Full text of Commercial and Financial Chronicle : February 10, 1949, Vol. 169, No. 4776

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I. ADM

IBRARY

ESTABLISHED 1S39

New

Number 4776

169

Volume

Need Constitutional

Check
out

Tax Power

on

Stagg

Joseph

Lawrence

points

portion of population

of

government

Asserting inflation, always and everywhere,

pay¬

of money

professional
and
businessmen's group at the
University of Cincinnati on Feb. 4,
a

Vice-President

and

tures to

Empire Trust Company, New York
City, called for radical changes in
today's concept of taxation, includ¬

ing
t

consti-

a

t i

u

n

o

1

a

endment

a m

sotckholders and public.
not business

The

has

that

title

a

few

ago,

years

business

as

men

a

United

States

the

has

with

Jos. Stagg Lawrence

reduction.

With
Government

Federal

de¬

and

tax

middle and upper
the

increase

an

for

income groups,

"very high continuous level of
(Continued

on page

38)

Insert

for

Minneapolis

Chicago,

and

St. Louis.

prices
the goods
each

of

These

inflation, usu¬
Henry Hazlitt

ally rise fast¬
than

er

particularly

than

faster

costs,
wages.

Profit margins grow wider, or at
Least

to

seem

grow

wider. Orders

Firms begin to work at

As this

capacity.

costs

overhead

happens,
rela¬

seem

tively to go lower.
With plants
working at full capacity, and with
the

backlog

and

of

unfilled

of

fears

begin

shortages

(Continued

orders

shortages

mounting,

constantly

nation stems from the minds and
Truly enough, material things are necessary to

The great basic strength of any
hearts of its

people.

implement the purposes of man, but the purposes
the power
..

.

.

EDITORIAL

would
the

As :We

on page

Sixth

address by Mr.
National

See It

fffl

to

28)

Hazlitt at

Conference

of

President and his New Deal advisers ever

If the

assurance

they

felt

gave

during the past two' or three months will presently blossom
forth into "another.1920'* or prove more like several other
strictly limited recessions which have touched us since the
end of hostilities. We do venture to assert that if a real
proportions is in the cards, it is becoming daily
there is no program in Washington which is
likely to do very much toward changing the course of events
materially or for very leng-nexcept to aggravate it.

clearer that

A

number

of

the

the

minds

and

hearts of vario

u

T

or

and at bottom

of

the campaigns

Administration

of per¬
living

sons

along

the

eastern

fringes

of

this

coun¬

try, and some¬

thing momen¬
tous

were

1

1,

February

Prices

to

nation

new

spirit it was! Dedicated

unselfish principles, dis¬

tilled from devotion to an

inspir-

(Continued on page-26)

at

the Third National Industry Army

Day Dinner, Boston, Mass., Feb.

4,

1949.

conducted by the Roosevelt

prior to 1941, and conducted in vain, for
(Continued

Business Public Relations Execu¬

on page

24)

State and

tives, New York City, Feb. 3, 1949.

Municipal

Franklin Custodian

Bonds

% %

a

high

MassachusettsDue

mighty

sown.

What
to

Benjamin F. FairleM

happened.

The seeds of a

*An address by Mr. Fairless

observing in private

not they are apparent to officialdom,
they are the old, familiar type of change,
and word which comes out of Washington is quite rem¬

life, whether

small

s

groups

elements of this situation have

time been evident to the

some

ani¬

mated

recession of

for

1776

deep and

a

spirit

the impression of feeling last au¬
tumn they must by this time be developing considerable
doubt. We do not undertake to say whether the hesitation,
or whatever one is of a mind to call it, that has developed

the

in

be

year

compel ling

Simple, After All

So

Not

themselves generate

which moves to accomplishment. One hundred and seventy<3>three years
ago — that
.

,

%

f

.

.

iniscent
*An

City of Lynn,

supplies. Pledges steel industry to full effort to meet needs
and peace, and calls for continued collaboration

of country in war

is "Inflation:

today

as

prices, in the
early stages of

unit

Pictorial

all

of

sell.

full

See

talk

and points to need of additional ore, scrap, coke and transpor¬

see

the m has to

increase.

pictures taken during the
NSTA Tri-City Parties in

my

infla¬

that

manding restoration of the excess

profits

to

war,

tation

with armed forces.

fight inflation.

inflation

for

the

now"

early stag¬
of

higher

by

b stantial

Concludes only government and

Says steel industry has been greatly expanded since

of scarcity.

on

es

first

fol¬

s.u

favor

the

an

out,

tax

look

to

tion. They

imme¬

diately

and

industry does not follow philosophy

executive maintains American

—

Dr.

been

lowed

cause,

Stressing importance of freedom with opportunity as leading to ait
industrial mechanism that serves nation's requirements, U. S. Steel

al-<r

been in¬

clined

Lawrence

pointed

can

given

have

ways

except

last,

been

men

Every major

involving

inflation

If such a title had been given to a talk
it would probably have been regarded by most
deliberate attempt at paradox. For most busines;

tax tide.

the

as

totalitarian

and

Enemy of Free Enterprise."

limiting
the
rising income

war

regimented

or

public relations executives to present clearer accounting pic¬

urges

the

of

fixing

price

in

nor

Refutes theory of excessive profits

economy.

Joseph Stagg Lawrence, econ¬

omist

over-issuance

means

and credit, Mr. Hazlitt holds its remedy is not in more

production

Dr.

Copy

President, United States Steel Corporation

Contributing Editor of "Newsweek"

ments.

Speaking before

a

FAIRLESS*

By BENJAMIN F.

By HENRY HAZLITT*

carry¬

and needs protection from

receivers

Cents

Free Enterprise-Source
Inflation: Enemy
Of Our Greatness
Of Free Enterprise

ing tax burden has lost political
power

Price 30

York, N. Y., Thursday, February 10, 1949

1952-69

Funds,

yield

Bonds

.nc.

A Mutual Fund

.95% to 1.80%

COMMON STOCK FUND

(Wncrt, as-and if issued l

PREFERRED STOCK FUND

Bond Department

BOND FUND

White,Weld&Co.
Members New York Stock

Exchange

UTILITIES FUND

.

THE NATIONAL CITY BANK

INCOME (BALANCED) FUND

Philadelphia Providence
Amsterdam
Buenos Aires

FRANKLIN DISTRIBUTORS, Inc.
64 Wall Street, New

Bond Dept.

EUROPEAN

of INDIA, LIMITED
to

Government

the

Office:

and

in

India,
and

Subscribed

Paid-Up
Reserve

Ceylon,

Burma,

Colony, Kericho.

(External

&

Capital

Fund-—
conducts

£4,000,000

-£2,500,000

description
banking and exchange business

Bank

OTIS & CO.

-£2,000,000

every

Trusteeships and Executorships
also undertaken




OF

Toronto

THE

Established

UTILITIES

Prospectus and analysis
Available

CLEVELAND
New York
Cincinnati

Dommioh

Denver
Columbus Toledo Buffalo

■

York Stock Exchange

40
120 Broadway, New York

Chicago

>

Telephone RECtor 2-7340

Securities

Grporatiojt

Est. 1896
Members New

COMMON

Invited

sutr0 bros. & co.

1899

(Incorporated)

of

CITY OF NEW YORK

MISSOURI

Internal)

Corporate Securities

Zanzibar

Capital-.:

Inquiries

Kenya

Kenya, and Aden

Montreal

bonds & st

FOREIGN SECURITIES

Distributors of Municipal
and

Branches

NATIONAL BANK

1-395

and other

Underwriters

Bishopsgate,
London, E. C.
26,

CHASE

Connect

Wires

CANADIAN

in

Kenya Colony and Uganda
Head

New York

THE

HAnover 2-0980

York 5

NATIONAL BANK
Bankers

Teletype: NY 1-708

.

Teletype NY

Private

Chicago

London

The

Bell

Wall Street, New York 5

Boiton

,

52 WILLIAM ST., N. Y. 5

OF NEW YORK

Prospectus on request

40

HART SMITH & CO.

*

-

,

-

!
f.

111

Exchange Place, New York 5, N.Y.

WOrth

System Teletype NY 1-702-3

New

York Stock

and other Principal

.

5
Bell

request

IRA HAUPT & CO.
Members

,
j

upon

\ i\-

I

j

Broadway, N. Y. 6

4-6000

Boston

Exchange
Exchangee

Teletype NY 1*2708

Telephone: Enterprise 1S20

2

(654)

THE COMMERCIAL

Trusts

American Light
& Traction W. D.

/.

Railways, Rights

BOUGHT

SOLD

—

Market

New York Hanseatic

Corporation
BArclay 7-5660

Teletype NY 1-583

rails

ored

ferrous

and

120

Stock

Curb

met¬

REctor

tobaccos.

the

The

Exchange
Exchange

2-7815

Standard Gas & Elec. Com.

Central States Elec. Com.
United States Television

Copper Canyon Mining
Deep Mines

Kinney Coastal Oil
OIL

STOCKS

chips

Other

blue

also

in

in

Members Nat'i Ass'n of Securities Dealers, Inc.
William

St., N. Y. C. 5, N. Y.

Montgomery St., Jersey City 2, N. J.

Tel. DIgby 4-2190

Tele.: NY 1-1055

well

Stock

Bought and Sold

and

Sears.

policy of caution
being maintained by the trust
managers as they build up very
ample cash reserves. Since a ma¬
jority of the balanced open-end
funds were already in a conserva¬
tive position at the early part of
the quarter under
review, they

enabled

were

selves

side

to

slightly

of

the

the

on

market

them¬

purchase

during

weakness.

to the table

ence

extend

between

the

Refer¬

showing the bal¬

cash

indicates

invest¬

and

that

after

even

making these purchases eleven of
the balanced trust group held less
than 65%-of their net assets in
stocks

common

The

two

and

largest
and

equivalents.
balanced funds,
and

Wellington,

53.4%

respective¬

'%

^

'

But. the

majority of the com¬
mon
stock open-end funds were
not so
comfortably protected at
the beginning of the last quarter
on

balance, building up their cash
reserves.
Considering the extra

Bought and Sold

distributions

that

several

man¬

agements paid out to stockholders

™I BANKERS BOND ^
LOUISVILLE

KENTUCKY

2,

Long Distance 238-9

in
December,
it
is
certainly
worthy of note that the 27 stock

funds increased their net cash

Incorporated

Floor, Kentucky Home Life Bldg.
Bell Tele. LS 186

iiiiiiiiiiiiiiiimiiiiimimiiiiiiiiimir
Trading Markets

portfolios
under
Loomis-Sayles
management, because this firm of
cellent

1937.

Moore-Handley Hdwe. Co.

job

of

did

an

protecting

both

in

their
and

1929

government bonds to assets of the
creased

Fund

during

in-,

the

year:

—★—

Dec.

Scott, Horner &
Mason, Inc.
Tele. LY 83

LD

33

JIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIL

31,

1947

31,

1948_

—

Several of the closed-end

have

unusually

equivalents./ At the
year

National

of

of

has

to

his

of

the

Shares

Corpora¬
tion was 25 x/z % liquid, the Leh¬
man
Corporation
211/2%,
and
International and Gen¬

eral American Investors each held

understandable,

terest

was

metals

sanguine elements noted
previously in this review for the
third-quarter. The first unfavor¬
been

new

"a

in

.

for

.

non-

in

real

in¬

in coppers

and

the

non-ferrous

when

stocks

was

of

the

"at

is

the

market

for

commitments
trusts

made

by

Homestake

and

were

in

boom which set in
during the
winter of 1945-1946 has now run
three years, about as

long

have

as

most

trusts

and

European

relief."

Jonathan

B.
Lovelace, Presi¬
Investment Company
America, in his report to

dent
of

of

the

stockholders dated two weeks
ago,
makes some
interesting observa¬
tions which supplement the Axe

report.

"While

being

tional

totals

(for

in

the

in

1948) a number of industries had
problems of weakening demands

during most of the

As

year.

we

the

new

year,

automobiles

are

about

the

only

important indus¬
tries in which
shortages exist; and
it appears
likely that these indus¬
tries will pass from

a

seller's to

buyer's market during the

a

cur¬

rent year.
the decline in gen¬
eral
business
volume
in
1949
should be of moderate
.

.

.

propor¬

tions,

unless

deflationary

a

tax

commitments

added

were

block

of

9,200

others

of

un¬

America

six

and

others

and

the

the

six

which

commitments
of

to

portfolios,

was

a

no

sales.

one

Two

Members
New

York .Stock
York

New

York

Chicago

We

*

Exchange

Cotton

Commodity

Board

of

New Orleans Cotton
And other

/

Maintain

CANADIAN

Exchange

Exchange,

American

Markets

For:

Wire System between

New

York

and

Los

INDUSTRIALS

also

made in shares

were

American

Metal

Co.

and

in Climax Molybdenum.
Phelps Dodge exceeded
purchases,
s i x
managements
lightening commitments while
only four added to portfolio holdings.
same

Sales

American La France
Bausch and Lomb

Dayton Malleable Iron
Haskellte

Manufacturing

Hydraulic Press Manufacturing
Stromberg-Carlson Co.
f

H. M.

*—

—

Byllesby & Company

PHILADELPHIA

OFFICE

Stock Exchange Bldg., Phila. 2
Telephone
Teletype
RIttenhouse 6-3717

PH 73

NORTHWEST MINING
SECURITIES
For

Immediate Execution of Orders

Quotes call TWX Sp-43

on

Floor

of

Exchange from 10:45 to 11:30
A.M., Pac. Std. Time: Sp-82 at

other hours.

STANDARD SECURITIES
CORPORATION
Members Standard Stock

of

of

Brokers

Peyton

Exchange

Spokane

Dealers

-

-

Underwriters

Building, Spokane
Branches

at

Kellogg, Idaho and Yakima, Wn.

.

Fresh

Commitments in Steel

Buying of the steel stocks
was highlighted
by four trusts in
the Seligman
group which made
entirely new commitments in an
industry in which they had pre¬
viously had no interest. Tri-Con«

BUY
U.

S.

SAVINGS

BONDS

tinental invested three-quarters of
million dollars, Selected Indus¬

a

tries

one-half

Street

million,

one-quarter

Broad

million

and

Capital Administration $100,000 in
one or several of the
major com¬
panies.
Tri- and Selected made
commitments in U. S.
Steel, Beth¬

lehem,

National

(Continued

99

CANADIAN MINING

and
on

page

Royal Bank of Scotland
Incorporated by Royal Charter 1727

Republic.
34)

WALL

STREET

NEW YORK 5, N. Y.

CANADIAN

Trade

OILS

HEAD

OFFICE-—Edinburgh

LONDON
3

8 West
49

OFFICES:

Bishopsgate, E. C. 2 /
Smithfield, E. C. 1

Charing Cross, S. IV. I

Burlington Gardens, W. 1

Exchange

64 New Bond Street,

BRITISH SECURITIES

W. 1

SUGAR
TOTAL ASSETS

N. Y.

Cotton

NEW

Exchange Bldg.

YORK

4,

N. Y.

Raw—Refined—Liquid

CHICAGO

DETROIT

GENEVA,

PITTSBURGH

115 BROADWAY

SWITZERLAND




£153,656,759

Goodbody & Co.
Members N. Y. Stock

Telephone BArclay 7-0100

Exports—Im ports—Futures

Exchange and Other Principal Exchanges

Associated

NEW YORK 6, N. Y.
Teletype NY

1-672

Angelet

new

LAMB0RN & CO., Inc.

Inc.

Exchanges

Broadway

New York 5

Branches throughout Scotland

Exchange

Curb

120

BArclay 7-783=!

pur¬

H. Hentz & Co.
New

Private

Philadelphia,

or

hold¬

new

Newmont Mining was
liked; there were three

chases

na¬

business

four

Aluminum

of

adding
to blocks already
held.
Thirty-nine thousand five hun¬
dred shares of International Nickel

high records

new

recorded

St.

Philadelphia 2
PEnnypacker 5-5976

outstanding in popular¬
two
managements
making

ity,

ing.

armament

York Stock
Exchange
Principal Exchanges

Other

also

new

well

plentiful credit potential and the
"high level of expenditures for

total

a

although

loaded.
was

favorable items

a

purchased

shares,

major business recoveries in
the past." As an offset to the
un¬
Mrs. Axe notes

and

////%':/

Dome Mines..;

high

ness

Members New
:

1420 Walnut

are

hedges against an eco¬
readjustment." Four other

several

....

the postwar busi¬

Request

oil

suitable

In addition to these four unfavor¬
able points, account must be taken
of the fact that

on

BUCKLEY BROTHERS

high level in the

a

Kennecott Copper was
acquired
materials, b,y more managements than any
other
security in this group. Nine
persistently

inventories

offices

NOTES
Memo

its

nomic

.

factor

value

branch

our

Wisconsin

port that "gold mining stocks

strong-since the fall of 1946, have
recently reacted.
The fourth
unfavorable

to

CORAL GABLES

port¬

that durable goods raw

dollar

wires

;.v TAX PARTICIPATION

holdings of the solid com¬
modity. It notes in the annual re¬

the failure of the

.

Mobile, Ala.
Direct

first-half of the year" and added

favorable

.

NY 1-1557

La.-Blrmingliamy Ali.

detailed

but

company,

gold"

to

building.
The second un¬
development has been
hope of tax re¬
duction. This is likely to curtail
manufacturing plant expansions,
reinforcing the decline in general
building activity. The third un¬
favorable development is the fact
.

Exchange

Investment, however, sold "liquid

rather

orders

snown

One

group.

more

has

HAnovar 2-0700

com¬

one's

conditions

other

decline

Stock

watch

might

be

developing during the
in the business picture
emphasized as contrasted with

substantial

the

ferrous metals. A modest commit¬
ment in gold mining stocks

year

enter

per¬

protecting

under

able factors

cause

the current

price/level is

last

able

York

St.f New York 4, N. Y.

New Orleans.

very

preference (at this time) for

Ruth

Axe's
comments
to
stockholders in mid-January are
interesting because four unfavor¬

the

present

above, it is a little difficult for the
writer to appreciate
managements'

Houghton

are

Members New

25 Broad

competitive,

points are sub¬
than in prewar

executives

in

folio

annual

stockholders.

more

distrust of

word

as

among manufactured products and
steel in the basic materials

funds

trust

If

neatly

so

Steiner, Rouse & Co

.

.

modity

caution

recent

However,

convincing arguments for follow¬
ing a cautious investment policy.

the

22.5%

large
end

in

was

." Of course, the auto
backlog may vanish very
quickly and manufacturers do not
rely too heavily upon it today.
But, even so, these two statements

out¬

27.5%

centages of net assets in cash and

American

1856

16.0%

Sep. 30, 1948—
Dec.

also

Lynchburg, Va.

Bought—Sold—Quoted

order

unem¬

some

"continued

manager

it

report

were

Mutual

follows

as

trust

one

phrased

ex¬

The percentage of cash and

Loomis-Sayles

Dan River Mills

Established

counselors

shareholders

American Furniture Co.

re¬

during the period by 50%.
Among this group of investment
companies, • particular
interest
centers
on
major shifts in the
serves

investment

are

whose prices had been

and many sold portfolio securities

Standard Oil Ky.

Louisiana Securities

:

sharp

break-even

years.

obvious

increased

'

be

stantially higher

po-

when

slump
commodity prices and
of

could

since

Caution

the

for

reasons

continuous

ly thus invested.

1st

buying

enacted.

becomes

ness

assets.

during the period of transition"

Ward

gomery
A

Henry A. Long

as

Investors Mutual

Ashland Oil & Refining Co.

Alabama &

declines in
profits in many industries as busi¬

clarified.

For

ployment, what

Mont-

as

had 61.8%

Common

there

held $153

stocks

is

program

trusts

economic

more

than

certain

indications

conspicuous

ments

STEIN & COMPANY
27

and

Reasons

in¬

were

ance

1

60

net

mean

common

business

Elec¬

post-election
AND

of total

look becomes

can

demand

TRADING MARKETS IN

MINING

The

survey

It represents no

is

Goldfield

14%

teritial for

General

BROADWAY, NEW YORK 5
Tel.

this

gov¬

companies and

Members

York

iaverage,

als, steels and

tric

York

in

in

million in liquid reserves on Dec.
31 of last year. This equals on an

fav¬

dividual

New

cash.

ernments and

non-

,

of their net assets

covered

pur¬

two large

New

20.7%

sements,

the

selling

<$>_ '

pro-

chasers

McDonnell &fo.

%/'•%'

company managers during the final • quarter of 1948
the September psriod. Although sales were 60% greater than
previous quarter, they were equalled by buying transactions. The

nounced in

while

—★—

c

...

up considerably over
those in the

a m u

SCRIP

By HENRY ANSBACHER LONG

activity of investment

picked

very

120 Broadway, New York 5

Thursday, February 10, 1949

t

QUOTED

—

CHRONICLE

Providing Large Market Cushion

,/%

/

FINANCIAL

Sixty leading funds at year-end held $153 million cash. Over-all sales balanced
purchases during last
quarter, enabling open-end stock funds to increase their cash reserves
by 50%.
Non-ferrous metals,
steels and tobaccos
generally favored, as rails lost short-lived popularity and Were sold with amusement shares. Despite some liquidation, oils are still liberally held.

United Light
&

/v„,

&

Glyn
DIgby 4-2727

Williams

Mills

Banks:

&

Co.

Deacon's Bank, Ltd.

Volume

169

Number 4776

THE

COMMERCIAL

How

INDEX
Articles and News
Free

Enemy of Free Enterprise—Henry Hazlitt..

NASD activities

....Cover

Trusts

Providing Larg6 Market Cushion—Henry A.• Long/.* .■/,h;;•>
Facts of Life in Present Capital Market—Edward B. Hall
Why Should the Average Person Own Stocks?
the "New Market" for securities)

Return

to

Increased

Gold

4

on

of

f

Employment and

to

4
5

registration of salesmen.

Warnings

of

—Wilbert Ward

Metal

7

large and small business. Complaints of poor business
legion so that even in sedate and conservative circles, a
version to door bell
ringing is being advocated.

8

Productivity—Roger W. Babson

9

Government's Obligations to Business—Hon. Charles
Sawyer

For

10

Disrupting Our Foreign and Domestic Trade?—A. M. Strong.

13

Basic Aims of Republican Party—17on. Thomas E.
Dewey

14

Congress and Problems of Small Business—Hon. James E.Murray....

15

What About Railroad Profits?—William J.
Faricy

17

Sugar Scene Changing—Ody IJ. Lam born
Constitutional

Check

on

Tax

Let

Bond

us

Stagg

(Editorial)

Imports

National

some

17

March 7..

on

same

or

as

are

Note

the

approved by the SEC.

21

in

the

miss

we

field

22

Opposes Changing Gold Price

WALL

STREET,

ACTIVE

Kentucky Utilities
Lithium Corp.

Securities

Petroleum Ht. & Pr.

Southern Production

may

39

Broadway, N. Y; 6

.

22

Against Creating "Welfare State"

24

Sell Gold at Premium

42

.

.

or

X

character

of

the

words

"may

TRACTION, Common

the

mark, another will

RAILWAYS, Rights, W. I.

authorized

be

never

UNITED LIGHT &

Net Markets

an evidence of
good faith, a gesture
public interest and in the interest of the securities

for the

NASD

have

to

viewed the

permissive nature

Young & Gersten
40

Exchange Place, New York 5
Telephone WHitehall 4-2250

45

"(a) No member shall deal with
any nonmember broker
dealer except at the same
prices, for the same commis¬
sions or fees, and on the same terms and conditions as are

Regular Features
.Cover

Bank and Insurance Stocks.............. i.

14

Business

30

Man's

Bookshelf

by such member accorded to the general public.
"(b) Without
no

Canadian

Securities

18

Coming Events in the Investment Field.
Dealer-Broker—Investment

Einzig—"Attacks

Years

From

Washington Ahead of the News—Carlisle Bargeron—

6

Mutual Funds

20

NSTA Notes

15

Prominent Personalities in Mutual Fund Business—Walter L. Morgan

20

News About Banks and Bankers...

10

••••

Our

Reporter

allowed

selling concession, discount or otjher allowance
by such member to a member of a registered se¬

curities

association

"(2)

join

and

public of

5

not

to

a

member

of

the

or

any

any

group

nonmember

broker

dealer

or

issue of securities

or

buy

any

any

part thereof;

security from

nonmember

Public

22

Railroad Securities

17

Securities Salesman's Corner...

23

buy

Securities Now in Registration....

.

..

The State of Trade and Industry.

36

Washington and You

44

or

dealer

sell such security,
who is

a

Twice

1

Weekly

Drapers'

and,

COMMERCIAL

The

.

FINANCIAL

and

c/o

Gardens,

Edwards

Copyright

WILLIAM

DANA

B.

Park

25

••'•••

Patent Office

S.

Place, New York 8, N.

REctor

2-9570

to

Y.

9576

HERBERT D. SEIBERT, Editor & Publisher
WILLIAM

WILLIAM

DANA
D.

President

SEIBERT,

RIGGS,

Business Manager

25, 1942,
York,
N.
Y.,

8,

banking

state

corporation

and

Other

Chicago

city

news,

Offices:

3,

111.

news,

(Telephone:

We
office

post
the

Act

at

of

March

\

■

Union

in

Canada,

Other

$25.00

and

Monthly
$25.00

$35.00

Countries, $42.00

per

per

Note—On

are

year.

per

year:

per

$38.00

per

Salle

State




St.,
0613);

made

in

New

INVESTMENT
509

SECURITIES

olive;

street

St.LouisI.Mo*

page

Members St. Louis Stock

Exchange

neees-

36)

of

the

York

Central Arizona

Light & Power Co.
COMMON

PREFERRED STOCKS

postage
—

extra.)

Monthly,

postage

extra.)

fluctuations

funds.

•

Analysis & Prospectus available
upon

Spencer Trask & Co.
Members

New

York Stock

Exchange

25 Broad Street, New York 4
Tel.: HAnover 2-4300

Members New

-

Boston

-

Glens Falls

Curb Exchange

St., Chicago 3

Tel.: Financial 6-2330

*

Teletype—NY
Albany

York

135 S. La Salle

in

rate of exchange, remittances for for¬
eign subscriptions and advertisements must

be

to

year.

Record

(Foreign

account

because they found it

on

High Grade Public Utility and Industrial

the

La

up

year,

Record—Monthly,

(Foreign

Earnings

or

interested in offerings of

S.

Publications

Quotation

year.

be, from

New

Pan-American
of

may

Stix & Co.

Dana

Dominion

bank clearings,

S.

the

'

Other

etc.).

135

B.

of

Bank

Every Thursday (general news and ad¬
vertising issue) and every Monday (com-,
plete statistical issue — market quotation

by William

under

1879.

case

price at

securities business."

or

(Continued

Eng-

second-class matter Febru¬

at

the

as

same

The effect has been

Subscription Rates
Subscriptions. in United States, U.
Possessions, Territories and Members

Thursday, February 10, 1949

records,

as

ary

COMPANY, Publishers

C.,

Tele. NY 1-1404

a

Company
Reentered

U.

Reg.

E.

Exchange Place, New York 5

Smith.

&

1949

CHRONICLE

London,

40

member of the general public not engaged

NASD, nevertheless joined
Published

except at the

that nonmembers are
deprived to
large extent of underwritings, participations and
selling
concessions.
Many, opposed to the very existence of the

5

Tomorrow's Markets (Walter Whyte Says)

broker

in the investment

40

—

or

person

George Birkins Company

or

which at the time of such transaction such member would

Utility Securities

description.

any

26

Governments...

our

in

42

on

jnr

contemplating the distribution to

Prospective Security Offerings

a

*

allowed

"(3) sell any security to or

42

Send

WHitehall 4-8957

with

syndicate

any

50% on the
yield about 10%

to

any

general public;

the

Observations—A. W ilfred May

Reporter's Report

dealer

37

.

1st Mortgage Bonds

dollar

8

11

%

Available around

"(1) in any transaction with any nonmember broker
dealer, allow or grant to such nonmember broker or

or

Recommendations.

Indications of Business Activity

Our

member shall

Interest

victor fuel co.
5

limiting the generality of the foregoing,

of

Payments

1

42

British Austerity"...

on

DIgby 4-2370

*

Teletype NY 1-1942

Instead, it chose to regard the statute as mandatory and
through the medium of Its Rules of Fair Practice, Section 25,
to supply the following elaborate
implementation:

22

Increase Commissions Effective Feb. 14..

(Editorial);

YORK

MARKETS

or

As We See It

NEW

Telephone: WHitehall 4-6551

of this provision and to have let it alone.

22

Exchange Announces Changes in By-Laws

to

99

bulging, and
was
able to

It would have been

Urges Action for Less Government Spending

C. W. de Kiewiet Warns

of

Now, then, the NASD is the only registered securities
organized pursuant to the Maloney Act, and un¬

or

World Fund Permits South Africa

day on
sleep peacefully.

provide."

19

.;

Northern Trust Co. of Chicago Analyzes Effects of
Declining Treasury
Cash Surplus
.

to

that

he dumped
office, walked away

billfold

AMERICAN LIGHT &

less

Exchange

from

Finally

our

re¬

except at the same prices,
fees, and on the same terms
by such member accorded to the

permissive

19

New York Stock

his

SIEGEL & CO.

dealer

For

New York Curb

at

with

of these.

commissions

Wealth Still Backbone of Our Country, Says Ford R. Weber

New York Board of Trade

them

member thereof shall deal with any non-

no

association

Edward J. Proffitt

Association

registered securities association

a

18

>'•••

Example (Boxed)

are

general public/'

Slackening Demand for

Rent Controls

of

and conditions

Philadelphia-Baltimore Exchanges

to

for the

15
16

New Homes

on

member broker

Co., Cites Leading Role Played

Merge Operations

the

center

provide that

13

Bankers Trust Co. Holds Further Credit Restraints Not Needed
to

and

The rules

3

by Local Financing in Louisville's Industrial Growth.......

Morton Bodfish and Ilomer Hoyt Attribute

worrying about his obsolete

.

The Maloney Act, the natal bed of the NASD, says:

Cover

Charles C. King, of Bankers

.

"Sec. 15A. (i) (1)

Power, Says Joseph

Lawrence

Alf M. London Warns Truman of Excessive Oil

.

Dealers.

19

How Congress Can Help Small and
Large Business

"HE WALKED
BY NIGHT..."

this-

Commission

.

Need

AND COMPANY

deeply disturbing condition there are many
causes, most of which in our opinion are ingrained in the
administrative activities of the Securities and
Exchange

10

Merchandising Your Dollars—Jules Blecher
4'Is ECA

Venture

7

,

Consuming Industries and Steel Consumption—K. W. Tibbitts..

National

industry is suffering an acute case of the
Underwritings and sales generally have fallen off.
capital is disappearing, adversely affecting both

doldrums.

Dollar Shortages

Trust Investment Problems Ahead—Marcus Nadler

NASD.

and

The securities

6

in

control, unfair trials, and
Our system of free enterprise threatened.

3

LiCHTtnsTtin

"

securities.

public interest Congress should abolish SEC

Production

Woollen, Jr

Monetary Fund Derelict

NASD condemned also for

circulation of prying questionnaires,
price
In the

Reserves—Threat

(655)

of public dissatisfaction.

source

Maloney Act authorizing such ban.

•

—Eugene Habas.................

CHRONICLE

Ban of pecuniary
advantages to nonmembers contrary to the interest of investors and
large and small business. Calls for immediate deletion of that part

i'

Inopportune—Fred I.Kent.

Bank

—Evans

(A commentary

FINANCIAL

Congress Can Help
Small and Large Business

Page

Enterprise—Source of Our Greatness—Benjamin F. Fair less. /.Cover

Inflation:

The

&

1-5
-

*

Schenectadv

-

Wo~cocter

>

request

IRA HAUPT & CO.
Members New
and

other

111

Broadway, N. Y. 6

WOrth 4-6000

Boston

York Stock Exchange
Principal Exchanges

Teletype NY 1-2708

Telephone:

Enterprise

1820

4

(656)

COMMERCIAL

THE

CHRONICLE

FINANCIAL

&

Facts of Life in Present Capital Market

Thursday, February 10, 1949

Why Should the Average

By EDWARD B. HALL*

Person Own Stocks?

Fresidcnti Harris, Hall & Company, Chicago, -111.

Mid-West investment banker analyzes current situation in flotation of new capital issues,

and points out
decline in use of equities in corporate financing. Holds shortage of equity capital, if continued, may
weaken corporate capital structure by excess of debt, though up to present time, this has been pre¬
vented by ploughing back of earnings.
Lays causes of equity capital shortage not only to double
taxation of dividends, capital gains taxes and high Federal Reserve margin requirements, but also
to widespread belief stocks are not safe investments. Holds investment sentiment can be changed, and
urges exist°ng shareholders to subscribe to additional stock issues allotted them.

A COMMENTARY ON THE "NEW MARKET"

FOR SECURITIES
By

Mr. Habas cites the mutual fund
vestment

capital market as it looks to a business corporation in need of new
capital has not changed its expression very much in the last two and one-half years. The
president of a good middle sized company needing a reasonable amount of new capital for
sion

[ registration is necessary for a
vvately

capital

inquiry
he

that
for

money

in

s

[

15

commission

good. investment

a

[banking firm to act as agent to
Hind the institutions that will make

from

life

[the best terms and to drive
'■

u r a n c e

and,}
;

is

investment

low

land 1

on

little

a

•-

printing

vThese bills .and

nobody

else.

good

\ fOF^di^afIpun agreement;

gener¬

speaking,

from

a

the rate and other pro¬
plus a modest legal, bill

bargain

visions,

companies
ally

pri-

that

All

the

a

at

more

rate

is

this

| banker "commercial" on this pro| gram v- all that is needed is to

20 years or

or

loan.

placed

needed

On

borrow

can

No

i; with relatively slight expense.

ing

find

■

■

Edward

j There's
quite a range
in rates depending

Hall

3.

—

increase
on

the* agent'sf com¬

the type of

money
more

the

on

than

total

loan

long-term

a

about

Vs

the

of

cost

of

1%

the

is

lowest

against long-term

Maintains trusts afford

dollar

depreciation, and otherwise
requirements of today's taxation and business structures. Lists

meet

the rate named in the note.

ever, except for a
couple of years ago.

broad

These

are very

generalizations, but I think
will serve the purpose of

they
showing that the present contrast
between the markets for loan cap¬
ital and common ahare
unusual arid extreme;

perhaps 4 •millions riiore today than a decade ago. I shall not dwell
V;,
u p.o.n
' t h
^1
abroad eco¬ long extended rise started which
nomic reasons nearly tripled living costs by 1920.
It is cold comfort to know that
why this new

w

..

nor

}'

Decline iri Eqpity
/
Vie\V of. these''conditions,-it

nancial

tradejournal,
reporting

week's

issue

financing

in

fi¬

..a

1948

,

this

in
new

writing and the expense of selling
Preferred stock money will cost to numerous, investors, the whole
at least twice these net figures bill of costs may well amount to

after taxes is from 1.70 to 2.95%.

$6.6

probably

much

unless

trimmed

more
up

than

with

a

strong sinking fund or the privi¬
lege of conversion into common.
And when he askes about sell¬

some common stock, he finds
that it takes a rather glamorous

ing

bonds

from 7 to 10% or more of the sell¬

went to

ing price of the shares.

1947

When faced with these facts of
life in the present capital market
our

President naturally

company

feels he hasn't much choice.
How

do

these

capital market
company to sell common shares at conditions
compare
with
other
more than four or five times cur¬ times?
Here I am going to rely on
rent earnings per share.
my memory rather than look up
In other words, if the money is
borrowed there will be no dilu¬

the

publicly.

official statistics.

Common stocks

2G%

of¬

most of

offered

publicly also
insurance companies.
In

that

—

were

course,

the percentages
different. These

very

tios

Of

of

stocks

current

are

new

not

were
are

the

ra¬

only 15 to
financing—

that have been featured in many

and

is

Morris

Associates,

Jan. 28.

1949.

Chicago,

111.,

good companies sell at four to

the

interest

rate

on

corporate

bonds, in the neighborhood of 3%,

More

bank

loans

stocks,

and

while

retained

$10.6 billion.

capital,

new

Thus the in¬

in funded debt of $5 billion

mentioned

of

estimate

an

industry in 1948; which is
anything prewar.

in

Industrial

summing

December

Securities

its report

up

meeting.

widespread
necessarily

in

the

at

"The

answer

not

ceeded

piled up a
structure.

debt

definite

a

'no.'

sound, but it has not pro¬
far enough to

financial




is

so

we

The direction of the postwar trend
was

Phone LD-159

strength

weaken the

built

up

in

earlier years.
"We
that

•

has

high

years,

the question

to

come

dangerously

Home Office: Atlanta

thing

less

in¬

something

academic,

new

market. It has been

adage in the investment busi¬
for

ness

some

man's prospect

man's

that

years now

client.

one

is merely another
With

the circle of
many

rea¬

become

has

imperative
organizations

for most investment

the

are

the

led

period

of

the

conclusion

rounding

out

peak in capital requirements
the larger American busi¬

finds
ness

strongly suspect—and
sadly—that the effort to reach
outside. the old circle has been
ineffectual—at

this

reason.

cial

least

in

part—for

Members of the finan¬

community cannot

undertake to

answer

or

do not

the question.

"Why should the average person
own

securities?" at least in terms

which make

sense

to the

average

person.

The meat of my coconut is now

Incidentally,

believe

I

these things, I hope to

little to

a

your

funds

mutual

but

contribute
knowledge of

even

to

more

you—if you need con¬
vincing—that the financial com¬
munity of which you are a part

offers

what most people need in

their personal financial

whether

they

And if I may

anplies

as

planning,

realize it or not.
be. personal, all this

much to you as to your

clients.

this

living costs and living cost trends,
yesterday, today and tomorrow.
Increase

in

Living Costs

In the past century every adult
American has had to contend with

living
her

or

cost

"Pinch"

lifetime.

60 %-70%

increase

during his
Although the

in living

since 1933 may strike

ually

as

a

us

costs
individ¬

painful and unique

ex¬

perience, the fact is that the cost
of

living

doubled
and

has

increased

fourfold

Living costs just about

between

beginning

to

that have pro¬

trend—constantly in¬
money, higher

standards

others—are

of

certainly

living,
to¬

present

day.
Second,

after

subsequently,
been

In

each

living costs

vance,

before

the

major

never

where

to
the

advance

depression

of

ad¬

returned,
they had
started.

the

early
1920's, living costs declined by
only 15% (after having doubled
in

the

preceding five years).

the

took

depression

the

of

It

early

1930's—a depression which rocked
whole social system—to

our

another

25%

bring

decrease

in

If history is any guide, clearly
it will make only a little differ¬

whether

(a)

ence

in

the

latest

rise

living costs "levels out" in the

next year or two

(b) whether liv¬
ing costs turn down in this period

whether

or

(c)

by

before

several

years

they turn down.

go

The

important thing is that there will
be

no

of

10

returning to the price levels
15 years

to

ago.

Individuals Needing More Dollars

Consequently, personal financial
plans for such goals as the educa¬
tion of children, personal travel,
the purchase of a home, the build¬

ing

of

estate

an

retirement
require

now

than

dollars

more

or

these will

fund—all

would

have

been adequate in the 1930's.
The worst of the

is

problem
for

cures

for

it

cost-of-living

the

lack of apparent
But if there are no

it.

least there are
lessening the financial
at

cures,

causes.

I shall

means

pains

not dwell here

the most obvious of these—

upon

conservatism in personal
Most of us have
probably gone as far as we rea¬

spending habits.
sonably

can

in this direction

in

1850

and

1895

1865;

another

1

address

by Mr. Habas be¬
Society of Secur¬

(Continued

ity Analysts, Feb. 9, 1949.

York

less

The

any¬

,

obvious

means

for

combating inflation is the aggres¬
sive use of personal capital. For
the businessman, professional man
and

earner this means the
capital in such a way as to"
encourage growth of that capital.
For retired persons and others liv¬
use

wage

of

ing on a fixed income, aggressive
employment
of
capital
means
making that capital produce mores,
income.
Here is where

ing

a

modern invest¬

institution—the

—can

*An

trend

years

creasing supplies of

way.

a

the

greater

At the outset I shall touch upon

The

this

reason

main

in

The forces

duced

living costs.

I

this

disturbed

clients.

fore New

27)

that

suppose

about

enterprises in sound shape to
on page

to

will be

to reach outside the circle for new

since 1850.
to

And there is little

century.

com¬

an even more

from

First, living costs have pursued
irregular upward path for a

minimum

tangible, and that is how to

more

reach the

the

"With

recent

business

whether

•

sus¬

learned

an

tensive search going on for some¬

Com¬

tendency "to finance with debt

Private Wires

I

,

mittee of the IBA had this to say

BONDS, STOCKS, COMMODITIES

munity—there is

convince

The

OF

reached

in the financial

us

tained

several times

BROKERS

of

those

just

tures of

■

be

to

pect that—at least on the part of

accompanied by an aggregate
increase in capital and surplus of
$11.6 billion. I do not have*a re¬

$18 Vz i billion for capital expendi¬

INVESTMENT SECURITIES

needs

curities.

Nadler

OF

ket"

that for most people the best kind
of a good security is a mutual
fund.
In telling you why I think

of

source

Incidentally, these are box-car
figures.
I mean very large.
Dr.

DISTRIBUTORS

good reasons why the "new mar¬

important

.

UNDERWRITERS AND

for

search

in ready to be served. I believe that
most people should own good se¬
profits,

profits figure for 1948, but
undoubtedly it was larger than
the year before.
•
;

Exchange and Other Leading Exchanges

great

billion

$1.2

was

Members New York Stock

the

be

to

history of living cost trends:

come.

which constituted by far the most
were

BANKERS

Behind

sons—it

down the

crease

INVESTMENT

eminent

hitting the bottle of easy
clients narrowing—for
borrowing and reeling recklessly

ness

speeches

b y

authorities.

con-

clusiori that due to the scarcity of
venture capital,
American busi¬

royal road to ruin.
thorough students agree
tion of the earnings per share on eight
times current earnings, that the
shortage of equity capital,
'the present common stock if the while I'd say that most of the time if it
continues, will be a serious
new money can
be made to earn during the 40 years I've been in
matter, but point out that includ¬
about 3 % after taxes, whereas if La Salle Street it has been the
ing a huge amount of retained
common
stock is sold, the new rule for stocks to sell at 10 to 15
earnings, the cushion, of owners'
One reason, of
capital will have to earn about times earnings.
capital' back of the debts has riot
20% after taxes, or earnings on course, is that less than half cur¬
only not decreased, but has ac¬
the present shares will be diluted. rent earnings are being distrib¬
tually increased substantially in
uted in dividends, while distribu¬
And the difference is still wider
the postwar period.
Dr. Marcus
tion of 65 to 70% used to be usual.
Nadler at the IB A meeting in De¬
because the loan can be arranged
Obviously the dividend yield is
cember pointed out that in 1947
still higher than usual, ranging
new capital issues were about $5
*An address by Mr. Hall at the
Midwest
Conference
of
Robert generally from 6 to 10%, while billion in bonds, notes and term
of

Eugene J. Habas

of

papers

readjust

- However, there are
important and more useful

lessons

dozens

to

to

past "15 years.
more

been

old days," peo¬

need

sharp increases .'in
costs of living—greater [increases
than we have."experienced in the

it.

recent

an

and editorials with the

essays

themselves

ing

They

the

faced

in reach¬

in

billion of which only $950 million,
less than 15%, was in the form

fered

ple

documented

or

vestors arid less than half

suc-

in "the good

even

cess

have

cor¬

of

date, of the

-lack: of

is not .surprising to find "The In¬

Dealers'.,,Digest,7

the

upon

consequences

to

■

In

vestment

needs

.to.be reached,

' ;*•

*

,

-market

capital is

\

Stocks,
however, nearly always have to of preferred and common stocks.
2% to 4%%. Interest is a deduc¬ be registered with the SEC for Incidentally, more than half the
tible expense, so with a 38% tax public distribution and to cover bonds and notes in this list were
rate, the actual cost of such money this as well as the risk of under¬ sold privately to institutional in¬
property and earnings and all the

'

There has been much discussion of late

•

at least 4%%.

was

by porate

over

a

terms—I'd say the range is from

twice

}} v

concerning the inability
I'd guess the 40-year average on of the financial community to reach the "new market'' for securities
—the
people of modest but comfortable means, of whom there are
industrial issues of fair quality
short time

expense.

I'm really sorry these
commissions are so small—seldom
mission

business, the margin of safety in

and

:

'

advantages compared with competing investment media. ""

in¬

creased work¬

will

T

Co., Inc.

&

organizations for broader community of clients, and the

protection

expan¬

and

Long

serving the twin needs of in¬

as

individual for best instrument of investment.

The face of the

plant

EUGENE IIABAS*

Vice-President, Hugh W.

make

a

mutual fund.
major contribution.

The mutual fund provides a prac¬

tical, desirable and prduent

(Continued

on

page

means

39)

Volume 169

Number 4776

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

(657)

5

Return to
Steel

'7

KKhV*-!'

1" *'

it

Production

y

Electric Output.

7 4

Carloadings

By FRED I. KENT*

Director, Bankers Trust Company
Chairman, Committee on Finance
and

.7

/

*

Auto

Production

an¬

gold standard,

tions, with large bank deposits
and *$32 billion of redeemable
E

savings bonds outstanding, a
gold convertible monetary system
might be disruptive since available

gold

be

may

insufficient.

Hints at

possibility of subversive
gold reserve
through currency redemption.

forces

raiding

Chairman

Mr.

the

Chamber
State

and. Gentlemen:

January
of

of

meeting

York

the

of

Commerce

New

of

the

resolution

a

was
passed
submitting to

the
and

Finance

There

question

as

whether

to

we

should

reaf¬

firm the

reso¬

passed

'

connection

gold.

tion

resolu¬

approved

ard and at the

time requested that it be put
the books immediately.

on

You may remember that in the
of 1933 the dollar was going

fall

down
the

and

time

would

the

approaching

value

of

gold

be

changed
to
$35
which came at the end

ounce,

January,
who

were

we

when

1934.

Mr.

John

an

of

Schiff,

Chairman of the Finance

was

and

Currency Committee, made
following statement in his re¬
port to the Chamber in the May,

the

1948:

by

period.

3%

"

*

The

continued

claims

by approximately

year

~

■

those

exceeded

67%, While

of

initial

similar

the

claims

59%

sion:

•

7

Though unemployment in the first week in January was placed
700,000 workers above that of the like week in December, signs
of some easing are in evidence, the Census' Bureau reports.
Tht
total for that week was 2,650,000 workers.
•
7 77 7,'; .7..
For the period total employment declined to 57,500,000
workers,
or
2,000,000 lower than in December, states the Bureau in releasing
its figures.
_/-.•■■
7"'\~ .7 v ,7 7/: 7,7
/7:; 7;
\777
available

answers

for the

of

causes

the

rise

in

mild'—each

of

these

factors

*

"I

*

no

severe

contraction in

most

manufacturing

in

leveling off here and there, and

new

inquiry coming

a

monetary
system
gold standard in
every sense of the word, but we
only wish to achieve this aim at
the proper time."
based

the

on

Weather conditions in many-parts of the nation had

an

should

demand

that

our

govern¬

ment go

back to the former gold

standard

now.{.«??

This is

~

7/77.7

/

question that is very
important for us to consider.
It

.

is

a

something that

allow

we cannot

;to pass by. nor to take for granted,
as being a
justifiable procedure at
;this moment. However, before we
can

properly

tion

as

the

measure

situa¬

of today, we must take into
•account conditions as they exist.

It

is

not

there

is

question

a

no

purpose

of

in

theory;
bringing

theory into the picture just

now.

It

exist

is

the

conditions

today that
We

must

we

have

in

the

an' indebtedness
that
to

we

which

consider.

United

-

of

$252

manage.

Bonds, and of this total, $32 bil¬
lion

are

in E Bonds.

mention

E

The
in

Bonds

"is because the E Bonds

•ably held

reason

particular
are

prob-

largely by those

more

who would be inclined to fear pan¬
ics or anything of that sort.

Thej

$32
on
f

billion E

demand;1

it

.

Bonds

are

the holders

payable
can

1

.7
! *A

(Continued
statement

def

#

on

by

page

Dr.

38)
Kent

at

^meeting of the Chamber of Com'merce of the State of New York,
New York City, Feb. 3, 1949.




ago.

STEEL

'*

■"

' *'

SCHEDULE

AT

"

OUTPUT

RATE FOR

'

"

is

still

able

Socialism

fortnight ago Geoffrey
the test of
the fact that the British elec¬
a

of London, pinned

on

errors."

"correct

to

,

of

importantly-attended speech here

country's socialist experiment

torate

"Only democracy provides
correction of error. If there be error
it will be corrected," is offered in con¬

deliberate opportunities for the
in the socialist experiments

donation of the nationalization and socialization of the British

But this

presupposes

lion payees of annual

government checks).

Another democratic come-on, constantly offered by Washington
protagonists to prove that the Fair Deal is not Socialist, is citation

*.

the

of

people's right to criticize their government.

But this is also

boasted attribute of Britain's Socialist Government.

a

us

from

the

Soviets

is

their

not

discussing, but their views
Crowther.

And if

of the United

on

views

my

on

the

"What divides

matters

I

have

right to discuss them,"

Norman Thomas

our

were

says

been

Mr.

to be elected President

States, abolition of free expression Would be about the

last

thing he and his

said

that the transition to Socialism

Socialist

Party

would

institute.

Even

Stalin

can temporarily respect
parlia¬
mentary procedure, civil liberties and due process of law.

Planning

.

.

In

his, recent
managed

breezy
to

versus

Democracy

7-<7;7:

off-the-cuff ecqnomic

realize that

a

"controlled"

sermon
economy

President
is totali¬

tarian

and hence bad, but propounded the thesis that contrastingly
"planned" economy is democratic and a part of the American way.
Of course, the full life and prosperity-for-all are
incontrovertibly
pleasing aims, but let not the far-reaching implications of governmen¬
tal economic planning be
euphemistically distorted by false analogies
with individuals' planning of their business, of their
housebuilding, or
with city planning. The difference that must be realized is that under
planning by the government, the economy—by coercion if necessarya

1

becomes altered in all ways necessary to bring about the
LOWER

com¬

the possibility of an objective recogni¬
tion of "error" in directing the redistribution of the nation's wealth
by the recipients of the "erroneous" largesse (including the 14 mil¬

munity.

Truman

.

FRACTIONALLY

specifications drawn

up

CURRENT WEEK

by

the

central

planners.

blue-printed

Under'"national

prosperity budgets" already being prepared by our Washington eco¬
nomic architects; or under levels of employment, wages, and prices
field, accord-: as fixed by "the government,7 the free market mu«t be altered
ing to "The Iron Age," national metal working weekly,- in its current —yes, regimented— to fit the plan, in lieu of the converse demo¬
summary of the steel trade,
In the auto center there was less pres¬ cratic procedure. Just as the planners did not stop short of com¬
sure on steel mill offices with most steel
buyers there getting their pletely debauching the monetary system, they will not rest with an
full quotas.
Some buyers were being offered hand-mill products academic "study" of the need for government
entry into the steelat less than former "premium"
prices and more consumers were business./."-7'.
7:.•/■ ' ' 77/7
77
' 7 ';
getting bonus tonnages from mills.
Such tonnages arise quickly-on
Camouflaging planning by attaching to it the label of liberalism
Further

proof

that

the

steel

market

mill

schedules
Auto

showed

because

of

no

For the first time

since the

price conscious.
which

run

conversion

steel

have

such

of ingots

end

of the

steel

war

customers

is to indulge in dangerous fantasy. This is particularly true if liberal¬
is recognized as the process of getting the St^te to use the Big
Stick on those whose sin it is to be members of the so-called "con¬
ism

servative" minority.
down

to reasonable

for

a

long period, but not all

contracts.

and relying

on

steel, this trade authority reports.

are

Many

are

regular mill

users

already
sources

Time Inc.

of

turning
for

Kingan & Co.

their

7r

pattern in the steel market this week

as

Continental Airlines

it works its way

normal condition is

a

clear, states "The Iron Age." It is acceptance
market steel is out of the picture except for
emergency uses which are becoming less frequent; elimination as
quickly as possible of conversion deals; avoidance of premium-priced
of

the

steel
far

For who will there be left to keep the Stick
proportions?

Some have ironclad contracts for high-priced

steel

offers

what they were only six months

that things

are rolling towards normal
expected, the magazine notes.

say

conversion

to

more

isolated

this week to

and faster than had been

The

a

still

were

is enough evidence to

down

to

automobile

cancellations by other users.
taking all the steel they could get and
signs of canceling tonnage. But the contrast to steel market

firms

conditions in Detroit

super

trending

was1

normal condition is found this week in the

billion

have not yet learned how

Of that $252 billion,
$55 billion represents E, F and G

-I

year

ago

States

his

;

adverse

shopping in the past week. Although retail dollar volume
fractionally exceeded that of the similar week last year, it fell
slightly below the previous week.
Consumers insisted upon good
quality merchandising at moderate prices. ~
* ■>"- 777,7:
•
-

Camouflaging

Crowther, editor of the "Economist"

on

approved
by'
is the position

was

In an

with

The dollar volume of wholesale orders rose
fractionally last week
the and continued close to the
high level of the comparable week a year
Chamber and
the
ago.
Spring bookings were not as numerous' as they were' this time
Chamber holds today.
The only last
year, but this was generally attributed to
the-longer -Easter
question before us is whether we season this
year.
Collections continued to be less' prompt • than-a
That

r

1931-32) for his fellow-Soviets.

years

Democratic

in far greater volume in the major products than
handle promptly.
Up to the present time the easing in pressure on the market
has largely involved so-called premium tonnage.
This is in line

effect

over

ends of full employment and economic balance (excepting the starva¬

can

expectations, the trade paper observes, adding that considerable
premium tonnage continues to move into consumption, however, with
various mills throughout the country continuing to quote prices well
above the generally recognized market' level.
Some of these prices
may be in for fairly early downward adjustment.

May

outworn

worry

tion

pressure,

and the steel producers, anticipate
Considerable momentum remains

buying.

A. Wilfred

:

degrees varying from the Russian to the British experiments.
We must remember that Mussolini was celebrated for getting
his trains back on the timetable, and that Stalin achieved the noble

caution evidenced in recent weeks appears to be intensifying.
Some
consumers
are
apprehensive of a collapse in demand with buyers
withdrawing from the market holding larger inventories than now
suspected.
For the most part, however, the great majority of con¬

would like to point out that
desire

their

an

will

this trade magazine
notes.
Lessening international tension, however superficial, also
appears to be exerting a dampening influence on market sentiment.
While the mills continue to ship in unabated volume the
buying

they

are

'

sumers,

fall"

propensity to justify what¬
used
for forestalling potential

common

platitude. And at the very least the American people
the means employed by Mr. Truman to pursue his
Utopian ends—provided they are not deliberately misled about the
actual loss of independence arising from socialization elsewhere, in
as

contributed

the steel supply situation, magazine "Steel" in
a
current release states that steel markets are rapidly
assuming a
more
normal aspect and that stringency in supplies of the major
products continues, but the signs increasingly point in the direction
of supply-demand balance in most items before
many more months

lines despite a
to the mills is

our

Surely the citizens of this country are vitally concerned
enjoyment of freedom and democracy—and not merely

depression.

With respect to

pass. ■

employs.'"1
7
.•:7,7//7''
problem is not one of ter—.
defining socialism, liberalism, col¬

moans

with

share to the unemployment rise."
*

of
I
fore-7|

one

is able to

But is is nonetheless disastrous to

in with the

single factor, no one industry, is responsible. Adjustment
supply to demand, contraction of over-expanded inventories, buyer
resistance, returns to seasonal patterns of employment, weather con¬
too

problem, after all, is not

President Truman

in

lectivism.

of

or

If

ninology

unem¬

ever

cold

the

"But

Admittedly

"No

ditions—'too

attempted .differentialirn

;he words which he

which stated:

a

pam¬

tall, evade, prevent, get on without a depression,
people of this country will not be inclined
.o
worry overmuch either about the means
or

given by the FSA's Bureau of Employment Security

were

weekly

a

the

_

best

.

.

.

national

semantics.

at

The

,,

planning and control, qualms
jver the President's logic are
summarily dismissed
with the following typical materialistic conclu¬

last

week

about

were

above the like 1948 level.

ployment

Truman's

between

7

we

President

'

nitely serving to relieve steel demand

the gold stand¬
same

creased

1933,

That

back

unemployment, latest figures for the week ended
claims for unemployment insurance in¬
and initial claims declined by about 8% for the

show that continued

vember,
with

Kenl

In the matter of
22

our domestic political
and confusion persistently embraced by

Fitting into this category is the "New Leader,"
phlet wiia a strong anti-Communist position,
whose contributing editors include such men-ofgood-will as Max Eastman, Harry Gideonse and
John
Dewey.
In an editorial enthusing over

pro¬

but, notwithstanding this,- total output held
moderately above that of the comparable week in 194877.77;7X\,7
Jan.

Possibly the most discouraging feature of

situation is the complacency
anti-Communist "liberals."

week

No¬

e r

in

I.

slight tapering off in over-all industrial

some

past

in

b

The Liberals Seek the Big Stick

Business Failures'-

Expanding steelmaking capacity, continued high production and
slackened requirements' from some consuming directions are defi¬

by the Cham-

Fred

was

duction the

Currency

Committee the

lution

By A. WILFRED MAY

Index

;

points out under present condi¬

•

Price

J

nouncing adherence to policy of
eventual return to

At

.

Food

York

.Commerce, Dr. Kent, while

-

Industry

Currency, Chamber of

In statement to N. Y. Chamber of

,

and

1

Trade,

Commodity Price Index

Commerce of State of
New

•

Retail

State of Trade

fact

and

this
on

take

care

a

"The Iron

McGraw (F.

gray

H.) & Co.

Bought—Sold—Quoted

reliance

is

back

that

as far as possible on
regular mill shipments.
So
only the beginning of the steel consumer's fight to get
"regular" footing. But the day of easy steel which would

of

a

lot

of

manufacturers'

Age" concludes.

worries

!

'.7

is

still: not

''

'

yet

FREDERIC H. HATCH & CO., INC.

here,

■

:

The American Iron and Steel Institute announced this week
63 Wall

(Continued

on

page

30)

"7

Established

-7
MEMBERS

N.

Y.

1888

SECURITY DEALERS

Street, New York 5, N. Y.

ASSOCIATION

Bell

Teletype NY 1-897

C

(658)

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

Increased Bank Reserves—Threat
To

Thursday, February 10, 1949

Fram

Employment and Production
By

EVANS

Ahead

|

WOOLLEN, JR.*

Washington

of the News

President, American Bankers Association
/

Chairman of the Board, Fletcher Trust Company, Indianapolis,

■

Ind.

?

By CARLISLE BARGERON

...

ABA

head, urging wider area of agreement among political factions and cooperation and understand¬
ing between banking and government, upholds right of dispassionate criticism. Sees at present no need
for higher hank

requirements and points out dangers of reduced business and employment from
Holds proposals to extend Fedsral Reserve
authority over nonmember banks is

reserve

loan contractions.
threat to dual

of the Administration's attack upon the

The complete phoniness

v

■

•

banking system, and criticizes enlarging lending powqr of governmental agencies while
endeavoring to contract private credit.

Taft-Hartley Act is being manifested daily. None of its spokesmen
so far seem to have much knowledge of what is in the law.
An\ excep¬
tion is Chairman Paul M. Herzog of the, National Labor Relations
Board whose main, if not sole concern, however,
is to' return to the board its sweeping power over,
on a rather thinlyunderstanding that he will lean over back-.
wards towards labor.
It is an open secret in

labor-management relations
veiled

At the last

election, the American people selected the Administration and the legisla¬
majority which are to guide us through what promises to be a momentous period. The
election was so much of an upset of the
generally expected result that we are inclined to
tive

its

measure

immediate

terms

of

drawn.

prise.

Analy¬

sur¬

decisive

its

It

be

may

that

guessed

hold

at

that

compelling urgency.
That
ur¬
gency is the international crisis

our

Evans

foreign policy
in

Woollen, Jr.

its

formation

execution

and

has,

politics

to

thing if we were
in a struggle ol

in
tionalist aspirations

clash of na¬
or in a game

or

a

of

"Welfare

State," which one high
in
our
government
has
called
"the
political discovery of the

side of that conflict there is

twentieth

their

was

presumably in consider¬

century."

Journal"

The

accurate

"Wall

editorially

says

that

the "Full Em¬

ployment State" would be

more

a

description than the

"Welfare

call

we

found conviction.
ceive

and

ourselves

it

by the

one

Pericles:
;+

£n.

"?,TJ^e„5'ty.^a?Jsuf£I:
provided and stored with

ciently
all things
necessary for the war,
they should convert the overplus
of its wealth to such undertakings,
would

hereafter,

when

com¬

pleted, give them eternal honor,
and, for the present while
in
process, freely supply all the in¬
habitants with plenty.
With their

variety
all

mon

workmanship

of

occasion

for

and

service, which

arts

trades

and

of

sum¬

and

re-

quire

all

about

them, they do actually put

hands

to

be

employed

the whole city, in a manner, into
state pay; while at the same time
.she

is

both

;tained

by

who

are

war

are

tained

herself.

of

For

and

age

main-

and
as

be

ours,

may

be wholly

or

affords
said

strength

for

the

armaments

abroad

out of the public
.stock, so it being his desire and
design that the undisciplined me¬
pay

.

chanic

multitude

that

stayed

at

home should not go without their
share of public salaries, and yet

That

no

Eric

Soviet

lacking,
con¬

Johnston

has

address that you

recent

a

from

of their

measure

Mr.

■'

in

different

military defeat

a

Russia

still

and

that

this

is

because of
conviction of its adherents.
true

the

ican

all

above

conviction.

sential

tool

ment

the

alternatives.
are:

Amer¬

an

That

for

either

of

tives

is

else

is

the

es¬

accomplish¬
of

one

Those

two

working

out

twc

alterna¬

bash

a

upon

which the two ideologies can

live

together

conducting
tion

of

long,
tory,

one

in

this

world,

Before!

the other.

or

or

to the destruc¬

war

a

time is measured by his¬
we must select one of those
as

alternatives.

Whichever

selection, I say, we need

an

our

Amer¬

ican conviction.

Attaining
conviction

is,

difficult for
follow

sustaining
to a point,

and

the

that

up
more
than for those who

us

idea.

other

We

draw

design of fancied perfection,
Democracy tolerates imperfection
no

for the sake of freedom.
salts

all

deals
that

life

of

with

irreverence
is

mortal.

America

humor

to

and

everything

These

are

safe¬

which should

guards in

our

for

make

our

conviction sounder

to that end he

when

once

.should not have them given them

sitting still and doing nothing,
thought fit to bring
among them, with the approba¬

tion

of
the
people, these vast
projects of buildings and designs
of

that

works

would

be

of

some

attained.

The debate in

paign brings
ences

e^ist.

ished,

participants.

give employ¬
ment to numerous arts, so that the
'part of the people that stayed at
I home
that

might,

no

at

were

sea

less
or

new

State"

mains

or

to

is

garrison,

*An

useful

but

advantage of the
This kind of debate
it

does

not

settle

ii

tiori

find

can

anc

This

is

implies
struggle toward improvement.
The

■

a

banking industry of Amer¬

ica would in very large part, as I
believe, accept these two conclu¬

sions

of

present

need, namely:
cooperation and constructive dis¬

passionate criticism.
Banks

Should

Be

Implements
wish

We

banks

our

Free

1

not

to

be¬

bureaus of government, but
as free
implements of

come

remain

to

the

To remain

economy.

be

must

reasonably

so,

we

in step with

the economy as it is, and we must
from time to time be for some¬

thing which is
date

and

little

a

little

a

more up

to

realistic

more

than the doctrine of laissez faire„

Organized
segment

banking,

like

nation,

the

of

ever>

feels

efforts
that

We shall bend

toward

common

the

respect

and

resnect

for

That

we

with
our

We shall ap¬

attitude of

an

wish

a

own

could

to

win

purposes.

do

not

cooperating,

of

privileges of questioning and
In so doing we in¬
vite
question and
criticism of
ourselves.

We

now

raise

'
Mr. Madden is

mittee and it

Congress,

Congress

and

barely undertaken the
filling it in, we admit

perplexity about the intentions of
the government with respect tc
credit.
V
In this field the Administration

has

again asked that the Federal

Reserve

Board

be empowered

to

requirements to
36%, 30% and 24%, respectively,

raise

reserve

the

against
central

demand

reserve,

deposits of
city, and

reserve

country banks, and 10% against
time deposits.
The Board's pres¬
ent maximum authority with re¬
gard
would

to reserve requirements
have expired on June 30,

next, and it is assumed that the
Board will ask Congress to ex¬
tend the requested additional re¬

requirement
definitely.
Moreover,

the

authority

in¬

-

Administration

was

delight to observe him while the committee

at his place whenever it came his turn to question. He never
to listen to what the other members brought out.
He

other and undoubtedly pressing business. Report¬
covering the hearings used to lay bets as to whether he would
but invariably as the member just preceding him fin¬

ers

miss his turn

ished his

questioning, in would strut Mr. Madden.

"I would like to ask

"Yes, that is

It

wouiu

go

this

on

be

seen—perhaps later

to

prevail;

address

by

but

Mr.

certain

Woollen

before the 30th Mid-Winter Trust
Conference

of

the

Bankers

Association,
City, Feb. 7, 1949.




American

New

York

area

of

agreement

and

under¬

mercial

banks.

It has

(Continued

an

as

an article in
outstanding and honorable leader

"Do

admit to being the man to whom that refers?" asked

you

Madden when he had read

The

the passage.

admitted it and Madden said:

leader

labor

is all."

"That

article.

.

Kennedy, just elected from Massachusetts, picked
the article and observed that inasmuch as it had been introduced
would like to read another passage.
It described the labor man as, although having the qualities pre¬
Young John

up

he

viously attributed, also having
being withall a pig-head.

uncontrollable ambition and as
'
!

an

.

too, won't you?" Kennedy asked

"You'll admit that refers to you,

puckishly.
if Madden

doubtful

is

It

can

explain

single provision of the

a

Taft-Hartley Act.
To a lesser extent this is true of Secretary of Labor Tobin.
the

He is

selected, naturally, to go before the Senate Committee and

man

the Taft-Hartley Act should be repealed. Outside of that
promise, he doesn't really know.
Before the committee, he is surrounded by a host of aides. They

tell it why

much heard about

try to give him the answers to
are

not

doing

a very

the questions fired at him, but they

good job.

'

-

in which the Administration is proceeding with the
very / important matter of labor-management legislation is not far
removed from just plain mob rule.
■
i
■A-" The

way

Growellj Weedon Adds

f

.Two with Stone

(Special

St Youngberg:
(Special

The

'o

'

,

Financial

Chronicle)

FRANCISCO, CALIF. —
Morton E. Lichtman and Frank H.
SAN

Walsh

,

have

Francisco

connected

become
&

Stone

Youngberg,,: Russ

Stock

of

the

Exchange.

San
A ;

to

The

v >

Financial-Chronicle)

CALIF.—Marjorie Meyersahm has been added
to the staff of Crowell, Weedon &
Co.,
650
South -Spring Street;
LOS ANGELES,

members of the Los

Angeles Stock

Miss Meyersahm was
formerly with Harbison & Greg¬
ory.
■
'
' ■ • ■ v

.Exchange.

com¬

also asked

standing. We need understanding. that the Board's powers over con¬
We need understanding between sumer credit, which also would
government and business; between expire on June 30, be extended.
capital and labor; between finance
Economy Is in Balance
and industry; between ownership
All of these powers may be re¬
and management. We need under¬
standing between those who lead quested of Congress in sphe of the
and those who follow and between

the reporters

as

Perplexed, the labor leader said he hadn't seen the
"Then I will read from it," said Madden pompously.

Building, * members

insured

for about ten minutes

in the labor movement?"

of

nonmember

management and labor?"

way

Evening Post'

the 'Saturday

"Welfare State."

clude

further if the Wagner Act has not worked

giggled and the other committee members grinned.
One day, Madden asked a labor leader:
"Is it not a fact that you were recently praised in

authority to administer reserve
requirements be broadened to in¬

debate, when the objective oJ
participants is to widen the

Then turn¬

say.

it has."

"Yes

pation in that most civilized form
all

questions," he would

fact."

a

"And I want to ask you

to imorove relations between

is the "Full Employment
re¬

few

management committed terrible wrongs against the working people?"
The labor leader would look up surprised and answer:

with

It

a

ing to the labor leader—he would never question the critics of the old
Wagner Act, just its friends—
; ■
"Is it or is it not a fact that until the Wagner Act was passed that

has recommended that the Board's

a

was

would go about his

general partici¬

now

member of the House Labor and Welfare Com¬

a

a

around

sat

some

having
task of
to some

repeal the Taft-Hartley Act and

considering the Taft-Hartley Act in 1947. He sat about fourth down
the line on the minority side* of the table. This meant that with the
Republican majority having the right to question the witnesses first,
there were about 12 questioners ahead of him. He had it timed to

questions in behalf of our indus¬

try, and in the public interest.
The President having outlined
a
framework in his messages tc

;

gonna

were

we

by the Act.

unless

criticism.

you

do it," was the extent of his enlightenment to the radio
listeners; there was no discussion of the alleged injustices worked

our

of

of

man

a

we're gonna

exercised

we

as

told

"We

our

widening

front.

proach this task in

while

commor

how

to

Administration's acticn.

the government wher¬

possible.

ever

make

to

selected

ana,-;

air

impelling duty under existing circumstahces

Carlisle Bargeron

appear

.

the board.

be accomplished, there

can

as

lop-sided, in fact, that the legislation itself would
become relatively unimportant.
As to the knowledge of the present act's pro¬
visions by the Administration's spokesmen, there
is the case of Congressman Ray Madden, of Indi¬
the first of three radio speakers to defend the

esf

It

serve

Need Wider Area of Agreement

We need

in the century—whether that con-

is

the

is

than those
in

*

cept

cam¬

differences.

etc., etc., etc."
So

election

The objective of the

debate

would

an

into prominence all

of those topics upon which differ¬

continuance before they were fin¬

and

ways

imperfection.

front with

If all this be true, then what we
need

of

you

would not have stamped out in¬
ternational communism. I believe

those

provided for and main-

in

their

by

beautiful

that.

may

to

as

we

criticism.

pro¬

integrity in international

the

on

of debate

passionate

not de¬

us

dealing

name

rodotus

a

truthfulness

of

.

could administer

or the other, to claim it as
discovery of o u r century
might be questioned.
Hear He¬

Let

about

standards

viction.

State."

Whether

;

merely

able part from the concept of the

that it thinks

:

be one

engaged

diplomacy.
But it is quite
another thing;
for it is all of
these, plus a conflict of funda¬
mental
ideology.
On the other

Street

•

It would

power

this time, enjoyed a large measure
of bi-partisan support.
The dis¬
sent

kind

The idea is to

to take his authority away

is little ques- '
Herzog's leanings will
administer
whatever
legislation is finally in¬
volved. His administration will be so completely

If this

participation

as

from him and make him. subordinate to

'

wide

a

this conclusion would i
sentially consis tent with the
any
time, but that id American conviction itself, where
itself upon us now with £• we start with an
acknowledgment

forces

was

which

I be-1

and

from

that

who

those

of

together after the election.
lieve

•not

.

first

those

and

The second conclusion is that,
worthy of the high privilege!
of a free election, except as they;
working together, there can anc
have
the
capacity for working! should be constructive and dis¬

dis¬

dissent

have

are

mi¬

that, by
large,

who

conclusions, j the foundation of cooperation
in my judgment, is that no people; of an American
conviction.

regis¬

tered
sent.

those

have not.

The

surprising. An
nority

be

Working Together After Election

than

enormous

to

are

With

sis shows that
it
was
less

rewrite the act

so

conclusions

on
view to getting rid of the gen-,;

a

counsel, Robert N. Denham.

eral

<£-

decisiveness in

that considerable of the attack

Washington

the law is with

on page

23)

.Chicago Exch. Members

Miller, Kenower Adds
(Special

to

The

DETROIT,
R.

Sims

staff

Ford

of

has

Financial

MICH.—Mrs.
been

Miller,

Building,

added

Helen
the

Exchange has elected to member¬

to

Kenower &
members

Detroit Stock Exchange.

,

CHICAGO, ILL.—The Executive
Committee of The Chicago Stock

Chronicle)

of

Co.
the

ship

Huntington

Henry

B.

of

Ames, Emerich & Co., Inc., Chi¬
cago,
and Frank A. Miller of
Tow\r\n

T?

PonnA+f

Sir

P

A

PhipQCfD

/

Volume

169

Number 4776

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

(659)

7

Trust Investment Problems Ahead
Monetary Fund Derelict in
Warnings of Dollar Shortages
By MARCUS NADLER*

Professor of Finance, New York
University

-

Dr.

Nadler, in pointing out difficulties experienced in making trust investments under
inflationary
ditions, indicates inflation, for time being, has run its
course, and with likelihood that

By WILBERT WARD *

Vice-President,
Chairman,

National

Administrative

City

of

Bank

Committee,

New

York.

Foreign

Interchange Bureau

rities

Foreign trade banking expert calls attention
information

to slow and

inadequate

,

on

dollar

dissemifor

time

by

Federal

Reserve

Bank

New

You

York.

will

call

re¬

that

the

at

time

venture

that
was

proposed

I

questioned its
value.

I

regard it

a

bureau-

of

collecting post-

mortem statistics

concerning situ-

ations which

our

membership have
long since forewarned each other,
I regard the present
proposal as
of the

more

value

in

If there is any

same.

knowing

the^ im-

that

and bank which hopes to
do business abroad expects eventually to be paid in the only coin
company

which is real money

sterling,
rubles,
to

French francs, • Russian
would not be a payment

American

an

England,
live.

.

.

unless he went to

France,

Russia

or

to

.

"That is the

elementary principle

that you cannot sell to a customer
if he hasn't the money to pay his
bills. Everyone understands it as

matter of

a

course

when he is do-

ing business inside the country,
But we have never fully grasped
the fact that this same principle
applies to foreign business.
The
most probable explanation for our
ignoring this elementary principle

City banks from whom the

credit

Bank

of

New

in

fact the

of

the

would

derive

from confirmation of the fact that

their

misery is being shared with
larger
c o m p an y
scattered
throughout the United States is
a

not
worth
the
trouble.
What
"would be of value is a forewarn¬

ing that a dollar shortage in any
foreign market is in the making.
It is

a

as a

whole, and not the individual

characteristic of the export
business that it is often the nation

buyer, that becomes ."slow in the
The buyer may be sol¬

trade."

vent
ance

and

liquid,

with

of local currency

purchase dollars,
country has incurred
of

abund¬

an

with which

to

balance

if

but

adverse

an

purchased with his local cur¬
The only way that he can
a

bill of exchange drawn in

dollars is to deposit the local cur¬

equivalent

rency

and

to

engage

make further

deposits to meet any
depreciation in its value until dol¬

lars
are
again
available.
point is, it is misleading in
a

situation

man

to

rely

for

dominance

and com¬
modity markets, regulated our in¬
money

ternational trade for
we

have

selves,

to

now

how."

Though

us.

regulate it

have

we

not

our¬

yet -learned

■

Mr.

Lippmann's solution

propose a Bureau
of
International

desire

of

was

that

cannot

we

averages
It

is

us

of

1941

we

would

be

nearer

but

ments

been

today

financial

had

operating

such

since

(Continued

on

that

c om-

to

1944.

How-

32)

have

note

that

on or

mechanism

credit

export

.A

:

man

the

sharp rise in
prices of commodities was not ac¬
companied by
a
corresponding

presently
what

being

is proposed

to

extension.

find

has the

some

With

re¬

stant rise

where
on

the

in

Inflation is

the

In

cost

of

serious

a

recession

accompa-1

by a decline in employment
and profits or will it be marked
by greater stability? 1 '
:
(2)
What is the outlook for
money rates?
Can one expect a
further rise in yields, as was wit¬
nessed

during

1948,

or

will

on

part it constitutes the cost of

the

borne

war

by

equi¬

those

The

apparent by a
the
Dow-Jones

neriod

a

in

of

the

years.

accom¬

end

en<f of il945 stocks

only

the

moderately

need

to

seek

and

hedge

a

the various controls, prices
began
rise
sharply, the

purchasing

of the dollar declined rap¬

prices

yet
of

and
1947

of

of

lower

were

and

1941.

equities

1948

Hence

people

teracted

to

a

wuat

*An

address by

fore 30th

coun¬

Trust

far-reach¬

impossible to

say

business

or any increase
Congress may vote?
affect earnings and hence divi¬
dends of corporations and prices
of equities?

in

that

taxes

,

The

investment

problems con-'
fronting the trust officer are all
the more complicated because the
traditional

relationship between
prices of bonds and prices of equi¬
ties Which prevailed for a number
Questions Confronting Us
of years has been completely up¬
Hardly had the trust officer ad¬ set. Prior to 1934 a strong equity
justed himself to the conditions market was, as a general rule, ac¬
brought about by war and infla¬ companied by a weak bond mar-:

tion, when
arose

the

a

recent

inflation¬

are

pronounced

set of problems

new

which

bound

effect

to have

a

the

invest¬

ment activities of the trust

depart¬

on

ket. This

market

and

the

trust

company.

other.

because of the close

was

relationship
on

demand
ment

the

for

equity

the

between

hand and the

one

brokers' loans

A strong

variably led to

Briefly summarized, the principal

on

a

(Continued

material increase1

32)

page

on

Purch. Power
of the Dollar

ex¬

Con¬

ference of the American Bankers

Association, New York City, Feb.

Wholesale

Wholesale

Price

Prices

1941—

1946—

1947—
1948—

„

__

__

—

—

"'October,

Dollars

Index

1935-39—100

Dec.—

Dow-J. & Co.

Industrial

(65 Stocks)

(30 Stocks)

36.92

110.67

14.38

25.33

38.26

63.67

1926—100

Public

Utility

(20 Stocks)

Railroad
(20 Stocks)

85.9

93.6

75.1

107.1

72.36.

192.74

57.1

140.9

63.97

174.38

51.18

36.77

49.3

163.2

63.66

179.18

33.04

49.4-3

*48.7

162.2

63.66

176.31

33.09

53.27

1948.

8, 1949.

PLEASURE

IN

ANNOUNCING

THE FORMATION

it.

The

solution

organization

In

Lippmann made
entitled

1944, Mr.
a

OF

Gearhart, Kinnard

Is Now Associated With Us

Walter

Keep

and
Members New York

Opportunity

.

■

'v

•'

^ CV:

Security Dealers Association

TO CONDUCT A

\

an

FT &■ @iLE & ©
Member Cincinnati Stock

the

by Mr. Ward at the
Monthly Meeting of the Foreign
Credit Interchange Bureau, New
York, City Feb. 2, 1949.




\ v, :

/'■

to Serve You

GENERAL

BUSINESS OF

INVESTMENT

Exchange

frederick

45

NASSAU

NEW

YORK

STREET
5,

N.Y.

BANKING

4-3300

richard

edward

v.

VICE

Union Trust Bldg.

Cincinnati, Ohio

MAin

N. Y.

A.T.T.—CI 199

gearhart.

jr.

kinnard
PRESIDENT

otis
PRESIDENT

AND

TREASURER

1-576
karl

5115

d.

PRESIDENT

l.

VICE

TEL.: WORTH
TELETYPE:

'^Remarks

Otis

is

which

suggestion in
"To

&

incorporated

an

the

equity market in¬

Wholesale Commodity Prices and Stock Prices

the

Dr. Nadler be¬

Mid-Winter

are

conse¬

How will the changed out¬
for

ary movement will have.

held

considerable

is

effects

who

and

economic

of inflation

ing, and it

at the

those

today would have

quences

and

look

de¬

at

than

social

(4)

all

on

fixed income.

a

MR. HENRY J. ARNOLD

Will Welcome

the

living.

invisible tax

an

those who live

WE TAKE

compiled—
to be com¬

information, and is willing,

reveal

article

into

determine

can

a

nied

by which the

temporary congestion.

credit

only

The

piled—is not illuminating. I would
like to see the Foreign Credit In¬
ter-Change Bureau
sponsor
an
imaginative approach to the solu¬
tion
of this problem of foreign

to

were

hedge few weeks ago? Will the present
depends on period of readjustment degenerate

.

L::,;

we

a

spect to that matter the informa¬
and

thus bringing

wages,

back to where

the

some

tion

prices and

demands

new

such
export credit
seek to evaluate

whether it is something more than
a

not

or

Administration and

the

buyer.
buyer's country is de¬
ficient in dollars, what is needed
is

are

so

the timing of the purchase and
sales.
It is, however, of interest

the cerdit worthiness of his

When

fared

equities

against inflation

1945—

bureau

increase

not

re¬

against inflation was not great.
After the war, with the
repeal of

our

commit¬
a

page

these

under¬

an

standing of the dimensions of
international

to the

them until

question

to

sharp

Whether

fo

even

bought equities in 1941

Ahead
no

taxes

is

of

over

creased

hence

end

is

to

rose

end

Wants Information of Trouble

proposed by the

of

panying table- that frohx the

creased

is kept in balance.

in¬

will

well.

same

,:up

All

indicated

of

There

This

comparison

idly,

our

or

for

prices,

Nadler

inflation.

remain solvent,

unless the budget
international transactions

course,

new measures

of

in

has shown that

power

whole,

outlook
forces

would

the

a

who
invested
their
savings in
broadly speaking, were not
fixed income-bearing obligations.
particularly a good hedge against

try

a

the
the

their

ceedingly low.

hedge against inflation.
The experience of the
past few

to

as

the

is

Have

run

At

x-

considerably.
During
the
same
period, however, the pur¬
to chasing power of the dollar de¬

the Budget

What

in

us

follows:

as

of

e

to

Payments,
di¬
rected to the purpose of remind¬
ing the government agencies, the
Congressional
committees,
the
business interests, and the coun¬

payments

rency.

honor

worldwide

London

his

in interna¬
tional account, the dollars cannot
be

until about 25 years ago what was
called the gold standard but was

Whatever solace

men

is that

(1)

business?
flation

are

for higher wages renew the spiral

better, particularly
selectivity was based

the

which

now,

period ahead

and hence

have

fared

ties,

disaster

the

beneficiaries
of
trusts.
The
trend
which
set
in.
ficiaries of trust funds. In this re¬ downward
hardest
hit
were
those
bene¬
shortly after the election continue,
ficiaries of trusts in which the spect, they share the fate of all thus further
reducing the income
other groups of individuals who
trust
deed
required
the
trus¬
on
new investments?
are more or
less dependent on a
tees to invest
only in bonds or
(3)
How
will
postwar conditions
fixed income and are not in a
mortgages.
On the other hand,
and the increased expenditures of
where trustees were permitted to position to demand a higher in¬ states
and municipalities affect the
come to compensate for the con¬
buy
equities
the
beneficiaries
tax-exempt 'market?

years

economic

hand,
equities at the
in anticipation of

those who bought

questions that will confront

end of the
war,
the lifting of controls

bined

tinuing to ignore it

the

On the other

movement in prices of
equities.
materially the income and
The
inflationary
period
has
particularly the purchasing power
thus been detrimental to bene¬
of

followed the last war, and for con-

foreign

few

last

duce

quately garnered from the collec¬
tion
experience of the 12 NewReserve

than in- 1941.

factors

the trade" that information is ade-

York gathers it.

the

the

mount.
Marcus

the

during

continued

Dr.

purchasing
dollar, particularly
paid out during
two. years were
larger

of

to decline and

war,

in the United

in

Federal

tended

the end of the

porters of any country are "slow in

York

since, dividends

time,

States—that is to say, in American
dollars.
To
be
paid in pounds

still
as

slow, cumberoomp.

method

power

have

been

cf

cratic

exempt bonds,

past

problem in this language:
"Obviously,
every
American

———

tent the decline in the

years

the

Ward

ations;<S>

g

which

nated

Wilbert

d 11

o

including tax-

America,; Score." He outlined the exporters'

some

*

have been extremely difficult ones for trust officers. The
steady
prices of commodities and of the cost of
living has cut the purchasing power of the
almost in half as
compared with the prewar period. Interest rates on high-grade

In the Minutes of the
meeting of the Foreign Credit Interchange
Bureau of Jan. 5,1 notice quotation of a letter from the
Federal,Reserve
Board announcing that a committee has been
appointed to explore
the possibility of extending the
reports on export bills and letters of
;
credit in Latin ?
t——-—"
r-

been

on

The last few years

rise in

tries, and thus aiding in restoring normal trade relationships.

have

for

fairly steady, main pr>blem of trust investment officer is in
selecting secusafe return. Says there is no
adequate hedge against inflation in purchas¬

in present stock prices opp >rtunities for
selecting high-grade equities offering
prospects of steady return.

sees

credit and "dollar

shortage" conditions in foreign
countries, and contends International Monetary Fund is derelict
; in not furnishing this information as required by its charter. Sees
expansion of central banking abroad as contribution toward releas¬
ing information of balance of payments position in various coun¬

;

by placing emphasis

ing of equities, but

con¬

money rates

immediate future will remain

Credit

g.

berg

SECRETARY AND ASS'T TREASURER

february

7,

1949

I

8

COMMERCIAL

THE

(660)

CHRONICLE

FINANCIAL

&

Metal Consuming Industries
And Steel Consumption

Dealer-Broker Investment

Recommendations and Literature

By K. W. TIBBITTS*

It is understood that the

Vice-President, National Credit Office

Atomic Energy—Circular—Kerr
&

demand has
material situation.

position of metal using industries and concludes, wi h exception of auto industry, pent-up

accumulating. S :es general easing

are

of tight

up

raw

firms mentioned will be pleased

interested parties

send

to

Pointing out steel industry output in 1948 was absve all previous records, except 1944, Mr. Tibbitts
disputes President Truman's statement additional steel making facilities are needed. Contends addi¬
tional raw materials are not available for increased capacity beyond that planned for 1949. Analyzes
already been met and inventories

Thursday, February 10, 1949

Co., 704 South Spring
Angeles 14, Calif.

Street,

full

of the processes by which steel is manufactured is necessary for a

understanding of the issues which presently confront the steel mills. The industry records
its production in terms of pig iron and ingot steel. Pig iron is the product of a blast furnace,
which
b

might

roughly
steel

as

Needed?

a

pipe,

lined with

Of far

re¬

to the

fractory mate¬
rial, 100 feet

high,

and

28

to

in

industry today, is the sug¬

It is not
our
purpose tonight to endeavor
to resolve that argument.
It can¬
be

not

coke,

limestone.

have to rest

Through

tive

bottom

is

and

a

far

exhaus¬

more

has

so

very

high

It is

lost

as

the

sobering thought,

a

Metal

The

Using Industries
of

balance

the

of

the

amount

brief review

a

industries

several

the most

are

discussion

our

will be devoted to

which

important because of
of steel

and

its capacity as the above produc¬

cant to bear in mind that in

industries

these

molten iron

with 1945.

commercially

in

demand.

There is

relatively limited use in
the
peacetime economy for the
Of importance to our discussion
heavy plate required for military
is the huge bulk of material in¬
purposes.
Furnaces worn out by
volved in this process. Seven and four
years of constant wartime op¬
one-half tons of these ingredients
eration, had to be rebuilt.
Fur¬
are required
to produce one ton ther, the construction of facili¬
of pig iron. When an installation i ties
capable of producing 10 milincludes
several
furnaces, each! lion tons of additional steel, as
capable
of
producing
1,200 or j suggested
by
the
government,
1,300 tons of iron a day, there would, in itself, have contributed

production
civilian

none

there any

was

of
consequence
for
during the four years
with 1942 and ending

handled

each

area

24

in

confined

a

hours

much

as

50,000 tons of material.

steel

for

mills and blast furnaces

are

them¬

con¬

fur¬

tonnage would have had to be di¬

today approaches $15,000,000.

verted from commercial channels.

of

one

cilities

in

where

steel

making furnaces

further

burned

out.

impurities

Carbon

then

re¬

are

other al¬

or

added,

depending
the analysis of steel desired.

are

Further,

available, it is doubt¬

there

enough

though these fa¬

even

were

if

would

have

material.

raw

It

been

was pre¬

viously stated that ingot steel is
made of equal parts of pig iron
and

Millions

metals.

scrap

tons of scrap

have

ingot moulds.

yond recovery

been

of

that otherwise would

The molten metal is then cast into

available
as

a

lost

are

be¬

result of the

resulting ingots are sub¬
jected to further finishing opera¬
tions to meet the widely varied

war—battleships lying on the bot'om of the ocean for example. The
scrap
drive throughout the war

requirements

cleaned out the nation's cellars of

The

They
which

of

be

may

the

customer.

into

rolled

bars

hammered into shape in

are

their accumulation of

mobiles,

cUop forges—the mechanization of

machines

the blacksmith's

have

They

and hammer.

be reduced to rod from

may

which

wire

which

bolts,

nails

arm

is

drawn

nuts,

from

or

screws

and

fashioned.

Rolling mills
squash the ingot into thin sheets,
of varying thickness and widths,
rolling out these sheets at the in¬
are

credible

speed

of

then

stamped

such

as

pans,

miles

70

Innumerable

hour.

from

items

these

per
are

sheets,

automobile

bodies, cake
refrigerator cabinets.

or

Even this very

is

enough

brief description
suggest the multi¬

to

plicity of sizes, shapes, and varie¬
ties of
caTled

steel
upon

which

the

to make

mills

in

satisfy the demands of their
tomers

who

number

of

produce

parts

are

order

to

cus¬

infinite

an

finished

and

products.

Production
previous

in

records

1948

broke

except

for

all
the

peak

war
year of
1944.
There
last year poured by the 240
blast furnaces 60.7 million tons of

were

pig iron and 88.5 million tons of
steel ingot. The latter represented
an

increase

of

3.7

million

tons

1947 and compared with 61.7
million tons in 1929.
over

*An address

by Mr. Tibbitts be¬

fore the New York Chapter of the
National Institute of

York

Credit, New
City, Jan. 25, 1949.




junk. Auto¬

refrigerators,
washing
which by now: would

reached

the:scrap pile are
use, because of previous
shortages and high cost of re¬
placements.
"till

in

aircraft industry uses rela¬

The

for

accounts

for

assume

further

the purpose

discussion

that

it

and some of the other non-ferrous

metals.

The

a

program.

•

facilties

be

large

were

scale expansion

Where should the
constructed?

new

Gradu¬

ally the high-grade iron ores are
being consumed. At some time in
he future the

principal

source

of

supply

may shift from the Lake
Superior region to other localities,

such

Labrador

as

ica.

or

Traditionally,

facilities

have

reference

to

South Amer¬

steel

been

making

located

in

the

availability of
raw
materials.
If, in the not too
distant future, the industry were
to depend upon the newly dis¬
covered deposits of ore in Labra¬
dor. blast furnaces perhaps should
be located

if

that

near

the

St. Lawrence,

eventually is
If not, perhaps on the

waterway

opened up.
Eastern

the

Seaboard, or perhaps in
Gulf of Mexico area, to take

advantage of the South American
supplies.
The elimination of the
basing point system of pricing also
might well influence the decision.
In
o

the

more

carry-back
recoveries.
The industry's work¬
ing caiptal in this two-year period
declined $166 million. The explan¬
million,

$45

ation

meantime, expansion on

moderate scale does

the

after

the

of

tax

substantial

1946

dollar

entire industry

lion,

as

contrasted

losses

volume

was

In 1949,

four

on

of

is
for

with $51/2

bil¬

lion in the

preceding year. The mag¬
nitude of its reconversion problem

/

.

airlines

the

led

cancellations for

to

new

Graphic Stocks—Special edition
containing
monthly
highs
and
lows and yearly earnings and div¬
idends
during period 1924-1935,
and 744 charts covering virtually
every
stock listed on the New
York Stock and Curb Exchanges
—F.
W.
Stephens,
15
William
Street, New York 5, N. Y.—$15.00.
Stocks

Insurance

Analysis

—

—

&

White

Finally, ef¬
forts to diversify activities so as to
lessen dependence upon aircraft
business were, in the main, unsuc¬

ing additional losses.

con¬

as

Bonds

Corporate

Issued

Securities Corporation, 65

York

Banks

There

are

renegotiation, possibilities of ter¬
mination, - and
interruptions
in
production
because
of frequent
design changes.,
The

manufacturers

of

personal
aircraft since the war have passed
through a complete cycle.- In the
four years immediately preceding
the war, total production was ap¬
proximately 25,000 planes. Capa¬
city of these plants was-so vastly
increased during the war, that in

capacity for 2,750,-

(Continued

on page

29)

York

Central—Analysis of

Bonds—Goodbody

& Co.,
Broadway, New York 6, N. Y.

W.

brief data

are

Creole

Dry,

Dodge,

Du

Pont,

Eastern

General Motors,
Manville, Mid Continent

JohnsPetro¬

New York, New Haven

Hartford, Shell Union Oil, and

Warren

Bros.

Northern Pacific Railway

N. Y.

Also

31, 1948 on leading New York City
banks and trust companies—New

mation

Hanseatic

as

Corporation,

downs

of

folios

and

come

1948

Bank

Stocks

government bond port¬
sources
of growth in¬
New York

19

on

infor¬

brief

a

j

\

County, Fla.—New is¬

Pinellas

Banks—Break¬

City

is

Chicago, Burlington &

on

Quincy.

sue

York

available

120

Broadway, New York 5, N. Y.
New

Com¬

V

of Dec.

of

revenue

Allen

&

bonds—Circular—

Company,

30

Broad

Street, New York 4, N. Y.
Service Company

Public

City

Detailed

of In¬

Laird, Bissell &
Meeds, 120 Broadway, New York

diana,

5, N. Y.

Street, San Francisco 4, Calif.

—

Stocks—Discussion

value

of

—Daniel

early 1940's
and Company,

Rice

F.

Inc.

—

Strawbridge & Clothier—Mem¬
orandum—H. M. Byllesby
Stock

—

Circular

—

Parker' & Redpath,
Wall Street, New York 5, N. Y.

Also available is

a

memoradum

Stove and U.

Florence

on

S.

delphia 2, Pa.
Also
on

available

John

B.

D.

Bonhright

B.

Home Products—Dis¬

Aviation—Circular—A.

Kidder

New York

&

Co., 1 Wall Street,
5, N. Y.

available

is

a

—Newburger,
Broad

Loeb

Faroll
ork
a

Co.

&
6.

15

a

list of Public

Utility

dividend-paying

stocks.

VV

common
••

'>

'

Company—Anal¬

United Carbon

of

—

Y.

Circular

on

Also

Bit

Company,

Humble Oil & Refining Company,
and Houston Oil

Company, andt a
study of Public Service Company
of Colorado.

United
curities

1949

—

States

and

of

15,

Se¬

Money Market—
and

1948

outlook

for

Bankers

Trust

16 Wall Street,
N. Y. / .";

New

Brochure

Company,
York

Government

the

—

Victor

Fuel

vCo.

—

Descriptive

Birkins Com¬
40 Exchange r Place, Nfew
5, N. Y.
,<
/
f
:

literature—George
—

Joseph

available

Stocks with

mendations for

brief analyses

are

Roller

Reed

i.

Co., 29 Broadway, New
N.

circular

Co.,

&

Street, New York 5, N. Y.

memoran¬

Pacific Lighting Corp.

Budd

Co.,

&

Powers Building, Rochester, N. Y:
United Aircraft Corp.—Analysis

Review
Bendix

on

Warner

Carlson—Circular—

Stromberg

George

Also available

dum

and

ysis—Eastman, Dillon & Co., 15
Broad Street, New York 5, N. Y.

American

•Also

memoranda

are

Stetson

Company.

Foil

company.

M.

& Co.,

Exchange Building, Phila^

Also available is

Chicle

American

Auchincloss,

memoran¬

dum—Elworthy & Co., Ill Sutter

of

ct^ks todav with the

52

on

Petroleum,

&
Co., 14 Wall Street, New York 5,

Cos.

and '

however, for this industry is par¬
ticularly vulnerable in respect of

Power

&

...

Also available

F.

analysis of

an

Light

pany—Analysis—Simith, Barney

Trust

&

—Comparative figures

profitwise.
problems to be faced,
;•

115

Broad¬

New York 6, N. Y.

York

—

1948—Tabulation—Union

During

1949

saleswise

New

Junior

&

New

what

both

.

leum Co.,

cussion
of
growth
situation —
position. .Working Bache & Co., 36 Wall
Street, New
capital
today
is
approximately York
5, N. Y.
$450 million, compared with only
Also available from the Chrys¬
$64 million in 1939. Industry sales ler
Building office of the firm is
in 1948 were approximately $1 bil¬
an. up-to-date
circular of "News
lion. In the absence of large scale
and Views."
cancellations by the government,

should do well in the current year

Co.

Missouri.

sheet

production should be some¬
larger. The industry is do¬
ing a great deal of sub-contracting
within itself, so that practically
all
of
the
15
major producers

Arizona

Airlines,

Despite these losses, the industry
a whole is in a very favorable

balance

Also available is
Central

.

Analysis

—

C6V 111 Broadway,
5, N. Y.

New York

Company, Mississippi
Valley Trust Building, St. Louis 1,

some

caus¬

Prod¬

Haupt &

Canada

substantial

planes,,

Cellucotton

Utilities

Missouri

4* wall Street, New York 5, N. Y.
obvious.
Secondly, unusually
heavy engineering expenses were
Western Canada Oil Industryincurred
in
the
design of new
commercial
planes.
Third, addi¬ Data—Charles King & Co., 61
tional losses were experienced in
Brhadway, New York 6, N. Y.
*
*
•
•
the commercial plane program for,
to satisfy the pent-up demand:of,
Amalgamated Sugar Company
the airlines for new planes, short-' —New analysis—Edward L. Bur¬
cuts were taken which proved to ton & Company, H50 South Main
be very costly. The deterioration
jueet, Salt Lake City 1, Utah.

of

New

Broadway,

Co.—Analysis—William
A.
& Co., 209 South La Salle
Street, Chicago 4, 111.
'
;

/

.

,

is

in the financial condition of

115

Fuller

Ira

$710 mil¬

'

tinue.

of

manufacturers

military and commercial planes in
1946 and 1947 sustained losses of

of

advisable to initiate at the present
moment

substantial
consumption,

very

aluminum,

of

part

a

Co.,

International

Banks—Data

largest banks—Rauscher, Pierce &
Co.,
Mercantile Bank Building,

New

tively small amounts of steel, but

&

York 6, N. Y.

New

cessful.

Where Locate the Facilities?

But

Street,

Aircraft Industry

fourfold.

ful

This mixture is

scrap.

Substantial

selves made of steel.

steel

heated

upon

shortage,

The

cost

Pig iron is converted into steel
by adding to it equal amounts of

loys

steel

blast

struction
nace

as

the

to

Broad

ton

-

Dallas, Texas.

way,

off from the bottom of the burner.

be

of Dec.

Dow Chemical Company—Ana¬
lytical memorandum—J. R. Willis-

ucts

use

beginning

as

non-fer¬

metals which they consume.
considering them, it is signifi¬

In

of

must

25

N. Y.

Dallas

con¬

result of the coal strike.

a

temperatures reduces the ore to. tion
figures testify. When the war
metallic iron, melts it, and purifies
closed, many mills had to
be
it as the limestone combines with
changed to produce the types of
the impurities in the
ore.
The steel

periodically is drawn

through

new

furthermore, that production
equal to more than one-half df the
new
capacity added in 1948 was

,

First, the industry has increased

resulting cOmoustion at

facilities.

Curtis.

&

York 4,

rous

conclusion.

K-W. Tibbitts

heated air. The

of

facilities, or the
improvement of existing

further

would

far been
Several facts will, perhaps,
you
to reach your own

enable

super-

on

study than

made.

blown cleaned

struction

37 renresentative banks

31, 1948—Paine, Webber, Jackson

ingot will be

disputed, however, that a

fully supportable decision

the

either

added,

than casual interest

cilities may be needed.

diameter. Into
the
top
is
charged " iron
ore,

more

gestion in the President's State of
cne
Union Message to the effect
mat additional steel making fa¬

up

feet

000 additional tons of

Steel Capacity

Is Greater

described

e

Buckley* Brothers, 1420 Walnut
Street, Philadelphia 2, Pa.
?
;

Los

Banks—Comparative analysis of

Some knowledge

the following literature'.

pany,

York

is

recom¬

Zonolite

1949.

Company

—

Detailed

Strauss
&
Co.,
Trade Building, Chicago

report—Robert
Board of

Commonwealth

&

S outhern

Corp.—Circular—Hirsch & Co., 25
Broad Street, New York 4, N. Y.
Walt Disney Productions—Re¬
cent

analytical

circular

—

Gross,

& Co., 458 South Spring
Street, Los Angeles 13, Calif.
)

4, ill.;/

\

1

r-:

;

With Thomas Darst & Co.
;

Rogers

(Special

to

The-Financial

Strange

has

Chronicle)

'

C.—Robert
become associated

WILMINGTON,

N.

with Thomas Darst & Co., South¬
Coral Gables, Fla. Tax Partici¬
pation Notes — Memorandum —

eastern
N

C

Building, Greensboro,
••

Volume

COMMERCIAL

THE

Number 4776

169

savings.

These

are

with lower taxes.

possible only

uncertain.

,':'i

They fear

/.

.

:V

.

studies indicate that
future income will be quite ade¬
quate to absorb increased produc¬
Projected

tion

By ROGER W. BABSON

.

Mr.

Babson, pointing: out ma¬
chines make jobs in addition to
doing 95% of
stiH

work, asserts
increased productivity

more

our

will be adequate to absorb

more

venture capital.

our

consumer

ter

than

in¬

Says

hesitate?

could be invested in next decade

continued

Holds

"is up to

business

good

vocated

Venture
away.

In the last 75 years our

and

more

times

as

did

then.

they
Abe

was

about

79%

of

our

was

supplied

animals,
by h

6%
h

m e c

Roger W. Babson

only
animals and

us

The

TN 1948—the 90th

President

basic

Atlantic Securities Co.

Let

Truman

economic

fact.

John

Joins Dean Witter Staff
LOS
C.

Hoge has formed Atlantic

Securities
Madison

ANGELES, CALIF.—Fred

Co.

with

offices at

anniversary

all

evil

year

of

our

That's

business

the industries and the

in the investment busi¬

ness.

The company

important to the present and future stability of the

public of the United States,

1940—nearl y

twice

as

is

old

as

a

Stockholders Benefit

much.

Thus

39% of earnings.

was

good soil, create enlarged
in each dollar of sales
or

or

$2% million in divi¬

48% of earnings. For 1948 tliey received

plowed-back earnings, like good fertilizer

Higher Payrolls

Payrolls in 1918 amounted to $66 million

(

For 1940 stockholders received

dends—about

$6 million which

lion in 1940

child in it.

country and to every man, woman and

profit of $15million. Both
sales and profits were the highest in our history.
The average J-M employee received about $3,300 in
1948 as compared'with about $1,700 in pre-war year
made

why adequate profits—the cake of yeast
make a capitalistic loaf of bread—are so

necessary lo

Canada and other countries.

on

of new jobs for new
generations of workers, more goods for industry and
the public and more dividends for stockholders.

38

compared with $20J^ mil¬

The key to

crops

32cents.

results:

hours,

shorter work¬

take-home

more

Taxes

our

pay,

S9000 New Jobs
We had 8,000

In 1940 Jolms-Manville's taxes were

employees in 1948 than in 1940

more

bringing total employment to 20,000
American

capitalism made these

men

new

and

1948

In

they

$4% million.

$12% million.

were

women.

jobs possible.

J-M~s Annual Statement

standard-of-living that has

Joe Stalin scared to death.

Capital investment Doubled
Conditions
In

Favoring

tures—plants, animals,

humans

or

since 1940 is due

and develop fully,
the right environment

prosper

they need
the

and

America
somed

right

food.

Industrial

burst into bud and blos¬

forth

in

the

because it had

last

have

abundant

political

environment

has

the

harness

the

which

been

and

put

a

encouraged
This combined sys¬
and

mechanical

and

money

made

capital

to

energy
men

to

to

work.

Don't blame the next depression
machines.
Blame it on men.

payroll and profits

capital invested.

$50 million

on new

the last

ten years we

in the business.

more

than

plants and other expansion

pro¬

have doubled

Our

our

measures.

In

capital invested

capacity to produce has been

machines
are
working all
right. All they need is a constant
tuning up in keeping with the
times.
But both the mten owning
and
those
operating these ma¬
chines must constantly work for
the

good nf the world

and not for any one

a

whole

selfish

group.

as

This

capital

came

There

£

is

as

great

a

was

when

I

was

a

there,

over

the

We

need

to

put

another

bring

our

housing

from

money

borrowed from insurance

program

.ily

use

many

We

up

could

insurance

billions for streets

ly

need, therefore, for increased

a

There is certain¬




EARNINGS AFTER TAXES
share of

.

..

$

were

were

million

$5.22 per

stock.

common

common

equivalent to $4.35

per

share

stock.
•

•

We in Johns-Manville
service

We

Necessary

are

Profits in 1948 amounted
of sales. In 1940.

they

to

pledge

the

•

to

were

8?fo

9]/%

cents in

cents in

each dollar

are

public during

our every

the needs of

our

stockholders.

proud of

our

90

effort to continue

customers, our

our

years

record of

in business.

to

be alert

employees and

"

to

our
.

:

each dollar

of sales.
Profits

provide dividends. Dividends help create

well

plants and equipment produce

as more

new

jobs

Chairman

of the Board

as

Johns-Manville

goods.

Corporation

In 1948 Johns-Manville invested about three-fifths
of its

profits to

produce

create more

more

jobs in the

*Those

company

and

goods needed by industry and the

public.

let
tve

desiring

more

complete in formation should refer to"a book¬

containing the formal Annual Report to Stockholders which
will be

glqd to furnish

on request.

Address: Johns-Manville

Corporation, 22 East 40tli Street, New York 16, N. Y.

to

highways.

6

into the business.

Profits

million

policies), and in part from profits put hack

eas-

and

$ 66

$ 12% million

9}^ million

com¬

■IQHMS-M.vvvmi

decent standards.

wages....

for taxes

panies (representing savings of the people invested in

to

ization.

shown below).. $ 7934 million

Reinvested in the business........

TAXES

next decade in industrial modern¬

$50 billion into housing in order to

$173^ million
as

To stockholders in dividends......... $

of

boy. We could

icadily invest $50 billion

1948**

employees for salaries &

savings in Johns-Manville; in part from depreciation;

vested in

as

(except

To government

in part

need

capital investment today

To

holders from all walks of life who have invested their

savings. Savings and industry's profit dollars rein¬

for

For all costs

in part from the 11,800 stock¬

Needed

Increased Productivity

highlights of Johns-Manvillc's annual

for the year

greatly increased.

on

The

the

are

statement

TOTAL INCOME

Day, Johns-Manville has spent

jects, improvements and cost reduction

re¬

economic

venture

Since V-J

so

have had that

has

encouraged

possible

but

we

which

taking.

tem

we

has lacked

ligious,

years

Surely,

resources;

has Russia. What
Russia

100

the right food and

the right environment.

risk

Much of the difference in sales,

order for any of God's crea¬

—to

Here

Growth

m
pitouucr <

699

Avenue, New York City,

to engage

Haupt is with Dean Witter &

Co., 632 South Spring Street.

—Johns-Manville sold $173J^> million of goods lo

by
machine

vacations with pay, social security,
a

this

death.

to

Clement, Curtis & Co.

grandpa's six-shooter

as

atomic age.

tion.

that

hope

realizes

it

with

At Johns-Manville

work for us!

our

of

taxing

was

This

encouraging venture capi¬

tal—not

to Truman

growth.

were formerly
associated Jr., and William O. Gay, Jr.
Floyd D. Cerf Co. Mr. Cooper

with

2%

standard-of-living
is
in¬
creased
character, intelligence and
productivity through mechaniza¬

and

means

the proper en¬

its

for

Kornak

ical

Today
3% is

high

ing

need to create

thought that mechanization
root

our

ing formed with offices at 120 So. of the New York Stock
Exchange,
La
Salle
Street.
Officers
are
Henry Herrman & Co., 52 William
Floyd D. Cerf., Jr., President and Street, New York
City, will be¬
Treasurer; Lester R. Cooper, Vice- come members of the Exchange on
President; and Charlotte E. Kor- March
1.
Other
partners
are
nak, Secretary. Mr. Cerf and Miss. Henry
Herrman, William M. Cahn,

Profits Produce Jobs and Goods

cents

the

an

the

by

a n

means.

Whereas,

by
15%

u m a n s,

and

in

,

a

boy,

produc tive

The

rising and

down. If

*

four
much

as

energy

is

we

v e.

goods

When,

fashined

sufficient

construction

new

costs to go

vironment

they

Lincoln

does 95% of

keep

cause-

more

Today
produce

humans.

to

business

To Be NYSE Members

With the admission to
CHICAGO, ILL.—Floyd D. Cerf,
partner¬
Jr., Company, Incorporated, is be¬ ship of C. Fred Richards, member

workers

produc t i

by

the

great America is to forge ahead,

capital is being seared

ble.

supplied

and

wages

Form Own Inv. Co.

kill

"machines

because

become

to

The outlook for profits is

jobs." Without machines, our un¬
rivalled living standards in this
country would be totally impossi¬

have

,

into

funds

resources

,

fair

Only

Henry Herrman & Co.

soul, ad¬
spinning

the

to

return

a

wheel

•

taxes,

9

Floyd D. Cerf, Jr., to

Truman."

Ghandi, rest his

Mr.

The

production

and current production

Why, therefore, do we

Good Business up

modernization.

industrial

there.

retard

profits, is it possible to plow

back

after

1929's—or,

fair

fair

By 1950-55,

market will be bet¬

double

goods and ser/ices.
are

to

(661)

timid.

are

unemployment.

cause

with

savings, about $115 to
$120 biRion left to s>;?:id. The
money
is, therefore, there for

production
schedules.
$50 billion more ^capital

for

and

CHRONICLE

unfair deal by Con¬

an

contributes

and

creased

Investors

In

order, there¬
fore, to increase our production
capacity, we need considerably

taxes

future income

is needed and that
:

schedules.

FINANCIAL

Spotty capital investment

gress.

.

&

10

COMMERCIAL

THE

(662)

Government's

&

CHRONICLE

FINANCIAL

Thursday, February 10, 1949

Merchandising Your Dollars

Obligations to Business

By JULES BLECHER

By HON. CHARLES SAWYER*

policies to develop teamwork between government and business

Commerce Secretary says

,

Partner, Neuberger & Berman, Members New York

Secretary of Commerce

;Y

based

on

for keenest

Stock Exchange

purchasing securities is business venture calling'

judgment, greatest vigilance and flexibility of action.

Says mistakes should constantly be appraised and securities experts

(3) government should enforce

should be consulted/

play in business; and (4) government should bring business in councils of government on

rules of fair
y

are

business; (2) government should

should be taken

care of by
undertake to do that which business cannot and does not care to do;

propositions: (1) economic needs of nation

Writer points out

policies that affect welfare of the economy. Cites operation of Federal Barge Line as aid to business/
and denies it has hindered private barge operation. Explains steel allocation and export controls.

It is

a

well recognized fact

executives

who

know

that out of

how to

hundred businessmen and

a

make money there are perhaps 10%
same shrewd "know-how". Men

who know how to invest it with the

the Federal Government formulate policies for guiding the country

When officials of
r

through these difficult times, they must visualize the great expanse of land and the millions
of people in America. The policies of the government are not made in a vacuum; they are
in

made
t i

the
the

of

businessmen,
farmers,

activities that

certain

iness

cannot

ness

undertake

does

or

not

busi¬

care

Kansas City Missouri

portation

to

chartered
neers.

wives, and the

fair

tions

children in all

can

parts of the
country. In
the councils of

and with no Undue

the workers,

house¬

g

overnment
hears

one

a

deal

great

the

about

"grassroots"—

Line

was

River Trans¬
taken over.

Two towboats and 20

itself.

(3) Government owes it to bus¬
iness—big business and small bus¬
iness—to enforce certain rules of

the

the

from

With

the

this

barges were
Army

small

Engi¬

fleet

the

Federal Barge Line began opera¬

play so that all businessmen
compete on the same basis

In

on

the

Sept. 28, 1918.
first year of

operation,

100,594 tons of freight were trans¬
ported.
Soon the increasing de¬

handicaps.

Sawyer

cial who

it.

uses

about

the

needs

and

To

me

to mind the vast and

of the
In

(4) Government owes it to bus¬
mand for service resulted in the
to bring business into the
construction of six large twinof government
and to
screw
steamboats of 1,800 horse¬
work openly with business in the
each,
and
40
2,000-ton
development of policies that af¬ power
During
the
first
few
fect the welfare of the economy. barges.
months the Barge
Line
carried
These
are
simple
principles.
councils

is

fertile
the

real

very

heartland

and

these

sense

Here

the

this

In

grain
your

to all

parts of the country and to
And through the same

factories

products

flow

back

of America's
people

to the

who produce the food, the

cotton,
fuel, and countless other prod¬
ucts of your area that form the
the

blood and

tissue of

As Secretary

particularly
needs

our

economy.

of Commerce I am

concerned

with
I

businessmen.

of

the

know

something about business myself,
and I have lived and done busi¬
ness

on

the

banks

of

the

me

as

the

I refer to

future.

assembled and shipped

the

the

in

in

are

yards

Commerce.

a
problem
practically as

you

of the Federal Barge

rail¬

great

Basin and

Ohio.

that

with

start

of

farms

the world.

me

affects

businessmen

this is the

the meat and
produced
on

yards
cotton

Let

that

of America have
freight yards.
In

largest

and

area

greatest expanse
well-watered soil

systems

their

fruitful

America.

of

the

world.

road

brings

Mississippi Basin.

a

Basin

it

a

ago

year

I have reflected at

for the good

tried

to

of the nation. I have
develop a philosophy of

teamwork

between

business

and

government. As I
said a few
in speaking before the

weeks ago

National

turers,

Association of Manufac¬

teamwork

requires

re¬

carried oartly bv water

was

and partly by rail. The line was
Mississippi carrying a wide variety of goods,
Secretary of mostly in carload lots.
the problem
During the early years of its
Line and its existence, the Barge Line rapidly

'extended its routes and added to its

background for my' discus¬ equipment. Freight of all kinds was
being Carried on the Mississippi

As

sion I want to sketch briefly the

New

between

history of the Barge Line;

Orleans

St.

and

before the start

was

used for fuel

ships.

ered seven acres.

The picturesque days of the

old

river boats had long since passed.
River transportation for passen¬

general merchandise had
replaced by the railroads,

gers and

been

and

the

rivers

were

used

almost

Louis, and
from

a

route

was

and,

sacrifice,

above

line

continued

in

existence until

(1) Government owes it to bus¬ the end of the first World War.
iness to remember that most of
'The first effective move to re¬
the) country's
economic
needs
store an all-around freight ser¬
should be taken care of by busi¬
vice
on
the
Mississippi system
ness, and that business should be
came
during
the, first
World
given the greatest possible free¬
War. The nation's railroads were
dom in meeting these needs.
clogged with the heavy wartime
(2) Government owes it to bus¬ traffic, and people looked to the
iness
to
make
certain services long-neglected waterways of the
available to all business and to
Mississippi Basin as a way to re¬
undertake for the good of all bus- lieve the
pressure. Under the di¬
,

rection
*An address by

of

the

Railroad Adminis¬

Secretary Saw¬ tration, a Federal Barge Line was
yer
at Annual Banquet of the organized. Boats and barges were
.Mississippi Valley Association, St. acquired wherever they could be
found.
The
equipment of
the
Louis, Mo., Feb. 7, 1949.




doctors, lawyers, teachers, etc., have
protection
and
conservation
of
principal amount that makes for
the success of your fund. The se:urity priced at 50 paying a 4%

even

more

fully
in

woe¬

lacking

the

funda-

dividend

mentals

.wo

which

would

ber

enable

them

to

succeed

investors.
In

ing

a

alize

must

re¬

that

you

177, 181 and 177 respectively, but

up

1 i

s

t i

coal
much
Jules Blecher

in

of

"merchandising

c

mands

that

tion

has at his command.

one

The oft-repeated bromide,

"I put
them away and forget them, as
long as - they pay me dividends"
has proved to be a snare and a
delusion in the security markets.
It is probably the

main reason for
losses and for most of the

most

Jones

nine-foot channel

now

links such

the

Twin .Cities,
.

Peoria,

Galves¬

Birmingham, Mobile, Louis¬
ville,
Memphis, Knoxville,
and
Dubuque.
In a few years the
ton,

to

the

Dow-

you

can

realis¬

related

Averages,

the'difference
cessful
vestor.

between

the

sue-*

investor and the poor in¬

There are, of course,

ex¬

ceptions. For instance, a well se¬
lected security may go lower in a

for

more

or

less transient reasons

(usually

emotional).

stubborn

trait

in

an

The

most

investor

The shrewd
loss

On

merchant who

some

of

his

has

a

merchandise

will not buy the same thing just
because he can buy it cheaper.
,

Candidly appraising .your
City, Omaha and Sioux City— mistakes and handling them cour¬
this network. ageously enables you to still re¬
Improvement of the river chan¬ tain a major percentage of your
nels by the Federal Government
equity and maintain a "going busi¬

will become part of

resulted

in

a

tremendous

1920. -25

-

million

(Continued

tons

were

on page

31)

In

han-

much.

as

percentage depending
factors. Being fully
should

be

than

the

rather

the

excep¬

This

rule.

permits a calmer and colder ap¬
praisal of news that causes mar¬
kets

to

appreciably

change

and

tends to check the emotional

people who hold

action

of

stocks

than

re¬

more

they

can or should
Attempting to
quickly only means
taking greater risks and usually
this is done with little study of
the securities in question.
Con¬
servative growth of principal can
best be attained by buying good
securities as a result of thorough
analyses combined with the cor¬
rect timing of price cycles.
This
calls for experience, judgment and

comfortably

carry.

make money

to determine when cer¬
securities
are
underpriced

courage

tain

with relation to the market level.

conclusion

In

it

would

appear

the important thing for the

that

average investor to do is to ask
himself the following fundamental

question: "How well equipped
I

am

to

compete with the expert in
security world which is as
competitive as any business to
make my principal amount in¬

the

crease?" For those who have
their

net

them

with

figures
their

should

tried,

furnish

immediate

an¬

swer.

"The main point with me," said
Cyrus H. K. Curtis, founder of the
Curtis

Publishing Company, "has
always been to get somebody who
could do a job better than I could
do it myself."

William Rice to Be

Davies Mejia Partner
SAN

Davies

FRANCISCO,
&

Mejia,

members

of

the

San

Francisco

will

admit

CALIF.—

Building,

Russ
New

Stock

William

York

and

Exchanges/
R.

Rice

to

ness."

just
is

Staying with
because it pays

a
a

surely not the correct

for income is

secondary.

March 1.

Mr. Rice has been asso¬
,

ciated with the firm for some time.

is

brought out in his attempt to aver-»
age his original mistake—with the
final result an overwhelming loss.

sas

growth of the barge industry.

about

cycle of prices tending downward;
general partnership and Gertrude
but the danger of large loss is in¬
Y. Rice to limited partnership on
curred where a stock, is purchased

cities in the Missouri Basin—Kan¬

has

declined

auto

is most

reserve, the
on
various

keenest

1924, as a result of demands
tically see if you are doing better
from the shipping public/ Con¬
or worse than the rise or fall of
gress passed the Inland Waterways
the market and then, if you are
Corporation Act.
This act gave
doing worse, begin to search for
the Barge Line the
status of a
the defects of your "merchandis¬
corporation and financed it to the
ing
of your money."
extent of $5 million.
Under the
The successful business execu¬
management of the Inland Water¬
tive is the first one to recognize
ways Corporation, the Barge Line
expanded ' its operations steadily. that "the first loss is the best
This steady growth was aided by loss." The decision to take small
the efforts of the government to losses is most important, as they
improve the navigation facilities can so readily become very large
The ability to understand
of the Mississippi system. On the losses.
Ohio, 53 dams and locks were where you have erred in a per¬
built to provide dependable chan¬ centage of security selections is
nels for year-around navigation. very often the basis of handling
The Mississippi River Commission funds
to
best
advantage.
This
show of realism is unquestionably
was created to set up a program

important centers of industry as
Pittsburgh,
St.
Louis, Chicago,
New Orleans, Cincinnati, Houston,

(glass)

secu¬

as

containers

e v er a g e s,

judgment,
committed
greatest vigilance and flexibility
the

for

account

of the traffic.

b

other

such

groups

important to have a
certain proportion of cash relative
to the value of your holdings in

and

In

in

trucks,
It

money" to be successful in
kind of business and thai

calls

while

50%

as

rities

money" that is entailed in any
other
enterprise.
"Money must
any

securities in groups such as
oil, television, advanced as

many

venture which calls for the same

earn

Dow-Jones Industrial

showed the

business

re a

of

any num¬

Averages closing at approximately

yourself
a

and

portfolio

setting

are

fluctuation

a

per year

purchas¬

of securi ties
you

means

points

of stocks selling at about this
price level can change that num¬
ber of points in- a few days.
The years 1946, 1947 and 1948

as

established

New Orleans to Mobile

understanding, exclusively for the movement of
all, active and, en¬ bulk goods in fleets' of barges.
thusiastic participation in a com¬ A few farsighted businessmen be¬
mon and
important effort. I shall came concerned over' the failure
continue to talk about this rela¬ to use the natural advantages of
tionship—because nothing is more the water highways for transport¬
important to the welfare of this ing general merchandise. In 1905
for improving the channel in the
country than the building of a a group of businessmen in the
lower Mississippi. As a result of
sound
and
sympathetic under¬ Missouri Valley formed the Kan¬
this
Commission's findings,
ex¬
standing
between
business and sas City-Missouri River Transpor¬
tensive
work was done to straight¬
tation Line, and built towboats
government.
en the channel and strengthen the
and barges to carry freight from
banks.
Kansas
Mutual Obligations
City to St. Louis.
This
In the last 20 years the devel¬
Business and government have organization worked against tre¬
mutual obligations—what are the mendous odds in trying to operate opment of the navigation facilities
a river freight system on the wild
in the Mississippi Basin has pro¬
obligations of government to bus¬
and unimproved Missouri, but the ceeded
steadily.
A
dependable
iness?
I can mention a few:
straint,

as

pathetic-looking lists of securities.
Economic and political changes
are too important to be neglected
Birmingham.
By
1924
the
tonnage
ways of the Mississippi system had
in their application to securities,
bebn used chiefly for the trans¬ carried by the Line had increased
so that reappraisal is constantly in
to 1,071,000 tons.
A comprehen¬
portation of crude/ oil and coal.
Too few people inventory
sive rate structure had been ar¬ order.
Gredt fleets of coal barges were a
their holdings regularly based on
ranged with connecting railroads
common sight on the Ohio and the
actual
market
quotations.
This
so as to
integrate the barge ser¬
Mississippi. The Federal Govern¬
vice with the transportation sys¬ should be done with relation to a
ment helped to make this traffic
The standard set of security tabula¬
feasible by keeping the channels tem of the entire Midwest.
Federal Barge Line still had no tions such as the Dow-Jones Aver¬
free of snags and by building locks
ages, so as to "chart" your prog¬
and dams where necessary to pro¬ permanent status, however, and
ress
or
retrogression. In other
vide year-around navigation. One was operated only as a branch of
the
the War Department. It could not words, on January 1, with
of
the most profitable
uses
of
Dow-Jones Averages at 177, the
river navigation was the trans¬ do business freely as >a corporate
concern.
Moreover, its fleet was value of your account is X dollars.
portation of coal from the upper
By methodical inventory of your
Ohio to New Orleans, where it still inadequate to meet the de¬
In the 20 years

of the first World War the water¬

by ocean-going
In 1907, for instance, the
length on the relations between steamer Sprague took a tow of 62
government and business, about coal barges from Louisville to
the ways
in which government New Orleans. These barges car¬
and
business can work together ried 70,000 tons of coal and cov¬

Since I went to Washington near¬

ly

professions such

whole
them¬

selves

iness

local freight between
They become meaningful when only
river towns, but soon joint rates
they are applied to concrete situa¬
with
connecting railroads were
tions. Let us test them out against
opinions of the people "at the
established. By the end of its sec¬
a few concrete situations.
grassroots."
This term means
ond year a fourth of the business
something different to every offi¬
of the line consisted
of freight
The Federal Barge Line
Charles

the

shown

rela-^

to

o n

needs

of the various
on

^security
dividend
answer,

It is the

Graham, Parsons & Go.
Admit Three Partners
PHILADELPHIA, PA.—Graham,
&
Co,
1421
Chestnut
Street, members of the New York
Stock Exchange, will admit Dud¬
ley
H.
Bradlee II, Clayton F.
Banks, Jr., and Charles P. White
to
partnership on Feb. ,17.
Mr.
Banks in the past was with C. C.
Collings & Co. Mr. Bradlee and
Parsons

Mr.

White

Boston

Square.

are

office,

associated with the

10

Post

Office

Volume

169

Number 4776

THE

Attacks On British

COMMERCIAL

Austerity

Pierpont V. Davis. President of

both by its Right-wing opponents and'its Left-wing supporters.
on luxury imports, and foresees
persistent demands by British labor unions for higher wages

Harriman

Points to criticism of British ban
more

/

nounces

Ripley & Co., Inc., an¬
Edward C. George,

that

Manager of the investment bank¬

ing

threatening austerity policy.

as

•

CHRONICLE

George Named
Harriman Ripley V.-P.

Dr. Einzig reports opposition to British Government's
austerity program

FINANCIAL

Edw. G.

By PAUL EINZIG

*

&

firm's

University. A native of Chi¬
he has been active in all

government bond drives and

munity chest campaigns.

(Special

com¬

He

is

a

Herrick.
8943

I,

George

served

as

2nd

office,
135
Street, since 1941,

Financial

HILLS,

to

x

Chronicle)

CALIF.

—

Waddell

&
Reed, Inc.,
Boulevard, have

their staff

Alex

G. An¬

derson, John C. Lackey, Jr., Ray-;
mond L. Marsile, and
Doyne E.
Morris. Mr. Lackey was previous¬
ly with First California Co.

tenant in the Field Artillery.

Valley Grain Company

has been elected Vice-President in

The

Wilshire

added

Lieu¬

to

BEVERLY

i

former President of the Bond Club
of Chicago.
During World War
Mr.

11

Herrick Waddell Adds

cago,

Chicago

South La Salle

LONDON, ENGLAND—The Government's policy of austerity is

ern

(663)

KANSAS CITY, MO.—Paul Uhlfire, not only on the part of its political opponents but charge of Chicago and midwestern mann is
Sheather With Cohu Co.
forming the Valley Grain
operations.
Mr.
also on the part of its political supporters.
George,
who Company with offices in the Board
Both Conservatives and
(Snecial to The Financial Chronicle)
j
oined
the firm in 1938, succeeds
Socialists are attacking it, even though from totally different
angles.
of Trade Building. Officers will be
LOS ANGELES, CALIF.—John
the late Nathan D. McClure.
At
a
time
Mr. Uhlmann, President; R. Hugh P. Sheather has become affiliated
when
Sir
are as high as
Mr. George entered the invest¬
100%—may then be
Uhlmann, Vice-President, and Ed¬ with Cohu & Co., 634 South Spring
Stafford
lowered.
Even
ment
so,
the levelling
banking business iri 1919 ward G. O'Dowd, Secretary-Treas¬ Street.
Mr.
Sheather was
pre¬
C r i p p s
down of incomes by high direct upon graduation from Northwest- urer.
the
viously with First California Co.
taxation will continue to keep the
Government,
under heavy

,

,

and

the

Brit¬

ish nation

whole,

domestic
within

a

as

are

depend

the self-

denial

ticed

The

prac¬

for

that

the

sake

down

achieving
equilibrium,
there

is

Least

possi¬

a

at
Dr.

Paul

Einzig

may

have to be weakened somewhat
by
concessions to meet Right-wing
and Left-wing criticisms.

Conservative
criticism
is
directed mainly against one of the
basic principles of the Four Year
Plan, under which even
luxury imports are to
down

continue

the

to

markets.

critics argue

Four

Year

Plan

Cripps intend to keep

the export markets for

even

British

bility that this

policy

luxuries

overseas

goxernment's

under

Sir Stafford

of

will

their

on

for

limits. British lux¬

industries

ury

c.omplimented
upon

demand

narrow

in

1952

be

kept

to

a
minimum. This prin¬
ciple is subject to strong attacks
not only by those who
disapprove
the
Government's
equalitarian

luxuries, as far as Western
Europe
is
concerned.
For
the
limitation
of
luxury imports is
based nowadays on the prinicple
of reciprocity. The less continental
luxuries Britain will buy the less
British

luxuries

will

sold

be

on

the continent. This in itself would
not

affect the
British exchange
position. But it does tend to nar¬

further

down

row

the

of

volume

British

luxury production, and it
does tend to keep up the cost of
production. This would mean that
it affects

unfavorably the compet¬
capacity of British luxury
exports in countries outside Eu¬
rope. Britain would earn less hard
itive

philosophy, but also by those Who currencies, and her trade balance
believe that the undue curtailment

with

of

would

luxury

imports is bound to
heavily " on British luxury

recoil

hard

ing

it

ac¬

The

argument runs roughly as
follows: The e q u i 1 i b r i u rn of
Britain's balance of payments de¬

pends very largely on luxury ex¬
ports. In particular Britain's earn¬
ings of hard currencies are de¬
rived

to

from

the

cannot

considerable

a

export of

by

any

which

of

means

manner

described

At

necessities.

as

demand still exceeds

overseas

especially if, owing to the inabil¬
ity of continental countries to sell
luxuries
British

the

supply available. This is an
important point to remember, be¬
cause it means that the high cost
of production does not hinder the
export of the goods in the lines

on

large

a

in

scale

LONDON

the

for

hard-currency

markets also suffers.
The

the

conclusion

above

is that the
equalitarian policy,

government's
far

from

inferred

argument

from

tending to increase
capacity to import nec¬
essities, tends actually to work in
the opposite sense. This argument
may
be one-sided, but it is de¬
cidedly stronger than the conten¬
so

Britain's

tion

that if

more

in the
way;

only Britain imported
by it
long run in some mysterious
or that the import of luxury
she is bound to benefit

BRITISH INDUSTRIES FAIR
Britain has

ies is essential in order to induce

produc-1the British worker to work harder
high owing to1 for the sake of buying the luxuries

the
relatively small volume of
production. And the only way in

which

this

creased

through

volume

be

can

in¬

substantially

would be
expansion of the. do¬

an

mestic demand.
Most

exporting

industries

de¬

pend in the first instance on the
steady demand of the domestic

market, without which

mass-pro¬

most

which,

of

neither wants

to

incidentally,

nor can

he

As for the

Left-wing opponents
austerity, their case is put in a research-, and from experience of commerce with
much
less
sophisticated
form.
Many spokesmen of the working other nations, her industrial production has
classes maintain that, unless the
of

government can see its way to re¬
duce the cost of living,'the labor

the maintenance of

consumption of luxuries. This aim
is pursued partly through the al¬
location of priorities of labor, fuel
and
raw
materials to industries

ing. Already there have been

and

over¬

of Sir Stafford

substantial
the
and

Cripps is based on
a wages ceil¬

wages

inauguration
there

of

signs

are

very

increases since
that

policy,

that

wages

working mainly for export, and
partly through the imposition of a
heavy, almost prohibitive, pur-

demands will be heavier and

Chase

account of the increase of the cost

tax

all

on

luxuries.

purchase tax - is not
goods exported, and
absence
should

of any

charged
even

other

in

on

the

measures

long way
down domestic

go

This

a

it

towards

keeping
demand
for luxuries. This system is work¬
able in a sellers'
market, but as
soon

as

British

luxury

exports

have to cope with foreign compe¬
tition in a buyers' market they
will

find

themselves

gravely

handicapped by their relatively
high cost of production due to the
absence

market.

of

an

adequate

domestic

Possibly the purchase tax

rates—which

in

many




instances

in the export of manufactured

products. By initiative in moderm

policy aims at keeping down home

impossible

way

buy.

unions are fully justified in der
manding higher wages. The policy

is

charges are apt to be pro¬
hibitive. But the official British

long been the world's

greatest customer, and has led the

he afford

head

duction

BIRMINGHA

I

concerned. Yet the cost of

tion is bound to be

and

markets, their capacity of

competing

degree

goods

present the government's policy is
to earmark the bulk of the limited
output of luxury industries for
sale abroad. In a great many lines
the

position through aiming at
surpluses in Europe. For
is
contended, European cur¬

rencies will remain inconvertible,

counts.

be

hope to correct

any

this

export

international

affected

Nor is there

exports and is therefore detri¬
mental to the prospects of balanc¬

Britain's

countries
unfavorably,

currency

be

of

entitled

to

another

rise

living during the last two

on

ever

in

history.

has applied new
dustries. By

great numbers of the world's

buyers

are

Every

from

year,

over

100

countries,

The

Chamber

and-

of Commerce

in

Birmingham,

manufacturers from every part of Britain
with

the

British

Government

to

quality of her work, Britain

technique

to her

famous in¬

enterprise in fresh markets she has

At BIF

pacity,

even

with prewar level their real
wages

government
more

tion

will
find
it
much
difficult to resist this opposi¬
to austerity than that of its

thirty

groups

display the latest developments

of allied trades. The leading

achieved record

deliveries, and export production

international

still expands. To

keep in touch with these develop¬

world's greatest

commerce are

BUYERS —PLAN

Information

BONNER
—Marvin
in

a

S.

SPRINGS,
Mitchell

securities

is

KANSAS

engaging

business from

fices at 202 North Nettleton.

of¬

can

about

YOUR

exhibitors, special displays and

be obtained from the nearest British

of

assembly of national products J

WmM 2-13 H A Y .194 9
TRADE

men

m

invited to attend the*

VISIT

Conservative critics.

Marvin S. Mitchell Op ens

join

welcome

1949, from 2-13 May, three thousand

exhibitors will

years,

have, if anything, increased. The

trade

buyers gather at the British Industries Fair.

which reduced their

spending ca¬
though
compared

principal

making visits to Britain.

them.

Renowned for the

more

impatient. The workers feel they
are

become greater and more varied, than

ments

facilities at the-Fair

Embassy, Legation

or

Consulate.

N

&

COMMERCIAL

THE

(664)

12

CHRONICLE

FINANCIAL

months

Bache Market Letter

Illinois Brevities

Has "New Look"
Bache

&

usual

the
stere

otyped

Market Letter

"the

new

this

look"
week.

//./ re¬

issued every

Tuesday, it is

ings:
Paul

per

stock (par $10) at $14.75
share. These shares represent the interest in the properties of the

Blosser;

late Max Pam

in

by the trustees of a trust created
by the late Ernest R. Graham. The
corporation is the owner of the
office building, called the Insur¬
ance Exchange Building, and owns
all of the stock of Underwriters

adjoining the Insurance Exchange

r

t

a

but

and

i

en-

i

n

n

g

crisp

style

packed

with

la test

devel¬

news

opments from
field

the

of

finamce and industry,

j its present distribution centers

Stuart & Co. Inc. on

Halsey,
Jan.

firm

vestment bankers who

maintains

in

office

an

It is

the

written

by

the firm's Advertising and Public
Relations Manager, Henry
Gel-

lermann, formerly of the United
Press who makes his headquar¬

with

ters

the

Bache & Co.
York

main

office of
Wall St., New

at 40

City.

headed

20

The

B.

formerly

Bowen,

the

of

fiscal year

Stock

Angeles

Ex¬

ceeds

The

interest.

accrued

to

are

be

utility firm to

the

or

properties

A

(no

the

bankers

another

headed

investment

bankers

who

214%

RR.

certificates,

ing to maturity.
ture

Wells

Milwaukee
Common
s

r

$107,000

They will
semi

Inc.

Stock

v:;./>/■

;■////;////

•

Brailsford & Go.
208 S. La Salle Street

i

;

CHICAGO 4

participated

Sunbeam

Products Company
Stock

the

(Analysis

on

to

pay

a

$

Corp.,

increase

capital stock,
to

Common

of retiring bank loans.

purpose

Reynolds

&

N.

Jan.

Y.,

on

25%

540,000

no

Chicago,

lative

Co.,

York,

New

13 publicly

preferred stock

of¬

stock

Affiliated

(Del.),

Gas

war¬

of

shares

the

the

and

Equipment,

of

Inc.

of

be

used

arrange¬

companies

$4,000,000

15-year

connection

in

$50,000,000 of consolidated mort¬
gage

sinking

30-year

3%

fund

bonds, series K, due Jan. 1,1979,
Steel

Bethlehem

of

firms:

C.

A.

at

Corp.

interest, were the
Chicago investment

and

Allyn

&

Inc.;

Co.

A. G.
Co. Inc.; Blunt, Ellis

Bacon,

Whipple

Becker

&

Co.;

&

Central

Simmons;

Republic

(Inc.); Julien Collins & Co.;

Farwell,

&

Chapman

members

Mc-

Others included

Arnold
their

William Blair
Co.; H. M. Byllesby & Co. (Inc.);
Harris, Hall & Co. (Inc.); and
ianey, Wells & Co.
issue

only were:

with

V.

The

Co.

stockholders

common

record

of

cently

Electric

Illinois

Central

Dec.

23,

1948

(Special

stock

common

at

Co.

penditures

(Calif.),

finance

during

and

the
ex¬

the

next

12

Members of Chicago Stock Exchange

par

on the basis of
share for each six shares

one new

held,. Rights expired on Jan. 13,
1949. The proceeds will be applied
(a) to the payment of' $600,000 of
bank loans and to provide a por¬
tion of the funds required for the
and

present

Tele. CG 146-7

Tel. DEarborn 2-5600

Common

Ind

Texas Eastern Transmission
Common

/'

'''v,

..

Chronicle)

^;

us

of

trial

on

Jan.

the

10

(Special

$31

per

to

The

Griffin
Bache

Advin E.
staff of
Co., 135 South La Salle

has
&

Chron'^le)

Financial

ILL.
joined

CHICAGO,

—

the

Street.

With Barclay Inv.
Parker

to

The

Financial

Co.
Chronicle)

ILL.— Joseph M.
now
associated with

offering price

is

Barclay Investment Co., 39 South
La

Salle

Street.

Burr Richards
(Special

Inc.,

The

to

Opens

Financial

Chronicle)

DOVER, MASS.—Burr Richard^
is

engaging

in

a

securities busi-r

offices

from

ness

on

Burnham

Road.

share.

KINGDOM

UNITED

4% FUNDING LOAN

Railroad

Detroit Harvester

DUE

Common

Mtinicipal

Portsmouth Steel

BOUGHT

—

1960/90

SOLD

—

QUOTED

Common

Write-up Sent

Metals Disintegrating
Common

Members New York Stock

a.c. allyn™ company
Incorporated

135

South

Tel.

ANdovpr

L.a

New

■

■

''

•"

Exchange

CHICAGO

MembezsHMcago Stock Exchange
Associate.Member

on

Request

,

STRAUS & BLOSSER
l'.ark

ZIPPIN

&

Sa'l"

St., Chicago 3, 111.
Tele. CG 650-651




NEW YORK

BOSTON

OMAHA

PHILADELPHIA

KANSAS

CITY

/

MILWAUKEE
WATERLOO

COMPANY

208 S. La Salle St., Chicago 4,
MINNEAPOLIS
FLINT

/

Specialists in Foreign Securities

Curb

3-rrni

?
\(»

ANGELES,

Public Utility

Winters & Crampton

•

Co. Adds

Financial-

■

CHICAGO,

public
of 400,000
shares
of
Koppers
Company,
Inc.
common
stock
(par $10)
were
the
following
Chicago
in

Participating

offering

subscribed at the

SECURITIES

The

)

-''if

' *

With Bache & Co.

*

*

❖

A. C. Allyn &
Farwell, Chapman &
Co., Kebbon, McCormick & Co.
and
Sills, Minton & Co., Inc.
This
issue
was
quickly over¬

INVESTMENT

to

(Special

/

Co.,

209 S. La Salle Street-Chicago 4

'■

■'

rill

banking houses:

William A. Fuller & Co.

'•

($15 per share)

Payne

capital

'

ILL

H. Ballantyne

mand

for

of

National

;

CALIF.—Ar-r
is with Mer¬
Lynch.
Pierce,
Fenner
&
Beane, 523 West Sixth Street.

re¬

given the right to
80,000
additional

were

'

LOS

written.

to

'

Merril! Lynch

of
Gas

&

is

circles, is a

the

of

with

who

Arnold,

■

(Ohio), Day & Night

balance

Mr.

Security Traders Association.

(Calif.)

of.. Dresser

and

that Henry J„

associated

now

President

past

Mfg.

Co.

is

firm.

Stock

Cincinnati

announce

well known in trading

Heater Co.

subsidiaries

the

of

Exchange,

bond

in the underwriting of the

Henry J. Arnold

„

The

Kebbon,

and

Co.;

Co.;

Industries, Inc., namely: Bryant

Furnace

It is

627,960
(no par

contemplated con¬
struction program of the company.
This
offering was not under¬

owned

on

of

stock

19

common

at $32.50 per share, and

value)

shares

insurance

Trust

v

Jan.

on

shares of

at

completed

B. Cohle
Building,

O.—H.

Union

Participants in the public of¬
fering

at

4% notes. The net proceeds are

presently

shares

:'i=

!."!

stock

to sell, by private place¬

issue

Co.,

1948,

operations Sept. 8,
$1,010,384.

stock

In addition, the

firm

to

CINCINNATI,
&

amount to

common

ments

an

and

stock dividend

now

preferred

latter

ment,

pro¬

value,

H. B. Cohle & Go.

subscribe

$9.25 per share.

Jr.,

par

stock ($1 par value)

common

p?r

purchase

1,0D0,000

and

rants,

($50

Gearhart,

Television

nondetachable

with

value),

authorized

authorized and outstanding.

request.)

94
by

the acquisition of three Wholly

its
par

of

headed

group

bankers

fered 40,000 shares of $3 cumu¬

$

capital.

record

Cormick & Co.

investment

Jr.

President; L.
Richard Kinnard, Vice-President;
Edward
V.
Otis, Vice-President
and Treasurer; and Karl G. Berg,
Secretary and Assistant Treasurer.

*

of

Gearhart,

D.

F.

Frederick

are

Henry J. Arnold With

Illinois

nation-wide

A

to
t<t

:

*

of

firm

new

D.

to

are

working

directors

following

$10,000,000 from two New
insurance companies for the

the

prod¬

•

Officers

;

payable Feb. 15 to stockholders of

Co.

this

in

The

York

equipment trust certificates
serially $187,000 on each J an.
15,1950 to 1959, inclusive, at prices
to yield 1.60% to 2.80%, according
to maturity. The Illinois Co. and
McMaster Hutchinson & Co., also

poses

-i

City.

improve¬

for

45

at

Fund, Inc., have declared an ini¬
tial dividend of 10 cents per share,

&

2V2%

Chicago,
offering.

proceeds

*

loan of

ma¬

screws,

pay

additional

100y2
'

preferred stockholders of
Liquid Carbonic Corp. on Jan.
approved a long-term 3%%

28

underwriting syndicate
Halsey, Stuart & Co.
Jan. 13 offered $1,870,000

of

International Cellucotton

new

The

due

|

&

The net proceeds

used to pay for

r

the

International-Great Northern RR.
;

Farwell,

construction, etc.

by

on

Co.;

1

annually

-

for

Co.;

(Inc.);

and Martin, Burns

be

to

are

July 1, 1949 to Jan. 1, 1964,

headed

'

t.-'-

&

Co.

&

Mullaney,
Co.; Carl McGlone &

Corbett, Inc.

Another

Railway

Cen¬

Co.;

&

Co., Inc.;

common

Chicago, North Shore &

Inc.;

The Illinois

Co.;

Byllesby
Collins &

Chapman

inclusive.

I

Co.

&

(Inc.); Mason,
Co.; Harris, Hall & Co.

&

M.

Julien

to

bolts,

started

&

prices

net

leading

similar

and

to

a

Moran &

H.

equipment

at

of

tral Republic Co.

Blair

on

Burlington

used

Bacon, Whipple & Co.; William

group

15,

Jan.

Feb. 5, 1949.
Chester D.
Tripp, President, also announced
that. net assets of this Fund, which

Becker

publicly offered $3,210,-

Chicago,

from

at $19.50 per
Chicago bankers
C. Allyn & Co. Inc.;

A.

G.

A.

yield 1.30% to 2.5214%, accord¬

Corp.

•

stock

common

The

were:

com¬

Co.

value)

par

share.

group

of

Electric

&

new

will

Nassau Street,
York

ments, to retire bank loans, and

Jan, 18 par¬

shares of Southern Indiana Gas

also headed

trust

Income 5%-—1952

on

,

to be made

of the

due

The

be

for the cost

pay

note

manufacturer

in¬

together with others,

e-

secu¬

New

1964, of The Lamson & Sessions

ucts.

vestment houses

r-t h

fices

private

$1,500,000 3%%

a

rivets

and

by

promissory

the

nuts,

net pro¬

used

placement of

year

of Illinois

e

in

rities. The

Chi¬

Co.,

&

arranged

has

$41,171,009, against $29,183,806 for
the preceding year.
Another group

o

v

d

a n

deal

maintain of¬

Curtis

Clement,
cago,

Sales for the

(Inc.); Sills, Minton & Co. Inc.;

000

Central Public Utility

fiscal

Gear-

gen¬

to

firm

Co., Cleveland, Ohio,

additions, extensions and im¬

Quincy

j

the

for

of

banking

counter

$

parent company and its subsidi¬
aries for the 1948 year totaled

mortgage bonds, series C,

Jan. 12

change.

share,

in the public offering of 685,000

due Jan. I, 1979, at 102.375

:J:

!■:

a

business

York, N. Y.

the

of

made

firm

invest¬

ment

New

is

the

Otis, Inc., to

conduct

ended Dec. 25, 1948, a

ended Dec. 27, 1947.

publicly

&

of

Kinnard

nart.

secondary offering of 24,306
capital stock of The Peo¬
ples Gas Light & Coke Co. was
made Jan. 20 at par
($100 per
share) by Union Securities Corp.,

profit, after taxes, of $5,752,843, equal to $10.65 per share, as
compared with $3,440,546, or $6.37

$10,000,000 Central Illi¬
Public
Service
Co.
first

Announcement
formation

Co.,

&

Inc.

Co.,

&

the

Corp. reports for

Minton

well, Chapman & Co.; and II. M.

net

per

Sills,

Straus &

A

outstanding.

Sunbeam

with

Spring Street, members

Los

Otis Formed in NY

Inc.;

Co.,

&

Co.;

shares of

transferred $3,240,000 to stated
capital out of earned surplus. /

'

621 .South

share

per

be

of six underwriters
by Halsey, Stuart &
Co. Inc. on Feb. 3 publicly offered
First California Co., has become $5,000,000 first mortgage bonds,
associated with Marache. Sims & 3 % series due 1979, of The Union
Light, Heat & Power Co., a Ken¬
Co.1, 458 South Spring Street,
tucky corporation. The net pro¬
members of the Los Angeles Stock ceeds will be used to retire
$2,Exchange.
067,000
of
6%
first
mortgage
bonds, series A, and $228,700 of
6% first mortgage bonds, series B,
Lester & Co. Add
both due Aug. 15, 1949, and the
(Special to The Financial Chronicle)
balance to finance, in part, new
.^.LOS. ANGELES, CALIF.—John construction.
R. Nevins is with Lester & Co.,
On Jan. 12 the same Chicago
LOS ANGELES, CALIF.—Wil¬

liam

cents

&

eral

At the time of
such stock dividend there would

pany.

Chronicle)

Financial

50

nois

to

With Marache, Sims

of

rate

ticipated,

of

to

underwriters

Allyn

C.

A.

H. Davis

Bylllesby

the increased number of shares

offered

provements made

1 (Special

dend

of in¬

group

a

the

regular quarterly divi¬

to be

bankers: A. C. Allyn & Co.,

Inc.; Riter & Co.; Straus &/Blosser;
Hickey & Co., Inc.; M. C.
Gibson & Co.; Ames, Emerich &
Co., Inc.; Julien Collins
Co. and
Sills, Minton & Co., Inc.

maintain

to

proposed

the present

on

Republic Co. (Inc.) in the offering
are the following additional
Chi¬
cago

'

also

Associated with Central

Building.

around Mid-Manhattan where the

Chrysler Bldg.

Gearhart, Kinnard &

The fol¬

Inc.; Mason, Moran & Co.; Far-

is owned<8>——

written in

I y

v e

Building

his heirs since the construction of the North

or

The other 50%

1912.

prepared

news

Henry Gellermann

made on Jan. 26 of 82,500 shares of Insurance

Building Corp., which in turn is
the owner of an office building

attract i

te

Illinois

lowing

addi¬

provide

participated in the stock offer¬

Co.,

•

to

and

tional working capital.

Exchange Building Corp., Chicago, common

Public offering was

members of the
New York Stock Exchange, gave
.

Thursday, February 10, 1949

Telephone RAndoIph 6-4696

Illinois

.

Teletype CG 451

>

Volume

169

Number

4776

COMMERCIAL

THE

Landon Warns of Excessive Oil

Truman, former Republican Presidential can¬
didate says American oil
industry is threatened with depression
because of heavy influx of
imports. Points to sagging crude and

■V-

national defense.

Landon, former Kansas Governor and one time Republican
Presidential candidate, in a letter dated Feb. 2 addressed to President
r

u

m

urged

a

tailment

I

of

American
oil
industry
of high
prices and earnings. In the event
of

United

a national
emergency, that pol¬
icy would plunge us into the same

or¬

der to prevent

serious

a

hole

re¬

cession

tion.

and

I

duction,
our

oil.

oil industry of

f f i

u

s

i

c

Alf M. Landon

national

defense.

Recommending

related

directly

sySiem

the

of

needs

domestic

quota

a

the
industry,
to

Mr. Landon declared that the pro¬

well

as

as

ducers.

President

Harry S. Truman,
White House,

writing

related

oil

defense.

first

the

1948,
climbed

of

part

imports have
barrels

280.000

nearly

subject closely

on a

the

price of

Lower prices, or

threat

of

lower

prices,

in

the

the

crease

cieased

import

But

stead of to increase

at

and

total

in-

has

import

of Nov. 30, 1948.
in striking contrast to

30.2%,

That

de¬

refined

of

with that de¬

even

is

increase

as

all

for

demand

in

petroleum products in 1948, which
only

few per cent over 1947.

a

of

S

were

have

not

only

been

but intensified

United

put

for

abroad and

exporter finds his business
he

would

rather

turer is reluctant to enter

the

of oil

replacement

cost

produced under the present

costs of

labor, steel and other

es¬

sential materials.

they should,

as

be disastrous from
of national

known

the standpoint
It is

defense.

fact

that

transportation

of

well-

a

production and
Middle East

many

related to the needs of the domes¬

tic

is

merce

policy. This might mean
that foreign producers would have
to

forego supplying

scale. - In such an event,
neither we nor friendly European
nations

could

benefit

from

a

Russia

now

and

markets

pean

turn

Middle

to

East

nations would

oil,

be

forced

to

immediately to this country
supply.

for their oil

I would never advocate that im¬

•

ports should be curtailed
inated

elim¬

or

simply to permit the

pro¬

ducing of domestic oil at the fast¬
est

possible rate.

middle
and

But there

between

course

inefficient drafts

oil reserves

on

a

our own

hand and

one

on

is

excessive

ex¬

cessive imports on the other. That
course
lies
in closely regulated

import quotas for foreign oil and
in

the

strict

observance

of

the

principles of conservation in de¬
veloping and producing domestic
oil.

Such

with

a

formulated
security and eco¬

program,

national

nomic welfare

require that

its

base, would

concessions

be

made by all interested groups,

in

light
-

as

of

the

some

stability

program would

which

this

create, the cost of

•these concessions would be small
•compared
would

with

result

the

from

imports.




losses

which

uncontrolled

in

wish

to

feasible

every

the nations

receiving

our

Procurement
Letters

of

Authorization

Commitment

be

asking for the

ex-

I

L.

and
made

transactions under the European

Don¬

Strong and Mr.

G. C.

Whipple, met last Friday irl
Washington with a number of High

officials of the ECA and
present^
ed the recommendations to them.;
I want to thank the
representa¬
tives of the ECA and of the De¬

partment of Commerce and other
government agencies who partici¬
pated in the conference, for their
courtesy. However, we have nqt

accomplished much. The

(3) That financial arrangements
payments to suppliers under

its

satellites

with

a

can

cause

purchases in
ECA

ficials

ECA) of¬

charged with the responsi¬
bility of carrying out the Program,
were

more

concerned

with

im¬

mediate goals than with the long-

interests

range

of

our

domestic

and

foreign trade. I gained the
impression that they are more
concerned with

conserving dollars

allocated under the Program than
with the future of American for¬

used

for

make

some

sacrifices.

On

occa¬

<

U. S. production as

efficiency

This would permit

ually

build

to grad¬

us

which

up

would

safety

a

the

be

margin could be put to

use

if, for

any reason, imports were cut off.
Such a safety factor enabled us to

oil

the

last

equally

war.

It

might

prove

valuable

in

some

future

foregoing

para¬

graphs, the program I j suggest
might require that sacrificesi be
made by

all.

would work

efit

all

of

But those
to

sacrifices

the ultimate ben¬

concerned—the

con¬

the domestic producer, and
producer in foreign fields.

sumer.

the

and

of

Europe

form or another by
every cit¬
Excessive oil imports would

izen.

surely have such

a

weakening ef¬
to allay this

fect. Decisive action

As

and

Cash

other
It

wars.

.

.

render

aid

to other nations and to spend

bil¬

tain

dollars

annually

ventures.

Let

this

freedom

.

.

.

.

.

Foreign trade is
the

I

merits

the

that
we

of

now

European

Program.

.

.

.

30,474,234

.

.

.

.

883,738

.

.

979,126

.

.

.

.

713,578

6,750,000

Chicago Title and Trust Building Corporation
Title Records and Indexes

encroach

Total Assets

integrated
Recovery

;

.

.

1,500,000

.

.

$45,053,417

.

.

$13,757,831

.

.

.

.

360,000

.

.

1,327,739

.

*After Reserve Provisions

not going into the

am

Program.

I

LIABILITIES

hope

the billions of dollars which
Trust and Escrow Cash Balances

spending will accomplish
proclaimed purpose and that

are

the

Cash

Europe will be self-supporting in
1952.
the

distribution

-

spent for European Aid. While

in Chicago and in the Midwest

contribute
the

Aid

a

substantial

funds,

we

are

share

as

Accounts

....

Indemnity against

Dividend Payable

of purchases un¬

Program.

Deposits

Specific Title Guarantee Risks

But I do want to touch upon

der the

we

-yh>*

main¬

us

and

Stocks of Associated Title Companies

al¬

on

it only in extreme need.

upon

'•••.'• V

is

Mortgages, Real Estate and other Investments*

truistic

•

......

Marketable Securities*

country
European

to

•

ASSETS

enabling this
to. support the Western

nations,

American

SHEET

BALANCE

of December 31,1943

this freedom that is

of

an

Chicago

•

Accounts and Notes Receivable*

lions

need

supply the

On the other hand, if the oil
As you know, 11 cents of each
industry should be seriously weak¬ dollar that
yop as an individual
ened by a lack of
foresight in or as a corporation
pay in taxes
policy, the cost would be paid in are
one

Washington Street

CONDENSED

with materials

two

in

weapons

with

emergency.

As stated in the

nations

parts of the globe

national interest dictated.

later

Program.

soldier's

a

to

us

Aid

COMPANY

Ill West

country the greatest in the world;
that has enabled

will

will

we

countries

which

CHICAGO TITLE AND TRUST

that
material because

war

other

funds

blood poisoning;

shoelace is

be

mit

with

supply

oil supplies. Furthermore, without
access

it

may
part of the
shoe.
which
they

factor,
margin be¬
tween the ability of fields to pro¬
Euro¬ duce and actual production. That
these

States to de¬

they

Coopera^

The commit¬

Mr: J.

export controls
until June 30, 1951.

it

sion, restrictions might be imposed
on

large

That

Since we became a nation we
very profitably
in
pursued
a
light of their low costs.
policy of individualUnder this program American freedom and freedom of trade. It
is
this
policy
that has made our
producers would also have
to

could

and

any

in all

matter

tion Administration.

consisting of
nelly, Mr. A. M.

Assdr?

committee fb
with the bx,f

a

tohsion ot wartime

of

tional oil

in

on

the volume

industry,

crude oil could not be maintained

the event of hostilities

whether

manufactur¬

traders

for

foreign

Manufacturers'

Recovery Program be carried out eign markets. They are overlook¬
ing the simple truth: that in trying
in every feasible manner through
industry workers and serious
to rebuild the 16 Western Euro¬
private enterprise.
ioss
to
After the termination of the
royalty owners, farmers
pean
nations, we must not dis¬
and others' who depend on oil in¬ war, we established controls over
(5) That in encouraging interregard
our
national
or
local
come.
Such developments would scarce materials. There was
logic European trading, the Economic interests, that we must maintain
We needed materials in Cooperation Administration take
seriously weaken the industry and to it.
our
foreign markets for our ex¬
adversely affect the whole na¬ short supply for our own economy. full cognizance of the needs of panded industries
because, if we
tional economy.
Later, we added additional con¬ our expanded industries for over¬
do not protect our own interest,
Under a quota system directly trols.
We did not want to
supply seas markets and should not per¬
bring unemployment to

domestic

Aside from the economic factors
involved, lower crude prices would

enable

sections of the United States.

trade because of the red tape and
intricate procedures.

im¬ strategic materials that could be
Under the impact of this volume
ports could be set periodically at used in a war against us. There
of foreign oil, prices of some re¬
levels designed to provide the vol¬ was logic to it.
Now, the Depart¬
fined products have sagged, and
ment of Commerce has placed un¬
ume of additional oil needed after
the price
of domestic crude oil due consideration of the amount der control everything shipped to
is now softening.
Lowered crude which should be
commodities
produced in this Europe and many
oil prices would touch off a re¬
We seem to
country.
Determination of that shipped elsewhere.
cession in the American oil indus¬
be operating on the
amount would entail studies of all
theory that a
try. for the present price barely factors pertinent to a sound na¬ pin is a deadly weapon because
represents

would

producers and

manner

be

Illinois

States.\J

President of

tee

Aid be requested to distribute the
business equitably throughout all

engaged in any other enterprise.
The average American manufac¬

Mansure,

throughout

(2)

in¬

so

with the United

Mr. E. F.

ecutives of the Economic

participate in the business.

American

trade

Cooperation
Administration
be
publicized well in advance

termine

We have

enabling
our
Western
Hernia
sphere customers to continue their

this

parts of the United

foreign com¬
of regulations

on * our

that

in

we

advisable)

appointed

the

pur¬

preference
should
be
given to
Latin-American
countries,
thus

discuss

ers,

imposed

off-shore

deemed

are

ciation

which

maintained

States "have

chains

volved

a

short time.
mistaken; the controls

S'V";

Whenever

(6)
chases

the

country,
giving
the description of the commodity,
quantity and other pertinent data

\

no

eventually undermine or destroy
American foreign markets,

That requests of European

(1)

that

under

nations approved by the Economic

through local banks.
We started out with
would discourage wildcatting and
"emerg¬
(4) That
government
trading
development,
cause
premature ency" controls over a few exports
a
few
abandonment of large number of and
imports
but
the I represents unwarranted encroachstripper wells, thus causing do¬ "emergencies" have now become oient m the field _of private enmestic reserves to diminish in¬ permanent. The Secretary of Com-1 terpnse
and thaV accordingly,

oil

products.

was

healthy.
However, it will not be healthy
if crude oil imports into this coun¬
try are allowed to reach a volume

to

There has been, however, a

the

reasonable devel¬

day

present.
crease

We

only

Strong

,

foreign trade controls.

have believed

opment of foreign oil supplies and

daily

a

barrels

500,000

'

I

even

national

to

Since
from

com¬

M.

A.

the

domestic crude.

Dear Mr. President:

crude

steel

Administrator:

would
be maintained

■:

Association, being cog¬
made the fol¬
recommendations to the
this fact,

of

lowing

they

panies to develop Middle East oil.

which breaks the present

Washington, D. C.

am

grant of export licenses for
in order to enable American

nizant

controls
felt

and

I told

ago,

bounds to be

The full text of his letter is re¬
produced herewith:

I

of Directors of the Illinois Manu¬

facturers'

sacrifices by the encouragement of interna¬ merce with a maze
foreign pro¬ tional
restrictions.
An
trade
within
reasonable arid

entail

would

gram

American

years

Averill Harriman, then Sec¬
of Commerce, that I was
oil producer who defended his

one

.

over

and

these

retary

magnitude for
our

About two

!

Mr.

t

e n

its

have supported the reciprocal
trade agreements which meant an
increase in imports of Venezuelan

as a means

having

with

by the ECA has, so
negligible.
The Board

been

controls

critical

oil

p r o

excessive
destruction of

upon

far,

imports

domestic production and explora¬

imports

in

,

created

ness

xercised

exchange.
However, we
were
highly

home

of

depending

as

prices
and

e

importer

or

was

—

or

gov ernments

He

Ten years

—

ing in the benefits of the Program
other
restric¬ ,in the same proportion as other
ts ons. True, sections of the country. The share
many
foreign of the Middle West in the busi¬
censes

,v:

.

domestic trader.

same manner as a

1 i-<§>

quotas,

not one who would gut our
stockpile simply to insure the

expanding oil
imports into
in

about his business in the

am

oil

the

States

ago
could go

n,

cur¬

a

By a. m. strong*

Doing business in 1949 is entirely different from doing business in 1939.
foreign trade was a free enterprise in the United States. An exporter

Alf M.

T

13

Vice-President, American National Bank, Chicago

discouraging production and adversely affecting

as

(665)

Imports

In letter to President

refined oil prices

CHRONICLE

FINANCIAL

&

.

.

.

........

Payable, Taxes and Accruals

.

.

.

.

Reserves

Capital Stock

,

.

3,117,979

.

.

12,000,000

.

.

8,000,000

.

.

3,803,482

.

.

$45,053,417

.

Surplus
Undivided Profits

.

2,686,386

of

not shar-

Total Liabilities

threat is urgently needed.
With
and

highest

best

personal

regards

wishes.

Sincerely,

•

ALF M. LANDON

\

(signed).

*Opening remarks of Mr. Strong
at the

World Trade Forum, spon¬

sored

by

turers'
Feb.

the

Illinois

Association,
3, 1949.

Manufac¬

Chicago,

111.,

Assets in the

pledged
and

to

escrow

amounts

provided by

of Illinois have been

statutes

qualify the Company to do business and to secure trust
cash balances.

„

,''7

,

«-•

,,":—;—1_1

14

THE

(666)

COMMERCIAL

&

FINANCIAL

CHRONICLE

Basic Aims of

Bank and Insurance Stocks

Thursday, February 10, 1949

Republican Paity
'

By THOMAS E. DEWEY *
Governor of New York

By II. E, JOHNSON

This

t

In first political address since election, defeated Republican Parly
presidential candidate

deplores party
split due to opposing extremist views in party membership. Cautions those v/ho want to turn back the
clock to early 19th century tenets, but opposes following New Deal
principles. Says all Americans be-

Week—Insurance Stocks

During the past two weeks several additional fire and casualty
companies have issued their annual reports for the year
just ended.
«.

lieve government today has to be more than a cold and impartial umpire, and urges extremists to aban¬
don Party. Attacks Administration's foreign policy as not being world-wide in scope and asserts "we

"

insurance

In reviewing these statements, the improved results from under¬
writing for the various companies is impressive. Although losses con¬
tinued to rise, recent rate increases and a larger premium volume
enabled most companies to show a profitable underwriting experi¬
•

This

ence.

Also,
•

funds

,

when viewed against the

number of companies last

a

available

investment

for

that the return

common

on

losses

year.

purposes.

other

This, combined with

noise.

of which insurance

stocks

com-

panies own large amounts was considerably higher, allowed further
improvement in investment income.
From the reports issued so far, the results indicate that 1948 was

•

a

profitable

very

of

Two

the

statements

for most insurance companies.

year

larger and

prominent companies

more

publish

to

the
Great American Insurance Co. Comments on the operations of these
companies for the past year are presented below.
recently

AETNA

V
.

.

.

.

have

been

the

Co.

Insurance

Aetna

and

premium writings for the
in 1948 totaled $96,222,-309 or $2,584,199 higher than the
$93,638,410 written a year earlier. The management voluntarily tried
to hold down the premium volume and the percentage increase was
limited to 2.7%. A considerable portion of the gain was accounted
for by the casualty subsidiary.
Losses paid also were somewhat
higher but the increase was relatively minor when compared with
the large gains in other years. Expenses and taxes continued to gain

Aetna

shared

larger amount of

a

lati

but there too the increase

was

fairly small.

a

by

with

of

As

calltd

this

fair

continue, as
past, to
merely that of
occasional

visitor.
Recent
have

it

that

clear
Re-

no

Dewey

going to live at 1600 Pennsylvania
anyway.
No Democratic
President is living there either.
Avenue

spite of the attempt to hold down premium volume, the un- The White House has been iin
earned premium reserve was higher by $6,241,711. This was smaller Democratic hands so long that,
the
government itself, it's
than the $12,186,420 increase reported a year ago and for this reason like
underwriting operations were profitable. For the year the consoli¬ falling apart.
dated underwriting profit was equal to $3,252,100.
This compared
So, if those 29,000 votes had
with

loss

a

ments

was

forjthe previous year of $5,752,642. Income from invest¬ gone the other way last Novem
also higher amounting to $3,420,911 for 1948 as against ber, I would have faced a double

$2,929,345 for

1947.

increase amounted to

The

$491,566

approxi¬

or

mately 17%.
Based

to

the 1.000,C00 shares of

capital stock outstanding, the per
share results for the year compared with those of 1947 are estimated
as follows.
No consideration has been given to Federal income taxes
which were charged directly to surplus.
on

Underwriting, earnings

_____

1948

1947

$3.25

-$5.75

investment

3.42

2.93

earnings

9.17

2.05

premium writings

income

of

$3,478,869.

the

increase

in

premium

earlier. /As in the case

pared with an increase of $10,677,179 a year
of

level of

Aetna, losses and expenses increased, but with a higher

operations results

generally favorable.

were

Great American has

Per share results for the past two years before
taxes

are

estimated

allowance for Federal

follows:

as

Equity change in unearned premium reserve
Net underwriting earnings-:
investment

Net

earnings

1948

1947

$0.62
2.19
2.81

-$1.72

2.43

2.13

5.24

3.03

income

Daniel Hawkins With

it

has

joined

the sales department of William E.

New York City. Mr. Hawkins was
formerly for many years with Sal¬
Bros.

&

Hutzler.

2.-32

early age, to the role of
statesman, which someone

elder

defined
longer

aptly
is

who

at

no

BREAKDOWNS

.

GROWTH INCOME

associates

With

a

role

19 N. Y. CITY BANK STOCKS
Sent

on

request

Ry.

were

awarded

equipment trust

2%

Members New York Stock
J 20

to

our

country.
is

permits,

20

now

Telephone: BArclay

since

years

our

In that whole pe¬

President.

elected

we

Congress,
is

This

Republican

a

two

once,

ago.
that is

years

record

dismal

a

is

It

of

The

Feb.

2

certifi¬

certificates,! issued

Philadelphia plan,

were

.

authorization,

yield 'frdm "1.25%

at
to

prices

2.30%,

to
ac¬

cording to maturity. Associated in
the offering were

A. G. Becker &

Co. Inc.; Freeman

& Co.. and Mc-

Hutchinson

&

Co.

impor¬

desperate

the country

to

lest

the

into

we

abyss

slip
of

to

The

proceeds will be used to provide

to find scape¬

to make excuses, I would

or

7-3500

Teletype—NY 1-1248-49

(L. A. Gibbs, Manager Trading Dept.)




for

not

more

than

80%

of

cost,

estimated
new

Cars...

70-ton
...

at

bring out in the open one
problem.
The Republican

It has
for years,
gloss it
We have tried to deny it

Gondola

■■■-•v)'"-:

is

agree

is

what

If,

be

fatal

the

to

nineteenth
the

to

even

I

to

wide

have

open

tried

to

ourselves and conceal

doesn't work.

face
open

I

get it right
and look at it.
we

out in

the

Then, let's

do about it.

can

We have in

That

it

suggest that we

it,

what

see

1920's

century,
you

Republican Party

and

other

the dead¬

est

pigeon in the country.
On fke other Wand, we can't" Out¬

promise

the

tried

to

out-bid

with

the

If we
Democrats

Democrats.,
the

public money, it would
be wrong, immoral and a betrayal
of
our
party and our country.
Moreover, you couldn't out-prom¬
ise the Democrats if you tried be¬
cause they will promise anything
to anybody to get a vote.
What we ought to do is to stop
bellyaching about the past, either
the distant past or the immediate

making

it ever¬
to
the country
stand
and why. And

past, and start
lastingly
clear
we

that should not be too-hard to do.
Wants Forward Progressive

our

such

consider

programs.

these

These

one

Unless it

was

we

back-wistfully

to

the

address

mis-

by Gov. Dewey at
Day Dinner of the
Party,
Washington,

C., Feb. 8, 1949.

Con¬

something.

mean

designed to deceive,
mean

liberal and progres¬

are a

Let's let the' people know.

quibbling

stop

that

issues

about

Let's
ourselves

among
are

and

dead

gone.

Party Should Meet Aims of Young
Most of

all,

must make our

we

vehicle

the

party

aims

the

for

and ambitions of the young

the

of

country.

gratifying
last

people
One of the most

that

things

fall

that

was

happened
the

in

high

schools and colleges of this coun¬

try from Maine to California our

party

the choice of a heavy
of
the
students.
We

was

majority
should

these

welcome

young

people with
open
arms,
bring
them in, give them a voice in our
decisions, a part of the responsi¬
bility of carrying them out, and
again make ours the party of
youth.
I

But

that

if

still hear people

can

what

mean

we

we

say

say

in

platforms, then how are we
different from the Democrats?
If
our

what Republican

mean

we

said

ers

throughout

the

speak¬
nation

in support of our plat¬

year

have

we

into the war.

us

terrible

After

Allied arms won

sacrifices,
the
the greatest mili¬

tary victory in history. And then
almost
immediately
the
Com¬

sive party.
To be entirely

munist conquest of our traditional
specific, they say Chinese allies began.. It was this
our
party has present National Administration
solemnly declared that we belive which supinely sat by and allowed
wholeheartedly in unemployment it to happen.

and

that

mean

in

insurance,

assistance

old-age

pn increased basis, in broader
social security generally, iii slum
clearance

and

public housing,

in

public development of our water

in

resources,

power

farm

price

supports, in vigorous protection of
the

rights of labor.

All

these

necessary;

D.

whether as voters or public
officers, believe in the party plat¬

dp

dissent at the National

vention. It must

the

departures into pa¬
would actually re¬
peal them all.
These people be¬
lieve in a laissez-faire society and

Lincoln

out and try to get
typical American

to offer than the
perfectly clear that only a Democrats?
progressive, forward-looking Re¬
publican party can provide the Differences With the Democrats
leadership this country needs and
The difference is as wide as the
must ultimately
get. The over¬ ocean.
Let me be specific again.
whelming majority of all Ameri¬
In foreign affairs one difference
cans in both parties believe that
is that we Republicans have in¬
government today has to be more
sisted on a world-wide foreign
than a cold and impartial umpire.
policy and not merely a European
That has been the position of
foreign policy.
It is the bitterest
our party consistently, both in the
irony that it was America's tra¬
Congress and in our party's plat¬
ditional friendship for China and
forms.
That
position has been
our insistence upon her integrity
repeatedly affirmed in national
conventions. In 1948, our platform that brought about the Japanese
attack at Pearl Harbor which took
was
unanimously voted without

programs

and

Republican

a

form, then, they ask, what better

Party

horrendous

the

go

in

forms, and it is up to us to make
it clear that those platforms are
the real intent of the party.

last

ternalism

look

bury

can

as

or

on

party some fine,
high-minded patriotic people, who
honestly oppose farm price sup¬
port,
unemployment
insurance,,
old-age benefits, slum clearance
people

to

cans,

country.

its various sections say and

over.

dis¬

party, we try to go back

as a
the

to

that

fatal to our party and

courses are
would

fact

not so important, but
important is that both

that

split
we

the

$2,650,000,: of

all-steel

The

extremes.

patty is split wide open.

*An
500

and want to

beyond it as rapidly as
possible at almost any cost and
regardless of consequences.
Personally, I disagree with both

been

but

ought
elected

It is

country lasted elected a Republi¬
can

those

are

to embrace

seem

I

Exchange

BROADWAY, NEW YORK 5, N. Y.
Bell

.

under the

Ma'ster

Laird, Bissell & Meeds

that

should
discuss with you some of
that beset our party and

ills

It

which

bluntness

the

who

far

go

where

the

enviable

like

$2,120,000 Wheeling & Lake Erie

ICC

1948

politician
candidate for
a

as

office.

any

goats

immediately reoffered, subject to
,

compara¬

a

Republican Party Is Split

& Co. Inc. and

Halsey, Stuart

clusive.

GOV'T BOND PORTFOLIOS
,

but
that

whatsoever

one-party government.

Aug. 15, 1949 to Feb. 15, 1959, in¬

AND

the party

for

graduated

unconsciously

0.90

cates, due $106,000 semi-annually

SOURCES OF

that

theoretical

the

been

cans.

Halsey, Stuart Offers

Pollock & Co., Inc., 20 Pine Street,

omon

office

an

tively

tance

Wheeling & 1. E. Equip.
Hawkins

is

It

of

anybody will listen to you. I have

basic

W.

head

party.

and honorable

with

mythical

titular

as

Without seeking

Daniel

straight

important not merely to Republi¬

Underwriting earnings

Net

known

riod

1,630,000 shares of capital stock outstanding.

second

a

Republican

has

other extreme

in the party

the

somewhat

that

to

like

volume, unearned premium re¬
serves
also gained although not as much as in the previous year.
For 1948 the increase in this reserve amounted to $8,936,924, com¬
With

for

right to speak
no
guarantee

Operating profit for the group before taxes was $4,978 335 and
consisted of $1,010,316 in underwriting earnings and $3,968,019 in
net investment income.
This compared with 1947 net income of
$669,165, including a statutory underwriting loss of $2,809,704 and net
investment

term

the

considerably

increased

group

re-elected

office

during the past year and
reached a record volume of $78,405,141, $10,553,815 higher than in
1947. This was an increase of approximately 15% in premiums.
{
this

and

Instead, I find that I have been

carries

underwriting earnings

GREAT AMERICAN INSURANCE—Combined

for

in,

ancient

Net

income.,.

live

0.88

Net

-

White House
two Democratic

crisis—no

houses to live with.

4.87

2.50
5.75

Equity change in unearned premium reserve
Net

housing

the

an

the entire New Deal

was

In

•

of

duty

At the
£.

Thomas

publican
President

sole

the

in the

made

of

days"

community and see what happens
opposition to them. But they ought not to
party is opposition.
They urge do it as Republicans. They ought
Republicans in and out of Con¬ not to get their personal preju¬
dices
confused
.with
the basic
gress to fight every proposal of a
Democratic
administration,
re¬ •aims the Republican party has re¬
gardless of its merits. This group peatedly set forth in its platforms.
also honestly
The people who want to turn
believes and says
the clock back are a very small
with considerable vigor that all
Republicans who support
these percentage
of the Republican
party,
though
sometimes
they
forward-looking
programs
are
"me,
too"
Republicans and no seem to make all the noise. I
believe that 95% of all Republi¬
better than New Dealers.

re-

h i p

s

events

lear call to duty. But last November it turned

century.
They also take tne position that

city of Washi n g t o n ..will

an

<

old

"goocl

nineteenth

a

my

o n

great many others, that I had a

a

some

kind

result,

INSURANCE—Combined net

group

outpromise the Democrats."

great pleasure to come to Washirgton—even if it is only for a visit. At one
time last year I expected to come for a longei
stay. I was under the impression, which was
out to be

premium volume continued to rise,

as

was

the fact

indeed encouraging

was

reported by

cannot

It is

of

are

adopted

assembled.

I

They

are

in

believe

convention
that

we,

as

representatives of our party, are
bound by these principles and are
under a duty to carry them out.
Those

who

rushing tragedy/
Congress forced
for aid to China.

istration failed

icy

and

that

good.

they are right; they pre
officially declared principles
the
Republican
party
as

solemnly

Fifteen months ago I called the
attention of the nation to the on-

disapprove of these

principles and want to fight them

and

tions.

our

the

But the Admin-^

utterly in its pol¬

its
implementation of
succeeding appropria¬

We

spectacle

The Republican
appropriation

an

now

of

see

the appalling

people,

400,000,000

traditional friends and

allies,

Chinese, threatened with

com¬

plete Communist conquest.
We

witnessing

are

resenting

a

the

fright¬

all Asia, rep¬
majority of all of the

ening spectacle

of

people of the world,'falling ever

(Continued

on page

38)

Volume

169

COMMERCIAL

THE

Number 4776

1

&

FINANCIAL

CHRONICLE

(667)

15

......

Congress and Problems oi Small Business
By IION. JAMES E. MURRAY*

NSTA Notes

U. S. Senator from Montana

•

Senator

Murray, asserting major economic problem facing nation is to prevent serious depression,
and,
on other
hand, to prevent growth of centralized economic power, contends we must revise, modernize
and strengthen our antitrust and unfair trade
practices laws. Looks for 81st Congress to enact legisla¬
MEMPHIS
At

SECURITIES

DEALERS

tion to maintain maximum

CLUB

I

meeting of the Memphis Security Dealers Club held Jan. 21,

a

1949, the following officers

elected:

were

claim

can

in the creation of the Senate
a c

t i

o n

peared

a

time

as

sult

Special Committee

the

I think you

the

but

House

business

with

con¬

result¬

cerns

from

great

depres¬

came

;

Trexler

President—R.

>

Fred

a

useful

Richard S. Harris

small business

lution

was

real

Nathane,

Merrill

Lynch,

Pierce,

Fenner

& Beane.

Vice-President—C.

Arnold

Taylor,

William

P.

Harper

Son

&

& Co.

was

the

Secretary—Homer Bateman, Pacific Northwest
L. Stein, Bramhall & Stein.

Company.

Treasurer—W.

In Louisville's Industrial Growth

In

memorandum

a

the

small

America.

That

Senator

from

newspapers
issues of stock.

received

the

mone y

their

-

-from

s

"During
local

for
tart

this

total

a

15

investment

of

dealers

had

the

tion,

companies and, in addi¬
maintain markets for the

bankers

older

ones.

the

compa¬

nies

have

C.

King

the

services

of

in Louisville

were

funds.

Later

some

orig¬

or pri¬
of these

through

the issuance
bonds, marketed by
local dealers, offered an interest
to the public in their
company.
There
are
local
concerns
that
of

stocks

or

-

might

not have

made

the

grade
had the help of
financing as worked
out by local investment dealers.
The part played by these local

had they
long-term

not

investment bankers in the indus¬
trial
and
financial
growth
of
Louisville can best be

local
used

list

stock
as

a

of

if the

seen

quotations

is

guide."

1934," Mr. King points
further, "there were quoted in

the local newspapers, under Local
Stock Quotations, a total of 23
different issues of stock.
Of all
the

concerns

in Louisville at that

time, only 23 issues of stock
outstanding

in the hands

public to the extent that

quoted
years

market

was

were

of the
a

given.

daily
Five

later this list had grown to

40 issues.

in

By 1944,

a




war

period,

time

and

educating

the

to

curities.

up

so

much

continue

ever

since.

problems in the coming

because of the knowledge
plight of small business
through
that
committee
succeeded, in 1942, in set¬
the Small Business Di¬

in

Board

and

the

War

later the

Small

Today,

small business

aid

small

from

in 1940, he sees
presenting one of

as
as

faced

business,

with

owning

of

building

local

se¬

dealers

have

did

a

ting

through

to

our

be

told

Truman

free

enterprise
and

strong

Clothiers

the

economy

healthy,

and

Furnishers,
York City, Jan. 25, 1949.

proper con¬

interests
those

be

not

subordinated

we

And

driving
up

store,

big business and its fu¬
ture
growth be not diminished
through the imposition of govern¬

war

ment

procedures favoring
monpolistic enterprises.
Effects

business for the

of Business

There

it

the

was

be

can

has

years

Concentration
doubt that

no

independent

the

obvious

that

trations

of

are

able distribution of
the

clothing

war

own

and

either

as

chairman

huge

concen¬

industry

expansion of small inde¬
business.
So,
if small

organize

conduct

and

Adantic Coast Line Railroad
2Vi%

watched

this

trend

monopoly develop.
We have seen
gradual elimination of the small

a

in

business

concerns

of

the

country

during the depression, while
(Continued

or

on

page

:

Equipment Trust, Series J

Equipment Trust Certificates

To
To be

mature

annually $711,000

on

each March 1, 1950

to

1964, inclusive

guaranteed unconditionally

as to payment of par value and dividends by endorsement
by Atlantic Coast Line Railroad Company,

in

Priced

to

yield 1.45% to 2.80%, according to maturity

Issuance and sale of these Certificates are

subject to authorization by the Interstate Commerce Commission,
Offering Circular may be obtained in any State in which this announcement is circulatedfrom only
such of the undersigned and other dealers as may lawfully offer these securities in such State.

The

continue this phase of the in¬
business and trust that

we

have

can

Other

hand in the future

a

and

State

local

local

associated with

us

on

HALSEY, STUART & CO. INC.

industries:

dealers

been

have

of

some

,

A. G. BECKER

R. W. PRESSPRICH & CO.

,

our

underwritings. We hope that this

EQUITABLE SECURITIES CORPORATION

&

CO.

INCORPORATED

HORNBLOWER &

WEEKS

fine relationship will continue and
can

all

local

work

investment

dealers

tries."

LEE

HIGGINSON

"Oft ./

■

The

BOSTON,
Kammer

Estabrook

members
Boston

has
&
of

Stock

Financial

WILLIAM

the

A.

staff

New

MICHIGAN

CORPORATION

& COMPANY
BLAIR

THE

ILLINOIS COMPANY

& COMPANY

BURR

&

f WM. E. POLLOCK & CO., INC.

COMPANY, INC.

HAYDEN, MILLER & CO.

York

Exchanges.

McMASTER HUTCHINSON

&

CO.

SWISS AMERICAN

CORPORATION

of

Co., 15 State Street,
the

FIRST OF

Chronicle)

MASS. —Robert
joined

PHELPS, FENN & CO.

(INCORPORATED)

L. F. ROTHSCHILD & CO.
FREEMAN

to

CO.

0;'

Joins Estabrook Staff
(Special

OTIS &

CORPORATION

together for the further

development of Kentucky indus¬

and

big

43)

vestment
of

we

toward

(Philadelphia Plan)

the underwriting and distribution
of local securities,
Success in this

to

its

fight for survival.

During the past two decades
have

contracts

industry

these

business and

business is to remain in the field, it
must

other segments of small business
enterprise. Throughout those
many years,

or

pendent

We had the same difficulty in
seeking to bring about ^n equit¬

in

enterprise system

not interested in the preserva¬

tion

inde¬

other such small

free

of the chain system of mer¬
chandising, and the expansion of~
monopoly in American life.
It is

$10,665,000

in

field has not been without disap¬
pointments and set-backs, but the
knowledge gained will be of help
on future operations.
We expect

the

sion

their Own sales outlets.

and

whole

'

and

specialized

huge,

future of small business and that of

Small

pendent businessmen."

New

"The Bankers Bond Co. for the

26

to

of

I

financial position of Louisville.
past

shell

mainstay of our economy be rec¬
ognized. It must see to it that its

In

At that time I said, "These ma¬
jor companies are not limited in
their ambition to monopolize the
tire business; they are now reach¬
ing out to compete with the inde¬
pendent clothing merchant, the
hardware store, the sporting-goods

few weeks ago, on Jan. 5,

President

in

hand

a

industrial

the

up

the

trying

years.

sideration in Washington.
It must
demand that its basic role
£is the.

Smaller War

business in the

be

problems and demand

tire dealers out of business by set¬

the major problems of the nation.

in¬

and

big

trade organizations as yours, must
concentrate on the study of these

Production

Corporation.

to

money

the

merits

Investment

Louisville

that

"Back in

out

vestors

advantages

used

companies,

much

spent

was

Charles

inally financed by family
vate

of

Making markets for

old and new companies
lot of work for the deal¬

a

and

ers

investment dealers in securing ad¬
ditional working
capital. Many
concerns

these

meant

ties,::^ o 1 d to
the public, by
dealers.

trend

is threatened by the rapid concen¬
tration of ownership, the exten¬

Small Business Com¬

new

all

sale of securi¬

Older

growing

why I feel
tonight that

| create markets for the stock of

local in-

these

is

you

to

vestment

through

the

That
tell

period

y e a r

-

lib

must

the

joined with
fight for the cre¬

must

local

Louisville

I

with

he

as

America.

that

prevented the tire manufacturers

"If

corporations

problems today

manufacturer in

much in mind back

ville, Ky., Charles C. King points out "few people realize that local small business the freedom and
investment bankers played a part in Louisville's industrial and finan¬ opportunity to grow and prosper.
cial growth. Many take for granted that certain local industries
this
purpose,
we
should
'just To
grew,'
like
"From address by Sen. Murray
'Topsy.'
Sel¬
this list moved up to where 74
dom has this
issues were daily quoted.
A five- before the Annual Banquet of the
Association
of
Retail
happened.
year span brings ws iu i9ta, ana National

in

in

Business Committee which, in 1943,

is

toaay mere is quoted daily in the

ing the independent businessman

Through this action we
prevented the gobbling up of war
contracts by
huge monopolistic
enterprises and kept the small

Congress—and I quote:

Numerous

doubt
White

much concerned

businessmen

vision

to

re-invigorate the forces of
>We < must
assure
Louis¬ competition.

prepared for the Bankers Bond Co. of

have always been conscious of the
multitude of problems confront¬

period.

Mis¬

of

other Senators to

Just

King, of Bankers Bond Co., Louisville, points to work
investment dealers creating markets for stock of new com¬
panies and maintaining markets for old ones.

of local

reso¬

member

Committee, I

and

fact, we
caused to be set up in all the
government agencies in Washing¬
ton small business units designed

had had

minority
Business

duration.

1949,

Charles C.

befall

in

very

no

the

Small

there in 1940 when he

mittee.

Leading Bole Played by Local Financing

who

we

Plants

souri, Harry S. 'Truman.
He had
the problems of the small busi¬

ation of the

Giles

man

can

then

nessman

the

ting

know of the vicissi¬

cause

elected

A.

Murray

program.

one

to
meeting of the Bond Traders Club of Seattle held at the
Washington Athletic Club on Jan. 28, 1949, the following were tudes which
officers for the coming year:
businessmen
a

President—Robert

E.

Among the signers of that

BOND TRADERS CLUB OF SEATTLE
At

Jas.

organizations in the

production

war

was

that
Sen.

blems of

Secretary—Walter T. Foster, Carl M. Loeb Rhoades & Co.
Treasurer—B. Frank Ward, B. F. Ward & Co.

as

which has meant

small

of

in

Vice-President— R. S. Harris, M. A. Saunders & Co.

in

man

just

your

gained

the

) r o

need have

the

is

ranking

as

the

Senate

It

very

mentality
handling

by

per¬

business and monopoly, small in¬
dependent business enterprise will

to

instru¬

Benj. F. Ward

Trexler, J. C. Bradford & Co.

That

when he helped bring into
being the special committee of the

committee be¬

Fred

laws

was

the

sion. Later the

R.

that

ranks of small

ing

antitrust

our

consolidations."

mor¬

in

the Problems of Small Business.

on

closing those loopholes that
mit
monopolistic
mergers

re¬

of

serious

tality

strengthen

the
a

,

<£-

p-

neces¬

at

sary

income.

familiarity with small business and with

many of the obstacles it
1940, I introduced in the Senate the resolution which finally resulted

Back in

encounters.

production, full employment and equitable distribution of national

certain

a

1

MULLANEY.WELLS&. COMPANY
February 8, 1949.

SCHWABACHER &. CO.

EDW. LOWBER STOKES CO.

16

COMMERCIAL

THE

(668)

scher,

FINANCIAL CHRONICLE

&

also

was

Girard's Board

is

Duane

News About Banks
NEW OFFICERS,

the

Mr.

director of the Phila¬

a

Saving Fund Society as
Philadelphia Contributionship for the Insurance of
Houses from Loss by Fire, and the
well

Bankers

and

ETC.

REVISED

to

Managers.

delphia

CONSOLIDATIONS
NEW BRANCHES

elected

of

the

as

Theodore Presser Co.

\
Farmers

Deposit

National

Bank of Pittsburgh announced on
Feb.

John

Dalrymple has been
pointed
Vice-President
of

ap¬

the

Grace National Bank of New York

wick, Canada, said the Brooklyn
"Eagle" of Feb. 1, Mr. Rowley en¬
tered the banking field in Nova

youth and in 1913
came
to this city as Cashier of
the Bank of Long Island in Ja¬
maica.
He was appointed a ViceScotia

a

as

President of the Manhattan Com¬

after it absorbed the Bank
Island in 1920. Nine years

pany

E.

became

pany:

held

He

President.

named

was

holding firm, he

a

that post

until 1932 when he re¬
signed to devote himself to various
industrial enterprises. In the same
be

to

ceased

institution

Manhattan

the

year

holding company,

a

resuming its banking functions as
The Bank of the Manhattan Co.
John

Dalrymple

Feb.

16.

He

of

the

President

was

formerly

First

National

Roselle, N. J., and more
recently Executive Vice-President
Of the Lafayette National Bank of
Brooklyn.
*

:jj

Wonacott

N.

17

for

years Treasurer of the Board of
National Missions of the Presby¬

terian

Church, has become

asso¬

ciated with Central Hanover Bank
and

Trust

Co.

of

New

York

as

consultant in the field

of philan¬
thropy. Mr. Wonacott has devoted

almost

his

munity
1900

entire

service

to

life

com¬

projects.

he

1917

to

From
the

with

Was

Portland Y. M. C. A., advancing to
the post of Executive Secretary.

During his tenure of office, this
institution, it is stated, grew to
have* resources of over $1,000,000
and at the time the largest mem¬
bership of any organization of its
kind in the world.
the

outbreak

devote
money
an

his

for

He

resigned at

of World

energies
war

War

I

to

American Red

Food

He

Herbert Hoover and

the

Later Mr.

under

Liberty

Wonacott

became Vice-President of the At¬

lantic,

Gulf

West

and

Indies

Steamship Lines in New York. In
he

returned

to

Oregon, and

from 1924 to 1928 he
in Portland.

ness

2$

Industrial

For

Central

years

was

Mr. Raney, who entered the
bank's employ as a bookkeeper in
1905, served the bank for 41 years,
retiring in 1946. He became Con¬

lyn.

troller in 1931.

in busi¬

than

more

Hanover

has

*

*

of

Bank

tal, effective Jan. 14, from $350,000
to $400,000 through a stock divi¬
dend of $50,000.

Cashier

The Southbridge National Bank

Southbridge,

of

by the Worcester County Trust Co.
of Worcester, Mass. The offices of
the Southbridge bank
are now
operated as a branch of the trust
company.
The plans for the tak¬
ing dver of the bank were noted
in our issue of Dec. 23, page 2667.
*

•.<

Frank

Vice-President

Assistant

Bloomfield

Bank

elected

1

as

"News"

that

states

'

he

institution

the

with

been

of

Vice-President, retaining
Comptroller. The New¬

his title
ark

Co.

Feb.

on

was

the

of

Trust

&

Bloomfield, N. J.,

has

since

It is also stated that three

1924.

posts

new

of- Auditor,

Assistant

Treasurer and Assistant Secretary

created

were

to

cover

work

done

respectively by James P. Denni-

son, Donald S. Slater and Harold
Brotherhood, who were named to
the positions. From the "News"
we likewise quote:
to assist benefactors in wise
pub¬
"The temporary title of Honor¬
lic giving.
Mr. Wonacott's serv¬
ary Chairman was conferred on
ices
will
be
available
to those
Allison Dodd, a founder and for¬
interested in the field of

maintained a Department of Phil¬
anthropic Information and has de¬
veloped a comprehensive library

philan¬

thropy.
■

*,

*.

*

*

T. Arthur Nosworthy, President
Of

The

Bronx

Savings

Bank

of

New

York,
has announced the
elections by the board of trustees
of Mrs. Beatrice Petry to Assistant

mer

President

of

and

its

Chairman

from Auditor to

Comptroller.

dent

of

Rowley, former Presi¬

The

Bank

of

the

Man¬

hattan Co. of New York, died on
Jan. 31. He wa«? 65 y^ars of
age.

Born in Fredericton, New Bruns-

institution

for

12

officials said Mr.
Dodd, whovis ill, would resume
active Chairmanship as soon as
his health would permit."
"

,'■

*

1

i

:•

Federal Reserve

The

for

System

announce

Company

Pennsylvania

Banking and Trusts of Phila¬

delphia,

Pa.,

Jan.

the

24,

absorbed, effective
Security Bank and

Trust

Co.

State

members.

with

the

of

Philadelphia,
In

The Board of

Trust

60

offer, subject:
Dollar

Savin-s

absorption
well

as

vania Company.

Youngstown., Ohio
60

as

the

former

its branch

will be operated by
&

Tr.

@

V-

56

'*

'

U.

Amsterdam, N. Y.

the

Reliable-Fire

K:

*

■>

•

Process

Houdry

Corp.,

&

Federal

Reserve

@

32

Powell

NEW YORK




of

Bank

Cleve¬

land for the

unexpired portion of
ending Dec. 31, 1949. Mr.

the term

Swensrud

Howard

succeeds

Co. of

has been elected

a

Catalytic
Philadelphia,

member of the

Co.,

First

$

National

Bank

Bulletin" of that
time Morris

same

capital of the
of

Chi¬

from $400,000 to $500,000
as

is
of Dec. 23, through

stock dividend of $100,000.
*

Commission

of

President

He is

1942.

the

of

Commerce

States

Bank
as

Trust

&

Co.

of

St.

member of the Advis¬

a

Re¬

Council
duction.

of

the

Federal

serve

luncheon at the bank

luncheon

The

tended by the

was

Mr. Heming¬

has long been active in bank¬

way

Commerce

of

He is also

a

Pro¬

and

member of

the board of directors of the Na¬
tional Foreign Trade

Council.

The title of the Utah State Na¬

Bank

tional

Salt

of

Lake

City,

at¬

directors and senior

officers of the bank.

the

of

American

-

commem¬

orating Mr. Hemingway's comple¬
tion of 30 years on the board of
directors.

Inter

Council, which is the United States
section: of
the
Inter-American

Board*
representing
the
Eighth. (St. Louis) Federal Re¬
serve
District, was announced at

Council

ory

of

and

Chairman

is

He

merce

States

United

several committees of that organi¬
United

Louis

in

Association

member of the board

a

zation.

Chairman

Hemingway,

American

the

-

directors of the

Chamber

14 the selection of W.

of

Bankers Association and served as

of

Utah,

changed, effective Feb.

was

1 to the Utah First National Bank

Salt Lake

of

City.

Bankers Trust Holds Further Credit Restraints
Not Needed
In annual review of money and government

bond market, New York
banking institution points to indications of stable interest rates,
accompanied by reduced demands for credit, as eliminating serious
inflationary threats.
In the annual review entitled "United States Government Secur¬

ities and the Money Market," issued on Feb. 8 by the Bond Depart¬
ment of Bankers Trust Company, the belief is expressed that interest
rates

during 1949 will probably remain comparatively stable at about
levels and that sales of<jt>-

present

$

will

banks

less

be

during

than

ness

outlook

substan¬

credit

the

September.

past

The Bank finds

no

further need

for credit restraints at the

and-see

present

boom has passed its peak and

The stockholders 6f the Detroit

sihee

were

The

have

thorities

year.

further restrictive

no

measures

taken after

monetary

adopted

au¬

wait-

a

attitude."

Commenting

time, since the postwar inflation¬ policies

V.

$

tially

ary

the monetary

upon

followed

in

the
year,
observes

Bankers Trust Company

slackening of industrial
Bank of Detroit, Mich., at their
production and a moderate decline
annual meeting on Jan. 11 voted
in business activity also appear to
a
common
stock
dividend
of
be in prospect.
111/9% (one full share for each
"Some reduction in demands fbr
nine
shares owned
of
record),
credit and
investment funds
is
payable Feb. 15 to shareholders
of record Jan. 11; and authorized anticipated, and it is reasonable
to expect that sales of Govern¬
the necessary increase of 25,000

that the controversy over the bond

Re¬

largely spent themselves and com¬

shares of

stock

common

total

the

amount¬

This will increase

number

of

common

shares

outstanding to 250,000, hav¬
ing a total par value of $5,000,000.
President Dodge reported that on
Dec. 31, 1948, the resources of the
bank reached a new high reported
statement
level
of
$556,647,217,
and in

funds including
general reserves increased $4,223,000 to $22,447,000, as a result of
retained earnings and an increase
in common
stock.
During the
year an additional 50,000 common
shares were sold at $60 a share,
adding $1,000,000 to the common
capital and $2,000,000 to surplus
account.
18,500 shares of pre¬
ferred stock, with a total par value
of $370,000, were retired, reducing
the number of shares outstanding
capital

to

150,000,
$3,000,000.

with a par value of
The preferred stock

retirement

fund

increased

was

$250,000 to $3,000,000 by

a

transfer

from undivided profits an amount

equalling the preferred stock out¬
standing."
Total

deposits

at

the

year-end

$531,107,000. An earlier item
bearing on the proposed stock
dividend appeared in our issue "of
were

Dec.

bulletin

of

of

the Currency re¬
that effective Jan. 17 the
capital of the Michigan National
ports

of

Lansing, Mich.,

by

a

was

stock/dividend

in¬

Of

$1,000,000 from $3,000,000 to $4,000,000.
v
.v:ft

Guy W. LaLone has been elect¬
ed

President of

the

National

haha

First Minne¬

Bank

of

'Minne¬

apolis succeeding J. G. Byam, who

the

of

the

to
Feb.

1

Presidency

board.

While

Minneapolis
is retiring from
and
from
the

previously holding

the office of Vice-President of the

bank,

firm

chosen

of which

he has just been

President,

bonds
banks

less

than

should

Mr.

the

to

will

in

selling,

Federal

be considerably

1948.

be another

there

Unless

period of scare

stabilization

gained

program

in

in
1948, but subsided
the
signal change in the

intensity
with

credit situation toward the end of

the year.

"When the controversy
height, however, the
inflationary forces had already

was

its

at

modity prices
ward."

turning down¬

were

it

As

worked

out,

the

supply of the country de¬
$2 billion in 1948, in

money

clined

over

volume of Reserve
will probably not spite of support buying, and is
any
serious credit prob¬ now only slightly higher than it
lems," the Bank states.
"On the was at the end of 1946. Although
other hand,
if the demand for the Federal Reserve authorities
the

Bank purchases
create

i t ies

s ecur

remains

strong, the Federal Reserve banks
are

doubt ready to sell Treas¬
bonds in substantial amounts,

no

ury

if necessary, to prevent an

rise

undue

in

prices.
It seems likely,
therefore, that prices of Treasury
obligations will move in a com¬

paratively

narrow

range."

asked

Congress

broader
ments

of

credit control, the Bank

that

notes

have

repeatedly
for
new
instru¬

and

powers

developments

demonstrated

devices

to

situation

that

with

cope

in

1948

no

new

the

credit

were necessary.

"It has become equally obvious
that severe credit restraints, which

sharp business recession is might have disturbed the financial
anticipated, according to Bankers markets and reduced production,
The
Trust
Company,
although
the would have >" been unwise.
bank cautions that it is impossible basic change in the price situa¬
tion during the past few months
10 foresee how fast or how far the
No

decline in prices and business ac¬

confirms the belief that the mod¬

tivity

erate credit measures undertaken

go.

may

business

profits

"A squeeze on
through higher

by the monetary authorities dur¬

and lower ing the past two years have been
Stable bond prices and
prices, could lead to larger cut¬ ample.
backs in capital expenditures than the absence of severe credit meas¬
are now expected."
ures increase the possibility of an
readjustment from; the
Economic trends and the credit orderly
taxes,

higher

wages,

situation have changed
in

materially

1948, the Bank finds.

duction

Office

the

Comptroller of

Bank

ment
serve

high

traordinarily

23, page 2667.

The

a

Government

part also said:

"Total

Duane,

of the Philadelphia law
of Duane, Morris & Heck-

;:v'/VV';

*

member of the Executive Coun¬

cil, the Administrative Committee,
Finance Committee, and Marine

of

Government bonds to the Federal

National Bank

Mid-City

"Star"

"Evening
At the

the

with

and

a

tne board of the Mercantile-Com¬

Reserve

Trust

the

' *

On Jan.

Linn

of

stock.

new

An increase in the

according

city.

,

*

•

a

National

W.

dividend, while the $50,000
was brought about by

the sale of

Board of

Managers of the Girard
Co. of Philadelphia, it is

First

/ i-';

Pennsylvania
Jeannette, Pa., who

capital on Jan. 7 from $125,000 to
$250,000; part of the increase—
$75,000—was
represented
by
a

cago

First

The

National.

Minnehaha Bank is affiliated with

Chicago Heights, 111., increased its

stock

First

at

ers' association work. He has been

President,

•4?

The

of Minneapolis,

He will continue to make his of¬
fice

resigned.

and

learned from the Jan. 25 issue of

Kenney

Reserve

S. Army, retired, President of

Construction

Insurance

Dayton, Ohio

Governors Of the

System
an¬
nounced on Feb. 3' the appoint¬
ment
of .Sidney
A.
Swensrud,
President of the Gulf Oil Corp.,
Pittsburgh, ,Pa., as a director of
the
Pittsburgh
branch
of
the

creased

Brig. Gen. David N. Hauseman,

Montgomery Co. Trust
@105

office

The Pennsyl¬

Chairman of the board of
50

Federal

both

connection

main office of Security Bank and

W-e

and

Vice-

'

The Board of Governors of the

that

Park A.

the

Bank

years.

Secretary, and Martin H. Bleuthftec

Board

becoming

ing to $500,000.

*

Comptroller and

\Puleo,

Auditor

was

National

First

the

of

with which
he has been associated since 1929.
Bank

a

(capital

Mass.

200,000 common) was placed in
voluntary liquidation on Jan. 17,
its business having been absorbed

;

he

before

announced

*

*

Mervyn

capi¬

Yonkers, N. Y., increased its

*

of

Vice-President, after

additional

*

National

Central

The

was

Cross,theY.M.C.A.,

Administration

Loan drives.

1&23

formerly Con¬

Savings Bank of New York, died
Jan. 31 at his home in Brook¬

raising

to

purposes.

organizer and executive for the

the

Thomas J. Raney,

troller of the Emigrant

on

Bank,

Charles

that

and

Jordan,

*

*

retirement

as

President.

Rubber

where, he will begin his new duties
on

>;}'

*>

the

47 years of service. In the Pitts¬
burgh "Post-Gazette" of Feb. 2 it
was stated that Mr. Boyle, entered
the bank as a messenger in 1901

of Long

later, when the Manhattan Com¬

1

Boyle

President

First Bank Stock Corp.

■

CAPITALIZATIONS

The

principal position is that of Vice-

the

'!=

*

Thursday, -February 10, 1949

level

together with

of

pro¬

fiscal and

monetary developments, helped to
check the inflationary boom.

budget
a

was

large surplus enabled the Treas¬

to retire substantial amounts
of debt held in the banking sys¬
The rise in bank loans was

substantially smaller than

in the

preceding year. In contrast to the
selling wave that marked condi¬
tions

in

market

bond

at

tone.

"The

came

a

apparent
funds
With

Federal

seller

was

of

shortage
no

a

of

credit

no
are

at
the
present
time.
prices declining and many

and

borrowers

business

lenders, ahd

have

loans

apparently

Further credit

passed the peak.

restraints at this time would add
business uncertainties.""

to

Neville R. Hasluck Dies
Neville Romer Hasluck, partner

firmer

and

be¬

the

investment

longer in evidence.

the downturn in

on

bond

Reserve

bonds

that

concludes

restraints

greater caution has arisen amdng
both

end of 1947; the
during the last two

1948 assumed

of

Bank

required
"With

the

market

months

Government

the

The
further

The soft spots developing in industry,

not only balanced, but

ury

tem.

postwar boom."

The ex¬

commodity

LaLone's prices and the change in the busi¬

in

Farr

&

Company,

New

York

City, died at St. John's Hospital,
Queens, of injuries incurred when
he
He

was

was

struck

by

65 years

an

automobile.

of age.

;

-

Volume

169

Number 4776

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

(669)

17

What About Railroad Profits?

I

By WILLIAM T. FARICY*

President, Association of American Railroads

Pointing out railroads in 1948 earned
During the past month or so railroad stocks have been acting
considerably worse than the market, generally. This has been par¬
ticularly so during periods of weakness and in the sharp break that
took place late last week.
out most of

1948 when

only 4l/%% on net investment, despite heavy traffic operated
unprecedented operating efficiency, Mr. Faricy lays low rate of net earnings to inadequate rates.
Denies railroads are pricing themselves out of market and contends rates in relation to
value of goods

with
;

.j

lower than

are

ever.

Says problem is

This is in contrast to their action through¬

their

buoyancy

times

many

was

ernment

instrumental

of adjusting revenues to costs or having tax-supported
Calls for higher Tail revenues.

one

gov¬

operated railroads.

in

bringing the entire market out of its desultory mood. Many of
Railroad profits, or the lack of them, are
primarily and immediately of concern to rail¬
trading favorites in the rail group last week dipped to new road
people, workers as well as investors. But they are likewise a matter of real concern
for 1948-1949.
There hardly appears to be any real justifica¬
to all
tion for this renewed
business—your business included, whether or not you are a direct user of railroad
pessimism.

the usual

lows

.

There has been
of

the

service.

tendency in the press and on the part of some
agencies to stress some of the influences that are
the uncertain or unfavorable side.
There has been
a

admittedly

on

some

concern over the fact that the
railroads have not yet come to
agreement with the non-operating unions as to wage increases
and the proposed change in
working hours. This has given rise to

any

fears

that

the final settlement will be more burdensome than the
recommended by the Fact Finding Board. The Board's
report
called for a seven cents an hour increase in
wages, retroactive to last

terms

October, and a change from 48 hours a week to 40 hours on Sept. 1,
1949. Despite the delay it
hardly seems likely that railroad manage¬
will be willing to go much, if
any, further than the Board's

ment

recommendation.

'

•-V;'

There

seem

to

be

fears

some

that

important recession is just
around the corner and that the declining trend of
freight volume
will gain momentum. ,As a matter of fact, the rate of year-to-year
declines has been moderating
consistently.
Car loadings for the
first week of the year were

cut to

6.5%

for

9.3%

the

ended

Jan.

■.

*

There have been

ri-:

This

week, 8.0% in the third week and
29, the most recent figures now

available.
.

an

13.2% below the like 1948 interval.

in the second

week

in traffic

so

number

a

obvious

of

reasons

for

the

decline

far this year.

By far the largest drop, both in actual cars
and percentagewise, has been in coal originations.
Partly this has
presumably been due to a decline in exports but a more important
factor has apparently been the unusually warm winter weather in
the

section

eastern

of the country.
This latter is obviously only a
Another factor has naturally been the exceptionally
heavy snows in large areas of the western section of the country.
This is also merely a temporary condition although the severe

temporary drag.

weather has continued almost without interruption up
of this writing.
There

to the time

cessive

definite

rail

rate

has been of any

increases.

they have

are

On

is

little

evidence

that

this

latter

As for the signs of softness in the general

far been largely confined to those industries
not of such great importance from a traffic standpoint.

economy,

that

There

great proportions or that it will become so over the

intermediate term at least.

the

so

favorable

side, prospects appear to point to continued
record activity in such important lines as steel, automobiles, etc.
Overall construction should remain high, bolstered by needs of the
industry,

utility
to

estimate

at

government projects, etc. So far as it is possible
time the prospects for heavy grain crops are

this

quite favorable.

broader

con¬

are

d

European aid

may

fall off somewhat but by any
The defense

normal standards export trade will again be very large.

person

should

make

profits

consumer

essen¬

consume.

an

or

persons

thing for dividends

some¬

to the stock¬
holders whose money is at risk in

where in government, with power
to
tell
the
producer
what
he

for rail-

cern,

sell

and

the venture.

the

and

Having

what he might buy and
The consequence, if we

traffic

With heavy traffic the railroads will almost

this year.

,

railway

-

tem

judge from results elsewhere
world, would be less pro¬
duction,
less
consumption—less

in

we

America

system

business is

our

people

pro¬

duce'

more

live

ter and

William

T.

Faricy

bet¬

I

enjoy wider freedom, than
people on earth.

wonder
of

sometimes
who

us

the

tie

free

live

if

between

how

the

in

profits

and

to

be

not

let's
road

a

entitled

profit

invested in any

or

on
election day.
everyday business and an

essential part of it is this freedom
of choice and action in the count¬

rate of return

with

truths

known, in the

terminology

of

lator of this ceaseless flow of

tivity.
this

a

"planned

economy" or "production for use
and not for profit"—which would
mean

that instead of

a

free and

the

net income to the

the decisions of some presumably

*An address by Mr. Faricy be*-

Operations

Angeles,

Feb. 3,

Los

Angeles,

Cal.,

1949.

nearly

hauling

herent

riskless

business

of

in

the

persons

cars

tization

on

rail

had

elected

been

to

membership

in

the

of

chairman.

•

■

-

/

-'/'r;

r

*'

,•

1

.

Edward J. Armstrong, of
Stein Brothers & Boyce, has been appointed chairman of a committee
to effect Baltimore arrangements for formation of the merged Phila¬
delphia-Baltimore Stock Exchange. Other members of the committee
are S
Grainger Marburg, of Alex. Brown & Sons; T. Stockton Mat¬
thews of Robert Garrett & Sons; W. Carroll Mead, of Mead, Miller
& Co.'; John Redwood, Jr, of Baker, Watts & Co., and Joseph W.
Sener, of John C. Legg & Co.
/v'-V:
: v--- ' -v.-VIt

100,000

from coast to coast with less than
90

tank

To

do

carloads
the

would

well

of

Diesel

require

much.

every

business

has

to

make

When

get to compari¬
used, we find
an
even
more
striking contrast.
To move 100,000 tons of freight
from coast to coast by rail takes
3,500 man-days of work by train
sons

of

we

manpower

By truck it means 90,000
man-days of work by drivers.
To

crews.

to

some¬

(Continued

on page

To be

mature

Mgr. Inst. Dept.

William R. Staats Go.

f

Hayden, Stone Go. Sixty-Two Years
Broad

Hayden, Stone & Co., 25

Street,

of the New York
announce

LOS

c

liam R. Staats Co., 640 So. Spring

Stock Exchange,

Street, members of the Los Ange¬

Ballou

les Stock Exchange, is celebrating

that H. Cushman

yield 1.25%

to 2.30%,

according

*

-

r

.

been

the

firm's

ment.

He

appointed

manager

Institutional
.

was

Depart¬
with

formerly

Dominick & Dominick.




of

.

,

maturity

subject to authorization by the Interstate Commerce Commission.
Offering Circular may be obtained in any state in which this announcement is circulated from only
such of the undersigned and other dealers as may lawfully offer these securities in such state. ' U;

HALSEY, STUART & CO. INC.
A. G. BECKER

&, CO.

FREEMAN

INCORPORATED

has

to

ANGELES, CALIF.—Wil¬

members

New York City,

to

Issuance and sale of these Certificates are
The

For

$106,000 semi-annually August 15, 1949 to February 15, 1959, inclusive

guaranteed unconditionally as to payment of par value and dividends by endorsement
by The Wheeling and Lake Erie Railway Company

Priced

Ballon

2% Equipment Trust Certificates
(Philadelphia Plan)

To

the 62nd

anniversary of its found¬

ing in 1887.
first to be

The company

was

laws of the State of California.

McMASTER HUTCHINSON & CO.

the

incorporated under the

February 3, 1949

fuel.

job by truck
the
contents
of

same

than 250 tank cars of Diesel

more

to accumu¬
help carry

it through the lean years; some¬
thing for the improvements whicr

also announced in Baltimore that

was

in
in¬

transportation is so
it is possible to move
tons of average freight

Wheeling and Lake Erie Railway
Equipment Trust, Series R

organization

method
The

of

$2,120,000

A committee to effect arrangements for the complete merger
the two exchanges was appointed, with Edward J. Armstrong as

rail¬

that

great

borrowed monev. A lvf

every business needs
late in good times to

Philadelphia and Baltimore Stock Exchange, in a joint an¬
nouncement issued on Feb. 5, reported that it is planned to begin

already

on

and things

tracks.

on

The

Exchange

which

fuel, or nearly three times as
From this total return on the
much. And to do it by air would
capital invested in railroads there require nearly 2,700 carloads of
must be paid interest and; amor¬ aviation
gasoline or 30 times as

keep abreast of needs; and

merged operations on Monday, March 7, the day of the annual elec¬
tion of the Philadelphia Exchange. It is expected that members of the
Baltimore Exchange will be named as officers or members of the
Board of Governors.
The Philadelphia Stock Exchange also an¬
nounced that J. Dorsey Brown, President of the Baltimore Stock

less

capital invested

on

March 7

on

invest¬

is far

efficiency of the rail

method

owners

as

the

more subject to risk than
railroad business.

no

trains of

but represents
earnings from opera¬

—including loan capital,
as
ownership capital.
!

too, than

United States bonds-r-

inefficiency
of

railroads,

entire

31/2%,
only about

This low rate of return

mission,

the

that it is

road investment is not due to any

by the Interstate Commerce Com¬

of

was

earth—but it

on

is the

tions upon all the capital invested

ac¬

It is sometimes urged that
that, there

should not be,
should be substituted

are

of

not the

day among producers
Andpprofit, or
profit, is both the
mainspring and the primary regu¬
consumers.

entire

less than

was

than is earned
in other lines

accounting system prescribed

and

hope

seen

is more,

on

most

ment

profits,

go on every

the

the

examine profits in the rail¬
business, and give considera¬
the effect of such

It

interest

the lack of them, not only upon

the

the

net investment

on

1946, when it

23/4%.

those

The return earned by railroads

is

rate of return

or in

as the "net railway oper¬
ating income." The term is some¬
thing of a misnomer in that it is

less millions of transactions which

is

its of only 4V4%.
is the
True, that is more than the
other line railroads earned in
1947, when the

business, but upon all
business, and eventually upon the
structure of our free society.

just something

it

net

to

the railroad

to

a

as

take to be self-evident,

we

tion to

exercised

an

earn

Starting

pro¬

that

on

property invest¬
ment, after allowing for accrued
depreciation, of $23,000,000,000—

railroad busi¬

the

much

endeavor.

which

is

freedom and the opportunity
risk loss in the hope of profit.

considered
return

essential part of the

in

In

net rail¬

a

way operating income of close to
a.
billion
dollars.
That sounds
like a lot of money until it is

the

Profits in Railroad Business

this

intimate

an

as

to

money

duction—and, even more impor¬
tant, how vital is the link between

It is

in

and then it will be

of

even

under

working

realize

is

stake

a

is

chance

system, and who
experience every day the benefits
which have come to us from its
relatively

a

system and the money which has

profit-and-loss

country,

have

let's

what the figures look like.

been risked
ness

any other

those

all

we

preservation and the workings oi
this profit-and-loss system of get¬
ting things done.
The railroad

a

under

which

and

So

do

—

the

freedom.

unaer

which

things

income,

1948, the railroads had

and

Los

Joint

operating

see

in

fore the Chamber of Commerce of

Philadelphia-Baltimore Exchanges to Begin

these

may

profitloss sys¬

holds promise of substantial freight traffic. With this back¬ flexible exchange of gopds,. and out of it there should be left
ground it is difficult to conceive of any sizable drop in overall rail¬ services we would be bound
by something for the reserves whicn

certainly again report handsome earnings in 1949. On this basis it is
difficult to see what justification there might be for the recent
renewed wave of pessimism toward the rail group.

mind

whole

program
road

in

which must be done with the net

tial part of the

Freedom

signs of softness in the general economic
picture. Also, there is no question but that some railroad traffic has
been lost to competitive transportation agencies because of the suc¬
are

even

r o a

all-wise

they

of

are

business

Another factor that has been given considerable, and continuing,
publicity has been the year-to-year decline in traffic so far in 1949.

was

And

statistical

&, COMPANY

25)

■:

Thursday, February 10, 1949

CHRONICLE

& FINANCIAL

COMMERCIAL

THE

(670)

18

Slackening Demand for New Homes

Mass, Mutual Life Ins.

Due lo Controls!

Co.'s Annual Business
\.y

SPRINGFIELD, MASS.—Policy¬

Hoyt in publication of First Federal Say¬

Morton Bodfish and Homer

beneficiaries re¬

holders and their

By WILLIAM J. McKAY

of Chicago contend, because of rent control applying to existing dwellings, present tenants elect to remain
in present homes, in which they have in effect a valuable property
right, rather than pay higher rentals in new structures.

ings and Loan Association

$62,857,000 from the Mas¬
sachusetts Mutual Life Insurance

ceived

1.

,

than ever true that Co. last
year, the largest amount f
not flourish during a cyclical boom oeriod.
since the company was organized
While inflationary conditions prevail moreover, it is inevitable that
in 1851. New business aggregated
gold-mining is doomed to become a depressed industry. At a time
In the January issue of "Savings and Home Ownership," pub¬
89,500 life insurance policies for
when
the
price-level of other ^
lished by the First Federal Savings and Loan Association, Morton
$256,830,000.
Insurance in force
Canadian
dollar
is
once more in
commodities is in a rising trend,
Bodfish,-President of the U. S. Savings and Loan League, and
full
swing.
Freshly
discovered at the year end stood at $2,785,the value of gold is kept constant
Homer Hoyt attribute the slackening aemand tor new homes to
880 000,
including group, an in¬
mines are now being brought into
ih order to avoid further infla¬
crease of $154,420,000.
Over $13,- the rental cost advantage which
production
and
investor
interest
an argument to continue rent con¬
tionary pressures.
Consequently,
tenants of old dwelling units have
in
new
gold enterprises is be¬ 650.000 has been set aside for 1949
unlike in other commercial fields,
trol and to supply housing through
because
of existing controls or
dividends, an increase of $760,000
higher costs of production can not ginning slowly to revive.
public grants, state loans, and real
over
last year's allotment.
Divi¬ these structures. Commenting on
It would appear that this grow¬
be offset by increasing the price
the
situation
in
Chicago," the estate tax exemptions. Such pro-*
dend -accumulations
and
policy
ing interest that is providing a
of the commodity.
jects will strike directly at the :
writers say:
welcome stimulus to the other¬
proceeds left with the company
On the other hand when defla¬
roots of private property and free
"In all past real estate cycles,
will be credited during 1949 with
wise
flagging
Canadian
stock
tionary forces commence to exert
new
building was sustained not enterprise in this country. If a
3%
per
annum,
continuing
last
markets,
is
based
on
a
sounder
their influence it is time to an¬
merely by the increase in the large supply of new apartment*
foundation than that which in-?
year's rate. Admitted assets of
units is created which are sub-ticipate the turning of the tide for
number of families living in Chi$1,234,396,623 showed a $80^633,spired
the
previous
gold
boom
of
the gold-mining industry.
sidized
It is
by public grants, • state
848
the early war years.
gain.: The net interest earned ?
Canadian
loans at low rates of interest and
now'becoming increasingly clear¬
gold stocks are no longer over- was 3.17% against 3.13% for 1947.
er that the peak of the war cre¬
partial < real estateY tax exempt
inflated.
On the contrary it is Railroad bonds for $3 500,000 were
ated boom has already passed, and
In this age

of managed economies it is more

production

gold

can

'

recessionary na¬
ture are becoming more apparent.
Where other industries look with

possible that at their- current level
previous shocks and disappoint¬
ments have been over-discounted.

trepidation at a vista of falling
prices and dwindling markets, to
the producer of gold these devel¬
opments mark the dawn of a
brighter era. Lower prices, a more
abundant
supply of labor, and

Present

indications

of

a

possibly a lower wage-scale, con¬
stitute exceptionally for the goldmining industry lower costs of
production, which are not offset
by

return * on the
product, or by any loss

diminished

a

sale of the
of market.
;

*

Furthermore

if

.

a.
; '
deflationary

ducive to

become acute not only
producer of gold sure to
receive the current official price
the

are

industrials: $93,268,000. bonds,

sharp recovery of the

a

total

present price. However, when con¬
sideration
is
also
given to an

parcels at

general, increase in the
official price of gold, the attrac¬
tion of investment in the securi¬
eventual

immediately
apparent. Like¬
wise when consideration is given

iS:

to

the

in

raw

increasing traffic in gold
form, at premium prices,

possession of which not only
no current return but also

the

brings
poses

of

paired by this subsidized govern-,
ment competition. The very pro¬

purchases consisted of eight
a total cost of $9,359,-

estate

interest.

.

:'f,

.

,

.

■

.

.

doubts'as to its clear legality,

cago but also
families
from

Special Display

ounce

every

escalator

their

depressed

industry.

Official policy, however, decided
otherwise and relief to the indus¬

try ; has
with
ency

instead

been

provided

the adoption of the Emerg¬

Gold Mining Assistance Act/

Already there are indications that
the Dominion's most deflated in¬
dustry is commencing to take on
new lease of
life.
Production/

the paper

issues showed the least
On the

resistance to the decline.

golds in particular
to a lesser

other hand the

base-metals

the

and

were

against the
ern

the

followed

nally

of

lead

industrial group.

a

which had fallen to less than half

peak, is slowly
forging ahead.
New prospecting
that had been abandoned follow¬
the

of-

prewar

ing the upward revaluation of the

Canadian bonds

Dewar, Robertson Firm

TEX.—H. H.
Dewar will acquire the New York
Stock
Exchange membership of
the late Donald L. Samuels, and

Mr.

Bank

York

Exchange

Stock

Alton' E.~ Robertson,

Dewar,

Hart,

King, and*-Edward H.

: •'

Austin. '
Mr.

on

Partners in the firm are

17.

Creston A.

CORPORATION

Dewar

is

V

■

America.

-

.»

-

>.

...

,

DENVER..

-

'•

The

TWO WALL STREET

H

NEW

YORK 5, N.

Y.

Available

one

NY

1-1045




are

having

of their outstanding programs

of the year on Feb.

15 at the Den¬
The subject
will be "The Investment Business
for 1949 and the Problems which
ver

Athletic

It

will

Club.

be

discussion

-John

Sullivan,

nationally known on

sales

promotion, and public relations.

Christensen,

Inc.,

moderator.'

'

will

act

Charles King & Co.
Toronto Stock Exchange

Y.

WHitehall 4-8980

Direct wire to Toronto

still

ities

annual
Feb.

John

21,
J.

nounced.

at

still

practically

there
for

is

still

mand

for

might

the

fall

be

•

in

need

the

of

of

course

a

housing

field

that

directly to socialism."

in
LOS. ANGELES,; CAL.—Henry

.

de La

could

prices

of

Chapelle has become associ-;

ated with

Paine, Webber, Jackson

&

as

Curtis,

manager

of the Los

be -Street. Mr. de La Chapelle for the
new

moderately.

past 19 years has been

This

new

contractor's

associated
I

with E. F. Hutton & Co.

"home prices
accomplished by some

of

great

effective de¬ Angeles office,; 626 South Spring

units

more

if

created,

legisla¬

our

is

Ghapelle to
Manage Paine, Webber

tremendous need
an

There

public

warning

as a

Henri de La

vancancies and

no

a

homes,

new

there

met

trol

Monday

...

Benton W. Davis Now

profit

evening,

Roosevelt Hotel,

Chairman,

an¬

is

grave

-

-

danger

that

the

by public subsidies. Rent con¬
is itself responsible for part

of the continued housing
as

we

have

shortage

already shown. This

shortage which artificial rent con¬
trol

With

.

prices level off.

great need for housing which we
have
already indicated will be

} of

Boy en,

in

will lead

have

houses at the
Since there are

prices.

current

"Unless housing

Association

the

they

present

public education in the ulti¬

action

apartments. The

accommodations

the

through

public and to

bodies.

satisfied to 'stay put' in what¬

ever

meeting

shortage

mate consequences

demand for* housing
has
been
largely met and the
great majority of families today

Inc.,. will hold their

dinner

for

if we

,

Hold Annual Dinner

Street,

the

to

tive

present hous¬

margins.,.

Cashiers

of

grants, should serve

desperation

are

the chain

of

embark upon the dangerous,

housing

if necessary
stay where they

and

homes

new

T.:/;
recital

mere

course

ing market is due to the fact that
there is too big a gap between
rents
in
rent-controlled
apart¬
ments and the rents or prices of

reduction
-

once

more

in the

annu¬

of events that would ensue,

as long as

lull

insurance, savings,

fixed salaries for their in-*

or

"The

paying not over 15% of their
income for rent and who" could
pay

power

and

come.

are

to

life

on

lower

would

of the dol-.
jeopardize the
all families dependent

more

welfare of

it

end

purchasing

lar

homes

as

the

In

the

Gerald Peters, Peters, Writer & Towering

Wall

61 Broadway, N.

tion.

rather than pay for

j

.

panel

a

Bosworth,
Sullivan & Co., .Don Bromfipld,
Garrett-Bromfield, and Charles B.

with

The

'

WORTH 4-2400

Group of the Invest¬
Association and the

Club of Denver

Bond

Wall St. Cashiers to

Members

tenants in

who are enjoying rents
$12 a month a'room with
steam heat, janitor service, and
decorating all furnished will not
move into new apartments renting
for $20 to $25 a month a room.
Chicago

of $10 to

"The

Oil Industry
Information

the .771,000

of

jority.

they are receiving
this subsidy ill the form of arti¬
ficially low rents.
r

Rocky

by

because the rents of new and property investments. Finally,
apartments or the cost of owning if this process would continue unnew
homes
was
only, slightly^
every family in the upper inhigher than the rents in the best come half is taxed to the limit of
of the older dwelling units. Today,
their capacity to pay for homes
there is an abnormal differential for the lower income half, there
between the rents of apartments
will
be" pressure to issue more
erected before World War II and
government bonds and to increase
the rents of those recently erected the national debt for housing pur-,
because of rent control. The ma¬
poses. This would be sheer infla¬

will continue, to

ment Bankers

•

f '

j

COLO.—The

of

place

afford

." 5; V,

will Confront Us."

Western Canada

INCORPORATED

General Instrument

for

Panel Discussion

;

A. E. AMES & CO.

stockholder-

director of

/,;>

Roth,

CANADIAN STOCKS

margin

established. This moving took

industry.

Rocky Mf. IBA Group :

of the

President

Investment Bankers Association of
VI

which: will

was

are,

Commerce Build¬

of

John.W. Pancoast, W. Lewis

MUNICIPAL

sey

Mountain

Feb.

is

display

this

series

a

A.

ANTONIO,

Dewar, Robertson & PancOast, Na¬
tional

Ferdinand

homes were

vancancy

a

subsidies

value

apartments

in

the products of

feature

'Corp.

ing, will become members of the

PROVINCIAL

of,

relations

New

GOVERNMENT

first

Bernard

Kohn,

and

that

Straus—state

the

McMann,

To Be NYSE Members
SAN

E.

Wallerstein

emptied- and

and

just of all, the middle and upper
income groups will have to pay
higher Federal and state in¬
come taxes for the very develop¬
ments that are reducing the value
of their own
homes, mortgages

The

continued until

process)

New Jer¬ They have been given a valuable
property right,, or the privilege of
1 *:/,■ .-v 'v.;.,
Following .'this :vdisplay- at 31: occupying quarters for $40 to $50
•Clinton Street, the entire exhibit a month which would rent for $75
the
will be
moved to the business, to $100 a month in a free market.
Several hundred
thousand fam¬
branch'of the Newark Public Lib¬
rary,
according
to
Vincent
Js ilies in the city of Chicago who

inclined to move
general trend. West¬
oils after earlier firmness fi¬

degree

firm—Richard
S.

by. the shifting of
old
houses
and

the oldest and poorest

of

Canadian dollar as a means of re¬

Hoyt

apartments into new quarters.

NEWARK, N. J.—A complete
display of all the products manu¬
factured
by General Instrument

•

viving

Homer

Bodfish

Morton

Richard Kchn Features

the

lower

homes

the metal it would be difficult to dispute Corp.-of Elizabeth, N. J., and its
the superiority of gold shares as
mined, but there would also be
a
convenient investment medium. wholly-owned subsidiary; the * F.
high prospects for an eventual
W. Sickles Co. of Chicopee, Mass.,
During the week the demand
price increase.
In a-period of
is
featured
in the windows
of
for
high-grade
external bonds
falling prices, diminished business
Richard E. Kohn & Co., 31 Clin¬
was
still in evidence but offer¬
activity, and highly competitive
ton Street, members of the New
were
increasingly -scarce.
export markets, resort to the his¬ ings
York. Stock Exchange.
Included
toric remedy of currency, devalua¬ Internal Dominion's.were slightly
in the exhibit are approximately
tion and the marking up of the firmer although free funds eased
30 products which General Instru¬
rather sharply after their recent
price of gold becomes a distinct
ment—one of the. largest manu¬
The corpo¬
possibility.
"' •• " "
" display of strength.
facturers of component parts for
rate-arbitrage rate also continued
In the past the hopes1 of the
the television and radio industry
to decline.
Stocks were generally
Canadian gold interests had been
—and its subsidiary manufacture.
lower
in
sympathy with New
pinned to a devaluation of the
;
Partners of the stock exchange
York and the industrials led by

for

which
private,
in¬
creasing vacancies in them and
lowering
their
rents
or
sales
value, will also increase real es¬
tate taxes on private property be-,
cause
these government projects
will not pay full taxes. Most un->

will

public

of

gram

233, with an average yield of ap¬
proximately 5%.
New mortgage
loans were $31 215,000 at 4.04%
average

existing homes and the safety,
would be im¬

of home mortgages

portfolio to $323,475,000. Real

gold-producing companies

of

ties

$9,-

977,000 preferred stocks. The pur¬
chase of public utilities raised the

con¬

now

tions, tenants will be drawn from
the
older
privately constructed
buildings so that their vacancy
rates will rise sharply. The value

retired and $2,000,000 pur¬

or

chased. New investments included

gold-mining industry even 0:1 the
basis of the maintenance -of the

.

*;

pressures
is

conditions

sold

has brought will

be used as

Mitchell, Hutchins

Mitchell, Hutchins & Co., mem¬

>

bers of New York Stock
and other
nounce

become
in

that Benton W. Davis-'has,

associated

the

New

York

Street.

Mr.

Davis

with

Exchange

principal exchanges, an-*

with the firm

office,
was

1

Wall

formerly

Jacquin, Bliss & Stanley. ;

-

Volume

Number 4776

169

THE

COMMERCIAL

&

FINANCIAL

The

By ODY H. LAMBORN*

Leading sugar broker analyzes pros and cons in current statistical and economic situation of the sugar
market, and predicts, despite current heavy sugar production, prices of sugar in first half of 1949 will
be higher. Says refiners have still to purchase a
very large line of raw sugar for their melts in March
;
"
and April and beyond.

Countiy

viding the major portion of government support, of
employment, of philanthropy and individual incentive.
a

them the
ties

and how most of
sors

As

in

our

this

mits

country,

the

not return

existed

so-called

Sugar

Ac t.

all,

there

it

flag-waving if you will.
Certainly we need not trample our
flag and what it stands for—what the
United States has done, and is doing
in order to challenge our youth to
better what is still the most perfect
Ford
R. Weber
governmental and social system that
the world can present. Yes, let the orators, hurl the
challenge of improvement, but with ; still greater
force let them hurl the challenge for the preser¬

was

a

probably
hard-put to maintain their
ent

Conse¬

v e.

have ;

Ody H. Lamborn

many

to

thinking.

In

change

these

conscious

the

But

interested

in sugar.

For

Example

The
of

"Suppose it is 1938. You and I have saved $10,000
are
able to borrow $10,000 more: We buy a

and

small

That

oven.

leaves

"During the next ten years business, is good.
pay the high taxes of the war years and still
make a profit. We are able to save a little to pay
off some of our debt. When prices shoot up at the
war's end, it costs us more and more to buy flour
We

store.

grocery

bulk sugars into smaller

find

we

that

packages.

refiners have

bags,
the

paper

finers

of

are

pound

one

specialties.
now

of

cartons

and

Some

re¬

equipped to pack¬

than half of their pro¬
grocery
store
sizes
ready to be passed over the coun¬
age

more

duction

in

ter

to

can

pack

the

duction

housewife,
much

as

in

retail

Trucks
In

and

some

Brand

still

another

sector

the

war,

ahead at

ing the

tremendous

a

of

case

rate. Tak¬

large Eastern

one

market, some 300 miles from New
York, fully 75%
of
the
sugar
that

to

movement

market

refining centers is by truck.
This trend toward trucking will,
in

many

too

ways

affect
the
flow
points of sugar.

source

Higher Sugar Costs and Prices

is

than

war,

to

these

percentages

themselves,

reverse

The public, because of

home

distributed

and
was

55 %

of

the

sugar

used by

industrial
division seems

plants.

Now the
50% for home use, and
in industrial plants.
It is

50%

reasonable to

that

assume

we

address

tler

Feb.

and

of

the

volume

Mr.

Lamborn

Associations,
;

Biloxi,

movement

and

beet

processors

are

the

experience in

dustries where
other

have

costs

other

increased

the

in

case

it

is les¬

sened.
of

Develop

in

changing trend worthy
note is the ever-increasing in¬
liquid form.

East, 20 odd

Miss., is

now

users

sugar

in sugar

Originated in the

years ago,

also produced

1940

raw

the

liquid

sugar

by California

refining

and

fined
sale

a

yearly

paid

was

These Notes

now

•v

are

not

being offered to the public. They

as aient> with certain institutions

were

2.7860

basis.

For

one

small,

or

is faced when political

market where the

by

average

the

(Continued

price

government,

price for

raw

on

sugar

page 33)

placed privately through the undersigned,

purchasing tlieih for investment.

Standard Oil Company

folly upsets the applecart.
But

politicians prefer to talk about high profits.

Nathan D. McClure Dies
Vice-Presi¬
dent
and
director of Harriman
Ripley & Co., Inc., died suddenly
Saturday evening at the West¬
chester Country Club, Harrison,
Nathan D. McClure,

York, where he was attend¬

New

ing

'of

old

Geneva,

Board

the

the

Association.

Bankers
years

of

meeting

a

Governors

He

was

and was a resident

Illinois.

of

Investment
52

of

Marine

Corps

as

a

Lieutenant, in World War I,
entered

the

investment




First

and

banking

(Incorporated in New Jersey)

shortly afterwards. He joined
staff

of

Inc.,

Co.,

Harriman

in

Ripley

&

3%

Promissory Notes Due February 1,1979

and was in
charge of its office in Chicago.
Mr.

1934

McClure

in

active

was

va¬

rious civic affairs in both Geneva
and

Chicago,

Chairman

Group

of
of

man

cational

of

the

the
the

He

served

Central

and

Bank¬
Chair¬

was

Association's

of The

He

Sold at 101% and Accrued Interest

as

States

Investment

Committee.

Chicago,

York,

Edu¬
was

a

MORGAN

Attic, Bond Club

Yale

Club

of

New

Society of Mayflower De-

cendants

the

111.

of

Association

ers

member

graduate of Yale College
class of '18, Mr. McClure served
the

the

,>

A

in

field

in

Geneva

the

state

Golf

Dunham Woods

of

Club

Illinois,
and

Riding Club.

the

February 7, 19^9.

STAN

re¬

yearly whole¬
4.4250 per pound.
1947, when we were still

of the difficulties by which the busi¬

large

nessman,

per

was

$75,000,000
Such is

price

average

price

fixed

beet

are

for consumption in

States

duty
the

During
in

average

sugar

United

pound

Another

are
our

order.
The

Liquid Sugar and Bulk Handling

in

keeping with the general infla¬
tionary trend in our economy. As
a
natural result, sugar prices
higher than prewar., To get
bearings a few comparisons

opposite is the

in¬

labor, material and

packers of bulk bags,
the competitive spirit
amongst the
sellers is intensified, and where

substantial

cane

•

of

factory-packed retail packages
in the fact that, where sugar

refiners

will

Mississippi State Bot¬

7, 1949.

significance to the industrial

terest of industrial

by

mar¬

lies

before the Joint Assembly of Ala¬
bama

importance in the

keting of bulk granulated than in

of
*An

lesser

of

Rationing,

to be about

But it didn't provide us with
for the higher cost of the
oven.
Still we need the oven just as much as we
need flour to run our bakery business." — Ben
Moreell, President, Jones & Laughlin Steel Corp.
need

we

and

user

the

of

"The tax law allowed us to deduct the higher cost

help

to

numerous

mention,

new oven.

the

from

the

ing

the

of flour and wages.

the

of

business, we find that, since
as
rail rates have ad¬
vanced, the movement of sugar
by motor truck has been forging
sugar

80% of pro¬

as

sizes.

i.e., to

Railroads Losing Volume to

During

steadily
adding
to
their
equipment and facilities for the
packaging of two, five, and ten

move¬

raw sugars,

the distribution of small packages.

baking,
canning and preserving.
Conse¬
quently, we found, during the war
period that about 45% went into

we are

al¬

handling of

The

switched away from home

in trouble. Our oven is ten
years old and worn out. In 1938 it cost $5,000. We
charged this amount off against our taxable income
over the ten years.
In other words, the oven has
been fully 'depreciated.'
But the new oven costs
$10,000. This is just twice as much as the tax law
allowed us to lay aside out of our income to buy a
by 1948

the

ment and

turers, canners^ and the like. Dur¬

v

helpers. But we are able to raise our
own prices and cover these higher costs.
Repairs
around the shop and bakery are up, too. But we
can deduct
these day-to-day charges from our in¬
come before figuring our taxes.
And we are able
to show a cash profit after paying our taxes.

in

of help in retail stores
made impractical the weighing of

cartons
use

found

directions in the bulk

We have had upward
changes
in the costs of production of
sugar
in all areas. This is no different

tended

and pay our

"But

the

approximately 65% of the
sugar distributed was used direct¬
ly in the home, and 35% in in¬
dustrial plants, that is, plants of
bottlers,
bakers,
confectioners,
preservers,
ice cream manufac¬

bakery for $10,000.

new

from

home

war,

Another $5,000 goes for
$5,000, enough to buy
flour, sugar, coal and other supplies and to cover
our payroll and consumers'
unpaid bills.
a

away

the

packages. I might also
is being made in

add that progress

high labor costs and the

granulated,

is one of
the interesting developments
growing out of the last war. Pre¬
in

gained, impetus from the steadily
increasing costs of handling com¬

shortage

pound

Consumption Lower

swing

sugar

be

to

retail

been

evaluated by those

is

war,

Thus

so

/

disappearance of the
pound bulk bag of sugar in

grad¬

shifts, which unfold

Home

pro¬

ports, is increasing. Then, too, the
handling of granulated sugar in

and for the same
reasons,
reduce handling costs.

the

it.

of

Lower

total

ually, inevitably create new pat¬
terns, which must be understood
and

of

decade

the

transformation is so slow that we

hardly

number

and

Middle

some

sugar,

with

In others the

speed of lightning.
are

the

the

interesting and important
change of practice in the past

100

conditions

Bag Production

An

most

re-

their

orient
some

expansion of the good of which we have
so much!"—Extracts
from article by Ford R. Weber,
of Ford R. Weber & Co., Toledo, which appeared in
"The Toledo Rotary Spoke "

:

inopera-

quently

And.

in

posed new plants, according to re¬

modities in
Bulk

the

system

was

t i

pres¬

percentage of sugar usage.

during

quota

West.

companies

plants

If we should have ,bulk is receiving mounting atten¬
recession, we would tion in various areas of the coun¬
find
industrial
users try. These two developments have

years—1942 to

which

small

some

extended

an

194T- inclusive
—

vation and

in

producing

sugar

dustrial plants.

lapse of six

—

percentages that
It is true, how¬
hard times, more

baking, canning and preserving is
done in the home, and economics
of all kind are attempted in in¬

new

After

to the

prewar.

that

ever,

business

under the

social and economic status?

"Call

unchangeable thing in life is change itself. Since con¬
a characteristic of the sugar business, I think it is
developments of the past years. And it is especially

one

of the

the features of

system that per¬
his

some

timely to dis¬
cuss and high¬
light some of

maligned

rise above

to

one

a

said, the

once

worth while to review

posses¬
of wealth have risen from poor

beginnings under

someone

stant, though at times gradual, change is

challenge for youth to show
marvel of their opportuni¬

individuals

as

19

President, Lamborn & Co., Inc., New York City

"Wealth, so often presented as corrupt and op¬
pressive, is still the backbone of our country, pro¬

Is it not

(671)

Sugar Scene Changing

Wealth Still Backbone

Of Our

CHRONICLE

was

the
was

20

COMMERCIAL

THE

(672)

CHRONICLE

FINANCIAL

&

Thursday, February 10, 1949

Mutual Funds

Prominent Personalities
(Fifth of

7

";7;.y7'

Series)

a

77.'7y

WALTER L. MORGAN
'•

Prospectus
your

RESEARCH

By HENRY HUNT

First'Seven in

request from

upon

investment dealer,

During thie past

from

or

CORPORATION

120 BROADWAY, NEW

which lists

the seven

1'.:

:

Fund

f'f -7:f'777y.• s'
Sponsor

Affiliated. __________-Lord,

Wellington
Boston

—

_____

■

Assets

64,094,000

31

Vance, Sanders

33,748,000

20

37,029,000
126,583,000
32,089^000
26,711,000 '

IB

Investors Mutual-.---.Investors Syndicate

INC.
V

{

•

••

• •

-

Capital Stock
Prospectus

INVESTMENT MANAGER

AND

UNDERWRITER

Investment

75 Federal

Counsel

'

making a
impatient with

Excluding

17

16

bank loans of $18,000,000.

himself

'

—-

are

him.

day;

but

Correction
Wellington Fund's liquidations during 1948 amounted to $2,195,-

$1,195,000 as stated in last week's column.
gratifyingly small, however.

They were still

"Manganese gives toughness to steel, is used at average rate of
lbs to one ton of steel, is vital to nearly all steel making.
Ben¬

•

.

-

RIGHT with
"What

HUGH W. LONG

&
CO.

' iN<o»»o#Aiie ' *

>

CHICAGO

are

not

,

of humor and

sense

Walter Morgan's analytical abilities and keen perception
known. He gets a Tot of fun out of picking out un¬
securities.
He says he is. lucky but he means

abilities

enough to have developed

a

nice

sense

of

and

timing. These qualities, together with similar
the part of-the Wellington Investment Commit¬
accounted for the splendid 20-year performance

on

Fund.
C.

a

trouble-shooter

P. A.,

learning finance, and business

industrial

for

managements.

Though

as

a

ana¬

lytically inclined, Walter is a; salesman and keenly interested
in releasing reports and literature that anybody can under¬
stand.

He has been a pioneer along these lines and his
Wellington report contains many illustrations and
charts instead of just figures. •
Mr. Morgan believes that the end of the road in the
growth and development of the Mutual Fund is nowhere in
latest

fully appreciate how much

■

is

He sees Mutual Funds and Balanced Funds in partic¬
ular, becoming as indispensable to American life as life in¬
surance and
savings accounts in estate and capital accumula¬
tion programs, and as one of the best means of
helping to
furnish the equity, capital so much needed
today by industry.
His aim is to spread the "gospel of Balanced Mutual Funds"
to every investor and wage earner and to maintain
Wellingsight.

if for

period of 30 days the people in

a

6very part of the world had the free choice of moving to whatever

results

......

„

keen

a

more

well

Walter is

country.

would happen

country they wanted to

WAU-STREET, NEW YORK 5, N. Y.
■„

our

to think

mm

record of the

much these days about what is wrong with this coun¬
we

pres¬

this

a

tee, have

What's RIGHT With This Country?

wonder if

the

that

kennel.

own

selection
,

tant," issued by Selected Investments Co. of Chicago.

so

vacations

from

he has been smart

has options on Brazilian deposits sufficient to keep the
industry supplied for 50 years. But the ore is 1,200 miles:
from seaports, and its effective use would require ah investment of
about $300 million in rail facilities, which U. S. Steel thinks Brazilian
Government ought to provide."—From "These Things Seemed impor¬

"I hear

short

away

dervalued

entire U. S.

that I sometimes

takes

get

a ready wit.
He
genial manner and a genuine interest in meeting
people and in making new friends. He lives by the theory,
"if you can't say something good about a
person, don't say
anything at all."

has

are

Fairless,

try

also

believes

Waller has

stockpile of manganese is 'possibly sufficient to keep the existing!
facilities of the industry going at peak capacity for about a year.'!
Manganese deposits in North America are thin and poor quality.
The metal is found in India, Africa, S. America. U. S. Steel has oper¬
ated a small mine in Brazil for 20 years and,
according to Mr.'

UlVAMCfllS •'

associated
lot in a

a

change off Walter L. Morgan
clearly,,
Walter likes country life—hunting, fishing, etc.—and is par¬
ticularly keen on shooting woodcock and quail. He knows
how to wait for the woodcock to
top the timber before
pressing the trigger and to swing with the quail's flight as he
shoots.
He is a good angler and can hit a square foot of
water with a dry fly at 30
feet—except when a lily pad
moves
suddenly. He is. intensely interested in developing
good hunting dogs, both pointers and setters, and has 21 dogs

'

000—not

2-9550

he

enables

pace

plies from one-third to one-half of manganese used by U! S. steel
industry and that USSR deliveries of metal are slowing down. U. S.:

A'fc

everybody else
accomplishes

He

He

sure.

It will be noted that five of the seven leaders

balanced funds.

.

15

.!v

and

hard worker who drives

a

and

with

frequently to

jamin Fairless, President of U. S. Steel (SAS 7,500) says USSR sup¬

.

discussions

wordy

is cautious by instinct and a skeptic who
wants to be shown.

16

in his

>•

decision, Walter is often

has been known to say, "Tell me in three
words what you are talking about."
He

Manganese

;

so mah.y''Ideas in his head-'
Although:thorough Mmkelf4

fore

"Affiliated" and "Wellington" were one, two in '48 as they were
in '47 while Vance, Sanders' Boston Fund moved up to third from
seventh place in '47. Although Investors Mutual is in fifth place on a
percentage basis, it would be in second place on a dollar basis.
Fundamental Investors, Eaton & Howard Balanced and George Put¬
nam continue to make a
better than average showing from a sales-

Street, Boston

telephone: liberty

His

retaintime.

! in studying, all. available information be*,

1

growth standpoint.

Russell, Berg & Company
t

can
one

,

Request

on

he

-

executively stepping;
associates ;qften wonder how1

Walter is
*

■

•<

>

Hugh W. Long
George Putnam

Putnam

RUSSELL BERG FUND

74%

W. L. Morgan

Eaton & Howard Bal._.Eaton & Howard

Fundamental Inv

weeks.

._at,

[t

During '48

$57,222,1)00*

Abbett

other

the

each:.'

Year-end '• % Increase.

v■■

■

jpiiOgrani in tne morning which ,wih:*keep

fastest growing

funds during 1948 with assets of more than $20,000,000
.:

.

Philadelphian. from way back, Walter Morgan is ag¬
gressive, affable and 50 years old.
Like most chief exec¬
utives he demands plenty of action but uses many shortcuts.
Be can keep two secretaries busy and sometimes will lay out a

mutual fund assets in the aggregate in¬

year,

by the following tabulation,

YORK 5, N. Y.

I

•

President, Wellington Fund
A

% Growth During '48

creased 7% virtually the same gain as they showed in 1947. However,
several funds beat this 7% growth by a substantial margin as shown

A

SECURITIES

NATIONAL

k;

or

staying where they were?

difficult to. imagine.

People from

The probable

every

land would

lon

as

000

in

a-

ieader in' the field.

resources

and

over

that Mr Morgan has made

Wellington's growth to $66,000;»
30,000 shareholders today shows
good start toward his goal.

a

American Business

M

eys tone

THE

C ustodian

Shares, Inc.

"

come streaming to these shores,
seeking as our forefathers did, lib
ert.y and opportunity for themselves and their children.

'

.7.'-.'
>

; i

v

*

\

7

I

Prospectus

•

%

.

upon request

-

COMPANIES

'

Certificates of Participation

incorporated
Los

New Orleans

Chicago

—

of history

.

when

the

state

is

becoming

more

I

in

all

history has been as unselfish or has giver
generously of its wealth to other people as these United Slates
know

World

of

none..

Wars

in

We

made

which

we

territorial

no

the

were

demands

deciding factor.

following
The

Angeles

investment funds

Bond Salesmen

SHARES OF CAPITAL STOCK OF

in

to sell

bonds
(Series

Open-End Investment Trust Shares

PREFERRED STOCKS
(Series K.1-K.2)

We

common stocks

■

.■

....

■.

-

expanding

and have

(Series S1-S2-S5-S4)
4

are

men,

for

Investment Trust Department

our

openings for
which

selected number of sales¬

a

bond

salesmen

should

particu¬

Prospectus from
your

larly well qualify. Write for appointment. Address:

local investment dealer or

Tlie K eystone

ol Boston
50

;

Company

Congress Street

Boston 9, Massachusetts




Prospectus
your

may

be obtained from

local investment dealer,

or

;

;

BAGHE
MEMBERS
LEADING

THE

PARKER

CORPORATION

ONE COURT STREET. BOSTON 8, MASS.

Department IT

NEW YORK
STOCK

&

STOCK

AND

Co.

EXCHANGE

COMMODITY

36 WALL STREET, NEW

AND OTHER

EXCHANGES

YORK 5, N. Y.

tw<

Marshal

in

investing tlieir capital

am

.

"What nation

Lqrd, Abbett & Co.
New York

period

powerful, no other people enjoy so ih'Ueh personal liberty—th<
right to live their own lives—or have such a high standard o
living.
•
•
•
,
•
as

Funds

a

more-

LOBD-ABBETT

INVESTMENT

"In

<

Plan

has

been

•

COMMERCIAL

THE

Number 4776

Volume 169

described

without peer in history.'
of history, there is no

by the London 'Economist' as 'an act
Search back as one may through the annals
record of a comparable act of generous

diplomacy.

t

•

■

"I do not mean to either

1

•

Investment Outlook
"Business in the United States in 1948 operated at record peacetime*levels and aggregate profits also were the highest ever-recorded.
Conditions as favorable as these- may not be duplicated for ;many

Important downward readjustments, have" been occurring ever
since the war in a number of industries. To date these have been

years.

staggered in time and there is little evidence as yet of an important
cumulative effect in the form of decreased employment or consumer
income.

prices, notably farm products, and
leveling of retail sales in the last few weeks of 1948 have intensified
widespread fears of a general business recession, meaning a minor
depression.,
''.
-V..
"We recognize that a recession may. be starting right now. We
believe that a recession, if it occurs soon, will not develop into a
severe
and prolonged depression.
We believe this because of the
susbtantial unsatisfied demand, resulting from, the war, for many
goods, notably capital goods; because private credit has not been
unduly extended; because foreign conditions are forcing upon the
government an expansion in total expenditures which tends to offset
other; deflationary government policies; because of the government's
price support and social security program; and, above all, because
we believe a cautious sentiment has prevented important speculative
excesses from creeping into business and certainly into the security
markets.
V:
O'-.s.
Weakness in commodity

.

.

"We

conclude, therefore, that, subject to a limited correction
occur at any time, the volume of business, employment,'
consumer income, and profits will continue at a good level for some
time to come, although 1948 may prove to have been the absolute top.
"The possibility that lower volume, prices, and profits in certain
industries accentuated by
governmental policies directed toward
social objectives, will cumulate at an early date into a general re¬
cession for business has a most important offset in the prices at
which may

which

equity securities < sell.
Common stocks appear moderately
priced in terms of current earnings and dividends and in terms of
the average prospects for the next few years, especially if weight is
given to an enduring increase over prewar in the price level for

ized

in

the

quarter will be
balanced
by
cash

deficits

later

tending

to

ment" says

bank

serve

influences

Treasury redemption of securities held by Federal Re¬
Banks will cease as offset to currency expansion arising from
gold, inflow and other inflationary factors.

first

than

more

21

in

the

year, thus
the level • of

restore

deposits

so

far

Treasury-

as

concerned.

are

"The absence of

a

cash

surplus

affect Treasury financing
February issue of "Business Comment," published by the may
Northern Trust Company of Chicago, current heavy government policies
and problems. The
spending and its relation to the use of the Treasury's cash surplus in Treasury has-been pursuing the
reducing bank^held national debt is explained and analyzed. Ac¬
policy of refunding maturing or
cording to the article:
;3>
—
called issues not redeemed in cash
"On
a
fiscal year basis,
the payments reduced private deposTreasury still contemplates a con¬ its, and the Treasury used a part into certificates or short notes.
In the

siderable

of debt of the funds to retire debt held by
Be¬
In fiscal 1948 the Federal Reserve banks.
the net redemption of debt held by cause of this, a part of the money
the-public amounted to $7/.3 billion. paid in taxes did not flow back
It is estimated that in the current to the public as Federal expendi¬
net

retirement

held by the public.

fiscal

will
amount to $3.8 billion and that in
fiscal 1950 such repayments will
total $2 billion.
The difference
repayments

year

between these

figures and the ex¬
cess of cash receipts over expen¬
ditures
is
accounted
for ..by
changes in the Treasury balance*
which is estimated to decline by
almost $1 billion in the current
fiscal year and by $500 million in:
fiscal 1950.
Although a reduction
in debt held by the public is con¬
templated,
Federal
obligations
held by the trust funds are esti¬
to

mated

rise.

The

sale of these

obligations to the trust funds will

provide the Treasury with means;
to retire publicly held debt as well

finance

to

the

budget deficit.
The total public debt will remain
practically
constant.
The
total
debt
is expected to
amount to
as

$25,2 billion

on

the

on

same

rors

in

as

these

;

June 30, 1950,
June

tures

or

payments.
The
to retire bank held

used

money

debt

other

simply extinguished. The

was

reduction

in

deposits

caused by
surplus more than
offset the expansionary effect on
deposits of a moderate increase in
the

Treasury

bank loans, support purchases: of
U. S. Government securities from
nonbank investors by the Federal
Reserve banks, and the gold in¬
flow.

This

policy tends to increase the

'floating' debt, but the large cash
surplus has enabled the Treasury
to retire

portion of maturing is¬

a

and

sues

crease

the

thus

from

past

the

prevent

occurring.
the

year

in¬

In fact, in

marketable

short-term debt has declined. The
absence

of

cash surplus means

a

that, unless the Treasury is will¬

ing to

see an

increase in the float¬

ing debt, maturing issues
refunded
or

short

into

bonds.
•

may

be

longer term notes

'

Moreover,
-

the
;

"The
have

a

Treasury

will" probably

sizable cash surplus in the

current ' quarter
of
unusually
heavy tax payments, though the
surplus is likely to amount to only
a fraction of the $6.4 billion sur¬
plus realized in the first quarter

pressure on

erted

the money market

ejx-

by the redemption of securi¬

ties held by the Federal Reserve
banks may no
to

longer be available

offset the expansionary

influ¬

ence

of gold inflows, possible fu1-

Life Insurance dividend is paid in

ture

support purchases

late

factors."

of

1948.

If

the

National

Service

1949; the cash surplus real¬

or

other
•

or

30, -1948. Er¬

estimates

will,

of

course, occur.
:>

Regarding the economic effects-

of

reduced

Treasury surplus, the
continues:;
>
holdings in common
"The $9 billion expansion in the,
stocks at approximately the level stated in the last Annual Report."; flow of
government payments and
t—Quoted from the Annual Report of Scudder, Stevens and Clark, the sharp change from a large
Fund.
'V
i surplus in 1948 to a deficit in cal¬
Turn to. page 2 for Henry A. Long's analysis of portfolio opera¬ endar 1949 may have a determin¬
tions of Mutual Funds during the last quarter of 1948.
ing effect on the trend of busi¬
ness activity, on bank deposits and
on
Treasury financing- methods.
The " larger government expendi¬
tures will have a diffused impact

goods.

■

.

these

"For

.

(673)

Northern Trust Company of Chicago in February "Business Com¬

;

Boston.

CHRONICLE

Effecis of Declining TreasuryGash Surplus

'

ignore or under-emphasize our presentday problems, but I cannot recall a time when we did not have
problems; In some ways our troubles and our. responsibilities loom
larger today because of our position of leadership among the nations.
I believe we should approach oujr problems in a spirit of quiet con¬
fidence, rather than in tear and foreboding., Fear destroys judgment.
It is a poor substitute for caution."—Written by George Lutnam of

FINANCIAL

&

.

"Comment"

,

reasons

have

we

maintained

/

..

Kidder

Feaiody Opens lenbrighi Go. Opens
Envestment Fund Sep!.

Announcement is made today by
Kidder, Peabody & Co., members
.of the New York Stock Exchange,
;

:

of

the

.Funds

formation of a Mutual
Department at its uptown

office, 10 East 45th Street, New
City, under the management
of Dudley F. Gates.

York
•

The
•

firm

will

stress

the

im-

portance to investors of the vari¬

of mutual funds, which
Jare managed by Investment Com¬
panies and regulated under the
Investment Company Act of 1940.
ous types

-A

variety of

"packaged" invest-;
will be suggested

business.

Some expanded pro¬
such as aircraft procure¬
ment, stockpiling of strategic ma-,
terials, public housing and public
works, will'affect primarily the
heavy industries.
On the other
hand, Federal aid to education,
larger k social
security
benefits,
support operations in farm cornon

Mutual Funds Dept.

grams,

ROCHESTER, N. Y.—George D.
Bon-bright & CO., 100 Powers;
Building, New York has estab-l
lished, effective Feb. 1, 1949, an
Investment
Fund
Department.'
Eugene H. Cunningham who has
B.

been with the firm since 1946 will!

Manager of the Depart-1 modifies and the dividend on Na¬
department will spe-j tional Service Life Insurance^ will
ciahze
in
the
distribution
of j increase the* incomes of .individual i
selected- open-end
The effect .'on indi-.
type -invest-! recipients.
ment funds.
'■
i vidual spending or saving pat¬

serve

as

I'ins

xacuv.

.

terns will be diverse. •

"The

LosingeiesExch. Bd.

ous

-

supporting effect

on

vari¬

markets of larger government

and payments may be
offset by the discouragement to
fto meet the needs of many invest¬
private enterprise inherent in the
ors, whether for capital conserva¬
LOS ANGELES, CAL.—Phelps
prospect that present tax rates
tion, long-term growth, or gener¬
Witter, Dean' Witter V& Co., has; may be indefinitely continued if
ous income.
been appointed Chairman of the;
not increased. The adverse effect
Mutual funds have been
ment programs

recog¬

.

Elects Wilfer Chairman

Board

of

Governors

of

Los; of

the

high tax rates has been ob¬
Exchange to suc¬ scured by the war-created boom
Lester,
Lester
&
Co.
and
the large volume of liquid
dent's Council of Economic AdWarren M. Crowell, Crowell, Weeassets left by the war that could
visers recently stated, in its an¬
don
&
Co., was named Vice-; be drawn upon to finance busi¬
nual
report, that "the bulk of
savings will come from people in Chairman,, to succeed Carl M. Pur- ness capital as well as consumer
the middle income brackets who cell, Barbour, Smith & Co.; andj expenditures.
When government
nized

as

having

a

sound place in

the country's economy.

.

spending

The Presi¬

rightly more concerned with

are

the safety of their investment than
with

Angeles
ceed

Stock

B.

E.
&

was

the

and

experience of
investing

nationwide

local

companies

can

extend venture capital

which

firm

expects

wide-spread

investor

to

attract

interest

mutual funds of all

sound

At the outset

proves

take

only five full time

However, if the venture

successful the firm plans to

on

additional

continuing

Archie

R.
as

and

offices

in

salesmen

Boston,

delphia, and Chicago.




as

Presi--

Gilbert

Secretary,
and

Inez

and
Ver¬

Assistant Secretaries.

not

Phila¬

BUTTE

Street, to

roll

was

engage

Mr.

and

decisions

businessmen

and

in

Car¬

Shares, Inc.

millions

CHICAGO

ST. PAUL

SPOKANE

individuals

and

to

SEATTLE

a

TACOMA

i of

bank

with

two

beds

have enclosed lavatories,

ample luggage
space, and full length closets. Adjoining
bedrooms open into connecting suites.
NEW

ROOMETTES

full privacy

for

one

with room facilities in

offer
com¬

Radio control and circulat¬
ing ice water in all rooms.
pact form.

a

color booklet

on

the

Olympian Hiawatha,

write to H.

Sengstacken, Passenger Traffic Man¬
ager, 9,48 Union Station, Chicago 6, Illinois.

major part of this

surplus to retire debt held by the
Federal

NEW BEDROOMS

For

own

"The large Federal cash surplus
and the use of

Reserve

System had

formerly Vice-President important influence

of Inter-Mountain

of

better themselves
their families through their

Carroll is forming George C. Car¬

Race

,

MINNEAPOLIS

C. efforts.

Company with offices at 678

.

ing from some and giving to
others, or whether to rely on the
of

COLO. —George

Super-speed schedule

economic life of the country, tak¬

Forming Own Company

South

national

between

Crest-to-canyon views of a mountain
glass enclosed
Sky top Lounge^ a new departure in ear
design. You'll find the private rooms in
the new Olympian Hiawatha sleeping
cars
perfect in every detail.

wonderland from the

OLYMPIAN.

MILWAUKEE

trying

roll

private-room sleepers

billion), the country would
seem
to be perilously
close to
making a fundamental decision—
a decision whether to rely increas¬
ingly on government as the guid¬
ing and determining factor in the

choices

DENVER,

net

of $240

Oeorgs C. Carroll Is

only in New York but also in their the securities business.
branch

re-elected,;

dent, Thomas P. Phelan,- as-Vice-;

in million,

.mutual fund salesmen will be em¬

ployed.

Paul

of the

25%

;

named

types,

believing them to be an effective
means of channelling savings into
American business enterprise.
v

G.

President *

with diversification of risks."
The

W.

absorbs

.Revel
product as it did in 1948 (govern¬
Treas-- ment
receipts of $60 billion against
: ,■^ V'i an estimated net national product

Zimmerman,

Co.,

gains
that
involve
high
!'•'[
risks." To this end, the report rec¬ urer.V
ommends "study should be made
Other officers were
of

and

P.

George
Miller

Spectacular Sky top lounge

deposits

in

on

an'

the level

1948.

Tax

the

Milwaukee Road

The friendly

Railroad of the friendly West

22

FINANCIAL

&

COMMERCIAL

THE

(674)

CHRONICLE

Thursday, February 10, 1949

NYSE Announces

Urges Action for Less Government Spending

Public

Edward J. W.

Dr.

Utility Securities

commitments

By OWEN ELY

■

The recapitalization plan of United Corporation was approved
Jan, 31 by the U. S. District Court in Wilmington and an enforce¬
ment order is expected shortly. Consummation of the plan is antici¬
pated following the usual aopeal period, which in this, case will be
60 days. Randolph Phillips has consistently opposed the naanagement
in the past and has appealed previous United Corporation plans to
the Circuit and Supreme Courts.
Hence it is possible that he will
do so in this case, despite the expense involved. It appears unlikely,
however, that the Committee representing the Preference Stock
will make any appeal since the difference
between the current
value of the exchange package (about $47.15) and the objective of
$50 has narrowed in recent months.
As of Feb. 5, liquidating value of the common stock (after pro¬
vision for retiring preference stock under the plan) was $3.81. Soon
after the plan becomes effective, the company will ask SEC permis¬
sion to make a distribution of 1/10 share of Niagara Hudson to each
share of common stock.
This means that the present holdings of

With United selling at 2Y2,
distribution would reduce the net cost to $1.69 as compared with
liquidating value of $3.00 or a net discount of 43%.

the

the

national

of the

tion

dorsement
to

strain

of
re-

International
York

order

to

the

out

carry

management's

plan

to

convert

report as a
subsidiary; it is possible therefore that the SEC may not

although

the

Statutory

in the

not listed

was

company

annual

minimum holding is considered

However, assuming thai the 5%

Hudson.

would

This

shares of Columbia Gas,
Shares

South

of

Stock

held
as

by

each

shares,

"A"

be

which

stock,

Gas Im¬

second preferred
into four

converted

will have equal share

Because of this fact it might

for United to dispose of some

necessary

be

would

of

voting rights with the common stock.

common

237,000

about

shares of United

42,000

Corporation

United

many

of

1,086,000 shares of new

reducing its net holdings of Niagara

to only about

280,000 shares of new common and 194,000 shares of "A" stock.
Allowing for possible increased dividend rates in 1950 for Cin¬

Public Service Electric & Gas and West Penn

cinnati Gas & Electric,

Electric,

of

reduction in the United Gas improvement rate, and the

a

initiation

United

of

about 170 a share.

which

cash

may

be received under the plan

securities to

on

Hudson and

Niagara

income

dividends

of

& Southern, the

Commonwealth

Corporation in

1950 is estimated at $2,444,000 or

However, assuming that the estimated $12,000,000

sale of utility stocks

from the

be realized

deducting $1,161,000 estimated balance of cash needed for
and

plans)

Niagara

paid

done
on

Corporation as dividends

by United

out

Assuming that all earnings should

by investment trusts)

(as is frequently

this would mean a yield of about 12%

the estimated net market cost of $1.69.
of

Most

United Corporation's portfolio

years and some

levels, which

has been held for mans

of the largest holdings were acquired at 1928-9 price

means

that there are book losses estimated at some

on

of

value
day's

stupendous spending of the

Administration, observes

with

approval the

happening to the paper dollar.
George Bauer will tell you, per¬
haps. Maybe, he will show you the
rubber Dollar. A month ago,

showed

to the

one

Secretary of

the Treasury—my guest

here, that

dollar which bears my own signa¬

surely

it

ture,

stretch

to

seems

farther.'
"To

the

affairs

written

Vafid

simple

think¬

of

way

ing, taxation as a political maneu¬
has been carried too far —
and I speak from some experience
in such matters, having served in
the National Government, in the

tial

out

of

interests

in

to

United

the

This would be of substan¬

spending end,

of

statement.

Moreover,

dividends for

distributions,
-realized

a

considerable period of years

stockholders on a tax-free basis as capital

that adequate losses on utility stocks were

provided

in the years in

Enjoyed your visit

Also,

the other end, the saving

on

end—as Assistant to

of

the Director

First

the

Budget, in the days
Coolidge—the Evangel¬
it was, if you.

of Calvin

ist of economy. He,

remember, who required the re¬
turn of the pencil stub, for a new
one—and the broom handle, be¬
the

fore

issue

"To

of

THE

AND

the

OF

ST.

PAUL

Telephone Atlantic 8141




8c

GOMPAXV

MINNEAPOLIS

DULUTH

Teletype MP 73

distance

from

the

office

to

registered representa¬

tive is accredited.

be

the

Hinch & Wilson Formed
TORONTO,

ONT.,

CANADA—

formed Hinch and Wilson Limited
with offices at

approved, be for¬
appropriate members

pass

act

as

331

Bay Street, to

dealers in Canadian mining

issues.

thing

This action was taken by the Board of Directors
upon recommen¬
dation of its International Trade Section on whose behalf Dr. Edward
W. Proffitt and Mr. George Bauer of the
Monetary Policy Com¬
mittee

Shall

$6,000-a-year line.

But

my

than
me

last

ones

the

ever,

been

has

for

a

the

use

WHEREAS

in

to

the

billion

33V3%.

—

that year,

collections
billion.
How¬
less-than-$6,000-amore

—

collected

by

process

tax burden would fall upon

the

taxoayer.

little

and

would

economy

be

subjected

to

a

dis-

severe

would

be

monetary

joining European and other countries
units in the miseries of monetary and

chaos;

WHEREAS

it seems reasonable to suppose that any rise again
price of gold after fifteen years of fixity, would impair
or destroy, for generations to
come, the confidence of people in
the willingness and ability of Congress to
maintain a fixed
in

the

monetary standard for the people of

our

country; therefore

BE IT

RESOLVED, by the Directors of the New York Board of
Trade, that they express themselves in opposition to any change
in" the price of gold
beyond the figure of $35 per ounce of
fine gold and to any tinkering with said price at this time.

N. Y. Curb Increased Commissions Effective

February 14
An

rea¬

others

increase in

New

Curb

Francis

Adams

Truslow,

Exchange commission rates

President

Feb. 4 announced that 379 ballots

commission
were

on

were

of

the

Cufb

Exchange,

on

cast in all, 281

increase, 95 disapproving and

approving the
3 being defective. There

491 regular members eligible to vote.

The revised commission

all

increase

in

stock

schedules, which provide a 13.07% over¬
commissions, now become effective with the

opening of business Monday, Feb. 14, 1949.
Amendments to Section 2, Article VI, of the exchange constitu¬
incorporating the revised commission rates were approved by
the Board of Governors on Jan. 19, 1949. Approval by a majority of

tion

medium-sized

the votes cast by at least a

-

was

"Wherefore, lest we wreck and
perhaps sink the Ship of State

Yo_rk

stock transactions proposed recently to the exchange membership has
been approved by 74% of the members who voted on the measure.

over

of

greater part of this increased

than

we

fixed

economic

tax

By what

our

outlined.

was

be;

dif¬

$7.6

bracket there

may

recol¬

more-than-$6,000-a-year
total

it

' '/■

WHEREAS

without

moment, please.
figures, the
In

as

turbance;

1945

available.

has, defective

prices -of gold and other sensitive commodities and
foreign exchange rates could be expected to fluctuate wildly,
if that price were now changed;
1

esti¬

will be fantastically

me

part of the gold

now

of

they,

taxes,

.

WHEREAS

be

additional

Follow

*

the Directors follows:

WHEREAS the United States would lose by any increase allowed
the price of gold beyond $35 per ounce that

standard it

lection of the tax figures appears
to indicate that the results of such

Let

appeared and addressed the Directors.

The resolution adopted by

$4 billion, will be placed
incomes, down to include the

ferent

in favor of a gold coin standard of
the Directors of the New York Board of

J.

mated at

plan

position

Trade expressed opposition to any increase beyond that
price by fur¬
devaluation, subsidy, free gold market alongside Treasury's fixed
gold price or any other method whatever.

they think is good
people, whether the peo¬

that

change in gold value will

any

ther

which

for the

Opposes Changing Gold Price

resolution stating

Reaffirming its

—

the

J. M. DAIN

of

obtain

35 paper dollars per
ounce,

am

soning, other than fallacious and
misleading, could one deduce tha*

CENTRAL NORTHWEST

are

types

impair public confidence.

permitted to
continue to take from the people ■■;V
the
right to spend the money
which
they,
the
people,
have
earned
which they, the people
have saved, perhaps by sacrifice

$9.3

SECURITIES

all

unlisted

in

politicians,

bracket,

MUNICIPAL

to

Directors

in its

another,

interest.

national

of

year

CORPORATE

headquarters,

solicit

from

which' the

Congress and to the Press."

hopeful, you
are in
agreement, it is a matter
of principle, transcending in im¬
portance almost all other matters
and I

me,

amounted

SPECIALISTS .IN

and

if

N. Y, Bd. of Trade

Executive Offi¬

as

Department General Staff,
where, in computations, the last
six ciphers were usually omitted.

in

HOPE TO SEE YOU AGAIN SOON

to

T. A. Hinch and G. C. Wilson have

War

a

which dividends were paid.

op¬

from

"And I would respectfully sug¬
gest that copies of the foregoing

of the Purchase Branch of the

cer

on

eb$ld probably be paid to

wrill

whether

of
margin business, in either

or

only

that

shall

are

securities, not
institutions, but also
individuals, subject, to the
home solicitation rule, regardless

en¬

that

or

listed

i

acquiring

important tax savings in a consolidated income

so

or

securities.

ver,

realized book losses (through sale of secur¬ plies

panies could be offset by
ities) thus permitting

Corporation in

taxes

firms

of

sales

or

permitted
cash

public

our

or

covering employees of
firms, registered repre¬

sentatives

office

labor.'

warded

commitments

or

erating from main office, branch

for him greater value for his day's

controlling ple themselves want it or not?
industrial companies, since the earnings of such com¬
"The
President's message im¬

advantage

that

materially reduced,
workingman's dollar

While these have been pretty pnd self-denial, in order that the
the stockholders' balance sheet, they remain politicians may spend it for some¬

indefinitely for tax loss purposes.

and

of

se¬

share

rule

new

member

shall rule in

more

administration

resolution,

my

expenditures
the
end

to

once

to

It is also announced that under
a

dorse these efforts to restrain and

economy

a

securities

effected.

recommend to the board of direc¬

commitments,

$5

new

transactions and commitments

tain members of Congress in en¬
deavoring to reduce the hugs sums
now being
sought; now therefore
be
it
resolved, that this body

future

accounts

of

There has been no change in the
$1,000 equity requirement, in cash
securities, when new securities

cer¬

they whole-heartedly

;11

rule gov-^

or

war¬

action of

at

;

new

below

or

purpose

transactions

increase the

even

its by¬

valued

.1

margin
at

for the

Section,

time

control

in

curities

viewing with much concern the
widespread efforts in Washington

tors that

securities

withdrawals-of cash

International

to continue and

for

below.

or

value

Jan. 27, last:

Trade,

to

erning initial margin or equity is
to permit member firms to give

New

am

'Whereas, the New York Board

him

amendments

5

The effect of the

"

f$45 million at recent market prices.
Well

I

lows:

(after place and stead.

the United

is reinvested to yield 5%, this would increase

earnings to around 210 a share.
be

dividend

of the

Trade,

tion of Dr. Proffitt's remarks fol¬

1,086,000 shares of Niagara Hudson, 127,000
Gas, and

Jersey

sale

the

include

Under the Niagara Hudson plan the

provement.

tithes

and the partial distribution of

of the plan

consummation

the

of

tee

require disposal of about day, in New York, at lunch. Why,
$1'2 million of the $44 million estimated portfolio value remaining he said, 'compared with the paper
after

Section

Board

meeting of its Executive Commit¬

t

labor." A por¬

I

repre¬

relating to customers/margin

accounts

of the

name

Feb.

laws

$5

ingman's dol¬

m e n

his

or

solicit¬

on

/The Stock Exchange announced
on

years.

"so

commit-

desirable, it is estimated that this would

Niagara

war

that the work¬

and

greater

new

require such a heavy disposal of shares.

the

in¬
structed to refer to you the fol¬
lowing
resolution,
which
was
unanimously adopted at the last

for

E. J. W. Proffitt

in

"Therefore, in the

lar will obtain

Dr.

than

even

government
expenditures

for

rule

new

re¬

sentatives.

overburdening of the
limitless taxes, let us
cry
'halt'—and try to stop this
stupendous spending — greater

and

,

margin
of $5

ing accounts by registered

seemingly

control future

s

to

shares

on

Also

under.

this

with

organization
urging en¬
efforts

relates

quirements

Sec-<&

'

the
"Of paramount import to our
cbmpany from a registered utilities holding company to an invest¬
people—from the highest eschement trust (dealing "in, special situations), it may be necessary to
lons—to the ranks of the workers
reduce some of the larger holdings of utility stocks.
The Holding
—is this crying problem of taxes.
Company Act of 1935 is not very specific on this point. Holdings
You
have
read
the
President's
in any event must be less than 10%, but the question of the exact
message
to Congress concerning
amount of stock which might be considered a controlling interest
it—I will not bore you with the
isr left to the SEC.
It appears likely that a reduction to around 5%
statistics, nor with predictions of
or less should meet any SEC requirements.
The company has for
things to come. You know what is
several years retained a 7.7% interest in United Gas Improvement,
In

Alteration

by Federal Government.

a

2,818,397 shares of Niagara will be almost cut in half. Based on the
recent value of Niagara, the distribution will be worth about 81<5,

reducing the book value to around $3.00.

Changes in By-Laws

meeting of the Directors of the New York Board of
Trade on Feb. 1, Dr. Edward J. W. Proffitt, of the New York office
of the Manufacturers and Traders Trust Co,, presented a resolution
unanimously adopted by the Executive Committee of the Inter¬
Addressing

United Corporation

of Trade

Proffitt addresses New York Board

urging body to endorse efforts to restrain future expenditures and

majority of the regular exchange members

required.
Commission

rates

were

Exchange in May, 1942.

last

increased

by

the New York

Curb

Volume

169

Number 4776

THE

COMMERCIAL

&

FINANCIAL

Parlies Pronounced

Lee

Shuey, Albert Theis & Sons; Leo Clooney, Reinholdt & Gardner; A1 Meyer,
& Co,; Jim
Riordan, Reinholdt & Gardner; Bob Sueck, Boatmen's Nauofitu

'J

\',a

Bank of St. Louis

...

:v"-;

Securities Salesman's Corner
By JOHN DUTTON

is

a

market

new

ment dealer.
There
securities heretofore.

which

has

been

created

for

the

invest¬

millions of people who have not owned
They have invested billions of dollars in life
insurance, savings and loan companies, government bonds and sav¬
ings accounts. They comprise a new field for
merchandising securi¬
ties. So far, very little has been
accomplished by investment firms
in convincing these millions of
people that they should buy securities.
are

Before any sales campaign should be
inaugurated a study of the
obstacles to be overcome is in order. Then the
proper approach can
be directed toward
overcoming such resistance as is certain to
be

encountered.

Here

are

some

of the

problems:

jOX The majority of people who have their

funds

institutions

in

fiduciary
likely to be

and who do not own securities are
quite
skeptical.
(2) They will also make initial investments in small
This, of course, is expensive business to handle.

Increased Bank Reserves—Threat
To
that

(3) Prospecting offers

In

at

the

"mass

no

established route.

market."

recent

has

cult

to

months

largely

view of these

facts

understand

it

the

into

come

is

diffi¬

not

why

desirable obj ective.
curtailed by some

a

the

are

Federal Reserve Board should de¬
sire
stronger,
more
extensive

the

controls

business

bank

over

and

reserves

business credit.
Under

anti-inflation

the

American

unsound

loans

If loans

banks,

banks

various

of

communities,

or

individual

a
contraction
of
almost an inevitable

is

,

ity to apply
to

That

have

pro¬

Bankers

and

been

specu¬

discour¬

These local credit
curtailments could have a serious
effect

psychology that

could be felt throughout the
omy,

aged.

ous

on

try.

Emphasis has been placed
productive credit and the vol¬

business

on

econ¬

geographically and in vari¬

lines of

business

indus¬

and

insured

further

a

requirements

reserve

nonmember

raises

banks

serious

question.
question deals with the se¬

curity of the dual system

of bank¬

ing.
Such a step would dele¬
gate to the Federal Reserve Board
a

substantial part of the

very

thority

Congress

of

spective

states

the economy.

over

au¬

the

and

re¬

banking and

The dual system of
be breached and

banking would

could expect further encroach¬

we

ments from
governmental

author¬

ities upon it.

consequence,

the

of

gram

Association,

All advertising must
Many curiosity seekers will be
encountered and must be weeded out. This takes
patience and a sales
organization that believes in the plan and can "take it."

directed

in

economy
balance.

lative

be

Employment and Production

t holdings of governments into cash
or
extremely short-term paper.
(2) Banks that have a high per¬
Business conditions are
centage of loans in relation to
distinctly deflationary in a num¬ deposits would
probably find it
ber of fields.
Unemployment is necessary to curtail their
lending
increasing in some lines.
Prices policies.
•
'
are leveling off in some lines and
If the Administration finds thai
declining in others.
More busi¬ deflation is in
prospect, a curtail¬
ness failures
are
being recorded. ment of bank loans is obvioush
fact

very

amounts.

23

Huge Success

(Continued from page 6)

A Sales Campaign Directed Toward the New
Investor
There

(675)

Walter A.
Becker, Paul Brown & Co.; Vincent Malone, Paul Brown &
Co.; Sumner
Shapiro, Paul Brown & Co.; H. Kelley; E. J.
Speth; John R. Kauffmann, John,
R. Kauffmann &
Co.; Elmer Klein, Harvey, Klein & Co.

White

I

CHRONICLE

Why is it thought that there is
need
to
enlarge the controls

a

bank credit and, at the same

over

time, to enlarge the functions of
government

agencies in

of

or

governmental

lending

money

or

in

guaranteeing credit?
If there is
be argued that if the danger of excessive
private credit
sents the actual need of
Board is granted the increased re¬
facilities, should these facilities be
The foregoing is just about what will be encountered if
you and industry for credit to keep serve
requirement
authority
it supplemented by Federal Reserve
decide to set out upon a campaign to do business with the
people the
economy
operating
on
its requests, it could, by reducing
guaranty
of bank loans or by the
who have their funds in savings
banks,., government bonds, etc., &nd present level.
More credit is re¬ reserve requirements in the event creation
of a new giant lending
who do not, as yet, own corporate securities.
quired to run business and indus¬ of future deflation, release a pro¬
operation?
The Murray bill now
Taking up point number (1): Skepticism of the Uninitiated. An try today than was needed before portionately
larger
amount
of pending, for example
/ contem¬
If bank credit is cur¬ bank reserves for
advertising campaign should be directed toward playing up the the war.
lending pur¬ plates the extension of an addi¬
advantages of owning good securities for investment.
Here, the tailed by increased reserve re¬ poses than it can now.
The fal¬ tional
$15 billion through the
simpie way is the best. Household names should be used. General quirements, employment and pro¬ lacy of this argument is obvious.
RFC.
Motors, U. S. Steel, Telephone and all the old standbys. You have to duction will be lessened.
We are The long history of the depression
Perhaps the answers to these
start off by selling the market leaders. If
you are selling Trust Funds sure that Federal authorities do during the 30's demonstrates one
you

also do

can

Small

it this way.
The Funds own the market leaders.
bring in leads providing you OFFER SOMETHING.
write a short fold-over, pocket size, booklet which tells

will

ads

If you

can

the story of how an investor

obtain 5% to 6% by investing in the
greatest corporations in America you can offer it FREE. After you
can

the

secure

leads, keep after them. Weed out the Curiosity seekers.
Try and find some who become enthused with the idea of acquiring
good securities ON A REGULAR BASIS. If possible, enlist the aid of

not

want

maximum of

Initial

Investments

Expensive.

This

is

the

stumbling block which we think has been the main deterrent- to
securing more of this business. The small dealer, the unlisted house,
can

make NOTHING

otherwise,
Mutual

pared

unless

funds

to

do

he

securities later

on

of

the

make

sale

of

listed

securities, odd lot or
charge for his services.

a
special
only solution UNLESS you are pre¬
first business at a loss, and then SELL unlisted
upon which you make a profit.

offer

the

out
can

about

the

that

banking
banks

requirements
authorities can

majority

that

investment

enable

would

work.

A

complete

understanding

should be established

broad

the

bond

duce

market

in
and

market

open

pressure

could

on

total

required

these banks

mately
cess

all

Despite
there is

Unless

a

that

industry
lot

more

as

has been written about the inability of the
a whole to properly merchandise its wares,

to it than the sort of talk we have

been hearing.

the capital, the time, the fortitude „(if you will)
to put up with a hard, expensive and sometimes rather thankless
job, it would be better to leave the education of those who "do not
know anything about stocks and bonds" to others who can make
the effort. After all, ours is a business that must stand upon its own
feet and show a profit. Every security dealer knows best, just what
type of selling procedure is suited to his own resources and his
you

have

facilities.




$30

would

billion.

reserves

lion.

This

total

tant

answer

the

would have to be in
provide

more

increased

der

its

than

reserves

maximum

that the

a

the

ex¬

mil¬

banks

position to

$8

billion

to

meet

of

the

requirements
impose un¬

reserve

Board

approxi¬

could

requested

additional

thority.

•

;

V.

au¬
~

,

It seems evident that the grant¬

ing

of

authority

to

the

Reserve Board to increase

Federal
reserve

requirements further would have
two principal effects:

(1)
ers

seek

to

convert

en¬

Board

to

Board

this

argument

already

has

their

questions are to be found in these
sentences in the Economic Report
of the President: "And in
times

like

excess

that

reserves

could

conceivably be required to enable
the

banks

easy

to

follow

extremely

lending policies.
some

$65 billion of government securi¬
ties

has
almost eliminated any
need for banks to borrow from the

Federal

Reserve,

the

Board

reduce the discount rate.-

By
could

market

can

open

operations, it
pull
long and short-term
interest
rates.
However,
easy
money policies of the past years
down

both

have greatly lessened

the Board's

ability to deal with deflation by
either
Board

of these methods.

could

in

the

Also, the

event

of

re¬

cession, relax its present selective
controls

over

consumer

credit and

curities.

anti-deflationary
it

will

be

ready

tingency.

the
mixed

eco¬

ele¬

weapons so

for either

It may even be

that
con¬

neces¬

to

employ both types of
concurrently in some
combination, for some prices or
incomes
could
rise
too
rapidly
while others could be falling dan¬
sary

measures

gerously."
We

this

respectfully call attention to

economic

you

point,

phenomenon: that,
punch the economy at one
an

appear

opposite

process

may

A great
called
this?

teacher

I refer

"bulge pounding."

William

was

reaction

at another point.

American

Graham

Sumner,

It

he, incidentally, who created

the

character

Man."

"The

That character

Forgotten
was

not, as

he has been represented, one who
suffered from a shortage of gov¬
ernmental

benevolence.

He

was

slmply the taxpayer.
Having subscribed to the prin¬
ciples of cooperation and of criti¬
cism, I prefer to conclude on. the
former note.

The best specialized

ability

of the banking industrystands ready to serve its govern¬
ment

by consultation on questions
management, monetary
theory, and central bank policy.
of

The
to

Broadening the Board's author¬

when
has

-

to

Although the ownership of

present,

situation

ments, the government needs both
anti
inflationary
weapons
and

thority to reduce reserve require¬ if
ments sufficiently to
create all
the

the

nomic

is

au¬

loans for buying and carrying se¬

Both banks and other lend¬

would

Reserve

adequately with either
or
deflation, come what

that

Present

that

means

ex¬

The first and most impor¬

may.

for

reserves

about $800

are

deal

Federal

pro¬

problems

the Reserve authorities.

Present

grant of power will

a

the

to

result

to be

economy- are

It is possible that in the hear¬

able

requirements.

reserve

could

re¬

panded.

inflation

ing and expense YOU are going to put into this, the time you are
going to ekpend upon it, and what you hope to accomplish event¬
ually. If they are in agreement and are willing to give it a good try,
where everyone will consistently keep at it until results are suffi¬
cient to show a profit, then you might go ahead.
:
securities

the

and

increased

This

excess

may provide ample lending

quickly to meet the maximum of

with your salesmen about what you expect to do, how much advertis¬

-

serves

of

funds, but borrowers must be
willing to use them if bank credit

posi¬

(3): Educating the Salesman. How you are going of all member banks and insured
salesmen that they should go out and do business nonmember banks are approxi¬
with people without making any profit on the first transaction is mately $21 billion.
Under pro¬
something else again. Unless they believe in the plan and are will¬ posed increased reserve authority,
ing to work hard at it, there does not seem to be much you can do maximum
required
reserves
o'
it

quantities

them

Point number

make

large

ings that will be held in Wash¬
cash ington, it will be argued that so

to convince your

to

fact very clearly: the presence of

the

put themselves in ^

that

may

banks- would

of

short-term

tion

the

meet

supervisory
impose.
This
means
great

prac¬

keep in

reserve

that

and

(2):

steps which
depression.

position at all times to

want to

number

take

on a

demands

these accounts MAY DEVELOP into fairly substantial
Point

repre¬
business

Good commercial

tice

It

outstanding

to

might bring

these people in SELLING TO THEIR FRIENDS. You can do this with
Trust Shares. Even if you make very little on the first orders, some of

buyers.

loans

of

ume

fiscal

entire
serve

upon.

'

industry stands readycountry as called

its

the State, whether we
socialism, or statism, or
simply welfare legislation, is the
answer
which people are giving

Against Creating "Welfare State"
Provost of Cornell University, says it threat¬

Dr. C. W. de Kiewiet,

give each

to

ens

by government

agency

to

fixed by law and administered
financed from public funds. Calls for re¬

person

a

status,

Since

Addressing

University in Ithaca,
cautioned against the
by threatened creation
unmistakable turn in the tide of

graduating class at Cornell

a

N. Y., on Feb. 2, Provost C. W. de Kiewiet,
transformation of our economic and social life

''There is an

welfare state."

of "a
'our

$-

nation,"

tivity of government in social and
economic
life.
Social security,
Federal aid to education, public
health measures are coming to be
familiar facts of American politi¬
cal life.
Two great wars and an

Dr. de Kiewiet

"Our

stated.
social
c

e

order
d

e

is

o n

i

c

un-

going

r

transf
t i

and

n o m

o

to

measure

the

great

made

the

power

and

der

be¬
Dr.

ginning of the

C. W.

de Kiewiet

The

century.

is increasing.
At this very
moment we are being called upon
pace

to agree

to far-reaching modifica¬
tions in the total pattern of Amer¬
ican

life.

American

of

process

each

which

in

has

man

a

status, defined by some statute,
administered
by
some
govern¬

financed by some
Will we in some

mental agency,

fund?

public
early
to

generation be

future

divide society into

and

servants

—civil

able

great

making.
The American people,
or an influential part of it, seems

willing to sanction

a

remarked:

,

those things in
The extension of the

"I state none of

greater ac- resentment.

power

and collective

the

forth

of an

problems

severe

It is

State, I learned as a student, is
good life for its citizens.
I
am
willing «to yield a generous
measure of authority to the State

provision

of

a

There

reached.

to

our

Plato's
proper

probably new.

which
be very beneficial to apply
problems.
I agree with
argument that 'it is not
that some citizens should
Of government

techniques
it may.

are

been

yet

not

that

all

of

social

new

and

economic

effort

in

public

In

must

individual

and

maintaining

for

rejecting

a

constant and

in dispen sable

yet

all

has just written a
explain that 'the
to the creating of

he

to

book

state cannot

see

services

the

are'needed

that

And yet
individual
known for radical views speaks
gloomily of present trends,
fit
may be,' remarked Bertrand Rus¬
sell, 'that the present tendencies

to

make

a

good society.'

outstanding

another

centralization

toward

strong

to

have led

be 'resisted
to disaster,

are

too

until rthey

and. that, as

happened in the 5th century, -the
whole system must break down,
with all the inevitable results of

anarchy and poverty, before hu¬
man
beings can acquire that de¬
gree of oersonal freedom without
which life loses its savor.'.
so

"J haye not, I hope you will see,
much pleaded for or against

-political,

the

struggle for our

philosophies .;that
approval. Rather

pleaded against indiffer¬
against the acceptance of

have'I
ence,

Most certainly have I
in favor of that virtue
which Aristotle described as 'an
established habit of voluntary de¬
slogans.

pleaded

which imposes upon you
personal obligation of never
deciding without thought, and of

cision,'
the

always

deciding with the inten¬
augmenting human free¬
happiness."
-

tion

of

dom

and

times.
Much

energy,

and

ning,
whole

(Continued from first page)

erty and spontaniety,' or dull the
.ingenuity,, the .imagination, the

admirable

for

of restoring prosperity. If conditions have ;
indeed reached the point where a first class recession^
is in order, the history that will repeat itself will be not >,
only that of 1920 but. that of the second half-of the '
1930's. That is to say, in plainer terms, the Administra- >
tion will now be no more able to prevent a depression,^ ,
with its interferences with natural forces, than was the ;
Roosevelt New Deal management able to restore good

jealous scrutiny lest the State en¬
croach too far upon 'human lib¬

the resourcefulness, and
the independent striving of men.
While I am altogether sure that

has

the purpose

in their search

is

public and

enterprise. Lord Beveridge
a
generation been the
leading advocate of State plan¬
social

As We See It

ar¬

What it finally

them.

wide range of

lifelong advocates of

study and criticize things as they
are
with a view to accepting or
does insist upon

a

private and individual enterprise
come
from men who have been

improvement in all things, to

for

men

repetition. An appetite
for public office, not as a form of
responsibility but as a form o'
security, stifles imagination and
enterprise.
v
"Some of the most urgent pleas
ity

may be restrained in their effort
to produce and apply new knowl¬

edge, to continue

energetic

office

struggle against unoriginal-

What it does not
the possibility that men

is

a. heavy
selfishness

to. pay

have

we

ransom

rangements.
admit

en¬

Each has great opportunities,. Each
has its dangers.
For individual

nothing that:.condones, the sub¬
jection of men to a barsn 'eco¬
nomic discipline.
Liberal indi¬
vidualism admits the possibility
of

they

balance,

large and affirm the characteris¬
tic freedoms of American society.

to health and dignity,

men

provided

may,

reasonable

in

are

the ad¬

opposes

Such alternative fields

activity

of

nothing in liberal in¬

"There is

dividualism

by

initiative.

and

poor,

a

age

maintain,

others
excessively rich, since these two
extremes lead straight to sedition.'
excessively

be

is

who

healthy society should
the side of inevi¬
tably expanded governmental ac¬
tivity, a wide and sufficient mar¬
gin for the exercise of 'individual

ern

I agree that the
good standard of

probably

bitter falsehood to say that

a

employed by the
that a
man
who
works
independently
serves only himself.
In the mod¬

living for all citizens may be
greatly helped by wise legisla¬
tion.
I am even willing to agree
that the
limits of State action
have

its activity and energy.

all

man

a

the

for this purpose.

that brings

State serves the State, and

The object of the

industrial age.

The

individual.

the

pensable to

State needs a citizenry

wealtn of a
adequately cope with

can

more

answer, for the
that they are indis¬

would

I

reason

same

two groups vance of humanitarian policies,
those ruled nothing that challenges the right

cosmopolitan
has claimed to see the by civil servants?"
Continuing, the Cornell Provost
Welfare State in the
A

newspaper

legis¬

individual in
depending more
and more upon the State. What is
happening? Are we watching the
emergence of a new political or¬
the

influence

the

un¬

an

the

reveals

lation

of government

.since

State,

the

to

precedented body of social

ad¬

vances
in

sacrifices

possible

make

to

individuals

customed

is

It

.

.now

depression have ac¬

intervening

orma-

the

only

that

indispensable

are

■

State,

Lib¬
to the

to preserve?

ob¬
corporate

been

it Mias

vious

society

erties

try

we

of Theo¬

days

the

least

at

Roosevelt

dore

birth of liberal individualism.

should

difficult problems.

immensely

individual enterprise

freedom for

it

call

Thursday, February 10, 1949

CHRONICLE

of

power

Warns

FINANCIAL

&

COMMERCIAL

THE

(676)

24

The

Change Since Then

change since the President was

.

touring the coun¬

is considerable. Prices in

try's "whistle stops" last autumn

accomplished b.v some segments of the economy had even then begun to
government,
they » c a n n o t be show signs of hesitation. It was, however, far from
achieved by men blindly in ignor¬
whether the movement was or was not a mere hesitation.
ance of the high moral and politi¬
cal
values
which have already Many there were at that time who were
after a short period the upward movement would be re¬
been created by the nation's his¬
things

be

can

clear

confident that

"For

have

or

collec¬

social stand in all case on

higher

dividual

socialized state is
morally,, more ad¬
than a_state whibh yields

collectivized

or

necessity

of

vanced

generous margin of
individual enterprise

a

freedom to

and initia¬
Concepts have found their

tive.
way

into

^

our

thought

political

fundamentally
un¬
of the great

which

are

sound.

Fragments

19th century controversy over
effects of the
on

When -f/tele/ep/tone

Kings

of

the

industrial revolution

lodged in
fragments
political passion, not of politi¬

our

society hav^ become
thought. They are

cal science.

economic de¬
deeply into
Assumptions about
of classes and the

Ideas of

terminism have sunk

Pop hopes it's a call from Brown
Smith, saying that business deal

is

our

minds.

valuable today because there

the

conflict

Greater Value.

&

more

is OK.

are

nearly 40%

about

Mom's

expecting a call from her

Your telephone

telephones—

more

9,000,000 more —than three

years ago.

mother.
You

tailspin if it isn't
Harry, who hasn't yet asked her
for a Saturday night date.
Sis will go into a

ft

Buddy hopes it's Joe, asking if he
can

over.

come

Can

more

small

small

Reach more

people and

reach you.

The cost is

can

per

call and

relation

in

to

exceedingly
the

and

Story.

Rates Are Still Low.

Telephone rate

much

less than the

increases

Mom

and

The
Sis

story
and

of Pop

Buddy

is

typical of many a family through¬
out the country.
It shows the
two-way
service.

value
The

of your telephone
you get are as

calls

are

They are far less than past
increases in telephone wages, and
other

higher

costs

of

providing

service.
In

fact,

average

sometimes more so.

call.




things you

buy.

important as the ones you make —

BELL

of

each call.

increases in most other

Family

value

TELEPHONE

telephone
only

a

rate increases

penny

SYSTEM

or

so

per

ment

was

unthinking as. very large and likely to remain so more or
indefinitely. Superficially at least, conditions appeared
level than the words in¬ favorable for a so-called "fourth round" of wage increases
and -private, so
that a which would inevitably have brought .still higher prices

the idea that the words

of

a

hundred years we

a

strongly under the influence

been

tive

vigor in most groups of commodities. Employ¬
quite good, and profits appeared at least to the

sumed with

tory.

•

different eco¬
us to accept
the doctrine of an inevitable so¬
lution through collectivism or so¬
cialism.
The worst result is a
passivity in political and moral
incompatibility

of

nomic interests lead

because we assume that
certain developments are prede¬
termined.
We
become political

less

of manufactured goods—or at least inevitably
marked increase in the productivity of
labor of which there were few if any signs.
; '
The President—wisely so it proved in a strictly po- '•
litical sense—assured the farmer that he would be "pro- ,
tected" from lower prices of some of the leading farm ;
of most types

so

in the absence of

"inflation" that served as the scarlet
of the President's argu¬
ments together—the boom which must be controlled to
prevent a "bust" at some later date. If there was at
that time any inkling in the minds of the President and
his intimates that the boom had already reached its
crest and that the problem of any Administration elected
to office might well be that of preventing a "bust"
rather than controlling or limiting a "boom"—assum¬
ing, as we do not believe, that such are really the problems of the political powers that be—there \Vas little
products, but it was

thread to hold many if not most

indication of it.
Painful Developments

matters,

fatalists,

become

like

the

frog

about in Pennsylvania
put a frog in a pan of cold

they tell
If you
water

the pan on the
will relax appre¬
ciatively in the lukewarm water,
and make no effort to jump out
of the pan.
There it sits till it
realizes too late that the water is
hot, and that it is being parboiled.
"Before we get to the stage of
being parboiled we should ask a
few questions. Maybe the answers
will make us jump. How much;
and

put

stove, the frog

j

But there are

the

others in

which

or

if

not

political life; are now

President, last fall

war

clues here and there

Administration,

which suggest that

the Administration, many

beginning to wonder. The

concentrating his attention upon powers

would, theoretically at least enable him to reestablish
business from running away from

controls to prevent

itself and from the consumer, now

is asking powers which

according to current political
reasoning—enable him to stem the growth of unemployment,
enlarge the volume of production and do whatever else he
may think it wise to do to keep things humming as they

would—again theoretically or

Volume

169

when

were

Number 4776

he

making

was

last autumn.
If

dozen speeches
Y."
v'

a

-

the pressure

for

COMMERCIAL

THE

day early

a

It

the

there

was

and

materials

already

risen

In both

amount, the rise in rail
lags " far behind both increases^lii^fail costs,

and the in¬
crease; ip .-the prices of the com¬
modities hauled

The

--

probably feels that he has to worry-less
about scarce materials and the
possibility that their scarce¬
ness
might feed inflationary flames, but while the situation
has not yet reached that stage, it must have occurred to him
and his advisers that the day
may come when he could
wish that demand could be found to

keep existing facilities
fully occupied and their' normal labor forces fully employed.
developments of the past few months put quite
enormous

producing capacity of the country. One
de¬

by rail.

railroads

people

some

or

rates.

wages

railroad

had

of

postwar

any

railroad freight

in

supplies

.;:

rates

middle

nearly,,. ^U-%. above 1939.

;

must suppose, moreover, that a further continuance

until

prices ?t>f

and

-

The President

increase in the steel

not

By that time railroad.
the

Now Full Utilization

At least, the

railroad

that

much

so

have

was

1946

of the Chief Ex-

out of date the President's demand that there be

other

warned

are

in

authority

(677)

railroads,

or tax-supported gov¬
ernment-operated
railroads.
Ii

in

that

than

increase

grain and livestock must be raising the bogey

and labor productivity.

wages

,

fact

much faster and

so

further

now risen, as to whether at the lower prices full scale Y
production can continue profitably at existing ; levels*

;|

this—the

prices, including wages, have
risen

ecutive.: If the price of clothing is down somewhat
compared with a few months ago, with consequent -rer
ductioii of complaints from
consumers, the questioa has

/

charges,

choice

the

living is declining—as it is in moderate de¬
cree—and hence the political danger from disgruntled
/ housewives is reduced,/ the progressively weaker mar¬
of dissatisfied farmers before the eyes

CHRONICLE

Rates Insufficient

the cost of

••

excessive fixed

or

Just

troubling him less, increasing unemployment and partemployment must be beginning to harass him. If

in

FINANCIAL

what is the cause?

"fourth round" of wages is

a

time

kets

traffic

&

that

be

presented

cially to the shippers and business
men,
their

there

have

had

officers

and

railroad

execu-!

tives realize the need for keeping
rates as low as costs will permit.
Their whole

training is in the di¬
rection of seeking high' volume of
traffic at low rates—far lower, on
the
average,
than those of any
other form of transportation which
offers service to all parts of the
continent.

And what is the President to do about it all?

Our

opinion is clear and unequivocal. He should, and:*.*
Congress should, concentrate their attention upon-re¬

moving the impediments which government itself has
placed in the way of business. Nothing else, in our judg¬
ment, would*do so much to provide assurance against
the development of another deep or prolonged depres¬

:

sion.

We take it for

that be will have
so

.

•

"let down the bars" in such

further

i

of this type of

none

powers

going into debt for

a way

on many

$s

to encourage

goods.

consumer

step is inflationary and unsound

as

necessary,1 and that in
tip
short run—or until such time

That such

counts

seems

us

It should be borne in

stimulate

the funds to

arc

.

from?

come

<

the

reported shift bf
from the rails is the

creases

railroads

alone

air

days

of

means

50,000

plane-crew

•

time.

This

»

efficiency of the rail method is

a

depends

upon
handling heavy traffic at
high efficiency—and that is just

so

great that there is not only nothing

what

in existence, but nothing in sight,
which can take its place in meet¬

Traffic

the

railroads

in

did

1948

slightly below the
peacetime record of 1947, but it was
ing the major transportation needs nearly half again as much as it was
of this continent.

I

Railroad Efficiency
■

for

The efficiency with which rail¬

roads

are

transportation

output,

fuel

efficiency.
The
transportation of the

one

output

did

ever

in

greater

was

before

—

times

what

•just

after

the

it

was

in

of

of coal or

burned

in

a

teaspoonful of oil
Diesel.
ical

And

the

of

ciency

of

these

engine,

than
1920i

or

if burned in
facts

are

ever-growing




the

intervening

years,
gone
pro¬

portion

of

which is

required to meet in+erest.

railroa d

;

If the

low

ever

revenues

roads,

both

a

money

invested

tyo-

comparison

effi¬

other

and

in

of the

rail¬

relation

to

in

and

them

the

in

conditions

of

or

ated

our

the

railroads

for

period
net loss—to

of 26

a

months, with a
up by the taxpayers—
Which averaged nearly $2,000,000
a
day.
During the second World.
be

made

War, the railroads

with

the

earnings of

are

not

not

or

due

poor

to

move

may

some

charge lower than he could by
And

the

to

extent that

become

may

higher

rail

than

other transportation charges there
is
a
natural
disposition to use
these other forms of transport.
To this group of businessmen I
should like to present one aspect
of

this

times

situation

which

is

some¬

overlooked.

Any seeming
"saving" to be made by diverting

traffic

from

in

the

the

railroads

long

may

to have
been less than no saving at all.
Under any conceivable conditions,
a
major portion of the freight
prove,

run,

car¬

ried

by rail—and that* is- espe¬
cially true of the long-distance
transportation in which California
is

so deeply interested.
That being
true, this essential service by rail
will have to be supported, its costs

will
are

can

have

to

only two
be

done

be

met.

And

there

in which this
through adequate

ways
—

transportation charges upon that
portion of our production which
uses rail service, or through some
form
of
government
operation
with deficits made up by the tax¬

due

tc

management.

insufficiency of

The Choice Before Us

That

is

adequate

the

choice

revenues

before

But
most

this was by no means the
important gain to the coun¬

try. During the government oper¬
ation of World War I there were
substantial
increases
in
freight
rates, whereas at the end of World
War

II

freight rates were
no
higher, and in many cases were
lower, than when war began.

adjusted to to¬

day's costs of privately

operated

control

the

other

world,

drift

a

sooner

form of gov¬

operation of

and

railroads—such

carried

drift

a

railroads

outside

as

all

.the

American

continent,

ownership

and

has

over

North

into
operation.

state
Since

and

tween

and

government

privately

If

railroads

same forces

other

about only i*
which pri¬

vate

operation is carried

ever

should

on

to exist.

cease

The 'way to keep on having the
kind
of
privately-owned, busi¬

witness

what

That there should be fair
is

important

put into railroads.
their
proper

hope

having

a

business—such

return

on

the

railroads

money

will

as

of

rate

a

invested in

justify and

at¬

can

do

without railroads and nobody be¬
lieves that the day of improve¬
ment in

over.
The
indeed the only
way, to keep on improving is to
keep on investing in better fa¬
cilities.
And,
u n d e r
private
ownership and operation, the only
way to keep on having investment
is through earnings, or the pros¬
pect of earnings, sufficient to jus¬
tify it.
/^^YYyY-'Y

railroading is

best' way,

We

and

don't

beneficial

of

such

invest¬

back to their own¬

came

after

the

government opera¬

tion of the first World War, they
have

invested

betterments

in

an

additions

average

and

of $540,-

year—twice as much as
they have paid their owners in
dividends.
In the year 1948, this
000,000

a

investment
mounted

in

improvements

four times

$1,250,000,000—about
as much
as was paid

the

in dividends.

to

owners

the

From

better

plant

so

a

should be a
business is of impor¬

the

who

men

work

on

railroads—for

profits, directly and
indirectly, mean the expenditures
for
better
railroad., plant
and
equipment which make possible
better jobs and

better pay.
profits are important
shippers and travelers, for they

Railroad

source

from

financed

which there

those

improve¬

ments which mean more adequate

and

dependable freight ser¬
comfortable and safer
service.

more

vice,

more

passenger
But

this

above

all:

reasonable

profits are essential to
the effective working, and even
to the continued existence, of that
profit-and-loss system whose tre¬
mendous

achievement

about

every

us

—and

we

see

all

day in the plenty

freedom—which

the

American

the

enjoy —such
plenty, and such freedom, as are
known to no other people on the
people

face of the earth.

I*

■

Norris and Saris Join
Hornbiower & Weeks

at the

In the years since the

see.

railroads
ers

effect

guess

It has been established for

ment.

all to

have to

earn

railroad

Need of Railroad Improvement

Nobody believes that we

to

railroading

to

be

with those of

of

expectation

return.

Prosperous Railroads
That

the

compare

of

Widespread Importance of Having

can

other

and

fair chance

reasonable

are

ings which

millions

They invested
the
perfectly

in

money

line

earn¬

the

to

who, directly and indi¬
rectly, own the securities which
represent the billions:? of dollars

transportation

producing

profits

persons

to

costs,

happening today

in the railroad business obviously

country "has
thrived is to have rail revenues in
with

is

in Europe.

•

rail
this

ness-operated
upon
which

transport.

major lines of business and, in¬
deed, most human activities—as

private

under

engulf the

soon

And
so-called, of trans¬
port would be the longest possible
step toward like treatment for all

tance

come

of

contem¬
that the

us

socialization,

prosperous

could

would

forms

States

conditions

drift,

so

history shows

porary

operation of railroads.
Govern¬
ment
operation in the United
the

railroads

operated

in any major country on the face
of the earth.

still

ILL.

CHICAGO,

John

—

J.

Merrill

C.

Saris, regis*

Norris

and

tered

representatives
formerly
& Co., Inc.. have be¬

with Blyth
come

associated with Hornbiower

& Weeks,

39 South La Salle Street.
joined
Guaranty
Trust Co. of New York in 1922
Norris:

Mr.

and

was

with Blyth & Co. for

16

He is with the investment

years.

department
Weeks.

of

Yy,:;:Y

Hornbiower
&
YY-Y: Y Y'Y."'Y
*

joining Blyth & Co.,
Mr. Saris spent six years in the
investment
department of City
Prior

to

:Y

National Bank & Trust Co.

cre¬

associated with the

He is

municipal de¬

ated, there have been many bene¬ partment of Hornbiower & Weeks.
fits.
The level of wages received
by railroad labor has considerably
than doubled since 1921.
So

more

have the prices

Earl W. FisherI.-?.

which those who

sell to railroads receive for mate¬

supplies
and fuel.
Tax
received
by
govern¬
ments have multiplied.
But, with
all those increased payments, the
rials,

Of Bateman, Eichler
LOS

payments

freight
us—

ernment

is

some

no

proved plant and equipment.

particu¬

profits

later, into

the

by

up

tract continued investment in im¬

the trans¬
A general and

is

operated
net loss to be England, the roads of the United
taxpayers—but States and one road in Canada
with tax payments to the Federal' remain the only privately owned
made

the

among

benefits

the nationalization of 'railroads in

were

not

payers.

industries,

inefficiency
•

been.

profits

a

to

load of this continent will be

■■■""';Y-YYYvY-

rentals and other fixed charges is

railroading—efficiency

on.

In

less than it has

which will become greater as the
years go

net

than

handled

fact, fixed charges have
down, not up, and today the

first

steam

less

income

volume

in

World War.
moving a ton
mile with two ounces
tablespoonful of oil if

a

■■■■

roads.

Railroad s tod a y are
of freight a

smaller

earnings was not
due to any increasing burden of
financial charges upon the rail¬

two-and-one-

and

■half

23%

operating

the

This decline in

average

1948

railroads

in 1929.

of

freight train, as measured in tons
bf freight moved one mile in an

hour,

the

railway

operated is greater now
than it has ever been in the past.
Take just two typical facts, one
of

was

in the prewar peak year of 1929.
And yet the near-record volume
of business handled in 1948 earned

"

*

•

are

effects

Regardless of this general situ¬
ation, however,
there doubtless
are
special situations in which a

rates

railroading

rates

their

lar product in some other way at

Y V

Successful

man-

traffic

tries.

rail.

by

of

widespread inflation is no respec¬
ter of persons or particular indus¬

What About Railroad Profits?
it

railroad

in

shipper

do

in

confined

portation agencies.

Probably the President has already concluded that it all
nearly so simple as supposed.
Y Y

(Continued from page 17)

shift

place dur¬
ing the emergency of war. And it
should be noted,
also, that the
.forces which brought about in¬

is not

.Vr

the

of

traffic
reverse

to the rails which took

higher costs have made it extremely difficult for them
to do so without incurring heavy debt or laying exces¬
sive tax burdens on the public.

Y

mind, how¬
considerable part

a very

movement

They must either be bor-

rectly in industry and trade. States and municipalities
arc eager
to launch enormous spending programs, but

.

of

away

rowed from the banks with consequent enlargement of
the money supply, or else be taken in one way or another
from sources which otherwise might employ them di-

;

that

ever,

the

railroad

railroads, under

,

costs—there simply is no
way to meet the situation.

upon
other

obvious—assuming that the step is such as to
borrowing against the better business judg¬
ement of the individuals concerned. He may enlarge the
expenditures of the Federal Government, but'where
to

investment Y in
im¬
can
have' its effect

long-range
provements

class which

one

in

whose

of

stress and emergency.
In the first
World War, the government oper¬

far-off

rates

He

shared

money and
self-denial made them possible.
The
alternative to -reasonable

of the value

Y The -essential fact is. that in¬
:: creased >eosts have made increased

philosophy, and

ask what is the President to do about it all?

we

may

a

granted, however, that the

The

investors,

lands, a victory which1
takes a smaller;
could not have been won without
of the average
an
epic
transportation perform¬
commodity shipped by rail today
to pay the freight' than it has at ance here at home.
But the issue—if it'ever comes
any time since the Interstate Com¬
to an issue—will not be presented
merce Commission began to com¬
in the form of a direct choice be¬
pile such figures;
it

way,

equipment.
not

they are lower than
can
be
measured
only on the
they have been at any time since
shortened timetable to victory in
.the first World War.
To put it1
part

efficiency

are
due' to increased in¬
vestments in better rail plant and

the

They

-

another

gains* in

great

which

experience with both
private and government operation

A

own

the

lower.
Such
only because

possiole

has

be.

greater gain was in the
When today's rates are consid¬
velopment of the current uncertainties will deter private
adequacy, efficiency and dependa¬
enterprise from entering freely into undertakings to enlarge ered in relation to the value of
And the
the goods transported, it will be bility of transportation.
or improve facilities.
greatest gain of all was one that
found that
,

of

actually

are

be no doubt what

higher rates may have the effect
treasury which averaged more
of ;, "pricing the railroads out of!
than $3,000,000 a day.
Here was
the
market.;"
It
is
a
situation! a
difference of more than $5,000,which should be taken and is be-:
000
every
t i m e the sun went
ing taken seriously. Railroad traf¬
down.
fic

are

results

would

can

decision

privately, with

by

to

were

that direct way to the people
the United States, and espe¬

of

age,

25

charges

railroads
more

now

received

average

only

than they did

and passenger

by the
slightly

in 1921,
fares, on the aver¬

ANGELES, CAL.—Earl W.

Fisher has been elected Vice-Pres¬
ident

of

Bateman, Eichler & Co.,

453 South

of

the

change.

Spring Street, members
Angeles Stock Ex¬

Los

Mr. Fisher in the past was

with Banks, Huntley & Co.

26

COMMERCIAL

THE

(678)

Our

Reporter

Free

Governments

on

FINANCIAL

&

CHRONICLE

Enterprise—Source Of Our Greatness
(ideals handed down from genera-

(Continued from first page)
ing

JR.

By JOHN T. CHIPPENDALE,

destined to require ef¬

cause,

spite

skepticism that

Demand

seems

purchasers to the sidelines. . . . The market has gone through periods
like this before, particularly after a fairly sustained rise such as
this one, but in each instance, when the underlying conditions were
favorable, as they are now, modest price recessions have turned out
to be real buying opportunities. ...
.

fresh

issues.

bank

.

bonds, while

restricted

and

drawn

individual

of

indigestion

the
to

may

were

a

...

of

his

There

labor.

for the exercise of indi¬

collective

and

enterprise.

the extra rewards of
the extra effort.
He might even
aspire to the laying up for him¬
self and his dependents a competence for the declining years of
Aife, and with independence
of
ffcind project into the future the!

Banks, by encouraging

Reserve

,

.

reap

.

.

.

.

.

evidence of that strength
which has brought this nation to
the enviable position it occupies
gave

REACTION?

WHY A

,

Although a reaction in prices of Treasury obligations might be
healthy, since the market has been making only limited progress, and
has been

sidewise fashion, has the movement on the up
side'been such as to expect much of a reversal in quotations?
Most of the buying has been by investors, which means that secur¬
moving in

a

.

ities

have

been

taken

of

out

the

because

market

of

the

today.

The

able, it

came

In

that

which

in full

inevit¬

was

.

.

Commercial

.

have

loans

.

stable

been

lower.

to

.

atmosphere

,

.

.

.

.

means

together it would seem as though any
down-trend in government securities should be largely technical
Putting
of

and

all

not

too

of

that

long duration.

interested

are

CREDIT

tion,

these

in

maintaining income.

those

by

...

MEASURES

Regulation W, according to report, will not be changed

imme¬

diately, although the effect it is having on business is being carefully
watched
•of the

by the authorities.

If there should be revisions of

...

follow,

that might

all

of which

portant influence upon the money markets.
an

could

...

have

an

im¬

If there should be

easing of credit restrictive measures it is believed that Regula¬

tion

W

first to

will be the

in

changes

be

changed, probably to be followed by

requirements

reserve

of

quirements of the stock exchanges.

1949

maturities

are

traders although

and

of

out

the

1949/51

the

getting

October

the

and

margin

\

>

and

.

.

December

There has been minor trading
into

iy4S

the

December

3yss and 2y2s.

2s

of

The

feeling

likely to get higher

coupon

.

.

.

exchange that might be made, than

The

partially-exempts

continue

to

go

out

of

the June

are

the market,

despite the feeling that taxes may not be increased as much
all)

as

had been expected some time back.

.

.

.

(if

The floating

supply of these bonds, especially the last four maturities, is very
limited and
from

what

the buying in
takes

place

in

them has been of the best.

taxes, the

tax-free yield

.

on

.

.

Aside

the




standard

par¬

M If 3M3

Why, you may
ask, do.es a
speaker at this National Industry
Army Day Dinner attempt to oc¬
our

this

in

here

attention
with
the
of such gospel?
Are
views to the contrary

audience?
in

stand

ment

on

Does

of

need

virtues

the

Americanism?

hope not.
Yet
if these words constitute simply a

public reaffirmation of faith, the

time will not have been wasted. I
would that a thousand speaker
on a thousand occasions, through-

words

such

Let

with

reverberations

that

echoes
will

and

strange

doctrines

that

are

we

in

tried

More than

of

value of

which

the

have

we

suc¬
suc¬

cession.

and

cultivated

so

that

newcomers

and

wel¬

were

contributions

to

sector

one

promoted

line

of

something

manufacture

developments

in

other

This interplay between and

lines.

the industries has been
only most interesting to ob¬

among
not

but it has been a dynamic
making for progress in all

serve,
force

of

them.

Throughout the length

breadth

and

large

of

of

thousands

the

land

are

enterprises,

both

small, supplying mod¬

and

of almost anything
individually or collec¬
could
desire.
Thus
the

versions

ern

that

man,

tively

American
not

run

nor

to

economic

to

system does
specialization

narrow

the

encouragement of

an,-

unbalanced

one-industry country.
we find that the wide¬

Happily

spread initiative which has flour-'
auspices

ished under its favorable
has begotten

versatility

as

well as

intensity.
times of peace

In

of

establishment

in

tributed

has

con¬

significant fashion to
and purposes of the

needs

the

and in times

this well rounded national1

war

industrial

country, and to those of some who
dwell beyond our own horizons.
The farmer, the manufacturer, the
artisan, and in fact consumers in
of

hundreds

walks

manifold

their

solemn

of

tones

the

ments

material

more

the

per¬

industry in

physical

supplying
for

In

recall

formance of American

and

fulfilling

wants.

we

attest

life

of

the services rendered in

imple¬

wherewithal

victory in the recent World
Notwithstanding the years

War.

of advanced

operating

of the

preparation in favor
the mass of arma¬

enemy,

developing.
The beginnings
were
humble enough; there was

ment,

Barely the first
shoots of industrial organization
were
appearing on the scene one
hundred and fifty years ago. The
present station on our march of
progress is remarkable, its equal
is not to be found anywhere in

Army, Navy, and Air Force, along
with the civil bodies mentioned

the

world,

tion

lies the story of
inspired by ambition,
willingness to work hard and
to think harder, the urge to take
risks accompanied by faith in the

It

enterprise

of

effort

with

the

stimulus

derful

It

dustry.

Global

tense

our

the
War

American

the

of

current

situation,

For more than five years it

ties.
'had

been

running with expanded

plants at full capacity, concentrat-

availability of abun¬

materials

raw

and

great

breathe, and reconvert its facili¬

expended.

ing on the production of those
I special products required for the
I prosecution of armed conflict. But
in¬
I the hope of turning to a less ex¬

dant natural resources and neces¬
sary

the

in

stock

the

must bring

commensurate

rewards

and

brow

the

war

industry looked forward to an in¬
terlude in which it might take

that

conviction

the

and

but yesterday that

seems

ceased

the

organiza¬

not found wanting!

was

firing

industrial

Our

'

accorded

aid

bountiful
effort.

attained position

sweat

of

words

early beginnings and the present

future,

equipment

and

have
added
their
commendation for the

heretofore,

the

Between

today.

supplies

produced on American soil was
overpowering in the hands of our
armed forces and their allies. The

magic start.

no

The ready

Accompanying
the
forward
of the arts and industries,
higher education in America was

year"

progress and invention

one

bestirred

and

creations of the mind

perform miracles, and miracle
ceeded each other in rapid

multitude

a

grewAlpftogether,

field

in

in

new

system under

been

in

Many of the

in others. The need for

has furnished impressive evidence
of the

We

Improvement and in¬

equivalent

growth

industrial

practically

meet

'for-.their

vention

century and a half

a

persistent

into

year

the

the whole.

of

true,

and

tion

was

comed

midst

our

channels.

endeavor.

demands.

after

but

unwilling to forsake

heritage,

our

apostles

those

convince

in

one-sided

industry, equipped with skills

entered

be pro¬

claimed from the housetops,

of

early industries

land, might deliver simi¬
lar messages wherever and when¬
ever the opportunity might be af¬
forded.

reached

kind

of varied

the

out

been

narrow

and facilities to

orthodox

I

the

spread

anyone

enlighten¬

of

Natural competi¬
helping enterprise to

new processes, new

new

to

might

a

was

American
more

I

won¬

properly

acting

great natural

pace

soon faded and the
substantial breathing

rising generation might be
the better equipped to undertake
the responsibilities of useful citi¬
zenship. Science, engineering, and

be said that these

scientific
research,
destined
to
play such important roles in mod¬
ern industry, assumed positions of
increasing importance in the edu¬

were
Industry was not swamped, and
intelligence and effort, these mag¬ -the system did not break down. It
nificent assets of which we speak was beset from time to time with

cational system.

posing unchanged in their original

each

It is appropriate

storehouses

were

an

ever

present

challenge to the ingenuity of our
One must remember that
it not for the exercise of

people.

might still, in large part, be

re¬

The will to cultivate

to

say that had science and engineering not been developed to

positions.
and

to

their

and

manufacture, to build and to

current

and

high
plane
byenterprise,
industrial
military effort would have

been

severely,

reap,

,

to

mine,

transform

ly, handicapped during the period

operate, was the determining fac¬
tor,. in bringing
these material
things into the service of human
beings and the national life. In¬

of

centive

American

or even

disastrous¬

ro^r,t Global War

.

is

the

keyword

here,

as

been

aIways' and lends suPP°rt to our
lineal statement. that the great

mightily by the ideas and

basic strength of any nation stems

Now if the minds and hearts of

moved

uk

the

trary controls.

velop
and

taxable issues.

-

is

Incentives to excel, to de¬
products,
industries, were wide¬
and unfettered by arbi¬

dustry.

the

.

land

so

the

tially-exempts is still more favorable than that available in the
•

communica¬

valiant efforts of all workers in in¬

fostered

■

nothing too tangible has been done yet in the
.

of

the

surge

September 2s.
.

at

re¬

,

attention from both investors

more

partially-exempt

issues through any

then
V

is that the December maturities are more

and

banks,

.

.

/•

of sizable position changes.

way

.

MANEUVERS

MARKET

-

some

provisions of this regulation, this could be the tip-off to other

developments

till

soil, develop vast
natural resources, generate power,
and fulfill the daily wants of a
growing population.
In due time
came invention, science and tech¬
nology to accelerate the march of
progress and to supplement the

It should also turn cut to be

...

good opportunity to acquire needed issues, specially

a

free

evidence revealed.

of freedom

opportunity, it is not
that there developed in

.

.

of

of

demonstrated worth.

measure.

bred

for

need

response

strange
this conutry, step by step, decade
Commodity prices continue to decline, and the inflation factor, to after
decade, an industrial mech¬
say the least, seems to have lost a great deal of its force. . . . Most
anism to serve the requirements of
of the business indices appear to indicate the demand for funds will
the people.
There was nee'd of
not be as substantial as in the past.
Also during periods of un¬
implements with which to push
certain economic conditions such as now, there is the desire to seek
back frontiers, provide transpor¬
the safest haven for funds, which is in government securities.
tation and
income.

efforts

high; nowhere is there
an
equivalent abundance of de¬
sirable goods;
nowhere is such

cupy

switches of bank
bonds into tap issues, are protecting their own supply of eligibles
which could be used at a later date, if the market should tend to
move
sharply on the up side.
.
.
It seems as though non-bank
owners of longest eligible taxable are inclined to move into the last
element of his own social security
two tap bonds when the price spread between these obligations is The ambition to do and to accom¬
l.25/32nds or better, in favor of the restricted issues.
Savings plish was thus fostered and en¬
banks are the principal operators in these exchanges, although fire
couraged by wise' governmental
insurance and casualty companies and charitable organizations also
provision so that the minds and
liave been doing some of it.
hearts of young America at once
Federal

other

no

living

if one citizen, through
promptings of his spirit, chose preaching
there any
labor more diligently than his

hope to

ItESERVE INVENTORY

The

collectivism.

of

and

might ogies,

neighbor or to use his intelligence
freely or to capacity, he might

obligations, since some of these securities of late have not been

•

result

ambition

development

not

to

this country are privileged to look
out upon a great diversification

by our financial or economic strength to
If there
be
in
any
the rights of be found.
so
jealously quarters a disposition to yield to
new land of the enchantment of foreign ideol¬

Moreover,

time the floating supply of

going into the hands of permanent holders.

room

vidual

is being added to somewhat. ... A minor
be developing in certain of the bank

the eligible obligations
case

has

adopted

that

fruits

the

was

tap bonds have increased positions of
means that
Federal is losing the

at the same

which

right to work, and the enjoyment

.

This

.

It

socialism or communism,
let the tempted call the roll of the
Wtihin
the
framework
of its nations, one by one, appraise their
situations, and judge the merits
government ample provision was
of the respective systems by the
made for the dignity of man, his

investors from the

11011-bank

by

swaps

distant eligibles into

more

the

that

was

written instruments

the

of

is indicated

cost

unparalleled
opportunity
be, and was, created.

opinion that prices of Treasury obligations may be vulnerable
inventories by dealers and traders

It

The

of

terrific

at

won

safeguarded

setback is the building up of

:

confined

every

position has not been

has

or

and

material

great

In

the

uncertainty,

portfolio managers are not as vigorous in their accumulation of
as they were a
short time ago. . . . The reason advanced

/

Industrial
America

trary

to

in

securities

'

its

Development Not
Confined to Narrow Channels

held by the arbi¬
operations of a despot or
bureaucracy.
Neither is it the

by

preserved for the benefit of all
generations. With meticulous care

been

appearing here and there in the government market. . . . So far,
this attitude seems to be largely among the -professionals" although

...

achieved

be

national forefathers,

especially in the longer bank issues.

hearts of

and

.

Industrial

and
free
institutions
found citizens
expression in our Constitution and have built the complicated struc¬
ture
which
has
served
us so well.
Bill of. Rights.
That which had

are

a

people.

initial struggle for freedom,

were

for the

day

the

fortunately,

Most

:

Signs of caution, together with a modest amount of

That exalted

re¬

ideals which served to sustain the

WARY

to

soul,

to

day, in the remembrance of it.

have been the market lead¬
ers, with the scarcity
factor causing rather wide price move¬
ments in the 2'4s due 1958/50.' . . . Switching from the eligibles
into the taps is also an important market force. . . . The partiallyexempts are getting considerable attention, with out-of-town
banks again the principal buyers. . .'..-Most of the demand in the
market is from other than New York City institutions, because
money has been tight in the big money center. . . . Short bonds,
however, have been bought in limited amounts by metropolitan

some

national

our

well

do

would

We

ance.

longer taxable bank issues

...

Amercian inherit¬

cant part of our

,

banks.

the minds

from

repre¬

republic, what has the
privation, and sacrifice, it
no
barriers, feared strength derived therefrom ac¬
The
answer
lies
odds, but pressed on to a victo¬ complished?
rious issue.
That founding spirit, about you.
Within the period of
so
powerful in uniting the aims a relatively short national exist¬
and
in animating the
deeds of ence, our system of responsible
those who had not yet experienced private
initiative,
or
American
the blessings of a national exist¬ way of life, has built a nation of
the highest rank in world affairs.
ence on these shores, is a signifi¬

prices

The

this

generation in

countenanced

buyers are not inclined to step

still substantial although

is

to

no

in order to get all securities they want because they feel
that a mild correction of the price advance may be in the making. . . .
A wait-and-see-what-develops attitude has taken some prospective

\ip

tion

sentative

fort,

constructive side de¬
to be creeping into the picture. , . .

bond market stays on the

The government

Thursday, February 10, 1949

American

people

have

thought of

j spell

I

a

shown to be futile. Ci-

was

vilian demands poured in and the
race

was

on

again.

handicaps beyond its own tontrol,"
and discouraging delays were en¬
countered. Output

suffered there¬

by, but the records of postwar pro¬
duction show astonishing figures.
In the face of shortages of
manpower

skilled

and necessary supplies,

shortages existing because every¬
one

and

was

do

duction

stripped

trying to buy and build
everything
records

those

of

at

once,

greatly
former

pro¬

out¬
peace*

Volume

Number 4776

169

COMMERCIAL

THE

time years,.,and in instances incidentally,
was
about.- three-,
equalled or surpassed those of fourths the size of the prewar
wartime
mean

vintage.

similar

mind,
in

met

hold,

we

who

are

specifications

full.

of

though their

even

instantaneous
not

those

are

no

was

accomplishment,

there

and

This

it

Be

were

said

em¬

phatically that in this situation
industry did not seek to diminish

production at any point, at any
time, and that the philosophy of
scarcity is not one of its guiding
principles.
Its responsible lead¬
ers
know
that,
particularly in
of

times

monetary

inflation,

one

of the most effective counter irri¬
tants is

abundant flow of goods

an

—and

industry certainly has noth¬
ing to gain from inflation.
With equal emphasis we wish
to

say

much

few

a

increase

aboul the

words

discussed

subject involving

industrial

in

capacity.

The matter has been thrown upon
the public mind through various

media,
from

sometimes piecemeal and
side

one

another,

or

so

that

and'

ceased

critical

all

ments had

been

retirement

of

require¬
met, the overdue

obsolete

and

badly

initiated.
Such action had to be taken, as
the unremitting operation of fur¬
naces
for a period of more than
five years had exacted its toll of
equipment

worn

the

older

was

units.

time,

same

a

At

vast

rehabilitation

and

undertaken.

In

-

down
operable

This

situation

the

about

program

expansion

,

was

interim

this

of
of

hurried

review

should

serve

to

of ", the
prove,

question,
that the American steel industry
has been expanding its capacity
beyond

in

argument

substantial

a

or

annually

since

the

war,

rehabilitation

for

its

of

have

and expansion
Strenuous efforts

plants.
been

made,

and

being

are

continued, to place producing and
manufacturing facilities in posi¬
tion

to

valid

all

meet

demands

promptly.

These programs, and
are-many formidable pro-

there

call for

prams,

ties

of

quanti¬
machinery, and

enormous

supplies,

fabricated

structures; as well as
large ■ numbers
of
skilled
Workmen. Now the definite ex¬
for

perience has been that these ne¬
cessities
have
just
not
been
available
in the' quantities and
numbers desired or planned, and
,

that

distressing

long

have

schedules

-

delays
the

been

in

rule

rather than the exception.
'

view

In

been
to

what

of

encountered,

see

that

more

has

we

actually
unable

are

could have been

done than has been done, regard¬
less of the size of the original ob¬

jective,

or

If, for example,

plam

hundred brick

masons are

a

needed

for

a

are

available, the job will not be
on time..
If an increase

particular, job and ^ only 12

manner,

of

10%

in

capacity

has

been

cally

possible,

would

.

the

real

situation have been enhanced had
the

20%

original figure been placed at
instead of 10?
These are

considerations,
based
noon
experience
gained in the
field during the past three and a

practical

half years, and

they

not sus¬
ceptible to much alteration simply
by wishing that they might be
are

different.
y

-

WhileV the ; attitude

formance

of

industry

and per¬
in general

have been mentioned in the fore¬

going remarks, the more intimate
experience of your speaker has
been with a segment of the steel
ihdustry.
We recognize that a
heavy responsibility rests upon

a

necessary commodity
been
in
short
supply

than

three

These
tra
to

which has
for more

years.

only

are

few of the

a

considerations

which

ex

lead

up

the

production of steel ingots,
are many
more, of great
magnitude,
which
follow
the
actual making of steel in the pri¬
mary form.
For the purposes of
ancl there

and

we

something of what is transpiring
at present.
That there is faith in
the future is apparent from what

industry has done in the way of
providing capacity to meet con¬
tingencies.
Whatever the

discussing

are

not

small

affairs;

they require time.
That the in¬
dustry should handle them in in¬
crements or steps of suitable size,
with the idea of getting all of
those things done which can be
done,
fall

physically,

on

side

the

would
of

seem to
wisdom and

may

of

course

events

be, the steel industry is de¬

termined

to

its

do

full

share

in

meeting the needs of the country.
A major constituent of this policy
is

that

be

properly equipped
to respond to the calls made upon
us

we

by by the armed forces of the

United

States, for therein lies the
security of all that we hold valu¬
able.
Working with and for the
Army and its companion services
is not

above
$7,500, as well as market
the Koppers
Company
larger percentage of smaller in¬ raised $12 million—and a
couple
come
of
receivers, preferred fixed
utility companies raised some

comes

value investment.

rated

were

least

Common stocks

new common

attractive

tion

of

4

sides.

the

evident

some

that'

much

of

the

eco¬

nomic

thinking by the general
public is still done in the shadow
of

the

great

of

all

of

us

that

/

the

of

In¬

that

been

suggested.

mentioned

all

speaker at

ing

a

urged

laws

and

of

haven't

I

them.

One

meet

the manifold problems con¬

of

such

a

large part of the people's savings,
might invest more in common
shares.

might

I

think

well

be

the

suggestion
followed within

reasonable limitations,

but-it cer¬
tainly does not promise a quick
or
complete
solution.
In
fact
nothing
does.
We
can
hardly
hope
for
an
early
favorable
change in taxing policies, though
certainly we should all do what
we

to

can

promote

constructive

us.

Ingenuity

ioration."

third

Causes of Equity Capital Shortage

year

I

not

quarter of

1948

were

run¬

ning at the rate of $15 billion a
out of a personal disposable
income
running at the rate of
$194 billion (that's income after

going to give much
why there is so
These savings are well
much loan capital available mostly taxes).
from
insurance
companies and below the wartime peak of $34
billion
in
1944
when
people
relatively so little money for com¬
mon
stocks but will touch on it couldn't buy automobiles or take
briefly. The taxjng system is gen¬ vacation trips, but are nearly 6
time

am

to

reasons

Now

in

conclusion

leave the field

I

want

of national

to

statis¬

and intellectual
speculation
get down to cases. American
companies in the aggregate do

and

not

all

have

too

know

much

debt, but

individual

we

concerns

which, faced with present capital
market conditions, have borrowed
rather heavily and have put off
raising the additional share capi¬
tal they know they ought to have.
I

believe

the

sound

financial

policy for business and the right
advice for both commercial bank¬
ers

and

investment

bankers

to

times the average for 1935 to 1939v give is to face the difficulties and
'raise some money by the sale of
This $15 billion of savings is also
sponsibility for the shortage of
common stock in this market as it
risk capital and, I think, correctly. a much larger percentage of dis¬
posable income than was saved in ,4s, if that is necessary to main¬
Emil
Schram, President of the
tain a sound, safe capital struc¬
the
late
30's.
Individuals
are
New: York -Stock Exchange, gave
ture.
■/'
now
saving nearly 8% of dis¬
an excellent talk on this subject
And
there
is
a
market
for
posable
income
against
about
4%
at
Chicago not
long ago and

erally charged with the major re¬

because

it

is

a

basic

some

new

common/

had

company

about

$25

debt ;

no

million

of

net

so they easily could have ;
borrowed the money on- long-term
at a low rate, but the directors

felt
of

that

a

debt

in that kind '

company

business
and

is

off

better

decided

without

invite

to

stockholders to subscribe the

capital
the

rata at

pro

market.

about

ings

share

per

It

current

the

year's earn¬
the number of

on

outstanding

issue.;

new

a price below
price was just

times' last

5

shares

The

its
new

including the
just 10 times

was

dividend

stockholders who
10%

rate

so

the

subscribed

are

their

on

additional '

The other two were rather small

public

utility

give

this

fair

stock, and ITU

the terms because I as-1

you

sume

which

companies

sold both bonds and

audience

amount

of

absorb

can

getting indigestion and they
to

a

without'

figures

serve

illustrate present conditions in

the

capital

water

West.

Its

privately

preferred

bonds were
with insurance
3.05% rate, some

a

convertible

stock
basis

at

the

and

offered to the

holders

stock¬

which

makes

at the current

rate.

The other

ing

common

common

price

a

the yield about 9%

dividend

into

sold to the public on

was

5.20%

was

a

the

30-year

companies at

a

was

in

company

placed

common

One

market.

supply

was

electric

properties

a

light

in

concern

and

number

a

own¬

telephone
of

small

towns.

Its long-term bonds went
insurance companies at 3.30%-

to

and the

stock

common

the

to

stockholders

yield

10%

per

was

offered

price to
at the es¬

at

a

annum

tablished dividend rate.

Offerings to Shareholders I
In
note,

the

each of these cases, you will
the common was offered to

stockholders, which generally
the fair thing to do when

seems

shares have to be sold

so cheap in
^earnings.
The only
people disadvantaged by a sale of

relation

to

stock at

low

a

price

holders of the
dilution

by

of

their

making

in

the

a

are

the stock¬

and they
right to offset the

company

should have the

old

investment

further

investment

business

advantageous
terms.
Furthermore, the cost of
underwriting an offering to stock¬
holders at a price under the mar¬
ket

is

less

on

than

the

cost

dis¬

of

tributing the stock at a full mar¬
price to new investors.
If

ket

there's

given
to

going to
be
something
it is more appropriate

away,

give it to the stockholders than

to the bankers.

Now I know

gain

offering

the

to

idea of

bar¬

a

stockholders

is

often not popular when there are
some

large holders in the manage¬

ment who

find it inconvenient to

,

strongly recommended the follow¬

com¬

.

take their respective shares;
But
after all, who is most concerned
.

from

the

standpoint of long run
self interest in seeing a company
safely and soundly financed? The

stockholder, of course, and espe¬
cially the large stockholder. "So if
common

right

capital is really needed
for the good of the

now

business, he ought either to find
ways

and means of subscribing his

share

or

it

terms

on

stock

let

someone

in

line

else

with

supply
current

prices.

A few words in final
summary:
Loan
capital
is
abundant
and

'




►

.

.

worth,

business and investment with¬

to

had

contact, involving

machinery needed,,
million for plant expan¬

The

investment.

insurance

philosophy
which now

com¬

have

excavating
sion.

changing
investment

that these concerns,
direct the investment

tics

clearly that the income tax is not

and re¬ wholly responsible for the lack of
sourcefulness have prevented the venture ,capital. It is reported that
development of corporate deter¬ total savings of individuals in the

fronting-

case

I

A manufacturer of heavy

getting

.

(Continued from page 4)

each

capital.

life insurance meet¬

so

which

intimate

and

/

President

new

relationship
be
continued, out serious loss of revenue.
Collateral
problems of great that ideas relating to wants and
As to the suggestion that we
concern to those who operate the
requirements be freely discussed security salesmen get
busy and do
steel
industry
accompany
the in confidence, and that the road some
selling, that's fine, but there
to" higher
very important matter which has
accomplishment
be are only a few of us and
every¬
just- been
discussed.
Notwith¬ travelled together by these great one
agrees
that high pressure
standing the adoption of techno¬ component parts of our nation. mass
selling has no place in that
logical
improvements,
facilities May we assure our friends and field.
anterior
to
and
following
the and protectors, the Army, that the
Our best hope, it seems to me
steelmakng
furnaces
must
be will to do and to accomplish still is that in
spite of all difficulties,
provided.
For example, to feed runs
strong in
the
minds - and business can be kept
going sanely,
the larger
capacities, additional hearts of industry, and that the
soundly and profitably and that
ore
deposits must be developed, strength derived therefrom is ever there will follow a
change in pub¬
the transportation problems must ready for service.
lic sentiment—a change in the at¬
titude of savers toward taking a
sha re in the risks and profits of
private enterprises

Capital Market

in

financing of three

with

not

this

Facts oi Life in

panies

about $5

safe.

:

men¬

Then I'd

depression of the
early 30's.
The survey noted a
widespread belief that stocks are
The

capital, just to

specific instances.
like to tell you about

the recent

new

interest

some

of investment, the others
being U. S., Savings Bonds, bank
deposits and real estate.
It seems
types

practicality. In the meantime, we
should remember, record-break¬

to

«

—

experience; years of thinking in that -field on the part
collaboration
and
cooperation of the public and our lawmakers.
have brought about a high degree
There are various ways—the cap¬
ing tonnages of steel have been
I of mutual understanding, and the
ital gains tax is an outstanding
produced, in the attempt to satisfy dedication of our
respective 'ef¬ example—in which our tax laws
the
unusual
demands
pressing forts to a common cause.
It is could be made less
discouraging
upon the steel industry from all
a

27

a

stocks in spite of all I have said
iin 1935 to 1939.
The trouble seems to be that that might seem to be to the con¬
ing remedies:
'::
the owners of these large current trary.
Furthermore there is an
:
(1) The abolition of the double
modity, the>essential ingredient of
are
not
investors
in investment banking industry cap¬
tax on corporate profits, namely, savings
so
many
activities. /'Moreover,
shares to any large extent. Farm¬ able of underwriting and distri¬
the tax paid by the company on
we are not unmindful of the re¬
ers are believed to have a
larger buting them—a lot of good deal¬
its rjet and the additional tax on
liance placed upon steel by the
share
of
the
country's
savings ers and brokers from one end of
the stockholders with respect to
armed services of our country, so
than ever before and American the country to the other who will
that part of the same money paid
importantly represented at this
'farmers, as a class, have never work together, enjoy the> confi¬
to him as a, dividend.
National
Industry
Army
Day
been very receptive to securities. dence of thousands of investors
Dinner.
The
case
of steel/ has : -• (2) Abolition of capital gains
■A - survey
of- consumer finances and get things done.
which
been projected into public discus¬ tax
yields little revenue made in 1948
In the last couple of weeks half
by the University
sion. so a few remarks on the and discourages dealings in se¬ of
Michigan for the Governors of a dozen new stock issues aggre¬
curities, and
subject may be appropriate.
the Federal Reserve System found
gating about $75 million have been
During the recent war, the ca¬
(3) A reduction in the margin a widespread preference for in¬ successfully
marketed. ; Twenty
requirements
now
vestments
with
fixed value in dol¬ million new common capital was
pacity of the American steel in¬
imposed by
lars to those with changing dollar raised for Bethlehem
dustry for producing ingots and government.
Steel, the
I am sure these reforms would values—this in
castings was increased from ap¬
spite of the obvi¬ Alien Property
Custodian
sold
ous
decline
in
the
proximately 81.000.000 net tons be jn the public interest. - ;
out
$8
million
worth
of
common
purchasing
But figures reported on current power of the dollar It was re¬ of the Rohm
to a peak of 95,500,000 in 1945.
&
Haas chemical
This increase of 14 % million tons. savings
of
individuals?. indicate ported that % of those with in¬ company — a new name in the

steel

J

find, somewhere, an ade¬
quate supply of steelmaking scrap,

the

finished

planned for completion within ,a
giyen period and a maximum of
only 6% has been found physi¬

equip¬

and-

must

one

wish to

"

dbliars

augmented

land-

(679)

and

emphasize the point that
physical increase has been
desk, or as a practical • matter provided as rapidly as possible,
supported by analysis, pertinent under the prevailing conditions.
data, and blueprints. • ;
Such measures as we have been

try as a wbolevbas been spending
large sums of money, billions of

with

on

CHRONICLE

building up, this thesis there is not the need vestment Bankers Association, Hal
Dewar of San
the
steel-making
ca¬
to elaborate upon them,
Antonio, noted this
nor
to
pacity dropped by several millions discuss the very serious economic condition in his inaugural address
of tons. On January 1 of this year, features which follow in the wake and posed it as a challenge to our
however, by the exercise of every of expanding physical facilities at fraternity to do some effective
resource
known to the industry, the
enormously inflated present- selling and educational work.
the steel-making capacity of the
day costs.
As to what the market
Question of Insurance Company
country stood at 96 million net demands for steel may be two or
Investment in Common Stocks
tons, an all-time high. Plans cur¬ five or ten years hence, there is
So much for the apparent rea¬
rently under way should increase room for considerable argument,
sons
for the
dearth
of venture
this fifmr^ +0 98 million tons by but not here
tonight.
We know
the end of the year 1950.
and
the
remedies
that
what the past has taught us, and capital
tearing

understandings exist.
We would
The people should
know what industry is thinking
and
doing about increased ca¬
pacity.
It makes quite a differ¬
ence whether the subject is treat¬
ed as a wish formulated at a

We know that American indus¬

met

ment

FINANCIAL

water, new
steelmaking
capacity
of
Great mines for the production of cok¬
Britain.
When
hostilities
had ing coal are required, and some¬

there is still the chance that mis¬
not have it so.

be

&

cheap.

Common share capital is

relatively
makes

very hard to get.
This
it important for both bor¬

and
lenders
to
guard
against the double-barrelled temp¬

rowers

tation to excessive

capital

purposes.

borrowing for

28

COMMERCIAL

THE

(680)

&

FINANCIAL

CHRONICLE
cessive

still

Inflation: Enemy of Free Enterprise
(Continued from first page)
Buyers beg sellers for

the

responsibility

mount.

issuance of

instead of sellers begging
buyers for orders. A seller's mar¬
ket is in full being.
We seem to
be in a businessman's paradise.
In the later stages the situa¬

conditions

goods,

Inflation begins to
show
an
uglier
face.
Labor
troubles
begin;
wage
demands
tion changes.

mount; the costs of many firms
begin to outrun their prices. It is
discovered
that many products
to price themselves
•out of the market. The demand
for them shrinks.
Workers are
laid
off.
Firms
suddenly find
themselves short of working capi¬
begun

have

their operations
in the old volume.
Strains and
distortions develop in the econ¬
to

tal

on

carry

marily

for the overunder modern
placed pri¬

money

must

government it¬

infcrease

in

A rise of

money

than

one

prices

may

primarily
prices.
have more

merely of
our
own
government, but of all
governments.
Each government
is primarily responsible for the
I

speaking

am

inflation

not

its

in

country,

own

indirectly.
too
much currency, or by compulsion,
encouragement or neglect it has
forced,
caused
or
allowed the
banks of the country to issue too
much credit. Usually it has done
both of these things.
We may in
some cases excuse part of this in¬
flation as forced by invasion or
either

directly

or

it has directly printed

Either

but

we

side of destruction, and

the

in

it

law on
does

economic

of

forces

den

in

man

which not one
million is able to diag¬

manner

a

a

nose.

"In the latter

stages of the war

that of the combined

checking de¬

posits and

last Novem¬

currency

amounted

This

ber.

$110.9

to

The nation's money sup¬

billion.

ply in this period, in other words,
was
increased by more than $77

billion.
Or, to put it another way,
governments
the nation's money supply in that
from necessity or in¬
competence, what a
Bolshevist period was more than tripled.
Now what has been the effect
might have done from design.
putting an average of $3 in
Even now, when the war is over, of
most
of them
continue out of everybody's pocket or bank ac¬
weakness the same malpractices. count for every $1 that he had
the war?
It has meant
But further, the governments of before
that each of us has tried to buy
Europe, being many of them at
more goods.
Three times as much
this
moment reckless
in their
been ; competing for
methods as well as weak, seek to money has
the
existing
supply
of goods. But
direct
onto
a
class
known as
as
the existing supply of goods
'profteers' the popular indignation
has not tripled, but has less than
against the more obvious conse¬
doubled (even on what I person¬
quences of their vicious methods.
regard as the exaggerated
"These 'profiteers' are, broadly ally

all

belligerent

the

practiced,

■

speaking, the entrepreneur class
•of capitalists, that ,is to say, the
active and
constructive element
in the
whole capitalist society,
who in

period of rapidly rising

a

prices cannot help but get rich
quick whether they wish it or de¬
sire it or not. If prices are con¬
tinually rising, every trader who
has

purchased for stock or owns
property
and
plant
inevitably
makes
profits. ;
By
directing
hatred against this class, theretore, the European governments
are
carrying a step further the
Fatal
process
which the subtle
mind
of Lenin
had consciously
The

conceived.

consequences

rising

profitters

are

a

and not a cause of

some

respects this pas¬

reads as if it had been writ¬
only yesterday. But while

ten

Keynes saw some consequences
with
remarkable
clarity,
there
were

other

no

consequences

less

important that he did not see at
all.
He did not see, for examole,
that
even
the big profits that

thought

everyone

the

business¬

themselves

the
thought

they were making, were

in large

making,

were

men

businessmen

part an illusion.
that point
be

later.

and that

I shall come to
But first it will

it

is

to ask
ourselves
that causes inflation

and what

inflation really is.'

bidding for goods could be
reflected has been in an increased
level of prices
Now let

Causes of Inflation

frequently see today long
lists of so-called "causes" of in¬
flation.
tion

Official documents men¬

one

alleged

"inflationary

pressure" after another. So what
am
going to say may come to
many as a shock, but clarity de¬
mands that it be said. There is one
cause of inflation, and only one:
the over-issuance of money.
And
I

J

us




for goods.

get one point clear.

Inflation, always and everywhere,
means only
one thing: the overissuance of money and credit. In¬
flation is a monetary thing.
This
is

the

sense

in

which

word

the

originated in economics. It is still,
fortunately, the sense in which
the word is defined in diction¬
aries.

For

example, even
issued American
Dictionary
gives
as
the
first
definition
of
inflation:
"Undue

increase of the cur¬
rency of a country."
If the word
were always used in this sense we
cies

and

ization.

is

effect,

into

put

nearly all the falla¬
confusions with which

the discussion is now surrounded.

quantity of

it is merely a
of inflation.

flationary;
quence

But

the

newer

lege Dictionary
definition

substantial

by

an

of

of

its

as

inflation:

prices

On the con¬

for inflation.

increases

and

prolongs

it

trary,

For it increases the de¬

inflation.

still further by
making them temporarily cheap¬
for

mand

for

And

er.

goods

the

same

reason

price-fixing discourages or makes
impossible the production of these
goods by destroying the profit in
producing them. It systematically
brings
about
shortages.
These
shortages are then
reflected in
black market prices higher than
free
market
prices would ever
have

been.

Price-fixing

reduces

the

supply of
body can get.

to continue to increase

the money

supply.
Now

this is what

is happening

today throughout most of Europe,
in

large

and in
is

parts of

Latin America,

Soviet Russia.

known

It is what

economists

among

as

repressed inflation.

ceed

their

revenues,

they

and

taking place.
These pro¬
hibitions, which begin with price
controls, go on to exchange con¬
trols.
They lead to import quotas,
to bilateral trade agreements, to
from

sec¬

"A

rationing for consumers, to allo¬
cations for producers, to wage

caused

the

bank credit."
word

inflation

It is be¬
is

now

fixing, to labor control, to a re¬
quirement for government licenses
for almost every activity.

that all sorts of

ambiguities, mis¬
understandings
and
confusions
develop.
Because when the rise
in commodity prices is regarded
as

being itself the inflation, people

lose

sight

of

the

fact that

In

short,

they

lead to

mented and totalitarian

a

regi¬

economy.

Corporate Profits
-

In

this country

the belief that

it is present corporate profits

are

ex¬

could

pairs of socks, but only 83 pairs,
Suppose now that he sold these in
turn

at

$1.75

pair,

a

giving him

another apparent profit of $20 and

make

the
the

wholesale

to

fur¬

equity funds

Advisers

the other side.

on

further on we find
the
Council admitting that the
corporations had to provide 65%
pages

of

their

of

their

capital funds in 1948 out

earnings, compared

own

with

53%

Even

more

in

the

previous years.
significant than this is
the fact that when corporations
had to go to the market for new
security issues, they were able to
raise

The

than

less

funds

one-fifth

of

their

through the sale of
four-fifths

other

stock.

had

to

raised by the sale of bonds.

be

Put¬

ting the matter another way, the
corporations in 1948 were able to
raise only 19% of their outside

capital funds out of equity or risk
capital, compared with the al¬
ready low 30% of 1947.
This certainly does not look like
a

situation

in

which

incen¬

the

for

capital expansion
excessive.
If profits
were

cessive

would

ex¬

they
to

ex¬

community
like to
Yet in flat con¬

than the

faster

government would

it expand.

tradiction

to

maintains

this

Mr.

Truman

the

steel

industry

that

industries

other

needs

are

purpose

be causing industry

the

or

this

for

the

Col¬

usually used in this second sense

few

today.

undue expansion in paper

money or
cause

rise

gives

A

ernment may even

cure

a

now

Economic

nearly every country in the world

conse¬

American

of'

and

a

$1.50

an¬

expansion."

panding

prevent or conceal the unpopular
consequences
of this action by
forbidding
those
consequences

the

and

nopoly of propaganda, this crude

is, of course, never

same

were

his

needed

piece of nonsense is seriously be¬
lieved and put into legal effect in

price level."
This is en¬
tirely correct.
In other words,
the rise of prices is not itself in¬

in

levels

does offer is all

have

print more money to pay the dif¬
ference.
And then they try to

"Inflation

the

Council

governments, and their
power of
propaganda,
sometimes amounting to a mo¬
of

enormous

Price fixing

Council,

in

No real proof is offered to sup¬
port this remarkable conclusion.
And, in fact, it cannot be sup¬
ported.
Such
evidence
as
the

pand

terests

the

report,

incentives

saying that they must be lower.
And
because
of the vested in¬

credit or both." It adds:
always produces a rise

money or

of

tives

the

The govern¬
Webster's
Collegiate
Dictionary ments, in other words,- increase
defines inflation as: "Dispropor¬ inflation
by having unbalanced
tionate and relatively sharp and
budgets.
Their expenditures ex¬
sudden increase in the

economic

pretense that it is a
remedy for inflation.
If prices
are too high, the supposed cure is
simple: you simply pass a law

or

avoid

would

ing, higher taxation, and national¬

goods that every¬
And by diverting
the re¬ attention away from the real cause
College of inflation it allows governments

cently

ond

We

Federal Reserve

money

necessary

what

the

of

expansion

prices."

Now in
sage

estimates

Board), the only possible way in
which this
increased supply of

inflation, is expressed through
main measures—price-fix¬

three

fixing

that

to\ replace

came

quality of
selling wholesale at
pair. Then with his $125 he
only buy, not a hundred

socks

leaving him

both

But

for industrial

;*

time, for example, be
producing industrial goods at a
rate of 94% higher than in 1935-

Price

corrections

and

when he

suppose

his stock that the

for replacement of $145.

nish

same

under

Economic

President Truman

cess

high prices at all.
The so-called
shortage of commodities is merely
one of the many illusions brought

of

of

the

astonishing
statement
that
bookkeeping profit of 5 cents on
every dollar of sales made by cor¬
porate industry in 1948 is "in ex¬

.

r\

Council

of

nificance.

nual

cannot absolve gov¬
39, as the Federal Reserve statis¬
omy.
Unbalance sets in, with un¬ ernments from the responsibility
ticians say we are, and still talk
expected shortages and surpluses. for the further inflation that has
about high prices being brought
And above all, a mounting public taken place since the war ended.
about by shortages.
hostility turns against business
As all of you know, in a society
itself.
* like ours demand bank deposits
Consequences of Inflation
Lenin,- in fact, the father of subject to check are the equiva¬
The monetary inflation, with its
in
purchasing consequences of high prices and
present-day communism, is said lent of 'money
to have
declared that the best power.
They are therefore al¬ seemingly high profits, leads to a
way
to destroy the capitalistic ways included by economists in popular hostility against business,
system was to debauch the cur¬ counting the money supply. If we against
producers
and
sellers,
want to find what has happened
rency. Commenting on this state¬
which governments are only too
ment 30 years ago, John Maynard in this country we need merely
happy to encourage and exploit.
Keynes, in his famous book, "The compare two illuminating figures. For
one
thing,
this
hostility
Economic
Consequences
of the The first is the figure of total ad¬
against business diverts popular
Peace," wrote
this remarkable justed demand deposits and cur¬ attention away from the govern¬
rency outside
of banks in June ments' own primary responsibility
passage:
v.This amounted to $33,"Lenin
was
certainly
right. of 1939.
for
the
inflation.
Government
The process engages all the hid¬ 400,000,000. The second figure is action against business, as a result
war,

review

radically change its apparent sig¬
and

exception of very few com¬
modities, be called a cause of

by inflation. We cannot at

for

corporations.

as I shall show in a mo¬
ment, is subject to essential de¬

ductions

the

the

annual

last

demands

on

figure,

merely by the increase in
money supply, but by shortages of
specific goods. But, contrary to pop¬
ular opinion, shortages of goods are
today in most parts of the world
only a secondary and subsidiary
cause of high prices.
And in the
United States they cannot, with

about

to

Advisers estimates corporate
profits in 1948 at $21 billion. This

It may be caused

cause.

led

President's

not

self.

has

higher taxes

The

that has caused the rise of

be

the

upon

the

Thursday, February 10, 1949

fast

as

as

not

are

the

ex¬

country's

require, and that the

gov¬

be forced to do

expansion
itself.
In
other
President has been led

words the

by
that

into

advice

bad

saying

incentives of

the

expand

too

are

both

business to

great,

that

and

business is not expanding enough.

what

Now,

are

corrections

and

the

from

make

deductions

the
that

must

we

apparently

un¬

with

when he
he

he

to

could

at

same

pair. With his
only buy 72

a

now

pairs of socks.

capital
Suppose

restock

these

found

sock? selling at $2
$145

cash

a

came

It is obvious that

this process could go on,

in a hy¬
per-inflation, to the point where
the haberdasher was making a sub¬
stantial dollar profit every time he
turned

buy

the

over

which

he

was

only

one

socks

in

but

finally able to repair of socks and

then go out of business.

this illustration is

Now

greatly
over-simplified, but it is not fan¬
tastic.

This is what has actually

again in hy¬
dur¬
ing the inflation that culminated
happened time and

per-inflations. In

in

Germany,

the

1924,

mark went to one
previous value.
Firms that were making a paper

trillionth

of

its

profit in marks of millions of per
cent
on
their
invested
capital

constantly being forced out

were

And in

of business.

our compara¬

moderate inflation many
American
corporations
today,
while
ostensibly making record
tively

profits, are finding themselves in¬
creasingly pinched for working
capital.
The

sort of deduction ap¬

same

plies in the case of depreciation.
Under the tax laws corporations
depreciation, only on
original invest¬
when they have de¬

deduct

can

the basis of their

But

ment.

ducted and put

aside in a reserve
write off a plant
$10,000,000 to build,
they find, when they come to
replace the plant, that the same
size and quality of plant now costs
them
$20,000,000. Where is the

$10,000,000

to

that cost them

other

to come from?
public and the

$10,000,000

And how

the

can

be made to see to
present
corporate
illusory? How can they

government
what

extent

profits

are

be

to

see

the

extent

to

these

ai'e

insufficient

to

made

which

additions

and

ment
of

crease

the

the
and

worker

tools

the

to

to in¬
output of American
real
wages
of
the

production

labor,

replace¬

continuous

the

provide

necessary

all

of

welfare

the

of us?

precedented profits of corporations

of

counting

write-ups

as

a

dollar
profit.
H.

Sumner

fessor

has

inventory
As Pro¬

Slichter

of

clearly put the
corporations still
insist on counting a rise in the
cost
of replacing inventories
as

Harvard

so

"Most

matter:

Fortunately the Depart¬

profits."

its calcula¬

ment of Commerce in

profits has con¬
sistently in recent years made a

Executives
It is here

have

tory write-up.
traditional

Yet

accounting

the function

government
first

The

pairs of socks for $100,
finds that their whole¬

has gone to $125, he
has made $25, hasn't he?
But the
answer
comes when
he starts to
sale

price

replace his stock, and finds }b?t
he can buy no more socks with
the $125 than he could with his

original $100.
In

agine a.situation in which, with
high book profits in terms
oC

the

dollars,
tailer

of

Suppose
bought

manufacturer

cannot

volume

a

replace

inventories

our

little

the
as

or

re¬

same

before.

haberdasher

hundred pairs of socks

pair and sold them at $1.25
a-pair.'His $100 Would then be¬
come
$125, leaving an apparent
profit, not counting the expense
of doing business, of $25.
But
at $1 a

important

most

I

not have seen it,
direct "your at¬
the annual report of the

who

United
for

may

like

should

to

States

Steel

Corporation

and particularly to the
testimony last December of Enders
1947,

M. Voorhees. Chairman of the fi¬
committee of that corpora¬

nance

tion,

sub-committee

sional
In

Joint

the

before

Congres¬
profits.

on

exhibiting the corporation's in¬
figures

come

sented

with

table

a

first nine
Voorhees pre¬

the

for

months of 1948, Mr.

deduction

a

' for what he called "wear and

•

it is very easy to im¬

fact,

and

place for this to be done is in
the presentation of the earnings
statements of the corporations and
of their annual reports. For those

tention to

then

general

the

to

and

public.

at these matters, persist in
counting increased cost of inven¬
tories ds profits If the owner of a
small haberdashery store buys a
and

cus¬

to the

companies, to the

workers of their

of you

hundred

the

to

of their companies,

tomers

methods, and the fixed habits we
have acquired in our way of look¬
ing

rela¬

country

making the

of

clear

situation

real

this

of

vital function to perform.

a

is

It

the public

that

executives

tions

tion of corporate

deduction for this kind of inven¬

Relations

Duties of Public

One of them comes from

today?

the traditional but doubtful process

haustion
a

more

vivid

name

tion. This deduction for

into two different
was

original

cost."

wear

was

sums.

deduction

a

is

for deprecia¬

exhaustion of facilities

sum

ex¬

facilities"— which

of

This

and

divided

The first

"based

on

deduction

amounted to $66,000 000. But under

this

was

"added to
This
to

a

second

about

further

cover

deduction

replacement cost."

deduction

$40,000,000.

amounted

In

other

words, instead of merely deduct-

Volume

THE

Number 4776

169

COMMERCIAL

&

FINANCIAL

CHRONICLE

(681)
price policy or production policy.;' government policy changes. I have
For business is powerless to fight already pointed out that where
inflation. Only government, which the industrial index of production
has been responsible for the in-; has gone up 94% since 1939 the
volume of money and check de¬
flation, can fignt it,
posits has gone up more than
It has been fashionable for many
businessmen to say that the an¬ 200%. Hence prices are far higher
swer
to
inflation is production. than in 1939, in spite of amaz¬
That isn't true. Increased produc¬ ingly higher production.

ing $66,000,000 to cover deprecia¬
tion on original cost, the corpora¬
tion deducted a total of $106,000,000
to

the total amount necessary

as

replacement cost for that

cover

period.

'•

.

.•.y

Mr. Voorhees
about
cut

"It

that:

is

simple

very

was

a

fact

worth

the

can

that

tools

of

in

in the end

mean

tools

those tools
all

of

of

of

may

production
production
nothing but
the

or

production.

Yet

vital to the welfare

are

They should be ex¬
tended, or at the very least, they
must be kept intact." He went on
to

us.

point

that:

out

non-recognition

"The

present

part

of

of

computing taxable income

means

that

ment itself is

■J.

So the first thing that the

porations
their
to

must

is

do

made from

to

them

cor¬

such

a

way as to end both their own self-

deception

derstanding
real

public misun¬
how great their

of

earnings

In

the

and

are.

addition to their regular re¬

ports

their

to

stockholders

own

all

corporations ought to make, at
least as regularly, corresponding
reports to their own jobholders.
Some
this.

corporations

An

already
do
model, I think,
Corporation,
publishing such a

excellent

is the Johns-Manville
which has been

jobholders' report since 1937. Its
simplified annual report for 1945,
for example, read as follows:
Million

Total Income
For

all

$86

;

costs

(except those

shown

below)
employees for

To

and

wages

41

out

3

2

to

jobholders, ot
emphasize
how
much the jobholders got as com¬
pared with how much the stock¬
should

holders got.

For in nearly

case

this

will

that

the

total

holders in the

poration
total

every

bring out the fact
stake

of

the

job¬

of the

success

cor¬

is far greater than

stake

holders.

of

even

For

the
stock¬

the

example,

in
the
Johns-Manville report that I have
just cited, the jobholders got 12
times
In

as

the

much

case

as

of

the stockholders.

the

United

States

Steel

Corporation, Mr. Voorhees
pointed out in his testimony last
December that the corporation's
payments to its jobholders were
currently more than 14 times the
dividend payments to its owners.
In

both

their

stockholders

and

reports
their

their

to

reports to

their jobholders corporations
should point out what their net

income is

when stated

as

a

per¬

centage of sales. In 1948, for ex¬
ample, corporations made a profit
of only 5 cents on every dollar
of sales. Such

a figure underlines
price-control
could
reduce prices under present costs
even if profits were entirely abol¬

how

little

ished.

The

results

of

abolishing

profits would be, of course, to
abolish private production. Those
who think that profits are today
too
gers

great

me

of

passen¬

in the back seat who would

suggest
out

remind

of

throwing
the

motor

duce the total

the
in

33,000

sparkplugs

order

to

re¬

weight that the

car

toried

with

Can

Fight

Inflation
And there is

one

further

thing,

1 think, that they should NOT do.

They should not allow their
porations to

assume

cor¬

responsibility

quickly

the

result

that

five

ex¬

war.




to

Manufacturers

of railroad

equip¬

ment, freight and passenger
and

locomotives,

000

cars

large

r consume

quantities of steel.

Production of

per

ly has, suggests that 1949 produc¬
tion will be about the same. These
have

now

on

heavy
materials,

some

greatly in excess of immediate re¬
quirements.
As these inventories
balanced

are

chasing of
for.

'•
the

^

In

out,

reduced

pur¬

material is looked

new

immediately

years

was

ap¬

proximately 7,700,000. When that
point was reached, demand fell,

sales.

The radio

industry similarly has
through a complete cycle.

passed
1941

45

there

approximately
making household

So little investment in

fixed assets and engineering is re¬
quired, that the industry attract¬

ed

host of newcomers after the

a

At the

war.

in

are

the

as

other

90

fighting

are

for

experience

facturers

Further,

price

inevitable.

being

reductions

There

experienced

are

economies

are

for

the

technique

in respect to

the

manufacture of the 16-inch metal

available

for

the

in

consumer

immediately preceding
the war totaled approximately 43 larger quantities, it is our opinion
the price on 12-inch sets will be
million
sets.
Since
the
war,
driven down to about $350; and
through 1948, approximately 50
10-inch
sets
to
approximately
million sets have been manufac¬
$250. Already, the demand for 7tured.
Only two years and oneyears

stimulate

Demand

sales.

increase

No

anticipated
during the cur¬

industry

experienced

factory
not

year

come

that

a

ventories,

has

quirement for

reduced

the

re¬

materials.

raw

*

Automobile
The automobile

attain

that

Industry

industry did

not

rapidly

as

point

as

these other industries. The
version problem was more
in

recon¬
severe

the

automobile factories, and
output was seriously retarded m
1946 by labor difficulties.

Further,

the

manufacturers

cars

wisely decided

of
to

portions

passenger
not in¬

use

of

available

supplies for the * manufacture of
replacement
parts necessary
to
keep pre-war automobiles in op¬
eration.

Dollarwise,

replacement
about

was

the

sale

of

parts
last
year
three
times
that
ir>

,

a

up

demand

became evident,
at first in the
heavy duty models. Even earlier,
the

peak had been passed by the

producers of heavy

electric

very

unsatis¬

Demand did

to expectations, so
inventory of com¬

pleted units has been carried

over

into 1949/" These must be disposed
of before new production is un¬

duty trailers.

Production of passenger cars int
the four years prior to the war
totaled

12,365,000. By the close of

1948, almost

million

10

produced since the

had

beer*

By June

war.

30,

1949, at present rate of
duction, the prewar figure

pro¬

will

have been surpassed. There seemslittle reason to believe that the

pattern

in

this

different

any

industry

from

will

that

be

experi¬

enced by the producers of
refrig¬
erators, washing machines, radios,
etc.
It is, accordingly, our conclu¬

sion

that

production and demand

for automobiles

of

in 1948.

large

in

is

rent year.
The manufacturers

fans

has

bringing out
priced models to

requirements

this

manu¬

electric

now

lower

first
in
A

the

and

the extent that many
are

and

steel

of

gas

is' similar.

declined to

new

time in large scale production.
new

of

companies

the balance.

peak, there were close
tube is enabling manufacturers to
to 200 concerns making radios. To¬
offer sets built around that tube
day, the figure is probably about
at about $450.
As these become
125 companies. Production in the
four

The

a

were

companies

radio sets.

manufacturers

position. J Subsequent curtailment
of demand,
coupled with the ne¬
cessity of working off excess in¬

on

program,

eight

price

every
reached before

was

dropped.

latter ited the interest of newcomers into

The

out¬

immedi¬

years

1941.
Further, a substantial part
Emphasis cur-' of available raw material
was
lower priced
models) utilized for truck production. Tho
at the expense of deluxe models.
1938-1941
production
of
trucks
Higher priced automatic washers had been 3
million units. By the
are not
selling well. The industry middle of
1948, 3% million unitn
as a whole is in a
good financial had been produced since the close
position, since the heavy invest¬ of the war. A decline
in

prices

rently is

ing sets has fallen off, manufac¬
ment in fixed assets
are seeking to
necessary to
replace as
much of that business as possible produce washing machines inhib¬
television

this point

case

substantial
four

turers
with

four

became
satisfied,
declines became evident.
In

industry present¬

and the first-half of 1948

Production in 1948

for

ately preceding the
war, pent-up

in 1948 averaged 10,month.
The backlog of

television sets.

are ap¬

the

120% of the

put

cars

proximately 96 companies making

that today there

so

foregoing

29

the industries
expected it, find¬
ing them in a heavily inventoried

'

;

Other Industries

availability of these tubes, where¬ ranges

ering

the

about

in

our
can

are

industry

consid¬

now,

whole,
Further, it is
as

balance.

a

decided conviction that prices
and will be reduced, partly

because of the approach of normal
competitive conditions, and partly
because easing in the
supply of
raw

dertaken.

materials

will

eliminate

ex¬

Raw material require¬
pensive practices which the in¬
consequently should be less
dustry has been forced to pursue.
this
year than last.
inch sets at current prices has fall¬
During the past two years, some
half were required to make up the
The refrigerator manufacturing
en
off, so that substantial inven¬
steel mills have been able to pro¬
production loss during the war
tories of this model are accumu¬ industry reached its peak in the duce more
ingots than they could
years.
When that time arrived, in
Fall of 1948.
Production is now
convert to finished steel products
the Spring of 1948, demand fell lating.
declining, and prices are soften¬ in their own
facilities.
Manufac¬
off, and prices dropped. This in¬
ing.
Television Production
turers of automobiles have pur¬
dustry, also, was unprepared for
Production of vacuum cleaners
chased these ingots, have shippedthe falling off in demand. Inven¬
It
is
difficult to predict how in the four
years prior to the war
them to other mills where they
tories were heavy in relation to many television receivers will be
totaled 5 million units. In 1946 and
ment

working capital and large scale made in 1949, because it is im¬ 1947, 6 million units were
pro¬
dumping was necessary to attain possible to assess what percentage duced.
When
that
point
was
liquidity. Inventory losses were so of the picture tube production this
reached, it was obvious demand
substantial that in 1948 approxi¬ year will have to be diverted for
was less than supplies. 1948 pro¬
mately 30 companies failed, with replacement. It is probably fairly duction
declined
about
300,000
liabilities
of
approximately $25 accurate, however, to state that units as compared with 1947 and a
million. It is worthy of note that in the vicinity of 2Vz million tele¬
further reduction of perhaps half a

when demand for radio

year ago

sets declined and the manufactur¬
ers of
these instruments, accord¬

ingly, reduced
chase

orders

turers

of

cancelled

or

with

the

components,

pur¬

manufac¬

prices

on

the latter items softened immedi¬

vision receivers will be made dur¬

a-million

ing the current

1949.

Add to this,
the continuing demand for auto¬
mobile radios, the increased pro¬
curement

by

the

year.

electronic

of

government,

apparatus
and the de¬

mand for radio and television

re¬

ately. The manufacturers of radios placement parts (there are 75 mil¬
who were burdened with heavy lion radio sets now in use which
inventories, were not, however, must be kept repaired). It is ob¬
able to take advantage of these vious the industry will in 1949
lowered component prices imme¬ consume substantial amounts of
Nineteen

try,

lead and steel. It is not
conceivable, however, that the de¬
copper,

forty-nine

will

be

a

confusing year for this indus¬
because of the influence of

tlevision.

It

first thought
the higher requirements for fixed
was

at

mand will exceed that for 1948.

One

brief word

concerning

the

should

be

wholesalers

radio replacement parts.

said

of

Many of

assets, particularly expensive test
equipment, and the more com¬
plex engineering problem, would

the

make it difficult for

will have to add additional inven¬

ber of

a

large

num¬

companies to undertake the

production of these
However.

Radio

new

receivers.

Corporation

of

America freely made available its

new

12 months.

prior to the war, there were pro¬
duced 6,000,000 washing machines.
Total production in 1946 and 1947

others,

or

design

some

everlastingly

favorable position in respect to the

Radio Industry

"fight

by

industry

was

for inflation. They should not say
that their' company is going to

inflation"

in this industry
during the coming

for

the field.
Ironers were produced
accordingly, has expand¬
ceed that in 1948. The significant
ed so rapidly that an acute short¬ at the rate of 70,000 a month in
fact to be observed is that in one
1947.
Production has now leveled
age of cathode ray
(the picture
year this industry produced all of
off
to
approximately 35,000
a
tube), has developed. The largest
the planes that were necessary to
producers
of
these
tubes
also month; These two industries sure¬
satisfy the demand which had ac¬ make their own brand of tele¬ ly will utilize less steel in 1949
cumulated during the four years
vision receiver.
As a result, six than heretofore.

very

Government

was

the

suggest that 1949 demand will

These, then, are some of the
things that public relations execu¬

Only

It

turned

companies quickly entered bank¬
ruptcy or some other form of re¬
organization. There is nothing to

diately.

be put in their proper light.

are looked

orders which the

na¬

the

industry, additional financial demand

embarrassments

lic relations executives of the

delayed
de¬
approximately 900,000 units,
mand, although financially the in¬ compared with 150,000 in 1947.
It
dustry was not prepared for that should be observed that based on
discovery.
1947
production was the selling price of a television re¬
15,000 planes, wtih 1948 showing ceiver
and
the
material
used
a
further decline to 8,000 planes. therein, one unit is
equivalent to
Such falling off in demand found
perhaps five average radio sets.
the industry heavily over-inven¬
As the demand for radio receiv¬

has to carry.

tives will have to urge if corpora¬
tion profits under inflation are to

industry

units.

satisfied

year

In

report

the

discovered that production in one

3M>

Leaving in the business
The

alone

36Vz

To stockholders in dividends

the

prise system. So it is this that it is
the function and duty of the pub¬

(Continued from page 8)
1946

of

salaries

—.*

To government for taxes

course,

enter¬

free

our

Consuming Industries
And Steel Consumption

restate

in

of

components, and the excessively
large number of manufacturers in

freight

point out.

Metal

earnings and the deductions

be

answer

From

necessary

discussion
investment in television parts.
it
will
be
observed that when
Because of the downward trend
postwar production in
these indus¬
of prices, the
shortages of some tries approached

stop

threatens

with

a

one

to

supply.* And it is this
the stability and

money

that

continuance

tion's

tools of production."

s

the

is

additional

inventories

participating in and
the erosion of the

forcing,

even

nation

to
adding to
the money supply. It is govern¬
mental policy that is adding to

tional goods that

industry is faced
hopelessly losing race until

only

•

It

the

manufacturers

Govern¬

Federal

is

There

inflation.

that

cost in

the

of

a
particular commodity
relatively reduce the price
of that commodity, but increased
production tends to
bring into
existence ; its
own
additional
monetary purchasing power. And
so
it seldom leads to a general
decline in prices. Moreover it is
so much easier to print additional
money than it is to produce addi¬

the

of

hidden and serious erosion
nation's

tion

corporate

costs

consumed

of

are

apologetic
He pointed
very real and

in

understatement

that

not

practice.

thijs

finance

data

and

specifications to

and

components in television sets
in

radio

changeable.
tory

of

sets

are

not

inter¬

The wholesaler, thus,

television

replacement

parts, requiring a sizable invest¬
ment. Many of the wholesalers al¬

units is

Prices

anticipated for

are

substantially

lower.

'

A comparable, situation exists in

respect to oil burners.
Four-year
production prior to the war was
900,000
units.
1946-1947
pro¬
duction

was

1,600,000

Before

the

excess

production

latter

year

had

unit

was

s.

over,

occurred.

In

part, perhaps, because of the
shortage of oil a year
ago, 1948 production declined to
450,000 units.
Thus again only
two-and-one-half years' produc¬
threatened

tion

was

1949

production

required

to

catch

up.

well show
substantial improvement because
of increasing supplies of oil. but
any betterment probably would be
at the
expense
of gas or coalfired units, so that the heating in¬
dustry's requirements for steel as
a whole is not expected to be any
greater in 1949.
Comparable situations are found
may

ready are utilizing their working
capital to the full exent. It will in the farm equipment, machinery,
be interesting to observe how they and machine tool industries.

have been converted into sheets
bars.

Extra

involved.

obviously areFurther,
frequently

material has been used of

grade than

or

costs

a

better-

in the par¬
ticular parts, because it was avail¬
able.

necessary

Again, sheet and strip steel

has been purchased in wrong

entailing
amount

have

than

more

of scrap.

been

of these

sizes,

average

Finally, there

interruptions

duction because of
As all

an

to

pro¬

failing supplies.

circumstances

eliminated, savings in
experienced.

costs

are

will

be

And so we revert to the original
question, should additional steel
making facilities be constructed
at
present substantially beyond
those already planned by the in¬
dustry? In our opinion, the answer
is in the negative.
Barring labor

difficulties, there
million

more

tons

can
of

be

5

steel

to

6-

pro¬

duced this year than last. In none

of

the

industries

considered

this

evening is there foreseen any sub¬

stantially higher demand for steel
during
in

the

several

next

12

will be lowered, v

Finally,
the

months,

and

the requirement surely

we

are

possibility for
(Continued

<

:

..

optimistic
some

on

as

■

to

reduction

page

30)

30

(682)

Metal

THE

The State of Trade and
(Continued from prge 5)
that

(Continued from page 29)
in the price of steel.
Scrap prices—
scrap
of the raw material
of which steel is made—last
yeaar

I

reluctant, how¬

to undertake

ever,

exact

an

pre¬

diction of unit production in these
industries throughout the next 12

months, for to do so would be to
imply a degree of inflexibility, of
preordination, incompatible with
the belief that

business, under

philosophy, can, through its
ingenuity, create additional
mand for its

output.

1949

be

can

good year if industry will take
advantage of the easing raw ma¬

terial

supplies to eliminate waste¬

ful and

costly practices that have

been forced upon it.

It

can

be

a

good year if labor will acknowl¬

edge
be

that

earnings

reinvested

tories and
be

and

have

had

to

on

to

con¬

sumers without
waiting for com¬
petitors to force prices lower at
inconvenient times. It can be an

excellent

profess

if

year

that

really is

all

those

who

an

Milwaukee Bond Club
To Hold Election

ELECTRIC
IN

Monday evening,
Rolland A. Barnum,
of Merrill Lynch, Pierce, Fenner
& Beane, and his arrangement
committee are putting forth every
make

this

,

FROM PREVIOUS WEEK

ENDED

WEEK DUE

IN LATEST

Production

past

of

and

cars

fell

week

to

in the United

trucks

estimated

an

States

103,910

units

The

Board

of

to

Automotive Reports."

major

for the

reason

drop was Chrysler Corp.'s changeover
company's total output by 4,000 units,

to 1949 models which cut this

the agency said.

Output in the similar period

.

in the like week of

week's

Last

year

a

ago

1941, 127,675 units.
consisted of 73,144

output

built in the United States and

1,775

cars

82,717 units and

was

and

cars

26,761

trucks

and 2,230 trucks in Canada.

BUSINESS FAILURES AT NEW HIGH

from

110

involving liabilities of

last

week

and

$5,000

remained slightly

more

or

compared with, 84

above the 13 reported last

year

a

declined

failures with liabilities under $5,000

to

rose

ap¬

from

41

Loewi

&

Co.;

H.

Marshall, The MarCo;;; Fred. G. Morton, The
Milwaukee Co,; Oliver A. Julien,
Thomson & McKinnon; Robert W.
Haack, Robert W. Baird & Co.

low level in other

President:

Merrill

Rolland

A.

Lynch, Pierce,

Beane.

the all-time

Board

of

The

Governors:

&

Co.;

Marshall

high of $7.36 set

index

O.

B.

Otto J. Koch, Jr.,
F. A. Newton,

Co.;

Loewi & Co.; Carl P. Wilson, Rob¬
ert W. Baird & Co.

on

represents the

general

was

July 13, 1948.

sum

total

moderate

decline

in

the

general level

^

<

Interest

of

Carstairs
Jack

&

Co. Feb.

1.

and Alan M.

Stroock, trustees

un¬

der Trust Indenture dated Jan. 31,

1947, limited partner, retired from

Dreyfus & Co. Dec. 31, 1948.

Henry P. Vaux withdrew from
limited

partnership

in

Parsons & Co. Jan. 31.




Graham,

purchased

ing in wheat and
tion

and

week

selling

corn

which

food

at

volume

a

level

corresponding week

a

demand

meats

for smoked

corn

business

carried

prices

well

below

those

of

year ago.

frozen citrus juices continued to be high.
Clearance sales of furniture and household
be

widespread, but

not

favorable

as

With

was

of

corn

slow.

less active

was

Cash wheat

was

and

wajs
Re-.

duced-price floor coverings, particularly broadloom carpets, were sold
a
considerable quantity.
The interest in major appliances con¬
tinued to be limited, though heating equipment was purchased in
an
increased volume.
The retail volume of hardy/are rose
slightly
with demand for auto accessories showing a noticeable* increase.
Retail volume for the country in the period ended on Wednes¬
day of last week' was estimated to be from 1% below, to 3% above
that of

a

year ago.

the corresponding levels of

Regional estimates varied from
year

by the following percentages:

ago

5, East

1

up

to

up

,

•

to

4,

up

South

Northwest

4,

down

down

New England

1

to

to

3

up

1,

up

up

1 to

3, Midwest

un-

Southwest

and

y
,

Pacific Coast down 4 to unchanged.

increased fractionally with
appreciable change from that
of the similar week last year.
The number of buyers attending many
wholesale markets dropped moderately during the week, but sub¬
stantially surpassed that Of the comparable week a year ago.
'
Department store sales on a country-wide basis, as taken from
the Federal Reserve Board's index for the week ended Jan. 29, 1949,
dollar

showed

volume

decrease

a

compared with

not

showing

of 7%

from

any

the like period of last year.

This

in the preceding week.
For the
29, 1949, sales increased by 2% and for the
* -

increase of 2%

an

four weeks ended Jan.

to date by 5%.

further recession

a

According to

the

Federal

Reserve Board's index, department
City for the weekly period to Jan. 29, 1949,
by 8% from the same period last year.
In the preceding
week an increase of 1% was registered over the similar week of 1947.
For the four weeks ended Jan. 29, 1949, a decrease of 1% was rer.

store sales in New York
declined

over

that

of

last

year

for

and

the

date

to

year

volume

increased by 4%.

Spottiswoode,
Ltd.,
15
Bedford
Street, Strand, W. C. 2, London,
England—cloth—25 shillings.
:

Renegotiations of War Profits^Richards

C.

Economic

and

University
111.—paper.

domestic de¬

manufacturer
the

week

interest

still

Osborn—Bureau

of

qf

Business Research,

Illinois,

Urbana,
."

lacking,

cocoa

dipped

to

new

at mid-week but staged a brisk recovery
result of increased demand in the spot
firmer trend in producing countries. Butter

season
as

the

market and reports of a

firmer at the week-end, although prices were easy most of the
week due to continued buyer resistance to higher
priced

developed

steers

in

a

steadier tone in the cash market.

Prices for hog?

the

Chicago livestock market were erratic.
Average
beef steer quotations reached a new low since
May, 1947, early in
the period.
Hog prices recovered at the close to finish about un¬
changed from a week ago.
Sheep and lamb prices were higher for
the week, reflecting smaller receipts.
Cotton

following

a

prices

were

steady

and

moved

in

a

narrow

range

moderate decline earlier in the week.

Trading in

spot

markets

was

Newburger, Loeb Open
Graphic Stocks1924-1935—With

monthly
highs
and
lows
and
yearly
earnings^ and - dividends
and 744 charts covering virtually

active, with volume

stock

every

York

was

and

to

continued

in

inactive and lower.

continued

low ground for the

Lard

wares

many merchants reported that the response
in recent weeks due to inclement weather.

as

a

spotty with prices slightly easier; volume
of bookings was small although somewhat above the low level of
the preceding week.

in

to that

close

exceeding that "■

ago.

Government buying

later

demand for both

The

slightly.

week. Trad¬
increased rather sharply due to liquida¬

offerings.

Dreyfus, Jr., John Behrens

rose

All grains showed further weakness during the

.

William G.

the late

Baker,
Jr., limited partner, in
Baker, Watts & Co., ceased Jan. 27.
J.
Lewis
Henry retired from

eagerly sought.

was

prices in the past week. The daily wholesale commodity price index,
compiled by Dun & Bradstreet, Inc., dropped to 261.72 on Feb. 1,
the lowest since early in July, 1947.
This compared with 264.42 a
week previous and with 299.77 on the like date a year ago.

flour

.

umbrellas

of

Weekly Firm Changes

.

weeks.

and pork rose slightly, but beef
dipped fractionally in popularity.
Supplies of fresh produce were
scanty in scattered areas. Consumers bought more canned and frozen
vegetables than in the previous week.
The interest in canned and

corded

of the price per pound of

A depressing factor was the Department of Agriculture report show¬
ing farm reserves of wheat as of Jan. 1 at record levels.
Domestic

changes:

in recent

slightly-during the;,
but consumers did

the past week from the level of the comparable period a year ago.

New York Stock Exchange

has announced the following firm

as

areas

many

use.

further

a

mand for cash

The New York Stock Exchange

favorably

in

COMMODITY PRICE INDEX EASES SLIGHTLY IN LATEST WEEK
There

Adams, Halsey, Stuart & Co., Inc.;
Fred D. Jenkins, C. W. Brew &
Co.; William A. Johnson, Mason,
Moran

The

■

lach, Charles Gerlach & Co.

and

The

year

Moving, downward for the sixth successive week, the wholesale
price index, compiled by Dun & Dradstreet, Inc., fell 3 cents
to $5.88 as of Feb. 1, a new low since Oct. 8, 1946, when it stood
at $5.40.
The current figure is 17.6% below the $7.14 recorded on
the like date a year ago, and represents a decline of 20.1% from

31 foods in

Vice-President: Charles W. Ger-

areas.

food

Barnum,

Fenner &

declined

apparel

continued

Retail trade here in New York suffered

The Nominating Committee re¬

ports the following nominees:

in

interest

as

Wholesale order volume in the week

in

and

a

Chairman,

rubbers

total

six years.

over

to Dun .&

Shoppers' response to early Spring apparel offerings was gen¬
erally slight. Wet weather wearing apparel such as raincoats, boots,

.v

years.

FOOD PRICE INDEX FALLS TO NEW LOW SINCE OCT. 8, 1946

Shall

comparable week last:according

Promotions

respond

changed

Small

ago.

to 18 from 26, but

pointed the following Nominating
Committee to name a ticket for

William

of the

Shoppers'
not

127

Manufacturing casualties increased to 46 from 31, accounting for
a major part of the week's rise.
In retail trade failures declined to
63 from,71 but exceeded the 42 of a year ago.
Fluctuations in the
other groups were slight.

39

Governors

that

week.

up

Failures

YEAR AGO'

WEEK A

Inc., in its current review of trade.
Those consumers
by clogged and ice-glazed roads were attracted to clear-;,
sales in large numbers..•
') r

ance

a

the coming year: Lester B. McEl-

hiney,

above

Canada

and

compared

116,471 (revised) units in the week preceding, according to "Ward's
A

AT HIGH

SUSTAINED

TRADE

COMPARABLE

Consumers

Casualties in the Middle Atlantic States dipped to
New England to 18 from 20.
Slight increases
prevailed in the North Central regions, while failures continued at

Milwaukee Bond Club.

OF

of the previous week, with dollar volume slightly

The Pacific States reported 44 failures, their highest number in

of

WHOLESALE

As heavy snow and severely cold weather prevailed in many
parts of the nation, shoppers bought slightly less than; in the pre¬
vious week.
Total retail dollar volume,- however, rose fractionally

of the

the

20

>

TO

the

the

-LEVEL
•

MODEL CHANGEOVERS AT CHRYSLER

outstanding mid-winter parties of

one

AND

men's and women's shoes

for

Jan.

not hindered

FEB. 5

OUTPUT RECEDES

.

Bradstreet,

OUTPUT RECORDS A MODERATE DECLINE

WEEK

ended

week

„

RETAIL

power

AUTO

held

to

92.7%

and 1,281,210 tons for the aver¬

prewar year.

OFF 4.3%

:

,

the

in

stock

sharply to 139,441 bales, from 111,429 in the preceding
week, and 123,533 two weeks ago.
:
Trading in the Boston wool market during the past week con¬
tinued generally slow.
Sales of small scattered lots of greasy fine
combing wools were noted, demand for which remained strong., at
firm prices.
Wool prices in foreign primary markets were firm to
higher.
Imports of apparel class wools remained in good volume.
Daily average consumption of apparel class wools in November
was reported
at 1,480,000 clean pounds.
This was a drop of 13.9%;t
from October and represented the smallest daily consumption for any,
month since October, 1940.
*
,

1,860,100 tons a week ago,

and 1,670,900 tons, or

loan

1948

increased

week of 1939.

Feb. 21, 1949.

effort

ago,

year ago

ago.

of the Milwaukee Bond Club
be

month

a

one

the

into

.

distributed by the electric light
industry for the week ended Feb. 5 was estimated at
5,778,476,000 kwh., according to the Edison Electric Institute.
This
represented a decrease of 31,558,000 kwh. below output in the pre¬
ceding week; 366,115,000 kwh. or 6.8% higher than the figure re¬
ported for the week ended Feb. 7, 1948 and 977,297,000 kwh. in
excess of the output reported for the corresponding period two years

MILWAUKEE, WIS.—The an¬
meeting and election of offi¬

will

Entries

from the pre¬

The amount of electrical energy

and

nual
cers

99.3%

domestic consumption

times, reflecting uncertainty over
government's price support policies.

at

and the

The Institute

of operations is down 0.8%

Commercial and industrial failures increased 6.6% to 145, a new
postwar peak, in the week ended Feb. 3, Dun & Bradstreet, Inc.,
reports.
Casualties were considerably more numerous than in the
comparable weeks of 1948 and 1947 when 97 and 65 occurred respec¬
tively.
They remained less than half the total of 318 in the same

beliefs.

own

peared

\

Loadings of revenue freight for the week ended,,Jan. 29, 1949,
totaled 679,255 cars, according to the Association of American Rail¬
roads.
This was a decrease of 30,330 cars, or 4.3% below the pre¬
ceding week and a decrease of 47,090 cars, or 6.5% under the corre¬
sponding week in 1948.
It also represented a decrease of 155,796
cars, or 18.7% below the similar period in 1947.

nize that when

they permit avar¬
ice, indifference, or ineptness to
breed
losses, they are showing
contempt for the sincerity of their

,

having

rate at the start of 1949.

new

week in 1940, highest

age

CARLOADINGS

the

profit motive
incentive will recog¬

companies

Industry
V \

,

than twice as large as in the corresponding week a year
The export trade was featured by continued price-fixing against
of cotton abroad.
Profit-taking and scattered liquidation ap¬

sales

operating rate is equivalent to 1,845,400 tons of

or

of the old capacity

higher inven¬
equipment. It can

cost savings

pass

1,830,600 tons,

in

new

good year if manufacturers
eliminate
inventory losses

a

will

This week's

own

a

of4 steel

steel ingots and castings compared to

our

de¬

rate

.

Thursday, February 10, 1949

more

ago,

vious week.

price of

somewhat

am

operating

reports the schedule

is about 50%

$44 per ton.
Supplies now are increasing. One
substantial quantity recently was
sold at $38 per ton, still far above
the $8 per tpn price which marks
the low point in 1933.

the

preceding week, the

again it is observed that

a

CHRONICLE

94% of the
steel-making capacity of the industry will be 100.1% of capacity
for the week beginning Feb. 7, 1949, as against 100.9% in the "

Consumption

average

FINANCIAL

&

sales

Consuming

Industries and Steel

and

COMMERCIAL

the

on

New

Stock

and, Curb Exchanges
—F.
W.
Stephens,
15
William
Street, New York 5, N. Y.— .$15.

Newburger, Loeb & Co..
bers

of the New York

Ex¬

change and other exchanges,
nounce
the
opening of ja

new

branch

47th

office

York

State

and Labor

Industrial

School, of

Relations, Cornell Uni¬

versity, Ithaca, N. Y.—paper.

aspects

Money

historical
—

Paul

its

in

and

Einzig

ethno¬

economic

—

Eyre

&

41

West

J.

DeMartini, formerly,

partner of James M. Leopold &

Co.,

is the

office,

and

Manager
Morris

of
B.

this

new

Cohen

is

Assistant Manager.
'•

———i

Now

i ■ r

Turley & Tegtmeyer

CHICAGO, ILL.—The firm name
Barnes, Turley & Tegtmeyer,
South
La
Salle
Street, has
been
changed
to
Turley
&
Tegtmeyer.
r
.
'
>;

of

Primitive

at

an¬

Street, New York City.
George

Selected Readir.gs—John 3\L Brophy and I. Bradford Shaw—New

mem¬

Stock

a

Industrial Training—A Guide to

logical,
of reported

listed

.

Branch Under DeMartini;

120

Volume

169

4776

Number

COMMERCIAL

THE

&

FINANCIAL

CHRONICLE

to store

ers

Government's

Obligations to Business

lines.

the

sissippi River system; in 1935 this

Modern equipment is being
designed and built so as to pro¬
vide the fastest'* possible service

volume had increased to 63 million

for the movement of

difficult problems.

tons;

carload, freight,

(Continued from page 10)
died

by

and

million
tion

in

1848

the

on

it

Mis¬

reached

143

tons.

Barge transporta¬
developed into a large

has

and

carriers

all

flourishing industry, handling
times

many

packetboat

tne

tonnage

fleets

in

the

of

their

most

prosperous
days.
Oil from the
Soutn and West to the North and
East
is
now
the
predominant

Millions of tons of coal

cargo.
carried

from

Pennsylvania,

are

West

Virginia and Illinois to industrial
centers throughout the River
Sys¬
tem.

Grain

from
the
farming
shipped to mills and ele¬

is

areas

vators

and

export;

New

to

steel

from

Orleans

the

for

mills

of

Pittsburgh, Chicago and St. Louis
moves

in

•needs

of

the

all

directions to fill the

our

growing economy;
of
Louisiana
and

sulphur

Texas

moves

river

up

in

ever-

increasing

tonnages;
sand
and
being carried longer
longer distances to feed the

gravel
and

are

nation's

concrete

dozens

of

other

mixers;

and

commodities—

such

as scrap iron,
bauxite, sugar
tinplate—are being shipped
by river barge in increasing quan¬

and

tities.

To

take

advantage of this
rapid development of waterborne
freight, more and more industries
are
locating
their
plants
near
navigable water.

package- and

well

as

only problem facing the De¬

partment

of

tunately, it is only

many

Responsibility of Commerce

modernize

The. Department

is

responsible

the

for

Commerce

administering

of voluntary indus¬
try cooperation authorized by Con¬

the

Line

gress

and

I

to

operate

shall

at

profit,

a

do

everything in my
earn a profit.
I
reel confident that with good man¬
agement and with the cooperation
to make it

power

businessmen and

oi

ment
not

local govern¬

agencies the Barge Line will

only

program

for the purpose of allocating
scarce goods and materials which

basically affect industrial produc¬
tion, the cost of living, our na¬
tional

the

Office

tion

of

merce

the

As

area.

becomes

a

soon

profitable

a

the Line

as

operation,

the government will get out of

the
barge business and turn the Line

over

as

tees

going

a

business

that

suitable

under

the

ment

to private

concern

with

—

guaran¬

private

Line

manage¬

continue

will

to

inland

serve

shippers and shippers
who waht to use water transpor¬
tation for package and carload
shipments.

in

general
that this

in

been

of

the

our
year

operation,
Coopera¬

Industry

Department

of

Com¬

has concentrated its efforts

soil and pressure

as

voluntary
is not

gram

perfect solution to
the steel problem.
The only solu¬
tion

a

that

to

problem is adequate

production

of

steel

nation's needs.

to

critical

parts

where

it

is

Never in

duction

great

the

economy

most

our

of

of

those

to

badly needed.
history has the pro¬

finished

steel

been

as

during

as

Production

of

1948 reached

increase

the past year.
finished steel in

of

65.7 million

2.6

million

tons,

tons

an

over

We have been assured that

program has been

more

successful

than anyone hoped
year

it would be a
believe it measures

I

ago.

to the four obligations of busi¬

up

ness to

It has under¬

government.

taken a job that could not have
been carried out by business itself
under

competitive enterprise

our

system.

Government has worked

policy of the gov¬
the production in 1949 will be in¬
.concerning the Barge
creased by more than 2 million
up against the four
tons over the
1948 volume.
In
obligations of government to busi¬
spite of this high level of produc¬
ness that I mentioned earlier?

sentatives

of

the

both

steel

repre¬

attempted to go into the steel
business itself or manage the steel
business.
a

It has simply provided
by which the industry can
effectively care for the most

commodities.

As

you

rapid

change and our policy has
necessarily remained flexible so
to meet these

as

I

believe

have

changes.

that

been

lieve

controls

export

administered

best interests of

in

the

I

be¬

America.

they have been administered

far as humanly possible so as
give all exporters a fair chance

as

to

to do business and I

that

in

we

the

Commerce have

possible to
formed

control.

not

the export

on

well aware, the international
political situation is in a state of

policies

Government has

as

are

industry

these industries.

of
ex¬

highly strategic goods—
materials
and
highly

raw

using steel and I
have been gratified by the
spirit
of harmonious team
play that has
characterized our meetings with

industries

of

trols

of

much

as

as

businessmen in¬

problems

our

regard

and

to

our

export

We hope that the day is
when we can re¬

distant

if not

most

move

done

keep

with

far

not

convinced

am

Department

and

permit
to

nessmen

all export con¬

American

seek

busi¬

business

in

all

parts of the world with an abso¬
lute minimum of hindrance from
their own government.

way

more

ernment

critical

Line

the

measure

the

meet

drain

supply

The security of the nation

requires restrictions

But I believe the

and

steel

pro¬

the

short

foreign

fabricated

allocation

quate

of

hous¬

in

31

port controls have also served
a
flexible instrument of

policy.

cordially and closely with

supply

against

commodities

of certain

iron

cast

obtaining agreements from the
steel industry for assuring an ade¬

on

1947.

How does this

has

program

profit but will
add greatly to the economic wealth
show

security, or
During the

Welfare.

economy

manufacturers of

The

of

(683)

dustry is making available 102,505
tons of pig iron each month to

pipe, boilers, and radiators.'

increase the sphere of
governmental enterprise.
I want
to

lion bushels of grain.
.■'•In addition to the agreements I
have mentioned, the pig iron in¬

Department

the

Barge Line do
that the government is

mean

trying

of

one

additional 100 mil¬

an

ing items such

These efforts of the Corporation
not

Unfor¬

bulk

as

cargoes.

to

Commerce.

,sS<

needs of the

conduct

have

Development of Resources

In

economy.

the

of

program

we

All

of

in

you

United States

this

are

part

the

of

interested in the

watched

vigilantly for any activities of the Federal Govern¬
evidences of failure to abide by ment
relating to the development
tion,
the
demand for steel is out¬ the agreements. In one case where of the resources of our
said
that government must
great river
running supply. As a result of the we discovered that a company was basins. For
The Federal Barge Line has not
permit business to -take care of
many years the Fed¬
kept pace with the booming pri¬ most of the country's needs, and voluntary allocation program ap¬ misusing the steel it had received eral Government has been build¬
under
an
allocations
vate barge industry. Why?
plan, we ing
that business should be given the proximately 10% of the current
' ::
dams,
deepening channels,
output* of steel is being directed to withdrew its privileges of further
utmost freedom in meeting these
strengthening embankments and
Private Lines Developed More
correct
shortages in transporta¬ participaton. I hope that the Con¬ carrying on systematic research
needs.
Certainly the government
Rapidly
is not taking a disproportionate tion, housing, the petroleum in¬ gress will extend authority for the to discover the best ways of mak¬
dustry and national defense. This voluntary program and I hope also ing use of the land and
One reason, is that the Barge share of the
the water
barge business. Pri¬
does not mean that 10%
of the that before too long no controls, in these basins.
Line has not developed
techni¬ vate barge lines are now carry¬
At the present
supply
of
steel
is
being
diverted
cally with the same speed as the ing 98% of the freight on the
voluntary or otherwise, will be time the Departments of Com¬
to
these
industries
from
other needed.
private lines. In its first years of Mississippi
merce,
Army, Interior, Agricul¬
River
System.
The
■operation the Line had the best government has no intention of uses. A great part of these needs
The government cannot always ture, and the Federal Power Com¬
would have been met without a
.equipment available; but in more staying in the
rely on voluntary cooperation to mission are working together as
barge business for¬
recent times it has operated with
program of voluntary allocations.
make sure that goods in scarce members
ever.
of
the
Federal
InterI

'

fleet

a

of aging steamboats and
barges when the private

clumsy
lines

introducing diesel

were

gines and streamlined tows.
■many

the

years

preoccupied

Barge

en¬

For

Line

was

with

litigation with
the railroads, with labor difficul¬

ties, and with management prob¬
lems caused by changes in
ad¬
ministration.

This failure to compete effec¬
tively, with the private lines can¬
attributed

be

not

the

to

inef¬

ficiency of government operation.
Barge Line could not com¬
pete on an equal basis with the
private lines because it was pro¬
viding services that the private
lines were dropping in order to
The

increase

their

returns

more

profitable services.

vate

lines

discovered

on

It

I
and

years

all attempts to

with

'in

they could

serve

could

however,

not

would

that

services

ment

line is providing the

that

given

are

undertook-

as

the

by

the govern¬

the

job of developing
nel for

The

tremendous

9-foot chan¬

a

navigation throughout the

so

pass

on

said

that

rules of

the

on

inland

small

that

river

of

ship

can

shippers

The private

believes

Barge

Line
so

that

must
to

as

of the River

use

I

said

that

to

the

wish

to

The

govern¬

the

Federal

provide

this

available

make

to all businessmen in the

the

econ¬

to

and

who

in small lots.

service

com¬

transportation

businessmen

ment

must

fair play

basis and with

same

handicaps.-

area

the

System.

government

must

government and work openly with
business in the development of

the

on

goods

more

economically

profitably.

task

of

do

,

the Inland

what

ought

Water¬

to

businessmen

do;

but

it

think

can

it

explain

fully why it believes certain pol¬

Corporation is to accomplish

icies

are

The Corporation is
undertaking to do this job.
It is
encouraging the development of a

modify those policies when busi¬

series

reason

the
ra

purpose.

of

public

ness

along

fied.

banks of the river to provide
terminal

general

warehousing
tribution
as

terminals

well

for
as

service

collection
its

those

own

of

with

and

ways

barge




necessary,

shows

I

clear

and

and

it

can

sufficient

why they should be modi¬
assure

you

welcome

that I shall al¬

your

criticisms and

of

This

the national

economy.

will

program

expire

on

Feb. 28 unless Congress authorizes
its extension. I think you may be

interested in knowing a few spe¬
cific facts about the agreements
now

in

effect.

following
month

They provide the

amounts

to

of

steel

key industries:

each

construction, con¬
version, and repair of domestic
freight-carrying barges and tow¬
vessels;

(2)
approximately
tons for the construction

250,000
of

freight cars and the repair
railway rolling stock; (3) 40,380

new

of

I
1

of

wish

the

that

Federal

the

administration

Barge Line

were

to maintain mandatory

necessary

controls over

that

in

are

mains

the export of goods

critical

Export

tic

We in the Depart¬

commerce.

ment like to

trade

promote and develop

throughout

commerce.

for

eager to buy our

and

re¬

oil

of

field

and

production equipment;
102,505 tons for the Armed
Forces; (7) 22,265 tons for the re¬
quirements of the U. S. Atomic
(6)

Energy
tons

Commission;

for

the

Committee

(8)

National

nearly

icals,

As

it

will

be

used

by the
railways

Africa

Nevertheless, with

of

inevitable

ships

will

be

way

We

controls,
hard¬

some

by

have

some

tried

it

possible to reduce the
to

an

mini¬

absolute

commodities

became

apparent

as

soon

that

the

for
transporting manganese ore
from South African mines to tide¬

supply

water;

We have constantly modified

I know you will
agree with me

that
uses

these
of

steel.

allocations

expect

are

to

plan for

a

I

vitally
In

addition

haVe

put

necessary

into

to

mentioned

effect

a

the
we

new

voluntary allocation of

8,400 tons of steel products each

ture

of

farm-type

grain

storage

bins. These bins will enable farm¬

of all

was

pleased to say that the Chair¬
of this committee in 1949 is

Mr.

H.

ment

B.

of

McCoy of the

Depart¬

Commerce.

The Federal Government has no
fixed and final points of view re¬

garding the

by which

means

our

river basins should be
developed.

Navigation, flood control, soil
servation,

reclamation,

con¬

and

the

production of hydro-electric power
are closely related to the
expan¬
sion

of

production, markets

employment.

and

Consequently,

development of these

the

resources

is

of

immediate interest to you as
businessmen in this area. The In¬
ter-Agency
Committee
I
have
mentioned

is

working

closely

with representatives of local
gov¬
and
business
and
we

ernment

hope to find solutions that will be

sufficient to take

ernment will be sound
as

they minister

all

ing
the

ing

the

as

as

to

permit

possible to

as

par¬

and

only

the

to

far

so

needs

Government

constant

the
for

power

who

of
can

only by keep¬

touch

with

creative

the

ideas

of

our

government

ideal

of

economy

in

participate

is

active

its

and

benefits.

dedicated

service

to

and

progressive
ices

so

people.

people who furnish the driv¬

Your

you

exporters

in

needs

care

our

the

form sound policies

purchasers here and abroad.

regulations
many

in

We have removed controls

from various
as

export
that

suffered

businessmen.

hardships

Agency River Basin Committee. I
am

man

steel, our chem¬ acceptable to everyone concerned.
aluminum, and other
The policies of the Federal Gov¬

result

a

is

every

South

and

country in the world

every

our

mum.

of

world

our

equally critical goods, we cannot
permit unregulated drains upon
our supplies to occur.

parts; (10) 2,192 tons to be used in
Canada for the manufacture of ore
which

the

liking to place
obstacles in the way of a free flow

1,926

Advisory

for

to

not

Aeronautics; (9)
26,400 tons for the production of
mining machinery and repair

cars

it

The Department of Commerce
is charged by law with fostering
and promoting foreign and domes¬

of

construction

manufacture

for
re¬

Controls

for the construction and repair of
merchant vessels; (5) 16,530 tons

the

demand

commodities

greater than the supply

is

tank

As long

will be necessary for the govern¬
ment to maintain export controls.

it

the

supply.

scarce

world-wide

the

as

certain

C00 tons for the

ing

channeled to the right

are

(1) 25,-

month to be used in the manufac¬

suggestions.

dis¬

operations

other

terest

gupply

indfiStrfeiT; are' as¬ destinations. Ever since the be¬
steady supplies "in xh^ in¬ ginning of the war it has been

(11)
2,570 tons for the
maintenance and repair of anthra¬
policies that affect the welfare of cite mines and preparation facili¬
the economy.
I hope that by lay¬ ties; (12) 31,625 tons for the pro¬
ing before you my thinking about duction of warm air heating equip¬
the Federal Barge Line I
have, in ment, and (13) 9,835 tons for the
part at least/carried out this obli¬ production of all-steel manufac¬
gation. Government cannot always tured houses.

so that all busi¬
not they are
rivers, can ship

more

sured of

Union

The fundamental purpose of

at

however, that the

mean,
critical

pair of oil tankers; (4) 15.415 tons

government

that all businessmen

unfair

does

most

tons for

bring business into the councils of

Mississippi Basin

ways

not pro¬

are

water¬

located

this

ac¬

locations.

private lines, just

the

nessmen, whether or

The

inland

government

omies

government in operating the
Barge Line is to develop the use¬
of the waterways of the

•

with

barge lines have denied the

the

and

these

viding joint rail-barge service to

no

fulness

their

doeS

or

The

shipments, and they
firms

pete

handle

Barge Line,
abandon its

located

not

were

side.

undertake

to

care

cannot

private barge lines
practically abandoned the
carrying of carload and package

economies of water transportation
to the thousands of businessmen
-who

activities

have

so

attempts to establish an all-around
service

business

tivities.

I

the inland ship¬

Federal

The

pers.

certain

enforce certain

package

railroads

the

must

business

good of all business when

private
not

all

Enforcing Fair Play

lots; they also aban¬
doned their once vigorous cam¬
paign to establish joint rates and
routes

undertake

ago

carload

and

for

The pri¬

the big profits came from
big tows—from the movement of
cargo in 10, 15 and 20,000ton
volumes.
They
gradually

merchandise

gpvernment

River System.

the

bulk

general

that

services

for the

.that

abandoned

said

supply

leadership.
It is for
to decide how good the serv¬

of your government are and
how progressive the
leadership is.
It is for us in government to do
our

best to

meet

your

standards.

ticipate in the export business. In
an

attempt to bring our regula¬
tions in line with the problems

and

the

trade

we

practices

of

the

have established

export
over

special advisory committees.
discuss

our

ulations

problems and

openly with

40

We

our reg¬

these

Eisele King Acquires

Chicago Commodity Firm
Eisele & King, Libaire, Stout &
Co., 50 Broadway, New York City,
members

of

the

New

York

Stock

com¬

Exchange, will acquire the busi¬
ness of Crofton, Fritz &
Co., Inc.,
cussions have been beneficial to
members of the Chicago Board of
ourselves and, I hope, to the trade.
Trade and the New York Produce
mittees and the results of

I

assure

you

that

our

export

dis-.

con¬

trols for the purpose of controlling
the drains upon our scarce com¬
modities will

be lifted as

soon

it is possible to lift them.
In
addition
to
protecting

as

Exchange, on Feb. 14. Arthur V.
Crofton, President of the latter
firm, will become associated with
Eisele

Co.,

the

&

King,

as manager

department.

Libaire

Stout

&

of the commodity

*

32

COMMERCIAL

THE

(684)

&

FINANCIAL

CHRONICLE

business

for

Trust Investment Problems Ahead
"

(Continued from page 7)
in brokers' loans and a rise in in¬
terest rates and hence to a

decline

in prices on

bonds. A strong bond
market, on the other hand, meant
lo^ money rates, caused in part
by
poor
business activity, and
Iience a smaller demand for funds
for business as well as for security
transactions.

at

markets

also had

have

We

the same time.
periods during

prices of both equities
declined.
Whereas in

which
bonds

and
the

trust investment officer
would shift from bonds into stocks
and from stocks into bonds, today
this
has
become
a
much more
the

past

and

ing. A possible decline in capital
outlays by private enterprise will
very likely be counteracted by, an
increase in expenditures by the

of

Federal Government and by

state
municipal governments. Busi¬
ness activity should
therefore re¬
main at a fairly high level, and
indications

all

ing

degree

has been

few

the

during the com¬

be
of

may

year

greater

effect

the

to

are

mat the economy

case

marked by a
stability than
during tne last

years.

Important

Readjustment
The

readjustment

the

to

important

is

officer.

trust

first

the

In

the future place, the danger of a further sub¬
decline
in
the
buying
lias in store for us. Yet the trust stantial
officer confronted with the task power of the dollar seems to have
been
removed
unless, of course,
of investing the funds entrusted to
1dm must have at least a general new measures are taken by the
Nobody can say what

picture of the outlook. In addition,
must be broad-minded and be

lie

opinion

his

change

to

able

as

"lapidly as conditions change. By
taking into account all factors, as
far as the individual can see them,
one

by using reasonable judgment,
can at least indicate the mark¬

ers

on

and

trail

road even though the

the

sometimes be mislead-

.nay

commodity prices should

trend of

mildly downward,. and there¬

be

fore the need'to seek a higher in¬
the

at

come

will. be

principal
duced. A

long

somewhat

make

will

future

.planning

range

re¬

stable economy in

more

immediate

the

of safety of

expense

somewhat

the trust officer than
has heretofore been the case. This,
Inflation Has Run Course

-

government and labor leaders to
renew the price-wage spiral. The

for

easier

'lag.

into

Taking

forces

various

of

.is merely the analysis

course,

consideration

the

of

operating

our

cer

in

individual. Each trust offi¬

one

will

have

his

make

to

own

the State of tne Union
Reports
of
the
President and the Budget Mes¬

analysis based on his own judg¬
ment, and he may reach different

is forced to the conclu¬
sion that unless new measures,
other
than
those
proposed, are

been outlined.

economy,

Economic

and

sage,

one

the Ad¬
which
brought about the inflation have

taken by the Congress and
ministration,
the
forces

tneir course.

run

based

is

ises:

,

the

on
*

This conclusion
following prem¬

with demand

caught up

ply

has

and

even

exceeded it.

In industry

industry the market is

after

ly being converted from a
to a buyers' market.

sellers'

The supply of purchasing
power in the form of deposits and
currency in circulation has caught
up
with the supply of goods at
present prices. Hence, if the means
of payment do not increase from
the present level beyond the in¬
crease in the supply of commod¬
ities, the accumulation of purchas¬

in the hands of the peo¬
ple should not exert an upward
pressure on commodity prices.
power

(3) While in a number of coun¬
tries
the
governments, through

subsidies, are endeavoring to keep
.down prices and the cost of living',
in the United States the govern¬
ment

of

their present
preventing a fur¬

from declining from

level

and

thus

ther material reduction in the cost

-of

living.

will

(4)

strongly under the influ¬
of business activity, which

be

ence

in turn will have a direct bearing

the

monetary
authorities and on the position of
the Treasury. One may however
on

policies

with

fair

a

the

of

of cer¬

degree

important changes
money market are likely
to take place in the immediate
future. The present policy of the
tainty that

in

no

the

authorities

monetary

keeping

of

all

probability continue. The Eco¬
nomic Report of the President of
Jan.
7
contains
the
following
continue

will

make

a

maxi¬

contribution to the stability

mum

the

of

be

to

that

manner

public debt will
managed
in a

"The

statement:

*

important
this program will con¬

in

factor
tinue

An

economy.

be

to

maintenance

the

of

stability in the government bond
This

market."

2V2%

rate

ment

that

means

the

long-term govern¬

on

obligations

can

be taken for

granted, and this in turn sets the
pattern for all other rates on highgrade
corporate
and municipal
obligations.
Evaluation of Bonds
While

will

market

credit

the

on

remain
will

factors

the

whole

bond

unchanged,

play

a

much

important role in evaluation
The
spread
between
high-grade and lower-grade bonds
more

of

bonds.

will widen. Some of the medium-

The
President's
Budget
contains both inflation¬

Message
ary

The movement of interest rates

during the current year will

spending hundreds of millions
dollars
to keep
farm prices

be

'

rapid¬ government bonds pegged will in

(2)

ing

that have

from those

conclusions

State

"

,

_

j

The scarcities created dur¬
ing the war have to a large extent
been met. In many industries sup¬
(1)

and deflationary measures. If

all the proposals were

adopted by

will,

money

operation, adding to

complicated

Ids diffciulties.

ture

grade bonds, under the impact of
business conditions and
in

a

decrease

witness consider¬
able declines. On the other hand,
profits,

may

activity

ness

find

medium term obligations by com¬
mercial banks. Vice versa, if the

ment

inflationary

be

orderly,

degenerate
more

or

into

serious

whether it -will
a
recession of

character

than

can

be envisaged at

present, will de¬
pend
to
a
considerable ,Pv+e^t
upon
the psychological reactions
of individuals and groups. It is
fairly certain,, however, that a
severe decline in business activity
cannot take

12

place during the next

months, partly

because of the

farm

policy adopted by Congress,
will keep farm income at
a
high level; partly because of
large
government
expenditures,
increased public works and public
which




great

ments

It

have

financial

the

tions

the

also

evaluate
status of

taken
of

status

during

will

improve¬
place in

permanent

that

more

corpora¬

few

past

years.

easier

become

accurately

>o

the

obligations of organized

railroads. From

now

on,

the trust

investment officer will have to be
much

more

bonds

and

careful

in

selecting

officer may be very uncer¬
to the
trend
of equity

tain

as

and

power

of

curities.

personal

well as corporate,
will also play an important role
as

evaluation

in

of

prices

of

state

and municipal

obligations. A

terial increase

in corporate

will

create

ma¬

taxes

greater demand for
tax-exempt securities on the part

of

a

institutional

investors

such

as

commercial banks. An increase in
taxes

the

on

income

higher

brackets will also create

added

an

demand for tax-exempt securities.
Above

all, quality of the munic¬
ipal obligations will play a much
more
important role during the
next few years than during the
immediate

and

war

postwar

moderate

Even

affect

municipalities
their

and

greater

dividends

than

before.

in 1948.

as

the

At the

the

investment

individual

as was pointed out before,
material increase in the rate on

a

high-grade
ment,

communities?

or;

corporate,
govern¬
^municipal bonds is not

people

when

load

pi

(3)

ice

levels

foundation

sound

on
on

rest

how

and

the

financial

to

periods

sales

in

the

of

effect

on

and

a

when

during

the

purchasing

in

dollar

was

increasing

safe

return

than

on

the

Dec. 31,

status of various industries and in¬

on

dividual corporations.

curred

profits

during

of

a

period

corporations

oc¬

rapidly increasing and the outlook

be

may

will

He

emphasis

on

a

investment rather

large extent cannot be

since it is often under
of
psychological
economic factors.

than

It

be advisable for him to ex¬

of
equities
discounted
readjustment and those which

look

groups

already

still failed to do so.

At the

ate

for

business in

the immedi¬

future, and to the prospect for

individual industries and corpora¬
tions and to their
on

the

earnings

probable effect
of
companies

whose stock the trust either holds
or

contemplates buying.

In gen¬

eral, the time does not appear to
be

opportune

to

be

particularly

bold, and in view of the low eco-

:

i

when j
were

then

time, he will give the most
careful consideration to the out¬

was

1948. This decline

regards invest¬

same

power

stocks

un¬

influence

have

actually declined, what will their
65

a

the

December, 1945 and 63.66

in

increase

the movement of equities,

have

of
most pronounced,

of

on

which

average

gross

an

follows:

as

amine

be in the future? The Dow-

Monetary Fund Derelict
In Warnings of Dollar
Shortages
(Continued from page 7)

:

this

association

f

bureaucratic
solvent.

it

wants

formed warning of

trouble ahead;
the

that

nouncement

clearing;

are.

any

to remain
is an in¬

informed

equally

an

need

pressure

Ail

export

of

net

does

men

an¬

of

tracks

for

the

re¬

sumption of trade.
In 1944,

the International Mone¬

When

readjustment,

may

course

changes.

of

the

1945-48,
the rise in prices and the

decline

soundest

of

tary Fund had not been organized.

predicted

years

past.

ing in equities to be made by the
investment officer in the period

which to

de¬

the

economic

trade

place

prices of commodities is
in the making. This outlook raises
a number of questions as regards
the investment in equities. If stock

in

prices of securi¬

conservatism and of a
portfolio
is
the
one
during periods of

ducing the break-even point.
as

time

some

well-balanced

and

summarized

in

prices

in

increase in
management while

of

for

ties during the past

employment will lead to greater
productivity of labor, thereby re¬

there

moderate

been

credit

The decisions

forces of inflation have run their

that

corporations

decline

moderate

today the

and

The movement of

one.

a

income,

opportunities for selecting highgrade equities offering a more or
less steady and satisfactory re¬
turn
are
better than they have

ever,

even

Stock Prices

and

some

doubtedly result in

credit

that

high, and in

point is not a fixed
A decline in profits will un¬

rather

indicated,

very

have a pronounced
net profits, yet the fact

efficiency

on

more

break-even

the

believe

officer will therefore concentrate

should not be overlooked that the

future.

to

is

dollars

profits could

a

some

previously

of

the

at

Realizing the great
uncertainties, the trust investment
present time.

bound to be

are

moderate

available

are

policy

United

the

of

.

a

returns

in

larger than in pre¬
and
that
dollar

profits

case

even

quality, however, will play an
important role in the immediate

reasons

be

industry is

the

municipalities
has
definitely improved, others
have weakened. In general, the
tax-exempt market should be ac¬
tive, and it may be favorably af¬
fected
by increased taxes, the
shift of funds previously invested
in land, ranches, real estate, and
in some cases in equities, to taxexempt securities. Selectivity and

the

to

not

While the break-even point

(4)

•

while

and

higher.

the credit standing of a

that

standing

cline

20's,

that
a
large
earning good

quite? evident

number of securities

few years has
conclusively demonstrated, how¬
ever,
that in the long run the

terms

bound

analysis of these factors will

indicate

partly because psychological
play such a vital part in
the movement of stock prices, it
be,

question. This,
the total value

done

in

vious

will

status

the

of

business

of

To

on

out

•States

new

community?

As

the

of

in turn, means that

they stand up in a buyers' mar¬
ket? (4) What effect will the clos¬
ing of some of the new factories

An

years

terly

(3) Do the newly

industries

established

hence

The

few

a

have decreased?

have

in the form of dividends.

come

While

past.

impossible to state with any
degree
of
accuracy
what. the
course
of the equity market will

is

not

are

immediate

the
the

is

(2) Capital expenditures by
corporations • in the near future

potential relief
business activity will

created

it

in
in

than

factors

in¬

(2)

the

judging how

fairly certain that money

to be expected.

offi¬

what extent has the influx of

is

It

consideration

re-

ing questions probably more care¬
fully than ever before: (1) What
were the permanent effects of the
war and the shift of population on

o'i

that

future'

inflation of the past
is to a large extent
permanent and a return to the

will have to study the follow¬

is

same

mention the 30's, seems to be ut¬

obligations,

lem

same

time,

state and municipal

As regards

The principal new prob¬

arisen.

no

still permit them to pay

and

to

tend

prob¬

one

confronting the trust officer,
a
number
of
others
have

during the past few years corpo¬ remain fairly steady, and no ma¬
rations paid out only a relatively
terial change in prices of highsmall fraction of their earnings in
grade bonds can be foreseen. As
the form of dividends, and even if
in the past, so in the future, the
profits should decrease this will
policies of the monetary authori¬
probably not cause a drastic de¬ ties will play an important role
cline in the payment of dividends.
in the money and capital markets.
Earnings of corporations in gen¬ The quality of securities, however,
eral can decline substantially and
is bound to be a more important

in

expenditures for

or

This

increase.

rates in the immediate future will

now

V

iief.

cer

states

of

either

stable

More¬

(1) The spread between yield
equities and that of bonds is

over,

adversely

may

revenues

crease

decline

moderate

a

activity

the

their

purchasing
will

removed

has

there

run

less

or

loser.

that

material change is to be
expected in this respect because

of

likely to be at as high a
rate as was the case during the
past three years. Hence, the need
tor plow back earnings will not be
as
pressing,
and
corporations
siderably, however, and a further
should be in a position to pay out
rise from the present level will
a
larger portion of their net in¬
undoubtedly
encounter
opposi¬
business

a

may

readjustment and
the great
changes brought about by the war
will affect individual groups of
securities.
y "

periods.
Expenditures of states
and municipalities have increased
considerably during the last fewyears
but there is still further
urgent need for schools, hospitals,
and other improvements. Taxes of
municipalities have increased con¬

tion.

the

dollar

show

situation

conditions,

that

the

more

Under

present

is the
conditions

believe

to

remain

factors, be guided by the follow¬
ing considerations:

by

whole

a

course

prices, he has to make decisions.

groups

phenomenon,

inflation have

forces of

be sellers of tax-exempt se¬
In view of the pressing
need for public works by states
and municipalities, the supply of
tax-exempt obligations ought to
be substantial. Changes in taxes,

taken

may

72.36 in

government obligations in the fu¬

Nevertheless, while the invest¬

as

present

reasons

but

Jones

tax-exempt

am

some

this

Under

lem

ef¬

for

equity market, and that I
capable of doing.

while
from

society
are

against inflation

hedge

that

benefit

the

the

market

i

to forecast

mean

and

decisions made by investment of¬
ficers
will, among many other

be

evaluating, the

The

measures

adequate

the Reserve
authorities, commercial banks

should

fects of the past few years on

in

be¬
fur¬

and

restrictive

credit

ther

should

dangers

pronounced

more

come

the

in

questions would

increase the demand for short and

this

will

v'.'' \

Experience
of
the
past
few
years has shown that there is no

profits influence the
payment of dividends, and is the
present a good time to sell or to
buy equities? To answer these

not

course

readjustment will

System
to lower

prices

Against

Hedge

Inflation

'f.. v;

readjust¬

of

extent

what

To

decline

equity

period

the

ment?

Adequate

arise:
of

course

during

No

good. The ques¬
■ What
will

was

therefore

the

be

the

the

the

Reserve

it necessary

tions

will

outweigh the inflationary ones.
Whether

down¬

turn

requirements,

reserve

are

have

hitherto

should

Federal

the

should

qual¬
ity will reflect for the first time

which

in¬

ward and the Board of Governors

some

bonds

be

by the status of the
market in general. If busi¬

Congress, which is by no means
certain, the anti-inflationary
measures would in all probability

been considered of medium

in the past,

as

fluenced

partly because the liquid sav¬
ings in the hands of many indi¬
viduals are still large and increas¬

and

During the past few years we
iiave witnessed strong bond and
■stock

housing; partly because ERP will
maintain exports at a high level;

Thursday, February 10, 1949

nomic

and

international

political

visibility a policy of caution and
of reliance

on

on

income rather than

appreciation is indicated.

it

was

thereafter it

collect

organized shortly
given power to

was

precisely

need.

its

Articles

of

information

the

Article 8,

we

Section 5 of

Organization pro¬
may require

vides that the Fund

members to furnish it with statis¬

tical

information,

including

that

relating to their international in¬
vestment
position and interna¬
tional balance of trade. 'Our Con¬

in
passing
the
Bretton
Act, authorizing our par¬
ticipation in the World Bank and
the
Fund, provided, in Section
8-A, that the President could re¬
quire an.y person to furnish such

gress,

Woods

data in such detail as

is necessary

comply with the request of the
Fund, and implemented it by pro¬
to

viding for punishment, as for con¬
tempt of court, any refusal to
comply. There can be no doubt,
therefore,
that
the
Fund
has
authority to do the job.
.

Inventory

Control

Applicable

to

Foreign Exchange Transactions
As
trader

every

knows,

successful

foreign
the

trading

exchange

foundation
is1

a

of

oosition-*

Volume

book

169

in

Number 4776

which

the

trader

both his present stock, his
tions to
to

enters

cialized

agencies

obliga¬

Nations

could

deliver,, and commitments

receive

foreign

exchange in
future.
In other words, the meth¬
ods of inventory control are
ap¬
plicable
to
dealing in foreign
exchange as they are in any other
merchandising operation.
;

THE

such

liaison

of

be

United

the

than

made

with

COMMERCIAL

by

Central

Banks,
in dealing with the statistics of in¬
ternational payments.
But

as^long as this information

remains
of

the

secreted

in

the

archives

or is disclosed only
releases that neither

Fund,

in statistical

sugar

and

price

than

sents

refines.

pounds.

decisions. '

But

the latest

are

entrants

The

Central

Banks

are

the habitual guardians of the for¬

eign

exchange

position

of

their

I

to you, that we lay
before the Interna¬

propose

problem

our

countries

tional

to

their consideration of it.

and consequently able
supply the statistics with regard

to

their

tional

country for

position-book.

contribution
tion

of

interna¬

an

No

toward

the

greater
restora¬

international

position-

book. No greater contribution to¬
tile

ward

tional
more

restoration

stability

of

interna¬

and

consequently
normal trading relationships

between the members of the spe-

Monetary Fund, and invite

be

not

completely

withheld

information

the

tried to do this
The

reply

that

I

beside the point

characterized

brush-off,"

I

months ago.

some

was so

be

to

as

if

"the

as

am
willing to
inability to state
clearly.
This time,
straight answer.

but I

attribute it to my
the

problem

let's get a

(Continued f
€.2170 per pound, and for refined,
€.300 per pound. The year 1948
found us, for the first time in six

without fixed prices stipu¬

.years,

lated* and dictated by the
ment.

govern¬

True, the price during 1948
by the actions of

influenced

was

the government in the handling of
the quota under the Sugar Act of

1948, but the direct fixing of the
price had been eliminated. It is,
therefore, interesting to note that
lor the year 1948 the average
price
•of raw
sugar, duty paid basis, was
5.5450

and

*7.730.
jraw

Thus

it will

values,

.about

1940,
sbout

price

refine d

of

be

sugar

that

seen

the average, were
100% higher in 1948 than in
while refined, in 1948, was
75% higher than the refined
in 1940. It should also be
on

noted that between 1940 and

1948

the duty on Cuban raw sugar was
reduced 400 per 100 pounds.
Re¬

finers'

margin increased in the
•eight year period under discussion
less

than

50%.

The

theoretical

margin in 1940 was 1.010
pound, and in 1948 it was

average

per

1.500

per

Total

pound.

Consumption Higher

Apbtfier change in the business
is in the volume of sugar used in
United States. In our nation

the

om

was

States

world—6,890,000

short

of

tons

is

preliminarily placed at 7,341,000
tons, or a gain of 450,000 tons. The
probabilities are that there will be
distributed

in

the

current

year

7,500,000 tons. Expressing this

on

a

the

formula.

market constitute

cations as this or that,

93.6

pounds. Of course, the per capita
consumption was actually higher
in 1948
than indicated, for we
started in that year with extreme¬
ly high invisible stocks, which do
not show up in the per capita

for

ures

that

If

year.

we

reach

estimate of 7,500 000 tons this

•our

the per capita will
pounds of refined sugar..
year,

!,.

»(

fig¬

\

-•

1

iff

•?.{

••

•

\...- '•

"Ne\y Rules

1

—

-

be

95.3

\-r-

seems

quota, and

(c)

further adjustments
master quota.

the

in

This

profound change in the
business has made it neces¬

sugar

sary for all of us
basic concepts in
trends in sugar.

change our
judging price
The industry has

had to master

new

a

learning this

to

set of rules.

set of rules

new

it has also been necessary for the

student to

sugar

for

sense

And

develop
phychological

as

before

never

sixth

a

values.
intimate

an

A Mistaken Notion

No

Some

informed

poorly

have the mistaken notion that the

any given
determination

Agriculture will make for the

the
into

the
Congressto arrive 'at two
important objectives, (a) to main¬

tain

and

sugar

industry, and (b) to provide

will follow

a

market, as a
given course.

Nothing could be further from the
facts!

*

At

the

best, from the standpoint of

Secretary, he

ate

on

siring

only

can

a

"cut and try"

a

given

end

oper¬

basis.

he

De¬
take

can

this

or that step in regard to the
quota, but he is obliged to await
the reception and reaction of the

sugar

sellers

producing

and

areas

whole.

as a

knows

ly the entire picture of marketing
and pricing of sugar for our mar¬

many

Prior to

1934, the

year

when

tion, the sugar price was affected
primarily by the rise and fall of
production and consumption here
abroad. Sugar prices in the

and

United States were markedly in¬
fluenced by what happened in the
rest

of

the world.

Of particular

Sugar

Acts 'is

yesfed in
culture to

,

significance in the
the

responsibility

the Secretary

of Agri¬

influence the

domestic

price level of sugar in accordance




supply

of

excessive

to

he

the

at

sugar

domestic

prices

not

But

the

consumers.

once having determined
thinks the price should

scientific, shatter-proof
by which he may fix a
quota that will bring about the
exact price that he has in
mind,
high or low.
no

The

Secretary has no way of
knowing what interpretation the
many buyers and sellers

w ill

put
This

his pronouncements.
indicated last year when the
Secretary came to the conclusion
upon

was

that

estimate

an

of

of

buyers
and the

over

in

an

immense

ours,

12 month period, there are
factors, other than the quota

and

cut
up

or

cuts

for

Hence

and

down,

and

that
the

factors,

on

his

first

try, the price he desires,

tries

is

not

again.

fluctuations.

said

if

and

the

reached,

he

consumption
would bring

him

on

by Congress.

trade,

Many Fluctuations in 1948
As to the possible scope of such

fluctuations

we

have only to look

he

if he

for

to

power

the

melts

is

and

optimistic
every¬

obtain

his

cheaply as possible
through feigned indifference, de¬
laying tactics, and the. like.
Tc
illustrate, I would judge that to¬
day the raw sugar buyers of a
as

number

of

refiners

believe

thai

not, however, rushing in today to
buy in a substantial way their

important forward needs

the period of heavy production in
Cuba and Puerto Rico,

they will
be able to acquire a
big line of
raws
at
a
lower
figure.
Cer¬
tainly, it is obvious they will
do

never

anything to aid and abet

the seller.

Then, again, there

present,, when .the seller him¬
believes prices will go up,
but he finds it inconvenient to

wait until such time

because
on
a
substantial proportion of his
pro¬
duction he has storage and finance
problems.

I

merely

mention a
few of these situations to point
out the fact that the mere
naming
of a quota does not tell the whole
story and that one really tp un¬
the

market

sugar

make

point I would like to

although in theory,
Sugar Act of 1948, the

the

case.

it

did not.

quota

to

But

Then he reduced

7,000,000

market reversed

tons

and

itself.

This

and the

ball

crystal
the

trend

price

which

in

the

pletely

will

divorced

from

this

yet

We

is

is

com¬

the

world

not

receive

actually
part

a

indicate
The

large part of her produc¬

a

have

surplus which will not be
digested in the world market, and
that this promises' to leave Cuba
a

at the end of

a

the

carryover,

with a large
psychological ef¬

year

fect will be to make buyers in the
United States market wary.
And
such a condition would put the
'Cuban producer under more pres¬
sure
to
sell
his
United
States

quota

hurriedly for financial and

storage

reasons, even though he
is assured of this quota as
repre¬

senting
The

real home for his

a

I have

reason

in

order that you may be
against those who have
only a superficial knowledge of
sugar and the inability to learn
about, understand, interpret and

guard

evaluate the many factors at work
in this vast sugar arena.

Secretary Cannot Control
Competition

Also, it

Now

I

observe' that

do

many

not

although

the

Secretary

has

power to name

deficiencies

realloca¬

and

tions, and I will briefly touch on
The Secretary of Agricul¬
ture announced a quota in De¬
cember of 7,250,000 tons for 1949

that.

Time

weil be said that

may

into

does
a

full

not

permit

me

discussion

of

to

the

go
de¬

the tails, but, in effect, I. can say to
you that, of those sugar producing

quotas, he cannot
make people accept his acts or his
intentions as being final and con¬

ates

the

In

not fill

this

effectiveness

This

has

not

occurred

times in the

the

of

that

raw

bered
refiner
are

in

that
and

it

but

sugar, beet

to that degree at least the
Secretary's overall quota will be

year,

less than 7,250,000 tons until such,
time

entitled

the

sugar.

purchase
The

and

the

United
not

sugar

nat¬

1949

is

6,700,000

tons.

Therefore,

simple

fact

the

that

1948 distribution estimated

so

we

with

by the

government at 7,341,000 tons, with,

probable

distribution

in

of

1949

7,500,000 tons, there is, at the mo¬
ment,
available to satisfy that
demand only 6,700,000 tons. There
is

leverage

here marketSecretary of Agri¬
delays for an extended

strong
If

culture

the

period the reallocating of defi¬
ciencies, the market will accumu¬
late

strength

pressed

by

which

will

be

price advance in

a

ex¬

raw

sugar.
The Trend?

With

this

governmentally bull¬

situation—current

ish
at

6,700,000 tons

demand
natural
raw

of

sluggish.

potential

tons—it

ask

to

one

market

why

has

Chiefly, there
for

reasons

availables-

versus a

7,500,000

for

sugar

this

are

condition

intentions

government's
the

only

are

now

market

is

the

turned

two
and

they illustrate the fact that

the

are

not

factor—(a)

we-

approaching

the height
new crop production season
in Cuba and Puerto Rico, and (b)
of the

the winter is a period of rela¬
tively slow consumption of sugar.
Raw

be

production

sugar

February,

March

of

raw

The pro¬
has physical
problems that he

sugar

financial

cannot

ignore

during
April will

and

heavy.

extremely

though he be¬
price of sugar will
go higher later on.
He must keepreasonably liquid financially.
He
cannot store, where produced, an
even

lieves that the

unlimited amount of sugar.
the other hand, refined
distribution so far this year
has
been
excellent, considering
the season.
I anticipate a mate¬

rially higher distribution for the
first four months of this year as

compared with the same period in
1948.

into

And, of course
the

to

that there
000

tons

For

example,

the

represent one of -the
a

means

not

actually 7.250.available for marketing.
are

deficiency will
estimate

that

Philippines
areas

occur

of

its

in

where
1949

quota

of

tons.

taken

So

far

action

the

Secretary

to

reallocate

only 125,000 tons of this apparent

deficiency.

Assuming

our

esti¬

mate of 300,000 tons to be correct,

spring and

movement

sugar

we

get

summer

the

as

will

quicken

seasonably and relieve the burden
producers' shoulders.

on

Further, it should be observed
that the refiners have still to pur¬
very large line of raw
for their melts in Marcbt
April and beyond.
Also, I
think the prospect is good that the
United States Army will purchase
a

and

future a
from
Cuba for the feeding of peoole in
in

relatively

the

block

substantial

the

occupied

near

of

sugar

abroach

areas

Weighing all of the pros and cons
in the sugar situation, I can only
the' conclusion

come

to

basic

trend

upward.
at

of

sugar

that

I

for
will be

believe that refinedon the Jan. 3 move

booked

7.75c

basis for

cane

is excel¬

property and: that we
witness
higher values for
lent

sugar
season

the

prices

first half of this year

has

refiner

in

have

producer

raw

States

7,250,000 tons, but some¬
in the neighborhood of

thing

sugar

of

available for the market m*!

sugar

far

000

sale

some¬

I could list other
areas, but suf¬
to say
that the amount of

sugar

running battle

Secretary' does

fice

the

the

sugar
a

are

ficiencies in such areas, it

We

remem¬

the

as

982,000 tons it will be unable tc
ship in the neighborhood of 300,-

be

generally

engaged in
the

must

areas

quota.

once

1,800,000 tons as being
by the beet industry.
degree that there is a defi¬

ciency in the beet area, and as¬
suming no reallocation of it by
the Secretary until late
in the

of Agriculture reallocates the de¬

the

its quota* of 1,800,000 tons
by about 250,000 tons.

To the

to supply tiieir portion in full
Consequently, until the Secretary

but intense competitive con¬
ditions in a given area may vitiate

sugar

contains

For-

one,

beet

marketable

that you can lead a horse to water,
but you can't make him drink.

example,
the
Secretary's
may be considered a bullish

the

estimate that it will

we

year

story

quota

That

But the present overall quota for
the United States of 7,250,000 tons

sugar

old

of

case

industry,

segment of the total quota, cer¬
tain areas will not be able in 194?

the

re¬

able to

area

e n c y

potentially strong market

a

chase

have

i

factor.

their

We

c

sugar

quota

is
interpreta¬
tions and evaluations of all of the
facts—not just one fact.

men's

f i

e

On

Importance of Reallocations

control such as exists on sugar,

by

tons

on the market for
the time being, at least.
This ere-,

tem

influenced

government

175,000

be offered

and

is

ndL

a

that that much sugar can-"

means

not

tons

unless

allocated to another

ducer

on

7,250,000

Philippine quota is

supply the d

length this matter of market
fluctuations under the quota sys¬
some

properly understand the full
significance and importance of

have

we

the

sugar.

discussed at

a

whether

from

of

realized

additional

of

tion in the world market.
If and
when it is thought that Cuba will

one

an

Cuba also

the

commodity, whether
we
have the law of supply and
demand functioning freely
or
of

market

sells

processor

market.

States

the

illustration shows how ridiculous

sugar producer

must

that

is

quota
be

until

wise.

Another

sugar from Cuba.

price.

'

intimately conditions in all

the

in

that hap¬

as

pens—especially

follow

full

cannot

as

self

our

decline

times,

are

at

derstand

the

*33

thing about the matter.

market,

the

because

they think that, by holding off as
long as possible, especially during

check

Then, too,
many

which

Even

raw

higher

a

necessary

7,500,000 tons. Presumably, he
thought that that quota would

proposes

affected by

is

horse

of

pay

to

be

disposes.

not

United

sugar and cane refined fields.

Secretary

will

The market plum¬
meted down and he cut the quota

many

well

keen

a

purchase

market, he will do

sugar

under

placed

This makes

It may

be

thing in his

the responsibilities

in

a

trend.

the

oil

(685)

the

commodity

na¬

itself, which make the market
the

in

areas.

with a great
the commodity in trade clusive.
as

must

trader

7,800,000
tons
about a price that wouid be satis¬
factory to all concerned and meet

He is obliged also

that

country such,
volume of

the first Sugar Act began to func¬

protect

of

being. That changed fundamental¬

ket.

en¬

suing year. The Secretary, in fix¬
ing the sugar quota, is charged by

Such

He

came

year, what quota
the
Secretary
of

has simplified the in particular, as well as by a host
judging the market of other conditions—I say with all
an attitude provides
this group of forces operating, it
them with an excellent oppor¬ is
obviously fatuous for anyone to
tunity to lose money. They say think that the quota, in itself, or
that the Secretary of Agriculture the government's announced
or
needs
only
to
make
his pro¬ implied intention, is a kind of
trend.

tion,

when

December,

system

new

business

curred;, 15 ..years

ago,

until

knows

one

in

business, the state of mind of the
people country in general, and of the

to deal with seasons of peak sugar
oroduction and poor consumption.

Sugar Acts

those

it is for anyone to say that if they
comprehensive knowledge of
know what the Secretary's inten¬
all developments in all areas is
tions are they can tell what the
essential, together with the ability
price will be.
to
evalute
each
development.
In a nation where the consump¬
Actually, it is more difficult to
tion of sugar runs over 7,000,000
predict the trend of sugar prices
under the quota system than was tons, with millions of housewives
and a great number of industrial
the case when the law of supply
users, and with the price .affected
and
demand
functioned
unhin¬
by!, financial matters,, physical
dered.
storage problems, the trend; in

Of all the changes in the sugar
business, the most important oc¬
first of the

that

and

countless

v..

New Values

area

to be unable to fill its

nouncements and the

1948

Sec¬

or depressing the price
is made up, roughly, of
(a) the initial fixing of the over¬
all quota, (b) subsequent reallo¬

result

in

the

lifting

fined

and

esti¬

the United

needs of

per capita basis, we find that in
1940 we consumed 97.6 pounds re¬

sugar,

trying.

and

shows

actions.

be, has

His

sugar

In

cutting

record

urally

'

selling and buying had their indi¬ the chances favor a higher price
vidual problems, attitudes and re¬ for raw sugar later on.
They are

what

retary's chief powers in affecting
the price level.
His mechanism

•—the largest user of sugar in the
sugar, raw value, were distributed
in 1940. The distribution in 1948

certain

a

mates of

for

The Secretary

formula

with

of

system.

merely
the

Secretary

19)

page

of 80c per hundred pounds.
mind you, this was under

And,

a

The Sugar Sc Bite Changing

From

the quota

I would

honest

of 60c per 100
that low point in

May, the market advanced to a
high in August of 5.80c—an ad¬

Banks.

Cuba

in the

difference

a

rapidly growing number of
nations that are setting up Central

and

CHRONICLE"

1948 record.
In February,
1948, the price of raw sugar duty
paid basis at New York was 5.600
per
pound.
In May, the price
was 5.00c
per pound.
This repre¬

vance

our

FINANCIAL

the

at

Congressmen, our business
men, nor the general public are
competent to interpret, it cannot
guide- us in making the right

■j •; The Philippine Islands, Liberia,

&

and

sugar

progresses.

futures

>•

as

will,
raw-

the

34

(686)

THE

COMMERCIAL

Trusts Providing Large
(Continued from page 2)
United States Steel

the

Three

was

easily the
favorite of the group, seven dif¬
ferent managements purchasing a
total of
19,600 shares; of these,
three

were

of *

one

The

next

in

followed

industry
Bethlehem,

pro¬

each

also

found

second choice in pop¬

as

Six managements bought
total of 20,000 shares and two of

these

made

those

of

National,

many

resulted

from

additions
stock
first

dividend

additions

based

of

amount

funds

for

19,900

five

and

National.

sold

funds,

tirely

Actual

pur¬

Four

shares

stock

like

a

lot

other

of

commitment. Two

in

held.

Re¬

Opinion

divided

public, three of these eliminating

to

shares

of

was

each

also

more

shares, while

new

commitment.

already

market

with

the

mix¬

sold

a

interest

stocks

well

little

found

teresting exception was the pur¬ tain types of companies in this
chase by National Investors dur¬ group
are
generally considered
ing December of 5,000 shares of good recession-proof storm cel¬
the Magnavox Company.
Since lars, the industry generally has
National has had one of- the best been traveling on such a
high
long-term records for a fund spe¬ plateau and the break-even point,
cializing
in
so-called
growth just aS in many manufacturing
stocks this commitment is of par¬ concerns,' has risen
to such an
ticular interest.
extent, that profits may decrease
very
readily.
Nevertheless,
six
The
two
large can manufac¬
turers found many purchasers and managers bought 9,300 shares of
only two managements sold a to¬ Montgomery Ward which is al¬
tal of 625 shares of Continental. ready one of the most widely held
issues among the investment com¬
28,200
shares of
this
company
were
Four
trusts
also
pur¬
brought by six trusts and panies.
Sears
Roebuck and
the
two of these were new acquisi¬ chased
same
number
of
funds
added
8,600.
tions.
Five funds bought Ameri¬
can

and

the

various

ers

of

and

v

An

in¬

products,

others,

Corning

in

also

were

Among

types of manufactur¬

glass

three

reflection

these

of

commitments.

third made a
The general
television

two

original

in

operations.

management

Reynolds, four trusts

on

were

another

fairly

was

of

Contrasted
favor

by two
managements.
Philco declared a
7% stock dividend, but in addi¬
tion two managements purchased

new

made

Morris;

Philip
added

was

also

were

ture

tric

of these making an en¬

one
new

marked

inated the stock from their port¬
folios., Master and McGraw Elec¬

Ligget &

also well liked by four

was

acquisitions

management

on

Republic

of

Myers

such

five sellers and two of these elim¬

Three of these lots

acquisitions.

new

tne

equity

latter.

initiative accounted
chases

10%

a

the

on

of

shares

on

and

company

distribution

of these
a
2V2%

were

was

opinion on Westinghouse
Electric.
Although
six
trusts
bought 34,900 sares, there were

managements purchased a total of

22,310 shares.

nine

and

was

equipment

there

acquisitions.
restored

was

its former position as a favor¬
ite investment blue chip as nine

trust increased their

Republic

four of these lots represented new

which

to

commitments.

new

Although 11
holdings of

and

funds

three
purchasers.
by

American Tobacco

ularity.
a

no

Steel

Armco

and

sold

GE

were

electrical

Steel, one man¬
agement adding to holdings while
another made a new acquisition.
Inland

major

for

Electric

General

be

evinced in Sharon

commitments,
being with the

size,

Enthusiasm

the only
issue
for
any real enthu¬
siasm.
Eight managements pur¬
chased a total of 15,300 shares and

continued- to

Interest

Thursday; February 10, 1949

Market Cushion

making
purchases
while
three
others lightened their holdings.

portfolios.
purchased

also

trusts

ment.

Seligman units.
ducer

their

from

Youngstown Sheet and Tube, one
of these making a new commit¬

new

course

stock

CHRONICLE

FINANCIAL

&

containers

found

and

with

favor

managements.

well

liked.

End of

Net Cash & Gov'ts

Thous. of Dollars

few

Stores

Although

cer-

Companies

Preferred Stocks

Grade Bonds & Pfds.

Per Cent*
TTv-» H

Per Cent

pronounced disfavor, three
selling a total of 27,000

found

shares;

Commonwealth

rs-F

Dec.

7,097

7,549

21.6

23.2

14.3

15.2

64.1

61.6

748

907

9.1

11.4

3.2

2.9

87.6

85.7

475

403

25.1

19.8

408

315

8.0

5.8

Investment

Dec.

Sept.

Sept.

Dec,

-

-A

r

•.

10.6

6.0

64.3

74.2

21.2

22.7

70.8

71.5

'

Eaton

Howard

&

Balanced

'

10.4

10.8

22.8

25.3

66.8

63.9

681

16.4

18.0

8.6

17.9

75.0

64.1

: 233

193

12.0

10.6

7.6

7.9

80.4

81.5

6,857

6,551

5.7

5.2

34.0

33.0

60.3

61.8

803

_____

Investors Trust

General

Mutual

Investors
Johnston

Mutual

___^_

75

81

21.7

22.2

16.6

17.0

61.7

60.8

373

477

3.1

4.0

15.3

15.5

81.6

80.5

705

442

5.9

4.0

29.7

31.4

64.4

64.6

41

24

10.2

5.9

18.7

20.1

71.1

74.0

6,141

4,877

23.7

18.3

8.4

17.7

67.9

64.0

372

448

27.9

34.3

13.3

15.1

58.8

50.6

Fund..

Securities—Income

National

Nation-Wide

Securities

Nesbett Fund

•

.&

George Putnam Fiind_
Russell Berg Fund
Scudder Stevens

________

Clark

&

f

3,235

A-t

9,677

8,316

16.5

32

45

417

518

:

Wellington Fund
Whitehall Fund

Investment

Wisconsin

4,010 f

3,717

([Fully Administered Shares

Co.__

'.

'

6.3

4

'•

23.3

J.

t

60.9

55.1

58.4

51.0

49.3

A;a;a:A 1.1

72.7

-38.1

None

96.9

13.3

t

25.8

13.0

28.4

28.6

6.8

42.7

-'M 43.9

30.8

4.0

a

Affiliated Fund

Bowling Green Fund——————Broad Street Investing-.
£

Dividend

Shares

Investors

6,273

98

137

1,008

2,637

Knickerbocker

Massachusetts

7.9
4.3

New

95.9

90.7

None

77.5

79.2

270

527

5.8

None

None

167

204

2.1

2.6

None

None

1,321
1,921

22.5

27.5

3.0

2.5

21.0

24.0
3.8

Aa':,

97.2
97.9

*

74.5

r

Securities
:_____

the

other

is

companies.-

fire

other

of

What

often

each

of

think

trusts

interesting

an

speculation. Opinion was divided
Tri-Continental,
but
two

managements sold 6,000 shares of,
Chicago Corp.
Another ex¬

the

nies.

Chemicals
.

Chemicals

Mildly

were

'

Favored

favored during

period but there was no stam¬

70.0

industry.

73.0

was

95.9

96.2

4.3

i7.9

'93.5

61.9

None

None

96.0

97.4

123

2.2

20.2

4.0

2.6

521

491

18.7

17.9

3.9

4.0

77.4

78.1

133

121

10.7

8.9

None

None

39.3

91.1

757

1,566

5.0

10.7

None

None

5

14

1.2

3.4

9.8

12.5

11,054

9,743

17.1

15.3

None

None

254

237

24.3

21.3

None

None

7,556
1,769

6,817

19.0

17.8

None

None

1,206
3,635

28.7

15.2

15.7

8.4

.55.6

76.4

22.3

20.7

None

None

77.7

79.3
75.4

Mathieson

Chemical

the most popular

issue in the

five
trusts
purchasing7,500 shares; three lots were new
acquisitions.
Dupont
was
also
well liked by four managements,
and while some of the increase ingroup,

89.3

Dow

89.0

84.1

2V2%

82.9

84.7

agements

75.7

78.7

market. Three funds also brought

81.0

89.2

95.0'

-

De¬

*

*

75.0

'

stock

and

inally set up largely with capital
supplied by investment compa-.

3.0

:

Research

velopment Corp, which was orig¬

None

"

of

Corporation

American

in

4.0

405

"

\

resulted from

holdings

the

stock dividend, three man-;

made

purchases in the.

1

:

Corporation

6,248

25.3

21.7

2.4

2.9

72.3

426

:■* 7.9

7.6

9.7

9.9

82.4

84.1

bide

24.0

20.7

0.4

0.5

75.6

78.8

their investment in this company."

7,215

18,104
2,051
1,690
2,957
1,886
2,711

§Selected Industries
§Tri-Continental Corp.
JU. S. & Foreign Securities
International

Securities

■

494

10.6

11.7

None

None

89.4

88.3

19,553

20.0

21.5

•1.5

1.5

78.5

77.0

2,306
1,839
3,325
1,354
2,843

21.5

5.9

6.8

72.6

67.7

477

__.

'

i

25.5

A-

3.9

4.3

16.4

13.6

79.7

82.1

4.6

5.2

11.6

12.3

83.8

82.5

5.6

4.2

None"

■"None

94.4

95.8

7.9

7.5

None

None

92.5

preferred stocks: Moody's Aaa through Ba for bonds; Fitch's AAA through BB and approximate equivalents for preferreds.
tPortfolio exclusive of securities in subsidiary or associated companies.
reports issued to stockholders on this date,
§September quarterly
figures revised.
UA class of Group Securities.
and

interim

SUMMARY

Changes in Cash Position of 58 Investment Companies
Minus

Unchanged

Totals

8

8

2

16

6

5

18
27

4

7

2

13

28

.21

9

58

Plus

Balanced
Stock

portfolios of shares of Texas Gulf
Sulphur distributed as a dividend
on
holdings of Gulf Oil.
Selling

576

8,939

National Shares Corp

;

4,017
7,714

-




sales

pede to acquire companies in this:

7,841

General Public Service...

bonds

purchases of Great American and
North River
and several single,

the

15

_____

General American Investors

♦Investment

has

year

purchased 550 shares of Phoenix
Insurance.
There were individual

5,300 shares of American Cyanamid. There were additions to ten-

Blue Ridge Corp
§Capital Administration

tNo

the

of

part

early

fallen off considerably. Two trusts

97.4

652

-

in insurance stocks during

None

•

'■■■

the

Interest;

C. I. T.

1,700 shares of
shown

94.2

Companies:

American International

U. S. &

2.8

4.1

.

American European

\

95.7

None

A

Adams Express

:

91.1

95.5

None

§Wall Street Investing Corp

Lehman

93.8

None

Sovereign Investors

Closed-End

1.0
None

9.3

,

Corp

1.1
None

20.8

England Fund

State Street Investment

94.5

4.1

f

Shares

'84.4

22.5

Republic Investors
Selected American

84.5

95.7

201

-

8,604

-

13.1
None

1,122

Fund..

Investors

12.5
None

S

1,219

1,063
1,718

Trust.

Investors

Mutual Investment

National

86.3

4.5

acquisition of 600 shares of
It still holds

new

Commercial Credit.

ternational

.

94.5

5.1

a

95.0

None

740

Corp., however, sold 13,400 shares
of this finance company and made

89.5

None

2,670

Investment

88.4

13.7

494

commit¬

new

a

Street

State

96.7

5.5

3,026

represented

ment.

91.2

83.6

5.5

these

90.3

None

90.8

2.5

the

was

purchase of 22,700 shares of C.I.T.
Financial by five funds; one of

2.7

88.5

9.7

4.3

in

None

69.3

86.7

4.3

3.0

exception

one

6.2

70.2

5.5

6.7

81

-

Loomis-Sayles Mutual Fund__
Loomis-Sayles Second Fund

'

The

None

None
None

4:9

1,771

A

i

Fund

*

93.5

-

5.7

8.9
10.5 AA

scattered

were

the financial and insurance securir

ceptional
transaction
was
the
complete
elimination from
the
portfolios of both Adams Express
and its controlled American In¬

None

5.0

1

9.7

103

91

Investment Co. of America

3.3
2.6
■■■aa

1,360

Institutional Shares Stock & Bond Gr._

Investors Management Fund

6.0

5,790

General Capital Corp

Incorporated Investors

30.7

7.6

125

First Mutual Trust Fund___
Fundamental

29.8

566

286

Eaton & Howard Stock—_____—■____

Fidelity Fund

169

708

33

Fund

None

6.5

3.1

173

193

Bullock Fund

':■%

4,912

2,234

;

on

Open-End Stock Funds:

Delaware

two of these lots repre¬
complete eliminations from

Transactions

ties.

Open-End Balanced Funds:
American Business Shares

which

category

Buying of C. I. T.
Com. Stks. Plus Lower

Sept.

Axe-Houghton Fund__
Axe-Houghton "B"

Two

portfolios.

Dec.

Sept.

continu¬

a

group.

only issue in the

the

was

trusts

Invest. Bonds &

Per Cent

this

managements nibbled on a
hundred shares of Macy. Bond

Quarterly Periods September and December, 1948
Net Cash & Gov'ts

in

favorite

sented

Balance Between Cash and Investments of 58 Investment

been

has

which

Store
ous

merchandise

Some of the merchandise issues
were

Federated

bought

other

Owens-Illinois

each

companies
Department

shares of Penney. Two

Funds

Funds

Closed-End

Companies.

92.1

Companies

'

i

.

r.

c'

*

>

four

on

Union

trusts

Car¬

decreased

Buying was widely dispersed
light among auto equipment

and

Lite,

Briggs

Timken

Electric Auto-

and

Stratton

Detroit Axle

and

each found

few

purchasers. Major interest
was
concentrated
in
Thompson.
Product
on
which opinion was
a

fairly well divided between three
purchasers and a like number of
sellers. Buyers were represented
by Loomis-Sayles, Delaware Fund
and

Investors Mutual while those

making

sales were Adams and
International, several
companies in the Seligman group'

American

and

Fundamental

*

Investors.

shares of General Motors

added
A

c

and

manufacturers.

4nn

All

concentrated

was

to

six

portfolios;

on

11,were

the

Volume

other

169

hand'
in

creased

Number 4776

Chrysler

the

of

trusts. Half that number of funds

purchased the latter

auto

Aircraft

favorite

parentheses

total

Six

of

two

28,900
sold

funds

American
been

which

popular issue

a

and
the

of

the

portation companies, Eastern

Spread out

ual

a

sales.

Manville

2

1,200

Caterpillar Tractor

3(1)

9,900

International

ments.

pha

Three

and

Lone

liked.

2,400

portfolios.
bore

selling

manage¬

Portland
also

well

Sherwin
three

to

concentrated

shares

of

Among

Nehi

the

Distillers

Cor¬

alcoholics,
Distillers

and

Seagrams were each lightened in
two portfolios. Those transactions
jvhich occurred in stocks of paper
companies were also concentrated
in the
Five

selling of
trusts

International

of

funds

leum stocks

five

and

sue

Gulf,

which

had

TABLE
1 In

•

dividend

"

.

2,262 shares declared

in

Gulf
4

stock

dividend

on

holdings

Oil.

7%
stock dividend
of shares.

5 Dividend
6 3,845
'

on

represented

Mission

by

shares from 5%

7

Major

8

2%

additions
;-clared in own stock.
•

,10 In

dividends

13 Received
Public

for

most

Service

14 Distribution

of

j- iVsk

through
part as
Indiana.

American

on

;

dividend

Light and

Traction.
15 In

Power

rights

'.

exchange

Northern

for

•

of Delaware

States

"A."

resulting

25%

from

stock

.18

2,330 shares represent 10%
stock
dividend on amounts previously held,

l

i

19 In part, represents 2%% stock divi

t

dend.
20 1,425

declared

shares

5%

as

stock

dividend.
21 Includes

pany's
'

,

,

own

but

purchases

sored

by

several

Jock
of

a

trusts

manager.

com

trusts

trusts

spon

group

are

example,

the
Bui

by

Calvin

having the weight
First York Corp. and

Securities

dition

companies

to

For

sponsored

Overseas
site

of

management
unit.

60

covers

sales

or

considered

are

one

survey

one

as

stock dividend in

shares.

NOTE—This

•treated

t

5%

as

are

included

shown

—

14,000

200

&

_

...

Alpha Portland Cement.

Armstrong Cork

3(1)

15,600

General Portland

4(1)

12,900

Johns-Manville

3(2)
3(2)
6(1)

4,800
2,400
3,890
25,200

Lone

__

Star

Sherwin

...

Cement——_

Cement

...

Williams

United States Ply wood1........
American Radiator

None

Simmons

Company
United States Gypsum...

3,500

2

None

on

page.




the

in

ad¬

5,900

2(2)

2(2)

94,000

Transcontinental Gas Pipe Line.

None

None

18(1)

1

3(1) '

3,500

2

16,200

2

3,700
22,400

2(2)
3(3)

Cyanamid

...

Hercules

Powder
Mathieson Chemical

Chemical

American

Corning Glass Works.
Owens-Illinois Glass

___

_

American Home Products

1,500

Colgate-Palmolive-Peet

...

None

.

Electric

None

Master Electric

None

McGraw

2

Electric-

...

3,100

2(1)

550

None

None

General Public Utilities Corp.—

Illinois

None

365,862

None

None

3(2)

28,900

Northern States Power, Minn.16
Public Service of Colorado....

None

None

Public

None

1,000
None

None

9(3)

2(1)

2(1)

129,153
1,300

1(1)

6(3)

28,287

Virginia

78,786

Wisconsin Electric

3,000

1(1)

6(2)

4,168

2(2)

1(1)

2,200

4(4)

15,300

American
National

2(1)

1,800

Wrigley

None

None

General

None

None

United

3

8,500

None

None
None

1

None

None

4(1)

Paramount

Pictures

None

None

4,700

6(3)

None
None

Erie Railroad

None
None

None

17,200

Norfolk and Western
Pennsylvania Railroad

4,400

1(1)

400

Southern Pacific

None

None

3

None

None

5

:

5,200

American Locomotive

5,900

General

5,500

Superheater

Amer.

None

None

American

None

None

None

None

General Railway
Pullman

Retail Trade:

2(1)

4,300

2

600

'
,

1,

'

M'

Steel

/

1

Federated

1

None

4(1)

8,600

None

4(1)

7,600

Sears Roebuck

2(1)

1

9,300

300

None

Bond Stores

9,100

Climax

1,500

Dome Mines

3(1)

4,000

6(1)
9(2)

39,500
9.200

3(1)

2,500

3(1)

14,300

None

None

11,800

1,700
...

1

2

None

6(3)

Molybdenum

Homestake Mining
International Nickel.
Kennecott Copper
Newmont Mining Corp..
St. Joseph Lead

None

None

None

None

None

200

....

Hudson Bay

Mining & Smelting.
Phelps Dodge

400

20,000

2

1,550

1

4,100

1

300

19,600

3(1)

6,100

None

None

KD

800

Products

...

None

4(1)

Sharon

2(1)

4,200

None

None

Steel._

500

3(1)

4(3)

None

...

Steel

None

700

Youngstown Sheet & Tube—
Armco

Corp.

Inland Steel

2(2)
1

4,900
2,000

3

7,900

3(2)

800

1

650

1

1,600
1,900

4

.__

Rayon.21...

American

Cluett

__

Viscose

None

None

3

3,500

._

_

_

Peabody

V--v

2(1)
-

: v

Liggett and Myers
Philip Morris

None

5(1)

________

American Tobacco

None

5(1)

3(2)

19,900

_

22,310

4,500

7,900

__

Tobaccos:

9(3)

2(1)

2,100

.

United States Steel.

Industrial

None

International Paper

1

5,100

1,570

4(1)

Rayonier

None

3,000

None

.

Bethlehem Steel

4,600

3,400

None

None

Allegheny Ludlum

2,150

None

None

...

3(2)

4

5,700

None

None
2

1,800
4,100

3

9,900

None

_

'

Celanese Corp.
Colonial Mills26

4(1)

6(1)

2(1)

Textiles:

3(2)

2(1)

None

'l

'

Stores..

United States Rubber

5(2)

1

1,900

None

2(2)

4,000

Firestone

Miscellaneous:

:

__

200

.

.

_

1,400

...

None

,

2(1)
1

None

'

General Shoe Corp...

None

None

Greyhound

2,500

2(1)

Corp.

_.

SUMMARY
Balance

Purchases

and

Sales

Open-End Companies:

Kimberly-Clark
Shellmar

2,500

7(3)

2(1)

Paper and Printing:
600

2(1)

1,900

3,700

2(1)

Steels:

1

3(2)

2,200
4,400
5,700

3(2)

1,000
1,000

None

None

__

1

27,000

None

Aluminum Co., of America..
American Metals

1
None

None

.

None

5,100

3(1)

Rubber and Tires:

Fairbanks

United Engineering & Foundry.

*

___-i.__._I.

2,655

None

5,300

-

2

900

____

t

Department

None

3(1)
3(1)
3(1)

4(2)
7(3)

_

-.i

None

:

_

Signal

Macy
Montgomery Ward
Penney

1,900
6,500
3,900

'

2(1)

1,400

_

Foundries

None

...

2

1,100
2,300
4,900
4,000
16,700

None

Transportation-

__

None

__

—

Union pacific

Bucyrus-Erie

American Machine & Foundry

—

__

Railroad Equipment:

2,625

Allis Chalmers

5(4)

6,750:

Chicago Rock Island & Pacific..

None

None

2(1)

Atchison Topeka & Santa Fe
Atlantic Coast Line

None

None

11(11)

5,677

None

;

•

2,300

None

2(1)

3

2(1)

3(1)

3(1)

2

6(6)

4(1)

1(1)

2

Equipment

None

None

3

4(3)

Railroads:

National Steel18

20,300

oppo

2,000

3(1)

None

3,900

Tel.—

and

Precision

Republic Steel19

8(2)

2

Loew's

None

3,900
1,500

Share__

Tel.

14,530

2(2)

4

General

2,500

None

3

,

None

1

3(3)
2(2)

International

&

3(2)

Radio and Amusement:

1

<

Bond

22,820

500

.

4(2)

None

Metals and

V

.15,200
39,200

None

Electric

9(2)

None

2(2)

5(4)

15,000

11(3)

None

2

42,300

1(1)

None

2(1)

Pacific Gas and Electric

5(4)

1

None

4(1)

6,450

■

Potomac Electric Power

4,000

None

None
>

28,200
33,500
1,638
20,600
26,000
3,399

Commonwealth Edison
Detroit Edison

2(2)

Pump

6,500

None

2(1)

Worthington

Power17—

Power

None

600

1,500

&

Cleveland Electric Illuminating-

1: 1,300

2(1)
LV
None

Electric

None

None

_

None

None

500

Morse

Edison.—

7(1)

None

(

Indiana16

2

None

Mills

of

California

Fruit

Machinery
•2(2)

Chicle.

Biscuit

Service

Southern

2,500

22,100

Food Products:

2(2)

Water18......

and

2 000

6,000

.

Gas

8,300

None

Corporation

KD
2(1)

10,000

7(7)

13,600

Phoenix Insurance

Chicago

2,000

Co

2

6

Amerex Holding
Associates Investment Co
C. I. T. Financial

22,700

10,000
19,100

None

None

Financial, Banking and Insurance:
3,400

3

Power

1(1)
2

None

None

3,400

Philco Corp.4

198%
41,370

Southern

&

2(2)
None

None

Electrical Equipment:

General

Commonwealth

4(2)

3

3,500

None

None

2,200

...

51,600

180

15,300

None

7,000

Can

Continental Can

4(1)

3(2)

23,890

Madison Gas & Electric14

1,112

Works.

9

American Light & Traction16...Brooklyn Union Gas
15,248 V3 Carolina Power & Light11
Central & Southwest Corp.12—
39,100

10(3)

Indiana

2,900

2(1)

5,002

6(1)
2

7.635

300

2(1)

5(1)

Warren Petroleum

2,050

Drug Products:

15,300

___

2(2)
3(1)
5(3)

9(9>

2 500

_;

Chemical2

Interchemical Corp.
Union Carbide

1,500

8(4)

Socony Vacuum
Texas Co

None

4(4)

4,240
4,500
49,600
13,658
1,200

4

Containers & Glass:

1,400

Petroleum, Ltd

15,100

None

None

3,500

Gas

None

Victor

3

Standard Oil of New Jersey7—
Ohio6

Standard Oil of

13,300
2,250

3

None

2

2,500

3(2)

6,908

None

None

6,300

None

850

1

None

28,200

Standard Oil of California6

14,841
22,000

7,262

6(2)

5(1)

None

Transmission6..

None

5(2)

None

10,900

Tennessee

None

None

1

None

None

12,899

Corp
National Cylinder Gas..
Texas Gulf Sulphur3______

200

2

None

4

Chemicals:

10(9)

None

None

Equipment:

Flintkote

3

2(1)

None

4,938

3(2)

None

.

Corp.-Seagrams

7,450

5

None

6

2(1)

2,800

-

—

Schenley Industries

4(1)

Major percentage from stock split
liquidating dividend on Midwest Corp

17 In
part
dividend.

Coca-Cola

2,200

16
and

-

None

3(1)
11(1)
3(2)

2

500

—

Airlines

2

None

4,345

None

Public Utilities:

Building Construction

•"

i

;

1,800

Pepsi-Cola

stock dividend

represent

purchased

part,

•f

/vy.:

of 2 shares for
Light & Rys

United

of

11 248 shares
12 In

m-V;;,;:

dividend

held

de-

\

<■

stock dividend.

part,

100

from

•

1,000

_.

Aircraft

None

stock dividend

from

stock dividend.

.,r933V3%
each

Corp.

13(1)

Petroleum

Shamrock Oil and Gas

Louisiana Land & Exploration—

None

None

Phillips

800

None

Distillers

5(1)

1,817

2

None

—

National Distillers
Nehi Corporation

3

3 Includes

of

2

15,125

1(1)

American Aviation.

United Aircraft

None

2%% stock

dividend.

4,500

9(1)

International

'

as

6(2)

None

—...

None

None

2%

represents

stock.

.own

2

part,

9,200,

5(3)

Mission Corp
£
9,766Vs Mission Development Co.5
14,000
Northern Natural Gas..

6(6)

1

None

2,800

None

3(1)

FOOTNOTES FOR COMPANION

5(2)

17,200

'

None

decreased

been

5,100

2(2)

Continental Oil-

1

DuPont

throughout the earlier part of the
(Continued on page 36)

None

8,825

4,500

1,100
6,100
7,500

10,900
favored

_

_

Aikman_

Airlines

4(2)

sold

_

...

None

5(3)

trusts

1

None

_

4(1)

Columbia Gas System
Consolidated Natural Gas

Barnsdall Oil

the

about balanced.

were

KD

2(1)

70,500
1,000

None

American

Selling transactions totaled 84 as
against 60 in the third-quarter of
the year. Phillips continued to be
a
prime favorite, nine manage¬
ments
purchasing 15,125 shares;
but selling increased in this is¬

6,700
5,800

7(3)

None

Eastern

in

1

36.3

None

Dow

purchases and sales of the petro¬

Numerals

1,000

_

None

1,500

If additions resulting from stock
dividends, particularly among the
Standard Oil group, are excluded,

None

Anderson-Prichard Oil

Boeing Airplane

6,492

holdings of Rayonier.

None

None

Amerada Petroleum

6,000

1,000

3(1)

while

_

_

None

3,100

Aviation

9(1)

shares

7,900

Paper

number

same

Bendix

of

few companies.

a

sold

_

None

the

ings of Pepsi-Cola, while two also

National

^3 1C0

None

pro¬

cleaned out the last of their hold¬

poration.

4,500

2(1)

2(1)
very

-

Axle

American Overseas Airlines

North

8,100
28,900

3(1)

disposed of

not

italics,

-Sold-

3(1)
2(1)

Beverages:

issues—Al¬

of

of

among

eliminated

900>

8.400 <

5(1)

beverage is¬
Three managements finally

sues.

1,400
5,700:;

3

22,100 shares.
nounced

and

Northwest

added

was

Collins

Douglas

as seven funds

Activity

None

.

_

_

Norte

shares

brunt

Borg Warner
Chrysler

None-

American Radiator

the

Detroit

None

General

were

Motors

Timken

None

Star—were

Williams

General

300

Johns-

cement

Portland,

11,400

favorites, each

and

1

Aviation:

individ¬

many

.

Auto-Lite

12.400

None

6

by

None

600

_

Equipment

Electric

1,100

3(2)

wide list. These

the

None

Harvester

Stratton

&

Clark

3,100

2

was

Briggs

300

6(1)

stocks

finding favor with four

'

1,300

,

3

3

Flintkote
were

in

are

portfolios.

Petroleum and Natural Gas:

Auto & Auto Parts:

large number of

over

balanced

were

their

No. of

4(1)

building

from

Trusts

shares.

a

heavily sold

more

-Bought-

Agricultural Equipment:

2

were
purchases .in

Issues

groups.

completely eliminating the stock

No. of

only carrier to find favor. Five
trusts purchased a total of 8,400

There

management
or

Shares

the

v

more

issue,

No. of

liked

stocks in the group. Among trans¬

or

an

Shares

has

best

two

of

-Sold-

No. Of

2

one

sellers—or sellers exceed buyers—by
making entirely new purchases

managements

Trusts

one portfolio
lightened in another. During
second-quarter of the year it

been

exceed

of

No. of

3

had

buyers

number

Trusts

eliminated from

was

which

in

indicate

No. of

year.

purchased,

30-

1948)

Shares

but Douglas

also

was

the

35

No. of

2

last-half of

(687)

Shares

throughout
Boeing

the

CHRONICLE

No. of

small lots.
bought North

Aviation

FINANCIAL

Trusts

very

also

-

-Bought-

trusts

others

Three

plane manufac¬
purchased
a
shares and only

among

turers.

Transactions

easily the

was

&

Changes in Common Stock Holdings of 44 Investment Management Groups

manu¬

facturer.

United

COMMERCIAL

de¬

was

„

number

same

THE

Balanced

Portfolio

All

Companies

11

5

2

18

13'

6

27

Funds

8

Companies

Companies

Investment

Sold

Stock Funds

Closed-End

Securities—60

Bought

.

Matched

1

10

4

20

28

12

■;

Totals

15
60

36

FINANCIAL

&

COMMERCIAL

THE

(688)

ings. It evaluates everything positions, rather than add to
in terms of dollars and cents

Tomorrow's

who lets his
heart run away with his head
will have trouble explaining
it to his landlord, grocer and

Markets
Walter

Whyte

How

Congress Can Help
Small and Large Business

sary as a

matter of bread-and-butter compulsion to get

financial

advantages.

»!«

>:<

that

1

•

one

break,
breaks,

I

recom¬

Cooper

25;
34,
Foreign 21-22,

27-28,

Bessemer

even

or

(Continued from page 3)

stop

first, Cooper,

The

19.

stop

&

S.

U.

and

...

boils down to the

All this
fact

.jji

#

A few weeks ago

mended three stocks:

United Carbon 36-37, stop

V

•;
>Jc

By WALTER WHYTE=

:/!

>.•
sj«

anybody

milkman.

Says—
==

them.
■■1

and

Thursday, February 10, 1949

CHRONICLE

Since members

?

deprived of the wider participation

are

last, U. S. & Foreign, in under
writings and the wider distribution of
far held above their than would
be possible if they were permitted to

and the

doesn't have so
mean
no
more
of the same. stops; United Carbon broke nonmembers
exposed, and not healed, a bad
To do that a market has to it!* Suggestion is holding on to both and
Recent market cracks have

Rallies

condition.

of

series

a

on a
parity, this setup constitutes a
certainly to the investing public.

ex¬

are

these

-

securities
deal with
disservice

dead and to stocks, still above their
After all there is no legitimate reason either why any
people. This stops, with intention of sell¬
person should be compelled to pay dues (which are tanta¬
doesn't happen overnight. It ing them on a subsequent
mount to taxes) to any association before he is privileged to
There are all sorts of ex¬ may take weeks or months. rally.
engage in all phases of a business. Yet such tribute is pres¬
More
next
Thursday.
planations for the break of It doesn't, however, preclude
ently exacted from current and potential dealers in the secu¬
last week.
In fact explana¬ the possibility of a strong—Walter Whyte
rities industry because of the thoroughly obnoxious and
tions are more plentiful than rally in the interim.
In fact
[The views expressed in this dictatorial rule laid down
by the NASD.
stocks
you
can
lose your a severe break usually brings article do not necessarily at any
Small issues are those most directly affected because
about
a
time
coincide
with
those
compensating
rally.
of
the
money on.
*
*
*
It is on just such a rally that Chronicle. They are presented as the underwriter of small issues needs the additional dis¬
tributing ability of nonmember firms to really do an effec¬
The most popular ''reason" the initiates dispose of long- those of the author only.1
tive job for small business.
for the turnabout is the action
pected, though not to follow

—to sell.

of

to'

dumped their stocks

I

them.

protect

could

give

could

believe.

think

of

a reason

down,

tire out

a

go

lot of

that

and

commodities,

holders

simmer

wish I
I myself

Providing Large

Market Cushion

But all I can

venture .to say that barring this implementation
gives autocratic preferences and a monopoly to the

which

only existing, registered securities association, NASD mem¬
bership would quickly vanish.' •
In

:^

era

an

when

our

(Continued from page 35)

something some¬

is

.We

.

Trusts

system of free enterprise is under

attack, intelligent big business will and must turn a sym¬
body has already thought of year was losing ground as four Illuminating, Electric Bond and
sellers
matched
five
and
International
Tele¬ pathetic ear to the augury of its endangered welfare which!
buyers. If Share
before, and has couched it in
is spelled out by the raw deal forced upon the small fellow
additions resulting from stock dis¬ phone and Telegraph.
more elegant terms than I.
tributions are excluded,
the 11
via the above rules.
.••;
.->■ v?.
funds

week's

last

In

-

column,

Tuesday (they're all
written on Tuesday) I said
that a market which won't go
written

mp on

good news will go down
I also indicated that

bad.

on

Steel

the

split might be the

beginning of major distribu¬
tion.

develop

no

so

This empha¬
is

fast.

fact that timing

the

sizes

things would

idea

frequently more important
than picking them. ' It
also
points some kind of a moral
that once things start to cloud
up, all the so-called funda¬
mentals

It

becomes

other "take to the hills

kind of

a

men"

sj:

:)(

good time

a

give out with plati¬
about values, earnings,
to

me

tudes

an¬

situation.

This should be
for

into

thrown

be

can

basket.

the

yields and trends; "Don't sell
America short," or "Business
is
sound,"
or
something
equally
appropriate ~ calcu¬
lated to appeal to anybody's
patriotism.
*

❖

*

being

isn't

market
chest

bought

stock

interested

in

poundings or flag wav-

on

Amerada

by three, and Anderson-

has

Prichard

and

Coast

unloaded

lightened

13,658 shares of the lat¬

Four
trusts
also
eliminated Barnsdall,

company.

completely

possibly taking advantage of the
recent offer by Atlas Corp. But
not all
managements saw fit to
dispose of oil issues. For example,
although American European
eliminated 1,200 shares of Creole
during the quarter and the two
Loomis-Sayles funds disposed of
their holdings of 5,000 shares in
the previous September quarterly

••

Natural

Members
New

York Stock Exchange

York Curb Exchange

(Associate)

San Francisco Stock Exchange

Chicago Board of Trade
Wall Street

New York 5, N. Y.

COrtlandt 7-4150

Teletype NY 1-928

14

F

Private Wires to Principal Offices
San Francisco—Santa Barbara

Monterey—Oakland—Sacramento

looked

be

to

with favor.
Seven trusts
purchased Columbia Gas which is
sometimes included in the utility

upon

group.

added

Pacific

Southern

pro¬

Northern Natural Gas was
holdings in two port¬

purchased

agements
33 %%
clared

ing

on

holdings
of

.group

Gas

dividend

stock

of

and

a

de¬

was

eliminated

the

to

tune

however,

made

ment with

a

Union

Pacific,

and

also

disposed

Erie

and

interest¬

An

was

the

million dollars

trusts in the Transcon¬
Pipe Line which is being
transport
the product

three

built

to

from the Gulf Coast area in Texas
York

New

funds

were

City.

These

three

U. S. and Foreign Se¬

curities, its affiliate, U. S. and In¬
ternational, and the General Pub¬

amusement

thousand

Thirty-nine

of

shares

Loew's

hundred

were

dumped by four other funds,

Excluding

Equipment, which supplies
the industry were also turned into
cash.

Haisey, Stuart Offers
Atl. Goasl Line Equips.

from

stock divi¬
reorganization
and

simplification
situations,
utility
purchases were concentrated in
Commonwealth and Southern, Il¬
linois Power, Central' and South¬
west Corporation (part of which
was
bought through rights) and
Public

Service

of

Colorado.

Brooklyn Union Gas also contin¬
ued to be
which

in

the

was

purchased by two funds
initial commitments

made

previous quarter.

concentrated

wealth

on

underwriting group headed

An

665,000 Atlantic Coast Line RR.
21/2% equipment trust certificates,
series

J,

due

March

1

1950

$711,000
1964,

to

certificates

were

Edison, Cleveland Electric

annually

Maloney Act takes precedence over the United States Con¬
/
!
Our

ICC

re-offered

by

to
to

yield 1.45% to 2.80%, according to
maturity.

group

members

were

of the

offering

R. W. Pressprich &
Becker & Co., Inc.;

Co.; A. G.
Equitable Securities Corp.; Hornblower & Weeks; Lee Higginson
Corp.; Otis & Co.; Phelps, Fenn
& Co.; L. F. Rothschild & Co.;
First of Michigan Corp; Freeman
&

Co.;

The Illinois

Pollock & Co., Inc.;

Co.; Wm. E.
William Blair

Co.; Burr & Co., Inc.; Hayden,
Miller & Co.; McMaster Hutchin¬
&

son

& Co.;

bqeher

^

Swiss American Corp.;

Stokes Co.

Co.

and

attitude

often

been

concerning the SEC and the NASD has
editorially and is well known.
We

reiterated

believe it to be in the

public interest that both these bodies

be abolished.

Initially, it is possible that it might have been plausibly
argued that there was need for a commission with snooping
and dictatorial powers to determine how the investment

banking and brokerage clock ticked on the theory that, after
a
reasonable lapse of time, such a commission could then
recommend to Congress the enactment of specific legislation
making it

a

there were)
and

which
If

criminal offense to engage in practices (if such
which were not outlawed by the common law
were inimical to the public interest.

the commission,

such definitive

after all these years, cannot draft

legislation, then it is infinitely better'that

all than to continue the
commission to decide what is right or
suits its whims, to the detriment of not only those

nothing be done in this respect at

inclusive. present power of the

the group, subject
authorization, at prices

8

United States.

gathered what cheek was required to
the above section.
Can it possibly be claimed that the
this it may be

stitution?

Haisey, Stuart & Co. Inc. on
Feb; 7 won the award
of $10,-

Selling Mullane.y, Wells &

Common-

enact

by

Other

numerous

From

15,200 shares of General Pre¬

cision

lic Service Corp.

provision of this section is in

provisions of this section shall prevail"

were

two

Feb.

any

Our Constitution is the basic law of the

The

The

If

of by two or more

trusts.

and

following provision of the Maloney Act is startling:

Conflict with any provisions of any law of the United
States in force on the date this section takes effect, the

Line, Nor¬

Coast

Western

of salesmen without their being
forcing their adherence to a code
their choosing or their approval.

registration

"Sec. 15A. (n)

block of 17,200 shares.

folk

invading the

control interpretations;

neither of
The

commit¬

new

a

are:

snooping questionnaires

consulted and

others.

three

from

of

trial system wherein it acts as investigator, prose-*
cutor, judge and jury, and
"

a

(4) the

Pennsylvania also was removed
from two portfolios and decreased
in two more.
One Boston Fund,

of Tennessee

purchases
one

man¬

shares

Natural

Transmission.

Gas

Two

(3)

shares.
Atchison was
in three portfolios and

16,700

folios and introduced for the first
time into three others.

(2) price

years.
sold
by

was

managements

seven

most

Some of these
use

right of privacy;

several

last

transgressions call for its, indictment on numerous

(1) the

limited period

a

to

Fresno




the

portfolios.

producers and dis¬

gas

continued

tributors

dends

New

such

shares, how¬
ever,
had
had
no " temporary
period, State Street retained their honeymoon and were merely con¬
block of 50,700 shares which on
tinuing their unpopularity with
Dec. 31st was valued at over $2 trust
managements.
Five trusts
million.
In view
of the heavy sold
6,750 shares of Paramount
commitments in oil securities, the and four of these completely elim¬
industry's position is of particular inated the company from their
interest.

NASD

other counts.

sentiment

the

of

one

in

of

Exchanges

Schwabacher & Co.

been

nounced

sold 49.600 of the former and six

to

Pacific

and

during

tinental

Orders Executed on

Oil

Shamrock

in

switch

The

Gas, each by two. Brunt of the
selling fell on Socony Vacuum
and
Texas.
Five
managements

by

Securities

were

during the Sep¬
enjoyed a spurt of
popularity among the managers
experienced only a short honey¬

tember quarter

moon.

investment of

Pacific Coast

balance

Rails' Shortlived Honeymoon

The rails which

Continental by four managements,

Consolidated

the

Unfortunately

of

purchasers of this issue. Among
the
petroleum
companies
still

ter

I had

14,841
shares
of
Jersey outweighed

selling

Standard

Co.;
Edw.

SchwaLowberj
- - *

wrong, as

in the securities

In

business but to the country as a whole.

analysis the American philosophy of government,
has made for the high material well-being of our peo-1

the final

which

pie, calls for government by law and not by men. Certainly
our legislators must realize that there is nothing sacrosanct
about the Securities and Exchange Commission that should
prompt their overlooking
in

our

meantime,

In the
is

even

here.

,;

?

before this sweeping legislation

undertaken, there is need of immediate

that Section 15
«*

relief to the extent

A (i) (1) of the Maloney Act

which by imVi

.

plementation

now

once

.

t\

,j\

bars nonmembers of the NASD from par*

ticipation in certain financial advantages
be at

Congress,

this fundamental fact.

view, has a plain duty

deleted from the statute book.

therein set forth*
,

Volume

169

Number 4776

THE

COMMERCIAL

&

CHRONICLE

FINANCIAL

Indications of Current Business
The

following statistical tabulations

shown in first column
AMERICAN

IRON AND

Indicated

steel

STEEL

operations

Equivalent to—
ingots and castings

AMERICAN

PETROLEUM

Crude

oil

Crude

runs

i

(bbls.)

Kerosene

output

(bbls.)

oil

and

distillate

fuel

oil

—

oil

and

Residual

Previous

Month

Week

Week

Ago

that date,

gallons each)

(bbls.

Ago
92.'

1,845,400

1,800,100

1,830,600

1,670,90(

.^an. 29

5,438,850

5,418,950
5,556,000

5,610,650

5,318,23'.

115,490,000

5,888,000

5,434,-00t<

__Jan. 29

17,531,000

17,961,000

18,859,000

Jan. 29

2,588,000

2,354,000

2,526,000

15,986,001
2,561,00(

oil output (bbls.)
(bbls.)
__j..

.

oil

(bbls.)

Jan. 29

7,547,000

7,944,000

8,200,000

7,690,00(

Jan. 29

8,17b,000

8,744,000

9,249,000

9,141,00t

Jan. 29

114,077,000

111;587,000

104,063,000

102,988,001

Jan. 29

at

21,873,000

Jan. 29

at

Jan. 29

22,125,000

24,373,000

11,719,00(

67,432,000

68,746,000

77,151,000

40,607,001

84,462,000

85,075,000

86,284,000

5U,839,0Oi

'

Revenue

y

OF

AMERICAN

Total

domestic

Benzol
Crude

FNGINEER1NG

CONSTRUCTION

Refined

(number

(J.

ol

cars)

Private

.

Jan. 29

679.255

709.585

584.628

726,34."

Jan. 29

599,666

631,290

514,690

632,001

NEWS-

and

Year

Month

Ago

imports

stock

of

183,158,000

187,414,000

170,687,000

!_■

170,242,000

174,581,000

158,736,000

!/—•_—■

12,888,000

11,901,000

28,000

12,805,000
28,000

12.923,000

12,572,000

7,688,000

4,555,000

3,876,000

5,631,000

185,260,000

1841226,000

182,168,000

15,376,000

19,U36,000

1,838,000

75.815

„■

(bbls.)
and

export

(bbls.)

;

zinc

smelter

2,000

of

at

Unfilled

.....Feb.

3

—

$212,157,000

$124,485,000

143,290,000

64,829,000

45,627,000

$123,813.00C
66,640,00*

"

end

Feb.

3

61,043.000

71,797,000

44,628,000

21,737.00C

Infants'

Feb.

3

5,370,000

75,531,000

34,230,000

35,436,00(

Home

78,858,000

57,173,001

—

Month

all

grades

(tons

of

—

lbs.)—'i

2,000

period

at

end

(tons)

of

1935-39

period

index

Women's

(tons)

RETAIL

100

—

JANUARY

*76,696

72,778

70.625

*75,332

26.038

20,848

86,000
55,423

75,858

51,318

67,562

141.9

141,5

PRICE

(COPYRIGHTED)

1:

-

_

_______

.

:

__

__

__

apparel

3

-147,328,000

of

PUBLICATIONS

goods

Men's

Feb.

66,413,000

INC.

—

orders

OF

Piece

output,

lbs.)
(tons

Composite

$209,703,000

INSTITUTE,

50,000

January:

Slab
;

ZINC

INDEX,
3

municipal

Federal

42-gal-

(bbls.)__—

consumption—domestic

AMERICAN

<

Feb.

construction

State

of

(bbls.)

AS

construction...:

Public

•

(bbls.

_

products

Increase—all

,

construction

S.

production

imports

Indicated

Stocks

ENGINEERING

—

RECORD:
Total

Previous

output (bbls.)

oil

FAIR CHILD

CIVIL

Latest
Month

INSTITUTE—Month

each)

Shipments

RAILROADS:

freight loaded

(number of cars)
Revenue freight received from connections

J

PETROLEUM
of November:

pipe lines—

'

ASSOCIATION

AMERICAN

lons

___Jan. 29

fuel

(bbls.)

or month available (dates
of quotations, are as of that date) :

cases

Year

99.3

100.9

in

or,

Domestic crude oil output (bbls.)
Natural gasoline output (bbls.)—

:

output

oil

on

Latest

100.1

—Feb. 13

(bbls. of 42

average

distillate fuel

fuel

month ended

,

Stocks at refineries, at bulk terminals, in transit and in
Finished and unfinished
gasoline (bbls.) at
Kerosene (bbls.) at
Gas

Feb. 13

.

tons)_

average

output

Residual

(net

stills—daily

Gasoline

Gas

capacity)

or

INSTITUTE:

output—daily
to

of

Activity

production and other figures for the latest week

either for the week

are

INSTITUTE:

(percent

Steel

cover

37

(689)

_

apparel
and

..

children's

wear—

__

138.7
140.5

.

_

.

furnishings

141.6

142.3

.

137.5

140.8

140.?

134.1

136.8

135 4-

128.4

130.7

130 Y

145.5

150.2

150.2)

126.6

130.8

130.8-

135.5

140.9

141.1

163.7

161.2

159.&

174.6

182.5

181.7

139.5

141.4

141.4

106.8

108.5

lOg.O

146.1

147.1

145,9

132.9

132.5

132.4

154.1

157.2

149.0

133.8

139.4

139.1

136.5

141.4

141.4

138.9

140.2

140.S

Piece goods—
COAL OUTPUT
Bituminous

.

(U. S.

and lignite (tons)
anthracite (tons)

coke

■'

-

■_

^

...

(tons)

DEPARTMENT

'

10,460,000

*11,460.000

8,800,000

11,190,00(

Jan. 29

653,000

860.000

931,000

1,167,00(

■

;

.

',.

146,700

*158,100

130,100

136,00(

V •"

INDEX—FEDERAL

Cotton

—

wash

"y

Jan. 29

Women's

217

230

23!

204

and

STREET,

and

Feb.

5

5,778,476

5,810,034

5,741,663

AND

INDUSTRIAL)—DUN

&

AGE

Finished

Pig

steel

(per

_

145

136

128

97

iron

(per gross ton)
Scrap steel (per gross ton)

i

1

3.75628c

3.75628c

3.75628c

3.22566c

Feb.

1

$46.74

$46.74

$46.82

$40.17

Feb.

1

$40.42

$40.58

$43.00

__

_

PRICES

caps

_

and

__

refinery

at
at
York)

refinery

tin

(New

Lead

(New

Lead

(St.

York)

Louis)

Zinc (East St.

at

at
at

Louis) at

Feb.

2

23.200c

23.200c

Feb.

2

23.425c

23.425c

23.200c

21.200-

Electrical
China

Feb.

2

103.000c

103.000c

103.000c

94.000i

Feb.

2

21.500c

21.500c

21.500c

15.000(

Feb.

2

21.300c

21.300c

21.300c

14.800c

Feb.

2

17.500c

17.500c

17.500c

12.000(

GRAY

..

_

_

_

_

IRON

U.

S.

BOND

PRICES

Government

DAILY

Bonds

AVERAGES:

__

..

For

—

Average coiporate—
Aaa

—

—

__

_

8

101.42

101.31

8

113.12

113.12

8

118.80

118.80

8
A

.

__

.

.

.

Railroad

_

Industrials

MOODY'S

S.

_

_

....

Group

Public Utilities

U.

Feb.

.

Baa

Group_

Group_

_

.

-

_

YIELD

BOND

..

DAILY

.

Feb.

Group_

Utilities

Industrials

MOODY'S

116.61

114.27

8

112.19

112.19

111.25

109.7!

105.17

105.17

104.48

103.47

8

108.70

108.88

107.80

105.1'

8

113.31

113.50

113.12

112.5(

8

117.40

117.20

116.80

114.6(

a

(short

LIFE

8

.—

Group...

Group:

2.40
3.00

2.41

2.42

INDEX

-2.73
2.82

2.bi

Feb.

8

3.05

3.05

3.10

3.Of

ITY

FERTILIZER

INDEX

BY

ASSOCIATION—WHOLESALE

8

3.44

3.44

8

3.24

3.23

3.29

3.2:

Feb.

8

2.99

2.98

3.00

2.91

Feb.

8

2.78

2.79

2.81

2.7?

and

Fats

1,

Farm

oils

products

,

_

Grains

.V.

422.1

:

—±

Miscellaneous

commodities
.—.-,

and

Fertilizer

materials

.

—

drugs—

—_

——

—

—___.

—,

Fertilizers

machinery—

-

combined—

groups

NATIONAL PAPERBOARD
Orders

received

Production

•Unfilled

:

4i

/

(tons)—

at

(tons)

PAINT AND DRUG
AVERAGE==100_—
:
•;
•
' •
1 '
PRICES

"192(1—UK):

•'All

y'

REPORTER

PRICE

.'

All

'

SERIES—U.

and

'

-''1

Grains

i
i

_

.

——

Meats
,

252.:

240.1

243.5

228.(

169.5

170.9

172.1

178.'

5
5

190.4

190.4

190.6

162.:

Feb.

5

217.9

217.9

226.8

233.

Feb.

5

145.5

146.3

;148.4

155.:

192.4

195.7

195.2

217.:

Feb.

5

143.4

143.4

143.6

137.!

Feb.

5

151.3

151.3

150.8

142.F

Feb.

5

155.6

155.6

155.2

136.!

Feb.

5

210.8

213.1

216.4

221.:

Ian. 29

167,930

182,892

Jan. 29

181,483

191,306
92

304,146

327,700

116,925

196,88'

81,780

185,94'

y,;-

46

METAL

318,673

'

4

141.1

141.5

x

:

PRICES

Average

Lead

.——!

—J

—

.—

.—

...

.

!

—

-—..I—:——_•

,

.

.

Hides and skins...
.*
"Revised figure,
lilncludes 372,000 barrels of foreign crude




—

(E.

147/

——

Feb.

1

158.8

158.8

161.3

164.

Feb.

1

168:9

167.9

175.5

195.

Feb.

1

158.6

159.2

168.1

177

Feb.

1

153.5

152.6

148.'

Feb.

1

143.5

143.6

145.1

148.

Feb.

1

138.0

138.0

137.1

130.!

Feb.

1

178.3

177.9

175.2

154.-

Feb.

1

200.8

200.8

198.7

191.

Feb.

1

132.9

133.5

132.8

138.!

1

161.6

Feb.

1

206.8

206.5

209.9

246.1

Feb.

1

215.5

218.3

225.9

Feb.

241.1

1

194.3

200.4

192.8

225.1

Tin

of

runs.

458,579

2,687,2<!4-

$101,334,000

29,838,000

8,212,000

6,924,000

17,975,000
27,829,000

36,687,000

35,323,000

$257,971,000

$219,223,06^

January:

domestic
export

refinery

refinery

249.:

23.200c

23.200c

21.20Go

23.430c

23.454c

21.532(7

21.500c

15.000?

21.500c

!

London

(per

(pence

Exchange

—

ounce)

per

(Check)
Louis

(per pound)—

New

York

New

York,

Gold

(per

Chinese
U.

21.300c

14.800C

70.000c

70.000c

74.6250-

42.500d

42.500d

45.000#

$4.02750

$4.02750

$4.02679

17.500c

17.500c

11.077c

103.000c

103.000c

94.000s.

997c

102.000c

102.400c

93.500?

price)

$35,000

$35,000

$35,000

of

$89,600

$82,154

$78.30»

41.713c

•11.670c

36.082(5

or

S.

flask

(per

21.300c

•:

Straits—'

ounce

Quicksilver

'

■

•

ounce)

pound)—East St.

(per

^

Sterling Exchange—

Sterling

76

pounds)

1!Antimony (per pound) (E. & M. J )
Antimony (per pound), bulk, Laredo
Antimony (per pound), in cases, Laredo
Antimony (per pound), Chinese, Spot———
Platinum, refined (per ounce)
tCadmium

(per

pound)

"{Cadmium

(per

pound)—

SCadmium

(per

pound)—

—

...

33.000c

38.500c

38.500c

39.000c

39.000c

33.500c

Nominal

Nominal

Nominal

$91,600

$93,000

$66,000'

$2.00000

$2.00000

$1.75000-

$2.05000

$2.05000

S1.7750O"

$2.10000

$2.10000

$1.80000-

"
'

:

15.000c

17.000c

17.0 00c

20.500c

20.500c

20.500c

40.000c

40.000c

Not avail.

$267,274

$292,651

$295,256

I
REAL

ESTATE

AREAS
AND

FINANCING

OF

U.

LOAN

Insurance

of

IN

NON-FARM

S— FEDERAL

INSURANCE

November

SAVINGS

CORPORATION

<000's omitted):

companies-

and

Trust

Savings

Companies

^

:

UNITED

of

lending

STATES

institutions

GROSS

DEBT

fund

DIRECT

*Revised

*vjp.u.r>.

55,111

183,537

164,973

figure.

—

interest

—

but
Port

less than

129,866

$919,631

$977,830

$954,569

$252,656,167
4,659,251

$252,854,401

$256,650,614

4,208,411

4,648,24?

$247,996,916

$248,645,990

$252,002.36?

rate—!

2.222%

tBased

and platers'

137,925

AND

—

balance

Computed annual

more

70,279

132,680

—

debt

the producers'
or

71,02$

238,334

67,915

omitted):

January 31

General

81,246
212,192

Banks

GUARANTEED—(000's
As

77,580

198,182
] 76.000

Miscellaneous

tons

—

2,522,831

pound)—

Louis

Silver,

Net

170.3

2,406,737

37,644,000

York

Banks

164.0

561,660

M. J. QUOTATIONS)—

&

for Month

(per

Mutual

Feb.

1,020,239

642,485
505,937

(per pound)—

Zinc

432,91

's-,

153.6

1,148,422

606,380
493,447

$118,358,000

Savings and Loan Associations
142.6

135.7

TO

payments'- Li—

—Month

• "

144.it

135.3

LIFE

•Individuals

C
—

OF

—————

Copper

10:

LABOR—

—_

——:

Livestock ——

.

OF

than farm and foods—

metal

.Special indexes—
<-•

DEPT.

———

products—
materials.——

other

241.9

238.3

•; ••

j.

'Building
All

S.

:

——

Textile products —_
Fuel and lighting materials
Metals

282.(

Feb.

Feb.

*

••

;vy .'

commodities other

318.:

209.2

INDEX —1926-36

*.
•

products—

Foods

307.5

202.5
237.2

Feb.

Jan. 29

:

NEW

commodities/

Farm

312.5

201.2
229.2

-Jan. 29

<•

%

<t'-

260.1

311.5

PAYMENTS

Aluminum, 99% plus, ingot (per pound )__—
Magnesium, ingot (per pound)

activity,—

orders

WHOLESALE
•>'

242.(

240.8

5

131.0-

144.6

November:

of

endowments

**Nickel

OIL,
,

184.6

237.4

ASSOCIATION:

(tons)

Percentage of
-

171.5

232.0

5

.'

materials/--—.1.-.

Chemicals

All

166.4

5

Feb.

——_

Metals

Building

Farm

5

5

—

Textiles

235.f

Feb.

—————Feb.

131.1

month

of

—

Silver, New York

224.2

Feb.

_—r—Feb, .5

,

Livestock

end

dividends

St.

Feb.

at

sale

benefits

Silver and

Cotton

123.7

1,099,827

INSURANCE—BENEFIT

Total

COMMOD¬

219.7

124.0

3.44

GROUPS—1935-39=100:
218.2

158.7

123.8

COM¬

(short tons)

use

INSURANCE—Month

New

NATIONAL

tons)

own

for

OF

2.71

Feb.

392.4

158.2

Policy

3.03

2.71

384.8

150.8

151.0

3.00

3.00

2.80

370.1

150.7

38,133,000

2.71

8

144.9

149.5

Surrender 4 values

2.80

Feb.

_

.

(DEPT.

(short

Electrolytic,
Electrolytic,

COMMODITY

120.5

144.9

18,937,000

8

3.48

120.8

142.6

Annuity payments

8

•

131.5

119.7

November:

of

tons)

Matured

169.9

131.5

2.41

Feb.

*

_

..

POLICYHOLDERS—INSTITUTE

Death

Feb.

Feb.

Public

115.8:

8

8

Feb.

:

Railroad

118.40

169.6

_

tons)

orders

_

_..

producers'

Disability

Average corporate—

;

117.00

110.7C

AVERAGES:

Bonds

Government

117.00

For

Unfilled

132.5

164.3

appliances

(short

sale

100.6?

112.56

101.09
.

_

CASTINGS

Shipments

_

_

_

household
....

_

______

MERCE )'— Month

MOODY'S

_

_

...

21.425(

128.1

132.4

v
_______

Luggage

132.9

130.0

wear—

__

23.425c

_

_

coverings

155.9

132.9
128.1

....

_

Radios

_,

_____

_

Underwear

_

overalls

children's

155.8

130.6
126.8

148.3

_

...

_

_

Furniture

QUOTATIONS):

copper-

Domestic
Straits

M. J.

.

_

__

_..

including

Socks

Floor

Electrolytic
Export

(E. &

_

..

neckwear

and

and

Infants'

$40.83

...

_

Shoes

BIETAL

_

____

Shoes

Feb.

....

_

_

Clothing,

lb.)

_

apparel—

Shirts

PRICES:

_

__

Underwear
3

L

__

—

_

_

Hosiery
Feb.

COMPOSITE

__

brassieres.

_

Shoes

5,412,361

BRAD-

INC.

.

housedresses.

and
..

Hats

IRON

__

Underwear

kwh.)

(COMMERCIAL

comfortables

_

Furs

Men's

FAILURES

_

apparel—

Aprons

EDISON ELECTRIC INSTITUTE:
000

__

goods

I

Hosiery
Corsets

(in

_

Sheets

SYS¬

RESERVE

AVERAGE=100

"'Electric output

silks

Domestics—

Blankets

■'

4

SALES

Jan. 29

Jan. 29

j.

STORE

TEM— 1935-39

and

Woolens

coal

Pennsylvania
Beehive

Rayons

BUREAU OF MINES):

on the producers'
quotations.
SBased

carload lot packed

coibourne,

N.S.

U.S.

quotation.
on

in

2.215%

{Based

on

platers' quotations.
cases,

duty included.

the

2.154%
average

of

UDomestic, five

f.o.b. New York.

38

(690)

both

tween

Basic Aims of

parties.

But

the

on

Thursday, February 10, 1949

CHRONICLE

FINANCIAL

&

COMMERCIAL

THE

.

great issues which divide us from

without

and

credit.

regard

political

to

And by that I do not mean

went

back

of

old

the

to

gold basis,

that it represents 50.1%
outstanding Federal Re¬

except
tne

badlythere can be no supporting half-baked,
There can be urawn laws or evil inventions liRe serve notes and Federal Reserve
the
Murray-Wagner-Dingell
Bill deposits, and the total reserve
compromise with waste. Theresuch
can
be no compromise with;in-; which would reduce our doctors that must be held against
to government servitude.
I pro¬ notes and deposits is 25%, so that
competence.
There can be
no
compromise pose that, opposing every totali¬ there would be only $12 billion
with efforts which would aban¬ tarian device, we fight ever to en¬ in available gold to meet the $6 J
don us to the tyranny of the few, large the area of human freedom. billion, presuming that it might
whether within or without gov¬
That is the historic role of the be presented by the holders for
ernment.
There can be no com¬ party
of Lincoln,
in honor of gold.

Democrats,

the

honest compromise.

Republican Party
(Continued from page 14)
closer
In

into

little

a

orbit.

Communist

the

short

than three

more

the fruits of the most glo¬
victory for freedom in the
history of the world have been
turned to bitter ashes by the in¬

years,

rious

competence of this Administration.
Similar

at
is to
be left in the hands of this Ad¬

home

if

perils

threaten

social

our

us

progress

ministration.
You know,

it is a curious thing'
that the same objectives of full
employment and social security
are
claimed as their purpose by
both

political parties in America,
both the Socialist and non-

by

petence and skill in the fine art
of
government
can
we
make
progress which will not break the
backs of our people with taxes.
We are trying to make progress
under a government that does not
to realize that the American

seem

people are entitled to spend their
own earnings
to the limit possi¬
ble—instead of having them taken
away by government to be squan¬
dered on sheer incompetence.
There

are

Europe, and were claimed by

ern

the Hitler Government.

radical

and

the

slaves with chains around
their minds and clanking on their

ing

as

Others *are

heels.

with

men

their

their

minds

all

with

and

soul

our

souls

that I mean a
system under which man is free
to work at the kind of a job he
wants—a

and

skill and

unfettered

to

and

slavery lies in how
advance toward your goals,

job which fits his own
a job or
wants—free

business—free

to

start

create—free

to

intend

lead

to

where

into

us

everything

system

a

gets from

man

cradle

tunities

a

citizens—not

its

a

of life in which the individ¬
ual lives to serve as a cog in the
way

to grave is doled out to
This is
by a ruling political clique.- machine of government.
I see nothing in the program of the heart of our political faith. It
this Administration to lead any¬ is the thing this present Admin¬
istration does not believe in, as
one to believe that they desire to

him

avoid

kind

the

home

your

nation

of

or your

job,

where

your

right

their

education, or even to a bread
card or a pair of shoes all depend
government.

That

is

the

•*.'

great

fundamental

difference between the Democratic
the Republican parties.

and

Aims

to

Be

Achieved

Our

and

in social
believe it can

we

be achieved under a flour¬
ishing, competitive system of pri¬
vate enterprise where every hu¬

only

right is expanded.

man

We

are

utterly opposed to tyranny in any
form, whether by business, fi¬

labor

nance,
We

or government.
opposed to delivering

are

the nation into the hands of
group

who will have the

any

power

to

tell the American people whether

they

may

ter or

As

have food

or

fuel, shel¬

jobs.

fight for the view that
government must protect the lib¬
erty and security of our people,
we should fight also the view that
any of these fundamental rights
flow from the bounty of any po¬
litical clique or party which hap¬
pens to control government at the
we

moment.
We

and

know

believe

that

we

for the advances of social
only through more effi¬
cient, more economical and better
managed government. That is an
idea that has been completely for¬
gotten in our Federal bureaucracy
for a great many years. It is the
kind of government that nobody
under 30 years of age can even
can

pay

progress

remember

Yet,

in

United

trying

we are

make

the

those

as a

advances

nation to
a

political spoils system which has
grown

ally

and

out fantastic¬

spread

in all directions.

There

is

enough

demonstrable

to

pay

TrO

for
that

all

of the social ad¬
proposed by our

were

Again, let me be exact and spe¬
cific. The President has asked the
Congress for the right to take
steps which would lead toward
of various in¬

the

is

That

to

route

have
to

to

get

see

industries.

the

nationalized
Nazi Ger¬

should

But

same.

did

nations

Other

many.

So

doing

are

follow

we

Right
States

today, in the United

now,

have 7%

we

world. Yet, we are
free

system

kind

or

about one-

in the
making by the
steel of every

of all the people

fifteenth

than

more

all

other' nations

the

of the world put

together. We are
making by the free system more
automobiles than all the other na-!
tions

the

of

have

We

world

put together.
telephones—and

more

almost everything else

by the free
system than all the other nations
in the world put' together.
And
yet, this present demo¬
cratic

Administration

wants

to

the techniques of all the na¬
They talk

copy

tions that have failed.

nationalizing.
Well, that's like putting just one
drop of strychnine in a glass of
perfectly good milk.
It's good
milk until you put in the drop of
strychnine and from then on none
about

just

that

of it is any good.
Who

is

going to

borrow

or

to start

a

$1,000,
$1,000 from his uncle
save

a

little business,

a

filling station,

or

or build
anything else,

if he knows that government may

build

one

free, and

across

the

street,

tax

him out of business?

run

Belief in

Social

We believe

achieving it
by trying to

down to

Progress

everlastingly in

There

are

are

many

in

fires of

direc¬

build for

we

human

liberty and un¬
leadership won vic¬
tories which will resound through¬
out all history.
cause

-

his

wise

is

time

It

historic

returned

we

role.

The

to

world

our

is

in

desperate need of

stration of faith that free systems

their

hering faithfully to the principles

security,

and

for

their

for

their

comfort

individual

oppor¬

tunity.
v

better than slave systems. Ad¬

are

repeatedly stated in
let

I propose

that

we

support every

which

us

party
behalf

these ends, regardless of its origin,

where.

in

progress

human

of

platform,
again—the

our

forward

move

of

achieve

will

fresh demon¬

a

America

freedom

in

every¬

as

And we believe in
free men and not

copy

many

areas

areas

of com¬
There

of agreement be¬

fair chance to take and whether

should

back

go

standard

the gold
face the

on

knowing

we

possibility of having to meet such
a, situation. Under normal condi¬
tions
if there
are
any
such
—

things

as

presume

normal conditions — I
that would be a justifi¬
could

able chance to take and we
do

those

much

too

without

so

But

anxiety.
going

advocate

who

back on the gold standard imme¬
diately admit that it would not be

wise to

do

Are

if

so

at

we

question

and

war.

is

There

.

no

not at
are
engaged in
"cold" war, and

we

called

at

were

we

war?

about it;

what is
not

a

are

we

"cold" war but we are
in what might be called a semi-

Constitutional Check on Tax Powei
(Continued from first page)
taxation

is

due

to

number

a

of

''First, the loss of political
by that fraction of the

power

population which carries the
jor

portion

the

of

ma¬

burden.

Although exact figures are diffi¬
cult to obtain, it is probably true
that

the

half

topmost

5%

the

total

of

lor

accounts

payers

tax¬

our

than

more

the

of

revenues

Federal Government.
"A corollary is the shift of con¬
trolling p o 1 i t i c a 1 power from
those

who

those

direct

pay

who

pay

taxes

to
second

A

none.

corollary is the great increase in
the political power of those who

job-holders,

vet¬
erans, farmers, the aged and the
ill, and the unemployed far out¬
number

the

them.
of

taxpayers

other

In

based

power

one

mate

group

in

and

decade

to

our

econ¬

structures.

concept of the

new

the

during

half.

a

last

Consti¬

The

stipulates that the govern¬
have power to levy
taxes in order to meet its neces¬
sary costs.
taxes as a

Our founders regarded
of

source

embellished

by

revenue

un-

number of
our

taxation

as

today

regards

instrument

an

equalizing incomes,
controlling inflation,

a

means

the social revolution which under

fellows who spark

our

progress.

"

"(2) Their
rewards

position

must

be

and

their

safeguarded

against the punitive and destruc¬
tive inroads of

welfare state.

a

war.

Why? Because subversive forces
have
been
infiltrating into our

country for years, and they have
held kev positions in our govern¬

They are in the churches.
in the unions. They are
in the universities.
They are in
innumerable social organizations.

They

are

What

is

their purpose?
Their
is to destroy the private
enterprise system and to destroy
our form of government. How do
they work? They work underhandedly and in ways that are
ruthless. As I recall it, in 1932
purpose

when'

1933

and

"(3) Some upper limit shoulc
be
imposed by constitutional
amendment, if practicable, on the

the

tax to which individuals and

gathered to

porations

be subjected.

may

the Sixteenth Amendment

cor¬

that

I

heard

outsicie

When

would

be¬

When

was

exceed

5%

of

a

"Let

Congress

now
such

50% in time of vyar.

run

they

was

in

here

place an
a tax, not

When

New

their currency, and

store
many,

of plain justice and national
vitality,
Congress
should
alsc

fusion

est

abolish

double

the

taxation

stockholders and

corporate
limit

on

corporate taxes.

"As

a

salutary

of

place

corollary,

sary to
all citizens

compelled

vote

who

to

pay

should

income

some,

sible

caused

for

by

subversive
impos¬
so, that is,

the

it absolutely

them

do

to

little

a

-

question is,

the

United

are we

States

justified
America

of

in going back to the

today

coin standard when

forces

that

against

tax, however small."

in Ger¬
will find the con¬

stability except for

,

The

in

you

made

to hold

as

be

too,

forces

time.

income taxes are neces¬
support the government,

as

look at France and
they have tried to re¬

you

how

see

In the inter¬

long

time

where

bank?"

come.

a

that

at

being made on a.
York, men
those in the lines and
said, "Now, are you ever going
man's in¬ to put any more money in a
a

went up to

preposterous the sugges¬
that the income tax might

ever

meeting

figure out how they
develop runs on banks.

ing debated in the Senate, Borah
tion

about

on

runs

one

Detroit

of

held

as

had

we

banks, they had

Bank

we

gold

have these

exercised

being

are

us,
that
can
develop
their methods confusion

through

false title

of progress

is

now

(Continued from page 5)
mand

payment

ately.
In

of

the

is

individualism

collectivism.

record

shows

the
The

that

our

the

from

and

due to

pose we

excep¬

in

derived

woman

prospect

of

fame,

gifted citizens, fired the

is

our

of

growing youngsters.

this

own

full

talented

exploitation
members

of
by

they were
permitted to keep, that accounts

great

rewards,

the

American

exert

supremacy

society and the

appeal

other

which

current

upon

of

power¬

which these. shores
the less fortunate in

parts" of the world.

"If the

$84

billion

amount to

na¬

realized in
varying degrees by thousands of
amibition

have

American

prospect,

more

we

great

of

wealth and power.

"This

And

and take

progress has been
the stimulation which the
man

and the
if they

holders could demand gold

exaltation

concept of

tional

tional

currency,

deposits. So altogether
there is about $167 billion that
could be demanded in gold very
soon.
But let's cut
that down

repudiation

and

these

them immedi¬

have $28 billion

we

outstanding

in demand

taxation

on

»

addition,

chose.

new

induce

Inopportune

United States.

"Implicit in this

misunderstanding, that might
the holders of $67 billion
in bonds, currency and deposits
to
apply for gold? That is the
question. I feel quite certain that

Return to Gold

taking place in England and the

for

the

small

for

of
a method for
maintaining full employment and,
finally, as a tool for stabilizing the
business cycle.
These neo-liberal
concepts are an essential part of

our

sheet,
that

of

civil

a

and

"Government

of

genius

ideological

any

frills.

the

balance

and

energy

to another with¬

shall

ment

American

only

ment.

"(1) We must recognize as the
most important asset in the

in time of peace or

which has prevailed

Washington

our

to exceed 25%

political

"Second, the
tax function

in

on

regard for the ulti¬

our

changes must be effected
concept of taxation.

absolute limit

consequences

and

pay

society is to be preserved, radical

assets

'shift

to

used

too much

who

words, political
a straight count

on

is

votes

ful

government.

a

we

peace,

'y:-

■

question is whether that is

The

tonight.

struggle to advance the

a

of

meet

we

formed in the hot

the betterment of the whole Amer¬

"It
so¬

serfdom.

promise

we

and' keep

that

in

memory

Our party was

ican people, through every legiti¬
mate
device of
government for

little

a

party

a

tution

them down that trail? Let's see.

all the nations
which have dragged great peoples




I propose

omy

Russia "has

Soviet
her

district leader

your

job.

a

ting the executive and legislative
branches of government in Re¬
publican hands. Meanwhile we
can
fight for part of it, at least,
while in the opposition.
degree of com¬

as

ahead

steadfastly

tion.

tyranny, in which all employment
from government and yous out

a

that

faces

whose

der

presented.

our

them

flows

party platform. We will only get
rid of that waste, finally, by get¬

a new

are

propose

turn

from

cial progress.

Only with

they
I

be the guise in which

may

"Government

waste in this Federal Government

vances

silky

receive part or all of their income
from the State.

Industries

States.

under

prove.

programs

Opposes Nationalization of

dustries.

believes

party

progress

and

programs

the nationalization

Under

Competitive System

,

legislative

their tax

to

on

talitarianism; however smooth and

to

all

of

to¬

to factors," Lawrence said.

benefit society
you
use of his talents—
whether you go forward under a and free to keep enough of the
free
system
or
march on
the proceeds to provide incentive to
treadmill of a slave system.
others to go and do likewise.
I see nothing in the program
I
mean
a
way
of life under
advanced by the Democrats which which government exists to pro¬
is opposed to the belief that they tect the rights and equal oppor¬
produce—free
by the ablest

of

say

me

talent—to seek

he

by govern¬

use

instruments

the

of

quit one—free to seek the edu¬

cation

between

promise with the
ment

proposition

And since that word is so much

abused, let

free

difference

whole

freedom

us

as

by the State.
The

that

basic issue be¬
is that we believe with

our

high

going

heads

and

all

or

group. A

pressure

tween

this

over

in

scheme

unsound

win

to

order

party and the

our

hearts in human freedom.

Everybody claims to be going to
same place.
But some are go¬

.

differences be¬

Demo^
crats. They are willing, for po¬
litical reasons, to play with any

tween

Socialist Governments of Europe,

by the Communist nations of East¬

more

no

only the E Bonds which
$32 billion. Then sup¬

add half of the $28 billion
outstanding, or $14

currency

billion, and suppose we take onequarter of the $84 billion out¬
standing demand deposits because
the corporations own an impor¬
tant

part of this'total; that would
$67 billion in the hands of

subversive

people

emergency

inclined to

who, in case of an
or anxiety, might be
demand gold."

question is, what have we
in gold to meet such a demand?
Our government has $24 billion
in gold, of which about a billion
The

is free but the rest is represented

by

gold

certificates

held

Federal Reserve System.

dynamic quality of our .billion

would

be

by the
This $24

available

if

we

be

the
United States go on the old form
of gold standard. But the Com¬
mittee

to

see

believe

not

does

should do

that

we

at the moment. This

so

Committee, however, is one of the
committees
my

of this Chamber,

experience has told

the

members

who

are

on

is

It

men.

this

of

Chamber
are

intelligent

firm -conviction,

my

regardless

that

therefore,

and

that

me

committees

its

patriotic,

Wonderfully

of

whether the members of the com¬
mittee
are

Finance

on

they

Currency

be new men who may

may

in

come

later

time
and

peace

right

seems'

in

serve

when

toward

reached

able

to

that

committee,

the

and

present members or whether

leave

the

would

forces

pleased

much

very

the

that

on

have

we

and

and

interest

when
desir¬
of

our

country, the committee will of its
own

volition decide to recommend

to you
ferent

than

that we go back to a dif¬
character

we

are

on

of gold standard

at the moment.

Volume

169

Number

4776

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

dollar

Why Shonld Ik
(Continued from

to

4)

page

for

employing
capital
aggres¬
sively.
Many such funds, over a span
of

have

capital
of
shareholders
by
an
amount equal to, or greater than
the
increase
in
living costs in
those years. They have produced
regular quarterly income averag¬
ing 3%, or 4% or 5% or more, on
capital invested—depending upon
the particular investment fund's
income objectives.' This is what
aggressive ' use " of
capital
has
years,
their

meant

for

thousands

this

to

mutual

of

re¬

subject again:''There

is another bit of background that
I believe will interest you—the

implications—for you—
of the ageing of our population.
Advances in medical science, in
sanitation,
in / living Ui standards
during the past half century, and
especially
during
the
past
20
years, have increased the life span
of the average American by onethird.
The child born

today has

some

child born

1900 had

67 years.
life

a

pectancy

just short of 50

For'

and

bracket

35

ex¬

years.
the age

in

women

to

life
The

a

44 years, today's
1,000 of population

death rate per
is around 5; in

it

1900

In

10.

was

the

1,000; now it is 16 per 1,000.
'■Now, the man of* 40 can

look

forward to living 33 more years—
if his life span is average. The
of

man

50

has

25

"to go."
The man of 60 can expect to live
to 78. Have you placed yourself in
this picture?
And if these are
married

But

concerned

are

for.

At 2%

pounded

that

on

of the

average,

out¬

women

same

by about

age

of per¬
called

dollar

a

14 years./

cost

of

the

increasing

mutual

desirable

fund

and

This modern

together

active

more

planning
of

old

that

-1945

as

about

dependent
Or

needs

out

of

is

the

savings

-subsistence.

by

an

of

average

4%,

I've

last

one

the

recently
life.

of

segment

added

And

things

of

Both

the

accumulation

sonal wealth and the
and

useful

of

What

are

were

that

like.

I

where

know

out of five

want to

you

place yourself in this picture, but
let

me

go on.

Government

.

social

security

payments—for those covered un¬
der this program — contribute
somewhat. toward

tht

financial

heeds of retirement years. But

involved

amounts

the

modest in¬

are

deed, in the light of current-day
living
costs.
If
you've
been
"'covered'-, under social security
for

40

"65,

under

years,

ments

$84

arrive at age
benefit pay¬

you'll get no more than
month. That's absolute

per

for

'And most of

Not

..

and

current

/maximum

tate

so

a

and

man

wife.

here will get less.

us

many

ago,

years

an

es¬

retirement fund of $30,000

or

would have provided $3,000 annu¬

ally for 12

assuming a re¬
gradual exhaus¬
tion of the principal over the 12year period. Today, to provide a
turn

of

years,

4%

and

,

similar standard of living,,-at least
$5,000 annually would be required.

And-

return

to

2%-2y2%; Thus, the

000

estate

only
i

the

on

This

is

the

of

not

now

^last"

for

than six years.

more

conservative

a

$30,-

same

measure

extent

financial
needs

would

little

a

principal

involved would be closer

amount

to

to which personal
planning for the future

be

forget

absorb

large

part

expanded. / And let's

that

because

of

the

than

adequate

even

were

costs at the levels of the

Here again, solutions are
cult
ones

to
are

perceive.
a

The

living

1930's.

diffi¬

obvious

greater personal effort




started by saying I'd discuss. It is
not that the mutual
fund, as an

s

be

investment .afield

tjhat

I

institution, is new. In one form or
another—here and abroad—it has
existed for

over

the

of

surge

funds

profits.

is

public has

100 years.

a

in

interest
recent

of

But

mutual

origin.

invested

The

than

more

r

income taxes.; During the billion dollars in this type of fi¬
1920's, the maximum normal nancial
institution
in
the
pas'
tax rate was 5% and the maxi¬
eight years. And I believe this if
mum surtax
rate 20%, the latter only the beginning.
The powerful
applying to taxable income in ex¬ forces influencing our persona
cess
of
$100,000.
Basic exemp¬ financial lives—which I have dis¬
late

tions

higher than presently.' cussed briefly—may be one of the
Until the 1930's, dividend income
things that has made hundreds ol
was altogether exempt from taxa¬
thousands of people stockholders
were

tion.

in

But there is no point in being
nostalgic about the days when one
could
keep most of what one

forces

made.

earned

or

is

with

The

hard

these

viduals

Let

fact

fund

funds—even

did

if

the

me

Out

sour.

recognize

not

mortgage turns

a

the

of

earnings

they

receive on their investments, they
likewise set aside amounts for the
same

For

reserve.

that

reasor

they cannot pay out all they
for

accounts

small

rate

bank

deposits

rate

and

interest

of

computations

savings

on

moderate

the

which

on

earn

relatively

included

contract is

ance

the

return

of

in

the

insur¬

an

based.

of

any

its

shareholders.

process of putting money
work in a mutual investment

to

company

does

posit"

a

or

not

involve

contract.

the

It

"de¬

requires

except

perhaps

government bonds.

cash

anc

The value

o

the mutual investment company'.1

shares

fluctuate,

day by day, ill
changes in value

accordance with
of the company's

times this value
the

cost

the

of

investments. A<
be less than

may

shares

the

to

vestor, and at other times,

tain

profits

most

It

ticipation

profits

in

and for the

its

capital,

in¬

more

companies.
Ordinarily, al"
profits on security holdingf
paid

the form

of-

shareholders

to

selves
tions

the risk of fluctua¬

assume

the

in

value

was

and

the

of

com¬

investments.
This is re¬
flected
in
the
value
of their
While their

operations and the

regulation of their operations
similar in many details,
ties offered by savings

obviously serve dif¬
The individual

companies

purposes.

probably
should take
of all three.
He canrtl

and

can

ir

"capital gain') divi¬

previously

observed

insurance

companies

are

the facili¬
banks, in¬

companies and investment

surance

place part of his savings in banks
for a/ "basic reserve."
He can

buy insurance for family protec¬
tion.

He

investment

own

can

shares either for general
estate-building purposes or more

company

specifically for .combating the ef¬
fects of recent trends in American
life

which,

pose

as

have seen, im¬

we

the prudent man what
a compulsion to use

upon

Clifford Grischy

Joins
Field, Richards & Co.
(Special

to

H.

Chronicle)

Financial

The

OHIO—Clifford

CINCINNATI,

banks

par¬

income

pany's

dends.

As

and

opportunity to enlarge
shareholders them¬

capital aggressively.

also

re¬

from investments of the company

quarterly dividends on the shares
usually at a rate greater than i.f
paid by savings banks or insur¬

are

not

In return for full and direct

is well-nigh

net

does

income for itself.

or

Income is received in the form o^

Grischy has become associated

limited in the kind of invest¬

are

ments

they may make.
By
investment companies

trast,

con¬
car

invest in bonds with higher yields
than those which are "eligible'

for

bank

invest

investment.

in

banks

tent).

to

Of

very

that

income

the
invesJ

may

thus

and

large industrial,
road companies.

ex¬

exclusively

or

stocks
share

which

companie;

company

substantially
to

ca»*

limited
three, only

a

the

investment

common

(and

insurance

but

may,

do

not

may

life

some

They

preferred shares which

these

is, in terms that are familiar
and, more importantly, in

on

major exchanges and nothing

more,

take

tell you what a mutual

or

income

excess

shares.

The

indi¬

such.

as

instance, when

ance

in1 the

In this century,
lyl3, there were no per¬

in

the

ir

under¬

profits

of

utility and rail¬ /////;%//■/
It is to be noter

from

'•

■'J". 'Z*

;

Clifford H. Grischy

stock

common

investments not only is more lib¬

with

eral than

Central

Field, Richards & Co., Union
Building.
Mr.
Grischy
ever-present creditor for most of terms that will be familiar to the investments, but usually increases was
formerly a partner in Horan
us, it is far more difficult for an
in
times
of high living costs.
average person.
Everyone knows,
This & Grischy and prior thereto was
individual to accumulate wealth" when he deposits money in a sav¬
is
because
corporation earnings with Edward Brockhaus & Co.
than it used to be.
ings bank, that he can expect to are likely to be good then, too.
David
Weinig has also been
that

Uncle

Sam

now

an

And because of recent trends in

•

to

you

get back the

lars,

country, the constructive employ¬

est rate of interest will be

ment

of

more

difficult too.

wealth

feasible

for

abreast
in

our

trends.

leaves
and

many

It is

most

of

us

ways

own

of

the bank for

When

longer

no

to

keep

business developments

of

nothing

is in

communities, to say
national business

demand, and that

on

of the money.

use

is written,

the

insuring company

obligates itself to
number of

his

or

a

to

the

dollars

beneficiaries

observation.

For this

and prudent

investment

reason

of

could

means

for the

personal

funds

be

"watched")' are
for most people a less than satis¬
factory way to put money to work
today. '/.*
Under
not

the

circumstances

surprising

it

is

that

people have
securities for the in¬

to

of

funds.

Present

tax

laws alone point in this direction,
for

profits

other

-

treated

insured

in

exchange
Modern living somehow for
the
payment
of
specified
less time for such study •premiums to the
company.*

others, local real estate, mort¬
gages, small business enterprises
and the like, once regarded as a

(they

specified

pay

their

of

Because

dollar-for-

and

proper

contract

on

capital
more

ordinary

securities—as
transactions

—

on
are

kindly taxwise thar
of
income.

sources

*The

of

terms

calculated

are

(1)

The

these

on

insured

insurance

an

is

specified number of

contract

assumptions:
live for a

likely

which

of

(less

the end of the

contracts

all

include

based

are

on

indicated by
during these years

insurance

the

company

will

the

necessary

of the

will

that

his

not

interest

all

beneficiaries

amount of

all

formula,

it

will

be

to

income,
is

de¬

com¬

receive

its

that

these monies

premiums
pay

above

insurance
in

he

outstanding

acquire is

may

feature.

It car
take advantage of the opportuni¬
ties to increase capital that are
provided by the long-term trend
in

stock

values, by up¬
swings in the business cycle, by
changes in the fortunes of indi¬
common

vidual

This

industries

is

and

"aggressive"

of

produce
while the

the

"betting" tha*
premiums, and

will

receive

the insurance anyway.

the

to

Financial

The

ILL.

CHICAGO,

—

Chronicle)

Lorraine

B.

Perrin is with Blunt Ellis & Sim¬
mons,

208 South La Salle Street,

members

of

the

New

York

and

Stock Exchanges.
Miss
Perrin was previously with Wal¬
Chicago
ter J.

Fitzgerald & C.o.

cap¬

Two With A. G. Edwards

ital.
You
funds

may

ask

are

so

why—if mutual
desirable

—

you

haven't heard about them before
or

Blunt Ellis Adds
(Special

companies
use

haven't

them.

heard

The

more

activities

of

about
these

as

essentials

In
effect, the
is "betting" that it
premiums called for
and
perhaps more, and

payer

its

it

the

scribed.

employ

investments

period.
Many insurance
savings programs but

the

to

of

funds are carefully regulated un¬
der Federal and State laws—just

pany

able

flexibility afforded the in¬
vestment company as to the kind

years, as

operating expenses and reserves), plus
compound interest on the premiums, will
equal the face amount of the insurance
at

The

to

mortality tables; (2)
he will pay insurance premiums; (3)
total

added to the firm's staff.

Flexibility

mod¬

a

paid by

life insurance

a

that from bank-quality

number of dol¬

same

the social and economic life of the

turned

less

Funds

All

more important is the
Federal taxation of in¬

of

vestment

today be

Mutual

Probably
effect

the

would

otherwise

thai

on

The remarkable growth of mu¬
tual funds is the new development

saved.

tendency for people to live longer,
$30,000

might

income

for the

investment to grow.

ex¬

which

of

one

of

any

and it
the only

is

ity for the original capital invest¬

children, leis¬

funds

these other
is unique in

that

ment and

household

these

institutions,
it

their investments and all

advantage

on

the
com¬

If

use.

pany—usually securities listed

return

for

fixed,

a

(after ex¬
they make a profit penses).
The investment com¬
on their
investments, the profit h pany, on the other hand, passes
put into a reserve to "make good" all net security profits and all
the occasional losses incurred—for income (after expenses) along to
put to

more

building

at

paratively low rate of return.
They assume all investment risks
and retain any profits made from

ferent

But it does

exchange

of money

holder becomes—in effect—a pari
owner of the assets of the com¬

or

of

"use"

in

the purchase of 'shares of the in-,
vestment company.
The share¬

tions which affords the opportun¬

clothing, better housing,
work-savers, a car, an

more

rates

companies

ance

principal

01

or

banks and insur¬
offer safety
of

summary,

fi¬

of these
personal-service financial institu¬

"necessities"—

now

company
association.

than

payers, they hope to get back the
same number of dollars
they have

In

his

financial problems,
than the savings bank

higher

capital

"lux¬

once

loan

offer

per¬

of

—

of mutual

n

Summary

is

large

personal

insurance

safeguarding

employment

fund

mutual

more

and

such

wealth have become progressively
more difficult in the past several

sonal

one

day

keeping

and

however

company, is
complete solution to current-

a

any

on

household help.

family or friends,
or public charity.

Only

not

It

only natural,
therefore,
that
their
investing
consist largely of lending money
—on real estate
mortgages, mort¬

fi¬

formally, investment

the

mean

com¬

personal

conservative

plans,

The

01

word

investment

small his funds.

complexities

don't

I

getting

as

rn

self-dependent on account of
-pensions,
investments
and
the

nancial

more.

background to fill in—a

con¬

individual, howevei

any
ambitious or

more

5%

or

means

and

place in

a

reach of

annually, while produc¬
ing regular q u a r t erl y income
or

has

pany

than 5%

averaging 3%,

a

nancial planning.
It brings sound
and informed investing within the

—increased capital of their share¬

prior

•was

structively, the

a

plan¬

said earlier, many mutual
funds have—over a span of
years
holders

refrain—as

my.

wealth, p.rud e n 11 y

bank

has

company,

vestments.

This

both for. accumulating a personal
estate and for
employing such

vehicle.

I

65 years of age was

One out of four had to work for

/-Again,

ning for the future.

two

on

most individuals?

practical,'

a

personal financial

and

every

handling
legal affairs or the diag¬
nosis,,and'.cure of their physical

investing institution,

insurance

and

come

private

on

financial

imperative. As re¬
it was estimated

one

•persons over

ambitious

more

the

is

age

cently

and

for

a

less than the

of their

return,

prudent

with

place in

income

education for one's

living, and it is clear that

i t i e s requires
degree of "special¬

s e c u r

no

atio

apprec i

funds.

primary emphasis on
preserving the value of their in¬

government and of corporations
Like their depositors or premium

■

For

their

gage bonds and other bonds of the

vesting in

bill

invest

for

ization"

Increas¬

The list could be
more
years
of life ure time.
considerably higher annual panded almost indefinitely.

a

applicable

companies

39

with

is their realization that in¬

training and

com-"

Combine

,

with

many,

will double in
interest

taxed at half

are

ordinarily

with the maximum rate 25%.
The stumbling block here,

interest compounded

annually,

Qf their wives, they must face the
men

use

likewise

months,

rate

ing the rate" of return on $5,000 infirmities.,;. No one will admit
more readily than the wide-awake
of savings frofh 2% to
5%, or by
$150 annually, provides' the business or professional men, the
wnerewitnaL (for
a- man
of 40 difficulty of keeping abreast of
years)
to buy almost $6,000 >of ..the fast-moving flow of events in
additional "ordinary" life insur¬ his own field. How, then, is one
to keep in touch with investment
ance, or' about
$10,000 of term
affairs, which are "foreign" to
insurance.
- • :
- -

uries"

live

is,

will double in

decades.

iact

aggressive

capital

about the future financial security

five 'years.

•

more

annuai',v, a dollar
35 years.
At 5%

years

who

men

than six
me

obligations, banks and in¬ public

surance

funds

Long-term capital gains, such as
profits on securities owned more

Personal Capital

1900,

mortality among women in
age bracket 55-64 was 26 per

the future, and for
family responsibilites,

insurance protection.

sonal

Own Stocks?

11

More Aggressive Use of

As

expectancy of

men

with

more

financial

in

for

save

those

increased

fund-shareholders. But I shall
turn

Average Perso

e

(691)

are

activities

companies and

more

banks.

And

it

that of the insurance and banking

businesses.
reason

for

That
the

is

meyer

Sons,

The

Financial

Chronicle)

MO.—Charles

P.

Jr., and Henry F. Stratare with A. G. Edwards &
409 North Eighth Street,

members

of

the

New

York

and

St. Louis Stock

Exchanges.

J. L. Schmitt

Forming Firm

is

of mutual funds is even
stringently controlled than

full

Pettus,

to

LOUIS,

insurance

of

strange but true that the adver¬

tising

(Special

ST.

a

principa1

limited—so

far-

NEW

HAVEN, CONN.—John L.
Schmitt is forming Income Funds,-V
to engage in a securities business.
Mr. Schmitt was formerly asso¬
ciated with Lord, Abbett & Co.

40

»!

(692)

THE

COMMERCIAL

Thursday) February 10, 1949

CHRONICLE

FINANCIAL

&

-

111
•

Affiliated

Fundf Inc.
common

Proceeds—For investment.
Oil

Corp.,

;

Price,

j

New York

Jan. 19 (letter of notification) 1,200,000 shares of common
stock (par lc).
Underwriter—Atlantic Securities Co.,

New

York.

Price—25c

share.

per

leases, properties, drilling, etc.

Acquisition

of

oil

stockholders, the rights to subscribe to which have not

\

been exercised.
Proceeds—The net proceeds are to be
applied by company to reduce its outstanding short-term /
notes,- the proceeds of which were used for the acquisi¬
tion of property, the construction of facilities, and other

American Box Board Co.

Jan.

5 filed $5,400,000

15-year 4^4% convertible sink¬
ing fund debentures. Underwriter—Paine, Webbfer, Jack¬
& Curtis.

son

Proceeds—To pay off a long-term obliga¬

tion and to pay

gram to

for part of the costs involved in a
improve and expand a pulp and paper mill.

lawful purposes.

pro¬

•

American

Business Shares, Inc.
2,500,000 shares common stock (par $1),
Underwriter—Lord, Abbett & Co., New York. Price, mar¬

ket.

Feb. '7

American

Light & Traction Co., Chicago
Jan. 10 United Light & Railways Co. filed 634,607 shares
of, American Light common ($25 par).
Underwriter—

and

expansion

March

Jan. 31 filed

the close of business Feb. 7,

(no par)

the basis of one share
of American Light common for each five shares of
United Light common. Rights will expire March 9.

of

®

Animal

one

share

of

stock.

common

Underwriter—None.

Proceeds

add equipment and to provide
•

•

stock.

V.;
Feb.

Industrial

Loan

Corp.,

«
,

shares

stock.

Price—At

None.

Proceeds—For working capital.

par

($10

per

share).

Chas.
a

held.

ratio

Rights

of

will

new

stockholders of

share

expire

for

each

21.

March

Jan.
common

filed

28

Shares,
5,600,000

Inc.,

(25$

•

■

Duke

(2/23)

\

-

Power

;

notes

and

Inc!

to

II?!!, ?

of the construction program
and its subsidiaries/ Offering—Expected

of the company

about Feb. 23.

Proceeds-To

finance part
*

';"//■ '/://./ / • ' '

./•/ :.:V

^

reimburse its treasury tor past construe
Bids—

^ien
expenses* and to* pay- off -bank -borrowings,
At 11:30
(EST) on Feb. 15 at office of
a.m.-

;

Room

Central Maine Power Co.

company,

ferred stockholders have

2199, No. 48 Wall Street, New York, N. Y.

—

£tock.

—

„

.

.

•

Feb.

George Putnam Fund, Boston, Mass.
7 filed
1,000,000 additional shares of beneficial

interest.
Good
Jan.

31

bonds.

Hope Placers, Inc., Boise, Idaho

(letter of notification) $40,000
Underwriter—None. Proceeds

first

mortgage

For additional

equipment, payroll and Working capital.
/Hamilton Fund, Denver, Colo.
Jan. 31 filed $4,000,000 periodic investment
certificates,
series'• H-DA.
Underwriter -—Hamilton
Management

Corp.

Oct

New York
*

Boston

Private Wires to

*

Pittsburgh

Chicago (

Offices in other. Principal Cities > '




"

Harwill, Inc., St.* Charles, Mich.
(letter of notification) 125,000 shares of

27

stock

Kafka

Feb.

3

(Abe)

Productions, Inc., Las Vegas,

Nevada

99,000 shares of capital
($1 per share). Underwriter—None.
Proceeds—For capital to produce motion pictures.
(letter

of

notification)

stock. Price—At par

Funds,

Inc.
Custodian Fund Cer¬
tificates of Participation series Bl, 15,000 shares of series
B2, 75,000 of series K2, 150,000 shares of series S2 and
30,000 shares of series S3. Underwriter—Keystone Co. of
Boston.

Proceeds—For investment.

Las

Vegas (Nov.) Thoroughbred Racing Assp.
500,000 shares 6% cumulative prefprjred
stock (par $5) and 500,000 shares common stock (no par).
Underwriting—None. Offering—To be sold in units of
one share of each at $5 per unit.
Proceeds—To purchase
land and construct racing plant and for working capital*.
Jan.

•

25

filed

Service, Lyndhurst, N.
y.'/*1
(letter of notification) $250,000 6% deferred de¬
certificates.
Prices—At par ($1,000 per unit).
Proceeds—For working capital of the business for the
Liberal Finance

Feb.

1

benture

purpose

of loans.

Offering-^Expfccted about Feb. 15, by
/

company.

^

preemptive rights to purchase
However,- company state's that* it believes
A........
New England Public Service Co.',! which holds 77.8% of
the corporation s credit position and for general corporate
the" common stock, will waive its preemptive right to
J*fice—The ceiling price will be $5.75, or
purchase 219,196 shares of the totial issue, making such
™arl?:et W lower, based bn the closing or last sales on
shares available for immediate sale to an underwriter. / ^he. date_of offering, but not below $4.25 per share. Offering—Postponed indefinitely.
Company proposes to offer the remaining 6*7,300 shares
tQ its other common and to its 6% preferred stockholders
Federal Bake Shops, Inc., Davenport, Iowa pursuant to their preemptive rights in the ratio of one
Jan. 19 (letter of notification)
12,000 shares ($1 par)
share of common stock for each six shares of common
capital stock. Price—$6,625 per share. Underwriter—
jstock presently held and five shares of common stock
Quail & Co., Davenport, la. To pay federal estate and
for each six shares of 6% preferred stock. It is proposed
state inheritance taxes on the estate of
Joseph Hecht.

feuch

o

:,'w:'///:/.'

' '

-

■

'

Farnsworth Television & Radio Carp.
Jsfri. 1.2 filed 270,000- shares ($1 par) common stock. Un¬
derwriter
The First Guardian SecuritiesCorp., New
York.- Proceeds
To pay past due debts, to reestablish

Jan; vlO (by amendment) 286,496 shares ($10 par) com¬
Offering—Company's common and 6% pre¬

mon stock.'

•'

Mutual

Keystone Custodian

competUi^ Wddi^Probable bWders include *hSE? Morgan Stanley & Co.; The First Boston Corp.; Halsey,
Stuart & Co. Inc
Shields ^^Z; Kldder, Peabody^k cZ;
Stuart & Co. Inc.; Stone & Webster Securities Corp.
.Myth & Co.,

15.

Jan. 24 filed 10,000 shares Keystone

stock.

:

Studios, Inc., N. Y,

(letter of notification) 2,941 shares capital stock

Fund, Inc.
Jan. 24 filed 16,000 shares capital stock (par $1). Under¬
writer—None. Price, market. Proceeds—For investment,

filed

24

3

Johnston

Co., Charlotte, N. C. (2/15')
$40,000,000 first and refunding mortgage
bonds,- due 1979! Underwriters—Names to be determined

Jan.

—

Israel-American Production

Feb.

five

Chinchilla Ranch, Bensenville, III.
(letter of notification) 290 "mated" pairs of live
chinchilla animals, together with warranty contract at
$1,000 per pair. Proceeds—For expansion and operating
■

Poison, Mont,!

(by amendment) 258,675 shares ($10 par) com*
Underwriter
Tom G. Taylor & Co., Mis¬

stock.

rec¬

4

,/

1, 1954.
Price, at par.
Proceeds—To supple¬
working capital. Offering—Expected about Feb. 1^

(par $100). Price—$102 per share. Underwriter—None;
purchase of stock in a corporation to be
organized in the State of Israel, which corporation will
operate a motion picture studio in that country, and for
purchase of equipment, etc. Offering—Expected about

Doerrfeld's

expenses.

7

Proceeds—For

Underwriter—
•

■/■;//

Feb.

due

Feb.

Under¬

capital

par)

of

soula, Mont. Price—$10 per share. Proceeds—To erect
and operate a bleached sulphate pulp mill with a 200ton per day capacity.

Proceeds—For investment.

Feb.

Feb.

mon

New York

shares

'/'/■•■'/■::'/./

Idaho-Montana Pulp & Paper Co.,

and operation of mining

common

one

W.

Washington County, N.Y.
(letter of notification) $25,000 4% 5-year notes

Nov. 23

Wilmington, Del.
232,520 shares ($13.50 par) common stock.
in

28

Corp.

Huletts Landing Corp.,

W.

group

.

finance property additions and betterments;: "

Power Cow

Co.;

•

ment

com¬

.

Dividend

\
California Electric Power Co.
Jan.. 24 filed 100,000 shares of 5Vz%. convertible pref¬
erence
stock, 1949 series; ($20 par). Underwriter—Wil¬
liam R. Staats Co., San Francisco, Calif. Proceeds—To
California Electric

&

Mines

—

'//';'

month.

bidding. Probable bidders: The First Boston Corp. and
Blyth & Co. (jointly); Morgan Stanley & Co., Harriman
Ripley & Co., White, Weld & Co. and Shields & Co.
(jointly); Lehman Brothers; Otis & Co. Proceeds—For
construction.
■:/;/
'

Better Babies, Inc., Seattle, Wash.
10,000 shares of

$8,156,650
Offering—

writing—Unsubscribed shares will be sold at competitive

Wilmington,

4 filed

(letter of notification)

Feb.

ord

Delaware

31

For development

—

Offering—To be offered to

$20,000,000 15-year sinking fund debentures
due Feb. 1, 1964. Underwriters—Eastman, Dillon & Co.,
New York, will head a group. Price—To be supplied by
amendment. Proceeds—To reduce outstanding bank loans
maturing over the next several months.
Jan.

or

1959.

Underwriters—Putnam

Jan. 31 'filed

Price—At

Beneficial

(2/18)

share

due

Gold

Inc., L. I. City (2/18*25)
160,000 shares ($1 par) class A stock.
Un¬
Cantor, Fitzgerald & Co., Inc., New York.
Price—$3 per share. Proceeds—To develop, exploit and
distribute a " television innovation.
Expected late this

Delaware Power & Light Co.,

(letter of notification) 5,000 shares of common
par
($50 per share). Underwriter—
None.
Proceeds—To acquire equipment and materials,
and for operational expenses.
«

debentures,

Lake

Hotelevision,

Corp., Seattle, Wash.
(letter of notification) 400,000 shares of common
Price—25 cents per share. Underwriter — None.

Proceeds

31

stock.

stock at $50 per

Proceeds—To explore

'

Nov. 3 filed

properties.

working capital.

Underwriter—None.

share).

derwriter

Cordillera

Aviation Dealers Corp., Inc., Los Angeles, Calif.

Jap.

Light & Power Co.

convertible

stock.

Feb. 3

Price—$100 per unit.
To purchase property

—

about

alternative to issue either 163,133 shares

common

>

Price—Par ($1

mining properties.

purchasing the unsubscribed deben¬
tures.
Proceeds—To be applied to the payment of
$2,570,000 of bank borrowings and to future construction
outlays. Expected about Feb. 18.

5,000 shares of 6% cumulative participat¬
ing non-convertible preferred stock (par $100) and 1,000
shares of common stock (no par value). Offering—To be
publicly offered in units of five shares of preferred stock
and

an

Inc., Fairbanks, Alaska

Mines,

(letter of notification) 137,150 shares of class A

Horwood

•,

Scranton & Co. and Estabrook & Co. will head

Foundation, inc., Buffalo, N. Y.

Heteolrcon

27 (letter of notification) 100,000 shares of a
stock.
Price—$1 per share.
Underwriter—Charles
Warshoff & Co., Newark, N. J.
For development

of underwriters in

filed

3

Expected

will be reserved for conversion of debentures into
mon

•'

Jan. 27

Dec.

Stockholders will be allowed to purchase, for each eight
shares held, either one share of common at $50 or $50
of debentures for $50 in cash.
Unsubscribed shares-

American Steel & Pump Corp.
3ept. 21 filed 200,000 shares ($2 par) convertible class A
*tock. Underwriters—Herrick, Waddell & Reed, Inc. and
■Sills, Minton & Co., Inc. Price—$8 per share. Proceeds
„—To retire indebtedness and for working capital. Ex"pected financing plan will be revised.

Feb.

3%

—

-

Connecticut

on

Offering

program.

7.

None. Offering—The shares will be offered at $12 per
share to holders of United Light common of record at

Moines, Iowa.

Heidelberg Sports Enterprises, Inc.,
Pittsburgh, Pa.
June 25 filed 5,000 shares of class B common stock (par
$100). Price*—$100 per share/ Underwriter—None. Pro¬
ceeds— $600,000 to be used for spectator grandstand and
balance for related purposes.
/

(letter of notification)

stock and 2,000 shares of class B 4^%

Proceeds—For investment.

McDermott & Co., Des

claims.

1,000 shares of common
preferred stock,
series A.
Price—$100 per share.
Underwriter—None.
Proceeds—For payment of bank loans, refinancing out¬
standing mortgage bonds, and for cost of construction

filed

$2.50 cumulative preferred stock, to be sold at $50 per
share. Underwriters—Becker & Cownie, Inc., ami Shaw,

per,

New York

•

24

Hawkeye Casualty Co.* Des Moines, Iowa
'/
20 (letter of notification) 4,000 shares of $10 par

Jan.

8% preferential dividend common stock.

Chenango & Unadi lla Telephone Corp., Norwich,

'

Jhn.

ISSUE

PREVIOUS

SINCE

subscription rights be negotiable.
Underwriter
—Company proposes to enter into a contract with an
underwriter for the purchase by the underwriter of the
shares made available for sale to the public by the
waiver by New England Public Service Co. of its pre¬
emptive rights in the proposed issue and in addition,
for the purchase by the underwriter at the conclusion
of the subscription period of those shares offered to

stock (par $1.25).

Underwriter—Lord, Abbett & Co., New York.
Allied Western

ADDITIONS

that the

Jan. 24 filed 10,000,000 shares
market.

INDICATES

(par $1).
Price, par.
Bailey & Co., Detroit.
To

Underwriter
pay

current

chase

—

common

Charles E.

liabilities,

pur¬

property, building and equipment and for working
capital.
.

Magnia- Copper Co., New York

■

stock. Offering—
subscription by stockholders of record
one new share for each two shares

Jan. 25" filed 204,000 shares of common
To be offered for

Feb.
held.

15 in ratio of

about March 8. Lazard
Mining Corp. have agreed to
purchase any unsubscribed shares, but have no intention
of making any public offering thereof. Proceeds—Pro¬
vide funds with which company may increase its in¬
vestment in San Manuel Copper Corp., a subsidiary. »
Rights'will ■ expire

on or

Freres & Co. and Newmont

,

Major Television Corp., New York (2/15)
Jan. 28 (letter of notification) 299,600 shares of common
stock
(par 25$).
Underwriter—Mencher & .Co., New
York.
Price—$1 per share.
To finance manufacture
and sale of television receivers and cathode ray tubes.

,

Volume 169

Number 4776

(693)
share). Underwriter—None. Proceeds—To develop
mining claims and furnish funds for supplies, material

shares of remaining 106,808 shares not taken
Proceeds—For general funds.

per

February
Texas & Pacific Ry.,

Virginian Ry., 11

10,

(EST)____Equip. Trust Ctfs.

February

Duke^Power Co., 11:30

15,

1949
Debentures

..Common Stock

Monongahela Power Co.,

noon

February

Bonds

February

18,

held.

23,

•

Northern Pacific Ry., noon

>

■:
Dec.

1949

*7

,,Northern States Power Co....

______Bonds

8,

1949

9,

1949

1

March

710,

\

Bonds

New

•<•.

sold

to

31,500 shares (100 par)
public at $3 per share;1/
to trade: accounts; 27,500
a

stockholder

at

1949

•

Providence Baseball

stock.

England Tel. & Tel. Co

None.

.Debentures

Proceeds—To

operate the franchise of

profes¬

a

sional club.

March
Staten Island Edison

24,

1949

Service

Co.

of

North

Carolina,

Inc.
Jan. 24 (letter of notification) $135,000 5% general mort¬
gage bonds, due Dec. 1, 1951, with common stock pur¬

...Preferred

chase warrant attached

•

Massachusetts

Feb

3

filed

Investors

1,301,298 additional shares of beneficial in¬

terest.

,-*:v

Mid-Continent
Jan. 20

To

be

sold

underwriting.

•

Minnesota

Jan.

Airlines, Inc., Kansas City,

(letter of notification)

stock.

No

entitling the holder of each $1.purchase 10 shares ..of common stock at $20
Underwriter—W. L. Canady & Co., Inc., New
York.
Price—Expected at par. Proceeds—To reimburse
the Treasury, in part, for past
outlays for construction

Trust, Boston, Mass.

27

(letter

common

stock.

13,273 shares of

Mo.

&

59,090

shares

"Underwriter

—

None.
,r..

Proceeds

77'/

-

,

\7/,.

—

(no

par)

Jan. 28

filed

to

be

bonds, due
through

Feb.

1979.

None.

porate

Monarch

Machine Tool

Co.

Eberstadt

common

of

common

stock to

be

sold

to

West Penn Electric

Co.

(parent). Probable bidders for bonds: Halsey, Stuart &
Inc.; Merrill Lynch, Pierce Fenner & Beane and
Hallgarten & Co. (jointly); Harriman Ripley & Co. and
Lazard Freres

(jointly); Blyth & Co., Inc. and Goldman,
Sachs & Co. (jointly); Kidder, Peabody & Co.; Glore,
Forgan & Co.; Lehman Brothers; Salomon Bros. & Hutznoon

Bids—Bids for the bonds will be received up to 12
(EST) on Feb. 15 at office of company, Room 901,

No. 50 Broad Street, New

York, N. Y.

National Battery Co.
July 14 filed 65,000 shares ($50 par)
ferred

stock.

Price and

dividend,

V

convertible

•

Nevada

by amendment.

Un¬

Stewart

Mining Co., Spokane, Wash.
notification) 200,000 shares of non¬
assessable capital stock.
Price—At about market (200
31

(letter

of




purposes.

retire bank loans and for expansion
purposes.

Dec.

filed

16

Union

Gas

107,430

Co.,

shares

Dallas, Tex.
($1 par) common

outstanding stock of
basis of one new share for each 10
held, plus the privilege of subscribing for addi¬
tional shares not purchased by other stockholders. Under¬

record

Jan.

3,

on

shares

Proceeds—For

ments.
®

construction

and

better¬

•

Southwestern Public Service

Co., Dallas, Texas

Feb. 3 filed 112,486 shares of common stock
be

offered

for each

to stockholders

11

at the

rate of

(par $1). To
new share

one

shares held.

Price—By amendment. .Under¬
& Co. Inc. will head a group to
purchase the unsubscribed shares. Proceeds—For con¬
writer—Dillon, Read

struction and to repay bank loans.

American Telephone & Telegraph Co.
Feb. 9 it was reported that the matter of a stock
offering-

be considered

may

Standard

Feb.

1

stock.

Printing Co., Louisville, Ky.
(letter of notification) 5,000 shares of

Price—$35

ceeds—To

per

increase

share.

common

Underwriter—None.

Pro¬

working capital.

&

Western

.

Air,

Inc.

(owner of 74% of outstanding shares) will exercise sub¬
scription rights to purchase 297,304 shares. Rights are
—Merrill

group

to

expire

on

or

about

March

v

'

•»

"

•'

"

»

1

meeting

scheduled for
'■ /
!
;

7'

■
'

S

<

■

.

'

.

•

Artloom Carpet Co., Inc.
March 15, stockholders will vote

15-year 4%

on

issuance of

promissory notes.

V*

■

k
$2,300,-

Proceeds to repay

outstanding notes and for modernization of plant,
•

Central

Maine

Power

j.7

Co.,

Augusta, Me.
o
Feb. 1 asked SEC permission to sell
competitively $5,~
000,000 of first and general mortgage bonds, series R,
due 1979. Proceeds would be used to reduce outstanding
short-term notes. Probable bidders: Halsey, Stuart & Co.

Inc.;

Coffin

&

Burr,

Inc.

and

The

First

Boston

Corp.

(jointly); Salomon Bros. & Hutzler; Kidder, Peabody &
Co.; Harriman Ripley & Co.^Merrill Lynch, Pierce, Fen¬
&

ner

&

Beane

and

Co.;Otis & Co.

White, Weld & Co. (jointly);
Offering expected in March.

Shields

•

Chesapeake & Ohio Ry.
"
/7'! *7
1 reported planning sale of an additional block of
equipment trust certificates early in March.
Probablo
bidders: Halsey, Stuart & Co.
Inc.; Harriman Ripley &
Co. and Lehman Brothers
(jointly) Harris, Hall & Co.
(Inc.); Salomon Bros. & Hutzler.
Feb.

Columbia

Gas System, Inc.
7 asked SEC permission to sell
competitively $20,000,000 25-year debentures, due 1974. Probable bidders:
Morgan Stanley & Co.; Halsey, Stuart & Co. Inc.; Mer¬
rill Lynch, Pierce, Fenner & Beane and
White, Weld1 &

Feb.

(pointly); Lehman Brothers, Goldman, Sachs & Co.
Union Securities Corp.
(jointly); The First Bostdit'
Corp. Proceeds are to be used to finance part of the 1949
and

construction

program.
It is contemplated that competi¬
tive bids for the debentures will be opened on or about

March

15.

Columbia Gas

System, Inc.
anticipated that subse¬
quent to the sale of $20,000,000 of new debentures, com¬
pany

the

2.

Underwriter

Lynch, Pierce, Fenner & Beane, will head a
of underwriters .purchasing any unsubscribed

announced that it is

was

will sell additional securities in order to provide
funds required in connection with its

remaining

1949 construction program.
•

Delaware

&

Hudson

RR.

Corp.

(3/3)

Feb. 1 company asked authority of ICC to issue
$4,800,000
of equipment certificates to help finance the purchase "of:

29 diesel locomotives and 600 freight cars which are ex¬
pected to cost $6,492,925. Probable bidders: Halsey, Stuart
& Co. Inc.; Salomon Bros. & Hutzler; Harriman Ripley

&

Co.

Co.

and

Lehman

(Inc.).

March

Date

Brothers

for

(jointly); Harris Hall &
opening bids expected to be

3.

Delaware Power & Light Co., Wilmington, Del.
9 company advised SEC of a plan to increase the

authorized preferred stock from 100;000 to 200,000 shares
and to increase the amount of unsecured debt by $10,-

000,000.

Jan. 28 filed 404,112 shs. ($5 par) com. stock. Offering—
to be offered stockholders of record Feb. 16 at rate of
one-fifth new share for each share held. Hughes Tool Co.

expected

directors'
y

*

■'

Feb.

Taylor Food Co., Raleigh, N. C.
Dec. 17 (letter of notification)
17,000 shares ($1 par)
common
stock, of which 7,000 shares would be sold at
$1.12Ms and 10,000 shares at $1 per share. Underwriter—
Griffin & Vaden, Inc., Raleigh-, N. C.
For additional
working capital.
Transcontinental

at

Feb. 16.
1

•
•

;

Prospective Offerings |

•

Feb 7 it

stock.

Offering—To be made to holders of
•

*

notes; refund 3V2% first mortgage bonds due 1954 and
short-term promissory note.
*

•

Southern

' - ■

Co.

'

,

,

Light Co., Cambridge, Mass.

pay

•

pre¬

derwriters—Goldman, Sachs & Co., New York; Piper,
Jaffray & Hopwood, Minneapolis. - Proceeds—To retire
$3,000,000 of bank loans and general corporate purpose!
Temporarily deferred.

Jan.

Expected

Finance

(J. B.), Inc., Franklin, Tenn.
Jan. 24 (letter of notification) $250,000 6%
10-year sink¬
ing fund debentures and 5,000 shares (no par) capital
stock to be sold at $10 per share. No
underwriting. To

Co.

ler.

bank borrowings.
7'77'7/1

&

Monongahela Power Co. (2/15)
Jan. 18 filed $6,000,000 30-year first mortgage bonds to
be! sold through competitive bidding and 67,000 shares
-

of

Co., Los Angeles, Calif.
(letter of notification) 10,000 shares of common
(par $1).
Price—$16 per share.
Underwriter—
Proceeds—For working capital and general cor¬

writing—None.

stock (no par)
Co., Inc. and Prescott.
Hawley, Shepard & Co., Inc. Proceeds—Stock being sold
by certain stockholders.; Offering indefinitely postponed.
Underwriters—F.

retirement

15.

Sedberry

Expected about March 7.

Mississippi Chemical Corp., Jackson, Miss.
Jan. 3 filed 1,200,000 shares common stock (par $5), No
underwriting. Offering—Of the total 660,000 shares are
subject to delivery under the stock subscriptions now ex¬
istent.
Price—$5 per share. Proceeds — To construct
ammonia plant.

4

stock

com¬

petitive bidding.
Probable bidders: Shields & Co.; The
First Boston Corp.; Halsey; Stuart & Co. Inc.; Lehman
Brothers; Kidder, Peabody & Co.; Glore, Forgan & Co.;
Harriman Ripley & Co.; Otis & Co. Proceeds—For con¬
struction or to pay off short-term bank borrowings.

Sept. 13 filed 26,000 shares of

the

and

Seaboard

(3/7)

determined

filed

30

.about Feb.
•

$4,000,000 first mortgage

Underwriters—Names

tion

For construction and

7/ ;7 •7/':7

Minnesota Power & Light Co.

additions to facilities.

Light & Power Co. (2/15)
$7,500,000 first mortgage bonds, series C,
due 1978.
Underwriting—Names will be determined by
competitive bidding.
Probable bidders: Halsey, Stuart
& Co. Inc., Harriman Ripley & Co., Merrill
Lynch, Pierce,
Fenner & Beane and Kidder, Peabody & Co.
(jointly);
Carl M. Loeb, Rhoades & Co.
Proceeds—For construc¬

To be sold to stockholders of record Feb.

other purposes.

and

Rockland

3, 1949. American Power & Light Co. will exercise its
right to purchase 50,000 shares. Price—$21 per share.
.

share.

Dec.

Light Co., Duluth, Minn.

of notification)

bond to

per

common

to employees.
Price—$6 per share.
For additional working capital.

Power

000

unit, consisting of one share of
Proceeds—To investigate the
product and to pay ex¬

.Halsey, Stuart & Co. Inc.; The First Boston Corp.; Kid¬
der, Peabody & Co., Proceeds —^ To prepay short-term,

000 of

Public

Corp

pre¬

stock

of

•series

Expected about

Club, Inc., Providence,R.I.
(letter of notification) 7,500 shares of common
Price—At par ($10 per share).
Underwriter—

7

per

6%

common

'Jan. 26 filed $2r150,000 first mortgage sinking fund bonds,
A due 1969. Underwriters—Names to be deter¬
mined- through i competitive: bidding.
Probable bidders:

$3

share each.
Underwriting—
Proceeds—For purchase of equipment

working capital.

shares

1,500

and 3,000 shares of

Underwriter—None,

in units of ofie

and

(letter of notification)

Worcester Gas

-

V/?

•

offered

Feb.

22,

1.

By amendment.

1949

Corp

March

be

,

Corp., Los Angeles, Calif.

practicability of a new board
penses of incorporation.

Playboy Motor Car Corp., Tonawanda, N. Y.
29 filed 1,000,000 shares of class A 20-cent
prefer¬
ential dividend series ($3 par) common stock and
1,000,000 shares of class B (50 par) com. stock. Offering—To

.Equip. Trust Ctfs.

Staten Island Edison

to

3

each.

Dec.

be

Southern Ry
March

stock

Wonderwood

"(no par). Price—$101

D. C.

(3/D ;i-;(letter of notification)

21

(par $1).

Price, market

investment.

ferred stock (par $100)

working capital and payment of taxes.

Bonds & Preferred

March

Eugene R. Farny,

of Washington,

stock

common

& Co., Inc.

•

•

Feb.

writer—Willis E. Burnside &
.Bonds

March

extensions,

share and 10,000 options at 10 per share./ Under¬
Co., Inc., New York. For

per

1949

Minnesota Power & Light Co.

West Penn Power Co...

to

go

shares to he offered
shares "tp i)e offered on/behalf of

-

7,

Proceeds—To

Morgan

Philippine Mindanao Development
Cebu City, Philippine Islands
Jan. 5 filed 2,000,000 shares of voting capital stock, on©
centavo par value. Price—25 cents per share (U. S. cur¬
rency). Underwriter—F. T. Andrews & Co. Proceeds—
To provide funds for plant
construction, diamond drill¬
ing, exploration and repayment of loans.
7,7.
!

ea^h 10 shares

Proceeds—For

40,000

Delaware >& Hudson IRR. Corp, i Equip,: Trust Ctfs..
'March

share for

new

7Pepsi-Cola Bottling Co.

1949

(EST)..Equip. Tr. Ctfs.

3,

one

L.

Co.,

President,, selling stockholder.

.Bonds

common

March

None.

—

900,000 shares of

Wichman

(par $25).

San Francisco, Calif. 7;
(letter of notification) 65,666% shares of common
stock (par 10 cents). Price—40 cents per share. Under¬

.

■

stock

Pacific Telecoin Corp.,

.

„

filed

Proceeds—For

Co.

Jan. 31

1949

24,

the rate of

Underwriting—None,

writer

California Electric Power Co

February

Electric

additions, etc.

1949

Connecticut Light & Power Co..Stock or Debs.
Hotelevision, Inc...—
Class A Stock

February

25 at

Feb.

(EST)_.Equip. Trust Ctfs.

noon

&

Gas

Offering—To be offered at par to stockholders of record

-Equip. Trust Ctfs.

24

Underwriter—W.

28 filed 754,038 shares of common

Jan.

—

Wellington Fund, Inc.
Jan.

7.

Pacific

1949

..

March

about

Bonds

16,

common stock (par
$9).
Names to be determined
through com¬
petitive bidding, Probable bidders include Kidder, Pea¬
body & Co., Merrill Lynch, Pierce, Fenner & Beane and
Paine, Webber, Jackson & Curtis (jointly). Proceeds—
Will go to selling stockholders. Consolidated Electric &.
Gas Co. and Middle West Corp. will sell 120,000' shares
and 34,000 shares, respectively; Copper Range Co., 34,000
shares and several individual owners 11,200 shares.
# 1

Underwriters

Union

Western RR.

(MST)

Pennsylvania RR.,

:

(EST)

Light & Power Co

Denver & Rio Grande

Sept. 28 filed 200,000 shares of

(jointly); Harris, Hall & Co. (Inc.); Merrill/Lynch,
Pierce, Fenner & Beane; Harriman, Ripley & Co. and
Securities Corp.
(jointly). • Proceeds—For con¬
struction or to pay off temporary borrowings. Expected

(EST)_________.Bonds

a.m.

Major Television Corp

Noon

(Wis.) (3/7)
$10,000,000 first mortgage bonds, due 1979.
Underwriters—Names to be determined
through com¬
petitive bidding.
Probable bidders: Halsey, Stuart &
Co. Inc.; Kidder, Peabody & Co. and White, Weld & Co.
(jointly); Glore, Forgan & Co.; The First Boston Corp.;
Blyth & Co., Inc.; Lehman Brothers and Riter & Co.

noon____._Equip. Trust Ctfs.

a.m.

Upper Peninsula Power Co.

Northern States Power Co.

Jan. 28 filed

Columbia Gas System, Inc

Rockland

aftd labor.

1949

by stock¬

holders.

.

NEW ISSUE CALENDAR

41

Proceeds of these issues would be used for plant

construction.
•

Denver

& Rio

Grande

Western RR.

(2/16)

-i

Feb. 1 company asked ICC for authority to issue
$6,900,-j
000 of certificates, series N, to help pay for seven
diesel;

locomotives and 775 freight cars which are expected
cost

to,

bidders: Halsey, Stuart &
Co..j
Ripley & Co. and Lehman Brothers'
(jointly); Harris, Hall & Co. (Inc.); Salomon Bros.
Hutzler. Bids—At noon (MST) on Feb. 16.
S

Inc.;

•

Jan.

$9,203,860. Probable

Harriman

Eastern
28

Gas

&

Fuel

Associates

-4

SEC permission to sell com-t
petitively $12,000,000 25-year bonds, the proceeds to
provide funds for its construction program. Probable
company

asked

(Continued

on page

42)

42

Halsey, Stuart & Co. Inc.; Blyth & Co., Inc.;
White, Weld & Co. and Kidder, Peabody & Co. (jointly).
SEC hearing scheduled for Feb. 24.
Mineral

Foote

ized

29

25,000 shares to 100,000 shares,

Gulf

•

Gulf

000

Power

•

end of 1950 to meet the full
expenditures in connection with
the 1949-1950 construction program.

.

28

reported

company

Electric

stock will include Otis & Co.

by

to

Southern

will

tificates

that

.considerably
obligations

in

likely

buying

this,

which

consideration

a

could explain partially, at least,
the renewed lethargy which ap¬
pears to have

issue

new

developed in the
A
quick

market.

check-up indicates, at any rate,
that buyers are in no great haste

about soaking up the remaining

unsold

portions of

The

big Consolidated Edison of

York

issue

still reported

is

decidedly
"sticky"
with
only
about a quarter of the total thus
far
marketed.
The
sponsoring

recently

however,

took

steps to beat down unfounded re¬

ports
that , it
was
considering
marking down the price and has
agreed to stand by its agreement.
Light,

Electric

Heat

&

3s, of 1979,
are
still
around, along with Public Serv¬
ice Co. of Indiana 3s of 1979,

Power

and Jersey Central

3H*s, of 1978.

equity of¬
ferings it is still possible to obtain
the

Among

Rohm
also

&

the

ated Gas

recent

Haas

preferred

$4

and

of Affili¬
Co., according to market
$3

preferred

observers..

American

Interest

Rates

Little change from
is

indicated

in

conditions

right.

are

to

a

and

refunding
bonds
for

mortgage

30-year-

tenders

opened

on

are

banking

Four

to

known

slated

be

groups

planning

be

to seek

heading
aggregations the outcome
are

should provide a new cue to the

ideas

of

investment

will

firm

The

Accordingly it is no surprise
of $200

issue

new

million

or

either in convertible de¬
or
stock, as an early

more,

bentures

use

the. funds

partially for construction, partial¬
ly to reimburse the treasury for
outlays
already
made
and
to
liquidate existing bank loans.

World Fund

Approves!

!&

prospect.
But these discussions hold little

for

interest

ties

investment

it is likely that

since

Will

offered

be

shareholders

on

bankers,

the securi¬
directly to

"rights" basis.

a

Joining the Parade
The

of the

latest

public utility

follow through on
its announced plans for raising
substantial new capital is the Co¬
to

companies

lumbia Gas System.

present lev¬

survey

just

rates

accord¬

West

Feb.

mortgage
ferred
tive

Co.

cer¬

SEC

series

stock

C,

at

to be

sals for Treasury

It

was

stock

at

8

8, 1949.

Inc.

(bonds

Probable

Spahr

only);

present

the

on

stated

need

Monetary

proved

a

the

Fund

Interna¬

had

value, in com¬
premium trans¬

that

"The

South

not

of

$20

bentures

to

of South Africa at

United

on

the part of the

Dr.

States,"

Spahr

con¬

paper

dollars

by people
world.

in

different parts of the
"An excellent

example of sound

be

sold
as

new

under

part

com¬

of

its

costs
and

of
new

nection

1

value

terms of the

additional

construction

purchases in con¬
with
an
underground
gas

Further financ¬

un¬

organization

of

gold, unless a departure
therefrom is granted by the Fund
authorities.

Electric

bidders:

on or

about

Halsey, Stuart & Co.

Peabody

&

Co.;

Lehman

discussion

:4;v4,

Dr. Walter E.

at

the

Denver

Athletic

Club.
Feb. 15, 1949

(Detroit, Mich.)

Detroit Stock Exchange Annual
/
Dinner at the Hotel Statler.
Feb.

15, 1949

(New York

City)

Stock

dam

Exchange against Amster-r
Exchange in match

Stock

scheduled for March 5.

Feb. 21, 1949

Cashiers

Street

(New York City)
Association

Annual

Wall

of

Dinner

.

the

at

Roosevelt Hotel.

would also be set up for
laudable imitation by other na¬ Feb. 21, 1949 (Philadelphia. Pa.)
Investment Traders Associaiion
tions. This should inspire confi¬
of Philadelphia Annual Mid-Win¬
dence and invite the initiation of
money

long-term

business

commitments

with favorable effects on produc¬

Dinner

ter

Franklin

the

at

Benjamin

Hotel.

.

March 8, 1949 (New York City)
National Federation of Financial

Analysts Societies Second Annual
Convention.

COMING
E VENIS
In

Investment

Field

March

V

■

16-17, 1949

(Chicago, 111.)

Central States Group of IBA
Spring Meeting at Drake Hotel.. *

May 18-21

(White Sulphur

'

Investment Bankers Association

Feb. 11,

1949

(Boston, Mass.)

Securities Traders As¬
Annual Dinner at the

Boston

premium over Feb. 11, 1949 (Pittsburgh, Pa.)
the $35 official price, the premium
Bond Club of Pittsburgh annual
being estimated at $6.50 a fine "Sport Night" Dinner at the Pitts¬
ounce.
As South Africa is a mem¬
burgh Athletic Association.

to adhere to the established dollar

of

Penn

tinued, "would remove all doubt
about the quality of our paper Feb.
21, 1949 (Milwaukee, Wis.)'1
dollars by making them- redeem¬
Milwaukee Bond Club Annual
able at a definite rate into gold. Meeting and Election at the Mil¬
It would also prevent violent fluc¬ waukee Athletic Club.
tuations in the valuation put on

a

de¬

bidding

petitive

ap¬

ber of the 50-nation International

million

common

Tryouts at the New York Chess
promptly to sell
and buy gold freely at a fixed rate Club for membership on Ameri-r
can
team to play for New York
of $35 per fine ounce.

sale in London of 100,000 sociation
of alloy gold by the Union Hotel Somerset.

der the

ing

competi-

Springs, W. Va.)

sion to

a

through

offers

ernment

per

Monetary Fund, it is required

cover

first

pref'

new

additional

The West

to

Kidder,

bilization if the United States Gov¬

says

with the
Commis¬
prospective offer¬

It filed early this week

sold

of

Brothers; The First Boston Corp.; W .C. Langley & Co.;

100,-

sale at $35

that

tional

ounces

be

shares

sold

$10,000,000

$5,000,000

$28.50 per share. Present plan is to

reported from Washing¬

Feb,

issue

to

and

to

ounce.

oil

(3/8)

bids for the bonds and preferred stock

upset efforts to¬
ward international monetary sta¬

transaction need not upset propo¬

ton

1950-1959.

and to the public holders of outstanding

(parent)

March

at

rency

estimated premium

of $6.50 per ounce.

!!'4;:vv

N

70,000

and

(no par)

Co.

permission

series

bonds

bidding,

stock

Power

Penn

asked

1

exchange of goods on a
world-wide basis."

Securities and Exchange

completed storage project.




Permits South Africa to sell
ounces

1,

Hutzler; Harris, Hall & Co. (Inc.).

tion and

Premium Gold Sale
000

Feb.

cars and 25 cabooses. Probr'
able bidders: Haley, Stuart & Co. Inc.; Harriman Ripley
Co. and Lehman Brothers (jointly); Salomon Bros.

"Such action

are

the largest

bonds and since

these

to

Tuesday next week.

■

.

Funds would be used to defray

money

during the current year,

ing

first

which

each

■&

open

menting

our

Telephone

overall plans.

els

new

$380,000

due

[consist of 1,000 steel hopper

bidders:

gold

bankers.

Telegraph Co. and its operating
companies are committed to a
construction program which it has
calculated will require about two
billions of new money this year,
the company can be expected to
enter the market when it believes

Meanwhile it is reported that

Union

stability

relative

&

a

group,

to

of

1948,

African-London premium price for

The next sizable issue up for
bids is Duke Power Co.'s $40 mil¬
lion

1,

to hear talk of the possibility of

offerings.
New

Halsey,

action,

price

the

Since

recent

some

expected

Amer. Tel. & Tel.

field, but there is evidence of
nonetheless.

later

a

Duke Power Bonds Next

underwriting firms

its prevalence
is

Feb.

common

Probable

!

.

a.m. (EST) Feb. 10 at
Room 1109, 44 Wall St.., New York for the purchase of
$3,800,000 equipment trust certificates series A dated

[The equipment to be covered by the certificates will

Ripley & Co.,

costs.

the

influence

pro¬

be

Its holdings of Treas¬
bonds should the market re¬
main strong, thus suggesting the
for

9.

(2/10)

Smith, Barney & Co.; Harriman, Ripley & Co.

ury

marketwise.

less

that

observes

it

can

March

sell part of

prospect

It

some

Federal

nounced in the investment securi¬

«.

opin¬

and investment funds.

Against

received

be

Reserve

reduction is
demands for credit

The latest
upheaval in basic
commodity prices appears to be
promoting a ; generally cautious
feeling in most directions.
This

perhaps

bidders:

Virginian Ry.

.

j

Ry.

the ing will be required, at

fewer
Treasury
this year than in

since

1948,

the

is

Probable

date, to cover the balance of such

Federal

the

to finance purchase of
diesel road freight locomotives and one

6,000 h.p.

| Bids will be received up to 11

Salomon Bros. & Hutzler.

The bank ventures the
ion

four

j

Halsey, Stuart & Co. Inc.; Harriman Ripley & Co. and
Lehman
Brothers
(jointly); The First Boston Corp.;

department of

bond

the

Broadway,

4,000 hp. passenger locomotive. Probable bidders: Halsey,
Stuart & Co. Inc.; Salomon Bros. & Hutzler; Harris, Hall
&
Co.
(Inc.); Harriman Ripley & Co and Lehman
?Brothers (jointly).

(2/24)

(3/9)
Bids for the purchase of $11,850,000 equipment trust

will face the prospect of

ties

;

1964.

15,

March

Bankers Trust Co.

Report

10 shares of General stock

The First Boston Corp. will head a dealer-man¬

Co. Inc., The First Boston Corp., Harriman
Inc. and Lehman Brothers (jointly).

Probable bidders for

Michigan Consolidated Gas Co.
Feb. 1 reported company is planning sale of $14,000,000
in new bonds and $7,000,000 in preferred stock. Probable
bidders: White, Weld & Co. and Salomon Bros. & Hutz¬
ler (jointly); Glore, Forgan & Co. and W. C. Langley &
Co. (jointly); Lehman Bros.; Harris, Hall & Co. (Inc.);

Reporter's

:

Corp. for every

233

'1950-1959. Proceeds will be used

stock of New York State Elec¬

Pennsylvania RR. (2/16)
purchase of $10,005,000 equipment trftst
certificates, series W, dated Nov. 1, 1948, and due in
15 annual instalments of $667,000 from Nov. 1, 1949-1963,
will be deceived by company at Room 1811 Broad Street
Station, Philadelphia, up-to noon (EST), Feb. 16. Prob¬
able bidders: Salomon Bros. & Hutzler, Halsey, Stuart &.

will be necessary to provide funds for
contemplated plant additions aggregating about $3,000,000, according to the annual report, but the form and
amount of the financing have not yet been determined.
Of said amount, approximately $1,900,000 will be spent

Our

be offered the right to subscribe

common

Bids for the

New financing

common

share of
Gas

Harriman Ripley & Co. ahd Lehman
(jointly); Salomon Bros.. & Hutzler; Harris.
Hall & Co. (Inc.); Kidder, Peabody & Co.; Lee Higginson Corp.

Co.

in 1948 and the remainder in 1949.

New York for the purchase of
equipment trust certificates series F to be
dated March 1,-1949 and due $225,000 annually March 1,

Brothers

privately has been negotiated, it is
&

2216,

; $2,250,000

Stuart & Co. Inc.;

•./.
Gas

&

1950,

loans, and the balance added to working capital.
;/

one

tric

Northern Pacific Railway

Liquid Carbonic Corp,
Jan. 28, preferred stockholders approved
a proposal
to issue $10,000,000 long-term debentures, the net pro¬
ceeds to be used as follows: $8,900,000 to retire present

Madison

-

Company has issued invitations for bids to be received
before noon
(EST) Feb. 24 for $6,000,000 equipment
trust certificates, to be dated March 15, 1949, arid to ma¬
tures in 15 equal annual instalments from March 15,

•

said.:

Texas & Pacific Ry.
(2/10)
4
T
Company will receive bids until noon Feb. 10 at Room

obtain subscriptions.

planning sale of $6,800,000

HalLeh¬
man Brothers
(jointly); Harris Hall & Co. (Inc.); The
First Boston Corp.; Salomon Bros. & Hutzler.

Sale of debentures

■

which includes Lehman Brothers, Wertheim
& Co. and Merrill Lynch, Pierce, Fenner & Beane to

equipment trust ctfs. in March. Probable bidders:
sey, Stuart & Co. Inc.; Harriman Ripley & Co. and

bank

regis¬

ager group

RR.

Central

Illinois

for

held.

amount of the estimated

Jan.

a

Electric & Gas Corp.

New York State

its stockholders would

the

before

of

Feb. 6 the General Public Utilities Corp. announced that

bonds which the company
competitive bidding, it is ex¬
additional $1,000,000 of bonds will be is¬

sold

sued and

jHarriman Ripley & Co.; Kidder, Peabody & Co.; Otis
& Co. On preferred: W. C. Langley & Co.; Kidder, Peaibody & Co.;' Stone & Webster Securities Corp. 'and
/White, Weld & Co. (jointly); Lehman Brothers; The
First Boston Corp.
Bids on bonds are to be received by
! March 10 and on the preferred stock by March 24.;

Probable bidders: Morgan
Expected com¬

outstanding first mortgage 5s.

to sell through

pected that an

and provide funds required for expansion. Proceeds
preferred stock would be used by company to carry
cut its plan
of recapitalization. Probable bidders- on
bonds: Halsey, Stuart & Co. Inc.; The First Boston Corp.;

25-year deben¬

$35,000,000

Proceeds from the
company's short-term indebted¬

from

Stanley & Co.; Halsey, Stuart & Co. Inc.
pany will open bids March 22.

first mortgage

30-year

proposes

covering

preferred stock.

new

ness

England Telephone & Telegraph Co.

statement

(3/10-24)

tion to issue $2,750,000 30-year first mortgage bonds and
bonds would retire the

4'

4

Island Edison Corp.

$4,000,000 in
-

tures, to be sold at competitive bidding in March. Pro¬
$35,000,000.

Fla.

Pensacola,

Co.,

j

#

ceeds will be used to redeem on June 1, 1949,

announced that in addition to the $2,500,-

was

Probable

18 directors authorized the preparation

tration

SEC

1950 construction program.

Feb. 7 it

certificates.

New

Jan.

Power Co.,

asked

7

■

(jointly). Expected about March 8.
•

PensacoJa, Fla.
permission to sell competitively $2,500,000 30-year first mortgage bonds. Probable bidders:
First Boston Corp.; Harris, Hall & Co. (Inc.) and Equit¬
able Securities Corp. Proceeds are to be applied to 1949•

Feb.

;

of $2,550,000 equipment
bidders: Halsey, Stuart &

Co.

&

Estabrook

RR.'

Co. Inc.; Harris, Hall & Co. (Inc.); Salomon Bros. &
Hutzler; Harriman, Ripley & Co. and Lehman Brothers

author¬

increasing

on

shares not decided
said to be imminent. Traditional

financing

underwriter:

vote

of additional

Disposition

No

upon.

will

Staten

Jan. 28 New York P. S. Commission authorized corpora-

reported planning'sale

1

trust

stock from

common

$2.50.

par

Feb.

Co.

stockholders

Missouri-Kansas-Texas

:.-:6

Thursday, February 10, 1949

(bonds only); Harriman Rip¬

ley & Co., Inc.; Dillon, Read & Co.; First Boston Corp.

bidders:

•

CHRONICLE

FINANCIAL

&

Halsey, Stuart & Co. Inc.

(Continued from page 41)

March

COMMERCIAL

THE

(694)

Spahr, Executive

City)
Friday Night Bond Club Annual

Feb. 12, 1949 (New York
Dinner Dance

at the Hotel Penn¬

Spring

Meeting

of

the

of

Board

L

Governors at the Greenbrier.
Oct.
'

1949

5-9,
Colo.)

.

National

sociation

(Colorado Springs,

Security
Annual

Traders

As¬

Convention

at

The Broadmoor Hotel.

Dec. 4-9, 1949 (Hollywood, Fla.)
Investment Bankers Association

Convention at the Holly¬

Annual

wood Beach Hotel.

.

,

sylvania.'
Feb.

14, 1949

New

Annual

(New York, N. Y.)
Curb
Exchange

York«■

Election.

Joins

Gillespie & Wouters

(Special

to

The

Financial

Chronicle)

\

GREEN BAY, WIS.—Andrew L.

formerly with Link,
Vice-President of the Economists' Feb. 15, 1949 (Denver, Colo.)
Gorman & Co., is now associated
National Committee on Monetary
Rocky Mountain Group of the
with Gillespie & Wouters, North¬
Policy,-who has been advocating Investment Bankers Association
" •
and Bond Club of Denver panel ern Building.
a return to gold convertible cur¬
.>•;iiv !.*? s*v t- ■ f
\rt:-4::;i UiV? '«Z
t--;v»> t'Si :• frtr*:
Olson,

Jr.,

.

,

Volume

169

Number 4776

THE

COMMERCIAL &

FINANCIAL

CHRONICLE

Reorganization Act,
America's small businessmen may

Congress and Problems of Small Business
(Continued from page 15)

-

business

during

panded.

We have also observed

tendency

; to

that

period

control

demands, the tremendous drain on
the earnings and
savings of our

ex¬

prices

people because of necessary post¬

a

domestic and foreign commit¬

war

and

Slit le

trade

practices

forced to carry.
The basic reason for this return

sociation

becoming increasingly dif¬

to

certain will

for

clothing industry, however, is the

agencies

of

our

govern¬

•■It

is

ficult

America

small

to

businessmen

operate

on

a

in

conditions

and

high

impact
competition.
The

strictly

and

more

into

selling

concerns.

ment

stores,

under

others

are

some

cases

their

tion

to escape the

way

effects

of

bankrupting

serious

a

THey can't shut

depression.

down and

to

lay off

their employees, reduce their
op¬
erations, and wait for improved
conditions.'',
V':-■
It
r

to

seems

XiJlem

our

problem

to

in

the

be

careful

to

possibility

guard

that

the

stage where

have
must

we

muster

the

on

other,

economize

threaten

must

we

growth

of
of

pre-

wear

industry is

ed

concentration

so-called

huge

now

in

a

to

war

our
a

as

service

practices

rather

customers.

Must

Cer¬

a
wide variety
apparel, not only

which

then,

and

is

as

but

to

un¬

well. I be¬

Laws
one

this, includ¬
ing the disproportionate share of
the ..national income that is
being
spent for other pent-up wartime

government

must

task

under¬

the enforcement provisions
against

unfair trade

will need

dis¬

equit¬

able shares of

materials—

our raw

and at prices which will not con¬
tinue to support the
gray or black
markets of this country.

turn,

imposes

This, in
obligation on

an

government to provide the

whereby those

means

materials

raw

are

made available in sufficient quan¬
to meet the needs of our

tities

smaller,

independent

producers

and distributors should those

engaged

neglect

in
or

their

unable

prove

now

production
to

dis¬

charge their responsibilities.
the

most

one

important

American

people

as

whole

a

confront is the

taining

problem of main¬
national income level

a

which will enable

tremendous
think

you

should

to carry our

us

postwar
burdens.
I
will
agree
that
we
for these

pay

out

rent taxation and at the

take

effective

steps

National debt.
in

such

a

of

cur¬

same

time

to

retire

the

This must be done

way

to

as

prevent

to the point where we
the victims of a ruinous

become

insolvency

and

national

bank¬

practices.

business with a small
sub-committee
of
the
Committee on Labor and Public

Welfare; problems involving
to the vast stores of

in

national

our

small
the

It is in

so

with

a

Public

on

Lands.

through

on

14 standing
committees of the Senate—15 per¬

haps

if

our Committee on
Rules
Administration
decides
it

and

necessary to have a small business

subcommittee
to
coordinate
the
work of 14 other subcommittees. I
know you share
my hope that this
will not occur and that

the

81s

are obli¬
gated to enact wise and sounc
legislation to maintain continued

I

which

Senate

tion

of

the

national

to

us

income

purchase

the

protection

to

state

your

case;

and

will

to 21.

With Edward D. Dail & Co.
(Special

ST.

mittee

Cramblet

aid

other problems.
Senate has not
the

and

Unfortunately, the
as

continuance

committee.

in

you

yet

of

agreed

that

are many of us
Senate, and there is a man
White House, determined to
keep this a country where oppor¬
tunity for the independent entre¬

is

preneur

liberty in

Indeed, there

indications that it

may

are some

not be

maintained;
very real

a

where
shall

sense

has

become

Edward

D.

Seventh

Dail

with

&

G.

H.

affiliated

Co., 315

Street.

He

H.

was

Walker

With Buckley Securities
(Special

LOS

to

The

Financial

lard Leabman has
of

joined the staff
Securities Corp., 530

Buckley

West

Sixth

Street.

He

Pledger

We

G. Brashears

&

confront

difficult, harrow¬

ing days ahead. We
with

tremendous

obligations

international

that if

faith

of

our

the

Yet I

into

stronger,

OIVIDEND

and

the

are

criteria

we

shall go

future

healthier,

of

and

democratic America than

MGM

NOTICES

a

THEATRES

•

The

MGM

<«

RECORDS

Board

of

declared

a

of

per

Directors has

quarterly dividend
share on the out¬
standing Common Stock of the Com¬

have

we

PICTURES

February 3rd, 1940

more

37Kc

payable on March 31st, 1949, to
stockholders of record at the close of

pany,

business

March 10th,

on

1949. Checks

will be mailed.

CHARLES C. M0SK0WITZ

DIVIDEND NOTICES

Vice Pres. &* Treasurer

IOWA SOUTHERN

RADIO

UTILITIES COMPANY

CORPORATION

Delaware

OF

AMERICA

Dividend Notice

Dividend

The Board of Directors has de¬
clared a dividend of 250 a share
the

on

Common

Company
1949

to

Stock

of

the

payable

March 1,
stockholders of record

EDWARD L.

At the

meeting of the Board of Direc¬

held

tors

1,

SHUTTS,

today,

February 7, 1949.

dividend of 87Vz

a

share, for the period January

1949 to March 31, 1949,

clared

President.

on

First Preferred Stock

cents per

February 15, 1949.

was

the $3.50 Cumulative First

Preferred

Stock, payable April 1,1949,

holders

of

record

the

at

close

O'okiep Copper Company

A. B. TUTTLE, Treasurer
New

Limited

York, N. Y., February 4, 1949

'

.

Dividend No. 9
The Board of Directors today declared

a

divi¬

dend of three shillings nine pence
per share on
the Ordinary Shares of the Company

payable

CAN

COMPANY

PREFERRED

The

INVESTORS!
This is your
opportunity to invest in

a

Broadway play
early Spring production. Con.

comedy scheduled for
risting of one set and a small
cast, the production will
two Hollywood names in the
leading roles.

a-,new

The

bulk of the

scribed.
each

are

.

the

Preferred Stock

April 1,

star

*

A

.

*

*

*

*

*

For

British and
Motion

i

on

this

'

Company, payable
record

at

the

COMMON

New

Bpx

York

S

8,

authorized

dividend

N.

Commercial

&

Financial

NO.

stock, without

common

1946.

the

The

South

African

the

of

distribution of
date

same

Shares

to

the

issued under

the

non-resident

tax, will amount to

69^8 cents

per

shareholders

share.

(

By order of the Board of Directors.
D

H. E. DODGE,

Secretary.
"THE GREATEST NAME

CONTROLS COMPANY

99

par

'

Green t burg, Pa.

value,

PREFERRED STOCK

Regular

quarterly

DIVIDEND

dividend
cents

of

(81

NO.

10

eighty-one
)

per

share

and

divi¬
share on

on

29-11/16*! per share
4M%
Cumulative

and

on

the

Con¬

3\4% Cumulative Convertible Pre¬
ferred Stock, $100 par value, of this Com¬
pany
has been declared, payable March

vertible Preferred Stock
have been declared, both

5, 1949, to stockholders of record at
close of business February 17, 1949.

to

payable

the

E.

April 1, 1949
stockholders of record

at

the close of business
March 10, 1949.
The transfer
not

HAWKINSON.
y

and Treasurer.

meeting of the
Of

of

Woolen

books will

be closed.

regular

quarterly

dividend

of

$1.75 per share on the 7% Cumulative
Preferred Stock payable April 15,
1949 to stockholders of record
April
1, 1949.
A

quarterly dividend of $1.50

share

on

March
record

per

the Common Stock payable
1949 to stockholders of

15,

February 28, 1949.

Transfer

books

will

be

closed

February 28/ 1949 and will

on

re-open

March 23, 1949.
DiVidend checks will be mailed by
the

Guaranty

Trust

Company

of

New York.

F. S. CONNETT,

WALTER H. STEFFLER

Treasurer.

Secretary &• Treasurer
February 8, 1949

Board

American

dividends were declared:
A regular
quarterly dividend of
$1.00 per share on the $4 Cumulative
Convertible Prior Preference Stock

A

quarterly

dends of 20»! per
the
Common Stock

the

Directors

Company, held today, the following

payable March 15, 1949 to stock¬
holders of record February 28, 1949.

COMMON STOCK

pay¬

31, 1949, to stockholders of
at the close of business March
8,

February 3; 1949.

asm

on

R0BERTSHAW-FULTON

Company, has been declared,

Secretar

32252

record

Deposit Agreement dated June 24,
net distribution, after deduction of

Checks will be mailed.

Y.

of

terms of the

Transfer books will not be closed.

29,

the

on

American

March

W.




Directors
said

holders of

the

Amateur rights

inquiries to

DIVIDEND

PREFERRED
A

Book Publication royalties

Place,

the

A regular
quarterly dividend of forty cents
(40tf) per share on the issued and out¬

1949.

Summer Stock royalties

holders

AT

MFG. CO.

record

y A

the

to

IN WOOLENS"

able

rights

1949

ALUS-CHALMERS

one-quarter

Park

of

10,

New York, N. Y., February 2, 1949.

standing

1

other foreign production

picture sale

address

of

declared

1949 to Stockholders of

Half shares of $600

Radio rights

details

quarterly dividend

of business "March
17,
1949. Transfer
books will remain open. Checks will be mailed.
EDMUND HOFFMAN, Secretary.

Television rights

Chronicle, 25

a

per cent was

close

of this
*

1949

three-quarters

..

Investors participate in all the net
profits of the producing
company per the Standard Production
Contract under the
Limited Partnership arrangement for
stage plays. Investors
also share (for
many years after the
Broadway run) in the
.

February 1,
and

;

.

receipts from

On
one

$60,000 production budget has been sub¬

The price of one share is
$1,200.
also available.

March

Ordinary Shares of the Company at the close
of business February 18, 1949.

STOCK

of

business March 7, 1949. ..v'

DIVIDEND NOTICES

ATTENTION

de¬

on

to

con¬

AMERICAN

and

LOEWS INCORPORATED

known before.

ever

pre¬

Co.

Co.

am con

spirit, courage,

past

future, together

forward

and

domestic

scenes.

was

&

burdened

are

problems

the

on

Chronicle)

ANGELES, CALIF.—'Mil¬

viously with

tinued at all. Because of
rigid ad-

We must

Chronicle)

MO.—Leonard

prevail.

to

special

Financial

know that there

of

to

The

previously

in the

Small Business

proposed

to

LOUIS,

with

in the

initia¬

hoped tonight to tell how

the

Association

spring meeting at
Greenbrier, White Sulphur
Springs, West Virginia, May 18

& Co.

to

Committee
I had

Bankers
its

the

North

tive and investment.
Fate of Senate's

Spring Meeting

hold

encouragement of

goods
prices

on

as¬

Distributors, Inc.

Investment

small, independent business
enterprise without which free en¬
terprise cannot exist. In any case,

the

produce at a level of
which reflect the real costs of
pro¬

duction, and real return

become

The Board of Governors of

forum

one

group whose sole concernisthe

production, full em¬
ployment, and equitable distribu¬
enable

Chronicle)

CALIF.—Da¬

H; McKellar has

Hold

I

maximum

we

Financial

IBA Governors to

will

you

still find in the

of the

this field that the Fed¬

Government, and
Congress in particular,

access

materials,

raw

domain

business sub-committee of

Committee

And

and

eral

Tub

of I. C. A.

questions

nvolving the peculiar labor prob¬

vinced

ruptcy.

to

ANGELES,

lems of small

tax

dropping

niel

Bank-

on

Currency;

our

burdens from reaching either
the point of
confiscation, or from

(Special

LOS

ousiness

one

But

Senate;

sociated with Shields &
Co., 210
West Seventh Street. Mr. McKel¬
lar was
formerly Vice-President

and

before

formulating solutions to these

great

preserving
small business in this
country. We
must
revise, modernize,
and
strengthen our antitrust laws, and

reasons to account for

forthcoming.

the Senate's Small Business Com¬

Strengthen

take in the interest of

sellers' market to
buyers' market. There are many
a

am

protection against
crimination in its access to

are

Antitrust

Here,

be

Obligations of 81st Congress

personnel,

Revise

and.

support which I

a

the

mittee of the Committee

As-- :ng

Clothiers

continued

■

sell

to

Retail

Second, small business

uncovered, imme¬
diate action ought to be taken to
put an end to them.

reconversion

moved

secretly competing

investigated during the present
session of Congress; and if such

the

economy.
men's clothing

manufac¬

expose

that these charges ought to

peace

Particularly in the
industry, we have
Quickly from

own

and

be

power

of

are

with

Clothiers

authorized civilians

enterprises.
Our
economy has now turned

corner

from

integration

turers who

lieve

corporate

whole
the

of

to

afield

good example of how small
business is affected by the incrriv

the National As¬

Retail

Furnishers

to

a

and

as

of civilian men's

might

opportunity

in the economic life of this
nation.
The men's

it is illegal, under
laws, for a trade as

Army
post
exchanges and Navy ships' service
stores, we are advised, go so far

centralized

which

power

freedom

the

extension of government financed
unfair
competition.

hand;

' the

of

At

Moreover, we are informed in
Washington, that the men's cloth¬
ing trade is also suffering from

lems confronting this nation.
We
have to prevent a serious
depres¬
sion and collapse on the one
nr.

time

antitrust

their

own

which strike at the foundation of

our
courage and intelligence
to solve the basic economic
prob¬

vt

manufacturers

secretly

customers.

free enterprise.

the

Furnishers,

the

information in¬

some

wear

of

of

problems of banking and currency
with a small
business sub-com¬

Congress

ligent support of the National

committees

ng

of

eco¬

problem which small business and

Congress ought to amend
the antitrust laws in order to
pre¬
vent such unfair trade
practices

ail

and.

un¬

tainly

Federal

now

that

sociation

against

reached

,

v/Ay' N-vb

my

sociation such

um¬

Government does not, in the proc¬
itself become a threat to our
We

of

our

43

|

Dan. H. McKellar With
Shields in Los Angeles

be asked to take
up their complex
with the several stand-

problems

of

will need the generous and intel¬

sales frills to the pur¬

addition,

present

ess,

freedom.

savings

'■".A

men's

our

pire
en¬
forcement of the rules of the game
of
free
and
private
enterprise
Yet, at the same time^ we must
also

the

independent

conditions

economy; to serve as
and
policeman in the

x

and
control retail outlets which are in
direct competition with their own

checking the growth

our

Depart¬
drug
stores,
and
paying especial atten¬

on

dicates
of

monopoly
and
concentrated
ownership. It is the duty of a
democratic government to chal¬
these

inde¬

extend¬

as

men's

pass

In

of

lenge and check

well

outlets.

are

necessary

government has is the

of

established
as

own

chaser.

that the greatest

me

in

lease

to

wear.
Filling sta¬
selling work clothes; new
chains
are
cropping up
called
"iron pipe" stores, which profess

de¬

pressions; but small business has tions
no

that

going
Chain

wear.

trying

even

pendent stores

Big business operates
system under which they
periodical

is
are

stores are in the midst of tre¬
mendous expansion programs—in

influences,

ing

these

are

increased

fact

men's

departments

survive

we

of

firms

more

flation disastrous to small business

can

high

buyers' market in the men's

a

Outgrowth of big business and
monopoly control, which create
vicious cycles of inflation and de¬

a

taxes

continued

free competition basis when much
Of. our national
economy is not
operating on that basis.
Small
businessmen are subject to eco¬
nomic

and

continuing

in

In this task

nopoly

the

freedom

opportunity, and the protection
fair

ments,
prices

and

of

areas

nomic life.

competition requiring the
constant activity of the anti-mo¬
ment.

a

enlarge the

(695)

to the

lerence

February 9, 1949

v,

'

44

(696)

COMMERCIAL

THE

CHRONICLE

FINANCIAL

&

Thursday, February 10, 1949
trolled

BUSINESS BUZZ

Congress passed the Aiken

law for lower

ible

basis, to

in 1950.

on...

for flexible supports.

campaign

A —^ gJ
jljL I ls\A/

Behind-the-Scene Interpretations
from the Nation's

Capital f

if\H

wi

A Cr U)

12

"progressive" Republican
who fought the Senate
Minority leadership of
Senator

jRobert Taft of Ohio,
set to follow Ives

toward

■does

is pretty well
whatever he

on

labor relations act.

a

If Ives says so, what
enacts may

the' Congress

be "two-thirds of the

Taft-Hartley law"

as

Senator Taft

predicted, and it

might

even

three-fourths.

\
-•

.A

It is predicted in

that the

be

*

,

»

all quarters

relations act will be written in
the Senate, and probably on the

saidi

floor of the Senate. This is
to

be

likely

*

Committee

Rules

is

expected

House from

culiar

steamroller

it

the

prevent

to

expressing

ideas

old

the

because

have

may

pe¬

any

to

as

the part the government should

play in regulating the practices
of the unions and their relations
with employers.

mittee is

Labor

Com¬

pretty well stacked for

floor

the

the

of

it being

Senate,

"undemocratic" to surpress a vote

only when it is the Administra¬
tion

wants

which

the

House

have

a
vote/ (There is
bility Speaker Rayburn
consent to quite as stiff

labor

12

"progressives"

.

follow

will

GOP

though

Taft

won

Ives,

aid,

than

in

program"

new

world.

for

two

the

Whereas the President

out

a

TpP*

when

"I

Although
clined

.

de¬

President

the

for

ask

to

.

more

any

for the E-I bank in the

money

the
even

Latinos at Bogota. The Congress

Budget

that

Leader,

then

didn't

1948

of

the

'

go

jointly to recom¬

million for

Ives group can probably dictate ;

political

so

what will be in the

the authorization.

new

act, for

this bloc of votes together with
the

other

GOP

What

southern

and

he

majority.

a

will encounter the stiff,est

by Feb. 15, the so-called "Legis¬
Under this Legis¬

tion

There appears to be little or¬
ganized opposition developing as
yet against the new minimum
wage bill. As drafted, the bill ac¬
tually paves the way for achieve¬
ment of

minimum of

a

$1.00 per

Lour, rather than the 75 cents it
supposed to provide. That is
because the Secretary of Labor
expects to name stooge "industry
is

committees"

to

$1.00 minimum

recommend

fast

as

he

as

the
can

it the bill becomes law.

Industry spokesmen point out
that

when

the

lowest

class

increased, then the

wage

skilled

could

of

labor has its minimum

common

classes

be

of

expected

more

workmen

to

demand

still higher wages, to restore the
old

gap

between

those

and

of

their

the

commonest

labor. Only a "buyers'
fo"

labor

could

for

big

nevertheless,
mum

wage

may

bring

ahead

lative

cerned with the dangers of defla¬

is

Congress

the

Budget

of

its

govern

of

rest

actions for the
year
within
that

total

the

framework.

members

Actually

both

of

the

now

dollar
in

the

mischief

ployers eventually.




Acheson,

mind

that

he,

that
this proposal
wouldn't work. During 1947 and

refused

of

to

State,

up

his
the

will

back

up

the

1948,

the

Republican

Congress

re¬

didn't

dare

for

fear

doing.

they

So

Congressional Joint Committee on
the Economic Report to

go

..In view of the

disposition of the

hold hear¬

the President's "economic
stabilization" program now, the
drive of Senator O'Mahoney upon
"bigness
in business"
is post¬
poned for an indefinite period.
O'Mahoney heads the JE commit¬

ings

on

tee.
r

'

Despite the fact that at the last

minute the

House decided

not

to

name one of its members
Chairman of the Joint Economic

fight to

;

at that. This year the Truman
Budget is even more shadowy and
tentative than in most years.

well fed up with the
Committee. They will pay little
attention to it, probably often re¬
fusing to attend meetings. Hence
any recommendations which Sen¬
ator
O'Mahoney and the Joint
Economic Committee may have,
will have little standing as com¬
mittee proposals.
pretty

higher payroll
taxes for
social security, although not ob¬

jecting to broadening the cover¬
age of social security at existing
payroll tax rates.

going

the

proposition their Democratic 79th
Congress voted. So they delayed
the
ceremony1 of
a
Legislative

the

by

nassed
This is

year

in

1949.

One

proof

of

from

taxpayer

the

where

news

in four

to

$

more

is not

mini¬

the

Treasury

with

some

low

35 important changes,

down

business for

the

on

the

sentiment

opening of Congress,
has been building up

vigorously

against

tax increase.
crease

may

While

pass

any

form

some

of

year,

works
em¬

tive

the

required

the

members

supports

build

farm

up

of

ing controls and vote GOP. They
did that a couple of times in mid¬
term elections in the 30's, and are

expected to do so again.
(This column is intended to re¬

taxing and spending commit-

inter¬

flect the "behind the scene"

pretation from the nation's Capital
and may or may

not coincide with
,

With
(Special

Crowell, Weedon
to

Financial

The

LOS ANGELES,
A.

Donlon

is

Chronicle)

CALIF.—James

Weedon

Street,

&

now

with Crowell,

Co., 650 South Spring

members

of

the

Angeles Stock Exchange.

Los

/

—

Trading Markets:
Ralston Steel Car

gets

Oregon Portland Cement

caught in the wringer on the farm

Riverside Cement A & B

price support question and finally
finds itself apparently "forced" to

Spokane Portland Cement

of
mandatory supports coupled
with

through

with acreage and

trols,

During

program

a

marketing con¬

in

Republicans

(and

Congress

little help.

the

1948

LERNER fiTCO.
Investment Securities

10 Post Office

Square, Boston 9, Mass.

Telephone Hubbard 1990

Teletype BS 69

GOP-con-

Teletype—NY 1-971

HAnover 2-0050

Kill, Thompson & Co., Inc.
NEW

Trading Markets

FOREIGN SECURITIES

Executive &

All Issues

70

YORK 5

Underwriting Offices

WALL STREET

f!ARL MARKS & PP> INCTrading Department

FOREIGN SECURITIES

SPECIALISTS

50 Broad Street

in¬

that the farmers thereupon
resent the production and market¬

come,

Tel. WHitehall 4-4540

the feature of the Legisla¬
Reorganization Act of 1946,

which

the

and has

Administration

the

If

probably will benefit.
market prices really
official supports and

below

S

if

will give

Firm

of

order

small chance of passage.

tax in¬

the House

this

years.

s|i

Initially the House Democratic
leadership planned to simply "for¬
get"

-

when

are

ing of earnings from stockhold¬
ers.
The
revival
of this bill,

high
Since

of all joint
committees." That is, it is becom¬

the

recom¬

the

to

corporation

alleged unjustified withholding-

go

if

if

s

of

for instance, would shift

Treasury

GOP

is

It

proposed

reforms.

of

burden

the

last

future
which

bill

the

number

a

House

doubtful

a

Budget until May 1.

way

ing primarily a Senate Commit¬
tee.
It is
possible that the JE
Committee may scarcely get into

issue,

making

bill

tax

The Joint Economic Committee

"is

versus

why Brannan asked

the "Chronicle's" own views.

administrative

The

Iras

*

*

*

Is

of the Older heads
said
that
if
they "forgot" the
Legislative Budget, they would be
under attack for ignoring the very
some

Committee, the boys in the House
are

higher

supports

price

postpone

the

pose

*-

Finally,

Hence

will fight hard to
prevent any increase in taxation
in any form. They will even op¬

them,

This year the Democratic Con¬
gress at first decided to see if it
couldn't just "forget" to draft a
Legislative Budget (which has no
substantive standing) and let it

quest.

Truman's

Mr.

inflation.

over

con¬

decisive groups

the

them for
drafted a
Legislative Budget which they
paid no further attention to.
so

worries

more

are

with

than

tion

thing,

Democrats would jeer

through the E-I bank, then Mr.
Truman

time

but

Latinos

the

to

out

pass

long

wanted to drop the whole

wants

makes

too,

parties have been saying for a

is, is that

Secretary

new

Dean

this.

demands,

wage

the situation

heads

the

mar^»t"

forestall

While the outlook

strong

wages

and

the

in

older

lative Budget."

$500 million for the government

It is

generally believed in Con¬
gress
that
the
Administration
■draft of its proposed labor-rela¬
tions act was poor, that it was
vulnerable, and that the Admin¬
istration has lost ground in trying
to
prevent proponents of TaftHartley from questioning labor
leaders.
Furthermore,
the
new
Truman
labor
bill
is J pitched
strongly in favor of the CIO, if it
was not
actually written by CIO
attorneys, as will appear shortly.

the

if

Democratic votes will probably

loans,

at the earliest) it
opposi¬
Senate. In Congress

not before May

mend, and the Congress to adopt

idea

the

for

demoralized

plus strict marketing and produc¬
tion controls are voted this year,

leaky water pipe.

finally solved the problem with that

supposed to set the outside limits
revenue and expenditures, and

message,

of tossing away $500

this

point out that if
they again' voted for the lower,,
flexible supports, they would only
arouse
the
antagonism
of
the
farmers.
Yet if higher supports

tees of Congress

together, fast to

a program.

quite

necessity for taking a

on

Republicans

only had

program

be

to

mendations.

gram" he is getting the Adminis¬
tration big-wigs

Senate

as

to

he enunciated the "bold new pro¬

blueprint

conse¬

Committees

the

of

and that is

years,

idea and not

the

suffer

good possibility.

a

flexible

also
President

was

World New
he forgot to
mention it to E-I bank, the one
Deal

'

thereof should surpluses

the

over

stand

the

studying

to

have

seem

impatiently that he had

declared

and

House

the higher
supports, they are
for

go

Agriculture report that Mr.
Brannan
and
his
department

institution

It

while

that

noted

White

the

on

foreign

of

other

any

the

are

higher

mandatory

Members

'

Republican

if

ing like

a system of exporting U. S.
"technical know-how" under the

"bold

farmers

begin to pile up as is now look¬

year

he
may ask for it later. The $500
million requested last year was
the half billion promised to the

of

the

for

the

Trumanites

likely to be around long enough
to

January

it is pretty certain

Since

the

the

mandatory

ing

White House wants.)
*

that

Yet

the $500 million which
he requested for the
Export-Import Bank, even though
that bank comes closer to provid¬

the

as

think

Agriculture

for

last

gag on

a

maybe

quences

possi¬
not

a

it

that

supports.

President Truman skipped ask¬

ing

President had
they naturally

opine

do,

are

they

Of

»):

>■:

to

Since

Congress for

80th

the

what

and his

Agriculture

asked

all

saying.

may

amendments

act'

to

of

frightful tizzy.

a

a

as

an

on

Mr. Brannan

now

doing

large part of the
industry must be under the wagehour act, you might as well have
all of it covered," so many are
long

Congress can vote their opinions
changes in the labor law is on

Administration, then

So

broadening of the wage-hour act
to cover virtually all industry as
well
as
"interstate
commerce."

government institution equipped
by experience to advise him.

Truman

boosted the Demo¬
following in the

electoral

Department
in

in

was

supports,' and

states.

corn

the

the only place where members of

the

result,

a

which

lower

criticized the

been

Senate

the

Since

the

of

cratic

affects their

"So

his

and

countryside that

GOP

bill to see Ifc^w it
particular industries.
In many cases, producers are unr
concerned
with
the
proposed

studying

labor-management

new

the

was

as

C.—One Senator who is neither the recog¬

political party nor a member of the Labor Com¬
mittee, Senator Irving Ives of New York, may hold the key to the
kind of labor-management relations law which Congress enacts ikia949.
Senator Ives may hold the key<j>
Most
to the picture because the group
employers
seem^ tg be

nized leader of any

of

During the

Truman

word around the

favor

Senators

Mr.

bright boy, Charles Brannan. Sec¬
retary of Agriculture, spread the
it

WASHINGTON, D.

supports, on a flex¬
into operation

come

The President had asked

••

<

120 BROADWAY

■

New York 4, N. Y.

AFFILIATE: CARL MARKS * CO. Inc.

CHICAGO

'

Tel. REctor 2-2020