgan & Co.
(jointly).
redeem $5,300,000 of first mortgage bonds,

Price—At

None.

Jan. 4 company informed the SEC that it intends to issue
and sell approximately $20,000,000 of securities in addi¬

Jan,

writer—Kuhn, Loeb & Co., New York.
financing expected.

program.

it

holders

—Dillon, Read & Co., Inc., New York.
;

(jointly);

850,000 shares of additional

plan to refinance its 7% cumula¬

dividends.

accrued

determined by

Co.

Detroit

Jan. 29

tive
participating preferred stock (par $100), about
50,000 shares outstanding. These shares are redeemable
at

Corp.

Co.

&

repay

•

Co.
a

be

Power & Light Co.
2, Stuart Cooper, President, announced that com¬
pany has authorized $15,000,000 for new
construction
during 1951 as part of the system's $60,000,000 postwar
expansion program.

Rains, President, revealed that the com¬

is considering

pany

Underwriters—To

Jan.

be used to pay, in part, construction expenditures,
which, it is estimated, will total about $5,400,000 in 1951.

Byers

1981.

RR.

$14,611,000 of 41/2% series "C" and $4,201,000 of 4% series
"D" oonds). It is reported that
$20,000,000 of new con¬
solidated mortgage bonds will be issued. Probable under¬

Delaware

plans call for the raising

an

will

•

not

Proceeds—To

offer of additional com¬
mon stock on a l-for-10 basis held around May or June.
Probable underwriter: Union Securities Corp.
Proceeds

Jan.

Michigan P. S. Commission
of first mortgage bonds
exceeding 2%% and maturing not
$40,000,000

Co.

tentative

stated

was

of about

«*kwwn

plan for the refunding of Illinois Central RR. and
Chicago, St. Louis & New Orleans RR. joint $18,812,000
of first refunding mortgage bonds due 1963
(including

bidding.

Boston

Shields

struction

Jan.

ftVDi,1

to

(3/27)

Probable bidders: Halsey, Stuart
Co., Inc.; Kuhn, Loeb & Co. and Union Securities
Corp. (jointly); Harriman Ripley & Co., Inc. and The

more

or

Co.

&

reported this company may be in the mar¬

Atlantic

i

Jan. 22 the directors authorized the executive committee

sought

issue

competitive

Power Co.

issue of $59,000,000

Power

company

interest

earlier

construction program.
Electric

26

authority to

operating

Appalachian

Consumers

Jan.

Proceeds—To be invested in equity

subsidiaries as part of the
for financing the American Gas & Electric Sys¬

tem's large
•

the

of

_

Illinois Central

Proceeds—To

bidding. Probable bidders: Blyth & Co., Inc. and Gold¬
man,
Sachs & Co. (jointly); The First Boston Corp.;
compensation.

*![

,

(557)

Boston

oversubscription privilege. Price—To be filed by amend¬
Underwriters—To be determined by competitive

name

,n

The Commercial and Financial Chronicle

.

ment.

Union Securities Corp.;

V.VW

.

Power

«

&

Light Co.
Dec. 6, Clay C. Boswell, President, announced that the
company expects to raise about $10,000,000 through the
sale of new securities within the next year or so. The
financing may be either in the form of bonds or preferred
stock. The proceeds: will be used for the company's ex*
pansion program. Probable bidders for bonds may in¬
clude Halsey, Stuart & Co. Inc.; Shields & Co.; The First
Boston Corp. and Glore, Forgan & Co. (jointly); Otis &

";;i "/

Continued

on page

38

Financial Chronicle

The Commercial and

.

.

.

Thursday, February 1, 1951

(558)

38

37

(jointly); Union Securities
Co.; Coffin & Burr, Inc.

Co.
&

Monongahela Power Co.

Brothers and Drexel &

Corp.; Kidder, Peabod?

by Blyth & Co., Inc.

(4/24)

sale of

Underwriters

bidding. Probable
Equitable Securities
Corp.; W. C. Langley & Co. and The First Boston Corp.
(jointly); Union Securities Corp. and Salomon Bros. &
Hutzler (jointly): Lehman Brothers; Kidder, Peabody &
Co. and White, Weld & Co. (jointly); Merrill Lynch,
Pierce, Fenner & Beane; Glore. Forgan & Co.; Harriman
Ripley & Co., Inc. Proceeds—For expansion program.
Offering—Tentatively expected on April 24, with SEC
determined

be

—To

by competitive

Halsey, Stuart &

bidders:

Montana-Dakota

Dec.

Utilities Co.

stock
from

dent,

the next six

18 FPC

Jan.

Co.

-

the present common stock on a three-for-one
to help facilitate the sale of additional common
in the near future so as to enable the company to

1951.

construction program for

its

basis
stock

carry

Merrill Lynch,

the principal
April, 1949.
voted the issuance of 900,000
common stock in exchange for
value common stock.

Pierce, Fenner & Beane, New York, was
underwriter of a common stock offering in
Stockholders

Jan. 30

on

$7.25 par value

shares of

300,000 shares of no par

Louis Ry. (2/7)
Jan. 30 it was announced that bids will be received by
the company up to 11 a.m. (EST) on Feb. 7 at 71 Broad¬
way, New York,
N. Y., for the purchase from it of
$2,415,000 equipment trust certificates, series G, to be
dated Feb. 1, 1951 and to mature in 15 equal annual
instalments from 1952 to 1966, inclusive. Probable bid¬
ders: Halsey, Stuart & Co. Inc.; Equitable Securities
Corp. and Harris, Hall & Co. (Inc.) (jointly); Kidder,
Peabody & Co.; Salomon Bros. & Hutzler; Harriman
Ripley & Co., Inc. and Lehman Brothers (jointly).
Chattanooga & St.

Nashville,

Nevada
15

Nov.

Natural Gas Pipe

Line Co.

constructor

operation of a 114-mile pipeline for the transporta¬
tion of natural gas, which, it is estimated, will cost
and

$2,331,350.

its

York, Chicago & St. Louis RR.
reported that in event company refunds
outsthanding $36,057,700 6% preferred stock (par
25 it was

$100), with dividend arrearages of $45 per share, prob¬
able bidders for a new preferred stock with a lower
dividend rate may include Blyth & Co., Inc.
The 6%

preferred

Co. and W. C. Langley &

26

Jan.

company

is callable at

$110 per share, plus accrued

Proceeds—To

Sharon

•

29

Niagara Mohawk Power Corp.
estimated that, through 1951,

Oct. 24 the company

it will

require not more than $35,000,000 of additional debt or
equity financing in connection with its 1951 construction
which is expected to cost $52,328,000. Probable bidders
for new bonds: Halsey, Stuart & Co. Inc.; Morgan Stan¬
ley & Co.; Kuhn, Loeb & Co.; The First Boston Corp.
A hearing on temporary financing through issuance of

$35,000,000 of notes will be held by
Commission today (Jan. 25).

the New York P. S.

stockholders.
bank

repay

Dec.

Kennedy, President, said company is con¬

Dec. 20 D. S.

sidering refunding outstanding $6,500,000 5%% cumu¬
lative preferred stock (par $100) with an equal amount
of preferred stock with a lower dividend rate and may
issue additional common stock (par $10) provided mar¬
ket conditions warrant such action, to finance construc¬
tion program.

Probable underwriters: Lehman Brothers;

Smith, Barney & Co.; Harriman Ripley &
Pacific

Telephone & Telegraph

Co. Inc.

Co.

deferred its proposed offering of 569,946 additional shares of common stock (par $100) to com¬
mon stockholders on a l-for-10 basis.
Proceeds were to
23 company

bank loans and to pay for extensions, additions,
improvements to plant. A majority of the outstand¬

repay

ing preferred and common stock
can Telephone & Telegraph Co.

11

Co.; Harriman Ripley &

Co., Inc.

Proceeds—

part, the company's expansion program,

Pittsburgh & Lake Erie RR.
was reported that the company is expected to
_

Jan. 30 it

put

$5,300,00

of

equipment

trust

certificates

bids about the middle of this month.

Halsey,

Stuart

&

Co. Inc.;




from

repay

fi¬

of

Co.

sought Georgia P. S. Commission for

bank loans and for expansion program.

Co. (Mich.)
Dec. 1 it was announced mat in connection with the fi¬
nancing of the proposed pipeline, the acquisition of dis¬
tribution facilities and the conversion of the system to
natural gas, the company proposes to issue $3,300,000 of
first mortgage bonds, $500,000 of 5%
prior preferred
stock, $200,000 of 6% cumulative preferred stock and
$400,000 of common stock, subject to the approval of the
Michigan P. S. Commission. The FPC authorized the
company to construct natural gas pipeline facilities to
serve the southeastern Michigan area.
'
^

Salomon

up

for

Probable bidders:

Bros.

& Hutzler.

it

was

Gas Co.

announced

(26.95%) of

stock. In event of competitive

bidding, probable bidders may

include Lehman Brothers.

& Canal Co. (2/8)
before noon (EST) on Feb.

United New Jersey RR.
Bids wilLbe received

at

or

purchase of $5,669,000 general mortgage bonds
be dated March 1, 1951 at the office of Geo. H. Pabst,

8 for the
to

Jr., Vice-President of The Pennsylvania RR., Room 1811,
Broad Street Station Bldg., Philadelphia 4, Pa. Probable

Halsey,

Stuart & Co. Inc.; Kuhn, Loeb & .Co.;

Morgan Stanley & Co.;
& Hutzler,

Bros.

Harris, Hall & Co. Inc.; Salomon

Dick & Merle-Smith and R. W. Press-

prich & Co. (jointly); The First Boston Corp.; Lehman
Brothers; Kidder, Peabody & Co. Proceeds—To redeem
at maturity
(March 1, 1951) a like amount of 3V2%

United

company

States

Pipe Line Co.

(Del.)

Sept. 25, it was announced that this company had been
formed to build, own and operate a petroleum product!

pipeline from the Texas Gulf Coast to St. Louis, Chicago
and other midwest markets to operate as a "common
carrier."
The initial financing hasobeen arranged for
privately, with no public offering expected
E. Holley Poe and Paul Ryan, of
New York, N. Y., are the principal officers
two years.

poration.
Utah

7 ■■■'•/■ 7-7'Z'

for at least
70 Pine St.,.
of the cor¬

777

Natural Gas Co.

21, the company applied to the Utah P. S. Commis¬
permission to extend the proposed natural gas
line from northeastern Utah to include additional areas
in that State. The estimated cost of the project was in¬

Nov.

sion for

to $32,000,000 (from $25,000,000 in the original
application), according to John A. McGuire, President,
and the length of the proposed transmission increased
from 325 miles to 469 miles.
•
/f
; /
Utah

Pipe Line Co., Dallas,

Tex.

applied to FPC for authority to
a 392-mile pipeline from Aztec, N. Mex. to the Salt
City, Utah, area, at an estimated cost of $22,000,000.
14 company

Dec.

Valley Gas Pipe Line Co.,

plans to issue and

approximately 27,000 shares of preferred stock (par
$100) and approximately $4,000,000 of first mortgage
bonds (in addition to the 150,469 additional shares of
common stock filed with SEC on Jan. 8.—see preceding
sell

build
Lake
:/

Inc., Houston, Tex.

sought FPC authorization to construct,
a $144,500,000 pipeline project to carry natural gas from
the Gulf Coast and off-shore fields in Louisiana and
Texas to markets in Indiana, Ohio and Michigan. Com¬

June 27 company

is

pany

now

in process of completing

its major financing
•

negotiations for

requirements.

Virginia Electric & Power Co.
announced that the preferred

Jan. 26 it was

Southeastern Michigan Gas

18

Electric Bond & Share Co.

of its holdings of 2,870,653 shares

United Gas Corp. common

stockholders

approvnig a proposal to issue
100,000 shares of authorized but unissued preferred stock.

on

Union

Public Utilities of the SEC hat

creased

authority to issue $3,000,000 new first mortgage bonds.
May be placed privately. The proceeds will be used to

Jan.

•

company

Southern

Pennsylvania Power & Light Co.
Jan. 26 it was announced that an offering of 40,000
shares of preferred stock is expected to be announced
shortly.
Underwriters—To be determined by competi¬
tive bidding.
Probable bidders: The First Boston Corp.
and Drexel & Co. (jointly); Blyth & Co., Inc.; White,
&

advances

is owned by the Ameri¬

•

To finance, in

and

expansion program.

announced that as a preliminary to

phases

some

South Atlantic Gas

Co.

Oklahoma Gas & Electric

Weld

Co.

Steel Corp.

it was

White, Weld & Co. and Stone &

general mortgage bonds.

Price—$15 per share.

loans

Line Co.

the $26,500,000 notes due May 1, 1951 which

16, the Division of

bidders:

the corporation's $49,000,000
expansion program, stockholders will be asked to vote
at the annual meeting March 22 to increase the debt
ilmit of the company to $30,000,000 and to increase
authorized capital stock to 2,500,000 from 1,000,000 shares.
At present, the company has 925,863 shares outstanding.
The company's expansion plan, recently announced, will
sharply increase ingot capacity, pig iron and coke output
and finishing facilities. The additions and improvements
are
to be completed over the next five years.

nancing

and

increase

applied to SEC for authority to issue
stockholders 30,236 additional shares

minority

Pipe

reported that there may be a possibility

United Gas Corp.
Nov.

to dispose

•

parent, and the remainder for

Jan.

dividends.

Jan.

Co.

England Electric System (parent), owner of 42,138
shares
(92.9%) of the 45,353 outstanding shares, will
subscribe for 28,092 shares, plus any not subscribed for
the

and

Webster Securities Corp.

the basis of two new

by

was

offered publicly by

were

(par $10) to common stockholders on
shares for each three shares held.

capital stock

it

of refunding

and sell to common
of

20

Jan.

Light Co.

Gas

Gas

Transcontinental

recommended that SEC order

& Co., Inc.; Kuhn, Loeb &

Salem

Ry.

stated that in event company issues

Kuhn, Loeb & Co.

Co., Inc.;

Ry.
Jan. 19 it was reported that in event company issues
and sells $70,000,000 of refundnig mortgage bonds, prob¬
able bidders may include Halsey, Stuart & Co. Inc.,
and Blyth

was

$36,000,000 of refunding mortgage bonds, probable
bidders may include Halsey, Stuart & Co. Inc.; Blyth &

working capital.

and

it

Pacific

&

Texas

•

Jan. 24

Louis-San Francisco

St.

bank loans. Traditional
Inc., New York.

temporary

or

underwriter is Dillon, Read & Co.

Rhinelander, Wis.
Jan. 22 it was reported
company plans issuance and
sale, without preemptive rights by stockholders, of about
100,000 shares of common stock (par $5).
Underwriter
—A. G. Becker & Co., Chicago.
Proceeds—For new
•

cash

treasury

market conditions).

upon

needed will be obtained from

The balance of the funds

Rhinelander pa par Co.,

construction

(depending

stock

preferred

New

New

•

Jan.

vately

common

planned at present.

$30,000,000 bonds (which may be placed pri¬
with insurance firms) and about $10,000,000 of

around

preemptive rights in 531,558 of the unissued new shares
while 50,000 shares would be reserved for future sale to
employees and for other corporate purposes. Traditional
underwriter: Hayden, Miller & Co. No public financing

•

asked FPC to authorize

company

cubic feet per day.

stock from 350,000 shares (209,221
shares outstanding) to 1,000,000 shares and to effect a
2-for-l stock split-up. The stockholders would then have

authorized

would increase the capacity of
system to over 900,000,000
Tentative plans include the sale of

program

sells

Engineering Co.
stockholders approved a proposal to

18

Jan.

Corp.

asked FPC permission for approval of a

Texas-to-Ohio pipe line

the

Electric &

Reliance

•

The

markets.

Halsey, Stuart & Co. Inc.; Blyth & Co., Inc. and Smith,
Barney & Co. (jointly); The First Boston Corp.; Lehman
Brothers; Kidder, Peabody & Co.; Harris, Hall & Co.

(Inc.); Glore, Forgan &
(jointly).

Transmission

Gas

$42,300,000 construction program, which will include the
building of 580 miles of pipe line to supply natural gas
in its own mid-Western service area and in Appalachian

about $7,000,000." Probable bid¬
reported issue of $15,000,000 new bonds are:

ders for a

construction.

new

Texas

is estimated at

needed

•

•

the

in

Proceeds—To repay advances from parent

(jointly).

Jan. 3 company

announced that "it will
funds for construction
second quarter of 1951. The amount

necessary

purposes

,

up

out

be

of company to split

approved application

The

Co.

and for

J. E. Loiseau, President,
to raise additional

Nov. 1,

months.

Mountain States Power

Probable bidders:

& Hutz¬

ler; The First Boston Corp.; Harriman Ripley & Co., Inc.;
Hemphill Noyes, Graham, Parsons & Co. and Drexel &

of Colorado

Service Co.

Public

Stockholders on
27 will vote on increasing authorized preferred
from 100,000 to 150,000 shares and common stock
1,500,000 to 2,500,000 shares. R. M. Heskett, Presi¬
stated that about $10,000,000 will be raised within

Nov.

plans to issue

Underwriters—To

and
Co.;
Salomon Bros. & Hutzler; Harriman Ripley & Co., Inc.,
and Union Securities Corp. (jointly); Lehman Brothers;
Equitable Secuiities Corp.; Drexel & Co. Proceeds—For
expansion program. Offering—Expected on April 3 with
SEC registration tentatively scheduled for March 2.

Pierce, Fenner & Beane.

Merrill Lynch,

announced that company

was

Halsey, Stuart & Co. Inc.; W. C. Langley & Co. and
First Boston Coip. (jointly); Kidder, Peabody & Co.
Alex Brown & Sons
(jointly); Glore, Forgan &

asked FPC for

company

it

1

$10,000,000 of first mortgage bonds.
be determined by competitive bidding.

authority to issue $2,800,000 of 2V2% promissory notes to banks to provide
funds for its expansion program. These notes, together
with $3,000,000 of notes authorized by FPC last May, are
to be refunded by permanent financing before April 1,
1951. Traditional underwriters are Blyth & Co., Inc. anc
11

(4/3)

Potomac Edison Co.

Co. Inc.;

registration on March 23.

Oct.

Probable bidders for bonds may
Salomon Bros. & Hutzler

Halsey, Stuart & Co. Inc.;
and Shields & Co. (jointly).
be

issuance anc

it was announced company plans
$10,000,000 of first mortgage bonds.

1

Dec.

27, Thomas Delzell, Chairman, said that the $20,000,000 Deschutes River project, temporarily being fi¬
nanced by short-term borrowings and bank loans, will
be refinanced later by the sale of long-term bonds and
common stock.
The latest stock financing was handled

Jan.

& Co.; Lehman

Co.; White, Weld

Kidder, Peabody & Co. (jointly); Salomon Bros.

Electric Co.

General

Portland

•

Continued from page

March 2 will

vote on

Ltd.
that Westcoast Transmission
Co., Inc., its American affiliate, has filed an application
with the FPC seeking authorization to construct approx¬
imately 615 miles of pipeline for the transportation of
natural gas in the States of Washington and Oregon (this
project is estimated to cost $25,690,000). Both companies
are
sponsored by Pacific Petroleums, Ltd., of Calgary,
Sunray Oil Corp. and other members of the "Pacific
Group" engaged in active oil and gas exploration and
development in Western Canada. The completed line of
both companies, to be about 1,400 miles, will, according
to
estimates, cost about $175,000,000, to be financed
75% by bonds and the remainder by preferred and com¬
mon
stock. Underwriters—Eastman, Dillon & Co. and
Westcoast

Transmission Co.,

10, it was announced

Nov.

The First Boston Corp.

columns).
Texas

Electric Service Co.

contemplates
sale early this spring of additional first mortgage bonds
to the public and of additional common stock to parent,

Jan.

5

it

was

reported that this company

Texas Utilities Co.

Underwriters—To be determined by

Probable bidders: Halsey, Stuart
& Co. Inc.; Union Securities Corp., Glore, Forgan & Co.
and White, Weld & Co. (jointly); Blyth & Co., Inc. and

competitive

bidding.

Worcester
Jan.

22

County Electric Co.

it was -stated

early registration is expected of

$12,000,000 first mortgage bonds. Underwriters—May be
determined by competitive bidding. Probable bidders:
Stuart & Co. Inc.; Lehman Brothers; Merrill
Lynch, Pierce, Fenner & Beane; Kidder, Peabody & Co.;
The First Boston Corp.; Harriman Ripley & Co. Inc.
Proceeds—To retire bank loans.

Halsey,

Number 4982

Volume 173

.

.

The Commercial and Financial Chronicle

.

such issues

on

dealers' shelves had

been reduced well below the

000,000

NYC

inroads

backlog

nature

of

middle

the

in

the

Smith, Barney & Co., all of New
York City, made public offering

Light & Power Co., 35-year bonds
to a rather disappoint¬

Jan.

on

York

Gas, Electric

31

Frank S. Williams Opens

$19,225,000

of

City

Housing

bonds which

got away

subdivisions.

Pittsburgh

by

Authority

market observers explain

Joins Loewi Staff

it

this bond, carrying a 2%% inter¬
est rate and priced at 100.67 to

;

MILWAUKEE,

Wis.

—

had

members

dian Insurance company, plus sev¬
eral

New

found

field,

same

fitted

firms

England

that

in

Midwest

Stock

/^p|\

The

this

Cents

Weil, Arnold & Crane

rporrd

at

York,

January 29,

The

dividend

February

1950, payable; at Room No.
Exchange Place,
New
York
5,
and after February 23,
1951.
on
the
stock
will
be
paid to

of

stockholders

record

at

the

close

.W.
'
■

>

•

,

New

New York,

York,

of

business

1951.

9,

*

w.

COX,
Secretary.

January 29,

1951

The Board of Directors of the

COMPANY

1951.

of this Company has
dividend of Twenty (20c)
on
the outstanding
capital
a

the

(Incorporated in New Jersey)
has

this day declared 3. cash dividend on thi
capital stock of $1.50 per share.
This*dividend will be payable March 13, 1951.
to stockholders of record at the close of business,
three o'clock P.M., on February 8, 1951.

to shareholders
business February

of

A. C. MINTON, Secretary

January 29, 1951.

issued and outstanding, payable

1951

15,

close

COMPANY

OIL

STANDARD

Ohio

Company has declared a dividend
of Fifty Cents (500 per share on
the 1,792,520 $2.00 par value
common shares of the
Company
to shareholders
the close of business

February 24, 1951,

1951.

16,

year

20

York,, on

of Eaton Manufacturing

Directors

declared

per
share
payable March

stock,
of

of

Board

day

the

No.

New

DIVIDEND NO. Ill

LINE

PIPE

Street

Broad

New

of record

at

C. O. BELL. Secretary.

,

February 5, 1951.

interest,, demand for the bonds
came
in.. rapidly
with
savings
banks and trust companies report¬
ed as substantial

quarter
and
share
1951 to

one

for

3400,

per

Stock,

Cleveland 10,

COMPANY
SO

Formed in New Orleans

for

of

$1.50

or

MANUFACTURING

EATON

BUCKEYE

Exchange.

setups.
Once these institutions disclosed

Preferred

declared

dividend

cent

ings

The Board of Directors

THE

the

portfolio

has

1951

per

thereon,

DIVIDEND NOTICES

issue

the

their

into

nicely

the

of

RAILROAD

£sso

William

large Cana¬

It appears that one

31,

1951

payable April 20,
stockholders of record April 6,
1951.
Also declared a dividend of
fifty cents per
share on the No Par Common Stock,
payable
March 5, 1951 to stockholders of record Febru¬
ary 9,
1951.
G. F. CRONMILLER, Jr.,
Vies President and Secretary
on

incl.

2001

The bonds and interest

a 2.72% return to the buyer, L. Henke has joined the staff of
particular appeal to certain Loewi & Co., 225 East Mason St.,
investing institutions.

yield

classes of

WESTERN

&

Board of Directors has
fixed and
de¬
$50.00 the amount payable on Crass "A"
Debentures (Payment No. 55), and a dividend
of $5.00 to be payable on the
capital stock, and
$10.00 to be the amount payable on Class "B"
Debentures (Payment No. 34), cut of net earn¬

annually on March 1 from

1953 to

(Special to The Financial Chronicle)

Directors

March

one-half

City of New York.
The
PROVIDENCE, R. I.—Frank S. bonds, bearing coupon rates of
But the issue literally took fire Williams is engaging in a securi¬
iy?%, 1%%, 2% and 5%, are
before the day was over and the ties business from offices at 89 being offered from a yield basis
of
Elm
$1.05% to a dollar price of 98.
sponsors
were
able to announce
grove Avenue.
oversubscription
and
closing
of
They are dated March 1, 1951, and
As

of

Beard

ending

to

as

the

mature

Pennsylvania
January 26,

payment of principal and interest

(Special to The Financial Chronicle)

New

COMPANY

HARBISON-WALKER

ing start upon public offering.

the books.

GREEN BAY

REFRACTORIES COMPANY

New

guaranteed

are

of

The

Corp.;

is

Last week's offering of $25,000,-

Consolidated

Boston

Harriman Ripley & Co., Inc., and

for bids.

up

other

and

State

clared

month

expected to put $5,300,000 of cer¬
tificates

First

Inc.;

the

the State of York.
any of its political
They are legal in- '
DIVIDEND NOTICES

or

syndicate headed by Blyth &

Co.,

sight

in

institutions

DIVIDEND NOTICES
A

banks

for

vestment

39

also

States,

York

since

& Lake Erie

Pittsburgh

New

Offered to Investors

in the way of new

this

of

business

when

this

into

is little

before

of

Housing Authority

of legal attorneys,
taxation by the

exempt from

United

And chances favor further share

there

the opinion

are

This suggests sales

level.

week.

past

in

$19,225,000 Bonds of

$18,-

running around $10,000,000 in the

000

(559)

H. C.

Declared
iNCORPOHATeO

V

SUBURBAN PROPANE

STUESSY, Secretary

January 26, 1951

on

v

GAS CORPORATION

"

*

vC'

buyers.

REGULAR QUARTERLY

Now

bankers

carrying

are

Commonwealth

who

dealers

and

the

\jHpp

111 Fifth Avenue

$49,000,000

big

Edison

Co.

New York 3, N. Y.

50182nd Common Dividend

debenture issue would like
see
something along similar

year

to

lines

develop in that
thus

But

A

area.

still

cash

share have been

per

L.

Harry

H. Wilson Arnold

January 30s

Treasurer

January 25, 1951

clared
per

share

on

of business February 16, 1951.
E. 0. Jenkins. President

religious

>]

ported

been

Ml 1.1.5, Inc.

considerable
A

quarterly

share

3%s of 1963, with the
purpose,
too, of lengthening the
investment life of the holdings.
buying of

While there is
of

Backlog

a

debt

issues

trations

world-wide

do

not

get any

V\' ■■''-■V

worse.

Southern

California Edison Co.,

example

has

—

to

has

looking

in

toward

000,000 of
bonds

Power

set

the

to

be

sold

in

It

with

Michigan

the

has

Commission.

competitive

filed

Proceeds

retire certain outstanding

tions

finance

and

Serv¬

&

ners

tion.
.

The
sion

Tennessee
has

Co.

000,000

Transmis¬

Gas

registered

first

for

mortgage

bonds,; 20-year

$35,-

pipeline
to be

maturity,
sold in competition.

DIVIDEND No.

road

equipment trust certificates
their
positions
much im¬
proved from the latter part of

find

last

year.

Early
cated

this

that

week

the

it

unsold

was

indi¬

volume




interim

(60(0
on

of

164

30 cents per

the

dividend of sixty cents

Interest Payable
:

capital stock of The Borden

Board

of

and

and

'

,

"B"

SERIES

nance

Burroughs

"A"

BONDS

Directors

declared

after

the

have ascertained,

from

interest

"A"

BONDS

IVAN

C.

FLITCRAFT,
&

CONSECUTIVE

A

dividend

share

has

stock

of

of

been

record

10,
at

cents

declared

BURROUGHS

COMPANY,

MACHINE
March

twenty

1951,

to

a

per

to holders of Common

CHAS. F. BRADLEY, Secretary

One Broadway, New York 4,

N. Y.

".•>

SHUTTS,

clared

close

the

($.20)

a

the

ADDING

payable

of business

of

Feb¬

10, 1951.

Detroit, Michigan

January 29, 1951

and

Fi¬

Committee

of

the

Company

•

DIVIDEND NOTICE
New York, January

Dividends aggregating

share for the first
quarter of 1951 upon the $5
Preferred Stock, payable
March 15, 1951 to stockhold¬
ers of record at the close of
per

business

$1.00

February

per

Common

share
Stock,

15,

February

as

on

the

follows:

To Stockholders of

the

Date of

Record at the Close
of Business on:

$1.25

Mar. 15, 1951

1.25

June

1.25

Sept. 14, 1951

15, 1931

Feb. 15, 1951
May

15, 1951

Aug. 15, 1951

A dividend of One Dollar ($1.00) per share

1951.

Goodyear Tire & Rubber Co.

By W. D. Shilts, Secretary
Akron, Ohio, January 29. 1951

payable

Payment

pavabie

15,

30, 1951.

share

Amount

1,298,200 shares of Common Stock with¬
value of Southern Railway Company

on

The

per

Preferred Stock of Southern Railway Company

1951.

upon

$3.75

have today been declared,

March 15, 1951 to stockhold¬
ers of record at the close of
business

Sheldon F. Hall,
Secretary

©

;

.

today the following

out par

has

of

f\j

The

TREASURER

Railway

NOTICE

Executive

dividends:
$1.25

upon

Southern

.

CASH

shareholders

BONDS

Coupon No.
15—April 1, 1951—$20 on
$1,000 and $10 on $500 Bonds
Coupon No. 16—October 1, 1951—$20 on
$1,000 and $10 on $500 Bonds
SECRETARY

its

quarterly dividend of
share payable March
Stock of
record February 23,
1951 who on that
date hold regularly issued Common Stock
($1.00 par) of this Company.
9, 1951

Board of Directors has de¬

DIVIDEND

ruary

Coupon No. 15—April 1, 1951—$20 on
$1,000 and $10 on $500 Bonds
Coupon No. 16—October 1, 1951—$20 on
$1,000 and $10 on $500 Bends
"B"

202nd

de¬
the

payment
dates
given, the Fidelity-Philadelphia Trust Company,
Philadelphia,
Pa.,
will
pay
the
following
amounts for coupons surrendered:

SERIES

on

($15 par)

The Board of Directors has authorized
the payment of
fifty cents ($.50)

GOODYEAR

Treasurer

DIVIDEND

earnings of
year ended December 31,
1950, 4% interest on
the
Adjustment
Mortgage Series
"A"
Bonds
and 4%
interest on the Adjustment Mortgage
Series
"B"
Bonds, 2% payable April 1,
UJ51
and 2%
payable October 1, 1951, as provided
in
Section
4
of
the
Supplemental Indenture
dated April
1, 1943.
On

its

,President.

January 29, 195J

The

Philadelphia, Pa.
January 24, 1951
The

termined

its

February 9, 1951.

January 30, 1951

RAIL¬

on

MORTGAGE

AND

share

EDWARD L

COMPANY

•

v

,

on

payable March 1, 1951, to
stockholders of record February 15,1951.

April 1, 1951 and October 1.-1951

ADJUSTMENT

on

all dividends

share has been declared

per

of business

NOTICE

VALLEY

ROAD

share

Common Stock

An

E. L. NOETZEL

MIDLAND

cents per

Company, payable March 2, 1951,
to stockholders of record at the close

FINANCIAL

SERIES

Equipment Trusts
Dealers who specialized in rail¬

35%

4%% Preferred Stock ($50 par)

and

Wilson- Arnold,

H.

share

5%% Preferred Stock ($30 par)

/3cidm/T

Joseph H. Weil, G. Price

are

Stock
DIVIDEND

41 % cents per

Crane,

would

obliga¬

construc¬

new

United States Lines

Company

the

of

issue

the

Public

DELAWARE

OF

1951.

plans

$40,-

Vice President & Treasurer

The Board of Directors has declared the

mortgage loan business heretofore

mean¬

of

sale

Foundry Company

POLONSKY, Secretary

partnership of Weil,
National Bank
of
Commerce
Building, to con¬
tinue the investment banking and
tion

30-year first mortgage

bidding.
ice

Co.,

motion

20,

H.

and

LORENZO SEMPLE

following dividends:

refunding mortgage bonds of Roswell J. Weil.

Consumers

Pipe

Common

25-year maturity.

while,

per

has

nouncement is made of the forma¬

bidding of $35,000,000 of hew first Crane,
and

50c

March 1,
of record

An¬

registered

mission for the sale at competitive

November 30, 1951

DIVIDEND NOTICE

La.

conducted by the firms of Weil &
with Arnold and G. Price Crane. Part¬
the Securities and Exchange Com¬
for

December 20, 1951

Roswell J. Weil

ORLEANS,

NEW

tending to swell the
Arnold
backlog provided con-

are

potential
tions

in

regis¬

To Holders of Record
February 28, 1951
May 31, 1951
August 31, 1951

UTILITIES COMPANY

Stock

payable
stockholders

February

complete dearth

corporate

new

of

Common

declared

19$ 1,

G. Price Crane

immediate prospect, current

dividend

the

on

been

N.
a

day" declared
(75C) each
.Stock of the

follows:

as

March 20. 1951

IOWA SOUTHERN

selling of the 2s, 2%s of 1957 and

Building

Common

June 20, 1951
September 20,1951:

United States

BEAUNIT

I

has

There

Company, payable

.

this

of seventy-five cents

outstanding

The transfer books will remain open.

direction.

:r

the

Payable

and charitable institutions are re¬

activities.

Foundry Company

York, N. Y., January 25/ 1951

of" Directors

four dividends
on

stockholders of record at the close

com¬

pany.

especially active in that
They are, of course,
seeking to improve their yields
and perhaps turn a profit by their

New

The-"Board'

outstanding capital

vertible

Portfolio managers for

<

"

stock payable March 12, 1951, to

that

*'

quarterly dividend of 25c

a

up intensely
active trading in outstanding con¬

of

United States Pipe and

nesota, on January 17, 1951, de¬

1951

f.

Directors of First Bank Stock

•

Hilyard, Treasurer

i

15,1951.

R. GOULD MOREHEAD,

A.

Corporation, Minneapolis, Min¬

bentures ha§ stirred

obligations

shore

per

holders of record February

Dividend

Stock

1951. Checks will be mailed.

Joseph H. Weil

Consecutive

Corporation

record at the close of business February 9,

Telephone & Telegraph Co.'s im¬
pending record issue of new de¬

J

g

March 2, 1951, to stockholders of

on

—25^

Payable March 2, 1951 to stock-

1st\ 53rd

extra dividend of

the Common Stock of Tub

upon

American

f

o

($1.00)

an

American Tobacco Company, payable in

Swapping in A. T. & T. Issues
Announcement

Dollar

One

the slow side.

on

share and

per

declared

brought out several weeks ago, is

Common Stock

regular dividend of Seventy-five Cents

(75(0

far

and

Extha Dividend

an

reports indicate
movement of the huge loan

that

DIVIDEND NO. 20 DECLARED

Greatest
Name

in Rubber

today been declared out of the surplus

net

year

profits of the Company for the fiscal

ended December 31, 1950, payable on

March 15, 1951, to stockholders

tho close of business

on

of record at

February 15, 1951.

J. J. MAHER, Secretary.

The Commercial and Financial Chronicle

40

Thursday, February 1, 1951

:.

(560)

Two With Marache Sims

BUSINESS BUZZ

(Special to The Financial Chronicle)

LOS

Washington...
BeVind-the-Scene Interpretations
from the Nation's

jlJL I

Capital

gan

&

South

Merrill Lynch
From
the standpoint of housing defense
workers, this is going to be just
WASHINGTON,

the

about

C.

D.

—

little old

sweetest

war

"an

in view
of national defense."
risk

acceptable

the needs

of

LOS

are

its

will have its way.

built

That
peerless
economizer
in
public expenditures, Harry S. Tru¬
man, is backing the prettiest little
scheme—and
it
hardly costs
a

nickel,

know—whereby

you

the

housing will be provided
for defense workers, together with
best

in

schools, paved streets,
hospitals, nursery day

of

plenty

fire houses,

children of de¬
perhaps, even
for said children.
for

centers

care

fense

wet nurses

"won't cost

Most of this program

is to say, the
Aladdin lamp discovered a decade

That

anything."

one-half

and

Federal

the

ago,

Housing Administration insurance
system, will just be

rubbed again.

The

must believe,

money,

you

so

not out of the taxpayer but

comes

cut of his bank account,

ft

and since

guaranteed

totally

is

Avenue,

by

the

government, nobody loses.

If

will

Treasury.

the

of

out

come

possible to have
eventually five, six, or seven times
as much spent for housing in this
war as in War II, with the direct
Treasury outlay only maybe twice

Thus it may prove

much.

as

works out under the
Administration's legislation is this:
The way it

President

The

determines

first

that there is "or impends" a hous¬

in any particular
"which impedes or threatens

shortage

ing
area

impede" the defense effort. He
as to any particular lo¬

to

finds this

He is the sole determining
agent. His discretion is unlimited.
When once the President makes
this determination that a housing
cality.

/shortage

threatens

program

("defense"

the

defense
being unde¬

fined), then—
The Administrator of the Hous¬

ing

and

then

to

out

Agency

Finance

Home

sets

don't

they

operate

on

the

build

to

the

self

construct

Treasury

LOS

E.
of

He

them.

this

by

that

is

to

package it is the city plan¬
ners' dream.
Under the guise of
in

one

tration

"fall

itself

let

has

Adminis¬
for"

the

housing"

"defense

of vest¬

the old, ambitious scheme

ing in
cials

group

one

the

power

They

stick.

ning

of Federal offi¬
to plan city de¬

their plan¬

make

and

velopment

eral

funds

says

he won't,

struct

for example, con¬

at the

20-unit apartment

a

the planner's particular

of

corner

time

any

,make it
direct Fed¬
any builder

can

stick for they can use

Street

Mulberry

Cranberry

and

Lane.

They can also make it stick be¬
cause
the bill gives the Housing
and Home Finance Administrator
check

blank

a

the

to

tune

of

hundreds of millions to bring into

ideal city services for
the ideal community of the city

being the

planner.
Con¬

of

members

this is an ex¬
community.
He determines just
how many of what kind of houses travagant deal which it is pro¬
that community needs to make it posed to put over under the guise
•suitable for "immigrant defense of defense housing, and they are
workers." He not only determines unhappy" about it. They say they
how
many,
but
what
kinds— mean to cut the thing down.
gress

LOS ANGELES, Calif.—Willard
W.

"This

that

sense

fellow

from

is

Board, Sue,

Control

Price

we're over the price ceilings!"

Administrator
/sets out to get these houses and
these community facilities.
First,

the

build

to

housing

/stopping

recently
hard to

X,

Regulation

promulgated

it

make

in the

interests of

inflation, is modified as
"defense
community."

Contractors

services.

aren't

par¬

ticular who they build for as long

guaranteed market
under the program with a suitable
they have

as

a

Finally,

profit.

since

thing

the

The

of

housing

military

at

over-riding, all-embracing,

labor,
farmers,
building
up

pressures,
business

sarily need to come about. This is
the. thesis- of a new little book,

Frankenstein

Nineteen

"The

First,"

by

Fifties

Edwin

Dr.

Come

Nourse

G.

that

and

of

the

signal feat of presiding for nearly
years
over
the President's

four

council

Economic

of

Advisers.

During that service he exercised
a

restraining influence

of

the

and

inner

judgment.

builders

are

told

of

what

/structures

commodations

just

Instead
how

If
a

many

kind

of

where

city private builders

the

"Nineteen

Orwell's book,
of

a

war

novel,

or

near

con¬
war is

a

-

is something

He

of

an

"Whatever

Nourse'.
In

1984
come

"■"<'■

.

of

prove

Dr.
;7 7v~
;

7

how

an

says

if

powerful groups which make

the

learn the value of
restraint, they can escape deliver¬
up

society

can

into

themselves

ing

the

in

ac¬

the

build.

can

"private" construction under

modified

Regulation

X

provide the right number

Incidentally,
extension

the

of

and

time

morial, such housing

of liv¬

vokes

ago a

a

bathrooms

new

in

insurance

the

Title

IX

Under this

title, single and mul¬
family housing can be in¬

sured to 90%

to

exceed

to

easy

resist

of "value" but "not

the

to

and

was

The

•

Hedman

of

pany

is

with

Pacific Com¬

California,

623

chief

couple

contingent

Exchange

Dealers

Association

Tel.! HAnover 2-7064 Tele; NY 1-2177

52 Wall Street,

Newjork 5, N. Y.

Angeles Stock

Exchange.

labor,

organized

For

Large Appreciation Potential
WE

SUGGEST

RIVERSIDE CEMENT CO.
CLASS B
A

leading

in

(common) STOCK
producer

fast-growing

Analysis of
a

*

& Davidson

(Special to The Financial Chronicle)

FRESNO, Calif.—Paul H. Darrow is now with Bailey & David¬
son,

cement

Southern

this Company and

review of the Cement Indus¬

try available on request.

Selling about

Joins Bailey

of

California.

'

$12.25

LERNER & CO.
Investment

Securities

10 Post Office Square, Boston 9, Mass.
Tel. HUbbard 2-1990.

2133 Fresno Street.

Teletype—NY 1-971
Firm Trading Markets

Allied Electric Products*
Baker

Raulang

Gisholt Machine Co.

FOREIGN SECURITIES

Osgood "B"

All Issues
*Prospectus

of

years

on

request

r.ARL MARKS & PA INC,

on

FOREIGN

liability,

SECURITIES

SPECIALISTS

Hill, Thompsons Co., Inc.
Trading

argument
was

South

Hope Street, members of the Los

done.

Title ViII

Security

It looked too

Federal budget and

FHA

it

Y.

(This column is intended to re¬
flect the "behind the scene" inter¬
pretation from the nation's Capital
and may or may not coincide with

HAnover 2-0050

50 Broad Street

cost,", the value being the




a

admitted

scheme to get this cost item

out of the

of FHA.

tiple

put up

direct part of the cost of the mil¬

right
places, then the Administrator in¬

and

was

at Treasury

expense, an

N,

government is bringing.

imme¬

doesn't

itary establishment.

ing

J

ing the financing of housing on or
adjacent to military bases and in¬
From

Stock

in the

years

life of FHA Title V1H, for insur¬

stallations.

Claybaugh & Co.

Members Philadelphia-Baltimore

contains

bill

two

Blair F.

grip

historical

organized

farmers

to

may

first,"

part his book is

organized

I., Inc.

optimist

for the long run, inferring that

P.

be, the 1950's

A. M.

plays in initiating and

fathering further big government.

Eighty-

Four," by the late George Orwell.

develop.

Silver Bell Mines

tre¬

cussion of the inflation which big

book,

stant state

the

for that restraint, as well as a dis¬

the

The author of this book refers to

In

however,

part which big govern¬

left-wing

of

im¬

and

circle.

sketch

an

South

Kimberly Corp

to underrate

the Administration

upon some

extreme

moves

another

neglect,

mendous

the

big government.

of
government. Dr. Nourse's book is
a
readable, persuasive argument

more

within

group

of

Dr. Nourse appears

road" conservative, performed the

be hard put when the

sell houses according to their

business

Walston,
550

and

are

ment itself

(Henry Holt & Co., $2).
Dr.
Nourse, a "middle

showdown business came to utilize the tre¬
This
doesn't
mean
that in this comes to deny defense workers mendous power of government to
beautiful
housing which doesn't further their own group ends.
officially-designated
defense
"To make a long story short, it
community,, however,, p r i vat e seem to cost anything, only their
builders are free to design, build, acquiescence.
to

with

Goodwin,

appears

all-powerful state does not neces¬

the

part, conservatives will

&

that there are a great
Spring Street. Mr. Richards was
installations,
enlistments were many Americans who shout for
free
enterprise and hug their in¬ formerly with Morgan & Co. and
lagging. Now there is a draft and
men
must
go
into the services dividual freedom of choice and Buckley Brothers.
whether they want to or not.
So action with one hand but at the
Title VIII is continued in exist¬ same time grasp with the other
ence
two more years, prior to a hand for the power of such united
de facto indefinite extension.
action," he said. In fact, he de¬
clares that by employing group
Maule Industries, inc.
lack

the

"doesn't cost anything," or at least
FHA

associated

come

On the other hand, there are utilized by bureaucratic govern¬
/single - family houses, duplexes,
the "Chronicle's" own viewsJ
apartments, and how much the two strikes in favor of this am¬ ments to secure their holds upon
community needs in the way of bitious planning scheme. One is their societies. Dr. Nourse be¬
that
"resourceful
Amer¬
With Pacific Co.
/streets, clinics, hospitals, and per¬ that
the
interested
parties Tor lieves
haps softball leagues, for recrea¬ the most part will like it. Cities icans, ' unafraid
and
unasleep,"
(Special to The Financial Chronicle)
tion is included.
need
not let such a catastrophe
will
like
subsidized
municipal
LOS ANGELES, Calif.—Robert

Thereupon

Bower, Clifford Ft Campbell,

and Charles H. Richards have be¬

Hoffman

petuous

Conservative

staff

Hoffman

*

down

boils

this

All

the

Morgan & Co., 634 South Spring

(Special to The Financial Chronicle)

he says

*

Calif.—Orville

joined

With Walston,

centers."

care

has

pur¬

chase, acquisition, subsidy, or in
an.y other conceivable way. Com¬
munity facilities include sewers,
waterworks,
schools,
hospitals,
fire protection, police protection,
and—in the language of the bill—
"day

ANGELES.

Alloway

geles Stock Exchange.

improve

or

do

may

staff

Street, members of the Los An¬

he pleases, expand com¬

facilities,

the

joined

(Special to The Financial Chronicle)

Finally, the Administrator may
community
facilities
in
way

has

Morgan Co. Adds

so,

money.

munity

i

!

him¬

create
any

of

Mitchum, Tully & Co., 650 South

direct

with

them

|

ANGELES, Calif.—Charles ?

Jones

Spring Street.

them

do

to

want

Tully

do so.

can

Administrator will

then

*

"community facilities"

plus

want

Beane,

I

LOS
L.

is wanted.

Title IX, they

then

for

that because of

f

Pierce, §
523 West Sixth I

(Special to The Financial Chronicle)

just
If

builders

the

of what

builders

under

Only "direct government hous¬

ing"

tells

much

&

j

Lynch,

Joins Mitchum,

nose

Cranberry Lane of the
housing
develop¬

or

He

ment.

how

the

btreet,

Merrill

I

defense

new

and,

women

Mulberry

on

Darrell E. Williams

Street.

history

ministration

with

Fenner

States ever fought in
opment of the community and de¬
if the Administration cides
how
many
single-family
has its way with Congress. Right houses, how many duplexes, and
now
the betting is that the Ad¬ how many apartment units shall be

United

the

Calif.—Joseph

ANGELES,

A. Rezzo and

his master plan for the devel¬

up

Adds

(Special to The Financial Chronicle)

looks

Administrator

the

Then

Street,

Spring

Exchange.

JL t/ Ub

l/M

634

Co.,

A. Mor¬

Marache Sims

with

now

are

members of the Los Angeles Stock

m/g-i-w|

gJ

Calif.—Harry

ANGELES,

Maxwell and Edward

R.

New York 4, N. Y.

Department

70 WALL STREET, N. Y. S
Tel. WHitehaU 4-4540