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, The. gilinurct31 * iirotude Volume 138 New York, Saturday, February 10 1934. Number 3581 The Financial Situation REAL menace that confronts the country at the present time is the ready way with which our legislators vote Government money for huge expenditures of one kind or another, with the result of enormously swelling the public indebtedness, and propose measures for adding still further to the burdens of the already heavily overladen body of taxpayers. This is a real menace, and it cannot be too strongly discountenanced. Business recovery is now undoubtedly proceeding in a slow kind of way. Whether one is inclined to attribute this to the policies so earnestly being pushed by the Washington Administration for social and economic regeneration in the name of the New Deal or to natural causes, the endeavor must be in either case to see that no setback occurs. Yet a setback cannot be more surely invited than by adding to the burdens already straining the economic structure almost to the breaking point. Unfortunately, by reason of the constantly recurring experience of recent years we have come to think and act in billions, where previously we scrutinized with the utmost care outlays involving merely millions. The voting of billions is becoming an everyday affair, and no longer arrests attention or creates any anxiety. But these new burdens are burdens nevertheless, and they are really assuming staggering dimensions, with only an occasional protest and no consideration of the ill consequences that are sure to follow unless a speedy halt is called. And when we say this we have in mind not merely the growth in direct public indebtedness and in public expenditure, but the adding to the outlays in the conduct of the everyday activities of the country. Our legislators are becoming altogether too prone to think that there is no limit to the costs that may be imposed on the carrying on of business so long as in their estimation they are deemed desirable—not from a business standpoint, but because they involve certain ideals from a social Or humanitarian standpoint. The daily papers on Monday of this week contained an instance of this latter kind. Dispatches from Washington, dated the night before, apprised us that "another social experiment had been proposed in detailed form that night in the shape of "job insurance"; that is, unemployment insurance, the Federal Government iaking the initiative in the matter in order to force its general adoption by the States. Senator Robert F. Wagner of New York, it was stated, sponsor of much of the Administration's social and economic legislation, and Representative David J. Lewis, Democrat of Maryland, were scheduled to introduce the measure in the two A houses of Congress. President Roosevelt, we were told, had voiced his interest in the bill in sympathy for its general purposes, without committing himself publicly and specifically as yet. This scheme of legislation, it was declared, was intended as a "means of stabilizing industry, mitigating the full force of depressions and meeting relief needs." In a joint statement it was averred by Senator Wagner and Mr. Lewis that unemployment insurance was "imperative as a matter of social justice." The bill imposes a Federal tax on employers, based on their payrolls. Those employers who contribute under a federally approved State law to an unemployment insurance or reserve system will be able to offset the tax to the extent of their contributions. But what is to be the cost of this new scheme? The answer is that a tentative tax rate of 2% is suggested. This, it is figured, on the basis of 1929 payrolls, would yield about $1,000,000,000 annually if there were no offsets. Just a cool billion dollars! But who is to provide the money for this extra billion dollars? Here we have an illustration of the light and easy way in which billions are treated. The question where this billion dollars a year is to come from is certainly most pertinent. If the money is to come out of income, what would be left of this Income (treating the business of the country as a whole) after providing for this billion dollars annually? Would it indeed be economically possible to carry an extra burden of a billion dollars in addition to all the other burdens which now weigh so heavily on the industrial activity of the country? Are there to be any exceptions to this new tax? Yes; agriculture is exempted from the insurance program along with employers of less than five persons. There are numerous voters among these two classes, and obviously it is desirable, from a political standpoint, that they be propitiated. But it should not escape observation that if a total of a billion dollars is to be extracted it would not be out of the income of the whole population, but the income alone of what is left after that of the two classes referred to has been deducted. That, of course, would make the extra burden heavier to bear, since the tax would be levied on only the income remaining after deducting that of the two classes referred to. The purpose behind this machinery,it is explained, is to give a "realistic" impetus to State action. With a State unemployment system enacted, employers would escape the Federal tax, and the burden of the State tax would not penalize them in inter-State competition,since employers in States failing to take action would be liable to the Federal levy. Only 904 Financial Chronicle Wisconsin has State unemployment insurance now. It is furthermore explained that under the Wagner bill the States may experiment in creating their own systems so long as they meet certain requirements. But what are these requirements? They include weekly benefits of at least $7.00, and a ban on insuring through private insurance companies. Another requirement, it was pointed out, promotes the general labor movement by insisting on "specific safeguards for labor standards and union membership." In this last provision we see the object of the whole movement clearly disclosed for which a billion dollars annually is to be extracted from the income of a portion of the population. It is plain enough that the whole scheme should be dropped— at least until the time when some real income is available for the purpose. In the meantime any of the States that wish to do so may "experiment" with the scheme, which is one, anyway, that belongs within the sphere and province of the State. HE next day (Tuesday, Feb.6) the daily papers contained a record of another billion dollar scheme, dealt with in the same spirit of unconcern. This contained the record of the action of the House of Representatives on Monday in voting a huge sum for emergency and farm relief. The daily papers, in their accounts from Washington,said that acting under suspension of the rules the House appropriated or authorized a total of $1,185,000,000 to be expended for emergency and farm relief. It appears that by a vote of 382 to 1 the members, after only 40 minutes of debate, approved unchanged President Roosevelt's recommendation for an immediate appropriation of $950,000,000 to continue the Civil Works Administration, at least until May 1, and to provide for direct relief of the destitute for perhaps another year. Then, under the same tight procedure, which requires a two-thirds vote, the House authorized a fund of $200,000,000 for relief of the cattle situation—beef and dairy—by means of controlling production, and authorized $35,000,000 for seed loans to farmers unable to finance their future plant. ings. Here we have one of those contradictions so often seen in Congressional action. It is well known that the Administration is moving Heaven and earth to reduce the size of the leading crops, and this is to be done by cutting down acreage and curtailing output, while now a special sum is voted to enable other farmers to maintain their production, when it would be the part of wisdom to let such acreage lie idle. But note the overwhelming vote by which these large sums of money were appropriated-382 votes in favor and only mingle vote in opposition. The man who had the courage to stand up and voice his objections was Representative George B. Terrell, Democrat of Texas, 71 years old, and serving his first term in Congress after being elected in his district, we are told, in 1932 by 37,742 majority over his Republican opponent. The Republicans, it appears, voted solidly with the Administration. Representative Terrell, the news account tells us, has piled up a record in the House for voting against legislation bearing Administration approval, including the Gold Act, insofar as he considered the proposals depart from the Constitution and the functions of the Federal Government, and objected to the CWA bill on those grounds. "The purpose is unconstitu- T Feb. 10 1934 tional," Mr. Terrell said. "There is no authority for expenditure of this money except on projects of the United States Government. When they spend it on State, municipal or private contracts, it is without the authority of the Constitution. The sooner the Government terminates the CWA the better it will be for the country. It is going to require civil war or revolution to stop it anyway, in my opinion. Men cut off from the payroll are going to resort to violence when it stops." But the strongest and most convincing argument against the proposition was in Mr. Terrell's further statement. "The proposal continues a perpetual bond issue, a continued strain on the country to pay the interest on the bonds," he said. "As long as the Government persists in this kind of thing, private industry will be held back. No man is going to invest money when the Government is competing with him on every side. It is an unsound policy from a business standpoint. If it ran on for two or three years we would still have four million to five million unemployed." What Mr. Terrell here says should be heeded, for there is a world of truth in his statement that as long as the Government injects itself in such schemes, private industry will be held back. It also is true that no man is going to invest money when the Government is competing with him on every side. Mr. Terrell wound up his opposition with the following dramatic utterances: "They can retire me if they want to. The others can go through like dumb driven cattle if they want to, •but I am not going to. They can't snap the whip behind me." Representative John Taber, Republican of New York, ranking minority member of the Appropriations Committee, declared the appropriation was not needed,though he voted for the bill, nevertheless. His statement also deserves to be placed on record. It was to the effect that there are a total of 7,000,000 families on relief-4,000,000 on CWA rolls costing $225,000,000 a month; 2,650,000 on direct relief costing $50,000,000, and 350,000 provided for by the PWA costing $150,000,000, or a grand total of $425,000,000 monthly. Let the reader well remember this, that relief is costing $425,000,000 a month, or over $5,000,000,000 a year! IT IS true that money has been coming rather easily into the public coffers. The statement regarding money stocks in the country, issued on Thursday, tells plainly how the Government has just enriched itself in a huge sum without effort. During the past week the monetary stock of gold in the country has been increased in the enormous sum of $3,001,000,000, the amount having risen during the week from $4,035,000,000 to $7,036,000,000. The statement also indicates where this extra gold stock has gone, for it shows that Treasury cash and deposits with the Federal Reserve banks was enlarged during the week in the sum of $2,853,000,000, rising from $596,000,000 to $3,449,000,000. Of course all this reflects merely the marking down of the dollar from 100c. to 59.06c. With less gold in the dollar, a given stock of gold will naturally produce more dollars. But obviously this is a process that cannot be repeated many times, even if there should be authority for so doing, though a few hundred millions more can be obtained by further diminishing the gold content of the dollar so that it will be worth only 50c. instead of 59.06c. Volume 138 Financial Chronicle 905 to inevitable losses, with IESSE H. JONES, the Chairman of the Recon- banking methods, leading the start. struction Finance Corporation, has also the the safety of the System imperilled from deposits of guarantee present week been distinguishing himself by the light- In such a state of things the that • assumption The hearted and light-handed way in which he has been becomes a snare and a fraud. where situation a produces dealing with public figures involving billions of dol- everything is all right wrong. lars. He spoke on Monday before the New York everything is likely to turn out all wish particuwe What pass. that let However, State Bankers' Association, and the burden of his which Mr. in way facile the is emphasize to larly speech was that the banks ought to pursue a more of the debt public growing the of disposes Jones prosor liberal policy in extending credit to actual no give we that suggestion the and States United only however, pective borrowers. The daily papers, expandkeeps it how matter no whatever, concern especially and point, featured his utterances on that in which his remark that "if the banker fails to grasp his ing. Here is the skillful and dexterous way of the mass opportunity and to meet his responsibility, there can Mr. Jones disposes of the immense thank to ought we that feel be but one alternative—Government lending." Mr. public debt, making one state a in live to permitted are we Jones argued that"no one must be allowed to suffer the almighty that bliss: for a lack of food or clothing or shelter, or become of such extreme mendicants for the lack of credit for agriculture, "Some of the more conservative of our people are business and industry, small as well as large, and concerned about the size of our national debt, and, The public including those instances that carry a little mite to my way of thinking, unnecessarily. with off$25,000,000,000, approximately now is debt more than the average business risk." Mr. Jones Public and RFC the due assets earning and setting also contended that "banking should be conducted Works sufficient to reduce this amount to less than more in a spirit of public service than purely for $22,000,000,000. Adding $10,000,00,000 included in profit; it should be more a profession than a busi- the President's extraordinary budget will bring the ness involved with speculation." total indebtedness to not more than $32,000,000,000. to references The interest on this at 3% is slightly less than a these only The newspapers quoted billion dollars a year, and if it was necessary to many were there fact, of his remarks. As a matter the entire amount in say 35 years the added amortize similar striking passages on other subjects. As a would be $320,000,000, or a yearly outcost annual preliminary it is worth noting how satisfied Mr. lay of approximately $1,300,000,000. Jones feels with things—with himself and with "When it is considered that in 1929 the income of everything in general. The Federal Reserve banks the American people was $89,000,000,000, and in have just been denuded of a considerable portion of 1932—the low year—$40,000,000,000, this national their gold holdings,thereby impairing their strength. debt is not a serious problem. It is fair to assume They have also had to turn over half their surplus that with recovery already assured, the nation's in$65,000,000,000, for the purpose of subscribing to the capital stock come may safely be calculated at extinguish the nacompletely which would of 2% But of the Federal Deposit Insurance Corporation. tional debt in 35 years." that has not lessened Mr. Jones's confidence in the It is always well to be optimistic, and in this System. He says,"We have a Federal Reserve Sysexperience has shown that a hopeful view by country owned world, the best tem—the banking system in its member banks, and they (the ordinary commer- regarding the future is always justified. But spendcial banks) should not hesitate to make use of all its ing habits, where outlays •and expenditures runfacilities." Parenthetically it might •be remarked ning into billions are not viewed with the deepest here that the fact that the Federal Reserve banks solicitude, are full of genuine menace, and they cerare "owned" by the member banks has not prevented tainly cannot be regarded as an aid to business retheir being stripped of over 40% of their gold hold- covery, 'but instead are calculated to retard such recovery. The country cannot count upon a return ings by the Government. Here is another striking utterance: "Our prop- to normal trade and business activities unless we erty has value and our money has value. It will make up our minds that outlays of such magnitude always be so in America. Furthermore, the depres- must not only be discountenanced but speedily sion is over, and we are assuredly on the up-grade." brought to a close. Old-fashioned principles of rigid Again: "Now that the President and Congress have economy will still be ruling the universe even if the acted on our money, there is no longer any valid rea- New Deal should meet the most sanguine expectason for hesitation, and the Government should not tions, and the sooner that we recognize that fact be forced to become the banker for every deserving the better it will be. borrower in the United States. Let's also quit worHE Federal Reserve condition statements this rying about the dollar—it is the best money in the week call for no special comment, though the insurworld." We are also told that "with deposit of the changes in money circulation and for statement occasion any ance in effect, there is no longer gold stock, issued concurrently with the monetary "dethinks that Jones extreme bank liquidity." Mr. posit insurance for people of small and moderate same, show several large changes growing out of the means is highly desirable, and as applied to this devaluation program. These last were not included class of depositors should never be repealed. It in the return for last week, a footnote then having makes bank runs improbable, if not actually impos- explained that the gold holdings were still valued at sible, and is worth whatever it cost." Here it seems the former figure of $20.67 an ounce, as the books of proper to inject the observation that it is precisely the United States Treasury had been closed on in this expression of a sense of security, this feeling Jan.31 prior to the issuance of the Presidential procthat the depositor is protected, and hence there is no lamation reducing the weight of the gold dollar need to worry, that he no longer is called upon to to 15 5/21 grains. This week the holdings have been think about the management of the bank, whether taken at the new value, and as a consequence there it is good or bad; this leads to an absence of the is an increase in the monetary gold stock in the watchfulness which alone insures safe and sound huge sum of 43,001,000,000, the total having risen T 906 Financial Chronicle Feb. 10 1934 from $4,035,000,000 on Jan. 31 to $7,036,000,000 NLARGED or renewed dividend distributions by Feb. 7. At the same time we see revealed what has corporate entities have again been numerous become of the greater part of the $3,001,000,000 ad- the present week. The American Woolen Co. dedition to the gold stock in an increase in Treasury clared a dividend of $1.25 a share on its 7% cumul. cash and deposits with the Federal Reserve banks pref. stock,'being the first distribution on this stock in the tremendous sum of $2,853,000,000, this latter since April 15 1927. The International Nickel Co. item the present week standing at $3,449,000,000 as of Canada, Ltd., declared a dividend of 10c. a share against only $596,000,000 last week. There has been on common, payable March 31, this last being the no real addition to the gold stocks and to Treasury first payment on this stock since Dec. 31 1931. The cash in the amounts named, but as the dollar now Atlas Powder Co. declared 50c. a share on common, has a value of only 59.06c. where before it had the payable March 10, this being the first distribution value of a full 100c., there are naturally correspond- on this stock since June 10 1932. The Pennsylvania ingly more of the dollars of smaller gold content. Gas. & Electric Corp. declared 37/ 1 2c. a share on the In the ordinary Federal Reserve return no such $1.50 non-cumul. part. class A stock, payable striking changes appear, inasmuch as the figures March 1; in this case this is the first distribution are on the same basis as a week ago. Between the since Dec. 1 1930. The Columbian Carbon Co. detwo dates the principal features are a reduction in clared an extra dividend of 25c. a share, in addition the volume of Reserve credit outstanding as meas- to the usual quarterly dividend of 50c. a share payured by the bill and security holdings, and an ex- able March 1. The Kroger Grocery & Baking Co. pansion in much the same amount in Federal Re- declared an extra dividend of 50c. a share, in adserve note circulation. The reduction in the amount dition to the usual quarterly dividend of 25c. a of Reserve credit outstanding has come about share on the common stock, both payable March 1. through a further diminution in the borrowing of The Celanese Corp. of America declared a dividend the member banks as indicated in a reduction in the of $4 a share on account of accumulations on the 7% discount holdings of the 12 Reserve institutions from cumul. 1st part. pref. stock, payable March 2, leav$82,732,000 Jan. 31 to $73,327,000 Feb. 7, while at ing the accruals of back dividends on this stock at the same time the holdings of acceptances purchased only $1 a share. The Van Raalte Co., Inc., declared in the open market have fallen from $111,397,000 to a quarterly dividend of $1.75 a share on the 7% $96,899,000. There has also been a small decrease cumul. 1st pref. stock, together with all dividends in in the holdings of United States Government securi- arrears thereon, payable on March 1; the current ties, which this week are reported at $2,431,743,000 quarterly dividend, with the dividends in arrears as against $2,433,970,000 last week. The result alto- now to be paid, aggregate $5.25 a share on the gether is that the total of the bill and security hold- stamped stock and $38.50 a share on the unstamped ings has diminished in the sum of, roughly, $26,- stock. The Socony-Vacuum Corp declared a divi000,000, standing at $2,603,262,000 this week as dend of 15c. a share on its capital stock, payable against $2,629,392,000 last week. March 15; during 1933, distributions were made in On the other hand, Federal Reserve note circula- the following order: 10c. a share on March 15, and tion has increased during the week from $2,926,- 25c. a share on Dec. 15. 243,000 to $2,946,226,000, though this is partly offset by a decrease from $203,057,000 to $201,984,000 USINESS failures in January continue reduced in the amount of Federal Reserve bank notes in cirin number, much as they were during the closing culation. The gold holdings of the 12 Reserve insti- months of 1933. Dun & Bradstreet report 1,364 tutions show no change of consequence, and, as a insolvencies in the United States for the opening matter of fact, there are no gold holdings now. The month of the new year, compared with 2,919 similar new gold certificates which have been substituted defaults in January a year ago and 3,458 in that for the same. stand virtually unchanged, being re- month for 1932. Failures in January are usually at ported at $3,513,171,000 this week and $3,513,884,000 the high point of the year, so far as the number is last week. The amount of the deposits has fallen concerned. That was the case in both preceding during the week from $3,035,035,000 to $2,962,- years. An increase at that time was shown over 541,000, this following from the reduction in Gov- December of approximately 25 or 26%. This year ernment deposits from $241,860,000 to $84,912,000. in January the increase in the number of failures over Member bank reserve deposits, on the other hand, the closing month of 1933 was 20.5%. The decline have increased from $2,651,945,000 to $2,735,701,000, in the number of business defaults during most of the member banks having regained a portion of the 1933 was almost continuous, especially in the last large reduction in such reserves which they lost the six months of that year. Liabilities reported last previous week because of the heavy payments they month were somewhat in excess of those for the last were obliged to make on their heavy subscriptions to four months of 1933, the amount for January being the offering of Treasury notes and certificates of $32,905,428. Some large failures added to the total indebtedness. The falling off in the volume of de- this year. The indebtedness shown, however, was posits required smaller cash reserves against the very much less than that reported for January of same, while the larger volume of note circulation the two preceding years, when the amounts were called for increased cash reserves. The result is respectively, $79,100,602, and $96,860,205. The that the reserve ratio stands at a trifle larger this large failures in both of the years last mentioned were week than last week. In other words, the ratio of more than double those reported for January 1934. total reserves to deposit and Federal Reserve note Separating the figures for the January failures into liabilities combined stands at 63.9% as against the three leading classes, a marked improvement 63.6% last week. The amount of United States Gov- appears for all three. In some respects the division ernment securities held as part collateral for Fed- covering manufacturing concerns makes the best eral Reserve note issues has decreased during the showing. There were in the manufacturing class week from $570,000,000 to $561,100,000. 295 defaults involving $9,265,377 of indebtedness; E B Volume 131 Financial Chronicle 907 day (Feb. 3), having been 564,098 cars as against 486,059 cars in the corresponding period of the preceding year, the ratio of increase being 16.0%. Some of the commodity markets have at the same time established higher levels of prices, this being especially true in the case of cotton, and quite generally the consensus of reports regarding trade is that the volume of business keeps increasing, even if in only a moderate way, and there have been no %adverse developments of any great consequence, except for action at Washington designated to regulate the Exchanges. The general disposition is to think that trade recovery will continue to make steady, even if slow, progress in the immediate future, though more or less concern is felt in financial quarters because of the unrestrained way in which Congress keeps voting appropriations of enormous amounts. The foreign exchanges have not been a disturbing feature to the extent that they were only a very short time ago, though they may not be proceeding in quite the way and to quite the extent desired by the Administration at Washington. As indicating the course of the commodity markets, the May option for wheat at Chicago closed 2c. against 91%c. the close on Fri1 yesterday at 90/ day of last week. May corp at Chicago closed yester8c. the close the previous 8c. as against 521/ day at 511/ closed yesterday at Chicago at oats May activity Friday. the N THE New York Stock Exchange the previous Friclose the 37%c. against as 4c. / continued 363 weeks and buoyancy of previous in full force and strength last Saturday, Monday day. The spot price for cotton here in New York and Tuesday, with the volume of business of large yesterday was 12.55c. as against 11.80c. on Friday proportions, but on Wednesday and again on Fri- of last week. The spot price for rubber yesterday day the market broke badly, with extensive declines, was 10.63c. against 9.82c. the previous Friday. Dothe result entirely of large sales to realize profits. mestic copper was quoted yesterday at Sc. as against On Thursday afternoon the market recovered to Sc. the previous Friday. Silver showed only slight some extent, but on Friday it swung down again. deviation during the week. In London the price Great activity and steadily rising prices was also yesterday was 19 13/16 pence per ounce as against 4 pence on Friday of last week. The New York a feature of the bond market, with large-sized fur- 191/ ther gains, but in the downward reaction in stocks quotation yesterday was 44.70c. as against 43.50c. many bond issues also suffered a downward reaction. the previous week. In the matter of the foreign exThe developments were all of a favorable nature, changes, cable transfers on London yesterday closed the Cabinet crisis in France, which eventuated in at $5.02 against $4.88 the close the previous Friday, riotous demonstrations of a very ominous character while cable transfers on Paris closed yesterday at 2c. the close on Friday of last on Tuesday appeared to have no influence on the 6.44c. against 6.231/ security markets in this country, and have since week. Large numbers of stocks, as also bonds begiven way to normal conditions with the establish- fore the Wednesday break, sold at the highest figment of a new Cabinet regime: The American Iron i:res of either 1933 or 1934. Call loans on the New and Steel Institute on Monday submitted a state- York Stock Exchange again continued unchanged at ment regarding steel production that greatly sur- 1% per annum. passed expectations. It showed that the steel mills Trading was very active but fell off after the break 2% of capac- on Wednesday. On the New York Stock Exchange of the country were now engaged to 371/ ity as against 34.4% the previous week and 32.5% the sales at the half-day session on Saturday last were the week preceding, and establishing another new 2,081,170 shares; on Monday they. were 4,940,250 high record since the Steel Institute started publish- shares; on Tuesday 4,330,980 shares; on Wednesday ing weekly figures on Oct. 23 last. A little later in 4,499,070 shares; on Thursday 3,199,920 shares, and the week the figures regarding the production of on Friday 3,337,240 shares. On the New York Curb electricity appeared, and they also showed a rising Exchange the sales last Saturday were 321,665 shares; rate of growth as compared with a year ago, and an on Monday 744,385 shares; on Tuesday 768,885 increase likewise as compared with two years ago, shares; on Wednesday 656,520 shares; on Thursday this last having now been the case for four suc- 492,980 shares and on Friday 497,760 shares. cessive weeks. The output by the electric light and As compared with Friday of last week, most stocks power industry for the week ended last Saturday show losses because of the break the last half of the % was reported at 1,636,275,000 kilowatt hours as week. General Electric closed yesterday at 223 American the correNorth in hours week; last of % on Friday against 1,454,913,000 kilowatt against 237 /s against 203 4;Standard Gas & Electric at 153 sponding week of 1933 and 1,588,853,000 kilowatt at 223 5s against hours in the same week of 1932. The ratio of in- against 14; Consolidated Gas of N. Y. at 43/ 2; Brooklyn Union Gas at 79 against 75; Pacific / crease over 1933 is 12.5%, which is a larger ratio 441 of increase than in any recent week since Sept. 16 Gas & Electric at 21% against 20; Columbia Gas & %; Electric Power & Light 1933. Car loadings of revenue freight also continued Electric at 17 against 161 % against 732; Public Service of N. J. at 4234 their record of growth in the week ending last Satur- at 83 for trading, 951 failures, for which the liabilities were $18,110,930, and for the third division, mainly agents and brokers, the number was 118, owing a total of $5,529,121. In January 1933 there were 568 manufacturing defaults, for $30,747,022 of indebtedness; 2,182 failures of trading concerns owing $36,920,410, and 169 of the third class involving $11,433,170. All sections of the country report fewer business defaults in January this year than a year ago. In some divisions the reduction is very great.liPerlum the West and South make the best showing. Separated by Federal Reserve districts, eight out of the 12 sections of the United States show a number of business failures in January this year considerably less than one half of those reported in that month of 1933. These Federal Reserve districts include Chicago, St. Louis, Kansas City and Minneapolis. also the Atlanta and Dallas districts. The Philadelphia and Cleveland districts make a similar showiag. In New England the reduction shown for the failure statistics this year was very large, and the same thing was trueias to thelNew York district, the Richmond and San Francisco divisions. For the four sections last mentioned, however, the improvement over a year ago was not so marked as for the eight divisions first mentioned. O 908 Financial Chronicle Feb. 10 1934 against 413/ 2; J. I. Case Threshing Machine at 78% 33 against 343. In the copper group, Anaconda against 813; International Harvester at 43% 5 against Copper closed yesterday at 15% against 17 on Friday 443'; Sears, Roebuck & Co. at 47% against 49; of last week; Kennecott Copper at 203/ 2 against 223's; Montgomery. Ward & Co. at 323 % against 313/ 8; American Smelting & Refining at 473 against 45; Woolworth at 503 % against 51; Western Union Tele- Phelps-Dodge at 17 against 173; Cerro de Pasco graph at 623/ against 61%; Safeway Stores at 53 Copper at 5 and Calumet & Hecla 363 against 35%; against 543; American Tel. & Tel. at 120% against at 55% against 5%. 120; American Can at 1013 against 1003; Commercial Solvents at 313/i against 343.; Shattuck & Co. RICE trends on securities markets in the leading 3 against 10%, and Corn Products at 9% at 76%* European financial centers were generally against 80. favorable this week, notwithstanding the sensational Allied Chemical & Dye closed yesterday at 1503/ developments in France. International currency against 1533 on Friday of last week; Associated Dry uncertaint ies, together with the rioting in the French Goods at 173 against 17; E. I. du Pont de Nemours capital, caused natural hesitation on all markets for at 985 % against 1003; National Cash Register A at a time, but when appeared it that the French crisis 21 against 22; International Nickel at 22% against 23; would be overcome with great speed, trading inTimken Roller Bearing at 38 against 383; Johnscreased and prices advanced. An important factor Manville at 623 against 633/ 2; Coca-Cola at 1053 was the confidence in France that the Doumergue against 1023/ 2; Gillette Safety Razor at 11% against Government will be able to maintain the gold stand115 /s; National Dairy Products at 16 against 165 /s; ard unimpaired, despite the immense flow of gold Texas Gulf Sulphur at 40% against 39 8; Freeportnow taking place across the Atlantic. Financial Texas at 46 against 463; United Gas Improvement circles in London and New York view the French at 183 against 18%; National Biscuit at 43% 3 Continental Can at 79 against 77%; prospects somewhat more pessimistically, but the against 43%; decision to keep paying the metal proved heartening. Eastman Kodak at 873/ against 893/2; Gold Dust The increase in the discount rate of the Bank of Corp. at 203/ against 213/f Standard Brands at 22% France to 3%, Thursday, from its former level of against 243.; Paramount i'publix Corp. ctfs. at 43% was in line with expectations, as the gold against 33/s; Westinghouse Elec. & Mfg. at 423/i drain is causing a little tightening of money in Paris. against 443; Columbian Carbon at 67 against It is evident that all markets will continue to follow 673/ 8; Reynolds Tobacco class B, at 42 against 427 / 8; French developments with the closest attention, for Lorillard at 18 against 19; Liggett & Myers class B, indication s of the international currency trend. The at 92 against 94, and Yellow Truck & Coach at 55% conviction has deepened in Europe that the dollar against 5%; Owens Glass at 92 against 901 / 2; United is undervalued at 59.06% of former parity, and new States Industrial Alcohol at 613 %; adjustments are held inevitable. There were no % against 603 Canada Dry at 263' against 28; National Distillers changes of great significance in trade and industrial at 283 against 30; Crown Cork & Seal at 32 against reports from Europe this week. 353, and Mengel & Co. at 83 against 93. The London Stock Exchange was firm in the The steel shares moved up and down with the initial session of the week, but trading was light. general list. United States Steel closed yesterday British funds were neglected. In the industrial secat 563 against 563 % on Friday of last week; United tion motor stocks were in good demand, while other States Steel pref. at 953 against 95; Bethlehem Steel good features also were present. Most attention was at 453/i against 463/2, and Vanadium at 26 against directed, however, to South African gold mining 263. In the motor group, Auburn Auto closed stocks, which advanced sharply as the gold price yesterday at 52 against 525 % on Friday of last week; in the London auction market moved up on AmerGeneral Motors at 38% against 413'; Chrysler at ican buying. In Tuesday's session British funds 8; Nash Motors at 283 563 against 583/ %; registered small gains, while similar advances were % against 305 Packard Motors at 43/ against 5; Hupp Motors at scored in many indusirial issues. The internatio nal 55% against 65 %, and Hudson Motor Car at 21 section was stimulated by reports of a good trend against 223. In the rubber group, Goodyear Tire at New York. Gold mining shares receded on profit& Rubber closed yesterday at 383' against 383 % on taking. Business Wednesday was sharply restricted Friday of last week; B. F. Goodrich at 163/ 2 against owing to the French crisis. British funds were well 16%, and United States Rubber at 203 against 19. maintained, while most industrial securities likewise The railroad shares were rather weak. Pennsyl- showed gains. International stocks held their 3 against 37% on ground, but foreign bonds were weak. In a vania RR. closed yesterday at 35% further Friday of last week; Atchison Topeka & Santa Fe at quiet session, Thursday, British funds again ad68% against 713; Atlantic Coast Line at 493 % vanced, while most industrial stocks also were firm. 3 Chicago Rock Island & Pacific at 53% Brazilian bonds were active and higher against 49%; on reports of against 53; New York Central at 40% against 413 %; a debt agreement. Anglo-American trading favorBaltimore & Ohio at 323 against 323'; New Haven ites dropped sharply owing to consideration by the at 20% against 223 %; Union Pacific at 128 against United States Government of measures to control 129; Missouri Pacific at 5 against 53; Southern exchanges. The trend was firm yesterday, but dealPacific at 303' against 31%; Missouri-Kansas- ings were small. British issues advanced generally, 5 Texas at 123 % against 133; Southern Ry. at 33% but international stocks were hesitant on the reports against 34%; Chesapeake & Ohio at 443/b against of drastic stock exchange regulations in the United 4532; Northern Pacific at 313 % against 32, and Great States. Northern at 29 against 303/ The Paris Bourse reflected, on Monday, the per2. The oil stocks continued inclined to weakness. turbation felt regarding the political situation and Standard Oil of N. J. closed yesterday at 4734 the fate of the franc. Rentes and other French bonds against 483' on Friday of last week; Standard Oil were sold heavily, and stocks also were unloaded in of Calif. at 403 % against 423.'; Atlantic Refining at volume. Contrasting with the downward trend of P Volume 138 Financial Chronicle domestic issues was a sharp upswing in all foreign .securities. French bank shares were especially affected by the selling, and the funds realized were placed mainly in foreign commodity stocks. In Tuesday's dealings the trend was reversed completely, as more confidence prevailed regarding the political and financial situation. French stocks and bonds were in good demand, while foreign securities were liquidated. The Bourse, on Wednesday morning, was more of a political forum than a financial market, as the events of the night.before found their reflection in exciting scenes as brokers denounced the Daladier Government and marched around singing the Marseillaise. A short period of complete silence was observed in honor of the victims of the shooting at the Place de la Concorde. Prices were weak at first, owing to the tense political atmosphere, but when it was announced soon after the noon hour that M. Daladier had resigned, buying was resumed and prices recovered swiftly. Rentes closed with large net gains, and most other securities also were up for the day. The upward movement of prices was continued in an active session, Thursday. Rentes and French bank stocks were in greatest demand,as it was generally believed the political crisis had ended. Gains were sensational in many domestic issues, but foreign securities were a bit weaker. Profit-taking developed in French issues yesterday, and recessions were general in this group. International stocks were in better demand. The Berlin Boerse was firm and fairly active in the first session of the week. Leading speculative favorites were up a point or two, and many bonds also showed gains, but the bulk of issues remained close to former levels. The Boerse was unsettled, Tuesday, by the omission of an expected dividend on Engelhardt brewery shares. Sharp declines were registered in all brewery issues, and other shares were affected to a more moderate degree. Trading was on an extremely small scale, Wednesday, with the trend irregular. The events in Paris were disquieting, as they increased the fears of further international currency troubles, and there was a general tendency to await the outcome of the developments before increasing commitments. Most securities were slightly lower. Thursday's .session on the Boerse was again quiet, with the trend uneven. Moderate selling of stocks sufficed to lower quotations, but the losses were small. After a weak opening yesterday, prices improved and small net gains were general at the close. HE wrath and resentment of the French people over their accumulating troubles found expression this week in a series of riotous disturbances, directed chiefly against the Daladier Cabinet and the PaHiament. The riots were the most serious experienced in France in many years. They were especially tumultuous in Paris, where soldiers and police fired on the demonstrators, killing a score of people and injuring hundreds. Bowing to the obvious will of the people, Premier Edouard Daladier presented his own resignation and those of all his Ministers to President Albert Lebrun, Wednesday. M. Lebrun promptly took steps for the formation of a national coalition regime, and he called former President Gaston Doumergue out of retirement to head this regime and select the political T 909 leaders whose aid might be considered necessary in carrying out the grave tasks that must be performed. Apparently-content with this change, and a promise by Premier Doumergue that he would form a Government of "elder statesmen," the people of Paris and other leading cities promptly ceased their demonstrations. It is plain, however, that these incidents foreshadow profoundly important alterations of French internal policy, and it is quite possible that French policy with regard to other countries also will be changed. The restless dissatisfaction of the Wench people has been apparent for some time, and it is not without significance that Cabinets have fallen in rapid succession in recent months. Camille Chautemps found it necessary to resign on Jan. 28 because of developments in connection with the Stavisky scandal. Edouard Daladier assumed office on the following day, and he was chosen only after the President attempted to place M. Doumergue in the office of President of the Council of Ministers. At that time M. Doumergue declined the office, and the ordinary political expedients again were employed, despite ominous portents. M. Daladier put off his Ministerial Declaration before the Parliament until Tuesday of this week, but even before that day it was plain that trouble was brewing. The Premier dismissed Jean Chiappe, the Prefect of the Paris police, who was allegedly involved in the Stavisky scandal. Minister of Finance Francois Pietri, and Minister of War Jean Fabry presented their resignations last Saturday. M. Chiappe long has exercised great influence in French politics, and he has many powerful friends. Pandemonium broke loose when Premier Daladier went before the Chamber, Tuesday,to make his statement of policy and request a vote of confidence. Within the Chamber, the Premier obtained ample support, as he was given three successive votes of confidence. Some 350 Deputies stood by him, while 220 voted adversely. But in the streets outside, mad crowds surged toward the Parliament buildings from half a dozen directions, and apparently with as many diverse aims. Some of the throngs were good-natured at first, but the temper of all changed quickly to sullen and desperate resentment when orders were given the police and the mounted Republican Guards to fire. Volleys of revolver shots rang out, and many of the bullets directed against the huge crowd in the Place de la Concorde found their marks. The police and soldiers charged and cleared the square, but they encountered great difficulties as the crowd became increasingly unmanageable. Paving blocks were torn from the streets and' from behind barriers erected with the stones, missiles were flung at the charging police. The Ministry of Marine building, not far from the Chamber of Deputies, was set afire, and the blaze was extinguished only with the greatest trouble, as the hose lines of the fire department were cut by the rioters. Automobiles were set afire wherever the crowd encountered them near the Parliament buildings. In many other parts of Paris similar scenes were being enacted on a much milder scale, while in a score of other French cities huge demonstrations were taking place at the same time. Numerous groups were involved in these manifestations, and their motives and aims were doubtless equally multifarious. French war veterans formed one of the most important groups. A column of 910 Financial Chronicle 3,000 veterans formed at a distance from the Parliament buildings and marched calmly toward the Chamber. They were intercepted by the police and soldiers, who finally fired upon them. Nothing daunted, these veterans formed again and again and tried to reach the Chamber. Groups of French students also formed important elements in the surging crowds, while Socialists, Communists, Royalists and Fascists all took a hand in the proceedings. The cry of the mob was "To the Chamber!" The shouts penetrated to the Deputies and caused intense nervGusness among them. When the sound of firing was heard the Deputy Scapini, who was blinded in the war, rose from his bench and in tense silence he asked Premier Daladier if he had given orders to fire. The Premier sat silent, and after a moment tumult broke loose in the Chamber itself, and the session had to be suspended. Regarding the difficulties of the French people which thus dramatically came to a head there are, of course, many explanations, and the various observers tend to emphasize different aspects. The Stavisky scandal unquestionably added to the disaffection, but France has experienced many greater and most costly scandals without such manifestations. Lack of a balanced budget and the fears of inflation contributed something, while general discontent with the Government long has been apparent. Fuel was added to the flames by the recent reduction in the pay of civil servants, who make up a vast army in France. Important groups have for some time maintained that the foreign policy was ineffectual, and was tending to involve the country in war. Behind and beneath all such factors is the grumbling and discontent occasioned by the omnipresent depression, which is now being felt in France more than in almost any other country. With the situation as it developed on Tuesday, Premier Daladier was unable to cope. He issued a long statement in defense of the police and the guards who fired on the demonstrators, and declared that the shooting was necessary because a real armed attack on the security of the State was in progress. "Certain political groups multiplied their incitement to riot and attempted a violent attack on the Republican regime," the Premier said. He conferred on Wednesday morning with numerous political leaders, and was urged to continue his efforts by some, but the majority indicated that resignation was the only course owing to the bloodshed. There is reason to think,indeed, that the rioting would have widened into general revolt if the Premier had not resigned, as the war veterans threatened to march toward the Government buildings once again, but with weapons in their hands, while other groups also indicated an intention of redoubled violence. Soon after noon, on Wednesday, M. Daladier presented the resignations of the Cabinet, and President Lebrun immediately called for M. Doumergue to take the helm. There was sporadic fighting in the streets of the capital Wednesday night, as the people were not yet fully reassured, but the demonstrations were much milder than on the previous day, and complete order was restored in the small hours of Thursday. M. Doumergue, who makes his home in the south of France, reached Paris later that day, and promptly began consultations with a view to forming a concentration Cabinet. "The urgency of the hour," he declared,"does not permit me to form any sort of Ministry other than one of political truce, Feb. 10 1934 composed of eminent men well versed in statecraft." Rioting ceased entirely on Thursday, and only occasional troubles with looters were reported. Premier Doumergue completed his Cabinet yesterday, and his selections give assurance that he will have ample support in the Chamber of Deputies. In contrast with the practice of recent years, the Premier assumed no portfolio himself, and he will thus remain simply the President of the Council. His Ministers are drawn from almost all important factions in the. Chamber and Senate, and it is estimated that 480 Deputies, out of the 605 in the Chamber, will support the regime. A number of former Premiers will assist M. Doumergue, and this also will add stability to the Government. The important post of Foreign Affairs was assigned to Louis Barthou, while the Finance Ministry will be guided by Germain Martin. Paul Jacquier is named Budget Minister; Marshal Petain is Minister of War, while the Navy and Air posts are filled by Francois Pietri and General Denain. Former Premiers Edouard Herriot and Andre Tardieu are Ministers of State without portfolio. Henri Cheron as Minister of Justice, Albert Sarraut as Minister of the Interior and Pierre Laval as Minister of Colonies are other prominent selections. HANCELLOR ENGELBERT DOLLFUSS is meeting continually greater difficulties in his efforts to maintain his minority regime in Austria and prevent the advent of a Nazi State that would be highly sympathetic to the Nazi regime in Germany. The problem of Austrian independence is, indeed, one of the most troublesome that has faced the European chancellories in many years. Germany disclaims any intention of infringing the sovereignty of its small Teutonic neighbor, but the yazi authorities in Berlin obviously are delighted at the spread of Nazi sentiment, which promises to bring Austria firmly within the German orbit without raising the questions that formal "Anschluss," or political union, would bring. Great Britain, France and Italy, if they acted in concert, might be able to stop the substantial unification of the two Teutonic countries, but they are obviously indisposed to take a definite diplomatic stand in opposition to what appears to be a majority of the Austrians themselves. The perplexities of the problem are not diminished, moreover, by the realization that Nazi influence, if it overwhelms Austria, probably will spread much farther in Eastern Europe and introduce new factors in a European situation that, in all conscience, •is already sufficiently complex. Austria protested to Germany on Jan. 17 against interference in its affairs by Nazis in Germany, and a demand was made at the time by Chancellor Dollfuss for a German guarantee of Austrian independence. Chancellor Adolf Hitler scorned the Austrian claims in his address before the 'German Reichstag on Jan. 30, and in a formal.reply to Vienna late last week the same attitude was taken. Austrian contentions were refuted point by point, an official German announcement of Feb. 2 said. "The German Government," it was stated,"has most meticulously abstained from mixing in domestic political conditions in Austria, and has repeatedly declared that any forcible intervention or any violation of treaty obligations was far from its thought. It can, therefore, only express great astonishment at the fact that on repeated occasions the Austrian C Volume 138 Financial Chronicle Government has cast suspicions on the German Government as if it threatened Austrian independence." The reply also emphasized the view of the German Government that the problem does not admit of international treatment and cannot be solved in that manner. The Austrian Cabinet considered the German reply in a meeting late last week, and is said to have "rejected" it as unsatisfactory. In a further meeting last Monday the Cabinet empowered Chancellor Dollfues to carry the matter to the League of Nations by making an appeal for a special League Council meeting. Before making any such appeal, however, Chancellor Dollfuss decided to visit Budapest in an endeavor to enlist the aid of the Hungarian Government in his struggle against the spread of Nazi doctrines and influence. The conflict within Austria, meanwhile, has been sharply intensified. Prince Ernst von Starhemberg, leader of the powerful Austrian Heimwehr, clearly is playing a game of his own in an attempt to wrest power from Dollfues and establish a regime that would be Fascist in its leanings but adverse to Germany. This has introduced further dissension in the Austrian Tyrol, where the Austrian Nazis are making a determined effort to obtain control, and the situation is highly uncertain. There is some reason to believe that the Austrian appeal to the League has been delayed in response to suggestions by one or more of the great Powers. London reports of last Monday stated that any such appeal would be highly embarrassing to the British Government while disarmament negotiations are in progress. The British are in no mood to take risks in order to save the DoHines Government, a dispatch to the New York "Times" said. The matter was debated in the London House of Commons, Tuesday, and Captain Anthony Eden, Lord Privy Seal, remarked that the British attitude "will be actuated by the principle that, while it is no part of our business to interfere in the internal affairs of another country, Austria has a right which we fully recognize to demand that there be no interference in her internal affairs by any other Government." In a Vienna dispatch of Monday to the New York "Times" it is pointed out that nobody seems to know just what the League of Nations could do, other than to warn the German Government, which has already expressed its contempt of the League. "Italy is cool toward Chancellor Dollfuss since it became evident that his ability to convert Austria into an absolutely Fascist State had become dubious," the dispatch added. "France is occupied solely with her own internal difficulties. Great Britain's attention is centered upon getting something out of the disarmament conference, which she does not desire to complicate with an Austrian problem." D ISARMAIIENT negotiations in Europe were suspended this week, owing to the crisis in France, but some additional light was thrown on recent developments by debates on the subject in the British House of Commons. Sir John Simon, the British Foreign Secretary, admitted, on being questioned, that the British policy is one of compromise between the German desire to re-arm and the French attitude. France, it was again made plain, wishes neither to disarm herself nor to permit Germany to re-arm. In this debate, which developed Tuesday, Sir John Simon stated that Germany's 911 right to armaments equality could not be questioned. Sir Austen Chamberlain seized upon this declaration and obtained from the Foreign Secretary an admission that naval equality was not meant, as this is an "entirely separate subject for entirely separate negotiations." The latest British proposals, the Foreign Secretary pointed out, would permit some re-armament by Germany, but it would keep the German armaments within limits while calling for a measure of disarmament by other Powers. Nothing that was really new was said on the subject, a London dispatch to the New York "Times" remarked. "There is nothing new except, of course, disarmament, which neither the statesmen of this country nor those of any other country seem seriously to contemplate," the dispatch added. In a further debate on Wednesday there seemed to be general agreement in the House of Commons that the threat of war must be faced in Europe, a further report to the New York "Times" said. The problem of naval armaments was debated in the Diet in Tokio, late last week, and Navy Minister Osumi admitted that Japan would ask for a better naval ratio at the next international conference on this matter. LTHOUGH Foreign Minister Koki Hirota proclaimed in a speech before the Tokio Diet, on Jan. 23, that Japan has naught but peaceable intentions, there has since been an increase rather than a decrease in the world-wide discussion of possible Japanese encroachments on the Russian Maritime Provinces in Siberia, and a consequent Russo-Japanese war. In London it is taken almost for granted that there will soon be a conflict between the two countries, and reports indicate that the question most frequently discussed is whether the war will start this coming spring or in 1935. Washington observers are represented as viewing the matter in a very gloomy light. In Japan there has been a diminution of the provocative magazine articles by prominent militarists dealing with imaginative future wars with Russia or the United States. But the press of that country continues to reflect a determination to build an ever larger army, and to obtain a higher naval ratio in coming conferences. Russian authorities continue to talk with the most amazing frankness of eipected aggression by Japan and of the preparations that are being made to meet any attacks. Foreign Commissar Maxim Litvinoff, the astute diplomatist of the Moscow regime, has concluded treaties of non-aggression with almost all the neighboring countries of Russia, but his efforts to arrange a similar pact with Japan remain fruitless. He achieved a further diplomatic victory on Tuesday, however, when announcement was made of the resumption of normal diplomatic relations between Hungary and Russia. This action was unexpected, as Hungary heretofore has observed a highly anti-Communist attitude. Russian statements on a possible future conflict are of unusual importance, owing to their official nature. Joseph Stalin, Secretary-General of the Russian Communist party and the real ruler of the country, told the All-Union Communist Party Congress in Moscow, on Jan. 27, that every precaution must be taken against sudden attacks in the Far East. "The refusal of Japan to sign a non-aggression pact reveals that in the relations of the two countries all is not well," M. Stalin declared. He commented on the open advocacy by some Japanese A 912 Financial Chronicle militarists of war with Russia, but added that Russia will continue to follow a policy of peace and will attempt to improve its relations with Tokio. In a speech before the same 'Congress, made available last Saturday, War Commissar Klementi Voroshiloff declared that Russia is well prepared for attacks from any quarter. He disclosed for the first time the existence of fortified areas in the Northwest, the West and the Far East, but added that recent successes of Soviet diplomacy have lessened the danger of conflict in the West. He spoke at length of the situation in the Far East, however, remarking that Japan was the first nation to seek to issue from the depression by the aid of war. "Japan has become," M. Voroshiloff added, "the greatest purchaser of war materials and of war industrial supplies in the world market, and is simultaneously carrying on the political preparation of the country for a more serious war than she waged in China. That is clear to the non-militarist eye." Alluding to the frequent Japanese discussions of a war of conquest in Siberia, he remarked that Russia could hardly continue to regard Japan with as much confidence as before. "Our measures of self-defense seem to be an affront to the Japanese," the Commissar for War said. "Doubtless it would be preferable to our neighbors if we left our frontiers in the same defenseless state as the Chinese Manchurian frontier in 1931. But that favor, in all .politeness, we grant to no one." XTENSIVE negotiations in Rio de Janeiro on the debt service of Brazilian bonds floated in the United States were terminated Tuesday, when an agreement was signed by President Getulio Vargas providing for a classification of Brazilian loans into eight groups, on which varying amounts will be paid. The negotiations were conducted by Valentim Boucas for the Brazilian authorities, and by J. Reuben Clark in behalf of the American holders of Brazilian bonds. Mr. Clark is a director of the Foreign Bondholders' Protective Council, which was formed here late last year. He accompanied Secretary of State Hull on his trip to Montevideo for the sessions of the Pan-American Conference, and remained in Brazil to conduct negotiations for the Council. The agreement on debt service was announced by the Brazilian Finance Minister, Osvaldo Aranha, who indicated that Brazilian payments thereunder would be reduced very substantially during the next four years from the contractual figures. sHe expressed the view, a dispatch to the New York "Times" said, that the agreement would permit a financial rehabilitation which would enable Brazil to resume normal debt service on its expiration. The first of the eight groups, it was indicated, includes the funded loans of the Brazilian Federal Government, on which full interest and amortization charges are to be met. Coffee valorization loans comprise the second group, on which full interest will be paid, but only 5% on amortization. In the third group there are six Federal loans, including those to be funded after this year, on which interest payments are to be graduated from 35% to 50% of the sums due. The fourth group includes several Federal loans and one of the Brazilian Lloyd, with 2% to 40% of sums interest payments to be made 71/ due. The Sao Paulo Coffee Institute loans in group 2% to 371/ 2% of the amounts five will draw from 221/ E Feb. 10 1934 due. Group six embraces loans of the States of Sao Paulo, Minas Geraes and Rio Grande du Sul, and one municipal loan, on which 20% of interest will be paid this year, 221/ 2% next year, and 35% in each of the two succeeding years. In group seven there are 27 municipal loans on which interest payments will be 171/ 2% this year, 221/ 2% next year, and 321/ 2% in the two following years. For the eighth group, which includes 28 loans of the Northern Brazilian States, no terms of interest payments have been arranged. Raymond B. Stevens, President of the Foreign Bondholders' Protective 'Council, issued a statement in New York, Wednesday, which fails to elaborate or explain the agreement reached by Mr. Clark in Rio de Janeiro. Mr. Stevens expressed satisfaction regarding the new terms, and declared that the agreement is an important step toward a resumption of the normal flow of credit and toward trade recovery. The principal amount of the foreign currency obligations of the Brazilian Government and its subdivisions is in excess of $1,000,000,000, of which $380,000,000 have been placed in the United States, it was observed. About $180,000,000 of the loans floated here have been in default during the last two years. "Compared with the plan proposed last November," Mr. Stevens explained, "the allocation of exchange to grade 7 has been almost doubled. The plan is a temporary arrangement covering four years, after which it is to be reviewed in the hope that further steps toward resumption of service can then be taken." PEACEFUL settlement of a century-old boundary dispute between Peru and Ecuador is foreshadowed in an appeal by both countries for the aid of President Roosevelt in settling the question. The area in dispute is a vast territory around the headwaters of the Amazon River, lying between the Morona, Maranon, Napo and Pilcomayo Rivers. Previous attempts to arbitrate the matter were unsuccessful, and in 1924 the Castro-Ponce treaty was drawn up, providing for direct negotiations under the auspices of the President of the United States. The two countries concerned failed to act under this agreement until last month, when reports indicated that permission to send negotiating commissions to Washington was being sought. President Roosevelt confirmed this intelligence on Tuesday, and he indicated at the same time that the requests had been granted. In an official statement, the President pointed out that the treaty provided for direct negotiations to fix a boundary. If such attempts are unsuccessful, the negotiators are required to determine the precise area not in dispute, while the remaining zone is to be submitted to the arbitral decision of the President of the United States. In announcing that delegations are to be sent to Washington by Peru and Ecuador, Mr. Roosevelt expressed keen satisfaction regarding their "convincing and encouraging evidence of a determination to settle their long-standing boundary controversy through friendly discussion and in accordance with the most enlightened principles of international practice." It would be a cause of the greatest rejoicing, the President added, significantly, if the armed conflict between Bolivia and Paraguay over the boundaries in the Gran Chaco area would likewise yield to peaceful methods of adjustment. Financial Chronicle Volume 138 HE Bank of France on Thursday (Feb. 8) raised its discount rate from 2% to 3%. The 23/2% rate having been in effect since Oct. 9 1931, when England went off the gold standard, the rate then having been raised from 2%. Present rates at the leading centers are shown in the table which follows: T DISCOUNT RATES OF FOREIGN CENTRAL BANKS. Country. Ra.e In Effect Date Feb.9 Established. Austria Belgium__. Bulgaria... Chile Colombia__ Czechosiowain__ Danzig__ Denmark_. England... Estonia__ Finland ___ France_ - - Germany__ Greece Holland _ _ _ 5 334 7 4% 4 3% 4 214 2 514 414 3% 4 7 214 Preoious Rate. Mar. 23 1933 Jan. 13 1932 Jan. 3 1934 Aug. 23 1932 July 18 1933 6 2% 8 534 5 Jan. 25 1933 July 12 1932 Nov. 29 1933 June 30 1932 Inn. 29 1932 Dec. 20 1933 Feb. 8 1934 ...lent. 30 1932 Oct. 13 1933 Sent. DI 1033 434 5 3 2% 634 5 234 5 734 3 Country. Rate In Effect Date Feb.9 Established. Precloud Rats. Hungary___ 414 Oct. 17 1932 5 India 3% Feb 18 1933 4 Ireland 3 June 311 1932 3% 3 Dec. 11 1933 3% Italy 3.65 luly 3 1933 4.38 Japan Java 434 Aug. 16 1933 5 Lithuania 6 Ian. 2 1934 7 . Norway... 3% May 23 1933 4 Oct. 25 1933 8 Poland.- - - 5 Portugal... 534 Dec. 8 1933 6 Apr. 7 1933 6 Rumania.. 6 South Africa 4 Feb. 21 1933 7 8 Oct. 22 1932 534 Spain Sweden..._ 2% Dec. 1 1933 3 Switzerland 2 Jan. 22 1931 % 913 81,058,709,500 francs. Circulation a year ago aggregated 84,561,690,325 francs and the year before 84,438,199,480 francs. Bills bought abroad rose 1,000,000 francs and advances against securities 123,000,000 francs. The proportion of gold on hand to sight liabilities stands this week at 79.10%, and compares with 77.82% a year ago. Below we furnish a comparison of the various items for three years: BANK OF FRANCE'S COMPARATIVE STATEMENT. Changes for Weelc. Feb. 2 1934. Feb. 3 1933. Feb.5 1932. Francs. Francs. Francs. Francs. -194,534,608 76,860,453,361 81,893,916,973 72,563,082,971 12,771,494 2,930,764,772 8,176.369,079 -3,000,000 Gold holdings Credit hats. abroad. aFrench commercial bills discounted _ _ -349,000,000 4,138,415,466 2.561,581,620 5,123,708,663 +1,000,000 1,115,354,868 1,494,876,104 9,073,285,483 b Bills bought abr'd Adv. against securs. +123.000,000 3.017,619,779 2,623,779,351 2.824,812,850 Note circulation.... +1,585,000,000 81,058,709,500 84,561,690,325 84,438,199,480 Cred. curr. accts... -1,999,000,000 16.107,191,327 20,670,257,379 26,770,369,780 Proportion of gold on hand to sight 70.10% 77.82% 65.25% II abilities +0.13% a Includes bills purchased in France. b Includes bills discounted abroad. In London open market discounts for short bills on Friday were 15-16@1%, as against 1% on Friday of last week and 1@1 1-16% for three months' bills, as against 1% on Friday of last week. Money on call in London yesterday was 4 31%. At Paris the open market rate remains at 234% and in Switzerland at 1IA%. HE Bank of England statement for the week ended Feb. 7 shows a loss of £8,826 in gold holdings, which, together with an expansion of £1,523,000 in note circulation caused a decrease of £1,532,000 in reserves. The Bank now holds £191,787,025 of gold as compared with £127,934,341 a year ago. Public deposits fell off t7,882,000 and other deposits £823,302. The latter consists of bankers' accounts, which rose £846,948, and other accounts, which dropped off £1,670,250. The reserve ratio increased from 52.05% a week ago to 53.98%; a year ago it was only 30.99%. Loans on Government securities fell off £7,517,000 and those on other securities rose £368,471. The latter consists of discounts and advances and securities, which increased £239,118 and £129,353 respectively. No change was made in the discount rate. Below we give the figures with comparisons of previous years: T BANK OF ENGLAND'S COMPARATIVE STATEMENT. 1934. Feb. 7. 1933. Feb. 8. 1932. Feb. 10. 1931. Feb. 11. 1930. Feb. 12. £ £ .£ £ E Circulation a 368,184,000 357,380,130 346,519,212 347,245,425 348,003.176 Public deposits 17,272,000 13,501,583 16,435,197 13,502,637 17,937,246 Other deposits 137,577,251 133,466,227 99,725,131 91,615,357 94,565,390 Bankers'accounts_ 101,440,533 100,699,345 66,997,662 57,655,497 59,083.652 Other accounts 38,138,718 32,766,882 32,727.469 33,959,860 35,481,738 Government secur_. 69,540,869 90,308,315 34,625,908 36,419.952 44,711,563 Other securities 19,864,877 29,271,405 49,918,049 32,830,014 22,476,568 DIsct.& advances. 8,417,442 12,146,508 13.007,628 9,597,092 7,963,260 Securities 11,447,435 17,124,897 36,910,421 23,232,922 14,513,308 Reserve notes & coin 83,612,000 45,554,211 49,774,736 54,001,734 63,496,043 Coln and bullion 191,787,025 127,934,341 121,293,948 141,247.159 151,499,219 Proportion of reserve to liabilities 42.84% 51.37% 56.43% 30.99% 53.98% Bank rate 301. 207. ft% 414 07. 207a On Nov.29 1928 the fiduciary currency was amalgamated with Bank of England note issues, adding at that time £234,199,000 to the amount of Bank of England notes outstanding • HE weekly statement of the Bank of France dated Feb. 2 reveals a decline in gold holdings of 194,534,608 francs. The total of gold is now 76,860,453,361 francs in comparison with 81,893,916,973 francs last year and 72,563,082,971 francs the previous year. Credit balances abroad, French commercial bills discounted and creditor current accounts record decreases of 3,000,000 francs, 349,000,000 francs and 1,999,000,000 francs respectively. Notes in circulation show a constraction of 1,585,000,000 francs, reducing the total of notes outstanding to T HE Bank of Germany in its statement for the first quarter of February shows a loss in gold and bullion of 21,697,000 marks, The total of gold which is now 354,483,000 marks compares with 822,288,000 marks last year and 928,341,000 marks the previous year. An increase appears in reserve in foreign currency of 2,257,000 marks, in silver and other coin of 18,381,000 marks, in notes on other German banks of 4,064,000 marks, in investments of 12,460,000 marks,in other daily maturing obligations of 30,469,000 marks and in other liabilities of 19,347,000 marks. Notes in circulation reveal a decline of 126,252,000 marks reducing the total of the item to 3,322,000 marks. The total of circulation a year ago was 3,242,218,000 marks and two years ago 4,276,132,000 marks. Bills of exchange and checks, advances and other assets register decreases of 63,015,000 marks, 9,234,000 marks and 19,652,000 marks respectively. The proportion of gold and foreign currency to note circulation is now 10.9% as against 28.4% a year ago. A comparison of the various items for three years appears below: T REICHSBANK'S COMPARATIVE STAIIEMENT. Changes for Week. Feb. 7 1934. Feb. 7 1933. Feb. 6 1932. AssetsReichsmarks. Reichsmarks. Reichsmarks. Retchsmarks. Gold and bullion -21,697,000 354,483,000 822,288,000 928,341,000 Of which depos. abroad 30.633,000 38,116,000 55,456,000 No change. Reserve in foreign curr +2,257,000 9,154,000 97.907,000 146,750,000 Bills of each.and checks -63,015,000 2,829,595,000 2.410.837,0003,483.816.000 Silver and other coin _ _. +18,381,000 268,715.000 260,163,000 140,474,000 Notes on other Ger.bks. 8.353.000 6,030,000 7,792,000 +4,064,000 Advances -9,234,000 71,588,000 79,396,000 129,038,000 Investments +12,460,000 632,008,000 400,810,000 160,564,000 Other assets -19,652.000 569,616,000 815,499,000 971,184,000 LiabilitiesNotesin circulation__ _. -126,252,000 3,322.160,000 3,242,218,000 4,276,132.000 Other daily matur.oblig +30,469.000 528,097,000 315,557,000 332,941,000 Other liabilities +19,347,000 259,552,000 770,052,000 869,893,000 Propor.of gold dr foreign curr, to note circul'n. -0.2% 10.9% 28.4% 25.1% D EALINGS in the New York money market have been quiet this week, and rates for all classes of accommodation have remained unchanged from previous levels. Call loans on the New York Stock Exchange were 1% for all transactions, whether renewals or new loans, but in the street market small concessions were quoted every day from the official rate. The street rate on call loans was %% Monday, 4 3 % Tuesday, Wednesday and Thursday, and 4% 7 yesterday. No changes were recorded in time loans. Brokers loans increased $8,000,000 in the week to Wednesday night, according to the report of the New York Federal Reserve Bank. Gold shipments in heavy volume began to reach this market from Europe this week, and the credit base was thus 914 Financial Chronicle Feb. 10 1934 DISCOUNT RATES OF FEDERAL RESERVE BANKS. widened additionally. The United States Treasury Rate in awarded, on Monday, two issues of discount bills, Previous Federal Reserve Bank. Effect on Date Rate. Feb. 9. Established. maturing respectively in 91 and 182 days. The 214 Boston .. 1934 2 Feb. 8 $125,000,000 of 91-day bills were awarded at an aver- New York 134 2 Feb. 2 1934 Philadelphia 3 Nov. 18 1933 234 age discount of 0.66%, while $50,000,000 of 182-day Cleveland Feb. 3 1934 234 Richmond 3 Feb. 9 1934 334 bills were awarded at an average discount of 0.94%. Atlanta 334 3 Nov. 14 1931 Chicago 234 3 Oct. 21 1933 In line with the reductions announced last week in St. 234 Louts Feb. 8 1934 3 Minneapolis Sept. 12 1930 4 354 New York and Cleveland the rediscount rates of the 3 Kansas MY Feb. 9 1934 334 Dallas 3 Feb. 8 1934 334 8 Federal Reserve banks, rates were cut this week by San Francisco 234 Nov. 3 1933 five additional regional banks, the reduction in every TERLING exchange and the entire foreign excase being %. Rates established are: Boston,2%; change market continues thoroughly demoralSt. Louis, 23/2%; Dallas, Richmond and Kansas ized. The market has not yet recovered from the City, 3%. effects of the President's proclamation devaluing the EALING in detail with call loan rates on the dollar to 59.06 cents, the establishment of a $2,000,Stock Exchange from day to day, 1% re- 000,000 stabilization fund, and the appropriation of mained the ruling quotation all through the week the gold in the Federal Reserve Banks. The disfor both new loans and renewals. The market for turbances in Paris also have contributed to the time money has shown no change this week, the confusion, making it impossible for foreign exchange only business reported being a few renewals of 60 operators to take a technical position in trading. The and 90 days. Rates are nominal at %@1% for range for sterling this week has been between $4.903/ 60 days, 1@13% for 90 days, 13i@13/2% for four and $5.0334 for bankers' sight bills, compared with months and 13/2®1%% for five and six months. The a range of between $4.87 and $5.03Y4. last week. The demand for commercial paper has been excellent this range for cable transfers has been between $4.90M week, but the supply of paper is again short. Rates and $5.033/2, compared with a range of between .873 / 3 and $5.033/ a week ago. The reduction in are 13.1% for extra choice names running from four the Federal Reserve Bank's rate of rediscount from to six months and PA% for names less known. 2% to 13/2%, which became effective on Friday of HE market for prime bankers' acceptances has last week, has been without effect on foreign exchange been spotty this week with only a fair supply quotations. The market has had spurts of activity, of paper. Rates are unchanged. Quotations of the but while the undertone of sterling is firmer than last American Acceptance Council for bills up to and week, the activity has been confined largely to the including 90 days are 5A% bid and M% asked; for United States dollar. While there is every evidence four months, %% bid and 5A% asked; for five and that the London market continues to be favored by asked. The bill buying foreign funds, there has been a considerable demand 7 six months, 1% bid and 4% rate of the New York Reserve Bank is M% for bills for dollars from many parts of Europe,chiefly through running from 1 to 90 days, and proportionately higher the London market. This is due largely to bear undoubted flow of for longer maturities. The Federal Reserve banks' covering, but there is also an from London to New York. funds American fugitive holdings of acceptances decreased during the week Switzerdollars in France, demand for also a There is from $111,397,000 to $96,899,000. Their holdings is being money the fact that to due land Holland and of acceptances for foreign correspondents show a nationals for investment in other by side sent to this trifling increase from $4,477,000 to $4,478,000. market. Sterling exchange security York New the are acceptances as follows: Open market rates for continues to display an easier tone in terms of French SPOT DELIVERY. francs, or gold. This is due, it would seem, largely —180 Days— —150 Days— —120 Days— Asked. Bid. Asked. Bid. Bid. Asked. to the fact that there is a strong demand in London 1 1 A 34 Prime eligible bilLs Si A as well as on the Continent for francs, with which to —90 Days— —80 Days— —30 Days— Bid. Asked. Bid. Asked. Bid. Asked,. purchase gold at the Bank of France in order to take A 34 A Si 34 A Prime ellgible bills of the high premium for the metal offered advantage FOR DELIVERY WITHIN THIRTY DAYS. open market and by the United States London in the 1% bid Eligible member banks 1% bid Eligible non-member banks Treasury. The United States price for gold continues at $35 per fine ounce, but the mad scramble for gold LTOGETHER seven of the Federal Reserve so evident in London last week seems to have abated banks have lowered their rediscount rates, considerably. While the dollar continues at the new six of the Reserve banks having taken this action value of 59.06 cents, nevertheless, despite the heavy following that of the New York Reserve Bank, which purchases of gold for American account, both London reduced its rate, effective Feb. 2 from 2% to 13/2%; and Paris set a higher figure, the rate fluctuating these are the Cleveland Reserve Bank which has daily considerably from hour to hour during trading. lowered its rate from 23/2% to 2%, effective Feb. 3; In London on a percentage of the new parity the the Boston Reserve Bank, which changed its rate dollar-sterling rate and price for gold in London infrom 2% to 2%, effective Feb. 8; the St. Louis dicated a value for the dollar this week ranging at Reserve Bank, which on Feb. 8 put into effect a rate from 134.% to 33/g% above the parity fixed by the of 23/2%, instead of 3%, as heretofore; the Dallas United States of 59.06 cents. All other European Reserve Bank lowered its rate, effective Feb. 8 from markets show similar higher interpretations of the SM% to 3%, and the Richmond and Kansas City dollar value, with wide hourly fluctuations in the rate. Reserve Banks, both made effective on Feb. 9 a The dollar-franc rate has shown the dollar to be 3% rate in place of that heretofore in force, viz.: estimated in Paris at from 4 1-16% to more than 33/2%. The following is the schedule of rates now in 71 4% above the new parity. Several times during -effect for the various classes of paper at the different the week the dollar was quoted in Paris fractionally in excess of 63 cents. Reserve banks: S • D T A Volume 138 Financial Chronicle The following tables give the mean London check rate on Paris from day to day, the London open market gold price and the price paid on gold by the United States: MEAN LONDON CHECK RATE ON PARIS. Wednesday Feb. 7 Saturday Feb. 3 77.80 78.47 Thursday Feb.8 Monday Feb. 5 79.09 Friday Feb.9 Tuesday Feb. 6 LONDON OPEN MARKET GOLD PRICE. Saturday Feb. 3 138s. 3d. I Wednesday Feb. 7 Thursday Feb.8 Monday Feb. 5_ 140s. Tuesday Feb. 6 139s. 3d. Friday Feb. 9 79.00 78.03 77.81 136s. 6d. 136s. 9d. 137s. 4d. PRICE PAID FOR GOLD BY THE UNITED STATES (FEDERAL RESERVE BANK). 35.00 Saturday Feb. 3 Wednesday Feb. 7 35.00 Monday Feb. 5 Thursday Feb. 8 35.00 35.00 Feb.9 35.00 Tuesday Feb.6 Friday 35.00 The market is full of rumors of probable stabilization agreements as between the dollar, pound and franc, and the recent disturbing developments in Paris lend hope that such currency agreements may be effected at no distant date. However, nothing is vouchsafed from official quarters, either here or abroad, and it seems highly improbable that stabilization can be accomplished for some time. There can be no doubt that London and Paris are watching the heavy American gold purchases with anxiety and it would seem probable that measures will be adopted by the British and French authorities to bring these gold purchases within reasonable limits less disturbing to the general foreign exchange and European money market situation. While money has undoubtedly been leaving London for New York, markets everywhere show great confidence in London as the chief financial center of the world, so that funds are in great abundance there. Money rates are extremely easy in Lombard Street, though they have firmed up fractionally this week, greatly to the encouragement of the discount market. Call money against bills is in demand at 7A% to 4 3 %, whereas only a few weeks ago this accommodation could be had at 4 3 % to N%. Bill rates are at 31-32% to I% for twomonths; at 1 1-16% for three and four months, and at 1 1-16% to IN% for six months. Gold continues to flow to London from many parts of the world, attracted by the high premium for the metal. At present many of the shipments from the Far East, while landed in London, are destined for New York from the time they leave Bombay, Calcutta and Shanghai. Most of the gold taken from the open market is for American account, according to well-informed London sources, though this fact is frequently disguised in the phrase "taken for unknown destination." On Saturday last £960,000 of bar gold was available and taken for an "unknown destination." There was no premium on French francs, as the market price was fixed in accordance with supply and demand. On Monday £1,540,000 was similarly taken, the 'bulk believed to be for shipment to the United States and the London market reported that arrangements had been made for shipments of gold to the United States as far ahead as March 15. There was no premium. The gold was disposed of on the basis of supply and demand at the record high quotation of 140s. per fine ounce. On Tuesday there was apparently no gold disposed of in the open market, but the quoted price had dropped to 139s. 3d. On Wednesday £1,234,000 bar gold available in the open market was taken for the United States and the price moved down to 136s. 6d. On Thursday £1,460,000 disposed of is believed to havelbeen taken for shipment 915 to the United States. On Friday there was £1,100,000 available, the bulk of which is believed to have been taken for shipment to the United States. Gold bars were quoted at 137s. 4d. The Bank of England statement for the week ended Feb. 7 shows a decrease in gold holdings of £8,826, the total standing at £191,787,025, which compares with £127,934,341 a year ago and with the minimum of £150,000,000 recommended by the Cunliffe Committee. The Bank's proportion of reserves to liabilities is at a most satisfactory figure, standing on Feb. 8 at 53.98%, compared with 52.05% on Jan. 31 and with 30.99% a year ago. At the Port of New York the gold movement for the week ended Feb. 7, as reported by the Federal Reserve Bank of New York, consisted of imports of $1,200,000 from Mexico. There were no gold expOrts. The Reserve Bank reported a decrease of $5,117,000 in gold earmarked for foreign account. In addition to this the Reserve Bank reported a further decrease of $39,589,000 in gold held under earmark for foreign account. In tabular form the gold movement at the Port of New York for the week ended Feb. 7, as reported by the Federal Reserve Bank of New York, was as follows: GOLD MOVEMENT AT NEW YORK, FEB. 1-FEB. 7, INCLUSIVE Exports. Imports. I None. 81,200,000 from Mexico. Net Change in Gold Earmarked for Foreign Account. Decrease 85,117,000. A footnote to the Reserve Bank's weekly statement read: "In addition to the above transactions, gold held under earmark for foreign account was reduced $39,589,000." The above figures are for the week ended Wednesday evening. On Thursday there were no imports or exports of the metal,or change in gold held earmarked for foreign account. A foot note to the usual report however, said: "Imports of gold previously acquired and included in the monetary gold stock of the United States, $5,259,600 from France on Feb. 5, $5,301,300 from France on Feb. 8. On Friday $15,376,900 of gold was received, $6,858,600 from England, $4,872,600 from Canada, $2,520,300 from Mexico and $1,125,400 from France. There were no exports, but gold held under earmark for foreign account decreased $1,351,100. A note to the statement said that "$22,153,900 of gold was released from earmark .for foreign account in New York against gold delivered abroad which was previously acquired and included in the monetary gold stock of the United States." It might be added that the value of all these transactions are figured at $35 per fine ounce instead of $20.67. Canadian exchange continues. at a discount in terms of old dollar parity. On Saturday last Montreal funds were at a discount of 7A%,on Monday at from 4 3 % to 7A%,on Tuesday at 4 3 %,on Wednesday at N% to 78%, on Thursday at from 4% to N%,and on Friday at N% discount. Referring to day to day rates, sterling exchange on Saturday last was up strongly from Friday's break. 2; cable transfers Bankers' sight was .903'@$4.943/ $4.90%@$4.95. On Monday sterling was steady. The range was .933'@$4.944 for bankers' sight and $4.934® .95 for cable transfers. On Tuesday the pound firmed up. Bankers' sight was $4.9532@ $4.973.; cable transfers $4.96@$4.973. On Wednesday sterling registered further advances. The range was $4.983'@$5.033 for bankers' sight and 916 Financial Chronicle $4.98/@$5.033/ for cable transfers. On Thursday sterling was steady. Bankers' sight was $5.0032® $5.013'; cable transfers $5.003'©$5.023j. On Friday sterling was steady, the range was $5.003/ 2@.$5.02 for bankers' sight and $5.013/ 2@$5.023/ for cable transfers. Closing quotations on Friday were $5.013 % for demand and $5.02 for cable transfers. Commercial sight bills finished at $5.003 %; 60-day bills at $5.003 %; 90-day bills at $5.00%; documents for payment (60 days) at $5.003 % and seven-day grain bills at $5.01 8. Cotton and grain for payment closed at $5.003 %. XCHANGE on the Continental countries is easier in terms of new dollar parity. The following table illustrates this condition. E France (franc) Belgium (belga) Italy (lira) Germany (mark) Switzerland (franc) Holland (guilder) Old Dollar Parity. 3.92 13.90 5.26 23.82 19.30 40.20 New Dollar Parity. 6.63 23.54 8.91 40.33 32.67 68.06 Range This Week. 6.18k to 6.46 21.98 to 22.80 8.29 to 8.58 37.32 to 38.65 30.50 to 31.75 63.20 to 65.95 French francs are, of course, of paramount interest this week because of the political disturbances and the increase in the discount rate of the Bank of France which was announced on Thursday. All important announcements and comments relating to the French riots and the political situation will be found in our news and editorial columns. The Bank of France rate was raised from 23/2% to 3%. The 23/2% rate had been in effect since Oct. 10 1931, when the rate was lifted from 2% following Great Britain's suspension of gold. It is noteworthy that the Bank of France announced the advance in its rate immediately upon what appears to be the establishment of a firmer government and ease in political tension. It was given out in Paris that the reason for advancing the rate was the desire to keep pace with the money market, which has been showing a tendency to greater hardness in the past several weeks. The firming up of money rates in Paris is due to a considerable degree to the continuous loss of gold by the Bank of France. Overnight money is 23/2% to 23 4%. Private discount rate is 23/2% to 3% and loans against National defense bonds command 33/2% to 3%%. It is denied in Paris that the gold withdrawals have had any part in advancing the rate. At the time it is intimated that further hardening of money rates is expected, which will be followed by further marking up of the central bank rate. It is not to be doubted, however, that the gold withdrawals have had an important influence in the change in the discount rate, and if they continue the rate will undoubtedly again be marked up regardless of open market money rates. The French are prepared to lose a considerable amount of gold, but these withdrawals can be made more orderly if the bank advances its discount rate to an extent which will in no wise injure the domestic needs for rediscounting. It seems more than ever probable that France may be compelled, if not to abandon the gold standard, at least to place an embargo on shipments of the metal intended for American account and not based upon strictly industrial and commercial requirements. Gold has been sent from Paris to London by airplane almost every day during the past two weeks, the greater part of which is intended, according to reliable reports, for reshipment to the United States. No reliable estimates are at present available as Feb. 10 1934 to the amount of gold being received here from London. Up to Saturday last approximately $23,000,000 of French gold was on the way to New York by way of London, all of which was consigned to New York banks. The operations of the American exchange stabilization fund are kept secret. The Bank of France statement for the week ended Feb.2showed a loss in gold holdings of 194,534,608 francs (about $12,800,000). These withdrawals do not represent the full amount which was withdrawn for shipment both to London and New York, as just indicated. The next weekly statement will cover the period up to Friday, Feb. 9. Despite the current losses in gold, the Bank's reserves show an improvement, standing at 79.10% compared with 78.97% a week earlier. The improvement in the ratio is due to a decline in the Bank's sight liabilities. The Bank of France has lost approximately 5,000,000,000 francs in gold in the last year. Total gold holdings now stand at 76,860,453,361 francs, which compares with 81,893,916,973 francs a year ago. The Bank's legal reserve requirement is 35%. German marks are easier in terms of the new dollar. Mark exchange is largely nominal owing to the strict control exercised by the Reichsbank. A recent special dispatch from Berlin to the "Wall Street Journal" relating to the dollar and the mark stated: "The recent dollar stabilization is not likely to exert a direct or immediate influence upon the German monetary policy or to modify the exchange regulations, but the question of protecting German exports against competition from countries with depreciated currencies remains open, since the blocked mark and scrip defense are inadequate and temporary. Some bankers believe that Germany will ultimately be forced either to devalue or to adopt a system of subsidizing exports, for instance, through special duty imports as practiced by Czechoslovakia." Important items relating to the German standstill agreement and to the registration of the German "scrip" will be found in the news columns. The London check rate on Paris closed on Friday at 77.81, against 77.65 on Friday of last week. In New York sight bills on the French center finished on Friday at 6.43, against 6.23 on Friday of last week; cable transfers at 6.44, against 6.233, and commercial sight bills at 6.40, against 6.22. Antwerp belgas finished at 22.69 for bankers' sight bills and at 22.70 for cable transfers, against 22.44 and 22.45. Final quotations for Berlin marks were 38.63 for bankers' sight bills and 38.64 for cable transfers, in comparison with 37.74 and. 37.75. Italian lire closed at 8.563/ for bankers' sight bills and at 8.57 for cable transfers, against 8.293/ and 8.30. Austrian schillings closed at 18.60, against 18.25; exchange on Czechoslovakia at 4.85, against 4.71; on Bucharest at 0.99, against 0.963 4; on Poland at 18.46, against 17.95, and on Finland at 2.22, against 2.17. Greek exchange closed at 0.923/ 2 for bankers' sight bills and at 0.93 for cable transfers, against 0.893/i and 0.90. XCHANGE on the countries neutral during the war is easier in terms of the new dollar. Holland guilders are also easier in terms of francs owing largely to the heavy demand in Europe for francs with which to buy gold at the Bank of France for transshipment to London and New York. Dollars are also in demand in Amsterdam as some Dutch funds are moving to New York for investment in the securities markets. The Bank of the Netherlands shows a E Volume 138 Financial Chronicle loss of 30,000,000 guilders of gold during the past week which follows upon a loss of approximately 300,000,000 a week earlier. Most of this gold was shipped to Paris and offsets in a measure the drain upon the holdings of the Bank of France. The Swiss franc is also ruling easier in terms of the new dollar and of the French franc and gold has been moving from Switzerland to France. The Scandinavian units, of course, move in sympathy with sterling to which these currencies are attached. Bankers' sight on Amsterdam finished on Friday at 65.74, against 63.74 on Friday of last week; cable transfers at 65.75, against 63.75, and commercial sight bills at 65.65, against 63.65. Swiss francs closed at 31.64 for checks and at 31.65 for cable transfers, against 30.59 and 30.60. Copenhagen checks finished at 22.41 and cable transfers at 22.42, against 21.79 and 21.80. Checks on Sweden closed at 25.89 and cable transfers at 25.90, against 25.19 and 25.20; while checks on Norway finished at 25.29 and cable transfers at 25.30, against 24.51 and 24.52. Spanish pesetas closed at 13.26 for bankers' sight bills and at 13.27 for cable transfers, against 12.85 and 12.86. 917 FOREIGN EXCHANGE RATES CERTIFIED BY FEDERAL RESERVE BANKS TO TREASURY UNDER TARIFF ACT OF 1922. FEB. 3 1934 TO FEB. 9 1934, INCLUSIVE. Country and Moneta Unit. Noon Buying Rate for Cable Transfers fn New York. Value fn Untied States Money. Feb. 3. Feb. 5. Feb.6. Feb. 7. Feb. 8. EUROPE$ $ $ $ $ .181125 .179000 .182500 .182333 .183125 Austria,sch 111In .223638 .220430 .224061 .224084 .227500 Belgium, belga Bulgaria. 1es, 4%013833 4%013533 *.013150 '4.012800 ' 4.013175 Czechoslovakia, kron .047425 .046775 .047637 .047590 .048306 Denmark. krone .220200 .220200 .221916 .223400 .224020 England, pound sterling '4 929750 4.932000 4.968833 4.996916 5.011500 Finland. markka._ _ _ .022060 .021900 .022133 .022300 .022183 .063098 .061927 .063281 .063185 .064251 France, franc Germany, reichsmark .380345 .375009 .380842 .380081 .385375 Greece, drachma .009066 .008945 .009020 .009090 .009212 Holland, guilder .644400 .632545 .646400 .645400 .656283 Hungary. pengo •.284666 '4.279650 4%285333 4%285833 4%288500 .084000 .083046 .084289 .084261 .085593 Italy, lira .247550 .247675 .249455 .251341 .251972 Norway, krone Polann. zloty 180500 .179180 .182200 .182400 .184240 .045260 .045410 .045412 .046212 .046329 Portugal, escudo Rumania, feu .009720 .009600 .009683 .009750 .009883 Spain, peseta 129814 .127823 .130215 .130285 .132292 Sweden, krona .254340 .254233 .256100 .257711 .258441 Switzerland, franc_ .310275 .305200 .311271 .310950 .315407 Yugoslavia, dinar.- .021800 .021780 .022200 .022200 .022450 ASIAChinaChefoo (yuan) dol' .332500 .334166 .335416 .336666 .337083 Hankow(yuan)dor .332500 .334166 .335416 .336666 .337083 Shanghal(yuan)dor .332500 .333593 .335156 .336406 .336406 Tientsin(yttan)dol. .332500 .334166 .335416 .336666 .337083 Hongkong. dollar .370937 .371250 .370312 .374062 .373437 India. rupee .370950 .371425 .373400 .375050 .376100 Japan. yen .292656 .293437 .294200 .295687 .296400 Singapore (8.S.) dol'r. .574375 .576250 .580000 .583750 .583125 A USTR A LASIAAustralia. pound 3.919166 3.926875 3.956666 3.980833 3.990833 New Zealand, pound. 3.929583 3.937291 3.966666 3.990833 4.001041 AFRICASant') Africa, pound 4.873750 4.874375 4.909375 4.939375 4.954062 NORTH AMER.Canada, dollar 989114 .990781 .991062 .991510 .991145 Cuba, peso .999550 .999550 .999550 .999550 .999550 Mexico, peso (silver). .277320 .277160 .277160 .277260 .277260 Newfoundland, dollar .987000 .988375 .989062 .989125 .988625 SOUTH AMER.Argentina. peso 4.331100 4%333166 '4.334066 4%328150 4%329100 ' Brazil, milreis 4%084837 4%083620 *.983560 4%084100 4%084281 Chile. peso '4.094000 '4.094350 4%094500 '4.095000 4%094900 ".767500 4%756666 ' Uruguay. peso 1%769166 4%772666 4%782000 enInmht. ....., •anatnn '.692100 4%667300 4%687300 4%684900 Feb. 9. $ .184500 .227830 .013000• .048437 .224081 5.017000 .022240 .064481 .386828 .009195 .658261 .289500* .086026 .252136 .185440 .046312 .009950 .132742 .258477 .316366 .022500 .339166 .339166 .338906 .339166 .375000 .376850 .296562 .585625 3.995416 4.095833 4.959062 .991197 .999550 XCHANGE on the South American countries .277860 .988593 presents no new features of interest. As is .334500" well known more freedom has been allowed to the .0842624 .095100' open, or "bootleg", market during the past several .7853334 .684900, weeks by the exchange controls of both Buenos Aires * Nominal rates; lirm rates not available. and Rio de Janeiro. The official Argentine rate continues around 33 for the paper peso but the "unoffiHE following table indicates the amount of gold cial" rate in New York fluctuated this week between bullion in the principal European banks as of 25.45 and 25.75. An important item relating to Feb. 8 1934, together with comparisons as of the the new Brazilian debt service agreement, signed by corresponding dates in the previous four years: President Vargas on Tuesday, will be found in our Banks of1931. 1934. 1933. 1932. 1930. news columns. £ I L £ £ Argentine paper pesos closed on Friday nominally England... 191.787,025 127,934,341 121,293,948 141,247,159 151,463,219 Frzume a _ __ 614,883,627 655,151,335 580,504,663 445,056,591 343,448,325 at 3332 for bankers'sight bills, against 323 Germanyb_ 39,208,600 42,223,450 101,822,800 108,807,650 4on Friday Spain 16,192,500 89,932,000 96.604,000 102,695,000 90,462,000 90,349,000 of last week; cable transfers at 333 60,854,000 57.297,000 56,133,000 76,666,000 63,095,000 4, against 33. Italy Netherlands 36,341,000 86,045,000 72.728,000 36,628,000 76,603,000 Brazilian milreis are nominally quoted 8.36 for bank- Nat.Beig'm 78,433,000 74,427,000 72,408,000 39,321,000 33.618.000 Switzerland 61,998,000 25,748,000 22,396,000 88,965,000 67,518,000 11,436,000 13,365,000 13.569,000 14,545,000 11,439,000 ers' sight bills and 83/2 for cable transfers, against Sweden__ Denmark 8,160,000 9,552,000 7,398,000 7,397,000 9,574,000 8.30 and 83 /. Chilean exchange is nominally Norway_ _ _ 6,574,000 8,015,000 6,559,000 8,134,000 8,146,000 Total week 1,241,062,152 1,252,026,276 1,128,097,061 974,488,550 886,474,194 quoted at 10, against 93. Peru is nominal at 24.873/ 2, Prey. week 1 942 A97 024 1 2.52 A95 /28 1.120.749.670 973.515.224 885.201.259 a These are the gold ho dings of the Bank of France as reported in the new form against 23.02. of E T statement. b Gold holdings of the Bank of Germany are exclusive of gold held abroad, the amount of which the present year is £1,531,650. XCHANGE on the Far Eastern countries followed the course of recent weeks. The Chinese units are fractionally firmer and steady, moving consistently with the silver market. The Indian rupee, of course, fluctuates with sterling to which it is attached at the fixed rate of one shilling and six pence per rupee. Japanese yen fluctuate rather widely and are firmer in tone. On Friday of last week the yen closed at 29 and has fluctuated this week between 29.01 and 29.85. The Japanese control, it would seem, endeavors to hold the yen close to the phases of sterling. Closing quotation for yen checks yesterday were 29.85, against 29 on Friday of last week. Hong Kong closed at 37 8 @ 38 1-16, against 37 9-16 ® 373 4; Shanghai at 3431 © 34 5-16, against 33 8@, 333i; Manila at 50, against 49 8; Singapore at 59, against 5732; Bombay at 37%, against 36%, and Calcutta at 37 8, against 36 8. E PURSUANT to the requirements of Section 522 of the Tariff Act of 1922, the Federal Reserve Bank is now certifying daily to the Secretary of the Treasury the buying rate for cable transfers in the different countries of the world. We give below a record for the week just passed: The Outlook for Republicanism in France. It is the expected rather than the unexpected that has been happening in France during the past week. The Daladier Ministry,as had been predicted,did not long survive its first meeting with the Chamber of Deputies on Tuesday, and on Wednesday it resigned. The resignation came, however under extraordinary conditions. Three successive votes of confidence, each showing a substantial majority, had been given in response to Premier Daladier's indication of his program,and as far as technical procedure went the new Ministry had been approved. Within the Chamber, on the other hand, the proceedings were a pandemonium, while outside a riotous mob was battling police and mounted guards in a determined but unsuccessful attempt to reach the building in which the Deputies were meeting, and Paris was given over to mob terrorism such as it had not seen for many a day. In the melee a few persons were killed and several hundred injured, an especially long list of casualties being recorded for the police and mounted troops. In the face of the popular anger which the killing and wounding of citizens had aroused, it was made clear to Premier 918 Financial Chronicle Daladier that his Government, which had shown itself unable to control the situation, had already been repudiated notwithstanding the votes of confidence, and after some hesitation the resignation of the short-lived Ministry was handed to President Lebrun and the search for another Premier began. The affair presents features so alien to American political experience as to make it difficult to understand either the causes or the course of the outbreak or the determining reasons for the Ministry's resignation. Paris dispatches are agreed that the action of the police and troops in firing on the mob stirred a popular resentment which promised still more serious violence, and special emphasis has been placed upon the fact that some of the victims were World War veterans. The spectacle, it is said, was presented of men who had served their country in war being shot down in the streets by defenders of a Government which had been repudiated. The foreign editor of the Paris newspaper "Le Soir," in a special cable to the New York •"Times" on Wednesday, referred to the events as "not without a certain moral beauty," and pictured "columns of demonstrators without weapons of any kind defying death to overcome a hated regime," and "those thousands of honest and brave citizens, believers in law and order, who were induced to assail the police to bring back a clean and stable rule in the Republic." It is difficult to see any "moral beauty" in the acts of a mob which, egged on by young royalists and Communists who have long openly denounced the Republic, and reinforced by hoodlums and looters, tore up pavements to build barricades, hurled stones and iron tree railings at the police, cut the saddle girths of horses and pulled mounted guards from their seats, set fire to the Ministry of Marine, overturned and burned automobiles, busses and newspaper kiosks, and raided about the boulevards and squares in complete and vindictive lawlessness. It seems a curious sentimentality, rather than patriotic sentiment, which can applaud the participation of exsoldiers in such lawlessness, or denounce the police for firing upon a mob so heterogeneous that its various elements could by no possibility be distinguished. The causes of the outbreak, and of the political situation in which it is set, are to be found in part in the history of France, in part in some incidents of the moment, and in part in the attitude of political parties and their leaders. France has a tradition of mob violence as a method of protesting grievances and forcing changes in ministries or their policies. The Paris mob has been well described as an institution, and against its outbreaks, stirred up by agitators and supported by the criminal and lawless classes, every Government has had constantly to be on guard. The weakness of the Chautemps and Daladier Governments appeared in their inability to cope with violence, once it had broken out, until the lawlessness had become extremely dangerous. In the present instance, however, the mob appears to have been peculiarly variegated. Joining in the lawlessness were Communists, members of a small but aggressive political party bent upon overthrowing the existing capitalist and political order, and royalists, another small but militant group with a well-developed organization whose younger supporters, the Camelots du Roi, rival the hoodlums in their lawlessness, and with a daily newspaper, the "Action Francaise," whose editors, Charles Maurras and Leon Daudet, are among the most brilliant as Feb. 10 1934 well as bitter journalists in France. To these factions were added the war veterans, openly dissatisfied with the Government and incensed at threatened reductions of their pensions, trade unionists stirred to revolt by the depression in industry and the growing unemployment, organized civil servants in rebellion against salary cuts, and spectators ready to take a hand in the excitement. There is no evidence of common purpose or recognized leadership in this motley aggregation of the revolutionary and dissatisfied elements, but for violence of an extreme kind they were obviously ready. Neither the wide spread of dissatisfaction, however, nor the revolutionary efforts of Communists and royalists are sufficient to account completely for such a display of violence as Paris has witnessed or for the similar though less serious manifestations that have occurred elsewhere in France. There is no evidence that France desires to embrace Communism, and the royalist movement, although noisy and aggressive, is numerically weak. The proclamation which the Duke of Guise, the chief of the two pretenders to the throne, issued on Thursday through the royalist organ at Paris, declaring that the recent bloodshed is "where sixty years of the Republic, of party government, has taken you by rapid strides," and announcing that "this is the hour for you to rally to the monarchical principles on which France's greatness was built during centuries, and which alone can assure peace, order and justice and a continuity of policy in its acts," is not likely to win any considerable number of converts to monarchy. The Stavisky scandal, too, the outstanding provocation of the moment, is hardly the kind of rock on which the Republic is likely to founder. The basic difficulty of France is with its parties and their leaders. Ever since 1924 France has been governed in the Chamber of Deputies by a working union of Left parties, commonly referred to as the Cartel des Gauches, made up principally of Radicals, Radical Socialists and Socialists, and supported, more or less consistently, by members of a number of small groups with Leftist tendencies. The union, however, has been a peculiar one. The Socialists, led by Leon Blum, a lawyer of ability and a politician with some statesmanlike qualities, have refused to take office in any of the numerous Ministries on the ground that they could not consistently share in a Government which they could not control, but they have nevertheless given their support, unofficially but effectively, to Governments of Radical Socialists and various Left combinations. The Radical Socialists, the party to which M. Daladier and former Premier Herriot belong, while they have been strong enough to serve as the core of a Ministry, do not possess a majority in the 'Chamber of Deputies and have been dependent upon Socialist support as well as upon the support of other Left parties. The result has been an unstable political equilibrium, with each Ministry sensitive to differences of opinion among its followers and compelled to trim its course in order to remain in power. As neither Radical Socialists, Radicals nor Socialists have shown any marked increase of strength in the country, what was virtually a party impasse seemed destined to continue indefinitely. Partly as a result of this situation, and as a natural consequence of opportunity and ambition, the loosely-knit parties of the Right have lost no Volume 138 Financial Chronicle chance to embarrass whatever Left Government has been in power. The most conspicuous leader of the Right has been Andre Tardieu, a former Premier who was long the right-hand man of Clemenceau and a persistent seeker of office and popular applause. At bottom an opportunist in politics, M. Tardieu has lately attacked the existing parliamentary and party system as outgrown, and has advocated. changes which have been widely interpreted as suggesting some kind of dictatorship. Thanks to the attacks of the Right and the precarious position and shifting policies of the Left, there has been of late an unmistakable swing away from radicalism of every kind and toward a conservative regime. The radicals have denounced the movement as reactionary and endeavored to connect it with fascism or dictatorship, but the Fascist element is difficult to discern. Itis rather the natural revolt against the control of policy by a union of parties which are themselves in no really fundamental agreement, and a demand for a Government which will put the interests of the country above those of the parties which for the time being'support it. The foreign editor of "Le Soir" put the matter accurately when he wrote, in the dispatch to the New York "Times," from which we have quoted, that "on the other side of the barricade" which the rioters had thrown up was "a Parliament taken up entirely with its own affairs." It is this widespread demand for a Government of really national character which explains, in large part, the enthusiasm with which former President Doumergue has been hailed as a prospective Premier. M. Doumergue has the qualities of ability, integrity, good nature and firmness that endear a political leader to the French people. No one doubts that his Government, if it receives the support which he has stipulated and which has been informally promised by various party leaders, will deal fearlessly with the Stavisky incident and institute the budgetary and other reforms which the country needs. The new 'Ministry, whose composition was announced yesterday, comprises several former Premiers and represents all important parties in the Chamber except the Socialists, who persist in holding aloof. It would be idle to minimize the difficulties of the task. M.Doumergue is conservative and the majority of the Deputies distinctly radical. With the possible exception of Leon Blum, there is not a party leader of whom it could with confidence be said that he can keep his followers in line in the face of a strong conservative program. For the moment, however, the leaders, at least, appear to have recognized the futility of the kind of politics from which France has been suffering, and to have agreed to unite in support of a firm and constructive policy. If this attitude corresponds to that of the party rank and file in the Chamber and to political opinion in the country, the country may hope that disorder and disaffection will be allayed and the pressing problems of national welfare seriously attacked. Business7and Finance Coming Out of the TrenchesPurviving Unusual Ordeal. Business and finance are beginning to come out of the trenches. They have long been the target of shrapnel, of bombs dropped from the air and have even been made apprehensive of mine explosions. There is one qualification the American business 919 man and banker have never lacked and that is fortitude and they are showing it now. Among industries steel has long been regarded as a leader and to-day it is found in the vanguard of the Army of recovery. One reason for this is that the steel industry is one of the best organized; it has long been well captained, and is ever ready quickly to take advantage of any indications pointing towards general improvement. Steel also is an industry which is close to other large enterprises which are great consumers of its products and for this reason its managers are well able to discern any signs of encouragement. Therefore when the public is informed that reports to the American Iron and Steel Institute indicate that steel production has appreciated to the 2% of capacity, reaching the highest / extent of 371 rate since weekly tabulations began on Oct. 23 last, there is strong support to the belief that business generally is not only improving but the change for the better bids fair to be well sustained. The rate indicated;37/ 1 2%,is 12.3% above the low mark established last November. With the improvement in steel production already noted there was first a general increase in railroad car loadings, always a good sign, and that is now followed by reports of increasing earnings by the carriers. As a consequence of reviving traffic the railroad managers are seeing their way clear to make improvements long delayed and to place orders for new equipment which also had been deferred. In turn a demand for materials which will further stimulate industry will arise and that also will stimulate the movement of freight. Once in motion revival becomes an endless chain constantly revolving, the movement of each link pulling for general benefit. Industry and traffic are two foundation stones upon which better times are built owing to the immense multitude of employees favorably affected. They cover a wide scope, beneficially affecting each State, whether it be a producer of raw materials, a manufacturer of finished products or a consumer of parts required for construction. Prosperity is contageous, affecting the mental attitude and it thus begets and spreads increasingly better times. When the ball•is started rolling it gathers momentum and breadth. The spirit of the American people is like that of a restrained steed champing at the bits, and anxious to be in the race. Strengthening 'also the favorable change in public sentiment is the resumption of dividend payments by numerous corporations which had temporarily suspended disbursements, the declaration of extra dividends or the restoration of dividend rates which had been lowered during the trying ordeal of the past few years. It may be well also to observe that defaults in the payment of interest upon bonds issued by large corporations have been comparatively few and by preserving solvency the costly process of reorganizations has been largely avoided much to the advantage of both stockholders and owners of bonds. Without customary aid of the banks business would be handicapped as credit is the life of trade. It is much to the honor of the larger banking institutions, especially in the Bast, that during the prolonged and drastic depression they were able and manifested a disposition to take care of their customers and by remarkable ability and good judgment 920 Financial Chronicle were instrumental in lessening the unfavorable effects of the trying period. Gradually the banks have been strengthening their position so that they will be able to function as usual when reviving business shall present requirements for additional credit. Considering the severity of the ordeal presented during the past few years industry, merchandising and banking are now in remarkably good condition to help along recovery if they receive encouragement from Federal and State authorities. Less of theory and more of practical common sense are needed by those in public authority throughout the country to hasten the return of prosperity and assure its continuance, once it has been well reestablished. The Course of the Bond Market. Feb. 10 1934 Stee1l'43s,v1981, for example, gaining 2% to 94. Nationa Steel 5s, 1956, remained around their high, up X to 97X. There was strength in the rubber group with Goodyear Tire & Rubber 5s, 1957, up 13 to 943.. U. S. Rubber 5s, 1947, were unchanged at 793' and Goodrich 63s, 1947, unchanged at par. Oils displayed a firm trend, registering fractional gains or losses mainly. Set-backs from earlier advances were seen here and there, Childs 5s, 1943, dropping to 553 from 58. Cuban Sugars were strong on the President's sugar message to Congress. Francisco Sugar 7%s, 1942 gained 8 points to 40 and Eastern Cuba Sugar 73s, 1937, were up 2X to 19X. The foreign bond market was rather irregular this week. Most South American and European issues gave evidence of weakness, particularly Argentine, Chile, Brazilian and a number of German issues. Australians moved up fractionally, while Danish and Norwegian bonds held their ground fairly well. Polish 7s were practically unchanged, but both the 6s and the 8s declined substantially. There was little change in Japanese bond quotations. Gold currency bonds moved mostly up. The following is the list of bonds included in bond yield averages classified according to current ratings by Moody's Investors' Service: Bonds followed stocks in a moderate decline on Wednesday. Thursday saw some recovery in price, while on Friday price RAILROADS. changes were mixed. This hesitancy may be due to the fact A Aaa that Congress is now working on the long-awaited bill to Atch. Top. & Santa Fe gen. 48, 1995 Atlantic Coast Line 4s, 1952 Central RR. of New Jersey 5s, 1987 Ches.spealce & Ohio 430, 1992 regulate the stock exchanges of the country, and may reflect Chicago Union Station 430, 1963 Central Pacific 45, 1949 Cincinnati Union Terminal 5s, 2020 Chic. Milwaukee & St. Paul 4s, 1989 uncertainty in the minds of traders as to the nature of re- New Chicago & North Western 5s, 1987 York Central 330, 1997 New York Connec. RR. 430, 1953 Erie prior lien 4s. 1996 strictions which it is certain Congress will impose. Bond Norfolk & Western 48, 1996 Great Northern 41s. 1961 Oregon-Wash. RR. & Nay. 45, 1961 Louisville & Nashville 430, 2003 prices remain at high levels, approximately where they were Pennsylvania Pennsylvania 58, 1964 430. 1960 Reading A 430. 1997 in the Spring of 1931, according to Moody's averages for Union Pacific 48, 2008 Baa Aa 120 bonds. B. & 0.-S. W. Div. 5s, 1950 Baltimore & Ohio 45, 1948 Boston & Maine 58. 1967 Chesapeake & Ohio 430. 1995 On Saturday and Monday, U. S. Government bonds sold Chic.'Burlington & Quincy 45, 1956 Chic. Rock Island & Pacific 45, 1988 Cleve. Cin. Chi. & St. L. 430, 1977 Chicago & West Ind. 48, 1952 at new high levels since Jan. 1, and have receded only slightly Delaware Erie general 45. 1996 & Hudson 48, 1943 Missouri Kansas-Texas 58, 1962 Kansas City Southern 35, 1950 since Monday. The Federal Governmen's new issues total- New York Central L. S. 330, 1998 N. Y. N. H. & Hartford 68, 1948 Pac. San Fran. Term., 48, 1950 New York Ont. & Western 45, 1992 • ing $1,000,000,000 were taken very generally by the banks So. Southern Pacific 45, 1955 Union Pacific 45, 1968 • Western Maryland 4s, 1952 Virginian Ry. 55, 1962 of the country. Weekly reporting member banks showed an PUBLIC UTILITIES. increase of $541,000,000 in holdings of Government securiA Ana Appalachian El. Power 5s, 1956 & El. 45, 1968 Cincinnati Gas ties for the week ended Jan. 31 and a large increase in loans Consumers Power 430, 1958 Georgia Power 5s, 1967 Con. Gas, E. L. & P., Balt. 4s, 1981 Houston Lt. & Pwr. 430. 1981 on securities. At the same time reserves were of course Duquesne Indianapolis Pwr. & Lt. 55. 1957 Light 430, 1957 Jersey Central Pwr. 430. 1961 Kansas City P. & L. 430, 1961 reduced. New York City member banks reduced their New England Tel. & Tel. 430, 1961 Louisiana Pwr. & Lt. 58. 1957 N. Y. Gas, El. Lt. & Pwr. 45, 1949 Ohio Edison 55, 1960 excess reserves to $33,000,000 as of Jan. 31, but there was Philadelphia Peoples Gas, Lt. & Coke 45, 1981 Electric 4s, 1971 Public Service El. & Gas 48. 1971 Potomac Edison 430, 1961 an increase to $40,000,000 on Feb. 7. Short-term interest West Penn Power 4s, 1961 Texas Power & Light 58. 1956 rates have eased somewhat, averaging slightly over 1% for Baa As Carolina Pwr. & Lt. 5s. 1956 American Tel. & Tel. 5s. 1965 all kinds of such rates in New York City. Consolidated Gas of N.Y.4s,1951 Central Ill. Public Serv. 430. 1981 Delaware Elec. Pwr. 530, 1959 Louisville Gas & Electric 55, 1952 High grade railroad bonds held firm or advanced, some Niagara Florida Power & Light 5s. 1954 Lockpt. & Ont. 5s. 1955 Northern States Power 430, 1961 Gulf States Utilities 5s, 1956 issues to levels higher than the highest recorded since 1931. Ohio Power 41,s, 1956 Illinois Power & Light 5s, 1956 Iowa-Nebrasks Lt.& Pwr. B 5s. 1961 Pacific Gas & Electric 430, 1957 Among the latter were Atchison, Topeka & Santa Fe gen. Penn. New Orleans Pub. Serv. 58. 1955 1968 430, Water & Pwr. Penn Central Lt. & Pwr. 58, 1979 Rochester Gas & Elec. 55. 1962 4s, 1995 which advanced from 97X to 98% and Norfolk & So. West. United Gas & Elec. 530. 1955 Calif. Edison 58, 1951 INDUSTRIALS. Western 4s, 1996 which advanced from 100% to 102% for A Asa the week. Baltimore & Ohio 4s, 1948 gained over a point, American Radiator Amer. Smelt. & Ref. 58. 1947 430,1947 Cudahy Packing 58, 1946 Steel 68, 1998 from 93X to 943. Union Pacific 4s, 1947 lost about one Bethlehem Gulf Oil of Pennsylvania 58, 1947 General Electric 330, 1942 Lehigh Coal & Nay. 430, 1954 General Petroleum 58, 1940 2s, 1960 half a point, Illinois Steel 430, 1940 point, to 1019/s, and Pennsylvania 43/ Lorillard (P.) Co. 7s. 1944 Sun Oil 530, 1939 Liggett & Myers 55, 1951 to 1043.. In the lower-priced groups losses predominated, Standard Texas Corp. 5s, 1944 011 of N. J. 58. 1946 Tobacco Products 630. 1022 Standard Oil of N.Y.4s,1951 Southern Pacific 4%s, 1969 from 69 to 683, New York Tenn. Union Oil of Calif. 68, 1942 Coal, Iron RR. 58, 1951 Western Electric 5s, 1944 Chicago & St. Louis 6s, 1935 from 713. to 68%, Chicago Baa As Abraham & Straus 530, 1943 Great Western 4s, 1959 from 483 to 47% and Louisiana & Baldwin Locomotive 58, 1940 Aluminum Co. of Am. 58, 1952 Jones & Laughlin Steel 58, 1939 Arkansas 5s, 1969 from 65% to 633.. Erratic price move- Sauda Falls 58, 1955 Amer. I. G. Chemical 530, 1949 Goodyear Tire & Rub. 5s, 1957 Swift & Co. 58, 1944 ments occurred in the low-priced and more speculative issues. Union Gulf Inland Steel 430, 1978 Corp. 5s, 1950 Lorillard (P.) Co. 58, 1951 National Dairy Prod. 5s, 1948. For example Western Pacific 5s, 1946 sold as high as 46% National Steel 58. 1956 and as low as 39% during the week. Pillsbury Flour Mills 68, 1943 Wilson & Co. 68, 1941 The sharp advance of previous weeks in utility bonds was FOREIGN A continued on Monday of the current week, carrying many Italy 75. 1951 Belgium 630, 1949 Norway 58, 1963 issues to new high levels for the move. On Tuesday the Belgium 7s, 1956 Norway 65, 1952 Denmark 430, 1962 Oslo 6s, 1955 trend was mixed, but on Wednesday profit-taking was Denmark 530. 1955 Oslo Gas & Elec. 55, 1963 Framerican Ind. Dev. 730, 1942 markedly in evidence, a majority of bonds losing from fracBa Baa Austria 7s, 1957 Antwerp 58, 1958 tions of a point to 6 points. This was of short duration, Australia Cuba 530, 1953 5s, 1957 Gt. Cons. Elec. Pwr.630. 1950 Austria 75, 1943 for on Thursday buying was again in evidence. American Copenhagen Poland 68, 1940 430, 1953 Ruhr Gas 630, 1953 Water Works & Electric Collateral Trust 5s, 1934 were the Finland 530, 1958 Sao Paulo 78, 1940 Germany 530. 1965 most spectacular issue of the week, showing a large advance Japan Tokyo Elec. Lt. 58, 1953 530, 1965 Ujigawa Electric 7s, 1945 75, 1947 with huge volume, particularly upon announcement of re- Poland Un. El. Serv. (Italy) 7s, 1956 Rome 630, 1952 Warsaw 75, 1958 funding plans. Net changes for the week include a gain of Tokio 530 1961 Note: number suitable issues, the Industrie Because of the limited m to 80% for Delaware Electric Power 53/ 2s, 1959 and a loss Aaa group is now temporarily limited to of nine and the Industrial Aa groupto omitted five, while group is the Foreign Aa entirely. Because of proper of X to 69 for National Power & Light 5s, 2030. Central adjustments,however,the averages remain comparable throughout. Where, in the remaining Foreign groups, a country or city is represented more than States Electric 53s, 1954 were unchanged at 43. once, the weighting of each bond in the average is correspondingly reduced. Industrial issues pushed into new high ground for the ad- Averages for all other groups are unweighted. vance, and though receding from the top prices, scored a Moody's computed bond prices and bond yield averages' gain as a group. Steels held most ofitheir gains, Inland are given in the tables below: 921 Financial Chronicle Volume 138 MOODY'S BOND YIELD AVERAGES.t (Based on individual Closing Prices.) MOODY'S BOND PRICES. (Based on Average Yields.) 120 Domestic Corporate 120 U. S. by Ratings.* Gov. Domes1934 Bonds. tie. Daily Baa. A. Aa. Corp.* Aaa. Averages. ** 120 Domestic Corporate* by Groups. All 1934 120 Daily Domes tie. Averages 120 Domestic Corporate by Ratings. ft 80 ForP. U. Indus. dom. 120 Domestic Corporate by Groups. RR. Baa. A. Aa. Aaa. 7.57 4.75 5.61 5.05 6.31 5.27 4.75 4.22 5.14 9__ Feb. Feb. 9... 101.69 93.99 109.12 7.62 4.75 5.60 5.06 6.30 5.29 4.74 4.22 8__ 5.14 8_ 101.82 93.99 109.12 7.61 4.75 5.61 5.05 6.31 5.27 4.75 4.22 7.. 5.14 7... 101.76 93.99 109.12 7.56 4.73 5.58 5.01 6.23 5.24 4.75 4.21 5.11 66-- 101.93 94.43 109.31 7.55 4.73 5.56 4.99 6.23 5.23 4.73 4.20 5._ 5.10 5._ 102.02 94.58 109.49 7.53 4.77 5.60 5.03 6.27 5.27 4.76 4.23 5.13 3__ 108.94 94.14 102.07 3-7.55 4.77 5.64 5.05 6.30 5.29 4.77 4.24 5.15 2__ 2-- 101.77 93.85 108.75 7.63 4.77 5.71 5.11 6.37 6.37 4.79 4.24 1__ 5.19 1_ 101.47 93.26 108.75 Weekly Weekly 7.97 4.82 5.88 5.23 6.62 5.47 4.85 4.30 Jan. 26._ 5.31 Jan. 26_ 100.41 91.53 107.67 98.41 89.31 75.50 92.68 83.97 98.88 8.05 4.83 6.01 5.32 6.73 5.57 4.93 4.30 19_ _ 5.38 19- 100.36 90.55 107.67 97.16 87.96 74.36 91.39 82.38 98.73 8.33 4.87 6.35 5.54 7.12 5.81 5.04 4.38 5.59 12._ 98.09 78.44 12_ 99.71 87.69 106.25 95.48 84.85 70.52 88.36 8.55 4.94 6.74 5.74 7.56 6.04 5.19 4.43 5.. 5.81 5__ 100.42 84.85 105.37 93.26 82.02 66.55 85.74 74.25 97.00 8.63 4.81 5.47 5.19 6.42 5.47 4.73 4.28 Low 1933 5.25 High 1933 103.82 92.39 108.03 100.33 89.31 77.66 93.26 89.31 99.04 11.19 6.35 7.17 7.22 9.44 6.98 5.96 4.91 High 1933 6.75 Low 1933 98.20 74.15 97.47 82.99 71.87 53.16 69.59 70.05 78.44 9.86 5.75 5.59 6.30 7.41 6.34 5.44 Low 1932 5.90 4.51 High 1932 103.17 82.62 103.99 89.72 78.55 67.86 78.99 87.69 85.61 8.11 15.83 7.66 9.23 12.96 10.49 7.03 5.75 High 1932 8.74 Low 1932 89.27 57.67 85.61 71.38 54.43 37.94 47.58 65.71 62.09 Yr. AgoYr. Ago5.70 10.04 5.71 6.43 8.09 6.08 5.22 4.40 Feb. 9'33 5.95 Feb.9'33 103.44 83.11 105.89 92.82 81.54 62.25 77.55 86.12 86.25 2 Yrs.Ago 2 Yrs.Ago 7.14 13.15 6.51 7,32 9,23 721 21 II 661 'um, 9'25 ft 00 Feb.9'22 6217 71 77 ni ka RA oll 69.66 54.43 68.67 76.67 70.33 the average either 8 4 show to purport not do and years) 31 in maturing coupon, % (4 bond "Ideal" one of basis the on yields •These prices are computed from average ye way the relative levels and the relative movement 01 level or the average movement of actual price quotations. They merely serve to illustrate In a more comprehens issue of Feb.6 1932, page 907. back the see months 1928, to by prices bond of index Moody'a For market. bond the of picture truer the being latter the yield averages, these indexes was published in the issue of Sept.9 1933, page •• Actual average price of 8 long-term Treasury Issues. tThe latest complete list of bonds used in computing 1820. tt Average of 30 ioreign bonds but adjusted to a comparable basis with previous averages of 40 foreign bonds. 100.00 100.17 100.00 100.00 100.33 99.84 99.68 99.36 92.10 91.81 92.10 92.53 92.68 92.10 91.81 90.69 78.88 78.99 78.88 79.80 79.80 79.34 78.99 78.21 RR. 95.33 95.18 95.33 95.93 96.23 95.63 95.33 94.43 P. U. Indus. 87.43 87.56 87.43 87.83 88.10 87.56 87.04 85.12 100.00 100.00 100.00 100.33 100.33 99.68 99.68 99.68 Railroads of the United States Earn Only 1.80% on Their Investment in Calendar Year 1933. Class I railroads in 1933 had a net railway operating income of $474,369,438, which was a return of 1.80% on their property investment, according to complete reports for the year just filed by the carriers with the Bureau of Railway Economics. The net railway operating income in 1932 was $326,317,936, or 1.24% on their property investment. Property investment is the value of road and equipment as shown by the books of the railroads, including materials, supplies and cash. The net railway operating income is what is left after the payment of operating expenses, taxes and eqvipment rentals but before interest and other fixed charges are paid. This compilation as to earnings in 1933 is based on reports from 149 Class I railroads representing a total mileage of 240,744 miles. Net railway operating income increased in 1933 because of increased freight traffic and also because of the continued drastic reductions in operating expenses that were made by the rail carriers. While revenue freight carloadings in 1933 increased 2.8% above 1932, freight revenue increased only 1.7%. Freight revenue amounted to $2,492,735,344 in 1933, compared to $2,450,957,092 in 1932. Passenger revenue in 1933 amounted to $329,341,854, a decrease of $47,753,519, or 12.7%, compared with 1932. Total operating revenues of the Class I railroads in 1933 amounted to $3,095,446,191, compared with $3,126,889,091 in 1932, a decline of 1%. Operating expenses in 1933 totaled $2,249,318,750, compared with $2,403,543,795 in 1932, a decrease of 6.4%. The operating ratio, or ratio of expenses to revenues, was reduced from 76.87% in 1932 to 72.67% in 1933. Class I railroads in 1933 paid $249,539,964 in taxes, a reduction of $25,631,897, or 9.3%, compared with 1932. Thirty-throe Class I railroads operated at a loss in 1933, of which seven were in the Eastern, eight in the Southern, and 18 in the Western districts. For the month of December 1933 net railway operating income of Class I carriers amounted to $37,763,877, which was a return of 2.35% annually on their property investment. In December 1932 their net railway operating income was $32,304,894, or 2%, on their property investment. Total operating revenues for the month of December amounted to $245,329,548, compared with $243,346,573 in December 1932, an increase of 0.8%. Operating expenses in December totaled $187,081,366, compared with $186,039,881 in the same month the year before, an increase of 0.6%. Eastern District. Net railway operating income of Class I railroads in the Eastern District in 1933 amounted to $281,896,607, which was a return of 2.32% on their property investment. In 1932 their net railway operating income was $217,119,582, or 1.79%. on their property investment. Total operating revenues of Class I railroads in the Eastern District in 1933 aggregated $1,583,684,630, a decrease of 0.9% under 1932, while operating expenses totaled $1,115.062,066, a decrease of 5.7% under 1932. Class I railroads in the Eastern District for the month of December had a net railway operating income of $20,120,406, compared with $19,693,556 In December 1932. Southern District. Class I railroads in the Southern District in 1933 earned a net railway operating Income of $59,673,027. which was a return of 1.82% on their property investment. In 1932 the net railway operating income amounted to $25,802,847, which was a return of 0.78%. Total operating revenues of Class I railroads in the Southern District in 1933 amounted to $388,511,754, an increase of 2.8% over 1932, while operating expenses totaled $291,234,180, a decrease of 6.8%• Net railway operating income of Class I railroads in the Southern District in December amounted to $6,610,566, while in the same month of 1932 it was $5,877,358. Western District. Class I railroads in the Western District in 1933 earned a net railway operating income of $132,799,804, which was a return of 1.22% on their property investment. In 1932, the railroads in that District had a net railway operating income of $83,395,507. a return of 0.76% on their property investment. Total operating revenues of the Class I railroads In the Western District in 1933 aggregated $1,123,249,807, a decrease of 2.5% under the preceding year, while operating expenses totaled $843,022,504, a decrease of 7.3% compared with 1932. For the month of December net railway operating income of Class I railroads in the Western District amounted to $11.032.905. Net railway operating income of the same roads in December 1932 totaled $6.733,980. CLASS I RAILROADS-UNITED STATES. Percent Increase or 1932. 1933. Decrease Month of December$245,329,548 3243,346,573 +0.8 Total operating revenues 186,039.881 +0.6 187,081,366 Total operating expenses 15,565,652 -27.8 11,235,146 Taxes 32,304,894 +16.9 37,763,877 Net railway operating income 76.45 76.26 Operating ratio-per cent 2.00% 2.35% Rate of return on property investment_12 Months Ended Dec. 313,095,446,191 3.126,889.091 -1.0 Total operating revenues 2,249,318,750 2,403,543,795 -6.4 Total operating expenses 275.171,861 -9.3 249,539.964 Taxes 326,317.936 +45.4 474,369.438 Net railway operating Income 76.87 72.67 Operating ratio-per cent 1.24% 1.80% Rate of return on nronertv investment Administration's Budget Program-National City Bank of New York Says Test of Program Will Come in Ability of Government to Stop Spending When It Wants to Without Causing Corresponding Slump in Business. The estimates of Governmental expenditures and prospective borrowing presented by the President in his budget message to Congress, are the subject of comment in the February letter of the National City Bank of New York. In part, the Bank says: The Budget Totals. Any discussion of the budget program naturally involves, first, the aggregate totals to be collected and spent. Briefly, the President estimates that for the fiscal year ending June 30 next, the ordinary cost of running the Government, including the usual provision for amortization, will amount to $3,534,000,000. Emergency expenditures are estimated at $6.357,000,000. These, plus a supplementary sum of $1.166,000.000 not included in the budget, but which the President believes will be needed to Provide adequate relief, make a total expenditure of $11,057.000.000. Against these expenditures, taxation and other revenue are expected to bring in $3,260,000,000, leaving an aggregate deficit of $7,797,000,000. With $488,000,000 allocated to debt amortization, the net increase in the public debt for the year is estimated at $7,309,000,000. Of this increase. $1,125,000,000 occurred during the period July through December 1933, which leaves something over $6,000,000,000 to take place during the Period January through June 1934. For the fiscal year ending June 30 1935, the President is more optimistic. Relying upon an increase of 21% in business, as measured by the Federal Reserve Board's index of production, he estimates that emergency expenditures can be cut to $2,723,000,000, while revenue collections are counted on to reach $3,975.000,000. Ordinary expenditures are placed at $3,763:000.000 which, in conjunction with expected revenue and other expenditures, would reduce the net deficit, including the sinking fund, for the Fear to $2,512,000,000. By 1936 it is hoped that both ordinary and extraordinary expenditures will be in balance with receipts, thus ending the period of deficit financing. On the basis of this program, the public debt at the close of the current fiscal year will stand at $29,847,000,000, a new all-time peak. With the additional borrowing expected next year the maximum debt, according to present estimates, will be reached on June 30 1935, at $31.834.000.000. a level $5,237,000,000 above the highest point reached just after the close of the war, and nearly double the total at the post-war low in 1930. This total does not include the contingent liability as guarantor on the $2.000.000,000 authorized bonds of the Federal Land banks and $2,000.000.000 922 Financial Chronicle bonds of the Home Owners' Loan Corporation. At the present time these bonds are guaranteed as to interest payments by the United States Government and it is proposed to extend the guarantee to apply to the principal also. Classification of Expenditures. How is the money to be spent? A partial answer to this question is afforded by the following table showing the emergency expenditures for 1934 by broad classifications. This table is exclusive of the supplementary S1.166,000,000 asked for by the President. the purposes of which were not itemized: Emergency Expenditures—Fiscal Year 1934. Public Works Administration $1.677,000,000 Agricultural Adjustment Administration 103,000,000 Farm Credit Administration 40.000,000 Emergency Conservation Work 342,000,000 Reconstruction Finance Corporation 3,970,000.000 Tennessee Valley Authority 19.000.000 Federal Land Banks 52,000,000 Federal Deposit Insurance Corporation 150.000,000 National Industrial Recovery Administration 4,000,000 Total S6.357,000.000 It will be observed that the appropriation for the RFC covers 62% of the emergency expenditures, and that RFC and public works combined account for 89% of the total. The other items are self-exp'anatory. In view, however, of the importance assigned to the RFC, a breakdown of this agency's figures is desirable. Proposed RFC Expenditures for 1934 Net After Estimated Repayments. Loans to banks and trust companies $280,000,000 Loans to railroads 93,000,000 Loans to mortgage loan companies 180,000,000 Loans to Federal Land Banks 171,000,000 Purchase of bank preferred stock, capital notes. &c 1.350,000.000 Grants to States for relief pruposes 462.000,000 Loans for drainage, levee and irrigation districts 50,000,000 Loans for self-liquidating construction projects 93,000,000 Loans for foreign sale of agricultural surpluses 100,000,000 Loans for domestic storage and marketing of agricultural commodities 498,000.000 Loans to joint stock land banks 81,000,000 Direct loans to farmers under Emergency Farm Mortgage Act 200,000,000 Purchase of Home Loan Bank Corporation stock 82,000,000 Purchase of Home Owners' Loan Corporation stock 199.000,000 Other expenditures 131.000,000 Total net expenditures $3,970,000,000 Extenuating Circumstances of Current Debt Increase. It will be clear from an examination of the foregoing figures that the contemplated increase of debt will have certain extenuating features that are entitled to consideration. A substantial portion of the increase will be offset by the acquisition of assets having a recoverable value. In his budget message, the President said that the Government held collateral or other assets valued at $3,559,000,000 against outstanding advances, and it is estimated that, if the borrowing program for the next year and a half is carried through, the Treasury in 1935 will hold assets of something like 0.462,000.000 face value against a public debt of $31,834,000,000. To the extent that these assets pay out, the proceeds will reimburse the Treasury and provide for debt retirement without burden upon the taxpayer. Some of these assets unquestionably are of a high grade. The investments by the RFC in the preferred stock and capital notes of banks are clearly of this class. Certain of the assets, of course, will have to be written down, but even so there should be considerable salvage value in the totals which would be increased with an improvement in business. The RFC has not been known as an easy lender, at least so far as its loans to banks, railroads, Insurance companies and the like are concerned. It is noteworthy that out of $2,749,000,000 loaned and disbursed by the:RFC from the date of its Feb. 10 1934 organization in February 1932, to Dec. 31 1933. $1,031,000,000. or 37% has been repaid already. Even in cases where the Government has made direct outlays, as for example for public works, the sums that are spent for useful and necessary projects should add to the wealth and productive power of the country. To the extent that the Government expenditures represent the acquisition of realizable assets or the furthering of projects having some economic utility, the increase of debt is evidently in a different category from that which occurs during a war when capital and wealth are being destroyed. . . The Test of Success. The real test of the spending program will not be in the ability of the Treasury to dispose of a given amount of securities, or even in a favorable showing for trade while the spending is In progress, but in the ability of the Government to stop spending when it wants to without bringing on a corresponding slump in business. 4. New Jersey Bankers' Association Reiterates Stand on Taxation—Urges Consolidation of Municipal Governments and Municipal Functions—Also Calls for Debt Limit Laws—Not in Favor of New Taxes at This Time—Would Extend Temporary Insurance Fund One Year from Present Date of Termination. Following a recent meeting of the Executive Committee of the New Jersey Bankers' Association held for the purpose of giving further study to the current fiscal position of the State and its political subdivisions,Carl K.Withers,President of the Association, announces that the Association's stand on taxation as presented Aug. 24 1933 at a meeting of the Joint Committee of the Legislature on Taxation was again reiterated. The recommendations made at that time were: 1. That there be brought about a general consolidation of municipal governments and numerous municipal functions. 2. That there be immediately enacted debt limit laws that limit in fact. 3. That there be positive and effective regulation and control of spending by State and municipal authorities. As regards new taxes, Mr. Withers' announcement states that while the Association feels that a more equitable system of tax levy must be worked out in this State and that the sales tax is a step in this direction, until expenditures have been further drastically reduced, both for current and longterm needs, the question of new or additional taxes should not be considered. When, however, expenditures, local and State, have been reduced to a fair basis, then, and not until then, will the Bankers' Association wholeheartedly consider and co-operate in any plan to raise additional funds. Experience has shown that every new tax is an additional tax. The Bankers' Association insists that no new taxes be levied until the cost of government, both State and local, has been brought within the reach of present expected income. It is further announced: In addition to the foregoing, the Executive Conunittee has gone on record as favoring the extension of the Temporary Federal Deposit Insurance Fund for a period of one year from the present date fixed for termination thereof on July 1 1934, and that the time fixed by the Banking Act of 1933 for the permanent organization of the Federal Deposit Insurance Corporation, including the subscription of the capital stock by the banks effected be likewise extended for one year. The New Capital Flotations in the United States During the Month of January The new capital issues brought out during the opening month of the new year again proved extremely light and call for no comment beyond noting the fact itself. The grand total of new issues floated footed up no more than $90,242,665 and this included a $28,000,000 Federal Intermediate Credit banks issue of 23.% collateral trust debentures almost entirely for refunding. The corporate issues aggregated no more than $7,483,407; these comprising with one exception nothing but brewery issues of one kind or another. The awards of State and municipal issues reached $54,759,258 and would have fallen far below that amount except that a few large issues served to swell the amount, the list including $15,000,000 of 53/2% refunding bonds by the City of Chicago, $8,453,000 of Massachusetts 3s and, 33's, $6,806,000 of Allegheny County 4% bonds, $3,800,000 of St. Louis, Mo., 33 4s and 4s, and $2,000,000 of Syracuse. N. Y., 4.10% bonds. Of course, conditions for bringing out private issues of securities still continue unfavorable, especially in the case of corporate issues, banking and investment houses being reluctant to take the risk involved in floating new obligations in view of the provisions of the Security Act of 1933. Aside from this, much of the financing formerly done in the ordinary way is now being done by the United States through the Reconstruction Finance Corporation and other Government agencies. Particularly is this true with reference to the borrowing by States and municipalities and as a matter of fact, new financing by the United States now represents larger new debt creations than all other sources of new capital issues combined. As it happens, too, durinff January new financing by the U. S. Government proved of unusual proportions, it including not only several issues of bills on a discount basis, but a piece of major financing in excess of a billion dollars in the shape of Treasury notes and certificates. In view of the importance and magnitude of this Government financing, we bring together the details of the same below, in other words furnish a summary of the United States issues of all kinds floated during the month. Treasury Financing During the Month of January 1934. On Jan. 23 Secretary of the Treasury Henry Morgenthau Jr. announced a combined offering of Treasury notes and Treasury certificates of indebtedness to the total amount of $1,000,000,000 or thereabouts. The first (Series C-1935) consisted of 2%% Treasury notes dated Jan. 29 1934 and due March 15 1935; the other (Series TS-1934) of 13/2% Treasury certificates of indebtedness dated Jan. 29 1934 and due Sept. 15 1934. Each offering was for the amount of $500,000,000 or thereabouts. The offering met with a quick response and closing of the subscription books was announced the same day they were opened. Subscriptions amounted to $4,784,776,700, of which $3,424,212,200 was for the 23/2% notes and $1,360,564,500 for the 13% certificates of indebtedness. The amount allotted on the 23/2% Treasury notes was $528,101,600,while on the 13-% certificates of indebtedness the amount allocated was $524,748,500, making the aggregate $1,052,850,100. Both series were offered at par. The entire amount allotted on Volume 138 the two issues, viz. $1,052,850,100, represents an addition to the public debt. The notes and certificates, in addition to being exempt from the normal taxes, are also exempt from the surtaxes. Mr. Morgenthau on Dec. 26 had announced an offering of $100,000,000 or thereabouts of 91-day Treasury bills. The bills, however, were dated Jan. 3 1934 and mature on April 4 1934, and hence comprise part of the Government's financing for the month of January. Tenders for the issue amounted to $384,619,000, of which $100,990,000 was accepted. The average price obtained was 99.843, equivalent to an interest rate of 0.62% on a bank discount basis. The proceeds were used to retire a similar amount of maturing bills. On Jan. 3 Mr. Morgenthau invited tenders to a new offering of $100,000,000 or thereabouts of 91-day Treasury bills. This issue was dated Jan. 10 and will mature April 11 1934. Applications for the bills amounted to $252,825,000, of which $100,050,000 was accepted. The average price on this issue was 99.843, the average rate on a bank discount basis being about 0.62%. The proceeds were used to retire $75,020,000 of maturing bills, leaving $25,030,000 as an addition to the public debt. Another issue of 91-day Treasury bills was announced by Mr. Morgenthau on Jan. 10 in the amount of $125,000,000 or thereabouts. The bills were dated Jan. 17 and will mature April 18 1934. Tenders to this offering amounted to $289,397,000, of which $125,340,000 were accepted. The average price realized by the Treasury on this issue was 99.831, the average rate on a bank discount basis being 0.67%. The offering was used in part to meet $75,023,000 of maturing bills, leaving $50,317,000 as an addition to the public debt. A further offering of $125,000,000 or thereabouts of 91-day Treasury bills was announced on Jan. 17 by Mr. Morgenthau. The bills were dated Jan. 24 and will mature April 25 1934. Subscriptions to the offering amounted to $303,560,000, of which $125,126,000 was accepted. The average price of this issue was 99.831 and the average rate about 0.67% per annum on a .bank discount basis. The Issue provided for $80,034,000 of maturing bills, leaving $45,092,000 of new Government debt. On Jan. 24 Mr. Morgenthau gave notice of an additional issue of 91-day Treasury bills to the amount of $150,000,000 or thereabouts. The bills were dated Jan. 31 and will mature May 2 1934. Tenders received amounted to $381,422,000, of which $150,320,000 was accepted. The accepted bids averaged 99.819, the average rate on a bank discount basis being 0.72%. Proceeds of the issue were used in part to retire $60,180,000 of maturing bills, leaving $90,140,000 as additional Government debt. On Jan. 31 Mr. Morgenthau announced the offering of two series of Treasury bills dated Feb. 7, one running for a period of 91-days for the amount of $125,000,000 or thereabouts, and the other for 182-days to the amount of $50,000,000 or thereabouts. The 91-day bills mature May 9 and the 182-day bills on Aug.8. In offering Treasury bills of 182 days' duration, it is noted that the Treasury departed from its customary 91-day to 93-days' maturity dates. The longest maturity on such financing has heretofore been 93 days, although the Treasury has the authority to issue bills up to a year's maturity. While the two series were announced in January, they bear the date of Feb. 7 and are therefore not included in our tables of Treasury financing for January shown below. Tenders to the 91-day issue of $125,000,000 aggregated $302,858,000, of which $125,493,000 was accepted at an average price of 99.834, equivalent to a bank discount rate of 0.66%. Tenders to the 182-day issue of $50,000,000 amounted to $244,427,000, of which $50,078,000 was accepted at an average price of 99.524, the yield on a bank discount basis being 0.94%. The rates on these offerings compare with 0.72% (bills dated Jan. 31); 0.67% (bills dated Jan. 24 and Jan. 17), and 0.62% (bills dated Jan. 10 and Jan. 3). Proceeds of the two issues of bills dated Feb. 7 provided for the retirement of $75,335,000 of maturing bills, leaving $100,236,000 as an addition to the public debt. In the table below we show the Treasury financing done during January. The result is found to be that the disposals (not counting the sale of the two Treasury bill issues announced Jan. 31 and bearing date of Feb. 7) aggregated $1,654,676,100, of which $390,257,990 was used to take up existing issues and $1,263,429,100 represented new indebtedness. 923 Financial Chronicle UNITED STATES TREASURY FINANCING DURING JANUARY 1934. Dale Offered. Dated. Dec. 26 Jan. Jan. 3 Jan. Jan. 10 Jan. Jan. 17 Jan. Jan. 23 Jan. Jan. 23 Jan. Jan. 24 Jan. Due. Amount Accepted. Amount Applied for. Yield. Price. $384,619,000 5100,990.000 Average 99.843 3 91 days 252,825,000 100,050,000 Average 99.843 10 91 days 289,397,000 125.340,000 Average 99.831 17 91 days 303,560,000 125,126,000 Average 99.831 24 91 days 100 29 1314 mos. 3,424,212,200 528.101,600 100 29 714 mos. 1,360,564,500 524,748,500 381,422.000 150,320,000 Average 99.819 31 91 days *0.62% *0.62% *0.67% *0.67% 2.50% 1.50% .0.72% 1 R54 1171t MC •Average rate on a bank discount basis. USE OF FUNDS. Jan. Jan. Jan. Jan. Jan. Jan. Jan. 3 10 17 24 29 29 31 Total Amount Accepted. Type of Security. Dated. $100,990,000 100.050,000 125,340,000 125,126,000 528,101,600 524,748,500 150,320,000 Treasury bills Treasury bills Treasury bills Treasury bills 2.15% Treas. notes 115% CUs. of Ind. Treasury bills 51,654,676.100 Refunding. New Dulebtedriese. $100,990,000 75,020.000 75,023.000 80,034,000 60,180.000 $25,030,000 50,317.000 45.092,000 528,101,600 524,748,500 90,140,000 $391,247,000 31,283,429,100 Features of January Private Financing. Referring again to the limited volume of corporate financing undertaken during January, we observe that there were only eight flotations for a total of no more, as already said, than $7,483,407, all of which, needless to say, was domestic financing. This compares with 11 new offerings, totaling $16,150,018,reported for December. The January financing comprised seven new stock emissions by breweries and distilleries for an aggregate of $5,983,407 and $1,500,000 Northwestern Telegraph Co. 1st mtge. 432s, Jan. 1 1944, representing an extension of maturity. The portion of the month's corporate financing raised for refunding purposes was $1,500,000, or slightly over 20% of the total. In December the refunding portion was $549,500, or about 3.4% of the total. In January 1933 the amount for refunding was $42,360,000, or more than 65% of the month's total. Included in the month's financing was an issue of $28,collateral 000,000 Federal Intermediate Credit banks 2 trust debentures dated Jan. 15 1934, due in six months, offered at price on application. As already stated, there were no foreign issues of any description marketed here during January. None of the January corporate offerings contained convertible features nor carried rights to acquire stock on a basis of one kind or another. Two new investment trusts of the fixed type were announced in January, viz.: Group Securities, Inc., common stock, sponsored by Distributors Group. Inc., and Fenner & Beane, New York. Metals Equities, Inc., capital stock, sponsored by National Associated Dealers, Inc. The following is a complete summary of the new financing, corporate, State and city, foreign Government, as well as farm loan issues, for the month of January: SUMMARY OF CORPORATE, FOREIGN GOVERNMENT, FARM LOAN AND MUNICIPAL FINANCING. MONTH OF JANUARY 1934. Corporate— Domestic— Long-term bonds and notes Short-term Preferred stocks Common stocks Canadian— Long-term bonds and notes Short-term Preferred stocks Common stocks Other foreign— Long-term bonds and notes Short-term Preferred stocks Common stocks Total corporate Canadian Government Other foreign Government Farm loan issues Municipal, States, cities, dm United States Possessions Grand tntal_ New Capital. Refunding. $ 8 1,500.000 Total. $ 1,500,000 5,983.407 5,983.407 5,983,407 1,500,000 7,483.407 5,000,000 *36,791.912 23,000,000 *17,967,346 28,000,000 *54.759,258 47 77n f110 42 457 245 OR 242 ARS •Figures do not include $140,024,280 of funds made available to States and municipalities by various agencies of the Federal Government during January 1934. In the elaborate and comprehensive tables on the succeeding pages we compare the foregoing figures for 1934 with the corresponding figures for the four years preceding, thus affording a five-year comparison. We also furnish a detailed analysis for the five years of the corporate offerings, showing separately the amounts for all different classes of corporations. Following the full-page tables we give complete details of the new capital flotations during January,including every issue of any kind brought out in that month. 1.500.000 7.483.407 22,157,000 23,000.000 *17,967.346 28.000,000 *54,759,258 9,500,000 32,850,256 42,360.000 64.517,000 9,500,000 35,834,606 46.663,750 70,000,000 70,000,000 50,000,000 50,000,000 1,500,000 48.163,760 J99,848,279 12,000,000 12,500,000 42,000 12,500,000 138,248,064 48:898:789 180,858,000 580.706.279 12,000,000 58:872:S89 13,000,000 18,000,000 480.195,500 59,170.000 4,475.000 122,338,054 31.000.000 5.000,000 5,000,000 629,082,554 7,142,000 4,000,000 73,096,000 702.178,554 2.158,000 . 9.300.000 4.000,000 2.984.350 138.206,064 1,338.500 107,919.314 1,923,500 1.500.000 42,467.346 90.242.665 64,507.256 45.344,350 109.851,606 184.869,814 14.042.000 198,911,814 466.658.686 182.196.500 648.855,186 749.643.868 77.177,500 made available to States and mtmicipalit es by various agencies of the Federal Government during January 1934 CHARACTER AND GROUPING OF NEW CORPORATE ISSUES IN THE UNITED STATES FOR THE MONTH OF JANUARY FOR FIVE YEARS. 1934. 1933. 1932. MONTH OF JANUARY. 1931, 1930. New Lonnal. Refunding. Total. New Capital. Refunding. Total. New Capital. Refunding. Total. New Capital. Refunding. Total. New Capital Refunding. Long-Term Bonds and Notes— $ $ Railroads 12,000.000 12.000.000 122.160.000 52,844.000 175,004,000 7.395.000 53,088,000 Public utilities 1,500,000 1,500.000 6.407,000 31,518,000 37,925,000 40.270,000 40.270,000 145.241.000 120.928,000 266,169,000 348,000,000 9,000,000 Iron, steel, coal, copper, &c 15.250,000 15,250,000 Equipment manufacturers 300,000 300,000 Motors and accessories Other industrial & manufacturing_ 50.492.000 50,492,000 745,000 105,000 Oil Land. buildings. &c 1,075,000 1,075,000 3,600,000 920.000 4,520,000 23,362,500 Rubber Shipping Inv. trusts, trading, holding, &c_ 60.00-0,000 Miscellaneous 500.000 500,000 9.500.000 Total 1.500,000 1.500,000 18,407.000 31,518,000 49,925,000 41.345,000 41,345.000 337,543.000 174,692,000 512,235,000 449.002,500 Short-Term Bonds and Notes— 62.193.000 Railroads Public utilities 500,000 6,500.000 7.000,000 750.000 1,500,000 2,250,000 14,575,000 4,425,000 19,000,000 37.372,000 10,128,000 Iron, steel, coal, copper, &c 4.342,000 4,342,000 3,000,000 Equipment manufacturers Motors and accessories 600.000 Other industrial & manufacturing_ 200,000 200.000 6.600,000 400,000 Oil 709,000 791.000 1,500,000 Land. buildings, &c 150,000 150.000 1,518.750 950,000 2,468,750 4,295,000 375,000 Rubber Shipping Inv. trusts, trading, holding, &c_ Miscellaneous 1,400.000 Total 500.000 10.842.000 11 342,000 900,000 1.500,000 2,400,000 17.002,750 6,166,000 23.168.750 53,267,000 10,903.000 Stocks— Railroads Public utilities 2,100..000 2,100,000 38.938.779 38.938,779 87,500,000 Iron, steel, coal, copper, &c 21,502,000 Equipment manufacturers Motors and accessories 992,750 manufacturing_ industrial & Other 5.983,407 5,983,407 3,250,000 3.250.000 150.000 150,000 2,931,250 2,931,250 650.000 011 2,274,804 Land. buildings, &c 1,032,500 1,032,500 160,000 Rubber 2,168,750 2,168,750 Shipping Inv. trusts, trading, holding, &c_ 3,250,000 Miscellaneous 2.400.000 2.400.000 10.483.500 Total 5.983,407 5,983.407 3,250.000 3,250.000 4,418.750 4.418,750 45,302,529 45,302,529 126,813.054 Total— Railroads 12.000.000 12.000,000 122,160.000 52,844,000 175.004,000 7.395,000 53.088.000 Public utilities 1,500.000 1.500,000 6,907.000 38.018,000 44,925,000 43.120.000 1.500,000 44,620,000 198.754.779 125,353,000 324,107.779 472.872,000 19.128,000 Iron. steel, coal, copper. &c 4.342,000 4,342,000 15.250.000 15,250,000 24,502.000 manufacturers Equipment 300.000 300,000 Motors and accessories 1,592,750 Other industrial & manufacturing_ 5.983.407 5.983.407 3.250.000 3,250.000 150.000 53,623,250 150.000 53,623,250 7,995,000 505.000 Oil 709.000 791,000 1.500,000 2,274,804 Land, buildings, &c 1.225.000 1,225,000 6,151,250 1.870,000 8,021,250 27,817,500 375,000 Rubber 2,168,750 2.168.750 Shipping Inv. trusts, trading, holding, &c_ 63.250,000 Miscellaneous 2.900,000 2,900.000 21.383.500 5.983.407 Total corporate securities 7.483.407 1.500.000 22.157.000 42.360.000 64.517.000 46.663.750 48.163.750 399,848.279 180.858,000 580.706.279 629.082.554 1.500.000 73.096.000 Total. 109.842,814 1.500.000 826,821,368 Total. 60.483,000 357.000,000 850,000 23,302,500 9.500.000 511,195,500 47,1bb;666 3,000,000 600,000 7,000,000 aia!uoi7.9 lepueufg SUMMARY OF CORPORATE, FOREIGN GOVERNMENT, FARM LOAN AND MUNICIPAL FINANCING FOR THE MONTH OF JANUARY FOR FIVE YEARS. 1934. 1993. 1932. 1991. 1930. Refunding. Total. New Capital. Refunding. Total. New Capital Refunding. Total. New Capital. Refunding. Total, New Capital. Refunding. $ 2 2 $ 2 2 2 2 $ 2 2 1,500.000 1,500,000 18,407,000 31,518,000 49,925.000 41,345,000 41.345,000 217.543,000 174,692,000 392,235.000 436.002,500 44,193.000 500.000 10,842,000 11,342.000 2.400,000 1,500,000 900,000 17,002,750 6,166,000 23,168,750 48.267,000 10,903,000 2,500,000 2,500.000 4,250,000 4,250,000 96,503,779 26,503.779 4.475,000 5,983,407 750,000 750,000 168,750 168,750 18,798,750 18.798,750 122,338,054 MONTH OF JANUARY. New Capital. Corporate— Domestic— 2 Long-term bonds and notes_ Short-term Preferred stocks Common stocks 5,983,407 Canadian— Long-term bonds and notes.. Short-term Preferred stocks Common stocks Other foreign— Long-term bonds and notes_ Short-term Preferred stocks Common stocks Total corporate 5,983,407 Canadian Government Other foreign Government_ Farm loan issues 5.000,000 Municipal, States, cities, &c_ _ *36,791,912 United States P ions_ Grand total 47,775,319 *Figures do not include 2140,024.280 of funds 4,670,000 1,400,000 64.170,000 87,500,000 21.502,000 992,750 650,000 2,274,804 160,000 3.250,000 10.483.500 126.813.054 60,483.000 492,000.000 24,502.000 1,592.750 8,500,000 2,274,804 28,192,500 63,250,000 21.383,500 702.178,554 cz) Volume 138 Financial Chronicle 925 DETAILS OF NEW CAPITAL FLOTATIONS DURING JANUARY 1934. LONG-TERM BONDS AND NOTES (ISSUES MATURING LATER THAN FIVE YEARS). Amount. Purpose of Issue. Price. Public Utilities— 1.500,000 Refunding To Yield About. 100 Company and Issue and by Whom Offered. 4.50 Northwestern Telegraph Co. 1st Mtge. 4118, 1944. Offered to holders of company's 1st Mtge. 44s.due Jan. 11934. STOCKS. Par or No. of Shares. nsmo (a) Amount Price To Yield Invoked. per Share. About. Purpose of Issue. Other Industrial & mfg.— abs Alterations dr add'ns to bldgs., Am_ 850,000 Construct distilleries 300,000 1,041,250 191,000 Acq.site: construct & equip plant_ 382,000 150,000 Plant de equip.;retire current debt_ 70,000 Improve plant and property 1,162,500 350,000 81,497 Construct plant;new equipment... 264,865 1,241,396 Improvements; new equip., drc_ 2,482,792 1,241,396 Improvements:new equip., _ Company and Issue and by Whom Offered. Duluth (Minn.) Brewing & Malting Co., Common stock. Offered by Homer, Collins dic Co., Duluth. Kentucky Products Co.. capital stock. Offered by H.P. Hayden & Co.and McGowen, Cassady & White, Inc., Chicago. Little Pepper Distilling Co., Inc., Class A stock. Offered by Harris, Ayers dr Co.. 2 Inc., New York. 71i Pleasant Valley Wine Co.. capital stock. Offered by Tobey & Co.. New York. 5 Porter (11.) Distilling Co. (Agawam, Mass.). Class B common stock. Offered by Tellter & Co.. Hartford. Conn. 31j Tonowanda (N. Y.) Brewing Corp., capital stock. Offered by A.F. Hatch & Co., Inc and C. H. Berets ,k Co., Inc., New York. Walker (H. E.) Distillers & Brewers, Inc., Class A stock. Offered by Whitlock, Smith sh.cl. A and 1813 & Co., Detroit. el. B for $2. Walker (H. E.) Distillers & Brewers, Inc.. Class B stock. Offered by Whitlock, Smith & Co., Detroit. 4 611 5.983,407 FARM LOAN ISSUES. Amount. Issue and Purpose. Price. Yo Yield About. Offered by. 28,000,000 Federal Intermediate Credit Banks 21.5% coll, trust deb. dated Jan. 15 1934 and due in 6 months: refunding and provide mods for loan purposes .. Price on applicat'n Charles R.Dunn,Fiscal Agent,New York. •Shares of no par value. a Preferred stocks of a stated par value are taken at par, while preferred stocks of no par value and all classes of common stocks are computed at their offering prices Text of Report on Stock Exchange Regulation Transmitted to President Roosevelt by Secretary of Commerce Roper—Letter of Secretary Roper Summarizing Recommendations—Letter of President Roosevelt to Chairman of Senate Banking Committee. An item bearing on the report presented to President Roosevelt by Secretary of Commerce Roper appears elsewhere in our issue to-day. The full text of the report is given herewith, together with the letter of President Roosevelt to the Chairman of the Senate Banking and Currency Committee, and the letter of Secretary Roper to the President. LETTER OF TRANSMITTAL. THE WHITE HOUSE. Washington, Jan. 25 1934. Hon. Duncan U. Fletcher, Chairman Ranking and Currency Committee of the Senate, Washington, D. C. My Dear Senator Fletcher: Early last spring at my request the Secretary of Commerce formed a committee for the study of the problem of Federal legislation looking to the regulation of the issuance and sale of securities in Inter-State commerce. Out of this study grew my recommendation which later resulted in the enactment of the Securities Act of 1933. The other division of the study relates to the regulation of stock exchanges. A committee under the direction of the Secretary has also been pursuing this study and this report is being transmitted to you herewith in the hope that It may be of some assistance to you and the other members of your Committee in developing legislation on this subject. I shall be glad at the proper time to confer with you and any other members of your Committee with regard to the policy or program that occurs to me in this connection. In the meantime I shall leave with you and your associates the matter of the construction of the legislation with the understanding, of course, that the departmental committee will be very glad to co-operate with you in every way it can. I am sending a copy of the report also to the chairman of the House Committee with a similar letter. Very sincerely yours, FRANKLIN D. ROOSEVELT. LETTER OF SUBMITTAL. DEPARTMENT OF COMMERCE. Washington, Jan. 23 1934. Hon. Franklin D. Roosevelt, Preeide,t of the United States, The White House, Washington, D. C. Dear Mr. President: I am transmitting herewith a report made to me by the committee which has been engaged in a study of the problem of stock-exchange regulations. It will be observed that the Committee on Stock Exchange Regulation has not undertaken to prepare a draft of a bill carrying into effect its suggestions. Since we began our study of stock exchange regulation, the Banking and Currency Committee of the Senate have been conducting an investigation along the same general lines, but more extensive in nature. Our Committee has, accordingly, endeavored to keep in touch with Senator Fletcher's committee in a fully co-operative manner. In view of this situation, It may be that you will desire to transmit the study of our Committee to the Senate Banking and Currency Committee for such use as its members may be able to make of it. Our Committee will be glad to co-operate with Senator Fletcher in any way that he may think we can assist in constructing any bill or bills which he may wish to present to the Senate on stock-exchange regulations. The major points and recommendations covered in this study are: 1. To require that exchanges shall receive a Federal license as a condition permitting the use of the mails and of inter-State commerce instrumentalities for transmitting their quotations in all communications respecting sales and other transactions on such exchanges. 2. There should be established an administrative authority with broad discretionary powers to require the exchanges to adopt and enforce rules and regulations in a form satisfactory to the administrative agency and of such character as to establish a minimum standard of fair dealing on such exchanges. 3. The adoption of satisfactory rules and regulations which, in the event of violation, would give the Federal agency authority either to deprive such an exchange of its license or to suspend it or fine It, or to require a change in its governing personnel. 4. The study recommends that the form and content of stock-exchange rules governing such matters as pools, margin trading, specialists, short selling, listing requirements, retailing methods, reports, and accounting shall not be set forth in detail in the statute, but shall be left to be prescribed by the administrative agency in accordance with the broad standards of the statute and above a certain minimum requirement. 5. In relation to the reccommendation set forth on the preceding point, it is therefore proposed to require the suggested administrative agency to engage in the full and adequate collection of statistics upon which to base its rules and regulations, with a flexible power to alter these from time to time as a fuller knowledge may require. It is gratifying that the committee is unanimous in its recommendations, as indicated by the fact that all members have signed the report. I am attaching with this letter a report on the regulation of commodity exchanges, which presents the conclusions of the Committee, stating that, while the problem of stock-market regulation and regulation of commodity exchanges involve many of the same abstract issues, they are nevertheless essentially different, both as to the concrete problems with which they deal and as to the groups and classes of persons whom they primarily affect. The report of this Committee, relative to the Securities Act, with recommendations as to possible revisions and changes, will be ready for submittal to you not later than Jan. 26. Very sincerely, DANIEL C. ROPER, Secretary of Commerce. REPORT TO SECRETARY OF COMMERCE OF COMMITTEE ON STOCK EXCHANGE REGULATION. INTRODUCTION. Your Committee regards certain of the disclosures before the subcommittee of the Senate Committee on Banking and Currency during the past year and a half as imposing an imperative obligation to devise constructive measures for the prevention of those practices which have shocked the conscience of the Nation. There has been revealed the spectacle of certain leaders in the world of finance who, while standing in a fiduciary relation to the stockholders as directors in corporations, have engaged in stock market transactions which could not but redound to the ultimate disadvantage of the shareholders. There has been uncovered the presence of some pool operations which have artificially influenced the price of shares to the disadvantage of the private shareholder and in the hope of speculative gains to the participants. There has been revealed, on the part of certain persons occupying high positions in the banking and financial world, an attitude toward the interests committed to their charge which is not in accordance with those high standards and ideals which the public had been led to expect of them. There has also been revealed on the part of the general public a tendency toward unintelligent and senseless speculation which, lending itself to exploitation by high pressure selling methods and through the medium of marginal trading and some of the other practices revealed in the investigation,has stimulated security values to unsound levels from which they have inevitably receded with disastrous consequences to the whole national economy. Market fluctuations caused by the condition just outlined have repercussions which extend far beyond the stock exchanges and the circle of individuals who trade in securities. There is a relationship 926 Financial Chronicle Feb. 10 1934 from a long-range viewpoint, assuming such legislation to be desirable, between fluctuations in the stock market and unsettlement in business Is to enact a measure which will provide a system embodying the miniconditions, based on the fact that stock exchange movements are apt to be regarded by both business men and the general public as an indicator mum of specific regulatory provisions in the statute itself and the maximum of discretionary powers of regulation in an administrative agency. of underlying conditions. A violent fall in the stock market consequently may lead business men to curtail commitments and activities, thereby Your Committee believes that at this time a mechanism ought to be Increasing unemployment, while on the other hand a sharp rise in the set up which is— stock market may lead to expansion of business activity beyond the (a) Capable of collecting necessary information. bounds of sound economics. Likewise, the stock market vitally affects credit, which in turn directly affects commercial conditions. In part (b) Capable of being used to carry out a policy as it shall be developed. this is due to the practice of banks in making loans upon stock market (c) Flexible enough to permit meeting of situations, both specific and collateral. In part it is due to the fact that institutions such as savings general, as they shall have been fully disclosed and developed. banks and insurance companies hold as investments securities listed on the exchanges, and fluctuations in quotations affect the apparent This conclusion is based on the fact that while it is possible to outline financial soundness of these Institutions. When these considerations of legislation devised to correct known wrongs, it will be of little value general economic welfare are united to practices and methods which are .to-morrow if it is not flexible enough to meet new conditions Immediately either unethical or unsound, or both, the country has seen the result as they arise and demand attention in the public interest. Stock exIn a succession of financial disasters whose consequences affect the whole changes raise essentially new problems in Federal regulation. They do Nation. not present a static situation susceptible to fixed standards. On the With this spectacle before it, your Committee believes that no single contrary, it is a highly dynamic,everchanging picture, subject to untold piece of legislation, however comprehensive, will be able to deal effecand unknown possibilities and combinations that are to-day unpredicttively with all aspects of the situation which may require governmental able. The thing to be avoided is the placing of this complex and imaction. The problems lie in different fields of banking, corporation law, portant mechanism in a strait jacket. taxation, issue and sale of securities, and stock market regulation. In Your Committee has considered as an alternative suggestion that the some of these fields, a beginning at dealing with the evils disclosed has proposed enactment cover in its detailed provisions all known unfair, been made in statutes already passed, such as the Glass-Steagall Banking inequitable, and unsocial practices by express provisions with a minimum Act and the Securities Act enacted at the last session of the Congress. discretionary power of regulation by the governmental body responsible Your Committee realizes that, perhaps, the most effective way to for enforcement. deal with certain evils connected with manipulation of stock by directors While It is possible to fix by law certain basic standards as a guide and officers, issue of stock to insiders for inadequate consideration, to conduct in the matter of regulation of exchanges, these must be Incomplete publicity of corporate accounts and similar problems is by limited to minimum requirements. The point specifically is that while the requirement of Federal incorporation for corporations engaged in certain provisions might be included in any regulations, such provisions Inter-State commerce. These particular problems can, however, to should not be the only power of correction left open to an administrative some extent, be dealt with through the regulation of stock exchanges and agency, but it should have broad discretion to operate directly on stock exchange operations. Since the terms of reference under which various abuses as the future may prove them to exist. It is not proposed your Committee has been operating emphasized primarily the question that the Government so dominate exchanges as to deprive these organizaof stock exchange regulation, this report will concern itself as to ways tions of initiative and responsibility, but it is proposed to provide and means of controlling these and other evils by the method of regulatauthority to move quickly and to the point when the necessity arises. ing the exchanges. If the suggestion outlined above is sound, it follows that the agency Your Committee believes that under a realistic interpretation of the entrusted with such responsibilities must be co-ordinated with certain Constitution, stock exchange operations and transactions may be con- functions which the United States Government has already assumed. stitutionally regulated by the Federal Government through the use of The functions here outlined fall within the realm of the rapidly growing the postal power and the power to regulate inter-State commerce and its problem of corporations and corporate finance, with which the United Incidents. On this assumption, a statute would, we believe, be valid States Government has had to occupy itself increasingly in recent years. which would provide that unless an exchange operated under a license At the same time, the problem of the stock exchanges cannot be divorced Issued by the Federal Government, no quotations of prices on such from the handling of bank credit, since the interrelation of bank credit exchange, no offers to buy or sell, no contracts or communications relatwith stock speculation has been a major characteristic of stock exchange ing to the transactions on such exchange, could be transmitted through development in the past two decades. Moreover, the work of such an the mails or by means of the instrumentalities of inter-State commerce. agency should be correlated with the mechanism adopted to administer In the event of such requirement of a Federal license, there would be the Securities Act, and also it must interrelate with the machinery of the attached to the license as conditions of issue and continued enjoyment, Federal Reserve banks in connection with short-term credit and credit compliance with the regulatory requirements outlined by the statute. extended against securities. At the same time, it must be recognized This is analogous to the system of Federal regulation applied to grain that a Government agency operating in this field, and endowed with exchanges by the Grain Futures Act, and held constitutional by the wide powers to license or close exchanges, coupled with a reserve power Supreme Court. (Board of Trade vs. Olsen, 262 U. S. 1.) Other possible to license individual brokers as more fully discussed hereafter, and to sanctions are discussed below. make rules and regulations concerning a delicate mechanism like the The question remains, assuming the constitutionality of such regulastock exchange must be in the highest degree effective, non-political, tion, whether it should be imposed, what form it should take and what able to act rapidly, and at the same time so constituted as to place particular regulations should be included. responsibility to the fullest extent possible on the private bodies now In attempting to deal by legislation with these questions,two considerahandling the work of security exchanges. tions, your Committee believes, must be kept in mind. The first is that Your Committee believes that an effective solution would lie along the many practices can be turned to the abuses of greed and dishonesty which lines of establishing an administrative agency which will hereinafter be are not in themselves necessarily promotive of evil, but which, so long designated as the "Federal Stock Exchange Authority." It would be as a speculative market is permitted to exist, may serve ends approappropriate to unite in such an agency the regulation and supervision of priate thereto, and the abolition of which would cause inconvenience stock exchanges and the administration of the present Federal Securities without preventing greed and dishonesty from resorting to other methods Act. This raises the question as to whether or not the existing Federal for accomplishing their objectives. The second consideration is that Trade Commission should be availed of for such a purpose or whether a many of the practices through which greed and dishonesty operate are new Federal Stock Exchange Authority should be created. If the Inseparable from the existence of a market in which securities may be Federal Trade Commission should be availed of, divisional organization readily bought and sold, and we are thus brought face to face with the within that Commission should be provided in such manner as would question of whether this country at the present time desires, or could effectively centralize this work in a portion of the Commission and permit stand reforms so radical as to abolish such a market or curtail speculative its administration apart from the other work entrusted to the Federal practices which contribute to the liquidity of such a market. Certainly Trade Commission. Considerations pertinent to centralizing under one no good would be accomplished, for example, by leaving the door open administrative head work of this character, already begun, and work to unlimited speculation on the upside of the market, while seeking to generally concerning trade practices in industries, other than corporate curtail speculation on the downside. finance, together with the work of collecting statistics on trade and of regulation of We feel that the general objectives stock markets finance, constitute an argument that may be advanced for such a method are three: of procedure. On the other hand, technical specialization in financial (1) The specific practices of the market must be made reliable and clean, matters of this character together with practical problems of administrano matter what point of view is adopted with regard to the larger questions. tion might dictate as the wisest course the setting-up of a new and (2) So far as possible, the aim should be to try to create a condition in separate authority in which the administration of the Securities Act and which fluctuations in security values more nearly approximate fluctuations In the position of the enterprise itself and of general economic conditions— the regulation of stock exchanges would be vested. The choice between that is. tend to represent what is going on in the business and in our economic these two devices of administration can only be wisely made in the light life rather than mere speculative or "technical" conditions in the market. of a full consideration of what duties are to be entrusted to the proposed (3) The steady accumulation over a period of time of information which authority and of the efficiency and adaptability of the present Federal will afford a better basis for determining whether as wide and as dangerous machinery as now exists is really necessary to secure liquidity of security Trade Commission to perform the tasks that may be demanded of it. values. In either case, the staff of the agency must be especially fitted for their as to problem broad whether This last qu.stion involves the liquidity, tasks; and the commissioners charged with the work must be men of through the mechanism of stock markets, should be encouraged or disunusual qualifications who must hold the respect of the country; and couraged. Your Committee is not now in possession of information persuch an agency should give continuous representations to the views both mitting determination of this broad question. From one point of view of'the investing public and of the exchanges, in an endeavor to provide exchanges to It is arguable that the attempt through give liquidity to that no hasty or ill-advised regulations would be promulgated by tremendous bodies of the national wealth is an element of fragility in the inexperienced men. economic structure. Your Committee takes note of the fact that a Your Committee wishes to call specific attention to the proposal that relatively high degree of liquidity exists in the bond market apart from a respresentative of the stock exchanges should be drawn into the the existence, to anything like the same extent, of some of the practices administrative agency. It is believed desirable to provide for such of the stock market which are now the subject of criticism. Further, representation, since the field covered is decidedly technical, and the your Committee cannot but take note of the fact that the translation of technical view is a necessary' contribution on this phase of regulation. an extremely large percentage of the national wealth into the form of It should be required, however, whether a division of the Federal Trade liquid securities has widespread social effects. Commission is adopted, or a new agency is set up, that the holder of problems now, the conclusion has Without passing upon any of these any position in connection with the agency should be required to dissociate been reached that any regulatory mechanism should accumulate the himself from all business connections, and should be prohibited from necessary data to permit formulation of a national policy; and should engaging, directly or indirectly, in any market transaction, much as the likewise be implemented sufficiently so that a policy, when reached, can Secretary of the Treasury is obliged to dissociate himself from any be carried Into effect. It would, in the opinion of the Committee, be private business. conclusions as to many of at this time to reach final Should a division of the Federal Trade Commission be selected, it unwise to attempt the features of such a policy, because the deeper questions involved would seem desirable to add at least two members to the Federal Trade Commission, and designate them, with one other member, Corporate have yet to be considered in the light of full data, and because the Securities Division of the Federal Trade Commission, acting as a unit, quantitative effect of many stock exchange practices are not yet fully independent of the remaining members of the Trade Commission. disclosed. Should it be determined that a separate commission should be set up, 1. METHODS AND MECHANISM OF REGULATION. such commission should be composed of at least three members, without regard to political affiliations, appointed for a term of at least 7 years. Your Committee believes that the major problem involved in any In either case it is suggested that one of the members of the commission consideration of proposed stock exchange regulation relates to the proposed regulation is through which the to or authority should be required by law to be a man thoroughly experimechanism methods and enced in stock exchange practices. be applied. Your Committee believes that the most practical solution Volume 138 Financial Chronicle Method of Enforcing Rules and Regulations. Alternative methods by which the administrative agency might enforce such rules and regulations made by it under the statute are: (a) To provide that unless an exchange received the sanction of approval; that is, a license issued by the proposed commission or division, no quotation of prices on such exchange, no offers to buy or sell, no contracts or communications relating to the transactions on such exchange, and no securities sold or to be sold on such exchange, should be transmitted through the mail or by means of the instrumentalities of Inter-State tommerce; or (b) To privide that the administrative agency should require individual brokers, members of stock exchanges, to take out a Federal license as a condition of permitting the stock exchange to continue as a Federally licensed body. Your Committee does not consider it desirable to require the licensing of individual brokers. There is a distinct danger that such a system would break down the controls already exercised by the stock exchanges through their business-conduct rules, which operate or can be made to operate with summary speed and effectiveness. If brokers were licensed, It would inevitably come to be thought that the proper method of disciplining a broker would be the revocation of his license by the governmental authority. An exchange might well hesitate to deny its privileges to a broker whose license was still in full force and effect. Inevitably, however, the process of revoking a license would be much less summary than the action of a business conduct committee of the exchange. The proceeding would take place at Washingt n and not locally. To some extent it would have to fqllow more or less protracted forms of judicial procedure and would have to be subject to review in the courts. All these factors, while cutting the ground from under the effectiveness of the exchange's own disciplinary procedure, would substitute a procedure slower and less certain of accomplishing nsults. It seems distinctly better, in the opinion of your Committee, to stimulate the exchange to further disciplinary activity by holding it to a high degree of accountability for the conduct of members. On the other hand, there is a danger in relying exclusively, as a sanction, on the power of the Federal Stock Exchange Authority to revoke the license of an exchange and thereby close to it access to the mails and to inter-State commerce. The consequences of closing an exchange are so far reaching so many innocent persons would inevitably be injured by such a step, that it might well be that the Stock Exchange Authority would be so reluctant to deprive an exchanv of its license that the regulations and orders of the authority might come to be disregarded. This could in part be obviated by providing that in addition to the extreme penalty of revoking the license, the authority might impose upon the exchange the minor penalty of a fine. The authority might also be given Power to require an exchange which had violated a condition of its license to change any or all of its officers and (or) the membership of all or any of its governing boards or committees. It might well come to pass, however, that the application of any of these measures, short of the final and extreme one of closing the exchange, would prove ineffective to prevent practices on the exchange which were violative of the terms of its license. If an exchange, through weakness of its organization or through recalcitrancy, proved unable or unwilling to enforce the rules and regulations required by the Federal Authority ass condition of its license, there would seem no other recourse than to bring the power of the Authority to bear directly upon the individual members of the exchange by placing them under limns?, conditioned upon observing the practices in question. In other words, it is suggested that the statute provide that when the Federal Stock Exchange Authority had found, after due notice and hearing, that an exchange had violated a condition of its license by failing to take proper disciplinary action to enforce the rules and regulations required by the license, then and in such event the Stock Exchange Authority might require that no broker trading upon the exchange should continue to do so or should enjoy the facilities of the mails and of inter-State commerce in connection with such trading, unless he received a license from the Stock Exchange Authority. In issuing such licenses, the Authority could refuse to do so to the particular brokers who had violated the proper regulations of the exchange and whom the exchange had failed to discipline. The Stock Exchange Authority, upon satisfying itself that the particula exchange in question would henceforth properly abide by the terms of its license, might thereafter withdraw the requirement that the individual brokers on that exchange should be licensed, and might reinstate the exchange. Your Committee has considered as an alternative the suggestion of Federal incorporation of exchanges. Your Committee has found no advantage in the incorporation of stock exchanges, whether it be directed toward correcting the situation as regards either the conduct of members or of those using the facilities of exchanges or the listing or unlistig of securities, which cannot be snore simply and effectively remedied by the licensing provisions herein proposed. Furthermore, your Committee has reached the conclusion that the incorporation of exchanges presents disadvantages over the licensing method sufficient to warrant the conclusion that the incorporation plan is unfitted to meet the needs of the situation. For example, at the present time most exchanges as unincorporated associations provide in their constitution that elected members must pledge themselves to abide by the decision of the governing board as final arbitrator of charges of infringement of rules and regulations. The penalties that may be inflicted by this board for violation of any exchange rule or regulation by members range from temporary suspension to permanent expulsion. Usually, after charges are made against a member for infringement of rules or of improper conduct to the governing board by one of its committees, and the charges against the accused member provided him in writing, a trial is speedily held and a verdict reached by a majority of governors. The whole proceedings, including the infliction of penalties, are disposed of in a very short time, depending upon the evidence and the seriousness of the charge, judicial review being limited In general to the fairness of the trial, and not reopening the case on its merits. It ha been pointed out by your Committee throughout this report that correction of abuses in exchange practices is a matter that must be carried out speedily, since delay, once a decision has been arrived at, may be disastrous. It is this very point that constitutes the strongest argument arainst the incorporation of exchanges unde • the normal statutory methods for incorporating exchanges. Were exchange incorporation to be introduced it would allow members to have their cases adjudicated in the first instance in a court of law rather than, as at present, by exchange tribunals. This would mean that every violator of exchange rules and regulations would be automatically provided with with a lengthy opportunity to indulge in improper practices, since formal judicial review would probably require many months before actual trial, with the possibility that delays through technicalities might greatly protract the proceeding. In the meantime, the public might suffer greatly since the complained-of condition might involve the question of 927 the member's solvency, and by the time insolvency could be formally proven in the courts, assets might be depleted almost entriely. Still another disadvantage to formal legal procedure again...t members for exchange violations is that under the present system charges against members may be based not on specific rules and regulations, but upon what is sometimes referred to as conduct "inconsistent with just and equitable principles of trade." In such instances, while the evidence may be of a less formal nature than that required as legal evidence, still to a board of governors or committee composed of exchange members intimately acquainted with a complicated mechanism the evidence may be so conclusive as to warrant immediate disciplinary action. In such instances lengthy acquaintance with the party or parties involved and their previous conduct and possibly past violations might be factors which only those possessed of special equipment of judgment would fully appraise in proper relation to the improper conduct charged. DIVISION OF POWERS AND CO-ORDINATION WITH FEDERAL RESERVE BANKS. In one important respect the work of the proposed administrative agency interacts with a quite different agency so closely as to seem to require special treatment. Since no regulation of stock exchange practices can avoid the subject of margin requirements, the administrative agency is brought fairly in contact with the question of short-term credit. The lending of money to brokers or upon securities in connection with margin transactions is one of the great problems in the banking structure. Under the terms of the Glass-Steagall Act (act of June 16 1933, Chapter 88, Section 3A, U.S.C.A., vol. XII, Section 301), the Federal Reserve banks in each district are now charged with the duty of "ascertaining whether undue use is being made of bank credit for the speculative carrying of or trading in securities," but their sole power is to report the facts to the Federal Reserve Board, and the Board may then, in an extreme case, suspend any member bank from the use of the credit facilities of the Federal Reserve System. It would seem proper to give to the Federal Reserve banks of their districts power, in consultation with the proposed Stock Exchange Authority to meet situations directly, rather than indirectly; and your Committee accordingly would suggest that the Federal Reserve Bank of any district, together with the proposed agency, should be empowered to prescnbe margin requirements; and the Federal Reserve Bank of the district should be permitted to warn or suspend from the credit facilities of the Federal Reserve System, any bank which might make loans to brokers who violate such requirements. In other words, in this regard it is believed that joint action by the Federal Reserve Bank of a district and the proposed Stock Exchange Authority should be required, so that the action of the agency would be cross-checked in the credit field by the principal agencies handling short-term credit; and that the Federal Reserve banks of each district should be implemented with added power, in conjunction with the proposed agency. An incidental advantage might be that the Reserve banks in each district could thus steer credit out of the stock market when desirable and toward commercial business more effectively than can now be done. As an added advantage, this brings the proposed Stock Exchange Authority into close relationship with the Federal Reserve banks, who are nearer the practical problem than a Washington agency might be, acting alone. Regulatory Requirements. In the event a Federal license should be required of all exchanges as above proposed there would be attached to the license as a condition of issue and continued enjoyment the following requirement, viz.: That all exchanges desiring a Federal license must adopt and submit to the proposed Stock Exchange Authority for its approval, rules designed to comply with the regulatory requirements outlined by the proposed statute and with such rules and regulations as may be promulgated by the proposed Stock Exchange Authority thereunder. Furthermore, as a condition of retaining a license an exchange would be required to abide by and enforce such regulatory requirements and such rules and regulations. Any exchange would be permitted to adopt any other or additional rules and regulations not inconsistent with the regulatory requirements outlined by the statute or the rules and regulations promulgated by such proposed Stock Exchange Authority. At the present time there is a wide disparity in the standard of accountability of members of exchanges to their governing boards. It might be said that there are almost as many degrees of strictness and conformity to desirable standards as there are operating exchange institutions. The same might be said of the requirements demanded of corporations listing their securities upon exchanges—the requirements of some being increasingly praiseworthy and setting the standard for the rest, although not yet completely satisfactory, while others are so lax as to provide but little protection to the public in the way of adequate and official Information from listors. It is the suggestion of this Committee that the proposed Stock Exchange Authority shall be authorized by the statute to develop and establish by its rules and regulations standards for all exchanges, their members and security listors, which shall surpass those now required by any exchange in order to protect those using the facilities of exchanges from the improper practices which have been revealed or which may, at a later date, be found detrimental by the Government administrative authorities. The suggested procedure is as follows: In order to entitle itself to a license, an exchange must submit its rules to the Stock Exchange Authority, above described. These rules must contain provisions embodying as a minimum at least the regulatory requirements suggested hereinafter and must be in a form which satisfies the Authority that they are at least as stringent as the standard set out in the statute, although they may be more so. If at any time, on complaint or otherwise, the agency is satisfied that a particular licensed exchange is not vigilantly or effectively enforcing any of the rules in question by expulsion, suspension, fine or otherwise of its members, such exchange, after a hearing, if found guilty, shall be deprived of its license, or suspended, or required to pay a heavy fine, or to change all or any of its officers or governing boards or committees. Should the Stock Exchange Authority feel it too dangerous to compel action by an exchange through depriving it of its license, the reserve power to license brokers, as above outlined, could, if necessary, be invoked. It is hoped, however, that co-operation with exchanges would work out to a point which would make this unnecessary. Your Committee is of opinion that the non-legal, quick acting, non-reviewable disciplinary measures which an exchange can take, can never be adequately replaced by the slower moving processes of an administrative agency or the courts, and the objective should be to preserve and utilize these private mechanisms to the fullest degree possible. Appropriate procedure for appealing to the courts from the orders of the Stock Exchange Authority must, of course, be devised The appeal should lie directly to the United States Circuit Court of Appeals for the circuit in which the exchange is situated. The review should be limited 928 Financial Chronicle primarily to questions of law, findings of fact of the Stock Exchange Authority being treated as final, so far as this may constitutionally be permitted. Also some procedure should be devised for enforcing through the courts the orders of the Stock Exchange Authority in a manner analogous to that by which the "cease and desist orders" of the Federal Trade Commission are enforced. II. SUBSTANTIVE REGULATION. The considerations which have led your Committee to recommend a method of stock exchange regulation by broad discretionary authority vested in an administrative agency rather than through detailed and specific statutory prohibition and requirement of particular practices will, your Committee believes, be made abundantly clear when we turn to consider the actual problems raised by the different types of exchange practices in connection with which abuses have been disclosed. So many considerations turn out to be involved in these practices, depending upon the purposes for which, and circumstances under which, they are employed, that an attempt to establish hard and fast rules would raise the possibility not only that unforeseen interference with business operations might result, but actually the consequence might be to originate new and unforeseen evils. Certain of these specific problems will now be taken up. 1. Poole.—Many of the abuses which have been disclosed have occurred in connection with so-called "pool operations." In attempting to propose regulations which would eliminate the evils of such operations, the difficulty is at once encountered that pools are of different kinds and are conducted for different purposes and with different results. The speculative pool, which is operated for the purpose of "rigging" the market to the detriment of the public and unduly enhancing the price of a security in order that the members of the pool may profit by selling the security at the enhanced price, or which operates to depress a security in order that the insiders may buy at the lower price and then resell at a profit, constitutes the chief evil for which a remedy is demanded. It is true, however, that certain joint accounts or syndicate operations in the market are conducted for purposes which are considered by many experts to be indispensable to accomplish certain ends which are legitimate under established methods of doing business in this country. This is the case, for example, with the so-called "distribution pool or syndicate," which, when honestly conducted, creates an orderly market for securities during the period of the distribution of a new issue. For example, let us suppose that a corporation has to meet a maturing obligation of $5,000,000. It decides to issue securities. It must know definitely that it will have the money before the due date. It, therefore, enters into a firm commitment to sell $5,000,000 of new securities to underwriters at 97, who offer them at 100 to the public. Naturally, If all the securities were at once thrown back on the market by the purchasers, the price would sag. And if the quoted price sags the underwriters cannot dispose of the securities off of the exchange at 100. So the underwriters support the market by trading in the securities on the exchange until the distribution is completed. This has been criticized on the ground that the public could have bought at a lower level if the underwriters did not support the market. If the security is properly priced, however, this transaction is not properly subject to criticism, since otherwise no underwriter could distribute at the public offering price, and if he could not, he could not have afforded to enter into a firm commitment to pay to the corporation the money and the latter, if it had no underwriting and had not completed its sales of securities before its maturity, might default. Naturally, such transactions may be perverted, from their normal uses by "rigged" quotations on the exchange so that when the syndicate stops trading, that is "pulls the plug," the price sags and the public has a security which is selling several points below the public offering price. Such a sag In price, however, may in some cases be due to poor distribution of the security, 0.e., it was sold to too many market traders rather than investors, so that the sales exceed the demand rather than to any intrinsic defect in the security. The foregoing considerations, which may be advanced in justification of the so-called "distribution pool," rest, of course, on an assumption that the practice of corporations in obtaining money by selling a block of securities at a firm commitment to underwriters or wholesalers who will then redistribute to the public is a sound practice. Of course, it might be urged that the corporation could market its securities directly to the public or through brokers on a commission basis. Even, however, should it be felt desirable to enforce the substitution of the latter method of financing for the one now prevailing, substantially the same difficulty In distributing the securities without supporting the market during the period of distribution would still have to be confronted if the, corporation was to be assured of a definite sum resulting from the sale. Suppose, for example, the corporation undertook directly to market an issue of 10,000 shares of $100 per preferred stock at par. On the first day it sold 1,000 shares. Suppose some of these shares came into the possession of market traders who resold them in the market on the following day at 98. The corporation would obviously be unable to continue to sell any shares at 100 unless it went into the market with an offer to buy at 100 and thus brought the price up to that figure. Just as arguments may thus be advanced for the so-called "distribution pool," there may be a similar argument for the operation of a syndicate to aid in the orderly liquidation of a block of securities which, if thrown upon the market without support, would demoralize the market and depress prices to the disadvantage of the investors in the securities in question. It has heen said that such a syndicate is not necessary, in that such securities could be fed out slowly. This is true if there is no demand for sudden liquidation by creditors, banks, din, or in order to settle an estate. If there is such a demand, a syndicate may perform a useful function. The problem of the regulation of pool operations lies in the necessity of dis inguishing between the legitimate and the illegitimate. There can be no question that there are certain types of pool operations which not only do not serve any legitimate function, but which are in fact a definite social menace. As has already been indicated the difficulty comes in defining a legitimate and an illegitimate pool. Similarly, the question of the proper method of dealing with illegitimate pool operations raises difficulties. If, for example, the method of publicity , is chosen, there is a danger that the publicizing of the fact that a pool is operating in a security may act as a stimulant to lure speculators into the market and thus increase the very evils of excessive speculation, which It is hoped to remedy. Furthermore, many pools of an illegitimate speculative character are conducted off the regular exchanges and therefore in drafting any regulations great care must be taken to see that the regulations are not of such a sweeping character as simply to drive pools from the exchanges, where they can be regulated, into the unorganized markets where they are largely beyond the reach of regulation. Your Committee therefore believes that careful consideration should be given by the proposed Stock Exchange Authority to the question of what type of regulation can be effectively adopted to prevent illegitimate Feb. 10 1934 speculative pools. It should also require, in the case of all pools or syndicates, that a copy of the syndicate or pool agreement, together with the names of the participants and the amounts of their participations, should be filed with the exchange and made available for inspection. The exchanges should furthermore be required to observe carefully the operation of all pools and syndicates so that they may be properly controlled. The Stock Exchange Authority should give consideration to whether or not it should establish a rule that all public quotations of securities In which a syndicate or pool is operating should be marked with some appropriate symbol to designate that fact. Of course, the mere publication of quotailons with such a symbol may prove cf little use or may even be misleading insofar as other essential information, such as the size and scope of the pod, the extent of its operations, and its general objectives, cannot be made available to the public by means of such a marked quotation. 2. "Wash Sales" and "Matched Orders."—An accompaniment of speculative pool operations is the use of so-called "wash sales" and "matched orders." The effect of this method of using the exchange machinery is most distastrous to the public for it creates the semblance of legitimate activity in securities which does not in fact exist. It is a maxim with speculative pool operators that the best way to advertise a stock to gain a speculative public following is to show increasing turnover in volume of sales with increasing prices. Through the use of "wash sales" and "matched orders" such fictitious market situations are created as to warrant the absolute prohibition of this practice. That this form of manipulation should be abolished has been recognized by some exchanges since they have promulgated rules to this effect. 3. Margin Trading.—No attempt to deal with the abuses of stock exchange operations can omit the subject of margin trading. The principal evil connected with stock exchange operations is undoubtedly, in the opinion of your Committee, excessive speculation, that is to say, speculaticn beyond the point where it promotes and facilitates trade, but where, on the contrary, it stimulates and exaggerates the normal swing of economic tendencies. So long as excessive speculation prevails, efforts to protect the buying public who trade in securities are bound to be unavailing. The remedy must be to curtail the excessive elements. Persons who seek to profit by entering an excessively speculative market and who are not adequately equipped to protect themselves, cannot be protected from loss by governmental action. It must always be recognized that the average man has an inherent instinct for gambling in some form or other. It has been recognized as a social evil, always inveighed against since early times. No method of combatting it has ever been completely successful. If abolished in one form it seems always to crop out in another. In America the man of average income has perhaps turned to the stock exchange because of the prohibition of various forms of gambling. If the speculative tendencies of our people could be turned into other channels, this mstinct might be satisfied without the far reaching economic consequences which come from widespread public speculation in the stock market. The real evil in this situation is that the resulting speculations affect the national economy. This evil also brings in its train the losses to investors against which so much complaint is made. If, as your Committee believes, it is desirable to curb excessive speculation, one of the principal points of attack must be the restriction within sound limits of margin trading. From the information at hand, it would seem desirable that accounts should not be carried on margin unless the customer's equity was at least a minimum amount at inception in order to prevent the risking of savings by individuals who are unable to cope with the hazards of the market. Further, margins of at least a stated percentage of the purchase price of each security purchased might be required; and the requirements might turther be enforced by requiring that banks confine their loans to brokers who observe these requirements. To some extent margin requirements may impair liquidity of securities on exchanges; but the social cost of liquidity has yet to be explored, and should be explored by the proposed Stock Exchange Authority. Further, liquidity as affected by margin requirements, changes in importance from time to time,and it seems hardly desirable to freeze requirements in the provisions of a statute. Powers, accordingly, should be given to the Stock Exchange Authority to devise rules and regulations on this subject from time to time after appropriate studies. If it be said that such powers are too broad for a governmental agency to have, we may merely point out that such powers are possessed now by the purely private boards of governors of the various exchanges, and indeed, that substantially similar requirements could be imposed (did they desire to do so) by the clearing-house banks of the financial centers. Provided tqat the Stock Exchange Authority acts in conjunction with the Federal Reserve Bank of the district, it would seem certain that any regulation imposed would be informed by experienced judgment,having in mind the significance of the decision both with respect to securities and security levels, and with respect to short-term credit and the banking situation. 4. Specialists.—Your Committee has considered the functions of the specialist as known on the modern stock exchange. The specialist apparently performs a useful and necessary service in the functioning of the security marketing activity of the exchanges in executing other than market orders. There have, however, been revealed abuses by such specialists of their highly confidential position such as revealing the position of their book to the detriment of their principals; buying or selling for their own account when more advantageous prices might have been obtained for or from others; and participation in pools operating to "rig" the market in a particular security. In view of such abuses, it SEECTIS necessary to empower the proposed Stock Exchange Authority to deal with a number of problems :elating to the specialist by appropriate rules and regulations. Among these are— (1) His power to trade for his own account, and if so, on what terms. (2) Whether the information in his confidential book shall ever be disclosed, and if so on what terms. (3) Whether the activities of a specialist might not be entrusted to a clerk of the exchange whose activities should be confined purely to executing orders. As to these, your Committee does not feel that it has adequate evidence to suggest specific legislation; but feels that they are proper subjects for rules and regulations by the proposed Stock Exchange Authority. On the other hand, there are certain practices by specialists which it seems clear should be prohibited. Your Committee, therefore, suggests that among the rules and regulations to be promulgated by the Stock Exchange Authority should be a rule forbidding any specialist, or any firm of which a specialist is a member, to participate directly or indirectly in any pool,j oint account, or syndicate, trading in a security in which he is a specialist; and also a rule requiring that a specialist, whenever stating a bid or offered price, shall indicate whether it is his own or another's order. 5. Short Selling.—One of the things most criticized in connection'ivith stock market operations is the practice of short selling, and many people have advocated that it should be abolished. Volume 138 Financial Chronicle No satisfactory studies are available on the results of short selling, as to whether it accelerates the decline or whether "short covering" acts as a stabilizing influence on the downside of the market. It seems clear that odd-lot operators could not continue to function apart from short selling. Whether the abuses of the practice outweigh its merits is still a matter of opinion. Your Committee, therefore, recommends that no curb be placed on short selling as such, but that the Stock Exchange Authority be given power to require exchanges by appropriate rules and regulations to prevent abuses of short selling of such a character as to demoralize the market. Furthermore, the Stock Exchange Authority should have power in times of grave temporary emergency, acting in conjunction with the Governor of the Federal Reserve Board, to suspend short selling on any exchange or exchanges for a limited period. The Stock Exchange Authority should also require that each exchange shall collect and publish with as great promptness as possible at regular Intervals statistics with respect to short selling, including, if possible, short sales made and covered on the same day, in order that the effect of short selling from time to time may be observed and studied. 6. Corporate A counting and Practices.—Your Committee believes that each licensed stock exchange should be required to adopt listing requirements for the various classes of issues listed on the exchange which will give to the public full, complete, and pertinent information with respect to such securities, both at the time the securities are admitted to trading and periodically thereafter. As a minimum it believes that balance sheets and income accounts on both a corporate and consolidated basis should be required at the time of listing certified by independent certified public accountants and that furthermore, each corporation whose securities are listed should be required, subject to appropriate rules and regulations of each exchange approved by the Stock Exchange Authority, to observe the following: (a) To have its accounts examined annually by independent certified public accountants, wherever feasible, and to file copies of such balance sheets and income accounts with the stock exchange and to transmit copies thereof to its known security holders. Except that corporations, whose accounts are subject to control by the Inter-State Commerce Commission, may, in lieu of certification by an accountant, state that the accounts filed and transmitted are the same as those which have been filed with the Inter-State Commerce Commission and are in conformity with its rules. And except that banks, whose accounts are subject to control by the Comptroller of the Currency or the Federal Reserve Board, may include in lieu of certification by an accountant a statement that such accounts are the same as those which have been filed with the Comptroller of the Currency or the Federal Reserve Board, as the case may be. (b) To file with the stock exchange and to release for publication at quarterly intervals, unless the exchange, subject to rules and regulations of the Stock Exchange Authority, shall permit longer intervals, statements of its condition and Income for the preceding quarter, and in the cas of corporations subject to regulations by the Inter-State Commerce Commission such statements shall be the same as those filed with the Inter-State Commerce Commission, or in conformity with statements so filed. (c) To notify the stock exchange and release for publication any purchase or acquisition of its own securities and that it will not reissue such securities without due notice to the stock exchange. (d) Not to participate in, or finance directly or indirectly, any pool organized for the purpose of trading in Its own securities, except in connection with the original distribution of such securities, in which event full publicity shah be required. (e) To require each director and officer, under penalty of not being eligible for re-election, not to reveal, knowingly, to any pool (except a pool organized in connection with an original distribution of the company's own securities) any information not available to the public without at the same time releasing such information to the public. (f) To require every director and officer, under penalty of not being eligible for reel ction, not to participate directly or indirectly In any pool designed to "rig" the market or to artificially raise or lower the price of such securities, with a view to selling at such artificially enhanced prices or buying at such artificially depressed prices for personal profit. (g) To require each director or officer to file with the secretary of the corporation within 15 days after the close of each quarter-yearly period a statement of his transactions in the securities of the company, which statements shIll be open to inspection by any security holder. (h) To report to the stock exchange within 48 hours after the granting thereof of any option given upon its stock, together with a copy of such option, which shall be open to inspection by the public and not to permit any stock to be taken down under such option until 24 hours after it has been filed with the stock exchange. (I) To report to the stock exchange within 48 hours of the granting thereof or within the same time after it has acquired knowledge thereof, any agreement to which it is a party or of which it has knowledge which has been entered Into for the purpose of "pegging" the price of any of its securities or which has been entered into for the purpose of artificially raising or lowering the market prices of its securities. (j) To abide by such other rules as the stock exchange may promulgate from time to time in connection with the listing of securities, preparation, and publication of corporate accounts, J:c. Failure to observe any such requirement shall permit the exchange to strike from the list. It is considered fundamental that disciplinary power over the members and over security issues shall be left primarily to each exchange, each exchange to be responsible to the Stock Exchange Authority for the enforcement of its regulations. If this is not done the morale of the exchange may be destroyed and the Stock Exchange Authority overwhelmed with the policing of the alleged violations on all of the exchanges of the country. 7. Publicity, Customers' Men, &c.—Inasmuch as your Committee believes that the main evil to be corrected is excessive speculation and the resultant unsound price levels and the menace to our economic life resulting therefrom, it believes that adequate provision should be made by each exchange for the control of all publicity, advertising, market letters, soliciting of accounts, and other promotional activities by the members of each exchange. Inasmuch as a large number of institutions which are non-members of the exchanges also avail themselves of the ticker or quotation service of the exchanges, it seems also desirable to require that each exchange include in its contract for the furnishing of such ticker or quotation service that the recipient thereof agree to be bound by such appropriate rules as to margin accounts, publicity, customers' men, soliciting of business, peddling of securities, 8:c., as such exchange may deem desirable subject to the supervision and approval of the Stock Exchange Authority and that violation of such rules will give to each exchange the right to cancel such ticker or quotation service. The activities of customers' men in recommending the purchase or sale of certain securities with the idea of increasing the commissions of the firm by which they are employed without regard to the welfare of 929 the customer, has received a considerable amount of deserved criticism. Your Committee would recommend that the proposed Stock Exchange Authority require rules by all exchanges which wiil govern the activities of customers' men. Certainly the following should be Included among such rules: (a) All customers' men to be employed for fixed terms on fixed salaries and that any compensation paid them on the basis of business originated by them be absolutely prohibited. (b) No customer's man to be permitted to participate in a pool or to recommend to any customer the purchase or sale of any securities on which he or his firm holds an option without full disclosure of such facts. (C) No customer's man to be permitted to recommend the purchase or sale of any security in which he or the firm for which he is employed has an interest, without stating that fact to the customer. 8. Segregation of Brokerage and Other Forms of Business.—Your Committee has given careful consideration to various proposals that the business of utderwriting and retailing securities should be completely divorced; that those who underwrite securities and who are members of a stock exchange should not be permitted to carry margin accounts for customers; and that those engaged in the retailing of securities should not be permitted to be members of any stock exchange. The various activities in which the members of the stock exchange engage, such as underwriting, acting as broker, carrying margins, 8,:c. are all closely intertwined in our financial structure. Any such proposed segregation should not be accomplished before we are in a position to calculate its cost and to foresee its repercussions. As an abstract matter, the segregation of these various activities has much to commend it. Such an important decision as this can hardly be left to the discretion of an administrative authority. Segregation, if it is to be accomplished, must be accomplished by legislative fiat. Your Committee finds that there is not yet available sufficient information to enable it to recommend such a far-reaching decision. It recommends, therefore, that the Stock Exchange Authority be charged with the task of assembling information to permit such a decision to be made intelligently and with assurance by a later Congress. 9. Examination of Books, and Requirement of Periodical Reports by Members.—Each exchange, as a condition of being licensed, should be required to make proper provision in its rules for the right of an exchange to have access at all times to the books of the firms trading upon such exchange, and should also include in its rules a requirement for periodical reports to the exchange by firms trading upon it as to their financial position, as well as necessary information concerning their transactions on the exchange. For the purpose of collecting the necessary information for the formulation of a proper regulatory policy, as well as for enforcement purposes, it should also be provided by the statute that, as a condition of being licensed, an exchange must include in Its rules a provision giving to the proposed Federal Stock Exchange Authority a right, in the event it cannot obtain information through the exchange, to require such information directly from the individual brokers, with the reserved right to examine their books for such purpose. 10. Unorganized or "Over-the-Counter" Markets.—No study of regulation of organized stock exchanges would be complete without giving consideration to the problem of the unorganized or "over-the-counter" markets. Because of their importance, and because of the fact that certain transactions and practices could still be engaged in on the "overthe-counter". markets which, under the proposed regulation, would be prohibited on the organized exchanges, your Committee has considered whether and to what extent it would be possible to regulate such "overthe-counter" markets. On the basis of the consideration which it has been able to give to this subject, your Committee has come to the conclusion that the problem of the "over-the-counter" markets cannot be satisfactorily dealt with by Federal Governmental action. It has not yet found any method of controlling such markets which it considers feasible or which could be applied without building up a Federal policing agency on such a scale as to be impracticable. It is, therefore, not prepared to recommend any Federal legislation for the regulation of such markets, but, if a further study on this subject should be considered desirable, your Committee will undertake to proceed therewith. CONCLUSION. This report represents the composite views of the several members of the Committee, the individual members having endeavored to subordinate their personal viewpoints in order to arrive at unanimity. While some of the members have certain reservations on some of the points discussed, all the members unite In the recommendations herein contained and are in general accord with the views herein expressed. Respectfully submitted, JOHN DICKINSON, Chairman A. A. BERLE Per JOHN DICKINSON (see below) ARTHUR H. DEAN J. M. LANDIS HENRY J. RICHARDSON The changes in the foregoing report made after it had been read by Mr. Berle were read over the telephone to him and approved by him and he authorized me by telegraph to append his signature, as follows: Hon. John Dickinson, Asst. Secretary of Commerce, Department of Commerce: Referring to text to proposed report recommending legislation regulating stock exchanges, kindly affix my signature, I will sign original when In Washington next week. Regards, A. A. BERLE, JR. New York, N. Y. Jan. 23 1934. Memorandum to Secretary Roper From: The Committee on Stock Exchange Regulation Subject: Report No. II. Regulation of Commodity Exchanges. Your Committee has been requested to look into the question of regulation of commodity exchanges. As this is a question which primarily concerns and is at the present time under the supervision of the Department of Agriculture, your Committee made contact with Secretary Wallace, who suggested that the Committee meet with Dr. J. W. T. Duvel, Chief of the Grain Futures Administration, and Dr. Nils A. Olsen, Chief of the Bureau of Agricultural Economics. Your Committee finds that both Dr. Duval and Dr. Olsen have prepared and are ready to submit bills amending and extending the existing legislation with regard to commodity exchanges. The bill submitted by Dr. Duvel has two principal objects. First, to extend the present Grain Futures Act and make it the vehicle for the control of all commodity exchanges. While the bill proposes to add only one commodity (cotton) to the seven commodities (wheat, corn. oats, rye, barley, flax and grain sorghum) now covered by the Act, it is so written as to apply to any other commodity which may be brought within its terms by subsequent legislation. The second object of the bill is to strengthen the provisions of the present Act. The bill proposes to place under Federal license all commission merchants who operate on the exchanges and handle orders for customers. Dr. Nils A. Olsen, Chief of the Bureau of Agricultural Economics, which is at present in charge of the administration of the Cotton Futures Act, submits a bill designed to strengthen that Act and dealing exclusively with cotton. Dr. Olsen also presents a bill dealing with other agricultural commodities, except cotton and grain. Dr. Olsen's arguments in favor of separate bills covering cotton and other agricultural commodities are: • 930 Financial Chronicle 1. Separate bills would divide the opposition which the legislation attempts at regulation of trading in commodity futures will encounter; and, 2. The character of the various exchanges and the services which they render differ considerably with different commodities. Dr. Olsen proposes a scheme of regulation which requires Federal licensing for both the exchanges and their members. The Olsen bill would preserve the independence of the present agency administering the Cotton Futures Act and also the independence of the other and different agency administering the Grain Futures Act. Dr. Duval's bill, by bringing cotton within the scope of the Grain Futures Act, would make the existing Cotton Futures Act unnecessary. Your Committee has reached the following conclusions: 1. That before either or both of the proposals submitted by Dr. Olsen and Dr. Duvel, respectively, are introduced in Congress, they should be harmonized so that two inconsistent proposals will not be placed before Congress at the same time. 2. That the problems of stock market regulation and the regulation of commodity exchanges, while both involving many of the same abstract issues, are, nevertheless, essentially different both as to the concrete problems with which they deal and as to the groups and classes of persons whom they primarily affect, and, therefore, that any attempt to include regulation of commodity exchanges with regulation of stock exchanges in the same legislation or under the same administrative supervision would not be regarded by your Committee as desirable. 3. Your Committee recommends that the problem of working out a harmonious solution between the proposals of Dr. Olsen and Dr. Duvel, being primarily a matter of agricultural concern, would be most effectively left to the Department of Agriculture. Respectfully submitted, JOHN DICKINSON, Chairman A. A. BERLE, JR. ARTHUR H. DEAN, J. M. LANDIS HENRY J. RICHARDSON Feb. 10 1934 Margining of Stock Ruled as Lending by Montreal Bankruptcy Court Finds it Same as Giving Actual Cash Action Taken Under War Revenue Act. From the Toronto "Globe" we take the following (Canadian Press) from Montreal, Jan. 23: Laying down the principle that it is actually lending money for a stockbroker to carry stocks on margin for customers, Mr. Justice Louis Boyer, in Bankruptcy Court here, to-day, gave Judgment in favor of the Department of National Revenue that will have the effect of ranking the department as an ordinary creditor of the brokerage firm of McDougall and Cowans in respect of $95,749, allegedly due in taxes for marginal advances. Action was taken by the counsel for the department under the special War Revenue Act, which stipulates a tax of two cents per $50 for firms or individuals, excluding banks, who loan money. The respondents were McDougall and Cowans Holdings, Limited, and the partners in the former McDougall and Cowans brokerage firm, Percy P. Cowaias, Purvis McDougall, Alexander E. Christmas, Russell Cowans, Harold L. Conyers and Richard J. Dawes. "It is established beyond doubt that the bankrupts charged the said tax to their clients in conformity with the statute," his Lordship said in his Judgment. "They kept in their books a special account for the tax and they collected under this heading $141,828, of which $46,079 was reimbursed by them to institutions that had paid it to the Government, leaving an unpaid balance of $e5.749." Report on Stock Exchange Regulation Transmitted to President Roosevelt by Secretary of Commerce Roper Recommendations Would Require Exchanges to Obtain Federal License Also Call for Establishment of Administrative Authority for Enforcement of Regulations Rules of Administrative Agency Would Govern Pools, Margin Trading, &c. Report Also Proposes Division of Stock Exchange Powers and Co-Ordination with Federal Reserve Banks Views Regarding Commodity Exchange Regulation. There has been made public this week the report prepared at the instance of President Roosevelt, embodying recommendations incident to Federal legislation for the regulation of Stock Exchanges. As we noted in our issue of Jan. 27, page 599, the report was transmitted to President Roosevelt by Secretary of Commerce Roper on Jan. 23, and on Jan. 26 the President fowarded the same to the respective chairman of the Senate and House Committees on Banking and currency—viz. Senator Fletcher and Representative Steagall. The report was prepared by a Committee, to whom the study of the problem of stock exchange regulations was delegated by Secretary Roper. This Committee consisted of John Dickinson, Assistant Secretary of Commerce, Chairman; A. A. Berle Jr., one of the Roosevelt "brain trust"; Commissioner Arthur H. Dean, New York lawyer; James M. Landis, Federal Trade Commissioner and Henry J. Richardson, a Washington lawyer. Along with the report on Stock Exchanges another report on communications was transmitted on Jan. 26 by President Roosevelt to the Senate and House Committees on InterState Commerce; reference to this was made in our issue of Jan.27, page 599. A White House statement on Jan. 26 was issued as follows on the transmission of the documents: The President to-day transmitted to the Hon. Duncan U. Fletcher, Chairman of the Banking and Currency Committee of the Senate, and to the Hon. Henry B. Steagall, Chairman of the Banking and Currency Committee of the House, the reports recently given him by the Secretary of Commerce, as Chairman of an interdepartmental committee created to study the problem of Federal legislation looking to the regulation of the issuance and sales of securities in interstate commerce. The reports presented by Secretary Roper, as head of the interdepartmental committee organized to study communications, also were transmitted by the President to Senator Clarence C. Dill, Chairman of the Inter-State Commerce Committee of the Senate, and to Congressman Sam Rayburn, Chairman of the Inter-State and Foreign Commerce Committee of the House. In transmitting these reports to the committees, the President called especial attention to the fact that the reports were submitted for the information and consideration of the committees and were not intended as recommendations either to the committees or to the Congress. Secretary Roper also gave the President a statement on communications prepared by Mr. David Sarnoff. President of the Radio Corporation of America. The Secretary requested that Mr. Sarnoff's statement be transmitted as an appendix to the report on the same subject, prepared by the interdepartmental committee. The Sarnoff report was forwarded to the committees in accordance with Secretary Roper's request. In a letter to President Roosevelt in which he transmitted the report on Stock Exchanges Secretary Roper pointed out that the Committee "has not undertaken to prepare a draft of a bill carrying into its effect its suggestions." Secretary Roper also stated that since the study of stock exchange regulation had begun, the Banking and Currency Committee of the Senate has been conducting an investigation along the same general lines and Secretary Roper's Committee had endeavored to keep in touch with Senator Fletcher's Committee in a co-operative manner. The major points and recommendations covered in the study of Secretary Roper's Committee are 5; they would (1) require that the Exchanges receive a Federal license; (2) that there be established an administrative authority with broad discretionary powers to require the adop- tion and enforcement of rules by the Exchange so as "to establish a minimum standard of fair dealing"; (3) "the adoption of satisfactory rules and regulations which, in the event of violation, will give the Federal Agency authority either to deprive an exchange of its license or to suspend it or fine it";(4) that the form of Stock Exchange rules governing "pools, margin trading, specialists, short selling, &c., shall not be set forth in detail in the statute, but shall be left to be prescribed by the Administrative Agency and (5) that the suggested administrative agency be required to engage in the collection of statistics upon which to base its rules and regulations. Among other things the report treats of the Division of Powers and Co-ordination with Federal Reserve Banks, as to which it says in part: It would seem proper to give to the Federal Reserve banks of their districts power, in consultation with the proposed stock exchange authority to meet situations directly, rather than indirectly, and your Committee accordingly could suggest that the Federal Reserve Bank of any district, together with the proposed agency, should be empowered to prescribe margin requirements; and the Federal Reserve Bank of the district should be permitted to warn or suspend from the credit facilities of the Federal Reserve System, any bank which might make loans to brokers who violate such requirements. While we are giving the report in full under a separate head in this issue of our paper we quote as follows some of its essential features as noted in the Washington dispatch, Jan. 28 to the New York "Times": Refers to Disclosures. The Committee made definite suggestions as to the form rules should take in an effort to put an end to practices which it felt to be questionable and which, as disclosed by the Senate Banking and Currency Committee investigations, "have shocked the conscience of the nation." "There has been revealed," the report said, "the spectacle of certain leaders in the world of finance who, while standing in a fiduciary relation to the stockholders as directors in corporations, have engaged in stock market transactions which could not but redound to the ultimate disadvantage of the shareholders." Dealing with short selling, the Committee held that while there should be no complete curb on such operations, the Federal supervisory agency should have such powers as were necessary to preveht abuses. It also recommended that specialists in stocks should be prohibited from sharing in any pool or joint account or syndicate trading in a security in which the specialist figured. As a check in dealing with "certain evils" such as the manipulation of stocks by directors and officers and the issue of stock to insiders for in adequate consideration, the report suggested, as the most effective course, "Federal incorporation for corporations engaged in inter-state commerce." It did not, however, directly recommend such a revolutionary step, rather leaving that to the determination of the Senate Committee in framing legislation. Would Restrict Margin Trading. Denial of the use of the mails and other inter-state instrumentalities of communication to exchanges which failed to qualify for Federal licenses the committee held to be constitutional. As to another controversial question, margin trading, the committee held that accounts should not be carried on margin unless a sufficient sum was required to protect from loss individuals who are "unable to cope with the hazards of the market." It would have banks confine their loans to brokers who observed rules accepted by the Federal supervisory agency. For Federal Reserve Check. The recommendation was made that the Federal Reserve banks receive authority to suspend from the credit facilities of the system any bank violating margin requirements set up in the rules and regulations. The committee held that perhaps no single piece of legislation could Volume 138 Financial Chronicle deal with all such aspects of the situation and the inference was that changes in the Banking Act of 1933, which was described as a "beginning in the right direction," might be necessary. Suggesting steps for a control that would make market practices under the old mechanism "reliable and clean," the committee advised a study to determine whether "as wide and as dangerous machinery" as now exists is necessary to secure liquidity of security values. One of the arguments of the Stock Exchange has been that severe restrictions would hamper liquidity. The committee, while admitting that it :did not• have sufficient information, even after its exhaustive inquiry, on which to base an accurate opinion, indicated the belief that many of the practices which are now the subject of criticism could be outlawed without adverse effect. For Curbing Stock Flurries. Emphasizing the need for a curb on speculative activities, which it held to be responsible in no small part for the last great boom and collapse in the market, the Committee advocated that in carrying out reforms, safeguards should be set up to create a condition in which fluctuations in security values would more nearly represent the change in the position of an industry rather than a speculative mania. In the establishment of a Federal governing body, the Committee recommended that a representative of the stock exchanges should be a member. Pool Operations Attacked. In its report the special Committee said: "Your committee regards certain of the disclosures before the sub-committee of the Senate Committee on Banking and Currency during the past year and a half as imposing an imperative obligation to devise constructive measures for the prevention of those practices which have shocked the conscience of the 'station. There has been revealed the spectacle of certain leaders in the world of finance who, while standing in a fiduciary relation to the stockholders as directors in corporations, have engaged in stock market transactions which could not but redound to the ultimate disadvantage of the shareholders." Attacking some of the pool operations without naming them, the report said the general public had "a tendency toward unintelligent and senseless speculation." The stock market boom receded with "disastrous comsequences to the whole national economy." The Committee maintained that no single piece of legislation is able to deal effectively with all aspects requiring government action. The Glass-Steagall Bank Act was described as a beginning in the right direction. "Your Committee realizes that, perhaps, the most effective way to deal with certain evils connected with manipulation of stocks by directors and officers, issue of stock to insiders for inadequate consideration, Incomplete publicity of corporate accounts and similar problems is by the requirement of Federal incorporation for corporations engaged in Inter-State commerce," said the report. Conanuing,it held that some measure of control was possible through regulation of the exchanges, and that "under a realistic interpretation of the Constitution" stock exchange operations can be constitutionally regulated by the Federal Government through use of postal power and the power to regulate inter-State commerce. Restriction by Licensing. "On this assumption a statute would, we believe, be valid which would provide that unless an exchange operated under a license issued by the Federal Government, no quotations of prices on such exchange, no offers to buy or sell, no contracts or communications relating to the transactions on such exchange, could be transmitted through the mails or by means of the instrumentalities of inter-State commerce." Compliance with regulatory requirements would be necessary, to acquiring a license, the report went on. This is similar to the system of Federal regulation applied to grain exchange by the Grain Futures Act, held constitutional by the Supreme Court. The general objectives of regulation were set forth as follows: 1. The specific practiJes of the market must be made reliable and clean no matter what point of view is adopted with regard to the larger question. 2. So far as possible, the aim should be to try to create a condition in which fluctuation in security values more nearly approximates fluctuation in the position of the enterprise itself and of general economic conditions—that is, tend to represent what is going on in the business and in our economic life rather than mere speculative or -technical" conditions in the market. 3. The steady accumulation over a period of time of information which will afford a better basis for determining whether as wide and as dangerous machinery as now exists is really necessary to secure liquidity of security values. Question of Liquidity. "This last question involves a broad problem as to whether liquidity, through the mechanism of stock markets, should be encouraged or discouraged," the report continued. "Your Committee is not now in possession of information permitting the termination of this broad question. From one point of view it is arguable that the attsmpt through exchanges to give liquidity to tremendous bodies of the national wealth is an element of fragility in the economic structure. "Your Committee takes note of the fact that a relatively high degree of liquidity exists in the bond market apart from the existence to anything like the same extent of some of the practices of the stock market which are now the subject of criticism. Further, your Committee cannot but take note of the fact that the translation of an extremely large percentage of the national wealth into the form of liquid securities has widespread social effects." Curb on Specialists. The Committee advocated that a specialist and his firm should be prohibited from sharing directly or indirectly in any pool, Joint account or syndicate trading in a security in which he is a specialist, and that a specialist, whenever stating a bid or offered price, should indicate whether it is his own or another's order. There should be "no curb placed on short selling as such," but the Stock Exchange Authority should have power to require the exchange to prevent abuses "of such a character as to demoralize the market." In times of emergency,short selling might be suspended by the Exchange Authority. Control of all publicity, advertising, &c., by members of an exchange was advocated. As a substitute for the plan advanced, the Committee considered Federal incorporation of exchanges, but saw no advantage in this and decided the licensing method to be best. Margin Trading Criticized. Criticizing trading in margins, the Committee said It would seem desirable that accounts should not be carried on margin unless the question of equity was at least a minimum amount at inception In order to prevent the risking of savings by individuals who are unable to 931 cope with the hazards of the market. Further margins of at least a stated percentage of the purchase price of each security purchased might be required and the requirements might be further enforced by requiring that banks confine their loans to brokers who observe these requirements.r The report recommended that Federal Reserve banks in their districts have power, in consultation with the Stock Exchange Authority, to prescribe margin requirements and that the Federal Reserve banks be permitted to warn or suspend from the credit facilities of the Reserve System any bank making loans to brokers who violated margin requirements. The proposed Federal license should require that all exchanges adopt and submit to the Authority rules designed to comply with regulatory requirements. Exchanges should be required to enforce such regulations. The Authority should establish rules and regulations for all exchanges. A "reserve power to license brokers" was suggested. The Exchange Authority should study the question of pools and possible regulation and should require in case of pools or syndicates that a copy of pool agreements, with the names of the participants, be filed. Commodity Exchanges. Regarding commodity exchanges, the Committee advised that Dr. J. W. T. Duvel, Chief of the Grain Futures Administration, and Dr. Nils A. Olsen, Chief of the Bureau of Agricultural Economics, had prepared bills approaching the regulation of commodity exchanges from two angles and said: "Your Committee has reached the following conclusions: 1. That before either or both of the proposals submitted by Dr. Olsen and Dr. Duvel, respectively, are introduced in Congress, they should be harmonized so that two inconsistent proposals will not be placed before Congress at the same time. 2. That the problems of stock market regulation and the regulation of commodity Exchanges, while both involving many of the same abstract issues, are nevertheless essentially different, both as to the concrete problems with which they deal and as to the groups and classes of persons whom they primarily affect, and, therefore, that any attempts to include regulation of commodity Exchanges with regulation of Stock Exchanges in the same legislation or under the same administrative supervision would not be regarded by your committee,as desirable. 3. Your committee recommends that the problem of working out a harmonious solution between the proposals of Dr. Olsen and Dr. Duvel, being primarily a matter of agricultural concern, would be most effectively left to the Department of Agriculture. The Committee, named by the Secretary of Commerce, Mr. Roper, at President Roosevelt's direction, also submitted the views of two experts on regulation of commodity exchanges. In this field the Committee recommended that these views be harmonized before submission to Congress. . . • In his letter Secretary Roper advised the report be transmitted to the Senate Committee for its use in framing legislation, but did not mention the House Banking and Currency Committee. President Roosevelt, however, dispatched the report to both Committees. This led to a revival of the jealousy which has been manifested lately between the two Committees over the framing of legislation. Committees at Odds Again. This morning Chairman Fletcher of the Senate Committee released the Roper letter for publication, but announced that the report itself would be withheld until Monday (Jan. 29). As soon as Chairman Steagall of the House Committee heard of this he made the full report available to the newspapers. Sentiment in Congress in favor of Stock Exchange regulation was never more prevalent, with all indications pointing to adoption of the outstanding recommendations of the special committee. Chairman Fletcher announced that study of the report would start almost immediately. Legislation, however, will probably await a full report of the Pecore investigation. Secretary Roper informed the President that the Committee's report on the Securities Act would be sent to the White House not later than Jan. 26. At the White House it was stated that no such report had been received up to this time. President Roosevelt Sends Special Message to Congress Recommending Stringent Governmental Regulation of Stock Exchanges—Measure Introduecd in Senate After Message from President—Places Exchanges Under Control of Federal Trade Commission—Specifies 60% Minimum Margin—Many Other Practices Proscribed Including Wash Sales and Price Pegging—Pools Would Be Curbed. President Roosevelt, in a special message to Congress yesterday (Feb. 9) recommended "a broad policy of national regulation" of "exchanges for dealing in securities and commodities." It should be the purpose of the Federal Government, the President said, "to restrict, as far as possible, the use of these exchanges for purely speculative operations." His suggestions were made to Congress, he added, "for the protection of investors,for the safeguarding of values, and,so far as it may be possible, for the elimination of unnecessary, unwise and destructive speculation." Immediately after the President's message was read in the Senate, a bill providing for stringent regulation of the New York Stock Exchange and other stock exchanges throughout the country was introduced by Senator Duncan U. Fletcher. Chairman of the Senate Finance Committee. The House was not in session yesterday afternoon at the time the President's message was delivered to Congress, but it was expected that Representative Rayburn, Chairman of the House Inter-State Commerce Committee, would introduce a bill identical with that of Senator Fletcher to-day (Feb. 10). It was said at the White House yesterday that Mr. Roosevelt had not seen nor approved nor disapproved any bills prepared for introduction in Congress. Senator Fletcher, in introducing his bill in the Senate, said that it was designed "to make stock exchanges market places for investors and not places of resort for those who would speculate or gamble." He admitted that the measure was likely to injure "the insider who has relied upon his ability to take advantage of the 932 Financial Chronicle unprivileged outsider." The bill was drafted, he added, "on the theory that the interests of the general public are paramount and that an end must be put to any mulcting of the general public for the benefit of a few insiders." The bill would require all exchanges to be registered with the Federal Trade Commission, which would have wide powers to promulgate rules and regulations for their operation. It would become effective, if passed by Congress in its present form, on Oct. 1 1934. Among the various regulations and prohibitions specified in the measure are the following, as reported in Associated Press Washington advices Feb. 9: A 60% minimum marginal regulation by prohibiting brokers to extend credit on a security of more than 40% of its current market price. Severe restriction on borrowing by exchange members and their use of customers securities, including a requirements that loans on registered securities must be made from Federal Reserve banks. Prohibition against manipulations of security prices by making any of the following a criminal offense: 1. Wash sales. 2. Matched orders. 3. Any combination of purchases and sales for the purpose of raising or depressing the price of the security or creating a false impression to the market of such security. 4. Spreading of rumors that prices will change in accordance with activities of manipulators. 5. Disseminating misleading information regarding a security. 6. Paying for the dissemination of information in aid of the operations of manipulators. 7. Pegging the price of a security without informing the commission as to all the details of the operation. 8. Cornering the supply of a security. 9. The use of options and trading against options. Prohibition against short sales or stop-loss orders except in compliance with regulations adopted by the commission. A limitation preventing brokers from underwriting security issues and prohibiting exchange members from acting as specialists unless registered as such. A requirement for registration with the commission and the exchange of securities admitted to trading on exchanges, disclosing such details of the company's financial position as the commission may require. Exclusion from the mails of proxies for registered securities unless information on the proxies is filed with the commission. Outlawry of over the counter security markets ecxept in compliance with commission regulations. Compulsory disclosure of holdings and dealings of directors, officers and principal stockholders in the securities of a corporation and a prohibition against speculation or short selling of the securities by such persons. Requirement for keeping detailed records of all transactions by brokers open to inspection by the commission. In general, the law would make persons engaging in any of these outlawed practices subject to liabilities for losses sustained through them by others. In addition, it would impose maximum penalties of a $25,000 fine or ten years' imprisonment for violations. Exchanges violating the law would be subject to a fine of $500,000. The bill follows the general lines of the new securities act in proposing to make officers and directors of companies civilly liable for false or misleading information filed with the commission. The trade commission,in addition to making regulations for the exchanges would have power to conduct investigations of exchange operations and the condition of companies with registered securities. One provision of the bill, designed to prevent persons from doing things through dummy corporations or members of their families that they were forbidden to do themselves. The text of President's Roosevelt's message to Congress on the regulation of stock exchanges follows: • To the Congress: In my message to you last March proposing legislation for Federal supervision of national traffic in investment securities I said: Feb. 10 1934 "This is but one step in our broad purpose of protecting investors and depositors. It should be followed by legislation relating to the better supervision of the purchase and sale of all property dealt with on exchanges." This Congress has performed a useful service in regulating the investment business on the part of financial houses and in protecting the investing public in its acquisition of securities. There remains the fact, however, that outside the field of legitimate investment, naked speculation has been made far too alluring and far too easy for those who could and for those who could not afford to gamble. Such speculation has run the scale from the individual who has risked his Pay envelope or his meager savings on a margin transaction involving stocks with whose true value he was wholly unfamiliar, to the pool of individuals or corporations with large resources, often not their own, which sought by manipulatien to raise or depress market quotations far out of line with reason, all of this resulting in loss to the average investor, who is of necessity personally misinformed. The exchanges in many parts of the country which deal in securities and commodities conduct, of course, a national business because their customers live in every part of the country. The managers of these exchanges have, it is true, often taken steps to correct certain obvious abuses. We must be certain that abuses are eliminated and to this end a broad policy of national regulation is required. It is my belief that exchanges for dealing in securities and commodities are necessary and of definite value to our commercial and agricultural life. Nevertheless, it should be our national policy to restrict, as far as possible, the use of these exchanges for purely speculative operatior.s. I therefore recommend to the Congress the enactment of legislation providing for the regulation by the Federal Government of the operations of exchanges dealing in securities and commodities for the protection of investors, for the safeguarding of values, and, so far as it may be possible, for the elimination of unnecessary, unwise and destructive speculation. Bill to Create Stock Exchange and Security Commission Introduced by Senator King—Would Regu/ate Transactions on Stock Exchanges. On Feb. 6 a bill to create a Stock Exchange and Security Commission to regulate transactions on Stock Exchanges was introduced in the Senate by Senator King (Democrat) of Utah. In a Washington dispatch, Feb. 6, to the New York "Journal of Commerce" it was stated that the measure was drafted along the lines of the recommendations in the report. of the Roper Committee recently made to the House and Senate Banking and Currency Committees. No indication was given by Chairman Fletcher of the Senate Banking Committee as to when the matter would be taken up for consideration, said the dispatch, which added: United States Would License Exchanges. Under its terms the bill creates a Commission of three members appointed by the President and confirmed by the Senate which would have authority to license the operation of the Stock Exchanges. Without such a license no Exchange would be allowed to transmit through the mails or otherwise any quotations of securities prices'; offer to buy or sell any security on the Exchange or enter into a contract to buy or sell securities. The licenses issued would contain the following terms and conditions: 1. That the Exchange will adopt, with the approval of the Commission, rules with respect to transactions on the Exchange designed to comply with and enforce the regulatory requirements prescribed. 2. That the Exchange will make such reports and such changes in its rules with respect to transactions on the Exchange as the Commission may • from time to time require. 3. That the Commission may modify or alter the terms and conditions of the license at any time if in the opinion of the Commission sfich modification or alteraticaf is necessary in the public interest. 4. That the Exchange shall take such disciplinary measures as may be necessary to properly enforce the requirements imposed upon it by its license and the rules and regulations of the Commission. 5. That the Commission, in conjunction with the Federal Reserve Bank of the Federal Reserve District in which the Stock Exchange is located, shall have authority to prescribe margin requirements to be observed by the members of the Exchange in their dealings in securities on such Exchange. Indications of Business Activity THE STATE OF TRADE—COMMERCIAL EPITOME. Friday Night, Feb. 9 1934. There was a further increase in general business during the week and the rate of activity is gradually approaching the 1931 level. The usual spring seasonal increase in business which was absent during the past three years because of the depression is now again making its appearance. There was a further advance in the various basic lines of industry, with steel and automobile industries leading the •field. In some cases production figures were the largest since last fall. Steel operations increased 9% to 3732% of capacity, the highest rate since October and the gain in carloadings brought the total nearly up to the 1932 level. Electricity production exceeds that of last week and is 12.5% above last year's figure. Production of bituminous coal also shows a gain. Sales of lumber exceeded production. The automobile industry was very active and manufacturers were experiencing difficulties in making deliveries of new models, but this failed to check the buying enthusiasm of the public. Orders received by dealers, it is reported, are at the rate of between 35 and 40% ahead of last year. Operations were slightly double those of last year. Retail buying continued unabated. There was a general feeling that some natural recession would take place in February, but the recent cold weather tended to stimulate demand, especially for heavy wearing apparel. Sales continued heavy of furniture, draperies, rugs, hosiery, yard goods and men's overcoats. A gratifying feature in the retail trade was the reduction in stocks which appeared to be rather burdensome last fall. Wholesale markets were active and great interest was being shown at the numerous trade shows and special openings. The greatest improvement was made in industrial operations during the week. Orders for shoes, textiles and clothing were on such a large scale that factory, schedules have had to be widened. Clothing manufacturers are booked solid until Easter, and manufacturers of rayon have sold up their March production. Packers of foodstuffs did a good business. Fertilizers sold more readily. Commodities were more active and higher owing to the improved business outlook and a broader outside public demand. Cotton and sugar led the rise. Speculation in cotton was very active and reports that the President was in favor of the Bankhead bill which provides for compulsory control of production brought in a flood of buying orders which lifted prices sharply. Foodstuffs were strong. Coffee was higher on good trade buying. Trading in sugar futures was on a larger scale and prices advanced on reports that an announcement was imminent from Washington. After the close on the 8th inst. the President in a special message asked Congress for legislation that would mean a curtailment in domestic production in favor of Cuba and the Philippine Islands. Butter was in somewhat better demand and firmer. Receipts were moderate. The grain markets displayed considerable strength early in the week on a better demand stimulated by bullish trade news, continued dry weather in the winter wheat belt and a further sharp decrease in domestic visible supplies. Reactions occurred from time to time under profit taking sales and other selling and late in the week good rains were reported over parts of the Southwest. Cotton goods were more active and firmer. The movement of gray goods was larger and shipments of wide goods exceeded those of a week ago. Silk futures were higher with the statistical position strong. The cold wave which swept the country last week and lost its intensity somewhat at the close of that week,renewed its vigor the early part of the week,the thermometer dropping steadily day by day and breaking February low temperatures and reached its climax on Friday when the mercury in New York City dropped to 14.3 degrees below zero, establishing a new all time low record for any day in any year since the establishment of the Weather Bureau here in New York 64 years ago. The frigid spell extended over the entire Eastern part of the country and Canada where temperatures went to 50 degrees below zero. The extreme cold tied up river traffic by ice jams. A number of persons died from the cold and many suffered frost bitten ears and hands. No early relief from the cold is said to be in sight. To-day the range in New York City was between 14.3 degrees below zero to 5 degrees above. Overnight at Boston it was 18 degrees below to 10 degrees above; Baltimore, 6 below to 22above;Pittsburgh,Pa. 12 below to 12above;Portland, Me., 18 below to 4 above; Chicago, 2 below to 12 above; Cincinnati,6 below to 18 above; Cleveland, 12 below to 2 above; Detroit, 16 below to 2 above; Charleston, 44 to 56; Milwaukee, 4 to 14; Dallas, 48 to 56; Savannah, 48 to 68; Kansas City, Mo., 18 to 34; Springfield, Mo., 20 to 36; St. Louis, 12 to 34; Oklahoma City, 32 to 50; Denver, 34 to 56; Salt Lake City, 32 to 54; Los Angeles, 48 to 66; San Francisco, 48 to 62; Seattle, 42 to 52; Montreal, 22 below to 18 below, and Winnipeg, 4 below to 6 above. Large Advance in Wholesale Commodity Prices During Week of Feb. 3 Reported by National Fertilizer Association. For the week ended Feb. 3 wholesale commodity prices, as measured by the index of the National Fertilizer Association, showed the largest gain in many weeks. During the week this' ndex advanced seven points, carrying the index number to 70.2, the highest level since May 1931. A week ago the index stood at 69.5, a month ago at 68.6 and a year ago at 56.0. (The three-year average 1926-1928 equals 100.) During the preceding week the index was unchanged, but two weeks ago the index advanced four points. Under date of Feb. 5 the Association also said: During the latest week nine groups advanced, one declined slightly and four showed no change. During the preceding week two groups declined, three advanced and the remaining nine showed no change. Two weeks ago nine of the 14 groups in the index advanced. The largest gains during the latest week were in grains, feeds and livestock, textiles, and fats and oils. Forty-two commodities, the largest number in many weeks, advanced during the most recent week, while nine commodities showed lower prices. During the preceding week there were 21 declines and 16 advances. Important commodities that advanced during the latest week were cotton, wheat, cattle, hogs, sheep, lard, butter, cheese, flour, potatoes, burlap, silk, silver, gasoline, hides and rubber. Notable gains were shown in cotton, lard, butter, grains and livestock. The declining commodities included eggs, apples, peanuts, heavy melting steel, copper and tin. The index numbers and comparative weights for each of the 14 groups listed in the index are shown in the table below. WEEKLY WHOLESALE PRICE INDEX-BASED ON 476 COMMODITY PRICES (1926-1928=100.) Per Cent Each Group Bears to the Total Index. 23.2 16.0 12.8 10.1 8.5 6.7 6.6 6.2 4.0 3.8 1.0 .4 4 100.0 933 Financial Chronicle Volume 138 G'roup. Latest Week Feb. 3 1934. Preceding Week. Month Ago. Ago. 71.6 68.0 53.6 70.3 68.6 84.9 79.0 78.7 85.2 50.4 93.0 67.4 74.5 92.3 71.4 67.8 51.1 69.5 68.2 84.9 78.9 79.0 85.2 45.2 93.0 67.0 74.0 92.3 69.6 68.4 50.0 87.8 67.2 84.9 79.0 79.1 85.2 41.5 88.2 66.8 72.8 90.8 54.0 53.3 38.8 41.8 60.3 86.9 71.4 66.8 77.3 38.3 87.3 60.6 65.3 91.7 70.2 69.5 68.8 MA Loadings of revenue freight for the week ended Feb. 3 1934 amounted to 564,098 cars, an increase of 2,532 cars or 0.5% over the preceding week and 78,039 cars, or 16.0%, over the corresponding period last year. It was,however,a decrease of 9,825 cars, or 1.7%, over the comparable period in 1932. Total loadings for the week ended Jan. 27 1934 were 18.1% in excess of those for the week ended Jan. 28 1933. The first 15 major railroads to report for the week ended Feb. 3 1934 loaded 241,178 cars of revenue freight on their own lines, compared with 238,967 cars in the preceding week and 210,070 cars in the week ended Feb. 4 1933. All of these carriers showed gains over the totals for the same period a year ago. Comparative statistics follows: REVENUE FREIGHT LOADED AND RECEIVED FROM CONNECTIONS. (Number of Cars) All CerflUIVI combined Reed from Connectiorts. Loaded on Lines. Feb. 3 Jan. 27 Feb. 4 Fa, 3 Jan. 27 Feb, 4 Weeks EndedAtchison Topeka dr Santa Fe RyChesapeake 5, Ohio Ry Chic. Burlington ar Quincy RR_ _ Chic. Milw. St. Paul & Pacific Ry Chicago & North Western Ry Gulf Coast Lines & subsidiaries_ _ International Great Northern RR Missouri-Kansas-Texas Lines...Missouri Pacific RR New York Central Lines Norfolk & Western Ry Pennsylvania RR. System Pere Marquette Ry Southern Pacific System Wabash Ry 1934.. 1934. 1933; 1934. 1934. 1933. 16,439 19,571 14.794 16,889 14,136 2,554 2,489 4,491 13,557 40,511 16,185 52,557 4,806 17,180 5,039 17,672 19,573 14,964 16,239 14,160 2,398 2,506 4,510 13,278 38,523 16,989 51,018 4,548 17,745 4,844 15,985 4,164 3,949 : 3,373 17,240 • 6,149 6,364 53,48 12,164 5,578 5,294 3" 13,906 5,895 5,807 1L497 11,632 8,802 8,278 6.111 .955 2,204 1,243 1,227 2,408 1,810 1,649 '4,706 4,158 2,633 2,685 1,970 12,147 7,097 7,239 5,784 34,613 56,058 54,1.51 '44.732 13,400 3,557 3.401 :• 3.067 48,389 29,531 '30.794 26,544 4,789 14,246 4,789 7,239 7,107 ' 5,917 241,178 238,967 210,070 139,756 137.945 114,176 Total x Not available. , TOTAL LOADINGS AND RECEIPTS FROM CONNECTION: (Number of Cars) Weeks EndedChicago Rock Island dr Pacific Ry Illinois Central System St. Louis-San Francisco Ry Total Feb. 4 Feb. 3 Jan. 27 1934. 1934. 19,407 26,117 12,373 20.002 25,685 12,493 57.897 58.180 ' 50.357 1933. ' 17,056 22,742 10,5.59 Loading of revenue freight for the week ended on Jan. 27 1934 totaled 561,566 cars, the American Railway:Association announced on Feb. 2. This was an increase of 1,136 ears above the preceding week, 86,274 cars above the same week in 1933, and 1,223 cars above the corresponding week in 1932. Details for the Jan. 27 1934 week follow: Miscellaneous freight loading for the week of Jan. 27 totaled 193,251 cars, an Increase of 2,540 cars above the preceding week, 39,220 cam above the corresponding week in 1933, and 10,234 cars above the corresponding week in 1932. Loading of merchandise less than carload lot freight totaled 161.840 cars, an increase of 1,341 cars above the preceding week, and 1,083 cars above the corresponding week in 1933, but 26,134 cars below the same week in 1932. Grain and grain products loading for the week totaled 31,694 cars, a decrease of 472 cars below the preceding week. but 6,370 cars above the corresponding week in 1933. It was, however. 1,287 cars below the same week in 1932. In the Western Districts alone, grain and grain products loading for the week ended Jan. 27 totaled 21,100 cars an increase of 5,217 cars above the same week in 1933. Forest products loading totaled 20,615 cars, an increase of 968 cars above the preceding week.6,176 cars above the same week in 1933, and 1.651 cars above the same week in 1932. Ore loading amounted to 3,192 cars, a decrease of ten cars below the preceding week, but increases of 1,666 cars above the corresponding week in 1933 and 376 cars above the corresponding week in 1932. Coal loading amounted to 124,758 cars, a decrease of 3,048 cars below the preceding week but increases of 27,404 cars above the corresponding week in 1933 and 16,597 cars above the same week in 1932. Coke loading amounted to 7,696 cars, a decrease of 651 cars below the Preceding week, but 3.236 cars above the same week in 1933 and 2,491 cars above the same week in 1932. Live stock loading amounted to 18,520 cars, an increase of 468 cars above the preceding week, and 1,119 cars above the same week in 1933, but 2,705 cars below the same week in 1932. In the Western Districts alone, loading of live stock for the week ended Jan. 27 totaled 14,431 cars, an increase of 664 cars above the same week in 1933. All districts reported increases for the week of Jan. 27 compared with the corresponding week in 1933. The Eastern, Pocahontas. Southern and Southwestern districts reported increases compared with the corresponding week in 1932, but the other districts reported small reductions. Loading of revenue freight in 1934 compared with the two previous years follows: Year 1934. Foods Fuel Grains, feeds and livestock__ Textiles Miscellaneous commodities__ Automobiles Building materials Metals House-furnishing goods Fats and oils Chemicals and drugs Fertilizer materials Mixed fertilizer Agricultural implements._ _ _ Than Loadings of Revenue Freight Continues Higher in Corresponding Period Last Year. Week Week Week Week ended ended ended ended Total Jan. Jan. Jan. Jan. 6 13 20 27 1933. 1932. 499,939 555,627 560,430 561,566 439,469 509,893 499,554 475,292 571,678 572,649 562.101 560.343 2.177.562 1.924.208 2.266.771 In the following table we undertake to show also the loadings for the separate roads and systems for the week ended Jan. 27 1934. During this period only 18 roads showed decreases as compared with the corresponding week last year. Among the larger carriers showing increases as eom- Financial Chronicle 934 pared with the same week in 1933 were the Pennsylvania System, the Baltimore & Ohio RR., the New York Central RR.,the Chesapeake & Ohio Ry., the Southern Ry. System, the Illinois Central System, the Louisville & Nashville RR., Feb. 10 1934 the Chicago Milwaukee St. Paul & Pacific Ry., the Atchison Topeka & Santa Fe System, the Norfolk & Western Ry., the Chicago Burlington & Quincy RR., the Missouri Pacific RR.,the Chicago & North Western Ry. and the Reading Co. REVENUE FREIGHT LOADED AND RECEIVED FROM CONNECTIONS (NUMBER OF CARS)-WEEK ENDED JAN. 27. Railroads 1934. Eastern District. Group ABangor & Aroostook Boston & Albany Boston & Maine Central Vermont Maine Central New York. N.H.& Hartford Rutland Total Loaas Received from Connections. Total Revenue Freight Loaded. 1933. 1932. 1934. 1933. 2.193 3.054 '1,505 877 2,824 10,206 548 1.350 2,624 6,525 493 2,379 9,103 475 1,955 3,105 7,833 688 2.515 10,744 134 217 4,405 9.740 2,142 2,617 10,591 957 216 3,840 7,705 1.792 1,765 9.103 757 27,207 22,949 27.374 30,669 25,178 5,570 8,000 11,465 122 1,477 7,595 1.280 18,485 2,120 412 401 3,569 6,981 10,011 115 921 6,649 1,195 15,895 1,888 302 244 4,190 8,079 11,261 152 1,372 6,705 1,710 19,368 1,662 358 3C7 6,162 5,507 12,392 1.719 989 6,095 29 25,920 1,878 23 242 5,038 4,319 10,417 1,50t 702 5,48C 29 20,180 1,562 22 171 56,927 47,770 55.164 60,946 49,427 498 1,274 7,112 38 178 .194 1,891 2,913 6,376 3,825 3,734 4,148 3,414 971 4,844 2.772 371 1,167 6,901 17 208 227 907 2,988 5,142 2,628 3.124 3.780 2,288 716 4.471 2,166 550 1,187 8.552 60 243 250 1,119 3,081 6,561 3,403 4,151 4,004 3,227 879 5,517 2,445 964 1.473 11,214 55 86 2,732 1,264 6,245 8,718 132 8,148 4,305 3,688 666 7.107 2,567 862 1,367 8,663 34 72 2,185 922 5,302 7,254 112 6,486 3,905 3.097 488 5,996 1,433 44,582 37,501 45,573 59,383 48.178 Grand total Eastern District-. 128,716 108,220 128.111 150.978 122,783 364 25,470 1.360 265 4,564 3 370 173 712 1,074 51,018 12,553 5.390 108 3,070 278 20,677 623 216 4,065 1 253 162 884 964 45.813 9,335 2.659 70 2,402 b 25,298 768 137 5,852 245 282 196 1,159 c 57,503 12,214 4,837 45 2,905 453 12,319 1,107 6 10,096 40 15 13 2,557 1.471 30,794 13.468 1,049 __ _ _ 5,008 473 10,283 489 4 8,546 46 14 10 1,967 1,272 25,735 12,123 611 106,484 88,402 111,441 78,396 64,591 19.573 16,989 1,088 3,469 16,992 13,171 773 2,618 16,985 13.404 688 2,958 6,384 3,401 1,025 715 4.982 2,91/2 842 448 41,117 33,554 34,035 11,505 9,264 9,086 1,204 369 147 55 1,138 444 322 7,014 19,613 124 7,793 743 312 131 45 1,305 464 272 6.656 17,048 180 9,023 985 342 156 54 1,491 539 389 7,219 19.500 171 4,748 1,394 933 384 89 1,298 805 2,999 3,703 11,526 539 3,950 1,163 707 256 74 849 657 3,510 2,919 9,457 625 Total Group BDelaware & Hudson Delaware Lackawanna & West Erie Lehigh dr Hudson River Lehigh & New England Lehigh Valley Montour New York central New York Ontario dr Western_ Pittsburgh & Shawmut Pittsburgh Shawmut&Northern Total Group CAnn Arbor Chicago Ind.& Louisville Cleve. Ctn. Chic. & St. Louis Central Indiana Detroit dr Mackinac Detroit dr Toledo Shore Line._ Detroit Toledo & Ironton Grand Trunk Western Michigan Central Monongahela New York Chicago dr St. Lotds Pere Marquette Pittsburgh & Lake Erie Pittsburgh & West Virginia Wabash Wheeling dr Lake Erie Total Allegheny District. Akron Canton & Youngstown Baltimore & Ohio Bessemer & Lake Erie Buffalo Creek & Gauley Central RR.of New Jersey_ _ ... Cornwall Cumberland & Pennsylvania Ligonier Valley Long Island c Penn-Read Seashore Lines_ Pennsylvania System Reading Co Union (Pittsburgh) West Virginia Northern Western Maryland Total Pocahontas District. Chesapeake & Ohio Norfolk & Western Norfolk & Portsmouth Belt Line Virginian Total Southern District. Group AAtlantic Coast Line Clinchneld Charleston & Western Carolina Durham & Southern Gainesville dr Midland Norfolk Southern Piedmont & Northern Richmond Frederick. & Potom ?eaboard Air Line iouthern System K Inston-Salem Southbound 3.0 -18 - Group BAlabama Tenn. dc Northern Atlantic Birmingham at Coast__ Atl.& W.P.-West.RR.of Ala Central of Georgia Columbus & Greenville Florida East coast Georgia Georgia & Florida Gulf Mobile & Northern Illinois Central System Louisville & Nashville Macon Dublin & Savannah-Mississippi Central Mobile & Ohio Nashville Chaff.& St. Loins Tennessee Central Total Loads Received from Connections. Total Revenue Freight Loaded. Railroads. 1934. 1933. 1932. 183 663 691 3,418 215 991 938 352 1,196 17,645 17,145 132 148 1,728 2,818 369 162 592 /76 2,729 156 1,055 919 247 1,094 15,926 13,897 139 142 1.617 2.372 339 198 625 622 3,083 210 875 750 310 1,408 18,202 15.274 78 104 1,881 2,513 469 1934. 172 742 987 2,391 320 693 1,300 397 684 8.593 3,741 450 185 1,463 2,260 658 1933. 157 560 750 1,952 117 512 1,106 322 596 7,062 3,106 425 174 1,081 1,826 619 48,632 41.962 46,602 25.036 20,364 Grand total Southern District 88,148 76.911 86.471 53,454 44,531 Northwestern District. Belt By. of Chicago Chicago & North Western Chicago Great Western Chic. Milw. St. Paul & Pacific. Chic. St. Paul Minn.& Omaha. Duluth Missabe & Northern... Duluth South Shore & Atlantic_ Elgin Joliet an Eastern Ft. Dodge Des M.& Southern Great Northern Green Bay dr Western Lake Superior & Ishpeming-Minneapolis & St. Louis Minn. St. Paul dr 5.8. Marie-. Northern Paola° Spokane dr International Spokane Portland dr Seattle 715 14,160 2.342 16,239 3,610 501 424 3,238 281 7,872 511 271 1,635 4.369 7,423 75 1,053 435 11,573 1,996 14,499 2,723 314 360 2,139 224 6,700 422 275 1,458 3,966 6,293 89 596 1,129 14,052 2,377 17,4/3 3,198 480 397 3,236 271 7,106 515 1,91/ 4,497 7,427 b 747 1,407 8,278 1,978 5,807 2,436 223 390 3,775 116 1,687 312 99 1.169 1.974 1,856 168 1,016 896 6.278 1,638 5,046 1,690 51 370 3,301 125 1,155 257 65 1.018 1,470 1,38n 100 763 64,719 54,462 64.822 32,691 25,638 17,672 2,436 154 14,964 1,642 11,184 2,819 814 2,358 254 1,150 1,821 501 72 12,308 325 360 12,338 417 1,044 15.663 2,610 166 11,914 1,186 9,985 2,064 744 2,001 262 1,146 1,5/8 286 125 9,335 223 234 9,625 741 776 18,867 3,036 155 16,077 b 13,208 2.736 1,492 2,529 484 1,887 b 461 116 12,405 280 252 12,261 865 1,209 3,949 1,726 24 5,294 759 5,746 1.725 760 1,479 '11 852 1,025 286 42 3,344 346 825 5,301 7 1,155 3,352 1,285 32 4,498 567 4,836 1,650 644 1,151 10 826 709 189 31 2,495 227 615 4,233 5 1.029 84,633 70.664 88,320 34,656 28.384 101 146 211 2,398 2,506 231 1,460 1,290 205 386 579 100 4,510 13,278 45 147 7.649 1,881 5,437 3,858 •1,313 18 96 138 238 2,391 2,229 136 1,313 1,C26 196 238 477 52 4,122 12,119 55 134 6,586 1.925 4.810 3,339 1,448 11 133 170 243 52,542 1,584 185 1,642 1,005 b 415 742 63 4,606 13,796 47 98 7.650 2,291 5.079 3,218 1,615 19 3,369 316 154 1.227 1,649 932 1,216 881 304 732 169 356 2,685 7,239 20 132 3.367 1,789 2,348 3,283 1,812 42 2.314 410 207 1.052 1.868 729 1,273 807 251 389 144 277 1,886 5,836 141 128 2,683 1,290 2,022 2,971 1,634 42 Total Total Central Western District. Atch. Top.& Santa Fe System. Alton Bingham & Garfield Chicago Burlington dr Quincy Chicago dr Illinois Midland __ Chicago Rock island & Pacific. Chicago & Eastern Illinois Colorado & Southern Denver & Rio Grande Western. Denver & Salt Lake Fort Worth & Denver City Illinois Terminal Northwestern Pacific Peoria & Pekin Union Southern Pacific (Pacific) St. Joseph & Grand Island Toledo Peoria & Western Union Pacific System Utah Western Pachic Total Southwestern District. Alton & Southern Burlington-Rock island Fort Smith & Western Gulf Coast Lines International-Great Northern Kansas Oklahoma & Gulf Kansas City Southern Louisiana & Arkansas Louisiana Arkansas & TexasLitchfield & Madison Midland Valley Missouri & North Arkansas..... Missouri-Kansas-7exas Lines_ Missouri Pacific Natchez & Southern Quanah Acme & Pacific St. Louis-San Francisco St. Louis Southwestern Texas & New Orleans Texas & Pacific Terminal RR.Assn.of St. Louis Weatherford Min.Wells & N.W. h 28,354 47,143 33.992 43,079 39,869 28,418 47,749 34,949 24,167 Total 39,516 a Estimated. b Not available. c Pennsylvania-Reading Seashore Lines include the new consolidated lines of the West Jersey & Seashore ER., formerly part of Pennsylvania RR..and Atlantic City RR..formerly Part of Reading Co.: 1932 figures included in Pennsylvania System and Reading Co. •Previous week's figures 'rani Expectation that Trend of Business Would Be Upward in First Quarter of This Year Strengthened During Past Month, Says National City Bank of New York--Public Expenditures Upon Trade Regarded as Temporary Stimulus. Commenting on general business conditions in its February "Letter," the National City Bank of New York observes that "the opinion generally expressed at the year-end, that the trend of business during the first quarter or half of 1934 would be upward, has been strengthened during the past month." The bank finds that "more active buying in commodities, merchandise and securities, at advancing prices, gives evidence of a rising spirit of optimism. Wholesale trade particularly," it notes, "has increased, with the number of buyers in the chief centers the largest at this season in several years; and this buying reflects the judgment of merchants as to the state of purchasing power and trade prospects in their territories, and as to price trends gen- orally. Likewise," says the bank, "It shows that inventories accumulated last summer have been satisfactorily reduced." According to the bank, "the factor of outstanding importance in the trade outlook at present is outside the normal range qf business news." In part, the bank continues: It is to be found in the disbursement of Government funds, which is proceeding at a rate never equalled except at the war-time peak. The dificit of expenditures over receipts of the Federal Treasury in the first 26 days os f the month was $882,000,000. These expenditures, going in part directly to individuals through the Civil Works and Agricultural Adjustment Adnrinistrations, and also indirectly through many other channels, are distributing purchasing power widely. Moreover, the budget message has put the country upon notice that in the second half of the fiscal year, ending June 30, it is intended to incur a deficit nearly six times as large as that of the first half, ended last December. 3foody's Investors' Service has made a classification of the distribution of the proposed disbursements in the current fiscal year, showing that $1,883,000,000, of which $500,000,000 has already been paid, will go to farmers in loans and benefit payments ; $1,229,000,000 for building; $1,205.000,000 in direct relief, Including the CWA anti conservation work; and $457,000,000 to mortgage institutions and home owners. As these sums reach consumers, and are spent in trade, they start a flow of buying power Volume 138 Financial Chronicle around the circle. Likewise, the Government funds used to free closed bank deposits and to add to the banking capital represent large present and future additions to purchasing power. Of course, the effect of public expenditures upon trade can only be in the nature of a temporary stimulus or stopgap. When the time comes, as it must, to discontinue them, the trade situation will depend once more upon the purchasing power created by the production and exchange of goods; and the important question then will be whether sound economic adjustments have been made, and price relationships that will promote production and exchange restored. But while. they last the expenditur es will help to make up for the deficiency in natural buying power, and will give effective support to trade. Money and Price Relationship. Probably the new monetary measures, which are discussed subsequently in this "Letter," have also had a stimulating effect on prices, although the connection is chiefly one of sentiment. Business men generally recognize that the revaluation of the monetary gold will add enormously to the credit base, and the possibilities in the way of potential credit expansion may have led to forward buying in some measure. The movement of funds into this country from abroad, as indicated in the foreign exchanges, evidently has been encouraged by setting the limits within which it is expected ultimately to revalue the dollar, and these incoming funds help prices in the markets in which they are invested. They have been a factor in the rise in stocks and bonds. Another reason for hopeful business sentiment is that the rise in commodity prices has been chiefly in the farm group, where it was most needed. . • • To be sure, most business men recognize that the situation, even in respect to the stimulating influences mentioned, is not unqualifiedly favorable. They realize that the dependence upon Governmen t funds as a source of purchasing power will impose a time limit upon the recovery, unless the kind of purchasing power that comes from sound and equitable relationships within the economic system is built up before the expenditures end. They know that by all past standards farm prices and wages of farm labor are still distressingly low in relation to prices the farmer has to pay, and that the improvement which has occurred has been largely brought about by measures whose experiment al nature is freely admitted. Such considerations as these keep trade expectations within conservative limits, but it is plainly the general opinion that the balance is on the side of improvement. Moody's Daily Index of Staple Commod ity Prices Continues Advance Toward July Levels. Prime commodity prices continued to advance for the seventh week in succession, Moody's Daily Index of Staple Commodity Prices closing at 139.6, a gain of 2.8 points for the week. It is now not very far from the 1932-33 high of 148.9 reached last July. Seven of the fifteen commodities comprisi ng the Index showed net gains, against four declines and four which were unchanged. Sharp advances in cotton, hogs, rubber and sugar featured the price movements of the week, the remaining advances in silver, coffee and cocoa being of a minor character. There were moderate declines in hides, wheat, corn, and silk, while steal scrap, copper, lead, and wool tops were unchanged. The movement of the Index number during the week, with comparisons, is as follows: Fri. Feb. 2 Sat. Feb. 3 Mon. Feb. 5 Tues. Feb. 6 Wed, Feb. 7 Thurs. Feb.8 Fri. Feb. 9._ . 136.8 2 weeks ago, Jan. 26 137.5' Month ago, Jan. 9 137.3 Year ago, Feb. 9 139.2 1933 High, July 18 139.1 Low, Feb. 4... 139.7 1934 High, Feb. 8_ 139.6 Low, Jan. 2_ 133.5 128.1 81.3 148.9 78.7 139.7 126.0 "Annalist" Weekly Index of Wholesa le Commodity Prices Rose One Point During Week of Feb. 6Increase Reflects Higher Prices for Cotton, Hogs, Sugar, Butter and Gasoline - Weekly Foreign Indices. A rise of 1.0 for the "Annalist" Weekly Index of Wholesale Commodity Prices during the week ended Feb. 6, reflected primarily higher prices for cotton, bogs, sugar, butter and gasoline. The index, the "Annali st" said, stood at 105.8 on Feb. 6, compared with 104.8 Jan. 30, and the highest since Oct. 3. Continuing, the "Annali is now st" said: The rise was largely independent of the monetary situation, reflecting rather the independent gains of the separate commodities. THE "ANNALIST" WEEKLY INDEX OF WHOLESALE COMMODITY PRICES. (Unadjusted for seasonal variation) (1913=100 .) Feb. 6 1934. Jan. 30 1934. Feb. 7 1933. Farm produc18 Food produc s Textile prod IC18 Fuels Metals Building matcrisis Chemicals_ _ Mlsceilaneoit4 91.4 105.7 •120.3 141.2 105.0 113.1 99.0 87.1 90.3 104.0 x120.0 140.8 105.2 112.8 99.0 86.7 63.1 85.8 65.0 105.8 .93.8 106.6 95.2 69.7 All comm odities 105.8 104.8 81.1 zAll cow , Riffles on gold basis 65.7 65.3 •Preliminary. x Revised. a Based on exchange quotations for France, Switzerland, Holland and Belgium. The dollar swung rather violently around 62j4 cents, about which it has centred (when measured in terms of foreign currencies ) since mid-January. It showed a net loss of 0.2 cents, for the week, the "Annalist" price index on a gold basis accordingly rising 0.4 points to 65.7. Although the pressure of returning capital may continue to keep the dollar for some time above the level to which it has been formally (If provisiona lly) devalued, it can be expected to move gradually toward the official 59.06 cent valuation. Since. 935 however, uncertainty about its value is now removed (for the time being, at least), the commodities as a whole will be less sensitive than in the past to its day-to-day oscillations, although the heavy import and export groupcotton,tin, rubber and the like-will doubtless continue to reflect its shortterm movements. DAILY SPOT PRICES. Moody's Inds:. Jan. 30 Jan. 31 Feb. 1 Feb. 2 Feb. 3 Feb. 5 Cotton. Wheat. 11.70 11.75 11.75 11.80 11.95 11.95 19 11% 1.091 1.08K 1.083-i 1.083-s 1.09 1.0974 1 nnu Corn. 1100s. U. S. Basis• Oda Basis. .665: 3.76 136.0 84.7 .663-i 3.58 135.6 83.1 3.75 135.4 .663-i 82.7 4.04 136.8 .6574 86.2 .663-i137.5 85.3 3 .1.15 87.3 137.3 .6674 Wah ft .SRU 4.17 139.2 86.4 Cotton-Middling upland, New York. Wheat-No.2 red, new,0.1.1.,domestic. New York, Corn-No. 2 yellow, New York. Hogs-Day's average, Chicago. Moody's Index-Daily index of fifteen staple commodities. Dec. 31, 1931=100: March 1, 1933=80. Foreign commodity prices tended to weaken in the third week of January, the German index dropping to 96.1 from 96.3, while the Italian was unchanged at 42.5. after having declined 0.1 point the week previous; the French index was not available. The British index, it is true, continued the advance that has been under way since November;its rise, however, reflects rather the depreciation of sterling, and on a gold basis would show an appreciable drop in the past month. WEEKLY FOREIGN WHOLESALE PRICE INDICES. U. S. A. U. S. $ Gold 5 :Ger•U. K. *France many. Jan. 23 1934 Jan. 16 Jan. 9 Jan. 2 Dec. 26 1933 Dec. 19 Dec. 12 Dec. 5 Nov.28 Nov. 21 Nov. 14 Nov. 6 Oct. 31 Jan. 24 1933 104.2 65.0 66.0 _-96.1 103.3 64.3 65.8 386 96.3 102.8 65.9 65.4 389 96.4 102.5 64.6 64.7 390 96.2 101.2 64.1 64.1 389 96.0 100.7 63.9 64.2 387 96.2 102.1 66.1 63.9 386 98.2 102.2 64.6 63.6 385 96.1 101.9 64.4 63.4 384 98.0 102.8 61.8 63.3 382 96.3 104.9 63.7 63.2 382 96.1 103.0 66.3 63.5 383 95.9 103.8 68.4 63.7 383 96.1 81.3 .81.3 60.9 ___ 90.8 HARP 1913 1913 1926 July'14 1913 •Saturday following date shown. :Wednesday follow ng date shown. a Palo. 42.5 42.5 42.6 42.5 42.3 42.4 42.3 42.2 42.1 42.1 42.0 42.1 42.2 45.2 1926 Indexes of Business Activity of Federal Reserve Bank of New York. "General business activity appears to have shown further improvement during the first half of January, in continuation of the upward movement which developed in the previous month," states the Federal Reserve Bank of New York in presenting its monthly indexes of business activity in its "Monthly Review" of Feb. 1. The Bank continued: The advancing tendency was reflected in this Bank's weekly index of the railroad movement of merchandise and miscellaneous freight, which is presented in the accompanying diagram, somewhat smoothed by the use of a four-week moving average to remove erratic fluctuations from week to week. The course of the index has been upward since the middle of November and the advance so far recorded has been larger than any previous increase in several years, with the exception of the rapid rise of March to July last year. Increases, after seasonal adjustment, were rather general in December in the various indexes representing distribution and general business activity. Advances occurred in this Bank's indexes of railroad freight traffic, foreign trade, department store and chain store sales, and check payments outside New York City. In addition, business failures were less numerous than In November, although failures usually increase at the year end. (Adjusted for seasonal variations, for usual year to year growth, and where necessary for rice changes.) Primary DistributionCar loadings, merchandise and miscellaneous_ _ _ Car loadings, other Exports Imports Waterways traffic Wholesale trade Distribution to ConsumerDepartment store sales, United States Department store sales, Second District Chain grocery sales Other chain store sales Mall order house sales Advertising Gasoline consumption Passenger automobile registrations General Business ActivityBank debits, outside of New York City Bank debits, New York City Velocity of demand deposits, outside of N.Y...City Velocity of demand deposits, New York City- _ Shares sold on New York Stock Exchange Life insurance paid for Employment in the United States Business failures Building contracts New corporations formed in New York State_ Real estate transfers Dec. 1932, Od. 1933. Non, 1933. 53 58 43 57 40 85 56 56 501 64 48 76 56 57 53 59 55 78 70 78r 64 67 61 52 71 28 71 74r 53 70 64 58 71 51 65 69r 51 70 63 58 57 46 77 56 53 70 48 57 77 62 102 23 73 52 General price level. __128 Composite index of wages' 174 Cost of living. 132 Tr Preliminary. r Revised. • 1913 averager---100. ss 72 49p Dec. 1933. 59 sa 601, 63p --69p 72r 52 73 61 56 alr 72 76 56 29 69 44 55 43 72 51 75 73 74 59 42 69 _ 86 67 73 47 54 63 _- 133 177 136 133p 178p 136 132p 17717 135 to 56p 42p 72 so Fifth Consecutive Advance During Week of Jan. 27 Reported in Weekly Wholesale Commodity Price Index of United States Department of Labor. "The wholesale commodity price index rose slightly the week ending Jan. 27 and reached a level equal to 72.4% of the 1926 average as compared with 72.3% for the week ending Jan. 20," Isador Lubin, Commissioner of Labor Statistics of the U. S. Department of Labor said Feb. 1. "This is the fifth consecutive week in which priceS have advanced," Mr. Lubin said. "They are now at the highest point during the two years in which the Bureau has maintained a weekly wholesale index. They are approximately back to the level of May 1931, when the index was 73.2." Mr. Lubin further stated: ago. Present prices are 20% over the corresponding week of a year when the general index stood at 60.4. As compared with the low point the 59.6. was index the when for the year 1933 (week ending March 4) stands current index is up by 21M%. The present level of prices now index number 24% under the general average for the year 1929, when the registered 95.3. an %Five of the 10 major groups of items covered by the Bureau showed at the increase, three recorded a decrease, while two groups remained level of the preceding week.alimal In an announcement issued by the Department of Labor It was stated: index, Of the 10 major groups of commodities carried in the Bureau's and rose by the group of miscellaneous items showed the largest advance were crude 0.9 of 1%. Important articles influencing the rise in the group rubber, cylinder oils and cigars. the index potatoes and hay eggs, Due to advancing prices of livestock, a point within of market prices of farm products advanced 0.8 of 1% to of July 22, when 5% of the high point for last year reached during the week food group was the index number stood at 62.7. The ji of 1% rise in the sugar. raw and due to increases in price of butter, cheese, coffee drugs group The hides and leather products group and the chemicals and registered an both moved up 0.1 of 1% during the week. Bides and skins materials advance for the sixth consecutive week. Rising prices for fertilizer and drugs group. were responsible for the increase in the chemicals but a increases recent their continued Prices of certain non-ferous metals Items fall in prices of pig tin, bar silver, malleable iron castings and other group In the iron and steel groups caused the metals and metal products weeks, the buildto drop ji of 1%. After advancing for the past several caused being drop the 1%, of group showed a decline of 0.3 ing certain petroleum by declining prices of lumber. Due to decreases in fuel and lighting materials group also dropped 0.3 of 1%. the products, group and No important price changes occurred in the textile products housefurnishing and the level remained at that of the week before. The The special goods group also showed no change in the general average. showed a group of all commodities other than farm products and goods slight decrease from the week before. of composed The index number of the Bureau of Labor Statistics is 784 separate price series weighted according to their relative importance ha'the country's markets and is based on average prices for the year 1926 the as 100.0. The accompanying statement shows the index numbers of for Major groups of commodities for the past two weeks, for one year ago, 1929: the low point of 1933 and the average for the year OF JAN. 27 INDEX NUMBERS OF WHOLESALE PRICES FOR WEEKS AND JAN. 20 1934, JAN. 28 AND MARCH 4 1933, AND YEAR 1929. (1926=100.0) Week EndingJan.27 Jan. 20 Jan.28 1933. 1934. 1934. Farm products Foods Rides and leather products Textile Fuel and lighting materials Metals and metal products Building materials Chemicals and drugs HousefurnIshing goods Miscellaneous All commodities other than farm products and foods All commodities 59.5 65.0 90.4 76.4 74.0 84.7 86.2 75.1 81.7 68.1 59.0 64.6 90.3 76.4 74.2 85.1 86.5 75.0 81.7 67.5 or. 4 1933. Year 1929. 41.3 54.1 68.6 51.8 65.2 78.2 70.2 71.9 72.8 60.8 40.6 53.4 67.6 50.6 64.4 77.4 70.1 71.3 72.7 59.6 104.9 99.9 109.1 • 90.4 83.0 100.5 95.4 94.2 94.3 82.6 78.5 78.6 67.0 66.2 91.6 72.4 72.3 60.4 59.6 95.3 Exports Index of Bureau of Agricultural Economics Lower in December. The index of volume exports of agricultural products was 109 in December, compared with 111 in November, 116 in December a year ago, and 143 in December two years ago, according to the Bureau of Agricultural Economics, United States Department of Agriculture. The five-year period 1909-14 equals 100. The Bureau, under date of Feb. 5, continued: Farm The December index for cotton was 120 compared with 152 in December 1932; grain and products, 63 against 43 a year ago; animal products, 73 against 65: dairy products and eggs, 74 against 83: fruit, 329 against 252: wheat and flour. 76 against 40; unmanufactured tobacco. 191 against 97: hams and bacon, 23 against 22: and lard, 139 against 126. The December index for cotton was the lowest since August 1933, and the lowest December figure since 1930. Exports of wheat and flour reached the largest monthly total since June 1932. Tobacco made an excellent December record, the index being the second highest monthly figure since October 1930. Fruit exports were considerably above the corresponding month in 1931 and 1932, with fresh and dried apples, fresh pears and dried apricots in greatest demand. Production of Electricity Higher. According to the Edison Electric Institute, the production of electricity by the electric light and power industry of the United States for the week ended Feb. 3 1934 was 1,636,275,000 kwh., an increase of 12.5% over the same period last year when output amounted to 1,454,913,000 kwh. • The current figure which was the highest since the week of Jan. 13 1934 when output totaled 1,646,271,000 kwh., also compares with 1,610,542,000 kwh. produced during the week Feb. 10 1934 Financial Chronicle 936 of Jan. 27 1934 and 1,624,846,000 kwh. during the week of Jan. 20 1934. All of the seven geographical areas showed gains for the week ended Feb. 3 as compared with the corresponding period last year, the percentage increases also being larger than for the preceding week. The Institute's statement follows: PER CENT CHANGES. Major Geographic Divisions. New England Middle Atlantic Central Industrial.. Southern States Pacific Coast West Central Rocky Mountain Total United States_ Week Ended Week Ended Week Ended Week Ended Feb. 3 1934. Jan. 27 1934. Jan. 20 1934. Jan. 16 1934. +11.8 +12.3 +16.6 +10.8 +8.6 +6.2 +17.6 +8.6 +9.9 +13.1 +7.9 +2.8 +r.2 +17.5 +10.0 +9.3 +13.0 +7.7 +2.0 +5.6 +18.2 +9.2 +8.6 +13.1 +10.4 +3.6 +8.8 +19.8 +12.5 +9.6 +9.5 +10.1 Arranged in tabular form, the output in kilowatt hours of the light and power companies of recent weeks and by months since and including January 1930 is as follows: Week of- 1933. Week of- 1932. Week of- 1931. 1933 over 1932. 0.5% 1,435.707,000 May 7 1.429.032.000 May 9 1,637.2913.000 2.2% 1,468.035.000 May 14 1,436.928.000 May 16 1,654.303.000 3.3% 23 May 1,644.783.000 1.435,731,000 1.483,090.000 May 21 4.8% 1,493,923,000 May 28 1.425.151.000 May 30 1.601.833.000 5.8% 6 1,593,662.000 1,461.488.000 June 4 1.381.452.000 June 13 1.621,451.000 7.4% 1,541,713.000 June II 1.435.471.000 Juno 9.5% 1,578,101.000 June 18 1.441,532,000 June 20 1.609.931.000 10.9% 1.598.136.000 June 25 1,440.541,000 June 27 1,634.938.000 13.7% 4 1.607.238.000 1,655.843,000 July 1 1,456,961.000 July 11 14.7% 1,538.500.000 July 9 1,341.730.000 July 18 1,603.713.000 16.4% 1,641.638.000 1,648,339.000 July 16 1.415.704.000 July 15.4% 1.650.545.000 25 July 1,433.990.000 23 July 1,654,424.000 15.4% 1,661,504.000 July 30 1,440.386.000 Aug. 1 1,644.089,000 15.6% 1,650.013,000 Aug. 8 1,426,986.000 Aug. 8 1.642.858,000 15.0% 15 1,629.011,000 Aug. 1.415.122.000 13 Aug. 1,627,339,000 1,643.220.000 15.2% 1,650.205,000 Aug. 20 1,431.910,000 Aug. 22 1.630,394.000 Aug. 27 1,436.440.000 Aug. 29 1,637.533.000 13.5% 5 1.635.623.000 11.8% Sept. 1,464.700.000 1.637.317,000 Sept. 3 1,582,267.000 11.1% 1,582.742.000 Sept. 10 x1,423.977.000 Sept. 12 19 1,662,660.000 12.7% Sept. 1.476,442,000 17 Sept. 1,663.212.000 1.660.204.000 9.9% 1,638,757.000 Sept. 24 1.490.863.000 Sept.28 1,645.587,000 10.2% 1,652.811,000 Oct. 1 1,499.459.000 Oct. 2 1,653,369.000 9.3% 1,646,136.000 Oct. 8 1,506.219,000 Oct. 10 17 1,656,051.000 7.4% 1,618,948,000 Oct. 15 1,507.503.000 Oct. 24 6.9% 1.646.531,000 Oct. 1,528.145.000 22 Oct. 1,618,795,000 1.651,792.000 5.8% 1,621,702,000 Oct. 29 1,533.028,000 Oct. 31 7 1.628,147.000 3.8% 1,583,412,000 Nov. 5 1,525,410,000 Nov. 14 1.623,151.000 6.3% Nov. 1,520.730.000 1,618.875.000 Nov. 12 21 1.655.051.000 5.6% 1,617,249.000 Nov. 19 1,531,584,000 Nov. 28 1,599.900.000 I 6.9% Nov. 71.475.268.000 26 Nov. 1,607,546,000 5 1.671,466.000 f y1.553.744,000 Dec. 3 1,510,337.000 Dec. 12 6.6% 1,619.157,000 3eo 10 1,518.922,000 Dec. 19 1,617.717,000 1,675.653,000 5.2% 1,644.018,000 Dec. 17 1,583.384.000 Dec. 1.584,652.000 8.6% 1,656,616,000 Dee. 24 1,554.473.000 Dec. 28 8.8% 1,539,002,000 Dec. 31 1,414,710.000 Jan. 2 1,523,652,000 1932. 1933. 1034. 9 1.619.265.000 9.7% fan. 6 1,563,678.000 Jan. 7 x1.425.639,000 Jan. 1,602,482,000 10.1% Ian. 13 1,646,271,000 Ian, 14 1,495,116.000 Jan. 16 1,598,201,000 an. 20 1.624,846.000 Jan. 21 1.484.089.000 Jan. 23 1.588,967,000 9.5% 9.8% ran. 27 1,610.542,000 Jan. 28 1,469,636,000 Jan. 30 1,588,853,000 12.5% ?lib. 3 1,636.275.000 Feb. 4 1.454,913,000 Feb. 6 Revised figure. y Includes Thanksgiving Dar, DATA FOR RECENT MONTHS. May 6 May 13 May 20 May 27 June 3 June 10 June 17 June 24 July 1 July 8 July 15 July 22 July 29 Aug. 5 Aug. 12 Aug. 19 Aug. 26 Sept. 2 Sept. 9 Sept. 16 Sept. 23 Sept. 30 Oct. 7 Oct. 14 Oct. 21 Oct. 28 Nov. 4 Nov. 11 Nov. 18 Nov. 25 Dec. 2 Deo. 9 Dec. 16 Dec. 23 Dec. 80 Month of- 1933. 1932. 1931. January -- 6,480.897.000 5,835,263.000 6.182.281.000 6.024.855.000 6.532,686.000 6.809.440,000 7.058.600.000 7,218.678.000 6,931,652,000 7,094,412,000 6,831.573,000 7.011.738.000 6.494,091.000 6.771.684,000 6.294.302.000 6.219.554.000 6.130.077.000 6.112,175.000 6.310,667.000 6,317,733.000 6.633.865.000 6,507.804.000 6.638.424.000 7,435,782.000 6.678,915,000 7,370.687.000 7.184,514,000 7,180,210,000 7.070.729.000 7,286,576.000 7.166,088,000 7,099,421,000 7,331,380.000 6,971,644,000 7,288,025,000 February_.. March April May June July Aufflffit September__ October ____ November__ December_ 1930. 1933 Under 1932. 8.021.749,000 7.8% 7.066.788.000 10.1% 7.580,335.000 8.7% 7.416,191,000 4.3% 7.494.807,000 a5.0% 7,239,697,000 al1.1% 7.363.730.000 a15.5% 7,391,196.000 •14.4% 7,337,106.000 a9.7% 7.718,787.000 a6.9% 7,270,112.000 a5.0% ---6,566.601,000 e ---77,442,112.000 86.073,969.000 89.467.099,000 llTotal a Increase over 1932. approxiare based on covering above reports Noot.-The monthly figures shown mately 92% of the electric light and power Industry and the weekly Blum are based on about 70%. Some Improvement Noted in General Business Conditions in Cleveland Federal Reserve District During Latter Part of December and First Three Weeks of January-Increase in Production Reported by Tire Manufacturers. In the latter part of December and the first three weeks of January, according to the Cleveland Federal Reserve Bank, "general business in the Fourth (Cleveland) District showed a degree of improvement. Usually at this season," the bank says, "there is no marked trend discernible in business activity because of the irregularities resulting from holiday interruptions, inventory-taking, and year-end adjustments." In its "Monthly Business Review" of Jan. 31 the bank continues: In comparison with a year ago, current conditions in practically all lines show a marked change for the better. The number of unemployed has been reduced to quite an extent, though the situation is still in need of further improvement. Payrolls at industrial concerns were up sharply from a year ago and the combined effect of the increased distribution of wages to industrial workers and of Government funds through the various Federal channels is reflected in retail and wholesale lines. Department store sales in this District in December had a 14.4% greater dollar value than in the closing month of 1932. Wearing apparel store sales were up 15% and furniture store sales 38% in the same period. Part of these gains represented higher prices, but the expansion from November was greater than seasonal and in the last two months of 1933 there was little change in retail prices reported. Further marked improvement in Volume 138 retail trade circles was evident in January. Sales of Cleveland reporting stores in the first three weeks were 36.7% higher in dollar volume than in early 1933, and the number of transactions was up 28.7% in the same period. In late December, operations in the iron and steel industry were expected to contract rather sharply in January, since much of the steel shipped prior to the year-end was thought to be for stock-piles. The falling-off, however, was slight and of short duration, for in mid-January operations in most steel centers of this district expanded and the industry was turning out steel at double the rate of January 1933. The expansion resulted from Increased demand from automobile and allied industries and miscellaneous steel users. Work on railroad steel has encountered delays, but orders for structural material have improved slightly. The automobile industry experienced more than the usual delays resulting from model changes. This adversely affected operations at parts, accessory and other allied plants in December, but in recent weeks a marked improvement in these lines became apparent as rush orders for materials were received. Tire production has expanded and glass output has increased. In the building industry contracts awarded in December were valued at over $30,000,000 in this district. This was about six times as large as a year ago, and was nearly double the November total. In the first half of January a further increase was recorded. By far the greater part of the contracts awarded was in the public works category and represented allotment of Federal funds. The paint industry enjoyed a gain in sales in late December and the first half of January which was not seasonal. Production also was increased. Clothing factories in Mid-January were operating at capacity levels permitted by the code and the number of employees was much greater than a year ago. Advance sales of spring goods were reported to be much larger than in early 1933. Electric power production in the Central Industrial region in the week ended Jan. 20 was 13% greater than in the corresponding period of 1932. Excluding the Rocky Mountain region, this was the largest gain reported In the entire country. For the last four weeks, gains in this section have exceeded 13%. As to wholesale and retail trade conditions in the Cleveland District, the bank reports: Retail. The dollar value of December department store sales swelled the year's total so that a gain of 0.03% was shown in the entire period from 1932 at reporting units in the Fourth District. Although the higher price of many items was a factor contributing to the expansion, the year made a relatively good showing in view of the large declines reported in early 1933. Compared with December 1932, a gain of 14.4% in dollar sales was reported in the closing month of 1933, and the increase from November was greater than seasonal. The daily average adjusted index in the latest month was 64.4% of the 1923-1925 monthly average, as against 63.9% in November and 53.8% a year ago. Increased pre-holiday sales were reported in all principal cities, the gains ranging from 10 to nearly 40% from the corresponding month of 1932. In the individual departments for which figures are available, gains from a year ago were shown in every instance except in sales of domestics. Sales of electrical household appliances, housefurnishings, misses' dresses, woolen dress goods, and silverware were over 30% above a year ago. The proportion of total sales bought on credit was approximately the same in December as a year ago, but there was relatively more installment buying and less purchasing on a 30-day credit basis than in December 1932. There was comparatively less buying on credit in December than in November. The dollar value of stocks at department stores on Dec. 31 was 21.6% smaller than on Nov. 30, the reduction being slightly more than seasonal. The adjusted index of stocks was 62.3% of the 1923-25 monthly average, compared with 63.4 in November and 54 in December 1932. Collections in December, as a per cent, of accounts receivable at the beginning of the month, were a trifle better than in November, and were up about 8.5% from December 1932. At 44 reporting furniture stores in this District, sales in December were 37.9% larger than a year ago, and in the entire year a gain of 14.9% was shown from 1932. The increase in December compared with a 19.9% gain in sales in furniture departments of department stores. Chain grocery sales in December were up 7.6% from the same month of 1932, and chain drug store sales increased 8.7% in the same period. Wholesale. The four reporting lines of wholesale trade in the Fourth District showed an increase in dollar sales in December from a year earlier, and, compared with November, a contrary-to-seasonal expansion was reported. In contrast with December 1932, the largest gain in dollar sales occurred In the hardware trade, the increase being 49.8%. For the entire year, dollar hardware sales were up 10.8% from 1932. Drug sales were 34% larger in December than in November, and 22% above December 1932. The gain, according to reports, was due to the sharp increase in liquor sales, both wholesale and retail, in the latest month. In the entire year sales were down 7.3%. Dry goods sales were only slightly larger in December than a year earlier. and were down somewhat more than seasonally from November, but in the entire year a gain in sales of 11.5% was reported from 1932. Wholesale grocery sales in the last month of 1933 were 7.4% above the preceding year, but for the 12-month period sales were down 1.8% from 1932. The bank had the following to say in its "Review" regarding the tire and rubber industry in the Fourth District: Tire manufacturers in this District reported an increase in production in January which would put it about 30% above the level of the last two months in 1933 and considerably ahead of January 1933. Output for the past few months has been somewhat in excess of shipments, but this is partly seasonal and sales have been larger than a year ago in every one of the last six months. Inventories in hands of manufacturers on Dec. 1, however, were larger than since early 1932 and, at the rate of present consumption, represented 4.2 months' supply. The increase in stocks in recent months accompanied the sharp reduction in automobile production prior to the introduction of new models; this apparently was a contributing factor to the rise in stocks, but replacement tire demand also receded in the closing part of 1933. On Dec. 1 1933 tire stocks were 24% higher than a year earlier, according to the report of the Rubber Manufacturers' Association. This same report, covering November, indicates that output in that 937 Financial Chronicle period was 31.9% greater than in the corresponding month of 1932 and shipments were up 28%. Rubber consumed in the United States in December 1933 amounted to 29,087 long tons, approximately the,same as in November, but was 61.2% greater than in the closing month of 1932. In the entire year 405,689 tons of rubber were used in the United States, compared with 332,000 tons In 1932. Rubber imports in December totaled 42,099 tons, somewhat in excess of consumption in the period, but this situation did not prevail in the earlier months of 1933, for stocks of rubber on hand at the year-end were estimated at 364,541 tons, compared with 388,229 tons at the close of 1932. Inventories had a much higher value, however, for crude rubber in early January was quoted at 9.8c. a pound, compared with less than 4e. in early 1932. Employment at Ohio rubber factories in December averaged 1.6% less than in November, a slightly greater than seasonal decline. Compared with a year ago, however, the number employed was up 34%, and for the entire year 1933 averaged 13.7% above the year 1932. Federal Reserve Bank of RichmondIr Reports tinued Improvement in BusinessliniFifth District During December-Little ChangelinkEmployment -Statistics for 1933. "In December," reports the Federal Reserve Bank of Richmond, in its "Monthly Review" of Jan. 31, "business in the Fifth (Richmond) District continued to show improvement in nearly all lines over the corresponding month of 1932. Department store sales in 31 stores averaged 7.4% above the sales in December 1932, and wholesale trade in four of five reporting lines also was better than trade a year earlier." Continuing, the bank says: Most of the changes between Dec. 15 and Jan. 15 in the statements of the Federal Reserve Bank of Richmond and regularly reporting member banks were seasonal, but a material increase in deposits in member banks was an interesting development. Debits to individual accounts figures in four weeks ended Jan. 10 1934 showed a seasonal increase over debits in the four preceding weeks, although the gain was somewhat smaller than in most years. Employment changed little during December. The following table, comparing some of the annual statistics for 1933 with those for 1932, and which also contains figures for 1929, thus allowing comparison with, the year immediately preceding the depression, was contained in the "Review": Annual Summary. 4 1 1933. 1932. 1929. I Debits to individl accts.(23 cities) 59,163,539.000 510,495,604.000 316,673,842.000 1,936 1,420 1,515 'failures, 5th Dist__ No. of comm. Liabilities Involved in failures, $54,233,281 324,705.654 $34,380,335 5th Dist Ma Cotton consumption, 5th Dist. 2.403,441 3,039,884 2,914,087 mills (bales) 1,410,000 1,625,000 1,470,000 Cotton grown In 5th Dist. (bales)417,130,000 725,109,000 717,765,000 (lbs.). Dist. Tobacco grown in 5th 27,781 42,122 21,360 SIdg.permits for ad work (31 cities) Value of-. Ilk- ha, 535,613,841 $131,888,967 520,728,673 Permits for all work (31 cities)._ 3385,963,047 3157,483,234 Contracts awarded, 5th Dist- $102,465,338 Total sales$86,602,758 3117,111,916 582,605,561 31 department stores, 5th Dist.. 363.287,820 $41,089,711 $46,842,579 59 wholesale firms In five lines 534.989.000 327.940.000 309.710.000 TM pnalnrnAllotinn IT R (finnal As to the annual statistics the bank said: For the first time since 1929 several of the figures for last year show improvement over those for the preceding year. Cotton consumption in the Fifth Reserve District rose by 21% in 1933 in comparison with 1932, textile mills having been especially active during the summer months. Wholesale trade in five lines showed an increase in total sales amounting to 14% over last year, four of the five lines reporting increases. Dry goods sales rose 32.6% in 1933, shoes rose 20.8%, and hardware gained 31.1%. Coal production last year exceeded production in 1932 by 6%, increased industrial activity in many lines requiring larger supplies of fuel. In both number of failures and in liabilities involved, the Fifth District Insolvency record for 1933 showed marked improvement over the record for the preceding year. In agriculture, 1933 was a much better year than 1932 in every way. Favorable weather during most of the year produced larger yields per acre in most crops, and higher prices brought the farmers many millions of dollars more than they received in 1932. Many of the indices for 1933 which failed to reach 1932 levels made better comparisons than figures alone indicate. Debits to individual accounts figures, which reflect the volume of business passing through banks, lacked 13% of equaling 1932 figures, but this was due in large part to the bank holiday last March and to the large sums which were frozen in closed banks after that date. Debits last year in nearly all cities in which no important banks closed came relatively near the 1932 figures, and in eight cities debits last year were higher than in the earlier year. Total department store sales for 1933 failed by 4.6% to equal 1932 sales, but sales in the last half of the year exceeded sales in the second half of 1932 by nearly 5%. The indices which showed the worst comparisons between 1933 and 1932 were those covering the construction industry. Building permits declined 23% in number and 42% in valuation in 1933 in comparison with the low figures reported in 1932, and contracts actually awarded last year fell approximately 35% below those for 1932. Retail Trade in Atlanta Federal Reserve District in December at Highest Level in Two Years-Slight Decrease Noted in Wholesale Trade as Compared with November but Substantially Above Year Ago. In summarizing conditions in the Sixth (Atlanta) District the Federal Reserve Bank of Atlanta states that "in December the volume of retail trade!increased to the highest level in two years, wholesale trade was only slightly less than in November, but substantially larger than a year ago, bank clebits increased over both of those comparative periods, and there werergains over the month in building permits 938 Financial Chronicle issued at 20 reporting Cities, and in the production of pig iron in Alabama." The Bank, in its "Monthly Review" of Jan. 31, further reports: • Operations of cotton mills in the District declined from November to December, and building and construction contracts awarded in the District decreased from the unusually large total for November, but were very much larger than in December 1932. Department store sales in December increased 60.3% over those in November, were 21% larger than in December 1932, and were larger than for any other month since December two years ago. For the year 1933, total sales by reporting department stores were only 0.8 of 1% less than in 1932, notwithstanding the large decreases shown for some of the early months of the year. The collection ratio for December was the highest since April 1931. Wholesale trade in December declined only 1.6% from November, and was 38.7% greater than in December a year ago, and for the year was 13.6% greater than in 1932. Bank debits increased 15.7% from November to December and on a daily average basis were 13.1% greater than in December a year earlier. Between Dec. 13 and Jan. 10 outstanding bank credit, both at the Federal Reserve Bank of Atlanta. and at weekly reporting member banks, declined somewhat, but in both instances was greater than on the corresponding report date last year. Daily average demand deposits of all member banks in the District were higher in December than in any other month since May 1932. Building permits issued at 20 cities in the District more than doubled from November to December, but were 24.8% less in value than in December 1932, and for the year 1933 the total was 26.3% smaller than for 1932. Building and construction contract awards declined in December from the large November total, but were nearly three and one-half time; as large as In December 1932, and for the year were 51.5% greater than in 1932. The decline in operations of cotton mills in this district was smaller than in the cotton-growing States as a whole. Production of pig iron in Alabama Increased in December to the highest level for any month since July 1931, and for the year was 34.9% greater than in 1932. Reviewing wholesale and retail trade conditions in the Sixth District the Bank said: Retail Trade. Department store sales in the Sixth District increased in .December by more than the usual seasonal amount to the highest level in two years, collections improved, and stocks at the end of the month showed about the usual decline from November. December sales reported by 39 firms increased by 60.3% over those in November,and were 21.0% greater than in December 1932. For individual cities the comparisons with December a year ago range from an increase 6.6% at New Orleans to a gain of 32.6% at Atlanta. In December cash sales accounted for 48.1% of the total, compared with 43.6% in November, and with 48.6% in December 1932. Total sales for the year 1933 showed a decline of only 0.8 of 1% compared with the total for 1932, notwithstanding the large percentage decreases reported for some of the early months of the year. Stocks of merchandise on hand at the close of December were 20.2% smaller in dollar value than a month earlier, and were 5.0% greater than a year ago. Stock turnover for the month, and for the year, was somewhat greater than for corresponding periods a year earlier. Accounts receivable increased 13.0% over the month, and were 4.9% greater than for December 1932. and collections increased 2.7% over November and were 12.3% greater than in December a year ago. The ratio of collections during December to accounts outstanding and due at the beginning of the month was 32.1%, the highest since April 1931, and compares with 31.0 for November, and with 29.2 for December 1932. For regular accounts the ratio for December was 34.3, for November 33.2 and for December last year 31.2, and for instalment accounts the ratio for December was 15.9. for November 14.9 and for December a year ago 15.7. Collection ratios for December for reporting cities were: Atlanta, 29.3; Birmingham, 26.7; Chattanooga, 29.6; Nashville, 29.7; New Orleans, 39.9, and other cities, 30.9. All of these statistics are based upon reports in actual dollar amounts. Wholesale Trade. Total sales during the year 1933 by 102 reporting wholesale firms in the Sixth District were 13.6% greater than in 1932. Prom the low point in February sales reported by these firms increased each month through October. and declined slightly in November and December. The decrease from November to December was only 1.6%, and December sales were 38.7% greater than in December a year ago. Stocks on hand were somewhat larger in dollar value, accounts receivable smaller, and collections substantially larger than in December 1932. Business Conditions in Tenth Federal Reserve District According to Federal Reserve Bank of Kansas City-Review of 1933-Wholesale and Retail Trade in December Above Year Ago. Reviewing conditions in Tenth (Kansas City) Federal Reserve District during 1933, the Federal Reserve Bank of. Kansas City, in its "Monthly Review" of Feb. 1, states that "the year was one of extremely short crops and sharply higher prices, culminating in a net gain of approximately 48% over 1932 in the Dec. 1 estimated farm value of all crops produced in the Tenth District, exclusive of Federal advancements under acreage reduction contracts. Unfavorable returns from livestock feeding operations," the Bank adds, "with prices not extensively affected as yet by Governmental livestock production, control programs, offset to a large measure the improved crop returns." The Bank's "Review" further notes: Prices of all grains, although still substantially below pre-war prices and the highs of last July, practically doubled during the year. but prices of beef, butter, milk, eggs and poultry closed lower this year than last. Pork prices averaged somewhat better than the 35-year lows of 1932 and mutton, wool and hides were substantially higher. Pi Trade at both wholesale and retail improved after April, declined in September, and then recovered the final quarter of the year. Aggregate sales of five representative wholesale lines combined were 3.3% larger this year than last, and total dollar sales of 32 reporting department stores of the District were 1.9% smaller. The life insurance business exhibited similar characteristics but 1933 sales of new paid-for life insurance were 5% Feb. 10 1934 below the 1932 volume. Sales of lumber at 156 retail yards located throughout the District increased 11.7% during the year. Mills produced 4.4% less flour in 1933 than in 1932 and the total output was the smallest for any year since 1925. Crude oil production increased 16.5% but fell 7% short of the 10-year average. The output of bituminous coal was 7.1% less than a year ago and 38% below normal. Substantial advances in the prices of zinc ore and lead ore stimulated production and shipments doubled. Building activity was decidedly sluggish throughout the year, averaging but a small per cent, of normal. Loans and discounts of reporting member banks declined 9.3% and investment holdings were enlarged 23.8% during the year. Net demand deposits increased but time deposits and savings deposits fell off. Business failures, both as to number and the amount of liabilities involved, were the lightest in years. 1933 marketings of wheat and kafir at 10th District Markets, 42.6 and 33.5% under a year ago, were the lightest in recent years, and receipts of corn, oats, rye, and barley, although considerably larger than in 1932, were below normal. Stocks of wheat, corn and oats on farms in the seven States of the District on Jan. 1 1934. were, respectively. 27, 25 and 36% lighter than one year earlier. The fall sown acreage of winter wheat in these States was reduced about 4%. Receipts of cattle, calves, hogs, including Government and direct purchases by packers, and horses and mules at 10th District markets during 1933 were larger, and of sheep and lambs smaller, than a year ago. However. as compared to average marketings for the past 10 years, offerings of cattle and calves were light, and arrivals of sheep and lambs slightly below, and of horses and mules and hogs slightly above, the average. Operations at meat packing plants corresponded closely to livestock receipts. According to Department of Agriculture estimates, there were 8.56% less cattle and 13% less sheep and lambs on feed in the United States on Jan. 11934, than on Jan. 1 1933. Also, according to December breeding intentions, the 1934 spring pig crop, exclusive of adjustments, under the Government's corn-hog program, will be 8.4% smaller than last year. "Aided by the distribution of public funds through civil works and crop advances, Tenth District department stores experienced a record seasonal increase in sales during December," the Bank continued. "Total sales for the month were 64.9% larger than in November and showed a gain of 17.9% over December 1932. Wholesale trade," the Bank said, "declined seasonally, but was 23.2% above a year ago. Life insurance sales, retail lumber sales and building operations also improved as compared to the corresponding month last year. Business insolvencies were comparatively light." Further reviewing wholesale and retail trade conditions, the Bank said as follows. Retail trade, as indicated by the total dollar sales of 32 reporting department stores located in 10th District cities, was 1.9% smaller in 1933 than In 1932 and wholesale trade. based on the aggregate sales of five representative lines combined, was 3.3% larger. By individual lines, wholesalers' sales of dry goods, groceries and drugs were virtually the same this year as last, whereas, hardware and furniture dealers of the District reported gains for 1933 of 13.9 and 18%, respectively. Aided by favorable weather, civil works employment, and Government crop loans and payments, December trade at the 32 department stores was 64.9% larger than in the previous month and 17.9% larger than a year ago. The increase over November is the largest ever recorded and compares with 49.2% reported last year. September, following an increase of 21.6% in August over August, 1932, was the only month since April in which sales failed to exceed those for the corresponding month last year. Inventories were reduced 21%. or about the usual ratio, in December and year-end stocks, although 1.4% heavier than a year ago, were otherwise the lightest for that date in recent years. Collection percentages of amounts outstanding at the end of the preceding month were 39.1 for December and 35.5 for November this year and 37.2 for December, 1932. At wholesale establishments sales of dry goods declined 30%. groceries 11.3 and furniture 6.1%, and sales of hardware increased 3.7 and of drugs 20.8% in December as compared to November. By separate lines the following gains over December 1932. were reported: dry goods, 21.5; groceries, 1.1; hardware, 51.9; furniture. 54.9; drugs, 28.8%, and the five lines combined 23.2%. Inventory changes reflect slight gains for the month and substantial gains for the year in hardware and furniture stocks, and declines for the month and sllght increases for the year in holdings of dry goods and groceries. Drug stocks, as of Dec. 30, were 12.8% less than one month earlier and 5.7% less than a year ago. in Trade Conditions in Eleventh District Reported by Dallas Federal Reserve Bank-Replacement Purchases Made by Retailers to Meet Demand. "A stronger undertone of confidence and a noticeable expansion in the demand for merchandise were outstanding developments in the Eleventh (Dallas) District during the past month," stated the Federal Reserve Bank of Dallas in its "District Summary" contained in its Feb. 1 "Monthly Business Review" compiled Jan. 15. Continuing, the Bank said that "sales of department stores in principal cities feflected an increase of 63% over the previous month, which was considerably larger than seasonal, and exceeded those of the closing month of 1932 by 22%." In its "District Summary" the Bank added: Improvement While wholesale distribution is usually quiet in December, sales in some lines were greater than in November, and in others the declines were less than seasonal. Sales in all reporting lines were substantially larger than a .year ago. Due to the active consumer buying, many retailers had to make replacement purchases to meet the demand. Collections were well sustained during the month. Debits to individual accounts were 12% larger than in either the previous month or the corresponding month last year. Reflecting the improved trade conditions, the number of commercial failures remained near the low November figure and the liabilities of defaulting firms were smaller than in any month since July 1927. General rains over a large portion of this District since late in December have greatly benefited winter crops and livestock ranges. Nevertheless, there remains a deficiency in sub-soil moisture due to the fall drouth, and much additional rainfall is needed to overcome this shortage.. Farmers 939 Financial Chronicle Volume 138 generally have made good progress with winter plowing. Ranges are still in poor condition over a large area, but livestock have held up fairly well. Member bank deposits showed a further expansion in December. The daily average of combined net demand and time deposits amounted to $680,863,000 as compared with $654,145,000 in November,and $613,028,000 in December 1932. This figure is the highest reported since late in 1931, and is $100,000,000 above the low point reached in August 1933. Federal reserve bank loans to member banks totaled only $440,000 on Jan. 15, as compared with $1,003,000 a month earlier, and $4,369,000 a year ago. Following the Christmas buying season there has been a substantial return flow of Federal reserve currency. The actual circulation on Jan. 15 totaled $51,909,000 as compared with $54,102,000 on Dec. 15, and $37.515,000 at the middle of January last year. Construction work showed some improvement during the month. The valuation of building permits in December was 17% larger than the low November figure, but was still 29% below that a year earlier. The Bank had the following to say as to wholesale and retail trade conditions: Wholesale Trade. Business at wholesale in this District during December made a generally favorable showing, and the underlying sentiment of confidence on the part of both retailers and consumers continued to be well in evidence. Increased sales over the preceding month were reported in the lines offarm implements and drugs, the latter being contrary to seasonal tendency. In two other lines the decreases occurring were of less than the usual seasonal amount. All lines continued to show a substantial expansion as compared with the same month a year ago, and in three cases the increase was larger than in November. Aggregate sales reported during the last six months of 1933 reflected gains over the same period in 1932 ranging form 4.4% in the case of drugs to 136.4% in the case of farm implements. Stocks on hand at the close of December were smaller than on Nov. 30 in every reporting line. A decline from the previous month was reflected in the total volume of collections during December, but the reduction was smaller than seasonal. Reports from wholesale dry goods firms in this District indicate that business held up well during December. "While sales totaled 41.0% less than in the previous month, this reduction is somewhat smaller than usually occurs in this month. An expansion of 42.5% over December 1932, was registered, whereas the like increase amounted in November to 27.0% and in October to only 8.5%. Inventories on Dec. 31, while slightly less than a month earlier, showed an increase of 78.3% over a year ago. A decline of only 1.4% as compared with November was reflected in the volume of collections during the month. December witnessed a further contrary to seasonal increase of 0.9% in the demand for drugs at wholesale, and sales were in 4.3% greater volume than in the same month a year ago. Business was somewhat spotty, being appreciably better in some areas than in others. Inventories are being held at low levels, the total on Dec. 31 being less than a month earlier or a year ago. Collections were larger than in November. The business of wholesale hardware firms in this District reflected a smaller than seasonal decrease of 2.1% as compared with November, and was on a scale 67.7% larger than in December 1932. Despite the further improvement, buying in certain scattered sections followed the downward trend which is generally to be expected at the year-end. A slight reduction in collections was reported. While the demand for groceries at wholesale in December showed a seasonal recession of 10.8%, the comparison with a year ago continued to be favorable. The month's sales were 14.3% above those in the closing month of 1932, and the total volume between July 1 and Dec. 31 was 12.9% larger than in the same period in the earlier year. Collections declined seasonally in December by 7.8% Reflecting to some extent the effect of seasonal influences, the distribution of agricultural implements through wholesale channels during December was on a scale 8.2% larger .than in the preceding month. As compared with the same month last year there was an increase of 312.9%. Total dollar sales during the latter half of 1933 showed an expansion of 136.4% over those in the corresponding period in the previous year. As is usual at this season, collections fell off appreciably during the month. Retail Trade. The active demand for merchandise, which has been in evidence during the past several months at department stores in principal cities of the Eleventh District, increased further in December. The total dollar volume of sales was 63.3% greater than in November, which was considerably larger than the average seasonal increase for that month, and was 22.1% above that in December 1932. It is significant to note that the increased buying during the last five months of 1933 was sufficient to more than offset the declines registered in the early months of the year, and as a result total distribution of merchandise during the entire year was 1% greater than in 1932. Due to the larger than seasonal increase in sales, this bank's seasonally adjusted index advanced from 66.3% of the 1923-25 average in November to 78.2% in December, which is the highest figure recorded since Dec. 1931. Inventories held on Dec. 31 were 25.4% less than a month earlier, but they remained 8.3% greater than those on hand a year ago. The stock turnover of all reporting firms during 1933 was 2.97, as compared with 2.75 in 1932. December collections reflected a seasonal increase over the previous month, and were proportionately greater in volume than in any month since November 1929. The ratio of collections during December to accounts outstanding on the first of the month was 36.8%. as against 35.0% in November, and 32.9% in December 1932. Based on carloadings, bank debits and power production, the Bank of America Index is weighted and adjusted for seasonal fluctuations and trend. It covers California, Washington, Oregon, Nevada, Idaho, Utah and Arizona. A review of conditions in industries whose operations influence the factors which determine the index figures discloses a substantial improvement in business throughout the Western area. Virtually every section reports increases in the number of persons employed and a decided change in general business, with actual profits supplanting month-by-month deficits. Bank deposits in the Twelfth (San Francisco) Federal Reserve District are making consistent increases over the corresponding periods of a year ago and higher agricultural and commodity prices are returning a fair degree of prosperity to individuals and entire communities. A revival in thegigantic California wine industry already has contributed importantly to the welfare of the West with a revenue of many million dollars over a few months' time. Similarly, the reopening of the breweries and the consequent development of widespread activity in barley and hops has aided the residents of the West. Meanwhile the extensive and varied mining industry, the highly important petroleum industry, shipping, lumber, general construction and a score of other great industries are becoming stable and showing a new vigor that promises better times in 1934. Failures Drop 55.3% From January 1933 Total. Insolvencies in the United States in the month of January were the lowest in number for that month for many years. The records of Dun & Bradstreet, Inc., show 1,364 such defaults last month, compared with 1,132 for the preceding month and 2,919 in January a year ago. The change that has taken place during the past year in the matter of business failures has been very remarkable. The reduction in the number of such defaults from January 1933 to the present year was 1,555, a decline of 53.3%. Some large failures last month increased the total of liabilities somewhat, although the amount was very much smaller than for January in a number of years past. The aggregate of indebtedness reported for defaults that occurred last month was $32,905,428. These figures compare with $27,200,432 of liabilities recorded for December last, and $79,100,602 for January a year ago. The change for the better in respect to the report of business failures, especially during the closing months of 1933, has been fully maintained in January. The monthly and quarterly failure figures, showing the number and the amount of liabilities, are contrasted below: Liabilities. Number. January 1934. 1933. 1932. 1934. 1933. 1932. 1,364 2,919 3,458 $32,905,428 $79,100.602 $96,860,205 1,132 1,237 1,206 2.469 2,073 2,273 527.200,432 $64.188,643 ,353,376 53,621,127 30,581,970 52,869,974 December November October $83,135,778 5170.679.744 3.575 6.815 _FAILURES BY FEDERAL RESERVE DISTRICTS FOR JANUARY. 4th quarter _ _ _ Number. Distrias. 1934. 1 Boston 2 New York_ _ _ 3 Philadelphia 4 Cleveland_ _ .._ 5 Richmond ...._ 6 Atlanta 7 Chicago 8 St. Louis_ _ 9 Minneapolis._ 10 Kansas City 11 Dallas 12 San Francisco Total 154 407 62 104 98 51 175 32 30 48 27 176 1,364 1933. 289 691' 172 251 187 176 426 121 100 114 98 294 2,919 1932. 308 827 215 322 159 188 495 158 74 157 178 377 3,458 1934. $3,615,890 12,952,915 1,320,187 1,997,895 1,764,717 759,559 4,802,422 756,504 414,803 403,280 502.373 3,614.883 1933. $6,560,018 23,670,938 3,816,081 5.950,899 3,056.287 5,372,172 19.178,728 1,863,582 1,207,057 1,842,215 1,693,202 4.889,423 1932. $6,067,674 21,799,474 12,201,411 9,628,302 2,404.390 5,608,107 18,699,822 3,918,464 670,578 5,691,600 4,051,626 6.118,757 $32,905,428 $79,100,602 596.860.205 Orders at Lumber Mills During First Five Weeks of 1934 Show 23% Gain Over Same Period of 1933. Lumber production and new business received during the week ended Feb. 3 at the sawmills of the country were somewhat less than during the two preceding weeks; shipments were heavier than for any week of the year, according to telegraphic reports to the National Lumber Manufacturers Association from regional associations covering softwood mills. The Index of Far Western Business of Bank of America the operations of leading hardwood and mills whose production American 1,207 reports were made by (California) for December at Highest Level in Past 'was 142,810,000 feet; shipments 143,066,000 feet; orders 20 Months. Ending the most eventful year in a generation with a de- 165,210,000 feet. Revised figures for the preceding week for cided upturn, the Bank of America (California) Index of Far 1,265 mills were production 152,019,000 feet; shipments 138,Western Business registered 64.7 (preliminary) in December, 595,000 feet; orders 187,792,000 feet. Further reviewing the highest point reached in the past 20 months. The Bank activities in the lumber industry, the Association stated: During the week ended Feb. 3, all softwood regions but California redof America announced that the December index number wood and Northern hardwoods reported orders above production, total represents an advance of 10.9 points over the record low of softwood orders being 16% above output; hardwood orders, 11% above hardwood production. All regions reported orders above those of corresMarch, when the index mirrored conditions which accomponding week of 1933, total softwood orders being 26% above those of panied the Nationwide moratorium by dipping to 53.8. last year and hardwoods registering similar gain of 26%. Production A quick recovery was recorded with the figure of 56.5 in during the week ended Feb. 3 1934 was 49% above that of a year ago April, after which the index climbed steadily during the and shipments were 26% above those of the same week of 1933. During the five weeks of 1934 to date, identical mill reports show proharvest season and closed the year with a vigorous upturn, duction 37% above that of the same period of 1933; shipments 11% above reflecting a brighter outlook throughout the Pacific and those of last year and orders received 23% above orders of the same 1983 period. Rocky Mountain States. Continuing the bank said: Financial Chronicle 940 Unfilled orders at the mills on Feb. 3 were the equivalent of 21 days' average production of reporting mills compared with 19 days' on similar date of 1933. Forest products carloadings totalled 20,615 cars during the week ended Jan. 27 1934, which was an increase of 968 cars above the preceding week, 6,176 cars above the same week of 1933 and 1,651 cars above similar week in 1932. Lumber orders reported for the week ended Feb. 3 1934, by 821 softwood mills totaled 143,720,000 feet, or 16% above the production of the same mills. Shipments as reported for the same week were 123,643,000 feet, or 0.1% above production. Production was 123,475,000 feet. Reports from 407 hardwood mills give new business as 21,490,000 feet, or 11% above production. Shipments as reported for the same week were 19,423,000 feet, or 0.5% above production. Production was 19,335,000 feet. Unfilled Orders and Stocks. Reports from 1,268 mills on Feb. 3 1934, give unfilled orders of 718,332,000 feet and 1,232 mills report gross stocks of 4,535,599,000 feet. The 548 identical mills report unfilled orders as 508,446,000 feet on Feb. 4 1934, or the equivalent of 21 days' average production, as compared with 458,056,000 feet, or the equivalent of 19 days' average production on similar date a year ago. Identical Mill Reports. Last week's production of 396 identical softwood mills was 113,038,000 feet, and a year ago it was 74,706,000 feet; shipments were respectively 111,192,000 feet and 87,474,000; and orders received 130,629,000 feet and 104,005,000 feet. In the case of hardwoods, 222 identical mills reported production last week and a year ago 13,234,000 feet and 10,192,000; shipments 13,117,000 feet and 11,355,000 and orders 14,596,000 feet and 11,628,000 feet. SOFTWOOD REPORTS. 1Vest Coast Movement. The West Coast Lumbermen's Association reported from Seattle that for 487 mills in Washington and Oregon and 22 in British Columbia reporting, shipments were 18% below production, and orders 5% above production and 28% above shipments. New business taken during the week amounted to 95,439,000 feet (previous week 111,907,000 at 519 mills); shipments 74,319,000 feet (previous week 70,510,000) ; and production 90,658,000 feet (previous week 86,737,000). Orders on hand at the end of the week at 553 mills were 375,114,000 feet. The 184 identical mills reported a gain in production of 66%, and in new business a gain of 32%, as compared with the same week a year ago. Southern Pine. The Southern Pine Association reported from New Orleans that for 133 mills reporting, shipments were 8% above production, and orders 24% above production and 15% above shipments. New business taken during the week amounted to 26,626,000 feet (previous week 24,864,000 at 155 mills) ; shipments 23,206,000 feet (previous week 24,106,000); and production 21,552,000 feet (previous week 28,671,000). Orders on hand at the end of the week at 133 mills were 76,074,000 feet. The 85 identical mills reported a loss in production of 8%, and in new business a gain of 9%, as compared with the same week a year ago. Western Pine. The Western Pine Association reported from Portland. Ore., that for 122 mills reporting, shipments were 48% above production, and orders 45% above production and 2% below thipments. New business taken during the week amounted to 25,855,000 feet (previous week 34,508,000 at 139 mills) ; shipments 26,4,53,000 feet (previous week 30,435,000) ; and production 17,859,000 feet (previous week 20,742,000). Orders on hand at the end of the week at 122 mills were 99,689,000 feet. The 103 Identical mills reported a gain in production of 96%, and in new business an increase of 20% as compared with the same week a year ago. Northern Pine. The Northern Pine Manufacturers of Minneapolis, Minn., reported production from 15 American mills as 329,000 feet, shipments 1,811,000 feet and new business 1,403,000 feet. Orders on hand at the end of the week were 4,848,000 feet. California Redwood, The California Redwood Association of San Francisco reported production from 20 mills at 6,204,000 feet, shipments 6,828,000 feet and new business 4,017,000 feet. Orders on hand at the end of the week were 28,113,000 feet. Eleven identical mills reported production 58% greater and new business 11% greater than for the same week last year. Southern Cypress. The Southern Cypress Manufacturers' Association of Jacksonville, Fla., reported production from 23 mills as 1,121,000 feet, shipments 2,622,000 feet and new business 1,771,000 feet. Orders on hand at these mills at the end of the week were 3,535,000 feet. Northern Hemlock. The Northern Hemlock and Hardwood Manufacturers Association, of Oshkosh, Wis., reported softwood production from 21 mills as 731,000 feet, shipments 954,000 and orders 1,373,000 feet. Orders on hand at the end of the week at 13 mills were 3,889,000 feet. The 13 identical mills reported a gain ot 179% in production and a gain of 221% in new busi nese, compared with the same week a year ago. HARDWOOD REPORTS. The Hardwood Manufacturers Institute, of Memphis, Tenn., reported production from 386 mills as 17,262,000 feet, shipments 17,982,000 and new business 19,706,000. Orders on hand at the end of the week at 386 mills were 120,008,000 feet. The 209 identical mills reported production 20% greater and new business 19% greater than for the same week last year. The Northern Hemlock and Hardwood Manufacturers Association, of Oshkosh, Wis., reported hardwood production from 21 mills as 2,073,000 feet, shipments 1,441,000 and orders 1,784,000 feet. Orders on hand at the end of the week at 16 mills were 7,062,000 feet. The 13 identical mills reported a gain of 248% In production and an increase of 113% In orders, compared with the same week last year. Automobile Financing During December 1933. A total of 108,606 (preliminary) automobiles were financed in December, on which $35,217,934 was advanced, compared with 135,584, on which 6,063,578 was advanced, in Feb. 10 1934 November, and with 82,110, on which $27,025,018 was advanced, in December 1932, the Department of Commerce reported on Feb. 7. Volume of wholesale financing in December was $17,060,916 (preliminary), as compared with $18,364,889 in November and $20,130,580 in December 1932. Monthly statistics on automobile financing, based on data reported to the Bureau of the Census by 456 identical organizations, are presented in the table below for July to December 1933; for 282 identical organizations from November 1932 to December 1933; and for 313 identical organizations for 1932. Changes in the number of reporting financing organizations between 1932 and 1933 are due primarily to organizations going out of that business; the increase in the number of reporting organizations from July to December 1933 resulted from the inclusion of additional organizations. The changes in the number of organizations included have not greatly affected the totals, as is indicated by comparisons for the same months appearing in the two summaries. Data for years 1928 to 1931 are available on request. AUTOMOBILE FINANCING. Retail F wincing. Year and Month. 1Vholesale Financing Volume In- Dollars. New Cars Financed. Total. Number of Cars. Number of Cars. Volume in Dollars. Volume In- Dollars. Summary for 313 Identical Urge. ntzations. 1932. January February March April May June July August September October November December Total (Year)_ 122,344 123,574 140,779 155,691 164.721 177.961 132,467 131,069 111,189 97,922 82,161 82,110 44.628,529 44,829,138 51,148,285 56.415,652 58,435,573 63,169,095 44,716,907 45.068.741 38,837,225 33,623,573 27,727,369 27.025,018 41,375 40,780 46.234 57,661 63.885 74,205 45,816 46,416 39,513 31,241 24,666 26.194 23,475,671 23,623,496 26,887,515 31,835,792 33,590.555 38.329,334 24,149,326 24,644,532 21,551,246 17,644.406 13,980,978 14.090,821 330,267,440 1,521,988 535,625,105 537.986 293,803,672 81.114 81.763 26.879.830 26,830,514 24,382 26,047 13.417.769 13.955,843 92,083 87,512 101.456 132,088 168.328 185,286 182,244 198,911 173,770 162,140 126,855 al00.457 31,280.101 29,188,663 33,546,689 45,337,026 58.192,788 65,514,154 65,152,510 71,186,944 62,538,790 57,502,969 43,889,055 33,124,069 35,546 32,609 38.329 55,571 75,025 84,358 84,282 91.617 78,379 70,669 49,719 32.467 18.327.630 16,842,415 19.463,540 28,225,885 37,475,257 43,004,313 43,333,572 47,290,779 489,984,028 1,711,130 596,453,758 728.571 375,712.921 68,522,672 74,813,725 65,665,515 60.316,106 46.063,578 35.217,934 86,920 94,613 80,928 73,002 51,356 33.729 44,696.167 48.860,024 42,166,003 37,940,369 27.077,214 18,486,989 34,841.766 33,276,393 34.121,364 33.903,704 38,608,439 43,682,471 26.016.028 22.104,084 18,676.535 13,131,603 11,774,473 20,130,580 Summary for 282 Identical Olga ntzattons. 1932. November December 1933. January February March April May June JUIY August September October November December Total (Year)__ - - 11,726.436 20,100,974 30,133,915 27.514,6.54 27,706,336 40,840,508 55,005,590 56,937,616 57.866,453 69,613,121 51.127,428 38,962,531 17,703,226 16,572,650 40,887,086 36,790,012 26,278,194 17,794,238 Summary for 456 Identical Orga nizatfons. 1933. July August September October November December 58,793.704 194,552 70,705,795 211,708 52,276,214 184,998 39,776,604 172,432 18.364,889 135.584 17,060,916 b108,606 Retail Financing. Year and Month. Used Cars Financed. Number of Cars. Volume In Dollars. Unclassified. Number of Cars. Volume in Dollars. Summary for 313 /den& at Organizat ions. 1932. January February March April May June July August September October November December Total (Year) 77,321 78,802 90,121 93,398 96,010 99,513 82.687 80,648 67,724 63,791 54,696 53,609 19,974,286 19,941.665 22,779,892 23.066,269 23,257,953 23,394,676 19,225.478 18,908,584 15,989,259 15.035.731 12,833.770 12.174,121 3.648 3,992 4,424 4,632 4,826 4,243 3,964 4,005 3.952 2,890 2,799 2.307 1.178,572 1,263,977 1,480.878 1,513.591 1.587,065 1,445.085 1.342,103 1,515.625 1,296,720 943.436 912,621 760,076 938,320 226,581,684 45,682 15,239,749 898,225 785.154 Summary for 282 Identic at Organizat ions. 1932. 53,973 November December 53,298 12.563,836 12,089,517 2,759 2,418 54,234 52,796 60.625 73,267 89.260 96.741 93,930 103,161 91.611 87,998 74,458 65,392 12,173,577 11,725,419 13,335.403 16,106,512 19.428,060 21,181,515 20,542,189 22,535.753 20,392,629 19,665.186 16,740.762 14,532,165 2.303 2,107 2,502 3,250 4,043 4.187 4,032 4,133 3,780 3,473 2,678 2,598 943,473 208,359,170 39,086 12,381,667 4.072 4,178 3,805 3,483 2,678 2,598 1.288,608 1.372,992 1,267.934 1,052,633 870.099 797.666 1933. January February March April May June July August September October November December Total (Year) 778,894 620,829 747,746 1,004,629 1,289,471 1,328,326 1,276.749 1,360,412 1,259,075 1.047,771 870,099 797,666 Summary for 456 Ideate at Organized ions. 1933. July August September October November December 103,554 112,917 100.265 95,947 81,550 72,279 22,538,097 24.580,709 22,231,578 21,323,104 18,116,265 15,933,279 a Of this number 32.3% were new cars, 65.1% used cars, and 2.6% unclassified. b Of this number 31.1% were new cars, 66.5% used cars. and 2.4% unclassified. Financial Chronicle Volume 138 Production of Lumber During the Four Weeks Ended Jan. 27 1934 Exceeded Same Period Last Year by 37%-Shipments Were 8% Greater-Orders Received Increased 23%. We give herewith data on identical mills for the four weeks ended Jan. 27 1934, as reported b3i the National Lumber Manufacturers' Association on Feb. 3: An average of 613 mills reported as follows to the "National Lumber Trade Barometer" for the four weeks ended Jan. 27 1934: Production. Shipments. (In 1,000 Feet.) Orders. 1934. 1933. 1934. 1933. 1934. 1933. 432.439 64,805 327,262 34,799 400,329 43,307 363,597 47,229 481,581 48,444 389,061 43,051 Total lumber.._ _ 497.334 362.061 443.636 410.826 530.025 432.112 Softwoods Hardwoods Production during the four weeks ended Jan. 27 1934 was 37% greater than during corresponding weeks of 1933. as reported by these mills, and 22% above the record of comparable mills during the same period of 1932. 1934 softwood cut was 32% above that of the same weeks of 1933 and hardwood cut was 86% greater than in 1933. Shipments during the four weeks ended Jan. 27 1934 were 8% greater than those of corresponding weeks of 1933, softwoods showing gain of 10%; hardwoods, loss of 8%. Orders received during the four weeks ended Jan. 27 1934 were 23% greater than those of corresponding weeks of 1933 and 22% less than those received during similar weeks of 1932. Softwoods showed gain of 24% as compared with similar period of 1933; hardwoods, gain of 13%. On Jan. 27 1934 gross stocks as reported by 337 softwood mills were 2,528.974,000 feet. or the equivalent of 119 days' average production of reporting mills, as compared with 2,755.752,000 feet on Jan. 28 1933, the equivalent of 130 days' average production, the average being for the three years 1931, 1932, 1933. On Jan. 27 1034 unfilled orders as reported by 572 mills, cutting hardwoods or softwoods or both, were 507,668,000 feet, or the equivalent of 21 days' average production, as compared with 461,816,000 feet on Jan. 28 1933. the equivalent of 19 days' average production. Mid-West Distribution of Automobiles at Both Wholesale and Retail Decreased from November to December-Above December 1932-Decrea se Noted from November in Orders Booked by Furniture Manufacturers. In reviewing automobile production and distribution during December, the Federal RE serve Bank of Chicago states that "lack of new models accounted for the heavy recessions from November shown during December in mid-West distribution of automobiles." The Bank, in its Jan. 31 "Business Conditions Report," said that "sales at retail and wholesale moderately exceeded in aggregate number those of December 1932, but the number of used cars sold gained more markedly in the comparison." The Bank continued: It will be noted in the table that both wholesale and retail distribution for the year as a whole were considerably in excess of the year 1932, while stocks carried averaged much lighter than in that year. December deferred payment sales of dealers reporting the item, amounted to 53% of their total sales for the month, representing a rather sharp rise from the 44% reported by the same dealers for November and comparing with only 47% for December of 1932. MIDWEST DISTRIBUTION OF AUTOMOBILES, December 1933 Per Cent Change from Hew Cars: WholesaleNumber sold Value RetailNumber sold Value On band end of monthNumber Value Used cars: Number sold Salable on handNumber Value *Average end of month. Cal. Year Companies 1933 Included Ch'ge from Cal. Year Nov. Dec. Year • 1932. 1933, 1932. 1932. Nov. 1933. Dec. 1932. -24.9 -25.7 +10.1 +11.1 +51.8 +23.1 16 16 11 11 11 11 -52.4 -48.0 +9.0 -11.0 +37.3 +19.0 57 57 36 30 36 36 --6.4 --8.9 -41.6 -54.3 57 57 36 36 36 36 --26.7 +27.3 +10.6 57 36 36 --5.3 --11.1 +23.8 +11.0 *-6.6 --34.6 57 57 36 36 36 36 With regard to orders booked by furniture manufacturers in the Chicago District, the Bank said: Although the 6% recession from November in December orders booked by furniture manufacturers reporting to this Bank continued a decline in the month-to-month comparison unbroken since July, the current volume, nevertheless, was greater than in December a year ago, the gain amounting to 23%. Shipments also were considerably in excess of those a year ago-by 37%- despite a drop of 14% from the preceding month. Unfilled orders outstanding on Dec. 30 amounted to 71% of current orders, a decline of seven points from the ratio of a month previous-recession In this item having been continuous beginning with September as shipments have exceeded each month current orders. The rate of operations during December averaged 47% of capacity, eight points under that of November. and five points above the December 1932 ratio. For the entire year 1933, orders booked showed an increase over 1932 of 19% and shipments one of 13% . These gains were effected despite the continuance through April 1933 of the declining trend in the yearly comparison operative since November 1929. Beginning with May, with a single exception in the volume of orders booked, the comparison with a year previous has shown each month a marked gain. As compared with the six-year average. 1027-32, orders booked in 1933 were 61% and shipments 63% lower. 941 Employment and Payrolls in Chicago Federal Reserve District Increased from Nov. 15 to Dec. 15-Increase of 20% Noted in Employment During 1933. The Federal Reserve Bank of Chicago, in reporting that "employment in the Seventh (Chicago) District at the close of 1933 was more than 20% larger than a year earlier, and in about the same volume as in December 1931," stated that "a rise of 3% over the preceding month was affected largely through the return to work in Michigan automobile factories of about 20,000 men laid off during November." In its "Business Conditions Report" of Jan. 31 the Bank further said: Other manufacturing industries contributed to the rise in the monthly comparison, chemicals increasing employment 734% and rubber goods industries 1(4%. Among the non-manufacturing groups, merchandising and coal mining followed the usual seasonal movement for December, with gains of 8% and 7%, respectively, in their employment volumes. Practically no change in the number of workers was shown by metals, paper and printing, and in public utility concerns. The largest losses reported for the month-11% in construction and 15% in stone, clay, and glass industries-were of a seasonal character. Aggregate payrolls in December exceeded those of November by 2%%; all groups that showed a rise in employment, except rubber products, contributed to this gain. Four-metals, foods, leather, and paper and printing-advanced wage payments without a corresponding gain in men employed, increases in wage rates as well as longer working hours being responsible for these advances. While total payrolls were more than 25% higher than in December 1932, they were below those of December 1931 by about 15%. EMPLOYMENT AND EARNINGS-SEVENTH FEDERAL RESERVE DISTRICT. Week of Dec. 15 1933. Industrial Group. No. of Number Reportof Wage tna Firms. Earners. Metals and products_a Vehicles Textiles and products Food and products Stone, clay and glass Wood products Chemical products Leather products Rubber products.b Paper and printing 831 187 150 413 150 289 120 82 8 339 Total mfg., 10 groups Merchandising_c Public utilities Coal mining Construction 2,569 283 80 18 311 692 Total non-mfg., four grouPs-- Earnings. Per Cent Change from Nov. 151933. EarnWage Earners. ings. 93,142,000 3,789,000 449,000 1,581,000 133,000 354,000 387,000 298,000 131,000 1,112,000 -0.1 +15.1 -4.0 -4.2 -14.7 -7.8 +7.5 -1.9 +1.7 +1.9 +10.5 -9.2 +1.0 -10.3 -7.3 +5.5 +1.0 -2.8 +0.9 593,127 $11.376,000 44,939 810,000 80.508 2,228,000 3,886 75.000 9,444 185,000 +3 0 +8.2 -0.0 +7.2 -11.2 +3.4 +6.2 -2.4 +11.1 -16.8 +1.8 -1.1 167,580 187,098 31,293 77,780 7,393 25,547 18,569 18,322 7,100 52,445 138,777 3,298,000 Total 14 groups 3,261 731,904 914,674,000 +2.3 +2.8 a Other than vehicles. b Michigan and Wisconsin. c Illinois and 'Wisconsin. Increase of 14% Noted in Department Store Sales During December as Compared with December 1932-Sales of Four of Five Commodities at Wholesale Higher. "December trends in the merchandising of commodities, both at wholesale and retail, were decidedly favorable, gains over November in the various reporting groups of retail trade being heavier than usual for the month, while in -wholesale lines declines were less than seasonal and increases greater than average for the period." The Jan. 31 "Business Conditions Report" of the Federal Reserve Bank of Chicago,from which the foregoing was taken,further noted: In the wholesale grocery, hardware, and dry goods trades respective declines in December from the preceding month of 3, 3i, and 15% compared with recessions in the 1923-32 average of 7, 11, and 22%. respectively. Drug sales gained 17% in the monthly comparison, as against a seasonal expansion of only 1%; and electrical supply sales expanded 2334%. as compared with an average gain of 8%, Increases over December 1932 were much larger in hardware, dry goods, drugs, and electrical supplies than in the year-ago comparison for November; but the decrease shown in grocery sales totaled larger than a month previous, although the majority of firms reported heavier sales than a year ago. In the calendar year 1933, grocery sales failed to equal those of the preceding year by 5% the months of July, August, and October alone recording a gain in the yearly comparison; and drug sales likewise totaled smaller. by 10% , with only four months of the year showing increases over 1932. Dry goods, hardware, and electrical supply sales, however, had aggregate gains for the year 1933 over 1932 of 2, 5, and 23%. respectively, as increases in the yearly comparison were recorded in every month subsequent to April. Stocks in all groups totaled larger at the end of 1933 than at the close of the preceding year. WHOLESALE TRADE IN NOVEMBER 1933. Commodity. Per Cent Change From Same Month Last Year. Net Sales. Stock;. Accounts ColOutstancrg. lections. Ratio of Accounts Outstand'g to Net Sales. Groceries -6.2 +17.8 -7.1 +1.2 120.8 Hardware +53.0 +4.1 +7.6 +23.0 246.5 Dry goods -5.5 +14.0 +35.9 282.4 +16.0 Drugs +15.0 +f.6 -3.9 +2.0 199.7 Electrical supplies +56.3 +15.8 +24.3 +24.2 157.0 The expansion in Seventh District department store trade for December over a month previous amounted to 6234% in 1933, representing with one exception (1031), the largest increase in December business on our records (from 1923) and comparing with a gain of 50% in the 1923-32 average for the month. Of the larger cities, Detroit showed the heaviest increase in this comparison-74% -Indianapolis trade graining 70%, Chicago 62%, Milwaukee 45% and the total for stores in smaller cities 60%. It will Financial Chronicle 942 be noted in the table that Chicago business alone recorded a gain for the year 1933 over 1932, but that December gains over the same month a year ago brought the yearly total for the District to within 1% of the 1932 volume. Although the rate of stock turnover in the last four months of the year was slightly slower than in the corresponding month a year previous, turnover for the year 1933 of 3.83 times compared with 3.63 times for 1932. Retail shoe dealers and the shoe departments of department stores sold a dollar volume in December that was 47% in excess of November sales and 11% heavier than in the same month of 1932. The 1925-32 gain for December over November averaged 37%. With eight months of 1933 failing to show as large sales as in corresponding months a year previous, total sales for the year were 4% less than in 1932. Year-end stocks were 5% heavier than on Dec. 31 1931-32. The retail furniture trade expanded considerably more than seasonally In December, sales of reporting dealers and department stores aggregating 30% larger than in the preceding month, as against an increase of but 18% in the 1927-32 average for December. Furthermore, a gain of 16% over December a year ago brought sales for the year to 2% above those for 1932. Stocks on Dec. 30 totaled 12% in excess of those held at the close of the preceding year. Aggregate December sales of 14 reporting chains, operating 2,550 stores in the month, increased 60% over those of the preceding month and were 10% greater than for December a year previous. All groups, which included grocery, drug, five-and-ten-cent stores, cigar, musical instrument shoe, and men's clothing chains, shared in the gain over November, and all except grocery and cigar chains had heavier sales than a year ago. Sales for the calendar year 1933 totaled larger in drugs, musical instruments, and five-and-ten-cent stores than for 1932, but in other groups were less. Aggregate 1933 sales of the 14 chains exceeded those of 1932 by 1% • while average sales per store were 3% heavier. DEPARTMENT STORE TRADE IN DECEMBER 1933. Per Cent Change December 1933 from December 1932. Locality. Chicago Detroit Indianapolis Milwaukee Other cities . Seventh District % Change Year 1933 from Year 1932. Ratio of December Collections to Accounts Outstanding End of November. Net Sales. Stocks End of Month. Net Sales. 1933. 1932. +15.8 +8.5 +10.9 +10.5 +21.0 +28.6 -10.5 +49.9 +33.0 +0.0 +5.2 -13.5 -1.0 -3.5 -1.9 28.6 38.0 42.0 36.2 30.9 25.0 29.6 40.8 33.0 27.6 +14.0 +17.7 -1.3 33.9 29.3 Improved Business Conditions in St. Louis Federal Reserve District - Reports on Wholesale and Retail Trade Most Favorable Since Last Summer. "Continuing the trends noted during the similar period immediately preceding, general business and sentiment in the Eighth (St. Louis) District during the past 30 days developed quite decided improvement," states the Jan. 31 "Monthly Review" of the Fesieral Reserve Bank of St. Louis, compiled Jan. 22. The "Review" says that "reports relative to trade, both retail and wholesale, were on the whole the most favorable since last summer." We also take the following from the "Review" of the St. Louis Reserve Bank: In industry seasonal influences making for curtailment of activities were less in evidence than a year and two years earlier, and in certain lines were conspicuously absent. Resumption of activities at numerous manufacturing establishments following the holiday and inventorying period was more rapid than is ordinarily the case. The considerable inventories acquired by merchants during the summer and early fall of 1933 were heavily reduced by the holiday trade and generally freer buying of a routine sort by the public. Since Jan. 1 there has been a well defined disposition to replenish, as reflected in orders placed with producers and the wholesale and jobbing interests. In all lines investigated by this bank except clothing, the volume of December business was in excess of that during the same period in 1932, and in a number of instances greater than in December 1931. The movement of seasonal merchandise, which had been retarded by unusually mild weather in the fall and early winter, was greatly stimulated by the drop in temperatures during the last half of December. The holiday trade generally through the District, but more particularly in the South, was in considerably larger volume than a year ago. Sales of automobiles in December showed the usual decline from November, but were measurably larger than during the closing month of 1932. Consumption of electricity by industrial plants in the principal cities of the District in December was greater than for the same month during the preceding year. Activities in the iron and steel industry declined in less than the usual amount in December, and shipments of pig iron to District melters reached the highest total for that month since 1929. Production of bituminous coal in fields of the District declined slightly from November to December, and the output for the latter month was moderately smaller than a year earlier. Weather conditions throughout the District were unusually favorable for agriculture during the fall and early winter. Late crops were harvested and housed with a minimum loss of quantity and quality. In all sections, but more particularly in cotton areas, plowing and preparations for spring crops are considerably in advance of the usual seasonal schedule. Markets for the 1933 tobacco crops opened in late December and early this month, with generally liberal offerings. Due to dissatisfaction of producers with prices, however, sales were temporarily suspended, and the crop is slow in moving into consumptive channels. The trend of cotton prices continued upward, and at the middle of January scored a new high on the present crop. Prices of wheat, corn and oats also advanced sharply in the third week of January, practically recovering the losses sustained during December. Cattle and hogs remained at or about the low levels which hare obtained in recent months. The volume of retail trade in December, as indicated by sales of department stores in the chief cities of the District, was 15.9% greater than for the same month in 1932, and 52.8% larger than the November 1933 total; cumulative total for the 12 months of 1933 was 4.1% smaller than in 1932. Combined December sales of all wholesaling and jobbing firms reporting to this bank were 31% smaller than in November, but 29% greater than in December 1932; cumulative sales of these firms in 1933 were larger by 18% than in 1932. The dollar value of permits issued for new construction Feb. 10 1934 in the five largest cities of the District in December was 45.8% smaller than in November and 148.3% more than in December 1932; for the year, value of permits was larger by 88.9% than in 1932. Construction contracts let in the Eighth District in December exceeded those of the preceding month by 309% and the total was 106.5% larger than in December 1932; for the year, the total increased 3.4% over that of the preceding 12 months. Debits., to checking accounts in December were 8.6% and 10.7% greater, respectively, than a month and a year earlier; total debits for 1933 were 11.2% smaller than the 1932 aggregate. Freight traffic of railroads operating in this District, according to officials of the companies, declined in considerably less than the usual seasonal volume in late December. In some classifications the expected recession was entirely absent. As a result of the better than seasonal showing, total loadings for the year 1933 exceeded those of the preceding 12month period by a slight margin, though the total was still considerably below those recorded in 1931, 1930 and 1929, Mild weather prevailing through the early winter tended to restrict the movement of seasonal commodities, notably fuels. For the country as a whole, loadings of revenue freight in 1933 totaled 19,446,718 cars, against 18,518,905 cars in 1932 and 24,583,757 cars in 1931. The St. Louis Terminal Railway Association, which handles interchanges for 28 connecting lines, interchanged 61,258 loads in December, which compares with 64,684 loads in November and 59,513 loads in December 1932. During the first nine days of January the interchange amounted to 17,881 loads, against 17,179 loads during the corresponding period in December and 15,208 loads during the first nine days of January 1933. In 1933 there were 828,320 loads interchanged against 816,732 loads in 1932. Passenger traffic of the reporting lines decreased 7% in December as compared with the same month in 1932. Estimated tonnage of the Federal Barge Line between St. Louis and New Orleans in December was 105,700 tons, against 97,457 tons in November and 93,766 tons in December 1932. Tonnage handled during 1933 totaled 1,205,916 tons, which compares with 1,292,983 tons in 1932 and 1,170,319 tons in 1931. The steady improvement in collections, noted during the past several months, continued in December and the first half of January. Particularly favorable results were reported in the South, where higher cotton and rice prices have enabled producers of these commodities to considerably reduce their indebtedness to both merchants and banks. Delays in the marketing of tobacco, occasioned by unsatisfactory prices, unusually heavy rejections and temporary suspension of sales, have tended to restrict liquidation in sections where tobacco is the principal cash crop. January settlements with wholesalers in the main distributing centers were reported generally satisfactory, and measurably larger than a year ago. Chile Sets Wheat Price-Creates Export Board to Avoid Shortage of Grain-Price of Bread Fixed. From the New York "Herald Tribune" we take the following (United Press) from Santiago, Chile, Feb. 6: A law to assure wheat producers a fair price and avoid a wheat shortage was promulgated by the Government to-day. The measure authorizes an agricultural export board to buy wheat in case of overproduction, and take charge of imports in case of a shortage. The board will pay 60 pesos a quintal (currently $1.60 a bushel), and may fine any one buying wheat at a lower price. Resources are provided by authorizing the Central Dank to discount promissory notes issued by the board to a maximum of 120,000,000 pesos ($12,000.000). The law fixes the price of bread at 1.40 pesos (14 cents) a kilogram, first class, and1.30 pesos, popular class. Sugar Production for 1933-34 Crop Year Will Be Higher, According to Estimates-Consumption in United States Increased During 1933. According to Willett & Gray's first estimate of the sugar crops of the world for the campaign or crop year 1933-34, the grand total production of cane and beet sugar during this period will be 24,747,459 tons of 2,240 pounds each, as compared with 24,104,718 tons for 1932-33, or an increase of 642,741 tons. The American beet sugar crop was estimated at 1,450,000 tons, as against an actual output of 1,206,656 tons in 1932-33. Cuban production has been fixed by a decree by the Cuban President at 2,315,459 tons, as compared with 1,995,079 tons for the preceding year. The total consumption of all sugar in the United States during the calendar year 1933 is estimated at 5,270,366 long tons, equal to 93.60 pounds per capita, and compares with 5,213,961 tons in 1932, or 93.29 pounds per capita, an increase of 56,405 tons. The average yearly incnease in total consumption in the United States for 111 years was given as 4.841%. The following statistics are taken from Willett & Gray's annual number of the "Weekly Statistical Sugar Trade Journal" dated Jan. 111934: CONSUMPTION OF SUGAR IN THE UNITED STATES. Refined and (or) Consumption Value. (In Tons of 2.240 lbs.) 1933. 1932. Consumption of Sugar Manufactured by U. S. 1931. Cane C y Sugar Refinersu U. S. Atlantic Ports of New York. Th Baltimore 2,088,649 Beaten, Philadelphia and 2,175,044 2,319,239 425,309 Through Port of New Orleans 487,560 539,085 Through Savannah, Galveston and Texas 234,369 214,354 272,562 606,024 Through San Francisco 568,820 700,851 3,354.351 Total Consumption of White and Raw &tom Directly to TradeInsular and foreign white and raw sugar 776,180 through all United States ports Consumption of beet sugar manufactured by 1,139,835 United States beet sugar factories Total consumption of all sugar in the United 5,270,366 States 3,445,778 3,831,737 668,044 822.649 1,100,139 1,120,818 5,213,961 5.475,204 Volume 138 Financial Chronicle Inc. or Dec.from Per Capita. Previous Year. 93.60 lbs. + 1.082% 93.29 lbs. - 4.771% 98.47 lbs. - 2.218% 99.37 lbs. - 3.641% 108.13 lbs. + 4.842% 104.27 lbs. + 4.636% 100.95 lbs. - 6.600% 109.30 lbs. + 2.927% 107.50 lbs. +13.505% 95.90 lbs. + 1.544% Year1933 1932 1931 1930 1929 1928 1927 1926 1925 1924 Total Consumption. 5.270,366 tons as above 5,213,961 tons as above 5,475,204 tons as above 5,599,377 tons 5,810,980 tons 5,542,636 tons 5,297,050 tons 5,671,335 tons 5,510,060 tons 4,854,479 tcns Recapitulation. 1933. Apportionment Among the Various Producers- Tons. American Sugar Refining Co.'s production__ 854,132 Other United States refiners' production 2,500,219 Beet Sugar factories' production 1,139,835 United States direct consumption of white sugars 776,180 1931. Tans. 1,028,931 2,802,806 1,10,818 668.044 522.649 5,270,366 5,213,961 5,475.204 262,631 1,139,835 825.751 3,795 660,040 1,035,736 133,717 1,100,139 854,346 3,615 759,913 869,369 171,796 1,120,818 806.916 1,613 624,431 679,968 Total domestic 3,927,790 Cuba (cane) on which tariff concession Is allowed 1,335,707 3,721,099 3,405,542 1.470,753 2,036,217 Total preferential and non-dutiable sugars_ 5,263,497 Foreign consumed on which full duty assessed 6,869 5,191,852 22,109 5,441,759 33,445 5,270,366 5,213,961 SUGAR CROPS OF THE WORLD (IN TONS). (Willett et Gray's New Crop Estimates) Harvesting 1933-34, 1932-33. Period. United States-Louisiana Oct.-Jan. 180,000 198,892 Florida 32,143 Dec.-Apr. 45,000 Porto Rico Jan.-June 876,000 744,918 Hawaiian Islands Nov.-June 919,000 924,595 Virgin Islands, W. I Jan.-June 4,230 7.000 Cuba_c 1,995.079 Dec.-June 2,315,459 British West Indies-Trinidad Jan.-June 120,763 125,000 Barbados Jan.-June 96,021 100,000 Jamaica Jan.-June 66,000 55,364 Antigua Feb -July 24,175 20,000 St. Kitts Feb.-Aug. 22,000 24,166 Other British West Indies Jan.-June 7,526 7,000 French West Indies-Martinique Jan.-July 46.835 47,000 Guadeloupe Jan.-July 36,137 37,000 San Domingo Jan.-June 359.647 375,000 Hayti Dec.-June 26,000 25,302 Mexico Dec.-June 190,000 209,576 Central America-Guatemala Jan.-June 32,000 30.850 Other Central America Jan.-June 73,000 75,803 So. Amer.-Demerara--Oct., Dec.& May-June 130,000 135,000 Surinam Oct -Jan. 18,000 17,000 Venezuela' Oct.-June 20,000 23,324 Ecuador June-Jan. 20.000 20,000 Peru Jan -Dec. c421,287 425,000 Argentina June-Nov. 325,000 348.230 Brazil Oct.-Sept. 1,000,000 950,000 5,475,204 Total Consumption Consisted of Louisiana and Florida (cane) United States beet Hawaii (cane) Virgin Islands (St. Croix) (cane) Porto Rico (cane) Philippine Islands (cane) Total Total in America British India Java Formosa and Japan Philippine Islands 7,400,459 Australia Hp Islands June-Nov. June-Nov. Total in Australia and Polynesia Egypt Mauritius Reunion Natal Mozambique Jan.-June Aug.-Jan. Aug.-Jan. May-Jan. May-Oct. Total in Attica Europe-Spain Dec.-June Total cane sugar crops Europe-Beet-Germany Czecho-Slovakia Austria Hungary France Belgium Holland Russia and Ukraine Poland Sweden Denmark Italy Spain Switzerland Bulgaria Rumania Great Britain and Ireland_b Jugoslavia Other countries Total beet sugar crops 7,681,512 7,365,000 7,974,468 8,669,716 608,000 125,000 536,022 135,241 609.659 79,725 733,000 673,263 689,384 115,000 240,000 60,000 380,000 85,000 168,251 247,029 54,312 358,908 95,000 144,362 163,210 42,921 325.700 70,623 880,000 923,500 746,816 21,000 19,671 25,740 16,399,459 16.517,765 17,813,168 Sept.-Jan. 1,350,000 Sept.-Jan. 515,000 Sept.-Jan. 175,000 Sept.-Jan. 115,000 Sept.-Jan. 900,000 Sept.-Jan. 240,000 Sept.-Jan, 285,000 Sept.-Jan. 1,000,000 Sept.-Jan. 360,000 Sept.-Dec, 290,000 Sept.-Jan. 230,000 Aug.-Oct. 295,000 July-Feb. 274,000 Sept.-Jan. 7,000 Sept.-Jan. 30.000 Sept.-Jan. 140,000 Sept.-Jan. 450,000 Sept.-Jan. 68,000 Sept.-Jan. 119,000 1,065,992 627,569 164,905 103,410 1,015,370 264,254 243,008 800,000 422,139 235,351 191,770 322,875 263.533 6,900 29.311 48,710 336,362 85,883 95,676 6,843,000 6,323,018 7,436,241 1,450,000 55,000 1,206,656 57,279 1,025,217 48,254 8,348,000 7,586,953 8,509,712 Total in Europe United States-Beet_b Canada-Beet_ b 6,926.863 1931-32. 139,834 21,094 886,098 915,493 4,087 2,602,864 97,564 82,834 58,506 19,230 19,969 6,170 45,160 34,999 427,621 20.947 232,260 36,324 66,743 148,504 14,000 20,187 23,432 c395,895 346,470 1,015,227 Dec -May 4.675,000 4,651,000 3,970.000 May-Nov. 500,000 c1,380,449 c2,569,390 Nov.-June 790,000 797,678 1,147,550 Nov.-June 1.400,000 1,145,341 982,776 Total in Asia July-Jan. Oct.-Dec. 1,567,042 801,921 162,568 125.251 870,606 203,845 174,590 1,512,000 499,275 143,611 122,000 367,876 401,188 6,100 28,811 48.544 242.829 90,092 68,092 Grand total-Cane and beet sugar 24,747,459 24.104,718 26,322.880 Estimated increase in the World's production 642.741 a2,218,162 a2,154,136 a Decrease. b Refined sugar. c Under international agreement. Production of Flour Increased During January. General Mills, Inc., in presenting its summary of flourmilling activities from figures representing 90% of all four mills in the principal flour-milling centres of the United States, reports that 5,565,063 barrels of flour were produced during the month of January 1934. This compares with a production of 5,176,231 barrels in the preceding month and 5,302,129 barrels in the corresponding period last year. During the seven months ended Jan. 31 1934 flour output by the same mills amounted to 36,417,741 barrels as against PRODUCTION OF FLOUR. -Menthe)!January- -7 Mos. End. Jan.311933. 1934. 1934. 1933. Northwest 1,424,338 1,283,580 9324,972 9,842,490 Southwest 1 900,809 1,960,687 12,717,885 13,979,338 Lake Central and Southern 1 860,855 1,790,797 12,042,541 13,828,274 Pacific Coast 379,061 267,065 2,232,343 2,079,676 Grand total 1932. Tons. 946,168 2,499,610 1,100,139 943 39,729,778 barrels during the same period in the preceding year. The summary follows: 5 565,063 5.302,129 36,417,741 39.729.778 Shipments of Raw Sugar to United States from Puerto Rico Decrease-Refined Shipments Higher During Period from Jan. 1 to Feb. 3. Raw sugar shipments from Puerto Rico to the United States from Jan. 1 to Feb. 3 totaled 35,610 short tons-a decrease of 15.3% when compared with shipments of 42,028 tons during a similar period last year, the New York Coffee and Sugar Exchange announced on Feb. 3. Refined shipments, however, were higher, totaling 16,956 tons against 12,000 tons last year-a gain of 41.4%. President Roosevelt in Message to Congress Proposes System of Sugar Quotas-Urges Amendment to AAA to Make Sugar Beets and Sugar Cane Basic Agricultural Commodities-Proceeds of Processing Tax to Compensate Farmers-Executive Possess Power to Reduce Tariff. President Roosevelt, in a message to Congress on Feb. 8 proposed a system of sugar quotas, the application of which, he said "would immediately adjust market supplies to consumption, and would provide a basis for reduction of production to the needs of the United States market." The President stated that "consumers have not benefited from the disorganized state of sugar production here and in the insular regions." He recommended that "the Agriculcultural Adjustment Act should be amended to make sugar beets and sugar cane basic agricultural commodities. It then will be possible" he said, "to collect a processing tax on sugar, the proceeds of which will be used to compensate farmers for holding their production to the quota level. A tax of less than one-half cent a pound would provide sufficient funds." He further said that "consumers need not and should not bear this tax. It is already within the executive power to reduce the sugar tariff by an amount equal to the tax." A Washington dispatch Feb. 8 to the New York "Times" said: His [the President's] immediate purposes are to stabilize sugar prices in the United States, rehabilitate the industry and increase the purchasing power of Cuba for American products. An opening wedge for eventually shifting sugar to the free list was seen in the message by many members of Congress. A bill to make sugar beets and sugar cane basic commodities was immediately introduced by Senator Costigan, and a similar measure was being drafted for introduction in the House of Representative Jones of Texas. All indications were that they would be rushed through. Some opposition was expected from the Republican side and from members from the sugar-beet States due to limitations placed on the future production of beets. But Republicans and Democrats alike, it was argued, were generally gratified over the opportunity to remove sugar from the log-rolling common in tariff considerations. The issuance of the President's message was preceded by White House Conference; on Feb. 2 regarding which Associated Press advices from Washington said in part: A sugar program which includes making the sweet a basic agricultural commodity and a new stabilization pact to put the producing interests supplying the United States on a quota basis was drawn today at a White House conference. After the conference with the President, in which State Department and Farm Adjustment Administration officials participated, it was said that details were to be worked out in the next few days. An announcement by Mr. Roosevelt is expected then. The idea of making sugar a basic agricultural commodity and the revival of the stabilization pact which failed last year is in accord with plans drawn by the Farm Administration's sugar section, headed by A. J. S. Weaver. Weeks ago the White House gave tentative approval to the inclusion of sugar in the farm adjustment act and also to benefit payments contemplated to domestic producers. The quota arrangement was held in abeyance pending further study of the Cuban and Philippine situation by the President. It was understood that Mr. Roosevelt directed the Farm Administration to-day to proceed with its quota plans but that he would scan proposed figures carefully. Officials, including those of the State Department, have frequently said that any stabilization arrangement must be predicated on the idea of a quota which would help that island toward economic rehabilitation. Secretary Hull and Sumner Welles, head of the Latin-American division of the department, participated in the discussions with Mr. Roosevelt to-day, as did Henry A. Wallace. Secretary of Agriculture, and Mr. Weaver. The President's message to Congress follows: To The Congress: Steadily increasing sugar production in the continental United States and in insular regions has created a price and marketing situation prejudicial to virtually every one interested. Farmers in many areas are threatened with low prices for their beets and cane, and Cuban purchases of our goods have dwindled steadily as her shipments of sugar to this country have declined. There is a school of thought which believes that sugar ought to be on the free list. This belief is based on the high cost of sugar to the American consuming public. The annual gross value of the sugar crop to American beet and cane growers is approximately 360,000,000. Those who believe in the free importation ofsugar say that the 2 cents a pound tariff is levied mostly to pro- Financial Chronicle 944 tect this $60,000,000 crop and that itcosts our consuming public every year more than 8200,000,000 to afford this protection. I do not at this time recommend placing sugar on the free list. I feel that we ought first to try out a system of quotas with the three-fold object of keeping down the price ofsugar to consumers, of providing for the retention of beet and cane farming within our continental limits, and also to provide against further expansion of this necessarily expensive industry. Consumers have not benefited from the disorganized state of sugar production here and in the insular regions. Both the import tariff and cost of distribution, which together account for the major portion of the consumers' price for sugar, have remained relatively constant during the past three years. This situation clearly calls for remedial action. I believe that we can Increase the returns to our own farmers, contribute to the economic rehabilitation of Cuba, provide adequate quotas for the Philippines, Hawaii, Puerto Rico and the Virgin Islands. and at the same time prevent higher prices to our own consumers. The problem is difficult. but can be solved if it is met squarely and ifsmall temporary gains are sacrificed to ultimate general advantage. Amendment to AAA. The objective may be attained most readily through amendment of existing legislation. The Agricultural Adjustment Act should be amended to make sugar beets and sugar cane basic agricultural commodities. It then will be possible to collect a processing tax on sugar, the proceeds of which will be used to compensate farmers for holding their production to the quota level. A tax of less than one-half cent per pound would provide sufficient funds. Consumers need not and should not bear this tax. It Is already within the Executive power to reduce the sugar tariff by an amount equal to the tax. In order to make certain that American consumers shall not bear an increased price due to this tax. Congress should provide that the rate of the processing tax shall in no event exceed the amount by which the tariff on sugar is reduced below the present rate of import duty. By further amendment to the Agricultural Adjustment Act. the Secretary of Agriculture should be given authority to license refiners, importers and handlers to buy and sell sugar from the various producing areas only in the proportion which recent marketings of such areas bear to total United States consumption. The average marketings of the past three years provide on the whole an equitable base, but the base period should be flexible enough to allow slight adjustments as between certain producing areas. The use of such a base would allow, approximately, the following preliminary and temporary quotas: Short Tons. Item1.450,000 Continental beets 260.000 Louisiana and Florida 935,000 Hawaii 821.000 Puerto Rico 1,037.000 Philippine Islands 1.944.000 Cuba Virgin Islands_ 5.000 6.452.000 Total The application ofsuch quotas would immediately adjust market supplies to consumption,and would provide a basis for reduction of production to the needs of the United States market. Furthermore, in the negotiations for a new treaty between the United States and Cuba to replace the existing commercial convention, which negotiations are to be resumed immediately, favorable consideration will be given to an increase in the existing preferential on Cuban sugars to an extent compatible with the joint interests of the two countries. In addition to action made possible by such legislative and treaty changes, the Secretary of Agriculture already has authority to enter into codes and marketing agreements with manufacturers which would permit savings in manufacturing and distributing costs. If any agreements or codes are entered into, they should be in such form as to assure that producers and consumers share in the resulting savings FRANKLIN D. ROOSEVELT. The White House, Feb. 8 1934, Cuba Reported Mildly Disappointed by Roosevelt Sugar Plan. From the New York "Journal of Commerce" we take the following (United Press) from Havana (Cuba), Feb. 8: Cuban reaction to President Roosevelt's sugar marketing proposal to-day was one of mild disappointment. The suggested quota of 1,944.000 short tons for Cuba was less than some sugar circles had hoped for, by 56,000 short tons. President Carlos Mendieta excused himself from comment, as he had no desire to embarrass President Roosevelt's plans in any way. Cuba had hoped for an allotment of about 2.000,000 long tons. The suggested quota, however, represents a 15% increase compared with last year's tentative agreement, or an additional 244.000 short tons. Interest in sugar circles turned immediately to the proposition in the proposed quota between raw and refined sugar and also whether President Mendieta would leave undisturbed former President's Gran's decree setting 1934 production at 2,315,459 long tons. [Editor's Note: No reference was made in the President's message to refined sugar.] Conservative economic advisers are now urging President Mendieta to limit production to 2,000,000 long tons, since Cuba's maximum marketing prospects are unlikely to exceed 2.818,000 tons, and there is nearly 1,000,000 tons of manufactured sugar on hand. Under the Chadbourne plan, 260.000 tons of the latter must be released Javan Sugar Production Decreased. Java has accomplished a reduction in sugar production of 46.3% during the present season according to information received Feb. 8, by B. W. Dyer & Co., sugar economists and brokers, from their correspondent in Semarang, Java. The correspondent states that the Javan production for the 1933-34 season is 1,379,186 long tons compared with 2,569,2M tons, during the previous season, a reduction of 1,190,068 tons. It is further stated: The present season's crop represents a decrease of more than 1.500,000 long tons from the peak crop for Java produced in the 1928-29 season which amounted to 2.938,918 tons. The crop curtailment in Java is ex- Feb. 10 1934 pected to be continued through the 1934-35 season. Present estimates of the crop for that season by B. W. Dyer & Co. place the probable production at 540,000 long tons. Closing Date of Campaign for Signing of Cotton Acreage Adjustment Contracts Extended to Feb. 15 -Limits of Minimum Lint Production Acreage Reduced from 100 to 75 Pounds. The closing date of the sign-up campaign for 1934-35 cotton acreage adjustment contracts has been extended to Feb. 15, it was announced on Jan. 30 by the Agricultural Adjustment Administration. The Administration further said: At the beginning of the campaign it was stated that contracts would be accepted until Jan. 31 1934. However, delay of necessary supplies in reaching field workers, and the fact that many county organizations were Just finishing work in connection with pooling of cotton options and other sign-up campaigns, combined with a demand for lowering the minimum Per acre poundage to 75 pounds by farmers who wished to co-operate but found themselves barred by the 100-Pound limit, resulted in the decision that cotton reduction contracts offered to the Secretary of Agriculture would be received up to and including Feb. 15 1934. The ruling announced to-day reduces the minimum lint production per acre requirement from 100 pounds to 75 pounds: thus making land which produced an average of over 75 pounds of lint per acre during the base Period eligible for inclusion in a contract, if other conditions of eligibility have been fulfilled. Secretary of Agriculture Henry A. Wallace made the following statement concerning the extension of time: Because unavoidable delays have developed it has been decided, in order that all producers of cotton who desire to participate in the benefits of the 1934-35 acreage adjustment program may have adequate opportunity to submit their contracts, offers to rent cotton lands for the years 1934-35 will be received up to and including Feb. 15 1934. Cully A. Cobb, Chief of the Cotton Section, expressed satisfaction with the manner in which the sign-up campaign was moving. He is quoted as follows: Field forces have been so busily engaged in contacting producers, examining farms and in other necessary routine. that they have not had an opportunity to consolidate the results of the past months' campaign. However, from each of the 16 States in which farmers are signing contracts we have reports of splendid progress. For example, workers in Alabama believe they will have practically completed the sign-up by Wednesday (Jan. 311. Arkansas State leaders anticipate finishing by Feb. 10. Georgia and Mississippi are near completion, while field workers in other States have indicated similar encouraging headway. In fact, nobody has asked for an extension beyond Feb. 15. Unquestionably a great majority of cotton producers will be signed up before Feb. 15. Wheat Adjustment Payments up to Feb. 2 Totaled $43,716,794-Checks Sent by AAA to 519,644 Farmers in 35 States. Payments in the wheat adjustment program of the Agricultural Adjustment Administration have reached a total of $43,716,794 made to 519,644 farmers in 35 States, it was announced Feb. 2. All except about 50 counties have submitted their contracts to the Administration, and these are expected soon. More than 1,700 counties have had contracts approved by the county acceptance unit, but many of these remain to be individually audited before payment. The Administration further announced: The payments announced to-day are the first instalment of 20 cents bushel on each farmer's allotment. The second payment of eight cents a bushel, from which the operating costs of each county production control association will be deducted, is scheduled to be made after wheat growers have shown that they have complied with the terms of the wheat contract. Payments by States as represented by the county totals up to Jan. 30 are: $1,137,759 $516,361 Oregon $11,622 Minnesota Arizona 928,124 Pennsylvania__ 144,815 535,268 Missouri California 736,465 ..outh Dakota._ 2,814,720 1,147,638 Montana Colorado 3,410,781) Tennessee 77,277 58,751 Nebraska Delaware 2.923,528 1,598,886 New Jersey.7,169 Texas Idaho 410,051 1 480,590 New Mexico._ _ 320.697 Utah Illinois 25,978 Virginia 355,466 1,166,936 New York Indiana 15,985 Washington__ __ 2,784,728 255,801 Nevada Iowa 15,481 31.561 West Virginia_ 14.529,392 North Carolina. Kansas 45,531 159,227 North Dakota-- 720.887 Wisconsin Kentucky 170.934 1,096,375 Wyoming 518,042 Ohio Maryland 2,383,084 513.731 Oklahoma Michigan Raw Silk Imports in January 1934 Off 25,138 Balesvas Compared with Same Period Last Year--Deliveries to American Mills Increased Sharply Over Preceding Month-Inventories Declined During January. According to the Federated Textile Industries, Inc., successor to the Silk Association of America, Inc., raw silk imports into the United States during January 1934 totaled 27,976 bales, 4,647 bales under December 1933 and 25,138 bales below January 1933. Deliveries to American mills during January 1934 were 40,942 bales, or 13,983 bales above the preceding month and 5,262 bales below the same period in 1933. Raw silk in storage in warehouses was 83,820 bales at Feb. 1 1934, as compared with 96,786 bales a month previous and 69,747 bales a year ago. Approximately 32,200 bales of Japan silk were in transit at the end of January 1934 as against 27,200 bales at Dec. 31 1933 and 25,700 bales at Jan. 31 1933. The statement of the Federated Textile Industries, Inc. follows: Financial Chronicle Volume 138 RAW SILK IN STORAGE. (As reported by the principal public warehouses in New York City and Hoboken.) (Figures In Bales.) European. Japan. Al Other. Total. In storage Jan. 1 1934 5,226 87,048 4,512 96,786 Imports, month of January 193&z 306 27,093 577 27.976 Total available during January 1934 x In storage, Feb. 1 1934 5.532 114,141 5.202 74.845 Approx. deliveries to American mills during Jan. 1934_3, 330 SUMMARY. Imports During the Month. January February March April May June July August September October November December 1,316 40.942 In Storage at End of Month. 1934. 1933. 1932. 1934. 1933. 1932. 27.976 53,114 23,377 22,289 41,134 44,238 47,435 62.348 46.683 49,470 48,346 32,819 32,623 52,238 53,574 38.866 30,953 34,233 31,355 36,055 61,412 56,859 58,775 47,422 45,453 z83,820 69.747 60.459 43,814 43,038 40,125 33,933 51,684 55,515 73,800 93,625 91,122 96.786 62.905 70,570 62,675 57,849 59.159 53.048 50.721 52,228 49,393 54,465 57,932 62,837 503,376 41,948 547,195 45,600 62.804 57,815 Total Monthly average_ - Approximate Deliveries to Americas Mills.y January February March April May June July August September October November December 39,298 5.089 124.762 8,773 83,820 Approximate Amount of Japan Silk in Transit at Close of Month. 1934. 1933. 1932. 1934. 1933. 1932. 40,942 46,204 32,665 38,934 41,910 47,151 53,627 44,597 42,852 81,185 28,521 34,822 26,959 58,793 45,909 46,761 35,779 32,923 37,466 38,382 59,905 59,694 53,703 43,955 40.548 32,200 25.700 28,100 39,100 40,200 42,300 41,500 38,600 48,800 48,300 37,100 37,200 27,200 48,500 31,000 28,800 34,800 30,800 31,100 43,200 43,400 42,800 44,700 50,200 51,400 Total .,.. 469,427 553,818 Monthly average.40,058 37.842 39,119 46.151 x Covered by European Manifests Nos. 1 to 5 inclusive, Asiatic Man feats Nos. 1 to 18 Inclusive. y Includes re-exports. Stocks at warehouses include Commodity Exchange, Inc. certified stocks 4,750 bales. a Includes 128 bales held at terminals. . UnitedIStates Exports of Rayon Yarns During 1933 at -RecordA Level-1,109,588 Pounds Exported as Compared with 653,258 Pounds in 1932, Previous High Year. Exports of rayon yarns from the United States during 1933 totaled 1,109,588 pounds, valued at $565,920, compared with 653,258 pounds, valued at $428,713, for 1932, according to statistics compiled by the Textile Division, United States Department of Commerce. The year's exports of rayon yarn established a record for all time, being approximately double the amount exported during 1932, the previous record shipments, and five times the exports for 1929, statistics show. An announcement issued Jan. 26 by the Department of Commerce further said: Practically all of this export trade in rayon yarn was with countries of Latin America. Mexico continued to be the chief export market, and accounted for 763,689 pounds, or approximately 70% of the total foreign shipments during 1933. Cuba retained second position, exports to that market totaling 203,747 pounds, an increase compared with 1932. Colombia ranked in third position as an export outlet for American rayon yarns during 1933, with exports to that market totaling 98,877 pounds. Other important markets were Canada, 13,710'pounds ; Venezuela, 10,644 pounds; Spain, 6,338 pounds; Chile, 5,816 pounds; Nicaragua, 2,084 pounds; and all others, 5,263 pounds. Imports of rayon yarn and other synthetic textile fibers into the United States during 1933 totaled 1,202,746 pounds, compared with 164,446 pounds in 1932, an increase of 1.038,290 pounds, according to the statistics. Imports, it was pointed out, were small in relation to the domestic products of 207,600,000 pounds of rayon yarn and to the imports during 1927 totaling 16,250,000 pounds. Rayon yarns imported into the United States during 1933 originated largely in Italy. France, Germany and the Netherlands are shown as other important foreign sources of imports. Waste imports during the year totaled 2,680,135 pounds, the largest quantity on record since June 1929, when receipts from foreign sources totaled 4,071,000 pounds. Italy, Germany, Japan and the Netherlands are shown as the chief sources of supply during the year. Imports of staple fiber also reached record proportions during the year and totaled 3,362,977 pounds, it was stated. Minor Changes Made in Rug Prices at Opening of Spring • Offerings-Higher Prices Planned by March 1Largest Attendance of Buyers at Opening Since Showing of Fall 1929. The largest attendance of buyers at a seasonal opening since the fall showing of 1629 viewed the introduction to the trade of Spring carpet and rug lines on Feb. 5. Prices remained unchanged from the Fall quotations except for some minor price alterations, but announcements were made by some of the leading manufacturers that their prices would be advanced on or before March 1 and goods remaining undelivered on that date would be subject to the new levels. With regard to the price changes, and sales on the opening day, the New York "Journal of Commerce" of Feb. 6 said in part: ' 945 There was but one reduction of importance announced and that was on cut-order terms. Bigelow-Sanford Carpet Co., Inc., took the initiative, adopting terms of plus 25,less 15, against the general terms in the market of plus 30, less 10. The new price was met by most carpet manufacturers yesterday. The standard 4 2-3 row axminster construction was reduced 50c. a rug by' those manufacturers that formerly had an 618 figure for the 9x12 size, leveling all makes off to the same figure. It is understood, however, that the price is only temporary and will be increased at least 75c. by March 1. In wilton yard goods there were some minor adjustments, but they were not considered of any great importance, and impartial observers believed that the reductions might tend to stimulate some early sales on these types. Although it is not usual for business to be booked the opening day,several buyers started to leave commitments in showrooms in the forenoon. And the indications of an advance in prices within four weeks is expected to result In the buying tempo being increased to-day instead of to-morrow as is usually the case at an opening. Even buyers commented upon the activity, many claiming that there was less hesitancy within their ranks than they had seen since the boom period On Feb. 6, the second day of the Spring floor covering market, buyers were placing business, apparently satisfied that prices are firm and that they might be advanced very shortly. As to some further minor changes in prices the New York "Journal of Commerce" of Feb. 7 said: Further minor adjustments in price lists were made yesterday by several mills in getting their quotations in line with the market. These changes. however, were not disturbing the strong tone of the market. Reporting the market of Feb. 7, the paper previously quoted, in its issue of Feb. 8, said: Buying in the market Feb. 7 was reported satisfactory by several offices and the general results of the current seasonal opening are considered satisfactory. Few buyers had left the market and many indicated that they would stay longer than usual. There was some buying hesitancy reported, but it was not considered serious. The price tone was firm, despite some downward revisions on medium priced sheen types. At the fourth day of the opening (Feb. 8) some wilton carpet offerings which were reduced on Feb. 5 were sent to higher levels and delivery at the new price was not extended beyond the close of the month. Petroleum and Its Products-Differences over Marketing Agreements Seen Smoothed out-Ickes Proposes Two-Mills Tax on Oil to Finance Oil Administration-Revision of Code Made by Oil Administration-Texas Railroad Commission Boost's State Allowable Above Federal Allocation. Developments in Washington continued to hold the center of the stage in the oil industry as representatives of the companies signatory to the marketing and gasoline stabilization pool agreements struggled to reconcile differences within the industry over some of the provisions of the agreement. Earlier in the week, it was unofficially reported from the Capital City that several of the major companies had voiced dissatisfaction with some of the provisions of the marketing agreements and favored complete abandonment of the agreement. However, as the week closed, it was indicated the differences had been smoothed over and the conferring groups would reach a favorable decision in the immediate future. A tax of 1-10 of a cent a barrel on oil at the well and another, 1-10 cent on oil when it reaches the refinery to finance the oil administration was suggested Monday to the House Ways and Means Committee by Harold L. Ickes, oil administrator. Mr. Ickes also suggested jumping the import tax on oil from cent to 1 cent a gallon. After the committee hearing, Mr. Ickes said that he did. not discuss the question of "hot oil" a tax on which has been. proposed in an amendment by Rep. McClintic (Dem., Okla.). The taxes that he proposed, however, he added, would aid that situation by reducing illegal production or oil through the closed check which would be afforded in Federal collection of the tax. The plan has the support of the Planning and Co-ordinating Committee, he said. Another announcement emanating from the oil administration at the start of the week was the cancellation of one section of the oil code and the issuance of new regulations covering withdrawals. The changes were made, Mr. Ickes said, in order to assure adequate supplies of crude oil for small refiners, while preventing excessive withdrawals of' crude oil from storage. At the same time the oil administrator announced the appointment of J. H. Marshall, of the P. A. B., and R. G. Lowe, an attorney of the board, as his representatives on the board of governors, as an executive committee to supervise operation of the gasoline stabilization pool provided for in the recently approved purchase agreement submitted to the oil industry. The addition of a paragraph to rule 25 of Article V of the code to require manufacturers of used or reclaimed oil to brand their products so as to clearly show that they were made from used oil was announced by the oil administrator. 946 • Financial Chronicle Reclaimed oil products are made from oil previously used, such as that drained from crankcases, the impurities being removed by processing. "I have cancelled section 3 of article IV of the oil code which permitted refiners without permission to withdraw crude oil from storage when supplies were not available with economic distances," the administrator stated. "That provision led to evasions of section 2 of article III, which requires withdrawals from storage to be apprvoved by the planning and co-ordinating committee. "Under section 3 of article IV refiners were not required to notify regional committees of the planning and co-ordinating committee representing the industry until after they had withdrawn the oil. Refiners frequently made excessive withdrawals, and reported them later. "I consider it necessary that there shall be a closer supervision over such withdrawals from storage to prevent supplies obtained in this manner from upsetting the general program of balancing production with consumption demand, and I feel that this will be impossible without the elimination of section 3 of article IV. "It is of paramount importance, however, that refiners have available at all times adequate supplies of crude, particularly the smallindependent refiners, to insure to these and other refiners ample working stores. I have issued regulations under Section 2 of Article III permitting withdrawals authorized by the planning and co-ordinating committee." Under the McClintic amendment to the tax bill, payment of fees to informers divulging "bootleggers of hot oil" so that re-examination of income tax returns of such operators Might be made by Federal authorities was proposed. After representatives of the Texas Railroad Commission met with no success in their efforts in Washington to have the Oil Administration raise the State's allowable, the Commission Monday issued an order advancing the allowable oil total for the State 13,700 barrels daily, bringing the total to 896,750 barrels a day, compared with 884,000 barrels daily allowed Texas under the Federal allocation of oil production. This is the first order of the Commission placing allowable output in Texas above the legal limit fixed by Oil Administrator Ickes. As the week closed, no answer had been made by the Oil Administration to this independent action, but oil men expect the Administration to take steps to regain control of the State's output. While in Washington members of the Commission complained to Mr. Ickes about the comparatively large amount of gasoline being shipped from California to the East Coast and to Continental Europe. California ships approximately 34,000 barrels of gasoline daily to the East Coast and substantial shipments of gasoline to Europe. The Commissioners claimed that this market should be supplied from fields east of the Rockies and brought up the point of "regional markets." The Oil Administration made no comment on the situation. Following Mr. Ickes' indignant denial that any official of the Oil Administration had suggested penalizing major units in the industry because of their use of advertising, H. K. McCann, President of McCann, Erickson, Inc., advertising agents, whose original statement making the charges brought forth Mr. Ickes' denial answered the Oil Adminsistrator's statement denying the charge. "I am delighted to find Secretary Ickes disavowing those who would set up a policy in behalf of the Government whereby advertising would be penalized. My information as to what happened in the oil-gasoline war in the District of Columbia is different from that now given by the Secretary. I was advised that Dr. Frey of the Petroleum Co-ordinating Committee did request that the non-advertised products be permitted to sell at a lesser price than the advertised grade of gasoline. If Dr. Frey was not speaking for the Government then I and others interested in advertising will be glad to accept the disavowal by the Secretary of the Interior in the interest of all advertisers." Daily average crude oil production throughout the United States for the week ended Feb. 3 dipped 101,100 barrels from the previous week, totaling 2,121,650 barrels, compared with the February Federal allotment of 2,183,000 barrels daily, reports to the American Petroleum Institute disclosed. A sharp decline in production in Oklahoma, where operators are in the habit of letting their wells run heavily during the early part of the month and then pinching them back sharply in the final half, was the major factor in bringing down production, the Oklahoma total dipping to nearly Feb. 10 1934 84,000 barrels daily less than in the previous week. While output in Texas was off slightly on the week, at 890,300 barrels, it was still sharply above the Federal allowable of 884,000 barrels daily average. California brought down output for the week by some 8,000 barrels. An appeal was made late in the week by the Central Pennsylvania Oil Producers' Association to Secretary Ickes asking him to secure an advance in the posted prices of crude oil. The resolution said that "since Oct. 5 prices of refined products manufactured from Pennsylvania-grade crude oil have increased to such an extent that products of a barrel of Pennsylvania crude yield 55 to 60 cents more than on Oct. 5." The group also endorsed Mr. Ickes' plan for a tax of two mills a barrel at the refinery to help curb production of "hot oil." Stocks of domestic and foreign crude oil last week were off 950,000 barrels from the previous week, totaling 341,476,000 barrels, against 342,417,000, Mr. Ickes announced. The dip, which followed an increase of 97,000 barrels in the previous week, comprised a drop of 1,088,000 barrels in domestic stocks and a jump of 138,000 in foreign stocks. There were no price changes this week. Prices of Typical Crudes per Barrel at Wells. (All gravities where A.P.I. degrees are not shown.) $2.45 Eldorado, Ark., 40 Bradford. Pa 31.00 1.20 Rusk. Tex., 40 and over 1.03 Corning. Pa 1.13 Darst Creek Illinois .87 1.13 Midland District. Mleh Western Kentucky .90 1.35 Mid-Cont.. Okla., 40 and above... 1.08 Sunburst, Mont Hutchinson, Tex.. 40 and over...... 1.03 Santa Fe Springs, Calif.,40 and over 1.30 1.03 Huntington, Calif.. 26 Spindletop, Tex.. 40 and over 1.04 Winkler, Tex .75 Petrolia, Canada 1.82 Smackover, Ark.. 24 and over .70 REFINED PRODUCTS—GASOLINE PRICE WAR SEEN ENDED— ICKES INDICATES RETURN TO PRICE CONTROL'PLAN IF WARS CONTINUE—NEW YORK STANDARD RAISES GASOLINE PRICES. A bitter price struggle which broke out in Washington, D. C., over last week-end and 'which, for a while, brought the possibility of Federal price control, again to the fore, was seen ended by Harold L. Ickes in the middle of the week after conferences with leaders in the industry. The war, which started last Saturday when the Standard Oil Co. of New Jersey reduced service station prices of gasoline M cent a gallon, followed by an additional cut of 34 cent a gallon on Monday, spread down into Memphis, Tenn., where the Standard Oil Co. of Louisiana, subsidiary of Standard of New Jersey, reduced service station prices 2 cents a gallon. The revised schedule posted for the three grades of gasoline at 734 cents, 9 cents and 11 cents, respectively, in both Washington and Memphis, taxes excluded. Mr. Ickes warned the industry that unless the war was stopped, the Oil Administration would be forced to return to the proposed Federal price control plan, which was dropped after its opponents in the industry had submitted substitute marketing and stabilization plans to Mr. Ickes which he had approved, with some revisions. The war was due to unsettled conditions in Washington because of the• much disputed differential between independent and major postings for gasoline. Pending a permanent solution to the situation, Mr. Ickes disclosed that the PAB planned a temporary differential, probably at the rate of cent a gallon. However, inasmuch as the price differential plan had not been worked out in full as yet by Oil Administration officials, Mr. Ickes did not discuss the situation in detail. Following a conference Wednesday with Walter C. Teagle, president of the Standard Oil Co. of New Jersey, Mr. Ickes declared that the oil executive showed every disposition to work out a settlement, describing the conference as "very satisfactory in every respect." He also revealed that the "general principle" involved in the District of Columbia price war, the question of differentials between the major and independent postings on gasoline was discussed. Abandonment of the Government's suit against the Stand: ard Oil Co. of New Jersey was also announced by Mr. Ickes following the conference. The suit charged the company with violation of marketing provisions of the petroleum code. Standard of1New Jersey was holding a prize contest,which,Mr. Ickes held, violated the code. "The contest has been discontinued," said the oil administrator. ,,In view of this I feel that the suit should be discontinued." Mr. Teagle issued a brief statement explaining that the company had inaugurated the contest in the belief that it did not violate the provisions of the code against giving away prizes or premiums. "The oil administration entertained and expressed a different opinion and the suit was Volume 138 filed," he continued. "The oil company has concluded to meet the Government's wishes." Further regulations issued by the oil administration this week struck at practices resorted to by some factors in an effort to get around the'requirements assuring retailers of a definite margin between the price they pay and the retail price. The new orders "cracking down" on price cutting rule that refiners, wholesalers, distributors and jobbers of petroleum products must establish a single price for all sales of each brand of their gasoline. Recently, tank wagon prices have been varied to discriminate against different classes of consumers and as a result a form of price war has resulted. "Many refiners, wholesalers, distributors and jobbers of petroleum products," Mr. Ickes said, "by establishing socalled tank wagon prices at varying levels, have arbitrarily discriminated against retail dealers and between various forms of consumers. This is a clear evasion of Rule 3 of Article V of the oil code, which prohibits the giving of rebates, or other allowances and concessions." The tank wagon regulation will be effective until he approves a schedule for commercial discounts, now being compiled by the planning and co-ordinating committee, Mr. Ickes added. The Oil Administrator also announced his approval of an interpretation of the oil code, which prohibits the issuance by companies of coupon books in payment of salaries to employees or the issuance of coupon books to others in payment of material. Mr. Ickes said that the planning and co-ordinating committee had informed him that some companies were resorting to this practice to evade labor and rebate provisions of the code. The Standard Oil Co.of Louisiana,subsidiary of Standard of New Jersey, advanced gasoline prices in New Orleans one cent a gallon Wednesday, effective Feb. 5. The new prices, which followed similar advances by major competitors, brought the price schedule to 11% cents, 13 cents and 15 cents, respectively, for the three grades of gasoline, all prices exclusive of taxes. Reductions of two cents a gallon on third-grade gasoline prices at service stations were posted by a few independents in San Francisco in mid-week, but the situation was not widespread and major companies are not expecting to enter the price war. San Francisco distributors characterized the scattered price cutting a protest of some independents against the California marketing agreement which provides dealers with a profit of four cents a gallon. Friday morning (yesterday) brought the announcement of a one-half cent a gallon advance in tank car, tank wagon and service station prices of gasoline throughout New York and New England by the Standard Oil Co. of New York, marketing subsidiary of the Socony-Vacuum Corp. All major companies are expected to swing into line with the new price levels immediately. The new service station schedules lists the regular grade gasoline at 17 cents while the new price in tank wagon lots is 16 cents, taxes included in both instances. Tank car prices moved up to 7 cents a gallon, f. o. b., taxes no included, for branded grades. The last general change in the company's gasoline prices was on Jan. 9, last, when prices were cut 1 cent per gallon in the same territory. The improved outlook in the market following the announcement of Mr. Ickes approval of the marketing and stabilization pacts was credited with providing the stimulus for the advance at the present time in local oil circles. While current consumption of gasoline is held down by the extremely unfavorable weather affecting the Atlantic Seaboard during the past week, little difficulty in maintaining the new higher price list is anticipated. This, it was pointed out, is due to the fact that the advances are primarily price readjustments rather than advances with the seasonal rise in consumption expected to bring still higher levels, barring unforeseen developments in the industry. Other local refined products were quiet, although the fuel oils, strengthened somewhat as the below-zero weather stimulated consumption. Grade C bunker fuel oil continued in strong demand at $1.20 a barrel, refinery, with some factors anticipating an advance in this item in the near future, due to the short supplies. Diesel oil moved fairly well at $1.95 a barrel, factory. Total gasoline stocks at the end of last week were up 1,359,000 barrels over the preceding week, totaling 51,588,000 barrels, the American Petroleum Institute reported. 947 Financial Chronicle Increases in holdings at refineries and in bulk terminal and transit stocks accounted for practically all of the gain. Reporting refineries ran at 64.4% of capacity, compared with 66.4% in the previous week. Price changes follow: Saturday, Feb. 3,-The Standard 011 Co. of New Jersey reduced service station gasoline prices 3. -cent a gallon at Washington, D. C. Monday, Feb. 5.-Standard Oil Co. of New Jersey made a further reduction of 34 cent a gallon in serve station prices of gasoline at Washington. D. C. Standard 011 of Louisiana, a subsidiary, reduced prices in Memphis 2 cents a gallon, bringing the price list in line with Washington. Tuesday, Feb. 6.-Scattered price cutting by a few independents in San Francisco brought service station prices of third-grade gasoline down 2 cents to 15 cents a gallon. Wednesday, Feb. 7.-The Standard Oil Co. of Louisiana. subsidiary of Standard of New Jersey, to-day advanced all grades of gasoline 1 cent a gallon at service stations, effective as of Feb. 5, at New Orleans. Friday, Feb. 9.-Standard Oil of New York advanced tank car, tank wagon and service station prices of gasoline % cent a gallon throughout New York and New England, effective immediately. All major companies are expected to swing into line with the new schedule immediately. Gasoline, Service Station, Tax Included. 820 New Orleans $ 15 Detroit 8.165 New York z 12 Philadelphia 17 Houston .19 Atlanta Ban Francisco: 19 Jacksonville .17 Boston .15-17 Third grade_ _ Los Angeles: .18 Buffalo Above 65 octane.. .19)4 Third grade__ .185 Chicago .16 .21 Premium 19 Standard .205 Cincinnati 14 St. Louts 21 Premium .205 Cleveland z Leas taxes. 15 Minneapolla .19 Denver Kerosene, 41-43 Water White, Tank Car, F.O.B. Refinery. 2.0214-.03A New Orleans, ex_ ___$.03l4 !Chicago New York: 0414-.03% Tulsa Los Ang.,ex_ _ .04)4-.06 (Bayonne).-11.015j( .03 North Texas Fuel Oil, F.O.B. Refinery or Terminal. 81.05 Gulf Coast C California 27 plus D N. Y.(Bayonne): 5.75-1.001Chicago 18-22 D..4234-.60 31.20 Bunker 0 .80 Phila. Bunker 0.1.154,20 Meal 28-80 D-___ 1.95 New Orleans C r swon Gas Oil, F.O.B. Refinery $ 0134 Y.(Bayonne): i Chicago: 8 plus CI 0-$.03R-.041 32-36 G 0 U. S. Gasoline, Motor (Above 65 Octane). Tank Car Lots. F.O.B. Refinery 8.05 N. Y.(Bayonne): Y.(Bayonne): Shell Eastern Pet.8.065 New Orl..ex- .04 -.03( Standard Oil N.J.: Arkansas .04 -.04 New York: Motor, U. S. 8.06 California.- .05 -.07 Colonial-Beacon- .06 62-83 octane.-- .05M Los Angeles, ex .04R-.07 .06 :Texas vfitand. 011 N. Y- .07 Gulf ports-----0654-.07 .06 Gulf Tide Water 011 Co .06 Republic011.04 :Richfield 011(Cal.) .0834 .05 TulsaPe Sinclair Refining- ..(kTi Pennsylvania. Warner-Quin. Co- .0534 x Richfield "Golden." a "Fire Chief." 80.07. •Long Island City. Terminal. Tul Production of Crude Petroleum in December 1933 Substantially Higher Than in the Same Month in 1932-Inventories at End of the Year Lower Than at Nov. 30 1933, but Exceeded Those of a Year Before-Crude Petroleum Output During the Year 1933 Exceeded Preceding 12 Months by 113,715,000 Barrels. According to reports received by the Bureau of Mines, Department of Commerce,the production of crude petroleum in the United States during December 1933 totaled 72,060,000 barrels. This represents a daily average output of 2,325,000 barrels, the same as in November, but substantially higher than the level of a year ago, when the East Texas field was shut down for half a month. Of the three leading producing States, Texas, Oklahoma and California, only Oklahoma showed a decline in output in December. The daily average output in Texas increased 20,000 barrels over November, while in California the increase was 11,000 barrels. These two increases were compensated by declines of 10,000 barrels in the daily output in both Kansas and Oklahoma, and small decreases in other States. The daily average output of the East Texas field showed a slight increase over November, being just under the 450,000barrel mark. The Bureau's report continued as follows: Total stocks of reflnable crude declined 220,000 barrels during the month, or from 335,614,000 barrels on Nov. 30 to 335.394.000 barrels on Dec. 31. As in November, tank-farm stocks of East Texas crude declined substantially in December, this decrease being largely offset by Increases in refinery stocks. Daily average runs to stills continued to decline, although the decrease in December was relatively small. Daily average crude runs in December were 2,272,000 barrels, compared with 2,282,000 barrels in November, and 2.129,000 barrels in December 1932. Due to a material increase in the production of unfinished gasoline, the yield of finished gasoline declined to 41.9%, the lowest point since January 1931. Because of the decrease in yield, and the small decline in crude runs, the daily average of motor fuel declined to 1,042,000 barrels from 1.102,000 barrels the previous month. The daily average indicated domestic demand for motor fuel was 929,000 barrels, which, compared with a year ago, represents an increase of 6%. Exports of gasoline showed a material decline and totaled only 1,649,000 barrels, the lowest monthly total since November 1923. Stocks of finished gasoline increased 1.808.000 barrels, and totaled 52,240,000 barrels on Dec. 31 1933; in addition 3.186,000 barrels of natural gasoline was in storage on that date. Important changes in the statistics of the minor products were continued declines in stocks of practically all products, and a further increase in the domestic demand for kerosene. According to the Bureau of Labor Statistics, the price index for petroleum products during December 1933 was 51.6, compared with 51.6 in November 1933 and 45.0 in December 1932. The refinery data of this report were compiled from refineries with an aggregate daily recorded crude-oil capacity of 3,489,995 barrels. These refineries operated during December at 65% of their capacity, given above, which was the same ratio as that for November. Financial Chronicle New supplyDomu,die production: Crude petroleum Daily average Natural gasoline 13enzol_ a Total production Daily average Imports: Crude petroleum Refined products Total new supply, all oils Daily average Decrease in stocks, all oils_.... DemandTotal demand Daily average Exports: Crude petroleum Refined products Domestic demand: Motor fuel Kerosene Gas oil and fuel oil Lubricants Was Coke Asphalt Road oil Still gas (production) Miscellaneous 1 sses and crude used as fuel. Total domestic demand Daily average StocksCrude petroleum Natural gasoline Refined products Total all oils Days' supply Jan.-Dec Jan.-Dec. 1932. 1933. Dec. 1933. Nov. 1933. Dec. 1932. 72,060 2,325 3,005 129 75,194 2,426 69,755 2,325 2,931 125 72,811 2,427 58,295 1,880 2,931 86 61,312 1,978 898,874 2,463 33,610 1,473 933,957 2,559 785.159 2,145 36,281 1,031 822,471 2,247 b3,120 842 79,156 2,553 b2,235 975 76,021 2,534 2,756 1,164 65,222 2,104 32,773 13,498 980,228 2,686 44.682 29,812 896,965 2,451 3,926 7,918 9,889 c8,256 41,792 83,082 2,680 83,939 2,798 75,111 2,423 971,972 2,663 938,757 2,565 2,709 5,883 3,305 6,350 2,154 4,591 36.703 66,822 27.393 75,882 28,787 4,143 30,527 1,667 117 784 740 243 3,557 137 3,788 30,262 3,726 29.797 1,538 112 1,194 654 384 3,466 97 3,054 27,110 3,149 29,387 952 123 1,019 729 64 3,314 109 2,415 378,143 38,440 321,395 17,066 1,260 10.091 11,260 '6,095 45,212 1.443 35,042 373.900 33,221 308,157 10,614 945 9,592 12,652 6,648 40.905 1,978 30,870 74,490 2,403 74,284 2,476 68,366 2,205 865,447 2.371 835,482 2,283 355,394 355,614 339,715 3,186 3,203 3,125 242,873 246,640 247,188 355,394 3,186 242,873 339,715 3,203 247,188 601.453 605,379 590,106 d601,453 d590,106 224 216 244 230 226 a From Coal Division. b Receipts of foreign crude as reported to the Bureau of Mines. c Increase. d Total s ocks as of Dec. 31 1932 and Dec. 31 1933 are not comparable principally because certain revisions made as of Aug. 31 1933 have not yet been carried back to Jan. 1 1933. PRODUCTION OF CRUDE PETROLEUM BY STATES AND PRINCIPAL FIELDS. (Thousands of Barrels of 42 Gallons.) December 1933, Total. Arkansas California: Kettleman Hills Long Beach Santa Fe Springs Rest of State Total California.__. Colorado Illinois Indiana: Southwestern Northeastern Total Indiana Kansas Kentucky Louisiana: Gulf coast Rest of State Total LouLsiana Michigan Montana New Mexico New York Ohio: Central and Eastern Northwestern Total Ohio Oklahoma: Oklahoma City Seminole Rest of State Total Oklahoma Pennsylvania Tennessee Texas: Gulf coast West Texas East Texas Rest of State Total Texas West Virginia. Wyoming: Salt Creek Rest of State Total Wyoming_._ _ United States total OaflyAv. November 1933. January- JanuaryDecember December Total. Daily -A v. 1933. 1032.a 942 30 939 31 11,608 12,051 1,656 1,896 1,307 9,867 14,726 77 378 54 61 42 318 475 3 12 1,468 1,742 1,144 9,580 13,034 79 388 49 58 38 319 464 3 13 21,627 24,797 18,271 108,390 173,085 947 4,227 21,961 27,436 22,538 106,193 178,128 1,136 4.673 69 72 2 2 721 ----------------7 69 72 2 2 728 3,470 112 3,648 41,942 122 385 12 388 13 4.605 777 29 806 34,848 6.287 1,358 768 2.126 945 199 1,277 298 11,616 10.191 21,807 6,910 2,457 12,455 3.508 44 2.5 69 30 6 41 10 1,428 735 2,163 929 208 1,268 279 47 25 72 31 7 42 9 15,088 9.548 24,636 7,851 2,122 14,074 3,174 255 79 334 8 3 11 267 79 346 9 3 12 3,238 1.026 4,264 3,579 1.065 4,644 5,932 3,308 5.068 15,208 1,077 191 107 193 491 35 5,952 3,279 5,789 15,020 1,090 199 109 193 501 36 68,461 41,220 71,825 181,506 12,639 6 33.807 42,911 76,526 153,244 12,412 5 4,873 3,931 13,901 6.619 29.324 326 157 126 440 214 946 11 4,434 3,695 13,398 8,258 27.785 334 148 123 447 208 926 11 60,300 55,375 199,298 81,480 396,453 3,811 41,850 63,335 121,449 85,844 312,478 3,876 558 341 899 18 11 29 524 360 884 18 12 30 7,000 4,196 11,196 8,006 5,412 13,418 72.060 2.325 69,755 2,325 898,874 785,159 a Includes Alaska, Missouri, and Utah. Oil Gas Dry_ 903 93 353 November 1933. 992 107 276 December 1932. 793 88 319 Jan.-Dec. 1933. 8,068 032 3,312 Jan.-Dec. 1932. 10,444 1,027 3,569 Total 1.349 1.375 12,312 1.200 15.040 a From "Oil .1/ Gas Journal" and California office of the American l'etroleum Institute. Weekly Production of Crude Oil Now Below Federal Allowable Figure-Gas and Fuel Oil Inventories Continuegto New Lower Levels-Motor Fuel Stocks Increase by 1,359,000 Barrels. The American Petroleum Institute estimates that the daily average gross crude oil production for the week ended Feb. 3 1934 was 2,121,650 barrels, a decrease of 61,350 barrels as compared with the allowable figure effective Jan. 1 1934 as setiby Secretary of the Interior Ickes. This also The industry reported an increase in country-wide stocks of motor fuel in the seven days ended Feb. 3 of 1.359,000 barrels, the largest addition in any one week in many months. Stocks on hand at all points on Feb. 3 totaled 51,588,000 barrels, against 50,229,000 barrels on Jan. 27 and about 55,757.000 barrels at this time a year ago. Imports of crude and refined oil at principal United States ports totaled 763,000 barrels for the week ended Feb. 3 1934, a daily average of 109,000 barrels, compared with a daily average of 113,821 barrels for the last four weeks. Receipts of California oil at Atlantic and Gulf ports totaled 538,000 barrels for the week, a daily average of 76,857 barrels, as against a daily average of 82,536 barrels over the last four weeks. Reports received for the week ended Feb. 3 1934 from refining companies controlling 92.4% of the 3.616,900-barrel estimated daily potential refining capacity of the United States, indicate that 2.152,000 barrels of crude oil daily were run to the stills operated by those companies and that they had in storage at refineries at the end of the week 28,310,000 barrels of gasoline and 113,220,000 barrels of gas and fuel oil. Gasoline atbulk terminals, in transit and in pipe lines amounted to 19,928,000 barrels. Cracked gasoline production by companies owning 95.1% of the potential charging capacity of all cracking units, averaged 412,000 barrels daily during the week. DAILY AVERAGE CRUDE OIL PRODUCTION (Figures In Barrels.) Actual Production. Federal Average Agency 4 Weeks Allowable Week End. Week End. Ended Feb. 3 Effective Jan. 27 Feb. 3 1934. Jan. 1. 1934. 1934. 446,600 110.000 Oklahoma Kansas Panhandle Texas North Texas West Central Texas West Texas East Central Texas East Texas Conroe Southwest Texas Coastal Texas (not Including Conroe) Total Texas _ 884,000 Week Ended Feb. 4 1933. 383,400 108,350 467,350 107,450 483,400 109,700 387.000 96,100 41,950 52,950 24,550 129,050 43,200 397,900 48,150 45,550 42,600 52,000 24,750 129,250 42,950 396,000 47,700 44,050 42,350 54,150 24,550 120,550 43,150 389,750 51,000 44,350 45,150 46,250 24,400 157,250 56,000 295,100 25,800 49,950 107.000 110,750 107,550 109,600 890,300 890,950 883,400 809.500 27,900 45,150 27,800 45,700 27,600 44.800 30,000 33,550 North Louisiana Coastal Louisiana 69,300 73,050 73,500 72,400 63,550 Arkansas Eastern (not Incl. allch.) Michigan 33,000 94,200 29,000 31,200 90,800 23,050 32,100 98,600 23,550 31,850 96,250 24,550 31,500 91,000 15.700 Wyoming Montana Colorado 29,000 6,800 2,300 30,350 5,150 2,650 29,650 5,350 2,850 26,800 5,950 2,750 31,450 5,6513 2,650 Total Louisiana Total Rocky Mtn.States New Mexico California ' Mtn, 38,100 38,150 37,850 38,500 39,750 41,200 437,600 41,550 441,800 41.500 449,900 41,650 455,850 36,850 457,300 2153000 2.121850 2222750 29275512 9 fop ,,,11 Notes.-The figures indicated above do not include any es Imate of any oil which might have been surreptitiously produced. The following paragraphs are Quoted from the official order of the Department of the Interior, approved and promulgated Dec. 20 1933. "There shall be no net withdrawals of crude oil from storage during the months of January, February and March 1934, except in special cases upon the recommendation of the Planning and Co-ordination Committee, and the approval of the Petroleum Administrator. The period from Jail. 1 1934 to March 31 1934 Incl., shall constitute the reckoning pelted for the determination of net withdrawals. "Excess production or withdrawals from storage of crude oil In any State during the months of October, November and December 1933 shall be charged against the a lowable of the State for the months of January, February and March 1934." CRUDE RUNS TO STILLS, MOTOR FUEL STOCKS AND GAS AND FUEL OIL STOCKS WEEK ENDED FEB.3 1934. (Figures in barrels of 42 gallons each.) Daily Refining Capacity of Plants. Distrkt. NUMBER OF WELLS COMPLETED IN THE UNITED STATES.a December 1933. Feb. 10 1934 compares with 2,222,750 barrels produced during the week ended Jan. 27 1934, a daily average of 2,237,550 barrels during the four weeks ended Feb. 3 and an average daily output of 2,028,250 barrels during the week ended Feb. 4 1933. Inventories of gas and fuel oil again declined during the week under review, from 115,097,000 barrels to 113,220,000 barrels, off 1,877,000 barrels. In the preceding week inventories were off 742,000 barrels. Further datails, as reported by the American Petroleum Institute, follow: Reporting. Potential Rate. East Coast_.... _ 582,000 Appalachian,_ 150,800 Ind., III., Ky._ 436,600 Okla.,Kan.,Nlo 462,100 Inland Texas__ 274,400 Texas Gulf ____ 537,500 Louisiana Gulf _ 162,000 No. La.-Ark. 82,600 Rocky Mtn_ _ .._ 80,700 California 848,200 Total. % 582,000 100.0 139,700 92.6 425,000 97.3 379,500 82.1 165,100 60.2 527.500 98.1 162,000100.0 76,500 92.6 63,600 78.8 821,800 96.9 Crude Runs to Stills. % Daily OperAverage. ated . 464,000 82,000 303,000 194,000 85,000 417,000 110,000 50,000 26,000 421,000 oamm-ac.avv,-41 SUPPLY AND DEMAND OF ALL OILS. (Thousands of Barrels of 42 Gallons.) a AlMOT Fuel Docks. Gas and Fuel Oil Stocks. 14,785,000 5,334,000 1,941,000 913,000 7,794,000 4,031,000 5,623,000 3,329,000 1,198,000 1,628,000 5,182,000 5,215,000 1,855,000 1,848,000 199,000 549,000 1,003,000 729,000 12,008,000 89.644,000 Totals week: Feb. 3 19343.616,900 3,342,700 92.4 2,152,000 54.4 c51,588,000 113,220,000 Jan. 27 1934 3.618.000 3.342.700 92.4 2.219.000 60.4 b50.229.000 115.097.000 a Below are set out eat mates or otal motor fuel stocks In U. S. on Bureau of Mines basis for week of Feb. 3, compared with certain February 1933 Bureau figures: A. P. I. estimate on B. of M. bar0s, week of Feb. 1 1934 A. 1'. I. estimate on B. of M. basis, week of Jan. 27 1931 U. S. B. of M. motor fuel stocks, Feb. 1 1933 55,757,000 barrels U. S. B. of M. motor fuel stocks. Feb. 28 1933 58,781,000 barrels h Includes 27,703,000 barrels at refineries, 19,226,000 barrels at bulk terminals, in transit and pipe lines, and 3,300,000 barrels of other fuel stocks. c Includes 28,310,000 barrels at refineries, 19,928,000 barrels at bulk terminals, in transit and pipe lines, and 3,350,000 barrels of other motor fuel stocks. a Because of the many changes made by companies In their method of reporting stocks to the American Petroleum Institute, It has been decided to discontinue our attempt at estimating figures on a Bureau of Mines basis until further notice. Daily Average Natural Gas Output Off 30,000 Gallons During December 1933-Inventories Continue to Increase. Although the total production of natural gasoline in December 1933, was slightly above that of November, the daily average production declined from 4,100,000 gallons in November to 4,070,000 gallons in December, reports the United States Bureau of Mines, Department of Commerce. The largest increases in natural gasoline production in December were recorded in the Panhandle and Kettleman Hills fields. Production of natural gasoline in the East Texas field in December totaled 2,100,000 gallons, or a daily average of nearly 68,000 gallons. Stocks of natural gasoline continued to increase and on Dec. 31 1933 totaled 27,440,000 gallons, compared with 25,586,000 gallons on hand at the end of the previous month and with 18,840,000 gallons on hand a year ago. The Bureau's report further shows: PRODUCTION OF NATURAL GASOLINE (THOUSANDS OF GALLONS). Stocks End of Mo. Production. Jan.Dec. 1932. Dec. 1933. Nov. 1933. 5,600 59,200 60,760 9.400 8,100 800 31,100 359,700 378,600 2,200 22,900 24.800 32,700 359,400 371.100 3,100 38,100 46,200 1,100 15,000 18,700 5,300 56.200 62,400 41,200 493.000 551,900 3.288 305 11,671 520 7,801 657 139 910 2,149 2.840 180 11,737 326 6,512 812 110 851 2,218 126,200 123,100 1411600 1523800 3.870 4,160 4,070 4,100 3,005 2,931 33,610 36,281 99 92 97 98 27,440 ---653 25,586 --609 Dec. 1933. Appalachian 5.800 Illinois, Kentucky,Indiana_ 800 Oklahoma 31,500 Kansas 2,100 Texas 34,400 Louisiana 3,300 Arkansas 1,200 Rocky Mountain 4,700 California 42,400 Total Daily average Total (thousands of bbls.) Daily average Nov. 1933. Jan: Dec. 1933. Renewal of Tin Restriction Agreement of International Tin Committee Accepted by Participating Countries-Statistics for December. The governments of Bolivia, Malay States, Netherland East Indies, Nigeria, and Siam have accepted the recommendations of the International Tin Committee for the renewal of the tin restriction agreement for a period of three years from Jan. 1 1934, according to advices from Consul General Wilbur Keblinger, Singapore, made public Feb. 5 by the United States Commerce Department, which added: The new agreement contains no essential differences from the existing control scheme and provides for annual export quotas of not less than 40% of standard tonnages (except in the case of Siam whose export quota has been set at 9,800 long tons), plus a special quota for 1934 of4% of standard tonnages. The original intergovernmental tin quota scheme became effective provisionally on Mar. 1 1931 by agreement of a majority of the producers. The respective governments later provided for its enforcement with modifications until Jan. 1 1934. The monthly statistics for December, as contained in an announcement issued Feb. 8 by the New York office of the International Tin Research & Development Council, follow: INTERNATIONAL TIN COMMITTEE. Communilue. 1. The International Tin Committee met at the Billiton Offices, The Hague, on Jan. 24 1934. 2. The monthly statistics as to export are as follows: Cabled Information from Participating Countries for the Months of October, November, December 1933. Monthly Export 1933. Permis- Balance at sible from July 1 '33 July 1 '33. October. November. December. 985 1,102 +127 1,068 421 247 +22 286 1,273 1.210 +1,366 1,224 -47 2,531 1,869 1,927 968 948 -736 833 Note: A plus sign means excess over quota: a minus sign means in hand on quota allowance. N. E. I Nigeria Bolivia Malaya Slam 1,089 206 1,301 1.487 925 balance Slab Zinc Output Continued Higher During JanuaryShipments Lower than in Preceding Month, But Still Exceeds Corresponding Period a Year AgoInventories Again Gain. According to the American Zinc Institute, Inc., there were produced during the month of January 1934 a total of 32,954 short tons of slab zinc as compared with 32,004 tons in the preceding month and 18,867 tons in the corresponding period in 1933. Shipments totaled 26,532 short tons as against 27,667 tons in December last and 15,162 tons in January 1933. Inventories continued to increase during the month under review, amounting on Jan. 31 1934 to 111,982 short tons, which compares with 105,560 tons a month previous and 128,561 tons a year before. The Institute's statement follows: 949 Financial Chronicle Volume 138 SLAB ZINC STATISTICS (ALL GRADE5)-1929-1934. (Tons of 2,000 Pounds.) Produced During Period. 1929. Total for year. 631,601 Monthly aver_ 52,633 1930. Total for year. 504,463 Monthly aver_ 42,039 1931. Total for year_ 300,738 Monthly aver_ 25,062 1932. 22,471 January 21,474 February 22,448 March April 20,575 May 18,605 16,423 June 14.716 July 13,611 August September _ _._ 13,260 15,217 October 16.076 November.. December_. 18,653 Shipped During Period. Average Unfilled Retorts Order: During End of Period. Period. 602,601 50,217 75.430 6,352 529 57,999 68.491 18,585 436,275 36,356 143,618 196 16 31,240 47.769 26.651 314,514 26,210 129,842 41 3 19,875 23,099 18,273 22,404 21,851 22,503 18,032 18,050 14.971 12,841 16.360 20,638 19,152 15,970 15,745 129,909 129,532 129,477 132,020 132,575 134.027 135,902 133,153 125,774 121,840 121,948 124,856 31 0 0 0 0 20 0 39 20 20 20 20 22,044 21.752 22,016 20,796 20,850 18,742 18,295 14,514 14,915 17,369 19,753 21,023 21,001 20,629 21,078 19,469 20,172 19,670 17,552 15,067 13,809 15,901 17,990 20,372 24,232 23,118 23,712 20,821 19.637 16,116 16,949 18,017 16,028 10,333 8,640 8.478 Total for year_ 213,531 Monthly aver_ 17,794 218,517 18,210 1933. January February March April May June July August September _ _ October November_ December___ _ 15,162 14.865 15,869 19,399 27,329 36,647 45.599 42,403 34,279 37,981 26,783 627,667 18.867 19,661 21,808 21.467 21,516 23,987 30,865 33,510 33,279 35,141 32.582 32,004 (a) Retorts Stock at Shipped Operating for End of End of Period. Export. Period. Total for year 324,687 6343,983 Monthly aver_ 27,057 b28,665 170 14 128,581 133,357 139,296 141,364 135,551 122.891 108,157 99,264 98,264 95,424 101,223 105,560 40 0 0 45 0 44 22 22 0 44 0 22 239 20 18,560 22.660 23,389 22.375 22,405 23,569 24.404 25,836 27.220 25,416 26,820 28,142 27.190 21,970 22,500 21,683 21.526 22,154 22,590 24,127 25.968 25,019 25.819 27,159 26,318 6.313 8,562 8,581 18,072 21,056 27.142 35.788 25.594 27.763 23,366 20.633 15,978 23,653 1934. January 44 28.744 26,975 26.717 26.532 111,982 32.954 a Export shipments are included in total shipments. b Revised figures. Note.-These statistics include all corrections and adjustments reported at the year-end. Offerings of Copper Increase as Code Deliberations Lag-Zinc Again Advances. "Metal and Mineral Markets" for Feb. 8 reports copper attracted most attentiOn in the market for non-ferrous metals last week, chiefly because of the wide divergence of opinion on the ultimate outcome of the code deliberations. Offerings of copper increased, but, with buyers on the 8c. delivered basis, the price structure did not suffer greatly. Zinc again advanced in price, reflecting a tightening in the zinc concentrate situation in the Tri-State district. There was enough business in lead to maintain prices. Though the leading interest in aluminum has made no change in its official quotations, it is known that this factor has been forced to meet competition at times at lower levels. As low as 20c. has been named in the open market on the 99 plus grade. The movement of non-ferrous metals into consumption in February will probably show a fair gain over the record for January. Operators believe that the upward trend will continue for several months. The same publication says: Good Sales of Copper. Sales of copper in the domestic market were in good volume last week. amounting to about 8,000 tons. Under ordinary circumstances this buying would have strengthened prices, especially with news of the state of general business in the United States more encouraging than in some time past. The fact is that offerings increased and the selling was not confined to custom smelters. This development occasioned much comment in the trade and led quite a few to conclude that the proposed code for the industry would have to be changed in many respects before a final agreement can be reached. The bulk of the business was put through at 8c., delivered Connecticut, near-by and second-quarter shipment. On Monday, Feb. 5, a fair quantity sold as high as 8.125c., but the weighted average on the day's business was nearer the 8c. level. On the following day another parcel brought 8.125c., but this did not influence our quotation. Yesterday the 8c. price prevailed in nearly all quarters that participated in recent selling. An attempt to clarify the provision in the code relating to the disposition of surplus stocks revealed that supplies held in this country by foreign producers had not received adequate treatment. In addition, to add to the difficulties already encountered, custom smelters now find that their intake of ore resulting from the higher market for both gold and silver is likely to increase. Certain fabricators have asked for a smaller sha,re (60%) in current purchases under the code, which opened up that question. Deputy Administrator King arrived in New York Tuesday for the purpose of hastening the code, and, according to one report, he intends to return to Washington shortly with the various questions in dispute all settled. How • ever, few in intimate touch with the industry look for a quick settlement. The copper industry, in the opinion of competent observers. Is attempting too much in its code. European demand for copper was fairly active throughout the week. The dangerous political situation abroad has, if anything, increased buying interest in the metal. Prices abroad moved largely in sympathy with developments in this country. Buying of Lead Improves. Demand for lead improved last week, a fair tonnage changing hands each trading day. Total sales volume for the period slightly exceeded 4,000 tons. The price structure of the metal was unchanged, holding steady at 4c., New I ork, the contract settling basis of the American Smelting & Refining Company,and 3.90c., St. Louis. Much of the buying of the week was for prompt or near-by delivery, indicating that consumers are purchasing against immediate requirements. Battery manufacturers were particularly active in acquiring metal, with pigment interests and lead sheet and pipe producers also taking a fair tonnage. 950 Financial Chronicle Sales of lead for January shipment, according to statistics circulating in the industry,totaled about 27,000 tons;sales for February shipment already stand at about 21,000 tons; those for March shipment have reached about 11,000 tons. Zinc Moves Higher. Inquiry for zinc has picked up a little, and, with the concentrate market moving upward, this time a step ahead of metal, sellers raised prices until the quotation for Prime Western was fully 10 points higher than a week ago. The concentrate market, according to those well posted on doings in the Tri-State, will probably advance to $30 on Saturday. This news naturally imparted additional strength to the zinc market. Demand at the advance4.40c. St. Louis-seemed to fall off sharply. The January statistics were disappointing, the increase in stocks being larger than anticipated. The zinc statistics of the American Zinc Institute for December and January are summarized as follows, all figures in short tons: Jan. Dec. 32,954 32,004 1,063 1,032 a27,667 26,532 a105,560 111,982 15,978 26,717 Production Production, daily rate Shipments Stock at end • Unfilled orders a Revised. Tin Market Listless. The domestic tin market was a dull affair last week, with trading at almost a standstill throughout the entire seven-day period. Until tin-plate interests resume buying,a continuation of the current status quo seems probable. The foreign market was steady last week, the moderate fluctuations in domestic prices resulting from similar changes in sterling exchange rates. Chinese 99% tin was quoted as follows: Feb. 1st, 49.575c.; 2d, 48.550c.; 3d, 49.475c.; 5th, 49.275c.; 6th, 49.550c.; 7th, 49.875c. The world's visible supply of tin at the end of January was 22,476 long tons against 23,812 tons a month previous, according to the Commodity Exchange. The visible supply at the end of January. 1933, was 44,223 tons. Steel Operations Continue to Increase-Now at Approximately 38% of Capacity-Railroad and Automobile Buying Give Market Added Buoyancy -Prices Unchanged. The rising tendency in steel output is becoming more pronounced this month, states the "Iron Age" of Feb. 8 in its review of iron and steel operations. Except for the decline at Pittsburgh, operations have moved upward or held their own, the national average now being 38% as against 35% a week ago. Chicago is up 53/ points to 36%; the Valleys, 7 points to 42%; Cleveland, 4 points to 58%; Buffalo, 6 points to 38%, and the Philadelphia district, 1 point to 24%. Both pig iron and steel production were larger in January than in December, the rate of pig iron output gaining 2.8% and steel rising 1.6%. January pig iron production was 1,215,226 tons, or 39,201 tons daily, as compared with 1,182,079 tons, or 38,131 tons a day in December. On Feb. 1 there were 87 furnaces in blast, a gain of 12 in the month. The "Age" went on to say: Mounting demand from the automobile industry and the railroads have given the iron and steel industry a buoyancy that it has not possessed since last summer. Business is still unevenly distributed, but this is due to the current preponderance of orders for light rolled products and has nothing to do with the disgruntled attitude of certain motor car builders toward the steel code. It is now clear that the real reason the automobile industry has been spreading its steel orders among a larger number of mills is that it wishes to guard against delays in delivery. Certain strip and sheet mills are already solidly booked for the quarter and others are rapidly reaching the same condition. The continued inactivity in heavy rolled products, especially evident in Pittsburgh, where operations have receded from 21 to 20% of capacity, will soon be brought to an end with the placing of steel for the 12,725 freight cars, 159 passenger cars, 20 locomotives and 20 extra tenders just bought by the Van Sweringen lines. These equipment orders were sldely distributed geographically and the steel requirements for the freight cars alone are estimated at 175,000 tons. The Pennsylvania has taken bids on about 25,000 tons of steel for freight cars which it will construct in its own shops. Rail orders, despite reassuring advices from Washington, are still slow in mat.rializing. The Southern Pacific has closed for 40,000 tons, but the Chicago St North Western, which had originally intended to buy 65,000 tons, may not place more than 25,000 tons. Chicago rail mills, heretofore idle, have gone into production, but on light schedules. Producers are commencing to fear that even if promised rail orders are finally placed there will not be enough remaining time to roll and ship them before the expiration date for the present price, which is June 30. Makers of the heavier finished products continue to pin their hopes on public works projects, not unmindful of the fact that current delays may prove to their advantage by bringing them tonnage later in the year when their mill operations may be on a more economical basis. Structural steel awards of the week are light, amounting to only 9,850 tons compared with 18.800 tons a week ago. The general upward trend in steel demand,and especially the increasingly tense situation in sheets and strip steel, have caused buyers generally to take renewed interest in the market. Concern about deliveries has caused some consumers to place protective orders, and others have been influenced to take such action by fear of labor difficulties in the steel industry. In fact, buyers have shown greater alarm over the President's order covering employee elections than steel producers themselves. Fear of possible price advances has become a secondary consideration. But entirely aside from that fact, some producers are showing an increasing disinclination to raise prices lest the current buying movement might be checked. The attitude of the automobile industry may also account for a more cautious attitude on prices, despite the fact that current quotations on certain finishes of sheets and strips are unquestionably below the cost of production. But the complaints of motor car builders regarding steel prices are by no means accepted as justified. The increased cost of iron and steel per car, as compared with a year ago, does not exceed $11. which compares with average advances of $70 or more per car in retail prices. Feb. 10 1934 While the week has brought out no general price revisions in iron and steel, hot rolled strip has been reduced to 1.80 cents a pound. Chicago, cutting the differential over the Pittsburgh base to only $1 a ton. Scrap is quiescent but has a stronger tone than a week ago, and the "Iron Age" composite price is unchanged at $11,92 a gross ton. The pig iron and finisned steel composites are also unaltered at $16.90 a gross ton and 2.028 cents a pound respectively. THE "IRON AGE" COMPOSITE PRICES. Finished Steel. Feb. 6 1934, 2.0280. a Lb. Based on steel bars, beams, tank plates One week ago 2.0280. wire, rails, black pipe and sheets, One month ago 2.0280. These products make 85% of the One year ago 1.9230. United States output. High. Low. 1934 2.0280. Jan. 2 2.028c, Jan. 2 1933 2.036c. Oct. 3 1.867c. Apr. 18 1932 1.9770. Oct. 4 1.926o. Feb. 2 1931 2.037o. Jan. 13 1.9450. Dec. 29 1930 2.273c. Jan. 7 2 0180. Dec. 9 1929 2.317c. Apr. 2 2 273o. Oct. 29 1928 2.2860. Dec. 11 2 217c. July 17 1927 2.4020. Jan. 4 2.212c. Nov. 1 Pig Iron. Feb 6 1934, $16.90 a Gross Ton. Based on average of basic Iron at Valley One week ago $16.90 furnace foundry irons at Chicago, One month ago 16.90 Philadelphia, Buffalo, Valley, and Diemingham. One year ago 13.56 High. Low. 1934 216.90 Jan. 2 $16.90 Jan. 2 1933 16.90 Dec. 5 13.56 Jan. 3 1932 14.81 Jan. 5 13.56 Dec. 6 1931 15.90 Jan. 6 14.79 Dec. 15 18.21 Jan. 7 1930 15.90 Dec. 18 1929 18.71 May 14 18.21 Dec. 17 1928 18.59 Nov.27 17.04 July 24 19.71 Jan. 4 1927 17.54 Nov. 1 Steel Scrap. Feb 6 1934, 811.92 a Gross Ton. Based on No. 1 heavy melting steel One week ago 811.921 quotations at Pittsburgh,Philadelphia. One month ago 11.581 and Chicago. One year ago 6.831 High. Low. 1934 $12.00 Jan. 23 311.33 Jan. 2 1933 12.25 Aug. 8 6.75 Jan. 3 8.50 Jan. 12 1932 6.42 July 5 1931 11.33 Jan. 6 8.50 Dec. 29 15.00 Feb. 18 1930 11.25 Dec. 6 17.58 Jan. 29 1929 14.08 Dee. 3 1928 16.50 Deo. 31 13 08 July 2 15.25 Jan. 11 1927 13.08 Nov.22 The American Iron and Steel Institute on Feb. 5 1934 announced that telegraphic reports which it had received indicated that the operating rate of steel companies having 98.1% of the steel capacity of the industry would be 37.5% of the capacity for the current week, compared with 34.4% last week and 30.7% one month ago. This represents an increase of 9% over the estimate for the week of Jan. 29 1934. Current operations are at the highest rate since the Institute began to issue its weekly tabulation of production on Oct. 23 last. Weekly indicated rates of steel operations since the latter date follow: Oct. 23 Oct. 30 Nov. 6 Nov.13 Nov.20 1933. 1933. 81.6V 26.1 25.20 27.1 0 26.9% Nov.27 Dec. 4 Dec. 11 Dec. 18 Dec. 25 26.8 28.3 31.5 34.2 31.6 0 1934. Jan. 1 Jan. 8 Jan 15 Jan. 22 Jan 29 Feb. 5 29.3 30.7 34.2 32.5 34.4 37.5 0 "Steel" of Cleveland, in its summary of the iron and steel markets, on Feb. 5 stated: With the largest railroad freight car awards in several years. heavier releases by the automobile industry, and improvement in purchasing extending into practically all lines of products, steel demand last week gave evidence of expanding more rapidly than production. The Van Sweringen lines early this week were expected to make formal announcement of their allocation of 12,775 freight cars and 169 passenger coaches, which shortly will place orders for approximately 175,000 tons of rolled steel on mill books. Unofficial reports noted the distribution of 8,275 cars to three companies, while 20 locomotives and 20 extra tenders were placed with two builders. These and other impending car and rail awards foreshadow an early gain in steelworks operations, the automobile industry last week supplying the chief impetus which lifted the rate 3 points to 36%. Dispelling doubts concerning the rail program for this year, Washington officials state the steel industry can count upon orders for 845,000 tons of rails and some 200,000 tons of track fastenings, as originally planned, the bulk of this tonnage to be placed between March 1 and June 1. Rail production has been resumed at Chicago. That steelmakers are preparing for a much higher rate of operations is indicated by a net gain of 12 active blast furnaces in January, all at steelworks, 86 operating at the close of the month, since which time three more steelworks stacks have been blown in. Daily average pig iron production in January was 39,426 gross tons; and the total, 1.222,214 tons, both up 2.5% from December. In both instances, also, output was the largest since October last year, while it was the best record for January since 1931. Shape awards for the week, 15,024 tons, show little change from the preceding week, public, works projects.developing slowly. The Pennsylvania railroad has resumed with its electrification program, and this week is expected to begin releasing material on its contracts for 40,000 tons, including 8,000 tons for yard poles. Illinois Central is taking bids on 3,800 tons for a bridge at Cairo, Ill.; and the government, on 8,785 tons of plates. shapes and bars for seven airplane carriers to be built in navy yards. Scrap is strong, in a waiting market, with a bulge in purchasing anticipated as soon as some of the larger steel orders now pending reach mills. Purchase of 17.000 tons of No. 1 heavy melting steel by the leading interest at Pittsburgh at $13.50 a ton, delivered, has firmed the market there. Improvement in foundry operations is fairly general. Another cargo, 4,700 tons, of Royal Dutch iron has arrived at Philadelphia. Depreciation of the dollar evidently was an important element in American iron and steel exports advancing 17% to 184.585 gross tons in December, largest for any month since May 1930. Imports rose only 7% to 31,310 tons. For the year 1933 exports increased 126% to 1,350,692 tons, exceeding those for 1932 and 1931. Imports were up 9.3% to 414,790, arresting the yearly declines since 1928. "Steel's" London cablegram states general improvement in Great Britain is substantiated by re-opening of iron mines long idle. Trade on the Con- tinent also is more satisfactory. Japanese competition is penetrating into Central Europe. Steelworks operations last week advanced 33 points to 79% at Detroit; 5 to 69 at Cleveland; 2 to 25, eastern Pennsylvania; 2 to 34, Buffalo: 1 to 31, Chicago; and 9 to 41, Youngstown. They were down 3 Points to 19% at Pittsburgh; 4 to 82, New England; and remained unchanged at 64 at Wheeling; and 52, Birmingham. "Steel's" price composite are unchanged, with iron and steal. $32.43: finished steel, $51.10, and scrap $11.54. Steel ingot production for the week ended Feb. 5,is placed at nearly 363/ 2% of capacity, according to the "Wall Street Journal" of Feb. 6. This compares with a shade over 34°Z in the two preceding weeks. The "Journal"further states: Indications are that there will be another increase in the current week. as a number of steel companies, particularly among the smaller units in sheet steel, have expanded their schedules materially. For the U. S. Steel Corp. the rate of last week is estimated at around 32%, against 30% in the two previous weeks. Independents are credited with a rate of 40%, Compared with 37% in the two preceding weeks. The following table gives the production for the nearest corresponding week of previous years, together with the approximate change from the week immediately preceding: U. S. Steel. Industry. 1933 1932 1931 1930 1929 1928 1927 19 + Si 2692-2 47 +1 76Si +3 86 +1 Independents. 21 26 44 73 83 79 71 169i- Si 27 -19i 51 +1 80 +3 88 +134 89 ___ 864 - _ - 79 +1 +19i -2 +1 +3 +1 +5 +2 January Pig Iron Production Increased Sharply. Production of coke pig iron in January totaled 1,215,226 gross tons, compared with 1,182,079 tons in December, reports the "Iron Age" of Feb. 8. The daily output in January,at 39,201 tons,showed a gain of 2.8% over the December daily rate of 38,131 tons, continued the "Age," adding: There wore 87 furnaces in blast on Feb. 1, making iron at the rate of 41,085 tons a day, compared with 75 furnaces on Jan. 1, operating at the rate of 35,505 tons a day. Fourteen furnaces were blown in during January and two were blown out or banked, making a net gain of 12 furnaces. The Steel Corporation put in nine furnaces, independent steel companies put in four and took one off blast, and merchant producers put one in and one out. Among the furnaces blown in are the following: One Carrie, one Clairton two Duquesne, one Edgar Thomson, one Ohio and one Mingo, of the Carnegie Steel Co.; one Monongahela and one Lorain, of the National Tube Co.; one Campbell furnace, of the Youngstown Sheet & Tube Co.: one Weirton furnace of the Weirton Steel Co.; one Betty, of the Republic Steel Corp.; one Columbus furnace, of the American Rolling Mill Co., and a Palmerton furnace of the New Jersey Zinc Co. Furnace blown out or banked include: One Aliquippa, of the Jones & Laughlin Steel Corp., and one Toledo furnace of Pickands, Mather Co. PRODUCTION OF COKE PIG IRON AND OF FERROMANGANESE (GROSS TONS). January February March April May June 1,215,226 1934. 1933. 568,785 554.330 542,011 623,618 887.252 1,265,007 11,703 4,441,003 1,792,452 1,833,394 1,522.257 1,356,361 1.035.239 1.182.079 Half year July August September October November December 1933. 8,810 8.591 4,783 5.857 5,948 13,074 47.063 18,661 16,953 13.339 16,943 14,524 9.369 Year 13,212,785 136.762 x These totals do not Include charcoal pig iron. The 1931 production of this Iron was 46,213 gross tons. y Included In pig iron figures. DAILY AVERAGE PRODUCTION OF COKE PIG IRON IN THE UNITED STATES BY MONTHS SINCE JAN. 1 1928-GRO5S TONS. 1929. 1930. 1931. 1932. 1933. 1934. 111,044 114,507 119.822 122,087 125,745 123.908 119,564 122,100 121,151 116.585 115,745 106.047 91,513 115851 91,209 101,390 104,715 106.062 104.283 7,804 100,891 85,146 81.417 /5,890 69,831 62,237 53.732 85 025 55,299 60.950 65,556 67,317 64.325 54,621 61,356 47,201 41,308 38,964 37,848 36,782 31,625 50.069 31,380 33,251 31,201 28,430 25,276 20,935 28.412 18,461 17,115 19,753 20,800 21,042 17,615 23.772 18,348 19,798 17,484 20,787 28,621 42,166 24,536 57,821 59,142 50.742 43.759 36,179 38,131 36.199 39,201 Increase in Ingot Production. The American Iron & Steel Institute places steel ingot production of all companies in January at 1,996,897 tons, an increase of 177,249 tons over December, when the output was 1,819,648 tons. In January a year ago only 1,030,075 tons were produced. Approximate daily output for the 27 working days in January was 73,959 tons, which is only slightly over that of December in which month there were 2 less or 25 working days. The daily average output in December was 72,786 tons and the percent of operation in that month was 33.48% while in January it was a little higher, the per cent being 34.13%. A year ago in January when the approximate output per day for the 26 working days was as low as 39,618 tons, operations were at only 18.23% of capacity. We give below the monthly figures since January 1933: MONTHLY PRODUCTION OF STEEL INGOTS, JANUARY 1933 TO JANUARY 1934-GROSS TONS. Reported for 1933 by companies which made 96.57% and for 1934 by comPanice which made 98.10% of the open hearth and Bessemer steel ingot production in 1932. Months. 1933. Jan Feb Mar April May June July August Sept October.... Nov Dec Total OpenHearth. Calculated No.of Monthly Monthly WorkOutput Bessemer. Companies Output AU ins Reporting. Companies Days. Approx. Per Cent. Daily Output OperaAll Cos. tion.a 26 24 27 25 27 26 25 27 26 26 26 25 39,618 45,286 33,699 54.514 74.148 99,904 128,152 107,430 88,944 81.226 59,265 72,786 18.23 20.83 15.50 25.08 34.11 45.96 58.95 49.42 40.92 37.37 27.26 33.48 19,665,101 2,428,734 22,093,835 22,878,571 310 73,801 33.95 885,743 922,806 784,168 1,180,893 1,716,482 2,211,657 2,738,083 2,430,750 1.991,225 1,847,756 1,331,091 1,624,447 109,000 126,781 94,509 135,217 216,841 296,765 355,836 370,370 242,016 191,673 156,939 132,787 994,743 1,049,587 878,677 1,316,110 1,933,323 2,508,422 3,093,919 2,801,120 2,233,241 2,039,429 1,488,030 1,757,234 1,030,075 1,086,867 909,886 1,362,856 2.001,991 2,597,517 3,203,810 2,900,611 2,312,562 2,111,866 1,540,882 1,819,648 1934. Jan 73,959 34.13 172,489 1,958,956 1,996,897 27 1,786,467 a The figures of "per cent of operation" are based on the annual capacity as o Dec. 31 1932, of 67,386,130 gross tons for Bessemer and open hearth steel ingots. Production of Bituminous Coal and Anthracite • Declined During Week Ended Jan. 27 1934, but Continued to Show Increases Over the Same Period Last Year. According to the United States Bureau of Mines, Department of Commerce, estimates show that during the week ended Jan. 27 1934 production of bituminous coal amounted to 7,200,000 net tons, compared with 7,230,000 tons in the preceding week and 5,730,000 tons in the corresponding period in 1933. Anthracite output totaled 1,184,000 tons, as against 1,322,000 tons in the week ended Jan. 20 1934 and 814,000 tons in the week ended Jan. 28 1933. During the coal year to Jan. 27 1934 production of bituminous coal reached a total of 278,876,000 net tons, compared with 244,788,000 tons during the coal year to Jan. 28 1933, while anthracite output totaled 42,380,000 tons as against 40,353,000 tons in the corresponding period of the preceding coal year. The Bureau's statement follows: ESTIMATED UNITED STATES PRODUCTION OF COAL AND BEEHIVE COKE(NET TONS). Coal Year to Date. Week Ended. Jan. 27 1934.c Ferromansanese.y Pie Iron.' 1934. January February March Apr.I May June First six months-July August September October November December 12 mos.average_ 951 Financial Ononicle Volume 138 Jan. 20 1934. Jan. 28 1933. 1933-34: 1932-33.d 1929-30.d Bitum. coal a: Weekly total 7,200,000 7,230,000 5,730,000 278,876.000 244,788,000 435,294,000 968,000 1,717,000 Daily avge__ 1,200,000 1,205,000 955.000 1,102,000 Pa. anthra. b: Weekly total 1,184,000 1,322.000 814,000 42,380,000 40,353,000 60,918,000 244,700 169,520 161,400 Daily avge__ 197,300 220,300 135,700 Beehive coke: 503,700 5391,500 655,600 19,400 23,000 23,900 Weekly total 2,551 1,960 20,200 3,233 3,833 3,983 Daily avge__ a Includes lignite, coal made into coke, local sales and colliery fuel. b Includes Sullivan County, washery and dredge coal, local sales and colliery fuel. c Subject to revision. d Production during first week of April adjusted slightly to make accumulations comparable with year 1933-34. ESTIMATED WEEKLY PRODUCTION OF COAL BY STATES (NET TONS). Week Ended. Stale. Jan. 20 1934. Jan. 13 1934. Jan. 21 1933. Jan. 23 1932. Alabama Arkansas & Oklahoma_ Colorado_ Illinois Indiana Iowa Kansas & Missouri Kentucky-Eastern Western Maryland Michigan Montana New Mexico North Dakota Ohio Pennsylvania (bituminous) Tennessee Texas Utah Virginia Washington West Virginia-Southern_ Northern Wyoming Other States 180,000 47,000 109,000 922,000 332,000 67,000 127,000 536,000 164,000 36,000 11,000 48,000 28,000 58,000 459,000 1,800,000 71,000 15,000 55,000 171,000 27,000 1,370,000 497,000 89,000 11,000 187,000 70,000 119,000 925,000 352,000 77,000 148,000 527,000 178,000 37,000 13,000 55,000 29,000 73,000 450,000 1,790,000 68,000 14,000 62,000 178,000 32,000 1,400,000 498,000 87.000 11,000 184,000 55,000 121,000 745,000 289,000 68.000 126,000 506,000 158,000 34,000 9,000 48,000 26,000 56,000 367,000 1,529,000 67,000 8,000 69,000 190,000 35,000 1,336,000 300,000 80,000 7,000 160,000 57,000 166,000 893,000 275,000 86,000 143,000 421,000 174,000 35.000 10,000 52,000 34,000 55,000 376,000 1,418,000 73,000 12,000 92,000 149,000 41,000 1,198,000 437,000 106.000 4,000 Total bituminous coal Pennsylvania anthracite... 7,230,000 1,322,000 7,380,000 1,683,000 6,413,000 1,001,000 6,467.000 827,000 8,552,000 9,063,000 7,414,000 7,294.000 Total coal Preliminary Estimates of Bituminous Coal and Anthracite Production Show Gains for the First Month of the Current Year. According to preliminary estimates released by the United States Bureau of Mires, Department of Commerce, a total of 32,935,000 net tons of bituminous coal were produced 952 Financial Chronicle during the month of January 1934, as compared with 29,600,000 tons in the preceding month and 27,060,000 tons in the corresponding period last year. Anthracite production amounted to 6,127,000 net tons as against 4,424,000 tons in December 1933 and 3,807,000 tons in January 1933. The average production per working day during the month of January 1934 was 1,267,000 tons of bituminous coal and 235,700 tons of anthracite, as compared with 1,184,000 tons of bituminous coal and 177,000 tons of anthracite per working day during the preceding month and 1,070,000 tons of bituminous coal and 152,300 tons of anthracite per working day during January 1933. The Bureau's statement follows: Total for Month. (Na Tons) January 1934 (Preliminary)Bituminous coal Anthracite Beehive coke December 1933Bituminous coal Anthracite Beehive coke January 1933Bituminous coal Anthracite Beehive coke Average per No. of Working Day. Working Days. (Net Tons) 32,935,000 6,127,000 97,500 28 28 27 1.267,000 235,700 3,611 29,600,000 4,424,000 89,500 25 25 25 1,184,000 177.000 3,580 27,060,000 3,807,000 51,900 25.3 25 26 1,070,000 152,300 3.150 Note.-All current estimates will later be adjusted to agree with the result of the complete canvass of production made at the end of the calendar year. Stocks of Bituminous Coal in Hands of Consumers Declined 4% During Last Quarter of 1933, But Exceeded the Total on Jan. 1 1933 by 10.7%industrial Consumption in December at Approximately the Same Rate as in Preceding Month. Stocks of bituminous coal in the hands of industrial consumers and retailers declined in the last quarter of 1933, and on Jan. 1 1934 stood at 32,714,000 tons. This is a decrease of 4% since Oct. 1, when the commercial reserves totaled 34,095,000 tons, reports the United States Bureau of Mines, Department of Commerce. Of the 1,381,000 tons withdrawn from commercial reserves during the threemonth interval, 881,000 tons came from the stock piles of industrial consumers, while stocks in the yards of retail dealers show a reduction of 500,000 tons. The Bureau, in its announcement, further stated: Although present stocks are somewhat less than at the beginning of the previous quarter, they are still substantially higher than on Jan. 1 1933, when the total industrial reserves stood at 29.561,000 tons. This, however. was obviously subnormal, being less than at the corresponding season of any year since 1920. Moreover, the increase that has occurred in the past year is accounted for entirely by larger reserves in the hands of industrial consumers. Retail stocks of bituminous coal are slightly below the level of a year ago. In making comparisons of stocks on different dates it is necessary to take into consideration the highly variable factor of consumption. For this reason the best measure of reserves Is to express them in terms of the number of days they would last at the current rate of consumption. At the rate of consumption prevailing in December, the total commercial stocks on Jan. 1 were sufficient to last 32 days. This compares with a supply equivalent to 46 days on Oct. 1 and 30 days on Jan. 1 1933. It is interesting to note in this connection that although the actual tonnage on hand on Jan. 1 1934 was only 4% less than on Oct. 1, in terms of days' supply, the stocks on Jan. 1 show a decrease of 30.4%. In addition to the tonnage of bituminous coal in the hands of commercial consumers and retail dealers, there was 6.579.000 tons of soft coal in storage on the upper Lake docks on Jan. 1 and 1,533,000 tons standing in cars unbilled at the mines or in classification yards. A year ago the stocks in the hands of the dock operators amounted to 6,793,000 tons and the unbllled loads stood at 1,494,000 tons. SUMMARY OF COMMERCIAL STOCKS OF BITUMINOUS COAL, INCLUDING STOCKS IN RETAIL YARDS. Feb. 10 1934 Industrial Stocks and Consumption. With the exception of the railroads, all classes of industrial consumers drew on their reserves during December. The draft on stocks was heaviest at the general manufacturing plants, whose total reserves dropped from 8.344,000 tons on Dec. 1 to 7.585.000 tons on Jan. 1. a reduction of 759,000 tons, or 9.1%. A sharp decline was also reported by the steel works and rolling mills, but at the electric utilities, by-product coke ovens, coalgas retorts and cement mills the draft on stock piles was comparatively moderate. Stocks of bituminous coal held by the Class I steam railroads advanced 3.3% during the month and on Jan. 1 stood at 5.096.000 tons. Industrial consumption of bituminous coal in December remained at approximately the same level as in the previous month. The total consumption for the month was 21.644,000 tons, as against 21,018,000 tons in November, a gain of 3%. This increase, however, is entirely accounted for by the longer month and on an average daily basis the change is not significant. The outstanding feature of the December consumption statistics is the sharp increase in the requirements of the steel industry. Consumption at electric utilities, by-product coke ovens and coal-gas retorts increased, but these gains were largely counterbalanced by a slackened rate at other major groups. INDUSTRIAL CONSUMPTION AND STOCKS OF BITUMINOUS COAL. EXCLUDING RETAIL YARDS (NET TONS), (Determined jointly by F. G. Tryon, Coal Statistics Section, United States Bureau of Mines, and Thomas W.Harris, Jr., Chairman, Coal Committee, National Association of Purchasing Agents.) Stocks, End of Month, atElectric power utilities_a By-product coke ovens_b Steel and rolling mills_b Coal-gas retorts_ b Cement mills_ b Other industrial_c Railroad fuel (Class D.d Total industrial stocks Dec. 1933 (Preliminary). Nov. 1933 (Revised). Percent of Change. 5,116,000 6.061.000 1,025,000 482,000 249,000 7,585,000 5.096.000 5.213,000 6,129,000 1,085,000 489,000 250,000 8,344,000 4,933,000 -1.1 -5.5 -1.4 -0.4 -9.1 +3.3 25.614,000 26,443,000 -3.1 Industrial Consumption byElectric power utilities_ a By-product coke ovens_b Beehive coke ovens_b Steel and rolling mills_b Coal-gas retorts_b Cement mills_b Other industrial_c Railroad fuel (Class I)-d 2,778,000 3,554,000 140,000 975,000 210,000 124,000 7,339.000 6,524,000 2,589.000 3,391,000 145,000 859,000 195,000 167,000 7,193,000 6,479,000 +7.3 +4.8 -8.4 +13.5 +7.7 -25.7 +2.0 +0.7 Total Industrial consumption 21,644,000 21,018,000 +3.0 248,000 102,000 257,000 156,000 --3.5 -34.6 Additional Known ConsumptionCoal mine fuel Bunker fuel, fore[gn trade Days' Supply on Hand Electric power utilities By-product coke ovens Steel and rolling mi.ls Coal-gas retorts Cement mills Other industrial Railroad fuel (Class I) Days' S upply. at - 57 days 53 days 33 days 71 days 62 days 32 days 24 days 60 days 54 days 38 days 75 days 45 days 35 days 23 days Total industrial 37 days 38 days -2.6 a Collected by the United States Geological Survey. b Collected by United States Bureau of Mines. c Estimates based on reports collected jointly by the National Association of Purchasing Agents and the United States Bureau of Mines from a selected list of 2,000 representative manufacturing plants. The concerns reporting are chiefly large consumers and afford a satisfactory teals for estimate. d Collected by the American Railway Association, Domestic Anthracite and Coke. Retail Anthracite.-A canvass of a representative group of coal dealers indicates that retail stocks of hard coal declined 8.7% between Oct. 1 1933 and Jan. 1 1934. At the rate householders were calling for anthracite during December the dealers reporting had a supply equivalent to 34 days' requirements at the beginning of the new year. Anthracite in Producers' Yards.-Stocks of anthracite in producers' storage yards also declined during the last quarter of 1933, and on Jan. 1 were 12.7% less than at the beginning of the previous quarter. Anthracite on Lake Docks.-The reserves of hard coal in the hands of the Lake dock operators on Jan. 1 1934 were unusually low for this seasonTof the year, being 33.8% less than a year ago and 59.3% less than on the corresponding date of 1932. SUMMARY OF STOCKS OF DOMESTIC ANTHRACITE AND COKE. Percent of Change. Inc. or Dec. Jan, 1 1934.13 Dec. 1 1933.a Oct. 1 1933.a Jan. 1 1933. From From Prey, Year Quar. . Ago. Consumers' Stocks-c Industrial (tons) 25,614,000 26,443,000 26,495,000 22,411,000 -3.3 +14.3 Retail dealers (tons)..... 7,100,000 7,700,000 7.600,000 7,150,000 -6.6 -0.7 Total tons Days' supply, total_ Coal in TransitUnbIlled loads 32,714,000 34,143,000 34,095,000 29,561,000 -4.0 +10.7 30 days -30.4 +6.7 32 days 46 days 38 days 1,533,000 1,476,000 1,207.000 1,494.000 +27.0 +2.6 A 570 nnn 7 525 non 7555.000 6.793.000 -14.1 -3.2 a Revised. b Subject to revision. c Coal in the bins of householders is not Included. Figures for industrial consumers from following table. Figures for retailers from sample data. -5.0 -1.9 -13.2 -5.3 +37.8 -8.6 +4.3 Jan, 1 1934. Dec. 1 1933. Oct. 1 1933. Jan. 1 1933. From From Prey. Year Quar. Ago, Retailers' Stocks, Selected DealersAnthracite (net tons) 453,237 500.555 496,519 a -8.7 a 34 Anthracite (days' supply).13 38 63 a -46.0 a 90.359 116,208 137,407 Coke (net tons) a -34.2 a Coke (days' supply)_b 32 25 90 a -72.2 a Anthracite in producers' yards 1,106,085 1,293,081 1,267,225 1,732,216 -12.7 -36.1 Anthracite on Lake docks 257,439 300,375 294,960 389,024 -12.7-33.8 By-product coke at merplants 1 406.817 1,665,986 1,857,479 1,872,188 -15.1 -24.9 a Not available. b Calculated at current rate of deliveries to customers. Current Events and Discussions The Week with the Federal Reserve Banks. The daily average volume of Federal Reserve bank credit outstanding for the week ended February 7, as reported by the Federal Reserve banks, was $2,606,000,000, a decrease of $24,000,000 compared with the preceding week and an increase of $547,000,000 compared with the corresponding week in 1933. After noting these facts, the Federal Reserve Board proceeds as follows: On January 24 total reserve bank credit amounted to $2,606,000,000, a decrease of $24,000,000 for the week. This decrease corresponds with a decrease of $157,000,000 in Government deposits with the Reserve banks offset in part by increases of $25,000,000 in money in circulation, $84,000,000 in member bank reserve balances and $13,000,000 in nonmember deposits and other Federal Reserve accounts, and by changes in the cash holdings of the Treasury not accounted for by the increase in monetary gold stock. The monetary gold stock shown below as $7,036,000,000 represents the gold holdings of the United States Treasury valued at $35 an ounce. United States gold coin previously reported in circulation ($287,000,000 953 Financial Chronicle Volume 138 Chicago. Feb. 7 1934, on/Jan. 31 1934) has been deducted from the figures of monetary gold stock and money in circulation for last week and for Feb. 8 1933. Bills discounted declined $4,000,000 at the Federal Reserve Bank of New York and $10,000,000 at all Federal Reserve banks. The System's holdings of bills bought in open market declined $14,000,000 and of United States bonds $2,000,000, while holdings of United States Treasury notes and of Treasury certificates and bills were practically unchanged. The statement in full for the week ended Feb. 7, in comparison with the preceding week and with the corresponding date last year, will be found on subsequent pages, namely, pages 1003 and 1004. Beginning with the statement of March 15 1933, new items were included as follows: 1. "Federal Reserve bank notes in actual circulation," representing the amount of such notes issued under the provisions of paragraph 6 of Sec. 18 of the Federal Reserve Act as amended by the Act of March 9 1933. 2. "Redemption fund-Federal Reserve bank notes," representing the amount deposited with the Treasurer of the United States for the redemption of such notes. 3. "Special deposits—member banks." and "Special deposits—nonmember banks." representing the amount of segregated deposits received from member and non-member banks. skA new section has also been added to the statement to show the amount of Federal Reserve bank notes outstanding, held by Federal Reserve banks, and in actual circulation, and the amount of collateral pledged against outstanding Federal Reserve bank notes. Changes in the amount of Reserve bank credit outstanding and in related items during the week and the year ended Feb. 7 1934 were as follows: Increase (-I-) or Decrease (—) Since Feb. 7 1934. Jan.311934. Feb.8 1933. $ Bills discounted 73,000,000 —10,000,000 —180,000,000 Bills bought +66,000,C00 a/,000,ist0 —14,thm,000 United btates Government securities _2,432,000,000 —2,000,000 +648,000,000 Other Reserve bank credit —13,000,000 4,000,000 +2,000,000 TOTAL RES'VE BANK CREDIT 2,606,000,000 —24,000,000 +521,000,000 Monetary gold stook 7,039,000,000 +3001000,000 +2,788,01)0,000 Treasury a National bank currency 2,301,000,000 —1,000,0ta0 +98.000,000 noney in circulation ',3i7,o0o.0(J0±25,O0O,O00 —101,000,000 Member bunk reserve balances 2,736.000.000 +84,000,000 +317.000,000 Treasury cash and deposits with Federal Reserve banks 3 449,000,000 +2853000,000 +3,104,000,000 Nonmember deposits and other Federal Reserve accounts +28,000,000 441.000,000 +13,000,000 Returns of Member Banks in New York City and Chicago—Brokers' Loans. Beginning with the returns for June 29 1927, the Federal Reserve Board also commenced to give out the figures of the member banks in New York City, as well as those in Chicago, on Thursday,simultaneously with the figures for the Reserve banks themselves, and for the same week, instead of waiting until_the following Monday, before which time the statistics covering the entire body of reporting member banks in the different cities included cannot be got ready. Below is the statement for the New York City member banks and that for the Chicago member banks for the current week, as thus issued in advance for the full statement of the member banks, which latter will not be available until the coming Monday. The New York City statement, of course, also includes the brokers' loans of reporting member banks. The grand aggregate of brokers' loans the present week shows an increase of $8,000,000, the total of these loans on Jan. 31 1934 standing at 96,000,000, as compared with $331,000,000 on July 27 1932, the low record for all time since these loans have been first compiled in 1917. Loans "for own account" increased from $731,000,000 to23741,000,000, while loans "for account of out-of-town banks"remained even at $146,000,000 but loans "for account of others" decreased from $11,000,000 to $9,000,000. CONDITION OF WEEKLY REPORTING MEMBER BANKS IN CENTRAL RESERVE CITIES. New York. Feb. 7 1034. Jan.31 1934. Feb. 8 1933. Loans and Investments—total Jan.311934. Feb. 8 1933. 1,328,000,000 1.349,000,000 1,051.000,000 On securities All other 577,000,000 574,000.000 640,000,000 277,000,000 300,000,000 281,000,000 293,000,000 343,000.000 297,000,000 751,000,000 775,000,000 411,000,000 471,000,000 280,000,000 490,000,000 285,000,000 213,000,000 198,000,000 Reserves with Federal Reserve Bank _ _ _ 346,000,000 41,000,000 Cash In vault 313,000,000 41,000,000 303,000,000 18,000.000 1,131,000,000 1,120,000,000 328,000.000 330,000,000 65,000,000 65,000,000 923,000,000 317,000,000 9,000,000 188,000,000 294,000,000 275.000,000 287,000.000 Investments—total U.S. Government securities Other securities Net demand deposits Time deposits Government deposits 186,000,000 313,000,000 Due from banks Due to banks Borrowings from Federal Reserve Bank _ Complete Returns of the Member Banks of the Federal Reserve System for the Preceding Week. The Federal Reserve Board resumed on May 15 1933 the publication of its weekly condition statement of reporting member banks in leading cities, which had been discontinued after the report issued on March 6, giving the figures for March 1. The present statement covers banks in 90 leading cities instead of 101 leading cities as formerly, and shows figures as of Wednesday, Jan. 31 1934, with comparison for Jan. 24 1934 and Feb. 1 1933. As is known, the publication of the returns for the New York and Chicago member banks was never interrupted. These are given out on Thursday, simultaneously with the figures for the Reserve banks themselves, and cover the same week,instead of being held until the following Monday, before which time the statistics covering the entire body of reporting member banks in 90 cities cannot be got ready. In the following will be found the comments of the Federal Reserve Board respecting the returns of the entire body of reporting member banks of the Federal Reserve System for the week ended with close of business on Jan. 31: The Federal Reserve Board's condition statement of weekly reporting member banks in 90 leading cities on Jan. 31 shows increases for the week of $138.000.000 in loans. $541,000,000 in United States Government securities, $46,000,000 in other securities and $605,000,000 in Government deposits, and a decrease of $176.000,000 in reserve balances with Federal Reserve banks. Loans on securities increased $113,000,000 at reporting member banks "All in the New York district and $111,000,000 at all reporting banks. other" loans increased $49,000,000 in the New York district and 827,000.000 at all reporting banks, and declined $8.000,000 in the Boston district. the Holdings of United States Government securities, incident to all Treasury's recent financial operations, increased substantially in nearly districts, the total increase being $541,000,000. Holdings of other securities increased $46,000,000 in the New York district and at all reporting banks. from Federal Reserve Borrowings of weekly reporting member banks of $7,000,000 for the banks aggregated $13.000,000 on Jan. 31, a decrease week, Licensed member banks formerly included in the condition statement of member banks in 101 leading cities, but not now included in the weekly statement, had total loans and investments of $1,010,000,000 and net demand, time and Government deposits of $1,031,000.000 on Jan. 31. compared with $971,000,000 and $993,000,000. respectively, on Jan. 24. A summary of the principal assets and liabilities of the reporting member banks, in 90 leading cities, that are now included in the statement, together with changes for the week and the year ended Jan. 31 1934, follows: Increase 1+) or Decrease (—) Since Feb. 11933. Jan. 31 1934. Jan. 24 1934. Loans and Investments—total.. 17.121.000,000 +725,000.000 +385.000,000 8,349,000,000 +138,000.000 —433,000,000 3,609,000,000 4.740,000,000 +111.000,000 +27,000,000 —142,000,000 —291,000,000 Loans--total On securities All other 8,772,000,000 +587.000.000 +798,000,000 U. S. Government securities..., 5,786,000,000 2.986,000.000 Other securities +541.000,000 +46,000,000 +815.000,000 —17,000,000 1,871,000,000 217,000,000 —176,000,000 —15,000,000 —20,000.000 +49,000,000 11,118,000,000 4,367,000,000 975,000.000 —20,000,000 —5,000,000 +605,000,000 —115,000,000 —244,000,000 +710,000,000 1,304,000.000 2,968,000,000 —4.000,000 —33,000,000 —412.000.000 —410,000.000 13,000,000 —7,000,000 —37,000.000 Investments—total Reserve with F. R. banks Cash in vault Loans and Investments—total 6 964,000,000 6,986,000,000 7,073.000,000 Loans—total 3,420,000,000 3,466,000.000 3.405.000.000 Net demand deposits Time deposits Government deposits On securities MI other Investments—total 1 729,000,000 1,748,000,000 1.606,000,000 1,691,000,000 1,718,000,000 1,799.000,000 3,544,000,000 3,520.000,000 3,668,000,000 Due from banks Due to banks Borrowings from F. R. banks 2,485,000,000 2,421,000,000 U. S. Government securities 1 059,000,000 1,099,000,000 Other securities 754,000,000 749.000,000 Reserves with Federal Reserve Bank 37,000,000 38,000,000 Cash in vault 5,331,000,000 5,342,000,000 Net demand deposits 710,000.000 707,000,000 'Ilme deposits 501,000,000 487,000,000 Government deposits 76,000,000 75,000,000 Due from banks 1 312,000.000 1,260,000,000 Due to banks Borrowings from Federal Reserve Bank_ Loans on secur. to brokers & dealers. 741,000,000 731,000.000 For own amount For account of out-of-town banks...146,000,000 146,000,000 11,000.000 9,000,000 For account of others 2,572,000,000 1,096,000,000 924,000,000 38,000,000 5,717,000,000 849,000,000 92,000,000 75,000,000 1,537,000.000 888.000,000 422,000,000 Canada to Ship Gold to United States—Will Sell There to Get Higher Price. In Canadian Press advices from Ottawa Feb. 1 to the Montreal "Gazette" it was stated that the most important immediate effect upon Canada of President Roosevelt's new monetary policy which went into effect Jan. 31, will be that Canadian gold will now go to the United States, whereas it has for nearly a year, been shipped mainly to London. This was the only positive comment that could be secured here to-day. The advices continued: 616,000,000 . 607,000,000 280,000,000 281,000,000 242,000,000 180,000.000 What changes may be made in the Canadian monetary system as a result of happenings in the United States remains to be decided by the Government, Total Oa demand On time 896,000,000 405,000,000 11,000.000 6,000.000 954 Financial Chronicle and no inkling of such plans can be secured from any official source. It would appear, however, that there will be no pressing need for Canadian authorities to act at once, and the policy will doubtless be one of watchful waiting on developments. The Canadian Government has for a long time acted as the agent for Canadian mines in the marketing of gold. Export of the precious metal from Canada was made illegal by act of Parliament last April, except by license from the Department of Finance. Since then the department has bought all gold produced and sold it in the best market, passing along to the producers the benefit of any increase over the Canadian price of $20.67 an ounce. United States now offers the best market, with President Roosevelt prepared to buy all gold offered at $35 an ounce. The Canadian Government policy of selling gold in the market that offers the best price consistent with handling costs, will direct the outward flow of the Canadian product to that country. . . . In the meantime the gold in the Canadian Treasury, about $72,000,000 worth, held as a coverage for Dominion currency which was bought at the Canadian standard price of $20.67 an ounce,shows a potential profit of the difference between that rate and the $35 an ounce which could be secured in the United States. United States currency was at a slight premium in Canada to-day, but the exchange rate, it is explained, is governed entirely by supply and demand. Eventually the Roosevelt move will affect the exchange by virtue of gold movements which will follow, but no violent fluctuations are anticipated and it is anticipated that the United States dollar will be stabilized at about $5 in terms of sterling pounds. Since the President's announcement on Jan. 15, there has been a feeling that his proposal might result in a three-way stabilization of Canadian, United States and sterling currency, thus achieving the result looked for at the world economic conference when domestic conditions in the United States prevented that country entering into the proposed stabilization efforts. Dollar's Fall Shuts International Management Institute at Geneva—Office Loses Support of the American Twentieth Century Fund. From Geneva on Feb.1 a wireless message to the New York "Times" said: The International Management Institute announced to-day that it was suspending its activities in their present form because the American Twentieth Century Fund had discontinued its financial support,"due to inability to compensate for the fall in dollar exchange and other reasons." The Institute's library and scientific records have been placed in the International Labor Office. The board of directors hopes to continue some of the work it started in 1927 in conformity with resolutions on rationalization adopted by the World Economic Conference in that year. "Every year," says the Institute's board,"more industrial enterprises and individuals appreciate that only by the application of scientific knowledge and scientific methods can mankind solve the economic problems of the modern world. Only through international collaboration can that knowledge of these methods be fully developed." American Capital to Amount of $75,000,000 Sent Back from London—British Estimate Return Flow Since President's Message Jan. 15—$375,000,000 Found Haven. The movement of American capital back to the United States which set in three weeks ago, has not yet assumed anything like the total of its flight from home during the latter part of 1933, said wireless advices Feb.5from London to the New York "Times," which continued: At the middle of last November, there were authoritative estimates in London that in the three months preceding that date, $375,000,000 of timid American capital had found refuge in England through purchases of British securities and sterling. According to estimates by the same experts to-day, about $75.000,000 of that capital has repatriated itself since President Roosevelt's message to Congress of Jan. 15 asking for authority to fix the value of the dollar at between 50 and 60 cents. Homeward Movement Accelerated. With the assurance contained in that message that there was no danger of unsontrolled. wholesale inflation In the United States, the flight of capital from that country to England ceased, and a reverse movement soon began. The latter has been gradually accelerating, and it is taken for granted here that most of the truant dollars eventually will go home. But so far, the return has not been on such a large scale as seems indicated by the exchange market. The movement of exchange, so far as it can be traced and accounted for, Is attributable, primarily, to covering by shorts who had sold forward dollars in a mistaken anticipation of further declines. London is the chief point at which this manoeuvring for cutting down prospective losses is being conducted. The repatriation of dollars which already has been accomplished is due In part to the sending back of actual gold and in part to responses from investors to optimism in Wall Street, New York brokerage houses are sending to their London agents cheerful reports on the market outlook at home. As a result, some American capital which last fall was invested in British securities now is being withdrawn for reinvestment in the United States. But the volume of these transactions is not yet nearly so heavy as it is expected that they will be in the near future. France Acts to Stem Gold Shipments—Rediscount Rate Increased from 234 to 3%—Reported Negotiation With Great Britain to Provide Franc Equalization Fund. In United Press advices Feb.8 to the New York "Journal of Commerce" it was noted that France that day took steps to check the outflow of gold that has been gathering momentum since the United States devalued its dollar and threw franc parity below the dollar level. Continuing, the account also said: The Bank of France raised its rediscount rate from 23,i to 3%,presumably In co-operation with the Federal Reserve system, in the hope it would prevent the exodus of gold and check French investment in Wall Street. Feb. 10 1934 Seeks British Loan. A second step toward keeping the franc up to stop gold shipments was reported in negotiation with Great Britain for a loan to provide a franc equaliziation fund. It was believed the French would obtain the loan through barter with Britain, in return restoring the cut quotas on British goods, thus terminating the Franco-British trade war due to have begun Immediately. Meantime gold continued to leave France by ship and airplane. The Bank of France weekly statement showed a decline of 194,534.608 francs ($12,489,121) to 76,860,453,361 ($4.934,441,082). Further losses were anticipated in the next statement and the losses were expected to continue until the franc reached 15.12 to the dollar above that level the gold flow might be reversed. The franc closed to-day at 15.57 to the dollar (6.423c. a franc), the firmer price brought on by the favorable reception to Doumergue's accession to the Premiership. The President Harding sailed to-day from Havre carrying 175,000.000 francs ($11,235,000) in gold for the United States. Airplanes took 80,000,000 francs ($5,136,000) gold to London. Another 60,000,000 francs in gold arrived in London from Holland and Switzerland. Seventeen liners carrying gold estimated at a billion francs (1164,200,000) will sail for the United States in the next few days. On Friday the Deutschland will sail with 40,000,000 francs gold and the Paris with 8,000,000 francs gold. The Volendam, Leerdam and President Harding are taking consignments from Holland and Belgium. Meanwhile special airplane; and trains are rushing gold to London, since many traders desire an immediate profit on the gold which is obtained through deals on the London gold market. In a wireless message the same date (Feb. 8) to the New York "Times" it was stated that those abroad who jump at the conclusion that France is making a last desperate stand against being forced to abandon the gold standard will certainly run the risk of being premature, to say the least, it was asserted in financial circles. From these advices we also quote: The franc has strengthened against all other currencies, despite the critical internal situation. It is now obvious to observers here that certain psychological developments are providing powerful support to the franc. There is, in fact, what may be called a psychological embargo on gold from the Bank of France. That does not mean that the Bank of France is not observing all the rules of a free gold standard. But there is a surprisingly small gold drain, despite the great profits which arbitrage transactions between Paris and New York have been bringing since Jan. 31. Dealings Suspended. The Bank's statement for the week ended Feb. 2, issued to-day, shoes a loss of 194,500,000 francs, representing the difference between the amounts sent to New York and London and the amounts received from Amsterdam and Zurich. It is estimated that 500.000.000 were sent out and 300,000,000 received. Since Feb. 2, about 1,000.000,000 has been withdrawn and perhaps 400.000,000 received. This does not constitute a huge drain and the logs is showing signs of slackening. Yesterday, following the bloody riots of Monday night when the Republican regime seemed in danger, one would normally have expected a gold run on banks, yet there were no dealings whatever in the Bourse between reputable brokers and bankers, who were the only ones who count. The Bank of France did not ask any one to refrain from buying gold. It would have been extremely bad policy and therefore bad business for any large bank to withdraw gold, it is pointed out. It is highly important for banks to be on good terms with the Bank of France, and American banks are no exception. The consequences to American banks of later facing the accusation that they had contributed to the downfall of the franc would be such that they might as well close up, it is observed. Loansfor Gold Buying Barred. After President Roosevelt fixed the price of gold at $35 the bead of one of the largest American banks visited the Bank of France and announced that his bank would never embarrass the Bank of France by dealing in arbitrage transactions in gold. All such deals are going through the London market. The French banks naturally have even greater reason not to embarrass the Bank of France. Furthermore, the bank will only lend franca for commercial purposes—that is to say, will' not give credit Just to have the borrower turn that credit into gold. • That greatly reduces the amount of francs available for gold purchases. This situation has naturally brought about an Illicit quoted open market in gold with large premiums sometimes reaching 750 francs per kilogram. These material and psycholigical obstacles plus such things as lack of available ships and violent fluctuations of the gold price in London and pound quotations explain why France has not the slighest fear now of an unbearable gold drain, bankers say. France fears only two things, they contend—an internal run on gold or abandonment of the gold standard by Holland and Switzerland. In the "Times" of Feb. 6 it was stated the withdrawal of gold from France by American banks was slowed up on Feb. 5 by the imposition of new regulations by the Bank of France requiring 48 hours' advance notice of intention to ask for the delivery of gold. The "Times" further said in part: In the light of the disturbed political conditions in France, many banks felt that this requirement, first imposed last Saturday, had greatly increased the risk of gold transactions. With the gold flow, already choked by the scarcity of shipping facilities. further restricted in this fashion the pressure of funds seeking to escape from France fell heavily upon the foreign exchange market, driving the franc to a discount of 7.06% in terms of the dollar, a rate which was equal to a premium of 7.6% for the dollar. As to the reported 48-hour notice the "Times" of Feb. 7 had the following to say: As to the 48-Hour Gold Notice. Reports from abroad quoting the Bank of France as denying that it required 48 hours advance notice on large gold withdrawals were heavily discounted by local banks engaged in transfers of gold. Three important institutions which have been active in arranging gold shipments insisted that such notice was required and that the change was put into effect late last week. Another bank said that it understood 25 hours' advance notice was considered satisfactory. Only one important bank, and that a bank not at present importing any gold, cast doubt upon the matter. According to this institution. the Bank of France is merely seeking the co-operation of foreign banks by the Volume 138 courtesy of advance advice as to intention to ask for gold. The banks which are actually carrying out the operations say that this amounts to a rule. As to the French attitude toward the U. S. Monetary policies, the "Times" of Feb. 4 contained the following from Paris, Feb. 3: Resentment against the American monetary policy is mounting fast in France. Despite official efforts to disguise this feeling, those who are following the situation closely here are convinced that there is not only great anxiety over the turn developments are taking, but also anger against what is being characterized as a deliberate effort to embarrass France. Even those authorities who are willing to credit the United States with no desire to create difficulties for the French contend that the policies being pursued across the Atlantic will cause such embarrassment nevertheless. The French face what is being called a world-wide attack against the franc. Within the last two days in such widely separated cities as Shanghai, Milan and Zurich, without mentioning New York and London, there has been heavy selling of francs. The gold drain, while still moderate, is well under way. American "Inaction" Criticized. The French say that they do not resent that, because they have been at the receiving end the greater part of the last five years, and they express willingness to meet all legitimate demands within normal working of the gold standard. What they resent, they say, is the failure of the American stabilization fund to make any apparent effort to reduce the premium between the dollar quotation here and the American figure, which is making gold shipments so profitable. It is contended that the dollar could not possibly be brought down to 15.07 francs merely by such shipments as are possible under existing rules regarding insurance. Instead of President Roosevelt's decree bringing virtual stabilization of the dollar, the French have seen their exchange market in a state of wild excitement, with the dollar and the pound gyrating uncontrollably. The French assert that this demonstrates either incompetence on the part of those directing the American policy or unwillingness to furnish enough dollars to meet the present heavy demand. With regard to heavy gold shipments from abroad a week ago, a London cablegram, Feb. 4 to the New York "Journal of Commerce," said: The 13erengaria and the Bremen have Just sailed for New ork carrying almost $35.000.000 gold, attracted by the new price of $35 per ounce. Ten liners to sail for the United States in the near future have booked cargoes of as much gold as the insurance companies will cover. Yesterday almost $5,000.000 gold was sold in open market and placed in storage to be taken to New 1 ork on the first vessel available. Gold Share Profits. It is estimated here that the gold policy adopted by the United States has created profits of about $25,000,000 to holders of gold mining shares during the past few days. Mining shares boomed as the price of gold in the open market was advanced Thursday and Friday. Yesterday the price was reduced from the high of 139s. 6d. to 1388. 3d. The drop in price corresponded to the decline in dollars as on the previous day the price had advanced with the growing premium on American currency. In the past the gold price had closely followed the movements of the franc. It is considered likely that for the time being the price of gold will remain at a premium over the franc and at a discount to the dollar. This leads to the movement of French gold to the London market and from there to New York. The Berengaria carried almost $25.000,000 gold. Of this amount nearly $5,000,000 had been sent by airplanes from Amsterdam which arrived at the British port Just in time to catch the transatlantic vessel. Noting that a pronounced rally for the franc developed on Feb. 6, despite evidences that the American Stabilization Fund at the present time is avoiding all possible risks in the support of foreign currencies and that it is not being used to support the franc, the "Journal of Commerce" of Feb. 7 likewise said: After reaching thelow Monday afternoon of6.15% the recovery yesterday carried the franc to 6.34 X. The closing rate was 6.30%• According to reports in informed quarters the Bank of France entered the market on a large scale, taking up offers of French exchange. The Federal Reserve Bank of New York announced the sale to itself of$4,543,100 gold which had been earmarked in New York by foreign Central Banks. According to exchange traders the sale was made by the Bank of France and the proceeds immediately used to support the franc. Exchange Control. As far as could be learned the American Stabilization Fund thus far has not been used at all to maintain the maximum value of the dollar at 59.06 per cent of the old parity. It is felt that given the possibility of a large internal flight of capital from France, particularly, the fund might be called upon to purchase at a risk a huge volume of francs. On the other hands, foreign balances in France are extremely light. It was definitely learned that purchases of dollars must be made under license and that the repatriation of capital is placed under restrictions similar to those placed on the flight of capital. Exchange transactions are allowed for commercial purposes, for traveling expenses and to meet old engagements. However, it was stated, the restrictions upon the return of funds allow for a great many loopholes, the simplest of which is to buy dollars or dollar securities in London. Oversubscription Announced of New French Treasury Loan--3,000,000,000 Francs 5% Treasury Bonds Is First Portion of 10,000,000,000 Francs Total. In Paris advices to the "Wall Street Journal" of Jan. 30, it was stetted that according to an announcement by the French Ministry of Finance subscriptions in excess of 3,500,000,000 francs were received to the offering of 3,000,000,000 francs 5% Treasury bonds. This was the first portion of a total of 10,000,000,000 francs which the Treasury has been authorized to issue. From the same account we also quote in part as follows: Seeing that the Stavisky scandal broke out immediately after the opening of the loan and that the consequent agitation continued thereafter without a pause, the results of the issue are considered as an extraordinary testimony to public faith in the national credit. But the subscriptions do not put the 955 Financial Chronicle Treasury completely out of danger in the coming months when income tax collections will be low. Apart from the risk of having to meet demands for reimbursement of Treasury bills, of which there are some 10,000.000.000 francs outstanding. compared with an authorized maximum of 15,000,000,000 francs, it is estimated that the 'Treasury will require 6,000,000,000 francs as a working fund.over the first half of the year. The latest official statement of the public debt, apart from war debts, shows a total of 298.746.000,000 francs. an increase of 24,000,000,000 francs over May 1932. The opening of the books on Jan. 3 for the initial instalment of the 10,000,000,000 franc loan was noted in our issue of Jan. 6, page 43. From the London "Financial News"of Jan.4 we quote the following regarding the offering: Subscription to the first slice of the 10,000,000,000 francs 5% French Treasury Loan was opened yesterday morning with the issue price at 9734 francs. Subscribers, says Reuter from Paris, have the choice of five‘year bonds, repayable at par, 10-year bonds, repayable at 105 and 15-year bonds, repayable at 110. The interest is payable in two equal parts half-yearly, as from Jan. 5. The French Treasury, adds Reuter, has watched with interest the success of the British Government's conversion operations, and has long desired to bring about a similar reduction of interest rates in France. Premier Choutemps' Statement. M. Chautemps, the Premier, upon returning to Paris, from a holiday. according to the Exchange, said that the new loan was a logical outcome of the efforts of Parliament to balance the budget. "The Government has shown its determination to bring about financial recovery, and with the renewal of confidence in our national credit the success of the loan is assured." M. Bonnet, the French Minister of Finance, quoted by Reuter. claims that good results have already been achieved by the passing of the retrenchment budget. In a Paris cablegram Feb. 8 to the New York "Times" it was stated: The Ministry of Finance announced to-day that the subscriptions to the last loan totaled slightly more than 4,000,000,000 francs, greatly exceeding estimates and declared to be highly satisfactory. Statement of Bank for International Settlements for January—Cash on Hand Jan. 31 Totaled 3,370,163, Swiss Gold Francs, as Compared with 2,685,610 Dec. 31. The Jan. 31 statement of the Bank for International Settlements, made public at Basle, Switzerland, Feb. 4, shows that cash on hand on Jan. 31 was 3,370,163.11, Swiss gold francs, 684,552 francs above Dec. 31. The statement, as contained in Associated Press advices from Basle, Feb. 4, to the New York "Times" of Feb. 5, follows (figures in Swiss gold francs at par): Assets. December. January. 7,577,760.02 7,577.760.02 I. Gold in bars II. Cash on hand and on current account with banks 3,370,163.11 2,685.610.24 18,689,906.85 19.680.175.41 III. Sight funds at interest IV. Rediscountable bills and acceptances: 181.891,323.42 1. Commercial bills and bankers acceptances_ _165,273,233.84 169.759.092.79 187,936,093.98 2. Treasury bills 353,209,327.82 351.650,416.24 Total V. Time funds at interest not exceeding 3 months 35,852,250.48 37,309,501.71 VI. Sundry bills and investments: 1. Maturing within three months: 23,591,051.19 31.527,756.87 (a) Treasury bills 33,736,968.19 33,816,959.45 (b) Sundry investments 2. Between three and six months: 16,873,539.98 23.364.877.88 (a) Treasury bills 67,403,003.40 67,559,479.00 (b) Sundry Investments 3. Over six months: 47,986,996.35 24.574,783.22 (a) Treasury bills 37,981,610.34 38.000,792.14 (b) Sundry investments 228.844,648.62 227,573,169.45 Total 7,321,013.26 7.140.011.88 VII.Other assets 653,593,590.99 654.888,124.12 Total assets Liabilities. I. Paid-up capital II. Reserves: I. Legal reserve fund 2. Dividend reserve fund 3. General reserve fund Total III. Long-term deposits: 1. Annuity trust account 2. German Government deposit 3. French Government guarantee fund 125,000.000 00 125,000.000.00 2,021,691.48 3,894,823.45 7,789,646.89 2.021.691.48 3.894,823.4F 7.789.646.89 13,706,161.82 13,706,161.82 154,200,000.00 154,481,250.00 77,100,000.00 77,240,625.00 42,757,823.69 43.658,546.12 • 274,057.823.69 275.380,421.12 Total IV. Short-let m and sight deposits(various currencies): 1. Central banks for their own accounts: 106,519,814.78 107,305,977.79 (a) Not exceeding three months 48,303,423.59 48.951.617.95 (b) Sight Total 2. Central banks for the account of others: Sight 3. Other depositors: Sight V. Sight deposits (gold) VI. Miscellaneous items 0 Total liabilities 154,823,238.37 156,257.595.74 11,563,650.02 11,839.465.96 782,679.24 922.883.89 7,577,760.02 7,577,760.02 65,942,073.18 64,344,040.22 653,593,590.99 654,888,124.12 Maintenance of Gold Base is Promised by Premier Daladier of France. The following (United Press) from Paris Feb. 6 is from the New York "Journal of Commerce": Premier Edouard Daladier, in the ministerial declaration of his new Government to-day, affirmed his intention to safeguarding the franc and the gold standard. He was given three votes of confidence. "We have decided to maintain our monetary standard," Premier Daladier said, "but the budget must be voted before March 31. "Once the budget has been voted we must fight unemployment, revive the nation's economic activity and improve our commercial balance by realistic policy based on agreements of compensation and reciprocity." 956 Financial Chronicle Other points of the declaration were: Thorough, pitiless investigation of the Stavisky banking scandal. A foreign policy based on adherence to the League of Nations and to continued friendship with France's allies, and aimed at seeking peace and security. Loan Adjustment Plan of 1933 of Buenos Aires to Remain in Force for Remainder of Three Years— Government Unable to Resume Full Payment of Interest and Amortization at End of First Year. In a notice to holders of certain issues of external dollar bonds of the Province of Buenos Aires affected by the Loan Adjustment Plan of 1933, Carlos Indalecio Gomez, Minister of Finance, states that at the end of the first year of the three-year agreed period covered by the plan the Government finds itself unable to resume full payment of interest and amortization and the plan will accordingly remain in force for the remainder of the three years, subject to further review before the end of the second year. The issues covered by the plan are as follows: External 73 % secured sinking fund gold bonds, dated Nov. 1 1925. due Nov. 1 1947. External 7% secured sinking fund gold bonds, dated April 1 1926, due April 1 1952. 6% refunding external sinking fund gold bonds, dated March 1 1928, due March 1 1961. 63% External Sinking fund gold bonds of 1930, dated Feb. 1 1930, due Aug. 1 1961. Holders of approximately 92% of these bonds have assented to the plan. The notice states: As agreed to in the plan the Government has done all in its power to reduce its expenditures and has affected numerous economies. Unfortunately, the yield of the taxes imposed by the Government, in spite of rigid enforcement of prompt payment, has fallen steadily during the period under review as a result of the continued depression to which the Province is subject. Although the Government's program will enable the budget of 1934 to be balanced, the Government could not maintain this balance if It were to resume the full interest and amortization of its external debt at the present juncture. Debt Service Pact Signed by Brazil—Four-Year Agreement with United States—Expected to Permit Normal Terms to be Resumed—Interest Ranges from 73/2 to 100% of Sums Due for First Year, Increasing Thereafter. The signing on Feb. 6 by President Getulio Vargas of Brazil of the debt-service agreement negotiated by Valentin F. Boucas with J. Reuben Clark, representing American holders of Brazilian bonds, was reported in a cablegram on that date from Rio de Janeiro to the New York "Times" in which it was further stated: The agreement, according to an official statement by Finance Minister Osvaldo Aranha to the press, reduces Brazil's payments over the next four years by £57.000,000. The Finance Minister criticized the preceding administration for negotiating new loans to meet old ones instead of paying out of its resources. He expressed the view that the present agreement would permit.a financial rehabilitation which would enable Brazil to resume normal debt service on Its expiration. Obligations covered by the new agreement are arranged in eight groups. The first group includes Federal funded loans, on which full interest and amortization charges will be met. On the second group, the coffee revalorization loans, full interest will be paid but only 5% on amortization. In the third group of six Federal loans, including those to be funded after this year, interest payments will be graduated from 35 to 50% of the sums due. The fourth group brackets several Federal loans with one of the Corapantile Navagacao Lloyd Brasiliero. Interest payments will range from 7% to 40%. The Sao Paulo Coffee Institute loans in group five will draw from 223 to 373 of the interest due. Group six. in which American holdings are the largest, totaling more than $80,000.000, embraces loans of the States of Sao Paulo, Minas Geraes and Rio Grande do Sul and one municipal loan. Twenty per cent of the interest will be paid this year, 223 % next year and 35% for each of the two succeeding years. Twenty-seven municipal loans fall within group seven. On these the Interest payments will be 17%,22% and 32% %. For the eighth group, which covers 28 loans of the Northern States, no terms of interest payment are set forth. Raymond B. Stevens of Foreign Bondholders Protective Council Views with Staisfaetion Brazilian DebtService Agreement. In a statement issued Feb. 7, Raymond B. Stevens, President of the Foreign Bondholders Protective Council, indicated his gratification with the signing of the Brazilian debt service pact at Rio de Janeiro on Feb. 5, to which we refer in another item. As given in part in the New York "Times," Mr. Stevens said: "The principal amount of the foreign currency obligations of the Brazilian Government, States and municipalities is substantially in excess of the equivalent of $1.000,000,000. The principal amount of the issues placed in this market is over $380,000,000, of which about $180,000,000 have been In total default for about two years. The plan classifies the various loans into eight grades and allocates varying percentage; of exchange to each of them except Grade 8, which represents almost entirely loans in default for many years. "Compared with the plan proposed last November, the allocation of exchange to Grade 7 containing bonds of the provinces and municipalities, over half of which were issued in the American market, has been almost Feb. 10 1934 doubled. The plan Is a temporary arrangement covering four years, after which it is to be reviewed in the hope that further steps toward the resumption of service can then be taken. "Obviously, under existing exchange conditions it was a difficult task for the Government to allocate the amounts available in a way satisfactory to all the bondholders affected, since there are about 100 separate Brazilian Issues, with varying security pledged for their payment and expressed in four different currencies—dollars, sterling, francs and guilders. The Finance Minister gave most courteous consideration to the representations of the council, and it must be a cause for satisfaction to the holders of all such bonds that service is about to be resumed to the extent which the Brazilian Government considers possible." Bill Creating Reserve Bank for India Passed by Legislative Assembly—To Be Organized on Lines of Other Central Banks. With reference to the new Indian Reserve Bank,—the bill to establish which was passed by the Indian Legislative Assembly on Dec. 22,—the London "Financial News" of Jan. 3 said: In order to provide for the successful working of the new constitution, a Reserve hank of India, to control currency and exchange, is being created, and the necessary bill was passed recently by the Legislature. The Bill follows along the lines of the Reserve Bank Bill of 1928, save that owing to the changed circumstances the obligation to maintain the external value of the rupee will be discharged by the purchase and sale of sterling and not by that of gold or gold exchange. An attempt to wreck the Bill on the question of a lower ratio for the rupee was defeated when it was realized that devaluation at the present time would not benefit the agriculturists. Gold stocks held in the gold standard reserve and the paper currency reserve will be taken over in toto by the bank as cover for the note issue, and the question of the profits arising from any revaluation of the gold holding to be transferred by the Government to the bank is left open for future discussion. Banking opinion generally regards the present time as inoprortune for the creation of a new reserve bank, if only for the reason that India's normal export surplus of Rs. 80 crores in merchandise is as yet far from being realized, but interest is largely centered in the question of the appointment of its first Governor. It is considered essential that, in view of the close co-operation that will be necessary between India and London In the first years of the bank's existence, the person chosen should command the confidence of the money markets in both India and London. In reporting the passage on Dec. 22 of the legislation providing for the creation of the Bank, the same paper ia its Dec. 23 issue stated: The measure is regarded as a most important financial safeguard in connection with the future management of Indian credit and currency under the proposed new constitution. The Bank is to be organized on similar lines to those of other central banks throughout the Empire, and is to be free from political Influence. It will have a capital of 500 lakhs of rupees. India and Burma are to be divided into five areas, with headquarters at Bombay. Calcutta, Delhi, Madras and Rangoon, and the capital will be _-offered for subscription In these areas. 50% Note Cover. The Governor will be appointed by the Governor-General in Council, and a cover of 50% for note issues is to be maintained. The right to hold shares in the new bank is to be restricted to British subjects ordinarily resident in India. The . nk is to be exempted from income-tax both in India and England, but dividends will be taxed. The conditions for the establishment of a Reserve bank were set out in August in a White Paper, embodying the report of the Committee which had been sitting in London. The Bill, which closely followed the recommendations of the Committee. was referred to a special joint committee of both Houses of the Legislative Assembly, which had to report to a special session of the Assembly by Nov. 20. Sir George Schuster, Finance Member, was elected Chairman, LONDON BRANCII, One hundred and fifty amendments were tabled. The unofficial elected parties scored a success when a motion making the establishment of a branch of the Bank in London obligatory instead of optional was carried by 46 votes to 45. Unofficial speakers expressed the fear that otherwise the agency work of the Bank would be given to the Bank of England. An amendment favoring State capital instead of shareholders was defeated by 76 votes to 33, and the motion sponsored by the leader of the Centre Party, providing that 75% of the shares should be held by Indian Nationals, was rejected by 52 votes to 30. After weeks of debate, the final passage of the Bill was ensured by the defeat of the rupee ratio amendment. The last test came on Thursday [Dec. 21], when the Bill passed the Second Reading, with the addition of new clause imposing an obligation upon the Bank to create a special agricultural credit department. Gold Reserve Value, There should be no difficulty in providing cover for the Reserve Bank's currency liabilities. Total liabilities involved in the note issue, Sir George Schuster said recently, amounted to £134,800,000 at the present rate of exchange. Thus on the basis of a 50% cover, £62,400,000 was required, of which 162,087,500 bad already been accumulated. In view of the fact that the gold reserve was valued at parity despite current prices, there existed a hidden reserve amounting to £6,500,000 at the present rate of exchange. After reckoning the additional balance possessed by the Treasury, as well as the liability for the maturing loan, a further transfer of six millions sterling alone was required to fill the gap to provide a 50% cover for the Reserve Bank's currency liabilities. Condition to Be Fulfilled. The Bank will not start functioning in the near future, The conclusion of the Round Table Conference was that it should not be put into operation until (1) the Indian budget was balanced; (2) the short-term debt had been reduced to a convenient size; and (3) the export surplus had recovered to Its normal dimensions. The first two condition); have been satisfied, but the visible export surplus, excluding "Treasure„"is far from the normal. Assembly Extended. Sir R. K, Shanmukam Chetty, President of the Legislative Assembly, yesterday read to the Assembly the Viceroy's message extending the life of the Assembly till Dec. 311934. Volume 138 Financial Chronicle Earlier reference to the bill appeared in our issue ot Dec. 16, page 4276. Germany Launches Drive to Become Agriculturally Self-Supporting—Plans to Develop Canning Industry to Preserve Surplus Foodstuffs. A new drive to make the German nation agriculturally self-supporting was launched at Grune Woche (Green Week) Agricultural Fair, starting in Berlin on Saturday, Jan. 27. Advices in the matter state: The purpose of the show, which is the largest yet held in Germany, is to Indicate how Germany could become independent of foreign food supplied by the resettlement of peasants on the land and the development of her canning industries, according to word received by canning interests in London and cabled to this country. An entire section of the exhibition, carrying the slogan "Germany, the Land of Preserved Foods," will be devoted to canning and preserving. Methods of manufacture, as well as the finished product, will be on view and demonstrations will be given. Other home agricultural industries to be given prominence at the show are tobacco, flax, poultry, silk worn culture and apiculture, as well as dairying, growing corn and potatoes. Special emphasis is being laid on the importance to health and economy of a meat diet and demonstrations will be given indicating methods of preparing and preserving meat and meat products. Marketing of Dairy Products in Germany Put Under ssidatGovernment Control. The marketing of dairy products in Germany has been placed under strict Government control, according to a report from Consul L. L. Schnare, Hamburg, made public by the Commerce Department on Jan. 27. The Department says: The decree authorizkg this change, the report states, was intended to be effective on Jan. 1, but owing to administrative problems the effective date has been postponed. The most important dairy product affected by the new policy is, of course, butter, although the decree is intended to include cheese, canned milk, casein, and other milk products. Both foreign and domestic dairy products will, after the decree becomes effective, be sold only through the newly-organized Government Bureau of Dairy Products, Oils and Fats, which will have the power to fix prices. Importation of dairy products must have the approval of the Government Bureau. The most important effect which the new decree is expected to have on the German market for dairy products, the report states, is to relieve it entirely from the influence of international market fluctuations, particularly with respect to butter. In recent years Germany has consumed about 500,000 metric tons of butter per annum, of which imports in 1933 represented about 10%. While butter imports are now significant in relation to domestic production, the low price at which it has been possible to sell Imported butter in Germany has hampered the Government in its effort to maintain domestic prices at the desired levels. These difficulties will be eliminated under the Government control policy, it is believed. Referring to the effect of the Government policy on American products, the report states that it appears that at the present time no important American commodity is affected. However, it is pointed out that it is possible that similar measures may be taken with respect to other products in which American exporters are deeply interested, particularly lard, which in Germany competes directly with butter. "Scrip" Registration Statement Made Effective by Federal Trade Commission—Covers Part Payment of Interest Due on Certain German Dollar Bonds. The Federal Trade Commission announced on Feb. 7 the effectiveness of the registration statement filled by Konversianskasse fur deutsche Auslandsschulden of Berlin, Germany, which covers "scrip" to be issued in the sum of approximately $13,000,000 in part payment of interest due in America on certain German dollar bonds. In making this known the Commission on Feb. 7 said: Statements have been made in the press, and in correspondence with bondholders, from which the conclusion might be drawn that the Federal Trade Commission has approved the scrip which it is proposed, together with a cash payment, to issue in this amount in satisfaction of the interest payments due on a part of the indebtedness of German obligors in this country. Statements also have been made which intimated that the Commission was preventing in an arbitrary manner the payment which the German obligors have proposed to make Because of these statements, all of which are incorrect. the Commission feels obliged to make a statement concerning the matter so that the public may be informed. The proposed cash payment could have been made at any time without regard to registration or the distribution of the scrip. The matter of part payment by means of scrip was first brought to the attention of representatives of the Commission in July of last year. It was then stated by those representing the registrant that it would be impossible to comply with the requirements of the registration statement as to audits by independent certified or public accountants since no such accountants were to be found in Germany. A request was made that such a requirement be waived in cases of this kind. A general rule was adopted waiving such certification in cases of this kind. No filing of any nature was made at that time. In October, counsel for the registrant again conferred with representatives of the Commission. On Dec. 15 a purported registration statement covering this scrip was filed by counsel for the registrant. The statement was admittedly inadequate, and the representative of the registrant stated that it was desired to file additional information before this statement became effective. Since that time several amendments to the statement have been filed, the last on Jan. 24 and 31 of this year. Although a clearer picture is given of the actual transaction than was contained in the papers originally filed, the statement is still deficient in essential information. The registrant, or the fiscal agents representing the German obligors in this country, has not seen fit to give this pertinent Information. Rather than prevent the American bondholder from having 957 the opportunity to accept the proposal if he so desires, the statement has been allowed to become effective. So far as the Commission has knowledge, no one on behalf of the American bondholder has made a study of the transactions involved or is in a position to recommend to the bondholder their acceptance, nor has there been any authoritative announcement as to what effect the acceptance of the proposal may have upon substantial rights of the bondholder. The American fiscal agents for the German obligors, who are largely Identical with the houses which originally sold the bonds to the American public, and counsel for the registrant, who also acted as counsel for the bankers for many of the original issues, have been the sole parties purporting to represent the American bondholder in regard to the present transaction. None of these is apparently willing to make a defintie recommendation that the present offer be accepted. According to the registration statement, Germany reduced in principal amount her short-term indebtedness from the middle of 1930 to February 1933, by some 7,000,000,000 marks. These short-term obligations, comparatively closely held, are exempted from this scrip arrangement. No information is given as to the foreign exchange and gold stocks of Germany; as to the foreign investments of Germany; as to the investments of Germany in America; and, particularly, as to the actual amounts of the respective issues outstanding after deduction of the amounts held in the . treasuries of the respective obligors, though this particular information should be easily available and is very pertinent. The becoming effective of the statement has no bearing on and is in no sense connected with any discussion with the German authorities in regard to these bonds. The Commission desires to state that it has in no sense held up the effectiveness of this statement, and that the becoming effective of the statement is in no sense an approval by the Commission of the scrip to be issued or of the transaction. The Commission is without authority to Pass upon the merits of such a security or transcation. Stewart C. Pratt, Chairman of Committee Acting for Paying Agents of German Dollar Bonds Expects Distribution of Scrip to Be Made in 10 Days. Following the announcement on Feb. 7 by the Federal Trade Commission that the Registration Statement filed with it by the Konversionskasse, the Conversion Office established in Berlin for the handling of German foreign debts, has become effective, Stewart C. Pratt, as Chairman of a committee acting for the fiscal and paying agents of practically all of the German dollar obligations involved, announced that it would probably be about 10 days before the distribution of the cash and scrip offered in satisfaction of interest payments maturing on these obligations between July 1 and Dec. 31 1933, could be begun. It was pointed out that this delay was unavoidable, as the prospectus and other documents could not be printed or distributed nor various other arrangements made incident to payment procedure until the Registration Statement became effective. It is added: More than 100 separate issues of corporate, municipal and other obligors The aggregate face amount of these issues is in excess of $800,000.000. Coupon holders who desire to accept payment of interest due on these dollar obligations, in accordance with the terms of the German offer of 50% in cash and 50% in scrip, must first receive a copy of the prospectus required by the Securities Act, which outlines in full the German plan, and forward their coupons to the paying agents. Coupons will not be paid unless accompanied by a Letter of Transmittal. It is anticipated, according to Mr. Pratt, that approximately a million copies of the prospectus and letter of transmittal will be distributed to banks and investment dealers in this country and Europe, through which sources they will be made available to individual bondholders. are affected. John Foster Dulles and Laird Bell Return from Berlin Conference on Germany's Long-Term Debts. In a joint statement, John Foster Dulles and Laird Bell, who returned on Feb. 8 on the S. S. Bremen from the longterm debt conference in Berlin, expressed themselves as well satisfied that material progress had been made. This is noted in the "Wall Street Journal" of Feb. 9, from which we also quote: "Results were far better thee we had anticipated," they declared. Mr. Dulles represented American issuing houses and Mr. Bell the Foreign Bondholders Protective Council. "Aside from getting Germany to increase the amount of payments to American bondholders, the greatest accomplishment from the American standpoint was Germany's agreement to the principle of uniform treatment of all creditors as a basis for the meeting called in Berlin in April, at which time Germany proposes to ask a general reduction in interest rates. "We were impressed by the very effective support given us by our Government. Furthermore, while the British might have demanded preference, they maintained a solid front with us throughout the entire negotiations." The delegates said that the German officials who were confronted with real difficulties showed the best of good will in meeting the American and British viewpoint. This included Dr. Schacht and the other German officials who were connected with, or participated in, the meeting. The presence of a representative of a semi-public body materially contributed to the results, they said, pointing out that it was the first time the Foreign Bondholders Protective Council had actively participated in an international debt conference. In addition to the pressure for better treatment of bondholders from creditor governments, with Great Britain leading in threats of reprisal, the more or less antagonistic sentiment aroused in this country over the debt question probably had an influence on Germany's decision, they said. Confronted with the Anglo-British bloc on one side and the European bloc on the other, Germany apparently placed a high value on American sentiment and decided to placate it rather than give further preference to European creditors, they said. The conference was referred to in our issue of Feb. 3, page 775. 958 Financial Chronicle Germany Rejects Austrian Complaints of Nazi Interference in Internal Affairs—Says Difficulties Are Solely of Domestic Political Origin—Warns Austria Not to Take Cause to League of Nations. Complaints by the Austrian Government that Germany was spreading Nazi propaganda in Austria and was interfering in the internal affairs of another Nation were denied in a note, of which the summary was made public by the Reich on Feb. 2. This note was in reply to a protest which had been made by the Austrian Foreign Office through Stefan Tauschnitz, the Austrian Minister in Berlin, on Jan. 16. The German reply asserted that the Austrian Government had no right to assume that the German Government should observe an attitude of toleration toward a regime that openly outlaws and seeks to suppress all that "animates the German people with fresh courage and confidence." Denying that it had interfered in Austrian affairs, the memorandum said that the German Government could "only express astonishment at the fact that on repeated occasions the Austrian Government has cast suspicion on the German Government as if it threatened Austrian independence." The note added that in the view of the German Government, Austrian difficulties result solely from a domestic political conflict within the country, and it warned the Austrian Government that if it contemplated submitting its complaints to the League of Nations it must assume entire responsibility for such action. The complete text of the original Austrian complaint, and of the German memorandum covering the reply, are given below, as contained in dispatches to the New York "Times" from Vienna and Berlin, Feb. 2: The Austrian Government has been informed that the Austrian Nazis, encouraged by their German comrades, are planning for the next few days an extremely active terroristic campaign against the Austrian Government. There is no doubt that the Austrian Nazis are supported by German Nazi circles as the Austrian police have repeatedly seized tremendous amounts of explosives and propaganda material undoubtedly of German origin. Besides this fact, the meetings between German diplomatic functionaries and other prominent representatives of the German Nazi party with Austrian Nazi leaders leave no doubt regarding the close co-operation between certain German Nazi circles and the leaders of the Austrian Nazi party. The Austrian Legion is still along the Austro-German border—at Freilassing in Bavaria, a few miles from Salzburg—despite the promises given by the German Government to dissolve this camp and send the Austrian Nazi refugees to inner Germany. German official assurances that the members of this legion are harmless emigres are denied by trustworthy information that these legionaries are armed and militarily trained. The Austrian Government has hitherto always attempted to solve conflicts between the two German States by direct negotiations between Berlin and Vienna. This attitude of the Austrian Government has not at all been appreaciated by the German Nazis. Under these circumstances the Austrian Government is forced to change Its attitude and has decided to submit the matter to the League of Nations if the terroristic campaign carried on by the Austrian Nazis and supported by German explosives and propaganda material is not stopped immediately and if the German Government will not give sufficient assurances that it will support this demand of the Austrian Government. You will communicate this immediately to Baron von Neurath (the German Foreign Minister) and show him all the supporting material you have in hand. You will ask the German Government to answer as soon as possible. Should the German Government use the argument that it cannot act against the German Nazi party, you will recall the fact that the German Foreign Office some time ago successfully intervened in the matter of the Nazi air raids against Austria. You will explain that the Austrian Government is convinced the German Government could also stop the present campaign if it really wanted to do so. You will inform Baron von Neurath that we are notifying the great powers of this demarche. The German Governments' published summary of the text of its note to Austria replying to charges of Nazi plotting in that country was contained as follows in a Berlin account Feb. 2 to the "Times": The Austrian Government, in a communique on the Cabinet meeting of Feb. 2, states that the answering note of the German Government in no way meets the complaints raised by the Austrian Government and confines Itself simply to denying the several points of complaint. For that reason, It says, the Austrian Cabinet unanimously declared the German response unsatisfactory. In view of the stand thus taken by the Austrian Government, the German Government deems it appropriate to make known the German reply herewith. The note delivered on Jan. 17 by the Austrian Minister contains a onesided account of certain events in Austria and connects therewith the reproach that they are chargeable to inadmissible interferences from the German side in the domestic affairs of Austria. The note speaks of a conflict between the two German States and represents the whole complex of Issues in such a way as to put it from the first under a false point of view. Before discussing the several events, the German Government deems it necessary to correct that erroneous viewpoint. Interference Denied. The Austrian Government cannot expect to have the German Government observe an attitude of indifference toward a governmental system that outlaws and suppresses everything that animates the German people with fresh courage and confidence. It is inevitable that the grave domestic political conflict within Austrilt should have sympathetic repercussions on the relations of the Reich with Austria. Nevertheless, the German Govern- Feb. 10 1934 ment has most meticulously abstained from mixing in domestic political conditions In Austria. The German Government has repeatedly declared that any forcible intervention or any violation of treaty obligations was far from its thought. It can, therefore, only express great astonishment at the fact that on repeated occasions the Austrian Government has cast suspicion on the German Government as if it threatened Austrian independence. In view of this fundamental orientation of the German Government, it goes without saying—in direct contrast with the Austrian representations— that the German Government could have nothing but welcome for an understanding between the Aultrian Government and the National Socialist party in Austria if such could at last be reached. Nor has anything ever been done by the National Socialist quarters in Germany to impede reaching such an understanding. Austrian Nazis Upheld. Further, the National Socialist party of Austria itself has never, as far as is known here, declined its collaboration in solving the domestic political problems of Austria. The Austrian Government knows very well that a meeting arranged through the mediation of the German Government between the Austrian Chancellor Dollfuss and Herr Habicht (former German Nazi "InspectorGeneral" for Austria, who was expelled from the country)—on the basis of the demarche of the Austrian Minister to Berlin on Jan. 1—was called off at the last moment without any valid reason by the Austrian Government but not by the National Socialists. That the German Government has been constantly mindful of avoiding any exacerbation of the situation the Austrian Government can discern. for instance, from the restraint with which Germany treated the Schumacher affair. Although that involved the shooting of a Reiclunvehr soldier In German territory by regular Austrian frontier guards and although the combined investigations settled exclusive responsibility on the Austrians, the German Government did its utmost to facilitate the quickest possible settlement of that grave incident. Nevertheless, the Austrian Government has thus far failed to bring about the legal punishment, assurance of which had been given. The German Government must insist now on at last receiving the then promised information that the miscreants have been punished. Complaints Answered. Following these considerations the German Government would take up In more particular detail the complaints raised by the Austrian Government. The German Government has repeatedly designated as untrue the allegations made by the Austrian Government that the so-called Austrian legion was planning a forcible invasion of Austrian territory. In particular It refers to its note of Sept. 21 last, in which these charges were disproved in The Austrian Government is well aware that the camp at Lechfeld has been completely dissolved and its Austrian refugee inmates have been transferred to points considerably distant from the Austrian frontier. Concentrations along the Austrian boundary are therefore wholly out of the question. The unanimous declarations to the foreign office by alleged Austrian nationals who claimed to have belonged to the legion plainly carry the stamp of incredibility and have been proved wholly untrustworthy by Investigations completed by the German Government. With reference to the charge made by Austria that propaganda material and explosives have been shipped out of Germany into Austria, the German note says that in view of the gravity of these charges the German Government has undertaken a scrupulous investigation of them. Restrictions on Traffic. To begin with, the German Government desires to direct attention to the rigid restrictions applying to the traffic in explosives in Germany, which wholly preclude the possibility that such large quantities of such commodities could have found their way out of Germany into Austria. Attention is also directed to the rigid frontier control exercised by the German authorities. Nevertheless, it is not precluded that in view of the difficult tracing and length of the boundary line, single instances of smuggling explosives may have occurred and may have escaped detection by both the German and Austrian officials. The investigations concluded, however, furnish no basis that such illicit transport actually occurred, and it is wholly excluded that German officials or party members have either participated in such smuggling or abetted it. The note then takes up the charge of inflammatory agitation by the German press. With reference to the complaint of incentive agitation by the pros, it is admitted that solitary instances of attacks on the Austrian Government have occurred. They are, however, only the reaction to the malicious agitation by the Austrian press against the new Germany. Official Participation Seen. These attacks have been neither forbidden nor punished by the Austrian authorities. Despite the protest of the German Legation in Vienna, which cited 200 such cases, they have manifestly been allowed to continue and multiply with the toleration and even actual participation of official Austrian circles. The German reply to the charge of broadcast propaganda is as follows: The allegation of the Austrian Government that the German official radio is broadcasting inflammatory propaganda is not true. The broadcast programs are addressed to German nationals and are designed to inform them of developments in Austria. The regulations laid down in international radio agreements are strictly adhered to. On the other hand, the German Government has repeatedly established that intensified agitation against the new Germany is being carried on from the Austrian side, headed by the official press service, which does not refrain from indulging in spiteful vilification. Regarding the alleged furtherance of "the militant ring of German Austrians within the Reich," the German Government replies that this is a free association of Austrians living in Germany who desire to organize themselves on a National Socialist basis. Any kind offurtherance or support on the part of the German authorities has never taken place. On the other hand, the activity of this association has thus far given no cause for the German authorities to interfere. The Waldeck-Purmont Affair. The trip of Prince Waldeck-Pyrmont to Vienna is cited by the Austrian Government as proof of a conspiracy against the Austrian Government. Following are the facts: The counselor of the Legation, Prince Waldeck-Pyrmont, was supposed some time ago to accompany Herr Habicht, with the knowledge and consent of the Austrian Government, to a meeting with the Austrian Chancellor. After the surprising cancellation of this meeting by the Austrian Legation, Counselor Waldeck-Pyrmont went to Vienna on official business to inform himself about the situation at the Austrian Legation. On this occasion he also visited Herr Frauenfeld (the Vienna Nazi leader), whom he had known for many years, at the latter's home, and met there Count Alberti as well. Volume 138 - How this visit can be represented as a Conspiracy against the Austrian State is all the less explicable to the Reich Government because Count Alberti was the leader of the Lower Austrian Helmwehr and is a member •of a Government party. (Count Alberti, who was arrested when the meeting was raided, was subsequently ousted from his Ileimwehr post.) Summarizing, the German Government can only express its regret that the Austrian Government has found it advisable to raise serious reproaches. although it could have ascertained their incorrectness from information supplied to it by the German Government on previous occasions. The action of the Austrian Government has astonished the German Government all the more because the Austrian Government, without awaiting the results of German investigations, has simultaneously with its step in Berlin, engaged other governments in this affair. If, beyond that. the Austrian Government declares that it must seriously consider turning to the League of Nations, then it must assume the responsibility for such a step. The German Government at any rate is not of the opinion that the problem in hand, the roots of which in the last analysis lie in a purely domestic conflict in Austria, could be the subject of international treatment or could be solved in this manner. Holland Adheres to Gold Standard. From The Hague, Feb.8 the New York "Times" reported the following: In the upper house to-day Premier Colijn again rejected any form of inflation. The government, he said, intends to adhere to the gold standard and would not even consider legal devaluation of the currency. In rejecting all monetary experiments the government is convinced it has chosen the right course, officials say,though it is fully alive to the difficulties both the government and trade will have to overcome in reconciling prices to paper currencies of foreign countries. "Financial and Economic Review" of Amsterdamsche Bank, N. V., of Amsterdam, Holland. The Amsterdamsche Bank, N. V., of Amsterdam, Holland, recently issued the 38th issue of its "Financial and Economic Review." The "Review," which is issued quarterly by the statistical department of the bank, contains a detailed report on all circumstances that have been of influence on the financial and economic conditions of Holland during the fourth quarter of the year 1933. It is, moreover, usually preceded by an article written by some authority on the subject dealt with. This time an article has been' inserted written by Dr. F. E. Posthuma, ex-Minister of Agriculture, Trade and Industry; Chairman of the Dutch National Committee of the International Dairy Union; ex-Chairman of the General Dairy Association of Holland (F.N.Z.), entitled, "The Dairy Industry of Holland." Two Bond Issues of Dutch Colonial Government to Be Converted into New Guilder 4% Bonds by Guaranty Trust Co. of New York. Announcement was made on Feb. 7 by the Guaranty Trust Co. of New York, that it has received permission from the Dutch Colonial Government to accept for conversion into the new Guilder 4% Bonds, the 40-Year 6% Bonds Bonds due March due March 1 1962, and the 30-Year 5 1, 1953, without the March 1 1934 coupon being affixed to the bonds; in other words, with the Sept. 1 1934 and subsequent coupons attached. This is for the convenience of those bondholders who wish to convert by depositing their bonds with the Trust Company as Agent for the Government, on or before Feb. 14, and who have already sent abroad the March 1 coupons for purchase by the Government in Amsterdam at the stated rate of 2.45 guilders to the dollar. Mr. Lefeaux was formerly Deputy-Chief Cashier of the Bank of England. The act setting up the New Zealand Reserve Bank was passed by the New Zealand Houses of Parliament in November. Mr. Coates. the Minister of Finance, defined the objects of the act as to control the Government's monetary Policy, to strengthen and co-ordinate the existing banking systems, to provide cheaper credit for the community and to effect savings for the.State. An item regarding the enactment of legislation creating the New Zealand Reserve Bank appeared in our issue of Dec. 16, page 4276. Market Value of Listed Stocks on New York Stock Exchange Feb. 1, $37,364,990,391, Compared With $33,094,761,244 Jan. 1-Classification of Listed Stocks. As of Feb. 1 1934, there were 1,206 stock issues aggregating 1,292,789,736 shares listed on the New York Stock Exchange, with a total market value of $37,364,990,391. This compares with 1,209 stock issues, aggregating 1,293,299,931 shares, listed on the Exchange Jan. 1, with a total market value of $33,094,751,244, and with 1,211 stocks issues aggregating 1,295,027,915 shares with a total market value of $32,542,456,452 on Dec. 1. In making public the Feb. 1 figures on Feb. 6, the Exchange said: As of Feb. 1 1934, New York Stock Exchange member total net borrowings on collateral amounted to 3903.074,507. The ratio of these member total borrowings to the market value of all listed stocks, on this date, was therefore 2.42%. Member borrowings are not broken down to separate those only on listed share collateral from those on other collateral; thus these ratios usually will exceed the true relationship between borrowings on all listed shares and their market value. As of Jan. 1 1934, New York Stock Exchange member borrowings on security collateral amounted to $845,132,524. The ratio of security loans to market values of listed stocks on that date was therefore 2.55%. In the following table, listed stocks are classified by leading industrial groups, with the aggregate market value and average price for each: Feb. 11934. Market Value. Autos and accessories Financial Chemicals Building Electrical equipment manufacturing Foods Rubber and tires Farm machinery Amusements Land and realty Machinery and metals Mining (excluding iron) Petroleum Paper and publishing Retail merchandising Railways and equipments Steel, iron and coke Textiles Gas and electric (operating) Gas and electric (holding) Communications (cable, tel. & radlo)Miscellaneous utilities Aviation Business and office equipment Shipping services Ship operating and building Miscellaneous business Leather and boots Tobacco Garments U. S. companies operating abroad-Foreign companies (Incl. Cuba & Can.) All listed stocks Japan's Curb on Copper Reported Ended by Arms Demands. Canadian Press adviees from Tokio, Jan. 22, to the New York "Times," said: The SuiyokaI, or Japan Copper Producers Association, has decided to abandon the output curtailment agreement that has been in force. The manufacture of war supplies has resulted in constant withdrawals of copper from storage. At the same time it is revealed that If the plans of the Japan Nlanelnikuo Manufacturing Co. are realized, Japan will soon be self-supplying in magnesium. "My company has decided to milize a new manufacturing process, combining the South Manchuria Railway Co.'s process with that of the Japan Chemical Research Institute," stated Elryo Intel, executive director. Issuance of Share Capital of New Zealand Reserve Bank--Leslie Lefeaux Named as First Governor of Reserve Bank. Under date of Jan. 31, Canadian Press advices from Wellington, N. Z., said: The New Zealand Federal Reserve Bank to-day issued a prospectus providing for share capital of £500,000 in shares of £5 each. The lists will be closed on or before Feb. 15 and individual applications are limited to 500 shares. The Federal Reserve Bank will have the sole right from Aug. 1 next to issue notes. In the London "Financial News" of Jan. 9, it was stated that Leslie Lefeaux, Assistant to the Governor of the Bank of England, has been appointed Governor of the New Zealand Reserve Bank, according to a Reuter message from Wellington. The "Financial News" also 'said: 959 Financial Chronicle 2,826,119,613 988,459,720 3,838,756,912 337,006,285 926,819,125 2,464,047,916 309,537,784 449,203,812 157,109,911 a47,693,190 1,168,322,639 1,187,888,039 4,301,743,499 225,178,446 1,899,353,493 4,406,082,029 1,695,436.370 249,454,395 1,945,474,009 1,272,426,676 2,655,652,109 161,820,944 271,310,265 297,976,457 14,306,089 37,155,530 78,338,705 266,868,525 1,406,841,882 21,037,706 698,216,028 759,352,288 Aver. Price. 26.76 17.84 53.69 21.60 22.67 33.27 30.60 36.49 11.24 9.60 24.35 21.65 23.50 13.40 31.29 38.23 43.04 22.25 28.02 13.21 70.63 15.95 13.99 28.03 6.83 11.01 13.68 41.82 54.29 16.20 20.75 20.42 January 1 1934. Marks! Value. 2.497,815.580 823,432,138 3,615,566,312 278.426.859 796,225,838 2,243.550,784 269.185,506 400,238,291 134.321.857 38.320,586 1,021,043,599 1,135,844,899 3.940,079,727 171,638,727 1,617,241,273 3,704.770,998 1,450,707,794 210,308,873 1,677,802,845 982.840,141 2,488,543,499 150,315.179 187.088.508 256,183,258 9,097,385 27,024,903 71,342,174 227,508,087 1,317,665,704 15,799,891 627,690,796 707,129,233 Aver. Price. 23.65 14.77 50.50 17.84 19.48 30.30 26.61 32.51 9.71 7.71 21.28 20.70 21.52 10.21 26.64 32.16 36.86 18.76 24.17 10.20 66.19 14.81 9.58 24.10 4.35 8.01 13.68 33.02 50.83 12.15 18.66 18.99 37.364.990,391 28.90 33.094.751.244 25.59 United States Supreme Court Upholds Constitutionality of New York Martin Act with Regard to Subpoena Power of State Attorney-General in Demanding Accounts of Brokerage Houses. The power of the Attorney-General of the State of New York to subpoena the accounts of brokerage houses was upheld on Feb. 5 by the United States Supreme Court, which denied an appeal to Scully C. Pecot, a partner of Fenner & Beane of New York City, who was convicted under the Martin Act and fined $1,000 in 1933 for refusing to comply with a subpoena issued by Attorney-General John J. Bennett, Jr. According to the brief filed by attorneys for the brokerage firm, the subpoena asked for the accounts of Fenner & Beane, particularly in regard to the common stocks of the Brooklyn-Manhattan Transit Corp. and the Chesapeake & Ohio RR. Mr. Pecot questioned the authority of the Attorney-General. The New York "Herald Tribune" of Feb. 6 notes the Court's decision as follows: Bouvier & Beale, attorneys for Fenner St Beane ,had filed a paition asking for a writ of certiorari in order that the highest court might review Mr. Pecot's conviction. Their brief declared that the Attorney General. having befit granted the power of subpoena, "is exercising a judicial function" and "to permit the Attorney General to issue a dragnet subpoena for all of the transactions of the defendant in listed securities on the New Yprk Stock Exchange is equivalent to search and seizure of the property 960 Financial Chronicle of the defendant without due process of law, which are forbidden both in National and State constitutions." The State, which was represented by Henry Epstein, Solicitor General, defended the constitutionality on the basis of a Supreme Court decision of 1926 in the case of Dunham vs. Ottinger. Previously, Mr. Bennett and Assistant Attorneys General Ambrose V. McCall and Harry Greenwald had successfully defended the conviction through the Appellate Division and the New York Court of Appeals. Originally, the case grew out of a complaint by Effie May Meyers, a customer, over her marginal account. The customer complained to the business conduct committee of the Stock Exchange, of which Penner & Beane are members. The committee found no cause for redress. The inquiry of the Attorney General found no evidence for proceeding, so that the case was a pure test of the subpoena provision of the law. The case attracted particular attention because the use of subpoenas by the Bureau of Securities is usually the focal point in tne Attorney Gerenal's method of inquiring into stock trading. Landlords Whose Tenants Enter Bankruptcy Have No Valid Claim for Rents Under Leases, According to United States Supreme Court Decision. The United States Supreme Court, in an opinion handed down Feb. 5 and written by Justice Roberts, decided that property owners whose tenants go into bankruptcy do not have a valid claim as creditors for the difference between the amount due under a lease and the amount likely to be obtained from rerenting the property. The decision involved two cases, one of which concerned a lease by Manhattan Properties, Inc., against the Irving Trust Co. as trustee in bankruptcy, and Oliver A. Olsen Co. of New York City, where a future loss of $33,000 was claimed. The other case concerned Samuel R. Brown of Omaha, Neb., against the Irving Trust Co. as trustee in bankruptcy for the United Cigar Stores Co.,involving a claim of $140,615 for future rents. A Washington dispatch to the New York "Times" said that the Court's ruling was regarded as of great importance in view of large chain store setups which have entered bankruptcy while tenant of many buildings. The dispatch quoted from the decision as follows: "While there issome color for the claim that bankruptcy is an anticipatory breach of the lease contract, entailing a damage claim against the estate, this cannot be true as respects thest independent covenants of indemnity," Justice Roberts said, "for here the landlord does not rely upon the destruction of his contract by the bankruptcy; he initiates a new contract of Indemnity by the affirmative step of re-entry. And this new contract comes into being not by virtue of the bankruptcy proceeding, but by force of the act of re-entry, which must occur at a date subsequent to the filing of the petition. "Obviously this contract of indemnity is not breached by bankruptcy, and cannot be breached until the duty of indemnifying the landlord arises. That obligation cannot be complete until the expiration of the original term. There can be no debt provable in bankruptcy arising out of a contract which becomes effective only at the plaimant's option and after the inception of the proceedings, the fulfillment of which is contingent on what may happen from month to month or up to the end of the original term. "Such a covenant is not, as petitioners contend, the equivalent of an agreement that bankruptcy shall be a breach of the lease and the consequent damages to tha lessor be measured by the difference 13( tween the present value of the remainder of the term and the total rent to fall due in the future. The covenants appearing in the leases in question cannot be made the basis of a proof of d. bt against the estate." Senate Committee Inquiry into Stock Market Trading— Investigation into Affairs of Wayne First National Bank of Detroit, Unit of Detroit Bankers' Co.— Loans to 43 Judges of $639,631 Reported—Collapse of Bank Ascribed in Part to Alleged Refusal of RFC to Make Substantial Loan and Attitude of Ford Co.—Probe into Detroit Trust Co. Incident into tie inquiry by the Senate Banking and Currency Committee into the affairs of the Wayne Detroit Bank, of Detroit, described as the major unit of the Detroit Bankers' Co., it is stated that loans to 43 Judges totaling $639,631 were on the books of the bank on Dec. 11 1933, the date of the most recent check-up, according to a Receiver's statement supplied on Feb. 1 to the Committee. A Washington dispatch on that date to the New York "Times," from which we quote, further reported, in part: The Judges, most of whom are residents of Detroit, were listed among the so-called "policy loans," it was said. . . . Edward D. Stair, publisher of the Detroit "Free Press," who was President of the Detroit Bankers' Co. in the year preceding the crash in February 1933, and who was a director of the First National, expressed amazement when the exhibit was produced by Ferdinand Pecora, Committee counsel. "It seems almost inconceivable," Mr. Stair said. He added that he did not know that there were that many Judges in the community. "Are any Judges among your stockholders?" asked Mr. Pecora. Witness Pleads Faulty Memory. "I don't know," replied Mr. Stair, "and if there are I don't know who they are. I know one who was a stockholder. I refer to Judge Tuttle of the United States Court. I know of no other Judge who was a stockholder." Arthur J. Tuttle is the Senior Judge for the Federal District of Michigan. It was also brought out in evidence from the files of the Comptroller of the Currency that as of *June 1932 dividends declared by the First National exceeded the net earnings for the previous five years by nearly $15,000,000, while in November 1932 loans to directors totaled $9,262,465, of which $6,588,192 were direct and $2,674,273 indirect loans. The fast approaching collapse was pictured by the national examiners in graphic fashion. The reports teemed with charges of "deplorable con- Feb. 10 1934 ditions," of failure to correct past managerial errors, of the continuance in office of incompetent officials who were described as "fair weather bankers," the declaration of unwarranted dividends, loss of morale, and the making of loans to directors, officers, employees and outsiders which were beyond the pale of good banking. "Memory Slipping," Says Mr. Stair. Mr. Stair pleaded ignorance of most of the conditions brought to his attention. He was, he explained, 75 years old and his "memory was slipping." Mr. Stair was asked if he was familiar with the confidential report made in May 1932 by Joseph V. Verhelle, then Comptroller of the Bankers' Co., In which Mr. Verhelle criticized certain officers, among them Donald V. Sweeney, President, and John R. Bodde, Vice-Chairman of the Board, for their alleged connection with various loaning transactions on the books of the First National. Mr. Stair said he was present at a meeting of the Board when the report was read. A Committee was appointed to investigate the charges, he added, and Mr. Sweeney and Mr. Bodde were exonerated. The Chairman of the Committee was James 0. Burtin, and Truman H. Newberry was another member, said Mr. Stair. In a Feb. 2 dispatch from Washington to the "Times," it was stated that the collapse of the Wayne First National Bank of Detroit, commonly known as the First National, was blamed by the former Chairman of its Board of Directors on the following factors: 1. Refusal of Henry Ford to "play ball." 2. Refusal of the Reconstruction Finance Corporation to lend a substantial sum to the bank. 3. An alleged statement of the Chief National Bank Examiner in the Detroit area that the bank had undesirable assets to the amount of $200,000,000. The dispatcrh continued: These charges were made before the Senate Banking and Currency Committee by Wilson W. Mills, who was Chairman of the Board of the bank when the Michigan banking structure collapsed in February 1933. "The First National," Mr. Mills testified, "would have opened on Tuesday, Feb. 14 1933, and conducted its business, had it not been for the attitude of the Ford Motor Co., which then stated that if the Guardian (Union Guardian Trust Co.) were not permitted to open, the Ford Motor Co. would withdraw its own and its controlled deposits, amounting to about $20,000,000, from the First National the first thing Tuesday morning." Mr. Mills, who was in the witness chair all day, insisted that the bank was solvent at the time it was closed. It was weathering the storm, he declared, when, without warning, the Ford Co. assumed a defiant attitude. Dawes Bank Aid Cited.. Under cross-examination by Ferdinand Pecora, Committee counsel, Mr. Mills remembered that Henry Ford had given him at least one reason for his attitude, which was that the Government had gone to the aid of "the Dawes bank in Chicago," and there was no reason, in Mr. Ford's opinion, why it should not also come to the rescue of the Detroit institution. "In spite of all this," Mr. Mills said, "the First National would have re-opened a few days after the holiday, probably on a restricted basis, if it had received aid from the Reconstruction Finance Corporation and if the Chief National Bank Examiner (Alfred H. Leyburn) had not said on the first day of the Michigan holiday to some of the depositors of the bank that the First National had so many undesirable assets, when for the first time he listed those undesirable assets as approximating $200,000,000, even going so far as to list every mortgage, over 50,000 of them, owned by the bank, as among these assets." Mr. Mills further charged that the Chief National Bank Examiner had approved dividends, which was evidence in his mind that the bank was, In the opinion of the Examiner, solvent. Bills Payable Issue Raised. Switching to the statements of the First National in 1932, Mr. Pecora asked Mr. Mills to explain why the bank on June 29 1932 listed bills payable as amounting to $19,000,000; on June 30, the following day, having entirely eliminated them, and on July 1, the next day, having listed them as $20,650,000. "It shows," Mr. Mills replied, "that the bank borrowed about $20,000,000 on June 29, used it the next day, and the day following that borrowed again." "In other words, there was a bank call by the Comptroller of the Currency," remarked Senator Couzens. "It so happens there was a bank call at that time," Mr. Mills replied. He said it was true that the bank had anticipated a call by the Comptroller and that the bank did not desire to show any bills payable. The money, he said, was the bank's own money and no outside assistance was received, he testified. On Jan. 31, when the inquiry into the affairs of the Detroit Trust Co. was nearing completion; McPherson Browning, President of the reorganized trust company, was questioned about a $2,500,000 deposit of the Ford Motor Co. As to this, we quote as follows from the Washington account, Jan. 31, to the "Times": This deposit figured in December 1932 and January 1933 in an interesting shuttle movement involving the trust company and the Wayne First National Bank, its major unit. Ferdinand Pecora, Committee counsel, asked Mr. Browning who was Chairman of the Board of the reorganized Institution. "Harry J. Fox; he was elected Chairman, I think, in December—that is, a few weeks ago," replied Mr. Browning. "Did you know," asked Mr. Pecora, "that Harry J. Fox was on the books of the First National as owing $280,937, of which $191,144 was charged off, leaving the uncharged-off debt at $89,793?" "This is the first knowledge I had of it," replied Mr. Browning. "You were a director of the First National, and as such did you not know of these loans to officers and directors?" Mr. Pecora asked. Mr. Browning replied that as a Board member he had little knowledge of transactions involving officers and directors. Criticized try Examiners. Resuming the examination this morning of Ralph Stone, Vice-Chairman of the Board of the trust company, the Committee had produced reports of the Michigan Banking Department on the condition of the trust company as of various dates in 1931. Volume 138 Financial Chronicle recommended that The Examiners had reported the reserves too low and improved. Mr. Stone dedividends be deferred until financial conditions criticisms of the Banking clared every effort was made to meet the Department. credited to and Four certificates of deposit for a total of $2,500,000 were the subject of made payable on demand for the Ford Motor Co. certificates for payprolonged questioning. The Ford Co. presented the redeposited the money ment on Dec. 29 1932, and, according to the books, on Jan. 3, five days later. in the First At the same time a deposit of the same amount was made trust company. National, which in turn deposited a like amount in the Mr. Stone admitted that he could not explain the transaction. would "If you had not obtained $2,500,000 from the First National you have been practically stripped?" said Senator Couzens. "Yee, sir," replied William T. Thomas, Treasurer of the trust company, 'who was seated next to Mr. Stone at the time. Mortgage Operations Studied. Jan. 3 were It was also disclosed that the certificates of deposit made on Thomas could dated back to Dec. 29 1932. Neither Mr. Stone nor Mr. said Browning satisfactorily explain why this was done. Subsequently, Mr. great amounts it might have been in line with Ford policies not to show too just a suggesof cash on hand in statements of that company. This was tion on his part, he said. operations The Committee also delved at some length into the mortgage prior to the of the trust company, the mortgages held by the company participa-crash being about 25,000 in number. One item was a $25,000,000 trust accounts. tion certificate transaction, of which $5,585,000 was sold to for large numbers Mr. Thomas said there was virtually no market value added, to get of these certificates at this time. The company hopes, he liquidating of some aid from the Home Owners' Loan Corporation in the these trust obligations. the Detroit The "reciprocal deposit" transactions involving units within Detroit Trust Bankers' Co. were studied at length by the Committee, the which, along Co. having been the principal trust unit of the Bankers' Co., with its units, collapsed last February. Mr. Stone did not think these transactions were reciprocal in nature. Bank The Committee was of the opposite opinion, and so was the Michigan by Department, as shown by reports of its Examiners read into evidence Mr. Pecora. Senate Inquiry into Stock Market Trading—Control of Five Detroit Banks by Detroit Bankers' Co. Reported to Have Been Acquired on Investment of $1,200—Loan by Chase National Bank. How the Detroit Bankers' Co., a holding organization, in a little more than three years acquired control of 60% of all the banking resources of Detroit on a total investment of $1,200 was revealed to the Senate Committee on Banking and Currency, on Jan. 24, according to a Washington account on that date to the New York "Times," in which It was further stated: • The Committee heard how 12 men built up one of the greatest banking chains in the history of the Middle West, a chain which snapped in February of last year. This chain had as its principal link the First National Bank of Detroit, Detroit the other major links being the People's Wayne County Bank, the Security St Trust Co., the Bank of Michigan, and the Peninsula State Bank, all in the Detroit area. Their branches in the metropolitan district numbered more than 250, while the depositors were in excess of 900,000. At one time the resources of the company were estimated in excess of $800,000,000. The man who told the story to-day was John Ballentyne, who was a founder of the Detroit Bankers' Co. and in 1981 and 1932 the Chairman of its Board of Directors. At times he was not a well-informed witness. He could give no reason for the promise of a 17% dividend by the holding oampany more than two months before it came into legal existence. Also, he was unable to explain to the Committee why the 12 organizers vested in themselves, for a period of five years, "exclusive voting power In the election and in the removal of directors." While refusing to testify, he did suggest that this "exclusive provision" may have been adopted to perpetuate the founders of the holding company in office. $1,200 in "Trustee" Shares. The articles of association fixed the capital of the holding company at $50,000,000, divided into 2,600,000 shares of common stock, in addition to 120 shares at $10 each. These latter were the "trustee" or controlling shares far the five years following the incorporation of the holding company on Jan. 8 1930. He testified that the 12 organizers, all prominent in the Michigan banking picture, were the late Julius H. Haase, John R. Bodde, Emory W. Clark, D. Dwight Douglas, Ralph Stone, McPherson Browning, T. W. P. Livingstone, H. L. Chittenden, Fred J. Fisher, William T. Barbour, Wesson Seybom and himself. "Now these are the persons who acquired the 120 so-called trustee shares?" asked Ferdinand Pecora, Committee counsel. "Yes, sir." 4—And paying for those shares $10 apiece, or $120 per person involved?" 4—And that was the sole capital .with which the Detroit Bankers' Co. commenced business, was it?" A.—Yes, sir; I believe so. Witness Haag on Voting Power. It was then that Mr. Ballentyne was questioned as to the benefits attached to the absolute voting power vested in the founders of the holding company, and replied he did not see any reason unless it was "to perpetuate themselves in office." The witness identified a circular letter which was sent to stockholders of the five banks subsequently merged to form the Detroit Bankers' Co., In which the directors of those banks recommended to stockholders that they exchange their stock for stock of the holding corporation to be organized. It said the holding company proposed to pay 17. dividends annually. Senator Couzens took up the questioning, saying: "I would like to ask you If you think it was a well-considered policy to put $725,000,000 in resources and $90,000,000 of capital in the hands of 12 men for five years on an investment of $1,200." 961 whether I do to-day or "I thought at the time it was. I do not know not," Mr. Ballentyne replied. reasoning, calculation or When Mr. Pecora asked "by what process of three months before otherwise" the founders of the Detroit Bankers' Co., dividend rate at 17%, the company came into legal existence, fixed the payable quarterly, the witness replied: "I would like to answer, but I cannot." of the 12 Q.—Again, what were the factors that induced you, as one founders, to agree in advance on a 17% dividend rate? Who knew A.—At that time we were in a very desperate depression. headquarters. how long it would last? Certainly we got no counsel from "What headquarters?" interrupted Senator Couzens. know "Washington. Prosperity was just around the corner. We did not how long it would last," was the reply. and Senator Couzens and Mr. Pecora remarked that the bank collapse of the stock market crash had not taken place on Oct. 5 1929, the date circular. Depression "Around Corner." It; "On Oct. 5 depression was just around 'the corner, but nobody knew is that it?" asked Mr. Pecora. "Yes; I guess that is true," was the answer. the At the afternoon session most of the time was used up tracing $7,000,000 debt the Detroit Bankers' Co. inherited when it absorbed the First National Co., an investment affiliate of the First National Bank. On Dec. 31 1930 the records showed that the debt had been transferred, $3,000,000 to the Detroit Trust Co. and $4,000,000 to the Chase National Bank in New York. The Chase loan was paid off in the next year. In the New York "Herald Tribune" of ,Jan. 25 it was stated: Loan Repaid Two Years Ago. At the office of the Chase National Bank last night it was said that the $4,000,000 loan to the Detroit Bankers' Co., referred to in testimony before the Senate investigators, was repaid in full nearly two years ago, according to the Associated Press. Detroit Trust's Status Altered—Now Independent, Harry J. Fox Points Out. The following is from the Detroit "Free Press" of Feb. 1: Independence of the Detroit Trust Co. of any bank, investment or holding company was emphasized anew by Harry J. Fox, Chairman of the Board, in a statement Wednesday. Mr. Fox also declared that the operations of the company during the past two months, since its reorganization was effected on Dec. 1, "have been very satisfactory, showing a substantial gain in business and fine operating profits. Prospects for the future are very bright." • Mr. Fox was placed at the head of the new Detroit Trust following the recent reorganization. He had previously been conservator. He declined to comment on the testimony Tuesday of Ralph Stone, Chairman of the former Detroit Co. and now Vice-Chairman of the reorganized institution, before the Senate Banking Committee. Mr. Fox's statement follows: "The Detroit Trust Co. is an independent trust company. It sells no securities, has no banking business, accepts no deposits. It operates strictly as a trust company, unassociated with any banks, investment companies or holding companies. We are entirely independent of anybody. "We have no bond department. "The Detroit Trust Co. concentrates all of its activities on the management of properties under trust or fiduciary agreements, on the business administration and settlement of estates under appointment as executor, administrator, guardian and trustee under wills. "If we go into the market, we buy where we can get the cheapest. We have no affiliation with anybody, just as the company was in the days before banking mergers in Detroit." George$V. McLaughlin Regards United States as One, Third of Way Out of Depression—Before:New York State Bankers Association Says Chief Cause of F Anxiety IsPleavy Deficit of Federal Government Public Debt— L / and Prospect of Enlargement ofHas Not Helped Finds Recovery in OthergLines Earnings of Banks. Addressing as President, the New York State Bankers' Association, at its mid-winter meeting in New York City on Feb. 5, George V. McLaughlin,'President of the Brooklyn Trust Company, made the statement that, "the only real threat to our National solvency lies in the possibility that President Roosevelt will be prevented [by Congressional opposition] from applying the brakes to Government spending when the proper time comes." Mr. McLaughlin regards as "the chief cause of anxiety now—the heavy deficit of the Federal Government and the prospect of enlargement of the public debt to about 32 billion dollars by the middle of 1935." He observed in his address that, "thus far the recovery which is so apparent in other lines, has not helped the earnings of banks," which he says were "poorer in 1933 than in 1932." This he ascribes to two principal causes— "a scarcity of good credit risks and the handling of much unprofitable business by the banks." He added that "an Improved demand for legitimate credit will naturally follow a few months behind in an improvement in general business and prices. Some evidence of this may already be seen in the increased volume of commercial paper and acceptances outstanding." The following is Mr. McLaughlin's address in full: The Association is holding its mid-winter meeting a little later than usual this year, in order that we might view with a somewhat better perspective the important financial history which has been in the making during the past few weeks. Not for several 'years, perhaps, will we be able to look back on the present time and render a true appraisal of the 962 Financial Chronicle Feb. 10 1934 significance of recent developments in the light of their ultimate conBankers' Association, at the Hotel Roosevelt in New York sequences. But the fog is lifting, and our vision seems to be improving. City on Feb. 5 declared that "the common cry almost everySome see red lights ahead, but who can say that they will not be "green" where is that the banks are not lending. Your representaby the time we reach them? In the seven months since our last meeting at Lake George, there has tives in congress continually get it," he said, "and there isbeen a noticeable improvement in our state of mind—in our psychology, a persistent demand upon them to authorize the R. F. C. to as some say. The business curve was shooting upward last June, but make direct loans. Unless deserving borrowers can get most of us said, "this is temporary; it can't last." We were worried, them about impending disasters which later proved to be wholly imagicredit at the banks," he added, "you need not be surprised nary. Now we have seen the business curve dip down from July to Noif Congress yields to this pressure." Earlier in his remarks vember only to rise anew in December and January, and our blind fears Chairman Jones said, "as I see it, if the banker fails to of a bottomless abyss ahead are beginning to dissolve. The action of President Roosevelt last week in fixing a definite gold grasp his opportunity, and to meet his responsibility, there value for the dollar and restoring the country to a modified gold standard can be but one alternative—Government lending. The has been a powerful stimulant to reviving confidence. It has gone far question therefore follows," he went on to say, "will our toward removing the fear of wild inflation on the one hand, and of financial panic on the other. banking be continued in private hands, or of necessity be If, as some claim, the revaluation of the dollar is inflation, then it supplanted by the Government? The answer is with you— is the least harmful form of inflation that we could have. As against the banker." Mr. Jones in his address stated that "much the warnings of the prophets who said that dollar devaluation would adversely affect bond prices, we need only look at any recognized index to has been accomplished in rehabilitating our banking syssee that average values have reached the highest level since 1931. tem." "To date," he said, "the R. F. C. has acquired preTo sum up the general situation, it would seem to be a fair estimate to ferred stock and capital notes in approximately 6,000 banks, say that we are one-third of the way out of the great depression, provided that we accept the averages of 1926 as a normal. Though we may not representing an investment of a billion dollars. It is our realize it, average market values of industrial common stocks, when adpurpose," said Mr. Jones, "to continue the preferred stock justed for split-ups and stock dividends, are almost back to the 1926 program until every bank in the United States has had an level, and are higher than at any time before the so-called "Coolidge opportunity to increase its capital." Referring to deposit Market" began in 1924. Bond prices, which are a matter of great importance to the banking community, have recovered more than half of insurance he asserted that for people of small and moderate their loos between 1930 and last March. means it is highly desirable, "and as applied to this class The physical volume of industrial production has recovered one-third of of depositors, should never be repealed." The banquet at its loss between 1926 and 1932. Average wholesale commodity prices have recovered 31% of the decline between 1926 and last March. Factory emwhich Mr. Jones spoke was held incident to the mid-winter ployment likewise has recovered one-third of the shrinkage between 1926 meeting of the New York State Bankers' Association. In and last March. It is estimated that at least 3 million of the 13 million full Mr. Jones' address follows: persons who were unemployed a year ago have gone back to work. Electric power consumption has resumed its old rate of expansion of 10% I feel very much honored in being afforded an opportunity to address per annum, and railroad traffic has made up about one-fifth of this important body and wish to express due appreciation to your Presiits loss between 1926 and 1932. dent, Mr. George McLaughlin, for extending me the invitation. Foreign trade, in terms of dollar value, has recovered to about I am fully aware that many of you—most of you in fact—know a great the average 1931 level. Repeal of the Eighteenth Amendment has deal more about banking than I do, but because of the rather intimate helped•business and improved the Government's revenue. Real estate and relationship that I have had with banks throughout the country during building construction have shown the least recovery, but even in that the past two years, I probably know more about banks than most of field there are signs of improvement. you, and these remarks are intended for all banks and bankers. Also I The chief cause of anxiety now seems to be the heavy speak as a banker as well as Chairman of the R. F. C. deficit of the Federal Government and the prospect of enlargement of the public debt The economic breakdown made it necessary that we all take more than to about 32 billion dollars by the middle of 1935. It is not so much the ordinary interest in our banks. The strain has been severe and many banks size of the *prospective debt, but rather the possible difficulty of conwere forced to suspend, and while in some instances suspensions were due trolling it that is the real source of danger. We need only to remember to poor management, generally speaking it was the result of conditions. that if the World War had lasted a year longer than it actually did we Happily all of this is now behind us, but as in the case of any other would have had a debt of at least 32 billion dollars in 1920, and possibly great catastrophe, there is much re-adjusting, rebuilding and reconstructmore, without the offsetting assets which the Government surely will own ing to be done before society can settle down to a normal state—and the in 1935. banker must take the lead. The only real threat to our National solvency lies in the possibility tfiat President Roosevelt will be prevented from applying In the very nature of our economic system, the banker is the leader in the brakes to Government spending when the proper time comes. practically all phases of business for the reason that he holds the credit° Personally. I have no doubt that the President will have the courage to purse strings. The activity of business and industry depends in large call a halt, but he may face strong Congressional opposition at that time. degree upon the measure of actually available current credit. Current bank It is true that thus far the recovery which is so apparent lines and bank credit are necessary to all business. A few of the more in other lines has not helped the earnings of banks, which important industries may be able to finance themselves without borrowwere, on the whole, poorer in 1933 than in 1932. We believe that this is due ing from banks, but the volume of their business will be curtailed, if the to two principal causes—a scarcity of good credit risks and the handling average person is unable to borrow on character, or on the kind of security of much unprofitable business by the banks. An improved demand that the average person possesses. Only a small percentage of people in for legitimate credit will naturally follow a few months behind an business can have Stock Exchange collateral, Government bonds, or a improvement in general business and prices. Some evidence of this may credit rating that provides the ideal batik loan. already be seen in the increased volume of commercial paper and acceptances Because the hanker has the power to extend or withhold credit, he has outstanding. The problem of the elimination of unprofitable greater responsibility in the recovery program and in maintaining that business has been a matter of much concern to the Association, and its N. recovery than any, save President Roosevelt himself. I appreciate that R. A. Committee, under the chairmanship of Mr. Payne has co-operated our bankers have been through a terrific ordeal and have felt their rethe American Bankers Association and the National whole-heartedly with sponsibility to depositors, but if we continue waiting on the side-lines Recovery Administrathm in attempting to bring about adoption of uniform for complete assured values, recovery and readily marketable, naturally schedules of service charges as authorized in the Bankers Code of Fair there can be no recovery. Competition, of which Mr. Payne will tell later in the afternoon. I ahould like especially to call your attention to the example President In order that I may not infringe upon the time of Roosevelt has set for us, and is setting every day—the example of courage, others on the program, I shall not attempt to tell you about the numerous confidence, neighborliness and action. I doubt if there is a parallel in other activities of the Association, concerning such matters as the history of the world, and by that very courage and confidence, action legislation, bank costs, agriculture, etc., but instead shall let the experts speak and determination, he is succeeding. There is no ally that he needs for themselves. quite I do, however, want to express my personal so much to achieve and maintain recovery, as the banker. In fact, as I thanks to the members present, who, according to Mr. Brown, have made see it, if grasp banker the his to fails opportunity this the biggest meetand to meet his ing from the standpoint of attendance that we responsibility, there can be but one alternative—Government lending. have had in several years. The It is gratifying, too, to note that our question therefore follows, will our banking be continued in private Association is growing, at a time hands, when very few things in the banking business or of necessity be supplanted by the Government? The are showing plus signs. answer is with The number of our members has increased you—the banker. from 849 last June to 879 at present, a net increase of 30. This, to my I would be the last man in the world to advise loose mind, can signify hut one credits or unthing—namely, that the spirit of intelligent sound banking, but am of the opinion that too little credit co-operation in banking is and too severe reviving, and I think we can all agree it terms at this time would be worse than too much credit. augurs well for our future. No one must be allowed to suffer for a lack of food or clothing or shelter: or become mendicants for the lack of credit for agriculture, business and industry, small as well as large, and including those instances Withholding of Credit by Banks May that carry a little Result ment Supplanting Banking Instituti in Govern- mite more than the average business risk. ons AccordOur standard of living has advanced to the ing to Jesse H. Jones of Reconstru point—and very properly ction Finance so—where everyone can and should enjoy some of the luxuries of life as Corporation—Congress He Says May Yield well as its necessities. None of us would have it to otherwise. Demand that RFC Make Direct Loans I am fully aware that much of our trouble came to Borrowers from too easy credits, —Preferred Stock and Capital Notes in 6,000 but there is a happy medium if we bankers have the wisdom to know it. Banks Held by RFC. Banking should be zonducted more in a spirit of public service than purely for profit; it should be more a profession than a In a speech in which he said, "there business involved with is no thought of speculation. dictating management or of coercion as to The calling of the banker should be little less bank policies or sacred than that of the bank investments," Jesse H. Jones, Chairman minister. Normally we think first of our souls of the Recon- next and our families, and of our money. It is the minister's job to help struction Finance Corporation added us save our souls and that he would "be less keep us out of the pitfalls of sin. It should be the than frank" if he did not say that "the President would be us save our money and keep us out of the pitfalls of banker's job to help speculation and ungreatly disappointed if the banks do not assume their full sound investments. In theory we all agree that the banker should share in the recovery program by performin be scrupulous in his g all the func- trusteeship of the depositor's money, and of the investor's money tions that banks are intended to perform, when and that of he is called tipon to act in this capacity. In practice he should be no course includes providing credit where credit is needetl." less scrupulous. Banks are public Mr. Jones who spoke at the banquet of the New subject very properly, to strict State York State tional supervision. agencies, or NaWe frequently hear complaints about too much bank Volume 138 Financial Chronicle supervision, but in the light of what we have just gone through, it is not easy to substantiate that charge. I appreciate that bank examiners, both National and State, frequently criticize or condemn perfectly sound items, but my observation has been that these same examiners fail to find as many items that could very properly be criticized; and that upon the average bank supervision has been too lax rather than too severe. I should like to add that when a man chooses banking as his life work, especially banking where deposits are accepted, he should turn his back on any expectation of ever accumulating a large private fortune. Those are not entirely hindsight observations, but principles to which everyone can subscribe. The epitaph "A good banker" is worthy the highest aspirations of any of us. In the experience from which we are just recovering, some of our bankers went too far in one direction and some in the other. The policy of ruthlessly forcing collections, broke many hearts and useful citizens, and in many instances unnecessarily destroyed the savings of a life time. On the other side was too easy credit, and in that case the depositor was forced to contribute.. It is an open question as to which was the worst policy. But that is history, and we must now concentrate on a single purpose --economic recovery. With deposit insurance in effect, there is no longer any occasion for extreme bank liquidity. Deposit insurance for people of small and moderate means is highly desirable, and as applied to this class of depositors, should never be repealed. It makes bank runs improbable, if not actually impossible, and is worth whatever it costs. The R. F. C. made it possible for a great many banks to have their deposits insured and I am glad to say that we had the co-operation of the great New York City banks in our preferred stock program; a little tardy, a little hesitant, but when it was made clear to them that they could render a public service and incidentally one that in all probability would redound to their own good, they became patriotic and joined the program, many not actually needing the capital. I regret to say, however, that there are some bankers of the critical type especially in the cities, who place their own selfish interests and profit above the public good and refuse to participate. Some of these top bankers (meaning the big city banker) are too superior. They arrive at their exalted positions usually by reason of long service sometimes by ability. After they arrive, they too often lose the coinmon touch and are disposed to frown upon the things that helped them along. If I were called upon to make a suggestion to this type of banker I should say that he should daily strive for the greatest of all human traits—humility. We should make up our minds that there is to be no millenium in banking. Government's Attitude Toward Banking. It has been suggested that I say something about the Government's attitude toward banking. Insofar as the R. F. C. is concerned, and President Roosevelt, the Government has, and has had, only two objects in view in its preferred stock program. One to strengthen banks in the interests of depositors, and the other to place banks in such a strong capital position as to enable them to assist in the recovery program by providing legitimate credit for agriculture, business and industry. There is no thought of dictating management or of coercion as to bank policies or bank investments. I would be less than frank, however, if I did not say that the President would be greatly disappointed if the banks do not assume their full share in the recovery program by performing all of the functions that banks are intended to pesforan, and that of course includes providing credit where credit is needed and can be extended with reasonable safety. Too strict credit rules and too short maturities will greatly hinder recovery. There is never a day that the R. F. C. does not have applications for Individual and industrial loans that are perfectly sound. They are not loans that normally would be liquidated within a few months, but many of them could be made by the local banker and could be liquidated, if the borrower is given reasonable time and notice. Demand on I?. F. C. to Make Direct Loans to Borrowers. The common cry almpst everywhere is that the banks are not lending. We get it on every side. Your representatives in Congress continually get it, and there is a persistent demand upon them to authorize the R. F. 0. to make direct loans. Unless deserving borrowers can get credit at the banks, you need not be surprised if Congress yields to this pressure. Unfortunately many who want to borrow cannot offer proper security and certainly in such cases banks should not grant the loans, but if we will go back to first principles of banking, where every banker takes care of his own customers and his own locality, lending at home, supporting and developing the farmers, merchants and industries of his own neighborhood, the credit situation will, to a very large extent be relieved, and employment provided for millions of people. It should be remembered that It is the money borrower, the man upon whom most of you look askance when he comes into your bank, who employs people, buys materials, and makes for better business. I wonder how many bankers are taking a real interest in their customers to the extent of inquiring of them as to whether or not they could use some money. I make this observation for the reason that it is so commonly understood that banks are not lending that many who would like to borrow and could give acceptable security, do not apply to the bank because they do not want to be refused. By reason of the fact that there has been such complete stagnation in business and industry during the last few years, much plant modernization and some building could very properly be carried on if the money was available on fair terms with which to pay for it. Some of this probably Phonid be long time financing but much of it could be provided by the banks. I wonder if the trouble is not in part that we are still suffering from shall shock—still afraid? Of what, I am unable to divine. If property, and that takes in every scope of investment, has no value upon which to lend, then our money can have no value. But this is not open to question. Our property, has value and our money has value. It will always be so in America. Furthermore, the depression is over and we are assuredly on the upgrade. You probably think by this time that I am of the impression that banks are not extending enough new credit, and you are entirely right. Up until a few days ago we justified our course with one excuse or another. But nolv.that the President and Congress have acted on our money, there is no longer any valid reason for hesitation, and the Government should not be forced to become the banker for every deserving borrower in the United States. Let's also quit worrying about the dollar—it's the best money in the world. Much has been accomplished in rehabilitating our banking system, hut there are corrections yet to be made. To date the R. F. C. has acquired 963 preferred stock and capital notes in approximately 6,000 banks, representing an investment of a billion dollars. It is our purpose to continue the preferred stock program until every bank in the United States has had an opportunity to increase its capital. We must have a strong banking system—strong in capital as well as liquidity—and this applies to all banks. Furthermore no form of Governmental assistance will be more helpful or more lasting than this added bank capital, which really means working capital for business and industry for in excess of the Government's investment. Regardless of how liquid a bank may be, a proper ratio must be maintained between sound capital, and deposits. A bank with more than seven or eight times as much deposits as it has sound capital, subjects both its stockholders and depositors to =necessary hazards for the reason that if a proper proportion of the deposits are employed, the margin of safety becomes too small. If the deposits are not employed, business and trade is denied that amount of available credit, and to that extent the bank becomes merely a depository. There is another point I should like to mention and that is the unwillingness of banks to show borrowed money. It is their business to borrow as well as to lend, and they should be no more reluctant to do the former than the latter. We have a Federal Reserve System—the best banking system in the world—entirely owned by its member banks, and they should not hesitate to make use of all its facilities. It was designed to mobilize the entire banking resources of the country so that excess cash in one locality would serve the credit requirements of another. The Federal Reserve prevented a complete breakdown in the finances of our country during the World War. In fact it made it possible for us to fight and win the war. We now seem to make very little use of it except that it serves as a nation-wide clearing house and at times is useful in open market operations, as an Investor in Government bonds, etcetera. When the Federal Reserve Act was passed and for some years afterward, we had commercial paper especially intended for eligibility in the Federal. The portfolios of our banks now contain a very small percentage of such paper. To meet this changed condition, the law has been liberalized to make it possible, in certain situations, for banks to borrow from the Federal on any kind of collateral acceptable to the Federal Reserve Bank management. Failure to apply and use these snore liberal conditions has denied much helpful credit to trade and industry. To serve business, industry and agriculture, a well-managed bank should borrow or rediscount at least seasonally. We country bankers are too prone to follow the lead of the city banker, both in the fear of borrowing, and the desire to show very strong liquid positions. For this reason the city banker has a greater responsibility. Public Debt. Some of the more conservative of our people are concerned about the size of our National debt, and to my way of thinking, unnecessarily. The public debt is now approximately 25 billion dollars, with offsetting and earning assets due the R. F. C. and Public Works sufficient to reduce this amount to less than 22 billion dollars. Adding 10 billion included in the President's extraordinary budget, will bring the total indebtedness to not snore than 32 billion dollars. The interest on this at 3% is slightly less than a billion dollars a year, and if it was necessary to amortize the entire amount in say 35 years, the added annual cost would be $320,000,000, or a yearly outlay of approximately $1,300,000,000. When it is considered that in 1929 the income of the American people was 89 billion dollars and in 1932—the low year-40 billion dollars, this National debt is not a serious problem. It is fair to assume that with recovery already assured, the Nation's income may safely be calculated at 65 billions, 2% of which would completely extinguish the National debt in 35 years. I have tried to discuss the banking situation and credit needs of the country as it appears from my point of view, and to appeal to bankers for constructive leadership in the President's program of recovery and to help hold every inch of ground gained, as we gain it. It seems to me that the time has come when we can with confidence, take a broad view of the whole situation and follow the President's lead. The banker must be the leader, the morale builder and the one who really decides most of our business problems. And let us not forget as we go about our daily lives now, the debt of gratitude that we owe to the man in the White House—to his wisdom, his courage, and his determination to end human suffering and give us in fact, a New Deal. We are living in a new world this February compared with last February and if we support the President as we should, and follow his leadership, there need never be a repetition of the distressing conditions through which we have just passed. Part of 1933 Bank Act Repealed by Senate—Relieves Officials from Ownership of Stock. The following Associated Press advices from Washington, Feb. 6, are taken from the New York "Herald Tribune": The Senate to-day passed and sent to the House the Fletcher bill repealing that part of the 1933 Banking Act requiring directors. trustees and members of the governing boards of Federal Reserve member banks to own stock in their banks in amounts varying with capitalizations. It would leave in force a law requiring the directors to own at least $1.000 of such stock In banks with a capital of $25,000 or more, or $500 if the capital is less than $25.000. The provisions repealed required ownership of $2.500 if the capital was more than $50.000; $1,500 If lass than $50.000 and more than $25,000. and $1,000 if less than $25,000. Eightieth Anniversary Celebrated by James Talcott, Inc. Feb. 8 Organization Was Formed in 1854Is Now One of Leading Factory Concerns in United States. James Talcott, Inc., one of New York's oldest and largest textile factoring firms, celebrated its 80th anniversary on Feb. 8. The business was founded in 1854 by the late James Talcott, and was incorporated in 1915. J. Frederick Talcott, son of the founder, is President and Chairman of the board of directors. A summary of the career of the organization follows: 964 Financial Chronicle Feb. 10 1934 The history of the firm virtually parallels that covering the development of the textile industry in America in regard to the financing of mill production and distribution. James Talcott, the founder of the business, was but 19 years of age at its inception, having come to New York from Hartford, Conn. to sell the product of a small knitting mill in which he and his older brother were interested. His success was so marked that within a few years he was handling the entire output of many other mills, both in this country and abroad. As a logical outgrowth he was increasingly concerned with supplying working capital to meet the expanding volume of business enjoyed by these mills. In time the supervising of credits and the cashing of sales came to be the principal business of his firm, a policy which has been followed in the enlarged sphere of present conditions by James Talcott, Inc. For nearly 50 years James Talcott occuPied the five-story building at 108-110 Frankling Street. Since 1911 the firm has been located at 225 Fourth Avenue, with annexes in various industrial centers. It is to-day handling the credit-financing of several hundred mills and reports the largest and most profitable volume of business in its 80 years of history. We favor some such limitation as is set forth in the annual report of the Superintendent of Banks for the year 1932, wherein he states, "in :our opinion, neither State or National branch banks should be established. except on the concurrence of the State. National and Federal Reserve authorities," or as Is suggested in the resolution adopted by the State Banking Board under date of March 23 1933. We urge Congress to amend the Banking Act of 1933, in such manner as will effectually prevent the over-establishment of banks or branches thereof in any community, and that State legislation along similar lines follow thereafter. 2. Affiliated Securities Corporations. The Superintendent recommends that the law be amended to prevent affiliation between banks and corporations engaged primarily in the business of buying and selling securities by the following means: (a) Limiting loans to such corporations to the same extent as provided for by the Banking Act of 1933 for members of the Federal Reserve System. (b) Prohibiting the issuance of stock certificates which represent an interest in the capital stock of such a corporation. (c) Prohibiting an officer of a bank from serving as an officer of such a corporation. New York City Bank Stocks Recovered During January in Sharpest Rally Since August 1932. Staging their sharpest rally in any month since August 1932, New York City bank stocks outstripped the general market in the January recovery, bit,Rose & Troster report. The firm said that its weighted average of 17 leading issues opened Jan. 2 at 39.69 and closed Jan. 31 at 50.64 for a net gain on the month of 10.95 points, or 27.6%. This compares with net gains of 6.8%, 21.5% and 16.6%, respectively. for the Dow-Jones industrials, rails and utilities. Compared with their 1933 low of Dec. 26 New York City bank stocks show a net advance of 44.4%. The firm continued: Your Committee believes these recommendations are sound and they have its approval. QtaNW.NNO0 00W04 , COINW X Chase National featured the month's advance, showing a net gain of 48.7%. Other issues to show gains above the average were: Public National. 39.2%; Manufacturers Trust. 38.7%; Brooklyn Trust, 37.3% Empire Trust, 35.0%; National City, 34.5%; Chemical, 31.1%; Irving Trust, 29.7%, and Guaranty Trust, 29.5%. Based on closing bid prices, the range for January 1934 was as follows: BANK STOCK RANGE—JANUARY 1934. Open Close Open Close and Low and High and Law and High Jan. 2. Jan. 31, Jan. 2. Jan. 31 Empire Trust 15 203' Bankers Trust 5034 First National 1185 1430 Brooklyn Trust.... 67 Guaranty 251 325 Central Hanover___. 109% Irving 18 1334 Chase Manhattan 1934 2334 2934 Continental 1134 Manufacturers Trust 1434 2034 Chemical New York Trust—. 2934 9034 7534 City 2134 Publlo National 2734 1934 Commercial Nat'l_ __ 115 Corn Exchange 41 Weighted average. 39.69 50.64 1933 RANGE. 1932 RANGE. High, Jan. 10 62.19 High, Sept. 7 70.76 Low,Dec. 26 35.06 Bear market low. May 31 31.34 Attitude of Committee of New York State Bankers Association Toward Amendments to State Banking Law Recommended by Superintendent of Banking. At the mid-winter meeting of the New York State Bankers' Association in New York City on Feb. 5 a report of the Association's Committee on State Legislation was presented, embodying the Committee's views on amendments to the State Banking Law recommended by State Superintendent Broderick. The Committee's report follows: Your Committee has addressed itself to the consideration of the recommendations for amending the Banking Law contained in the annual report of Superintendent Broderick for the year 1933. In this report he makes 17 specific recommendations and we give below our comments on each of them. Your attention is called to the fact that specific bills embodying these recommendations of the Superintendent were not available to your Committee when it met, and members of the Association are urged to ask their Assemblymen to furnish them with copies of these bills and any other measures which amend the Banking Law. You are urged to study them and make known your views on them to your representatives in the Legislature. RECOMMENDATIONS FOR AMENDING BANKING LAW. 1. Branch Banking. The Superintendent renews his recommendation of last year that the banks be permitted to establish branches in their own and adjoining counties, and that banks having capital and surplus of S25,000.000 or more be permitted to establish branches anywhere in the State,provided that no branches be permitted in towns where a bank already exists, except through the process of taking over the existing bank. In all cases the Superintendent would require the approval of himself and the Banking Board before permitting the establishment of a branch. Your Committee is opposed to the extension of the branch banking privilege in the State of New York beyond the territorial limits now permitted until and unless the over-establishment of branch banks, either State or National, is properly guarded against. In our judgment, existing laws do not furnish this safeguard, nor is it within the power of the State Legislature to provide this safeguard until Congress has taken further action. The only limitation imposed by the Banking Act of 1933 on the Comptroller of the Currency in the establishment of National bank branches is a territorial limitation. If the State of New York permits State-wide, trade-area or county-wide branch banking, then the Comptroller may establish as many National bank branches within such territorial limits as he shall see fit, without regard to any other limitations or restrictions which might be imposed by the State, and without the consent or approval of any State authority. In other words, when we permit the establishment of State branches within any territorial limits, then that territory Is wide open for the unrestricted establishment of National bank branches. Your Committee favors the establishment by Federal and State law of some definite limitation upon the authorization of banks or branches thereof, in both Federal and State systems, based upon population, wealth and(or) business activity in the particular community involved. 3. Reduction of the Number of Directors. The Superintendent recommends that the maximum number of directors be reduced to the number permitted by the Banking Act of 1933; namely 25 directors. Your Committee believes this Is a move in the right direction and approves the recommendation. 4. Removal of Officers and Directors. The Superintendent recommends that he be empowered to remove officers, directors and trustees with the approval of two-thirds of the members of the State Banking Board, after a hearing before the Board, if such officers, directors and trustees,are found to be guilty of persistent violations of the Banking Law, or responsible for the continuation of unsound practices. Such power is granted to the Federal Reserve Board by the Banking Act of 1933, and your Committee agrees that the State Banking Board should have this means of enforcing its regulations. The recommendation is approved. 5. Investments in Stocks of Corporations. The Superintendent recommends that banks and trust companies be prohibited from investing in stocks of corporations, with certain exceptions, such as the stock of the Federal Reserve Bank and Safe deposit companies. Such a provision in the State Law would bring it into conformity with the Federal Law, and your Committee approves this recommendation. However, we suggest that the bill embodying this recommendation include a provision preserving the right of trustees to invest trust funds in stocks, where the documents establishing the trust relationship permit it. 6. Authorization for Membership in the Federal Deposit Insurance Corporation. The Superintendent recommends that the law be amended to authorize banks, trust companies, savings banks and industrial banking companies to hold the stock of and become members of the Federal Deposit Insurance Corporation. While we approve this recommendation, we call the attention of our Legislature to the fact that the Permanent Insurance Fund provided for in the Banking Act of 1933 represents a serious threat to the soundness of all the banks in this State, in that it permits unlimited assessments against sound well managed banks to pay the losses of any bank which may become insolvent in any State in the Union. The members of this Association at their Convention last June passed a resolution opposing the unlimited assessment provision of the law which reads as follows: "Resolved. That the New York State Bankers Association record its opposition to that portion of the Glass-Steagall Bill which permits of the unlimited assessment by the Federal Deposit Insurance Corporation against the capital funds of banks and that the officers of the Association be instructed to make suggestions and recommendations to the proper authorities for the amendment of this portion of the bill so that the maximum amount of liability of any one bank for any year will be fixed." 7. Autherisation for Membership in the Federal Reserve System. It is recommended by the Superintendent that the law be amended to authorize savings banks and industrial banking companies to hold stock of and become members of a Federal Reserve bank. 'Your Committee approves this recommendation. 8. Loans to Officers. The Superintendent recommends that loans to its own officers by a bank or trust company be prohibited and that executive officers be required to report to the Chairman of the Board of their institution any indebtedness to any person or corporation. All members of your Committee approve this recommendation except Messrs. Perry Wurst and George Merrill, who favor the proposed amendment so far as it relates to salaried officers in every day charge of the management of banks and trust companies, but, do not believe it should be made to apply to the many Presidents and Vice-Presidents of small town banks who are not salaried, who are men successfully engaged in other business in which they come in close contact with the people in their community and whose banking activity consists in attending a weekly committee meeting and monthly directors' meeting. Messrs. Wurst and Merrill in Helve such oificers should not be prohibited from borrowing for their seasonal requirements, but should be required to furnish approved collateral. If the Superintendent is empowered to remove officers and directors as recommended, this power should aid the Department to control the situation without working a hardship on many small banks through either losing inactive officers valuable for their influence and knowledge or through losing the accounts of such officers. 9. Investments in Banking Buildings, Mr. Broderick recommends that the investment in bank buildings be limited to the amount of a bank's capital, which is the limitation contained In the Banking Act of 1933. While your Committee agrees that the law should contain some limitation, it believes that the Superintendere's recommendation would prove unworkable in some cases. Wt suggest that the law be amended to provide that no bank without the approval of the Superintendent may invest more than one-half of Its capital and surplus in its building. 10. Double Liability on Bank Stocks, The State Banking Board has passed a resolution urging the Governor and the Legislature to take immediate steps to bring about the repeal of the clause of our State Constitution which requires double liability for the stock of State banks and trust companies. Your Committee approves the position taken by the Banking Board in Its resolution. Volume 138 Financial Chronicle 11. Authority to Issue Preferred Stock. The Banking Board has also passed a resolution stating that in its opinion the law should be amended to permit banks and trust companies to issue preferred stock. Your Committee agrees that the law should be so amended. 12. Inter-Bank Deposits. The Superintendent recommends that the present restriction as to the amount of deposits which a bank or trust company may carry with another such institution be liberalized. Your Committee approves this recommendation and suggests that the law be amended to permit a bank or trust company to carry up to 50% of its capital and surplus with a reserve depository, and that the Superintendent be empowered to authorize a larger percentage when he deems it to be in accordance with sound banking. 13. Borrowing Directors. The Superintendent recommends that a director who borrows from his own institution be required to keep a statement of his financial condition on file with it. A bill embodying this recommendation has been introduced in the Legislature. It provides, however, that no statement need be filed if a director furnishes collateral. All members of your committee approve this bill except Judge Overocker who believes that the law should not permit any exceptions. 14. Branch Officers for Savings Banks. The Superintendent recommends that savings banks be permitted to maintain deposit and withdrawal stations within county limits and branches in their own and adjoining counties if and when similar power is given to banks and trust companies. Your Committee has stated its views fully on the subject of branch banking and makes no comment on this recommendation. 15. Re-incorporation of Finance Companies. The Superintendent recommends that finance companies which now operate under the Investment Article of the Banking Law be permitted to re-incorporate under the Stock Corporation Law. Your Committee approves this recommendation. 16. Guaranty Fund of Savings and Loan Associations. Your Committee approves the recommendation that Savings and Loan Associations be required to maintain larger guaranty funds than heretofore. 17. Examination of Savings and Loan Associations. Your Committee also approves the recommendation that the boards of directors of Savings and Loan Associations be required to examine their Institutions periodically. In addition to the bills embodying the recommendations of Mr. Broderick, various other measures affecting banks have been introduced in the Legislature and they will be considered by the Committee. Among them, are several which would prohibit a bank from acting as receiver or trustee in bankruptcy. The Committee is opposed to bills of this character which seek to restrict unnecessarily the charter powers of the banks and trust companies of the State. Committee on State Legislation. Arthur W. Longsby, Chairman, Chairman of the Board, First Trust & Deposit Co., Syracuse, N. Y. J. Stewart Baker, Chairman of the Board, Bank of the Manhattan Co., New York City. Percy II. Johnston, President, Chemical Bank & Trust Co., N. Y. City. Perry E. Wurst, Vice-President, Manufacturers & Traders Trust Co., Buffalo, N. Y. Raymond F. Leinen, Vice-President, Lincoln-Alliance Bank & Trust Co., Rochester, N. Y. George E. Merrill, President, Erie County Trust Co., East Aurora, N. Y. George Overocker, President, Poughkeepsie Trust Co., Poughkeepsie, N.Y. Federal Legislative Committee of New York State Bankers' Association Urges that Adoption of Permanent Plan of Deposit Insurance Be Deferred and that Temporary Fund Be Continued for Three Years—Commends Manner in Which Provisions of Banking Act Have Been Administered. In a report presented at the mid-winter meeting of the New York State Bankers' Association, held in New York City Feb. 5, the Association's Committee on Federal Legislation, while indicating that it "is opposed in principle to deposit guaranty," "recognizes that the banking system of the country is still in a period of convalescence from the Shock of recent crises. The Committee records its opinion that deposit insurance on a nation-wide scale is experimental in nature, and should be given an adequate trial under varying conditions before being made a permanent part of the American banking system." It recommends that the permanent plan of deposit insurance, which will become operative under the law on July 1 1934, be deferred, and that the life of the temporary fund be extended for a period of three years from July 1 1934. The Committee's recommendations follow: 1. That the life of the temporary fund now in operation be extended for a period of three years from July 1 1934, on which date it will come to an end under the law as it stands. 2. That the so-called permanent plan of deposit insurance, which will become operative on July 1 1934, under the existing law, be deferred as long as the temporary fund continues in operation. The Committee recommends that the following changes be made with respect to certain other Sections of the Banking Act of 1933: "Section 2. The term "affiliate" should be re-defined and clarified so as to exclude organizations which obviously have no direct connection with a member bank or the business thereof. "Section 22. The exemption from double liability of National bank stock issued after the date of enactment of the Act should be extended to apply to all National bank stock issued both before and after such cnactment. 965 'Experience has shown that the double liability of bank stockholders affords no appreciable protection to bank depositors in event of insolvency, and the Committee believes that the continuance of such liability tends to discourage the investment of capital in bank shares. "Section 31. The provision requiring every director of a bank, after July 16 1934, to own not less than $2,500 par value of the stock thereof when the bank's capital exceeds $50,000, and not less than $1,500 of the par value of the stock thereof when the bank's capital exceeds $25,000 but does not exceed $50,000, should be amended to require the director to own not less than $1,000 par value of the stock of the bank of which he is a director. The Committee believes, on the basis of evidence brought to its attention, that many able and desirable directors of banks would be forced to resign if called upon to make additional subscriptions or purchases of stock at this time." The remainder of the Banking Act of 1933 contains much that is obviously in the interest of sound banking practice, and the Committee is not recommending other changes at this time.. Regarding its attitude toward the Banking Act, the Committee says: Your Committee was appointed pursuant to a resolution adopted at the last annual convention of this Association, which directed it to study the operation of the Banking Act of 1933 and the regulations promulgated thereunder, and to make such suggestions and recommendations as it might deem wise. Inasmuch as this Act represented the most important Federal banking legislation enacted in many years, and with the probability that any further banking legislation considered by the current session of Congress will be more or less closely related thereto, it was deemed advisable for the Committee to assume the title as well as the functions of the standing Committee on Federal Legislation. In our study of this legislation and the administration thereof during the seven months that have elapsed since our last annual convention, we have been impressed by the fairness and efficiency with which the instrumentalities of the Federal Government have moved in the execution of their various functions relating to banking. The Committee, therefore, has nothing but praise for the manner in which the Banking Act provisions thus far effective have been administered. We are frank to confess that many of our earlier fears have proved groundless. The following is the membership of the Committee on Federal Legislation: George V. McLaughlin, Chairman, President Brooklyn Trust Co., Brooklyn, N. Y. George C. Cutler, Vice-President Guaranty Trust Co., New York City. E. C. Donovan, President Auburn Trust Co., Auburn, N. Y. Mark M. Holmes, President Exchange National Bank, Olean, N. Y. George Overocker, President Poughkeepsie Trust Co., Poughkeepsie, N. Y. Horace C. Flanigan, Vice-President aianufacturers' Trust Co., New York City. W. W. Schneckenburger, Vice-President Marine Trust Co., Buffalo, N. Y. Interest on Savings Deposits to Be Reduced to 2 1 2% / Under Ruling Adopted by Milwaukee Clearing House Association—Rate Heretofore 3%. Interest on savings deposits will be paid at the rate of 234% compounded semi-annually, effective March 15 1934 under a ruling adoped Feb. 1 by the Milwaukee Clearing House Association. It is anticipated that all banks in Milwaukee County will comply with this new rule. The present rate is 3%. Charles J Buhnnmench, President of the Association, in announcing the rate adjustment said: This action is made necessary by the prevailing slack demand for business loans and by the low yield on Government and other securities. The revision is in line with similar adjustments which have already been made by clearing-house associations in many leading cities. It is pointed out that Chicago and Minneapolis banks reduced their interest rates to 2 % more than a year ago. The announcement in behalf of the Milwaukee Clearing House also says: Within the past six months some New York banks have adjusted rate to 246% and others to 2%. In Wisconsin, banks of the Fox River Valley. as well as banks in Madison and other cities, have likewise reduced their interest rates to 24i %. Milwaukee banks have consistently endeavored to continue payment of the 3% rate, hoping for an increase in the demand for money by commerce and industry sufficient to eliminate the neceessity of a rate revision. Stressing the importance of interest rates in relation to sound bank operation. Mr. Kubnmuench pointed out that "reserves and surpluses must be maintained in order to assure the continued strength and stability of the banking structure in any community." President Roosevelt Makes Known Plans for Formation of Export Bank Through Funds to Be Supplied By RFC—Designed to Facilitate Foreign Trade Particularly With Soviet Russia, South America and Balkan States. The creation of an export bank, through funds to be supplied by the Reconstruction Finance Corporation were announced at Washington during the past week. At his press conference on that day President Roosevelt made known the plans, and Jesse H.Jones, Chairman of the RFC, also explained what was planned. The proposed bank is designed for the financing in part of exports, particularly to Soviet Russia, South America and the Balkan States, although, said a Washington dispatch on that date to the New York "Times" President Roosevelt made it clear that the project, as originally planned, related chiefly to Russia. Mr. Jznes said that the bank also might finance some imports from the Soviet Republic. The "Time.," dispatch continued: 966 Financial Chronicle While no official would estimate the amount of capital that might be Put into such a bank, $300,000,000 was a figure reely mentioned in wellinformed quarters. The President emphasized that there is no idea of granting straight credits to Russia or of financing exports completely. Exporters will be required to take some of the risk, and commitments will be made to them as American business firms rather than to foreign Governments, whether the Soviet or others. Jones Explains Plan. Mr. Jones told newspaper correspondents that credits of three to five years for exporters are contemplated. This accounted for a decision. made public by the President, to incorporate the bank under the laws of the District of Columbia instead of under the Edge Act, the usual vehicle for incorporating such banks, which would limit the term of commercial credits. "We are trying to find a way to finance both exports and possibly imports to Russia and to some other countries," Mr. Jones said. "Whether it will all be done through one corporation or whether we shall have separate corporations for different countries has not been decided. It may take the form of a sort of trading bank, a bank that could extend credit to our exporters and importers, guarantee bills in a limited way, and in general share the credit risk with the exporter and when necessary provide a part of the financing. "In all probability, It will take on the form of the Commodity Credit CorporaJon, to be operated within the RFC, but with a special management. It is contemplated that the Government will own all of the stock; the amount of stock will be flexible, depending on the need and what can be used to advantage. It could not be an enormous amount. No Additional Funds "We do not contemplate asking any additional funds from Congress or from the President. We think that it can be handled with the resources of the RFC and those requested under the President's budget message. "As regards the amount of the Government risk, we will trade with the exporters to the amount that they need in order to be able to carry through their commitments, but what the Government agrees to take will be without recourse on the exporter himself. "In our plan the exporter will deal with the customer in making the sale and putting nis goods in these foreign markets, and will deal with this bank of ours regarding the credit. "The RFC will pass on the credits supplied, but in this case perhaps only on the extension of the capital and the funds needed." The proposed bank was commended to-night by John Abbink of the Business Publishers International Corp. and Chairman.of a Committee of Export interests. On Feb. 1 President Roosevelt, it is stated, called into conference Chairman Jones to discuss th.3 creltion of the proposed agency. Advices to this effect were contained in a Washington dispatch Feb. 1 to the New York "Journal of Commerce" which also said in part: William C. SWIM, American Ambassador to Soviet Russia, and John Wiley, counsellor of the Embassy at Moscow, also participated in the conference, giving rise to the belief tnat the export expansion program . would be concentrated upon trade witn the Soviet Government. . Ambassador Bullitt indicated keen interest in the proposal, which definitely shapes the projected trade expansion with Soviet Russia. He said he did not take a large part in the discussions but "listened to Mr.Jones explain the arrangement." The Ambassador is scheduled to return to Moscow about February 15, and it is thought the proposed agency will be in operation by that time. Cotton Sale Unconfirmed. Inquiry in informed quarters here and in Washington yesterday failed to bring confirmation of reports originating here that arrangements had been made for the financing of the sale of 500.000 bales of raw cotton to the Soviet Government through private banking organizations in New York. Any further trading with the Soviet is very likely to be done with the aid and probably under the supervision of some division of the Federal Government,it was learned authoritatively. This view is shared by officials both of the Soviet Government and by executives of Amtorg Trading Corp.. wnich is the Soviet's agency for commercial transactions in the United States, as well as by informed industrialists and Federal officials who have interested themselves in the possibilities for trade which were opened up by Soviet recognition. New Legislation Ready. For some months it has been apparent that in order to achieve any substantial trade with Russia or other foreign countries some agency under Government auspices and Government financing must be set up. This will require new legislation. A number of Senators and Congressmen are In favor of such legislation and are understood to be ready with the necessary proposals Exports. From the New York "Time," of Feb. 4 we take the following: RFC Exchange Guarantee Considered for Government guarantees covering 100% of the exchange risk assumed by exporters in selling goods abroad are under consideration in Washington in connection with the foreign trade-financing plan announced there Friday, It was learned yesterday. Those who worked closely with the Government in developing the export-financing plan which the Reconstruction Finance Corporation will carry out have been informed that Federal officials will guarantee as much of the commercial credit risks as possible, but are determined to lift the burden of exchange hazardsfrom the exporters'shoulders. Upward of $350,000,000 in commercial credits, extended by American companies, according to recent estimates, are tied up abroad through exchange restrictions of one kind and another. The heavy drain which this sum puts on exporters' resources would be lifted by the reported Federal plan. Marked Improvement in Earnings of Corporations for 1933 Over 1932 Seen by National City Bank of New York. Pointing out in its February letter that "earnings reports of corporations for 1933 thus far published indicate in most cases a marked improvement over 1932" the National City Bank of New York adds: A preliminary tabulation of some 350 industrial companies, engaged in and trade and having an aggregate net worth of86.534.000,000. shows combined net profits, less deficits, of approximately Ira:10M lines of manufacturing Feb. 10 1934 $163.000,000 in 1933 as compared with a deficit of $41,000,000 in 1932 for the same companies. The 1933 profits represented an average rate of return upon net worth of 2.5%. The proportion of concerns operating at a profit rose from 43% of the total in 1932 to 62% in 1933. Many representative companies went into the black last year for the first time since 1929 or before, while many others still operating in the red reduced the amount of their deficit. Judging from the early reports, the industries that enjoyed the best earnings last year were those engaged in producing articles for immediate consumption,Including cotton goods and other textiles, shoes, meat packing and miscellaneous food products, also automobiles, paper and petroleum. Results in wholesale and retail trade were better. The heavy industries, such as steel, building materials, electrical and other machinery, railway equipment. &c., continue to lag: nevertheless many companies have shown some improvement, either by cutting their losses or by turning in small profits. An important factor in the gains last year was the rise that occurred in commodity prices, contrasting with the decline during 1929-1932 which necessitated heavy writing down of inventory valuations. The downward readjustment in capitalization and in fixed assets by many companies has enabled them to reduce operating and overhead charges sufficiently to show a profit on a much smaller volume of business than formerly. Banking Situation Similar to 50 Years Ago, According to Rand, McNally, in Its 50th Anniversary Number. In its 50th anniversary number "Rand McNally Bankers Monthly," Chicago, publishes a comparison of the bank situation in 1884 compared to 1934, and on these six points 1934 and 1884 are almost exactly similar: An abundance of capital. A scarcity of good loans. Excessive liquidity in banks. Low rates on loans. Congress was considering monetary problem legislation in 1884 and has a monetary problem in 1934. The 50-year review records events in banks and National Finance of interest to those who are working on the country's problems to-day. "Rand McNally Bankers Monthly" points out that it has stood for the following principles during its 50 years of publication: A sound but flexible National currency (1884-1934); the liberal use of bank checks for the transfer of credits (1887); liberal reserves for contingencies (1888); directors must give adequate attention to the directing of the bank's policies (1893); good practices must be promoted by tho banks, rather than left to legislators who are not well equipped to write laws that will protect both banks and customers (1928); a compulsory system of deposit guaranty is not desirable (1908) (1932) (1933); Government savings banks are not desirable (1886): legislation should not curtail the effectiveness of State banks (1886); a National unity of the banking system is essential (1884-1934); State bankers associations should be promoted (1885); a central bank essential (1891); a study should be made of currency and banking (1891); departments of economics and finance should be encouraged in universities (1890): banks should not give too liberal a share of earnings to depositors as interest on savings (1928); service charges are essential to continuous bank earnings (1928); bank management should be studied systematically (1928)• In another article in this anniversary number, the magazine reports bright prospects for much better banking in the future. Johnson Said to Have Given Preliminary Approval to Definition of Service Charges Following Conference With Banking Code Committee— Fair Trade Rules Must Be Revised by the Groups General Submitting Them. Preliminary approval of a definition of service charges and a standard formula to be used in the analysis of checking accounts, submitted by the Banking Code Committee, has been given by General Johnson, said a Washington dispatch Jan. 31 to the New York "Times," which went on to say: of This is with the understanding that the fair trade practice provisions to the city and regional the various schedules are to be returned for revision them. clearing house associations or other groups submitting The announcement was made by the Recovery Administration to-day, after a series of conferences with the Banking Code Committee. "The revision of these schedules is to be along the lines that are best suited to each locality and are to be fair and equitable to both the depositors and the banks according to their local conditions," said General Johnson. "The revised schedules are to be resubmitted through the Banking Code Committee for my approval. When so submitted they will be given con• sideration by me, with an opportunity by any parties interested to present objections to the service charges as determined as to the standard formula, with a public hearing to be called if it is deemed necessary, "The hearing tentatively set for Feb. 18 has been canceled." "Service Charges" Defined. The definition of the term "service charges" is as follows: "The term 'service charges' is hereby construed to apply only to the determination of the method of compensating the banks on checking accounts, either in the form of adequate balances or charges. "These 'service charges' are to be determined by tile application of a uniform rule or formula. "Any other charges or analysis factors which banks may wish to make or use for services not specifically provided for in the code and which are not set forth in this rule or formula shall be a matter of determination by Individual banks, or by clearing house agreement and shall not be controlled by Code Authority." Cost Factor Formula. The standard formula for determining cost factors is as follows: "1. Accounts and results of operation shall be reviewed for the purpose of determining whether the bank is compensated for the service rendered to the customers. 2. The following factors shall be taken into account in the review: "(a) The average daily ledger balance. Volume 138 Financial Chronicle "(b) The actual amount of such balance as is available for loan or inebtment purpose after deduction of float and reserve. "(e) The rate of income which shall reflect the earning value of these funds when invested, subject to adjustment to meet varying interest rates. "(d) Expense of collecting checks and other items deposited, debiting items and other usual and special services. "(e) Other expenses of the bank applicable to these accounts. Customer Has Option. "3. If the result indicates that the account is being carried by the hank at a loss the customer shall have the option of adequately increasing the balance carried or of paying a charge which will reasonably compensate the bank for the service rendered. "4. To avoid the necessity of making detailed calculations with respect to each small account, banks may require a reasonable minimum balance to be carried by the depositor, and if such balance is not maintained shall snake an equitable charge. "5. A direct charge shall be made for all out-of-pocket expenses, such as exchange, collection and other charges arising out of specific transactions for specific customers and actually paid or credited by the bank on behalf of such customers." Ronald Ransom, Chairman of the Banking Code Committee, said the clearing house and bank rules in effect prior to Dec. 29 1933, and not suspended by General Johnson's order of that date, were still effective, but did not hcar the approval of the Administrator. Increased Membership for Representatives of ABA on NRA Banking Code Committee—Action Pursuant to Order of Gen. Johnson. Pursuant to an order of General Hugh S. Johnson, Administrator for Industrial Recovery, increasing from 15 to 25 the representatives of the American Bankers Association on the Banking Code Committee, President F. M. Law of the Association announced on Feb. 2 the following additional members: Carl W. Allendoerfer, Vice-President First National Bank, Kansas City, Missouri. E. J. Bowman, President Daly Bank and Trust Company, Anaconda, Montana. Charles H. Deppe. Vice-President Fifth Third Union Trust Company, Cincinnati, Ohio. Paul S. Dick, President United States National Bank, Portland, Oregon. P. B. Doty, President First National Bank, Beaumont, Texas. A. P. Giannini, Chairman of Board Bank of America National Trust & Savings Association, San Francisco, California. W. C. Gordon, President Farmers Savings Bank, Marshall, Missouri. W. A. Kennedy, President First National Bank, Pomona, California. Charles E. Spencer, Jr., Vice-President First National Bank, Boston, Massachusetts. William C. Tompkins, Auditor First National Bank, St. Louis, Missouri. The 15 members of the committee originally appointed and who remain without change are as follows: Ronald Ransom, Executive Vice-President Fulton National Bank. Atlanta, Georgia, Chairman. Orval W. Adams, Vice-President Utah State National Bank, Salt Lake City, Utah. L. A. Andrew, Vice-President First State Bank, Mapleton, Iowa. Address: Royal Union Life Insurance Company, Des Moines, Iowa. Philip A. Benson,President Dime Savings Bank. Brooklyn, New York. Benjamin J. Buttenwieser, Partner Kuhn, Loeb & Company, New York City. John B. Byrne, President Hartford-Connecticut Trust Company, Hartford, Connecticut. J. R. Geis, President Farmers National Bank, Salina, Kansas, Robert M. Hanes, President Wachovia Bank & Trust Company, Winston-Salem, North Carolina. P. D. Houston, Chairman Board American National Bank. Nashville, Tennessee. Percy H. Johnston, President Chemical Bank & Trust Company, New York city. Thomas B. McAdams, President Union Trust Company, Baltimore, Md. Abner J. Stilwell, Vice-President Continental Illinois National Bank and Trust Company, Chicago., Ill. Henry A. Theis, Vice-President Guaranty Trust Co., New York City. George 0. Vass, Vice-President Riggs National Bank, Washington, D.C. 0. Howard Wolfe, Cashier Philadelphia National Bank, Philadelphia, Pa. Frank W. Simmonds, Deputy Manager American Bankers Association, New York City, Secretary. The modification of the Code, under which the above additions are made, was ordered by General Johnson January 22, and provides that the Committee shall consist of not more than 25 representatives of the American Bankers Association, three representatives of non-members to b selected in a manner approved by the Administrator, an representative or representatives without vote appointed by the President of the United States. The Code originally provided for 15 members from the Association, one representative of non-members and one or more representatives without vote appointed by the President. 967 Bankers Association, the non-member committeemen having been temporarily appointed by the Administrator, pending an election to be held in the near future and participated in by all assentors to the Code who are not members of the association. The committee is as follows: Francis A. Bonner. Bonner, Trost% & Co., Chicago, 111.11 " Arthur H. Bosworth. Bosworth, Chanute, Loughridge & Co.. Denver. George W.Bovenizer. Kuhn, Loeb & Co., New York Sydney P. Clark, E. W. Clark & Co., Philadelphia. Robert E. Christie, Jr., Dillon, Read & Co., New York. Edward J. Costigan, Whitaker & Co., St. Louis. . Harry S. Grande, Grande, Stolle & Co., Seattle. B. Howell Griswold, Alex. Brown & Sons, Baltimore. Edward H. Hilliard, J. J. B. Hilliard & Son, Louisville. W. Hubert Kennedy, Wells-Dickey Co., Minneapolis. Laanartine V. Lamar, Lamar, Kingston & Labouisse, Newprleans. Lawrence H. Marks, New York. Frank McNair, The N. W. Harris Company, Chicago. Robert H. Moulton, R. H. Moulton & Co., Los Angeles. Daniel W. Myers. Hayden, Miller & Co., Cleveland. Joseph R. Swan, Guaranty Company of New York, New York. Henry B. Tompkins, Robinson-Humphrey Company, Atlanta. Frank Weeden, Weeden Sr Co., San Francisco. Sidney J. Weinberg, Goldman. Sachs & Co., New York. George Whitney, J. P. Morgan & Co., New York. Orrin G. Wood, Estabrook & Co.. Boston. It is to this Code Committee, it is announced, that the Governors of the Investment Bankers Association will refer the fair trade practice regulations that have been drawn by the drafting committee, which, under the Chairmanship of Col. Allan M. Pope, has been working on this problem for more than three months. The Code Committee will then review the proposed rules and when that work is completed, the regulations will be submitted to a vote of the security dealers of the country who have signed the basic code. Mr. Christie on Feb. 7, said: "An extensive system of dealer registration, the districting of the country Into 16 regional areas, to facilitate enforcement of the code, and means of curbing high pressure selling are some of the many proposals made in the fair practice rules. The drawing of a set of rules wholly practical and fair is a tremendous job. However, much has been accomplished and the board of governors of the Investment Bankers Association will consider at its meeting in Chicago February 10 many proposals for the elimination of questionable practices and for the advancement of investment banking. "Registration of dealers, as now tentatively proposed, would be voluntary. Any dealer could register or not, just as he chose. The objective would be to make registrations so desirable that every dealer would seek and guard the privilege. While no dealer would be barred from registration he could remain on the list of registered dealers only so long as his dealings were fair and upright. If guilty of unfair practices the code conunittee could remove him from the list. Thus the registration list would gradually develop as a guide and safeguard to the public. It is not sufficient alone that fraudulent securities be eliminated. Unscrupulous individuals can make a security of highest quality the innocent means of a questionable transaction. Hence the need for a registration provision in order that there may be a check on individuals as well as a check on the character of securities. "The code authority may, of course, snake any arrangement it wishes for the enforcement of the code. The fair practice rules, however, propose that the code committee would appoint regional committees in each district as a local aid in enforcement and as a means of affording the code committee close contacts with the investing public and with security dealers. "The investment Bankers Association has spent many years and a great deal of money in trying to devise methods of salesmen's compensation that would develop the highest type of salesmen and service in the investor's interest. All the experience of the association is at the command of the code committee in any attempt that it may make to curb high pressure selling. "The drafting committee has literally combed the record of the securities business to ascertain objectionable practices. They have pointed the fair practice rules directly and definitely at the correction and eradication of these .ractices. It would be surprising if the rules now proposed should su in correcting all evils and we believe that as time goes on new regul tions may have to be drawn or old ones modified. However, a tho ughly conscientious job has been done and I believe that the result will . a set of rules that are sound, constructive and entirely in the public int: " evious items relative to the I. B. A. Code appeared in columns Dec. 9, page 4130, Dec. 23, page 4455 an 'Page 782. P,. Randolph Burgess of Federal Reserve Bank of New York Denies Charges that Banks Have Been "Niggardly" in Extending Credit to Customers— Misleading to Refer to Reserve Banks as Private Banks—Number of Banks in Operation in U. S. To-day 15,000 Compared With 30,000 Twelve Years Ago—With Excess Reserves Nearly a Billion Dollars and Tendency Toward Increase Fears Possibility of Problem of Credit Control. Taking cognizance of the fact that "every few weeks some National Committee Named to Administer Investment one makes the accusation that the banks have been niggardly Banking Code Under NRA. in extending credit to their customers," W. Randolph Members of the Investment Bankers Code Committee, Burgess, Deputy Governor of the Federal Reserve Bank to administer the unvestment banking code under the NRA, of New York, referred on Feb. 5 to the operations of the announced on Feb. 7 by Robert E. Christie, Jr., Presi- Reserve Bank as providing were "some test of the extent to which dent of the Investment Bankers Association of America, fol- good loans are being made or refused by banks in this lowing a conference with officers of the NRA. The Com- locality." Citing what had been done during the period mittee consists of 21 members and is designed to be fully from the middle of 1932 until the end of 1933, Dr. Burgess representative of all parts of the country and of all types of concluded with the remark that "it seems to us a reasonable investment banking houses. The personnel of the Committee deduction from this experience that generally speaking includes both members and non-members of the Investment eligible borrowers entitled to bank credit are being provided • 968 Financial Chronicle for by the commercial banks." Since we are giving further below Dr. Burgess'speech in full, we omit here his resume of applications for loans, and amounts granted. Discussing the situation as to the money market and Treasury financing Dr. Burgess noted that indebtedness at the Federal Reserve banks is less than $100,000,000,(the smallest since 1917) and that "in addition member banks now hold excess reserves over and beyond the legal requirements, larger than ever before." "These excess requirements" he went on to say "now total nearly a billion dollars, and are more than 50% above legal requirements." He pictured "an increase rather than a decrease in these reserves," and expressed the view that "the prospect is for such an ample supply of funds that eventually we may face a difficult problem of credit control." Dr. Burgess finds that the number of banks in the country has been approximately cut in half in the past dozen years—that whereas there were over 30,000 in 1921 and 1922, the number has now been reduced to less than 1.5,000 fully open for business." Dr. Burgess' speech was delivered at the mid-winter meeting of the New York Bankers'Association, held in the auditorium of the New York Federal Reserve Bank on Feb. 5. He spoke under the title "The Banking Situation," and his address in full follows: Any bankers to-day who are still in the banking business may well consider themselves battered but triumphant veterans. In banking we have been through a struggle for existence and have witnessed a survival of the fittest. The bankers of this district have been fortunate compared with the bankers of other sections. In the country as a whole the number of banks has been approximately cut in half in the past dozen years. In the years 1921 and 1922 there were over 30,000 banks in the United States. That number has now been reduced to less than 15.000 fully open for business. There has thus been a reduction of over 50% • In this district the largest number of banks was reached in 1927 and 1928 when there were 1.348 commercial banks in the district. This number has decreased to 1.104 on Dec. 31, a decrease of 18%. About two-thirds of this decrease is due to suspensions. While this is far from a perfect record, it. nevertheless, compares favorably with the record for the country as a whole. You may be interested in knowing the comparative records of member and non-member banks over this period of years. In the country as a whole the number of member banks shows a decrease of 34% compared with high figures for 1922, whereas the non-member banks show a decrease of 52%• In this district member banks show a decline from the high in 1928 of 14% and non-member commercial banks of 27%. As a consequence of these changes a larger proportion of the banks of the country now belong to the Federal Reserve System than at any previous time in our history. 40% of the commercial banks in the United States are members and 73% of the banks in this district. In terms of banking resources member banks show a far higher percentage. I have burdened you with these figures because the banking position seems to me one of the most important phases of the country's whole economic situation. The collapse of the banking system certainly contributed to the severe depth and duration of the depression. This crisis was in no small measure a banking crisis. The money which business uses in this country is bank credit and since 1929 the volume of bank credit has been reduced 30%. Disintegration of Banking System Stopped. The important thing to note to-day is that the disintegration of the banking system is stopped and the process of rebuilding has been well begun. The acute crisis was passed when the banks were reopened in March. But on Jan. 1 an almost equally important dead line was passed; a new confidence was established when a vast majority of the licensed banks was admitted to deposit insurance. All the member banks were admitted and all but very few of the non-member banks. The non-member banks have been admitted only after searching examination and after they have been put in solvent condition by the injection of new capital funds when necessary. Banks now operating under the deposit insurance plan may again feel easy as to the reasonable stability of their deposits and may again devote themselves to their normal banking business instead of concentrating all their attention upon a defense of their position. This means that banks may look about more freely for the profitable employment of their funds. The great deflation of credit was stopped after the banking holiday. We may now reasonably expect an expansion of bank credit. Nothing could be more important for the economic life of the nation. While we are all greatly relieved by the passing of this dead line, there are further jobs to be done. Before July 1 all member banks are being examined to see that they are put in thoroughly sound condition before entrance into the permanent insurance fund. You will be interested to know that a large number of the member banks in this district have already made application to sell preferred stock or capital notes to the Reconstruction Finance Corporation. No banker needs to fear that he will be lonely or conspicuous by taking this step. The essential basis for recovery in this country is that the banking system shall be not simply solvent, but in a position to expand credit to meet the needs of expanding business. Towards that end many,if not most, of the banks will find it advantageous to increase their capital. For the future there are other problems to consider. We must be sure that the banking difficulties of recent years do not recur. There is not time to-day for a detailed discussion of the causes of our troubles. Certainly one principal trouble in banking was that there were too many poor banks. In this respect we are suffering from the sins of a generation ago. One sin was to believe that almost any group of men with a little capital should be allowed to start a bank. The figures are startling. In 1900 we had less than 10,000 banks in this country. In the following decade that number was doubled, and from 1910 to 1920 it was again increased from about 20,000 to over 30,000. In those years of rising prices and great rural prosperity all too many banks were started by promoters to till a vacant store or to provide a job for somebody. Many such banks enjoyed brief seasons of prosperity, but in the long run banking is carried on most successfully by trained bankers. A large number of the banks which have failed in recent years were established in those two rash decades. The weakness in the banking system is revealed by the fact that the disintegration of the system began long before this depression. Even the prosperous years from 1922 to 1929 were marked by large numbers of bank closings. The depression put to the test a weakness which had been all Feb. 10 1934 too obvious. When the Federal Reserve System was established it was superimposed upon a poor banking system. The Reserve banks were given only limited supervisory powers, but the law still left responsibility for the supervision of the banks in the hands of the Comptroller of the Currency for National banks and 48 State Supervisors for State banks. Twothirds of the banks remained outside the system. The depression has at last brought these weaknesses vividly before the public consciousness. We have made great progress in cleaning up the mess. Many weak banks have been wiped out as well as some good banks. Those remaining have been or are la,ing strengthened. Beyond this, we need, as far as banking organization is concerned: 1. Assurance against starting too many weak banks in the future. 2. More adequate supervision—not a present problem in this State, but Important in many. 3. Sound banking service in communities now without banks. Without attempting to discuss these three points at length, I should like to say again what representatives of this bank and of the Federal Reserve System have said a number of tim s in the past, that in the long run we can best avoid too many and too poor banks,and can get better supervision, by a unification of our banking system. On the third point I believe the most practicable means for supplying banking service to areas which have been denuded of banks is a reasonable extension of branch banking. Perhaps even more important, however, than form of organization is continued unremitting attention to quality of management, and if one were asked to name the most important qualification for management it would. I believe, be concentration on the banking business. The experience of recent years has pretty conclusively demonstrated that bankers should be bankers rathm. than speculators, security salesmen, or real estate operators. The Banking Act of 1933 includes a valuable section which places restraint upon the borrowing of money by bank officers. It's a good rule and if it had been generally in practice would have saved the banking profession from much odium. Incidentally, we have had a rule like that for many years in the Federal Reserve Bank of New York. Money Market and Treasury Financing—Excess Reserres and Problem of Credit Control. Turning to a quite different aspect of the banking situation, let me say a word about the money market and Treasury financing. The reserve position of the banks of the country is now stronger than for many months. Indebtedness at the Federal Reserve banks in all districts is less than $100,000,000. the smallest figure since 1917. In addition, member banks now hold excess reserves, over and beyond the legal requirements, larger than ever before. These excess reserves now total nearly a billion dollars, and are more than 50% above legal requirements. On these reserves a very large expansion of credit could be built before there arose any need for rediscounting at the Reserve banks or liquidating assets. Recent tendencies for gold to move to this country and for currency to return from hoarding have all been towards an increase rather than a decrease in these reserves. In fact, the prospect is for such an ample supply of funds that eventually we may face a difficult problem of credit control. There are thus two important features of strength in the banking system. First, the confidence of depositors in the banks has been restored with their entry into the deposit insurance fund, and second, the bank reserve position is tremendously strong. The great deflation of banking and credit has been stopped and we are ready to move forward. The most important task that confronts the banks immediately is that of financing a very large Federal budget. This task will fall primarily upon the banks. Only so will these large expenditures result in the expansion of credit which is needed to stimulate greater business activity. Broadly speaking, the banks are in better position to carry through this undertaking than are individual investors, whose income and resources have been so greatly reduced. The Treasury has indicated its intention of following traditional methods of financing and selling securities of a maturity and yield which will be well adapted to toe needs of the banks. In view of the strength in the banking position the present financing program appears to be well within the capacity of the banks. It is a large order but it can b. filled without interh ring with the power of the banks to serve their regular customers. This whole program has been greatly aided by the restoration of the primary essentials of the gold standard. Bank Credit to Customers. Still another phase of the banking situation I should like to mention briefly. Every few weeks some one makes the accusation that the banks have been niggardly in extending credit to their customers. One of the operations of this bank has provided some test of the extent to which good loans are being made or refused by the banks in this locality. In the middle of 1932 the Federal Reserve Act was amended to give the Reserve banks power in unusual and exigent circumstances to make loans to individuals under certain conditions as to eligibility of the paper and the security for it. and provided the borrower was unable to secure accommodation from a commercial bank. Operating under this law, we made every endeavor to extend credit wherever it could be done sa.ely and in accordance with the law. From the middle of 1932, when this law became effective, until the end of 1933 we received 1,286 applications for loans. The first examination disclosed that the great majority of these applications were for personal loans or for mortgage loans or funds for other capital purposes, and were not in any sense snort time commercial loans as required by the law. We fOund that only 250 of the applications had sufficient merit to call for detailed investigation. These 250 selected applications involved a sum of only $9,525,000. After a thorough investigation we decided we could properly run the risk of making loans to 14 borrowers involving a total commitment of 51,417,000, of which 5806,000 was actually borrowed. Not quite half of this amount has been paid off. In our endeavor to make every loan possible under these emergency provisions, we made loans to two concerns which have since gone into receivership. It seems to us a reasonable deduction from this experience that generally speaking eligible borrowers entitled to bank credit are being provided for by the commercial banks. Activities of Federal Reserve Bank in Past Year. Before I close I wish that I could give you some picture of the activities of this Bank during the past year, At the time of the banking holiday we turned our medical department into a dormitory where the officers and a number of the staff of the bank took the few hours sleep we were able to get, and for many days at a time some of us did not leave the Bank. During the holiday we faced the problem of reviewing the position of the member banks to determine what ones could be recommended for immediate licensing. In succeeding months we have given what aid we could in the reopening of those banks which were not immediately licensed. Mr. 8. G. H. Turner of Elmira and Mr.B.P.Turnbull of Summit joined our staff for a number of weeks to assist on this problem. To aid in this work we doubled our staff of examiners and have lent a number of people) to the Federal Deposit Insurance Corporation. At all times we have worked in close co-operation with the State and National supervisors who have carried through most effectively and devotedly an enormous volume of difficult and detailed work. One division of our staff has handled the mechanical work for the Reconstruction Finance Corporation, receiving all collateral and making all disbursements. We have handled here over $1,000,000,000 of RFC loans. In another field, we organized for the Secretary of the Treasury an office for foreign exchange control, being aided in this undertaking by Mr. Fred I. Kent who brought to this service his unusual experience and capacities. Later we undertook operations for the Treasury and RFC in the purchase of gold. During the year we have constantly advised with the Treasury on the large program of Government financing, approximately one half of which has been carried through in this district. As fiscal agent we have served as banker for all Government emergency financial organizations. In addition all our usual operations were greatly affected both in volume and character by the year's extraordinary events. One final word I should like to say is that in all of these undertakings we have acted as a public institution. It is in some sense misleading to refer to the Federal Reserve banks as private banks. Our stock is owned by the member banks of the district, but we are not private in the sense of operating for a profit or for private advantage. Our stockholders are limited to a 6% dividend and have no control over the operations of the bank beyond the election of directors. While member banks, well represented here te-day, elect six of our nine directors, I am sure you will agree that when you select these men you have in mind their capacity to serve the public Interest, with the knowledge that the interests of the banks is best served when the object of every policy decision is the prosperity of business and agriculture. A majority of the directors are business men, of the highest type to be found in the several reserve districts. Three directors are appointed by the Federal Reserve Board. And they also represent the public interest rather than the interest of the Government in any technical sense. In all our operations we are under supervision of a government body, but a non-political body, the Federal Reserve Board. In terms of objectives and point of view we are in every sense a public institution. The principle of a bank of issue is that there should be some organization not directly under political control nor yet under the control of the commercial banks, which from this independent vantage ground should serve the public interest with respect to the management of money and credit. This is the aim of the Federal Reserve System, and the aim of this Bank. Rediscount Rates Reduced by Federal Reserve Banks of Cleveland, Boston, St. Louis, Dallas, Richmond and Kansas City Following Action by New York Reserve Bank. Following the action of the Federal Reserve Bank of New York, in lowering its rediscount rate from 2% to 1 % effective Feb. 2, six of the other Federal Reserve Banks have put into effect reduced rates. These changes are indicated as follows: Bank— Cleveland Boston St. Louis Dallas Richmond Kansas City 969 Financial Chronicle Volume 138 Reduced from 23 % 2,ii% 3% 355% 33. % 33i% to 2% 2% % 3% 3% 3% Effective. Feb. 3 Feb. 8 Feb. 8 Feb. 8 Feb. 9 Feb. 9 The reduction from 2% to 1 % in the rate of the Federal Reserve Bank of New York was noted in our issue of Feb. 3, Page 784. Treasury Gets $2,805,512,061 by Devaluation—Buys $177,884,084 More Gold for $132,000,000. From Washington the "Wall Street Journal" of Feb. 3 reported the following: Since the formal devaluation of the dollar by President Roosevelt it has been consistently strong in foreign exchange markets against other currencies. This strength of the dollar despite its official devaluation was attributed by foreign exchange experts to a return "flight of capital" from Europe to the United States, including repatriation of much American capital being sent here from abroad because of increased confidence in the dollar, now that it has been at least temporarily stabilized. We quote in part from a Washington dispatch of Feb. 1 to the New York "Times"regarding the plans of the Treasury in relation to its stabilization fund: Confidence was expressed by officials that the price of gold in the world markets would quickly adjust itself to the American fixed price of $35 an ounce. The attitude that Great Britain takes toward thejlatest move by this country was awaited with intense interest. The best information obtainable to-day was that no negotiations, official or unofficial, have been undertaken as yet with the British. Discussing the operations under the equalization fund to-day, Mr. Morgenthau said they would be cloaked in the closest secrecy and that he would be forced hereafter to decline to answer any questions on the subject. The group of experts, he explained, would be "flexible," different specialists being called in from time to time. He would not reveal the identity of those who might be selected. In the operations up to this time it was indicated the advice has been given chiefly by Governor Black of the Federal Reserve Board; Governor George L. Harrison of the Federal Reserve Bank of New York; Herman Oliphant, chief counsel to the Secretary of the Treasury: Professor George F. Warren of Cornell, and Professor James H. Rogers of Yale. It is expected that they also will be consulted frequently in the future. "1934 Model" Gold Bullion Standard. Mr. Morgenthau, when asked if the United States had actually gone on the gold bullion standard as a result of the steps taken to make possible the withdrawal of the metal for the settlement of international balances, replied In the affirmative. When attention was called to the fact that no provision has been made for the redemption of currency in gold, he smiled and replied: "You might call this the 1934 model bullion gold standard." "Streamlined?" he was asked. "And airflow," he replied with a laugh. Some one interposed that "knee action" should be included, and the Secretary smiled acquiescence. Early reports to-day were to the effect that doubt had been expressed in some French circles that this Government was prepared to buy all gold offered and inquiries were made by banks in New York. Statement on Gold Buying. As a result, the following official statement emphasizing and amplifying the announcement to that effect made yesterday, was issued by the Treasury: "Amplifying his statement issued yesterday (Wednesday, Jan. 31) with respect to the purchase of imported gold by the Federal Reserve Bank as fiscal agent of the United States and his regulations of the same date, with respect to purchases of imported gold by the mints, the Secretary of the Treasury to-day made public the following announcement: "Beginning Thursday, Feb. 1 1934 and until further notice, I will buy imported fine gold bars through the Federal Reserve Bank of New York as fiscal agent of the United States Mint or the United States Assay Offices at New York or Seattle, both at the following rate and upon the following terms and conditions deemed by me most advantageous to the public Interest: "Purchases will be made at the rate of $35 per fine troy ounce, less the usual mint charges and lees one-quarter of 1% for handling charges, all subject to compliance with the regulations issued under the Gold Reserve Act of 1934." It was explained that the phrase "fine gold bars," means gold bars of a fineness of .899 or finer, such as are ordinarily used in the settlement of international balances, carrying a recognized stamp indicating the weight and degree of fineness. The mints will purchase imported gold in other condition, such as unrefined gold and gold in other forms than in stamped bars, along with the domestic gold specified in Section 35 of the regulations Issued yesterday. Regulations as to hoarded gold are unchanged. The increment to the U. S. Treasury resulting from reduction in the weight of gold in the dollar is $2,805,512,061, the daily Treasury statement of Feb. I showed. On Jan. 31 the value of Treasury gold stocks was given as $4,034,867,781 and on Feb. 1 the value was $7.018,263,926. The gain was made up of $2,805,512,061 profit and $177,884,084 additional gold, most of which represented the Reconstruction Finance Corporation's holdings taken by In a dispatch from Washington Feb. 5 to the New York the Treasury. This additional gold was purchased at a total price of "Herald Tribune" it was stated in part: about $132,000,000, so the dollar profit to the Government on the RFC Meanwhile, on the gold purchase program the Treasury marked time transactions was about $46,000,000. to-day, keeping an open door to all foreign gold offered but continuing to The dollar devaluation transaction completely wiped out the deficit hold in abeyance the powers of the $2,000.000,000 stabilization fund. . . . for the fiscal year to date, which on Jan. 31 stood at $1,922,598,173, and , With regard to the present gold program Mr. Morgenthau declared that resulted in a surplus of $973,716,937 as of Feb. 1. purchases would be made direct from the Treasury's general fund. Whether the $2,000,000,000 stabilization fund would be removed from the general Treasury to Employ Ten Experts in Operations with fund, where it continued to be lumped in the Treasury statement to-day, $2,000,000,000 Stabilization Fund-- Heavy Gold the Secretary was not sure. Presumably, if it remained there, expenditures the stablization fund would have to show up as expenditures on the Shipments from Europe to United States Reported from daily statement. There is no listing for that purpose at present, and any Repatriation of American Capital Sends Dollar such bookkeeping would deprive the fund of its desired secrecy. Mr. Morgenthau agreed that the stablization fund could be taken away Higher—Secretary Morgenthau Issues Suppledeposited with the Federal Reserve Bank of New York to the account mentary Statement on Gold Buying Through and of the Treasury. The Secretary again said that he could answer no quesFederal Reserve Bank of New York. tions with respect to the operations of the fund. Ten experts will be employed by the Treasury to assist in operations conducted with the new $2,000,000,000 stabilization fund, it was indicated Feb. 1 when the Ways and Means Committee of the House of Representatives met in executive session to hear Secretary of the Treasury Morgenthau request authority to retain specialists and have them given the power to perform the functions of any Treasury official. The Committee agreed to insert in the pending tax bill a provision for ten experts to be paid not more than $10,000 each annually. It was also decided that the Secretary should be granted authority to define the scope of their duties within the limitations of the powers given by Congress to the Secretary himself. Many reports came from abroad this week of the shipments of large amounts of gold to the United States as a result of the establishment of a purchase price of $35 a fine ounce. Government Securities of $7,900,000 Purchased by Treasury During Week of Feb. 5. Treasury purchases of Government securities for investment account from Jan. 30 to Feb. 5 totaled $7,900,000, Henry Morgenthau Jr., Secretary of the Treasury, reported on Feb. 5. Approximately two-thirds of the purchases were for the account of the Federal Deposit Insurance Corporation. Since the inception of the Treasury's support to the Government bond market more than two months ago, reference to which was made in our issue of Nov. 25 1933, Page 3769, the weekly purchases have been as follows: Nov.25 1933 Dec. 2 1933 Dec. 9 1933 Dec. 16 1933 Dee. 23 1933 Dec. 30 1933 88,748,000 2,545,000 7,079,000 16,600,000 16,510,000 11,950.000 Jan 6 1934 Jan. 13 1934 Jan. 20 1934 Jan. 27 1934 Feb. 5 1934 844,713,000 33,868,000 17,032,000 2,800,000 7,900,000 970 Financial Chronicle Withdrawal of Treasury Requirement that Those Turning in Gold File Names and Addresses. On Feb. 7 the Treasury Department announced that until further notice it would rescind the requirement that persons turning in hoarded gold must leave their names and an explanation why the metal was not previously surrendered. Associated Press advices Feb. 7 from Washington said: This order had been in effect several weeks. It was understood the requirement tended to frighten some small gold holders and discourage them from turning in their gold. Until further notice the gold will be received by Federal Reserve banks and no questions asked. The following is the circular issued in the matter by the Federal Reserve Bank of New York: Further Information from the Secretary cf the Treasury Relative to Names and Addresses cf Persons Delivering Gad Coin. Gold Bullion and Geld Certificates. [Circular No. 1350—Feb. 7 1934.] To all Banking Institutions in the Second Federal Reserve District: In our circular No. 1348, dated Feb.3 1934, we stated that in a telegram received from the Secretary of the Treasury on Feb. 1 1934 we were informed that the proclamation signed Jan. 31 1934 by the President of the United States does not alter the instructions as to the amount to be paid or other instructions of the Secretary of the Treasury of Jan. 17 1934 as transmitted to you in our circular No. 1337, relating to gold coin, gold bullion and gold certificates delivered after Jan. 17 1934, and as transmitted to member banks in our circular No. 1341. relative to mutilated coin. The telegram of Feb. 1 1934 from the Secretary of the Treasury requested us to "make a record of the name and address of each person delivering gold coin, gold bullion and gold certificates hereafter and of the amount delivered and also obtain from such person a signed written statement giving the reasons why such gold coin, gold bullion or gold certificates were not delivered heretofore." We quote below from a telegram received to-day from the Secretary of the Treasury: "Until further instructions from me it will not be necessary to make a record of the name and address of each person delivering gold coin, gold bullion and gold certificates hereafter or to obtain from said person a signed written statement giving the reasons why such gold coin, &c., was not delivered heretofore." All gold coin, not obviously mutilated, or below the weight of tolerance allowed by law, and all gold bullion and gold certificates which you may receive should be forwarded to this bank or its branch at Buffalo, but the signed statement and record of names and addresses requested in our circular No. 1348, will not until further instructions be required. GEORGE L. HARRISON. Governor.* Tenders Totaling $547,285,000 Received to Two Series of Treasury Bills Offered to Total Amount of $175,000,000 or Thereabouts—$175,571,000 Accepted —Bids of $125,493,000 Accepted for 91-Day Bills at Average Rate of 0.66% and $50,078,000 for 182-Day Bills at Rate of 0.94%—Both Issues Dated Feb. 7 1934. Tenders to the two series of Treasury bills which were offered at the Federal Reserve banks and the branches thereof up to 2 p.m. Eastern Standard Time, Feb. 5, to the amount of $175,000,000 or thereabouts, totaled $547,285,000, Henry Morgenthau Jr., Secretary of the Treasury,announced on Feb. 5. Of this amount, the Secretary said, bids of $175,571,000 were accepted. The announcement of the offering of the bills was noted in these columns of Feb. 3, page 785. The two series are dated Feb. 7 1934, one being 91-day bills, offered to the amount of $125,000,000 (or thereabouts), maturing May 9 1934, and the other 182-day bills offered to the amount of $50,000,000 (or thereabouts), maturing Aug.8 1934. The bids received to the 91-day bills amounted to $302,858,000 and to the 182-day bills $244,427,000. The' accepted bids in the case of the 91-day bills were $125,493,000 and $50,078,000 in the case of the 182-day bills. For the 91-day bills the average rate is about 0.66% per annum, on a bank discount basis. The 182-day bills sold at an average rate of about 0.94%. These compare with previous rates of 0.72% (bills dated Jan. 31), 0.67% (bills dated Jan. 24 and Jan. 17) and 0.62% (bills dated Jan. 10 and Jan. 3). With regard to the offering of $125,000,000 or thereabouts of 91-day bills, Secretary Morgenthau said on Feb. 5: Feb. 10 1934 New Offering of Two Issues of Treasury Bills to Total Amount of $150,000,000 or Thereabouts—To Be Dated Feb. 14 1934—Each Series Offered in Amount of $75,000,000 or Thereabouts, One Maturing in 91 Days and Other in 182 Days. Tenders were received at the Federal Reserve banks and the branches thereof up to 2 p.m. Eastern Standard Time yesterday (Feb. 9) to two issues of Treasury bills, offered for the aggregate amount of $150,000,000 or thereabouts. Both series, which were sold on a discount basis to the highest bidders, will be dated Feb. 14 1934. One series is 91-day bills, offered to the amount of $75,000,000 or thereabouts, maturing May 16 1934, and the other 182-day bills, offered to the amount of $75,000,000 or thereabouts, maturing Aug. 15 1934. The face amount of the bills of each series will be payable without interest on their respective maturity dates. On Feb. 14 Treasury bills to the amount of $75,295,000 will mature. In inviting the tenders, Henry Morgenthau Jr., Secretary of the Treasury, said in part on Feb. 6: The bills will be issued in bearer form only, and in amounts or denominations of $1,000, $10,000, $100,000, $500,000 and $1,000,000 (maturity value). No tender for an amount less than $1,000 will be considered. Each tender must ba in multiples of $1,000. The price offered must be expressed on the basis of 100, with not more than three decimal places, e. g.. 99.125. Fractions must not be used. Tenders will be accepted without cash deposit from incorporated banks and trust companies and from responsible and recognized dealers in investment securities. Tenders from others must be accompanied by a deposit of 10% of the face amount of Treasury hills applied for, unless the tenders are accompanied by an express guaranty of payment by an Incorporated bank or trust company. Immediately after the closing hour for receipt of tenders on Feb.9 1934, all tenders received at the Federal Reserve banks or branches thereof up to the closing hour will be opened and public announcement of the acceptable prices for each series will follow as soon as possible tnereafter, probably on the following morning. The Secretary of the Treasury expressly reserves the right to reject any or all tenders or parts of tenders. and to allot less than the amount applied for, and his action in any such respect shall be final. Any tender which does not specifically refer to a particular series will be subject to rejection. Those submitting tenders will be advised of the acceptance or rejection thereof. Payment at the price offered for Treasury bills allotted must be made at the Federal Reserve banks in cash or other immediately available funds on Feb. 14 1934, provided, however, any qualified depositary will be permitted to make Payment by credit for Treasury bills maturing Aug. 15 1934, allotted to it for Itself and its customers up to any amount for which it shall be qualified in excess of existing deposits when so notified by the Federal Reserve Bank of Its district. The Treasury bills will be exempt, as to principal and interest, and any gain from the sale or other disposition thereof will also be exempt,from all taxation, except estate and inheritance taxes. No loss from the sale or other disposition of the Treasury bills shall be allowed as a deduction. or otherwise recognized, for the purposes of any tax now or hereafter imposed by the United States or any of its possessions. Mr. Morgenthau announced Friday night that the tenders for the two series of Treasury bills totaled $408,404,000, of which $150,052,000 was accepted. For the 91-day Treasury bill issue, maturing May 16 1934, which was for $75,000,000, or thereabouts, the total amount applied for was $230,078,000, of which $75,008,000 was accepted. The accepted bids ranged in price from 90.850, equivalent to a rate of about 0.59% per annum, to 99.826, equivalent to a rate of about 0.69% per annum, on a bank discount basis. Only part of the amount bid for at the latter price was accepted. The average price of Treasury bills of this series to be issued is 99.833, and the average rate is about 0.66% per annum on a bank discount basis. For the 182-day Treasury bill issue, maturing Aug. 15 1934, which was for $75,000,000, or thereabouts, the total amount applied for was $178,326,000, of which $75,044,000 was accepted. The accepted bills ranged in price from 99.723, equivalent to a rate of about 0.55% per annum, to 99.469, equivalent to a rate of about 1.05% per annum, on a bank discount basis. Only part of the amount bid for at the latter price was accepted. The average price of Treasury bills of this series to be issued is 99.501 and the average rate is about 0.99% per annum on a bank discount basis. As to the offering of $50,000,000 or thereabouts of 182-day bills, the Secretary announced: Subscriptions and Allotments in Case of Recent Offering of $1,000,000,000 Treasury Notes and Certificates of Indebtedness—Total Subscriptions $4,784,776,700 — Allotments $1,052,850,100 — Subscriptions of $3,424,212,200 Received to $500,000,000 or Thereabouts of 2 Notes Due March 15 1935-$528,101,600 Allotted —$1,360,564,500 Subscribed to $500,000,000 or Thereabouts of 13/2% Certificates Maturing Sept. 15 1934, of Which $524,748,500 Has Been Allotted. For 182-day Treasury bills maturing Aug. 8, for E50.000,000 or thereabouts, the total applied for was $244,427,000. of which $50,078,000 was accepted. The accepted bids ranged in price from 99.650, equivalent to a rate of about 0.69% per annum, to 99.510, equivalent to a rate of about 0.97% per annum on a bank discount basis. Only part of the amount bid for at the latter price was accepted. The average price of Treasury bills of this series to be issued is 99.524, and the average rate is about 0.94% per annum on a bank discount basis. On Feb. 2 Henry Morgenthau, Jr., Secretary of the Treasury, announced the final subscription and allotment figures with respect to the combined offering of $500,000,000 or thereabouts of 23/2% Treasury notes (Series 0-1935) dated Jan. 29 1934, and $500,000,000 or thereabouts of 1 Treasury certificates of indebtedness (Series TS-1934) For the 91-day Treasury bills maturing May 9 for $125.000,000 or thereshouts, the total appiied for was $302,858,000, of which $125,493.000 was accepted. The accepted bids ranged in price from 99.900, equivalent to a rate of about 0.40% per annum. to 99.826, equivalent to a rate of about 0.69% per annum,on a bank discount basis. Only part of the amount bid for at the latter price was accepted. The average price of Treasury bills of this series to be Issued is 99.834 and the average rate Is about 0.66% per annum on a bank discount basis. Financial Chronicle Volume 138 also dated Jan. 29. The subscriptions to the combined offerings totaled $4,784,776,700, of which $1,052,850,100 have been allotted. The subscriptions to the offering of $500,000,000 (or thereabouts) of Treasury notes amounted to $3,424,212,200. Of this amount, the Secretary said, $528,101,600 has been allotted. The notes are for 13M months, maturing on March 15 1935. They bear interest from Jan. 29 at the rate of 2M% per annum, payable on a semi-annual basis. The certificates of indebtedness, which bear interest from Jan. 29 at the rate of 13/% per annum, payable on a semiannual basis, are for 73.. months, due Sept. 15 1934. The subscriptions to this issue totaled $1,360,564,500 and the allotments $524,748,500. The combined offering (reference to which was made in our issue of Jan. 27, page 603) was announced on Jin. 23 by Secretary Morgenthau. The subscription books were opened on Jan. 24 and were closed the same day, following the heavy over-subscription. The subscriptions and allotments, as announced by Secretary Morgenthau on Feb. 2, were divided among the Federal Reserve districts and the Treasury as follows: Treasury Notes, Series C-1935. Treasury Certificates of Indebtedness, Series TS-1934. Total Total Total Total Subscriptions Subscriptions Subscriptions Subscriptions Allotted. Received. Recetced. Allotted. Boston New York Philadelphia Cleveland Richmond Atlanta Chicago St. Louis Minneapolis Kansas City Dallas San Francisco Treasury Total 8224,601,500 $36,835,390 $111,372,500 $43,015,500 1,674,552,000 243,998,000 699,703,000 266.929,500 28,924,000 11,227,000 199,640,000 29,672,700 91,266,000 35,085,500 173,848,700 26.627,600 38,360.000 14,714,500 96,177.400 15,145,400 62,410,000 23,830,500 140,924,200 22.271,800 114,819,000 44,970,000 431,744,300 69,263,500 38,777,000 15,356,000 58,202,000 11,214,100 2,616.000 4,245,500 8,327,700 41,460,700 33,254,000 13,420,500 85,798,500 le,976,200 33,392,500 13,877.000 96,384,400 18,081,300 103.741.000 39,592,500 199,974,500 30,608,000 114,000 300.000 130,000 904,000 $3,424,212,200 5528,101.600 $1,360,564,500 8524.748.500 Silver Data Called for by Treasury Department. Indicating that the Treasury Department has been placed in possession of the names and addresses of owners of silver by Stock Exchange firms and safe deposit companies from which this information was solicited the New York "Journal of Commerce" of Feb. 9 added: The required data was turned over to the Treasury without the issuance of subpoenas. Custodians of silver, however, demanded that the request be made in writing. The information is given as of Jan. 31 and gives for that date positions in spot silver and in forward commitments, Certificates issued to owners by the custodians are in bearer form so that actual ownership at a given date is difficult to trace. The following is the letter sent by the Treasury to comma storing silver: "In accordance with the instructions of the Secretary of the Treasury, contained in a letter of credentials presented to you this day, you are hereby instructed to furnish me with the following information from your records, as of Jan. 31 1934: Os "The spot silver positions and futures commitments as to long or short, together with a list of names and addresses, showing for whose accounts these positions and contracts are held." 971 total so far for the February delivery is 525,000 ounces. Sales of silver futures yesterday amounted to 5,700,000 ounces. Treasury Department Undertakes Inquiry into Silver Holdings in United States—London Agreement and Limiting of Sales by India and Spain. The decision of the Treasury Department to inquire into silver holdings in the United States was made known on Feb. 5 by Secretary Morgenthau. From a Washington dispatch on that date to the New York "Herald Tribune" we take the following: The investigation is expected to show the amount of silver in the United States from whatever source derived, the speculative accounts which are understood to have been particularly active in the metal, and the probable distribution of profits in case of a rise in the silver market. Treasury May Take It Over. Mr. Morgenthau made no comment on reports which flew about the Capitol to the effect that revaluation of the silver dollar was in the offing This action was authorized in the new Gold Reserve Act under an amendment which was not disapproved by the Administration. The author of the amendment, Senator Rey Pitman (Dem.), of Nevada, was a visitor at the Treasury to-day, but declared that his call was not in connection with the silver investigation. The inquiry, it was pointed out at the Capitol. might possibly be used to stay the hand of too ardent silver agitators if the supply of silver should be found concentrated in the hands of a few persons. It was suggested also that the investigation might be used to guide the Treasury on an additional silver program of its own and put it in a position to prevent the profits from going to speculators. . . . "It is true that we have asked for the names of all holders of silver, speculative silver," Secretary Morgenthau said. Treasury Experts Busy Here. Treasury agents had been sent to New York, the Secretary continued. to collect facts and names from the Silver Exchange and regular silver dealers. Silver was traded in lots of 25,000 ounces or more, he added. "It would be helpful to know how much silver there is and who owns it." Mr. Morgenthau said. He did not know yet whether the information acquired on silver would be made public. Asked about the relationship of silver prices to gold, he pointed out that since Oct. 21, when the gold purchase program was instituted, the price of gold had gone up 21%, and the price of silver, meaning the New York open market price, had risen 20%. He did not hazard a reason for the relationship. In silver coinage, including subsidiary coinage, there is about $800.000,000 outstanding. There are about 520,000,000 silver dollars in the Treasury, with silver certificates outstanding against most of them. The Treasury also has $36,000,000 of silver bullion. Silver Price Problematical. Devaluation of the silver dollar to the extent of the gold dollar devaluation would bring the Government price on silver to around $1.08 an ounce if the Treasury continued to take half of the offered silver for seigniorage. I it did not charge seigniorage and the old ratio with gold were preserved in a revaluation the price would be about $2.17. In addition to revaluation, the Pittman amendment authorizes the Treasury to issue silver certificates against silver bullion or silver dollars in the Treasury against which certificates are not outstanding. This would involve only about $50,000,000. The President also is authorized to charge a different seigniorage for foreign-Wine-- silver as compare with the charges on coinage of domestic silver. The weight of silver in subsidiary coinage could also be changed to maintain parity with a changed silver dollar. In its Feb. 9 issue the same paper said: Agents of the Treasury who have been collecting data concerning the holdings of silver and silver futures of banks, safe-deposit companies and Exchange firms and their customers have succeeded in obtaining the information after the original delay. They were armed with subpoenas yesterday. for use if necessary, but as far as could be learned, no one questioned the authority of the Government to require the information. The agents presented a letter from the Treasury which requested each firm to submit the spot silver positions and future commitments, long or short, for each customer, together with the customers' names and addresses. The information was for the positions as of Jan. 31. Elmer L. hey, chief of the intelligence unit of the Treasury Department was one of the investigators. 117,554.86 Ounces of Silver Purchased During Week of Feb. 2—Total Purchases 214,656.86 Ounces. Announcement was made Feb.5 by Secretary of the TreasA Washington dispatch Feb. 6 to the New York "Journal ury Henry Morgenthau, Jr., that Treasury purchases of of Commerce" said in part: silver during the week of Feb. 2, under the President's President Seeking Data. proclamation of Dec. 21 1933 referred to in our issue of Through sources close to the White House it developed the President himDec. 23, page 4440), totaled 117,554.86 ounces. Of this is desirous of knowing where the interest is in silver, both bullion amount, 117,383 ounces were received at the Denver mint self and futures. and 171.86 ounces at the San Franciso mint. During the Officials want to know more about what is going on in respect to silver. of legislators voted on the Pittman previous week ended Jan. 26 the purchases amounted to For instance, it is asserted a number amendment for parity devaluation of the silver dollar, without knowing its 94,921. Reference to this was made in our columns of Feb.3, effect would be to give a price of $1.09 compared with the present 64c. page 787. The total purchases up to and including Feb. 2 under the Presidential proclamation. Further, the so-called London silver agreement has been analyzed and to totaled 214,656.86 ounces. The purchases and the distribu- some it appears that while domestic silver producers stood to gain, perhaps tion to the different United States mints are as follows: the rest of the citizens might not benefit to the same extent. Week Ended— Jan. 5 1934___ Jan. 12 1934_ _ Jan. 19 1934____ Jan.26 1924_ _ __ Feb. 2 1934_ ___ Total _ Received at Amount Received at Purchased San Fran. Mint newer Mint (In Ounces). (In Ounces). (In Ounces). 392.00 Received at Phila. Mint (In Ounces). 765 547 477 1,157.00 547.00 477.00 94,921.00 117,554.86 .94,167.00 171.88 117,383 214,656.86 94,730.86 119.172 Total Silver Stored in Licensed Depositaries of New York Commodity Exchange. From the Feb. 6 issue of the New York "Journal of Commerce" we take the following: The Commodity Exchange reported yesterday that the total amount of silver that is stored in licensed depositaries of the exchange amounted to 108,512,762 ounces as of Saturday, Feb. 3. During yesterday's trading, 25,000 ounces were tendered for delivery during the current month. The For instance, it is said, a study of the agreement reveals the fact that whereas the Indian Government has agreed to limit its sales to 35,000.000 ounces per annum (average) for a period of four years, plus such quantities as may be taken by war debtor nations for use as token payments to the United States, it made no commitment as to holdings by individuals. It is further remarked that 35,000,000 ounces was the maximum that country has over been able to dispose of in a single year. Spain to Limit Sales. Spain, heretofore not a quantity seller of silver, agreed to limit sales to 5,000.000 ounces annually. The Chinese Government also was in the agreement, but it is stated that Government had none to sell and it did not undertake to prohibit sales by its nationals. This plan, engineered by Senator Pittman (Dean., Nev.), member of the American delegation to the London Economic Conference, was that the producing nations—United States, Mexico, Canada, Peru, Australia and Bolivia—should take off the market amounts of silver equal to those withheld from sale by the other countries named. Whereas, it is contended that in proportion to our production the United States should have been called upon to take but 15% of the total, the President has agreed to purchase for a period of four years domestic produc- 972 Financial Chronicle tion-at least about 24,000,000 ounces annually-not at the then present market price, but at $1.29 per ounce, less 50% for seigniorage. If American purchases can be expanded to the maximum required, presumably through the purchase of surplus United States stocks, it would not be necessary for the other producing countries to absorb any of their own domestic silver. Before the deal was consummated, Bolivia dropped out of the negotiations and so is not obligated at all. Cut in Weight of Silver Dollar Urged by Senators King and Wheeler-Advocate Move to Assist Mining States and Raise Prices-Speculation Investigated -Thousands of Ounces Purchased During Year. A reduction in the weight of the silver dollar to increase the price of the white metal was predicted to-day by members of Congress from silver-producing states as the result of the Treasury investigation of speculative activities in the silver market. An Associated Press dispatch Feb. 6 to the New York "Herald Tribune" in indicating this added in part: The process, they said, might follow the same course as the recent devaluation of the dollar in gold, with the government first taking title to all stocks of monetary silver so that it, and not the present large speculative interests, might receive the profit accruing. Senator William H. King, Democrat, of Utah, said to-day that he and others in the silver bloc were arranging for a meeting of all members of Senate and House from silver states for a discussion of recent developments and another effort to unite upon a program. With Senator Burton K. Wheeler. Democrat, of Montana, Senator King plans to call to-morrow on Henry Morgenthau jr., Secretary of the Treasury, and go over the situation with him. Remonelization Is Favored. These two Senators favor remonetization of silver and free coinage at the ratio of 16 to 1 to gold, but they made it plain to-day that if President Roosevelt had some step in mind that would be helpful they would go along with him. The Pittman amendment gives Mr. Roosevelt authority to cut the weight of the silver dollar in the same proportion as that of the gold dollar was reduced, 40.94%. Action to bring this about would reduce the statutory silver dollar from 371.25 grains of the metal to 219.27 grains. Theoretically, it would increase the present mint price of newly mined silver from 64H cents to $1.17 an ounce. Thousands of ounces of silver bought by speculators in the last year were believed to constitute the factor to which the Administration was giving most thought. Such silver now has a price ranging a little above 45 cents an ounce, a wide increase in recent months. If all silver should be given a statutory price equivalent to 40.94% cut in the silver content of the dollar, a vast profit would accrue to the speculators. Denver Mint Buys Silver Recovered from DumpsRegulations Changed to Allow Purchases at 643 , Cents. From Denver Feb. 7 a dispatch to the New York "Times" said: Government regulations for the purchase of silver at 6434 cents an ounce have been modified to allow the purchase at that price of silver recovered from old dumps, Mark Skinner, superintendent of the Denver Mint, announced to-day. The change is expected to be of great benefit to Colorado silver producers as large amounts of silver remain in abandoned dumps in this state. When President Roosevelt announced his intention to buy silver at 6434 cents an ounce, it was disclosed that tailings and silver in dumps were barred from receiving the new price, which covered only the newly mined silver. House Ways and Means Committee Completes Revised Income Tax Bill-Will Be Debated on Floor Next Week-Surtax Lowered in $8,000-$25,000 Class-Two-Cent Check Tax Eliminated-Three-Cent Postage Rate Retained-Estimated Bill Will Add $235,000,000 Annually to Revenue. Debate on the 1934 tax revision bill will begin in the House of Representatives early next week, it was announced Feb. 7 by Representative Doughton, Chairman of the House Ways And Means Committee, which has been holding a protracted series of hearings on the proposed measure, drafted to give the income tax laws their first complete revision in ten years. The Committee completed action on the bill Feb. 8 after writing into the measure a provision repealing the two-cent bank check tax, one of the "nuisance taxes"imposed in 1932. It is now proposed to repeal this tax Jan. 1 1935. An extra half-cent a gallon tax on imported crude oil, suggested by Secretary Ickes, was also eliminated by the Committee. Another decision by the Committee Feb.8 was its approval of a provision continuing for the next fiscal year the threecent first-class postage rate, but giving the President authority to lower the rate if he considers it advisable. The Committee adopted a provision to restore old rates on secondclass mail, effective July 11934, bringing the rates on this class of mail matter approximately two-thirds the rates fixed in the act of 1932. On Feb. 7 the Committee voted to revise its own tentative rates for the middle income surtax brackets, thus easing the tax burden on incomes between $8,000 and $25,000. The additional one-half cent a gallon tax on imported petroleum, adopted at this session, was discarded the following day (Feb. 8), as previously mentioned. It had originally been estimated that the bill would add $300,000,000 annually to the Federal Government's yield from taxes, but changes made by the Ways and Means Feb. 10 1934 Committee Feb. 8, including the elimination of the bank check tax, caused the Committee to revise its estimate downward to $235,000,000. Tke House Ways and Means Committee issued a table Feb. 7 illustrating the amount a married man with no dependents would be required to pay under the normal income and surtax rates proposed in the new bill. The normal rate is 4%. The surtax rates begin at 4% on incomes of $4,000, ranging upward to 59% on incomes of more than $1,000,000. The bill allows a credit of 10% on earned incomes up to $8,000. It permits a personal deduction of $2,500 for a married man with no dependents. The table prepared by the Committee, showing taxes under the present law and under the proposed measure, follows: -If All Earned IncomeNet Income- Present Law. Proposed. $3,000 $20 $8 3,500 40 26 4,000 44 60 4,500 62 80 5,000 100 80 6,000 140 116 7.000 210 172 8,000 248 300 9,000 390 328 10,000 408 480 12,000 680 583 14,000 778 900 16,000 1,140 993 18,000 1,228 1,400 1,680 20,000 1,498 2.520 25,000 2.348 3,480 30.000 3,378 40,000 5,743 5,800 8,600 50,000 8,633 11,900 60,000 12.003 20,000 80,000 20,258 30,100 100,000 30,358 500,000 263,708 263,600 571,100 1,000,000 571,158 All Dividends Present Law. Proposed. 0 0 o 0 0 0 0 $10 20 30 40 80 140 220 320 440 880 1,440 2,960 4,960 7,460 13,960 22,460 223,960 491,460 $20 60 100 140 235 350 485 640 830 1.480 2,310 4,275 6,765 9,735 17,190 26,490 243,840 532,290 o Late last week the Committee indicated that it was opposed to the adoption of any proposals for a manufacturers' excise levy,and Republican members of the House, meeting in caucus Feb. 7, decided they would make no attempt to attach a sales tax rider to the bill when it is debated on the floor, but would support it in its present form without material amendment. Representative Snell, the minority leader, made the announcement after the caucus meeting. Included in the bill when it was completed by the Committee was a tax of 5 cents per pound on coconut oil and sesame oil, despite opposition voiced by representatives of Philippine exporters. The vegetable oils at present enter the United States virtually duty free and compete directly with American lard, cottonseed oil, and other domestically produced vegetable and animal fats. The excise tax of five cents per pound will bring the total tax on a coconut oil imported from countries other than the Philippines to 7 cents per pound, including the present tariff, and to 8 cents per pound on sesame oil, including the tariff. We quote in part from a Washington dispatch of Feb. 7 to the New York "Times" regarding the changes made in the tax bill on that date: As the bill took form to-day, Representative Hill, chairman of the Ways and Means Subcommittee which worked all during the Summer and Fall recess on proposals to plug the "loopholes" in the income tax law, estimated that the changes agreed upon would add at least $300,000,000 annually to the yield from the income tax. "I think we have done a pretty good job of closing the loopholes," he said. "There are a lot of little pinholes we have not even tackled, and of course some of the excises voted by the committee should be left out of a tax bill. No "Outside" Influence. "But the tax lawyers who knew where to find the holes through which taxes were avoided in the present law will have to look for other cracks in the fence. And no outside tax lawyers have helped to write this bill, either. "The trouble heretofore has been that these people who later become interested in tax avoidance had too much influence on the text of our tax law." Mr. Hill said the bill probably would represent the most extensive overhauling of the revenue law since the income Tax Act came into being. Aside from the "loophole" plugging Provisions, the new bill provides a change in the income rate structure so as to make the burden lighter on Persons with income from salaries and business enterprise and heavier on those with income from accumulated wealth. The provisions agreed upon in Committee carry a single normal rate on personal income of 4% and a graduated surtax schedule beginning at 4% on net income above $4,000 and stepping upward to 59% on that part of net income above $1,000,000. To-day's decision to readjust the surtax brackets so as to make the burden lighter on persons with incomes between $8,000 and $25,000 a year was not calculated to change materially the estimate or additional yield front the new rate structure as a whole. Mr. Hill estimated that the adjustments made to-day would add about $300.000,000 annually to the revenues from income taxes. The Committee's adoption was tentative of the oil proposals of Secretary Ickes, which placed the additional import tax of one-half cent a gallon on imported petroleum and imposed renalties for the non-reporting of incbme from "hot oil," or that illegally produced. 1111 The latter provides that a civil penalty of $500, PIUS $50 a day for the period of non-reporting, be assessed against all persons not reporting income from oil produced or refined in violation of Federal and State laws or codes applicable to the industry. It further provides rewards of 50% of the penalties so collected to private citizens who "turn up" the outlaw operators. Early in the day the Committee voted by 15 to 9 an attempt to strike out the 5-cent-a-pound excise tax on coconut and sesame culls. It also rejected a proposal to confine this tax only to "edible" oils. Volume MS Financial Chronicle The Committee also decided that the income from this tax should go exclusively to the Federal Treasury and no part to the Treasury of the Philippine Islands, whence most of such oil finds its way to the United States. Colonel Lindbergh Reported to Have Paid Income Tax on Alleged "Gift" of $250,000 in Aviation isbas Stock—Shares Were Given as Compensation for Services, According to Washington "Star" — Senator Black Refuses to Make Public Replies to Questionnaire. Colonel Charles A. Lindbergh, who was mentioned in testimony before the Senate air mail investigating committee as the recipient of a 8250,000 stock "gift" from the Transcontinental Air Transport Corporation, actually accepted the stock as partial compensation for services rendered and paid income taxes on it, according to a copyright story in the Washington "Star," Jan. 28. Senator Black, who is Chairman of the Committee investigating the awarding of the air mail contracts, said on Jan. 27 that he knew nothing of Colonel Lindbergh's income tax affairs. He added that he had received from Colonel Lindbergh replies to a formal questionnaire sent him by the Committee, but he declined to make the answers public. Associated Press advices of Jan. 27 from Washington added the following information: "There isn't any doubt that the stock was a gift, in my opinion," Senator Black said. In 1928, when the stock transfer was made, the "Star" will say, the income tax law exempted certain "gifts" from taxation, and by listing the stock as a gratuity Colonel Lindbergh could have avoided inclusion of the item among his taxable assets. This provision of the law, later revised, was recalled when D. 11. Sheaffer, Chairman of the Executive Committee of the T. A. T. Corporation, attempted to explain the procedure used by the Corporation in turning 25,000 shares of its stock over to Colonel Lindbergh in May of 1928. Mr. Sheaffer read to the Committee a letter to Colonel Lindbergh from C. M. Keyes, then President of T. A. T. The letter, dated May 28 1928, in part said: "Carrying out the memorandum of agreement, I have tied up for your account 25,000 Shares of stock of T. A. T. at $10 iler share and will deliver to you a check of the T. A. T. for 8250,000 cash upon your request. "In order that ail the records shall be clear for income tak purposes, please consult Colonel Breckinridge and see if he agrees with the full procedure." The letter went on to explain that Mr. Keyes would deliver with the $250,000 check a certificate for 25,000 shares, and that Colonel Lindbergh could return "either the T. A. T. check indorsed or your own personal check." The Colonel Breckinridge mentioned in the note is Henry F. Breckinridge, Colonel Lindbergh's attorney. Colonel Lindbergh, the "Star" will say, made no effort to conceal the transaction, considering the allotment of stock as special remuneration in return for expert services rendered the air line. Ile gave a full accounting of the stock transfer in his income tax return, it was reported on reliable authority, according to the "Star." Enactment Into Law of Bill to Guarantee Principal and Interest of $2,000,000,000 in Farm Mortgage Bonds-Provides for Creation of Federal Farm Mortgage Corporation. Following its enactment by Congress President Roosevelt on Jan. 31 signed the Administration bill under which the Government would guarantee the principal, as well as interest, of the $2,000,000,000 of authorized farm mortgage refinancing bonds. Congressional action on the bill was completed on Jan. 26, when the House accepted the conference report on the measure agreed to by the Senate on Jan.25. As indicated in our issue of Jan. 20, page 437, at which time we referred to the passage of the bill by the House on Jan. 16, provision is made thereunder for the creation of the Federal Farm Mortgage Corporation, which would be set up to handle the refinancing bonds. Associated Press advices from Washington on Jan. 25, the date the conference report was adopted by the Senate, stated: On insistence of the House managers, the conferees eliminated a Senate amendment which would have required Senate confirmation of all appointments to the proposed Farm Mortgage Corporation in the salary class of $4.000 and over. As originally reported to the Senate, the measure required Senate approval of all corporation employees to receive $6,000 or more, but this, as well as the $4,000 amendment, was stricken out in conference. A substitute approved by the conference provided that the employees' compensation shall not exceed the rates prescribed for comparable duties In other Federal agencies by the personnel classification act. One Senate amendment accepted by the conferees would limit the making of farm mortgage loans to Feb. 1 1936. After the passage of the bill by the House on Jan. 16, the Senate passed it in amended form on Jan. 22, and with the action of the House in disagreing to the amendments the bill went to conference; the conference report as stated above was agreed to by the Senate on Jan. 25, and by the House on Jan. 26, the President affixing his signature to the bill on Jan. 31. A Washington account Jan. 22 to the New York "Journal of Commerce" said in part: The capital of the corporation is fixed at $200,000,000, to be subscribed by the Government. With the approval of the Secretary of the Treasury it would be permitted to issue and have outstanding at any one time bonds in 973 an aggregate amount not exceeding 82,000,000,000, the bonds to have such maturities and interest rates as it may prescribe. Full Guarantee Proposed. The bonds will be fully and unconditionally guaranteed, both as to prin.Government and will be lawful investments and cipal and interest, by the security for all fiduciary, trust, and public funds, the investment or deposit of which is under the authority or control of the United States. The Secretary of the Treasury would be permitted also to buy and sell these bonds. The bill brings to a termination in ninety days following signature by the President the right of Federal Land banks to Issue bonds guaranteed as to interest by the Government, except as to the issuance of bonds in refinancing operations. The amount of their bonds does not exceed 8150.000,000 and all are held by the Reconstruction Finance Corporation as security for loans made to the Land banks. Under the terms of the measure as passed by the Senate to-day, Federal Reserve banks would be permitted to buy and sell the bonds of the Proposed Federal Farm Mortgage Corporation having maturities from date of purchase of not exceeding six months, and to make loans on the security of such bonds,subject to the limitations and restrictions respecting loans made on the security of direct obligations of the Government. It was pointed out that the fund of $200,000,000. made available for making direct loans under the emergency legislation, would be exhausted if the Land bank commissioner in charge of these operations were called upon to fulfill all the commitments made to applicants for such loans. The volume of such applications has exceeded available funds and commitments during the last few months have been made contingent upon the availability of funds for their disbursement. The bill provides for the capitalization of the corporation by the remaining funds made available to the commissioner and the mortgage loans made by him, and authorized that official to continue making such loans as an agent of the corporation until Feb 1 1936, using for the purpose not exceeding $600,000,000 of the guaranteed bonds of the corporation. The capital of the corporation also is available for this purpose. A $40,000,000 increase in the funds available to Federal Intermediate Credit banks through the sale of debentures for the making of production credit loans also is provided for in the measure. House and Senate Pass $950,000,000 Relief Bill—Minor Amendments Send Measure to Conference, but Administrator Hopkins Predicts Final Approval Monday (Feb. 12)—Appropriations Bill Designed to Provide for Needs of CWA and Federal Grants to States—Enaction Had Been Asked in Letter by President—Attempts to Increase Fund Defeated in Senate. The $950,000,000 appropriations bill, designed to permit the continuance of the Civil Works Administration and direct Federal relief to States, was passed by the House of Representatives after only 40 minutes debate on Feb.5 by a vote of 382 to 1. The Senate passed the bill Feb.8 without a record vote, but after inserting several minor amendments that made it necessary to send the measure to conference. Harry L. Hopkins, Civil Works Administrator, said yesterday (Feb. 9) that it was.almost certain the bill would receive final Congressional approval Monday (Feb. 12). In passing the bill Feb.8 the Senate defeated amendments which would have materially increased the relief fund and lengthened the duration of the civil works program. An amendment by Senator Cutting which woulSi have appropriated $2,500,000,000 was defeated by a vote of 58 to 10. An amendment by Senator LaFollette proposing a fund of $1,500,000 was also defeated by a vote of 52 to 14. The bill as passed by the Senate carried an amendment by Senator McCarran providing that all State CWA Directors must be appointed by the President and confirmed by the Senate. The single negative vote in the House was cast by Representative Terrell of Texas, who contended that the relief program was unconstitutional, and remarked that it may "start civil war and revolution" when the CWA activities are terminated. The action of the House in approving the relief bill by such an overwhelming majority was in response to a request made Jan. 27 by President Roosevelt, in a message addressed to Speaker Rainey. The President warned that available funds for relief purposes would be exhausted in February, and said it was "essential that additional funds be provided to avoid an abrupt termination of this relief work." The President has again indicated recently that he hopes to end CWA activity around May 1, but indications point to strong support in Congress for its continuance after that date. In the bill as passed by the House Feb. 5 the President, according to Chairman Buchanan of the Appropriations Committee, is authorized to "continue the CWA as long as the money lasts." The President's letter to Speaker Rainey Jan. 27 follows: To the Speaker of the House of Representatives: Sir: I have the honor to fequest an additional appropriation of $950.000,000 for the purposes of the Federal Emergency Relief Act of 1933, approved May 12 1933, and for continuing the civil works program under the Federal Civil Works Administration established by Executive Order No. 6420-B of Nov.9 1933, pursuant to the authority of Title II of the National Industrial Recovery Act of June 16 1933. Section 2 (a) of the Federal Emergency Relief Act made available for the purposes of that Act $500,000,000 of the funds of the Reconstruction Finance Corporation. The Executive Order establishing the Federal Civil Works Administration made available for that administration $400,000,000 of the appropriation of 974 Financial Chronicle $3,300.000,000 made by the Fourth Deficiency Act, fiscal year 1933, for national industrial recovery. The funds available for these two activities will be exhausted early in the month of February. 1934, and it is essential that additional funds be provided to avoid an abrupt termination of this relief work. I am confident that the Congress is in sympathy with the proposed continuance of these relief activities. Respectfully, FRANKLIN D. ROOSEVELT. We quote in part from a Washington dispatch Feb.5 to the New York "Times" describing the passage of the appropriations bill by the House on that date: Soon after the measure was passed, Harry Hopkins, CWA Administrator. made it known that there had been no definite administrative decision reached regarding the probable length of time the CWA would be continued. The lone dissenter was Representative Terrell of Texas, who has opposed several administration measures. Mr. Terrell explained his opposition by contending that the relief program was unconstitutional, and that the sooner the Government terminates "this proposition the better for the country." Terrell Predicts Civil War. "I think it is going to start civil war and revolution when we do stop it [the CWA]anyway," Mr. Terrell remarked. "It means a perpetual bond issue," he added, "a never-ending drain on the resources of the Government to pay even the interest. The Government is competing with private business on every side and it is an unsound policy. "I don't need any office." Mr. Terrell said, "and I am going to exercise my constitutional right and vote as I please. I wouldn't sell my independence for any office I ever saw. The rest can vote like a herd of dumb, driven cattle if they want to, but no one is going to crack a whip behind me." Difficulties were encountered immediately when the bill was called up to-day. When Mr. Buchanan asked unanimous consent for debate to be extended to three hours. Representative Cochran of Missouri asserted that "It will be three hours of mudslinging." "The whole fund is left to the discretion of the President," Mr. Buchanan said in urging approval of the bill. "The present fund will be exhausted on Feb. 10,and this bill should be passed at once. Who are we to tie the hands of the President in this work?" Taber Criticizes Methods. Representative Taber,ranking Republican member of the Appropriations Committee, said he would vote for the bill, but he took occasion to criticize the methods used by the administration in the relief expenditures. "Never in the history of America," he said,"has there been a situation so acute as that at the present time. In January, 1933, there were 3,850,000 families on relief. In March,1933,there were 4,560,000 families, and to-day there are 7,000,000 families on relief rolls, and the coat of carrying them along is running at the rate of $425.000,000 a month." He divided the cost as follows: On CWA payrolls. 4,000.000, costing $225,000,000 a month. On direct relief rolls, 2.650,000. costing $50,000,000 a month. Employed on public works, 350,000, costing $150,000,000. "It is apparent from these figures that there is no substantial employment in this country except relief employment of one kind or another," he dedared. Mr. Taber said that the appropriation "is not needed because the bureaucrats in charge of the administration have pork-barrelled $1,500,000,000 into projects where the money cannot be used until after July 11934. where it is providing very small employment on public works." End of Work in May Urged. "I am afraid that these operations are delaying and preventing the return of business," he asserted. "I am afraid that all of this effort, in view of the fact that the people have once tasted blood, is going to fail. The one encouraging sign was a determination on the part of the administrator that this OWA work should end the middle of May." House Approves Measures to Aid Dairy Industry and Cattle Raisers—Bill Would Appropriate $200,000,000 for AAA Distribution. Benefit payments of $200,000,000 to dairy farmers and cattle raisers would be authorized under a bill passed without a record vote Feb. 5 by the House of Representatives and sent to the Senate for its consideration. The bill, introduced on behalf of Secretary of Agriculture Wallace by Representative Jones, Chairman of the Committee on Agriculture, would make the appropriation under an emergency program and would make the funds available immediately through the Adjustment Administration. On the same day (Feb. 5) the House approved a proposal to designate "cattle" a basic commodity under the Agricultural Adjustment Act, thus making it possible to impose processing taxes on beef and dairy products to finance a program of production control. Bills Making Available Seed Loan Funds Approved in Congress—Senate Measure Authorizes $45,000,000 and House Bill $35,000,000—Now in Conference Committee. The House of Representatives Feb. 5 approved without a record vote the Jones seed loan bill, which would appropriate $35,000,000 for loans to farmers in 1934 for crop production and harvesting. A similar bill, sponsored by Senator Smith, but making available $45,000,000 for the same purpose, was passed by the Senate without a record vote Feb. 2. The two bills went to a conference committee late this week. The amounts authorized in both measures are far below those made available in prior years for seed loans, but Congressional leaders indicated that because of existing needs it would be unwise to end the loans entirely at this time. A Washington dispatch Feb. 2 to the New York "Journal of Commerce" outlined the Senate bill as follows: Feb. 10 1934 The principal change in the legislation from the form in which it was reported by the Committee a week ago was to reduce the amount to he made available for loans to farmers from $100,000,000 to $45,000,000. It was explained that the larger amount was unnecessary since the loans over the year never reach this figure, and further it was not expected that the demands for assistance would be as great this year as a result of the benefit payments being made to the farmers by the Agricultural Adjustment Administration under the acreage reduction programs. Another amendment made to the bill was to fix the amount of individual loans to farmers at $250 but in no case in excess of $400. It was also greed to continue the present interest rates on the loans at 53i%• Ten-Year Rail Loans Urged by Chairman Jones of RFC—Tells Senators Lines Must Meet $400,000,000 Maturities Soon. Amendment of the Reconstruction Finance Corporation Act so that loans of a maturity up to 10 years could be made to railroad and possibly to some other borrowers was suggested by Jesse 11. Jones, Chairman of the Corporation, at an executive meeting of the Senate Banking and Currency Committee on Jan. 30. A dispatch from Washington on that date to the New York "Times" continued. The proposal assumed much importance in view of the fact that the RFC and representatives of railroads have been endeavoring to map out a plan whereby the Corporation could extend aid in the meeting of more than $100,000,000 of railroad securities which will fall due this year. In addition, the railroads also owe about $230,000,000 to the RFC, most of which must be paid off within the next two years, unless the period for repayment is extended. At present the RFC is restricted to three-year loans and has segregated funds for extension of aid to the railroads, hoping that they would be able to float long-term bonds in the open market before the government loans matured. However, spokesmen for the railroads have urged that some method be found whereby they could dispose of their maturity problem for the current year definitely at this time. It is understood that officials of the railroads have expressed willingness to amortize bonds or other long-term securities as suggested by President Roosevelt, if maturity dates could be extended from three to 10 years. Creation of a sinking fund which would liquidate a loan within the threeyear period was considered impracticable. Among the railroads whose officers have discussed the matter with the RFC is the New York Central, which must meet maturities of $52,000,000 in May. Chairman Jones has stated that his organization would be prepared to give help, but expressed the hope that the banks would shoulder part of the loan. Committee Action Expected. Mr. Jones was reported to have told the Senate Committee that several of the railroads might find it difficult to handle maturities unless further authority was given to his Corporation to aid them and that some action should be taken. Senator Fletcher, Chairman of the Committee, said after the conference that Mr. Jone's proposal, in his opinion, was a "reasonable one," and it was reported that this viewpoint was shared by a majority of the committee. An amendment to the RFC Act will probably be placed before the Senate soon. It was stated that Mr. Jones also suggested that the 10-year limit be applied to some other types of loans, including those made to industries through mortgage loan companies and those financing exports. The latter type of loan is restricted to one year, and this, it is said, has proved a check on transactions. In recommending the 10-year extension on loans to banks and mortgage companies Mr. Jones is understood to have urged a provision for a series of Payments by the borrowers, probably at six-month intervals. This was felt desirable, as some of the loans have been made on collateral of a nature which could not be realized on quickly without severe loss. Report Suggesting Possibility of Relaxing Provisions of Federal Securities Act Said to Have Been Presented to President Roosevelt. In Associated Press advices from Washington, on Feb. 6, it was stated that President Roosevelt had before him an official report suggesting the possibility of relaxing the much-criticized liabilities provision of the "truth in securities" Act. The report (said the dispatch) was stated authoritatively to have been submitted by three of the five members of an Administration Committee beaded by Assistant Secretary John Dickinson, of the Commerce Department. It was added that President Roosevelt is known to be preparing recommendations for some congressional amendment of the Securities Act. In part, the dispatch also said: Some members of the Dickinson Committee were reported to-day to feel that the liabilities provisions of the Securities Act could be lessened without reducing its effectiveness as a protection to investors. Liable for Full Damages. The Act has been criticized by investment bankers and leading business associations as preventing the issuance of new securities and thereby slowing the flow of capital. The present law makes all participants in the flotation of the security liable for full damages for any omission or misstatement of fact about a security. Registrations Under Federal Securities Act in December and Last Quarter of 1933—Applications in December Totaled 41 Compared with 51 Registrations in November and 44 in October—In Three Months Estimated Gross Proceeds of Registrations Totaled $173,455,093—Volume of Issues of Liquor Concerns. Figures were made public by the Federal Trade Commission on Feb. 4 covering registrations under the Securities Act for the month of December 1933, and for the last quarter of 1933, ending with December. The Commission states Financial Chronicle Volume 138 that "exclusive of certificates of deposit and reorganizations, a total of 41 registration applications became effective during December, without deductions being made for registrations subsequently withdrawn or for stop orders issued by the Commission. The total estimated gross proceeds of these registrations," the Commission stated "is $62,542,175. These figures compare with 44 registrations becoming effective in October, with total gross proceeds estimated at $39,154,601, and with 51 registrations in November, with total gross proceeds of $76,129,977." The Commission's further announcement of Feb. 4 follows: For the three months ending with December 1933 there were 129 registrations becoming effective with total estimated gross proceeds amounting to $173.455,093. In these figures, deductions have been made for withdrawals, stop orders and registrations of securities to be disposed of for others. During December, as in November, the statement shows that general management investment and trading companies led all others in point of volume, accounting for more than 30 million of the estimated gross procoeds. Next in point of volume come distilling and spirituous liquor concerns, with estimated gross proceeds in excess of 8 million dollars. For this month, however, the chemical and allied products group were only slightly behind the distilling and spirituous liquor group with securities estimated to have gross proceeds in excess of 7 million dollars. In the entire manufacturing industries group, there was an upturn in December when the registrations amounted to $19,241,895 as compared with $17.129,800 in October and $12,276,529 in November. An interesting feature of the December registrations was the extensive treasury stock issues and the volume of securities registered to be disposed of for the account of others than the registrant. The former represents $9,375,462 of the total estimated gross proceeds and the latter had estimated gross proceeds of $3,811,660. A registering company, of course, obtains no net proceeds from the sales of issues disposed of for the account of others. As in November, the bulk of the December issues were common stocks. Estimated gross proceeds of these stocks aggregated $53,411,875 out of the total of $62,542,175 effective for that month. The following table shows the type of security and the total estimated gross proceeds of security registrations effective in December 1933, together with cumulative figures for October to December, inclusive, and including Issues of treasury stock but deducting,(1) bonus stock of one company distributed with that of another for which gross proceeds are not available, (2) securities to be disposed of for the account of others than the registrant, and (3) withdrawals and stop orders applying after the effective date. TABLE 1. Type of Security. Registration Statements for 40 Companies* Effective In December 1933. Number of Units. Registration Statements for 129 Companies• Effective October-December 1933. Estimated Amount P.C.of Number of Gross Total. of Units. Proceeds. Estimated Amount P.C.of of Gross Total. Proceeds. Common stock 11,135,697 50,800,215 86.5 51,116,951 133,012,088 76.7 Preferred stook 1,228,500 3,727,000 6.4 2,336,553 13,536,500 7.8 Ctrs, of participation, beneficial interest & warrants 178,167 3,650,000 6.2 2,079,388 9,065,525 5.2 Mtges.& mtge. bonds 10,566,700 6.1 Debenture bonds 553.300 .9 7,274.300 4.2 Short-term notes3 years or less Total 58,730.515 100.0 173,455,093 100.0 * Deducting registrations of bonus stock, securities to be disposed of for the account of others, and withdrawals and stop orders applying after effective date. In the above table only 40 registration statements are shown for December whereas 41 became effective during that month, while for the three months only 129 statements are shown as compared with 136 effective statements registered during that period. The difference is accounted for by deductions made for withdrawals, stop orders, bonus stock issues and securities to be disposed of for others. During the last quarter of the 1933 calendar year, stocks and warrants with an estimated valuation for registration purposes of $243.843 were distributed as bonuses while various companies registered for sale or other disposition for the account of other parties, 324,250 shares of common and 80 shares of preferred stock, to yield estimated gross proceeds to such other parties of $3,811,160. Estimated gross proceeds of the securities to be disposed of for the account of those companies whose registration statements were effective in December Is $58,730,515, while the total effective registrations for the month amounted to $62,542,175. This difference is accounted for by the registrations of securities to be disposed of for others than the registrants. The estimated total net proceeds of these issues aggregated $54,061,165, which, deducted from the $58,730,515, leaves a difference of $4,649,350. This sum represents expenses incident to the sale and distribution of the securities. Incidentally. while this selling expense was nearly 8%. it was only approximately one-half the rate of selling costs for either October or November. The following table shows the estimated distribution of the total net proceeds of December issues and also the cumulative figures for the three months ending with December: TABLE 2. December 1933 40 Compantes.• Amount. $ Organization and development 244,499 New company plant construction, machinery and equipment 2,172,150 Acquisition of tangible & intanzible assets 1,720,981 Acquisition of capital stock of other cos 262,500 Oldcompany plant am- equipment, additions, betterments, development and construction 6,849,776 Working capital 5,905,040 Funding, refunding and conversion 2,952,73 Investment 29,103,475 Reserved for subsequent issue 1,364,587 Miscall., unclassified and unaccounted for 3,505.424 P. C. of Total. Oct.-Dec. 1933 129 Companies.* Amount. P. C. of Total. .4 $ 1,543,598 1.0 4.0 3.2 .5 7,474.673 4,108,231 859.000 5.0 2.8 .6 12.7 10.9 5.5 53.8 2.5 6.5 9,048,716 16,675.686 11,719,310 84,356,586 5.424,687 8,233,087 6.1 11.2 7.8 56.4 3.6 5.5 Total net proceeds 54,081,165 100.0 149,443,574 100.0 •Net proceeds for companies registering securities for account of others and bonus stock not distributed. . 975 For the October to December quarter, more than $84,000,000 of the estimated net proceeds, or slightly more than 56% of the total, was to be devoted to investment, principally in the common stock of various general and limited management investment and trading companies. A comparison of the total gross proceeds for the last quarter of 1933 (Table 1) with the total net proceeds (Table II) for that period shows a difference of $24,011,519. This is equivalent to 13.8% of the gross proceeds, which goes for selling, distribution, &c. This figure for the quarter, it is to be noted, is brought considerably below that for either October or November by the relatively low cost of distribution in December. which was a little under 8%. List of Companies Filing Registration Statements with Federal Trfide Commission Under Securities Act. It was announced on Feb. 5 that $10,000,000 worth of proposed securities, of which more than 6 million are for new capital, have been filed with the Federal Trade Commission for registration under the Securities Act. More than half of the new capital, or $3,620,000, said the Commission is for investment companies while $2,655,000 is for industrial projects. The latter includes mining and oil developments totaling approximately one and one-half million dollars. Reorganization or readjustment plans account for almost $4,000,000 of the total. The list of statements filed for registration made public Feb. 5 by the Commission follows: Great Northern Distilleries, Inc. (2-630). Fostoria, Ohio, a corporation organized to manufacture and sell distilled spirits, proposes to issue $1,000.000 of capital stock for construction and working capital. Among officers are: Don C. Hanover, President; J. J. Blue, Secretary, and J. L. Newson, Treasurer, all of Fostoria. Selected American Shares, Inc. (2-631), Wilmington, Del., investing in securities a list of selected companies and proposing to issue $2,500,000 of common stock for company purposes, Underwriter is Selected Shares Corporation, Chicago: Among officers are: Max Adler, President, and Robert S. Alder. Vice-President and Treasurer, both of Chicago. General Manganese Corporation (2-632), Detroit, a Delaware corporation developing manganese oil properties in South Dakota, proposes to issue 125,000 shares of no par common stock in the amount of $500,000 to provide working capital. Among officers are: K. M. Leute, Detroit, President; N. J. Miller, Detroit, Vice-President and Treasurer, and M.B. Laing, Detroit, Secretary. Second Carey Trust (2-633), Tulsa, Okla., an Oklahoma express trust, organized Jan. 19 1934. to own, hold and collect income from oil and gas mining leases, covering the "Westgate-Carey lease" in Oklahoma County, Oklahoma. The company proposes to issue 5.000 certificates of interest In "Second Carey Trust" at $100 a share. Underwriters, who have not yet been designated, will purchase the units at not less than $80 each. Among officers are: W. E. Brown, President, and H. I. Shanks, SecretaryTreasurer, both of Tulsa. Sierra Nevada. Ltd. (2-634), Salt Lake City, Utah, a Nevada corporation organized in June 1933, as a successor to Sierra Nevada Mining Co., to develop a mine located at Virginia City, Nev. The company Proposes to issue 700,000 shares at an aggregate price of $250,000. Among officers are: Arthur Thomas, President and Arthur J. Selander, Secretary-Treasurer, both of Salt Lake City. Gachin Gold Syndicate, Ltd. (2-635), Toronto. Can., an Ontario corporation organized in April 1933 to acquire units of Gachine Gold Syndicate and to invest in capital stock of producing mines. The company proposes to issue 10,000 shares of common stock at $12.50 per share for company purposes. The issue will be sold to the underwriters, J. J. Carrick, LW., Toronto, at $10 a share. less a commission of 50 cents each. Among officers are: John J. Carrick, President; Alexander C. Carrick. Treasurer, and Donald D. Carrick. Secretary, all of Toronto. The company is represented in the United States by Robert M. Hofferman & Co., 11 Broadway, New York City. Wood Block Flooring, Ltd. (2-636), Toronto, a Canadian corporation organized in September 1933, to manufacture and sell wood block flooring Proposes to issue 5,000 shares of 7% cumulative redeemable preferred stock and 5,000 shares of no par value common stock in a total amount of$250,000. Among officers are: Frederick Peter Potvin, President; Clara Mary Potvin. Vice-President, and Catharine Potvin, Secretary-Treasurer, all of Toronto. Henry W. Benson Associates, 92 Liberty St., New York City, are the U.8. agents. American Business Shares, Inc. (2-637), Jersey City, a Delaware corporation, organized September 1932, to operate a limited management investment company, proposing to issue 1,000.000 shares of capital stock in an amount not to exceed $1,120,000. The offering is to be continuous, the current statement applying to an additional block, the original block having been registered in July 1933. Among officers are: Leon Abbott, Glen Cove, N. Y., President; Julian B. Beaty, Rye, N. Y., Secretary, and R. Ernest Beaty, Brooklyn, N. Y., Treasurer. The underwriter is Lord, Abbott & Co., Inc., Jersey City. Missouri-McKee Gold Mining Co. (2-638), Minneapolis, a Minnesota corporation, organized in November 1933, to engage in mining and milling of ore from the company's property in Montana. The company proposes to issue 30,000 shares of capital stock at $1 a share for working capital. The underwriter, R. M. Glover, White Plains, N. Y., is to receive a commission of 20 cents a shire. Among officers are: Avery F. Crounse, Minneapolis, President and Treasurer; and Edward E. Eder, Excelsior. Minn., Secretary. General Vending Corporation Bondholders Protective Committee (2-639). Philadelphia, calling for deposits of General Vending Corporation (direct Issuer) and Consolidated Automatic Merchandising Corporation (Guarantor), both of New York, the direct issuer having been a holding company owning the stocks, obligations and other securities of operating subsidiaries which manufacture and maintain automatic vending and weighing machines. The issue to be called for deposit consists of $3,857,000 in 6% 10-year secured sinking fund gold bonds of General Vending Corporation, which company had outstanding 33,000 shares of preferred stock at $100 par value and 365,620 of common stock of $1 par value while Consolidated Automatic Merchandising Corporation had outstanding 120,798.60 shares of preferred stock of a stated value of $39.50 each and 2,541.355 shares of common stock at $1 par value each. The protective committee consists of Bradford M. Couch, Philadelphia; Charles F. Herb, New York; Lloyd K. Larson, Bridgeport, Conn.; F. L. Porter, Boston; S. A. Traugott and Frank Wolfe, New York. According to the plan and agreement for readjustment of funded debt, it is desired to keep General Vending Corporation out of receivership and to provide that its available earnings be administered in the interest of bondholders. 976 Financial Chronicle American Water Works & Electric Co.--Files for Registration with Federal Trade Commission under Securities Act Proposed Collateral Trust Bond Issue of $15,000,000 and 2,600,000 Shares of Common Stock. American Water Works & Electric Co., Inc., New York, large utility holding company, filed for registration with the Federal Trade Commission on Feb. 8 a proposed collateral trust bond issue of $15,000,000 and 2,500,000 shares of common stock for which no value is listed. From the sale of the new bond issue, the company expects to retire outstanding collateral trust bonds amounting to $12,569,200 and to use the balance for general corporate purposes, according to the announcement by the Commission, which also said: The $15,000,000 bond issue is made up of ten-year 5% convertible collateral trust bonds. Proceedsfrom the sale will be used to retire outstanding collateral trust 25-year 5% gold bonds maturing April 1 1934. The new bonds are to be sold at a price not less than the principal amount plus accrued interest. The underwriter, W. C. Langley & Co., 115 Broadway, New York, will be entitled to receive 5% commission on the principal amount of any bonds it purchases to sell. The common stock is to be without par value, according to the registration statement. The amount received for each share will depend on the rate at which the convertible collateral trust bonds are converted into common stock. All consideration received for common stock issued upon conversion of the bonds, up to but not exceeding $10 a share, will be allocated to capital, according to the statement. Subsidiaries of this company own property and operate in Alabama, Arkansas, California, Connecticut, Georgia, Illinois, Indiana, Iowa, Kansas, Maryland, Missouri, New Jersey, New York, Ohio, Pennsylvania, Tennessee, Texas, Virginia, West Virginia, Wisconsin and in Cuba. Among officers are H. Hobart Porter, President; Earle S. Thompson, Vice-President and Treasurer, and Arthur L. Rae, Comptroller, all of New York. In its registration statement, the company stipulates that maturing bonds are to be payable in gold coin of the United States of the standard of weight and fineness existing April 1 1914, and in English pounds sterling at the rate of twenty pounds, eleven shillings, one pence for each $100, or in French francs at the rate of 518 for each $100. The company notes the enactment by Congress of the bill declaring that the right to require payment in gold is against public policy, and considers that by provisions of this act it is relieved of the obligation to pay its bonds in gold coin. foo,This is the largest utility issue filed for registration since the Securities Act of 1933 became effective last July. President Roosevelt Grants National Labor Board Authority to Supervise Elections to Insure Representation—Executive Employee Genuine Order Widens Administrative Powers of Board— Steel Executives Attack Order and NRA Attitude on Company Unions—NRA Denies Intention to Assert All Company Unions Are Dominated by Employers. President Roosevelt, in an Executive Order issued Feb. 1, vested the National Labor Board with authority to supervise elections for representatives of employees in any industry or plant whenever it is requested to do so by a "substantial number" of such employees. This order greatly expanded the administrative functions of the Board, and was said to have been prompted by a growing tendency on the part of industrial managements to foster "company unions" in their plants, to be operated by employees' representatives selected by the employer rather than by the employees themselves. Further controversy over the company union was precipitated on Feb. 2, when the executives of the Steel industry issued a statement through the American Iron and Steel Institute in which they said that the company unions, operating in their plants, best fulfill the principle of collective bargaining as defined by the NIRA. The statement protested against the President's delegation of authority to the National Labor Board to conduct elections for employees. Such authority, they asserted, represents an attempt to force national unionism of the steel industry. The statement referred to the assertion by the NRA that company unions were operated by representatives chosen by employers rather than by employees, and called that assertion "a flagrant misrepresentation." General Hugh S. Johnson, Recovery Administrator, and Donald R. Richberg, Counsel of the NRA, on Feb. 3 issued a joint statement clarifying the meaning of the President's Executive Order, and at the same time denying the intention to impute that all company unions are led by representatives chosen by the employers. The text of President Roosevelt's Executive Order of Feb. 1 follows: By virtue of the authority vested in me under Title 1 of the National Industrial Recovery Act, approved June 16 1933 (Public No. 67, Seventythird Congress), and in order to effectuate the policy of said Act, Franklin D. Roosevelt, President of the United States, do hereby provide for and direct the enforcement of certain provisions of Section 7(A) of said Act and the conditions contained therein, as incorporated in, and made a part of, any code of fair competition, or agreement heretofore or hereafter approved or prescribed by me in the following manner: 1. Whenever the National Labor Board shall determine, in such manner as it sees fit, that a substantial number (as defined in the discretion of Feb. 10 1934 the Board) of the employees, or of any specific group of employees, ot any plant or enterprise or industrial unit of any employer subject to such a code or agreement, have requested the Board to conduct an election to bargainenable them to choose representatives for the purpose of collective ing or other mutual aid or protection in the exercise of the rights assured to them in said Section 7(A), the Board shall make the arrangements for and supervise the conduct of an election, under the exclusive control of the Board and under such rules and regulations as the Board shall prescribe. Thereafter the Board shall publish promptly the names of those representatives who are selected by the vote of at least a majority of the employees voting, and have been thereby designated to represent all the employees eligible to participate in such an election for the purpose of collective bargaining or other mutual aid or protection in their relations with their employer. 2. Whenever the National Labor Board shall have determined upon an investigation, or as the result of an election, that the majority of the employees of an employer, or the majority of any specific group of employees, have selected their representatives in accordance with the provisions of said Section 7(A), and shall have certified the names of such representatives to their employer, and thereafter upon complaint or on its own motion, the Board shall determine that such an employer has declined to recognize or to deal with said representatives, or is in any other way refusing to comply with the requirements of said Section 7(A), the Board shall report its determination promptly to the Administrator for Industrial Recovery for appropriate action. 3. The powers and duties herein conferred upon the National Labor Board are in addition to, and not in derogation of, any powers and duties conferred upon such Board by any other Executive Order. The NRA on Feb. 1 issued an analysis of the Executive Order which read as follows: The President's order is the direct result of the growing tendency on the part of industrial managements to build up "company unions" in their plants. These unions are operated by employees' representatives chosen by the employer rather than by the employees themselves. Frequent charges that such company unions are not representative of the workers but are dominated by the management have been made. Typical among such eases are those of the Wierton Steel Co. and the Budd Co., of Philadelphia. The White House order is sweepingly inclusive in its terms. It expressly states that the Board may determine "in such manner as it sees fit" when a substantial number of employees, or even of a group of employees, requests the Board for elective assistance. The Board may then act at once to hold an election and see that the right of collective bargaining is carried out realistically. This means the guaranteeing of an election so managed that its results will show conclusively who the employees' representatives are and that such appointees be the only ones who deal with the management. It is evident from the President's order, too, that teeth are to be put into the Board's elective functions. Evasion of the results of elections supervised by the Board will be reported immediately to the Administrator for National Recovery. The inference is clear that the National Labor Board will have the following new powers: 1. The Board is given a free hand in determining whether a substantial number of employees in any individual establishment want an election held. 2. That the vote of representatives of the majority are thereby designated to represent all employees. This establishment of majority rule in collective bargaining is probably the most important point in the Executive Order. 3. The Board, in addition to its junctions of conciliation, arbitration and mediation, now functions also for enforcement purposes. Two channels are open for enforcement of the results of elections supervised by the Board. The first is to turn the case over to either the State or National Compliance Boards. These Boards act to bring about compliance through headings. Failure to reach an agreement usually results in referring the case immediately to the law enforcement agencies of the Government. The alternative action in case of evasion or non-compliance with the election results is to refer the case to the Department of Justice for possible prosecution. The text of the statement by the executives of the steel industry, issued Feb. 2, follows: The steel industry of the United States is co-operating wholeheartedly with the President in his efforts for national recovery and subscribes fully to the principles of collective bargaining as provided in Section 7(A) of the National Industrial Recovery Act. In accordance with this principle, employee representation plans are in operation throughout the steel industry. They are functioning effectively and are providing employees with representatives chosen by them in free and untrammeled elections. The employee representation plan is a modern and effective method of collective bargaining. It operates in the best interest of all the workers, and, by promoting peace and harmony in industrial relations, instead of strife and irritation, it benefits industry and the consuming public. We regard the analysis of the Executive Order which, according to the press, was issued by the NRA as a direct threat against the peaceful industrial relations long prevailing in the steel industry. It threatens the whole national industrial recovery program. The published statement by the NRA to the effect that so•called company unions are operated by employees' representatives chosen by the employers rather than by the employees themselves is a flagrant misrepresentation of facts. We regard it as a violation of public trust for a Government agency to issue such a statement to the public. It can indicate nothing other than an intention to accomplish a complete domination of all industry, affecting the lives of millions of people, by union organizations which represent less than 10% of the industrial employees of the nation. For elections to be ordered by the National Labor Board upon the request of a mere handful of employees in any plant would mean constant disturbance and confusion in the industry. We regard many of the decisions and acts of the Board as clearly intended to encourage unionism and to impose it upon industry. On that account we cannot consider the Board to be an impartial body. Evidences of the bias of the Board are found in the rules heretofore prescribed by it providing for nominations of candidates in employee elections by petition instead of by the established American custom of secret ballots as practiced in the primaries for the selection of candidates for public office. The petition plan permits names to be placed on the ballot for the employees vote by only 10 signatures. We regard this as undemocratic and as opening the door to union intimidation of employees. Volume 138 Financial Chronicle To provide that an election shall be held when a "substantial" number of employees shall demand it and to give to the National Labor Board the right to determine what constitutes a "substantial" number of employees may force an election, whenever a handful of discontented workers, who might be only union organizers, demand it. This is bound to be a constant source of confusion. To make the wish of a majority of the number who shall vote, although they may be only a small percentage of the whole number of employees, compulsory upon all employees is a direct violation of Section 7(A) of the National Industrial Recovery Act, which gives to any number of employees the right to choose their own representatives for collective bargaining. The steel industry maintains that its employees' representation plans met every requirement of the National Industrial Recovery Act in respect of collective bargaining. It intends in every practical and lawful way to resist all attacks upon such plans. The text of the joint statement by General Johnson and Mr. Richberg is given below: Because of an erroneous press interpretation issued yesterday of the Executive Order of the President, which empowered the National Labor Board to supervise the conduct of elections to determine employee representation in certain cases, it is desirable to explain what is and what is not covered by the Executive Order. 1. The Executive Order provides a method whereby any specific group of employees of all the employees of a plant or of any employer may select, by a majority vote, representatives clearly empowered to act for the majority in their relations with their employer. 2. This selection of majority representatives does not restrict or qualify in any way the right of minority groups of employees or of individual employees to deal with their employer. 3. Section 7(A) affirms the right of employees to organize and bargain collectively through representatives of their own choosing; and such concerted activities can be lawfully carried on by either majority or minority groups, organizing and selecting such representatives in such manner as they see fit. Also, in affirming this right of collective action the law lays no limitation upon no individual action. 4. The joint statement issued by the Administrator and General Counsel on Aug. 24 1933, concerning Section 7(A) provides an interpretation of this Section, which has not been changed and is not modified by the Executive Order. 5. The purpose of the Executive Order is to provide a definite workable method for the selection by the majority of any group of employees of their representatives, who will thereupon be entitled to recognition as the representatives of the will of the majority of the employees eligible to join in that selection. 6. As a practical proposition the National Labor Board would find it impossible to deal with every controversy that might arise between rival groups of employees, each seeking to represent a fraction of the employee opinion, or to conduct thousands of elections so that every little group of employees could select representatives to represent every faction of employee opinion. Nor could any employer maintain satisfactory relations with his employees through unlimited negotiations with an indefinite number of employee representatives expressing every possible variety of opinion. The most important question to be solved in carrying out the purposes of Section 7(A) is to determine who are the representatives of the majority of the employees affected. It is for the purpose of solving that problem that the Executive Order was issued, which in no way excludes the exercise of rights by minorities or individuals. 7. As has been pointed out frequently, the right of collective bargaining is not the right to obtain a specific contract, because a contract must be the result of an agreement, and neither employees nor employers can be compelled to enter into a specific contract. But it is to be assumed that if both employer and employees are assured that the representatives of the employees have been selected freely and without coercion to represent the desires of a majority of those affected, then any contract resulting from such collective bargaining will stabilize employment conditions and produce the most satisfactory relations possible between employer and employee. 8. In so far as the statement in the press release might be read as saying that employees' representatives in all company unions ployers it was not so intended, as there is no evidence are chosen by emthat such is the case. Nor is it true that employees, if permitted to act in their own free choice, may not select a company union (meaning local plant union). The principal purpose of the order was to insure that the choice be free—not to influence the choice between any particular form of employee organization. HUGH S. JOHNSON, Administrator for National Recovery. DONALD R. RICHBERG, General Counsel. Inquiry by Federal Trade Commission Into Steel Code and Gasoline Prices. In furtherance of the resolution adopted by the Senate on Feb. 2 (given elsewhere in these columns to -day) the Federal Trade Commission on Feb. 5 began the inquiry called for in the resolution into the steel code, and gasoline prices. The Commission, in its announcement of Feb. 5, said: Moving promptly to comply with the Senate resolution directing an Investigation into steel and gasoline prices, the Federal Trade Commission already has begun its inquiry. The steel price investigation will be under the direction of Judge Robert E. Healy, the Federal Trade Commission's chief counsel, who conducted the public utility investigations and the gasoline price inquiry under the direction of the Commission's chief examiner, James A. Horton. From a Washington dispatch, Feb. 5, to the New York "Times," we take the following: The investigation of the steel industry is attracting attention because of the recent remarks by General Johnson, who in a speech in New York on Jan. 19 said: "Now I yield to no man In my admiration for but at this crisis we must look facts in the teeth the Federal Trade Commission. administration it will kill the recovery program."and by moving in to control this Ile charged that substitution of the Commission for the NRA was the objective of those seeking to amend the Act. . . . Many Legal Points Involved. Many legal questions on interpretation of the meaning of the NRA and codes adopted under it will confront the Commission. Officials said "no 977 forecast is possible at this time as to the time that will be required to complete the investigation." Some believe that the question of what constitutes monopolistic practices and whether activities carried on under any of the NRA codes fall within their range will have to go finally to the high courts for determination. The Commission, it is understood, will try to set forth in some detail such practices as are found in operation, as a basis for better determination ot the issue. Whether it will make any definite recommendations could not be forecast to-day. The Commission has made no recent broad study into the gasoline price situation. This phase of the Borah inquiry is not expected to cause difficulty. The Federal Trade Commission investigation receives added interest from the recommendations made yesterday by Division Administrator Whiteside of the NRA for immediate temporary suspension of provisions in codes which make for unauthorized price-fixing. Resolution Adopted by Senate Calling ForDInvestigation of Steel NRA Code by Federal Trade Commission—Data Asked as to Increase in Price of Gasoline. At the instance of Senator Borah a resolution was adopted by the United States Senate on Feb. 2 calling upon the Federal Trade Commission to make an investigation of the steel code. As explained by Senator Borah, the Commission is asked to report, "first, upon the steel code, as to whether or not, under the code, the steel industry has been engaged in price fixing"; and "secondly it calLs for a report as to the increase in the price of gasoline during the last six months." As adopted by the Senate the resolution reads: Resolved, that the Federal Trade Commission be, and the same is hereby directed to make an investigation and study of the steel code and report the result thereof to the Senate as soon as practicable, showing: First, the practice of the steel industry under the code with reference to price-fixing, the increase of price of steel products, and such other matters as would give a full presentation of facts touching the industry since it went under the N. R. A. code; Second, that said Federal Trade Commission report to the Senate the increase in the price of gasoline during the last six months and what the increase of price means to the users of gasoline throughout the country in the way of additional cost. From a Washington dispatch Feb. 2 to the New York "Herald Tribune" we take the following: Senator Borah in presenting the resolution was following up his war on alleged monopoly and attempts at monopoly under the N. R. A. codes. It is the expectation the Trade Commission will make a report in the near future. It is said to have much of the material already at hand, since the Administration has been seeking to keep informed as to operation of the major codes and the basic industries under codes. . . . Small Concerns Complain. Since he opened fire on this subject in the present session. Senator Borah has been flooded with letters from small business concerns alleging they are suffering under the codes because those codes are dominated by the leading interests in the industries. The Senator said to-day he had received several thousand letters from all over the country commending his efforts to prevent monopoly under the N. R. A. codes. As a sample of the letters, the owner of a small lumber mill in Washington writes that, "the lumber code was written by and for the big boys." The owner of a rubber footwear business in New York which has existed for fifty-two years wrote to Senator Borah: "It is now absolutely terminated by the so-called gentlemen's agreements by the managers of the various mills and the organization which is named the Rubber Association of America." Proposed Investigation Into NRA Steel Code—Gen. Johnson Says "It's All Right With Me," Regarding Senate Resolution. The following from Washington is from the "Wall Street Journal" of Feb. 3: The Senate resolution asking the Federal Trade Commission to investigate steel prices under code operation is "all right with me," General Johnson said. "It is perfectly proper if the Senate wants to do it," he added. Turning to industrial practices under all codes approved, Mr. Johnson said any monopolistic action taken under a code is still a violation of the law. However, he pointed out that anti-trust laws provide against action "in restraint of trade," and added that the term "monopolistic practice" needs redefining, as many N. R. A. actions taken under the law are also in restraint of trade. The Administrator stated that while Governmental representatives on code authorities have veto power they do not vote, and in consequence approval has been withheld on all action taken by industry under code' approved. It would be "very difficult" to convict an action by any Industry taken under mandate of a code provision even though such an action might be held a violation of some other law, he said. Code for Construction Industry Effective Feb. 27— Pact Approved by President Roosevelt—Stipulates 40-Hour Week and Minimum Wage of 40 Cents an Hour—National Construction, Planning and Adjustment Board, of 20 Members, Will Handle Labor and Trade Relations. A code of fair competition for the construction industry will become effective Feb. 27, following its approval Jan. 31 by President Roosevelt and General Hugh S. Johnson, National Recovery Administrator. Negotiations and controversies while the code was being formulated delayed completion of the pact for six months. The code covers every form of building, from roads to skyscrapers, and was said! 978 Financial Chronicle Feb. 10 1934 by officials of the NRA to provide a pact for what is the nation's second largest industry in normal times. In a letter to General Johnson, Jan. 31, the President expressed the hope that the National Construction, Planning and Adjustment Board, created to supervise labor and trade relations in the industry, would begin functioning promptly and effectively, and would report to him regarding such disputes as may now exist. This new Board will have 20 members, half of whom will represent the industry and half labor. General Johnson said that the code is "perhaps the most comprehensive self-governing instrumentality yet conceived" under the NRA. He added that it represents "the very essence of the spirit of co-operation with which the Recovery Administration has attempted to associate itself." The principal provisions of the construction code were described as follows in a Washington dispatch, Jan. 31, to the New York "Journal of Commerce": would give their final decision to the complaining Connecticut manufacturer. By withdrawing their injunction and placing themselves again under the coat and suit code, the five Connecticut manufacturers will be enabled to obtain NRA labels for their garments from the code authority. Despite the temporary injunction given by Judge Thomas,restraining code authorities from applying the code to the plaintiffs, the Connecticut manufacturers found that the New York code authority declined to acknowledge the jurisdiction of the Federal Court in this district and withheld the labels. Without these labels the Connecticut manufacturers were unable to market their goods, it was claimed. Continued inability to market their products threatened to close the factories, despite the injunction victory, it was asserted. On the other hand despite the fact that the injunction failed to open their market, the court action which resulted in the granting of the temporary injunction apparently expedited consideration by the NRA authorities of the manufacturers' complaint. Two days after the temporary injunction was granted by Judge Thomas a hearing was held in Washington, D. C., by NRA officials and representatives of the coat and suit manufacturers. This was followed by other conferences and, according to Mr. Ellis, a final decision is expected at the hearing to be held "in the near future." Besides the Independent Cloak Company, other Connecticut manufacturers who brought the injunction proceedings are Sokol Brothers and Philip Scapalletti both or New Britain, and the Parisian Garment Company and the Biltrite Garment Company, both of Bridgeport. In summarizing for the President economic effects expected from the approved code, the Administrator stated that power of co-ordinated action to check the fluctuations in volume of construction, ranging from 100 to 50% below normal requirements, would be afforded this vast industry for the first time. Although capable of putting half the remaining unemployed back to work, he said, the construction industry to date has shown no signs of recovery under the NRA program. In addition to establishment of a construction code authority to administer the code generally, the code provides a minimum wage of 40c. per hour for unskilled common labor and $15 and $12 per week for office workers, basing salaries OD population. Maximum hours are limited to 40 hours per week for both corrnnon labor and office help, with usual exemptions for watchmen, executives and emergency workers. Where the National Planning and Adjustment Board approves, maximum hours on inaccessible projects, where laborers are housed in camps, temporary shelters, ftc., are set at 48 hours per week. "Return to normal volume in the industry can result only through investment of private capital in construction," Administrator Johnson points out. "The increased cost of construction, due to an immediate increase in wage rates, will not be productive of private construction work at the present time." Action Is Hailed. Approval of the construction code was hailed with great satisfaction by members of Associated General Contractors of America, terminating their fifteenth annual convention here to-day. General Johnson, who addressed the session this afternoon, told the convention that he had approved the code, and "momentary" approval from the White House had been indicated to him via telephone. Contractors, therefore, looked for the President's approval, but not until some time next month. Henry I. Harriman, President of the United States Chamber of Commerce, spoke to the convention to-day regarding the country's general economic future. There appears to be, he said, three specific fields of opportunity in the economic areas which are opened, enumerating these as rehabilitation of industrial plants, modernization of passenger rail transportation and construction of modern sanitary homes. Mr. Harrimon suggested the formation of a Government Housing Corporation, with ample capital, under the supervision of three commissioners to be appointed by the President. References to the issuance of the temporary injunction appeared in our issues of Jan. 6, page 64, Jan. 20, page 441 Dissolution of Injunction Against NRA Authorities ' Following Withdrawal by Cloak and Suit Manufacturers in Connecticut of Opposition to Code. The dissolution is announced of the temporary injunction against Gen. Johnson and other National Reconstruction Act officials restraining them from taking action against five Connecticut cloak and suit manufacturers who refused to abide by the provisions of the NRA code on the ground that they were unjustly discriminated against. Regarding the discontinuance of the proceedings the Hartford "Courant" of Feb. 7 said: The temporary injunction granted by Judge Edwin S. Thomas in the United States District Court here a week ago to five Connecticut suit and coat manufacturers against NRA authorities was dissolved Tuesday(Feb.61 when legal counsel for the manufacturers withdrew their action. Formal notice of the withdrawal of the action was filed late Tuesday afternoon in Federal Court by Attorney A. S. Albrecht, who with David P. Siegel of New York represented the manufacturers in their injunction proceedings. The notice was immediately approved by Judge Thomas. Return to Cede. As a result of the withdrawal of the action, the manufacturers automatically returned under the provisions of the suit and code for the Eastern Division, necessitating resumption of the higher wage scale against which they protested in seeking the injunction. Their original complaint alleged that while they were placed in the gastern Division, Baltimore, which they claimed competes with them in the New'lock market, was placed in the Western Division with its lower wage scale. The action of the manufacturers followed a series of conferences held by their representatives and officials of the suit and coal code authority in New York, at which, it was asserted, the manufacturers received assurance that an attempt would be made to adjust the cause of their complaints. Ellis Explains Position. Sidney Ellis, President of the Independent Cloak Company of New Britain, delegated and authorized by the other manufacturers to act in their behalf, issued a statement in which he asserted: "Despite the injunctive relief already granted by the court, and because the deponent is anxious from a patriotic spirit to work with the Government officials, and believing and hoping they will see fit to grant the proper and equitable relief that is being sought, and having discussed the situation at length with individuals who are on the staff of the various administrative bodies connected with the NRA, the plaintiffs have decided to withdraw their action and permit the administrative officers to carry out their promises to render proper and equitable relief to the plaintiffs." Mr. Ellis asserted he expected that another hearing would be held in the near future possibly within two weeks, at which the code administrators and Feb. 3, page 790. Judge Brewster of Federal Court in Boston Holds Hoosac Mills Corporation May Disregard NRA Provision Directing Curtailment of Production. In Boston advices Jan. 19 to the New York "Times" it was stated: Judge Malta H. Brewster in a memorandum handed down in the Federal Court orders receivers of the Hoosac Mills Corporation, with factories in North Adams. New Bedford-and Taunton, to disregard a National Reconstruction Act order to curtail production 25% during January and to continue to operate the mills at the present peak of 66.2% of loom capacity. His order followed a showing by Receivers William M.Butler and James A. McDonough of the mills that it would be necessary to close the corporation's mills for one week during the current month to accomplish the 25% reduction ordered and that such a closing, by reason of factoring contracts, would imperil continued operation of the mills. The jobs of 3,000 persons now employed in the mills were at stake, the court was informed in a petition asking the advice of the court as to what course ought to be pursued. The receivers expressed themselves as heartily in sympathy with the purpose of the 25% reduction, but pleaded that the situation facing the Hoosac Mills was different from that generally to be found in the cotton industry with prospects of a definite shutdown if the order of Hugh S. Johnson was obeyed. Ralph Pulitzer Resigns as Division Administrator of NRA in Charge of Newspaper Code---Opposition of American Newspaper Guild Prompted Withdrawal. Ralph Pulitzer,former publisher of the New York "World" announced on Feb. 1 that he had resigned as National Recovery Division Administrator in charge of the newspaper and allied codes. Mr. Pulitzer's resignation, which was sent to General Hugh S. Johnson, Recovery Administrator, was prompted by opposition expressed by the American Newspaper Guild, he said. Shortly after Mr. Pulitzer's appointment the Executive Committee of the New York Newspaper Guild sent a resolution to President Roosevelt protesting his appointment because of his previous connection with the "World," and also sent a letter to Mr. Pulitzer asking him to resign the post. Mr. Pulitzer had the following to say: I have resigned as Division Administrator of the NRA because I feel that the opposition to my appointment by the American Newspaper Guild would cast doubt on my impartiality in any question concerning its members which might come before me on Feb. 1. Another compelling reason for my resignation is that "The St. Louis Post-Dispatch" of which I am a trustee and director, feels itself embarrassed in either support or opposition to the NRA and myself while I hold this appointment. NRA Finds Some Codes Aid Price Fixing—Report of A. D. Whiteside to General Johnson Proposes Six Changes to Eliminate Causes of Excessive Prices—Embodies Suggestions for Determining Effect of Codes on Comsumer—Would Delete "Waiting Period" from Most Codes. Recent hearings before the National Recovery Adminis- tration on complaints of administration of codes revealed six types of complaints, all of which were based on price change provisions in codes, according to an analysis submitted to General Hugh S. Johnson, Recovery Administrator, by Division Administrator A. D. Whiteside, who conducted the hearings. In this report, made public Feb. 4, Mr. Whiteside incorporated several suggestions designed to eliminate the causes of excessive prices and also submitted proposals for strengthening the NRA machinery for analyzing price complaints and determining the effects of particular codes on the consumer. A Washington dispatch of Feb. 4 to the New York "Times" outlined the principal observations and recommendations made by Mr. Whiteside as follows: In a summary of the report to General Johnson, Mr. Whiteside described the fundamental types of complaints as follows: "1. The uniformity in prices and excessive price increases which apparently have arisen from the operation of open price agreements In several Financial Chronicle Volume 138 codes, particularly in those instances where a period of waiting has been prescribed between the filing date and effective date of price lists. "2. Excessive surcharges and uniform surcharges. In several industries this is largely a history of completed transactions in a situation not likely to recur immediately. Disagree on Gold Loss. "The surcharges under the gold loss schedule might, however, continue to be a source of disagreement. Even in the event of practical stabilization of the dollar gold parity, it appears likely that this schedule would be used to crystallize permanent price increases. "3. Activities on the part of groups in trades or industries which are extraneous to the codes but which are apparently the result of collective understandings which have developed through the intimate relationship established between those operating within trades and industries. "4. Limitations on cash discounts and quantity discounts which may constitute a means of raising prices, and these provisions are inserted in the respective codes as part of the fair practice definitions. "5. Limitations on the manufacture or distribution of second quality goods. "6. Interpretations of cost as a level below which no sales shall be made, which have resulted in raising prices to an unjustified level in the interest of the customer or for the permanent welfare of the industry." Mr. Whiteside pointed out that the summary, in citing six fundamental problems, does not reflect either the number or the importance of the cases involved, and that the policy of the NRA should probably not be determined until after further study and experimentation. Would End Waiting Period. Summarizing his conclusions respecting the questions in controversy, Mr. Whiteside said: "I. The so-called 'waiting period' should probably be temporarily deleted from the majority of open-price provisions. Theoretically this provision has a legitimate purpose. In practical operation it may lead to intimidation and coercion and result in a uniformity of high prices. Opportunities for monopolistic practices are available. "In the industries manufacturing necessities and basic materials the waiting period will probably result in excessive prices. A possible substitute is a provision for quoting simultaneously to the customers and competitors and others with a justified interest, safeguarded by a provision that a price once quoted must apply for a given period to all customers of the same classes or to all single delivery purchases of the same size class. This period mi.,ht vary from the 24 hours now provided in a few codes to a month, as conditions in the industry may warrant. "This does not necessarily imply that this is the only criticism of the open-price clause, but it is the only point upon which a definite conclusion seems warranted at this time. As noted above, we believe either phases of this agreement and its operationg results should be subjected to study. Upholds Cash Discounts. "2. A reasonable cash discount such as the percentage commonly used, is a long and widely acknowledged trade custom with sound justification. It seems doubtful whether the effort to eliminate the abuses of the cash discount, practiced in many trades, should extend to an abolition of even small discounts or a modification of liberal discounts. "3. The activities which have affected prices because of the intimacies established in code relationship are extremely varied, but their correction should present no great difficulty the moment abuses of this nature arise. "4. Provisions for customer classification, which serve to stiffen the quantity-discount provisions against universities and State or city governments and hospitals, apparently should be reconsidered carefully unless the same restrictions on wholesalers for orders or shipments of the same size are made. Many industries have been built up by the inducement of quantity discounts, which were amply justified by the economies of mass production. The code which ignores this fact to perpetuate existing channels of distribution is likely to be extremely difficult to enforce. "5. Provisions limiting the distribution of seconds or inferior grades, although aimed at an obvious and widespread abuse, should probably be examined in the light of at least three factors. "(a) Do the processes in the industry normally yield a constant proportion of second-class products under such conditions and would the effort to produce only first-grade products cause excessive expense or waste? "(b) Is there a valid and extensive use for a second grade because of some such factor as loss, theft, or inevitable breakage which makes durability or finish a minor objective? "(c) Can quality standardization and marking be enforced, so that the customer recognizes the grade purchased? If satisfied with seconds, at a lower price, what reasonable objection can be made to supplying subgrades? "6. It would seem desirable that considerable care be exercised to analyze the effect of proposed code provisions for defending cost as a 'price floor.' This provision appears likely in some instances to dictate a price level higher than the customers should pay in the short run, and higher than the industry can maintain in the long run. It was also stated in one Instance that the cost-accounting definitions compelled the pricing of the competitive or second-grade product so near the first-grade price that its competitive advantage was lost, and the second-grade product was therefore discontinued." Mr. Whiteside also made suggestions as to the future program of the NRA, including the setting up of machinery for analyzing "a continuous flow of the price complaints and responses" and the holding of periodic hearings to correct such abuses as may develop. He also suggested the compilation and revision of charts and graphs interpreting the "behavior of price and comparing price changes with variations in labor and material costs." Industrial Fellowship to Investigate Data on Food Merchandising—Established by Toledo Precision Devices—It Will Promote Studies of Improved Methods of Food Distribution Through Grocery Stores. An Industrial Fellowship founded to search for technical information leading to improved methods of food distribution through grocery stores was announced Feb. 3 by Dr. Edward R. Weidlein, Director of the Mellon Institute of Industrial Research at Pittsburgh. The Fellowship, which was established by Toledo Precision Devices, Inc., an associate organization of the Toledo Scale Co., will investigate problems involved in food merchandising, especially in the storage and display of food during distribution through wholesale and retail grocers. 979 A statement by the Mellon Institute added the following details: Further pertinent data, in addition to the information now available concerning changes occurring in such grocery merchandise as fresh fruits and vegetables, meats, dairy products, bread, and pastry during distribution, are expected to make foods of better quality available to the consumer, to eliminate some sources of spoilage losses to the food merchant. and to form a contribution of value to the food trades generally. Where such a course seems justifiable,information now available or acquired during the research will be published in convenient form for the use of the grocery trade. Marion D.Coulter, the incumbent of this Fellowship. was graduated from Denison University in 1920 and did graduate work at The Ohio State University leading to the M.S. and Ph.D. degrees in 1923. From 1923 until 1925 he was a member of the chemistry department of Louisiana State University at Baton Rouge, La. From 1925 until 1930 he was engaged in research on the series of fellowships on insulating lumber maintained by the Celotex Company at Mellon Institute, and during 1930-31 was a research chemist with this company at Chicago, Ill. During 1931-33 Dr. Coulter was engaged in research on food packaging problems on the Mellon Institute fellowships sustained by the Robert (lair Company, of New York. He is a member of the American Chemical Society and the Technical Association of the Pulp and Paper Industry. President Roosevelt Urges Elimination of Politics in Administering Relief—Tells State Directors of National Emergency Council to Be "Hard Boiled" and to Defy the "Most Powerful Political Boss"— Says Recovery Should Apply to All Groups. President Roosevelt on Feb. 2 advised the State directors of the National Emergency Council, meeting in Washington, that they should adopt a "hardboiled" policy in eliminating graft and partisan politics from the Administration's recovery program. He promised his hearers that they would have the staunch support'of the Administration "even if you hit the biggest political boss in the United States on the head.". The State directors visited the White House, together with Frank C. Walker, Chairman of the Council. President Roosevelt, in his address, was optimistic regarding the prospects of the recovery campaign, saying that "we are all, with some minor exceptions, behind this broad program because we feel it has done some good and that by and large it is working out pretty well." In warning the State directors to avoid the practice of partisan politics, the President remarked that it is "awfully important for the country to realize that relief—the carrying out of the principles behind the National Recovery Act, carrying out of public works and all of the other ramifications —is based on a conception that is far beyond local politics or the local building up either of a political machine or a party or personal machine." The President said that 90% of the complaints against the recovery program resulted from activities of individuals "who try to get either personal or political credit out of something that ought not to have either of these factors in the work in any shape, manner or form." Stressing the absence of political implications, Mr. Roosevelt recoiled that many of the State directors were Republicans and others were Democrats and that "quite a number do not belong regularly to one party or the other." The President's speech follows in full: I am glad you have undertaken this very great task. We have felt, as you know, for a long time that it was necessary to tie-in, in some way, the entire emergency program which,in its many ramifications, we have been undertaking from time to time. We feel also that this work of disseminating information and preventing the crossing of wires had to be done through decentralization, and that is why you are here. You are the great decentralizers for the Federal Government and in a sense, also, you are the co-ordinators between the Federal Government, the State and the local Governments. That being so, I think probably that the future success of this program is more in your hands than in the hands of any other group. Frank Walker, as National Director, has explained to you the various responsibilities you have. If you don't mind, I want to give you a few personal observations based on certain experiences—four years in Albany, war work here during the Wilson administration and a certain amount of experience in the last few months. They are: One of the most difficult tasks that I know anything about is to get around and avoid the results of certain perfectly normal and natural human impulses—impulses based on selfishness and which take certain forms well known to most of us, either the purely personal form of trying to get special authority or special credit for individual applause or aggrandizement. Another thing we run into is the idea, the thought on the part of some People, of trying to make political capital out of relief work, out of the building up of what is in many ways a new theory of the relationship not only of Government to citizen but also the relationship between employer and employee—the problem of taking care of human needs. Where we have fallen down in these past months, I would say in about 90% of the cases the falling down has been caused, quite frankly, by individuals who try to get either personal or political credit out of something that ought not to have either of those factors in the work in any shape, manner or form. This work has nothing to do with partisan politics—nothing at all. A great many of you are Republicans, a good many are Democrats—quite a number do. not belong regularly to one party or the other. We are not the least bit Interested in the partisan side of this picture. We do want you to be absolutely hard-boiled if you find any local person within your own States who is trying to get political advantage out of the relief of human needs and you will have the backing of this Administration 1,000% even if you hit the biggest political boss in the United States on the head in carrying out this general program. 980 Financial Chronicle I think it is awfully important for the country to realize that relief —the carrying out of the principles behind the National Recovery Act, the carrying out of public works and all of the other ramifications—Is based on a conception that is far beyond local politics or the local building up either of a political machine or a party or personal machine. So that is one of the things you will have a hard time fighting. I think you will be able to get the help and enthusiastic support of at least 90% of the people within your own States if that idea can be thoroughly and completely gotten across at the very inception of your work. People are going to rush to you with all their troubles. That will relieve us in Washington very greatly. You will require extraordinary patience and long hours—a smile at all times—and the carrying out of the policy of not Just the administration in a narrow sense, but the policy of what I think is the overwhelming policy of the American people to-day. We are all behind, with few exceptions, this broad program. We think it has done good. We believe we are on our way. We believe It is working out pretty well in all sections of the country. I was interested in talking yesterday to the President of one of the greatest railroads of this country. I asked him how his road was doing. His reply was that, while his road was carrying more freight and more passengers, the important fact was that the freight they were carrying revealed increases in every single classification of freight. That is the best illustration of the fact that we are building up economically in every section of the country, including practically all industries. We know the human factor which enters so largely into this picture. We are trying to apply it to all groups needing aid and assistance and not merely just a few scattered or favored groups. That is why we want from you the kind of information and kind of reports that will keep us in touch with the broad picture in every one of the 48 States. I wish I could sit in with you in all the meetings You are having. When you return to your home States you carry my very definite and distinct blessing. I hope you will not only keep Frank Walker informed, but, through him, you will keep me in touch with the problems as you find them. Let us also have any suggestions you may have to make so we can give additional help from this end whenever necessary. It has been fine to see you. Perhaps later in the spring, after you have been at work five or six months, we shall have another meeting in Washington. Wagner Praises Work of National Labor Board —Says Both Employers and Employees Support Present System of Adjusting Disputes—Affairs of 900,000 Men Have Been Handled, Chairman Declares. Senator Wagner of New York, Chairman of the National Labor Board, issued a statement Feb.3 in which he praised the record of the Board in dealing with industrial disputes, and said that "the sum-total of impressions based on reports from New England to California is that the overwhelming majority of employers and employees use, trust and support this system of industrial adjustment." The Board and its 17 regional labor boards have passed upon the affairs of more than 900,000 workers and have mediated or arbitrated the disputes, Senator Wagner declared. Further extracts from his statement follow, as given in a Washington dispatch Feb. 3 to the New York "Times": Senator Regional boards handled 1,628 cases, involving 514,321 workers, and the National Board took care of 190 cases, involving 400,000 workers. National Board settlements were 132, while regional board settlements numbered 1,021, a total of 1,153 settlements in 1,818 cases. The National Board settled 107 out of 132 strikes. "Getting along toward the million mark proves what a necessary and progressive step the President took in establishing the National Labor Board," the Senator said. "Labor in established areas continues to resort to the regional boards in preference to striking. Some boards report a greater number of strikes averted than of strikes breaking out. Other boards report a marked increase of strikes in areas to which new organizing movements are extending." Interpretation by Federal Trade Commission of Various Provisions of Securities Act. Interpretations by the Federal Trade Commission of various provisions of the Securities Act of 1933 are contained in extracts from letters in response to inquiries concerning the application of the Act to various situations. These extracts were made public by the Commission on Dec. 28. With regard thereto the Commission said: Among the more important problems discussed are the position of protective committees In connection with the registration of securities issued in reorganizations. The dealing in securities the issue of which is exempt from registration. The necessity for registering certificates of deposit issued against municipal bonds. The application of the Act to employees' stock subscription plans, and violation of the Act by intra-State sales of securities pending registration. Several letters relate to the conditions prescribed by the Act under which local security issues may be made without registration. One discusses the necessity for disclosing fees received by an investment service in connection with the preparation of a plan of reorganization which the service proposed to recommend. The Commission's interpretations were indicated as follows: These extracts are listed under the sections of the Act to which they pertain, as follows: Sections 2 (1), 2(3) and 2 (4). The facts are indicated in the following quotation: "There can be no question but that voting trust certificates are subject to the provisions of the Securities Act of 1933. The definition of the term 'security,' contained in Section 2(1) of the Act, expressly includes a 'voting trust certificate.' Every security must have an issuer. Under Section 2 (4), which again specifically mentions voting trust certificates, the term 'issuer' means the person or persons performing the acts and assuming the duties of manager pursuant to the provisions of a trust agreement. This Feb. 10 1934 can mean no one other than the voting trustees themselves. If, as seems clear from these two sections, the issue of voting trust certificates was intended to be subject to the Act, the ordinary transaction in which the certificates are delivered against the deposit of securities under the trust must have been intended to be included within the concept of a sale." Section 2 (3). The facts are indicated in the following quotation: "The Issuance of bonds carrying a conversion privilege, under Section 2 (3) of the Act, does not constitute a 'sale' of or 'offer to sell' the stock into which the bond is convertible only if the conversion 'right cannot be exercised until some future date.' According to your letter, the conversion privilege attached to the proposed bonds may be exercised at any time after the bonds are issued. For this reason, the issue of the bonds will Involve an offer of the stock which will require immediate registration of the latter. "A fee for the registration of the stock will, of course, have to be paid as well as for the bonds." Section 2 (11)• The facts are indicated in the following quotation: "In the typical reorganization procedure, the protective committee, after approval of its plan of reorganization by the bondholders, arranges the organization of the new corporation and procures the issuance of the securities of the new corporation in connection with the acquisition of the property of the old corporation. In taking these steps, the committee is represent ng the depositing bondholders as their agent, trustee or otherwise. It is difficult to regard such committee as falling within the definition of an underwriter—Section 2 (11)—since it is neither selling the new securities for the new corporation nor purchasing them with a view to their distribution. The Issuance is a 'sale' of the securities to the depositing bondholders, represented by the committee, and inasmuch as this is the case, no 'distribution,' as the term is used in Section 2 (11) of the Act, can be deemed to take place; by the committee. The 'distribution' within the meaning of the Act occurs when the securities are issued to the committee as such representative. "Under certain peculiar circumstances, of course, where the committee performs services not commonly performed by such committees but of the character that would ordinarily attend the distribution of new securities by an underwriter, the committee might well be an underwriter. But this is not ordinarily the case." Sections 2 (11) and (a) (1). A corporation made an Issue of 500,000 shares on June 20 1933. 400,000 shares were Issued to former stockholders. 100,000 shares were sold outright to an underwriter and offered to the public on the same day. At about the same time the underwriter entered into contracts with certain Individual stockholders in the corporation by which the underwriter agreed to purchase from the stockholders within a limited time additional stock of which the individuals were owners. The underwriter is continuing to offer shares from the 100,000 share block purchased from the company. It will later offer to sell the shares which it has agreed to purchase from the individual stockholders. Section 2 (11) provides: "The term 'underwriter' means any person who has purchased from an issuer with a view to . . . the distribution of any security . . . As used in this paragraph the term 'issuer' shall include, In addition to an issuer, any person directly or indirectly controlling . . . the issuer . . ." Section 3(a) provides: (I) Any ". . . The provisions of this title shall not apply to . . security which, prior to or within 60 days after the enactment of this title, has been sold or disposed of by the issuer or bona fide offered to the public, but this exemption shall not apply to any new offering of any such security by an issuer or underwriter subsequent to such 60 days". The following questions are presented: 1. In order to continue the offering of shares from the 100,000 share block, must the underwriter cause a registration of the securities? 2. If the shares in this block are exempt from registration, will an offering of any other stock of this issue by the underwriter require registration? 3. Specifically, will the offering at this time of the shares which the underwriter in June 1933, contracted to purchase from the stockholders require registration? "Section 3 (a) (1) would provide an exemption for the securities in this case unless there is involved a 'new offering . . : by an underwriter.' So far as the 100,000 additional shares are concerned, it appears that the continuation of their sale to the public by the underwriter would not constitute a new offering, since it was commenced before July 27 1933. The question, therefore, Is narrowed to a consideration of the shares owned by various stockholders in the corporation, which they have contracted to sell to the underwriter. "In applying the phrase 'new offering . . . by an underwriter,' It is the relationship between the person alleged to be an underwriter and the securities which he offers that Is to be examined. If, with reference to the block which he now offers, he is not an underwriter, the exemption to which he was entitled under Section 3 (a) (1) is not lost thereby. So the fact that the underwriter of the 100,000 shares issued by the corporation in June will now for the first time offer shares of the same stock from another block, will not necessarily cause a loss of that exemption. "It is important to notice, however, that under Section 2 (11) a person may be an underwriter within the meaning of the Act if he purchases from the controlling Interests in a corporation with a view to further distribution. In this case, therefore, it would be necessary to consider the position, within the corporation, of the persons who have contracted with the underwriter for the sale of some of their holdings, except for the fact that the contract of sale was made before July 27. "Even if the sellers held the controlling interest in the corporation so that prima facie the purchaser would be considered an underwriter under Section 2 (11). if such sellers had sold or disposed of the stock to the underwriter before July 27 1933, an offer by the latter made after that date would not cause the loss of an exemption otherwise available under Section 3(a)(1). The purpose of Section 3(a)(1) was to exempt from the necessity for registration, securities belonging to a person who had purchased before the effective date of the Act, and who could not compel the issuer to register the security. An opposite conclusion would lead to a result,—certainly contrary to that contemplated by the Act—that might make it impossible for an underwriter, who became such before July 27, to dispose of an Issue which he had purchased if it were assumed that an offering of the Issue by him after July 27 was a 'new offering . . . by an underwriter,' within the meaning of Section 3 (a) (1)•" Section 4 (1)• A corporation in default in the payment of interest on its 6% bonds outstanding proposes to the bondholders to exchange new bonds bearing lower interest. The corporation proposes to pay certain fees to brokers and investment bankers for their services in promoting the exchange. Section 4 provides: "The provisions of Section 5 shall not apply to any of the following transactions: "(1) . . . Transactions by an issuer not with or through an underwriter and not involving any public offering. . . Volume 138 Financial Chronicle "(3) The issuance of a security of a person exchanged by it with its existing security holders exclusively, where no commission or other remuneration is paid or given directly or indirectly in connection with such exchange; . . ." The question is whether there will be a "public offering" of the new bonds within the meaning of Section 4 (1). "It seems clear that offerings addressed only to security holders of a single issuer may nevertheless be 'public offerings' within the meaning of Section 4 (1). Otherwise the inclusion of the first clause of Section 4 (3) would have been unnecessary. If the group of security holders includes a substantial number of persons, the offering should be considered a 'public' one. This interpretation has the support of the Statement of the Managers on the Part of the House, at page 25 of the Conference Report: "Sales of stock to stockholders become subject to the Act unless the stockholders are so small in number that the sale to them does not constitute a public offering.' "It receives added support from the consideration that while the Uniform Sale of Securities Act and many of the State Blue Sky Laws contain specific exemptions relating to the issue of securities by a company to its own security holders, no such specific exemption was included by Congress." Section 4 (1). The facts are indicated in the following quotation: "It is difficult to regard the contemplated offering of stock to 2,450 employees of the X corporation as not being a 'public offering' within the meaning of Section 4 (1) of the Securities Act. It is clear that the word 'public' as used in this provision is not limited to offers which are made indiscriminately and open to anyone. For example, an offering confined to the security holders of a corporation may nevertheless be a 'public offering' within the meaning of Section 4 (1). Otherwise the first clause of Section 4 (3) would be superfluous. Where a substantial number of persona Is involved, it would seem imprudent to rely upon the second clause of Section 4 (1) to give an exemption." Section 4 (1). The facts are indicated in the following quotation: "Securities, issued in exchange for securities of the same issuer to existing security holders in such a way that the exchange is exempt under Section 4 (3) of the Securities Act, may be traded in by dealers within a year of their last public offering, although no registration statement is in effect and no prospectus complying with Section 10 is furnished. "Although Section 4, as distinguished from Section 3, exempts transactions and not the securities themselves, where the transaction exempted is an otherwise non-exempted offering of an issue by an issuer and consequently the issuer is relieved of the duty of filing the registration statement, the dealer may sell through the mail and in inter-State commerce without a registration statement, unless, of course, there is a new offering of the security by the issuer or an underwriter. A study of the Act indicates that in every instance the duty of filing a registration statement is placed upon either the issuer or a person who can control the issuer and thus compel the issuer to file the necessary statement. This being so, an exemption as to this group of persons would carry throughout the line of distribution to the dealer. True, in the ordinary case a dealer may not sell within one year after the public offering unless a registration statement is in effect. But the ordinary case presupposes that the issuer or some one in control of the ssuer must file a registration statement as a condition precedent to making the offering. This basic presupposition upon which the dealer recr..aement of Section 4 (1) rests, being removed the dealer limitations in Section 4 (1) have no applicability." Section 4 (3). The facts are indicated in the following quotation: "Your letter raises the question whether cretificates of deposit representing bonds exempt under Section 3 (a) (2), which are deposited under an agreement with a protective committee, enjoy any exemption under the provisions of the Act referred to. It is difficult to see how the exemption there provided could possibly be applied to such certificates. Under Section 2(4) it is clear that the committee is the 'issuer' of the certificates. Certainly the committee cannot be considered as falling within any of the classes of issuers named in Section 3 (a) (2). So far as this provision of the Act is concerned, registration of the certificates appears necessary." Section 5 (c). Section 5 (c) provides: "The provisions of this section relating to the use of the mails shall not apply to the sale of any security where the issue of which it is a part is sold only to persons resident within a single State or Territory, where the Issuer of such securities is a person resident and doing business within, or if a corporation, incorporated by and doing business within, such State or Territory." The holders of certain bonds of a corporation resided outside of the State in which the issuer was incorporated and doing business. In order to carry out a reorganization without registration under the Act it was proposed to have the non-resident bondholders represented by an attorney resident within the State of the issuer's incorporation. "Your inquiry is whether the exemption provided by Section 5 (c) can be secured by having the non-resident bondholders represented by a resident attorney. The conditions of Section 5 (c) must be met in substance, not merely inform, The submission of the plan of reorganization to an attorney for non-residents is really a submission to the non-resident principals. In such an instance, Section 5 (c) would seem inapplicable." Section 5 (c). A company incorporated and doing business in X filed a registration statement covering a new issue of its securities. Pending the effectiveness of this statement it proposed to sell securities from this issue to residents of X by the use of the mails within that State. After the statement should become effective, it contemplated the sale of the remaining portion of its issue to non-residents. "The Securities Act will not permit you to use the mails inside the State of X for the sale of your securities until a registration statement is effective unless, in accordance with the provisions of Section 5 (c), the entire issue is to be sold to residents of that State. It is understood that you plan to sell part of the issue to non-residents of X as soon as the registration statement becomes effective. If this is done, the conditions of Section 5 (c) will not be met, and any use of the mails for sales within the State pending an effective registration will be a violation of the Act." Section 5 (c). The facts are indicated in the following quotation: "The conditions which must be met in order to secure the exemption provided in Section 5 (c) of the Securities Act relate only to the original issue of the securities. The fact, therefore, that residents of the State subsequently resell to persons outside of the State does not have the effect of destroying this exemption. Of course, the conditions must be met in substance as well as in form. Sales cannot be made by the corporation to residents with a view to their distribution in other jurisdictions. If later, 981 however, the purchaser resells outside of the State. the corporation will not be liable, as has been indicated, and the purchaser himself will not violate the Act in view of the exemption provided in the first clause of Section 4 (1)." Section 5 (c). The facts are indicated in the following quotation: "The forwarding of an offer of a security addressed to a person within the State to a point outside the State would not involve the loss of an exemption otherwise available under Section 5 (c). A subscription received from a non-resident as a result, however, should not be accepted." Section 5 CC) A company incorporated and doing business in X proposed to insert an advertisement of its new issue of securities in a newspaper published within the State, part of the circulation of which extended into other States. It proposed to insert in its advertisement the following clause: "This is open only to residents of the State of X." "The exemption provided by Section 5 (c) refers only to the provisions of Section 5 (a) and (b), which relate to the use of the mails. The use of any II108114 or instruments of transportation or communication in inter-State commerce, whether it were mail, express, freight, telephone or telegraph. would require registration. This would be true even though the specific conditions of Section 5 (c) were met—that is, even though the issue were sold entirely to the residents ofthe State in which the issuer was incorporated and doing business. The clause suggested, therefore, seems insufficient but it would seem possible to frame a clause which would have the effect of nullifying the advertisement as an offer as soon as it entered inter-State commerce." Section 8. After the effective date of issuer's registration statement, certain changes in the condition of the issuer occurred of which the issuer wished to give prospective investors notice. Two questions were presented—whether it was necessary to amend the registration statement and how the information should be published in any prospectus of the issuer. "Under Section 11 the accuracy of the registration statement is to be judged by the date upon which it becomes effective. It is, therefore, unnecessary,and probably impossible,to amend it to include facts which occur after its effective date. It may, of course, be necessary to supplement the information contained in the prospectus in order that it may not be misleading within the meaning of Sections 12 (2) and 17. The use of supplementary information. however, does not require an amendment of the prospectus, and no further papers need, therefore, be filed with the Commission. On the other hand, if it is proposed to substitute new information for that contained in the prospectus,since under the rules of the Commission the prospectus must not omit certain items contained in the registration statement, such changes can be effected only by a regular amendment to the statement filed with the Commission. In any case in which it could properly be made, such an amendment, being filed after the effective date of the registration statement, would become effective itself, under Section 8 (c) of the Act.'on such date as the Commission may determine, having due regard to the public interest and the protection of investors' ". Section 17 (b). A security statistical service company, which publishes periodically a pamphlet containing ratings for securities and advice as to their purchase, sale or retention, was employed to assist in the preparation of a reorganization plan. For this work it was to receive a flat fee not contingent upon the success of the reorganization. The company proposed to recommend in its periodical pamphlet that bondholders of the corporation being reorganized adhere to the plan by depositing with the committee. The question was raised by the company whether it should disclose the amount of the fee which it was to receive for its work in preparation of the plan thus recommended: "The question raised requires a consideration of Section 17 (b) of the Securities Act. The provisions of that section are clear. Whether it will be necessary to state the amount of the fee received by the X company for its services depends entirely upon whether any part of the fee was actually contracted for in the expectation or with the understanding that the reorganization plan would be recommended by the company. Such an expectation may result from the ordinary course of business of the company. If this expectation or understanding was a consideration in retaining the X company,it seems clear that the fee paid to it will be one the receipt and amount of which must be disclosed under the Act." Federal Trade Commission Issues Stop Order Against Muscle Shoals Realty Associates—Temporarily Suspends Effectiveness of Registration Statement Filed Under Securities Act. Announcement was made Jan. 9 by the Federal Trade Commission that it had issued a stop order gainst Muscle Shoals Realty Associates (2-493), Caldwell, N. j.; a realestate commission business, suspending the effectiveness of a registration statement filed under the Securities Act until deficiencies therein have been corrected. The Commission's announcement said: Among deficiencies and inaccuracies were failure to have its balance sheet prepared by an independent certified or public accountant; failure to reconcile and tie in its prospectus with data in the registration statement, and failure to state the remuneration paid to each director. This concern filed for registration an issue of 125,000 shares of common stock with a view to raising $150,000 capital gross. The company said it Proposed to purchase and develop land at Muscle Shoals, Ala.. and elsewhere but in its registration statement did not give a list of States in which It owned property. John H. V. Curtis, Caldwell, N. J., Treasurer and Manager of the company, appeared in its behalf at a Commission hearing. Federal Trade Commission Acts on Trade Practice Conference Rules of Cleaning and Dyeing Industry of Pennsylvania. The Federal Trade Commission announced on Jan. 11 that it had acted on trade practice conference rules of the cleaning and dyeing industry of Pennsylvania and adjacent territory. The rules were adopted by the industry at a conference held in Philadelphia June 14 1933. The Commission's announcement continued: Rules approved by the Commission relate to practices such as representing prices as "special" when they are regular prices; selling goods below cost; 982 Financial Chronicle secret payment of rebates; defamation of competitors, and enticing employees of competitors. Another rules approved concerns the practice of inciting, aiding or abetting, singly or together with others, anything unlawful in connection with a strike, dispute or labor trouble between a competitor and his employees. The practice of falsely advertising that garments are cleaned or dyed at unusually low prices when such advertised prices apply only to the partial processing of garments or fabrics is declared by the industry to he unfair. For one concern to simulate a style of store front and signs of a competitor, with the intention of gaining the customers of the competitor by falsely leading them to believe that the business of that competitor is being conducted by the concern doing the copying, was also deemed an unfair trade practice. The Commission received as expressions of the trade a number of rules designed Group II. The annual business in this industry in Pennsylvania and adjacent States is said to be about $20,000,000. In Philadelphia alone there are believed to be more than 40,000 persons dependent on it for a livelihood. The Pennsylvania members of the industry carry on business also in Maryland, Delaware and West Virginia. Chancellor Chase of New York University to Address Annual Banquet of Trust Division ABA in New York Feb. 15. Dr. Harry Woodburn Chase, Chancellor New York University, will be the speaker of the evening at the twentythird annual banquet of the Trust Division, American Bankers Association, to be held at the Waldorf-Astoria the evening of Thursday, Feb. 15. His subject will be "Our Human Resources." The banquet will bring to a close the annual three-day mid-winter trust conference which will be held under the auspices of the division Feb. 13 to 15. Deposits Location FloridaMilton LaGrange St. Elmo Sterling Pinckneyville Hawarden West Union MassachusettsFranklin Flora MinnesotaBembil Lake Crystal Additional 69 National Banks Licensed to Open During January-Reorganization Plans of 27 National Banks Approved by Comptroller of Currency. Sixty-nine National banks, with $68,966,000 frozen and $6,983,000 unrestricted deposits, were licensed and opened or reopened during the month of January,J. F. T. O'Connor, Comptroller of the Currency, announced Feb. 6. This compares with 77 National banks, having $78,628,703 frozen and $4,125,000 unrestricted deposits, licensed during the month of December, and with 46 National banks, having $51,706,000 frozen and $4,287,000 unrestricted deposits, licensed during the month of November. The Comptroller further said: During the final 21 days of Jan. 51 unlicensed National banks, one insolvent State bank and one insolvent National bank were licensed and reopened as National banks. All of the 51 unlicensed National banks, with $30,634,000 frozen and $5,355,000 unrestricted deposits, had been in the hands of conservators. The one insolvent State institution to reopen under the jurisdiction of the Comptroller of the Currency was the Union ndustrial Trust Co. of Flint. Mich., with deposits of $3,692,000. The Jan. 27 $311,000 $52,000 First National Bank First National Bank First National Bank First National Bank Jan. Jan. Jan. Jan. 16 19 25 31 483,000 157,000 1,145,000 641,000 307,000 $2,421,000 $573,000 $25C.000 225,000 $42,000 50,000 $505,C00 $92,000 Franklin National Bank_ ....._ Jan. 15 $1,061,000 $212,000 Jan. IF First National Bank Fayette County National Bank Jan. 31 Garfield Fords Collingswood New YorkBeliport Cato Philmont Ovid Brockport Windham New Rochelle_ .... _ Buffalo Buffalo Lisbon Middletown New York Corona Pine Bush 19,000 247,000 43,000 Bright National Bank Jan. 31 $292,000 $31,000 First National Bank First National Bank Jan. 30 $6,177,000 Jan, 24 1,003,000 5433,C00 64,000 $7,180,000 - $497,000 Northern National Bank..... Jan. 29 Jan. 29 First National Bank $413,000 651,000 $23,000 42,000 $1,034,000 868,000 8839,000 852,000 Jan. 18 $2,409,000 First National Bank Jan. 13 232,000 Fords National Bank Jan. 29 Bank_ National 094.000 Collingswood $180.000 30,000 149,000 83,635.000 $359,000 $331,000 526,000 373,000 594.000 1,228,000 374,000 6,719,000 1,110,000 994,000 233,000 4,467,000 604,000 395,000 $19,000 20,000 68,000 145,000 28,000 382.000 102,000 75,000 22,000 251.000 34,000 53,000 532,000 17,000 NebraskaHastings Unrestricted First National Bank MichiganFlint Norway Date Frozen Indiana- New Jersey-. New Course Added to Curriculum of St. John's University, Brooklyn-Starts Feb. 6-Intended For Prospective Accountants and Business People. .A new course in "Investments" has been added to the curriculum of St. John's University School of Commerce, Brooklyn, it is announced by Dean Joseph C. Myer. Registration is now going on for this course, which is scheduled to begin on Feb. 6. The course will be conducted by Leo R. Wolferman, Investment Counsel, and will be intended for prospective accountants, economic students, and business people. Included in the subject matter of the course will be a review of the development of investment securities, stock exchanges, and the Federal banking system with respect to current legislation. Consideration will also be given to the Dow Theory and other modern interpretations of market movements. Although attention will be given to the flotation of stock and bond issues, emphasis will be placed primarily on what every prospective investor should know about the types of investments and the proper time for buying and selling securities. Name of Bank Illinois- Iowa- Annual Convention of Illinois Bankers Association to Be Held at Springfield, Ill., May 21-22. J. E. Mitchell, President of the Illinois Bankers'Association, announces that the next annual convention of the Association will be held in Springfield on May 21-22 1934. The Abraham Lincoln Hotel has been designated convention headquarters and all sessions will be held there. Henry G. Bengel, Vice-President of the Illionis National Bank, Springfield, is Chairman of the Hotel Committee. The Springfield Clearing House Association, through its Secretary, F. H. Luers, extended the invitation and will have charge of local arrangements. The members are: First National Bank, Pascal E. Hatch, President; Illinois National Bank, Logan Coleman, President; Springfield Marine Bank, G. W. Bunn, President. Feb. 10 1934 one insolvent National bank to reopen was the Citizens National Bank of Frostburg, Md, with deposits of $1.162,000. Throughout the period Jan. 11 to Jan. 311934, both Inclusive, 20 banks received approvals for their reorganization plans from the Comptroller's Department. Of these, 17, with $8,461,000 frozen and $1,111,000 unrestricted deposits, are unlicensed National banks which previously had disapproved reorganization plans; two, with $519,000 frozen deposits, are insolvent National banks, and one. with $514,000 frozen and $225,000 unrestricted deposits, is a restricted State institution reorganizing as a National bank. The insolvent Natioral banks to receive approved reorganization plans are the First National Bank of Newfield, N. J., with $127,000 deposits, and the Citizens riational Bank of Hammond, N. 1., with $392.000 deposits; while the State instkution to win an approved reorganization plan is the Cotton Belt Bank & Trust Co. of Pine Bluff, Ark. At the close of busin as Jan. 31 1934 there were 337 unlicensed National banks in the United States (including three non-member banks In tne District of Columbia, which are directly under the Comptroller's jurisdiction). Of these, 288 banks, with $Z64,289.000 frozen and $24,559,000 unrestricted deposits, have approved reorganization plans, while 69 banks, with $52,805,000 frozen and $4,184.000 unrestricted deposits, have dig. approved plans of reorganization. Below is a list of the 51 National banks which consummated their reorganization plans and were issued licenses to resume business or were granted charters for new banks to take over tht business of the old ones during the 21 days ending and including Jan. 31 1934: Nebraska National Bank Jan. 22 Jan. Bellport National Bank Jan. First National Bank Jan. First National Bank Jan. First National Bank Jan. First National Bank Jan. Bank National First Jan. National City Dank Jan. East Side National Bank Jan. Lincoln National Bank Jan. First National Dank Jan. Bk.&Tr. Nat. Merchants First Jan, Flmhurst National Bank Jan. Newton National Bank Pine Bush National Bank__ -- Jan. 13 15 18 15 25 25 22 22 22 23 23 23 23 24 $18,480,000 81,216,000 North DakotaMunich Hampton OhioClreenville PennsylvaniaDickson City Donneautville__ _ _ deranton Rewartstown Farentum Yardley Reynoldsville...__ McKeesport Freeland Jan. 27 First National Bank First National Bank .... Jan. 29 $68,000 79,000 $28,000 13,000 $147,000 $41,000 $382,000 $32,000 11 $1,040,000 17 196,000 18 2,568,000 18 504,000 15 1,607.000 22 189,000 23 483,000 27 1,772,000 29 1,970,000 $72,000 44,000 515,000 26,000 412,000 65,000 19,000 230,000 43,000 Greenville National Bank.-- Jan. 18 Dickson City National Bank_ First National Bank Union National Bank First National Bank First Nat'l Bank dr Trust Co_ Yardley National Bank Peoples National Bank Union National Bank First National Bank Jan. Jan. Jan, Jan. Jan. Jan. Jan. Jan. Jan. 810.691.000 81,458,000 TennesseeFayetteville Fayetteville Fayetteville TexasLovelady DlarksvIlle Elk National Bank Farmers National Bank First National Bank First National flank First National Bank West VirginiaFirst National Bank vionongah '..ogan Wisconsin- • iudson_ • First National Bank Jan. 22 Jan. 22 Jan. 22 Jan. 20 Jan. 29 Jan. 17 Jan. 22 National Bank of Hudson..._ Jan. 20 Grand total (51 banks).- $572,000 118,000 251,000 $97,000 25,000 124,000 $941,000 $246.000 891,000 267,000 $14,000 11.000 $358,000 $25,000 $181,000 1,814,000 $17,000 311.000 $1,995,000 $328,000 8347,000 866,000 $50,634,000 $5,350,000 There follows a list of the National banks whosf reorganization plans wen approved during the final 21 days of January, with frozen and unrestricted deposits of each: Name of Bank Date Frozen Unrestricted AlabamaRussellville First National Bank Jan. 20 $211,000 $27,000 ColoradoFort Morgan Rads First National Bank First National Bank Jan. 11 Jan. 22 $510,000 103,000 $66,000 46,000 $618,000 $112,000 GeorgiaWaycross First National Bank Jan. 27 $655,000 $49,000 IdahoRigby Rigby National Bank Jan. 24 $122,000 851.000 Michiganlironson Rowell Peoples National Bank First National Bank Jan. 29 Jan. 22 $199,000 372,000 $25,000 32,000 $571,000 $57,000 893,000 $18,000 First National Bank Jan. 12 Deposits Location South CarolinaOrangeburg Edisto National Bank WisconsinEdgerton Painesville National Bank_ _ -- Jan. 23 81,356,000 PennsylvaniaBurnside Burnside National Bank WashingtonColfax Vancouver Tonasket 2 $781,000 $105,000 558,000 340.000 396,000 60.000 23.000 35,000 $2,115,000 $223,000 Jan. 2 $1,415,000 3369.000 $275,000 331.000 _ _______ $13,478,090 81,628.000 The following compilation shows the seven National banks whose reorganization plans were approved during the first 10 days of January, with frozen and unrestricted deposits of each: Deposits. Name of Bank. Date. Frozen. North CarolinaCherryvIlle CherryvIlle National Bank. _ Jan. 29 TexasAransas Pass $54,000 4 5 6 Jan. 9 First National Bank Grand total (16 banks)_ Unrestricted Jan. 6 $1,174,000 State National Bank PennsylvaniaFirst National Bank Jan. Birdsboro Fleetwood First National Bank & Trust Jan. Co. of Fleetwood Jan. Hastings First National Bank Jan. Oxford Farmer's National Bank Location. OhioPainesville Date Name of Bank Frozen OklahomaShawnee Deposits Location NebraskaDecatur 983 Financial Chronicle Volume 138 First National Bank Jan. 18 flunutsLanark 8172,000 599,000 Farmers National Bank Jan. 12 Vancouver National Bank-- -- Jan. 31 First National Bank Jan. 29 8690,000 759,000 197,C00 31,646,000 WisconsinSoldiers Grove__ -- First National Bank Oconto Citizens National Bank Jan. 25 Jan. 27 Grand total (17 banks)_ _ First National Bank Jan. 10 $399,000 334.000 IndianaHartford City-- First National Bank Jan. 3 1332,000 $52,000 KentuckyClinton First National Bank Jan. 4 $272,000 329,000 South DakotaPierre First National Bank 814.000 $99,000 Jan. 11 Unrestricted $181,000 COO 881,000 Jan. 10 $522,000 349,000 $304,000 37,000 43.000 TexasPearsall Pearsall Nat. Bk.In Pearsall.. Jan. 3 877.000 59,000 8384.000 WashingtonWalla Walla First National Bank Jan. 3 81,392,000 $155,000 881,000 735,000 817,000 111,000 5816,000 8128,000 West VirginiaWilliamstown _ Farmers & Mechanics Nat.Bk. Jan. 3 Grand total (7 banks) 36,461,000 $1,111,000 $145,000 314.000 $3,135,000 5342.000 RECAPITULATION. RECAPITULATION. Deposits. No. Frozen. Deposits lUnrestricted No. Frozen No.of banks and &posits approved on Jan. 10'34 No. of banks and deposits approved Jan. 10 to Jan. 31 1934 No. of banks and deposits disapproved Jan. 10 to Jan. 31 1934 No. of banks and deposits opened Jan. 10 to Jan.31 1934 Grand total Jan. 31 1934 326 3315,163,000 $29,284,000 17 343 6,461,000 6,701,000 481,000 50.634,000 5.355,000 During the first 10 days of January 16 National banks, with $13,478,000 frozen and $1,628,000 unrestricted deposits, were licensed and opened or reopened. All of the licensed institutions had been in the hands of conservators. Seven National banks, with $3,139,000 frozen and $342,000 unrestricted deposits, received approvals for their reorganization plans from the Comptroller's Department during the first 10 days of this month. All of them previously had received disapproved reorganization plans. At the close of business Jan. 10 1934, there were 428 unlicensed National banks in the United States (including three non-member banks in the District of Columbia, which are directly under the Comptroller's jurisdiction). Of these. 326, with $314,977,000 frozen and 329,295,000 unrestricted deposits, had approved reorganization plans; while 102 banks, with 366.456,000 frozen and $5,564,000 unrestricted deposits, had disapproved reorganization plans. The deposit figures are based on the Oct. 25 1933, "call." Below is a list of banks which consummated reorganization plans and were issued licenses to resume business or were granted charters for new banks to take over the business of the old ones during the period Jan. 1 to Jan. 10 1934, inclusive: Date. Frozen. KansasIndependence.- _ First Nat. Bk in Independence Jan. 4 81,968,000 MichiganOntonagon Ishpeming First National Bank Miners National Bank New JerseyEast Rutherford_ Paterson Jan. 6 Jan. 8 $395,000 823,000 168,000 82,280,000 8191,000 Jan. 9 $546,000 $53,000 Jan. 5 First National Bank Nat. Bank of Am.in Paterson Jan. 2 8406,000 1,863,000 $47,000 87,000 $2,269,000 $134,000 North DakotaPortland The First & Farmers Nat. Bk_ Jan. 5 $285.000 $57,000 Ohio-Powhatan Point_ First National Bank St. Clairsville. _ _ _ First National Bank $152,000 999,000 $16.000 105,000 $1,151,000 $121,000 3,139.0001 342,000 344 8328.787,000,830,972,000 16 2 18 $13,478,04 $1,628,000 332.000, 49.000 1 $13,810,000 $1,677,000 326 $314,977,000 829,295.000 Jan. 6 Jan. 3 In our issue of Jan. 13 (page 274) we gave a previous list issued by the Comptrolkr showing those banks which had been licensed to reopen and which had had their reorganization plans approved during the 10 days ended Dec. 30. Statistics by Comptroller of the Currency Concerning National Banks in Oklahoma-Six of 16 Banks Reopened Since Banking Holiday-Reorganization Plans of Four Approved, One Disapproved, and Five Banks in Hands of Receivers. Following the banking holiday of last March there were 16 banks in Oklahoma which failed to receive licenses to reopen. Of this number, it is pointed out in a letter to the "Daily Oklahoman" by J. F. T. O'Connor, Comptroller of the Currency, six have reopened, five have bowl placed in the hands of receivers, and the reorganization plans of four have been approved and one disapproved. The letter follows: Washington. Unrestriaed $271,000 2,009,000 MassachusettsEast Pepperell. _ _ First National Bank 7 $325,648,000 830,630,000 COMPTROLLER OF THE CURRENCY. Deposits. Name of Bank Grand total 337 $264,289,000 524,559,000 As to thosa National banks which were licensed and opened or reopened during the first O days of January, the Comptroller announced as follow. on Jan. Location. No. of banks and deposits opened Jan. 1 to Jan. 10 1934 Banks disapproved after being approved 5314,923,000 829,914,000 El 248 No.of banks and deposits approved on Jan. 1 '34 No. of banks and deposits approved Jan. 1 to Jan. 10 1934 1,111,000 $321,624,000 330,395,000 4 339 Unrestriaed Jan. 131934. Mr. Ed Hadley, Correspondent, The "Daily Oklahoman," 1241 National Press Building, Washington, D. C. Dear Sir: Referring to your recent request for a list of National banks in the State of Oklahoma remaining closed after the banking holiday which ended March 15 1933, that have since reopened and the percentage of deposits released in each case: There were 16 National banks in the State of Oklahoma that failed to receive licenses following the banking holiday, involving $7,470,000 in deposits. Since that time, six (6) of this number have been reopened, rehabilitated, reorganized under new charters or the acceptable assets sold to another bank or banks, involving $5,027,000; an additional four banks have approved plans of reorganization in various stages of consummation, involving $1.374,000 in deposits, and only one bank, with $395,000 deposits, at the present time does not have an approved plan of reorganization. Five banks are in the hands of receivers for the purpose of stock assessment and liquidation, involving $674,000 in deposits. For your information, the following banks have been reopened along the lines stated above: 984 Financial Chronicle % % UnSecured secured Deposits Deposits Released Released City. Name of Bank. Frozen Deposes Involved. Wetumka Ardmore Hooker Frederick Ponca City _ __Shawnee American National Bank First National Bank Farmers & Merchants Nat. Bank_ First National Bank First National Bank State National Bank $395,000 1,884,000 129,000 398,000 952,000 1,269,000 100 100 100 100 100 100 100 100 100 100 65 45 $5,027,000 Below is the list of banks having approved plans of reorganization: City. Chickasha Perry Walters Walters Name of Bank. First National Bank First National Bank American National Bank Walters National Bank % % UnSecured secured Deposits Deposits to Be to Be Released Released Frozen Deposits Involved. 5615,000 407,000 131,000 221,000 100 100 100 100 70 85 45 35 $1,374,000 The following bank has a disapproved plan of reorganization: Security National Bank, Clinton, Okla., with $395,000 frozen deposits involved. None of this institution's secured or unsecured deposits have been released. A list of the five banks which have been placed in the hands of receivers follows: Feb. 10 1934 At the present time, the following banks have disapproved plans of reorganization: City. Denver Eades Eaton Fort Morgan_ La Junta % UnSecured secured Deposits Deposits Released Released Frozen Deposits Involved. Name of Bank. South Broadway National Bank.. First National Bank First National Bank First National Bank First National Bank $239,000 112,000 254,000 516,000 278,000 None None :•1 $1,399,000 The following banks are in the hands of receivers: City. Cortez Trinidad Golden La Veta Aurora Central City_ __ mancos Castle Rock__ Name of Bank. Montezuma National Bank Trinidad National Bank Rubey National Bank First National Bank First National Bank First National Bank First National Bank First National Bank % UnSecured secured Deposits Deposits Released Released Frozen Deposes Involved. $196,000 526,000 656,000 30,000 336,000 222,000 232,000 188,000 None None $2,386,000 Very truly yours, J. F. T. O'CONNOR,.Comptroller. City. Carnegie Waynoka Cement Cherokee Cherokee Name of Bank. First National Bank First National Bank First National Bank Cherokee National Bank Farmers National Bank Frozen Deposits Involved. $103,000 105,000 85,000 244,000 137,000 % UnSecured secured Deposits Deposits Released Released None None $674,000 Very truly yours, J. F. T. O'CONNOR, Comptroller. Statistics by Comptroller of the Currency Concerning National Banks in Colorado-23 Banks with Deposits of $8,585,000 Failed to Receive Licenses Following Banking Holiday-Reorganization Plans of Only Five Still Unapproved with Deposits of $1,399,000. J. F. T. O'Connor, Comptroller of the Currency, in a letter to the "Associated Press," reveals that there were 23 National banks in Colorado that failed to receive licenses following the banking holiday of last March, and that one bank, which had been licensed, was later placed in the hands of a conservator. Since the holiday, the Comptroller notes,four banks have reopened, seven have approved reorganization plans, and five have reorganization plans not yet approved. Eight of the banks have been placed in the hands of receivers. The letter said: COMPTROLLER OF THE CURRENCY. Washington. Jan. 15 1934. Mr. Scott Hershey, "Associated Press," Washington, D. C. Dear Sir: Referring to your recent request for a list of National banks in the State of Colorado remaining closed after the banking holiday which ended March 15 1933, that have since reopened and the percentage of deposits released in each case: There were 23 National banks in the State of Colorado that failed to receive licenses following the banking holiday, involving $8,585,000 in deposits. In addition, one other National bank which was licensed has subsequently been placed In the hands of a conservator, with deposits of $428,000. making an aggregate of $9,013,000. Since that time,four banks have been reopened, rehabilitated, reorganized under new charter or the acceptable assets sold to another bank or banks, involving $2,094,000; an additional seven banks have approved plans of reorganization in various stages of consummation, involving $3,134,000 in deposits, and only five at the present time do not have approved plans of reorganization, involving $1,399,000. Eight banks have been placed in the hands of receivers for the purpose of stock assessment and liquidation, involving $2,388,000. For your information, the following banks have been reopened along the lines stated above: City. Montrose Meeker Paonia Grand Junction. Name of Bank. First National Bank First National Bank First National Bank Grand Valley National Bank _ Frozen Deposits Involved. $829,000 253,000 160,000 852,000 % % UnSecured secured Deposits Deposits Released Released 100 100 100 100 100 100 53 50 $2,094,000 Statistics by Comptroller of the Currency Concerning National Banks in Iowa-Following Banking • Holiday 83 Failed to Receive Licenses of Which 37 Have Reopened-29 Banks in Hands of Receivers. In response to requests for a list of National banks in the State of Iowa remaining closed after the banking holiday which ended March 15 1933, that have since reopened and the percentage of deposits released in each case, J. F. T. O'Connor, Comptroller of the Currency, hasissued the following report, which is complete up to the close of business of Jan. 16 1934: There were 83 National banks in the State of Iowa that failed to receive licenses following the banking holiday, involving $41,105,000 in deposits. Since that time,37 of this number, with $29,358,000 in deposits, have been reopened, rehabilitated, reorganized under new charters or the acceptable assets sold to another bank or banks; an additional 15 involving $36,684,000 in deposits, have approved plans of reorganization in various states of consummation, and only two (2) banks, involving $352,000 in deposits, at this time do not have approved plans of reorganization. Twenty-nine (29) banks, with $4,713,000 deposits, are in the hands of receivers for the purpose of stock assessment and liquidation. The following banks have been reopened along the lines stated above: City. Name of Bank. Frozen Deposits Involved. Ames Churdfui Council Bluffs Coon Rapids- -Atlantic Cedar Falls_ __. Manning Primghar Des Moines Muscatine Winfield Tipton Farragut Sibley Arlington Clarion Creston Colfax Sioux City McGregor Fort Dodge.... Pella Knoxville Valley Junction Glidden Humboldt Red Oak Boone Webster City-Hampton Charles City --Washington_ __Prairie city Rockwell City OrangeCity Sumner Hawarden Ames National Bank First National Bank City National Bank First National Bank Atlantic National Bank Cedar Falls National Bank First National Bank First National Bank Valley National Bank First National Bank Farmers National Bank Tipton National Bank First National Bank First National Bank American National Bank First National Bank First National Bank First National Bank Security National Bank First National Bank Fort Dodge National Bank Pella National Bank Knoxville Citizens National Bank First National Bank First National Bank First National Bank Red Oak National Bank First National Bank Farmers National Bank Citizens National Bank Citizens National Bank Washington National Bank First National Bank Rockwell City National Bank Orange City National Bank First National Bank First National Bank $636,000 148,000 1,355,000 310,000 993,000 724,000 997,000 404.000 3,549,000 2,022,000 127,000 542,000 300,000 388,000 295,000 658,000 678,000 369,000 2,839,000 364,000 1,978,000 620,000 1,146,000 458,000 225,000 769,000 932,000 1,212,000 628,000 717,000 664,000 757,000 224,000 240,000 176,000 652,000 260,000 Name of Bank. Alamosa Boulder Boulder Englewood Fort Collins Lamar Palisades Mamma National Bank Boulder National Bank First National Bank First National Bank First National Bank Lamar National Bank Palisades National Bank Frozen Deposits Involved. $218,000 422,000 1,033,000 353.000 658,000 238.000 212,000 $3,134,000 100 100 100 100 100 100 100 100 so 75 70 70 64 80 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 1C0 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 60 100 75 100 100 50 100 40 50 55 64 50 50 50 55 60 50 60 63 70 50 100 $29,356.000 The following lathe list of banks having approved plans of reorganization: City. Name of Bank. Frozen Deposits Involved. Belle Plaine_ -Bellevue Council Bluffs.. Clear Lake Fairfield Garner Gowrie Grundy Center. Lenox Nevada Rembrandt_ _ _ _ Shenandoah Viillsca West Union_ _ Winterset Citizens National Bank First National Bank First National Bank First National Bank First National Bank Farmers National Bank First National Bank Grundy County National Bank._ First National Bank Nevada National Bank First National Bank Shenandoah National Bank VIIIIsca National Bank Fayette County National Bank._ Citizens National Bank 8387,000 386,000 1,748,000 344,000 898,000 253,000 260,000 143,000 262,000 204,000 65,000 573,000 431,000 255,000 475,000 The banks below have approved plans of reorganization: % UnSecured secured Deposits Deposits to Be to Be Released Released % % UnSecurest secured Deposits Deposes Released Released $6,684,000 % % UnSecured secured Deposits Deposits Released Released 100 100 100 100 1(.0 100 100 100 100 100 100 100 100 100 100 100 70 45 50 35 60 60 55 55 65 100 70 50 60 so 985 Financial Chronicle Volume 138 The following banks have disapproved plans of reorganization: City. Name of Bank. Crystal Lake_ _ _ Farmers National Bank What Cheer._ -- First National Bank Frozen Deposits Involved. % U7E% Secured secured Deposits Deposits Released Released None None $76,000 276,000 None None The following banks have been placed in the hands of receivers: City. Name of Bank. Farnhamville_ Henderson Everly Clearfield Lorimor Newell Ashton Chelsea Cresco Dunkerton Graettinger_ _ _ Grand River._ _ Hubbard Kanawha Kingsley Le Mars Little Rock_ _ _ _ Marathon New London_ _ Rake Rock Valley St. Ansgar Stanton Whiting Exira Hawkeye Jewell Junction_ Montour Hull First National Bank Farmers National Bank First National Bank First National Bank First National Bank First National Bank First National Bank First National Bank First National Bank First National Bank First National Bank First National Bank First National Bank First National Bank Farmers National Bank First National Bank First National Bank First National Bank New London National Bank Farmers First National Bank.._ _ _ First National Bank First National Bank First National Bank First National Bank First National Bank First National Bank First National Bank First National Bank First National Bank Frozen Deposits Involved. % UnSecured secured Deposits Deposits Releasea Released $112,000 59,000 220,000 49,000 277,000 124,000 65.000 114,000 272,000 304,000 111,000 69,000 121,000 107,000 104,000 837,000 102,000 73.000 99,000 79,000 166,000 147,000 338,000 166,000 108,000 68,000 148,000 154,000 122,000 Cherokee National Bank Peoples National Bank *Southside National Bank % UnSecured secured Deposits Deposits Released Released $1,117,000 96,000 5,494.000 None None .• •• •• Statistics by Comptroller of the Currency Concerning National Banks in West Virginia-29 Unlicensed Following March Banking Holiday-Of These 16 Have Re-Opened, 10 Have Approved Reorganization Plans and Three Are in Hands of Receivers. On Jan. 23, J. F. T. O'Connor, Comptroller of the Currency, issued a summary, giving the status of all National banks in the State of West Virginia which failed to open after the banking holiday that ended March 15 1933. His by several newspapers, 1. •, •. .1 •• and which is complete up to the close of business Jan. 18 •• 1934, follows: There were 29 National banks in the State of West Virginia, with deposits of $28,921,000, which failed to receive licenses following the banking holiday. Since that time, 16 of these institutions, involving $22,285,000 in deposits, have been re-opened, rehabilitated, reorganized under new charters or the acceptable assets sold to another bank or banks; while an additional 10 banks, with $5,979,000 in deposits, have approved plans of reorganization in various stages of consummation. Three banks, involving deposits of $657,000, are in the hands of receivers for the purpose of stock assessment and liquidation. Up to the close of business on Jan. 18 1934. the following West Virginia National banks had been re-opened along the lines stated above: •, 84,713.000 % Dividends Authorized. Name of Bank. Clearfield Lorimer Stanton First National Bank First National Bank First National Bank 25 23 55 Statistics by Comptroller of the Currency Concerning National Banks in Missouri-Banking Holiday of Last March Left 13 Unlicensed-Five Re-opened Since. The Comptroller of the Currency, J. F. T. O'Connor, has issued a summary, giving the status of all National banks in the State of Missouri that failed to open after the banking City. Frozen Deposits Involved. Name cf Bank. The National Bank Davis Parkersburg__ The Peoples National Bank of Parkersburg First National Bank Albright Empire National Bank Clarksburg Union National Bank Clarksburg Peoples National Bank Rowlesburg _ First National Bank E. Rahaelle Davis National Bank Piedmont First National Bank Piedmont First National Bank Williamson First National Bank Marlinton National Bank The Fairmont First National Bank Keyser nonceverte ____ First National Bank West Union _ ___ First National Bank First National Bank Monongah business Jan. 17 1934. It follows: There were 13 National banks, with deposits of $31.419,000, in the State of Missouri which failed to receive licenses following the bank holiday. Since that time,five of these banks. involving 522.891,000 in deposits, have been re-opened, rehabilitated, reorganized under new charters or the acceptable assets sold to another bank or banks; three, with 51,543,000 in deposits, have approved reorganization plans in various stages of consummation, and only two banks, with deposits of $278,000, do not have approved plans of reorganization. Three banks, with $6.707,000 in deposits. are in the hands of receivers for the purpose of stock assessment and liquidation. Up to the close of business on Jan. 17 1934, the following Missouri National banks had been re-opened along the lines stated above: • Name of Bank. Clayton Sedalia Maplewood_ _ St. Louis Kansas City _ Frozen Deposits Involved. First National Bank 81,235,000 Third National Bank 1,128,000 Citizens National Bank 546,000 American Exch. National Bank_ 1,576,000 Fidelity Nat. Bank dz Trust Co _- 18,408,000 % % UmSecured secured Deposits Deposits Released Released 100 100 100 100 100 100 100 100 80 62 % % UnSecured secured Deposits Deposits Released Released $406,000 100 100 3,229,000 194,000 4,311,000 4,140,000 180,000 61,000 739,000 686,000 1,556,000 325,000 4,434,000 988,000 439.000 416,000 181.000 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 75 75 100 100 45 40 90 60 80 822.285.000 plans Below is the 1st of West Virginia National banks having approved of reorganization as of Jan. 18 1934: holiday which ended March 15 1933. His report, made in response to several requests, is complete up to the close of Chit,. None report, made in response to requests Within the near future, dividends in the percentages given, will be paid to creditors of the following banks, now in receivership: City. None 86.707,000 •The Southside National Bank of St. Louis, Mo., now in receivership, has an approved plan of reorganization, which contemplates the release of 100% secured deposits and 60% unsecured deposits. $325,000 • St. Louis Seymour * St. Louis Frozen Deposits Involved. Name of Bank. City. City. Moundsville_ Wellsburg Elkins Elkins Logan Oak Rill Philippi Salem Webster Springs Williamstown Name of Bank. First National Bank Wellsburg National Bank Elkins National Bank Peoples National Bank First National Bank Oak Hill National Bank First National Bank First National Bank First National Bank Farmers ar Mechanics Nat. Bank. Frozen Deposits Involved. $366,000 640,000 946,000 293.000 1,814,000 186,000 749,000 483,000 357,000 145,000 % % UttSecured secured Deposits Deposits Releases Released 100 100 100 100 100 100 100 loo 100 100 100 55 50 70 40 60 eo eo 50 100 $5,979,000 The following West Virginia National banks were in the hands of receivers on Jan. 18 1934: City. Ansted St. Albans Charles Town_ Name of Bank. Ansted National Bank First National Bank National Citizens Bank Frozen Deposits Involved. $199,000 252,000 206,000 % UnSecured secured Deposits Deposits Released Released None None 8657.000 $22,891,000 Below is a list of the Missouri National banks which had approved plans of reorganization on Jan. 17, last: City. Name of Bank. St. Louis Grand National Bank Webster Groves First National Bank Lamar First National Bank Frozen Deposits Involved. $1,186,000 161,000 216,000 % Un% Secured secured Deposits Deposits Released Released 100 100 100 100 70 38 Mountain Grove First National Bank First National Bank Windsor Frozen Deposits Involved. $138,000 140.000 % UnSecured secured Deposits Deposits Released Released None None 8278,000 The following Missouri National banks were in the hands of receivers on Jan.117 1934: J. F. T. O'Connor, Comptroller of the Currency. The response to several requests and is complete up to the close The following banks had disapproved plans on Jan. 17 1934: Name of Bank. A summary, giving the status of all National banks in the State of Ohio which failed to open after the banking holiday that ended March 15 1933, was issued Jan. 26 by Comptroller's report, which follows, was made public in $1,543,000 City. Statistics by Comptroller of the Currency Concerning National Banks in Ohio-85 Closed Following Banking Holiday, of Which 55 Have Since Reopened-11 Now in Hands of Receivers. of busin6ss Jan. 22 1934: There were 85 National banks in the State of Ohio, with $76,190 000 in deposits, which failed to receive licenses following the banking holiday. Since that time 55 of these banks, involving E51,748,000 in deposits, have been reopened, rehabilitated, reorganized under new charters or the acceptable assets sold to another bank or banks; 14 with deposits of $14.940.000 have approved plans of reorganization in various staws of consummation, and only five, with $6,501,000 in deposits, at the present time Eleven of these banks. do not have approved plans of reorganization with $3,001,000 in deposits, are in the hands of receivers for the purpose of stock assessment and liquidation. 986 Financial Chronicle Up to the close of business Jan. 22 1934 the following Ohio National banks had been reopened along the lines stated above: City. FrozenDeposit Involved. Name of Bank. The National Bank Ashtabula Bellevue First National Bank Cantield Farmers National Bank Dayton Third National Bank & Trust Co First National Bank Fostoria Galion First National Bank First National Bank Garretsville La Rue Campbell National Bank Lockland First National Bank Citizens National Bank Marietta Milford National Bank Milford Mt. Pleasant The Peoples National Bank New Bremen First National Bank North Baltimore- - _ First National Bank Ripley Ripley National Bank Salem Farmers National Bank Springfield Lagonda-Citizens National Bank Sycamore First National Bank Tiffin City National Bank Urbana Citizens National Bank First National Bank Wadsworth National Bank of Adams County at West Union West Union Batavia First National Bank Hudson The National Bank Jackson Center--First National Bank Sardinia Farmers National Bank First National Bank • Senecaville Lowell First National Bank First National Bank Massillon First National Bank Dalton Delphos Old National Bank Bryan Farmers National Bank Bellefontalne Bellefontaine National Bank Orrville Orrville National Bank Cleves Hamilton County National Bank Forest First National Bank Dennison The Dennison National Bank Pandora First National Bank Van Wert Van Wert National Bank Wellington First National Bank Portsmouth First National Bank Kinsman Kinsman National Bank Caldwell Citizens National Bank Caldwell Noble County National Bank Summerfleld First National Bank Woodsfield First National Bank E. Palestine First National Bank Carrollton First National Bank in Carrollton Bryan First National Bank Cambridge Central National Bank Montpelier Montpelier National Bank Bellaire First National Bank St. Clairsville First National Bank Powhatan Point__ - First National Bank Greenville Greenville National Bank 31.520,000 1,158,000 305,000 7,211,000 850,000 1,216,000 644,000 119,000 2,043,000 1,729,000 380,000 325,000 382,000 549.000 480,000 1,092,000 3,601,000 147,000 587,000 577.000 869,000 307.000 332,000 430,000 333,000 262,000 151,000 636,000 2,419.000 266,000 596,000 1,383,000 952,000 610.000 469.000 280.000 880.000 278,000 805,000 157,000 4,125,000 488,000 653,000 450,000 108,000 717,000 1,220.000 492,000 750,000 818,000 427,000 2,659,000 999,000 152,000 362,000 S51,748.000 Below is the list of Ohio National banks having approved plans of reorganization as of Jan. 22 1934: City. Name of Bank. Frozen Deposits Involved. Arcanum Bellaire Bethesda Bradford Bridgeport BYesville Dillonvale Fremont Mingo Junction_ Mt. Healthy..._ Paulding Port Clinton_ St. Marys Toledo First-Farmers National Bank Farmers & Merchants Nat'l Bank_ First National Bank First National Bank Bridgeport National Bank First National Bank First National Bank First National Bank First National Bank First National Bank Paulding National Bank National Bank of Port Clinton First National Bank First National Bank E254.000 482.000 482,000 285,000 2,169,000 354,000 418,000 2,070.000 876,000 790,000 421,000 968,000 747.000 4,824,000 % Uts% Secured secured Deposits Deposits to Be to Be Released Released 100 100 100 100 100 100 100 100 100 100 100 100 100 100 50 75 40 80 65 60 60 25 ao ao 50 50 65 so 514,940.000 The following is the list of Ohio National banks which had disapproved plans of reorganization at the close of business Jan. 22 1934: City: Lorain Marietta Mt. Gilead Painesville West Milton Name 0/ Bank. National Bank of Commerce First National Bank Mt. Gilead National Bank Painesville National Bank & Trust Co First National Bank FrozenDeposits Involved. $1,945,000 2,292,000 716,000 1,358,000 192,000 $6,501,000 The following Ohio National banks were in the hands of receivers on Jan. 22 1934: City. Dunkirk Beallsville Elmore Bicksville Kansas New Matamoras_ Stockport Harveysbur8 Oak Harbor Fostoria Ansonia Name of Bank. First National Bank First National Bank First National Bank First National Bank First National Bank First National Bank First National Bank The Harveysburg National Bank First National Bank Union National Bank First National Bank FrozenDeposits Involved. $197,000 121,000 387,000 182,000 45,000 342,000 165,000 57,000 727,000 711,000 67,000 $3,001,000 •The First National Bank, Oak Harbor, now in receivership, has an approved plan of reorganization, which contemplates the release of 100% secured deposits and 40% unsecured deposits. Within the near future dividends, in the percentages given, will be paid to creditors of the following banks, now in the hands of receivers: Name of Bata. Ansonia Beallsville Kansas First National Bank First National Bank First National Bank % Dividends Authorized. 60 55 35 The Comptroller has made similar correspondence regarding the status of the National banks in Pernsylvania and Michigan-the same being referred to in our issues of Jan. 13, page 275 and Dec. 23, page 4474, respectively. Feb. 10 1934 Reopening of Closed Banks for Business and Lifting of Restrictions. Since the publication in our issue of Feb. 3 (page 798), with regard to the banking situation in the various States, the following further action is recorded: INDIANA. The St. Joseph Loan & Trust Co. of South Bend, Ind., and its affiliated institution, the St. Joseph County Savings Bank, resumed business on Jan. 30 on a normal basis after having operated under restrictions since the banking holiday of last spring, according to advices from South Bend to the Indianapolis "News," which added: Resumption in full followed a rigid audit by Federal bank examiners. LOUISIANA. A statement of the principles to govern organization of a new bank under sponsorship of the larger depositors of the Interstate Trust & Banking Co. of New Orleans, La., which was placed in liquidation by the State Bank Commissioner of Louisiana, Jasper S. Brock, on Jan. 4 last, after being operated on a restricted basis since March 21 1933, was made public on Jan. 30 by Warren Johnson, Chairman of the depositors' committee. The text of Mr. Johnson's statement, as given in the New Orleans "Times-Picayune" of Jan. 31, from which the foregoing is learnt, is as follows: The organization committee of the depositors' committee of the Interstate Trust & Banking Co. after a careful study of the affairs of that bank are agreed on the following conclusions and principles with regard to organizing a new bank: 1. There is need for, and the city can properly support, another bank with a capital structure of, say between $500,000 and $750,000. 2. If they care to do so, the old depositors of the Interstate Trust & Banking Co. have first right to any and all benefits or potential value that might accrue to the new bank from the old bank. 3. The new bank will be of benefit to the depositors in the liquidation of the old bank. 4. The capital paid-in, surplus and paid-in undivided profits of the new bank should be at least $500,000, of which one-half will be sought from the Reconstruction Finance Corporation; the other one-half coming from the depositors in the old bank and other subscribers. 5. Executive officials of the old bank will not constitute the official Personnel of the new bank and the board of directors of the new bank will not be controlled by any officers or by any members of the board of the old bank. 6. The officials of the new bank and members of its board of directors will be named by the organization committee, subject to the approval of the new stockholders and must meet the approval of the Governmental authorities. 7. Subscription to the capital stock of the new .bank by depositors of the old bank will, unless each depositor desires otherwise, be payable only out of liquidating dividends paid by the old bank. or The paper mentioned continued: The committee further stated that it is now considering the question as to whether the new bank should be a State or National bank, and all other matters with reference to the organization of a new bank and expects to be able to make a definite announcement with regard thereto within the next few days. Records to Be Moved. Chief Examiner 0. H. Pittman of the State Banking Department, who is one of the two special agents of Commissioner Brock in charge of the liquidation of the Interstate Trust & Banking Co., Walter Cook Keenan being the other, stated Tuesday that at the end of the business day to-day all records in the Carondelet office and the three branches, Freret Street, St. Claude and Algiers, will be moved to the main bank building at Canal and Camp streets. All the branch offices are to remain closed thereafter. Members of the depositors' committee stated that in the event of the successful organization of a new bank as projected, it is contemplated that the new institution's management might decide to occupy the Carondelet offices of the Interstate bank. MARYLAND. The reopening on Jan. 29 on an unrestrictedasis of the Elkton Banking & Trust Co. of Elkton., Md., was indicated in the Baltimore "Sun"of that date. The institution operates three branches in Cecil County, located at Rising Sun, Chesapeake City and Cecilton. Since the banking holiday the trust company had been operated on a restricted basis under the supervision of Oscar P. Comegys, senior bank examiner. The paper mentioned went on to say: Under the plan of reorganization the capital stock of the company has reduced from $225,000 to $112,500 and new capital funds totaling $100,000 have been raised by the directors and paid in to the reorganized company in cash. In addition, the Reconstruction Finance Corporation purchased $100,000 of Class A income debenture notes of the reorganized company. The plan provides for the release to depositors and creditors of 50% of their respective deposits, and the remaining 50% will be issued to depositors in the form of certificates of beneficial interest by the Cecil Mortgage and Certificates corp. The reorganized company will be reopened without any bills payable and total deposits of the new company will be approximately $1,000,000 or more. Chester A. Ringgold, formerly Deputy Comptroller of Maryland, has been elected Treasurer of the reorganized company and Harvey H. Mackey has been retained as President. been A plan for the reorganization of the Middletown Savings Bank, Middletown, Frederick County, Md., has been approved by John J. Ghinger, State Bank Commissioner for Maryland, according to Baltimore advices to the "Wall Street Journal" on Feb. 3, which continuing said: It provides for the formation of a holding company to which certain assets, which will not figure in the reorganization, will be transferred. • MICHIGAN. That present operating expenses of the closed First National Bank Detroit, Detroit, Mich., furnish a striking example of the savings effected in National bank receiverships, is the opinion of J. F. T. O'Connor, Comptroller of the Currency. Such savings, of course, eventually benefit depositors in such closed institutions. The Comptroller in an announcement in the matter, says: As contrasted with pre-receivership costs, the rent of the First National Bank, Detroit, in receivership, has been lowered 98% on an annual basis, the number of employees has been reduced by over 60%, and the payroll has been cut more than 65%. Liquidation expense to Dec. 28 1933 was 1.67%. On Feb. 11 1933, the First National Bank was paying rent which aggregated over $500,000 annually. To-day the only rent that the receiver is paying Is $10,000 per annum. When this bank closed, there were 2,124 employees on the payroll. To-day the number of regular employees is but 839, a reduction of 1,285. The annual payroll before this Detroit institution closed was $4,073,772. It has since been reduced by $2,658,748 to $1,415.024 per year. Up to Dec. 28 1933 the receiver had collected in cash from all sources $110,939,318. including 1322,030 collected on stockholders' assessments. Earnings from interest, rents, premiums, etc., up to December 28, last, amounted to 14.305,256, which, after deducting the expense of 11,855.624, left net earnings of $2,449,632. Depositors in the closed First National Bank, Detroit, have received 50% of their claims, aggregating $169,992,357. The number of depositors affected is 706,949. C. 0. Thomas is receiver of this Detroit institution, while the firm of Nichols, Morrill, Wood, Marx & Ginter is attorney for the receiver. Concerning the affairs of the Detroit Trust Co., Detroit, Mich., the Detroit "Free Press" of Feb. 3 had the following to say: Rapid progress by the liquidating trustees of the Detroit Trust Co. was revealed in the announcement Friday (Feb. 2) of another 5% liquidating dividend amounting to $1,200,000. It follows a 10% dividend paid in December, bringing the total disbursement to $3,600,000. The announcement was made by Harry J. Fox, Chairman of the Board of the reorganized fiduciary trust company. As former conservator he is co-operating with the liquidating trustees. He thanked clients of the company for their co-operation in "making this liquidation better and faster than I expected." An additional payoff had been considered unlikely before March. Improved business conditions are given credit for part of the progress made by the liquidating trustees. Mr. Fox reported that the new trust company already is showing substantial business gains and satisfactory earnings. Circuit Judge Adolph F. Marschner signed an order on Jan. 29 authorizing Alex. J. Groesbeck, receiver of the Guardian Detroit Union Group, Inc., to assume the administrative expense incidental to the 100% payoff of 135,000 claims against the Guardian National Bank of Commerce of Detroit, Mich., under $1,000. Maturing of the payoff plan, made possible through a $6,500,000 loan from the Reconstruction Finance Corporation to Receiver B. F. Schram to permit an additional 8% dividend to all depositors, was revealed at a luncheon of the Depositors' Committee at the Detroit Athletic Club. Hugh J. Ferry, Chairman of the Committee, announced that pledges obtained when larger depositors waived such dividend in a trust agreement were slightly in excess of $50,437,000. The goal of the committee had been $40,000,000. The pledges involve 267 large accounts. Co-operation was 100% of all accounts over $100,000. The Detroit "Free Press" of Jan.30,authority for the above,furthermore said in part: The committee was advised that approximately three weeks will be required to set the payoff machinery in motion. Because only MOW of the 135,000 claims have been proved, and it is necessary to close in this gap before final settlement can be made, it cannot be handled as expeditiously as previous payoffs. Receiver Schram is co-operating in the clerical work and mechanics of the payoff. A week may elapse before small depositors will receive by mall a receipt form for the 8% the receiver will pay, and assignment form for the 32% to be purchased outright by the depositors' trustees. The payoff will be on tho basis of claims rather than depositors. If the same depositor has two or more claims under 11,000, each claim will be paid in full. The checks will go out almost simultaneously, the receiver's 8% check being drawn on the Manufacturers National Bank of Detroit, and the 32% check from the trustees being drawn on the National Bank of Detroit. The trust agreement of the large depositors is to continue six months and every effort will be made to locate claimants during this time. Judge Marschner's order authorizes Receiver Groesbeck also to cooperate with the Depositors' Committee in the formation of plans for the eventual liquidation of remaining assets. The possibility of forming a separate liquidating corporation to dispose of these assets advantageously is being considered. That the new National Bank of Flint, Flint, Mich., organized to replace the Union Industrial Bank and the First National Bank & Trust Co. of that place, was to open for business on Jan. 31 both at the main office in the former Union Industrial Trust & Savings Bank Building and at a branch at Hamilton and Industrial Avenues, was reported in a dispatch from Flint on Jan. 30, printed in the Detroit "Free Press," which continuing said: Robert T. Longway late Tuesday (Jan. 30) received confirmation of the Government's authorization to open in a telegram from J. F. T. O'Connor, United States Comptroller of the Currency. The new bank has a capitalization of $1,025,000, of which the Reconstruction Finance Corporation pledged $500,000 in preferred stock. The 987 Financial Chronicle Volume 138 balance, in common stock, was taken by Flint depositors in the former Union Industrial Bank and the First National Bank and Trust Co. The payoff of depositors in the two closed banks is expected to start Thursday and will require about 14 days. The payoff will be made alphabetically. "Considering all the difficulties to be overcome I believe the new bank has been organized in a splendid fashion," Longway declared. "While there have been many delays, we have had the utmost co-operation from Government and State officials and the receiver and conservators of the two Flint banks." We learn from the "Michigan Investor" of Feb. 3 that organization of a new bank in Grand Rapids, Mich., to succeed the American Home Security Bank of that city, was made possible when Circuit Judge Leonard D. Verdier signed an order approving the settlement of the claim of a group of 20 mortgage investors against the bank. The claims, which totaled $257,138.95 and are to be paid subject to a "depositors first" agreement, grew out of an arrangement made in September of 1931 when these 20 men purchased $1,000,000 in real estate mortgages at par plus accrued interest from the Home State Bank for Savings, which had become distressed. The Home State Bank later was merged with two others to become the American Home Security Bank. The paper mentioned continued: The new agreement is looked upon as a public spirited act to reopen the bank. Under the agreement the Home State Bank was to assume certain expense and replace defaulted mortgages with sound mortgages. The merged bank later pledged the mortgages remaining in its hands to the RFC to secure a loan, thus making it impossible to abide by the agreement with the 20 investors to replace poor mortgages with good mortgages. The mortgages subsequently were removed from the bank and placed under separate management for the group. As explained by Attorney John M. Dunham, counsel for Howard C. Lawrence, receiver for the bank, all remaining assets of the bank were pledged as collateral for the new $1,750,000 RFC loan with which to open the bank, thus shutting off the mortgage investors from any possible recovery of their losses under the depreciated mortgages. Their claim might even have come ahead of any claim of the RFC, thus blocking the reorganization plan, the attorney said. Further concessions were made by the mortgage investors as to the manner and order of payment of their claim. Depositors under the reorganization plan are to have 40% and to make this possible, according to the receiver's attorney, the mortgage investors agreed that the 40% of their claim. substantially $100,000, is to be subordinated to the claims of the depositors and the claim of the RFC. This means, according to counsel, that not even 40% of the investors' claim is to be paid until after the depositors have received their 40% and the RFC has been paid in full and the remaining 60% of the investors' claim again will be subordinated and will not be paid in whole or in part until the depositors have received their full 60% balance. The new bank, which will be the Central Bank, will take over and liquidate the assets of the old institution and its sponsors said it will pay out 25% of the impounded deposits immediately. Depositors will take 15% of their deposits in capital stock. The remainder of the frozen deposits will be liquidated and released as rapidly as possible. NEW JERSEY. The First National Bank of Lyndhurst, N. J., which has been closed since the banking holiday last March, was reopened Feb. 5 as a branch of the Rutherford National Bank of Rutherford, N. J., according to Lyndhurst advices on that date to the New York "Times." Depositors had access to 30% of their deposits, it was said. That the Mechanics' Trust Co. of Bayonne, N. J., will shortly be operating without restrictions is indicated in the following,taken from the "Jersey Observer" of Feb. 3: Frederkte C. Earl, President of the Mechanics' Trust Co. of Bayonne. Feb. 2, in a letter addressed to all depositors, expressed his confidence that within a reasonable time the bank will again function without restrictions. The bank is now in the process of re-organization under the Altman Act, which does not permit withdrawals of any of the old accounts during this time. Mr. Earl stated that every effort is being made to bring about a speedy re-organization of the bank, and that in the meantime all new deposits made are subject to 100% withdrawal. NEW YORK STATE. George A. Porter, Deputy Superintendent of Banks in charge of the liquidation of the Westchester Trust Co. in Yonkers, N.Y., was permitted on Feb.6 by order of Supreme Court Justice Frederick P. Close to sell certain bonds and mortgages of the book value of $485,906 to the Federal Home Owners Loan Corporation or the Farm Loan Corporation, according to advices from White Plains, N. Y., to the New York "Times," which added: He also is permitted to take back bonds of one of the Federal corporations in exchange and to sell the personal property of the bank. OREGON. According to a dispatch from Salem, Ore., on Jan. 30 to the Portland "Oregonian," five Oregon State banks on that date received extensions of time until Feb. 28 to continue operations on a restricted basis, announcement to that effect having been made by A. A. Schram; State Superintendent of Banks. Institutions affected by the extension order, the dispatch stated, include the following: The Steiwer & Carpenter Bank, Fossil; Bank of Sellwood, Portland; State Bank of Rainier, Eastern Oregon Banking Co., Shaniko and Coolidge & McClain Bank, Sllverton. PENNSYLVANIA. Practically all of the personnel of the old Turtle Creek Savings & Trust Co., Turtle Creek, Pa., soon to be replaced 988 Financial Chronicle at Turtle Creek by the newly chartered Turtle Creek Bank & Trust Co., will be retained, officials of the new institution announced on Jan. 31. The new bank, with capital and surplus of $320,000, will take over the assets of the old bank, which has been operating on a restricted basis. The Pittsburgh "Post Gazette" of Feb. 1, in reporting the matter, also said: W. H. Semmens Jr., son of former State Senator Semmens, is the new President. A. L. Faller, former President and Chairman of the board, will resume his duties as Chairman in the new bank. Other officers, all former officers of the Turtle Creek Savings & Trust Co., are A. M.Thompson, member of the State Liquor Control Board and dean of the University of Pittsburgh law school, Vice-President: W. A. Reser, Vice-President in charge of trust department, and H. F. Shultz, Secretary-Treasurer. Dr. William D. Gordon, State Secretary of Banking for Pennsylvania, announced on Feb. 3 that a new bank would be established in Upper Darby, Pa. (Philadelphia) in the near future. He stated that he had given business men in that community (which has a population of more than 100,000 and has virtually been without banking facilities for more than a year) a week to try to raise $350,000 capital for a .new institution to be under local control. If sufficient subscriptions were not available at that time, he added, he will permit one or more outside banks to establish branches in that section. Dr. Gordon's statement was made at the conclusion of a four-hour conference in the Board Room of the closed Media—Sixty-ninth Street Trust Co., at which it was decided to liquidate the institution. He intimated that a new bank formed with local capital probably would be able to take over worth-while assets of the closed institution, leaving others to be liquidated in the best manner possible. The Philadelphia "Ledger" of Feb. 4, from which the above information is obtained, went on to say in part: The new bank, he indicated, should have at least $200,000 capital and $150,000 surplus guaranteed before it could open for business. . . . Dr. Gordon's statement follows: "I discussed in detail With the Reorganization Committee the details of the tentative appraisal of the assets of the bank. It was the consensus of the reorganization committee that a re-organization of the bank would be impossible. "A meeting has been called for 9 a. m. next Saturday (Feb. 9)so that the members of the re-organization committee may report as to whether or not it will be possible to raise new capital for the organization of an entirely new banking institution. Meanwhile, this committee will organize itself to conduct a campaign among the residents of Upper Derby and Delaware County to ascertain whether they will be Interested in subscribing capital for a new local banking institution." A subsequent issue of the "Ledger", Feb. 5, stated that Dr. Gordon was called upon the previous day to approve an application of the Pennsylvania Co. for Insurances on Lives and Granting Annuities of Philadelphia, to open a branch office in the Sixty-ninth Street District of Delaware County. The paper mentioned continued in part: The demand was made by a committee of the Upper Darby Boosters Association, of which Mrs.Edna Mae Caspar, who conducts a retail business in Upper Darby, is Chairman. . . . NiPointing out that there has been a drop of from 40 to 50% in retail trade in the Upper Darby district since the Media-Sixty-ninth Street Trust Co. went on a restricted basis in March, 1933, Mrs. Caspar said a new bank would give the district only limited banking facilities. "What the district needs is a branch of a Philadelphia bank in which the people have confidence," Mrs. Caspar continued. IliThe boosters' group will meet to-day (Feb.5) to pass a resolution demanding immediate branch-bank action in the district. Mrs. Caspar said they will carry their appeal to President Roosevelt if necessary to get action. The Bank of Elizabeth, Elizabeth, Pa., started normal banking functions on Feb. 3, according to the Philadelphia "Ledger" of Feb. 3, which continuing said: The institution is a re-organization of a bank, which had been operating on a restricted basis since early in 1933. The capital of the new bank, of which B. E. Wylie is President, is $50,000, surplus, $50,000; undivided profits, $29,600, and deposits, $610,000. RHODE ISLAND. The Columbus National Bank of Providence, R. I., a new institution which replaces the Columbus Exchange Trust Co. of that city, opened on Monday of this week, Feb. 5. Opening of the new bank makes available to depositors of the Columbus Exchange Trust Co. (which had been under the control of a Federal conservator since the banking holiday last March), 60% of their deposits at once, the balance to remain with the Columbus Exchange Trust Co. for orderly liquidation and eventual transfer to the new institution. The new bank is a member of the Federal Reserve System and as a National bank a member of the Federal Deposit Insurance Corporation. It has a capital of $200,000, divided equally into preferred and common stock, the former having been subscribed to in whole by the Reconstruction Finance Corporation. The common stock has been subscribed by approximately 1,400 individuals. The bank also starts with $50,000 in surplus and undivided profits. The officers of the new bank are: President, Luigi Scala; Vice-President and Cashier, Achille G. Vervena; Assistant Cashier, Caesar T. Cambio. The Providence "Journal" of Feb. 3, authority for the foregoing, furthermore said in part: Feb. 10 1934 The notice authorizing the opening of the new institution at 20 Westminster Street also authorizes establishment of a branch at 361 Atwells Avenue, where a branch of the Columbus Exchange Trust Co. has been maintained. Two other branches of the trust company, at 1 Governor Street and 572 Charles Street, are to be closed. Mr. Scala, the new President, has had 20 years of banking experience, having been for the past nine years Vice-President of the Bank of Sicily Trust Co. in New York, American affiliate of an Italian Government bank. He formerly was employed here in the foreign department of the Industrial Trust Co. Mr. Vervena, the conservator of the trust company, pointed out last night (Feb. 2) that the new bank will have approximately 80% of cash liquidity. Besides the capital stock paid in, the institution has access to a loan of $600,000 authorized by the RFC in November. . . . ITEMS ABOUT BANKS, TRUST COMPANIES, &c. The membership of Jacob Aron in the New York Cotton Exchange was sold Feb. 5 to Louis de L'Aigle Munds, for another, for $21,500, this price being $2,500 in advance of the previous sale, of Jan. 25; and the membership in the name of the estate of Lamar L. Fleming was sold Feb. 9 to Thomas F. Cahill, for another, for $20,000. New York Cocoa Exchange membership of Fred A. Thompson was sold Feb..7 to H. A. Schwartz, for another, for $3,000, an increase of $125 over the last transaction. The membership on the New York Coffee and Sugar Exchange of Gerard P. Tameling was sold Feb. 3 to F. Eugene Nortz for $5,800, up $300 from the last sale on Dec. 28. Arrangements were completed Feb. 5 for the sale of a membership in the Chicago Stock Exchange at $6,000, up $3,000 from the last previous sale. This is the first sale of a Chicago Stock Exchange membership this year. Francis Romeo, who resigned as Chairman of the board of directors of the Bank of Sicily Safe Deposit Co., New York City, on Jan. 17, this year, died of bronchial pneumonia on Feb. 5. He was 75 years old. Mr. Romeo was also a former director of the Bank of Sicily Trust Co. and of the Bansicilia Corp., having resigned from those positions on Dec. 27 1933. He was President of the Italian importing firm of F. Romeo & Co., Inc. Several years ago Mr. Romeo was made a "cavaliere ufficiale" by the Italian Government. The New York State Banking Department, on Jan. 24, approved a certificate filed by the Bank of Yorktown, New York City, providing for the reduction of the par value and amount of capital stook from $1,500,000 at a par value of $100 a share, to $1,000,000 at a par value of $66 2-3 each. The change in the capital was approved by the stockholders on Jan. 16, and the reduced capital became effective Jan. 31 1934. The election of John J. Rowe as President and director of the Fifth-Third Union Trust Company of Cincinnati, occurred at a special meeting of the directors of the institution Jan. 13. Under a further change voted at the directors' meeting, E. W. Edwards, head of the Fifth-Third since 1929, becomes Chairman of the Board, where he will be Executive head of the bank, and will have supervision and control over the business and officers of the bank. Announcement is also made that John B. Hollister, Congressman from the First District of Ohio, was elected a Director of the bank. Referring to the changes in the official staff of the FifthThird as climaxing a week of unexpected changes in senior personnel of Cincinnati banks, the Cincinnati "Enquirer" of Jan. 14 noted: The first major changes in banking officials for several years was announced Tuesday, when the First National Bank announced that Harry S. Leyman would be Chairman of the Board, succeeding Thomas J. Davis, who became President. Mr. Rowe, then President, was made a Vice-President; he resigned this position on Friday [Jan. 121. Mr. Hollister, who had been re-elected as a director of the First National, had not been sworn in when he indicated he would not accept the re-election, and yesterday gave his consent to serve as a director of the Fifth-Third. From the "Enquirer" of Jan. 14 we also quote in part as follows: Mr. Rowe has been identified with banking since 1907,. when he was graduated from Harvard and joined the First National as a clerk under his father, W. S. Rowe, President of the institution from 1908 to 1929. The younger Rowe succeeded his father to the Presidency in that year. He is active in many business and social activities of the community. Mr. Edwards has been identified with the Fifth-Third and its predecessors since 1915. lie was persuaded to accept the Presidency of the FifthThird following the death of the late Charles A. Hinsch and has guided the institution through the strenuous years of the depression. It has been no secret that for the last two years he has desired to take a less active part In the operations of the bank. A step in this direction was made last year with the selection of Sterling B. Cramer as First Vice-President, who assumed his duties there June 1 1933. He began his banking career 33 years ago in Chicago and later served as Vice-President of the Continental Illinois Bank & Trust Company of that city; at one time he served as a Governor of the Federal Reserve Bank of Chicago. • Volume 138 Financial Chronicle The announcement of the Fifth-Third Union Trust Company regarding the election of Mr. Rowe was as follows: "President Edward W. Edwards, with the unanimous consent of the Board of Directors of the Fifth-Third Union Trust Company, to-day tendered to John J. Rowe the Presidency of this bank, which Mr. Rowe has accepted. "Mr. Edwards, as Chairman of the Board of Directors, will be executive head of the bank and have supervision and control over the business and officers of the bank. Mr. Rowe, with Mr. Sterling B. Cramer, First Vice. President, under Mr. Edwards, will have active charge of all banking and other functions." The changes in the First National Bank, to which reference is made in the above were noted in our Jan. 20 issue, page 453. The National Bank of Midd-letown, Middletown, N. Y., was chartered by the Comptroller of the Currency on Jan. 22. The new institution, which succeeds The First Merchants' National Bank & Trust Co. of Middletown, is capitalized at $250,000. Thomas W. Swan is President and J. A. Frank, Cashier of the new bank. The New York State Ban-king Department recently approved the reduction of the par value and amount of capital stock of the Marine Midland Trust Co. of Binghamton, Binghamton, N. Y.,from $750,000, consisting of 7,500 shares of the par value of $100 each, to $500,000, consisting of 10,000 shares of the par value of $50 each. In addition to the reduction of $250,000 in the bank's capital, the surplus account has also been reduced from $500,000 to $250,000, we are advised by Thomas A. Wilson, President of the trust company. Mr. Wilson's letter, under date of Feb. 5, said in part: The $500,000 released was credited to general contingent reserve account. Since Jan. 17 last WP have written off all loans classed as bad by the Banking Department and set up more reserves against doubtful loans than requested in the last examination dated Dec. 2 1933. Defaulted securities have been written down to below the market, all other securities are now carried in our statement at book or market, whichever is lower. Additional reserves have been set up against other real estate and there still remains $111,520 in the General Reserve account to care for possible unforeseen future losses. Bank buildings and other real estate are carried on the books at a figure well under assessed value and we have written off furniture and fixtures which represents a value in excess of $52,000. We sold $300,000 capital notes to the Reconstruction Finance Corporation. This amount added to the bank's capital funds of $863,700.88 totals $1,163,700.88. Therefore, after the readjustment and caring for possible future contingencies, we have $1 of capital funds to $5.37 in deposits which is a most satisfactory capital to deposit ratio. Total resources of •the Marine Midland Trust Co. at the close of business Jan. 31 1934 were $7,556,187, and total deposits $6,257,102. The institution is a member of the Federal Reserve System and also a member of the Temporary Federal Deposit Insurance Corporation. On Jan. 19 the New York State Banking Department approved reduction of the par value and amount of capital stock of the Courtland Trust Co. of Cortland, N. Y.. from $200,000 at a par value of $25 a share, to $100,000, at a par value of $12.50 a share. —.— A reduction in the par value of the shares and amount of capital stock of the Tonawanda Trust Co. of Tonawanda, N. Y.,from $500,000 at a par value of $100 a share to $400,000 at a par value of $80 a share, was approved recently by the New York State Banking Department. C. Kenneth Fuller, former Investment Officer of the First National Bank of Boston, Mass., was appointed Trust Officer of the Agricultural National Bank of Pittsfield, Mass., at a directors' meeting on Jan. 29. Lawrence R. O'Connor, who has been both President and Trust Officer, resigned the latter office at the meeting. Frederick Weston, who for the past three years has been employed in the trust department, was promoted to Assistant Trust Officer, succeeding Robert W. McCracken, who will retain his position as Loan Officer at the head of the collateral and unsecured loan department. Pittsfield advices on Jan. 29, appearing in the Springfield "Republican," in noting the above, went on to say: Mr. Fuller, who will undertake his duties in Pittsfield on Feb. 1, is a graduate of Dartmouth College in 1914. He also engaged in graduate work at Leland Stanford University, California, and was later graduated from the Harvard School of Business Administration. Ile will have general charge of the trust department in which funds are approximately $15,000,000. Mr. Weston, the newly elected Assistant Treasurer, is also a graduate of Dartmouth College. Ile later secured a bachelor's degree from the Harvard Law School. On Feb. 1 the Comptroller of the Currency granted a charter to the Columbus National Bank of Providence, Providence, R. I., which replaces the Columbus Exchange Trust Co. of that city. The new institution is capitalized at $200,000, consisting of $100,000 preferred and $100,000 coin- 989 mon stock. Luigi Scala is President and Achilla G. Vervena, Cashier, of the new bank. Frederick I. Wilson has resigned as Trust Officer of the State Trust Co. of Plainfield, N. J., to become Assistant Trust Officer of the National State Bank of Newark, N. J. He has been succeeded in Plainfield by Robert Heron, who heretofore was Trust Officer of the Clinton Trust Co. of Newark. Plainfield advices to the Newark "News" on Jan. 29, in noting the above, added: Both man began their banking careers here as clerks in the Plainfield Trust Co., holding various positions. Before coining to the State Trust Co. two years ago, Mr. Wilson was with the Asbury Park & Ocean Grove Bank in Asbury Park as Trust Officer and the State Department of Banking and Insurance supervising trust departments in closed banks. Walter E. Keller, a Vice-President of the Hudson County National Bank of Jersey City, N. J., died of heart disease at his home in Jersey City on Feb. 6. He had been in charge of the central branch of the bank in Jersey City for the past 10 years. When the Hudson County National Bank absorbed the Merchants' National Bank in 1923 Mr. Keller was a Vice-President of the latter bank. Earlier in his career he was with the National Bank of Commerce of New York. Recently Mr. Keller was appointed by Governor Moore a member of the New Jersey State Housing Authority. The deceased banker was 54 years of age. The Citizens' National Ba- nk of Collingswood, Collingswood, N. J., was chartered by the Comptroller of the Currency on Jan. 29. The institution, which is capitalized at .$100,000, succeeds the Collingswood National Bank of the same place. We learn from the Pittsburgh "Post-Gazette" of Feb. 3, that a branch of the Forbes National Bank of Pittsburgh, Pa., will be opened about mid-February in the Gulf Building, Seventh Avenue and Grant Street, that city, according to an announcement on Feb. 2 by Richard K. Mellon, President of the Forbes National. The branch will provide all departments of commercial banking, including a savings department and safety deposit vault, for the growing community of that downtown section. The paper mentioned went on to say: Adolph W. Schmidt, who has been with the Mellon National Bank for several years, has been appointed Assistant Cashier of the Forbes National Bank and will be in charge of the new branch. Other officers of the Forbes National include Paul C. Harper, Vice-President; J. Nevin Garber, Cashier, and Nora C. Fitzpatrick and R. A. Claneman, Assistant Cashiers. was appointed President of the Richard King MellonMellon National Bank, of Pittsburgh, Pa., at a meeting of the directors on Feb. 6, succeeding his father, the late Richard Beatty Mellon, who died Dec. 1 last. Mr. Mellon, who formerly was a Vice-President of the institution, in recent years has taken an increasing part in the direction of the Mellon interests. When his father's health began to fail. important directorships were turned over to the son. His promotion to the Presidency, generally anticipated in financial circles, places him at the head of one of the world's most powerful banks. He is also President of the Forbes National Bank of Pittsburgh, and the Mellbank Corporation. The Pittsburgh "Post-Gazette" of Feb. 6, in reporting Mr. Mellon's election, furthermore said in part; Completing his education at Shadyside Academy and Princeton University, the new President started his business career as a messenger in 1920 and followed this by working in various departments of the bank. In 1924 he was appointed an Assistant Cashier and in 1929 he was elected Vice-President and a director of the bank. In the naming of Mr. Mellon as President ,of the bank is seen an indication that he will be the dominant figure in control of the Mellon fortunes in the future. The new President also is on the boards of directors of the Aluminum Co. of America, Carborundum Co., Gulf Oil Corp., Koppers Co., Norfolk 8: Western RR., Pennsylvania RR. Co., Pennsylvania Water Co., Pittsburgh Aviation Industries Co., Pittsburgh Plate Glass Co., Pullman, Inc., Union Trust Co., and Westinghouse Air Brake Co. He is a trustee of the Eastern Gas & Fuel Associates and is Treasurer and a director of the Ligonier Valley RR., besides serving as trustee of the Carnegie Hero Fund and a member of the board of trustees of the University of Pittsburg+. . . . A subsequent issue of the''Post-Gazette," Feb. 7, stated that Mr. Mellon, the new President, had announced the Kevious day that Ray Harrison, heretofore an Assistant Cashier, of the Mellon National Bank, had been promoted to a Vice-Presidency by the directors. Mr. Harrison joined the institution as an Assistant Cashier in 1929, going there from Chicago, where he was representative for the National Bank Commerce. Previous to going to Chicago, he had been with the National Bank of Commerce in its New York office,following his resignation from the United States Army. The paper mentioned continued: 990 Financial Chronicle Feb. 10 1934 Mr. Harrison was born at Fort Adams and is a graduate of the United States Military Academy. He served in the World War as a captain of field artillery with the First and 28th divisions, A.E. F. He resigned from the army in August 1922. which is preferred and half common stock. E. R. Mincke and Roy Alden are President and Cashier, respectively, of the new institution. On Jan. 27 1934 the Union National Bank at McKeesport, McKeesport, Pa., was chartered by the Comptroller of the Currency. It replaces the Union National Bank of that place and is capitalized at $200,000. R. M. Baldridge heads the new institution, while C. C. Herklotz is Cashier. Edmund W.Reisig has been appointed Cashier of the First National Bank of Monroe, Mich. Mr. Reisig, who has been connected with the bank twelve years, for a number of which as Assistant Cashier in charge of the Trust Department, succeeds H. J. McGill, Cashier-Manager who resigned. Monroe advices on Jan. 30, printed in the Toledo "Blade," from which this is learnt, added: The Comptroller of the Currency on Jan. 29 issued a charter to the First National Bank in Freeland, Freeland, Pa., with capital of $100,000. The new institution succeeds the First National Bank of Freeland. Edgar Albert is President and John J. McGarey, Cashier. That the Pennsylvania Banking Department was to file this week an application with the Philadelphia agency of the Reconstruction Finance Corporation for a loan, the proceeds of which is to be used to make another payment to the 112,000 depositors of the defunct Bankers' Trust Co. of Philadelphia, was indicated in the Philadelphia "Ledger" of Feb. 6, from which we quote as follows: The amount of the loan to be sought is as yet undetermined, but it may total $11,000,000. The loan, if granted in full, will enable the Banking Department to make a payment of approximately 37% on the bank's deposit liability of approximately $28,000,000 at the time the institution closed its doors on Dec. 22 1930. Assets having a theoretical book value of $23,000,000, including a very large percentage of real estate holdings, will be offered as collateral for the loan. Up to date, the depositors of the institution have received three payments, totaling $9,875,556, the last disbursement, 5%, having been made on Oct. 18 1933, bringing the total payments up to 35%. The application now being compiled by the Banking Department will mark the third attempt that has been made by the State Banking Department to obtain Government funds for the use of the depositors of the closed institution. Late in 1932 an application was filed. It produced approval of a loan of $750,000 on assets other than real estate that would have permitted a disbursement of approximately 2% cents on each dollar due depositors. According to persons familiar with the situation it would have been an expensive proposition for the Banking Department to have accepted such a loan and make it available for depositors. A year later another application was made, after it had been announced that the Federal Government had available a $1,000,000,000 fund for the relief of depositors of closed banks. This application was returned for "more explicit information on every asset item," including in particular "the reason why the appraisers felt that a debtor to the institution could meet his obligation over a period of three to five years." The application now being prepared contains the information desired. Just what the appraisement of the Bankers Trust Co. assets will show is not known at this time. The present program of the Federal Deposit Liquidation Board in Washington allows a loan of 50% on approved assets of a bank that closed prior to June 1932. A dispatch by the Associated Press from Richmond, Va., on Jan. 29 stated that the State-Planters Bank & Trust Co. of Richmond on that day was authorized by the Virginia State Corporation Commission to purchase the State-Planters Bank of Hopewell, Va., and operate it as a branch. We quote further from the advices as follows: The Richmond bank now owns all except 15 shares of the capital stock of the Hopewell bank. In approving the application, M. E. Bristow, Corn. missioner of Insurance and Banking, said: "It will be an improvement and benefit to the banking situation in the neighborhood." A charter was issued on Jan. 20 by the Comptroller of the Currency to the National Bank of Logan, Logan, West Va., capitalized at $150,000. It succeeds the First National Bank of Logan. C. McD. England and W.T. Mitchell are President and Cashier, respectively, of the new bank. The First National Bank of Marietta, Marietta, Ohio, with capital of $140,000, was chartered by the Comptroller of the Currency on Jan. 29. 0. F. Mead is President and W. S. Eberle, Cashier, of the new organization. Effective Jan. 24 1934, the Fletcher American National Bank of Indianapolis, Ind., with capital of $3,600,000, went into voluntary liquidation. The institution is succeeded by the American National Bank at Indianapolis. The First National Bank of Harrisville, Harrisville, Pa., capitalized at $40,000, went into voluntary liquidation on Jan. 9 last. It has been succeeded by the First National Bank in Harrisville. The Comptroller of the Currency on Jan. 30 granted a charter to the First National Bank of Pinckneyville, Pinckneyville, Ill. The new bank replaces the First National Bank of that place, and is capitalized at $50,000, half of The bank was reopened Nov. 18, having been closed since the Presidential Proclamation when Mr. McGill was appointed. Previous to the reopening of the bank he served as conservator. Ludlow F. North, formerly Assistant Vice-President of the First Wisconsin Co. of Milwaukee, Wis. (security affiliate of the First Wisconsin National Bank) was advanced to a Vice-President on Jan. 30 at a meeting of the new directors of the company elected earlier in the day by the stockholders, according to the Milwaukee "Sentinel" of Jan. 31, which continuing said: The following officers, who comprise the new Board, were iv-elected: President, Robert W. Baird; Vice-President and Treasurer, Joseph A. Auchter ; Vice-President and Secretary, A. M. Hewitt; Vice-Presidents, William H. Brand, G. Harold Pfau and S. E. Johanigman. C. D. MacNaughton was re-elected Assistant Secretary-Treasurer. The post of Chairman of the Board, previously held by Walter Hasten, was abolished when. the security firm reduced its board from 40 to seven. H. N. Bushnell, Vice-President and Trust Officer of the United States National Bank of Omaha, Neb., was named Executive Vice-President of the institution on Feb. 6, according to Omaha advices on that date to the New York "Times." Mr. Bushnell succeeds Sherley Ford, who has become a Vice-President of the Northwest Bancorporation at Minneapolis, Minn. Mr. Bushnell is succeeded as Trust Officer by Hal W. Yates of the United States National Bank of Omaha, it was said. • The Ohio Valley National Bank of Henderson, Henderson, Ky., was chartered by the Comptroller of the Currency on Feb. 2. The institution succeeds the Ohio Valley Banking & Trust Co. of that city, and is capitalized at $200,000, made up of $100,000 preferred and $100,000 common stock. John C. Worsham and C. W. Geibel are President and Cashier, respectively, of the new bank. A charter was granted by the Comptroller of the Currency on Jan. 20 to the Union National Bank of Fayetteville, Fayetteville, Tenn. The new organization succeeds three Feyetteville banks, viz: The First National Bank, Elk National Bank and Farmers' National Bank. It is capitalized at $100,000, consisting of $50,000 preferred stock and $50,000 common stock. C. F. Bagley is President and J. S. Darrafh, Cashier, of the new institution. In regard to the affairs of the First National Bank in Henderson, Henderson, N. C., advices from that place under date of Jan. 31, appearing in the Raleigh "News & Observer," had the following to say: Announcement was made Jan. 31 by the First National Bank in Header. son that it will pay off on Feb. 5 more than $80,000 in its "B" certificates of deposits taken over from the old First National Bank of IIenderson when the new bank was reopened Oct. 4 1932, following the close of the old bank nine months previously. This means the payments will be made to depositors eight months in advance of the date required, on Oct. 4 1934. This payment, the bank's announcement said, "was made possible at this time owing to the very liquid condition of the bank," and is done with the permission of the Comptroller of the Currency in Washington. The First National Bank in Tarpon Springs, Tarpon Springs, Fla., on Jan. 23 was chartered by the Comptroller of the Currency. The new bank is capitalized at $50,000, half of which is preferred and half common stock. G. C. Rankin heads the institution, while W. L. Winters is Cashier. Effective Jan. 9 1934, the First National Bank of Santa Anna, Santa Anna, Tex., was placed in voluntary liquidation. The institution, which was capitalized at $50,000, was succeeded by the Santa Anna National Bank. A dispatch to the Los Angeles "Thnes" on Jan. 26 from Tulare, Calif., stated that Joe M. Allen had been appointed Manager of the Tulare branch of the Security-First National Bank of Los Angeles, filling a vacancy created by the death of W. P. Williams. Mr. Allen advances from the post of Assistant Manager. A native of Tulare, Mr. Allen has been in the banking business here since 1916 it was said. Volume 138 THE WEEK ON THE NEW YORK STOCK EXCHANGE Dealings in the New York stock market have been unusually heavy with a strong tendency toward higher levels during the most of the present week. There was a sharp setback on Wednesday, due to heavy profit taking, but the selling wave gradually decreased and the trend of prices was again upward on the following day. On Friday the list again turned downwards. Metal shares have attracted the most attention, but there has also been a good demand for the motor stocks, merchandising issues and toward the end of the week railroad stocks showed good improvement. There have, at times, been brief periods of irregularity and considerable profit taking, but the latter, with the exception of the break on Wednesday and Friday, made little change in the trend of prices. Call money renewed at 1% on Monday and continued unchanged at that rate throughout the week. The securities market continued to move vigorously upward during the short session on Saturday and many of the trading favorites regained their losses of the previous day. Railroad shares, specialties and merchandising stocks led the upswing with gains ranging up to two or more points. Motors, auto accessories and sugar stocks were also in general demand at higher prices, particularly General Motors which climbed into new high ground for 1933-1934. Chrysler hit its old record of 5934 and United States Smelting & Refining and American Smelting improved a point each. The turnover was the largest in volume of any short session during the past few months and taxed the facilities of the Exchange to the utmost. Prominent in the day's advances were such active stocks as American Beet Sugar pref., 3 points to 63; American Car & Foundry, 2 points to 313/2; American Locomotive pref., 434 points to 644; CubanAmerican Sugar pref., 334 points to 4434; Johns-Manville pref., 2 points to 109; Loew's, 234 points to 303's; Reading, 2 points to 54; Union Bag & Paper, 434 points to 593/2; Union Pacific, 2 points to 131; United Fruit, 2 points to 68; 5 United States Industrial Yellow Truck, 234 points to 44%; Alcohol, 13 % points to 68%; Republic Steel pref., 13 points to 5234; New York Shipbuilding pref. (7), 434 points to 85, and National Enamel, 23% points to 35. Large scale buying which carried many stocks upward from 2 to 4 or more points characterized the trading on Monday. The volume was the heaviest in many months with the ticker running from 3 to 5 minutes behind the floor transactions. In the industrial group many prominent stocks sold at their highest since 1931 and throughout the list there were many active speculative favorites that again broke through their 1933-1934 tops. The demand extended to all parts of the list, but the steel stocks, motors, amusement issues, metal shares and utilities were the leaders, and there was a large public participation at all times. Toward the end of the day the advance slowed up a bit, but the gains at the end of the session were not much changed. The outstanding strong stocks were Air Reduction, 2 points to 105; American Car & Foundry pref., 334 points to 55%; Amer. Tel. & Tel. 334 points to 12334; American Tobacco "B" (5) 2 points to 8234; American Woolen pref., 334 points to 83, Bethlehem Steel pref., 334 points to 60%; Brooklyn 5 points to Union Gas 334 points to 7834; Goodrich pref., 3% 5 Ludlum Steel pref., 234 points to 95, Missouri Kansas 54%; 7 ; Norfolk & Western (8) & Texas pref., 338 points to 454 3 points to 180; Outlet Co. pref., 6 points to 103; Peoples Drug Stores 434 points to 90%; Standard Gas & Electric pref. (1.80), 4 points to 3034; Texas Pacific, 3 points to 43; United States Distilleries pref., 4 points to 1134; West Penn Electric, pref. 2 points to 104; Western Union Telegraph, 234 points to 643 / s; Worthington Pump pref.,"B" 434 points 42; and Public Service of N. J. pref. (5), 2 points to 83. The general list was somewhat irregular on Tuesday, but toward the end of the day the public utilities shares assumed the market leadership and several prominent stocks of the group moved upward from 2 to 4 or more points. Industrials, on the other hand, fell back and so did the rails, motors and steel stocks. Metals and specialties were stronger, but there was little activity in the oil shares. The gains for the day included American Tobacco pref. B, 2 points to 118; Austin Nichols pref. A (3), 4 points to 52; Brooklyn Union Gas, 2 points to 8034; J. I. Case pref., 4 points to 843/s; Laclede Gas, 3 points to 50; Pacific Gas, 234 points to 23; Public Service of New Jersey pref. (8), 10 points to 115; Pure Oil pref., 4 points to 79; Reading, 2% points to 565 %; Union Pacific pref. (4), 3 points to 79; United States Tobacco, 3 points to 110, and West Penn Electric pref., 3 points to 69. 991 Financial Chronicle Heavy profit taking followed by sharp declines reduced the gains from fractions to three or more points on Wednesday, the dealings, however, were unusually large and the tape was several minutes behind throughout the session. Practically the entire list, except the metals and a few miscellaneous shares, were effected, the selling being due, in part, to the upset in the French political situation. United States Smelting led the rally in the mining group and forged ahead about 5 points. Near the end of the session there was 5 a modest rally, United States Steel snapping back to 57% followed by such stocks as American Can and General Motors. The changes for the day were generally on the side of the decline, the recessions including among others, Allied Chemical & Dye, 5% points to 14934; American Beet Sugar, 334 points to 60; American Car & Foundry, 2 points to 51; American Tobacco pref. B, 3 points to 121; Brooklyn Union Gas, 234 points to 78; Central RR. of N. J., 5 points to 85; Lima Locomotives, 33% points to 313; Pure Oil pref. 4 points to 75; Texas Pacific, 534 points to 3134, and Wright Aero,5 points to 51. Following the sharp reaction in the late trading of the preceding day, the stock market rallied during the late trading on Thursday. Metal stocks continued in the foreground and farm implements, motors and merchandising issues featured the late advances. In the morning trading prices were inclined to move downward but most of the losses were transformed into gains later in the day. Trading was smaller than on recent days, though there was a large volume of business transacted before the closing hour. Noteworthy among the stocks ending the day on the side of the advance were ColgatePalmolive pref., 2% points to 82; Allied Chemical & Dye, 3Kpoints to 152; American Beet Sugar pref.,3 points to 63; American Can pref., 2 points to 135; Cuban American Sugar pref., 334 points to 47; Federal Mining & Smelting, 5 points %; Owens Illinois to 105; Howe Sound (3), 234 points to 403 Glass, 2 points to 93; Tide Water Oil pref., 2 points to 84; Union Pacific, 31,4 points to 1293/2; United States Industrial Alcohol, 2 points to 4234; Wilson pref., 53% points to 7134 and Wright Acre,2 points to 53. The stock market continued to move downward on Friday as heavy selling developed in practically every active group, the losses ranging up to 4 or more points. During the early trading the market moved rather quietly, but as the day advanced the turnover gradually increased and the tape again fell behind. Considerable pressure was apparent, especially among the pivotal stocks like United States Steel, General Motors, Chrysler, American Can, Amer. Tel. & Tel. and du Pont. The high priced stocks suffered the most severe losses, United States Smelt.ng & Refining declining as much as 5 points. The principal losses of the session were Allied Chemical & Dye 234 points to 15034, American Commercial Alcohol 2% points to 5434, Baldwin Locomotive 3 points to 48, Cuban American Sugar pref. 3 points to 41,- New York & Harlem 9 points to 125, Remington Rand pref. 5 points to 52, United States Smelting 35% points to 12034 and Westinghouse 2% points to 4234. TRANSACTIONS AT THE NEW YORK STOCK EXCHANGE. DAILY. WEEKLY AND YEARLY. Week Ended Feb. 9 1934. 2,081,170 $11,389,000 4,940,250 24,038,000 4,330,980 20.312,000 4,499,070 15,793,000 3,199,920 14,917,000 3,337,240 12,841,000 $2,439,000 4,075.000 4,336,000 3,660,000 3.321,000 2,766,000 $3,612,000 $17,440,000 2.532.000 30.645.000 1,447.500 26,095,000 1,427,000 20.880,000 1,038,000 19,276,000 558.000 16,165,000 99 ZAR Win ‘00 9911 1100 t9n C07 OAA sin 014 500:130001 Ann Saturday Monday Tuesday Wednesday Thursday Friday IWO Sales at New York Stock Exchange. Jan. 1 to Feb. 9. Week Ended Feb. 9. 1934. 1933. Stocks-No. of shares_ 22,388,630 699,488 Bonds. Government bonds __- $10,614,500 $17,173,000 State & foreign bonds. 20,597,000 566,000 Railroad& misc. bonds 99,290,000 1,054,000 Total Total Bond Sales. United States Bonds. Railroad State, Stocks, Number of and Attica. Municipal & Bonds. For'n Bonds. Shares. $130,501,500 $18,793,000 1934. 1933. 84,539,367 3,755,344 $86,152,500 125,619,500 412,906,000 $117,038,000 5,339,000 6.807,000 $624.678,000 $129,184.000 DAILY TRANSACTIONS AT THE BOSTON. PHILADELPHIA AND BALTIMORE EXCHANGES. Boston. Week Ended Feb.9 1934, Saturday Monday Tuesday Wednesday Thursday Friday Total prey, ark,rmdami Philadelphia. Shares, Bond Sales. Shares. Bond Sales 30,299 74,090 66,882 70,988 50.270 14,622 $14.200 17.500 21,000 13,000 9,3.50 2,000 15,019 40.533 48.782 37,068 22,318 6,200 $3,000 3,000 6,000 10,000 307,151 77,050 169,920 $22,000 320_009 282A000 199.065 518100 Baltimore. Shares. I3ond Sales. 4,700 22,682 13,158 6,842 6,839 4,219 $1,000 7,300 9,100 6,000 15,000 3.000 24008 520,000 992 Financial Chronicle Feb. 10 1934 DAILY TRANSACTIONS AT THE NEW YORK CURB EXCHANGE. THE CURB EXCHANGE. Curb market trading has been fairly heavy this week Bonds (Par Value). Stocks Week Ended (Number but the trend of prices has been somewhat unsteady, though Feb.9 1934. of Foreign Foreign Domestic. Government. Corporate. Total. the tendency, until Friday, was toward higher levels. Public Shares). utilities were moderately strong during the early part of the Saturday 321,665 $3,673,000 $260,000 $161,000 $4,094,000 Monday 744,385 7,673,000 387,000 138,000 8,198,000 week and the specialties have given a fairly good account of Tuesday 768,885 8,104,000 179,000 229,000 8,512,000 Wednesday 656,520 5,984,000 443,000 182,000 6,609,000 themselves, but oils and miscellaneous industrials have been Thursday 492,980 5,509,000 252,000 171,000 5,932,000 Friday 497.760 4,327,000 161,000 54,000 4,542,000 comparatively quiet. On Saturday prices were higher in many of the active issues, Total 3,482,195 835,270.000 $1.682,000 $935,000 $37,887,000 but the gains were small and none were especially noteworthy. Sales at Week Ended Feb. 9. Jan. 1 to Feb. 9. Fractional advances were recorded by American Cyanamid, New York Curb Exchange. 1934. 1933. 1934. 1933.Sherwin Williams and Swift & Co. Hiram Walker was of shares 3,482,195 699,488 12,728,184 3,755,344 the most active of the alcohol stocks and there was some Stocks—No. Bonds. Domestic $35,270,000 817,173,000 $141,888,000 $117,038,000 attention given to Humble Oil and a few of the public util- Foreign government 1,682,000 566.000 6.872,000 5,339,000 ities like Electric Bond & Share, American Gas and Niagara Foreign corporate 935,000 1,054,000 6,243,000 6,807,000 Hudson. Parker Rust Proof did fairly well and Atlantic & Total $37,887,000 818,793,000 $155,003,000 $129,184,000 Pacific Tea Co. sold slightly under 150 on its initial sale. Trading was unusually heavy on Monday as the trend of prices turned toward higher levels. Public utilities were Comparative Figures of Condition of Canadian Banks. strong and active and several of the specialties group forged In the following we compare the condition of the Canadian ahead into new high ground for 1933-1934. Liquor stocks banks for Dec. 30 1933 with the figures for Nov. 30 1933 sagged, though some of the best stocks showed fractional and Dec. 30 1932. gains, but oil stocks were sluggish and made little progress. STATEMENT OF CONDITION OF THE BANKS OF THE DOMINION OF CANADA. Mining and metal shares improved, Aluminum Co. of America showing a gain of about 2 points, while Lake Shore Dec. 30 1933. Nov. 30 1933. Dec. 311932. Assets. Mines and Newmont also were in demand at higher prices. $ $ Current gold and subsidiary coin-$ Heavy trading with considerable irregularity apparent 39,351,862 40,739,723 In Canada 37.975,585 10,562,397 15,053,016 Elsewhere 15,287,607 forced stocks to lower levels on Tuesday, and while there 49,914,262 55,792,741 Total 53,263,094 were some gains in evidence, the changes were generally small. Public utilities were active and fractionally higher Dominion notes— . 139,721,373 155,697,416 153,170,146 In Canada in some issues like Electric Bond & Share, American Gas & 11,546 9,157 Elsewhere 11,132 Electric, Niagara Hudson and United Light & Power. 139,732,921 155,706,577 153,181,279 Total Mining and metal stocks were mixed, Aluminum Co. of 11,351,985 7,480,032 Notes of other banks 12,146,418 America showing gains at times, though Newmont, Lake United 18,614,990 29,215,367 States dr other foreign currencies_ 17,941,291 85,729,168 Cheques on other banks 84,416,460 80,406,394 Shore Mines and Pioneer were lower on the day. Distillers- Loans to other banks in Canada.secured, Including bills rediscounted Seagram and Hiram Walker were also down. The market Deposits made with and balance due 3,498,092 2.953,295 again turned downward on Wednesday as trading continued from other banks in Canada 4,322,464 Due from banks and banking correspondalong a broad front. Oil shares were off on the day, particu12,126,122 16,021,212 ents lathe United Kingdom 7,786,109 from banks and banking correspondlarly Gulf Oil of Pennsylvania, which was the weak spot of Due ents elsewhere than in Canada and the 70,526,840 82.767,982 104,900,799 United Kingdom the group and showed a net loss of 3 points at its low for the Dominion Government and Provincial 651,068,470 649,879,244 562,359.413 day. Humble Oil sold down and Standard of Indiana moved Government securities municipal securities and Britwithin a narrow channel. Utilities kept pace with the oils Canadian ish, foreign and colonial public securi158,078,288 159,429,911 188,958,873 ties other Canadian in the downward swing, Electric Bond & Share, United Railway andthan 51,859,393 52,258,531 other bonds, debs. dr stocks 48,933,929 30 days) Light & Power and American Gas & Electric showing Call and short (not exceeding loans in Canada on stocks, debentures, moderate losses, at times, though they were relatively firm bonds and other securities of a suf105,949,889 106,264,004 103,204,389 ficient marketable value to cover at the close. 90,071,910 107,046,997 Elsewhere than in Canada 91,491,603 current loans de diens in Canada- 898,159,673 884,378,313 964,023,809 The downward trend of prices was halted on Thursday, Other 138,058,578 135.241,027 151,661,282 Elsewhere to the Government of CanadaAnd as the list turned upward, buying interest expanded all Loans 28,798,480 21.580,099 28,273,553 Governments Loans to along the line. The public utilities suffered most in the Loans toProvincial cities, towns, municipalities 108,826,297 102,145,572 111,589,810 and school districts morning dealings, but when pressure was withdrawn, much Non-current loans, estimated loss pro13,231,466 12,849,348 13,311,964 vided for of the early losses were regained. In the oil section, Gulf Real 7,446,317 7,436,686 7,481,430 estate other than bank premises— 6,221,650 6,224,622 6,387,717 Oil of Pennsylvania and Standard Oil of Indiana sold off on Mortgages on real estate sold by bankBank premises at not more than cost, the day and the rest of the group made little progress either 78,254,447 78,354,807 less amounts (If any) written off 78,702,197 of customers under letters of way. Mining and metal issues were easier, though there Liabilities 49.378,947 51,335,931 credit as per contra 42,634,870 of Finance for was some improvement in Lake Shore Mines before the close. Deposits with the Minister 6,503,388 6.497,182 6,602,452 the security of note circulation Hiram Walker sold off more than a point, while Distillers Deposit in the central gold reserves..— 17,781,732 13,631,732 19,881,732 13.078,802 13,192,631 Shares of and loans to controlled cos.. 13,170,620 Seagram and other active stocks were moderately firm. Other assets not included under the fore1,500,237 1,577,731 1,489,541 going heads Good comebacks were made by such popular trading fa2,815,752,804 2,842,487,770 2,852,086,913 Total assets vorites as Glen Alden Coal, Ford of Canada A and Swift & Co. This was true also of less active stocks throughout Liabilities. 132,058,957 128,189,306 12,,074,824 Notes in circulation the list. Balance due to Dominion Govt. after de33,334,492 dro. credits, pay-lists, 44,283,800 53,107,707 ducting adv. for Curb stocks were down again on Friday as they were Advances under the Finance Act 50,388,000 60,444,060 56,988,000 Governments_ 27,912,951 23,665,146 18,933,416 unable to hold the rally prices of the previous day. The Balance due to Provincialpayable on deDeposits by the public, declines extended to practically all parts of the list, and 501,870,943 499,098,951 466,212,767 mand in Canada by the public payable after nowhile there were not particularly large at any time, the down- Deposits 1,356,916,826 1,358,189,789 1,377,520,115 tic* or on a fixed day in Canada 322,186.867 319,543,864 328,725,094 Deposits elsewhere than in Canada ward swing was persistent and continued throughout the Loans from other banks in Canada, secured, including bills rediscountedday. Electric Bond & Share was off more than a point at Deposits made by and balances due to 13.048,033, 8,807,303 times and so was American Gas & Electric. Mining shares 12,319,732 other banks in Canada Due to banks and banking correspondlike Aluminum Co. of America were off on the day and prac4,959,293 12,613,282 ents in the United Kingdom 7,426,767 Elsewhere than in Canada and the tically all of the alcohol stocks were lower. The range of 33,430,138 44,294,021 United Kingdom 41,311,955 864,999 1,285,299 827,187 prices for the week was toward lower levels, the outstanding Bills payable 49,378,947 51,335,931 of credit outstanding 42,634,870 recessions including among others, Aluminum Co.of America, Letters 2,388,545 2,276,290 2,609,026 Liabilities not incl. under foregoing heads 626.338 2,456,751 766,013 Dividends declared and unpaid 78 to 713.4; American Laundry Machine, 1634 to 153 4; Rest 132,500,000 134,500,000 162,000,000 or reserve fund 144,500,000 144,500,000 144,500,000 Capital paid up American Superpower, 5% to 3%; Atlas Corp., 15 to 13%; 2,806,365,376 2.835,483,782 2,842,757,523 Cities Service, 33/i to 33; Commonwealth Edison, 60 to 58; Total liabilities Note.—Owing to the omission of the cents in the of icial reports, the footings in Consolidated Gas of Baltimore, 61 to 603; Cord Corp., the above do not exactly agree with the totals given. 7% to 7; Creole Petroleum, 123/i to 113/2; Duke Power, 55 to 22%; 4 ; Ford of Canada A, 243 Gulf Oil of to 533 Pennsylvania, 73 to 70; Humble Oil (new), 40 to 37%; International Petroleum, 23% to 21%; New Jersey Zinc, 57 to Bank clearings this week will again show an increase as 56; Parker Rust Proof, 67/ 58 to 66%; Pennroad Corp., 4 compared with a year ago. Preliminary figures compiled by to 3%; Singer Mfg. Co., 170 to 168, and Standard Oil of us, based upon telegraphic advices from the chief cities of Indiana, 31'% to 311i. A complete record of Curb Exchange transactions for the the country, indicate that for the week ended to-day (Saturday, Feb. 10) bank exchanges for all cities of the United week will be found on page 1025. Course of Bank Clearings. Financial Chronicle Volume 138 States from which it is possible to obtain weekly returns will be 21.7% above those for the corresponding week last year. Our preliminary total stands at $5,126,909,905, against $4,211,557,806 for the same week in 1933. At this center there is a gain for the five days ended Friday of 27.1%. Our comparative summary for the week follows: Clearings-Returns by Telegraph. Week Ended Feb. 10. 1934. Per Cent. 1933. New York Chicago Philadelphia Boston Kansas City St. Louis San Francisco Los Angeles Pittsburgh Detroit Cleveland Baltimore New Orleans $2,900,493,310 $2,282,645,404 152,991,967 107,852,059 199,000,000 218,000,000 149,000,000 121,000,000 49,252,972 39,015.702 47,500,000 36,000,000 82,119,000 64,712,000 No longer will re port clearings 61,672.205 52,591,543 46,029,643 36,824,731 37,699,712 39,878,106 37,412,342 39,611,521 33,806,948 23,875,000 +17.3 +25.0 -5.5 -5.6 -29.5 Twelve cities, 5 days Other cities. 5 days $3,787,045.151 485,359,770 $3,069,938,014 385,716,090 +23.4 +25.8 Total all cities, 5 days All cities. 1 day $4,272,424,921 854,484,984 $3,455,654,104 755,903,702 +23.6 +13.0 55 19R am Mc 54 Oil 557 ens 4-91 7 oll n1.1ao 15.....E,44.1.. +27.1 +41.9 -7.9 +23.1 +26.2 +31.9 +26.9 993 District there is a decrease of 10.9%. The Cleveland Reserve District has enlarged its totals by 3.6% and the Atlanta Reserve District by 17.5%, but the Richmond Reserve District falls 8.1% behind. In the Chicago Reserve District there is an increase of 3.7%,in the St. Louis Reserve District of 14.5% and in the Minneapolis Reserve District of 20.6%. In the Kansas City Reserve District the increase is 10.9%, in the Dallas Reserve District of 21.4% and in the San Francisco Reserve District of 17.2%. January/ 1934. January 1933. Inc.or Dec. Federal Reserve Mats. $ $ % 1st Boston_._ .14 cities 988,106,730 920,779,242 +7.3 2nd NewYork- _13 " 13,961,007,963 13,065,252,905 +6.9 3rd Philadelpla 13 " 1,170,886,341 1,314,630,043 -10.9 4th Cleveland--14 " 798,824,218 770,947,929 +3.6 5th Richmond. 9 " 390,491,495 424,794,672 -8.1 6th Atlanta_ __ _16 " 442,701,653 376.706,181 +17.5 7th Chicago _ _ _26 " 1,301,608,200 1,255,260,014 +3.7 8th St.Louis. _ _ 6 " 432,829,746 378,116,382 +14.5 0t13 Minneup011913 " 311,365,445 258,167,445 +20.6 10th Kansas City14 " 506,030,645 456,154,744 +10.9 11th Dallas 10 " 313,338,023 258,041,336 +21.4 12th San Fran 22 " 781,821,356 667,087,095 +17.2 January 1932. January 1931. $ 1,314.910,389 17,205,046.569 1,422634,280 1,036,123,674 534,443,031 475,918.902 1,825,087,389 461.4E3,498 372.719,135 596,814,140 316,950,895 941,741,233 $ 1,962,310,836 25.951,117,687 1,973,993,171 1,604.769.598 673.706,769 639,593,102 3.165,919,853 665,933.926 437.260,366 894,521,131 418,076,227 1,263,781,019 Total 170 cities 21,399,011,818 20,145,937,988 +6.2 26,453,863,115 39,650,883,684 7,846,757,424 7,500,012,963 +4.6 9.769,516986 14,350,423.507 Outside N. Y. City nerlatia 79 41,14. i *RR zgi n7n 077 cr, oca -I-no. 1444 nv. 1 .0 mo 119 Complete and exact details for the week covered by the Our usual monthly detailed statement of transactions on foregoing will appear in our issue of next week. We cannot the New York Stoek Exchange is appended. The results furnish them to-day, inasmuch as the week ends to-day for January in 1931 to 1934 are given below: (Saturday) and the Saturday figures will not be available Month of January. until noon to-day. Accordingly, in the above the last day Description. of the week has to be in all cases estimated. 1934. 1931. 1933 1932. In the elaborate detailed statement, however, which we Stock, number of shares_ _ _ _ 54,565,349 18,718,292 34,362,383 42,423,343 Bonds. present further below, we are able to give final and complete Railroad and miscell. bonds_ $275,478,000 $160,091,700 5155,841,000 $175.943,000 results for the week previous, the week ended Feb. 3. For State, foreign, dcc., bonds__ 93.687,500 64.850.500 66.694.000 64,036,500 If. S. Government bonds_ _ _ 71,819,200 38,132,900 69,853,000 17,066,200 that week there is an increase of 11.8%, the aggregate of Total bonds $263,030,100 8292.388,000 $257,045,700 5440,984.700 clearings for the whole country being $5,746,532,029, against $5,138,342,805 in the same week in 1933. The volume of transactions in share properties on the Outside of this city there is an increase of 5.1%, the bank New York Stock Exchange for the month of January for clearings at this center having recorded a gain of 15%. the years 1931 to 1934 is indicated in the following: We group the cities according to the Federal Reserve districts in which they are located and from this it appears 1934. 1933. 1932. 1931. that in the New York Reserve District, including this city, No. Shares. No. Shares. No. Shares. No. Shares. there is a gain of 14.5% and in the Boston Reserve District 54,565,349 18,718,292 34,362,383 42,423,343 of 7.0%, but in the Philadelphia Reserve District there is a Month of January loss of 10.9%. In the Cleveland Reserve District the totals The course of bank clearings at leading cities of the country show a decline of 0.5% and in the Richmond Reserve District of 5.9%, but in the Atlanta Reserve District the totals are for the month of January in each of the last eight years larger by 15.0%. The Chicago Reserve District has a gain is shown in the subjoined statement: of 9.5% to its credit, the St. Louis Reserve District of 24.2% BANK CLEARINGS AT LEADING CITIES IN JANUARY. and the Minneapolis Reserve District of 32.9%. In the 1934. 1933. 1932. 1931. 1930. 1929. 1928. 1927. i $ (000,0008 omitted). $ 8 Kansas City Reserve District the totals are larger by 16.0%, 13,552 12,646 16,684 25,300 32,031 43,903 31,043 25.562 New York in the Dallas Reserve District by 16.4% and in the San Chicago 795 1,141 2,035 2,652 3,522 3.187 2.890 822 859 Boston 795 1,134 1,734 2,204 2.361 2,466 2,217 Francisco Reserve District by 13.1%. 1,119 1,252 b,326 1,849 2,788 2,798 2,547 2,437 Philadelphia SUMMARY OF BANK CLEARINGS. West Ended Feb. 3 1934. 1934, 1933. Inc.0? Dec. 1932. 1931. Federal Reserve Diets. let Boston_ _ _ _12 chief; 2nd hew York__12 " 3rd Philadelpla 9 4th Cleveland._ 5 " 5th Richmond _ 6 6th Atlanta. .10 7th Chicago. ._19 " 8th St.Louis___ 4 " 9th Minneapolis 7 " 10th Kansas City10 " 11th Dallas 12th San Fran._13 " $ 222,285.352 4,111,232,852 271,254,797 188,527,827 92,760,015 93,835,164 300.455.860 96,747.616 69,488.630 95,346,061 41,766,274 162,831,551 $ 207,829,747 3,589,761,346 304.467,045 189,504,229 99,536,563 81,629.631 274.403,484 77,883.815 52.295,637 82.226,462 35.895,278 143,909.568 Total 112 cities Outside N. Y. City 5,746,532,029 1,733,674,396 5,138,342.805 +11.8 1,649.202,195 +5.1 5,894.510,649 2,047,066,579 8,380,983,527 2,989,129,488 262.450 328 235.505.079 +11.4 320.079.586 383.080.085 Canada 32(*les $ % $ +7.0 268.255,133 431,962,390 +14.5 3,972,461,067 5,527,588,571 -10.9 291,933.395 426,496,204 -0.5 240,261.853 344,358,951 -5.9 120,466.552 155,624,167 +15.0 95,061,170 127,779,901 +9.5 354,582,055 681,099.625 +24.2 98,303,263 123,907,997 +32-9 69,387,632 92,115,565 +16.0 105.695.420 151.994,958 +16.4 46,346,308 59,584,195 +13.1 198,754,701 258,468,003 We also furnish to-day a summary of the clearings for the month of January. For that month there is an increase for the entire body of clearing houses of 6.2%, the 1934 aggregate of clearings being $21,399,011,818, and the 1933 aggregate $20,145,937,988. In the New York Reserve District the totals record an increase of 6.9%,and in the Boston Reserve District of 7.3%, but in the Philadelphia Reserve 276 345 434 202 168 276 227 197 105 278 96 114 36 49 110 80 46 53 119 59 92 44 37 St. Louis Pittsburgh San Francisco Baltimore Cincinnati Kansas City Cleveland Minneapolis New Orleans Detroit Louisville Omaha Providence Milwaukee Buffalo St. Paul Denver Indianapolis Richmond Memphis Seattle Salt Lake City Hartford Total Other cities Total all Outside New York 249 302 375 216 166 244 249 168 118 248 79 72 32 47 112 58 68 49 113 43 75 44 33 312 420 514 289 201 306 350 212 142 353 88 110 47 80 137 67 86 62 126 52 112 54 45 488 668 691 354 288 459 512 283 206 635 110 168 57 115 184 88 127 82 161 57 146 73 57 592 696 754 847 944 871 433 460 219 352 566 601 647 619 327 350 233 265 811 1,012 198 178 192 191 71 80 165 138 290 230 135 99 144 167 105 113 203 201 108 99 227 175 88 85 71 104 678 760 923 465 353 579 555 321 270 778 182 178 72 189 237 133 148 102 188 98 199 84 83 665 772 824 490 338 631 527 299 266 708 157 168 65 188 228 126 136 107 218 93 180 80 69 19,795 18,648 24,450 36,927 46,993 60,813 46,818 40,441 1,604 1,498 2,004 2,724 3,415 3,704 3,688 3,945 21.399 20,146 26,454 39,651 50,408 54,517 50.506 44,386 7,847 7,500 9,770 14,350 18,377 20,613 19.462 18,824 We now add our detailed statement showing the figures for each city separately for December and since Jan. 1 for two years and for the week ended Dec.31 for four years: CLEARINGS FOR JANUARY, AND FOR WEEK ENDING FEB. 3 FOR FOUR YEARS. Month of January. IVeek Ended Feb. 3. Clearings at1934. $ First Federal Reserve District -BostonMe.-Bangor 1,891,265 Portland 7,525.776 Mass.-Boston 858,837,593 Fall River 2,470,152 Holyoke 1,496,485 Lowell 1,220,654 New Bedford 2,408,108 Springileld 11,989,092 Worcester 5,654,626 Conn.-Hartford 36,658,446 New Haven 15,633,302 Waterbury 4,633.200 R.1.-Providence 35,876,400 N. H.-Manchester 1,811,631 Iota!(14 Mie9) 988,106,730 1933. Inc. or Dec. 1932. 1931. 1934. 1933. Inc. or Dec. 1932. $ % $ $ $ $ % $ 1931. $ 1,520,482 8,604,820 795,405,832 2,622,753 1,436,737 1.345,225 2,241,658 12,471,078 7,672,603 32.705,692 16,557,955 4,241,400 31,941,800 2,011,207 +24.4 2,228.116 2,680,357 -12.5 12,104,054 15,846,635 +8.0 1,133,965,644 1,733,901,776 -5.8 3,581,474 4,108,600 +4.2 2,124,526 2,584,754 -9.3 1,202,694 2,249,034 +7.4 3,162,392 3,995,572 -3.9 18,754,751 21,987,059 -26.3 12.050,675 14,447,397 +12.1 44,537,271 57,488,465 -5.6 28,408.357 33,170,366 +9.2 5,183,200 9,605,700 +12.3 47,285,000 56,705,600 -9.9 2,324,235 3,559,521 639,845 1,555,946 194,553,494 546,602 433,103 +47.7 2,006,602 -22.5 180,000,000 +8.1 531,640 +2.8 495,674 2,903,312 232,481,399 703,106 651,077 171,133 390,481,731 828,536 275,439 519,532 2,598.484 1.150,264 8,323,848 3,882,019 258,550 +6.5 486,627 +6.8 2,953,396 -12.0 1,719.091 -33.1 7,155,631 +16.3 3,888,281 --0.2 239,568 557,690 3,643,552 2,501,417 8,173,576 6,388.380 472,067 741,818 4,950,035 3,146.120 12,384,910 6,384,729 7,810,200 429,679 7,711,600 +1.3 685,226 -37.3 9,711.300 456,159 11,000,400 749,834 920.779,242 +7.3 1,314,910,389 1,962,310.836 222,285,352 268,255,133 431,962,390 207,829,747 +7.0 994 Financial Chronicle Feb. 10 1934 CLEARINGS-(Continued). Month of January. Week Ended Feb.3. Clearings at1934. 1933. $ $ Second Federal Reserve Dist rict-New Yo rkN. Y.-Albany 45,943,789 39,514.044 3,798,735 Binghamton 4,542,305 111,997,407 Buffalo 110,342,306 2,891,048 Elmira 2,355,170 1,948,049 Jamestown 1,992,150 New York 13,552.254,394 12,645,925,025 26,885,807 Rochester 25,181,5t7 15,074,994 Syracuse 16,232,974 10,047,781 Conn.-Stamford 13,878,067 1,850,000 N. J.-Montclair 1,702,258 76.555.921 Newark 70,405,422 118,133.625 Northern New Jersey 118,961,707 4,200,724 ._ Oranges 3,645,599 Total(13 cities) 13,961,007,963 13,065,252,905 Inc. ar Dec. 1932. 1931. 1934. 1933. Inc. or Dec. 1932. 1931. % $ a 5 a % $ s 29,150,146 28,952,624 -14.0 11,348,285 5,780,408 4,225.402 5,897,386 +19.6 1.564,007 1,507,391 136,665,456 184,457,898 -1.5 26,622,523 22.508,846 4,944,173 -18.5 3,687,906 968,841 1,342,315 5,202,103 2,904,637 367,148 478,643 +2.3 +7.2 16,684,334,129 25,300,460,177 4,012,857,633 3,489,140,610 39,648,491 47,038,668 7.577,567 8,935,110 -6.3 20,474,565 24,654,090 6,123,514 +7.7 4,237,174 14,030,582 12,337,829 2,380.074 2,536,920 +38.1 2,635,636 3,145,817 -8.0 534,631 420.000 141,209,293 20.096,654 111,263.218 -8.0 16.414,329 30,892,935 184,323,343 150.984,714 26,360,640 +0.7 6,801,533 -13.2 6,734,440 +6.9 17,205,046,569 25.951,117,687 4,111,939,852 3,589,701,346 +14.5 3,972,461,067 5,527.588,571 Third Federal Reserve Distri ct-Philadel phis5,241,323 2,261,906 316,803 +319.0 Pa.-Altoona 1,327,534 b b b b Bethlehem b 2,577.982 4.332,773 983,829 +22.3 Chester 1,202,790 16,662,174 11,760,926 8,772,514 -24.8 6.597,664 Harrisburg 6,814,438 6,542,212 3,699.481 -19.3 Lancaster 2,987,053 2,275,312 1,661,054 1,286,040 -12.9 _ Lebanon 1,119,952 3.185,771 1,797,738 -3.3 2,128,488 Norristown 1,737,837 Philadelphia 1,119,000,000 1,252,000,000 -10.6 1,325.700,000 1,849,200,000 13.042,186 13,158,689 7.526,168 -36.0 4.817,893 Reading 9,279,408 -0.8 15,480,965 20,576,669 9,205,03 Scranton 9,414,217 15,767,894 6,807.272 -20.8 Wilkes-Barre 5,390,320 5,876,841 8,456,631 4.137,890 -2.4 4,039,205 York No longer will report clearin ge N. J.-Camden 20,577,000 18,631,000 19,424,900 -6.7 13.460,600 Trenton Total (13 cities) 1,170.886,341 1.314,630,043 -10.9 1,422,634.280 1,973.993,171 Fourth Federal Reserve Die r let-Clevelan dc 1,661.000 Ohio-Akron 3,201,641 Canton 4,281,501 165,632,014 168,359,434 Cincinnati 248,907,537 227,046,562 Cleveland 33,661,500 29,190,000 _ Columbus 1,374,064 1,412,002 Hamilton 492,899 469,432 Lorain 3,100,214 4,496,813 Mansfield b b Youngstown 629.406 517,474 Pa.-Beaver County 279,097 339,449 Franklin 948,269 490,060 Greensburg 344,921,048 301,720,845 Pittsburgh 7,078,336 _ 7,054,606 Ky.-Lexington 6,694,669 65,812,275 W. Va.-Wheeling Total (14 cities) 798,824.218 770,947,929 Fifth Federal Reserve Distil C t-Richmond1,510,106 507,13o W.Va.-Huntington 9,892,000 8,044,000 Va.-Noriolk 113,425,076 _ 119,249,149 Richmond 3,123,038 b N.C.-RaleIgh 3,576,590 _ 4,128,023 S. C.-Charleston 3,305,979 • b Columbia 216,431,952 201,740,230 Md.-Baltimore 962,242 1,085,664 Frederick b b Hagerstown 55,737,297 72,567,289 . D.C.-Washington 390,491,495 Sixth Federal Reserve Distri:t-Atianta8,686,747 Tenn.-Knoxville 44,711,684 Nashville 160,700,000 Ga.-Atlanta 4,486,841 Augusta 1,875,795 Columbus 2,594,535 Macon 42,181,441 Fla.-Jacksonville 5,041,989 Tampa 55,696,135 Ala.-Birmingham 4,416,621 Mobile 2,465,211 Montgomery . 3,581,000 Miss.-Hattiesburg • b Jackson 1,133,132 • Meridian • 611,953 Vicksburg • 104,521,569 La.-New Orleans Total(9 cities) +96.3 7,081,400 7.034,093 +3.8 1,176,975 1,6135,402 +18.3 35,791,622 29,516,743 -27.8 1,765,400 1,604,711 -23.0 648.630 1,129,223 +15.0 3,847,444,070 .391,854.039 -15.2 11,238,800 11,264,319 -30.8 5,562,880 6,923,925 -6.2 3,135,414 3,620,734 +27.3 625,500 911,861 -18.3 24,319,548 31,946,978 -14.7 39,945,707 33,941,664 ---+33.7 +1.6 -8.8 +15.3 -2.7 -4.8 +45.0 b -17.8 +21.6 -48.3 +14.3 -0.3 -13.2 1.876,000 b 200,965.507 349,520,493 40,529,100 2,039,256 712,205 b b 983,221 492,169 1,317,424 419,825,259 9,419,341 8,443,699 17,039,000 15,922,320 287,654,274 512,411,472 62,337,400 3,866,718 1,564,419 7,129,388 b 1,716,873 653,811 2.947,658 667,709.718 9,532,213 14,284,336 +3.6 1,036,123,674 1,604,769,598 -66.4 -18.7 +5.1 372,438 b 245,794 411,064 b 272,245 -9.4 b -9.7 564,650 h 467,967 1,200,692 b 1,142,093 719,699 876,519 -17.9 1,011,415 1,494,090 262,000,000 1,077,540 2,100,551 1,043,875 1,028.900 294,000,000 -10:9 1,596,539 -32.5 2,348,323 -10.6 1,647,774 -36.6 957,581 +7.4 278,000,000 2,664,805 2,775,288 2,176,873 1,177,397 407,000,000 2,788.603 4,910,894 3,105,332 1.660.500 2,666,000 2,3E7,000 +13.1 3,095.000 3,194,000 271,254,797 304,487,045 -10.9 291,933,395 426,496,204 c cc c cc 36,883,521 -2.9 44,805,100 55,281,780 -8.9 70.702,675 6,698,800 +14.2 8,926,200 ---- c c 58,859,772 106,538,783 13.425,300 c c 35,822.682 50.379,810 7,649.300 1,008,234 b 645,493 +56.2 b b 850,000 b 1,250,000 b 114,977,878 164,285,096 -0.5 240,261,853 344.358,951 344,988 -59.7 2,635.000 -30.9 26.507,967 +8.6 423,912 2,949,477 29,067,218 579,825 3,574,637 38,857,000 93,667,801 89,994,635 +4.1 - - -- 188,527,827 139,018 1,820,000 28,793,265 189,504,229 -6.8 +12.8 b -23.2 2,059,150 12,859,593 125,514,683 3,437,109 3,469,107 4,252,631 288,743,871 1,251,151 b 92.855.736 4,050,618 16,366,678 161,326,591 7,143,373 8,281,555 10,437,283 354,170,650 1,765,407 b 109,764,614 424,794,672 -8.1 534,443.031 673,706,769 7.000.000 40,275,352 110,700,000 3,073,933 1,875,444 1,448,523 35,536,916 4.708,026 .38,136,685 3,870,848 2,147,263 2,925,000 5,516,762 1,228,397 509,516 117,753,516 +24.1 +11.0 +45.2 +46.0 +0.1 +79.1 +18.7 +7.1 +46.0 +14.1 +14.8 +22.4 -___ -8.0 +20.1 -11.2 13,264,243 44,227,827 140,200,000 5,253,824 2,806,737 2,265,055 46,337,718 5.978,561 54,077,453 5,103,516 3,013,930 4,229,000 5,050,000 1,455,376 648,491 142,007,171 12,500,000 69,348,049 172,576,186 6,398,055 3,527,042 4,692,321 56,457,599 6,820,184 71,644,419 7,550,575 3,918,775 6,323,000 8,913,006 2,049,942 828,096 206,045,853 1,979,418 10,248,389 34,400,000 955,545 220,824 22,630,032 191,826 +-1-5-.1 28,327,019 -14.0 266,137 32,865,370 248.767 40,929,453 376,706,181 +17.5 475,918,902 +15.4 891,123 671.319 +-37. 2.7 847,168 1.775,957 64,999,575 85,641.343 51.351,799 -:. 4-.1-3 12,256,172 17,025,490 --1876 22,179,202 27,195,405 92,706.015 98,536,563 -5.9 120,468,552 155,624.167 2.839,322 8,674,856 28,100,000 732,532 -30.3 +18.1 +31.8 +30.4 3,441,623 10,021,640 28,200,000 1,046,083 2.000,000 15,057.878 40,000,000 1,399,535 578,426 10,641,000 378,543 +-51.1-3 7,941,311 +34.0 586,589 10.000,000 804,913 12,584.140 11,250,794 930,738 7,534,887 +49.3 909,335 +2.4 10,435,862 1,197,866 12,979,768 1,777,447 48,860,437 b b I,- b b 639,593,102 93,835,164 81,629,631 +15.0 98,061,170 127,779,901 Seventh Federal Reserve Dis act-Chicag o401,911 259,425 Mich.-Adrian 3,848,203 2,309,776 Ann Arbor 247,619,954 277,846,633 Detroit 5,014,382 3,604,871 Flint 11,204,296 6,355,329 Grand Rapids 2,697,421 289,779 Jackson 2,265,193 2,834,690 Lansing 3,304,344 2,291,237 Ind.-Fort Wayne 5,220,810 7,283,586 Gary 48,527,000 53.132 Indianapolis 5,363,092 2,569,129 South Bend 14,518,836 18,110,893 Terre Haute 1,153,688 1,646,557 Wis.-Madison 47,216,115 48,655,004 Milwaukee 1,400,000 1,273,282 Oshkosh 2,023,858 1,229,723 Iowa-Cedar Rapids 10,000,000 b Davenport 21.109,046 21,423,498 Des Moines b b Iowa City 7,303,437 9,103,769 Sioux City b b Waterloo 663,214 775,556 Ill.-Aurora 3,235,945 1,143,101 Bloomington 794.814,436 821.611,010 Chicago 1,588,387 1,918,685 Decatur 8.341,137 10,721,294 Peoria 1,900,671 2,071,215 Rockford 4,526,638 3,167,878 Springfield 647,772 -35.5 777,278 -40.0 3,159,308 4,617,500 +12.2 352,611,933 634,529,398 -28.1 7,445,004 9,657,437 -43.3 16,650,191 23,192,568 3,447,841 5,077,595 -89.3 +25.1 9,121,180 13,844,987 -30.7 5,164,801 11,002,018 7,333,421 16,491,061 +39.1 +9.5 61.709,226 81,975,000 -52.1 7,218,838 9,751,401 +24.7 23,581,856 18,077,002 8,650,876 10,211,503 +42.7 80,456,298 +3.0 115,231,303 -9.1 2,235,593 3,468,381 -39.2 3.760,756 13,015,562 26,859,078 51,278,741 -_ +1.5 23.014,968 32,334,839 b b b +24.7 18,026,357 11,835,237 b b b +16.9 2,117,732 4,111,349 -64.7 4,637,256 6.292.889 +3.4 1,141,414,546 2,034,994,389 +20.9 3,016,874 4,371,896 +28.5 12,041,782 16,904,077 +9.0 4,968.768 10.906,926 -30.0 7,491,284 10,273,762 44,949 776,468 62.249,525 76,599 -41.3 989,424 -21.5 61,278,919 +1.6 145,249 837,069 73,327,843 1,698,101 2,629,846 -35.4 3,219,310 181,768 1,030,3L0 134,942,483 , .. 5.288.025 751,127 508,084 864,520 -13.1 826,924 -38.6 -12,407,000 -19..7 -844,290 -66.4 2,626,263 +26.0 2,444,300 1,320,923 3,757,920 2,759,743 13,631,000 1,350.205 2,984,905 17,748.000 2,240,203 4,129.578 -1-674 21.076,680 26,512,932 -.-- 872,094 2,718,707 283,969 197,977.952 485,026 2,528,217 419,149 691,924 751,511 166,295,451 330,843 2,012,302 407,717 1,081,720 1,301,608,200 1,255,260,014 +3.7 1,825,087.369 3.165,919.853 300,455,860 274.403,484 Total(16 cities) Total (28 cities) 442,701,653 Eighth Federal Reserve Distr ict-St. Loui 5b b Ind.-Evansville b b New Albany 248,988,954 276,436,137 Mo.-St. Louis 78,842,749 98,090,746 Ky.-Louisville b b Owensboro 5,375,484 b Paducah 43,496,541 58,743,544 Tenn.-Memphis 122,139 150,319 Ill.-Jacksonville 1,290,515 1,409,000 Quincy Total (6 cities) 432,829,746 b b +11.0 +21.9 b .___ +35.1 +23.1 +9.2 b b 311,866,275 88,079,146 b 6,548,647 52,029,785 523,671 2.415,974 b b 487,561,418 109.873,173 b 7,390,648 57,445,165 686,188 2,877.354 378,116,382 +14.5 461,463,498 665,833,926 9,988,000 284,032 3,308,365 11.606,882 294,152 13,879,464 b 5.014,934 5,545,823 -9.6 5,579,583 7,082.690 2,084,914 b 1,555,068 +34.1 b b 2,923,423 b 4.099,742 b -62.2 +18.8 +40.6 +25.6 +2.8 -36.0 921,132 247,738,329 627,755 2.689,952 1,056,125 1,836,178 1,525,448 456,770,946 969,604 3,705,127 2.480,155 3,161,254 +9.5 384,582,055 681,099,625 b b b b b 59,800,000 23,986,095 50,300,000 +18.9 18,198,862 +31.8 65,300,000 19,734,744 84,000,000 25,379,650 12,543,521 b 418,000 9,142,647 +37.2 b b 242,306 +72.5 12.643,979 b 624,640 13.836,460 b 691,887 96.747.616 77.883,815 +24.2 98,303,363 123,907,997 995 Financial Chronicle Volume 138 CLEARINGS-(Concluded.) Week Ended Feb. 3. Month of January. Clearings at- inc.or Inc. OT 1934. 1935. i $ Ninth Federal Reserve Mari ct-Minneap oils7,373,781 7,794,558 Minn.-Duluth 167,648,080 197,384,997 Minneapolis 744,454 726,800 Rochester 58,052,132 79,922,824 Bt.Paul 5,784,410 6,245,628 N. D.-Fargo 3,159,000 2,923,300 Grand Forks 497,300 477,212 Minot 2.003,102 1,938,350 S. D.-Aberdeen 2.956,342 3,548,016 Sioux Falls 1,060,413 1,265,350 Mont.-Billings 1,541,331 1,591,169 Great Falls 7,234,596 7,390,809 Helena 130,158 138,781 Lewistown 311,365,448 Total (13 cities) 506,030.645 Eleventh FederalReserve DI I trIct-Dallas • 3,224,883 Texas-Austin Beaumont • 3,180,500 139,591,438 Dallas El Paso • 11,226,109 Ft. Worth • 21,821,370 Galveston 10,081,000 Houston 111,812,442 . Port Arthur 1,212,135 Wichita Falls • 2,497,159 La.-Shreveport 8,711,007 Total (10 cities) 313,338,023 1932. 1931. 1934. 1933. Dec. 1932. % $ $ 8 $ % $ Total (22 clues) Outside New York • 781,821.358 $ 10,185,848 212,124,982 1,203,657 67,211,328 7,414,842 4,891.000 803.292 2,546,717 4.524,983 1,622,724 2,468,543 7,733,836 207,403 18,518,634 282,597,218 1,518,323 87,659,349 8.018,354 6,463,000 1,199,777 4,136,745 8,873,364 2,444,249 3,558,004 12,179,721 293.627 1,623,017 46,499,436 1,407,942 +15.3 34,375,841 +35.3 2,251,907 46,860,722 4.131,575 61,330.827 17,441,698 1,322.881 13,149,670 +32.6 1,354,104 -2.3 16,041,604 1,852,971 20,028,423 2,059,783 890.252 258,167,445 +20.6 322,719,135 -39.9 -30.0 +19.9 +58.1 9.8 +6.9 -48.5 -0.5 +13.1 +20.4 +21.6 -21.9 -33.0 -14.9 443,792 475.715 -6.7 628,491 2.50;477 197,603 +26.8 346,709 583,192 1,907,351 1,334,962 +42.9 1,402.228 3,096,513 437,280,385 69,488,630 52,295,637 +32.9 69,387,632 92,118,565 1,001.790 680,917 8,839,503 109,503,187 9,108.651 9,751,559 20,359,211 1,801.600 306,195.203 14,342,000 21,558,921 3,308,955 88,399,233 3,988,410 1,377,324 1,865,702 13,518,305 168,180,038 9,549,058 14,851,610 29,885,487 2,831,251 458,887,703 23,352,003 32,530,883 4,410,623 127,297,484 6,003,762 71,961 81,862 1,773,019 25,382,280 100,879 -28.7 112,485 -27.2 1.743,786 +1.7 18,001.403 +58.6 217,836 178,684 2,376,620 24,082.285 321,316 570,513 3,383,923 37,249,253 1,398,638 2,229,072 1,520,265 -8.1 3,344,615 -33.4 2,751,860 4,838,773 3,242,239 6,564,402 61.155,184 2,617,190 58,477,051 +8.3 2,082,484 +25.7 66,527,342 3,023,985 93,582,497 4,571,780 232,193 389,876 -40.4 827,320 1,129,615 406,882 453,618 -10.3 870,715 1,399,420 456,154,744 +10.9 596,814,140 894,521,131 95,346.081 82,226,462 +16.0 105,895,420 151,994,958 +12.5 +24.5 +28.9 +16.7 +19.1 +8.2 +18.2 +27.6 -4.0 -0.5 4,347,943 0,370,974 133,138,781 11,394.951 29,118,580 12,030,000 103,588,710 1,483.477 3,028,000 12,471,479 6,255,428 7,614,931 166,327,152 22,780,242 36,759,440 13,671,000 137,476,229 2,413,584 6,996,000 17,782,221 258,041,336 +21.4 318,950,895 418,076,227 1,493,000 111,653,933 30,678,000 2,154.162 5,271,367 987,000 83,000,934 2,329,168 54,465,883 12,554,199 3,375,125 18,824,432 17,488,043 3,109,000 145,628,250 46,012,000 4,383,501 6,669.190 1,321,000 117,942.820 5,921,545 73,083,528 15,274.000 4,847,290 18,553,268 30,418,007 2,236,006 18,593,734 1,867,999 35,011,098 3,128.129 25,071,978 4,550,647 29,629,392 513,768,445 8,820,538 6,249,105 4,892,584 6,227,900 690,508,713 12,886,618 8,923,726 8,377,319 7,743,100 2,866,693 2,555,448 108,286,969 9,621,097 18,321,676 9,473,000 94,808,668 949,851 2,800,000 8,758,144 Twelfth Federal Reserve Die t rIct-San Fre nciscoWash.-Bellingham 1,000,000 +49.8 1,498,000 75,487,195 +21.4 Seattle 91,621,595 Spokane 17,256,000 +40.8 24,301,000 Yakima 2,016.997 1,303,547 +54.7 3,394,751 2,790,926 +21.6 Idaho-Boise _ 354.000 +31.1 Ore.-Eugene . 464,000 59,675.957 +29.3 Portland 77,151,142 1,698,238 +35.4 2.299,368 Utah- Ogden _ 44,077,494 +0.5 44,307,751 Salt Lake City 8,512,889 +35.7 8,840,142 Ariz.-Phoenix 2,532,848 +28.4 Calif-Bakersfield _ 3,252,040 12,859,456 +88.9 24,295,405 Berkeley . 11,280,326 +5.6 Long Beach 11,916,800 Los Angeles No longer will report clearings. 1,538,226 +39.8 2,150,587 Modesto 12,047,341 -3.3 Pasadena 11,652,664 2,683,761 +6.5 Riverside 2,857.027 20,889,812 -21.4 18,270,105 Sacramento San Diego No longer will report clearings. 375,457,691 +15.5 433,618,755 San Francisco 5,767,524 +16.9 6,741,807 San Jose 4,042,711 +12.4 4,545,092 Banta Barbara 3,422,363 +5.7 3,616,956 Santa Monica 4,808,990 +8.7 5,011,572 Stockton Grand total (170 cities) 1931. +5.7 +17.7 +2.4 +37.7 +8.0 7.5 -4.0 -3.2 +20.0 +19.3 +3.2 +2.2 +6.6 Tenth Federal Reserve Distr ct-KansasC Icy501,209 301,282 Neb.-Fremont 400,000 280,128 Hastings 8,826,578 7,945,222 Lincoln 72,120,320 114,023,317 Omaha 7,308,545 6,590,870 Kan.-Kansas City 8,945,504 7,428,653 Topeka 16,849,700 • 8,065,887 Wichita 1,443,839 • 1,437,319 Mo.-Joplin 244,265,038 278,351,730 • Kansas City 11,393,000 • 13,718,776 St. Joseph 16,881,978 20,507,039 Okla.-Tulsa 2,429,484 1,897,493 • Colo.-Colorado Springs 67,888,768 45,515,225 Denver 2,314,801 • 1,969,898 Pueblo Total (14 cities) Dec. 887,087,095 +17.2 21,399,011,818 20,145,937,988 7,848.757,424 7,500,012,983 941,741,233 1,263,781,019 857,404 801.037 +7.0 1,000,000 1,654,873 31,834,114 26,417,340 -F20:8 32,992,022 40,603.575 4,448,771 +7-.0 2,111,000 +14.7 -- 7.351.274 2,189,000 10,594,480 2,847,000 4,758,292 2,421,000 1,895,464 2,117,130 -10.5 2,815,912 3,884,487 41,766,274 35,895,278 +16.4 48,348,308 59,584,195 20,291,707 5.219,000 424,556 18,610,530 +22.2 3,687,000 +41.6 306,496 +38.5 . 24,389,198 6,129.000 522,218 31,607,620 8,932,000 950,209 • 17,046,732 13,091,641 +30.2 18,938,632 26.678,381 +8.5 10,119,393 13,888.829 2,488,170 +8.8 2,565,229 No longer Will report clear tags. 3,907,543 5,853,564 9.680,841 8,905,116 4,249,159 5,827,783 7,172,855 1,881,762 +41.3 2,658,508 No longer will report clearings. . 98,444,470 90,505,638 +8.8 117,768,641 2.021.081 1,322,047 1,256,839 +5.2 822,364 -0.8 1,409,595 815,483 723,493 +6.4 877.082 769,985 1,267,344 985,818 869,601 +11.1 6,357,865 149,991,245 2,568,399 1,866,783 2,377,525 1.589.800 143,909,568 +13.1 258,468,003 2,556,205 162,831,581 2,760.918 -7.4 198,754,701 +6.2 26,453,853,115 39,660,883,684 5,746,532,029 5,138,342,805 +11.8 5,894.510,649 8,380,983,527 +4.6 9,789,518.986 14,350,423,507 1,733,674,396 1,649,202,195 +5.12,047.066,5792,989,129,488 CANADIAN CLEARINGS FOR JANUARY, AND FOR WEEK ENDING FEB. 1 FOR FOUR YEARS. Afonih of January. Week Ended Feb. 1. Clearings at1934. CanadaMontreal Toronto Winnipeg Vancouver Ottawa Quebec Halifax Hamilton Calgary St. John Victoria London Edmonton Regina Brandon Lethbridge Saskatoon Moose Jaw Brantford Fort William New Westminster Medicine Hat Peterborough Sherbrooke Kitchener Windsor Prince Albert Moncton Kingston Chatham Samna Sudbury $ 370,340,480 489,650,581 168,134,228 60,112,084 18,340,787 15,290,526 8,833,563 14,338,461 18,837,229 6,496,289 8,285,878 9,689,682 15,059,303 10,878,501 1,135,616 1,616,086 4.463,238 1,998,310 3,358,804 2,109,694 1,821,825 803,207 2,425,197 2,199,497 3,949,497 8,403,175 972,174 2,833,875 2,080,172 1,909,886 1,847,098 2,368,567 1933. $ 297,375,537 332,861,078 141,044,169 47,843,974 14,822,114 14,819,381 8,168,918 12,799,420 17,829,228 6,010,299 5,223,237 9,084,530 16,472,923 12,157,882 1,003,641 1,223,831 4,428,602 2,296.727 2,726,529 1,788.524 1,578,993 735,872 2,229,935 2,029,852 3,059,535 1,888,304 886,986 2,425,082 1,932,674 1,733,370 1,442,244 1,833,975 Inc. or Dec. % +24.5 +47.1 +17.8 +25.8 +23.7 +3.2 +5.7 +12.0 +5.7 +8.1 +20.3 +6.7 -8.6 -10.5 +13.1 +32.0 +0.8 -13.0 +23.2 +18.0 +15.5 +9.2 +8.8 +8.4 +29.1 +6.5 +9.6 +16.8 +6.8 +10.2 +28.1 +44.8 1932. $ 339,180,779 336,321,389 125,905,069 56,631,566 22,222,031 18,165,211 10,698,991 18,952,343 20,129,269 8,427,038 8,380,185 11,445,628 17,685,320 14,587,761 1,358,814 • 1,268,538 6,018,650 2,509,387 3,360,095 2,213,039 2.053,551 768,441 2,838,369 2,394,631 3,821,987 9,771,495 1,295,774 3,248,299 2,055.681 2,070,142 1.777.316 2,178.268 1931. 5 506,450,117 489,377,943 141,546,305 70,464,368 25,493,583 23,197,113 12,904,388 21,413,788 31,319,291 9.598,785 8,857,810 13,868,105 21,263,120 15,472.231 1.822,820 1,852,718 8.438.565 3.980,321 4.530,371 2,784,521 2,841,284 947,777 3.473,426 2.982,087 4,819.882 13,071,390 1,563,140 3,250,209 3.077.905 3,004.896 2,637,978 3,130,335 1934. i 81,809,067 95,375,488 36,429,189 13,558,566 3,339,882 3,312,593 1,667,513 3,275,171 4,160,737 1,500,143 1,353,593 2.095,065 3,042,760 2,383,833 222,141 328,735 843,080 348,146 620,708 370,451 424.047 145,303 482,980 439,309 867,142 1,733,114 188,875 488,335 374,951 430,012 298,021 533,416 1933. $ 78,144,248 83,661,451 26,041,937 12,242,916 3,656,955 3,918,551 1,884,840 3,475,087 4,503,797 1,231,995 1,263,751 1,934,001 2.799,781 1,950,799 224,334 292,291 859,823 358.469 590,354 412,448 390,040 146,895 451,994 504,100 726,348 1,825,417 181,16 519,684 419,287 438,886 269,096 386,76 Inc. or Dec. 1932. 1931. $ % 96,601.511 +4.7 +14.0 123,127,259 35,331.553 +39.9 +10.7 13,698,978 -8.7 6,210,946 -15.5 5,307,083 -0.4 2,437,811 -5.8 5,144,049 -7.6 4,567,396 +21.8 1,976,089 +7.1 1,738,428 +8.3 3,033,264 +8.7 4,918,039 +22.2 3,153,957 -1.0 • 385,022 +11.8 352,118 -1.9 1,357,219 -2.3 548,634 +5.1 818,178 -10.2 630,998 +8.7 540,159 -0.9 206,375 +8.9 638,000 -12.9 511,015 +19.4 906,517 -5.1 • 2,560,480 +4.3 298,242 -8.0 937,791 -10.6 645,156 -2.0 587,838 +10.7 376,408 +37.9 539.079 $ 130,547,646 135,418,353 37,359,279 16,297,779 7,074,308 8,787,398 2,810,640 5,495,455 7,776.319 2,411,845 2,966,967 3,605,652 5,919,157 3,346,761 485,174 307,270 1,615,879 853,153 884,323 725,200 755,467 243.061 603.086 789,277 1,124,512 3.140,799 393,851 785,350 651,483 728,308 515,817 883,719 977,554,954 +28.5 1,055,511,075 1,459,012,112 262.450,326 235.505,079 +11.4 320,079.586 1,258,361.070 b No clearings available. c Clearing house not functioning at present. f Two largest banks merged Jan. 1; accounts for lower clearings. 383,083.088 Total (32 cities) • 996 Financial Chronicle Feb. 10 1934 Government Receipts and Expenditures. Through the courtesy of the Secretary of the Treasury we are enabled to place before our readers to-day the details of Government receipts and disbursements for January 1934 and 1933, and the seven months of the fiscal years 1933-1934 and 1932-1933: Treasury Money Holdings. The following compilation, made up from the daily Government statements, shows the money holdings of the Treasury at the beginning of business on the first of November, December 1933 and January and February 1934: July Ito Jan. 31—Month of January— General Funds. 1932-33. 1933-34. 1933. Receipts— 1934. $ S S Internal revenue: Income tax 10,136,127 15,628,853 335,488.362 358,884,324 Miscell. internal revenue-128.012,107 69,703,489 870,012,988 457,270,419 167,991,339 Processing tax on farm prod. 34,664,350 Customs 26,306,294 18,351,825 201,367,529 156,004,171 Miscellaneous receipts: Proceeds of Govt.-owned sec. 31.567,200 394,175 • Principal—foreign oblig_ 67,184,087 19,869,636 65,376 Interest—foreign oblig____ 10,541,216 39,694,188 2,124,018 234,811 All other 13,625,977 1,756,002 12,118.339 Panama Canal toils, &c.2,289,622 44,956,155 31,407,257 7.420,982 9.879,709 Other miscellaneous 210,953,510 115.620,071 1,679,851,451 1,138,505,911 Total receipts Voiding':in U.S. Treasury Nov. 1 1933, Dec. 1 1933. Jan. 1 1934. Feb. 11934. Erpenditures— General: 193,761,900 Departmental (note 1) 20,785,923 Public bldg. construction & 55,503,357 1,370,497.335 sites, Treas. Dept. (note 1) 6,880,182 191,693,056 48,746,382 River & harbor work (note 1) 4,032,873 270,804,435 National defense (note 1)___ 41,695,414 Veterans' Admin.(note I)-- 39,532,365 300,127,768 50,000,000 100,000,000 Adjusted-service ctf. . fundAgricultural Adjustment Ad169,999,742 ministration (note 1) 6,139,068 Farm Credit Administra37,987,754 Uon (note!) a1,00,400 Agricultural marketing fund al1,649,806 (note 2) a4,466,206 Distribution of wheat and 15,296,871 cotton for relief 6,003,432 Refunds of receipts: 7,180,223 1,497,126 7,572,215 Customs 1.192,816 33,423,103 37,440,032 Internal revenue 5,819,128 3,501,460 Processing tax on farm prod_ 83,036 83,036 55,078,597 12,002,999 Postal deficiency 10,000,000 4,377,544 b,872,199 Panama Canal 689,826 771,202 Subscription to stock of 0141,665 al91,000 a242,545 Federal land banks Civil Service retirement fund 20,850.000 20,850,000 (Government share) Foreign Service retirement 416,000 292,700 fund (Government share)7,775,000 6,700,000 Dist. of Col.(Govt.share)Interest on the public debt 21,772,316 17.455,254 375,251,785 347,010.135 Public debt retirements: 51,976,000 418,764,000 Sinking fund 24,689,000 Purchases and retirements 30,977,000 from foreign repayments Received from foreign governments under debt 357,850 2,909,650 settlements Estate taxes, forfeitures, 9,000 2,052,250 5,500 2,041,250 gifts. Eat 172,571,357 228,054,599 1,638.616.571 2,410,226,941 Total Emergency (note 3): Federal Emergency Administration of Public Works: 274,762,418 Civil Works Administrat'n_188,392,710 Loans and grants to States, 2,953,258 51,051,355 municipalities, &t7 Loans to railroads 6,990,000 6,990,000 139,621,178 Public highways 20,544,664 29.390.987 River and harbor work__ 13,923,130 9,121,326 Boulder Canyon project.... 1,583.777 12,601,520 38.471,332 AU other Administration for Indus516,645 2,944,292 trial Recovery Agricultural Adjustment Ad3,057,494 42,581,226 ministration Farm Credit Administration 40,000,000 Administrationof Emergency 31,095,815 183,430,971 Conservation Work Reconstruction Finance Cor466,763,791 111,723,822 1,084,369,980 588,857,445 poration 750,911 2,164,111 Tennessee Valley AuthorityFederal land banks (subscriptions to paid-in sur5,435,445 24,124,223 plus. &c.) Federal Savings and Loan Associations (subscriptions 12,500 18,000 to preferred shares) Federal Deposit Insurance Corporation (subscriptions 53,386,071 54,791,655 to stock) 808,007,731 111,723,822 1,963.833,054 588,857.441. Total Total expenditures (note 4)_980,.579.088 339,778.421 3,602.449,625 2,999,084,386 Excess of receipts Excess of expenditures(note 4)789,625,578 224,158,350 1,922,598,173 1,860,578,475 Summary. 769,625,578 224,158,350 1,922,598,173 1,860.578,475 Excess of expenditures 52,342,850 454,702,900 Lees public debt retirements 24,694,500 2,045,250 Excess of expenditures (excl. 744,931,078 222,113,100 1,870,255,323 retirements). _ 1,40f,875,575 public debt Trust and contributed funds, excess of recipts (—) or —1,721,797 +1.306,434 —15,871.269 —1,456,510 expenditures(+) Total excess of expenditures743,209,281 223,419,534 1,854,384,054 1.404,419,065 Increase 1+) or decrease (—) in general fund balance__ +511,052,490-227,269.192 +674,995,892 —89.714,375 Increase (+) or decrease (—) +1254261771 —3,849,658 +2529,379946 +1314,704690 in the public debt Trust and Contributed Funds.(Note 5.) 18,164,240 18,423,773 Receipts 93,077,942 91,485,745 Expenditures 16,442,444 19.730,207 77,206.674 90,029,235 Excess of receipts or credits 1,721,796 15,871,269 1,458,510 Excess of expenditures 1,306.434 a Excess of credits (deduct). Note 1.—Additional expenditures on these accounts for this month and the fiscal year 1934 are included under emergency expenditures, the classification of which will be shown in the statement of classified receipts and expenditures appearing on p. 4 of the daily Treasury statement for the 15th of each month. Note 2.—On and after May 27 1933 repayments of loans made from Agricultural Marketing Fund—Federal Farm Board, and Interest thereon, are reflected as credits In the expenditures of the Farm Credit Administration. Note 3.—Emergency expenditures for the fiscal year 1933 (except Reconstruction Finance Corporation) are Included in general expenditures, the classification of which emergency expenditures is not available for comparison with emergency expenditures for the fiscal year 1934. Therefore neither the totals of general expenditures nor the totals of emergency expenditures for the two fiscal years are comparable. Note 4.—Total expenditures and excess of expenditures for the fiscal year 1933 include expenditures made by the Reconstruction Finance Corporation. whereas in last years daily Treasury statements Reconstruction Finance Corporation expenditures appeared on p. 3. Note 5.—The classification of receipts and expenditures on account of contributed funds prior to the fiscal year 1934 is not available. Such receipts and expenditures were classified as special funds and are included in the receipts and general expenditures under general and special funds for the fiscal year 1933. Net gold coin and bullion_ Net silver coin and bullion Net United States notes__ Net National bank notes_ Net Federal Reserve notes Net Fed. Res bank notes_ Net subsidiary silver Minor coin. &c $ 232,244,750 65,989,791 3.518,289 21,306,811 17,672,310 1,557.122 10.308,860 7.831.236 $ 260,364,348 61,853,099 2,481.049 18,742,572 16,860,665 1,524,534 10,450,945 7,183,386 $ 274,608,953 47,679,232 3,524,666 19,567,388 17,110,685 1,919,197 10,212,774 29,404,497 $ 346,269,963 49,682,843 2,422,372 19,170,668 16,569,475 1.930,137 11,042,114 7,361,766 Total cash In Treasury_ Less gold reserve fund__ 360,429.169 156.039.088 379,460.598 156,039.088 404.027,392 *454,428,981 156,039,088 156,039,088 Cash balance in Treas'y 204,390,081 223,421,510 247,988.304 298,389,893 Dep. In spec'l depositories account Treas'y bonds, Treasury notes and certificates of indebtedness 911.159,000 1,048,247,000 1,006,825,000 1,312,308,000 Dep. In Fed. Res. bank 46,157,433 118,611,923 104,372,400 313,833,868 Dep. In National banks— 7,463,356 7'45,171 7,354,344 6,595.383 To credit Treas. U.S 20,977,343 24,063,320 20,872,095 20,911,600 To credit disb. officers834.803 1,119,368 1,179,767 1.286.730 . ..)ash in Philippine Islands 2.568,497 2,698,670 2,739,960 2.814,141 3eposits in foreign depts_ 3ep.In Fed. Land banks_ Net cash in Treasury 1,193.788.180 1,422,254,605 1,394,253,523 1,956,033,009 and in banks 3educt current liabilities. 284.626.886 314,928,703 368,104,900 418,831,897 A vnlInhlw mush hftlfmr. 009.181.294 1.107.325.902 1.026.148.623 1.537.201.112 *Includes Feb. 1, $35,656,970 silver bullion and $4,941,060 minor, &c., coin not included in statement "Stock of Money." Treasury Cash and Current Liabilities. The cash holdings of the Government as the items stood Jan. 31 1934 are set out in the following. The figures are taken entirely from the daily statement of the United States Treasury as of Jan. 31 1934: Assets— Gold CURRENT ASSETS AND LIABILITIES. GOLD. Lfabatites— 4,034,867,780.67 Gold certificates: Outstanding (outside of Treasury) 1,126.973,149.00 Gold ctf. fund—Fed Reserve Board_ _ _ _2,587,771,258.66 Redemption fund— Fed. Reserve notes_ 43,355,766.73 Gold reserve 156,039,088.03 Gold in general fund..._ 140.728,518.25 Total 4,034,867,780.67 4,034,867,780.67 Total Note.—Reserve against $346,681,016 of U. S. notes and 81,194,574 of Treasury notes of 1890 outstanding. Treasury notes of 1890 are also secured by silver dollars In the Treasury. SILVER. Assets— Sliver ctfs. (Sec. 45, Act Silver bullion(Sec. 45, 840,000.001 of May 12 1933) 840,000.00 Act of May 12 1933)... 506,720,546.00 Silver Ms. outstanding. 492,199,979.00 Silver dollars Treasury notes of 1890 outstanding 1,194,574.00 Silver dolls. In gen. fund 13,325,993.00 Total Total 507,560.546.00 GENERAL FUND. Assets— 140,728,518.25 Gold (see above) Gold coin (see Note 1)... 49,502,356.94 Silverdollars (see above) 13,325,993.00 2,422.372.00 United States notes Silver °Us (Sec. 45, Act 679,880.00 of May 12 1933) 16,569,475.00 Federal Reserve notes 1,930,137.00 Fed.Res.Dank WARS19,170,668.00 National bank notes-11,042,114.29 Subsidiary silver coin4,941,059.83 Minor coin 35,656,969.66 Silver bullion Unclassified— 2,420,706.35 Collections, &c Deposits in: Federal Reserve banks 313.833,868.21 Special depositaries acct. sales of Treas. bonds, Treas. notes. and Ws. of indebt.1.312,308,000.00 Nat. and other bank depositaries: To credit of Treas6,595,383.43 urer U. S To credit of other 20,911,599.58 Govt. officers Foreign depositaries: To credit of Treas1,466,728.28 urer U. S To credit of other 1,347.412.14 Govt. officers.._ Philippine treasury: To credit of Treas1,179,767.41 urer U. S 507,560,546.00 Treasurer's checks outstanding 486,390.48 Depos. of Gov't officers: Post Office Dept 3,352,639.72 Board of trustees, Postal Savings System5% reserve, lawful money 60,683,402.53 Other deposits_ -- 44,707,275.43 Postmasters, clerks of courts, disbursing officers, dat 254,845,391.49 Deposits for: Redemption of Fed. Res. bank notes(5% fund, lawful money) 12,975,050.00 Redemption of Nat. bank notes (5% fund,lawful money) 39,412,506.11 Retirement of add'i circulating notes, Act of May 30 1908 1,350.00 Uncollected items, exchanges, &t, 2,367,891.42 418,831,897.18 Net balance 1,537,201,112.19 1,956.033.009.37 Total 1,956,033,009.37 Total Note 1.—Gold coin at cost, purchased under the provisions of Section 734 of Title 31, U. S. Code. The amount to the credit of disbursing officers and agencies to-day was $742,580,913.84. Under the Acts of July 14 1890 and Dec. 23 1913. deposits of lawful money for the retirement of outstanding national bank and Federal Reserve bank.notes are paid into the Treasury as miscellaneous receipts, and these obligations are made, under the Acts mentioned, a part of the public debt. The amount of such obligations to-day was $100,809,092.50. $1,793,155 in Federal Reserve notes, $1,930,137 in Federal Reserve bank notes and $10,070,433 in National bank notes are in the Treasury in process of redemption and are charges against the deposits for the respective 5% redemption funds and retirement funds. Preliminary Debt Statement of the United States Jan. 31 1934. The preliminary statement of the public debt of the United States Jan. 31 1934, as made upon the basis of the daily Treasury statement, is as follows: 997 Financial Chronicle Volume 138 Bonds2% Consols of 1930 2% Panama Canal Loan of 1916-36 2% Panama Canal Loan of 1918-38 3% Panama Canal Loan of 1961 3% Conversion bonds of 1946-47 2K% Postal Savings bonds(7th to 46th series) PRICES ON PARIS BOURSE. Quotations of representative stocks on the Paris Bourse as received by cable each day of the past week have been: 5599,724,050.00 48,954,180.00 25,947,400.00 49,800,000.00 28,894,500.00 78,030,240.00 $831,350.370.00 First Liberty Loan of 1932-47: $1,392,226,350.00 35% bonds 4% bonds (converted)._ 5,002,450.00 434% bonds (converted) 535,981,600.00 $1,933,210,400.00 454% Fourth Liberty Loan of 1933-38 (called and uncalled) Treasury bonds: 04% bonds of 1947-52 4% bonds 01 1944-54 388% bonds of 1946 56 384% bonds of 1943-47 334% bonds of 1940-43 3%% bonds of 1941-43 % bonds of 1946-49 3% bonds 01 1951-55 334% bonds of 1941 4)4-3(j% bonds of 1943-45 %% bonds, series of April 16 1934 5,367,422.350.00 7,300,632,750.00 $758,983,300.00 1,036.834,500.00 489.087,100.00 454,135,200.00 352.993,950.00 544,915,050.00 819,096,500 00 755,483,350.00 834,474,100.00 1,400.525,250.00 18,277.23E12 7,464.805,531.12 $15,596,788,651.12 Total bonds Treasury Note-3% Series A-1934, maturing May 2 1934 234% Series B 1934, maturing Aug. 1 1934_,. 3% Series A-1935, maturing June 15 1935._ 134% Series 13-1935, maturing Aug. 1 1935 _ 234% Series C.-1935, maturing March 151935. 334% Series 4-1936, maturing Aug. 1 1936 234% Series 13-1936. maturing Dec. 15 1936 234% Series 0-1936, maturing April 15 1936_ 34% Series A-1937, maturing Sept. 151937.. 3% Series B-1937, maturing April 15 1937 234% Series A-1938, maturing Feb. 1 1938 2%% Series 13-1938, maturing June 15 1938._ $244,234,600.00 345,292,600.00 416,602,800.00 353,865.000-00 528,056,500.00 364,138,000.00 357.921,200.00 558,819,200.00 817,483,500.00 502,361,900.00 276,679,600.00 618,056,800.00 55,383,511,700.00 4% Civil Service Retirement Fund, Series 1934 to 1.938 4% Foreign Service Retirement Fund. Series 1934 to 1938 4% Canal Zone Retirement Fund. Series 1936 to 1938 238,500,000.00 2,426,000 00 2,221,000.00 5,626,658,700.00 Certificates of Indebtedness%% Series TM-1934, maturing March 15 1934 % Series T.I-1934. maturing June 15 1934._ 23-4% Series TD-1934, maturing Dec. 15 1934_ 13.4% series TS-1934, maturing Sept. 15 1934_ $460,099,000.00 174.905,500.00 992,496,500.00 524,665.500.00 Feb. 3 Feb. 5 Feb. 6 Feb. 7 Feb. 8 Feb. 9 1934, 1934. 1934. 1934. 1934. 1934. Francs, Francs. Francs. Francs. Francs. Francs. 11,000 10,900 11,100 11,100 10.700 10,900 Bank of France 1,490 1,490 1,490 1,440 1,450 Banque de Paris et Pays Bas._. 1,470 231 230 223 223 Banque d'Union Parisienne_ ___ Nt -Yii 282 279 280 270 Canadian Pacific 20,230 20,790 20,500 20,400 20,025 ---Canal de Suez 2,465 2,510 2,435 2,450 2,465 Cie Distr d'Electricite 1-,966 1,880 1,870 1,870 1,880 1.860 Cie Generale d'Electricite __ 2628 26 27 Cie Generale Transatlantique___ 419 390 381 466 400 Citroen B 1:615 1,010 1,010 1,010 990 Compton Nationale d'Escompte 1,020 190 180 190 190 190 200 Coty Inc 300 290 289 285 283 ---Courrieres 725 725 708 692 697 Credit Commercial de France___ 4.666 4,500 4.600 4,510 4,510 4,570 Credit Fonder de France 2,050 2,010 2,040 1.990 1,940 1,960 Credit Lyonnais 2,490 2,460 2,490 2,450 2,450 Distribution d'Electricite is Par 2,460 2.690 2,680 2,640 2,690 2,670 2,640 Eaux Lyonnais 725 681 687 690 698 Energie Electrique du Nord. ___ 888 865 865 883 878 Energie Electrique du Littoral,. 28 -52 27 26 26 26 French Line 85 87 84 82 83 83 _Galeries Lafayette 1,020 1,020 1,010 1,010 1,010 1,020 Gas le Bon 620 620 610 610 620 610 Kuhlmann 750 740 720 700 700 710 L'Air Liquide 890 878 876 872 873 Lyon (P L 51) 300 "3$55 290 290 280 290 Mines de Courrieres 390 400 370 380 380 370 Mines des Lens 1,290 1,230 1,250 1,280 1,240 1,220 Nord Ry 850 856 859 847 850 Orleans Ry ____ 840 "iio 850 840 840 Paris, France 59 56 58 57 56 Pathe Capital 1:596 1,050 1,070 1,080 1,090 1,100 Pechiney 64.60 64.80 64.00 64.50 65.60 67.20 Rentes 3% 104.20 103.00 103.30 104.50 106.70 107.20 Rentes 5% 1920 75.00 76.10 76.20 73.90 72.70 73.00 Rentes 4% 1917 82.60 80.40 78.90 79.50 80.90 82.30 Rentes 4K% 1932 A 1,830 1,840 1,860 1.850 1,840 1,840 Royal Dutch 1,330 1,330 1,390 1,295 1.308 ---Saint Gobain C & C 1,545 1,518 1,518 1,547 1,565 Schneider & Cie 410 -iiat 390 380 340 400 Societe Andre Citroen 60 60 60 58 58 59 Societe Francalse Ford 80 80 85 82 80 82 Societe Generale Fonciere 2,650 2,685 --__ 2,675 2.660 2,680 Societe Lyonnaise 523 524 523 523 524 Societe Marseillaise - (-) 20,200 20,800 20,500 20,100 19,900 19,50 Suez 172 166 166 170 166 Tubize Artificial Silk pref 790 - 55 750 760 750 770 Union d'Electricite 190 190 190 190 190 180 Union des Mines 97 95 94 95 95 Wagon-Lits $2,152,166,500.00 4% Adjusted Service Certificate Fund Series. maturing Jan. 1 1935 127,500,000.00 2,279,666,500.00 Treasury Bills (Maturity Value)Series maturing Feb. 7 1934 Series maturing Feb. 14 1934 Series maturing Feb. 21 1934 Series maturing Feb. 28 1934 Series maturing Mar. 7 1934 Series maturing Mar. 21 1934 Series maturing Mar. 28 1934 Series maturing April 4 1934 Series maturing April 11 1934 Series maturing April 18 1934 Series maturing April 25 1934 Series maturing May 2 1934 $75,335,000.00 75,295,000 00 60.063,000.00 100,027.000.00 100,050.000 00 100.263,000 00 100,890,000 00 100,990,000.00 100,050,000.00 125,340.000.00 125,126,000 00 150,315,000.00 Feb. 3. 1,213,744,000.00 Total Interest-bearing debt outstanding Matured Deot on ITlatch Interest Ilas CeasedOld debt matured-Issued prior to April 1 1917 4% and 414% Second Liberty Loan bonds of 1927-42 4%% Third Liberty Loan bonds 01 1928 % Victory Notes of 1922-23 43% Victory Notes 01 1922-23 Treasury notes, at various interest rates Ctfs. of Indebtedness, at various int. rates.-Treasury bills Treasury Savings Certificates 524,716,857,851.12 51,527,330.26 2.194.100.00 3,555.300.00 11,150.00 877,950.00 2,567,300.00 33.391.050.00 9,751.000.00 508,125.00 54,383,305.26 Debt Bearing No InterestUnited States notes Less gold reserve $346,681,016.00 156,039,088.03 Deposits for retirement of National bank and Federal Reserve bank notes Old demand notes and fractional currency-- Thrift and Treasury savings stamps, unclassified sales, &c $190,641,927.97 100,809,092.50 2,038.657.08 3,321,672.24 296,811,349.79 Total gross debt 525,068,052,506.17 COMPARATIVE PUBLIC DEBT STATEMENT. (On the basis of daily Treasury statements.) Aug. 31 1919, March 31 1917, When War Debt Jan. 311933, Pre-War Debt. Was at Its Peak. a Year Ago. Gross debt 1,282,044,346.28 26,596,701,648.01 20,801,707.134.01 Net balance in general fund 74,216,460.05 1.118,109,534.76 327,482.802.87 Gross debt less net balance in general fund..._ 1,207,827,886.23 25,478,592,113.25 20,474,221,331.14 Dec. 311933. Last Month. Jan. 31 1934. Gross debt Net balance in general fund 93,813,790,735.55 25,068,052,506.17 1,026,148,622.86 1,537,201,112.19 Gross debt less net balance In general fund 22,787,642,112.69 23,530,851,393.98 ENGLISH FINANCIAL MARKET-PER CABLE. The daily closing quotations for securities, &c., at London, as reported by cable, have been as follows the past week: Sat., Mon., Wed., Tues., Thurs., Fri., Feb. 3, Feb. 5. Feb. 7. Fe,.. 8. Feb. 6. Feb. 9. Silver, per oz__ 19 15-165. 19%cl, 1934c1. 19 13-168. 19 9-16d. 19 11-16d. Gold. p.fine oz. 1385.38. 1405.18. 139s.3d. 1365.68. 1365.98. 1378.408. 7534 Consols, 21.4% 75 13-16 75 15-16 75 15-16 75 15-16 75 British 314%W. L 10134 10134 1017-4 10114 102 10184 British 4%1960-90 11134 11284 11214 11234 11134 1123-4 French Itentes (in Paris) 3% 64.80 67.20 64.00 64.50 65.60 64.60 French War L'n (in Paris) 5% 1920 amort 104.20 103.30 104.50 103.00 106.70 107.20 The price of silver in New York on the same days has been: Silver in N. Y., per oz. (cts.) 4334 44 4414 4474 THE BERLIN STOCK E (CHANGE. Closing prices of representative stocks as received by cable each day of the past week have been as follows: 4434 4484 166 Reichsbank (12%) 92 Berliner Handels-Gesellschaft (5%) 52 • Commerz-und Privet Bank A G Deutsche Bank und Disconto-Gesellschaft_ 65 65 Dresdner Bank Deutsche Reichsbahn (Ger Rys)pref(7%)-114 Allgemeine Elektrizitacts-Gesell(A E G)___ 30 125 Berliner Kraft u Licht (10%) 115 Dessauer Gas(7%) 96 Gesfuerel (5%) 110 Hamburg Elektr-Werke (8%) 147 Siemens & Halske (7%) 127 1 G Farbenindustrie (7%) Salzdetfurth (714%) 199 Rheinische Braunkohle(12%) 106 Deutsches Erdoel (4%) 64 Roehren Mannesmann 30 Hapag 32 Norddeutscher Lloyd Feb. 5. 167 92 53 67 67 113 31 124 116 95 112 146 129 152 199 107 65 30 32 Feb. Feb. Feb. 7. 8. 6. Per Cent of Par 165 166 165 94 93 93 52 54 54 65 68 66 66 68 68 113 113 113 30 30 31 123 124 124 115 115 115 95 95 94 112 113 113 144 145 145 127 128 127 156 155 154 200 200 iO,i 105 105 62 62 62 28 29 28 31 31 29 Feb. 9. 167 94 52 65 66 113 30 124 117 96 112 145 128 280 106 64 29 32 In the following we also give New York quotations for German and other foreign unlisted dollar bonds as of Feb. 9 1934: Anhalt 75 to 1946 Argentine 5%, 1945, $100 pieces Antioquia 8%, 1946 Austrian DefaultedCoupons Bank of Colombia, 7%.'47 Bank of Colombia, 7%,'48 Bavaria 61.4s to 1945 Bavarian Palatinate Cons. Cit. 7% to 1945 Bogota (Colombia) 634,'47 Bolivia 6%, 1940 Buenos Aires scrip Brandenburg Elec. 6s, 1953 Brazil funding 5%,'31-51 Brazil funding scrip British Hungarian Bank 7Sis. 1962 Brown Coal Ind. Corp. 674s, 1953 Call (Colombia) 7%, 1947 Callao (Peru) 7.14%, 1944 Ceara (Brazil) 8%, 1947_ Columbia scrip Costa Rica funding 5%,'51 Costa Rica scrip City Savings Bank. Budapest, 75, 1953 Dortmund Mun Clii 65.'48 Duisburg 7% to 1945 Duesseldorf 75 to 1945_ East Prussian Pr. 6s. 1953_ European Mortgage & Investment 73-48. 1966_ - _ French Govt. 5345. 1937_ _ French Nat. Mail SS.65,52 Frankfurt 78 to 1945 German Atl Cable 7s, 1945 German Building & Landbank 615%. 1948 German defaulted coupons. German scrip Haiti 6% 1953 Harnb-Ans Line 63-4s to '40 Hanover Harz Water Wks. 6%, 1957 Housing & Real Imp 78. '46 Hungarian Cent Mut 75.37 Hungarian Discount & Exchange Bank is. 1983.__ Hungarian defaulted COUPS I Flat price. Bid. 145 82 124 195 /20 120 154 143 122 9 125 156 6112 16112 /56 /69 116 6 15 127 39 139 147 /50 143 143 158 1561 145 137 143 154 /64'2 174 1181 671 1751, 145 146 /4412 139 190 Bid. Hungarian Itai 13k 7745,'32 177 26 Jugoslavia 55, 1956 135 Jugoslavia coupons 154 Koholyt 614s, 1943 26 Land 3811k. Warsaw 8s, 341 67 23 Leipzig Oland Pr. 6748.'46 158 23 Leipzig Trade Fair 7s, 1953 152 Luneberg Power, Light & 56 /6412 Water 7%,1948 47 Mannheim & Palat 78, 1941 157 1491 23 Munich 78 to 1945 13 Muni° Ilk, Hessen. 7s to'45 144 Municipal Gas & Elec Corp 35 Recklinghausen, 75, 1947 /51 58 6312 Nassau Landbaisk 6548.'38 156 Natl. Bank Panama 674% 1946-9 /40 Nat Central Savings Bk of 58 Hungary 774s, 1962,,... 158 National Hungarian A; Ind. 71 Mtge. 7%, 1948 /56 18 9 Oberpfalz Elec. 7%. 1946.. 147 8 Oldenburg-Free State 7% 144 to 1945 35 /22 42 Porto Alegre 7%, 1968, ---- ProtestantChurch (Ger14712 many), 7s, 1946 Prov 13k Westphalia 65,'33 /55 _ 53 Prov 13k 'Westphalia 68.'36 15412 48 Rhine Westph Elec 7%,'36 /7012 125 48 Rio de Janeiro 6%, 1933 60 Rom Cath Church 6Ks.'46 16412 It C Church Welfare 75,'46 145 5812 Saarbruecken 38 13k 6s,'47 177 Salvador 7%, 1957 125 142 Salvador 7% ctf of dep '57 121 49 Salvador scrip 110 57 Santa Catharine (Brazil), 8%, 1947 122 6612 Santander (Colom) 75, 1948 114 Sao Paulo (Brazil) 68, 1943 123 ____ Saxon State Mtge. Os, 1947 165 Serbian 5s, 1956 26 8012 Serbian coupons 135 Siem & Halske deb 65, 2930 /300 47 Stettin Pub UtIl 7s, 1948.. 153 Tucuman City 75. 1951_ _ _ 130 I6-1; Tucuman Prov, 75, 1950_ _ 44 Vesten Elec Ry 78, 1947_ 139 41 Wurtemberg 75 to 1945,,. 15112 Ask. 48 Ask. 1639 57 72 62 5412 66 -5112 47 54 61 41 60 58 50 47 24 .5012 59 5712 7312 27 6612 47 27 22 15 24 16 25 69 30 39 325 55 3112 47 42 54 Financial Chronicle 998 gominerciaiandP,LiscUancon54.ems Breadstuffs Figures Brought from Page 1075.-All the statements below, regarding the movement of grainreceipts, exports, visible supply, &c.-are prepared by us from figures collected by the New York Produce Exchange. First we give the receipts at Western lake and river ports for the week ending last Saturday and since Aug. 1 for each of the last three years: Receipts atChicago Minneapolis_ _ Duluth Milwaukee_ _ Toledo Detroit Indianapolis_ St. Louis__ _ _ Peoria Kansas City_ _ Omaha St. Joseph_ Wichita Sioux City _ Buffalo Flour. I Wheat. I Barley. Rye. Oats. Corn. bbls.196Ibs.Ibush.60 lbs bush.56 lhs.'bush. 32 lbs.bush.5811s.bush.481bs. 7,000 120,000 862,000 145,000 185,000 106,000 78,000 235.000 274,000 77,000 1.072,000 13,000 2,0% 300,004 128,000 68,000 224,000 126,000 43,000 15,000 5,000 10,000 9,000 71.000 22,000 32,000 7,000 14,000 10,000 22,000 17,000 30,000 252,000 132,000 77,000 5,000 146,000 289,000 364,000 174,000 36,000 13,000 255,000 60,000 55.000 17,000 428,000 26.00 12,000 465.000 2,000 213,000 4,000 164,000 26,000 191,000 50,000 7,000 95,000 88,000 2,000 1,000 22,000 23.000 2,000 176,000 4,000. 323,000 35,000 Total wk.1934 Same wk.1933 Same wk.1932 413,000 385,000 373,000 2,766,000 2.768,000 5,185,000 3,576,0001 2,489,000 3,294,000; 995,000 987,000 1.022,000 152,000 102,000 77,000 661,000 343,000 371,000 Since Aug.11933 9,190,000146,996,000123,579.0001 46,052,000 7,970,00032,359,000 1932 10,264,000 222.137,000,112,958,000 55,441,000 6,873,00025,678,000 1931 11.849,000214,263,000 72,933,000 43,042,000 4,359,00022,192.000 Total receipts of flour and grain at the seaboard ports for the week ending Saturday, Feb. 3 1934, follow: Receipts at-I Flour. I Wheat. Corn. I Oats, I Rye. I Barlett. bbls.1981bs.Ibush.60 lbs. bush.56 lbs.lrush. 32 lbs.bush.581bs.bush.481bs. 7,000 New York_ _ 116,006 137,000 6,000 I 1,000 58,000; 4,000 61.000 Philadelphia__ 24,000, 6,000 1,000 12,000 33,000;1 9,000 9,000 Baltimore_ _ 26,000 Newport News 1,000 Norfolk 6,000 New Orleans * 21,000 69,000, 21,000 27,000 1,000 Galveston_ _ _ St. John, West 9,000. 520,000 75,000 2,000 Boston 45,000; 6,000 Halifax 33,000 32,000 8,000 Total wk.1934 267,006 742,000 Since Jan.1'34 1.326,006 4,295,000 169,000 560.000 129,000 515,000 70.000 126,000 9,000 85,000 Week 1933_ 271,000 Since Jan.1'33 1,277,000 79,000 386,000. 58,000 397,000 4,000 43.000 6.000 478,000 3,830,000 *Receipts do not include grain passing through New Orleans for foreign ports . on through bills of lading. The exports from the several seaboard ports for the week ending Saturday,. Feb. 3 1934, are shown in the annexed statement: Exports fromNew York Norfolk Newport News New Orleans Galveston St. John, West Halifax Wheat. Corn. Flour. Oats. Rye. Barley. Bushels. Bushels. Barrett. Bushels. Bushels. Bushels. 2,000 8,395 615,000 6,000 1,000 4,000 4,000 2,000 11,000 9,000 75,000 520,000 32,000 33,000 8,000 Total week 1934__ 1,167,000 Same week 1933____ 1,732,000 12,000 324,000 66,395 53,571 85,000 17,000 National Banks.-The following information regarding National banks is from the office of the Comptroller of the Currency, Treasury Department: CHARTERS ISSUED. Capital. Jan. 27-The Union National Bank at McKeesport, McKeesport. Pa $200.000 President, R. M. Baldridge. Cashier, C. C. Herklotz. Will succeed No. 7559, The Union National Bank of McKeesport. 50,000 Jan. 27-First National Bank in Milton, Milton,Fla Capital stock consists of $25,000 common stock and $25,000 preferred stock. President, S. N. Cox. Cashier, P. M. Caro. Will succeed No. 7034, The First National Bank of Milton. Jan. 29-The Citizens National Bank of Collingswood. Collingswood, N.J 100,000 President, Albert J. Bartlett. Cashier, Homer T. Pierson. Will succeed No. 7983. The Collingswood National Bank. 100,000 Jan. 29-First National Bank in Freeland, Freeland,Pa President, Edgar Albert. Cashier, John J. McGarey. Will succeed No. 6175, The First National Bank of Freeland. Jan. 29-The New First National Bank of Marietta, Marietta,0. 140,000 President,C.F.Mead. Cashier, W.S.Eberle. Primary organization. Jan. 29-The Lake Crystal National Bank, Lake Crystal, Minn _ 50.000 Capital stock consists of $25,000 common stock and $25,000 preferred stock. President. C. H. Keller. Cashier. Clayton Jones. Will succeed No.6918, The First National Bank of Lake Crystal. 50,000 Jan. 29-First National Bank in St. Charles, St. Charles. Minn_ _ Capital stock consists of $25,000 common stock and 325,000 preferred stock. President, Frank J. Kramer. Cashier, George Eckles. Will succeed No.6237, The First National Bank of St. Charles. 50,000 Jan. 29-First National Bank in Clarksville,Clarksville,Tex_ _ _ _ Capital stock consists of $25,000 common stock and $25,000 preferred stock. President. C. D. Lennox. ' Cashier, A. B. Lennox. Will succeed No. 3973, The First National Bank of Clarksville. 50,000 Jan. 30-First National Bank in Pinckneyville,Pinckneyville,Ill. Capital stock consists of $25,000 common stock and 825.000 preferred stock. President. E. R. Hincke. Cashier, Roy Alden. Will succeed No. 6025, The First National Bank of Pinckneyville 800,000 Jan. 30-National Bank of Flint, Flint, Mich Capital stock consists of $300,000 common stock and 8500,000 preferred stock. President, It. T. Longway. Cashier, H. B. Ward. Will succeed No. 10997, First National Bank & Trust Co. at Flint, and Union Industrial Trust & Savings Bank. Feb. 10 1934 50.000 Jan. 31-The Bright National Bank at Flora,Flora,Ind Capital stock consists of $25,000 common stock and $25,000 preferred stock. President, J. V. Bright. Cashier, Blanche Wickard. Will succeed No. 8014, The Bright National Bank of Flora. Jan.31-The First National Bank of West Union. West Union, 50,000 Iowa Capital stock consists of $25,000 common stock and $25,000 preferred stock. President, Frank Camp. Cashier, D. R. Lynch. Will succeed No. 2015, The Fayette County National Bank of West Union. Jan.31-Frostburg National Bank,Frostburg, Md 75,000 President, William Jenkins. Cashier, J. Dale Snodgrass. Will succeed No.4926, The Citizens National Bank of Frostburg. Feb. 1-First National Bank at Conneaut Lake, Conneaut Lake. Pa 50,000 Capital stock consists of $25,000 common stock and $25,000 preferred stock. President, S. Frank Hazen, Cashier, Stewart W. Gehr. Will succeed No. 6891, The First National Bank of Conneaut Lake. Feb. 1-The Columbus National Bank of Providence, Providence. R. I 200,000 Capital stock consists of $100,000 common stock and $100,000 preferred stock. President, Luigi Scala. Cashier, Achille G. Vervena. Will succeed The Columbus Exchange Trust Co. of Providence. Feb. 1-The Herndon National Bank,Ilerndon,Pa 50,000 President, Carlos Wiest. Cashier, A. S. Hepner. Will succeed No. 6049, The First National Bank of Herndon. Feb. 2-Ohio Valley National Bank of Henderson, Henderson, Ky 200,000 Capital stock consists of $100,000 common stock and $100,000 preferred stock. President, John C. Worshan, Cashier, C. W. Gotha. Will succeed Ohio Valley Banking & Trust Co. of Henderson. Feb. 2-The First National Bank in Big Spring,Big Spring,Tex. 100,000 President, B. Reagan. Cashier, R. L. Price. Will succeed No. 4306, The First National Bank of Big Springs, and No. 6668, The West Texas National Bank of Big Spring. •••••••••••,...1 CHANGE OF TITLE. Bank & Trust Co.in Minot.Minot, Jan. 29-The Union National N. Dak., to "The Union National Bank in Minot." Feb. 1-Freeborn County National Bank & Trust Co. of Albert Lea, Minn., to "Freeborn County National Bank of Albert Lea." VOLUNTARY LIQUIDATIONS. Jan. 29-The Citizens Nat. Bank of Hampton, Hampton,Iowa_ 100,000 Effective, Jan.20 1934. Liq. Committee: R. R.Stuart, Lavine Jones and John A. Blum,care of the liquidating bank. Succeeded by the "First National Bank of Hampton," Iowa, Charter No. 13842 Jan. 29-The Farmers National Bank of Holdenville, Holden25,000 vine, Okla Effective, Oct. 8 1933. Liq. Agent, I. S. White, Holdenville, Okla. Absorbed by The First National Bank of Holdenville, Okla. Charter No, 5270. Jan. 30-The First National Bank of Belmar, Belmar, N.j 50,000 Effective, Dec. 1 1933. Liq. Committee, Board of Directors of the liquidating bank. Succeeded by The Belmar National Bank, Belmar, N. J. Charter No. 13848. Jan. 30-The Washington National Bank of Commerce of 100,000 Seattle, Seattle, Wash Effective, Jan. 9 1934. Liq. Agent:, W. J. Colkett Jr., care of the liquidating bank. Absorbed by The National Bank of Commerce of Seattle, Wash. Charter No. 4375. Jan. 31-T1 e Rockwell City National Bank, Rockwell City,Iowa 50,000 Effective, Jan, 29 1934. Liq. Agent, Geo. B. Lemon, Rockwell City, Iowa. Succeeded by The National Bank of Rockwell City,Iowa. Charter No. 13890. Feb. 1-The Fletcher American National Bank of Indianapolis. 3,600,000 Ind Effective, Jan. 24 1934. Liq. Committee: Frank C. Bopp, Lucius S. French and Otto J Feucht, care of Succeeded by American the liquidating bank. National Bank at Indianapolis, No,13759. Liquidating bank has one branch. BRANCHES AUTHORIZED. Jan. 29-The Forbes Nat. Bank of Pittsburgh, Pittsburgh, Pa. Location of branch, Gulf Building, No. 701 Grant Street, Pittsburgh, Pa. Certificate No. 963A. Jan. 30-National Bank of Flint, Flint, Mich. Location of branch, corner of Hamilton and Industrial Ayes., Flint, Mich. Certificate No. 964A. Feb. 1-The Columbus National Bank of Providence, Providence, R. I. Location of branch, No. 361 Atwells Ave., Providence, R. I. Certificate No. 965A. Auction Sales.-Among other securities, the following, not actually dealt in at the Stock Exchange, were sold at auction in New York, Boston, Philadelphia and Buffalo on Wednesday of this week: By Adrian H. Muller & Son, New York: 8 per Share. Shares. Stocks. 10,1250 participatory interest in the Federal Leather Co. participatory receipts 81,000 lot and certificates of participation Promissory note In the sum of $40,000, dated May 10 1932, payable on de$50 lot mand, made by Kenilworth Homes, Inc Per Cent. Bonds$150,000 aggregate principal amount of Wayne United Gas Co. 5-year cony.7% secured gold notes, due June 1 1934, with Dec. 1 1932 & subs, maturing 75% flat coupons attached By Adrian H. Muller & Son, Jersey City, N. J.: No Sales. By R. L. Day & Co., Boston: Shares. Stocks. 25 National Rockland Bank, Boston. par $20 1 Blue Hill Bank & Trust Co., Milton, par UN 98 Talbot Mills, par 8100 3 Suncook Mills common, par $100 6 Farr Alpaca Co.. par $100 5 Sanford Mills 8 Sagamore Manufacturing Co.. par $100 2 Boston Railroad Holding Co., preferred, par $109 294 Brockton Public Market Inc., par $100 1 Plymouth Cordage Co., par $100 14 Draper Corporation 8 Saco Lowell Shops second preferred. Par 5100 395 Collins .S. Fairbanks Co., par $100 29 Saco Lowell Shops first preferred. par $100 5 Chapman Valve Manufacturing Co., common, par 825 25 Florence Stove Co., preferred, par 5100 50 Great Northern Paper Co., par $50 21 Craton & Knight Manufacturing Co., preferred, par $100 27 Saco Lowell Shops second preferred, par $100 Bondsern 81,000 Boston Elevated Ry. 5s, December 1942 32.000 Boston Elevated Ry.43.0, November 1941 81.000 Salem Country Club 50, September 1941 Promissory note for $1,500 to Combined Realties, Ltd., with interest and endorsed without recourse, dated April 24 1933 $ Per Share. 57 250 103 614 30X 41 51Ii 364 819,600 lot 70 59M 1114 ao 301i 154 100X 3014 40 1114 Per Cent. 8444 Ss int. 813./ & int. $11 lot at 6%, $25 lot By A. J. Wright & Co., Buffalo: Shares. stoat. 15_Como Mines i per Share. $0.80 By Barnes & Lofland, Philadeiphia: Stocks. Shares. 20 Philadelphia National Bank, par $20 40 Germantown Trust Co., par $10 25 Girard Trust Co., par $10 10 Pennsylvania Co. for Ins. on Lives & Granting Annuities, par $10 25 Fire Association of Philadelphia, par 810 50 Camden Fire Insurance Association, par $5 100 Lit Brothers common, no par 44 Giant Portland Cement Co., preferred, par $50 227 John Barber, Inc 30 Reading Bone Fertilizer Co 10 Real Estate Trust Co Bonds318,000 Pennsylvania Building 6% class A, reg., due Aug. 1 1934 d per Share. 54 15% 72% 30M 41 16M 1A 16 1 80c. 70 Per Cent. 24 Hat DIVIDENDS. Dividends are grouped in two separate tables. In the first we bring together all the dividends announced the current week. Then we follow with a second table in which we show the dividends previously announced, but which have not yet been paid. The dividends announced this week are: Name of Company. Railroads (Steam). Cincinnati N.0.& Texas Pacific 5% preferred (guar.) Elizabeth & Trenton (s.-a.) Semi-annual 5% preferred (s.-a.) 5% preferred (5.-a.) N.Y.Lackawanna,5% gtd.(quar.)__ Pittsburgh Bessemer & Lake Erie (s.-a.)_ Union Pacific, common Preferred (5.-a.) Per When Share. Payable. Mar. Apr. Oct. Apr. Oct. Apr. Apr. Apr. $2 Apr. $111 $1 $1 $114 $114 $111 750 Books Closed Days Inclusive. 1 Holders of rec. Feb. 15 2 Holders of rec. Mar. 20 1 Holders of rec. Sept.20 2 Holders of rec. Mar. 20 1 Holders of rec. Sept.20 2 Holders of rec. Mar. 5 1 Holders of rec. Mar. 15 2 Holders of rec. Mar. 1 2 Holders of rec. Mar. 1 Public Utilities. Baton Rouge Elea., pref. (quar.) $155 Mar. 1 Holders of rec. Feb. 15 Central Arkansas Public Service, 7% preferred (quar.) $151 M. 1 Holders of rec. Feb. 15 Chester Water Serv.$5M pref.(quar.) 5 $1% Feb. 15 Holders of rec. Clear Springs Wat.Serv. $6 pref.(qu.) $114 Feb. 15 Holders of rec. Feb. 5 Compania Hisp.-Am.de El.S. A.Chode, Am.dep. ree,for series E bearer 93e Feb. 3 Holders of rec. Dec. 19 Consol. Gas El. Lt.& Pow.Co.of Bait.. Common (guar.) 900 Apr. 2 Holders of rec. Mar. 15 Series A,5% preferred (quar.) $114 Apr. 2 Holders of rec. Mar.15 Series D 6% preferred (guar.) $114 Apr. 2 Holders of rec. Mar. 15 Series E 514% preferred (guar.) 3114 Apr. 2 Holders of rec. Mar. 15 Fairmount Park & Haddington Pass. Sty. Semi-annual $114 Feb. 5 Holders of rec. Jan. 25 Federal Light & Traction, pt.(guar.)._ _ /155 Mar. 1 Holders of rec. Feb. 15 Gulf States UM.,$6 pref.(quar.) $1% Mar. 15 Holders ot rec. Mar. 1 $514 preferred (quar.) $151 Mar. 15 Holders of rec. Mar. 1 Nebraska Power Co., 7% pref. (quar.) SIM Mar. 1 Holders of rec. Feb. 14 6% preferred (quar.) 81.51 Mar. 1 Holders of rec. Feb. 14 Nova Scotia Lt.& Pow. Co., pref.(qu.)- $151 Mar. 1 Holders of rec. Feb. 14 Ohio Power Co.6% pref:(guar.) $154 Mar. 1 Holders of roe. Feb. 6 Ohio Public Serv. Co.,7% pref.(mo.)--- 58 1-3e. Mar. 1 Holders of rec. Feb. 15 6% preferred (guar.) 500 Mar. 1 Holders of rec. Feb. 15 5% preferred (guar.) 41 2-3e. Mar. 1 Holders of rec. Feb. 15 Pennsylvania Gas & Elec. Corp., Class A 37510 Mar. 1 Holders of rec. Feb. 20 $7 & 7% preferred (guar.) $151 Apr. 2 Holders of roe. Mar.20 Pittsburgh Suburnan Water Service, $555 preferred (quar.) $1% Feb. 15 Holders of rec. Feb. 5 Public Elec. Light,6% pref.(quar.) $154 Mar. 1 Holders of rec. Feb. 21 Pub.Serv. Co.of Colo., 7% pref.(mo.) 58 1-3c. Mar. 1 Holders of rec. Feb. 15 6% preferred (mo.) 50c Mar. 1 Holders of rec. Feb. 15 5% preferred (mo.) 41 2-30. Mar. 1 Holders of rec. Feb. 15 Rhine-Westph. El.Pow. Corp. Am.ohs_ 870 Feb. 16 Holders of roe. Feb. 9 American Shares ORm2t4 Holders of roe. Feb. 9 Shenango Valley Water Co.,6% pt.(qu.) $114 Mar. 1 Holders of rec. Feb. 20 South Colorado Power,$6 1st pref.(qu.) $154 Apr. 2 Holders of rec. Mar. 15 Southern New England Telep. (quer.).Apr. 16 Holders of rec. Mar. 31 Toledo Edison Co., 7% pref. (monthly) 58 1-30 Mar. 1 Holders of tee. Feb. 15 6% preferred (monthly) 50e Mar. 1 Holders of rec. Feb. 15 5% preferred (monthly) 41 2-3e Mar. I Holders of rec. Feb. 15 United States Electric Lithg & Power, Shares, Inc., B 3c Feb. 15 Holders of rec. Jan. 31 Virginia Elec. & Power. Co., $6 pt.(qu.) $154 Mar.20 Holders of rec. Feb. 28 Washington Water Power, $6 prof. (qu.) $151 Mar. 15 Holders of roe. Feb. 23 Wheeling Electric Co.,6% pref. (guar.) $154 Mar. 1 Holders of rec. Feb. 6 Fire Insurance Companies. Republic Insurance, Texas (guar.) Quarterly Quarterly Miscellaneous. Allen Industries, Inc., $3 prof.(quar.) Aluminum Mfg. (quar.) Quarterly Quarterly Quarterly 2% preferred (quar.) 7% preferred (quar.) 7% preferred (quar.) 7% preferred (quar.) American Felt Co., pref. (quar.) American Investors Security (8.-a.) American Steel Foundries, pref American Woolen Co., Inc., pref. (qu.). Atlantic Relining Co.(Phila.), com.(qu) Atlas Corp.. $3 pref. A (quar.) Atlas Powder Co., coin.(quar.) Automotive Gear Works, pref.(guar.)._ Barber(W. H.)& Co., pref.(guar.)._ Preferred (quar.) Preferred (guar.) Preferred (quar.) Belding-Cortieelli, Ltd., Prof. (quar.)-Brown Shoe Co.. coin. (quer.) Cabot Manufacturing Co Canada Malting Co.(quar.) Case (J. I.), 7% pref.(quar.) Celanese Corp. of Amer., 7% 1st Pref-Central Tube Champion Coated Paper Co., com.(qu.) 1st preferred (quar.) Special preferred (quar.) Champion Fiber, 7% pref. (quar.) Chicago Corp., prof.(quar.) Colgate-Palmolive-Peet Co., pref. (qu.) Collateral 'I rust Shares, series A Collins & Allman Corp., pref. (quar.)__ Columbian Carbon Co. (quar.) Extra Combined Trust Shares Compressed Industrial Gases (quar.) _ Continental Casualty COSMOS Imperial Mills, 7% pref.(quar.) 7% preferred Crum & Forster, 7% pref.(quar.) Class A dr B (quar.) Extra, A & B 999 Financial Chronicle Volume 138 20c May 10 Holders of rec. Apr. 30 20e Aug. 10 Holders of rem. July 31 20c Nov. 10 Holders of roe. Oct. 31 75c 50c 50e 50c 50e $15.1 $151 $1.51 $151 $1 A 40o 50c $151 250 750 50c 4150 $IM $15‘ $134 $134 $134 75e $2 3714c $1 hS4 10e 50e $151 $I $134 25c $1% 10c 50e 25c 9.64e 35e 150 87540 h$3% 100 10o Mar. 1 Holders of rec. Feb. 20 Mar. 31 Holders of roe. Mar. 15 June 30 Holders of rec. June 15 Sept. 30 Holders of roe. Sept. 15 Dec. 31 Holders of rec. Dec. 15 Mar. 31 Holders of rec. Mar. 15 June 30 Holders of roe. June 15 Sept. 30 Holders of rec. Sept. 15 Dec. 30 Holders of rec. Dee. ,15 Feb. 1 Holders of rec. Jan. 26 Feb. 15 Holders of rec. Feb. 5 Mar.31 Holders of rec. Mar. 15 Apr. 15 Holders of rec. Mar. 15 Mar. 15 Holders of rec. Feb. 21 Mar. 1 Holders of rec. Feb. 20 Mar. 10 Holders of roe. Feb. 28 Mar. 1 Fielders 01 rec. Feb. 20 Apr. 1 Holders of rec. Mar. 20 July 1 Holders of rec. June 20 Oct. 1 Holders of rec. Sept.20 Jan 135 Holders of rec. Dec. 20 Mar. 15 Holders of rec. Feb. 28 Mar. 1 Holders of rec. Feb. 20 Feb. 15 Holders of rec. Feb. 1 Mar. 15 Holders of tee. Feb. 28 Apr. 1 Holders or rec. Mar.12 Mar. 2 Holders of rec. Feb. 16 Feb. 20 Holders of rec. Feb. 10 Feb. 15 Holders of rec. Feb. 10 Apr. 2 Holders of rec. Mar.20 Apr. 2 Holders of rec. Mar.20 Apr. 2 Holders of rec. Mar. 20 Mar. 1 Holders of rec. Feb. 15 Apr. 1 Holders of rec. Mar. 10 Feb. 28 Mar. 1 Holders of roe. Feb. 16 Mar. 1 Holders of rec. Feb. 16 Mar. 1 Holders of rec. Feb. 16 Feb. 15 Mar. 15 Holders of ree. Feb. 28 Mar. 1 Holders of rec. Feb. 15 Feb. 15 Holders of rec. Jan. 31 Feb. 15 Holders of rec. Jan. 31 Feb. 28 Holders of rec. Feb. 17 Feb. 28 Holders of rec. Feb. 17 Feb. 28 Holders of rec. Feb. 17 Name of Company. When Per Share. Payable. Books Closed Days Inclusive. Miscellaneous (Concluded). Cushman's Sons, Inc., corn. (quar.)___ 50e Mar. 1 Holders of rec. Feb. 16 $2 Mar. 1 Holders of rec. Feb. 16 $8 cumulative preferred (guar.) 7% cumulative preferred (quar.) $131 Mar. 1 Holders of rec. Feb. 16 Delaware Division Canal (5.-a.) $1 Feb. 15 Holders of rec. Feb. 3 Eastman Kodak Co., com. (quar.) 750 Apr. 2 Holders of rec. Mar. 5 Preferred (Muir.) $156 Apr. 2 Holders of rec. Mar. 5 5e, Feb. 15 Holders of rec. Feb. 1 Equity Fund 18e Jan. 24 Holders of tee. Jan. 17 Fairey Aviation Co., Ltd., Amer.shares First Chrold Corp $2.20 Feb. 19 Holders of rec. Feb. 13 3e Feb. IS Holders of rec. Feb. 5 First Common Stocks Franklin Simon & Co., Inc., pref.(qu.)- $154 Mar. 1 Holders of rec. Feb. 16 Gates Rubber,7% pref. (quar.) $151 Mar. 1 Holders of rec. Feb. 16 General Hosiery,7% pref.(guar.) $134 Feb. 1 Holders of rec. Jan. 20 General Motors Corp., com.(quar.)-25e Mar. 12 Holders of rec. Feb. 15 May 1 Holders of rec. Apr. 9 $5 preferred (guar.) General Shoe, A,initial (quar.) 10c Apr. 15 Holders of rec. Apr. 15 Goldblatt Bros f100% Feb. 20 Holders of rec. Feb. 10 Gosnold Mills, 6% preferred h$151 Feb. 1 5Holders of rec. Feb. 7 Hardesty (R.) Mfg., 7% pref. (quar.).... $151 Mar. 1 Holders of rec. Feb. 15 $131 June 1 Holders of rec. May 15 7% Preferred (guar.) 7% preferred (quar.) $151 Sept. 1 Holders of rec. Aug. 15 7% preferred (quar.) $134 Dee. 1 Holders of rec. Nov. 15 Hires (Chas. E.) Co., class A cam.(qu.) 50e Mar. 1 Holders of rec. Feb. 15 $1 Feb. 23 Holders of rec. Feb. 15 Holland Land Co.(liquidating) 1% Feb. 26 Holders of rec. Feb. 9 Hollinger Consol. Gold Mines (monthly) I% Feb. 26 Holders of rec. Feb. 9 Extra Homestake Mining Co.(monthly) $1 Feb. 26 Holders of rec. Feb. 20 Extra $1 Feb. 26 Holders of rec. Feb. 20 25e Feb. 10 Holders of rec. Jan. 31 Honolulu Plant Co.(monthly) Imperial Oil, Ltd.(quar.) r12%e Mar. 1 Holders of rec. Feb. 9 $17 Feb. 15 Holders of rec. Feb. 14 International Investing (liquidating).— 100 Mar. 31 Holders of rec. Mar. 1 International Nickel 60e Mar. 1 Holders of rec. Feb. 15 International Safety Razor, el. A (qu.) $151 Mar. 1 Holders of rec. Feb. 25 Jantzen Knitting Mills,7% pf.(qu.)_ h 7% preferred Mar. 1 Holders of rec. Feb. 25 Feb. 15 Holders of rec. Feb. 5 Kelvinator Co. of Can., Ltd., pt.(qu.) 3.9Ic Feb. 15 Holders of rec. Jan. 31 Keystone Custodian Fund, ser. E-2 37540 Feb. 20 Holders of rec. Jan. 31 Knudsen Creamery, Cl. A & B (quar.)25e Mar. 1 Holders of rec. Feb. 20 Kroger Grocery & Baking Co.(quar.) 50c Mar. 1 Holders of rec. Feb. 20 Extra $151 Mar. 15 Holders of rec. Mar. 5 Landis Machine. prof. (quar.) $1 June 15 Holders of rec. June 5 Preferred (guar.) $151 Sept. 15 Holders of rec. Sept. 5 Preferred (guar.) $151 Dec. 15 Holders of rec. Dec. 5 Preferred (Ouar.) 75c Mar. 1 Holders of rec. Feb. 15 Laura Secord Candy Shops, corn.(qu.)30c Mar. 15 Holders of rec. Feb. 28 Libbey-Owens-Ford Glass Co.,com.(qu.) 30c May 1 Holders of rec. Apr. 26 Lincoln Nat. Life Ins.(Ft. Wayne)(qu.) 30e Aug. I Holders of rec. July 26 Quarterly 300 Nov. 1 Holders of rec. Oct. 26 Quarterly 25e Mar. 3 Holders of rec. Feb. 23 Lincoln Stores, Inc., corn. (guar.) $151 Mar. 3 Holders of rec. Feb. 23 Preferred (quar.) 4.110 Feb. 15 Low Priced Shares Ludlow Mfg. Assoc. (quar.) $136 Mar. 1 Holders of rec. Feb. 10 Sc Feb. 15 Holders of roe. Feb. 1 Managed Investors, Inc. (9.-a.) Sc Feb. 15 Holders of rec. Feb. 1 Extra May Hosiery Mills,1nc.$4 cum.pf.(qu.)$1 Mar. I Holders of rec. Feb. 16 15e Mar. 15 Holders of rec. Feb. 15 McColl-Frontenac Oil Co.,Ltd.com.(qu.) 250 Mar. 1 Holders of rec. Feb. 20 Metal Textile Corp. (quar.) 81510 Mar. 1 Holders of rec. Feb. 20 Participating preferred (glue.) 25e Mar. 1 Holders of rec. Feb. 20 Extra $1 Mar. 1 Holders of rec. Feb. 20 Midland Steel Prods. Corp.,8% pf 8114 Mar. 1 Holders of rec. Feb. 15 Milner Insurance 143 Feb. 20 Holders of rec. Feb. 10 Monarch Knitting, 7% met Morris 5& 10e. Stores,7% pf.(quar.).... $14 Apr, 2 Holders of rec. Mar.20 July 1 Holders of rec. June 20 7% preferred (guar.) Oct. 1 Holders of rec. Sept.20 7% preferred (quer.) 25e Mar. 15 Holders of rec. Feb. 28 National Bond & Share Corp. (quar.).. 50c Mar, 1 Holders or rec. Feb. 15 National Container, pref.(guar.) 50e June I Holders of rec. May 15 Preferred (quar.) 50e Sept. 1 Holders of rec. Aug. 15 (quar.) Preferred 50c Dec. 1 Holders of rec. Nov. 15 Preferred (guar.) Sc Feb. 15 Holders of rec. Jan. 31 National Industrial Loan (quar.) $314 Mar. I Holders of rec. Feb. 20 National Linen Service, $7 pref. (8.-10 $15( Feb. 15 Holders of rec. Feb. 10 Newmarket Mfg. Co. (quar.) 60c Feb. 19 Holders of rec. Dec. 31 Northwest Drug 150 Feb. 16 Holders of rec. Feb. 10 Oahu It. Jr Land (monthly) be Feb. 15 Holders of rec. Feb. 5 Olinda 011 12%c Mar. 1 Holders of rec. Feb. 15 Patterson-Sargen.,Co.,corn.(quar.)- 87560 Mar. 1 Holders of rec. Feb. 20 Ponder (D.) Grocery, A (guar.) Phoenix Hosiery Co.,7% 1st. pref.(WO 8758c Mar. 1 Holders of rec. Feb. 20 8134 Apr. 2 Holders of rec. Mar. 15 Ponce Electric, 7% pref. (quar.) $134 Apr. 2 Holders of rec. Mar.20 Powdrell & Alexander. Inc., pref.(qu.) Prentiss-Hall. Inc., common (quar.) - .35e Mar. 1 Holders of rec. Feb. 19 750 Mar. 1 Holders of rec. Feb. 19 $3 preferred (guar.) 250 Mar. 1 Holders of rec. Feb. 16 Purity Bakeries Corp.(quar.) Rolland Paper Co., Ltd.. prof. (quar.)_. $1% Mar, 1 Holders of rec. Feb. 15 200 Feb. 28 Holders of rec. Feb. 26 SecondTwin Bell 011 Syndicate (mo.)_ _ 150 Jan. 15
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