Full text of Commercial and Financial Chronicle : February 15, 1951, Vol. 173, No. 4986

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1

UNIVERSITY
OF MICHIGAN

ESTABLISHED 1S39

FEB 19 1851
MINES AMMMT8ATI
mxt

Reg:. U. S. Pat. Office

Volume

173

Number 4986

New

York, N. Y., Thursday, February 15, 1951

Price 35 Cents

a

Copy

EDITORIAL

As
It

We

Misconceptions and Facts
Concerning Stock Market

See It

to be

was

expected, of course, that confusion
Washington at the beginning of any
such major
program as that now being planned
the

of

name

defense.

It

has

been

the

cational

so

Liquid

work

to

combat

impressions created
market

in

them.

Warns

against false

recounts educational and

year's net sales of open-end funds' shares

pro¬

haps a
might be true.

Stresses objective to "stop spread of Communism dead in

case

which

'

certain

are

leave

the

observer

*

with

of

ownership of America's productive

,

in

(1) the degree in which
purely parti¬
politics is intruding into the whole rearma¬
ment
program; (2) An obvious lack of understand¬
ing of a number of the basic elements involved
in the problems
presented; and (3) What appears
to be a
continuing failure of the Administration
are;

convince the great rank and file either

"the program for

as

foreign policy,

giving effect to it

and

Washington that the
organizations being set up have in
instances become havens for

in pre-

The

same

on

page

for,

30

NOW

porate securities
and potential

IN

Chrysler, General Motors, du Pont, General Elec¬
tric, Westinghouse, CIT Financial, Commercial Credit,
Biscuit, Montgomery Ward, Sears, Roebuck and

National

American Tobacco.

Edward C. Gray

on

page

37

afforded

are

a

Overall Reserves Rose
A third
common

of

the funds

stocks

on

covered

in

this

survey

bought

balance, another third

sold and the
remainder about evened their
transactions on either side
of the market.
Despite the purchasing and also the use

a

REGISTRATION

undertakings in

were

were

the

dinner given by members of the San
Francisco Financial Community, San
Francisco, Calif., Feb. 14, 1951.

SECURITIES

BATES MFG. CO.
BERKSHIRE FINE SPINNING

by Mr. Gray at

representation in

portfolios. De^
Henry A. Long
noticeable in the food,
aviation, electrical equipment and tobacco stocks.
Among
prominent blue chips in which selling predominated

Continued
Remarks

continued to be popular, and
buyers
also, favored natural
gas, industrial

creases

understanding of securities owner¬
spirit of the people who blazed the way

deserving supporters

previous

auto parts industries also found small¬

to promote a broader

ship.

issues approximated
three-months'
period, while the purchases of metals
increased 35%.
There was also an
upswing in the buying of the steel
group.
The merchandising stocks

er

more

Coast, of course, of your efforts to
stimulate
public interest in stock
ownership. >Since I arrived her,;, I
have ; learned more of those efforts

many, many

markets

&

of,

to provide a market
industries to finance.
knew before I arrived on

I

*

DEWEY

care

rail

the

Selling was heaviest in the utility
issues, although activity there was a
third lighter than during the
previ¬
ous quarter. The
building and auto and

Ex¬

own

and

of

Utilities Sold

representa-

your

more

rearmament

Continued
active

that

securities

to
or

Consider the first of these factors. -It
appears
quite generally agreed among experienced
in

know

investors to take

more

to be

observers

I

change, one of the nation's major
regional securities markets, will con¬
tinue to grow.
California's popula¬
tion
and
industry have increased
vastly in recent years.
You have

iFgring for it.

f"

Stock'AExchange

J' tion.

public.

machinery and textile equities.

crowding - Pennsylvania for second
place among the 48 states in New
'York

san

to

financial

activity.
Among other achieve¬
ments, California has gained more than 50 offices of
New York Stock
Exchange member
firms in 15 years. California is now

foreign policy—may be placed in three broad

•the basic wisdom of its broad

western

oil

that

Some startling changes have taken
place in our indus¬
One of the most interesting is the not able increase

categories.
These

in

resources.

try.

to the soundness of the broad lines

as

by encouraging and facilitating widest possible

a

to the

Continuing to shuffle portfolios in order to give a
larger representation to war-aided industries, invest¬
ment company
managers added to their holdings of oils,
non-ferrous metals, rails and steels
during the final
quarter of 1950. The buying interest

New York Stock Exchange.

individual

of the current

strong feeling of uncertainty even when all this
is taken
fully into account. Perhaps the elements
giving rise to this disquiet in the minds of many
thoughtful citizens — uncertainties quite aside
from doubt

of the

its tracks"

aspects

outside

activities

despite large year-end adjustments,
million, a totpl almost equalling total

reserves,

increased to $225

public mind by various stock

"averages," and

motional

Washington today is per¬
little less discouraging than otherwise

there

oils,

non-ferrous metals, rails *nd steels
during last quarter.
Utilities, building and motor issues were in disfavor.

dled state of affairs in

Yet

in

Exchange official lists popular miscon¬
ceptions regarding security exchanges and outlines edu¬

early stages of such an effort
bogged down, what with poor planning
and impossible
organization—to say nothing of
just ordinary politics—that the outlook appeared
almost hopeless. Set in this
background, the mud¬
get

Authority finds funds' buying still concentrated

New York Stock

In the past, for the
to

By HENRY ANSBACHER LONG

Executive Vice-President, New York Stock
Exchange

rule

Switching

To Stocks oi Wax Industries

By EDWARD C. GRAY*

would exist in

in

Trusts Continue

>

.

Continued

on

page

24

Underwriters, dealers and investors in cor¬
complete picture of issues now registered with the SEC
"Securities in Registration" Section, starting on page 42.
—

our

'

State and

ALMY

DWIGHT MFG. CO.

HOLLINGSWORTH & WHITNEY
KEYES FIBRE CO. CI. A & Com.
LUDLOW MFG. & SALES

Franklin Custodian Funds,

MCDONNELL AIRCRAFT

STATE

AND

MUNICIPAL

600 Branches

Bonds

:

N. E. GAS & ELECTRIC CO.

across

BONDS

'

SACO LOWELL

Municipal

inc.

A Mutual Fund

SHOPS

WEST POINT MFG. CO.

Canada

Monthly Commercial Letter
upon request

duPont, Homsey Mo.
Members New York &

31

Boston

Exchs.

MILK STREET, BOSTON 9, MASS.

Tel. HAncock 6-8200

120

Stock

Free
from

Tele. NY 1-315

The

Prospectus may be obtained
your

investment

dealer

FRANKLIN DISTRIBUTORS, Inc.
64 Wall

Street, New York 5

Bond

Head Office: Toronto

Dept. Teletype: NY 1-708

New York
Seattle

Bond

Canadian Bank

OF NEW YORK

or

Tele. BS 424

BROADWAY, NEW YORK 5, N. Y.

Tel. WOrth 2-0115

THE NATIONAL CITY BANK

Agency t 20 Exchange PL

Department

THE CHASE

NATIONAL BANK
OF

THE CITY OF NEW YORK

Portland,Ore. San Francisco Los Angeles

We maintain active markets in

Brown

CANADIAN

Underwriters and
Distributors of Municipal
and

Prospectus from authorized, dealers

Corporate Securities

VANCE, SANDERS & CO.

OTIS & CO.

Ill Devonshire Street

(Incorporated)

BOSTON*
New York

Angeles




COMMON
Analysis

CANADIAN DEPARTMENT

Goodbody

&

Co.

ESTABLISHED 1891

Pombuom Securities
W

1899

GRPORATIO?!

40

New York

Chicago

Denver

Dallas

Cincinnati

Columbus

Toledo

Buffalo

IS BROADWAY

CHICAGO

Exchange Place, New York 5, N.Y.

105 W.ADAMS ST.

NEW YORK

Teletype NY 1-702-3

WHitehall 4-8181

upon request

IRA HAUPT & CO.
Members New
and

MEMBERS NEW YORK STOCK EXCH.

CLEVELAND

Chicago
Los

Electric Co.

Steep Rock Iron Mines

or

Established

Canadian Superior Oil
Company of California

Portland General

BONDS & STOCKS

Company

(all Issues)

York

Stock Exchange

other Principal Exchanges

111 Broadway, N. Y. 6
WOrth 4-6000
Boston

Teletype NY 1-2708

Telephone: Enterprise 182#

Financial Chronicle

The Commercial and
2

Thursday, February 15, 1951

.

(710)

'

'!

>

,

+

' i

7; '' t
'

The

IN

MARKETS

TRADING

American Tel. & Tel.

Security I Like Best
each week,

A continuous forum in which,

for favoring

participate and give their reasons
33/8% Conv. Deb. W.

I.
they to be regarded, as an offer to

Prospectus on request

"

Corporation

Sound Company

Howe

York 5

Teletype NY 1 -583

mon

successful and prof¬
itable production status. All have
abundant reserves of ore most of
for hedging against infla¬
of which has been proven enough
A North American mining
for 10 years of mining.
It is not

tion.

it

enterprise,
is

Specialists in

economical to "prove" ore

primary

a

Each
new mine is now either producing,
or is
on the verge of production.

lions of tons in many cases.

of

non-

metals,

with two mines
in Canada, two

Since 1917

(1)

United

Lake

the

in

Members

York Stock

New

York

Curb

#

Exchange
Exchange

well

as

ness,

Paul Dysart

silver, copper,

2-7815

Tel. REctor

in

are

gold busi¬

the

BROADWAY, NEW YORK 5

120

Sound

Howe

stock

'■

of

Holders

Lead, zinc, and
soon will be in

*

*

VERNEY CORP.
Analyses

Request

on

—

Sternberg

on
Chelan in the State of Wash¬

St., Boston 9, Mass.

148 State

N.

7-0425

Y.

Telephone WOrth 4-5000

Tax

\
I

Teletype BS 259

:

:

^

net

1 PUERTO RICO WATER
AUTHORITY

:

RESOURCES

;

ELECTRIC REVENUE BONDS
are
exempt from all Federal

/

;

l

taite

local taxation except es-

and

and inheritance taxes.

An

political part of
Rico has
defaulted nor been de¬

economic and

.the

Puerto

U.S.A.,

never

linquent

financial

any

on

obligation.

t

,

author¬
from $4,986,510 for 1944 to $11,229,-

Gross Revenues of this

have

ity

for

482

Direct wires to our branch offices

operations have been stabil¬
This
could
enhance
its

sized
ized.

profits after amor¬

chance to show

tization charges.

Bates

(5) Blackbird Mine—Located 22
miles west of Salmon, Idaho, when

Manufacturing
Bought—Sold—Quoted

J. B. Maguire & Co., Inc.

which

bonds

than

2.75%

considerably

is

of

higher

these bonds and
"Puerto
Rico,
upon request.

entitled

sent

free

& Company
70

this

from

came

mine.

liminary ores has ceased and gold

But

a

medium

of

reserves

ore

other
now

once-

almost wholly depleted—

scattered explorations, and

few

NY 1-2643

miscellaneous leases on

promising

their1 pro¬
ductivity not yet established. De¬
spite this outlook, public buying
bid Howe Sound stock up to 90
and

undeveloped

still

early in

1937

on

its then known

record.

Central Public

to Howe's

51/2S,

price

mark-up

Now

Howe's

complete

1952

the

50s.

now

Bought—Sold—Quoted

has

because

there

qAllen & Company
30 Broad St., New York, N.
Phone HA 2-2600

—

Y.

Tel. NY 1-1017




and

of cobalt

metal.

netic

Howe

is

Enterprise 2904

Hartford, Conn.

Enterprise 6800

Open End Phone to New York Canal 6-1613

the

stock

a

in

lists

it

six, including El Potosi,
of continued operations
the

These

pillars
to

without

a

would

binds

find

increased

demands

enamel

Chihuahua City,

its whole investment in this mine

and

Mexican

Government

describe
brief

de¬

the

of

ap¬

against current

operations, large reported earnings

Sound

American Marietta

Henry 6. Warner & Co. Jnc.
Members Phila.-Balto. Stock Exchange

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

common

by

to

seems

an

The

possess
so

York

Direct wire

profitable
operation.
its present 500-ton

vestor need have no

logical expectation

would

seem

an

present-

Emerich, Chicago

S.

U.

SAVINGS

BONDS

those

N. Q. B.

inflation-conscious pub¬
best

it is said,

inflation

hedge,

so

is in the stock of some

exploiting natural re¬
sources—oil, metals, coal.
Such
assets
"remain."
They
cannot

OVER-THE-COUNTER

company

evaporate except through extrac¬
tion

for

which due

compensation

Diversification

received.

INDUSTRIAL STOCK INDEX
12-Year Performance of

35 Industrial Stocks

ment

stock1.

operations
Sound

.

Widety
is

measures

of

dispersed

another.
Howe
up to all of these.

extremely

once

to Ames

BUY

products is also recognized to be
a desirable attribute in an invest¬

extremely

PH 771

City Tel.: BOwling Green 9-4818

sought af¬

pe¬

five-year

large amortization,
El Carmen might well become an
no

Bell System Teletype

Telephone

PEnnypacker 5-2857

stock in¬

Howe

*

is

Expansion of

about

Central Public Utility SV2S

to hurry

But

scription of each of its now pro¬
ducing mines. The inquisitive in¬
concern

Central Electric & Gas

,

full

the

lent

this

of

end

Light Common

Foote Mineral

States

practically impossible.

the

mill

has

of

ideal characteristics

property

Penna. Power &

for

its assistance
cobalt production.

power

policies.

Government

in to sat¬

United

the

why

reasons

taxing

such high charges

seem

Teletype BS 328

Pennsylvania Railroad

New

compensate

to

herently

unstable

into

rise

Govern¬

proximately $700,000. - If this is
not
done, this amount will be
added to the amortization.
With

at

Street, Boston 9

Philadelphia Electric Common

price of which will almost

Mexican

the

of

to metal.

cost increases in the future.
The scarce supply is one of the

by-products. Howe is
amortizing over a five-year period

road

31 Milk

Tel. HUbbard 2-6442

any

recovery as

a

Ralph F. Carr & Co., Inc.

short supply con¬
vital cobalt metal which

certainly

1949, from
apparently very high grade ore.
Its
primary product is copper,
with important
gold and silver

ment's

Bought—Sold—Quoted

gravely

but the

Mexico, it began

production in August,

because

Worumbo Mfg. Co.
Mex. Lt. & Pr. Co. Ltd.

currently sells for $1.80 per pound,

miles southwest of

air

a

for

Howe will step

Thus

dition in

135

the ordinary ex¬

the metal in
paints, pigments, drying agents,
ceramics,
and
the "frit" which

Mine—Located

Carmen

been

have

uses

on

isting

company's holdings.
about

Boston Wharf Co.

in

new

isfy

El

National Research Co.

a

used

superimposed

This mine is

riod, with

impossible

price

gold

(2) In

alloy,

probably the least desirable of the

(4)

Norma Hoff. Bear. Co.

iron,

this.

lic.

Instead of two mines,

Sound

Portland, Me.

used in motors—26%
of domestic consumption goes into

ter

pockets.
It

Ino.

'

sources

new

Cobalt is neces¬

(1) Production of mag¬

for:

sary

has

to such heights.
metamorphosis
is

recovering

Dealers

Tele. BS 142

Tel. HUbbard 2-5500

regarding the vital

of finding

prospects promised to reimburse the cost of

today, we wonder what caused

Utility Corp.

in

in

The

Compared

Securities

Boston 9, Mass.

"out

to

A word here

to

immediate reflection

steady, if unromantic

the

a

producer,
fabulously rich

expected

necessity

low grade

profits before taxes.

.

locations, were the sole other as¬
sets.
But these other assets were

Pine Street, New York 5

WHitehall 4-1875

Possibly some of

Up until 1938, these two mines—
Brittania and El Potosi, the first

but

Paul Frederick

be

heat-resistant metal
jet and turbo-jet
engines—20% of domestic con¬
fills
the
productive
process—a
sumption is needed for this pur¬
necessity in the continuous treat¬
pose.
(3) Electronic devices, in¬
ing of the ore. Highly profitable
cluding television. (4) In binding
operations without Canadian Gov¬
carbide tips on cutting tools.
ernment subsidy are questionable.
pected to be after dilution of pre¬

crease

Circular describing
U.S.A."

preliminary work. Mill recoveries
of gold have not been quite up
to expectations but may be ex¬

home in his¬

galleons

same

comparable
,

booklet

Lake—Located
Manitoba, and a primary
gold" producer, it started commer¬
cial
production
in June,
1949,
after more than
eight years of
Snow

(3)

duction, however, copper may well

The Pas,

the Captains

toric

of

31 Milk Street,

dollar" the
sale of cobalt.
The gold is inci¬
near dental, but important.

the treasure cargoes

—

rating.
a

itably during 45 years of ups and
downs in .the metal markets.;

from Castile shipped

ABOUT

Nat'l Assn.

Members

earnings.averaged in excess of

have been proven, from
which the mine
should slightly
more
than break even.
Any in¬

Conquistadores.

1950.

YIELD

romantic days.of the

back to the

increased

NY 1-1557

La. - Birmingham, Ala.
Mobile, Ala.

(2)

Howe's out¬
look was quite different. A mori¬
bund mining operation, it worked
two
mines:
the Brittania Mine,
located on Howe Sound, an in¬
let
20
air-miles north of Van¬
couver, B. C.; and El Potosi, once
a fabulously rich silver, zinc, and
lead producer, located near Chi¬
huahua
City, Mexico.
BuV now
the end of operations at El Potosi
is at hand.
Reserves of rich sil¬
ver, lead, and zinc ores have been
rapidly mined out. wtih no new.
compensating
discoveries.
This,
after all, is not unexpected after
400 years of intermittent extrac¬
tion, for El Potosi's life span dates

by Act of Congress

York 4, N. Y.

HAnover 2-0700

$550,000 per year.

this time.

Fourteen years ago

Exempt

vrpinnae

York Curb Exchange

25 Broad St., New

.

TeL CA.

Vnrfr Stnr1c.

New Orleans,

(Page 36)

City.

Np.to

Members New

J.

The
prospect of bringing the
Blackbird Mine into production of
Brittania Mine—A primary
cobalt, copper, and gold, not later
Operations
date
from
1905. copper and zinc producer, with than mid-summer, 1951, lends to
Dividends have been paid con¬ important recoveries of gold and
Howe Sound perhaps its greatest
tinuously since 1923. On this rec¬ silver by-products. Newly devel¬ element of
enchanting speculation
ord
alone, the stock might be oped zinc orebody may promise
tinged
with
sound
investment
rated high grade. But today it is a spectacular shift in emphasis to
value. As mines go, Blackbird cer¬
not
the
past history of Howe this metal, the market for which
tainly cannot be classed as large.
which awakens our curiosity, but is in desperate supply. Zin^ pro¬
Still, if expectations are met, it
rather a widening vista of its ex¬ duction has increased from 500
will produce in the neighborhood
panding
developments and the tons in 1945 to 6,615 tons in 1949 of two millioh pounds of sorely
probability of greatly augmented —up more' than 12-fold, with needed
cobalt
annually.
This
earnings and increasing dividends no reduction in recovery of other
amount represents an equivalent
therefrom—in other words, a lot metals.
Daily mill capacity is
of 50% of the U. S.'s present lim¬
more
growth potential has been 6,000 tons. Ore is medium to low
ited
consumption,
due
to
the
added recently through the ag¬ grade, but this mine has demon¬
metal's scarcity.
In value of pro¬
strated an ability to produce prof¬
gressive plans of its management.

terest at

NICKEL PLATE

Steiner, Rouse & Co.

C.
Luitweiler, Partner, Bendix,
Luitweiler
& Co., New York
Company

Service

channels.

ing, that lends to Howe's brilliant
outlook the point of greatest in¬

versus

,

for

is cry¬

American industry

which

MAINE CENTRAL

*

It is this

cobalt.

cobalt, a metal

venture,

last

(pa^etco"new york

city.Cities

_

_

_

ington,

two in Mexico.

frjC |)ONNELL & TO.

Mine—Located

Chelan

Loeb,

M.

G.

completely developed will be the
this mine is a primary
largest primary cobalt producer
copper
and zinc producer, with on the American continent. But
gold and silver by-products.
It the ore is also rich in copper, and
began 'production
in
1938, but
gold will be, no inconsiderable
manpower shortages and the war
by-product.
Orebody has been
kept it from reaching full produc¬
proven
and a 500-ton mill will
tion status until quite recently.
soon
be in operation.
A cobalt
Daily mill capacity is 2,200 tons. smelter has been erected at Gar¬
Ore is medium to low grade, but
field, Utah, for reduction of the
availability, mine layout and pres¬ cobalt concentrate. Copper con¬
ent prices assure profitable oper¬
centrates are sold in commercial
ations. In the five years 1945-49,

and

States

untold mil¬

are

reserves

proven

ferrous

list

New

Bought—Sold—Quoted

Corporation—
General Partner,

beyond

but in addition to the

time,

that

producer of a
dive rsi f ied

Rights & Scrip

because com¬

ending

brought into

Company's com¬
stock offers an excellent me¬
Sound

Howe

dium

*

ville, Ky. (Page 2)

pensating for its demise a whole
galaxy of new properties have
been
developed and
are ' being

Louisville, Ky.

Investment Advisor,

Potosi's

El

PAUL DYSART

120 Broadway, New

Advisor, Louis¬

sart, Investment

intended to he, nor
sell the securities discussed.)

Paramount Pictures

New York Hanseatic

BArclay 7-5660

Company—Paul Dy¬

Howe Sound

(The articles contained in this forum are not
are

,

Louisiana Securities

particular security.

a

9

Selections

Their

of experts

group

*

Alabama &

and

Participants

Forum

field from all sections of the country

in the investment and advisory

RIGHTS

different

a

Week's

This

Continued

on

page

36

BOOKLET

ON

REQUEST
-

National Quotation Bureau
,

e

• —

Incorporated

46 Front Street

New York 4, N. Y.

J

JVolume 173

Number 4986

The Commercial and Financial Chronicle
*

**+*-*

..aMm*-*

M

LETTERS

!•*<*

*

«*-'■&

*.

(711)" 3

THE EDITOR:

TO

INDEX

"Are We

falling Into
History's Greatest Trap?"

.;

Misconceptions

issue

for

publication

I feel safer with

today's

of

article

the

to

by

*

Jan.

11.

Director,
Trust

-

•Weste

Hemisphere

rn

promulgate
trine
we

statement

prepared to defend against

march

tinuance

of

of

communism.

.policy, and

policy

a

full

of

respect

to

situation

Russian

aggression.

United States for the reasons ouU

that

others appeared

in

barking

our

of Jan.

18, Jan. 25, Feb. "1
and Feb. 8, and still more will be
accommodated

in

subsequent

,*

DONALD

view

„

BALDWIN

—and
to

New York 7, N. Y.

k

I read

with

terest the

Palyi

-inclined

am

and

think

the

that

he

enormous

how

unconcerned

.

ALEXANDER
Chairman

New York

BARUCH

piece regarding the
subject matter of the Palyi docu¬
ment—how

we ought to
against Russia.

selves
I

also

paid

E.

of

What

done at that

the
for

For

time

money

we

instance

to

was

materials

raw

the

should

we

We

get

felt

that

all,

take

been

Russia.

very

deal

great

It

easy

less

to

do,

than

money

,

higher

cost of
creased taxes.)

of

living—then

<—

believe

war

in

in

decide

when,

get out

if at
of Korea.

causing the

are

terrible

casualties

HENRY P. BRISTOL
Chairman of Board,

Bristol-Myers Co.,
Inasmuch as Dr. Melchior Palyi
obviously cannot guarantee what

is in the mind of Stalin, I am in¬
to go along with the sug¬

clined

gestions made by General Eisen¬

hower, which I believe have the

approval of our European Allies.
After all, the arming viz-a-viz

should

amounts

of mil¬

Also,

that the troops we
Europe should
proportion to the

Western

to

in

Europe
who, will
fair proportion of

their

proper

troops

are

by the countries
in Western Europe, as any war
there will primarily be their war
I do not believe

ours.

should

try

Russia

with

to

win

the

a

in

won

and

with

with

of

22

"And

Pity

'Tis

Industries

As We See It
Bank

and

(Editorial)

Insurance

Man's

ground

air

supported,

seas,

the

Unless

our

inite steps to

of

country

takes

def¬

control the contin-

Continued

Bookshelf

Exchange

Members New

on

page

Coming Events in the Investment Field____.i____.___,.




Haile Mines

36

i

•

8

'■*

Einzig—"Europe and American Gold"

18

From Washington Ahead of the News—Carlisle

Indications of Business Activity
Mutual

Bargeron____

Singer, Bean
& MACKIE, Inc.

7
39

_,

Funds

16

NSTA Notes

HA-2-0270

and

Bankers

40

Exchange PL, N.Y. 5

Teletype NY 1-1825 & NY

28

News About Banks

Observations—A.
Our

1-1826

29

Wilfred

May..

2-8200

Barbour's Dow Theory

18

written

Prospective

Security Offerings.-.-—..

44

___

Public Utility Securities

whose

Railroad Securities

Schenectady

-

by

21

Now

Available

42

Worcester

In

BARBOUR,
have

13 years

Privately

Bulletin

Form

14

Securities Now in Registration

F.

interpretations

OF COMMERCE for the
past

lated

Securities Salesman's Corner.....

JUSTIN

market

appeared in the CHICAGO JOURNAL

23

Circu^

Only.

Fact Filled 35 Page INTRODUCTORY
FOLDER Included With Each

Subscription
The
The

Security I Like Best

2

State of Trade and Industry

5

Tomorrow's Markets (Walter Whyte Says).

SUBSCRIPTION
12 months $45.00

Washington and You

3

RATES:
months

$15.00

BARBOUR'S Dow Theory Service Inc.

38
48

105

West Adams Street

Chicago 3, Illinois

.

i

40
Twice

1

Weekly

COMMERCIAL

Drapers' Gardens, London,
land, c/o Edwards & Smith.

Reentered

Park

Place,

COMPANY, Publishers
New York 7,

2-9570

to

WILLIAM

DANA
D.

RIGGS,

1879.

N. Y.

matter

>

•

Manager

Subscriptions
Possessions,

'

United

Territories

Pan-American
Dominion

in

Union,

States,

and

$45.00

of

Canada,
Other Countries, $52.00

U.

S.

Members

of

per

$48.00
per

year;

per

Di-Noc

Febru¬

Subscription Rates

President

Business

second-class

as

York,

9576

SEIBERT,

Eng¬

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

ary

DANA

B.

C.,

Copyright 1951 by William B. Dana
Company

CHRONICLE

Reg. U. S. Patent Office
WILLIAM

E.

and

Stromberg-Carlson
Virginia Dare Stores

in

year.

year.

Bought—Sold—Quoted

Thursday, February 15, 1951
Other

Every
vertising

Thursday

issue)

(general

and

every

news

Other

Offices:

Chicago 3, 111.

135

South

and

Monday

statistical issue-— market
records, corporation news, bank
state and city news, etc.).
plete

1-5
-

47

—

Our Reporter on Governments

York Curb Exchange

Hubbard

Glens Falls

5

Reporter's Report

REctor

50 Congress Street, Boston 8

2-4300

-

k

Lear, Inc.

19

offerings of

Street, New York 4

Chicago

Copper & Steel

13

l__.

Dealer-Broker Investment Recommendations..

The

Teletype—NY
-

20

by ground troops.

Spencer Trask & Co.
Albany

Continental

Stocks.__

Canadian Securities

WILLIAM

HAnover

Remington Arms
Cover

-

HERBERT D. SEIBERT, Editor & Publisher

25 Broad

Great American

34

Regular Features

25

Stock

23

(Boxed) L

True"

_

PREFERRED STOCKS

York

Philadelphia and Los Angeles

will be

superiority in

the

on

course,

war

High Grade Public Utility and Industrial

New

20

i

*Carl Marks Co. Hold Anniversary Party i

FINANCIAL

Members

19j

Direct Wires

Who?

we

war

use

troops but that such

opinion, and

interested

6

Teletype NY 1-33710

20

Published

We

BO 9-5133

pledged

and not

New York, N. Y.

country

our

Western

pledge

in¬

troops.

matter of

to

Broadway, New York

itary equipment to those countries
.in

be

a

and

contribute large

send

Russia is

a

confidence

leaders

we

61

we

I

we

public

in

a

expended, if taken in time.
(What cruel and unnecessary
punishment

have

Reds

Incorporated

18

President of New York Curb Exchange;
Successor.

Now—Guess

request

J. F. Reilly & Co.

5

time

the Far East.

have

double

have

the Chinese Reds to "lose face" in

have

with

3

_

Urges $10 Billion Reduction in Federal Budget

may easily "save face"
much
more
by continuing our
fight in Korea and thereby cause

definite

would

as

on

(Letters to

Assails Treasury Proposal to Tax Municipal Bonds

Md.

now

not

reports,

Chinese

steps to strengthen ourselves and
weaken

or

should

we

and

and

Business
should

From

proposals, I have

should

be

to

us

whether

Russia turned down

bomb
we

2,

still

" we

military

our

lending.
4,000,000,000

were

England.
the atom

Falling Into History's Greatest Trap?"
to Melchior Palyi's Article)

the

Korea.

buy all

pounds of wool in Australia and
Ever since

believe

caused

have

could

we

the

Then

enough to prevent being caught in
trap. Nothing can be gained
by criticizing our many mistakes
of foreign policies, some of which

the Marshall Plan and the loan to

England.

23

;___

#

Says Bankers Must Protect Value of Dollar

DUNCAN

the

.

compliments to

my

%

World Bank Issue of $50 Million Bonds Awaits Market

our

Board,
Commercial Credit Company,

I

pace our¬

.

$

Editor Relative

reading the article "Are
We Falling Into History's Greatest
Trap?" I am afraid we .are, but

22, N. Y.

Vulcan Silver & Lead

*Prospectus

"Are We

After

a

^Canadian Superior Oil

21

____

SEC Commissioner McCormick Named

has

Hytron Radio & TV

.

Baltimore

wrote

17

Hoadley, Jr;______:____ 19*

_

;■

•

about

are

____

'

Truslow to Resign

-

I

Industries

too much money

we owe

it.

policy.'

M.

15

L

How Borrowing May Reduce Excess
Profits Levy
—F. E. Seidman

it is somewhat frightening

see

rea| danger of the

BERNARD

Great American

_______

Treasury-Federal Reserve Dispute—Aubrey G. Lanston_____ 22

the

to

article by Dr. Melchior

sketched
Russian

I

Washington authorities

great deal ol in-

a

14

proposed

already

R.

Air Products

•

'

Issues in the Defense of Europe

expend¬
by the military
Will, if given full reign, greatly
weaken
our
fiscal
structure —

,

Griggs, Baldwin & Baldwin
..

that the

itures

is¬

sues.

and

4-6551

Support

V —Congressman John F. Kennedy..

is dangerous at this

upon

time

WALL STREET, NEW YORK

Telephone: WHitehall

10

The Outlook for Building—Walter E.

lined in Dr. Palyi's statement.

Furthermore, I am inclined to
Jn -addition to : the. following think he is right that the gigantic
letters, reference is made to the military mobilization we are em¬
issues

for quotes.

9

Investment in Mutual Funds—John McG.
Dalenz_^

i,

fact

are

repute,

10

Inflation Marches On!—Roger W. Babson

,

.

bad

Obsolete Securities Dept.

8

We Have Fundamentals of Sound
Economy
—Joseph M. Scribner
:

wityi

Palyi, I am convinced in
my mind that Russia does not in¬
tend
to
fight a war with the

and

in

Extend Atlantic Pact With Full
Military
—Governor Thomas E. Dewey

Like Dr.

permanent mobilization, Dr. Palyi
warned, can only lead to national

bankruptcy.

7

certificates

and

6

,

Con¬

foreign

present

our

of- the

us

stock

age

We Should Revise Our
Foreign Policies—Herbert Hoover

of the article, - "Are
Falling Into History's Great¬
est Trap?" is an excellent concise

which

areas

to

6

Standard, the People, and the Gold Mining Industry
—Donald L. Kemmerer

We

Doc¬

Equities—Jacques Coe

OLD, SO BAD
those

The Gold

elaboration

-(2)

or

Monroe

new

specifying the

are

;the

a

come

Atomic Bombs and Investments—Curtis ter
Kuile

Chairman of

if

yellow with

99

York, and

My judgment is that Dr. Palyi's

to the

Even

4

General Motors Stock Action Indicates Bull
Market Top
—Stephen J. Sanford

of New York

that the United States must either
zone

Bank-Farmers

New

SO
Cover

Inflation and Stock
Prices—August Huber

,

Federal Reserve Bank

article, Dr. Palyi analyzed Soviet
aggression techniques and asserted
(1) restrict its defense

Co.,

Former

his

In

City

^.Cover

Concerning Stock Market

Dollars Are Now Preferable to

*

J. HERBERT CASE

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

*

Facts

Protecting the Investor?—Hon. Edward T. McCormick

appraisal of

Melchior

Palyi, "Are We Falling Into His¬

"Chronicle"

the

trained military men.

some

of the letters received rela¬

more

tive

in

made

and

—Edward C. Gray

t

Are We

is

page '

Trusts Continue Switching to Stocks of
War Industries
—Henry Ansbacher Long

Palyi's article in the "Chronicle" of January 11.
Provision

V

•

^

More letters given in this issue in connection with Melchior

,

\

.

Articles and News

La

ad¬
Bank

(com¬

quotation
clearings,
Salle

Publications

St.,

(Telephone: STate 2-0613);

and

Quotation

$30.00 per year.
Note—On

Record — Monthly,
(Foreign postage extra.)

account

of

the

fluctuations

In

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

made

in

New

York

funds.

THEODORE YOUNG & CO.
40

Exchange Place, New York 5, N.Y.

WHitehall 4-2250

Teletype NY 1-3236

The Commercial and Financial Chronicle

Thursday, February 15, 1-951

.

..

(712)

4

business

tell

T. A. Hutchinson Joins

^
Walston, Hoffman, G'dwin
SAN DIEGO,

By HON. EDWARD T.

Veteran SEC member details cardinal provisions

Pierce,

Assistant

bond

remains

department of the First NaSavings

&

Trust

San Diego.

When

Trading Markets In
to

of the various
There

am

Bassett Furniture Industries

Alternatives

is, in short,

conceivably

ex¬

the name of
On the other

in

go

of

investment

the

process

com¬

Finding

mean.
mean

that

is the real problem

investor

Dan Rirer Mills

Securities and

Life Insurance Co. of Va.

Exchange

better relations and under¬
protection—just as it
standing
between business and is the real problem of any gov¬
ernment activity
in a working
government and between man¬
democracy.
agement and investors.
Securities regulation deals with
I will be doing what I can to
build a firmer financial base for the complex practices and customs

Commission. I

a

recently

Commis¬

Commonwealth Natural Gas

sioner

16

had

STRADER JAYLOR&CO., Inc!
.

TWXLY 77
.

of

The subject of my remarks

is the question, "Are we
protecting the investor?"
There
are
as many
ways of answering
this question as there are ways of
approaching the general problem
of
securities
regulation.
In¬

and ' the

expectation of
further

; L. A.

Darling

ice

Aircraft;

For

Gray Iron Castings;
Parachute Hardware

Com¬

a

•

Curb

York

Members:"

Stock

Midwest

Exchange

Detroit Stock Exchange

*

1051 Penobscot Building

DETROIT 26, MICH.

,

Bay

City

—

Lansing

—

Muskegon

cannot

it

unless

succeed

into

account

is

and

based

on

a

detailed familiarity with the way

proposed rule

any

work in actual

locations

it

whether

will

or program

practice; what dis¬
will

they

can

and

cause

be

fairly

ad¬

justed.

McCormick

Exchange to succeed

our

business

corporations

or

are

The

technical

problems of se¬
curities regulation are beyond our
scope in this limited discussion.

Adams Truslow.

regulator to the land of the raise capital to keep our economy Federal Government is doing to
regulated.
Within a short time on the move; it is through the protect the investor in terms of
of
these
securities the
broader
issues
which
the
I expect to be tasting* the medi¬ distribution
cines that I have been helping to that the investment bankers earn modern corporation and modern
prescribe under the law for the their living; and it is through finance pose for us as citizens as
financial health of the nation.
public trading in these securities well as investors.
that the brokers and dealers of
The 1 Securities
and
Exchange
With that in mind, I reread the
Commission is the key agency to
address I had written.
I could the country earn theirs.

the

,

Primary Trading Markets

conceive

not

expression

In Active

STOCKS

of

It

fitting

more

a

philosophy

the

I

should

the

vestor

the

*.An

fore

The

people

protecting

would

involve

fullest

the

the

a

kind

in¬
of

which this job has been entrusted.
It is

an

independent body of five

men—no

banking

I will be
road from
been traveling.

have

East

by

of

Mr.

Side

my

journey

McCormick

Forum

on

could

be¬

Public

sponsored
by
the
Unitarian
of
Ail
Souls,
New York City,

Feb. 13, 1951.

so

regulate

investment

of

its

purpose

the

dissemination

buyers of newly

distributed securities.

Northwestern Pub. Serv.

American Telephone

Portland General Elec.
P. S. of New Mexico

and Telegraph

Company

for

detail later.

In addition, the Act

disciplining

over-the-counter

of

brokers and dealers, provides for
the regulation of margins

(which

prescribed by
Federal Reserve Board), and
vides

the

law,

by

are,

penalties

fraud

lor

pro¬

in

Subscription Rights

Public

The

Utility Holding

and

for sales

in

viola¬
pros¬

pectus requirements.
•

Texas Gas Trans.

The

Trans. Gas Pipeline

3%% Convertible Debentures,

Western Natural Gas

Public

The

Company

Act

Utility
of

1935

Holding
gives

latory

power

affairs

and

and

the financial

over

structures

electric

of

utility holding company
systems.
Under this
law,
the
gas

Commission does actually review

financing

plans

of

system

com¬

In addition, the Commis¬
sion has, under the Holding Com¬

panies.

pany
Act, the job of requiring
complex holding company systems
to
reorganize in order to limit

their
control

patterns
of
geographical
to
integrated operating

properties and to streamline their
securities

debt-burdened
tures.

struc¬

<

inclusion

of

effective

and trustees for the

bondholders.

provisions

corporations

in contracts between

protection of

These trustees had,

past, the ostensible duty of
protecting the bonded property
and collateral behind the bonds.

in the

However, many of them

occupied

positions
and
the
trust
agreements were riddled
with
so - called
"exculpatory"
clauses which in fact rendered the
trustees invulnerable to suit for
conflicting

vestment

Company Act of 1940 is

designed to correct many ofj the
abuses that led to the collapse of
In some ways it

Securities

Exchange

Act

In

1940, the Congress also
the Investment Advisers
Act.1
This law provides for the
registration of investment advis¬
ers and sets up a minimum set of
passed

standards

for

decent

and

above-

The^Securities Exchange Act of
1934

Continued

requires securities exchanges

ESTABLISHED

*

on

page

request.

Prospectus

1894

upon request

STATE AND MUNICIPAL BONDS
CORPORATE BONDS

TIonnell & Qo.

INCORPORATED

Established

Broadway, New York 5
—

Members

New

York

LOCAL STOCKS

:
1905

S
Stock

Exchange

Teletype NY 1-40

120
Direct Private Wires to Boston,

Broadway, New York 5
BRANCH

Philadelphia, Hartford,
Providence & Portland, Me.
Private Wires to Paul H. Davis & Co.,

Chicago, & Morgan Sc, Co., Los Angeles




the

Commission fairly intimate regu¬

Due 1963

(All others traded)

WOrth 4-2300

i

Company Act

SEC, and for the distri¬ is a more moderate form of regu¬
bution of
statute
than the Public
prospectuses to pur¬ latory
chasers of such securities.
The Utility Holding Company Act of
Act provides civil and criminal 1935.

tion of the registration and

Texas Eastern Trans.

120

the

purchase and sale of securities.

with the

securities

*Tenn. Gas Trans.

upon

periodic filings.

These companies are subject also
to the proxy rules of the: SEC
which I will describe in more

It provides
registration of these securities these companies.

liabilities for fraud in the sale of

5

♦

annual and other

the

of information to

^Prospectus

issuer

closely that it would

as

Seattle Gas

the

about

security and are required
keep information current by

theory of regulation
they tain minimum obligations must be
exemplify, all of them have the fully set forth in the indenture
have to limit itself to a schedule common purpose of investor pro¬ agreement, and the old-fashioned
I will give you a short types of exculpatory clauses are
of fees or profits in selling se¬ tection.
outlawed.
curities to investors.
We could description of these statutes to
Those who remember the de¬
penetrate so deeply into the man¬ show you their general coverage;
but
I
will discuss only a few pression remember some of the
agement of business itself as to
interfere with corporate policies cardinal provisions.
shocking and heart-breaking col¬
that seem unsound and may lead
lapses of investment trusts that
The 1933 Act
to loss for investors.
undertook, at heavy costs, to do
We could
The Securities Act of 1933 has investing for the public.
The In¬
We

Northern Indiana P. S.

Puget Sound P. & L.
Spr. Br. Water

three

than

more

can

Mississippi River Fuel

Scranton

information

to be offered to the public.

on

capacity

direction

address

Affairs,
Chuch

Iowa Public Service

I

by

regulatory fence.

different

a

one

But

^Interstate Power

shared

new

my

traveling

Federal Water & Gas

Indiana Gas & Water

of

measure

that

say

be

East Tenn. Nat. Gas

Gulf Public Service

obvious

is

whom

both sides of the
In

Central Illinois EI. & Gas

for trading on
these exchanges
must*regi£ter them by filing ini¬

be members of the
system
of
pa¬
that I have not cradle-to-grave
party.
The
SEC works
ternalism.
We
could, conceiv¬ same
changed a word of -my remarks.
under seven separate
pieces of the worst types of negligence.
ably, make sure that only the
The job of protecting and serv¬
Although these laws Under the Act, the trustee cannot
soundest of securities
are
per¬ legislation.
ing the investor is a job which mitted
differ in scope, coverage and in occupy a position of conflict, cer¬
to

than

;

of

expect to bring to my new tasks

PUBLIC UTILITY

and

President, Mr. Francis evidences of debt of the corpora¬
Regulating Trust Indentures
Tonight, there¬ tion to the investor.
The Trust Indenture Act of 1939
It is through the issuance of What I would like, to do tonight is
fore, I address you as one who is
in midpassage from the land of such securities that corporations to help you appraise what your has as its purpose to require the

its retiring

Moreland & Co.

It

But even more important than
with
practice
and
vestors, in the sense in which we consistency
are going to talk about them to¬
custom in the financial commun¬
that
guides
the
destiny of men does not night, are people who have trans¬ ity is the need to find a system of
always give advance notice.
1 formed their money savings into investor protection which is con¬
did not know then that by Feb. 13 stocks, bonds and similar securi¬ sistent with the way of life which
These securities represent our people as a whole are trying
I would have accepted the offer ties.
of
the Presidency of the New either some form of ownership in to work out in this democracy.
T.

E.

fate

The

Precision Castings
-

serv¬

missioner.

Yes! Defense Work!

•••«

as

to¬

night

Commis-

sion

■

Many Approaches to Regulation

on

the

1.

of finance and securities distribu¬

tion.

takes these practices and customs

be¬

me

staff

the

dynamic and expanding democ¬

racy.

years

of service

hind,

Lynchburg, Va.

LD 39

the

of

of

for

ap-

SEC

and practices.
Com¬
panies which list their securities

to

end

no

pletely.
Somewhere, in between, is the

the

pointed

Camp Manufacturing

the

with

rules

hand, we can go to the extreme makes it unlawful to manipulate
of a dog-eat-dog system of an¬ the
market
price of securities,
archy by keeping our hands out provides
for
registration
and

months ago

some

over

their

tial

worth.

investor protection.

As long as I remain in the field
remarks I of finance I will continue to golden
going to make tonight I was a strive for enlightened investment, golden
you

thought

se¬

cept
absolute
tyranny
to
the
lengths to which government could

have not changed.

goals

its

and

are

what

of

tot-register

gives the SEC authority to review

and the

necessary

the invitation

received

I

address

and

particularly

as

conception

Two

and constructive. Stressing pub¬
lic's proper function as dominant source of venture capital, con¬
cludes its enlightenment is good business and good democracy.
tions

Bank of

American Furniture

some

curities

patchwork with at least one serious gap—which the
Lauds proxy provisions and regula¬

a

We could go even further
impose a set of price controls
securities markets geared

our

to

Frear Bill would remedy.

*

managements when

dividends and how much to

in

Commission. Asserts although it has
achieved extraordinarily extensive investor protection, it still

the

of

was

tional

and

laws administered by the

#

prior thereto

Manager

pay.

y

Good-

merly with Merrill Lynch,
Fenner & Beane and

-

Commission;
President-Designate, New York Curb Exchange

He was for¬

win, 625 Broadway.

McCORMICK*

Member, Securities and Exchange

associated

Walston, Hoffman &

with

Protecting the Investor?

Aie We

Calif.—Thomas A.

Hutchinson has become

to pay

Buhl
254 Park

Building, Detroit,

REctor 2-7800

»

OFFICES: \

\

'

Mich.-j-l Press Plaza, Ashury Pai&c, N. J.

Ave., N. Y. C.
SPECIALISTS IN

§
RIGHTS

Produce Exchange, N. Y. C.

i

The

Robinson-Humphrey Company

RHODES HAVERTY BLDG.

TeIetyptes-rrrAy"p|288 and AT 142
FOR

40

YEARS
Ot.'v

,

ATLANTA

►

1, GEORGIA

Long Distance 421 and 422

40

Volume 173

Number 4986

.

.

The Commercial and. Financial Chronicle

.

(713)

5

World Bank Bonds to
Steel

The;

Production

Reach Market

Electric Output
Carloa dings

Retail

State of Trade

>

offering of new issue of
$50,000,000 25-year 3s expected
about Feb. 28. Sponsoring
group

Index

Auto Production

Industry

Business Failures

"

of

J
of

But

—

notwithstanding this, overall output

level for the similar week

a

points with

affected by the strike, while
electric production on the other hand rose to a new historical
high
level.
In keeping with the upward trend of
prices, Dun & Bradstreet's wholesale food price index climbed to a new

IVz-yeox

peak.
scramble for steel, copper and aluminum is
bringing a
Controlled Materials Plan and, according to "Steel," the weekly
magazine of metalworking, it will be in effect around July 1.

.

,

,

,

which

started ; in -1943.r

production

requiring

Then

;

,

Important differences will exist between the

as

managers of a sponsoring group
of 32 banks and investment bank¬

houses,

tiations

available

new

/

.

CMP

and

practically all nonessential

steel,

aluminum

and

copper

equitable plan for distribu¬

an

be quite

1

.

a

scramble

sue

of

bonds,

be

for

this

could not

overcome

and bad weather.

the

handicap of the railroad switchmen's strike

The consequence

drop of 100,000 net tons

was a

in ingot output last week.

Pressure

the

on

mills

mounts

daily.

Defense

and

related

requirements

are rising steadily with
corresponding reduction in
supplies for the general trade.
Steelmakers are booked well into
third quarter on DO
business, but they are only now setting up

customers'

quotas on regular accounts for April. Indications
allotments will be at least 10% smaller than in March.

are

The most significant development
pricewise revolved around
imposition of ceiling prices on scrap by the Office of Price Stabil¬
ization.
The ceilings, effected Feb. 7, roll back
prices from $6
-

to $10 per ton on standard
grades of scrap

cialties.

Surprisingly,

and up to $60

the government control action

relatively little criticism in the trade.

on

is

greeted

The rollback is about

in line with expectations and the
ceilings are considered
ciently high to encourage collections.

Consumer

by

climbed to

incomes

the

continue

Department

annual rate of

an

to

of

current

show

such

figures
incomes

$240,700,000,000 in December, chalk¬

amounted

v

slashed
back

as

could

an

It

was

Capacity

irate and perflexed auto

from

much

as

industry is pondering
Washington that steel use in autos may be
40% during the second quarter. Such a cut¬

mean

unemployment of nearly half a million men—
unless placing of defense orders is
miraculously speeded.
NPA
is planning the cutback because previous
cutbacks on nonferrous
metals have not curbed Detroit's
appetite for steel, states the
"Iron Age," national
metalworking weekly.
Steel capacity expansion
during the next two years will re¬
quire about 10,000,000 tons of steel, but so far the
government
has not recognized that it takes steel to
make steel by
setting up
priorities for steel expansion.
In

order

to

is¬

We

is'
on

||

fund,
year,

the

*

sinking

beginning in the twelfth
calculated to retire 50% of
before maturity.

;The proceeds of this issue
to

take

care

L

A. Wilfred

May

,

bank's cash

requirements for the.

the

sponsoring

group* includes: The
National Bank of Chicago;"

Halsey, Stuart & Covlnc.; Bankers
Trust Co.; Morgan Stanley &
Co.;
The National City Bank of NewYork; J. P. Morgan & Co., Incor¬
porated; Kuhn, Loeb & Co.; First

National

Bank

of

New

York;
Co.; Chemi¬
Co.; Guaranty
TrustrfjCk). of New York; Bank of
America, N. T. & S. A.; Blyth &
Co., Inc.; Dillon, Read & Co.,
Inc.; Drexel & Co.; Glore, Forgan
&
Co.; Goldman, Sachs & Co.;

Manufacturers
cal

Bank

&

tend

to be

keep their expansion programs

schedule

Continued

on

steel

page

33

3%% Convertible Debentures, due 1963

Trust

Trust

Ripley
&
Co.,
Inc.;
Kidder, Peabody & Co.; LadenBurg, Thalmann & So.; Lazard
Freres & Co.; Lehman
Brothers;
Merrill Lynch,
Pierce, Fenner &
Beane; Shields & Co.; Smith, Bar¬
ney & Co.; Stone & Webster Se¬
curities
Corp.; Union Securities
,Corp.; White, Weld & Co.

thermore

Halsey, Stuarl & Co.

Members

120

New

York

Broadway

Stock

on

Offers

Utility Bonds

The net proceeds from this fi¬
nancing, together with funds to be
received
current

by the company from a
offering to common stock¬

holders

shares
per

of

of

an

additional

common

in

the

that

borrower

the

affirmative; adas

their

including

—

over

other,

Let

us

savings 1
investments, ;

fixed-interest

consider:—the position of those presently buying

now

E Bonds

new

'

y,.

wNew York

.

j

accepting the "extension" privilege about to be
j
certificates; merits of the de- t
mands for. additional guarantees via "escalator"
provisions; whether !
whatever defrauding has occurred is ascribable to the
Treasury j
Department; and what relevant external remedial policies should j
be adopted.
'
or

offered to the holders of matured

,

the

In

-

.

first

place, the enlarged investment- advantages con:j
templated in the Treasury's proposed "extension" privilege should t
be noted. This would give the holder of matured bonds the option
of holding" them for another 10 years at an interest yield of 2.9% |
compounded semi-annually (3.3% un-compounded), at a 2^% \
yield if held for seven and one-half years, or cashing them sooner j
as

short-term

loan at reduced interest rates; and the right to
j
income tax payment on them until 1961. Also, they\
be exchanged into series F or G.
i

a

postpone
may

any

De-flation Hedge

Feature

The

prospective buyer of U. S. Savings Bonds must realize
that they of course entail the disadvantages bound up with all
j
fixed-interest savings media.
But, insofar as he is an investor,
j
he should consider them as part of a balanced over-all portfolio
j
by all categories of holders. They can be looked on as a good];
hedge against
It

possible future deflationary cycle.

a

this

to

seems

varied

writer

attention

on

the

trend.

/■••••,

.

prevalent

]

present inflationary movement,

j

that

despite

the public's

assuming the permanent

disappearance]

movements at least interrupting a long-term j
We must remember that, despite the many and:]

inflationary influences in peace and war throughout the

'40s, it took a full 25 years for the dollar's purchasing
sink back to its 1920 level.
Surely still existing are j
chronically deflationary forces, such as the nation's enormous pro-],
ductive (overproductive in some fields) capacity, which would of;
course be accentuated during a possible reduction of the armament]
activities.
In addition to the potentially enormous supply of goods -j
and services available for civilian consumption (probably exceed- ;
1930s and

to

power

any period excepting 1948-1950), deflationary factors include j.
increasingly heavy taxation, decreased purchasing power by the)

ing

Continued

on

page

$28

at

share, will be applied by the

utility firm toward payment of
part of the cost of its construction
program.

American Telephone and

The bonds will have the benefit
an

annual

ning in 1956. For general redemp¬
tion purposes the bonds are re¬

3%% Convertible Debentures

at prices ranging from
1042/4% to 100% of the principal
amount, plus accrued interest. '
The Indianapolis Power & Light

Co. is

Telegraph Company

sinking fund begin¬

Due 1963

When, as and if issued

public utility operating in
City of Indianapo¬
lis, Ind., and engaged principally
in the generation, distribution and
a

about the

of

electric

Subscription Rights

energy.

Prospectus on request
i

4

.

s

4 f

-

s

\

'

•a

N.

C.—William

B.

Little is with R. S. Dickson & Co.,

Inc., Capital Club Building.

'

Members

(Special to The Financial Chronicle)

RALEIGH,

-•

i

WERTHE1M & CO.

Joins R* S. Dickson
exc(uirj,g^s

!

other

(Special to The Financial Chronicle)

Exchange and

,

unique i

under-realized.

196,580

stock,

BOSTON, Mass.—Roger T. Shea
is with Chas. A. Day & Co., Inc.,
Washington af Court Street, mem-,
bers of the Boston Stock Exchange.

request

Telephone WOrth 4-5000




noted

we

of the Bonds—such

.

With a as. A. Day Co.

RIGHTS
Prospectus

inflation and monetary expan-*

no means

of major downward

Halsey, Stuart & Co. Inc. on
Friday, Feb. 9, publicly offered
$6,000,000 of first mortgage bonds,
2%% series, due 1981, at 101.515%,
plus accrued interest.

sale

and

'

these

vesting of the call feature in the holder rather

there is little warrant for

and

(When Issued)

i

unprecedented-; and that
are being exaggerated.. midst
the
inflationary psychology j
attending the current bull stock-market/ Fur- I

deemable

AMERICAN TELEPHONE & TELEGRAPH

equities.

both

1

per-

Harriman

of
on

investment

versus

j

the

the disadvantages of the Bonds

media

.

power

purchase of

,

In addition to the
managers,

First

by

than

the

next few months.

Bank

are

vantages
-

are

of

purchasing

the

inferior

on

Central

issue

expected

in

the

pointed out that

based

sion

to be dated Marchannual

used-

(2)

charges j
hind-sight; that they have been •;
two-way processes, depending on :the time *
period cited; that the government's Treasury- i
are

;

an

dollars

formance of the Bonds

Subscription books are to
by The First Boston
are

has occurred in. the

the

Bonds; and

upward

Following Rail Strike
reports

of

$50,000,000 of 25-year 3%
nearing completion.

1 and will have

$223,200,000,000,
$13,000,000,000 more

previous record set in 1948.

This week

which

De¬

are

The bonds

to

Steel Output Scheduled to Recover to
98.5% of

over

on the U. S.
Savings Bond situa-^i
we inquired
into the justification for the
currently popular i
charge that the past buyers of the series A-D Bonds, which are i
now
maturing, have been "cheated" by the Treasury in the fol\
lowing ways: (1) The intervening reduction .]

tion

concentration of

1950 as a whole established a
which represents receipts by

sources.

The total for 1950 as a whole
about $17,000,000,000 above 1949.

than the

and

suffi¬

high for the fourth consecutive month.

up a record

individuals from all
or

mount

Commerce

According to the Department,
new
high for consumer incomes

.

spe¬

last week's column

our

International

an

Misconceptions About the
Savings Program

In Two Parts—Part n

In

Corp.

..

The heavy demand for steel has kept the steel
industry push¬
ing to produce every possible ton, but in spite of all its efforts it

ing

that nego¬

—

U. S.

handled

,

released

the

velopment, looking toward

was

new setup, a large amount of material should
civilian; goods after the military and favored

for

civilian programs are supplied.
If
tion were not set up there would
"free" material. .>
;
■ ■; ■

with

announce

with

Feb.. 28.

banned.: Under the

-

National Bank, The

Corp., C. J. Devine &
Co., and Salomon Bros. & Hutzler,

ing

Prevalent

Hutzler.

Public offering of the bonds
presently expected to be made

since

Tatings effective and they are not compelled to spend a lot of time
looking for a supplier who will fill their order, and producers like
the plan because it keeps
material-hungry customers off their
necks, this trade paper, states.
/•;
-

be

&

their

users and producers will welcome the program,
them believe, the CMP of World War II worked
Consumers with priorities like the plan because it makes
of

civilian

Bros.

well.

Metal

.

Chase

MAY

IN DEFENSE OF DEFENSE BONDS!

investment

Bank for Reconstruction and

The

that

and

First Boston

Steel operations the past week declined over four

:

banks

Salomon

The

year ago.

carloadings and auto output also

most

and

noticeably above the

was

32

By A. WILFRED

banking houses to be managed
by Chase National Bank, First
Boston Corp., C. J. Devine & Co.

Total industrial production last week had two factors to
cope
inclement weather and the rail slowdown — both
which worked to a degree to curtail industrial operations.

with

Observations...

*■

Public

Commodity Price Index
Food Price

and

Shortly

■

Trade

;

120

Broadway

New

York

Stock

Exchange

New York

37!

The Commercial and Financial Chronicle
G

Thursday, February 15, 1951

...

(714)

the

in

Dollars Ate Now

rying- out of the policies
and thus far ineffective.
'

By JACQUES COE

Coe & Co.
Stock Exchange

Members New York

.

k>r

,

™

1949,

article of June 23,

our

and
^

j

*

e

4.

the

market

stock

in

a

grav

ing area.

most

the

of

lated

an

of

figure

exabt

The
quota¬
that

tion'

at

time

was:

ratio of

"This

the

Suppose
come

0ff?

war

we

wff
have

does

not

eveJf^probability *
s> p

'
Journal"

caustically

commented

«Walf'street

editorial

rfhfncjchange

-

danger

well-known

these

ket,

Q

I

Wall Street analyst

kets"

in

contrast

to "above4 ceil-

'

*

explains his "General Motors Theory" and

;■

applies it to recent stock market trend. Contends General
Motors stock offers a more reliable guide to future trend of
prices than other systems in vogue.

r

"

On Oct. 6, 1950,

stock established
months

Four

the

stock

happy

General Motors
high of 543/4.

taxes

,

to

in effect.

the

writer, at least, the

situation is far from hopeless. Cer¬

tainly there

is at least one
security — and

railroad

of

analysts

]

three—that !
most. portfolio 're- *

two

say

fulfill

should

type
some

or

.

nearly

Feb.

time trying to find stocks
maintain 1950 earnings
the
substantially
higher

now

But

And

—
when
these
stood at 178.90.

1947

,28,'

on

miliar

tour

years

ago

—

averages

Thus,

in this instance, the stock
to pick the bottom of the

of

failed
bear'

market,

which
was
not
June, 1949, when

of

until

the Dow hit its low of 161.60.

:

:

now

with

*

abor¬

bear

Dow

be

technical

has

market

aspects
stock

existence
been1 pro-

interpreters

by

fa- '

too

Motors

Only after the

nounced

/

-

warning to

not

may

the

General

the

theory/
a

word of

a

who

readers

same

reached

;

quirements.

The stock had given a
nal

a

can

under

able' to

been

not

that

and

passed,

have

has

-

a

closed at 255.17. »
;
Buy sig¬

averages

be stockpiled

°n attempts of certain officials to
should we
a
put fioors
under prices
below
in money rates, that little citadel
which
commodities cannot sell.
of defense might collapse ove a pr0p0sai5 jf adopted, well
nl£ht.
might bring about the creation of
In
all
the usual
phenomena ""white .markets," which is a terrm
near the peak of the
Stock Mar- used t0 sen "below floor mar-

investment
•

excellent barometer) up to this

i+vf
although

speculative to
stocks.

(heretofore

Wall Street Analyst

i
^

penetrate that peak.
Followers
Our whole all-out war economy
.fr0m
the standpoint of govern- of my market system have there¬
contracts, freezes, etc., is fore accepted this Sell signal, and
predicated upon the threat oC a they-disposed of stocks on Feb. 6,
fnl1_sra1p all-out. war with Rus- when the Bow-Jones Industrial
fuli_scale, all_out
Rus-

high that warehouses burst at
the seams?
This is not an idle
possibility,

fairness, one must admit

that the Bond Market

calcu¬
ratio

a

all

In

i nd ications
was

buying spree exhausts itself
reality takes its place.

so

Money Rates Vulnerable

prophetic

before

By STEPHEN J. SANFORD

,'j

and

sober

begin

another forecasting

still
formula).

One

could

market

stock

(this

buy¬

was

eral Motors was Oct. 5 at

commodity

of

it should not be very long

$54 /4.
in the "Chronicle" (The Coming Four months later would make
Market Upturn) we cited a num- this current week the approximaie
timing
wnere a
amuie
n
ber
of
reasons
why the entire mate timing where a decline in
In

form

lines, stuffing the drawers and
crowding the shelves.
With heavier taxes in prospect,
this

Top

of

merchandise, is filling up tne pipe

laugh."

have the last

Indicates Bull Market

many

every

including split-ups, mutual
fund expansion, and odd-lot buying. Says public has hypnotized itself into wanting equities in lieu of dollars. Terms mar¬
ket's current easy-profits condition "the period of deception."
Concludes people now switching from stocks into cash "will *
usually attending market peaks,

,

General Motors Stock Action

soft,

stop to think that this "scarebuying," which has been taking
place all over the country
in

of various danger signals

Market economist asserts presence

How

production

Partner, Jacques

Senior

is

people realize that
civilian goods in
the United States is the largest
in its history?
How many people

Preferable to Equities

<■

language r is

The

past.

broad, seemingly severe—the car¬

1

the

of

Theory does the four months' ;

Then, and not1
in¬ until then, when the stock of Gen¬
ception soon after President Tru-/ eral Motors- fails - to establish/ a *
man's unexpected election in No-; new low for four months to the ^
interval also

The

saw

an

rule begin to apply.

tive hear market that had its

Since the primary
is: ac¬

1948.

vember,

rule of this market system

day, it is1 my interpretation that '
a:
new
buying 'opportunity has'4

»
cept a sell signal only in a bull arrived.
be' market, and a buy signal only in
Unfortunately, the action of the 1
over-abundance of new untried -some priCe roll-backs—also some' a bear market, what would nor¬ stock in
ment stocks,
picking bottoms has not
while as yet. showing no stability issues blossom forth liberally cap- wage - adjustments
upwards.
In mally have been a sell signal on had the outstanding success that
or
upturn,
nevertheless has Vitalized on future earnings and other words, one can expect sub- March 1, 1949, was not accepted it has had in marking tops.. After I
reached into a low area which has heavily
over-subscribed
before stantial reductions in the margins since the bear market was then in all it missed the 1949 low by 177
been seen before only in late 1937
emission. We have with us, how- 0f
industrial
profits
and; still existence, persisting until June of points.
But for those investors*
that year.
and 1932."
What followed is now ever, the familiar period of "stock4 more after heavier taxes.
satisfied with something less than.
Readers of-the "Chronicle" may
stock market history.
:
^
split-ups.'*' There were 33 splitThere appears to be a fundaperfection in their market opera-'
recall an article that appeared in
At present we take this formula ups in 1950 and at the rate atvmental differenec of opinion belions, I believe that the action o£i
in reverse.
This ratio of specu- which they are starting in 1951, tw.een
the
Treasury
and.^the these columns soon after the elec¬ General Motors stock offers a,
lative to investment stocks, while there will be many
more this, Federal Reserve on the matter of, tions of November, 1948. General more reliable guide to the future?
Motors had run into considerable trend of
rs
prices than other systems ,
yet
showing no
immediate year.
•
a
interest rates.
T h e * Treasury

signals

speculative to
invest¬

Still' lacking,- jng" black markets.

appear.

is

however,

Jacques Coe

the

phase where' an

In the

V

meantime,' there

may

.

-•

"

into

advanced

has

nevertheless now

downturn,

high

a

area,

seen

before

only in the early part of
the early part of 1946.
"This particular indicator, which
so
correctly forecast the buying
1937

and

in

area

the

forecasts

a

of 1949, now

summer

selling

According

"motor-steel

ratio"

(another long-term index),
with its customary time lag, the

selling

should have started
in December, 1950.

area

vestment

trusts,

the last week

—

we

odd-lot transac-

.

The last previous high of Gen-

INFLATION CREATES COLLAPSE

security-buying public has

itself

hypnotized
lars—but

-pansion
lative

"HOW TO MAKE MONET

into

state

a

and resolution.

of

equities.
can

boom

project
into

a

vulner—

Loans

on
securities, that is to
customers'
debit balances,
which were about $470 million at

a

say,

DECLINING

THIRD

Read

this

Profit

A

the

must book

it

book
the

cn

now

NOW.

way

DOWN.

Short Selling.

on

the

spring of
1949,
are
approximately $1,360,000,000,
about a $900 million increase.
In the summer of 1945, a full 12

PRINTING

80-page

from

beginning of the bull market

in

STOCK MARKET"

;

$1.00.

months

before the late 1946 bear

the highest loan figure
$1,060,000,000—today we are

market,

MARK WEAVER,

_

.

Dept. D-1, Box 1130

far

Administration can concompromise with dynabefore it explodes in

the

tinue

to

this action
continuance

accepted

firming

the

trate

its

high

Oct.' 26—and
that

time

con¬

as

the

of

The stock did

bull market.

pene¬

days late—on
appeared at the

two
it

Then

endar year!

With Stifel,

the

at

polls

startling

that

had

upset

not

"accident"

This

1 foreseen.
news

the

came

been

in

the

ST. LOUIS,
ler

'TWO
1. Formula

for

short

swing trading

term

(scalping)

stocks and grains.

in

1

repeat,

we

seem

.

of those temporary

things."

(Special to The Financial Chronicle)

level in February, 1947, were none

DETROIT, Mich.—Alfred J. Ros-;

happy to find the averages at

Signal"

A

Stock

The

featuring

in

Signal

the

"The

Spotlight."

covers

Speculators will short the market.
Investors who
must keep their the past he

continue

rwhat we

vitality

(which .may by past experience and collecting
a short while longer)
is all those numerous tell-tale
define as "the period of warning
signals
which
have

deception."
level

where

movements succeed

conflicting

each other in

stocks,

to

cover costs.

Name

a

San

Francisco

Bldg.

4,

California




We

.

pleased to

are

informed

than

the

buying

by Philadelphia, from which he reday-by-day developments.
The tired in 1930, died at his home at
buying is more emotional—is im- the age of 82.
by

government

of

The

was

with A. M. Kidder

Co.

announce

the formation of

to

conduct

40

wage

governments

have

a

Securities Dealers

general investment and brokerage business

Exchange Place, New York 5, N. Y.

Digby 4-4832

Kinsley & Adams Admit

Bell Teletype N.

WORCESTER, Mass.—Channing
recent

JUNGER & CO.

Members National Association

contracts

psychology and the
quick stock market

admitted

to
freeze order takes the same pat- partnership in Kinsley & Adams,
tern that practically all paternal- 6 Norwich Street, members of the
istic

S. H.

William D. Sherrerd
William D. Sherrerd, one of the
founders of Butcher & Sherrerd,

Profits.
Russ

&

has

Bradley

moral.

and is not influenced too much

mirage

LESTER B. ROBINSON

will not have too

with

their usefulness in the
They usually put together
story which should have a

Selling Better Than Buying

—the inflation

City

sell signal,
be no doubt.

stocks from strong to weak hands.

pressed
Address

can

funds employed

In my opinion, people who preconfusing the mind and fer dollars to equities will have
obscuring
the
distribution
of the last laugh,

better

Just clip and mail with

there

turnover

During this period the selling is

429

however,

become
affiliated
Higbie
&
Co.,
Guardian
Building, members of
the Detroit Stock Exchange.
In/
borough

June, 1949.
the present

About

past.

grains and cotton.

t

161 in

proven

It is the sort of atmosphere and

price

>

rapid succession with impressive i

The next four issues of "The

2.
„

$1

FOR

Mo.—W. Leslie Mil-,

Nicolaus & Co., Inc., 314 North1
unprepared, and followers of this
Broadway, members of the Mid¬
to be in a* system, along with most others,; west Stock Exchange.
were locked in long positions for
period of deception:
Every sharp
decline in the market should be the ensuing months.
With E. E. Henkle
While
the
final results
have
followed by dramatic recoveries
(Special to The Financial Chronicle)
satisfactory,
resulting
in
and, in some instances, new high been
LINCOLN, Neb.—Jacob S: North
prices.
This will happen just profits, commensurate with :the
often enough to reassure the mass 70-point plus rise in the Industrial is with E. E. Henkle Investment^
mind that there is nothing
to averages, I cite the foregoing-to Co., Federal Securities Building.
worry about.
When a real break show that no system is completely
does come, it will not be recog- infallible. Certainly investors who
>
With Bradley Higbie
had purchased stocks at the 178nized, but rather regarded as "one
To

too

and

and

price

followed

;

joined the staff of Stifel,

has

caughtrinvestors completely

ment

SANTA MONICA, CALIFORNIA

Nicolaus

(Special to The Financial Chronicle)

Obviously, to pick the right mo$300 million above that level.
ment is a matter of luck, but to
The exuberant state of "easy be able to pick the right area,
profits," with its glamour, excite- should be a matter of profiting
was

averages,/

exception, they have sold:
below 200 at some time in the cal-j
without

had

interpretation

my

Industrial

Dow-Jones

been correct.

One wonders how

Further ex- mite
this specu--everybody's face.

most

situation.

able

in

.

,

c

T

„

mind where it does not want dol-

3

.

Interest Rates Basic
plus side.
This is indisputable
The matter of interest rates is
evidence of broad public partici-' basic and should be determined
pation.
with a firm hand. Thus far, this
i crucial economic keystone has not
ruonc is &>en-Hypnotized
been approached" with realism
This

.

.

Investment Trusts has;
been the normal concomitant of a
bull market.
It is truly remark-.
able
that
notwithstanding
the
competition of these open-end intions have been so heavily on the

area.

the

to

stock for sale in

June, August and currently in vogue.
7
of wants to achieve the impossible—
to fight -inflation while*: at , the October, 1940, and While it had
It is still not too late
take
not broken through its June 24,
same time keeping interest rates
profits aggressively in your lioid-:
low. The French have a saying— 1948', high, it had equalled it on ings of industrial stocks. I leave;
;
"one
cannot make
an
omelet no less than five trading days.
readers with this final thought: in
In that article we explained that
without breaking some eggs."
every year in the history of the

expansiort

continued

The

open-end

S.

Smith

has

been

Boston Stock Exchange.

Y.

1-1779
JUNGER

S.

March

1, 1951

H.

F.

M. JUNGER

Volume 173

Number 4986

;

.

The Commercial and Financial Chronicle

.

<-•«

(715)J 7
part of the South, not elect to be
still another separate state.;
r..
v*

Washington

Ahead

/

Say what

money to
United States

of the 'News

want

you

costs

be
or

correspondents" which are
maintained for that purpose, that

in the nation's

capital

orbit.

been

Export

-

would

be

it

a

was

been

mitted

to

how

tried to.

to

comp letely
*

ponderance of

v

•

congressmen,
labor
and
the
like

ars,

would have been
had

this

happened.

overwhelming
has

taken

never

.•;

But I have been

sjnce

this

when

naturally goes
Civil War, the time
fought against
brother

in

the

Grant

end

Lee's

accept

surrender

And I must say that I
not sure that the South, itself,

am

have

would- mot
had

it

Think

what

would

been

succeeded

be

in

Instead

of

were

having

to

the

pay

backbreaking taxes we are now
having to pay and the heavier
load we are going, to have to
the South would

carry,

in

be

on

which

had

has

its

South

he/wouldn't

South

the
be

not

the

fight

Moscow imperialism.

on

Certainly it would get
money

of

as

the rest of them for

ter.

Every

secretary of
coffers

as

much

that mat¬

time. the
the treasury

running

low

South's

his

saw

he

could

appreciable

of

it..

it

that

and

H.

R.

You

•

it

be

is

"

the

death

Hamilton,
firm

LOS

of

caused

citizens

-to

Gettysburg,* Pa.,

at

New

York

be made with

may

would.. do
cities.
in

in

cities.

made

•

•

>

will

.

of

our

Russia

Studies

the

and

results

on

Frank

learn.

never

separate

The

in

nation,

would

not

to

could

would Texas
.

if

it

oil,

■■■

chose

to

be

FRANCISCO,

-

of

the

in

is

such'

flation" fears.

At the present time this "infla¬
tion"

psychology
is
apparently
transcending most other basic con¬

by
placing
mediums as will
decline

in

-

siderations.

sharply, perpendicu¬
larly, and virtually almost with¬
out interruption since July. Many

by advancing

this

manner,
th^
dollars, thus

amount

of

The stock market has

advanced

the

dollar

In

acquired will at least enable

stocks have doubled in value since
that

the

individual to keep

the

pace

with

stock

Boston

Building.

:

relative to the things
buys: The general price level

in

the

United

has increased

States

since

a

1

DENVER, Colo.—Mrs. Lucile A.

be

Bibin

the

Service

J.

staff

Corp.,

Street.

so

Ervin

and

Larsen

of

650

•

have

Investment

Seventeenth

-

'

■

a

Apart from other considerations
it is interesting to observe what
has happened at times in the past.

1940

125%.' Since Korea

prices have advanced 16%.

The primary cry heard today .is
that
"inflation"
means
higher
by
new
money being created through prices are inevitable—the Govern¬
ment debt is going to
Government deficits and
increase-r¬
through
and as the general level of prices
the expansion of
private credit

The dollar has

been

diluted

and

usually
tax-free

The result of this has been
increase in the "money sup¬

ply."

If the money supply or the
of
dollars available, or

amount

(Special to The Financial Chronicle)

What Happened in Past

depreciating
one

an

potentially available, increases

at

a greater rate than
the volume of
available goods, then the
pressure
of so many dollars

bidding for a
supply of goods natu¬
rally causes prices to rise.
) restricted

the

advent

of the

war

in

Korea, a new set of forces—or at
least rejuvenation of old forces-

Francis

I. du

Pont

&

advance

the

best

ways-to

protect oneself is to

own

equities,

or

of

one

common

stocks.

this

may

the

evidence

be

However true

over

a

long

period,

suggests- that

We

fWith Merrill Lynch

are

embarrassing detours
and uncomfortable bumps.
t
As

an

illustration,

suppose some¬

one

of

omniscience

tell

us

with

should

of all goods advance
30%, farm
prices jump 75%, average weekly

of factory workers grow
48%, the Federal debt spurt upr
wages

•

Continued

on

page

pleased to,

that

announce

.

herbert l. seijas

MIAMI BEACH, Fla.—Joseph A.
Oritt has-joined the staff of Mer¬

(formerly of Blair, Rollins & Co., Inc.)

;

Mr. Andrus
•

previously

C. F. Childs and

rill

Vice President
was

Lynch,

Pierce,
Fenner
Beanp; Lincoln Building.

Vice President of

-

Joins Foster & Marshall

with

-

previously

,

was

Vice President

of

has been

Foster

r

INCORPORATED
*

&

added

to

Street, New York 5, N. Y.




[]'.

-•

us

in

our

Trading Department

and

lloyd

a. ? Mcdowell

(formerly of Wm. J. Mericka & Co., Inc.)

is

now

associated with

us

as

the

Marshall, U. S.

Manager of

With Merrill Lynch

our

Research and Statistical Departments

J. F. Reilly & Co.

:

(Special to The Financial Chronicle)

15, 1951

■'

:

#

PORTLAND,
Pickett

February

associated with
-■

National Bank Building.

J.q.WHITE & COMPANY
37 Wall

-

PORTLAND, Oreg.—William B.
Mersereau

Hayden, Stone &. Co.

staff

1

'"■•■; ■'

(Special to The Financial Chronicle)

associated

FOUNDED 1890

w

now

&

Company

Vincent W. Howard
Mr. Howard

is

is

Oreg.—James

with

Pierce, Fenner &
Building.

H.

Merrill

Lynch,

Beane,

Wilcox

Incorporated

61

Broadway

no*;

unerring accuracy
that during the next two-year pe¬
riod, industrial output would in¬
crease
60%, the overall price level

(Special to The Financial Chronicle)

...

the

road has its

Co., 121

Southeast Second Avenue.

J Dugald White,

MALON S. A N D R U S,

time

lic reads of

pur¬

it

bonds.

Corp.,

Investment Service Adds

Previously Vice President of the Company,
Director

to¬

word

protect

localities, which borrow
through the medium of

of

Dudley g. luce, president

as a

same

MIAMI, Fla.—George A. Lowander.has been added to the s'.aff

Tlfe Board of Directors Announces the Election of:

Luce succeeds

the

at

consumers

increase the "money sup¬
ply." Hence^ the Upward pressure
on
prices and the growing "in¬

The

celerated-spending by States

(Special to The Financial Chronicle)

Mr

production

,wages

market

power

such

future

value.

With

who remains

must

a

greater

.

4

Calif.

With Francis I. du Pont

/

and

t

S. Fuhr has become affili¬

joined

and

decline

agement

Louisiana would be able to hold

tidewater

credit

—

DENVER, Colo.—Allen Rose has
joined the staff of Hamilton Man¬

on

subject to such experiments.
its

•

that huge governmental expendi¬
tures and full employment at high

economy,

and

may
as

one

*

(Special to The Financial Chronicle)

avalu.-

South,

of

debt—mortgages, instalment
With Hamilton Managem't
buying, bank loans, etc.; also, ac¬

then

we

materials,

facilities away from the output of
civilian goods.
This reduces the

supply of goods needed and wanted

Therefore,

into

value

Rudolph & Co.),
749 Market Street. In the
past he
was
with William Walters, -Secu¬
rities Co. and Capital Securities
Co.. of Oakland.

goes.
If
Russia with its secondt-

production.facilities

to

'.'purchasing"
funds

(Special to The Financial Chronicle)

SAN:

find

could

new

by

ad vance.

power.

reasoned,

Stephenson, Leydecker

.

view

than

war-^-

of

■

o,f

bombs

own

continue

chasing

"

-

the expression

as

wait

rate

of

construction

The more the' pub¬
inflation, the more the
permeates the air, it fear grows;,'Then, "What to do?"
spellbinds, it frightens, it promotes becomes a
question
that
goes
the buying of
"things." The dollar through more and more minds.'-

California, 210 West Sev¬

»-

and

to

materials

and

time.
On
the
"average,"
prices are the highest in 20
years.
Stephenson, Leydecker & Co., 1404
Thus, it is probably a rea¬
increasing prices for the "other sonable
Franklin Street.
assumption that a great
things" he needs and wants.
oft•n.-V,
'
*
'
deal is already being discounted
]
)
No qne '•can
effectively argue by the stock market.
'
Paul Rudolph Adds
„■ that
the "dollar" has not been

modern

way

with

and

defense

_

the bomb

populous
better

advance

some

ated,
we

to

What

a

goods

for

in¬

On the

"inflation"

Calif. —Fair.

(Special to The Financial Chronicle!

other Eastern States may. well be
concerned
about
future' tests
determine just what

along

ing

continues

August Huber

ated .with Paul C.

of

n c r e a s

etc*

OAKLAND, Calif. — Edgar P.
to Hornsberger is now affiliated with

on

miles away.
Residents

Why?

restrictions,

op

ANGELES,

of

At

this

^hundreds

hand,

produced

supply.

plant facilities—would take labor,

more

of

reflect

the

understand

can

year

deaf

further

should

the money

raw

the

Edgar

associate

an

enth Street.

afraid

most

neces¬

regulation

With Standard Investment

the nation

possesses

on

This

crease

other

magic

The

seems

entailing

Higher taxes,
price controls,

Street.

with

new

Inflation.

Sunday, Feb. 11.

when you read of the disturbance
the recent tests in New Mexico

onto

through the "for¬

the

United

quantity

must

a story in a New York or
Washington
newspaper,
which

done

Paul

when

the

that only

any

plant

be

in

itures.

full

ears.

Raymond Kenney & Co. has

announced

are

it. secede.

being

rule

nation

be

France, Greece, or any

let

built

these

worldwide

injustice

an

that

United

its

V.

now

South

building of it, and it

drop

in

D.

The possibilities
New

inevitable,

A

program

sarily high governmental expend¬

the

are

defense

governmental

Confederate
of them

was

dividend

Edgar Paul Hamilton

con¬

States would not have been in

out

States

Federal

formerly

prices.

probability

i

along with the
rest of the country, panicky about
the
atomic
bomb, because the

just promising to stand with the

as

were •

75

accelerated

and

reductions for

(Special to The Financial Chronicle)

the

aid, of course,
TVA's, but this would be
nothing like what it would get by
such

in

some

as

wonderful

a

which

It

.

Federal

dealt

sterling.

in

to

of

Inc.,

again set in motion.

were

ad¬

The

Johnson. & Co.

trading to "Confederate'.'
nations; that is, those na¬

to

fight. Stalin.

Both

the

with which

its

Marshall Plan aid, North Atlantic
Pact aid and the other handouts

share

Inflation.

not

stock

.

South wouldn't be,

a

<

.

Leary

Co.

position

today if it

separate state..

J/

do

seceding.
it

pretty

a

brook,

get

giving

By

.

money

have

bull market.

fall

Charles

—

William

;

becomes of whether Lincoln didn't

better- off

in

States

earnings

affected

of

old R. Johnson has been added to
the staff of Standard Investment

wouldn't

in

sword

and such:

corporate

versely

associated with Coburn & Middle-

No, the more one thinks about
it, the more serious the question

birthday

mind

global

as

out

stock

"inflation psychology," may

as

current

estimates of lower 1951

Coburn, Middlebrook

BOSTON, Mass.

endless.

lot

a

the

to

brother
and

wondering

Lincoln's

last

one's

back

^

.•.......

trade?

just

of

of

have

I

so

Recent

<

Austin and

something
to have and

United

the

deal

seriously the jibes of

'friends.

rpy

weight

been and

Foreign

is

got

money,

Everything

to

well

as

be at basis of

/

fe-

(Special to The Financial Chronicle)

in it. Well, the South
certainly take the position

tions

terrible thing

a

worked out just as it should have,
the

opinion

simply

block

it

that

so

able income return,

had

is

great many other factors, in

a

prices have declined substantially in face of sustained advance
in general price
level, and therefore other factors such as favor¬

engage

fine

leaders,

scientists

trade.

told,

otherwise, it would have to

long expressed opinion by schol¬

what

we

are

inflation, which influence security prices. Points

there have been intermediate occasions in
past when

Why?

With

that it couldn't engage in this
for;eign trade unless it had dollars,;

Bargeron

pre¬

-

undertaken

licitiously." referred

South as a
have to be

would

nations

could
Carlisle

the

any¬

leadership.

"forthcoming,

too, the

are

does

other

is

drowned
in

we

foreign

'course,
stuff

try

,

foreign

on

trade,
you've

back

Of

Mr. Huber contends there
addition to

assured of that.

-Naturally,

there the time

such

quickly

separate state
in

not

.

you can rest

'the

per¬

secede

South

lucky that it didn't win,

least, a World Bank or
Import
Bank
-Vloan"

to
as

South had not

it

At

;

Shame

am

way of seceding now.
back when the scholars, con¬

But

was

jibes

that

Spencer Trask & Co., Members New York Stock
Exchange

to say it
not sug¬

me

I

By AUGUST HUBER

a

as

individ¬

gressmen, labor leaders, scientists
communism seemed to be getting
and the like were
compiling their
out of hand down there, that therej
verdict that even the South was

career

subjected

and

the

thing-by

eign

increasing pressure that the
South join in Russia's economic

such

Far be it from
worth

gesting that the

even
an

as

isn't

Having been born in the South,
although a long time away from
there and not, I
hope, a profes¬
sional Southerner, I have in
my

part of

a

ual./

it

to,- but it

today,

sovereign state

By CARLISLE BARGERON

long

Inflation and Stock Prices

.

From

.New York 6, N. Y.

29

The Commercial and Financial

(716)

8

ful

Atomic Bombs and Investments
effects

bombs, they will have no adverse

of atomic

attack. Cites
in atomic age.

and

W. H. P. Blandy).

become

have

persons

hensive

and with

over

.feet

for¬

some

country
may suddenly
.atttack the

Te

States

equipped

a

to

pos¬

sibility,

but

rather

ex¬

am

i

to

ernment, municipalities or cor¬
porations would have any value

and

n e

analyze the manner in which such to American citizens.
aa
eventuality would affect in¬
Assuming that we are attacked
vestments in this country.
and eventualy win, then the writer,
To begin with it might be well l'eels that municipal bonds, pay¬
to briefly outline a few of the well able from unlimited ad valorem
known facts surrounding the atom taxation, will prove to have been
bomb.

sound

16, 1945 the first atomic
explosion created by man was in

by the various States should main¬
tain
their
relative
values. Al¬

On July

100 miles

the New Mexico desert
northwest

Los

of

The

Alamos.

first atomic bomb used in warfare
was

dropped

Hiroshima, Japan,

on

investments.

Bonds issued

commercially sound it would
seem
that with American energy

60%

and

of

was

78,150

persons

11, 1945

On Aug.

killed.

were

343,000

and

obliterated

second atomic bomb was

a

dropped

ingenuity they would soon be
An example of this may
be noted in the case of San Fran¬

rebuilt.

In 1906

cisco.

About 33% of that conflagration

on^Nagasaki.

"city was destroyed

and out of

a

total of nine atomic bombs

a

have been exploded under tests at

Bi&ini, Eniwetok and in the desert

an

over

wide

a

United

and

States

days,

nearly

industry
on

everything
oil

crude

wealthier

far

better

and

Investors

constructed than before.

only did not lose

in its bonds not

later found that

their money but

500

produced

re¬

diestruction of property

when used
Nagasaki. How¬
building construction usually

-a.t Hiroshima and
ever

found in Japan is of
ent character

in the

a

far differ¬

than that employed

majority

of

buildings

should

company

tory

one

under

cities

the

in

Let's

The

most

a

and to the

lieve that such

It is hard

New York 4,

a

61

a

new
service
securities by
sending brief items of important developments oh securities in

-

for

the

first

time

York 6,

were

seem

Much

corporate field it would

wooden

that public utility

represent

relatively

a

the

In

vestment.

securities
in¬

secure

of

event

an

,

American

atomic bomb attack the numerous

'

o£ atomic
an

or

nuclear

energy

was

achievement equivalent to the

/«*

discovery of fire* but there is

■i

doubt

no

that "warfare,1 perhaps

ci-

The

writer, *wW is-connected with
*.
tfantfrartcn 8l Co., New York City, is a
^graduate
mechanical -engineerCornell
■

r

i

University. He has been engaged inenginooring and the-investment business for
aumy years and <ts -a member of the Cor¬
nell Engineering , Society and the New
Y«**k Society of Security Analysts.
!
.

,

grid

York 5,

Gas and Electric

American

later

I

War

ironclads

warships

Another

torical

AN EXECUTIVE

INVESTMENT MANAGER

lation

unusual

opportunity

Is

available

and
in

a

successful New York financial institution for
a.

top

flight

t« bead

ages

a

many

executive

long established staff

manager

that

equities.

Requirements

in¬

leadership

and

of

the

Allied

record

for

cation,

expected.

results.

Write

stating

record of
age,

Financial

7, N.

Pan¬

"Texas

which

Box

N

Chronicle,

215,

edu¬
salary

25

Commercial

Park

Place,

Y.




heavy taxation

In

120 South La Salle

armies.-

have

Street,

McKelvy
their

&

Co.,

111

added

and

749

•

William

Schein

Sidney

staff.

.

\

of

the

above

utility

suggestions
made to

energy

source,

an

endeavor has been

pick out sound situations

not

in

the

less

dependent

for

crowded

New

Maine Central

Miller

is

with

Bros.
He

&

was

securities

purpose

&

Hentz

Co.,

60

Nickel

Plate—Analysis—Raymond & Co.,"

9/Mass.- / »■ ,"*
1
1
analysis of Verney Corp.

"r

Co.—Analysis—Baker,

>

r

Simonds

&

Tool

Company—Report—Loewi & Co., 225 East
Milwaukee 2, Wis. •'-v1';'/;{

Mason " Street,

Plywood, Inc.—Bulletin—Barclay Investment Co., 39
La Salle Street,

Chicago 3, 111. ^*,T

,

"

■

,

\

<

.

South
i

Portland General Eleetric Co.—Analysis—Ira Haupt & Co.,

*

Broadway, New York 6, N.-Y.;
Puerto

sources

N.

Puerto

to

York

Salomon

Hutzler, Russ Building.
previously with Henry F.

Swift & Co.

electric

Rico—Circular

describing Puerto Rico Water Re¬

Electric Revenue Bonds and a booklet on
Rico—Paul Frederick & Co., 70 Pine Street,
New
Authority

5, N. Y.

"

zinc and lead

Broken

'

.

'

-

Hill Development Co.,

Ltd.—Report

on

producer—New York Hanseatic Corp., 120 Broad¬

New York 5, N. Y.

Riverside

Cement

Company—Card

memorandum—Lerner

Post Office Square, Boston 9, Mass.
Also available is a memorandum on Gear Grinding Machine

& Co., 10

Co. and
•

on

Seneca Falls Machine Co.

Trailmobile—Analysis—Joseph

Mayr

&

Co.,

50

Broad

Street, New York 4, N. Y.

With Waddell & Reed

Industrials

Industrial

vs.

Manufacturing

National
;

way,

Larabie

Also available is a mem¬

'

Co., Buhl Building, Detroit 26, Mich.

(Special to The Financial Chronicle)

D.

.

Securities Corp.,

.

With Salomon Bros.

ert

^

Railway—Analysis—H.

Also available is an

•

■

lit

(Special to The Financial Chronicle)

particular

Northern

148 State Street. Boston

I.

Tracy,

&

Street, New York 4, N. Y.

Rhodesia

primarily from one large
particularly a dam.

&

Stratford Pen Corp.

on-

Great

^

Beaver

.'?

Market

Inc.—Memorandum—Rogers

Street, Chicago 3, 111.

Broadway, New York 6, N. Y.

orandum

which is
about

Calif.—Paul•

,

,

Gerotor May Corp.—Memorandum—Aetna

to

Rudolph Adds Two*

-

<■.,/•'.

.•

Street, Minneapolis 2, Minn.

Bottlers,

General

SAN FRANCISCO, Calif.—Rob¬

each

developments.

Haupt & Co., Ill Broad¬

Stock Corp.—Memorandum—J. M. Dain & Co.,

110 South Sixth

Do not worry

come. :

Rudolph

communities, none
more
than 52,000

has

Pacific—Analysis—Vilas

&

World

Americans

SAN FRANCISCO,

C.

Replies will be considered strictly

confidential.

York

industrial securities;

full details of experience and

of
to

York 6, N. Y.

First Bank

doomed

in

and

(Special to The Financial Chronicle)

residents.

areas,

successful

the

15

serves

ot railroad, utility and

a

Company, serving

St. Paul

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

way, New

.

of

operating

experience and

con¬
Southwestern

Its territory has a popu¬

qualities; up-to-date eco¬
nomic Information; and extensive knowledge
wide investment

the

Corporation—Analysis—Bache & Co., 36

Dresser Industries—Review—Ira

man¬

millions of dollars of investment

funds —mostly
clude

investment

.

618,000.
The company
operates ten interconnected plants
of

An

is

Service

Amarillo

—

riod
sure

utility deserving

sideration
Public

[

Corp., 120 Broadway, New

Also available is a leaflet of current Railroad

It is inconsistent with their his¬

,

■•

Company—Table of

Telegraph

York 5, N. Y.

Milwaukee,

Chicago,
& Hickey,

poison gas threatened the

dstruction

165,000 including 85 cities, not one
of which has over 150,000 resi¬
dents.

Steel

Wall Street, New

over

efficiently managed in the indus-1; the future of the United States—
try. It serves a closely integrated we have passed through darker
territory with a population of 4,- days before.

handle."

WANTED

Com¬

the largest and most

pany, one of

and

N. Y.

Bethlehem

of

systems

Telephone

*

*

'

related values—New York Hanseatic

interconnection be afraid of anybody. Otherwise
between electric light and power their ancestors never would have
graphs -taken in Hiroshima after
left Europe and braved the ad¬
the bombing show that about the companies should serve to quickly
supply
areas
where
individual ventures of settlemen there. There¬
onstystruc aires which apparently
fore be of good courage, go about
withstood the force of the explo¬ plants may have become seriously
your business, live your normal
sion were the concrete and steel damaged. This would be particu¬
make
your
investments.
larly true in the case of utilities Jives,
buildings erected;: by -American
populated
centers. They will be necessary to supple¬
engineers.* The practical release serving 1 less
ment your income during the pe¬
One example would be that of the
In fact,'the photo¬

U«ted- States:

,

his

Public Utilities

the

In

'

Y. Y.

*

saddle

a

a

& Co., Ill Broadway, New

he is interested—Ira Haupt

which

large part of what is now West¬
Europe mainly because he
for

describing

Service—Brochure

Watching

ern

used

$1—Formula for short term swing trading (scalp¬

planned to help an investor keep posted on his

revolutionary weapon to threaten
Christian civilization. In the year
1221 Genghis Khan was able to

with his Tartar horde

Oliphant & Co.,

Broadway, New York 6, N. Y.

Robinson, 429 Russ Building, San Francisco 4, Calif.

The atomic bomb is not the first

sweep

"

Securities—Brochure—James H.

Two for

seriously hampered except by a
complete destruction &£' 'our
'

up-to-date

an

ing) in stocks and grains and next four issues of the "Signal"
featuring "The
Stock in the
Spotlight"—$1.00—Lester B.

widely scattered

and diversified structure could be

N. Y.

Railroad

be¬

to

Louis 2, Mo.

both as to yield and market performance over an elevenperiod—National Quotation Bureau, Inc., 46 Front Street,

ages,
year

househpld supply needs

the citizens.

of

showing

Over-the-Counter Index—Booklet

This

year.

,

comparison between the thirty listed industrial stocks used in
the Dow-Jones Averages and the thirty-five over-the-counter
industrial stocks used in the National Quotation Bureau Aver¬

a

$100,000,000

'['*■

,

companies

Natural Gas—Circular of recent data on sixteen

Electric Company
grouping of many
businesses
producing
at
least
200,000 products in 115 plants in
various parts of the United States.
In the group are at least 15 separate Organizations
that each do
over

.

speech on railroads by Patrick
Co., 61 Broadway, New York 6, N. Y.

Scherck, Richter Company, Landreth Building, St.

General

actually

f

V

•

Traffic Tempt Us to Forget Our

Serious Problems—Reprints of

trying circumstances.
is

Military

Let

Not

B. McGinnis—McGinnis &

satisfac¬
the

'•fV:'•*'

Monica, Calif.

depends

a

in a Declining Stock Market—Eighty
booklet—$1.00—Mark Weaver, Dept. D-l, Box 1130, Santa-

IIow to Make Money

v

page

derivative.

prove

even

Portfolios—Breakdown—Laird, Bissell

Meeds, 120 Broadway, New York 5, N. Y.
.
t, •
.
\
;
Also available is a breakdown of Sources of Gross Income.;

cavalry operations.

terrific

a

'

in

mounted warriors which
destroyed, yet
the city was promptly rebuilt and was equipped with stirrups, thus
ducted in Russia.
-:
giving his men the advantage over
There is no denying the fact that today its credit is rated Aaa.
his enemies in

bombs

*

these

used

civilian life

or

some

Theory Service, Inc., 105 West
V
^
f
!

of' 336,500

average

an

barreds of crude oil daily. In

land.

atomic bombs have also been con¬

these

Government, Bond
&

abroad.- The company is currently

producing

Theory—Justin F. Barbour—Special bulle¬

months, $15.00—Barbour's Dow
Adams Street, Chicago 3, 111.

15%

only

1950—

interpretations, including 35-page introductory
each subscription—twelve months, $45.00;. three

with

folder

About

area.

30,

Dec.

market

of

85% of its business is done in the

property

a

ported fhat two test explosions of

It has been

"Los Alamos.

Barbour's Dow

tin

Socony-Vacuum is.a closely in¬

earthquake and

caused

they had a better security. In the
great fire of 1904 in Baltimore, 2,-

near

in

hundreds of localities.

most

of $350,000,000 and 450 per¬
were killed. Yet the city rose

loss

population of 253,000 about 40,000 sons
persons were killed.
Since that again,
time

of

though there is the possibility of company is not only vitally im¬
of portant as a supplier to the armed
services, but also to the railroads,
our leading cities, nevertheless, if
air plane industry, public utilities
their locations are economically
and

a

population

dairy

of

as

Wall' Street. New York 5, N. Y.
Banks—Comparative analysis of thirty-six representative
banks as of Dec. 31, 1950—Paine, Webber, Jackson & Curtis,
25 Broad Street, New York 4. N. Y.
Geyer & Co., Inc., 63

The Borden Com¬

leading distributor
products with outlets
a

Analyser—Tabulation

Stock

Bank

which

Company

following literature:

send interested parties the

to

tremendous destruction of some

United States airplane on
Aug. 6, 1945. Hiroshima with a
by

is

securities of our Gov¬

any

ter Kuilm

Curtis

However, the basic

prices.

understood that the firms mentioned will be pleased

It is

security of these issues remains as
Crude oil is not much use iii peace
it is today.
If we win the war
or war unless it is processed and
those bonds remain the premier
refined. An investment in such a
investment. If we lose it is doubt¬
far flung, efficiently managed, oil
ful if

depre¬

cate that

Naturally
attack would

decline in Government

some

bond

United

bonds remains

form of foreign

cause

quite

seems

at present.

same as

any

weapon.
The
objective of
this paper is

not

it

States Government

"the

to

such

launch

with

begin

certain that the position of

with airplanes

Tea

territory.

pany

located

here in the United States.

eign

United

Pacific

wide

possibilities in mind,

its

Recommendations and Literature

com¬

question arises as to what ef- tegrated oil company. Its produc¬
it may have on investments tion facilities and its refineries are

the

the possibility

of events

turn

of this

view

In

appre¬

very

This

operates 6,000 stores spread over a

been

many

that

and

itself, had been brought
past few months
considerable dis¬ to a turning point by this revolu¬
weapon"
(Vice-Admiral
about the atomic bomb tionary

cussion

General Mills.

tion of food is The Great Atlantic

vilization

the

there has

One of the leaders in this

has plants scattered over the
entire grain belt and it produces
a
wide
variety of ready-to-eat
cereal foods. Another economically
important factor in the distribu¬

intrinsic

on

Dealer-Broker Investment

products probably would
the
first
deserving

among

class is

greatly affected by an isolated

specific examples of desirable investments
During

food

Thursday, February 15, 1951

..

,

en¬

pany

position of government and municipal bonds. Holds securities
of utilities and industrial corporations serving wide areas
should not be

of

study.

contends, despite destructive potentialities

Investment banker

Concerns

gaged in the preparation and sale
be

KUILE*

By CURTIS ter

consideration.

Chronicle

A.

Ultrasonic Corporation—Analysis—Coffin,
South Broad

Street, Philadelphia 9, Pa.

Betz & Co., 123

*

MARSHALL,. Minn.—Melvin L.
for

require

this

Abbott is associated with Waddell

care¬ ■&

Reed, Inc. of Kansas City.

Wisconsin
Baird

&

Bankshares

Corp.—Memorandum—Robert

Co;,t 110 East Wisconsin Avenue, Milwaukee

W.

1, Wis.

Volume 173

Number 4986

.

.

.

The Commercial and Financial Chronicle

(717)

it

because

The Gold Standard, the People,
And the Gold Mining Industry

and

treatment

Government
no panacea,

ited

for

been

thousands

used

of

money

Archae¬

years.

ologists have dug
which

as

gold darics

up

minted in the time of

were

Darius

Great

of

Persia,
500

quantity

to be much

of

in

gold

free

a

is

It

today.

used

$jhe

course of
centuries hun¬
dreds

obtain

the

for

gold

only people, unless it

manufacturers, whose

nation

a

to

be

on

standard;

namely, gold
legal tender, all

Since

has

dard

1930's
been

the

sist

on,

economists

used

to

time

given
the gold
Donald L.

standard;

Kemmerer

willingly, many have dene
so reluctantly.
Nearly all have re¬
turned to the gold standard again,
and many have been on and off
so

Our

times.

experi¬

own

with gold is fairly represen¬
tative.
Let me give you a very

ence

brief sketch of it,
After the

stitution

adoption of the Con¬
began

we

housekeeping

in

bimetallic standard.

gold

and

About

standard.
virtually

Civil

War

off the gold standard in

us

and

1879.

we

the

Then

gold.

1862

a

thfe silver part but kept

dropped
forced

silver

part

with

That is, a part

century ago

a

monetary

1792

until

off

remained

we

seri¬
ously debated returning to bimet¬
allism, which would actually have
meant, at this time, abandoning
the gold standard in favor of a
During the 1890's

silver

standard.

to do

election

In World

went

off

the

in

War I

we

the

is¬

quietly

for

standard

gold

the

after

more

settle

to

not

Presi¬

a

but hastened to return

years

right

decided

We

although it took

so

dential

we

1933

And

war.

we

once

abandoned

standard for almost a

and then returned to

of it in

1934 which

to

a

the

like full legal tender,

"consist

the

of

value

of

a

weak form

have held

unlimited

take

gold to the mint to be

But

export.

market"

gold

the

words

inter¬

loose. There

or

the

the

nations

there

are

gold standard either.
price of gold

has fluctuated

as

The

coins.

most of you

word

free,

know, refers to

a

have

caused

people

and

They
cent

it will

ounce

price is

a

price because the usable
put
This misconception was

in which gold has been

form

is money.

then

easier

even

coins

no

the

from

in

have

the

gold

Since

1934.

struck

been

the

country

"A

free

gold

does not

into possession of gold coins

gold

bars.

qualified

Some

gold

call

bullion

others doubt whether

of those doubters. From

a

in

buy

or

the

by

that

sense

it

is

buyer who will

a

sell almost any amount at

$35 an ounce.. These markets are
simply local paper standard mar¬
modity
question
all

if

gold is sold

considered

hoarding.
we

There
about
also

as a

would

the
had

$35

for

be

no

price

domestic

at

con¬

or

see

to it that

those

enough gold reached

markets.

The

$44

one-eyed

at

all in thfe

is king."

man

Popular Over the

Centuries?

Gold is scarce, it is pretty, and
it is a
reliable store of value.
There

has

it and

of

it.

for

19th

but

a

limited

in' terms

The

famous
in

all

"buys." The miner simply gets his
product back in the form of a
quick summary of the check or paper money. Maybe he
gold
standard's
history
should always took it that way, but now
raise a number of questions. What he has no choice.
'
is a gold standard?
Why has it
been popular over the world for
Gold Miners and Tennis Players
ever

Under

centuries?

what

circum¬

stances is it most
are

popular? What
its limitations? Why don't we

have
can

better gold

a

we

citizens

or

standard? What
as gold miners
both? Why is it im¬

do about it
or

portant that we should?
What Is

Briefly I

a

Gold Standard?

am

going

to

reasonably stable.

gold

clause

contracts

that many

in a world
rising, that
gold miners should think they are
entitled to more for their product
too.

review

all

costs

"free

The

old

adage, "We have

history of all monetary units over
an extended period of time is one
of

debasement

and

inflation.

the

If

cost

tennis

of

balls

tennis ball manufacturers
raise their price and tennis play¬
ers pay a little more.
If the cost
wheat

and the price
of wheat rises, it affects nearly
everyone, whether he eats cake,

bread

or

goes

gold

in

its value

popular

1940.

Gold has

because the

finds in it

one

thrifty

complete protection. Some infla¬
tion is possible under gold, and
gold clauses
ored

as

are

many

not always hon¬
shocked to

were

discover in 1933.
'

,

Gold

money
is most popular
people feel the greatest need
They feel that need most
keenly after they have experi-y

when

for it.

market

.

discussing ihe gold standard. Some
of them do not mean what they
seem

to

offer to sell or a solicitation of an offer to buy these securities.
offering is ?nade only by the Prospectus,

%

■-

''

•

Indianapolis Power & Light Company
First Mortgage

Bonds, 27A% Series, due 1981

up,

macaroni.

Due February 1,1981

February 1,1951

But the mint

Price

mean.

dollars shall be smaller is
ter

of

many

profound
people

a

101.515% and accrued interest

Copies of the Prospectus

mat¬

may

be obtained from the undersigned.

importance to
than
gold

other

The gold standard has been de¬
fined

as

"a

monetary

miners, to every person in the na¬
system in tion, in fact. It was in 1933-34
the when we cut the size of our dollar

which the unit of value, be it

dollar,
*An

the

pound,

the

address

franc

or

by Dr. Kemmerer before
Mining Congress, Denver,
Col., Feb. 2, 1951, ,
y
the

American

,




from

20.67

to

35

to

the

gold. That is because

a

ounce

HALSEY, STUART & CO. INC.

of

rise in the

mint price of gold sooner or later
tends to make all prices go up,

February 9,1951

*

Gold Most Popular?

enced an inflation.
a parasite form
Following the
gold standard used by second¬ American Revolution and our ex¬
perience with paper "continental
ary powers that are content to tie
their monetary systems to that of
Continued on page 30

#

gold,

"

Under What Circumstances Is

of the current
about

man

guards
against depreciation al¬
though it falls short of providing

announcement is not an

price of gold is different from the
price of tennis balls or wheat, or
even in the gold mining industry,
anything else. It is not set by sup¬
grow out of a hazy understanding
ply and demand forces, rather it
of those elementary facts. Part of is a
measurement, a truism.
It
the misunderstanding arises from
cannot be higher unless the dollars
the terms used in describing or
are
made smaller.
Whether our
misunderstandings

been

of the better safe¬

$6,000,000

Dated

Our

dollar weighed 24.75
grains (pure) in 1792 and now
weighs 13.71 grains, (pure).
Our
dollar is worth only 33% of what
it was worth in 1900, only 60% of

own

Then there is the gold exchange

are

goes up,

gold

we cannot
trust govern¬
ments" is likewise significant. The

because

standard which is

empha¬

#

a

century attests the faith placed in
gold. By it the debtor agreed to

of 1926 when there

The

>

widely

for about

supposedly normal year
were $20.67 to
pay back gold coin of the weight
thfe ounce, then certainly $35 is and fineness current at the time
not too low a figure today, for the the contract was signed. This was
cost of living index is only 40% to guard against losses
owing to
higher than the 1926 one whereas suspension of specie payments,
the mint price of gold is about debasement, or change of mone¬
69% higher.
tary standard.

fixed

is not surprising

where

of

some very elementary facts about
gold for the simple but important

reason

It

This

of

gold
fluctuated

century

were

Government

This very

supply

fairly steady demand

Prices

the

in

some

been
a

used

price

would not last very long then.
If gold was properly priced

today. As the French
"In the land of the blind, the

since.

we

one

Why Has the Gold Standard Been

com¬

desirable

vertibility and individual freedom
to export, for individuals would

where it

a

am

domestic

world

say,

of

mean

a

the

even

or

influenced

to flow out of

market"

ours

standard,

it is really

gold standard at all. I

a

of

accessible

will buy more.

tically

coinage

free

export of it but
privileges are granted in
a
way that no
citizen can

come

many

place

a

this country

free

prices. This market is not freely

$44

many

tend

to

have

and

such

or

have in

we

We

viewpoint, I do not consider it a
gold standard, although it may be
internationally. In any event it is
a poor
sickly thing although prob¬
ably the best gold standard in

also confusing.

are

the gold

any

There have been three kinds of
inno¬
people gold standard in recent years. The
best but most expensive type is
person's
freedom
to
take
any financially interested in the gold
the gold coin standard which Eng¬
amount. It has nothing to do with mining industry to make end¬
less assumptions on false prem¬ land had until 1914 and we had
whether the mint charges him for
ises.
A
"free
until 1933. It is expensive because
gold
m a r k e t"
coining the gold.
The economic
idea back of this is that gold is a really means a gold market that gold coins, circulate as money in¬
is
freely accessible to all and stead of doing heavy duty work as
commodity like, say wheat, but
is influenced by the buying and a reserve to support 8 to 14 times
like wheat it is not very usable
their value in paper bills and de¬
until processed. Just as wheat is selling actions of all gold standard
nations. Such a market today is mand deposits.
Incidentally, it has
milled into flour for use, so gold
bound to have a stable price for never been true that for a nation
is refined and struck into coins of
to be on the gold standard
gold because the biggest inter¬
all
guaranteed weight and fineness
national seller stands ready to sell money has to be backed 100% by
for use.
And just as a bushel of
tremendous amounts at $35 per gold.
wheat yields, say
17 pounds of
The
next
ounce
and the
best
biggest interna¬
type of gold
flour, so an ounce of pure gold
tional buyer stands ready to buy
standard
is
the
gold
bullion
formerly
yielded
20.67
dollars.
unlimited
standard which England had from
amounts
at
$35
an
This
yield is called the "mint
ounce.
This
1925-31. The only "coin" was a
biggest buyer and
price" of gold.
seller is of course one and the bar worth about $8,000. These did
Mint price also is a somewhat
same,
our
government. Adjust¬ not circulate, and were not in¬
confusing term. It is not a price
ments in the market are made not tended to, although people could,
at all. It is simply the amount of
by changes in price of gold but in if they wished, get these bars and
money that an ounce of gold will
the amount bought and sold and hoard them, cut them up, or ex¬
coin into.
It is no more a real
the indirect effect of this on ex¬ port them. Gold served almost en¬
price than 17 pounds of flour is
change rates and price levels. If tirely as reserve. This is a more
the mill price of wheat. Yet the
gold is priced too low at $35 an economical type of gold Standard.
misconception persists that mint
into

made

made

year

to

anyone

amounts of

under

between $38
$50 or more an
ounce,
and limited amounts of
gold have been traded at these
and

of some of our present-day quantity of gold in a free gold
market." This is another way of
confusion, so let us look at it
saying that there still must be
more closely.
free coinage and some freedom of
"Free coinage" means the right
of

have

several

phrase, "free coinage," is the

but

on

there

crux

or

another

some

full

then

In recent months the

domestic

That

metal.

be

to

not

we were

such markets in the Near East

today

in¬

at

as

their standard

one

are

less

of

have

them

on

rigorously
interpreted
than
it
formerly was. Some of the condi¬
tions that

that

today.

after, 1862-

gold stan¬

somewhat

ard

1879, but
standard

had this kind.

once

Finally, there is the gold stand¬

these

kets where

the

pines

gold

entered it.

All

had

na¬

gold

gold

ink

have

tions

two

also the

red

country with a gold coin or
gold bullion standard. The Philip¬

Civil War period and

convertibility, have been
sec¬
monies had to be convertible into declared by some to be of
gold, there had to be freedom to ondary importance. Emphasis is
now put on the last phrase in the
melt or export gold, and there
had to be "free coinage" of gold. definition; namely, that the unit

of

used

sue.

a

business

to

the

price

gold in the past

a

in this country. There were in the

not

is

to be said that four conditions had

done

fixed

unlim¬

such markets for

ounce

pretation, rigorous

are

fore Christ. In

up

at

in

ex¬

of

gold
will vary with almost
every trans¬
action, or even will very from time
to time. True, there have been
an

making a product which liter¬
ally pays for itself. Gold miners

rigorously inter¬

more

than it

preted

be¬

amounts

take

number of dollars

changeable for

are

gold market." This definition used

some

years

will

frequently does better in
depression than in prosperity.
It
is bound to do poorly in an infla¬
tion, of course. That is the gold
some
other unit in which price miners' depression. The public has
a right to
assume, I think, that any
and
wages
are
customarily ex¬
pressed and debts are usually con¬ gold miner knew the business's
advantages and hazards when he
tracted, consist of the value of a
fixed

the

other

of

where the

(if
they are allowed to mine it). This
is possible, of course, because they

both socialism and inflation,

help sale of gov¬
ernment bonds to the people, in lieu of devastating higher
taxation; and force us to go on pay-as-you-go program and
limit unsound government-sponsored projects. Declares gold
miners should "pky for the big stakes," namely a return to
the gold coin standard at $35 an ounce, rather than for "the
little stakes" of a higher price but with a longer delay.
has

producers

as

Their product is different,
their responsibility is greater, and
also, be it remembered, their priv¬
ileges are greater. They are the
only people whose product the

would restore confidence in the dollar and

Gold

gold

goods.

University of Illinois

Dr. Kemmerer declares while gold coin standard is

smaller

money

Therefore,

miners must not expect the same

By PROFESSOR DONALD L. KEMMERER*

it would be invaluable deterrent to

makes

cheaper.

9

f
10

The Commercial and Financial Chronicle

(7181

moment

Our Foreign

which

upon

land

formerly

Only living ex-President, reiterating his views

ex¬

States,

Says there is lack of cohesion
and unity of free nations in United Nations, and maintains
North Atlantic Pact does not commit U. S. to sending army to

clusion.

r

dvisions

been

have

I

by

urged

many

thousands of you to again discuss
with you our foreign policies.
responsibility

A
j

*

years

rests upon

speak out
from fifty
to

il sonal

j

| peoples

and with Rus-

•

I should like

i

Hoover

Herbert

remind

no

men.
doing my coun-

But I would be
>

try

a

"

into

disservice if I did not take
account the realities in this

world.

endangered
*'

s,

.

sacrosanct

nothing

is

There

■:

foreign policies

about

June,

this

in

grip

the

?

last 10 years. They bear the inscriptions Undeclared War, The
Alliance
with
Stalin,
Teheran

dozen

a

in-

more

months.
Our Problems Now
order

sj0ns

reach

to

as

the

for

course

armies

the critical

Peacetime Industry, The

German
*

must

we

us

.

•

The

£

ut

Tightness of our many pro-

posals has been proved by time I
shall recall only two of them for
f

must

in-

also

t

war

we have a proper naval
strength, we could sink

With

mid-ocean.

attention

more

lish

Channel.

not

some¬

paid to our

transport

bombs ,do

Atomic

troops

the

over

ocean.

The United Nations.

Presi-

Communist armies

(5) Our policies in the Far East.
(6) The North Atlantic Military

as

ago,

years

in

seize, no matter
they oc¬

this would apply to in¬
vasion via the Bering Straits. Hit¬
ler could not even cross the Eng¬

over

dent, I refused recognition of the
Soviet Government. I knew from

Seventeen

If

air

or

countries

defense,

perdod

(4)

armies

miles across the
require transport

6,000

would

further

what

Ameri_

people and the Western Hemi-

lo

great moat. To

invading

such

no

can

more

*

:

alliance.

ample experience, and their own

documents, that this bloody conspiracy
against mankind would
flood our country through this
door with Fifth Columns and

open

would

they

that

spies;

national life and

our

sabotage

government,

Every American knows they have
done

]ust that.

1941, in

a

revision

June 29,

great crisis I urged the
our
policies to meet

that had
to the American people.
Roosevelt

had

Stalin

Russia.

and

Britain

then safe be-

of the diversion of Hitler's

cause

armies to

an

attack

sentences

few

Communist

his

was

Russia. A

on

that

from

:

.-

promising
nnhtant

aid to Stalin and his
Communist
conspiracy

against the whole d
ideals

of

the

freedoms

gargantuan jest.

won

.

we

and

,

the

T

war

to

argument
to bring

mankind

a

'

Strengths
S

again appraise as best

w°rlcL

1

present military
^ war ln "ie

the
or

can

'1J!

iu}l?u a^are ,?j. ^ sh9rt-

cominSs of the term
?. measa{Jng device

divisions

as

for comparaaiy strength, but it is

further and join the

go
we

Russia

on

and

more

op-

under

by

Mr.

Hoover

fictiUaIMBrHdca8tjnffearlier
1951.
Mr. Hoover's
published

in

The




over

in

reserves

the
was

to

nation

this

but

endure,

Our American Economic Capacity
third

The

stark

realism J upon

which qur policies must be
outlook of the world may

of them.

well last
decade—possibly two
"
'<*
j

The

budget calls for Fed¬

more

eral

than

a

new

debate

spending of

over

$71.6 billion.

$71 billion alone, plus state
and local expenditures, is about
37% of our national income,
That is beyond the
of

ance

the

any

nation

preservation

of

system

large increase of taxes.

fodder,

without the satellites, the
Germans failed with 240 wellequipped divisions to overcome
Wlth b?r allies of General

was

General

Space,

Gen-

eral Winter and General Scorched
_

_

,

had reached her.

„

T

,

T

need

also

to

has

asked

issue

On

has

increase

a

We will
state

and

local government taxes.

slaves
ther

above

United States Sena¬

billion

Continued

of

addi-

page

34

allies

our

with

and

arms

-

This

shall

united action by the free nations,

holds

group

that

without

acting within the United Nations,

"

vSome

prog¬

has

ress

At

some

really able man—and, I

might add,

good Republican

a

to

mobilize swiftly to repel any new
invasion of the free world in Eu-

Asia

rope,

Africa,
side, which also in-

or

other

The

eludes members of both political

parties,

says

cannot afford to
obligation,

we

this

undertake

great

with internal revolution by Com-

We

Korea.

nally have in that job the leadera

we

sacrifice

every

fi-

months

before

needed

make

believe

of the weapons

eight

industry for

should

peril.

great

They say we would be spreading
ourselves too thin. They say Europe is unwilling to defend itself,
that it is riddled with socialism,
weak
economically,
threatened

j

after
Korea, our government has actually begun to get orders out to
we

in

are

Americans

These

home,

at

last,

ourselves

we

been

inflation

—

munists

does

and

not

its debts. They say

Asia

of

pay

even

the free

areas

too disorganized to
whatever happen,

are

avoid collapse

son.

the

But

still

is

nied

fight

thaw. It appears that our
wage and price controls are being
run by Annie Oakley. The Washington regulators toss up an order,
shoot it full of holes and then give
quick

Sufficient

Not

battle—accompa¬

much sound and fury,
strong regulations and weak administration, a slow freeze and a

Hemisphere Defense '

Western

inflation

against

sham

a

Americans conclude that

These

by

should send only a few if any
additional troops to Europe or

we

Asia and that we should
trate
on
making the
Hemisphere invincible;
should keep our money

concen-

Western
that we

free ride. Meanwhile,

and our
home, building our own
strength. They say the Western

Treasury is, in effect, pumping government bonds into the

Hemisphere is self-sufficient and
unconquerable and we should not

somebody

a

the

Federal

engine
has

Reserve

interest

low

at

this

inflation

of

ever

country

boys

at

dissipate

risk
lost

and

treasure

our

blood of our youth for
causes all over the earth.

the

seen.

This

is

most

a

appealing argu-

of the
people running wage and price
controls, I came to the conclusion
that they are there not for the

ment.

of fighting inflation but
provide jobs for undeserving
Democrats at the expense of the

life to avoid sending
them to far'away lands to risk
being wounded or killed. But in
aii honesty I am compelled totally

Having looked

over some

purpose
to

people.
Meanwhile,
bends

every

as

back

his
of

load

American
the

bear

to

new

President's
budget includes every political
spending device anybody has been
wrerk

defense

nnr

It

all

my

heart

I have two

give

to

I

are

going to

would

gladly

the

idea

that

America

nve aione.

I say
.

to

.

,

and

my

reject

can

who

sons

invoived

be

n

you:

We could not

Communic;t

°* ?,"j

,

,

wor1d

surFir„t

if!

^

<*°

would have South America with

moth-Taten us? With ^ Europe in Russia's
I^^ici^ schTme which ^ands' \ to whom would South

socialized

woTld

nroeram

with

that

includes

even

wish

I

and soul that I could believe in it.

the

taxes,

able to think of to catch votes and

the

wreck

heath

of

our

America sel1 a11 the essential exports she

sends

now

to

Europe?

whTch' the farmerBsra?heamselves Ma^ of ^h America's exports
which, thf farmers
themselves
farm products that ve do not
are

don't want.

need

"Quit Politics, and Get Down to

national

Administration

really wants to defend
I

a

America,

and

cannot

market

long

Business'
the

could

for

absorb.

Without

her

we,

exports, how
in this country,

]he difference to keep
So th A e ica on our side.

Clearly we would very soon be
isolated, here in North America.
We would be the loneliest people
Russian 9n ear^- What would we do, an

suggest it quit politics as usual

and get down

to business.
Our country is the core of op-

barbarism

and

Communist

slav-

throughout the world. We are
now
engaged in a great debate
over that issue of human slavery

island of freedom in

a

Communist

world, outnumbered 14 to 1, with
oceans which would no longer be
our protecting moat but a broad
highway to our front door?
,

♦An
Lincoln

on

welfare

whe¬

or

we

confiscated it would, yield

only about $2.5

America's

troops to preserve their freedom.

ery

a

that

quire that we inspire and strength¬

be

position to the spread of

were

J

;

side is the group which

one

en

we

all

proof of this is easy.
If all personal incomes
the level of

to

down

deciding
will

This burden is going to fall on
people with smaller incomes. The

tor

narrowed

and

contends

are

we

of

for

out

points

and the defeat of communism re¬

If

President

hammered

many

time

men.

The

on

slavery. This

long endur¬
and fatal to
a

has

of

parties

kind of force?

or

This

available for

cannon

built is

economic capacity. The bleak

our

free

_

can

stick it out.

over 20,000 mostly tactical planes and they have with
their satellites 50 million men

Feb* 9' Earth, she had stopped the Gerof Dec. mans
even
before Lend-Lease

address

"Chronicle"

21, 1950.

and

arms

horde

probably 300 combat divisions,
with 30,000 tanks. I am now told

Manpower,

,

address

have.

Kremlin-directed

xhe
has

we

In World War II, when Russia

...

win, then we have
for Stalin the grip of Com-

munism
*An

We

..

_

may

by force of circum¬
against our will.
might go into a period hard

stance and

which
us.

isolated

be

attain-

to

purposes

am

advocating isolationism. But if
other nations should fail, we may

strengths,

the

and

cannot survive. I

we

not

they have

,

whole

joining the

four

"If

e m ocr a t lc

world.

the

makes

our

war

of

ment

tive unit that

Now' we find ourselves

•

the

a

the Congress has committed

™

issue

age-old

rates, creating the most powerful

people should not

frightened into rash action by

fear that

the nearest to a common descrip'

,

of

be

sombre

points before
nati0nal direction,

weaknesses

address

wprp.

"It

map

responsible military man de¬

The American

these

minded appraisal of our

We
a

the

get to Moscow.

can

nies these two conclusions.

each

we must not shrink from clear-

>

proposed

categories
from

appraise

ar0und

can

we

six

No

all interlocked,

are

must

facds

these

separated

come

tacit alliance of the United States
with

in

be

other_they

of

the greatest danger

Mr.

Policies
canno^

our

About ten years ago, on

get to Washington than any allied
armies

members

simple question: How shall we
meet the challenge and with what

Defense Mobilizer Charles E. Wil-

and

th

^

Thg defense of

Communist

what will. ♦ It is still
a

the

the

ship of

them

(3) Qur economic capacity

test.

your

the

From av all be free"

or

cupy.

appraisal

materials.

3,000 miles across the At¬

what

sphere
a

The

splits

great political

agreement

could not build

on sending
of American boys to

Land

(1)
(2)
can

it

the two

our

ships and naval protection which
the Russians do not possess and

'

tn™,_

in Lincoln's time, and as

as

whether

lantic

elude:

each wrong turn-

these policies at

of

again in-

of freedom

;;

from

come

Pacific

problems which we face
0f far larger dimensions than

Their

Many
men,
including myself,
demanded the revision of

existence

volvesthe

it dif¬

*

raw

transport

Europe.

have

very

de-

may

it

even

question.

either

con-

j^e current discussion

Promoting of Mao Tsetung.

issue that

country. As in
Lincoln's day,

once

surrounded with

-phe

of contingents

Dismantling

Potsdam,

Yalta,

the

cide

men

hurry, rush,
developed the

at

defended

be

conclu-

any

wise

America to pursue in
jssues which confront

are

an

such questions, I made in the
might qualify in this field.
two
months
Thomas £. Dewey
Further, unless we so dissipate,, since I called
our
strength
as
to
become a in this room for a swift build-up
beaten
and
crushed people,
we of the armed forces of our counwill be able to keep sea lanes
try, for immediate all-out producopen.
!
tion for defense against aggression
Moreover, this Hemisphere can abroad and for a real fight against

erected over many
,

this

facing

dealing. with

tombstones which have been stantly-shifting forces moving in
of them in the the world.

the

free

long professional career and from
years as Secretary of Commerce

of
has

decade

witness agajn ancj agajn appraise the

as

are

of

being

say

may

in critical

peace.

jn

before

that with
proper economic action this Hemi¬
sphere can be made self-contained
I

stances, some within the past 12

nations to defend free

free

,

in

was

that

you

I could recall

through

of Abraham Lincoln, we

interests

our

situation.

own

the

can

spread slavery from 200,000,000 to
800,000,000 people? And we have

to address you
the rose-colored spectacles "of" idealism" and the need of

;

only

this

Communism

countrymen.

even

memory

American

1941, almost ten years ago. Need

bilities by my

j

moment

Remember

I

join tonight to honor the

if not impossible, for the
people to judge their;

ficult,

lasting peace."

with

years

is

we

de-■

Its

of

As

the

of

effect of which is to make

States promote a just and

United

high responsi-

atmosphere

anxiety

States and at that moment

that

and

applauds "abandonment by our government of
frightful follies of appeasement of Reds in China." Concludes
peace can be won by strength and without a war, and warns

.

United

sia and China.
I I have been
I entrusted durl ing thirty-five
;

An

when

army

against renewal of isolationism.

is offered,

of

con-

other war, and

must,

Hemisphere.;

discussion

a

Points out Communist

Europe would isolate America. Supports send¬
to Europe, while Europe can rearm and prevent an-

upon.,

defense

the

Much criticism

economic and moral powers of the

;■

-

come

.

free world

J'

is

based

to

teeth; that the-day
these nations.
".
Will be sufficiently ex¬
hausted to listen to the military,

of the

<.

be

to the

would

the

of

most

the

waiting;

watchful

in

ing

ambi¬

realism

foreign

our

Western

armed

with

en c e

which

world."

aside

methods

policies

stark

second

U. S.

proposes

trol of Western

Civilization

of Western

The

Party

extension of Atlantic Pact Area

an

Mediterranean and Near East.

to

.

'

The Defense of Our Gibraltar

portunity for it to extend in

stand

give full military aid and

no

mean

the Kremlin's

I said these two dictators -— fense is not only in
me Stalin and Hitler—were locked in but in the interests
deadly combat, that statesmanship
everywhere.
required
the United
States to

of per¬
experi-

not

other

no

are

So-called "titular head" of Republican

political con¬

does

Governor of the State of New York

\

tions.

t

*

there

stopping

dangerous and

:

j

that
of

that

But

bring

could

military victory, no

military capacity.

Warns large Communist parties in Western Europe
even a full scale international army of 40
in Western Europe is small compared to that of enemy.

Europe.
are

\

against

offensive

land

a

pressed that defense of Western Hemisphere is our Gibraltar,
warns all-out aid in European defense
will overtax our eco¬
*

any seeable
non-Communist

With

Communist

Support

By HON. THOMAS E. DEWEY*

nations, even including the United
the

nomic and

policies

foreign

from

forces

With Full Military

stark

a

our

based.

be

must

United States

here

is

There

Extend Atlantic Pact

action.
reality

available for European

Policies!

By HERBERT HOOVER*
Former President of the

combat

trained

and

-{

equipped
divisions

20

than

less

-

.

Thursday, February 15, 1951

.

the.

in

Europe

Atlantic Pact have at the present

We Should Revise

.

of

nations

The

..

can

address
Dinner

by
of

Gov.
the

Dewey

National

at

the

We

produce less than half

Republi-

Club, New York City, Feb. 12, 1951.

Our
nr

Continued 071

page

35

Volume 173

Number 4986

.

.

The Commercial and Financial Chronicle

.

(719)

v'vt;

II•Sgl

s

j

.

pi
WM& WM

m:

%

Ml

ASSOCIATES

/I REPORT OF

#1
-Pll

INVESTMENT COMPANY

THE ASSOCIATES COMPANIES
\

'

OTHER

primarily engaged in automobile financing. Operations
towns and cities east of the

these points, motor lien retail installment notes

Associates Discount Corporation
AND

are

*

'

conductect in 111 branches located in key

are

j

1

mobile dealers.

L1P

SUBSIDIARIES

motor

Wholesale.advances

vehicles from factories and

to

are

purchased

are

also made

to

on a

dealers

:?:4:

build inventories. In conjunction with these
transactions,

%,$

insurance in the forjm of comprehensive,-fire, theft and collision

*

•

is

riS

In the .Commercial

•

Division, secured short and medium

•j

•

industrial trading enterprises against the assignment of

•/.

f

to

U'V

j

term

accounts

'

.

.

credit is extended

SHEETS

smaller finance companies and others against security of retail installment

ASSOCIATES INVESTMENT COMPANY

I

BALANCE

E. M.

to

receivable,' inventories,

pledges of machinery, equipment and other eligible collateral* Rediscount advances

CONSOLIDATED

vehicles

coverage on motor

provided by; the subsidiary, Emmco Insurance Company.

'

■

auto-

facilitate the shipment of

to

p

Commercial and Installment h'inancina

Rocky Mountains. At

discount basis' from

made

are

notes.

ASSOCIATES DISCOUNT CORPORATION

MORRIS,(Chaimiatiiof the Board

P'-r•

-*•

a

•>•,

.

.

.

"

' '

-■

'• '

YTU

ASSETS

'

December 31,
1950

'

'.v.

■ .

c

■

!

:

Marketable Securities, at cost:
• , .
,
U. S. Government bonds (market $13,214,890) /........
Other bonds..

/t'.'R A>:

v

;..........w.,.'..

.Total marketable securities.

v

,

.'

.'Motor lien wholesale, short-term loans: A

y ►.

^Modernization loans

•>
.

;*;

.Direct

,

or

'

1

personal installment loans..

(other than

i............ .t

3,771,091

15,702,665
4.697,652
7.778,394
2.711,463

'.it,,,„ *•■*"<A.

11,014.142

1,008.665

$334,249,679

$225,935,113

,

-

p,
u

»v

^

*

.Y.V.

•.*;

'

•'

Inventories,

at lower of c6st or market..; r...."..
Prepaid Interest, etc.. .........................

Land, Buildings

and

Equipment;

Investment in stock of

an

at cost

'

r

Total receivables and repossessions, net.. 7.

•

'

..

........

&

'

***

...

.

jfr

V

v.T......

..A.

.

priYC.."1.'

.

less depreciation

CONSOLIDATED NET INCOME

518,949

12,633,868

j 6,854,411

.

4,274,821

'
-

$310,943,610

Ai.Vf*-

$

*...;. u*.,

.v.";

$209,545,373

461,671

$

587.200

1.093.284

.

1.045,712

of $1,323,094.
(50% owned)

reserves

affiliated finance company, at cost

6,277,057
4,073,175 "

502.888

'V

j'.v.

3.386.822

16,954,546

1

U

tw+

'

•

..t. VA-......

.

.Less—Unearned discounts..A.
. .......
a>\-■
Reserve for losses...... i............

.

,

A*..v..>7YV;

; ;. Total receivables
.Repossessions r..'. .*'..

f

W 1945

4,241,597

lien).

•*

v.

19,395,175

759,605

j

p.-'. Miscellaneous

$172,767,389

3,734,034

-Accounts receivable, assigned
...,.............
Advances to other finance companies on collateral;;;.
...%V.AV..
Commercial loans on collateral.... «•-.
;............. i... .V..V.7...

,

$ 12,940,124

1.338,722

motor

,......'.....

..

4,546,086

i'\
..

$259,904,446
37,622,698

'i.. i......"...
notes

31.239

-

-

.7.;...............

A

..

''Chattel lien and conditional sales installment
:

'

>

r... T.. .if

4,353,636

*

,

;

2,050,000

$ 20,455,086

.....

Receivables (including installments due after
1951):
A-Motor lien retail installment notes... V.;'.'. I......A

V
N

6,312,799
*

2,800,000

%

jStock? (market $5,630,986)

,

$

31,000*

;t..

..

Short-term commercial notes.....................

i

VOLUME- FINANCE OPERATIONS

$ 35,694,025

$ 13,270,450-

•;..,.;..

,...

...

31^

1949
~

"$ 42,515,030>•

-

.

,

December

668.875

1.079,782

•

50.000

150,000

$376,664,393

$260,565,379

.

1945

1946

1947

1948

1949

1950

LIABILITIES
r

*

'

'

Notes Payable, short-term.
Accounts Payable and Accruals

Reserves

for

Reserves

for

and

and

$220,938,500

2.199.639

v. ...;

Loss Adjustment Expense.".

2,161,008
9.675,525
4,115,598
16.063,785

..

Others

....f..-

Unearned Insurance Premiums.....
Preferred Stock Sinkinc Fund Requirement for 1951-.
Minority Interest in Insurance Subsidiaries."
.'

:i

§.
■

.

^

..

ii

4-

..

$ 20,000,000

•

FT

If

'1946

2-

1947

IP

1948

;
1949

W&

o-li
,1950

'•

'4

■

.

-

GROWTH

IN

NET WORTH

annually 1954-1967), less 1951 sinking fund

requirement of $100.000

$

9,900,000 "

S

'

Common stock, authorized 1,500,000 shares of $10 par value each;
outstanding

1.041,824 shares.

...

10.418.240

Paid-in.surplus

'.....
Earned surplus (under provisions of the long-term notes payable, $28,870,758
is not available for cash dividends on, or
reacquisition pf, capital stock)

quisition of, capital stock)

10.418.240

3,600,000

.....

3,600,000

28.391.093

$ 42,409,333
$260,565,379

capital stock and surplus

Certain banks have been authorized

$851,500 in

34.319,065
$ 58,237,305
$376,664,393

Total

any one

honor manufacturers'

to

drafts of

day covering shipments of automobiles.

not to

exceed

"

STATEMENTS OF CONSOLIDATED INCOME

TOTAL ASSETS

Year Ended

Consolidated Gross Income
Deduct:

December 31,-1949

Increase

$50,468,277

Expenses

Consolidated Net Income before Federal Taxes
on

Consolidated Net Income.'

on

Income.

Income.

$44,442,285

31.011,430

;

Provision for Federal Taxes

Year Ende,d

December 31, 1950

29,625^219

4.7%

'$19,456,847

$14,817,066

31.3%

13.6%

£590,000

5.760,000

49.1%

$10,866,847

$ 9,057,066

20.0%

$10.29

;

$8.69

18.4%

Consolidated Net Earnings per share after payment
of

preferred stock dividend

South Bend, Indiana,




February 9,1951

.

<

4:4

iiPiiPi

•

outstanding 100,000 shares of Series A, 4%%, $10,000,000 (all to be retired
at par through
sinking fund, at rate of 1.000 shares annually 1951-1953 and of

||
J:

.

-

#•1945

*$ 22,500,000

•

y

i

f

•Cumulative preferred stock, authorized 200.000 shares of $100 par value each;

5.000 shares to'10.000 shares

-p II

6-

V

13.000

Subordinated Long-Term Notes due in .1959, subject to annual
sinking fund

Surplus:

8
•

—

$175,656,046

$ 22,500,000

II
'

3.379,760

$ 40,000,000

requirements of $1,800,000 beginning in 1953

|

10-

10,801,939

$255,927,088

in 1957

and

(DOLLARS)

6,526,639

Lonc-Term Notes due $26,670,000 in 1955, $6,670,000 in 1956, and $6,660,000

Capital Stock

'

•i

1,786.869

100,000
13,000

Total

NET EARNINGS- PER COMMON SHARE

$150,948,200

2,859,672

.

.Y..,.'................
and

FederalTaxes~,....

Reserves Withheld-Dealers

"

i.;

Unpaid Insurance Losses
State

'

••

11

12

(720)

The Commercial and Financial Chronicle

Burloii Whitcomb With

Connecticut Brevities
Bigelow-Sanford
has

pany

set

a

division

contracts

Com¬ established the

defense

new

to

orders

government
cotton

up

Carpet

handle

for

blankets,

research.

ment and

recently
looms

number

a

blankets

weave

presently equipped to add

a

payable
Feb.

of

and

was

declared

The company

purchased

to

Company

January,

is

At

the

and

let making

machines.
*

The

Lakeville

Connecticut

*

^

Water

Company

to

common

stock

1,200

to

shares

Auto

produce

Light

Power

&

year

a

sales

earlier.

of

common

$3,758,237,
Mass. —Burton

or

The

F.

previous

best

$5

with

compared

share, in 1949.

per

year

was

in

Whitcomb, President of the Bos¬
Security Traders Association,

1946, when profits amounted to
$7,546,828, or $10.04 per common

has

share.

become

associated with Har¬

Total

'

sales

last

Sales
an

for

1949.

over

the

increase
Net, in-

for 1950, after application of
42% 'normal Federal .income

tax

rate for

come

record

stock,

share.

$227,135,206,

the

Western

Supply Co. in 1950 failed to

common

Burton F. Whitcomb

,

BOSTON,

Company has made arrangements

its par of $25 a share and' to ob¬
tain a bank loan of $24,000 at 3%

t

■,

ton

Connecticut

at

while neU income
$7,311,552, equivalent to $1.50

per

com-

earnings because
of the excess profits taxes, according to Paul E. Connor, President.
Net earnings of $6,842,292
were
equal to $9.11 per share on the

Company

of

stockholders

record

con¬

ft

sell

The

about April 1.

on

was

January,

2,591

were

pared with 2,417

con¬

plans to move its.
from ftew London

headquarters
to Hartford

subsidiaries, amounted

$63,863,272,

year were

ff

Power

to

of $61,210,506

has announced

has obtained permission from the
Connecticut Public Utilities Com¬
mission

if.

Australian

during January

ford-Empire Company Division.
ft

Louis, for the fourth quarter
1950, excluding
British and

of

January, 1950. Wholesale accounts

turing Company. The glass
industry business will

for torpedoes,
peri¬
radar equipment and bul¬

St.

meeting

annual

tainer

parts

scopes,

an

tail units in operation in

tinue to be operated as the Hart¬

its

cilities.

City,
increase of

1951, were 263 against 265 during

regular carpet making fa¬
During World War II it
produced cotton duck, blankets,

to

a

defense

of

Kansas

the $7,711,000 reported
for the same month last year. Re-

on a proposal to change the com¬
pany's name to Emhart Manufac¬

amount

Sales of Monsanto Chemical
Co.,

over

Co.,

of

as

work

stantial

$13,750,000,

78.3%

Feb. 26, stockholders will vote

on

sub¬

1.

holders

to

Supply

were

sold. Directors have
stock dividend,

15

sales of Western

1951

Auto

20%

Feb.

Thursday, February 15, 1951

.

Missouri Brevities

Ripley Go.

Company
Division
at
Hudson,
N. Y., and the Stonington Division.
The
interest - in
Shaw Insulator

any

duck, machine tools and to
out engineering
develop¬

carry

Harriman

V & O Press

new

..

the year and an exprofits tax of 30% for the last

cess

six

months,' amounted to $26,220,333, equivalent1 to $5.37 per con^share. Earnings for 1949
werp

mon

equal

to $3.74 per

in earnings
sales

share

common

after taxes of 38%.

The increase

due to increased

was

the average prices of com-

as

pany'sproducts

remained

con-

stant during the year.

year

*

$

i
'vfc

*

riman Ripley & Co., Inc., 30 Fed¬ reached $156,093,143, as compared
Clinton
Foods, Inc., has borwith Charles T. Main & Co. of
with $125,432,312 in the previous
eral
Street, as manager of the
rowed $20,000,000 from 10 banks
Boston, an engineering firm, to„
trading department.
Mr. Whit¬ year. As of Dec. 31,1 receivables ^ short-term notes bearing inr
financing will be used to increase restudy the possibilities of locat¬ comb was
were
$17,743,000, compared with Yerest at 2% %. Of the
formerly with Blyth &
borrowings,
the capacity of the principal res¬ ing
a
hydroelectric project on
$18^690,000 a, year earlier. .Earned
Co., Inc.
:
••
• •
•
$15,000,00a has been used to rer
ervoir; to install meters, and to the Housatonic River above Lake
surplus, after payment.;of $3,381,-. tire
-outstanding notes and ; the
replace
certain small
diameter Zoar.
;
1.7/ ■
f;
000
in
dividends
and .including
other $5,000,000 is being used for
V';.
I
V;f i
pipe with a larger size.
';;
i
$1,638,00Q as, refunds on excess, general
corporate purposes,
:•?
V New York, New Haven & Hart¬
*
*
*
|
profits taxes paid in prior, years,
^
r.'
'/irv
'>
"
ford has placed an order for ten
reached $30,415,000, a gain of more —
1
* '
~
Landers, Frary & Clark has pur¬ Diesel-electric locomotives with
than $5,000,000 for the year. The
-The International Shoe Co., St.
chased a plant in Medellin, Col¬ Fairbanks
Morse
at
a
cost
of
John J. Mann has been elected
book value of the common stock Louis,
reported met earnings of
ombia, where it will produce elec¬ about two and a quarter million
Chairman of Dec.
31
was
$51.77 per share, $10,957,707
for its fiscal __year
trical appliances and corn mills, dollars,
i The 2,400 horsepower:
the Board' of
against
a food chopper that is widely used
locomotives will be used for pas¬
|-«V Governors "of
*
in that area. The new plant con¬
senger service. Deliveries are ex*,.*
the New York
tains 25,000 square feet and is pected to be completed
of Edison Brothers Stores
» 77-1
by the end1
r C u r' b
E xInc.
amounted i to
of this year.
expected to employ about 200.
$4,559,424.. in:
>
;
■
change, to sucpro.
*
• ft
*
January,. an increase of
♦
*
*
ceed Mortimer
ductiori, ■: and ^represented 10% of
over
a year ago.
;• ?
Land s berg,
Aspinook Corporation is negoti¬
The American Velvet Company,
all shoes made in. the U.
S., the
Brie km an,
Stonington, is planning to add ating the sale of its Hampton
v.'
t
'
^; ; '7eP0rt added. ::V v„.„.
A dividend of 50% in stock has'.
Works
at
;•
1 ;4
Easthampton,
23,000 square feet to its plant for Print
Landsberg
&
additional: weaving and finishing Mass., to D. B. Fuller & Co. The
Co: Mf. Mann, been proposed by the • board-'.A.

for

ten

Proceeds

years.

of

this

.

John J. Mann Chairm'n

.

,

Of New York Curb

#

•

.

'

'

facilities to produce
fabrics. In addition,

present looms

arrangement

of the

some

are

*

*

the SEC

round

cents

filed

notice of intent

per

and

extend jits

man¬

The

a

announced

that

it

'

,

,

Ely & Walker Dry Goods Co.,
ject to ratification by

u

t b

in

at- the

sub-^

nf

stockholders,.$3^5

annual

eomoafed

does
John

not

contemplate sale of any of its
other plants at this time.

to

been

With Glore, Forgan

been

month for three

J. Mann

outstan^'*

member since 1948. He has

a
a

member

of

the

Curb

Ex¬

CHICAGO, 111.—Harold P. Smith

At the stockholders' meet-, has
become'associated with Glore,
April 4 the stockholders,
Forgan & Co.,, 135 South La Salle
au¬
Street, members of the New, York
thorized
number
of" preferred
and Midwest Stock
Exchanges. He
shares to

uriissued until the board
directs that
for
or

rbrsord ^ither

for

property, tangible or
intangible." Tho stockholders also
The
ratify a plan to increase the
voting power.. of the preferred
shares -by 50%.
«
•:
*
' "4
irrtancyihl^ "

Lester Chasen With

on

will be asked to increase the

woufd'be

cash

change since 1933.

(Special to The Financial Chronicle)

rate

years.

ing

.

cents per
meeting to be held: Jr?
f 8*;?.^
on March 5, when
they will vote
1925^as a page,
shares of common stock
was
Vice- on increasing the authorized stock
oo'
Chairman of from 900,000 shares to 1,800,000 with $340,024, or 84.7 cents per
The
the Board
of shares.
remaining
450,000
after the stock dividend
ing a year earller- Revenues of
which he has shares
the'C

oper¬

lines.

other

with

- J

™

has

Inc.

Payments will be made at
36

out
to

agement

offer 10,700 shares of its common
stock to
employees at $14 per
share under a stock purchase plan.
of

would provide for
retaining a manage¬
contract. Aspinook plans to

ations

*

Pitney-Bowes,
with

career

ment

being converted
military production.
I

to

Who began his

Aspinook's

military pile

A

•

L. Johnson & Co.

$8'238'391 were 9'6% higher than
th.e $7,515,155 reported in 1949,

^stantia^gafns1 tr3fflC sh°Wmg
SUDSianiiai

gainS.

will

.

..

'

•

-Mississippi. Valley , Barge Lin«
Co., St. Louis, reports net earnings
for 1950 of

$861,527, equal to $1.23

For the fiscal year ended Nov. Per share, after provision for Fed60,000.
There are no was
L. Johnson & Co.,.Syracuse, N.
formerly with Hicks & Price
30, Laclede Christy Co. had net eral income and maximum excess
present plans to increase the num-"
and the Continental Illinois Na¬ Y., announce that Lester E. Chasen
income of $807,982, second
ber of shares
largest Pr<>fits tax liability aggregating
has become associated. with. them
tional Bank & -Trust Company:
outstanding.
in its history. It is equal to
$3,74 $821,000. This compares with net
*
*
*
in their New York office, 57 Wil¬
,
i
I
i;
per common share and compares earnings in 1949 of $738,094, equal
liam Street, where he will handle
The annual report of Hartfordwith net of $461,143 or $2.34
C. G. Thomas Co. Formed unlisted
per 5° $1.06 per share, after Federal
trading. Previously, Mr.
Empire Company for the year
share in the preceding fiscal
year, income taxes of $476,0#0.
Chasen had been with Frank L.
1950 shows consolidated per share
RICHMOND, Va. — Claude G.
Hall Co. and Gilbert J. Postley Sales amounted to $11,144,689, ne\i^
"v '
'
" 'L V
earnings
of $7.07.
During, the Thomas Co. has been formed to
u.
..7
Kansas City Stock Yards Co. re& Co.
high record, and compare with
year the company purchased and engage in the securities business.
.v;\: ; - '
ported net. earnings for 1950 of
Offices will be located at 1108
$8,462,316. It was brought out that $338,555,
equal
after
preferred
East Main Street.
acquisition last March of the Chi- dividends of $238,200, to $2 per
■

.

i

■

.

.

v

.

,

,

Carl Click Joins

PRIMARY

MARKETS

in

Staff of D. J. Greene

With Salomon Bros.

,v

Hartford and

(Special to The Financial. Chronicle)

David J.

CHICAGO, 111.—Robert C. Hill

Connecticut Securities

has

been

added

Salomon

Bros.

the

to
&

staff

of

Hutzler,

231

South La Salle Street.
:

Tifvt Brothers
Established

New

York
York

&

Boston

1907

Curb

(Special to The Financial
Chronicle)

Exchange

9 Lewis St.
Tel. 7-3191

Stock

Exchanges
(Associate)

Morrision, Jr.,

these

and

primary markets

ii

.

s{jare 011 common. This
outstanding 50,000

17,-

with net of

shares of

.

129 shares of common stock and fcommon
Greene, 60 Beaver St.,
City, member of the assumption of liabilities, including earnings

Stock

Exchange

- and
long-term notes. Company's fiscal
UA
Exchange,year is being changed to a calenannounces
that Carl Glick, fordar year basis
beginning in 1951.
merly with Kuhn, Loeb & Co.,

the

New

York

Curb

•

•

.

...

J.

1

With Slayton & Co. Inc.

•

ren^

assets were
$1,165,262;
liabilities, $312,849.

rent

*"""

'

'

FRARY

MIDWEST STOCK

Spinning

Texas Eastern Transmission

Rockwell Mfg.

EXCHANGE

Southern Union Gas

VEEDER ROOT

•

on

&

CLARK

Southwest Gas

<

request

Connecticut' *comp<ini6&,

HAVEN

'




'

J

Bought

Stix & GO

r

>-

•

wrn

—

50S OLIVE

STREET

—

Sold

Producing

St. Louis l.Ho.

194

Hartford 7-2669

Quoted

—

<

*

r ,7"'

••

.

SCHERCK, RICHTER COMPANY

EXCHANGE

Telephone 6-0171
Teletype: NH

"

cur-

Delhi Oil

AMERICAN HARDWARE

memoranda available

REctor 2-9377

corn-

Mississippi River Fuel

MEMBERS

STOCK

York:

$1,943,897,

Texas Utilities

in:

CHAS. W. SCRANTON 6CO.
MEMBERS NEW YORK
New

were

$2,210,993 a year
As of Dec. 31, 1950, cur-

earlier.

*

NEW

$514,230, or $5.51 per
share, in 1949.
Gross

Pare.d- with

Berkshire Fine

(Special to The Financial Chronicle)

compared

'

Tennessee Gas Transmission

LANDERS,

other

I.

Roy S. Smith

LIGHT

ELECTRIC

and

La. —H.

SECURITIES

CONNECTICUT LIGHT &
POWER
CONNECTICUT POWER
■

on

York

j

CLEVELAND, Ohio—Andrew F.
now
associated with C. H.
Wagner Investment Co., 126 Ca- Borla is now associated with Slayton & Co., Inc., of St. Louis.
rondelet Street.

CONNECTICUT

Descriptive

York

.

are

New York: BArclay 7-3542
Bell Teletype HF 365

HARTFORD

10RLEANS,

NEW

Hartford 4

■We maintain

New

nn

Two With Wagner In v. Co. has joined the research staff.

Members
New

1

New

was

cago Retort & Fire Brick Co.

effected through exchange of

Landreth
Bell

Teletype

Building

Louis 2

Garfield 0225

Mn

louis 2; Mo.

SL 456

L. D. 123

■
..

j■»

-i*1-

ri-'*

-»

f

i

a

'

M

j

*

'

'•

u

t

*

-

Volume 173

Number 4986

.

.

.

The Commercial and Financial Chronicle

(721)

With Merrill Lynch Staff

Towner J. Pringle Opens

With Conrad, Bruce

Joins Hutton Staff

(Special to The Financial Chronicle)

:

(Special to The Financial Chronicle)

(Special to The Financial Chronicle)

(Special to The Financial Chronicle)

SHREVEPORT,
H.

Demers

is

Lynch, Pierce,

—

Wallace

with

Merrill

La.

now

Fenner

&

.13

Beane,

608 Edwards Street.

.

SHREVEPORT, La.—Towner J.
Pringle is engaging in the-securi¬
ties

business

from

offices

Monrovia Place.

at

440

;

-

PORTLAND,

Ore.—Walter

F.

SAN FRANCISCO, Calif.—
Clyde M. Monaghan has joined the

Cozad is now-with Conrad, Bruce
&

Co.,

813

Street.

Southwest

Alder

staff of E. F. Hutton & Company,
160 Montgomery Street.

,

J

"

Barbour's
F.

Dow

Theory—Justin

Barbour—Special

bulletin

of

market

interpretations, including
35-page introductory folder with
each subscription—Twelve months,

$45.00; three months, $15.00—Bar¬
bour's Dow Theory Service, Inc.,
105 West Adams Street, Chicago 3,
Illinois,
'

Direct

Placement

Securities—E.

of

Corporate

Raymond

Corey—

Harvard Business School, Soldiers

*Field,
$3.50.

Boston

Mass.—Cloth—

63,
,

How to Make Money

r.

clining

Stock

in

Market

De¬

a

—

Mark

:Weaver,

Dept. D-l, Box
1130,
Monica, Calif.—$1.00.

Santa

j'

i-f

Two For $1—Formula for short-

'term swing trading
stocks

and

issues

of

/The.

A New

(scalping) in

grains and next four
"Signal" featuring

the

Stock

in the Spotlight"—
Robinson,
429
Russ
,Building San Francisco 4, Calif.—
$1.00. _/,■

Lester

B.

New York City Tax System, The

!

0

—Chamber^of' CoiVimerce pf the
State of New York, 65 Liberty St.,
New York 5, N. Y.—Paper.
■

Philosophy of Labor, A—Frank

Tannenbaum

Alfred

—

A.

Knopf,

Madison Avenue, New
York 22, N. Y — Cloth—$2.75.
Inc;,

501

ATF

J

Survey of Salesmen's Compen¬
sation—Harry R. Tosdal and Wal¬
ler
Carson,. Jr.-^National Sales
Executives, Hotel Shelton,
York 17, N; Y.—Paper—$2.
Your

Blood Pressure

Arteries—Alexander
The

Inc

,

American

—

Inc.,

Heart

Mills

Your

Crosby—

Years

of

Timber:

Progress

Fifty

Industry —' Weyerhaeuser Timber
Co.; Tacoma 1, Wash.—Paper. '

CHICAGO,* 111.

vestment Company, 231 South' La
Salle Street,: announce the- association of Willis J. Meehan with
their

firm

investment

as

-v

,; i.

r"

•

'

•

'

Verted

V*

i

have* become

c/xrx

*■

•

*

foundry

type

industry

—

•' *

»•

x,v '

<> -■

?

•:.

printing

gravure

•

•

••■

Olean and
at

and other equipment for the printing

new

products in new-fields.

Friendship, N. Y; - Western Division, plant

Fullerton, Calif.

Inc., at Daystrom, N.C.

'

ELGIN, 111.—Sigler

—

Boeman

Company,

Daystrom
Corporation, formerly Frederick Hart & Co.,
Inc., plant at Poughkeepsie, N.Y.
X

steel, wood and plastic household furniture-

Electric

Daystrom Furniture Corporation, with plants at

.

is

Tower

;

,

DAYSTROM. INCORPORATED

Victor Uhl Adds
(Special to The Financial Chronicle)

SPRINGFIELD, 111.—Bernard J.

FORMERLY

Koehler is with Victor A. Uhl &

ATF INCORPORATED

Co., Myers Building.

200 llmora Avenue

'

Wallace-Bouden Adds
,

»-

V

f

r'

'f

Elizabeth B, New Jersey

'

(Special to- The Financial Chronicle)

NEW
Bouden

pany

ORLEANS, La.—Wallace
&

Co.,

;

Sound recorders and electronic devices

*

Joins Heath Staff

-

- -

Plywood and lumber products—Daystrom Laminates,

American Type Founders,.with plants at

(Special to The Financial Chronicle)

&

1

promotion of

Daystrom, Incorporated is, new* in name alone. >
From Daystrom in the future — as from ATF in the
pastry will come new developments and new products
to contribute to better
living:- XX ;■ . x
•* ;;
- •

x

presses,

Elizabeth, N. J., ML. Vernon and Brooklyn, A\ Y.
Chromed

..

and

k

J*

Letterpress, offset • and

Buhl

Building, members of the-Detroit
Stock Exchange. Mr. Hastings was
previously with Straus & Blosser.

.

to millions of people through national-advertis¬
ing in magazines, newspapers and. on the radio. The
name
"Daystrom" will carry weight in the introduction

associated

with Baker, Simonds &
Cbi;

Heath

selected

was

Daystrom,-Incorporated products, subsidiaries and facilities include:

Chronicle).../.'.';

DETROIT, Mich.—John J. Fal¬
Pierce A.
Hastings, Wade

with

i

v

'Xj X

lon,

Building.

''

r':

(Special to The Financial

Sloan

-

'

TKree With Baker, Simonds
,

fields.

name

95%'■t<^-Wahri)i'otluctiohV:<W'-- XXXX**'v

■: *•

"

coun-

•"

.

■

longer reflects, the
operations in con-,

Daystrom furniture, manufactured by one of our sub¬
sidiaries, meanwhile has become well known as a brand

during the five-year period 1946-,
ending March 31) averaged $33,010,000 anrtuallyI /This eonipares wit hX
; $7,460,000 for the five peacetime
years 1937-1941.
'During th^waitim^ peribd 1942-1945 sales a^eraged $32,880,000 annually;' when the company was con-

-

sellor.

no

diversified

Why
"Daystrom, Incorporated"

Peacetime sales

In-"*'

Republic

our

''

1950 inclusive, (fiscal
year

;

This identification

character of

true

sumer

the management embarked on a
diversification program and new businesses were
acquired in consumer industries/ The' sblindness of this
program is reflected in the record of recent years.

the; Forest

in

Founders.
u

Five years ago

38th

and

ATF were adopted for the parent
five years ago in order to benefit from the
goodwill, long associated with American Type

"

Street, New
16, N.< Y.—Paper—20 cents.

Men,

initials

company

established as American
Type Founders. It has long been the foremost supplier
of equipment to the
graphic arts industry, and during
World War II was an important producer of precision
parts and equipment for the Army, Navy and Air Corps.

*'

and

The

.

In 1892 this
company was

New

Association,
Committee,

Affairs

22\East

York
ft

Public

L.

<

Incorporated has changed its name to Daystrom,
Incorporated and its ticker symbol on the New York
Stock Exchange has been
changed to DYM.

California

las N. Parker to their staff.




r

Com¬

Building, have added Doug-

-

'41
II

.

—

The Commercial and Financial Chronicle

14

Securities Salesman's Corner
By JOHN DUTTON

give examples of methods of ef¬
fecting tax savings through certain
portfolio changes. I also under¬
stand that several of the mutual
funds
have
made
tax
booklets
available to their dealers. I would
use
direct mail in the form of
double

(ARTICLE No. 2)
Last

suggested in this
column that before any advertis¬
ing campaign is prepared, that a
complete analysis of policies and
objectives should be clearly de¬
termined. Assuming that this has
been done, let us take a specific
case
and
plan a campaign that
week,

For

example,
showed that

ities

the

and

terest

our

"know

how"

should bring

sur¬

and

bonds—the

and
will

be

let,

in

\

and

ate for them.

ductions

on

our

We

investment

know

traders

that

for

who

y

.

good

for

iampaign.

When

this

it

to

comes

By making

wise

a

will

It

tell

other

must

reductions in

your

taxes

of income—de¬

etc.

■

lection of lists as well as the ma¬
terial you send out, it is possible
t) exclude right at the start, a

In this

1sts

or

call

copy—there is

in

no

person

charge

or

J. G. White Co. Passes

stresses. I vis-

To New Interests
the

interested

more

Joseph M. Scribner

would

come,

-or

f would rather
'

ood bond

vorite

valuable

more

have,

list,

or

from

names

a

old time fa¬

an

investment

Telephone,
Oil

be

stock

one

of

the

Companies,

or

a

such

as

Standard

local

good

investment stock if obtainable, for
'his purpose. There are also lists
Available of wealthy people in al¬

banking house of J. G. White 0f bricks or facts, and particularly
Co., Inc., 37 (Wall Street, New the way they are put together,
City, according to an ao- ;determines what kind of building
nouncement made by J. Dugald
they make and how strong it is.
White and Dudley G. Luce.
\.
now then, what kind of buildMr. Luce, who has served as ing are we looking at? What kind
Executive Vice-President for the 0f stresses will' it be
subjected to
&

ANY

within the foreseeable future

Tel.

We Are at War!

2925

get

(create interest), but fi¬

inside

your

such

things

from

to

take

up

one

important point in relation

more

to this

type of campaign.

Regardless of
you are

looking for

offer something free.
your

ads,

your

prospects,

new

Then tie up

direct

mail, and
by sales¬

your personal solicitation

man,

so

that

you

not

only

ally that
Dudley G. Luce

-

can

boil

them

ANGELES

•

"SPOKANE

be fought and won
competition of produccompetition" of destruc-

for,

selves

of

as

and

a

the

have,

we

company

succeeding

who will remain

and

prog-

it must be developed at the

ress,

of

arch

' of

structure

are

the

'

'

the hands of
I

American

econ-

several

at

of

faced

is

and

alone, and which is
our friends and the

enemies.

our

bricks

strongest

our

is

One of

that

we

the job, and in

on

so many

people. Now

believe that this life-giving ap-

proach

profitably be carried

can

further in

even

the

ranks

of' our

people if we will all continue to
unite this country
through the*
bond

of

mean,

spread the ownership of our

they

ownership.

By

strength

economic
and

point

this

of

our

I

among

Americans

more

become concerned

problem

of the basic

we

confusion of

it

directly involved,

are

have initiative

more

look

us

have and

where

/whose * future

the wonder of

great

some

point
man

pocketbcok

looking

or are

' ;

•,

Let

the

kind to build
production
and

them singly.

until

with the

economic

stability and continuation, right at
the point of their pocketbook.
All this is in violent contrast
with most of the rest of the world;

'

Brick No., 1,: I thjnk, is this, a contrast absolutely basic : and
Our country is strong internally, fundamental in its philosophy,; its
White, We produce and sell primarily for assumptions, its theory and its

Mr.

r

director. Mr.

as a

the

the

be

must

omy?

past four years, becomes the third
president in the history of the

•

Markets
DENVER

the

firm.

has

Mr.

associated

in
•

who

Vice-Presidents

Co
^SALT LAKE CITY

for

most

our

the

Elected

been

directors

and

Andrus

with

C.

has been*

F.

Childs '•"&

past quarter century*"

recently

senior

as

Vice-

the investment house of" How&

Robbins,
with

since

ington
Price
Armv

his

Inc.,

have

Hayden,

return

been

Stone &

from

Wash

internal market.

We

are

our

practice,,

a

contrast

which

you

David
Q

he

served

on

the

worker

higher wages

A

qtnihlp

OllUUie,

assnriafpd
associated

ing

a

dynamic

efficiency

after

ESTABLISHED
New

York

iappf

more

retted

whn

than 56

vears

with the

romnanv

p

1915

y'

pace

many

our

degree,
whole

NEW

YORK

as

5,

N.

as

Bergdorf-Goodman

in

are

much

country.

the same across the
We feel, think, and act

°"f

have

tbe

more

far

worl"d-

bricks.

for wLinh people are
which npnnlo Qrp
for

which

I

believe

is

rtlAadirtcr

ondl

pleading and
staring them

in the face while they plead for it.
And

now

to

back-track—what

to

the point

where

philosophy

tory. What does it all add up to?
Well, to

me,

taking these facts in

1-1858

centers around reductions in costs

conjunction with others, for which

partment while James I. Brennan

Y.

Teletype NY

Manager of the municipal de-

of imnrnvimprovof

we

economic

Stock

Exchange
other Principal Exchanges

Dallas

m

New York; our le8al traditions

We believe in the sPirit of mass kind of structure do we have
Production' mass distribution, and when we add up all the bricks of
mass consumption to an unparal- which we have just taken invenleled

Harvey S. Renton, Jr., continues

narp

that

'be rest

are

J. A. HOGLE & CO.

he

training engineers and technolo- alike in most vital respects. We
gists of dvnamin
a11 kinds- As a result we are one people. This is that unity

kavp
have

anrassumTthraddhional ou<tstriPPed
There

Robert

so

the

with the White company for more
urer

tbat meskes with our. other char- forms, to> mentiont another brick
acter*stics that I believe is part that is not necessarily economic:
our econornic strength.
„
Our mass production and mass
brick may be this, consumption economy-is greatly
^ap^a^ We are the most lavish aided by a standardization in-eulpeople in the WOrld with capita1' tural patterns. Whether we speak
and tbe most miserly with the with a Texas drawl or a Brooklyn
working time of men and women, twang, we buy the same ;toothWe sPend money lavishly to build paste or automobile.
There' is
machines to save a worker a few much the same Pattern of dress to
minutes time and then we pay be purchased at Neiman-Marcus

ca? buY,more thinS* at lo™er,
Adjustment Board of the Prlces- We devote an unequalled
Transoortatinn
Corns dur— emount
of time and money in
where

ing World War II




it

of victory, and the kind

facts- about
Malon S. Andrus

in

keystone
or

output.

Co

3-6700

can
our-

do

diminish the likelihood

we

V What then

associated

BROADWAY

and

all-out World War III.

an

of'bricks

Mr; Howard, formerly President

50

Allies

our

So, American production to me,

of

WHitehal!

men's

I see it, if we
produce enough products for

ard

Tel.:

fire

of

for

more

may

than

tion,

President in the New York office

and

mankind

as

.

open

Western

Members

old

as

initiative

down

FOR BROKERS AND DEALERS
LOS

have

White succeeded his father, the own best customers, and every in- gentlemen in this room can.make
into a
founder and first president of the crease
in wages "or dividends, a definite contribution towards
simplified form which deals with
..
the handling of capital gains and company,, as president of J. G. and every step to reduce produc- preserving. .
White & Co. in 1930.
tion costs, broadens our market..
Now before I back-track just a
losses, interest and dividends, and
Associated with Mr. Luce are "
ia
this, self-contained and little, may I borrow from the
Malon S. Andrus and Vincent w
largely self-sufficient economy license prevalent. on other platYou

Prompt Wire Service

To

than

more
war

a

by

more

Vincent W. Howard

tion

Howard

1

lesson

a

to

It is that part of the secret of our
American
economy
which
w£

for,

market.

in

war

that

and

them, you should reach qualified
prospects. (2) Offer a booklet that

the

a

—

peace

on

millions " of

the

day where there, is

ever

is

good .ones *'

of

one

by

hope that they could turn their
problems over to you, and you
could
help clear things up .for

desire to try the "tax
idea, there are several

of

It is

or

war—a

thoughts and hearts
than for their bodies-r-a war fin-

as:

after they have been properly cul¬
tivated by mail and by salesmen.

some

that statement against a recent Washington
visit, we
have relatively little
centralized planning by compare
sion with European standards, gnd
'we
have, every few years, th£
right to change it if we don't like
it. But the planning I am referring to is the planning by every
business man for himself and for
his business, and in that sense,
we have a unique and tremendous
amount of planning right where
it can be most effectively applied,

power

tax

very

each

Even if

question

may

problem

faster,

you

you

minds

incurring greater tax liabili¬

objective, if booklet"

ning in the world.
of

ideas,

or

If

your

v

phases than any we have
fought before, because so far
at least, it is a war of words, of

in knowing more about
this sorely trying subject. If you
could give them ideas and some
ties;

kind

different

fact

at

are

man

We have the best kind of plan-

some

confidence.

certain

the ingenuity of

as

devise.

can

problem.

ruling

we

was

ever

customer's

house, and gain his friendship and

in

all

that

is

very

suggests a plan which would pro¬
community. Regarding tect investors from both inflation
advertising, I am going to give an or
deflation. Either of these sug¬
example of how copy itself can
gestions. should
elicit
inquiries
eliminate unprofitable leads. How¬
from people who would be inter¬
ler, before we go into that, I
ested in an "investment program,"
like

first

The

nally

flexible

spots each

CITY

stress

the door

and

will it continue to stand?

most every

would

a

ment

"

ested

this campaign than any others,

and

brick

each

fact. The kind

STREET

MAIN

22

attract

in

as

bricks,

present management have acquired
Control of the 61-year old invest¬

or

at

building

being made of
with

identified

JOHN DOE & CO.

(1) How they can reduce their
people taxes, or handle their investment
investing for accounts in such a way as to keep

would

that

ualize

<.

connection, stockholder's

which

withstand

certain

People who are dependent upon
large percentage of curiosity seek¬
their income from investments in
ers and unprofitable
inquiries/- You
whole br in part, or those who
rlust have the right target as well
have substantial assets are inter¬
p3 the
proper ammunition.

be

strong enough

di¬

se¬

find a new market and fillit profitably.
The end is always the
same; the means are as varied and

which

and

ing prospects into customers.

Interests

done give way

giventime

at

how it

Traditional

was

turn¬

words,

change.

to the one consideration—how to

in
you

considerations of what something

be

new

of

rect mail the choice of lists is
very

important.

Savings

plain, simple language

telephone

your

are

type

book¬

free

our

losses—treatment

and

prospects

for

—handling capital gains

speculators, or very
investors, would not make

small

clientele —in

one great consideration of getting
the business done. To that end we

any

to

obligation.

programs."

people

1951

how to effect many legal

*

Write,

cam¬

paign that we must be sure of one
thing—we .must reach the kind of
I>eople who might be interested in
"planned

for

this

in

constantly

must

will discuss fur¬

we

reductions

around

certain

jobs
done

ther steps in building up

then

and

prices.
We subordinate all else to the

which

do

to

York

follows that before

is spent

money

Jf\
It

stocks

on

taxes

"Tax

1951."

gent type of sales force, that could
follow
up
interested
inquiries
which our advertising would cre¬
It therefore

life in

have spent most of my

I

my

burdensome.

Send

of course, that we had the statis¬
tical department, and the intelli¬

receive interest

dividends
new

especially

potential new customers de¬
veloped by our advertising, on the
advisability of adopting "planned
investment programs." This infers,
our

any

ad

Scribner, Pittsburgh, Pa.

Members, New York Stock Exchange

inquiries from many

Next week

have investments

-—if you

in¬

to

Singer, Deane &

Partner,

the lines of
given herein

along

Doe"

"John

SCRIBNER*

President, Association of Stock Exchange Firms

good prospects.

present customers, and

our

week, in

a

Something
the

had the facil¬

we

postage

return,

three times

or

If you

suppose

Of Sound Economy
By JOSEPH M.

opin- the securities business, and to me,
ion, are more effective than larger the American economy can be
advertisements at infrequent in- visualized as a structure, a building
designed
tervals

we

should be successful.

vey

We Have Fundamentals

prepaid
cards,
and
also
single column
newspaper advertisements to put
this
message
before
investors.
Single column ads repeated daily,

Advertising in t!*<e Retail Securities Business

:

Thursday, February 15, 1951

..

.

-(722)

"7^

continues

time,is !acking 10

Dallas members of Association of Stock

as

department.

head

of

the

trading
,

address

by

Mr.

Scribner

before

"ttTK£*u5f ,hdr gues,s' DaUas'

a

-

I

structure

unequalled

1 *5
in

its

Continued on page 38

Volume 173

Number 4986

.

.

The Commercial and Financial Chronicle

.

balances.

The

for

Inflation

play

Marches On!

but

only

of

us

is

,This

.

means

stiff taxes and

a big
expenditures not

reduction of all

real

of

cause

Two With R. L.

.

.

"•

''

ment in business.

government
more

with

our

raise

controls.

We

a

than

economy

10 million

man

untarily.

tion, not piecemeal mobilization

conclusion that the

luctance

reduction

loaded

can

we.

have

to the

come

heavily

executive

is

no

wrecking

BOSTON,

branch

of

tne

Unless

P. de Rensis &

democracy
value of

certain

inflation is through stringent regi¬

take these drastic steps, unpleasant
as

of

our

economy—but

they

may

be,

our

dollar

Company, 10 State

W. J. Lynn Adds

Harriman

BOSTON,

Ripley Adds

Currier

only for

our

as

long

as

BOSTON, Mass.

Kirk

become worth only 25 cents.

lasts.

war

Mass.

has

—

Robert

become

M.

associated

with W. J. Lynn & Company, 53
Lawrence M.
Ripley & State Street. For many years he
was with A. L. Albee &
Co., Incorporated, 30 Federal St.
Co., Inc.

may

way

allowing

by

is now with Living¬
Co., 413 Washington St.

&

stone

(Special to The Financial Chronicle)

.

and

is with

—

Harriman

the

our economy

than

M.

Street.

immediately

we

Livingstone

Joseph

piecemeal

a

mobilization which encourages in¬

only cure for flation.

—

Driscoll has become affiliated with

all-out

not

Mass.

(Special to The Financial Chronicle)

inflation.

more

BROOKLINE, Mass.—Israel M.

(Special to The Financial Chronicle)

over¬

means

It

hiobilization,

It is, therefore, with re¬
that 1

the

government.

vol¬

army

in

mentation

There

!<

}

(Special to The Financial Chronicle)

de Rensis Adds

stockpiled- by theIt means a drastic

.

•of

I

Joins Livingstone Co.

Exchanges.

now

government.

no

can

voluntarily

present government in a

wartime

economy,

the billions of dollars of farm in¬

ventories

unnecessary

control inflation

York and Boston Stock

to farmers, laborers, and
It means unloading

businessmen.

I always will be

vigorously opposed to

long as war lasts.
Says this means all-out mobiliza¬
encourages

Peabody

<

More Controls Coming Ji/ subsidies

I hate the idea of more govern¬

as

which

With Kidder,

Day

(Special to The Financial Chronicle)

our

'*

Asserting desire of all of us for
more
play and less work is real
cause of our
declining dollar, Mr.
Babson expresses view only cure
for inflation is through stringent
our

of all

less work

and

•

t

of

desire

(Special to The Financial Chronicle)
.declining required by the war preparations,
BOSTON, Mass. — Lawrence M.
dollar.
The Korean war simply in order to put the war on a payBOSTON, Mass.—Richmond Wi
brought our precarious economic as-you-go basis. It means prices, Brown and William C. Hurter are Bachelder is with Kidder, Peawith R. L. Day & Co., Ill Devonstatus into sharper focus
body & Co., 75 Federal Street.
v '
wages, and profits must be con¬
:
'
trolled.
It means an end to all share Street, members of the New

the

By ROGER W. BABSON

regimentation

more

dollar to continue to

our

•:

decline. Many

.

finding it

are

extremely dif¬
ficult today to
make

ends

with

meet

57-cent
in

a<

•

dollar^

this

most

•

\

prosperous era

America

has*

known.;

ever

In

1 9

40,

a

•

friend of mine

*

The

goc an air mail

letter

from

c.

of

amount
Roger W.,£abson

\4v

30

drachmas,

cents.; Just the

ceived

air

an

same

weight

counted the

1940!

about

or

from

How

much

as

would

they

Both

become

worthless

He

*

it took

as

like to

you

in

but

in

as

x

buy.

average

up

of

as

takes
in

to

can

20%.
The

Air

v

has

eaten

out

as

its

Dollar

on

and

iques.

.

■ ■

thi

improvenient m
v

plant

,

ible

Xv

:

■
.

factorSr7saUsfactory trends
are

very

,

_

-

tabl,
may

YOU

re¬

^

If

intere®Ieefficiency f°r ?®dastry.
of emirie entire industry

he

measures
probably

some

budget

substantial

helieve

&

periodi0f

^iiizaUon_0f coal

Decline

Management blames the decline
dollar

'

-

are

Causes of

of the

day-t0-dpa*

a

believe

750 jet fighters.
Some

; on

are

alone

of

current and
efficiency

0

•

practices,

ports that 1he decline in the dol¬
lar

r0gress m

buy

costs

Force

,y>

shown 1

^Sss^ent. ^;7curs
direction

Uw.

Almost anything you
has
spiralled
since

name

Korea.

■

*

100%; clothing costs by
95%; and rent costs by

about

•

can

twice

1940

Food

car.

;

over

about

been

about the

electee
little has' been

;
~

in

money

dollars

your

already

dollars

many

the

amount

It

has

*

It alreadv

ries E bonds which you.
bought in
,1943, you will have lost an ap¬
what

•

.

-

happened. By the time you
get around to cash your 1953 Se¬

of

.

almost

money.

It can't happen here?

terms

-

'

has

preciable

v

;

bonds

being paid

are

due;

■

an

have

bought Greek Government
1940?

4>5

Athens.

life insurance policies
Athenian
company,
or
to

;

.

postage—9,700 drach¬

hold

in

on.

other day, he re¬
mail letter of the

mas—323 times
in

e

••the envelope ky.

•

1 was

sta g

p o

Detroit

/

The

Greece.

,

raises. The

wage

earner blames management
for price hiking in a seller's mar¬

wage

ket.
the

Both groups are at fault. But
real

difficulty

lies

wi'h

the

fact that the
•is

production of goods
keeping up with the de¬

not

mand.

The Bureau of Labor Sta¬

tistics
pay

reveals

an
average hourly
rise in the manufacturing in- ;

dustries from
to

a

the

in

1946 <

1950, or 50%. During
time, the Bureau of La-

same

bor

Statittics'

rose

36.9%.

age

hourly

10%

in

of

low of $1

$1.50 in

Consumer

This

meant

increase

actual

an

of

<

Index
aver¬

around

purchasing

KWIIR Produced

power

From

1946

profits

Per KW

Name Plate

workers.
to

1950,

before

rose,

corporate

taxes,

Generator

[
Year

from

Capacity— KW

.

*

Plant
Heat.

Generator

Rate

Capacity

BTU/KWHR
.

i

$23.6 billion to around $37 billion
in

1950,

or ?an

approximate

57% ;

.

\

1946

$13.6

billion,

corporate

and

gains

to

$21.5

rose

and

with

the

prices.

.tration
demand

which

of
—

increase

This is

the law
action

a

of

good

wages ;

illus-

14,070

1,085,000

3,323

12,870

1,225,000

4,165

12,660

1950

1,500,000

5,382

12,450

'

,

V' •• .j" TT. •' '!***' *

** '**

•

~
1

.

■*-

•
•

•>

•«
.

*

'

•
r

•

.

•

,

supply and

and

ultimately takes

in

3,112

■

;

billion in 1950, and compare
fairly
•'well

800,000

1945

were

1935
1940

increase. After paying taxes, how;
ever,

*.

•

reaction
care




of

—

un¬

>§\V
Vk.

^

v.;

•

******

J

16

The Commercial and Financial Chronicle

(724)

...

Thursday, February 15, 1951

the extent that he does not possess

this

knowledge,

Mutual Funds

ternatives
he

Problems of Reconversion
Prospectus

upon

request

investment dealer,

your

National

or

from
from

&

securities

corporation

research

JJO BROADWAY, NEW YORK 5, N.

limes

in

be

to

seems

scale,

we

history when

recent

our

of the few

much

the public, en masse, is concerned
with a national problem and pre¬

paring

make

to

mind

its

up

it.

about

Y.

,

The problem,

of course, is infla¬
and the
consequent effects
one's
purse.
Ordinarily,

tion
upon

there
tween

interval

sufficient

is

inflationary periods,

be¬

that
the

so

the public has forgotten about

painful effects of the last

BULLOCK

fore

investing of the home¬
if investors realized
that, in addition to formal secu¬
rity analysis, portfolio supervision
included such
usually neglected
factors as management appraisal,
history and prospects for the in¬
dustry, the effects of such in¬
digenous factors as the ratio of
variable to fixed costs
of

flexibility, marketing prob¬

be¬

try competition, state of the tech¬
nical

arts,

factors

But, this time the situation ap¬
pears to be different.
We were

hardly
when

last inflation
the steam was being built
of

out

meas¬

a

new

a

one.

FUND

as

lems, labor problems, intra-indus-

one

with

confronted

is

it

probably

made variety,

ure

the

such

and
the

as

effect

exogenous

of

pertinent

state and Federal

legislation, tax¬
ation, war production, allocations,
price freezes and inter-industry
competition
to name at ran¬
dom a few problems with which
...

in the generation again. The
phrases, "negative rate of inter¬
est," "loss of purchasing power,"
"a 60c„ dollar," and "bonds that
cost three to get four worth two,"
up

Prospectus from your
investment

dealer

all

of the widespread pub¬
licity given the last inflation, are
still ringing in our ears.

or

part

But

Established 1894
New York

One Wall Street

sophisticated

we are a

inflation"

in

terms

of

from the market place

appearance

of almost all utility consumer dur¬
ables
and
semi-durables
upon
which
come

low

many

and

that

tutionalized

licly offered Mutual Funds.

placed

covers

shares
needs

and

to

meet

both

01

all types

Company
the

investors.

private

the Manager,-

dress

Funds

special

institutional

Ad¬
Mutual

Department.

in

obligations

insti¬

an

in

or

debt

or

being

are

the hazard,

on

n

Consequently, the public, fol¬
lowing the vanguard, seems to bt
preparing to flee the dollar and

seek haven in

avoid

equities in order to
repetition of a very

the

painful experience.

And

unlike

cumstance,

the cir¬

the

last

war

when

Kidder, peabody & Co.
Founded 1865

Members New York Stock and
Curb

form

contractual

to balance

We also know

surplus savings

complete, impartial
information about any pub¬

Investment

middle-in¬

groups depended

the family budget.

Our service

*

Exchanges

prix-fixe investments might
have "hedged" a post-war slump,
that now there is no end in sight
may add force to the public's de¬
cision.
In

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

MUrray Hill 2-7190

Whether

anticipation of such a course
of public action, the investment
industry can solve a problem and
perform an important service by
impressing upon the prospective
investors

achieve the

ture status of

In

the words of Edward

"Investment
full-time

Funds

his

of

thousand

one

much

hundred

five

dollar

the fund, for

it cost

as

this

the cost of portfolio sup¬
ervision is a common burden or
reason:

overhead

which

cost

varies

only

insignificantly with the size of the
fund.

The alternatives, to

the investor,
of expert fund's management are
hiring the equivalent staff, doing
the work himself, or investing by
random

some

theory of stock

se¬

realize

it

if

properly

were

pre¬

sented to them.
In

the

theory

of least cost, or

self.

While

analysts

by

are

a

novices
value

to him¬

of

competitive

1.'

absolute

as

of Boston

standards

proper

that the

ignored

broker's

not

or

sought

fect

knowledge"

adviser's advice,
or
place his funds in the

or

to

hands of experienced management.
When
the public

finally

into

get
*

of

Edward
ten

ically
pects
still

or

the

Rubin,
eleven

developed
of

market

this

available,

summer

theme.

without

American Shaies,

on

a

does

large

in an excellent series
investment letters, log¬

last

Copies

the

of

alterna¬

with which he is faced.

To

various
are

Investors

Massachusetts

Boston,

Feb. 6, filed

on

a

Trust,

registra¬

tion statement with the Securities
and

ing

Exchange Commission cover¬
1,912,753 shares of beneficial

A Mutual tmr4$fm&nt fumf

trust

aggregating $70,963,136. Un¬
derwriter is Vance, Sanders & Co.
Financial

Fund, Inc. on Jan. 9,
registration statement with
the Securities and Exchange Com¬
mission covering 30,000 shares, ag¬
gregating $330,000. The registra¬
filed

a

tion

statement

Feb.

6.

effective

became

GROWTH
COMPANIES, Inc.
WfthmpoM Skf&r

Eaton

Stock

Howard

&

Feb.

on

Fund,
the

with

13 filed

lilii 7y ||| \

Pfospntivs isptn

Eaton & Howard Balanced Fund,

Boston,

13 filed with the

Feb.

on

Securities

&

Commis¬
registration statement cov¬
ering 700,000 trust shares.

sion

Exchange

a

THE

1950

ANNUAL

REVIEW

AND FORECAST OF ECONOMIC

several

economists

best analyses

investment
One Wall

that
had

it

ever

pared

to

out of the

this

industry

by

year.

economist stated

the

Harold

^■"prospectus

analysis I he

best
The

seen.

the

of

one

as

come

Street

was

your

report, pre¬
Schreder,

from

investment dealo
or

X.!

PHILADELPHIA 2. PA.

Vice-President of the Investment

Research
Board

Department

of Directors of

curities,

Inc.,

for

the

Group Se¬

analyzes

the

market outlook for 1951

TEXAS

STACKS
is

stock

and then

ITS

BLUE

of the finest

one

pieces

of sales literature to appear in the
mutual funds field. The pamphlet,

reprinted

is

Knickerbocker
ft Fund
—■

—-

article

informative.

"no letterhead

E d

B.

s 0 n

"Herald,"

takes

the

attitude

that he will not invest until he
see

better

the outlook clearly had

dig

a hole and bury his
here and now.

"The British have

and

indication

sufficient

an

expres¬

a

Fund, which
record growth in

rate

KNICKERBOCKER
20

"in 30

this

Texas

Smith,
Boston
said, "The in¬

once

who

vestor

are

names"

pamphlet, in dealers'
hands, ought to have yquite an im¬
pact
on
prospective
investors?

People's Books

Prospectus may be obtained from
your investment dealer describing
the company and its shares, includ¬
ing price and terms of offering.

subheads

The

may

ZSSSSm

SHARES

mniWWv

industry

by reaching its first million

in assets in

months, is proving
promotion.
The Fund passed the $3,000,000
mark on Jan. 4.
Bradsehamp &
Company,
203
Union
National
it is

no

Bank

novice at sales

Building, Houston 2, Texas.

sion, 'fishing in muddy water,'
which

the

covers

well.

Sometimes

idea
the

rather

.water

a little less muddy than
others, but it never is en¬
tirely clear. There is a risk in
any
investment at any time.
And there is a risk in a liquid
position. All the money which

seems

ever

has

been

by somebody taking
j|:

has

made

sis

a

chance."

into

insignificance;
as

people
'not

wars

a

sink

taxation

the most heavily taxed

of

former

times

could

have

conceived;
a
debt
larger than all the other public
debts

that

ever

existed

PORTFOLIO

American

Shares

.of

ana¬

lyzes the diversification of $1,000,
at

net

asset

holdings

value

Jan.

the

of

single

31,

fund's

The
largest group investment, 14.5%,
is in the oil industry. The largest
on

investment is

1951.

Republic

in

Steel.
INVESTING

Macaulay, in 1830, was
alarmed by "A war compared

such

Selected

been

ff

with which all other

INVESTMENT

in

the

TION

common

sions

FOR

contains
sense

which

have to make.

a

THE

great

about

every

DURA¬

deal

basic

investor

of

deci¬

will

Simply written, the

Prospectus from

your

local Dealer, or

pamphlet explains quite logically
the value of "balanced"

The

Putnam

Fund

lists

American Funds

investing.

Distributors, Inc.

its port¬

as¬

probably

cost, from Selected
139 La Salle St., Chicago.

INC.

Exchange Place

New York

have set

the

—

Diversification, Supervision on<1
Safe-keeping of Investments

alone, "pair of phenomena," "nine
dynamic Texans," "task tackier,"

that

Notes From Other

for the

superbly written, eye-catching

and

states,"

Lord

a

50 State Street, Boston

by Mary K.
conversely, sellers
price. Bourgeois, which first appeared in
the maganize
"Texas Industry,"

at
•

,

for investments gone
sour, despite
the fact
that the investor may

Congress Street

Boston 9, Massachusetts

*

treated

ably, "the stock market" is blamed

refused

Keystone Company

brokers,

investment industry be concerned
with the way in which the
public
invests its savings, since, invari¬

have
be obtained from

and

PUTNAM FUND Distmbutou. b#c

Struthers & Co.

a

this theory makes one
important assumption which is not
However,

important

when

appraisal.

And, it is only

(Series S1-S2-S3-S4)




are

menace

of

COMMON STOCKS

s

these

they

PREFERRED STOCKS

50

be dangerous

to

Exchange

seek the highest alternative

money

like

Commis¬
sion
covering 500,000 shares of
$1
par
common
amounting
to
$7,000,000. Underwriter is Wood,

CHIPS

price, buyers seek the alternative

the

(Series B1-B2-B3-B4)

TLe

the

market

and

a
Detailed Analysis of
or
the
blind-folded
pushing of the Business Picture.
Free copies
pins into stock marekt tables. By
may still be available from Dis¬
all odds, mutual funds manage¬
tributors
Group. Inc.,
63
Wall
ment is the least costly alterna¬
Street, New York 5, N. Y.
tive, a fact which investors would -

can

investment

BONDS

may

often

stock

tools in the hands of experienced

IN

Prospectus

Too

the

a

//Jno ton

registration

a

Feb. 5 with the Se¬

on

lection, either the "tips" of friends presents

learns just enough about "priceearnings ratios," "book value" and
in

their capital

.(Series K.1-K2)

to

is

FUND

New

portfolio,
AND STOCK MARKET CONDI¬
as
a
mutual fund portfolio pos¬
TIONS has been characterized by
sesses,
would cost him just as
or

Rubin,

management

job."*

newcomer

INVESTMENT FUNDS
investing

investment port¬

folio.

Custodian

Certificates of Participation

an

filed

Inc.,

selection and di¬

same

versification

tives

box you pick, but the choice of
equities is generally regarded as
having some effect upon the fu¬

ey^tone

curities

Boston

difference

deposit

has

Fund,

approve

always fulfilled, namely, that the
consumer or public possesses "per¬

safety

PUTNAM

Registrations

Street

York,

implications,

Exchange Commission would
Securities & Exchange Commis¬
the use of the economic
sion a registration statement cov¬
theory of alternative costs (the
ering 700,000 trust shares.
theory is universally accepted by

and

the fact that equity in¬
vesting is not quite as simple as
dropping money in a safety de¬
posit box.
It usually makes no

which

their

and

statement

Securities

the

not

or

£7/te •Seorao

behave rationally.

Pine

group

quality depreciation, upgrading of
goods, and the understandable dis¬

of

con¬

We

"hidden

a

Write for

is

management

cerned.

orthodox
economic
analysts) in
know, on the basis mutual funds' sales literature is
of recent and painful experience,
outside the domain of this column,
that controls and ceilings cannot
but it does seem important to im¬
allay inflation, but only produce
press
upon the investor that, to

this time.

CALVIN BULLOCK

investment

will

Investment

would

have

less

one

behave

will

he is informed by the investment
industry of various investment al¬

By ROBERT R. RICH

This

he

irrationally, and to the extent that

world

added

together."—From

Edward E. Hale's "Brevits."

folio, as of Jan. 1, explaining the
Continued

on

page

33

650 s.

Spring St.. Los Angeles 14

Volume 173

Number 4986

.

.

Commercial and Financial Chronicle
The

.

(725)
In

Investment in Mutual Funds

1890,

investment

grief.

By JOHN McG. DALENZ*

and

Vice-President, Calvin Bullock

basic

two

will

I
am

not, on this occasion, speaking
assembly of stock brokers,

to

an

as

is my usual

custom, and I will

keep

talk

1

r e

a

opinion,

normally

for

When

that

would

should

be

and
first

your

Investment

a

man

a

the

raise

...family,

first

finan¬

buy

life

vious

insurance

-and

for

ob-

This could be in

savings

a

bank account or other fixed dollar

obligations

which

*

sufficient

emergency
reserve
set up too much.
A

others

and

to

his

firm's

in

company

indusmany

of

my

first

in-

1924—and

position in this
to Fleming's in

occupy a

country

similar

England.
Several
other
foresighted people, quite independ-

a

corporation engaged in
of

for

managing invest¬

other

people.

An

freight

or

cars,

are

com¬

establishment of investment
panies
as
an
industry in

rule of thumb would be to
build up this fund to the equiva¬
lent of one year's budget—though
good

com-

this

country, although there had been
one

two earlier ventures along

or

these general lines.
Prior to World War I, the buying of securities, especially stocks,
was largely a pastime of the
rich,
but

whole investment picture
changed during World War I

our

was

when

millions

were

Basic Principles

There

for
on

two

are

moderating
which

appropriations,

basic principles
investment risks

investment

are operated.

companies
The first of these is

stocks

on

the

of

theory that 10

safer

are

than

100

one,

safer than 10.

The

second

basic

principle

is

of

gingering organization, so here are
large trained staffs of experts desirable. The best types of investment companies engage the serv-

Even

though

torians
the

have

financial

cited

earlier

cases,

investment

companies
started, for all practical purposes,
year

the year

was

1873, and the place

tions, but from
servation

the

individual

of

my

the

own

long ob-

investment pub-

lie I doubt if the percentage
very high.
1950

was

bull

a

market

was

year,

is always distressing to see one's
stocks go down in price, but the
most

distressing of all is to

one's

stocks

see

when

down

go

the

There used to be the old adage
one
could buy stocks and
forget them with assurance of

known

to decline in
American Can,

the

year

that

were:

profit.

Radiator, American Tobacco, Coca
Cola, Corn Products, General

But

not

in

this

day

and

American

The American economy is Foods, Johns Manville, Loew's,
too dynamic for that.
Constant Otis Elevator, Reynolds Tobacco,
and sometimes violent change is Twentieth
Century-Fox,
Woolits chief characteristic. A failure worth, and Wrigley.
age.

in

terms

of

dollars

and

cents.

ican

fateful, day last June when war
broke
out
in
Korea.
It
has
changed the immediate outlook
for • most of you, as it has for

investment

companies,

the

closed-end trust and the open-end
funds.

closed-end

about

Some may have adapted
to the changed condi-

as

period saw the start of the
two major classifications of Amer-

A

how

lists

market is rising.
Yet in-every
public utilities, oils, rail- bull market many stocks inevitroads, steels, etc. These experts ably do go down. Despite the rise
conduct not only exhaustive sta- of the market as a whole nearly a
tistical analyses within their of- quarter of all the stocks on the
fices, but much of their time is New York Stock Exchange despent in the field as well.
clined in 1950.
Some of the best

fields

means

This

Scotland.

their

small

sequence.

his¬

But

investor?

ices of research specialists in such

investors to adapt an investment policy to
to
securities such changes can be costly.
But
through the major selling drives on
the
other
hand,
successful
of Liberty Bonds.
own shareholders and these share¬
Subsequent in- adaptation
can
pay
handsome
holders participate in the income vestment in other types of bonds, profits.
and profits which are the fruits and then
stocks, was a natural
Let us examine what all this

of the company's management.

were added or in-

creased.

continuous, expelienced supervi- but it does not necessarily follow
sion. Just as in a successful en- that all investors were happy. It

educated

The investment

company undertakes to manage
these assets for the benefit of its

are

readily
Many do not set up

convertible.

out

other companies.

John McG. Dalenz

to

reasons.

fund.

brought

posed of the stocks and bonds of

His second financial obligation
should be to set up an emergency

a

generally speaking, is

a

business

mills

ing, I believe,
be

founder

provisions of this Act have
favorably situated in a defense
much to make the stocks
of
economy, were eliminated or re¬
investment company shares
popu- duced. Steel stocks, rails, oils and
lar with the investment public.
aircrafts, which might be expected
to reflect a step-up in
military

investment

to

but its assets, instead of being in
the form of oil wells or rolling

his

cial undertak-i

should

in¬

are

investment company is organized
much like any other corporation,

and

to

or

ments

and

marries
starts

companies

The

The

done

principle of diversification

c
S.

minimize the

to

attached

trust

business

world

tt
U.

in

risk that ently of each other, also formed
investing in indi¬ companies in 1924. That year, for
vidual companies.
An investment all practical purposes, marks the

is

starts out into
the

weathered

history similar to that

a

is

vestment
came

company,

young

have

in firm, the late Mr. Calvin
Bullock,

you—as,

concern.

tended

financial crisis successfully,

respects.

field

-

tively free of
technical
jargon.

invest-

of the investment
company

Function of Investment Companies

my

early British

that

companies

This

endeavor
to

since

try in the United States in

investment
my

Ever

tnvmfmpnt rnmnani«
Livestment Companies

of dividends.

try to remember that I

ones

with

period

every

moderating investment risks:
(1) diversification, and (2) continuous, experienced super¬
vision.
Describes periodic purchase plans in buying mutual
funds shares and means of building up an estate by reinvest¬
ment

those

companies

ment

for

principles

this

to

came

conservative

colors.

time

companies and distinguishes between various types. Lays down

financial

a

Fleming

other

through

flying

Investment banker reviews history and functions of investment

was

companies

The

the

came

as

there

in England and the weaker

panic

17

company

has

a

19o0 presents

example.

You

will

an

excellent

recall

fixed number of shares outstand-

that

Types of Investment Funds
There

are

types

many

vestment funds

of

•

in-

The largest grouD

JttSS
primarily in
0f these

chips "

what are generally reas
established and sea-

garded
soned
more

investments.
venturesome

"growth
gr0up

stocks. Some

common

invest in orthodox "blue

or

Others

>

and- go

stocks."

Another

are*"balanced

are

in for
large

funds" which

businessmen,, for investors
and a^ an times
At
one
time in my career I
hold bonds and preing, and if there are more buyers for investment company managers, fprred stocks as well
as
common
this may be less, depending on spent some 10 years as manager
than sellers the price rises, and
In preparing this talk I re- stocks. Then the^e are
the nature of the income and the of my firm's London office; rand
conversely if there are more sell- viewed a recent report of one of
funds, concentrating in chemicals,
during that period it was my good ers than
degree of responsibilities.
buyers the price declines, the country's largest investment aviations etc Also there
are other
fortune to
—

industry

get to know

You will notice that I have not

referred

to

gories

investments—as they are

as

either

frequently

and

beled.

of

these

cate¬

"

The

start

into

to

stocks would

enter

consideration for the first
the

use

"invest¬

word

advisedly because there is

little

so

be

investment program, and

I

ment"

should

step

common
our

time.

la¬

understanding

of

the

difference between that word and
two

the

senior

others:

"speculation"

"gambling" in stocks.
in

my own words,
the three for you.

and

I will now,

to define

try

a

number

Scottish

and

English investment company man¬
agers.
It was a very interesting

These

quently
the

prices can be, and freare, without reference to

intrinsic value

of the

shares,

so

tion

of

long-term

If,

you

however,

into stock of

try such
of

It

the United States, inter¬

fedeem shgaresanadt ^tMue

that caused

was

estingly,

at

these

early
Scottish investment companies to
be
formed,
as
British
capital
which

in

was

surplus

at

forced

invest

to

overseas.

19th
were

That

period happened to coincide with

all times.

These prices are al-

related to asset value

ways

brand

a

company

increases.

If

you

say,

making
are

fa¬

miliar with the hazards that went
with the buying of stocks in auto¬
mobile companies and radio com¬

panies in their earlier days, or if
you are connected in some way
with

television

the

know

what

it

is

therefore,

are,

what

the

industry and

all

about

prepared

military call

to

a

and

take

"calcu¬

lated risk"—then you are a spec¬
ulator.

If

buy

stock on casual
tip or hearsay—then you are a
gambler,
"Speculators
and
a

gamblers make money sometimes,
of course, but they can lose
very
heavily, too.
As it is possible to cover

small

segment

field in this
be

best

if

I

profited

or

one

of

the

only a
securities

lecture it would

concentrate

*A

talk by Mr. Dalenz at
of Business
Administration,

on

the

the

College
Lehigh Uni¬
versity, Bethlehem, Pa., Jan. 13, 1951.




stocks.

In

the

months

specialtyfunds whXLvest
jn bonds;

just
others just in preferred

stocks
Th

'

arp

first-hand

as

In the

of

the

speculative environment
late

20's

closed-end

the

funds

provided an added zest as
many of them went to fanciful
premiums in the open market. It

Fixed Trusts

a

investi¬

The young man in question was

In the period 1930 to 1932 there
was
a
brief popularity for what
were known as "fixed trusts." In

Robert

Fleming, who recognized effect, people could buy a package
opportunity for a new busi¬ of securities with no management
to do this same sort of thing involved. But if there is one thing
for many other people and,
in that is certain in investment, it
1873, he formed the first modern is "change," and in a short time
the

ness

investment company.

ing lived

to

a

ripe

Mr. Flem¬

old

age

and

his

banking firm of Robert Flem¬
ing & Co. became one of Great
Britain's greatest financial houses.
His 1873 company proved to be
an
extremely profitable invest¬
ment,
and
over
the years
he

the

success

the

fixed

trusts

lost

their

popu¬

larity.
In the year 1932 the open-end
fund, which is now known popu¬
larly as the mutual fund, began
to

come

been

into

its

own.

There has

steady and gradual growth

a

in

this type of fund ever since,
Seeing and in the last several years in¬
terest has progressed at a quick¬
Fleming, other

companies.

of Mr.

Scotsmen
and
Englishment also ened pace.
In 1945 the mutual
got into this new business. Some funds passed the closed-end funds
companies were formed to invest in size and today the mutual funds
primarily in South America, have become an important pillar
which was also being developed of our financial
setup. At the end
at the time.

Thfen,
new

as

of 1950 it

is

inevitable

in

any

^business, the speculative ele¬

ment'

got into
it and
formed
companies that over-extended and
placed their funds in highly spec¬
ulative issues.
<
:
,

number

of

them

nnt

J

-p
T„

are

f

located

n

in

Philadelphia Minneapolis

pubhc
metal

qtr

containers,

companies

not

Continued

on page

28

in-

worth.

considerably

investments made
this

of

formed other

,

you

the

gation.

us

only that one product, then your
risk

evidently
from
result

indus¬

new

common

a company whose polinvest in conservative

^

trinsie

home

during the middle of the
century
and
its owners

money

the stock, let

as

and

investor.

put

you

television

a

income

are an

to

very

you

profit—then

is

of the

the
opening
of
the
American was the closed-end fund ihat was
knowingly purchase a West and the building of our early in chief demand in that specula¬
security, including common stock, railroads, and British capital was tive period.
of an old, established,
but still flowing into American railroad
Just as 1890 marked the transi¬
growing firm—one making a wide securities—and on pretty much of tion
point in England, so did the
diversity of products and one a hit-or-miss basis. One wealthy
year 1929 do the same for the in¬
that has a long record of dividend merchant in Dundee in Scotland
dustry in this country. The spec¬
payments, even through depres¬ decided to send one of his young ulative
companies suffered severe
sions, and you purchase this se¬ clerks to the United States to
losses;
the
more
conservative
curity not just to grab a quick make a first-hand investigation came
through well. But manage¬
dollar or two, but in the expecta¬ of his particular railroads.
He ment was
put to a severe test.

If

companies,
icy

The
open-end funds,
on
the following the invasion of South
little other
hand, issue new shares at Korea many stocks were sold, and
history of these early com¬ net
asset price each day, plus a many others purchased. A pattern
panies will be found in text books.

experience because

third

an

here

erroneously

of

was

estimated that there

mutual

1,000,000
funds,
with

around

of
of

$2,500,000,000.

were

over

owners

assets

In 1940 Congress passed
vestment Company Act, a

constructive

piece

the In¬
highly,
of legislation.

18

The Commercial and Financial Chronicle

(726)

l;t

Says Bankers Musi

Europe and American Gold

Our

Reporter

By PAUL EINZIG
on

LONDON, Eng.—There has been lately a certain amount

Protect ValHe of Dollar
Orval W. Adams,

the monetary authorities is having its
influence upon the government market which, aside from a few
issues, is in a defensive position on rather light volume.
It is
indicated that many operators are inclined to wait and see what
will be the outcome of this disagreement between the powers
The controversy among

of

withdrawals of gold from the
reserve of the United States. France in particular has been subject
to adverse comment owing to the resale to hoarders by the Bank
of France of gold withdrawn from the United
States.
The publication of figures of the con¬
version of dollar reserves into gold by Britain

countries during the sec¬
ond half of 1950 appears to have some resent¬
ment
in
American
opinion. Beyond doubt
and other European

considerably
the outflow of gold from the United States,
caused by the adverse change in the balance
of payments. It would be a pity if they should
operations have increased

will be dpne about putting funds to
time because it is reported there are
many points of disagreement that will have to be ironed out
among the monetary authorities.
The bank issues have been on the inactive side, although
there has been an inclination to take on some of the short-terms
that

be, before very much

work.

This might take some

There

can

*.
of

>

■

course

be

justification for

no

gold at a premium for

be a matter of
Dr. Paul Einzi?
opinion whether South Africa and other gold
producing countries should be allowed to sell
Ifor such purposes part of their own output. There can be no two
opinions, however, about the moral aspects of misusing the con¬
vertibility of the dollar which is maintained for the benefit of
official foreign holders. The object of the liberal attitude of the
United States authorities in this respect is to maintain the inter¬
national character of the dollar by ensuring that, from an inter¬
national point of view, it should be regarded as being synonymous
with a definite quantity of gold. It is decidedly contrary to the
spirit of the game to feed private hoards with the aid of gold
withdrawn from the American reserve.
After all, the United
hoarding

It

purposes,

States Government is opposed to the

may

resumption of the converti¬

bility of the dollar for the benefit of domestic holders, precisely
because the increase of private holdings to the detriment of official
holdings is considered to be against the public interest. *
It may be argued that gold hoarded by private interests con•

a

Judging

secondary reserve, as it forms part of the national wealth.
by experience in France and elsewhere, however, the

position to draw on that reserve
to do so in order to meet an adverse

\

monetary authorities are not in

*

when it is
balance of

urgently

necessary

a

payments. These may be, in given circumstances; some

markets with gold
.drawn from official reserves if and when gold hoarding is an
alternative to food hoarding, as is the case to some extent in India.
But gold hoarding in Western Europe is an unmitigated evil from
the point of view of public interest.
justification

conversion

The

unofficial

supplying

to

dollar

of

bullion

reserves

for the purpose

into gold

of retaining it as part of the
matter from

different
resale

the

hoarders.

arose

on

conflict.

Korean

official reserve is, of course, a totally
withdrawal of gold for the purpose of

was

to

which

The

It

Even

due

to the

dollar devaluation rumors

reumors

proving to be correct, it was under¬
dollar reserves felt

impelled to reduce the risk of loss through a dollar devaluation.

of view, it was a
gold for the sake

Admittedly, from
to

a broader political point
convert official dollar holdings into

of reducing a risk which was in any case very
concerned

ments

ought

to

have

small. The govern¬
that American

in mind

borne

opinion is apt to be very touchy when there is an outflow of gold.
As far as Britain is concerned, the risk of a loss on a dollar
devaluation is reduced in
International
serves

any case

by the fact that she owes the

Monetary Fund $300,000,000.

A loss on dollar re¬
corresponding

of that amount would have been offset by a

this dollar liability. There is also the much larger
dollar liability of the Loan of 1945, the service of which would
become less costly in terms of gold or sterling in case of a dollar
devaluation. To be quite correct, such a devaluation would offset
to some extent the sterling loss suffered through the devaluation
profit

of

on

sterling in 1949.
necessary

to add that no exception

should be taken to the legitimate use of the converti¬

bility of the dollar by governments holding dollar reserves.
mere

fact that such

use

in the dollar, because it

the

The

is regarded

as a

sign of weakness.

It

may

in

in the situation

the

and

there has been sniping by
shots

some

Committee.

Market

Open

both sides in the recent past.

where the whole affair may eventually
to work out a solution to the conflict.

or

have

on

dence

to cut them

settling

loose, and the effect these various ideas would

the

is

nature
be

to

market. -Nonetheless,

government
no

looked

the

interest

is

the

interest

rate

these

various

differences

problems.

place, it does not seem as though the level of
the all-important point in this disagreement

should

people

future

near

to

answer

the monetary authorities.

among
most

first

rates

in

for

immediate

little of a
because there

very

be

not

The highness

such

of

or

lowness of the
even though

great concern,

making, it Jhe bone of contention. If the rate on
long governments were at 3%, or 3
% it- would not stop the
selling of governments by insurance companies and savings banks
in order to purchase corporate bonds, mortgages and other types
of non-government obligations at higher yields.
There would most
are

likely not be

any decrease
interest rates on

because
These

institutions

create

reserves

would

in loans by the commercial banks just
government securities were higher.

continue

to

Treasuries

sell

in

order

higher yielding loans.
The level of interest rates which is being so widely discussed is
not the crux of the problem which has caused the disagreement
among the monetary authorities.

The
the

have

to

make

British

heart

real

powers

the

creation

gold standard

moderate withdrawal tended to
interest rates and trade. On the

even a

marked effects on
other hand, the United States today could well afford to lose many
billions of dollars of gold without suffering any adverse economic
very

Nevertheless

it

is

withdrawals, occasioned by
payments,

are

that

market and

for non-bank

investors

in

so

and

reserve

by commercial banks, a not too difficult situation.
If
there were no protection of the government market by the Cen¬
tral Banks, the access to reserve balances would be a much less
certain

and a much more costly venture for the deposit banks.
loans, which are still increasing and are feeding the flames
of inflation, would most likely be sharply lower if there were no
support of the government securities market by the Federal
In

other

words,

by

not

having

to

protect

viewed

ments would be wise in

quite

understandable

causes

with

other than

disfavor

and

an

that European
adverse balance

European

of

inflation.

are used

Only

It is the stopping of

(Special to The Financial Chronicle)

Four Join

interest

rates, although most of the discus¬

sion centers around the latter.

The
to

an

last

extent

four

maturities

under

under accumulation

the

of

shadow

the

partially-exempts, although
the

of

controversy,

by the deposit institutions.

Volume in the market

have

been

added,

more

are

is. placed
He

in

a
'pay-as-you-go'
period of distress."

pointed out that the

have
pay

dual

reason

are

at

sixes

and

to believe there will

sevens.

be any

Nevertheless,

there

is

no

change in the protection that

has been given the market.

ANGELES,

Calif.

—

first,

from

received

their

de¬

positors; and secondly, a moral
obligation to repay the depositors
in "money of substantial purchas¬
ing power which their customers
have earned through thrift per¬
and effort."

severance

"The great middle

class of prac¬

other nation of the
world has been wiped out through
tically

every

and

inflation
I place

ers'

here,"

silence

time

and

impossible

is

is

world

a

not

which

is

of

last hope

The

casualty.

war

sound

A

insuring • against
the
dollar becoming a cold

without

American

the

in a
partisanship of

is

America

solvent

"Bank¬

warned.

that question

kind.

worst

take

mustn't

that

he

on

this

like

the

America,

solvent

without

dollar."

possible

a

Tifft Brothers Add
(Special to The Financial Chronicle)

staff

added

has' been

Tifft

of

R.

Conn.—Frank

HARTFORD,
Wheeler

Brothers,

9

to

the

Lewis

Street, members of the New York
Stock Exchanges.

He

and

Boston

was

formerly with Bache & Co.

Margaret Kennedy Co.
Formed in New York
Kennedy has formed
Kennedy Co. with of¬
120 Broadway, New York

Margaret
Margaret
fices at

City,

to

engage

the securities

in

Miss Kennedy was for*'

with Distributors Group,
prior thereto with Van
& Towne, investment coun¬

and

Strum

sellors.

Grangaard Company, Inc.

With Irving Lundborg
Rex

(Special to The Financial Chronicle)

SAN FRANCISCO,

Minn.—Gran¬

MINNEAPOLIS,
gaard
Life

Company, Inc., New York
Building, is engaging in a

securities

Officers

business.

are

President and
Treasurer; Agnes C. Grangaard,
Vice-President; Arthur Gran¬
M.

O.

gaard,

LOS

bankers

obligation,

to
dollars out in numbers equal
a

those

to

on

this

(Special to The Financial Chronicle)

There will most likely not be very much enthusi¬
developing for government securities while the monetary

authorities

imminent

a

participation!
asm

even¬

an

is

Again there has

whole has been light and in some
than the usual amount of professional
as

(Special to The Financial Chronicle)

(Special to The Financial Chronicle)

he

"unless every Federal expense is
cut to the bone and the economy

Inc.

May With Lester Co.

King Merritt

tuality,

a

war

danger
such

merly

of

from

casualty." The
of

Orval W. Adams

and

the level

the

dollar

business.

not

to

is

becoming

this source of inflation which is the
important point of difference between the monetary authorities

govern¬

allowing for this reaction.

Barrett With Hutton Co.

or

to make loans, which add to the
when Federal stops supporting the
government market is the "engine of inflation" going to be shut

pressure

of

cold

support prices of Treasury obligations the Central Banks would
not make readily accessible to the commercial banks,
reserve

balances, which in turn

the

of

prevent

Bank

Banks.

obliga-

t

a n

America

doing

balances

Reserve

"the

impor-

bankers

problem in this controversy between
that the Federal Reserve Banks

funds

Lake

stated

Issue

government bond

of

Salt

most

that be is the fact

support

the

the

of

the

First

City,

sound

Fundamental

The

issues there is little

of

to

that would be used to make

of automatic

effect.

of

basis

should not be done in order to protect

or

of opinion and their attendant
In

have to be aired in order

prices of Treasury obligations, does not make for confi¬

in

seems

There are

blowing that is being done about the level of interest

rates and what should
them

of fact,

matter

a

being heard from certain quarters of the Congress,

even

All the

As

of

National Bank

differences

Board

Presi¬

-

t

Utah

attempt to settle

an

Adams,
n

tion

been competition in these securities because the smaller banks
after them as well as the large ones.

produce

de

t

touchy about gold withdrawals. But then the
British gold reserve in the 'twenties was Very inadequate, with
hardly any safety margin, and under the then prevailing system
very

was

W.
Vice

So far, however, there has been no reconciling of
between
the Treasury, the Federal Reserve

dispute.

these

is resented is liable to weaken confidence

be recalled in this connection that between 1925 and 1931

opinion

Orval

hornet's nest.

a

up

States has been involved

down.

Having said all this, it is
could and

certainly stirred

occasions since the beginning of the
though there appeared to be very little

standable that the authorities in charge of the

mistake

Association,

Disagreement Persists

repeated

likelihood of these

In an address on Jan. 18, fol¬
lowing his election as President of
the Salt Lake City Clearing House

The level of interest rates
has become one of the hottest topics in the money markets in
many a moon.
The speech of the Treasury Secretary created
such widespread disagreement that the President of the United

the resale of American

stitutes

is cut to bone.

expense

famous pronouncement of

now

Federal

every

Although life insurance and savings
bank liquidation has abated, there has been enough selling to
keep the restricted issues on the uncertain seat.
The 1959/*02s
have been the exceptions since these issues have been under
accumulation. It is reported pension funds have been the buyers.

The

casualty is '

war

unless

deposit institutions mainly.

by disagreements on interna¬

caused
tional politics.

;

cold

a

Secretary of the Treasury
Snyder, in which he attempted to freeze long-term rates at 2%%,

some

feeling

■

becoming
imminent

Saltj1

dollar;!

Lake City, says danger of

This buying has been from the out-of-town

and the 1%% notes.

degree of estrangement between
the Democratic nations, in addition to the bad
lead to

,,

Vice-President,;

of Utah First National Bank,

American criticism about European

these

Governments

on

By JOHN X. CHIPPENDALE, JE.

European withdrawal of gold from U. S. and
suspicion it is being used, by resale, to aid gold hoarders, par¬
ticularly in France, Dr. Einzig condemns this action. Points
out, however, permission of U. S. to permit foreign withdrawals
of gold maintains international character of dollar.

Commenting
-

Thursday, February 15, 1951

.

..

Grangaard,

Secretary;

Assistant

W.

C.

Preuss,

Secretary.

William N. Boyd, Sr.

Calif.—Rob¬

N.
Boyd, Sr. passed
May has joined the staff of Lester ert F. Love has become affiliated
Neil & Co., 621 South Spring Street, with Irving Lundborg & Co., 310 away at the age of sixty-two.
rett has become associated with E. Crane, Oliver Sacks, Harry Schnall members of
the Los Angeles Stock Sansome Street, members of the Prior'to his retirement in 1948 he
F. Hutton & Company and is resi¬ and Dean Tinker have joined the
Exchange. He was formerly with New York and San" Francisco
had been with the securities de¬
dent
manager
of
their
newly staff of King Merritt & Co., Inc., Halbert, Hargrove & Co. and
prior Stock Exchanges.
He was forr
partment
of the National City
opened branch at 1708 L Street. Chamber of Commerce Building. thereto with Bankamerica Com¬
merly San Mateo, Calif., Manager
Mr. Barrett was formerly Merced Mr. Crane was previously with
Bank of New York for
twenty
pany and. Merrill Lynch, Pierce, for
Neergaard, Miller & Co. of
manager for Bailey & Davidson.
Harris, Upham & Co.
Fenner & Beane.

MERCED, CALIF.—Lee E. Bar¬




LOS

ANGELES,

Calif.

William

—

New York.

Volume 173

Number 4986

.

.

.

The Commercial and Financial Chronicle

s

(727)
speculative
holdings
held * six
months, but by then the dollar is
likely to be in a rising trend.

19

,

Canadian Securities

There

Canadian dollar

The subject of interest rates has

present
case

change

in

The Outlook for

the

were

neighborhood

of

Economist, Armstrong

quoted

5%

and

Western

oils

reaching new peak
pegged rate of longlevels., Ford A, on stock-split ru-^
The Treasury on the
mors,
Massey
Harris,
Pacific
cial authorities are likewise
study¬ other hand firmly maintains that
ing the question from their own leaving the government bond mar¬ Petroleum, and Federated Petrol¬
eums
were
notably
prominent.
angle. So far the Bank of Canada ket to its own devices would, not
Base-metals issues were also firm
has closely followed the course
only produce chaos in all financial
but the golds made little
headway.
adopted south of the border. The markets, but it would also jeop¬
immediate postwar trend towards ardize future
government financ¬
attention

here

that

there

is

little

question that the Canadian finan¬

effects

term

of

ing

reversed.-

Trntlow to

gency.

which at

Long-term Dominion 3s
time

one

2%% yield level

pressed

are

the

on

back to

now

their original issue price. At this
point future policy will be care¬
fully weighed, and developments
in

other

monetary centres, and
particularly in the United States,
will

be

subject

scrutiny.
1'

The

to

the

experience

field is both enlightening and dis¬

turbing.

Under

the

time

a

of

national

emer¬

to

of

case

Both

in

the

regime

former Chancellor Dalton

an

of

easy

in

by

-

the

result

markets

r

time

has

tempt to

ment

of

Canada

have

been made

intervened

arrest

bond

in

the

market

at¬

an

weakness,

stability

confidence

exists.

in

undue

govern¬

no

J

and

The
ful

inflationary

process

has been controlled

ever

manipulation

pected
ceed
Francis

•

Trnslow

.

.

dent^flhe

how¬

nhoirrn

govern¬

E.

T.

his

governors

of

cnange

..in

lis?

to

the

residential

to *non-

residential, from private honqes to
housing, from large-scale

defense
W.

ex¬

.

from

E.

Hoadley, Jr.

ex-

of all previous

average

tract

builders

to

smaller-scale

operators, from the largest metropolitan

areas to

smaller communi-

years and compare favorties, from luxury-amusement1 type
ably with all but last year's un-~ units to more essential

oi

to

V'

W*Jrv?

w

J?®
the

'

resignation

oraer

to

buildings

requiring

large

ex-

lgrly strong because of the record

tent

carry0vef of unfinished work from

tne

G°varnment.

-

from

....

,

The outlook for building during quantities of metal to other types
the first, half of 1951 is particu- of construction, and to some exhighly skilled craftsmen-to the
home mechanic in repair and
maintenance work,

undertake-1950

,

during World War II not only
efficiently but also with the full

e

building activity thi§

structures,

poara

ment bond markets in both coun¬
Within the range of an ac¬

longer tries.

pected:

CurbTxI precedented volume'

Nw York
i

^

k

*

POStwar

McCormick

,

submitted

' cepted rate pattern there has been
In this country the
easy money sufficient
flexibility to permit the
policy
was
put
into
operation correction
of
,

A.

„

by care¬

the

of

b

upon

than deficiencies in demand.
Several relative shifts can be ex¬

ing this yeqr

possible

From only by means 'of calculated poli¬
"government cies of deliberate inflation.

the

fundamental

basic

state

a

ences

level of: build-:

ica n

after

year

over-all

i

advance and

demoralization.

to

broker"

in

ing than commonly judged.
The

an

left

were

thorough

but

was

much

%

\

months

be built and in the end
uses' to
which materials will be
put prom¬
ise to be more
important influ¬

-promis-

mare

six

its volume until ten
months later.
Shifts in types of structures
to

rS

major

appear
:

Also, indica¬

Pearl Harbor and did not double

nevertheless

necessary. Much is now
heard of the bogy of
inflation, but

increase for

no

restrict-

any

all-

ting public construction
underway,
defense
housing showed little or

most

industry,

abject failure, the high standards of living in
and the "gilt-edge" and
municipal the past decade both here and in

time

ing

:

Consequently tremendous economic

the

had begun.

war

for

up

tive of the time involved
in get¬

clouded

now

.

policy was aggressively
expansion, increased pro¬
and
arrogantly forced upon the duction
economic
progress
resisting City of London, whose must necessarily be arrested. The
cooperation was neither sought fact can not be ignored that the
considered.

out

comprehensiv0 .'controls'*

.

the absence of ready means of

dou-

of de-

actual

Con¬

struction pros¬

and

nor even

year

1951.

pects,

the

eminently

in

favor-

unprecedented

point to another record- fense
preparations and held
breaking year for general business several
months after

credit

money

compare

an

income

of

process

to

except 1950 when
Cites record

Rising defense expenditures plus Private
industrial building
new highs in consumer
bled during the first

country and Canada
dealing with economies

in

achieved.

was

building in 1051

years

expected

this

are

still

ignore.

volume

construc¬

generally conceded and

carryover of last year's
unfinished work and large volume of
projects initiated before
present controls became effective.

As N. Y. Curb Pres.;

Without entering into the finer
details of the arguments on either
side there is one basic fact that is
difficult

ably with previous

Resign

dynamic
closest expansion.
Such development is
not only desirable, but in view of
in this the international situation is also

•

British

in

we

expects over-all level of

a

bonds.

lower rates has been deliberately

Cork Co., Lancaster, Pa.

Building economist says, despite
controls, outlook for
tion
industry is more promising than

respectively. Stocks were
strong ' with the industrials and

policy base their
the inflationary

on

Building

By WALTER E.
HOADLEY, JR.*

6%

official

primarily

the

in

the corporate-

or

arbitrage rate which

By WILLIAM J. McKAY

recently received such widespread

little

was

the

and

large number of
projects authorized or started be-

the

on

manpower

side from

^*usipw s .resignation anafore present controls became efFurther regulations are expected
exaggerations
whether in the direction of infla¬ the
selection+pf a successor were fective. Second half prospects de- to limit less essential industrial
tion or deflation.
The control of consijercd at a, rneetmg, ofthe^ pen(j jp large part upon the extent building, and eventually, if the
DOant on *eb. 7.
j.

,

'

cooperation of the U. S. Treasury the government bond market and
the banks and investing in¬ a
ready means either of augment¬
stitutions. A pattern of rates was
ing or decreasing the volume -of
gradually evolved that was ac¬ credit are only possible when
cepted with complete confidence. there is complete confidence in
and

Indeed so firmly was faith in the
low-interest trend established that

tern

danger

sence

of

arose

this direction.

exaggeration

Following the

in

war¬

time period it became
necessary to
arrest the movement towards ever
lower interest rates.
Official in¬
tervention

aggeration

to

correct

in

this

obvious

direction;

ex¬

was

the

stability of

an accepted pat¬
interest rates. In the ab¬

of

of

a

strictly regulatory gold-

standard there is not practical al¬
other than a system of

ternative

managed money. At the present
stage of development this country
and Canada in particular-are best
served by monetary management

sufficiently strong to raise doubts in the direction of
expansion. De¬
concerning the basic long-term liberate deflation
brought about
2V2% level. As a result there was by a laissez
faire policy in the
heavy liquidation that was ab¬ matter of interest rates will cer¬
sorbed by the central
authorities, tainly neither promote economic
but the 2Vz% rate was maintained.
progress nor make it possible for
At the present time there is an either country to
carry out the
acute controversy
concerning the responsibilities thrust on them by
desirability
of
exigencies
of
the
maintaining ' a the
present

special

mittee,

consisting

com-

Mortimer

01

0|

fUIqher

Chairman

Mann,

Board,

ol

emergency.

During

V

the

week

there

was

a

CANADIAN BONDS
Government

and

Grand Trunk Pacifies appear
attractive.
The inter¬
nals were also steady and there

especially
was

a

continuance

that has

Provincial

ing of
might prove to be

Municipal

as

Corporation

a

of

the

buying

persisted since the free¬
the dollar;' next month

consequence

testing period
of liquidation of
a

the

international situation fails to im-

size

VicerChairman^ ofthe
authorized .to otter

was

anc| piaintenance work" looms .This programs
wm

ne

designed

to

speed

re-

Sparkeci

primarily
by armament, provision must be made
general buying power, but for continuing expansion in indusEdward_l; McCormick.
"will require vigorous* merchan- ' try and
elsewhere, particularly
U
it!?11™
^aS reJom" dizing efforts by material suppliers under conditions short of fullmended by Mr. Truslow and reancj dealers to compete success- scale war. The
country's future
ceived the unanimous approval of/
fuliy against other industries for strength to resist Communist agthe
the

position_ of president to Mr. heavy

j

*

board.

.

The special committee

these spendable funds of the pub~
v

reported- lie.

tlie board that Mr. McCormick

to

Tlie most serious dangers facing

had expressed his willingness to.
fhp rmi<striirtirm indmtrv and himaccept the responsibilities of presber deaiers this year are that: (1)
ident
of
the
exchange as Mr*. Government
controls over critical
Truslows successor and the board
confirmed

Mr.

his

materials-especially metals-will

appointment.

take

Truslow's

>

nn1.

formal

resignation

effect

hp

to

his

successor

Mr.

w

McCormick, who will then

become

president' of
the
New
York Curb Exchange, is presently
of

one

the

Securities
mission.

five
and

He

Arizona,

on

exactly

one

members

Pinspiv

roordinafpd

with

of

ability

the

dustry—than

the

upon

to

upon

Production and

even

of

use

our

expand—
the

infull

existing

P'anJs ai>d structures. Govern-

("ent has the primary responsibil^ to define the positive—as well

the

work later in the

year

trols .have .cut back
projects

after

new

before

but

volume

negative-role which the

.

of

whatever goals are set.

con-

private

defense

con-

Walsion, Hoffman

Com-

before

more

continue

with the aid of the building

was

month

to

budding industry is to play in the
by control au-* current emergency and over the
thorities; (2) a temporary but pos- years ahead. Once the objectives
sibly disrupting "gap" may occur become known, all branches of the
in some- types of ^construction
^ W* Abe. able to take steps
to meet
to

complete
building allowed
ers

struction gets under way in sub¬
born in Phoenix, stantjal
volume; and (3) manFeb. 14, 1911, almost power shortages will
grow
as
Exchange

gression depends

will-the detailed requirements of build-

April 1, in

on

order to permit a period of trans-,
fer of the work of the
presidency

little

more interest shown in the
external section of the bond mar¬
ket and prices held firm. At their
current yields Canadian Nationals

and

the

„

pegged market at the 2xk % level.
The proponents of a change in the

controls

anp

timing of programs for de- prove, most types of construction
fense housing, industrial building,
other than projects specifically
Board, Edward c. werie, fqrmer
an(j
prjority public works. A approved by Government may be
Chairman of the Board and
John; potentially large
year
in repair restricted. In addition to all-out
j.
Lands-berg,

workers

are

attracted

to., other

Adds Gidlin in N. Y.

.

Walston, Hoffman & Goodwin,
_

_

founding of the New York
Market

,

Association,

Mr. McCormick

higher paying jobs

drift away

or

Exchange,

from building work because they
consider employment
prospects

educated at

unfavorable.

predecessor

of the New York Curb

-

Curb

was

the

members of the New York

Stock

Exchange and other leading exchanges throughout the- country,
announce
that Murray Gidlin is

University of Arizona, North-'
To date Government controls, now associated with the firm in
University, the University directly and indirectly, have not its office at 35 Wall Street, New
of California, and Duke
Univer-"* cut deeply into building activity, York City. Mr. Gidlin was forsity and holds the Degrees of B.S., but by mid-year their1
effects merly with Bache & Co.
M.S., and Ph.D. He; is a Certi¬ should become more apparent.
western

CANADA
SECURITIES

CANADIAN STOCKS

SERVICE
For information
on

oil

A. E. Ames & Co.

quotations
industrial, mining or
security, consult us.
can

help

Two Wall Street

NY

you.

JNAilner, R

oss

'Members:
The Toronto Stock

1-1045

&Co.

Exchange

of Canada
Fifty Congress Street




of

the

:

..

j

-,

1934, Mr.'McCormick joined

the staff of the Securities and Ex-

change Commission
analyst
ranks

and
of

rose

assistant

"a

as

security
through
the

chief

aecoun-

This

delayed

impact

of

Govern¬

ment restrictions is to be expected
from the experience
during the

past war.

In fact, the pattern of

building in 1942 is worth reviewfor some Possible insight into
wbat may lie ahead this year-

330

BrantCord

Sudbury

a

1949.

He is the author of the book

Act

the

and

'

the

SEC."

Securities

Windsor

Brampton

nearly
was

a

year after World War II

declared.

private

•

A

50%

residential

-

not

(Special to The Financial

Chronicle)

occur

until

cutback in

building

'

With Paine Wehher fn

Bay St. Toronto, Canada

Hamilton

Total new construction increased
Commissioner in October,' and
was
well maintained
for

come

"Understanding

v

The Investment Dealers' Association

Boston 9, Mass.

Accountant

tant, and Assistant director to be-

New York 5, N.Y.
4-2400

In

or

incorporated

WORTH

Public

State of Illinois.

any

We

fied

after Pearl Harbor and

did

months

seven

two years

after the defense program started,

;

Martin E. Lee Joins
Stewart J. Lee & Go.
Firm's 10th
In

celebration
of its tenth year in the securities
business, Stewart J. Lee & Co., 60
Wall Street, New York City, also
made known the association with

the firm of Martin E. Lee.
Mr. Lee

Francis

is

Jackson &

with

—

Paine,

Ward

•Summary remarks of

R.

Webber,

Curtis, 111 Pearl Street.

Annual

Convention

Lumbermen's
N.

J., Feb. 8,

of

Mr.

Association,
1951.

Hoadley at

Middle

Atlantic

Atlantic

City,

was

formerly associated

with the New York "Post" in the
will
advertising department. He w,n
assume

HARTFORD, Conn;

Anniversary

announcing the

the position of

manager

and

partment.

advertising

assistant

Nardone in the

new

to

D.

business

N.
de¬

-

20

The Commercial and Financial Chronicle

(728)

Incorporated Now
Daystrom, Incorporated
The stockholders of ATF Incor¬

NOW

THEN AND

E. JOHNSON

H.

By

ATF

\

Bank and Insurance Stocks

porated, parent company of Amer¬
ican Type Founders and four other
subsidiaries engaged in diversified

This Week—Insurance Stocks

Guess Who?

Despite increasing expenses and extensive losses suffered
through windstorm damage last year, the Great American Group
of insurance companies was successful in reporting a year of prof¬
itable

underwriting and
mium writings.

increase to

an

manufacturing activities, voted on
Feb. 5 to change the name of the

Mr.

'

radio.

;
"Five years . ago
ment embarked on

tion program

the Great American Group's
-'

Net

♦

V

adopted

•

at

premiums written______

Losses

and

______

expenses

the

for

that..time

with

Trade

profit

Increase
'

,

.

,.

.

ti

in

While

(A)

has

(B)

premium

it

-

American

or

and

from

loss

loss

underwriting

—39,822

Statutory underwriting
Minority interest
Net

Assails

statutory

$5,050,155

earnings

$900,680

$936,001

income

122,758

$5,010,838

5,528,005

underwriting

Investment—Net investment

$5,133,596

35,321

4,357,407

The

Federal

taxes—

taxes

$6,464,006
1,346,595

Treasury to tax state and

securities * was
by
Austin

$5,117,411

vigorously
J. Tobin,

protested

$9,368,245
2,398,788

incomei________

income

by the Secretary

proposal

the

of

%

Net income before

$6,969,457

/

ness

c

ert L.

of

are

shown in

share earnings for the past two

the

following comparison of

years:

per
J. Tobin

Austin

Adjusted underwriting

$2.10

before taxes-.,

income

$4.86

taxes.

The

equity

t

of

the

stockholder

in

in

$4.66,

unearned

premium

,

f

panies' gain. The

I." shares of $5

par

per
stock

share figures
now

Govt. Bond Portfolios
of:

Head

there

proposals
said:

no

new

reason

"We

the

for

arisen

since

the

Con¬

declined to accept the tax
on

the

issues
is

revenues

eve

ent

of

of and dur¬

securities

prospect

no

26, Bishopsgate,
London, E. C.

Subscribed Capital

,

Paid-up
Reserve
The Bank

Capital
Fund

Teletype—NY 1-1248-49
-

of

then

Federal

objections

recognized

in

its

siderations

of

similar

Congress

previous

con¬

proposals,

that

denied

on

consequences

the

£2,000,000

ernment

£2,500,000

costs

description of
and exchange business

in

by

advantages

that

"It

bulk

of state

ability* of

cases

local

During the

1942-1945

sales

emphasized

and

remains

true

and

N.

spe¬

N.

the

that

turers at

Poughkeepsie, N. Y., and
Balboa, Inc., furniture
manufacturers at Fullerton, Calif.

is not owned by individuals at all,
even the wealthiest indi¬

viduals
small

in

a

as

invest only

group

Daystrom

a

percentage of their wealth

To Get NYSE

securities.

these

holders

local

of

exemption

is

bonds

derived

by

New

will
the
Exchange member¬
Lewis S. Kerr, Jr. to
Exchange

21st

consider

ship

of

Francis X. Hoart.

Secretary

Congressman

Stock

transfer of the

own¬

StateDefense

York

Membership

of Governors of the

February

on

local

the home

and

The Board

other local taxpayers."

and

ers

C.; Frederick Hart & Co., Inc.,
equipment manufac¬

electronics

local securities

and that

form
was

Doughton

O. H. Hecht

American

of
at

ties.

government

stake in the Federal pro¬

"We

respectfully

concluded, "that

business

your

proposal

which

rests

have

Federal

Supreme
States

Government.

Court

has

never

the

of

•

institutions, especially
financing."

state

in

government

the

from

Roland

to

L.

a

DeHaan,

formerly

was

in

an

Raleigh
engage

Mr. Fazio

officer of Pioneer

R. M. Johnson

and

SEATTLE,

partfieft1'in

offices

Enterprises, Inc.

Roland L. DeHaanr
Mabon & Co.,

7

W. Va.—Joseph X.

securities business.

a

has

Johnson

financial
local gov¬

F

1317

—'

County Bank Building to

local

,

beyond

with

Co.

&

Tttie

United

departed

at

Fazio has formed Joseph X. Fazio

no

dominance and destruction by

the

offices

Joseph Fazio & Co.
BECKLEY,

right to inde¬
pendent existence and are subject
to

H.
securities

an

upon

assertion that state and local gov¬
ernment

from

C. —O.
a

Street, N. W.

urge," he
Committee

should give no encouragement to
a

Opens

WASHINGTON, D.
Hecht is engaging in

posal to tax state and local securi¬

increasing ^interest

many

1937-1941.

period

plants at Olean and Friendship,
Y.; Daystrom Laminates, Inc.,
plywood producers at Daystrom,

charge

receive

bondholders

cial

the

that the tax would have disastrous
soundness of state and

of

steel furniture manufacturers with

Tobin

Mr.

forbids the destructive impact of
Federal taxation of state and local

as

that

Daystrom Corp., chromed tubular

to

the proposal.

other

the

On

true,

£4,000,000

Trusteeships and Executorships

economic

fiscal,

constitutional

the position that the Constitution

emergency.

conducts every

bunking

their

discuss

and

from it during the pres¬

hand it remains

Eranches in Iiidia, Burma, CCylori, Kenya
Colony, Kericho,' Kenya, and Aden ' •
and Zanzibar

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




Congres¬

of similar

combined

that the fundamental issue of the

Authority,

the

and

has

future

Office:

Telephone: BArelay 7-3500

Specialists in Bank Stocks

to

have

ufactures printing equipment in
plants at Elizabeth, N. J., Brook¬
lyn and Mount Vernon, N. -Y.;

repre¬

officers

advised

ing World War II.
Certainly, if
the tax proposal is restricted, as
in good conscience it must be, to

Kenya Colony and Uganda
.

to

by

local

and

The

of

:

120 BROADWAY, NEW YORK 5, N. Y.

Bell

York

now

Type."

wartime

who

Tobin,

1942

proposals

Bankers to the Government in

Laird, Bissell & Meeds
Members New York Stock
Exchange
Members New York Curb
Exchange

their

and

and

of

gress

the 2,000,000

of INDIA. LIMITED

.

*

upon

NATIONAL BANK

Sources of Gross Income

7

based

Mr.

New

defeat

1940

which

outstanding.

Breakdown of:

Breakdown

are

the

proposed tax on local institutions

reserve has been estimated qn the basis of the accepted formula,
.that is, 35% of the casualty increase and 40% of the fire com-

s

appearances

state

Federal governments

Director

attention

called

know

the

schedule

The

of

Port

1.20

$4.19

for

states

letter

Executive

sional

Net operating earnings

the

of

his

In

$5.86

0.67.

the

averaged

sentative

agencies.

2.18

is

Net income

The

v e s.

preventing

of

purpose

$3.68

2.76

Repr esenta-

ized

1.17

Net investment income-—--

and

in

almost equal to

time years

Besides, the
pay for
group of state their
exemption
by
accepting
and local of¬ lower interest rates and the
prin¬
ficials organ¬ cipal
benefit of the traditional

$2.51

1.63

reserve

of

House

.Conference is
a
nonpartisan

taxation

<

Means

of

t i

1949

$0.47

Equity in unearned premium

Federal

Ways

the
•

,.,

1950

"

a

Committee

These results

4-

in

Dough-

the

.

and

of last year.

.

;

State

ton, Chairman

help the final figure with the result that net
operating earnings are only moderately below the favorable showing of the previous year.yW
7

n

expanded
markets

$32,880,000 annually.
Daystrom,
Inc.,
is
presently
ter is to receive serious considera¬ made
up
of the following five
tion by the Committee at this wholly-owned subsidiaries: Amer¬
time he wanted'an opportunity to ican Type Founders, which man¬

letter to Rob¬

lower Federal taxes
'

on

Defense,

This combined with the improvement in investment
results,
helps to offset the lower underwriting profits. In addition the

<

Confer¬

ence

Translating the operations of the last year into per share
figures, the results do not appear quite so unfavorable as the
underwriting showing seems to indicate. In other words by adjusting for the stockholder equity in the increase in the unearned
premium reserve, some consideration is given to the gain in busi-

,,

of

Secretary
the

Net operating

benefit

1946-1950
inclusive
(fiscal year
ending March 31) averaged $33,010,000 annually. This compares
with $7,460,000 for the five peace¬

on

municipalities.

t

local

Federal

Secretary of Conference

State Defense,
and Executive Director of Port of New York Authority, Cites
previous recognition by Congress that such a levy would have
disastrous consequences on financial structure of states and

83,441

,

could

Peacetime
sales
of
Daystrom,
Inc., during the five-year period

Treasury Proposal to Tax Municipals

Austin J. Tobin,

profit

items

its

subsidiaries

/

.

$940,502
Gain

were

company

Type Founders.
Type Founders

continually

broadened

$9,233,904 $11,046,429
8,293,402
5,996,274

reserve

com¬

graphic arts field, the four other

$88,250,600 $81,706,993
79,016,696
70,660,564

—

-

unearned

consumer

parent

so

American

■

American

-

businesses

the

i

from the good will long associated

ly49

i^o

\

manage¬
diversifica¬

ing the earnings base of the
i
The
initials' ATF

operations for the past two years.

Underwriting—

the
a

pany.

summarized in the following consolidation of

are

introduction

new

in

,

These results

believes

field for the purpose of broaden¬

a
large extent the less favorable underwriting showing, net
income for the period;declined from approximately.$7 million:\n)
1949 to $5.1 million. ;,
''
•
* '
7

t

.

and

'acquired

were

7* to

;•

weight in the

carry

7 for Great American has been showing steady increases during the
5
last several years. The total for 1950 after expenses and minority;
interest was $5,528,005, an increase of $1,170,598 or; approximately;
27% over the $4,357,407 of a year earlier.
'••.,{
,
.7-7.7'' »•

I•

management

and promotion of new products to
the general public.

1950 annual report

Although Federal income taxes were lower for 1950, reflecting

The

that the established acceptance of
the brand name, Daystrom, - will

to stockholders was the investment results. Net investment income

777

the

subsid¬

our

.

the profitability of statu¬

One of the most favorable features of the

\l

company,"

"because

of

one

and
plastic furniture — are
widely
known
to
millions - of
people through national advertis¬
ing in newspapers, magazines and

tory underwriting during the year. In spite of the fact that the
indemnity company showed a loss of $395,789, however, the statutory gain for the group amounted to $936,001. This compared with
the $5,010,838
reported for 1949 when the casualty company
showed an underwriting profit of $587,900.
J

*

stated,

of

steel

higher unearned premium reserves in line with the increase in
premium volume reduced the statutory underwriting profit.

-

Incorpo¬

iaries, Daystrom Corp. — world's
largest manufacturer of chromed

creases

These factors considerably reduced

Jones

products

Underwriting operations were adversely affected by the inin losses and expenses. Also, the necessity of providing

.

of the parent

new name

$5,175,760 and the casualty company $1,367,847.

,

Daystrom,

rated,
it
was
announced .i by
Thomas Roy Jones, President. 1 ^
"Daystrom was chosen as the

Can't, Turn to Page 27

For the year 1950 Great American, one of the major fire and
casualty groups in the country, reported net premium writings of
$88,250,600, an increase of $6,543,607 over the $81,706,993 of 1949
and a new record. Of the increase the fire companies contributed

'

to

company

If You

record in net pre¬

a new

Thursday, February 15, 1951

...

1411

Fourth

conduct

{

Johnson

New York Cify, jind

member of the New York: Stock

rill

a

\

Opens

Wash. —Rollin
opened
Avenue

M.

it

offices

Building to

securities business. Mr.

was

Lynch,

formerly with Mer¬
Pierce,

Fenner

i

&

'

>

'■

absorb."

'♦

also undertaken

Mr. Tobin said that if the mat¬

Exchange, died of
at the age of

a

heaft attack

sixty-five.

Beane

and with the

ington Corp.

Wash¬

First
_

„

y

Volume 173.

Number 4986

.

.

The Commercial and Financial Chronicle

.

i:»>■"

.«t, *

1

r •

21

(729)

tax

in the Defense of

come from direct
taxation with the balance derived,

By HON; JOHN F. KENNEDY*
U.S.

"i/

Chesapeake

&

stock has been
count

Ohio

giving

of itself

common

good

a

in recent

ac¬

markets,

pushing ahead to the best levels
reached

since

1948.

Last

week's

top of 38*,4 marks a sharp percent¬
age gain from the 1950-1951 low
of

25, but nevertheless, is still

a

far cry from the 1946 bull market
peak of 66%.
Students of the
market
and

revival of investment

see a

institutional

regard for this
investment vehicle

favorite

once

in the recent increased
the
upside.
It *is

activity on
probable, too,

that

the renewed market interest
is'based at least in part on
of

hopes
increase in the dividend rate

an

when directors hold their Febru¬
ary

meeting,
Tuesday.
Up

until

past

couple

stocks

commonly

of

Common
com¬

encount¬

ered'in even the most conserva¬
tive investment portfolios. It had
come

the

through

the

depression

of

1930s with

even

flying colors, and
those trying years

during

the dividend record had remained
intact.
In fact, with the
excep¬
tions of 1915 and 1921 the com¬

cided

past

century.
Then a couple of
ago the investment popu¬
larity of coal carriers in general

began to wane—there

was

de¬

in

better

a

the

of

benefits

from

cap¬

improvements in earlier years.
However, there are also other,
and newer, forces at work.
It is

probable that

other major

no

car¬

rier has made relatively so much
progress

as

C.

Another

so.

yards

service

can

year

very

then

and

on

power

in reducing

important
dieselization, first

factor has been
of

O.

&

losses in the past

passenger
or

divisions

of

freight

where

such

show the greatest

op¬

savings.

Finally, world
materially bol¬
stered the traffic picture.
Mer¬
chandise
lines,
particularly
in
conditions

have

I have just returned from

weeks'

out

most
ant

mestic

,

.

Reflecting the .improved oper¬
performance, and despite
the
poor opening
quarter, 1950
earnings amounted to $4.25 a com¬
mon
share, compared with only
ating

share earned

a

in the year

Traffic: and

pre-tax

earnings

will unquestionably be
materially higher this year than
in

1950—for the first four

weeks

ing

would

be

of

competitive fuels
coal

markets.

In

addition, Chesapeake & Ohio
into its

own

spent

over

fairly

a

ex¬

efficiency

and

had

been

Repurchase

on.

better¬

passenger
em¬

and

re¬

furbishing of the Greenbrier
tel had cost

ally,

Ho¬

lot of money.

a

Fin¬
substantial investment had

a

been

made

in

the

York Central.

stock

When

on

of

New

top of all

of

these cash outlays the road's
earnings were severly affected by
recurring labor disturbances in

the_ coal fields a reappraisal of
financial and dividend polices be¬
came

mandatory. •'

first step

The

1949 when it

the

Jan.

2

Coal

taken late* in*

announced

would

result

dividend

1950.

-v

was

was

dividend dates
with

be

that

strikes

the

so

would

March 20

on

was

then

usual

paid in

continued
dividend

been
the

paid

to

year

that

around

rates

they

inevitable although
not apply to all of 19oi.

appears
may

Also, it is believed that the
has not

pany

orable

excess

com¬

particularly fav¬
profits tax base. It
a

had

of

tary

John F. Kennedy

that

of

fate

problem
millions
of

of

lives.

Indeed

the very

it.

the

of

and

North

three

in

coun¬

Italy
European

chief

the

are

members

Pact,

Atlantic

countries—

West

Germany, Yugoslavia and
Spain-^Jao are not members of
that

Alliance but whose prob¬
lems, whose loyalties and whose
capacities
tion

be

tied into the

are

the

of

much

too

to

people to accept such
any degree of
There

is

because
and

definite

she

met

field

the
and

a

of

pros¬

resent¬

a

Orient

the

defense

of

ques¬

Western

Europe.

of

Communist

people

This issue of whether and

how

less

To

two

and

resources

: War

acterizes all

if

char¬
Europe. But the prob¬

of

given these

that
willing to

Army

be

to develop.

and this

newly-formed

of ours were

com¬

in

France knows that she

of the manpower necessary

the

would

not years,

we

for the

particularly popular

They had no love
communism, but in their eyes

our

sible

Western

that

cause

Germany.

for

will have to bear the lion's share
creation

Even

I could not convince myself

course,

lem of France has additional

herself.

conditions,

force, and that would take months,

Weariness

weariness, of

troops to
while, she re¬

build, must be her own army, of¬
ficered by her own men, not bri¬
gades incorporated into some other

manpower

that the will to resist demands.
Y*. General War

of American

Germany

Germany

inary steps toward the mobiliza¬
of

Germany must have
fight for. A con¬

to
of

screen

armed

Government to take those prelim¬
tion

still

was

Politically,

as

shield

the
the

me,

than

eager

tial

the

with

war

1940

minds.

time,

Kurt Schumacher, the head
Party and, the
Strongest of Germany's political
figures, said, they were assured
a
West Germany free of Allied
control and, secondly, a substan¬

en¬

enhanced

all-out

Russia.

were

plications.

Will to Resist Is Indispensable

and

in

and1 their

same

the* Socialist

of

dangered her precarious position
in

that

less,

valuable

have both

we

their

the

was little desire on the
part of the
Germans to risk that tragedy un¬

policy,

Europe, but more because in
bringing us into armed conflict

with Red China

them

At

what happens to a
battleground in modern war, such
as
the devastation that today is
Korea, was widespread and there

which might be devoted

resources

in

was

enthu¬

it

knew

everyohe insisted that a necessary
condition of German rearmament

expect

thinks

diversion

possibility

I spent my time in three
tries—England, France and

probable, then, that earn¬
this year will not be ma¬

would

more queues,

they

weaknesses.

to'

solution

survival of the nation may hinge
upon

had
the

sciousness

and

partly

sion. Upon the

the

in

face her.

waste

hangs

felt

They

armies

something

ment against" our Korean

So¬

American

power.

Russian

privation,

further

war,

siasm.

of

expan¬

correct

appreciation of Russian mili¬

vivid

pect "with

growing

threat

with

the French rout

her

Europe in

viet

The

talked

I

realistic and less fear¬

more

a

rife.

was

generals

some

the

over

skepticism of the

effort

they are distrustful of France's
military strength. The picture of

It

ship to West¬
face-

Germany

German

so.

measures

for the

had

been

respon¬

disgrace of the Ger¬

European
ings
man army.
We had been preach¬
Western Europe can be defended, force and that her soil
together
terially
higher
than
in
1950.
ing the evils of militarism, de¬
with or without American
aid, de¬ with Germany will probably again
Nevertheless, even this level of
stroyed their war industries and
net would warrant resumption of pends, as everyone agrees and as be the battleground of any such
were still
doing so, when at the
General Eisenhower only a Yew conflict.
She looks longingly to
the
$3.00 dividend rate on the
same time we seem to be urging
days ago told us, on the existence German manpower for assistance
basis of the company's
avowed
their rearmament;1 As a popular
in these countries of a will to re¬
and relief from her burden, but
policy of distributing to stock¬
joke in Germany these days goes,
sist—a determination to build up at the same time she is
unwilling
holders
approximately 75%
of
two Americans leave on a plane
within them
singly and collec¬ to pay the price that Germany
available earnings.
from New York, one has a mission
tively forces that, together with demands for rearming.
Jules
to disarmi Germany,
the other's
such aid as we may supply them,1
Moch, France's Minister of War,
mission is to urge Germany to
have a reasonable chance of deal¬
assured me that time would prove
ing with the threatened aggres¬ France was right on the issue of rearm; Germany cannot do both.
; The recuperation that Germany
sion from the East.
In trying to not
rearming Germany if she in¬
has shown, however; is extraor¬
analyze the quality of their deter¬ sisted upon a national
army, and
dinary.- Steel, pig iron, coal pro¬
CHICAGO, 111. — T. - Clifford mination, I talked with men of Bidault, the former Prime Minis¬
duction have
climbed by leaps
level—with
French
and
Rodman and W. Scott Linn, will every
ter, echoed this thought. In addi¬ and bounds.
Her national income
form Rodman & Linn as of March German generals, with prime min¬
tion, he expressed the general Eu¬
has almost reached that of Eng¬
1st with offices at 209 South La isters and cabinet members, with
ropean fear..that rearmament of
land.
Her
important industrial
Salle Street. Both are partners in our ambassadors, our High Com¬
Germany might incite Russian ag¬
missioner in Germany, with po.production and her strategic po¬
Shields & Company.
gression.
General
Billotte,
De
sition in the middle, of Europe
litical
leaders,: with Tito, and Gaulle's
Other
military aide, was in a
partners
in
the
firm,
makes her incorporation into a
with the man in the street. The
which will hold membership' in
more aggressive mood.
He feared
Western European defense system
problem of European morale is,
the 5 million communists in
the New York Stock Exchange,
imperative.
however, not merely what men
will be T. Hamil Reidy, Conrad
France, their opposition and their
say. It is also what men do. It is
G. Kaufman, Benjamin E. Bampneutralism, their power of sabo¬
Italians Feel Precarious
the capacity of their industry to
ton of New York City, the firm's
tage. He and De Gaulle too, he
devote
significant
portions
to
Italy, though a member of the
Exchange
member,
Edward
L.
said, would take stern measures
war
purposes
and still produce
North Atlantic Alliance, finds her
to destroy the party were they to
Cooley, Henry B. Lundberg, Wil¬
enough for basic and essential
precarious.
She
has
liam
V.
Carroll
and
Alex.
W.
come
into power, as he thought position
a

Rodman & Linn fa
Be Formed in

Chicago

,

.

new

skipped last

time sched¬
Since

year.

regular rate of $0.50 quar¬
has been instituted. There

a

terly

considerable

opinion

in

finan¬

cial

circles that this may be inC;Oased to $0.62% at this time and
that in the not too distant future
a

earn¬

In

rearmament

doing

Skepticism

r

ule

is

initial

have

that

altered,

the
not

was

hamper operations early last
and

Net

German

in

England's
people
had
endured
during the war. Instead, it deep¬
ened it. Only in the last year, has
England with her efforts and our

queues

seems

enlarged

program

barked

of
the
had
been

sums

additions

An

service

likely.

Central

termined by the Federal tax situ¬
ation.
A further increase in tax

the

on

appears

York

ings, however, will largely be de¬

large

ments.

New

ran

tended period had been
unusually
liberal in relation to
earnings. To

property

holding

the

particular difficulties.

Dividends

maintain

on

of

relation¬

the

succeed

another

the-

question

come

inroads

established

communists

overshadowing dollar prob¬
lem and to hope again to
regain
some relief from her self-imposed
austerity.
Now the shadow of

months

the
on

physical weariness,

government

aid begun to see some solution to

next

the

few-

loadings were up more than
—who
31%.
Also, greater dividend in¬

grow¬

and

France's

her

dur¬

ing apprehension yvith respect to

car

the

face

ernment

the

of

that

that

this -country
its
Gov¬

appreciably to the expanding do¬
use..
" 7 V.

volume

five

and

ern

been

my
realization
import¬

task

would

export demand for coal has added

have

a

of

is that it is unable to get
through
to working people whereas the

trip through Europe. My thought of war. Victory did not
making this trip grew bring an end to the privation that

of

our

record

criticism

purpose in

handling a
business, and

Michigan,

previous.

ent

the

taken

ital

$1.36

years

have

In part this is belated

year.

reflection

since before the start of the
pres¬

year

&
for

turn

pany has a record.of common div¬
idend
payments
in <
every

sacrifices, details findings in each
Reports England has deep ; spiritual and physical
weariness, with people unwilling to take needed mobilization
steps; France is in deep division, confusion, and doubt; Ger¬
mans are
skeptical of the rearmament effort and of our newlyformed cause; Italy feels her position
precarious; Tito will
fight if attacked; Spain "poor but willing." Concludes Europe
is not yet making sacrifices commensurate with her
danger.

question but that
Ohio's operations

no

prospects

erating

of the few railroad

one

mon

next

.

the

Chesapeake & Ohio

years
was

persumably

is

Chesapeake
and

Wages are Jow
prices high and no adequate
price control exists. A prevalent

country.

*

There

effort must entail.

and

their will to resist and make

been in force during the 1940-1949

period.

from: hidden taxes, seems to slant/
away from bringing home to-the
public the burdens that a defense

Congressman from Massachusetts

Returning from European trip, Congressman Kennedy, main¬
taining possibility of defending Western Europe depends on

Chesapeake & Ohio Railway

structure, where<only 15% of ;

thq tax receipts

$3.00

annual

adopted.
extras

This

in

rate'

was

many

the

may

rate

years)

needs.

Munro.

towards

(plus

that

had

H. L. Brocksmith

It

LOUIS, Mo. — Scherck,
Richter Company, Landreth Build¬

RAILROAD

ing,

SECURITIES
Selected* Situations

at

all

Times

announces the association of
Herman L. Brocksmith with their

JSJt&imni
I

*111..

ty

$).

New York 4, N. Y.

Telephone BOwllng Green 9-6400
Members Nat'l Assn. Securities
Dealers, Inc.




victory
well

would

come

tically all of which has been de-

the

to

trading

past eight

years

associated with

Company.

activities.

For

he has been

Stifel, Nicolaus &
»

be

them

as

destined

built,

within

within

defend
and
our

the things with¬

are

armies

cannot

find

must

who

we

ourselves

others

ourselves

those

and

for

if

we

and

our

might

be¬

would

they

in

months.

six

and

its

war

effort

as

As

weak.

against the 20 divisions by the be¬
ginning of 1953 that the Minister
of War spoke about, Billotte would
have

40

1952

and

mans,

divisions
a

too,

in

the

goal of 75.

field

in

The Ger¬

he thought should be

brought in even on terms of in¬
dependence from Western control.
Division and Confusion in France

allies.

England

gives

vision and

achieved

He

criticized the present government

France

invest¬

ment business for 35 years, prac¬

taxes.

willingness to make
face
deprivation,

These

of the deans of the

trading frater¬

towards

to

which

allies

votqd
25 Broad Street

dom.

as

toward

conscription,

to starve in defense of free¬

firm. Mr. Brocksmith is truly one

nity, having been in the

controls,

their

even

out

ST.

J H CO

is

its

and

sacrifices,

With Scherck, Richter

Specialists in

It is their attitude

manpower

be

me a sense of di¬
confusion, of hesitation

Her own economy
England is, perhaps, the easi¬ and doubt.
est country to analyze.
There is gives little sense of being attuned
a will to resist in England but at
toward a war effort. The control
the same time a deep spiritual of materials and the diversion of
of

over

production into military channels
really begun nor is it even

Congressman Kennedy's ad¬
has not
Broadcasting Net¬

the Mutual

work, Feb. 6, 1951.

being

adequately

planned.

economic recovery

the

for the 60%

of her food that she

must

import. Her slim recovery,
however, is precious to her people
and there is
it

a fear of endangering
by assuming the heavy burdens

of rearmament.

The Peace

still limits

Italy to

of

men

175,000

as

an

Treaty

armed force

well

as

in the

production of war materials and,
as
such, operates as a deterrent;
upon her desire to rearm herself..

Nevertheless, she has far to go
today, to fill her allowable, army
Quota.
The nine divisions that

present goal
serve

♦Text
dress

some

difficult: burden., on
her of exporting sufficient to pay
despite

f

are

her

not expected to

outside the country, and the

probable

The ;

are

area

of invasion north of

Continued-on page 31

22

The Commercial and Financial Chronicle

(730)

Federal-Treasury dispute. The Na¬

Treasury-Federal Reserve Dispute
By AUBREY G.

LANSTON*

President, Aubrey G. Lanston & Co., Inc.

-

'

I would like to talk to you

this

morning about the differing
victions

the Treasury

of

Federal

con¬

and the

because

these

involve

Reserve,

the

We

inclined to place a great

are

deal of

weight

the importance

tions of policy
that
are
of

of the state of mind of the inves¬

great

import¬

tor

ance

to

this

our

and,

economy

therefore,
to
as
bank¬

impasse
exists,
is

the

on

that

r

and

being
h

s

mar-

1

a

it

1

e

d

both

of

Contract Credit

the

-

The

open-market operation is
principal
instrument
with
which the Federal may affect the

the

availability, and cost of
money. We know quite well how
readily the Federal can expand
amount,

the

that

availability of credit by the pur¬

oversimplfy
It would be

chase of securities in the market.

unfortunate,

as we see it, if too
people accepted the thought

many

that, if the Federal Reserve
freed

of

were

its

compulsion to buy
Treasury securities at fixed prices,
the Federal

ercise

could necessarily ex¬
deflationary influence.
we accept the general¬

a

Ndr should

ity that

preys

upon

love

our

of

tradition, namely, that the Federal
Reserve

created

was

as

a

supreme
)urt of finance and that it would

be

sacrilege

a

if

it

inter¬

were

fered with in any way.

Let
where

tell

me

v

We

it

outset

these matters.

on

is

the

at

you

stand

we

believe

desirable

most

that the Federal become

than it has been in the past decade
to follow a restrictive credit pol¬

believe

We

Federal

the

of

policy

Federal

is

danger¬
ous. We do not go along, however,
with the sophomoric contention
th&t
be

the

Federal

omnipotent

befree to

Reserve

that

or

assume

it

"the Treas¬

as

be damned." There

ury

should

attitude that

an

might be described

should

is

much

appeal in the thought advanced
by- Mr. Russell Leffingwell that
the Treasury and the Federal Re¬
serve be

equal partners. On such
plane each can act to restrain

the

other

the

to

or

goad

the

other

the market

of

The question Of domination

partnership

is

important

or

largely

matter of who holds the final

as a

ury

pect

real problem involves
technical phases of debt and
credit management and the need

many

for

continuing understanding of
Perhaps the
outstanding problem in the tech¬
a

investor psychology.

nical field is whether 2 Vz % Treas¬

bonds need be supported for¬

ury

at

ever

par

better.

or

We

have

of the Treasury

ties

equally firm in

our

cannot

depart from
rich a practice overnight, partic¬
ularly in an atmosphere of con¬
tention
rerve

between

and

believe
in

money
e

so

tions

far

Federal

Treasury.

if

and

the

debt

apart in

that

reached
one

the

that

the

two

We also
partners

management

their

convic¬

agreement

can

be

only by literally hitting

of the two of them

♦An

Re-

address

over

the

independence
37

Mr.

Lanston

Cltb

before

Annual Meeting of Group Two of
Pennsylvania Bankers Association, Philace!phia, Pa., Feb. 12, 1951.




conceived

it

for

Such independence

ago.

years

would permit of an attempt to re¬

the

duce

inflation

problem

by
denying credit to the market, with
the obvious result that a sharp
upward trend in
interest rates
would

follow.

Federal

occasion,
is

In

meanwhile

the

Reserve

creates, on
situation where there

a

market for Treasury securi¬

no

ties.
This

phase

brings
of

to

us

the

second

operation,
namely, the techniques employed
by the Federal that would produce
a
trend
toward
higher interest
rates.

open-market

One

were

directly

tate,

sharp

and

use

were

in

a

interest

determined

this mechanism to the

nec¬

extent; it could stop the

present inflation spiral. But
had

this

if

indirectly,:

trend

if - it

that

free to precipi¬

or

upward

rates

certain

be

can

the Federal

been

once

accomplished,

or

during the process, another series
chain

of

started,
inflation
our

reactions

such

that

potential

by comparison.
The
Bank

that,
this

but

would

the

be

resultant

would

cause

present problem to be dwarfed
.

February
letter

Professor

credit

Federal

which

have taken
tributed

a

-

the

to

much

as

by

and

man

retary

ex¬

Sec¬

of

the

Treasury Sny¬
der, as dimin¬

Roswell Magill

should

weight

tax

program,

pansion of bank credit.
How

the

President Tru¬

long lead, has con¬

importantly

ersity,

outlined

officials

Reserve

v

proposed

in

discussion

a

i

n

pictured

fixed interest rate and

a

control,

upon

Columbia

clash

the

over

stresses

at

U

that the drawn-out

discussion

public

of

Taxation

•

be

businesses and individuals? For

an

idea

might turn to

we

an

esti¬

mate of the so-called inflationary

that

gap

was recently made by a
Federal Reserve .economist.

noted
He

said

the

that

during the
next year could be as much as
$20 billion and will stem from a
contraction of $10 billion in the

goods

and

for civilian pur¬

available

chase

an

gap

increase

of

a

like

tween Federal income and Federal

expenditures,
billion

in

which

he

a

cut Of at least $10

non-defense

could

says

"without

spending,

affecting

be

true

done

of

of

a

ac¬

func¬
free

a

The program of loans
cut; subsidies and aids to
various economic groups and to

economy?
be

can

state

focal

and

Should

be

be

day.

You

later

reduced

public

should

grams
a

governments

greatly

eliminated;

works

or

pro¬

deferred until
and I cannot

analyze the detail of the budget,
who have done so be¬

but experts

lieve

it

can

be

billion without

cut at least $10
affecting true de¬

fense needs at all.

"That

line

of

the

odds

starting

procedure

most

bridge the

to

is

efficient

by

way

budget

Indeed, it is the only method

gap.

that gives any real hope of

fiscal

our

penditures for 1952 and estimated

tures

an

or

the essential
government in

one

tions

between

problem in fiscal engineering. The
bridge can be constructed only of

is premised on (1) no fur¬
price or wage increases, (2)

tivity

of

receipts is

mate

is this expense

Concerning the tax problem, Mr.
Magill said, in part:

income. He cautions that the esti¬

subjected to the

plain test:

all

"Bridging the $16.5 billion gap
budgeted
Federal
ex¬

strains we must put
the various items of

all

be reviewed and

needs at all."
r.

and

it,

expenditure in the budget should

defense

amount in consumer and business

ther

mand

have

or

short

The total is $266

maturities.

billion. The

ques-.

offered

a

City

comment

•

it

of the

suggest that

the

inflation

gap

will

portion of the
$90 billion of these Treasury se¬
curities

be

investors

some

exceedingly difficult' maining

solving

problems. If expendi¬
$10 billion, the re¬

cut

are

$6.5

billion

be ob¬
increase in

can

tained by taxes: (1) an

three sorts

of materials:

cut

a

excises to

in

sold

whether

or

such

and

income is

current threat,

"Let

couraged

,

applies -equally
phases Of credit and debt manage¬
ment that have precipitated the

and

high.

business

j
taxes

start with

in

ap¬

raise $71.6 billion by taxes would

Josephthal to Admit
Flanagan As Partner
Josephthal

&

Broad¬

120

Co.,

require a Spartan program, for way, New York City, members of
$16.5 billion of new tax money the New York Stock Exchange,
would have to be secured in addi¬ will admit John J. Flanagan to

,

kinds
Problem

of

Bond

Bank

Holdings

Federal Reserve, as a

The

us

personal

praising the three alternatives. To

spe¬

cial

guardian Of the purchasing
power
of the dollar, also must
ke6i> in mind that some $100 bil¬
lion of Treasury securities rest in
the
portfolios
of
commercial:

more

of

taxes; tand

very

little

be obtained from
individuals- without dfaslic cuts in
money can

living

The

standards.

additional

money would have to be produced,
for example: (1) by the retention

Shuman, Agnew Go.
To Admit Eidell

SAN FRANCISCO, Calif.—Shu¬
plus a 10%
tax, "which is a very man, Agnew & Co., 155 Sansome
banks, savings banks, insurance stiff sales
tax; (2) by the reduc¬ Street, members of th New York
companies, and the like, and that tion in the personal
San
Francisco
Stock
Ex¬
exemption and
such
investors
hold
additional from
$600 to $500, and an increase changes, will admit John G. Eidell
billions Of other marketable se¬
in the starting rate of tax to 25%, to
partnership March 1st.
Mr.
curities, the value of which would so that a married man with two Eidell is manager of the firm's
be
affected,
along
with
their Children and a $2,500 net income analytical department.
Treasury
securities,
should /a will,
pay $125 instead of the $20
sharply increasing trend in inter¬ he. owes under
present law; and
With Gross, Rogers
est rates occur.
(3) by an increase in the corpo¬
(Special to The Financial Chronicle)
Managers of these portfolios, rate rate from 47% to 55%. Such
such as yourselves, are concerned a program would
LOS ANGELES, Calif.—Henry
certainly dimin¬
of

.

present

retail

excises,

sales

.

with

the

power

decreasing purchasing
of the dollar, but you also

into

take

consideration

in

the

of
your
portfolio
prices that your se¬
investments command in

ish incentives to work and to earn.

Baker is

Our

Rogers

system

of

corporate

prise would be hard

enter¬

put to it

to

management

find

the

expansion, for both dividends and
retained earnings would be se¬
riously reduced.

dollar

curity

the market. Many of the decisions
that you make with respect to the

purchase,
these

sale,

securities

retention

or

based

are

of

upon

changes in market values. Collec¬
tively these decisions of yours, in¬
fluenced

as

Federal

Reserve's

bear

they must be by the

importantly

policies, will
whether in¬

on

acquire

additional

securities

or

"Few

"responsible

tionary

pressures

serious damage to

we

"

•

.

.Continued

on

affiliated with

Co.,

458

South

Gross,
Sprinf
Los

Street,
members
of
the
Angeles Stock Exchange.

Joins Kerr & Bell
(Special to The Financial Chronicle)

would

a

are

"Can

already Exchange.

There

go,

economy to

and

.then

we

defense
should

is

a

a

Two With Marache, Sims
(Special td The Financial Chronicle)

LOS

ANGELES,

Calif.

—

,

Jule

•

Mandell and Ralph S. Wilford are

expenditures, ^hCi&^ut?

eliminate

page'32 et

the

governmental

inspired to -bring their liquid
costs as
play in a manner that
do so.
will heighten our inflation.

.

that, in

strong; we/should not increase
them.
If it is possible without

assets into

Thus, the Federal is quite: cor¬
rect in saying that it .must protect

persons

now

&

LOS ANGELES, Calif.—John G.
time of high
Locke has joined the staff of Kerr
national
income, the
proposed
& Bell, 210 West Seventh Street,
budget deficit should be covered
members of the Los Angeles Stock
by* borrowing.
Moreover, infla¬

pay

are

for development- and

money

recommend

defense

effort,
to those

when

thereby
will
be
en¬ tion to and on top of the very partnership
on
March 1st.
Mr.
to increase their hold¬ heavy taxes now being levied. We Flanagan is in charge of the rights
are already making use of all the
■/
department.

dividuals and businesses prefer to

National

of great interest to. us.ip
connection. It was directed

to

the size

.

was

primarily
by

non-

the size of

on

buying."

scare

believe

ings.

Federal Reserve be restored to the

are

we

con¬

Perhaps this is why we are con¬
fronted with the demand that the

lime

we

open-market operations

balance.

on

essary

belief that

a

appreciable ex¬
by sales of Treasury securi¬

tent

practice.

same

ex¬

attaining

the Federal will be unable to

manent

the

only

remote. Therefore,

seems

future

to

At

in Federal Budget, says reduced
outlays are more advisable.

gap

defense

program,

the/ present time the Treas¬ tion, therefore, is whether at¬
faces a deficit, and the pros-'
tempts by the Federal to reduce

long been of the firm belief that
support should not be a per¬

par

may

tract credit to any

The

say.

bridging

a

and

At

the

may be.

case

securities.
depends

regard

pand the amount of credit in use.

surplus

domination

as

,

in

credit

to the ability of
by

Treasury

and

earn,

say

yield about $2.2 billion
additional; (2) an increase in the
upon the Treasury's cash position. no
substantial credit expansion, expenditures, a raise in taxes, or corporate rate to 50% ($1.2 billion
If the Treasury is operating with
(3) no further tax increases, and borrowing. Will to cut expendi¬ additional); and (3) a reduction
a
substantial
cash
surplus, the
(4) a consideration of particular tures is in short supply in Wash¬ in the individual personal exemp¬
Federal can contract reserve credit
potency
to
our
discussion
—
ington. Tax increases can't easily tion from $600 to $500. It is still
by selling securities injthe mar¬
namely, no large use of available win
supporters
among
citizens a rigorous tax program, but it is
ket or by redeeming obligations
liquid assets. He then points out who
already
feel
too
heavily one we can meet cheerfully if
as they mature.,
that
individuals
and
businesses taxed.
Bankers know especially Congress has shown us first that
If the Treasury does not have
hold $176 billion of bank deposits well the evils of borrowing to
have
really
been
pay expenditures
a
cash surplus,; attempts by the
■and currency and $90 billion of current expenses when the Fed¬ brought under control."
Federal to sell in the market can¬
Treasury securities, a large part eral debt is already $257 billion,
not contract credit against the will
of which are redeemable on de¬ when inflation is

We agree with those who say that

Reserve

miscon¬

some

contract credit

this

in

Success

icy at times when this is needed.

Treasury

as

to

of

sale

can

that

ception exists
the

free

more

and

increase

the

ments

points at issue.

and

We

as

amount

to

information

authentic

ishing incentives to work and to
given by the Federal to the im¬
earn,
and recommended as best
of
its
credit
policies
on
method for bridging the gap be¬
holders of Treasury securities such

Reserve's Ability to

Federal

expected of
on

Magill, former Under Secretary of the Treasury, says
would diminish incentives to work and to

Truman tax program

pact

through state¬
Aubrey G. Lanston

alarm

and

debt

credit.

Public

bear

be

must

opinion is be¬

ing brought to

degree in which
considered in the

the

on

management

you
ers.

and

on

Bank

defense

between

securities.

ques¬

Roswell

tion, "Undoubtedly there has been
'inflation by publicity,' which has
fostered
a
contagious • State ' of

Treasury

in

and

dollar,

Korea,

Speaking at the 32nd Mid-Win¬ serious damage to defense needs.
and it ad¬
ter Trust Conference of the Trust Too
many
nondefense expendi¬
mitted that, although such uncer¬
Division of the American Bankers tures have been retained in the
tainties may have been unavoid¬
Association in N. Y. City on Feb. budget, on the expressed theory
able, the lack of a firm basis for
7, Roswell that in some way they contribute
calculations left the way open for
Magill, former to the defense effort. Since taxes
uninformed opinions, speculation,
Under-Secre- are bound to be high, and it will
and extreme statements both pub¬
t a r y
of the be hard to preserve the economy
lic
and
private.
The comment
Treasury, now we are fighting for under the
closed with the following quota¬

head, the public cannot be blamed
if it loses confidence in both, and
in

went

The
little

had been available

bond values is trend of interest rates.

ment

was

the

and support techniques.; Argues that, under existing
conditions, loans granted by banks are less inflationary than
extension of equal amount of credit by insurance companies.
Concludes, most important consideration in maintaining govern¬

a

since

people have been uncertain as to
the extent of the requirements of

that

rates

as

time

the

defense and what

Commenting on controversy between Federal Reserve and the
Treasury, regarding interest rates and support of government
bond prices, Mr. Lanston sees both sides cottect in their respective positions, and contends, in view of prospective Federal
cash deficit, it would be proper for Treasury and Federal
Reserve to reach an agreement in technical area of, interest

.

a

of

Thursday, February 15, 1951

Urges $10 Billion Reduction in Federal Budget

City Bank noted that during

most

them.

*

t

tional

...

real

opportunity

to

good, part of the budg^

with
South

Marache

Sims

&

Co.,

634

Spring Street, members of

deficit in this fashion, without the Los Angeles Stock Exchange,

Volume 173

Number 4986

.

.

The Commercial and Financial Chronicle

.

(731)

23

v'-V:4

How

Public

Utility Securities
By OWEN ELY

X

Kansas City Power & Light
Company

earned $2.08 in 1950

(with

EPT)

no

basis of present

$2.26

a

mon

stock

share, but
this

as

these

rowings, while interest

subject
rr-u

to around

attractive

tually
out

year.

into

decision

has

financing, however.

yet

been

made

that

1941.

»

summer

Capitalization

the

two

of 1952.

■

,

Funded Debt

Common

Stock

Stock

18.0 C

part of. capital,

A

deduction

of

which

92%

for

amount

residential
cial 35%

revenues

obtained.

water

1950

„..

exemption

$1,000

6% gas, 2% heat and
The electric load is

service.

$32
a

of

kwh. in 1950

age

residential consumption

were

was

from

are more

savings
the

determined.

are

matter

of

interest

marked
at

ahead
tax

deduction.

The

rowings

'

v-

order

in

the

means

I
i;4-

two

hoT

all reference to

that

convert

open

notes

type

bori-

of

do

can

to borrow

or

of

million,

tax

negligible

two ways

that

the

paid

_

account

to

so,

debt

on

into

notes, etc.,

1,697 kwh., and rural 2,445.

on

%

Profits

IV2

and

staff

celebrated

the

25th

1.56%*

D

1.34*

1.11%*
.88%*

5

.02

.20%*

people

.25%

.42 V2"

.02%

.47%

5%

.19%*

.251/4

.70%

.03

.48

.93

.25%

.70%

.48'/a

.93%

6

%

7

-

"

!

12%

ipating in the
in

1.15%

Carl

Marks

f

on
on

the remainder.

soy

Since

■

only

75%

of

borrowed

t

pj*

j

1

,

back
a

in

tax savings.

corporation
as

high

'taf'^tonTs

as

pays

7%

into

on

an

The

of
en¬

tire entertain¬
ment

program

was under the expert supervision
0£ Marco and ^ lvlfl VJL
Sylvia of Miami.
^

Among

the

which all

Even if such

was

excess

100.

1.38%

get more than all of the interest

rate

10%

8%

this

area, and have
meat-packing, grain milling and
bean plants, oil refining and miscellaneous
diversified industry, including a large garment industry.
V

the' first: $5,000,000.
the next 5,000,000.

on

,

of

partic¬

weekend

*
Thus, a corporation entitled to
exemption by reference to a 9%
exemption for borrowed
**,.
:
^
capital investment is a sliding capital can afford to pay interest
scale related to the amount of the of from 1%> to better than 5
Zo and
..

total

'

6

Lin¬

number

The

capital investment, as toiwfollows:

weekend

The

.20%*

.43*

.65%*

.

.65%*

Club

the

holiday, Feb.
10, 11 and 12.

.89*

.88*

the

1 lwood

e

Country

.43%*

1.10%*

the

at

coln

.66%*

1.33V2*

-

found¬

of

over

1.11%*

1.79*

4£/a

the

firm

earnings experience.

'

Anniversary

of

i.34%»

1.56'/4 *

Marks

Co., Inc.-, 50 Broad Street, New
York
City,
and their families,

%
:

Carl

of

&

ing

%.

2.01%°

4

hence

The entire

on

3Vi

are

-

Subject

3

;

mm

Anniversary Party

is

2V2

the profits

"excess"

■

Tax

1.79%*

borrow,

Cart Marks Co. HoNI

9%
IV2 %
/
6%
The effective interest rate is

2.24'/2'

.

to

won>£ Work.

the

Rate

need

110

borrowed capital is

on

%

1.

subject to tax. One way
is by reference td capital invest¬
ment; the other is by reference to

Aver¬

Interest

Corporation

a

taxes, when there

save

otherwise

The fig¬

because

order to get the tax

And the exemption allowance

borrowings is

not

are

Effective

of interest

profits

excess

merely to

table

corporation

game,

Excess

If rate

word of back¬

of "figuring
not

are

a

helpful. " There

be

may

excess

2

respect,

about

ground

the

the

of
to

considered.

In this

for

saving is greater than the in¬

corporation

a

not

(*) show the annual

Borrowings by

its capital is also to

on

of

be

rate

and

which

Examples

There

the loan, and on the other
the tax saving from the

exemption to which

,

in

First

taxes

terest cost.

on

is entitled

The company supplies
electricity to a population of 620,000 in
Kansas City, Missouri, and
neighboring communities in Missouri
and Kansas. It also supplies electricitv
and natural gas in Mason
City and environs in northern Iowa. The
economy in the territory
is largely dependent on wheat, corn and other
grains, livestock and
dairying, and food processing. The major cities are centers for

,

income

developed,,,.J?l?e

ures

factors

to

taxes

rate

the

before the final

•

rich agricultural

SDects.

is, after allowipg for tax savings,
a ioan is obtained at interest

,

average.

'

Caution is

when

a
corporation
$27 (30% of $90)
profits tax.

be considered

hand,

some 33 % of
revenues, commer¬
Residential sales provide 43% of
gas
Average residential revenues of 3.000

slightly above the national

both

rates of from 1% to 7%.

saves

excess

paid

accounting for

per

tions.

corporations

shows what the real interest Tate

„

resulting

However, there

com¬

diversified, with

and industrial 17%.

receipts and industrial 45 %.

the results are eVen
favorable to the
corporation
than those shown
by the tabula^-

chandise does not qualify. It will
therefore often be desirable for

account, the following table

borrowing,

therefore

in

be

approximated

for

been

I
/
The corporate excess profits tax
rate for 1951 is 30%. On the $90

100.0%

electric,

was

sales

in

bor-

on

In order to take all these factors

r

-

company's

borrowed,

rowing that is represented by! a
bond, or similar writing.
Open account liability for mer¬

profits taxes.

then three-quarters
9%, is the exempapplicable to
debt.
That

\

15.0

$120.0

borrowed

is stagnant and yields no incorfie.
If income is earned on the
monejy

.

three-quarters is allowed only for

■

The

lt has

more

meas-

capital -s 6%>
m g%_
Finally, in figuring the tax, onequarter of the interest paid on
borrowed capital is allowed as a

12%,

imerest

30.5

In lhese tabulations.

assumed that the money

of the

r0^e(,

$1,000 of debt
added tax exemption of $90 is

an

; 2.0

36.6

taxes than is spent in interest.I

exemp¬

be, while the allowance

figure out where the

.means that on each

52.5%

1

is

tion

net

Equity.

it

profit on the borrowing because more is saved in

savings, the borrowing must be
supported by business need for ihe
money.
Inflation of
borrowing

tion

Percentage

2.4

rate

net

a

X/X in
Finally,

is

$63.0

Notes

Preferred

be

corporation

a

lower

a

income

to

Millions
Serial

"

•

at

capital carries an exemption of
note,
8%, 10%, or 12%, as the case may

F. E. Seidman

of that rate, or

follows:

as

realizes

decrease, the

a

If such

borrow

a.nd excess Fo£its taxes- The other

i

systems; this should

is

interest

an

as

emption of fronv 8% to 12% on
capital investment. If the exemp¬

<

of Dec. 31, 1950, was

as

the

to

pay

profits"""" purpose"''to ranXCcxS-

City was recently completed, facilitating
large blocks of power. A high-voltage transmission line
inter-connect

can

adds

ured
by reference to capital or
earnings, ail of the equity capital
is
figured and three-quarters of
the borrowed capital. That is an-

saving comes in.
The saving works in this way:
75%-of every dollar, of debt is

V

jointly by the company and Union Electric

there

If

added

127o

Whether the exemption is

an

as

1949

corporation

a

9% exemption al~

a

can

terest paid.

part.

exemption is reduced by 12%.

tax

Kansas

pleted by the

tion.

does

considered

increase,

an

is

on

to

is

increase

an

.

increase the investment at Hawthorn to almost
$40 million,
and the station's capacity to
231,000 kw.
v
A four-year program for construction
of a high-voltage power

to

there

words, if

it

high as 5 93% and save
enough in taxes to offset the in-

exemption. Starting with
changes in the size o£ the
capital work in two directions. If

much

V

Einstein

will

Missouri

With

rate

1950,

or

4.94%

3.95%

In other

the

to

saving

equals interest paid

7 Vi%

capital—equity and

borrowed^—in 1948 and

tax

capital

5.93%

lowance.

a

Can

6%

average

An increase in

Tax

Cost

9%

is entitled to

However, capital also plays

*

the

•not-'take

new money this
regarding the method of

99,000 kw. generator has.also been ordered for installation
at Hawthorn Station. ;i This
unit, to cost around $16 million with
necessary facilities, is planned for service in 1953. Its
completion

will be constructed

-

going

rates

-

increased 67% since

transfer of

angle,

find that

and cur¬
rent interest

A

around

tax

will

ital,

wh-ieh began in March, 1949, and which will
represent an initial
investment of around $23
million, was approximately two-thirds
completed at the end of 1950. The first of the two
66,000 kw. units
should be ready for service
by April and the second unit by
August, 1951. The new plant will increase the power
supply avail¬
able to the company's
Missouri-Kansas service area by 40%; and
the company's total
generating capacity at Kansas City will have

loop

of

allowed

About 45%. of the company's
utility plant represents additions
made in the last five years.
Hawthorn Station, construction of

been

the

borrowed cap¬

construction program for 1951-54,
inclusive,
million, compared with $65 million spent in the
Some $21 million will be needed in
1951, and

for borrowed

the yardstick is 85%
earnings for the
best three years of 1946 to 1949.
the

Corporations Sub¬

Profits

Without

Exemption allowance

experience,

exemption
as
high as 9%

company's

No

profits tax law

Excess

Interest rate at which

profits tax.

borrowing mighty of

from

debt

debt.

to

Borrow

\

increasing

new

the company expects to raise about
$15 million in
year.

ject

borrowing -hjrcorporations

excess

dollars

game by

'

/

.

to

on

come

ahead

factors were not provided for in
Mr. Munsell'S estimate); If 1951 taxes make too
great inroads into earnings, however,
the company will probably ask for a rate
increase, which President
Munsell believes could be obtained
(a rate reduction was made in
1947). The $1.60 dividend would seem
reasonably safe, therefore,
but there is no likelihood of
any increase this
The

excess

Many corporations
they can ac-

Moreover,.

$2—minus any further dilution due to

new

makes corporate

financing (assuming that these

will cost about $57
five years 1946-50.

an

low>€ites examples of lower¬

are

rate

r,

The

Congress may decide to raise the income tax rate to 55 %> Assum¬
ing that- this applied only to the last half of 1951, as seems
likely
judging from recent press comment on administration
proposals,*
this would be a 51% rate
(average) for the year. Had such a rate
been applicable in 1950 the
higher taxes would have reduced earn¬
ings about 22£, and if applied to the larger 1951
earnings might

reduce them

rates

ing of effective interest

compared

earnings might be diluted.

by

saving:

investment,

approximate $5 million. On
capitalization this would work out at about
the company may issue preferred and/or com¬

year

the
borrowing be¬
interest paid is offset
equivalent amount of tax

C.P.A.

corporations^will- find iKadvantageous to increase bor¬

many

with $1.99 in 1949 on the same number of
shares. President Mun¬
sell estimated that net income for
1951—presumably based on a
47% Federal income tax rate—would
the

all for

the

Interest Bates at Which

Munsell gave an address before the New York
Society of Security
Analysts on Feb. 7, at which time a loose-leaf book containing the
report and other descriptive material was handed to members.
company

By F, E. SEIDMAN,

^

-

cost at
cause

Accountant points out, because
75% of corporation's debt is
considered capital
hivestment, and there is an exemption from
excess profits tax of
froni8%.to 12% on capital

Kansas City Power & Light
Company is perhaps the first elec¬
tric utility to publish its annual
report for the calendar year 1950,
complete with charts, maps, pictures and tables. President H. B.

The

by the following table showing
interest rates at which there is no
up

Borrowing May Reduce
Excess Profits Levy

scheduled

10Q

guestg

in

events,

participa'tedi

were

Charades, an Amateur Hour,
Dancing instruction by Arthur
Murray Instructors and various

interest

its borrow-

consideration ^ ind°or gameSi, ,°utdo?r. spor£?

ss."

Eastman* Dillon to
-V

!

'

-

->**'>

Seijas, McDowell Now
Partners :Witk J. F. Reilfy Go.
'.

Admit Two

J

'

X-.

>

Eastman, Dillon & Co., 15 Broad
Street, New York City, members
of the New. York.Stock

Exchange,

,

«,wed moneytis
'The
?

rates

just

mmUn of
mentioned.. That

means

TV t
"

V

'*

' v>;.

(
"

f

"Exemption
►

J. F.

Reilly & Co., Incorporated, ( Capital Invest.—T
61 Broadway, New York
City, an¬ /First $5,000,000

nounces

that. Herbert

Next

$5,000,000

Allowance

lor
-Borrowed

V

i_

*

Capital

9%"""

A

admit

,

Donald

S.

MacFadden

X

Seijas,

formerly oX Blair, Rollins & Co.

Exceas

over

$10,000,000.

*,

applies to
nnSficJ
anniVe
^
every corporation that figures its
C0T®'
exemption by reference to earn- •
The successful contestant was
ings experience, and also to every- Frank Da Silva, husband of
^a
corporation with a capital invest- member of the firm's stenographic
ment of less than

$5,000,000 if the
exemption is figured by reference
"Actually, the 9% rate" applies to capital investment.
Inc., is now associated with the
ship on March 1st. Mr. MacFad¬ Xrm in. its- trading department. even where the capital -investment
As the table Shows, corporations is over $5,000,000 if the borrowing
den is manager of the
Municipal Lloyd A. McDowell, formerly with
that get the minimum allowance
department in New York City. Mr/ Wm. J. Mericka Co. Inc., is now •is oL"ne\v" money, m the sense of 6% on
borrowings make a prof-;
Walker is sales manager in the manager, of • the
.that the amount borrowed is highresearch
and
^ when the interest rate is less
er than at the time that the excess
Chicago office, 135 South La Salle statistical "departments <• of
the
than 4%. The 6% minimum allow-*
; profits
tax law first takes hold. ance on
Reilly organization.
Street.,
borrowings applies only
There are certain exceptions to
to corporations that figure their
this but, by and large, what has
Join C. F. Childs Co.
Samuel Franklin Adds '
exemption by reference to capijust been set forth is a good work- (al
investment, and that have a
Edward J. O'Connell and Daniel
/special to the /financial chronicle)
ing rule.
capital of over $10,000,000, and
Moffat, Jr., have joined the staff VXOS
ANGELES, Calif. — Leo / So much for the exemption even then, it does not apply
of C. F. Childs and
Company, Inc., Lawton has'joined the staff of when measured
to;
by capital invest- all such cases.
1 ; Wall
Street, New York City, Samuel B. Franklin &
When
the
Co., 215 ment.
exemption is
The entire situation can pergovernment security dealers.
West Seventh Street.
measured by reference to
earnings haps more effectively be pointed
will

—°.f

porations since the 9%

and Robert P. Walker to partner¬

department,
•

*.iti

American Securities Adds
(Special to The Financial Chronicle)

CHICAGO

Boggs -

1S

American
m

111.

n'ow

.

v

Chauneey M.
asSociated

Securities

with,

Corporation,

West Monroe Street.

„.

First Galifornia Adds




i

(Special to The Financial Chronicle)

.

f

SAN

G

FRANCISCO,

e"D'Ereoie is'now

Calif.with

-

Fir?fc

.

California

company,

gomery Street.

300

Mont-

Commercial and Financial Chronicle

The
24

Thursday, February 15, 1951

...

(732)

Continued

from first page

Switching to Stocks of Wai Industries

Tresis Continue
of cash for unusually

both

declared

dividends

end

large year-

forces

of
interesting because

reappraisal

"A

thus:

from investment income and capi¬

particularly

tal

it

gains, over-all liquid reserves
increased to a total of $225 mil¬

lion.

This

alent

of

the

the

of

sales

net

of
their
own
public for the en¬

funds

open-end
shares

almost the equiv¬

was

the

to

1950. About one-half
investment managements

tire year of

of .the

their

increased
three

cash during the
period and it

months'

only among the closed-end
companies that a majority were

was

forced

dip

to

into

to

reserves

year - end
dividends.
For example, Blue Ridge distrib¬

their

pay

during the last
month of the year; and Lehman
uted

million

$5

in consideration
of wartime tax policy, made an
unusually large
December dis¬
bursement of $3 xk million, part of
which
ordinarily
would
have
probably

Corp.,

will

economists

production

signs of over¬

taking civilian peacetime require¬
ments. The normal consequences,

.

think of

to

in

.

.

(was)

Korea

managements

forces

whether

to

as

a

the

more

vola¬

conservative

distribution.
balanced

This

fund

picture:

Four

Four

picture

72.8

68.0

69.6

5,725

14.9

9.5

30.3

32.9

54.8

57.6

2.640

12.6

10.1

17.9

16.6

69.5

73.3

4,198

6.3

6.7

29.4

28.2

64.3

65.1

1,526

1,850

29.6

34.0

13.1

12.8

57.3

53.2

406

17.1

17.9

4.8

4.6

78.1

77.5

14,473

5.8

6.2

29.1

34.2

65.1

59.6

179

19.2

20.4

14.0

13.9

66.8

65.7

180

11.4

10.5

26.7

26.9

61.9

62.6

484

694

2.4

3.2

19.6

18.4

78.0

78.4

2,179

2,177

14.3

13.8

34.1

33.9

51.6

52.3

96

95

15.7

15.4

24.5

22.9

59.8

61.7

10.5

12.2

20.1

19.7

69.4

68.1

f

19.1

t

24.5

—

________

—

245

'

Dividend
Eaton

of the 20

General

of

its

volatile

more

portfolio

now

claims to be

this

a

tionary

that

work
urge

wave

*the

managers.

England

2.7

90.1

90.6

0.7

0.7

86.7

80.5

188

1.5

2.5

3.9

6.9

94.6

90.6

11,256

11.4

12.6

1.9

1.8

86.7

85.6

963

890

17.5

13.0

2.0

1.6

80.5

85.4

1,659

3.9

3.8

1.1

0.1

95.0

96.1

49

42

1.4

1.2

42.3

52.1

56.3

46.7

3,723

8.9

4.4

0.3

0.5

90.8

95.1

2,067

2,733

16.7

19.7

None

None

83.3

80.3

4.3

5.9

None

None

95.7

94.1

5.2 i

3.5

None

None

94.8

96.5

_____

Investors

24

74

4,595

3,386

93

197

3.7

7.8

None

None

96.3

92.2

1,938

2,261

19.1

19.0

None

None

80.9

81.0

997

216

8.5

1.8

0.3

0,3

91.2

97.9

944

—

&

Bd.

1,795

7.2

12.1

None

7.5

92.8

80.4

12.6

t

55.0

9.4

t

58.0

Group__

8,029

9,682

2.4

as¬

of their
some

better

on

are

Trust

Investors

Massachusetts

the

to

ride

Investors 2nd Fund

cn

the

the

other,

Fund,

whom

describe

the

97.4

1,305

2.6

5.4

None

None

97.4

94.6

105

12.9

13.0

35.4

32.8

51.7

54.2

National

710

468

3.4

2.1

None

None

96.6

97.9

1,097

23.8

28.9

3.2

5.8

73.0

65.3
68.3

New

Investors

834

England Fund

383

21.1

12.2

1.9

19.5

77.0

7.7

7.8

None

None

92.3

92.2

16

26

3.9

6.0

7.3

7.2

88.8

86.8

17,838

17,588

20.7

20.0

None

None

79.3

80.0

418

468

19.5

19.9

2.5

2.3

78.0

77.8

1.9

1.8

91.0

91.2

Selected American Shares

1,410

1

Sovereign Investors

.

State Street Investment Corp

Wall Street

-

1,487

507

Republic -Investors
>

,

Investing Corp

.

■

;

,

Closed-Ends Companies:
/

.

i\

f

,

■

•

-I

American

European

American

1,258

Securities

'_

._

1,350

Ridge Corp

12,603

7,275

;

9.6

8.4

2.8

2.7

90.1

91.0

1.5

12.1

12.1

1,257

1,413

International

>

7.0

7.1

3,264

3,072

Adams Express

Blue

V-I

■

1.9

61.8

._

V

7.1

6.3

1

-

24.2

36.7

.

79.5

*

12.6

81.5

3.4

12.8

4.4

73.1

None

77.3

87.7

1.8

82.5

85.5

5.7

25.6

22.5

1,429

22.7

12.3

None

17,604

16.5

12.7

1.0

Shares

Selected

12.8

13.4

7.7

7.7

79.5

4.2

3.5

11.2

12.2

84.6

4.9

3.6

12.9

12.2

82.2

4.5

4.2

None

None

95.5

95.8

13.9

10.7

0.4

0.3

85.7

89.0

1,423

jjU. S. & Foreign Securities.

3,060

1,983
6,575

Corp

1,952

3,945

Industries

14,329
1,520

2,236

._

1,957

.

5,411

'

|

-

-

-

1.3

'

.

'

74.1

78.9

t]

i

84.2

bonds

New

noted
suc¬

for

preferreds.

date.
in

and

preferred

stocks:

Moody's

Change in Cash Positions of 63 Investment Companies

through

Aaa

Open-End Companies:

bonds; Fitch's AAA through BB and approximate equivalents
tNo interim reports issued to

^September figures revised.

subsidiary

or

stockholders

^Portfolio exclusive

associated companies.

of

on

this

securities

|Name changed from Russell

'.O

Stock Funds

Closed-End

Plus

_i__

Companies

Minus

2

Berg Fund.

Companies..

Totals

4

20

4

29

8

4

14

—

Totals—All

Unchanged

6
7

10

Balanced Funds

30

21

—

12

l]

1

84.3

'

SUMMARY
•Investment

i\

83.0

406

10,406

2,738

_:

?

-

1

"

'

502

'

National

l\

73.9

78.3

.

11,610

Capital Administration
General American Investors

£

*

we

economic




97.6

105

com¬

of

we

None

562

Ba for

trustees

None

infla¬

investment company

The

2.6

hand

one

the

t
f

Mutual Investment Fund

making

had been increasing reserves,

cinctly

68.2

3.9

—

funds

should refer to the year-end
ments of

96.4

66.4

6.7

Tri-Continental Corp.

the

99.6

4.8

18.8

balanced fund.

even

for conservatism
and

0.2

14.2

32.6

company

stocks for

common

at

0.3

27.0

32.4

New Eng¬

Loomis-Sayles

appreciate

forces

3.4

19.4

t

time.
To

0.1

196

t

decreased

-

have had less than 60%
assets in

3,984

6,602

Stock

Shs.—Stk.

sec¬

of total

65.3%

Incidentally,
two 1

80.0

3,550

governments to 28.9% and, even
though it; holds only 5.8% in the
better grades, its equity section
sets.

74.9

2,800

land Fund increased its cash and

stands at

6.4

t

stock open-end-

from 92.8% to 80.4%.

now

4.1

t

from 7 to 12% with the re¬

tion

13.6

Loomis-Sayles Mutual Fund

initial

the

54.5

21.0

40^

Loomis-Sayles Second Fund

additional indications

common

that

53.2

62.7

purchases of
bonds during the
Quarter, and upped its liquid re¬
serves

43.7

6.0

Knickerbocker Fund

.

grade

sult

43.8

12.6

§Investors Management Fund

open-end classification. Knicker¬
bocker Fund, currently grouped

made

1.8

1,748

Capital Corp

Institutional

increasing caution in the other

better

62.0

3.0

1,527

Howard

&

Massachusetts

erg,

26

22.4

Pfds._

&

Section

with the

62.4

9,644

Shares

Fundamental

%

Better Grade Bds.

of

17.4

1,136

Investment Co. of America

are

17.3

95

breakdown:

There

74.7

20.6

f %

913

Group Securities—Common Stock Fund

Equity

71.0

1,068

Incorporated Investors

14.9

21.8

59

each company regard¬
less of size, presents the following

Governments

24.6

126

Fidelity Fund

to

and

56.4

3.5

£

•X

575

__t

in this survey, with equal weight

Cash

/

40

________

t

"*4.4

20.3

,

31,745

28,668

Fund

Delaware Fund

:

Assets

6,357
,
205

t

—

Broad Street Investing

so-called balanced funds included

given

5,504 4

4,368

Affiliated Fund

50—55

composite

80.0

15.7

147

First Mutual Trust Fund___
A

6.4

13.1

§Bowling Green Fund

55—60

Three

4.9

14.7

Bullock Fund

60—65

Three

20.8

18.9

Open-End Stock Funds:

65—70

___

52.9

12,709

Wisconsin Investment Co.____^__

70—75

__

55.9

377

—

Whitehall Fund

75—80

Three

3.8

2,490

•

and Bonds

.

Three

Dec.

4.7

43.3

Shareholders. Trust of Boston

r

Sept.

15.1

Secur.

George Putnam Fund
Scudder-Stevens & Clark

Wellington

End of

Sept.

Dec.

Dec.

39.4

Securities

Nesbett Fund

•

Per Cent

End of

Sept.

be

Grade Bonds & Pfds.

Per Cent *

Securities—Income

Wide

Nation

carefully

Com. Stks. Plus Lower

Per Cent
End of

in

con¬

Companies

Preferred Stocks

Mutual Fund—.

National

Lower Grade Pfds.

No. of

should

other

2,727
3,747

^Mutual Fund of Boston

</o Common Stocks &

-

.

of these companies are en¬ siderations

Net Cash & Gov'ts

Dec.

Hence,

.

190

Mutual

Johnston

is

asset

premises.

8,366

Investors

com¬

frpm investment £pnsid>
er#ttions, rather than from consid¬

Funds

artificial

realistic approach,..

2,885

—

Fully Administered Fund—Group
General Investors Trust______

marily

of

power

a

earning

15,576

Howard Balanced

Eaton &

fund

current

The prospects for

2,757

Commonwealth Investment

bal¬
such
determination should be made pri¬

the

on

semi-finished articles of com¬

merce.

1,868

-

Axe-Houghton "B"
Boston Fund

equities and bonds of

less

erations

the basic inflationary trend and

as

13,999

Axe-Houghton Fund

take precedence over

and

by

President of the
Company.

Investment

Quarterly Periods September and December 1950

Sept.

Business Shares

American

excluded from the
category:
But

panies

of

Isaacs,

Open-End Balanced Funds:

included
in the balanced fund group.
In¬
cidentally certain open-end in¬
dustry leaders would prefer to

anced

Kenneth

and

End of

uniformity among

expressed

After commenting on such factors

point out that almost
the investments of the

Thous. of Dollars

the companies presently

the

Story,

Wisconsin

intelligent

an

as

Invest. Bonds &

position more highly attuned
inflationary implications of
the war economy. This is evident
from the varying percentages of
assets currently invested in com¬

see

of

as

Griswold

Merrill

event

an

End of

a

senior

one-half of

note

caution

of

word

Harold

Balance Between Gash and Investments of 62 Investment

to the

tile

to

also

us

Net Cash & Gov'ts

was no

stocks

interest

Chairman and President,
prospects, with respectively, of Massachusetts In¬

These new

pects.

tionary

would

wholly new pros¬

that ushered in

present cautious investment atti¬

mon

Let

.

of

vasion

continued,

trend

Attitudes Toward War Inflation

tude should

Words of Caution

company's

this

to

respect

.

the underlying infla¬

June.

There

with

the growing institutional and fi¬
great im¬
Fund is in growth companies pro¬ duciary interest in stocks, he ob¬
have
been
unemployment, nar¬ portance, and we have weighed
ducing natural resources, such as serves:
"While
recognizing
the
rowing profits and a much more carefully this element in deter¬
oil, gas, minerals, and forest prod¬
severe test of the ability of mar¬
mining the balance between highunderlying power of the condi¬
ucts, primarily for sale as such
ginal companies to survive than grade bonds and common stocks."
and also for use by a company in tions just reviewed, it is well to
they faced in the 1948-49 adjust¬
whole or in part in the fabrication remember that they rest mostly
M. I. T.'s Comment
ment.
(The) unexpected in¬
this

had

been distributed at its fiscal yearend

the

portfolio: "Another prospect in the
economic picture is inflation, or in
other words, a lessening over a
came
promise of the inevitable
dislocations, controls and taxes of period of the value of the dollar.
a war economy.
.
We continue In this latter connection it is of

tremendously

showed convincing

report

nual

volume, high-profit sales to civil¬
ians. But with the new prospects

postwar

first

our

national

increased

some

the

as

in which

year

by

considered

be

their an¬ hanced by the 'inflation-hedge*
give recognition to characteristics of their businesses."
inflationary needle's potential

vestors Second Fund, in

promise of a future high demand
for
military materiel, also had
the immediate effect of a limited
extension of the period of high-

1950
1950 is

throughout

work

at

63

Volume 173

Number 4986

The Commercial and Financial Chronicle

...

(733)

-•

weighed, of which the following
appear to stand out:

"(1)

In

international

develop-

ments

the obvious should
be taken for granted. The

never

course

of

history is lull of ironic twists,
Against all expectations, the war
danger

become suddenly alle-

can

viated.

purchased Sinclair and Standard American Metals
of California, three of the former shares received as
and two of the latter

"(2)

Regardless

near-term

bring

among the oils during the pre- shares.
A couple of funds each
vious three months' interval, had bought Climax
Molybdenum, Maga following of five funds.
Pur- ma Copper ' (representing initial
chases totaled 10,700 while 1,200
commitments), United States Foil
shares were
liquidated by two "B"
and
United
Electric
Coal,
managements.
Four trusts each Three purchases were made of

in

of

what

developments
the

international

the
may

sitna-

representing
new commitments. There were no

saies ot" Sinclair and only

tion, it is well

to remember that
the economy of the nation has become

Since

program.

and of

been

volume

borrowed

of

business
the

fu-

ture, thus adding to the inflationstimulation.

ary

"(3) The demand from foreign
from foreign
countries for this nation's
export
arma~
"

mat.el?el>

1S

f, ® ?teady shrinkage. Cuirently our imports are
It

would appear from the above
that in purchasing or
maintaining
at this time a
preponderance of

inflated

facing

securities, the investor is
than

more

minor hazard."

a

shares. So
too,

ing

0f

which

since

ever

had

its

ton

in

accentance

?950

the Jtme quarter of

crease

totaled

Three

was nc™

Qd

along

with

the

two of these had received
vvw
in the stock split-up.
Imperial Oil
was liked by two trusts and the
same number
pnQi

anri

slightly favored by the bulls

in the previous quarter.

panies sold

Six

a

disposed

of Atlantic.

of

In each

9 7ftn

2,700

the

were soId- Three 0f the

Time Corp. by National
Securities,

former and

shares

issue two

PaXtm°<UgrhHnikInC^Intemati0'?f,1
as well as
by State
Investment Corp.; General

r.(

of

portfolio

in-

yvhich were
three portfolios,

trusts

20,000

was no concentrated

one issue of this

eliminated

selling in

any

industry8

The Natural Gas Group
Ptepublic Natural Gas
best

liked issue

in

Merchandising

tha

was

compara-

tively

recently favored natural
Two funds made initial
commitments and there were three
increases
to
portfolio
holdings,
totaled

liquidation

Stocks

the

gas group.

Purchases
The

from

shares.

also
added
5,500
Crucible Steel made its

Wheeling.

was

11,100 shares;
absent. Holdings

in Northern Natural Gas also in-

mJrcL^

entirely

from

portfolio

tion

of

of

h
have

mlSht

r.'i

„.,u

w

i

.

been

inferred
inferred

riiirincr

ii.inc4.

„r

Grant

whiS Il c!

5ss at leatssst smsrtsrss,

SFWHSSSM

" - *—

^

was

ii J,

if

^

,-o

ko

Fbepd£revive
noted, maintained their relative
ftion^
positions as
no

top

lavontes

of

the

no

as

Metals Favored

-

29,200

initially

trusts

puradded

and

liquidation in

^

sentiment

Sellers had

7

favorite

two

eight managements in-

"Ifan°S"gS„hwt
°ne the Liv co4fssIon
made'to
^a!e
1^£un|fadded 30 600

this

issue,

Two managements each liked Interstate DePartment stores> Mer"
pantiip store*
cantile Stores and Pennev: bearand Penney; beai

once

was

by

folios.

absent

was

a

lalter

were

sliSht

in

edSe

all

over

to

Oklahoma!?

bought.

Gas was purchased by

other companies. In addition
in several portfolios

increases

resulting
and

from

the

stock

exercise

of

dividends,
rights, two

funds
each
acquired through
outright purchase shares of Mississippi River Fuel Corp., TenGas

nessee

Transmission

Western

Natural

issue

which

in

dominated
and

Gas.

and

The

only

bearishness

pre-

Peoples Gas Light
Coke, 3,100 shares of which

were

was

¥•

sold by four trusts.

Although buyers favored the
machinery and industrial equip-

eineering-Superheater

three

com-

in Montgomery Ward, 4,400

being decreased
In

Sears,

purchase of

in six

port-

liquidation

four portfolios was
lone

former and 43,000 shares of the

a

olfset

block

in

b3' one
of

J^ents

and

four

others

por^fodo holdings
^
b

100

a

Continued

~

adding to

total of 7,100
•

on

page

26

:

dustries, and Edison Oil by Leh-

Gimbel,

was

to the holdings of another; there

q

SSl"

holdings.

Land & Exploration, 27,500 shares
0f which were disposed of by four

38,700 shares
were:,bought by four

portfolios

chased
oh^

lone

one

funds but two sales totaled
29,000.
Also finding acceptance in three

sales?n Atchison
auto secold buyers
£:Jshares

"liquidated"was" LouuVana

also

was

decrease.

io^n Smpnf'SI, shares of which were

rvf

shares.

acqaiFe<J J.7'" two
Natural
In this latter

shares of Field.

instance there

from the continued strength in the

1,000

?alf as manJ

in

Rails' Purchases Continued
»

1por,tfoA®ne^hmmaof

block

a

portfolio

18,700 of Phillips

the latter issue removed the stock

Also

was
a
lone new commitment
Dome of 300 shares.

com-

total of 11,400 shares
Indiana stock and a like

the

4,400
There

As

nil

con,' Lc
oAr.oor^tr-Qioa
ir,
Selling
was
concentrated
in
Standard Oil of Indiana and Atlantic Refining, the former having
been

liquidated

shares of the latter issue.

acquired Texas Pa-

funds; Webster-Chicago Corp. by

Commonwealth

shares

pew

which
vvlMWt

number

Packers, Ltd. by Commonwealth
Investment; Motorola
also
by

total of 12,000 shares,
0f which represented a com-

The only other concenselling in this field appeared in Woolworth, 6,500 shares
trated

two hew com-'of-

as

one

a

three managements managements

bouSht 20>000 shares of Honolulu

numW

Issues added to
holdings during

and

attention

shares.

,.

of

New Additions

Street

during the period
mitments

some

25

A were each acquired by three one
Allted Cleased by 5'850 sba"f' F°ur pur~
managements. Only sale was that piete portfolio elimination. Two
_oPa
chases were Partially offset D*
°fa. sma11 block of 300 Creole In sman purchases totaled 700 shares,
f the nrecedine Sentember^uar* tW° £alfS each 8'?°°- Jbr<;e
of, showed interest n*
addition to the stock of Cities Dome Mines and Homestake were
agements
Service received as a o% distribu- aiso n0t too well liked as three ter'
F<~nJnai^gft
CP /
Columbia Gas and Southern Protion' there were three other in" trusts sold 6,500 shares of the a i°tal °f 25'000
sharf.s ofA1.Led duction Co. 16,000 shares of the
creases to porfolios totaling 4,000 former and the same number of
°nly

exceeding

exports.

for

portfolios, and
the buy- purchases
totaling 3,600 shares
been waning found no offsetting sales.
There

disposed of

lot of

in

came

Aluminum of America

finent Pete, 11,500 shares of Rich-

a

from

Iron

was

Cleveland Cliffs

initial bow in two

field and 6,300 Signal Oil and Gas

stocking up and of expanindustry have taken place,

A substantial

has

idend.

first

anticipatory buying by the public
sion by

to

commitments; liquidation

not pronounced.

the least popular issue in the nonferrous group.
Six managements

the

signs of trouble in Korea

Creole Petroleum, 6,800 AmerRepublics* 11,300 Mid-Con-

*?an

addition

5% stock diy-

arma-

closely geared to the

ment

one in
28,600 shares

the California issue.

in
a

new

'

D'Automobile

et

D^Avistion

Congoand T'sumebCorn

qtatef

TlnheH

^pnmfties

hfririfal

Ltd

au

bv

ifftfrn^ L

n

plftcWoh iw!fta?
Tinman R»aif^ inH

and

and

construction
Constraction

„

Oil

was

feature

a

of

the

petroleum. group, nine managements purchasing a total of
29,300
shares, three of which made new

commitments; there
sale

of

block

a

the n°n£erl0us metals, eight managements adding 28,600 shares of
N'ckel and 21ll0° sha£e® o£ £be
'atter.issue- One-half of the addill0ns ln
phelps Dodge represented

was one

of

200.

small

In

the

previous quarter Pure Oil had
been the second most
popular issue, but total number of shares

shares.

a

most of the inthis issue resulted from

stock

distribution

made

by

Standard of Indiana.

increases occurred
the

stock

these

were

out

round
as

melon,
*

in

the

but

small

shares.

Vacuum

was

seven

man-

total

a

Three

amounted

Ohio Oil

to

Socony

well-liked,
agements purchasing

sales

of

received

also

65,200

many

amounts

holdings

dividends.

was

Actually, 12
independent of

of

off-setting

to1 7,500

shares.

the third most pop-

ular issue in the group, six trusts

adding

a

total of 27,700 shares to

portfolios;

there

were

no

sales,

Shell, the most sought-after issue

second

was

each liked by live trusts, but there
were n0 offsetting sales of the
Canadian carrier in contrast with

shares,

making initial commitments.

One

block

disposed

of

of

by

2,500

shares

another

In addition to

a

LEXINGTON

in

national Nickel which at that time

ment.

although

Kennecott

had ranked second. Six trusts purchased a total of 10,400

for first place in additions of this
in

Canadian Pacific,
Pennsylvania and Southern were

peake and Ohio, and one increase
popularity, having switched its Gf a block
already held; a lone sale
previous quarter's position in the nf « ooft shares
contrasted
with
group as top favorite with Interthese three purchases.
Erie and

two

group,

Illinois Central.

Selling- was three o£ Pennsylvania and two of
also fairly heavy in Nickel, four
the Southern. Two new portfolio
funds disposing
of over 24,000 additions were made in
Chesa-

purchased was more than twice
that which it had been
currently.
Standard of New Jersey also vied

crease

there were four sales of Rock Island contrasting with only two of

commitments.

new

„.,

Pure

by Overseas Securi
by
Securi-

these-additions represented initial

national
and Phelps
?u°dgG T™ tWm faYon^s amon2
n

was

manage-

Louisville

Nashville

&

eacj1 Lked by a couple
ments but opinion was

Great Northern

as

additi0ns

also

manage-

divided

offset

were

were

of

TRUST FUND

on

portfolio

seven

six de-

by

creases>

25% stock

melon, six companies added to
their holdings of St. Joseph Lead.

Steels Favored
q^e two

industry leaders in the
were again the top
4,000 shares. Pittsburgh Consolifavorites among investment comdation Coal, a relatively recent
pany
purchasers as during the
newcomer to trust portfolios, was
previous quarter of 1950. But, alagain liked by four managements
though approximately the same
as
during the previous quarter. number of
Offsetting

were

Purchases

half

of

four sales totaling

totaled

which

5,300

s^eej business

managements

shares,

represented

their

interest

in

these

showed

industrial

new

giants, total volume of purchases
additions; there were two sales. declined somewhat. Eleven trusts
Three managements each added
bought 29,000 shares of BethleAluminium, Ltd., Anaconda Minhem, only one of which repreing and Mining Corp. of Canada.
sented
an
initial
commitment,
Purchases of the Aluminium stock
totaled

7,900 shares and of Ana-

conda 2,900

shares, while additions

to the Canadian issue equaled

3,300

pour

offsetting sales equaled 6,000

shares.

United States Steel

addition

new

and •

was

to

was

Prospectus

may

the Fund's New York

two

increased

portfolios
among
the

holdings of five others. Total

or

from

your

INVESTMENT DEALER

with

68,200

contrasted

Allegheny, Jones and Laughlin
Republic were each well likea
by
four investment
companies.

and

There
and

or

of

equaling 2,800. Seven
managements also acquired Armco and there was no
liquidation.

THE

AXE-HOUGHTON

were

two

sales

of

Jones

but

otherwise

negligible.

730 Fifth




Avenue, New York 19, N. Y.

the

selling

Members New York Stock

In

to

new

addition

resulting from the split-up,

there

were

of

six increases to hold¬

Youngstown

Exchange, New York Curb Exchange

and other principal

exchanges

was

stock

ings

Ira Haupt & Co.

Laughlin totaling 4,300 shares,

FUNDS

AXE SECURITIES CORPORATION

—

sales

two

on request

from

pur¬

chases

Prospectus

Office

a

.i

Mutual Investment Funds

be obtained from

Sheet

and

Tube, three of which represented

111

Broadway, New York 6, N. Y.
Si

2«

The Commercial and Financial Chronicle

(734)1

Thursday, February 15, 1951

...

ifV.

Continued

from

25

page

Trusts Continue
shares.

There

was

block of 300.

sale of

one

Link Belt

also

a

was

Utilities

also

portfolios,

added

was

although

liked, three purchases
amounting to 3,600 shares, two of
which were new acquisitions. Two
managements bought 1,200 shares
of

and

Pneumatic

number

same

National

Acme.

Tool

and

acquired 2,700

Two

the upper edge in

tion

to

tional

decreased

The favorite in
General Portland
Cement, four companies adding a
total of 8,700 shares; there was
one
portfolio elimination of a
block of 1,500.
Three funds also
bought National Lead while two
trusts
purchased Bucyrus Erie.

five

of

this

part

increase resulted from

Chicago

managements. Holdings were also

-

Switching to Wai Industries Stocks

well

the

'*

r

this

distribu¬

a

made

by Electric Bond and
Utah
Power and
Light

Share.

purchased by four companies
as many acquired 14,000
Light.

was

half

shares of Florida Power and

sellers had

Gypsum.

group was

additions

Some

Bullard, but in

The Building Group

General Foods and Mead Johnson

to

made

were

ing,

Manufactur¬

Eaton

of

Libbey-Owens-Ford

and Motor Products.

A. O. Smith

in

and

little

12,000

found

Budd

with

a

favor

four

three managements

buyers,

making initial commitments in the
latter.

along with stock received through

in spite of

gross

swelled

resulting
United

particularly well

was

re¬

garded

as
three companies in¬
holdings by 47,900 shares.
A block of 10,000 was sold. Low-

creased

enstein

the

was

only issue of the

in which

group

sellers

predomi¬

nated, two managements
ing of 1,200 shares.

trusts

block

sold.

Four

of

500

initial

shares

win Williams.

purchase

commitments

fairly well divided

vester

and

Deere

funds

folio

acquiring

managements

Har¬

the

favorite

in

division,

six trusts
shares.
Half as

6,500

disposed

of

shares, two of these com¬
pletely eliminating the stock from
portfolios. Two funds made initial
commitments
to

Brass, Holland Furnace

and

two

holdings

of

others

Firestone.

Least popular issues in the util¬

ity

wherein

group,

during

the

occurred

concentrated

the period,

liquidation

were

two

old

favorites, Consolidated Edison
New

York

and

North

Six managements sold

15,700

shares

of

American.
a

total

tof

of

Edison, two of
these completely
eliminating the

likewise

disposed of North
American, sales totaling ; 41,400
shares.
Partially offsetting were
three purchases of 8,000 shares.
79,300 shares of Kentucky Utili¬
ties

sold

were

of

out

four

port¬

folios,

half of which resulted in
complete eliminations; there were
additions. Three managements
each sold shares of American Tel¬

no

ephone

and

Telegraph, Central
Illinois
Public
Service,
Public
Service of Colorado, Public Serv¬
ice of
Indiana, St. Joseph Light'
and Power and Wisconsin Electric

Power.

There

were

decreases

in

two portfolios each of
holdings in
Empire District Electric, Potomac
Electric

Power,

and
Wisconsin
Power and Light. Two blocks of
Niagara Hudson Power totaling

65,500 shares

were

exchanged for *

Niagara Mohawk Power.Largest

concentrated

ing in this
Southern
crease

of

Dow

purchas¬

group occurred in the

117,300

four

three

portfolio

new

A total in¬
shares resulted

purchases
additions.

and
Par¬

tially offsetting sales in two port¬
folios totaled 41,700 shares. ' Next
best liked issue was Middle South

Utilities, six managements acquir¬
ing a total of 13,400 shares. There
a

decrease in the

two trusts of

were

and

added

much

to

there were three
lighter volume.

holdings of
4,300 shares. Texas




Minerals

International
stock

new

received

as

dividends by additional

purchases
Freeport Sulphur,

in the market.

Victor Chemical and Heyden were

also liked.
in three

from

DuPont

lightened

was

portfolios and eliminated
others.

two

balance

sold

Also

on

-

American Cyanamid,

were

Union

Carbide, Hercules Powder,
Industries and National
Cylinder Gas.
*

Newport

Opinion

also mixed on ,-the
paper stocks.
International Paper
and Union Bag and Paper were
sold, while Rayonier and Abitibi

food
by liqui¬
the

portfolios of 28,500
Corn

Biscuit.

was

by four man-" Power and Paper
agements while Standard Brands, by purchasers.
was

sold

favored

were

.:

managements sold than bought

are

purchases

.

No. of

No. of

No. of

No. of

No. of

Shares

Shares

Trusts

Trusts

No. of

Shares

No. of

Shares

Trusts

No. of

Trusts

J.

16,850

I.

y

•

Containers and Glass:

Agricultural Equipment:

4(4)

4,700

Caterpillar Tractor

2(1)

7,800

Minneapolis-Moline

3,100

__

None

17,000

2

Budd

5,500

3(3)
2(1)

A. O.

150

1

None

Borg Warner

100

'■%

_

Chrysler

None

Eaton

2

None

_

900

2

.1(1)

4,000

Company
Smith Corp._

9,000
None

Abbott

None

American

500

Electric

Auto-Lite

149,800

General

Motors2

_

_

_

None

None

Libbey-Owens-Ford

None

None

Motor Products

_

_

_

_

_

Glass

_

4(1)

2(2)

9,600

45,300

12(3)

8(1)

52,275

3

3

2,600

1

19

—

3(1)

2,600

Manufacturing Co

2(1)

1

1

North

American

Aviation

American Overseas Airlines

None

Boeing Airplane

27,000

'

None

Eastern

None

None

—

__

General

700

-

Electric

Square

Electric

Sperry Corp.
United Aircraft

American

59,700
6,335

3(3)

2,000

United Airlines

2

1,260

Fireman's

4(3)
2(1)

3

2,975

Manufacturers

5,500

Airways--

3(1)

2

2(2)

Marine

105,000

Fund 10

Coca

3(1)

2

6(1)

None

3,400

Cola

2(1)

4(3)

11,500
4,500

None

1,000

American

2

6,000

Bucyrus Erie

4(1)

8,700

General

500

Portland

Cement__

Masonite2

32,900

3(2)

3,100

National

2

1,474

Ruberoid 4

Lead

1

None

1(1)

KD

2,000

Mead

3(2)

1

\ 200

National

3
1

36,600

V\-

Weyerhaeuser Timber2
American

2,400

■

;

None

None

500

Radiator

6,500 r

__

1

_l_w

67,300

4,100

None
None

None

None

None

Mueller

Brass

National

None

_____:

_

1

Gypsum

Pittsburgh Plate Glass--

None**- None

Sherwin

2(2)

United

300

Williamsr

States

:

-

..

__•

_

Gypsum

.-

'

Commercial

13

18,865

Solvents

2 ":i •
2,700
17,300 ; 1,3(1). <
3(1) 3,600

1,200
\

3(2)

,

7(4).

..Eastman

Kodak®

;

2(1)

,

3(1)

2(1)
:

2,900

•

.1,800
IJ 28,600

8(1)

5(2)

Internal'! Minerals & Chemical7

1,000

1(1)"

3(1)

6(3)

39,200

Monsanto Chemical

3,300

3ur

8(4) >

2,152

Rohm

None

None

4(2)

3(2)

5,000

Victor Chemical

1

6,000

American Cyanamid

and

None

Haas8_-___;
Works

du Pont

;

None

Hercules

Powder

None

None

National

Cylinder Gas——

None

None

Newport
Union

Industries

Carbide

None

,
-

Link

Belt

.

854

1

16 <21/

2(2)

ii

10,400
1,300

,

:

4(4)

5(2)

2(1)

3,300
21,100
5,300

23,675

2<1)

4

National

Bullard

;

Acme

None

L--

.

.

None

•None

ij

-

900"

Co.

'Anaconda

2

'

Copper

International
Kennecott

___:

"
.

1,400

2,900

l_f

_

Copper

—Tl__'_

___________

Mining Corp. of Canada
Phelps-Dodge '__i.

;

None

None

i.—_

Nickel _*__—_—

Magma Copper

None

700

Aluminum

300

Dome Mines

2(1)

None

None

Homestake

6,900

4

None

None

Pittston

Co.

of America

____.

Mining

Co.

None

None
24,600

4(1)

2,500

1

None
None
3,000
8,400

None

Pittsburgh Consolidation Coal__i
St. Joseph Lead 16_
4,000
United Electric Coal.—^-—-—None
United States Foil ''B"-V__:_j__None

KD

1

6,200
None

_

Climax Molybdenum

7,500

-

i

1

.

None

2

2

Nonje

■«

;3oo;.

.

.

'

1,500

None

1,100

None

None

2,000
10,500
3,900

3(2>.

None

Aluminium, Ltd.

Freeport Sulphur

2

X

American Metal Co,15__

Heyden Chemical

-

3(1)

'

Chicago Pneumatic Tool_______
Engineering-Super•:
heater.i____

1,400

1,200

100

Brands

7,900

2,100
30,000

*

3(3)

14,500

_I

__

5(4)

2,900

Biscuit

3(2)

2(1)

4

2,700
None

3(1)

_-r_i________

3(2)

13,200
28,200

____

Metals and Mining:

5(1)
4

9,015

4(2)

Combustion

7,100
3,'600

None

None
*

13,725

2(1)

,

6,200
8,600

_

Wrigley

1

2(1)

None

Dow Chemical 5

_

-

—

_

3(1)

k

2

7,400

j

2(1)

i

2,800
15,423

Refining

Johnson

Standard

200

None

7(3)

: 2(i)

Chemicals:
2 ~

Products

General Foods

-

13,300

3(2)

5,300
-

-

__

Machinery and Industrial Equipment:

;

3(1)

2,500
16,000

-

4(2).

"

8(4)

3,500

_

None

None

2(1)

Corn

None

1
None

None

-

4,400

Fruit

Kl)

None

__

5(5)
9(5)

48,900

American Chicle

None

■

7(1)

United

12,000

8,800

._

None

16,100

Financial Corp.

1,500

_

None

29,400

Holding Corp.12

None

___

;

None

Food Products:

None

Seating 3

C.l.T.

1

None

-

Phoenix Insurance
Amerex

None

400

Tri-Continental

700
None

None
None

None

_

Commercial Credit

7,000

None

3

_

—

2,000

_

Building Construction and Equipment:

7

8(4)

None

Develop.13

Midland

1

15,600

4(1)

4(1)

__

Trust14

17,600

___

Beverages:

2(1)

6(1)

None

American Research &

2(2)

None

_

1

1,600

12,700
.£«./■ 15,300
10,300

Express 12

2(2)

22,400

Pan American World

6,800

3(1)

_

"D"

Westinghouse

18,000

__

None

None

—

Philco ii

20,850

Airlines

None

None

None

None

None

6(5)

Financial, Banking and Insurance:

18,600

None

Motorola

6,200

Aviation:

3(1)

2(1)

Electrical Equipment:

6(1)

None

19,500

Products

Home

None
None

26,200

Laboratories

None

4,400

___

6(1)

24,600

__

None

None

Smith, Kline & French 19

None

6(3)

5,600
35,200

__

2(2)

None

Robbins

and

McKesson

6(1)

None
2,400

Colgate-Palmolive-Peet9

12,695

'

20,600

Drug Products:
Bristol-Myers
5,000

Auto and Auto Parts:

1

100

Owens Illinois Glass
Continental Can

19,400
1,325

3

2(1)

^

None X

—

.

3(1)

1

500

Case 1

-

-S old-

—Bought—

Sold-

-Bought-

8

s

.

Issues which '
in italics. Numerals in parentheses indicate number of managements making entirely ;
or completely eliminating the stock from their portfolios.
/

buyers exceed sellers—or sellers exceed buyers—by two or more management groups.

which

in

new

13

Company.

from

was

of Electric
sold by four more

shares

in

highlighted

National

of

in

(September 29—December 31, 1950)
Transactions
more

issue from their portfolios.
Two
purchases totaled 4,500 shares. Six
trusts

Auto-Lite

Na¬

and

Products

24,600

was

dation in five

shares

shares;

sales

Changes in Common Slock Holdings of 44 Investment Management Groups

Purchases totaled 7,800, offset in
part by two sales of 1,500.

heaviest

while

two

Mueller

were

stocks

commitments

new

others adding to port¬

2(1)

2,800

added

each

by

Balance/

,

selling

noted,

11(2)

managements

many

on

although total

on

was

rubber

Lightened

As

Borg Warner was
in three portfolios and
eliminated
from
three
others,

makers,

parts

lightened

4,100

of

on

holdings, purchases totaling

39,200

acquired by three

were

making

three

and

companies.

Among

far from balanced.

was

Goodyear
the

block

a

which

of

either side of

volume in shares
the market

small block of 100 shares.

The only offsetting

was

Armstrong.

was

Caterpillar Tractor
totaling 4,700 shares and half as
many
purchases were made of
Minneapolis Moline. Managements
were

Pittsburgh Plate

trusts.

dispos¬

made in

were

sold

each

shares of Chrysler, and here, too,
there was only one purchase of a

Three

i$sue

While

others.

three

Glass, Armstrong Cork and Sher-

along with other additions result¬
ing from the 10% stock distribu¬
A

focused

tirely from their holdings.

Among agricultural equipment
makers, 10,000 shares of Case were
acquired by four managements

tion.

sentiment

bearish

increase

the

from

stock
dividends.
Merchants and Manufac¬

turers

which

being

■

Only one lot of three managements, and Sperry,
was United States Gypsum, seven
1,400 shares was purchased, the unpopular with a like number of
comparatively light in these is¬
trust people.
Only issue in the
sues.
Shares of industrial Rayon' companies selling a total of 13,300 remaining additions resulting
shares.
At least half
of these from the split-up.
Six manage¬ group to be liked was North
acquired through outright pur¬
American Aviation, 18,600 shares
funds cleaned out the stock en¬ ments also sold a total of 35,200
chases also

dividend distributions; selling was

shares

Fruit,
acquired' by

United

was

during the previous Sep¬
business
stimulated by the war tember quarter, chemicals were
sold on balance, overall opinion
effort, were both the air transport
and manufacturing concerns. Four appeared to be fairly well bal¬
trusts liquidated a total of 22,400 anced in the period under review.
shares of Eastern Air Lines, three Monsanto was the favorite, three
Also unpopular,

Masonite,

of

three

only well-liked

group

Chemicals Sold

Ruberoid
completely eliminating the issue
modest volume.
and Weyerhaeuser Timber, along from
American Radiator was the most
portfolios; there was one
Outstanding favorite among the
with
increases
resulting
from
offsetting purchase of 27,000
heavily sold issue in the building
textiles
was
Burlington
stock dividends and split-ups.
Mills,
shares.
Also sold by two funds
group, eight managements dispos¬
seven managements
purchasing a
each
were
American
Overseas
Half of these
total of 81,300 shares; four of these ing of 67,300 shares.
Motors Sold
funds completely eliminated the
Airlines, Pan American
World
were new commitments.
One lone
from
portfolios.
Three
Among motors, both General Airways and United Air Lines.
block of 100 was liquidated. Four shares
of 2,400 shares were Motors and Chrysler were sold. Faring little better were United
funds each added to holdings of purchases
Motors
was
decreased
in
nine Aircraft, lightened in six port¬
American Viscose and Pacific Mills negligible in comparison with the
liquidation.
Next issue upon portfolios
and eliminated from folios; Boeing Airplane, sold by
holdings

The

the

by

lightened

each

were

funds.

Glass

None

2(1)
,2

4(1)
None
.

None

12,000

6(1)

6,500

3(1)

4,400

3(1L

700

2(1)

Number 4986

.Volume 173

The Commercial and Financial

...

Chronicle

(733)

25

weighed, of which the following among the oils during the pre¬ shares. A couple of funds each
new commitments; liquidation was
shares.
The only
other concen¬
vious three months'
appear to stand out:
interval, had bought Climax Molybdenum, Mag¬ not pronounced.
Cleveland Cliffs trated selling in
this field ap¬
a
following of five funds.
"(1) In international develop¬
Pur¬ ma Copper
(representing initial Iron came in for some attention peared in Woolworth, 6,500 shares
chases totaled
ments the obvious should never
10,700 while 1,200 commitments), United States Foil
during the period as two new com¬ of which were eliminated from
shares
were
liquidated by two "B" and United Electric Coal.
be taken for granted. The course

is lull of ironic twists. managements. Four trusts each Three purchases
Against all expectations, the war purchased Sinclair and Standard American Metals
of
danger can become suddenly alle¬
California, three of the former shares received as

mitments

of history

and two of the latter

viated.

Regardless of what
near-term
developments
bring in the international situa¬
tion, it is well to remember that
the economy of the nation has be¬
"(2)

closely geared to the arma¬
ment program.
Since the first
signs of trouble in Korea a lot of
anticipatory buying by the public
and of stocking up and of expan¬
sion by industry have taken place.
come

substantial volume of business
been borrowed from the fu¬

A

has

ture, thus adding to the inflation¬
ary

stimulation.

"(3) The demand from foreign
countries for this nation's export¬
able

products

(other than

ment and related

arma¬

materiel) is

un¬

dergoing a steady shrinkage. Cur¬
rently our imports are exceeding

totaled

to

Three

trusts

5% stock div¬

a

idend.

representing

Aluminum of

ing

Petroleum, 6,800 Amer¬
Republics, 11,300 Mid-Con¬

ican

to

shares. So

were

as a

5% distribu¬

three

other

also

in¬

porfolios totaling 4,000

of

in the stock
was

liked

shares
was

these had received

a

the

and

lone

three

as

shares

of

latter

new

the

number

same

liquidated

the

of

liked

of

4,400

issue.

There

commitment

in

was

Oil of

concentrated

in the previous quarter.

Six

been

inferred

rail market during the last quar¬
ter

of

1950, investment company
managements continued their pur¬

slightly favored by the bulls

inflated

have

from the continued strength in the

Refining, the former having

been

might

chases

which

been

had

so

pro¬

shares
There

3,600
sales.

portfolios.

The Natural Gas Group

Republic Natural
best

liked

in

issue

was

tha

compara¬

natural

favored

recently

tively

Gas
the

Two funds made initial

gas group.

one

increases

were

three

to

Purchases
The

Merchandising

Stocks

portfolio holdings.
totaled
11,100 shares;

liquidation

was

in

The two leading favorites in the

merchandising

group

were

Stores and Marshall Field

Allied

as

dur¬

ing the preceding September quar¬
ter.

Ten managements

purchased

total of 25,000 shares of Allied
with only one portfolio elimina¬
a

tion

of

a

block

of

shares.
trusts acquired 17,-

Half

as many
400 shares of Field.

of

Rails' Purchases Continued

As

in

lantic

totaling

offsetting

concentrated selling in any
issue of this industry.

was

portfolio decrease.

Indiana and At¬

that in purchasing or maintaining
at this time a preponderance of

no

instance there

split-up. Imperial Oil

by two trusts and the

Selling

well

6,500

Dome of 300 shares.

cific Coal

"It would appear from the above' Standard

too

three

commitments and there

total of 12,000 shares,
represented a com¬

managements

number acquired Texas Pa¬
and Oil.

same

a

sold

former

too, three managements

two

not

trusts

bought 20,000 shares of Honolulu
Oil .along with
the new
shares
which

in

plete portfolio elimination.
Two
small purchases totaled 700 shares,
Dome Mines and Homestake were

small block of 300
Creole. In
addition to
the stock of
Cities

creases

acceptance

in¬

shares.
5,500

was no

of which

one

a

tion, there

top

added

Crucible Steel made its
initial bow in two portfolios, and

waning found

been

20,000

also

Wheeling.

America, the buy¬ purchases
had

its

disposed of

acquired by three
managements. Only sale was that

Service received

which

since

the June quarter of 1950, was now
the least popular issue in the nonferrous group.
Six managements

tinent Pete, 11,500 shares of Rich¬
field and 6,300
Signal Oil and Gas
"A" were each
of

of

ever

of Creole

exports.

securities, the investor is

crease

addition

in

portfolio

one

of

new

commitments. There were no
the
sales of Sinclair and
only one in
may
the California issue.
28,600 shares

and

made

were

Grant

were

1,000

In this latter
also

one

lone

38,700 shares

bought

four

by

funds but two sales totaled 29,000.
Also finding acceptance in three

portfolios

was

shares of which

chased
to

the

was

by

two

Gimbel,

were

29,200
initially pur¬

trusts

and

added

holdings of another; there

chases
two

Holdings

absent.

Natural Gas also in¬

Northern

creased by

5,850 shares. Four pur¬
partially offset by

were

sales

of

Three

8,500.

man¬

agements each showed interest in
Columbia Gas and Southern Pro¬
duction Co.

16,000 shares of the

and

former

of the
Oklahoma
Natural Gas was
purchased by
two other companies. In addition
to increases in several portfolios
resulting from stock dividends,
latter

43,000

were

shares

bought.

exercise

of rights, twa
acquired through
outright purchase shares of Mis¬
sissippi River Fuel Corp., Ten¬
and

the

funds

Gas

nessee

Western
issue

each

in

Transmission

Natural

which

andt

The

only

bearishness

pre¬

Gas.

liquidation in this issue. dominated was Peoples Gas Light
Two managements each liked In¬ and
panies sold a total of 11,400 shares
Coke, 3,100 shares of which
The same roads, also, it is to be
of the Indiana stock and a like
terstate Department Stores, Mer¬ were sold
by four trusts.
New Additions
v;
number disposed of 2,700 shares noted,: maintained their relative cantile Stores and Penney; bear¬
Although buyers favored tha
positions as top favorites of the ish
Issues added to holdings during of Atlantic. In each
sentiment was absent in all
issue two of
trusts.
machinery and industrial equip¬
Thus,
Southern
Pacific three of these stocks.
the quarter which were formerly the
sales
represented
Safeway
complete
ment
manufacturers,
purchases
again headed the list, ten funds
strangers to trust portfolios in¬ portfolio eliminations.
Gulf Oil
shares
were
acquired
by
two were not concentrated to
any
purchasing a total of 39,600 shares, trusts in addition
clude the following: Smith and and
to increases re¬
Phillips were each lightened
three of which represented new
great extent on particular issues.
Wesson by the two Axe-Houghton in five
sulting from the exercise of rights. The
portfolios; 14,700 shares of
favorite was Combustion En¬
commitments. Sales by six com¬
funds; Webster-Chicago Corp. by the former and 18,700 of
Sellers had a slight edge
over
Phillips
Axe-Houghton, Inc.; International were sold. Three of the sales in panies amounted to 7,200 shares. buyers in Montgomery Ward, 4,400 gineering-Superheater, three com¬
Packers, Ltd. by Commonwealth the latter issue removed the stock Atchison was once again second shares being decreased in six port¬ panies making initial commit¬
ments and four others adding ta
favorite as eight managements in¬
Investment;
Motorola
also
folios.
In
by entirely from portfolio holdings.
Sears, liquidation in
portfolio holdings a total of 7,100
creased holdings by 9,350 shares;
Commonwealth as well as by State Also
four portfolios was offset by one
liquidated
was
Louisiana
one small sale of a block of 200
Street Investment Corp.; General Land &
Continued on page 23
lone purchase of a block of 100
Exploration, 27,500 shares was the
only concession made to
Time Corp. by National Securities, of which were
disposed of by four
the bears. Six funds added 30,600
Income series; Anderson, Clayton
managements.
Mission Develop¬
1
shares of Illinois Central and a
and Co. by the Mutual Investment
ment
and
Humble
were
each
like number bought 5,900 Rock Is¬
Fund; H. R. MacMillan Export Co., lightened by two funds.
land.
In
each instance two
of
Ltd. "B,"
Kerr-McGee Oil In¬
these additions represented initial
Metals Favored
dustries, and Edison Oil by Leh¬
; ^
portfolio commitments. However,
man
Corp.; Compagnie Generale
International Nickel and Phelps
there were four sales of Rock Is¬
D'Automobile et D'Aviation au
Dodge were twin favorites among
land, contrasting with only two of
Congo and T'sumeb Corp.,- Ltd. by the nonferrous
metals, eight man¬ Illinois Central. Canadian Pacific,
United States and International
agements adding 28,600 shares of Pennsylvania and Southern were
Securities, and Pittsburgh Metal¬ Nickel and 21,100 shares of the
each liked by five trusts, but there
lurgical, and Tishman Realty and latter issue. One-half of the addi¬
were
no
offsetting sales of the
Construction by Overseas Securi¬
tions in Phelps Dodge represented
Canadian carrier in contrast with
ties.
new
commitments.
Selling was three of Pennsylvania and two of

facing

more

than

a

com¬

nounced in the

minor hazard/'

no

September period.

'

Pure

Oil

petroleum
ments

was

feature

a

nine

group,

purchasing

a

sale

of

block

a

the

total of 29,300

shares, three of which
commitments; there

of

manage¬

made

was one

of

2Q0.

new

small

In

the

previous
quarter Pure Oil had
been the second most
popular is¬

sue, but total number of shares
purchased was more than twice

also

fairly heavy in Nickel, four the Southern. Two new portfolio
disposing of over 24,000 additions were made in Chesa¬

LEXINGTON

funds

shares.

Kennecott

was

second

in

peake and Ohio, and one increase
a block already held; a lone sale

popularity, having switched its
previous quarter's position in the
group

as

of

of

top favorite with Inter¬

these

national Nickel which at that time

Louisville

had ranked second. Six trusts pur¬

chased

total

of

TRUST FUND

contrasted with
three purchases.
Erie and
shares

6,000

&

Nashville

each liked by a

were

also

couple of manage¬

shares, ments but opinion was divided on
two making initial commitments.
Great Northern as seven portfolio
that which it had been
currently. One block of 2,500 shares was additions were offset by six de¬
Standard of New Jersey also vied
disposed of by another manage¬ creases.

for first place in additions
of this

group,

ment.

a

10,400

In addition to

a

25%

stock

Steels Favored
melon, six companies added to
crease in this issue resulted
from their holdings of St. Joseph Lead.
The two industry leaders in the
a
stock
distribution
made
by Offsetting were four sales totaling steel business were again the top
Standard of Indiana.
Actually, 12 4,000 shares. Pittsburgh Consoli¬ favorites among investment com¬
increases occurred
independent of dation Coal, a relatively recent pany purchasers as during the
the stock
melon, but many of newcomer to trust portfolios, was
previous quarter of 1950. But, al¬

these

in

were

round
as

although most of

out

small

the

also

agements

in¬

amounts

again liked by four managements though approximately the same
as
during the previous quarter. 'number of managements showed
shares, their interest in these industrial
Vacuum Purchases totaled 5,300
of which
represented new j giants, total volume of purchases
seven man¬ half

holdings
Socony

dividends.

was

the

well-liked,
purchasing

to

received

>

additions; there were two sales. declined somewhat. Eleven trusts
managements each added 'bought 29,000 shares of Bethle¬
sales amounted to
7,500 shares. Aluminium, Ltd., Anaconda Min¬ hem, only one of which repre¬
0.011 was the third most pop¬ ing and Mining Corp. of Canada. sented an initial commitment.
ular issue in the
group, six trusts Purchases of the Aluminium stock Four offsetting sales equaled 6,000
adding a total of 27,700 shares to totaled 7,900 shares and of Ana¬ ; shares. United States Steel was a
portfolios; there were no sales. conda 2,900 shares, while additions new addition to two portfolios
Shell, the most sought-after issue to the Canadian issue equaled 3,300 and was ! increased among the

65,200

shares.

total

a

Three

of

off-setting

<

Three

,

Prospectus

may

be obtained from

the Fund's New York

r

holdings of five others. Total pur¬
chases of 68,200 contrasted with

equaling

sales

two

2,800.

or
—morf
*««•%

Seven

managements also acquired Armand there was no liquidation.

Mutual Investment Funds

•

Office

co

Prospectus

on request

from

Allegheny, Jones -and Laughlin
Republic were each well liked

and

your

by

There

INVESTMENT DEALER

and
t

the

or

axe-houghton

republic

were

two

companies.

sales

of

Jones

Laughlin totaling 4,300 shares,

but

otherwise

the

selling

fund,

AXE SECURITIES CORPORATION
Avenue, New York 19, N. Y.




inc.

negligible.

In

stock resulting

'there

ings

were

of

addition

to

Ira Haupt & Co.
■*ry

new

111-Broadway, New York 6, N. Y.

from the split-up,

six increases to hold¬

Youngstown

Sheet

*

Exchange, New York Curb Exchange
and other principal exchanges

Members New York Stock

was

investors

funds

730 Fifth

investment

four

and

Tube, three of which represented

i

■

V-

*«

(734) I

Continued

The Commercial and

from

25

page

Trasts Continne
There

block of 300.
1

"

•>

•«

-

was

sale

one

of

Link Belt also was
'-

1-

-

well

liked, three purchases
amounting to 3,600 shares, two of
which were new acquisitions. Two
managements bought 1,200 shares
of Chicago Pneumatic Tool and
the

number

same

acquired 2,700

Utilities

also

portfolios,

added

was

although

-•

li--1

£

increase resulted from
tion

made

Share.

—

five, tional

of

this

/--I

distribu¬

Bond

Power

Gypsum. The favorite in
this group was General Portland

J.'.UIU..

_

a

by Electric

Utah

to

part

and

commitments.

block of 100

funds

each

One lone

liquidated. Four

was

added

holdings of

10

American Viscose and Pacific Mills

along with stock received through
dividend distributions; seiiing was

comparatively

light

in

these

is¬

Shares of industrial Rayon

sues.

acquired
chases

through

also

outright

swelled

the

pur¬

increase

shares of Florida Power and

Light.

trusts

Building Group

American Radiator

ing of 67,300 shares.

re¬

garded

as

creased

holdings by 47,900 shares.

three

companies

in¬

A block of 10,000 was sold.
Lowenstein was the
only issue of the
group in which sellers predomi¬

nated,

two

ing of

funds

completely

shares

from

purchases

eliminated

portfolios.

of

2,400

by

bearish

along
tion.

a

sold.

out

each

motors, both General
Chrysler were sold.

Among
Motors

were

.

stimulated

husiness

were

the

by

war,

.

,,

and

Faring

Motors

decreased

was

portfolios

nine

in

eliminated

and

the

stock

ments also

en¬

Ss

Three

Pittsburgh Plate
Glass, Armstrong Cork and Sherpurchase

The only
a
block

was

Armstrong.

each

total

a

of

of 35,200

of Chrysler, and here, too,

was

only

purchase of

one

a

Z,linn
Avmtion

American

of which

Among
Warner was

_

iRfiOO
18 600

in

'highlighted

st■

the

Brass, Holland Furnace

more

and

Na-

in

of

-Sold-

2(1)

two

2

of

wherein

1

500

None

Firestone.

None

the

American.

3ni?gements sold
shares of

a total tof

Edison,

two

of

frnmpl*ute-ly portfolios. Two
their eliminatlllg the

-fon P^rchases °f 8-000 shares.
shares of

79
79,300

Kentucky Utili¬

were

sold

folios, half

of

out

of

which

four

port¬

resulted

in

2lde eliminations; there were
iarh sold shares of American Teleach cni^k' Three managements
and

llinois

Telegraph,

Public

Central

Service,

?r'r,0f,Colorad°.

Public

Publi< Serv-

Indlana. St. Joseph Light
Povvw WTha"d Wisconsin Electric
r>

fowei. There

were decreases in

FZrrn0li0S each °f holdings

fee

n

EIaZriCwP0t0maC

North

None

1

American

Aviation-

American Overseas

Boeing Airplane

27,000

Eastern Airlines

—

Pan American World

None

Sperry

Corp.

20,850
2,000
22,400
5,500

L

None

3(1)

Largest

Son/hP

Southern

concentrated

Airways—

® group occurred in the
Company,

a

total

in-

fromef0f 117,300 shares resulted

♦l?H
L new Purchases and
♦ill?6 p?rtf°Iio additions. Parfolin*
SaleS ln two portbest likpH ?
,7°° Middle South
Shares- Next
Was
♦

;

?lx managements acquir-

total of 13,400 shares.
a decrease
in the

2(1)

Coca

3

2(1)

1

Building Construction
3

1,000
6,000
8,700
32,900
3,100
1,474
36,600

2

4(1)
7

3(2)
2

7(1)
3

None

Bucyrus Erie

3(3)

National

___

700

Square

18,000

Electric

59,700

American

Express 12

1,260

2(2)
2

None

•

105,000

Marine

700

1

Armstrong Cork

None

None

None

Holland Furnace
.Mueller Brass

National

None

Pittsburgh Platg Glass

-Nones

.■*

300

Gypstfm

1

None

None

Shetwin Williams
United States

1(1)

3(2)

1

None

1

None

None

2(1)

13,300

18,865

3(1)
5(2)

6(3)

Dow

>

1

1

None

2,152
5,000
6,000

Solvents
Chemical £

13,725

None

None

None

1,100

3(2).

Mead Johnson
National

8,600
13,200
28,200
14,500
2,900

Biscuit

Standard

None

___-._1.--jZ-

Brands

;

,j

Wrigley

1,200
7,100

Chicago Pneumatic
Combustion

3(3)
5(4)
3(1)

3(2)

Tool.j___

None

None

None

•Link

2,700

Belt

National

1

300

— ——

None

-

Engineering-Super¬

heater

r

None
None

Acme

None.
None?

'

Bullard

Co.

2

900

Metals and Mining:

Works--•American Cyanamid
du Pont
Hercules
1

Powder

National Cylinder Gas

Newport Industries
Union

Carbide

—

None

None

1(1)

3,300

.

-—

3(1)
None

1,500

2,000
10,500

None

None

1,800'
28,600
10,400
1,300
3,300
21,100
5,300
23,675
1,400
2,900

Climax Molybdenum

None

None

3(1)

None

Rohm and Haas 8_
Victor Chemical

American Metal Co.15
Anaconda Copper

2(1)
8(1)

9,015

1,000

7,900

1,400
2,900

5(1)
4

None

Internat'l Minerals & Chemical7
Monsanto Chemical

None

None

General Foods

2,000

3,600

None

None

—

— -

100

2

5,300

None

3(2)
2(1)

7(4)

None

Eastman, Kodak 6
Freeport Sulphur
Heyden Chemical

39,200

4

Fruit

3(2)

Commercial

1,200
2,100
30,000

2(1)

3(2)

3(1)

2,800
15,423

13

48,900

Machinery and Industrial Equipment:
7(3)

"3,600

——

4(2)

2(1)
4(2)

200

2(1)
2

9(5)

4,400

7,400
Corn Products
Refining.6-200

2(1)
3(1)
3(1)

5(5)"

16,100

—_

American Chicle

200

3(1)

17,300

Gypsum~~—

United

None

2(1)

8(4)

12,000
500

1(1)

~2,700

---»

None

Food Products:

16,000

None

None

Tri-Continental

2,500

*

None

2(2)

7,000

1 vZ;

None

29,400

Commercial Credit

Kl)

67,300
3,500

.

None

None

4,500

None

None

__—

Amerex Holding Corp.12
C.I.T. Financial Corp

11,500

None

6,500
-

None

—

4(3)

None*

400

Midland

Phoenix Insurance

None

None;

None

Manufacturers Trust14

8,800

Ruberoid 4

8(*M

None

2,975

None

Weyerhaeuser Timber2
American Radiator

6(1) :
4(1)'

10,300

"D"

Westinghouse

1

12,700
15,300

—

3

1,500

-

None

1,600

—

2

4(3)
2(1)

None

Lead

2(1)
6(5)

None

Philco li

...General Electric

American Research & Develop.13
Fireman's Fund10

2(1)

None

-—

19,500

Motorola

6,335

4(1)

General Portland Cement
Masonite 2

None;

26,200

—

Products

2

6(1)

500

None

None

3(1)

None

Seating 3

2(2)

None

2(2)

3(1)

None

______

None

Financial, Banking and Insurance:

and Equipment:

American

2,400
4,100

None

2

9,600
52,275

6,200
;

3,400

Cola

1

6(2)
2(2)
3(1)
8(4)

4(2)
li*

4(4)

2(1).

5(2)

2(1)

3,900

4

2

700

854

2

1(1)

300

2(1)

None

None

4

None

None

7,500

,

2,400

Laboratories
Home

.

6(1)

None

Robbins____

2(2)

15,600

There

Texas

20,600

1

holdings of

two trusts of
4,300 shares.




3

17,600
United

and

1

Electrical Equipment:

2(2)
8(1)

Beverages:

3(2)

American

2,000

—.

6,800
None

13

purchas-

None

12(3)

None

Aijrlines

None

None

Trusts

100

—

Smith, Kline & French 19
Abbott

6(1)

None

2

Mohawk Power.

was

_

McKesson

None

3(1)
4(1)

Chemicals:

jwS. kSSZJZZ
Niagara

WJ
g a

Motor Products

Glass

900

9,000

None

6(3)

4,400

!

Libbey-Owens-Ford

18,600

No. of.

Shares

Continental Can

None

6(1)

24,600
45,300
2,600
2,600

—

—

Motors2

from

American, sales totaling 41400
shares.
Partially offsetting were

in!)

3(1)

No.of

Owens Illinois Glass-.

1,325

2

Aviation:

two old

?rmCt«aiS-lS t0taled 4,500 shares- Six
trusts likewise
disposed of North

ties

Manufacturing Co

19,400

2

None

5,600
35,200

—-

None

and

.

-Sold-

>

'fy.■

..

:

Drug Products:
2(1)
5,000
Bristol-Myers
11(2)
12,695
Colgate-Palmolive-Peet9

1(1)

None

Electric Auto-Lite

None

None

?lidated Edison of
North

4,000

Smith Corp.
Warner *.

General

None

None

tehrcent7ted
? the period, were

Eaton

149,800

others

occurred

None

19

Company

Borg
Chrysler

100

None

^Om

Least popular issues in the util¬

issue
issue

150

1

com-

7,800, offset in
part by two sales of 1,500.

15 7no
15,700

None

A. O.

totaled

nJW vSV
York

None

Budd

initial

New

Minneapolis-Moline

7,800

5,500

these

3

2(1)

17,000

disposed

3(1)

3,100

3(3)

nnSehmJnating the St0ck
Two funds made

group,

V

i

1

500

—

Caterpillar Tractor

2(1)

portfolios.

ity

4,700

six
trusts
shares.
Half as

division,

of

International Paper
Bag and Paper were

Union

Containers and Glass:

J. I. Case i

in

commitments
and
added to
holdings

and

—Bought—

Auto and Auto Parts:

balanced.

Purchases

16,850

4(4)

although total

of

paper stocks.

which

Agricultural Equipment:

volume in shares on either
side of
the market was far from

two

....

also mixed on the

Brands, »

—Bought—

vester

managements

.

was

(September 29—December 31, 1950)
buyers exceed sellers—or sellers exceed buyers—by two or more management groups. Issues which
managements sold than bought are in italics. Numerals in parentheses indicate number of
managements making entirely
new
purchases or completely eliminating the stock from their portfolios.

Transactions

8

shares,

National

Changes in Common Stock Holdings of 44 Investment Management Groups

Minneapolis Moline. Managements
were fairly well divided
on Har¬

2,800

Gas

Powder,

and

two

No. of

6,500

Industries

Opinion

liqui-

by

t

Cyl^aer

food

Shares

acquiring

„

Mueller

were

Trusts

rubber

as

Cyanamid,

:N

five-portfolios of 28,500

No. of

favorite

received

Union Carbide, Hercules

shares
shares

acquired by three

were

No. of

the

stock

new

j

„

companies.

4,100

by

t0

small block of 100 shares.

offsetting parts makers, Borg

Lightened

managements

there

sold

group.

-

Trusts

the

to

from

Shares

was

..

dividends by additional purchases
port- in the market.
Freeport

Shares

Goodyear

added

and United Air Lines.
little better were United

Airways

Trusts

Deere

£

'

No. of

and

in

compietely eliminating the
wa,
portfolios; there was
portfoliQ holdlngs>
purchases
offsetting purchase
totaling
shares.
Also sold by two .funds 39,200 shares; there were
three
in
much
each
were
American
Overseas sales
lighterk volume.
Dow and International
Airlines, Pan American
World
Minerals
from

No. of

made

opinion

well bal¬
the period under
review
HT
it.
ACW«
Monsanto was the
anced

favorite, three
making new
issue
commitments
one
and three others adding to
o

No. of

were

overall

funds

in Caterpillar Tractor
totaling 4,700 shares and half as

purchases

sol<Lpn balance

appeared to be fairly

Four,

onH manufacturing concerns.
and manufacturing concerns

•

While

both the air transport

focused

sold

win Williams.

was

made

many

on
Balance
during the previous
Septemper quarter, chemicals were

-

in spite of gross

Also unpopular,

commitments

were

Chemicals Sold

.

latter

effort

v,

numbe^ot

stock distribu¬

initial

.

thZ

by

tflA
the

dispos¬

block of 500 shares

Four

in
in

buyers, three managements
talking initial commitments in the

i

sentiment

cleaned

four

the 10%

.0

with

.

and Mead
JohmAn

lightened

„

,.

funds

managements
with other additions result¬

ing from

a

-

Aircraft, lightened in six
Sulphur,
folios; Boeing Airplane, sold by Victor Chem^caLand Heyden were
Qnorrv
also liked.
DuPont was
three others.
Only one lot of three managements and Sperry,
lightened
was United States
three portfolios and
Gypsum, seven 1,400 shares was purchased, the unpopular with a like
eliminated
companies selling a total of 13,300 remaining additions resulting trust people.
^ tw0 others
Als0 sold Qn
Only
shares.
At
least
half
of
these from the split-up.
North' balance were American
Six managewhich

Among agricultural equipment
makers, 10,000 shares of Case were
acquired

found

Budd

and

A

each

15

The only, well-liked *2
Prniin
was
group \xrac TT«U_j'
United Fruit
12,000 shares being
acquired
by
four trusts.

Smith
A. O. Smith
little favor

'

^

Ruberoid

Motors Sold

the

Three

shares

■n„„j..rt+ei

Erie.. trusts
liquidated a total of 22,400
made
—•
* •
t
^
to.
shares of Eastern Air Lines, three

Weyerhaeuser Timber, along

and

negligible in comparison with the
liquidation.
Next
issue
upon

1,200 shares.

managements

were

Masonite,

of

—l.

Thursday, February

were .'

Bucyrus

Half of these

trusts

particularly well

additions

holdings

the most

was

United

was

o

increases
resulting
from
heavily sold issue in the building with
group, eight managements dispos¬ stock dividends and split-ups.

resulting
turers

purchased

Some
The

tirely from their holdings.

from stock dividends.
Merchants and Manufac¬

n rf

half

Acme. Two sellers had
the upper edge in Bullard, but in

were new

W

o

one

modest volume.

Outstanding favorite among the
was
Burlington
Mills
seven managements
purchasing a
total of 81,300 shares; four of these

'.nsvviAvxnmiAn

£„

Light
portfolio
elimination of a
purchased by four companies block of 1,500.
Three funds also
as many acquired
14,000 bought National Lead while two

was

and

National

textiles

J

Cement, four companies adding a
total of 8,700 shares; there was

and

-.1

and Motor Products;

4 *

Glass- funds.

Libbey-Owens-Ford

ing,

Switching to War Industries Stocks
a

Manufactur-

Eaton

of

.

General Foods

managements. Holdings were also
decreased

shares.

Financial Chronicle

.

J-

Aluminium, Ltd.

International Nickel ____iZ
,

Kennecott Copper
Magma Copper
Mining Corp. of Canadax—
Phelps Dodge

24,600

f

4(1) '
"

V''

2,500

1

None

.♦

None

None

Coal__

None

3,000

________________

Pittsburgh Consolidation
St. Joseph:Lead18

None

None

-—________

.

1

8,200

___—___j_—__

2(1)'

8,400
-

'4,000

2

:

4(1)

United Electric Coal:_______

None

None

United States Foil <4B"___
Aluminum Co. of America

None

None

Dome Mines

Homestake Mining
Pittston

Co.

12,000
"

6(1)

6,500

3(1)

4,400

3(1)

700

2(1)

•

Number 4986

Volume 173

,

.

The Commercial and
Financial Chronicle

„

Changes in Common Stock Holdings of 44 Investment
Management Groups

'

—Bought—
'No. of

^Trusts

Sold

No. of

.Shares

No. of

No. of

Shares

No. of

Trusts

Shares

No. of

16,000

Columbia

9

16,170

Mississippi

Gas

4(1)

5,850

Northern

2

2,100

Oklahoma

i,.

5,000

Fuel 8

9,600
8,500

2(1)
2(1)

None

None

None

None

2,000.

1

11,100

Republic

3(2)

43,000

6

19,191

3

16,623

Southern Production
Co—
Tennessee Gas Transmission 18;
Western Natural. Gas 22~Peoples Gas Light and Coke...

None'

5(1)

Gas—,

Gas.*——.

Natural.

5(2)

None':

1

Gas_——

Natural

Natural

Office Equipment:
*12,935.

:10

862V2

3

,

1,100

2

t

v

,

National

Cash

15,000

Remington

,

Register

10(1)

25,000

Allied Stores

3(2)

29,200

Gimbel
W.

.

1(1)
None

4

38,700

4

2

1,500

\

'5(1)

^

5

.•

None

Burroughs Adding Machine....

None

International Business Machines

None

12,500

2(2)

1,800

2

;

3,200

4(3)

16,100

Abitibi Power

and

Paper

;

4

1

■

Time, Inc.

800

-

2

3(1)

6,800

American

9,755

Cities Service9. 2-—
Creole Petroleum..-.

28,600

2

"28,000
3,600

'

3(2)
6(1)

;

Ohio

Plymouth

11,500

Oil19

Oil

6,500

Goodyear

Oil

(Del.)

Shell Oil

Signal Oil and Gas "A"

65,200

Socony Vacuum

Oil

16,500

Standard

15(4)

22,212

Standard Oil of New
Jersey 20—
Standard Oil of Ohio 19

5,528

3,700

California

3(1)
None

Gulf Oil

1(1)

Humble

1,200

None

None

3

j.-*--

Louisiana Land & Exploration..
Mission Development Co.j—L—

None

None

,

i-—

Oil

Phillips Petroleum
Standard Oil of Indiana_

1,600

None

17(3)

Cliffs

None

Crucible

2,200

Sharon Steel 28
United States Steel

Steel

Wheeling Steel
Youngstown Sheet

8,130

6(1)
3

None

None

15(1)
7(4)
7(2)
5(2)

V

1

3(1)

2(1)

4(3)

None

3

V4,700
14,700
6,900

6(2).

None

t

New

62,700

2

>

Middle South

Electric

7(4) :•* 117,300

'

10,250
47,900

1

4(1)
1

•
.

None '
2

50

None

;

4,500,.

None

JNone

None

Nonet

..

3

Niagara Hudson

8,000
1

200

1

j.

None*

None

None

200

None

3,000

1

3(2)

•

None

None

Minnesota

v

6(2)1

3,600

None

_

Totals—All

4(2)

-

8

Broadcasting "B"

Loew's

27,400

3(2)

In

part

20%

in

stock

7,400

Canadian

1,700

Chesapeake

5,900

Pacific

27,700

2(1)

12,000

Erie

6(2)

30,600

Illinois Central

2(2)
5(3)

10(3)

,

-

1,400

part as- result

—

Louisville

and

21

Nashville—

Southern Pacific

6,100

14

10,400

.Southern
Union




—

——————

———

Pacific

—

its

FRANCISCO,
Kirchen

is

Calif.—
affil¬

now

Witherspoon Adds
(Special to The Financial Chronicle)

A.

ANGELES, Calif.—Herbert

Ecclestone

&

is

now

with

Company,

With¬

Inc.,

of

10%

as

215

None

shares received

Stock

1,912 shares received

Represents in p?rt

stock

split

basis of

on

as

two

in

2%%

4(1)

1

None

None
1

18,800
None

632

stock dividend.

one

South Spring Street.

With

old.

19,900 shares Amerex

13

Purchased

14

8

1,000 shares represent

1/3%

of

exchanged

1

split; 4,275

shares

for 59,700 shares of American

distributed

Express.

5%

stock

In

19

200

20

1,963

basis

1

25%

stock

result

as

received

In

None

None

24

Received in part

3

25

2,250 shares received

7,200

6(1)

3,100

2

of

2%

Jersey

Niagara Hudson exchanged

for

largely thru rights;

results

NOTE—This

from
as

survey

Schirmer, Atherton &

Co., 144 Vaughan Street.

He

was

formerly with Baldwin, White &

With Davis & Skaggs

50%

SAN

stock dividend.

dividend
for each

from
75

of

basis,

one

new

Standard

Oil

of

Indiana;

Indiana.

share for each

of
ten

old

Electric

Bond

63

investment

Calif.—

Richardson

has

been

Co., Ill Sutter Street, members
the

San

held.

Francisco

Stock

Ex¬

change.
and

Share.

exchange for 3,000 shares of Appleton

covers

C.

added to the staff of Davis, Skaggs
&

dividend declaration in stock.
from

FRANCISCO,

William

Niagara Mohawk.

stock distribution
in

(Special to The Financial Chronicle)

Co.

companies,' but purchasers or
trusts
sponsored by one management group are treated as a unit.
For example, the several trusts
sponsored by Calvin Bullock are considered
as
having the weight of one manager.
Overseas Securities is included in
addition to the companies listed in the
companion table.
sales

\

asso¬

ciated with

distribution.

stock

as

New

Purchased
part

Chronicle)

Me.—F.

Ber¬

5% stock dividend.

as

share of

Schirmer, Atherton
W.

8,000 shares result from stock split-up.

shares

Co.,

dividend.

Received in whole

shares added

&

Co. and A. C. Allyn & Co.

stock dividend.

as

Witter

(Special to The Financial

through rights.

received

Dean

nard Hardwicke has become

for

2

17

part

of

PORTLAND,

41,800 shares received as result
as
5% stock dividend.

22

None

ANGELES, Calif. —Wil¬
Wheeler, III has joined

staff

stock dividend.

11

4(1)
None

W.

the

stock dividend.

23

None

LOS
liam

-

;v

5% stock dividend.-

a

2

8,500

Jobs Witter Staff
(Special to The Financial Chronicle)

split-up.

shares for

new

4%

100%

2(1)
2(1)

West Seventh Street.

dividend.

10%. stock dividend.

as

7

None

63

Major portion of increase results from 10% stock dividend.

•:

200

21

3,727l/z

shares received

3,200

————

39,600
12,900

Pacific

———————

Pennsylvania

5(2)

&

celebrating

now

F,

erspoon

984

21

39,300

6(1)

7

6

k

6,000

—-

Ohio

and

Chicago, Rock Island

'

•

29

5

4,200;

57,500

Santa Fe__

is

which

Bailey & Davidson, 155
Sansome Street, members of the
San Francisco Stock
Exchange. He
was
formerly wth McNear & Wil-

20

4

18

3(2)

6(2)

5.
9

dividend.

15

5(1)

.

7

21

stock received

12

Atchison, Topeka &

Street,

anniversary.

SAN

10

*

16

9,350

Boston

Co., Inc.,
is under

Totals

4

12,500

Twentieth Century-Fox

&

(Special to The Financial Chronicle)

5(4)
2

Matched

:

,

Railroads:
3(2)

rington,
25th

LOS

Companies--

represents

1,2 .Increased
3

8,500
——

The

iated with

—3

10

'

2

57,500
2,600

Sold

10

9

None

None

.

5(2)
3(1)

FOOTNOTES
1

7,400

Columbia

—

Knox

lard.

6(2)

12,300

Decca Records

Mass.
D.

the management of Frank T. Har¬

State

2(2)'

of Colorado

None

x

of H.

4(2)

Companies

Bought

Closed-End Companies

23,400

Wisconsin Power and Light

25 Years in Boston

4(1)

2,000
2,700

Mining & Mfg.

Balanced Funds
stock Funds

8

,

the

27

2(2)

79,300

.

also

of

H. D. Knox Co.

2(1)

8,700
10,000

—

k

65,500

Wisconsin Electric Power„——

has

staff

With Bailey & Davidson

\

'1,200

Power.—.

the

1

1,200

Greyhound

•

Open-End Companies:

Radio and Amusement:

3(1)

2

to

1

1,100
10,000

Balance Purchases and Sales Portfolios
Securities 63 Investment

•

Joseph Light and

Gadbois

1

—

Tobacco

None

41,400

St.

A.

added

Charles

2

:

3(1)

Potomac Electric
Power-—----Public Service.', Co.

133
Mr.

firm.

400

SUMMARY

15,300

Power21

Co.,

formerly Vice-Presi¬
Maloney & Wells, Inc., of

Richard
been

1

Miscellaneous:

None

'

—

&

Boulevard.

was

2

None

,

;

,3^00

Public Service Co.
of Indiana—

1,500

None

Reynolds

2

23,100

North American 1

None

1

Kentucky Utilities

Douglass

Wells

"

None'.

None*

.

Consolidated Edispn of N. ¥•-—
Empire District Electric Co.—

None

1,000

None

12,700
t

with

Robertson

ioo

Liggett and Myers
Philip Morris

500

1

2(1)

None

Central Illinois Public S.ervice—

ated

North

BOSTON,
American Tobacco

"

American Tell & Tel..

None

2

5,600

United Merchants &
Mfgrs.—M. Lowenstein & Sons—

700

•

None

None

Utah Power and
Light-—

7,800

1

1,400

office

1

4(2)

31,840

Texas Utilities 24——

2(1)

200

J. P. Stevens Co.25

None

None

6(2)

2(2)

System9 | None

5(2)41,750

None

2,800

& Tube—

(Special to The Financial Chronicle)

BEVERLY HILLS, Calif.—Wal¬
ter M. Wells has become associ¬

Tobaccos:

5(3)

/ 41,700

2

None
—

—

4

4,300

Southern»Co.

Wer-

Los Angeles.

5(1)

None

Utilities—

Markham,

2

15,600

Light

Niagara- Mohawk-Power 21—__
Oklahoma Gas & Electric 10—--

12,000

:

England

and

J.

Douglass S Company

2

500

17,800
American Viscose 2
81,300
Burlington Mills
11,879% Industrial Rayon9.
6,070
Pacific Mills 9

11,400

Power22———

Florida Power

6,150

4(2)
.

Consumers

14,000

None

4,300

dent of

1

13,400

.

None

Textiles:

Public Utilities:

2(1)

Edwin

Waller M. Walk Willi

4

2

3

(B)

1

None

——

6(1)

(A) Harold B. Smith, Pershing
Co., 120 Broadway, New York
5, N. Y.

None

6,000

Iron

None
-

200

Jones and Laughlin
Republic Steel

72,300

-.

27,500
13,500
18,700

—

Cleveland

68,200
5,500

r

3(1)'

.

None

———*

None

;

Edw. J. Markham

,

None

—

3,600

7(2)

.

iv

Bethlehem Steel

7,000,
4,500

10,252

Texas Pacific Coal and Oil——_
Atlantic Refining

5,500
1,200

i

12,877

—.

2(1)
u

None

<

7,500
3,400

——

29,000
20,000

; 3(1)

None

.

None

—

20,500
Allegheny Ludlum
7,100 V Armco Steel

4

None

:

of

None*

1,200

———

4(2)
5

3(2)

Harold B. Smith

theim & Co., 120 Broadway, New
York 5, N. Y.

,

4(2)

None

—

-3,300
36,600

None

200 .;
None *■

——

10,700

Oil

1

None

None

___——

5

Sinclair

4(2) v;

None

Oil

Seaboard

4(3)
7(3)
11(1)
.3(2)
2(2)

None

—

—

Richfield

600

<2

2

2,800

Firestone

None

—

———

3(2)
4(3)
7(1)

:

3(3)

&

7,800

6(2)

None

300

—

:

4(1)

1,200

4(2)

None

Oil

Pure

None

Oil .18'

Oil, Ltd.—-—
MidContinent Petroleum

29,300

2 '

7,100

6,500

3(1)

3,025

Imperial

2,200

9(3).
: 3(2)

>

Republics Corp._—_

Honolulu

11,300
27,700

h 2(1)

6(1)

Steels:

.15(1)
■< 3(1)
4 4(2)
V

2

4,400

Woolworth

Petroleum:
.

None

Rubber and Tires:

7(1)
2(1)

4,700

.

,

2,700

•

36,275
8,000

Union Bag and
Paper

None

None

Sears Roebuck

Non6

3,200

3,425
None

None
~

None

100

1

None

Ward

900

None

2,000

——-—

C.
Penney-—^
Safeway Stores22

Montgomery

2(1)

None

J.

1,700

None

29,000

——

Field

KD

None

Grant-

1

'

■*

T.

1

Paper and Printing:

2(1)

4,700

4

•

.

;

None

1,000

—

Mercantile Stores

800

4

1

None

_

None

—

Brothers

Marshall

4,200

2

6,6131/2

Corp.

Foundries

20.

page

2

10,090

Interstate Department Stores

17,400

2(1)

7,110

None

.

American Steel

3,100

Rand U

Underwood

1,300

version

angels appearing

Retail Trade:

'/

;

American Brake Shoe 6

None

None,

-

on

3,700

2(1)

♦

,

Trusts

of the two

Railroad Equipment:

System

River

No. of

Shares

Natural Gas:
3

Here's the 1951

Sold

No. of

' Trusts

Did You GUESS?

(Continued)

—Bought—

Geyer & Co. Adds
(Special to The Financial Chronicle)

of

SAN

FRANCISCO,

Richard

J.

npvpr

Cn.

&

Payne
Tnr\.

is

Calif.—

now

Rnss

with

Building.

28

The

(736)

Continued

from

Chronicle

ConiTnCTcidl (ind FificLucial

Mo^t

of

them

know

great many

a

sonallv

sociation

It was preceded

committee in charge

the

Members of

of arrangements were

brokers

Frank S. Green, Schirmer, Atherton & Co.; John J. D'Arcy,
F. L Putnam & Co., Inc.; Alexander W. Moore, J. Arthur Warner
& Co., Inc.; Wilfred B. Perham, Coburn & Middlebrook, Inc.;
Edward F. Powers, Hodgdon & Co.; T. Edmund Williams, Hooper-

man;

F.

Perrin,

Hines,

West

Winslow,

&

Inc.,

The small mvestor is probably the largest group
They thereby can follow the old
adage "Don't put all your eggs in
one
basket." In fact, the investment company has been called the

du Pont,

charge of ticket reservations, and Rodney M. Darling,
Homsey & Company, in charge of room reservations.
taken

Pictures

at

dinner

the

will

in the

appear

"Financial

SECURITY TRADERS ASSOCIATION

At the last

member

in early 1944 I was a

Naval occupying forces
that took the Marshall Islands In
0f

the

Pacific

the

the

from

Japanese.

several months

,0 work around the clock

the following officers were

recent years the then gradually as the war moved
individual and institu- further west, we had some free
time.

stantial buyers.

thousand

The

elected for the new year:

inexperienced
give him peace ot

young

a

on

men

person

business

own

of

true

also

city blocks

present

can

a

the

profession

or

First

you

their

about

worried

were

we

ob

tamjn ahuto™^
cZLn!es

toe

and

J;

Grunted and
i"re the market

American
ex

\s

there

not

are

.,h

un

there

and income risks

ZrnormX

time to
.

the

thereforZe e*.

may

exDansion

fh

J

mo

who participate d

P3'1 ®°®Pnas^!® "f
economy

ec°nomy

tew

a

morale
problem. We could keep them
completely wrapped up in busy enough during the day but
is

This

mind.

his

Free time for quite

tiny
investor coral island about the size of three

finds that they

for myself

°„u„ 1°

but

tional investors have become suo-

meeting of the Seattle Security Traders Association

aQft

^ out

we

For the first

However,, in

wealthy
SEATTLE

interesting one nevertheless

an

counsel." had

"Poor man's investment

Chronicle" of Feb. 22.

that some great financial mind in
Wall Street would come up with
Lehigh, but a plan of this type. There are four

not a college such as

Almost every

Who buvs them9

type of person.

in

was

Little did l realize at tne time

or

their

or

representatives.

Kimball, Inc.
Edward

investment does me every time I think about
branches
or it, that I was once a college president. I hasten to add that it was

investment bankers

Chair¬

Arthur C. Murphy, A. C. Allyn and Company, Incorporated,

I

truly astounded at the way
be purchased and sold in practi- true story. This is not my first money saved and compounded at
cally every city or town in the experience speaking to a college 6/o grew by leaps and bounds iq
United States, wherever there are group. It may suprise you, as it the later years,

Securities Traders As¬

held Feb. 9 at the Parker House.

was

5% and 6% would grow.

highest regard

by the usual luncheon for out-of-town guests.
v

investing.

in common stock

the

them 1 in

hold

and

elabo,

then invested it and compounded
his interest or his dividends.il
WOrked out a lot of figures showing how such compounding of interest or dividends at the rates of

As background for this I would 4%,
Investment company shares can like to tell you an interesting and was

BOSTON SECURITIES TRADERS ASSOCIATION
The 27th annual dinner of the Boston

are

gooT hoLst

by

run

cepted principles of systematic
\ investing — "compounding' and
citizens
I "dollar cost averaging"-to modof them per- erate some of the risks inherent

places,
excellent and
other

and

some

plans, showing how a
young
man
making $50 a week could
prosper if he saved $10 of it and

,

Francisco

San

out

rate

Investment in ! Mutual Funds

Notes

worked

had

I

NSTA

1951

fishing, then! was satisfied with
my evening's work.

17

page

Thursday, February, 15^

i»

.

a

so-

equity investment

ua?JS is known
"dollar:'cost averaging," which

as

securitySmarketee UmC 0 ev®"m® tlI"e/ maikets.
The island commander

study security
study

,

Elderly people who want to put

strict about

gambling and I well

their affairs in good order in an-

recall looking in on

ticipation of death find them use-

one

ful.

poker game

a

night with about six players

Institutions, such as colleges,
church
funds, employee retirement funds, and so on
are becoming
stockholders of mutual
funds in incieasing numbers. E\en

and twenty spectators,

the

will

his

for
Clyde

Berryman

Waldemar L. Stein

Clyde

Berryman,

Inc., Vice-President.
Lynch, Pierce, Fennen

Merrill

Stein, Bramhall & Stein, Treasurer.

Beane,

in

is

are

CITY

SECURITY TRADERS

ASSOCIATION

important to choose

for your

officers for 1951 of the Kansas City
Security Trad¬
(formerly the Bond Traders Club of Kansas City)
follows:

as

or

for

playing for money."

which

best suited

is

particular needs. Theie

college
island,

named

a
the

after

«Roi College—the first American
institution of higher learning in

occupied

is

May

Up

vourse

Wtten ofmanagement
lection of management.

Japanese

territory."
probably because of my white
bair, I was asked to be president
of

this

institution.'

It

guarantee of profit or of a
high return of divi-

any

continued

Their

dends.

value, of

course,

is

based upon the value of the secu-

rities
are

which

they own and these
subject to change as economic

conditions

each

are

person

altered.-

a

Finally,

purchase of

K. Sparks

Frank

North

Laurence B. Carroll

tions

in

and

all

in

purchase

of

Thele
inese

)

goods
gooas

Vice-President—Russell K. Sparks, Uhlmann & Latshaw,
Secretary—Frank North, Barrett, Fitch & Co.

:

Security Traders
Bowling League standings

Association

of Feb. 9

as

of

New

are

as

York

(STANY)
Won Lost
5
4

Goodman (Capt.), Casper,
Valentine, M. Meyer, H. Frankel
Donadio (Capt.), Demaye,

1
2

O'Connor, Whiting, Workmeister 4
2
Growney, Gronick, Rappa
4
2
Burian (Capt.), Manson,
King, Voccoli, G. Montanyne___
3
3
Krisam
(Capt.), Bradley, Montanyne, Weissman, Gannon_ 3
3
Serlen (Capt.), Gersteti, Gold, Krumholz, Young___
3
3
; Mewing (Capt.), Klein, Flanagan, Manney, Ghegan
3
3
iLeone (Capt.),
Krasowich, Nieman, Pollack, Gavin
3
3
Hunter (Capt.), Lytle,
Reid, Kruge, Swenson
2
4
H. Meyer (Capt.),
Smith, Farrell, A. Frankel, La Pato
1
5
Kumm (Capt.), Weseman,
Tiseh, Strauss, Jacobs___
1
5
Tom Greenberg (C. E.
Unterberg & Co.) finally broke out and
Kaiser,

,

three games to put them in first
place.

won

With Revel Miller

Joins Colburn

(Special to The Financial Chronicle)

LOS
ard

A.

with

ANGELES,
Miller

Revel

is

Miller

associated

&

Co.,

650

South
wuin

spring street,
Spring Street, members of
lie .Los Angeles Stock
Exchange,
:




*

•

-

SAN

•

That

is

the

advent

of

periodic

purchase plans for buying shares
in
investment companies
on
a
systematic monthly basis in small
or large amounts.
This is a most
excellent way for a young
person
to accumulate shares, or a nestegg

for later life.

In

fact

it

has

appealed to many groups, for example, teachers and military personnel

their
gram
on

anxious

fived

with

common

Although
common

to

supplement

income
an

pension proinvestment based

FRANCISCO,

been

tors in schools

and

an

stocks

them

guages.

was

I noticed that

lectures
order

i

not

lan-

of

his
to

one

how

and

asked

was

One

of

entitled „"How

was

meal

a

instruc-

teacher

a

neces-

_

to

give

iQnj

to

make

a

..

a

of
"Dollar Cost

spreading out the period of invest-

Fourth, and greatest of all, you
a
quarterly compounding of
common
stock dividends through
get

the reinvestment
the first

privilege. During

10 years

compounding is

important, and during the second
10

years

the possibilities stir the

imagination.
The

degree of financial success

particular plan is kept

of time the
in

operation- the level of the marat

ket

withdrawal.

time

the

of

of

share

This

method

tion

involves

accumulainvest-

continued

regular intervals regardlevels and is only
recommended
on
a '.long-term
ment at

iess

0f

price

basis for individuals

with the fi-

nancral ability to continue

invest-

regular
-

.

ii

inn£.

many

wasu"?ow.to get rich." This was
?. <?halle"gmf assignment and my
first inclination

I look upon these plans, many
provided at no *xtra cost beyond
that of buying the shares m the
ordiharv wav ' as the greatest con-

tribution Wall Street has

simply to tell

tp i,°v fur'h,f than th,at. Fortu- ing whether

made to

busy,

:„.Jl ooirorol
vcl-y
Cfitro

so

»

xnrxnlj-'c

I

was

able

purchases
was ao c purchases

4-4-

4^

.

.

_

r

•

of

to take out one

or making individual
of*the many different
ot the many mu» "

at the Particular time I these plans,

not very

was

nVUll-

g'^.f®vera! week's thought to types of investment funds avail
qkL?4
^CL
moreTI fought able, or whether you shou£d ^
.

a
a
T?1!?
^ur^d' individual stocks, or a cam
mP^e impressed I became with tion of both? That is wher
the virtues of comP°und interest, investment dealer or investment

+u

Incidentally, that was one of our
most heavily attended lectures,
but 1 have never had any doubt
£ba£ h was the title of the lecture
rather than the speaker that
brought them out.
I recommended, that
them

were

as

in their early
20's,

and my solution
sure one.

human

most of

was

to

they

set

30 years,
the slow but

I also advised them that

nature

being what it

many might start such

a

broker comes in. You discuss u
situation with him. Much win a pend on your particular circuinstances, your objectives, and s
*
Then, with this information,
will, like the doctor, presence *

security or securities for your p

ticular needs,

up

is,

,

.
""

""

""

'

V

,

-

/

four With Schwabacher
(special to the
QAM

tin

tpr

financial,chronicle)

AMPT^ro Calif.—Mar-

It
Br p' Sh

u

plan with

general

S

and

Garguilo,
Laurence

s^wrt.
Wim

Calif,

numbed

fixed

month.

each

intervals through
lecture periods of low-price leevls.

and the tltle o£ my assignment

esasw asrsa - «°<
afford

Frank J. Carter is associated with
R.
L. - Colburn

p^halld f

at

income.
would be well advised
investment
in a program for the next

may

sev-

colleges.

of

stocks for

an offset to loss of dollar
buying power, common stocks of
American corporations
owning

(Special to The Financial Chronicle)

Calif.—Rich-

now

a
comparatively
development which may
be of particular interest to you.

sarily be

Staff

you

wife, but on further the investing public in many years,
thought I decided to would have
How would you go about dead-

There has been

follows:

Greenberg (Capt.), Sullivan, Stein, Wechsler, Siegel

(Capt.),

sales

recent

TEAM

Bean

services
se vices,

Periodic Purchase Plans

ASSOCIATION OF NEW YORK

The

had

men

was

Treasurer—Laurence B. Carroll, Prescott,
Wright, Snider Co.

get

you

giving

}!lc,.]ads to solve the problem by
finding a rich

all

pec[us relatingSCto the^unds.

SECURITY TRADERS
'

are

franco-

President—Earl L. Combest,
Prugh, Combest & Land, Inc.

j

and
ana

seruritv

the

Bears.. We had

who

mu-

tual funds, ,iust as commissions
rharypd

the Chicago
eral

sales .charge Jove—in Spanish."

pays., a

when making

Russell

thus

% ?°llege'
even gT out obtainable from such a program
diplomas, and honorary degrees. wU1 vary from individual to m°ne C0UrSe W3S in publlC Speak" dividual but should largely deing and curlousl-v enough the in- pend on two factors—the length

structor in charge was a Marine
funds, while they offer Lieutenant who in private life
advantages, can not offer .was a professional footballer with

many

Combest

lower

are

better average than if you simply

quite

was

Mutual

Earl L.

shares

shares

it

and

mvest-

an

resDect

u

prices

rnore

"Oh,

officers organized

our

.

things

iZteess again3howtua? Lf,
earfful wfth
to
men"

,

when

In order 1° keep ou^ ?en some; ment.

of them

.

used

extremely valuable matches,

were

varie£y available and most
represent good diversifi-

new

Association

being

•

what usefully occupied, some ot
.

several

make

me

ment company

The

children

Buying Investment

,

Let

.

are

get fewer shares and

you

Averaging" gives no guarantee
sir," they said in chorus, "this that losses will never be shown,
just in fun," but I never saw especially during a.long declining
such serious application
to any market, but it is designed to modpoker game, and I am sure they erate risk of price fluctuation by

Funds

&

higher

no

market specu-

his

or

all intent,

"Boys, I hope you

I said,

not

are

clear at this point. First of all, it

Waldemar L.

ers

chips.

investment back-log.

own

Selectivitv

Secretary.

KANSAS

or

matches

with

buy them on occasion

wife

his

for

Homer J. Bateman, Pacific Northwest
Co., President.
Paul G. Johnson, Blyth & Co.

simpiy means that when prices

js

stockbroker

lator
Homer J. Bateman

was very

ocnwauaciiw

—•
Co.,
—

-

>

-

power

than fixed income invest-

even lf 1 were indirectly
"'
"

respon-

600

Market

Street,

members o

lew York and San
Company,
155 ments.
Montgomery Street. He was previThe objective of such plans is a later date, spending their win- &l0C15
ously with Lauterwasser & Co.
,also to make available certain ac- ters in Florida and +v.oi
previous:ly^ Witlh_the
•
•
•iers ip 4? lorida and their summers fornia National Bank.

Francisco

E?cha^?uSVh^rAn^lo-Cali-

•

•

.

,

"

"*

•

I

J

'

'

*

-

.

Number 4986

173

Volume

The Commercial and Financial Chronicle

.

Trust

Company of New York in

1929

revised
capitalizations

of

of

1931.

He

and

the

New

York

•

*

Hamilton

Helen

Woods,

director of the Public Liaison
Division of the Office of Infor¬
mation of the European Coopera¬

Administration, will be the

tion

dend of $800,000.

An addition of

1930

and

Buffalo

in

Muller

have

been

elected

State

Depart¬

ment approved

Raymond T. Andersen and Paul
J.

'■:<

York

tificate

As¬

sistant Treasurers of Bankers Trust

stock

Company

on Jan. 17 a cer¬
increase of the capital

of

Trust

of

announced

New

Feb. 8 by

on

it

York,

of

the

Lincoln

accounts

provide

$900,000

Rochester

S. Sloan

Jan.

on

17

of

'guest speaker at the dinner meet¬
ing of the Metropolitan New York
Group of the Association of Bank
*
*
Women
at the Hotel Warwick, the bank in 1945 upon discharge
65 West 54th Street, New York, from military service. Mr. Muller
R. L. Hockley, Vice-President
been
with
Bankers
Trust and
today (Feb. 15), at 6:30 p.m. Miss has
a
director of The
Davison
Dorcas Campbell, Assistant Vice- since 1930.
Chemical Corporation, was elected
*
❖
*
a director of the Safe Deposit and
President of the East River Sav¬
ings Bank of New York, will pre¬
The Bankers Trust Company of Trust Company of Baltimore at
a
side.
"Seeing Is Believing—The New York announces that John
meeting of its
directors
on
H.
Marshall Plan in Action" is the
Feb. 8. Mr. Hockley's first posi¬
Schroeder, who was killed in the
tion was as an engineer with the
subject of Mrs.: Wood's talk and railroad accident at
Woodbridge,
will be supplemented ;' by idocii- N.
J., on Feb. 6, was an Assistant Campbell Metal Window Com¬
mentary films taken during a trip Treasurer of the trust
pany of Baltimore in 1929. During
company.
the next year he worked as a sta¬
made by her last summer to study Mr.
.Schroeder, who was born in
tistician with the W. W. Lanahan
the effects of V the EC A program
Woodhaven, L. I., on Nov. 22, 1902,
are

assigned

stockholders

the

retirement

preferred

leaving

$2,500,000
outstanding.

stock

of

stock,
preferred

of

:Je

Hi

capital
Bank

of

of

been

i'I

$1,000,000 to the

the

Fort

Texas, has

about

brought

National

First

Worth,

by

stock

a

dividend of $500,000, and the sale

*

*

of $500,000 of new stock, the capiThrough a stock dividend of taly thereby having been raised,
$500,000,
the
Lincoln
National effective Feb. 1, from $3,000,000

Bank and Trust Company

Wayne, Ind.,
Jan. 9 from

The

of Fort

increased

was

as

to

Hi

First

$4,000,000.

of

Hi

$1,500,000 to $2,000,000.
*

from

$6,028,200 to
The par value of the
to the bank's Rockefeller Center $6,600,000.
stock is $20 per share.
office.
Mr. Andersen came with
Colt, President. Both

the

for

Company of Rochester, N.Y.,
whereby the capital was increased

was

$2,000,000 by a stock divi¬

in

It is indicated in- press
that the plans would

%

New

000 to

by

January.

a

year."
The

Mrs.

in
to

directors following

approval

National

Chase

returned

clared by the

Vice-

was

1931 and had been associated with
the Marine Trust Company and its
affiliates continuously since that

Bankers

and

new officers, etc.

1930

Bank

consolidations
new branches

and

President

News About Banks

•'

29

(737)

'

>;<

Hi

*

The City National Bank -of Gal¬

veston, Texas, reports

National

Bank

of

Madison, Wis., increased its capi¬
tal, effective Jan. 18, from $1,200,-

a capital of
Jan. 18 from
the result of a stock

$500,000, increased
$400,000,

as

on

dividend of $100,000.

v

Continued

rehabilitation, and Recon¬ had been with the bank since
struction of the countries of West- He was elected an officer in
the

Europe.:""

ern
>V

*

'l

I

/ /

•;

and

?<+• ^

v

❖

-

also

1947,

Merger of The National ^jfcafety
Bank and Trust Compai^
New
-

York into

in the Foreign Ex¬
Division of the foreign
Department.
" '•v-'y

of New YbrR

has*" been

Manufacturers. Trust

,

on

Feb. 8

brokerage

Baltimore.

to

firm,

From

July,

February,

1934, he was
industrial engi¬
with the Worthington Pump

neer

Company

of New York announced

stock

employed

t

ChemicalBank^Trust

Company

of

1930

served

change

VV.

:

Company,

1919.

as

an

and Machinery Company in Buf¬
falo, N. Y. Mr. Hockley returned
,

to

Baltimore

that

and

year

ical Bank

;

stock and $32 for each

National

of

common

Safety Bank
Terms of the mer¬

stock.

holders

submitted to
respective

be

the

of

The fact of the matter is that the

foregoing
actually

figures
occurred

period.

in

Stock prices

the

Almost

what basic

portray

1940-42

total

is

and

emphasis
is

factor

through

a

by the Dow-Jones Industrials de¬

stances,

by

clined

one

overdone

suddenly

often

measured

on

usually

replaced,

and

as

during/ the

about 150 to 92, or

period

loss

a

circum¬

of

set

new

of

confidence

a complete reversal of earlier
from
The rail thinking.
*
'
4

38%.

,

slipped from about 32 to
23, or 28%.
•
+"/:
'++VThus, there are other factors—
average

.

other than

Long-Term Picture

.

"inflation"—which for

,

Looking at
ture

we

l

/

rt

,

longer-term pic¬

a

find the following:

.

Jan., 1940

,

General Price Level

in U. S.

(1926

==

100)

Dow-Jones Industrial Stock Averages

Admittedly, June,

1948, was a
the market. Yet, the

low point in

fact

is

this level

reached

was

in

June, 1948
.

% Incr.

166

110

165

79

10

,

150

money.

In

Great

Britain

and

France, during more recent years,
prices of goods and commodities

counts, travelers checks, etc. This keting division and has main¬ spite of the dollar - depreciation have continued to advance (or,
is the third such facility which tained this
As a matter of conversely, the buying power of
position since.
Mr. over the years.
Manufacturers
Trust, acting as Hockley is also a director of the fact, the 160-170 for stock prices the money declined), while com¬
depositary and financial agent of United States Hoffman Machinery was reached1 a number of times mon stock prices, on the average,
the U. S. Government, has made Corporation. He has to his credit during the 1946-1948 period.
are
still lower than they were
It
is
available
to
members
of
the several articles which have been
interesting to note the more

stock¬
banks
tor their approval at special meet¬
Armed
Formes.
The other two published in various trade
jour¬
ings on March 15. Upon comple¬
installations are at the New York nals.
tion of the merger the main office
$
*
Hi
Navy Yard and the Naval Cloth¬
of National Safety Bank and Trust
ing Depot, both in Brooklyn. Ed¬
The election of W. Albert Hess,
Company at Broadway and 38th
ward G. Litka of the bank's Comp¬
Executive Director of Consumer
Street would
be designated the
trollers' department, will be in
Bankers Association, as a ViceBroadway
office
of
Chemical
charge of this latest facility.
President of The Bank of Virginia
Bank & Trust Company. National
*
*
sis
of Richmond, to be in charge of
Safety has three other offices,
located at Seventh Avenue at 27th
James F. Farrell, Senior Vice- the bank's commercial develop¬
ment program in Norfolk, Va., was
Street;
Boston
Road vat:; 174th President of The Public National
announced on Feb. 1 in a joint
Street; and 167th Street at Jerome Bank and Trust Company of New
statement by the bank and the as¬
Avenue.
'
:
York, announced on Feb. 8 that
will

ger

120%, and the total "money intermediate periods at least, af¬
supply" increase 50 %. What would fect public psychology in different
stock prices do, go up or down? ways. The human mind is fickle.

was

receive one-fourth share of Chem-

share

ward

associated for several months with

approved by the State Superin¬
that beginning Feb. 13 banking J. D.
Penniman, Jr. & Associates,
tendent of Banks
and by the
facilities would be made available also as an industrial
engineer, and
boards of directors of the two
at Fort Jay on Governors Island. in
September was employed by
banks, it was announced on Feb.
Services offered include regular The Davison Chemical
Corpora¬
-10.
Under the agreement, stock¬
checking accounts, special check¬ tion. In 1942 he was made Viceholders of National Safety will
ing accounts, special interest ac¬ President in charge of the mar¬
.

7

page

Inflation and Stock Prices

...

on

from

in

movement

other

countries

than

of

three years ago.

The following figures are from
prices relative to
purchasing value
of the the "Federal Reserve Bulletin":

common

the

stock

-France-

-Great BritainWh'sale Price

Com. Stock

Wh'sale Price

All Commodities

Prices

All Commodities

Prices

1930=100

1926=100

1938=100

Dec.'38=IOO

1947

94.6

219

92.0

1949

230

87.6

Nov.,, 1950

<

192

989

1948

288

92.9

1,712
1,917
2,304

-2%

Com. Stock

+133%

1,149
1,262
1,129
1,029

„

Nicholas Rodelli, Administrative
of
Safety;>will Assistant, was appointed an As¬
become Chairman of the Advisory sistant Cashier.

Charles

Richter,

Chairman

the Board of National

sis

■

-Board of the

new

Broadway office

.

of

Chemical, and Max J. Schnei¬
der, President of National Safety,
will

become

Chairman

of

Public

Relations at that office. The
bers

.

of

the

present

board

mem¬

of

di¬

rectors
of : the
National .( Safety
Bank will become members of the

Advisory
Board
Broadway office.
N.
of

Baxter

the

,

of

Jackson, Chairman
Chemical, stated

that "the officers and staff of the
National Safety Bank will become
Bank."

the

Chemical

At their March

15

be asked to
authorize an increase
of the amount
of its capital stock

$25,000,000

to authorize

to $25,400,000 and

40,000

the par value

of

on

$10 each.

Dec.

$1,650,000,000
were

and

Com-

banks, as

31, 1950,
total

were

resources

over

Rank &
^

shares of

new

lr}^ deposits of both

Published

$1,800,000,000. Chemical
Trust Company, founded

1824, has offices

at:

165 Broad-

Way; 30 Broad Street; 320 Broad*itth
enth

Tenth Avenue at 23rd
Street;

Avenue at 29th Street; Sev¬
Avenue

at

38th

Street;
Rroadway at 44th Street; Madison
Avenue at 46th
Street; Lexington
Avenue, at 49th Street; Rockefeller
Center (11 West 51st
Street—20

'4th

52nd Street); Eighth Avenue
street; Madison Avenue at

Street; 50 Court Street,
Brooklyn; and United Nations,

jjew York. Another
ark

Avenue

opened this

at

City Bank of New York held

new office at
41st Street will

spring.




on

John G. McDowell, Louis
P. Snyder, Frederick F. Somers,
and

Sullivan

J.

John

were

ap¬

pointed assistant cashiers.
:;s

.

s;s

of

$100,000
capital

has served to increase the

of the First National Bank & Trust
Co.

of

Huntington,

N.

Y.,

from

$100,000 to $200,000. The enlarged

Walter

sis

W.

Mr.

March

Hess

his

assume

1.

is

new

Formerly

sis

Schneckenburger,

a

director, Vice-President and Sec¬
retary of the Marine Midland Cor¬

of

Company of Buffalo died on Feb.
2 at the Buffalo General Hospital.
was

Buffalo

68

"Evening

porting his
was

also

years

a

+50%

Change from 1947

It would

Norfolk

appear

that the basic

factors which

severely depreciate
formerly with The Bank of
the value of money also tend to
Virginia for 11 years, Mr. Hess
bureaucracy, usually
has been with Consumer Bankers accentuate
With resultant increasing controls
Association
since July
1, 1948.
Just prior to that he was Vice- over private enterprise designed
and

President
Bank

of

and

the

Industrial

City
Company,

Banking

to circumvent

or

offset fundamen¬

tal economic forces.

Such policies

termediate

Land, of the bank's office in curity prices and the relative pur¬
Va.
The new duties chasing power of money is only
will become effective March
1. one of them.
No one knows just what par¬
Both officers have been resident
auditors in their respective cities. ticular factor, or accumulation of
*
J
Hi
developments,
may
change the
present overriding emphasis on
The Central National Bank of
H.

profits taxes, price controls, contract renegotiations, raw material
prices and wages increasing faster
than the companies' selling prices,
etc. We have seen in the past, in

death stated that he
director of the Manu¬

to

3

had preemptive rights

purchase

the

additional stock

stock

prices have declined sub¬
stantially in the face of a sus¬
tained
advance
in
the
general
price level, or to use the more
popular term, "inflation."

With Hincks Bros.

at

still other fundamentals

are

work, such

able

income

which

are

as

a

dividends

on

likely to be maintained

force in the market.

ever,

is

apart

1

relatively favor¬

return

approved
by good grade stocks. This "in¬
by the stockholders on Jan. 9, it come" factor should continue as

ord Jan.

been intermediate occasions when

"inflation" in the current market.

There

the time the plans were

of age.
The was stated in the Cleveland "Plain
News" in re¬ Dealer" that stockholders of rec¬

from

Vice-President of the Seaboard

Equitable

mon

stock

stock,
of

payable

record

Feb.

Feb.

23

9, was

to
de¬

discussion of "inflation"

this eventuality

evitable

Yet, there

Conn. —Joseph

BRIDGEPORT,
Ridener

H.
&

with

is

Hincks

Bros.

Co., Inc., 872 Main Street, mem¬

bers

of

Midwest

the

Stock

Ex¬

change.

present

as

a

Joins Putnam Staff

basic

(Special to The Financial Chronicle)

market force in itself.

to

(Special to The Financial Chronicle)'

This, how¬

the

Northern

National Bank and the

affect

this country and abroad, that a
Worcester, Mass. Two new assist¬ apparently undermine investment
cashiers for work with bank confidence at some point and thus declining value of the currency, or
operations have been elected by mitigate commensurate reflection put another way, an advancing
The Bank of Virginia.
They are of deteriorating money in terms general price level is not any def¬
Thomas B. Hall, in charge of op¬ of common stock market values. inite assurance that stock prices
erations for the bank's three of¬ In other words, there are a great will even roughly parallel such a
Indeed,
there
have
fices in Norfolk, Va., and John many factors which influence se¬ movement.

National Bank of Troy, in the ratio of one new ($20)
There seems little question that
New York Trust share for five held at $27 a share.
as
the United States vigorously
Company of Watertown, the Os¬ The "Plain Dealer)" of Feb. 2
pursues its defense program a con¬
wego County National Bank, the stated that it was announced on
tinuing underlying upward pres¬
Nyack Bank & Trust Company Feb. 1 that 62,304 shares had been
sure on the general price structure
and
the Elmira Bank & Trust subscribed
for, and it was added will be
present. Controls merely
Company. From the same paper that this was 94.4% of the total
conceal
and <defer. such
forces.
we quote "He was Cashier of the
offered, leaving 3,696 to be sold Over a period Qf time, the dollar,
Buffalo Branch of the
Federal
by the underwriting group headed in terms i: ofpurchasing power,
Reserve Bank of New York from
by McDonald & Co,
may well be worth less than it is
1919 to 1921 and was its managing
A 10% stock dividend in com¬ now. Indeed, the evidence points
director from 1921 to 1929. He was
a

which

forces

stock prices, too, forces which re¬
strict
earnings, such as excess

facturers
the

—1%

on

poration, Chairman of the Execu¬
tive
Committee
and
Executive Cleveland, Ohio, has increased its
Vice-President
of
the
Marine capital, effective Feb. 1, by the
Midland Group Inc. and a Vice- sale of $1,320,000 of new stock,
President
of the Marine
Trust from $6,600,000 to $7,920,000. At

He

%

scheduled
duties

Roanoke,

capital became effective Jan. 16.
sis

to

ant

s;s

dividend

stock

meet¬

ing the stockholders of the Chem¬
ical Bank & Trust
Company will

from

regular meeting of the

Feb. 13,

A

with

the

board of directors of the National

Chemical's

Board of

associated

At

$

si«

sociation.

as

HARTFORD,
C.

Pond

is

now

Conn.—Frederick
with Putnam

&

Co., 6 Central Row, members of
the New York Stock

Exchange.

With Barnes, Bodell

1

(Special to The Financial Chronicle)

NEW HAVEN, Conn.

—Edward

now

affiliated with

almost in¬ Barnes, Bodell &

Goodwin, Inc.,

are

W.

Miller

is

other in- 257 Church Street.

^

30

We See It

As

The party had a good many "lame

of the Administration.

ducks" to take

of after last fall's election, and good

care

party members seem to know well enough where to place
them. In the case of serious trouble abroad this "sanctu¬

no

was

Administration

Wilson, undoubtedly an able business execu¬
tive, will do or will be able to do about all this remains
It does not yet appear to have

his immediate entourage

who is

a

situation the ablest

ignorant

or

beaten before the

executive

contemptuous of political

race

a

is, of

advisers and administrators who do understand

give such

men a

that this has not

them, and

reasonably free hand. It is plain enough
always been done in the current program.
Evidence of Failure

supplied in abundance, for
example, in the current controversy between the Treas¬
ury and the Reserve authorities.
Of course, the parties
involved here are not recent
appointees. The Secretary
of the Treasury has been with this Administration for a
number of years, and, so far as
in its confidence.
The members

known, is quite solidly
of the so-called. Open
at least some of them, are not so

Market

■

ii

Committee, or
directly under the control of the President as one of his
own
cabinet, but he would be naive indeed who supposed
that no politics entered into the choice of officials who
compose this body.
The

Open Market Committee has of

H

careful of its

!<

must

resort

public utterances.

to

late been very, very

For the most part, one

inference and past utterances to
gain an

insight into the precise thinking of that body at this time.
however, perfectly obvious that the Treasury and at

It is,

least

,."V.

I
IH
HrJ
'
'

ku

controversy. If the remaining members of
Open Market Committee have a thorough grasp of
the full implications of the
questions now under discus¬
sion, they have thought it well in the circumstances to
the

.'

I

Reserve System have no
adequate grasp of
what is involved—or at least what should
be involved—
in the present

«

remain uncommunicative.
4»\

ment securities.

they should
them at yields which the

peg them at all!
To peg
great rank and file of investors
own

would

are

willing to accept on
obviously be meaningless and useless; to

them at yields lower than that—no matter whether
2V2% or 3V£%—would mean an artificial
market, a mar¬
peg

*

i!

ket in which holders could convert their
bonds into cash
at will at a
pre-determined

price. In short it would mean
monetized debt, the evil
against which all the current
complaint is directed.

)

Washington

point.

We

are

in

■f;

is another

case

in

position to say precisely what hap¬
pened in this particular instance. It
is, in any event,
no

not of the essence.

M

scene

Mr.

Valentine

orders

were

was

The
out

important thing is that
of

as soon as

sweeping "freeze"
issued, the meaning of which in particular




way

as

gold

flows

central

bank

man-

argument agffns't

the str0Rgest

the gold standard,

(4) The gold standard has given

us a roller coaster price level,
one

genera iion,

aown

one genera ion,
it
is

'

Thus

tne

economic
roller

group

been

disturbing,

This
is exag¬
at times

in

as

Even so it is not

one

another.

or

coaster

metaphor
gerated although it has

*

bad

as

that

is

biased

direction and that
is

adopted

we

silver

1865-96.
as

in

a

price

■

—

after

tion

World

I

.

and

'

.

its

'

—

C! 4-

tfl

(1

ft

Mil

nPan

Standard

infla¬

to

expense."

this

avoid

seriously
changes/ there¬

disturbing price
why
bother
with
standard, for gold only
True,

a

gold

adds

some

to

man-

neVesJarr''but'"too
much

can

be harmful.

a

.

How

can

lis

.

The present administration does

Dozens of other nations also not want

a better gold standard,.
then, even more enthu-. and I think that a Republican adsiastically than we, because they ministration perhaps would' not
had suffered from more painful either now unless there was
great '

b

returned

inflation.

1934.
man¬

Better Gold' we time? T.et whathet?iri much" thp
recognize
"too
is,
in
Today?
v
in time? Let us begin with the
with

Why Don't We Have

—

also hastened to return to

we

gold.

War

_

had since

fore

Free Silver Movements,
(bimetallism); and Devaluation Proposals.

standard

world

one

upward, which

have

we

only

"We have to have a
standard anyway
in

modern

and merits,

'gold

a

backs"hwe TenTbLT to goid^and
/I

what

(5)
aged

the

up

next

own the

forever/hurting

"

essen¬

It is my belief that if we

understrong political

PL_x??_

Y ,f'.?p p'iSJ
1

I1?11'

„

.n

presfufe

ab

toward

ar&umems

TTe

ad~

£ei?®ra Y -^P ?/ *"ea"
experience a serious inflation in great public pressure yet, I regret sonaoie o.ut
nearly ail tend
the years ahead, we shall
again to say. There is no strpng inter-'J? ,01?e direction. They may be
find a strong public demand that national
pressure either.
ibai low interest rates are needed
we

return to

In
in

summarv
summary,

public pressure for it.

gold coin standard.,

a

thp
me

demonstration

fnflation

fnr
lor

nrp^mirp
pressure

the 'evils

of

ard that

of

'

°

iQ^n'o

we

'

Limitations?

T^ppa

aTifi

S i

^tPm

else

in

this

world

the gold standard has imtrue
perfections. Under certain circumj

and

shau

they appear rather glar- and wm
For example, if mining dison

coveries

behind

answer

t/the

and techniques fall far
techniques of industrial

/1V

some

of

0r tbat an unbalanced budget must be tolerated for a while
to keep taxes low enough so busi-

+

ness wiU have enough incentiye
exPand and Produce more. Or
that more expenditures will stimulate more production; more
money and more §oods wU1 bal"

wholly

wholly fakJ'to

several

of

them

each beforp eoine

next

'

T,

-j

investment

S10n-

™

themls

are

mention

stances

ing.

none

private

and thus avoid another depT"

^Pi?o nT+vl

Wp

wp

partly true

,°{ Treasury fi-

cos

stimulate

to

.

.

*

everything

1

*J r
gy siana , nancing down and taxes low. Or
do because of
assump-.fhp+ ln„. intPrpQt ratP* a»-P nppdpd

pumIZI
SeS hSv

What Are the Gold Standard's

Like

no

\ye have the kind of gold stand-

il ?

a
a

There is

,.

,

ance cne

,,

another, and there will

YaS
there was be no inflation. Or that an unbalproduction, the value of gold may*n
enough gold to go around and anced budget is essential because
rise, which is the same as saying remaming on a gold standard, defense costs are just too high to
that prices may fall. If that situaJY?,.d co.mmit us to a steadily be financed out of taxes. These
tion continues over a
long period allmg price level depression and are a few 0f
arguments you
of time, it may hurt certain eco- Y
P ??
" 1S very,doub|- have heard or probably will hear,
nomic classes.
This was demonwhether there was an lnsuffi- There will be others equally
strated
between
1865
and
1896 /I?"
Plausible. But they all point to
when the cost of living index fell
Lna
iqooI
Uu fi? between cheaper money and inflation.
;
;

'

,

i

33to50%

fell

and

wholesale

P^jces'

60%.

were

If

Farmers
and
debtors
hurt by this development.
gold
discoveries and
tech

niques of production get ahead of
industrial production, as
they did
from

the

1890's

the reverse
may be true and prices may rise
Creditors and fixed income
on,

groups
lose under these circumstances.

This instability in

thp

vpIup

nf

fS! yf
iY ? ?
firh
? k+e fol(^ standlint' chmwle+n
however, is
+u

.

a

+n

,

rolbn^ fnfi;t^ t^nd!i°nly+
brakes
We had that sort °of

no

standarvi

have

in

had

rninniQi

it

since

fitno

1933.

^

o

"But

the

gold standard has seemed more at
fault when the price level
has
f.

ii

fallen,
33

-x

it did

as

than when

cify mankind
s
simply
p y,

1865-96

it has

on

a

standard.

Then

not

us

cross

"Let's get
Let s set

1929-

or

risen.

cru-

of gold "

off
off

The

tbis
this

hp
de-

g o 1 d

standard, in short, is least attractive

to

after

prices
prices,

period

a

of

falling

Then the naoer monpv nr
men tne paper
money or

o

success.

that

These

nroduce
produce

the

Greenback

periods
Mnvo
Move-

nf

used

to

n

democracy,

iinder

are undei

have

n?e^^
pi

TradiHons

and

m

,

country: we have over half the was one. The gold star d
war^d s suPPly. There is also more an°ther.
P60^1^ b
abroad than most people

qUite

realize:.

a number of countries have

tn

worned> they demanded gold to
hoard or to export, our reserves

fell> Congress became alarmed
^ust this happened in 1893-95),
England and stePs were taken to reassure
d °' for example
Admittedly the P^lic.
In short, although
Franc^' Germany and Japan have some monetary management is esless> hut Europe as a whole has sential, it should be carried on

more dollars' worth of gold today

Switzer-

.

^ and S° d°es South America-

def.inite

urovide

1?^ Another argument was and ?f.a"da^d -!s nea Yn nrotpct
j! ^bere 15 n°t enough money L
limits and to p
in the
.

to

rpdppm

PvprY

one's

paper money and deoosRs
at once, therefore
the government
mus* take title to the gold and

.hold J£.foF tbe benefit
U-S'

Thls

of all of
1S almost entirely spe-

partiai reserves have
been
the rule under almost
every monetary standard known to man We
C10us

have

more Sold today

per

$100 of

paper money and deposits

-

..

are

moment a2°> from
«rP

^ any event since institutions to offset this occupatraditions
.930 the world's supply of moneThe
tar^ 8°id has almast doubled ^ional disease of democracies I w
again;
ere ^ ample gold in this
f
S-u
ctan^rH was

enjoy the greatest chances 0f years, usually nearer -r*•
$7.
—-

a

naf1irp

We

lnoA" 1933'

than we
averaged in any year, 1915 to 1932
managed money advocates find We have
$13 today and we had
many eager and willing listeners from $7 to $11 in
those earlier
and

As 1 said

SiIP,Lpn
Lontoressmen

f"ndarddn 19.31.OT usevent
to abandon

countrv

j-j

the cry goes up, "Let

or
r

Eugland

,

or whether it caused
abandon
the
gold

papGL mone„Y than they did in 1929
standard S?w
land> Belgium, Italy, and

5+nnHarri
monev

n

caused^heT^

gold in uf ficiency causea tne iyz9euiu m^umciency

^3 depression,

.

the

andother

.

Standard, the People,
And the Gold Mining Industry

pression

Controls and Confusion
The episode which resulted in the
disappearance of Mr.
Valentine from the

stimulate

or

through open market operations

The Gold
dollars"

do

we

block

Continued from page 9

The truth is, of
course, that

not

their

'

>

•

.

If it were otherwise there would be no
argument about
the rate at which the Reserve banks would
"peg" govern¬

gold supplies and price levels

hnner?3TTimhTf nrnhJki might be
truer
since
learnedy ^ome

level

of the members of the Board of Governors of

the Federal

fit

,

some

Certainlv

'

a

Evidence of such failure is

much

'

sound economy

not

course,

have

too

standard in this respect.

of such control programs as those now

success

being initiated...

maneuver

possible to separate fully this polit¬
ical factor from that other difficulty—lack of understand¬
ing of the basic elements of the problems encountered.
These elements often go to the very heart of what is called
economics.
The professional politician could hardly be
expected to have any real grasp of such matters. The most
that can be reasonably expected of him is that he choose

■'V

tial to the

the essentials, and

It

some

claimed

'

in the world

only he who is able to make use of
politics to achieve these ends or at all events can achieve
these ends despite politics can be regarded as successful.
are

™atlcallf- 14 ls t™'; that

in

the emotions to white heat—as in war—is

arouses

is
begins. The fact remains, however,

that rearmament and the maintenance of

adjust the world's supply 0f H0ii
and the world's price level auto-

giving effect to all this—its inability
to carry an overwhelming majority of the minds of the
country along with it. Current polls of opinion are hardly
needed to convince the ordinary man that doubt is widespread as to whether the Administration really knows
what it is doing, whether it is wise in doing what it has
undertaken, or whether it can chew what it has bitten
off. Yet some such conviction, or else something which

What Mr.

ade-

standard'd®es

{3) The gold

understanding now. ..
Many more instances could easily be cited, but space
limited. Turn now to the third great weakness of the

is

Politics! Politics!

that in such

way

#

north of the Yalu.

reached into
in a serious way, but one does
not have to go far down the line to find plenty of it,
and the situation appears to be growing worse rather than
better as time passes. Of course, we must recognize that
any organization designed to effect rearmament must
work in an atmosphere of politics, yes, partisan politics.
The President himself is a professional politician, and his
Administration is "professional" in much the same sense.
Experience during World War II made it clear enough

this green

on

no

such

ary" for the faithful at home could be fully as crippling
as
General Mac Arthur has found the "protected" areas

seen.

one

Thursday, February 15,
i95l

.

..

$100 ^^ihties and is still

earth knew. What is more,
of finding out, and there was no one
to enforce any of them. For some weeks now one ot the
purely political appointees of the Fair Deal Administration has been sweating to bring some semblance of order
from the chaos created by this hasty order. Obviously,
no one in real
authority had any conception of the problems involved in this matter—and apparently have no
cases

there

Continued from first page

to be

and Financial Chronicle

The Commercial

(738)

Even xx
if
-w.

due Pressures. If a gold coin
•standard prevents one or two serious inflatio?s in a century, it «

w<dl

S?

its keeP* Faitb

our money is essen
tial to the economic growth of our
nation. If people lose faitlv IP
their money they become dis.couraged about saving and mvesting. I can think of no coun
try that has made economic progress witb a badly inflated cur-

reliability of

rency.
f6Y
(6)

sernrlfipc n^n+l°tiaPle government that
deposits, the

Snmp
Some

it is

,r. foFm of demand countries

ratio

is

$7

gold

to

the

Treasury and Congress from un

prnnomists
economists

necessary
on

a

contend
—

_

many
standard, t<>

to have

gold

have it international, for it

to sue-

Number 4986

173

Volume

,. .

The Commercial and

Financial Chronicle

(739)

This argument quite over¬ miners stand a good chance of
size of the country and. losing that market, It is not worth
its importance in the world.
May the risk.
Monaco, Lebanon, Andorra, Lux¬
Gold is somewhat Out of
style
embourg and half a dozen other now, probably more economists
small nations succeed in having oppose it than favor
it, but there
a
gold standard between them, are still many influential ones who
but the United States be unable favor
it.
The
gold
standard's
to have one alone?
Is that not critics would have a "field day"
ridiculous on the face of it? This if the price of gold were raised
country possesses a third of the to prepare the way for another
world's manufacturing
produc¬ devaluation. A move to devalue
tion and railroad mileage, half of in a country
already fearful of
the world's capacity to make elec¬ inflation
and
demanding more
tricity and steel, over half the economy would
very likely cre¬
world's oil production and tele¬ ate a demand that we abandon

ceed.

looks the

and three quarters of the

phones,

We have over half
the gold too. Why should we fee!
it unsafe to have a gold standard
unless some other nations join
us in the project?
Is it to be sup¬
world's autos.

the

half-baked gold standard
have.

now

You

I

and

we

and many

of wholesale prices. We have bal¬
anced the budget
only twice in
20 years. We have a
tremendously

Continued from page 21

costly defense program ahead.
There

by creating money. Creating
money is always dangerous but
it is especially
inflationary under
conditions
such

as

of

full

employment
today. As for

have

we

government

borrowing,

who
bonds at 3% for
ten years and then only get back
60 cents on the dollar in terms
wants

of

to

Issues in the Defense of Euope

three ways of financ¬

are

ing that defense program; namely,
by taxation, by borrowing, and

buy

purchasing

power?

That

what millions of persons

Trieste, the Italians

about which there must be
meeting of minds. And al¬
though a line of defense for
burden of rearmament will so Western Europe must be far east
lower the scale of living that it of the
Pyrenees, Spain as a base
will fan the Communist parties of for operations, as a
source
of
the north, so strong in those in¬
power, and because of its strategic
dustrial areas, to make difficult position
straddling the Mediter¬
and even to stop her productive
ranean, can no longer be ignored.
expressed

their

savings bonds mature. That leaves

Tito and

market

taxation.

Affairs.

gold, all of

like it because it is

us

foot in the

a

taking

Total taxes

30%

the

of

are

already

national

in¬

tunity

the

of

talking

with

his Minister of Foreign
Marshall answered

The

questions I put to him with

,

Moreover if

do,

we

certainly follow our lead.

almost
matters

should

all

urge

of

us

fails

always

standard

gold

when we most need it.

in

war or

depression

a

we

argu¬

ing that he ran his car into a
tree last night and just when he
needed the car most to get to the

hospital it failed to
to abandon it.

run

The

Congress looking to that
right now. It is the bill of
Congressman Daniel Reed of Dun¬

This omists'

It is like a man complain¬

had

the
accident?
If it was heavy and
well built, he was probably hurt
less than
if it was light
and
flimsy. So it is with a monetary
system. We may have to aban¬
don it or we may not in a crisis,
but let

have

us

one

as

write

to

of

strong as

Committee

on

urge you

wire your Congress¬

or

to support it.

man

little

•

(8)

Should Return to

a

ment

is

Are

worried

you

against

but almost
ponent

the

gold standard,
gold standard op¬

no

ever

argu¬

more

mentions it.

It forces

Congress and the Administration
to be

economical and unable

more

to offer as many

welfare

or

"pie-

in-the-sky"

programs.
A popu¬
lace disturbed by financial fool¬

the

times?

Are

threatening

worried

you

inflation?

will

it

you

A

re¬

gold coin standard will

have that influence.

that

about

Do

want to check both trends?

turn to the

our

I do not say

completely

succeed,
for it is no panacea, but it will be
a powerful deterrent to both so¬
return to

will

ard

a

gold coin stand¬

the trend

stem

towards

socialism because it will promote

I said earlier that there

economy.

is

an

inherent trend towards

ever

greater government spending and
inflation in a democracy. In the
trend has been braked
several traditions or institu¬

past this
by

tions.

One

was

the

balanced

ishness will draw out gold.

This budget. Many people no longer
acts like a fire-gong in the night.
worry much over that and some
To put out the fire in its early
economists call it a positive evil.
stages and to restore confidence Another brake, devised in the
Congress then has to drop the 1920's, was open market selling
foolishness
and
balance
the operations by the Federal Reserve
budget. That of course means less Banks. But these are regarded as
"pie"

higher

or

less "pie."
erful

This

reason

formers in
cialists
than

is

a

very

pow¬

why planners,
hurry, and near

a

do

standard.

usually

taxes,

not

like

so¬

gold

no

more

honest

elec¬

They like

dictators

re¬

the

like

it

tions.
What Can We Do About It As
Gold Miners or Citizens or Both?
The gold

miners should play for

the big
stakes, not the little ones.
The big stakes are a return to the
gold coin standard, and that is
*nost

likely at $35

an ounce.

would give assurance of
hold on that unlimited
r

he

little

higher

stakes

price

f

ting

a

standard.

a

possibly a
gold, but the

longer delay in

return to the gold coin

make

the mistake

£v,
Ter interests have
«urt
*

the

This

firmer

market,

are

for

5E?Ability of

a

reputation

that

made and

of

gold

for

years to come
uver s.

dustry

s

as they have hurt
While I personally do not
the silver mining in¬
philosophy and tactics,

«iVe? th&t philosophy, I
Jrl+i
thqir tactics.
reserving
ay

to

as

gold

achieve

and

see

can

ntly, they felt that silver

Apparwas

the

bimetallism

as

only
was

push up the
price of silver. The

pni/f s*tuation does not apply for

gold.

Gold

mited

Srip
eexmg

already

market.
a

has

You

its
need

una

it, however. By
higher price the gold
on




method

of

must be
other

some

financing

our

defense

to supplement taxation.
That something has to be govern¬

program
ment

borrowing.

To improve it,
confidence in the dollar

waning
must be

store

restored.

that

What will

re¬

confidence?

In my opinion a return to the
gold coin standard is the answer.

...

Gold

is

used

one

assets.

of

greatest

our

We have

un¬

gold
per paper dollar and deposits than

more

about

somewhat socialistic trend of

A

one

Something

rehabilitate

more

the dollar and would make people

Gold

Coin Standard?

possible.

as

There

to

the
1920's.
Convertibility to
gold would restore confidence in

possible, and as long a time as
possible, so that we shall be hurt cialism and inflation.
as

done

in

Why Is it Important That We

and he
point,

time

National

Monetary Policy. May I

rather, is what sort of a car was

riding in at the

in

end

a

specious

completely

ment.

There

and

to the gold
is a sound

long
kirk, New York. It has the back¬
always ing of
many members of the Econ¬

In

always have to abandon it."
a

us

and

can

Senators

our

standard.

bill

Some opponents say, "The

(7)

he

production.

citizens

coin

recent years.

is

As

have generally done so in
Congressmen to return
industrial and financial

They
in

prices.

of them, will

other nations, many

longer practical with a huge
public debt.
They force down
bond prices and make bonds seem

less

willing to lend
willing to lend.

months
ter

of

Another brake was
unmanaged interest rates. Inter¬
est rates are now controlled
the taxpayers.

In

recent
Slich-

Sumner

Harvard

has

suggested

enough: it is too negative

not

is

for

stirs

inflation comes

to demand economy

people,
slowly.
But
to protect the

and would limit govern¬
ment sponsored projects.
We
would examine these much more

value of
not

which would
the

down

market

all the bonds that

guaranteed

or

were

were not pay¬

able in gold. The effects of such
a
market adjustment
could be

devastating to
stitutions.

to return to
now,

many

The
a

solution

is

gold, and more important,

making

government

attractive.

But if

bonds

we

must do it soon,

more

must do this,

before loss of

confidence in the dollar becomes
much

greater,

in bonds sinks

before confidence
lower, before taxes

higher and yet tax revenues
buy less—in short, before infla¬
tion gallops faster.
go

Bruck With

Floyd Allen

(Special to The Financial Chronicle)

car

♦

We

more

are

also

and more

people

are

heading

towards

inflation because

losing

confidence

in

dollar.

The dollar's value has

fallen 40%

in ten years in terms

the

of cost of

living and 57% in terms

cow

to

seemed

forces

have

in¬

that

With

sparse

Goodbody

&

trucks, an inadequate rail system
and
no
anti-tank
weapons.
It
needs officers conversant with our

standards, our specifications, our
training and equipment to boot.
The big question mark is whether
Western Europe will permit it or
invite it to join in the common
effort of defense. In England I
found distrust
and
distaste for
Franco's

ficacy.

help and doubt of its ef¬

In

France,

doubts.

these

firmed

Bidault

con¬

Bringing

Spain in, he said, might give the
impression that our line of de¬
fense is in the Pyrenees and not
the Rhine

and that would
and

France

to

her

be

effort.

The

and

firmness

quality

of

Europe's will to resist is not an
Quimby easy subject of analysis. Besides
the war-weariness of her peoples,
there are the conflicting political

Co.,

Building.

Joins Security

Associates

(Special to The Financial Chronicle)

D.

the

precariousness

114-E South just such
millions

of her

hard-

an opportunity are the
of disloyal Communists

within her

strength,

is

111.— William

engaging

product of
one
man's
that of a small group.

or

acting through the
Congress and the Executive that
must

fashion

coordinate

that

it

and

program

with

our

de¬

own

fense. To do that

be made and

one

is full of doubt and darkness.

the

In

It

countries

dwell

rope

has

powers

even

of

tentative

a

Western

Eu¬

200,000,000 people.
enormous
productive
that can be of immense

value to

over

and

us

be tragically

can

harmful in the hands of Red Rus¬
sia. Productive power is the basis

of military power, and because of
that
it
is
discouraging to an
American

observer

limitations

to

Neither

the

see

Europe's

on

effort.

ment

rearma¬

industrial

military
efficiently

power nor manpower are

unless

assets

they

are

mobilized.

Europe Must Make Sacrifices

Europe
must

rope

is to be
commence

saved, Eu¬
to make

sacrifices sufficient for that pur¬

and commensurate with the
danger that threatens to engulf

pose

her peoples. The plain and brutal
fact today is that Europe is not

making

these sacrifices. Except
Yugoslavia and Spain, her
military budgets in terms of their
proportion of the national income
for

below

far

are

for

ourselves.

those

we

Her draft

propose

of

man¬

is less severe than what we
suggest should govern us here.

power

The nations of the North Atlantic
Pact still lack any systems for

the

control of strategic materials. This
effort today

is clearly not enough.

It is important that Western Eu¬

be saved, but we cannot do
or pay a price that
will endanger our own survival.

rope

ourselves

so

We cannot link

what

our

whole fate to

is

presently a desperate
gamble. We can and will survive
despite Europe, but with her it

will be that much easier. But Eu¬

must know, as we are again
learning to know, that freedom
is born and held only by deep

rope

sacrifice.

With Edgerton,

Wykoff

(Special to The Financial Chronicle)

borders. There is

own

strength

great

outside

L.

LOS ANGELES, Calif.—Robert
Marvin is now affiliated with

Wykoff &
Co., 618
Spring Street, members of
the Los Angeles Stock Exchange.

Edgerton,
South

the nations of the North Atlantic
Pact

(Special to The Financial Chronicle)

BERWYN,

arid

—

Park Avenue,

Hudecek

can

It is this nation

economic recovery that could

Robert be overthrown
by the heavy drain
Peacock has joined the staff of of
rearmament, while waiting for

Security Associates,

Fla.

we

ambitions of her nations. There is
won

WINTER PARK,

the

thought

If

Spain again is a picture of
poverty but of an army willing to
fight. It lacks, however, almost
everything needed for modern
war. It has no real air force, few

H. Willbrand has joined the staff
of

be

Spain Poor But Willing

woeful lack of arms.

Fla.—John

and nature of the aid

should supply. That program from
this country's standpoint cannot

however, are determined to fight.

in Spain,
determined and aggressive, but a

Goodbody & Co.

PETERSBURG,

from Mos¬

But there is manpower

(Special to The Financial' Chronicle)

ST.

away

to him. But Yugoslavia is still

and grim country, with
recovery slowed by drought, the
essential inefficiency of the Com¬
munist system, and the absence of
Marshall Aid funds. Its people,

a

fatal

In Investment Business

the best.

Tito

sian-Communist

on

F. Kraft & Co.

a necessary

shaping the extent

can

Marshall

gold coin standard

thus making all bonds pay¬

able in

we

financial in¬

fairer

for

nature

their allegiance

drive

to

condition

of the venture that we are
case
of attack, our need, he
continued, will not be men but being asked to undertake, what
our partners say they will do and
equipment — jet planes, tanks,
bazookas and heavy artillery. But what they actually do or have
done. Mutual aid to be successful
America, and he paid respect to
her military power, has not yet demands both aid and mutuality.
exhausted the possibilities of an Its conditions should be stipulated
amicable arrangement with Rus¬ at least in broad outline and, if
sia. Moreover, America is wasting the spirit of mutuality is to en¬
her strength in Korea. The stra¬ dure, those conditions should be
met.
At the moment, no
per¬
tegic area today as always, he
manent assessment of the picture
concluded, is in Europe and not
In

bonds but not others,
tend

fatal

we had to pay for
and we would pick only

now

fight long

he had thus succeeded in swinging

have

rope's potentialities is

we must not be
enough, to bring
the West in on our side, for a re¬ afraid of facts or seek to gloss
treat by us in the north opens the them over by a veneer of trustful
road to Italy while our defeat im¬ but mistaken understanding. If we
perils both Greece and Turkey. are to share, we should know the

will

weaknesses

would

if

carefully
them

on

today. Both would guarantee some

It, more than anything else would
force us to go on a pay-as-you-go
program

in

come

attacked, he said, we

itially opposed him in Yugoslavia.
The vast majority of the Com¬
munists in Yugoslavia had been
young and new members and had
fought with him in the war, and

few

gold standard makes more sense,
for gold flows are sensitive indi¬
cators.
Probably, then the best
brake of all is the gold coin stand¬
ard with domestic convertibility.

If

bonds, the government made them
payable, interest and principal,
in
gold.
Both
the
Slichter
proposal and the Civil War plan

It must be sought as a
to something more positive.

inflation

her side.

substantially weathered the Rus¬

Even to demand economy to pre¬
vent

England and France to

guaranteed.
In the
Civil War,
when people were reluctant to buy

goal.

means

with arms, she would have forced

in Asia.

largely by the Treasury in order
LOS ANGELES, CALIF.—Frank
to protect bond prices.
Still an¬ O. Bruck has become associated
other brake is pressure on Con¬ with Floyd A. Allen & Company,
gressmen to economize.
Is it not 650 South Grand Avenue. Mr.
highly significant that the Hoover Bruck was formerly with Walston,
report has had only very modest Hoffman & Goodwin and in the
success? Economy for itself alone past was trading manager for Os¬
a

her at Munich. If she had resisted

that the government issue a bond
whose purchasing power would be

no

dangerous to buyers and more
costly to the government and to

Professor

instead of

Face the Facts

The assessment of Western Eu¬

Marshall

posed that a federation of 48 na¬ doorway leading to a return some come.
They
are
reaching the directness. Czechoslovakia in 1938
could succeed in this but a day to the
gold coin standard. Do point where they kill incentives made her mistake, he said, in not
nation of 48 sovereign states can¬ not lose
If we raise taxes
your foothold trying to in some areas.
fighting instead of accepting the
not? This is puerile.
We can if climb over the transom to
we
may
curtail partial dismemberment forced on
higher much higher,
want to.

some

Congress and President Must

tions

we

many,

the

Yugoslavia

ing out about first hand

your

that

In Yugoslavia I had the oppor¬

others would be sorry to see it
go.
You like it because it is a sure
for

is

concern

effort.

find¬

as

under ob¬

are

ligation not to fortify. The widely

is.

are

31

that

still

-

remains

Joins First California

unhar¬

(Special to The Financial Chronicle)

H. nessed and,

as

in the case of Yugo¬

in the in¬ slavia, may be picked off singly

vestment business from offices at

before Western Europe can bring

6504 West Cermak Road.

itself to

a

LOS
C.

ANGELES,

Robinson

with

First

is

Calif.—Frank

now

California

connected

Company,
decision. There is Ger¬ 647 South Spring Street.

The

32

(740)

Continued from page

for

22

is

if

case

for

is

outlook

the

management is permitted to
work
our favor instead of
against us
This is not a question of

resulting from these two

balance

in

billion.

refundings was $3%

The

ones.

with

thing is true

same

bond buyers.

respect to

maintenance of investor
This requires a

the same rate can appear attrac¬ vember,
1950, are twofold.
In
purchasing power of the dol¬ side sources must come largely
from either the insurance compa¬ tive if the price trend is stable or the first place, it is a testimony to
lar, but the Treasury is also on
nies or the commercial banks. At rising.
the deterioration in investor con¬
sound ground when it says that
Please
investor confidence in Treasury the present time great emphasis
do
not
misunderstand. fidence that has been brought
securities should not be impaired is being placed on the expansion We are not an advocate of low in¬ about b,y the public wrangling
of bank credit. Few seem to real¬ terest rates. We would have much over differences.
Second, it sug¬
fcy unexpected sharp fluctuations
in the dollar prices of its securi¬ ize that under existing conditions preferred
a
Treasury
decision gests that the Treasury is a better
ties. These two statements are the loans granted by banks are less calling for a long-term 23A% bond judge of the type of securities that
inflationary than the extension of br a long-term 2V2% bond at a investors will buy than is the
crux of the dispute.
an equal amount of credit by in¬
discount to yield 2.70% or 2.75%. Federal.

the

fidence.

Now let

to

order

In

digress for a moment
examine the weight

us

companies.

surance

that should be given to the Board's
contention that it has a responsi¬

bility for credit that it is not able
There is nothing new
about this. The Federal Reserve

to discharge.

charged just as fully in this
connection nine years ago as it is
was

have

would

been

disturbing the
re¬ stability of outstanding bonds if
mained relatively calm through¬ the Treasury and the Federal had
out this drawn-out Federal Re¬ evidenced an
ability to resolve
serve-Treasury
dispute and its their differences.
accompanying
publicity.
This
We have been told that market
calm is the result of a general conditions
have
clearly
shown
confidence
that
the
Treasury that the Treasury has insisted
long-term rate of 2x/z% will stand,

upon

will par support for out¬

low."

and

the Federal agreed to un¬
derwrite a pattern of rates for
Treasury wartime financing. The

other words

gency,

these

of

and possible

Now, the Treasury security
other
bond
markets
have

Yet nine years ago, as a
consequence
of the war emer¬
today.

.Both

so

the rank and file of

that the

believe

not

do

investors

In

bonds.

long-term

standing

interest rates that are "too
In

justification, our atten¬

tion is called to the natural forces
of

supply and demand as they
appear in the market and to the

will feel free, amount of Treasury securities that
Federal had no option, because in the final analysis, to unstabilize
the Federal has been forced to
the Treasury faced an unprece¬ the
Treasury security market by acquire. The market for Treasury
dented deficit, the money had to
decreasing the support prices or securities during the past year
be raised, and there was nothing
by withdrawal support.
has been
Federal will he or

made almost

else to do.

■

deficit, is there any better way
to resolve matters than to bring

£

agreement between the
Treasury and the Federal in the
technical area of interest rates and
about

an

support techniques?
Nine years ago when the Fed¬
eral accepted the responsibility of

ket

My first question, therefore, is
as follows:
If against the conten¬
tious

100

Federal reduced its
2I/2S to
and, at the same time, became

a

more-than-usually

months, the

support price for Victory

calm

be

to

reluctant

would their confi¬

or

protecting the prices of Treasury dence be somewhat shaken?
securities, the Secretary of the
Second, would a drop in the
Treasury would have accepted a
support price of V-k % bonds to
support price that was fractionally
buyer of short-term Treasury se¬
below par. When I say this I am
curities, would investors continue
not making an assumption.
The
choice of par, as a precise figure,

made

was

with

the

the

by

of

passage

and

Federal,

most

time

Treasury security investors have
believe

to

come

cards

uthe

that

whenever

neither
the
Treasury
nor
the
Federal
would elect to drop the support
price of the 2xk% bonds below
that figure.

100

we

had to face up to the

inflationary problems of. 1947 and
1948 a leading official of the Fed¬
eral proclaimed that failure to
support Treasury 2Vi% bonds at
par would lead to a catastrophic
condition.
We
repeat that we
firmly believe that we need to get
from

•away

believe
have

support,

par

that

been

a

and

should

program

could

and

we

have

been

produce
an
in¬
volume of precautionary

creased

sales?

99 V2

if

the

Federal

Reserve
price to
99, how confident would

to drop the support
or

institutional investors be that such

support prices would hold?
the

If

Federal

of

support

breaks

Treasury

in

par

will

bonds,

this be deemed,

by investors, to be

evidence

it

that

has

adopted

a

of retreat to successively
lower prices depending upon the

program

volume

of

bonds

offered

to

it?

ily available, the Federal decided
to let the market decline to what¬

up

operations caused it to look.
Let

point

was

dry

to

necessary

illustrate this

me

paring

by

com¬

a

year

two

financings
First, we will go

apart.

back to

November, 1949. When the Treas¬
ury

and the Federal Reserve

were

discussing the terms to be set

on

selling; how far would prices

also

4y4

offered

with

a

This note quickly
premium of 11/32 above

a

Why?

took the

investors

Because

financing decision of the

Treasury
the

note

term.

year

reached

1%%

a

as

Federal

indication

an

had

lost

the

fight to
advance the pattern toward higher
yields.
Both offerings' were an
outstanding success.

when the Treasury, in the spring

acceded to somewhat
higher interest rates for shorterterm

securities,

peared

to

the

be

Federal

ap¬

dissatisfied.

At

least, that is the impression gained
by close observers, an impression

lar

reasons

The

it

must

has

for

lived

nine

with

its

be¬

ties?

Why

more

are

asked

to

believe

that

emergency and a period when the

Treasury securities can be
placed if the interest rate offered

Treasury faces

on

known

suddenly

size

free to act

to

choose
deficit

a

a

of

un¬

suggest that it be

them

tive."

is

made

When

interest

independently?

more

bond

rates

"attrac¬

prices decline

become

at¬

more

Indeed the differences between
the type of inflation that we face

tractive, but I have

today

and that with which we
were confronted in 1947 and 1948
should leave the Federal Reserve

a

With

decline sharply while institutional
investors are net sellers on bal¬

son

less
to

questions.
the

rather

than

more

rea¬

have

precipitated these
During 1947 and 1948

inflationary

problem

arose

primarily from activity in the pri¬

bond market that

major
the

bond

where

ance,

buyers
come

as

a

could

confident
is

a

be
one.

caused

the

are

seen

undergoing

that

market

these

of

never

was

decline

characterized
If

to

additional

bonds

going

to

from?

a

substantial

Trend

cash

controls, of shortages, and of
undefined but large defense

an

pro¬

gram.

Some portion

the'plant and

equipment expansion
necessary to
the defense program is
yet to be
met. The
money needed from out¬




in

Rates—Important

belieye that the important
pot whether in¬

consideration is

terest rates become
or

rates

is

trend
As

of

there is

more

"attrac¬

whether $ higher level of
brought about. It is the
rates that is important.

bankers,

break that occurred

open

August of last
Let

us

you

may

agree

that

a
tendency to feel more
"loaned-up" when the outlook is

justified

year.

consider

now

consisted of

l3/4%

year

a

the

latest

offering-

single issue of five-

notes.

The

terms

set

by the Secretary of the Treasury
were those recommended
by the
Federal Reserve, ones that were
as

appropriate
market

and

and

we

belieye the Treasury

as well, were
skeptical of the appropriateness
and the attractiveness of a fiveyear

who

obligation
were

turing

for

corporations,

large holders of the

securities.

But

ma¬

there

are

grounds for
believing that the
Federal assured the
Treasury that
this refunding would be a success.
What is the record?
Only about
52% of the public holdings of the
maturing
securities
were
ex¬

changed
held

for

the

issue

new

and

throughout

period.

the
exchange
The remaining 48% of the

Federal

were

sold

redeemed

01*

to

for

the

cash.

This hardly could be construed
successful

exchange

from

as

the

point of view of the sound objec¬
tives of debt management.
About 15% of the public hold¬
ings were redeemed for cash. This
compares

with

demption

last

October
mal

less.

and

cash

a

21%

with

the

redemptions

The drain

cash

re¬

September

on

the

more

of

and
nor¬

5%

or

Treasury's

of

important that

the

toward

institutional

the

market

for
deter¬

may

these

in

securities.

same

To par¬

lay the reduction in the value of
the dollar by decreasing the dol¬
lar price of
Treasury securities

Committee could

abruptly

difference

and

eral

the

worst

way

inflation.

summation

In

the

be

may

,

deal with

to

changing states of mind;-,

we

suggest

between

the

that
Fed¬

the

Treasury involve
questions of policy that are most
ate the supply and demand with, important to the economy and to
dangerous to accept
which the Federal open-market you. > It is
either
of
operation must contend.
These over-simplifications,
are
details of great
importance principle or of the technical as¬
when it become necessary to re¬ pects of the points at issue. Fed¬
the

the

and

preferences,

reacr

tions of those whose activities cre^

<

fine the terms of Treasury

eral

ings.

tions;; designed

offer¬
wondered
whether an adequate exchange of
technical information takes place
between
the
Treasury and the
We

also

have

We have wondered about

Federal.
these

Reserve

open-market opera¬
to
reduce
the

availability of credit cannot do so
a quantitative
basis except as
is armed with a sub¬
stantial cash surplus. The Treas¬

on

the Treasury

wil;l

soon be operating at a
A substantial cash surplus

things, because if such sit¬
uations were to exist they would
explain why some of the misun¬

ury

derstandings arise.

the support

able securities.

refundings

The bulk of these

covers

a

hardly

span

longer than four months and be¬

gins this June.
Were

the

the

ence

to

that

it

suffered

in

refunding, it would have
out

pay

deficit.
is

hardly

possibility. To reduce
rendered to Treasury
securities, against the present con¬
tentious background, or without
warning, would be most danger¬
ous.
The withdrawal of support
would
be
intolerable.' Yet, we
a

need to

plan for its ultimate elim¬
Of
greater importance
increase in interest rates,
is the trend of rates. But, this 1st
no
time
to
attempt to' control

ination.
than

an

credit by starting a

Treasury to experi¬
percentage of cash

same

redemptions
the last

about

$6

billion.

No

the

do

To

rates.

trend to higher
multiply
potential,

would

so

not reduce the inflation

Neither the Federal nor the Treas¬

should

ury

itself

be

to

omnipotent

be

should

Each

dominant.

an

or
consider

equal

partner

responsibilities of

with
equal weight.
charged

zation.

If,

therefore,

serve

Federal

unavailable

support
what

the

endeavor

to

were

credit

to

Re¬

S. H.

make

be

the

attitude

Junger & Co.

Formed in N. Y. G.

by

reducing
withdrawing it,

by

or

would

holders of the

of

maturing and call¬

able Treasury securities?

Many have substantial forward
commitments

in
mortgages and
larger number would
be offered good loans at rates sub¬
stantially higher than those now
prevailing. Some of these loans
will

be

A

to the defense

necessary

program.

Would investors accept the

re¬

funding offerings to be made by
the Treasury?

attractive.

observers,

ReI

Federal

business
corporations and individuals have

us

Treasury security market, that is*

the like.

refunding in which the

a

We

tive"
of

of

Consideration

surplus.

The present inflation has
been enlarged
by the prospect of

by the

than fully

more

public holdings

vate economy, at a time when the

Treasury had

was

Most

We

war

years.

would

buyers of Treasury securi¬

come

today?

Federal

conscience

investors

justify ignoring simi¬ stitutional

anyone

the
us

Treasury' securities

possibly be too far removed from
an
intimate
contact
with
the
from the

among

mine the confidence that

Secretary
of
the
During the months following
Treasury believes a stable and con¬
the
Federal showed, by its han¬
fident Treasury security market is
dling of the open market, that it
a prerequisite to financial mobili¬
had not given up the fight. Even

later characterized by the Federal

we

Does

to

security

Treasury.
to

attitude

investor

and the other members of

Board

the

or

seems

the

some¬

occurred

the Open Market

.wonder

how do

decline?

to

It

frequency over
recent months. We have wondered
whether
the
Governors
of
the

that

long before this. A
period of national emergency and know? Can we afford to act on
of
bitter
dispute
between
the optimistic guesses?
Now let's go to the other side
Treasury and the Federal, how¬
Let us assume
ever, is not a propitious moment of these things.
to engage in drastic changes or to that, to reduce the availability of
Withdraw support.
credit, the Federal Reserve drops
Furthermore, if the reasons for its support prices sufficiently low
supporting outstanding Treasury that it ultimately dries up any
bonds were compelling in 1948, substantial selling. How many in¬

have

out

mind

to

Treasury
confidence

either

by

serve

approaching refunding of that
But let us get back to more tan¬
period, the market "looked" as
gible things. The apparent calm¬
though
a
iy8%
rate
were
no
ness of institutional investors will
longer suitable.
The
Treasury, be
put to a full test when the
nevertheless, decided to continue
Treasury begins to refund almost
with a
1 Vs %
one-year
rate.
It
$40 billion of maturing or call¬

that

worked

brings

that has
increasing

thing

ket,

the

of last year,

If, to make its credit less read¬

ever

has

100.

Third,
were

Indeed, you will recall that by
the time

a

holders of Treas¬

some

securities

ury

down,"

were

increasing denial of

an

or

market to

Reserve, and the mar¬
looked, most of the time,

the way the Federal open-market

recent

of

background

entirely by

the Federal

of Investors

Attitude

Treasury again faces

Since the

This

and

Treasury-security investors that
they will not be subjected to some
abrupt manipulation of the mar¬

Cooperation Needed

No

without

with

market

con

stable

confident

and

,

Should Come to Agreement

Thursday, February 15, 195^

.

.

.

inter
The
differences
between
the
est
costs.
Surely many would
A successful refunding of Novem¬
prefer higher rates, but the deter¬
given rate is unattractive if the ber, 1949, and the unsuccessful
mining element, in the equation
trend of the market is down, but exchange offering made in No¬
is
the
lower

Treasury-Federal Reserve Dispute

than

higher rates of interest
the

Commercial and Financial Chronicle

Or would

they deem it prudent

to

redeem
their
securities
inorder to meet their commitments
or

to make loans?

Samuel H. Junger

If, in the final analysis,
Treasury met with no greater
in

cess

those

these

suc¬

financings than

just

past,

of

long

buyers

the
in

would

potential

term

Treasury

bonds gain or lose in confidence?

And, wholly aside from the
Treasury's cash position, if it must

Samuel

H.

and F.

Junger

M-

Junger are forming S. H.
& Co. with affices at 40 Exchang
New

Place,

brokers

and

securities

York City, to act as
dealers in unlist.
dealers.

Junger was sole

large-scale
cash
redemp¬
tions, from whom will it obtain

H.

the funds?

in servi
Samue

specializing

out-of-town

for

proprietor

1946.

meet

serve

From the Federal Re¬
Banks?
Or from the com¬

mercial banks?
In either event it would
appear
banks as a whole might be

S.

Junger & Co. from

H.

H. E. Herrman &

that

forced to cope with some more
less unworkable plan such as

secondary reserve requirement, a
ceiling reserve plan, higher cash
reserves,

or

they

may

be told to

accept Treasury certificates of de-^
bearing interest at some

posit
rate

such

these

as

devices

provement -in

tion

over

y4%.

Yet

none

will

insure

an

the

what. it

credit
can

of

H.

E.

bers of

Herrman &

change, will be
1st with offices
New York

Herbert

deht

the

E.

City.

Cohen, mem¬

Stock &

formed on March
at 14 Wall Stree,
Partners

Herrman,

Exchange,

fYihpri

Forming

the New York

im¬

condi¬

be if

Cohen

or
a

1936 to

and

will be

member ol

Samuel
^

Number 4986

173

Volume

.

,

.

The Commercial

and Financial Chronicle

Continued from page 5

The index represents the sum total of the price per pound of 31
foods in general use and its chief function is to show the gen'eral
trend of food prices at the wholesale level.

The State of Trade and

the

future.
Thus if

an

expanding steel

wants to

company

keep its pro¬
gram moving it has to trade some of its products with another
company that makes what it needs.
Tonnages involved in this
method of "horse trading" are considerable and requirements are
bound to increase during the next six months.
Obviously, new steel

mills proposed

by people not now in
the steel business cannot be built unless steel is provided under
a

government-directed program.
There

is increasing evidence that government programs

beginning to compete with each other for steel.

For

example,

plates are needed in tanks, ships, freight cars, and a number of
other essential products.
The problem of juggling production
schedules to meet requirements of each program is being intensi¬

government directives for additional tonnage which strike
without warning, this trade authority notes.
fied by

is

Pressure

growing

closer

for

scrutiny

of

strategic metals
being shipped to Europe.
Criticism is being leveled at continued
Marshall Plan buying of these metals from American stocks and
sources—especially when domestic controls are being drawn stead¬
ily tighter, "The Iron

Age" concludes.

The American Iron and

operating

the

that

rate

capacity

steelmaking

Steel Institute announced

of

for

steel

companies

entire

the

having

industry

try's increased capacity of Jan. 1, compared to

week

93% of the
be 98.5% of

will

capacity for the week beginning Feb. 12, 1951, based

this

on

the indus¬

rate of 96.7% a

a

week ago, or a rise of 1.8 points.
This week's

ingots

steel

operating rate

castings

and

for

1,933,100 tons a week ago.

is

equivalent to

the

entire

A month

production yielded 1,991,000 tons;
amounted to 1,729,000 tons.

ago

1,969,000 tons of

industry,

compared

Price

date

was 99.6% and
it stood at 90.7% and

The

of

amount

Recedes Slightly From Record Level
electrical

distributed

energy

by the electric
light and power industry for the week ended Feb. 10, 1951, was
estimated

at

6,957,284,000 kwh., according to the Edison Electric

Institute.

a

in

a

week

earlier, and with 247.09

George Putnam Fund, 50 State St.,
Boston

the corresponding

on

reports that "there is con¬
siderable uncertainty over what

practically all grain and soybean futures selling at new high
prices for the season.
trend

upward

was

corn,

action
with

the announcement of

accelerated by

considerable

attracted

corn

profit-taking

at

times

and

best

and

week

27,000,000

•

capacity in pounds
to

There

a

firmer tone with

raw

IN

recession took place in the latest
historical high level for the week ended Feb. 3,
The current total was 142,101,000 kwh. lower
-previous week, 986,365,000 kwh., or 16.5% above
slight

week

from

the

1951.

prices rising 18 points

in

supplies, but offer¬

raw

the total output

for the week ended Feb.

11, 1950, and 1,235,198,000 kwh. in excess
of the output reported for the corresponding period two years ago.

Loadings of
totaled 651,124

cars, according to the Association of American
Railroads, representing a decrease of 133,0-31 cars, or 17% below
the preceding week, due to railroad labor difficulties.
The week's total represented an increase of 38,660 cars, or
6.3% above the corresponding week in 1950 when loadings were
reduced by restricted coal mining operations, but a decrease of
31,019 cars, or 4.5% below the comparable period of 1949.

Auto

IS

Output Sharply Curtailed by Rail Strike

Incorporated

made

up

20,348 trucks built in the United States and
7,572 cars and 2,726 trucks built in Canada.
For the

United

States

88,024
total of

of
a

108,372 units,

alone, total output was

Canadian output in the week totaled

panded unit volume was also

10,298 units compared with 10,550 units

111

178
213

115

196

108

126

Miscellaneous Index

108

162

a

a

week ago and 7,485 units

articles of outerwear
There was a slight

Business Failures
Commercial

and

week ended Feb. 8 from
Dun &
a

year ago

192, but they

increased

to

191

as

the

in the

comparable week of 1939.
All

In

and trade groups except manufacturing had an
manufacturing, casualties dipped to 28 from 33 and

were

considerably below last year's total of 47. A slight decline
from 1950 also
appeared in retail trade, but other lines had more
failures than a year

There

the
in

week.

The

regions,

an

both

retailers

Peek's

than

a

increase, most

only declines during the week occurred

,year ago;

areas

exceptions, however,

Despite this

to have fewer casualties

continued

were

the Middle Atlantic,

Ucific and West North Central
regions.

Wholesale

food

price

index, compiled by Dun &

Brad-

street, Inc., rose four cents last week to stand at $7.21 on Feb. 6,
from the
previous figure of $7.17.
The current level represents a
new

high since July 20, 1948, when it stood at $7.30, and it is only
2.0% below the all-time
high of $7.36 registered on July 13, 1948.
The latest index shows a
gain of 21.0% over the pre-Korea level
Of

$5.96,

and compares

with $5.80 at this time a year ago, or an

increase of 24.3%.




as

(Special to The Financial

the

PORTLAND,

to refill

tially above the level for

above the

pared with an

Alexander J. McDonnell died
a

of

of sixty-

heart attack at the age

Mr, McDonnell was a part¬

eight.
ner

while

McDonnell &

in

Co.

Ernest H. Heath

country-wide basis, as taken from
for the week ended Feb. 3,

Ernest

registered

an

of

the year to

1950.

20%

For the year to date depart¬

lifted retail trade

For

was

the

Heath

passed

away

the age of

advance of 26%.
in New York last

week

E. Stuart Peck
E.

index, department
store sales in New York City for the weekly period to Feb. 3, 1951,
advanced 4% from the like period of last year.
In the preceding
week an increase of 21% (revised) was registered above the simi¬
of

H.

72 after a brief ill¬
ness.
Prior to his retirement he
had been a member of the invest¬
ment firm of Snecker & Heath.
at

This com¬
25% in the previous week and 23% for

15% above the like week of 1950.

four weeks ended

recorded

over

that of

date, volume advanced 22%

a

ago,

Peck,

Peck, New

partner
in
York City,

of sixty-

eight after a long illness.

Alanson G. Fox

i

and ior

from the like period of

&

passed away at the age

Feb. 3, 1951, an

year

Stuart

Adams

Alanson
"

home
affer

vpar.

and

Alexander J. McDonnell

According to the Federal Reserve Board's

last

formerly

Co.,

&

in wholesale spending

the corresponding week a year ago.

ended Feb. 3, 1951.

ment store sales

week

Tyson, 184

was

Draper, Sears
Paul & Co.. Inc.

the like period of last year.

increase of

the four weeks

increase

He

with

Reserve Board's index

1951, advanced 3% from

lar

S.

prior week, was slightly below a year ago.

Federal

about

Dabney
Chronicle)

Me. —George

Dabney &

Street.

Middle

to +10 and Pacific

attending various wholesale centers,

Department store sales on a
the

Townsend,

+14; South +5 to +9; Mid¬

Total order volume was substan¬

inventories.

E.

Joseph

has become affiliated with

Drake

price adjustments and the need for some

upward

—

With Townsend,

level

the expanding dollar volume of orders re¬

Promotional sales

Food Price Index Climbs to New 2V2-Year Peak

The wholesale

be from 8 to 12% above the

further slight increase

a

The number of buyers

increase was reported

the South Atlantic and East South Central States.

was

Mass.

Inc., 77 Franklin Street, members
of the Boston Stock Exchange.

+17.

during the week

ago.

In seven of the nine
major

reflection of
other items, an ex¬

7 to +11; Northwest and Southwest +6

Coast +13 to

flected

industry

increase.

west +

in 1949 when there were

down 40% from the prewar total of 318

BOSTON,

Carew is with F. L. Putnam & Co.,

considered responsible.
the period ended on Wednesday

England and East +10 to

New

in

the

when 195 occurred and
were

Substantial Rise

failures

,

F. L. Putnam Adds

following percentages:

preceding week, according to
Casualties were at about the same level
159 in

Bradstreet, Inc.

as

Show

industrial

-

(Special to The Financial Chronicle)

week; total sales

Regional estimates varied from a year ago by

of a year ago.

year ago.

Index

Clothing Index

Total retail dollar volume in
of last week was estimated to

242

120

Rent Index

dollar volume of clothing was moderately
the level for the comparable period in 1950.
As befitting

While much of the increase from last year was a

against last week's revised total of 140,656 units, and in the like
week of the last
year 118,252.

:

113

Price

Index

Food

the week before; total

upward price adjustments in meat and some

Dec. 31/50

Investors

Index

Dividend

week than in

past week was about even with the previous
were noticeably above those of a year ago.

was

and

1935-39*
Index No.

Index No.
Dec. 30,'41

dip in the selling of dresses, as well as men's shirts and neckwear.
The dollar volume of food sold in the nation's stores in the

cars

in the fol¬

profits

Various Indices, Base Year

Consumer

151,206 (revised) units and 125,737 units
Total output for the current week

average

year

lowing table.

currently reports.

spell, overcoats, fur-pieces and other
appreciably popular in many vicinities.

base

a

realized

from

instru¬
mental in depressing consumer spending during the period ended
on Wedensday of last week.
While aggregate retail dollar sales
dipped slightly, they continued to be considerably above the level
for the corresponding week last year, Dun & Bradstreet, Inc.,

Canada the past week, according to "Ward's Automotive Reports,"
totaled 118,670 units, compared with the previous week's total of
a year ago.

to

(1935-1939) puts the dividend in¬
dex way ahead in a ten-year com¬
parison
and
no
allowance has
been
made
for
dividends
paid

Cold Weather

Shoppers for apparel bought slightly less last

FROZEN

INCOME

Parker

vestors

Unusually cold weather over much of the nation was

were

6, N. Y.

Corporation atks in
its latest "Letter." Adjusting the
dividends of its Incorporated In¬

also practically nil.

the cold

Combined motor vehicle production in the United States and

Institu¬

situation.

tax

YOUR

TOO?

in both cotton and wool futures
price freeze order, continued in
effect throughout the past week, as traders, dealers and merchants
awaited official clarification of the order.
Activity in gray cloth

above

stability of
their impressive

Shares, Ltd., 19 Rector St.,

New York

suspension of trading

Trade Volume Suffers From Severe

freight for the week ended Feb. 3/J951,

revenue

stocks.

relative

the

turn,

favorable

which followed the government's

was

advantages

present

in insurance

Live hog prices reached new high levels since last

stronger.

markets

a

eight-page pamphlet discusses,

tional

September, but turned somewhat easier at the close as the result
increased market receipts.
Cattle prices were mostly steady
while lambs continued to rise to new highs for all time.

Carloadings Off Sharply Due to Rail Strike

SECURITIES,

record, the favorable dividend pol¬
icy, the "leverage factor" and the

light. Refined sugar was likewise in good call.
Domestic trading in lard was less active with prices moving
moderately lower due to uncertainty as to ceilings likely to be
established.
Export sales of lard were small.
Fresh pork prices

The

than that of the

investing

The

of

A

the

analyzes
of

were

were

INSURANCE

insurance stocks,

good refiner demand for

a

1952.

in

1,427

Co., Inc., 730 Fifth

&

report by Insurance Group Shares,

ago.

was

Axe

W.

Avenue, New York 19, N. Y.

resulting from the freeze order, resulted in some¬
prices for cocoa. Trading in coffee and sugar futures
was
resumed during the week.
Coffee futures prices worked
lower but actual prices held steady on limited offerings.
week

has

INVESTMENT MANAGEMENT

uncertainties

a

per person

estimated

an

E.

what lower

Sugar developed

capacity

increased from 581 pounds in 190O

,

shipping directions also, largely due to the spreading strike of
railroad switchmen.
Liquidation and hedge-selling, prompted by

over

which

of

a

analysis of per capital steel
indicates that steel

An

mill

bushels in the like week a
' ;
Reflecting the recent sharp advances in wheat, domestic flour
prices rose steadily during the week, accompanied by a substantial
increase in buying volume.
There was a marked expansion in
previous

commodities

other

ment.

the Chicago Board of Trade increased sharply last week to
270,388,000 bushels, or a daily average of about 45,000,000 bushels.
The latter compared with a daily average of 36,000,000 bushels in
the

rubber and wool

high percent¬
age of
total domestic consump¬
tion."
The report also discusses
the annual survey of railroad locomotive
orders, including a
change in the method of measure¬

on

•year ago.

will take

government

imports comprise

Volume of trading in grain futures

not maintained.

were

the

respect to

and

and soybeans.

Other strengthening factors in wheat included the removal of
hedges against sizable domestic sales of flour and the government
announcement that it would not offer wheat for export.
The rise

in

SITUA¬

FINANCIAL

GENERAL
TION

with

prices

9, Mass.

Axe-Houghton's SURVEY OF THE

year ago.

The

important addition to the
or
salesmen's kits.
The

very

dealers'

Although uncertainty and nervousness continued in evidence
leading grain markets, trading activity increased last week

ings

Electric Output

Changes

The Dun & Bradstreet
daily wholesale commodity price index held in a narrow range
during the week, closing at 326.37 on Feb. 6, after reaching a new
all-time peak of 326.80 on Feb. 3.
The latest figure compares
a

1

Mutual Funds

of each section, reserve,
high return bonds, and common
stocks. - In these times, it will be

the general price freeze order were small.

with 326.61

jrom page IS

purpose

Piyce fluctuations in the first week following the issuance of

to

the rate

a year ago

Wholesale Commodity Price Index Reveals Minor

higher parity prices for wheat,
are

Continued
i

Industry

companies have resorted to the ancient system of barter. Reason
for the trading is that few steel companies can produce all the
numerous items required in a construction program.
Wide flange
beams for example, this trade authority points out, are made by
only two companies and their order books are extended far into

3a

i X74i)

at
a

Gibbs Fox

the

lone

age

of

illness.

died at his
seventy-one

The

Commercial and Financial Chronicle

in-

to air and naval

pnntrihutinn

Continued

from

and

huge

our

10

page

strength and sup- hordes.- In the last war

Do'theAmerican

We Should Revise
,

Our participation, prior to

attack.
an

realities

all these stark

problems, I have beiieved there is a way to at least
these

and

attack, was to be limited to
the $2 billion. We must also re- munitions.
The Pact being the
member that excise and corpora- will
of
the
American
people
tion taxes in most part are ulti- through the Congress, and in the
mately passed on to the consumer faith of the text and those assuror these milch cows would die.
ances, I supported the Alliance.
Grim austerity must enter the
But last fall it became evident
door of every American home.
that the Administration was conearning

people

most

stop

Policies

Alternative
Desnite

.

confiscation

But

revenues.

people know all

the iacis.
me farts'

Onr Foreign Policies!
would

uneasy peace

an

for the world.'

in my address of six weeks ago,

land

1 stated that we should not

sion

without

of

inflation

credit,

fact—the last occasion being
a

proposal to "Pay-as-you-go."
But we simply cannot carry this
expenditure or such tax load for
long.

helped to start them thinking.
Then General Eisenhower was

prove

The economic destruction of the

United States is

by which
come

Stalin

hopes

means

to

over-

us.

The

TTnif^
unuea

fourth

i

in

addresses

two

pro-

Judging by the scolding of
European press, I may have

the

appointed to organize their military strength. And the General
has become the potent symbol of
the
policy of at once sending
American ground troops to Eu-

focal

they have resolved their disuni-

loss of all civilization.

knows

we

destruction for indefinite years.

powerful
attack on West-

the

years

most

deterrent to any
ern

Europe. It is far more power-

ful

than

pouring American divi-

our

great services. He has mag-

many

nificent fitness both for the

com-

suggesting the

am

protec-

very

tion for Western Europe and our
own
defense
which ..the Senate

mand and the stimulation of spirit contemplated wheq it ratified the/
r stajk reality here is the and action among the Allies in Atlantic Pact.

1

*

v..

.

-

fr!L

annea^p
appease

umty of
V1

"t? 3
Even

ons.

na

some

our

Europe.his
But

appointment

does

not

There are other reasons for such
policy

a

both military

Phtnpfp hrnnph°nfcommit the American people as to nomic.
Chinese branch of the policy.

thp
the

.

Manifestly if attack

Nattas" °n P0"CieS °f thE UnUed Continental
nTI?e
JNations.

Despite this, we must not forget
that the aspiration of mankind for

Europe

Communist

their large

are

^ the
in

and

•

.,

Thp
The

affpressnrs

aggiessors.

built

was

idea

norfim

✓%

league

and

faulty

not

abandon

£eV
But

this

on

TVfo+ir\r>c
Nations

central

same

the Concert of Europe and

as
T

rn/V

TTnitprl
United

•*

+

Nations.

Halting

it may be, we canthis idea
and
this

as

*

it

IVTaIi

u

must

i

be

4u

clear

4.

that

the

y-

Europe.

«*

ah*

_

Equally
is

there

are

fact

the

that

adequate

of

participation.

Two

month.

a

holding heroically

We cannot yet see

drive

ne+u
the

all

enemy out of Korea, how
of oui armies must remain

much

there to protect it?

Japan, Formosa and the PhiliparG

tional

V-ltal

security.

detailed

ago

progress

minimized

b(y nations

to

anxious

wiiflppH eirf^SieS t0 5v?r0P?r+We
strength 1 the Pacific to military
m
protect
ctrpncfth

those

f

areas.

plans and

West Ger-

military participation is out
wait*.

odri

divisions

ground
of

view

The

The

North

sixth

decisions

in

Europe

in

involvement in Asia.

our

Atlantic

two

revolves

our

around

land

the

to

army

Pact

stretch

this

tack.

There has been

case

no

is

small

9

or

the

pos-

of

end

American

35

to be

seem

compared

bitions

of

an

the

to

world

conquest.

ma-

amThere

nothing that Stalin would like

more

into

ground

£

in

There

Europe

come

American Hemisphere
salvaR°n to Europe.

to the

with

110

Foreign
gave
der

Relations

positive
the

Pact

C?

to

'Some

Question*

.Questions

A

Tfle American people
kave rnore information

the

that

expeditions

defense
over

line

in

leaders

Will

meant

no

forces to




statement

We

us

trying

that

the

forces

have

tried

this

in

responsible leaders tell

whether

proposed

only

an

Winter
"

is

to

they contemplate the

American

five

do

things

That

-

-

.

.

on

the

at

is,> to maintain

furnish munitions to nations
determined to defend

Who

them-

selves5 and to send land armies to
Our

tain the same or more
air than ground forces,
To

train,

equip,

by

power

place

in

Eu-

rcPe'and usual combinations of
mamtaln for one y^r 10
the

of

about

divisions

$4.5

would

billion.

cost

This

same

would for example, purchase

sum

man

390

B-36

contingent

as

installment? Does not this

air,

long-range

10

of

the

air force

be

about

iess

$3 bil-

^ha^ $^^1-

lion.

Foreign Policies
I

can

sacrifices

to

should do it with

we

summarizing
Can

"ir forces
As to

the

of

call

Korea,

Nations

Communist

China

that

they

supplies

of

the

by

to

our

our

help,

allies

nKnnlH

do

Phinnrt

trnrv

should

free

Chiang

„

.

...

give

full

and

Japan

to

Germany

,

•

f..f ;

out risk.

a program.

For the present I

gest:

:
We

No pro-

should

overwhelming

sug-

our

resources,

ive

can

greatest

productive

our

power

of

menace

the* right

in
our

the

side.:; ;

>

(Special to The Financial Chronicle)

ST.

inde-

Western

liam

<■

PETERSBURG, Fla.
E. Acker is now affiliated

representative with The Ranson-Davidson Corn-

under

governments. During 100 years pany Inc. Florida National Bank
thes.e natl°ns were the §reat dama fueling. He™as formerly with
against these Russian-controlled W. H. Heagerty & Co.

Fity 'Tis, 'Tis Tine"

"On

Thursday, on one day, he [President Tru¬
man] defied Congress to cut a budget which con¬
tains a large increase in nondefense expenditures
and every authority agrees that these expenses
be

must
.

cut.

."He condemned the lead¬

.

of the railroad unions gen¬

erally

as

Russians."

."He

*

.

*

.

denounced

>

-

.

Senator

Fulbright's;, report on the RFC
as
asinine,,although it was the
unanimous report
crats

of the Demo¬
Republicans alike

and

who had conducted

a

thorough

study of the loose practices and
lack of exercise of
practical
judgment which, characterized
many RFC practices.
."His personal letters also
.

show

-

Robert A. Taft

'

/ '

;

,

lack of

a

judgment and yet we are asked to
surrender to this man
complete power to make
snap judgments on the commitment of millions of

foreign lands."—Senator
.

These are judgments which
any citizen greatly
dislikes to render in times like these.
>,
But

like

we

must

tell

the

ourselves

the

truth

in

times

these, too.

The Senator has

>

devote

,

of

Joins Ranson-Davidson

(8) I proposed three years ago
should

,

lines

China and

.

we

,

Tt is

eve" il

century.

fn

furnish him munitions.
that

the

Kai-shekc to

wishes in

what he

onolr

k

ourselves

of peace

genius and

Since Red China is making war
And being
American armies, .we. Almighty is on

0,n

or

pursue

meet this—the

_

effectively

to

an uneasy peace.
we

own

non-

is

enemies from attack

best'chan^

if

a

Communist nations.

proposed

unon

toe
should demand it is

we

stop

a

have

and restrain
naval

bv

^

United

for

it

.

be perfect—none with-

no

common

most

clearly state the
points of foreign policies in which
many of us believe at this time
by

(1)

do

can

American boys to war in
Robert A. Taft. ;
•'

Points of Revision of Our

heavy

make

defend

Philippines

the
wp

janan

must

an(^

can

Formosa,

.

divisions would

have

we

navy and

ers

I can give you an indication of
the lesser economic strain to at-

hoping

wars

We should be prepared to

peace.

But

and

peace

sense,. within our strength
with
munitions rather the long view of history in mind.;
than large armies. ..."
The essence of the program I

on

cannot

economy

this load for long.

into

us

go off the deep end

fought two such

we

postponed.

or

Stalin,

to get

is

.^g.^bould sp^nd all we can afford

our

armies m the Pacific; to build up
aa air force;
a naval
force; to

Europe.

be^reduced

could

we

that to bring

defense expenditures in

from

come

Before

to

good

no

of steps toward another land war
in Europe, let us remember that

proposed nonthe budget

of

billion

$86

w

strain

system will

of

term

stroy freedom in America.
Senator
Byrd
estimates

pendence

tragedy

not by land armies,
infinitely less costly

be

time.

same

gram
our

Korean

unbearable

a

Korea.

certainly
Europe prior to

The

Will

make

far proposed, can defend this
line against odds of three or four-

of

General

Europe

400 miles long.

responsible

our

un-

Amencan ground troops would be
sent
to
Europe.
That

its

of

battle, the annual cost of the

should
before

exp^ition
ground troops to Europe,
Any

Committee, to-one?

assurances
no

of

would

part

bombers compared to 60 of them
at present.
If neither went into

so

Chairman

and

sea

would

and

The American People Need
Answers

istration, through the Secretary of
the

whole

American

public

and

Space,

economic

fi^htin^

cation of that Alliance the Admin-

State

large

a

air

an

in dead and disaster,

than to get the United States.
his clutches bv
us

the

on

It

carry

enemy.

America is at present the
j0r deterrent to the Kremlin's

must be

attack.

in

developing proof that the way to
punish aggressors is from the air

are

strength of the

of at-

Moreover, at the time of ratifi-

Ger-

divisions

army

beyond its text.
The
provides that the nations

shall aid each other in

two

in

The stark reality is that such

far

Pact

by

Tould

it

The

that

the

now

including

vears

4Q

or

Eu-

rope.

Current statements

division*

10

dTvisions

Si ttla?U? PaCl,anCVhe ?r0posals to start another American
expeditionary

divisions

Disaster could thus

in

true for

and General Scorched Earth,

and
m-

appear

will start with

many,

sjbiy

would

including

army,

American

Pact

consideration

.

,

it

statements,
his

is

Certainly there is little stark
reality in talking about American

this

without

be

Esper

long

a

and at the same time avoid
disaster which can de-

economic

decision

the Communist horde

war

announced.

were

From press reports based

in 40UI\n?"

This must not be

is

1

r^Tls®?on assigued us by the formation from European officials
al. 4 Nations in Korea. We are and from General Eisenhower's

men

a

•-

General

German

•fj

great losses.
General
Marshall says we must send 15,000

gaining

r

..

West

oi*

suffering

__

can

ground allies, General Manpower,

man

Far East

#

men

is
hope

.

which

power

nearer

.

than allied ground armies.

cially

Now it is decided that

Policies in the

come

.

vital

little

striking

and

i

land deIense of Europe without

great

__

Our

For some reason
are excluded

•

from the Alliance.

iprt®e„+i ;vi" n0/ be months
protection
from

susbtantial

Our

t

*

—

Communist aggression.

*

in

Turkey and Greece

f"v+ho

a

tt

divisions and the most defensible
area

■'

i

over

carry

propose

His greatest hope
a land war.

We

years,

and

unities which gnaw at

—

can

ground forces.

the dis- ground war would at best be a
their vitals, war of defense.
In the air we
over
a
century has been to find Their prejudices prevent taking would have the offensive. An Air
peace by collective action against
Spain into the Alliance with 20 Force has range, speed, flexibility
parties

I

must reduce our national expenditures to a level we
(6)

J?rld W°U'd Kb€
Such a

inferior

more

eco-

Europe

on

until much

ties.

The air threat has been during

I

military strength

could

home

our

well

on

four

attack, that the pledges to the Congress
waiting and the American people be kept,

an

To them, I urge watchful

that kind of war for his

Stalin
carry

,

.

I have proposed that we stop,
look and listen before we start on
a road of land war that risks the

on

ready in case of attack.

sions into the reach of this Asiatic

debted to General Eisenhower for

of

point

ground

is

there

before

even

,

I have proposed no retreat, ho
withdrawal. I have proposed no
repudiation of treaties or obligations. Rather, I have proposed

has been developed by Europe itself and there is more evidence

held

forces

The American People are in- horde. I am suggesting no attack.

canons

thinking must be the United Na-

Ts'

made

rope.

The
ine

.

of the

one

I

build and

can

we

sustain overwhelming air and sea

few weeks ago.

test.

or

only nomic strength

economic controls
cannot wholly stop inflation. The
surest road away from inflation
is to accept the President's wise
wars

men

we may

tacked, we should be prepared we certainly destroyed these' two
and use such overwhelming air dams: The sooner they are given
and naval power to the limit and their independence the sooner, for
keep it up until they have had their own security, they will reenough. The Kremlin knows that sume their ancient role.
v \
we are committed by the Con(9) Recently I proposed that if
gress to do
^so. I believe that re- the na iora or Europetailed1 we
serve, if large enough,
s
,
P
tion, have
rope s real protection.
in pund a second drne ot air and
(3) We should supply munitions naval
J?+lei^Up?n the
to nations doing their utmost to loreg
s
esof t he^Pacific and
defend themselves.
Atlantic uceans, both, north and
(4) From the starkly realistic, south, and I may add the Meditereconomic, political and military ranean and Indian (Jcean.
,
reasons which I have given you,
(19) Congress should recover its
my personal conviction is that we constitutional authority over startshould not create land armies for rng wars. It could certainly do so
expeditions into the quicksands through its powers over the purse,
of either Europe or China.
I do

send money to Europe
until large European forces were
in sight. I was well aware of the
obligation assumed by Congress to
give aid in case of attack. It was
Even before these burdens are templating sending ground troops my view that we should hold to
actually imposed there are stark to Europe.
It was also evident that provision of the Pact and I
signs of economic strain. The pur- that after years of gigantic Amer- urged "arming our air and navy
chasing power of the dollar has ican subsidies, the European At- to the teeth."
fallen
20% in six months. The lantic
Pact
nations
had
done
I suggest that air power and the not want to even start on the road
stock boom indicates that many nothing
of consequence toward navy is the alternative to sending to another Korea.
people are seeking flight from in- their own defense. Former Prime American land divisions to Eu(5) There are those who think
flation. Our already gigantic gov- Minister
Churchill had
repeat- rope. With our gigantic produc- we should send more divisions to
ernment debts permit little expan- edly and forthrightly stated this tive capacity and within our eco- Europe for
their encouragement
Two

15, 195j

sra'asi;

«.

tional

Thursday, February

. . •

9

•~r

like

many

of which

connections,

merely put into words, thoughts
have

been

in

many

many times of late.

minds, in

Number 4936

173

Volume

Financial Chronicle
The
Co

...

Continued from page 10

(743)

Trnnatr?irt^\, spJreuad Pbe!lind
Curtain.
The

into Saudi-Arabia? Will we allow- which Russia will
former^ Red that crucial oil supply to fall into tack.

Iron

foreign minister

Extend Atlantic Pact

la

wool, only a

portion of our sugar

No, ladies and gentlemen,
would rather see mv
would rather see my <countrv
'
its share as a part of a

without«natural

runner

or

though it would be tough.
But some things are life and

tin,

make, steel

To

death,

where

and

-manganese

you

need

does

key

lieve

cause.

Yugoslavia this

The British have won successes

des?iny

oWious

v uu& aesuny

w

over

md waitine for donment
ana waiting tor
by

honesty1 want it to stand

has been the abangovernment

our own

.Tf

For four long years I demanded
and pleaded that we should back
up the recognizedgovernment of

.

the inexorable march of hu-

as

result of those

a

atomic

tests

^ mflht
?an hlstory ,does not Wait for na" in Nevada. Every one of those
norhan.'wlthni.r
thfS tlons to settle their internal dif- explosions said to free men every^
^IKW/3£2?a£ WpI ferencesWhere: "Take courage! America
'of existence^ a Stone Age level —The dayshould be decided
of decision is upon us. remain free"! strong; you can
is arming! Be
arming!
The issue
upon
au

to the

real

facts

which

have

been

-

much ignored. For example, those

we

get the steel- to make guns and
planes and tanks—or atom bombs?
these

Without

who argue that we ought not to
defend Western Europe forget that
America we
have
already decided that
question. Twice in this century

Fortress

is lost.
:; It is

perfectly clear that Russia
wish to challenge the

United States in all-out

she

we

catches

with

up

until

war

us

have chosen to

tator in

the

on

go to war

'this shaky peace and it has kept
It because

Europe

had bases in Great

have

Britain, Africa and the Mediter¬

forget

an

that

we

already

But how do
With

follow'
follow

to

us

we

make the atom

a

is

time for

a

the

boldness.

time for greatness.
We tried the other,

This

and our
principal source of uranium is Britain, Trieste, NOrth Africa and
in
A-Trint«__in
Ampriagain in Africa—in the TJnirti^r. th#=» MGrlitprraripan Thnsp Ameri
Belgian the Mediterranean. Those
Congo. Suppose the Russians took

Europe,

can

We

course.

including Belgium. Who
Belgian Congo and its

~

miles from home

with

no

allies,

freedom in Europe and we won

Without

war.

tor wa s.

us

make

dictator thinks he

no

sure

can

that

,

^

,,

,

,

swallow the world.
It is time—long since
we

time—that

provising,

tion Suicide.

going

.

through

the

agonies each time of too little and

Thd simple fact is that the front
of defense of our
very ex-

too late. However much we would
like to dream of doing things the
istence—the only line of defense easy way, we have absolutely no
we
have—is overseas, thousands choice if we wish to stay free and
of miles
away where lie the raw keep our freedom without a war.
materials without which our coun-.
Freedom was never bought in
try could not survive;
a
bargain
basement.
Freedom
Now suppose a miracle
occurred was never saved by timidity, selfovernight and we suddenly dis- ishness, half way measures or
covered all these essential
mate- appeasement. America is not gorials right here in
the
United in^ to close her eyes ta .the-cause.
States; .Then; how long Would we of freedom in this world. We-are
survive,: igolated and surrounded going to stand by our commitwith only,. 54
miles
separating ments: we are going to shore up
Soviet Russia from Alaska?
the cause of freedom. We -are
v
'
going to win.
*
Wants Grouped Force of
The face of the world Jias
100 Divisions
changed much in the last two
Last December I
called for 100 months and other nations are bedivisions, or about 1 800 000 ginning to know we will win too.
ground troops; That works out at
Europe, the frozen spirit of
jbout 35 combat divisions plus despair has given way to a new
behind
the
lines
organization. sPirit of defiance. The people see
r?,?in!e<? and alone, we would need that America bas^again^taken

we

,

,

-

35 but 100
combat divisions, to
nave a
ghost of a chance of de-

fending
Oni
a

our
-v-x

»rn

shores from n.XdStt.ct
OUU1CB XXUXXi Alaska

California

Mexico,

and

to

from

the

to
LU

Gulf

Florida

_

Western Europe Has Been

to

lne and this in addition to the
JJ0Us NaVy and Air Force it
anJ1 ?Patrol the Pacific
a
p

„,n

Bay

hold of freedom's: sword and

wlU not put it down
tyranny is on the march.

Atlantic Oceans from Baffin's

while

decide

us

as

a

nation that

can

lied

had known

^merica would respond. In fact,
the Government of the United

states had officially taken the
position that we wouid not defend
We created

Korea.

a vacuum

/

Let

not repeat that blunder.

us

announced we
w0llid not help Chiang Kai-shek.
officially

We

ourselves created the
Again
Red
satellites
moved in and won domination
over 450 million Chinese who are
right this minute killing American
Again we
vacuum#

boys
Let

,

us

nations

onjy

st0p handing armies and
to the Russians. The

over

to stop it is to draw the

way

.

All the world knows what nations we will defend for sure and

v

a result n0 attack has been
made on a single one of them.

as

Now

let

way.

as

us

go

the rest of the

should

We

say

where

leadership

of

General

into little

Greece

we

to the rest of the world,

Let there

be

no

wars

more

blundering

big wars. The
with
her
allies

or

peoples of Europe and United
States
governments have been ral- sb0uld make clear their
to their own defense by the
purpose>

inspiring

and

dictators move into vacuums.

The

their

if he

in Korea

tack

stand

Rallied

and

Turkey

common

should

be

Eisenhower. Everywhere he has brought into the North Atlantic
p
ailu ciicii uil uu W 11 iu
jr
v
xxxxxxavvixiavvx^ ,
?d H—and-then on down to .gone his presence has dismayed Treaty immediately. Then we
^ape Horn. And still, with all the'the Communists and fired the should settle other questions.
RuS1 industHal caPacity of courage of free men.
Will we move into war If not,
if the
Red Czar invades Iran?
J a; daPan' Germany and the
Vl,rtnclnvla
rest
Yugoslavia,
once
a
Russian
to the Panama Canal-if

Sea and

we

t

Let's
then

let's

swers,
an

make

-

Western Europe the Rusv

sjans could
me

,

-

--

take their

and bomb

us

own sweet

out.




-

—"

satellite, has become the greatest
thorn

in

Stalin's

side.

Titoism

up

minds and

our

tell the world the

dental

war.

of

Turks

let's make

have

in America choose to live

we

Lincoln's

have

others to

in Korea reminds
world

we
will
because we
will inspire

tradition,

our
freedom
earned it. We

keep

I have no

do likewise,

doubt as to the outcome. America
will

will

We

because

choice

fearing

women,
no

other.
the

path of

the

choose

always

freedom.

that

make

brave

and

men

God,

make

can

Ours is an abiding faith

of human

cause

freedom.

We know it is God's cause.

With Brown Bros.
(Special to The Financial Chronicle)

sure

divisions.

25

The heroic conduct of their
lem

If
in

an¬

friends—all of them.

our

The

And

be a

the Kremlin Will no longer
me xvxenuxxi wxxx xxu xu

nobody will ever have
to drag us into an acci¬

so

excuse

and

mania and

in

be gone.

BOSTON, Mass.—John H. Zook
become
associated
with

has

troops Brown Brothers Harriman & Co.,
10 Post Office Square.

that the Mos-

us

contains

great force
than 200

and great courage. More
million
Mohammedans

have

a

woritl

de Rensis Co. Adds
(Special to The Financial Chronicle)

soreitus

(Special to The Financial Chronicle)

stained from voting. It is time we

BOSTON,

will we let him take all of
we let him take au 01
0n and th;en take Iraq and
and then perhaps march
will

Mass.

—

Davida
_

C.

Street.

Wants Troops of Spain and

Yugoslavia

With Adams, Sloan
Spain
has
22
divisions
and
Yugoslavia 30.1 want them on our
(Special to The Financial Chronicle) i
side. Brave Rttle Greece, which
SARASOTA, Fla.—Howard Wilhas already won one war in the
Uams has been added t0 the staff
last five years, is stoutly prepared
of Adams sioan & Co., Inc., Coto do her share again. Greece can ]onial Hotel
Buiiding.
*
produce and is willing to produce
-.r«4
10 divisions right now. And yet
Louis McClure Adds
there are some in this country
—...

haggle

over

whether

we

should produce 35.
The memory of

Lincoln reminds

that there have been dark days

Us

(Special to The Financial

effort

Iran's
iran s

States, the Copperheads
that Lincoln abandon
to

preserve

Chronicle)

TAMPA, Fla. —Edgar C. Rowe
associated with Louis C. Mcpi,;rp

Street

Tamna

308

'

throughout all our history. When
we
last battled in the War Be¬

Joins Bache Staff
(Special to The Financial

Chronicle)

the Union

CHICAGO, 111.—Robert G. Nussand compromise. Fortunately for haum is now with Bache & Co.
us and for the world Lincoln was 135 South La Salle Street. He was
no weakling, no appeaser. In the previous with Faroll & Co.
darkest hour he stood more stead-

fast than ever. Let us remember

great history. Let us not start
inomson, mcivinnon auu
for cover every time
(special to the financial chronicle)
things go badly in Korea or some
CHICAGO, IlL—Morgan F. Mcplace else.
Donnell is with Thomson & McAbove all, we must have faith Kinnon, 231 South La Salle Street
in ourselves. Prepared, we can
outproduce, out-think and outIrvinff Gold Opens
fight the hordes of communism
5
^
every
day in the week. Free
Irving Gold announces the open-'
American industry can keep ahead ing 0f offices at 40 Exchange
of slave Russians forever and the place, New York City, to transact
Kremlin should never forget it.
a general business in unlisted se¬
We have the winning cause be- CUrities. 1
cause every man on earth wants
Establishment of Mr. Gold's ofto be free. The world is discover- fices was previously reported in
ing that communism is slavery, the "Chronicle" of Jan 25.
Let's help them discover it faster.
Every dictator is a craven, selfN. Y. Group of AIB to Hear
ish bully, exploiting millions of
others just to k;eep his job. DieJohn Donlon, Executive Vicer
tatorship is a rotten thing ana President of Edwin Bird Wilson,
there are millions of people who
Inc., will discuss public relations
would rise in revolt even with the
.
odds 100 to 1 against them if they at the Commercial Bank Rou
thought they had a chance. Let's Tabie meeting of the New York
give them diiu
a ^chance. ^Jft's^^give chapter, American Institute of
em arms
inuiicy and hope.
them arms and money uxxu nupc.
Once again the cause of free- Banking, Feb. 15. Th
g,
dom is rising in the world. We scheduled to start at 7 p.m., wilt
struck bottom in the last few be held in Room 412 of the Woolmonths but nothing on earth can wor^b Building, 233 Broadway
stop us now—that is, nothing except our own follies,
Tristram Johnson Opens
if we will resolve our doubts in
favor of courage and actional can
prinCETON, N. J. —Tristram
see the day coming^when Stalin
• johns0n is engaging in a secur^
our

running

w

,

1K

wi^have

at 194

somebody else.
I

can

nnrP

of

C1,ivw"

bombing bases there

our

for the defense of America would

his

There is grave doubt that Stalin
wouid ever have launched the at-

•

..

a

demanded

iine

-

tl

aanelles gone> me become Medi
eastern Red
terranean would

tween the

drew the line.

,

Operation Withdrawal is Opera-

.

remain

in
and

Bulgaria and RU7
China, even in Russia
itself, and when that day comes

Hungary

„—u

Let

, .

Groero
and

pick off

nation after another and then

one

win this peace through
cannot protect ourselves by
-Once and for all lets stop this strength We must aiso iet the
withdrawing from the rest of the business of waiting for wars and rest of the world know what we
world.
crises and then frantically im- win. do and what we won't do.
^

we

would

£» WHh Greece
toielles'son^^lm Easter^hfed^-

who

This time let

«f Waiting

st°P
"

a

win the peace

us

Win Peace Through Strength!

against

then

m

This time let

•"

a triumphant
enemy.
I do not need to labor the
point.

neapp.
peace.

no
no

boys would be at war the in-

stant the Red Czar moved into
Europe. They are our own flesh
uranium? The Russians. I suspect and blood and who denies that
we-would overnight find ourselves America would send them every1
nn-fhocpn
fighting a land war in Africa for thing we had in the air, on the sea
the defense of the crucial uranium and on the land? I say we should
for the atom bomb. And we would reinforce them now while, Europe
be fighting that war thousands of can still rearm and prevent a war.
the

Nobody

Yugoslavia should fall how

is

tried isolationism twice and each

aefnin

iong

time to be strong.

a

troops who
performing their duty in the time we were drawn into a bloody
occupation of Germany. We have fconflict still unarmed and unpreAmerican troops in Austria, in pared. We fought two wars for

uranium,

Nobody

slaves

Poland

and

time

no

are

bomb?

will

Soviet

the

free

Czechoslovakia

brought the. fu" N" of Islam Campbeu'is withl. Arthur WarcounseHf more securely to our slde'
ner & Co., Inc., 89 Devonshire

this is

friends

my

despair. It is
It

American army in Europe

112,000 American

from which to deliver the

bomb.

gets

No '
for

Europe.

not

ranean

will

If she does
satellites what will
o«^nnco
w«ou
wm

lul!ir

be- stronger. She has hundreds of
bombs where those came from."

Those who argue that we should
send an American army to

ktom bomb. The bomb has kept
we

a new

on

move

1

tWhen
emancipation, proclamation

devout religious fervor and they
Each of the explosions said in
BOSTON, Mass.—Theodore T.
havs no affinity for Godless com¬
Vietri is now connected with P.
thundering words to those four- munism. Their world
spreads from
teen men darkly conspiring in.the
S KSTnS de Rensis & Co., 10 State Street
Kremlin:
"Beware!
Stop
your S rhim in th? b>«t vote ?n the
plans of bloody conquest. America
h
the rhina issue
Joins J. A. Warner Co.
is strong and she means to be United Nations on the China issue
a number of Moslem nations ab¬

cause our freedom was imperiled
by the armed conquests of a dic¬

not

does

to

dare at-

never

T can see the day coming

year.

knows

,

happens

intends

& Tnd ShareS^

0f the frightful follies of its appeasement of the Reds in China,

up for

ari „ilve. in ^r?.edorn-,.

;

slavia

One of the greatest triumphs of

Ruction I want_ to s_ee my
Tact Y'.?1. coura/e and

'

what

Russia

through

So

i

n

from?
From T Jr1et *ne confess immediately that
overseas. For years Russia pro- ^ do not relish entrusting the fate China.
It took a war by Red
vided 50% of all our manganese. of freedom to the shifting whims China to wake up our AdminisToday the largest sources are in 3jd, demonstrated incompetencies tration, but at last they are acting
Africa; the next largest is, where,?f ;.
P^8?.^ Natl°nal Adminis- as though they are seeing the
do you think? In India—halfway fratlon- 1 did my best to throw .light and will start backing up
you
\*ie*?clT,0ld: a couPle of years ago. the fqrees for a tree China.
around the world.
And I m sure somebody else will
Another
thrill
of
hope went
Steel makes automobiles, trucks, '^eed'ibuiruL "lwei?1
„nfl nw
nW
hi iiHinffc
succeea in that ettort next year, around the world this last week

Meanwhile,

we

sas sxfar.sis?, sx&'tss^ssii'^nowhopl of French victo^oler
^^Rumania^bombs fall
invade Yugovictory
atom

our

Fortress America?-Where-do

would

bomb it out? Nobody knows. It

Communism

do

come

manganese

Or

send a marshal js a vacuum and dictators move
Army to hold down into vacuums.
pe??ieiiast week
There is strong reason to beleaders of Italian

•deserted the Russian

'

even

hands?

+ui

survive without these things,
But, with what would we de- world than to see us isolated, suf.ferti ourselves? We are short 50
^ted and exterminated.
basic metals. We might get along
I do not want.to see my councan

Russia's

o

Military Snppoit

of our coffee or tea. We
of our coffee or tea. We
-

nnd none
arid none
•

Czechoslavia

^reported , to have escaped and

of

With Full

of

35

.

Europe

Europe

see

Nassau

the day coming when

will
wxxx

be
uc

united and

her

-th

Street.

Hemphill,

par«?ons

&

Co

Israel scattered forces will be welded Parsons & uo.
down into
an
unconquerable power Trust Company

He was formerly

Noyes,
and

the

Graham,
Bankers

of New York.

36

The

(744)

The

from

ings

2

page

.

..

.

,

..

i

t

sets

lies in the present-day

foreign business and difficulty in

—*

which

*

seeks

Howe
jnowe

shibboleth

"growth
does have
aoes
nave

certainty
certainly

because

the

loss

of

.

high

Drice6

;<"■ converting foreign exchange into
-J-"—-

that
xnai

aonars.
dollars.

xhe
xue

precious ingredient—growth over

decline

from

♦Vin

5U9L

tViot'c

voorc

of

"

out

Wnuro

Qnnnri«

fnr

result

company

has
uas

resuii.

the

th#*

nlH

ana

been
ucch

1946

high

pfumhincd

»tu

ior

rr

LOEB

J

nnf>ratina

-»7o

television

area

.

EF.^C^aC,
Paramount Pictures

Webster's

Corporation

definition

suggests that few of
in

fact,

about

should
ONE

the

of

could, or,

us

The

lected

^I

would

superlative
sod

excellent

qualities in

so

differ¬

many

ent ways

d i

n

that

it

..

..

.

sions that

S23

estimated

per

of the

the

as of the
third quarter of 1950,

fine

a

of quality

record

a

hnsinesslike

in

one

G. M.

another

I thought

one

Loeb

way,

industrial

s*ud'o more favorable than comearnings probably would be

picture
picture

regards
regards

as
as

even

pansons

Se

-

mount Pictures

-

tually,
all

no

of °u~

Jl s.a

was

good enouah

one

security

possesses

qualifications

these

simulta-

neously, and what i§ best for
is

purpose

Investor
a

not

best

what

Likewise,

is

is

for

story about

I

one

another.
♦!

"

a

for

for

r

one

another,

best

best

not

imor

year

*

one

JLZ™!

of the securities

best, and still do, as one
of thA most riAci^kIa
the mrtof desirable
investments

individual, trustee

in-

or

eligible to place funds in

equities.

The stock discussed

was

Chrysler Corporation, then selling

,

A

$6iy4, and I favored it in December, 1949, come peace or come
large income ^
yield and

excellent prospects for
long-term

forKcolf \ele7s,°"' 1716 should

te™

uo£

large-screen

television

which enables Paramount to photograph the image from a television receiver and project it on a
the

occurrence

of the event

petition

of

slowed
,

.

whole
4

will

the

industry

f

,

_

by

cmjr~*

,

a

0

defense

our

as

economy

££

outlook

from

to

peace

preparation for war, the price today i3 $79. Thus, the income yield
lo the buyer amounted to
over
15%

for

the

unrealized

year

1950

and

the

gain,

18 points, or alFor the-same type of

most 30%.

Investors

I

continues

in

still

think*

most

a

Chrysler

strategically

favorable position.
Uf

it?

However, this year I am going
to pick a second
security I like
best, this time from the standpoint
-

.

...

..

,

think offers

the

biggest
00—

possibilities of percentage advance
considering the low risks involved.
This year, we looked for a stock
which is unpopular and deflated
and

•

where

we

should

make

a

mqu

other

Kn

figures

the test

But

of

m0re

fellinto
,

.

it

and

re-

..

in raw materials is still
significant.
The company

erves

and

^dlng c™ief ifchose ^
it'lr ijodl"
eofeeftote of oU
"i
naturai

|a™0le
1949

7,?'

obieption

and' reputation

power

published 9 months
earnings were S10.10, so the year
promises to be around

provef

bas

hafe^hf'

to

660

indeed

a™

The

time

tax

while

'

b

aD.

j. c. LLTTWEILER

& Co.,
Memberf x# Y. Stock Exchange

independent and

success

Vh^anve^menf^

The security

picked

the short

likes best must

one

th^se

be

days with

an

future.

range

happened since

a

eye

Much

to

year ago

invest_

Korean

un-

aas ueen un-

der constant liquidation and the

capitalization has been reduced to
2,300,000 shares believed to be

outstanding
We
a

are

today.

<

faced today with at least

"preparation for war" economy.
means
that by mid-summer

f^is
UJC

combination
cumoinailon

taxes

on

of
OI

nt;avy
heavy excise
excise

types

many

of

durable

goods

second

a

public

nnen

ac

spending.

a

in-

(Special to the financial chronicle)

so

Daniel F. Rice &

jS^.Ci Exchanges.

lifted with the greater need of

oij

anc|

j^s

products

fensfeffort

So long

in

the

as our

„

.

He

Co., members of

formerly

was

,

.

Prmcetcm

de-

„

„

^

s

manager for Faroll&Co,

coun-

J civifian

and defense

needs/the

romoanv's

oroduction

and

products

chould

likewise

Sjlar

and

natural

eontinue

COMING

sales

company s proaucuon ana
Q1i
0j

sates

gas

EVENTS

hif?h

in

In

A1"

...

,,

national

policy that

ceilings and
pollc>'
pollcy'

in

the

Investment

Field

..

Along with other oil companies,
the labor factor is in low ratio:
about 13 cents only out of each

Feb. 20, 1951 (Detroit, Mich.)

flexible

a

last

Detroit Stock Exchange Annua!

Dinner

t th

Hotel statler.

prescribes

wage Feb- 21, 1951 (Milwaukee, Wis.)
Milnrciilroo
Milwaukee

four

conserva-

years,

than one—quarter of annual

Ann
Annua!

r'lllFl
Club

Rnnrl
Bond

Meeting and Election at the Mez-

less

zanine Room of the Elks Club.

;

earn.

^as paid in cash dividends Feb. 21,1951 (Philadelphia,^)
and tho balance plowed back into
Investment Traders Association
expansion. This explains the rise 0f Philadelphia 'Winter Banquet,
book

value

an

of

the

common

defense pro¬
gram.
This

Program

cost

orate

as

J.

»v«.vMuvU&,,
we are through
Wlth it, as World

C.

return, if the stock

10%
does

on

:

Memorial Day outing.-"'
- ^ v
V

^

-

annual

Club

Bond

r-

-

:

•

cashed, of over June 11-14, 1951 (Jasper Park,* -^
a price of 90.
Canada) 'VC*?-x';;'
■-

not permit an

Suffice

Dallas

.

War

Despite

all

pav-as-you-go

whether

II

even

shoot-

a

the

clamor

policy

this

in

it

is

our

it

mid-west.

to

company

say

Investment

elab-

that

it

It

owns

its

tion

Dealers

Associa-

Convention

-of.k Canada,

Jasper Park Lodge.

are

Investment

own

fleet of ■ tank steamers, railroad
tank cars' extensive natural gas
pipe llnes recently constructed
and a number of refineries, severa* 01 which

ay*

"

•

,

of

(Phl.adelphh,,

Philadelphia

Summer' Outing

and Dinner at the
Manufacture^
Golf and Country Club, Oreianu,
Pa.
—

ultra-modern

program

^orld War

^

Traders.-Association

«a1!c

,

•

Jun«^2-24, 195i (Minneapolis,

r

.? «■ *

for

a

stock where dividends
might
It is Paramount Pic-

be increased.

New ^.0JP0raJ.l0r1' the so-called
Pi^urethe New York Stock
Company, cuirent1> traded
on

Exchange at $22,
Paramount Pictures Corporation
is unpopular because of the
pub-

the ability and the

for

I'he

"go-

tax

gible factor

ation.
This

on

recommendation

is

made

movie tickets is already high, and against such a background. One
it is significant to note that no of the best safeguards against the

further increase

was

suggested by

Secretary Snyder, probably partly
because

of

because

spending

lie's fear of

k

need

jng to the movies."

television, because of tion picture
the unfavorable
publicity in con- terfere with

this

fact

theatres
the

nection

and

money

war

partly
in mo-

doesn't

effort.

in-

The

declining value of

money

is

in-

vestment in companies with good
management,

current

in

especially

essential

with

earning

raw

large

materials.

assets

The

1950

natural

gas

rontrth^ inwfa+SGd
thP
>a^° one-eighth

m

n«ri"v

widely held
—uciu

Paramount, located in
United States, from the other




;
rrr;J,iprc

/naiia®

w

/o

i?ian

ope

25-30, 1951

t

As^o-

\
Tex.)

a milllon Oct. 12, 1951 (uaiias,.
.numb°r of
Dallas Bond Club annu
ng If relatively umbus Day outing.

quiuer 0
charAc

of

the old

®F°n

of
Calif.)
uacpanys ^c01]10.
National Security
asse*s °/ co°sequence sociation Convention
arpa«^~T? sharesvu ra^le war ronado Hotel.
v!
areas." Its
are

gation which
aration

nparh.

.

SeptL^?|f^

rf

power, proven capacity for
growth,

and

in

Col-(

(Hollywood

Beaoh, Fla.W
the

rate

as-

compared with

of

loss

is

slowly decreasing
Earn-

a year ago.

ures

the

up

admirably

above yardstick.

according to
Good man-

stock

adHpd

the rumored

*

;

Waldorf-Astoria Hotels

June 15, 1951

Luitweiler

without developing into

doubtful

con-

policy of f.\>
:
conMay 30, 1951 (Dallas, Tex.)

may

°s

war.

a

were

description of the

itself.

much, before

a

or

Space

huge

a

if the 1950

so

year's dividend of
$5.00 in cash and a 5% stock divi-

$9.00.

l

.

>

Last

dividend

..;

.

Security Traders Association of
But the stockholder New York
Annual Dinner at the

faring well and will

dend meant

•

-

April 13, 1951. (New Tork City)

extra 5% stock dividend is

tinued.

and saddled it

with

now

tinue to do

Harbor,

-possible third
world war

ing

wide

With Daniel F. Rice Co.

re-

own

the New York and Midwest Stock

is

for

field

^

-

by proration regulations in various

"incident,"

tainment

of

Pn

has been heM back in recent years

like

C0Upled
with
shortages
should result in leaving the ent°ersource

Rr

expansion in
PRINCETON, 111.^-George H.
production is indicated. The latter Dunn has become associated
with

higher today.

^

has been

and

from $46.91 at the end of 1946 to
$89.16 at the end of 1949v
It is

policies.

The

Pearl

new

production,

crude

w,,tr»hinc

He was forme
Co. and Mitchell

&

.

ment

government s vast expen- the
country to
ddu£es abroad are already easing the threat of a
the foreign e^chanf^ituation
bince tr
the stock
company uie siuck

refining

Detmer

Hutchlns & Co'

lnte.

distnbuting outfit. In fact, its

in

...

Since the formation of the

producing,

J?'",?.?

.

well

a

»

La SaUe street

with

reserves.

f jnery capacity is double its

tive:

has awakened

vn<an

ls

company

grated
5
1
■

barrels to

Dividends have been

Cities ServK* Conpany

affect
^

million

xhe

a

P^ner. Bendix. LuitweUer

has

enormous value lor
television.

100

income dollar goes to wages and
ir>"—"
"'orr""
^
salaries. This is important under

to

T,

thJ

At

low and income

seems

eventiiallv the time

cour^ evenUially theParatime
when studios like

on

oc-

*ood
&

come

T*.v5fexhibition

the

in

h

a mucn
stock, and

combination of them

spectacuIar
waitinff

por-

XFZ
will
be

television

for
.

a

ior

the advance in price could be

cur

within 40 seconds of

screen

As regards the anti-trust
litiga¬
capital gains. Dividends actually
paid by Chrysler in 1950 totaled tion, Paramount is ahead of the
$9.75 a share, and -despite the

changed

can

group try is geared to capacity output
severa

Jr

f

maxe

Fiigjher market

tube

se-

only deflated

..

00111(1

.

at

war, for a

S10-9®. ?n.77 and $14B7per

at

or

.

lection of almost the

possj^ie developments pointed out

oomPan> has also deve oped a sys-

large

,

Chromat

is run

as a thpatrp producer.
theatre nrnduppr
thp
This stock seems the ,best

Televislon Eaboratories. !nc., r
,
develooine a direct
«men is aeveiop ng a airecr view r?
vie\

liked

for any
stitution

eainniLS

SU^

have^otTen

-

Corporation, which

not °nl>' °wns abou'

0{ gross. The studio

om^ff ^IveThtfbatiftrato-

T CUIU1ra rtl. : ing

"The

J 1
i? euougn
bought and forgotten. Ac-

Ka

the

r® ™ busmessUke one m the
'n<^u.s^r^? aP^ comparisons of net

XneeteTV Sta"i'on KTLA° PlS industrial stock market
JL^.S5 percentage
Lt.h°"ihl^"1.d._have hasg a1or into S? to^hromSc ^«th_a future. Any one of
biggest
advance, or
be

film

Corporaspecifically, catching up with

no

the
4^

The

^ share
ld y adding to these reserves New
Paramount Pictures Corporation oil well drilling m 1949 added

the

The

curity I Like Best " might easily
mean the one Ed
buy ihe most of,

to

annual

...

tion

earnings,
dividends,
popular.!.
security is good enough to be per- and market price
manently rated as to future'deIt is strange that the public's
velopments.
1CdX
fear of television embraces Para-

the

annuaf"earnings * 15

snare

m

doubled, fixed charges on debt al-

end

has

.

and Paramount Pictures

the

never

Taken

such
share

^et wLkfag Capital

.

..

motion

€act is that

lbe

obviously

is

other assets

are

and

caUnreverse itorif Z iSutt** Production^ second possibly only
™fiLnto Metro. The studio is probably
picture stocks, as
group, LZ:

with

intended.

-

studios, British and other foreign and
its
operating
subsidiaries very wlse ,ndeed'
at
>nteres,s and sonie other property, have huge reserves of proven oil
end of the vear for
curDeducting various funded debt and natural gas which in our presWith Talcott, Potter
^d other liabilities, the asset ent day economy have become as
(Special to The Financial Chronicle)
company is $2.00 annually, and ™!ue * conservatively close to essential a ravv material as steel
CHICAGO, Ill.-Frank J. Eng.
even
though this makes an indi- 939 a ?
L?inL^mHt>r or W'heat Morcoverits active, Jish has become connected with
cated
current
income
dividend P™* the stock is selling under ambitious drilling program is lapTalcoU
Potter & Co
231 g
«
yield of over 9%, it must be con- lta net current assets

misapprehen¬
"writer

^

Sf2
caDitalNation outstanding
the
1950
The
fentdif Lndoftheneivnirture

„

story would
leave

n

estimate

kTLA

Z
i

sidered low.

the

g

,i

.

.

.

•

strangers
re a

l ^f

PXN

^

^^iou™ highs

2^ The new estimated on a
picture company
were

be expected to
have so many

54 90

Famol,s Players themselves h ave

Bow-Jones

publicly write at
security we like earnings

one se-

of reserves and increased book
seem to justify
the

baiance sheet assets actu-

with

nw

accumulation

value would

(1950) 63^

*

J

operating

suits, rapid growth,

91%

6%
4

Low
low

market

a

$h.87

Prlce ran8e'
High

non-

a

no

about

Qut

a

best. The particular

and with

...

high.in 1946
at this writing stand

°f ?I?

in

$1.72

debt

Earnings per at.

lJ^sb^e^^has

itg spectacular price rise
over th
past 10 years. But

16,300.000

eS
SSSSSTGS
££^B5S&£S3 ^ftL &

^Sm^nJ^is^pthe* HuV'
"rials made

Corporation,

theatres

175,500,000

v

direction
In ™any ponseryative quarters

.

^.soo.ooo Hive men^ m

28,800,000

tn

*iiEW

new

r£^°on£
high.

"best"

market

the

to

qq% Qf Famous

owns

Canadian

aers

a
a

of

pom—

uie

compared

PXN

figure
G. M

1949—

—1940—

__1SW

earnings could go Gross revenue «238 700.000
in time.
woSingTapW
73,800.000
The book value of Paramount Fixed charges on

;Thursday, February i5j
195}

york
stock
Exchange
might work in the same

the following

back to their 1946 tops,
.

.. .

from the Curb Exchange

^

following items:

the

Tntrp

results

in

^

^

of the economy,

.

and

—♦

^ement s^

possibility that if the amusement Take
industry catches up with the rest

But perhaps its greatest attraction
-

ap-

reflected

i«

ort^mAnt

,

least

:.l™*e

Security I Like Best
.

at

should

1951

in

t

,

,,

Continued

Chronicle

Commercial and Financial

T°U-+

toansfeJ

?Xe
of toe stock

Investment Bankers Associahon
Investment Bankers^
Holly

^oodBeacrHoteU1

yolume

Number 4986

173

...

The Commercial and

Financial Chronicle
(745)

i

*

.

Continued from page 5

the

ever

Georges, the Byrds, and the Douglases
by other Senators on both sides of the

bered

Observations...

at

tive

many' !.'non-pressure-group-protected'' groups in the community
restrictions on bank crecut and other controls.
Actually—is that bet

shot?
J

higher price level in 1961

so

Deficit Financing and the Price

y

j

down

the

price

level

But the multitude of orders

curbing

the

use

of

and

the

preserve

emanating from
the slaughtering of

materials,

that

"scare-buying" gives an artificial lift to
''borrowing from the future." And surely

the

corre¬

Washington's long string of pronunciamentos have given a 100%
push in this direction—-viz. the successive statements about im¬
minent shortages, the dire need for
price ceilings, and statements

level

such

functioning—this having been-repeatedly

else,
policies which further dollar deprecia¬

should be complacent over

nor

anyone

tion—undermining the holders of all savings media,

well

as

as

the

Treasury's obligations. Perhaps nothing short of full and con¬
tinuing gold convertibility—with "gold discipline" counteracting
human frailty—can do the trick.

Pending accomplishment of the needed economic reform, the
Savings Bond constitutes the citizen's best savings medium, and
of several useful instruments for the investor.

during the 1920s and our deflationary '30s, following the disastrous
experiences in Germany,and. France, and the Brussels Conference

against

as

Congress,

about our Treasury interference with the Federal Reserve's

;

via

Administrator Di Salle's current
statistically pin-pointed
prediction of a further 5-6% price rise by mid-year.
Neither the Treasury, nor the

almost one-half). Although the quantitative in¬
fluences toward inflation may well remain, the direction of the
controlling psychological.factors may well be reversed.
As we pointed out in last week's column, there is
nothing

V

level

price

here

one

Continued

[:S7- Let

from first

"Escalator Service" for Bondholders?

;■

consider the proposal made that the government
along, with its savings rbonds, compensation at re; demiption to allow for any intervening loss of purchasing power.
; This proposition, advanced for some years now by Professor Sumner
Slichter, is winning increasing approval midst the public's
^current ^inflation new era" and the emphasis on the amount of
E Bonds being cashed-in.*
(This device was in vogue at the end
c of the great
German inflation, when bonds were floated, repay¬
able in terms of the value of coal, wheat, or rye.)
escalator
'hav£;'to be a two way provision—adjusting for de^iC5^ine|iaJ:wpll,as rises* in the price -level. A "gold clause" is not a
case such a protective device is parindefensible;'' .because of other affirmative investment

Even in dealing with

power-

.•|«jfu(^union labor, the escalator provision is two-way—at
nominally

so.

.«

;

.

::J,

r.t.

least

'.*•'

^S'J^fextending this gold clause-like device to Savings Bond•ifholders would exceptiorlally favor

a

single investment medium.

many
Lother.'savings media; as deposits in mutual savings banks, shares
in savings and loan associations ($16 billion presently residing
in our savings institutions), insurance policies, and other govern-

7

ment obligations.
with other bonds

All presently outstanding
would

be

government along

severely harmed;

and their further
distribution rendered vastly more difficult. Private debtors would
be unable to meet such competition of a guarantee provision,
because

of their inability to tax to recoup the cost thereof, or
protect themselves with equity assets to meet a rising price
situation. (To the extent that they were able to shift out of fixed-

to

,

interest assets, they would be adding to the present "inflation era
scramble" into equities, and abetting the inflation panic over the

dollar.)

!

•<

"Escalator

service",jfor bondholders would subsidize another
at the expense of the rest of the community—of
which special privilege there is too much already—thus further¬
ing rather than attacking, the basic causes of the inflation. And
the more groups.that the government exempts from the effects
l; of inflation, the heavier will be the burden, through increased
taxation and impaired purchasing power, on the unprotected and
j unsubsidized remaining groups.
special group

'

'

Freezing the Inflation
This inclusion of

protection

from

larger segments of the community
inflation underlines a vital objection to
ever

into
the

escalator

principle, namely the permanent cementing of the in¬
flation trend into the economy; and if not actually giving the
public a positive "stake" in inflation, at least removing the selfinterested motivation for opposing it.
r
,

Going to the Roots
v

Instead

Ex-Politics

"

'

,

The weapon of taxation should be
with to curtail the great flooding of

used non-politically

forth-

the spending stream with
armament earnings leavened with the current buyers' scare psycology.
To reduce spendable income wherever it is, tax^ policy
must be removed from the political sphere, raising the imposts
on lower and
middle-income groups in lieu of relying on progres¬
sive
"soaking-of-the-rich"; and obviously higher and much
broader excise taxes should be imposed. Taxation must be used
effectively to keep the demand for goods and services within
the bounds of the available
supply. In this anti-inflation area the
Treasury has more responsibility for constructive action than in
others, but it must be remembered that in tax as well as in spending and other policies, the controlling exigencies of politics dom¬
inate the
Congress, the Executive, and practically every other

government policy-maker.
The
A

present

shadow-boxing

with

non-defense

spending

should be stopped, and such outlays drastically curtailed. Here
again the responsibility for excess cannot be laid at any single
door.
On the one hand, Senate .Finance Committee Chairpian
George, Democrat of Georgia, this week accepts Mr. Truman s

challenge by insisting that his budget for the coming emergency
be cut, $5-6 billion without harm. Unfortunately, how-.

year can




well

are

below

It seems to met that to exagger¬
the
performance
of
"The

ate

averages," which are, composed
usually of a limited group of

high-grade

issues, is at variance

with
our
own
program
of in¬
formed investment. As brokers I

know

that

purchase
own

ket

advise

you

client

a

particular stock

a

It

is

average

J

the

mar¬

'20-year
•

noted

nection that "the
ure

a

'

be

may

at

to

its

on

merits, not because the
on

peak.

dollar

in

this

averages"
value

of

con¬

meas¬

stocks.

They are no gauge of the pur¬
chasing value of those dollars. In
terms of

purchasing

dollar, the market

of the

power

is
actually far below previous high
average

on

to

California, and
to

sense

about

credit.

is

here,

stay

You will be

tends

very

Exchange, many people hold, sets
the prices at which securities are
bought and sold.
:
: -

interested, I believe,

example of
public educational work in an¬
other pioneering state. Just a week
ago in three cities in Texas—Dal¬
las, Houston and San Antonio—a
section of the trading floor of the
hearing about

New

of

in

Exchange

principal hotels of
The

occasion

was

a

meeting of the Board of Governors
the' Association

of

change Firms.

Stock

Ex¬

Leading Exchange

Association

and

of

Goverors

;

A

corollary of these ideas is
that prices on the Exchange, are
rigged. Even professional people,
those

and

who

should

be

better

in¬

formed, sometimes accuse the Ex¬
change of price manipulation.

was

ball¬

crowded

the

the

cities.

those

an

Stock

York

re-created

Stock

The

good

much alive.

in

further.

the

even

Such

charges,

say a

\v

-

few words
'

•

1

still

had

the subject of the

on

market, I'd like to

Concerning Stock Market

of

course,

the

Federal

Reserve

Board raised the initial minimum

margin rate from 50 to 75% of the
purchase
Board's

price of
decision

made. with
whole

the

nation

a

stock.

obviously

was

mind.

of

the

As

welfare

in

The

our

Chairman,. Bob. Boylan, stated at
the time}' a - riational emergency
exists and the Exchange seeks to
cooperate with the government in
/degree.
The
new

the, .fullest

restriction" is

credit

being

fully

applied, of course. •'
We

have

would be less than honest,

we; did not state
thirties. firmly our belief that use of
credit in the market is not being
We have just not told people often
We are just as firmly
enough how Uhe financial com¬ abused.
munity, with the aid of govern¬ convinced that stock purchases on
exchanges
ment agencies, has adopted rigid margin in regulated
not
increased inflationary
rules and regulations designed to have

their origin in the stormy markets

however,., if

of the twenties and early

members acted out the mechanics

prevent any recurrence of past pressures.
Back in 1926, when figures on
Under
Exchange re¬
buying and selling stock on the excesses.
New York Stock Exchange.
were
first
The quirements and under the Securi¬ member borrowings
display also showed how fluctuat¬ ties Exchange Act, there is today compiled, the total was more than
three and one-half billion dollars
ing prices reflected the public's an abundance of pertinent infor¬
investment decisions. Typical in¬ mation available whereby an in¬ and represented about 10% of the
of

participated.
It was an vestor may judge, or have some market value of all listed stocks.
and dramatic perform¬ competent person judge for him, At the start of this year, member
and the first time such a the
investment
or:
speculative borrowings totaled, less than one

vestors

exciting
ance

presentation has been shown to so merit of any listed security he billion dollars and represented
wishes to buy or sell. There can less than 1% of the market value
people.
be no return to the pools and of all listed stocks.

many

Public Misconceptions
Before I discuss some
our own

several

manipulation which were preva¬
phases of lent in the days of inadequate and

work, I want to talk over
of
the
difficulties and

information

incomplete

about

publicly-owned corporations.
Perhaps the most vicious mis¬
problems which face all of us. It
is desirable, I believe, to keep in conception is that "the interests"
mind the ideas we are trying to control the nation's economic des¬
communicate to the public, and tiny. "The interests," as you know,
the absurdities entertained by an are a small group of anonymous

On

the

a

use

ratio basis, in other words,
of credit in the securities

market today is
was

I

90% less than it

25 years ago.

would

like

now

to

talk with

phase of
try to do
so
in terms of practical interest.
In July, 1945, when the Federal
uninformed part of the public— tycoons sitting high above Wall Reserve Board increased margin
Swhich
the complacent tend
to Street and carefully plotting how requirements from 50 to 75%, the
to defraud the public, particularly
shrug off.'
Ai*
''
industry was faced with this diffi¬
widows and orphans—and, in the
culty: substitution of one stock
Many public misconceptions are,
in my

putting more of the population on the escalator
keeping pace with inflation, let us rather go to the root of the
trouble.
In prescribing what is to be done, we should realize
that the remedial action must be taken on a broad front, and not
merely promised on a concept of "Treasury-cheating."
of

stocks

previous high marks, even in the
current rising market.

Recently

rooms

|f;;liwybhld directly discriminate against the holders of the

goes

A Few Words About Credit

and Facts

an

;,S^^^y;.prpposition; in ::this

f^{aj%ritaiges embodied in the Bonds.

market

of individual

decline; That hundreds of

individual

While I'm

us now

Jm;the first place, it must be realized that such

stocks

page

should offer,

•

that the

levels.

Resolution of 1920 and the .Genoa Conference in 1922.
Vv

day

every

up on average, scores

now

deficit

The'/Treasur^ has had no cash deficit in the fiscal year 1950*
noc-'/tnidst, the inflation-hulla-baloo during the first half of 1951*
and /since'T949 there has been little expansion of bank credit'
Duni^^hCf^bnetary expansion from 1937 through 1941 the cost
oNTjying;^index remained, practically stationary (and common

warned

value.

s

keep

incontrovertible

:

new

to

animals, and imports, surely are not aiding a production
upsurge.
Controversial as the subject
may be, still the conclusion seems

stocks 'declined

-

economy

Washington

Level

^Great ; misconception exists about the alleged act of
financing on the price level. Actually there has been little
lation-evidenced between money-printing and the price

1

in

weapons

dollar

sure-

',

\

?,

:

on a

far outnum¬

are

aisle, who only
for the other fellow, and block every effort
prudence wherever they have a self-interested voters' stake.Increase of production
undeniably is one of the basic effec¬

believe

,T;

37

■

•

opinion, our own fault. We
them to grow and flour¬

allowed

years past.
Business was
profitable to be interrupted.
also lacked the initiative and

process,

We

aggressiveness to counteract them.
That inertia, I am proud to say,

to

their already

it

is

not.

It

ideas should

our

about

technical

a

business.

I

shall

for another and the withdrawal

of

of the proceeds of a sale in
restricted margin account were

any

Although this

in

ish
too

add

to

vast fortunes.

you

is

sound silly,
tragic that such

may

restrict public own¬

a

prohibited.
stricted in

ership in our nation's great indus¬ series of
trial enterprises.
The obligation firms.

Thus,
one

new

a

customer, re¬

firm, could

open a

accounts in different

The Exchange sought unremit¬
It is fair to see that these misinformed sec¬
that the New York Stock tions of the public get the truth tingly to get the Board,of modify
its ruling
on
withdrawals and
Exchange today is exercising its is ours.
substitutions.
function as an orderly market for
Validity of Statistical Indices
securities better than at any time
On April 1, 1948, the Federal
But only when we know our
in its history.
The members of
Reserve Board permitted substi¬
the
Exchange who execute the targets can we aim the facts most tutions in restricted
accounts, but
public's securities business are re¬ effectively. Incidentally, suppose only if they were made the same
sponsible men who take great we consider the worth of a little day. That modification was help¬
pride in their profession and who missionary work in the matter of ful.
But it did not entirely cor¬
operate according to just princi¬ some of the statistical indices.
rect
what, we thought, was
The market, according to most
ples of trade. The standard of
basically wrong and unfair. Our
probity among Stock Exchange of the popular averages, is cur¬ position was that unlimited sub¬
firms in unexcelled in any other
rently around the highest level in stitution
did
not
increase
the
business.
about 20 years. Almost unlimited amount of credit used in the se¬
is

no

to

longer tolerated.

say

We also held
nevertheless, still a significance is attached in some curities business.
who think the Stock quarters to this statistical extrav¬ that a prudent investor might
Exchange itself buys and,sells .se¬ agance;, and it worries a lot of wisely? sell on one day, but just
curities. I have run into intelligent people. It says to many of them as wisely/decide against reinvest¬
people who believe the Exchange that the market is getting into ing the ^released money on the
operates something like a depart¬ dangerous ground, that unbridled same day.-1 <
ment store. An automobile stock speculation stalks the exchanges. To Finally, in May, 1949, the Board
You all know well what,I>fqn arilended
comes
off one counter,
an
oil
Regulation T to permit
issue frorp another, textile shares going to say: That the average withdrawal; of a portion of net
are
merely a statistical tool and
from a third.
Continued on page 38
This vein of misinformation ex¬ sometimes a very weak tool; That
There are,
lot of people

38

leaves the stock market
,

the

as

,

only popular hiding place.

capable of. will be filmed incidentally, right
here in California.
the first
There is just one more matter
signal and take mY chances. x would like to discuss with you.

Tomorrow's

TWhninallv

the

a

these

But

Walter

sneakintr

market's still in

phases aren't permanent. A changeover into a
bear phase, however, involves
many factors. First the market would have to react, then
rally, but would be

Whyte

Says —
By WALTER WHYTE=

unable on
to
high

If

you're in the market pass the previous ;
you're probably at sixes and such a rally, followed by
sevens
wondering what to do reaction that would
from

here

in.

on

brokerage house
lic

is

i

analyst says
going higher; another warns
that a top is just ahead; still
another
says
the top isn't
ahead, it has already been
seen.

If you read
everything on
the
market
you
get your

hands on, the chances are you

don't sleep too well.

If on top
get calls from
your customer's man, telling
that

add to your present

holdings,
you're probably ready for the
booby-hatch.
I don't know if this column

allay

doubts. If this

your

column

were

writer

sometimes

think,
have

the

good as its
likes

chances

to

are

he'd

time to write it.

no

be out

as

He'd

making all that

money

for himself.

look

on

this
the

gather stocks
Most of this is

can

higher.

based

that old "debbil" in¬

flation.

from

the

public's in.

But

despite the hoary axioms that
the danger increases as the
public participation becomes
greater, the signs of any im¬
mediate collapse are
very
faint.

That

doesn't

mean

they're lacking.

proceeds of
Under

the

formula

thus

estab¬

lished,

the' recent increase from
in margins has not
denied the privilege of substitu¬

es¬

tate, hard money, currencies,
of other

can

stofks- * still like them

** onjy^at speci

fpexas natural gas
e

countries, etc. Main¬
of real estate

or

the

difficulty in acquiring choice
pieces today makes that me¬
dium less welcome; hoarding
of hard money (gold) is il¬
legal; other methods are
equally impractical. That

companies, to do in
Chicago Corp.

g.,

[The

to

75%

C4

.

I

Stock

you

utes

more

York

Curb

Exchange

(Associate)

San

Francisco Stock Exchange
Chicago Board of Trade

14 Wall Street
COrtlandt

7-4150

Private Wires to

San

New York 5,

N. Y.

believe

I
for

me

relations
you

few min-

a

subject that is

a

well-being of

so

in-

our

dnstrv

day

a

1 •;

Principal Offices
Barbara

Th/

New

York

Stock

change's program

VI

Ex-

deve]
developed

fas
was

under the guidance

ise

that




the prem-

on

headline

the

largely

is

™arket® esse™ial to the
equity

capital

smooth
into in-

11^

_

/,1n

■•I,.

:ll |1 VA

?' >1

Of Sound

■

.•

through

and

developed

being

our

Allies, in

am

not wor-

or

and I

peace,

create

We

it.

need

much

more

In

Economy

an

economy as dynamic and
competitive as ours, it is inevitable that where there are suc-

there

cesses

must

also

be

failures. It is evident also,
may

well

as

be

some

and it

recognized

and

frankly stated, that many potential

of

owners

terred

by

financial
to the

securities

de-

are

bitter

loss,

recollections of
often dating back

1929-1933

confidence

in

our

>

responsible for the extent of the

treatment of
this

of Harol
Harold
VVU.

J

enable

to^roblemsof

rtudvine

Ex

the

charme's relations with the Dublic
with

own

The

^wsnaner

some

everv

ex-

/iving

Another
1X1

Stock

of

operation in
IdlDAXJf AIlg

top public relations

carrying

our

story to the popula-

tions

the

400

of

firms

member
Stock

cities

in

the

New

of

Exchange

have

which

We

are

backing

our

York

offices,

Those cities represent 85%
nation's buying power.

of the

confidence

in the effectiveness of
newspaper

advelrtising

with

a

half-million

dollar campaign this year; an advertisement of the Exchange will

at

appear

tell

least

once

month

a

to

ine
The

fuil

its

us

co-

where

story

in

simple

language—the

non-

story

UUI

is

C11U1. 15

lO

•

16

300.00

4

262.50

6
Apr
.@62% Apr 13
Pacific@73
May 14

225.00

St. L., S. Fr. RR.@29
Merck Chem..

637.50

375.00

Studebaker

..@33%Apr

7

237.50

Armour

mos.

175.00

Mack

mos.

362.50

@12% 6
Truck..@19
6

Subject to prior sale

or

price change

THOMAS, HAAB & BOTTS
Association, Inc.

50

Broadway, N. Y. 4, Tel. BO 9-8470

^

nhvinn*

Exchange

v+;nn
tion

:t,

that, if we get licked either
from outside or inside, our Amer-

of

1S

tZt
Tinlrer's

"ev/ting
devoting

are

leaaers

are

lourasine wider^stock
g w der

"

won't

represent
be

is

*pr>nritv
security

registraiscno*
issues

arp
are

^utorVstTong?yX

a"ts formerly-

worth

damn.^econd

Commission

nPAxr
new

^ ^ security issues are

a

this, our

The stage has been set
^or greater mass investment.
At this time of war and preparation for war, we need to invest

°ck

^ C<?,Uld on this llZ ZZZ l° d° th£ j°b tot
""ZZ must be done.

businesses

individually

IfllZ'rZ'P? h/Ve th° d,iS,ad"

em

S!8 f unllmlted personal liaership, bihty and are not susceptible to

ownershiD

1 am comPletely convinced that

already unique and vitally

our

strong economy
will
be
even
stronger in proportion as we keep

Some companies have reprinted
Advertisements in full in their
own Publications with editorial
c?mmendab°n. In^our conversations with ^management we, in
UFn' have received valuable ad7.lc,e a
information, The potential rewards of thik. program are

widespread ownership.
So
we
have created the corporate form
of doing business, with a great

incaiculable.

finance that same economy. ,That ists. That will go far towards departK, °f our democracy surely bunking -that Communist Marxian

„

Another project

we

many stockholders having shares

in the business.

with

our

existing

characteristics

industries, directly by individual
savers, so that

distribute and

at

mass

consume,

is surely no less typical to

v

have under

°hgbt*to ga along with the

it

mass

other

characteristics that I have talked

and

add to them the financing of our

If it is-typically
Arnerican to mass produce, mass

way is addressed to an audience
5,000,000 women. The General
Federation
of
Women's
Clubs,

that

aware

one and

ducers,

our

they
the

citizens will be

functioning
time, as proand as capital-

are

same

consumers

myth about the inevitability of
the class struggle.
vfe*
■

,

fbeut. It is

very gradually com-, gy way of summarv I hope I
of
18,500
6 about, but too slowly. The have focussed
your
thinking on
individual Pr°cess has to go much further, some of the
many aspects of our
to prepare
are
retain and develop our American economv from" which

a

and

°UI we can all take heartTnd good
your cheer, I hope that I have justi-

^ Td

^cietyseeIt is it does. and
our job
t0
that
I

v

would

sound

not

business

be
if

in

a

the

;

fied

basically

the

conclusion

our economy

that is,

that

because

our

working

securities

assets, are sound, the investment
which Stock Exchange member securities which are the " other
tirms buy and sell for customers side of the national balance sheet,
plans to conduct at its national were not the securities of an are also
sound, by and large. I
convention in Houston, in
May,- eclaally sound economy. You can- hope further that you are conand at some 30 state conventions not
f6}1 ® vacuum cleaner of any vinced that the continued growth
throughout the country durihg
^pecia,! brand if the customer and continued soundness of the
1951.
These will be demonstra- 22esnt want a vacuum cleaner,
country call for mass investment
tion finance forums, with local
ipere will be a popular demand in common and preferred stock by
The kits will be used at finance

forums

clubs

which

the

Federation

conducting

forums.

Speakers

their

for

v e

h i

to

picture

you

for

is

our

which

new
a

average or small

capitalist.

I

.

that I know is of particular interest

if the

+Ze+rS Aa^e
to recog- hope, that you share my conviction
^ze ^tnat American business is that having long since fought for
Ex-' 3?und'. ®nd
Profitable and will and obtained political democracy
st^y that way. I believe that de- in this country, we may achieve
c 1 e'spite
the attacks made upon it a similar economic democracy

supplied

by the Association of Stock
change Firms.
educational

;£r corporate securities only

own

national

and local forums will be

Another
Members Put & Calls Brokers & Dealers

credit, includ-

° do with stocks andUbwids.
iU_A*

.

'

.

with the American Bankers Assoelation and the Institute of Life

Per 100 Shares Plus Tax

ening changes hardly does justice
to their far-reaching effects! Gov-

ernment control of

: wnat nas ail tnis ing stock market
credit,' Federal
credit;
Deposit Insurance, ■ Securities and
Deposit insurance,

'

ownership,

CUllV/lJLg
among

ttlnktae

national emphases upon spending
Bus'?ess realizes perhaps even dollars to save hours takes a lot of astronomic sums in productive
han we do, that grass-roots doliarSi our immense scale of equipment, to the end that our nacapitalism is the most effective mass production which we are tional genius for mass production
a"SWer t0 the false promises of about to expand, calls for capital shall have enough machines and
conrlIn"ntlsm-. A nation of small in correspondingly large chunks, facilities, enough electric power
rapitalists is democracy at its We are doing away with the very and enough railroad transport-:;i

of units,

Schenley Inds.@39% May 16 $250.00
Dist. Seagrams@28
Mar 26 325.00

*•

are

we

membership
5,000,000
ownership, what stocks are, members, has asked us
why they exist, and why there a kit of informational material,
are stock exchanges.
We are doing this in cooperation
our

«•

|

terms

Exchange

flight ^

of

v&>^ftriL>lv

.

to

;Jt w'orking-.

,t and k

this test procedure.

area

lnauftrA1.ai

"advice

the

in

of maximum PUDIIC lnieresi.
maximum public interest.

fts
member,
Exchanged
advertising reaches
^f0 000 000
neoDle
month^ After
tensive research and studf/weh
MustriYl leaders
included
nublic
oninion
inrvpvs
and

us

Ol

W.

4. JLVA v JLOV^JL

will

pin-point our advertising

is

*

advertisements

our

It

year.

Ffrms

tj

largely determine the

Whkffe. monfhs0 has-been lis'ed C0rP0ra"0'ns-

Monterey—-Oakland—-Sacramento
Fresno—Santa Rosa

security

"Zz

WIf

ago we

or so

advertising is based

Association

Teletype NY 1-928

Francisco—Santa

p**pntial

healthy

v

ried that against the test of the
started future, this economic strength will
to use, for the first time, the techfaii us so iong as we maintain the
nique of test advertising.
Test tradition that has enabled us to
Just

we get will

..

,

are;

on

vital to the

on

Exchange

'

war

public

how

South.

York

our

our' people

ceived for the bookletirom each
advertisement.
The information

_

Exchange

know

Western Union@461/4 Apr
U. S. Steel... @46% May

New

the

±l°w ol
public educational dustry.

to meet the needs of

Public Relations

.

_

Stock

CALLS

Members

to

provide

V;

•

Schwabacher & Co.

possible

ownership of
the productive resources of Amer
ica. And implicit in this respon"
sibility,
is
our
obligation

These^ small

Securities
Orders Executed

SSffOSSUZ
individual

trying

productiveness,
flexibility and dynamic evolution,
capable of meeting the needs of

Insurance.

Pacific Coast Exchanges

are con-

we are

hp

_

technical

Pacific Coast

believe,

should

Continued,fvoTti.page .14

this

in

expressed

views

stock

New

The answers, I

tained in the work

our

oojective

stop the spread of communism
dead in its tracks. 'That can he

market*

country's welfare?

p

principal

depression bank
strength and holiday and general world upourselves if we are to appraise heaval.'
eXtion to
any
person who
has a advertisement's readership. .We realistically
the
world /position
restricted margin
account.
An are publishing a limited number which this country now occupies.
>structure of American Finance Is
account
owner
is now
able
to of small identical messages with
j^am not panicked by the babble
^^renffthened 'vV; \
withdraw 75%—not 50%—of the different headlines.
0f criticism of our structure, and
is probably difficult to pernet proceeds of1 any sale.
This advertisements offer, in
I Ufge you all to cease your consuade many such people that the
automatically gives him the op- Jine of the text, a free copy of cerjf w[th
attempts to find a bet- whole structure of American fition of purchasing securities
of • investment t acts.
ine reiauve ter method
if
you
have been nance, our monetary and banking
equal value at any later date.
In val"c of tae headlines, each with troubled
by this ciamor.
I urge system, has been vastly strengthshort, he has complete control a different, appeal, is measurable
you to remember that what we
ened since that time. Merely to
over the funds withdrawn.
by the number of requests re- b
Will do the job if we main- enumerate some of these strength50

flight from the dollar
advertising and
real. During other in¬ counsel, we decided that daily
flationary periods, money newspapers are indispensable -for

tenance

T

37

page

a

is very

could find shelter in real

""

,

-i

sale consistent with
current margin requirements.

and

The

10MMet

this

^

Misconceptions and Facts
Concerning Stock Market

A.XlltAXJL

Sure

turnth» ■"»'

r,

would be a breaking of the this.
What place does the securities
^50 industrial figure. Now industry have in an economy that
i<? arming
aggresy0}1 c^n
f
^rom e V sion? Howitself againstsecurities
the
Las ^ek^ ment.oned a business contribute most to our

strength

minded

Now let's get a look at
market:
From most of

evidence I

on

i

Continued

will bear with

'

•

,

Thursday, February
I5j jg5l

.

.

;

you

you all the "inside" informa¬
tion calculated to
get you to

will

4.1

j

,

'

One

of

j.

major
prices under the old lows. To article do not necessarily at any
the pub¬
time coincide with those of the
than ever. sit through such a period chronicle.
They are presented as
takes a great deal more guts those of the author only
stocks are

says

heavier

in

an-

i»

carry

A

£

I prefer to get out

Itsrs in", bull phase.
lm L;

Markets

.

than this writer is
T

=

Financial Chronicle

The Commercial and

(746)

motion

from time to time, in part from
through each

mixed and even
treacherous

mo-

production tiv.es, American business is
sound

contract has just been
signed.

It

and

is

serving the Nation

well,

tor

or

man

being

an

inves-

capitalist—call it what you

will—in addition to being a pro-

ducer and, of
couree, a consumer.

-

t

Number 4986

173

Volume

. . .

The Commercial and Financial Chronicle
The

Indications of Current

following statistical tabulations

latest week

Business Activity

week

or

month ended

Previous

Month

Week

Ago
99.6

1,969,000

.1,933,100

1,991,000

BUILDING

90.7

1,729,000

of

116,395,000

-Feb.

3

19,981,000

6,065,700
6,483,000
21,106,000

Atlantic

21,050,000

17,830,000

-Feb.

3

2,843,000

'2,873,000

2,657,000

3

9,785,000

9,954,000

9,528,000

3

9,561,000

9,905,000

9,452,000

8,121,000

Feb.

3

129,700,000

126,261,000

119,308,000

127,437,000

Feb
Feb.

3

15,634,000

16,446,000

3

56,776,000

58,997,000

68,198,000

64,039,000

_lFeb!

3

40,617,000

40,378,000

41,914,000

54,590,000

at

(bbls.)

4,945,100

South

5,420,000

West

oil (bbls.) at

oil, and distillate fuel
Residual fuel oil (bbls.) at

60,101,993

;

Mountain

19,510,000

103,770,404

.

i

-

_.

-

23,028,968
12,961,852

__

_

—

.

89,491,974

York

$408,678,390
37,350,881

388,456,714

371,327,509

$310,418,890
41,739,020
268,679,870

143

150

201

$426,607,027

States

City
York City.

of New

Outside

18,095,000
FAILURES—DUN

BUSINESS

BRADSTREET,

&

INC.—Month of December:

Wholesale

peb

784,185

cars)—Feb!

593,632

662,444

612,464

725,547

651,124

CONSTRUCTION

617,322

569,165

Construction

ENGINEERING NEWS

—

private
Public

$555,701,000

Federal

141,639,000

69,450,000

Detail

82,188,000

78,887,000

72,456,000

Construction

73,431,000

65,308,000

274,172,000
121,131,000

66,821,000

Commercial

Feb.

———

$141,906,000

Feb.

>■--

$235,102,000
156,215,000

$415,811,000

473,513,000

municipal—

and

state

62

80

67

67

50

683

770

$5,352,000

$8,412,000

$7,465,000

2,260,000

1,749,000

3,020,000

5,479.000

4,235,000

6,284,000

4,748,000

2,726,000

3,205,000

1,742,000

1,814,000
668,000

$21,044,000

$18,864,000

$19,251,000

6,780

6,256

7,857

__

__

number——"~r

—

liabilities

8,757,000

13,579,000

153,041,000

5,635,000

9,530,000

*11,410,000

10,025,000

6,540,000

859,000

974,000

'785,000

703,000

156,200

*159,600

144,000

16,600

233

*279

285

226

'

liabilities

Wholesale

liabilities

M.—

liabilities

—

liabilities

service

liabilities

Total

OUTPUT (U. S. BUREAU OF MINES): ,
Bituminous coal and lignite (tons)—
Pennsylvania anthracite (tons)
.
;.—

90
349

87

679

number

service

Manufacturing

construction
^
construction .
construction _———in¬
S.

U.

69

310

;

Total number

.

Total

77

330

number

number

Retail

Commercial

CIVIL ENGINEERING
RECORD:

$27,310,952
61,903,158
28,019,321
58,248,704
46,395,520
22,189,045
7,122,523
59,229,667

38,150,313

United

Total

Manufacturing number

ASSOCIATION OF AMERICAN RAILROADS:
Revenue freight loaded (number of cars)
Revenue freight received from connections (number of

$16,134,550
85,297,990
37,936,300
63,116,144
75,501,462
33,852,348
12,508,098
84,331,498

65,441,003
47,560,563

Central
Central

New

gasoline (bbls.) at

Gas,

Ago

7,335,000

-Feb.

.J

2,513,000

-Feb.

Year

Month

$24,250,270

__

__

_

Central

5,787,810

6,347,000

terminals, in transit and in pipe lines

Stocks at refineries, at bulk
Finished and unfinished
Kerosene

5,938,500

3

;

Atlantic

East
3

Previous

&

CITIES—Month

INC.—215

England

South
Feb.

DUN

—

December:

New

average (bbls. of 42

VALUATION

PERMIT

BRADSTREET,

ZI~L -Feb.

of that date:

are as

Latest

96.7

peb. is

to stills — daily average, (bbls.)^
Gasoline, output (bbls.) ^
Kerosene output
(bbls.)_—
Gas
oil, and distillate fuel oil output (bbls.)
Residual fuel oil output (bbls.)---—

either for the

are

Month

Feb. is

Crude°runs

of quotations,

cases

Ago

98.5

Middle

AMERICAN PETROLEUM INSTITUTE:
Crude oil and condensate output —daily

in

or,

Year

Week

and castings (net tons)__—

Steel ingots

that date,

on

production and other figures for the

cover

Dates shown in first column

month available.

or

Latest

AMERICAN IRON AND STEEL INSTITUTE:
indicated steel operations (percent of capacity)
Equivalent to—

39

(747)

-

_____

_

COAL

(tons)

Beehive coke

Feb.

3

Feb.

3

Feb.

;

3

._.

—

DEPARTMENT STORE SALES INDEX—FEDERAL
TEM—1 935-31) AVERAGE—100

X

INDUSTRIAL)

(COMMERCIAL AND
INC.

—

——

Seed—

6,957,284

7,099,385

6,980,845

5,970,919

(tons)

Stocks

(tons)

Stocky

DUN & BRAD—Feb.

191

8

159

193

195

.Feb.

4.131c

4.131c

4.131c

$52.69

$52.69

$52.69

$47.75

$47.75

$45.09

$27.25

J.

M,

&

Electrolytic copper—
Domestic refinery at
Export refinery at
Straits tin (New York)
Lead (New Ycrk) at
Lead (St. Louis) at
Zinc

(East

Louis)

St.

——-

24.200c

24.200c

24.200c

18.200c

Feb.

7

24.425c

24.425c

24.425c

7

182.500c

182.500c

156.000c

7

17.000c

17.000c

218,210,000

160,209,000

172,940,000

116,590,000

133,830,000

207,924

142,801

7

16.800c

16.800c

16.800c

11.800c

7

17.500c

17.500c

17.500c

(tons')

at

:__i_

<->

—

______

31—

Dec.

(tons)

Linters

193,620

S.

DAILY AVERAGES:

BOND PRICES

Fc^' ,X
Feb- 13
peb 13

corporate

Average
Aaa
u

;

_

,

I-IIIIII—IIIIII"———I——I"~II-

A
Baa

(tons)

31—

Dec.

(tons)

-—

Public

Group

i

—

Utilities

Group

Industrials Group

101.39

101.39
115.82

121.46

110,166

127,347

158,420

99,057

—

—,

141,359

168,878

(1,000-lb.

120.02
118.80

118.80

120.02

115.43

115.24

115.82

Stocks

110.34

110.15

109.79

108.70

112.93

112.93

111.62

115.82

115,82

116.02

119.20

120.43

2,271

1,394
1,314

4,808

4,253
3,027

2,256

2,870

13,022,000

13,133,000

117.40

119.20

1,702

1,702

971

2,811

Shipped

483

965

Produced

112.56

179,984

477

,U

—

Shipped
Motes, grabbots, etc.

120.02

202,785

bales)—

31—

Dec.

Produced

115.43

264,805

188,810

195,945

102,703

—

—

Fiber

82,622

145,238

125,157

31

Dec.

Stocks

116.41

119.82

290,489

82,635

(running bales)—

Stocks

103.7

116.02

309,772

258,284

99,614

____—...

(tons)

118.80

Feb-13
Feb- 13
Feb. 13
Feb- J3
Febl 13

"L_ JIIIIIIIIIII1IIIZIIZI

Railroad

101.33
116.02

i3

Bonds

Government

251,982

83,192

———

Produced

Hull

I).

.

210,669

—

_

Shipped
MOODY'S

190,875

:

(tons)

Shipped

9.750c

17.000c

(pounds)

——_

Meal—

and

Produced

12.000c

Feb.

.Feb.

___.

217,619,000

190,049,000

155,036,000

Stocks

74.500c

.Feb;

1

182,355,000

174,640,000

Hulls-

18.425c

.Feb.

—_____________

at—

181,587,000

138,678,000

107,832,000

Shipped
7

98,408,000

100,065,000

132,706,000

122,009,000

Cake

QUOTATIONS):
.Feb.

_

171,591,000

31—

(pounds) Dec,
(pounds)

Produced

(E.

PRICES

1

Dec, 31
(pounds)
_______——
(pounds)
———

Oil—

Stocks
METAL

677,438

1,884,014

Consumption

$46.36

6

564,151

1,202,321

Produced

3.837c

6

.Feb.

(per gross ton)__————
(per gross ton)

Scrap steel

6

.Feb.

432,968
1,138,343

31

Dec,

449,701

792,807

368,990

_
—

(pounds)

Produced

Stocks

COMPOSITE PRICES:
lb.)___

Finished steel (per

(tons)__

Oil—

Shipped

Pig iron

mills

at

Crushed

Refined

IRON AGE

SEED PROD¬
COMMERCE—Month of

OF

Received
-Feb. lo

Crude

STREET

__

December:
Cotton

ELECTRIC INSTITUTE:
Electric output (in 000 kwh.)_.

&

COTTON

AND

SEED

UCTS—DEPT.

EDISON

FAILURES

STATES—DUN

UNITED

(NEW) IN THE
BRADSTREET,

INCf—Month of December.—
COTTON

RESERVE SYS¬
Feb.

INCORPORATIONS

BUSINESS

119.20

(1,000 pounds) —

31_

Dec,

—

—

—

EMPLOYMENT

7,164

3,628
,

*

3,125

DEPT.

S.

PAYROLLS—U.

AND

SERIES—Month

LABOR—REVISED

OF

—

-

of

November:

MOODY'S

U.

YIELD DAILY

BOND

2.39

2.85

2.86

2.83

Durable

2.65

Feb. 13

Aaa

(production

manufacturing

All

2.40

Feb- *3

corporate

Average

2.23

2.39

2.85

Feb- *3

Bonds

Government

S.

AVERAGES:

2.65

2.66

2.58

Nondurable

^

^

Railroad
Public

2.71

2.71

2.65

2.88

2.88

2.89

2.86

3.15

3.16

3.18

3.24

3.01

3.01

3.03

3.08

2.86

2.85

2.78

Group

■

Estimated

2.69

2,69

2.69

2.63

532.9

533.5

521.0

356.9

*eb- 13

Industrials Group

NATIONAL

received

Production

Unfilled

OIL,

(tons)

orders

PAINT

(tons)

AND

at

204,050

319,609

240,200

242,721

207,870

3

103

104

91

91

761,828

659,349

727,579

383,173

______

REPORTER

DRUG

345,524

3

Feb.

—

_

—

3

Feb.

•

PRICE INDEX-

AVERAGE—100

Feb.

152.4

9

150.7

152.2

manufacturing'

TRANSACTIONS

LOT

DEALERS

FOR

EXCHANGE—SECURITIES
Odd-lot sales by dealers
Number of orders

ODD-LOT

Dollar

value

Odd-lot purchases by dealers (customers' sales)—
Number of orders—Customers' total salesCustomers'

short

sales

Customers'

other

Jan.
-Jan.
—^Jan.
—Jan.
Jan.
3an-

sales

Number

—

shares—Customers'

of

Customers'

short
other

sales

sales

Customers'

total

sales

Dollar

value

Round-lot

Jan. 27

-

sales

by dealers—

Short

:a

sales

Other

sales

"
—

Round-lot purchases by dealers—
Number of shares-

Si oI
Jan. 21
T

__

Jan-27

—

-

50,996

34,149

1,316,015

1,047,204

(822,964

$60,156,890

1,547,897
$68,725,311

$42,913,662

NEW

PRICES

SERIES

U.

—

S. DEPT. OF

39,461

51,227

34,771

28,330

264

471

480

267

Farm products

39,197

1,467,551
17,492

34,291

Grains

Foods

commodities

Textile
Fuel

Metals

-

other than farm

products

and

and

Building
Chemicals

and foods—

metal

materials—.
products—~

materials
and

•Revised figure.

—

;

-

lighting

allied

•

.

—:
—

products

^Includes 586,000




FebFeb.
Febt,eP*
;—*eb£,eb*
FeP*
—Feo.

—----

.

1

Meats
All

f

barrels of foreign crude runs.

6

6
6
5
^

®
b
6

6.58

6.50

6.03

7.10

6.00

5.35

4.71

4.55

3.52

3.43

3.37

6.32

6.57

6.28

$406,464

_____

6.89

5.73

4.73

(.15)

$442,871

$341,812

—

——

1,113,030
$46,131,138

1,450,059
$58,418,339

770,638

17,875

10,014

1,039,579

.

760,624

$37,917,733

$28,919,865

(10)

(200)

;

475,230

339,690

269,550

475,230

339:690

FINANCING
IN
NONFARM
S. — FEDERAL
SAVINGS

U.

OF

INSURANCE CORPORATION
—Month of November (000's T>mitted ):

Savings

and loan associations
companies —
trust companies
savings banks—

527,470

326,840

303,470

Bank

and

Mutual

*180.9

178.1

152.

200.3

197.1

191.9

157.

190.7

189.6

187.8

U.

257.0

248.3

185.2

183.0

274.0

265.5

259.7

211.3

170.1

*170.0

167.8

145

177,297

192,515

$1,457,073

——

216,012

271,898
$1,544,410

$1,114,041

STATUTORY DEBT LIMITATION
31 (000's omitted):
amount that may be outstanding

of Dec.

face
any

$275,000,000 $275,000,000 $275,000,000

—__L_—

time

°Tota?dg?ogs7 public

155

74,893

201,834

256,124,868

debt

256,707,571

256,865,375

17,774

23,733

27,029

199.

188.7

98,088
229,346

267,373

———-

—

GOVT.

S.

175,916

324,892
112,821

112,062

institutions—

lending

Total

158.

263.9

172,066

297,274

—

—

—.

Miscellaneous

As

182.2

!___—

Insurance

269,550

522,200

—

LOAN

Individuals

3~24~140

—

—

ESTATE

AREAS
AND

at

F^b- ®

Livestock

19,400

15,282

5.81

(25)

(24)

Average yield

28,063

1,057,454

50,756

1,123,561
10,531

LABOR—

Feb" ®
—®
FeJ- £

.

_

237,591

41,900

33,044

AVERAGE YIELD OF
STOCKS—Month of Jan.:

(125)

Insurance

REAL

.

1926=100:
All commodities

379.964

38,800

41,418

WEIGHTED

COMMON

Total

WHOLESALE

377,013

ASSOCIA¬

$33,473,610

324,140

.

,

Number of shares—Total sales

27,823

44,711

27
27
27
27
27
^7

6,757,000

AND
IRONERS —
AMERICAN
HOME

(units)
Factory sales of ironers (units)
Factory sales of dryers (units)

Banks

-3an- 27
Jan- 27

—

7,050,000

*7,210,000

TION)—Month of December:

futilities

«an-

;

SIZE

MANUFACTURERS'

Factory sales of washers

Railroad

ON

Number of shares_

13,807,000

*8,615,000

7,100,000

—__

WASHERS

Industrials

(customers' purchases)—

*15,825,000

8,642,000

!—

goods.

STANDARD

MOODY'S

ACCOUNT OF ODDTHE N. Y. STOCK
EXCHANGE COMMISSION:

THE

SPECIALISTS

AND

—

—

goods

LAUNDRY

200

STOCK

313.9

manufac¬

120.9

—

—

-

-1926-36

415.8

15,742,000

—

employees in

number -of

Nondurable

248,603
202,942

Feb.

(tons)

137.8

turing industries-

HOUSEHOLD

ASSOCIATION:

PAPERBOARD

3

Orders

160.3

!
f

manufacturing

All

All

—Feb. 13

INDEX—

COMMODITY

5,713,000

5,570,000

Employment indexes—

Durable

MOODY'S

11,283,000

7,181,000
5,952,000

414.9

—

Payroll indexesAll manufacturing

2.86

Feb< J3
Fe, ^

Group

Utilities

2.71

Feb 13

Feb-13

:

_—

__

—

—

goods

7,190,000

5,832,000
159.0

goods

Feb-13

Aa
a

workers)

180.9

*180.9

173.4

138

136.2

136.2

136.1

188.7

187.9

168

226.5

225.4

223.4

192.

145.0

144.9.

142.3

115

not owned

by the

Treasury

Total

•

public

gross

obligations
Deduct—Other

debt and

$256,142,642 $256,731,304 $256,892,405

-

outstanding

gations not subject

guaranteed

public debt; obli¬

to debt limitation—

131

188.9

obligations

Guaranteed

outstanding #—'
Balance face amount of obligations,
able under above authority
Grand

*

Revised.

fNot including stock of

699,595
$255,443,04

total

<

704,9 27

741,851

$256,026,377 $256,150,554

issu-

19,556,952

American Tel. & Tel.

18,973,622

18,849,445

The

40

Chronicle

Commercial and Financial

Thursday, February 15}

.,

.

(748)

Continued

inflation

Into
History's Greatest Trap?"
serve.
Straight thinking, a sound and

ing to find the value of our dollar

prosperous

and a premost modern

depreciated during the paredness in the
years. We still seem to methods of war will thwart the
be unwilling to be guided by the evii intentions of any adversaries,
disastrous
experience
of many And we can do it.
1
foreign countries, which resulted
„
„f
next few

demoralization in the value

currencies.

respective

their

of

ADRIAN

government does
not economize and get along with¬
out everything possible during the
war period, why should
its citi-

s°;
Jif P°h1C?1
be
tax, tax and tax

still to

the

of

ism

roads

surest

j

and

]3ar^ing

FULLER

the

public
I

is

he

the

on

right

Dr.

article

Palyi's

higher

taxes

ington.
$

1, N. Y.

City

in

the

s?s

#

ENDICOTT R. LOVELL

"Chronicle" issue of Jan. 11 crys¬
tallizes

that

ideas

some

are

Mr. Hoover

in calling

points.
super

attention to

Our

Research

excel.

we

improvements
should keep us

position.

and

Tmmnnm

standards

™

Immense land foices impose an

countrf'^O,nPrD0„bDuiMion011iS
L,„nI'
smaller
Our

oLi...
Russia's

.t™

than

.*

armaments

ample

and

kPPn thp latter in the bounds

far

all

at

arms

million

10

to

seems

that here is the nub

me

less

times

than

force,

and

Russia's

an

much

a

cultural

program

whereas

we

would
such

have

agri-

suffer,

an

acute

need for

all of our manpower in
i+
industry and agriculture that the

maintenance of

even

lion-man

army

crack

three-mil¬

a

economy,

our

handicap
verely.
It

is

will

not

only

but actually
labor supply se¬

our

suggested that after ex¬
hearings of the views of

tensive

experienced

men\

citizens

and

be

laid

this debate should

down

of

the

to

the

executive

government

text for future

as

would

governments
position

our

affairs and

we

in

world

could develop our

plans with confidence and the
respect of friend and foe alikeWe need the thinking of all the
best

noint

"g

^

,

start

brains

the

m

politics must not

country, and
be allowed to

crevail
v

.'

Sacrifice

this

in

emergency

must first entail suspension of any

further social benefits, which we

certainly

ill

sensikte government it is
will
unless it thinks

a

war

blitzkrieg

a

His

basic

afford.

seems

sensible to

a

the

firm stand and
...

.„

.,

that

position

+u

that it will move if the opposition oversteps certain positions leaves two big questions to
be decided. (1) where do we draw
the line? (2) Do We have the resay

sources

am0ng

or

can

our

we

mobilize them

allies to make good?
.

,

tu?

.

f.co nnJ

.To

t

,A

number

of

United States cause one to

have

...

.

11

.

„

Foreign

Palyi

makes

con¬

In

concern.

a

this
winter I have said that "we should
avoid inflation as we would the
before

,a[bs

farm

I'm

not

all

at

Dr.

sure

that

fear

I

Certainly

accuracy.

his

we

be

may

President, The Brooklyn
Gas

a

campaign to

tential

Industry
strive
power

Stand

maximize

strength
to

and
build

of

our

the

po-

up

such

great

that the whole world will
awe of the specialized

in




would

country^,,bere."

agriculture must

means

try

New

Mr.

Patchwork

by what I
in

1949.

It

saw

that

our

present

not

and have not made

changes

any

of securities in
However, they do

public

offerings

to

me

leadership realizes this.
stabilization efforts

simple

a

answer

one.

We

ought to stay with the wisdom
of
the law and not try to
police oral
offers of securities.

We ought
not

try to prevent sellers from offer¬
ing
their
securities
after
in¬
formation about the
securities has
been filed with the SEC.

But,
all, we must require the
development of a machinery of
security

distribution

which

will

get reliable and adequate informa¬
tion to the buyer in advance
of
his commitment.

Investors Do

Read

One of the recurrent
arguments
hear is that it makes no sense

to go through the effort
required
to

get full information delivered
investors just don't read

because
it.

I

happen to credit the

ordi-

recent

years.

understandable

more

than

they

today.
Still more will read
them if we gave the American

are

have large

a

in the defense program are aware

of this.
Once

again

we

intro¬

bill in the last session of

a

forthcoming

session.

are

NEIL

T.

semination

leave much
could

be

investor

to

in

be

be

improved

time

(and

to permit that

data

vestor.

written

statutory

However, it did recognize

certain

informal

and

essen¬

tially casual oral discussion
inevitable

and

it

that

would

situation

actually
the

international

muddled

to

a

point

brought

"Chronicle"

to have been

where

into

focus

should

be

to

and

proud

the first to print it.

It is the sad truth that

headlines

newspaper

is

it

are

our

daily

inclined

exaggerate both the military
industrial
potential of the

and

enemy and

developed
most

a

consequently,

we

have

national fear which is

certainly not justified by the

facts.

Articles such

as

Dr. Palyi's

should, if nothing else, bring

us

in the

a

a

concerning
of

a

even

prospectus.

is

required

facts

views

expressed

by

Dr.
-t

dominant

People

of

people,

our

the long run,

in

not,

reflect the

to

drives

do

social insti¬

our

bound

are

fundamental

my

government

create democracies in

business

The

lives.

urge

toward greater democracy, great¬
er

individual

participation of the

in political institutions, sooner or
later manifests itself in the other
forms

activity

collective

of

which

the

in

engages,

individual

That urge has been a constant one
in American life.
If our Federal

system

securities

of

regulation

to put it another way, of
"investor protection") is funda¬

(or,

with

that

that permitted

can

be

no

tell

the

material

tion

that

of

all-important
behavior.
Let
in

us

our

democratic

implementa¬
philosophy in the

philosophy and is

There

to

of

beliefs that all of

tutions

challenges.

essential prob¬

an

evolving democracy.

one

consistent

doubt, however, that the Securi¬
ties Act clearly intends that the
prospectus—the document which

an

field

of

economic

'

take the first law

passed

scheme of Federal securi¬

Securities
Will
recall, seeks to protect the in¬
vestor
in
newly
distributed
securities by providing for dis¬
ties

regulation

Act of

1933.

the

—

That

law, you

to an informed
judgment—should be the main

semination to investors of essen¬

vehicle

company and the security.
that Act was passed there

necessary
of

securities

newly distributed

sales

issues.

has been estimated that
as

80%

and
see

purposes

sale

has

it

much

giant

a

many
in¬
the prospectus
for

been

midget—the

talk about
ai

Yet
as

today
telephone and other oral

the

The

in

of all securities are

sold by

until

The

Act

securities being of¬
prior to the delivery

tical

Palyi are in accord with mine.

and

seller to make oral statements,

fered,

technical

mentally sound—as I think it is-;it is in large part because it is

Securities

way

conversation,

U. S. Congressman from Illinois

sellers

It therefore worded the Securi¬

ties Act in

vestors do not

HON. A. J. SABATH

be

com¬

Needed

To my own mind, the article is
one of the few which have clari¬
the

between

was

buyers of securities.
Change

an

is

their

the

the

of

than

present

making his while they condone autocracies in

prospectus in the basic policy of
the legislation—informing the in¬

Corporation, Chicago 47, Illinois

fied

we

Securities Act,
the Congress laid emphasis on the
passing

that

and

They
It

simpler and more useful

real help in
investment decisions.

role

are

world

a

corporation, the investor, and the
relations
between
them
present

lem in

to give the

of

In

in

terprise

only collateral.
of giant en¬
giant finance.
The

be,

may

live

in¬

That

desired.

hope it will be soon)
data

We

Act

to

Securities

the

to

dis¬

of

information

of

under

vestors

Act

they

more

mechanics

actual

The

munications

REGAN

Public Relations Director, Admiral

inflation

seem

view is that the

principle,

regulated

has announced that the bill would

York

Palyi presents in

reinforced

in Western Europe

does

The

are

financial community.

own

is, in

I

is, to put it blunty, a patch¬
work, built up over a period of
years.
It contains at least one
serious gap.
Except for specially

be reintroduced in the

dramatic
way the economic strategy many
people believe the Russian Gov¬
ernment is following. If this an¬
alysis is correct, we could come
dangerously close to disrupting
our
economy.
I
am
confident,
however, that many of our leaders

groups

induce

to

These views

My

details, the best we could have.

Congress to plug this gap and he

Union

Company, Brooklyn 2,

step in the right direction.

of

system

protection.
It is by
complete, nor is it, in

Senator Frear of Delaware

out from under the bed-^the first

impingement

an

investor

duced
CLIFFORD E. PAIGE

ponent of the U. S. A. and wanted
t0 achieve our ultimate defeat, I

the

the

of

bodies of public secur¬ investor a fair chance to look be*
ity holders and there is no reason fore he leaps.
internally
more
certainly
and why these companies should not
In terms of the broad back¬
more
quickly
than
our
inter¬ be under an equivalent duty to
ground against which we should
national enemies could ruin us
file public reports of their affairs appraise
protection of
the in¬
from without.
and to obey the proxy regulations.
vestor, these issues, important as

devir and that «i{ t were an op-

minimize

Congress means of
plugging this loophole as well as
meeting the legitimate criticisms

frightened into ruining ourselves

Every

to

it

makes

achieved

extensive

extraordinarily
of

way of re
that we could

recommend to

utility and investment nary investor with more intelli¬
a
long time that we have per¬ companies, only companies which gence and astuteness than this
mitted ourselves to become very register large issues of securities argument
of despair would at*
frightened at things that should for public distribution and those tribute to him.
Many investors
read
not necessarily scare us so much. which
list
their
securities
for do
prospectuses.
More
To
have this country shivering trading on exchanges are required investors will read prospectuses
and
file
shaking with panic at the to
periodic
information. if the Commission succeeds in its
threats
of
a
representative of Many large corporations do not present program for making the
China, for God's sake, is quite a have
securities
listed
on
ex¬ disclosures ve v en
simpler and
vincing argument. I have felt for

possible saving must be effected

can

view of the

SEC

have

we

A

very

a

the

of

that

clear

It

National Bank, Tacoma 1,

Dr.

in¬

to

a

so

above

functions

no

Sound

Puget

The

equitable

and

Even this summary

ODLIN

RENO

President,

fair

vestors.

all

1 recently heard Dr. Palyi talk

USA should take

guidance.

_

then know

is in the short run inflationary.

reorganization led, in part, to the
adoption of Chapter X and the
theory of the Congress was that
the Commission could bring in¬
valuable expert and independent
advice to the courts to help in
the achievement of reorganization
plans

wording the Act

corporate

of

impossible to police all oral

me.

branch

produce new production facil¬
ities draws on scarce materials, it
to

indeed en¬
tering a time of crisis as a nation.
tives men will fail to do the kind We will need our best thinking to
of work essential to the continued
come through
it. Provocative ar¬
ticles of the type you are publish¬
growth of this country.
«!«
ing will do much to make the is¬
sues clear and to guide us in the
L. J. NORTON
grave responsibility which faces
Professor, Agricultural Economics, the American people.
University of Illinois, Urbana, 111.

Tenate

1

The results of

,know' Th(r impending crush!"/ increases in taxes appear to
bear out the statement t at w
J?a^ become a bankrupt gar so .
Certainly without adequate incen-

govern-

the
should debate the principles and
application of a foreign policy.
executives,

-

tary exPerts know now or ever

neither

her

nor

ohher oui politicians or

we

smaller

furthermore,

industries

^.e,; 1 **av<e

expense

which

at

that

maintain

can

at

°f the .whole
What are
whn^c m ^v^/haMhev^hall
1 o'T^ ^

under

men

output. And if a scramble

added

tottl

manpower

maintain

income

* * — »
necessities of a lightning war." It

™ch

potential.

is too costly and
too highly educated to be wasted
in infantry battalions. Russia can

,

,

jn& into history s greatest trap,
However, the last paragraph of
in
these
fields the article leaves me confused,
in an impregnable
Mr. Palyi states, ' We can have
b°th 'guns and butter,' high living

weapons

which

most of

Mr* Palyi s statements and I agree
that this country is probably fall-

air force, and
are the items in

navy,

anti-inflationary

a very

production generates the
with which to buy the

as

share

strong

our

present rates, so new bond is¬
sues will have to go into the bank¬

complete

Calumet, Michigan
subscribe heartily to

I

absolutely right

was

studies

Palyi has not called the turn with

Consolidated Copper Company,

doubtedly in the minds of a large
number of our people.

The Commission's monu¬

at

letdown.

President, Calumet and Hecla

un¬

zation.
mental

Washington

and a higher
budget and not to make any at¬
tempt to reduce the ridiculous ex¬
penses
being
incurred
by the
various bureaucracies
in Wash¬

HARPER

Island

can

this is not

by Chapter X of the Bankruptcy
Act as adviser to the Federal dis¬
trict courts in corporate reorgani¬

believe any

am

for

President, Harper Oil Co., Inc.,
Long

curities

under long time to find

the SEC is designated

of government se¬
be sold to the public

volume

large

burden

tax

added

afraid, however, that our
President is determined to work
I

track.

JOHN

our

of the dollar I do not

lation."

Palyi's thesis,

Dr.

to

of

the present

not

for in last year's legis¬

provided

slow work educating

believe

consequently
in

of prudence

budget

the

without

Savings
and Trust Co., Paterson 1, N. J.

but

attitude
people toward the future

In view of

only
could we get by without the im¬
position of more taxes but even

President, The Paterson

It may be

exercise

Federal

our

»;s

KENNETH

incur.

force

and

Up0n

^he

tion.

C.

Dr.

mp^ary mobilization we are em-

result

>':

with

of this character
require the gigantic

no^.

these Acts,

functions

administrative

have to

produce all we can. I see no signs
that we will not try to do so. But

program

wou^

through bankruptcy, which
from currency infia-

is

can

Company,

agree

govern¬

new

any

possible to finance a govern¬
ment deficit. We should, of course,

Palyi when he says:

Commun-

to

thoroughly

on

way

14, Ohio

Cleveland

One

spend, spend and spend.

Glidden

The

rate

ment debt which we may

ing systems, the most' inflationary

JOYCE

D.

Chairman of the Board,

So long as our

terest

economy,

greatly

Protecting the Investor?

Are We

should, I think: (1) limit
our
total governmental expendi¬
board relations with investment very foundation of the scheme of
tures to a reasonable proportion
regulation.
1
of our national income;
(2) tax advisory clients.
We have been
In addition to its regulatory and
working f0r a
heavily; and (3) set a rational in¬

that we hold in re-

inflation, encouraged' military might

brought under con¬

are

trol. We

t>y constant wage increases, which
result in higher prices, we are go-

from

4

not Continued from page

and

symptoms

They will not be very suc¬
cessful unless the real causes of

causes.

"Are We Falling
ued trend to

with

deal

from page 3

all

prac¬

completed.

opportunity

to

security—has become

which

has

.

shaken

the

tial

information

about

the
When
were

many models of securities regula¬
tion from which to choose.
Many

states

had

which
the

securities

laws.

may

Blue

sky

variety of forms.
are

statutes

recognize under
popular title of "blue sky
you

laws

assume a

Some of

statutes which do little more
add

them

simple "fraud" laws—that is,

statutory

common

law

penalties to
doctrine - that

than

the
one

Number 4986

173

Volume

The Commercial and

...

Financial Chronicle
(749)

sells securities by fraudulent
is liable to the buyer.

who

means

Some of these laws are so-called
Lualiiication:' statutes.
Such
statutes give a state adminis¬

be
the

a

relatively compact group
roundtable. stockholders'

meeting

was

feasible.

Put with the growth of corpora¬
withhold permission to tions and the dispersal of owner¬
tell securities within the state on ship among the millions of our
the basis of more or less loosely
people who hold corporate securi¬
defined regulatory, standards re¬ ties the roundtable became
impos¬
lated to the quality of the secur¬ sible.
The
proxy,
therefore,
ity
other laws combine various rather than personal
attendance at
aspects of these systems of regu¬ meetings, became the normal way
,

of

as
"yes."
Let me
observe tnat while this

to

to

seem

be

elementary

an

aspect of the right to vote, many
corporations
never
provided it

Proxy System Normal

grant or

lation.

well

as

may

officer or body power to

trative

no"
pause

until

required to do so by the
Commission's rules.
As long as the
proxy machinery
keeps stockholders isolated from
each- other it is not

a

reasonable

approximation of the stockholders'
roundtable meeting.
It became
obvious, early in our
administration of the proxy rules,
that
they
were
not

as

a

social
But

41

positive force in American anteed investments or
supervised
history.
in detail management investment
the

Commission

has done practices—which it
does not do.
subject of pro¬ Comparisons with forms of con¬
tecting the investor is raised, it servative investment
(such
as
is natural to ask "protecting him
government bonds, mortgages*
against
whom?"
The
investor
savings accounts)
were
often
needs
to
be
protected
against made without pointing out the
fraud, againt irresponsible pro¬ hazards of market
changes in¬
moters, against self-seeking and herent in open-end
company port¬
unresponsive management, against folios.

When

more.

market

the

the

manipulators. In stressing

achievements

the

of

SEC

There was a variety of ways in
which the Commission could deal

against the broad background of
with this problem.
One was to
franchise.
complete democratic evolution I do not, by
Emphasis on Information
reach in at random, pick put an
without provisions
affording to any means, wish to underestimate
Some of the darkest
pages in the
offender (or group of offenders)
Of the variety of models from
ordinary stockholder of lim¬ these accomplisments. The SEC
American corporate
history have ited means an
and make an example out of them
which to choose in designing one
opportunity to was not, after all, created by po¬
been written about abuses of the
in the courts.
Another was to
of the basic laws for investor
reach his fellow stockholders in litical philosophers in a self-con¬
proxy machinery by intrenched
deal with
the
problem as an
protection our Federal Govern¬
order to make and support inde¬ scious attempt to legislate a po¬
and
irresponsible management.
ment chose neither a mere "fraud"
litical philosophy. It was created industry-wide problem—which it
The election of directors was like pendent proposals w i t h i n the
Many dealers used
law, nor a statute which imposed
proper sphere of stockholder ac¬ because the shock of 1929 and the really was.

arid official control

central

over

investment process. .It chose,
instead, a statute of the informa¬
the

tion type.

the SEC cannot
and does not tell sellers what they
can
sell or buyers what they
should buy.
This: law. does not
displace the free determination of
corporate management as to how
much or what type of securities
Under this law

It does not displace the

sell.

to

responsibility

individual

exercising

the

stockholder's

dictator's
plebiscite.
Stock¬
holders would be asked to vote
for
people whose past per¬
a

formance

they

had

no

way

of

appraising because of the lack of
publicity about corporate affairs.
They would be asked to ratify all
acts and decisions of the
manage¬
ment without
knowing what

these

acts

meant.

or

They
crucial

prove

decisions

were

were asked

or

to ap¬
of

rearrangements

the capital that vitally affected their
position in the company without

of

investor to make his own invest¬

It is neither ab¬ knowing what they were being
There was I no
solute control on the one hand nor asked to approve.
unrestrained license on the other. limit except ingenuity to the de¬

ment decisions.

One com¬
attempt to get the is¬ vices that were used.
suer of the
security to tell the pany, for example, adopted the
whole truth about the offering practice of making the dividend
and to provide the investor with check itself a form of proxy. Any
It is an

the

of making an informed

means

stockholder

who

endorsed

philosophy is rooted in the voting for and endorsing the

This

his

check to cash it was, by that act,

decision.

man¬

healthy agement and its policies, whoever
and sound democracy presupposes or whatever they might be.
the intelligent exercise of indi¬
These abuses were, in them¬
vidual will in a collective en¬ selves,
evil , enough.
But they
democratic

tradition.

A

Our
newspapers,
tv, were combined with widespread
magazines and public apathy and ignorance.
Without
forums, such as the one I have the laws requiring publicity for cor¬
honor of addressing here, are the porate affairs under well regu¬
means whereby a democracy pub¬ lated standards of disclosure the
licizes its condition, its affairs, impotence of the ordinary stock¬
and its problems to all of its citi¬ holder was well-nigh complete.
zens
who are the investors in
But that was not all.
Not only
was
the investor deprived of a
democracy.
Our individual decisions based, chance to participate personally
on the
best information are, in through the proxy machinery, but
the end, democracy at work.
each
investor—unless
he
had
No one could write an adequate large means at his disposal—was
history of our times without de¬ effectively isolated from his
scribing the emergence of the fellow investors. Corporate meet¬

tion.

ensuing depression laid vbare so
irresponsible practices that
that today a stockholder may sub¬ made our economy unnecessarily
mit to the management proposals vulnerable to economic changed
for vote by fellow stockholders
The SEC is not run by political
and ask that these be carried in philosophers (than the Lord) butThe

rules

holders

in

rules

were

raised

a

social

of our domi¬

institutions.

system of collective
offers

As

a

endeavor

it

frequently

held

out-of-the-way
places
inconvenient times.

and

ings

were

oppor¬

soliciting material.

was

first

strong

transform

they

the

cry of

proxy

auditorium

an

passed

protest. It
complained that they would

That,

like

system into

for

crackpots.

gloomy predic¬
tions about expanding democracy,
most

has turned out to be false.
of all the rules

First

definitely provide

that stockholders cannot use these

privilges in order to redress
sonal

grievances

or

per¬

enforce

personal claims.
The privilege is lost if substan¬
submitted

one

its

an

When these amendments to the

tially the

as

many

by practical
cated

to

men

who

are

dedi¬

the

the
less

last

same proposal has been
to security holders at

meeting and it received

than

3%

of

the

votes

cast

with respect to the proposal.

they

It

is

not

discretion

within

of

the

arbitrary

management to re¬

fuse to carry a proposal submitted
in by a stockholder. The Commis¬
at sion must be notified of such

refusal and the management

must

many

,

for

me

to claim that the SEC

prevent depressions.

It

can

can

do no

on

•

no; less true of

corpora¬

ckholders

of

a

corporation

are

hnx°WJ?rs# .As such, they should
in

a

er

e+u

ultimate voice in choos¬

♦

rl ?

representatives

in

the

management and in de-

?lninS crucial corporate issues
lirn!^ a5 mergcrs, consolidations,
«>

iquidations

nficl01

and

so

it depends
fu

forth. Whether

owners of the enterYe an effective voice in

i?. to them
wJgilt t0 vote"erf
•

on

corporations

wheh

the

means

for exercising
were

small

stockholders tended




to

for

its

of

What

was

needed

was

clarifica¬

tion and not random punishment.
With the cooperation of organized

in action.

Abraham Lincoln, talk¬

the

recurring types of undesirable

statements and published a docu¬

thing. But it can, and has, ment in which the improprieties
groundwork for a sound¬ were pointed out and in whicbt
er
and better system of finance. dealers were warned against these
That document, whicfit
Promoters
seeking
to attract abuses.
public capital who have got to has come to be known as "The
tell their story to the world will Statement of Policy," is today the
think twice before they try to sell working code which guides the
pig's ears at silk-purse prices. The preparation of selling literature
investor who wants to discrimi¬ for open-end company investment.
such

laid the

nate between safe investments and

fliers in specualtion has the means
of doing so.
If markets climb

least have

at

the

or

plunge

we

We are proud of it, and of the
improvements made under it.
It

is, to

us,

much

another example of how
can

more

be done with

en¬

that

lightened participation and co¬
the ticker tapes of the nation run operation .than can be done by a
through
a
government
agency psychology of prosecution which
which is alert to catch and inves¬ measures its success by the num¬
tigate signs of illegal manipula¬ ber of notches on the gun.
assurance

tion.

The

administered by the
help to keep our in¬

laws

will

SEC

vestors and our markets anchored

to

reality.
of

antees

They
that

are

result,

not guar¬
any

more

than

democracy is a guarantee
that
the
people wilj always*
choose wisely.

If investors
fail
to use the
publicity which might hurt
means of information available to
people being quizzed and the in¬
vestors in the security. As a re¬ them, if they insist on buying
hunches,
rumors,
trends*
sult we often are criticized for tips,
avoid

inaction
we

are

at

the

very

in the midst of

time when
a

full scale

investigation.
Commission's Activities in.

Utilities

under the Public
Utility Holding Company Act, the
Commission brings the holders of
millions of dollars of utility hold¬
ing company stocks back to in¬
vestment in sound, balance, oper¬
ating company securities.
For the first time in history the
buyers of investment company se¬
curities have a right to know
what they are buying, how much
load they are paying and to be
protected against abuses of man¬
agement.
Investment Companies
of the
open-end type, sometimes referred
to as "mutual" funds, have grown
Every

year,

of democracy
tions, as a result of vigorous
de¬ tively small corporations.
action by stockholders using these
devising an effective
In the giant corporations such,
machinery of representation. Al¬ an adventure would be an enor¬ privileges have "greatly improved
their procedures for stockholder^'
ways and at every
stage of its mously
expensive undertaking
meetings and have greatly im¬
development, the measure of rep¬ even for
people 'of means..
resentational
proved their relations with stock¬ enormously in recent years. This
machinery
in
a
holders.
The SEC's Proxy Provisions
democracy is the extent to which
growth has been accomplished by
H permits
and attains informed
vigorous selling methods.
It was not surprising therefore
Democracy in Action
Participation - by. the individual that the
At times the general literature
Congress provided in the
citizen in affairs of state.
This, to my mind, is democracy used in creating interest in these
Securities Exchange Act of 1934

maintenance

te11?
»n it is of civil governstnov!' .pegally, and in fact, the

unaware

failings under the standards of
law.
Competetive pressures
operated to put a premium -on.
aggressiveness in selling.

can

The
Whenever an unusual movement
privilege is lost if the proposing
is observed in any security our
stockholder (without an adequate
staff swings into an investigation
reason) did not show up at a pre¬
in which buyers, sellers, brokers
vious
meeting
to
present the
and dealers are itnerrogated about
proposal for action where the
their transactions. These so-called
soliciting material for the prior
"flying quizzes" are conducted on
meeting carried his proposal.
a
confidential basis. We want to

parallels with civil
Assuming that an investor got justify the refusal.
government and, indeed, in some
If the refusal cannot be justified
to the meeting he would be likely
cases assumes
functions that well- to find there
only the manage¬ the management's failure to trans¬
nigh constitute civil- government. ment and
perhaps a handful of mit to stockholders the proposal
When
we
talk
of
democracy investors. ' The
meeting
itself and the supporting statement is a
therefore we are talking of only
Among the
provided no adequate audience breach of the rules.
one side of our social existence
consequences
of such a
and the management's control of other
if we limit
ourselves to civil gov¬
the agenda could effectively de¬ breach is the possibility of an in¬
ernment and leave out the
prob¬ prive the stockholder of a plat¬ junction against use of the
lem of
corporate government.
management proxies which the
form.
In a small
Commission
will
seek
in the
community, the town
The only other way was for the
"■
meeting can be an effective func¬ individual investor to circulate his courts.
Experience
has demonstrated
tioning body.
As
communities own matefial to stockholders in
that stockholders have used these
grow, as; interests that clamor for
the form of counter-solicitations.
a
voice in civic affairs become
privileges moderately and, by and
Few people had the money or the
more
complex and dispersed, the incentive to do so—even in rela¬ large, reasonably. Many corpora¬
pends

literature

this

job of doing what
to keep the financial dealers and the investment trust
community and financial practices industry we sat down and an¬
tunity to the stockholder to fur¬
nish a justification of 100 words free of the swindlers/ crooks and alyzed thousands of specimens of
We isolated out
which it will circulate to stock¬ highbinders. It would be fatuous this literature.
proposals it must afford

radio,

nant

so

the management's proxy material.
If the management
opposes the

deavor.

corporation

amended

were

rather than investments our sys¬

tem

provides

no

protection what¬

ever.

We
tion

are

of

raising

investors

a

genera¬
whom the

new

to

opportunities for information and
for
participation
in
corporate
affairs will be accepted as a mat¬
ter of course.
Just as democracy
must
be
an
ingrained habit
rather than a shibboleth if it is
to work, so must informed in¬
vestment.

That cannot be

accom¬

plished overnight.
Ignorance and apathy are an¬
cient enemies of sound investment.
It

takes

time to drive them out.

have, in the 17 years of the
SEC's existence done much.
As

We

indicated, we
day to do more.
I

The. stake

high,
from

is,

in

But it

in

are

trying every

our

success,

Is

To minimize loss resulting
chicanery and imprudence
a worthwhile goal.
is more important to rec¬

itself,

ognize that our generation and
generations to come will continue
to use the corporate form as a
funds has skirted close to the line
of impropriety and in some cases means of mobilizing our economic
has definitely crossed the line. forces in a free enterprise system.
The cost factors to the investor in The public is and should continue
open-end securities were either to be the dominant source of cap¬
We
ignored or played down. Unjusti¬ ital for venture investment.
fiable claims for safety, stability can assure that only by assuring

regulation of the proxy prac¬
ing of the America of his day,
corporations having listed
said that it cold not long survive
stocks.
Under Section 14 of that
half slave and half free. The re¬
Act the SEC is empowered to
mark can as wisely be made of
adopt rules and regulations re¬
society at any time when there
garding this most crucial aspect of is a«substantial lag in
^the de¬
the
modern
corporation.
The
velopment of any one social insti¬
a continuing public confidence in
Commission's
rules
have^ gone tution. The corporation has and security were made nothwiththe investment process.
We can¬
through a series of evolutionary
emerged as one of our significant standing the fact that many funds not do it by preventing the
changes until, today, they form an
social institutions, and if the SEC invested the proceeds in highly normal occurrence of economic
integrated code within them¬
An exag¬ loss and economic cycles. But we
had done nothing else than spon¬ speculative securities.
selves.
can
cushion their effect by, en¬
sor the
Securities Exchange Act gerated picture of the benefits of
Under these rules- proxies can¬
couraging enlightened investment
not be solicited unless the solici¬ of
1934, and pass and administer regulation by the Federal Gov¬ and enlightened participation b^r
tation is accompanied by; & state¬ the
ernment frequently created the investors in corporate affairs. M
proxy rules under the author¬
ment which clearly sets forth the
That is not only good business^
wholly misleading impression
issues oh which the stockholder is ity of that act, it would have built
but good democracy.
to vote.
He has the right to vote a substantial monument to itself that the government either guartices of

Chronicle

Commercial and Financial

The

42

(750)

. .

Thursday, February 15, 1951

.

Vol
•

Securities
Affiliated

h

j

Fund, Inc., New York
Jan. 26 filed 5,000,000 shares of common stock. Under¬
writer—Lord, Abbett & Co., New York. Proceeds—For

>

|n.

investment.

i'y,
in

Feb.

5

Corp., Houston, Tex.
of notification) 276 shares of

common
offered to stockholders of Stahlman Lumber

Co. through H.

¥

Price—$10 per share.

I. Stahlman.
Proceeds

derwriter— None.

—

organizational

For

Un¬
ex¬

Office—4007 Greenbrier Street, Houston, Texas.

penses.

Hollywood, Calif.
stock. Price—At
par ($1 per share). Underwriter—None.
Proceeds—For
further development of mine and for working capital.
Alhambra

«>•

Gold

Mines

Corp.,

filed 80,000 shares of common

Nov. 1

(Israeli)
Feb. 1 filed 28,770 shares of class A common stock (par
five Israeli pounds). Price—$50.40 per share (to be of¬
fered as a speculation). Underwriter—None. Proceeds—
To construct and equip a modern tire and rubber plant
Rubber

Alliance Tire &

H

in

Y

the

of

State

Israel

Co., Ltd.

Business—Plans manufacture

of

tires and other rubber products.

Research

American

&

Development Corp.,

Feb.

106,420 shares of common stock (par $1).
share. Underwriters—None, but subscrip¬

filed

1

Price—$25

per

obtained by Estabrook & Co., Harriman
Ripley & Co., Inc. and Clark, Dodge & Co., New York,
and other members of the NASD. Proceeds—To make in¬
tions

h

be

may

vestments in certain enterprises.
American

Telephone & Telegraph Co.
exceeding $420,000,000 12-year 3%%
convertible debentures due March 19, 1963 (amount ex¬

Jan.

*
h
1

18

filed

March 19, 1951. The debentures will be con¬
vertible into capital stock beginning June 1, 1951, at $138

to

"j
l1'!

expire

per

i*i

and

on

share, payable by surrender of $100 of debentures
payment of $38 in cash. Price—At 100% of principal
Proceeds—For

Underwriter—None.

amount.

advances

subsidiary and associated companies and for general
corporate purposes. Statement effective Jan. 24.

to

>Jf

Y
n i

Ampal-American Palestine Trading Corp., N. Y.
sinking fund bonds,
series A, due 1966. Price—At 100. Underwriter—Direc¬
tors and employees may
be salesmen.
Proceeds—To
develop and expand agricultural, industrial and commer¬
cial enterprises in Israel. Statement effective Jan. 9.

&

Dec. 8 filed $5,000,000 of 15-year 4%

I
T

■

not

pected to be in excess of $410,000,000) being offered to
stockholders of record Jan. 29, 1951 on basis of $100 of
debentures for each seven shares of stock held; rights

ft

>

<)»

Argo Oil Corp., Denver, Colo.
18 (letter of notification) 5,750 shares of capital
stock (par $5)*
Price—At the market (approximately
$17.37V2 per share). Underwriter—Carl H. Pforzheimer
& Co., New York,
Proceeds—To A. E. Johnson, Presi¬
dent, the selling stockholder. Office—1100 First National
Bank Building, Denver, Colo.

'/i|

Dec.

Y
h

m
Y
Y
Y

Y

Armco
Jan.

.

Steel

filed

30

a

Corp.

maximum

share

March

of

884,000 shares of common

for

each

14, 1951.

share

held; rights to expire on
Price—To be supplied by amendment.

Underwriters—Smith, Barney & Co. and W. E. Hutton &
Co.
Proceeds—For expansion program and additional
working capital.
Athey Products Corp., Chicago, III.
Jan. 29 (letter of notification) 10,000 shares of common
stock

(par $4). Price—$7.50 per share. Underwriters—
F. S. Yantis & Co., Inc., Chicago, 111., and Kalman & Co.,
St. Paul, Minn.
Proceeds—To Charles O. Kalman of
Atlantic

Oil

Corp., Tulsa, Okla.
Nov. 13 (letter of notification) 48,046 shares of capital
stock. Price—At par ($5 per share). Underwriter—Con¬
tinental Corp., Tulsa, Okla.
Proceeds—To purchase oil

it't

f"!

and

iY

gas

& H. Incorporated, New Orleans, La.
(letter of notification) 19,397 shares of 6% cumu¬
lative preferred stock (par $10) and 58,940 shares of
common stock
(par 50 cents) to be sold in units of one
preferred and one common share. Price—$10.50 per unit
and 50 cents per share for common stock. Underwriter—
Woolfolk

•t-

& Shober, Inc., New Orleans, La.
Proceeds—
working capital. Office—513 Carondelet Bldg., New

For

Orleans
•

to

12, La.

Baldwin-Lima-Hamilton

Feb.

be

8

filed

issued

Co., Bluefield, W. Va.

Gas

50,000 shares of common

(letter of notification)

Price—$1.15 per share. Under¬
Horner & Mason, Inc., Lynchburg, Va.
Proceeds—For expansion program.

stock

cents).

20

(par

,

writer—Scott,

Brager-Eisenberg, Inc., Baltimore, Md.
2 (letter of notification) 5,000 shares of common
stock
(par $1).
Price—$19 per share. Underwriter—
•

Feb.

Proceeds—For general

Co., Inc., New York.

&

Blyth

corporate

purposes.

Brown

*

cumulative convertible
preference stock (no par) and 144,151 shares of $3 cumu¬
lative second preference stock (no par), together with
voting trust certificates representing the same, to be of¬
fered in exchange for 144,151 shares of $6 cumulative
convertible preferred stock on basis of one share of each
class of preference stock for each share of $6 preferred
stock.
Underwriter—None, but Georgeson & Co. will
•

Canadian Breweries,

Ltd.

61,220 shares of common stock (no par)
to be offered in exchange for Brewing Corp. of Amer¬
ica common stock on basis of two shares for each Brew¬
Feb.

filed

8

ing Corp. share held. Underwriter—None, but
son
& Co., New York, will solicit exchanges.
•

Carolina

Feb.

(letter of notification)

5

which 1,500 shares are

stock of

of

tract of

a

Loan Corp.

Livestock &

George-

Y

3,000 shares, of common
to be given in exchange
publicly offered.

land and the rest will be

Underwriter—None. Proceeds—
To buy and sell livestock and improve pastures, and
grant loans to farmers. Address—Care of Dixon & Dark,
counsel, Siler City, N. C.

Price—$100 per share.

Co.

Central Illinois Electric & Gas

(2/21)

shares of common stock (par $15) to
offered to common stockholders at rate of one share
each seven shares held on or about Feb. 21, 1951,

Jan. 29 filed 80,000
be
for

rights to expire
March 8. Price—To be supplied b,y amendment. DealerManagers—Stone & Webster Securities Corp. and Allen
with

&

privilege;

oversubscription

an

Co., both of New York.

Proceeds—For construction

program.

>

Central

Illinois

Light Co.
Jan. 25 filed 100,000 shares of common stock (no par)
being offered to common stockholders of record Feb. 13
at rate of one share for each eight shares held, with an
oversubscription privilege subject to subscription rights
of employees to expire on Feb. 28. Rights to stockholders
to expire on March 2, 1951.
Price—$32.25 per share.
Underwriters—Union Securities Corp.; Lehman Brothers
—For expansion program.

Central

Louisiana

>

.

Proceeds
/

Electric Co.,

Inc.
Jan. 25 filed 250,297 shares of common stock (par $10)
and 21,480 shares of 4.5% preferred stock (par $100), of
which the preferred stock and 214,800 shares are to be
offered in, exchange for shares of common stock of Gulf
Public Service Co., Inc., on basis of 4/10ths of a share
of common and l/25th of a share of preferred for each
Gulf common
share.
The
remaining 35,497 common
shares are reserved for possible future issuance and sale
by the company to holders of common stock then out¬
standing. Underwriter—None. Purpose—To acquire not
less than 429,600 shares (80%) of Gulf common stock.
Century Shares Trust, Boston, Mass.
9 filed 150,000 shares of capital stock.

Feb.

market.

Underwriter—Harriman

Boston.

Proceeds—For investment.

•

Chanslor

&

Ripley ' &
*

•

Lyon-Palace Corp.,

San

Price—At

Co.,

Inc.,

„

Francisco,

common

Feb.

stock

(par $13)

exchange for 303,945 shares of Austin-

6

stock

(letter of notification) 11,111 shares of capital
(par $5). Price—At market (estimated at $9 per

share).
Calif.
730

Underwriter—Hooker
Proceeds—To

Polk

six

&

selling

Fay, San Francisco,
stockholders. Office—

;y>4<:• •
Nov. 27 filed 200,000 shares of common stock (par $5).
Price—$15 per share.
Underwriter—Van Alstyne Noel
Corp.. New York. Proceeds—To four selling stockholders.
Coast

Grocery Co.,

San Francisco, Calif.
Fjeb. 6 (letter of notification) 5,000 shares of preferred
stock (par $50) and 5,000 shares of common stock (par
$10), to be offered in units of one preferred and one
common
share.
Price—$60 per unit.
Underwriter—
None. Proceeds—For working capital. Office—495 Beach
Coconut

Products, Inc.
(letter of notification) 4,000 shares of preferred
stock (par $50) and 8,000 shares of common stock (par
$1) to be offered in units of one preferred and two
common
shares.
Price—$52 per unit.
Underwriter—
None.
Proceeds—For general corporate purposes.
Of¬
fice—460 West 24th Street, New York 11, N. Y.

Jan. 25

i
■i

*

J
f'f

'

*Y

1

;

ft'

Consolidated

NewYork

Boston

Philadelphia




Pittsburgh

San Francisco

Private Wires

to

all

offices

Chicago

Cleveland

Edison

Co.

of

N.

Y., Inc. (2/27)
Jan. 24 filed $60,000,000 of first and refunding mortgage
bonds, series F, due Feb. 1, 1981.
Underwriter—To be
determined by competitive bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.; The First
Boston Corp. Proceeds—To repay bank loans. Bids—Ex¬
pected to be opened at 11

a.m.

(EST)

on

Feb. 27.

•

Fet
stoi
Noi

tha

Off

Cosmopolitan Hotel Co.

of Dallas, Tex.

Fe

$1,500,000 of 2% debentures due 1965. Price
—At face value. Underwriter—None. Proceeds—To pur¬
chase debentures of Statler Dallas Co., Inc., which com¬
Dec. 13 filed

Pri
Sai
ine

will construct Dallas hotel.- Business—A non-profit
corporation under sponsorship of Dallas Chamber of

ert

pany

construction of hotel.

;

Jar

Sexton Co., Chicago, III.

&

Cribben

•

ing

1,000 snares of common
stock (par $5). Price—$5.50 per share. UnderwritersDavid N'oyes & Co. and Swift, Henke Co. of Chicago,
111.
Proceeds—To selling stockholder.
•
Crown Finance Co., Inc., New York
Jan. 25 (letter of notification) $50,000 of 5% subordi¬
nated debentures due May 1, 1980.
Price—At principal
amount in denominations of $1,000, $500 and $100 each.
Underwriter—Hodson & Co., Inc., New York. Proceeds
(letter of notification)

5

Feb.

the
ove

Pri
Yoi

.

| Bui
tie
•

Fet
con

J

working capital.

—For

Un

Chicago, III.
Oct. 23 filed 132,182 shares of common stock (par $5),
of which 4,818 shares are to be offered to stockholders
and 127,364 shares to public. Price —To stockholders at
$5 per share and to public at $6.25 per share. Underwriter—None. Proceeds—For investments.
:.YY.

mi'r

(2/19)
cumulative convertible

Fo;

Culver

Corp.,

8Y1
De<

(P
wf

Realty & Securities Corp.

Dansker
Nov. 20 filed

300,000 shares of 6%

Ofl

•'

preferred stock (par $5) and 300,000 shares of class B
common stock
(par 35 cents) to be offered in units, of
one preferred and one class B share "on a best-efforts
basis." An additional 25,000 shares of each class of stock
are to be issued to underwriters as additional compensa¬
tion for resale to public. There will be reserved for con¬
version of the preferred stock 1,300,000 shares of class B
common stock. Price—$6 per unit. Underwriter—Dansker
Bros. & Co., Inc., New York. Proceeds — For working
Statement effective Jan. 26.

capital.

■

Fe
co
m

Pi

tii

Ja
sti

>

,

bi

Duggan's Distillers Products Corp.
Oct. 27 (letter of notification) 340,000 shares of com¬
mon stock (par 10c).
Price—75 cents per share. Under¬
writer—Olds & Co., Jersey City, N. J. Proceeds—To pay

Gi
Pi
t

($20,000) and for
Y ,
•
Dutch Flat Mines, Inc., Winnemucca, Nev.
Feb. 1 (letter of notification) 300,000 shares of voting
common stock.
Price—At par ($1 per share.)
Under¬
writer—None, but James Athey of Salt Lake City, Utah,
will have an exclusive sales contract.
Proceeds-—To
equip mine with a furnace and other working equip¬

balance of

purchase price for building

working capital.

Y

>

*

sto

pai
cor
ant

urv

ita

Winnemucca, Nev.*

Ja

Fund, Boston, Mass.

Eaton & Howard Balanced

•

Fe

.

st

Office—1127 Bridge Street,

ment.

tb

Underwriter—Eaton &
Howard, Inc., Boston, Mass.—Proceeds—For investment.
Feb. 13 filed 700,000 trust

Eaton & Howard

•

Howard,

shares.

Stock Fund,

Feb. 13 filed 700,000 trust

shares.

Electric

Boston, Mass.

f

.

Underwriter—Eaton &

investment.

Proceeds—For

Inc., Boston, Mass.

Emerson

su

sh

lit
Si

J;

Manufacturing Co.

cc

cumulative preferred
stock, series A (par $50), convertible into common
stock prior to Jan. 1, 1961, to be offered initially for
subscription by common /stockholders at rate of one
share of preferred for-each eight common shares held.
Price—To be supplied by amendment.
UnderwritersSmith, Barney & Co. and Van Alstyne Noel Corp., of New
York; and Newhard, Cook & Co., St. Louis. Mo. Fr°ce®®s
—$1,015,565 to be used to retire presently outstanding 7%
preferred stock; $450,000 to cover the cost of a new
plant in Bedford, Ind.; approximately $350,000 to reim¬
burse the company's treasury for cash funds used in tne
purchase of its St. Louis plant from the U. S. Govern¬
ment'in September, 1950: and the balancp to provide

stc

regis¬

st<

Dec.

29

filed

57,846

Facsimile
29 filed

Dec.

&

of

shares

additional working capital.

Request to withdraw

Electronics

XV

p;
ac

Ne

Oc

Je

inj
lir

lia

De

Pi

\Y;

Feb. 8.

Corp.

400,000 shares of class A

(3/1-15)

St

>

•

convertible stocK

(Par.^J

(par $1) and 1,000,000 shares of common stock
cents) to be reserved for conversion.
Price—$2.50 per
shar.e for class A stock, with an underwriting commission
of 50 cents per

Ross & CO.,

share. Underwriter—Graham,

New York.
Proceeds—To repay indebtedness to
RFC, and the balance to develop and produce fascimu
transmission equipment and for materials.

Jc
st

I

\l

Inc.,

3(

J

Pa. >
of commo

Fleetwood-Airflow/ Inc., Wilkes-Barre,
Jan. 22

•

Off

Underwriter—None.

amendment.

& Cable Corp.'1'•

Street, San Francisco, Calif.

h

Clo

New York
(
Dec. 27 filed a maximum of 500,000 shares of capital
stock (par 10 cents), to be offered in exchange for an
unspecified number of shares of common stock of Bates
Manufacturing Co..
(Consolidated now owns 51,400
shares, or approximately 13% of the 391,500 outstanding
Bates
shares).
Exchange Rate —To be supplied by

•

Circle Wire

■Pri<

Consolidated Textile Co., Inc.,

tration statement filed

Street, San Francisco, Calif.

ADDITIONS
Fro

Commerce to secure

Berlin, N. H.

Co.,

Jan. 25 filed 144,151 shares of $5

•

Corp.

486,312 shares of
in

share.

Austin-Western

California

B.

'■{'J

Bluefield

properties.

Jan. 8

ft

one

None.

•

Captiva, Fla., the selling stockholder.

i'V

for

shares of
Underwriter—
1%

of

basis

on

White, Weld & Co.; and A. C. Allyn & Co., Inc.

(2/26)

stock (par $10) to be offered for subscription by common
stockholders of record Feb. 26, 1951, on the basis of onefifth

Baldwin

stock

common

solicit exchanges.

Boston, Mass.

\>

Co.

•

(letter

stock to be

Western

Feb. 2

Afton Oaks

•

Registration

Now in

INDICATES

SINCE PREVIOUS ISSUE

(letter of notification) 28,000 shares

ir

I!

Price—At market (estimated a
$1.25 per share). Underwriter—De Pasquale Co., Nev
York,, and J. Howard O'Connor, Pelham, N. Y. Proce
—To selling stockholders.
"Y
'
'
stock

(par 50 cents).

3]

If
B

.

•

C

Burbank, Calif.
.•
39,500 shares of caP]
be issuable upon exercise of non-trap *
held by 11 employees of the compa y-

Flying Tiger Lines, Inc.,
Jan. 25 (letter of notification)
stock (par $1) to
ferable warrants,

Price—$5
For

per

share.

Terminal, Burbank, Calif.
•

Feb.

5

cl

Office—Lockheed A
tY.

.

,

-

Clothing, Inc., Des Moines, Iowa
(letter of notification) 1,500 shares of comrnk

Frankel

stock and 750 shares of 4%

N

proceeas-j

Underwriter—None,

general corporate purposes.

Ji
st

cumulative

preferred sto

!

E

j

t
F

st

si

Number 4986

173

Volume

The Commercial and Financial Chronicle

.. .

At par ($100 per share).
Underwriter—None.
proceeds—1.T0 purchase the mercantile assets of Frankel
Clothing Co. Office—517 Walnut Street, Des Moines, la.

price

Kingsburg Cotton Oil Co., Kingsburg, Calif.
29 (letter of
notification) 5,000 shares of capital

Jan.

NEW ISSUE CALENDAR

Offering—Expected privately today.

Lake Superior District Power Co

-^Common

February 19, 1951
Realty & Securities Corp
Pfd. & Com.
Laclede-Christy Co
Common
New England Power Co., noon (EST)
Bonds
Dansker

General American Oil Co. of Texas

February 20,
Southern

5 tiled 90,748 shares
Price—To be supplied by

of common stock (par $5).
amendment. Underwriter—
Sanders & Newsom, Dallas, Texas. Proceeds—For work¬
ing capital and to acquire and develop oil and gas prop¬
Feb.

J

8:30

*

California

February 21,

filed 121,715 shares of common stock (par $1) be¬
offered to common stockholders of record Feb. 5 at
the rate of one share for each four shares held, with an
oversubscription privilege; rights will expire Feb. 21.
Price—$9.50 per share. Underwriters—Hirsch & Co., New
York; M. M. Freeman & Co.; Emanuel Deetjen & Co.;
Butcher & Sherrerd. Proceeds—To expand plant fac lities. Statement effective Feb. 5.

Armco

ing

Tennessee

..

Distilleries

Glenmore

filed

28

11

29

(B. F.)

Television

common

;

stock

upit.

are

5,073 shares of

Gulf Insurance

Co.,

stock.

Box

Jan.

16

one

working

f

March

Edison Co

Edison

Potomac

.

29,

Bonds

....

1951
...Common

held;

Bonds

Co

...Common

—

1951
Bonds

Bonds

1951

5,

..Bonds

Georgia Power Co
July 17, 1951
Mississippi Power Co
—_—...

on

..Preferred

Power

Alabama

cap¬

Oct.

2

Fire

Insurance

v

.

Bonds

Co

•
*

Office—80 Wall Street,

increase

insurance,

liability coverage.

Holeproof

a

7

including automobile casualty
Financing indefinitely delayed.

Hosiery

Co.,

(letter of notification)

stock (par

$5). Price—$14

per

Milwaukee,

Idaho

Wis.

West Fowler

Maryland Mines Corp., San Frahcisco,

Jan.

*

Office—Room

Building, San Francisco, Calif.

'"<Jianapolis

Power & Light Co.
d 196>580 shares of common stock (no par) bered.t° common stockholders of record Feb. 1,

on

basis of

one

share for each six shares held, with

iQ^i°Ve«u.bscription privilege; rights to expire Feb. 15,
Rmfk
r*ce—$28 per share.
Underwriters—Lehman
rotners;

Goldman, Sachs & Co.; and The First Boston

Proceeds—For construction

'srael
i

program,

Steel Corp.

Price~At par ($10
Proceeds—For

Irein

per share).

corporate

ase of

merchandise

&

Metrick,

Broadway,

of

common

Underwriter-

purposes

(steel) for resale.

320

and

the

pur-

Office—Care of

New

York, N. Y.
Jamaica Water Supply Co.
eb
*7 (letter of
notification) 4,545 shares of common

•

ock
are-

(no par).

Locks, Conn.

10,950

$5

of

shares

Price—At market

(estimated at $22

per

Underwriter—Blyth & Co., Inc., New Yorky who




Feb.

Trust Co.,

as

agents, at par. Pro¬

mon

Oil

Corp., Conrad, Mont.

(letter of notification). 1,200,000 shares of com¬

19

stock (par

10), to be offered initially to stockholders
basis; rights to expire
cents per share to stockholders;

of record Jan. 19 on a one-for-two

Price—25

7.

March

cents

to

public.

Massachusetts

Feb.

Underwriter—Tellier &

Co., New

Proceeds—To drill wells and develop leases.

York.

Second

Investors

Fund,

Inc.

400,000 shares of capital stock. Price—At
Underwriter—Vance, Sanders & Co., Boston,

filed

9

market.

Proceeds—For investment.

Mercantile Acceptance Corp. of

California

(letter of notification) 5,000 shares of first pre¬
ferred stock, 5% series.
Price—At par ($20 per share).
Underwriter—Guardian Securities Corp. of San Fran¬
4

Proceeds—For

corporate

purposes.

Office—333

Montgomery Street, San Francisco, Calif.
Jan.

5

(letter of notification) 1,500 shares of common
being offered to common stockholders of record

6, 1951, on basis of one new share for each share
held, with an oversubscription privilege; rights to expire
on Feb. 15, 1951.
Price—At par ($50 per share). Under¬
writer—None.
Proceeds—For conversion to dial tele¬
Jan.

phones and for expansion program. Office—21 S.
Street, Selinsgrove, Pa.
Mission

Appliance Corp.,

Market

Hawthorne, Calif.

July 24 filed 50,000 shares of 6% cumulative

convertible

Price—At par ($20 per share.) Under¬
writer—Lester & Co., Los Angeles, Calif. Proceeds—To
retire bank loans and install machinery and equipment
preferred stock.

proposed new plant to be located east of the Rocky
Business—Manufacturers of gas and electric

a

Mountains.
and

space

heaters.

Request

to

withdraw

SEC

to

of

record

on

a

Inc.

cumulative preferred

offered

to

employees.

stock (par

subscription by common

17-day standby at rate of

share for each five shares

be

held; unsubscribed shares
I rice—$105 per share for

plus accrued dividends; and $15 per share
common.
Underwriters—The First Trust Co. of Lin¬

preferred,
for

Chicago, 111., and asso¬

Proceeds—For* new construction.

ciates.

(letter of notification) 12,683 shares of common
stock (par $5), of which 10,344 shares are to be offered
to stockholders, 344 shares to employees and 1,995 shares
to underwriters. Price—$8.25 per share. Underwriter—
Blair, Rollins & Co. Inc., New York.
struction of electric utility plant.

Culver City, Calif.
(letter of notification) 34,o00 shares of common

Price—$2.87V2 per share. UnderwriterMorgan & Co., Los Angeles, Calif. Proceeds—To three

stock

(par $1).

selling stockholders.
King Bros. Productions, Inc., Hollywood, Calif.
(letter of notification) 300,000 shares of common
stock to be offered first to present stockholders in pro¬
Jan. 19

thereafter to employ¬
ees; and any unsubscribed shares to public.
Price—At
par ($1 per share).
Underwriter—None. Proceeds—To
make motion pictures and for general corporate pur¬
poses.
Office—4376 Sunset Drive, Hollywood 27, Calif.
portion to their present holdings;

Kingfisher Water Co., Kingfisher, Okla.
(letter of notification) 250 shares of 5% cumumative preferred stock. Price—At par ($100 per share).
Underwriter—None.

* Proceeds—For

new

construction.

Offering has been deferred.

Kingsburg Cotton Oil Co.
24 (letter of notification)
5,000 shares of capital
(par $1). Price—At market (about $4.25 per share).
Underwriter—None. Proceeds—To Fewel Brothers, Inc.,

Jan.

stock

the selling

burg, Calif.

stockholder.

Address—P. O. Box 277, Kings¬

Proceeds—For con¬

Evanston, III.

of notification) 300,000 shares of common
stock (no par) to be sold to a group of 20 individuals.
Price—$1 per share. Underwriter—None. Proceeds—For
operating capital, and to complete purchase of tools, dies
and inventory from Kurtis-Kraft, Inc. Office—1000 Grey

Nov

29 (letter

Ave., Evanston, 111.
Nash
11

Jan.

Finch

Co.,

exceeding $20 per share.
For working capital.
Hennepin Ave., Minneapolis, Minn.

(par $10). Price—At not
Underwriter—None. Proceeds

Office—1750
New

Minn.
12,137 shares of common

Minneapolis,

(letter of notification)

stock

Kimberly Corp.,

Jan. 29

Edison Co.

Missouri

Muntz Car Co.,

Co.,

(no par) and 122,812 shares of common

$5), the latter to be offered for

Office—

Dec. 27

2 (letter of notification) 15,000 shares

No
one.

filed

5

stock

•

^ro Se' p™ceeds-For working capital.

iqfi

of record

stockholders

share). Underwriter—None, but unsubscribed

per

Lexa

Conn.

Natural Gas

coln, Neb., and Cruttenden & Co.,

(letter of notification) 200,000 shares of capital
°ck, to be sold to C. Marshall Wood pursuant to an
greement. Price—At par ($1 per share). Underwriter

intf

Kansas-Nebraska

*

one

California
30

T„

Aircraft Corp., Windsor

(letter of notification) 20.000 shares of class A
non-voting common stock (no par). Price—$6 per share.
Underwriter—None.
Proceeds—For working capital to

stockholders

^

Russ

Kaman

'

ist., Milwaukee, Wis.
-

to

Jan. 29

Feb: 7

Bradley Field, Windsor Locks,

and

20,000 shares of common
share. Underwriter—None,

proceeds—For working capital. Office—404

an

first

the Salisbury Bank &

for resale to public.

develop and manufacture rotary wing aircraft.

capital and surplus in order to offer additional

lines

Dec.

has agreed to purchase said shares
Proceeds—To selling stockholders.

(par

of,

offered

be

statement filed Jan. 29.

Co., Philadelphia
64,000 shares of capital

(letter

($25

water

of notification)
$5). Price—$4.50 per share. Underwriter—
Jenks, Kirkland & Co., Philadelphia, Pa.: Proceeds—To

stock

to

shares will be offered at private sale to public through

in

September 11, 1951

per

(3/5)

2, 1951; rights to expire on Feb. 28, 1951. Price—At par

stock

1951

April 24, 1951
Monongahela Power Co

un¬

Superior District Power Co.

Middlecreek Valley Telephone Co.
Common

April 9,

stock

Hamilton

stock

1951

Public Service Co. of Oklahoma

cap¬

Co., Inc., Mil¬
construction.
"

Co., Lakeville, Conn.
(letter of notification) 1,200 shares of common

cisco.

Co

....

June

shares

1951

Co

Southern

New York
5, N. Y>

sin

:

supplied by amend¬

Baird &

new

Lakeville Water

Dec.

27,

per

42,800 shares of class A
(par $1).
Price—$3 per share.
Underf writer—Jackson & Co.,
Boston, Mass.
Proceeds—For
partial financing of anticipated military contracts and to

r

'

Tex.

working
1771, Dallas, Tex.

acquire manufacturing facilities.

basis. Price—To be

competitive bidding. Probable bidders: Halsey, Stuart &
Co. Inc.; Otis & Co.; Robert W. Baird & Co., Inc. Pro¬
ceeds—For expansion program.

Preferred

Co.....

"American Gas & Electric

preferred

Price—$11

(letter of notification)

common

Lake

•

Gyrodyne Co. of America, Inc.

_.

:

.

Detroit

present stockholders

ital. Address—P. O.

Co., Chicago.

Feb. 5 filed $2,000,000 first mortgage bonds series D, due
March 1, 1981. Underwriters—To be determined through

30

...Preferred

Common

Consumers Power Co.....
!

•

subscribed shares to be offered to public. Price—$30
share. Underwriter—None^ Proceeds—For

•

Power

(par $5).
Underwriter—
Proceeds—For working

1951

April 3,

Proceeds—For

share for each 15

new

Common

Equip. Trust Ctfs.

March

10,000 shares of preferred

Dallas,

Preferred

(EST)

1951

20,

(2/19)

stock

amendment.

Underwriters—Robert W.

Mass.

March

Jan. 10 (letter of notification) 10,000 shares of common
stock (par $10), to be offered to
one

19,

April 2,

common

ment.

Jan.

Pacific Gas & Electric Co.

common

Inc.,

to be offered in units of

Underwriter—None.

the basis of

March

v

Co.

of

one-for-five

a

Bonds

1951

Transcontinental Gas Pipe Line Corp

working capital.

share

by

common

ceeds—For expansion program.

^

ital.
:

7,

•Illinois Central RR.____

(par $10) and 10,000 shares of common stock (no
par), of which all of the preferred and 5 000 shares of
one-half

5,

March 8,
1951
Virginia Electric & Power Co

stock

and

supplied

of

Lake Superior District Power Co.
(2/16)
Feb. 5 filed 41,845 shares of common stock (par $20) to
be offered to common stockholders of record Feb. 16 on

,

Washington Investments,
Washington, D. C.

common

Class A

Common

Debentures

Pennsylvania

(letter of notification)

1951

West Penn Electric Co., 11 a.m.

Inc.,

Greater

Feb. 2

Common

Borden Co

(no par). Price—At market abouH $43 per share),
$40 per share. Underwriter—None, but
Goldman, Sachs & Co., New York, will act as agent.

t

1,

March

but not less than

.

50,000 shares

be

Davis &

Jan. 25

1951

Ventures, Inc

stock

stock

Proceeds—For

Bonds

.Facsimile & Electronics Corp

Co.

(letter of notification)

filed

Paul H.

.....Debentures

1951
Lake Superior District Power Co

.

•

(EST)

a.m.

March

Boise, Ida.
- <
Feb. 5 (letter of notification) 300,000 shares of assessable
common stock.
Price—50 cents per share, with assess¬
ments limited to 10 cents per share.
Underwriter—None.
Proceeds—For mining and equipment.
Office—405 Con¬
tinental Bank Bldg., Boise, Ida.
:
Goodrich

Bonds

1951
of New York, Inc.

March

Industries,

Golden Century

Jan.

(EST)

a.m.

February 28,
Prospect Exploration, Ltd

(par $1). Price — To be filed by amendment. Under¬
writer—Glore, Forgan & Co., New York. Proceeds—
For working capital and
general corporate purposes.
Offering—Deferred indefinitely.

i

29

Price—To

....Common
Co.

Standard-Thomson Coip

.

shares of class B

159,142

Laclede-Christy Co., Chicago, III.
Jan.

1951

Transmission

Consolidated Edison Co.

& Exploration Co.

8, Wash.

Common

...Bonds

February 27,

Price—At par (10 cents per share).
Underwriter—None. Proceeds—For working capital, to
mine lead and zinc.
Office—711 Hutton Bldg., Spokane

•

Gas

stock.

common

Dec.

February 26,
Corp...!

Steel

11:30

notification) 250,000 shares of assessable

Feb. 1 (letter of

1951

(EST)..

noon

Dinkins, - the selling
277, Kingsburg, Calif.

Proceeds—To John H.
stockholder.
Address—P. O. Box

waukee, Wis.. Proceeds—For

General Instrument Corp.

Mining

'

.Bonds

Connecting Ry. Co.,

Gibbonsville

Co.

Central Illinois Electric & Gas Co

•

Jan. 2

t

Edison

Underwriter—

share.

per

capital.

1951

(PST)

a.m.

(par $1). Price—$4.25

Fewel & Co., Los Angeles, Calif.

\

February 16, 1951

•" GardonvSlle Cooperative Telephone Association
7 (letter of notification) 9,000 shares of preferred
stock.
Price—At par ($1 per share). Underwriter—
None.
Proceeds—To meet REA requirements requesting
that an equity of $9,000 be raised by the Association.
Office—Brandon, Minn.

stock

Feb.

erties.

43

(751)

—

England Power Co. (2/19)
$12,000,000 of first mortgage

Jan. 24 filed

bonds, series D,

1,1981. Underwriters—To be determined by
competitive bidding. Probable bidders: Halsey, Stuart &
Co. Inc.; Harriman Ripley & Co. Inc.; Lehman Brothers;
Kidder, Peabody & Co.; First Boston Corp.; Merrill
Lynch Pierce, Fenner & Beane; Equitable Securities
Feb.

due

Corp. and Blair,
—To
To
Room

ment

New

Jan

Rollins & Co. Inc. (jointly).

Proceeds

bank loans and for new construction. Bids
be received up to noon
(EST) on Feb. 19 in
1109 at 441 Stuart Street, Boston 16, Mass. State¬
effective Feb. 13.

repay

Hampshire Electric Co.
shares of $4.50 cumulative

25 filed 15,000

preferred

$100) and 140,000 shares of common stock
(no par). Of the latter, 130,100 shares are to be offered
for subscription by common stockholders of New Eng¬
land Gas & Electric Association (parent) at rate of one
New Hampshire share for each 12 New England common
stock

shares

(par

held.

Underwriter—To be determined by com¬

First Boston
Weld & Co.
Ripley & Co., Inc. (latter for pre-

petition biddnig. Probable bidders:
The
Corp.; Kidder, Peabody & Co. and White,

(jointly); Harriman

Continued on page

44

■JU-IU

IWUUUW

44

•

Southern Union Gas Co.

Continued jrorn page 43
only),

held,-with

shares

Jan. 31

11,055 shares of capital

(letter of notification)

J an. 30.

12

Feb.

be publicly offered.

unsubscribed

basis;

l-for-2

a

on

'•

^

Proceeds—For

—None.
'n

East

71st

$

(Ohio)

Manufacturing Co.

notification) 2,500 shares of class B com¬

Price—At par ($100 per share).

stock.

mon

working

capital.

Underwriter
Office—4455

•

Virginia Gas Service Corp.
Feb. 8 (letter of notification) $50,000^of
debentures
due Feb. 1, 1976.
Unlerwriters—Bioren & Co., Phila¬
delphia, Pa., and C. T. Williams & Co., Inc., Baltimore,
Md.
Proceeds—To construct proposed natural gas pipe

Jan. 8

St., Cuyahoga Heights, Ohio.

Pact Gas

Co., Cushing, Okla.

(letter of notification) $50,000 of first mortgage
serial 6% bonds due 1961-1971. Price—At 100%. Un¬
derwriter—R.

J.

Inc., Oklahoma City, Okla.
Proceeds—To retire certain capital stock and for con¬
struction. Office—212 East Broadway, Cushing, Okla.
Edwards,

■

Pan

h

American

£

a

Piasecki

Helicopter Corp., Morton, Pa.
Feb. 2 (letter of notification) not to exceed 5,000 shares
of capital stock. Price—At market (approximately $35
per share). Underwriter—None. To be offered through
regular brokers acting as agent for the seller. Proceeds—
To A. Felix du Pont, Jr., the selling stockholder.

fhr
[VH

i-H

;§

writer—None.

iM)
nt

W/ft

New York.

7

Proceeds—For investment.

?.

bonds dated Jan.
•

"

r

v;

Piper Aircraft Corp., Lock Haven, Conn.
(letter of notification) 25,000 shares of common
stock (par $1). Price—At market on New York Curb Ex¬
change (about $3.50 per share). Underwriter—None, but
sale will be made through Josephthal & Co., New York,
Proceeds—To William T. Piper,
President, the selling

J

if

Feb. 5

v)
ill

•fcj
h

stockholder.

h

,

p>

Pittsburgh-Continental Oil Co.
Jan. 31 (letter of notification) 2,000 shares of

>w

stock.

Price—At

None.

Proceeds—To

iM'i

par

and for

i

•
Prospect Exploration, Ltd. (Canada)
(2/28)
JFeb. 9 filed 170,000 shares of common stock (par $1),
of which 75,000 will be sold for the account-of the
com¬
pany and 95,000 shares for selling stockholders.
Price—
$11 per share. Underwriter—White, Weld & Co., New

York.

•

Proceeds—To

general

working

company

purposes.

and

,

Pulse
'ih

Publishing Co., Washington, D. C.
(letter of notification) 18,000 shares of preferred

Jan. 29
stock

and

der

Corp., Omaha, Neb. Proceeds—To retire presently
outstanding debt and for corporate purposes.

If

X'.t"
'

it*-

950

shares of common stock.
Price—$10 per
Underwriter—None. Proceeds—To develop, pro¬
mote, print and publish a news and opinion magazine to

I
hi

■

Address—P.O. Box 729, Panama

VJan.

31J filed

-

scription

the basis of

■>,»!

Philadelphia, Pa.
120,000 participating units (before
Price—At

W

net

10-for-l

asset

value.

investment.

Underwriter—None.
Proceeds—For
ness—Common law investment trust.

Busi¬

!

,

Saul

(R. F.) Co., Washington, D. C.
(letter of notification) $11,500 of 5%
promissory
notes of William J. and
Margaret M. Rowan and Ray¬

a

Jan. 31

I

mond

T.

Saul Co.
>>.

made.

"V.

and

Beatrice C. Brown.
Underwriter
B. F.
Proceeds—To reimburse
company for advances

South

State

Uranium

Mines

Ltd.

(Canada)

Nov. 30 filed 560,000 shares of
capital stock.
par

*f.v
/'i'l

fV'i'

1

4p>

1

^

Southern California Edison Co.
(2/20)
Jan. 29 filed $35,000,000 of first
and refunding mortgage
bonds, series C, due Feb. 15, 1976. Underwriters—To
be
determined by competitive
bidding. Probable bidders*
Halsey, Stuart & Co. Inc.; Blyth & Co., Inc.; The First
Boston Corp
and Harris, Hall & Co.
(Inc.) (jointly);
Kuhn, Loeb & Co. Proceeds—To retire bank
loans and
program.

Bids—To be

*\ J

West Fiith Street, Los
Angeles

^Pi-I8K(1ftGr of n?tif£ation)

$191,500 of 5% subordln&

par. UnderwriterCo., Lakeland Fla

loans and for working

Bldg., Atlanta, Ga,

*55.546 shares of
cf

capl-

a

expansion program.




common

one

West Penn
termined

9, with

System.

Electric

Underwriters—To be de¬

competitive bidding./ Probable /.biddefsr/
Lehman Brothers and Goldman, Sachs & Co. (jointly);
Morgan Stanley & Co.; W.* C. Langley. & Co. and The
1 First Boston Corp.- (jointly); Harriman Ripley & Co.,
[Inc. Proceeds—To purchase additional equity securities
; of two of its subsidiaries—Monongahela Power Co. and
[The Potomac Edison Co. Bids—Expected to be opened /
: at 11 a.m. (EST>-on March 7.
- \
~
■
*
by

!

!/■/*

Westerly (R. I.) Automatic Telephone Co.
I Dec. 1 (letter of notification) 7,000 shares of common

j stock to be offered to stockholders of record Dec. 9,

Feb.

1

competitive bidding.

notification) 2,500 shares of common
$1) of which 1,100 shares are being reoffered
(1,000 sold Jan. 29 at $37 per share and 400 on Jan. 30 at
$40 per share).
Price—Of remaining 1,400 shares at

& Co.

market

(about

$37

Barney

&

New

Tennessee Gas Transmission Co.

.

(2/26)

Jan. 26 filed $35,000,000 of first mortgage pipeline bonds
due Feb. 1, 1971.
Underwriters—To be determined by

Probable bidders: Halsey, Stuart
Inc.; Stone & Webster Securities Corp. and White,
& Co. (jointly).
Proceeds—To repay bank loans
and for expansion program.
Bids—To be received up
to 11:30 a.m. (EST) on Feb. 26.
•

Thiokol Corp.,

common

Feb.

6

—

Thiokol

Corp., Trenton, N. J.
of notification) 2,100 shares of capital
stock
(par $1). Price—Sold on New York Curb Ex¬
change between Jan. 19 and Feb. 5, 1951, at $7.25 to
$7,871/2 per share, or for a total of $16,038. Underwriter—

Feb.

9

(letter of

stock (par

Co.,

None, but Smith, Barney & Co., New York, offered
rities

behalf

on

stock

(par $7.50)

common stockholders
LS °f. 0I?e share for each 10

oversubscription privilege*

rights

loans

Statement effective Jan

16

and

for

of

the

Dow

Chemical

Co., the selling

Thomas

(F. C.), Inc.
(eltter of notification) 2,644 shares of 6% cumu¬
lative preferred stock, class B. Price—At par
($50 per
Underwriter

to

pay

for

—

None.

store

Proceeds

equipment

—

and

For

working

salable

mer¬

chandise.

Business—Owns and operated chain of retail
food stores. Office—422 East State Street,

Olean, N. Y.

United

Fund, Inc., Kansas City, Mo.
Feb. 7 filed
1,000,000 shares of United Income Fund;
500,000 shares of United Science Fund; $6,000,000 prin¬
cipal amount of periodic investment plans and 600,000
shares of United Accumulative Fund which will be
pur¬
chased with the proceeds of the investment

plans; and
100,000 additional United Accumulative Fund shares for
directly and through systematic investment plans.

sale

Price—United

Income

Fund

shares

at

net

asset

value

plus 8%

of offering price; United Science Fund shares
at net asset value plus 8V2% of
offering price; United
Fund

shares

at

net

asset

value plus 8%
Accumulative Fund
shares acquired through
periodic investment plan at net
asset value; payments made under the
plan being subject

of

to

offering price;* and

deductions

Jan.

9

stock

record

Underwriter

Proceeds—To

—

two

Smith,
selling
*'•/

Tubes, Inc.

Jan. 26

(letter of notification) 117,450 shares of common
(par 10 cents). Price—75 cents per share. Under¬
writer—Hugh J. Devlin, New York. Proceeds—Equally
to Emanuel Abrams, Meyer Bonuck and Allen H. Shin-

stock

del,

who

each will loan one-half of net proceeds^ to
who will use same for working capital. Office:

Avenue, Clifton, N. J.

Piospective Offerings
Alabama Power Co.

(9/11)

"

Feb.

6, it was stated that company contemplates issuance
sale of $10,000,000 first mortgage bonds. Under¬
writers—To be determined by competitive bidding. Prob¬
and

Jan. 30

•

York.
.

Zetka Television

secu¬

stockholder.

capital

share).

per

stockholders.

(letter

Utah

™UerX1Z ?" Proceeds—To repay bank share® Vnfer!
Feb- 16. Price-$P33 pe/

1writer--r-None.

of

—

Reed, Inc.

^ecOrd^Tan ?n subs^riPtio.n by

share^^eld sVfth T
f beld, with an

,

;

Accumulative

Southern Natural Gas Co.

5"

:;1

to

601

53, Calif.

Sw $100,000 of
For *innennnrJ'Jeules<E' Prlc«--At

f/i of?
So£e£UC<; bank
tal. Office—220
Healey

up

company,

Atlanta, Ga.

debentures, Allen

t:

received

01l Feb* 20' at office of

Southern Discount
Co.,
iW

At

per

construction

shares

;

1950, of which total 4,434 shares will be subscribed for
by New England Telephone & Telegraph Co. Price—At
Taylorcraft, Inc., Conway, Pa.
par ($25 per share). Underwriter—None> Proceeds—For
Feb. 5 (letter of notification). 150,000 shares of common
•'/ general corporate purposes. Office—38 Main St., Wesstock. Price
At par ($2 per share). Underwriter —
/ terly, Rhode Island.
•
•
'
Graham & Co., Pittsburgh, Pa. Proceeds—For working
•
Yampa Valley Coal Co., Denver, Colo.
capital, to pay as due the obligations of the Ohio cor¬
Feb. 6 (letter of notification) 30,000 shares of 7% cumu¬
poration which it has assumed.
/
>
lative participating preferred stock (par $5) and 30,000
Television Ventures, Inc., New York (3/1)
shares of common stock (no par)/w Price—$5 per share.
Feb. 1 (letter of notification) 49,000 shares of common
Underwriter—None.
Proceeds—To engage in strip min¬
stock.
Price—$1 per share. Underwriter—None. Pro¬
ing operations for coal, and for equipment and working
ceeds—For organizational and general operating ex¬
capital.
Office—506 Cooper Bldg., Denver, Co.
penses. Office—55 West 42nd Street, New York, N. Y.
Young (Thomas) Orchids, Inc.

share).

Price

share). Underwriter-Optionee—Robert Irwin
Martin of Toronto. Proceeds—For
commissions, explora¬
tion and development
expenses, and working capital.

for

■■n

($1

City, Fla,

additional share for each
an, oversubscription
i privilege; rights to expire March 26.
Unsubscribed
j shares to be offered to employees of companies in the
on

131-137 Getty

filed

market

(3/7)

additional

320,000

ten shares held about March

•

7

At

1 stock (no par) to be offered to its stockholders for sub¬

company

Feb.

—

City, Fla.
(letter of notification) 20,000 shares of class B
stock (par $1) and $125,000 of 15-year 5% de¬
bentures (latter in denominations of $100, $500 and
$1,000
each). Price—Of stock, $2 per share; of debentures, at
100%. Underwriter—None. Proceeds—To expand busi¬

Co., the selling stockholder.

Office—930 F Street, N

Fund,

split-up effective Feb. 15).

Price

5

<•

Rittenhouse

cents).

common

Trenton, N. J.
(letter of notification) 10,833 shares of capital
stock (par $1). Price—At market (about $7.75 per share).
Underwriter
None, but Smith, Barney & Co., New
York, will handle sales.
Proceeds—To Dow Chemical

chare.

be called "Pulse Magazine."

50

(par

West Florida Gas & Fuel Co., Panama

Jan.

Washington 4, D. C.

.

t

;

Weld

for working capital

•'> i

1, 1951 and due Jan. 1, 1976. Price—
Underwriter—Wachob-Ben-

102% and accrued interest.

/ .V;/

,

common

($100 per share). Underwriter—
acquire leaseholds and equipment
working capital. Office—4403 Center Ave., Pitts¬
burgh 13, Pa.

V>:

Business—Investment.

Suburban Water Co., Oklahoma City, Okla.
Feb. 1 (letter of notification) $294,000 of first mortgage

Pine Street Fund, Inc., N. Y.
Feb. 5 filed 500,000 shares of common stock (par $1).
Price—At market. Underwriter—Wood, Struthers & Go.,
•,

.

ap¬

Underwriter—Straus & Blosser,
Chicago, 111. Proceeds—To John A. Roberts, Chairman
of the Board, who is the selling stockholder.

I

State Bond &

Mortgage Co., New Ulm, Minn.
Feb. 5 filed $1,500,000 of accumulative savings certifi¬
cates, series 1207-A at $95.76 per $100 principal amount
and $15,000,000 of accumulative savings certificates, se¬
ries 1217-A at $85.68 per $100 principal amount. Under¬
:

"

,

sinking fund debentures,

porate purposes.

•ft

stock

common

West Penn Electrie Co.

(2/27)

on

(about $3 per share).

ness.

Milling Co.
series B, due Sept. 1, 1967, with common stock war¬
Jan. 24 (letter of notification) 200,000 shares of common
rants attached.
Price—To be supplied by amendment.
stock.
Price—At par
($1 per share).
Underwriter—
Underwriters—lee Higginson Corp. and P. W. Brooks
None.
Proceeds—To purchase machinery and equip¬
& Co., Inc., New York. Proceeds—To pay off RFC note,
ment, to construct a mill in Mexico and for general cor- v to
repay bank loans and for working capital."
: • ;
"1

■"V

of

Office—Matinsville, Va.

Standard-Thomson Corp.
Feb. 2 filed $1,500,000 of 5%

^

Wilkes-Barre, Pa.
(letter of notification) not to exceed 30,000 shares

Jan. 30

Southwestern

line.

,

Iron Works,

Vulcan

-

gether with funds received from sale privately of $12,000,000 3% first mortgage bonds and 10,000 shares of
preferred stock to be used to repay bank loans and for
construction program. Statement effective Feb. 1.

'

Jan. 5 (letter of

proving issuance of the new securities.

subscription privilege; rights to expire Feb. 14. Price—
$14.75 per share. Underwriter—Dillon, Read & Co. Inc.,
New York. Proceeds—From sale of common stock, to¬

Nebraska.

,

Preferred stockholders will vote March 2

March.

ing offered for subscription by common stockholders of
record Jan. 31, 1951, on a l-for-13 basis, with an over¬

Co.,
Lincoln, Neb. Proceeds—For working capital and to
produce anti-hog cholera serum and other pharmaceu¬
tical products.
Office—227 North 9th Street, Lincoln,
North American

•

■

shares of common stock (par $1) be¬

Jan. 12 filed 233,576

Price—$25 per share to stockholders,

$26.50 to public. Underwriter—Ellis, Holyoke &

and

■

v

Public Service Co.

Southwestern

I

Proceeds—For working

Virginia Electric & Power Co. (3/8)
Feb. 1 filed 100,000 shares of preferred stock (par
$100);
Price—To be supplied by amendment; Underwriter—
Stone & Webster Securities Corp., New York. Proceeds—
For construction expenditures.
Offering—Expected in

■

about
shares to

stock to be offered first to stockholders of record

of notification) 1,343 shares of capital
to be offered to employees. Price—$45

(letter

(no par)

share. Underwriter—None.
capital. Office—Latrobe, Pa.

expire Feb. 26. Price—$16 per share. Underwriter—
None. Proceeds—For construction. Statement effective

Laboratories, Lincoln, Neb.

Thursday, February 15, 1951

.

per

to

Norden

8

stock

oversubscription privilege; rights

an

.

.

Vanadium-Alloys Steel Co.

.

Feb.

150,799 shares of common stock (par $1) be¬
ing offered for subscription by common stockholders of
record Jan. 25 on basis of one new share for each 10

Jan. 8 filed

Proceeds—To retire $2,425,000 of 2%%
bonds and the remainder to retire 4 V2% preferred stock
of New England. Expected late in February.

ferred

Financial Chronicle

The Commercial and

(752)

JiULJJiHH

for

sales

the

United

load.

Underwriter—Waddell

&

Business—Investment.
Home Fire

Insurance Co.

(letter of notification) 10,000 shares of
capital
(par $10), to be first offered to stockholders of

Jan. 19 for subscription on or before
Feb./ 28,
1951, on basis of one share for each six shares Jheld
Price—$20 per share. Underwriter—None. Proceeds—
For working capital.
Office—47 West South Temple,
Salt Lake City 1, Utah.

able bidders: Halsey, Stuart & Co. Inc.; Morgan Stanley
& Co.; Blyth & Co., Inc.; Harriman Ripley & Co., Inc.*,
Shields

&

Co.

Salomon

and

Hutzler

&

Bros.

(jointly);

Equitable Se¬
Corp. (jointly); Kidder, Peabody & Co.; The
First Boston Corp.; Lehman Brothers. Proceeds—For ex¬
pansion program.
Bids—Tentatively expected to be

Drexel & Co.; Union Securities Corp. and

curities

opened
•

on

Registration—About Aug. 10.

Sept. 11.

American

Dairy Products Co.
Feb. 12, it was reported that company plans early reg¬
istration of an issue of 300,000 shares of preferred
st0^
(par $4) and 300,000 shares of common stock (par 20
cents), to be offered in units of one share of each class 01
stock. Price
$5 per share. Underwriters — Emanuel,
Deetjen & Co. and Barrett Herrick & Co., Inc., both 0*
—

New York.

Proceeds—For

American

Jan.

26

Gas

&

purchase of new

Electric

Co.

announced that

company

340,000 additional shares of

equipment.

(3/29)

.

offering of about
stock will be made

an

common

basis
with an
oversubscription privilege; rights to expire April 17»
Price—To be filed by amendment. Underwriters—To be
determined bv competitive bidding.
Probable bidders.
The First Boston Corp ; Union SecurltiesbCorp.j/Dillon,
Read & Co. Inc., who will name compen'satidil Procee

to stockholders
of

one

—To

share

be

on

for

about March 30,

each

invested

subsidiaries

or

in

15

1951 on the

shares held, together

equity

securitiesto|:.[tbq-qE^ratin°

part of the plan for financing the^Amer¬
ican Gas & Electric System's large constructiqnt pr?$,£*n'
as

Registration—Expected
to

be received

on

about

March 29.

Feb.

28.

Bids—Expected

Number 4986

yolume 173

The Commercial and Financial Chronicle

. . .

Appalachian Electric Power Co.
5 it was stated the company plans to issue and sell
about $18,000,000 of first mortgage bonds in May or
June. Underwriters—To be determined by competitive
bidding. Probable bidders: Halsey, Stuart & Co. Inc.;
Kuhn, Loeb & Co. and Union Securities Corp. (jointly);
The First Boston Corp.; Harriman Ripley & Co., Inc.
Proceeds—For property expansion and improvements,
0n which company may expend up to $90,000,000 during
the next three years.
Feb

it was announced company plans issuance and
$27,500,000 new first mortgage 3% bonds, the pro¬
ceeds to be used to repay bank loans ($20,125,000 at
Nov. 30, 1949), to retire $3,500,000 funded debt incurred
in 1950 and for construction program. The sale of these
bonds is contingent upon approval by SEC of Arkansas
Natural Gas Corp.'s plan to split itself into two new
companies. Probable bidders: Halsey, Stuart & Co. Inc.;
First Boston Corp. and Lazard Freres & Co. (jointly);
Union Securities Corp.; Smith, Barney & Co.; Equitable
«aie of

Securities Corp.

Natural Gas Corp.

Arkansas

announced unexchanged new 3%% preferred
stock (issuable in exchange for 6% preferred stock on
basis of $10.60 of new preferred for each old share,
under proposal to split company into two units) may
be sold publicly.
1

Feb

bidders for debentures: Halsey, Stuart
Inc.; Morgan, Stanley & Co.; Kuhn, Loeb & CoBros. & Hutzler; Lehman
Brothers; Merrill
Lynch Pierce, Fenner & Beane and
White, Weld & Co.
&

Co.

Salomon

(.-jointly). Probable bidders for
competitive bidding: Morgan

Light Co.
Feb. 6 it was reported that the company will sell $8,000,000 additional first mortgage bonds, probably in late
summer or early fall. Underwriters—To be determined

Securities Corp. and
Central Republic Co. (jointly); Union Securities Corp.;

Securities Corp. (jointly); Equitable

Corp.; White, Weld & Co. Proceeds—

The First Boston

For construction program,

Pressprich & Co.
Proceeds will be used for
expansion program.
Jan.

estimated to cost about $20,-

10

City Electric Co.
Jan. 15 it was stated tentative plans call for the raising
of about $2,250,000 through an offer of additional com¬
stock

on a

l-for-10 basis held around May or June.

Probable underwriter: Union Securities Corp.

Proceeds

will be used to pay, in part,

construction expenditures,
which, it is estimated, will total about $5,400,000 in 1951.
Atlantic

1

City Electric Co.

Jan. 29, it was announced that the

stockholders will on
April 10 vote on a proposal to increase the authorized
cumulative preferred stock from
100,000 to150,000
shares. Previous preferred stock financing was handled
by private placement through Union Securities Corp.
and Smith, Barney & Co.
•

Bachmann

securities.

or

& Co.

Proceeds

—

•

Borden

Feb. 8 it

ly of
1981.

an

Co.

was

(3/7)

reported that registration is expected short¬

issue of $60,000,000 30-year 2%% debentures due

Price—To be supplied by

amendment. Underwriter

—Morgan Stanley & Co., New York. Proceeds—To retire
$45,800,000 of outstanding promissory notes, and the
balance used for general corporate purposes, including
maintenance of company's inventory and working capi¬
tal position.

Boston

Jan. 30,

J.

Edison

V.

will

cost

$65,300,000 through 1954. He added that
stock financing is planned until 1955.

common

no

Byers (A. M.) Co.
Jan. 25 L. F. Rains, President, revealed that the com¬
pany is considering a plan to refinance its 7% cumula¬
tive participating preferred
stock (par $100), about
50,000 shares outstanding. These shares are redeemable
at 110 and accrued

exchange
mon

a

stock.

dividends.

Holders may be offered

in

convertible

preferred stock, plus com¬
Company being advised by Blyth & Co., Inc.,
new

and Fahnestock & Co.

Carolina

Light Co.

Jan. 4 company informed the SEC that it intends to issue
and sell

approximately $20,000,000 of securities in addi¬
tion to the
$15,000,000 first mortgage bonds now being
publicly offered.
Central Illinois Electric & Gas Co.
Jan. 25 stockholders
approved a proposal to issue

and
publicly 25,000 shares of preferred stock (par $100).
Proceeds—For construction program. Offering—Tenta¬
tively expected about the middle of March.

sell

Jan.

Chicago, Milwaukee, St. Paul & Pacific RR.
24

there

talks

of

of re¬
funding bonds. In event of sale by competitive bidding,
probable bidders
may include Halsey, Stuart & Co. Inc.;
Kuhn, Loeb & Co.; Morgan Stanley & Co.
were

issuing

$60,000,000

the sale of
the time of the new

Probable

bidders

for

to be used for construction
program.

Avenue,

Proceeds—To
bonds due

redeem

the

company's

Ardmore,

March

15,

like

a

amount

of

first

mortgage

1951,

Jan.
of

it

9

was

between

Gas Co.

$50,000,000

and $60,000,000 of convertible
Underwriters—To be determined through

debentures.

competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; White, Weld & Co. and Paine, Webber, Jack¬
son Curtis
(jointly); Dillon, Read & Co. Inc.: The First
Boston Corp.; Blyth & Co., Inc.; Morgan Stanley & Co.
Proceeds—To finance construction program. Offering—
Expected late in April.
Jan.

Power Co.

(3/27)
Michigan P.

26

company sought
S. Commission
authority to issue $40,000,000 of first mortgage bonds
with interest not exceeding 27/s%
and maturing not

earlier than

1981.

Underwriters—To be determined by

competitive

bidding. Probable bidders: Halsey, Stuart
& Co., Inc.; Kuhn, Loeb & Co. and Union Securities
Corp. (jointly); Harriman Ripley & Co., Inc. and The
First Boston Corp. (jointly); White, Weld & Co. and
Shields

&

Co.

(jointly); Morgan Stanley & Co.; W. C.
Langley & Co. and Glore, Forgan & Co. (jointly).
Proceeds—To redeem $5,300,000 of first mortgage bonds,
to repay $8,000,000 of bank loans and for 1951 con¬
struction program.
Bids—Expected to be opened on
March

27.

Registration—Scheduled for Feb 23.

Jan. 18 it

Grande Western

RR.

securities in the Spring




or

early

a

Denver & Salt Lake income

mortgage 3%-4% bonds, due
Jan. 1, 1993 ($8,666,900 at Dec. 31, 1949). Underwriters—
To be determined by competitive bidding. Probable bid¬
ders—Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.;
Kuhn, Loeb & Co.
/
Detroit Edison Co.

Jan. 29 it

was

(4/2)

announced company plans to

850,000 shares of additional
holders
held.

on

the

basis

Price—At

None.

par

Proceeds—For

of

($20

offer about

common stock to

one

share

per

for

share).

construction

each

its stock¬
ten

shares

Underwriter—

program.

Chairman of the Board, stated that

Granite City Steel Co J
26 it was announced that

Jan.

ing

•

Florida Power Corp.
Feb. 13 it was announced common stockholders will vote
on

a

proposal to increase the authorized

com¬

stock

(par $7.50) from 1,600,000 to 2,500,000 shares
and the authorized preferred stock (par $100) from 120,to

250,000 shares. Underwriters for preferred stock
to be determined by competitive bidding. Probable bid¬
ders may include Kidder, Peabody & Co. and Merrill
Lynch, Pierce, Fenner & Beane (jointly); Salomon Bros.
& Hutzler; Harriman Ripley & Co., Inc.; Equitable Secur¬
ities Corp.; Union
Securities Corp.
Probable under¬
writers for common stock. Kidder, Peabody & Co. and
Merrill Lynch, Pierce, Fenner & Beane.
Food

Machinery & Chemical Corp.
Jan. 29, P. L. Davies, President, announced an expansion
program which will involve well in excess of $25,000,000,
to be

financed, in part, b,y the issuance of $25,000,000 of

debentures.

Later it is probable

rights

may

be given to

stockholders to purchase additional common stock, pos¬

sibly by the end of 1952

or

early 1953. Traditional under¬
Co.; Mitchum, Tully & Co.

writers: Kidder, Peabody &

ders:

stock to

common

proposed

public offering of

2-for-l

company

split-up

plans to offer

stockholders follow¬

common

of

497,201

shares

and

change in par value from no par to $12.50 per share to
be voted upon March 13. Traditional underwriter: Mer¬
rill Lynch, Pierce, Fenner &
Beane, New York.

Greenwich

Gas

Co., Greenwich, Conn.
stockholders were to vote on approving issuance

Feb. 7

and sale of 60,000 additional shares of common stock at
$5 per share to common stockholders on a 2.045-for-l
basis and to issue and sell 8,000 additional shares of pre¬

Underwriter—F. L. Putnam & Co., Boston,

Gulf Power Co.

Feb. 6, it was reported that this
company may sell se¬
curities "for new money" this year. In event of preferred
stock issue, probable bidders may be
Co. and

Kidder, Peabody &

White, Weld & Co. (jointly); Equitable Securi¬

ties

Corp.; Union Securities Corp. and Salomon Bros. &
(jointly); Harriman Ripley & Co., Inc. But
definite plans have not as yet been formulated.

Hutzler

Houston Lighting & Power Co.

reported company plans to issue and sell
first mortgage bonds. Underwriters

was

$15,000,000 of
-—To

be

new

determined

by competitive bidding. Probable
Halsey, Stuart & Co. Inc.; Kidder, Peabody &
Co.; Equitable Securities Corp.; Union Securities Corp.
bidders:

and Salomon Bros. & Hutzler

(jointly); Harriman Ripley
Inc.; Smith, Barney & Co. Proceeds—For construc¬

& Co.

tion
as

Offering—May be

program.

indefinitely

company may be able to finance

without

gram

Idaho

recourse

to

outside

deferred

1951 expansion pro¬

borrowing.

Power Co.

Feb. 6,

it was reported that this company will raise $18,500,000 through sale of securities this year. It is believed
that this financing will be through sale of
mortgage
bonds and preferred stock. Bond financing may be pri¬
while preferred stock may be underwritten by
Wegener & Daly Corp., Boise, Idaho. Proceeds would go

toward expansion program, which,
cost nearly $23,000,000 for 1951.

Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.;

it is estimated, will

Illinois Central RR.

Jan. 22 the directors authorized the executive committee
to

plan for the refunding of Illinois Central RR. and
Chicago, St. Louis & New Orleans RR. joint $18,812,000
of first

refunding mortgage bonds due 1963 (including
$14,611,000 of 41/2% series "C" and $4,201,000 of 4% series
"D" bonds).

It.is reported that $20,000,000 of new con¬
Probable under¬

solidated mortgage bonds will be issued.

writer—Kuhn, Loeb & Co., New York.
financing expected.
Illinois Central

Feb.

plans to double the company's ingot capacity to 1,290,000 tons annually and to increase its finishing capacity
from the present 180,000 tons to more than 1,000,000
tons at the company's Portsmouth, Ohio, works.
The
expansion program is estimated to cost about $50,000,000. The method of financing is being determined.
In
January of 1950, $15,000,000 of bonds were placed pri¬
vately.

March 29

no

securities would be" involved.

•

Corp.

Jan. 30 the management disclosed that it had approved

mon.

announced

was

vate,

reported company may later this year re¬
fund its outstanding first mortgage 3%-4% bonds, series
A, due Jan. 1, 1993 ($35,062,000 at Dec. 31, 1949) and
was

1

new

it

Dec. 19 it

stockholders

$35,000,000 of

Corp., Trenton, Mich.
company is being formed to
$100,000,000 fully-integrated steel plant with
a
capacity of 700,000 tons of ingots annually, to be built
at Trenton, Mich. C. S.
Eaton, of Otis & Co., who will be
29

issuance

common stock

sell

tration—Scheduled for April 4.

Mass.

reported company contemplates

Clinton Foods, Inc.
15

Corp. and Equitable Securities Corp.
Proceeds—For construction program. Bids—•
Tentatively expected to be opened on June 5. Regis¬

ferred stock.

Consolidated Natural

Georgia Natural Gas Co., Albany, Ga.
voted to increase the authorized
Aug. 2 filed new application with FPC for authority to
construct a 335-mile pipeline system in Georgia and
(par $1) from 1,500,000 to 2,000,000 shares,
the additional shares to
Florida to cost about $5,100,000, which would be fi¬
provide "substantial funds for
capital additions and working capital," and "to provide
nanced through issuance of first mortgage, pipe-line
tor the
conversion of 100,000 shares of unissued and un¬
bonds and the sale of common stock.
Previous appli¬ 4
reserved 4y^% cumulative convertible preferred stock."1
cation was withdrawn.
No
immediate);financing imminent. Probable Under^Georgia Power Co. (6/5)
writerg: Merrill Lynch, Pierce, Fenner & Beane.
JJan. 8 it was reported company may issue and sell
Columbia Gas System, Inc.
$20,000,000 of new first mortgage bonds. Underwriters—
Dec; 7 If was reported that corporation may issue and
To be determined by competitive bidding. Probable bid¬
Jan.

Securities

(jointly).

additional

(2/21)

Halsey, Stuart & Co. Inc.; Kuhn, Loeb & Co.; Blyth &
Co., Inc.; Union Securities Corp.; The First Boston Corp.

000

Power &

through

office at 44
Pa., on or before
noon JEST) on Feb. 21 for the
purchase from it of $12,728,000 first mortgage bonds, series A, to be dated March
1, 1951 and to mature March 1, 1976. Probable bidders:
Lancaster

Detroit Steel

plans to issue

contemplates

company

nor

determined.

Connecticut Ry. Co.
Bids will be received m

Co.

Toner, President, announced that com¬
$32,000,000 of securities to aid in
financing its construction program, which, it estimated,
pany

the

financing

Halsey, Stuart & Co. Inc.; The
First Boston Corp.;
Glore, Forgan & Co.; Morgan Stanley

East

Union

operate

debentures:

are

& Co.; Lehman
Brothers; Harriman Ripley &
Inc.; Shields & Co. and Salomon Bros. & Hutzler
(jointly); Blyth & Co., Inc. and Kidder, Peabody & Co.
(jointly); The First Boston Corp.; Kuhn, Loeb & Co.;

Co.

Gibraltar Steel

Co.

Neither the nature

bonds

Uxbridge Worsted Corp.
announced that between 200,000 and

was

announced

financing has been

(jointly).

45-

Drexel

Jan.

Edison

additional

Denver & Rio

300,000 shares of common stock will soon be registered with
the SEC. Price—To be supplied by amendment. Under¬
writers
Kidder, Peabody & Co. and Bear, Stearns &
Co. Proceeds—To selling stockholders.
Feb. 13 it

was

Consumers

Atlantic

mon

it

$181,000,000

000,000 in 1951.
••

stock, in event

Stanley & Co.; Goldman,

Sachs & Co. and Union Securities
Corp. (jointly); Mer¬
rill Lynch,
Pierce, Fenner & Beane; Lehman Brothers;
Shields & Co. and R. W.

Arkansas Power &

by competitive bidding. Probable bidders; Halsey, Stuart
& Co. Inc.; Lehman Brothers and
Stone & Webster

common

of

Commonwealth

1

Feb.

Probable

summer.

Louisiana Gas Co.

Arkansas

(753)

RR.

13, it was reported

No immediate

(3/19)

expected to raise $6,800,000 through the sale of equipment trust certificates*
Bids—Tentatively scheduled to be received on March 19*
company

Probable bidders: Halsey, Stuart & Co. Inc.; Harriman
Ripley & Co., Inc. and Lehman Brothers (jointly); Har¬
ris, Hall & Co. (Inc.);. Salomon Bros. & Hutzler; The
First Boston Corp.

Illinois Power Co.

Jan. 29 Illinois Commerce Commission authorized

to construct

com¬

$16,700,000 steam-electric generating
River, near Hennepin, 111. Initial
installation is scheduled for completion in 1953. Probable
underwriters for equity financing:
The First Boston
Corp.; Merrill Lynch, Pierce, Fenner & Beane.
pany

station

•

on

a

the Illinois

Jersey Central Power & Light Co.

Feb. 13 company asked SEC permission to issue and sell

40,000 shares of cumulative preferred stock

(par $100).

Underwriters—To be determined by competitive bidding.
Probable bidders include Glore, Forgan & Co.; Kidder,

Peabody & Co.; Merrill Lynch, Pierce, Fenner & Beane
and White, Weld & Co. (jointly); The First Boston Corp.;
Salomon Bro.
tion.

scheduled

& Hutzler.

registration

Early
for

Proceeds—For

expected.

new

construc¬

Bids—Tentatively

March.

•

Jersey Central Power & Light Co.
Feb. 13 company requested SEC authorization to issue
sell

and

$1,500,000

first mortgage

bonds due in, 1981.
competitive bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; White,
Weld & Co. and Shields & Co. (jointly); Equitable Se¬
curities Corp.; The First Boston Corp.;
Otis & Co.;
Salomon Bros. & Hutzler; Harriman Ripley & Co., Inc.;

Underwriters—To be determined by

Kidder, Peabody & Co.; Glore, Forgan & Co. Proceeds
expansion program. Bids—Tentatively scheduled

—For

to be received

in March.
,

•

^

Kansas City Power & Light Co.

Feb. 7, Harry B.

Munsell, President, announced company

expects to raise $15,000,000 of new money
sale of

000,000
stock

new

preferred

and

through the

securities, including from $5,000,000 to $8,-

bonds.

stock, and the remainder common
Probable bidders for preferred stock:

Continued

on page

46

dent, stated that about

45

Inc.

Kimberly-Clark Corp.
14,

it was announced directors

proposed sale of 200,000

have approved a

shares of additional common

stock, registration of which is expected
Underwriter—Blyth & Co., Inc., New York.

this week.

Jan. 30,

R. W. Otto,

President, stated it appears

likely

some

company

quirements. During the current fiscal, year, he said,
$10,000,000 may be spent for new construction, of

about

$4,000,000 had been spent up to Dec.
also stated that the company is giving
serious consideration to early refinancing of its out¬
standing $19,000,000 3y2% bonds due Feb. 1, 1965, and
$6,500,000 3V2.% bonds due Dec. 1, 1965, through the is¬
suance of possibly $28,000,000 of new bonds. Probable
bidders: Halsey, Stuart & Co. Inc.; Goldman, Sachs &
Co.; White, Weld & Co.; Lehman Brothers and Merrill
Lynch, Pierce, Fenner & Beane (jointly).
which more than

31, 1950. It was

President, announced that com¬
pany will raise $5,000,000 through a common stock offer¬
ing within the next 120 days to be first made to common
stockholders. Underwriters—Probably Straus & Blosser;
Estabrook & Co., and Dallas Rupe & Son.
Proceeds—
Jan.

16, E. B. Germany,

increase
to assist
be first
offered to stockholders. How much stock will be issued
has not yet been determined. Probable bidders may in¬
clude W. C. Langley & Co.; Kidder, Peabody & Co.;
Smith, Barney & Co.

Consolidated Gas Co.

planning an
to increase
to the Detroit (Mich.) area by
day next winter. The present line

deliveries
150,000,000 cubic feet a
has a daily capacity of 325,000,000
gas

a

natural

of

tion

Potomac Edison Co.

Dec.

construction
pipeline for the transporta¬

114-mile
which, it is estimated, will cost

gas,

construction program.

and Union Securities

,

-/'/

.

it

able

bidders

was

Public

,

be

new

<

preferred stock with a lower

<

.

y

«

reported issue of $15,000,000

a

,

cubic feet a day.

Michigan-Wisconsin Pipe Line

Niagara Mohawk Power Corp.
Oct. 24 the company estimated that,

Co.

received SEC authority to borrow not
more than $20,000,000 from banks.
A permanent financ¬
ing program provides for the elimination of these bank
loans prior to their maturity, July 1, 1951, and such pro¬
gram will include the issuance and sale of $12,000,000
additional bonds and $3,000,000 of additional common
stock (latter to American Natural Gas Co., the parent).
Previous debt financing was placed privately. If com¬
petitive probable bidders may include The First Boston
Corp.; Harriman Ripley & Co., Inc.; Glore, Forgan & Co.
July 25 company

bonds

filed with FPC

through 1951, it will

equity financing in connection with its 1951 construction
which is expected to cost $52,328,000. Probable bidders
for new bonds: Halsey, Stuart & Co. Inc.; Morgan Stan¬
ley & Co.; Kuhn, Loeb & Co.': The First Boston Corp.
Application was filed on Feb. 13 with SEC for authority

to

a second amended appli¬
proposed natural gas system

North

Carolina.

It is

Inc.
Jan. 23 it was reported that this company is expected
to sell up to 600,000 shares of additional common stock
(no par) in the near future. Underwriters—To be deter¬
mined by competitive bidding. Probable bidders—Union
Securities Corp. and Equitable Securities Corp. (jointly);
Blyth & Co. Inc.; Lehman Brothers; Kidder, Peabody &
Co. and Merrill Lynch, Pierce, Fenner & Beane (jointly);
The First Boston Corp. Proceeds — To finance part of
South

Utilities,

1951 construction program.

proximately $4,500,000, which would be financed by the
issuance of first mortgage bonds and junior securities.
•

Public Service Co.

it

9

stated

was

of Oklahoma

that company

(4/9)

plans issuance and

sale of $10,000,000 of

Niagara Mohawk Power Corp.
26, it was announced company

first mortgage bonds. Underwriters
by competitive bidding. Probable
bidders: Halsey, Stuart & Co. Inc.; Glore, Forgan & Co.;
White, Weld & Co. and Shields & Co. (jointly); The First
Boston Corp.; Harriman Ripley & Co., Inc. Proceeds—
For new construction.
Registration — Expected about
March 15. Bids—Tentatively expected to be received, up
to April 9.'
.
"

—To

may sell late this
$15,000,000 of additional com¬
of its $150,000,000 construction
program scheduled for 1951, 1952 and 1953. Probable
bidders: Merrill Lynch, Pierce, Fenner & Beane; Kidder,
Peabody & Co. and White Weld & Co. (jointly); Morgan

Jan.

year or early 1952 about
mon stock to finance part

Stanley & Co.

determined

be

„

„

Reliance

Oklahoma Gas & Electric

Co.

Dec. 20 D. S.

Kennedy, President, said company is con¬
sidering refunding outstanding $6,500,000
cumu¬
lative preferred stock (par $100) with an equal amount
of preferred stock with a lower dividend rate and may. >

(par. $10) provided mar-"
action, to finance construe-,
tion program. Probable underwriters: Lehman Brothers;,

issue additional

common

stock

ket conditions warrant such

Electric & Engineering Co.
Jan. 18 stockholders approved a proposal to increase
authorized common stock from 350,000 shares (209,221
shares

outstanding) to 1,000,000 shares and to effect a
split-up. The stockholders would then have
preemptive rights in 531,558 of the unissued new shares
while 50,000 shares would be reserved for future sale to
employees and for other corporate purposes. Traditional
2-for-l stock

underwriter: Hayden, Miller & Co.

No public financing

planned at present.

•

Rhinelander Paper Co., Rhinelander, Wis.
Jan. 22 it was reported company plans issuance

Pacific Gas

& Electric Co.

(3/19)

Feb. 8 directors authorized issuance and sale of 1,419,562
additional shares of common stock (par $25) to common
stockholders of record
share for

one

each

on

seven

March 13, 1951 on the basis of
shares held; rights to expire

April 14, 1951. The subscription period is exoected to
open March 19. Price—To be supplied later. Underwriter
—Blyth & Co., Inc., New York. Proceeds—To be applied
on

toward

the

cost

of

new

construction, estimated to cost

$130,000,000 in 1951.

(7/17)
reported that this company contemplates
and sale of $4,000,000 of preferred stock

Mississippi Power Co.
Feb. 6, it was

the issuance

(par $100). Underwriters—To be determined by competi¬
tive bidding. Probable bidders: W. C. Langley & Co.,

Glore, Forgan & Co. and Sterne, Agee & Leach (jointly);
Blyth & Co., Inc.; The First Boston Corp.; Kidder, Pea¬
body & Co. and White, Weld & Co. (jointly); Lehman
Brothers; Union Securities Corp. and Equitable Securi¬
ties Corp. (jointly); Merrill Lynch, Pierce, Fenner &
Beane.
Proceeds—For construction program.
Bids—
Tentatively expected to be received on
tration—Scheduled for June 15.

July 17. Regis¬

Monongahela Power Co. (4/24) .
1 it was announced company plans issuance and
sale of $10,000,000 of first mortgage bonds. Underwriters
—To be determined by competitive bidding.
Probable
bidders: Halsey, Stuart & Co. Inc.; Equitable Securities
Dec.

Corp.; W, C. Langley

& Co. and The First Boston Corp.

(jointly); Union Securities Corp.

and Salomon Bros. &

(jointly); Lehman Brothers; Kidder, Peabody &
Co. and White, Weld & Co. (jointly); Merrill Lynch,
Pierce, Fenner & Beane; Glore, Forgan & Co.; Harriman
Ripley & Co., Inc. Proceeds—For expansion program.
Offering—Tentatively expected on April 24, with SEC

Hutzler

registration on March 23.
Montana-Dakota Utilities Co.
Oct. 11

company

asked FPC for authority to issue $2,-

800,000 of 2V2% promissory notes to banks to provide
funds for its expansion program. These notes, together

Light Co.

struct

the

Inc. and Carl M.
Loeb, Rhoades & Co. (jointly);
Kidder, Peabody & Co.; W. C. Langley & Co. and First
Boston Corp. (jointly). ■ •

Pennsylvania Power Co. (3/20)
Jan. 31 company notified SEC it proposes to issue and
sell 40,000 shares of preferred stock
(par $100) to public
(in addition to 40,000 shares of common stock to Ohio
Edison

Co., parent, at

be

determined

bidders: Kidder,

$30

share). Underwriter
by competitive bidding. Probable
par,

per

Peabody & Co. and White, Weld & Co.

(jointly); Glore, Forgan & Co. and W. C. Langley &
(jointly): First Boston Corp.; and Blyth & Co.,
Inc. (jointly); Lehman Brothers;
Smith, Barney & Co.;
Harriman Ripley & Co., Inc.; Merrill
Lynch, Pierce,'
Co.

Fenner & Beane.

Proceeds—For construction program.
Registration—Expected about Feb. 16.
Bids—To be:

opened around March 20.

Pennsylvania Power & Light Co.
26

shares

it

was

announced

that

an
offering of 40,000
expected to be announced
Underwriters—To be determined by competi¬

of preferred

shortly.
tive bidding.
Drexel

&

stock

is

Probable bidders: The First Boston Corp
Co. (jointly); Blyth &
Co., Inc.; White;

with

to be refunded by

To

Lynch, Pierce, Fenner & Beane. Stockholders on
Nov. 27 will vote on increasing authorized preferred
stock from 100,000 to 150,000 shares and common stock

Pitney-Bowes, Inc.
r.
Feb. 5 directors voted to submit to
stockholders on April
4 a plan to increase authorized
preferred stock by 60 000
shares in order to have such shares
available in the

Merrill




&

Co.; Harriman Ripley & Co., Inc.
Proceeds—
finance, in part, the company's expansion program;

and

&

Co., Chicago.
working capital.

and

19

it

Proceeds—For new

Francisco Ry.

in event company issues
$70,000,000 of refundnig mortgage bonds, prob¬
bidders may include Halsey, Stuart & Co. Inc.,
Blyth & Co., Inc.; Kuhn, Loeb & Co.

reported that

was

and sells

Salem Gas
Jan.

26

Light Co.

company

and sell to
of

applied to SEC for authority to issue
stockholders 30,236

additional shares
stockholders on
held.
England Electric System (parent), owner of 42,138
common

capital stock

(par $10)

the basis of two
New

shares

(92.9%)

new

of

by

the

minority

Proceeds—To

to common

shares for each three shares

45,353 outstanding shares, will
shares, plus any not subscribed for

the

subscribe for 28,092

stockholders.

bank

repay

Price—$15

loans

per

advances

and

share.
from

parent, and the remainder for expansion program.

Schering Corp.
Feb. 2 it

was

reported that the company's entire com¬

stock'issue

(440,000 shares) was expected to.be
registered with the SEC in the near future and offered

mon

for sale

probably in March to the highest bidder by the
Office of Alien Property. Probable bidders: A. G. Beckei
& Co. (Inc.), Union Securities
Corp. and Ladenburg,
Thalmann & Co.
&

(jointly); Merrill Lynch, Pierce, Fenner
Beane; Kidder, Peabody & Co.; F. Eberstadt & Co.;
& Co.; new company to be formed by United

Allen

States & International Securities

Corp.; Dillon,
Co.; F. S. Moseley & Co.; Riter & Co.
-

and

Becker

St. Louis-San

Jan.

and

Co.

Jan.

G.

construction

a

Halsey, Stuart & Co. Inc.; Union Securities Corp.; Leh¬
man
Brothers; Blyth & Co., Inc.; White, Weld & Co.
and Harris, Hall & Co. (Inc.)
(jointly); Blair, Rollins &

—To

—A.

con¬

$33,000,000 power plant on the Lewis River in
State of Washington. Probable bidders for bonds:

^

sale, without preemptive rights by stockholders, of abput
100,000 shares of common stock (par $5).
Underwriter

able

Pacific Power &

Jan. 29 company applied to FPC for authority to

Weld

$3,000,000 of notes authorized by FPC last May, are
permanent financing before April 1,
1951. Traditional underwriters are Blyth & Co., Inc. and

now

proposed to build seven lateral lines, aggregating about
168 miles in length.
Estimated total capital cost is ap¬

Feb.

$35,000,000 from banks.

communities in

34

serve

ar

Smith, Barney & Co.; Harriman Ripley & Co. Inc.
Middle

are:

Public Service Co. of, North Carolina, Inc.

•

cation in connection with

require not more than $35,000,000 of additional debtor

borrow

Probable bid¬

new

Halsey, Stuart & Co. Inc.; Blyth & Co., Inc. and Smith!
Barney & Co. (jointly); The First Boston Corp.; Lehman
Brothers; Kidder, Peabody & Co.; Harris, Hall & to.
(Inc.); Glore, Forgan & Co. and W. C. Langley & Co.
(jointly).
-

& Co., Inc.
The 6% •
at $110 per share, plus accrued::

callable

is

to raise additional funds for construction
in the second quarter of 1951. The amount

ders for

dividend rate may include Blyth

preferred

of Colorado;

needed is estimated at about $7,000,000."

Chicago & St. Louis RR.

a

Co.

necessary

purposes

.

reported that in event company

for

Service

Nov. 1, J. E. Loiseau, President, announced that "it will

refunds
its outstanding $36,057,700 6% . preferred
stock (par
$100), with dividend arrearages of $45 per share, prob25

(4/3)

announced that

Hutzler; Harriman Ripley .& Co., Inc.'
Corp. (jointly); Lehman BrothersEquitable Securities Corp.; Drexel & Co. Proceeds—For
expansion program. Offering—Expected on April 3 with
SEC registration tentatively scheduled for March 2. :

estimated that $32,000,000

New York,

was

Salomon Bros. &

of new financing
will be required prior to Dec. 31, 1952 (including^the
$12,000,000 of bonds filed with SEC). Between 70,000 to
80,000 shares of preferred stock may be initially offered.
Probable bidders: Harriman Ripley & Co. Inc.; Lehman
Brothers; Kidder, Peabody & Co.; First Boston Corp.;
Merrill Lynch, Pierce, Fenner & Beane; W; C. Langley
& Co. Proceeds to be used to repay bank loans and for
was

it

1

company plans to issue
$10,000,000 of first mortgage bonds. Underwriters—To
be determined by competitive bidding. Probable
biddersHalsey, Stuart & Co. Inc.; W. C. Langley & Co: and The
First Boston Corp. (jointly); Kidder, Peabody & Co.
and
Alex Brown & .Sons (jointly); Glore, Forgan &
Co.-

-

England Power Co.

New

Co. (jointly); First Boston Corp!; Harvi
Ripley Co., Inc.
Shields &

and
man

$2,331,350*
Jan. 24 it

was handled
Probable bidders for bonds may
Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutzler

be

Co.

Gas Pipe Line

The latest stock financing

stock.

common

by Blyth & Co., Inc.

asked FPC to authorize

company

operation of

and

to

it was disclosed that the company is
$8,000,000 pipe line construction program
natural

,

.

Feb. 9 company

Long Island Lighting Co.
Jan. 31, Edward F. Barrett, President, said an
in the number of common shares is in prospect
in financing construction. These shares will

Michigan

carry

program

dividends.

expansion program.

Jan. 3,

15

Jan.

Steel Co.

Lone Star

basis
stock,

for 1951. Merrill Lynch,
Pierce, Fenner & Beane, New York, was the principal
underwriter of a common stock offering in April, 4949.
Stockholders on Jan. 30 voted the issuance of 900,000
shares of $7.25 par value common stock in exchange tor
300,000 shares of no par value common stock.
construction

its

out

Nov.

will sell additional mortgage bonds
time this year to finance its 1951 construction re¬

the

that

the present common stock on a three-for-one;
help facilitate the sale of additional common
in the near future so as to enable tne company to
up

to

Electric Co.

27, Thomas Delzell, Chairman, said that the $20.
000,000 Deschutes River project, temporarily being £
nanced by short-term borrowings and bank
loans, will
be refinanced later by the sale of long-term bonds
and
Jan.

of company to split

approved application

FPC

18

Jan.

General

Portland

Mountain States Power Co.

Nevada Natural

Laclede Gas Co.

event that, future conditions require new financi
Latest preferred stock financing was placed privaff
through The First Boston Corp.
ev

,

months.

the next six

and W. C. Langley & Co. (jointly);
Smith, Barney & Co.; The First Boston Corp.; White,
Weld & Co., Shields & Co. and Central Republic Co.
(jointly); Harriman Ripley & Co., Inc.; Salomon Bros. &
Hutzler and Merrill Lynch, Pierce, Fenner & Beane
(jointly). Probable bidders for common stock: Lehman
Brothers; Glore, Forgan & Co.; Harriman Ripley & Co.,
Glore, Forgan & Co.

Feb.

R. M. Heskett, Presi$10,000,000 will be raised within

1,500,000 to 2,500,000 shares.

from

For

Thursday, February 15, 195^

.

.

.

(754)

Continued from page

•

and Financial Chronicle

The Commercial

1

46

...

Sharon Steel Corp.
was announced that

Jan. 29 it

as

a

Read «

preliminary to

fj"

corporation's $49,000,001/
expansion program, stockholders will be asked to vote
at the. annual meeting March 22 to increase the debt
nancing

ilmit

some

of

the

phases

company

of

to

the

$30,000,000

to increase
1,000,000 shares.

and

authorized capital stock to 2,500,000 from

At present, the
company has 925,863 shares
The company's expansion

outstanding

plan, recently announced, wi»
sharply increase ingot capacity, pig iron and coke output
and finishing facilities. The additions and
improvements
are

to be

completed

over

the next five years.

•
ffph

The Commercial and Financial Chronicle

. . .

$42,300,000 construction program, which will include
building of 580 miles of pipe line to supply natural
in its

Inc.

"

;

■

::

1

•

will be

proceeds

The

determined.

been

used

treasury

for

(4/3)

it

•

Union Gas Co.

Trion,

issue and

Proceeds

•

stock filed with SEC on Jan. 8.—see preceding

common

But

it

now

was

and

this squabble

that

trifle

a

such

premature
who

over

.for

hand

a

if

means,

in

the

nothing

deal

viate

else,

that

the

The

;

Co.'s

Commonwealth

$49,000,000

of

the

early part of January "pulled the ,2%%

.

'

/ ■

'

be

in

will

one

amendment

an

Broadston has
of

no

'

Proceeds

putting their cash into new secu¬
rities, this offering had been slow
from the start.

to
,

fixed

and

price of

101.335

for

buyers

adament

in

sparse

ing

who

their

yields that have been

out

corporate

of

competitive

rities.

to

■

.

debt

bring two new

offerings

to mar¬

is

Largest

secu¬

$12,000,000 of 30-year first mort¬

■

bonds

gage

The

on

'Consolidated

this

time, and
bankers evidently decided to give

i York's

sand

the contest.
had

around

100

after it

was

this

level

buyers

Keeping
Uood

around

was

too

brings

week

Co.

Edison

up

of

New

bonds

to

yield

go

a

.-The

new

to

new

new

Joins

make

ST. CLOUD,

the

House announced

back

Reserve

up the

had

Treasury's

that

agreed

the

to




SYLVAN

Directors

has

construction

declared

a

quar¬

cents per share payable
14,
1951 to stockholders of record
close of business on February 21, 1951.

March

the

D.

February 7,

H.

ALEXANDER,

Secretary

1951

COLE,

Chairman of

Board.

the

CARLISLE

New

CORPORATION
The

Board

the

on

stock

of the

of

10

de¬

Joins Ellis,

outstanding

5,

record

February

1951

to

stockholders of
19, 1951.

FURBER MARSHALL, President

Holyoke

is now affiliated with
Ellis,
Holyoke
&
Co.,
Stuart
Building.

American

Delmhorst

bonds

($1.00)

dollar

share on the Capital Stock of
the Company has been declared
this day, payable on March 10,
1951, to stockholders of record at
the close of business on February
per

will remain open.

,

Radiator
ilmljortt

Sanitary

Treasurer

January 26, 1951

PillsLryk

CORPORATION

DIVIDEND

COMMON DIVIDEND

York

City, and in June would
have completed 60 years of serv¬
the firm.

with

an d ar d

PREFERRED

illness.

ice

Dividend

one

passed

at the age of 73 after a brief
Mr. Delmhorst was senior

away

dividend of

A

Robert Fisher

A. E. Delmhorst
E.

Consecutive

9, 1951. The stock transfer books

Sr.

Arthur

194th

capital

(Special to The Financial Chronicle)

man,

THE TEXAS COMPANY

per

Corporation, payable

March

Minn.—Hubert W.
Merritt &

lias
cents

Directors

of

dividend

a

share

with King

A

quarterly dividend of $1.75 per share
the Preferred Stock has been

on

payable March

declared,

1951 to stockholders

1,

of record at the close of business on
ruary

the

Feb¬

19, 1951.
dividend

A

Common

of

25

has

Stock

payable March 24,

cents per

been

share on
declared,

1951 to stockholders

of record at the close of business on Feb¬
ruary

DETROIT,

Wm.

JOHN E. KING
T reasurer

Chronicle)

Mich. —Leonard

with

is

19, 1951.

Staff

Joins Roney
(Special to The Financial

Buhl

Co.,

Building,

C.

Roney

GREATEST NAME

THE

&

members

of

C.

WOOLENS"

and Detroit Stock

New York

nr ■■■■■■■!■■■■

Manufacturers of

to

Tru

WALL &

SS

FLOOR

ZZ

TILE

DIVIDEND NOTICE

funds.

SI

ATDirectors of AmericanBoard of
the meeting of the Woo'en
Company, held today, the following
dividends
;

AMERICAN

World
out

Tack

New

too

well

its

with

The

bank

plans to

seek

where around that amount

dure.

This

for

time

20

to

the

25

New York 6, N. Y.

CI Broadway,

last

someon

this

proce-

bonds

will

and

the

operation will not be done in

one

fell swoop.

years

Rather the plan is to

calculate needs for several months
ahead

finance

and

to

the

extent

February 13, 1951

marekt

will
at

a

avoid

burdening

the

given time and ob¬

■■

share

record

29,
at

1951,

stockholders

to

of

the close of business March

tors
mm

■■

extra

dividend

(25c)

cents

per

clared,

payable

of

share has been de¬
March 29, 1951, to

stockholders of record at the close of
business Mareh

were

declared:

dividend of

regular quarterly

A

$1.00 jier share on the $4 Cumula¬
Convertible Prior ' Preference
Stock payable March 15, 1951 to
stockholders of record February 28,

The transfer hooks of the company
not

on

■■

Common

A

$1.75

Stock

tive

Dividend

quarterly dividend of
a

share on the Com¬

15, 1951 to stockholders of record
February 28,. 1951,
Transfer books will be closed bn»V
February
28,
1951 on all three.;:
classes o'f stock outstanding and will

Stock, payable March 9,

v

of record

March 1, 1951.

■■

■■

G. W. THORP,

22
25

JR.

Treasurer

February 9. 1951.

regular quarterly dividend of
per share on the 7% Cumula¬
Preferred Stock payable April

16, 1951 to stockholders of record
April 2, 1951,
A dividend of $1.00 per share on
the Common Stock, payable March

de¬

1951, to stockholders
■■

■■

14, 1951.

a

today

12l/2 cents
mon

twenty-five

has

clared

■■

14, 1951.
An

COMPANY, INC.
The Board of Direc¬

fifty (50c) cents per
has- been
declared, payable

A dividend of

will

required to get such funds.
This

ENCAUSTIC TILING

MIAMI COPPER COMPANY

Bank, which didn't

re-open

March 28, 1951.

^

maPed by
Company of

Dividend checks will be
■ ■

■ ■

the
New

Guaranty

Trust

York.
p

■■

close.

&

C0NNETT>
Treasurer.

SAM

easy money

Policy,

at

Co,, Inc., 1616 St. Germain Street.

March

run

Treasury issues ap¬
peared
jto have been "ironed out"
a
week or ten
days ago when the
white

is

Bradford

Battle

occasion, but by different
in

be

rience.

...

for

Federal

will

one

offering of $100,000,000 of serials,
evidently is profiting by its expe¬

of course," are

uneasiness

on

20 cents
stock, payable

books will not be closed,

the

King Merritt

ap¬

*

Unrelenting

this

pipeline

Taking

The

exceptions.

market

common

of

terly dividend of sixty

of

tive

groping

equities,

the

on

Exchanges. V..-.

at such levels.

exempts alone in the debt section,
the

declared a

Singer Manufacturing
Company

Board

IN

20-year

vide

in a fog of
indecision arising from conflicting
influences of the moment. Taxand

The

February 28th, 1951, to stockholders of
record
February 20th,
1951.
Transfer

clared

redeem short-term notes and pro¬

some

stubborn

issue market still

be

38

heart attack

a

Gas Transmission Co.'s first mort-

,

pears

share

a

Stock

Robinson,

the

■; gage

Clouds Don't Lift

J

&

previous will see bid¬
ding for $35,000,000 of Tennessee

in

reported,

bit

on

The day

to

more

indicated that

Bids

opened Tuesday, Feb. 27.

latter's: ideas.
was

NO.

dividend

quarterly

The

"

City, died of
64.

off

pay

At

own.

of

Cincinnati

$60,000,000 of 30-year first

refunding

tion.

offered

its

2.87%,

the

were

letting

quoted

100 M
on

indicated

with

though it

issue

to

demand

holders
about

bid

thrown

the

was

the

members

and

the age of

at

bank loans incurred for construc¬

Reports

regular

Co., 326

partner in Whitehouse & Co., New

Monday.

following

two large offerings, biggest being

"break" in buyer resistance went

up

and

SHOPS

INC.

DELAWARE,

The Board of Directors has

LINCOLN, Neb.—Forest E. Dill-

Bit

a

refunding 25-year bonds,
up for sale on Tuesday.
New
England Power Co. will market

Accordingly the bonds have been
laggard and patient waiting for a
reward

Street,

Vanderhoef

first and

com¬

bidding

especially for public utility

without

of

Southern Cali¬
fornia Edison Co.'s $35,000,000 of
ket.

been

have

opposition

DIVIDEND NOTICES

Charles E. Robinson

being

balance

will

Next week

not sufficient to attract

was

Proceeds—To retire bank loans.

Charles E. Robinson, partner in

■v

general corporate funds.

Picking Up

Quite evidently this prospective

{

return

applied

$45,800,000

with ' the

added to

yield of 2.825%.

potential

be

a

OF

(Special to The Financial Chronicle)

indicated

an

Halsey, Stuart & Co. Inc.; Lehman Brothers; Merrill
Lynch, Pierce, Fenner & Beane; Kidder, Peabody & Co.;
The First Boston Corp.; Harriman Ripley & Co. Inc.

not

to

outstanding promissory notes. The
current long-term indebt¬

edness,

reoffering

a

of

County Electric Co.
early registration

stated

was

firm's

The sponsoring group paid the
issuer a price of 100.59 for a 2% %
coupon

will

here

retirement

it

DIVIDEND NOTICES

un¬

funds

added to the

been

Exchanges.''"

ment in advance of the sale.

haste about

paying

on

Westheimer

York

'Caught in the period of uncer¬
ithe company's registration state¬
tainty which found the big insti¬

tutional investors in

v

CINCINNATI, Ohio—Andrew E.

York

set forth

for

need

22

is expected of
$12,000,000 first mortgage bonds. Underwriters—May be
determined by competitive bidding.
Probable bidders:

Co., Pittsburgh, Pa.
expanded defense

(Special to The Financial Chronicle)

And

debentures something of a

Offering terms for this

r

announced

all-

go

deal.

treat.

| string" this week and turned the
debentures lose.

dealers

and

negotiated

a

that makes Borden Co.'s projected
offering of $70,000,000 of 30-year

50-year

new

bankers
for

out

Edison

-

[debentures, due 2001, since
I

that

has been

which

syndicate

Electric & Power Co.

was

Worcester
Jan.

DIVIDEND

Walnut

sidestepping the fact

it

1

NATIONAL SHIRT

New

[lugging

&

Westheimer & Co. Add

staff

no

and

immediately required.

the

Kind Bankers Like:

Louisiana

struction program.

handle

to

interest

necessary

which

spell.

There is

Graham

used

•'

calling

now

uncertainty will be drawn out for
a

be

■

shall set basic money rates is still
far
from
settled.
The
Senate

Banking Committee is

in

that (in addition to proposed
100,000 shares of preferred stock (par
$100) filed with SEC on Feb. 1) further financing in
1951 is anticipated in an amount which may aggregate

United Artists Corp.

that

appears

cheering

fields

issue and sale of

stock

common

Feb. 8, Paul V. McNutt, Chairman, announced that
refinancing of the corporation has been arranged.

columns).

off-shore

$25,000,000. The proceeds will go toward company's con¬

would

business.

(in addition to the

bonds

and

Coast

Virginia
Feb.

Inc.

stockholders increased authorized

preliminary to the
financing handled by

approximately $4,000,000 of first mortgage
150,799 additional shares of

and

$100)

Gulf

a

May

on

company

Com¬
pany is now in process of completing negotiations for
its major financing requirements.

$2) to 2,000,000 shares, in a step
sale of additional stock.
Previous

approximately 27,000 shares of preferred" stock (par

sell

mature

"common

Valley Gas Pipe Line Co., Inc., Houston, Tex.
sought FPC authorization to construct
$144,500,000 pipeline project to carry natural gas from

from 150,000 shares (par

announced company plans to

was

to be used to retire

are

which

a

Texas to markets in Indiana, Ohio and Michigan.

tration—Expected about Feb. 15.
Feb. 8

18

notes

14

the

Gas

1, 1951.
Probable underwriters: White, Weld & Co. and Stone &
Webster Securities Corp.
Expected in March;, Regis¬

with SEC on March 2.

Jan.

of

amount

as

June 27 company
a

Pipe Line Corp. (3/7)
Feb. 2 it was reported directors on Feb. 14 would con¬
sider a plan to sell $26,500,000 of preferred stock
(par
like

operate

Pipe Line Co., Dallas, Tex.
applied to FPC for authority to build
pipeline from Aztec, N. Mex. to the Salt Lake
City, Utah, area, at an estimated cost of $22,000,000.

Ry.

$50), the proceeds of which

to

financing

392-mile

a

stated that

Transcontinental

markets

initial

Utah

Dec.

sells

reported that the company plans to issue
1,000,000 shares of.common stock (par
$5). Underwriters—*To be determined by competitive
bidding. Probable bidders: Morgan Stanley & Co., Kid¬
der, Peabody & Co. and Merrill Lynch, Pierce, Fenner
& Beane (jointly); Union Securities Corp. and Equitable
Securities Corp. (jointly); Blyth & Co., Inc.; Lehman
Brothers; Harrimon Ripley & Co., Inc. Proceeds—For
construction program. Bids—Expected to be opened on
April 3. Registration Statement—Scheduled to be filed

Southern

Pacific

was

midwest
The

has been arranged for
privately, with no public offering expected for at least
two years. E. Holley Poe and Paul
Ryan, of 70 Pine St.,
New York, N. Y., are the principal officers of the cor¬
poration.

or

&

it

(Del.)

was announced

other

carrier."

in event company issues and
$36,000,000 of refunding mortgage bonds, probable
bidders may include Halsey, Stuart & Co.
Inc.; Blyth &
Co., Inc.; Kuhn, Loeb & Co.

; :/

additional

)

cash

Texas

6 it was

Feb

an

and

temporary bank loans.
Traditional
underwriter is Dillon, Read & Co. Inc., New York.
Jan. 24

Co.

gas

The balance of the funds needed will be obtained from

expansion program.
Southern

the

own

$30,000,000 bonds (which may be placed pri¬
vately with insurance firms) and about $10,000,000 of
preferred stock (depending upon market conditions).

following the proposed
is intended to raise an
additional $58,600,000 through the sale of securities. The
tvne of securities involved and time of offering have not
it was announced that
hond sale (filed with SEC), it
29

Pipe Line Co.

47

that this company had been
formed to build, own and operate a petroleum product!
pipeline from the Texas Gulf Coast to St. Louis, Chicago

around

California Edison Co.

Southern
Tan

States

Sept. 25, it

a

mid-Western service area and in
Appalachian
markets.
The program would increase the
capacity of
the Texas-to-Ohio pipe line
system to over 900,000,000
cubic feet per day. Tentative plans include the
sale of

honds' Underwriters—To be determined by competitive
bidding- Probable bidders may include Halsey, Stuart
& Co.

United

Jan. 3 company asked FPC
permission for approval of

its outstanding $4,000,000 of 4V8% bonds and
of short-term bank loans with a new issue of

333 ooo

(755)

Texas Gas Transmission Corp.

South Jersey Gas Co.
7 it was reported that this company, is planning to

refinance

L

Number 4986

173

Volume

A.

LEWISOHN,
President.

February 8, 1951.

Commercial and Financial

The
48

Chronicle

Thursday, February 15^

.

.

.

(756)

this

of

BUSINESS BUZZ

A y* gJ
JljL I l\A/

Behind-the-Scene Interpretations
from the Nation's

Capital

-

m/ ^\||

3

V

r

6

H

2.

f
7

/t

/I

/t

VI

one

eral

days

21

/f '6 />

t!

t)

/(

only

av xr u

/<t

JL "

drib

I
1

1

round—the report of
ago

influence

on

RFC

in

fireJ
sev I

and!

favoritism

I

operations.

I

*

>•

1* it

begin

on page

Fulbright s modus operandi is
thai
he is toting, so to
speak, an auto I
matic, from which he has

1937

/AAV

will

-thu+,otheVWay of describinl

tr

Washington...

evidence

bling out, and go

jgJ

There is reported in

quarters to be

D.

WASHINGTON,
was

billed

C.—What

Secretary Snyder's

as

is in reality in large

tax program

part
the
tax program
of the
Council of Economic Advisers.

Congress will not take this pro¬
gram, chapter and verse.
It
is
unlikely to boost excises to 20%
©n cars and 25% on durables.
It
will

boost

but

not

quite

doubted

that

Con¬

them,

that much.
It

be

may

gress will go to 70% as the maxi¬
mum
combined
assessment
of

income from excess
profits and surtax rates—but will
be more inclined to put it at 65%.
The 55% corporation rate, how¬
corporation

looks likely, not because
key leaders want it, but because
the alternatives are so politically

ever,

horrible.

gains

ested in boosting the capital

tax, but

go

may

for the extension

©f the holding period to one year.

Overall, Congress will take less
than
4
points from the lower
und

middle

make
new

income

earners,

the

is

There

the

of

matter

sponsibility

the

on

nizes that the

Hill

recog¬

January figures of

and even if
materials falls

of

For

sound

the

be

course

or

how

to

matter

thing, it is only
before

time

of

the

*:s

which

possibility
ago

first

appeared

more

than

and

a

much

how

had

the

to
a

be

a

month

has now, in the light of the
several weeks of Congres¬

replacements, and military man¬
power for such other areas as the
U. S. undertakes to provide pro¬
tection.

•••

sional

operations, become a cer¬
tainty. This is that in view of the
intimate relationship to one an¬
other
of
all
the
major issues

intimate

relation¬

ship between taxes and

economy.

pending before Congress, a solu¬

terms

.firm

a

the Board
Market Confmittee

operations.

Ordinarily the
right—all right I
So she's some cheesecake !I still say it's time you changed your calendar!"

"All

Chairman,

Chairman

is sup¬

(This column is intended to

re¬

flect the "behind the scene" inter-

In any case, anything above a
all net savings of $2 billion (forget-

billions, net, hasn't got a prayer.
Close

beautiful

the

how to

that

note

observers

about ting Mr. Truman's pro forma decbillions, the laration for $1 billion of new "Fair

suggestions
several

save

in

approach has been to cut out Deal" expenditures) waits for the
public works and cut down or significance of these new taxes to
suspend
established
"welfare" "sink in." Congress can help to

pretation from the nation's Capital
and may or may not coincide with
the "Chronicle's" own views.),

basic

There

As

of

of

is

the

an

present,

more

than

economy

in

couple

of

a

Mr.

it "sink

let

programs.

have

could

Truman

in"

public

to

sundry

got exactly awfulness

servatives, and have
nowhere.

That

is

because

thereby

Con¬

the

of

build

new

an

taxes,

back¬

economy

boner when he

after another of these spend-

„

ing schemes before they were en+
acted, finds himself in a differ- ^
ent
spot once the green check ??
beneficiaries

is

nothing

are

letters

ing
-

.

frightening to a
than
a
thousand

a

to

constituents

from

t

for

common

killed

get

votes.

protest-

reduction in benefits.

.

fairly

threatened. There

more

Congressman

.

jumped the Sen¬
on

off

billions will

on

of

PER SHARE

A

several

extravagance.

a

stimulating along this line.
gressmen who don't like such

taxes hope so.

little

Y.

Exchange

Association

Security Dealers

Tel.: HAnover 2-1064 Tele: NY 1-2111

Street, New York 5, N. Y.

counsel, Theodore

For

,

ln® mvestigators.
Fulbright's approach

may

*n two ways.

©oaks

0f

crook

acted

in

the

Large Appreciation

be de-

Instead of

manner

WE

dence

that

but

he

we

was

have
a

no

crook,

evi-

and

anyway our only interest is in im-

GLASS B
A

On the other

hand, the volume

Con- files

is

enormous, and now that
high Mr. Truman has joined battle
with
the Senate

committee,

some

Teletype—NY 1-971

BOUGHT

FOREIGN SECURITIES
All Issues *

more

(common) STOCK

leading producer of
fast-growing

cement

Southern

California.

Analysis of
a

review of

try

of information in the
committee's

Potential

SUGGEST

RIVERSIDE CEMENT CO
in

a

Fiim Trading Markets

SOLD

N.

.

HAnover 2-0050

QUOTED

Philadelphia-Baltimore

Stock

52 Wall

May- proving the RFC."

be the proposed rates of Mr. Tru-

Claybaugh & Co.

Members

,

51erz1' *s ua.
same
.onc of
? e
® .t.est, and most painstak-

It is

when the public

man's tax program will do

loo

-

saying, as it were, "we know that
Congressman joe Doaks is a crook and
are going
by a thousand to prove it," he
said, in effect,

terms

come

.

Blair F.

J
s keen
for. two years,

«joe

in

-

?n.a

n

feels the sting of taxes enough to
ride herd

'

.

its

a

*

Economy

s

A. M. L, Inc.

would have restored these fire, by acting pronto to enact the
public works anyway. Likewise, taxes the day before yesterday, as

one

UNDER

Silver Bell Mines

and

gress

^

SELLING

inc.

Kimberly Corp

proposed to eliminate ing deliberate, and thereby letting
Congress
hundreds of millions of the word get around.
public works, have pleased con¬ cannot impress the public with the
and

cute

Many
a
Congressman
who ate
Banking sub-committee
openly or covertly tried to kill off RFC report*

STOCKS

Maule Industries,

con-

sciousness by having hearings, be-

been

a

this Company
the

available

on

and

Cement Indus¬

request.

Selling about

$12.25

LERNER & CO.
Investment

Securities

10 Post Office Square,
Tel. HUbbard

Boston 9, Mass.
2-1990

Allied Electric

Products*

Baker Raulang
Gisholt Machine Co.
W. L. Maxson
^Prospectus

% -r
M: i>

open'

posed to speak for the Board.

'

■» t

iy2%,

This commit¬

ment also was from the

Congress would have overturned the Administration wants,
cuts which would have
•
*
«
*
reduced Treasury largesse to hun¬
-At the Capitol time is expected
dreds of thousands who have be-i
to prove that Mr. Truman pulled
come accustomed to it.

►

commitment

Subsequently

the Open

market

proposed

f

B

.

vide defense at home, training of

on

request

<
I

Stanley Pelz & Co.

P.ARL MARKS & po. INC.
FOREIGN SECURITIES

40 EXCHANGE PLACE, NEW YORK S. N. Y.

BOWLING GREEN 9-5580

Mi




TELETYPE NY 1-3089

I

OK with the Reserve

was

pro¬

Forces must be increased to pro¬

>.'!

t

That

of

form

Thomas

ruled that rates should go to
and achieved this
through

will be boosted beyond the present

the

it

Board.

prices of food to the

another

Chairman

by

also

that

consumer.

For

of

Likewise, last September, before
Snyder issued the 1%% notes,

he

violent

appropriation

an

pattern

firm

Mr.

there will in due

So

fury.

subsidize the

in

romantic notion.
1);

made

tion of farm prices, no matter how
the

the

I
I
I
I

McCabe.

dent
made in the favored posi¬

be

can

a

commitment
that this was satisfactory with
the
Federal Reserve Board, and it
was

appreciable

any

"within

on

%V2%" he had

thing, there is no

one

that

objective of 3,500,000 persons. The
taxation, and will probably—al¬ Defense Department realizes that
ways
barring a
new
military expansion of the Forces must be
emergency—not hit $8 billion in taken in bites, and it is having
additional revenues. Liquor taxes
tough enough time now securing
probably
will
be
boosted
as the
3,500,000.
recommended,
but
the
higher
When, as and if the troops-totaxes on tobacco will have tough
Europe issue is settled, then the
going. A second and additional
tax bill to be enacted this year is public may be let in on the "bill"
a

ried

ex¬

pectations, there are large possi¬
bilities
for
increased
expendi¬
hope

I

can

production of
short

I

\

speak for, and commit the
Federal
Reserve System. Thus,
before Sec,
retary
Snyder on Jan. 18
an,
nounced that the
financing during this emergency would be car,

phase of the war or no new emer¬
gency,

opinion about Treasurv

This mechanical problem
is the
absence of any individual
who

projected expenditures are only
tentative, and so unrealistic that
Congress can hardly operate on
the assumptions they impose.
>
Even if there is no new big

tures.
ire

the

financing.

Every one in a position of re¬

war

I
I
the I
dif, I

end

ference of

will jected size of the Armed Forces

part of this by adding
consumer articles
to excise
up

merely

Federal Reserve Board in
the

and economy, for

taxes,

instance.

loud

Congress won't be much inter¬

*

off.

budget,

a

problem which complicates no
the
disagreement
between
Treasury
Department
and

of them is a long way

tion of any

substantial!
purely mechanics I

SPECIALISTS

50 Broad Street

Hill, Thompson & Co., Inc
Trading

New York 4, N. Y.

70 WALL

Department

STREET, N.

Tel. WHitehall

4-4540

*

Y- 5