Full text of Commercial and Financial Chronicle : February 12, 1959, Vol. 189, No. 5820, Section 2

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ESTABLISHED

°^cS,
13

1959

Reg. U. S. Pat. Office

Volume

New York

Number 5820

189

Price 50

7, N. Y., Thursday, February 12, 1959

VEDITORIAL
,wy
r*

There

this

are

substantial and influential groups

country who apparently

l'ortable

confident about the future

or

in

By

cannot feel com-;
long

so

as

the

exceed

balanced
John
the

This

income.

budget is

a

for

reverence

an

Maynard Keynes (later Lord Keynes) and

brain trusts. There is much

reason

to

show the world that

inflation. Mr.

suspect that

and

doleful wail that

shall

we

achieving real

outperform
without

son

efforts

being blind to

underlying the budget, the Treasury head expects: (1)
recession; and (2) $374 billion personal income and $47

facing

period of recession and
to inflation

up

means

,,

expectations deter savings and that

ary

ment

imperils

currency

slightly less vigorous

When I testified before the Joint Economic Committee
last year, on behalf of the Federal Reserve

Board,

I welcome the

fiscal

eco¬

outlook

ment
No

rising at

was

ward

a

disturbing

opportunity to discuss the government's
some
of its implications for
the
nation's economy. First, I should like
to discuss the budget for the fiscal
We estimate total receipts
billion. Of this total, $40.7
expected to come from in¬
dividual income taxes, and $21.4 bil¬
1960.

year

of

pace.

$77.1

billion is

could be sure how far down¬

one

adjustment would go, or how

lion from

long it would last.

corporation income taxes.
assumptions for the calendar

that, with the
exception of the catastrophic recession
of the 'Thirties, every moderate cy¬

The

clical decline since World War I had

and $47
These

We pointed out then

been checked in the course of

It

that

present in the

were

were

favorable

are

billion for corporate profits.
income
assumptions were
after careful studies and
consultations utilizing all data and

year.

arrived

economy

eventual

to

But at that time

covery.
W.

a

McC. Martin, Jr.

Robert B. Anderson

know, nor did we then expect, the
vigorous recovery would
so
soon
swing,
and
that
contraction
from
1957
levels of activity would be shorter in duration than most

Continued
♦Statement

by Mr. Martin before
Washington, D. C., Feb. 6, 1959.

28

slightly lesser rate than we experienced after the 1954
recession.
Somewhat larger revenue gains, too, were

full

in

be

on

page

at

judgment available both inside and
outside
the
government. The in¬
creases they represent imply a con¬
tinued vigorous recovery, but at a

re¬

did not

we

1959 underlying these figures
$374 billion for personal income,

year

further emphasized that many

was

forces

quite usual, that whatever the others are getting,
they are not getting as much money as they
should have—well more grist is supplied to the
critic's mill. Unemployment apparently lingering
somewhat
longer than had been expected
strangely adds to the need to spend more for this,

than that of post-1954

and

activity in this country was
receding. Contraction in output and
employment was general. Unemploy¬

never

recovery

corporate profits in 1959. Says rejection of major tax
cuts last Spring has been vindicated by events.

debase¬

free institutions.

our

nomic

page

Denying

being negative, Mr. Ander¬
the country's fiscal problem down to the

fact that the association of deficits to inflation will keep

progress

Federal Reserve's

narrows

need not balance the budget.

we

aiding Treasury
financing and dollar stability; and warns that inflation¬

denies that

up" with the Soviets and can never hope
to be as secure as we might be so long as we
insist upon balancing the Federal budget. To
hear a good many of these critics talk, one would
suppose that there was some sort of magic in a
fiscal deficit. The cry that we are not spending
enough on defense is heard far more often than
that we are not doing enough. When the repre¬
sentatives of each of the service arms say, as is

on

attitude that

we are

ecafitasic growth; outlines bank's role In

"catch

Continued

about the size of the recession-induced deficit and the

people from saving and, also, that orderly finances is the
key to the free world's strength. Turning to assumptions

sort of pay-as-you-go program.

more

j

<

recovery;

With each boast from Moscow, there comes a

new

free economy can

a

Martin reviews

the past 16-month

over

Keynes would now regard much of the cur¬
rent programs as "modernism turned sour and
silly." What Franklin Roosevelt would think of
them would, not be easy to guess. His actions and
his policies were never easy to forecast. There is.
however, no room for doubt that many if not
most of those who are today proud to call him
master see more virtue in unbalanced budgets

;

Secretary of the Treasury

-

that paying our way now is

totalitarian economies in

Lord

than in any

-

Country's fiscal chief explains why he is most concerned

to

his

and

By HON. ROBERT B. ANDERSON*
"

flation"; and (3) end the cost-push price spiral, if

un¬

tribute to the teachings of

preachings of Franklin Roosevelt

McChesney martin, jr.*

Country's monetary head makes clear we must: (1) have
budgetary surpluses and not deficits in prosperous times;
(2) cease using the banking "high road to monetary in¬

expenditures of the Federal Government do

not

William

Chairman, Federal Reserve System

•

Copy

a

Qui Fiscal Situation and
Its Impact on the Economy

Recovery and

i

Cents

Continued

34

by Mr. Anderson before the
Washington, D. C., Feb. 5, 1959.

"^Statement

the Joint Economic Committee,

tee,

on

page

36

Joint Economic Commit¬

ir
PICTURES IN THIS ISSUE

—

Candid photograps

taken

Annual Dinner of the BOSTON SEC RITIES

DEALERS

on

the

TRADERS

35th

occasion of the
ASSOCIATION

State, Municipal

in today's PICTORIAL SECTION.

appear

in

and

U. S. Government,
Stale and

Municipal

STATE

Securities

MUNICIPAL

AND

Public

Lester, Ryons & Co.
623

Bo. Hope Street, Los Angelei 17,

teletbo>e:

HAnover 2-3700

Associate Member American Stock Exchange
Members Pacific Coast Exchange

UNDERWRITERS

BROKERS

DEALERS

•

Encino, Glendale, Hollywood, Long Beach,

THE flAST NATIONAL CITY MNK

BO*a DEPARTMENT

MEMBERS NEW YORK ANO

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CABLE:

San Diego, Santa Ana, Santa
Inquiries Invited

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{

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THE

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Chase Manhattan
BANK

California Securities

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new york 5, n. y.

DEPARTMENT

Pasadena, Pomona, Redlands, Riverside,

OF NEW YORK

Burnham and Company

ST.,N.Y.

BOND

Offices in Claremont, Corona del Mar,

BANK
30 BROAD

Members New York Stock Exchange

BONDS

CHEMICAL
CORN EXCHANGE

j

Bonds and Notes

California
•

Housing Agency

Correspondent—Pershing A Co.

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COBOHNMAM

i

Underwriter

•

To

Dealers,

Dealer
ESTABLISHED

and

Brokers

CANADIAN

1832

The Canadian Bank of Commerce

SECURITIES
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-

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■»

■

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tiaiiB

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STREET

NEW YORK

.

1

4, N. Y.

COMPANY

TIRST
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i

for




DIRECT

VIRES TO

•

PERTH

AMBOY

NEW YORK

.

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and

Co.

.

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CHICAGO

!

j

Municipals j

Halifax

Municipal Bond

1 NORTH LA SALLE ST.
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market.

private wires to Toronto, Montreal,

Ottawa, Winnipeg, Calgary, Vancouver,

MONTREAL AND TORONTO

Goodbody &
115 BROADWAY

Direct

California

buy these rights at the

Domduox Securities

Teletype NY 1-2270

MEMBERS NEW YORK STOCK EXCHANGE
BRIDGEPORT

offer to

DEPARTMENT

CANADIAN

...

■/si*

-

We

current

Members
f

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in

Banks

Maintained

(Rights Expiring March 17, 1959)

T. L.WATSON &CO.

-

Markets

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Net

Distributor i

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2

The Commercial and Financial Chronicle

(758)

For Bank?, Brokers,

The

Dealers only

week, a different group of experts
Sb the inYestment and advisory field from all sections of the country
participate and give their reasons for favoring a particular security.

to you to
of active

When it's important

broad

a

markets in
our

a

range

hurry, you'll find

large and experienced

trading

department

can

be

they to be regarded,

are

as an

intended

to

private wire
combined with com¬
plete Over-the-Counter facili¬
ties, enables you to get the
best possible coverage of the
markets you want.

Hercules Galion

(Page

Analyst

Ranco

Incorporated

its in¬

This business which had

a

in

ucts, Inc. in 1955 upon the merger
Steel Products

New

Corporation

Corporation
Established

Associate

Both

3Iember

American Stock Exchange

120 Broadway, New York 5
WOrth 4-2300

Teletype NY 1 -40

BOSTON
PHILADELPHIA

Private

Wires

CHICAGO

•

SAN FRANCISCO

•

to

Principal Cities

and

compa¬

1,

On

1956,

stock

the

low

K i n g h a m
Trailer Co. of

Lo

and

is

ated

wholly-owned subsidiary.

as a

Galion

makes

many

products for the road building in¬

dustry, including telescopic dump
trucks, batch trucks, mobile conrete mixers, a line of hoists and
other heavy duty equipment as

Your

RED

well

special vehicles for refuse
removal,
vans,
steel and light¬
as

Other
burial

must carry on

I

products

vaults

porcelain

proof

in

either

finished

kitchen
equipment for commercial instal¬
or

and

copper,

field

assembles

of

the

of

contract

machines
the

and

partially

mechanism

popular

work,

of

pin-spotter

one

ma¬

the

in

ten

period

year

99

WALL

STREET

NEW YORK

common

convertible

fund.

—

Refined

issues,

5, N. Y.

514 %

SUGAR
—

Debt

Exports—Imports—Futures

consists

company,

subordinated

sinking

a

of

$2,000,000

5%

issued

notes

connection with the

$640,000

and

in

acquisition of

the Kingham Trailer Co.

Now,
DIgby 4-2727

of which

one

has

and

notes due 1972 held by an

insurance

Liquid

shares of

835,845

stock and two small pre¬

ferred stock
is

Raw

has

no

come

after

taxes

sales

in

the

under

there

the

that

heavy duty truck and trailer busi¬
ness was

satisfactory in the period

which the 1958 annual reports of

major companies refer to
"late business recession."
Galion suffered

of the

oTeeweandGompanv^
Established

cal

Sept. 30, 1958 with

on

a.

profit after taxes of $108,000.

1930

This is not

Telephone HAnover
Bell

rest

industry, but closed its fis¬

year

net

the

2-4850

Teletype—NY 1-1127

good showing when

a

compared with the previous year's
net

of

$741,000, but the financial

position of the company is strong
and

has

200

the

its

products

of

unsettlement

in

all

of

the

12

months

of

Hercules Gallon's fiscal year 1958.

Sept.

12V2%

the

Feb.

after taxes 36%.

sales

Feb.

Trading Markets

should

show

provement
-

Direct ff ires To

Los

Angeles—Marache, Doifiemyre
& Co.

Denver—Lowell, Murpliy &
Company, Inc.




I

find

Galion

considerable

a

over

the previous year.

attraction

stock

earnings.

stock strikes

in

Hercules

because of

dent opportunity for
in

the

evi¬

improvement

Furthermore,
a

im¬

popular note.

the

The

price $5, the dividend 5 cents quart

terly since 1953. The stock
on

the American Stock

is listed

Exchange.

a

of

of
Yamaichi Securities Co., Ltd.

of the best

one

York, Inc.

Affiliate

stock

common

Brokers

111

&

V

Investment Bankers

Broadway, N.Y. 6 COrtlandt 7-5680

covered the $1.20

jeopardy

there

as

Feb.

amply

dence of improved

operations.

payout

approximately

of

increase

earnings,

could

and

In

of

liabilities

of

cur¬

excess

Association

in

the

*

V

Mar.

field

•

*

expanding

"Ranco's" business depends on

Pa.)

in

well

air

is

company

research

should

Temperature

new

uses

likely

to

in the future.

Co.,

a

April

could

add

controls

If this

Group

Apr.

are

3,

10,

controls,

as

great

a

percentage net

sales

as

present opera¬

earnings

for
even

after allowing for deletion of the
common

stock

operations

of

"Ranco's"
could

(New

an

in

★

★

of

Amer

York

City)

FINANCIAL CHRONICLE

Security Dealers As¬
33rd

1959

dinner

annual

■„

(Toronto,

Bond

annual

Traders

dinner at

25 Park

Place, New York 7

Canada)
Associa¬
the

King

1959

(St.

Hotel.

29-30-May

April

Louis,

1,

Mo.)

Louis

St.

Group

Municipal
Dealers
annual spring party at

June

18,

1959

Paul, Minn.)
Cities

Twin
annual

White
Bear

Bear

Club

Bond

picnic

and

Yacht

38th

outing

Club,

at

White

20-Year Performance of

}

35 Industrial Stocks

Lake, Minn, (preceded by

cocktail party June 17 at the
Nicollet Hotel, Minneapolis).
a

1959

National

impor-

N. Q. B.
OVER-THE-COUNTER i
INDUSTRIAL STOCK INDEX

(Minneapolis-St.

v

Nov. 2-5,

international

play

advertisement

Investment

outstanding needed

to make the acquisition.

'Finally

your

Insti¬

an¬

acquisition

"Ranco" would be increased

session

the Sunset Country Club.

on

share

place

THE COMMERCIAL AND

1959

Edward

will

income

per

tion

gas

returns

tions,

to

(Philadelphia,

Association

sociation

operations and

new

smart

at the Waldorf-Astoria.

have, wider

$5,000,000 to their

nual sales.

1959

New York

Diversification

oven

it's

prod¬

manufacturer of

electric

So

ica annual meeting at the Hilto»

the

through the acquisition of Wilcolator

Grand

Belle vue-

.

Toronto

certainly

the

of

annual

the

Hotel.

conducting an active
for

35th

annual

Bankers

fare

Furthermore

program

new customers.

April 1-3,1959 (San Antonio,Tex.)

conditioning

these

1959.

securing

of Investment Banking.

Texas

and

York

K

the

industries

useful tools in

most

★

of

controls.

and

New

dinner in

22-27,

Seventh

of

Much

automotive

of

Hotel, preceded by a
member-guest
luncheon at 12
o'clock).

the past—a participa¬

temperature

of

one

Association

Bowling Match.

Philadelphia

tute

tion

is

Stratford

in the future is what made
in

Traders

Ballroom

current assets

and

outstanding.

grow

the
(Philadelphia, Pa.)

midwinter

cash

What is likely to make "Ranco"

it

Advertising

an¬

Philadelphia-Security Trad¬

of

with

twice current liabilities and longterm

43rd

dinner at the Detroit Boat

annual

;

equivalent in

rent

Detroit

a

sound,

are

"V'O

dividend' Feb.
27, 1959 (Philadelphia, Pa.)
only a couple
Investment Traders Association

be

"

of years away.

of

Investment

50%

a

(Detroit, Mich.)

1959
Club

Feb. 26, 1959

ers

of

(Chicago, 111.)

Club.

fact, judging from the company's
record

Bro¬

dinner

Club of Chicago 48th an¬

24,

nual

evi¬

every

Customers'

anniversary

1959

19,

Bond

to be in no

is

of

20th

meeting and dinner at the
University Club.

'

annual dividend

and this now appears

Field

Investment

17, 1959 (New York City)

Bond

income

net

earned

and

quarter

of

nual

Nevertheless the

share

per

broaden "Ranco's"

creased and the first fiscal

equity

Securities Company

meeting at the Hotel Delmonico.

fiscal

1958,

30,

and

in¬

has

-'J

so

of room for

For

de¬

products

••

EVENTS

felt the effects of the

mand

its

unusually,

an

1959.

kers

Since the first of October the
for

write 4

Yamaichi

earnings with

an

The

Association

dropped

ucts.

period

heavy industry field embraces

almost

Over-the-Counter

for

improved.

The

the

market

information

slightly

million' mark

$30

ended

year

Hercu¬

with

or

251%.

increased

recession.

recent

the

as

current

;.-.4 4 .Call

COMING

growth.

grow

les

in

1948-57

1957 were

still plenty

is

Finances

boasts

one

share

per

Tokyo, Japan
tion

and net in¬

sales increased 210%

$1.74
Hercules

For

opportunities for capital apprecia¬

chines.

LAMBORN & CO., Inc.

for

"Ranco" looks like

back to 1948 we find an unbroken

"Ranco"

the

Hercules

STOCKS

earnings

earnings ' and
dividend
record.
More interesting is the fact that

lations.
In

Taking

JAPANESE

re¬

with truly great growth

In

heat

are

exist.

offlcea

selling at less than

offers

value

company

ingredients of
growth
situation
statistics
dating

interesting

an

branch

our

Its

of New

Poole

the

all

Yet

Italy.

$2

potential

yield

potential.

Peak

weight bodies and trailers.

CROSS

C.

since

1955.

times

good
Alan

the

A stock

5%

a

public

hands

oper¬

Hercules

12

it

been in

Hubert F. Aiwaiei

and

"Ranco's"

exceed

level.

not be
fully seasoned
as it has only

Kentucky
was
acquired

Direct wires to

progress.

1959

should

may

i svi 11 e,

u

In

so

that

is

Scotland

in

markable

this

sells

refrigera¬

(40% owned) is also showing

a-

rea¬

why

son

Oct.

The

"Ranco" has subsidi¬

Europe.

5%.

Possible

Cleve¬

near

growth.

NY 1-1557

:

Birmingham, Ala
Mobile, Ala.

industry is growing rapidly

aries

2 4,

vi'eld

to

Exchange
Exchangs

New Orleans, La. -

associate, Australian Controls Ltd.

$1.20 dividend

nies had plants
at Galion, O.,
land.

in

Ex¬

paying

part in the company's earn¬

ings and
tion

York

around

Products Co.

1920

tant

change, selling

Steel

Members New York Stock

"Ranco"

of

the

on

Stock

Central

stock

common

listed

Steiner, Rouse &Co.
HAnover 2-0700

Incorporated

Hercules

Ohio

C.

19 Rector St., New York 8, N. Y.

yet one may find this combination

and

Alan

—

yield is a
these days and

ent name of Hercules Galion Prod¬

the

Bought—Sold—Quoted

2)

Incorporated

5%

ception in 1905, adopted the pres¬

New York Hanseatic

Atwater, of Wood,
Co., New York City.

Members American Stock

with

commodity

rare

Alabama &

—

Products Inc.
Growth

of

Products, Inc.

Poole, Research Analyst, Hemp¬
hill, Noyes & Co., New York
City. (Page 2)

Hemphill, Noyes & Co., N. Y. City

Members N. Y. Stoek Exchange

F;

Walker &

Ranco

Research

Wood, Walker & Company,
New York City

nationwide

system,

Galion

Hubert

ALAN C. POOLE

HUBERT F. ATWATER

4

Participants and

Louisiana Securities

be, nor
offer to sell the securities discussed.)
not

are

a

big help.
Our

contained in this fortun

Thursday, February 12, 1959

.

Their Selections

Hercules

fee articles

.

This Week's
Forum

A continuous forum in which, each

Try "HANSEATIC"
reach

Security I Like Best

.

ciation

(Boca

Raton,

Convention

Club.

ON

REQUEST
'

!'

National Quotation

ri»

Security Traders Aw
Annual

the Boca Raton

i

FOLDER

»

Bureau!

Incorporated
*6 Front Street

New York 4,

NA

Volume

Number

189

5820

.

.

(759)

The Commercial and Financial Chronicle

.

3

/.

index

Common Stocks and Inflation
Assistant Professor of Finance, North Texas State

[icHTtnsmn

$. So

Articles and News

By MARTIN E. ROONEY

Page

mmmmm

College;

Our

Registered Investment Adviser

Fiscal

—Hon.

Situation and Its Impact on the

Robert

Anderson

B.

AND COMPANY

Economy
Cover

_

THE DISENCHANTED

inflation fears, rather than profits
investible funds, constitute most important factor

Professor Rooney maintains
or

of

amount

Recession, Recovery and Maximum Economic Growth

stock buying at "heretofore
Points out some factors undermining func¬
tioning of common stocks as permanent good anti-inflation
hedge. Rejects widespread assumption of an indefinitely con¬
tinuing moderate inflation. Foresees following long-term course
of events, if government fails to take definitive corrective meas-.
sures:
(1) in 1959-1965 excess productive capacity and com-:
petition checking inflation, but with excess demand building
up; (2) from 1965-1975, inflation becoming rampant, with
"explosive" government deficits, skyrocketing of prices, and
public's fear of property confiscation; and (3) finally 1975-'
1985, repudiation of government debt and obligations,; with,
oncoming of totalitarian regime, and crushing of labor unions.

motivating

j

present. common

i Common

Petroleum in

:—Ira

•

on

and

June

1958, all

the

in

value

market

billion

to

from

an

both years

estimated $269
an

crease

in¬

the same,

of

billion,

$44

1959

—

Let

-

taken by

quar¬

times

ters

the

common

stocks

for

1958.
As

truly
Martin

rate

1

profits

billion.

;

E.

Rooney

v

been
were

.

given. Corpo-

excellent

for

1956,

In

billion.
During
the
last
quarter of
1957 and
the first
^quarter of 1958 profits were fall: ing
sharply
(about
one-third)
under the levels of a year earlier.
In the late spring of 1958 a busi¬
ness recovery
set in, and profits
^are believed ' to have improved
$21.8

•

.

-Sufficiently
to bring
the
1958
figure to $16 billion—and maybe
more. For 1959 and especially the
'

great boom should
; set-in and profits ought to reach
early 1960s

a

call

record levels. This reason we

'

II

UNIVERSAL OIL

i

PRODUCTS CO.*

__

:

12

___.

SPUR OIL
13

___

V.

COMPANY*

—O.

Kelley

Wells.

Anderson

BOBBIEBROOKS, INC.*

20

*

21

"profits " argument."
This
writer
^does
not
consider
this
reason to have been the primary
fuel behind the rise in prices.

J.F.Reilly&Co.,Inc.

for

inflation

more

voters

home,

seem

1

Exchange PL, Jersey City
DIgby 4-4970

is

>

Commerce

*

debt which

J Rise Argument

of

:

,•

Lake

City

18

Reported by

L

21

_.

Pacific Uranium
23

Rukeyser Terms Eisenhower the No. 1 Bond Salesman

Leeds &

'

Northrup

Regular Features
(Editorial)

See It

We

Bank
•

_______

Reeves Soundcraft

__Cover

:______

J

23

Stocksi_________

and Insurance

Midwest Instrument

32

Bookshelf

Business Man's

2

Coming Events in the Investment Field

8

Deale'r-Broker Investment Recommendations

•.;

growing

••

many say

"

'

-T
" r
•;
,r - .»
r;
From Washington Ahead

-

..

■

Singer, Bean

18

Ejnzigi "Future of the Bank of England"

-

,
financial
there is no
*'
way
to cut back on; vast sums
^
spent on farm and veteran assist¬
Another
cause
is
frequently
ance.
Old age benefits have be¬
given. Both the public and insti¬ come
a
political football; • and
tutions have a greater amount to
what may be worse, -our foreign
invest; and what is possibly of aid
program apparently requires a
more significance,
each is show¬
never-ending stream of billions.
ing a marked disposition to invest
People have begun to feel that
a
higher percentage in common even if we did sacrifice at home
stocks and less in bonds and mortand save a
billion or two, the
■; gages. Little weight will be given
government would simply turn
to this explanation, for the writer
around and pour the savings., into .''
believes it has only minor signifi¬
some foreign aid program. So why
cance except as it demonstrates a
attempt to economize?
tangible result of the last reason,
A government policy of cheatirig
how to be given. ,"
savers
through inflation in order
to maintain easy money has
all
The Most Important Factor
but destroyed a public market for
Fears of inflation are so great
bonds, at a time when the na¬
that investors feel driven to seek
tional
debt
proves
difficult
to
protection
by buying
common
manage and billions upon billions
stocks at prices that heretofore
are
financed in short-term ma¬
?. would
have seemed
outlandish. turities because the government
This reason, regarded as most imjust won't or can't pay the price
portant, is referred to as the
Continued on page 32
"flight from the dollar." What else

a

burden and

»

Direct wires to Denver &

consumer,

Necessary defense expenditures
constitute

16

'

housing, corporate, municipal and
state debt probably exceeds $530
billion.

__

Agents

Purchasing

Per capita national

total

—

Substantiating Business Upturn Evidence

stood-at $156 im 1932

the

addition,

__

Salt

that amount today. In

10 times

Department

Teletype: JCY 1160

First National City Bank Reflects on Gold Price

crying for more and more handouts and to be taking an indif¬
ferent
attitude
concerning j the ■'As
consequences.

;

Industries Analyzed by

Volume Projections for Various

>

be

to

Stock Exch.

28

;_

;

Brazil, Argentina and Chile Infla¬
tion is apparently out of control.

is

Investors—Roger W. Babson

Hedge Against More Inflation
case

request

¥

24

-

on

Members Salt Lake City
;

purchasing power and, since the
beginning of the New Deal, 55%.
Nearly all the Western World is
suffering from inflation; and in

At

Prospectus

22

.

—Dr. - Ya-lun Chou___

•

"

14

.___

Monetary and Fiscal Controls to Meet Our Economic Goals

going to' sell

are

powerful as to be almost com¬
pletely
irrefutable.
Since *1824
the
dollar has
lost 80%
of its

the

•

;

Social Responsibility Acceptance Is a Corporate Must Today

so

averaging
$23
1957 they declined to

and

1955
;

a

CORPORATION

Canadian Economic Outlook—Hon. John G. Diefenbaker—___

(

increase?

have

a

The

rcnor mo u s

■

even

The Case for Buying Stocks

e ve r

10

____

li

-j-J.-

Agricultural Outlook-r-O.

Tourist Tips for

What caused

S

Ralph A. Young.

The

profits

reasons

_____________

Budget ahd Monetary Policy

Electricity in Our Future—S. L. Drumm

much higher prices.

cor¬

this

Gable, Jr

—Hon.-C. Douglas Dillon___

/

those who believe infla¬

total

■for

ARVIDA

Setting the Record Straight About Soviet Trade Desires

■;
\

tion will not be checked and that

estimated

porate

J.

t

examine the position

us now

STREET, NEW YORK

9

__

Penetrating Effect of Federally-Controlled Interest Rates
U—Walter C. Nelson

'

three

WALL

Telephone: WHitehall 4-6551

6

.

Hall-

The New Federal

increase in

40%

•

profits of 1950 over 1949.

and

two

to

the

Obsolete Securities Dept.
99

"Fabulous Sixties"

Today's Financing Views and Debt Management Problems

will probably be about
and profit recovery for
likely to exceed (or

equal)

even

billion, an
amount equal

5

McMillen

J.

„^Charles

not

is

3

Cobleigh___

—Orville

roughly $269 billion as against $69
billion 10 years ago? Profits for

$225

Rooney

Particular

What Should Be Considered in Reading GNP Projections

v

explain
present \ public
willingness to value stocks on the
New
York
Stock
Exchange at.

the New York Stock Exchange

rose

U.

E.

Sinclair in

General and

V-—Wayne L.

•

could

of

end

stocks listed

their faith in

generosity at 99 Wall!

Cover

.___

The Outlook for Business and the

r

Between

Martin, Jr..,

Stocks and Inflation—Martin

outlandish" prices.

December,

McC.

renew

man's

—William

—can

*

••

•

MACKIE,

&

;• ••

.

12

of the News—Carlisle Bargeron

45

Indications of Current Business Activity
Funds

Mutual

About Banks and

News

Bankers-:

Observations—A. Wilfred

Teletype NY 1-1825 & 1-4844

^

Direct Wires to

<

46

—

26

—

May—

San Francisco

Philadelphia

4

:

Governments

on

Los Angeles

Dallas

Clevelane
•

Our Reporter

inc.

40 Exchange Place, N. Y.

HA 2-9000

.

Chicago

't'T*A

27

_____

•

,

v

.

Our

Reporter's Report

44

Securities

Railroad

The Market..
The

I Like

Security

The State of Trade

___________

42

Corporation

American

Dryer Corp.

31

Corner

and You—By

.

Vitro

38

Securities Now in Registration

Prospective Security Offerings

Corp.*

32

—

Securities Salesman's

Silicon Transistor

15

Securities.—

Utility

Public

,

Permachem Corp.

Wallace Streete—16

Best.

.2

—

Western Gold & Uranium

4

and Industry

~

Published

Twice

Weekly

The COMMERCIAL

For many years we

have

specialized in

PREFERRED STOCKS

FINANCIAL
Reg. U. 8.
WILLIAM B.
25 Park

DANA
Place,

CHRONICLE

Members

New

York

Stock

Exchange

TELEPHONE HAnover 2-4300
Albany

Boston

Nashville




•

Chicago

Schenectady

TELETYPE NY 15
Glens Falls

Editor & Publisher

SEIBERT.

President

and a<*Monday (com¬
plete statistical issue
market quotation
records, corporation news,- bank clearings,
Every Thursday (general
vertising issue) and every

•abate

and

-city -news.

Worcester
Other

Chicago

111.

etc.).

135 South La Salle St.
(Telephone STate 2-0613).

Offices.

3,

news

Prospectus on Request

second-class matter Febru¬

as

25, 1942, at the post office at New
York, N. Y., under the Act of March 8,1879

ary

Subscription

Rates

in United States, U.
Territories and
Members

S
of

$65.00

Possessions,

W- V. FRANKEL & CO.

in

Subscriptions
Pan-American

Union,

Dominion

Canada,

of

Other Countries,

Thursday, February 12, 1959

4. N. Y.

25 BROAD ST., NEW YORK

DANA

Reentered

New York 7, N. Y.

HERBERT D. SEIBERT,
WILLIAM

*

Company

COMPANY, Publishers

REctor 2-9570 to 9576

Spencer Trask & Co.

Copyright 1959 by William B. Dana

and

Patent Office

C. G. S. Laboratories

48

Washington and YoU____—2

Other

per

$68.00

year,

per

INCORPORATED

year

$72.00 per year.

39 BROADWAY, NEW YORK 6

.

WHitehall

Publications
**

Bank

and

$45.00 per year
Note—On

the

rate

foreign

Monthly
(Foreign Postage extra
Record

Quotation

exchange

subscriptions

fluctuations In
remittances
foi

the

account of

of

and

must be made in New York

Teletype NY

3-3960

1-4040 & 4041

—

advertisement#
funds.

Direct

Wtr*

to

PHILADELPHIA

4

The Commercial and Financial Chronicle

(760)

quadrupled in the interval
ceding its splitting time.

.

.

"Once

BULL MARKET GADGETS

The
tice

currently increasing prac¬

of

misusing

the

of

concept

corporate "cash flow"—that is, a
company's net profits plus the
v

amounts

>

,

charged

for

York
Stock
Exchange.
Stewart
Huston, Vice-President and Sec¬
of the cash-flow doctrine is the
retary, said, "Lukens Steel Com¬
frequency with which it is found pany is contemplating no stock
in close association with the em¬
split nor is Lukens contemplating
phasis on growth, which custom¬ any consolidation or merger with
arily involves a greater outflow any other company! Both a stock
of capital than the inflow from split and a
merger had been ru¬
depreciation.
mored in Wall Street recently.

amortization
of

capital

as¬

sets—should
be
c

realisti1 1 y

a

p-

a

*

praised.
as

a

Not

mere

"

technical

ac¬

counting
cept, but

con¬
as

matter

a

of

common
A.

Wilfred

sense, does

May

provision for
the replacement of wearing-out
capital assets constitute an in¬
escapable cost of production. The
proclivity instead to transfer such
charges to earnings, and include
them, as a basis in price-earnings
ratio

calculations, is just another

means
of rationalizing the pres¬
ently existing low earnings yields
(under 5%) and dividend yields
(averaging 3^2 %) highlighting the

inflated

current

Ferreting
tappable-1

out

market

these

source

earnings) is

,

levels.

items

of

additional

present bull

our

a

mar¬

ket's counterpart of the gay 1920's
foible of defending the fantasti¬

cally high price earnings multi¬
pliers of that speculative era by
allegations about mysterious ''hid¬
den
earnings*'
(when, actually,
they were overstated more often
.

than

„

understated).

The
that

"cash

flow-ists"

and since the line

between

and

the

earnings

may

as

well

must be used

reserve

replacements

sooner

later,

or

ly side tracked in

enlarge the
by such
other

a

any manner. To
true earnings figure
device constitutes an¬

speculation-serving

bull

As a matter of fact,
even
in
terms of cash flow are stocks now

high

related

to

the

equivalently
price-earnings
ratios

calculated

during previous bull markets. As
thus
1959

estimated

the

for

current

period, today's market valua¬
the

of

Dow

Jones

higher

are

over-adequate, is directly in¬

consistent

pectation
stressed

of

the

which

by the

viduals in
level

with

is

same

inflation-ex¬
so

justifying the elevated

stock

prices. Under

pro¬

gressive inflation, current provi¬
sions for replacement costs would
be

insufficient, not excessive
thus emphatically
leaving nothing
in

form

of

unstated

income.

quality.

GCNY

as

\

Evening Courses
Principles

In Inv.
Two

in

12-week

evening courses
principles of investment

the

for'families

with

moderate

will be offered this

comes

in¬

Spring

by the Extension Division of the

City

College

Studies,

School

of

General

Index

Auto Production

Industry

Business Failures

J
A

striking feature of the

current

phase of the recovery is the
virtually unanimous feeling among businessmen and economists
that

1959

Bank

will

be

a

prosperous

year,

of Chicago in its monthly

says

the Federal

a

so

Bank, that dissidents

the

very

pointing to this

are

danger which could lead to
Whether

Reserve

review, "Business Conditions."

The current "bullish" outlook for 1959 is

widespread,

More

in

Spli toman in Items

In

the

of

case

two

recently

"split"

open-end
mutual
funds,
of the funds'
shares in¬

sales

creased

time

materially

of

between

announcement

the

case

of the

and

into

units

of

But since the value

reduced
of the

with

the

markets.

portfolios will be

analyzed

and

Invest¬

outlined,

organized.

The

elementary
Wednesday, March

an

not the current optimism will endanger the re¬
only be answered in retrospect, but it is obvious that
exhilarating business atmosphere can produce overconfidence,

with

unfortunate consequences.

'' :Y
) V;
\
' "•
1
the extremes of optimism are "usually most dan¬
recovery has been under way for some time, and
this upturn has been in progress only 10 months. At
this-stage of
a
recovery, expectations of improvement may help to produce
,

However,

gerous after

the

desired

a

result.

/

);Yj" ''■!*'

t

Y',

'•

>

4.

The

ad¬

vanced

March 3. Registration is now open
in
branches
of
the
New York
Public
Library
in
the

run

size.

fund's

class

starts

to be made.

Plans for modernization

actly

all

are

mechanically and ex¬
to the clearly stated

tied

times, investor attempt to

ticipate extra gain by

coming split,

seems

reason

Bronx,

Manhattan
Course

and

Staten

descriptions

and

Island.

instruc¬

tions for enrolling by mail can be
obtained by writing or
Extension

terest in the
of

one

of

a

share

sales

are

freer to tackle

new

readily available and needs become

communities

which

have

not

projects as funds
apparent.

responded

•

proportionately to

the general business improvement. But recent reports from most
sectors back up the popular outlook of confidence.
;
In

November, the

for the first time

rose

book
in

expected to continue for
Retail

sales in

value

more

some

December

total business

of

than

inventories

and this build-up is
time to come.
«
1
)
a

year,

„

rose

4%

above

record

levels of

Crow ell, Weedon Co.
G.

A. Saxton &
Co., Inc.,
Street, New York City,

Wall

and

the installation of

a

52
an¬

direct

wire

to Crowell, Weedon &
Co.,
Angeles, Calif., members of
the Pacific Coast Stock
Exchange.

Annett & Company
In New Quarters
Co.,

New

through

sales

car

the

will show

a

rose

first 20

sharply at the end of 1958, and deliveries

days

of

January

indicate that

the

a year ago.
This recent
pickup in sales together with prospects for higher personal income
have caused the industry to raise its sights on prospective output
for 1959.
Projections for the first quarter call for ,about a third
more

assemblies than in

the same

1957

period.

Unemployment remains a nagging problem.
The rise in
employment was slowed in late 1958, but this was due in part to
severe

weather.

And, the Bank adds,

a

further sub¬

stantial rise in general activity can hardly fail to boost
employ¬
ment and reduce unemployment.

Unemployment Figures Rise 600,000 to 4,724,000
Yesterday the Commerce & Labor Departments reported an
increase in unemployment figures to 4,724,000 persons in
January,
a seasonal rise of 600,000 or
only half as great as the January 1958
figures when the recession was spreading. This Januarv!s jobless
record was the highest for that month since the end of World War
II.

President

Eisenhower

asserted that "I don't for

his

at

news

conference

on

Feb.

level of
are

unemployment," and added "I believe thoroughly That we
going to have a pick-up as the year goes on."

Clearings 8.5% Above Year Ago

Y

cities of the country, indicate that for the week, clearings for all
cities of the United States for which it is possible to obtain weekly

clearings

will

be 8.5%

above

those

of

the

corresponding week

Continued

We

are

&

pleased to

announce

on

page

the election of

&

PAUL A.
226 Chilean

.

•

;

" ' '/ Y '

JUST

Avenue, Palm Beach, Florida

; I

Three Join Nikko-Kasai 1
(Special to The Financial Chronicle)

SAN

as

FRANCISCO, Calif.—Goro

Endo,. Sam

Sato

and

Kiyoshi

Tanaka have joined the staff of
Nikko-Kasai Securities Company,
2165 California Street.

•

Private teased

radioteleraph

,

j

*nd other leading commodity

exchanges.

1

SAN

-

.

FRANCISCO

•

LOS ANGELES

IS Officii




Regional Vice President

for the Southeastern States

Hugh W. Long

With Albert Maguire

and

Company

Incorporated

(Special to The Financial Chronicle)
•

NEW YORK

Serving Invnstnrs

•-

•

CHICAGO

„

clearings in the week ended Feb. 7 will show an in¬
compared with a year ago. Preliminary figures compiled
by the "Chronicle," based upon telegraphic advices from the chief
crease

to 220 Bay Street.
Their
telephone number is Empire

new

circuit to Honolulu

10

minute accept that as a satisfactory

one

announce the removal of their

3-7361.

scco.

month

substantial improvement over

offices

Members
New Yark Stock
£xehwe» • Pacific Coast Stock Exchange
Midwest! Stock
Exchange • American Stock Exchange
Honolulu Stock
Exchange • Chicago Board of Trade

a

and the Midwest participated fully in this late revival.
The strong showing, says the Bank, virtually washed away the
"first quarter blues" noted in some recent years when
lagging
business activity tempered enthusiasm for the spring and summer
year ago,

Bank

TORONTO, Canada—Annett
Company Limited and Annett

Dean Witter

opti¬

firms

business

actually Los

YDISTRIBUTORS

seem more

more

Bank

nounce

increase

governments

6. A. Saxton Wire to

in¬

split, the usual rate

fund's

stockholder

.

an¬

quite illogical.

speculative

Division, City

School

However, reflecting the prevalent

undiscriminating

to receive consideration.

Tuesday,

calling the
College
of General
Studies, New
value of the underlying assets at York 31, WAdsworth 6-5409.

shares

Investment Service

'

:

:

Y

In the present heady atmosphere of rising sales and general
confidence, spending commitments of many kinds are more likely

^

strikes and

begins

course

the

fer attraction to the

vided

deal

dangers of investing
commodity, real estate

the

funds,

general

will

and

insurance

ment

V

'<Sv;

as

or

covery can

courses,

stock,

and

Pre-Split Fever:—

;•••:•>

•

says

exuberance

"flash flood" of boom and bust.

a

months.

s

The

discussions

—

the

as

benefits

strongly

bullish indi¬

and

and

Industrial

companies, understandably of¬
public when di¬

secular trend of

in

including
ele¬
mentary and advanced classes, are
Average is higher than any other
entitled
"Investment Guide
for
peak market period, excepting on¬
Moderate Incomes." Lectures and
ly 1929, since the 20's,
tion

of

a

belied

ing attending split expectations
well

gadget.

in

in

this is

and hence should not be previous¬

as

we are

Food Price

Of course, notes the Bank, there are exceptions to the
mistic views of the majority. They are found in
industries,

for

spread

replacement costs, and (2) in as¬
suming that depreciation reserves

Trade

Commodity Price Index

depreciation

effective date. The shares of

deprecia¬
tion
charges permitted by the
Revenue
Department
are
gen¬
erally inadequate, particularly if

But

-

be
lumped together in a
single profit figure. But this ar¬
gument (1) contradicts the wide¬

conviction^ that

State of Trade

or expansion are more
likely
Apprehension over the risk of carrying
a larger inventory is
likely to give way to a greater concern over
possible lost profits if stocks prove inadequate.
Prospects of
higher incomes spur consumer spending, and state and local

of demarcation

such

purchasers.

short-term

a

dends,

contend

growing reserves
and real earnings is
inexact, the
charges for depreciation of capital
assets

be regarded

can

Output
Carloadings

-Retail

backing for divi¬ practice by the high price earnings
Corporations in 1958 paid ratios, absolutely and relatively,
out only 31%
of cash earnings. pertaining to the "split candi¬
(As
estimated
by
Standard
& dates."
In
fact,
these
higher
Poor's.)
priced issues have often actually
But it should be realized that, been
selling at 30 to 50 times
barring company liquidation, the earnings—as a result of pyramid¬
as

the provisions for deprecia¬
reserves
have become large

tion

.

worthy

of course

that the cash flow

market
as

.

Yesterday, Lukens shares dropped
of scrutiny and recognition—par¬ sharply after Mr. Huston's state¬
ticularly in cases of extraordi¬ ment, to close at 80%, down 4%
narily large depreciation charges, for the day but still well above
as in the oil
industry and depre¬ Monday's close of -76V2"—From
ciation acceleration
under now- the New York Times, Feb. 5,1959.
ending certificates of neces¬
Perhaps the most plausible ar¬
sity; in affording flexibility for gument in defense of splitting
corporate
borrowing over the lies in the assumption that a preshort term; and as an indicator of
split high price causes inability or
the trend of the company's finan¬
unwillingness to pay the market
cial strength.
It is likewise true price
on
the part of would-be
flow is

Electric

feature

Perhaps the most curious

Cash

Steel Production

The

no

.

depreciation,
depletion, or

"

•

longer shy,
the Lukens Steel Company was
ready with a quick comment yes¬
terday, one day after its stock had
soared more than $9 a share in
one
trading session on the New

By A. WILFRED MAY

"Hidden Earnings"!—Again

burned,

Thursday, February 12, 1959

.

pre¬

"Candidate" Behavior:—

Observations.

.

.

SANTA

Such

has

Albert L.
coln

MARIA,
become

Calif. —Emil
affiliated

with

Maguire, 301 South Lin¬

Street.

Westminster

at

Parker

Elizabeth, New Jersey

- -

30

Volume

Number

189

5820

.

The Commercial and Financial Chronicle

.

.

(761)

ezuelan oil, and reductions of do¬

COBLEIGII

U.

IRA

DR.

Enterprise Economist

Containing some notes on the improving conditions in the
industry, and some reasons why Sinclair may merit special

*

oil

*

attention at this time.
While
the

1958

record

being entered in

books

as

a

recession

it wasn't, too tough

year,

oil

is

the

on

Total demand for

companies.

petroleum
products de¬
clined

for

demand

heavy

oils

used

in

electric

generating plants,
steel, cement and other heavy in¬
power

dustry mills, should be strong this
year animated by the high level
of general
business activity in
prospect. *
:
8 '' •:
,:
So

capacity in all

conclude that 1959
substantially better oil
year, with total demand rising in
the order of 4% over 1958; a less
burdensome
inventory situation;
firmer and,
in many instances,
rising product prices; better profit
margins with total net earnings

departments

for the

Substantial

in

squeeze

profitability
due mainly to

heavy;

built

o v e r-

up

as

we

will

was

be

consequence
of
the Suez

Such

crisis.

some

This
U.

in

Cobleigh

conjecture, while not reek¬

a

with

ing

over-capacity

optimism,

does

suggest

consideration of leading

in¬

tegrated oil company equities, and
causes
us
to select one such, to

reflected

was

may

a

industry rising by perhaps
15% to 20% over the 1957 totals.

a

competitive

selling, re¬ wit, Sinclair Oil Corporation com¬
sulting in lowered prices for most mon, as possessing considerable
refined
products;
and
lead
to investment merit at current mar¬
■.
/<
v
;
sharp reduction in domestic allow¬ ket levels.
able
production
in
Texas
and?
Sinclair is an exceedingly well
Oklahoma, and programs for integrated company. It has seven
quantity limitations on imported refineries in the United States,
crudes.
And net earnings of the
with a combined capacity of 453,more

•

oil industry were 24% below 1957.

Throughout this adjustment, do¬
mestic crude prices, which had
been increased 30c a barrel early
in 1957, were pretty well main¬
tained, however.;;
All

but

of

which

what

is

this

about

the weather.

now

history*;
First

year?

This has been

an ex¬

ceedingly cold winter and unusu¬
ally heavy demands for heating
oils in January and February have

sharply

reduced

and

inventories,

firmed price structures.

Refinery
runs now enlarging the supply of
heating oils automatically add to
the supply of gasoline. What then
about the consumption of gasoline
in
1959?
Passenger
cars
use
roughly two-thirds of our gas; and
commercial

vehicles

most

of

the

rest, with pleasure power boats a
rapidly rising market. Passenger
car

requirements

improve this
more

cars

delivered
cars,

the

expected to
First, 1,500,000
expected'to
be
are

year.

are

than
new

in

barrels

000

daily; 1,600 bulk dis¬
stations
and a
retail

tributing

distribution chain of 32,000 service
stations of which 14,000 are either
owned outright or

leased, and the
balance operated by independent
dealers.

benefits

Sinclair

from

costs starting
delivering crude to
the refineries, and a substantial
net work of pipelines carrying the
refined products to centers of dis¬
tribution. All this, plus an exten¬

low

transportation

with pipelines

sive tanker fleet.

$640

Since 1949

million have

some

been spent on

these transport
for the most

elements, financed
part, out of retained

earnings.
Sinclair has built up its

business

from the

refining end, and ranks
presently eighth among domestic
oil
companies in total refinery
capacity. Because it has been a
refiner on balance, Sinclair has
been

striving for some years to
own crude oil produc¬

bolster its

1958; and all
well as the old,

as

should be driven

tion both at home and abroad. Its

more

but 34% of domestic refinery runs.

as

our

per

capita income reaches an all-time
high, leisure time increases, and
a net work of recently constructed

production

during

1957

much

equalled

higher production ratio
sought; and the most im¬
portant gain along that line has
super-highways lures millions of been achieved by Venezuelan Pe¬
trip-takers.
(A minor debit in troleum Co. (96% owned) which
this projection is the lowered gas
has averaged over 53,000 barrels a
consumption of the smaller do¬ day in production in 1958, against
mestic and imported models.)
25,000 daily barrels in 1957. Be¬
Finally, the somewhat cyclical tween import restrictions on Ven¬

ploration enterprise.

/■'

considerable

A

has been

<

Except-

In addition to about 650,000 net

the

acres1;

United

in

Canada

telephone number

new

Annett &

NASD Dl'sMcf NO. 9
Ohio -Angus t

d

S ' Lorenz & Copi^
S' H t?'+ ^*1
b^erJfftAd^hairman of Dlstnct
of

the

,

Na;joa

A.

«

~c

*.

Sinclair held
non-producing
acres.
Further,
Sinclair - owns
30.5% of Richfield Oil Co., with
rising production and interesting
discoveries in Kern County, Calif.,
about

and

9.6

on

Alaska.

The

states.

new

to

arrangement with

British. Petroleum:
in

touch with

a

■

places Sinclair

have

a

Coal

r,'

Cunningham,
u

n

!/&"

n

p

*>

r.

,

■

■

nictHnt
Q

u s"°*

.J;

fabulous store of

®s"

.

onerous.

—Wl

ago

of Texas Pa¬
Co. and sought

at

over

OIL

estimated V-k years

reserves were

$120 million.)
29%
of the

2% million MCF; and

lodavare'n° d0Ubt; mHch'^r8er
■

,

.

...

,

...

Sinclair entered the elite group

of this company by offer¬
1,776,498 shares of Sinclair
for the 2,753,573 remaining shares

merger

of companies

which

into

new

District No. 10.
Mr.

witt'

Lorenz has
tw

Telephone EMpire 3-7361

change

Kentucfey were
been associated

securities

for

business

47 years. He started with the bond
department of The Ohio National
Bank

of

Columbus

and

was

$1 eieeted a Vice-President in 1922
billion dollars a year, in 1954.
It at the age of 28. In 1926 he became
is
an impressive and well mana
general partner of Stevenson,

ing

of Texas Pacific

gross over

Coal & Oil (a 1
ratio). This offer of share aged organization and the common Vereoe, Fuller & Lorenz, and in
exchange was not voted on by stock has grown in stature and i942 formed his own firm.
P-•
Texas stockholders, and expired attained a quality rating within
joseph J, Van Heyde, with the
Jan. 28, 1959.
the past decade.
Assuming sub- NASD office in Columbus, is SecFor
the first
nine months of stantially more favorable operat- ret£uy of District Committee
results
this
year,
Sinclair No 10
1958 per share net of Sinclair was ing
could comfortably earn between
$2.31 against $4.11 for the same
period in 1957. For the full year $4.25 and $4.60. This might not

for 1.55

I. L. Brooks & Co.

of about $3.70 a result in a dividend increase in
the next 12 months, but would
probable—quite a bit
below the $5.18 earned in 1957, but pave the way for one in 1960; and
still coverage for the present $3 Sinclair is getting into a price
SAN FRANCISCO, Calif. — The
dividend. Since 1949, the cash divi¬ range where stock splits are high
fashion. Projecting a 1959 net of Pacific Coast Stock Exchange firm
dend has risen, with four separate
of I. L. Brooks Securities Co., for¬
increases, from $2 to $3; and divi¬ $4.50 per share, "L" sells today at
a partnership,
has incor¬
15 times earnings. This is not an merly
dends
have
been
continuously
extravagant ratio for a stock of porated as I. L. Brooks & Co.,
paid since 1933.
this quality and with such a fav¬ Incorporated and has moved to
Capitalization consists of $370 orable
long-term
potential. larger quarters at 333 Pine Street,
million
in long-term
debt, the
San Francisco. The firm is seekWhether by the tankfull. or in
most attractive issue being $167,i n g
representation
throughout
100 share lots, Sinclair is a desir¬
Northern California for its Mu¬
194,500 of 4%s due 1986, con¬
able possession.
vertible into common at $65 per
nicipal Bond and Mutual Fund
share through Dec. 1. 1961 and
divisions.
at a higher price thereafter. This Three With Suburban Sees.
-President I. L. Brooks also an¬
issue at 115 yields 3.8% currently,
(Special to The Financial Chronicle)
nounced that Joseph C. Eldridge
1958

earnings

share

seem

Expands Organization

and

with the common

at

67

will

CLEVELAND, Ohio—Frank

follow the stock with considerable

Gurkles, Eugene J. Kozell and
matter of fact many Lawrence E. Batchlar are now
stock buyers today seem to prefer with Suburban Securities Co., 732
entry into an attractive equity via East 200th Street.
the convertible
bond, providing
fidelity.

As

a

they do not have to pay too dearly
for their dual or straddle position.
For

such

represent
The

Sinclair 4%s
interesting vehicle.

persons,
an

lowest

price

in

1958

was

106V4, and the bond could sell at
155 if the common sold at 100.

are

has

joined the firm

dent and Treasurer.

has

been active

business for
an

as

Vice-Presi¬

Mr. Eldridge

in the securities

several years and is
in investments at

instructor

Golden Gate College.

,

Two With Commonwealth
(Special to The Financial Chronicle)

.

COLUMBUS, Ohio—Thomas O.

Joins L. A. Caunter
(Special to The Financial Chronicle)

CLEVELAND,; Ohio — William
Conger and Karl M. Grau are
now"with Commonwealth Securi- R. Cohen has joined the staff of
ties Corporation, 30 East Town

pleased to

announce

St.

L. A. Caunter & Co., Park Bldg.

the opening of

Direct Wire to

CROWELL, WEEDON & CO.
LOS

ANGELES

G. A. Saxton & Co., Inc.
NEW

offices at

220 BAY STREET

tL

UntU

Members

moved

recentlv reclassi-

Natural

of Canada

Exchange

August Lorenz

,

Annett & Co.
Stock

,

AssociJ-'

t

and

Toronto

'»-

Wn

*

become less

owns

Oil

&

Carey,

which fat refining

present market

around

also

J.

Treasure

low cost Middle Eastern crude on

outstanding shares
cific

respect

ter

profits may be Ththe Kenai Peninsula in gleaned if and when import restrictions on foreign crude may
(Sinclair stockholdings of

of

Sinclair

States,

million

Richfield
value

noted in

as

Wal¬

succeeds

Members




-

5J

*

,

n

■?*

+.:

n

Company Limited

The Investment Dealers' Association

have

<....

tjnn
e

G

crude supply, the .fcompany is well
balanced with retail outlets in 42

and

a

Announcing change of address

higher this year.

*

•

producing

We

and

OliAinM«M

.

.

l%belowl957.

a

.

.

only

But there

LvltillZ Ulldll Illdll Wl

And, of course, the convertible has
however, not a collateral value highly respected
too much progress was possible in
bolstering crude sufficiency posi¬
shares
tion in 1958. This year should be
better, both because of continued
use in Venezuela
(Barinas Tract) under the symbol "L." 1958 price
production, and a long-term con¬ range was between 46% and 65%.
tract
recently
concluded
with Basis for considering "L" at toBritish Petroleum for delivery of day's prices is that the company
low-price Middle Eastern crude. is emerging from its poorest earnThe agreement with British Pete ing year in a decade (1958). It is
also
includes
formation
of
two in strong cash position, and with
new
companies,
jointly
owned a revolving bank credit of $150
with British Pete.
The first is a million ^requires "apparently
no
marketing company for foreign- further financing for some time
come.--Gash
flow
for
1958
produced crude; and the second to
primarily a South American ex¬ should be around $10 a share, and
allowables,

byTheendi5g3Siecommon

Sinclair in Particular
By

I

mestic

Petroleum in General and

5

Private Wire Connections to

YORK

Chicago, Dallas, Philadelphia and St. Louis

6

The Commercial and Financial Chronicle

}

(762)

stretch out

The Outlook (or Business

8 to

rather

By WAYNE L. McMILLEN*

than

tendency

for 1959, with GNP

year

deplores

lack of will

our

power

He discusses how

tion.

2%.

Utopia but hopes

than

surprised to find the tax

There

so

the

are

opinion

usual

shades

of

:

to

as

the

time

several

in

few

are

mar¬

other

meant

as

re¬

first

a

still needed tax

a

re¬

great

our

in

to

Wayne L. McMillen

1949 recession

tedious rep¬

recession

brought
decline in

inventories, and the 1954

by

drastic

a

reduction

Perhaps we can do three things:
(a) review some of the economic
phenomena of the postwar period;

brought

by a decline in
business purchases of both inven¬
tory and capital products. In large

(b) in view of relative agreement

part

Federal

Government

The

it

1958

was

durable

a

ventories

not far out of line.

The Three
All three

sions

have

though
were

a:l
;

Postwar Recessions
of the

been

postwar

mild

reces¬

ones,

even

individual industries
hard hit. Because
they were
some

mild, and because government

lid

come

the art

so

of

managing the business
same
thing could hap¬

The

to

pen

seemed

each occasion, many have
to believe we have mastered

on

cycles.
to

action

consumer

right

that

us

those

who

.eally mastered
Since the
I een

in

usually happens
they have

think

art.

any

irowth due to recovery from the
great depression and the war. This
w as

accompanied by large popula¬

tion increases.
recession

a

In such

situation

a

resemble

may

in¬

an

terruption of growth more than
a
major setback in the economy.
They were less serious than they
might have been and we seemed
handle

lo

them

properly.

The "automatic stabilizers"

were

powerful aids and in recent years
ae
monetary policy of the Fedoral Reserve Board has been
par¬

ticularly astute. In the
recessions
were

timely

major

yet in 1958 in
ihe
s

a

two earlier

tax

factors

reductions

in

recovery,

different

Administration

situation,

properly

sled tax reduction and

was

resus-

ia'ned
of

by statesman-like support
opposition party leaders.
Yet we must not
forget that in
the

both the
the

tax

political

1949 and

1954 recessions

reductions

came

accidents

than

more

erate economic measures.

as

delib¬

as

In 1948

Republican Congress approachin* election
day, but unaware of
a

approaching
lax

reduction

objections of
*An
the

recession,

address

Investment

the

over

a

by

Mr.
16,

in

the

tories, except for

enacted

a

strenuous

McMillen

before

and

aggregate
Retail

were

inven¬

few prod¬
ucts were in relatively good
shape
when the recession began.
However, in each cape consumer
purchases held firm. In none of
the-

postwar

a very

recessions

did

con-,

sumer

est

Of

spending, even at the low¬
point, decline more than 1%.
there

course

shifts

were

from

durable goods to nondurables

services and this caused

and

hardships

for several industries.
recent

ployment
social

recession

1959.




threat
lack

a

payments

tained personal

not

sumer

the third

strike/;

leads

it

it robs

from

We

others.

billion in

will

It's

often

thus

bad and

because

big segments of

It

the selfish

leads

to

easily

with

creases

immoral

to

unjustified

is

dangerous

in

prices.

increases.

wage

because

that

on

buy at

when

It

it

is

belief..

All

begin

when

but

I

let

the

will

current

for

that

this

remains

a

ployment

untiL

maladjustments'
such

-

of

the

market,

the

then

inventory

occur

international

the

markets

alert

be

recent

aspect.

1961?

groups,

the crash and

comes

,

(2)

(a)

wage

increases but

(b) limit the supply of

own

had

the

that

longer raise prices and
the wage increase on

businessmen

can

times.

But

this

time

one

1954

had

The last peak came in
December,
1957 long after the
general decline
had started. In previous
recessions
the peaks were
spread over
16 month periods

12 to

compared to the

all

major

Confine wage increases
within the limits of aver¬
increases

reached their lows in two months
March and April 1958.
It is
more
usual
for
such
lows
to

in

produc¬

reasonable

growth

under

relatively stable prices.

Obviously the last alternative is
only acceptable one, but it

the

does not appear
likely that it
be our choice within the

will

very near

future

wavered

tween

at

—

a

the

least

few
first

successful

both

two

to

most

reasonably

a

we've

be¬
alternatives.
years

-

policy to be

businessmen

labor must concede

icy is the

until

more

In order for such

industries

manner

substan¬

tivity and
(b) Expand the money supplyjust sufficiently to permit

36' months this time.

Almost

(a)

age

major

started.

this

cause

tial unemployment.

(3)

just after recovery from the
recession

in

would also

industry after another was reach¬
ing its peak over a longer period
of three years. The first
industry
reached
its
peak
in December,
previous

Losses

consumer.

imposed

an

tlvit
preceded
the
decline
one/
should not be surprised that dif¬
ferent
major
industries
would
reach
their
peaks
at
different

the

to

watch

the

possible

they

in

1960

excesses

become

costs

and

they

*

in

YYIf they

to

for

and

that this pol¬
hopeful approach
full
employment

In

point
the"

of

one

new

manufacturers
were

*

or-

during
exceed¬

high due to the business Y
During early 1956 it was y
widely expected that there might
be

steel

strike in July, and that Y
prices would likely increase. /

a

steel

; It

was common
knowledge gained >
through exchange of information Hamong businesmen early in 1956
y.

that there

considerable

was

hedg-Yf

ing against that possibility. Even
though the actual extent of hedging was unknown, it was known

4

to

Y

substantial.

be

conclusion

?

<

The reasonable

have

would

if the boomlike

been

that

rise in final sales t-

going to continue for an-,
period, seasonally ad¬

were

";

ing substantially—first because of
impending ' jsales
increases
and

^

"

f

also because of the

hedging in an-";)
ticipation of the steel strike. /'Y^yActually new orders were not i?
increasing and
in view
of
the Y
known facts this should have been
the

first

signal

for

caution

- *

and

-

this

noted

^

;

inventory planning. Perhaps some people in the industry

*

>

caution

signal, but in;Y
prevailing psychology; t
and
not
being
completely con-;-!1
vinced,
they
merely
shrugged'?
their shoulders.
But, throughoutcf
view of the

lor caution.
The

July,
had
of

1956.

able

handle these 1960 prob¬

the

period

stable

and

beyond

excellent.

If

not, 1961 or 1962 may see busi¬
again slashing its purchases
have
another
typical
postwar recession.
I

know

do

to

from

personal

that it is much

ence

careful

it

decline

in

s.vuTj
in.i

occur

orders *;

anticipation

would

that

expect

be

reason**;-;

orders;/

new

in

July. That did y;
should also have.')
vigorous general/,*

But one
in the

in the final quarter of Y
1956, that new orders would have/-

increased.

There

orders

new

1956

first

been

the

for

5%

were :

the

was

no

such

in-;;

in the fourth quarter/Total

crease

last

less

half.

than

This

half

during

should

,

have v*:

third-signal for caution.

a

-

of

Y

-

Sales

(seasonally adjusted) lev- Y
elled of but production continued1 *
throughout the year at a level':

higher

than

yentories

sales!

Naturally

continued

to

rise

in-

•

until

Y

at the end of 1956 they were 12% Y

those

the year.
nal

for

the

at

This

was

they
the

beginning/of

the fourth sig- V
Y

caution/''

Sales held up

Y

>

through 1957/but

still below output for "
Production was cut in
Spring
but
was
increased Y

were
year.

late

again in the
ber
more

In

experi¬
difficult

more

placed

strike

to

Y
did

pickup

1958?

be

can

strike

Because extra

been

the

Y

-

steel

complacent above

nullify the effi¬
laboriously in¬

so

wisely

1960

early

inventories

they attempt to ex¬
their facilities too rapidly?

pand

lems
,

*Y

goods industries

expected

money, and" we'll

so

boom

-i

.

to illustrate the

me

example.

an

would

1959.

ness

no

cycle

be

improvement

into

over

will

Will

Will''

unemployment.
Continue such unjustified

small way for

In

months

such

and

to

prevent

of.< about

mass

planning

.

ingly

1958.

improvement,,
that
the
leap in

Will, businessmen
-

pricing ourselves-

as

with

durable

happen.

grave

pass

most

profits

of

■

in the money supply. This
is conducive to full em-

Different Industrial Cyclical Peaks
The

the

see

The economy should
be in a
healthy state as it enters 1960.
Reasonably full employment, only
have three choices:
slight
increases
in
prices, and
(1) (a) Continue with wage in¬
growing'investment by business
creases which outstrip in-'
are
the prospect. If businessmen
creases
in productivity,<
make major mistakes it is more
(b) Validate these wages with:
likely they will do so in 1960 than
corresponding
increases in 1959.

the general welfare.

interesting

Near

;

stituted

companies but in

the year.

1969 ancl Beyond

the.

sioners, etc. If this policy
continues
indefinitely

objective, not only for their

worri¬

biggest single domestic threat to
long-term economic growth.
We

con¬

of capital expenditures.
Many can
make a contribution toward this

Unem¬

be

quarter

those

carry

relative stability of prices obscure
fact

ex¬

expects

dramatic,
not

well

more.

will

we

believe-

results.

ac¬

V

careful

year

last

Everyone

once

should

inventory

may

or

figures

the

profits

the

:

y*

inereas-"

economy.

credit

of. the

galloping inflation with disastrous
We

,

events

improving

in

state, justed new orders for the first six
busi¬ months would have been

*an

until late in

Spring
for

to

thus bidding up prices
"mild"
inflation
becomes

till

of

*

in¬

Housing and
Agriculture
which
were
major
factors in the recovery will cease
the first hall' of 1956
seasonally./
to be the dynamic factors in the
adjusted
inventories in the in- /
expansion which they have been
duslry continued to; climb, indi-rl
recently.
;//.
eating a production rate considerCorporate profits may well be
ably higher than sales. This might,.:
the
highest in • history. I think
well have been
a
second
signals)
we'll
get
some
surprises
next

persistent and most people believe
it will
continue, then at some
point in the process they begin to
act

For

extended

accumulation,
$8
billion

more

the

billion

the end

in¬

cost

increases

$2

some

our

benefit

inefficiency

cover

or

to

Consumer

is

promotion of stability could come
by
businessmen
doing a
of

-

providing

stimulus

This also leads to weak resistance

about

careful

as

all- spend

$2 billion

a

that'

hear
so

ciencies

job

more

liquidation of 1958 should turn to

almost

pand

out

more

or

The estimated $6 billion

the economy

it.

pen¬

careful

quar¬

consumer,
Federal,
local governments, and

and

fixed salary

more

should

The

v

steel

a

estimated $439

an

1958.

ployment

for

we

spending.

control and

afraid

am

strike

billion

compared with

The

for

good automobile year,

a

$470

average
-

pre¬

Gross National Product should

our

immediate
ahead.

this

"

possibly

vigorous fourth

a

ter. With

due

knowl¬

the

exceed

better allow for

But,

It is

to

from

when

some

recovery.

expect for 1959?

in which I

one

make lor

grips

level

same

1957.

except

one

immoral,
inefficiency, and it is

dangerous.

but

in

we

should

ceding

The inference by this discussion
is that the next big

step

can

is

the general economic level should
be the highest in our history. Each

quarter

willpower.

an

"mild" inflation

Even

main¬

income which

the year

year

Even with moderately bad luck,

/

be helpl'ul in aiding growth.

may

aid

can

Permit

started

the

at about the

for

What

Y:

is

of

of

into

put

—

Meeting, Minne¬

to

come

lack

a

simple.

unem¬

considerable

was

security

that

for

'

an*'

.

the

In

democratic presi¬

Outlook

apolis, Minn., Jan.

goods

counted for the high level of

the country has
dynamic
period of

war,

a

was

mining recession. Nondurable in¬

I960

(c) venture into
beyond, outlining what
will be necessary to improve our
efforts toward stable growth.

expendi¬

decline

about

t;me to 1959, and
and

to

more

we

of

in

devote somewhat less

take

that

1956

forthcoming decisions.

1959

1958

more.
Plant
longer term threat, however, will ■;
diminish when and only when we and equipment expenditures
should total $32 or $33 billion as
destroy the pleasant delusion that
against the $30 billion of 1958.
in the long run we as a nation
can

of

decisions.

1960

consideration

a

the last half of 1955

ness

than

ing those
stance

Perhaps

be helpful in mak-

ders-. of the

as

the

J

threat for the months

population

etition of many figures and other
"boiler plate" about the outlook.

tures.

In

for

in

Product

' estimated

they

Like sin, we are all against inflation—as far as the other fellow is

a

principally by

dation of

of forecasts

to

as

to

inflation

much

was

business purchases through liqui¬

dispense with
a

the

taxes.

has been due to good luck.

success

about

en¬

not

in

managing our eco¬
nomic affairs, but is only to point
out that a significant part of our
The

deavor

of

the

edge

welfare.

now can

National

productivity
interruption "to

"mild" inflation is not

progress

con¬

shall

wartime

recession.

an

concerned. It is

reduction

This is not to belittle

ket.
I

were

measure

form.

about

he stock

tax

some
were

step toward

dicting immi¬
nent calamity
although a

f

the

other

some

ductions

no

pre¬

cerned

for

due to the

However,

years

voices

of

was

the

of

failure

so

general

study

promptly enough and was of such
magnitude that the average Gross

persistent price increases.11

Our

asked
sides

1.954

Outlook

recovery

that we'd

ending of the
Korean War, the expiration of the
excess profits tax,
and reduction

in

hear

we

1954

For the

first

Both

in

Inflation

beautifully timed.
Much

the magnitude
of the move¬
ment.

increase.

tax

a

trough

,

not

direction of the overall economy.

The

carry

actually increased 0.7% from

with

he had

to

Recent increases in

"periodic recessions."
fact,

The

growing,

a

recession which is

a

have- caused

in coming to grips with infla¬

In

inflation

the

start

can

dent.

'been

for

trough there>had been
increase of 2.3%.
\ ^

maladjustments; and

This year the economic forecasts
are
almost unanimous as to the

has

1958

will achieve "frequent oscillations" rather

we

for

Thursday, February 12, 1950

.

Inventories

At

the

build a solid bridge to the
"Fabulous Sixties," and issues the reminder that it will not be
we

bottom

on

ments of the
economy will benefit
by a wiser choice of policy.

usually considered
as
a
defla¬
tionary period. At the trough-in
1949 consumer prices had declined

Government, too, has been guilty of erratic purchases; praises
stabilizing influence of consumer spending but observes, how¬
ever, that sizable shift from durable goods to services and non¬
durable goods has aggravated economic

usual

more

drag

right through

had

•

seg¬

the

to

tendency

possibly exceeding $70 billion, and a half trillion economy in
1960. In outlining what will be necessary to improve our efforts
toward stable growth, Mr. McMillen recommends better capital
plant, equipment and inventory business planning; notes that

:i

long-rterm. The first two

alternatives

awhile.
There

peak

the

over

can
lead
only - to
relatively greater, periods of super-full employment
depth of this recession as well as followed by periods of
unemploy¬
the quick
turn toward recovery ment. Not only labor but all

Associate Economist, Guaranty Trust Company of New York
a

period of from

a

This probably ac¬

for the

counted

And the "fabulous Sixties"
Bank economist envisions

over

12 months.

.

.

so

fall

through Novemclimbed
3%

-

inventories

in 1957.
November

of

1957

it

was

finally concluded that there was
an inventory problem, and in De¬

planning than it is
However, most of cember production was slashed.?;
1957, through
advantage of ex¬ From November,
perience and improve our per¬ April, 1958, production was cut
formance if the proper objective by nearly 30%.
While final re¬
to talk about it.
us

is

can

take

constantly before
It

seems

to

me

tail sales of the industry decreased

"

us.

that

early 1960

is the time when the critical busi¬
ness

decisions will be made. These

decisions

will determine

the

eco¬

in

some

1958

they

markably well,
in
to

output

was

so

held

up

? •

re-,

the drastic slash,

almost entirely due.,

the

inventory problem.
This
multiplied by repetition in

nomic climate in 1961 and/or 1962.

story

Our postwar

hundreds of companies is in large

experience indicates

that modern recessions
more

by

through

business

and

by

consumer

by

"

(capital

inventory)

than

the

are

erratic
and

caused

purchases

equipment
Government

consumer.

True

the

aggravates the situation

switching his purchases from

durables to nondurables and
ices

during

a

Thus businessmen have

responsibility
own

serv¬

recession.

not

businesses

only

but

also

part the story of the

heavy

to

their
to

the

reces¬

Slightly
1956

different

would .' have

decisions-in
changed

the

complexion of the 1958 economic

picture.
agement

Better

inventory

might

have

the recession.

production
a

1958

sion.

In this

had

been

man-1

prevented

example, if
cut

1956 and held at that level

3%

in

(rather

than the higher level) the drastic
cut in 1958 would not have been

'
-

Volume

Number 5820

189

.

.

.

(763)

The Commercial and Financial Chronicle

7

'

A

.

respects be the best in history*-** be an "explosion" of new cus¬
our surplus-farm crops there
should not be a "farm problem," with employment worrisome dur¬ tomers for business.
By 1980 the population may in- and things should get much better ing the early months and with in*
were at least four warning signals
(8) The
so - called
"Fabulous
flation a threat to follow (in 1960).
Sixties" should see improvement
in 1956. A similar situation could crease by 75 to 85 million people,, for the farmer long before then,
Gross
National
Product in the "farm
the equivalent of five Canadas, or. He should be doing well by the With
develop in 1960.
problem," and we
five New York States.
■'middle," '60s" by which time .20 possibly exceeding $470,000 bil¬ should see the end of it before
'
lion in 1959 it may well hit a half 1980.
Capital Expenditures
^
.'The number ,of -those, under
Of course, hindsight is

necessary.

20-20, but it does

,

shall

We

take

not

that there

seem

time

the

to

explore in detail the steps leading

.

/.

slash

to what some have called

a

T

17^^^people will be added,

and

those

almost

fast

as

•■•increase;/' Si

will

65

over

twice

v.v*

T„

Here

shortage .of labor

a

,

,

*,

of the

second

Much of the

year.

capital investment in 1956

;

preparation for
sales in

was

consumer or

in

of

/'*■ ' 7V.
million people to eat

inflationary
With

80

;

(9)

portance;* of the ; fight against in-

again most of the difficulty arose Hationr; For;

1960.

By 1980

we

shall have added

•

the causes of modern recessions.
The consumer has aggraindurable manufacturing - and is a powerful force toward infia-'-vated
the maladjustments
by
tion.- But-there'will'be'''periods-*'in--'shifting a significant amount of
mining.
C a p i t a 1/planning, "of
this span of years when the num- his purchases from durable goods
course,
is longer-term planning.
Frequently we build a plant and ber Of people betweeh 24 and 35 to services and nondurable goods,
equip it this year. We start pro¬ years of age will increase more ^ut °n the whole he has been the
duction the second year. Startup rapidly than the general populd- ™st stabilizing element. ^ >
time,v; including hiring, training, tion/
Youhg 'pebple ~ may ; find w (3)Even mild inflation is imworking the;'"bugs" out of the things difficult for a few": years moral, .inefficient, and dangerous,
equipment, and bringing it into during the late '"60s." There will We must concede that we can't
full production may consume most be alternating ease and tightening take more from the economy than
similar Situation.

a

in

trillion

-

"
Conclusion
.
(5) Businessmen bear a heavy the equivalent of Japan, or five
the labor >
(1L Erratic purchases of busi- responsibility to the general wel¬ Canadas, or five New York States
theim- me§s and. government have been fare by better management of in-( to our population.
those-22.

as

in

,

up

,

,

/•„ have

.

*

fabulous."'60s."

capital. spending., to 64 from whom comes
This underlines
However, - it .seems to me that, we force.
to

-

bridge

the

pressures.

we
(4) The

year

1959 will in most

ventorie§ and better planning of
capital spending.
(6)

One

mistakes
were

may

in

businessmen

of

(10) It will not be utopia. There
be many discomforts and a

will

conclude that the

important factors

recessions.

few

1956

toward

in bring¬

call them

ing on the recession of 1958. The
mistakes of 1960 may develop into

Let

sion started in

rather than "Periodic Recessions."

(7)
build

With J. Clayton

With better business plan¬
be able to
solid bridge to the period

ning in 1960
a

we

may

t Interest

Mass.

SPRINGFIELD,

1963-1970, which some have called

B. Meadows;is now

the "Fabulous Sixties." There will

ton Flax &

This

so.

followed

is

by

while.

February 11,1959

There

gradual

rise for

is then

levelling off which might

a

a

continue for

some

adjustments

$25,000,000

occur

time until mal¬

in inventories
in othen segments of the econ-

or
-

,v,

very

a

things
always be this neat but if
Of

omy.

course,

*

T.""

r**

cannot
one has

to

project the future at anytime
making decisions, the mostJ
logical: guess i& that such a pat¬
in

tern may occur.
t' At the
beginning

had

been

Dated

of 1956 there

have been that while a rise might

V

continue

'■!

it would

much

be

;

the economy.

Yet in

:

^

increase in capital

1956

spending

V

Due February 1, 1960-79, incl.

"

,

Principal-and semi-annual Interest (February 1 and August 1) payable at the office of the State Treasurer in Olympia, Washington,
V or at the-option of the holder, at the fiscal agency of the State of Washington in New York City. Coupon bonds in
:
'/.• denomination of $1,000, registerable as to principal only or as to both principal and interest.

vVr;
i

V/ :.

^

V;-'

.

,

v-.i

'■*.

.

./'v1

"

i'.

'

Legal Investment for Savings Banks and Trust Funds in New York and
>for Savings Banks in Connecticut and Massachusetts
1 *

<

,

I

v

,

*

r

.

i'

one of the greatest
Most plants to be built

was

record.

on

t

more

gradual. The gradual rise would
be followed by a levelling off in

k

February 1,* 1959

uninterrupted; and

an

rapid rise for 16 months. The best
assumption at that time should

,

that

year would not be produc¬
ing until 1957, and many would
hot come into full production until

1958.

One

(Accrued Interest tobe added)

hardly escape the
conclusion that a great portion of
-

can

assumption that

1957

most unusual.

been

k

increase

the .mammoth
too

seemed
Of

$1,390,000

3%

1973

3.10%

3

1974

3.15

3 '

1975

3.15

or

Price

860,000

1960

1.80%

$1,115,000

1961

2.05

1,155,000

1968

2.90

1,440,000

1962

2.25/

1,200,000

1969

2.95

1,495,000

1963

2.40

1,245,000

1970 ©100

1,555,000

3.20

1976 @100

1964

2.50

1,290,000

1971

3.05%

1,610,000

3.20

1977 @100

1,035,000

1965

2.60

1,340,000

1972

3.10

1,670,000

3.20

1978

3.25%

1,075,000

make

must

one

Due

1,000,000

1956

big.

course,

Rate

965,000

Hence,
in

Amount

Price

Amount

930,000

Had that happened it would

have

Due

Yield

895,000

5

rapidly rising
be
required
and
possibly

a

would

production
throughout

Yield

Yield

Rate

Due

1966

2.70

1,735,000

3.20

1979

3.25

Rate

Amount

the plant and equipment expendi¬
tures in 1.956 were made on the

1958.

AMOUNTS, COUPON RATES, MATURITIES* AND YIELDS OR PRICES

.

,

allowance for the fact that
much of the expenditure was for

or

1967

2.80%

the bonds then outstanding, In Inverse order of number,
February 1, 1969, or any subsequent semi-annual interest paying date.

The right Is reserved to redeem any or all of

proper

at par

and accrued Interest

on

improvement in efficiency rather
than increase in capacity.
While

t

spending
would

more

in

in 1958.
Such postmortems

offered when, as and if issued and received by us, and subject to prior sale and approval of legality by
Preston, Thorgrimson & Horowitz and by Messrs. Houghton, Cluck, Coughlin & Henry, Attorneys, Seattle, IFash.

The above Bonds are

1956,

Messrs.

have

not

drastic decline

for the

called

with

that

seems

capital

situation

the

too dog¬

cannot be

one

it

matic
modest

ex¬

perienced
*

which helps us in future

at about

be

may

and

1959

In date

of

of little

are

except for knowledge gained

use

recovery

With
be

some

able

look

a

as

decisions.

early

we

1960

in

were

caution in 1960
make

to

we

1961

1956.

with careful business planning we

A. C.
i

work toward

goal

a

Plenty
The

of

of "fre¬

rather

quent
oscillations"
rugged cycles.

■

than

Customers

dominant and

well

The

".'40s"

will

have

They

also

homes.

This

own.

antee

Allyn and Company
-

babies
babies

will
does

of

B. J. Van

of

their

Schoellkopf, Hutton & Pomeroy, Inc.

Ingen & Co. Inc.

Clark, Dodge & Co.

City National Bank & Trust Co.
Kansas

Bache & Co.

''

Hirsch & Co.

Fidelity Union Trust Company

Fitzpatrick, Sullivan & Co.

establish

international condi¬
lead to unprecedented

growth in business volume.
vWith
good management
the
1960-63 can stand as a solid

years




Ira Haupt & Co.

Newark

'

J. A. Hogle & Co.

Laurence M. Marks & Co.

W. E. Hutton & Co.

W. H. Morton & Co.
Incorporated

Wm. E. Pollock & Co.,

Inc.

Swiss American Corporation

Spencer Trask & Co.

not guar¬

prosperity but it will be a

can

F. S. Moseley & Co.

the

domestic and

tions

Ladenburg, Thalmann & Co.

C

Bramhall & Stein

Harkness & Hill

The Illinois Company

Incorporated

basic ingredient that with proper

.,

Alex. Brown & Sons

Incorporated

Francis I. duPont & Co.
adver¬

will have another explosion in

population.

new

Wertheim & Co.

City

tised fact about the " '60s" is that
we

Carl M. Loeb, Rhoades & Co.

can

nate

can

The Northern Trust Company

Smith, Barney & Co.

Ripley & Co.

Incorporated

•

Seattle-First National Bank

better.

lot

Harriman
/

1962

scarcely hope to elimi¬
business
fluctuations.
But

We

The First Boston Corporation

Incorporated

we may

and

Blyth & Co., Inc.

J. P. Morgan & Co.

The Chase Manhattan Bank

similar stage

a

Ryan, Sutherland & Co.

Stern Brothers & Co.

Incorporated

.

Tripp & Co., Inc.

Trust Company of Georgia
Northwestern National Bank
of

Louis

Co., 1562 Main Street.

Exempt from present Federal Income Taxes

New Issue

—

with J. Clay¬

year.

/

Flax

(Special to The Financial Chronicle)

1954 reces¬

The historical pattern of
recovery is one of rapid increase
in
activity for
the
first
few
months — perhaps for a year or

can

the next recession.

final

September of that

work

we

"Frequent Oscillations"

1958 and beyond.

Recovery from the

us

situation where

a

Minneapolis

Wood, Gundy & Co., Inc.

3

The Commercial and Financial Chronicle

(764)

Beneficial Finance

Co.—Analysis—Reynolds & Co., 120 Broad¬
New York 5, N. Y. Also available is a survey of Oil
Stocks, and a report on Union Tank Car.

Elects Officers

Botany Mills, Inc.—Analysis—Woolrych, Currier & Carls en, 210

.

West Seventh

Street, Los Angeles 14, Calif.
—
Analysis — Edwards & Hanly, 100
North Franklin Street, Hempstead, N. Y.
Chicago Rock Island & Pacific—Memorandum—Hirsch & Co.,
25 Broad Street, New York 5,,N. Y.
Columbian Carbon Company—Analysis — Schweickart & Co.,
.29 Broadway, New York 6, N. Y.

CHICAGO, 111.—James M. Howe,

Burroughs Corporation

Recommendations & Literature
It is understood that the

firms mentioned will be pleased
parties the following literature:

send interested

to

Thursday, February 12, 1959

.

NASD District No. 8

way,

Dealer-Broker Investment

.

.

:

partner, Farwell, Chapman & Co.,
Chicago, was elected Chairman

Cook Electric Co.—Memorandum—Blunt Ellis &

Simmons, 208
Street, Chicago 4, 111.
/
Nemours &-Company—Review—Shearson,
iHammill & Co., 14 Wall Street, New York 5, N. Y. In the

•

45—Commenting on effects of AEC grants
to colleges and universities, on radiation instrument industry,
and discusses Salem Brosius, Inc.—Atomic Development Se¬
curities Co., Inc., 1033 Thirtieth Street, N. W., Washington
7, D. C.

Breakdown

Government

of

Bond

Portfolios

City Banks—Bulletin—Laird, Bissell
way, New York 5, N. Y.

New

13

of

'>

York

a

.

v

—

122

Limited, Victory Building, Toronto 1, Ont.,

— Chemical Corn
Exchange Bank,
Division, 165 Broadway, New York 15, N. Y.
Japanese Oil Industry—Discussion with particular reference to

Showa Oil

Co.

and

Maruzen

York,

Inc., Ill Broadway,

York City Bank Stocks—Year-end

ysis of

13

Meeds,

120

New York

Co.

Company,

&

Real Estate Bond and Stock

Averages—Comparative figures—
Amott, Baker & Co., Incorporated, 150 Broadway, New York
38, N. Y.
:
.

.

-

waukee2, Wis.LV..v
'v;%
•
Rubber—Report—J. R. Williston & Beane, 115 Broadway,-New
York 6, N. Y
Shoe Industry;— Review with particular reference to Brown
Shoe Company and International Shoe Company—H. Hentz
& Co., 72 Wall Street, New York 5, N. Y. Also available arc?
memoranda on Beaunit Mills and Illinois* Central Railroad,
and a report! on Singer Manufacturing Company.
Technical Trends in the Market—Analysis—Sutro Bros. &
Co.,
625 Madison i Avenue, New York 22, N. Y.
*
>
U. S. Banks and Trust Companies — Comparative figures —
A. M. Kidder & Co., Inc., 1 Wall Street, New York
5, N. Y.

„

'

American Broadcasting
son &
Co., 25 Broad

Paramount—Analysis—Cohen, SimonStreet, New York 4, N. Y.

American Title & Insurance Co.
734 Fifteenth! Street, N.
W.,

—

Memorandum

—

Weil &

Co.,

Washington 5, D. C.

Arden Farms

Co.—Memorandum—Bateman, Eicliler & Co., 453

South Spring Street, Los Angeles
13, Calif.
Armstrong Cork Co.—Data—Herbert E. Stern & Co., 52 Wall
Street,. New York 5, N. Y. Also in'the same circular are

data

on

Union Oil of California.

.

Bell & Gossett Company—Analysis—Blair & Co.
105 South La Salle
Street, Chicago

Incorporated,

3, 111.

Leonard

Jones, Division Chair¬

—

Key¬
first in Boston
Philadelphia and then for the

last

seven

Charles

A.

Edward
Street

been
associated
as
general
partner with various firms in Los

Angeles and became a general
partner of Hemphill, Noyes & Co.,
in charge of the Los Angeles of¬
The

other

states

and

with

Reynolds & Co., 425

member¬

Price has

Stock

the

the

staff

New

of

Street,

York

been

Sutro
and

Exchanges..

&

sales

The

office

adminis¬

the

in

in

solidator of international
cargo with a network
of 278 offices and

agents throughout the world.

New

territory

added

Co.,

members
Pacific

states

of

tive

Coast

in

FINANCIAL




Teletype NY 1-376; 377; 378

j

and

recently Vice-

of the
department of
Burr,; .Incorporated,
manager

trust

and

and

former

a mem¬

chairman

the

of

Investment Companies Committee
of the Investment Bankers Asso¬
of

America

and

has

held

several important committee posts
in both the National Association

*

of

CHRONICLE

Securities
National

Dealers,

Inc.,

Association

and

of

In¬

vestment Companies.

Dean Witter Adds

1, 1929-Dec. 31, 1957

to

Staff

(Special to The Financial Chronicle)

Available

Security Dealers Association

Trinity Place, New York 6, N. Y.

;.;

most

was

President

•.

ciation

&

New
New

long been ac¬
investment banking cir¬

cles and

"FOR SALE"

Jan.

74

the six
Upper

Mr. Amazeen has

From

HAnover 2-2100

and

investment bankers. He is

122-Bound Volumes of the

main

William

1

Street in Boston.

460

the

Members New York

York,

covering

England

Coffin

COMMERCIAL

Troster, Singer & Co.

company's

York State with offices at 79 Milk

ber
con-

and

Street.
He will also be regional
representative in its New England

Express International Corp.

largest forwarder, clearance broker and

Inc.,

service

sales

and

investment

)) Air

Fund,

na¬

One

active in

tration

FRANCISCO, Calif.—

Montgomery

...

Mont¬

(Special to The Financial Chronicle)

to

company,
for The

Amazeen will be

Mr.

Sutro Co. Adds

Everett L.

the

Street

Scudder Fund of Canada Ltd.

gomery Street. He was previously
with First California Company.

SAN

of

underwriter

tional

ver

principal office

holds

been

Sales, Inc., it
was
an¬
by Dorsey Richardson,

President

SAN FRANCISCO, Calif.—GroG. Jones has become affiliated

Mr. Frost has been active in the
has

has

Amazeen

S.

elected Vice-President of William

William

1919. He

on

William Street Sales

Calif.—Don¬
with

now

(Special to The Financial Chronicle)

business since

the -company's rep¬
the Pacific Coast.

as

Edw. Affl3Z66fl ¥.*P. Of

Now With Reynolds & Co.

man.

securities

has been with

nounced

ships in the New York, American,
Boston and Midwest Stock Ex¬
changes and the Chicago Board of

A Brochure On:

Vachon

and

Irving
Lundborg & Co., 710 Winslow St.
are

Trade.

Going to Press

Mr.

stone for 14 years,

resentative

REDWOOD CITY,
W.
Kirk
and

of his firm is in New York City,
with branch offices in numerous

financial institutions only—

tributor in the mutual fund field.

\:

ald

bership in the Pacific Coast Stock

William H.

-

(Special to Tut Financial Chronicle)

Jr.,
general
partner
of
Hemphill, Noyes & Co., to mem¬

Exchange through the purchase of
a membership in the Los
Angeles
Division, has been announced by

company*, organization;.

Key¬
New
England and New York State for
the past-eight years, following 14
years as an underwriter and dis¬

;•C f

Two With Irving Lundborg

Frost,

fice in 1952.

For

vestment

Organization, 120 Broadway, New York 5, N. Y.

.

,

L Mr. J Swaney has. been
stone's
representative! in

West Canadian Oil & Gas Limited—Bulletin—De Witt Conklin

D.

Angeles, have been

Vice-Presidents

by The
Company of Boston, it
was announced by. S. L.
Sholley;
President of the 27-year-old in¬

—

j

Francis

No. 8.

Keystone

''

of

Committee

elected

^Skclly Oil—Bulletin—Bache & Co., 36 Wall
Street, New York
5, N. Y.
'

election

Brady, with the NASD
Chicago, is Secretary of

in

Vachon of Los

American Machine & Foundry Co.

Coast Exch. Member

named

was

BOSTON, Mass.—Two senior
Regional
Representatives,
John
Swaney of Boston and Louis A.

.

The

Inc.

Swaney, Vachon, V.-Ps.
Of Keystone Company

..

Report — Hayden, Stone & Co., 25
Street, New York 4, N. Y.
•

.

Co., 25
4, N. Y.
" •
- / '
Air Express International
Corp.—Brochure—Troster, Singer &
Co., 74 Trinity Place, New York 6, N. Y.

•

Signal Oil & Gas Co.—Analysis—Dean Witter & Co., 45 MontV' * gomery Street, San Francisco 6, Calif.
'
•'?
/ V
"

•'

Co.

Annual report — National
Wall Street, New York 5,

>

■

Kelly, Vice-President

&

—

.

Vv ,L

dealers

John F.
office

Sealed Power Corporation—Analysis—A. G. Becker &
Co., In.....,—corporatedy.60. Broadway, New York 4, N* Y.
i
:
v ; -

,

Collett

District

Analysis — Laird, Bissell &
Meeds, 120 Broadway, New York 5, N. Y.
Rayonier, Jnc.-r-Data—Oppenheiiper, Neu & Co., 120 Broad¬
way, New York 5, N.-Y. Also in the same bulletin ate data
on

and

Vice-Chairman.

—

Radio Corporation of America

Refractories Company and A. P. Green Fire Brick Company
—The Milwaukee Company, 207 East Michigan
Street, Mil-"

&

T. Gordon

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

Broad

organization

Wisconsin.

and

Corporation—Analysis—Mitchell, Hutchins

Plough, Incorporated

largest
brokers

The district com¬
prises of States of Illinois, Indi¬
ana,
Iowa, Michigan, Minnesota

Seattle First

L\'.

Chemical

the

securities

of

100

"♦

Kelly

in the country.

Co., and Celotex Corporation.
Pennsalt

4, n. y.

Watson

of

/

Refining

T. Gordon

Howe

M.

Naiional Association of Securities

Co.,

Co.—Analysis—Alfred L. Vanden Broeek & Co.,
55 Liberty
Street, New York 5, N. Y. Also in the same cir¬
cular are analyses of Miles Laboratories, Stone & Webster

and market performance over a 20-year period —
National Quotation Bureau, Inc., 46 Front Street, New York

mem

&

Salle

New York.

yield

ACF Industries, Inc.—Memorandum—T..L.
Broad Street, New York

Allyn

A. G. Nielsen

Jones Averages and the 35 over-the-counter industrial stocks
used in the National Quotation Bureau
Averages, both as to

particular reference to General

C.

analyses of Union Bag-Camp Paper and

Sugar

City

with

James

of District Committee No. 8 of the

Dealers,

Co.—Memorandum—A.

National Sugar Refining Company

comparison and anal¬

parison between the listed industrial stocks used in the Dow-

Review

*

National Bank.

Broadway,

—

S. La

brief

New York 7,

bank stocks—Laird, Bissell &
New York 5, N. Y.
Over-the-Counter Index—Folder showing an up-to-date com¬

Refractories

S.

U.

Acme—Analysis—du Pont, Homsey & Company, 31
Milk Street, Boston 9, Mass. Also in the same circular are

New York.
New

and

National

Nomura Securities Co., Ltd., 61 Broadway, New York 6, N. Y.
Japanese Stocks—Current Information——Yamaichi Securities

Company of New

Securities

Aircraft

Co,

Oil

Company

Refrigerator

Street, Chicago 3, 111.
Locw's Inc.—Analysis—Herzfeld & Stern, 30 Broad Street,
New York 4, N. Y.
Midwestern Instruments—Review—Ira Haupt & Co., Ill Broad¬
way, New York 6, N. Y. Also available is a report on Cessna

Economic survey

Co.,

Hussmann

Denver and Chicago Pneumatic Tool.

International

Oil

of

survey

Interstate

Canada.

Mitsubishi

General Develop-.

report on

a

Hess,'Moyer & Co.,"
Street, Philadelphia 9, Pa.
Ingersoli Rand—Data—Dreyfus and Co., 50 Broadway, New
York 4, N. Y. Also in the same issue are data on Gardner

Mining Stocks—Booklet—Draper Dobie and ComLtd., 25 Adelaide Street, West, Toronto, Canada.

—

is

National

123 South Broad

Canadian Pre Budget Monetary and Fiscal Outlook—Review—

Japan

analyses of Blaw-Knox and U. S. Rubber

'iu Rubber.i: r"
•;
,
'..v.;
'/
Houston Corp.—Memorandum—Woodcock,

Canadian

E. M. Saunders

are

Also available

Batteries, Inc.—Survey—Abraham & Co., 120
Broadway, New York 5, N. Y. Also in the same circular is

able is current Foreirn Letter.

pany

de

bulletin

Company.

;

Gould

Monthly Investment letter — Burnham and
Company, 15 Broad Street, New York 5, N. Y. Also avail¬

-

Pont

du

: same

c

Meeds, 120 Broad¬

&

I.

■Li ment Corporation.

•

Burnham View

South La Salle

-

.

E.

Atomic Letter No.

■

Write

or

LOS

immediately in N. Y. C.
^

Phone

Edwin L. Beck, c/o

ANGELES, Calif.—Robert

A. Brown, Alton R. Cary, Jack G.
—

REctor

2-9570

Goss, William T. Howard, Donald
E.

Chronicle, 25 Park PL, N. Y. 7

McKee

have
Dean
.

been

and

Elmer

added

Witter

Spring Street.

&
.

Co.,
■

,

F.

the

to

632

j ;.

,

Wirth

staff

< v.

of

South
.

i

_

-

Volume

189

Number 5820

.

.

The Commercial and Financial Chronicle

.

(765)

Secular Trend Questions

What Should Be Considered

These

analyses

inflation

In

as

a

would

Our

basis for their pro¬

may

By DR. ORVILLE J. HALL

profitably

tions

College of Business Administration

as

whether

University of Arkansas

a

three

answer

we

may

expect

ards

ques¬

guide

general

by

to

(1)
be

in

you

expect

repeated
Budget to

the Federal

ing

The

writer hopes that the insight provided in interpreting
changes in GNP furnishes a basis for rational interpretation

ness

continues and busi¬

resumes

rate

a

•

"normal"

more

of

production, record highs
being projected for this coun¬
try's Gross

are

National
Product.

question: "How will this affect my
rate of consumption?"

task

is

living

This

to

of

stand¬

To

effected
of

estimate

the

$600

such

(2) Do you expect organized
labor to continue to be successful
in
obtaining higher wage rates

life

the Gross National Product
individual

years hence as¬
that these dollars will con¬

most

to

ture date.

ten

be

the

as

items
of

as

consumers

clothing,

or

general

except in a
is not offered

forecast of GNP at

a

on

and,

way,

some

fu¬

It is

believed, however,
that this method of interpreting
changes in GNP provides a basis
for
a
rational
interpretation of
the rise of output in United States

same

of consumption goods would
provide greater "wearability" for

bank credit?

article presents a method
analysis of the impact of change

in

at

time when

a

entertain

we

misleading view that
record-breaking
total

longer

durable

each

the
new

value
of
goods, the same
(of constant goods; and services is a new high
purchasing power) would enable in terms of real well being of
in the United States.
and/or fringe benefits and thus consumers to
buy more goods, each member of the increasing
increase labor costs with increas¬ thus
contributing to a rise in the United States population.
indicates a GNP of $548.75 billion
ing output?
rate of consumption.
of a basis of $2,500 per capita.
Every con¬
(3) Have you expressed your sumer, of course, hopes that his
A. G. Yeager Opens
Any decrease in the per capita
disapproval of secular inflation by purchasing power will increase
estimate would, of course, reduce
SACRAMENTO, Calif. — Albert
any communication to your Sena¬ and thus let him buy more goods
the projected GNP values.
How¬
G. Yeager is engaging in a secu¬
tor or Representatives, or others and
services.
We
do
not
know
ever, for use in this analysis,, at¬
rities business from offices at 1820
whether this will occur, but to the /
tainment of a GNP of $500 billion in policy-making positions?,
Eye Street. 1 '
' * ' Your answers to these questions extent that such an increase in
by 1968 will be assumed. It should
of
be pointed out that this projection and the answers of other thinking rate
consumption does take
is based on dollars of 1958 pur¬ persons, may provide a basis for, place, the $600 billion GNP pro-' /Willard E. Ferrell Opens
PHILADELPHIA, Pa.—Willard
chasing power, and it does not projecting the trend of inflation. jection must again be revised up¬

of the rise of output
As recovery

$600

buying in recent years.
the extent that improved qual¬

financed, in part at least, by
ity

in

of

have been

sale of bonds to banks, thus creat¬
new

in

spent for
goods and services that

Dr. Hail also outlines three questions that should be answered

ascertaining extent of price inflation in the secular trend.

The

GNP

sumes

secular

difficult

changes

1968.

tinue

Do

deficits

GNP

a

that will have been

billion

inflation.

Arkansas economist exposes some of the pitfalis and other
hazards that should be considered in reading GNP projections.

most

project

jection. Parenthetically, the reader

Reading 6NP Projections

indicate

billion by that time.

secular

assume

9

The

number

of

dollars

•

■

importance
the

of

level

tained

at¬

by the

nation's

total

reflect

output of

any deflationary or infla¬
tionary influences or changes in
our standards of living.

goods and
services lies,

,

particularly,
in

its

Any projection with respect to
changes in prices of goods and
services is subject to many haz¬
ards, and one estimate may be

inter¬

pretation in
of

its

capita

re¬

terms
per

increase

Orville

Prof.

J.

Hall

in

.

still greater increase

a

in population would result in

less
GNP per capita. Also, record higlis
of GNP may be explained in part
by inflation — with more dollars
being required to purchase the
same goods and services.
*

less

even

lationship. For
example, an
GNP with

,

However,
to

illustrate

ing,
were

are
a

than

another.

attempting only

method

of

reason¬

interpreting the signifi¬
of GNP projections. If we
making statistical forecasts,

in

cance

we

accurate
we

The past
dependable

ward.

E. Ferrell

The

GNP

United

per

capita

in

the-

is

conducting

ties business from

States

evaluating

and

docs

in

changes
seek

not

to

,

for the decade

ending in 1968, the
rounded projection of $500 billion
GNP

for

vised

more compre¬

hensive studies.

upward by 20 to 25%. A
increase in prices by 1968

20%

1968

This

announce merit

is not

an

V

such changes.

must

then

be

re¬

is

in GNP
important, particularly insofar

gomery
New

Street,

York

and

members. of
San

as it affects each individual.
Pro¬ Stock Exchanges. Mr. Knight was
jections of the total GNP become formerly with Irving Lundborg &
more
'
significant in light of the Co.
■

,

offer oj securities for sate

New Issue

or a

solicitation of

an

offer to buy securities.

^February 11, 1959

•
.

power. The GNP per
capita in United States in 1955
$2,370, the next year it was
$2,466, and in 1957 it was $2,537.

purchasing

550,000 Shares

was

Since this discussion centers

on

"

r-rv

Reynolds Metals Company

analysis (rather than in
explanation of the value of data
the dollar amount of GNP

used)

r

a

method of

capita used to illustrate this
method is of less importance than
if an attempt was being made to
project the GNP for a particular
year. For this reason, an arbitrary
GNP per capita value of $2,500
per

Second Preferred Stock, 4%% Convertible Series
(Par Value $100

An increase in GNP to

Share)
share, subject to the Company*s

right of redemption

record

a

per

Each share convertible into Common Stock at $75 per

is used.

could result solely from an
in population, even as¬
suming an unchanged, or even a

high

increase

lower, GNP per capita, and thus
population changes must be con¬
sidered in any
We

worthwhile analysis.

be either generous

may

conservative in

Price $100 per

or

forecasting popu¬
The U. S. Bureau

lation changes.
of the Census'

most

share

plus accrued dividends from date of issuance

conservative

forecast for 1960 predicts a popu¬
lation

179.4

of

most

liberal

181.2

million.

million,

forecast

its

and

is

Similar

ot

one

low

Copies oj the prospectus map be obtained Jcom siwli oj the undersigned
(who are among the underwriters named in the prospectus) as mag
legatlg ojjer these securities under applicable securities taws.

and

high estimates for 1970 are 202.5
and
219.5
million, respectively.
The
mid-points
between
these

projections are

130.3

million for

211.0

and

1960

million

an

increase

indicating

decade of 30.7 million

lor

1970,

for

or an

the

aver¬

of 3.07 million increase per
year.
On the basis of these pro¬
jections, a population of approxi¬
mately 205 million is forecast for
1968. Our per capita GNP of $2,500
discussed
above, applied to

Kuhn, Loeb & Co.

Reynolds & Co., Inc.

Dillon, Read & Co. Inc.

age

our,

205

projected population figure of
million

1968 of

The
tion

forecasts

most

conservative

estimates

1970—some

GNP

GNP

in

Eastman Dillon, Union Securities & Co.

Goldman, Sachs & Co.

Harriman Ripley & Co.
Incorporated

Kidder, Peabody & Co.

Lazard Freres & Co.

Lehman Brothers

Merrill Lynch, Pierce, Fenner & Smith
Incorporated

.

,.

.

Stone & Webster Securities Corporation

Smith, Barney & Co.

White, Weld & Co.

Hornblower & Weeks

Lee Higginson Corporation

$512.5 billion.

of

the

popula¬

Census

million

of

billion

Bureau's

for

most

per¬

Hemphill, Noyes & Co.

Carl M. Loeb, Rhoades & Co.

F. S. Moseley & Co.

Paine, Webber, Jackson & Curtis

a

that

liberal

of 219.5 million for 1970




Drexel & Co.

for

analysis predicts

$506.25

The

estimate

of

202.5

sons—by like

year.

a

Blyth & Co., Inc.

L F. Rothschild & Co.

Salomon Bros. & Hutzler

the

Francisco

The

post-World War II trend in
value of GNP per capita has been
upward both in dollars in pur¬
chasing power of each successive
year and in dollars of
constant

1033
i

.

The impact of changes

GNP,

predict

securi¬

'

This article points out a method

of

a

offices at

Rhawn Street.

in 1947 dollars was
However, for our pur¬
poses it may provide a background $1,880 in 1945, $1,953 in 1955, $1,Dean Witter Adds Four /
974 in 1956, and $1,958 in
1957.'
against which changes may be
(Special to The Financial Chronicle)
evaluated.
The data on the rise These data suggest that a rise in
in consumer goods prices ("based GNP per capita may be expected
SAN FRANCISCO, Cal.—Cecil
during the decade ending in 1968.{ A. Culp, James* A;
on 1947-49=100) suggest an aver¬
Gentry, RawEven a 3% increase for the decade
age rise of 2.3 to 2.4 points per
son
E.
Knight and
Trevor
C.
would raise the $600 billion GNP
Roberts have become associated
year for the past decade.
If the
v with Dean Witter &
same
rate of increase continues to $618 by 1963.
Co., 45 Mont¬

the future.

would have to seek additional

data and undertake

is not necessarily a
basis for projecting

F. S. Smithers & Co.

Wertheim & Co.

10

The Commercial and Financial Chronicle

(766)

securities issued during the crease in bank holdings was out¬
reached a new postwar high. side of the larger financial centers.
The Treasury would have pre¬
As part, of this $69 billion job
the Treasury issued $2.9 billion of ferred, however, that a larger part
of
its
long-term bonds and $16.7 billion
financing outside of the
of
notes
and banks during the second half of
intermediate-term
bonds running from 4 years to 8% the calendar year had been
years to maturity. As a result, the' through longer term savers—such
average length of the marketable as individuals and savings insti¬
debt was increased by two months tutions—rather than through nonduring the year—from 4 years and financial corporations. In the lat¬
7 months to 4 years and 9 months. ter case investment in. Govern¬

.

.

Thursday, February 12, 1959

.

able

Treasury's Financing Views and
Debt Management Problem
By CHARLES J. GABLE, JR.*
Assistant to the

Secretary of the Treasury

on

Management of the Public Debt, Washington, D. C.

speculative excesses in governments:
anticipates heavy Treasury financing in 1959—though smaller
in dollar volume than 1958—and a new high in short-term
debt in the offing; and believes size of budget deficit is a
secondary problem compared to psychological reaction of
investors who see in this presageful evidence of continued
inflation and, as a result, shy away from mortgage, corporate,
municipal as well as Federal debt. Mr. Gable announces rem¬
edy is being sought to restrain undue speculation which will not
hamper legitimate dealer operations and he deplores lack of
savings institutions' and individual holdings of governments.
He states Treasury's 1959 financing program will be dependent
upon economic growth and fiscal soundness, and he fully
supports a free bond market.
Treasury official hits

Refers to Individuals' Savings

year

Moreover,

This

was done despite the inabil¬
ity of the Treasury to extend any
debt beyond 2% years to maturity

unsettled

the

in

inviron->

market

ment which characterized the last

half of 1958.

The slight

lengthen¬
was in
contrast to declines of approxi¬
mately six months each in the
average length of the debt during
the
two
preceding
years
and
brought the average back almost
to the level of five years ago when;
the long postwar decline;in thes
average length of the debt came to .
ing of the debt last

year

end.

ing

Government

and
an

is

only

offset

of other government securities. In

typically in the
obligations available

to

ernment issues.

of

their

E

which

can

solved

by ap¬

plying

a

set

viduals,

be

levels

After

basic

principles
which

al¬

we

all

and

the

in

Government

some

reduction

debt

in

the postwar period the
public debt grew steadily again
under the burden of heavy de¬
fense requirements and the Ko¬
early

are cer-

tain

of

corporations

Nation.

rigid

of rules.

There

all

,

in

environment

peak of $281
1955. During
the calendar years 1956 and 1957,
under the impact of two years of
budget surpluses, the debt was

and the market

reduced to

atmosphere in

billion

War, reaching
billion on Dec. 31,

try to
follow, but the
very fact that

rean

ways

the economic

which

the

Charles J.

Gable, Jr.

changing
to debt
management must always be flex¬
that

our

approach

ible:
(

The impact of

stances

on

changing circum¬

debt management poli¬

has

That $6

been

com¬

counts.
in 1958

was clearly illustrated by our
experience in the calendar year

Marks

Postwar

High

of Treasury financing
made somewhat

was

more

ings

provided

a

market

proximately $2 billion
Government securities

for

postwar period
showed a decline of

whole,

billion in

their investments.

true because of the

expenditures

1952

a

as

$0.8
This

excess

of

in
debt
was
growing
debt at the end of

year

was

year

a

$8

sound

billion
a

to

manner

the

debt

as

Trust

Fund

and

the

Bond

♦Bit

Govt

Total

ment

Credit

Nonbank

Accts.
♦8

securities

in

the

first

Components of Private Nonbank

Investors

the assets

tions

were

was

*7.0

nonfinancial

time

r " 01'

were

January-June 1958
Individuals

♦4

Savings
Institutions

E&H '
Bonds
6

Other

J

*7771

a

-4.9'

-4

Corps, and Other

J

7

when

corporations
their

profits

at

at

a

As

at

hold¬

by

a

Government securities
cases

a

time

tary

approxi¬

their

rities,

in

with

low point.

ings of Government securities by
individuals and savings institu¬
tions since the bonds were paid
for, in effect, by selling shorter
maturities to banks.

the

amount
new

An

vidual

assets

clearly that no indi¬
found their way
net

during these years, de¬
spite substantial increases in E
and H bonds. During the past six
years
individuals had new sav¬
ings of $137 billion available for
investment either through savings

directly in securi¬
Of this total
$106 billion was placed directly
in savings institutions, and as has
been
already indicated in the
chart, no part of this flow of sav¬
ings on net balance reached the
or

there
was
an
increased
of speculative activity in

-

intermediate-term

June

maturing

subscribed

de¬

ties and mortgages.

result* particularly

was put out as one part of
optional offering in exchange

for

balance

institutions

a

bond
an

secu¬

on

As

government issues on the as¬
of
a
continuation of

The

savings

into Government securities

mone¬

sumption

slightly.
analysis of individuals' sav¬
during the last six years

shows rather

and

these trends.

clined

ings

recession

than

securities
in

for

an

and was

amount

$7

trends of recent months had con¬
tinued.

But

improvement in busi¬
plus rumors in the
financial community as to a possi¬
ble reversal in monetary policy,
resulted in a sharp turnaround
in the bond market.
As a result
ness

news,

many

or

.

speculative buyers who had

financed their
no

purchases

margin

were

Continued

on

SAVINGS INSTITUTION

year,

entering into
a period of vigorous economic re-,
covery, two-thirds of the $6.6 bil¬
was

absorbed

in

the

by

public

debt

investors

INVESTMENT IN GOVERNMENTS
As Percent of Assets

Gov'ts Held

±
•to**!mm**




C.

■

life Insurance

$10.3 BiL.

Mutual

14V

\—/952

>

-Companies.—

Savings

Banks..

7.2.—

1 r*!958
37%

9.5—

■\'0

7.3—

I

Associations-

1.8—

HI

3.8—

State and Local

ED

54%

Pension Funds..

out¬

lessening somewhat the inflation-"
impact of Federal deficit fi¬
nancing at a. time when other de-.
mands for funds \yere rising and
monetary policy sought > properly
to temper the rise in money sup¬
ply. Furthermore, all of the in¬
ary

36

December 1952 and 1958

economy

increase

to

page

side of commercial banks thereby

0

little

on

forced

liquidate them. The resulting dis-

Government securities market.

Savings and loan

second half of the

lion

of

billion—consider¬
ably in excess of what had been
expected by either the financial
community or by the Treasury.
This
large
amount
presumably
could have been properly digested
by the market, however, if the
more

Even the sale

long-term bonds during the
first half of the year did not re¬
sult in a net increase in the holcl^

with

June,

substantial decline

of

the

in

regard to the 2%% seven
bond which was offered in

year

has shown

percentage

early

made each new security
quite attractive soon after

issuance.

Governments has

declining and

ease

look

during the last six years. Even in
the case of rapidly expanding sav¬
ings and loan associations, which
have been building up reserves

invested

rates

rising

prices

continuing

institu¬

in the form of Government

the

year the Treasury had little diffi¬
culty selling securities which were
priced very close to the market
at
the
time they were issued.
Subsequent market rises resulting
from
investor
anticipation V of

is shown in the accompany¬

were

new

In the

♦4

bond

December,

these

a

Short-term Holders

♦8

With interest

mately $100 billion.

by the Treasury of $2.9 billion of

'

of

growing

shrinking and their tax liabilities
Federal
Reserve

done

the

in

changes

half

of the year, with most of the liq¬
uidation being accounted for by

Private

Invest

when

in most

Sales Broadened

as

CHANGES IN PUBLIC DEBT OWNERSHIP IN 1958

$26 billion in

This

dramatic

com¬

to

Treasury had to do its financing.

receipts in the ' ing Chart, therefore, the propor¬
Unemployment Trust Fund, the tion of assets of each of these
Federal
Old-Age and Survivors types of institutions invested in

Highway Trust Fund.

in

to

1958.

reference

market environment in which the

over

The job of adding a net amount
of

past

their

reduced

without

rather

is

of
Government
securities
$27% billion in December,

from

for

average

the

during

ap¬

a year
on

Base
possible last
which
the
year required the Treasury to go
Treasury financing in the first
to the market six times during the half of 1958 was conducted in the
again.
The
December 1958 amounted to $283 year to raise new cash of $17 atmosphere of recession, with ris¬
billion.
billion, plus $2 billion more cash ing bond prices, falling interest
This is a large debt any way raised through additions to week¬ rates, and monetary ease. In this
you look at it and one which is ly bill offerings. This large amount atmosphere
it
was
appropriate
of new cash borrowing was need¬ that Treasury offerings were de¬
woven into the asset structure of
ed not only to cover the deficit
every major class of investor in
signed
primarily to appeal
to
the country. In the savings bond but also to cover the retirement commercial banks, as debt man¬
program alone an estimated
40 of other securities growing mainly agement
sought to complement
million individuals own bonds and out of marketable maturities paid
monetary policy in its endeavor to
about eight million are buying off in cash and the redemption of increase the money
supply and to
bonds currently through payroll wartime F and G savings bonds better assure the availability of
which are now maturing. At the adequate credit for economic re¬
savings plans.
The $283 billion public debt at same time the Treasury issued covery.
As a result commercial
the end of December represents $50 billion of new securities in bank holdings of the debt rose by
an amount equal to 63%
of the exchange
for
maturing
issues $5.8 billion in the first half of the
total gross national product. It is
($28% billion publicly held and year, even though the total debt,
was
an
amount equal to more than
rising by only $1.4 billion.
$21% billion held by Federal Re¬
(See Chart).
$1,600 for each man, woman and
serve banks and Government in¬
With the exception of Series E
*From a statement by Mr. Gable be¬
and H savings bonds held mostly
vestment accounts)
so
that the
fore
the
Joint
Economic
Committee,
Washington, D. C., Feb. 5, 1959.
total of $69 billion new1 market- by small savers, all types of nonbank investors liquidated Govern¬

The

plete

highlighted by the fact that the
four major groups of savings in¬
stitutions
insurance companies,
mutual savings banks, savings and
loan associations and pension

difficult by the fact that Govern¬ funds—have
investment accounts, which,

ment

was

securities

financing took

place in 1958 would not be

persistence of the postwar
trend of savings institutions away

—

The job

had

in which Treasury

The

Government

Hits Speculative Wave

.

A discussion of the environment

Singles Out Savings Institution

from

individuals who have the

A
satisfactory solution to the
problem of making government
securities
attractive
to
savingstype investors is not easy to find.
The Treasury is, however, explor¬
ing all possible] ways of encour¬
aging
greater
participation
in
government security ownership by
these purchasers.
5r]
^.V"-

the

Insurance
1958

cies

1958.

$275 billion.

reduction

pletely erased, however, by deficit
financing in the calendar year
1958, which increased the debt by
$8 billion to a new high of $283
billion.
This was the largest in¬
crease in the public debt for any
year in the postwar period.

Treasury op¬
erates is constantly
means

a

*

under-one-year debt stood at
$80 billion. One year ago it was
$75% billion. It is now $72% bil-.
lion, of which $51 billion is held]
by the public and $21% billion
held by Federal Reserve banks
and Government investment ac¬

In the latter case,

the Treasury is up
particularly
difficult

opportunity of buying tax-exempt
state and municipal offerings.

H

and

a

tive to

their

1958, revers¬
ing .earlier trends, is an encour¬
aging, sign, however. Individuals
to

funds

debt management problem in try¬

in the second half of

further

the

investment

ing to make its securities attrac¬

holdings of Government securities

added

course,

against

savings, bond holdings in JulyDespite the fact that there ws*s December 1958, but again reduced
T would like to review some of child in America. Not only is the an $8 billion increase in the totaf their holdings of the larger inves¬
States
Government
the current problems which the United
the, debt in 1958, there was a reduc¬ tor type F and G savings bonds
Treasury faces in its debt man¬ largest single debtor in the tion of $3 billion in the amount and. their holdings of marketable
country, it accounts for one-third of marketable debt becoming due securities during the second half
agement program. These are not
of the total debt owed by all indi¬ within one
problems
year.
Five years ago of 1958.
an

of

direct

into state and local gov¬

gages or

hand, longer term secu¬
rities
are
purchased by savers
with more permanent investment
goals in mind.
The fact that savings institu¬
somewhat

all

for

during these six years went into
corporate securities, into mort¬

one

add

then,

effect,

available

the other

did

billion in E and
holdings was completely
by a decline in holdings

bond

H

step away from
increase in money supply. Oil

tions

obligations either.

An increase of $7

ment securities is

shortest term

of the remain¬

none

individuals' savings was in¬
directly in United States

vested

Corporate
Pension Funds..
J

40%

Ma4nsra,alM Vmot

50%

189

Volume

Number

5820

The Commercial and, Financial Chronicle

...

(767)

Importance of

The New Federal Budget
And Monetary

w

a

Balanced

ledger

."Federal Budget *

Policy

„

,

tion

By RALPH A. YOUNG*

%

t

k

„

has

...

balance

the

in

ened.

^

,

.

not

inflationary

Director, Division of Research and Statistics,

into

come

I960

budget, the budget makers
v- 'The maturing
of economic re¬ say that a catching up of tax re¬
covery and the shift of monetary ceipts will not be enough." Beyond
policy away from active stimula¬ this, some modest cut-back in ex¬
n.

convinced

dangers

all

have

penditures and

that

tax

less¬

Some observers continue to

receipts

additions to

some

needed.

are

Federal

ascribes

economist

'

System

•

to

monetary policy the duty of
avoiding inflation in fostering economic growth. Traces course

-

midst recent recession and
Stresses crucial importance of a balanced Federal

recovery.

budget, citing dangers of increased spending

}

including its : <
obstacle to effectiveness of monetary policy. Maintains infla- :il'
tionary hazards from larger Federal outlays ; can only be '

ll;

rll'rf

offset by additional tax levies.

—

Concludes stable

long-term independence of money supply from the
financing of chronic government deficits, although short-term
counter-cyclical deficits and surpluses are permissible. /

hi l' i

^
*

■*"

Monetary policy, through regulation of the supply of credit and
has the duty of fostering

money,

reversal

■'.ejconomit
•,

public

had actually set

'^policies a r e
^obviously also
^realization of

^seriously handicapped in carrying
and Fiscal Policy in

cial

yf tion; fiscal and monetary measures
Fiscal

':},y action during the recent period
a>recession

cushioning phase
recovery stimulant phase.

and a
I; With regard to recession c.usht1 ioning,- t h e> important -'features
,

•

included- transfer

y'- plements
automatic
v-,.

payment

disposable

to

declines

in

sup-

income,
tax

pay-

mcnts, and positive administrative

^measures to swell' defense

pro-

curement. .With regard to recovery

1/1 stimulation, major steps comprised
1';

Increase"'in'; national

defense
appropriations, provision of supplemental unemployment benefits,
ah

y an increase in Federal pay levels,
yii knd enactment of emergency housiing and highway construction laws.
1 These fiscal actions, of course, had

^motivations other than
lilus

to

pure stimalso, actual

recovery;

them

lagged

several

,

their

months.

"

enactment

of

vigor.

late

By

broad

most

1955

to

fiscal

1956.

by

:

Sin retrospect, these two phases

the

problems

situation,
would

be

manage¬

ards

about

deflation

to

of

larger

sufficient size to create a Federal
cash surplus: Indeed, only positive
tax

action

and

fiscal

biggest

budget

risk

ahead

itive tax action would be essential

lay once and for all those cur¬
rent
inflationary fears that rest
fundamentally in disbelief of our
A

fiscal

responsibility.

monetary policy designed

dollar is

stable

a

one

prices, in

kept

in which longer term

term

ing actions beyond the Adminis¬

fiscal

tration's

from

monetary policy is one that pro¬

budget goals will

prove

irresistible. Larger Federal spend¬

Both

ing

might

some

conceivably

accelerate

of the pace of real economic

vides

policy consistent with sound

longer

a

run

But at the high levels

permits of countercyclical deficits

already projected for

in

activity

catch up

two

expenditures

may

have

so

that

budget,

ing

might

At

of

income-outgo

the

merely

for

substitute

times

of

recession

monetary

to

each

savings

year

ac¬

supplement
must

have

limit if inflationary dangers

some

of

prosperity.

money

first

of

money

all

to

ann

ouncement is neither an

Shares.

offer to sell nor a solicitation of aft offer to buy any of these

The offer is

financial

markets

made only by the Prospectus.

psychology in
a growing

was

belief that the Federal budget was
of control.
This psychology,

out

Common Stock

found

support in the elastic qual¬
ity of current deficit estimates as
the year wore on, in part reflect¬

(without

ing unexpectedly large outlays for
farm price support.
It was also;
bolstered
by focusing telescopic

offering to the holders of record of its outstanding
(including officers)

The Company is

and of its subsidiaries rights to subscribe for these

of the Company

shares, as more fully set forth in the Prospectus. The subscription offer
to stockholders will expire at 3:00 P.M., Eastern Standard Time, on

February 24, 1959.

..

vig-

value)

Common Stock and thereafter to certain employees

lenses on possible Federal spend¬
ing programs—a magnifying proc¬
ess
which converted possibilities
into early realizations.

With evidence of rapid and

par

-

......

'

orous recovery in output and em¬
ployment cumulating, and in the

Subscription Price $22 V2

a

Share

Subscription Price set forth above (less, in the case
of sales to dealers, the concession allowed to dealers) and not more

spending,

they

helped

to

1

tivity.

action to combat recession also had two phases. The
cushioning phase came early, be¬
ginning in the late Fall of 1957

when recession trends were first
It

consisted

of

sharp

sion

balances.
form

increases
count

cial market tensions, to reduce

nominal volume the member bank
indebtedness to the Reserve Banks,

to

and to

'produce in credit markets
recognized state of ease. In the

;

a

!
j

phase of recovery stimulus, monetary policy followed through with
a
generous provision of reserve
funds
to
commercial banks by
means of open market operations
*

of Mr. Young,
Research and Sta.tistics, Board rf G-vernors of the Fed¬
eral
Reserve
System, before the 391st
Round

Director,

\.

table

remarks

Division

reserve

Board,

York,



price at which Common Stock is then being

offered to other dealers in the over-the-counter market by a dealer not
participating in this distribution, plus the amount of any concession
allowed to dealers.

in

Reserve

Bank

dis¬

rates.

Copies of the Prospectus may be obtained in any State from, only such
undersigned as may legally offer these Shares in compliance
with the securities laws of such State.

of the

.

.

This

was

retarding bank credit and mone¬
tary expansion.
Just as it had
been

effective in the past, so it
again effective this time. In
five

last

months

bank credit and
sion

was

reduced

economic

to

to

a

with

advance

finance

current

ing

the

of

the

the

pace

in

and

system.

money

bulk

deficit

MORGAN STANLEY & CO.
PUTNAM & CO.

of

outside

Indeed,

supply,

its

the

the

though

the

huge
bank¬

active

it

THE FIRST BOSTON CORPORATION

had

rather

covery

DREXEL &

2%%
tb*m

1957.

higher at
it had

the

recession-re¬

end

of

;

BLYTH & CO., INC.

EASTMAN DILLON, UNION SECURITIES & CO.

CO.

GOLDMAN, SACHS & CO.

1958

been at mid-summer

HARRIMAN RIPLEY & CO,
*

KIDDER, PEABODY & CO.

movement,'was just about

wide

,

of

shown

New-

ESTABROOK & CO.

CHAS. W. SCRANTON & CO.

year,

expan¬
rate much

period the Treasury was able

same

r

monetary

consistent

more

.

the classical method of

February 10,1959.

-

♦

Incorporated

SMITH, BARNEY & CO.

STONE & WEBSTER SECURITIES CORPORATION

of

of the Conference
Jan. 23, 1959.

meeting

of

than the highest known
,,

.

the

i

curtailment

a

the

System through open market
operations and of two successive

in enough volume to relax finan-

j

took

the

tion

market operations

action

funds supplied at the initiative of

I

open

of

This

offer shares of Common Slock at prices

not less than the

action to temper the expan¬
of bank credit and of cash

take

i

and

necessary that the
Reserve
System
should

is

geared

financing

contributory influence in the;;

was

»

the

762,565 Shares

-

Reserve Bank discount rate reduc-

)

supply

: con¬

This

more

stable

chronic deficits of government.'

The several underwriters may

confirmed.

i

that

and

renewal of inflation

by

is not possible if expansion

the

in

History has

proved

Federal

First, they

to maintenance of to-

tal spending in the economy. Sec¬
ond, through their optimistic impact on business expectations and
later actual impact in expanding

Monetary

5

offset

countercyclical surpluses in times

than *.once

high levels of economic

tivity, 'the

to

with them. To make the

sides

Federal spend¬

more

private spending.

more

re¬

chance

some

the

stock

A

re¬

of

appropriate and

contributed

total

j-

balance of

ceipts and expenditures, though it

expansion.

in a resulting decline
yields below high-grade
bond yields.

rates,

to
the

of the money supply is
consistent with the longer
growth of the economy. A

sharp ad¬

a

for

growth

face of the inflationary psychology
in financial markets, it was both

T" stimulate revival in aggregate ac-

j

value

in market levels of interest

vance

monetary

to

cyclical effectiveness.
]

f

make

forcing under prospective pros¬
perity conditions. In addition, pos¬

maintain

This

could

policy mutually rein¬

about inflation.

rise of stock

re¬

such

of fiscal action had much counter-

..

-

resisting the

Federal spending,
spending finds support
with public opinion, any resulting
deficit will need to be met by ad¬
ditional tax levies,
preferably in
if

national

The

receipts, compa¬
the rise experienced in the

Federal

Changed at¬
titudes and expectations were dra¬
matically reflected in the rapid

>

acute pressure in

community had shifted from

cern

in

Admittedly, in these circumstances
monetary policy would be under

,

*meas.-; ceipts

economic

concern

r.' spending increases resulting from
■■

fiscal

be

is that pressures for special spend¬

Federal

period

untoward

the deficit itself;

on

to

prospect, in
other words, would not be infla¬
tionary.

corporations and individuals can
expected to contribute to larger

activity rapidly
retracing ground lost during the
decline—psychology in the finan¬

Recent Economic Decline

li had

terms

of

ures

special responsibilities.

IvWere mutually reinforcing.

in

and

During recent economic contraci

phase

Economic
Recovery
and; tax receipts.
Shift, in Monetary Policy
With respect to the public inter¬
Towards Less Ease
\ v
■
est side, the national goal of highEconomic recovery after April level
employment with stable
a year ago took most observers by
prices furnishes compelling im¬
surprise, both in terms of timing; perative for action to hold down
summer—with

tion
between the Treasury
and
private spenders of borrowed
would be much intensified.

cial .markets.

flowers into
of economic

,

Ralph A. Young
their part of
the. load, monetary poiicy can be

IV% Monetary

rise -in

in, and extending

,

carry

from

funds

ment or monetary policy in fi¬
nancing the deficit through finan¬

recovery now

extended

than

were

presented to either debt

With respect to economic proc¬

an

ac¬

this

no.

Rapid

^Jadeq uately

its

If

be

^.fiscal policy—

■l out

resources

esses,if

.in

<

—particularly

,

economy would
unemployed resources, and
the public concern would properly
center more on the unemployed

have

nor adequate weight to
public interest in, and public
support for, a sensible
Federal
fiscal policy.

supply increased at a very rapid
rate by historical standards.
-

l'r."this goal. In>?;deed, if other
J^public policies

however, the

case,
a

through July when recovery was rable to
in full swing, the active money; recovery-expansion

inessential for

nfail to

debt.

processes

ac¬ •«;,

the

in

un¬

the

/>

of contraction

see

tive money supply and then a very expansion—which is not an un¬
brisk expansion. Beginning in Feb- i reasonable expectation—this very
fact will generate a substantial
ruary, before the economic revival •„

growth, without inflation;
Other

■

v

aggressiveness of these
was
quickly ' reflected

tions

prosperity and

>

reductions.

The

deficit

credit and monetary expansion.
To avoid the inflationary haz¬

and

myopic .perspective on
.the problem, ilt neither gives ade¬
quate weight to normal economic

lowering of reserve: require¬
ments, and by further discount
rate

Accordingly,

of

larger Federal spending, competi¬

sulting heavy demands for bank

This is

-

and

sustainable

alarm

avoided.

forecasting, is basically

eral

money re¬

quires

I I:

economic

with

be

conditions

avoidable continuation of deficit a judgment process. The
very best
financing. They further emphasize expert judgments in the Govern¬
the inconsistency between a defi¬ ment and in the
country are
cit posture of fiscal policy and a brought to bear
upon it.
Should
restraining posture of monetary the economy fail to expand and
policy. And they cannot see how increase tax receipts as rapidly as
monetary policy can do other than these experts have judged to be
eventually give way, befcoming in possible, the budget would obvi¬
fact an engine for monetizing Fed¬ ously not reach a balance. In this

>

v

of fiscal and monetary measures

•

:?x.

view the large recession-recovery

f

budget projection, de¬
spite all advances in the arts of

deficit

Board of Governors of the Federal Reserve

Reserve

^

-

to

are

under

11

WHITE, WELD&CO.

of

The Commercial and Financial Chronicle

.

.

Thursday, February 12, 1959

.

(768)

12

Benefit?

Who Would

Penetrating Effect of FederallyControlled Interest Rates
NELSON*

By WALTER C.
President, Mortgage Bankers

Association of America and

Minneapolis, Minn.

President, Eberhardt Company,

Mortgage banking spokesman
controlled

interest

banking industry.

dependent

rate

on

in

believe

deal

I

and

of us who

agree

money

mortgages, a

Guarantee

feeling of frus¬

major portion of the responsibility
for this change in administrative

tration
in

occurs

The Veterans Admin¬
istration, of course, intended to
give
the
veteran
preferential
treatment in the home loan mar¬
ket both from the standpoint of
interest rates and from the stand¬

search
factual

thinking.

any

for

data in an at¬

tempt to make
a

for the

case

other side.

point of protection from excessive
the FHA rate
prices.
In effect, the insurance
Walter C. Nelson
was not fixed
premium on the high percentage
VA loan was to be paid by the
at a price
*
which would not produce a par Veterans Administration, and the
market for the mortgages.
The veteran had a simple rate of 4%
additions
such
as
the
idea that the government should without
Historically,

rate on privately
financed mortgages is of
fairly
recent origin.
It had its begin¬

fix the interest

after World War II.
will recall, FHA started
in 1934, and the plan of the au¬
thors of the Act was to promote
home financing for a much larger

mutual

insurance pre¬

mortgage

Administra¬

The princi¬

of our citizens.

group

had

purchase of a home with a much
lower down payment and a small¬
monthly payment. Through the
medium of mortgage
insurance,
investors were expected to take
the risk of a high percentage loan

mand for long-term

and

longer

a

better flow of money
of capital surplus
of capital shortage.
In

going down for over a

1952

In

and

rates

terest

lack

a

of

de¬

funds.

1953, however, in¬

began

ward, and it
a

of

because

was

to

move

felt by

up¬

some

that

tect the veteran from the avarice

be"

that

developed

The "powers
the thought

value

without requiring

a

laws.

change
It cer¬

not expected or de¬
should dictate the
rate at which private in¬
should
be
expected to

terest rate lower ihan the market
rate.

was

sired that FHA
interest
vestors

It

\

as

properly fix that rate, and,
know, the FHA program
brought into the sphere

you

was

soon

make the loans in order to accom¬

of

plish these objectives.

terest

contrary, the original
administrators of FHA were care¬
the

determined that Congress

was

could

controlled

congressionally

More

rates.

in¬
of

recently,

another degree of control
has been added by placing a rate
ful to see to it that the interest ceiling on VA loans at Vz% less
rate they were required by law than the FHA loans.
set

insured mortgages was

on

safely above the market. In fact,
in order to make sure of market
acceptance, at the beginning, they

little by permitting an
charge of Vz% in

fudged

a

annual

service

addition

maximum

the

to

statu¬

tory interest rate.

on

The problem
and

gle is the contest between market
forces and

period, the inter¬

FHA

mortgages

re¬

the

the market.
from

It is

FHA

the

time

to

true, of

rate

in

taking

these

always followed
never

it

preceded

never

course,
reduced

time, and ultimate¬

ly the service charge
But

was

dropped

was

steps,

FHA

the market.
the

dictated

to

It

market, and
the

market.

address by Mr. Nelson before the
annual
Southwestern
Senior
Exec¬

♦An
4th

fixed

that
rate

For five years we

have

arguments
sound.

are

of

the

government sponsored mort¬

selling at something below
ranging from a discount of

gages
par

1%

consistently above what
generally the going rate in

that

political judgment. The

market is just not convinced

mained
was

that has developed
seemingly is an endless strug¬

seen

Following this example through¬
out the prewar

rate

course,

to

We

much

as
are

for

gress

action

in

as

prone

much

12%.

to

of

providing

blame
the
a

Con¬

delayed
workable

interest rate, but we are certainly

subject to their criticism for this

thinking.
tion

has

provide

The
had

a

FHA

Administra¬

ample authority

to

satisfactory interest rate

in line with market requirements.
It

is

only the

effort to continue

ica

and

the School of

Business

tration of Southern Methodist

Dallas, Texas, Jan. 27,

Adminis¬

to hold the FHA and VA rates at

University,

1959.




a

comparatively

ence

of

constant

differ¬

Vz% that has created

most serious problem.

pre¬

prob¬

the

our

the

People

not

do

interest

the

discount.

It

is

his

count

requirements placed

shirt"

be¬

in order to

the

rate

pay

to

provide

the

for

because

dis¬

on

him

borrower

of

/«'.

conclusion,

though a
long-term

of

unrealistic

an

actual

the money.; v
In

does

fallacy

a

new

housing starts as the builder ap¬
proaches each year with uncer¬
tainty
and
mental
trepidation.
Unless his financing has been ar¬
ranged well in advance of his
starting construction, he may well

rates

government is try¬

our

fluctuation that is created in

"lose

believe

un¬

practice of increasing
price of the older home to
provide a market for the sale of
secondary financing paper.
Last, but not least, is the great

benefit

level

market

This had led to the

the

let

me

flexible

al¬

say,

rate

tied

governments

to

may

be

present plan, I

eliminated

was

better than our

inclined

am

believe that the FHA

to

rate should

lifted to its maxi¬

be

mum

of

tical

purposes

6%, which for all prac¬
would provide a

free

rate.

for

the

brought

take

forces

long
be

to

into

play and the rate
adjust itself to the satis¬

would

faction

both

of

lenders.
forces

All

borrowers

and

plans of control

other

the

and

wouldn't

It

market

than

lender

the

tend

by

borrower

to

develop

excessively high rates by resorting practices which prove harmful to
to
secondary financing. This is our entire economy.

the

before

home-building industry had gone
into

complete collapse, and some
of marketability
re¬

From

semblance

turned by use of discounts and an

Washington

increase in the FHA and VA rates.

Ahead

The Mortgage Bankers Associa¬
tion, along with others, have tried
unsuccessfully to have a free or
fall

at

rate

free

or

This

rate.

we

raises

question of what can be done
to
provide flexibility and still
allow Congress or the Administra¬
tion to retain some degree of con¬
trol without limiting the market¬
ability of insured and guaranteed
loans to a dangerous point.
Based

Long-Term

on

our

far back in

Bill

own

to

the past as 1950

Clarke

the

on

yield

government bonds.

mise

between

suggested

those

groups

and the investors who must

a

neces¬

ment in the investment of trusteed

Any

plan such as this
would
certainly require careful
study to establish to some degree
of accuracy the differential neces¬
sary to provide a marketable FHA
interest
rate.
This
differential,

according

to studies which have
been made, indicates a spread of
2 to 2% points would have been
required in most recent years. '
One of

sup¬

VA

mortgages should command the
same
price.
Those of us
who
originate and sell governmentbacked

mortgages know that
many factors are introduced into
individual mortgages that make a
yield differential important to the
investor.
For example, many in¬
vestors vary the price on a loan,
depending on the down payment
and term of the mortgage. Again,
some

investors will look with less

favor

on

mortgage
than

a

property.

other factor
of

in

we

mortgages

the
as

a

East
par

where

pres¬

few areas in the
FHA
5%%
sell at

are

a

simply because the supply of

mortgage
mand.

have

funds

On
areas

the

exceeds
other

such

as

the

hand,

the

de¬
we

California,

Russians'

the

in

proposal

pull
State

d

a n

mans

is

sians to get out.

to
the
and

Administration can't either,

the

r,

Carlisle

Barfferon

ment. The hatred which the Poles

for

considera¬
what
would lose. Of course, that is

long-lived.
remember a trip I

I

serious

some

tion. It is difficult to see just

Russia

we

ago.

in West Ger¬
many. The Russians
say that if
we
refuse
to
agree
on
their
returning East Germany to the
Germans they will do it anyhow
and leave it to us to deal with the
East German
Government. That
could not be any worse; to all
assuming

stay

we

indications it would be better. For

East Germans

thing the

strong

as

are

the Russians.
phobia about

as

We seem to have a

with

dealing

East

the

Germans.

recognize them

don't want to

separate government. On two
now
our aviators
have

Russians

the

is

deep-

and

rooted

proposal

aid

our

have

Ger¬

deserves

well, and apparently
I
is a good invest¬

express very

the

owev e

The Russians did.
this

lot of critics in

a

country against our giving aid to
Poland. For reasons which I can't

a

think

East

man

have

We

time

of

make

a

Russia took

War.

effort.

as

over

Poland after the first World

over

-

just

waste

We

hold

country will come out

asserted herself and told the Rus¬

Russians

not

any

under the yoke.

from

made

several

Poland

and

Leaving Moscow at near mid¬
on
the
famous
Transexpress we came to the

Siberian
Polish

hour

day.

the

boarded

which

there

Half-way
guard

yards

100

was

one

miles

two

apart.

were

about

Russian soldier

a

looking at Poland. He wore a
bedraggled uniform and carried a
rifle which I am satisfied, would
have fallen to pieces if fired. Atop
Polish

tower

the

uniformed

captured. We let them remain in
jail for days and days
while
demanding that the Russians turn

at

Russia.

in

perfect condition. About

them loose.

customs.

There

is

not

the

from

troops

The

the Russians

lines

East

Ger¬

only justification of
being in Poland and

Hungary they
their

about removing

discussion

Russian
many.

something else that I
mentioned in any

seen

aver,

is to protect

communication.

of

Germany;
Poland
Hungary and Czechoslovakia
guard their lines of communica¬

They

East

occupy

further

we

It

different.

so

darkness

into

what

will

their

East Germany
excuse

be

to

fully

about

of

express

all

12

the

Nevertheless,

as

we

swept through the Polish country¬
side
there
were
perfectly kept

was

up

an

mile

Polish
a

such distance conditions should be

homes. It

they give

train

was

to Paris. The dining car was
perfect, the accomodations were
perfect. It was amazing that in

farms,

If

up

to be
a

way

therefore they must occupy

tions.

nattily
looking

the

to

came

was

a

rifle seemed

Drawn

Pullmanned
cars.

was

soldier

Polish
His

and
to

an
we

train

three

moved

No Man's Land.

across

towers

Atop

Russian

same

then

a

the

noon

After about
the Russian customs,

at

over

about

border

following

landed in East Germany and were

have

to

years

night

occasions

of

not

Hungary,
relaxation

that

with

deal

one

ever

Communist

the

does

about

utterly

impossible

H

writer

anything

They did not hold her for
long.
Poland
relatively quickly

a

is

is

the

This

countries?

Poland that

out. The
Depart-

countries.

other

possible that they intend to
give up their occupation of these

of

to

t

these

it

Is

but if there is

Ger¬

the

in

remain

know

East

any

supply
factor

establishing the price. At

ent, there

older

almost

have

acting

an

on

More

intransigent

be

Germany over

the fallacies of this ap¬

proach, however, lies in the
position that all FHA and

ap¬

of

turn

to

in

sarily exercise their prudent judg¬
funds.

Department would

to

pear

matter

it

flexible sell-executing formula
based

easily understandable why

State

titude

Yields
As

is

It
our

ment's

Formula

the News

By CARLISLE BARGERON

Last

loans.

FHA

on

annual convention

our

flexible

utives

Conference,
co-sponsored
by
Mortgage Bankers Association of Amer¬

I

ing to protect.
The home-purchaser

government that opposed the com¬
plete elimination of a ceiling rate
on government-backed mortgages

in the various state

all,

controlled

low

but also that it could be at an in¬

investor that he would

an

undesirable

Benefit

of

people that

legally

could

investors
a

est

that

to

by

vehicle

a

was

that the VA feature was so valu¬
able to

or

should

I

Not

First

higher percentage loan to

which

to

Fortunately,

period of time.

a

this

plan had to be evolved to pro¬

of the money lenders.

adjusting by

discounts

obviously

Does

interesting proposal and certainly
provides some basis for compro¬

it

make

On

the

not
only be willing to lend a
higher percentage for a longer
term than had been customary,

areas

addition,

tainly

decade

need

small

summarize,
however, by pointing out some of

it

a

the

those

to

been

will

that

believe

I

of long-term
This is a very

provide
from

maturity. The au¬
the Act to

expected

also

thors

for

control of discounts

a

the

4%

proper

pal factor, as far as the borrower
was
concerned, was to permit

er

held under

to establish 4% as a
fair rate on the VA loan at the
time it was started. Interest rates
was

a

not

do

-

resentatives extol the virtues of a

being,

sellers

desirable

miums.

heard two of the government rep¬

into

was

came

discount.

may

longer term funds from other believe that the home
builder
borrowers abated, and FHA and doesn't increase his
price in an
VA rates were again attractive effort to offset discounts he must
to the market with the result that
pay to secure the financing. Also,
we had a large increase in private
the
original
purchaser
of
the
housing starts—namely 1,300,000 property pays all of the rate dif¬
starts in 1955.
In 1956 and 1957, ferential based on the
anticipated
interest rates stiffened and FHA life of the loan. By an aajustect
and VA rates were held constant interest
rate, moving with market
in spite of their obvious failure
requirements, he pays the higher
to meet market requirements. It rate
only during the period of
wasn't enough that we had fixed actual
ownership.
interest
rates, but insured and
It is not possible to estimate the
guaranteed mortgages were also buyers who are required to pay

rate

tion

If

you

conven¬

generally the going rate for
home mortgages, and certainly it

ning shortly

because

have

we

for

flexible

mium,
When the Veterans

was ac¬

During 1954 and 1955, demand

must take a

Program

under

just

at

starts.

tional

Loan

Veterans

constant,

700,000. The fluctuation
tually less than 1% on

generally

can

we

the

that

all cash arrangements remained

almost

market levels?

for those

market

interest rates, we

free

or

of

use

During the same period, the num¬
of starts under conventional

Just when and how did we get
objectively, it seems to me that
we
must try to understand
the sidetracked from these original
reasoning of the proponents of philosophies, and what have been
the reasons for the continuance
fixed interest
of this fixed interest rate below
rates. I know
that

tions

ber
or

Fixity Continued?

Why Is

activity (in terms of

although

probably will always have varia¬

40%, and the number of new
lems that we seem to develop un¬
starts under those pro¬
der
our
present systems and
grams fell from a high of 700,000
suggest some of the cures.
in 1950 to a low of 400,000 in 1953.

bonds.

the yield of long-term government

discuss this subject

are to

we

of

1953, the combined volume

words,

flexible

housing

and reviews other undesirable

especially true in the used house

I should

point out some of the other
penetrating effects of Federallycontrolled interest rates.
As interest rates rose from 1951
like to

fell

problems created.
The banker pleads for the lifting of FHA rate to its maximum
of 6% which would provide for all practical purposes a free
rate, and suggests a study be made of flexible FHA interest
If

Texas, and Florida where popula¬
tion growth creates an excessive

the benefit of the lender.

mortgages insured or guaranteed)

proponents' belief that fixed interest rates
benefit those whom the Government is trying to protect; points
out the home-builder increases his price to offset discounts he
pay;

feeling on the

a

demand for mortgage money as understand
and
are
frequently
flexible
compared to the supply. In other unwilling to
pay
the
required
only for

FHA and VA

Mr. Nelson rebuts

must

be

part of some that a more
rate in a rising market is

to

describes the effect of Federally-

in the mortgage

rates

There may

I

well

will

Poles

if

lay

they

painted

barns

like coming

t,he daylight.
my

ever

money

get

a

and

out the
,

on

the

chance.

Volume

189

Number

5820$,.

.

The Commercial and Financial Chronicle

troit,

Setting the Record Straight

this

overriding goal of self-suf¬
ficiency. Let me remind you that
once
the
Soviet planners
com¬
pleted their procurement program
from the West in the early '30s,

Mr. Dillon declares

insincere.

trade with

"the only thing the Soviet needs to do if it really wishes to

the outside world fell

off

drastically.
:
r Since
then, their trade with the *
United States has never regained
a comparable level—except during

is,.quite simply, to begin trading."

us

be

paid for by their exports, Soviet exports to the U. S. for we
willing have
solidly
established
trade
accept long-term credits from,; patterns for the purchase of these
the United States. This suggestion items in large part-from the less
was presented to me as an abso¬
developed countries.
*
•
lute
Now Mr; Mikoyan has repeat¬
pre-condition 'to increased
trade during my talks with Mr.
edly stated that the United States
Government does not wish to see

Mikoyan.

the

Mr, Dillon says he was the only U. S. official who discussed
trade in detail with Mr. Mikoyan in explaining why Soviet over-

expand its trade with

not

the Soviet Union would be

must
recognize
another,
equally historic fact: to Soviet
planners, /trade
with the free
world is always subordinated to

State for Economic Affairs

are

recognized

Soviet's Goal of Autarchy

Washington, D. C.

increasing trade

publicly

We

By HON. C. DOUGLAS DILLON *

tares for

have

historic fact.

to

About Soviet Trade Desires
Under Secretary of

The
do

Soviet

leaders

wish

not

resources

to

apparently

divert

sufficient

•

interest

world
I

In

attempting to find the an¬
swers to these questions we should
keep in mind the basic nature of
the Soviet system:

would

like

to examine the
hard

of

realities

Soviet for¬

eign economic
policies—both
with

the

in¬

dustrialized

in

you go basis. Hence, Premier
Khrushchev in his letter, and Mr.

purchasing from the West stems
the

from

new

Seven

Plan

Year

with

trade

United States..

Today,

as

the

Sets the
Let

us

the

on

Record

Straight

the facts

look at

—

at

what actually occurred during Mr.

Mikoyan's

-

talks

United

States

matter

I

on,

with

trade

officials.

On

this

speak with some
I was the only U. S.

can

authority,

as

official with whom Mr.

Mikoyan

discussed trade, problems in detail.
First of all, to set the record

straight, Mr. Mikoyan was assured
by ever official with whom he
spoke,
from the: President on
down, that the United States now,
as always, favors an* expansion of
peaceful trade between our two
countries.
But

then, Soviet exports

we

pointed out that trade is
of mutually advanta¬

result

the

consist

USSR.

,

as

starvation.

in

affairs.

increased

He puts: the entire; blame for the

exports to acquire. present low level of trade

into

the large volume of capital equip¬
ment which they desire, on a, pay

Mikoyan during his -visit have/ in
The former investment banker: (1) compares U.S.S.R. and
effect, invited us to help-finance
the continuing rapid: expansion of
; U.S.A. avowals and deeds; (2) suggests what U.S.S.R. can
World War II and the immediate Soviet
industry.
' ^
;
do to create greater business confidence; (3) queries low level
postwar years, when, as you will
Now, goods purchased by a
of Soviet's exports to Free World and determined drive to
recall, this country shipped some; country must be paid for either
$11 billion worth of lend-lease
by its own exports or by obtaining
capture Asian, African and Latin American economies by trade
and UNRRA goods to the Soviet
foreign credits. In the Thirties,
and aid techniques; and (4) outlines what we should do to
Union.
the Communists procured foreign
assist newly-emerging areas.
From the public statements of
capital equipment by exporting
Messrs. Khrushchev and Mikoyan,
grain at prices below an already
Recently, the foreign economic them with an excuse for refusing it would appear that they now de¬
depressed world market-rdespite
policies of the Soviet Union have to include the Soviet consumer sire to
repeat the pattern of the the fact that millions of Russian
become
a
matter
of
increasing in the benefits of their expanding '30s. There is good reason to be¬ and Ukranian
peasants were dying
importance to all of us who have industrial growth?
lieve that their renewed interest of
an

13

(769)

mainly of raw and semi¬
being unveiled. We finished materials, sold in bulk. geous agreements between willing
can anticipate that this plan Will
Thus, because of its economic sys¬ buyers and willing sellers: v;: -;
In this country, the conduct of
be a major topic during the 21st.
tem, the world's second largest
Describes Basic Nature of <
1 Congress of the Communist Party. industrial nation has, in its deal¬ our commerce is in- the hands of
Soviet System
This plan has been heralded by
ings with the Western World, a private firms and private indi¬
the Soviet leaders as a major step
viduals.
*
V
A nation's
commodity
export
pattern
not
foreign policy, in¬
The
Soviet
state'. trading
toward
the
accomplishment
of unlike
that
of
many
under¬
cluding its economic component
their announced goal of overtak¬
monopoly is at liberty under our
reflects its domestic policies and
developed countries, c
/
surpassing " the United
To such traditional exports as laws to enter our free market "and
institutions. The Soviet Union, as ing h arid
to buy and? to sell. Its American
States—a goal? we could consider wood
products and manganese,
you know, is a totalitarian dic¬
a welcome challenge if the Soviet
theys have recently added tin, outpost, AMTORG, is established
tatorship, firmly ruled by a small
in New York and has wide com¬
elite
in
the
Communist
Party, people, rather than Communist aluminum., oil and oil products.
*
its pri¬ Because of price cutting tactics, so mercial contacts.
which
is
dedicated
to
eventual world ambitions, were
There is only one restraint on
mary intended beneficiaries.
Communist
world
typical of a state trading monop¬
which is now

.

West and with

<

the

newly-de¬
veloping areas
of Asia, Africa
and

Latin

America—and
then

C.

outline

our

govern-

ment's

Douglas Dillon

■

position

regarding

trade

with the Soviet Union. I shall also

briefly touch

trade
and financial programs aimed at
helping the newly-emerging coun¬
tries

.

progress

freedom.

We

of

some

our

industrial

major

and financial centers.

tour and

His private

meetings with American

business groups had, among other
purposes, the airing of the
of greater trade with the

theme
United
This campaign began with

States.

Soviet Premier Khrushchev's let¬
to

President

June.

In that

call,
posed

Eisenhower

you will re¬
Khrushchev
pro¬

significant

a

last

letter,

Premier

expansion

of

United States-Soviet trade, claim¬

ing

it

could

amount

billion dollars
eral

"several

to

the

over

next

sev¬

years."

President

Eisenhower

an

in

peaceful trade, that
way was open for the Soviets
expand their trade with the

the

to

United

States

if

they

so

desired,

and

that the Department of State

was

prepared to discuss the matter

further

them.

with

What

happened next?

The
a

Soviets promptly initiated
series
of
aggressive actions

against the free world which in¬
evitably resulted in a marked

heightening
to

the

of tensions.

Soviet

tions in

means

control

of produc¬

the

of

labor

force, and domination of the right
individuals

of

decisions
nomic

to

economic

make

by centralizing all eco¬

in the hands of the

power

I

refer

Government's

fhe Lebanon

As

part of Com¬
the Soviet leaders
manipulate their economy to at¬
tain maximum growth of heavy
industry under forced draft. Their
objective is starkly simple: the

crisis, in the Taiwan Straits crisis,
recently, in Berlin.
This, then, is the inauspicious
setting against which we must

military world
method

is

investment

the

concentration

the
in

heavy industry

first

moves

after

the

increase in trade with the

United

States

limitations

are

of

To

assist

was

monopoly

"leap

forward."

in

carrying out their
ambitious plans, the Soviet leaders
are one again counting on appeals
to the profit motive inherent in
our free enterprise system to en¬
able them to obtain
of advanced
ment—and
Soviet

a

large stock

technology and equip¬

primarily

Pre-condition

on

to

credit.
Chemical

Trade
Premier

made

goods have thus
sparingly outside

the bloc, and mainly in politically
trade
with
selected

motivated

in

countries

target

the

less

de¬

veloped areas of the free world.
However,
with
the
growth
of
Soviet

industrial

this,

capacity,

component of their exports to the
free world
may be
expected to
increase.

Khrushchev

this

and

Manufactured
far been offered

himself

materials, where it will pose a
continuing threat of market dis¬
ruption which would adversely

"the creation of plans and master¬

affect the economies of our normal

ing the production of new types,
equipment." Then, in his let¬
ter to President Eisenhower, he
pointed out that since the mate¬
rials desired by the Soviets could

trading partners in the less de¬
veloped areas of the free world.
This
concentration
of
Soviet

abundantly

clear:

he stated that it would
"expedient" to purchase plant
and equipment for the chemical
industry
from
the
"capitalist"

of

culate

in

advance

that

to

sions

will fail—and

secure

their

one-sided

ef¬

conces¬

thus provide

♦An address by Mr. Dillon before the
Mississippi Valley World Trade Council,
Orleans, La., Jan. 27, 1959.

New




free

our

world

to

We

have

only

recently

exercise

full

control

over

the

to

turn

trade

off

and

on

and

to

ject
As

a

to export licensing control.
result, the list of goods which

the United States will not license

export to the Soviet bloc has
significantly pared down.
Actually, only about 10% of all
our
products moving in inter¬
national commerce are subject to

Soviet export

in

the

in

exports
materials

the

also

drive will

field

field

worked

of

con¬

basic

of

basic

to

limit

been

embargo.
In this

connection, I understand
was in Detroit, Mr.
Mikoyan complained of our sys¬
tem of export controls. He said in
effect that only such items
as
chewing gum, firewood, and laxaContinued on page 29
that while he

All these Shares

having been sold, this announcement
as a

matter

appears

of record only.
FEBRUARY 6, 1959

NEW ISSUE

100,000 Shares

,,

shift its direction to suit the Com¬
munist

strategy

of

the

moment.

From the very beginning of the
Soviet industrialization drive, for¬

Wenwood

Organizations Inc.
Common Stock

(Par Value 25<f>

Price

per

Share)

$3 Per Share

abled the Soviet Union to launch
new

industries at levels of devel¬

Thus, by tapping the advanced
technology of the West, the Soviet
Union was able to gain years in
terms of economic development.
Soviet leaders, including Mr. Mi¬
koyan on his recent visit to De¬

com¬

our second major revision
of the list of strategic goods sub¬

pleted

state

domestic economy.
This absolute
state monopoly also permits them

countries

security is linked.

over

a

cannot

Therefore, such items? are em¬
bargoed for export to the Soviet
bloc.
'
v -/■ '
' .!
\

own

forts

other

with whom

Bolshevik

foreign trade. In¬
herent in the type of economy
they were creating was the need
to deliberately isolate the Soviet
economy
from
world
market
forces and allow Soviet planners

We

for

Nevertheless,
there
is
every
indication that the main thrust of

countries to avoid wasting time on

cjreation—really desire opment which had taken the West
to
expand
commerce
with the years to achieve through costly
United States?
Or do they cal¬ research and development.
their

major industrial

activities.

proven

the

leaders'

to establish

revolution

be

the

in

already

tinue

Soviet theory,

Communist

the

to

have

be

Now, what role r does foreign
play in the Soviet scheme
of things?

keeping with

continue

will

sales

these

World

Last May,

eign trade was bent to the task
of importing heavy machinery
and equipment incorporating the
latest technological advanees de¬
measure the Soviet leaders' seri¬
Im¬
ousness of purpose in
their talk veloped in other countries.
of consumer goods were
of expanded trade with the United ports
virtually eliminated in favor of
States.
What lies behind the talk?
Do basic industrial equipment. Dur¬
the Soviet leaders—who are well ing the early '30s, these imports
aware
that the chief limitations of the means of production en¬
an

consumer

AMTORG's

Western
be expected, as a country or as
in¬
a
people, to provide the Soviet
jurious to such traditional Free
Union with the sinews of war
World
exporters as
Bolivia,
while its policies menace our own
Malaya, Indonesia and Canada.
oly,

at

trade

of

plan

has

of the Soviet con¬
sumer.
Thus, they subordinate
the economic well-being of the
individual to the rigid demands
of overall state planning.

In

know of the

of

expense

one

we

far, it appears that the Soviet

short-changed in favor of another

Their

supremacy.

and most

to

From what
so

achievement of both economic and

ac¬

and Jordan

integral

an

munist strategy,

replied

that the United States favored

increase

state

state.

all, of course, aware
well-publicized
visit of
Deputy Premier Mikoyan

Soviet

ter

of land and the

tion,

are

the

to

material

achieve

under

of

upon our own

domination.

Economically, the Soviet Union is
characterized by state ownership

MICHAEL G. KLETZ & CO.
Incorporated

«

The Commercial and Financial Chronicle

(770); 1

sleep

Electricity in Our Future
life has only been the be¬
ginning Mr. Drumm insists in providing an insight as to what
lies ahead in 1979—marking a century of utility service. The
industrialist envisions 29,000 kwh. of electricity per employed
person, compared to 3,000 kwh. in 1930 and 10,800 kwh. in
1957; and such industrial-commercial usages as: electronically
controlled flying vehicles and guided cars, revival of electricdriven cars, fully automatic industrial processes, and countless
on our

capital with

new

•

Let
the
be

100

old,

years

what

,on

utility

be before

mav

\wy-K-,?->#»

fea¬

new

be

by

the

Thus

in

this

electric utility

hence. f

and

granted
tend

to

look

engine
L.

S.

fact

Drumm

take

electricity is still a
developing art. So let's

quick look at what has
place in the fast 00 years,,

a

taken
to

show

how

direction

fast

the

The

ing.
this

electric

live

was

*An
in

2nd

New

address
York

it

Mr.

Power

City,

we

about

and had

for

long

a

appreciable
Drumm

Progress

Feb.

total

5,

before

Dinner

1959.

has

revolutionized

industrial processes, and has cre¬
ated
new
fields
of
endeavor

hitherto unknown.
millions

of

It has released

from backbreak-

men

being

May

many , of
her most
burdensome tasks. It is the house¬

hold and business servant of today

(3) No
is

no

the

Country.

to

them

the

for

information

when

year

on

planning

purchases for their portfolios.

future is the number of people

are

Bureau

there

will

country,

arranged

This list

is

revised

be 267

In

of

ours.
than 10

by firm

States

and

Cities,

names.

all

are

have

them.

to

you

the

most

house¬

electricity.

',f, ;/.

is

what
our

lies

ahead

labor force.

as

to

list

charge
(United

for addressing
States

approximately

or

9,000

envelopes

Canada)
names

for

is $7.00

in ' United

the

per

complete

thousand—

States,

900

17 million in the labor force

110

by 1979 it should total about
million, which would be about

41%

of

the

population

at

that

time.
•>

output

of

the

labor

force

also increased over
the years.
Part of this increased
output is the result of the steady
course,

t'

We

can

also

supply the list

•mall additional

on

gummed roll

labels

greater output has resulted from
the increasingly better tools used

by the workers.

at

a

charge.

of

tools

is

Back in 1930 the

ity

HERBERT D. SEIBERT &
CO., INC.
25 Park Place




REctor 2-9570

New York 7

have

we

highway

collision

while the

and

only

on

will

and

automatic

features

tion

sive
a

requirements

per

of

little

a

employed

use

of electric¬

exclu¬
agricultural workers, was
over

These

3000

person,

kilowatt-hours

be

urban

a

filtration

proc-

/

era

biggest

goes

on,

home.

,4

will

changes

p

..

Things in the Home
have

we

hardly

/

begun
some

we

can

llvngs

new

that

'J

to

are

the

of/

Climate control will

in

sal

all

spread

re¬

the older
sell

to

,

univer-".♦>

houses, and wide¬

new

in

hard

be

■

/

ex-

pect to find in the homes of 1979.

It

ones.

will

!<*

house that does

a

not have it.

Push
dows

button

and

of win»H*

operation
will

doors

be

found in

homes.
v/,;
Luminescent lighting from walls p.
and ceilings will be common.
New
cleaning
machines
will inew

many

cars.
cars

wash,

cars,

rinse

floor in

to

will

ment

will

iron

and

pick

fold

and

Dusting
be

kitchen ;

a

a

}

the

i

laundry equip¬

sort,

up,

so

will

dry

minutes.

automatic

New

clean, '

wash.

electrostatic wand
welcome improvement
by

for the housewife.

.
.

While the battery is still a limi¬

Electronic

further advances in the
storage battery field seem certain.
When
they come, the range of
electric autos will be increased,
tation,

and

may
permit their use
cross-country travel.

is

the

air

live electrically. Here

be greatly re¬
will the air pollu¬
tion that now takes an unknown,
but heavy, toll of health.

each worker will be

times

easy

City noise

ment

three

and

duced, and

1979, it is expected to reach 29,000
kwh per year.
In other words,
using almost
electricity used

New

will be
drive, and
maintenance wili be negligible.
simple

with

electrical

the

But

city and sub¬
They will cost less to

use.

the

in

be

for

operate than existing

for

year.

ideal

mass

.

In this

electric-driven

new

a

and

\ As

utilities will supply the elec¬

will

near

perhaps the

charged, usually at night, by plug¬
ging the charger provided into a

tricity to operate these

.

,

hos¬

of

equipment providing P
100%
protection
against radio¬
active narticles will be in use.
•: -)

of

be

gloves, -hy-p,.

production
electronic /
the patient will solve
«

on

Improved'

mile¬

many

:'}

the major discomforts of
hospital stay—lukewarm or cold

be

In 1957 it was about
10,800 kilowatt-hours per year. By

per

for

find

meals.

Other
Electric

Batteries will

will

processing

together

esses

the

Walls V

of

one

are

their needs.

way

incinerators

food

ovens

ordering them. They
that their range of more than

age

accomplished by ad-; t
dial. As a result, bed,1!*

a

basis

-

above

so

tempera¬

be

can

pital

Cars

has about ready for market.

is well

equipped

"disposables"—linen,

:

miles

be

changes in

podermic needles and dishes.

-

70

will

rooms

Electric

available

way.

ele-.?u;
' - p 75

increasing application in hospitals,;^
to dispose of the great array
of/*/

most

Moreover, the motive power of
of these cars will be elec¬
tricity.'. As you may recall, elect r i c
driven cars were quite
popular in the early days of the

the

essential

become

^

the-

J.

many

oh

-

con-;

color

and

covering will be minimal.

the most expensive cars,
others that do not exist

are

P

pa--1

.

Centralized

makes

her

will be wired for color changes to'.
effect
color
therapy and music j
will be keyed to the color changes./.

some

r

of

electronic

control

desired

justing

over-speeding,

Electric-Driven

her

ture, humidity and electric ioniza¬

of

now

observe

.

The

be:

andlife

point

condition

will

that

hardly

contain

to

beds.v

will

TV screen; study and'

remote

.

without

merits of hospitalization.

today.

find

the

by

rapy

drivers play games and
cars will be air-con¬

ditioned,

f

patients/ ^

future

central

a

on a

Climate

These

chat.

-

the

most important of
electricity. It does
physical work faster, better and
more
cheaply than ever before,
and, through electromation, it is
entering the supervisional field. • •:

these

able

be

trol.

tomorrow,
cars
will roll along guided
and
controlled
electronically — safe
from

at

record

examples

conventional house outlet.

The

One

in

Canada.

the

There, utilities

force; but the biggest part of the
Our

indicate

'

proce-

their

from

the

of

will

processes

other

them

nurse

charges

our

some

hospital

building

the

stationed

being.
Invention
have
always - been

there
million house-,
automobile:
1979,

expansion in the size of the labor

up-to-the-minute service available.

The

begun to live electrically.

there

1879

51 million, and
electricity avail¬
By

removing

by

country, and
we are sure they will continue to
be in the years to come.
are

of

transpor-/J/

throughout

into

characteristic of

-*

extensive. An over-;
monorail type of

tients

change

On

Automation

head

applica¬
many addi¬

and

top5

brain.

tation will permit moving

furnace

to

attached

dures will, be

types of structures.

inventions

Here

-

f1

endings that go directly to

.

made

and

structure

the

Because
of
improvements
in
All these additional people, with-,
materials, storage batteries and
their higher standard of living,
manufacturing "know-how" and
will require
vastly more goods because of the
special transporta¬
and
services
than we currently
; tion needs
they can fulfill, elec¬
use.
So the probable size of the
tric cars are now coming back.
work force, and the productivity*
Here is an electric-driven passen¬
of its members, is of prime impor-,,
ger car which one manufacturer

has, of

continuously and offers

it

this

in

million
had

none

the

at

1879.
Today the labor force
has increased to about 75 million,

banking and brokerage firm in the

disperse

metal,

extend

come

and

plus

look

households

of

and

a

in

Addressograph Department

alphabetically by

and within the Cities

177 million.
The
expects that by

take

us

there

and
our

To¬

realized.

are

let

less

were

SERVICE
for every investment

people.

it

the

tance.

ARRIlESSOI»KAI*H

metal 3tencil in

I87S

million, if
the maximum fertility rates now

the size of

a

In

to .serve.

there

Here

We have

Projections

prime consideration in the
utility industry's planning for the

should be about 75

throughout

will

■:

holds in these United States.

Investors look

company

New

be

bone

fields.

tional

:;<f: A

1979

pulp,

and

electric

which

Census

the

teristic of all

will

will

nerve

will debark logs,

waves

wobd

New

devices

hearing

enable even stone-deaf peopie to hear by means of tiny in- -s;
duction
coils
implanted in tfje ^

purify the refuse.

tions

;>•"'J:

.

developed. Electronic engineering

electric processes, will be charac¬

,>

country

our

Population—Housing

able

the

that

and

nearly

your

enterprise

along the road that
has brought us prosperity and a
standard of living that is the envy

holds

of

pri¬

the

hope of our
these assumptions

that

Today

Investment houses

and

-V.

to

now

may

homogenize

both

continue

day

and

revolutionary
industrial
will be commonplace in
industries.
For example,

many

is

.

New

to

error.

New

■.

-

another field,
hospital care and medicine will
be
improved by new electronic ;**
developments. Here are some r6f
the possibilities.
v/.vV .
)v
Turning

processes

earnest

correct

country

ANNUAL report to the

-

here

future,

Edina, Minn.

Widespread pipeline transporta¬

inflation.

runaway

industry,

were

your

20

know it. i'-i-

we now

as

number

Reports

of

vate property and free

It

pilot

collision

^
r/

the Southdale Shopping Center at

by

continuation

A

Now

Annual

come

No catastrophic war.

system

will

-

of

risk

the

in

like

look

our look into
will be operated and
stating three as¬ controlled by electronic comput¬
which our fore-' ers. based.
Preformed
structural
They are:
shapes,

are

(2)

are

eliminate

.

suburban

idea of what these centers will

an

;

electronically, controlled

^

automobile

and

urban

on

shopping centers are springing up everywhere, and we can
expect this trend to continue. For

Flying vehicles will be almost
100%

choking effects

increasing

-

areas,

upon

nation had 49 million

from

requiring

traffic

and

\

the; ultrasonic

next

efficiency

ever

the

of

Because

of

Fully automatic operations will
be standard and they will be di¬
rected by punched cards and
tapes. '

preface

we

future

(1)

worker

a

of electricity

cial field is in shopping centers.

changes

tion systems

wife

—

these

Fully air-conditioned buildings
will be practically universal fol¬

,

envisioned

Mail

the

during

'

sumptions
casts

that will

things

ing toil, and has freed the house¬

cheap in cost

what

like.

be

improve- :;y
heartily >:i

an

us can

example of expanding
in the commer-

Another
use

list

This

will

to

without

1959

will, have

—

electricity?

■

of the whole world.

requirements.

energy

Electricity

which

an

by step, has reduced muscle power
to an insignificant proportion of
our

of energy

by

Annual

muscle

reduced

that

and permitted the start of
industrialization,
and
the
im¬
provement of urban living.
The
introduction of electricity accel¬
erated industrialization and, step

"

known

with

time before it had

the

been

slow in dawn¬

had

form

experimented

which

in

has

in

age

very

Scientists
now

and

industry
•'■-"v."';

developing.
now

into
years.

power

of

rapidly

of

the first mechanical

were

devices

that the utili¬
zation

power,

The water wheel and the steam

and

over¬

the

Muscle

of

year

wonderful

needs of a rural economy.

ergy

take it for

tive

beasts, supplied the en¬

and

men

agricul¬

we were an

nation.

tural

abundant that
we

public utili¬
light a few of our
use of
arc lamps.
year
of 1959 the
industry is 80 years

''answers"

the

for

better living and higher produc¬
tivity (the two [2] largest actually
spend 6%).
In 1979, we may be having a
press conference to mark the com¬
pletion of a century of utility
service, and we have an idea that
those participating in it may have
difficulty in visualizing what it
was like way back in the primi¬

the

Originally,

so common¬

place

patent,

lamp

old.

Electricity
is

began to

cities

industry
years

way,

incandescent

ties

by the
20

served

in

development
the electric industry was rapid.
1879, Edison applied for his
under

Once

In

daily existence. Its

and the first electric

able to the

to

on our

major practical use was
communications field.

first

avail¬

people

the

of

'

provements
tures

impact
first

in the

us

of im¬

way
and

industry will
and speculate

3%

spend

tries, homes, etc. '

look ahead to 1979, when

us

electric

of

uses

sales dollar while the > improve
industry
manufacturers health,..

electric

It's

all of

endorse.

developments con¬
changes will there

what

illustrates

the

only

are

event that is some¬
sleep at a cri¬

daily

a

ment which

the industrial and commer-'

their gross

capacity requiring
much larger sum to indus-

a

advances

Changes

beginning. The electrical era has factories and commercial enter¬
just begun. One indication of this prises. It will be difficult, if not
is the fact that expenditures for Impossible, to get workers, or cus¬
research and development by all tomers,
otherwise.
In
addition,
climate
control
manufactureres
will
average
1%
of first-class

will entail four-fold increase in generating

$150 billion of

Possible

■.

States.

United

these

in

these

But

predicts this

additions to tomorrow's electric home. Mr. Drumm

cial

of its existence the industry
revolutionized our very way

life

of

from

of

results

As electrical

be in

years

has

the

times disastrous to

Details

tinue

Through the contributions the
industry
has
made
to
better living during the first 80

electric

Electricity's revolufionalism

multiply

1950

Thursday, February 12,

.

tical time of day.

/•/://-/.>

Only the Beginning:

*

;

to

his efforts.

'

Company, Greensburg, Pa.

President, West Penn Power

"< V:, ,;"; \.yv/_,o

night.

By S. L. DRUMM*

today

rest periods, and always
on instant call, day and

or

available

.

.

Another
in

new

the

electric

electric

reduces

to

a

delivery truck

whisper

of

even

,

field

the

a

five

minutes or less
by the push

to table

button.

Greatly

.

;

.

television

improved

equipment will give better recep-,
tion and greater conveniences, in¬
cluding shopping by TV.
..
:

is

This

that
noise

only

from freezer

develop¬

automotive

called the "silent milkman."
an

widespread

taking

cooking
will
be
with complete meals

With respect to climate
"

here

is

a

new

type

of

control,

structure

.

vV

4

Volume

189

Number

5820

.

The Commercial and Financial Chronicle

.

.

(771)

which has just been built to house
the swimming pool at the Shelburne

is

Hotel

huge

a

in

Atlantic

bubble-like

cash

City. It
enclosure

Public U

tilitySecurities

made of

plastic—shaped and sup¬
entirely by air pressure
by fans. It is located right
the ice skating rink and

ported
created

next

to

is heated

have

Arizona

ten

,

In 1979

will

you

bubbles; they

such

see many

tal

of

Public

Service

Arizona's

14

serves--Two v major 'generating- units are
arid ^ the Phoenix plant with a capacity

counties

about 40,000 square

covers

miles; .of 145,000 kw'. and the Saguaro

.

household had central-station

Bureau

In 1939, 20 years

average

use

itself

kwh.

Today it is about 3,600 kwh.
.1979, 20 years from now, it is
expected that the average use will
In

-nnnn

U

.

2?

•^'

.

T.

lor

average

use

a

using

amounts

year.

PALM

as

the postwar

and

large-scale

$77

This

is

considerably more
output by the
utility industry : for all

than today's entire

electric

9

(2,939,000 shares)—

46

28.3

$163

100.0

;

-Totals:

:
'

The
sound

company

appears

18.8

5.6

,

to be in

position from a regulatory
point of view, rate of return on
year-end net plant having aver¬
aged below 6% for some years.
'

Share earnings include the fol¬

lowing

approximate

amounts

of

.

tax savings

resulting from the use
of Accelerated
depreciation, which
savings were allowed to "flow
through" to net:

ex-

power

$0.04

period . load

What will this increased

Crops and live-

under

of

use

•

electricity in homes, farms, stores,
and industries mean to the utility
industry?
>/;
'

tfons

-

.

Four Times More
>

spite

or
of

the
me

1957)

12

tim.el.?f .the'.Sault

ereat

"

;

eecause
Because

in

the

-In

months

ended March

31,: 1958 '.about 42% of electric

t„

An

increased popu-

lation and the increased per capita
:a,

rate

'1ft„

•

1957 the state was tost in
of bank deposit giowth,

ANGELES, Calif.—Thomas
Moore," Walter E. Peter and

Thomas Sidenberg have joined the
staff of William R. Staats & Co.,

22% from

640 South Spring Street, members
of
the New York
and
Pacific

Eiver Project Agricul-

Coast Stock Exchanges. Mr. Moore

ture Improvement & Power Disn% {rom the Arjzona Power

trlct

Juat

Vice-President for the
states, with
head¬
226 Chilean Avenue.
Mr. Just was formerly Execu¬

southeastern

quarters

at

Vice-President

of

Television

Management Corporation.

LOS
E.

A.

0.21:

(Special to The Financial Chronicle)

expiring 1968.

1st" bu^ness" wafted ttoesTs "rolLer) £ follow!:

Generating

k.Capacity

^mpper condlalmostPdoubled in

unfaTOrable

COntract

a

Paul

regional

tive

0.11

1956

.

has

times that of 1947.

purposes.

"

47.3

31

Conv. $2.40 pfd. stock
Common stock equity

Earl F. Berry

Joins

Eastman Dillon Go.
.

(Special to The Financial Chronicle)

•

LOS ANGELES,

,

hours.

BEACH, Fla. —Paul A.
joined Hugh W. Long
Company
Incorporated
as

has

Just

%

Preferred stock_^-___

.

10,000 kwh a year
750 .billion kilowatt-

to

In

growth

Seventy-five million households
each

a

1954

Long-term debt

•

Public Service also

pects to build

approximately

plant located at or near a coal
1957
0.29
mirier. Natural gas is currently
;
1958 (estim.)_
0.36
averaged over 14%« being used by the four major
per annum.
At the recent over-counter price
;
1.
'
plants, but. they are largely conMore important activities in the
vertible to other fuels. The com-* around 37 the stock yields 3.3%
service area include mining, cat-:
pany's electric and gas rate sched- and sells at a price-earnings ratio
tie, farming, tourist trade and di- ules contain automatic fuel escala- around 21.
' "
versified industry.
Total income tiori clauses
designed to recover
of * manufacturing concerns was- anv increased cost of j?as which is
Three With Wm. R. Staats
$475 million in 1957, over four
1948.

from 30,000 to

40,000 kilowatt-hours

Yucca Plant is being built jointly
by the company and California
Electric Power, the latter company
installing the first 80,000 kw. unit

$1 01 in 1951; and the present
dividend rate of $1.20 with 65c in

crowding that figure today. Many
customers will

has

with

h
companies

some

companyv^costs and increase efficiency. The

.

than

more

-The

to $56 million currently. Share'this year.
earnings of $1.88 for 1958 compare
-Arizona

...

It could be conthat as tne

'

siderably

Census.

enjoyed phenomenal
growth, with revenuesquadru—
pling from $14 million in 1948
(pro forma to reflect a merger)

897

was

of

structure

Millions

-

the

Hugh W. Long & Go.

June-the

follows:

,

ago,

Last

Paul A. Just Joins

fast

and

sold about $12 million
preferred stock, making the capi¬

entirely practi-. reaching about 00% of-the state's-plant-with: 200,000 kw. k The recal-.for home use. ?;;?...
y
'
population. Natural- gas; isVsup- maining small plants are used for
This is real climate-control,1 and plied in central and southern parts peaking and standby service. Imthe people Of tomorrow's' America
of the state, steam heat in Flag- pbrtant new- plants under conwill pniftv it
:
staff and bus service in the Bisbee^',
will enjoy it ' v i -• ' ?
sfrriction^should reduce the use of
Warren-LOwell area. '
V •
3!CV.^ p:urchased .power as well as proWhat does this all add up to
Arizona is one of the-fastest vidri for-additional-growth.
The
with respect to the use of elec¬
growing states and the population. Ocotillo plant will have a capactricity in the home? - i ;
4t
gained 56% during 1950-58. ;;-A:?ity of 220,000 kw. when completed
In 1879 the average residential
further gain of 70% >
by j 1972 isvin ,U960;.-completely(outdoor in->
use
of electricity- was zero.
No indicated
by projections Of*;• the^i stallation
will cut construction
electric service.

of

company

are

.

result

amortization

depreciation,. etc.

Arizona Public Service Co.

winter storms blow without.
.;

celerated

By OWEN ELY

while

conditions

the

as

'

that the bathers will

so

summer

generation

larger - than - average depreciation
charges, tax savings from ac¬

Calif.—Earl F.

Berry has become associated
Eastman
&

Co.,

He was

with

Dillon, Union Securities

3115 Wilshire Boulevard.
formerly with the trading

department of the First California
Company.

Peter P. McDermott
To Admit J. McDonald

was formerly in the trading de¬
partment of Cantor, Fitzgerald &

Peter

P.

McDermott

&

Co.

on

A„thoritv 6% from the U S BuCo.
Mr. Peter was with Morgan Feb. 19 will admit John Joseph
electricitv. the utilitv in-/* growth of manufacturing employ-*$ A^Wonty,.^b% mm the U, b. Buelectricity, the utility in
...
reau of Reclamation (Parker Dam)
McDonald, Jr.. to partnership in
& Co.
dustry by 1979 will have to pro- ment, farm income and personal and 1% tvnrin other crmw^d
from
sources
.the firm.
•
duce something over 2% trillion
income, and was a close second
re'
■
Joins Walston ^ Staff
kilowatt-hours and have about 600 in population growth. The mild V
^
were
Sutro Adds to Staff
million
kilowatts
of
generating climate, natural resources and estimated at $32 million for last
(Special to The Financial Chronicle)
(Special to The Financial Chronicle)
<- ■
capacity. This capacity is about varied transportation facilities to-: year, Part of a $200 million fivetransportation
LOS ANGELES, Calif. —David
gether with, an ample" water" sup-~ year spending program required
four times the generating capac¬
LOS ANGELES, Calif.—Harvey
Aranoff has joined the staff of
ity' in service today and will re¬ ply should encourage continuing to keep abreast of anticipated Walston & Co.
Inc., 550 South Yatman has been added to the
I:
•;
growth. By 1962, the company Spring Street. He was formerly staff of Sutro & Co., Van Nuys
quire tremendous amounts of new industrial development.
The
company's
revenues
are -anticipates, plant should approxicapital.
'
:
with Daniel D. Weston & Co., Inc. Building.
about three-quarters electric and mate $375 million and revenues
New capital will ?also be re-*
one-quarter gas with a negligible about $100 million,
quired to continue improvement
amount from other services. EleC-The company has not had to do
in' the
facilities
to
deliver
the
trie
revenues
are
29%
residen- much equity financing recently.
electricity from
the
generating
tial, 34% commercial and 33% Three offerings of common stock
stations to the

of

use

u

ini7A

u

_

♦

■

-

.

Construction ex^nditures

.

15

customer, improve¬

industrial.

ments which will include the rais¬

The amount of
will

be

purchased

'

more.

Large

or

additional

by the industry
will be well over 150
today's dollars. It could

by 1979
billion of

this figure sounds,

as

equip factories, industries,

are

about

capacity

made

were

then

389,000
kw.
from
plants with an

leased

176,000 available as
power under contract,

1952-53

but

since

We maintain

ofin 1955 (some additional shares have been issued for
conversion of preferred stock,
etc.). The company has enjoyed
an increasing amount of internal

fering,

ap-

in

there has been only

one

a

market in:

late

Arizona Public Service

Company
.

a

much larger sum will be required
to

proximates
owned

required

well be

sales

Electric generating

capital that

new

Gas

two-thirds residential.

ing of transmission and utilization
voltages, and the providing of new
and improved facilties of all types.

Common Stock

Arizona Public Service

com¬

Company

Common Stock

mercial establishments and homes
to"

these

use

great

of

amounts

Blyth & Co., Inc.

electric energy. This will greatly
stimulate business throughout the
entire electric
associated

industry

as
and

businesses

14

well

tries and the nation itself.

as
indus¬

STREET

WALL

NEW

YORK

5

G. A. Saxton & Co., Inc.

Better

Teletype

NY

1-1605-1606-1607

living and greater comfort for all
the

people

of

United

the

States

will be the end result.
As the electrical

the

all

of

future

Wall

Street, New York 5, N. Y.

Private

era

of

52

progresses,

LOS

Wire

Connections

ANGELES,

to

WHitehall 4-4970

CHICAGO,

PHILADELPHIA

and

DALLAS

ST.

LOUIS

becomes

us

We maintain

brighter. The electric utility in¬
dustry is proud of the services it

a

market in:

has rendered to its customers and
to

in

the nation

the

past, and is

proud of the trust and confidence

the

American

people

Company

ARIZONA PUBLIC SERVICE

Common Stock

will

place similar trust and confidence
in- the

privately-owned business-

managed

electric utility industry

for their electrical future.
i

Established 1931

I^

REFSNES, ELY, BECK & CO.

Miss Edna Moser

Members New

Miss

Jam

Edna

30.

for

25

last

years

vestment

Moser

Miss

retirement

&

Arizona Public Service
Corporate Stocks

Specialists in

We hope and believe

placed in it.
that

Firm Markets in Arizona

a

firm

passed

Moser,
April,

away

before
had

American

been

112

W. ADAMS

Telephone ALpine 3-6646

of

Teletype PX 488

Moser

Co.




Stock Exchange

The

FIRST BOSTON

(Asso.)

her

partner in the in¬
Candee,

York Stock Exchange

ST., PHOENIX, ARIZONA
*

CORPORATION

Mail Address:
P. O. Box 2190

15 BROAD STREET

NEW YORK 5, N. Y.

16

The Commercial and Financial Chronicle

(772)

about

or

Volume
An

Projections for Various Industries

level.

million.

Department of Commerce
ascribes key elements of strength to automobile production
recovery, construction, and increased steel output.
The

Department of

Commerce

is

for

fense Services Administration in-

single-family occupancy,

the

annual

over-

dicates that industry looks optim-

istically to 1959 operations.
The outlook for

trial

some

indus-

75

of the economy
appraised by 24 industry divisions of the BDSA, Administrator
H.
B.
McCoy said.
The survey is a consensus of industry and government experts
segments

have been

in each field.

It summarizes

spe-

cific industry reports on both outlook for
1959
and
activities
in
1958.

1959, 64,000, largely

Lumber: Based

tion

in

3.5%

1959

the estimated 32 billion

over

board-feet

sales

Gross

6.6%

and

expectation

for

improve-

ment in 1959 is based

primarily

the general strength

of the

on

econ-

following its recovery
the 1957-58 decline.

omy,

from
-

Key elements in the anticipated
improvement are automobile pro-

duction,

estimated at 5.5 million after the 1958 low, a
jecord
construction estimate of $52.3 bilnow

produced
in
1958.
are expected to
rise

total lumber

level

is the biggest single factor in the

optmistic outlook.
This indus-

to establish its
13th consecutive production recorc{ jn 1959, with output in excess
0f 6.5
billion square
feet
(%"

try

is

expected

basis),
i0%

an

over

Increased promo-

Follows*

electronics output in
mated by $7.9

The

skies

SfanS Sf
n/ thi
S fnEv if matM
tt

q

^nrmnnf

^

car^inl959

are

iJldn! Jfrwf
S

or30%

c

above

the

oif
J
J958 outputThe 4,240,000, lowest in
of
a decade.
io£« !

?

+n

^

a

nnn

l

expected

in

automobile

•«

would

be reflected in increased markets'
for

metals, glass, rubber, and upholstery leather/ The automobile
industry is the largest single customer for the output
dustries'
•
/
r ♦

of these in.-■**

-

,

public

attitude

pccted to help the industry.
Hardwood Plywood:

^

Foreign

continues to cut into

demand

domestic

for

the

downward

.

hard-

trend

to

new

and

used

ve-

and

movement

increasing
tonnage
by the trucking indus-

levels

1958

by

g°eS

receivers, phonographs,

other

and

products is
from the dip
registered in 19o8, while the output of industrial and commercial
electronics equipment will follow
the trends of the expanding econconsumer

in

sales

1958

were

only slightly below 1957.
With many

important
volume

improved

an

of

Construction:

The biggest sinindustry in the American
economy is expecting to pass the

$50 billion mark for the first time
in

1959, with advance estimates
putting construction spending at
$52.3 billion, a 7% increase over
1958.

This

would

reflect

a

as

well

high in physical volume

new

dollar volume.

as

Private

plus imP°rts — which had been
growing,

scluare

dropped

feet
fntnl

in
nf

25
to

1958
i

million

an

largely

—

housing—is

expected to account
for $35.2 billion of the
total; publie

construction,

including

the

iHP.w,a^Progr£m' is due t0 reach
$17.1 billion.

The prospective in-

Electrical Equipment:

A

gen-

p1".3*_ strengthening of the elec-tpcal equipment market after a
disappointing start in 1958 proml®e_s_ a 10% , increase in sales in
1959 for

a

total of $6.5 billion. The

^

.

..

s'igft

.

Construction expansion will be
reflected

ltures
nals

for

and

in

increased

in

other

Manufacturers of

cause

of the

cated

allied
warm

matelines.
air fur-

building outlook.

Prefabricated
The

expend-

building

many

Homes

(Wood):

manufacturers of prefabrihomes

expect

to

continue

tneir gains in the housing market
in 1959 and reach a new peak in




mostly

was

on

and

robbed

of

it

much

.

balance!,and

better

&

rpU-

'

only clearcut
v
? company, more
aspect in the performance was ™an tl}e °!;her rail equipment
^ buying
mQyed ^ firms has been pushing diver-

^ort

around the 575

be

to

where it

area

sl^lcatl9n aggressively and is
1 n material handling

generally been expected n 0 w
found

ma-

f

cWincr

work' electronics and nuclear

4%

The whole

retraced less than

^actors Earningswere

which

is

S°unnl7 aM0,de^dTeWIuyeeTo did little
into

*

the

mai full-scale correction and

demand

*m

a score of points
under its 1957 high and a 5%

;

appeared in late 1958 is expected

increased

*

available at

*

OI me DUAA swing wnicn is
short of what would be a nor-

the

business,

adequate 5%

an

return.

that

'

About

which offer

ACF Industries, despite an
possible occasional surge,
has been

turnover

significance

a

was

steadily

a

dwindling

to dispel the great
amount of caution with which
the market is being viewed in

sharply lower last
,

nl,_

j

but

year

a

+v«io

reb0U1Ap rhis year seems to be
assured. The

issue was

avail-

»W\ laat year at ha" ofs ds

inom than ^OT,

lnIthe antlfPated build-up
'ro11 and Steel.

ing

capacity

mill

and

facilities,

'•

reached,"or that

base without

new

a

progress,
known

needed.

1957.

Lead

Zinc:

and

demand

lead

for

lrmk

5%

the

over

million

is

tons—a

7.6% from 1957.

Generally-im-

Ploved business conditions plus
inventory build-ups are expected

Aluminum

Producers

'

^ V

.•!

creased

lalling-off

..

of

Magnesium:

anticipate

aluminum

usage in normal
for

::

*

-

channels

the

metal

in

new

*05

the
rally

to

ones

on

Lukens Steel

was

the

and

ferroalloys indusbe helped by
anticipated pick-up in conSteel

would

struction and in automobile

ufacture.

.

<

man•

-

Steel prices are expected to re-

main
the

more or less stable
first half of 1959.

during

dustry during the

past year, with

the replacement market
failing to
come

up to expectations,
export
activity
declining, and imports
continuing to offer serious cornpetition to the domestic market

TWs"segmenf
erated

ft

the

o£

t^Tt

,oweset

ders

are

cieaners—iook
declined

°P"

estimated at $310 million

for

a

and
5%

ftZ!"the

spite the slowdown

vacuum

pick-up

Tit
in

1958—8%

from 1957—sales remained high in
comparison with other years gen-

The'furniture
"considerable

ing

to

the

downtrend
after

outlook warrants

optimism," accordindustry, with the

apparently stopped

bringing 1958 manufacturers'

shipments to less than 10% under
Widely
scientific,

past 10 years, yvith 1958 shipments
approximating1 $410 million or
about 40.3% below the
$793 3 million level of 1957. Gross new or-

freezers,

diversified
and

industrial,

a

standout

—excluding handmade
—to

a

new

glassware

record. A 5% gain over

Continued

on

page

37

operations

were

picking

up

,

-

rebounding. The issue has
A candidate for a better
been building up a following dividend is Blaw-Knox. im-

since it broke out of its range portant supplier to
heavy inon |be
upside amid glowing dustry and the construction

reports of its going on to fan- business.
tastic levels.

well
*

*

*

Earnings held up
according to
estimates, covering

last

year,

company

Unlike the warious market the $1 40 cash payment more
twice over. Ihe cash
normally is larded

with

small

Moreover,

a

stock

payments,

forthcoming

ac-

previous peaks, Engineering will lift the comincluding du Pont which pany's earnings potential to
nudged 250 in 1955 and some three times the cash re-

even 237 in
been within
of

than

payment

position to joust quisition of Aetna Standard

even

1956 and hasn't quirement. The stock is one of

of points those selling at a conservative
figure since. price-eArnings ratio. On proleader in the min- jected earnings for this year
a score

the latter

joy Mfg.,

a

NT machinery field, similarly the recent market price was
has been hovering some two only nine-times earnings,
dozen points below its 1957
high although at recent levels

*s

yie,ld was in the 4%

T h e below-average priceearnings ratio in the rubber

Rubber which
normally had a lower
Railway Equipments Favored ratio than its competitors in
bracket.

group is U. S.

has

..

k

because of its larger outstanding issues of senior obliquarters, mostly because an gations. Here, too, the recent
upturn in the fortunes of the Price is a dozen points under
rpbe

shares

p a

i l

were

w a

in

y

equipment Paid;

faVO"r*in

many

household
use
high level of in- nati0n's railroads should logi-

along with the
come is expected to raise sales of
pressed and blown glass products

still trou-

was

somefouTrtOTs°rtS is being felt "Vhad
machines,

rousing greet-

was

0ut important new demands
retreating and then from the auto front,
soaring when the general list
<
❖
*
*

gen!

Manufacturers of household apitems as- washing

a

was

of industries
they are in
erally is optimistic for 1959, after with
their
a mixed record in 1958.
Competi- even

pliances—such

lay-

to make good nicely but/apparently, with-

longSway

castings,

Some

were

castings, and wrought products barometers, the list was still
continuing. The growth may ap- studded
with
issues
with
.tbe ne.w ^ear beSins, ingot
proximate 20%. Aircraft and misabove-average yields that
capacity will approximate 147 sile programs shmulate demand
m!}bon tons> an increase of 6.3
haye a
to g0 before
million tons over Jan. 1, 1958.

Paralleling the ingot production
expansion, increased activity also
is in prospect for the forging,

conviction.

0ffs by General Motors hinted
that the new models might

first seemed to .be perking along
rebound, smoothly. Steel orders and

that
the

a "ew ®Ieme,lt into the Picture-

group

by lolling around without
much

progress when the rest ol the

list

shipments'

diverse

un-

Pont' Minnesota Mining and bled for supplies of glass.
American - Telephone; and Only Ford of the Big Three
were

^

and.

consumption, plus the growing

demand

T

still the

were

quantity and showed

the brunt of, the tinal selling, not be getting
issues of the calibre of du
ing; Chrysler

moremeanbov'enS because^?in- performer able
of

*

-

T

Volatile Issues

a

figure 12%
usage is
ex-

i^oon^iimntion °nf

short

/'

the

tons—a

1957.!. Zinc

mnted

000

zinc

ronSr,.mntinnheahn.n '' T h e high"Priced. quality
1958 estimate of
items were the ones that bore

short

below

Strengthened

and

much overall

too

!hethX!tiyashS I8 declhm further ^down the ladder is

,

figured'at 4%Mn pUbli!construccntofpr—s^
lion' *new ^ion-farm ^(fweUings"
tt

puhl^and private, are in

feat

from

esti_

million

fi02

matecl total ol 1,602 million.

tries.

construction

the

technical correction

pern"ndiS SSS T^rodS

b however, and this could inject

gle

but

for copper and its products which

push 1959 ingot production to
or 110 million tons.
This 1958
runs about 6%
below 1957,
compares with 85 million tons in
and
shipments of mill products
1959 after a
disappointing 1958. 1958 and the Peak production figand ingots to consuming industries
Truck production should reach
1,- ure of 117 million tons in 1955.
000,000 units, a 20% increase over
1"e projected 1959 level asRecentfy ""announced "stabilired
1958
and
truck-trailers,
56,349 sumes 110 ma3°r strikes in steelunits, a 21% increase over 1958. Producing raw material or steel- prices will aid the industry.
The magnesium outlook also is
Truck manufacturers are
facing consuming industries. The threestiffer competition in the
export year labor contract expires July
market

up which is the case in both Pullaround half of the lost ground and Alco Products, both of

had

try

are major factors to which the
commercial motor vehicle producers
look for a strong market in

snaPPed back to make

recover

Electronics

Copper:

a selling cli- the recession pinch in the railthe end of a four day road business. Moreover, the
string of declines to start off rail equipments generally are
this week an(f then promptly selling even below book value

accomplished

Consumer demand for radio and

television

,

toward

Trucks and Truck-Trailers: Low

hicles

rec-

new

Stocks staSed

max at

continue in the new year. Shipprice
stability
consements in 1958 were estimated at greater
Motors Uncertain
1
^
760
square feet, surface
WaU Street. Time will be reAuto sh a r es, except for
measure, compared to 793 million
in 1957 and 891 million in 1956. supply situation is rated the best quired to establish the fact American Motors which was
in years, due to expansion of min- that
a solid floor has been given to
Consumption—domestic shipments
moving widely but

^

inventories of

a

miUtarv016

dieting

industry covers transmission and
new-car buying,
engineering and distribution
equipment, motors
styling changes, a general up-and. control apparatus, lighting
swing in the economy, and more equipment,
and electrical constability in the industry itself be-S^'Uction materials.
cause of the new labor contracts V
Increased generation of elecare the principal factors
respon- iflcal energy and new construcsible for the optimistic outlook, tion are two of the leading factors
Better

total

AND YOU

By WALLACE STREETE

neuver

increase

production

are

1959 is esti-

billion,

exceeds

that

ord

come

Automobiles*

THE MARKET..

-'

,

^

tional activity aimed at diversification in market outlets is
ex-

expects

^

for 1959
million.; >

itoytT'lnduS^eS

increase approximating
1958.

Shipments

estimated at $155

expected to

'-.t wood plywood, and the industry

The Industry-By-Industrv

r Outlook

consump-

The anticipated
residential construction

of

■"

.

,

to0approximater|ll5emiT-

tion about 3.8%.

nfnia0lnr>U^nmfcompetition

between 105 and 110 million tons.

about

increase

to

•

pected
lion, or about 18% under the 1957
level.

generally
favorable economic outlook,
the
lumber industry expects produc-

Softwood Plywood:

The

for

the

on

•', "

Shipments for 1958
are estimated at $148 million,
as
compared with $258 million for

sales. Production in
estimate^ at 61,000 units

1958

and

that

Thursday, February 12, 1939

1959

Tools:

chine

.

1957

Forming and Shaping Type Ma¬

output and

all survey by its Business and De-

announces

the
that

estimated

shipments will approximate $420

industry by industry outlook appraisal for 1959 results in
optimistic overall expectation.

an

below

42.4%
is

It

,,

«

benefit them handsome-

cany Denexu mem iidiiubume

the bigh for 1956 with
fortable

ly. Maintenance expenditures Ahe
and

dividend
k

a com-

well

into

f

/c uracKet.

buying of new equipment
Although the rail business
among the first to feel is recovering generally, even

were

Volume

189

Number 5820

.

.

.

The Commercial and Financial Chronicle

(773)

the

quality issues in the

rier

car¬

Chase Manhattan

section weren't in much

Participating in the offering are:
■

J. P. Morgan &

&

Co.; Laurence M. Marks & Co.;
W. H. Morton & Co.,
Inc.; R. H.

Co., Inc.; Blyth

&

Cb., Incf.; The First .Boston
Corp.; Harrimkn Kipley & Co.
Inc.; Smith, ..Barney & Co.; The
Northern Trust Co.; Harris Trust
lion windfall dividend from
and Savings
.
Bank; Seattle-First
c,
T
•
The . -Chase Manhattan • Bank National Bank; Carl M. Loeb,
lis
noiam^s oi at. bouis heads an*underwriting syndicate
Rhoades & Co.; Wertheim & Co.;
Southwestern. With the help which .on Feb. 10 was awarded
Ladenburg, Thalmann & Co.
of this, which will add about
^n l,s?uex °f $25,000,000 State of
A. C. Allyn and Company Inc.;
Washington, General Obligation
$2.20 to reported earnings,
Institution Building Bonds,
due Alex. Brown & Sons; F. S. Mosesome
projections are for a $9 Feb. 1, : 1960 to 1979, inclusive. ley & Co.; Schoellkopf, Hutton &
profit for Southern Pacific. The group submitted a bid of Pomeroy, Inc.; B. J. Van Ingen &
Yet the stock lately has been 100.049999 for a combination of Co., Inc.; Bache & Co.; City Na¬
4s, 3s, and 3.20s, representing a tional Bank & Trust Co., Kansas
hovering between seven and net interest cost of 3.17472% to City, Mo.; Clark, Dodge & Co.;
eight-times earnings and • of¬ the stated
Francis I. duPont & Co.; Fidelity
V
'"r
*
Public reoffering of the bonds is Union Trust Company, Newark;
fering a return of well past
Fitzpatrick, Sullivan & Co.
4V> %
favor

although, as in the case
of Southern Pacific, there is
the added note of a $20 mil¬

GroupOffersBonds ef
Stale of Washington
M

.11.

despite the fact that the being made at prices to yield from
Sopac a candi- 1
to 3 25 ^» according to
for something in the way "idtu
y'

windfall makes
date
of

a

r this

stock dividend

well

St. Louis

Municipal
Party

Moulton & Co.; Wm. E. Pollock &

Co., Inc.; Shearson, Hammill &
Co.; Swiss American Corporation.
Spencer Trask & Co.; Trust
Company of Georgia; Bramhall &
Stein; Harkness & Hill Inc.; The
Illinois
Co.
Inc.; Northwestern
National
Bank
of
Minneapolis;
Ryan, Sutherland & Co.; Stern
Brothers & Co.; Tripp &
Co., Inc.;
Wood, Gundy & Co., Inc.

Two With Merrill Lynch

Dealers Annual

ST. LOUIS, Mo.—The St; Louis
Municipal Dealers Group will hold
their annual spring party April 29May 1. The field day itself will
be at the Sunset Country Club,
May 1. A preceding opening will
be

held

in

the

St.

Louis

Room.

April 29.
Floyd Beatty, A. G. Edwards &
Sons, is General Chairman of the
party.

(Special to The Financial Chronicle;

CLEVELAND,

Ohio—Thomas

Joins Bache Staff

L. Curran and Robert K. Schuster
are

now

with

(Special to The Financial Chronicle)

Merrill

Lynch,
Pierce, Fenner & Smith, Incor¬
•Ira Haupt & Co.; Hirsch & Co.; porated,
216
Superior
Avenue,
J. A. Hogle & Co.; W. E. Hutton Northeast.

COLUMBUS,
Howard

Bache

has

&

Co.,

Ohio—Ronald

joined

the

V.

staff of

30 East 13road St.

as

year's estimated results,

Ph
1

as

17

':

_"■> Uhion Pacific is also amobg
the candidates:: for dividend iz:

improvement since it. covered r,:
its payment twice over in the
recession year

ing in
'

nies

a

of 1958, fern-: *
profH only a few pen-' \

under

that

earned, the/
.

'

year before. Operations point
to

.

a

high in earnings for:

new

•this year, even
; revenues
; tantly.
:

one

.

without its oil

picking

'

<

,

UP is

on

of the smaller for'

rails, around

impor- .•;

up

The return-

•

quality

but obvi- '*•

ously that picture would alter
swiftly with any change, in
the present rate;

~Food

,

.'•/ /, j

v.

stocks

have

been

rather

neglected recently al->'
though some of the spotlight //
was

turned in their direction

when Standard Brands

bobbed up as/ a stock-of-the- ' month selection by one serv- '
ice. Standard has had a quiet
but steady upturn in per share
profits since 1955, first time

:

in the decade that it failed to

improve on the previous
year's results. Further growth
assured

seems

has

pany

and

the

been quick

How many new cars

com¬

to

re¬

ward shareholders when busi¬
ness

is

good,

dividend

increasing

twice

last

Completed last year as a part of Republic's expansion and

its

modernization program at

year.

45-inch universal

Despite this largesse, its re¬
cent yield of nearly 4%
is
still an above-average one for
a
quality item.

the

slabbing mill

can

make thirteen automobiles

or

Plant is

270 file cabinets. The

new

permits Republic to roll ingots faster, more efficiently

sufficient to

The increased

with the
in

make

more

than

seven

million

refrigerators.

new

roll steel ingots (like

shown above) up to 25 tons... enough steel to

one

mill

the Cleveland Plant, this giant

in this 25 ton ingot?
capacity of the Cleveland Plant, together

expansion of other strategically located facilities

Chicago, Illinois; Warren, Ohio; and Gadsden, Alabama,

will

provide better customer service and still greater pro¬

t

than

Fansteel

/

Metallurgical,

The

which

could benefit impor¬
tantly from the recent success
in
casting molybdenum, a
hitherto
balky metal, has
shown the least response to
the development. Throughout
all of last year and this the

issue has
around
made

14

any

held in

duction

before.

furnaces and the

sixteen

new

hearth

ahead.

soaking pits, expansion at the 98-inch hot strip
new

coke

additional 918,000 tons of

STEEL

General Offices: Cleveland 1, Ohio

Alloy, Carbon, Stainless Steels • Titanium • Bars • Plates • Sheets •
• Tin Plate • Terne Plate • Cold Finished Steels • Steel and Plastic

Strip

ovens.

Pipe

annual steelmaking

capacity added in the last three years at the Cleveland

range

years

REPUBLIC

enlargement of four other open hearths,

mill and the addition of
The

efficiency for the

biggest single steel expansion in Ohio history

included the addition of two new 375-ton open

of
points and hasn't
a

ever

•

Pig Iron

Tubing • Bolts • Nuts • Rivets • Wire • Form Fence • Nails •
•
Iron Powder • Coal Chemicals • Fabricated Steel Products •
• Steel and Aluminum Windows • Steel Kitchens •

Steel Building Products

Shipping Containers • Materials Handling Equipment *

Drainage Products.

serious attempt to
high. The com¬

"reach its .1957

pany is a low-yielding item
but its growth has been im¬

pressive,
more

than

with profit ahead
400% in a decade.

*
-

It has been busy

expanding its
facilities and is a large sup¬
plier to the electronics indus¬
try where the romance-Of the
field has spurred wide:,

.'t

even

illogical market movements.
1

[The

views

expressed in this
article do not necessarily at any.,
time coincide with those of the
"Chronicle." They are presented
as those of the author only."\




The

largest single project In Republic's Expansion

the Cleveland Plant is the 45-inch
universal slabbing mill which can produce slabs

program

up to

at

75 inches wide.

One of the 16 new

soaking pits which heat steel

ingots to 2400° for rolling in
lifted from the pits by

the slabbing mills,

overhead

cranes,

they

are

carried to the slabbing mill on an ingot buggy.

Heated steel ingots are
the

shown entering the mill from

background. After reduction to slabs they are

carried

on

the conveyor

table through two separate

operations, cooled and shipped to the strip milk

The Commercial and Financial Chronicle

18

.

.

Thursday, February 12. 1959

.

(774)

fulltheir lack of
direct contact with practical busi¬
ness outside the windowless walls
of the Bank of England is bound
life. No matter how able the

Future of the Bank of

England

By PAUL EINZIG

to

Britain anticipates a Radcliffe Com¬
mittee's recommendation that Bank of England's part-time
Commentator from Great

be

directors

dropped,

though they

even

tical

try to be more Socialistic
the former not to try to

be

a

mistakenly

He hopes the present government will not

economy.

experience they had gained
their appointment would
wasting asset—they would

the

gradually lose touch
with
ever-changing situation.
<

important to the

are

of the full-time

some

before

of economic life and make it impos¬

forestall trouble in firms that

sible to

disadvantage.

a

di¬
former
bankers and businessmen, the prac¬
if

rectors were chosen among

charges of dereliction of duty. Dr. Einzig maintains that use
of full time directors without any outside interests will isolate
the Bank from the realities

Signing Documents on $40,000,000
Borrowing Jiy Kingdom of Denmark

are,

them at

place

Even

cleared of all

were

directors

time

Another Advantage

than the Labor Government in urging
steal Labor thunder by eliminating

!

system of Bank of England
as a high-class clearing house

ent

acts

part-time directors.

>

v

Under the pres¬

Nor is this all.

top-level
business
appoint¬
ments.7 Whenever sohie important
for

LONDON, Eng.—When

Bank

the

of

ernor

of

mending

portion of industrialists and other
non-bankers on the beard of the

recently re¬
appointed, he made it plain that

Mr.

Cobbold,

he
•

to

was

term

the

of

altogether.

time directors

five

of

Cleared

inter-

be

possibility of

wishes

his

Bank Rate leak affair was

Such

resigna¬
the

in

case

of

recommendation would

a

fully

with

accordance

in

the

The
worked

Party.

Labor

the

of

in difficulties the Bank of

firm is

advises

England

and

suggests

of its

board of

it

reinforcement

the

By such means it was
during the postwar pe-;
rioa
to rescue many
important
firms,
before
the
public even
realized that there was trouble.
directors.

possible

contact between the

The informal

preted as fore¬
shadowing the

tion

Fully

Directors Were

Part-Time

This

years.
was

in¬
advocating the
system of part-

It is credited with the

Bank.

abolition

serve

entire

the

an

tention of strongly

not

may

wish

the pro¬

increase in

the Gov¬
England,

part-time directors and the Gov¬
ernor
on
the one hand, and be¬
Chancellor

documents in New York City relating to the borrowing by
of the equivalent of $40,000,000. The borrowings were

ing

mainly with the object of dis¬ advantage, and it would be a great
crediting the system of part-time pity to terminate it.
Needless to say, the Radcliffe
directors by conveying a suspicion
that
such
directors are in the Committee is only too familiar

Denmark

up

the

United States, is shown

of Denmark to the

the other, is a great

on

Ambassador of the Kingdom
(seated, center) sign¬

Count K. G. Knuth-Winterfeldt,

the

and v

Governor

the

tween

1957, it would indeed be

offering of $29,000,000 Kingdom of Den¬
underwriting group of investment
banking firms headed by Kuhn, Loeb & Co.; Smith, Barney & Co.;
Harriman Ripley & Co., Incorporated and Lazard Freres & Co.,
and through a $20,000,000 loan from the World Bank.
Participating in the signing ceremonies are, (seated, left),
Bjorn Olsen, of the Danish Ministry of Finance, and (seated, right),
Davidson Sommers, Vice-President of the World Bank. Standing,
left to right, are John M. Schiff, Senior Partner of Kuhn, Loeb &
Co.; Stuart F. Silloway, President of Harriman Ripley & Co., In¬
corporated; Charles J. Stewart, Partner of Lazard Freres & Co.;

to visualize friendly

and Nelson Schaenen, Partner

of

advent

a

Socialist Gov¬

In

ernment.

Labor

of inside in¬
personal gain.
investigation of all
transactions
that
preceded
the
Bank Rate change of September
1957 was carried out by a court of
habit of making use

the
attitude of the
of

view

for their

formation

Dr.

Paul

Einziff

thorough

A

Party

of England on
the occasion of the inquiry over

towards the Bank

line

this

with

inclined

are

argument.

take

to

and

view

But
rate
political
recommend
the

of

to

a

because they feel that it
is bound to be carried out in any

change

leak in inquiry presided over by a senior case by the next Labor Govern¬
difficult judge (the present Lord Chief ment. It is to be hoped, however,
collaboration Justice) and its findings complete¬ that the Conservative Government
between
Mr.
Cobbold
and Mr. ly cleared the part-time directors would not implement any recom¬
Harold Wilson, who will be Chan¬
of all such charges.
mendation to that effect. For it is
cellor of the Exchequer in the
Even
so,
Socialists
remained a mistake for a Conservative Govr>ext Labor Government.
convinced that it is wrong to re¬ ernment to try to be more So¬
Rate

Bank

alleged

an

alone, Mr. Cob¬

For this reason

bold

may

visable

to

have considered it ad¬
reserve
the right to

his new term of
There is, however,
another reason. It is the anticipa¬
tion of certain recommendations
before
Office expires.
resign

the Radcliffe Committee,
whose report on the currency sys¬
tem is now expected to be issued
towards the middle of this year.
by

though the Committee has
not
completed its deliberations,
and its proceedings are a closelyEven

guarded secret, several witnesses
who gave evidence before it came

with the distinct impression
key members of the
are
strongly critical
of the Bank of England and are
away

that

some

Committee

in

recommending

of

favor

some

This at any rate
by the way these

drastic changes.
indicated

was

members of the Committee ques¬
tioned

witnesses

the

concerned.

part-time directors. Whether cialistic than a Labor Government.
or
not the Radcliffe Committee In doing so it would only force
will recommend the abolition of the next Labor Government to go

it

system,
the

that

next

will take

is safe to assume
Labor Government

early opportunity to

an

lay down the rule that henceforth
all directors of the Bank of Eng¬
must

land

with

is

interests.

feeling

strong

a

directors

full-time

outside

no

there

be

For

among

its

in

further

even

measures

of

satisfy

the

bank

gold

though the members who

displease the
In particular,

of Eng¬

Bank of England.
it is expected that

the

then

leading Socialists that so long as

servative

the

Labor Government will have to do

of

something more drastic to show
its Left-wing supporters that it is
more radical than its predecessor.

present system continues the
Bank of England is not really na¬
tionalized but is still under control

interests.

private

It is inconceivable that a Labor
major decisions
taken by the Gov¬ Chancellor of the Exchequer if
forestalled in respect to the' re¬
ernment. Even though the Gov¬
moval of part-time directors might
ernor and other high officials are
able at times to influence these place the hidden reserves of the

In

of

all

reality,

policy

are

Bank

of

England under Treasury

by their advice to the
their control. When the Bank was na¬
in this respect does not tionalized in 1945 Socialists with

decisions

Chancellor of the Exchequer,

position
differ

that

from

senior

of

Gov¬

ernment officials who have direct
access

him,

to their Minister.

inside

knowledge

very

were

cellor is at
advice.

gest the termination of the exist¬
ing system under which the ma¬

case

any

is

about

other

of

England

are

part-time

direc¬

The

same

true

important policy decisions.
It seems, therefore, that the So¬
cialists
grossly
exaggerate
the
alleged influence of part-time di¬

tors whose main interest lies out-

rectors

fiide

the country.

the

Until
rectors

Bank.
the

late

were

'twenties

all

but during the last 30 years or so
a

number of senior officials of the

Bank

were

made full-time direc¬

tors, and part-time directors now
include

representatives

economic

interest

merchant

banks.

in

of

other

addition

Even

so,

to
the

merchant
tinues

extent

banking element con¬
be represented to an
that, as critics argue, is

to

the- montary

a

policy of

are

of

course

in

position to influence the Gov¬
and, through him, the Chan¬

ernor

cellor,

by

providing

information
are lia¬
ble to influence policy decisions.
Under the existing system a con¬
about developments that

stant

stream

cerning

the

of

information

position

con¬

in banking,
etc., reaches

industry,

commerce,

the

enabling the Governor
the situation and pros¬

to

Bank

judge

entirely out of proportion to the
relative importance of merchant
banks in 1 the national economy.
The Committee is not likely to

pects correctly.

confine itself, however, to recom¬

from




Should

the

part-time

be removed, the Bank of

would

transaction
out any

other

effected

public discussion.

hand,

ment should

Bank's

be

can

if

Labor

a

assume

hidden

with¬

On the

Govern¬

control of the

reserves,

in total money
This

month's issue

of

the First

National City Bank of New
"Bank

York's
British

examines

Letter"

economist Roy Harrod's
tion of
The

talk

$100 for
"Letter"

heard

■

an

prescrip¬
ounce of gold.
that "more

notes

need

the

of

the

in

for

an

in

through
Parliament,
and
the
inevitable
publicity attached to it might do
It would
mistake

for

ernment

to

been
than

of

the

next

away

tors.

In

ment

the

and

so

directors

England,

grave

Gov¬

thunder

it

would

Labor

next

of

even

more

only

Govern¬

something much

more

harmful.

the

Bank

"The chart is worth some study.
Most

striking perhaps is the re¬
markably consistent upward trend
in
the
price of gold from the

time of the
founding of the Bank of England
in

1694.

out

to

is

now

Ohio—Byron ^ E.
1 affiliated

with

Ross, Borton & Co.. Inc., The 1010
Euclid

Building.

The

0.38%

rate
a

year

Mr.

ounce,

Calculated

"Of

period of stability in the London

price, from around 1700 to
Apart from upsurges during
the Napoleonic Wars

gold
1931.

after

and

the

the

British

is

equivalent

to

the

"Thus,, the

current

gold

price,

long
history, would seem -to be just
'right.' Raising it to 714 shillings
according

to

the -trend

of

the

of
at
ounce.
Coincidentally, this is also the period
in
which
the Bank of England
gold
remained
about 78 shillings an

attained

tannia

world-wide
the

to

banker

ruled

renown

while

world

the

as

Bri¬

"

seas.

"These 200 years of

stability are
especially impressive since they
span
a period in
which popula¬
tion growth, world-wide economic
development
andindustrializa¬
tion, and expanding international
commerce were producing a rapid
increase
far

in

in the

in

demands
of

excess

supply of gold. One might
that
this
would
the price of gold.
helped hold the gold price
was

form

bank

money,

expansion

thought

the

widening

supplements to gold
the

for

the

increased

What

price of $35 an ounce after
converting shillings at the official
rate of :14 cents apiece.

let

terms
steady

in

gold,

stable

S.

when

War

Government

depreciate

pound

trend

—

World

First

and

compounded

gold in London of 250 shillings
per ounce.
It is an amazing fact
that this is today—and has been
since 1949
the ruling price in

Coincidence

special interest is the long

have

for

Favorable

Notes

have

rise

Projecting this age-old
produces for 1958 a price

It

Harrod's

proposal of $100
would be premature.
from the trend, this
would not be the right price for
another 278 years."
an

works

of

the sterling equivalent

ounce,

of

annually.

U.

(Special to The Financial Chronicle)

Kennel

Settle¬

International

for'

ments...

London.

With Ross, Borton
CLEVELAND.

find itself largely isolated
the
realities
of
economic

the

Government by
with part-time direc¬

doing

to do

radical

a

Conservative

Labor

doing

induce

a

in

The chart is found
1951 Annual Report of the
1250.

Middle Ages up to the

be, therefore,
steal

the year

supply

an

increase

gold has
London
perhaps

price

anywhere- else
in
the
world,
though the subject is also of ma¬
jor interest in South Africa, the
leading, gold producer. Ideas vary
on how high the gold price should

as-'

any

sistance would have to go

incalculable harm.

These directors

di¬

merchant-bankers,

on

pleased

Evidence

the Chan¬
liberty to disregard his

and in

the Radcliffe Committee will sug¬

jority of the directors of the Bank

between the long

favorable coincidence

the

notes

gold price stability from 1700 to 1931 and dynamic population
and economic growth changes wherein there was no shortage

Left-wing supporters. But
if this change is made by a Con¬

with the compulsory ac¬
quisition of the privately-owned
stock at a price which did not even' be raised; the most extravagant
land may constitute a minority, given during the Bank Rate in¬
they include
some
highly dy¬ quiry showed that the Governor pay for the hidden reserves. But figure mentioned is the $100 an
ounce proposal put forth
by Pro¬
namic personalities. As it usually is in the habit of consulting the those reserves have been left in
fessor Roy Harrod of Oxford.
happens on such Committees that part-time directors as well as the the possession of the Bank, so. that
full-time
directors
about
Bank if a private bank gets into difficul¬
their conclusions are influenced
"Curiously, all
the discussion
longest range
by a small number of dynamic Rate changes under consideration. ties the Governor is in a position has 'ignored the
to assist it without any publicity. extant record of the price of gold,
members, it seems reasonable to But the decision whether to rec¬
He may consult the Chancellor of a chart, of the London gold price
expect that the report will con¬ ommend a change to the Chan¬
tain
recommendations that
will cellor of the Exchequer rests with the Exchequer informally, but the reaching back 700 years to about
Even

disapprove of the Bank

-

reserves

many

its

Government

of gold when-

"an

By doing away
part-time directors a Labor
would

\V)

of Smith, Barney & Co.

feel cramped reduces the gold price to
index of the willingness of governments to inflate." Further,'

ever

really wish to go.
with

York

New

New York bank concludes that raising the price

against the present organization of
the Bank of England than it would

Government

a

National City Bank Reflects
On Gold Price Rise Argument

•

tain

the

by

bonds

mark

its members at any

of

some

effected through a public

of

in

supplements
valuable

The

were

of

and

currency

paper

deposits.

themselves

use

money,

as

kept

by limiting their issue and mak¬
them

ing
into

"Thus,
fashioned
and

.

on

*

—

which

1

it

Victorian

over

demand

.

essentially,

caution

trend for

the

convertible

gold.

—

defied

-.

•

:the

and kept
People be-

200 years

gold price stable.

•

old
morality
was

.

Volume

189

Number

5820

.

The Commercial and Financial Chronicle

.

.

(775)
lieved

in

that

all

but

ment

essary
v

demand in

on

as

honor.

served

pay¬

957,300,

according

estimate

of

gold

was nec¬

of

willing to limit

were

liabilities undertaken accordingly,
and accept occasional painful pe-

riods

of

bitious

>

retrenchment

failures

ness

commitments

"Today,
ered

the

to

the

Department
41%

of

the

of

to

the

1957

About

86% of the Company's op¬

erating

Connecticut State

from electric

Health,

ance

state's

which

is

from

1958

came

service, and the bal¬

had

total

operating

$77,954,000

and

of

revenues

net

income

$12,709,000, equal to $1.41

a

the Company reported total
op¬
erating
revenues
of
$74,900,000

of

and

com¬

service.

gas

For the year

population.

for

revenue

mon

1958 the Company

preferred stock. For the year 1957

share

after

dividends

net

$1.21

on

dends

a

income of $11,258,000, or
share after divi¬

common

on

preferred stock.

overam-

reached

an

level.

deflations

be

consid¬

are

intolerable.

world

population of about

busi¬

and

whenever

unsustainable

a

national

point

a

They

has

most

the

extraordinary circumstances

All

over

have

governments

t

■

.

ac¬

cepted

responsibility for main¬
taining high levels of employment
and

all

J

production.
the

more

| timely
f

take

to

We, too, pioneer

to check inflation
gets rolling too fast."

•-v:Vv.'
Index of Inflation

f

5
f

it

makes

action

before it

f

This

necessary

"Determination. to resist inflation

make deflations

can

But

sary.

valued

if

unneces¬

currencies

whenever

in the Modern

de¬

are

Age

gold reserves
price of gold

I

feel

'*•

will simply become an index of
the willingness of governments to

\

cramped,

the

inflate.

And
inflation,
equally
deflation, brings social in¬
equities and stresses and strains,

with

"Upsets political stability, and
dermines the

functioning of

un¬

mar¬

kets for money and credit which
are
essential to orderly produc¬

Our

era moves

toward

new

worlds... and in the spirit of our times

John, Hancock takes its modern place.
almost unbelievable

electronic

service to millions of

our

tion and trade.
"No

responsible

should

want

government

raise

to

the

gold to heights which

price of

would

policy

With the help of today's

machines

we

deliver

ever-faster

•
.

■

i

owners.

cre¬

ate

a monetary base for accelerat¬
ing inflation and a flight from its

Nearly 2,000,000 policy records

are

maintained

on

magnetic tape.

currency."

Our giant computers create and print some 400,000 premium no¬

W. HI, Lendman Joins

Granbery, Marache Go.
William

M.

Lendman

associated

come

has

be¬

.

Bankers Underwrite
The Connecticut

offering

price

of $22.50

basis

'•

of

unit

of

one

holders

of

10

Feb. 5,

to

company

and

privilege
new

share

shares

1959. The

offering

of

shares

share

per

new

less

or

for

its

The

of serving

our

policy

The

price

not

exer-

rights, at the
of

$22.50

subscription

per

offer

to

will

offering

How

we

i.

is

being

under-

banking

firms of which Morgan
& Co., New York; Put¬
Co., Hartford, Conn.; Chas.
W. Scranton & Co., New Haven,
Conn.; and Estabrook & Co., New
York and Boston, are managers.

Stanley
nam

'■*'

In 1958, John Hancock

$418,000,000,

an

paid total benefits of

average of $1,674,000 every

working day, and $34,000,000

more

1957.

'pre¬

&

Net

proceeds

from

Jernal

V,

every

to

vital part in the great

Assets:

and

$5,518,219,000.

of 3.0%.

(Obligations,

special

contingency

reserve

reserves,

industry

and

communities

strengthened by John Hancock investments
—an

Canadian provinces.

$673,437,000 paid to

safeguard the future

$5,006,953,000; general contingency

state and ter¬

average

of $1,950,000 Invested

every

working day.
or

set aside for policy

beneficiaries in 1958—an increase

V

Over $22 billion of John Hancock insurance

s

in force at the end of 1958—an increase of

7.9%.

sources, will be used by the

Company

a

$511,266,000.)

ritory of the United States and into various

the financ-

l^ing, together with funds from inV;

than in

we

American

payments flowed into

owners or

J!.'J."

How

paid benefits

group of investment

a

has been

growth demonstrated in the 1958 Annual Statement excerpts below:

1959.

"'j. written by

owners

ever-newer

the

expire on Feb.
24,
1959,
and
the
subscription
offer
to employees on
Feb. 19,

"

ways

adopting

on

the

stock

common

^ cise of stockholders
stockholders

dend and annuity computation, and to group insurance accounting.

is also
of
the

^ subscribed for through the
share.

major actuarial operations, to divi-

each

held

company

subscribing

subscription

our

the

on

for

employees
its subsidiaries

of

equipment contributes to

Light & Power

to

common
stock the right to subscribe for 762,565 additional shares
of common stock at a subscription

'

automatically prepared—in two hours weekly! Modern electronic

We believe that John Hancock's alertness in

Gonn. Lt. & Pow. Offer
is

payroll for 6,000 Home Office employees is

with

Granbery,
Marache & Co., 67 Wall Street,
New York City, members of the
New
York
Stock
Exchange, as
Manager of the Sales Department.

Co.

tices every month. Our

outstanding
bank loans, to finance in part the
Company's 1959 construction pro-

"gram

repay

and
for
other
corporate
It is estimated that the

purposes.
"

construction program will require

expenditures of about $39,000,000

Aviir

-

in 1959.
"

The Connecticut

Light & Power

Co., the largest electric and gas
utility in Connecticut, is engaged

,

principally
.

purchase,

in
the
production,
transmission, distribu¬

tion
and sale of electricity for
residential, commercial, industrial
and
municipal purposes within
.

the State of Connecticut. Territory

served
<v

by

the

Company

electricity,

gas,

about 3,286

square

or

both,
miles,

of the area of the state.

with
covers

or

67%

The

area




MUTUAL! LIFE

INSURANCE

BOSTON,

19

COMPANY

MASSACHUSETTS
■

-V

1

The Commercial and Financial Chronicle

(776)

20

The

However, Soil Bank payments to
farmers will be susbtantially re¬
duced
with
elimination
of
the
Acreage Reserve Program, which

Agricultural Outlook
By

O.

V. WELLS*

\

Agriculture, Washington, D. C.

Reserve

"Demand

Situation"

Price

and

released by

the Agricultural Mar¬
keting Service, U. S. Department
of
Agriculture, last Nov.
-

12, 1958, sum¬
the

marize

agricultural
outlook

lor

1959

fol¬

as

lows:
"P

i

r

e

c

received

s

by

farmers,

this;

which

are

year

best

their

five

in

level

V.

Wells

show some

1959, mainly because
prices for hogs. Although
an
increasing flow of products
from farms will probably main¬
tain total cash receipts from farm

decline

farm

ized net income to farm

operators

from

to

in
prospect, although indications
now are
that many farmers will
farming

fare about

appears

well in

as

been the case in

be

1959

1958.

Perhaps

should

I

also

in

of lower

add

a

of

36.4-million

with
Rice

stocks

a

farm

ago.

year

likely to be re¬
duced during the current year. In
1957-58
the
price received for
rice averaged 34 cents above the

mortgage debc.

r

This year

production next year.
net income is running

some

20%

Basic Problems

1957, and the highest in 5
As the economy continues
recover from the recent reces¬

tion

above

will

agricultural

low

Increased

consumer

income

stronger domestic demand
food
and
most
other farm

and

a

for

products; slightly reduced foreign
takings of U. S. farm products
fiscal

current

the

in

toes
into

outlook for 1959 are the prospects

year

com¬

are

shall

the

organize

remarks

my

which

included

Prices
well

in

of

are

in

as

cattle

will

Prices

1959.

the

same

follows:
hold

up

of

considerably

stable.

Consumption of
in

commercial

milk

outlets

products
in

1959

probably will be more nearly in
balance
with
milk
production
than in any of the past six years.
A

slight increase in milk output
and
in
consumption
are
both

probable next

year.

8 million

in

the

first

few months

of

than in the same months of 1958.

million

bales

do¬

and

the

8.7

million

bales

car¬

into the current market¬

ing year.

*

Mill use of apparel wool, after
declining since mid-1956 turned
upward in early 1958, and with a
further expansion of economic ac¬
tivity in prospect, consumption in
1959 will likely be up from 1958.

Cigarette
continue

output is likely to
upward trend as a

its

increase in population

an

of

smoking age and additional
smokers among women. The utili¬
zation of tobacco, which turned
in

upwards

is

1957-58,

likely to

by Mr. Wells before the
7th National Agricultural
Credit Con¬
ference sponsored by American Bankers
Association's
Agricultural
Commission,

Omaha, Neb.




some

problems

the

associated
of

"eclonomies

new

gcale **

general

cost

structure

With

economic

activity rising,
a stronger demand for
pulpwood,
veneer
logs, and sawlogs is in
prospect for 1959.
The

downtrend

supplies

is

in

stores

naval

expected

to

continue

in 1958-59.
a

With production down
more than
domestic dis¬

little

and

appearance

likely

to

1958-59 than
'Hin*

-

i

'

exports, prices
average higher in

last
#

year.
4

*

•»

j,

#

a

4

Cash Receipts Outlook
In

summary, cash receipts from

marketings should be well
maintained in 1959 as compared
1958.

Somewhat

Farmers

must

not

only

pay higher per-unit cost rates, but
current technical advances are also

such

by increasing the scale of opera¬
tions—that
is,
an
able farmer
himself with the

ma¬

chinery and management skills to
handle

increased

an

business

size

of

the

fact

acreage

or

illustrated by
about 40% of the

that

as

farmland transfers last year were
for purposes of farm enlargement.

surpluses
with

likely

are

for

us

to

time.

some

recognize that this is
a difficult continuing problem for
which there is apparently no immediate single painless, costless,
we

solution.

final

This

mind

Chappell Aids

is

Drive for Library

sound

a

^

1}

rrU

£

^

,

ley, Chairman
of

drive.

the

Mr.

Chap¬

Vice

Presi¬

-

dent

First

of

Boston Corpowill

ration,
enlist
of

the

raising

the

for

000

Central Reference
Library at Fifth

W.

B.

Chappell

Ave. and 42nd
Street.

the

in

$500,-

leaders-of

to

and

brokers

also

attention

aid

investment

bankers

should

call

is

who

pell,

considering
what should be done., Perhaps I
fact that there is

*c library in

1959 appeal for funds, it has
keen announced by Morris Had-

of

for

,

n3??®

i

frame

is

He

of

one

business

a

of

£roup

and ^industry

a

to

of

farmers

must

increas¬

ingly use purchased rather than
farm-produced
resources.
Fur¬
ther, the cost of handling, proc¬
essing, and selling food and tex¬
tile items is also
of

course

climbing, which
increased

means

costs

sumer

and

sales

con¬

resistance.

All of this adds to the farm "cost-

price squeeze."

Meanwhile,
quainted

we

with

all

are

ac¬

the

speed-up in
agricultural technology that has
occurred
in
recent
years.
Sig¬
nificant
economies
in
per-unit
costs of production are
possible
not only in commercial farming

lower

the assembling, proc¬
essing, and selling industries han¬

dling

farm

products.

In

many

however, the new technol¬
offers opportunity to cut costs

ogy

only

size or scale of operations
expands.
Increasing the size or
as

scale

of

operations

not

farm

our

a

problem

is

of balancing rates
growth-that is, of . trying to

of
see

that

one

the

rates

increase

of

in

farm output are about in line with
the rates of increase- in demand,

contract

as

taking into account
problems, we mustj also
policies which will assure
adequate food for the American

culture and

our

much

amenable

more

in

management

an

to

sensible

^expanding

where the population
per capita standard of living
both
increasing, than they

economy,

and
are

would

be

were

Economic

this not the

case.

growth greatly facili¬
adjustment process: it

the

tates

process

wholly
places

new
an

of

adjusting

technology

to

which

increased premium

quality of product; size of

a

on

opera¬

do

not

"public" insti-

tution only in the sense that it is
;freely ?p<rn t0
Public; the sole

fuPPort.-it receives from the city
is

for maintenance of the huildiiig.
Library

The

public-spirited

was

created

individuals

by

more

than

Wainwright & Ramsey
Consultants on Hage
Municipal Bond Issue
Wainwright & Ramsey Inc., 70

iwwwiBWf

not

T. F. Sullen Jr. Now

With Gruntal & Co.

__

.

,

New

York

City, members of the
Stock

York

New

Exchange,

an-

that Theodore F. Bullen

nounced

is now associated with the firm as

of

manager
.

the

Investment

no„^tmonf

search
was

Department.

-nir

Re-

~

Mr.

„

Bullen

formerly manager of the

search

department

Baker

&

Co.

for

re-

Amott,

Incorporated

and

prior thereto he was with Goldman
^achs &
man, bacns Rr

Co
uo.

it

was

announced

Schempp,

President

of

by

Wm.

the

Dis-

trict's Board of Commissioners,
Construction bids for the Wana-

Dam, sister to and 18 miles

pum

upstream from the Priest Rapids
Dam, will be let early in the summer and fjnancing through a revenue

bond

in the

will follow

issue

summer or

late

early in the fall

this year.
The Board of Commissioners of
PUD #2 Grant County, Washington, is comprised of Mr. Schempp,

President; Paul Neihart, Secre¬
tary, and Geo. Schuster, Commis¬

Named Director

sioner.
Duncan

Miller,

of

City, has been elected
Electronic

of

Inc., it

dling and marketing system is in today.
the

many
a

only hotter markets
^ree!'„J?
for most products but also new ants on municipal finance, have
been retained
as
consultants to
employment
opportunities
for
the Public Utility District #2 of
both capital and labor.
Grant County, Washington, rela¬
tive to the $200,000,000 financing
for the construction and operation
of the Wanapum Dam (Wanapum
Development of the Priest Rapids
Hydro-Electric
Project
on
the
Columbia River in Washington),
Gruntal & Co., 25 Broad Street,

farming, agri¬

whole food han¬

is

longer-run considerations further use and depend on its resources
complicates the farm adjustment will come forward to help," said
problem. But I assure , you that Mr. Chappell.
our
shorter-run
problems
are
.

only has

In short, American agri¬

it

have

market, but also leads into such
fields

that

know

shortrun

to do with the size of the
farm, of
the
processing unit, or the retail

business integration, and business

-research. center,

a hundred years ago, and it
has been continued and enabled
to grow through the years by in¬
come from endowments and gifts,
people as our population grows, "It is hoped now, when rising
recognizing that the rate of popu- costs are ever more rapidly goblation growth may vary materially bling up the Reference Library's
from
time to time. I recognize available funds, that many more
that
the
introduction
of
these organizations and individuals who

In addition to

cases,

re¬

ceipts for; hogs and wheat are
likely to be offset by larger re¬
ceipts from other commodities.

that

we

expanding economy

an

essentially

means

that

mergers.

farm
with

farmers.

but also in

increase further in 1958-59.

'

•An address

The

(2).
with

nation's

bales, the carryover into
likely to be a little

over

1959

Also, egg supplies will be larger

earlier.

year

is

1959-60

are

Supplies of poultry meat will
be larger and broiler prices lower

a

mestic mill consumption of around

result of

hogs will
during the
year and be much lower next fall
than
now.
Prices of sheep and
lambs will probably remain fairly
decline

of

4

around

"Commodity Highlights"

are

report. These

for

us

are:

supply of cotton in 1958-59 have had more effect on farmers'
is expected to total close to 20 Vz
costs over the last few years than
million
teles.
With
exports of Ion prices of
products sold by

below

I

with

These

(1) The problems of the "infla¬
tionary creep."

The

ried

and

continue

time ahead.

up

those

again aided by extensive govern¬
ment
programs;
and
continued
heavy supplies of farm products
generally, with wheat and feed
grain supplies especially burden¬

around these summary statements

also

will be available
at
least
(3) The problem of "surplus"
spring, and prices to farmers farm supplies.
expected to continue well be¬
The continuing increases in the

pared with 1957-58, with exports

some."

as¬

materially larger than the 1949-56
average. Heavy supplies of pota¬

provides about one-third of
people's total net income.

the

same,

of canned vegetables
to mid-1959 will be
little larger than last season and

a

"Underlying

the

Supplies

to

sion,
the
income
which
farm
people get from nonfarm sources
should increase. Off-farm income

about

be

available

for:

the last two

ual farmer's desire to reduce costs

and

The main burden of this discus¬

suming average weather.

years.

now

over

chief

has to do with
change and the individ-

often finds

Wm.

to rise.

the

years

technical

do live in

program
pay¬
ments after 1958 and prospects for

farm

of

call attention to the fact that

_

are

reserve

acreage

three

or

,

factor in the
that
per-acre

one

for this

reasons

impor¬
skill;
;.
'

tendency noW working
to help the privately
look not only at possible ways supported library balance its
controlling acreages or produc- budget.
!
' i
tion, an approach that is not only y The goal of the current appeal
difficult but sometimes has disrepresents the amount that must
astrous side effects, but also to
j-j,e added to the institution's inlook at possible ways and means
eome-" from
endowment
during
of .constructively using the
;sur- the coming year if it is to meet
pluses
themselves. -Such, Suses /operating expenses and maintain
The carryover of wheat at the the value of farm land and esti¬ certainly contribute, far more
mm Ugh Standard of service that
end of this marketing year next mated
increase
due
to v: larger maintaining farm markets and my
j^woh it an international repuJuly
may
be over 400-million livestock and crop
inventories, creasmg
nonfarm
income
than tdtibh/
■■'/
bushels higher than in July, 1958 while the increase in liabilities is would be the case were the com¬
/ Mr. Chappell pointed out that,
and
the
largest in history.
A about equally divided between modities not produced. ':
;
while
most
New
Yorkers
are
further
increase
may
occur
in increase in nonrecource Commod¬
aware of the incalculable advan¬
Balanced Rates of Growth
1959-60. The supply of rye totals ity Credit loans and increase in
tage of having access to this great
47.2-million
bushels
compared conventional commercial credit or
Finally, I want to once again ldSe
rwvmg ctccej* iu

sion has been the current agri¬
support rate of $4.72 per cwt. This cultural situation and outlook for
year it is again expected to be
1959.
Meanwhile, there are some
well above the support rate an¬ basic
underlying problems which
a further slight rise in production
nounced at $4.48. #,
we
also need to keep in mind,
expenses could well bring a re¬
Production of citrus fruits in problems which have much to do
duction
of
some
5 to
10% in
realized net farm income, depend¬ 1959-60 will probably be up from with the current agricultural sit¬
uation
and
which are likely to
ing largely on the level of crop this year; deciduous fruit produc¬

of

elimination

the

marketings,

that

However,

Agriculture for Jan. 1,
1959, as compared with Jan. 1,
Supplies of all
oilseeds and 1958.
peanuts are abundant, and farm
The estimated value of all agri¬
prices will likely average near
cultural
assets,
including
the
support in the 1958-59 marketing
farmers' financial assets, will run
year but less than a year earlier.
aoout $200-billion Jan. 1, 1959, as
The total feed supply is 10%
compared to $186.7 billion a year
larger than in 1957-58. Feed grain earlier.
Liabilities against these
prices are expected to average a assets are estimated at $22.6 bil¬
little lower in
1958-59 than in lion for Jan.
1, 1959, as against
1957-58, reflecting both the larger $20.2 billion a year earlier.
The
production
and
slightly
lower estimated increase in assets/ is
government price supports.
about
equally divided^. between
likely to be lower.

believe

I

most

values continue

farmland

Farm

word about the estimated Balance

Sheet

perhaps

interesting
situation is

continue

Agricultural Balance Sheet

prices are

One

;

.

.

has

as

and,

•

Oris

may

years,

in

tion;

Thursday, February 12, 1959

.

<

at

averaging

the

of

Program.

likely bring some
production ex¬
penses next year. Thus, some re¬
duction in aggregate or total real¬
increase

billion increase
in liabilities. He reviews some basic underlying problems;
notes continuing rise in per-acre farmland values; believes
farm surpluses will remain for some time; and calls attention
to the fact that rising population will require balanced rate of
farm production growth.
until late summer, and

by

offset

be

other costs will

estimated increase in Jan. 1, 1959, agricul¬

paragraphs of our

will

Conservation
Further, in¬
creasing interest, tax, wage, and
expansion

tural assets of $13.3 billion as against $2.4

The opening

accounted for $700-milSome part of

payments.

reduction

this

^

Agricultural marketing official lists 1959 outlook commodity
by commodity and surmises cash receipts from farm market¬
ings as a whole should hold well in 1959 compared to 1958.
And, despite certain income decreases, farmers' total realized
net income should fare as well this year as in the year past.
Mr. Wells reports

farm

this year
lion cash

Administrator, Agricultural Marketing Service
U. S. Department of

tant of all management

.

.

dent
w

firm

was

New
a

York

Director

Lee

officially announced

Broad

Mr. Miller is a Vice-Presi-

of
-

of

the
T

investment

Laird

p,

&

banking

Company,

Cor—

poration, of Wilmington, Del., and
New York.

With Lee Higginson

Communications,

Higginson Corporation, 20
Street, New York City,

members of the New York Stock

Exchange, have announced that
Barry E. Thors has become
ciatod

with

the

firm

as

a

assorosis-

tered representative in the New
York office.
.

Volume

189

Number 5820

The Commercial and Financial Chronicle

...

Substantiating Upturn Evidence Reported by
Purchasing Experts

labor costs.

■

■

erate

that

there

a

is

from the uncomfortable recession of

recovery

President

fidence that

growth in his country and
industrial exports

even

a

year

Like other countries of the free

world, Canada has been definitely

^ affected by the international re¬
cession which has depressed most
world trading
/
J
:
" ;

ago.

Again this month, however, the consensus does not reilect any
•since
late
emphatic optimism in most industries. Mere new orders are being
•1957. We have
received

by

N.

A.

46% ; of the purchasing agents who comprise the
Business
Survey
Committee, whose Chairman is
Cgden, Vice-President, The Detroit Edison Company,
-Detroit, Mich., compared with 32% in December, while 39% are
:in an unchanged position.
There is a reduction to 15% from the
.'21% who listed fewer new orders a month ago. J- L : • v/y.
•

A.

P.

■»'

production fig¬
month, with 42% of the committee reporting on the
up side against 35% in December. The number of those indicating
less production is reduced to 13%, from 19% last month.

been

'in

of

newal

of

A

nomic growth.;

Most

or

directed toward

y

special

;

question

together with what roles automation and other labor-saving de¬
vices might play toward holding labor costs down. Of those mem¬
bers responding, 41% think that employment will rise, 44% say no

change, with 8% assuming less employment.

r

There

i
v
"

63% who

are

^believe automation will assist materially in holding down labor
/ costs. In this area, many committee members warn, "Investigate

carefully to be

the end results will justify the costs." h

sure

%

;"•!

>

potential rather than
advances

in

'

against 27%

a

month

changed, and 8%

the imposition of any strong or general

over

current

the

are

levels.

Just

28%'

point to increases;
64% who show prices un¬
items at lower prices than

ago.
There are.
purchasing some

n

G.

Diefenbaker

with

g,

starts

substantially

above

level in any preceding year.

the
Con-

remained strong
December, a broadening
general improvement in industry
was discernible.
Inventory liqui¬
dation appeared to have ended,
spending

sumer

and

and

in

more

and

last month.

inventories

<

calling forth
Complete

new

reason

to. look

for

better

improving

conditions

internally

and general international recovery.

business
the

for

the

in

President

should

Southern

past 30

Governor

as

of

years.

and

the

reluctance

considerable

a

to

add

•

their
the

King

Canada — The
will hold

April

Hotel.

Edward

&

■

ftA&BOR

BAY

dinner

annual

Lascelles,

*

10

has

at

formed

been

with

inventories.

willingness to increase their inventories.

a

There

are

27%

who

report that they are still reducing stocks on hand.

John

in

gage

ficers

a

are

Corpn. Ltd., is in charge of dinner

President,

arrangements.

Secretary-Treasurer.

and

Shari

National Sugar Refining Reports

Higher Sales and Earnings for 1958

Although our members report improvement in general busi¬
conditions, particularly in the steel and automotive areas,

their

statistics indicate

■«

.

•

The National Sugar Refining
Company increased its sales,

betterment in the employment
gain in their working force, identical with December, there are 14% of our reporters who show a
decrease, compared with 11% showing a decrease last month.
While most steel products and passenger car outputs are reported
optimistically, these are counterbalanced by the seasonally poor
performance in the road building and heavy construction indus¬

picture.

tries.

*

no

overall

While 22% indicate

'

•

.

a

earnings and net worth in 1958, as
indicated in the

highlights from the
Report presented below.
However, the special dividend was
held to $.25 per share, so that a
greater portion of earnings could be
Annual

•

Buying Policy
The percentages

of change are so small from month
only by plotting the figures for the last 8 months is
gradual lengthening of lead time in production materials
ital expenditures apparent.
There has been no change
supplies during this 8-month period.

to month

that
•

t.

—Per Cent

,

,

the

\

Production

-

Mouth

in

Materials

Reporting

00 Days

,

00 Days

35

22

49

25

2

2

10

8

16

25

41

11

31

33

19

6

26
11

__

32

46

21

5

2

13

23

47

20

during 1958 in plant improve¬
and expansion to provide
and homemakers. Capital expendi¬

5

better service to both industrial customers
tures for the

plant improvement program for the past ten years now total
$18,233,820, with plant property carried on the books at $27,037,298.

December

Materials

MRO

Supplies
Capital Expenditure

6

,

A

copy

of the Annual Report giving details of operations is available

upon request.

•

•

..

780

to I Yr.

8

Capital Expenditures

t

and debt-retirement programs.
The Company invested $1,884,-

MRO

<> Mos.

SO Days

assure

modernization

ment

MRO Supplies

Production

continuance of the

and cap¬

Hand to

January

retained in the business to

very

Specific Commodity Changes
While prices generally are quite stable, there are a number
spotty price changes, both up and down. Some early inven¬
torying of special steel alloys and sheets in anticipation of a

STATISTICAL

of

steel strike this Summer is

On

zinc,

the

rope,

up

side

causing minor shortages of these items.

lumber,

.wheels.

HIGHLIGHTS
Net

Net

Sales

Copper, stainless steel bars, scrap, tin,
plywood, coal, oil, bearings and grinding

Earnings

are:

Earnings

(per share)

Dividends

Net Worth

(per share)

1954

alloys and sheets, helium and

Public Inv. Co. Formed
KEW GARDENS,-N. Y.—Public

Investors

Company

has

been

formed with offices at 123-35 82nd
Road

to

business.

engage

Partners

Breslaw and
Both

were

Planning

in

Bertha

securities

a

are

Bernard J.

G.

Plan Portfolios.




$3.96

$2.50

$33,114,037

$1,850,929

$3.25

$2.50

$33,542,928

1956

$J72,071,752

$2,558,258

$3.86

$2.50

$37,306,076

$187,673,950

$2,191,066

$3.30

$2.50

$37,838,097

$194,381,199

$2,321,909

$3.50

$2.25

$38,666,866

Form S. Schramm Co.
S. Schramm & Co., Inc. has been
formed

with

offices

at

143

West

29th Street, New York City, to en¬
gage

ficers

in

a

are

Breslaw.

formerly with Investors
Corporation
and
Sire

$2,254,631

$144,856,086

1958

In short supply are: Some steel

glass (temporarily, due to strike).

$140,714,410

1955

1957

On the down side are: Lead, aluminum, vegetable
oils, phthalic
anhydride, naphthalene and phthalate esters.

securities business.

Sidney

M.

President;

Leonard R.

Secretary

and

THE

NATIONAL

Of¬

Schramm,
Schramm,

Treasurer;

and

Sarah Schramm, Vice-President.

SUGAR

REFINING COMPANY

100 Wall Street, New
MANUFACTURERS

OF

JACK

FROST

•

QUAKER

York 5, N. Y.
•

GODCHAUX

•

at
en¬

securities business. Of¬
Lawrence Solverman,

Employment
ness

offices

10043 East Broadview Drive to

Securities

Dominion

ISLANDS, Fla.
Corporation

Securities

—Harbor

Traders

Bond

■

Form Harbor Securities

Annual Dinner
Toronto

j

.

their

to

Vice-

*

Hawaii.

Toronto Bond Traders

the "lagging" business change indicators,
is outdoing itself in
running true to form. Our survey reporters, again this month,

indicate

California

He served

Investment

"Purchased goods inventories." one of the more important of

While the majority of businessmen acknowledge a reversal from
the recessionary trend, only 24% of our committee members show

Hughes

National

'

t

Mr.

deleted

TORONTO,

conditions in 1959 in keeping with

business.

the

was

has not yet

to

William S. Hughes

stment

Bankers Association of America,
by members outside
and is also a former Chairman of
State; they may use instead
District
No.
2
of
the
National
the appropriate state transfer tax
Association of Securities Dealers,
laws.
embracing California, Nevada and
be

production.

recovery

law

tax

n v e

en¬

in the

securities

transfer

Reference

State

York

are

has been active in the investment

Internal

the

of

Code.

Revenue

the full effect

more

been achieved but Canadians have

good

i

or-

tion

mem¬

gaged

pre¬

connection

in

members

provisions

New

of continued market demand

Commodity Prices

In. the pricing category, there seem to be no extreme pressures,
either upward or downward. The survey reports this month re¬
flect continued uncertainty and concern over the inflationary

r

tax
John

housebuild-

for the month was
employment for 1959;

measurement of average

a

.

by

of

Bond

g a n i z a

bers

with the stock and bond

in

to reduce their stocks,

double-barrelled

The

used

&

Vice-

Club

need

an

whose

tax form has been

new

Bond

direc-

Club is

pared by the National Association
of Securities Dealers, Inc. to be

spec-

Commodity prices are under no great pressures, either way,
%tacular has
jwith most items available in completely adequate supply. In view.,
been the sharp
of plentiful goods, 76% of the committee members continue either
"increase
to contain

Club

demand.

NASD Members

re¬
eco¬

the

Company,

a n n o u

New Tax Form for

un¬

of

Presi¬

'»tors. The

to

elected

following the
organization
meeting of

quickens,

to increased external

mistakable,

signs

^

and

the economy of the free

sparked by the
revival of the United Stjates, this
sector too is starting to respond

pleased

note the

for the

as

Cal.—William

Wagenseller

was

dent, Mark
Davids, of
Lester, Ryons

important sector of our
economy that remains to be re¬
vitalized is that producing indus¬
trial materials for export.
How¬
ever,

of

Angeles,

Club

recent

months

The better new-order status ties in with the

i

Los

up.

One

world

•'-• therefore

»Chester F.

ures

expresses con¬

will pick

■%.■««"

'»

ANGELES,

Hughes,
Durst,
Inc.,

renewal of economic

basis for expecting a mod-:

reasonable

LOS

Canada's Prime Minister summarizes "unmistakable signs" of

The January reports of the executives of the National Asso¬
ciation of Purchasing Agents substantiate the opinions expressed
last month

Prime Minister of Canada

-

Angeles Bond Club

S.

Most agents polled continue to contain or to reduce their
stocks and believe that automation will definitely hold down

'

^

.

21

Elects Wm. S. Hughes

By RT. HON. JOHN G. DIEFENBAKER

sion.

■V

Los

The Canadian Economic Outlook

Purchasing executives latest report states there is a reason
able basis for expecting a moderate recovery from the reces-

,,

r

(777)

ARBUCKLE'S

SUGAR

Silverman,

The Commercial and Financial Chronicle

(778)

22

Disposable personal income per
family has tripled.
; > *

Social

Responsibility Acceptance
a Corporate Must Today

Is

American families have become

T h

Insurance
Insurance Company,

Chairman, Institute of Life

President, New England Mutual Life
Boston, Mass.

life

the

In

to dealing with

nomic and political,
(2)
Economically,

statistics, for, as we all.
know, some of the decisions our
ong-range

actuaries

and

and

today

more

and more

not be

same

the

o.

had

we are now.

.

„

„

a

tic

The

spme

be

can

has

supplement to
ating concepts.

become

new

a

traditional

oper-

Finn's Social Responsibility

Objective
now

generally acknowl¬
edged in almost all areas of our
economy that a company's social

'?.!S?in£bil!ly JL,4.a"
irollary to profit

making

or

aim

and

competition. The business
institution which

«

ignores

ihis will not piosper for long and
o

not

ay

The

v

ceptance

of

represents
he

social

ac¬

greatest of

changes that have

in

business

past

become

atomic power
on

breadwinner*

second

a

was

still

except

paper;

in

a

begun;

nation

ciinecj

t,0

a

our

business, for it is closely

-clated to the Institute's program.
nn.

'

...

oouu? ° *? s

w

rroetiition

anH

h\ah

a-

we

own

Insurance's

y

Growth

these 20 years,
naup

life

insurance in the U. S. nearly fiver

now

Fear

where do

of

terrible

keeps

a

were

we

in-

of

we

~^«...

any

war

ever

divided world

on

Iwln fL™

.

-

u.

-

u

:social-

the

ecoiTomicStchanees^we'mentioned
,

Zt

hnt

ftp

n

ereatlv

the

Take

nomic
nomic

stains
status

of
01

W
enhanced

eco-

for
xor

women

women,

ex

ex-

ample: This has resulted in a
startling increase m ownership of
hfe insurance by women lrom a

j

ouLstaridinff
ram

•is

20

T ifp

"reanizatinn
.

matenally
years
by the
TnyeaiS
irf-6
hac
nnlfL !!
OM

past
of

niihlip

rpiatinn

since us inception
te
its inception

on

service

years

nvn

and
and

goodwill

i

nervous

*

,,

.

into

,

the

I'm
1 m

in
,

with

rder. Let

"id

s

is

billion,

aspects of the

family'income
ily

plan and

plan policies and more re¬
the widening interest in
premium rates which give recog¬
nition to the relatively longer life
span

has

unprecedented

been

a

change

'An

address
the

'^-titute

by

20th

of

Life

Mr.

Annual

econ-

period

Meeting

New




a nee.

.

wi(h

this.,srowing

awareness

the

following

an

Board.
Other
officers
McClarty Harbison,
Harbison & Henderson, as Vice-

erning

elected

were

chairman;
Harry

Z.

Gilbert
and
Dean Witter

A.
R.
Johnston,

& Co., Assistant Vice-Presidents;
P.',J. Shropshire, Mitchum, Jones...

brought by'the new andinrlncfrt* & TVTr PpjiiI whn will
greatly
Co.*. Treasurer.
cfnturp nf-nnv

; l/g*.
pnnfiniip ta
Mr. Paul, who will continue to>

enhanced stature of our industry.

The: stewardship of the pooled serve as Administrative Consult-/
funds of millions of families is ant of the Exchange, has been
in our harids- Eot" iarge numbers President since 1946, after having
Qf these families the lile lnsui.ance

cfj

t

Drovide is

the

gl<£e^]l0f ^re f^ancial

onlv

served
^ince

Executive

as

Secretary,

He became

1934

the

of

security

member

a

A^eles ExchmX

Los

hi

"!1K t0 tuture unancial security, ol liie Los Angeles Excnange ih,

we

as

have

tried

to

effect of the

force

work

and

give growing and
improved service
to our client
families year after year in the

President,

has

President

since

in

ognize

will

sure we

rec¬

responsibilities in this

our

field in the future.

en¬

larged income which has more
than tripled the average amount
of life insurance owned per family and more than tripled the

size of the ordinary pol-

average

Fringe'

growth/* devel¬

benefit

accounts for

insurance

a

in

large
force

1951.

was

Vice-President

started

He

Vice-

as

and

1947,

Executive

made

his

career

with the Exchange

in March, 1929,
following graduation from UCLA
when

Good Business Citizenship

served

be

became

statistical

a

clerk

in

the

department of

the Los

growth of effort in the
interest, this development
of a high level of good business
citizenship has come about, I belitve, because our public relations

Angeles Curb Exchange.

Follow-

elforts have

and

This

public

not

tunistic

been

channeled

haphazard,

a

The
x

program.
^lugxcun.

nuuaui:

on

a

oppor-

best

evi-

ing the merger of the Curb and
Stock
Exchange,
he was made

,

Manager of the Clearing House
and later was in charge of listing
-

statistics

and

was

Assistant

Secretary from 1936 to 1940 when
became Assistant to the Vice-

he

President of Production of Vultee

dence of this belief is to review Aircraft, Inc.
the printed proceedings of our

career

women

form

imnnHanf

sn

an important segment of our
economy; and with the advent of

thinking and planning is gradually

global in nature

nciiuic

by insured pension plans have increased seven-fold.
,

T

In most

.

large v number of persons

'

^

lr own homes

.

oisnmuiii vmanges

has affected life

respects, however, these
are
material changes

and investment

conditions

from those of two decades earlier

social

and

economic

atmosphere

of the business world.
Hidden in
each of these observations are

e^>va
r

of

York

Chairman,

and»
couise, gioup health iniq annual mno+inoc
«
surance plans.
surance plans.
I would like to give a few facts
Form Shipper & Finney
Group life insurance has in- that will describe the evolution
FLORENCE, Ala.—Shipper and
television, automation, atomic creased 12-fold in the past 20 of our public relations philosophy: Finney, Inc., has been formed with
!l°-W,e- and moon rockets, our years, while individuals covered
(l) The usefulness of the agent, offices at 212 East Alabama Street

good repute;

.

example, we

see

that:

Women have achieved full statin business as well as at home,

made

of

President, has been announced
William
II.
Jones,
Division

organization meeting of the Gov¬

prrhanpprl

of

one

by

Board

of the responsibility and challenge Roger Hopkins, Hopkins, Harbachr

portion

affecting

Anderson

Insurance,

and

and

ure

1cfore

insurance

now

clearly:

This

fife

w^t it^l^ ab^ l^in^

as

past, so also I'm

of women.

insurance agency

departments.
Mortgage insurance to assure the
family clear title to their home in
for

counts

protection.
ments

in

a

home

ac-

owner

of
investmortgages have

sizable

Life

volume

company

j

(1)

from

•,

theirs responsibility does not di-«^ ApnJ,
specialist,
$65finish with time but increases;>lrom-1928 ^until H946-_when he
the fvery year and will continue to assumed luj^time administrative
the fam- tions consciousness. Just
aJe}®: duii!S ZlSit the newly elected
Mr. Phelan,

;,my.welf as at our business furtherr more significant facts grown from less than $6 billion
i.1?..r^^r0SiPec^' severa^ facts which account in part for this up- in 1939 to more than $37 billion.
our

stand

..M

vvants

Phelan

of

also the creation

of and reflect the vastly different event of death of the

also in

look then at the social

political

I

llGlQ

War II,

is

degree

any

accuracy, a gisnce oack

th,»

sound, broad philosophic approach

.

future

any twentieth ann.versaiy occasion. But in order lo

forecast

nf

oped almost entirely since World

the

appropriate at

c

fii*

icy bought.

Lists Significant Changes
.

look

™ ™ f J™ 2JJ
SHci OUl intO tilC

and

a
manpower surplus; the birth rate

ahead.
|

a

and

UUSIUGSS

rank

more

known

time in mafly ^ms we may face

^ oan .look t°rward to becoming more
achieving greater success, pub- than ienfatinnief

lie

fhp

P.

Thomas

,

relatively small figure to
present total of more than

'

the

years,

from top managemenfdown
oirrmpiT

Paul

has come a sobering recognition & Templeton, Secretary; jmd D.:
trpmpnHniis'

this

of

Then consider the

u" boom in history; inflation is

istitute

the

of

20

t
1

new

^
Much

increased

another

than

stand

1959?

Wld° llave

^

'

efforts

the

over

rmrr-

have i,lcrease neaidy f°u.£""
~.

the

to

insurance; Iristi4ute

nearlv

inrrpasp

f.0id; aggregate ownership of life
i

G.

„•.

the election of Thomas P. Phelan,

has been our acceptance of it.
Thanks

In

;.«pts

W.

widespread

otfr?hiifpd tndifctr-y r°^y c.an be of our major economic concerns;
—
•—
rS*
ir^?}les F'}*Q although under close government through group life insurance, penbusiness is generally in sl°? P'ans, salary savings plans
t\er

lo.pg,ag0.

is high as is the income level; we
en3°yed the biggest business

+,

i^iranpp

plans for

millions,of families. And yet, considered purely, as a sales medium,
we xnighthave chosen to abandon

not cently

isolationists,

be

threshold

the

York

had

automation

as

formula

New

restaurants,

20 years. It has special significance
lor

-

Mme

m

manpower

shortage; the birth
the income level

was one of our major economic
problems;
the great depression
was
barely behind us; business
was
operating under a cloud of
public misunderstanding, ill-will
and government scrutiny; women
were
home bodies except when
necessity
dictated
they
should

oc¬

the

over

/

p™msee'adir°ct relS -iitems
Neverttefes, Jhese^ illustrations
{jonshiT to
of
the
basic*
howJ ta.r we- bave
!^r^fhilSness
move^ "E'.this. road of social retrends
our
business.,
sponsibilily and how

hv

also relatively low; deflation

was

responsibility

of the

one

many

curred

corporate

ctort

effective March 1, and

represent

social and; ecopoimc-itbem

lnto

mu

a

,

/

have a certain competitive
value, but beyond that they
one r of
our
important
public services;' since they play a

our

^

about to turn

was

_

Admittedly

brne to see most of these things vitalrole..in financial

.

And

to

institu-

lor example,
large percentage

a

they

for

this period the rise in assets was
three times the total built up in.
In 1939 America was walking the entire previous history of our.
into the shadow of history s great- Dusinera. These iare facts of which

being.f

survive.

transition

everv

_

sales

history,

telescoped

j-.vents that brought

radigl tor.enactment

1939.

relations

is

individual in

options,

apply to

now

of insurance in force.

^udying more clo^ly thespeclflc jjfe insurance six-fold. During

about

It

change

cFmiilrl

win

American business' as* surplus into a
whole, for since that time, pub- rate was low;

said

Settlement

grandfathers
or
fathers
would
have expected to live a full life-

'hem correctly we should start by f0]cl; and annual purchases of

grand-

our

beginning to take for granted the
institute's objectives and operations, I'm sure that many of these
objectives would have been conto

nnrropflv

fViowi

^hc days of
nlrents
f AUhough
in

and

-

,

The insurance contract itself re-"Exchange,
part our awareness of
our
biew
socialresponsibilities; 4-1

have

cveiy business and every institu
tion in our country. To evaluate

Keiiey Anderson

By Coast Exch. Division

flects. jn

does illustrate that in 20 years we

Life

husiness

ovprv

prior

percentage of adult high
graduates has jumped 80%."
Families
owning
their ;; own
homes have increased by 50%.V
Although this is a brief list, it

goodwill, service, efour ability to meet

tant effect on every

at

dtoed ti»

;>

■/

,

The

school

These facts have had an impor¬

our

oresent

back

75%.

;

usually brings.

which

business

Thomas Phelan Named

industrial

;

the family
self-suffi¬

which

our efforts for
ahead, .both insti-!.
fnaixrianaiiv.-. /
individually.,

the
20 years,
i- V:k«„n;, «wi
tutionally and

reached, age 65-and civic expansion.
Resignation of W. G. Paul as/<
has risen 30% while the number
' r V.
:-/C, President of the Los Angeles Diof senior
citizens has increased
Singles Out Settlement Contract
vision of the Pacific Coast Stock ,

relations: can

dislocations

the

mcriit TtiAm- this
result from

•

of vital impor-

be

shaping

in

tance

has

which

tion

tended to depend
on its job. At the

public

increase our

Conversely,

affect

which

should

This

insurance assets reflect the capital
birth/,TUnds back of several million jobs
^

public relations.

all

few.
life

a

^EquaHyr'^mportaht;''*'1 today's

*
.V ' '
have been

,

years

; added to life expectancy at
The shsrc of the totsl popiilci*'

fectiveness and

factors

; =i-

.

than six

More

Provided we exercise good

judgment,

come

of

pension plans has grown

by

half the total.

-

(3)

of age.

■some

cov-

persons

.

until

grand¬

children

while

programs,

accomplished.
and
groups
in their social and .- This: list, incomplete as. it is,
economic affairs-.
•//'■//''-y■}'■ '" I
also illustrates how life insurance

company's

our

...

r-

time, a closer relationship;
developed among individuals

has

operating
results

benefit

The fact that performance
the great fundamental base of

is

funds, it has become an
important source of financing for
many
of our new developments
creating turnpikes, shopping tenters,' industrial parks, gas pipe/ lines,
giant dams,- and " new jet

bulk

corpo¬

citizenship.

(10)

of institutional

sources

for good

need

The

(9)
rate

the

one of

J from less than a fourth to nearly aircraft to mention only

#

in

reflected
our

has

cient

nake

less

become

has

unit

underwriters

may

ered

the

ago,

years

the number of these

v

important

management.

life in-

capital

urban worker families have

fringe

virtually every area of our lives—
personal,
business, social, eco-

business

insurance

we're accustomed

20

As the

dustry has grown to be

has

"interurbia"

and

Unnke
of all

.

America's

of

doubled.

nearly

Corporate acceptance of "social

similar situations.

population

e

suburbs

responsibility" is said to be
an important corollary
to profit making and the meeting of
competition. In stating that this is one of the greatest business
changes in the past twenty years, the insurance head opines
that the firm "which ignores this will not prosper for long and
may not survive."
Proud of another change, Mr. Anderson
recounts the growth of the life insurance industry and its
paralleled stewardship growth. Explains how such socialeconomic changes as women's new economic status, increased
labor force and labor income, spread of fringe benefits and
home ownership, has aided and been aided by insurance industry

As a matter of fact, if we turned
to the investment side of the business, we would see a long list of

moving each year.
population has declined

one-third.

ANDERSON*

By O. KELLEY

bution made by life insurance.

000 persons
Farm

providing leadership to the companies
(8) The need for making pub¬
lic
relations
a
function of top

construction industry have benefiled from the important contri-

migratory with more than 30,000,-

1959

Thursday, February 12,

.

street

on

economic
surance

which

these

trends

has

social

meet.

benefited

Life
in

and

innew

AWefll' million new jobs have business and investment opportunew jobs have
Created, half Of them for nities from these developments,

been

women.

.

.

not
publicity ... absolute intellectual
integrity . . . courage and truth.
.

.

.

rn,

presenting

_

.

news,

,,

^act thai bigness is a
fact ot life in life insurance . . .
diaf the business can best serve
public through competition
'
•
• diat
n? vestl§e 0i
monopoly in the business.
,

(4) The fact that the life insuronce

wrhilf home buyers and the whole

i

to engage in a securities business.
Shipper is

Stanley E.

a

principal

of the firm.

/'
.

.

.

7;

Form

Systematic In v. Co.
Investors
with

Systematic

w

^as

V1U11„V

been

formed

Company
offices at

Washington Avenue, New
York City, to engage in a securi^es

business.

heimer is

a

Siegbert

Oppen-

principal of the firm.

public is many publics.

(5) -phe

need

for

greater

eo-

Here we can see the two-way operation with an understanding

Twenty million
,

need foj, dicseminating

The
„

facts

by government as one of these
publics.
(6) The introduction of advertising as an instrument of public

relations.

(7) The need

for

the

Institute

it

♦

c

'

, r

r*

Union bees. lnv. Uo.

MEMPHIS, Tenn.—Union Securities Investment Company is con-*
ducting a securities business from
offices at
1503
Union Avenue,.
A. D. McClellan is a principal of
the firm.

'

Volume

189

Number

5820

.

.

The Commercial and Financial Chronicle

.

23

(779)

Puerto Rican Bonds Awarded

Halsey, Stuart Group

Bank and Insurance Stocks

Offers Denver & Rio
Grande

By ARTHUR B. WALLACE

This Week

RELIANCE INSURANCE COMPANY
•

mutual, and it became
of

writers,

The Reliance Insurance

Association

affiliates

a

Fire Association, of Philadelphia.

Company had been

companies.

In

attained.

was

However, growth since then

most recent report,

and

two

other

It began

not until

was

1917

that

only mergers, but stock dividends and issues of rights. It is
licensed to do business in all states and in
Canada, and its agency
plant numbers some 8,250 representatives. In 1850 it became a

public

\

Considerable

The Commonwealth

of Puerto

improvement

Rico

bonds,

Jan.

on

due

1960

28

awarded $20,-

occurred

and,
;

.

.

a

pany.

changed.

j

Shown here, left to right: Roberto de Jesus Toro, Executive
Vice-President of Banco de Ponce; Jose R. Noguera (seated), Sec¬

when

The

expansion

it acquired

well

are

A break-down of its net

V.'

r

7

1

The current tug of war between
President Eisenhower, cast in the
role

Growth

water.

131.5%.

;

budget balancer, and the: tion. Mr. Eisenhower has become
Congressional spenders will call the
nation's
number -one
bond
re-def-

a

inition
what

salesman.
7

consti¬

tutes f'liberal-:

r

ism."

This

view

by

"i

■

i

.

l;

A

U.

business

•

and

with

1957

ratio

expense

was

for

the

assets

end

Common

Gov't 'Obligations™ 24.1

•'

>

Stocks

All

7.3

1957

%

.

36.1

Other Investments

17.7

in a
speech Jan. 30

lemma.

before

the

from

Hi

The

the

existing

Hatters at the

standards

San

Diego

upsurge

Club

in

Up to

San
S. Rukeyser

Merrylc

Cali¬

fornia.

the

stop

story springs

in

low

between

civilian

Russia

living

the

and

new

in science and technology.

for 41

now

the Bol¬

years

shevik dictators have been defer¬

ring the promised millennium in

.

to

inside

contradiction

erosion

Russia

the

on

ground that it

was

Reliance's capital consists
.

share.

per

The

present

its present approximate

have largely
income has been

years

of 761,600

shares of $10 par value
$2.20 annually; and at
selling price of 55 on the American Stock
dividend

on

insurance

an

O'Toole

T.

stock.

Bank, George Cham¬
President, has announced.
He is in charge of the press sec¬
tion of the bank's public relations
and advertising department.

pion,

Before
had

been

writer

staff

a

for r

H.,

"Newsweek"

radio

correspondent for i

Magazine, and news''
on

network.

a

New

England

...

Robert W. Hotchkiss

With Bardon Higgins ;
(Special to The Financial Chronicle)

Hotchkiss
with

Minn.—Robert

has

W.

associated

become

Bardon

Higgins Company,
Building.
Mr. Hotchkiss
formerly Vice-President of

Torrey
was

the

First

and

with

Bank

American

which

he

National

had

been

associated for many years.

Three With Daniel Reeves

better than average return
it has kept pace with the

main body of fire-casualty
stocks, on the theory that
has turned for the better after the serious losses in

the industry
underwriting

in the past three years.

(Special to The Financial Chronicle)

BEVERLY HILLS, Calif.—Betty
J.

Barber, Theodore

R. Litwiller

and Leon Rochlin have been added

'

of

the

dollar

through

legalized

larceny,

sometimes called infla¬
President Eisenhower may

tion,

be; repeating

an

historic service
his invasion of

as
significant as
Normandy. Ike is seeking

a

format

for sustainable prosperity through
a balanced budget and fiscal pru¬
dence.

To the extent he

he will be
come

of

life

and

and

as

are

interest

on

-a

of

regard

inflation
against

Adj.

Invest.

Und.

Income

Taxes

$62.34

$4.56

$3.08

am

second to

tion

of

the

and well

none

shares

I

in my admira¬
of outstanding

managed enterprises, but

I know that the national economy
will be disrupted unless there is
a

revival

of

demand

for

bonds.

For the first time in nearly a dec¬

ade, corporate bonds of the high¬
est grade were recently yielding
more

than

the

average

of

500

representative stocks.
'^Without the

ability to market
bonds, the Federal Government,
the states, the political subdivi¬
sions, including the local school
districts, would indeed be in hot




Low

staff

of

Daniel

South

398

Reeves

&

members

of

Drive,

Beverly

the

New

York

and

34

$6.52

$1.85

45%

9.00

3.34

8.87

1.85

58%

4.20

6.66

2.32

62

48%

93.00

—0.39

4.28

3.56

2.32

56V4

47%

102.14

2.19

4.35

5.86

2.41

67%

491/2

103 56

2.46

4.77

5.72

2.68

67

55%

1954

71.22

—1.46

2.74

1.08

1.96

$65

1955

77.50

—0.12

2.97

2.79

2.19

591/2

If 45%

71.69

—2.37

2.82

0.36

2.14

56%

40%

64.55

—3.96

2.85

—0.90

2.20

45

Pacific Coast Stock Exchanges.

42%

education.

2.90

30%

"The

dictators

find

that

they

Dictator¬
depends on having a docile
population of stooges and boobs.

The

new

and

creative

of educated

emergence

Russians

with

is

incon¬

indefinite

patience
living
condi¬

substandard

fancy schemes for mili¬
tary disengagement and disarma¬
ment

intended

are

Russian

to

budgetary

correct

situation

a

1951

—

—

1952

.

1953

.

.'

1956
1957

balanced

in

the

"At

by

undue

channels

best,

in

1954

weapons

the

Bolsheviks

self

education,

for

demand

for

government.

240,000
and

with the

2Old

aware

of

work.

Any

the

hidden

forces

Head Office:
26 BISHOPSGATE, LONDON,

E.C*1

London Branches:

stock,

and

for

30.77%

in stock

54 PARLIAMENT STREET, S.W.I

1953;

on

080,000 shares

to

the Government in: aden, kenya.

uganda, zanzibar a somali land protectorate

Branches in

capitalization.

:

*

INDIA, pakistan, ceylon, burma, kenya,
tanganyika, zanzibar, uganda,

aden, somaliland protectorate,

Balance

Sheet

—

December

ASSETS

31, 1957

LIABILITIES

Mortgage Loans.

$2,454,642
17,909

Capital
Surplus

Bonds Owned

20,300,161

Conting. Res.

Stocks

Owned..

51,799,496
2,839,260
4,320,917
169,761
2,162,310

Cash

northern and southern rhodesia*

....-

$7,616,000
27,119,397

Annual Comparison

1,318,825
$36,054,222

Losses

Taxes Accrued

Conting. Com.

Other Assetsi...

13,278,817
1,429,037
29,885,140
100,706
792,706

-

Adj. Expense.

Unearned

Prem.

Accts. Payable

Other Liabilities...

at

13 N. Y. CITY

225,000

Loss

2,298,828

BANK STOCKS
Bulletin

Available

Laird, Bisseil & Meeds
Members New York Stock Exchange

the

fluences
behind

in

in 1948; 340,00 shares 1.949 thru
701,000 in 1950 and 1957.

should be

thoughtless

appease¬

ment of dictators will tend

tard

on

world, in negotiations

Soviet Union,

in

shares

1955;

Int. Accrued

"The United States and the rest

of the free

paid

Agents' Balances

Ultimately the

domestic

a

democratic

dividend

TINew capitalization.

of

can

BANK LIMITED
Amalgamating National Bank of India Ltd.
« and
Grindlays Bank Ltd.

Bankers
tOn

Real Estate

enthusiasm

presages

of

38%

NATIONAL AND GRINDLAYS

1 'ISM*.

the

'

hope to gain time.
new

of

use

,

13 ST. JAMES'S SQUARE, S.W.I

^Adjusted for 13%
in

un¬

destruction.

accounts )r

High

79.97

annuities

thrift

Price Range

Dividend

88.10

.

productivity of the Russian people

and

After

1949

hedge by putting a
larger ratio of your saved dollars
into equities (stocks)
instead of
fixed dollar obligations
(bonds,
you

Net

Co.,

1948.™.

tions. The

to

Liq.
Val/f

the

.

Share*

1950

sistent

inconvenience

mere

which

illusion

oncoming

,

dictators

ship

mortgages.

sh^er

is

The

war.

" '
l
Ten-Year Statistical Record — Per

this type of argument, partly as a
result of the
new
emphasis on

with

threat

of

to

-

the end of their rope on

near

can't have it both ways.

in¬

A Sheer Illusion

*Tt

the

munitions

succeeds,

i
.f.

up

fixed

all

including pensioners,
living on the proceeds

insurance

bonds

on

of

groups,

those

and

savior

tooling

concentrate first on
and then on making

to

necessary

constructive
at

work

to

reform

underground

the Iron Curtain."

$84,064,456

$84,064,456

Members American

Stock Exchange

120 BROADWAY. NEW YORK 5,

re¬

Reliance

in¬

has

one

insurance companies.
100 years.
Since

for

of

the

longest

records

among

American

Payments have been made uninterruptedly
organization

218,000; stock $3,714,000.

the

total

cash

,

joining the bank in 1951

"Cosmopolitan"
Magazine,
re-:
porter and feature writer for the
"New
Hampshire News," Man- t

a

Pricewise,

been

has

is

rate

Exchange, the yield is about 4.31%,

are:

Of Chase Manhattan '

9.5

steady. In the 10 years ended Dec. 31, 1957, profits or losses on
security sales, together with the appreciation or depreciation of
asset values held
have netted Reliance $16,083,000,
or
at the
rate of
approximately $21.12 per share now outstanding.

for international

offering

O'Toole Press Officer

—1.2

beaver

pressure

the

Co.; McMaster Hutchinson &
Co,;, and Peters,. Writer & Christensen, Inc.

DULUTH,

underwriting results in recent
industry trends, while investment

by

&

2.8

Other Assets

Market Adjustment

Reliance's

secured

'

r
-'*■

"37

of

be

Pressprich & Co.; Freeman

commentator

the

of

as

%'

"

:

of

important rate

followed

licist,

trying

loss

ended

•

Other Bonds

consultant,

mist and pub-

"In

•

.

V'

--w

S.

break-down

4

W.

Chester, N.

Preferred Stocks

conferences is motivated by a de¬
sire to escape from a basic di¬

Diego,

decade

to

in

Associates
R.

12.2

99.6%.

•

-

.

14.4

2

stated: "The Soviet Union's eager-

Stanley Ru¬
keyser, econo¬

the

•

—

'Cash

Referring to the international*
stresses, Mr. Rukeyser, nationally
syndicated financial columnist,
and

~

6.2

_

is

115 box cars and 28
covered hopper cars, estimated to
cost not less than $2,920,000.

he

the

issue

The

109 flat cars;

Manhattan

7.1
in

combined

average
was

percentage

follows:

'J

The Soviet Dilemma

author

expressed
Merryle

was

V

of

premiums

Interstate Commerce Com¬

named Press Officer of The Chase

13.3

_

_

_

It is expected that there have been
enough
increases to make themselves felt from now on.

In trying to calm down the

rock 'e rolls enthusiasm for infla¬

of

for

The

Bodily Injury
Property Damage.

Auto

Auto Physical
Other

5.6

in

period

same

Auto

ac¬

subject to authorization

are

of the

Edward

%

4.6

4.25%,

Issuance and sale of the certifi¬

acquired in 1958.

was

to

priced

are

3.50%

from

cates

geographically.

8.9

Workmen's Compensation.

-

casualty end of the business

distributed

27.7

Inland Marine

by publicist. Warns against thought-

less appeasement of dictators.

,

other

%

Fire

President's efforts to calm down the "rock 'n rolls" enthusiasm

its

.'/ ...■/•

premium volume for 1957 follows:

;

Extended Coverage.™..
Ocean Marine

"Ike, the No. 1 Bond Salesman"—Rukeyser

the

•

control of Eureka Casualty

Another unit, Hoosier Casualty,

company's risks

retary of the Treasury of Puerto Rico; Dr. Rafael Pico, President
of the Government Development Bank for Puerto Rico; and E. A.
Bird, Executive Vice-President of Banco Credito.
' v

for inflation commended

in

•>,.

•-

Company
little later, General Casualty
Company, a Wisconsin comEureka was merged with the parent when the name was

through

1979, to a
banking group headed by the
Chase Manhattan Bank, J. P.
Morgan & Co., and Ira Haupt & Co., and including Banco Credito
y Ahorro Ponceno and Banco de Ponce.
'
"7 * J

added to

were

'categories.

certificates

to
cording to maturity.

rapid, and at the

more

for 1957, it stood at $7,616,000. There have been

multiple-line writer when casualty lines

The

yield

mission.

V

;
has been

inclusive.

company;

not

000,000

and
$2,-

Inc.

offered

5

certificates, maturing semi-annu¬
ally Sept. 1, 1959 to March 1, 1974,

of the units in the

one

1950* Reliance

capital of $50,000; and it

a

$1,000,000 mark

'

was

were

business with
the

of

as

Co.

&

Feb.

on

of Denver & Rio Granda
4% equipment trust

190,000

1812, this company

merged with Fire Association, the parent
early 1958 Association adopted the present title.

in

and

fleet

in

stock corporation in
1820, making it one

a

oldest insurance

our

associates

:

Equip. Tr. Clfs.

Stuart

Western RR.

At the time of its organization

i

Halsey,

*

Insurance Stocks

—

has

been $39,-

N. t

Telephone: BArclay 7-3500
Bell

Teletype—NY

1-1248-49

(L. A. Gibbs, Manager Trading Dept

Specialists in Bank Stocks

1

24

The Commercial and Financial Chronicle

(780)

tive

opportunity and if people cannot

Monetary and Fiscal Controls

do

or

To Meet Our Economic Goals

increase

to

credit

controls. that ;can. be

plentiful and less expensive;

more

cannot

it

make,

Would Savings Increase?

An industrial
a

well

as

academic economist,

as

,

our mone¬

water,

personal income tax system. To

tion

existing general monetary

of

flexible

personal income system utilizing

Income Tax Board for Stabilization."
the basic

a

"single-rate" system of taxes and

a

for

cure

weakness.

That

is,

its

is

progress

characterized

turn,

as

by

course

stimulate it

erratic

an

of

de¬
can¬

not be avoided

without

gov¬

in¬

ernment

tervention

the
It

in

ecbnomy.
is

in

perhaps
recognition

of

this

Dr. Ya-lun Chou
,

thesis that

a

condition of continu¬

high level of employment at

ous

stable prices is a Federal respon¬

sibility.

President,
troduction

Truman,

to

his

in

first

in¬

the

Economic

Report, submitted under the terms
of the Employment Act of 1946,
announced that the "job at hand
is to

to it that America is not

see

ravaged by recurring depressions
and
long periods of unemploy¬
ment, but that instead we build an
economy

so

fruitful,

progressive

so
can

count

that

dynamic,

so

citizen

each

opportunity and

upon

security for himself and his
family."
From his various pro¬
nouncements since 1052, President
Eisenhower seems to be in agree¬
ment with the purpose of using

all

"practical means" to promote
stability. For instance,

economic

in 1954 he said:

"I

give

legitimate

available to

Federal

that

the

can

be

used

this

you

assurance: every

ment

means

Govern¬

to

sustain

prosperity will be used."
However, despite these repeated
of promoting economic
stability through government ac¬
tion, the American economy has

assurances

been far from being stable. Since
WWII, the general price level has
increased by more than 50% and
there

have

been

already

than 10 months and had more than
five
million
unemployed.
This

unsatisfactory record

indicates

that the instruments available for
the implementation of stabiliza¬
tion policy have failed to be ef¬

fective.

ures?

and

others.

The

How

the stabilization
do

meas¬

they work?

Why

have they not been effective? How
can a more effective stabilization

policy be devised. These
questions
tempts to

which

this

are

the

paper

at¬

answer.

Stabilization
be

measures

classified

inflation
cannot

and

themselves

to

of

processes

set

bring inflation

or

limited

depression.
to

a

a

They

recovery

complete

halt. While the net contribution of

of financial pote

factor

VOiable

u a

in

—

1

forms

formation. To do so, the Federal

of life and

Reserve must always maintain an

on

regular purchases of

funds

or

easy-money

policy—always make

credit available and costs of borrowing low—so far as investment

government

temporary rise in inter-

investment

'i*"w"'

p

the

^

will

also

enable

or

cr

coun

prc,Sperity, people may. "actually'develop. Tight credit as a source
attempt to. save more because of of business failures will be less-

•

ana

ployment is
Such a policy

f~ credit may not necessarly encoui*- smail and financially weak, but
to
frt
nnf oin+iollv
lmnnrtarit
^firmc
tn
rtimulotP
save more; duririg^potentially. important firms,
to
s imuxaie a^er 'P'eople-.,to

—

Tight.Money
Even

pendent of interest.. It may be
interesting to observe: while tight

-

?„n!
along

comes

consumption.

.I rice

Rise

claim

common

t

that

for insecurity when -uriem- ened. Efficient management and
piqyment ^threatens even.if interr consumers' preference will be, as
Jest'fates are,low.,„Could therepoft^they should, Jthp main factors for

9t all-time>high individual sav- ;.success?of business, firms, whether
'.in?*'during 1958 be a proof of this". large or small.
l •
tight'•** 1
In addition, the power for se-

monetary policy can be more cffective

very

in

checking

inflation

doubtful. Worse still,

a

is

,

.

-

money policy, if not prudently

ministered,

may

.

.

into

available

two

are

those economic in¬

stitutions which have

already been

feuilt into the economic structure
Great

Depression, such

progressive

and




pay-as-

the

long

tivity.
to

<

run,

increase in out-

tion

of

fluctuation-swings

should

run, the only
tainly. be mass unemployment on
to increase outputs is hand as well.
\
production of investMoreover, the impacts of a gen-

ments

erated in the same fashion during

the Korean War to limit the purchase of

%

.

S

'

+

VifiA

Wh

oncto

o

w!

of

iIS

eral tight-money policy oh investment spending are far from being
rfrgeneral across the economy. As
Professor John Kenneth Galbraith
tto^ noli reasoned in his statement- subTf

«

oilS
Uo

and maximum periods of
repayment.
Regulation
W
op-

goods will decrease. If the decline
0£ investment is great enough to
cause prices to fall, there will cer-

In the short

increase

automatic stabilizers to the reduc¬

nr

mitted

the

to

?n I^n^nmnt^nn^Monopoly

Anti-Trust' 'and

residences on credit.

new

When inflation threatens,

1

a

rise

the marginal requirementsan increase in the percentage of
the market value of .securities
which has to be financed by the
buyer's own funds—would dis-

in

the

courage

use

of liquid

assets

both for speculation and thereby make
Onlv
tl^n ^an Productive re the effects of higher interest and available more funds for investvocate they shpuld be
ened and improved to do a bigger sources be transferred froP
the1 lesser" availabilitYof-credit are ment in plants and equipments. A
to
the
invest- ielt by that sector of the* economy decrease in the marginal require¬
job, nevertheless, the promise of a consumer-^oods
ment ennrit
inHiiQtriec
wHhnnt
where Prices are market-con- rnents in a slump encourages the
positive stabilization policy still
lies in discretionary devices. For pushVng up costs
A ceneraYtieht^ trolle^ but not bV the industries extension of credit for stock specthis reason, the central attention mcmev nolicv whlch aUemnts to in which only af^w-firms exist uiation which, in turn, may have
of this paper will be directed to -^stram both investment and con^ and prices are admmistered. Big a favorable effect upon business
the
discussion
of
discretionary sumntion outlavs iTthus not an firms can continue to borrow for expectations and investment
anm^nriate nrescrintLn to cure investment at higher interest :be- pians. Changes in the size of
policy.
inBatinn
Prescription to .Ctfre Cause this increase in costs can be downpayment and maximum penot

be

minimized

and

ad¬
strength¬

many

*

Ineffectivenes of the Present

The upshot of the general mone¬

tary

policy

is

to

tighten

under

inflationary

to

it in lace of

ease

credit

pressure
a

and

downturn of

prices and/or employment. Credit
restraint is achieved by raising the
rediscount rate

so

becomes

expensive

more

that borrowing

reserve

and by
requirements

and sales of government securities
in the open market so that the

availability of credit is reduced.
Opposite actions are taken if easy
credit

is

the

objective.

There

is

no

denying that the Federal Re¬
serve can
readily increase or de¬
the costs of
borrowing and

make

credit

whereas
an

plentiful

whether

easing

or

scarce;

a

tightening or
of credit can produce

entirely

a

dif¬

There is little disagreement that
an

easy-money policy can neither
prevent a slide into a depression
nor

bring about

exists

no

an upturn if there
profitable
investment

.

Sub-Committee,

.

passed
on
into
higher j prices.
further- Whereas, in the more competitive
more, general credit restraint is industries, the small firms have to
almost
helpless in discouraging accept market prices .as they are,
consumption and its power to cut and, therefore, have to forego their
investment expenditures is very investment plans when;.costs of
much
limited
and
this
limited borrowing become prohibitive,
success may become an active fac-- Also, small firms^ will be the first
tor itself in causing a downturn, to be rationed out of the credit
The
hope
that
a
tight-money market when credit becomes less
policy can reduce consumption lies available because -they are less
in that it discourages installment "credit-worthy"
compared
with
purchase of durable goods and the big ones.

In

;

Monetary Policy

desired response is

the

times

well-

all, it should be recognized that it
should not be used as a weapon '
for stabilizing price level; instead
it should be employed solely for

au$om£»tic with them; their .sav- also the b<
ing-decisions may be quite, in.de- ing inflatic

0

feasible way

fect,
however,
are
slowing down the

ferent question.

the

the provision

-

matically without factfinding and
fresh policy decisions.
Their ef¬

built-in stabil¬

kinds;
namely, automatic stabilizers and

since

,

•

puts depends upon improvements
in technology which raise produc-

of

discretionary policy. Automatic
stabilizers

t

bonds—a

is
•

In

purpose

crease

Current Stabilization Measures

can

m u

izers is that they go to work auto¬

increasing
are

Poor

adinflective credit controls in the hands
the Federal Reserve can also
.actually set a
J"vestment .Experience ^
downturn of employment and outTo a limited extent a general hnake some positive contribution
chases of securities and consumers'
put while failing to stop further credit restraint may succeed in.in promoting economic stability,
durables with its power of selec¬
price increases. The direct effect .reducing investment expenditures In contrast to general monetary
tive'credit controls. Fiscal policy
expected from general credit re- by ;dampennig optimistic expecta- policy which has been previously
is the deliberate manipulation of straint is the reduction in contions* of
profits, by
decreasing discussed, selective credit controls
government spending, tax eollec- sumption and investment spending
capital values of'existing-capital regulate
specific, uses of bor„ions and public debt to compen¬ from borrowed funds. This
effect, ,aSsets and by increasing costs of rowed funds. These controlling
sate
or
influence
the
private even could it be realized, would
producing new equipments;How- powers are defined by ,Regulasector of the economy.
As such, not necessarily be consistent with
.ever> as it has been pointed out tions T, U, W and X. Under the
its application is a joint effort of the twin
goal of stability, high earlier, this is exactly the wrong first two regulations, the Board of
a
great number of government level of employment and stable
thing to have for relieving infla- Governors of the Federal Reserve
agencies which include the Treas¬ prices.
Since inflation is essen- tionary pressures. IfV investment System can set the marginal reury, the Bureau
of Budget, the tially a process of the flow of
outlays are reduced while- con- quirements.
Regulation W
was
Federal Housing
Administration, goods and service running behind
sumption remains high :<for em- used in the past to control the exthe Federal Security Agency, the the flow -of
monetary expendi- ployment remains high), inflation tension of credit for the purchase
Federal Deposit Insurance Corpo¬
tures, the basic solution for it is would. certainly be worse instead of automobiles and appliances by
ration, the Federal Loan Agency, to spend up the flow of outputs.
0f better, since now the flow of changing
minimum
downpay-

three

recessions, the last of which was
just over and which lasted more

What

designed and wisely used. First of

in

view

,

that

political leaders of
parties have accepted the

both

centers

monetary-fiscal measures.
Monetary policy is the central
responsibility of the Federal Re¬
serve System and its implementa¬
tion is mainly through the devices
of reserve requirement provisions,
rediscount rates, and open market
operations. The Federal Reserve
System can
also regulate pur¬

that
periodic infla¬
and

depression

is

insurance, mortgages

j10Uses, and

-

easv

+.

around

agreed

l

measures can contribute much to
promote price stability and facilitate economic growth, if properly

gav-

attractive nvith

^ eegt ra^e can hardly have any de- demand for loanable funds is conlary pohcy is wholely a
egat ve c|sjve effects
upon their long run cerned. Capital formation is not
and completely ineffective io> ce
pians for savings. As for the rich, only the substance from which
in
preventing or revising a desavjngs 0ften are more or less economic
iei
u ic

to

and

policy

tionalized
110n_iife

making new loans
y
commercial banks. Clearly, mo

induce

Discretionary

Furthermore,
it is generally

tions

when

securities

government

that there should be no place for
it in an over-all stabilization policy. As a matter of fact, monetary

t0.dp have graduaUy been lBStltH_ the purpose of facilitating capital

portion oi tnis
was
used to pur-

stead of

starts.

eco¬

nomic activity.

pressions

threatens

excess

great

a

reserve

chase

personal income taxes, un¬
employment insurance, farm price
supports
and
so
forth.
These
built-in stabilizers automatically
tend to check economic activity
inflation

but

excess

you-go

when

a

hall dollars of

because

or

more

rising, interest rates, - this
reaiify wishful thinking in
of present-day conditions.
people do not save at all in^
g00(j or bad. Savings of the

rates

by reducing
^reserve requnements during the ast d w

labor and management.

inherent

^he most recent lll^t aiSrthat t le Fede al
a

emergencies

jngs become

reserve

facilitating capital formation, and calls for cooperation of

enterprise
system is capable of doing many
wonders; but it also has a serious

t e

this

of

billion and

inflation, gives monetary policy the job of

The American private

jor

dri k

twice

"range-rate"
a "Personal

Depicts investment

it

Reserve decreased rediscount

policy, the economist would add a battery of policies com¬
prising permanent easy credit and selective credit controls.
Regarding fiscal policy, he lays great stress on his proposal
instead of

make

cannot

you

tary and fiscal practices which stresses an innovation in our
our

You

.that

Dr. Chou suggests

to overcome inadequacies said to exist in

program

City

1959

nomic fluctuations does not mean

banks

the

^g
proposition that tight
% grant loans or the public bonow, crecjit may induce individual savmoney. An often used analogy in
jng3 because people may fear that
this connection
js
ca credit may become less available
lead the horse to the n e
but

_

Associate Trofessor of Economics, Pace College, New York

Thursday, February 12,

Proper Role of Monetary Policy
The .* conclusions':JhatO general

»

bylihe Federal'

administered

icon¬

.

.

sumption from borrowing because serve, and it does not comeunder monetary policy, as it has been
of mass unemployment. The Fed- its general credit policy. "
!^usedfUpfto^ow,may do .mere;
eral
Reserve
can
make
credit
-1
/ ;:
V *
harm than: good in combating eco-|
but

By YA-LUN CIIOU

want

not

.

.

the

last

analysis,

.

encourages
it

do

individal savings.

these?

But.

There

little

is

.

wonder

that

With

high level monetary policy alone has never
rising money been able to arrest inflation durincome, people are usually con- |ng the whole postwar era. In adfident of their future and they
dition, it may have been one of
may not be lestrained fiom pur1" the
factors occasioning business
chasing durable goods on credit failures of small firms at times of
can

ot

employment and

just because interest or even
charges
bave increased
1
to 2
a

more

strain

effecUve^devTc^

to

re-

general prosperity and high profThere

js

ajs0

reason

to

be-

lieve that this is why quite a few

spending on recent economic studies have atthe installment basis is not high
tributed tight-money before Oct.
interest rate but the requirement .o,-™
*
+h
mnet
:mnw
of
larger downpayments and
as x°
®
po
shorter
duration- of
repayment. i-anl factors for the most recent
consumption

riGd

of repayment would tend to

influence consumers'

spending on
appreciably
even
if
credit is plentiful and cheap, indurables

aSmuch

as

more

downpayment and
tens

of

hundred

few

a

thousand dollars

dollars

a

for

or

less for

or

rise or fall in
monthly pay-

ments weigh heavily on the minds
0f

most

buyers,
selective

TTnHn,ihtpdlv

£
achieving
the

desired

the

specified

few

rrprfit

effective in
results

in

Or.

at

areas.

least> they would not have the'adverse
impacts upon
investment
ancj

activity
might
have. Hence, these controls should
aggregate

economic

that general credit restrain
be

considered

powers

and

of

be

the
used

as

the

standing

Federal

Reserve
resolutely
and

promptly as dictated by economic
con 1 lons even ln Peace lmeNeed

for

Other Measures

oci

^95J

The latter is

a

measure

of

selec-

recession.

b

most

A permanent

easy-money

policy

can facilitate economic expansion
in a slump if other factors favor-

Volume

189

Number 5820

.

The Commercial and Financial Chronicle

.

.

25"

(781)

inv®stment

and/or

con-

sumption emerge and it can also
help capital formation in a boom
without

if

costs

raising

consumn-

ning

under

permanent

a

easy-

policy.
>
Now, what are the possibilities

money

.

of Dublic works

exnenditures and

most

positive

Promoting

and

powerful

economic

m

exnansion

of

swered

in order to clear the
way

stability.-It for their adoption.

has been pointed out earlier that
invpstmpnf

s

ic

First

trols

must

standing

nhWt'
P^opie may object

so

the

of

\

_i.

grgencies

The

rrfSit

ai

f

+•

PYnpnHitnrf»c

?,? !.h.?LfeieC
pvnpnHiua
C°a~
expenditures ,depends

the actual conditions in the

upon

specific

Reduction

rfnuimiavmnni
downpayments

in

extension

areas

of

^

o

and

*

The

effectiveness

Aae

It

concentrates in those industries—
tnose: industries

steel, lumber and
"leverage"

•j

its stimu-

concentrates in

eien

L,r fail
£Jy77

public
puoiic

or
m

lation of construction demand.

repayment periods during deoression may

of

enecuveness

works spending lies

effect

so

forth—where
the

on

rest

of

because

duces
miu

profitable

portunities

originates from excessive demand
for

consumers'

durables,

hard-

a

as trsswraas
flatiori
•J-J— 'V l»»- "■ strong effechowever. Indue
to

is

depression,

a

nermi

ne^easv-monev nnlicv tnrf iTrT
seiccHvf

canacftv-of

fmflcate

that

alnne

measure,

:c

needed

+h^

nrnmntim

in^imViMoi

mLii^

Suph

immpfiintpiv

hpin^r

fQn

Inp
Lhi luS/
lvrfpra? rpvpvnrv,ptff

hi

nf

euerdl

government.

ntppH
a

fnr

Fiepni

Ior

"

Pniinv

rtecai

™ucy

Fiscal policy is the most positive
and powerful means at the dis-

posal of the Federal Government
to influence economic

central

ations

and variations

When

eral

of public expendi-

markets

inflation

and

strong

are

threatens, the Fed-

Government

direct

Its

changes in Federal taxes

as

tures.

activity.

consists of such oper-

core

reduce

can

purchases

its

of

goods
and
services and levy higher taxes to
reduce

private

business

spending.

slows

down

a

a ;

decrease

taxes

to

prices

will

in

7rIf

cer

When

and

pubSTc

work

unem-

hasty and uneconomic make-work
programs,
a
list of useful and
worthy
public
works, such
as
schools,
research
laboratories,
highways, housing, dams, bridges,
navigation and irrigation projects
and so on, should be prepared in

stage of planning.
Then actual
construction
can
be started on

of

its

more

power

consumers

by

low-

taxes.

with

long

run

Between these two principal inof
fiscal
policy—

changes in expenditures and taxes
latter

is

general
extent of
tures

far

and

much

more

influential

The

varying public expendi-

as

cyclical

by

deliberate

a

device

is

counter-

limited

to

ex-

penditures for public works alone
since

in

the first place

the bulk

of Federal spending is for defense

and* international
determined

are

tions and
suit

security

by

world

which
condi-

hardly be tailored to

can

stabilization

needs.

Second-

ly,

many
types of government
"transfer payments," such as farm

connection'thaf precedent 'can

is s0 because a reduction in
sonal income

per-

found for this type of delegation

m0re

money

public

to

taxes, by leaving
in the hands of the

spend,

will

inevitably

VMhr'a

well.

H°n industry alone instead of
usin2 them to relieve general unemployment. This practice may
avoid raising the costs of construction in a slump when con-

will be sufficient to
keep cost of living in line and to
prevent unemployment from bemeasures

coming
postwar

intolerable.
Alas,
the
experience has verified
that
monetary
measures
have
failed to realize this hope.

fresh policy decisions

expenditures

few

a

months

later. Thus the governkeep construction busy
all the time by placing more or
less of its own contracts when

ment

can

(3)

decrease

or

in-

Light

public

works,

those

taxes

can

expected
to
influence total
spending, the most promising and

uncertainty

climate and thus

planning.
come

taxes

would

In

personal
not

way

have

addition,

sonal income taxes do

of

business

hamper business

Flexible

disadvantage.

on

not

inthis

per-

in

any

interfere with the free choice

consumers.

consumers

to

tribution of public work spend'n8 can reduce the swings of business activity, it is not so great as
is often thought; it is still

stabilization

guide for sound investment plan-




useful

policy.

General

nnemnlovment

toenerai
public

reserve

heavv

unemployment,
works

stahilize

the

should

neavy

be

used

construction

industry

alone

ft

to

industrv

„

.......

(4-hiT° enjoy,'be"eflts of

^'"sfngl^rX"
5- single rate
?^US+u
£ rta

"

system Must te

system must pe

*afntoe~ia+e

S

lAAvA

temp.jrary

j

»P E

.

6

2EP"*

•
'?

used

resolutely

1

long

can g0 a

nomic

and

wisely, they
to reduce eco-

way

fluctuations

the

toward

vanishing point. But to eliminate

Flexible Personal Income Taxes
<■

to

Among all the
the

federal

means

available

government, personal income taxes are by far the

mulated during prosperity. Another current argument against

flexible taxes is the fear that, in
view of huge expenditures for
defense, the government already
finds it difficult to close its budget
deficit, a tax-cut will certainly
a

bigger deficit. This fear

Gf

:

and.

state

city governments in
minimum decent
standard of living for the poor and
providing

0n

a

land-use

designed
cause

economic

with

in view

zation

>

controls must also be

stabili-

least

at

or

;

not

»

to

conflict with the actions of :

and fiscal authoritiesAgain, in the private Sector, both

monetary
business

and

contribute
stabilization

social

leaders

labor

much
if

to

.

1

can

economic

they always keepin

interests

their

minds

when seeking their own. If unions
formulate their wage policies

can

consistently with labor productiv- <
ity, inflationary pressure will cer-■
tainiy tend to subside.

If manage-;,

ment, especially in those industries
where
can

prices

adopt

more

icies instead

administered,

are

flexible price pol-"

of reduction

in

em-

.

ployment and output as soon as
effective demand weakens, thethreats of unemployment and slid-

unreal* In face of increasing un- ing business activity can certainly
emPloyment and falling produc- be relieved appreciably.
With
? *a,^LS«
ciose ™»peration from manage-'
help to increase consumption ex- ment and labor, as it can be seen,,
Pendltures>
turn' w£l the burden upon monetary-fiscal

the aforementioned
overcome.

Can this be donev

if tho fol_

Yes

lowing two proposals

are

adopted.

consumption,

increase
individual income, the measures can be lightened and
base of individual income taxes, their effectiveness strengthened
Thus the total tax revenue from in promoting high level of empersonal income may be larger ployment and stable prices. Tha
instead of smaller, with lower tax success of stabilization policy, as
rates in such a situation. Besides, that of any other public policy in.
the present structure of American a free society, depends upon tho
economy
is inflationary rather understanding and cooperation o2
than deflationary biased owing civilian leaders just as much as
to regular wage-increase-elauses upon the determination and wisin labor contracts, absence of dom of the government,

purely;

competitive

markets

lower income

groups is usually

(2)

The Congress

may

a

pass

a

"Personal

Income Tax Board for Stabilizetion on a similar pattern as that
of the Board of Governors of the
Federal Reserve System. This
board once established, should be
an independent agency and should
have complete authority, delegated to it by the Congress, to
change tax rates within the ranges
determined by the Congress for
the purpose of stabilization.
With the preceding two arrange-

ments,
cisions

not

only tax rates could
changed quickly but de-

for

changes

can

also

made without embarrassing

be

political
leaders. However, to
these
proposals there may be raised two
objections which
must
be
an-

■

in

tax-rate many industries and huge Federal

Fanges\ fcA
Llowe^ incame spending. In view of these two
brackets should be wider than considerations, the operation of
those ior the upper income brack- flexible taxes m promoting ecoets; for, the propensity to consume nomic stability will not j^ces-

then be
.

their income

after taxes according to their preference will be the most important

a

instrument for limited purpose.
It must then be included in a total

This freedom of the

spend

Reserve

over

tbs

gut to have the full benefits of

fiexible taxes

which can be handled by rela- special law to create

be

create

Federal

gested here for taxes.

produce

higher.

tively unskilled workers and can
be started on relatively short notices' can undoubtedly be helpful
effective lies in flexible personal in fighting general unemployment
income taxes.
For instance, fre- a»d should be so used.
quent changes in corporate inFrom these suggestions, it is
come, sales and excise taxes may
clear that although the net conFederal

the

Governors

whii»

m

is not only exaggerated, but also

encing

required to make them work.

Again, while changes in nearly
of

of
of

DS

work

Offers Two Tax Suggestions

construction

crease.

type

Board

„

struction activity
still
remains
high. In addition, it may also add
more precise timing in execution.
Heavy construction projects are
often made under contracts and a
fall in private construction now
would certainly mean a decline in

private contracts

every

power

The

AA irA
application, guments for the adherence to a
under
fr,esent clrcum" balanced budget, the most perstances, tax, legislation is neces- suasive is that it forces the govsal'lly a yery slow procedure. It eminent to plan its revenues and
A

(1) Instead
of
the
present
"single-rate" system of income
taxes—namely, there is only one
rate for eacb bracket of taxable
income; the Congress can pass
legislation establishing a "range*'ate" system—namely, assigning a
range of tax rates for each taxable
income bracket. Moreover, since
changes in income taxes
are
mainly for the purpose of influ-

lizers and
are

of authoritv lw the Pongress

te

„

tw0 difficulties must be

(2) Heavy public works should
be used to stabilize the construe-

price supports and unemployment
compensations, as have been mentioned before, are built-in stabino

is

Fnrthprmnrp

ouSfc

lignt puoiic worK piojecxs maj pes
used for the purpose of relieving"

it is aione.

This

needs

short notices,

struments
the

It

change the situation.

_

hands

changed

oe cnangea.

rate-

.

.

accordance

ering

?

+

the

vestments,' aimed
primarily
at in st?P with the fast tempo of eco- sional
economist
and
political
creating work for the unemployed, nomic changes. Next, tax legis- leaders alike, is a very dangerare often hastily designed and lation is often greatly influenced ous
de-stabilizing
force.
Even
thus
use 4 economic
resources
political considerations. Both though the use of flexible taxes
wastefully.
the Congress and the Admmistra-. means the abandonment of the
In order to have the benefits of tion may find it politically pos-'-standard of balancing the budget
public works expenditures and to sible and profitable to decrease annually, which
is inconsistent
avoid
the
possible
drawbacks, faxes when mass unemployment with the objective of economic
economists in and out of govern- prevails,
but would hesitate to stabilization, it does not mean the
ment have from time to time sug- increase taxes when inflation abandonment of the principles of
gested their proper uses. Some of threatens for fear of political un- budget balancing all together. Unthese suggestions, with which this popularity, especially during an der the scheme of flexible taxes,
writer is in full agreement, are election year. There is little won- budgets can still be balanced over
listed below:
d^r ^bat most political leaders a period of years — deficits in(1) In order to provide flex- often take the course of inaction on curred during a depression can be
ibility in timing and to avoid taxes and hope that monetary compensated by surpluses accu-

and authorized to the ".blueprint"

the

be

nrint"

light

pro-

in

spend

purchasing

cannot

bo

must

an.

and

can

•.

legislation

new

Con-

works

planned in view of the nation'^
long run needs; they should be prcpared and authorized to the "blue-

imperfect cSmpeti- to hf inflf ™ or to combat un- undermine the safeguards of bud/- he/e Constitute the basi/JS^oC
rapidly during ^Flo32?ent. duf. *? two serious et balancing. Among all the areffective stabilization policy; ii

ernment

more

raT4s

the

remains in me con
unless the Congress

since,

passes

me

power of

still remains in

•

gress

the

py

rise

ployment grows, the Federal Govleave

taxation

recovery

•
L
i
?
with cheap and

within

bv

m

Public

for

peace-

o

PvnpnHitiApcwithnnf
nf

•

(3)

in

„carefull7. ^o that periodic inflations and depressions
rnonths to consider/tax legis- wasteful outlays caS be avoided ^t^'TS mSsS
A#
^ grams are slow to be started aridvAat^Jf
tax lates, once deter- But the safeguards against waste- to be supplemented by other ac¬
+wl impossible to be stopped before mined,, are set, for:-a year or ful - expenditures can be kept tions, public as well as private.

are

tahilitv

rtf»ri«!inr»«

absent

even

While the effectiveness of flex-

nnlv

Periods of inflation but stay high
in slumps.
,
Besides, to use public works exPenditures as an anti-cyclical deIice .Involves many difficulties.
For

fnr

in

op-

credit;

BOH

JA. y flirth*

tion,

-777.;-

The passive nature nf

increase

/V

♦

income

personal

onlv chanep thp ratp«s

Se ranges^ Itermined
determined

«s»s»s k« ars^rrte-sraJ

spendimfin^iolmer whe^ due

increase in

controls

general

a

areas.

Ited

the ^epressmn 's m heavy

g°ocls production.
Howevei, it
construction is still active in a

abundant

re-

income

^
income. Congress. The ultimate
investment

i

vivaL especially when the strain tainiy

j!y r.eaches saturation. Again, as
pressure
mainly

are

[ I, i af
is impossible

action

an

disnnsahle

ui

While

appliances and housing temporal--

inflationary

a

+

can

such

personal

Tlus^bj^tion is'actualb"

greSS'

I
unfounded if it is realized that the
1!
delegation of authority suggested
/ income tax ]iere
limited. The Tax Board
down consump-

^

tion

that time demand for automobiles

more

^

firef

will nprtainh
t
will certainly cut

leverage
ciiect on tne lest ot
tbe economy is high and thereby
ls capable of generating a re-

completely to induce
consumption spending if at

ovp

iniSrcnnai ^

Pub,ic Works Expenditures

rnntrni

sumntinn
sumption

few

"XedT their fU" imPaCtS be Sdhe^hort mrifeon^™

»■effPf.fiVAnp

also

but

stabilization

Sery °r CUrtail

as
the
Federal

considered

be

Dowers

Reserve System not only for na-

ilArII,or,l Pftrtfir Rv
llUrillCIII TdUIIIU IIJ.
!?«§■■■ him ante llffsfAll

•-

EqllipiVieillS 11113760

Halsey,

&

Stuart

Co.

and

Inc.

sarily enlarge the budget deficit.
agsociateg yesterday (Feb. 11)- of-"
On the contrary, this; policy may fered an iggue Qf
$4^4^000 Northeven make it easiei toi tne rea- em paci£jc Ry 4%% equipment

^aig5®ae[b^iTng
lf

d^"s?

run

exnenditures
at

es^eciallv
Tre

Dresent

the

to be

level

-continued at the present level.
SllITimarv

and

conclusions

Summary and Conclusions

It has been argued in this paper
that m order to make monetary
and fiscal measures tend toward a
more effective stabilization policy,
the following four recommendations must be adopted:

formation.

To

perform

inclusive.
The

this

function, a selective credit program should accompany an easymoney policy.
'^
.

(2) All the selective credit con-

certificates

3-85%

yield from

scaied

are

to

4-35%' ac~

to

cording to maturity.
issuance

tificates
tion

of

and

are

the

sale

of

the

cer-

subject to autnorizainterstate

Commerce

Commission.
The
150

(1) The main function of general monetary policy should be
concentrated on facilitating capital

trust certificates, maturing an-:
nually March 12' 1960 to 1974'

jssue

[s

refrigerator

to

be

cars

secured

by

and 400 box

to cost not less than $5,940,000.
...
Associates in the offering are
w. Pressprich & Co.; Freeman

.

cars>

& Co.; Ira Haupt & Co.; McMaster
Hutchinson & Co.; Wm. E. Pollock

& Co., Inc.; and Shearson, Hammill & Co.

.

The Commercial and Financial Chronicle

.

(782)

26

National

.it

News About Banks
NEW

BRANCHES

OFFICERS, ETC.

Bankers

and

REVISED

the

a

Virginia
000

CAPITALIZATIONS

*

Fla.

outstanding:

shares

of

(Number

Special meetings of stockholders
of Guaranty
Trust Company of
New York and J. P. Morgan &
Incorporated,

Co.

the

of

merger

institutions,

two
by

of

Boards

Banks.
of the

both
Directors

announced

The

on

called for March 4, it

been

have
was

vote

to

regular meetings last
week, approved a detailed plan of
merger which is being mailed to
stockholders with notice of the
Banks,

at

special meetings.

two-

of

holders

by

Approval

bank

thirds of the shares of each

is required. Morgan stockholders
of record at the close of business
at the close of

Feb.

will

11

businesS|

entitled

be

to

vote

proposal. Guaranty Trust,
with 6,000,000 shares outstanding,
had
as
of
recent
date
36,228
stockholders. J. P. Morgan & Co.,
the

on

outstanding,

with

350,000 shares
had 2,088 holders.

Guaranty Board of
Directors will have 24 members,

tion

effected under the char¬

was

if

The

common

Jersey was

and the office, of Morgan at
Street and will continue

Wall

three present mid-

ta operate the

stock dividend,

$400,000 by a

Jan.
30.
(Number of
outstanding: 20,000 shares,

effective
shares

By
mon

stock dividend, the com¬
capital stock of Asbury Park
Trust

-

Com¬

Asbury Park, N. J. was in¬

$550,000 to $750,000,
28.
(Number of

creased from

sis

appointment of John A.
Mayer as President of Mellon Na¬
Bank

Trust Company,

and

10

Richard

by

Chairman of the Board. Mr. Mayer
succeeds Mr. Lawrence N. Murray

where

well

as

as

presently

Morgan

has

a

subsidiary (Morgan & Cie. Incor¬
porated) and Guaranty a branch,

Bank

tional

who

is

retiring

continuing

President, but
Director.
Mr.

as

a

as

Frank R. Denton will continue as

of the Board

Vice-Chairman

to

and

of

the

Officer

Executive

Chief

operate,
it
is
stated,
"either
through the subsidiary or through

of

ber

expects

Bank

merged

shares,

$

if

p

the

elected

was

Trust Co.,

of Irving

board

New York.
>

*

C.

George

«

Assistant

Bankers

in

Trust

Auditing
Department died Feb. 3. He was
65 years old.
Company's,

York,

New

started

Bennett

with

Bankers

and has spent
to

named

his

Co.

Trust

it

in

1926,

work.

head

He

was

insurance

the

of the Banks' Auditing De¬
partment in 1935 and named an
the

of

elected

was

in

Bank

1943.

Assistant

an

He

Vice-

President of the Bank in 1957.
#

!it

Vice-President in 1929,

a

Vice-President

first

He

National

Mellon

Fidelity

Bank

a

(Number

Feb.

on

A.

❖

of

a

nounced

history

of Skokie,

%

Branch

outstanding:
value $10.)
if

si:

•

,

a

mon

Bank

creased

from

$40,000,000, effective close of business
Jan. 30.
(Number of shares out¬
standing:
3,200,000
shares,« par
value

$36,217,500 to

$12.50.)

a

mon

Union

National

Muskegon,

of

from

creased

President

of

a

Vice-Presi¬

Bank

$850,000

shares,

if

First

stock

the

first

ever

in

the

Wau¬

common

from

shares,

#

❖

the

com¬

of Beaver Dam, Wis.

Bank

increased
from
$100,000 to
$200,000, effective Jan. 26. (Num¬
ber of shares outstanding: 4,000
shares, par value $50.)

was

The

First

if

if

National

increased

Bank

its

of

com¬

Henry H. Hoyt
serve

on

was

the

elected Feb.

board

rectors of Empire Trust

York, it

was

of

di¬

Company,

announced

by

Henry C. Brunie, President.
*

.-i'

Stolzberg,

p

fective Jan. 27. (Number of shares

Pittsburgh
banking.
only woman trust
serving in any of Pitts¬
of

Mrs.

Irving

Herbst

elected

Vice-Presidents

of

mercial

Bank

America,

North

Com¬

New York.

Martin

served

Assistant

as

for

the

to

several

prior

to

that

company's merger
with
Fidelity.
Following
the
merger, Mrs. Martin was named a
trust

officer

at

Fidelity and

was

if

Central

Junction

City,

stock

000

by

Jan.

a

if

Bank

of

City,

Junction
common

cap¬

from

$100,000 to $200,stock dividend, effective

26.

standing:

Bank

of

if

$20.)

its

common

capital

stock

$3,578,750 to $3,721,900 by
dividend, effective Jan. 27.

from

stock
(Num¬

a

ber of shares outstanding: 744,380

shares,
-

:

par

value $5.)
if

-

if

mon

Merger
approving
as

certificate
and

was

making

issued

effective,

of the close of business Jan.

27,

the merger of The t»irst National
Bank

of
Wrightsville, Wrightsville, Pa., with common stock of

a

stock

National Bank

Jfew York

stock dividend,

in Highland

increased

its

Falls,

common




Bank

and

Trust

with

common

The

merger

Co.,

stock
was

of

York,

effected

under

com¬

if

El Paso National Bank, El Paso,

its

Texas increased

tal

from

stock

capi¬

common

$4,-

$4,000,000: to

shares,

shares
par

Commerce

City,
of

Mo.

outstanding:

2,000

value $100.)
*i"

.

,

announces

President,
i

11,

a

an¬

More
holders

Bank,

99.4% of

the

of

■

-

than

the

share¬

Toronto-Dominion

Toronto;

Canada

ad¬

took

.

from $3,750,000 to
effective Jan. 28.
(Number of shares outstanding:
170,000 shares, par value $25.)
increased

was

$4,250,000,

tional

for

addi¬

offered 1

were

share

every

shares

5

held.
■

■■,

,

,?.j

.

Bond Club of Detroit
By

stock dividend, The Gree¬

a

43rd Annual Dinner

ley National Bank, Greeley, Colo.

capital stock

common

Jan.

28.

(Number of shares out¬
standing: 60,000 shares, par value
$10.)

tional
Los

Feb.

Trust

will

Calif,

Citizens

to

of

shorten
National

shareholders

The

Na¬

Bank

Savings

&

Angeles,
name

Citizens

2,

the

of

was

in favor of
change,
and final approval
given by the Comptroller of

the

Currency.

Bank

the

recently

voted

P

if

if

certificates was issued
and making effective,
the close of business Jan. 30,

of

in

of First National Bank
McFarland, Calif.,

McFarland,

with

stock

common

and Tulare County
of

$100,000,

of

National Bank

with

Calif.,

Visalia,

Yisalia,

be

comrpon stock of $150,000, into
Security-First- National Bank, Los

on

at¬

by

ap¬

proximately
150

leaders

of

the

financial

and

banking
in

industries
the

Detroit

area.

Wilfred

Merger

the merger

will

tended

J.

Friday,

'

.

Dinner

Tuesday, Feb.
24, 1959, at the Detroit Boat Club.

:

.

_

Bond

Club of Detroit will hold its 43rd
Annual

It

if

if

if

Effective

Mich. —The

DETROIT,

$500,000 to $600,000, effective

of

Friday

&

Company,
President
the

of

Bond

Club,
will
preside. The
principal
ad-

Roy L. ReiersoB
•

■

'

gathering will be
given by Roy L. Reierson, Vicethe

to

dress

President and

member of senior

a

management of the Bankers Trust

of

Company, New

The

$73,500,000.

and

Bank

National

curity-First

was
of Se¬

merger

effected under the charter

will

from $225,000
stock dividend,
effective
Jan.
26.
(Number
of
shares outstanding: 4,500 shares,
$450,000

to

a

value $100.)

par

#

The

National

%

Wash,

Co.,

Kansas

the

election

Ei^ene B. Foncannon as Assist¬

ment

meeting

stock

of

to

be

Associarj

increased

Dr.

Sprinkel,

known

outstanding:

as

a

in

Ahead

has

who

"fearless

will speak on the

-

8c

Trust

Savings

will be the guest speaker.

Bank,

$8,000,000 to $9,000,000 by a
stock dividend, effective" Jan. 28.

shares

the Chicago Bar

omist,'Harris

of Commerce
was

Invest¬

The

Chicago

tion, Dr. Beryl W. Sprinkel, Econ¬

.

from

of

of

of

Women

.

capital

Bank

CHICAGO, 111.—At the Feb. 18

dinner

held at

•
$

common

Seattle,

■

stock

by

'

Chicago Inv. Women to
Hear Dr. B. W. Sprinkel

P

Compton

capital

mon

Outlook."

•

tional Bank.
P

York. N. Y., who
Economic and

"The

discuss

Financial

Security First Na¬

under the title

become

forecaster,"

subject, "What's

Business

and

Invest¬

ments."
The Bellingham National

Bellingham,

V

Trust

B

250,000 by a stock dividend, andvantage of the Bank's recent offerfrom $4,250,000 to $4,500,000 by
to purchase additional stock, ac¬
the sale of new stock, effective
cording
to
Allen. T." Lambert,
Jan. 26.
(Number of sharest out¬ Vice-President and General Man¬
standing: 225,000 shares, par value
ager. ' •
/- ' • ••
•- ■ J':
$20.)
Of the 400,000 shares offered,
if
if
if
% :
said Mr. Lambert, only 2,262 re~
By a stock dividend, the com¬ mained
unsubscribed
for
when
mon capital stock of The Colorado
the offer closed on Jan. 15. The!
National Bank
of Denver, Colo.

(Number

of

R.

nounced, Feb. 10.

if

100,000 shares, par value $90,)

ber

t

Montreal, Montreal, Canada, Gor¬
don

.

increased
from
$100,000 to
$200,000, effective Jan. 26. (Num¬
was

Pa.

$1,335,000.

the

capital stock of The Peoples

if

dividend, the First

'

shares,

National Bank of Liberal, Kansas

$150,000, into The York National

By

a

'

^

The

By

if

of

(Number

28.

P

of

Westchester,

Jan.

value $10.)

par

(Number of shares out¬
8,000 shares, par value

dent.
National

Pembroke

jacK

Montreal, Canada, has been ap¬
to $1,675,000 by a stock dividend,
pointed a Director of the Bank of

National Bank,
Compton, Calif, increased its com¬

National

Kansas increased its

ital

Bank,

capital stock from $1,575,000

mon

The

if

White Plains, New York increased

National

par

ViceThe

in

com¬

^

a

*

Houston

(f

shares,

4,000

value $25.)
ti:

years

President in charge of trusts and
later as a trust officer at The Co¬

later elected Assistant Vice-Presi¬
*

mon

outstanding:

burgh's Banks.

lonial Trust Co. of Pittsburgh, Pa.

and Herbert D. Backer have been

of

capital stock from $50,000 to
$100,000 by a stock dividend, ef¬

officer

if

its

Angeles, Calif., with common stock

❖

Wis.

Neenah,

'

Bank

Houston, Texas increased its com¬

as

stock dividend,

capital stock of The Old Na¬

tional

;

approving
*!*

mon

\

,■

The

par

value $5.)

Mrs.

woman

Vice-President

of

$1,000,000 to
stock dividend, ef¬
fective Jan. 27. (Number of shares

a

Royal Trust Company, i

stock dividend, ef¬
shares
50,000
shares,
par
■.'■/;/. ''
■ A;".*-

a

value $10.)

a

108,000

Pembroke, C. B. E., Presi-*

Jack

dent of the

capital stock from $400,000 to

mon

Bank.

Bank

kesha, Wis. increased its

outstanding:

National

$500,000 by

its

si:

sj;

National

a

\

from

rJ-t'''

'p *

Gadsden, Ala. increased

$1,020,-

to

value $10.)

par

%s.

'

First

The

in¬

was

shares

0

Department.

Trust

and

Mich,

effective Jan. 28.
(Number
outstanding:
102,000

000,
of

#

t

•

increased its

stock dividend, the com¬
capital
stock
of
Hackley

By

and

$200,000

of

❖

from

P

P

capital

a

surplus of $150,000.

shareholders

stock dividend, the com¬
capital stock
of National
of
Detroit, Mich, was in¬

By

By

*

as

capital

She is also the

Chairman.

Gary

announced

Pa.

Byerly,

is

elected

New

Com¬

Fidelity Trust Co. in the
Planning Division of the

Martin

Helm,

Trust

&

Martin

M.

Center

to

The

has announced the election of Mrs.

Office Advisory Board, it was an¬

11

of

Fidelity Trust Co., Pittsburgh, Pa.

Johns

H.

if

shares

of

13.
»

John

12,000

common

70,000 shares, par

capital

the opening of its Augusta

Trust

Harold

with

Bank

Pittsburgh,

pany,

(Num¬

$350,000 to $700,000 by
stock dividend, effective Jan. 27.

$1,375,000 by

Bank's

by

•

Bank

its

increased

in

Union Trust Company.

dent

Rockefeller

1942.

at the time of the merger

Estate

its

in

President

appointed

was

1946

Chemical Corn Exchange Bank,
New York, has elected Cyrus N.
to

Vice-

the bank as
Assistant Cashier in 1925, was ap¬

Edith

J;S

'

if

-

National

Co.

group

officer

In 1957 he

Executive

Mr. Murray joined

and

to

value $50.)

par

First

as

career

his entire career in

insurance

Bank

the bank

President.

pointed

Bennett,

Vice-President

Mr.

Mayer joined

appointed

was

John W. McGovern
to

Mr,

III.

$300,000

outstanding:

if

Vice-President in 1951.

branch."

a

Forest,

from

shares

bank.

the

Lake

of

increased

$600,000, effective Jan. 30.

Mellon,

K.

of

Guaranty

stock dividend the com¬
capital stock of The First Na¬

if

Feb.

■'

■/,

value $100.)

par

f"

shares outstanding: 167,500

Pittsburgh, Pa., was announced on

its branches
in London and BrusselS;<Tn Paris,

branches

Manhattan

town

*

%

stock from

sis

sjs

The

tional

in

a

was

111.

$10.)

value

shares,

effective

*

and Don E.;
The Bank

$100,000 to $200,000 by a stock
dividend, effective Jan, 27. (Num¬
ber of shares outstanding: 2,000

outstanding:

Bank

value $20.)

outstanding: 75,000 shares,

shares

-V;;;

■

Jan.

effective

par

and

Bank

V

stock

■■■■-

increased

was

H.(

fective Jan. 30. (Number of

if

from $1,000,000 to
$1,250,000 by a stock dividend, ef¬
fective Jan. 26. (Number of shares
outstanding:
62,500
shares,
par
capital

By

a

Fla.

Chicago, 111. increased its common

value $20.)

par

pany,

23

Woodbury, New
increased from $200,000
of

Bank

tional

A

,

National

Merchants

if

.

30,000

shares, par value $25.)
if

has

The common * capital stock" of
The First National Bank of Mount
Dora,

to

Herbert

President,

is

.fiW

/

Currency

Chamberlin is cashier.

.•<

.

outstanding:

shares

tf

capital stock of
Farmers and Mechanics Na¬

The

of

ber

Bank.

National

to

Watertown

The

of

title

and

ter

by both Banks, including 12 from
the present Morgan board and 12
from that of Guaranty.
point out that Morgan
Guaranty will maintain as impor¬
tant banking offices the principal
office of Guaranty at 140 Broad¬

■

.

.V„

new

a

Freise

$500,000

if'.

.;

com¬

mon

'
A
with com¬ value $100.) if
if
a
mon
stock of $650,000; and The
The coynmon
capital stock of
Black
River
National
Bank
of
Lowville,
Lowville,
New
York, Mercantile National Bank of Ham¬
with common stock
of $100,000, mond, Indiana was increased from
merged, effective as of the close $500,000 to $750,000 by a stock
of business Jan. 23. The consolida¬ dividend, effective Jan. 27. (Num¬

National

holders

if

Watertown, New York,

according to the statements mailed

The Banks' statements to stock¬

of

Bank

National

Ohio increased its

Newark,

mon

The Morgan

way

53,333'A

from

$600,000,
effective
Jan.
28.
(Number of shares outstanding:
60,000 shares, par value $10.)

if

if

if

First

The

capital stock from $300,000 to
$500,000 by a stock dividend, ef¬
shares, par value $7.50.)
if
if
if
fective Jan. 27. (Number of shares
5,000 shares, par
The Watertown National Bank, outstanding:
ber of shares outstanding:

stockholders

Feb. 4 and Guaranty
of record

stock from $200,000 to
$400,000, effective Jan. 26. (Num¬
capital

increased

was

open

the

Bank.

of

Comptroller

Beach,

Pompano

the

from

mission

to

50,000, par value $10.)
'•

of

Bank

National
Bank,
received per¬
Office of the

W'alla Walla, Wash,

*

mon

tional

: Walla

Walla

■y

if

if

*

By a stock dividend, the com¬
capital stcckiof the First Na¬

increased from $250,-

was

$500,000, effective Jan. 29.

to

shares, par value

as a

*:

60,000

outstanding:
S10.)

shares

of

Foncan-

1959

Thursday, February 12,

.

officer and will work

if

if

.

Mr.

cattle loan
closely with
Correspondent Bank Division.

joins the Bank

-non

stock dividend, the com¬
mon capital stock of The Flat Top
National Bank of Bluefield, West
By

CONSOLIDATIONS
NEW

Trust Co.

and

Bank

Vice-President.

ant

and title of The York

the charter

.

.

common

000

to

Wash,

Bank,

increased

$600,000 by

a

stock divi¬

dend, effective Jan. 27.

William

its

capital stock from $400,-

(Number

P.

Letch worth /

William P. Letchworth,

-

in

J.

Barth

February

1.

&

Co.,

partner

passed

away'

Volume

189

Number 5820

.

190,000 tons. In 1958, the company
completed additions to the

American Stock
Our

Reporter

Governments

on

By JOHN T. CHIPPENDALE, JR.

=

refunding operation of the Treasury "for February has
been provided for, but it remains for the
money market to digest
the issues which came into being when the Government took care

Treasury and, the>financial district
4%

note; iii spite of the

obligation; had only

a

as

whole;

a

also

Christi, Texas, alumina
which increased its annual
rated
capacity by 365,000 tons.
Additions to its bauxite mining
Corpus

plant

an American Stock Exchange member for
stock specialist on the market's trading floor,

Dyer,

and

years,

a

reelected to his fourth consecutive term

was

the

The three-year.

modest appeal to the Owners of the Febru-

snice jtbe need was for a shorter-term security. The;-,
payout of $2,100,000(000 was hot an- unexpected development and,
to meetvlhe. large cash - demand. $1;500,000.000 of
217-day tax an-'
tieipation bifewere offered to take care of (the attrition.

*

^XThe bond market is still on the uncertain side, since there is
institutional demand, for the more distant Government securi¬

-

tons.

no

ties,^ It isCovident-diat the inflation fear continues to have
adverse effect on fiked income bearing issues.
Vl
.1

an

be

■

William

James K. Oyer

from

getting too tight. The purchase of more than $160,000,000 of
Treasury bills, directly .by the Central Banks, also smoothed the
path in Some measure for the Treasury refunding operation and in

;

F.

Neubert

completed in 1959 and that
cost subsequent to Oct. 31„

which will be paid foe
unexpended proceeds of pre¬
vious financings and other cash,
with

Robert N. Suydam

resources.

Upon completion of the current
the company's alumi¬

helped the distribution of the issues that were being
offered iii exchange for the February maturities. This is not an
way

program,

plants will have •
rated capacity of
701,000 tons a year. It is estimated?
by the company that its proven?
bauxite reserves are sufficient to*

a refunding or a new money venture.
•;>
Nonetheless, the exchange offer of the Treasury, although
giving a good return to the holders of the February maturities,:
a time when the inflation
psychology was very strong and
this meant that the one-year obligation was to get the bulk of the

($11,400,000,000)

since there is

^.extend maturities. Only $1,400,000,000
4%

year

note.

•''■ '

,

Institutions Continue
There is

a

very

was

t

great desire yet to

no

,

turned in for the three-

'.*■

strong demand for the short-term, most liquid
best way to

a

all

rities

William

Even

u:

if

the

Treasury

there is
a

level that might attract others than those that have an interest
presently in Government bonds, it is not expected that there would
be a real appreciable demand among institutional investors. This,

for the reason that

non-Federal securities, such as corporate bonds

and

tax-exempt issues, would most

still

make them

the large

attractive

more

investor.

likely give yields that would

than

the Government

bonds for

r*

?

.;

one-year

term

as

market's

of the

Elected

governing board in 1946, Mr. Dyer served
Vice Chairman in 1952. He has served on

committees.

the first time were
Robert N. Suydam,

to

three-year board posts for
Neubert, Cowen & Co.; and

F.

Merrill

to increase the coupon rate to

were

" \

'

Lynch, Pierce, Fenner & Smith, Inc., as regular-member
and Edward A. Harvey, L. A. Mathey & Co., and
Solomon Litt, Asiel & Co., as non-regular member governors.
Also elected to three-year terms as regular-member governors
were Charles * J. Booklet; John J. Mann ,Mann, Farrell, Jacobi &
Greene and Gerald A. Sexton, Sexton & Smith; all of whom
have served in the past.
Elected to three-year terms as nonregular member governors were Walter T. O'Hara, Thomson &
McKinnon and Adolph Woolner, Bache & Co. who *also have
governors

1957.

'

■*

Better Yield

John

Savings Bonds Would Help

on

Ludlow, J. A
Ludlow & Co., was
three-year term as trustee of the gratuity fund.
,

,

\ r On the other hand, there are not a few money market special¬
ists who are of the Opinion that the Treasury could distribute a

sizable

amount

of

bonds

to

the

ultimate

investor, in this case
individuals themselves. It is being noted that savings deposits are
continuing to increase and deposits with savings and loan associa¬
tions

also

are

on

the incline.

Pfd. Stock Offered

As against this the sales of savings

bonds

by the Treasury are down and redemptions in many cases
are running ahead of sales.
This seems to indicate that the saving
type of individual citizen is not too well satisfied with the rate of
return that is available in Government savings bonds.

.

,

Accordingly, it is believed in some quarters that if the yield on
Treasury savings bonds were made attractive enough, these individuals would be buyers in an important way. In this manner, the

Treasury would be able to finance part of its deficit through the
sale

bonds

of

would be

no

to

the

ultimate

investor, and

increase in deposits or in

the

Of securities to the ultimate investor is
which

to that extent there

money

one

supply. The sale

of the best

means

by

the

inflationary developments could be retarded since it
would result only in a shift in deposits and not the creation of new
ones as is the case when Government obligations are sold to the
commercial banks.

*

''t":

r

^

of

Reynolds

Metals

Co.

second

preferred stock, 4y2% convertible
series at par ($100 per share) was
made yesterday (Feb. 11)
by a
nationwide
underwriting
group
headed by

Dillon, Read & Co. Inc.,
Reynolds & Co., Inc., and Kuhn,
Loeb

Co.

&

vertible into

The

stock

common

is

con¬

stock at $75

subject to the com¬
rights of redemption.

share,

per

pany's

Proceeds

from

the

sale

of

the

convertible second preferred stock
will

be used to the extent of ap¬

the Federal Reserve Board are very adamant in the fight
about the balancing of the Federal budget, On
the other hand, the desire to increase expenditures is still very
strong and there are no signs yet that the inflationary group in
Congress will give in without a fight. This uncertainty over the
jbudget will keep the pressure on the money market, the bond
inarket, and interest rates.
ury and

inflation and

First So. Inv. Co..

WASHINGTON, D. C.—Ruth E.
Hutton is conducting a securities

(Special to The Financial Chronicle)

of

company's treasury for,

Southern

British Aluminium Co. Ltd. Addi¬

tional stock may be
if the

acquired, and

offer

Reynolds Metals Co., in con¬
junction with Tube Investments
Ltd.—a British company engaged
in

production of steel tubing
various manufactured arti¬

the

ordinary stock of The British Alu¬
minium Co. Ltd. The purpose of
this investment is to increase the

formerly with Wilder-Ramsey

and Renyx, Field & Co.

•:tJA. C. Allyn Adds

Officers

are

Claude

O.

Rainey, President; William L.
Kistle, Vice-President; and Justine
R. Smith, Secretary-Treasurer.

(Special so The Financial Chroniclf)

•CHICAGO,

111.—Calvin L. Mc-

Intyre has been added to the staff
of

A.

C.

Allyn & Co., 122. South
La Salle Street. Mr. Mclntyre was

Two With Firfst Southern
(Special -to The financial Chronicle)

ATLANTA, Ga.—Steven H. Ful¬

previously with Channer Securi¬

ler, \Ir. and Harvey C. Neisler are
now with First Southern Corpo¬

ties Company.

ration, 70 Fairlie Street, N. W.




the

stock

approximately

Aluminium

is

the

only

producer of primary aluminum in
the United Kingdom.
It has an
interest in Canadian British Alu¬

minium, which has recently com¬
pleted
an
aluminum reduction
plant at Baie Comeau, Canada. It
also has fabricating facilities in

Scot¬

It has interests in aluminum

and has

France
a

10%

reportedly taken

interest in "Fria" which is

reportedly constructing a plant
for the production of alumina in
to Reynolds Metals of its share of French West Africa from bauxite
the stock would be approximately deposits located in the area.
price,

rado Avenue.

was

of

and

minum

and

fabricated

aluminum

products and is actively engaged
in most phases of the aluminum
industry. During 1958, it produced
approximately 32% of the pri¬
mary
aluminum
made
in the

f

United

,

States.

In 1958,

the

company

Reynolds Metals and Tube In¬
have acquired in the
market and through an offer by

hill, Ala., having an annual rated
capacity of 112,500 tons of pri¬
mary aluminum, which together
with the facilities already located
there resulted in a total annual

Investments

to

holders

of

outstanding
ordinary
stock
of
British Aluminium, a total of ap¬

Pace, Jr.,| former Secrew

ration,
will
meeting
of
Customers'
Feb.

address
a
dinner
the Association of

Brokers

on

Tuesday,

The dinner, celetbrating the 20th anniversary of
the Association, will be held at
the

17,

1959.

-

Delmonico.

Hotel

Among those expected to attend:
Edward C. Werle, Johnson &
Chairman of the Board,*
New York Stock Exchange; Ed¬
ward T.
McCormack, Presidents
American
Stock
Exchange, andt
James R. Dyer, Chairman of the;*
Board, American Stock Exchange-.'
•

are

Wood,

Barbour Inv. Co.
Coast Exch. Member
LOS

ANGELES, Cal.—Election
M. Barbour, President
of
Barbour
Investment
Co., to
membership in the Pacific Coast
Stock Exchange through the pur¬
chase of a membership in the Los
Angeles Division, has been an¬
nounced
by
William H. Jones*
of

Jack

Division

Chairman.

Barbour

Investment

Co.

was

num

rated

Street.
Mr.
in

the

Barbour

securities

has

been

business

active
is

Lq*

Angeles since 1931. He has beer|
a partner in member firms of the
Exchange since 1935 and has pre¬
viously been a member of .the.
completed
Exchange from 1940 to 1955.

construction

Tube

*

organized by Mr. Barbour, prin¬
cipal of the firm, to engage in at
Reynolds Metals Co., including
general securities business and a»
its wholly-owned subsidiaries, is
corporate finance consultant. Of¬
a major producer of primary alu¬
fices are located at 111 West 7th

company's stake in the aluminum
industry in foreign countries.
vestments

-

,

Anniversary Dinner

the total cost

the

cles, is in the process of making
a
substantial investment in the

name

be

remaining stock is acquired

at

ration is engaging in a securities
business from offices at 611 Colo¬

firm

share

its

acquired will
$46,900,000.
British

to

in

short-term bank fabricators in Australia and India.
meet, the cost British Aluminium has interests
acquiring ordinary stock of The in bauxite reserves in Ghana and

consin

N. W. under the
of Ramsey-Hutton. She

of

interest

The cost to Reynolds

such stock.
Metals

entitled

be

51%

a

to

Investment and

Mortgage Corpo¬

..

interest and Tube

49%

f

tary of the Army and now Presi¬
dent of General Dynamics Corpo--

repay

incurred

business from offices at 2712 Wis¬

Avenue,

a

Investments

land.

to

loans

$50,000,000.

Ramsey-Hutton Formed

Fla.—First

will

Metals

nolds

receive

the United Kingdom and in

and

a

8,476,840

burse the

';
It is evident from testimony that is being given at the hearing's
before the various committees in yV'ashington that both the Treas¬

STUART,

.

proximately $46,900,000 to reim¬

Budget Developments Big Question Mark

on

Public offering of 550,000 shares

V

to

shares of
the ordinary stock of British Alu¬
minium as of Feb. 9, 1959, being
approximately 94% of the out¬
standing 9,000,000 shares.
Rey¬
proximately

Reynolds Metals 2nd

elected

.

-n

Frank

A.

:

.

Customers' Brokers

served before.

;

10?
1958,^

Oct.
31,
$376,151,094 as com-*'
pared with $375,796,380 for the;
same period in 1957. Consolidated;
net income applicable to commonstock for the
10 months ended
Oct. 31, 1958, amounted to $30,--,
470,161, or $2.72 per share as com-*,
pared with $30,150,944, or $2.6&
per share for the same period in*-

First elected to the

upward trend in interest rates is by staying on the nearterm end of the list. To be sure, this makes an extension of matu¬

•

the

for

ended

months

Solomon Litt

Harvey

of

revenues

amounted to

an

by the Treasury not an easy proposition because
only a very limited market for Government bonds.

A.

Edward

Chary of Long Governments

meet

-

Metals

Reynolds

Government issues because of the opinions that the

...

consolidated

Total

■" :

■■

:

provide at least 75 years' capacity;
operation of its present primary
aluminum
plants and the new
plant under construction.
\

caihe at

exchanges

aggregate

an

operations, whether it be
■

reduction

num

unusual development since the Federal Reserve Banks have in past
given heip to the money market when the Treasury is in one of its
.

estimates that this;,

400,000,

:

this

'

■

■

1958, will be approximately $85,-

The federal Reserve Banks, came to the aid of the banking
system last week, and by so doing prevented the money market

>

.

current construction program wilt

^Substantial Aid; From Federal Reserve

•.a'

*

company

The company

the

;;;A

years.

is currently con- !
structing an aluminum reduction"
plant of 100,000 tons annual rated
capacity near Massena, N. Y., on
the Saint Lawrence River, and is
increasing its annual sheet and
plate fabricating Capacity at Sheffield, Ala., and McCook, 111., byv
a
total of approximately 170,000'

aryrmatiirities

-

were

past two

The

McCormick, President

return that whs available in this

good

in capacities for

products

Exchange Board of Governors at the members' annual elections
9, according to an announcement by Edward T.

and in¬
fabricated
completed during

shipping' facilities

and

creases

Chairman of the

as

held February

of its maturities. The 3%%. certificate was the most
popular issue
in the refunding venture and this was in line with the ideas of the
;

R.

James
30

-:

Exchange Elects to
Governing Board

:

The

27

(783)

The Commercial and Financial Chronicle

.

.

of additional alumi¬

reduction facilities at Lister-

caDacitv

at

Listerhill

of

With Keller Brothers
(Special t» The Financial Chronicle)

BOSTON, Mass.
Porter is

now

Securities
Street.

—

1
•

.

Douglas D,

with Keller Brothers1

Co.,

Inc.,

Zerp

Court
-

<

The Commercial and Financial Chronicle

(784)

28

Pacific Coast

Exchange
Names George W. Davis

Tourist Tips for Investors
By ROGER \V. BABSON

George W. Davis of San Fran¬
cisco, senior partner of Davis,
Skaggs & Co., has been named as
new
Chairman of the Governing

Tips to tourists seeking a future place to live, employment
and investment opportunities are presented by financial pub¬
Babson

Mr.

lisher.

cites

of

some

the

pitfalls pertaining to

Our tourist business started in

small

investments.

as

a

some 50 or more
It grew steadily but
slowly, until the automobile revo¬

very

way

ago.

years

lutionized

The

it.

automo¬

ally

to

the north.

How

After

like

Beof

of

are

i

n

d

own.

longer

W.

Roger

e

Babson

month, or for
summer, as they used

stay

for

a

to do.

the

On

other

.helped

Of course, you

hand,

the

buying

any

change and

will

of

house or lot in
section, buy at the

tourist

end

the

a

tourist

This

season.

in September

means

(after Labor
in October in the north.

Day)

or

May

Motels As

an

profits

who travel

north in

the

sum¬

possible to make ends meet when

Cost of Living
Tourists

find

also

there

that

cost

the

of

living is less in the south. This
fact is encouraging more people to
retire
on
their
social
security
money. Furthermore, in the north
it

is

difficult

more

to get a part-time
der to secure

for

a

person

position in

or¬

the permitted extra

income up to $1,200 above social
security which he needs in order
to live reasonably comfortably.
In

•

southern

several

and

south-

American Stock Exch.

Makes
The

Appointments

American

Stock

Exchange

Board of Governors has approved

the reappointment,

were
very few motels; but
they are so thick that the
competition is terrible.

now

In

Governors

Mr.

of

Sr.,

the

McCormick

as

Public

market

stated

place.
prin¬

"the

cipal function of our three Public
Governors is to bring to the Ex¬

routes.

When

it may

be

road; but
Federal

not

directly engaged in the

securities business.

representatives

the

above

buys

one

on

then

motel,

a

heavily traveled
state, or the

a

a

the

may decide
toll road or free¬

new

way

which will leave

on

deserted highway.

a

Arbitration;

Walter

the

motel

T.

Conduct.

Reginald G. Foster, Edward A.

Each of these

has,

in

the

past,

and

Achiel

L.

Van

Wan-

seele

&

have joined Amott, Baker
Co., Incorporated, members of

the New York Stock

Exchange,

as

registered representatives.'
Mr.

with
150

Foster

will

be

associated

the firm's New York

Broadway, and will

ents

primarily

office,

serve

residing

cli¬

in

the

contributed much to the establish¬

New Jersey area.

ment

formerly associated with Moody's

of

the

basic

policies of this

Investors

Exchange."
Mrs.

Roebling is President and

Chairman
Co.

Dean

New

tion.

the

Trenton

Collins

York

School

of

of

of

is

head

University
Business

/

Trust

of

the

Graduate

Zeckendorf, President
Knapp, Inc., and a
figure in national hotel

leading
and

&

real

estate

.

circles,

is

also

to

York

investment firms.

Mr. Nadeau and Mr. Van Wanwill be associated with the

seele

firm's

Detroit

Building.
tensive

Van

ment

the

appointment

head

the ASE's

tees:

James

also announced

of

Chairmen

to

standing commit¬
Dyer,
Board

R.

Chairman, Executive Committee;
Adolph Woolner, Bache & Co.,
Committee
A.

on

Securities;

Harold

Rousselot,

& Co.,

Francis I. du Pont
Committee on Outside Su¬

pervision; Joseph F. Reilly, Com¬
mittee
John

on

Floor

Mr.

Wanseele

Penobscot

Nadeau

have

for

ex¬

having been

asso¬

years
with
various member firms of the New
York Stock

many

offices

are

Mann, Committee on Fi¬
Gerald A. Sexton, Sexton
Smith, Committee on Admis¬

maintained

in

Detroit,

Philadelphia,
Washing¬
ton, D. C., and Waterbury, Conn.

sions;
Paul
Porzelt,
Emanuel,
Deetjen
&
Co.,
Committee i on




Jesse M.

Co.,

Chairman

Los

was

Vice-

the

of

elected
Pacific

Coast

Stock Exchange Governing Board,

having previously served two
three-year terms as Governor of
the Los Angeles Division.
Other members of the 1959 Gov¬

erning Board
of Sutro &

Warren H. Berl

are

Co.; Calvin E. Duncan

of

Calvin E. Duncan &
Co.; McClarty Harbison of Harbison &
Henderson; and P. J. Shropshire
of Mitchum, Jones &
Templeton.

Ex-officio Board
be

Ronald

Members

Kaehler and

passed away Feb. 5.

trouble

we

ourselves

should be better

the subject, but
just kept right on piling Pelion on Ossa in the form
of debt. To give support to all such
easy reasoners is the
old New Deal idea that a deficit is a
good thing—and that
in any event we need to
get much greater growth in our
economy than the current rate and the way to do it is to
go further and further into debt.
we

on

-

How often is it said these

nation
"can

days that we, the richest
earth, have been doing only such arming as we

on

afford"

while

G.

of

San

geles

Francisco

Divisions

and

of

Stock Exchange.

Los

Pacific

An¬

Coast

Other officers of

the

Exchange will be Miss Ruth
Kapelsky of San Francisco, Sec¬
retary and Assistant Treasurer,

geles, Treasurer
Secretary.

Assistant

and

,

Belmont, Maloney &
Sharp, Div. Ch'men in
August Belmont, Vice-President
Dillon, Read & Co., Inc.; Rich¬
ard L. Maloney,
Jr., President of
the New York Savings
Bank; and
Dale E. Sharp, President of the
Guaranty Trust Co. of New York,
of

have accepted

appointment

as

in

Stern,

Di¬

vision Chairmen for the New York
Red
Cross Chapter's
1959 Fund

Campaign, it has been announced
by Eugene S. Hooper, President
of

Manufacturers

Chairman
nance

of

the

the

sion

and

Campaign's Fi¬

Section.

Mr. Belmont will
of

Co.

Trust

Investment
the

and

serve

as

Bankers

head
divi¬

Non-Member

Firms

division.
Mr. Maloney will

be Chairman

of the Savings Bank division.
Mr. Sharp will lead the Banks
and Trust

Companies division. He

named Guido F.

tive

Verbeck, Execu¬

Vice-President

Trust,

as

of

Guaranty

his deputy for the

cam¬

paign.
The

appeal

part of

a

for

members

opens

March

the

Kremlin

has

for

not

moment

a

Red

needs

in

the

coming

Support is sought to

en¬

able Red Cross to continue to aid

veterans

and

maintain

its

to

Health and
to

assure

in 1959.

and

have—or

been ordered

else

doubtless the
to

work

we

would

Russians

harder

and

have

like

to

longer

than otherwise would be needful—in order that there may

be

more

sputniks and
Work

more

rockets and

more

bombs.

Harder, Produce More

,

Now if it is

really necessary or wise for us to enlarge
our
defense effort substantially, the Soviet program of
sacrifice and harder work is precisely the policy we should
adopt — except, of course, that we would demand these
sacrifices of ourselves rather than have them ordered from
above. There

are too
many among us. however, who seem
that all that is required is to appropriate and
borrow more money for defense purposes while subsidies
and waste proceed apace, and while workmen demand
more and more
pay and are willing to do less and less
work. We can easily "afford" much more armament—if
we
really need it—and much more probing into space—
if there is really
anything to gain by it—but we certainly
cannot at the same time afford to pay farmers billions to
produce goods neither we nor any one else who can pay
for them want/ Neither can we afford to pour public funds
into housing in amounts far in excess of what the natural
forces would require or provide.

to suppose

Some way must

be found to re-teach the once familiar
vitally true doctrine that it is just as fatal for a
nation to live beyond its means as it is for the individual
to do so. If we are in serious danger of losing our as¬
cendancy as producers of goods and services, the trouble
lies in the fact that we are wasting our substance in pro¬
ducing goods that have no value and in the further truth
that, by and large, we are no longer willing to exert our¬
selves as in times past. Too .many of us have been lulled
into relaxation by talk of "productivity." "Productivity,",
as the term is now
employed, means simply output per
man working one hour. It
says nothing about the output
per man working a week or a year. Whether we as a
nation are producing more or less per man-year can not be
determined by any of the current figures compiled and
published under the style and title of "productivity." Nor
is there any hint in such statistics as to whether the right
things are being produced.
and still

Futile and Worse

is

national drive to obtain

Cross

required to do without much which

in abundance

and

1,

gifts totaling $95,000,000 to meet

months.

have been

will

W.

Presidents, respectively,

Paul,
the

E.

families;

|lesse M. Levy, Jr., partner
&

coming from—indeed

arms
are
made and improved in that country! Now it
probably is true that the Kremlin has decreed that a much
larger proportion of current output in that country shall
go into armaments than is true in this country. If so, it
clearly means that the rank and file of the Russian people

&

of

servicemen,

Levy, Jr.

Lawson, Levy, Williams

not

are

to believe that

permitted such considerations to limit the rate at which

Jones

H.

funds, which

area.

Amott, Baker & Co. has its
principal office in New York City.
Branch

did

seem

An¬

Exchange with offices

in the Detroit

America

rity Dealers. He has been actively
engaged in the securities invest¬

and

had

experience in the invest¬

business

ciated

office,

Both

Transactions;

J.

nance;

&

to

1950, Mr. Foster had been
employed by several leading New

of

McCormick

Assistant

tion in

President of the Board of Trustees

Mr.

as

was

Sales Manager. Prior
joining Moody's sales organiza¬

Mr.

Long Island University.

Mr. Foster

the General

Administra¬

Mr.

Webb

Service

of

Red Cross Drive

Amott, Baker & Co.

Nadeau

Association

and Thomas P. Phelan of Los An¬

O'Hara,
Thomson & McKinnon, Commit¬
tee on Public
Relations, and John
Brick, Paine, Webber, Jackson &
Curtis,
Committee
on
Business

Join

Vice-Chairman of

ment business since 1921.

eco¬

Government,

to build

change the point of view of per¬
sons

to

difficulty, one's investment
be wiped out by a change of

may

George Rowland Collins and Wil¬

Zeckendorf,

addition

nomic

by Edward T.

McCormick, Exchange President,
of Mrs. Mary G. Roebling, Dean
liam

while his
usually limited to six
less.
Even so, it was

or

was

former Vice-Chairman of

a

of them

many
off if

the National Association of Secu¬

for 12 months each year,

months

mer.

was

Jones

pay taxes, interest charges,
insurance, and maintenance costs

are

a

geles, President of the William H.

Investment

must

ists

avoiding

rather

Coast Stock Exchange
year.
In 1955-56 Mr.
President of Investment

William

Motels, as business investments,
are subject to
several disadvan¬
tages. For one thing, the owner

especially that of Florida, New
Mexico, and Arizona,—and also
Pacific
Coast.
Moreover,
many who go South as tourists re¬
main to take up residence.
This
does not apply, however, 10 tour¬

Davis

last

and is

June in the south.

or

W.

the Pacific

Bankers
When

George

San Francisco Division of the Ex¬

you

Davis

auto

the

nin g
of
the

buy any property in any
southern state without first seeing

business,

southern

the

ove r

Board

It

See

security program—and to the need for
balanced budget.

not at all about where the funds

Chair-

it.

Or in

entire

has

auto.

an

not

majority of
people who travel in the north by
auto during the summer stop at
motels
as
transients.
They no
the

work.
Tell
the
trade and your age,

and add the information that

be-

T h

as

G

<

are
perhaps not quite so scornful, or rather so
explicit, in their denunciation of any program of living
within our means, but their actions speak plainly
enough.
They want funds for their pet programs, and they worry

second

term

of

*

schemes

serving

his

Board

part-time

have

torn

g

of

partner

E. F. Hutton &

now

y

program

Na-

E.

m a n

Chamber your

New

gradually

of

Chamber

the

to

you

As We

;

is, according to these
makers, not the only reason for avoiding any
attempt to balance the budget. The violent proponents of
huge funds for the farmers, for large subsidies (or the
equivalent) for housing, and for various other ''welfare"

He

Mr. Davis is

would
live—in Florida, for in¬

to

page

But the need for better defense

lcy of Los An¬
geles. general

ing

ho¬

England

change.

to Buy?

Where

Thursday, February 12, 1959

Other Reasons Also Given

Ex¬

succeeds
Frank

.

that and the other

Coast

Stock

Commerce of that city and inquire
as to the opportunities for secur¬

busi¬

summer

and

deciding where

stance—write

the great

tels

low-

new

of

Company.

of

cause

of

The

great help to part-time workers.

a

hotel

business

ness,

part-time workers.

the

summer

lack

specialty

a

small economical cars, and this is

done

harm

states, new
industrial
locating which make
of employing these

concerns are

priced cars which can be bought
today enable families to have two

has actu¬

bile

western

from first

.

the

Board

Pacific

motels

Continued

.

their

Blood,

Safety programs; and

relief to disaster victims

Now it is,

of

course,

futile to demand

more

of every¬

producing or are willing to produce.
It is, in point of fact, much worse than futile. Fed as it is
certain to be by arbitrarily created bank deposits, it can
only result in what is known as inflation—higher prices
and wasteful investment of capital in forms and directions
which will not and can not pay their way out. We already
have vast inflationary funds in our economic system,

thing than

thanks to

we

war

are

efforts and

war

economic

errors.

A rela¬

tively small rise in the rate at which bank deposits are

Volume

189

The Commercial and Financial Chronicle

Number 5820

(785)
utilized

As

easily affords the funds to feed such an inflation.
large Federal deficit, no matter how originating, is but
one, though a very potent, factor in producing such an

the

A

awkward economic state of affairs which
the

long

let

remember

us

all—and

at

race

a

and

resources

expend

to

husband

V"'";"

of

their

Communist

to,. purchase
unlimited
quantities*of food, clothing, household appliances, and other useful

our

items

consumer

free

with

which

the

Soviet

average

..

citizen

and

measurably improve his standard
of living. I sincerely hope that the

7:

13

page

leaders

In

will

this

accept

77 7 '

truth,

Soviet

the

Union

only

thing

to

needs

the
if

do

it

really wishes to expand its trade

Setting the Record Straight

j

goods

whose

United
banned.

from

export

States

to

strategic

the

the

;

USSR

is

growth

machine

of

of
a

the

4,000—an

Communist

Mr.

w

m7

facts.

In
very.,, recent
addition to the 900
products which require no specific

that

licenses, the Department of Com¬

gressional

months,, in

the

licensed

has

merce

Soviet

articles

for

export to
such
varied

bloc

agricultural machinery,
scientific and professional instru¬
as:

ments,

galvanizing
equipment,
machinery, stainless steel
pipe, winders for steel mills, elec¬
trical heating units for industry,
antibiotics
antibiotics, polio vaccine, rubber
nrncpssinff' chemicals, a conveying
processing chemicals, a cAnvevins
and
system,
and
steel
sheet
textile

Mikoyan also complained
: discriminate
lagatast

we

Soviet exports

as

result of Con-

a

in

action

United

than

the

most-favored-nation
treatment.
This, he claims, has
served to place higher tariff duties
on Soviet exports to this country.
In actual fact, only a small por¬
tion
of
Soviet exports,
past or
current,
are
affected.
Further,
Communist

a

number

American

65%

of

our

technicians.

commercial

in

States

no

more

position of

Government.

will

firm

admit

and

that

establishing

dependable

commercial

relations with private firms in the
Free World does not come easily

1°

state

Communist

a

trading

jSSjSLJto

contldence in me American dusi
W

country like
the USSR extends most-favored-

Amon*,

r

drive

propaganda,

home

the

highly

Sino-Soviet

eco-

nomic offensive.

predominantly political moof this new activity is
and has been freely admitted
by
Soviet
leaders.
It
represents a strategic departure

tivation
obvious

traditional

Soviet

patThey have candidly said that
the export of capital
equipment is
not profitable to them.
^
their

offensive,

have

blended

with

economic

been

create and aggravate situations of
crisis. The short-term objective is

Mr.

Soviet

Default Not Cleared

Up

taken

treatment

^

developed

more

nations

Mikoyan,
this
action
was
by the United States Con-

aim is to create climates and atti-

inem 1 woulcl suggest.

tudes

First, make firm arrangements
to settle outstanding Soviet debts,
Second, permit a greater degree
of
access
by private American
firms to both producing and consuming units in the Soviet Union,

areas

Now, as to credits: How can we
be expected to extend them to the

gress in the year following the
outbreak of the Korean War. In

Soviet Union while that country is
in default to us on its past debts?

our

The

Union

Soviet

major

been

have

unable

settlement
counts.

is

the

in

newly-emerging

which will be conducive to

eventual

Communist take-over.

The United States has, for years,
been building a firm international
economic framework designed to
help the peoples of the newly-

we

American people, acting through

should

a

their Congress would find it hard
to contemplate extending most-

should be obvious from my

reach

ac-

the

civilian

type goods re-

maining in
the
hands
of
the
country concerned at the end of
the war.
Let me repeat:
I am
speaking of civilian type goods
only. In the case of the Soviet

Union,
$2.6

these

amounted

goods

billion.

When

we

last

Soviets

this
in

matter

trnVvl

1951,

AtrAf

payable over

O

a

1

to

offered

we

A V\

I fVY*VY1

Ct

Q

4*

to
1

AtXf

long term at low

$300 million. In an effort to move
this

and

forward

matter

thus

major obstacle to im-

a

proved economic relations, I told
Mr.

I should like to emphasize that
.

the

interest. The Soviet Union offered

eliminate

these issues, together with certain
minor technical impediments such

regret, showed no interest
in a
resumption of
these long stalled talks.
great

restrictions

as

i

/*» r~\

-ft

i

v»<-«

the

on
-f v»a»

D

importation
«

«

r*

~

-I

4.

of certain furs from Russia, do not
constitute
serious
obstacles
to

trade, if

—

as

*■«.

^

the Soviet leaders

allege

—

pand

commerce

they truly desire to
with

the

ex-

United

States.

Mikoyan that we were pre-

pared to renew negotiations im¬
mediately to seek a compromise
solution.
Mr.
Mikoyan,
to
my

Long-term private credits to

enacted

^ broad range of peaceful

goods

Johnson Act,

which was

long ago

1934. Short-

like to

credits,

I

con-

available

funds.

extension

by

the

Therefore, the
United States




I

have

discussing

been

Western

tions.

But

are

Charges

Soviet

Fatent

leaders,

Nonsense

including

„

Mr.

Mikoyan, have implied that the
United States is blocking the expansion

a

Socialist system.

This

is

The American people have al-

sympathized with the imstantly considering requests for poverished Soviet citizen.
They
loans to assist the newly-develop- have expressed their warm
syming countries of the Free World
which are far greater than the

and

rently

institution

an

representatives

our

meeting

in

Latin

of

agreed to

now

participate in such

are

cur-

Washington

with officials of the other Ameri-

States to draw up its charter.
I consider the creation of this new
can

institution to be

sound and for-

a

wardlooking
step
which
holds
great promise for the future de-

velopment of Latin America,

Fourth,
role

must emphasize the

we

of

our

Loan Fund

Development
of develop-

new

as a source

ment financing on flexible terms
of repayment. The Development

Loan

Fund

must

_

be

_

enabled

^

to

active part with the

more

Bank

Import

and

Bank

Export-

our

stimulating

in

an

for de-^

velopment programs.
y
Fifth,
we
must
continue

:

to

extend technical assistance to the

underdeveloped nations through
long-established programs of

our

bilateral

technical

cooperation,

and through the multi-lateral pro-

of the United Nations and

grams

the

Organization

American

of

States.

.

Finally,

I

cannot

stress

too

strongly the urgent need to call
upon

the vast human and financial

of the private sector of

resources

our economy to work with Goveminent in
pushing back
the
frontiers of Free World economic
development.

Government

alone

cannot do the job. Increased private

investment

abroad

the

and

enlistment of private managerial
.

High Growth

a

Rate
In

one of
important contributions

most

we can

When

talents

are

Soviet

the

Government

urgently

economic assistance, it

engages in

approaching this task,

make is to maintain

a

high

rate

of growth in our own

and

^rosplrs^nfto^ms81^!

coun-

transmitted through normal trade

ways

pathy

through

relate

to

1

J.*

•

J

the

United

States

industrialized
is

there

1

^

These

of

the

steps
necessary to
bolster the efforts
the newly-emerging peoples are
making on their own behalf.
are

some

take

must

leading
part in reducing barriers to world
they trade, both through our own pracand

We

na-

tices

uses

the

its

of

resources

entire

is compiete identity between the economy
and the Government. We
because

economy,

there

rf'orlaniz^tlon6 o?° bl-

patterns
haviorHoweverduring times of

in

increase

the Soviet

Union, together with its European
satellites and Communist China,
has

extended

billion

a

net

credits.

in

total

One

of

$2.4

billion

dollars worth of these credits was

in

underdeveloped countries of the
free world during 1957 was $1.7

Soviet

the past year,
trade turnover with

during

bloc

American

people. I look to our
minded
business

the

entire

internationally
•

.

»

.

community

take

to

m

i

■<

the chal-

up

lenge.
c

.

pr

a

ouiiiuei

navi^v

vjayicy

Samuel Alexander Gayley

bais|®d
5r*

?e a?e

Mr* Gayley had been in
ment business in Rhii-

adelphia.

Richard A. Cunningham

r

Richard
of

his

3

and have, wiped out
many of the benefits to the lesscan,

developed countries from Western
assistance. While fixed

A.

own

New York

Cunningham,
investment

City, passed

head

firm

away

in

Feb.

at the age of 53.

Downs, With J. A. Hogle
(Special to The Financial Chronicle)

material exports. Such price fluc-

tuations

the

require

of

the

ability of
more important aspect of Soviet less-developed countries to pay for
foreign economic policies:
The their own economic development
Soviet
Union's
determined
and through sales of their products,
resourceful drive to penetrate, and
Second, we must be sympathetic
eventually
capture, the newly- and open-minded regarding the
developing countries of Asia, problems which the less-developed
Africa and Latin America, through nations face as
a result of severe
trade and aid techniques.
price fluctuations of their raw
jn the last four years

of

achievement

will

efforts

a

through the General
Agreement on Tariffs and Trade.

the

objectives

our

combined

and

another, even This will

extended

their dire need following two

financing is required to
supplement
and
accelerate
the
contributions being made by the
normal flow of trade and private
investment.

Soviet
as

substantial
and
generous aid to the Soviet people

World Wars.

Public

First

other

should^

observe that we are

^

,

available

these goods

patent nonsense.

^

of

__

partners in the Free World,

under

Speaking

•

1

^

as

our

ing agency on normal commercial
7

__

to

terms.,

as

development

Success

It is the deliberate Soviet policy
self-sufficiency and
development
in
isolation from
for
the fact
that, despite large
percentage increases over the low
levels of Stalin's time, the second
largest economy in the world now
exports to the Free World at only
the level of a country the size of

of striving for

—just

available to the Soviet state trad-

as

credits are, however, freely

economic

and private capital channels to all
nations which participate with us

foreign economic policies

of peaceful trade in the
"fear" that the living standards of
Soviet
citizens
will
be
raised

term

discussion of the nature of Soviet

is freely available through normal
trade channels to the Soviet Union

a

defaulting country are prohibited

the

I
what
earlier

Denmark.

whatsoever

by

emphasize

establishment
of
a
special
lending institution to promote the

w

,,

with

settle this account for $800 million
V\

to

the

crisis in our past, private entertime to a country whose leaders
The major obstacle to an exprise
has
formed
an
effective
relentlessly
demonstrate
their
pansion of
Soviet
trade
on
a
in the Free World multilateral
working partnership with governhostility and constantly menace
mutually beneficial and lasting trading system.
ment.
We are now living in a
our national security,
basis, lies in the whole orienta¬
However, to accelerate the rate time of continuing crisis. We must
Obviously, any change in this tion of Soviet economic
policy of sound economic growth in the fjnd
ways to forge a new working
legislation will have to await a with regard to foreign trade.
underdeveloped
countries,
con- partnership to meet the challenge
definite improvement in the intersiderably more investment capital 0f our time.
national political climate.
Compares Exports to Denmark
is needed from outside sources.

dis-

...

cussed

trade,

like

settlements^ we favored-nation^ treatment aJ^this foreign trade:

have asked for partial payment to
cover

States-Soviet

United

of

our
sister
republics to the south have urged

in demand.

the

subject

leave

I

America

years,

and technical

States We Need

frequently
of political

the

Before

and resources.

so

only

the

Lend-Lease

of

these

In

to

on, as Soviet leaders
do in the interest
expediency.
-

country, most-favored-nation
treatment has more than a purely
commercial significance. The

which

with

country

herence to business principlesinstead of turning trade off and

Latin

many

of the Free World. The long-range increased flow of capital

I customs

on

Turns to

to provoke and capitalize on ten- take a
sions between the less-developed World
the

so

economic

For

cleverly

military assistance,

propaganda and diplomatic moves,
to inflame local passions and to

and

ac-

much in furthering
development of the
less-developed countries.
the

America. We have

The

the

DeveloiDment, which has

complished

own

Third, introduce a measure of developing nations realize their
predictability into Soviet foreign potential for growth as free citimatters, it is meaningless. For the trade relations, by making public zens. The Soviet offensive in the
copper
total
state
trading
monopoly their intentions with respect to underdeveloped countries has
; When
we hear the Soviets comdirects its trade as it sees fit and specific goods which they intend served to impart a greater sense
plaining about our export con- does not rely on use of tariffs. to buyand sel1 under their foreign of urgency to our efforts.
trols, we must remember that the Therefore,
the
grant of
most- trade plans
./
y
It is now an accepted imSoviet Union, through
its state favored-nation
treatment
to
a
.Fourth, take measures to pro- Perative of our national policy
trading monopoly maintains com- Communist country is a one-way vide assurance to foreigners of that the aspirations of the newlynlpfp
control
over
all
exnorts
affair in favor of that country genuine protection for private in- emerging peoples confront us with
permitting only those which are and must be compensated for by dustrial property rights as well as the most challenging task in our
considered to suit the Soviet ob- other considerations.
authors' rights.
history — one that calls for the
jective of the moment.
Mure important, as I reminded
Finally, demonstrate firmer ad- ready resPonse of our best minds
nation

foreign exchange

We must also expand the

lending

Skillful

agreements, and the exchange of trade
delegations, have all been used to

weapons

I

drawing

when

of

tern.

of

with-

1951

increase

single year—and their numbers
are
growing at a far faster rate

from

think

can

their

on

reserves.

and

to

grown

a

I

the

Mikoyan is a highly party whose leader has threatened
knowledgeable man and 'should to "bury" us, has understandably
know that this is far from the low priority.
actual

Soviet

re-

capacity of the International Bank for Reconstruction

is, quite simply, to begin

direct way to state the

industrial

hostile

dedicated

increase the

Fund to assist Free World
countries in meeting temporary
drains

well-indoc-

we must

of the International Mone-

tary

technicians operating in Asia, the

trading.

Government of credits to finance

the

of

Third,
sources

Middle East and Africa, has

In
as

the

1954.

that this upward trend is continu-

Suggestions to Restore Confidence
not classified

are

in

ing.

with us,

About Soviet Trade Desires
tives

double

trade

nature ^ojdd immediately publicized bilateral trade

brighten the shabby existence of

offer.

from

our

is blessed. Imports

economy

Soviet

Continued

such

and

am-

We offer the Soviets the oppor-

our

7V

than

more

trinated

and^ expansionist

tunity

strength in such a way as to
retain our vigor and our productiveness for a
long, long
time to come. It is imperative that we
give much more
careful and realistic thought to our situation and our
future.-

of

number

.

need

we

—

value

The

a

leaders.

an

many
be termed

billion

Preliminary data for 1958 indicate

bitions

state of affairs.

certainly be confronted
aggressive and hard-working Kremlin for a good
years to come. This will be a long race—if it is to

with

policy,

Government

aggressive

that, whatever the nature of

the current situation, this is no "crash"
That is to say, we shall almost

of national

States

welcome

significant impiovement in Soviet living standards, in the hope that this would
serve
to put
a
damper on the

to weaken us.

run

And

would

not fail in

can

matter

a

United

29!

BEVERLY

HILLS, Calif.—Cecil
J. Downs has become associated
with J. A. Hogle & Co., 428 North

economic

Camden Drive.

price stabilization schemes cannot provide the answer to these

has been in the investment business

for

problems,

and

Los

structive

there
actions

are

other

which

should be undertaken.

can

con-

and

many

Mr.

Downs, who

years

Angeles,

in

has

Chicago

recently

been with Boren & Co. and Daniel
D.

Weston & Co.

30

The Commercial and Financial Chronicle

(786)

Continued

NASD District No. 7

from

in the

4

page

Chicago

•

for sheet and

steel

some

Elects Officers
NASHVILLE,

Tenn.

Gus

—

G.

Halliburton, Vice-President, Equi¬
Securities

table

Nashville,

Corporation,

Chairman

elected

was

The State ot Trade and

Industry

last year.

Our preliminary totals stand at $25,386,559,311
$23,389,033,185 for the same week in 1958.
/
y ;

against

U. S.

on

Overseas Construction Stronger

contractors

construction

be in

may

for

of new

wave

a

foreign competition for prime contract awards on overseas mili¬
tary construction projects, reports "Engineering News-Record,"
the McGraw-Hill publication.
In the past, U. S. firms have generally received preference
such

in

work.

Foreign construction

companies, however, have
joint ventures to

been allowed to be partners with U. S. firms in
bid
Halliburton

G.

Gus

Chisholm

A.

No.

Committee

District

of

Frank

of

7

Association of Secu¬

the National

rities Dealers. Frank A. Chisholm,

elected Vice-Chairman.
The District comprises the states
of Florida, Georgia, South Caro¬
nah,

was

and

lina

Whipple,
with
office in Atlanta, is

the
Sec¬

of District Committee No.
The association has reclassified

retary
7.

Until

Districts.

its

Florida,

Alabama,

Mississippi,

isiana,
lina,

Georgia, Lou¬
South Caro¬

comprised

Tennessee

and

change,

the

France and

Under

it,

U.

for

Great

from

The

construction

officials
to

of
a

go

they

say

place

Department

Canadians

to

bid

in

under

are

construction

increasing

contracts

which

there

has

pressure

with

made

native

concessions,

elected

a

M.

Corporation, the organi¬
supplies investment
research and administrative serv-Service

that

zation

ices to

a

group

of investment com¬

panies which includes Tri-Continental Corporation, and the Broad
Street Group of Mutual Funds, it
was announced Feb. 10 by Francis
F.

Chairman

Randolph,

bf

the

Board and President.
.

Wilson

Mr.

joined

the invest¬

with
mill

foreign firm to build

a

secret installations.

Not
to

The

Corporation after three years'
experience in the buying depart¬
ment of a subsidiary of Tri-Continental Corporation. He has had
wide experience in

security anal¬

ysis
and at present
serves
as
Secretary of the Investment Com¬

Tri-Continental, Broad
Investing, National Inves¬

mittees of
Street

tors and Whitehall Fund.

a

Automakers

inventories at

own

to

a

Philadelphia

-

Florida, South Carolina and Ala¬
bama have joined the Exchange
in recent years. Jack M. McLarty
brings to the Exchange the first
with

a

home

office

in

the

Mississippi. The expan¬
sion of the Exchange is reflected
in a steady increase in business,
State

industry

seen

a

hurry.

Manufacturers of parts are expected
by June 30 to carry them through initial

on

the 1960

know

In some cases, they're placing duplicate orders.
As for other steel
products, demand for plates has picked

tremendously, and

up

producers expect full operations through
June. Structural mills are
enjoying better business than they've
had in months. Oil companies are
moving ahead with their drilling
programs and placing substantial orders
for-tubing and casing.
Steelmaking operations last week climbed 1 point to 79%
of capacity.
Production was about 2,237,000 net tons of steel
for ingots and castings, largest of
any week since June 3, 1957.
some

Near-record
said.

Based

on

metalworking profits are on the way, "Steel"
trends and
industry leader predictions, here's what

of

1,100,094 shares being traded in
January, 1959, the largest volume
of any January since 1930.

earnings for aluminum producers
office, and electrical equipment;
products.

Near-record profits for

component

makers

and

and

makers

of

steelmakers, most instrument people,

and

some

producers

of

consumer

some

durable

new

home

"good"

are

of this year.

"Steel"

A
some

5

year.

Capital goods industries will not fare so well. Their
earnings
inching upward too slowly to hit the 1957 level
by the end

to

\
survey

components
10%

are

are

indicated

for

stampings;

a

4

to

7%

increase

for

Allan

Lefcourt

have

become

associated with Bruns, Nordeman

& Co.,

321 Broadway, New York

members of the New York
Exchange,
as
registered
representatives.
City,

Stock

(Special to The FmAsrciAi, Chronicle)

BOSTON, Mass. — Edward M.
Armstrong, Jr., Donald W. Rosche,
Chester N. Smith and Josephine
Au
Sullivan are now affiliated
with

Graham

&

King,

Court Streets




Inc.,

16

rolling

-

American

Iron

tion

for

1947-49)

Actual

Age" said the mills report growing signs that steelusing companies are buying for actual need as well as for in¬

ventory-building in case there is a strike
incoming orders are firm and solid.
don't
tons

have
a

are no

next summer.
.

They

output

the

*Index

-

phonies in this thing," said one steel man. "You
suddenly jumping from 100 tons to 1,000
increases line up with past
patterns on our

customers

month.

%

,

.

care¬

announced

that

the

for

Feb.

of

The

.

actual rate of

*142.4%

of

%

ago.

week

2

week

equal

was

80.8%

to

of

.

the

1959 annual capacity of 147,633,670 net
for the week of Feb. 9 is 83.5%.
month

a

the

ago

year ago

rate

*131.4%

was

and

the actual weekly production

90%.

or

production is based

"

on

average

weekly

V

production

.

v

-

•

;

,

,

Steelmaking Capacity: Free World

free

capacity

1,

an

week

a

percentage

like

for 1947-1949.

world

between

added

1955

53.8

million

net

tons

vs.

to

Russia

;

steelmaking

and

1.958, while Russia and its satellites
added 19.8 million tons, American Iron and Steel Institute reported
on the basis of
reports bv the United Nations.
^
Such comparisons have been rare because few foreign nations
regularly estimate steel capacity as is done annually for the United

States by the Institute.
Between 1955 and

nearly
net

14.9

million

tons.

:•%%'.
1958, this country

net

vv'%

•

Meanwhile,

tons,

while

<; /
increased capacity by
Russia added 10.3 million

v-

the

:

' V

./

free

United States increased

nations

of

the

world

other

their aggregate steel making

nearly 38.9 million tons against about 9.5
all the countries under Russian

than

the

capacity by

million tons added

by

domination.

World steelmaking capacity, at nearly 372.5 million
1958, increased nearly 25% from the 1955 level.

in

net tons

Since the United

Nations capacity figures were reported late
last year, Russia and China have announced major steel
industry
expansion programs.

Automobile Production Down 2%
Production

in the week beginning Feb. 2 was calculated by
117,050 cars, 2% below previous week's total of 119,678, and 25,142 trucks, 1% more than the earlier week's output
of 24,938 units.
In the corresponding week last year, 109,028
cars
and 19,481 trucks were turned out.

Ward's

at

There

was

no output of Plymouth
or Dodge automobiles in
Ward's said, although Chrysler Corp.'s De SotoChrysler and Imperial plants in Detroit operated. The corpora¬
tion's assembly activity has been hampered since
mid-January
by a Pittsburgh Plate Glass Co. strike.

latest

week,

Ward's said all General Motors plants were on
five-day pro¬
Throughout the remainder of the-industry, eight car-

grams.

making factories scheduled Monday through Saturday work.
cluded

were

facility,

five

Ford

American

Packard in South
The

have

Whether

not

Corp.'s

in

In¬

plants, Lincoln's Wixom, Mich.,
Wis., and Studebaker-

Kenosha,

Bend, Ind.

of

or

Division

Motors

statistical

hopes

publication

producing
the

reported that car
500,000
automobiles

volume

is

reached

manufacturers
in
February.
essentially on

depends

Pittsburgh Plate Glass Co. strike

resumption

of

normal

production

rates.

and

Output

Chrysler
of

cars

January totaled 545,757 units.

January New Car Sales 12.6% Above Last Year
car

dealers boosted their

January auto sales 12.6% over
428,000 volume that was equiv¬
5,052,000 annual rate not counting 400,000 forecast im¬

380,000
a

a

year

ago,

posting

a

ports.
Ward's

.

at

16,780

ran

Automotive

units daily,

Reports said that Jan. 21-31 deliveries,
dipped 1% under the mid-month rate but

14.1% above the 14,700 in Jan. 21-31 last year.
The

say

Institute

compared with

as

Estimated

For

the

"Iron

Steel

and

capacity and 2,288,000 tons

alent to

Strike-hedge buying is only part of the story behind the
upsurge in steel demand, according to "The Iron
Age," national
metalworking weekly.

/

;

operating rate of steel companies will average *147.1% of steel
capacity for the week beginning Feb. 9, equivalent to 2,363,000
tons of ingot and steel castings (based on average
weekly produc¬

in

Big Factor in Steel Buying

still

is

.space

of capacity, expects to hit a peak of about 90%.

settlement of the

Need

sheet
The mills
available will be
purposes,

Steel Production Continues to Clinib
The

price cutting is expected in gears.
The magazine's composite on the
prime grade of scarp in¬
creased for the fourth straight week.
At $42.50 a gross ton, it is
up 83 cents.

"There

Four With Graham, King

little

at 80%

now

fasteners; and a 5% hike for antifriction bearings. Price stability
is ahead for diecastings, screw machine
products, and relays. Less

Actual

and

are
lagging. Both light and heavy plate orders are being
fully screened in what amounts to a system of allocations.

shows

small, sporadic hikes in prices of
expected in the first half. Spotty hikes of

intents

all

The mills expect standard pipe to hit capacity in May and June.
Merchant wire products are still weak.
Standard structurals

construction.
Some aircraft and automotive firms will chalk
up records or nearrecord profits; others will settle for a

for

to capacity by April.
Wide flange beams will be sold out for the
second quarter. Seamless pipe mills will go to-100% "of
-capacity
this month or in March. One maker of manufacturers wire and

the

goods—especially those closely tied to the trend in

With Bruns, Nordeman
Harry Bonell, Thomas R. Lanese

what

that

New

and

that

products (sheets, strip, and
is spreading to other steel items.
"Iron Age" said the outlook now is for bar mills to be booked

cans;

fabricated

some

that everyone gets

see

coated sheets)

cars.

warrant.

is

care

v%

„

said

snapped up before too long. - "
%
Market strength in flat-rolled

scrambling

were

the

Knowing they must compete with automotive and appliance
steel buyers in a tight
market, small consumers are ordering
bigger tonnages for first half delivery than business conditions

member

Balti¬
more
Stock
Exchange.
Fifteen
firms with home offices in Georgia,

firm

has

to expect in the first half:

Pa.—Kroeze,
as

consumers

inventories,

spurring the buildup. Although building their
a
leisurely pace, they're urging suppliers to

lay in enough metal

runs

McLarty & Co., of Jackson, Miss.,
admitted

are

accumulate steel in

Phila.-Balt. Exch. Member

the

1956, when

■

metal

of

fall of

Demand for sheets has reached such a pitch that most mills
Some are sold out of all flat-rolled prod¬

farm,

have been

the

this

capacity for the first six months has been spoken for.

Buying Rush

allocating tonnage.
ucts through June.
are

Kroeze, McLarty & Co.

Tirm

since

strike-depleted
buying rush.

Record

PHILADELPHIA,

office

magazine

Added

replenish

such

for

reason

said "Iron Age," steel sales offices are dickering
management to- squeeze valued accounts onto

cases,

home

rolling schedules..

production 2,111.000 tons. A
was placed at 1,445,000 tons

ment research staff of Union Serv¬
ice

regular customers and partly to

some

and the

reluctance to allow

cannot

carefully screening orders, partly to take

tons.

S.

Another

sheet and strip.

on

are

utilization of the Jan.

Order books are filling up so
rapidly that steelmakers fear
they won't be able to satisfy their customers, "Steel" magazine

Wilson has been
Vice-President of Union
J.

their

competition for prime contracts

Demand for Steel Reminiscent of 1956

Of Union Service

mills

Still, there is a factor favoring U. S. contractors; the secrecy
surrounding much of the overseas military construction program
natural U.

mills

fair shake.
In

reported Feb. 9.

Robert

the

with U. S. firms.

District No. 9.

R. J. M. Wilson V.-P.

waited

mills, especially

contracts

military bases—and normally the awards

Defense

allows

now

the

nationals.

own

Canada

firms.

award

warehouses when

to

said that many steel users who
too long to place orders -are being turned down by the

Britain, for instance, the U. S. already
a new procedure, the magazine reports.

countries

two

S.-financed

their

to

the

Pentagon

part of Tennessee.

a

Bennett
NASD

In

has been forced to accept

happening is that

delivery schedules^
metalworking weekly

rod is

be allowed to
partners. And
U. S. Defense officials concede there is a growing trend to permit
foreign firms to bid on and win military construction prime
awards,

Vice-President, Varne-

Executive

doe, Chisholm & Co., Inc., Savan¬

prime awards.

on

Now, foreign construction companies may
take prime contracts on their own—without U. S.

mill-sized orders

some

What apparently is

turning

are

The

that

Bank
clearings for New York City totaled $13,645,032,447
against $12,831,635,428 or 6.3% gain for week ended Feb. 7, Chi¬
cago $1,197,344,524 compared with $1,076,430,631 or a 11.2% gain
and Philadelphia
$1,088,000,000 against $942,000,000 or 15.5%
gain over same week in 1958.
;,

Foreign Competition

meet

Thursday. February 12, 1959

.

have started to receive

area

coated sheet.

users

.

.

month-end

close-out gave entire January
16,458 sales
selling day compared with 14,615 last year and was
restricted by freezing weather in
many high-volume mid-west
for

each

sales

areas.

•

*

.

.

.

...

.

The

share of the market."
"Iron Age" said steel

Electric Output Higher Than in Previous Week
men

report

their, customers

are

not

just issuing blanket orders for the first half or even for
a given
month.
They want to know the week shipments will arrive.
This indicates they
probably need the steel to meet rising pro¬
duction levels in their

own operations.
Another straw in the wind: Steel
service centers (warehouses)

-

The amount of electric
energy distributed by the electric light
industry for the week ended Saturday, Feb.
7, was
estimated at 13,292,000 kwh.,
according to the Edison Electric
Institute. Output the past week was above
the level of the pre¬
ceding week.
r
and .power

For

the

week

encled

Feb.

7

output increased

by 141,000,000

Volume

The Commercial and Financial Chronicle

Number 5820

189

(787)

kwh.

above that of the previous week, and showed a gain of
1,003,000,000 kwh. above that of the comparable 1958 week.

stantial

offer

that

be

inter¬

are

will

ready

esting, wait until
to

Securities Salesman's Corner

Carloadiiigs Drop 4.9% Above Preceding Week
Loading of revenue freight for the week ended Jan. 31, totaled
582,636 cars, the Association of American Railroads announced,
an

increase of 27,089 cars or

total for the

5.8%

an

65,336

cars or

Lumber

Shipments Show 5.4% Gain

Lumber shipments of 468 mills reporting to the National Lum-"
ber Trade Barometer were '5.4% above production for the week
ended Jan. 31. In the same week new orders of these mills were
,

that

■

•

■/•■

,

column

suggests
of sales procedure after
met such

basis.

-■-!

methods
you have

/_%•';
Know Your Facts

The

investor

who

has

lions
is

Commercial
I ended

Feb

5

from

failures

industrial

and

in

322

the

Sharply ; >!/ //-

fell

to. 271

in

the

enced business man

>/

investor.

week

command

preceding week, reported Dun &

i

will

of

the

week-to-week

total of 92

decrease.

The

Middle

Atlantic

States

an

as

his

contacts
cross-checking

for

that

comes

to

in¬

him.

He

have

and
to

as

promoters

him

over

the

•v

that

salesman

hind him that

can

occasional

an

has

a

come

re¬

as

con-

pro¬

sufficiently interesting to him to
investigate it.
So number one
know

facts,

your

have

a

oversell.

the

as

favorable

factors

were

not

you

heavily weighted
were unfav¬
would not be trying to

If there is any field of secu¬
rity salesmanship that calls for a
completely objective, analytical,
factual approach it is when you
are dealing with this type of in¬
vestor and you have something
worthwhile to offer. Generalities,
guesses, hunches, overstatements,
are out. Unless you have the facts,

firm be¬
up with

meritorious

and

the

situation

looks

back¬

week

Wholesale Food Price Index Drops 0.2%

of

price index, as compiled by Dun & Brad$6.19 on Feb. 3, a drop of 0.2% from the.
prior week s figure of $6.20. A year ago, however, the figurq was
$6.47, or 4.3% higher. As a matter of fact, ..the week of Feb. 3
marked the fifth successive week that the index was below that
of the similar date in 1958.
1.
*
Commodities quoted higher in the week, erided Feb. 3 were
flour, rye, coffee, eggs, and molasses. IiOwer in wholesale cost
were corn, oats, barley, beef, .hams,' bellies, lard, butter, sugar,
cottonseed oil, cocoa, steers, and hogs.!,'\
The index represents the sum total of Jhe price per pound
Inc., stood

at

.

/

of 31

foodstuffs and paeats in

generaluse. It is not a cost-ofliving index. Its chief function is to show the general trend of
food prices at the wholesale level. Figure^ Jor recent dates follow: /
raw

Wholesale Commodity Price
the

Index Rises Slightly

'

Higher prices on grairjs, hogs,- lambs and steel scrap helped
general commodity price level climb over that of the prior

week. -The Daily Wholesale Commoditv Price: Index, conwiled by
Dun

date

Bradstreet, Inc., rose to 276,47- on Feb. 9 from 274.84 a
earlier/ but was noticeably below the 279.08 of the similar

&

week
a

year ago.

v,

;

i

:

A

slight reduction in some salable supplies-resulted in a steady
most grain prices during the week;
Stimulated by in¬
creased export business, wheat .prices climbed moderately, and
.

-

rise

/

in

supplies were slightly reduced.h Domestic buying of wheat-was
close to the

prior/week.--

Although the buying of corn was sluggish again, prices were
Light offerings somewhat restricted volume in oats, and
prices were sustained at prior week levels.; Rye prices advanced
substantially as trading moved up. Soybean trading slackened
•during the week and orders in the meal, and oil markets declined;
this resulted in a slight decrease in priced. ;;

%

steady.

.

Despite gains in wheat prices/flour prices declined moderately
Buying was restricted to fill-in orders. A high level of
helped' rice prices match those
of a week earlier. Rice distributors were stocking up for the forth¬
coming Lenten season.
f
There was another slight dip in cocoa prices.
Trading was
this week.

both domestic and export buying

,

.

sluggish at the beginning of the week, but, picked up at the end of
v, the period. Although coffee trading tagged at the end of the week,
••prices: finished close to those of the preceding week. Despite a
moderate rise in volume, sugar prices were unchanged during the
;

i

week.

>;

Hog receipts fell moderately in Chicago this week and trading

picked up resuJtingJn a marked rise in prices; The salable supply
; of Jambs. was lieht, but .trading was sustained at a high: level and
f. prices, pioy.©d up. Although cattle;! receipts: were. reduced,- prices
pn steers reroomed closethe pre^edmgiweek; trading in^steers
was down slightly.
-/•
'
r
;

,




holds true for the

larger investor

in general securities as well. It is
a mistake to offer any large in¬
vestor

few

a

anything

hundred

shares *>f

matter how attractive
If you can't put a sub¬

no

it may be.

Moderately Over Last Year's Volume

Retail trade for the week ended Feb. 4

was

sparked by

large blocks of securities and who
trades and operates in the higher
echelons
friends

of

finance

also

associates

and

who

has
*re

only too willing to go along with
him. If a situation is promising
and your man may only be able to
take a part of it; if he likes it that
won't stop him. He will acquire
some associates and you will still
work with him and through him.
When you are ready to show him
something | worthwhile don't let
size deter you.
He will be an¬
noyed if you underestimate fiis
investment capacity, but you will
not risk his displeasure if you

»

4*

•

Undue Familiarity Unnecessary

success.

If you

cise, scrupulously honest in your
presentation,
completely
sold
yourself on the possibilities and
attractiveness of your proposal,

smaller-than-expected loan entries.

Retail Trade Up

many

is not essential to

many

The wholesale food

street,

all, he

have the proposition for which he
is looking and you can be con¬

traders were influenced by reports on
the governments export program for 1959-60. However, volume at
the beginning of the week was sluggish due to the announcement
as

First of

busy to keep track of too
small investments.
This

In
your
relations with 'the
larger investor undue familiarity

prices on the New York Cotton Exchange were close to
those of the prior week. There was a slight rise in trading at the
of the

too

very 'overestimate it.

promising apd you are ready to
back
the proposal with; a sub-

Cotton

end

small little pieces of many dif¬

go,

sell the deal.

posal for investment that will be
*

well

orable,

man
is not going to give
salesman his time unless he

tacts, connections, and

it
from

against those which

This

believes

to

time when you must

one

think "big." This type of investor
■■will not be interested in picking

is

company,

second chance

a

anything else.

Keep Your Sights High
This is

up

thousand to several mil¬
young

salesmanship is out here
it you probably

ferent situations.

Restrained

some

word

cess

stinctively size you up. He will
judge your candor, your general
background, the way you present
your
proposition, the way you
handle your facts.
any

action

.

involved, the better you too will
be able to present your proposi¬
tion. If the possibilities for suc¬

years, and you can be certain that
when he meets you he will in¬

against 117, the East North Central 41 as
against 57, and the South Atlantic 11 as against 26. Contrasting
increases prevailed in four regions, with the Pacific total edging
to 61 from 60. In all except two regions; fe"wer businesses failed
than in the corresponding week of last year.
The most noticeable declines appeared in the South Atlantic and South Central
States where tolls were less than half as heavy as in 1958. ~
a

have

at

many
salesmen
who have come

Five of the nine major geographic regions accounted for all

ported

well

as

fatal

the

good legal advice. He
will
have
had
background
in
meeting
with
and
evaluating

.

%

and

formation

considerably less numerous than a year ago when 342 occurred,
and they were slightly below the 287 in 1957. Compared with the
prewar failure level, the toll was down 15% from the 318 in the
comparable week of 1939.
%
\
'
Casualties involving liabilities of $5,000 or more declined to
235 from 264 in the previous week and 247 last year. A downturn
also prevailed among small failures, those with liabilities under
$5,000, which dipped to 36 from 58 a week earlier and 45 in the
similar week a year ago. Liabilities in excess, of $100,000 were in¬
curred by 30 of the failing concerns as against 31 in the preceding
week
./
!•; %
i
All industry and trade groups had lower, failures during the
week, although the dip in manufacturing was slight, to 47 from
49.
Meanwhile, the toll among retailers, fell to 133 from 159,
among wholesalers to 22 from 31, among construction contractors
to 44 from 52, and among commercial services to 25 from 31.
Fewer businesses succumbed than last year in all lines; the sharp¬
est decline from 1958 occurred in retail trade and the mildest dip
appeared in the service group.
b
:

will

many

checking

Bradstreet. Inc. ;At the lowest level in five weeks, casualties were
•

He

in

year

meet him

methodical, practical and experi¬
BusinessFailures Down

favorable

wait

to

Right
stantial block together, don't offer
the first time you it. Ycta will show your lack of ex¬
you must present both
perience and competence if you
sides of your proposition. He will
do this.
desire both the pros and the cons.
It is better to offer a larger
He expects to have them placed
block than you believe your man
before him by the salesman who
may be able to buy than to show
brings any situation to his atten¬ him
something too small.
Many
tion.
The preliminary discovery,
times a substantial commitment
the original investigation must be
can come to you from several peo¬
made by your firm and the more
ple rather than from one.
Re¬
you know about the unfavorable
member the man who deals in

special type of situations that

involve greater than average risk
is going to be a well informed,

% -;■

basis for

part.

hundred

substan¬

tial funds for investment in thesg;
very

his

Overselling is not indicated iri
any phase of security * salesman¬
ship. If you are attempting to do
business with this type of in¬
vestor,
who: can
place several

favorable

on a

real

Be

'

31, as compared with the preceding
■?. week production of reporting mills was 2.'4% below; shipments
were 4.6%; above; new orders were 2.8% below.
Compared with;
the corresponding week in 1958, production of reporting mills was
0.1% below; shipments were 12.1% above; and new orders were
above.

a

on

individual and have

an

become acquainted

For the week ended Jan.

18;2%

in

a

to show him

ground knowledge of the secu¬
markets, the general eco¬
nomic situation, and don't show
this man anything unless it offers

obtaining a
larger profit from his spec¬

week's

.

-

interested

or

Glamour

rities

ulative activities than the average
run
of
security buyers.
This

production. Unfilled orders of reporting mills amounted
to 41% of stocks.
For reporting softwood mills, unfilled orders
were equivalent to 20 days' production at the current
rate, and,
gross stocks were equivalent to 45 days' production. '
,-//%./%u
{}■'■ For the year-to-date, shipments of reporting identical mills
were 0.8% above production; new orders were 9.1%
above produclion.

is

much

11 % above

-

During the past few weeks we
particular type
ultra-sophisticated investor

have discussed the
of

is

—and if you try
will never have

Developing the "Special Situation" Account

corresponding week in 1958, but a decrease of
10.1% below the corresponding week in 1957.

It

untiUyou have
something good than try to sell
this man something that won't fit.

increase of 32,104 cars or

above the

better

this.

months

By JOHN BUTTON

4.9% below the preceding week. The

latest week reflected

you

do

31

good!,

and you have done a complete
job of preliminary investigation;

weather in many areas, continued clearance sales promotions, and

make

interest in Spring merchandise boosting the total dollar volume!
moderately over a year ago. The most noticeable year-to-year
gains occurred in sales of apparel, furniture, and some appliances.
Scattered reports indicate that the call for new passenger cars

your conference and lay the facts
on the table.
These very choice
accounts
can
not be found on

rose

that matter

appreciably

and

substantial

year-to-year

increases

were

maintained.
The
1

total

dollar

volume

of

retail

trade

in

the

latest

week

to 5%

collected

poultry.

Nationwide Department Store Sales Up 8%
Department store sales
the Federal Reserve

advanced

8%

street

every

corner; neither
situations be

can

covered in which

higher than a year ago, according to spot estimates
by Dun & Bradstreet, Inc. Regional estimates varied
from the comparable 1958 levels by the following percentages:
Pacific Coast +5 to 4-9; West North Central +4 to -f-8; South
Atlantic, East South Central, and Mountain -j-2 to -f-6; West
South Central -f 1 to +5; Middle Atlantic —1 to +3; East North
Central —2 to +2; New England —5 to —1.
Apparel retailers reported marked gains in sales of women's
Spring dresses, suits, and sportswear during the week, and
volume in- Winter coats, accessories, and lingerie was sustained
at a high level.
There were appreciable year-to-year increases
in men's apparel, especially suits and hats.
Increased buying of
girls' dresses and skirts and boys' jackets and sports shirts boosted
over-all volume in children's clothing moderately over a year ago.
Retail stocks in some lines of girls' apparel were limited.
A rise in purchases of television sets, radios, lamps, and small
electrical housewares offset declines in laundry equipment and
refrigerators helping total appliance sales climb slightly over last
year. Shoppers stepped up their buying of upholstered living room
chairs and bedroom sets holding furniture volume close to the
prior week; marked gains over a year ago prevailed. While the
call for linens advanced from the prior week, interest in draperies
and floor coverings was unchanged.
Food buying heightened this week.
Housewives increased
their purchases of canned goods, frozen juicp concentrates, and
was

>

appointment, set

your

above

week, Jan. 24,

an

ended Jan. 31

a

on a

Board's

country-wide basis

as

taken from

Index for the week ended Jan. 31,

the like period last year.

increase of 5%

gain of 6%

was

In the preceding
reported. For the four weeks
registered.

they

may

*up

jfor
un¬

be in¬

terested without considerable ef¬

fort, however, when you do find
combination, the rewards are
high if you can put the right man
in touch with the right deal.

this

R. W.

Pressprich & Co.
Appoints S. F. Manager

SAN

FRANCISCO, Calif.—Gor¬

don Dickinson Williams has been

appointed

Manager of the San
office, 605 Market
Street, of the investment firm of
R. W. Pressprich & Co., members
Francisco

of the New York Stock
Brock

Exchange.
Thompson has become ;as-

sociated

with

the

same

office.

P. L. Davies Director
Paul L. Davies has been nomi¬

nated'for
man

a

director of the Leh¬

Corporation, New York .City.

Timothy F. Allen
Timothy
Field
Allen
passed
away at the age of 85. Mr. Allen
who

had

been

in

the investment

business since 1895, was a limited

partner in

W.

E.

Burnet

&

Co.,

New York.

was

According to the Federal Reserve System department store
sales in New York City for the week ended Jan. 31 showed a 4%
increase from that of the like period last year. In the preceding
week, vJan. 24, an increase of 1% was reported. For the four
weeks ended Jan. 31 an increase of 2% was noted over the volume
iri the corresponding period in 1958.
/

Two With Kalman & Co.
(Special to The Financial Chronicee)

ST.

PAUL, Minn. — Paul A.
Lynch and Roger T. Whitney are
now

affiliated

with

Kalman

&

Company, Inc., Endicott Building.

The Commercial and Financial Chronicle

(788)

32

it

as

in

is

(cheating

immorality

savers). It is dangerous, for under
fundamentally deflationary con¬
ditions
it
may
work well for

leading

years,

will

it

people to believe

a

work

is

It

forever.

pre¬

assumes that

scheduled

events

never

while other,

more

come

to

important,

take place which are not
mentioned in this outline.

matters
even

The author's object

is not to outdo

inflation, however long
compounded,
will
not
cause

Nostradamus

rather

trouble. It is unrealistic in that it

without

posterous because it
little

a

Delaware & Hudson
have which would add
recently. before taxes.

Delaware & Hudson shares

marketwise

little

done

There have been some

doubts as to

The

share

a

coal

the

will

com¬

annual pany subsidiary remains clouded.
dividend rate. Consolidated 1958 Hudson Coal is faced with lack of
:jiet income amounted to only $1.62 export demand and further loss of
a share as compared with .$4.45 a
its Canadian shipments. The com¬
share
in
1957.
However,
1959 pany also has been faced with a
prospects indicate that the divi¬ large increase in wages which be¬
dend rate will be maintained.
came effective
on Feb.
1. Losses
Earnings of the railroad sub¬ of the coal company last year rose
sidiary are expected to show im¬ to $683,000 from $488,000 in 1957.
provements this year. For exam¬ Output last year
totaled
only
ple, iron ore shipments, which are 1,800,000 tons mined as compared
an
important traffic item, are with 2,200,000 tons in 1957. How¬
expected to increase. Other traffic ever, the coal company continues
can
be anticipated to be stimu¬ as a source of traffic and gen¬
lated by the rising economy, and erates cash.
;
consequently favorable carloading
In view of improved traffic and
comparisons are looked for in better
operations by the coal com¬
coming months.
%
pany, it is possible that earnings
the maintenance of the $2

dollar

revenue

to. pretax

down

despite the drop in general

net,

In view of this showing,

business.
D. &

in

culty
gross

have little diffi¬

should

H.

bringing

higher

down

Another

net.

to

revenues

important factor would be an in¬
in normal per diem

crease

around

to

Continued

from

credits

annually,

$1,000,000

Delaware
to be

in

inflation

induced

at

aimed

ings

income

Current

a

flation.

exceptionally

The

raise

after

sideration

after

contract
clauses

providing

automatic

for

if there is

increases

contains

contract

a

rise

this

it

were

Foregoing

A Critical View of the

moment

not

A

the

wild

fact

stock
that

legitimacy of
present day fears concerning con¬
perfect tinuing inflation is inherent in the

attests

market

to

public aims to
protect itself. A sick bond market
serves
as
further proof that the
public
does
not
intend
to
be
caught holding the bag of govern¬
Even

•

responsible

men are

heard

to say that the only way out is to
wash the government's debt and
$11 its financial obligations down a
common
sewer
of inflation. For

the

government

is

reaching
the point where it must either re¬
duce benefit money (which is not
politically expedient) or tax up to
budget needs (which is not eco¬
nomically
feasible)
or
finance
deficits through the commercial
coun¬

try with worthless money).

because
more

argument
goes,
buy
stocks to protect yourself,

everything points to

inflation

far

in the future.

Curiously enough, proponents of
this

argument

tion

in

the

assume

future

indefinitely, at

that infla¬

will

progress

moderate

rate,
that corporate profits will rise

and

a

Achilles'

The

heel

will

for the

that

fact

capacity

our

possibly

is

demand. It is

in

dollar

the

market

stock

spreading throughout all

unlike¬

v

have.

is no longer
over-capacity?

plagued

ness

The

answer

until such time
work

off

our

a

fair bet

six years or
us to

or

as

it takes

present

industrial

productive over-capacity. But be¬
yond that
point it is a
poor
possibility — unless we have a
radical

change
in
government.
Ordinarily, it would be a fair bet
that

presuppose

profits

would

keep

corporate
pace
with

moderate inflation but this

seems

unlikely now. The 86th Congress
is heavily
weighted with antiprofit politicians. In the 1960 elec¬
tions

we

may

these

for

cannot

We

cial

restraint

For

expect much finan¬
from
Washington.

years

been

experience

even

an

tragedy will change.
will

Business

persecution—not freedom and

en¬

pass

on

costs,
causing
sharp
price increases. These will lead to

controls,
which in
turn will generate shortages lead¬
ing to even higher prices and
more
wage
increases.
Controls
government

will

then

back

on

force

business

production

in

to

an

is

developing

inventory boom
will set in coupled with heavy
consumer spending
as the public
stocks up. Another flight from the
dollar

an

will have

begun.

When rampant inflation sets in
there will be signs aplenty to aid

in

into land, inventories, gold, gems,

phere?

objects of art, commodities,

might ever be¬
come rampant
inflation and that
under rampant
inflation profits

.

In

Why
The

addition

moderate

forever
an

that

to

assuming

inflation

into

the

apparant
stocks

continue

future, there is

trust

will

will

that

in

the

forever

belief

prove

a

good hedge against inflation. One

few

the idea

(except

investment

among

a

selors)

that under conditions

coun¬

great reliance
a

of

may prove a

common stocks

doubtful hedge.




upon

ability

control

to

our

and

nice, respectable,

pros¬

non-inflammable,

con¬

tinuous inflation of about 3%
annum

the

well

ad

con¬

financial

insurance

be withdrawn

institutions

cashed

in,

and
pay

checks spent at once.
In

will

this way moderate
end and rampant

per will begin. For these reasons the
infinitum. One might idea of an indefinitely continuing
hopes of achieving moderate inflation is rejected.

permanent

liar.

or

This

status

3%
is

and the
capacity

P Avenue, Chicago 80, 111. (paper),

of

a

prostitute

3%

Recapitulation

or

preposterous
reasoning, but it has given birth

The

summary

lead

costs

bad

v

$1.00.

' V;:%

PERIOD

Books

to

r
■

prove

Some

—^British

;

of this article is

presented in the form of an out¬
a
devilishly contagious idea of line of probable future events,
unequaled popularity.
arranged in the order of antici¬
This belief is
wicked, conceived pated
occurrence.
History will

;

minimize

'59—Ford

Company,
Southfield

the

Federal

Play — A. W. Zelomek — John
Wiley & Sons, Inc., 440 Fourth
Avenue, New York 16, N. Y.,
$3.95.
Civilian Nuclear Power

1975-1985

Crisis

Government

Pro¬

—

Since

1948

—

Reprint

Monthly Labor Review

are

—

from
U. S.

Department of Labor, Bureau of
Labor Statistics, 341 Ninth Ave.,
New York 1, N. Y. (on request).
Columbia University Press Spring

1959—Catalogue of forthcoming
publications—Columbia Univer¬
sity Press, 2960 Broadway, New
York 27, N. Y.
/

Company Climate and Creativity
Deutsch and Shea, Inc.—Indus¬
trial Relations News, 230 West

tired

41st
:

Street, New York 36, N. Y.f

$10."

Corporate Records Retention, Vol.
•

(7)
People
greatly.

cities

in

-

suffer

1:

—

Victory
will

A Guide to U. S. Federal Re¬

quirements—Robert B. Wheelan

by

communistic
....

mean

an

end

to

all

property rights, and may lead to
our slavery.

Victory by Fascist forces
may lead to an attack by Russia.
(9)

(10) First major act of the

new

government will be to crush labor
unions.

Report

and

Clerical Salaries in New York City

obligations

public will
settle
for
almost
any
change
promising to bring law and order,
and
favors
the military
taking

(8)

Policies

United States Atomic
Energy Commission, Washing¬
ton 25, D. C.

grams

(5) The whole nation is torn by

forces

Reactor

on

strife, as totalitarian forces seek
to gain control of the U. S. A.
poor,

—

by Ad Hoc Advisory Committee

substantially repudiated.
(2) Those who have received
government checks for years are
now neglected and forgotten.
(3) A great hunt for scapegoats
is hard on New Deal politicians.
(4) Barter flourishes.

(6) ~ A

Division, Ford Motor
Rotunda
Drive at
Road,
Dearborn,

Mich.

Public now seeks hedges
be hidden, as fear of
property confiscation intensifies.
(9) Power of military grows.

of

Re¬

—:

Changing America—At Work and

may

and

Money —1959

Outlook

Buyer's Digest of New Car Facts
<

(8)

debts

and

Securities
Analysis
Department
Harris
Trust and
Savings Bank, 115
West Monroe Street,
Chicago
90, 111. (paper).

ounce.

All

Information

view and

interest rates soar.
go
wild. Rumors
an
unbelievable
force.
stocks double in price in a

(1)

%,/

Publications

Services,
Plaza, New York
20, N. Y., r (paper), on request,
(annual - c on s o li da t e d catalog
available for 41 cents postpaid).

Business

Stocks

IH:

,%•

p

45 Rockefeller

-;

Government

:

Government

—Catalogue for November, 1958

as

PERIOD

Spring

Hill,

-

week; others collapse in a day.
(6) Public spends all funds im¬
mediately; saving ceases; insur¬
ance industry is crippled.
(7) Land prices go out of sight.
Gold sells for more than $100 an

that

Chapel

—

Hill, N. C.
British

,

lapses
(5)

Philosophy"
Telephone &

University of North
Carolina Press, Box 510, Chapel

.;~V%
(3) Government deficits prove
explosive, causing an immediate
skyrocketing of prices.
(4) Cheap money policy col¬
-V

Relations

from

lications

■*''v% V

(2) Unemployment increases as
back on produc¬
effort

:

American

—

f 1959—List of forthcoming pub¬

businessmen cut
an

•/

Telegranh Company, 195 Broad¬
way, New York 7, N.

Government persecution of
business
(as a policy aimed at
checking inflation) fails, because
it results in shortages of goods.

in

(paper),

Y.

N.

"Public

(1)

tion

16,

;

.

etc.

Inflation Becomes Rampant

tion of industry.

Fabricant—
Economic

of

Winter,
1958-59—containing articles on
"Most Discriminatory Tax Left,"
"Private Enterprise and Public
Affairs," "Developing Managers
for a Dynamic Future," "Infla¬
tion: Its-Causes and
Effects,"

1965-1975

II:

d uct i vit y

o

Bell Telephone Magazine,

becomes difficult to
of
gold
advances

■

%% %'%,• .y.-.i.'/r.-

Pr

Bureau

York

New

that common stocks
lose popularity and prices fall.
(6) The early part of this period
will offer
the
best opportunity
to stock up on consumer durables,
land and gold—before the onset
of rampant inflation.
- >
' %
(7) As this period draws to an
end,
demand
exceeds
supply,
black
markets
begin
to
take

sharply.

;

•

Research, 261 Madison Avenue,

appointed,

shape, land
buy,
price

•

on

Change—Solomon
National

;

dis¬

so

Facts

'

to restrictive

stockholders

and

request.

mn

Basic

over.

inflation
inflation

have

dope addict
3%

Money will

from

spent,

pour

durables and non-durables

alike.

govern¬

produce

identity. Money will

"

perous,

to

rampant inflation,

Rampant Inflation?

typical investor has placed

ment's

as

never runs across

its

sumer

might shrink.

increased

20—

cStandardOil p Company * of
Indiana,
910 South. Michigan

v>

legislation and price controls.
"
(5) The profits squeeze gets so

cut

How
can
profits
increase much in such an atmos¬

moderate inflation

(3) As time goes on
gap between productive

and

l?:dri.vih£ booklet for teen-agers—

increases; is

wage-

effort

they

to reject the idea that

of

•

14

Between

You

.and. do you drive a .car.?—safe-

^

not felt.

to minimize losses. As this process

stroriger

trend in this direction.
Business is in for restrictions and

to

have

increased

correspondingly. In other words, couragement.
seem

effect

$4.50.
Are

losses. Labor calls for nationaliza¬

be

to

appears

inflation,

rampant

with

about every other element in the

Moderate inflation is
for the next five

Management Association, r 1515
Broadway, New York 36, N. Y.,

(2) Government is able to con¬
deficit financing
(thanks
to
productive
over¬
capacity) without causing explo¬
sive inflation. In like manner, the

life

the

of this insulator expires and busi¬

the politicians have
practicing government-in¬
duced inflation without
causing
at
some
time
become
serious
galloping inflation—how can we
rampant inflation, and (2) That
expect them to know they are at
corporate profits will always be the end of the
rope? They will
able to keep pace with whatever
continue as in the past, but just
(1) That moderate infla¬

we

few more years.

a

tinue large scale

of

tion will continue forever and not

inflation

—

continues for

from

areas

when

happens

What

■

the

"moderate inflationist's" argument

lihoods:

,

„

economic life.

our

Quarterly re¬

—

Air Transport Associa¬

—

tion of America, 1000 Connecti¬
Checks Inflation
cut Avenue, N. W., Washington
Rampant inflation is fore¬
6, D. C. (paper).
•
> ;.
stalled because of keen competi¬
tion arising from excess industrial Appraising
Executive
Perform¬
ance
Carl
Heyel — American
capacity;
so
moderate inflation

retarded

reasons:

of

centers around these two

to

the

So,

checked,
the
results
eventually prove disastrous.

now

banks (which will flood the

common

very

are

be

1959

January
view

Capacity

(1)

and has pre¬
vented. the current flight from the

conclusion that unless such trends

the

ment deficits.

The

Excess Productive

inflation,

rampant

another

in

under conditions of moderate

ness

inflation.

and

should

we

situation which has

this

usher

will

currence

difficulties

above present

25%

If half the

in the

cost of living — truly a
example of how to make rampag¬
ing inflation a certainty.

to be¬

ceases

bumping against the outer fringes
of a tornado-like inflation vortex,

Argument

un¬

public

capital shortages, economic stag¬
nation,
and lastly,
a
fearsome
political vacuum.

quarter century of profitable busi¬

Raise

almost

is

financial

serious

high amount.

forced through without much con¬
of
productivity, and

checked.

on

Airline Traffic and Financial Data,
1959-1965

commitment
is and demand - narrows; inflation
measured
against
one
socially grows stronger.
(4) Late in this period the at¬
vicious standard, namely its ability
to stand up under withering in¬ tempts
of business to pass on

continues

is

and goes

inflation.

stop

Each

diately,

previously outlined
portents come to pass, it is il¬
logical to assume that their oc¬

powers,

and
used.
spent imme¬

cash and
lieve, in
the
integrity
of
its
cash
equivalents
amounted
to
government. There then follows,
$22,400,000 and current liabilities in about this
order, and extrava¬
were only $13,000,000. Net working
gantly wild business boom accom¬
capital aggregated $22,600,000,
panied
by
soaring
prices
and
which is approximately one-third
wages, government controls,
of gross revenues, an

resorting
to
sickening
double-talk, the probable flow of
events, if our government fails to

full

withdrawn

are

As of Nov. 30, 1958,

tion.

the future.

exceeds all other

power

work,

The public adjusts. Liquid sav¬

At

to extend; maturities

distance into

Labor

weapon

will

who

those

productive
safe

a

rates and the jig is up.

Common Stocks and Inflation
necessary

is

sacrifice and invest, trust evapo¬

3

page

populace is

wise to the fact that government-

strong financial condi¬

a

In order

great sums may be quietly
swindled from such people the
element of trust must be highly

the

set

mass

that

Once

to

unmistakable way, and

■

Hudson

&

of

porting, trusting person.

developed.

an

but

PERIOD I:

form

a

perpetrated against the
best element in all society — the
hard
working, frugal, self-sup¬

share this year.

a

is

robbery

of D. & H, could recover to above

$3

govern¬

a

3% inflation it

at that point. Page the

stop

Inflation

,

• year,
railroad operations
able to carry 13.3% of every

Last

once
a

forth in

ghost of John Law.

.

were

that

presupposes

ment starts with

for

outlook

$1

some

Thursday, February 12, 1959

.

timing and sequence
faulty, also that some

often

pass,

.

that

prove
are

.

-.

Controlership

Foundation,

Inc., 2 Park Avenue, New York
16,. N. Y., $10.00.
\r.V
,

Cost

of

Metropolitan

Growth

—

Southern

California
Research
Council—Pomona College Book

Store, Claremont, Calif, (paper),
750.

%...

Defining the Manager's Job: Man-

Volume

ual

Number 5820

189

Position

of

.

The Commercial and Financial Chronicle

.

.

Descriptions

Superintendent

of

Documents,
Printing Of¬
Washington
25,
D... C.

—

American* Management Associa¬

fice,
(paper), 30 cents.

.

Economic News Service for Czech¬

.

Italian

M.

Jones

Business—Gardner

subscription $1
(per copy 15c)—Italian Affairs,
Via Veneto 56, Rome, Italy.
Journal

of the

Banker

Employment Relations Abstracts—

Digests of articles from manage¬

ment,
labor
and
professional
periodicals — information may Journal
obtained

Information

from

Evaluation

December

tion-Loan

/

with

Mixing Efficiency
By Use of Radioisotopes—Bul¬

War

Schott

1 i

o

II

c

i

kv'Since

e

FraftCif; H.

—

Finance

Section,

Department of -Eco¬
nomics and Sociology, Prince¬
ton University, Princeton; N^J.
fDanerh

Labor

«.

.

Ninth

New
N. Y. (on request).

Change in
^

.

.

the

^

Committd^rof

Economic

States

United

of

Labor,

Statistics

U.

—

S.

Glossary

Gove^n^ent

Trust

Terms

—

American
Copies
may be purchased from Ajdyw>
tising
Department,
American
Bankers
Association, 12 East
Division,

Association

Bankers

Y.

Mtf'imd

Gold—How and Where to
t+

;

'11*

Franz Pick

—

Pick

—

Publishing Corporation, 75 West
St., New York 6, N. Y., %pM.
Growth and Profits in

Connecticut

Industry—Connecticut

Develop¬

Commission, State tnfice
Bldg., Hartford 15, Conn.
ment

Handling Businesses in Trust—
American Bankers Association,
Trust

Division, 12 East 36th St.,
Vnrir
YorK

"N"

if;

lb' **•

v

Y-'

in

Estate

Real

Mil¬

a

In

—

my

Spare Time—William Nickerson
—Simon

20'

Y-

N-

(cloth), $4.95.
Nelson

New York, $3.95.

Sons,

&

^

:

Identification Procedures foFSav-

ings Bond Payments—Coipmittee

on

Fiscal

Federal

Proce¬

dures,
A mer i c a n * Batik ers
Association, 12 East 36th Street,
York

New
.

$1.00.

tn

:

N. Y.

16,

(paper),

7/

.

.

Aid of Lawyers Drafting Wills

and

Trust

Agreements -^Re¬

prints from the "Trust Bulletin"
of
articles
by
William
J.
Graulty and Gilbert T. Stephenfeon

—

American Bankers Asso-

ciation, 12 East 36th Street, New
York 16, N. Y., 350.
Industrial

Relations

1958-1959

—

Report

Executive
on

second

sion—Industrial Relations News,
230 West 41st Street, New York

36, N. Y., $3.50.

Association,

1515

Broadway, New York 36, N. Y.,

$2.25.

International
change
U.

S.

Educational

Program
Department

St.

Lawrence

Niagara

—

a

time saver—

Cummins-Chicago

28th

Annual

Report

Authority of State
New York, Albany, N. Y.
Sale-Leasebacks

and

Estate

Transactions

—

of
in

Leasing

and

Equipment

Harvey Green¬

Inc., 330 West 42nd Street, New
York 36, N. Y., $10.00,
Salt for

Ice

and

Snow

North

nue,

Ravenswood

The

facts

about

automotive

and

Sk u.
A"

•

Selection

Retail

of

Ex¬

1948-1958—
of State—




Patents

78

Use

Locations

by

Released

U.

S.

Commission

—

for

Atomic
List

from U. S. Atomic

—

Public

Energy

of

patents

Energy Com¬

mission, Washington 25, D. C.
(copies of the patents available
from U. S. Patent Office).

Kamm—Re¬

Statistics for

ton

.

Mop;f

Management and Merit Employ
pamphlet

-

—

Collective

ing—Paper by
-

of

reau

Ninth

—

Documents, U. S. Govern¬
Printing Office, Washing¬
25, D. C. (paper), 200.

Life for Cities Around tlie

on

International Handbook

Urban

Renewal—Books

In¬

ternationa, W. P. Van Stockum,
Buitenhof 36, The Hague, Neth¬
erlands—$4.
195g

Report

of

the
Scientific
Cook Little

Director—Clarence
—

Tobacco

Research
East 42nd St.,

Industry

Committee,

150
New York 17, N. Y.

Liability Insurance and
Indemnity—Forum Committees
on

Legal

ance,

Inc.,
York

Problems and Insur¬

Atomic Industrial Forum,
3 East 54th Street, New
22, N. Y. (paper).

1(lft

,T

Trade
let

..

e

Show Exhibitors—Book¬

Inc., 820 N.
Milwaukee
3, Wis., (paper), on request.
—

Manpower,

Labor

Avenue,

—United
Loan

-

Survey

States

Savings

and

Initial

Fuel

S.

Nuclear

U.

Costs

cation

Department, 44 Main St.,

William E;

Council, 705 Olive Street,

St. Louis, Mo., $4.25.

With Edw. D. Jones
Special to The Financial Chronicle)

ST.

LOUIS,

Mo. —Walter

F.

Griesedieck has become affiliated
with Edward D. Jones & Co., 300
North Fourth Street, members of

Rejoins King Merritt Co.
tSpecial to The Financial Chronicle)

ST.

LOUIS,
Mo.— Harry A.
has rejoined King Mer¬
ritt & Co., Inc.
He has recently
Siemers

been

associated with Reinholdt &

Gardner

Fusz-Schmelzle

and

&

Co., Inc.

Yates, Heitner Adds
(Special to The Financial Chronicle)

York

and

He

Exchanges.
with

G.

H.

Midwest

Stock

previously

was

Walker & Co.

Joins Morrison Staff
(Special to The Fin \ncial Chkonntx)

CHAROLTTE,

Rhodes

has

of

Power

Directors of the Edison Electric

With Merrill

Are you

Lynch

AKRON,
is

son

now

Ohio—Glenn L. Wil¬
with Merrill Lynch,

Bache Adds to Staff

(Special to The Financial Chronicle)
publication devoted to inter¬
preting and reporting important
CINCINNATI, Ohio —Peter P.
developments in the field of Huff has been added to the staff
transportation — Transportation of Bache & Co., Dixie Terminal
Association
of
America,
1000 Building.
Connecticut
Avenue,
N.
W.,
Washington 6, D. C.

With Westheimer Co.

of

Trend

ment
—

Bank

Loans

—

Supple¬

covering last half of 1958

American

Bankers

Associa¬

12 East 36th Street, New
16, N. Y.—$2.00 per year
for publication.

tion,

York

Uncommon

the

Man—The

Book

—

$4.00.
U.

S. Atomic Energy

Commission

ReportaU. S. Atomic Energy Commis¬
sion, Washington 25, D. C.

of

the

Walnut
New

Street,

York

and

Cincinnati Stock Exchanges.

because

Caves

staff

Inc.,

has

If it's cancer

to the

of Merrill, Turben & Co.,
Union Commerce Building,

members

of

the

New

York

Midwest Stock Exchanges.

you're worried

about, remember that doc¬
tors are

curing many mora

cancers

than they could ten

years ago.

800,000 Ameri¬

alive today, cured

of cancer... many of them
because

they had made a

habit of having annual

all of

them because they went

Ohio —William

been added

find some¬

thing wrong?

checkups no matter how

(Special to The Financial Chronicle)

CLEVELAND,

onci

you're afraid your

doctor might

well they felt...

Merrill, Turben Adds

M.

1958 Annual Financial

322

Company,
members

checkup

year? Or do you put it off

(Special to The Financial Chronicle)

CINCINNATI, Ohio —Fred C.
Beaver is with Westheimer and

McGraw-Hill

Company, Inc., 330 West
Street, New York 36, N. Y.,

a

cans are

Organization—Crawford

Greenewalt

42nd

Individual

really too busy to

have a health

(Special to The Financial Chronicle)

Pierce, Fenner & Smith Incorpo¬
tute, 750 Third Avenue, New rated, First National Tower.
York 17, N. Y. (paper), $2.50.

Railway
Africa;

Public Rela¬

—

Institute—Edison Electric Insti¬

H.

tions

company—

Nuclear Power to the Board of

Plans;
Trade
Unionism and Modern Industry;

Expansion in South
Tanganyika's
Middle
Course in Racial Relations, etc.
Anglo American Corporation of

Know

MacNeill

Clement—Public Revenue Edu¬

Stations—Report of the Tech¬
nical Appraisal Task Force on

Trade

South Africa, Ltd.,

of

Large

Eu¬

ropean

S.

N. C.
— Jacob
joined the staff of
Texas Eastern Transmission Morrison and
Company, Liberty
Corporation, Shreveport, La.
Life Building.

in

with

Co., 210 West
Street, members of the*
Pacific Coast Stock Exchange.

League, 221 North La Salle

developments of the

ing articles

Link

to

Want

Wills—Earl

sion Proposal

Street, Chicago 1, 111. (paper).

Optima-December. 1958. containon Problem of the
Commission
Territories;

connected

&

Winston Churchill's Anti-Depres-

New

N. Y.

Story of Modern Home Financing

Plankinton Avenue,

High

are now

Why Unions?—AFL-CIO Depart¬
ment of Public Relations, 815
16th Street, N. W., Washington
6, D. C. (paper).

Transport Outlook—New monthly

Nuclear

Va.,

Fairman

Seventh

ST. LOUIS, Mo.—Lawrence T.
Clague—
Labor, Bu- Drebes has been added to the staff
Statistics, 341 of Yates, Heitner & Woods, Paul
New York 1, Brown Building, members of the

describing the history of recent

paper.

Com¬

W.

Billie A. Steen
with

Ewan

Against Discrimination, 270
Broadway, New York 7, N. Y.
New

Tax

Calif.—Donald
Louis Dinsfriend and

—Harper & Brothers, 49 East
33rd Street, New York 16, N. Y.
(cloth), $3.50.

Story of Texas Eastern—Brochure

State

State

Charleston,

Women

About

Bargain¬

Commission

York

New

the

Ashton,

U. S. Department of

Malaya: A New Independent Na¬

of

23rd Report of
Commissioner—

LOS ANGELES,
R.

Background Memorandum —
Savings Banks Association of the New York and Midwest Stock
the State of New York, 110 East
Exchanges.
42nd Street, New York 17, N. Y.

—

vised edition—World Publishing

ment

What

safety

Savings Banks of New York State

Stock

tion—Department of State Pub¬
lication 6714
Superintendent

of

—

Tax

Fair man Adds Three
(Special to The Financial Chronicle)

(paper).

corrosion—Salt

Institute, 33 North La Salle St.,
Chicago 2, 111. (paper).
\
'

Ave¬

Company, 2231 West 110th St.,
Cleveland 2, Ohio (cloth), $3.50.

associated

now

Removal:

public

.

mantel—jacoo

State

missioner,

,

Chicago 40, 111. (on request).
the

are

'

'

4740

.

—

field and Frank K. Griesinger—
McGraw-Hill
Book
Company,

Corporation,

ment system as

the

Power

Power

Real

Virginia

West

Authority of the State of New
York

Wuichet

Business

of

Administration, New York Uni¬
versity, New York, N.Y. (paper).

New

Corporation, 119 West 40th St.,
New York 18, N. Y., $9.00.

Commonwealth

Integrated Packaging and Mate¬
rial Handling—American Man-

agement

Broad Street,
(paper).

Long Lines and Short Friendships
—Booklet on use of coupon pay¬

World:

Revenge—Fred—Man-

chee—Thomas

44

School

Graduate

York 5, N. Y.

Richard L. Nelson—F. W. Dodge

pnd Schuster, 630 Fifth

Huckster's

Co.,

■ •

_

with Midland Investors Company*
52 East Gay Street.

Foundation, 420 Lexing¬
Avenue, New York 17, N. Y.

Office

fice, Washington 25, D. C., 300.

mcnt—Educational

How I Turned $1,000 into
lion

&

_

COLUMBUS, Ohio—William C,
Jaeger, Gilbert Moody and Tom

Theory J Wage Rates and
Productivity — Joseph H. Taggart and Clifford D. Clark—

—

—

36th Street, New York

Hold It

S. Government Printing Of¬

U.

.7

Fiduciary

of

°ther In"

Boston, Boston, Mass.

■

.

(Special to The Financial Chronicle)

Wage

England—

Summarizing a report
by Alvin E. Austin—Dow-Jones

Foreign Commerce,
U. S. Department of Commerce
—Superintendent of Documents,

of ^l&taor

(paper), 300.'"

C.

Staffs

1,

to Foreign-

of

Insurance

„

P.

ton

Research

—

Health

Three With Midland Inv.

mation

Recruiting New Talent for News

—Bureau of

Printing Office, Washington: 25,
D.

;

(Special to The Financial Chronicle)

Among the Aged—Health Infor¬

(paper).

Trade Zones in the United States

Department

Bureau

year-

York

Avenue,

Flexibility'-- prepared*ioij.tie Laws- Regulatlonsformation Relating

joint

of

New

on

Depart¬
Library, Federal Reserve

Bank

on

Reports for Mid-Atlantic Cities'
—U. S. Department of Labor,
Bureau of Labor Statistics, 341

by Bernard Baruch£*£, C.
Page & Co., Dept. 16, 10L,Fifth
Avenue, New York, N.
of

Research

Pamphlet

"Major Wage
Developments in 1958"; "Con-

ward

Frequency

Statistics—Series

end * reviews

reaue&L

on

Interest

of

Voluntary

Quarterly Inventory of Economic

eral

'■

International

—

Model

Joins First Columbus

"Precambrian"—

of

the
national transportation
policy field — Association of
American Railroads, Transpor¬
tation Building, Washington 6,
D. C. (paper).

Profit—American

Association, 1515
Broadway, New York 36, N. Y.,
$2.25.

Consump¬

without the Social Con¬

issue

Bonnatyne
COLUMBUS, Ohio—Herbert H.
2, Canada,
Brume, Jr., has joined the staff
$1.00 per copy; $3.00 per year.
of First Columbus Corp., 42 East
Urgent Six—Six major problems
Gay Street.
in

Executive

Management

ment

Oligopoly, and Research; Gen¬
Productivity in Soviet
Agriculture and Industry (The
Ukraine, 1928-55); A Rehabilita¬
tion of Purchasing-Power Par¬
ity, etc.—University of Chicago
Press, Chicago, 111.—$6 per year;
single copies $1.75.

Corpo¬
Erie Street,

Evolution of Latin Americkii Ex¬
World

or

1958

29

; Precambrian, . 365
Avenue, Winnipeg

A

Purchasing for

Containing

—

E.

Bard-

bibliography —
Selected References, Industrial
Relations
Section, Princeton
University,
Princeton,
N.
J.,
(paper), 30 cents.

trivance of Money; Competition,

letin—Nuclear-Chicago

change-Rate- P

1958

An Exact

on

C.

Tests in

Selection,

Economy

articles

Warren

of

ration, 223 West
Chicago 10, 111.

Political

of

Robert

—

Edward

—

Psychological

and

Accountancy; Fi¬
nancial International Trade, etc.
—-Institute of Bankers, Lombard
Street, London, E. C. 3, England.

and

Rinehart & Company,
Inc., 232 Madison Avenue, New
York 16, N. Y., (cloth), $6.50.

Institute of Bank-

December, 1958—Contain¬
ing articles on Qualifying as a
Banker; Three Months of Per¬
sonal Loans; Econdmic Scene;

Research, College
of Business and Public Service,
Michigan State University, East
Lansing, Mich, (cloth).

be

well

ers,

and Economic

Service, Inc., 10 West
St., Detroit 1, Mich.

The

on

monte—Annual

Business

Bureau of

—

Articles

Elections; Trentino-Alto
Region; State Railwa5rs;
National
Gallery
of
Capodi-

oslovakia, 13 ul.28 Rijna, Praha
1, Czechoslovakia. Single copy
30 cents; annual subscription, $3.
in

Schultz

Adige

Chamber of Commerce of Czech¬

Electronics

Affairs:

Property Insurance

;

,

Uranium Story—In the November
,

General

oslovakia—Reports on ^economic
developments — Press Service,

*

Johannesburg, South Africa, 2s
6d per copy; 10s. per year.

.

U. S. Government

tion", 1515 Broadway, - New York
36, N. Y., $9.00. /
;
V

(789)

to their doctors

in time!

Make annual checkups
a

habit... for life!

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and

AMERICAN CANCER SOCIETY

34

(790)

The Commercial and Financial Chronicle

Continued from first page

ment more actively than at any
time since the boom housing year
1955.
The increased availabil¬

of

Recession and Recovezy and
Maximum Economic Growth

ity of mortgage funds at lower
cost, together with the mainte¬
nance
of personal
income, was
promptly reflected in a step-up of
builder
activity in constructing
houses.

new

preceding

recessions.

economic

-

while

Even

Committee's

the

Hearings were going on, some
were beginning to view the out¬
more optimistically. In Janu¬

look

ductions in Federal Reserve Bank
discount
1 %%.

rates,

continuing open
operations from late Fall

early last Summer, the
Reserve System supplied the com¬

mercial
lion

offering

were

of

an

increasing vol¬

issues in anticipation

new

of future needs for funds, and

refund

shorter-term

debt.

to

State

banks with

of

three successive
ment

of their

Farmers

continued

to

favorable output and price condi¬
tions in agriculture and were bid¬

ding

further the prices of farm
with slackened

up

land.

Bankers,

customer

demand

for

credit

and

With

strengthened reserve posi¬
tions, were bidding more aggres¬
sively for assets. By February,
bankers were accelerating expan¬
sion of the assets and deposits of
their institutions, thus increasing

rapidly the economy's stock
balances and raising its
overall liquidity.
more

of

cash

Within

matter

a

of

weeks

fol¬

lowing last year's hearings,
sonal income and

consumer

per¬

spend¬

ing had ceased to decline and, in
fact,
showed
modest
recovery.
Production and employment soon
after

resumed

an

Whether these d

upward trend.

e v e

1

o

The

funds

banks

p me n

t s,

though encouraging, foreshadowed
wide revival in activity was not
known at the time; not until the

total

of

information

provide
that

substantial

general

Was

economic

actually under

From

and reports
confirmation

that

recovery

way.

stage

currently
available data, reflecting trends in
markets, production, and employ¬
ment, showed that recovery was
on,

both broadly based and vigorous.
Pickup in employment, however,

lagged behind that of output
usual

as

is

in

early phases of cyclical
upswing. At the year end, eight
after recovery set in, the
level of total output in the econo¬

months

approximated that prevailing
at the output peak of 1957.
Recovery has been so rapid and

my

Widespread
revival

cycle

has

its

run

by

of

this

course.

reattained
and

to indicate that the

as

phase

now

phase

its

the

economic

time

probably

The

supplied

prerecession

resumed

entering

a

economic

banks

This

brief

review

of

changing

1958
provides
a
backdrop
for
specific comments about Federal
Reserve policy and action over the
past 16-month period of recession

sales of gold

amounting

to

As

reported last year,
Reserve policy began to

Federal
shift

in

count rates

Mi K2
on

member bank bor-

credit expansion of almost

wrifiedthe

cessionarv trend*

at

exceptionally rapid rate—at

an

%

more

rate, open
market, and reserve requirement
instruments were actively
applied

complementary

fashion

to

foster

ease in credit
markets and
encourage bank credit and mone¬
tary expansion.

From

Aoril
April

late

1958

1958,

Foil

iQC7

u

thp?i JfrJ four
through

there

were




re-

avail¬

an

annual rate of 13%

for all de¬

the rise

was

at

annual rate of

an

8%. After the shift in Federal Re¬

policy in the Summer, ex¬
pansion in the active money supply
serve

slackened,

and

for

the

year

as

a

whole it amounted to about 3J/2%.
Broader

Effects

of

Monetary

Action

Although the immediate impact
of Federal Reserve policy was on
commercial banks, it clearly had

broader effects upon the economy

generally.

For

thing,

one

commercial banks

are

since

direct par¬

ticipants in some degree in all im¬
portant credit markets, expansion
in bank

lending and investing

tivities

intensified

ac¬

competition

among all lenders for the acquisi¬
tion of the available

supply

credit-worthy loans and
ties.

This

cost

of

securiti-

of

worked

to

reduce

the

financing to borrowers
generally —- businesses, farmers,
consumers and home
buyers, and
all

levels

widened

of

government.
of

access

all

It

also

potential

borrowers to credit funds.
Another effect of the credit
was

ease

greater willingness on the
part of banks and other lenders
to

a

make

new

credits.

loans

to

renew

This

business
outstand¬

facilitated
excess

accumulated

the

business
in

the

preceding boom. It also furthered
the completion of business
pro¬
grams of plant and equipment ex¬
pansion
begun in that period.
With

$6

a

billion

reduction

in

business

inventory holdings and
significant cutback in fixed in¬

vestment programs since recession

began,
that

it

is

perhaps

business

loans

remarkable

outstanding

dedined on* ^ """on in thi

.System open market operations
after midsummer supplied only a
portion of the reserves needed to

borrowed

thin margins in connection with the Treasury's June

meet

financing

continued

on

operations.

In

many

but

on

helned

investment
many

com-

for

mands

meet

credit

sound

de¬

more

readily,
bolstering '\ lagging demand
for consumer durable goods. * On
some
transactions,
terms
were
eased and, in addition, new credit
plans were developed and ex¬
thus

-

tended.

Easier

credit

conditions

permitted lenders to be

lib¬

more

eral in

granting renewals and ex¬
tensions of time for repayment of
outstanding credit. Thus, the vol¬
ume
of repossessions and credit

losses

less than would other¬

was

have

benefits

both

to

Prices of Government securities

continued

decline

to

under

pres-

of Steady liquidation and the;

with

case,

borrowers

and

also had

availability of funds
important impact on

an

local

and

nancing

government

fi¬

and

spending.
In many
cases, the lower cost of financing
encouraged States and municipali¬
ties to borrow in order to finance

capital

projects.

lower market

In

rates

cases,

enabled

governments that had

ing

few

a

local

legal ceil¬
permissible interest rates

on

a

$1 billion more than in the
corresponding period of the pre¬
was

ceding

year.

These

effects

of

one

element in Government

coun¬

m

their bor-

market

offerings

changed prospects for credit
mands

and

ernment

£n

element

Fed^rs°Pe1}.

-

in

the

total

economic

State

and

light

local

governments, in
their own circum¬

of

stances, were taking actions to
adjust and adapt their situations
redirect

to

and

at

mid-fall

again raised to
-

their

energies.

-

i

when

they

*;

:

were

level of 2%%.:

a

j

the

UJ

Since last Summer, bank credit

ancj

<

v.;;

the money supply have
to
expand but at a

;

y-

con-

tinued

rate

i

;

disorderly and decided to ihter- much reduced from
earlier in the- (a
vene temporarily m the mediumyear;Some seasonal expansion, in
and long-tenn sectors Of tpe Govbusiness loans was supplemented
*1
eminent securities market.
This
by a rapid growth of real estate
.i

action
of

within the framework

was

the

Committee

operating rules

dH,y
billion

s
.

established

From July 18 to

Jlu System purchased $1.2

of securities involved

in

a

.

loans.

Qn

the

other

hand,; bank

ernment

securities

rose

only

moderately

despite a substantial
increase in their supply to finance.

small the.
Treasury's deficit. With

a

J

holdings of short-term U. S. Gov-',

busi-i

amount of other notes and bonds.

ness
sales and IiquicUty
showing.
conditions
rapid rise, the higher interest rates ;i
became more orderly, no further
(hat
deveIoped in the market,/
Federal
Reserve
open
market
helped to attract a substantial vol-

Thereafter,

transactions
the usual

as market

effected outside

were

aiea

of short-term Gov-

rfZend
and

Ju y

early.
August, sales of
Treasury bills by the System together with other factors that ab-'
sorb
the

reserves

plied

than

more

large volume of

by

bond market
market.

Gov-

-

,

-

.

.

this

time;

there

recovery

funds

of

nonbank inves-:

the

conSeauence

Treasurv

forward

liolfwHn go
likely to in

was

without

serious

setback.

Moreover, in View of the strength
of consumer demand, iurthet de-

was

p

meetprivate

edit

only

a

e

moderate

further'

growth in total bank credit and
Regulation of Margin

Requirements

d
new

p

pa

^

mg the economy tor a

advance.

About this

/
time, inflationary

Vl,

ex-

pectations

began to spread. The
upward shift of interest

5

<,

-

mone-Vi,

'ary responsibilities, the Federal;
T?eservp

direrfprl

law

hv

,

to

prescribe margin requirements

Sd
8uar£

to^of

purchSSf
requirement?

margin

'i

cariying

or

By

policyi
reinforcing the existing

^

-i

Monetary

likely.

now

'•
-

private ciedit demands '
demands.;;
accompanying economic recovery,
-

Ih addition to its broader
and

■

tan

in economic activity and:

momentum

■

™

p™
km'
^hd ....^ (mil w,vet?,./ wit

clear~-J.-./:-

was

'

thj

witil

Shift in Federal Reserve Policy

By

of

especially business corporations' into the purchase of
new
short-term Treasury issues. As a

sup-

Federal

Reserve interventional the
ernment

umc,

tors

offset

reserves

the market

to

Businesses, individuals, and

and

threats,

Market Committee concluded that
the market situation had become

In turn, Gov¬
policy is always only one
longer

scene.

the

inflationary

de-

v

costly. when. Reserve Bank

m0re

&ei2dbSffi

ter-recession policy.

j>

a

re-Wu

rowings from the Federal Reserve
Banks. Such borrowing was made

evidence in current statistics that

observable

of
a

>

easier

monetaiy conditions which
developed from efforts to combat
recession were, of course, impor¬
tant and salutary. They are not
to be overly stressed, however, for
monetary action is always only

drain

reserve

gold outflow. As

purchase discount rates were raised in
in'view, of late Summer from 1%% to

Treasury refinancing and

Increased

State

the

been

the

,

i:

and

selling was forced because suit,-member banks/ were
obliged
margins vanished as security to draw down their excess re¬
prices declined.
•/
serves and to increase

serve

pro? *
as

a

sP«dal-purpose supplement to the-;;
instruments

generai

of

Federal

>

Reserve action. Since the flow of

)
flue- >

credit into the stock market
luates

with

general business con-;

,,

,

undoubtedly shaped abrupt
ditions, changes in margin re-;-f,
levels in central money markets,
and gave it mo¬
quirements are usually correlated
while precipitated by liquidation
mentum.
with
policy actions that affect,
of speculative positions in governgeneral credit availability,
ment securities, reflected investor
Changing Expectations
Following the stock market deAchievement of monetary ease demand for an interest premium ciine in the early Fall of
1957, /.
to combat recession so promptly to cover the risk of a depreciating total credit to customers for
purA
power
of invested
and amply was not without its purchasing
chasing and carrying stock market;''
funds. It was accompanied by a
problems. One of the most acute
securities declined by about 5%
significant shift in investor alloca- and was back to about the level
was the build-up of prices in the

Their actions
the

recovery

bond

market

speculators

as

tion

of

newly available funds to

stocks instead of fixed
business
recession, credit ease, and still interest obligations, with hedging
higher bond prices. Psychological against inflation a frequent exreactions and expectations always planation of the change in investor
play a role in swings in economic policy. Large current and prospeccounted

and

on

common

continuing

financial
of

were

developments, but
particular importance in

financial markets

last

summer

as

five

demands

Federal

for

credit

Government

pur-

outlook
changed chasers also influenced the rising
continuing recession cost of borrowed funds. In the
to one of early, vigorous recovery. stock market, the volume of tradAt that time, the improved eco¬ ing was expanding rapidly and the
rise
m
stocK
pi ices
carried
tne
nomic
outlook
led
to
a
sharp
change in expectations in regard yields on common
the yields on bonds of the same
to renewed inflationary pressures
the

one

of

a

s^cks below

and

a

turnabout

in

the

trend

of

interest rates. A much larger Fed¬
eral deficit loomed up than had

estimated,

as

well

as

the

military action
Concern about

companies.

s

Developments

markets,

as

well

in

our

financial

the very large

as

deficit which the Federal Government was facing, were occasioning
concern,

abroad

well

as

as

at

home, about the future of the dol-

monetary reserves through sales
of gold to the industrial nations

lar. The extent of

concern

among

of

Europe was a further cause of
uncertainty. The fact that the Ca¬

.

,

.

.

of

abatement

of

credit

<

in the stock market, the Board; 4
Governors, early in January:!
1958, reduced the required margin

use

0f

from 70

to 50%.

with the

increasing activity and

in stock

economic

economic

from

indication

and

government, and home

local

j,

outstanding in mid-1955. With this >>

the

by

State

foreign financial leaders was
clearly evident last Fall at the annual meeting of the International
W°?ing f0rce and ^roUs'
to maintaiia dividends, and to nadian Government announced a Bank and Monetary Fund at New
'
strengthen liquidity positions.
major refunding
operation at Delhi, India.
;
In
housing markets, the easier sharply higher interest rates was
In
the
light
of
the ■; rapidly
conditions broadened the avail¬ also a
complicating factor.
changing economic situation, in
ability of mortgage funds. Dis¬
In these circumstances, heavy many
ways
highly encouraging
counts were reduced on FHA
and market sales by holders of U. S. but with
inflationary and speculaVA mortgages
subject to ceiling Government securities in antici¬ tive
psychology
spreading,
the
interest rates, and interest
rates pation
of
higher interest rates Federal Reserve, during the Sumon
new
conventional mortgages sharply
depressed
bond
prices. mer, began to moderate the policy
a.ls0 fel1, As bank credit expan- Initially, this selling stemmed of credit ease with a view to ternsion gained in momentum, banks from temporaiy holders who had pering the rate of bank credit and
participated in mortgage invest¬ bought in
anticipation of a con¬ monetary expansion.
cumacks

offset

to

credit- demands

the

the drain of gold from the nation's

pressures

rising

cases,

sure

to

crisis and threat of

spending

secu-

Thursday, February 12, 1959

.

reluctance of investors to

lenders

in the Middle East.
ward

Government

ability of funds made it possible

been

ets

in

for

posits, including time and demand
to return to the market. The in¬
deposits.
For the active money
crease
in spending by State and
supply; that is, demand deposits local
governments from the sum¬
and currency seasonally adjusted,
mer of 1957 to the summer of 1958

emergence o?re~ ^

ae
actions and policies
became
aggressive and discount

$S bil¬

Monetary expansion from
February through July stimulated
by this Federal Reserve action was

^"iCS

STtKSSi

in

commercial bank

a

lion.

in

fatrSc^b^fnd'earlvZv^h^
tem^directed4 V 6 ££

tfon

to foreign countries
about $1.5 billion,

and to finance

a

and recovery.

increased

lenders.

inventories

levels of economic
activity during

the

rise

,

rity prices. Some of these holdings
had
been
acquired
with funds

instalment

consumer

area,

banks to reduce their discounts at
the Reserve Banks from $800 mil¬
lion to about $100,000,000 to offset

orderly run-off of

to

Combat Recession

nine

the

over

to

the

credit

wise

ing
Federal Reserve Action

reserve

by the system

customers and to

growth.

of

In

months, November 1957-July 1958,
was
enough to enable member

economy

appears to be

of

has
level

$1.5 billion

reserves.

amount

June-July period did the current
flow

about

required

commercial

foresee

Winter

early Spring of last year, the
system released for the use of

deferred

-

late

and

ing to market bond issues that

ping up
to provide for public works.

in

bil¬

$2

Through
require¬

reserve

reductions

member

were

some

funds.

reserve

and local governments were bring¬

earlier, and were step¬
the pace of bond offerings

to

Through

market

interest costs in financial markets,
ume

3 Vz %

of 1957 to

corporations, taking advan¬
tage of easier conditions and lower
ary,

from

tinued

.

dit
j

^
year

t

,

stock market

sharply,

,

-

ices accompanying

reCovery,

reaching

j about 20%

by :

above the

t th
beginning of the'
In yjew o( ,he rapld rise in

crecjit

finance

to

trading in or
ownership
of stocks
emerging investment psychology favoring purchase of

temporary
an(j the

stocks

inflation

"

hedge, the
Board, early last August, restored
the required margin to 70%. As outstanding stock market credit1'
as

continued

an

to

rise

following

this

r

>

action, the Board, in mid-October,
90%;

raised the required margin to
-

.

i

->

The Current Situation
The
shift
in monetary
policy
during the Fall aligned monetary

expansion

more

closely

with the

developing potential of the economy. Consumer spending on dura-

r

ble goods and housing continued
to expand and was reflected in

high levels of output of household
durables, in a pickup in production of 1959 autos, and in a rise
in new housing starts to one of
the highest levels in recent years,

Business

inventory policies

w^re

•

Volume

189

Number 5820

.

.

.

The Commercial and Financial Chronicle

switching

from
liquidation
to¬
accumulation, and there
was a
widespread, though small,
upturn in capital expenditures. At
wards

the

same

time, Federal,

well

as

as

turbing. when it comes on top of
price rise that J ones made when

a

the

demand

creased.

for

Such

his

a

product

one-way

in¬

move¬

prices—whether it is

ment of

ex¬

state and local government spend¬

plained as demand-pull, cost-push,
ing, was expanding rapidly in ac¬ or both—is not compatible with
cordance with budgetary authori¬ an efficient market system. If it
zations adopted earlier.
•
; were to be continued, it would
In<5 financial markets moderate pose a serious threat to the other¬
curtailment
and

of

credit

availability

higher interest rates served to

dampen speculative

then

excesses

wise

prospects for
healthy.growth in cpnsumption

and production.

developing, to restrain and spread
Out the volume

of

new

corporate

favorable

Now
is

to

as

Federal

essential. at

finances, it
stage of the

this

and municipal security financing,
and to facilitate the financing of

budget

Federal

deficit

outside

rhent "should

surplus

of

tinues.

corporate

curity

and

financing

municipal se¬
followed some

anticipatory borrowing
issuers

earlier

long-term
lower*

in

the

interest

At

the

these
when

by

year

rates

turn-of

were

the

year,

level

attain

and-; then

the banking system. The restraint

as

balanced'

a

achieve

some

economic advance

Whatever

the

con- '

desirable

of

expenditures,
deficits,1
while justified in time of reces¬
sion, s h.o ul d be avoided when
the economy is at a high level of
activity.
.

business

financing was
again rising, and there was a large

capital

have

calendar

of authorized

ernment

state

sued

Total

real

terms, has regained
The active money
increased
by about

supply has
2V2% above theprerecession level,
and holdings of other liquid as¬
sets, including time deposits, are
up sharply.
The financial basis
for further growth is established.
While economic prospects are gen¬

erally favorable, there are several
areas
unemployment, exports,
prices, and Federal finance that
—

matters

for

continuing

con¬

cern,

Despite the rapid recovery in
production and sales, unemploy¬
ment

remains disquietingly high.
lag in employment is in part

The

the result of

a

marked increase in

productivity. The present avail¬
ability of capital and manpower
resources
represents a potential
for hear-term growth of the econ¬
omy without inflation.
As output
of goods and services expands in
response to growing demands^ op¬
portunities for employment should
increase as they have in past pe¬
riods of economic expansion.
In

which

exports,

sharply until early last

declined
year,

re¬

has not yet set in. The
export decline was largely in ma¬
covery

terials

and

fuels

importance to
healthy, broad-based Gov¬
securities
market that
enables the Treasury to lodge its
a

v

its earlier peak.

are

It is also of vital

government
debt outside the banking system.
v-'T
; ■;
activity, meas¬ In other words, the Treasury must

' ;■

■

economic

in

ured

unis¬

but

local

and

securities.

and

due

was

in

be able to

compete effectively and
flexibly with other borrowers for
the available supply of savings.

Appropriate debt management
policies, while contributing to fi¬
nancial stability, are in turn de¬
pendent on such stability. Inves¬
tors cannot be induced to purchase
fixed
income
securities if they
fear a steady erosion of the pur¬

chasing

In

power

of the dollar.

takes

purchases of the goods and
services supplied in free markets

assistance

producers and mer¬
living standards also
encompass
services provided by
the various levels of government.

the

in

securities

of

Fundamentally, economic growth
at a more rapid rate than popula¬
tion increase is the response of
men
to their ever
increasing
-

wants.

with

the

and,

volume

available

made

in

of

ity of the dollar. Resort to financ¬
ing Government deficits through
the

banking

system entails the
supplies of money
rather than the use of existing
funds.
In a period of high eco¬
nomic activity, this is a high road
to monetary inflation.
There can
creation of

be

new

effective

no

control

infla¬

of

tion if the banking system is made
the major source of funds to fi¬
nance

government deficits.

Government

Policies

Economic Growth
the

As

United

States

economy

opportune occasion, therefore, to

ports of manufactures stiff compe¬
tition in price and quality, and
these countries are now able to
devote

they

larger share of their

a

sources

to their

could

own

in

re¬

exports than

earlier

postwar

While this reflects progress
towards international balance, our
years.

producers need to adjust to these
competitive forces abroad if they
are

.rto

share

in

growing

world

markets.

Prospects for our international
payments position thus merge
with the third problem; that is,
QUr

price system. A market

econ¬

omy, such as ours depends upon
the price mechanism to allocate

Resources by reflecting the inter¬
play of demand and supply. The
price mechanism cannot do its
job

of

efficient

resource

tion in accordance with the

ing demands of
there

is

some

alloca¬

chang¬

unless
flexibility in indi¬
consumers

vidual prices. This does not mean
that wide swings in the general

price level are desirable. The price
paid by Smith represents the in¬
come of Jones.
But there is cause

emerges

consider the question of appropri¬
ate

public and private policies to

foster

steady

;

prqpuct, Jones raises his price,
both

an

opportunity

output

thWarted.

and

to stimulate

employment

is

This is particularly dis¬




expansion

V

economy.

the

of

v

Economic growth,is a principal

objective of governmental policy
country of the world. The
rate of growth is widely accepted
as
an
indicator of the perform¬
ance
of an economy.
A word of
caution is in order, however, re¬
in every

garding the very difficult task of
measuring growth. Growth meas¬
urements, particularly when they
cover
long periods of time and
comparisons of one country with
another, are necessarily approxi¬
mations.
They vary with a host
of factors, including the scope of
activities covered, both public and
private; the character of such ac¬
tivities; quality as contrasted to
quantity of output; and many oth¬
ers.
Nevertheless, regardless of
these
measurement
difficulties,

tems

for

reasons

economies

free

democratic

political sys¬
outperform regimented

can

economies

dictatorial

under

po¬

litical

systems in providing high
rising living standards for all

and

of the people.
•"
Economic progress,

the responsiveness of

the produc¬
desires and
tastes of consumers, the quality
of goods and services, the degree
of leisure and opportunities for
system

using it in

a

satisfying

and

way,

willingness to aid other na¬
seeking similar advantages.

our

tions

These

aspects of our
performance will have
fluence

world

the

how

on

a

economic
great in¬

rest

the

of

judges the merits of free
regimented economies.

Economic Growth Without

Inflation
When

we

its

within

make

particular

province vm a n i f e s 11 y aye not
sion, consistent with the growing enough to assure attainment of
capacity
of
the
economy
to the national objectives to which
we all subscribe. What this Con¬
produce without inflation.
On the supply side, basic growth gress decides, what management,*
factors are the labor force, tech¬ labor, agriculture and, indeed, the
nology, and investment of savings. public generally decide to do will
Growth of the labor force is to win
or
lose the battle against
some extent influenced by overall
debasement of the currency with
demands, but more generally by all of its perils to free institutions. The state of the nation tomorrow
population growth, age distribu¬
tion, and social customs. Tech¬ —its progress and prosperity—•/
nological progress and the desire rests with the decisions of today.
to save and invest savings pro¬
ductively are influenced by the
monetary environment. An atmos¬
phere
of
price
and
financial
stability in general is necessary
.

.

M. G. Klelzl Co. Offers:

Wenwood Stock at $3

both to the incentive to save and
to

rapid technological advance.
Thus, through continuous effbrts
to
safeguard the value of the
dollar

to create

and

a

climate of

Michael G. Kletz & Co.

Inc., of
Feb. 3 offered"
100,000 shares of common stock
(par 25 cents) of Wenwood Or¬
ganizations Inc., at $3 per share. "

New York City, on

stability in which savers The offering, which was made as can have confidence in the future
a speculation, has been completed.
value of their investments, mone¬
The Wenwood company was or¬
tary policy makes a contribution ganized on July 15, 1958 in Dela¬
to economic growth quite apart ware and maintains business of¬
from its influence

consider the influence

on

demands for

goods and services.

the

to

hold¬

money

financial

however,
cannot be measured
merely by
percentage increases in the quan¬
tity of output. Also at stake is the
opportunity to live as free men,
tive

expansion of

and financial
to

the

fices at 62 Third Avenue, Mineola,
L.

It is for these reasons that

price

stability is essential

achievement

of

maximum

economic growth. We have had a

fairly good growth record over
our history, but we have had too
much instability in our levels of
employment and prices. A major
problem is to moderate this in¬
stability
so
that the
losses
in
employment ind output of reces¬
sion periods will not depress our
longer-term rate of growth. Cur¬
rently there is widespread concern
about the danger of renewal of
inflationary trends. The Federal

of

Reserve

nomic

I., N. Y., and 526 North Wash¬
ington
Boulevard
(Route
301)
Sarasota, Fla. The company has.
also been qualified to do business v
in the States of Florida and New*
York. It is engaged in the

business

,

of buying and selling land, and
building houses, apartment houses v
and commercial properties for its'

account.

own

The net proceeds from the*.sale
of these securities will be /used for;

additional

working capital.
Giving effect to the new fi-,
nancing, the company will have*;
409,600 shares of common stock:outstanding, out of an authorized*
issue of 2,000,000 shares.

point to dangers in this situation

Second, it involves expanding de¬
mands for goods and services at a
rate

sufficient

to

utilise the

ex¬

panded capacity.
The first aspect of growth—an
expanding output potential—de¬
pends upon such basic factors as
additions to the labor force, ad¬

vancing technology, and a flow of
combined with a desire
ability on the part of pro¬

savings
and

ducers to

use

them in the creation

stock of modern
equipment. The other
aspect of growth depends upon a
balanced expansion in demands
for final
product by the major
sectors
of the economy—house¬
holds, businesses, governments at
a

growing

and

the State and local as well as the
Federal

level, and demands from

abroad.

growth to be sustainable,
an equilibrium between these two
sides of growth must be main¬
If

tained.

total

demands

not

do

keep up with the output potential,
overall

growth

will

for

slacken,

the inducement to business to add
to
If

productive capacity will lessen.
total

demands

tend

to

run

ahead of the output

potential, the
general price level will begin to
rise and this, in turn, will have an
adverse impact both on growth of
demands and

on means

of financ¬

ing
increased
and
improved
capacity. It will also have adverse
effects
on
the
efficiency with
which resources are utilized; like¬
wise, the equity or fairness with
final
products
are
dis¬

which

tributed

in

markets

among

con¬

businesses, ahd savers.
What then is the function

sumers,

of

policy in relation * to
these two aspects of growth?
In
general, it is to attempt to provide
credit and monetary resources and
an atmosphere in financial
mar¬
kets
conducive
to
the
basic
monetary

that

concern.

is not to forecast inflation.

To

Public

McMullen & Hard Admit '<

and

private actions appropriate to
On Feb. 15 Dan Drewry Mc¬
present circumstances can prevent Mullen will be admitted to
part¬
these dangers from materializing.
nership in McMullen & Hard, 120?
Among
potential
inflationary
Broadway, New York City, mem¬
factors first, perhaps foremost, is
bers of the New York Stock Ex¬
the budgetary position of the Fed¬
change.
"-rt *
eral Go vernmeht. As the economy
moves up toward more intensive
;
New Burnham Branch
*
utilization of its productive re¬
NEW HAVEN, Conn.—Burnham
sources, it is essential that deficits
give way to surpluses. There is no & Company has opened a branchy
mystery
about
this
source
of office at 205 Orange Street, under,;
•

danger. If the will exists, the way
will

found.

be

It

clearly lies in
adaptation of Federal expenditure
and tax policies in order to pro¬
duce a budgetary surplus in pros¬
perous times.
Second, there are the problems
arising from the so-called costpush inflation which is part of a
spiral process stimulated by de¬
mand
pressures.
In the period
ahead there is a strong prospect
will

demands

that

For

shares

continue

to

the

management of Isadore Hyassisted by Richard J. Hy-

man,
man.

New Paine, Webber Branchy
SAN

FRANCISCO, Cal.—Paine^

Webber, Jackson & Curtis, has;
opened a branch office at 369 Pine
Street, under the management of?
Louis Nicoud, Jr.

Bruns, Nordeman to Admit

On Feb. 28 Abraham C. Gold- '
expand. In these circumstances, we
must recognize the dangers both berg and Benjamin L. Lubin wilp
become partners in Bruns, Norde¬
of
wage increases
in excess of
man & Co.,
52 Wall Street, New
productivity growth and of price
increases beyond what the traffic York City, members of the New
York Stock Exchange.
will
bear.
Business
and
labor
leaders have

a

paramount respon¬

With Boettcher & Co.

sibility to the general public as
they make wage and price deci¬
sions over the coming year.

(Special to The financial Chronicle)

DENVER, Colo.

Then there is the easy acceptance

that

of the idea

a

—

Fred C. Lar-r

kin has become
affiliated with
little inflation Boettcher and
Company, 828 Sev-v

is not

seriously harmful. The ex¬ enteenth Street, members of the?
perience in the government bond New York Stock Exchange.'
market, to which I alluded, is a
vivid example of the influence of
Lowell, Murphy Adds
inflationary expectations in fi¬
nancial
that

markets.

such

in

reflected

the

To

attitudes

come

decisions

on

(Special to The Financial Chronicle)

extent

DENVER, Colo.—M. John Bern-wages, stein is now affiliated with Low¬
to

be

prices, consumption, and invest¬ ell, Murphy &
ment, they help to bring about Club Building.
their

own

Co.,

Inc., Denver;

realization.

Joins Purvis & Co.
major reasons for
the possible de¬
(Special to The financial Chronicle)
inflationary pres¬
DENVER, Colo.—Steve Z. Nem-_
structed and interpreted, can be
sures.
To be fully
aware
of a rava has been added to the staff
useful aids in appraising economic
danger, and to face up to it, is of
Purvis
and
Company,
171T
performance.
growth factors. At the samp time, not to despair or to capitulate, Stout Street.
Desirable economic growth goes
aggregate demand for goods and nor does it mean being blind to
beyond increases in line with a services should expand in close other
national
needs, including
growing population and labor relation to the capacity to pro¬ sustained economic growth.
Powell, Johnson Adds;
growth

for, concern when, in spite of a force. It
deqline in the demand for his possible
and

other

that

world

under

plant

Convertibility for their currencies
the end of 1958 —and other
Countries too—are giving our ex¬

the

of

and

broader

at

the

Among

economic growth is the
importance of demonstrating to

the

and

from the recession of
1957-58, it seems likely, if past
experience is a guide, that we are
on the threshold of a new period
of economic growth.
This is an

a

'

seeking

broad,

debt that is consistent with stabil¬

in industrial countries abroad and

tries which announced

Our

governmental policies on eco¬
growth, it is useful to dis¬
tinguish
between
two
related
meeting of essential private credit
aspects
of
the
process.
First,
demands,, the retention by banks
growth involves expanding capac¬
of that portion of the Governments
ity to produce goods and services.
accordance

reserves

boom con¬
ditions abroad; resumption of eco¬
nomic expansion is now beginning

eventually there should be some
improvement in foreign demand
for our exports. It is significant,
however, that the European coun¬

private

by

chants.

tates the

35

ings, through sound Credit expan¬

economy, consumption
form mainly of con¬

the

versus

distribution

ad¬

sumer

portant role to play in aiding the
Treasury's financing.
This role
involves

through

productivity

our

The banking system has an im¬

part to the ending of

-

higher

vancing technology.

economic) cycle, that the Govern- 1

tbe large

(791)

through
per

estimates,

involves

a

properly

con¬

rate that makes

rising living standards
increasing consumption

capita for present and future

generations. This requires increas¬
ing

output

per

worker;

that

is,

duce.

On

These

concern

The

the

demand

side, growth
spending out

are

will

the

about

velopment

of

Federal

continue

to

Reserve

the

best

System
of its

ability to contribute, so far as it
can, to continuing prosperity and
tion of goods and supplying of economic growth, without infla¬
services. Monetary policy facili¬ tion* Such decisions as it must
basically depends on

of incomes earned in the produc¬

(Special to The Financial Chronicle)

.

»

*

PASADENA, Calif.—Harold E.
Cooke, Eleazer C. Gray, Willianv
R. Smith and Le Roy F. Stone are'
now affiliated with Powell, John**1
son & Powell, Inc., Security Bldg.

36

The Commercial and Financial Chronicle

(792)

in

.

of continuing economic
both elements of tax re¬

to

almost

identical.

the

even

details

of

our

But

Its Impact on the Economy

we

timing of corporate tax payments
for comparability.
The personal
income figure of $374 billion com¬

pull

with a rate for December,
1958 of $359 billion; the corporate

pares

profits
for

assumption

of

the fourth quarter 1958 of $44 bil¬

lion.
I

present these estimates
the full realization that the
results

nue

turn

out

for

fiscal

with
reve¬

will

1959

we

be

to

substantially less
originally estimated.
I believe, however, that our as¬
sumptions
for
fiscal
1960
are
sound

will

and

turn

have increased

would

tax cut

downturn. Also,

a

a

our

deficjt and our public
debt, and with them the danger
of inflationary
pressures
in the

out

much

closer to the mark. They are with¬
in the range of calculations made

by private estimators, and I

un¬

derstand that similar figures have
been mentioned by some of

also

the

experts who have testified
before the Joint Economic Com¬

fear, however, that price pres¬
sures
may eventually
revive, if
we do not finally close the budget
gap.
I sincerely believe that a
nation as rich and productive as
ours must, in times of prosperity,
at least pay its way.
We can af¬
ford

that

how

all

do

to

and

much

pay

for

is

that

that

necessary,

is

will

this

are

to

we

the

from

to

mean

from
be

Let us now look at our present
situation in a broader perspective.
We are well along in the recov¬

not

us,

economic

internaitonal

and

we

our

position

sustainable

for

are

healthy growth, because we
for increasing job opportu¬

are

and

run

world

look to the long

we

possibly long period of

a

tension, we must be for the
of orderly finances

maintenance
and

stable dollar.

a

I believe that

the time to face this issue is now.

Americans

faith

have

their

in

justified.
Confidence, if shaken, is hard to
re-establish. That is why we must
faith

That

money.

is

it.

But

current

"against"

means

to

"negative." Let

us

revenues

or

misled.

be

we

about

came

The

fact

the

of

of larger crops, the Federal
Government pay increases, higher
cause

defense

Growth requires capital forma¬

auto¬

through actions not
primarily related to the recession.
Among these are the higher cost
of the agricultural program be¬

expenditures,

and
the
subscription to the In¬
Monetary Fund. Some
billion of spending, chiefly

tion, through
As

ment.

and direct

the Veterans

housing loans

Administration,

resent actions

low

it

from

once

seem

experience?
that

me

the

fol¬

First,

economy

demonstrated

more

re¬

markable resilience and resistance
to recession. This is indicated by

the fact that personal income
clined very little, and that

set

recovery

in

Gable,

the
I

attribute this good performance to
the inherent qualities of our econ¬

to the confidence and good
maintained by our people,

omy,
sense

the

and

to

that

have

automatic

become

a

stabilizers

part

of

the

economy.

Second,
'

I

am

concerned

with

the size of the deficit that the recession in large part produced and
with its continuation in a period

its

finance

to

growing prosperity. A deficit
magnitude, unless quickly
corrected, can produce serious in¬
flationary pressures in the longer

service

requires.

their

full

budget

effect.

that could otherwise

go

A

during

current

from

loss

If

as

creased

we

move

closer

deficit

of

we

the

that

the

in¬

prosperity.

Pleased,

but

safe

we

to

point where
speculate

that
save

to
is

indeed

are

to

in

from

into

saving habits, the result will

continued

deficits

cut

be further to

diminish the supply
for economic growth.

capital

We

cannot

indefinitely
expect
people to continue their saving if
they expect prices to go on rising
indefinitely. Our habits of saving,
our
financial
institutions,
our
monetary system, must not be
jeopardized.
Our

needs

crease

as

deficit

a

of

expected for fiscal

gov¬

to

as

for

our

expand

Third, the decision by the Ad¬
and the Congress to

ministration
avoid

has
we

not

a major tax cut last
spring
been justified by events. Had
resorted to a tax cut we would

have

had

this

demonstration

Of, the

economy's
inherent
re¬
cuperative
powers.
We
would




the

on

resolution

difficulties.

It

the

on

fact

in

capital will in¬

$12.9

has

omy

moved

labor

vancing

in

Consequences Abroad

are

a

strength
our

the

we

role

world

fail

preach.

Answer:

The circumstances and

prospects of tax reduction would
first depend very much on future

endeavor to achieve

full prosperity.
This sort of complex problem de¬

and will
tinuing study.

have,

serves,

The

high

which

our

onstrated

itself

as

an

It

would

should

in

economy

to

resilience
has just dem¬

suggest that

be cautious

and

evaluations

our

we

analytical
flexible

and

enough, if some future downturn
should require it, to be
willing

act

of

debt

fiscal
the

ease

re¬

commends
sound¬
task

of

monetary policy and the manage¬
of the

ment

public debt.

Circumstances for
tion

tax reduc¬

a

would

depend further upon
the degree to which we can suc¬
ceed

in

avoiding

1

inflation.

At

times of inflationary pressure we
should aim at some budget sur¬

plus;'.:-

con¬

of

some

policy

ness,

I

'v.''.'

;;'Vv

'

would

scribe

degree

seems

our

This

duction.

not

now

want to pre¬

precise formula

a

to try

or

to predict a precise time when tax
reduction

sidered.
the

might properly be con¬

I have tried to point out

varying factors which would

influence

judgment

our

the

at

time when svtch a judgment seems
to be appropriate.

Continued

from

10

page

Treasnry's Financing Views and
Debt

1959, the

year

turbance

was

NanagementfProblem
to

unsettling

very

highs

bond

and

prices—for

cor-

porates and municipals as well as

budget
proposes
a
budget balance for the fiscal year

the

reversal

thus adding to the cost

a

ing for business and for all levels
of government.

For

quite

few

a

months

the

net

effect

of

policy

will

still

be

stimulate

the

As

economy.

vances,

will

so

to

fiscal

prosperity
revenues

our

the deficit is eliminated at

of

level

At

the

the

income

ad¬
until

high
activity
if

economic

spending is under

a

control.

levels

budget, the

tax

projected
system is

expected to produce revenues ap¬

proximately

equal

to
proposed
expenditures in fiscal 1960. If we
achieve
be

our
objectives there will
need, consequently, for an

no

increase in taxes.

By
policy

eliminating the deficit, tax
will greatly ease the task
policy.
If we fail to

of monetary

keep

1960

income,
tionary

expenditures

we

contribute

within

to

infla¬

and

complicate
problems of monetary man¬
agement. Tax policy will render
pressures

the

entire market.

It is clear in

retrospect that the
in bond prices reflected
legitimate change in investor
expectations as economic recovery
set in.
Furthermore, there is no
reasoin to believe that speculation
had

than

temporary effect
in depressing bond prices.
But it
is
true,
nevertheless,
that
the
abruptness of the change in the
market was accentuated
by ex¬
more

to

The

our

key to maintaining
of the free world,
in it.
Our prestige
is

not

enhanced

practice

what

world

watches

if
we

Answer:

A

of

recurrence

arise,

very

closely.
On my trip to and
New Delhi, for the annual
meetings
of
the
International

taxes
the

most

the

world

Bank

that

impressed

to

informed

foreign

discover

was

how

well

officials

are

tax

not

could live with higher
than the present.
Ours is

we

it

productive
and

would

burdens, if

We

must

I

do

economy

in

believe

not

be

crushed

we

are

by

its

reasonable.

constantly

evaluate

such

activity

The general
public should be better protected
Further¬
against such excesses.

dealers in government

se¬

curities under such conditions

are

more,

unable

to

functions

Treasury's market financ¬

The

ing job in 1959 should be smaller
in

of

perform
their
vital
maintaining an or¬

leash

—

refunding and
issuance.
Nevertheless

terms

in

of

1959

financing schedule is
heavy.
We have
already

raised

over

in

January

of

$0.9

$4 billion in new cash
through the issuance

billion

of

21-year bonds,

$2.7 billion of 16-month notes and

$0.6 billion of additional Treasury
bills, bringing the debt up to $286
billion by the end of January.
Although the entire deficit for
the

1959 has been financed and

fiscal

ernment securities.

The Treasury

in 1958

volume than

dollar

both

derly and active market for gov¬

debt

is expected to fall by
the Treasury will never¬

is at present studying this problem
and
consultations
are
underway

June 30,

with the

rowing amounting
to an even
larger amount than that raised in

Federal

and with

various

Reserve

System

other groups in
see what

the financial markets to

be taken to restrain
speculation without at the

steps

can

undue

time

hampering
dealer operations.
same

Two

more

summer

rary

that any tax

always be improved.
mean to say that
we
cannot live with our present
taxes.
We certainly can.
If new
imperative revenue needs should

By that I do

from

Monetary Fund, I

I believe

can

Ahead

very

should be prevented.

Financing-

Sees Heavy Treasury

the
Protection Against Excesses

new lows,
of borrow¬

governments—hit

new

cessive speculation.

factors

added

legitimate

government bond
was

an

the
un¬

market.

the tempo¬

shock of the coup d'etat in

Iraq. The second was

funda¬
growing realization
on the part of investors through¬
out the country that the Federal

mental

—

more

the

Government

was

faced

with

its

additional

theless need

cash bor¬

now and the end
of the fiscal year to cover retire¬

January between
ments

We

securities

of

will

also

which

during

further to

settled

structure

for

a

The first of these

If not, what changes

would you recommend?

us

and

ad¬

toward

economic growth and stability re¬

Finally, orderly finances in
country

realizing these circumstances?

of

econ¬

is

and

up

billion

more

correspondingly.

Details

the prospects for

are

de¬

deficits

that

well continue after the

quirements?

vance

the

Stayed Put

tention
may

our economy

President's

in

If rising prices which will fol¬

of

After

gamble

trouble.

low

and

Taxes

charac¬

Federal

reduce

we

can

What

expenditures and the maintenance
of our economic growth. Economic
pends further on future business growth can be expected to raise
our revenues but it will produce
conditions and other factors that
no
surplus if we do not control
cannot now be foreseen.
As this
expenditures.
Unless
we
spend
is a continuing study both in the
wisely we will have trouble tak¬
Treasury and the committees of
the Congress, it would be prema¬ ing care of such new requirements
ture to attempt any detailed dis¬ as may prove really essential.
Next, tax reduction must be
cussion.
against debt reduction
The Committee questions deal weighed
out of surplus.
I believe that in
also with the relation of taxes to
years
of prosperity we should
the stability of the economy.
I
cases

administrative

grows.

can

reach the

ever

Question 3: Under what circum¬
stances
taxes?

under

Their application depends

ter.

many

nation

ahead,
fear

because

is

then

and

keep people
of possible
these savings to inflation.

saving

believe

con¬

to

technical

a

movements

I960.

people

Mean¬

while these expenditures will

tinue

of

cyclical

economy.

-

of this

the economy turned around before
several of the others could have

are

our

raises

the

force begins
additional assistance to monetary
rapidly in the
early 60s. This expanding labor policy by avoiding further per¬
manent borrowing by the Treas¬
force, the result of the high birth
ury in the market.
This will also
rate of the 40s, will give a
pow¬
facilitate the Treasury's own job
run, even though in the short run
erful
impetus to the economy.
these pressures are held in check But if
of handling the public debt.
job opportunities are to be
by excess plant capacity and other found, with a
Question 2: Is the present struc¬
rising degree of
factors. The extended
unemploy¬ productivity, investment in plant ture of the Federal tax system
ment benefits proved
and equipment will have to ad¬ adequate in light of the nation's
timely, but

of

review

adjustments

who

States Government

revenues

ernment

stability of prices

Explains Fear of Deficit
A

der

quickly.

very

we

consequences.

rep¬

to

the

of

with

fronted

in

our

of future deficits

this

to

seems

has

consequence,

prosperity, which
is financed through the banks, in
itself of course brings inflationary

designed to combat

conclusions

invest¬

by

the recession.
What

and

private capital formation.

resources

deficit,

fits,

Many

expenditures out
Tax policy and monetary policy
of current revenues in prosperous
.should continue to work closely
A Federal deficit financed
to
foster economic
health
with
outside the banks tends to absorb
into

mortgage purcnases, the
extension of unemployment bene¬

saving

a

should meet

ternational
FNMA

to

cooperate, with the ap¬
propriate committees of Congress.

times.

proposed

$2

con¬

assists decline in collection of corporate
myself taxes growing out of the recent
in debt management matters will recession. It also focuses our at¬
Charles

Mr.

United

or

tinue

In this

seems

appropriate to the occasion.

this connection, some advance
planning is proper so that the
right decisions can be appropri¬
ately taken when we are con¬

system

cooperating, and shall

are

whatever instrument

use

most

Under Secretary Baird and

matter is there is almost nothing discuss the fourth question, relat¬
which is more positive and more ing to
the management of the
from a recession which is now important to be for than fiscal public debt.
[Editor's Note: Mr.
This is
substantially contributing to the soundness.
am essential Gable's reply is on page 10 of this
largest peacetime deficit in our condition of our economic health, issue.]
which
we
can
have
history—$12.9 billion at present without
Question 1: What would you re¬
estimates.
Of this deficit, about neither adequate military security
gard as the proper division of
half will result from a shortfall nor
the
adequate
provision
of labor
between
tax
policy
and
in revenues. The remaining is the other needed governmental serv¬
monetary policy as instruments of
result of increases in expenditures ices.
Meeting our expenses cur¬ economic stabilization
during the
over original budgetary estimates.
rently and all that that means in coming
year?
The drop in revenues in fiscal the way of fiscal soundness and a
Answer: The first consideration
1959
is the direct result of the healthy economy is a highly posi¬
of tax policy is, of course, to keep
recession. The increase in expen¬ tive objective which deserves the
intact the system
by which the
ditures reflects for the most part support of everyone.

that

the tax

we

weakens?
Because

in

improvements

and in tax administration.

ery

increases

The Treasury has been studying
continues
to
study various

and

desirable, and
should not keep our expenditures under con¬
reach for every thing at the same trol, and the budget in hand.
time.
Even a rich
country can
Answers Speciifc Questions
take it that this refers principally
get into trouble if it keeps spend¬
The Joint Economic Committee to the cushioning effect that de¬
ing beyond what it pays for cur¬
has asked me to deal with certain clining tax collections can have
rently.
Some people seem to feel that questions
I would now like to during a recession. Illustrative of
to be for meeting current expenses turn to the first three* of these. this effect, of course, is the sharp

mittee.

matically

tion.

our

discharge

responsibilities if

nities, because

I

Aside

markets.

world-wide

present

billion future.

$47

1959 compares with a rate for

than

out of

us

prestige is at
continuing

run

we

inevitably drive up prices,
price ourselves out of

losses

have helped develop a philosophy
that tax relief was necessary to

If

form

may

world

attained in moving out of the re¬
cession of 1954, if we adjust the

than

more

here.

stake

terms

growth

budget.

Oui Fiscal Situation and

Thursday, February 12, 1959

.

In

large deficits in prosperity and so

and, when proper, tax reduc¬
While these are closely re¬
lated, they are not necessarily

about

Continued frorn first page

.

we

estimate

are

to

not

cover

in

deficit

sonal

coming

need

an

due.

amount

yet prepared to
the

heavy sea¬
July-December

1959 which will occur even with

balanced
year

budget

1960 as

The

consists
amount

a

for

the

a

fiscal

whole.

refunding job
not
only of
of
$2 billion

this year
weekly

a

or

so

of

bills which have to be
rolled over, but also $15 billion of
Treasury

deficit, a factor maturities in Febraury, 4^ billion
which was obviously very impor¬ in May, $13 *,2 billion in August
and $9 billion in November. The
tant in
the development of
an
inflationary psychology during February refunding, the largest of
the
fall
despite
the continued the
year,
was
announced
last
stability of commodity prices. As Thursday and we have offered
a result largely of this psychology,
holders of the maturing securities
a
buoyant stock market hit new a choice between a new 3%%
largest

postwar

Number 5820

189

Volume

.

The Commercial and Financial Chronicle

.

.

one year to maturity are issued
during the remainder of 1959 the
under-one-year debt will increase
by Sll1/^ billion during the year,
expect Furthermore, the passage of time
results will

certificate maturing Feb. 15, 1960
4% note maturing three years

or a

both priced at par. The
this exchange offering

from now,
books

on

closed

last

night and we
announce
preliminary

to

the

afternoon.

tomorrow

Debt Limit

Raise

for
lirnU

AlflU

ating

dunng the next

the

years

lour

area

(and

eminent

ability

the

of

to

paper,
board,
products, the paper

they

Federal

Gov-

creases.
All

the

production

record-breaking output of 32 mil-

Undei'-One-year debt to $129% bll-

debt

lion- -about 75%

is

of the total

mar-

true

only

in

relation

to

Usage

for

and

naoer

as

for

in¬

leather

be

helped by
increase in shoe

well

other

better pros-

as

including

uses

clothing and gloves.

manage

not

to

anticipated

pects

a

of the

due

are

allied

oner-

are now oper

segments

dustry

board

r\r\XKT

QW

will

and

temporary

a

37

Rising material and labor
bring slight price in-

costs

and

in manufacturing industry looks to

with no increase m outstanding
debt) would bring the amount of

We

under

purchasing pulp,

which

the Treasury
legislation on

new

the debt limit.

upon the
dollars

the

pairs.

its fiscal af- lion tons in 1959. This would exfairs soundly and to take' what- ceed 1958 production by 4% and
everever additional steps are nec- top by 2% the previous record in
pcsnrv to minimi70 InflofiAn
essary
minimize inflation. THic. 1956.
This TfiKC

present fiscal year,
ask

bung^jnore of .^^^btaWithin inflation
1960, in 1961 power of

one year area in

year

Sometime before the end of the

will

only a relatively minor part of market because of wage differenthis problem.
tials.
Far more important is the psyPaper and Board' Part of an exchological reaction of investors to panding multi-biliion-dollar inthe prospect of the effect of future dustrial
group
which
includes

and 1962 in the one
so that financing ex- invest if they lack confidence
clusively

TimH

iTo*

(793)

shoe

imnnrte

increaL

becausp

lowernrW<?

of

ex°rts^continuhm
CAjJUXUs LUiiuiiumg

with

Witu

off.

to

evnerterf

arP

to

lO

ease

Publishing:

The

board

Printing

and

-corn-

newspapers,
limit of $283

iriessusciui .t,unsequences
The importance of sound fiscal

permanent debt

will revert to the

With

billion.

$285

a

policy in setting the environment

billion public debt now estimated
for June 30 an increase in the
amount

ing,

of course,

the final out-

on

fiscal

the

of

come

budget

1959

temporary

~

require

Continued

a

public
debt—and in the temporary debt
limit—during July-December 1959,
"even though with a balanced bud¬
get this would represent financing
which
could
be
repaid di
g

jrom

substantial increase in the

Volume

slightly the business slump of the

Projections for Various Industries

the 1957 peak is in prospect. The
handmade segment of the indus-

for

try, however, is reported feeling
the impact of imports.
The silverware industry—which

the

in which

environment

pect for 1959 in this constantly
expanding industry, which felt but

16

page

past year.

January-June I960.
The

petroleum production was down
about 20% from 1957, and exports
likewise tailed off.
Demand
is

Treasury's 1959 financing program
will take place will, of course, includes flatware and hollow
_

on a great many factors,
Perhaps the two most important

ware

depend

made from sterling silver, silver-

Nation's economic growth and the
way in which the Federal Gov-

plated ware, and stainless steel—
foresees no overall growth in the
new year.
The industry has felt
the impact of Japanese stainless
the

relate to the progress of the

fiscal

ernment's

steel

are

programs

demands

and the extent to which

and jewelry is
General

for funds exceed available savings

will, of course, set the basic en¬
vironment in terms
of interest
rates and credit
availability in

have to

the Treasury will

Our borrowing, just like

operate.
r

ii

i

j

i

_

? 11

.

of

other

any

and

the

domestic

expected to
this means
in drilling.
Power

for

toys,

games,

that

Components:

_

After

.

decline

a

toward the close of the year at a
$30 billion annual rate. Assuming
l.illi

i

_

a

•

a

.

_

at least the maintenance of the
1958 year-end rate of investment

management more

debt

make

to

costly and more difficult, but that
should not be allowed to detract

of

appropriateness

the

from

an

independently conceived and
operated monetary policy as a
fundamental tool in the control of

in evidence in 1958, with

opera-

tions continuing to show strength.

This covers such items

as convey-

ors, cranes, elevators, industrial
trucks, and moving stairways. A

20%

pick-up is

a

.sary

to

1-1-

i

dens

sion

funds at as reasonable a cost

the

taxpayer

possible con-

as

objective of
sound economic
We will continue to se-

sistent with the major

contributing
\ growth.

funds

our

cure

to

largely as pos-

as

sible from true savers rather than

banks

from commercial
,

order

111

to reduce the inflationary potential of our financing operations
during

a

period of rising economic

activity.
-

a(!Xau

which

.

?e °f GV+iya
to extend

our

duce to

billion in

expansion

cost

ingly is expecting to

the

total

a

issues

in
1

the maturi-

order
uruei

to reiu ic-

minimum the disturbing

on

of

cause

to

on

of

corporate

new

municipal issues and in order

provide

the

Federal

Reserve

freedom possible
effective
monetary

with the greatest

conduct

to

policy.

we

of

reversal

enjoyed

good

a

,

vvith farm income at

S W™

ar(r,_?pt,imist,ic

despite

,jon

js

for

thfi

tunity to accomplish debt exten¬
sion we will find the shqrt-term
debt increasing

to

a

new

-

-

high in

immediately ahead. The

under-one-year

.

.

.

debt

,

,

stood

.

at

$7212 billion on
Dec.^ol, 1958. If
no
more
securities longer than




at

$1.9

forecast
5

marhinerv

Farm

To ^el foiTign

exnorts

Machinery:

outlook

con-

investment

_

IPC

revenues
over
the

Will

pIllYlK

^ fiA A

m

1111

AM

will climb $600 million
HIKO

i

1958

i-1

—

e

approximation of
$7.75 billion, which in turn repre¬
sented a $650 million gain over
1957.
Telephone
industry con¬
struction expenditures for 1959which include buildings and outside cable construction—are esti.

.

A

40 oos

.

.

c

at $2,825 billion, a gain of
011 ,ov^r 49^8» -^Bout

iv ^n^eP5n"e"ts operate 18%
tJie telephone business; the Bell

V

20%
20%

pick-up
]P^k-up

in
in

addition

prosPective
f.1T •?'? States
folo
the United
1959
The

noovKr

tne

1959.

1^9

il7-serYic7

erowtn tactor.
international

e p evious y a

in

means a

about

1Tial"

telephone

and

on

and
ma-

a

15

Ship-

.

The outlook

nues.

A

iJge'sTeel
a

toward

new records,

Aluminum

is

time bigh, with prospective outof 200 mil"lion pounds.
Chemicals: The chemical industry, now spending around $1 bilBon annually for plant expansion,
is charting manufacturers' sales of

$24-4 billion in 1959, a 5% increase
sales

1958

over

"gain "approximately "i%
in

is

foil for packaging
approaching an all-

$23.2

of

billion,

Exports are expected to top the
1958 figure of $1.4 billion, and im-

the

on
-

-

-

railroads.

-

Only
as

„

85,974 in that period of 1957.
car

Do-

builders virtually have

been eliminated from the foreign

with

of $1 425 billion

Book publishers expect another
record year,

topping the 1958 fig¬
$1.1 billion. - Estimates are

of

ure

for close to $1.25 billion sales, with
the domestic market expanding in

direction and exports

every

also

rise

the

on

Photographic

Products:

Con¬

tinued expansion of industrial and

personal
use
of
photographic
products is expected to bring sales
of
equipment
and
supplies
to
$2,124 billion in 1959, a 7.7% in¬
crease

nhivm

rf

i

/liifitvi

n

ofi

viAitr

nco

w* r»

1958.

over

__

a

synthetic rubber—from the chemScientific and Industrial Instrufactor, but competition from ments and Apparatus: Sales in this
abroad—including that from So- area in 1959 are expected to rise
Imports still

area.

viet

Russia—is

Textiles:

UDturn'but

the

on

The

are a

minor

the degree of

for

room

profits

production

6% from 1957 and 13% from 1956.
the year ended,

As

tivity in the

increased ac¬
a whole

economy as

ffCSjTJPnrl *°r betterment in the

fabric mills.

weaving of man-made fibers should experience substantial
—but not
spectacular—improvement in
•

f

i.1.

..

output, prices, and profits
1

A.

generaf upturn
_

_

if the
.

.

.

.

......

i

^

.

^

Z

^

in economic

The woolen and worsted indus¬
a modest rise in 1958,
perennial problems of im¬
ports and low levels of fabric con-

try looks for
but the

L^ntion remain
sumPtlon iemamMen's and

boys' wear markets
strengthening, and a slight inin prices is in prospect.

crease

Food

look

The out-

and Beverages:

the

for

new

year

with average prices

is

good,

remaining at

the same or a slightly lower level
than the high level of 1958, when

ailu
ueveiuumein
uius
and devel
nt> plu3
spending in
guided

^

restjarcii

th^

mjssde

jn

gaies

1953

ap.

proximated the 1957 level.
Office

Equipment:

Typewriter
high, ap¬
proximating $300 million in 1959,
as against an estimated $255 mil¬
lion in the past year. Most of this
sales

reach

may

represents

new

a

domestic

but there is

production,

substantial volume

a

coming out of foreign branches of

American Manufacturers.

In the

six years, the U. S. has
switched from the leading exporter of type writers to a net
importer. Exports for 1958 are
1
(M
past

Arff

a/1

ws

n

4-

Am

n-n/I

i

w*

estimated at $15 million and imports, $20 million. Germany is
dominant in this import trade.
a

.

activity is sustained.

are

previous

because of continued emphasis on

.

in 1958,
off about

was

the

pros-

.

terials leTt cotton cloth producers
when

above

year's estimate of $3.25 billion,

■

little

15%

to

is in

now

."""he cleg ee of pros

...

'

10

rise.

industry

Perlty will vary in the several
a e^™f
fcompetition is
a disturbing factor,
Pr^c.esu ±0f products and
J; e.jvely highi prices for raw ma-

nnn

_

Motion Pictures: Box office

ceipts

_

•-

re¬

estimated at $1.2 bil¬
1958, and the same level
is in prospect for 1959, with higher
lion

are

in

admission prices. Attendance is
not expected to increase greatly,
The sharp reduction in the production of feature films in 1958
is due to carry-over into 1959.

Foreign

importations

bene-

are

fifing from this situation.
The forei«n market

for Ameri-

ufacturers' sales continued to rise

The ioieign market ±or Ameri
can films continues strong, and

despite the slide in the economy
generally.
Good crops and in-

ning around $215 million annually,

consumer

expenditures and man-

remittances from abroad are run-

creased number of livestock mean
more

supplies available for proc-

strengthen the demand Food and
beverage sales are expected to be
.

.

'

against
against

excess

view.

Substantially all major manuExports also continue to grow,
factoring industries now use maTnrlnHim* "nineties and with 1958 sales estimated at $86
terials -— 1PF1UQ;million, f
including plastics and
for
record.
new record

UP 3 t0
A continuing decline in exports
slump is considered likely, due to com37,531 petition from foreign producers

carg were produced in the

first 10 months of 1958

prevails in the

in 1958, compared with 1957.

nues

volume in

slight improvement in 1959 after
a
production downturn in 1958
that reflected the business

situation

periodicals field, which sustained
a loss of 5-6% in
advertising reve¬

Gross Securities Company
rnrrnPfI :n I

-i-—j.

and dollar shortage,

(Special to the financial Chronicle) .

LOS ANGELES, Cahf.-Gross
Fifth

with offices

street

SQn

B

in 1958 was 587 million

in

secu-

ensaee

a

_

President

Gr0SS)

prp<ddpnt.

duction

West

rities business. Officers are Nel-

record output

a

to

been

at 816

Flfth freet 10 e"S®ge in^secu
Treasurer;

of 600 million pairs this vear. Pro-

has

Company

Securities
formed

Shoes and Leather: Shoe manuShoes and Leather:

facturers look for

An<yplp«

n<s

wormed in LOS Angeies

car

a

-

like

a

heading

are

telegraph operations and the do- essing and marketing in 1959, and
mestic telegraph industry also indications for an increase in per
continue to expand.
capita consumption along with the
Railroad Freight Cars- The
n01^1 population increase will

mestic

VPPr

Drilling Machinery:

tninnhnnno

d'a,linS s.ervlce ,for
long'-distance calls has been a big
«rowth factor
J1.011! ,.D"ec

Oil Field, Gas, and Water-Well

t

nrpvinn<!

mill inn

in

l0iai
ir—

freight

.

Tnp

9

,

totil

bmp25%

^57ts,uin„7 8. f i*

1

of

'r?Jji1?g®°,mng'.

billion annually, also

The

domestic

and lumber consumer—looks for

Based

for

chinery industry is due for

Trnm

plant

competition. buUdtrfnLTrt-

higher coal
steel production, the mining
to
to

to

pernaps a lo

iq%

the

is

produc.
produc
billion,

Vear—nerhans

nGW

Mining

do not seek every oppor¬

■--

estimated

a]?d a^m^VJst;3increase

tinue

the years

1953

and

Manufacturers of

equipment
|

r

f«

and

telephone operating industry also is optimistic,
with expectations that operating

this

Machinery

Equipment:
farm
ye

way

System, the rest.

Agricultural

Sees New High in Short Terms
If

the

uuicuig upw- for 1959 despite a possible drop in
the money markets and farm income
income.
The 1958
19gg

the flotation

The

be-

prosper

under

$200

than $1 billion.

Eool?

the

tele-

million

program

will

?1nn

,,

and

ma-

operating

government for defense purposes.
The industry now has a plant

general

reflected

effect of Treasury financing oper-

ations

Construction

1957.

for

^

phone, telegraph, radio and cable
companies—anticipate a good year
in 1959, with sales of the growing
industry reaching $2.55 billion.
This compares with $2.48 billion
in 1958 and $2.7 billion in 1957.
About 20% of shipments go to the

downturn in 1958 and correspond-

chinery

also continues to take

arises

ties of

Construction
Machinery:
In¬
dusfry looks for a fair production
year jn 1959, with shipments estimated
at
$2 billion,
compared
with $1 7 billion in 1958 and $1.8

trend.

will

.We

tools.

the

the geneial business deS®

Newspapers, looking to a circu¬
lation figure of 60 million, expect
a
10% gain in advertising reve¬

whose sales respectively exceed $1

ical

equipment—
highly com¬
switcning
switching and transmis-

n.r/Mi

—

•

includes

pncateci
plicated

more

i

-l

communications

raise

„

1958 vol-

orders,

Conditioning and Refriger-

Air

in

over

Communications: Manufacturers

1959 to ation: A 10 to 15% pick-up is
pursue the major objectives which forecast.
Other lines where imhave guided our operations dur- provement
is in sight include
ing the past year. The Treasury anti-fridtion bearings, industrial
will continue to secure its neces- pumps,
compressors,
and hand
continue

will

We

10-

reflected later is the low level of

that

possibility,

the

over

and fiber boxes,

cans

hon.
n

which

annually exceed $1 billion.
It is
expected that early 1959 will see
a reversal of the slight downturn

38%

but fell below 1957

year.

_

inflation.

7

about

i*

i

of

area,

Both metal

P°rts to remain even at $300 mil-

Specific reviews in the capital
goods field follow:
Production and sales in this

slight

activity is due to the
backlog of orders in the industry,
A disturbing factor that will be

new year starts,

interest rates than the
of any other borrower. At
monetary policy may seem

A

Current

which must be done
postponed. Because
of
its size
Treasury
borrowing
terms obviously have
a greater
on

better the record output of 1957.

year.

and cannot be

Materials Handling Equipment:

......

is looked for, but steam-turbine production is scheduled at a
somewhat lower rate than
last

borrowing

the

Folding cartons and glass con¬
tainers, with annual sales nearing
$1 billion each, should equal or

likewise

hydro-turbine production, a

new

times

a

ume

outlook generally favorable

terms

3.9%, and
substantial increase

substantial increase

outlays, the broad-gauge group of
capital goods industries finds the
as

encourag-

go up about

record

In

Equipment

more

Equipment:

ran

—a

promising.

Industrial

as

falling-off is in prospect for steam
boiler output after 1958 shipments

maturing issues nor new issues
are supported by the Federal Reserve.
Government borrowing is

impact

rates

ing than operations in 1958, when

year average

during 1958 from the peak reached
in 1957, business outlays for new
plant and equipment have firmed
rt» On

debtor, will
continue to be done in a market
environment
in
which
neither
that

in

outlook

The

growth

economic

of

rate

which

flatware

1959

market.

handled.
The

all antic-

1Pate a 8°°u year,

,

seems

picture.
In addition
financing needs will

b°°hs, and periodicals

Commercial printing, ranking as
in which debt management oper- mortgage debt corporate debt and chiding glass, to provide additional one of the country's largest indusations are undertaken cannot be
,
,
,
'
technical
qualities
as
well
as
tries, expects to do a volume of
overemphasized. The fact that a
ancl local government debt wider uge for paper and board<
business in excess of $6 billion,
budget deficit means a larger without running the risks of seContainers and Packaging:
for 1858 approximated
amount of money to be raised is rious monetary inflation.
High-level operations are in pros- ^
billion, with some segments

debt
limit
to
that
indicated, depend-

permanent

0£ pr0sperity, and a growing pub- manufacture. Research, however,
lie debt, mean just that much less is opening the way to possible
opportunity for an expansion of utilization of synthetic fibers, in-

7

Waller,

Robert
and
±

Robert
j

c?

and

ViceNolen

C

'+

Vice-President and Secretary.

'

38

The Commercial and Financial Chronicle

(794)

in

Now

it Acme Oil Corp., Wichita, Kan.
(letter of notification) 95,830 shares of common
(par $1). Price—$1.50 per share. Proceeds—For

Feb. 4

Registration

ir American Premier Insurance Co.
2
(letter of notification) 9,000 shares of capital
(par $16) to be offered for subscription by stock¬
holders of record Feb. 4, 1959 at rate of 9/16ths of a

share

Research

Associates, Inc.
400,000 shares of common stock (par five
Price—$6 per share. Proceeds—For research and
development program; and for equipment and working
capital. Office — 4130 Howard Ave., Kensington, Md.
1

filed

cents).

Underwriters

Wesley Zaugg & Co., Kensington, Md.,
and Williams, Widmayer Inc.,
Washington, D. C. Offer¬
ing—Expected in January.
—

Alaska Juneau

Gold Mining Co.
640,660 outstanding shares of common
stock, of which 300,000 shares are to be offered cur¬
rently and the remaining 340,660 shares in the future.
Price—To be supplied by amendment.
Proceeds—To
selling stockholders. Office—6327 Santa Monica Boule¬
Dec.

29

vard,
&

filed

Los

Angeles, Calif.
Co., Los Angeles, Calif.
Algom

Uranium

Underwriter—Lester, Ryons
No public offering expected.

Mines

for

each

share

held.

Price—$33

share.

per

Dain

Pro¬

the

holders

to

purchase common shares at $11 (Canadian) per share
at any time to and including March 2, 1959. Proceeds—
To be used for general corporate
purposes and may be
applied to the redemption or repurchase of the com¬
pany's mortgage debentures. Office
335 Bay St., To¬
—

ronto, Canada.

Underwriter—None.

Allied

Publishers, Inc., Portland, Ore.
Nov. 28 (letter of notification) 22,000 shares of common
stock (par $1). Price—$8.50 per share. Proceeds—For
general

corporate

purposes.

Office—665

S.

Ankeny St.

Portland 14, Ore. Underwriter—First Pacific Investment

Corp., Portland, Ore.
•

All-State

Properties Inc.
Dec. 29 filed 985,734 shares of
capital stock (par $1), of
which 685,734 shares were to be offered for
subscription
by stockholders at the rate of IV2 new shares for each
share held

as

of Feb.

10, 1959; rights to expire

on

Feb.

125, 1959. The remaining 300,000 shares were offered
publicly. Price—$2 per share. Proceeds—For additional
working capital and new acqwisition, etc. Office — 30
Verbena

Avenue, Floral Park, N. Y. Underwriters—For

public offering only: Alkow & Co., Inc.;
Hardy & Co.;
John H. Kaplan &
Co.; Levien, Greenwald & Co.; and
Schrijver & Co.; all of New York.
American Asiatic Oil
Corp.
Nov. 24 filed
100,000,000 shares of capital stock. Price—
Two cents per share. Proceeds—To
selling stockholders.

*

Office—Magsaysay Building, San Luis, Ermita, Manila,
Republic of Philippines. Underwriter
Gaberman
Hagedorn, Inc., Manila, Republic of Philippines.
—

or

Issuable

under

agreements

or

are

with

stodk sales made by
them.] Proceeds—For the operation of other branch
offices, both in Arizona and in other

on

states.

Office—2001 East

derwriter—None.
f

Roosevelt, Phoenix, Ariz.

Un¬

American Enterprise
Fund, Inc., New York
Oct. 30 filed 487,897 shares of common
stock. Price—At
market.
Proceeds—For investment.
Distributor—Ed¬
ward A. Viner &
Co., Inc., New York.
American Growth
Fund, Inc., Denver, Colo.
1,000,000 shares of capital stock (par one
cent).
Price—At market.
Proceeds—For investment.
Office—800 Security
Building, Denver, Colo. Under¬
writer—American Growth Fund
Sponsors, Inc., 800 SeNov. 17 filed

-

'

curity Bldg., Denver 2, Colo.

,

American Mutual Investment
Co., Inc.
—

Company

-

may

construction

develop shopping menters

and

loans.

build

or

purchase office buildings. Office—900 Woodward
Bldg.,
Washington, D. C. Underwriter—None. Sheldon
Maga¬
zine, 1201 Highland Drive, Silver
Spring, Md., is President.

American Natural Gas Co.
Jan. 29 filed 486,325 shares of
;to be offered for
subscription
of

record

for each

.

and

Feb. 26,

common

by

stock

common

of

(par $25)

stockholders

one

new

share

held

(with an oversubscription
privilege); rights to expire on March 12. Price—To be
determined just prior to
offering. Proceeds—To be used
as the equity base for
the financing of
substantial ex¬
pansion programs of system
companies.
Underwriter—
To be determined by
competitive bidding. Probable bid-

-

£?r!L y^te' TWeld & CoBlyth &

Co., Inc.; The First

to

be received

up

to

11

and Drexel & Co. (jointly);
Boston

a.m.

Broadway, New York 6, N. Y.




payment of ail
share for each $4

one

creditors.

current

pay

Address

<-

50,000 shares of

common

Office—1301 Avenue L, Cisco, Tex.
Kamon is President.

voting stock

(par

--'y

Inc. (2/24)
shares of common stock, to be of¬
subscription by common stockholders at the
rate of one new share for each iive shares held on Feb.

u

24; rights to expire on March 10. Price—To be supplied
by amendment. Proceeds—For development of produc¬
ing properties and for general corporate purposes. Office

•

&

Fair St., Olney, 111. Underwriter — W. E.
Co., New York, N. Y., and Cincinnati, Ohio.

Canal-Randolph Corp. (2/19-20) v "V v;-/
28 filed 816,721 shares of common stock
(par $1).

Jan.
The

Underwriter—None.

corporation proposes to offer to purchase .shares of
and
preferred stock
of United Stockyards,
at the option of the holder, to exchange shares

common

.

and/or

Fidelity Lite Insurance Co.;-.^'':"U''."-.
258,740 shares of common stock (par
$1), of which 125,000 shares are to be offered publicly
and 133,710 shares to employees pursuant to stock
pur¬
chase options. Price—To public, $6 per share- Proceeds—
For expansion and other corporate
purposes. Office—At-v
Underwriter—None

for

Hutton

Bankers

of United for shares of Canal-Randolph. The rate of
exchange is to be supplied by amendment. Price—To be
supplied by amendment. Underwriters—New York Hanseatic

^

The former has agreed to acquire not ; in
of 162,500 shares of Canal-Randolph
fcOmmoh;
the latter a maximum of 110,500 shares.'"
-"to

excess

•

10,1958, filed 400,000 shares of common stock (par
cents). Price—$1 per share. Proceeds—To reduce out¬
indebtedness and for

working capital. Office-7
St., Houston, Texas. Underwriter—McDonald,
(formerly McDonald, Hoiman & Co.,
Inc.), New York.
,

Corp., New York/and Rea Brothers Ltd., London,

England.
and

^

Bankers Management Corp. v

Carraco Oil

Co., Ada, Okla

(2 24-27)

Nov. 10

;

1404 Main

(letter of notification) 199,733 shares of common
stock. Price—$1.50 per share.
Proceeds — For general
corporate purposes. - Underwriter — Berry & Co., New
York. •

''f.

Kaiser & Co., Inc.

Cemex of Arizona, Inc.

,

Bankers Preferred Life Insurance Co.
Jan. 30 (letter of notiifcation) 100,000 shares of common
stock (par $1.60). Price—$3 per share.
Proceeds—For.

incidental to operation of an insurance com¬
Office—Suite 619, E. & C. Bldg., Denver, Colo.
Underwriter—Ringsby Underwriters, Inc., Denver 2, '
Colo..
■' "'/v"v
expenses

pany.

Barden Corp. (2/19)
Jan. 22 filed 102,533 shares of common
stock, to be of¬
fered for subscription by stockholders at the rate of one
new share for each six
shares held on or about Feb.

18,

about March 5.

Price—To be

Proceeds—To reduce bank loan

indebtedness; for property additions; to acquire manu¬
facturing laboratory equipment; and the balance for gen¬
eral corporate purposes. Office—East Franklin
St., Dan-

bury, Conn.

Underwriter

New York.
•

«

—

1

Shearson, Hammill & Co.,
■

30,000

shares

of

offered in units

debentures

due

Jan.

stock (par 10
of debentures and

common

of $100

6%

sub¬

1, 1969 and
cents) to be
10 shares of

for

Denver, Colo.

,Z

,

-

'

■

->

.

'/>■.•

Jan. 21

fered
rate

filed

for
of

145,940 shares Of

subscription by

one

share

new

(2/19)

•

stock, to be of¬
stockholders at the

common

common

for

/[ .♦"

/,

Central Illinois Electric & Gas Co.

each

10

shares

held

as

of

record Feb.

17, 1959 (with an oversubscription privilege):
rights to expire on March 5, 1959. Price—To be supplied

by

amendment. Proceeds—To

and

for payment of-bank

be used for construction

loans.. Underwriter—Stone &

Webster Securities Corp., New York.
•

Century Food Markets Co.

Jan. 9 filed

118,112 shares of

*

(2/13)

common

stock (par $1) to

be offered for subscription by holders of common stock
at

the rate of
of about

one

new

share

Feb.

for

each five shares held

10, 1959; rights to expire

2, 1959. Price—$5

on

or

about

shares Proceeds—To

dis¬
charge bank loan and to replenish working capital. Un¬
derwriter—Janney Dulles & Battles, Inc., Philadelphia,
per

Pa.

Office—

City Lands, Inc., New York
100,000 shares of capital stock. Price—$20
per share.
Proceeds—To invest in real estate. Office—

Altsehull, President, 1027 Jefferson Cir¬
Martinsville, W. Va. Underwriter—Securities Trad¬

Room 3748, 120 Broadway, New York. N. Y. Underwriter
—Model. Roland & Stone, New York, Offering — Ex¬

Price—$100 per unit. Proceeds—For equipping
decorating a new store and acquisition of real estate
a

new

warehouse

and

working

capital.

c/o Edward H.
cle.

•

(letter of notification) 300,000 shares of common
(par 25 cents). Price—$1 per share. Proceeds—
For working capital.
Address—P..O. Box 1849, 3720 E.
32nd Street, Yuma, Ariz. Underwriter—L. A. Huey
Co.,

March

of

\

Nov. 17

.

stock.
and

/

stock

as

.

Bargain Centers, Inc. (2/19)
20
(letter of notification) $300,000
convertible

Box-506,

—204 South

Feb. 28,1958, filed

or

O.

None. Offer¬

Calvert Drilling,
filed 100,012

Robert

1959; rights to expire on
supplied by amendinent.

P.
—

Jan. 13 filed

ing Corp., Jersey City, N. J. Statement effective Feb. 11.

(2/26)

1959, at the rate

10 shares then

in

creditors

current

discharged; rights to expire about two weeks
mailing of offer. Price—$4 f n share. Proceeds—

fered

(56y4

standing

to

—

cents per share). Proceeds—To purchase
improvements; to buy additional ranch in
Queensland, Australia; and for other corporate purposes.

25

offered

Brookridge Development Corp.
Dec. 19
(letter of notification) $200,000 of 6% 15-year
convertible debentures. Price—At par ($500 per
unit).
Proceeds—For expansion and working capital. Office—
901 Seneca Ave., Brooklyn 27, N. Y.
Underwriter
Sano & Co., 15 William St., New York,- N. Yr„

for

ordinated

Dec. 17, 1957, filed 490,000 shares of
capital stock. Price
.,-—$10.20 per share. Proceeds
For investment in first

notes, second trust notes

will

Australian Grazing & Pastoral Co., Ltd.
13 filed 4,000,000 shares of common stock/Price—

tanta. Ga

for

be

Jan.. 30

Nov.

trust

shares

common

Jan.

par

common

ing—Has been delayed.

Price — $25 per share.
Proceeds — To purchase
additional contribution certificates of Great Basin Insur¬
ance Co.
Office—704 Virginia Street, Reno, Nev.
Un- '
derwriter—None.

cattle;

•.

to be offered for subscription by stock¬
1, 1958 on the basis of one new
each four shares held; 'unsubscribed shares

part of claims, at the rate of

To

$10).

At

&

Bridgehampton, L. I., N. Y. Underwriter

Investment Co.

filed

Office—Covington,

gas.

Fuller

(par $1)

after

con¬

Feb.

various policy holders
in American Buyers Life Insurance
Co. and American
Life Assurance Co.
(both of Phoenix) permitting them
to purchase stock at
$1.25 per share. Sales personnel
have been given the right to purchase stock at $1.25
per share up to the amount of commission
they receive

,

Feb. 3

petroleum

of claims

selling stockholder. Price
supplied by amendment. Proceeds—To acquire
bowling centers and increase working capital (part
:o
be used in defraying cost of acquisition of stock of
owner of a Brooklyn
(N. Y.) bowling center.
Office—
135 Front St., N. Y.
Underwriter — To be named by
amendment.
Offering—Expected any day.
Atlas

liquified

Co., New York and
Howard, Weil, Labouisse, Friedrichs & Company; New
Orleans, La.
v'
' '• V
''

will

—To be

%

of

Underwriters—S. D.

share

new

&

American Buyers Credit Co.
Nov. 13 filed 5,000,000 shares of common
stock, of which
4,545,455 shares of this stock are to be offered for
public
sale at $1.75 per share.
[Shares have been
issued

the

bution
La.

stock

out¬
cent)/ The

of the company and
be offered for the account of a

Price—To

holders of record Nov.

Bowling Centers, Inc.

account

stock.

common

.

standing shares of common stock (par one
preferred shares are to be offered for public sale for the

which entitle

company

of

Bridgehampton Road Races Corp.
Oct. 23 (letter of notification) 15,000 shares of

writer—Bruno-Lencher, Inc., Pittsburgh, Pa.
Nov. 24 filed 300,000 shares of 20-cent cumulative
vertible preferred stock (par one cent) end 50,000

the

shares

50

supplied by amendment. ' Proceeds—To retire shoftterm bank loans, and for
working capital to be used for,general corporate purposes. Business—Sale and distri¬

,

warrants

-

$500 bf

&

Jan. 15 filed 822,010 shares of common stock to be issu¬
able upon the exercise of outstanding stock purchase
of

•

be

Armstrong Uranium Corp.
]
Jan. 16 (letter of notification) 3,000,000 shares of com¬
mon stock
(par one cent). Price — 10 cents per share.
Proceeds—For mining expenses. Office—c/o Hepburn T.
Armstrong, Round Up Heights, Cheyenne, Wyo. Under¬
Associated

Hydrat^ne Gas, Inc. (2/20)

debentures and

Co., Inc., of New York.
in Name—Formerly United-States Telemail
Change
Service, Inc. Offering—Expected early in 1959.

Ltd.

Blossman

29 filed $1,200,000 of 5% subordinated convertible
debentures due Dec. 31, 1978 and 120,000 shares of com¬
mon stock
(par $1)' to be offered in units of

(par
$1). Price—$4 per share. Proceeds—To purchase equip- 1
ment and supplies and for working capital and other
corporate purposes. Office—Salt Lake City, Utah. Un¬

.

—

Dec.

American Telemail Service, Inc.
Feb. 17, 1958, filed 375,000 shares of common stock

Treat

issue *

•

•

capital and surplus accounts. Office — 15
Broadway, Rochester, Minn. Underwriter—J. M.
& Co., Inc., Minneapolis, Minn. ■

derwriter—Amos

REVISED

Underwriters
Nicholas Modinos & Co.
(Washington, D. C.) in the United States and by Forget
& Forget in Canada. Statement effective Jan. 27.
~

ceeds—For

North

previous

real, Canada.

stock

development of oil and gas properties. Office—Orpheum
Bldg., Wichita, Kan. Underwriter—Lathrop, Herrick &
Smith, Inc., Wichita, Kan.

additionsv

since

ITEMS

•

Feb.

stock

Dec.

Thursday, February 12, 1959

.

★ indicates

Securities

Advanced

.

.

Corp. Bids—Expected
(EST) on Feb. 26 at 165

pected in February.

Bargain City, U. S. A., Inc.
Dec. 29 filed 5,000,000 shares of class A common stock
(no par). Price—$3 per share. Proceeds—For expansion
and acquisition or
leasing of new sites. Office — 2210

Clute Corp.
Aug. 21 (letter of notification) 300,000 shares of common
stock (par one cent). Price—$1 per share. Proceeds—To
pay

Walnut

of

Street, Philadelphia, Pa.

Underwriter—None.

Bellec'-asse Mining Corp. Ltd.
29 filed 800,000 shares of common stock
(par $1).
Price—Related to market price on Canadian Stock Ex¬
change, at the time the offering is made. Proceeds—To
Oct.

additional costs of construction; and for retirement
obligations and working capital. Office — c/o John
Harlan Lowell, 2200 Kenton, Aurora, Colo. Underwriter
—Lowell. Murphy & Co., Inc., Denver, Colo.

years as

-Combustion Engineering, Inc.
filed 64,011 shares of capital stock to be offered
in exchange for 81,002 shares of the outstanding common
stock and for 2,131 shares of the outstanding $100 par

and for general administration
expenses.

tion

be

applied over the balance of 1958 and the next three
follows: for annual assessment work.on the com¬
pany's properties (other than mining claims in the Mt.
Wright area in Quebec); for general prospecting costs;
Office—Mont-

Dec. 19

preferred stock of General Nuclear Engineering Corp.,
at the rate of

seven

shares and T4°0?

of r'omWus;.

Engineering stock for each 10 shares of

commcn

Volume

The Commercial and Financial Chronicle

Number 5820

189

General

(of Dunedin, Fla.).

Nuclear Engineering

Commerce Oil Refining Corp.

i

$25,000,000 of first mortgage bonds due
Sept. 1, 1968, $20,000,00 of subordinated debentures due
Oct. 1, 1968 and 3,000,000 shares of common stock to be
offered in units as follows: $l,00u of bonds and 48 shares
of stock and $100 of debentures »*d nine shares of stock.
Price—To be supplied by amen<ument.
Proceeds — To
construct refinery. Underwriter—Lehman Brothers, New
Dec. 16,1957 filed

\

York.

Offering—Indefinite.

(letter of notification) 900,000 shares of com-mon
stock.. Price—At par (10 cents per share).; Pro¬
ceeds—For investment. Office—450 So. Main; St., Salt
28

Lake

Gity, Utah. Underwriter—Earl J. Knudson & Co.,
City, Utah.
:
:

Power Co.
762,565 shares of common stock (no par)
.qbeing offered to common stockholders of record Feb. 5,
h-1959, at the rate of one new share for each unit of 10
shares pr less then/held; rights to expire on Feb. 24.
Certain officers and employees of the company, and its
subsidiaries will be entitled to subscribe up to and in¬
cluding Feb. 19 for shares not subscribed for by stock¬
holders." Price—$22.50 per share.' Proceeds —/Together
Connecticut Light &

»•

iJan/ 16

filed

,

.

iriternik sources are to be
outstanding bank loans, to finance
1959 construction program, and for

J with funds available from
used to repay certain
in part the company's
'

118,000 shares of common
stock (par 14 cents). Price—$2 per share. Proceeds—To
develop patents and inventions and for general corporate
Office — 2 Secatog
Underwriter—None.
-

N. Y.

.

■

-r

;

other corporate purposes.

Underwriters—Morgan Stanley
\& Co., New York; Putnam & Co., Hartford, Conn.; Chas.
W. Scranton & Co., New Haven, Conn.; Estabrook &
"Co., New York and Boston, Mass.

Office—80 Fifth Avenue, New York,
Underwriter—Ross, Lyon & Co. Inc., New York.

Cryogenic Engineering Co.
Sept. 22 (letter of notification) 150,000 shares of class A
common stock (par 10
cents). Price—$2 per share. Pro¬
ceeds — For repayment of loan; purchase of plant and
office equipment; raw materials and supplies; and for
working capital, etc. Office—U. W. National Bank Bldg.,
1740 Broadway, Denver, Colo. Underwriter—L. A. Huey,
Denver, Colo.

Ave., Port Washington,

purposes.

Consolidated Edison Co. of New

York, Inc.
Dec. 23 filed $59,609,500 of 4% convertible debentures
due Aug. 15, 1973 being offered for subscription by com¬
mon stockholders at the rate
of $100 principal amount

Derson Mines Ltd.

Jan.

26, 1959; rights to expire on Feb. 13. Price—
(flat). Proceeds—To repay short-term bank notes,
and for additions to utility plant. Underwriters—Morgan
Stanley & Co. and The First Boston Corp., both of New
on

Nov.

Salt Lake

keting program.
N. Y.

(letter of notification)

of debentures for each 25 shares of stock held of record

Commercial Investors Corp.

..

ic Conotorc, Inc.
Feb. 3

stock and each share of preferred stock, respectively, of

39

(795)

June 5 filed 350,000 shares of common stock.

Price—$1
share. Proceeds—For new equipment, repayment of
loan, acquisition of properties under option, and other
corporate purposes. Office—Toronto, Canada, and Em¬
porium, Pa. Underwriter—None.

100%

per

York.

^ Consolidated Laundries Corp.

★ Diversified Growth Stock Fund, Inc.

Feb. 5

(letter of notification) 12,500 shares of common
stock (par $5) to be offered to employees under an Em¬
ployers' Stock Purchase Plan. Price—To be determined
by market value on the New York Stock Exchange (ag¬

Feb.

Office—122 East 42nd
Street, New York 17, N. Y. Underwriter—None.

Jan.

9

filed

(by

amendment).

an

^additional

2,500,000

shares of capital stock (par $1). Price—At market. Pro¬
ceeds—For investment. Office—Elizabeth, N. J.x

Diversified Inc., Amarillo, Texas
6 filed 300,000 shares of common

gregate not to exceed $300,000).

stock (par 50
cents). Price—$3 per share. Proceeds—For acquisition
of undeveloped real estate, for organization or acquisi¬

Cormac Chemical Corp.

tion

of

finance business, and balance to be
working capital. Underwriter — Investment
Service Co., Denver, Colo., on a best efforts basis.

Jan. 22 filed 108,667 units of 108,667 shares of common
stock (par one cent) and 108,667 common stock purchase

used

warrants, each unit consisting of one common share and

consumer

for

★ Diversified Mineral Investments, Inc.
(letter of notification) 300,000 shares of common
Price
At par ($1 per share). Proceeds — For
working capital. Office—Bonnie Kate Bldg., Elizabethton, Tenn. Underwriter—None.

warrant, to be offered for subscription by holders
common stock of Cormac Photocopy Corp. at the
rate of one such unit for every six shares of Cormac
Photography common held. Price—$2 per unit. Pro¬
ceeds—To finance the company's development and marone

Feb. 3

of the

stock.

—

Drug Fair Community Drug Co., Inc.
Feb. 10 filed $750,000 of 51/2% subordinated sinking fund
debentures due March 1, 1974 (with warrants attached

CALENDAR

-

To finance current

American Natural Gas Co

2-'—Common

486,325 shares

'

(Milton

LEL, Inc.
fvij.

(Kuhn,

Blauher & Co./Inc.) $600,000

D.

V.»f PA1'.'
T

National

$250,000 '

*f

Westheimer &

and

X'

X

Lyon

(Ross,

:

Western

'1

&

Service

Gas

Inc.)

$300,000

(Tuesday)

Witter

(Dean

&

xv.

March 4

(Bids

(Bache

&

Standard Sign

Japan (Government of)

Ohio

Bonds

Power

--Bonds

$25,000,000

$300,000

(Monday)
EST)

a.m.

Equip. Trust Ctfs.

Southern Pacific Co

,'-y-

(Blyth

Co.,

&

Inc.)

'H2

Corp

(Offering

—

To be determined by

Emerite Corp.

(letter of notification) 250,000 shares of series 3
stock (no par) to fye offered for subscription
by stockholders on the basis of one share of series 3
stock for each three shares of series 1 and/or series 2

&

102,533

Co.)

(Bids

Common
by

-

Power

816,721 shs

February 20

,-

(Friday);".'

V'

*

(Offering

to

&

by
100,012 shares \

Co.)

E.

Hutton

CST)

noon

(Bids

11:30

a.m.

EST)

TV.Junior Publications, Inc.

February 25

X

11

a.m.

Com. & Warrants
lV.
'

(McDonald

.

&

Co.

and

Kidder,

EST)

Talcott

(Bids

Common

Dec.

Co.)

Bonds
:

225;000,

Montana

(James), Jnc._

_

___2___^Common

-

Power

Nov.

(Bids to be Invited) $20,000,000

X

-

(Smith,

Barney




-Common
& Co.)

300,000 shares

-Bond*

Pennsylvania Power Co
(Bids to be invited)

$8,000,000

17

Finance Co.

(letter of notification) $300,000 of 10-year 6%
debentures. Price—At par (in de¬

senior subordinated

nominations of $1,000

(p. Eberstadt'& Co. and White/Weld & Co.)'150,000 shares

Thomas & Betts Co

Underwriter—None.

Federated

Bonds

Co

Corp. of Delaware
$918,000 of 6% convertible subordinated
1968. The company proposes to offer

due

$442,000 of the debentures in exchange for Consumers
debentures; and $226,000 of the debentures in exchange
for the outstanding 12% debentures of three subsidiaries
of Federated. Office—1 South Main Street, Port Chester,
N. Y.

Postponed Financing

shares

filed

of Consumers Time

(Thursday)

(Bids to be invited) $18,000,000

Common
&

Leopold is trustee.
Office — 3180
Drive, Chicago, 111. Underwriter—

$210,000 of the debentures to purchase the capital stock
Credit, Inc., a New York company;

$5,000,000

Georgia Power Co._

29

debentures

Bonds

be invited)

F.

Shore

Federated

(Thursday)

Co.

to

Howard
Lake

Straus, Blosser & McDowell, Chicago, 111.

$20,000,000 to $25,000,000

September 10

$50,000,000

Peabody

working capital. Underwriters—Lee Higginson Corp.,
P. W. Brooks & Co., Inc., both of New York City.

North

(Tuesday)

Bonds

'

*

Mississippi Power

oversubscription privilege); rights to

Vt Ero Manufacturing Co. (2/9)
(letter of notification) 10,000 shares of common
stock (par $1), not to exceed an aggregate of $100,000.
Price—The closing price on the day preceding com¬
mencement of the offer.
Proceeds—To go to a trust of

Bonds

(Wednesday)

Sawhill Tubular Products, Inc

;

June 25

X

$375,000

Illinois Bell Telephone Co
(Bids

an

Jan. 23

(Thursday)

2

(Bids to be received)

Common

(Charles Plohn & Co.)

f'...

X '

$10,000,000

Inc..

(Stanley Heller & Co.) $330,000
1

Bonds

be invited) $25,000,000

June

.Bonds

—

Glass-Tite Industries,

and

$5,130,000

Duquesne Light Co.
*

for

$15,000,000

Virginia Electric & Power Co

Chicago, Rock Isjan(i & Pacific RR.__Equip. Tr. Ctfs.
(Bids

(with

which

$299,600

*

v

10

expire March 2.
Price—$6.12V2 per share.
Proceeds—
To complete modernization and expansion program and

i20,000,000

Generating Co
to

filed

9

Feb.

(Tuesday)

received)

be

to

Southern Electric

Common
Co.)

be Invited)

Erie

Forge & Steel Corp.
237,918 shares of common stock being of¬
fered for subscription by common stockholders at the
rate of one new share for each four shares held as of

Bonds

West Penn Power Co

(Bids

Carraco Oil Co.—
(Berry &

to

May 28

W.

★

Jan.

1 Bonds

May 26

Street, Jackson, Miss. Underwriter

—None.

$14,000,000

Co.

Power
(Bids

'

.Common

—

stockholders—underwritten

Office—333 S. Farish

(Thursday)

April 30

(Tuesday)

Calvert Drilling, Inc

T\.

>

Price—$1

$7,000,000

invited)

be

unsubscribed shares to other stock¬
Rights expire 30. days from offering date.
per share.
Proceeds—For working capital.

stock held;

holders.

(Wednesday)

15

to

(Bids

(Bids

February 24

Invited)

be

Wisconsin Power & Light Co

Alabama

Blossman Hydratane Gas, Inc.-—Debens. & Com.
(S. D. Fuller & Co. and Howard Weil, Labouisse, Friedrichs
& Co.)
$1,200,000 debentures and 120,000 common shares

common

Bonds
$16,000,000

Bonds
to

April

Co.—— 2„Common

Securities Corp.). 145,940 sharesr'.

XX

shares

Co
(Bids

(Offering to stockholders—underwritten by Stone & Webster
,

Common

300,000

(Thursday)

April 2
Gulf

(New York Hanseatic Corp. and Rea Brothers Ltd;)

& Gas

PST)

a.m.

common

.

Shearson,

—Common

Central Illinois Electric

9

(Bids to be invited)

shares

/Canal-Randolph Corp. !

.

(Tuesday)

Monongahela Power Co—

—

Hammill

31

„

Bargain Centers, Inc
Debentures
(Securities Trading Corp.) $300,000

(•

x

'

Underwriter

—For investment.

$25,000,000

California Electric Power Co

—Common
/ '; '

shares

stockholders—underwritten

to

X

>

200,000

(Thursday)

February 19
Barden

March

$7,125,000

(Bids noon CST)

•

United Control Corp

•

(3/4)

30 filed

.

Bonds
11

11:30

★ Eaton & Howard Balanced Fund, Boston, Mass.
Feb. 9 filed (by amendment) an additional 100,000 shares
of common stock (par $1). Price—At market. Proceeds

Common

Co
(Bids

$30,000,000

to

up

*******

competitive bidding. Probable bidders: Kidder, Peabody
& Co.; Stone & Webster Securities Corp.
Bids—To be
received up to 11 a.m. (EST) on March 4 at 49 Federal
St., Boston, Mass.
x ••
f

(Monday)

Co.)

&

^

Jan. 19

4>*'

.

Common
96,765 shares

& Signal Co
30

*

96*765 shares of common stock (par $10)
to be offered for subscription by common stockholders
of record about March 4, 1959 on the basis of one new
share for each 12 shares held (with an oversubscription
privilege); rights to expire on March 19. Proceeds—To

207,852 shares

11 a.m. EST)

invited)

be

March

$5,891,280

(The First Boston Corp.)

to

(Sano

Inc———Common

Co.)

PST)

Jan.

(Tuesday)

March 16

shares

(Wednesday)

Investors Research Fund,

a.m.

Northern Indiana Public Service Co

!—Common

150,000

Common
8

be received

Eastern Utilities Associates

,

reduce bank loans.
10

March

-Bonds

*

;

(jointly). Bids—Scheduled to
(EST) on Feb. 24.
>

a.m.

(Wednesday)

(Offering to stockholders—bids

CST) $25,000,000

Co.)

(Tuesday)

Eastern Utilities Associates—

~

>

Indiana, Inc.—

February 18

3

(Offering to stockholders—bids

,,

104,500 shares

Southwestern States Telephone Co

.

March

.Common

10:30 a.m.

(Bids

.

-

Co

—(Underwood, Neuhaus & Co., Inc.)

Public Service Co. of

'

Co., A. C. Allyn & Co., Inc., and Ladenburg, Thalmann
& Co. (jointly); Glore, Forgan & Co.; Harriman Ripley &
Co. Inc.; Drexel & Co. and Equitable Securities Corp.

$2,500,000

Pacific Power & Light Co

..Common

Co.,

February 17
XX

& Co. Inc.; White, Weld & Co.; The First Boston Corp.;
Kuhn, Loeb & Co., Eastman Dillon, Union Securities &

Debentures

Standard Security Life Insurance Co. of N. Y.-Com.
(Ira Haupt & Co. and Savar,d Jc Hart) $1,500,000

$1,055,000

due

by competitive bidding. Probable bidders: Halsey, Stuart

(Monday)

Corp

,

,,

Common

United States Pool Corp..
p

& Co.)

(Cruttenden, Podesta & Co. and Clayton Securities Corp.)

.Common

Roman & Johnson)

and

(Aetna Securities Corp.

X

Common

(Plymouth Securities Corp.) $300,000

:

U. S; Land Development Corp

■

Window

2

bonds

March 1, 1989. Proceeds—To repay bank loans and for
construction program. Underwriter—To be determined

$20,000,000:

Co.)

Standard Manufacturing Corp

5

Miami

——Debentures

Inc.———

Theatres,

March

-

(Cruttenden. Podesia & Co., Cantor, Fitzgerald &r Co., Inc.,

>

V

Abraham & Co., Inc.)

(C. H.

Jan.

(Friday)

(Offering to stockholders—underwritten by White, Weld
56,301 shares

Common

Military Publishing Institute, Inc.——

retire

Duquesne Light Co. (2/24)
27 filed $10,000,000 of first mortgage

$12,500,000

Co.)

&

Piedmont Natural Gas Co

(Bertner Bros.) $150,000

/

h[

-

————Common

---r---—

——

'

'

Loeb

February 27

...——Common

Harman-Kardon, Inc.

Bonds

(Government of)

(Monday)

February 16
Xi

Jamaica

to

and

Common

(Offering to stockholders—bids 11 a.m. EST)

(Offering to stockholders—underwritten by Janriey,
Dulles & Battles,
Inc.) $590,560

operations, to open new drug stores
$60,000 of outstanding 8J/2% debentures.
Office—Arlington, Va. Underwriter—Auchincloss, Park¬
er & Redpath, Washington, D. C.

(Thursday)

February 26

(Friday) y

February 13

Century Food Markets Co.—__

to purchase 37,500 shares of $1 par value common stock
A).
Price—At par (in units of $500 each). Proceeds—

each). Proceeds

—

Continued

For working
on

page

40

40

The Commercial and Financial Chronicle

(796)

•

,

.

sinking fund redeemable notes, series A, due July 1,
1976, on the basis of 200 shares for each $1,000 note.

Jan. 9 filed 490,940 shares

capital, to make loans, etc. Office—2104 "O" St., Lin¬
coln. Neb.
Underwriters — J. Cliff Rahel & Co. and

Office—330 Ninth Avenue, West,

per

Eugene C. Dinsmore, Omaha. Neb.

Feb.

Continued from page

39

"

."v

Inc.
a3ec. 16 filed 200.000 shares of class A
For Industry,

Finance

At par ($1.50 per

common stock.
share). Proceeds—For working

Office—508 Ainsley Bldg., Miami, Fla. Under¬
R. F. Campeau Co., Penobscot Bldg., Detroit,
'
1

capital
writer

—

Mich.

Florida

Builders, Inc.

of 6% 15-year sinking fund sub¬

JOec. 1 filed' $4,000,000

ordinated debentures and 40,000 shares of common stock,

to be offered in units of $100 principal amount of deben¬
tures and

share of common stock.

one

Price

—

$110 per

Proceeds—For purchase and development of sub¬

♦unit.

land, including shopping site; for new equip¬
ment
and
project site facilities; for financing ex¬
pansion program; and for liquidation of bank loans and
other corporate purposes.
Office—700 43rd St., South,
6t. Petersburg, Fla. Underwriter—None.
division

,

O

Fluorspar Corp. of America

notification) 133,333 shares of common
istock (par 25 cents). Price—$2.25 per share. Proceeds—
Lor mining expenses. Office—4334 S. E. 74th Ave., Port¬
land 6, Ore.
Underwriter — Ross Securities Inc., New
York, N, Y.. has withdrawn as underwriter.
Oct. 14 (letter of

Fort

Pierce

Port

Terminal

&

Co.

Nov. 25 filed

2,138,500 shares of common stock (par $1).
share.
Proceeds—To pay short-term
loans and for completing company's Port Development
Plan and rest added to general funds.
Office — Fort

i'rice—$1.25

per

Pierce, Fla. Underwriter—Frank B. Bateman, Ltd., Palm
Beach, Fia.
Foundation

Jan.

Atlanta, Ga.

common

stock to be of¬

subscription by stockholders;

for

unsold portion

to be offered
•—-To

Investment Corp.,

13 filed 231.988 shares of

fered

repay

publicly. Price—$12.50 per share. Proceeds
notes.
Office—515 Candler Bldg., Atlanta,

Ga. Underwriter—None.
Genera] Alloys

Co.

Nov. 17 (letter of notification) 45,250 shares of common
fctock (par $1) of which 16,900 shares are to be offered
to. employees and the remainder to the public.
PriceTo

employees, $1.1805 per share. Proceeds—To purchase
install machinery and equipment.
Office—367-405

find

West First St., Boston, Mass.
Prescott & Cc., Boston, Mass.

Underwriter—William S.

Genera] Aniline & Film Corp., New York

filed 426,988 share# of common A stock (<n«
»ar) and 1.537,500 shares of common B stock (par $1)
Proceeds—To the Attorney General of the United States
Underwriter—1To be determined by competitive bidding
Probable bidders: Blyth & Co., Inc., and The First Bos¬
ton
Corp.
(jointly);
Kuhn, Loeb & Co.; Lehman
Brothers, and Glore, Forgan & Co. (jointly). Bids—Had
been scheduled to be received up to 3:45 p.m. (EDT) or
my 13 at Room 654, 101 Indiana Ave., N. W., Washing
»'®n 25, D. C., but bidding has been postponed.
O

Glass-Tiie Industries, inc.

Jan.

30

filed

110,000 shares

(2/24)

of common stock

(par

10

provement of new

and present products; for purchase
high temperature atmosphere furnace and additional
lest equipment and the balance will be added to work¬
ing capital and be used for other corporate purposes.
of

a

Office—88

Spectable St.. Cranston, R. I. Underwriter—
Stanley Heller & Co., New York.
Government Employees Variable Annuity Life
Insurance Co.
Nov. 13 filed 2,500,000 shares of common stock (par $1)
to be offered by company viz: (1) to holders of common
Flock

(par $4) of Government Employees Insurance Co.,
on the basis of one warrant
per share of stock held (1,£34,570 shares are now outstanding); (2) to holders of
stock (par $1.50) of Government Employees
Life Insurance Co., on the basis of IV2 warrants per share

common,

of stock held

(216,429 shares

(3) to holders of

common

Office —1825
Investment.

outstanding); and
stock (par $5) of Government
are

now

Employees Corp.,

Connecticut

Advisor

Street, Westbury, N .Y. Underwriter—Milton D. Blauner
& Co., Inc., New York.
Heartland

Development Corp.
(letter of notification) 22,820 shares of non¬
voting convertible preference stock (par $12) to be
offered for subscription by stockholders on the basis
of one share of convertible preference stock for each
10

23

shares

of

outstanding.
Feb. 27, 1959. Price—$3 per
share. Proceeds—For capital and
surplus. Office—Gov¬
ernment' Employees Insurance Bldg.,
Washington, D. C.
Underwriters — Johnston, Lemon & Co., Washington,
to

expire

on

D,

C.; Eastman Dillon, Union Securities & Co., New
York; and Abacus Fimd, Boston, Mass. Offering—In¬
definitely postponed.
Gram Elevator Warehouse Co.
Nov. 3 filed 100,000 outstanding shares of common stock
(par 10 cents). National Alfalfa Dehydrating &

Milling

Co., holder of the 100,000
ft,<3

common

shares is offering to

stockholders preferential warrants to sub¬
98,750 shares of Grain Elevator stock on the

common

scribe

basis

to
of

one

warrant

to

purchase one-eighth

share of
Grain Elevator stock for each share of National Alfalfa
held on Jan. 19. 1959; rights to
expire Feb. 16.
Price—$2 per share. Proceeds—To selling stockholder.
Office
927 Market Street.
Wilmington, Del. Under¬
writer—None. Statement effective Jan. 12.
common

—

7ir Griigiloijl
I'eh.
fered

5

Freehold

Leases

filed

in

Lid.

563,600 shares of common stock to be of¬
exchange for $2,818,000 of 5V2% convertible




Israel

(The State of)

Jan.

8 filed $300,000,000 of second development
bonds,
part to consist of 15-year 4% dollar coupon bonds (to

maturing serially from March 1,
1, 1978) and 10-year dollar savings bonds
(each due 10 years from first day of the month in which
issued). Price—100% of principal amount. Proceeds—
1974 to March

For

improvements, etc. Underwriter—Development Corp.
Israel, 215 Fourth Ave., New York City. Offering—
Expected early in March, 1959. •

for

Itemco Inc.
r;
Nov. 28 (letter of notification) 200,000 shares of common
stock (par 10 cents). Price—$1 per share. Proceeds—To

acquire machinery and equipment and additional space
for test laboratories;
and for working capital. Office—
4 Manhasset
Ave., Port Washington, L. I., N. Y. Under¬
writer

—

B.

Fennekohl

&

Co., 205 East 85th St.,< New

York, N. Y.
•

Jamaica

(Government of)

amendment.

held

on

or

about

Nov.

1,

Heliogen Products, Inc.
Oct. 22 (letter of notification) 28,800 shares of common
stock
(par $1).
Price—$5 per share.
Proceeds—For
of past

payment

due

accounts

loans

and

and

general

working capital. Office — 35-10 Astoria Blvd., L. I. C.
3, N. Y. Underwriter—Albion Securities Co., Suite 1512,
11 Broadway, New York
4, N. Y.
Highway Trailer Industries, Inc.
24
filed 473,000 outstanding shares of common
stock (par 25 cents). Price—At prices generally prevail¬
ing on the American Stock Exchange.
Proceeds — To
selling stockholders. Office—250 Park Avenue, N. Y.
Nov.

Underwriter—None.
Hinsdale

Raceway, Inc., Hinsdale, N. H.
capital trust certificates evidencing 1,000,000 shares of capital stock, and 2,000 debenture notes.
Price—The common stock at par ($1 per share) and the

Dec. 29 filed

notes in units of $500 each.

Proceeds—For construction

track,

including land, grandstand, mutual plant
building, stables and paddock, dining hall, service build¬
ing, administrative building, penthouse, tote board and
a

clubhouse.

Underwriter—None.

Holiday Inns of America, Inc.
Dec. 30 filed 39,765 shares of common stock being offered
for

subscription

the

Board

of record
four

$16
be

by

Chairman
Jan.

stockholders

common

President

and

27 at the rate of

and

one

new

(other

than

their families)
share for each

shares held;
per

rights to expire on Feb. 18. Price—
Proceeds—In addition to other funds, to

share.

added

to

working capital and to complete the cur¬
portions of construction costs. Underwriter—Equit¬

able Securities

Corp., Nashville, Tenn. Statement effec¬

tive Feb. 3.

Home-Stake Production Co., Tulsa, Okla.
116,667 shares of common stock (par $5).
Price—$6 per share. Proceeds—For working capital and
Nov. 5 filed

general

corporate

Office — 2202
Underwriter—None.

purposes.

Bldg., Tulsa, Okla.
•

Philtower

Industrial Minerals Corp., Washington, D. C.
July 24 filed 600,000 shares of common stock (par one
;ent). Price—$1 per share. Proceeds—To develop and
operate graphite and mica properties in Alabama. Un&

Co.

and

on a

Japan
Jan.

Carr-Rigdom

&

quently filed. Price—To be related to the market price.
Proceeds—For working capital and to enlarge research
and development department.
Stop order proceedings
instituted by SEC.
International

Bank, Washington, D. C.
$5,000,000 of notes (series B, $5(10,000, twoyear, 3% per unit; series C, $1,000,000, four-year 4% per
unit; and series D. $3,500,000, 6-year, 5% per unit). Price
—100 % of principal amount.
Proceeds — For working
capital.
Underwriter—Johnston, Lemon & Co., Wash¬
ington, D. C.
Dec. 29 filed

• Investment Co. of America
shares

filed
of

(by

common

amendment)
stock

(par

Proceeds—For investment.

41/2% bonds, due Jan. 15, 1964; and $15,000,000 of
15-year
512% sinking fund bonds, due Jan. 15, 1974. Price—To
be supplied by amendment. Proceeds—To be added to
the

Government's

an

additional

$1).

Price—At

1,000,000

•

reserves.

Under¬

Jet-Aer

Corp., Paterson, N. J.
(letter of notification) 10,000 shares of class A
stock (par $1.50). Price — $10 per share. Pro¬
ceeds—For purchase of modern automatic
filling equip¬
ment and for marketing and advertising program. Office
—85-18th Ave., Paterson, N. J. Underwriter—None. Of¬
fering—To be made privately.
Dec.

5

common

Kimberly-Clark Corp.
225,000 shares of

\:

■-

Dec. 30 filed

common stock (par $5) to^
exchange for common stock of the Ameri«*
can Envelope Co. of West
Carrollton, Ohio, on the basis
of three-quarters of a share of
Kimberly stock for each

be offered in

of American.
The offer will expire on Feb., 27,
The exchange is contingent on acceptance
by all

1959.

of the stockholders. Statement effective Jan. 23.

j

Laure Exploration Co., Inc.,
Arnett, Okla.
Dec. 23 filed 400,000 shares of common stock.
Price—$2
per share. Proceeds—For machinery and equipment and
exploration purposes. Underwriter—None.
•

Lefcourt Realty

Corp.
3,492,000 shares of common stock, of which
2,622,000 shares were issued in exchange for all of
the common stock of Desser &
Garfield, Inc., and D. G.
& R., Inc.; 750,000 shares will be used for the exercise
of an option by the company to purchase from
Big
Mound Trail Corp. some 3,784.9 acres of land on or
before May 1, 1959; and the remaining
120,000 shares are
Jan. 29 filed

to

be sold for the account

of

a

selling stockholder. Un¬

derwriter—None.

(2/16-20)
(letter of notification) 150,000 shares of common
stock (par 20 cents). Price—$1 per share. Proceeds—To
retire loans and notes and for working capital. Business

—Engaged in the design, manufacture and sale of elec¬
tronic equipment. Office — 380 Oak
St., Copiague, L. I.,
N. Y.

Underwriter—Bertner Bros., New York, N. Y.

Life

Insurance

$1).

7

Securities

March 28, 1958, filed 1,000,000

Corp.
shares of capital stock (par

Price—$5

per share.
Proceeds—To acquire stock
"young, aggressive and expanding life and
companies and related companies and
then to operate such companies as subsidiaries." Under¬
writer—First Maine Corp., Portland, Me.

control

other

of

insurance

Ling Electronics, Inc.
Jan. 27

filed

335,000 shares of common stock, to be of¬
exchange for the outstanding capital stock of
Companies, Inc., on the basis of one share of Ling
in

Altec

stock for

one share of Altec stock.
The offer is subject
acceptance by holders of at least 80% of the outstand¬
ing Altec stock.

to

LuHoc

Mining Corp.

Sept. 29 filed 350,000 shares of common stock. Price—$1
per share. Proceeds — For the acquisition of properties
under option and for various geological
expenses, test
drilling, purchase of equipment, and other similar purooses.

Offices—Wilmington,

Del.,

and

Emporium, Pa.

Underwriter—None.

Magic Mountain, Inc., Golden, Colo.
2,250,000 shares of common stock. Price—

Jan. 27 filed

$1.50 per share.

Proceeds—For construction and working
Underwriter — Allen Investment Co., Boulder,
Colo., on a best-efforts basis.

Mairco, Inc.
Jan.

6

stock

(letter

to

be

lantic

P^orpeds—For

Sunrise

Lauderdale, Fla, Underwriter—None.

Boulevard, Ft

record Jan.
tional

1026

of

10, 1959

common

on

N.

notification)

offered

expire

E

exchange

market.

Office—Los Angeles, Calif.

1750

foreign

writer—The First Boston Corp., New York.

shares of common
stock (par two cents). Price—$4.50 per share. Proceeds
—For capital account and paid-in surplus. Office—At¬
Buil^ng

7

capital.

Investment Corp. of Florida
Oct. 9 (letter of notification) 55,555

Federal

(2/18)

$30,000,000 of external loan bonds, dated
15, 1959. These consist of $3,000,000 of three-year
4'/2% bonds, due Jan. 15, 1962; $5,000,000 of four-year j
4V2% bonds due Jan. 15, 1963; $7,000,000 of five-year
Jan.

Co

best efforts basis. State¬

18.

Industro Transistor Corp. (N. Y.)
Feb. 28, 1958, filed 150,000 shares of common stock
(pai
10 cents); reduced to
135,000 shares by amendment subse¬

4

Underwriter—Kuhn, Loeb & Co.

(Government of)

filed

29

fered

Feb.

filed

Jan. 22

bonds, series F,
due March 1, 1994. Proceeds — For
improvements, etc.
Underwriter—To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co.
Inc.; Morgan
Stanley & Co.; Glore, Forgan & Co. and Eastman Dillon,
Union Securities & Co. (jointly). Bids—Expected to be
received up to 11 a.m. (EST) on Feb.
25, at Room 2315,
195 Broadway, New
York, N. Y.

Washington, D. C.,

4

bonds

LEL, Inc.

Illinois Bell Telephone Co. (2/25)
4 filed $50,000,000 first
mortgage

Feb.

lerwriters—Dearborn

Feb.

share

•

mon

were

share.
St., Santa Barbara, Calif. Investment Advisor—In¬
Santa Barbara, Calif. Underwriter
—Bache & Co., New York.
guna

vestors Research Co.,

writer—None.

ment effective Nov.

Warrants

(2/18)

of common stock. Price—$12
Proceeds—For investment. Office—922 La-

debts, acquisition of investments, and for general pur¬
poses.
Address—P. O. Box-348, Albany, N. Y. Under¬

cise

stock

common

Stockholders will have 45 days in which to exer¬
the rights.
Price — At par.
Proceeds — To repay

ital debentures due 1967, convertible into shares of

at $28.0374 per share. If all these debentures were
converted into common stock prior to the record
date,
a total of
164,733 common shares would be

Fund, Inc.

(2/26)
7 ;
*
V \
$10,000,000 of sinking fund external loan
due March 1, 1974 and $2,500,000 serial external
loan bonds
due semi-annually Sept.
1, 1960 through
March 1, 1964, inclusive.
Price — To be supplied by

1958.

both of

com¬

Research

be issued in five series

Harman-Kardon, Inc. (2/16-20)
Jan. 23 filed 200,000 shares of common stock, of which
the company proposes to offer 95,000 shares and 105,000
shares will be sold for the account of Bernard Kardori,
Vice-President and General Manager.
Price — $3 per
share.
Proceeds—To eliminate $100,000 of outstanding
bank loans, and for working capital.
Office—520 Main

Oct.

Investors

Avenue,

Investment

•

on the basis of V2 warrant per share of
stock held (as of Dec. 31, 1958 there were 143,703 shares
of stock outstanding and $589,640 of 5% convertible

cap¬

Washington, D. C.
Advisory
Service,
Underwriter—Investment Manage¬
—

Washington, D. C
ment Associates, Inc., Washington, D. C.

rent

cents). Price—$3 per share. Proceeds—To retire $35,000
of 6% preferred stock: for research, development and im¬

Calgary, Canada.

it Growth Fund of America, Inc.
4 filed 250,000 shares of common stock
(par 10
cents).
Price—At market.
Proceeds—For investment.

of

Jan. 14, 1957

.

Thursday, February 12, 1959

.

for
on

shares

of

common

stock for each five shares

Jan. 30, 1959.

Main

600

subscription by stockholders of
the basis of one share of addi¬

inventory

Price—At
and

par

working

Street, Goshen, Ind.

held; rights to
($100 per share).
caDital.

Office—

Underwriter—None.

'

Volume

189

Number 5820

Mid-America
Jan. 19 filed

.

.

.

The Commercial and Financial Chronicle

Minerals, Inc.

100 units

—For

working capital. Office—20th Ave-N. W. 75th St.,
Miami, Fla. Underwriter—Cosby & Co., Clearwater, Fla

of

participations in Oil and Gas
Fund (the "1959
Fund"). Price—$15,000 per unit. Pro¬
ceeds— For working
capital, etc. Office — 500 MidAmerica Bank Bldg., Oklahoma
City, Okla. UnderwriterMidamco, Inc., a wholly-owned subsidiary, Oklahoma
City, Okla.

Fla.
Underwriter —Henry
mingo Plaza, Hialeah, Fla.

Military Publishing Institute, Inc. (2/16)
Dec. 9 (letter of
notification) 125,000 shares of

common

O. K.

(par 5 cents).
Price—$2 per share. Proceeds—
general corporate purposes and working capital.
Office—55 West 42nd Street, New York
36, N. Y. Under¬
writer—C. H. Abraham & Co., Inc., 565 Fifth
Ave., New

Dec.

For

17, N. Y.

.

.

.

Millsap Oil & Gas Co.
Dec. 23 filed 602,786

shares of

common stock.

Price—$1

per share.
Proceeds — For additional working capital.
Office—Siloam Springs, Ark. Underwriter—None.

O.

ket.

stock (par one cent).
Proceeds—For investment.
common

200,000
Price—At mar¬

24

8,000

share; for special

Montana Power Co.

writer—To be determined by competitive
bidding. Prob¬
able bidders: Halsey, Stuart & Co.
Inc.; Lehman Bros.;
Merrill Lynch, Pierce, Fenner &
Smitl$£Und Stone &

Pacific

pending improvement in market conditions.

Jan.

Power Co.

July 1 filed 100,000 shares of common stock (no par).
The stock will Le offered only to bona fide residents^
Price—To be related to the current market

price on the*New York Stock.Exchange. Proceeds—To¬
gether with other funds, to carry on the company's construction program through 1959.Manager-Dealers —
Smith, Barney & Co,, Kidder, Peabody & Co. and Blyth
& Co., Inc. Offering—Indefinitely
postponed.

Associates, Inc.

(1) will transfer 22,222 shares in satisfaction of an in¬
principal amount of $200,000, (2) will
offer 29,306 such shares in exchange for its
outstanding
20,933 class A common shares, and (3) has no present
plans for the disposition of the remaining 4,472 NTA
shares plus any of said 29,306 NTA shares not exchanged
debtedness in the

•

National

stockholders.

Theatres, Inc.

be

used

for

additional

21

Petroleums

filed

160,792

debentures and stock purchase warrants

to be offered in exchange for National Telefilm Asso¬

ciates, Inc.

common stock at the rate of $11 of deben¬
one warrant to purchase
one-quarter of a share

of National Theatres, Inc. stock for each NTA share.
Dealer-Managers — Cruttenden, Podesta & Co., Cantor,
Fitzgerald & Co., Inc., and Westheimer & Co.

Naylor Engineering & Research Corp.
Sept. 29 (letter of notification) 300,000 shares of
lative voting and non-assessable

common

stock.

cumu¬

Price—

At par

($1 per share). Proceeds—For organizational ex¬
penses and first three months' operational expenses. Of¬
fice—1250 Wilshire Blvd., Los Angeles 17, Calif. Under¬
writer—Waldron & Co., San Francisco
4, Calif.
Nedow OR Tool Co.

May 5 (letter of notification) 150,900 shares of common
stock (par one cent). Price—$2 per share. Proceeds—To
Loan; to acquire fishing tools for leasing; and for
working capitaL Office—931 San Jacinto Bldg., Houston,
Tex. Underwriter—T. J. Campbell Investment Co., Inc.,
Houston, Tex.
•s.-..'
a
pay

•

••

•

•

New Jersey lnvesting Fund, Inc., New York
9 filed 200,000 shares of capital stock.
Price—At
Proceeds—For investment. Investment Adviser
and Distributor—Spear, Leeds & Kellogg, New York.
-

Dec.

market.

^Northern Indiana Public Service Co.

<

stock.

common

These

To be determined by competitive

bidding. Probable bidders: Halsey, Stuart & Co., Inc.;
Equitable Securities Corp.; Lehman Brothers and Bear,
Stearns & Co. (jointly); Eastman Dillon, Union Secu¬
rities & Co.* The First Boston Corp.;
White, Weld &
Co.; Dean Witter & Co.; Blyth & Co., Inc. and Merrill
Lynch, Pierce, Fenner & Smith (jointly); Harriman
Ripley & Co., Inc. Bids — Expected to be received on
March 10.
A
Nylonet Corp.
/
Nov. 24 (letter of notification) 600,000 shares of common
stock (par 10 cents).' Price—50 cents per share. Proceeds




.

t
,

construction. Office—At

camp

Arnold,

Wilson Circle, Rumson,
Sano & Co., New York, N. Y.

,

Rassco Financial

Light Co.

(3/3)

;

J.

Underwriter—

Corp.

of

$500 and $1,000. Price—At par. Proceeds—For workIrtg capital and general corporate purposes. Underwrite*'
—Rassco
basis.

:

~

N.

June 2Q filed $1,000,000 of 15-year 6% series A sinking
fund debentures due 1973, to be offered in denomination#

.

proposes

to offer to

stock, which the ;

Israel

.

Corp., New York,

on

"best

a

efforts*

•„:

...

-

;

•

*

y

common

ceeds—For construction program. Underwriters — To be :
determined by competitive bidding.
Probable bidders:s
Lehman

Brothers, Eastman Dillon, Union Securities &
Co., Bear, Stearns & Co. and Dean Witter & Co. (jointly); Ladenburg, Thalmann & Co.; Kidder, Peabody &
Co. Bids—Expected to be received up to 8 a.m. (PST)
March 3.

.

'

ment. Co.

Peckman Plan

Fund, Inc., Pasadena, Calif.
May 19 filed 20,000 shares of common stock (par $1)
market.

Proceeds—For

writer—Investors Investments

investment.

Under¬

Corp., Pasadena, Calif.

Pennsylvania Power Co.
Aug. 1 filed $8,000,000 of first mortgage bonds due 1988
Proceeds—To redeem

a

like amount of 5%

first mort¬

part thereof held; warrants expire Feb. Price—At par. Proceeds—To purchase ma¬
terials and supplies, equipment,
etc.
Address—P. O,'
Box 2407, Richmond 18, Va.
Underwriter—None.

1959.

'Richwell

....

Price—Mini-

fractional

16,

j
•

mum

Price—At

basis of $100of debentures for each 100 common shares*
or

>

Paramount Mutual

-

Petroleum

Ltd., Alberta, Canada

June 26 filed 1,998,716 shares of common stock (par $1).
Of this stock, 1,174,716 shares are to be sold on behalf of
the company and $24,000 shares for the account of cer* '
tain selling stockholders. The company proposes to offer

the 1,174,716 shares for subscription by its shareholder!'
one new share for each three shares held

at the rate of

(with an oversubscription privilege).
period will be for 30 days following
scription rights.

The subscription
issuance of sub¬

Price—To be supplied by amendment

Proceeds—To pay off demand note, to pay. other indebt¬

edness, and the balance if

capital.
couver,
•

Underwriter
Canada.

—

any will be added to working
Pacific Securities Ltd., Van¬

Rochester

Gas & Electric Corp.
280,000 shares of common stock (no par)
being offered for subscription by stockholders of record

filed

bonds due 1987. Underwriter—To be determined
by competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; Kidder, Peabody & Co.; White Weld & Co.
Equitable Securities Corp., and Shields & Co. (jointly)
Lehman Brothers, Eastman Dillon, Union Securities &
Co., Salomon Bros. & Hutzler and Ladenburg, Thalmanr
& Co. (jointly); Merrill Lynch, Pierce, Fenner & Smitt
and Dean Witter & Co. (jointly)., Bids — Tentatively
had been expected to be received up to 11 a.m. (EDT)
on Aug. 27
but company on Aug. 22 decided to defer
sale pending improvement in market conditions.

Jan.

^ Perfecting Service Co., Charlotte, N. C.
Feb. 2 (letter of notification) 30jOQO shares of common;
stock. Price—At par ($10 per share). Proceeds—For ac¬

Jan. 29 filed 475,000 shares of common stock.

gage

counts receivable and inventories. Office

Ave,. Charlotte, N. C.

—

332 Atando

Underwriter—None.

Piedmont Natural Gas Co., Inc.

(2/27)

56,301 shares of common stock (par $1) to
offered for subscription by common stockholders at

Feb. 27, 1959

pro¬

Ltd.

.'Richmond Cedar Works Manufacturing Corp..
stockholders of 1 .Jan. 14 (letter of notification)
$171,500 of six-year 5.6% "
record March 3, 1959 at the rate of one new share for
convertible subordinated debentures to be offered to>
each 20 shares held; rights to expire on March 25. Pro-"
common " stockholders
of record Jan. 27, 1959 on tho
company

•

(3/10)

repay bank loans and'
Underwriter—To be determined'

and for road and

up ore

,

Pacific Power A

Proceeds—To

costs.

Raindor Gold Mines,

shares), or have been purchased pursuant to an option
which expired Aug. 29, 1958 (to the extent of 23,300
shares). ,The company will not receive any proceeds from any sales of these shares.
-uj. : -1

prepayment of bank loans incurred for construction
—

>

V

■-

Suite 322, 200 Bay St., Toronto, Ont., Canada, and c/o T.

of

Feb. 4 filed

Underwriter

con¬

Jan. 28 (letter of notification) 290,000 shares of common
stock (par $1). Price—$1 per share. Proceeds—To prove

,

.

Feb. 10 filed $25,000,000 of first mortgage bonds, series
J, due Jan. 15, 1989. Proceeds — To be used for gross
additions to utility properties of the company including
gram.

For

.

purchase of shares is $2,500. Proceeds—For invest¬
ment. Office—404 North Roxbury Drive, Beverly Hills,
Calif.
Underwriter—Paramount Mutual Fund Manage¬

tures and

—

Saskatchewan^,

competitive
bidding.
Probable bidders:
Halsey,
Stuart & Co. Inc.; Kuhn, Loeb &
Co., Salomon Bros. &
Hutzler and Eastman Dillon, Union Securities & Co.
(jointly); The First Boston Corp.; Blyth & Co., Inc.;Glore, Forgan & Co.; Harriman Ripley & Co. "(Inc.
Bids—Expected to be received up to 10:30 a.m. (CST) on
Feb. 17, at Room 2000, 11 So. LaSalle St., Chicago, 111.

Ltd.

shares

for 454,545 shares of common stock (par $1) and
485,550
warrants to purchase debentures and stock
purchase
are

Proceeds

by

shares have been, or may be, purchased by various firms
and individuals pursuant to presenting outstanding op¬
tions expiring June 30, 1959 (to the extent of 137,492

on

(2/16-17)

for construction

Mart, New Orleans 12, La. Under¬
Co., Inc., New Orleans, La.

Fund, Inc.
Jan. 2 filed 300,000 shares of capital stock.

The

share.

.

Dec. 30 filed $20,000,000 5!4% sinking fund subordinated
debentures due March 1, 1974, stock purchase warrants

warrants.

per

Office—Saskatoon,

M, due Feb. 1, 1989.

Jan. 27 filed 207,852 shares of common

Jan. 30 filed 56,000 outstanding shares of common stock.
The company is advised that Family
Broadcasting Corp.

common

will

Oppenheimer Fund, Inc.'
~
5 filed 100,000 shares of capital stock.
Price—At
market (about $10 per share).
Proceeds—For invest¬
ment. Office—25 Broad St., New York. Underwriter—
Oppenheimer & Co., New York.

(EDT) on Aug. 26 at Room 2033, Two Rector St.,
New York, N. Y., but company on
Aug. 22 again decided

with its class A

Price—$3
purpose.

Underwriter—Allied Securities Ltd., and Unite®'

Securities, Ltd., both of Saskatoon, Canada.

Dec.

to noon

-National Telefilm

Canada.

writer—Assets Investment

Corp. (jointly); White,'Weld & Co.;

Dillon. Union Securities & Co.; Kidder Peabody & Co., Smith Barney & Co. and Blyth & Co., Inc.
(jointly). Bids—Had been expected to be received up

<

stock (par $1.50)jI

K.

International Trade

Eastman

of Montana.

Dakota."
struction

Oil, Gas & Minerals, Inc.
Nov. 16 (letter of notification) 116,000 shares of common
stock (par 35 cents).
Price—$1 per share.
Proceeds—
For development of oil and gas properties.
Office—ol3

—

Montana

common

be offered for sale to residents of Canada in the Prov¬
inces of Manitoba, Saskatchewan and Alberta and to*'
residents of the United States "only in the State of NortiL

to

underwriter.

July 1 filed $20,000,000 of first mortgage bonds due 1988.
Proceeds
Together with other funds, to be used to
repay $15,500,000 in bank loans and to carry on the
company's construction program through 1959. Under¬

to defer sale

Prairie Fibreboard Ltd.

Aug. 18 filed 209,993 shares of

—

common stock,
$131.25 per share. Proceeds—For con¬
struction program, to purchase shares of Coastal Chem¬
ical Corp.
(a subsidiary), and the balance will be
added to surplus.' Underwriter—None.

Webster Securities

Rubber

'

filed 200,000 shares of common stock (par
$5)
shares of special common stock (par
$75).
Price—For common stock, $8.75 per
and

Inc., 11 Fla¬

15 filed

offering,

Mississippi Chemical Corp., Yazoo City, Miss.
Dec.

Electronics Corp.
...
(letter of notification) 25,000 shares of common
(par $1).
Price—$7.87!2 per sfrare.
Proceeds—.
To go to selling stockholders.
Office—2235 South Car~>
melina Avenue, Los Angeles 64, Calif.
Underwriter—
Neary, Purcell & Co., Los Angeles, Calif.

if Price (T. Rowe) Stock Fund, Inc.
Feb. 3 filed (by amendment) an additional 50,000 shares^'
'
of capital stock (par $1). Price—At market. Proceeds—
working capita)
and/or to service part of the company's debt. Office— /. For investment.
Office—Baltimore, Md.
551
Rio Grande Ave., Littleton, Colo.
Underwriter—jV
Prudential Enterprises, Inc.
None.
■
v/
Jan. 15 (letter of notification) 200,000 shares of common,
Odlin Industries, Inc.
stock (par one cent) of which 170,000 shares are to be
K
Nov. 12 filed $250,000 of 5!^% convertible debenture?
sold by the company and 30,000 shares by a sellingand 250,000 shares of common stock (par 10
stockholder. Price
$1.50 per share. Proceeds — For
cents). Price
—Debentures at 100% and stock at $3 per share. Pro¬
general expansion and working capital.
Office—HOB
16th Street, N.W., Washington 6, D. C.
ceeds—To purchase a textile mill, machinery, equipment
Underwriter—
John C. Kahn Co., Washington, D. C.
and raw materials, and to provide working capital. Office
<:
—375 Park Ave., New
Public Service Co. of Indiana, Inc. (2/17)
York, N. Y. Underwriter—Harris
Securities Corp., New York, N. Y., has withdrawn as
Jan. 21 filed $25,000,000 of first mortgage bonds, serlet -

• Minnesota Fund, Inc., Minneapolis, Minn.
4
filed
(by amendment)" an additional

shares of

Pioneer

stock

Rubber, Inc., and O. K. Ko-op Rubber Welding
System, on r.n alternative basis. Proceeds—Of the public

~

Feb.

& Associates,

:

Jan. 26

,

Welders, Inc.
60,600 shares of common stock, $43,333.33of 3!4% debentures
maturing on or before May 6, 1965,
$692,000 of (i% debentures maturing on or before Dec'
31, 1974 and $123,000 of 7% debentures due on or before ;
May 6, 1965. The company proposes to make a public
offering of. 25,000 shares of common stock at $10 pei
share.
The remaining shares and the debentures arc
>;
subject to an exchange offer between this corporation

stock

York

working capital. Office—Investment Bldg., Washington^,
D. C. Underwriter—Sade & Co., Washington 5, D. C.

d,

Oak Ridge, Inc.
Sept. 4 (letter of notification) 100,000 shares of common
stock (par $1). Price — $3 per share. Proceeds — Fo»
working capital. Office—11 Flamingo Plaza, Hialeah

•

41

(797)

be

the rate of

one

new

share for each 10 shares held about

16

Feb. 5, 1959, at the rate of one new share for each nine,
shares, or portion thereof, then held; rights to expire on.
Feb. 24. Unsubscribed shares are offered to employees.
Price—$37.50 per share. Proceeds—To be used in con¬
nection with the company's construction program, in-,
eluding the discharge of short-term obligations, the pro-,
ceeds of which

Boston

were

so

used. Underwriter

—

The First

Corp., New York.

Routh

Bobbins

Investment

Corp.

Price—$1,
share,
proceeds •— For investments and working,
capital. Business — Real estate investments.
Office —,
Alexandria, Va. Underwriter—None.
per

•

Royal McBee Corp.
26 (letter of notification)

Jan.

1,867 shares of common
to be awarded to sales personnel, distrib¬
utors, dealers, and service personnel, pursuant to a sales
contest.
Office—Westchester Ave., Port Chester, N. Y.
stock (par $1)

(with an oversubscription privilege); rights
to expire on or about March 16.
Price—To be supplied
by amendment. Proceeds — For construction program.
Underwriter—White, Weld & Co., New York.

Underwriter—None.

Statement withdrawn.

St. Paul Ammonia Products,
Dec.

29

filed

250,000 shares

of

Inc.

common

stock

share for each four shares

ic Piggly Wiggly Alabama Distributing Co., Inc.
4 (letter of notification) 3,000 shares of 6% non-

holders at the rate of one

Feb.

held.

cumulative

working capital. Office—South St. Paul, Minn.

preferred stock. Price — At par ($100 per
shares).
Proceeds — For equipment, inventories and
working capital. Office—2524 First Ave., West, Birming¬
ham, Ala.

Underwriter—None.

Pilgrim Helicopter Services, Inc.
9 (letter of notification) 12,000 shares of common
(par $3). Price — $5 per share. Proceeds — Foi

(par 2%

cents), to be offered for subscription by common stock¬
Price—$2.50 per

new

share.

Proceeds—For additional

Under¬

writer—None.
•

San

Dec.

9

which

Diego Imperial Corp., San Diego, Calif.
filed 845,000 shares of common stock (par $1)
issued in exchange for all of the 45,000 out-

were

Jan.

stock

Continued

on

page

42

42

standing shares of capital stock of Silver State Savings &
Association and 3,000 shares of capital stock of
Silver State Insurance Agency, Inc., both of Denver,

Pa. Underwriters—McDonald & Co.,
and Kidder, Peabody & Co., New

York.
Selected Risks Insurance Co.

(letter of notification)

8,500 shares of common

capital stock (par $10) to be issued to stockholders upon
exercise of warrants on the basis of one share for each

ital.

of

Office—Branchville, N. J. Underwriter—None.

Service Life Insurance Co.

Sept. 26 (letter of notification) 3,567 shares of common
stock (par $1). Price—$18.75 per share. Proceeds—To
go to a selling stockholder, Office—400 W. Vickery Blvd.,
Fort Worth, Tex. Underwriter—Kay & Co., Inc., Hous¬
ton, Tex.

of common stock and warrants
purchase of an additional 150,000 shares of com¬
mon stock, to be offered in units of one share of stock
and one warrant. Of this offering, 120,000 units will be
offered for the account of the company and 30,000 units
will be sold for the account of selling stockholders. Price
—$2.50 per unit. Proceeds—To repay loans by company
officials and past-due payables owing chiefly to Promo¬
tion Press; and the balance for working capital and ex¬
pansion of circulation. Office—225 Varick St., New York.
Underwriter—Charles Plohn & Co., New York.

Inc., New York
Nov. 10 filed $250,000 of 6% 10-year debentures and 5,000 shares of 6% participating preferred stock (par $50)
to be offered in units of a $50 debenture and one share

Price—$100 per unit. Proceeds—For

acquisition of motels. Underwriter—Sire Plan Portfolios,
Inc., New York.
\

Co.

(2/17)
which
140,000 shares are to be offered for public sale and 10,000 to company employees. Price — To be supplied by
amendment. Proceeds—For construction program. Office
—-300 Montgomery St., San Francisco, Calif. Underwriter
—Dean Witter & Co., San Francisco and New York.
*

Jan. 27 filed 150,000 shares of common stock, of

★ Spacetronics, Inc.
(letter of notification) 23,750 shares of class A

of

common

class

B

per

share. Proceeds—For research and devel¬

opment and other working capital. Office

Street, N. W., Washington 6, D. C.

—

1109 16th

Underwriter—None.

Sports

Arenas (Delaware)
Inc.
Nov. 18 filed $2,000,000 of 6% 10-year convertible de¬

,

United

for

other installations, fixtures and equipment; $85,000
expand two present establishments by increasing
the number of alley beds by eight at Yorktown Heights
and by six at Wilton Manor Lanes, Fort Lauderdale;
$300,000 for deposits on leaseholds, telephones and util¬
ities; and $395,000 for working capital. Underwriter—

to

None.

None.
Standard

Jan.

28

Control

filed

Corp., Seattle, Wash.

of trust, participation certificates, 9,000 shares v
A commioTi stock (nbn voting), and 600 shares ,<
,B common stock, (voting); to be offered in 600
units, each consisting of :10/certificates
($100 face ^
amount), 15 class A shares and 1 class B share. Price— /
$1,160 per unit. Proceeds—Together with bank borrow-i;
ings, will be used.to purchase from the Sea Pines Plan-,,/
tation Co. a tract of approximately three acres of ocean ,,
of class

front

common

stock

United Employees Insurance Co.
April 16 filed 2,000,000 shares of common stock (par $5,
Price
$10 per share. Proceeds — For acquisition o
operating properties, real and/or personal, includinj

16

common

Manufacturing Corp. (2/16)
(letter of notification) 150,000 shares of class A
stock (par 10 cents). Price—$2 per share. Pro¬

ceeds—To pay loans; purchase

or

purchase.

writer—None.

Office

Myrl

L.

$20,0(310 Of costs advanced by it. Underwriter— /
Johnson,' Lane, Space Corp., Savannah, Ga.
7 y u

for somd
The

Wilmington Country Club, Wilmington, Del. ,/
/
27. filedv $500,000 of debentures due 1991 (non in- ,-terest bearing.), and 800 shares of common stock (par ?.
$25) to be offered/to members of this club and..of
Concord Ltd. Price—$375 per common share and $1,000
Oct.

debenture/ Proceeds

per

certain

build

To

—

shares

1,199,307

and

develop property

Underwriter—-None.

facilities.

Wyoming Corp.."'-;.;

/

'

'

1

.

'

./','/"/' '

Of these >

7

are subject to partially completed sub-

scriptioris at* $2, $3.33 and $4

share; and the addi-^
offered initially to share-^
holders of record Nov. i, 1958, in the ratio of one new
share for each* 2.33 shares held 011 that date. Price—$4/
per

tional 250,000 shares are to be

on

Proceeds—$300,000 will be used for payments

share.

per

—

lease

property "on Hilton Head Island, to construct the .]
Inn, purchase all furniture, fixtures and equipment nee-/,
essary
to' operate the Inn/and to provide necessary/
working, capital (arid to reimburse Sea Pines Plantation i

Nov. 17 filed 1,449,307 shares of common stock.

(2/18)

(par $1).
Price—To be supplied by amendment. Proceeds—To re- 1
duce bank loans and for working capital. Underwriter—
Blyth & Co., Inc., New York, and San Francisco.
200,000 shares of

7//:.■:.1.7/

v,

filed, together with The William Hilton Trust,

of class

contract to

purchase shares of International Fidelity
capitalization of a fire insur-/
,

Insurance Co.; $325,000 for
ance

office furniture, fixtures, equipment and office space, b*

Arenas

(Delaware)
Inc.
Nov. 18 filed 461,950 shares of common stock (par one
cent). Price—At the market (but in no event less than
$6 per share). Proceeds—To selling stockholders. Office
—33 Great Neck Rd., Great Neck, N. Y. Underwriter—
Sports

t

Jan.

19

$600,000

Bag-Camp Paper Corp.
Jan. 8 filed 23,282 shares of capital stock (par $6.66%)
being offered in exchange for shares of capital stock of
Highland Container*Co.*in ratio of 0.58 share of Union *
Bag for one share of Highland. The offer will expire at
3:30 p.m. (EST) on March 2, unless it is accepted prior
to its expiration of stockholders holding more than 25,000 >
of the outstanding shares, the exchange offer will be can¬
celled. If the exchange offer is so accepted by the hold- >
ers of more than 25,000, but less than 36,000 such shares, •
the exchange offer may be cancelled at the option of
Union Bag by written or telegraphic notice to the ex¬
change agent given on or before March 4.

bentures

(subordinated), due Jan. L 1969. Price—To be
supplied by amendment. Proceeds—$750,000 to pay AMF
Pinspotters, Inc. for bowling alley beds; $350,000 to pay

Jan.

Union

Jan. 29

Price—$1

William:Hilton Inn Co.;

Jan. 26 filed 150,000 shares

for the

Sire Plan of Elmsford,

stock (par 10 cents) and 191,250 shares
non-voting common stock (par 10 cents).

sinking fund debentures,

6%

of

Price—100% of principal amount./
capital, improvements. L Office—Atlantic,

1,969.

,

At par. Proceeds—For working capital. Office — 3172
North Sheridan Rd., Chicago 14, 111. Underwriter—None.

voting

$500,000

B, due

Proceeds—rFor

—

Co.

Southwestern States Telephone

filed

9

Feb.

series

Feb.

Aug. 19 (letter of notification) $250,000 of 6% convertible
debentures due Sept. 15, 1963 to be offered for subscrip¬
tion by common stockholders on a pro rata basis. Price—

stock.

Ave., Passaic','-N.". J.

Iowa. Underwriter—The First Trust Co. ox Lincoln, Neb. trp
A-Thomas & Betts Co. (2/25)
• Western Gas Service Co. i (2/17-18)
5 filed 300,000 shares of common stock (par $1). 7
Jan. 29 filed' 104,500 shares of common stock of which'd1
Price
To be supplied by amendment. Proceeds — To r
it is proposed to offer 4,500 shares for subscription byselling stockholders. Business — Manufactures a broad
certain
enripljoyees. Price—To be supplied by amendment, f.
line electrical raceway accessories and conductor con- <•
Proceeds—Together,.with other funds, will be used top
nectors of basic use in virtually all phases of the elec¬
pay a short-term bank loan of $5,700,000.
Office—9065,7.
trical industry. Underwriter—Smith, Barney & Co., New
Alameda, Avenue, EI Paso, Texas. Underwriter—Under-/
York.
wood, Neuhaus & Co., Inc., Houston, Texas. / '•/ : »./ j 3
TV Junior Publications Inc. (2/24)
/

St., N. W., Washington 7, D. C. Investment Advisor—In¬
vestment
Fund
Management
Corp. Former NameShares in America, Inc.

of preferred

19/N. Y. Underwriter—Barsh & Co., 663 Main*/
;7;7/77.77 - Vri"" -7
if Walnut Grove Products Co., Inc.
• -v.-. —

New York

if Texas Instruments, Inc., Dallas, Texas
11 filed 691,851 shares of common stock (par $1)
and 737,974 shares of 4% cumulative preferred stock,
series 1959 (25 par—convertible on or prior to May 1,
1969), to be offered in exchange for common stock of
Metals & Controls Corp.

Inc.
Dec. 12 filed 50,000 shares of common stock. Price—At
market.
Proceeds—For investment. Office — 1033-30th

Hotel

V"
7 '
[ '•*'
\ '
(letter of notification) 900,000 shares of com- /
stock; Pric6—At par (10 cents per share). Proceed! <;

Feb.

Shares in American Industry,

Sheridan-Belmont

-

•

(after giving effect to a stock di¬
11%%). The warrants expire on March 16,
1959. Price—$35 per share. Proceeds—For working cap¬

13 2/17th shares held

vidend

Pres;

mon
975,000 shares of common stock (par 10 cents). Priw 7
bonds, 95% of princmal amount; and for stock $> - —For mining expenses. Office—305 Main St., Park City,
Utah. Underwriter^—Walter Sondrup & Co., Salt Lak» *\
per share. Proceeds—To erect and operate one or mor*
chemical processing plants using the Bruce - William* ^
City, Utah.
> V; 7
''. />/
*'
Process to beneficiate manganese ores. - Underwriter- v
Utah Oil Co. of New York, Inc.-;:/..
V/AKY; *:'•/
Southwest Shares, Inc., Austin, Texas.;
May 6 (letter of notification) 300,000 shares of capital
if Surveillance Fund, 1959, Ltd. ,
stock. Price — At par ($1 per share). Proceeds — Foa/
Feb. 6 filed $300,000 of participation in capital as Limdevelopment of tori and gas lands.; Office—574 Jefferson //
ited
Partnership Interests.
Proceeds—For 'acquisition
Ave., Rochester 11* N. Y. Underwriter—Frank P. Hunt
and exploration of oil and/or gas properties. Office—500
& Co., Inc.; Rochester, N. Y.
/"
Mid-America Bank Building, Oklahoma City, Okla. Un¬
Venture Options, ■ Inc.■
derwriter—None.
/:.•••:' W""
/
Jan. 27()(letter of notification) 60,G00 shares of common*/
• Talcott
(James), Inc. (2/25)
stock (no par).
Price—$5 per share. Proceeds—To bej-Z
Feb. 4 filed 150,000 shares of common stock (par $9).
deposited. with member firms of the New York Stock ■?>
Price—To be supplied by amendment. Proceeds — For
Exchange to guarantee Puts and Calls written by. the
general corporate purposes. Underwriters—F. Eberstadt
company arid to cover expenses. Office—730 Fifth Ave., /
& Co. and White, Weld & Co., both of New York, v

(no par value). Price—To be supplied by amendment.
selling stockholders. Office—27 Council

'

is

Ore.,

.

—For

Proceeds—'To

Jan. 23

1

April 11

and

(2/25)

225,000 outstanding shares of common stock

Ave., Wheatland,
Cleveland, Ohio;

r7.

•

Utah Minerals Co.

March 31 filed

Inc.

Sawhill Tubular Products,
Jan. 30 filed

kdent.-■

Strategic Mkierals Corp. of America, Dallas, Tex
$2,000,000 of first lien mortgage 6% bond*

Statement effective Jan. 23.

Proceeds—For explorationby amendment, v

purposes.
Underwriter—To be named
Graham Albert Griswold of Portland,

(by amendment) an additional 494,000 shares
of caiptal stock (par $1). Price—At market. Proceeds—
For investment. Office—Chicago, 111.
t
1
Feb. 4 filed

Loan

Thursday, February 12, 1959

.

.

.

pected to be $1 per share).

Stock Fund, Inc.

* Stein R09 & Farnham

41

Continued from page

Colo.

Chronicle

The Commercial and Financial

(798)

tion
an

President.

title insur-

a

,

$500,000 for additional capital contribu¬
Development Co.; and $300,000 as

company;

to IGreat

Plains

additional capital contribution to Great Plains Mort¬

gage

United Security Life & Accident Insurance Co.

$500,000 for capitalization of

company;

ance

Wilmington, Del. Under
McKee of Portland, Ore., \<
—

Office—319 E. "A" St., Casper, Wvo.

Co.

writer— None.

filed 120,000 shares of class A common stock
Price—$3 per share. Proceeds—To provide the reserves
required to be held in life and accident insurance poli¬
cies, and to pay the necessary expenses in producing

'

"

'

•

Under¬
'7/7

Aug. 22

insurance.

Office—Louisville,

Prospective Offerings

Underwriter—None

Ky.

Alabama

Edmond M. Smith, is President.

Power Co.

(4/30)

;

i»1.

.

machinery, tools and dies;
inventory; and for working capital. Office—1100 South
Central Park Ave., Chicago 24, 111. Underwriter—Plym¬
outh Securities Corp., New York, N. Y.

Nov. 26 filed 708,750 outstanding shares of common stock.
Price—At market. Proceeds
To selling stockholders.

writer—To be determined by competitive

★ Standard Security Life Insurance Co. of

Office—Tiffin, Ohio. Underwriter—None.

able bidders:

New York

Feb.

(3/2-6)

States

Glass

&

Dec.

Chemical

Corp.

Land

Development Corp. (2/16-20)
1,055,000 shares of common stock. Price—
At par ($1 per share). Proceeds — To be added to the
company's general funds and used to develop Pineda

200,000 shares of common stock (par $2).
Price—$7.50 per share. Proceeds — To increase capital
and surplus. Office—221 West 57th St., New York, N. Y.

Jan.

Underwriters—Ira Haupt & Co. and Savard & Hart, both
New York.

Island and other properties that may be acquired.
writers—Aetna Securities Corp., New York, and

of
★

&

Standard

Sign & Signal Co. (3/16)
(letter of notification) 300,000 shares

Dec.

17

mon

stock.

Price—At

of

com¬

($1 per share). Proceeds—
To promote and expand the development of the Safety
School
6130

Shelter

Preston

—Sano

&

par

business.

Office—c/o

Haven

Brown

Drive, Dallas, Texas.
Co., New York, N. Y.

Kendrick,
Underwriter

★ State Bond & Mortgage Co., New Ulm, Minn.
(by amendment) an additional $1,000,000 of
108, $10,000,000 of Ac¬

Feb. 6 filed

Accumulative Certificates Series

cumulative Certificates Series 115, and $10,000,000 of Ac¬
cumulative Certificates Series 120.
Proceeds—For in¬

vestment.
State Life, Health & Accident Insurance
July 9 (letter of notification) 50,000 shares of
stock

(par $1).

Price—$5

per

share.

Co.
common

Proceeds—To

be

invested in stocks and bonds and to
acquire other life
insurance companies. Address—P. O. Box 678, Gulfport,
Miss. Underwriter—Gates, Carter & Co., Gulfport, Mis«.




16 filed

Johnson, Ft. Lauderdale, Fla.,
United

States

on

a

Under¬
Roman
best efforts basis.

Corp. (2/16-20)
(letter of notification) 150,000 shares of common
<stock (par one cent). Price—$2 per share.
Proceeds—
For working capital and general corporate purposes. Of¬
fice—27 Haynes Ave.,
Newark, N. J. Underwriter—Ross,
Lyon & Co., Inc., New York.
United

Tourist

Enterprises, Inc.
4,500,000 shares of class A common stock
(par 50 cents).
Price—$2 per share.
Proceeds—For
development and construction of a "Western Village"
and

28

for

•

filed

construction of

a

Grand

Estes

Hotel

and

Con¬

vention Hall, to be constructed in the immediate vicinity
of Estes Park Chalet, located in Larimer
County, Colo.
Office — 330 South 39th Street,

writer—Mid-West Securities

Boulder, Colo. Under¬
Corp., Littleton, Colo. 7

Uranium Corp. of America, Portland, Ore.
April 30,1957 filed 1,250,000 shares of common stock (pa)
16 cents)i
Price—To be suoolied by amendment (ex¬
.

it was'announced
sale

and

of

Proceeds

that

For

the company plans

the

of 30-year first mortgage
Under¬

$20,000,000
—

construction program.

bidding. Prob¬
Halsey, Stuart & Co. Inc.; Lehman Broth-'^.
ers; Eastman Dillon, Union Securities & Co., Equitable ^
Securities Corp. and Drexel & Co. (jointly); Harriman"
Ripley & Co., Incrand Goldman, Sachs & Co. (jointly);/
Morgan Stanley & Co.; Blyth & Co., Inc. and Kidder,-;
Peabody &«Co. (jointly); The First Boston Corp. Regis- tration—Planned for April 3. Bids—Expected to be
re-/
ceived on April 30. ;
^ ►7
All American Markets, Downey,

Pool

Jan. 16

Jan.

10

issue

bonds.

—

U. S.

filed

9

United

Jan. 30 it
mon

was

Calif.

reported that the company plans

stock offering.

Underwriter—J.

Barth

&

Co., San Francisco, Calif.

fcring—Expected sometime in April.
•

:

Of-,I
:

.

Broad Street Trust Co.,

Feb. 2 it

was

Philadelphia, Pa.
announced that the Bank is offering 32,000'/

additional shares of
mon

of

com--

a

Business—Chain' of grocery stores./

16

then

new

shares of

Proceeds—To

Jan.

common

held; rights to expire

share.

stock

common

stockholders of record

stock

on

increase

(par $10) to its com¬

22,

1959, on the basis

for

each

149 shares1

Price—$35 per
capital and surplus. Un¬
Feb.

16.

derwriters—Hallowell, Sulzberger, Jenks, Kirkland
Co. and Stroud & Co., Inc., both of Philadelphia, Pa.
California Electric Power Co.
Jan.

21

it

was

issue and sale

announced

that

of 300,000 shares

of

&•'
J

7)

(3/31)

the

;

-

plans the
stock. Pro¬

company
common

ceeds—To repay bank loans and for

expansion program.'

189

Volume

Number

5820

.

The Commercial and Financial Chronicle

.

.

Underwriter—To be determined by competitive
bidding.
Probable bidders: Merrill Lynch, Pierce, Fenner & Smith

White, Weld & Co. (jointly); Blyth & Co., Inc. Registra¬
for March 6.
Bids—Expected to be re¬
ceived

(jointly); White, Weld & Co.; and Kidder, Peabody
Bids—To be received up to 9 a.m. (PST) on

'Aug. 25 it

Central Bank & Trust Co., Great
Neck, L. I., N. Y.
13 stockholders approved the sale of an additional

Jan.

Central

Jan, 26 it

Power &

_

Light Co.

and

.per

$11,000,000, of first mortgage bonds. Underwriter—To be
determined by "competitive,/bidding. Probable bidders:

Jersey Central Power & Light Co.

Probable bidders: Halsey, Stuart & Co. Inc.; White,
& Co.; Kidder, Peabody &
Co.; Salomon Bros. &
Hutzler and Merrill
Lynch, Pierce, Fenner & Smith Inc.
Weld

April.

(jointly); Lehman Brothers and Blair & Co., Inc., (joint¬
Offering—Expected late this summer.
[

the

foi

ly).

by the company at 139 West Van

St., Chicago 5, 111.,
purchase from

it

Jubilee

(CST) on Feb. 24
$5,130,000 equipment trust
to

up

of

noon

certificates maturing semi-annually from Aug. 15,
to Feb. 15, 1974, inclusive.
Probable bidders;

Feb. 2 it

1959

Inc.; Salomon Bros. &. Hutzler../.

.

Kansas
Dec. 29 it
and

Dillon, Union
ecurities & Co. (jointly); Merrill Lynch, Pierce, Fen¬
ner & Smith,
White, Weld & Co., Shields & Co. and R.
W. Pressprich & Co. (jointly);
Mqrgan Stanley & Co.
De Jur-Ansco

Jan. 27 it

sale

of

Co.,

debentures

and

Underwriter—H. M.

stock, but
out. Business—Manu¬
common

meters,

Equitable

Securities

•

March 31, G. W.

Evans, Chairman, announced that com¬
pany plans to sell some bonds originally scheduled foi
mid-year of 1958. The proposed sale was subsequently
deferred until early 1959. Proceeds — About $8,000,000

Byllesby & Co., Inc., Chicago, 111.

if El Paso Electric Co.
Feb. 9 it

(jointly);

Kansas Gas & Electric Co.

etc.

cameras,

Inc.

June.

reported that the company is planning the

was

convertible

Light Co.

Corp.; White,
Weld & Co, and Shields & Co.
(jointly); Kuhn, Loeb &
Co., Salomon Bros. & Hutzler and Eastman, Dillon, Union
Securities & Co. (jointly); Lehman Brothers and
Bear,
Stearns & Co. (jointly). Offering—Expected in
May or

Corp., New York City !

details have not yet been worked
facturer and distributor of light

&

was

Blyth &

Eastman

and

City Power

reported that the company plans to issue
$20,000,000 of first mortgage bonds. Proceeds—

sell

For construction program.
Underwriter—To be deter¬
mined by competitive bidding. Probable bidders:
Halsey,
Stuart & Co. Inc.; The First Boston
Corp. and

roceeds—To repay outstanding bank loans. Underwriter
-To be determined by competitive bidding.
Probable

Brothers

sale

Proceeds—For expansion.
Office—1721 Broad¬
New York, N. Y. Underwriter—Not yet named.

way,

Columbia Gas System, Inc.
1 it was reported that the company may issue and
sell additional common stock in the first half of 1959.

Lehman

announced that the company plans the is¬
of $1,500,000 of convertible preferred

was

stock.

'ec.

bidders:

Records

and

suance

Halsey,

Stuart & Co.

about

ding.

Chicago^ Rock Island & Pacific RR. (2/24)

Buren

reported that company is contemplating
$7,000,000 of first mortgage bonds.
be determined
by competitive bid¬

was

of

Underwriters—To

(jointly); Kuhn, Loeb & Co., A. C.
Bear, Stearns & Co. (jointly);
Dillon, Union Securities & Co. Bids—Expected

Bids will be received

it

12

sale

reported that the company is planning the
sale of $3,500,000 of first mortgage bonds due 1989. Pro¬

for construction program. Underwriter—To be determined

ceeds—For

Stuart &

was

by
competitive
bidding.
Probable
bidders:
Halsey,
Co. Inc • Kidder, Peabody & Co., and Merrill
Lynch, Pierce, Fenner & Smith
(jointly); Lehmar
Brothers; Eastman Dillon, Union Securities & Go. and
Stone & Webster Securities
Corp. (jointly); Glore, For
gan & Co., and Goldman Sachs & Co. (jointly).

construction

program.
Underwriter—To be
by competitive bidding. Probable bidders:
Halsey, Stuart & Co.; Merrill Lynch, Pierce, Fenner &
Smith, Inc.; Stone & Webster Securities Corp.; Kidder,
Peabody & Co.; White, Weld & Co. and Shields & Co.

determined

(jointly) Equitable Securities Corp. and R. W. Press¬
prich & Co.-(jointly). Bids—Expected to be received
time in May.
■
I ;

some

Feb. 9 it

reported that the company

was

^20,000 shares of preferred stock

ceeds^-For

construction

determined

(par

$100).

Hutzler

Weld

&

Smith.

$7,500,000 of preferred stock (par $100).

Fenner & Smith, Kidder, Peabody &
Co. and Harriman Ripley & Co., Inc. (jointly); Salomon
Bros. & Hutzler, Eastman Dillon, Union Securities & Co.

&

Co.; Kidder, Peabody & Co., and White,
(jointly); Merrill Lynch, Pierce, Fenner &
Bids—Expected to be received some time in May.

and Equitable Securities

Corp. (jointly); The First Bos¬
Corp. and Glore, Forgan & Co. (jointly). Bids—Ex¬
pected to be received sometime in April.

Co.

ton

★ •El Paso Electric Co;
. Y;>-V"v""
Feb. 9 it was reported that the
company is also planning
offering of common stock to common stockholders on

Dec. 15 it

the basis of about

attachable

•

Miami

Window Corp.

^

an

Proccedsr—For

one

new

•

^ Florida Power Corp.
■
Feb. 4, W. J. Clapp, President, announced-that the cor¬
poration is planning to sell additional shares of common
stock

on

held.

writers—

Pierce,

basis of

Kidder,

Fenner

&

one

share for

new

&

Smith

Inc.-

FXR,

12

Dec.

in

.

Inc., Woodside, N. Y.

Feb. 2 it

was

announced that company

(formerly F & R

Machine Works) is considering some additional financ¬
ing, but types of securities to be offered have not as yet
been determined.
: •
•

-

-

.

„

-

.

Georgia Power Co.
Dec. 10 it
and sell

was

,

(9/10)

announced that the company

plans to issue
$18,000,000 of 30-year first mortgage bonds. Pro¬

ceeds—For

construction

determined

Underwriter—To

program.

by competitive

bidding.

be

Probable bidders

Halsey, Stuart & Co. Inc.; Blyth & Co., Inc., Kidder, Pea¬
body jc Co. and Shields & Co. (jointly); Lehman Broth¬
ers; The First Boston Corp.; Morgan Stanley & Co.;
Equitable Securities Corp. and Eastman Dillon, Union
Securities & Co. (jointly); Harriman Ripley & Co. Inc.
Registration—Planned for Aug. 14.. Bids—Expected to

be received
Great

Dec.

15

following

on

Sept. 10.

Atlantic
the

new

10-for-l

&

Pacific

common

Co., Inc.
voting stock outstanding
listed on the New York

split was
Stock Exchange. A large secondary offering has been
rpmored. Underwriters — May include: Blyth & Co.,
Inc.; Lehman Brothers and Smith, Barney & Co.

Gulf Power Co. (4/2)1
Dec. 10 it was announced that the company plans to issue
and sell $7,000,000 of 30-year first mortgage bonds. Pro¬
ceeds—For construction program.
Underwriter—To be
determined by competitive bidding.. Probable bidders:

it

10

ceived
,

&•

Smith, Salomon Bros. & Hutzler and Drexel & Co.
(jointly); Eastman Dillon, Union Securities & Co.;
Equitable Securities Corp.; Kidder, Peabody & Co. and




Corp., Boston, Mass

that

on

this

company

June 25.

Salomon

and

States Power Co.
(Minn.)
Allen S. King, President, announced that the
company plans about the middle of 1959 to put out a

3,

stock issue and possibly a $15,000,000 preferred

common

Bros.

Hutzler

&

a

satisfactory market.

Proceeds—

To repay bank loans and for construction
program.
derwriter — To be determined by competitive

Un¬

bidding.
(1) For preferred stock: Blyth & Co.,
Inc. and The First Boston Corp. (jointly); Lehman Broth¬
ers
and Riter & Co.
(jointly); Merrill Lynch, Pierce,
Fenner & Smith; Harriman Ripley &
Co., Inc. and East¬
man
Dillon, Union Securities & Co. (jointly); Kuhn,
Loeb & Co. (2) For common stock: Lehman Brothers
and Riter & Co. (jointly); The First Boston
Corp., Blyth
& Co., Inc. and Kuhn, Loeb & Co.
(jointly); White, Weld
& Co. and Glore, Forgan & Co.
(jointly); Merrill Lynch,
Pierce, Fenner & Smith.
Probable bidders

if Ohio Power Co.
Feb. 9 it

1989.

(3/30)
reported that the

was

and

ance

sale

of

Proceeds

company

plans the issu¬

$25,000,000 first mortgage bonds due

—

For

construction

Under¬

program.

writer—To be determined by competitive
bidding. Prob- '
able bidders: Halsey, Stuart & Co.
Inc.;

Kidder, Pea¬
body & Co. and Merrill Lynch, Pierce, Fenner & Smith
;
(jointly); Eastman Dillon, Union Securities & Co. '
and Salomon Bros. & Hutzler
(jointly); Harriman Ripley
& Co. Inc., and Stone & Webster Securities
Corp. (joint¬
ly); Blyth & Co., Inc. Bids—Expected to be received up
Inc.

to

11

(EST)

a.m.

on

March 30.

Our River Electric
Dec. 22 it

Co.r Luxemburg

reported that this company plans to offer
of bonds. Underwriters—The First Boston

was

$10,000,000
Corp. and Kuhn, Loeb & Co., both of New York.
Pemt-Texas

Corp.

Jan. 28, Alfons Landa, President, said the
company may
offer its stockholders $7,000,000 additional capital stock

through subscription rights. Purpose—To acquire Fair¬
banks, Morse & Co. common stock. Underwriter—Bear,
Stearns &

Co., New York.

Pennsylvania Electric Co.
Jan.

12

it

the company is planning
$17,000,000 of first mortgage bonds. Un¬
determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co.
Inc.; Equitable
Securities Corp.; Kidder, Peabody & Co.; Eastman
Dillon,
Union Securities & Co., Merrill
Lnych, Pierce, Fenner/
& Smith Inc. and
White, Weld & Co. (joihtly); The First
Boston Corp. and Harriman Ripley & Co. Inc.
(jointly).
Offering—Expected this Spring or early Summer.
was

reported that

the sale of about

derwriter

—

To be

Public Service Electric & Gas Co. f6/2^,~
w/,..
was reported that the
company plans sale of
$30,000,000 to $40,000,000 debentures; Underwriter—To
be determined by competitive bidding. Probable bidders:
Halsey, Stuart & Co. Inc.; The First Boston Corp.; Kuhn

...

~~

Jan. 30 it

Loeb

& Co. and Lehman Brothers
(jointly); Morgan
Stanley & Co. and Drexel & Co. (jointly). Bids—Ten¬
tatively expected to be received on June 2.

if Puget Sound Power & Light Co.
was announced company
plans to issue and sell
$10,000,000 preferred stock this Spring. Proceeds—For

Feb. 6 it

construction program.
Underwriter — May be
Lynch, Pierce, Fenner & Smith, Inc., New York.

Merrill

if Ritter Finance Co.
Feb.

it

9

reported

was

registration of

that

the

company

plans

early

undetermined amount of stock, prob¬
ably to take the form of a convertible preferred stock
issue.
Underwriter—Stroud & Co., Inc., Philadelphia,
an

Registration—Planned

Expected

some

for

this

month.

Offering—

time in March.

Ryder System, Inc.
Ian. 12 it
ance

was

reported that the company plans the issu-(

and sale of 150,000 shares of common stock

(par $5).
Underwriter—Blyth & Co.,
Inc., New York. Offering—Expected any day.
Proceeds—For acquisitions.

Southern Electric Generating Co.
(5/28)
was announced that the company plans to issue
and sell $25,000,000 of 30-year first mortgage bonds.
Dec. 10 it

Proceeds—For

(3/31)
Dec. 29 it was reported that the company plans the sale
of about $16,000,000 of first mortgage bonds. Proceeds—
For construction program.
Underwriter—To be deter¬
mined by competitive bidding. Probable bidders: Halsey,
Stuart & Co. Inc.; Eastman Dillon, Union Securities &
Co.

Northern

Dec.

Pa.

(6/25)

announced

was

construction

program.
Underwriter—To
competitive bidding. Probable bid¬
Halsey, Stuart & Co. Inc.; Eastman Dillon, Union
Securities & Co. and Equitable Securities Corp. (jointly);

be

determined

by

ders:

Merrill Lynch, Pierce, Fenner & Smith; Kidder, Peabody
Co. and White, Weld & Co. (jointly). Registration—
Planned

for

May 1.

Bids—Expected to be received

on

May 28.

(jointly); Harriman
Ripley & Co., Inc.; Equitable Securities Corp.; W. C.
Langley & Co. and The First Boston Corp. (jointly);

Bids

Merrill

Room

&

noon

Lynch, Pierce, Fenner & Smith; Kidder, Peabody
Co. and White, Weld & Co. (jointly). Bids—Expected

to be received

National

on

March 31.

State

mon

stock

on

the

shares then held
16.

were

basis

as

of

offered
one

80,000 shares of

new

share for

com¬

each six

of Jan. 23; rights to

expire on Feb.
share. Proceeds—To increase capital

Price—$50 per
and surplus.
Underwriter—Clark,
York.

Dodge

&

Co.,

New

,

North

Northern
12

(2/18)

„

expected to be received by the company
2117, 165 Broadway, New York, N. Y., up

are

at

to
(EST) on Feb. 18 for the purchase from it of $7,equipment trust certificates. Probable bidders:
Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutzler..
Southwestern Electric Power Co.

it

this company (formerly
plans the issuance and
first mortgage bonds. Under¬
writer—To be determined by competitive bidding. Prob¬

Jan.

26

was

reported

that

Southwestern Gas & Electric Co.)
sale of about $16,000,000 of

able
American

Equitable Life Assurance Co.

Dec. 1 it was announced that the company plans an of¬
fering of 950,000 shares of capital stock. Price — $10 per
share. Proceeds—To increase capital and surplus. Un¬
derwriter—John M. Tait & Associates, Cincinnati, Ohio.

Dec.

Southern Pacific Co.

125,000

Bank, Newark, N. J.

Jan. 27 stockholders

;

Halsey, Stuart & Co. Inc.; Merrill Lynch, Pierce, Fenner

Securities

Monongahela Power Co.

-

Tea

warrants—each

plans to
issue and sell $5,000,000 of 30-year first mortgage bonds
Proceeds—For construction program.
Underwriter—To
be determined by competitive bidding. Probable bid¬
ders: Halsey, Stuart & Co. Inc.; Eastman
Dillon, Union
Securities & Co. and Equitable Securities Corp. (joint¬
ly); Merrill Lynch, Pierce, Fenner & Smith; Kidder,
Peabody & Co. and White, Weld & Co. (jointly). Regis¬
tration—Planned for May 29. Bids—Expected to be re¬

shares

Offering—Expected

;

of

Mississippi Power Co.

expenditures. Under¬
Co. and Merrill Lynch,

Peabody

June.

each

(3/2-6)

reported that the company plans issuance

111., and Clayton

cago,

Proceeds—For construction

the

was

$2,500,000 6Vz% debentures due 1974 (with
$1,000 debenture to carry a
warrant to buy 200 shares of common stock at $3 per
share). Underwriters—Cruttenden, Podesta & Co., Chi¬

Dealer-Manager

program.

-Stone & Webster Securities Corp., New York. '

sale

and

share for each 25 shares held.

construction

Under¬

rill Lynch, Pierce,

be

competitive bidding. Probable bidders;
Eastman Billon, Union Securities &
Co.; Salomon Bros.
&

& Light Co. a
reported that the company plans to issue

Co., Blyth & Co., Inc. and Shields & Co. (jointly); Mer¬

Pro-

Underwriter—To

Power

was

writer—To be determined by competitive bidding. Prob¬
able bidders: Halsey, Stuart & Co. Inc.; White, Weld &

plans the sale

by

program.

29 it

and sell

•'

if El Paso Electric Co.
of

Louisiana
Dec.

.

The First Boston Corp.; Glore, Forgan & Co.;
Co., Inc.

&

stock issue if there is

125,000 shares of common stock. Price—$10.50
share. Underwriters—A. C. Allyn & Co., Inc., and
Offering—Now being made.

Jan.

Bros. & Hutzler

be received sometime in

to

Underwriter—

Offering—Expected in

-' v<

sell

the

Allyn & Co.;; Inc., and
Eastman

expansion.

■

Walston & Co., Inc.

Halsey,-Stuart & Co. Inc.; Blyth & Co., Inc.; Lehman Bro¬
thers and Glore Forgan & Co. (jointly) ; Kidder,
Peabody
& Co.; Merrill
Lynch, Pierce, Fenner & Smith and Salo¬
mon

Proceeds—For

Blyth

company

;• Interstate Motor Freight System, Inc. (Mich.)
Dec. 1 it was reported that the
company plans to issue

surplus. Underwriter—-None.

reported that the company plans to sell

was

the

that

Glore, Forgan & Co., New York.
1959.

Price—$20 per share;-Proceeds—

increase capital and

Co. Inc.;

reported

was

stockholders.

38,503 shares of capital stock to stockholders of record
Feb. 20, 1959. on the basis of one new share for each
To

a
preferred stock issue.
Proceeds—For capital ex¬
penditures.
Underwriter—To be determined Dy com¬
petitive bidding.
Probable bidders: Halsey, Stuart &

x

plans earl}
registration of 400,009 shares of common stock; of which
100,000 shares are to be sold for the account of selling

March 31.

five shares then held.

*

Heublein, Inc.

Co.

&

April 2.

on

43

of

tion—Planned

Inc.; Carl M. Loeb, Rhoades & Co. and Bear Stearns &
Co:

(799)

it

Illinois

Gas

Co.

reported that the company will sell in
1959 about $35,000,000 of new securities, including some
first mortgage bonds; ha. addition, there is a possibility
was

bidders: Halsey, Stuart & Co. Inc.; Merrill Lynch,
Pierce, Fenner & Smith Inc. and Eastman Dillon, Union
Securities & Co. (jointly); Equitable Securities Corp.;
Lehman Brothers; Kuhn, Loeb & Co.; Blyth & Co. Inc.
Bids—Expected to be received in April or May.
Texas Eastern Transmission Corp.
Dec.

11

it

was

announced by W. Hargrove,

Vice-Presi¬

dent, that the corporation plans to raise about $90,000,-

Continued

on

page

44

The Commercial and Financial

(800)

44

been selected

43

Continued from page

through the sale of new securities (tentative plans
call for the sale of bonds, debentures and preferred

Proceeds—To refund $30,000,000 of outstanding
loans, and the balance will be used for capital ex¬

stock).

Underwriter—Dillon, Read & Co. Inc., New

penditures.

it was reported

13

Jan.

|

that the company has filed an

mortgage bonds. Proceeds—For expansion program. Un¬
derwriter—Dillon, Read & Co., Inc., New York. Offer¬
ing-—Not expected for some time.

Uptown National Bank of Chicago
15 the Bank offered to its stockholders of

Jan.

1959 the right to subscribe for 10,000 additional
$25) at the rate of one new
share for each five shares held; rights to expire on March
5. Price—$35 per share.
Proceeds—To increase capital
Jan. 15,

and surplus.
Venezuela

be received on June

;v

West Penn

(Government of)

2.

on

market
has been behaving satisfactorily
fsince the start of the week and
the same holds true of gilt-edge
corporate obligations. The overall

far as the
corporate list is concerned has
been eased considerably by reason

4>ituation, especially

of

the

have

that

fact

been

as

new

emissions

total of $30

makes

investors.

bonds

The

are

three15-years. The largest
in

dollar

only other substantial new
debt issue up for bids next week
is Public Service Co. of Indiana's

$25 million of bonds on which
tenders will be opened Tuesday.

&

of investment funds. On the

feel

they

that

con¬

is

there

an

on

Gas

Electric

Central Illinois

Co.'s

"rights" offering of
shares of common to its

145,940
holders.

securities.

new

is this big

There

—that such

offerings be made

new

attractive to the prospective buyer
as

A. V. Bianco Opens

"if," however,

regards price and yield. Feeling

is that in spite of all the hue and
cry

investor

ROSLYN HEIGHTS, N.
is

engaging

390 Willis Avenue.

in

ensconced

Federal

The

B. O.

the

Reserve

the

Administration urges,

the

as

cannot

well afford to swell

very

volume

of

credit

-available

West

Main

Choura is

offices

Street.

associated

at 3605

track clear and fast when bankers

shares of

550,000

JOLLA, Calif.
Thompson is conducting

—

a

Colby
securi¬

ties business from offices at 7825

Ivanhoe.

mon,

right

at

subject
of

reported

$100,

the

convertible

are

to

the

redemption
in

wide

Joins

shares
into

$75,

was

demand

and

moving out quickly.
The

raising

big
the

aluminum
funds

maker

involved

order to pay the cost of
»

49%

interest

Aluminum

through
market

Co.

in

block

in

is
in

acquiring

the

Ltd.

purchases
to

Pres.

British

largely
the

entry




(Special to The Financial Chronicle)

into

open

the

COLORADO, SPRINGS, Colo.—
L.

D.

,with

Anderson

Copley

is

now

affiliated

and

Company,
dependence Building.

In¬

Merrill Lynch Branch

the

management

thew J. Smith.

of

Mat¬

require¬

eligibility

of experience in the securi¬

situte, registrants in the first and
year classes are required
to submit an essay of 2,000 words
on an Institute topic if they wish

than

second

lead, to point

to

security. That kind of problem they
responsibility for.
But when it comes to the advancing and expand¬
ing our economy, that is by and large the business
of Americans and the Federal Government can help

did

submit

not

an

by the deadline date (June
15, 1958) are not eligible to enroll

at

the

Institute.

1959

.

Such

1958

registrants who wislv to re-enroll
in the Institute for

expenditures will never be—our money,
money—will never be spent so intelli¬
gently and in so useful fashion for the economy as
will the expenditures that would be made by the

a

session sub¬

sequent to 1959 may write to the
Educational Director/ IBA Wash¬

ington office, for information on
meeting
re-enrollment
require¬
ments.
view

In

and

session with

shown

in

preferred

the

of

applicants carried
year,

the
the

list

from last

over

advance interest
1959 session, Mr.

Shepard noted, applications may
again exceed the available facili¬

Club

ties

this

year.

Official

the President seemed

application

being

partners and other seasoned per¬

organiza¬

mailed

office

always to bear these excellent ideas in mind!

member

pro¬

essay

our

IBA

who

Institute

Federal

of

Institute

the

Registrants in the first and
second year classes at the 1958

have to take initial and sole

sonnel

in

continue

gram.

for the national

answer

of age. .V

Effective with the 1958 In-

(2)

to do the things, as Lincoln said, that
people cannot do for themselves, such as providing

the National Press

the applicant must

or

be at least 30 years

way

of

only

member

forms

are

to the main
organizations.

Applications
for " branch - office
should be
channeled
personnel
through the member main office.

tions.

Investment

Banking

Registrants attend the Institute
week in the spring for three

A. C.

one

Announced
folders

on

the

7th

session of the Institute

of

scheduled
for the week of March 22-27, in
Philadelphia, are now being
mailed to member organizations
and to prospective registrants, it
was
announced
by William D.
Kerr, of Bacon, Whipple and Co.,
Chicago,
President,
Investment
Banking,

Bankers Association of America.

Institute

offers

velopment

upon completion of the
receive a Certificate of
Merit in recognition of their spe¬
cialized
training in the invest¬
ment banking business.
It is ex¬
pected that about 60 certificates
will be awarded at the gradua¬
tion exercises Friday, March 27,

years

WASHINGTON, D. C. —An¬

MIAMI, Fla. — Merrill Lynch,
Sponsored by the Association
Pierce, Fenner & Smith Incorpo¬ in cooperation with the Wharton
rated has opened a new branch School of Finance and Commerce,
office at 100 Biscayne Boulevard University of Pennsylvania,
the
under

pub¬

be

cant must have had at least three

Eisenhower

years

The Federal Government needs to

Investment

com¬

company's

at

Copley Staff

will

(1) Effective with the 1959 In¬
stitute, to qualify for enrollment
in the first year class, the appli¬

their own need is far more important
what the Federal Government does.

could say that

will

respects:

upon

annual

4.5% dividend rate.

Offered

Institute

quite clear that the decisions of 175,000,000
people and the way they make those decisions based

we

they

distribution.

for

ties business

We wish

where

ments have been altered into two

$500,000,we're talking

question and

Convention of

Annual

manuscripts

lished

It is

nouncement

convertible second preferred stock

the

Association

their

pros¬

that level.

but

prize for each of the

be presented to the delegates and

spending for all purposes
$77,000,000,000. or a figure in

the

one

classes.

the

rea¬
GNP (Gross

7th Annual Institute of
LA

Reynolds Metals Co. found the

which

a

with him.

(Special to The Financial Chronicle)

a

\

of

prizes aggregating
awarded
to
the
the winning Institute
be

attend

R.

Frank

Colby Thompson Opens

Reynolds Preferred

carrying

now

cash

will

In
addition, the
winning writers will be invited to

National Product) of

BELLEVILLE, 111. —Benjamin
O. Cooper is conducting a securi¬

\

brought out its

makes

that

estate

on

Philadelphia
University Campus.

three

talking within the

000,000 and

case-study problem

essays,

Federal

the

not

sonable future of

A

Three

last week.

and thus force money rates down
at this time.

is

ment.—From the

Cooper Opens

ties business from

Inc.

Burr,

legislative problems; corpo¬
underwriting and syndicating,

1,000

(Special to The financial Chronicle)

Board, if
it is to help ward off new infla¬
tion

it

rate

writers

President Eisenhower at

driver's scat just now.

&

Conducted tours of

much of it funneled off into the Federal Govern¬

Bianco

Coffin

and

Co.

and the

a

securities business from offices at

V.

&

planning.

private citizen, the taxpayer if he hadn't had so

with funds is rather

comfortably

Estabrook

Y.—Al¬
in a

bert

about rising cost of financing,

the

are

we

our

abundance of money seeking to go

to work in

Inc.;

about

The

books

trary

was reported that the company plans the sale
$5,000,000 first mortgage bonds. Proceeds—For con¬
struction program. Underwriter—To be determined by

of

bigger investment annually in public facili¬

a

Government

The Week's Roster

ings is not

;

-

Aug. 18 it

perity in this country. After all,

of the govern¬
ment's foreign exchange pool.

satisfied that the dearth of offer¬

-

Worcester Gas Light Co.

the national economy cannot expand at a
5% a year unless the Federal Government

because

holdings

On Wednesday, when the Jap¬
marked anese Government issue is due
by a virtual hiatus in the debt is- out, investors also will have an
i>ue market with Reynolds Metals
opportunity to look over 200,000
Co.'s offering of 550,000 shares of shares of common stock of United
convertible preferred stock mak¬ Controls Corp., of Seattle, Wash.
ing up the period's choicest oppor¬ On the same day, Southern Pacific
has $7,125,000 of equipment trust
tunity for investors.
But, people who are in a posi¬ certificates slated for bidding.
tion to judge the situation are
Thursday
brings
opening
of

of lack

tration—Planned for March 9.

myself, but I do not be¬
lieve that that question is really
the one we ought to be asking

being offered in

maturing

series

four

(jointly); The First Boston

Corp. Bids—Expected to be received on April 15. Regis¬

critic

purchase by American
"

for

extremely light.

consequence

and Salomon Bros. & Hutzler

Co.

A.—Well, I don't want to be

million of its

This week, in fact, was

a

Corp. and Eastman Dillon, Union Securities & Co,
(jointly); White, Weld & Co., Kidder, Peabody & Co,

ties cf all kinds?

a

(jointly); Equitable Securi¬

ties

who say

Tap

by the high rate of attrition at¬ four-five and
tending the U. S. Treasury's latest
block,
$15
million carries
the
refinancing operation, the govern¬
longest maturity and a 5 Vz% cou¬
ment and corporate markets ap¬
pon
rate against 41/2%
on
the
peared to have discounted the other three.
situation pretty fully in advance.
Proceeds will be added to the
Treasury

and Robert W. Baird & Co.

Forget, Mr. President!

rate of

bonds

the

determined

be

Q.—Mr. President, what is your answer to critics

offers

(4/15)

Light Co.

&

reported that the company contemplates

$14,000,000 first mortgage bonds. Underwriter
by competitive bidding. Probable
bidders: Halsey, Stuart & Co. Inc.; Smith, Barney & Co.

$15,000,000 of first mortgage bonds.

market next week for the
first time in some years when it

Certainly

Power

and

money

in¬

was

competitive bidding. Probable bidders: Halsey, Stuart &

Japanese
Government is
slated to come into the New York

the

it

the sale of

—To

(5/26)

Baft Don't

The

disappointed

12

Co. (jointly).

stock.

world might have been

Jan.

issue and sale of about

English firm by Aluminum Co. of
which had made a bid
for
its
authorized but unissued

However

May 26.
Wisconsin

(jointly); Kidder, Peabody & Co. and White, Weld &

America

Japanese Issue

Dillon,

Dec. 29 it was reported the company contemplates the

July 1 the Government announced that Kuhn, Loeb A
Co. and Kidder, Peabody & Co., both of New York, have

vestment

on

J

,

Power Co.

Stuart & Co. Inc.; Lehman
Union Securities & Co.

Halsey,

Eastman

(jointly); The First Boston Corp. and Harriman Ripley
(jointly); Kidder, Peabody & Co. and White,
& Co. (jointly).
Bids—Expected to be received

Virginia Electric & Power Co. (6/2)
was reported that the company plans the sale
of from $20,000,000 to $25,000,000 of additional common
stock.
Proceeds—For construction program.
Under¬
writer—To be determined by competitive bidding. Prob¬
able bidders: Merrill Lynch, Pierce, Fenner & Smith;
Stone & Webster Securities Corp.
Bids—Expected to

shares of capital stock (par

and

Weld

Jan. 5 it

record

Thursday, February 12, 1959

.

& Co. Inc.

York, and Bank of America National Trusi
& Savings Association. The Chase Manhattan Bank will
oe
the fiscal agent for the credit.
The amount of the
new financing involved is in the neighborhood of $250,000,000. The purpose is to restore government balancer
which have been reduced by the repayment of excessivt
short term obligations previously incurred.

application with the Federal Power Commission cover¬
ing 840,000,000 of additional financing. It is believed
that $10,000,000 of this new capital will be raised via a
common stock offering and the rest will consist of first

bidders:

Brothers

Bank of New

Co.

Gas Transmission

Texas

Probable

The Chase Manhattan Bank, The First National City

are

\

York.

.

.

Underwriter—To be determined by competitive bidding.

financial advisors to develop a financial

for the country. As a first step in the pro¬
gram a short-term credit is being negotiated between the
government in cooperation with the two investment
banking firms and a syndicate of commercial banks in
the United States, Canada and the United Kingdom
The three institutions which are to head this syndicate
program

000

bank

as

Chronicle

an

executive

program

for

de¬

officers,

and

program

the

features

Institute program in

added

to

the

Shepard and Co., Inc., Chairman,
of the IBA Education Committee:

Five

Forums open to
registrants: investment com¬
panies;
public relations;
estate
planning, current legal regulatory
evening

RAPIDS, Iowa — A. C.
Allyn & Co. has opened a branch
office
Bank

in

the

Merchants

Building,

Ravenscroft

Ravenscroft
own

in

National

Glenn

with

charge.

formerly

Mr.

conducted

investment 'business

in

Cedar Rapids for many years.

1958 are be¬

ing continued according to Robert
O.
Shepard, President, Prescott,

all

Rapids Branch

CEDAR

his

concluding day.

Several

Allyn Co. Opens

Cedar

Newman Adds to Staff
(Special to The Financial Chronicle)

COLORADO SPRINGS,

Colo.—

Maurice S. Farabee has been add¬
ed to the staff of Newman

and Co.,

Mining Exchange Building.

Volume

189

Number 5820

The Commercial and Financial Chronicle

r.

.

The

Indications of Current

week

STEEL INSTITUTE:

Week

•Indicated Steel operations (per cent capacity)
Equivalent to—
Steel

-Feb. 15

month available.

Month

Week

§83.5

or

month ended

or

Previous

Latest,
^

following statistical tabulations

latest week

Business Activity
AMERICAN IRON AND

(801)

that date,

.Feb. 15

§2,363,000

*2,288,000

2,111,000

Slab zinc

1,445,000

2,000
•

42

and

condensate

output—daily average (bbls. ol

gallons each).

•Jan. 30

.Jan. 30

Gasoline output

.Jan. 30

27,514,000

28,101,000

29,714,000

Kerosene

-Jan. 30

2.957,000

2,465,000

'3,080,000

.Jan. 30

14,972,000

15,009,000

14,593,000

12,543,000

■Jan.30
Residual fuel oil output (bbls.).
Stocks at refineries, bulk terminals, in transit,. In pipe lines—
.Jan.30
Finished and unfinished gasoline (bbls.) at.

7,600,000

7,779,000

7,056,000

7,497,000

197311,000

*192,883,000

204,559,000

stills—daily average (bbls.).

(bbls.).

7,122,335

8,311,000

8,256,000

-

(bbls.)-at.
Distillate, fuel oil (bbls.) at.
fuel oil (bbls.) at-

20,910,000

.Jan.30

21,388,000

186,482,000
26,057,000

96,745,000

.Jan. 30

Residual

100,402,000

126,056,000

,

Revenue

_

59,924,000

60,525,000

smelter

output all grades

NEWS-RECORD:
Total

U.

Private

.

.

,

582,636

*555,547

467,699

553,692

524,800

'.435,784

'"•'V 535,374

Bituminous

and

SYSTEM—1.947-49

Electric output (in

__

steel

85,389,000

'

182,733,000

107,877,000

125,952,000

144,106,000

111,388,000

21,822,000

00,858,000

30,494,000

28,816,000

8,550,000

8,005,000

7,015,000

521.000

442,000

447,000

■461,000

106

105

104

98

Electrolytic copper—

tZlnc (delivered)

Shipped
Stocks

342

—Feb. 3
Feb. 3
——Feb;,

6.196c

0.196c

6.196c

5.967c

$66.41

$66.42

ERNORS

1^40.17

$37.33

$66.41

$66.41

$43.83

$42.50

,

,

■

^/
29.600c

28.675c

28.600c

Feb.
Feb.

28.850c

29.025c

26.800c

20.625c

12.000c

12.000c

13.000c

13.000c

11.800c

11.800c

12.800c

12.800c

12.000c

12.000c

12.000c

10.500c

11.500c

11.500c

Feb.
Feb.

24.700c

24.700c

101.500c

11.5003

100.125c

98.000c

86.02

89.64

90.20

Feb. 10

Feb. 10

89.78

Feb.
FebFeb.
Feb.

10
10
10
10

93.97

93.67

94.71

92.20

92.20

92.79

89.78

89.64

89.78

83.53

83.53

84.17

Feb. 10
.Feb. 10

88.40

88.13

88.40

89.23

89.37

90.06

Feb. 10

91.62

91.62

92.20

I-

1

—

'

MOODY'S

BOND

YIELD

102.80

|

3.88

-ii

———

4.40

4.01

4.09

3.58

4.26

Group

,

4.22

4.26

4.43

4.44
4.90

4.53

4.55

4.47

4.46

4.41

4.30

4.26

Tin,

385.4

384.3

—Jan. 31

293,331

289,474

—Jan. 31

293,826

Jan. 31
Jan. 31

92

4.00

4.66
4.29

387.0

39G.7

241,750

292,534

1365,380
tt320,797

Production

(tons)

(tons)

244,049

91

tt55

82

OIL, PAINT AND DRUG REPORTER PRICE
1'J49 AVERAGE — 100

tt405,256

378,182

375,035

'

and

111.41

110.10

110.38

1,628,660

sales.

565,090

485,450

394,750

Other sales.

-Jan.17

2.563,620

2,695,130

473,130
2,195,750

1,349,890

-Jan.17

3,128,710

3,180,880*

2,668,880

"'Short

sales
Other transactions initiated on the floor—
Total purchases
total

.

-Jan.17

■Short sales
,

Other

562,100

549,150

491,330

43,000

40,400

Total

538,910

500,160

540,560

581,910

583,590
>

sales.

893,850

184,650

1,032,539
1,217,219

•

902,500

76.167d
•

:

99.345c

—

I

10.500c

$2.80380'
98.976c

89.449c
76.847d

$2.81322
92.692c

$35,000

$35,000

$35,000

$218,000

$220,182

$220,692

32.590c

32.590c

29.000c

29.000c

33.000c

29.500c

—

—

29.500c

33.500c

36.590c

$52,000

$77,000

$1.45000

$1.45000

$1.55000

$1.45000

$1.45000

$1.55000

$52,000

$1.45000

$1.55000

$2.00000

$2.00000

$2.00000

$26,800

$28,100

$24,700

$24,700

$26,000

35.250c

35.250c

35.250c

74.000c

74.000c

$2.25

$2.25

$2.25

688,846

009,570

621,704

594,393

514,480
94,915

534,846

94,263
190

175

332

$3,427,000

$3,369,000

$2,549,G05

.

IN

MANU¬

ASSN.—Month

of

December:

vehicles

of

number

IROM

S.—AUTOMOBILE

U.

SALES

of

passenger

of

motor

trucks

of

motor

coaches

137,740

191,780
915,514
1,107,294

1,166,760

carrying

value

Market
Member

750,035

4,249,GOO

806,440

666,190

705,310

-Jan.17

4,123,079

4,263,360

3,611,424

2,141,475

Production

4,929,519

4,929,550

4,316,734

2,893,145

Shipments

from
end

4,476,910

-Number of

1,821,340

948,903

9,354

35,357

1,811,886

913,546

2,456,705

$124,660,797

$131,390,700

Jan. 17

2,046,354

Jan. 17
Jan. 17
Jan. 17

6,905

1,965,142
8,707

2,039,949

1,956,435

$102,410,496

$101,409,733

$93,735,024

$40,765,537

.Jan. 17

492,000

494,960

596,790

195,840

.Jan. 17

492I0OO

494*960

5~96\790

1951840

.Jan.17

914,450

936,740

618,110

676,810

Customers' short sales
^/uswuimo

■customers'
Dollar

ouwi,

u«.vu—————

other sales

value

—

—-—

Round-lot sales by dealers—
Number of Bhares—Total sales

T

Short sales

.

Jan. 17

.

Other sales

Meats
All commodities other than farm and foods.

895,990

783,230

871,810

1,291,120

21,512,010

21,003,020

19,203,650

11,358,970

22,408,000

21,786,250

19,675,460

1,950,000

28,031,000

22,386,000

16,623,000

24,528,000

16,834,000

23,688,000

28,729,000

70

86

73

$1,086,452

$1,021,859

$854,969

cent)-

FINANCING
U.

IN

NONFARM

LOAN BANK
(000's omitted):

S. —HOME
of

Oct.

loan

150,420

.&-i

135,951

131,554

558,260

—

492,687
170,394

394,803

175,104

131,389

Individuals

»

323,500

296,072

321,176

Miscellaneous

.

562,783

479,045

391,857

$2,856,519

$2,596,008

$2,225,748

$114 ,687,956

$93,564,725

$99,735.39R

institutions

lending

Total

RYS.

(Interstate Commerce Commission)—

Net

railway operating

income

22 718,782

19,887,892

21,045,471

1.37 406,738

income

deductions

from

113,452,617

120,780,869

4

after fixed

Other

i

charges
charges

deductions

—

Dividend

118.6

.Feb.

90.7

*91.9

91.6

94.2

.Feb.

108.5

109.0

108.4

108.4

.Feb.

102.3

102.8

102.1

127.4

125.8

115,731,737

77,114,731

84,526,893

4

258,075

4,376,690

4,189,854

72,738,041

80,337,039

50 140,017

50,289,863

49,496,070

48 230,882

35,826,867

43,806,912

21,001,435

21,028,959

21,032,027

1,356,424

834,205

1,287,556

4.10

3.42

3.71

appropriations:

On

common

On

stock

preferred

99.1

127.3

108,945,566

96 770,694

Federal incomes taxes

119.3

119.5

5,049,132

132, 966,183

-

Depreciation (way <fe structure & equipment)

119.2

4,507,051

101 028,769

available for fixed

Income

440,555

income

12,650,090

.Feb,"

stock
,

.Feb.

127.3

Tflncludes 944,000 barrels of foreign crude runs. §Eased on new annual capacity of 147,633,670 tons
as of Jan.
1, 1959, as against Jan. 1, 1958 basis of 140,742,570 tons.
tNumber of oiders not reprrted since introduction of
Monthly investment Plan. tPrime Western Zinc sold on delivered basis at centers where freight from East St. Louis exceeds
one-half cent a pound. ttEleven days ended Dec. 31, 1958.




2,034,000

30,459,000

associations
Insurance companies
Banks and trust companies
Mutual savings banks

Income

—u. s. dept. op

foods

figure.

235,000

2,189,000

other collateral

(barrels)
month—barrels)

(per

OF

Savings and

Miscellaneous

Jan.17

-

♦Revised

105,071,743

383,000

"

'

Jan. 17

—

Commodity Group—
All commodities
Farm products
Processed

used

ESTATE

Total

Jan. 17

Other sales.

wholesale prices, new series
i '
labor— (1947-49 = 100):

on

Other income

OF MEMBERS (SHARES):

Total round-lot sales—
Short sales
sales

109,238,039

506,000

SELECTED INCOME ITEMS OF U. S. CLASS I

total round-lot stock sales on the n. y. stock
exchange and round-lot stock transactions

Total

195,570,176

105,866,136

—

.

Month of October:

Round-lot purchases by dealers—
Number of shares.

FOR ACCOUNT

bonds

mills
of

BOARD—Month

$59,718,097

2,471,409

Jan. 17

dealers (customers' sales)
orders—Customers' total sales—

(at

AREAS

1,388,699

1,832,249
$107,754,083

—Jan. 17
—

896,064

of December:

Month

Capacity

(customers' purchases)—t

1,148,000
261,828,027

(BUREAU OF MINES)—

CEMENT

PORTLAND

REAL

342,360

1,159,000

S

(barrels)

-Jan.17

Dollar value

U.

free credit balances—

of listed

-Jan.17

sales

4,515,300

124,000

346,000

276,665,190

in

borrowings on U. S. Govt, issues

2,682,265
751,670

-Jan.17

—

in banks

Member borrowings

for account of members—

67,824

146,000
357,000

23,590,000

hand and

on

accounts—

margin

debit balances

customers

Market value of listed shares

471,415

86,526

(000's omitted):

firms

Total of customers'

278,620

1,029,020

cars

STOCK EXCHANGE:

Credit extended to

659,935

Odd«4ot purchases by

*

89.935c

•
.

$2.80647

:

FACTORY

VEHICLE

Cash

993,710

-Jan. 17

-Jan. 17

Odd-lot sales by dealers
>
Number of shares

-

76.250c!

,

pound)

Total customers' net

STOCK TRANSACTIONS FOR ODD-LOT ACCOUNT OF ODDLOT DEALERS AND SPECIALISTS ON N. y. STOCK
EXCHANGE —SECURITIES EXCHANGE COMMISSION:

*•

£62.568
£62.179

-

90.206c
*

primary pig

(per

Stocks

.1

10.000c

£71.253

£72.932

(per pound)

As of Dec. 31

398,470

-Jan.17
-

Other sales

Total

1

•

12.000c

£74.342

74.000c

Member

320,170

-Jan.17

Total purchases
Short sales
'

v

12.000c
£74.884

$26,800

grade

Number

transactions initiated off the floor-

Total round-lot transactions
.

11.500c.

12.800c

$1.45000

Number

78,300

526,890

■Jan. 17

..Other sales

\

.11.500c

(per ounco)_—

Number

393,670

56,700

'an. 17

.

Total purchases
.Short sales
.

£72.327'

grude ingot weighted average

99%

NEW YORK

-Jan.17

Other sales,
Total sales.

-

13.000c

£72.168
£72.545

;

1,744,640

Total purchases—

't

£171.369

£174.023

£72.202

£72.164

grade (per pound—ounce ton)

FACTURERS'
Total

2,785,000

21.253c
-

12.800c

£71.851

pound)

(per

PLANTS

3,033.910

13.000c

12.467c

—-

'•'Nickel

Bismuth

FOR

3,030,260

£220.732

12.667c

25.114c

27.041c

-£220.994

£227.292

(per pound)

108.63

-Jan. 17

28.583c

27.927c

(per long ton)

—

Aluminum,

340,841

-Jan.17

28.635c

£230.101

„

=

(per flask of 76 pounds)
New York, boxed

Magnesium ingot

ACCOUNT OF MEM¬
BERS, EXCEPT ODD-LOT DEALERS AND SPECIALISTS:
Transactions of specialists in stocks in which registered—
TRANSACTIONS

134

QUOTATIONS)—

(per ounce, U. S. price)

MOTOR

ROUND-LOT

J.

Sterling Exchange—

Aluminum 99%

♦

6

M.

&

London

gCadmlum

INDEX—
Feb.

135

Dec.:

:

pound)—East St. Louis

Cobalt, 97%

Percentage of activity.
UnfUied orders (tons) at end of period

(E.

of

—

Antimony (per pound), bulk Laredo
Antimony (per pound), boxed Laredo
Platinum, refined (per ounce)
tCadmium, refined (per pound)
tCadm'ium (per pound)
;

NATIONAL PAPERBOARD ASSOCIATION:
+

141

144

320,210

'

U Antimony,

3.86

4.43
4.85

4.53

•

.140,706

RESERVE

refinery (per pound)—™—

Quicksilver

3.87

4.30

Feb. 10

MOODY'S COMMODITY INDEX™.

Orders received

FEDERAL

(per ounce)
(check)
New York Straits—:

Gold

3.79

4.90

——Feb. 10
Feb. 10
—Feb. 10

Group
Utilities Group-

Public

2.98

4.44
4.16

3.82

Feb. 10
Feb. 10

III

Railroad

Industrials

3.83

4.43

4.14

Feb. 10

_

II

—

THE

Sterling Exchange

—

A
Baa

OF

Silver, New York

98.25

Feb. 10
Aa

Silver

98.09

Feb. 10

—Feb.. 10

_

242,635
271,088

266,600

§§Zinc, prime Western, delivered (per pound)
tfZinc, London, prompt (per long ton)
ttZinc, London, three months (per long ton)

96.07

DAILY AVERAGES:

U. S. Government Bonds

107,015

142

;

.

PRICES

Silver,

Average corporate

120,111

138,026

PRODUCTION—BOARD OF GOV¬

Zinc (per

99.36

'X;

137,882

141,112

.

91.77

Baa

V

132,022
.

CONSTRUC¬

Common, New York (per pound)
Common, East St. Louis (per pound)—
ttLondon, prompt (per long ton)
:
1'tThree months, London (per long ton)

86.65

Railroad Group
Public -Utilities Group
Industrials Group

109,344

112,443

•

(AMERf-

(tonnage)—estimated
(tonnage)—estimated

t tThree months, London
Lead—

95.92

"

121,533

246,686

146

STEEL

Export refinery (per pound)
ttLondon, prompt (per long ton)

*

.

261,923

January:

94.32

U. S. -Government Bonds

283,913

'.293,294

196,510

,

I_

closed

Domestic

92.750c

85.54

246,341
'

267,204
.295,464

-

•

,

Copper—

26.000c

Average corporate

-

107,956,000

I 106,724

.

....

STEEL
TION)—Month cf December:

METAL

10.000c

24.700c

.

86.12

A

132,316,000
131,698,000

119,590,000

"■

SYSTEM—1917-19-= 1.09—Month

24.400c

Aa

142,372,000

106,697,000

HHH

—

i.

330,537,000

150,155,000

"""

Seasonally adjusted
Unadjusted

'

Feb.

;;

144,856,000

184,117,000

HI'
HI

^

CAN INSTITUTE OF

Shipments

-_Feb.

—

180,635,000

152,982,000

78,464

STRUCTURAL

INDUSTRIAL

;

Contracts

MOODY'S .BOND PRICES DAILY AVERAGES:

Aaa

124,341,000

205,160,000

161,294,000

;
;

„

(pounds)

(tons)
(tons)

Shipped

321

at

163,368,000

189,981,000

.

(tons) Dec. 31

Produced

Feb.

(New York)

542,035

1,616,446

168,401,000

*

322

99%') at.

925,266

598,734

1,951,081

.

__

(tons)

Hulls—

271

at

1,112,300

562,876

1,929,864

I

:

(tons)

5

;

Zmo <East St.. Louis) at.
Aluminum (primary pig.
Straits tin

Producced

8,120,000

DUN *
-Feb.

at

541,659

"

'

(tons) Dec. 31

12,289,000

,-at—

Louis)

(St.

.*

Feb.

Export refinery atLead

Stocks

'

^

""
—

Cake and Meal—

13,554,000

at

refinery

-Lead (Ne wYork)

Consumption

13.151,000

l

V

;

■

■

■

I

(pounds) Dec. 31

13,292,000

(E. & M. j. QUOTATIONS):

METAL PRICES

Ol'

~

Produced (pounds)

7

—

:

_

(pounds)

Feb.

(per IB.).

'

_

___

FABRICATED

—

COMMERCE—Month

(pounds) Dec. 31

Stock

140,204,000

f.Jan. 31

INDUSTRIAL)

10,629,952

PROD-

.

(tons)
(tons) Dec. 31

Produced

$322,937,000

.Jan.31

Pig iron (per gross ton)
Scrap steel (per gross ton)—

Domestic

$259,989,000
174,600,000

INDEX—FEDERAL RESERVE
■== 100
Jan. 31

PRICES:

COMPOSITE

AGE

$418,223,000

-Feb.

—.

SEED

Crude Oil—

-

186,810,000

000 kwh.)__.

INC.

BRAD STREET,

Finislied

,

AVERAGE

<COMMERCIAL AND

FAILURES

IRON

SALES

11,342,932

.

COTTON

OF

Seed—

Stocks

INSTITUTE:

EDISON ELECTRIC

5

86,270
72,123
166,660

v.

COMMERCE):

Shipped (pounds)

231,413,000

Pennsylvania anthracite (tons).
DEPARTMENT STORE

•

83,606

191,744

December:

Stocks

'

129,699,000

lignite (tons)—

AND

...Crushed

MINES):

S. BUREAU OF

(U.

coal

OF

Received at mills (tons)

,

$284,240,000

,

(DEPT.

(running bales)

SEED

Cotton

-

—.Feb.

COAL OUTPUT

•'

23,179,000

154,541,000

construction-

State and municipal

r

65,174

77,010
190,237

I

;

Refined Oil—
r-

construction.

GINNING

To Jan. 16

H.H. 550,532

—Feb.
.Feb.
.Feb.

:

Federal

.

of

75,503

UCTS—DEPT.

ENGINEERING

—

,

.

construction

S.

Public

_

f

(tons

(tons of 2,000 pounds)—
at end of period (tons)

COTTON

I 57,502,000

.

CONSTRUCTION

.

123,121,000

57,867,000

RAILROADS:
freight loaded (number of cars).
.Jan.31
freight received from connections (no. of cars)—Jan. 31

CIVIL ENGINEERING

r

Ago

pounds)

COTTON

'

A8 SOCI AT ION OF AMERICAN
Revenue

6,842,385
7,548,000
27,040,000

.

.Jan. 30

Kerosene

•

7,193,535

~

.

-

Year

Month

2,486,000

to

(bbls.).
output (bbls.).

Distillate fuel oil output

.

Previous

INSTITUTE, INC.—Month of

Shipments
Stocks

7,107,135
1)8,113,000

Crude runs

:

of that date:]

Month

AMERICAN ZINC

53.5

AMERICAN PETROLEUM INSTITUTE:

oil

are as

December:

(net tons)

ingots and castings

of quotations,

Ago

74.6

*

Crude

cases

either for the

are

Latest

/

.

in

or,

Year

Ago

*80.8

on

production and other figures for the

cover

Dates shown in first column

Ratio of income to fixed charges

...

tAverage based on the producers' quotation. tBased on the average
of the producers' and platers' quotations.
§Average of quotation on special shares to
platers. liDoinelstic five tons or more but less than carload lot boxed. §§Delivered where
freight from East St. Louis exceeds 0.5c. ♦♦F.o.b. Fort Colburne U. S. duty included,
ttAverage of daily mean and bid and ask quotation at morning session of London
Metal Ex change,
it Increase all stocks.
♦Revised figure.

The Commercial and Financial Chronicle

.

.

.

(802)

46

Cen tury

Chemical Fund

Stock

sale of shares last year was

Sll6,410,521, compared with $89,809,954

Shares

1957.

in

Plans Stock

Mutual Funds

Plans 2-for-l

Split

The directors of

proposal will be submitted for
approval to Chemical Fund's
stockholders at the annual meet¬

$110,000,245 and $55,857,934, re¬
spectively, during 1958 compared
with $84,348,582
and $40,018,289
in the previous year.
On Dec. 31, 1958, the trust held
common stock investments in 123

Madison Fund

Head

Split

United

\

Income

Fund's

net

as¬

Dec.
31
were
$206,656,561,
Century Shares Trust, a mutualequal to $10.84 a share, compared
fund specializing in the stocks of
with $138,034,833, or $8.24 a share
insurance companies and
banks,
a
year earlier.
The number 'of
plans a 3-for-l stock plit early
shares outstanding increased from
in April,
in order to bring the
16,742,495 to 19,066,007
unit price per share, to. a level
""\ United Acumulative Fund had

By ROBERT R. RICH

Chemical Fund,
Inc. have recommended to stock¬
holders a two-for-one stock split
of the fund's capital stock.
The

Thursday, February 12, 1959

in

more

Skeptical of

line

vestment

The

"Growth Slocks"

with most other in¬

to

sharp

..

in¬

$11.72

258,160,

in total net assets and per

creases

of

assets

net

companies.
reported;

fund

sets

a

or

$241,352,017, equal
share, against $139,-1
$8.99 a share a yea"

before.
The
number
of
shares
3, 1959. companies in more than 25 dif¬
share value during 1958...
1
%
Madison
Fund,
Inc.,
is
re¬
outstanding rose from 15,494,59
If approved, stockholders of rec¬ ferent industries. The five largest
(1) Total net assets ^increased
examining many of the so-called
to 20,587,105.
ord at the close of business March industry holdings were in stocks
40% to $61,740,479 on Dec. 3i from
"growth
stocks,"
and in some;
; United
Continental Fund re
26, 1959 will receive certificates of petroleum, utilities, steel, rail¬
$44,101,665 a year ago., J
•
cases redefining them as "glamour y.

ing to be held on March

.

'

share for each
The fund previously

for one additional

held.

share

two

split its stock
June, 1955.

-

for

one

-

in

price resulting from
the proposed stock split should
enhance the marketability of the
fund's shares by making them at¬
tractive to a larger number of in¬
the fund's directors said
recommending the stock split

vestors,
in

stockholders.
to effect the split-up,

to

In order

stockholders will be asked to vote
an

on

increase in authorized capi¬

15,000,000 shares of
50 cents par value to 30,000,000
shares of 25 cents par value. The

tal stock from

stock will be
borne by F. Eberstadt & Co. Inc.,
manager and distributor of Chem¬

cost of splitting the

ical Fund, Inc.

Inc., a mutual
fund founded by F. Eberstadt &
Chemical Fund,

diversifies its invest¬
of com¬

Co. in 1938,

panies.
Major

rubber

com¬

for

purchases

portfolio

Co.

Tube

&

Sheet

eliminated from

stock

Common

portfolio were American Metal
Climax; Diamond Alkali and Mis¬
sion Development Co. Decreases
in holdings were made in Crown
Zellerbach; Ford Motor; Goodrich
the

(B. F.); Monsanto

Chemical; Sun-

Mid-Continent Oil and United
Aircraft Corporation.

ray

ments over a wide range

panies in many industries which
the fund's management believes
growth
as
a
result of chemical research

will achieve above average

development.

and

Selected Amer. Slis.

Gains in Past Year
Trust,

Investors

Massachusetts

.

the nation's first and largest mu¬

which

the Florida

to

clines
return

of

when the

vehicle

institutional

ment

of

electronics,
similar

In

reported in.

as

in

the

by

of

National

$18,234,559,
768,850.

A

record

case, at that particular time, anyone
who didn't own the popular

volume

ofrsales

to

14,463,155

with

compared

$11,

Canada General
Assets

$100 MilHoiiiMark
vestment

amounted

1958

an

investment

sale of securities in the amount o

Investment. Com¬
,

>■; reported

on

from $12,416,889 in 1957. Th
funds also realized gains from th

1958 Sales Abo v e

each

dividends

—

up

a

Uiiit'd Funds Grou p

fuels,

exotic

Total income

interest—received

holdings,,in .invest¬

survey

Association

gas-filled
seeped out.

stocks.

"

substantially

panies.

reviewing

the

is

companies

recent

the

gas

This

counts.

history, he re¬
minded
careless
speculators
of
several events akin to the current
In

3,981,576 to 4,848,788.

greater than the 10.6%"average of

quite

earth

to

compared with
.of; 1957..;. This

as

end

,

subsequent
de¬
similar to the

the

were

the

at

.

days." In Mr. Merkle's dic¬
tionary, these might be compared
with a balloon ascension, and in

retrospect,

ported net assets of $37,747,411
equal to $7.78 a share, agains
$24,276,238, or $6.10 a share a
year
earlier.
The
number
o^
shares outstanding increased fro

capital

United
Science' Fund had ne
represents an increase;.of 39%.
assets
of
$73,895,748, equal t
during the year.
$12.39 a share, against $40,600,884
At the year-end more than 30%
or $9 a share a year previous. Th
of the Trust's shares were held by
number of shares outstanding in
fiduciaries, philanthropic organi¬
creased from 4,510,158 to 5,966,397
zations and other institutional ac¬

boom of ear¬

land

$28.75

was

$20.68

lier

and

Assets and Value

share

character

in

similar

were

a

gains distribution of 63- cents per
share resulting f r o m. securities
profits, the net asset V^lue per

end investment trust.

rise

?

Up 24%,

Sjiare Value. 26%

was

by the United Funds in¬
group
in 1958, as the

-

Canada

General Fund Limited

large American sponsored mutua
fund investing in the securities o

; total topped the 100-miIlion-dollar

leading Canadian business corpo
nearly: 30% over rations, reports sharp increases ir
the net asset value of its share?
reft
of his
senses.
Mr. Merkle f
1957, Cameron K. Reed, President,
Selected American Shares re¬
and total net assets over a year
listed these as typical individual
announced.
Marked -gains
also
ports total net assets of $91,065,855
■ /■',%'n \
instances, although emphasizing * were reported in netvasset value ago.
on Dec. 31,
1958, an increase of
The fund's report for the firs
that they were only some of the and total amount of
earnings and
52.3% over assets of $59,805,980 at
quarter of the present fiscal yea
many possible, illustrations:
/ , distributions.
S,--'
Dec. 31, 1957. Outstanding shares
(1) The Louisiana off-shore oil.
The number of shareholders in to Nov. 30 reveals that:
of 9,021,995 compare with 8,001,847
boom—when McDermott rose to the mutual fund
(1) The per share value in
a
group'exceeded
year ago.
After a distribution
creased 26% to $14.03 Irom $11.1
76 in 1957 and declined to a low;
of 26c a share from net capital
190,000 Dec. 31, ^representing a
a year earlier.
of 30 this year.
At the fiscal yeai
i
gain of about 45,009, for the year
gains in January, 1958, net asset
(2) The airline boom of some in contrast to the previous record end on Aug. 31, the Fund's share,
value per share was $10.09 com¬
were valued at $13.30.
years ago—when
American Air¬ gain of 25,000
pared with $7.47 at Dec. 31, 1957.
inj93£;Mr-;Reed
lines sold at 20 in 1946 and did
(2) Total net assets climbec

Rise to New

M. I. T. Made Giant

(2) After adding back

shares," according to Edward A.
Merkle, President of the closed-

1958 were
In
Mr.
Merkle's
opinion,
a
Armco Steel; Santa Fe Ry.; C.I.T.
stock acquires glamour when the
Financial; Commonwealth Edison;
price no longer has any relation¬
Florida Power & Light; General
ship to any foreseeable earnings.
Public
Utilities; Libbey-OwensGlamour shares are not to be conFord Glass; Eli Lilly & Co. "B";
fused with "blue chips," which
National Steel; Newmont Mining;
have a long-term record of per
Norfolk & Western Ry.; Pullman;
share earnings growth.
Republic Steel; Royal Dutch Pe¬
"There
is nothing new about
troleum; Seaboard Air Line RR.;
glamour in the stock market," Mr.
Southern Pacific;
Southern Ry.;
Merkle said.
"Over the past 1U
U.
S.
Steel;
and
Youngstown
years we have had several booms
quarter of

fourth

the

The lower

•

..

and

tire

and

road

Higlis

to

considered

stock Was

mark for the first time in any one

be¬

be

Sales

year.

rose

"

investment company, reports

tual

the year ended Dec. 31,

1958,
total :net assets of $1,432,816,211,

for

representing
outstanding,
est

shares
199,449

107,295,924
owned

shareholders. These

by

the high¬

are

figures in the 34history of the trust.
year earlier the trust had

year-end

year

A
total

assets

net

with 100,469,960

of $976,108,094,
shares outstand¬

ing and 184,215 shareholders. The
increase
end

in net assets

1957

The

nearly

was

over

year-

47%.

net asset value
$13.35, also a yearend high.
Including the capital
gain distribution of 12 cents per

on

per-share

Dec. 31

share

was

declared

Dec.

share asset value

pared With $9.72
increase of
Purchases

over

and

was

a

31, the
$13.47,

year

totaled 28c
of 45c

its

ago,

an

At Dec.

securi¬

ties, other than Government

secu¬

rities and short-term notes, totaled

31

cash

and

1.7%.

The

holdings in
steel

of

assets,

notes

corpo¬

of

2.9%,
largest industry
stocks were

common

10.7%, oil 10.4%, electrical
8.2%, metal (non-

electronics

&

ferrous) 7.8%, electric utility and
In the most recent

American

eliminated 15

quarter, Se¬

added

common

include

16

equal

until

this price again

and

stocks. New

Fruehauf

Trailer,
Atlantic Refining, Cerro de Pasco,

c

United

The aircraft manufacturing ;
lative,
ascension—when Douglas sold at
90 in

is

1954, a price which has not *
in the interim and

reached

been

at 60.

now

;

-

aluminums

Alcoa

sold

reached

a

at

136

in

—

(6) The uraniums
reached 25 in

gom

in

crease

net

during 1958,

'

a year

for

present rate of growth
of the Junds
should

assets

fund, net investment income
the three-month period \va?

exceed

$1

holders.
.i:. The

billion

by

1962," Mr. Reed declared,
Plan
retentions'-. continue

and

year.

"

the

retained and reinvested for share

"At the

equal

correspond

period a year ago. Three
months
earlier, total net ; asset,
amounted to $85,759,791.
:
In accordance with the policy o
ing

bringing the total to $559,651,737,

'

'

-

board

of

directors

.

elected Henry T.
served
was

gain, as reflected by' the sales
when Al- •
gain, of more than $26 lk million
1955 and is1 in 1958 over

—

President since the fun

organized, to Chairman of th

Board.

1957, while redemp¬

as

Vance, who ha.

William F.

President,

was

Shelley, Vice

elected

as

the

FUND

Edison, Mead Corp., Phil¬
lips Petroleum,
Sinclair, Cities
Service, Dow Chemical, OwensCorning Fiberglas, J. C. Penney,
International Paper, Bell & How¬ looking for the ingenue of today
who will be the star of tomor¬
ell, Charles Pfizer, Minneapolis
Gas, and Consolidated Edison row," Mr. Merkle went on. "To
(N. Y.)
Increases in prior stock put it in financial terms, we be¬
lieve that the selection of elec¬
holdings include Monsanto, Sperry
Rand, RCA, Standard Oil (Ind.), tronics, space-age, nuclear power,
American Viscose, Bendix Avia¬ and similar stock issues requires
We have been
tion, International Harvester, and particular care.
fortunate at Madison Fund to be
Container Corp.
able to find under-valued defense
Eliminated from the portfolio
were American Natural
Gas, At¬ stocks, 'blue chips' and growth is¬
,

lantic

'5'

M
,;j| i\

cox,

cals,

Jones

Total amount received from the

reelected

and

two

new

director.

Minerals

&

Chemi¬

Laughlin, Kansas
City Southern, National Dairy,
Neptune Meter, Ohio Oil, Socony,
Southern Railway, Trane Co., and
United

stocks. Send for

prior stock holdings include sales
of Standard Oil
(N. J.), Parke
Davis, Public Service of Indiana,

a

free

booklet-prospectus by
mailing this ad to

Established 1894

Reductions

Commonwealth

in

Edison,

shown

us

CUSTODIAN

spec¬

year.

FUNDS

Now With Walston Co.
Find out

(Special to The Financial Chronicle)

with

Walston

-■

»

-

-

-I.

■

*

about this series of Mutual Funds

vestment in American

Inc., 265t
He was pre¬
viously with Reynolds & Co.
&, Co.,

"

t-

g\

..

industry.1

H. E.

a

BOND SERIES

-

UTILITIES SERIES

,

at

MENLO

PARK, Calif.—Mortonhas rejoined Licht¬

E.

securities business from offices

man, Mong
St' ee+
TT°

817

City.

PREfERRED

INCOME SERIES

,

STOCK SERIES

(Special to The Financial Chronicle)

Ward, Jr., Opens

Harry E. Ward, Jr. is conducting
a

'

I

-

"

COMMON STOCK SERIES

Montgomery Street.
-

now

seeking possible growth and income through in- .<?>i

FRANCISCO, Calif.—Her¬
bert W. McGuire is now affiliated
SAN

Rejoins Lichtman, Mong

Credit.

Name-

Address-

have

capital gains through the
The key is selectivity."

tacular

National Gypsum and Commercial

ST., NEW YORK 5




Aircraft.

Kroger,

which

sues

Get the facts on

&

vesting in "growth"

CALVIN BULLOCK, LTD.
ONE WALL

Coastline, Babcock & Wil¬
Emhart Mfg., Ingersoll Rand,

International

A mutual fund in¬

new

tions increased about $4 million.
President.
v
quite obvious that glam- i; The ratio of cash-iris to sales con¬
our is a perishable item, as many
"At the annual meeting of share
tinue to run less than 16%, Mr.
of yesterday's film stars might at¬
holders, the board of directors wa.
Reed pointed out.
test.
At Madison Fund, we are
"It is

Detroit

,

BULLOCK

ha.

to

or

15.

now

assets

to $91,060,283 from $73,556,

279 at the end of the

before.

when

1956

of 60 this

low

24%

Accumu¬

United
Continental
and
United Science—had a 63.6% in¬

issue, sold at 20 in 1951 and did (r the
not exceed this figure until 1958.
The

V

.

the group-

United

compared with $342,170,115

(4)
The drug
stocks — when
Parke-Davis, as a representative

(5)

funds in

Income,

"

*

Y

.

four

The

1955.

v.

aviation 6.2% each.

lected

not

(3)

stocks rep¬

common

95.4%

bonds

rate

A distribution

share.

paid in January, 1959.

was

stocks

of

a

share from realized prof¬

a

resented

percom¬

38%.
sales

•

said.

Income dividends declared in 1958

Fifth

Lichtrtian

& Co., 1139 Chestnut
Tp^ntly been with
Avenue, New York
J, B. Hanauer & Co.

FRANKUN CUSTODIAN
64 Wall Street

•

FUNDS, INC.

New York

5, N. Y.

j:

Number 5820

189

Volume

.

.

.

The Commercial and Financial Chronicle

added to the board. The new

were

directors,

who

Wellington Fund

In a progress

report of the fund's
six-year history, note was made
of these elements in the Canadian
economy

growth

;

L

Population

-

1952.

„

Corporate
Common

Net

$1.3

(Ml.)

Profit

Stock

$31.4

$23.9

figures
:

increases

noted

above

'.stated, "it is significant to note that
the total government debt between
1951 and 1957 registered a net decline from $ 15.3 billion to $15.1

*

ijbillipn. Thus in Canada we see a
;
picture of economic progress on

"one hand, and strengthened gov"?erhihent financial position on the
The

j'
General

Canada

■

V''

■

Increase

AA.1;

Increase,

v

•

Dec.

fund

stock

holdings in Algoma

stantially its

Steel Corporation

Limited, Cana¬

dian Oil Companies Limited, Britash Columbia Power Corporation,
and Shawinigan Water
Co.

and Power
:'f

v.

Delaware Income

Fund Assets
corded
in

sets

Fund

re¬

increase in net as¬

53%

a

»

Up 53%

Income

Delaware

its fiscal year ended

Nov.

:aaf 1958, according to the Fund's
.^annual, report.
» :
v.. Assets—boosted by sales of new
shares and market appreciation of
.

„

.

.

portfolio securities — climbed to
.$3,771,426 from $2,459,119 a year
lago.
Net asset value per share,
■after a special capital gains dis¬
,

of

tribution

seven

cents

rose

to

$9.56 from $7.68.
paid out
from
-

a

The Fund also
total of 48 cents a share
investment

net

income

in

the 12 months,
r;

shares outstanding also increased
during the period. Some 1,800 in¬

institutions

and

394,602 shares at the
tend, compared with
holders and 320,255
standing on Nov. 30,

%

''

owned

fiscal year1,600 shareshares out-:
1957:

of Delaware

bulk

The

Income

Fund's assets was spread over 62
securities with 78.07% invested in
r

'

.

:-Increase

Funds

shares
outstanding
climbed 256% from Nov. 30, 1953.

cember from

At the

gain realized

in¬

on

vestments.

common stocks. W. Linton Nelson,
President, told shareholders that

to

*

in

~

Affiliated Fund

be

announcement.

noted

that

there

increasing

an

-

the

•

months

slightly

since

in¬
the

than 12
1958, total

more

Jan.

1,

Series
increased
by more than
$20 million, reflecting market ap¬
preciation and new purchases by
investors.
During
this
period
shareowners

28,000.
National
all

rose

from

Growth

common

23,300

Stocks

to

Series

stock fund—has

its objective growth of capital
and income over the long-term.
as

Special consideration

is given to
securities
of
those
corporations
actively engaged in newer tech¬
nological developments. Portfolio
companies
are
active
in
such
fields"

as

tronics,

atomic

energy,

elec¬

rockets, pharmaceuticals,

chemicals,

Common

stocks

95.5%

of

rate

a

assets

at

Dec.

accounted

for

lnvestors'

net

National

reported,

and

continued

ued

in

31, Mr. Randolph
National Investors
the
substantially

a

number of years. The
on to say that "the

nation's
firm, and contin¬
in the long-pull

seems

confidence

glass,

machinery,

New

the

close

principal.

During the fourth quarto* of
1958, investment positions Wfere
increased by the purchase of Na¬
tional Lead; ShamroCk Oil &
Gas,
Western Casualty & Surety,

Owens-Corning Fiberglas, South¬
and Black & Decker.

land Royalty

of

its

fiscal

year,"

out With

a

preferreds

12.85%
and

The remaining
cash and

tions

7.89% in bonds.
1.19% was held in

Machinery,

constituting

9.18%

represented the
Fund's
largest
single
industry
holding on Nov. 30, last. House¬
hold followed close behind with
of total resources,

8.92%;
8.72 %; *

railroad was third
automotive next

with
with

.8.47%; and 8.26% was invested in
steel.

Other large industry hold¬

ings included building, 8.16%
resources;

of

and steamship,

3.98%.




sale" of

Diego Gas & Electric, Addresso-

graph-Multigraph,
craft,

United

Air¬

Petroleum,

Amerada

and

Minnesota Mining & Manufactur¬

ing.

,

DIVIDEND NOTICES

J. I. Case

Company

;

(Incorporated)
Racine,

Wis.. February 9, 1959
*
A
dividend of $1.75 per snare on.the 7%
Preferred stock and 11.375 cents per-share on
the Q\'2% Second Preferred stock of this Com¬
pany has been declared payable April 1, 1959,
to holders of record at the close of business.
March 12, 1059.
'
.

*

T.

NEWMAN,

Secretary.

AMERICAN
CAN COMPANY
PREFERRED

STOCK

February 3, 1959 a quarterly dividend
of one and three-quarters per cent was de¬
clared on the Preferred Stock of this Com¬

On

pany,

of

record

at

the

close

of

business

hold

able

March

13, 1959. Transfer books will remain open.
Checks will be mailed.
t1.
.

-

-

.

a

ALUS-CHALMERS

investment

of

example, operating
amounted

to

46

COMMON

oper¬

expenses to net
In
Fiscal
1958,

sets.

as¬

for

expenses

cents

per

$100 of net assets, compared
$2.00 in fiscal 1938.

the Common Stock of

Company, payable

on

stockholders

to

the

March 2,
record

at

1959.

on

February

GEORGE SELLERS,

I

DIVIDEND No. 139

on

of

close of business

16,

—MFG. CO.

ratio

the

quarterly dividend of 60i

share

the

information and

ating

regular

per

men

of

%

JOHN R. HENRY, Secretary

.

(3) to make substantial reduc¬
in

I46th Common Dividend

1959

sources

tions

BAYTONaOH)©^*^-

:

.

The Board of Directors has declared

(2) to widen contacts and open
new

AND LIGHT COMPANY

•

(1) enabled the Fund to attract
and

THE DAYTON POWER

payable April 1, 1959 to Stockholders

,

Secretary

February 6, 1959

A

quarterly dividend of twenty-five
(25c) per share on the Common
Company has been de¬
clared payable March 31, 1959 to
cents

Stock of this

shareholders of record at the close of

PHELPS DODGE

business February 27, 1959.

with

This

that the share¬

means

4.08%

PREFERRED

DIVIDEND

CORPORATION

No. 19

A

holder

with

vestment

$10,000

paid

in¬

$46

a

his

as

total expenses in 1958.
for

(Fees

management, custodian,

dividend disbursing
transfer

paid

agents,

$200
in

for

agents,

etc.)
the

1938.

regular quarterly dividend of one
dollar and two cents ($1.02) per share
on the 4.08% Cumulative Convertible
Preferred Stock of this Company has
been declared, payable March 5, 1959
to shareholders of record at the close

of business

February 20, 1959.

Transfer books will not be closed.

He

A. D.

Dennis,

same

Secretary
February 4, 1959

i

The

Board,

declared

a

of Directors haS

first'quqrter dividend

of Seventy-five Cents {754)
share

on

the

per

capital stack of this

Corporation, payable Match Iff,
1959 to stockholders

M. W.

of record

URQUIIART,
Treasurer.

February 5,1959

CONTINENTAL

BAKING

COMPANY

Preferred Dividend No. 81 l

;

r

The Board of Directors has declared this day a quarterly dividend
*of $1.37|/2 per share on the outstanding $5.50 dividend Preferred
Stock, payable April 1, 1959, to stockholders of record at the

UNITED FRUIT

close of business March 13, 1959.

COMPANY
Common Dividend No. 157

Common Dividend No. 56
The Board of Directors has declared this

regular quarterly
dividend, for the first quarter of the year 1959, of 55d per share
on
the outstanding Common Stock, payable April 1, 1959, to
day

a

holders lof
stock
ness

at

record

the

March

close

of

such

of busi'

13, 1959.

The stock transfer books will
not

be closed.

TREASURER

February 5, 1959

A dividend of 62Vi 4 Per

share

on

the .common

239th

stock of this

Corporation
has been declared payable
March 16, 1959, to stock¬
holders of record at close
of business

February 27,

1959.

WILLIAM FISHER

retail, 7.25%; advertis¬

ing, 6.33%;. entertainment, 5.51%;

reduced by the

were

Standard Oil of New Jersey, San

^

investment in

receivables."

elimi¬

were

and Smith Kline & French. Posi¬

DIVIDEND NOTICE

he

"Delaware

; on,

positions

through the sale of Gillette

February 20,1959.

"Thus* by

Incom e
Fund's portfolio had been rounded
went

order

itt

metics stocks at 9.3% and electric
cal and electronics stocks at 8.5%.

L.

York.

service

metals, petroleum and rubber.

during the
period management
especially in view of exist¬
ing and anticipated market condi¬
tions, that a sizable investment in
prior securities was in line with
the Fund's objective: highest pos¬
sible current income without un¬
risk of

Next

equipment Stocks fct
11.3%, miscellaneous manufactur¬
ing stocks at 11.0%, drug and cos¬

saw,

due

15.0%.

DIVIDEND NOTICES

Growth has brought the follow¬
ing advantages, according to the
management:

of National Growth Stocks

assets

at

was

than double that in 1957.

more

Half-Billion Mark

in

growth stocks on
part of American investors.
In

and

basic growth trend of the

Exceed

at

office

nated

economy

"

the

Mr. > Simonson

terest

stocks
were

Investment

Investors' history by a
margin, according to Fran¬
cis
F. Randolph,
Chairman.
In
dollars, the gain was $32,068,245.
According
to
Mr.
Randolph,
growth through the sale of new
shares accounted for $4,909,196 of

passed

making

appears

the highest in

year-end, oil stocks rep¬
the
largest individual
at 15.8%, fol¬
public Utility

National

amount

stock

and

group of holdings
lowed closely by

wide

this

business

National

Series

mutual funds.
'In

were

resented

fully invested position it has main¬

Net assets of Affiliated Fund,
Growth
Inc. were well past the half bil¬
$50 million lion mark at the end of 1958, two
on Jan.
15 when net asset value
months after the completion of its
totaled $50,197,816. The announce¬
25th Anniversary year. The final
ment
was
made
by
Henry J. 1958 figure was $510,975,957.
Simonson, Jr., President of Na¬
Primarily
a
common
stock
tional Securities & Research Cor¬
fund, Affiliated ranks fifth in size
poration, Sponsor and manager of among all investment companies,
the. National Securities Series of
first among those
headquartered

of

year-end and

chairman went

$254,401,335

Assets

51.8% in 1958 to $94,001,772 at the

tained for

Cross $50 Million

Stocks

Net assets of the fund increased

A 30.6%

Nat'i Growth Assets Assets Now

—an

The number of shareholders and

dividuals

and

years

$858,979,373
604,578,038

___

_________

increased, sub¬

also

five

•

eliminated.

were

aged

sales, together with

31,'1958.
31, 1957

Ddc.
-

commitment in Pacific Petroleums
The

total

to 218%.

'

holdings in British Colum¬
bia Electric and Canada Safeway

Ltd.

earlier,

year

the

jump in the total num¬
ber of Managed Funds sharehold¬
duced Wellington Fund totals of
ers
was
reported for 1958—from
over $850 million at year-end. The
18.755 to 24,500. Over the 5-year
comparable annual figures are as
fiscal period, the gain amounted
follows:
>

calta Petroleum Limited. The pre¬
ferred

$ 3,986,211

—

increases, in securities values pro¬

quarterly

common

a

above

Nov. 30, 1957—a 26.4% rise. Man¬
—

The; record

' *

Shop & Save (1957) Ltd., Stein¬
berg's Limited and Western1 De-

the

figure

.

ireport revealed these additions to
•the portfolio: Northland Utilities,

and

lion

$ 22,930,292

44.4% Gain

Sharp gains in net assets shares
The asset value of each share of
outstanding, number of sharehold¬ National Investors Corporation,
ers, dividends paid and sales en¬
the
growth stock fund of the
abled Managed Funds, Inc. to set Broad Street
Group of Mutual
new records in virtually all cate¬
Funds, rose to an all-time high Of
gories during Fiscal 1958, accord¬ $11.85 at the end of 1958, accord¬
ing to its annual report.
ing to the annual report. This was
On Nov. 30, net assets of the
up from $8.62 12 months earlier
nationally - distributed
mutual and meant an increase of 44.4%,
fund group totaled $69.1 million,
taking into account the 60 cents
43.1% higher than the $48,3 mil¬ distributed to shareholders in De¬

The-month of December con¬
earlier.
;
tributed to the record total with
Major contributors to the rise
"sales of nearly $11
million, an in net
assets during the year were
increase, of almost $4 million over
Paper Shares — up 73.9%; Metal
December of the previous year.
Shares—up 51.3%; and General
The
December figures
are
as
Industries Shares—up 45%.
follows:' "
-v,
'/> :
.Shares outstanding at the fiscal
: r-1
1958
$10,967,286
1958 close came to 22.1 million,
December 1957—
6,981,075
compared with J7.5 million on

!

Limited,

„l
d.yOO J7 Ibtdl lcdf

for

prices appears to be warranted.
No change in the fund's overall
investment position is planned Or
contemplated," he added.

.

ress but they are typical, the re-'
'port-said.' ''With these impressive
figures as a backdrop,'' the report

as

;

-

IQCO r,1*

223%

but a few of the signposts of prog¬

-other."

.

.

■

$118,694,651
1957; _—_-i'—
95,764,359

•

are

'"•<

follows:

.are as

-------

.

The

an

over
23% compared
with* 1957. The comparable annual

^' 258

Industrial Production Index
233
284
Retail Trade (billions)-.—; $11.3
$14.7
Gas Production (bil. c.f.)
6.6 *
17
Oil Production. (mil. bbls.)_
611;'?>'. 180
Oil Reserves (mil. bbls.)— 1,740 ,
4,800

■

30 years of

over

increase " of

$1.7

•

173

Indfex__

the

Wellington Fund's history, dnd

16.9

14.4—

(millions)

Nat"I Product

Gross

'$ll8 million, the highest for

over

any year, in

195-7

,

Value Shows

Record

at

established a record, according to
Joseph E. Welch, Executive VicePreisident. 1958 sales amounted to

~

.

' V

•

New Records in

outlook

National's Share

; Wellington: Fund sales for 1958

which have spurred the
of business during this

period:

Managed Funds Set

Sales

prominent in

are

Canadian business life, are Ray E.
Powell and Burnham L. Mitchell.

47

(803)

Consecutive

Quarterly Dividend
A dividend of fifty cents per share
on

the capital stock of this Com¬

has been declared payable
April 15, 1953, to shareholders of

pany

record March 13, 1959.

C. Allan Fee,
Vice President and Secretary

EDWARD D. TOLAND, Jt.

Secretary and Treasurer
Boston, Mass., February 9,

February 5,1959

1959

The Commercial and Financial Chronicle

>

Thursday, February 12, 1959

;

,

(804)

4Z

Consumer Credit

BUSINESS BUZZ

Gains Forecast
on

Vice-President-economist of Ben¬

Finance System

eficial

Capital

Iron the Nation's

3 >/4% INTEREST

You

Behind-the-Scene Interpretations

IF DIRECTORS CONTINUE

why

TO

j^|^,|3redit this

APPROVE THIS RATE.

=2)

WASHINGTON, D. C.

tradi¬

Senate,

States

United

The

—

tionally the more liberal branch
Congress when it comes to

of

spending the taxpayers' money,
has gotten off to a fast start.
Before the end of the session,

probably sometime in the sum¬
mer, the taxpayers are~ likely to
be dizzy from the spending

C

over¬

Democratic

whelmingly
trolled

this

which

headlines

appears

g r e s s

o n

con¬

One

a

cost

would

housing proposal. Just 24 hours
later
on
the following night,
the Senate

a $465,000,000
construction bill.

passed

This

brings

question
is going

the

up

President

the

what

of

upon

deficit that looms
not only this year, hut

the

©f

emphasize

to

do

big

ahead,

some

This also brings up the ques¬

Why is the Senate more
liberal spenders than the House?
The fundamental answer is: The
members of the House have to

usual

for

every

be

to

the

years

two

two

every

six

is

not un¬

spending
conservative

liberal

a

Senator

a

preceding elec¬

if
to

tell the American people that

Democrats

the

continue
dollars

<

going

are

billions of
each year than is

spending

more

coming into the Treasury, then
Congress should have

the

same

the

courage

which

taxes,

more

staggering, they
The

already

are

are so

has

House

a

grave

responsibility on its hands to
either help hold down

spending,
and tell
the people of the country: "We
need some more tax money to
or

have

the

courage

bills

the

meet

which

are

we

into

postal

rates

"Think

labor

passed, but any legislation that
be approved will be con¬
troversial. There is also a strong
afoot by labor to shorten

move

to increase
the
minimum
pay.
Congress
should do something about the
the work week, and

Aid to Small Business

The Senate Select Small

Committee issued

ness

telling what it
small business
through small business legisla¬

a

few

days

ago

the

act

1958

age

space

Texan

to

wants

greatly aiding

as

"overcoming

in

business

which

handicaps

competitive

inherent in their small size."

are

of

Lack

capital has held many
since

back

businesses

small

World War II,

but the Commit¬
has
considerably. Fur¬

feels that the handicap

tee

diminished

believes that the
will help small
companies to start up over
it

thermore,

setup

f.

.

.

,

,

.

companies

investment

minimum of $300,000 of

a

small

must

and surplus.

capital

companies

put

can

If
up

$150,000, then the Small Busi¬
ness Administration can lend up
to

50% of the capital, thus giv¬

ing

is pressing his own

least $300,000 to hang out a sign,

civil rights

legislation.
Senator

Johnson

Northern

investment

an

company

realizes

machinery

cities

the

captured

been

the

Paul

given
H.

before

Douglas

New Deal days. Neither he nor
his fellow Texan, who runs the

recently.

Witnesses

cluded

least

House,
*

Rayburn,

sors

lose this big Northern

and

to

wants

Sam

Negro

vote

which

is

bigger

and

bigger

each

There

that

appears
once

reaches
,
'

a

to

be

civil

growing
no

year.

the

bill

Senate

or House, it will pass, simply
because it is big political bait.

Too Many Parties

Joint

at

of

Economic

a

under

a

temporary debt ceiling

Congress still has not gotten
down to its work load. After the




funds

to

largely

as

as

ceiling of $283,000,000,000.

Therefore,with

a

SAN

$285,000,000,000

&

public debt estimated for June
it

30,
will

ceiling
the

the

for

asked

borrowing

impact

on

debt

Beeause of
and

the

San

the interest

Antonio

ther

Hotel.

Federal

Texas—Bache

branch

San

to

rates of

Antonio

California

in

country.

is

this:

by

"The

of

rate

economic

after

four

he

was

N.

Y.

to

J.

the

Treasury

on

nington Drive.

in¬

the

at

32

opene

Pilgr

management

0

James J. Regan.

TRADINC MARKETS

Botany Mills

National Co.

FOREIGN
20 BROAD

the

&

Co. Inc.

Southeastern Pub. Serv.

United States Envelope

SECURITIES SPECIALISTS
STREET

•

TEL: HANOVER 2-0050

NEW YORK 5, N. Y. N

TELETYPE NY 1-971

LERNER & GO.
Investment Securities

19 Post Offict

debt, brought some
thought-provoking observations

Square, Boston 9, Mass.

HilllHlliiy^ll mm l.w>'uyL»

Teletype

Telephone

in his statement to the Commit¬
■'

$283,-

office

under

W. L. Maxson

management

tee in view of the colossal

D. Andrews & Co. has

branch

Street

Morgan Engineering

Carl Marks
of

a

Opens Branch

ANDOVER, Mass.—Ed

Hey wood-Wakefield *'
.Indian Head Mills
1

Gable. Jr., Assist¬

the

gar

■

and

President

Secretary

Andrews

American Cement

Secretaries.

Charles

0

Carl

1

Treasury's Problems Aired

ant

Shoppin

direction

Lowenstein.

G.
securities

—

Eisenhower's cabinet and assist¬
ant

under %he
M,

NORTH

also

dozen profes¬
of

office at the Northshore

years

economics, industrialists

members

Wainwright Branch

Carroll

Ostberg is conducting a
business from offices at 39 Ben¬

^demands for funds exceed avail¬

principal

a

PEABODY, Mass.—H. C. Wainwright & Co. has opened a bran

recently returned

where

ROCHESTER,

growth and the extent to which

New

Center,

C. G. Ostberg Opens

Treasury officials

is

firm.

Gun-

in the

engaged in the securities business.

policy of the Treasury
Department on interest rates as
forth

Greenberg & Co.

Greenberg

the

in the firm's

The

set

expan

busines.

as

:

Mr. Stern has

tremendous

a

ANTONIO,

fice will be located

Treasury,

the

by

has

will

credit

grows.

Form

Co., members of the New York

the ap¬
pointment of William Stern as a
registered representative. His of¬

borrowing

of

needs

during

was

of

optimism

of

Stock Exchange, announce

Congress

new

legislation.

tremendous

Government

the

that

is obvious
be

healthy one:

repayment

consumers

use

Julien

With Bache & Co.

to

debt

of

record

the recession

[This column is intended to re¬

operating

already

is

overall consumer

EAST ORANGE, N. J.—Green¬
flect the "behind the scene" inter¬
pretation from the nation's Capital berg & Co. has been formed with
and may or may not coincide ivith offices at 573 Main Street to en¬
the "Chronicle's" own views.~\
■
gage in a securities business.
J

of the public
,

continue

will

We

our

porary

30

the

a

$288,000,000,000.
The tem¬
ceiling will expire June
the so-called permanent

of

.

done

be

possible from true savers rather

substantial attri¬
tion, and thus is resulting in
additional
bill offerings.
The
Treasury

the

their

.

must

be postponed.

cannot

secure

of

refunding,

finds

thinks

which

rowing
and

consists of
a
weekly sum of $2,000,000,000
Treasury bills, but also $15,000,000,000 of maturities in Febru¬
ary, $4,500,000,000 in May, $13,500,000,000 in August and $9.000,000,000 in November.
not only

saw

He

credit picture to be a

order to reduce the inflationary

sup¬

are

ported by the Federal Reserve.
Government borrowing is bor¬

ing operations this year, one of
the
biggest of all time.
The

February

swing, back, to. hard goods as re¬
placement needs are felt.'

potential of our financing oper¬
ations during a period of rising
economic activity."
?

is¬

maturing

issues

new

nor

sues

Committee

have

they formerly did.

than from commercial banks in

neither

which

in

surprised some members of
Joint Committee when he
outlined the Treasury's refund¬

doubt

rights

the floor of

that

impressive with
payment .slowdowns and repos¬
sessions limited generally to areas
of.
concentrated ; unemployment.
The average consumer not only
kept up with his payments but
continued to buy, contrary to th
expectations of some economists,
Dr. Neifeld pointed out.
There¬
fore, since most credit ratings re¬
main
unimpaired,
Dr.
Neifeld

Chairman

(D.-Ill.)

the

Speaker

will have to operate. Our
borrowing, just like that of any
other debtor, will continue to be
done in a market environment

Some pertinent testimony has

most

in

Negro vote majority during the
?

at

"Ready for Business."

Democratic

though,

warns,

$6.5 billion more on services. Dr.
Neifeld thinks the pendulum will

ury

ly

The

and

rates

availability in which the Treas¬

the

course,

interest

of

[See page 10 for
Mr. Gable's statement in detail.J
The Assistant Secretary mild¬

refunding

set

terms
credit

the basic environment in

America.

in

money

the Presidency so much that he
'

He

cut

able savings will, of course,

and child

for each man, woman

.

Under this act, small business

paid-in

this

at

described

Committee

The

tion.

Presidential nomination

time, that he speaks out two or
three times a day on subjects

Busi¬

report

a

had done to help

have

the

M. R. Neifeld

are

During the recession consumers
back
hard
goods purchases
by $4.5 billion, though they spend

angle a

be carrying the conservative
bit too far, B. J.?"

may

we

000,000,000 public debt. This is
equal to 63% of the total gross
national product. It is also an
amount equal to more than$1,600

will

Incidentally, Senate Majority
Lyndon B. Johnson is
so
busy eying the Democratic

Leader

The

Now, says Dr.
Neifeld, these

■

$2.5 billion more than in 1957 on
soft and non-durable goods and

legislation will be

reform

the country.

Johnson Campaigning

rights.

1

Pick-Up in Hard Goods

Federal

the

It would seem that some

new

ranging from

1 1

increased

will be

whether

financial

approving."

civil

i

1

will be
whether

statehood,

voted

small

heavy.

leadership in the Senate

the

and

taxes and

raise

to

—

ticket items

opportunity to

pass up an

in'

they will not buy the same big-

warehouses all over the country.

never

1 .i

ready and able to enter the credit

ad¬

President's

the

IT*

market.

visers have been urging him to

of

new

consumers

support price program which is
costing the taxpayers more and
more as surplus crops overflow

tion year.
Some

4m

1

jLi

.-r-r-,

is whether Hawaii

time

tion:

the Senate
However, it

con¬

b 1 i gations

paid old ones.
=3/1—fa

tax will he increased
for the Interstate road program.

years;

many

n,

while they re¬

gasoline

years.

during

avoided

o

doubtful category at this

again,

electorate

-X:-

consumers

legislation

limit

debt

New

fiscal year.

the

-

tracting

will have to be passed, it seems.
In the

probably at the end of the 1960

face

:t

H

reces-

s 1 o

-

the other

of

•'

1 .* *

a s e s ^

major proposals?

the
American people that his Ad¬
ministration should not have to
shoulder the total responsibility
to

about

what

h

prediction,
factj,

the

Bipsnortel

bill, and
an airport construction bill, ex¬
tending the draft for the mili¬
tary, and of course the regular
appropriations for the various
departments, agencies and bu¬
reaus,
and
the extension
of
corporate and excise taxes, but

$1,000,000,000 greater oyer a

e;

that

Savings Bank

Vice-

on:/Lhe

UNFORSEEN CONTINGENCIES.

big omnibus housing

a

H

this

BY

j

>0

^

;

:

.

authorized

six-year period than' the Eisen¬
hower
Administration's
own

Federal airport

tem.
_-V

OF DEPOSIT
RESCINDED

Neifeld,

and chief economist of

Beneficial

the

IF NOT

R.

;M.

Dr.

Finance Sys¬

just where this session of Con¬
gress
is going. Of course, it
seems certain that there will be

000,000. The amount
is

President

FROM 1st DAY

V

week
the
Housing Bill
$2,675,000,-

last

night
passed

Senate

dicts

little early to tell

a

seems

credit

DICTATE OTHERWISE.

Legislative Possibilities
It

use more

in 1959 than in recent years, pre¬

UNLESS ADVERSE CONDITIONS

from
.

goods.

Consumers will

QUARTERLY

settle down
to
a
normal work load. The
facts
are
most
Congressmen
have been on an almost constant
round of parties and receptions
since the session started. They
are
more
fatigued from the
Committees usually

destined to make.

that

hard

COMPOUNDED

speechmaking of the Republicans, the

/;

year and: opines
swing back to

lum will

traditional Lincoln Day

party binges than they are
work.v;
-.-..v. ;%!'•; ,'

explains

will enlarge the

consumers

1

1

I

i\'

■q-.-i'-i-

-

r,„

£

-V

-

-

HUbbard 2-1990

r

BS 69

Volume 189

Number 5820

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PICTORIAL.

MEMBERS OF

v

35th

f ••

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At The Sheraton Plaza Hotel

ANNUAL
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February 6,1959
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Vice-President

Corresponding
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Recording

Treasurer

Secretary

Wilfred G. Conary
G. H. Walker A Co.,

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W.

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Company

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Co.

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PICTORIAL

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The Commercial and Financial Chronicle

PICTORIAL

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Thursday, February 12, 1959

Bill
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The Commercial and Financial Chronicle

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Thursday, February 12, 1959

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Number 5820

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Thursday, February 12, 1959

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Bill House, Asiel A Co., New York

COMPANY, INC.
Stock Exchange

Member-—Philadelphia~Baltimore Stock Exchange

77 Franklin

Street, Boston 10, Mass.

Telephone Liberty 2-2340
525 Hospital Trust Bide.,

Providence, R. I.

Dealers and Brokers in

Genera! Market Issues
Specializing in
J. R.

New England'Securities

Bragdon, Goldman, Sachs A Co., Boston; Wm. Galbraith, Goldman, Sachs A Co., New York;
Growney, Gregory A Sons, New York; A1 Dykes, du Pont, Homsey A Company, Boston

Mick

Carr & Thompson, Inc.
31

MILK

STREET

BOSTON 9,

MASS.
NEW YORK

BOSTON
HUbbard

WHitehall 3-7600

2-6442

Bell

System Teletype BS 328

Branch: Worcester Massachusetts

Bill Kumm, Hill,
P.

Darlington & Co., New York; Jim Duffy, Reynolds A Co.; Graham Hurlburt, Henry
& Co.; Duke Hunter, Wellington Hunter Associates, Jersey City, N. J.

Briggs

*

55 YEARS OF SERVICE >

Chas. A. Day & Co.
Incorporated

Listed and Unlisted Bonds and Stoeks
particularly of

New

England Corporations
Inquiries invited from Dealers
and Financial Institutions

Maintaining

a

Retail Department

willi Distribution in New Kngland

WASHINGTON AT COURT STREET
Member Boston Stock
Bragdon, Goldman, Sachs A Co., Boston; Frank Barrett, H. C. Wcdnwright
Sullivan, H. C. Wcdnwright A Co., Boston; Lowell Warren, Dominion Securities

Roger
Jim




& Co., New_York;
Corporation, Boston

Exchange

9

10

PICTORIAL
The Commercial and Financial Chronicle

CLAYTON

.

Thursday, February 12, 1059

UNDERWRITERS

SECURITIES

DISTRIBUTORS
DEALERS

CORPORATION
PRIMARY

MEMBERS

MILK

STREET,

BOSTON
HUbbard

Direct

Telephone to New York
HAnover 2-7538

MASS.

9,

TRADING

MARKETS

MIDWEST STOCK EXCHANGE

79

..

2-6065

and to
Teletype BS-30
Grace

Portland

Canadian Securities

Inc.,

New York

>

Eddie

Opper,

J.

B. Maguire & Co., Inc.; Eddie Williams, Hooper-Kimball
Webber, Jackson & Curtis; Pat Mullin, J. B. Maguire &

Inc.; Carl Wells,
Co., Inc.

Paine,

DA1TON
Member

New

HAIGNEY

Boston
Stock

& CO.

England

Exchange

INCORPORATED

Markets

75

FEDERAL

STREET, BOSTON

Teletype BS 596
New York Telephone—WOrth 4-2463

John

Daley,

J.

B.

J.

B.

Maguire

Maguire & Co., Inc.; Louis Zucchelli, J. B. Maguire &
& Co., Inc.; Bob Unsworth, Brown, Lisle & Marshall,
Ed Opper, J. B. Maguire & Co., Inc.

Co., Inc.; Ray Bond,
Providence, R. I.

Inactive
BANK and

INSURANCE

STOCKS
Massachusetts
Maine

New Hampshire

-

Vermont

Pa ul D. Sheeline & Co.
31

Milk

Street, Boston 9, Mass.

Telephone HAncock 6-0170

Teletype BS 51

Dayton

TRADING

Haigney, Dayton Haigney & Co. Inc.; John D'Arcy, F. L. Putnam & Company,
White, William H. Coburn & Co.; John Conway, Old Colony Trust Company

Inc.,

Ted

MARKETS

AMERICAN CEMENT CORP.
BOTANY

MILLS

CARIBE STORES
INDIAN
W.

HEAD

L.

MILLS

MAXSON

MORGAN

ENGINEERING

UNITED STATES ENVELOPE

NATIONAL

COMPANY, INC.

LERNER & CO.
Investment Securities
10 Post Office Square
Telephone:

HUbbard 2-1900




•

Boston 9, Massachusetts
Teletype:

BS 69
Emil

Kumin,

Estabrook

& Co.; William H. Reardon, Hornblower
Hornblower & Weeks; Warren Donovan, Dayton

&
Weeks; Herbert
Haigney & Co., Inc.

E.

Hurley,

Volume

189

Number 5820

.

.

The Commercial and Financial Chronicle

.

PICTORIAL

Barney Nieman, Carl Marks A Co., Inc., New York; Leo Dubey, Cooley A Company, Hartford;

George Angelos, Chas. W. Scranton A Co., New Haven, Conn.; John Ohlandt, New York Hanseatic
Corporation, New York; Jim Lynch, Paul D. Sheeline A Co., Boston

Paul
Pat

Monroe, R. W. Pressprich A Co., Boston; Mark
Mullen, J. B. Maguire A Co., Inc., Boston; Clem

Bert

Robert

Crowley, H. M. Payson A Co., Portland, Maine;
Diamond, Townsend, Dabney A Tyson, Boston

Woglcm, Clayton Securities Corporation, Boston

Torpie, J. C. Bradford A Co., New York; Frank Welch, R. S. Dickson A Co., Inc., New York;
Harry Gumm, G. A. Saxton A Co., Inc., New York; Carlisle Morrison,
H. P. Wood Company, Inc., Boston

dealers and brokers in

Coffin & Burr

general market issues

Established

Incorporated

1926

Founded 1891

11.

Trading Markets in

New England Securities

D.

KNOX

HODGDON & COMPANY
10 State

BOSTON
NEW

BANGOR

HARRISBURG

BINGHAMTON

ALBANY

York

Telephone

Street, Boston 9, Mass.

CApitol 7-4235

Bell

System

Teletype BS

849

MEMBERS

Boston Stock Exchange

Stock Exchange

Midwest Stock Exchange

CO., Inc.

New York Security Dealers Ass"n

MEMBERS
New

&

HARTFORD

PORTLAND

YORK

American Stock Exchange

(Associate)

DEALERS AND
BROKERS IN

Specialists in All

Unlisted

UNLISTED
SECURITIES

Rights and Warrants

and Listed Bond

MUTUAL
11

FUND OF BOSTON
Prospectus

on

request

Josephthal&Co.

Telephone DIgby 4-1388

FOUNDED

Teletype NY 1-86

27 State Street

BOSTON 9

KELLER BROTHERS

c) eouAsotoe*
COURT STREET,

(corner of Washington Street)

Telephone .Rlchmond 2-2530




CO., INC.

BOSTON

Bell System
Direct

New

York Stock

Exchange

American Stock Exchange

Commodity Exchange, Inc.

Chicago Board of Trade

19 CONGRESS ST., BOSTON 9,

Teletype BS 169

phone between offices

1910

MEMBERS

Telephone CApitol 7-8950

ZERO

Rights

Broadway

NEW YORK 4

Bell System

GENERAL DISTRIBUTORS

11

Phone
NEW

120

YORK

OFFICE:

BROADWAY

WORTH

MASS.

LAfayette 3-4620

4-5000

Private

Wires

to

Principal Cities

12

The Commercial and Financial

PICTORIAL

Chronicle

...

Thursday, February 12,1959

-

ft

W0r

'"

''MM',' 'J

WMm A

m

Mw,.

/

'

Wmm

HHR
tB
KMI

Jerry
Don

Ed

Homsey,

du

Pont, Homsey

A Company; Lester Doucet, Salomon Bros. A

McCormack, White, Weld & Co., New York; Bill Bozsnyak, White, Weld A Co., New York;
Frank Mullin, White, Weld & Co., Boston
•
.

Ingalls, Coffin

A Burr, Incorporated; George Stanley, Schirmer, Atherton A Co.

Hutzler

.

Ralph Dimpel, Eastman Dillon, Union Securitie$ A Co., New York; Peter Molloy, White, Weld A Co.,
New York; Clive Fazioli, White, Weld A Co., Boston
•

1

-Charles Driscoll, Paine, Webber, Jackson A Curtis;
Sumner Wolley,




Carl Wells, Paine, Webber, Jackson A Curtis;
Coffin A Burr, Incorporated

:

.