Full text of Commercial and Financial Chronicle : February 16, 1950, Vol. 171, No. 4882

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gus. ADM.

ESTABLISHED 1S39

LIBRARY i,

m

i

.

Tk e

an

d

Chronicle
Reg. U. S. Pat. Office

Volume 171

New

Number 4882

Price

York, N. Y., Thursday, February 16, 1950

30

Cents

a

Copy

EDITORIAL

Where Are We

As We See It
Just

a

Little

Lincoln

More

Day

Trusts Continue

Favoring
Utilities in Final Quarter

Going Businesswise?
By W. WALTER WILLIAMS*

Oratory
Chairman of

We feel certain that all

Board, Committee

By HENRY ANSBACHER LONG

for Economic Develop¬

thoughtful citizens of
country have been depressed rather than
heartened by the tenor of the Lincoln Day oratory
which was poured forth at the weekend. Doubt¬

After reviewing postwar

less .those who desire to do

but foresees decline in automobile output and reduction

President,

ment;

Continental,

Seattle,

Inc.,

Washington

this

sentences

of

other

can

find isolated

in farmer's

can

be

construed

as

for¬

looking and constructive—or could be if
sentences and other passages did not quickly

follow

which

either cancelled

meaning of the others

or

out the apparent
rendered their meaning

Do

Possibly, Harold E. Stassen came as near as
any of them to pointing the way to firmer ground.
Indeed one reads long passages from this address
with a growing feeling that in this leader there
lies hope. And yet, there comes a time when one
is obliged to wonder. Let Mr. Stassen speak:
make

clear," he

purchasing

more

questionable.

"Let

our

1920,

we

On

the

review

stances

leading

cession

and

to

of

our

present

late

was

the

riod

of the circum¬

to

up
our

securities

There

It

in the fall of 1948.
some

number

present

our

re¬

business

ment

After November of that

recession from the peak levels

year, a

of 1948 set iin.

This

be characterized

inventory recession,
by

W. Walter Williams

a

point,

see

Fall of 1948.

can

vantage

But

a

recession, which
as primarily an

from

deepening

address

sustained

and

Feb.

Dealers

the

at

Convention

Atlantic

their

selections

I

LIKE

in

of

the

UNDERWRITERS

BEST

—

and

Turn

to

forum

advisory

page

2

for

conducted

field

name

and

the

Wi'

pe¬

buyers

other

sellers took the

pre¬

hand,

ascendancy
was

also

Henry A. Long:

sold

but, of course, they
outweighted by purchases in this category.
Tobacco and office equipment issues showed some con¬
were

far

centrated selling, while
throughout the list.

other

realizing

scattered

was

City,

N.

on

this

by the
the

page

activity

was

by total

The greater part of the
were

made

up

during

the

or

average

dozen funds,

a

Continued

participants

we

computa¬

increased purchases dur¬

by

24

week's

stepped

Far too often in economic and financial studies

completely deceived

tions.

J.,

total

quarter and purchasing transactions exceeded sales, one
should not be misled by over-all figures to conclude
that bulls among the trust managers were running ram¬

ing this period

continuous

investment

On

Many utility stocks

were

the

7, 1950.

Continued

SECURITY

mm*

attributable to the petroleum group.

are

National

Association,

three-months'

13% of portfolio liquidation

Although

high level

general demand kept the reces¬
into a real depression, and left

by Mr. Williams

Automobile

IIp

com¬

switch from the outlook

chemicals

on

pant.
*An

National

gas

was

of personal income and
sion

natural

al¬
though there
continued
to
be
a
representative list of oil issues pur¬

also marked
decline in farm prices and farm

income.

a

dominated.

that the postwar replace¬
boom reached its peak in the

can

total

of

previous

chased,
From
we

of

ed for 20% of the additions to portfolios
excluding
any
shares
acquired
through the exercise of rights. Also
among the most favored groups were

the

World

come

us

quarter of 1949

the

panies, building, merchandising and
non-ferrous
metal
corporations.

come

status.

TIIE

the

..

depression

it didn't

Most open-end funds

in the security markets during the
was reflected in a 25% expansion
portfolio transactions made by
investment company managements over changes in the
previous quarter. The utility issues
continued as top favorites and account¬
in

would talk

did finally

30

in

we

time schedule that is.

Let

"Let us make it clear that if the people want
political party that will take over and politically
dominate the medical professions in exchange for
promises which the experience of Britain shows
cannot be fulfilled, they should look elsewhere!
"Let us make it clear that if they want a

experts

Well

schedule, did it?

on

a

page

had?"

ever

War No. 1

says,

on

Remember how

about the "best advertised
we

also sold.

Increased activity

final

in promotion of business.

would hit us? and when?

are

add to cash balances.

on

are

Continued

equipment equities

the early postwar period how
the World War I postwar collapse in
kept wondering if something of the same sort
eyes

gas, building, mer¬
chandising and non-ferrous metal issues retaining their
popularity of the previous period. Profit-taking in oils
begins to overbalance purchases, as tobaccos and office

power.

remember in

you

with

energy

"that if people
looking for a political party that, will promise
to everyone ever larger handouts 1 Fom life,
public
treasury, they should look elsewhere; that we
hold that the public treasury is in reality the
people's pockets, and that we will not seek to
win votes by false promises nor by leading the
country down that road that inevitably ends in
a
cheapened dollar and ultimate misery and suf¬
fering for all when resources are drained.
us

be in strong position,

Points out frenzied period
of private plant expansion has ended and, with' Europe
back on its feet, foreign competition is beginning to exert
increasing pressure on U. S. Because of cold war, sees
grave problems facing nation, and urges tax reform and

in the texts of almost any

or

passages
leaders which

the

ward

so

developments, prominent indus¬

trialist concludes economy seems to

Increased activity also finds natural

on

most of

page

26

and

"CHRONICLE," wherein

security

that

they

like

best.

State and

and DEALERS

in securities of

550 Branches

Franklin Custodian

Funds,

Canada

across

mc.

Municipal
Bonds

NATURAL GAS

A Mutual Fund

Monthly Commercial Letter

COMPANIES
COMMON STOCK FUND

upon request

PREFERRED STOCK FUND

me

BOND FUND

White,Weld&Co.
Members New York Stock

Exchange

UTILITIES FUND

THE NATIONAL CITY BANK

CANADIAN BANK

OF NEW YORK

OF COMMERCE

40 Wall

Street, New York 5
Chicago

FRANKLIN DISTRIBUTORS, Inc.
64 Wall

Street, New York 5

Head Office: Toronto

Bond

Dept. Teletype: NY 1-708

Netc York
Seattle

lAoUmt
Underwriters and
Prospectus for this Open-End
Investment

Company

may

Distributors of

be obtained

Department

CHASE

NATIONAL BANK
OF

THE

CITY OF

NEW

YORK

Agency: 20 Exchange PL

Portland, Ore.

San Francisco Loe Angeles

Canadian

CANADIAN

Stocks and

bonds & stocks

Northern
New

Municipal

England

Company

bonds

and

from authorized dealers,

THE

INCOME (BALANCED) FUND
Prospectus on request

Boston

Bond

or

Corporate Securities
VANCE,
&

SANDERS

COMPANY

OTIS & CO.
Established

BOSTON

Goodbodx

(Incorporated)
NEW

YORK

1
LOS

CHICAGO

Doxmiox Securities
Gkporatioti

115 BROADWAY

New York

Chicago

Denver

Dallas

Cincinnati

Columbus

Toledo

Buffalo

NEW YORK

105 W. ADAMS ST.
.

CHICAGO

IRA HAUPT&CO.
Members New

and

MEMBERS NEW YORK STOCK EXCH.

CLEVELAND

ANGELES




& Co.

ESTABLISHED 1891

1899

40 Exchange Place, New York 5, N. Y.

other

111

Broadway, N. Y. 6

WOrth 4-6000

Teletype NY 1 -702-3

WHitehall 4-8161

York Stock Exchange
Principal Exchanges

Teletype NY 1-2708

Boston Telephone:

Enterprise 1820

2

(706.)

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

Thursday. February l(i, 1950
■<*»**«««

The

Security I Like Best

This Week's
Forum

A continuous forum in

which, each week, a different group of experts
in the investment and
advisory field from all sections of the country
participate and give their reasons for favoring a particular security.
ROB

ROY

ALEXANDER

York

R. R. Alexander & Co., Investment

Stock

opinion

My choice is a common stock.
From my favorite
group, I select
Socony-Vacuum Oil Company. At
least

once

25,

I

a

for

year

.

the

have

the

equally

can

the

pick Socony
leave

great Standard

high degree of
uncertainty.

Gulf

and

Texas?

Only

because

i

The

of

financial.^

n

Rob Roy Alexander

interest

in

every

-

phase of the oil industry, includ¬
ing
natural
gas,
assurance
of

think of

our

choice,

we

Let

as¬

sume

you

are

65,

have

is

still

a

good

contrast.

a

us

$100,000,
deal
of

Or set

up

Socony,
of

with

reasonable

a

increased

income

A

this

your

in¬

would

answer

writing a brief for
stocks, which the space

article

I

to

in

us

common

But,

full

and

be able

and

Socony

your

in¬

present

a

$6,700,

•

for

leave

of

trust fund

a

bank? Or put all your money

a

volve

does

65—at

am

not

permit.

least—and

I'll

justly

as

to be called

any

back

goes

to

Company,
1882.

Both

Oil

dissolved in

Vacuum

Oil

in

1866, and
New York, formed
part

were

Trust

of

when

it

the
was

1911. Thereafter they

193 i,

operated

separately
until
when they merged into the

ent company.

dend

as

Rock of Ages,

a

The

Standard Oil of

in

deserving

formed

Standard

is

record

The

an

1948

statement

shows

net

assets

$1,443,000,000; debt, $175
million; gross income after costs
and taxes, $219 million as com¬
pared
Net

with

worth

$106 million

in

1937.

share for the 31,800,000 shares was $33.68 in 1948,
$21.98 in 1938, an increase of 56%.
per

Net

earnings per share: $1.78 in
1937, $4.18 in 1948; average earn¬
ings for the past 10 years, $1.80

dividend, 71 cents;
high of the past seven

average

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

CA.
N.

7-0425

Y.

:

Telephone

:

Teletypo BS 259
WOrth

4-5000

r

age

20;

In

FOREIGN

low, 12. Thus, at to¬
day's price of 16% and dividend
of

$1.10,

Externals— Internals

the

yield

dividend

208 South La Salle

55

was

ancestry,
bit

by

the




cents, which

I had to

in

I

sat¬

market

open

allowing

below

10

the

while

the

in

the

low

percentage
of earnings paid in dividends.
To

pick

stocks

pick

one

ities

we

and

prospects

better

better

or

for
easy,

the

of

but not

to

security. So, for

It's

robust

posterity,
listed

on

was

a

health,

I'll

take

the

New

also

which

was

re¬

capitalized and sold in part to the
public/The shares had only re¬
cently

been

York Stock

listed

the

011

New

become

that they

so

familiar

more

and its

These -analysts

opera¬

well
impressed by what they learned
and it appeared that with this in¬

unfounded

an

diction

of

market pre¬
dividend
reduction
open

a

from $1.00 to 50c per year. At the

5%,

rate

the

stock

would

yield

normal relationship
in a 2%% money market. Earn¬
ings, at the time, were running at
a

more

the rate of

were

to

be

highly

regarded

thus

and

the discount in value attributable
to lack of

seasoning would be

re¬

that

not

reduce

the

I

the

Index

management
the

dividend

was

Reserve

Industrial

that

Brown

sales

would

high

level.

the

be

Production

&

Bigelow's
at

Ink"

Index

Expenditures

a

1948, the

dex

and

"Printers

Consumer

of

pro¬

vided the evidence. Between

1935

Ink"

In¬

Expenditures

together, and stood at 290%

and

282%

respectively

1935-1939
Brown

Bigelow

membrance

their

of

Meanwhile.

average.

&

sales

of

"Re¬

Advertising" had in¬

creased to 700% of their 1935-1939

The

above

dicated, that

ficient

$1.00

considerations

there

would

be

in¬
suf¬

earnings to protect the
dividend. This was strong

evidence
under

that

the

10 reflected

sumption

that

not

be

the

market
a

the

price

mistaken

$1.00

was

as¬

dividend

The

next

to lack of

dividend

and

increased

stockholders.

was

to

interviews

with

Charles

and

Ward,

President, and other members of
was

fying. I found these

most grati¬

men

also

obligation to

not only
conscious

the

stock-

Nat'l

Assn.

of

Securities

Dealers

Ijuk

75 Federal St., Boston 10, Ma'sst*
Tel. HUbbard

2-5500

Portland,

Me.

Tele.

Enterprise

BS

142

2904

Hartford, Conn. Enterprise 6800
Open End Phone to New York Canal 6'HSIS

SPECIAL PUTS OFFERED
Homestake M.

45% May 6 $137.50
42% May 27 250.00
Richfield Oil.. 39% May 13 325.00
Tex.Pac.Ld.Tr. 56
May 20 375.00
Cities Service
68
Apr. 17 425.00
South. Railway 33% Aug. 14 425.00
Alleghany Pfd. 85% Mar. 31 537.50
Allied Ch.& Dye 210
Aug. 14 900.00
Park & Tilford

.

SPECIAL CALLS OFFERED
(PLUS TAX)

UnitedLt.&Ry. 43% June 1 $100.00
Socony Vacuum 16% July 27 112.5C
Elec. Bd. & Sh. 19% Apr. 17
125.00
Magnavox
21
May 20 137.50
Homestake Mg. 45% Mar. 6 137.50
Schenley Indus. 32% May 22 200.00
Radio Corp.
14% Aug. 21 237.50
Yngs.Sh.&Tb. 81% Apr. 20 262.5ft
Continental Oil 57% Apr. 21 275.00
Atch. T. &S. F. 105
Apr. 24 425.00
..

Booklet

For

all

security
the

around

stock

common

land

Gas

like

of

New

Eng¬

Calls

Request

Filer, Schmidt & Co.
Members

&

Put

Dealers

30 Pine

St., N. Y. 5

&

Brokers

Call

Assn.,

Inc.

WHitehall 3-9177

Association.

Electric

&

the
best is

purposes

I" currently

and

Puts

on

on

Ml

The stocx sells
for

about

pays

15,
divi-

a

dend
cents
a

Established

90

of

give
yield of al¬

most

H. Hentz & Co

6%.

This

secur¬

ity has

Members

many

New

York

New

York

characteristics
which make it
New

adaptable

York

Stock

Exchange

Curb

Exchange

Cotton

Exchange

to
Commodity

differ¬

many

ent

1S56

to

types

Chicago

of

Exchange,

Board

of

New Orleans Cotton

accounts:
And

(1)

It

good

is

other

Inc.
Trade

Exchange

Exchanges

a

defen¬

sive

security

Carrol J. Hoffman

the

of

the company's
more

stable

nature

N.
of

operations and the

than adequate protection to

its dividend.

(2)

high

It

fits

yield

Y.

Cotton

Exchange Bldg.

the

requirement

desired

by

CHICAGO

DETROIT

PITTSBURGH

of

many

ac¬

It holds the promise of

ap¬

counts.

(3)

promise

earnings
on,

and

for
a

of

an

the

the company,
increase
in

reasons,

logical

gradual

given

hope

later

for

an

NEGEA is

a one-degree holding
owning electric and gas
properties in Massachusetts and

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

company

New

BOOKLET

ON

REQUEST

Hampshire. The well diversi¬

fied

territory served includes the
cities of Cambridge, New Bedford,
Worcester and Framingham, and

National Quotation Bureau
Incorporated

46 Front Street

dSta*-

Continued

on page

31

|

NEW YORK 4, N. Y.

GENEVA, SWITZERLAND

eventual dividend increase.

Minnesota,

J. B. Maguire & Co., In?.

Members

CARROL J. HOFFMAN

by

Paul,

their

be

may

load

seasoning.

hut

continue.
possible that the

growth in

consideration

raoa^1a.

that

expect

capital
appreciation
is
for Brown & Bigelow

probable

the

the management,

I

should

tendency
However, it is

undervalued

St.

of

this

to

M^r first visit to Brown & Bige¬
in

UHMMS

level

the price

year,

and

due

calculate the discount attributable

verv

increased

preciation

statistically.

low

During the past

further

com¬

lower

a

rose.

There¬

maintained.

stock

seek

to

price

because

level.

fore

the

has

fact

Board

maintained

"Printer's

and

would

company's
dividends,
result
in
the
pay

Brown & Bigelow

on

stock

mon

and

Boston, Mass.

The

Advertising

rose

therefore,
yield

the

of

earn

Partner, Draper, Sears & Co.,

company's sales
were in a strong secular
uptrend.
A
table
of
Brown
&
Bigelow
sales, Personal Consumption Ex¬
penditures for the United States
and

ability to

unless

the

of

aware

Federal

of

fident

appraisers,

would

headed downward, I felt con¬

was

the part of security value

in half.

were cut

While
that

duced.

$2.00 per share and I

felt

earnings

branch offices

our

creasing interest, Brown & Bige¬
low would, in a short time, come

as

Exchange.

In my
opinion, the price of the
shares, slightly under 10, reflected

near

with the combined qual¬
want for

hope

Socony.

with

dividends,

average

it

corporation

I

Only two
privately

seems

stingy, being matched only

Gulf

before,

years

held

$1.00.

was

risk

my

unseasoned.

was

could

management

St., Chicago 4 pride of ancestry,
Tel. CG 451

and

every year until at
the end of 1948 it was 71 cents. To
this stockholder of
50%
Scotch

future, would be

Tele. RAndolph 6-4696

6.70%

has increased

growth

zippin & company

is

the price is in middle
ground. For
the 10 years 1932-1941 the aver¬

a

SECURITIES

aver¬

years,

average

age

Specialists

and

calculating

pres¬

The unbroken divi¬

usually listed as
starting in 1912, but nobody would
suspect they didn't do all right in
the previous years.

scriptive analysis

could

security

of

groups

with the company,

were

10%.

over

regular dividend rate

lower

take Socony.

Socony,

for de¬

took

ness, on

heirs?

call

munity
quently

issue

to

or

Heller

shares

a

of $7,800?

capital appreciation,

Write

showed

keep the financial com¬
well informed. I subse¬

tions.

mistaken

In

wires to

officers
willing¬

Increasing confidence
in
the
dividend, and a growing aware¬

come

indicated for 1950-51.

Stanley

•

yield

fall

to

also

isfy myself that the
to

NY 1-1557

TRADING

company's

analysts to St. Paul

Bigelow
to

The

directors

ness

risk undertaken

price

Exchange

Corpora¬

took into account the fact that the

chance

exceptional opportunity for
profit through expanding sales

and

that the difference in yield
the market's opinion of the

was

Stock

MARKETS
holders.

was

available

was

York

St., New York 4, N. Y.

Orleans, La. - Birmingham, Al ,st
Mobile, Ala.

Direct

Electric

and must retire. Would
you buy for your security a re¬
fund
annuity
of
$5,900,
or
a
straight annuity for your life only
in

pany

bonds,

knew

have

New

Moieiana,

and

Co., New York City.

government

holds

into

THIS is whose
a new stock
productaffords
com¬

by

2 V2 %

money,

Investment

dicated

&

we

New

25 Broad

7% Preferred—Clarence E.
Unterberg, C. E. Unterberg &

long-term

under

which

A Growth

in-

Brown

must

Members

tion

on

as

unbroken dividend
Socony matches any. In
price and income yield it usually
good edge.

States

Central

rate

pure

return

growth, long,

a

Steiner, Rouse & Col

very

record,

As

v

a

capital,

strength,
world-wide

Mosle

Rotan,

Rotan,

re¬

flected

or

Edward

—

Houston, Texas.

of

equities

non-

HAnover 2-0700

Fund

Texas

all

the other three

Oils,

GREER HYDRAULICS

prices

J.

Draper, Sears & Co., Bos¬
ton, Mass.

was

almost

out

Electric

&

Carrol

—

man,

1949 when

ary,

Gas

England

my

made in Janu¬

How

anybody

and

issue

Bought—Sold—Quoted

Bigelow—Stanley Hel¬

Association

particular significance because
appraisal
of

50

omit

good.

J

New

My

best

of

&

Co.,

City

"Remembrance Advertising," is of

the

list

Louisiana Securities

&

Stanley Heller & Uu., New
York City..

pick

many

BONDS

Heller &

i*

Company—

ler,

STANLEY HELLER

New York

Oil

Alexander,
R.
R.
Co.,
Cleveland,

Roy

Brown

Stanley

Alabama <T

Ohio.

in¬

any

tried in vain to

would

S, SAVINGS

for

Rob

past

10 or20 stocks.

U.

suitable

experience with Brown &
Bigelow, largest manufacturer of

A

BUY

is

Socony-Vacuum

my

and

Selections

Alexander

Exchange and. in

vestor.

Counsel, Cleveland, Ohio

Participants

Their

New York

4, N. Y.

j

Volume 171

Number 4882

THE

COMMERCIAL

In

INDEX
Articles and News

Page

—Henry Ansbacher Long

Cover

(Editorial)
Sales Program of the Railway
Express Agency—E. W. Hull—
.1:

Our Irredeemable

Currency

System

(Part

Frear

Bill

—Cyrus S. Eaton

—Howard F. Vultee

(Part III)

:

8

—Bradbury K. Thurlow

10

-

Competition Calls for Better
Selling—Roger W. Babson
Government:

Partner and

to

Do

11

!_____

About

Federal

—Hon. Joseph W.

Spending

—Robert P. Boylan

16

____„

Widow's Mite and the
Indispensable
—Alexander Wilson

Security I Like

Four

"In

._

Exchange Board__

Cause

Mission

39

Canadian Securities

17
14

.

Dealer-Broker Investment
Recommendations
_'___

15

Bargeron

Funds
14

Observations—A.

Wilfred

Our

Reporter's Report

Our

Reporter

Prospective
Public

on

Utility

18

May.
i-.-

Offerings^

21
i

and

.

Industry.

Published

The

Twice

FINANCIAL
Reg.
WILLIAM
25

B.

Park
.

U.

S.

DANA

1

COMPANY, Publishers

2-9570

to

SEIBERT, President

—

Chicago

3,

111.

135

E.

C.,

bank

South

La

(Telephone:




the

considered

25,

by William
Company

1942,
N.

Y.,

B.

the

Act

American

Cotton

Watkins, excoriated

Manufacturers
the

bill.

of

clearings,
Salle

State

St.,
0613);

in

not inure in

security holders. The

Territories and
Pan-American Union, $35.00

U.
Members

per

Dominion

year;

of
Canada,
$38.00
per
Countries, $42.00 per year.

Other
and

We

security holders share this conviction."
Maine

and

Ohio

dealers

appropriately be entitled

interested in offerings

are

degree
majority

associations

in

New

"A

on

page

FOURFOLD

section.

for your dollar

New

York

Stock

Exchange

Street, New York 4

Members

-

Chicago

-

York

Glens Falls

Curb

.

because The
one:

ex¬

8

2-8200

-

security buyers, and the

Exchange

Sljr iNftw flork
"All

Schenectady

.

individual investor.

1-5
-

.

ecutives, professional and institu¬

Street, Boston

Hubbard

Teletype—NY

Albany

New

50 Congress

HAnover 2-4300

Times

Times has four audiences in

banking officials, corporation

Spencer Trask & Co.
Members

advertising dollar

fourfold results in The New

tional

25 Broad

RESULTS

35

gets

of

in

—

funds.

"Securities

«

Proposal to In-

year.

Record
Monthly,
(Foreign postage extra.)

York

our

Registration"

are

PREFERRED STOCKS

S.
of

must

made

in

York

Note—On account of the
fluctuations in
the rate of exchange,
remittances for for¬
eign subscriptions and advertisements
be

ing consult

Your financial

Publications

Quotation

$25.00 per year.

complete record of

potential corporate financ¬

any

vast

March

States,

Possessions,

a

Institute,

Rates

United

For

Speaking for its

High Grade Public Utility and Industrial

Subscriptions

Bank

form,

entirely in his
judgment it contains

Dana

second-class matter Febru¬
at the post office at New

under

Allen, Jr., of

Continued

1950

as

J.

Country."

requirements of this bill would

Eng¬

1879.

Other

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

Offices:

London,

our

Smith.

Subscription

Thursday, February 16, 1950

Other

ary

York,
8,

Publisher

WILLIAM D. RIGGS, Business
Manager

records, corporation news,
state and city news, etc.).

&

9576

HERBERT D. SEIBERT, Editor &
WILLIAM DANA

Copyright
Reentered

Office

Place, New York 8, N. Y.

REctor

Gardens,

Association of Manufac¬
Senator

and

CHRONICLE
Patent

Drapers'

land c/o Edwards

this

against this proposed legislation, and
Cyrus S. Eaton,
in a scathing denunciation of
the Bill before the hear¬
ing Committee, declared that the SEC's
approving
report which is artfully labelled "A
Proposal to Safe¬
guard Investors in Unregistered Securities"
would

5.

page

the

Frank

more

Weekly

COMMERCIAL

on

our

The

34
44

in Court"

at

Jay L. Quigley, Chairman of the Legislative Commit¬
National
Security Traders Association Inc., an

5

You

*See "Point Four

.

of

of their

2

(Walter Whyte
Says)

letter sent to

to the interests of their

39

The Security I Like Best

Tomorrow's Markets

.

.

"They can ill-afford the expense of legal
accounting skill which would be required
by this
Amendment. Furthermore,
they have a conviction that

23

Washington

Banking

and

21

Securities Salesman's Corner_

.

members he said,

41

Securities

The State of Trade
and

sponsor

For
T.

Securities

Securities Now in Registration.

Delaware,

43
20

.____

Railroad

on

justifying action by the Congress

a

ments of

*

Governments__i

Security

WHitehall 4-6551

the bill and

provisions that will deal a
crippling blow to the 'Over-theCounter-Market' thereby
definitely injuring the source
that produces the
major portion of the new capital require¬

36

__.

evil

interest, whereas in

7

Indications of Business
Activity
News About Banks and
Bankers

on

Bill No. 2408 (known as the
Frear Bill) in its
present
would lead the investor to believe
that it is

8

Einzig—"Can Sterling Be Made
Convertible?".
From Washington Ahead of
the News—Carlisle

Telephone:

organization composed of 29 affiliates in the
securities
field, in voicing the attitude of his
group, placed upon the
record a resolution, the
following part of which is strik¬
ingly significant, "Be it further Resolved, That Senate

16

Business Man's Bookshelf

Mutual

or

turers, in

tee

Cover

.

Bank and Insurance
Stocks

Coming Events in the Investment Field-

fast.

up

declared that "no need for this
legislation has been

44

(Editorial)

you

STREET, NEW YORK

demonstrated" and asserted that the
legislation "goes
far beyond" the intent of
Congress when it approved
the existing Securities Act.
r
?

23

Regular Features
As We See It

cash

letter, signed by NAM President, Claude A. Putnam,
20

Nation's Financial Analysts to
Meet__
ECA

you

Our

of the proposed bill, expressed its
opposition to the measure on the ground that it would
"hamper and financially burden" small business. The

Further Loss

Markets, Backman Warns

Heads

WALL

don't

us?

of the

Similarly, the National

19

___,

Cattier

time."

14

Wage Rise in Coal Industry Would

Jean

abuse

5

9

Bank Sees Decline in
Investment Outlets for 1950— No Firm¬
ing of Interest Rates Likely

of

5

5

Tribute to George
Washington..

New

some

.

of N. Y. Curb

why
to

wake

coal

2

Landsberg Named Chairman

99

in

Coal Association, said "The
bituminous
mining industry and the affected coal companies are
opposed to the legislation
." "
we do not believe
that the
legislation is made necessary by any particular

17

Best

Court"

it

will

for the National

Capital Flotations in 1949 Show Marked
Decline From 1948
Rufus Tucker Foresees
Dip in Auto Output
Point

bring
offer

exempted from its provisions. Robert E. Lee
Hall, counsel

Penny

.

The

how

opposition that has developed thus far.
Eugene M. Thore, general counsel for the Life Insurance
Association of America, wanted life
insurance companies

Horizon

The

Currency has been holding hearings

here is

15

Economic

on

A subcommittee of the
Senate Committee

and

Martin, Jr

Underinvestment—Cloud

imagining

out,

recognize

difference.

12

Government

turned

the passage of that bill would he
against the public
interest and the interest of investors.
Which is the correct
position? To what extent has our
attitude been confirmed?

.

Competitor in Banking

—Leslie Gould
What

of

We believe, and we have
said, that there is a welldefined body of opposition, to the Frear
Bill and that

'

Affected by Present Investment Risks

as

Instead

beautiful that stock might have

has said on numerous occasions in
drawing
artificial distinction between
opposition to the Frear
Bill and
opposition to the bill "in principle." We

7

Investment Values

DREAM,

some

__

and

CAN

CAN'T I?"

This he

6

Power

no

Anti-Trust Suits

Conservatism

SEC

"I

of life is imperiled by
SEC powers should be

Harry A. McDonald, Chair¬
man
Exchange Commission, has said
there is no
opposition "in principle" to the Frear Bill we
have felt one of two
things was true—either he refused
to see, or else he was
talking with tongue in cheek.

6

Is Unwarranted Extension of

way

AND COMPANY

On those occasions when
of the Securities and

I)

Why the Frear Bill Should Be
Defeated!—Ewing Boles

The American

Worcester

-3

liCHitnsTfin

B. S.

in turn be

curtailed in the public interest and for the
benefit of investors.

3-y

—Harry A. McDonald

SEC victim.

regimentation through the Commission.

4

4

Amending the Securities Laws—The

Bill

(707)

Opposition to the Frear Bill

an

;■

—Walter E. Spahr__

Frear

CHRONICLE

may

Where Are We
Going Businesswise?—W. Walter Williams—Cover;;
In Opposition to the
Frear Bill

of

FINANCIAL

Some of the opposition to the Frear Bill
collated. SEC partial
as
between the listed and the Over-the-Counter
Market. Its
claim of
objectivity insincere. Either market

Trusts Continue
Favoring Utilities in Final Quarter

Evils

&

the News That's

Fit to Print"

^

4

COMMERCIAL

THE

(708)

without

cause

Sales Program of the

without

tion,
in

Railway Express Agency

designed

lic

business. Distin¬

So the

the benefit
it

for

time

have

do

little

a

by

trans¬

country's
Railway

largest
Express

all

of

transportation

kgrourtd

steamships, all coordinated to give
the shipping public an efficient

be

and economical form of transpor¬

the

would

us.

With the passing of time, trans¬
portation has become one of the
most competitive fields in indus¬

,

The express

business

was

started
hundred
eleven

-

a

try today. That, briefly, was the
history, and today transportation

and
W.

E.

years

by

ago

Hull

is pretty much the same as many
other industries in

a highly com¬
petitive field and in the position

a

young man just twenty-one years
of age named William Harnden.
He began

Boston

between

that leads

into

us

the

com¬

petitive market and the need for

only equipment he had at that
time, was an old handbag, and all
of his transactions were carried

good, constructive selling. We tell
our people: The more competition

only

props

incentive, the
interesting, and the more it
gives us to work for, and I, my¬
self, feel that way about it.

in that handbag.

on

concerns

and the larger business
which bought and sold

Today there

goods just as our customers do
today. In fact, one of his earliest
advertisements,
which appeared
in

New York

a

paper,

offering

at

Wyman
That

it

just

the

express

linked in with those color¬

was

ful

episodes of that era, and so
today it typifies and is symbolic
of speed for the distribution of
goods, and speed for the handling
of
Wall
Street
transportation

Now, let
the

and

ticker,

we

that

so

doesn't enter into the picture too

greatly and in tfyat way
munication is expedited.
Harnden

But

handle
is

the

that

at

market

believed.

of

day.

He

one '

time

did

quotations,

was

He

the com¬

the

it

"ticker"

performed

that

type of transportation.

operation,
the part

2,

desire to

thereby

to

nel

in

do

creating

use

our

co¬

on

of

about

a

service.

Railway Express has

a

person¬

employes,

50,000

of whom has dedicated

every one

to

providing
the
best
transportation that the

of

shipping public
give them the

can

secure

best

there

and to
is

in

transportation.
Without

fullest

the support and the
cooperation of this vast

and potential force, the efforts of

sales

our

organization, which is

a

segment of this entire personnel,
would

of

a

be

futile; therefore it is
that we not only think

sales organization

building

are
we

link in the

every

when

that

we

personnel, but
coordinating it
entire organization be-

only

be

can

through

ac¬

proper

"There is

social

means

that they are the
intimation.
This

that is entrusted to his

KEYNES.

training

incentive

to

be

plans,

through

acclaimed
as

a

which

his

for

personal

doing

person

out¬

an

standing job.
We

feel

portant

that

and

should

be

that

that

the

employe

is

the

given

im¬

very

individual

recognition

the job that he does.
is

for

Then, there

suggestion

pro¬

gram, which is another outlet for
the employe
to express himself
and

to offer his suggestions for
improvement and betterment

the

of the

jobs that he is asked to do.

Program to Get More Business
believe

that

who meet the

employes

our

public

the real

are

business-getters and therefore
endeavor
the

at

improve
personnel who

our

deal with the

public. We are
trying to find ways

stantly

we

all times to

ability of

con¬

and

For

example,

month

brace

a

ganization.

launched this
will em¬

we

program

that

employe

every

in

this

or¬

It is built around the

theme—"Make it your business to
ask for their business" and

conceivable

the

element

every

has.

where they may be employed and
then telling them what the pro¬

is, the purpose of it, and
how they can participate and how
through that program they can
help their own interests.
gram

York, 1920),
pp.
235 - 238:

their

months

39 BROADWAY

,

Telephone WHite'nall 4-8787




NEW YORK 6, N. Y.

Teletype 7^. Y. 1-618

can

secretly
and
unob¬
important part of the
wealth of their citizens.
By this
they not only confiscate,
confiscate
arbitrarily;

thev

and, while
ishes

many,

some.

the
it

process

actually

impover¬
enriches

subtler,

society than

existing

debauch

to

The process engages

all the hidden forces of economic

it

in

ing pursued in the United States

justify careful weighing, by all
thoughtful and concerned people
in this country, of those impor¬
tant truths stated by Keynes in
V

1919.

have

We

a

million

which
is

".

But further, the

.

.

of

ments

able

Growth Company

to

Govern¬

as
a

well

as

Moreland & Co.
Members:

weak,

class known

as

'profiteers' the popular indigna¬
against the more obvious con¬
sequences of their vicious meth¬
ods.
The 'profiteers' are, broadly
speaking, the entrepreneur class
of capitalists, that is to say, the
active and constructive element in
the

capitalist society.

whole

.

.

.

and

will

give

the

em¬

By

sciously conceived. The profiteers
Mass

Selling

Selective Selling

vs.

ing

you

about

the

idea

of

it

what

is to
a

is

mass

am

tell¬

give

you

selling
selective

mass

tion

like

takes the
an

quires,

Railway

Express,

coordination

over-all

of the two

job.

selling efficiency of
selling organization
first,

it

information

—

the
re¬
very

Secondly,
education.
Thirdly, selling tools
and
methods; and now let me
give you, if I may, just a brief

are a

definition of these three elements.

it

As

requires

survey or

facts
and

apply information

we

reasonable

a

data

about

on

market

information

or

the

Railway Express
the competitive services.

Two:

The

is

education
•

»

*

Continued

'

on

'

i

!

1

;

page

the
^*

32

consequence

and not a cause

rising prices. By combining a

of

popular hatred of the class of en¬

blow already
security by the

trepreneurs with the

given

social

to

violent and

arbitrary disturbance

of contract and of the

Exchange

Stock

Detroit Stock Exchange

Penobscot Building

1051

DETROIT 26, MICH.

tion

directing hatred against this
therefore,
the
European
ploye, even if he doesn't ask for class,
Governments are carrying a step
business, an opportunity of saying
further the fatal process which the
something about the services that
subtle mind of Lenin has con¬
he is selling.
cussion

22

Paying

Dividend

not

Europe, being many of
moment reckless in

seek to direct on

That was
a
provocative idea,
something that will provoke dis¬

page

RESISTANCE

this

a

lapels

on

diagnose.

methods

of

irredeemable cur-

an

WELDER CORP.

destruction, and

manner

a

in

man

of the Keynes

so many

surer,

no

of overturning the

of

perishes save

ever

hand."

Continued
no

law on the side of

one

society
own

right.

certainly

was

is

means

does

of

...

"Lenin

of which

observations to practices now be¬

an

method

a press

the proprietors. Perhaps
true that no or¬

are

plication of

confiscate,

but

making, and

Subsequent events and the ap¬
Walter E. Spahr

gov¬

ernments

their own

by

undone

is historically

by its

in¬

of

process

choose to ask not

speak of them so harshly. They

der

By
continuing

flation,

international financiers, or

it

currency.
a

insult;—call them pro-Ger¬

they

the

debauch

of 'their

every

own

to

was

-

instruments, governments of their

destroy the
Capitalist Sys¬

tem

their riches and

exercise

Now they tremble before

altogether

way

to

their

handling the traffic.

One:

F. EBERSTADT & CO. INC.

best

the

their

allow themselves to be ruined and

that

clared

in

mans,

to

are

throughout the
February and March
which says that they are asking
for business, and they ask that
they be given the privilege of

on

in the
capitalists

now

themselves,

any ransom you

de¬

have

ago,

profiteers, and they will give you

"Lenin is said
to

in

so

years

society, in the propriety

unlimited

power.

New

Howe,

in

to

full enjoyment of
the

at

be¬
badge

not

was

of their continued existence in the

of

and

Brace

Bay

City

—

Lansing

Muskegon

—

NATIONAL BANK

LIMITED

oi INDIA.
Bankers

to

Government in

the

Kenya Colony

Office:

Head

and Uganda

26,

London,
In

Branches

Kericho,

Colony,

and

Bishopsgate,
E. C.

Burma,

India,

Kenya,

£4,000,000

Subscribed Capital

The

£2,500,000

Fund

Reserve

Bank

^

£2,000,000

Capital

Paid-up

Ceylon, Kenya
and Aden

Zanzibar

conducts every description
and exchange business

of

banking

Trusteeships

established

also

and

Executorships

undertaken

equilibrium of wealth which is the
inevitable result of inflation, those
Governments are fast rendering

impossible
social

a

continuance of the

and economic order of the

nineteenth century. But they have
no

definitely, information.

DEPARTMENT

believed

Midwest

things they
ing asked to do is to wear

The

TRADING

Consequences

them

One of the

easy

twenty-five
more than it is

value

t,

r c o u r

the currency.

the employes
assemble, as you and I are here
now,
at their various locations

regular

Quoted

(Ha

States

to do

Sold

Peace

yesterday throughout these United

job is as compared to a
selling job. But in an organiza¬

Bought

Economic

The

basis

that, gentlemen,
selling and the reason I

Stocks

The

been

having

diminished,
victims of

so

England

I

—

Writing in 1919, John Maynard
Keynes, of Kings College, Cam¬
bridge, said in part in his book,

brought into play to give life to
that program.
It was launched

by

currency."

any

There

Now

Chemical and Drug

the

organism

United States. Then the

served,

to do that better.

means

debauch

to

This

care.

employe has the opportunity

efforts

no subtler, no surer,
of overturning the ex¬
isting basis
of society than

is augmented by

program

must think of

with

1950.

have

we

of the shipping public

necessary

♦Stenographic report of lecture by Mr.
Hull, 18th in a series
on
Investment
Salesmanship
sponsored by Investment
Association of New York, New York City,
Feb

job

building employe interest and

kind

have the
transportation

today

fact,

tell you, if I may,
about
our
personnel

me

something

himself

needs.
In

it calls for real intelli¬

hundred and eleven

business
developed rapidly and, of course,
it

is

handling of
carriers,
vying for that

these

gent sales planning and direction.

as

westward,

and

trans¬

them, are
piece of traffic; so you see
really a highly competitive

field and

ago.
Well, time went on
the
country
expanded

years

and

a

same

off Broadway.

corner

was

Street,

Wall

2

around the

for the

most of

representation, his agent here,
man
by the name of William

carriers

many

the

and

shipments,

told about

are

service

a

portation

his
a

more

You

care.

service, and
necessarily

a

becomes

an

proper planning, and by
educating the individual employe
in
what
it
means
to
him, in
handling properly the shipment

more

Now his earliest customers were

bankers,

have, the

we

it

I

bauched currency,

direction,

the

on

irredeemable currency, regardless of type, is a de¬
Dr. Spahr contends it has been means of
depriving people of power to exercise control over public purse
and, in addition, enables government to purchase support of
pressure groups.
Says present U. S. currency system invites
Socialism and is cause of government crippling of private
enterprise in foreign trade and exchange.

Asserting

the

functions perfectly.

We

So

his

to

product is

complished

A

Providence,

and

handling

We believe that that

Competition Means More Selling

he had, the

the

and

chain

the survival of the fittest.

of

the business by handling
packages and making collections

of

entrusted

our

PART

future for himself

ways

important that

tation.

helpful

most
to

the

facilities, including the trains, the
trucks,
the
airplanes,
and
the

I

think
bac

is

agency,

and

ordination

trans¬

express

portation.

it

the nation through the co¬

serves

of

but

of

railroads,

Ex¬

Railway

today

and

Committee

help to

can

name

express

68

are

portation, not
n e cessarily
press,

see,

indicates. It
the Rail¬
way Express Agency of the Class
1 railroads of the country. These
the

is

brief

history of ex¬
press

work

he

ways

better

a

better

therefore

industry has grown and

expanded

just what the

discus¬

sion—that I might give you a

has

Vice-President, Economists' National

Executive

Monetary Policy; Professor of Economics, New York University

to

the

and

build

sales management. Outlines nine principles of selling.

think perhaps for

I

Currency System
By WALTER E. SPAHR

give the employe a
better understanding of his pub¬

and growth of railway express services,
Railway Express Agency's salesmen's

of this discussion—and I hope we

selling work.

accomplish this, several ap¬
are followed. First, there
is the training program, which is

guishes between mass selling and selective selling and details
methods of coordinating the
two.
Upholds incentives and
quotas in

Evils of Our Irredeemable

coordina¬

To

Mr. Hull describes the

training system and its program to get more

direct

Thursday, February 16, 1950

teamwork,

of

would not get very far

we

our

that

effort

proaches

Vice-President—Sales, Railway Express Agency

After reviewing origin

that

CHRONICLE

Sales Training- of Express Agency

By E. W. HULL*
Assistant

FINANCIAL

&

plan for replacing it.

"We

are

with the

thus faced

the

STREET
Y.

in Europe

weakness on

all-powerful master.
and

SUGAR

capitalist

The

timidity of
this class is now so great, their
confidence in their place in so¬

terror

WALL

spectacle of an extraor¬

great

ago our

99

NEW YORK 5, N.

the part of
class, which
has emerged from the industrial
triumphs of the nineteenth cen¬
tury, and seemed a very few years

dinary

LAMB0RN & CO., Inc.

Raw

—

Refined

—

Exports—Imports—Futures

personal

ciety and in their

necessity to the

,r

Liquid

DIgby 4-2727

Volume

171

Number 4882

COMMERCIAL

THE

&

CHRONICLE

FINANCIAL

Capital Flotations in
Electric

1949 Show Marked

Output

Carloadings
Retail Trade

State of Trade

Food Price

Industry

J
Moderate declines marked

duction

the

week.

past

unexpected, since it
off

in

soft

the

This

in

output

Compared

with country-wide industrial production a year
output last week registered a slight contraction in volume.
In

tive summary, the

was

cludes

high record in the industry's history of 6,062,095,000 kilowatts.
part adequate,-, but

this,

unfortunately,

turings and domestic consumers!
•

•

•

•

*

of

stockpiles

of

bituminous coal

comments

compilation.

in that

record

up a

The

7,904,585 tons of steel, the highest monthly total since,

statistics

this

in

yearly

V

,

shows

data

last year

^.January output compares with a revised total of 7,717,258 tons
of; ingots and steel for castings during December, 1949, and 8,183,495, tons in .January, 1949.
I
\

vital

included

also

are

and stemming from the walkout of soft coal

desired

other

and

of waning

March, 1949, according to the American Iron and Steel Institute.
s

secur¬

that, financing

fell far short of the total

recorded

in

1948.

r

Economist Foresees

.

Steelmaking furnaces
of 93.6%

average

tons
; ■;

a

of the

were

steel

during January at an
capacity, 99,392,800

operated

industry's

year.

■

,

- t.

*

ss

Rufus

Discussing the coal situation, the February "Monthly Letter" of
The National City Bank of New York states: "The issues and
prin¬
ciples are fundamental.
Assuming that Mr. Lewis, since coal
stocks have been reduced to

point where he feels he has recap¬
tured his bargaining power, will now bargain in good faith, he
should not be allowed again to usurp the function of management
to the extent of saying how
many days a week a given mine is
to be allowed to

a

period, the week ended Feb. 4, soft coal output
tons, the United States Bureau of Mines
reports.
This compares with 7,500,000 tons in the previous week
and 11,385,000 tons in the week ended Feb. 5, 1949.
A

to

20

6,540,000

to

30

Tucker, Economist of
Executives

Association

'

prediction of steel authorities
strike spread.

Speaking

meeting

a

Association
York

New

at

City

Rufus S. Tucker,

General
tors

that, by mid1950, the wardeferred de¬
mand for auto¬

Cok¬

mobiles

being curtailed further.
Further sharp cut¬
coke production will come this week should the

manufacturing operations threatened by

held

in

abeyance
to

prepared

John L.

as

resume

in the coal

Lewis

their contract

the

and

talks

soft

coal

It

was

ready to give the 375,000'
week to comply with a Federal Court back-

striking miners

one

to-work order.

This directive

Saturday under the

Taft-Hartley Act.

Few if any of the strikers chose to obey it on
Monday of the current week.
Some observers said this continuance of the banned
not conclusive evidence that the miners
plan to

was

walkout

ignore the

court

take

order.

They explained

that the

coal

diggers traditionally
day off for February 12—Lewis' birthday as well as Lin¬
In Pittsburgh, some soft coal operators predicted Lewis

a

coln's.
would

take

action

within

the

next

24

hours

or

which

so

would

end the strike.

Meanwhile, freight and
roads

passenger

sharply curtailed
supply of fuel coal.
was

The

Interstate

ordered

week

locomotives
Dec.

1.

It

to

to

Commerce

service

be

one-half

also

to

ordered

a

25%

on

of

"dangerously

on

rail¬

low"

Wednesday of last
using coal-burning

mileage operated

reduction

the

from

total

last
coal-

b

expected

e

might

the

dustry should
than 6,000,000, but
if production fell below 5,000,000
produce
cars

more

and trucks this year, it would

be

principally because of the coal
strike.
Last year's output reached
6,200,000 units.
Notwithstanding

this

dip

in

automobile production, Dr. Tucker

predicted a high degree of eco¬
nomic activity in the first half of
1950 because of still large demand
for

goods and services, the filling

of

demands

on

Wednesday

ago.

result in

11%
A

taken

operated

a

13.5%

reduction in

the nation's passenger service and

cutback in freight service.
late

development in the

coal

strike

was

the

holds

arising

on

from

eco-

the

in' which

ground
of

.

that

pressures provide

germs

:

-

part

com-

communism

tion,

for this condi¬

cure

contemplated by
Four, is to provide
American capital and tech¬
as

Point

nical

know-how

developed

to

under¬

of theworiri.

areas

Such aid, it is argued,

permit these

areas to

would
realize

higher percentage of their
economic

this

potentials. In
they will attain

way

Jos. Stag*

higher living standards and
develop resistance to communist

Wilfred May

Lawrence

blandishments.

The

Kee Bill,
Congress in January, presents tne Administration
It establishes a Commission to supervise the oper¬
ation of Point Four and outlines, in somewhat vague fashion,
the procedures.
introduced

in

point of view.

In its preamble the Bill at once reveals its major
i.e., "to promote the foreign policy of the United States."

purpose,

Further

the Kee Bill, in outlining the qualificatioi s of applicants
aid, states that such qualifications may or should include an
inability to borrow money on reasonable terms elsewhere. Finally,,
the Kee Bill fails entirely to reveal the possible cost of Point Four
along,

for

American

the

to

public., It merely provides that

President

the

Continued

on

page

that

a

action

IIkrket x-ray

graph

investment

An

advisory

service

specializing in internal market analy¬
sis, a scientific approach to market
Our exhaustive analysis
data is not obtainable

forecasting.
of

trading

elsewhere.
to

costs

Market

send

$1

Action.

To

sim¬

cover

Address

WEEKLY

and

information

for

bulletin.

latest
New

other service is

No

C-2.

Dept.

inquirers only.

considerable portion of the

bonus funds may be spent in pay¬

the general economy
cohsumer

soft

theory

as

world-wide

delayed by strikes;
spending of soldier bonus
pointed out, however,

going into new spending.
Such
a development would be good for

mileage

\ nomic

The

rests

combat

He

funds.

The Association of American Railroads said these orders will

locomotive

it

tensions

ilar

ing off debts, such as house and
automobile purchases, rather than

freight

which

to

program

in¬

a

burning
week

imunism.

;

»

Tucker
it

that

and the

trains
the

American

on

the

Commission

passenger

cut

service

conserve

TV

come

said
Rufus S. Tucker

was

issued last

was

WABD

Point Four may be defined

sales

and

Dr.

was

operators

Wednesday.

on

tion

may

Dumont

over

about.

dispute the present week

reported that the Justice Department

an

filled and a
dip in produc¬

f

shortages.

power

will

have been ful¬

continue.
Steelmaking is only slightly affected so
ingot operations retrenchment appears certain with
freight shipments slowing down due to reduced train schedules,
Government action

Mo¬

Corpora¬

tion, predicted

But

and

in

Feb. 14, Dr.
economist of the

impasse

far.

the

on

are

backs in iron and

of

Executives

the paralyzing effects of the coal

Additional blast furnaces have been banked.

ing operations
coal

as

the* Administration's

own

drop
supply

coal

i of

a

mid-1950.

point

unless

war-

demand will end about

deferred

in steelmaking within two weeks
improves quickly, "Steel," national
metalworking magazine, states in its current issue.
That is the
.

threatens

Answer by Mr. Lawrence:

•, v

The

General Motors Corp., tells Trade

Trade

operate."

For the latest

amounted

S.

broadcast

program

proliferate.

Dip in Auto Output

new

Issue"

Question by Mr. May; What is Point Four?

■

the

"'4"

honest currencies.

network, Jan. 31, 1950.

^

i breeding

n

r

j

regarding the sale of securities
through private channels,
United States Treasury financing

•

miners, the steel industry managed to chalk
-month

manufac¬

of

true

and

.

Following is the "testimony" of "expert witness" Joseph
Stagg Lawrence, Vice-President Empire Trust Co. of N. Y.;
under questioning of "counsel" A.
Wilfred May, Executive
Editor of the "Commercial and Financial Chronicleand
facutly member of the New School—on "The Court of Cur¬
rent

data

worldwide

cooperation of the

many

tute

placed

.

present in January

not

of

on

un¬

in keeping with our regular

Additional

"

■

!Despite the. threat

is

the

Program would

threats to investors be abolished;
tariffs be reduced all-around; and foreign governments insti¬

monthly practice.

The electric power companies' coal reserves are for the most

:.:

of

flotations

"December"

ities

higher living standards depend

peoples concerned; the

derwriting houses, banks and in¬
surance companies which particU
pated in the placement of the

ago,

keeping with recent trends in kilowatt output, the electric
industry the past week established a further new all-time

power

list

Presidaiit's

In lieu of "Point Four" proposals it is urged that:
trade and

compilation in¬

detailed

a

the

unnecessary for foreign coun¬
really want American technical ad trice and capital.

who

tries

Besides this five-year compara¬

not

was

influenced in part by a noticeable falling
output as mine walkouts continued to spread.

coal

Monday, Feb. 13 issue of
Chronicle," a complete An¬
nual Summary of Corporate, For¬
eign Government, Farm Loan and
Municipal financing in the United
States for the Year 1949 is given.

industrial pro¬

of total

course

tapering-off

that

contended

is

Department motivation; that it is

In the

"The

Business Failures

it

involve contradiction between investment standards and State

Index

Auto Production

and

Where

Decline From 1948

Commodity Price Index

5

Point Four "in Couit"

Steel Production

The

(709)

since further

credit expansion

would

thereby be impeded.

Tuesday of this week by the New York State Legislature
authorizing Governor Dewey to ration coal throughout the state.
on

*

'!'

With Shearson, Hammill

-tit
•

(Special to The Financial Chronicle)

On Friday, last, the Department of Commerce stated that
corporations in this country paid cash dividends of $6,495,800,000,
the largest amount in history, in 1949.
This was 7% more than

the 1948 dividend payments of $6,093,700,000.
It also disclosed

that dividend payments

LOS ANGELES, CAL.—William
Kraus and
become

Henry J. Tenaglia have

affiliated

with

Shearson,

Hammill & Co., 618 South Spring

in the last month of

194.9 totaled $1,497,400,000, an increase of 14% over the
$1,318,900,000 reported for December, 1948.
The size of the December

Street.
merlv

Mr.
with

Tenaglia

Daniel

for-

was

Reeves

Co.

&

increase in dividend disbursements by one large automobile firm.
was understood that the
company referred to was the General

Motors Corp.

Link With
LOS

Steel

uling

a

producing and fabricating plants this week are sched¬
high rate of manufacturing according to "The Iron Age,"




Harris, Upham

ANGELES,

CALIF.

on

page

37

similar

to

Market Action.

Frank

Link

Sixth

has

joined

the

Mr.

Link

was

of Fairman & Co.

$5.00

staff

Upham & Co., 523 West

Street.

stocks;

mendations;
Mail

of Harris,

1)

Explanatory Manual, "A
New Look Inside The Market"; 2) 1949 weekly and daily graphs,
53 statistical series; 3) Traders Stock Guide,
rating several hun¬
dred

—

4)
5)

to

Supervised

Stock

List,

with

Next four weekly bulletins

Dept. C-2.

and

specific

recom¬

current

graphs.

New inquirers only.

MARKET

for¬

merly in the trading department

Continued

other service is

No

$5.00 Trial Subscription includes:

(Special to The Financial Chronicle)

STEEL OPERATIONS SCHEDULED TO SHOW FURTHER MILD
CONTRACTION THIS WEEK

elsewhere.

and Fairman & Co.

increase, the department revealed, reflected principally the sharp
It

Unique Market X-Ray Graphs improve forecasting, determine
supply and demand, reveal hidden strength or weaKness.
Our
exhaustive analysis of internal market evidence is not available

ACTION

Incorporated
P.

O.

Box

986, G. P. O.

New York 1,

New York

38

6

(710)

THE

COMMERCIAL

In another

Laws—The Frear Bill

his

rent worth

the

of

Frear Bill to equalize obligations

the

week."

The

and

news,

with

discuss it
A
subcom¬

to

tonight.

you

mittee

mittee

been

pany's stock, and insiders cannot

has

ident

In

Truman

bill

the

basic

merits

of

What is the

In

with

in

large

substantial

com¬

the

law

gives

only to

today

vestors

in

listed

securities

certain

specially

regulated

The

holders

listed auction market

went

Committee

simple.

reason was

Within

short

a

time the promoters had borrowed
about

from

$750,000

These

company.

formed

331/3%

their

own

promoters

same

collection

a

charged

their

own

agency

company

to collect payments

its

on

loans.

They caused the loan com¬
panies to loan the bad credit risks
that—in

So

turn—this

agency

plight collect and receive

a

com-

hiission.

deprived

closures

unless

listed

is

or

the

of

com¬

dis¬

security

is

actual—and

specially regulated.

Frear

Bill

would

or

their

facts

are

do

this

need

we

legisla¬

If all that could be said for

it is that it equalizes the

tion
be

of regulation

enough,

applica¬

that would not

The crucial fact
regulation is based

flagged these frauds

outset—and

disclose,

is

far,

the

itself, would

outright

the

which

do

disclosure,

proxy

bud many schemes

away

security holders.

more

have

The

do

decent

the

at

such

fraud

in

as

is

these.

by
in

area

of

it

make

expert,

an

In

the

balance

a

income statement is like

or

musical

a

effects.

same

instrument.

play

He

tune he wants.

any

his

If

real need and affords real protec¬

tion of its investors:

tions.

rather than the income statement.

information

nancial affairs
be

on

pick

(2)

the

voting

statement that

and

the

gives

proxy

chance

a

him

It

gives

chance to get

proposals
and

to

the

vote

the

his

change

for

stockholder

own

before

a

holders

case,

close

buying

trading in the com¬
pany's stock—so that the investor

York City, Feb. 9,

and

reserves

on

the

and

post-war
for

grounds

eve

of

a

of

In

one

merger,

management
shares of their

in

New

as

reserve

were

financial

The

which

plastic

performed

uninitiated,
financial
flection

good,

if

but

we

idea

of

want

the

be

re¬

per

share.

While

a

looks

sound

And

that
do

is

what

the

S.

the

under

THAT

OF

protections. I

com¬

can

by its

think of nothing

important than that invest¬

ment

in

securities
and

the

trols

of

be

current

based

information.

experienced
a

upon

corporate

free hand at the
unregulated

an

con¬

of

a

places

of

business

companies, the
chinery is*- either an
of

corporate

and

PAGET

proxy

of

ma¬

instrument

democracy

or

control—depending

Management Engineers
YORK




CHICAGO

Even

solicited
meagre

holders

auto¬
on its

proxies are
affording even
information to security
many

without

about

what

issues

in Ohio.

of

The list of

business
6)

some

of

mem¬

bers is attached to this statement.
I

might

dealers

for the most part

investment

with

Senator, that these

say,

are

dealers,

the

small

contrasted
underwriting

larger

think

are

to

on

page

31

they

of the

estimable

are

gentlemen of the highest character
and
sincerity.
From all that I
of

the

other

the

of

members

Commission, I have the same

Anything that I say
here that may differ greatly from
the
ideologies expressed in this
high regard.

not of

bill is therefore

personal

a

nature, but of a nature that I think
is

of

be expressed

to

necessary

behalf

the

small

dealers

in
and

corporations.

One of the members is the Ohio

I

Ohio,

Columbus,

Company,
which

of.
However,

President.

am

is

principally in behalf of the
Investment Dealers of Ohio, Inc.,
this

make

We

statement.

interested

are

is

Ohio

because

the

this

in

state of

a

bill

many,

small industries which will
may be affected
by the bill.

My' firm and other members of
our
organization have supplied
capital to these small industries
in

our

This

state.

has

done

been

buying

selling them

and

a

to

securities

Our

customers.

between

financial lifeline link

Ohio's

small

thousands

industries

of

investors

whose savings make up the capital
of

Ohio's smaller corporations
It

to

would

be

our

natural

and

encourage

.investors

a

customers.

At

would feel

it

burden

may

the

our

support

be

a

bonds,

de¬

other

and

debt

broader

term

who

in¬

and

only be

may

creditor of the business and may
be one of its owners.

with

comments

our

respect to the proposed legislation
fall into two main

is there

First,

such

that

That

law?

categories.
real necessity

a

bill

a

be

into

enacted

it accomplish

is, does

the

safeguarding of investors in
unregistered securities?
Secondly, if any necessity for
the legislation does exist, what are
the defects, if any, in the proposed
bill
and
how
may
the bill be
improved

desired

accomplish

to

objectives?
Bill

Let

same

time

we

duty and moral

our

Ohio

Is Unnecessary

first

us

turn

attention

our

the

to

necessity for S. 2408. The
stated objective of this bill is the

supplying" of financial information
shareholders.

to

The

underlying

SEC's

the

of

theme

its

reports supporting

pro¬

to extend its powers and
jurisdiction is that the legislation
now
before you
will make the
posal

financial

books

holders.

of

such

to

information

is

available to shareholders.

now

will

You

available

that

assumes

not

records

and

share¬
In its argument the SEC

corporations

that

note

the

1950

sup¬

plemental report to Congress con¬
cludes

with

this

statement

sum¬

marizing the SEC position: "The
question proposed by the legisla¬
is

tion

whether

not

such

records

should be

maintained, but whether
they should be made available to

the

stockholders—the

the

enterprise."

owners

of

Contrary to the SEC's statement
of

position, it is respectfully sub¬
that, for the most part,
information concerning,

mitted

financial

their corporation
to

already is avail¬

shareholders.

been

advised, reliably,

that

it

is

We

have

we believe,
common
law rule,

the

applied generally by our state
courts, that every shareholder of
a
corporation has the right, by
to

of his

proprietary interest

inspect and examine the books

of such

corporations at all reason-;

times

and

places

for

and

proper purposes.

any

oppose any unneces¬
on

of

not

able

desire

additional protection for
because they are" our

obligation to

holder"

persons

reason

the

and

of

owner

capital stock
part owner of

holders

much

a

able

by

bonds, debentures and stocks from

-firms form

dif¬

are very

is the

a

notes

bentures,

many
or

a

as

it clear that I know Mr. McDonald,

I

of

security

a

securities—thus, "security holder,"

I would also like to make

houses.

of

or common

Generally,

investment dealers doing

sary

Continued

ques¬

members

by

This organization is made up

necessary

today,

answered

the President.

am

our

and

more than
Mr. Boles,

name

corporations

job.
With investments
large enterprises scattered

use.

CRESAP, McCORMICK

I

definition

my

and

therefore

cludes

is Ewing Boles. I am
appearing in behalf of the Invest¬
ment Dealers of Ohio, of which
My

numerous

shareholder, but the term also in¬

full text of Mr. Boles1 state¬
and testimony follows:

ment

you

"security

Ewing Thomas Boles

also

life-time
our

A

Subcommittee.

The

press

the business.

to him

in

fices

DEVELOPMENT

the

proxy

among many holders, geographi¬
cally remote from the central of¬

APPOINTED

put

of the small

Bill.

Frear

is

and

on

assets
million

Ohio,

the

stockholders, I would like

give

preferred

cor-

bus,

C.

more

cratic

NEW

i

s s

tions

of their securi¬

their

HAS BEEN

ap¬

E.

machinery is the guarantee

CARL B. HESS

DIRECTOR

i

as

possible.

as

holder, because they

porations

that I

To

PARTNERSHIP

AND

Exchange
all

position

our

A "shareholder"

Securities

o m 111

are

Committee

ferent.

and

estimate further that investors in

politician

THE

the

the

it

ROBERT KAYE

TO

stockholder

to

would

panies would be fully covered by
all the provisions of the bill. We

reliable

ADMITTED

ac¬

counting principles uniformly
plied and enforced.

We estimate that about 1800

$45

been

what

have

must

we

to

would

at

on

reality rather than of

someone's

com¬

a

MATTHEW L. DEVINE

BEEN

which

SEC.

look good to the

statement
of

has

surgery

may

$6

PLEASED TO ANNOUNCE THAT

HAVE

and 300

know

ties would become covered
ARE

to

C

views

our

regarding the bill, and
referring to the bill as affecting
corporations of $3 million assets

Mr. Paul Rowen, a member

statement

about $19 billions
WE

opposition

over

cus¬

all, because there has
in

appeared

Chairman of the SEC, and I know

expenses.

pany

shares

1950.

his

treat

"Plastic Surgery" on Financial

have

at prices ranging from $3 to
share while they were nego¬
tiating
to
transfer
their
own

by Chairman McDonald before

Association,

war

which

fertile

are

members

their

Writers

his profits are embarrassingly
high and he wants to conceal
them, he can create miscellaneous

economic

under the veil of secrecy.

Officers, directors and con¬
trolling stockholders have to dis¬

Financial

rapid

over-reaching.
The cases I am
going to cite are not typical. On
the contrary, they are rare.
But
they illustrate what can be done

(4)

the

If

Statements

those

the

periods

support
his
proposals
through the proxy machinery.

talk

se¬

of them would

of Insider Abuse

of

like

marked

reasonable

fellow

Cases

Periods

to

*A

unregistered

many

allocations

Some

against proposals submitted.
(3)

in

are

stock¬

tells

is being solicited

proxy

stockholder

.,

so

gives

a

what his

or

up

have been avoided if the require¬
ments
of
the
Frear
Bill
had

applied.

It

for,

011

Most of the fraud cases we

curities, and

fi¬

that trading can
informed basis.

an

holder

its

about

this

•

state

of

the Frear Bill,
the
measure

can

that

(1) It files initial, periodic and

in

extend

our

statements

a

statement

hope that the bill will

the

should

First

Boies

of

this

to

directly and briefly

9th,

Ewing

presented

helpful

is

exchange undertakes the fol¬
lowing obligations for the protec¬

current

Feb.

be

we

cludes

an

on

in
Washington

We believe that if
to

Company, security dealers, Colum¬

clean-up job.
Many ac¬
counting, reporting and trading
practices stop short of fraud but

sheet

Senate

rency

011

corporations and

who is also President of the Ohio

operations show losses, he
can show a profit by running his
losses through the surplus account

a

the

of

Banking and Cur-

on

the

tomers, the shareholders.

to

not,

important

most

we

hands

before

the

need

nip

its

have

the In¬

jurisdiction of

; As I said, thesev cases are not
typical. But they are real; they
are

Subcommittee

over, and having
securities holders.

tion?

Under the law today a company
that
seeks
to
give its security

on behalf of
Dealers of Ohio

$3

Why

Listing

Appearing
vestment

the

or

and 300

Obligations of Exchange

in¬

300

is

protections, and the
need not make these

wquld apply these protections
to all investors in companies hav¬
ing $3,000,000 or more in assets

panies.

financed

public

vestors.

would

public

the

how exten¬

or

It

com¬

by

Before long the company
into
bankruptcy and the

information but greater

more

simplification of information already presented to shareholders.
Holds small companies would suffer under Bill because of
knowledge of their affairs given competitors.

disclosure of insiders transactions

it,

big

with this difference in treatment.

in

or

concludes what is needed is not

systematic

company

as

standing and
Cites defects in Frear Bill and

management to shareholders.

in

The

in¬

out¬

having

investor

interest certain protections which

loan

completely

of SEC

Holds progressive corporations in recent years have in¬
creased efforts to facilitate knowledge of their

of

how

matter

be

company may

pany

investors

all

to

seem¬

of

cases

powers

on Banking
Ohio, attacks proposed
unnecessary and defec¬

of

tive.

mation,

No

sense.

these

we

short, the bill would extend

panies

specially
This

are

to extend

measure

sive may be the public investment

a

it?

need

utility ,and

companies

shares

Investment Dealers

such that they would
not have
happened if the Frear Bill had
applied.
Current reliable infor¬

make

bill.

the

public

or

ingly double standard just doesn't

the

bill, and why do

stockhold¬

of

designated by statute.

the

of

port

the

protections

listed securities

of

investment

sup¬

definitely in

hold

securities

opening state¬

believe

who

tors

I

making the
in

Charta

Magna

before

these

rights. But this Magna Charta
today protects only those inves¬

had the honor

ment

called

ers'

of

Congress.

I

of

behalf of

a

Several promoters instituted

later

Standard

testimony

my

Senate

in

houses

I

short.

stock

number

small

almost

and

letters to both

bill.

company's

The Double

on

endorsed

the

Harry A. McDonald

their

sell

holding

the bill. Pres¬

of

law

the company the right to
profits made by insiders
in short-term trading in the com¬

on

hearings

has

the

information

share.

a

published

bleeding of companies by insiders
are
nothing short of shock¬

a

abuse

prevent

$40

But it did not dis¬

that

ing.

order to

recover

and

Currency

in¬

gives

Com¬

Banking

the

what

of

doing.

are

inside

of

the

of

Senate

idea

In

(5)

There

profits.

some

siders

is

Bill

Frear

like

I'd

has

Ewing Boles appearing before Senate Committee
on

standing and, therefore, no inves¬
tor could figure out his per-share
position.

controlling persons to file infor¬
in their company's securities,

"news of

Let's talk about some

the

cur¬

share and

a

was

company

balance sheet.
close

$16

was

value

the

True,

that the existing doublestandard "just doesn't make sense." Declares most of fraud
cases occur in unregistered securities.
Justifies compulsion for

and to account for short-term

book

Should Be Defeated!

share

a

alone, disregarding all

fixed assets,

listed and unlisted companies, stating

regarding transactions

$2

pay

for their stock when the net

Chairman, Securities and Exchange Commission

corporate officers, directors and

stockholders

own

Thursday, February 16, 1950

Why the Frear Bill

the president of

case

the company was offering to

By HARRY A. McDONALD*

mation

CHRONICLE

they were paying from $3 to $6 a
share, the stock was earning over
$15 a share.

Amending the Securities

SEC Chairman endorses

FINANCIAL

&

Also, the statutes of most states
provide specifically for the right
of examination

of books

and

rec¬

ords and many
annual

states require that
financial reports be sub¬

mitted to shareholders.

This is the

corpo¬

rations, both for the protection of

Continued

on

page

33

Volume

171

Number 4882

From

THE

=

is

&

than

more

coincidental that the

celebrated

purpose

develop just at the time J. Edgar Hoover is
appropriation from Congress for several hundred

additional FBI agents.

But it isi

fact that this consummate poli¬

a

tician is not

arrest.
to

averse

The first paragraph

have depressed securities

would be devoted

las said about the
pressure

group

ships with departments and

agen¬

or

skilled

Government.

•of

cies

of

the

Federal

From
close

knowledge

don't Know, but there was a
passage in
confession read to the British court

that struck my eye. From this
passage it seems
that Fuchs himself was responsible for the dis¬
closure. His father was being transferred from

.

the Allied Zone of

Carlisle Bargeron

Germany to

in the Soviet Zone.

thing brought

Fuchs asked his superiors

another

then

and

bing, another

case.

event, J. Edgar will get his additional

Very likely

men.

edly it is his

restraint that has kept FBI

own

from becoming

bigger octopus than it is.

of

As one editor has
expressed
under which we are
-

it, it is

living, that

steadily towards the police
tainly advancing that
What worries
with

which

its

state to deal with

most is its hold over

members

to

seem

advance

them.

We

more

cer¬

are

out

go

their

of

Congress.
to

way

The alacrity

accommodate

the

accomplishments.

them who

In

opinion there

my

are

too

of

many

"A

the

of

known

mit t

e e

views

on

my

Sen¬

Bill

-2408

the

•

In

say

facts and figures

gotten

were

from

FBI

an

it's not the FBI's fault, its hands
are cited it is more than
likely
All

source.

through

of

its

years

operation the House Un-American Activities Committee
com¬
plained bitterly, and
justifiably, at its treatment by the Executive
branch from the President all the
way down. But the FBI was an
exception,, the committee frequently said.
Always they had got its

cooperation.

You

-President and

wonder how this, could

his

have

been

Attorney General openly hostile.

is that J. Edgar knows how to

play his cards.

with

so

The

the

answer

Some of the juiciest

tidbits against the Administration which
opposition Senators have
picked up were slipped to them by the FBI.
An
crusade

organized group of leftists is just now
conducting an active
against the FBI. I certainly don't want to be
playing their

but

game

given to

it

does

strike

that

me

the agency's steady

consideration

some

growth

and

its

untold harm.

Hundreds of FBI alumni have
gone
industry. The FBI is their alma mater

They keep together through

a

more

be

for

out into key positions of
and J. Edgar their'hero.

fraternity and

are

always ready .to

passing strange that both sides of the political
to take comfort out of the
periodic spy sensations. The
Republicans are tickled because
they reflect upon the Administra¬
tion; they fit in with their
charges the Administration harbors
communists or is too lenient with
fence

ate

seem

the other

to

York

Expand

sations

tend

generally to build

up

The

despair which, the
forever developing. The

The

for

government may

have gotten

into

upon

the government.

The

despair.

to

go

in

for

unstinted

support

Exchange is looking

president, and it is

new

ation
are

M.

for

that

the

two

.

no

To
and

believe

the

SEC's

under

candi¬

the

on

consideration,

one

mission for lucrative private law
practice in Wall Street.
The Big
Board figures that it will be all

with

books
has

and

an

SEC

Senate
with

Bill

2408

the

on

president who

a

inside track with the SEC.

Regulations Are

Initiative

and

Threat

to

Accomplishment

readily

Securities

Act

of

simplify

1933

that

and that

of

by
the

Mr.

Eaton

Senate

before

Sub¬

Committee

on

Washington,

D.
.

planning
for

the

these

we

bungling

American

can
create, the better off
the more national grief they can
political hold.
Verily, we are living in

to

their

With

Mitchum, Tully Co.

(Special to The Financial Chronicle)

LOS
G.

ANGELES,

Gerhart

Tully

&

securities."

of

ness

this

The

Co.,

is

CALIF.—Carl

with

650

Mitchum,

South

Street.




Spring

With J. A.

market

LOS

old

more

Meade
staff

of

F.

J.

White
A.

has

Hogle

West Sixth Street.

joined
Co.,

which

are

honest.

This

is,

of

America

nonsense.

course,

its

owes

industrial

Go.

traded

+

Teletype AT 288

.*

stocks,
the
Big

on

Board in New York, have a
ket value
substantially less

mar¬

words, the market place puts less

report

than

filed

ever

added

ever

with

the

SEC

cent to any stock¬

one

holder's equity. For examples of
the harm that may come to in¬
vestors from reports required
by

mercial and Financial Chronicle."

Stockholders

Do

Not

Yearn

for

Benevolent and

Expensive SEC
Intervention

their

net

Looking over the roster of com¬
panies studied by the SEC in the
preparation of its Supplemental
Report,
the

I

liams

of

The

to

find

Sherwin-Wil¬

Co., of which I have been

director for

tury.

interested

was

name

This

quarter of a cen¬
Cleveland institution,

most successful paint manufactur¬

Its financial

policies

are

servative, and its securities
the

bluechip class.

liams has

been

con¬

are

in

Sherwin-Wil¬

frequently impor¬

tuned by New York Stock Ex¬
change houses to list its securities
on

the Big

declined.

ferred

for

and

tools

the

on

builder

and

the

In

facilities

manufacturing

the

one

physical
of

these

companies,

of vital

other

than
other

machine

the maker

of

important heavy trucks.
Suppose that some merchant of
securities considered that National
Acme
were

and

to

White

Motor

stocks

bargains, and decided

blocks

of

them

investors.

for

on

to buy

redistribution

If, in the

the securities dealer's

these

of

process

buying, the

securities

ad¬

vanced

slightly, as doubtless
happen, the SEC would
promptly accuse the dealer of
committing a crime and would
threaten him with imprisonment.
would

SEC

Powers

Need

Rather Than

The

SEC

has

Curtailment

Extension

cited

the

piece¬

meal fashion in which Federal

se¬

curities

up,

regulation

was

built

from 1933 through 1940, as
son

why Senate Bill 2408

be adopted.
My own
this is a reason for

Continued

a

rea¬

should

view is that
a
complete
on

page

38

Board,: but has always
Despite the SEC's ar¬

stockholders

of

this

eastern
harness

great

Cleveland company are not yearn¬

ing

value

no

great

assets.

a

a

which has been in business almost
85 years, is the world's
er.

quick

properties

market

the

benevolent,

and

ex-

club

racing
Common

Price

undersigned, or
or

dealer

•1S

a

Stock

$1 Per shore

Prospectus tuay

beobtatorfhou>

from

^

participati^

member-of the Na

Securities

De^'ecrs'

such persons

Prospectus

may

e

.,

=!

^ issue, who :
al Association
in States ?«

qualified to act
.
which the

:

i

est*
***>**1.
<=

teluer-* co.

Established 1894
RHODES-HAVERTY BLDG.

and

Their

might to the men of
management, no matter how much
the SEC may malign them, and no

on-Humphrey Company

the

507

con¬

Motor

CALIF.—

&

on

Cleveland in¬

White

corporate officials be

Hogle & Co.

ANGELES,

illus¬

today. As examples,

■which

The Robins

is

long listed

of

(Special to The Financial Chronicle)

spurious-

contention

can

LOCAL STOCKS

times that defy the
imagination.

the

trated by the give-away prices at
which many stocks

CORPORATE BONDS

be;

of

One of the SEC's claims for the

STATE AND MUNICIPAL BONDS

people the planners

receive

statement.

proxy

proposed legislation is that it may
"spur
legitimate
investment
in

adversity

appear

the fighter

on

to

instead

SEC Regulations Have Depressed
Securities Values

deeper

the part of the
government, .the more:
must have by that
government. The more

planners

cause,

bill

SEC-prescribed

■,

more

shareholder

preferred

ten-dollar

"

The

willing to

am

dustrials, National Acme Co.

dent desire to dictate to the Sher¬

*Statement

have

I

than $100,000 in¬

each

only by registration with

win-Williams management, the 5,000
satisfied
common
and
pre¬

Banking and Currency,
C., Feb. 10, 1950

and

more

that

sider two

stockholders,

for

deliberation

per

legal

than to defraud their

As Senator Paul Doug-

been, under

decade.

to

measures

outside

national exchanges and registered
with the SEC are
selling in the

largest and

a

expense

the

assume that the of¬
ficers and directors of all corpor¬
ations have no other aim in life

would have to

the

of the SEC who left the Com¬

$10,
the

equity

original

supplemental reports

Bill

consider¬

$75,000-a-year post
James J. Caffrey and Edmond
Hanrahan, both former Chair¬

committee

an

us

Stock

coincidence

a

no

mendous,- assiduous propaganda^
urging

the

dates under most active

have

awful mess, there may be
rhyme or reason to its current conduct—but who can
do better.
The only thing we can do is
to go on despairing; there is a tre¬
us

a

the

leftist columnists and
commentators are
whole leftist movement
has, of course, thrived in this atmosphere.
Theirs has been a
steadily organized drive to make people feel

helpless, to become utterly dependent

certainly

require addi¬

tional personnel and funds.

its

and

Congress of

national

a

addi¬

the

arms

wel¬

understandable as its
recent
decision to
postpone in¬
definitely the presentation to the

sen¬

that would

of the Big
the SEC, I should like to refer
you
business-hungry
to an illuminating
analysis of the
brokers, as well as the powerful
legislation
by
James
law firms and publicity agencies proposed
Murray in the July 4, 1946 "Com¬
that act as their master minds.

as

give support to

spending to "contain" communism.

and

for

concern

venture

therefore

has

when

year

The

of

alone I estimate at approxi¬

wager

a

1934.

The SEC's eagerness for passage
of this Bill to extend its powers is

hand, the Administration, the New Dealers and
leftists generally appear not the
slightest annoyed. The sensations
focus attention on the atomic
and hydrogen bombs, make the
peo¬
ple more frightened about Russia and
therefore

the Administration's

2408

blessing

Board

them.

On

Bill

of regu¬

mass

change Act of

tional listings that most

set

than

open

a

."

Congress, it would seem singularly
inappropriate for the SEC to be
embarking on a new regulatory

amend

would come its way on passage of
the proposed legislation.
So Sen¬

men

pitch in for the dear old school.
It is

should

manifest ability

with

come

under
.

the taxpayer and economy in
gov¬
ernment constitute the keynote of

Big

tied.- If
any

;•

this

harboring communists in the
variably go out of his way to
they

free

would

Com¬

sheer

are

this

part.

shareholder

lations.

and

would

proxy
statement
unbelievable total of

the

in

even

suffocated

this

Hamstringing Activities of the the SEC

Board

in

have

we

like to present

kept

in¬

it

as

a -

89 pages, which
assuredly not one
in
a
hundred read

to

The New York Stock Exchange
has been operating at a loss. The

government but the accuser will

if

.

would

Also, the FBI occupies an anomalous position in the national
politics. You are frequently
hearing charges that Mr. Truman is

afraid of it.

.

out, government

SEC."-'-

are

".

out

resultant
to

ran

volved

the, New

Exchange

cluded,

The

mately

appropriate title
Proposal to Increase

Business

Stock

others, it always

wants more, and more, and more."
* as
Senator
Douglas
con¬

And

to work

procedure satisfactory to the SEC.

country

I
today

more

would be

the

in

disappear. Enthusiasm, in¬
itiative, accomplishment would be

some

labeled "A Proposal to Safeguard
Investors in Unregistered Securi¬
A

with the

And

imposing bat¬
legal and

an

outside

talent,

work

in¬

The SEC's Supplemental Report
Jan. 9, 1950,* like the original

ties."

accounting

costly

them

its

Renort of June 19, 1946, is artfully

to praise it, is not altogether because of their
admiration

agency,

for

must

we

in the continual enlargement of the FBI.

way

me

tragedy of the conditions

a

technique

of

Com mission

Securities Ex¬

an

tery

since

to

Cyrus S. Eaton

the

sonnel, but also

stockholder

ate

he would have gotten them
anyhow. Congress seldom denies him
anything he asks for. His appropriations go through untouched
while those of
practically every other branch of the government
are cut or
tampered with by either the House or Senate. Undoubt¬
even

Exchange

in

are

the

the

subsidiary.
It took six months of
agonizing work on the part not
only of the company's own per¬

persistent

more

is

plification of the company's capi¬
tal structure by a union of the
company with its wholly owned

expen¬

getting what it wants.

-common

exchange and
registered
with

This

company. Four years ago, we
undertook to bring about a sim¬

bureaucrats, "No

is

company,
listed on a

are

stock

they got all the
money they want, approval of all
their plans and authority to
carry

should

The superiors
background, apparently for the

on

Securities

15 years ago,

if this would change his status.

got to thinking about this man's

of

the
and

ception

professorate

a

my

personal

securities

national

ore

values, thus injuring investors.

more

Cleveland

100-year old
Cleveland-Cliffs Iron Co., the na¬
tion's
leading independent iron

Denies

benefited by

are

As industrialist, banker and
farmer, I have constant relation¬

Fuchs's

;

threat to initiative and accomplishment.
or

whose

of the Com¬

director of another

a

venerable

SEC.

bureaucratic intervention,; and contends SEC regulations

sive

telling

I

as

also

am

7

their behalf.

on

therefore

industrialist, contending proposed Frear bill to
of Securities and Exchange Commission is for
of boosting stock exchange business, attacks SEC

holders of unlisted securities desire

of the arrest and the second one
would give credit to J. Edgar for
bringing it
abcut. The FBI had first
tipped off the British,
.so the stories went, and had been working with
them for months.
Fuchs, of course, had been
•operating since 1945.

t

In any

I

powers

regulations

to

making as much capital
out of the case as
possible.
With his
usual
adeptness he was right
there prominently in the first stories of Fuchs's

sensational spy

mission

Prominent
no

trying to get

Gne

pensive, intervention

By CYRUS S, EATON*

enlarge

time,

(711)

Industrialist and Banker, Cleveland, Ohio

Fuchs spy case should

first

CHRONICLE

Extension of SEC Power

the News

By CARLISLE BARGERON

probably
an

FINANCIAL

Frear Bill Is Unwarranted

Washington

Ahead
It

COMMERCIAL

ATLANTA

1,

GEORGIA

Long Distance 421

A7Br.oJwoY.HewT..k4,M-^

COMMERCIAL

THE

(712)

8

&

FINANCIAL

Thursday, February 16, 1950

CHRONICLE

tial reversal of the District Court
decision

Anti-Trust Suits
And Investment Values

particularly pro¬
In the course
week, the stock rather
lost two points or 4.8%.

slowly
This

PART III—Current Anti-Trust Cases

Mr. Vultee states most current suits were initiated prewar

direction" since. Cites du Pont action as broad¬
ening scope of attack on heretofore legal relationships. Demon¬
strates unimportant effect on market action of the shares of the
prosecuted companies.
in progress

now

for the most part, suits which
were initiated before the war.
A

major

nearing completion is
theone against

case

the Aluminum

Company of
America.

in

Progress
this

suit

has

changed

di¬

rection
eral

sev¬

mate

ulti¬

outcome

is problemati¬
cal. Before the

the

war,
pany

sole
of
Howard

F.

Vultee

war,

brought
though

was

virgin alu¬

minum

ingot,
during

producers
the industry.

new

into
Alcoa

the

producer

but

the

com¬

now

were

Al¬

about

owns

half of the privately-owned ingot

capacity, the Department of Jus¬
tice persists in its efforts to bring
about a break-up.
Another

suit

against

the

is

the

before

General

and

This suit, instituted

several

other

A

try.

discussion

brief

of

this

suit follows below:
Two

suits instituted
this year were against the Ameri¬
can
Telephone
and
Telegraph
Company and the du Pont in¬
important

In

terests.

ceedings,
the

the

the

Telephone

government

separation

the

of

pro¬

seeks

Western

Electric Company from its parent,

the American Telephone and Tele¬

graph Company, and its break-up
into
three
separate,
competing
Units.

Western

Electric, as the
principal manufacturer of tele¬
phone equipment for the Bell
System, is alleged to be a trust
which is fostered by its ownership

The du Pont suit also has

tions.

legal,

perfectly

could

some

brought
against E. I. du Pont de Nemours
& Company, General Motors Cor¬
poration, United States Rubber
was

Company, several subsidiary com¬
panies, and over 100 individuals
including leading members of the

be

subject

suit

Atlantic

and

against

the

Pacific

Tea

Company

attack on

big

this
suit
price fix¬
few com¬

is the latest
business.
While
hinges on a question of
ing, we have included a

31,
23,

1937

(Anti-trust

6,

1941
1945

(Lower

(Alcoa's pet'n

Mar 12,

(Circuit

Court

Mar

31,

1947

Sep

24,

1948- (Govt, pet'n

Dec

31,

1948

filed).

_

decision)

decision)

for

^Fluctuation

3-for-l

over

subject of anti-trust suits.

Aluminum

The

has

America

of

Company

been the
our domes¬
industry.
It was,

aluminum

tic

quite probable that it
would eventually be subject to
anti-trust action. The suit against

therefore,

Alcoa

on

United

the

in

filed

was

April 23, 1937

in the domestic alu¬
industry were definitely

completely
rejected
in
a
Sweeping decision by Judge Fran¬
cis G.
Caffey on Oct. 6, 1941.
Judge Caffey's remarks were ex¬
ceedingly strong when he said,
"It appears without contradiction
that there exists in this country
adequate supplies of bauxite and

Water
,.

.

so

bauxite and
appears
way

available to

power,

Anyone

that

anyone.

desiring needs only

water
no

one

power,

and

it

stands in the

and that nothing ever stood

in the way, with the exception of




privately

eral maneuvers,

determination.

final

Finally, on
government

Sept.

24,

1948,

asked

the

District Court to force

the

Alcoa to reduce its power and

size

divestiture of properties. The
petition did not propose the sep¬
aration of any specific properties;
instead it asked that a plan
be
submitted by Alcoa.
The Alcoa
a

and

petitions

government

consolidated

District

States

Since

Court decision in

market

the

stock turned in

ing

and

in

the aluminum

of

all

wire, cable,

similar items.
The
impact of the filing of the suit on
the market price of Alcoa Com¬
tubing

and

Stock

in

reflected

was

a

decline in three days from
In the following table

120.

157 to

these

been adjusted
for the three-for-one split in 1943

prices

have

the

and

prices rounded to save
The market reaction to the

space.

filing of this suit

among

was

in the cases studied.

tAlcoa

Im¬

Index of

D-J

D-J

Market

pact

Alcoa

Ind.

Ind.

Price

%

Stock

Avg.

Avg.

—

*52 to 40

100

——.

100%

103 to 78

178.54

99

4.2

78 to 75

125.83

70

—

—

88

4.8

81 to 77

157.88

138

178.36

99

9.0

108 to 99

179.28

100

177.30

99

70
*55 to 50

179.90

—23.6
—

96

save

(after adjustment for the stock
split) to a pricb of 49 at the lat¬

showing an up-to-date com¬
parison between the thirty listed

Jones

five

Averages

dustrial

used

tation

Bureau

It

indicated.

ran

out

As

might be expected, the de¬
was
appealed to the Su¬
preme Court, but four of the Jus¬
tices disqualified themselves and
cision

it

referred

was

States
for

Circuit

the

to

Court

Second

the
of

District.

Judge Caffey had been
sive

in

Court

his

of

decision,

Appeals

on

United

Appeals
While

so

conclu¬

the

Circuit

March

12,

eventual

view

proceeding.
of

of

Front

However,

refusal

the company,

it would appear that
Alcoa
with approximately onehalf
of
the
present
privatelyowned capacity may not be sub¬
ject to separation.

company

Electric

General

Company,
Westinghouse Electric and Manu¬
facturing Company, Corning Glass
Works

and

nine

other

corpora¬

tions.

The complaint charged

group

with entering into

a

the

com¬

bination to fix prices, restrict pro¬
duction

artificially

control

and

Corning Glass,

according to
"have
monopolized the manufacture and
sale of glass bulbs and have se-r
cured
monopolistic control over
the Department of Justice,

frosted

glass bulbs."
It is alsq
charged that General Electric and
Westinghouse, through patent lif
censing
agreements,
controlled
90%
of all incandescent lamps
made in the United States at that

time.
On

the

It affirmed

Stock market reaction to this par¬

handed

that

Pine

30

19,

Parker

Redpath, 729 Fifteenth Street, N.
W., Washington 5, D. C.
Equipment Corporation

Aro

the

of

New

down

a

defendants.
certain

Jersey
decision against
The Court held

activities

fendants constituted

a

Continued

of

the

de^-

violation of
on

page

30

Co.,

&

Street,

Los

634 South
Angeles 14,

Calif.

Airline

Seaboard

Railroad

Co.

—Study—Vilas & Hickey, 49 Wall
Street, New York 5, N. Y.

Haven—Circular—Day, Stod¬
&

Williams, 95 Elm

Street,

New Haven 6, Conn.

&

—

Suburban

Propane Gas Corp.—

Analysis —G. A. Saxton & Co.,
Inc., 70 Pine Street, New York 5,
N. Y.

Analysis and study—Stanley Hel¬
&

ler

30 Pine
York 5, N. Y.

Street,

Co.,

Capital Airlines

New

Circular

—

—

Floyd D. Cerf Jr. Co., 120 South
La Salle Street, Chicago 3, 111.
Also available

International

Sunshine

is

circular

a

Cellucotton

Co.,

on

Brokdw & Co., 711

Ana¬

York 5,
_;

.

Changes

—

dealers —Friedman,

for

—

New

Announces

Bulletin

Inc.

Management Firm

Prod¬

Consolidated Dearborn Corp.

St. Charles St.,

McCormick and Paget,
management engineers, have an¬
Cresap,

that Matthew L. Devine

nounced

Lqui£. 1, Mo.

and

Food Fair Stores, Inc.—Analysis
Cofcu & Co., 1 Wall Street, New

Yorkf 5,

Wall Street,

1

N. Y.

ucts Go.

St.

Biscuits,

lytical brochure—A. M. Kidder &

N. Y.

Robert

Kaye have been ad¬

mitted to general partnership and
that

Carl

B.

has

Hess

been

ap¬

pointed to the newly-created post
of Director of Development.

Greer

Hydraulics

analysis
State

—

Descriptive
Co., 148

&

Raymond

—

Street, Boston 9, Mass.

International Cellucotton
ucts

Co.

Recent

—

bulletin

Prod¬
—

Hill

Richards & Co., 621 South Spring

Street, Los Angeles 14, Calif.
Gas Light

Laclede

MO.

'

Street, St. Louis 2,
.

vestment

& Co., 300

D. Jones

lar—Edward

North Fourth

Graph—An

in¬

advisory service special¬

izing in internal market analysis;
graphs

designed

are

improve

to

forecasting, determine supply and

reveal

demand,

hidden

weakness—Send

or

$1

strength
infor¬

for

mation and latest bulletin
for

trial

Mr.

Kaye
since

has been with the
1946.;
Prior to that

time he

was

for

National

the

ment

Director of Research
Office

Manage¬

Association and before that

directed management analysis for
both private industry and various
also

agencies.
industrial

taught

He

has

manage¬

at

the

Wharton

Business

and

elsewhere.

ment

of

School

Mr. Devine, who heads the Chi¬

:

X-Ray

;

firm

government

Co.—Circu¬

subscription

or

$5.00

including

explanatory manual, 1949 weekly
and daily graphs, traders' stock

guide
rating
several
hundred
stocks, supervised stock list with
specific recommendations, and
next four weekly bulletins and

cago

office,

1947

from

came

the

to the

firm in

management

re¬

search group of

General Electric's
During
Mr. Devine, serving with

Executive
the

war

Department.

the rank of Colonel, was Chief of

Control

for

Southwest

ceived

the

Army
where

Pacifib

in

the

he

re¬

the

Legion of Merit for
development of management

the

controls in that area.

Mr. Hess has recently joined the
organization after more than 15
years of diversified experience in
manufacturing and development
work.
He will be responsible for

current graphs—Dept. C-2, Market

integrating the firm's current and

Action, Inc., P. O. Box 986, G.P.O.,
New York 1, N. Y.

new

Mexican

dum

Eagle

Oil—Memoran¬

business activities.

J. P. Morgan
At

the

Co. Elects
meeting of the

Zippin & Company, 208
South La Salle Street, Chicago 4.

board of directors of J. P. Morgan

111.

& Co. Incorporated,

—

gan

'New

England

Co.-r-€pecial
&

Public

Service

survey—Ira

Co., Ill Broadway, New York

-Niagara
—

Analysis

II

was

Treasurer.

—

Power

Eastman,

John P. Mor¬
appointed as Assistant
\"

■

\

With Paine, Webber Co.
(Special

Mohawk

regular

Haupt

Federal

1949,

Court

Spring

New

Auchincloss,

—

Wurlitzer Co.—Circu¬

Rudolph

lar— Morgan

Street,

•

Affiliated Gas Equipment—Cir¬
cular

Office

Security Insurance Company of

♦

6, N. Y.
Jan.

domestic producer had been until
1940 a monopoly in the virgin alu¬

Judge Caffey in all other respects.

Co.,

& Co., 10 Post
Square, Boston 9, Mass.

5, N. Y.

-Market

has been
the
principal defendant in an anti¬
trust
suit
involving the incan¬
descent lamp industry.
The suit
was filed on Jan. 27,
1941 against
the

&

Riverside Cement Co.—Analysis
—Lerner

dard

General Electric Company
This

Quo¬

Street, New York 4, N. Y.

*

Can

dissolve

to

120

industrial

in the National

Puts and Calls—Booklet—Filer,

as

any

American

the

Court's

trict

District

ingot market.

speculate

outcome

proceeding when a shift to ap¬
proximately half of domestic tin
can
capacity resulted in the Dis¬

1945 reversed the decision in part
held that Alcoa as the sole

and

minum

previous.

anti-trust
in

is substantially
point where it was

hazardous to

is

the

to

thirty-

Averages, both as
to yield and market performance
over
an
eleven-year period—Na¬
tional Quotation Bureau, Inc., 46

Average
same

the

and

over-the-counter

stocks

The Dow-Jones In¬

year-end.

business of independent bulb
manufacturers. .General
Electric

1909."

in

51

from

—

—

Chicago 3, 111.

the

the

space.

patents, the last of which

decline

net

moderate

Brothers Company

A. G. Becker & Co.,
South La Salle Street,

Analysis
Inc.,

industrial stocks used in the Dow-

table, alcoa common has shown a

the

pronounced reactions of any

more

were

Summary and opinion —
Co., 61 Broadway,
N. Y.

York 6,

New

let

psychology

the 12-year period covered by

charged that the

also

sold more than 90% of
the aluminum sheet and virtually

shortages

and market

changed, the stock declined some¬
what faster than the Average. In

years

company

the

As

1946.

overcome

the

It

Re¬

metal, the stock
over $90 a share

high of

a

12

States.

the Dow-

Average.

substitute

a

reached

at

the

mo¬

a

common

Niagara Mohawk Power Corpo¬
ration—

Ricliman
Bank

on

Over-the-Counter Index—Book¬

outstand¬

more

than

Industrial

United

in

a

performance

factured at that time 100% of the

aluminum

1945 that

Alcoa's

for

—

Stocks in Buying Zone.

Circuit

the

of

Analyses

—

way, New York 5, N. Y.
Also available is data

tes¬

nopoly in ingot capacity existed,

est

virgin

time

study of International Business

Laird, Bissell & Meeds, 120 Broad¬

were

for hearing and

the

Southern District of New
York. The government's petition
charged that the company and its
wholly owned subsidiaries manu¬
Court,

in 1943; prices rounded to
immediate period following the event

monopoly

the

The government, in sev¬
sought to delay a

dustry.

and

minum

of

flecting the pent-up demand for
aluminum, both as a basic metal

always
dominant company in

split

and

less

or

controlled

or

operated capacity in the ingot and
fabricating segments of the in¬

Jones

Aluminum Company of America

*41 to 39

government's charges that
the company exercised on illegal

it owned

9, 1'949.
The petitions are now
awaiting disposition bv the Court.

for dismissal)

The

petition presented data to

that

Stocks

Insurance

1947.

into a number of component
parts.
The suit, however, will
probably take a long time, but
public interest in this case should
be much greater, as the results of
the suit may have a bearing on
food prices in general, and has
tended to focus attention on the

it

because

pany

49

tAdjusted

Alcoa's

31,

New York

a

*40 to 38

for divestment)

March

a

Machines Corp.

E. F. Hutton &

break-up of the com¬

aimed at

51

suit

on

determination

Schmidt

1936
Court

did

analysis of 19 New York
City Bank Stocks available Jan.
16—Laird, Bissell & Meeds, 120
Broadway, New York 5, N. Y.

timony with respect to them was

suit

the

on

Index of

Apr

it

Stocks—Year-end compa¬

Bank

rison and

taken between March 28 and Nov.

.

OCt

which

firms mentioned will be pleased
the following literature:

send interested parties

to

is

ments

Aluminum Co. of America

Dec

a

by

recent

The

Great

23.6%

serious implica¬

suit

The

scope

to attack.

mon

by the Telephone Company.
innovations with

of the anti-trust
laws, many relationships, which
heretofore have appeared to be
the

ing

de¬

in
1941, is against an alleged trust
in the incandescent lamp indus¬

for

one-half

courts

Company

ask

show

panies involved. Should the gov¬
ernment be successful in broaden¬

It permitted

to

the

Electric

fendants.

for both sides.

Alcoa

fore,

times

the

and

was
broadened to include
personal investments of the
du Pont family as well
as the
security investments of the com¬

It is understood that the

position of new capacity built dur¬
ing the war. The District Court

open

This suit, there¬

family.

du Pont

Recommendations and Literature

disso¬

a

Rather it

was
left with the job of deter¬
mining how to end the ingot mo¬
nopoly.
A year later in April,
1946, the District Court entered
the judgment which left the door

and

have "changed

Anti-trust suits

not ordered.

suggested to wait for the dis¬

was

New York

Vice-President, The Marine Midland Trust Company of

largely because

was

Dealer-Broker Investment

/

a

was

lution

By HOWARD F. VULTEE

are,

not

was

nounced, however.
of about

Corp.

Dillon

&

15 Broad Street, New York
5, N. Y.
Co.,

Also available is a leaflet of the

Book-of-the-Month Club, Inc. and

to

The

Financial Chronicle)

-

ILL. —Thomas
J.
now
associated
with.

CHICAGO,
Welsh

is

Paine, Webber, Jackson & Curtis,
209 South La Salle Street.
He
was

formerly

Co. and H. M.

with Goodbody &
Byllesby & Co.

,

Volume

171

Number 4882

THE

1938, except during 1945 when he

Landsberg Chairman

was

of N. Y. Curb Exch.
Landsberg,/
the

of

Vice-

board

of

gov-

ernors( of the New York Curb
Exchange for the past year and a
member

of

that

securi¬

ties

market

since

1917,
elected

was

Chairman

of

the

board

at

the

annual

election
E

held

regular

by

change

x

members,
Francis
Trus-

Adams

low,

Landsberg

night.

Edward C.

of

governor

Mr.

Exchange for the past

dates back to 1919 when he

career

became
the
Mr.

Baird

from

Cushing
since

served

1943

to

has

a

as

1949,

been

of

the

ernors, Mr.

the

class

new

McCarthy, is

B

Lynch,

partner

of

Pierce, Fenner

as

spending 22
and

finance,

the

He has

been associated

latter

years

in in¬

Mr.

Bench

pointed

New

York

City

&

With Barrett Herrick Co.

office

an-

nounced

last

Elected to

Chairman.

(Special

to

LOS

The

Financial

ANGELES,
S.

Garraway

CALIF.
has

LOS
—

for

governor

one

Jackson

and

623

Co.

Morse

Bogardus, Frost & Ban¬

ning.

Co.,

class
to fill

a

year

instead of

66

hiding it in the

"I look at

a

for wages..."

good before I get

who works for wages, as

think it's

because I work for

time, I've

be

seen

of them. In my

one

why I've got

H.

Van

PARLIN, N. J.

Co.,

"A

of

Keegan,
&

Masterson

All will be

66

£

nonmember partners of Curb

if

tor

member firms.

McCormick, first Presi¬
Curb Exchange after

w

myseli...

the

cate

trustee of the Exchange

"

the

Curb

for

bring

possibly
takes

program

up

on

and edu¬

his personal

can,
an

importance

nothing else.

Years ago, my wife and I decided to starts

that

we

beyond

always put

our emergency re¬

could spare.

We invest these

York Stock
are
on

a

Exchange This

bringing

on

the New

year our

stocks

us a return of better than

the average."

number of years.

three

The

lives
1919

A

gov¬

as

the

the Street in

for

runner

a

outdoor

in

partnership

was

Market

in

stocks

admitted to

Brothers

Borg

BOTH have made investment in income

specialist

a

Curb

He

Broad Street.

WAYNE, MICH.

business.

securities

the

to

Halden entered

Mr.

on

class

new

have devoted most of their

ernors

in

-producing common

apart of theirfamilies'financialprograms

1922 and obtained his Curb mem¬

bership that
an

same

Investment Facts

He was

year.

.

.

independent broker from 1926

until

when

1947,

he

became

a

partner in H. L. Buchanan & Co.
Mr. Jackson became a specialist
the Curb Exchange in 1925 and

on

acquired membership on the New
York
Stock
Exchange in 1929.
Since 1934, he acted as a specialist
on the trading floor of the Curb
Exchange.
Mr.

the

Klee, who

was a

member of

department

loan

of

S.

W.

Straus & Co. from 1920 until 1929,
became
York

a

member

Curb

and

Between

in

1929.

he

functioned

commission

of

the

as

1930
ari

broker,

and

1935

new

edition of the booklet "Investment Facts About Common

Stocks and Cash Dividends" shows the

following

yield of all dividend-paying

common

Stock

since 1940, based

Exchange for each

year

stocks

.

and your

income

of years of sustained dividend payment, amount of
payment in

cash

1949, market price and rate of return. This information is tabu¬

on

the New York

lated for each of the stocks comprising the
composite. The booklet

on

year-end prices.

average

may

be obtained locally at Member Firms' offices

to the New York Stock
1940

1941

1942

1943

1944

1945

1946

1947

1948

1949

6.1%

9.3%

7.8%

6.1%

5.0%

3.6%

4.8%

6.3%

7.8%

7.0%

Of interest to investors is

a new

feature of this edition—a

Yields change as market prices and dividends

for 20 to 102

years.

This composite is based

on

Invest

simple,

becoming

Exchange.

a

Member Firm of the

a

latter year.

Mr. Klee has been a

fipecialist

the Curb floor since




change. Informed

may

at offices of Member Firms of the

number

wisely... through

by writing

investors keep this in mind, as they do the
many other factors
that affect investment values. Current
yields and other factual
information needed in evaluating any
security

statistical composite of 281 stocks which have
paid cash dividends
every year

or

Exchange.

independent

partner in Klee & Heilbron in the

on

A

New

Stock Exchanges

as

feet—

...

most of the Ex¬

of

treasurer

he

dividend-paying stocks listed

change's standing committees and
was

two

regularly where they will work most
profitably for us
a good part of them in

of the intervening years.
on

himself,

own

dollars

Landsberg was first elected to the
governing board back in 1923 and
has been an active governor dur¬
He has served

his

'fund for the future.' We have

serves

days of the old outdoor New York
Curb
Market
Association,
Mr.

many

as

aside every dollar

A member of the Curb since the

ing

well

second to

a

gratuity fund.

as

financial

it moved indoors in 1921, was re¬
a

on

wonderful youngsters to

from

elected

who is in business for

has to stand

without benefit of social
security or unem¬
ployment insurance. And when he has four

governors

new

man

I am,

were

Class B governors are
associate
member

reelected.

R.

stock¬

a

Clark,

of

except Mr. Van Keegan, who was

of

ex¬

things. I believe

many new

holders stake in it right now."

elected class B governors for three

E.

life¬

G. Becker & Co.; and

of A.

Benjamin

dent

some¬

simply

U.S. business grow and

Dodge & Co.; Michael W. Mc¬
Carthy, of Merrill Lynch, Pierce,
Fenner & Beane; Irving H. Sher¬

and

Personally, I

thing about industrial companies,

an

any¬

stock¬

a

mighty good thing. I know

a

in its future. That's

chosen

I do, is

holder in American companies.

a

Cushing and Mr. Werle were
All are regular mem¬

years.

To

bowl.

sugar

"Maybe you're surprised to find that
one

reelected.

C.

use.

interested.

Mr.

Frank

Mr.

invest any of my dollars in its stock. Divi-4

bers of the Curb Exchange.

man,

Street.

carefully before I

company

dend payments have to be

A

will

Klee

Bench,

Spring

Hammill & Co.-

pand and develop

C.

Wright have become

previously with Shear-

was

serving for the first time while

Edward

H.

South

son,

Mr. Halden, Mr.

Mr.

William

CAL.—Ralph

Timothy Wright and

affiliated with E. F. Hutton & Co.,

merlv with Shearson, Hammill &
and

ANGELES,

C. Morse, Jr.,

become

former Vice-Chairman of the Ex¬

unexpired term.

for several years.

Beane

(Special to The Financial Chronicle)

Chronicle)

associated with Shields & Co., 510
West Sixth Street.
He was for-

Andrew
&

named

Sixth

formerly
Lynch, Pierce, Fen¬

make my money produce for
me, I invest it

Co.; David S. Jackson;
Joseph Klee and Mr. Werle, the

was

West
was

"I've always had the habit of thrift, and

chanan &

change,

507

Rains

Three Join Hutton Staff
With Shields & Co.

three-

serve

Josephthal

&

ner

Co.,

Mr.

Merrill

saving something ahead for future

Cushing, of W. E. Burnet & Co.;
Charles W. Halden, of H. L. Bu¬

of

&

Street.

terms as class A governors
Exchange were Carl F.

retiring

Hogle
with

the

Baird,

CAL.—Robert

have become connected with J. A.

was

succeeds

proposed by the
nominating committee was elected
year

Troen¬

Mr. Whittelsey in the past
with National Securities and

Chairman.

as

ANGELES,

Fund of North America.

CHICAGO,
ILL. —Robert
L.
Harvey is now with Barrett Her¬
rick & Co., Inc.

ap¬

LOS

Wilshire Boule-

Co., 6367

Hogle

D. Cathcart and William D. Rains

Research Corp. and Independence

that

was

CALIF. —
Whittelsey has become

bard.

David

Beane.

with

dle

has

was
admitted to partnership in
Clark, Dodge & Co. in 1947.
Mr.
Van Keegan has been a class B
governor since 1947.

gov¬

The entire slate

to office.

since

He

9

(Special to The Financial Chronicle)

ANGELES,
G.

Werle, who had served

three terms

of

firm.

(Special to The Financial Chronicle)

firm since 1940, when he

LOS

&

European repre¬

that

of

partner

a

After

Merrill

&

Becker

prior to 1939

dustry

special¬

a

G.

Two With J. A.

(Special to The Financial Chronicle)

year.

Mr.
board

ist in systems work and assistant

managing

Whittelsey With Troendle

been

associated with Victor H.

governor

while

on

A.

has

Stuart

been

1946.

One

with

who

Co. since 1923, spent the 12 years
sentative

a

page boy on the floor of
New York Stock Exchange.

Sherman,

associated

His Wall Street

years.

partner in

(713)

the

Exchange,
Landsberg

Mr.

past three

a

CHRONICLE

Presi¬

dent
Mortimer

a

six years and its chairman for the

Mortimer

FINANCIAL

1944.

Werle has been

of the Curb

&

He became

manager.

floor trader.

a

Mr.

Chairman

COMMERCIAL

New York Stock

Exchange

be obtained

6%,

10

COMMERCIAL

THE

(714)

&

FINANCIAL

Air, Inc. (known

Missouri Brevities

Airline), in
ees

Louis, for the

Shoe

Co.,

for

1949, reported that the total value
of

products

manufactured

it

by

$263,027,321, against $309,674,450 in the previous year.
Of
the
total
1949
product
value,
was

$190,003,486 represents shoes man¬
ufactured (sales) and the remain¬
ing $73,023,835 is the value of
other products—including leather
rubber heels

and

soles—pro¬

and

International exclus¬
ively for its own use in manu¬
facturing shoes.
Dollar value of
shoes shipped to customers, the
report states, was 13.5% less than
that
of the peak year of
1948
when the figure was $219,804,880.
Net profit for the year ended Nov.
30, 1949, was $7,682,359, equal to
$2.26 per common share, compared
with $13,820,197, or $4.06 per com¬
mon share, for the preceding year.
duced

by

Dividends

the

on

stock

common

paid without interrup¬
tion for 37 years, the 155th con¬
secutive one having
been paid
have been

Jan.-l, 1950.

in

Co.,

whose

500,000 spent during 1949 for ad¬
ditions
and
improvements
with

remaining

the

American

Power

Light

&

The preliminary report of the
Missouri Public
shows

1949

$588,793,
share

on

*

678,

or

$3.92

years

Co., increasing production
capacity by an approximate 20%,

Mfg.

in the

disclosed

were

annual re¬

port for the fiscal year ended Nov.

30, 1949. Earnings for this period,
after taxes, were $1,626,139, equal

share out¬
This
compared with
$4.57 per share for the preceding
fiscal year.
The report listed cur¬
rent assets as of Nov. 30, 1949, at
to

$5.91
standing.

per

$5,062,410

common

compared with cur¬
of $993,021.
The
has no bank or mortgage
as

liabilities

rent

company

traded

on

the

is

stock

Its
new

*

San Francisco Ry. on Feb. 2 de¬
to

defer

consideration

of

the declaration and payment
a

dividend

on

of

the common stock

until its meeting scheduled for

Last

25.

May

initial

an

year,

distribution of $1 per share was
made

share
was

terly

on

this issue

dividend

full

The

the

on

March 1.

on

of

$5

City,

"

per

i terioration in

were

which

the

in

were

1948

was

steady decline of prices dur¬

ing the greater part of the

year."

Sales volume of Consolidated

of

in

1948,

a

h:

H:

Corp.

Bakeries

ended Dec. 31, 1949, was
$2,349,372, equal after preferred
dividends to
$6.50 per common
share.
This compares with a net

$58,724,649.

against

12-week

the

period

ended

31, 1949, sales were $12,558,and

000

$1.71

per

sales

of

come

net

$597,318,

profits

or

share, against
and net in¬
or
$2.66 per
share, for the 12-week
common

$14,067,134
of $898,825,

common

*

*

Dec.

Current assets amounted to

year.

$5,512,671, and current liabilities,
$515,512.
The common stock, of
which 640,017 shares are outstand¬
ing, is listed on the Midwest Stock

Exchange and New York Curb.
*

H:

Paint

Cook

*

Varnish

&

Co.,

ended
Nov. 30, 1949, reported net sales
of $27,380,890,
compared" with

Kansas City, for the year

1948,(a reduction

$29,700,393 in

&

Western

Net profits were $1,after providing for in¬
taxes
of $976,000, com¬

in

with
$2,165,682
after
$1,350,000 in the 1948

pared

on

earnings

Net

per

first

is

and

represents

fixed

the

30, 1948.

Nov.

*

*

ended Dec. 31, 1949, re¬
ported a net profit, after taxes, of
$313,543, or 77 cents per share, as
compared to $104,070, or 27 cents
per share, in 1948.
The tentative
profit for 1949 is the net after
provision for a profit sharing dis¬
tribution of an estimated $27,500
the year

to officers and

employees partici¬

pating in the company's employee
stock purchase plan. This marked
the

eighth consecutive year the
has reported net profits.

company

With Harrison & Austin
(Special to The Financial Chronicle)

BEND, IND.—William
O. MacLean has become affiliated
with Harrison & Austin, Inc., Na¬

MINN.—Lyman W.

PAUL,

cott Building.

Mfg.

Southern Union Gas

Stix & Co.

Quoted

INVESTMENT

SECURITIES

509

OLIVE

STREET

SCHERCK, RICHTER COMPANY
St. Louis l.Mo,

1

St.




Louis 2,

Mo.

i

o

and

n

L. D. 123

MEMBERS

MIOWEST

STOCK

not

his cash

tax¬

and

securities

shall have

we

five

enough
as

years,

to

threats

to

of

all

more

the

of

seems

risk

element

com¬

Two,

specific, risk factors
large in today's

more

investment

bulk

thinking
inflation

of

are

the twin

and

business

depression. The conservative in¬
vestment policy will obviously be

less

the

any

greater of these risks and attempts

or

path

us

that it

to all forms of investment.

mon

structure of

The

however,
within the

war

so

a

It

to note its existence

now

general

a

likely,

seem

which must

which

one

find

to

determines

the

fundamental mistake which "con¬

extensively in recent

servative" investors and their ad¬

clients

visers are making today, in our
opinion, is to regard inflation and
depression as opposite forces. This

we

available

to

the

problem

The solu¬

of

relative

protection

against

it.

A

opinion is very widely held, but if
past experience is any guide, it is

manifestly unsound. The Keynesian

tional,
it

is

necessarily

applied

is

unconven¬

investments,

to

automatically

dismissed

dialectics

as

drops,

being unconservative. We do not
believe that intelligent investment

tained

conservative

necessity

investment

exclusive,

mutually

just what is

meant

arc

by conserva¬

tive.

Considered

is

broadly,

most

conservative

investment

standard of

living

or,

considered

negatively,^ seeks to prevent
cline

in

standard

a

is included

it

a

program

which aims at maintaining

one

of

de¬
In

a

living.

the notion of min¬

is

fully

as

forces
the

for the

necessary

investor

servative

with

which

at his

means

con¬

to

know

the

he

deals

and

disposal

it is

as

the

economy.

is

considered

1948

the

at

peak

the

about

them"

anymore

forget

than

conservative to "stick with"

it
a

is
se¬

the postwar

present theory,

printing press) the

lar

ceiving.

a

There
be

dol¬

same

the employed

wages

would

were

re¬

then,

of

"depression"

no

pos¬

The idea, superficially, has
good deal of mass appeal. From
economic

an

consequences

point

of

of such

a

view

the

"prevented

depression" would be appalling.
The

conservative

investor,

see¬

ing the

money pumps fully set up
and the Administration which will

them backed with full public

He may argue

and

support,
will

appears

not

lapse,

to have

choice.

no

that pump priming
stave off economic col¬

and

with

this

shall

we

curity under worsening conditions

heartily

because of

that it will stave off deflation,

attitude

sort of

a

faith

of

in

"sacred cow"
the

manage¬

of

a

the

year-end

reports

number of "conservative" in¬

to

attention.

our

curious
among

We

similarity
many

ing their
the

of

brought

noticed

a

procedure

of them in decreas¬

common

stock holdings

progressed

year

their

in¬

and

holdings

of

cash

and''government bonds. Since this
was the exact opposite of our own
policy during 1949, we were nat¬
urally Jed to question whether
this
great
weight of respected
opinion against us meant that our
opinion was not
conservativei>
considered.

either,

views

was

To

of

determine

the

two

which

opposing

truly conservative,

we

led to consider the dominant

factors'which

constitute

today's investor.

These

risk

were

-The

EXCHANGE

be

war

We

agree.

merely

state

di¬
verting the collapse
from
the
equity-goods side of the economic
to

see-saw
come

side.

shadowing
tion in
how it
or

the

dollar-fixed-in¬

With
every

our

this

risk

over¬

other considera¬

minds

do

we

not

see

be either conservative

can

intelligent to exchange equities
or cash today.
With all

for bonds

due respect to their great number
and
reputation, we believe our

policy has been much

more

con¬

servative than that of

those

who

have disagreed with

us.

Sterling S. Beardsley Dead
Sterling
member

Sherman

of

Exchange,

the

and

New
a

Beardsley,
York

retired

Stock

broker,

died at his home at the age of 73
after a long illness.

to
our

With King Merritt Co.
(Special to The Financial Chronicle)

great'risk

in

the

back¬

ground of evervthing would
to

be

blance of activity In basic indus¬
tries, might quite conceivably be¬
stow on the unemployed (through

to

away

Pros¬
to

the government, to keep the elec¬
torate happy and provide a sem¬

run

things

of

Under the

for the professional speculator.
It
is not, for example, conservative

"put

main¬

into

boom.

sible.

It

be

our

additional

today

money

perity

ing a satisfactory and stable re¬
turn. Contrary to popular ideas on
this subject, such a financial pro¬
is beset with difficulties.

which

that level of business activity and
national income which existed in

course,

gram

under

prosperity can
by
pumping

imizing risk to capital and insur¬

conclusions.
Garfield 0223

reduce

"Welfare State" is being managed,
holds that when demand for goods

were

Landreth Building
Teletype

fixed-income

thinking,

if

SL 456

able

quarters, however, that when such

as

Eastern Transmission

Producing

to

ment.

Kalman & Co. Add

war

does

change is not simple and
frequently calls for original think¬
ing. We observed in all too many

creasing

Bell

to

redistri¬

price

a

Airlines, Inc. for

Mid-Continent

effect

the investor other

on

than

or organi¬
have cov¬

made

of

what

determine

would have

in which

and interested readers.

tion

some

this

economy.

second

fairly

studies

to

ways

enterprising individual
zation:

an

equally drastic pro¬
of taxation. We are not able

through rela¬
tive changes
in
the
price

a

in

by

be

currency

fraction of their present value.

well-known

hurdle

ered

the common stock were

staff of Kalman & Co., Inc.,

Tennessee Gas Transmission

—

to

wealth.

but in order to prove our point it
is perhaps necessary to determine

Cole, Jr.. has been added to the
Endi-

Delhi Oil

Sold

gram

coun¬

our

come

ST.

—

redistribution

vestment funds have been

Texas Utilities W. D.

Bought

our

would

drastic

of

t

K. Thurlow

which

of

certain

an

of

(Special to The Financial Chronicle)

Mississippi River Fuel

Gas

least

counteracted

place:
through taxa-

Recently

Southwest

the

almost

cause

convulsions, not

extent

Logically,
there are two

B.

undoubtedly

violent economic

intlation

and

<

Black, Sivalls & Brysou

Rockwell

and

would

war

far-reach ing

606,609

tional Bank Bldg.

Texas

an

of 7.8%.

SOUTH

Ralph S. Damon, President of
Transcontinental

ended

31, 1949, which compares with a
net of $2,472,118 for the preceding

period ended Jan. 1, 1949.
*

during
occur

try's

against

re¬

period

For

going to

*

for the year

954,413

ended

ports net profits for the 52-week

Dec.

as

$6.69, against $9.23 for the year

❖

period

a

is

enormous

elements

H:

$55,267,632,

Inc.

had

profit of Griesedieck West¬
ern Brewery
Co., after deducting
income taxes,
amounted to $2,-

share

Interstate

Stores,
January

Net

reported

January, 1949.
H:

into

there

take

of

*

year.

$2,260,458

which

month
decline of 10.7%.

1950, totaled $1,849,815, or 18.2%
the

entering

the same

for

of

below

year.

$3,987,925,

fiscal

for

4.09%

daily

in support of the view that we are

$

•

month

the

taxes

in

Stores, Inc.

with

previous

Brothers

Edison
for

January,

Retail

nor

is accumulating

on common

Sj.

due

by inventory losses resulting from

.

the

in

Evidence

all-time low of

an

compared

as

earned

year

primarily to a narrower margin of
gross profit brought about by in¬
creased competitive conditions and
the

3.86%

at

was

$4,465,201

$67,929,269

to

1949

sales

net sales of $125,987,662
of

in

.

homa, Texas, and part of Illinois.

31, 1939, net earnings

compared

as

board

The

Bell
Telephone Co. showed further de-

.

$58,058,393 were whole¬
sale.
The company said: "The de¬
crease in current year's earnings

declared, payable in quar¬

instalments.

servative

H:

of Southwestern

next

**

for

reports

stock

preferred

H:

Earnings

that

$2,436,543, or $6.75 per common
share, for
the 53-week
period
ended Jan. 1, 1949.
Sales totaled

The directors of the St. Louis-

cided

I-7'

V'

as

Contends, therefore, it is neither con¬
intelligent to exchange equities for bonds or cash.

expected

of

share.
*

prime investment risk.

earnings plus borrowings.

in¬

conditions, analyst foresees inflation

bution may be

retail and

Midwest Stock

Chicago.
The com¬
pany's only outstanding securities
are
275,220
shares of common
stock, the par value of which was
increased in 1949 from $1 to $8
*

from

now

Exchange,

per

*

problem of what constitutes conservative

on

vestment under present

share,

revenues

Commenting

Missouri, Arkansas, Kansas, Okla¬

against $4,057,477.

^

indebtedness.

per common

Total

1948.

1948,

$800,000 expansion

the

of

standing, compared with $524,-

gate

*

.

$4.40

to

By BRADBURY K. TIIURLOW

Analyst, Minsch, Monell & Co., Members, New York Stock Exchange

greater part
company's capital
re¬
a

per

income

net

a

equal

the common stock out¬

wholesale, compared with aggre¬

effected during the past
by the F. Burkhart

program

three

"

an

com¬

operates 683 exchanges and fur¬
nishes
long distance service in

432,312, comprising $67,742,494 in
retail
volume
and
$57,689,818

baum Co.
*

Service Co. for

$3,758,237, equal to $5 per
compared with $5,750,418,
or
$7.65 per share, in 1948.
Net
sales for 1949 were reported at $125,-

Co.

the

stock fell to
$4.60 per share in 1949 from $5.23
per share in 1948.
The company

of

by

stated that

Earnings

share,

cleared by the SEC on

Details of

coming

accumulated income.

from

ended Dec.

Feb.
3.
They are Stifel, Nicolaus &
Co., Inc. and Peltason, Tenenwas

$8,178,000

By Present Investment Risks

completed

of

quirements for the purchase of
new
equipment
will
be
met

accord¬

Western Auto Supply Co., Kan¬

of

Treasurer

the calendar year
against $107,361,529 in 1948. Sales I 1949 from the previous record low
of
equipment trust
obligations ! level of 1948.
The rate of return
furnished $7,322,000 of the $15,on capital invested in the business

sas

$16,125,000 cash for the 500,000
shares of common stock of Pa¬
cific Power &• Light Co. held

vv

$10,997,654 in the previous year.
revenues
were
$93,642,963,

the

bid

Railroad,

H:

and Bear, Stearns &

York,

New

S"„

Hi ' ;

,

statement for

been

not

Affected

as

said

company,

"it should look good." A. V.

pany,

of
*

.■

has

Leslie,

Total

investment

included

were

1949
but

ing to Arthur K. Atkinson,/ its
President, had a net income in
1949 of $5,693,237, compared with

snydicate headed by A. C. Allyn
& Co., Inc.

'

Wabash

The

$4,355,069,
houses

!

the

H=

the

that the financial

of

1949,

*

Louis

St.

Two

1,

May

April 14, 1950.

in
*

*

.

payable

available income
interest on the
company's second mortgage in¬
come bonds to holders of record
out

1950,

ended Nov. 30,

year

declared

also

St.

Conservatism

a

with

Thursday, February 16, 1950

Trans World

as

report to employ¬
in connection with his first

year

International

CHRONICLE

with

Russia.

seem

Such

a

ST.

CLOUD, MINN.—Robert J.

Stieler is with Kins Merritt &

1211 First

Street, North.

Co.,

Volume

171

Number 4882

THE

men

Competition

It

is

sell,

Selling
increased

on

com¬

petition, both from domestic and

foreign

sources,

stresses

greater

selling

Mr.

Babson

of

importance

pros¬

perity. Says increased production
reach consumer,

must

if it is to

have value.
The

forecasts

issued

by

made;
who

for

FINANCIAL

visit

and

the

CHRONICLE

consumers

it.

use

what

about

that

else

anyone

product

been

the

on

sales

force/

Visit the plants from which
the

raw

materials;
where

work

your

to

than

family
in

the

for
fish

200

has

years

business.

As

in

catch

the

fish; and unfair
housewives who buy the fish.

a

to

the

grapefruit

is

ing

priced in the din¬

was

at 35 cents.

car

Certainly, there is a great
opportunity for Christian service

Yet, the day

(Special to The Financial
Chronicle)

BOSTON,
Pushee

Co.,

to

most

everything

eat

we

is

MASS. —George

with

Inc.,

for any young man who will help
reduce this spread which applies

Ill

A.

W.

Devonshire

MINNEAPOLIS, MINN.

R. E. Griffin & Co.

Opens

(Special to The Financial Chronicle)

LOS

ANGELES,

Richard

E,

.

Griffin

formed

with

liam
to

Richard

are

Breatrice A.

R.

the

Disbrow

has

competitive

been

Co.

has
5315

Joins Miller,

Griffin

and

Weiskopf.

Kenower

(Special to The Financial Chronicle)

DETROIT,

MICH.

—

Herbst is with

has

Co., Ford

BRIGGS & STRATTON CORPORATION

been

greatly in¬
creased

ing
ten

BALANCE

dur¬

the

SHEET

DECEMBER 31,

1949

past

ASSETS

years.

LIABILITIES

Farmers
are

raising

2 2 5 %

more

Products.

Manufac¬
tured are

making

45%

more

goods;

there has been

large

a

Roger W. Babson

in¬

in

crease

number

population
has
increased
only
14%.
Hence, 1950 will see far
greater domestic competition.
But in 1950, for the first time
since 1940, the U. S. will face for¬

eign competition. (Among Christ¬
mas
gifts received by me was a
five-pound box of candy made in
flown

to

this

to

buy

(quoted market price $38,864)..
Treasury notes, tax series,
..

Receivables, less

11,417
at cost.....

Less— United States
tax

.....$ 7,733,617

policies

—

$300,000)

154,518

World

more

War

III.

This

means

competition for U. S.

manu¬

Treasury notes,
including interest

.$ 1,590,214

without par value
Issued, 599,992 shares, at stated value....$
Earned surplus —

$

117,002

Balance

$1,236,798

Add

3,346,864

Office furniture and fixtures

—

2,967,952

$4,754,975

$10,335,958

2,436,659
Deduct

—

at fixed amount..

50,000

—

Cash dividends

per

paid

share).

1,634,317

8,701,641

2,603,661
Total

PATENTS, TRADE-MARKS, ETC.

—

($2.75

$2,553,661

Patterns, tools, dies, etc.

300,000

December 31, 1948..$ 7,368,006
Net profit for the year

(per accompanying
summary)

171,313

depreciation.. 2,318,316

291,471

Capital stock —
Authorized, 750,000 shares

30,168

....

Less— Reserve for

1,930,652

CAPITAL STOCK AND SURPLUS:

PLANT AND EQUIPMENT —at cost:

Buildings and equipment
Machinery and equipment

series, at cost

Total current liabilities

UNEXPIRED INSURANCE
PREMIUMS, ETC

Land

291,471

$2,222,123

CASH SURRENDER VALUE OF LIFE
INSURANCE
amount of

$1,930,652

Wisconsin

2,964,709

Total current assets

at nominal amount....

Less

i

—

facturers.

capital stock and surplus before

deducting treasury stock.......
Treasury stock, 5,694 shares, at cost.

$9,001,641
69,890

..

8,931,751

$10,521,965

$10,521,965

Advantages of Merchandising
The

one

industry

which

need

not fear this competition is wellorganized merchandising, perhaps
best represented by the top chain
store
organizations.
These
are

[BRJGCS& Stratton]

SEMMARY OF PROFIT

always looking for the best goods
for

the

they
not

least

are

made

have

tories,

banks

They

with

one

serve

They do
farms, fac¬

in
real

or

vestments.

best

raised.

or

money

only

wherever

money,

estate

in¬

free-lances

are

goal—namely,

styles;

any
definite
is not governed by
regulations.
Stores

upon

and

THE

YEAR

ENDED

PRESIDENT'S

DECEMBER 31, 1949

GROSS SALES, less returns, allowances and
discounts

$23,530,258

ADMINISTRATIVE EXPENSES

18,459,707

Profit from operations

OTHER

$ 5,070,551

r,

INCOME, LESS MISCELLANEOUS CHARGES....

87,401

which do not pay can be quickly

while stores are so dis¬
through the U. S. that
conditions in one locality, or

moved;

tributed
poor

industry, will not harm the group
whole.

a

as

or

With

turnover

a

times

more

need

be

loss

Good

merchants

no

a

of

on

there

year,

Profit before provision for income taxes

(after

well

are

PROVISION FOR INCOME TAXES:

$1,905,000

Wisconsin

If I
a

as

were a

a

Net

friends—whether
themselves

a

total of

number of shares

now

The year 1949 ended with
ever,

on

January

II,

a

large back-log of orders in both divisions. How¬
is the bargaining representative for

1950 the Union, which

production and maintenance employees, called

a strike which stopped
pro¬
in both of our
plants.
Before the strike protracted
negotiations had
been carried on with the Union to
teach terms for a new Union contract
in place
the one which
expired September II, 1947, but agreement was not reached.
After invitations to the
striking employees to return to work, the
Company
has resumed
operations on a limited basis with some old
employees who have
returned to work and new
employees who have been hired.
In that way a sub¬
stantial

of

2,190,000

working force is being built

increase.

Just

when

full

up.

production

As it increases, the rate of production

operations

will

be

accurately predicted.

reached

cannot

be

$ 2,967,952

February 13, 1950.

C.

L.

COUGHLIN

in

AUDITORS' CERTIFICATE

today,
or

We

business

business

have

examined

the

balance

sheet

of

BRIGGS

&

STRATTON CORPORATION (a Delaware
corporation) as of December 31, 1949
ended.
Our examination was made in
accordance with
ing standards and accordingly included such tests of the
generally accepted audit¬
accounting records and such other auditing procedures as we
considered neces¬
sary in the circumstances.
In our opinion, the
accompanying balance sheet and summary of profit
present fairly the financial position of
Corporation as of December 31, 1949 and the results of its
Briggs
& Stratton
operations for the year then ended, and were
prepared in comformity with
generally accepted accounting principles applied on a basis
consistent with that of the preceding
year.
Milwaukee, Wisconsin
ARTHUR ANDERSEN & CO.
January 23, 1950
and

col¬

for

heads of large cor¬

or

a

Respectfully submitted,

profit carried to earned surplus

salesman.

successful

my

or

$1,634,317, were paid during 1949.
During the year we expendfd on expansion and new
equipment approxi¬
mately $458,000; and $588,000 was paid into the
employee retirement trust fund,
$378,000 of which was applicable to past service
retirement credits.

President

young person

lege, I would become

of

the

outstanding,

Profession

graduate of high school

Many

of the Corporation at December
31, 1949 and the
its operations for the
year ended that date are set forth in the accom¬
statements. These financial statements have been
examined by Arthur
Andersen & Co., and their certificate is
included as a part of this
report.
Net profit for the year 1949 was
$2,967,952 or $4.99 per share, as compared
with 1948
earnings of $3,288,839 or $5.53 per share, based on the
594,298 shares
outstanding. The decrease in net profit of $320,887 reflects a decrease
in profit
before income taxes of
$510,887 and a decrease in provision for income taxes of
$190,000.
Cash dividends of $2.75 per share based on

will

285,000

hedged against inflation.
Selling

REPORT TO STOCKHOLDERS

condition

duction

deducting provision of $192,801 for depreciation)... .$ 5,157,952

inventories.

always

financial

results of

our

Federal

five

The

panying

COST OF SALES, SELLING, AND GENERAL AND

consumers.

bureaucratic

FOR

to

The Selling Industry is not tied
down to any one location; is not

dependent

671,459
627,284

1,192,593

Inventories, priced at lower of cost
(first-in, first-out) or market

(face

$
—

Federal

204,443

of $10,000

reserve

.

..................

Provision for income taxes

..

United States

\

payable

Accrued liabilities

to increase in order to stave

need

off

goods from abroad.
from
abroad
will

more

buying

Marketable securities, at cost

country

by airplane.)
The only hope for
Europe and World Peace is for us
This

Accounts

$ 3,360,455

of

from hairdressers to dry
cleaners,
while
advertising has increased
about -35%.
Yet, since 1940, our

and

CURRENT LIABILITIES:

Cash

the

"service" jobs,

Paris

CURRENT ASSETS:

the

related

summary

of

profit for the

year

then

porations with thousands of stock¬
holders—came
sales
are

and

up

department.

many

the

there

engineers, accountants

personnel

for jobs;

through
Today,

but

managers

no

looking

successful sales¬




BRIGGS & STRATTON CORPORATION
World's

-

Milwaukee 1,

Wisconsin, U. S. A.

Largest Builders of Single Cylinder 4-Cycle Air-Cooled Gasoline
Engines and Automotive Locks

Fred

C.

Miller, Kenower &
Building.

recently

Produc¬
tion

added

staff of J. M. Dain &
Co.,

industrialists,

year.

*

—Wil¬

CALIF.—
&

offices at

E.

&

110 South Sixth Street.

South Vermont Avenue to
engage
in the securities business.
Part¬
ners

H.

Street.

(Special to The Financial Chronicle)

economists and government offi¬
cials all agree that 1950 will be a
very

Smith

J. M. Dain Adds

or

wear.

been

When coming to Florida, a half-

come

product

up from the ground,
trees, equally good or
grapefruit and cart them

better

11

A. W. Smith Adds

pick

my

away!

you

serves

to

man

under

My

(715)

after my arrival here I had to hire
a

Importance of Selling to the
National Prosperity

something
people.
If
knees every

honestly

factories

1950

leading

important
long as it is

&

you can get on your
statistician, I never understood
morning and ask God to help you why good fresh fish when landed
sell your products, you are sure from the boats should sell at
only
to succeed.
Selling opportunities five cents a pound; while the same
exist
in
every
honest industry, fish, when frozen, should retail
"from
cradles
to
coffins."
But, months later for 40 cents a pound.
after deciding what you are to It seems unfair to the fishermen
sell, make sure that you know who are daily risking their lives
more-

aid to national

as

Moreover,

not

so

which

By ROGER W. BABSON

Commenting

of work.

can

organize and oper¬
profitable selling force are

a

in great demand.

Calls for
Better

out

are

who

men

ate

COMMERCIAL

and

Sivitches

12

(716)

COMMERCIAL

THE

American

The

erations

Hardware

the

of

Division

Corbin

Cor¬

to

*

being discontinued.
Except during periods of war the
are

division

has

Productive

usually

$4,868,279 and net book value
$44.17 to $52.41 a share.

from

op¬

Screw

lost

a

money.

&

capacity of the screw

Securities

preliminary permit

directors

of

ties at Enfield

Screw's costs of manufacture. The

would

of

of

fred
as

provement, including
navigation locks.
*

Aetna

*

*

:!:

Casco Products

Corporation has

$2,000,000 from Pruden¬

borrowed

tial Insurance Co. on 3V4% serial

annual install¬
ments of $200,000 each to Jan. 15,
1960.
Proceeds were to be used to
retire loans of $800,000 and to
notes due in equal

strengthen working

Standard
York

has

obtained

acre

an

*

t|:

dating value at the year-end was
$56.68 a share, up from $50.10 the
previous year.

a

Pitney-Bowes,

employees
of

Inc.

its

SAN

Both years are
provision of $400,000 for ex¬

ANTONIO,

and $5.86 in 1948.

Texas

after

Bankers

replacement cost of ma¬

chinery and equipment above

will

cost.

Group

hold

meeting

May

Friday,

and

several

program

MARKETS

annual

on

4th

The committee in charge prom¬

ises

PRIMARY

its

and 5th at the Plaza Hotel.

year

IN

fine

speakers

and

a

of real entertainment for

guests and their wives.

With Nauman, McFawn

Hartford and

(Special to The Financial Chronicle)

Connecticut Securities

DETROIT,

MICH. —Eugene

Hesz is with

Nauman, McFawn &
Co., Ford Building, members of
the. Detroit Stock Exchange.

TlFfT BROTHERS
York

&

New

York

Curb

Boston

Exchange

9 Lewis St.
Tel. 7-3191

joined the Pennsyl¬

Felix

in 1930 when it

Company

pany, of which he was Vice-Presi¬
dent.
He
had
previously been

Vice-President

of

Bank

Company

&

Trust

Mr.

People's

Exchanges
(Associate)

Hartford 4

FT.

New York: BArday 7-3542

Bell Teletype HF 365

WAYNE,

IND.—Ernest

Felix

director

the
of
Philadelphia and the Girard Fire
;

is

of

& Marine Insurance Company.

is

City Bankers and is past
of
the
Philadelphia
Chapter of the American Institute
of Banking.
heretofore

Blasband

Mr.

and

Bankers Securities

was

Dye Corpo-

ration,

New York Canal

6-3662

Bridgeport

Teletype NH
Danbury




194

New London

<

•

military
enemy-

the

continu¬

high places of those who

Our public gets

wrought

little free love,

but continues to

up over

patronize movies and shows slant¬
ed

by pro-Communist writers and

starring pro-Communists.

That is

called being liberal.

It's long past time the public be
told the hard facts of the present

situation, and high time business
and banking leadership did some
leading.
the

matter

of

dollars

en¬

trusted to the banks and insurance

"I theenk I married my seester."
Jose demanded more informa¬

companies. Legally, the responsi¬
bility is to see that the thrifty citi¬
zen is paid back in the same num¬

made

you

Pedro,

mean,

mistake?"

a

I

start

ber of dollars he paid in. But there

to

of

what

is

happening

to

they wouldn't cry, "Oh,
Brother"; they would say, "Uncle."
The reason the public doesn't

a

There has been
a

no

real op¬

Not since 1932 has

clear-cut issue in

a

as

campaign. In
that
Franklin D. Roosevelt

conservative, promising

a

also

is

moral

a

that

those

responsibility

dollars

to

when

paid

approximately the
purchasing power.

same

see

back have

Not

Only Policeman, But Also
Partner

Some of the reluctance to speak
out and to demonstrate leadership
can

be traced to the fact the gov¬

ernment

is

not

only a policeman,
partner in the bank¬
ing business and at the same time
a competitor.
but is also

a

25% cut in Government spend¬

ing,

ANGELES,

staff

the

didate.

CALIF.—Al¬
added to

Edgerton, Wykoff &

of

ers.

,

Since

1932

the issue

been clearly drawn.

tion has

never

has

The opposi¬

"me too, but I'll
platform and lost.

The

two

plicating

examinations

—

are

du¬

which is the way with

the

Joins Fewel Co. Staff

government. The bigger the
government, the more duplication,
The second reason why the pub¬ and, of course, the more jobs and
more cost to the public.
lic doesn't say "Uncle" is because
The politicians must have been
business and financial leadership
has been either too timid, or some asleep when the Federal Deposit

(Special to The Financial Chronicle)

have had skeletons in their closets,

Co.,

the

of

Los

Street,
Angeles

ANGELES, CALIF.—Syd¬

Goldman is

Co.,

Spring

South

618

453

now

with Fewel

South Spring
of

the

Los

Street,
Angeles

-

-

ANGELES, CALIF.—Wil¬

liam

J.

with

Samuel

Stout

is

B.

now

affiliated

Franklin

&

do

or

some

on a

have

sought

temporary

gain by playing along.
The

banking

business

its share of all three.

has had

But

a

gen¬

eration has passed since the early

Insurance Corporation was set up.
For there was a chance to have
that group
examine all insured

banks,

whether members of the
Federal Reserve or not. It is not
too

late, of course, for them to

rect that.

cor¬

"

Co.,

management

given today by the political and shown
in
union leaders, with their tie-ins
in

was

very

,

clearly

the middle and late '30s

New York State.

*Talk

by Mr. Gould at meeting of the
Conference of Bank Auditors
Comptrollers, Brooklyn, N. Y., Feb.
1950.

New Jersey
and

215 West Seventh Street.

run

it better"

1930's, and the old leadership has
What happens when these "po¬
gone. Bad as some of that leader¬
litically
appointed
policemen"
ship may have been, it was lilyforce their judgment over that of
white compared with that being

Samuel Franklin Adds
(Special to The Financial Chronicle)

Hartford 7-2669

precious
leaking to our

Take

mistake."

situation,

you

"What

ran

G. Smith has been

LOS

Waterbury

a

a

-

members

New Haven 6-0171

"I theenk I made

campaign

has

such

Where one job begins and the
others
leave off
is not always
promising to take Govern¬
clear.
ment out of business, and saying,
Vice
Presi¬
The policeman role is different
dent
of
Nat¬
among other things, "My fraands,
from that of an ordinary cop. This
ural Resources
taxes are paid in the sweat of the
"cop"—they are actually twins—
Fund,
Inc.,
working man's brow."
not only checks the loans and in¬
it
was
an¬
Mr. Hoover was pictured as the
vestments,
but
also
passes
on
nounced
by
spender and the exponent of big
them, and can force their liquida¬
Frank L. VaGovernment.
The
public voted tion.
for what it thought was the con¬
lenta,
PresiEvery bank is subject to at least
David A. Gibb
dent.
Mr.
servative as it has every time the
two
examinations once a year.
Gibb
was
a
issue had been clearly drawn. Tfre
Banks are examined by either the
member of the executive staff of only other election where this is¬
Federal Deposit Insurance Corpo¬
sue
was
Semet-Solvay Division.
clearly drawn — sound ration or the Federal Reserve.
money versus unsound—the McThen, depending on whfether the
Kinley-Bryan campaign, the vot¬ banks are state or
With Edgerton, Wykoff
national, there
ers picked the sound
money can¬ are the state or
national examin¬

&

Co.

some

Presidential

Executive

ney

&

everything, Pedro?"
Pedro
replied with
hesitancy, "fine," adding:
which

there been

elected

been

LOS

EXCHANGET

"How's
To

(1)

Stock Exchange.

STOCK

friend, Jose, who hailed him:

position party.

Stock Exchange.

YORK

a

is because:

1

&

c a

Mexican possessed

them

Allied
h

be like

may

undress, my
bride she say, 'Oh, Brother.'"
I think—if the public were fully

with

C

becoming

are

we

tion, and Pedro explained:

Gibb, formerly asso¬

A.

i

we

that

wonderful physique.
He was
married and the next day met his
of

of

Treasurer

Corporation.

Natural Resources

Primary Markets

NEW

people

a

on

find?

Russia—and

in

ance

with

a

confused

sit

be plunged into

before leaving the room.
As

war

that may blow us

condone these acts.

so

we

most

Soviet

of

may

war

we

secrets

Gould

today,

those the time may yet come when
we have to raise one or two fingers

aware

e m

Leslie

on

one

was

blunders

Dark Age.

a

Our

or

And

at least

a

David A. Gibb With

We maintain:

MEMBERS

we

atomic

into

excep¬

tions.

Its

>

powder keg, not knowing what

an

every

"When

staff of Waddell & Reed, Inc.

Chas. W. Scranton

prac¬

one

two

President

members

Connecticut Securities

moment

He

Reserve

Gallmeyer has been added to the

in

the peace, so that

itself

on

war.

in its conduct and since have lost

and

a

tically

another.

boondoggles,

an

has

member of the Association of

a

bert

J.

to

The

cut

after

in

appalling cost in life,
property and liberty.
The war was won, but blunders

that strapping

Commonwealth Title Company

LOS

(Special to The Financial Chronicle)

into

Government

which

1

1927.

in

the

Colonial Trust

merged with

was

With Waddell & Reed

Stock

with

man,

child.

with

(Special to The Financial Chronicle)

1907
Established
Members
New

member

and

absorbed the Colonial Trust Com¬

of

America

and

ness,

billions

brought this great nation into

busi¬

every

blunder

one

spent

sliding

other

of

It

Faced

director

a

Division

—
The
Investment

of

line

made

while the rest of the world

also applies to

Semet-Solvay

TEX.

the

Association

Thursday

net working
capital increased from $1,772,394

of

it

of the most vicious rack¬

eteering elements in our society.
This
political
leadership hab

what do

ciated

Hold Annual Dinner

But

Finance Corporation.

some

individual—

as

terms of the

Group to

This is supposed to apply to the
banking busi¬

to

activity of the

1950.

17,

on

talk tonight

my

the Government."

every

practically

on

only policeman
market by Treasury

money

tinue

Pennsylvania

Vice-President

offered

of

is, "Your Not So Silent Partner—

ness.

in

government is not

in

total of 10,000 shares
stock at $15 per share

Texas IBA

previous year, net
from $1,060,272 to

rose

the

$

banking

Attacks rigging of

banking department of
Company for
Banking and Trusts. He will con¬

the

David

$1,669,888, equivalent to $9.34 per
share of common stock in 1949

During

dent of the

how in

The subject

woman

has been Senior Vice-Presi¬

1945

stock

of the

duties

Widely known in financial and
circles, Mr. Felix since

The offer is
employees'
purchase plan.
The offer
expired on Feb. 15, 1950.
Jan.

based

n£w

a

common

on

annual report of

of

*

*

Chapman
Valve
Manufacturing
Company
for the year 1949 shows that on
sales which were only 1.1% above

cess

premium reserve
$2.80. Liqui¬

and after taxes were

t|t

income

share.

unearned

the

with the intention of
plant at a cost of $2,750,000 when fully equipped. At
the present time, plants are lo¬
cated in Naugatuck, Conn.; Phila¬
delphia,
Pa.;
Oakland,
Calif.;
Dallas, Tex., and in the Philip¬
pines.

those

the previous year and the

Investment in¬
come amounted to $2.38 per share
and net earnings per share in¬
cluding 40% of the increase in

Reports
indicate
that
Peter
Paul, Inc. has purchased a 14 l/>acre tract at La Grange Park, near

The

company's history.
The loss
was
24.0%
compared
to

gain from underwriting was equal

struction.
ti:

Company during

to $1.14 a

assume

banking

Mr.

The

of

ratio

indicated that no
definite plans had been made, but
that a major plan is under con¬

his

He

14.

about March 1.

vania

29.4%

board

Tuesday,

Feb.

Hartford

the

the

will
Anthony C. Felix

spe¬

of its executive committee.

i|e

1949 were
satisfactory than in recent
years. Premiums written at $11.4
million were the second highest in

The management

/Chicago,
erecting

to

more

tract near Wallingford, Conn.

*

New

a

meeting

held

Steam Boiler Inspection & Insur¬
ance

Silver Company
option on a 35-

International

of

6, 1950, thereby
three the number of

Operations

display its products.

has

This

Jan.

*

in New York City
at 100 Park Avenue, where it will
maintain
executive
offices and

❖

cial

level.

of

Co.

Insurance
of

as

cutting

space

*.

1948

pre¬

Aetna's subsidiaries.

Company

Brush

Fuller
leased

the

of

corpora¬

tion at

and

received

above

$

*

*

capital.

3.4%

was

and

t

n

e

the

Company

Underwriting results were highly
satisfactory and surplus was in¬
creased by $7,935,642.
The man¬
agement has stated its intention
to declare quarterly-dividends of
$0.50 per share.
Piedmont Fire
Insurance Co. was absorbed by

lease.

d

Treasurer

miums of $99,461,002 in 1949.

plant of the Corbin Screw
Division will be available for sale

and the

or

dam and

*

*

Insurance

subsidiaries

its

a

itself

cut

loose operations of Reconstruction

and

Presi-

has

government

but partner.

executive
-

out

indicates

Pres¬

as

Blasband

Vice

outlay of capital necessary

Editor, New York Journal-American

activity of individuals and business, financial journalist

every

ident and Al¬

with the U. S. Army Corps of En¬

increase the operating effici¬
ency of the division.
The com¬
pany will concentrate its produc¬
tion facilities on
builders' and
miscellaneous hardware products

Pointing

election

Felix

The $42,000 kilowatt plant
be erected in
connection

gineers' plans for navigation im¬

large

Financial

Anthony G.

could not justify the

fo

By LESLIE GOULD*

Bankers

the

directors of American Hardware
felt that they

Competitor in Banking!

announces

de¬

the Connecticut

on

Government: Partner and

Philadelphia,

Corp.,

velop hydro-electric power facili¬
River.

below

been

to

Thursday, February 16, 1950

|
PHILADELPHIA,
PA.—Albert
M. Greenfield, Chairman of the
board

Corbin

normally

sis

Windsor Locks Canal Company,

a

CHRONICLE

By Bankers Securities

subsidiary of Connecticut Light
Power Company, has applied

for

industry is in excess of the de¬
mand and competitive prices have

$

FINANCIAL

Felix, Blasband Named

Connecticut Brevities
poration has announced that

&

14,

The New York State Banking
Department right at the bottom of
the

market

forced

the

banks

—

Vnlnmp

Volume

savings

171

171

4882

THE

THE

Number 4882

well

as

sell their

Number

commercial—to

as

second

I

gin,

but

Boat

COMMERCIAL

COMMERCIAL

could buy Higgins
Helicopter or

you

Bendix

gency,

FINANCIAL

&

FINANCIAL

&

CHRONICLE

CHRONICLE

then create one—which is

dump real estate. Instead of Globe Aircraft.
selling at that time, sound judg¬
That's the Federal Reserve for

bureaucrats' lullaby,
i The RFC is a full-fledged part¬
ner of banks and also a competi¬

ment

tor

grade rail bonds

and

and

would

have

been

to

buy

tne

competitor at
times. It has probably on balance
done a good job.
It did step in
when the banking fraternity had
the
jitters and wouldn't make

you.

and average.

more

and

tough

a

there is another Federal
agency which has more than a
Department did the same thing linger in the banking business. In
with the insurance
companies un¬ fact for many banks, it has moved
der its jurisdiction.
right in and taken over. This is loans that it should. But the other
Many of those bonds which the the Reconstruction Finance Corp., departments of the government
The

New

Now,

York

State

Insurance

State Department forced the banks

which competes with banks in its

partly responsible for those
are now rated
high enough lending and is a partner in sev¬ banking jitters—the monopoly in¬
for their repurchase.
eral hundred
banks across the quiry boys, the SEC, the Federal
One of the fetishes of the bank¬
country through ownership of Reserve, the Comptroller of Cur¬
ing departments and the examin¬ preferred stock.
rency and the Congress,
were

to sell

ers—national

state—is the rat¬

or

ings of bond investments by
of

the

statistical

ratings

services.

one

These

The RFC has used the power of
investment in bank stock to

its

put some of its own former staff

always double, or triple members and others
politically
top of the market and C faithful in
well-paying bank jobs
at the bottom.
Whep these rat¬ Not all such appointees have been
ings are changed it is^ too late to
bad
in fact quite a few have
do anything about
them—get in excellent records—but there are
are

A at the

—

for the ride

What

the

needs is

dent

out before the slide.

or

a

banking

business

return to more

thinking

indepen¬

arid "exercise"

of

judgment — both in investment
policy and in loan making.
With the Federal
Deposit Insur¬
ance
Corporation^and' its $1,200,000,000 surplu9,-maore latitude can
be

given to..hank, .management in

the

exorcise

bank

can't

of

its

make

judgment.

A

buying

money

plenty where the contrary is true.
has operated the institution in

such
to

a

is

it

manner

insures

banks, all but 200 being

13,614

possible

off the RFG-owned stock
get out from under

pay

and

The RFC
an

was

emergency.*

expanded to meet

This

was-

in "the

dark days of the depression.
as

far

the

as

RFC

the emergency has

government bonds.
The FDIC now

not

perpetual.

is

But

concerned

It is

no. end.

If there isn't

an emer¬

(717)

stockholders

trial

finance the company and keep it
running without Government help.

helpful in getting on indus-'
payrolls.
Interesting
case
histories
of
RFC loans are furnished by Lustron—the prefabricated home out¬
fit—and

Watch.

Waltham

In the

The
on

success

to

have

of this

kibosh

was

j There is
of

scandal

more

in

operations,
some reason

a'
*•'

than just

a

smell

of the RFC's

some

but that agency for
is able to keep secret

three

put

dealers, but

that by
the RFC is out selling the inventory to a chain
$37 V2 million, compared to the store group at 50 cents on the dol¬
lar. This wrecked the dealer fran¬
$1,000 put in by its promoters.
Waltham
Watch,
one
of
the chise setup.
Lustrom

on

deal,

makers

of

in

works

watch

Through the tax laws the Gov¬

the

country, got into difficulties
last year, due in part to Washing¬
ton's letting down the tariffs bar¬

ernment

cuts

itself

in

on

the

profits of all business and
earnings of all individuals.

the

riers to Swiss watch movements.

It has been

a source

of lucrative

private jobs for many of its alumni
and for others of
the political
faithful.

As

I

banks have been

RFC

got

a

said
so

The

before,

the

used when the

financial hold

on

small

than

advanced

have

to

$6

the

company

out of business, perhaps .with
loss of jobs and payrolls."

a

That

was

million

turning

over

of

its

LOS

loan .after

Power

to the company $4 with
626

the

When
was

RFC

being

stepped

worked

in,

ANGELES, CALIF.

Richard

strings

million.

plan

(Special to The Financial Chronicle)

,

just the other day closed its

$2

on

Two Join Wagenseller Co.

last year. " The com¬

doors because the RFC. put

the

institution. Others have found the

RFC

go

pany

lot of its dealings.

Helberg
have

become

Wagenseller
South

Spring

bers of the Los

a

&

*

FOUNDED
FOUNDI

all the
money on deposit. Yet, the
FDIC wants to extend the

Durst,

Street,

let's

turn

which

to

wants

1849

Soritftj<•' bavingsf

another

to

add

role of competitor as well

as

the

serve

official
manipulator
of
the
money market and policeman. The
as

Federal Reserve.

IN

THE

CITY

CLEVELAND

OF

y

Treasury Rigs Bond Market
In order that the U. S.
can

Treasury

carry the $260 billion

cost, the Federal Re¬
serve
rigs the money market—
keeping interest rates down.
It
does
this
through
open

mar¬

ket purchases and
sales of govern¬
ment

bonds, which in turn set the
interest scale for all other
prime
securities and for bank
lending.

This
and

is

on

savers

cheap
lions

fraud

a

the

on

private business.
the

—

money
a

public

For the

thrifty people—the
policy is costing bil¬

in interest return

year

prime investments
savings accounts.

and

on

bank

on

For

industry, the cheap money
policy, plus the tax laws, makes
raising of equity capital too costly,
these enterprises go

so

Interest
is

bonds and

on

deductible

dividends
after
can

into debt.
bank

taxes,

stock

on

taxes.

be

before

are

When

loans

while

payable

bond

money

obtained from 2% to 3M>%,

against

6 to 8% cost for stock—

a

dividends are yielding that much
today—few companies will resort
to equity
financing.

This is
banks
to

problem

a

should

show

be

just

taking the lead,

what

money policy is
The Federal

which the

on

this

cheap

doing.
Reserve,

New York State

like

the

Banking Depart¬

ment in the '30s, is another ex¬
ample of the "superiority" of bu¬
reaucratic judgment over that of
private enterprise and the private

In

November,

1948,

market

was

Federal

Reserve

slapped

tighter
credit.

sumer

or

the

the

stepped

Instead

the need
restrictions.
Seven

in

was

and

on

con¬

of

tighter
for easing

had

substantial

a

exercised

President, White Motor Company

Irving C. Bolton
Treasurer, The Warner 8s Swasey Co.

John R. Chandler, Pickands, Mather
Harold T.

Clark,

(Less Reserves)

Director, Cleveland Electric Illuminating
Company

T. J.

Cash

Conway

President, Fisher Brothers Co.

to

the

same

reverse

setback.

kind

listed stocks, but little or
were

unlisted
of

required

shares

the cats

—

of

and

on

.

$ 18,947,982.86
107,219,000.00

on

(Including $12,800,000.00

as

•

Lawful Reserve)

Other Investments

President, Thompson Products Company

J. S. Crider

First

Director, The Dow Chemical Company

Ernest C.

Mortgage Loans

12,336,910.90
on

Real Estate

61,026,146.81

.

Other Loans and Discounts

Dempsey

29,759,067.80

Attorney, Squire, Sanders 8s Dempsey

Banking House and Lot—127 Public Square

George Durham

1.00

.

President, Wheeling 8s Lake Erie Company

Bank

Randolph Eide
President, The Ohio Bell Telephone Company

Parking Lot—W. 3rd 8b Frankfort Ave..

1.00

Interest Accrued and Other Assets

635,143.47

Mervin B. France
President

Total

$229,924,253.84

Dwight P. Joyce
President, The Glidden Company

Frank C. Lewman
President, Richman Brothers Company

LIABILITIES

James L. Myers
President, The Cleveland Graphite Bronze Co.

Laurence H. Norton
Treasurer, Columbia Transportation Company

Drake T.

Surplus

•

•

.

$

•

12,000,000.00

Perry
Reserve for

Secretary-Treasurer, Harshaw Chemical Co.

Contingencies

Reserve

Henry S. Sherman

Chairman of the Board

It

dogs.

for Taxes and

421,517.38

1

Herman L. Yail, Attorney, Sayre 8t Vail

Other

Arthur P. Williamson

212,149,017.40

Deposits

2,460,359.67

It

phone

General Motors




on

.

.

.

1,908,526.12

$229,924,253.84

—nargs.

A

mis-

Security and Uninterrupted Dividends to
Five Generations

mar¬

of Savers

many

was

American

.

Total

iOIV'ft

984,833.27

......

Deferred Credits and Other Liabilities

President, Dill Manufacturing Company

<*:

Expenses

Savings Deposits

the cheaper

to

buy

no

including

possible
or

Hand and Due from Banks

United States Government Obligations.

Frederick C. Crawford

judgment in margins on securi¬
ties, putting them to 100% on the
gins

RESOURCES

8s Co.

Attorney

Frank M. Cobh

eight months later the

Reserve

itself, but not before business suf¬
fered

OF CONDITION

December 31, 1949

President, Cleveland Construction Co.

Robert F. Black

Honorary Chairman of the Board

when

fading,

controls

credit,

Federal

STATEMENT

Warren Bicknell, Jr.

Samuel Scovil

individual.

sellers'

TRUSTEES

Federal

debt at low

not

Tele¬
mar-

MEMBER

FEDERAL

DEPOSIT

INSURANCE

E.

Inc.,
mem¬

Angeles Stock Ex-

,

cover¬

agency

D.

affiliated

by change.

out

—

Stuart

and

commer¬

The insurance is
up to $5,000
each account and this covers
96% of all accounts and 46% of

to $10,000.

re¬

plan depended

the goodwill of the

the

dealers

for

Now

13

RFC

cial.

age

15

In
the old days, Government
million wasn't a partner.
It was an em¬
t It is one
Now it is a full-fledged
thing to be lending out and a $12,000 a year RFC1 man ployee.
the taxpayers' money and some¬ went in as head of the company at partner, one of those kind that
thing else again when it is the $30,000 a year on leave from RFC. share in the profits and not the
In
cash of depositors.
announcing that loan, the losses. And if things continue that
Not so long
RFC stated it considered its job way for
ago the RFC couldn't account for
many
more
years,
the
to
be
"putting out the little fires Government will wind
$10 billion. If a banker were so
up the boss
before
they become big ones;
,.
forgetful, you can guess where he
—the owner.
Which is what the
would land. Up the river or down We think it is better to help a
Atlanta way.
company while its problems are social dogooders want.

Where the RFC hand-picked offi¬
cer

(719)

CORPORATION

14

(713)

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

Thursday, February. 16, 1950

"First in War, First in Peace, First in the

Mutual Funds

lATIOhiAL
^

your

upon

RESEARCH
120

Annual

Reports Squeak

or

Mutual Funds whose shares

from

SECURITIES

by

In Wisconsin

request from

investment dealer,

NATIONAL

&

CORPORATION

BROADWAY, NEW YORK 5. N. Y.

are

registered in Wisconsin have not
thus far, in publishing their an¬
nual reports, violated the "color

provisions" of Wisconsin rules and
regulations, Edward J. Samp said
to
the
"Chronicle" today.
Mr.
Samp is Director, Department of
Securities, of the State of Wiscon¬

sin, and President of the National
Association

of

vestors

Bullock Fund
Dividend Shares

Securities

Institutional

Series;

Champion of

Fund, Inc.; Wisconsin Investment

Company.
Text

"The

or

CALVIN BULLOCK

inclusion

elaborate

The

of

material

de¬

scale

than

November

Registered in Wisconsin:
This department
consideration

tain

called

at

Criteria Established

announce

the election of

Samp,

when

asked

about

Vice-President of

our

firm

and his appointment as
1 Pacific Coast

in

not

the

holder of

make

interest

of

the

order

to

The

and which

question
loss

tax

a

can

annual reports become sales liter¬

after

a

through the inclusion of
extraneous
material,
he cannot
regard the reports as such any
longer. He warned that continued

involved to this department.

flagrant violations of this Wis¬
"code"
of

would

result

in

license.

a

premise

investor

regulation.
Some trusts, he
said; were turned down because
they were specialized funds mis¬
representing themselves as invest¬
ment trusts; others were refused
license

their

because

sales

proach indicated that the trust

To

longer such, but a package of
goods being sold to the public.

the

only

be

would

and

portfolio,

same

securities

eystone

reported

was

annual

to

have

attacked

reports of Mutual Funds,

emphasizing that they should only
be printed in one color. This at¬
tack was made during an Invest¬
ment Company Committee hear¬
ing in New York on Oct. 25, 1949,

Custodian
unas

which

at

nine

administrators

or

Blue Sky Commissioners of vari¬

Certificates of Participation

in

It

other

any

defined

as

in

the

quite
of

count

and

of

investing their capital
IN

BONDS
(Series Bl-B2-Bi-B4)

were present.
Samp is regarded

Mr.

the

curity
.more

crusade

(Series K1-K2)

COMMON STOCKS
'

(Series S1-S2-S3-S4)

as leader
State Se¬

Administrators to enforce
effectively the Spartan

ap¬

fact

actively

engaged

remaining states follow

his lead in this action.

his

In

letter,

Mr.

Samp made
reference also to his opinions re¬
garding Capital Gains, Return of
Capital and Dividends From True

may

jbe obtained from

Some of the funds whose shares

be sold in,

may

Tke

Keystone Company
of Boston
50

Congress Street

Boston 9,

Massachusetts




ing

dividend

for

sale

Bond

in

Fund

or are
Wisconsin

of

qualified
are:

Boston;

The

Boston

Fund, Inc.; Broad Street Invest¬
ing Corp.; Century Shares Trust;
Chemical
Fund,
Inc.; Eaton
&
Howard Balanced Fund; Fidelity
Fund, Inc.; Incorporated Investors,
Inc.; Massachusetts Investors Sec¬
ond Fund, Inc.; Massachusetts In¬

declaration
at

or

not

to

sell

to

year

has

more

when
time

the

(New York City)

April 21, 1950

Security
York

New

Field

Traders Association
annual

dinner

at

of
the

Waldorf-Astoria.

May 4-5, 1950 (San Antonio, Tex.)
Feb.

21,

(Detroit,

1950

Mich.)

Texas

Detroit Stock Exchange Annual
ers

Dinner.

the Plaza Hotel,

Feb. 21, 1950

(Philadelphia, Pa.)

Investment
of

Group Investment Bank¬

Association annual meeting at

Traders

Philadelphia

Association

dinner

the

in

Garden Terrace Room of the Ben¬

lune

5-8,

1950

(Canada)

Dealers Association

Investment

of Canada 34th Annual

jamin Franklin Hotel.
the

D.

(Washington,

26-27, 1950

Seigniory

Club,

Meeting at

Montebello,

Quebec.

C.)

National Association

of Securi¬

ties Dealers, Inc. annual meeting
at the Shoreham Hotel.
March 8, 1950
Eastern

(Philadelphia, Pa.)

Pennsylvania Group of

Sept. 26-30, 1950 (Virginia Beach,
Va.)
Annual

tional

Convention

of

Security Traders

tion at the

the Na¬

Associa¬

Cavalier Hotel.

management

within

which

to

maneuver.

(b)
not

Return of Capital.

approve

We

do

and believe it to

be

TEXAS ★ FUND
I

N

C

not in the interest of the investor
to make

a

holders

with

disbursement to share¬

the

the

Revenue

be

prospectus viay

announcement

Internal

obtained
dealer

investment

from

your

or

De¬

partment considers such disburse¬
ment

non-taxable because

return

it

is

in

reduction

company

this

BRADSCHAMP &

a

of

the cost

of

CO.

General Distributors

of

capital and telling the
shareholder to apply the disburse¬

304

Union

National

Houston

2,

prospectus from
your

Bank Building

need not

pay

a

tax

investment dealer)
or

Texas

When the investment

i

PHILADELPHIA 2,

on

proposed disbursement if re¬

tained, then it is our understand¬
ing that -the shareholder need not
pay a

tax either if he received it.

Having paid
to

invest

best

Income.
Prospectus

ac¬

Association

Bankers

than they will be during the com¬

his shares.

reported to be
in an effort to

on

loss may be quite dif¬
now
in
certain
respects

ferent

memory."

GREEN, British Historian.

per¬

tax

a

Investment

In

Feb.

that

close

whether

to

take

the

likely that

so

literature.

is

he
the

hand, the
determining the question

are

proach to annual reports and sales
He

if
as

business.

the

ment

have the

PREFERRED STOCKS

among

R.

EVENTS

han¬

standard

by

disbursement

dates

that

states

ous

INVESTMENT FUNDS

and to regard him with a rev¬

COMING

reporting.

company

is

sons

as

Although Mr. Samp said today
did not object to annual re¬
ports in more than one color, he

in

do

to abandon the purpose
function
of the
investment

company

trust and a faith such

in the presence of his

us

J.

a

Forum at Hotel Warwick.

One

be

factors

he

have won,

will

no

Attacked Fund Reports

men

fireside when their

own

Investment

excused

own

apply

would

ap¬
was

his

owned

his

be

investment company will be re¬
quired to do exactly what a pru¬

investment

Samp's

felt the touch of

almost unconsciously that men

was

which still hushes
—PROFESSOR

guide us in
making our decision, after an ap¬
praisal of the facts, is that the

consin

Mr.

It

you

which

dling

of

few other

erence

presentation of the factors

Many trusts have been refused
licenses for security sales in Wis¬
because

returning to

secured.

cling to Washington with

from a num¬
ber of factors, and failure to take

dent

strict

t

will

losses

dis¬

peace

or

advantageous to sell in

take

such

reserved for his

as

to

as

was

learned to

losses and thus wipe out

gains.

through war

never

that of

save

freedom

advantageously be realized

actual

the

its books

He commented that when

were

cretion.

ing

distribution

on

by

a meaner
ambition, that knew no aim save that of guarding
the freedom of hs fellow-countrymen, and no personal long¬

of capital
gains when it has unrealized capi¬

losses

as

little

jealousy, that

share¬

investment company

an

a

little in his outer bearing to

ficulties, his calmness in the hour of danger or defeat, the
patience with which he waited, the quickness and hardness
with which he struck, the lofty and serene sense of duty
that never swerved from its task through resentment or

made.

are

only

was

learned

such

by

revocation

BOSTON, MASSACHUSETTS

of

determined

consin

50 STATE STREET

declaration

in the forefront of a na¬
reveal

stood

ever

was

the weary fight went on that the colonists
little the greatness of. their leader—his
clear judgment, his heroic endurance, his silence under dif¬
It

we

Capital Gains. We think, as
general proposition, that it is

when it is

or

Putnam Fund Distributors, Inc.

We have arrived
which

figure

There

.

grandeur of soul, which lifts his figure, with all the
simple majesty of an ancient statue, out of the smaller pas¬
sions the meaner impulses of the world around him. . . .

so-

(a)

to
restrictions
on
the
"gaudiness" of annual reports and
sales literature, said that such de¬

ature,

Representative

before

disbursements

as

cisions
as

gains,

.

.

the

the

distributions,

conclusions

any
criteria had been formulated with

respect

MR. GILBERT B. PEARSALL

to

nobler

tion's life.

cer¬

investment companies, sell¬
ing shares in Wisconsin to know

could

if

capital

non-taxable

some

tal
No

time

want

to

as

of

"No

has had under

some

relative

and true income.

holder

by the distributor

for

restrictions

distribution

a

but

22, 1949

Investment Companies
Whose Shares Are

neces¬

sales material."

We

State of Wisconsin

To

sary to deliver the message of a
factual report, is an expense which
should not be paid by the share¬

Mr.

Samp Letter

Madison 2, Wisconsin

scribing (a) the advantages of the
company as a medium of invest¬
ment; or (b) the quality of its
management; or (c) the printing
of the report in colors or on a
more

Established 1894

of

Following is the complete text
of Mr. Samji's letter to Investment
Companies:

Restraint

Mr. Samp, a champion of mod¬
esty in annual reports and sales

Investment
Dealers

Selected

Department of Securities

industry in a formal letter to
"Investment Companies Whose
Shares Are Registered in Wiscon¬
sin," dated Nov. 22, 1949.
Mr.
Samp wrote that:

available

Investors

Securities

American Shares, Inc.; Sharehold¬
ers'
Trust of Boston;
Whitehall

the

from

National

National

Security Adminis¬

literature of Mutual Funds, created
considerable
controversy within

Prospectuses

Trust;

Corporation;

trators.

Nation-Wide

Countrymen."

By ROBERT RICH

SECURITIES
Prospectus

Hearts of His

his

interest

investment company.
be situations where

There

pany as

& ond ffutiJ, <0t

Investors/

no

by the investment com¬
to whether it will be con¬

sidered true

on anltattati

Bond

may

ruling has
been made by the Internal Rev¬
enue Department on some money
received

ATTENTION,

"acquisition" cost
money, it is in his
to
keep it in the

an

income

or

return

of

Write
dealer
and

to

your

local investment

to

Hugh W. Long

or

Company, Inc., 48 Wall

St., New York 5, for the offi¬
A

capital, and its disbursement may
justified at the year-end on

cial

that ground.

scriptive material about

be

These situations will

Continued

on

page

43

prospectus and other de¬
—

,

REGISTERED

COMPANY

INVESTMENT

INVESTING ONLY

IN

BONDS

PA\^

Volume

171

Number 4882

THE

COMMERCIAL

We

This

because

ment

and

Calling attention

public uneasiness

to

aggravating burden of taxes, along with
rising living costs, Republican party spokesman says root of
troubles

American

that

people

faces

what

—

the
do

to

about the Federal Government.

is

It

problem

a

that
the

is

minds

e v e r

of

The

estate
labor

men,

leaders,

housewives,
businessmen,
and

farmers

alike.

There

n

anxiety.

g

people

socialism in Washington.

people

before,

Second,

aroused,
the ever-

government and

the

ever-increasing
burden
of
taxes they bear.
Third, there is

great

uneasiness

cost of
I

the

over

high

living.

hope

show

to

that

you

the

is

think I

rid

the third.
1
demonstrate that the

can

the

But

cent.

Russia

In

Great

turn of the

reduce the cost of government and
the burden of taxation that we all

bear.

And

Karl

almost

Back

to

Marx

impossible

dis¬

to

what is

cuss

going on in Washing¬
without taking a look
what has been going on in the

ton
at

today

world
root

the

for
of

back

in

large

a

of

Karl

named

past

century.

trouble

our

philosophy

today

name

"Fabian"'
the

Fabius,
lieved

man,

Marx.

a

Marx

man

wrote

published

lengthy

manifestos

about

and

papers

revolutionary

a

thousands of words that

upon

wrote

and

that

he

that

the

uttered,

was

you

preaching

stomach

he

will find
one

thing

deserved

more

attention

headway.

minor

skirmish

law

time

and

went

the

that

radical

on.

Communists

differed

in

spirit.
the

had

beginning of time,
struggling against

been

method

productive than

more

when

history

of

man

ever

is

that

he

gains something after a
long struggle, his children and his
children's

children too

get how he
v

Marx,

it.

won

because

the

food

and

having
those

had
•

an

who

not

*An

61st

state

clothing

proclaimed
give shelter,

to

all,

began
increasing "appeal to
enjoyed freedom but

been

address

Annual

could

forced

to

fight for

power, they agreed on
everything else. They agreed,
example, that the more you

by

Dinner

Rep.
of

Martin

the

at

the

Builders

Ex¬




Communist

a

revolution.

In the United

States at the end

of the war,

most people breathed
sigh of relief, reached out their

a

to

arms

those

who

had

in

been
to

be

the

sowed

in

reaped

as

late

forties.

and '/ socialistic

the

If

government.

socialism

would

take

In

the

White

ecutive

thirties

whirlwind

a

The

planners

schemers

House

were

was

an

ex¬

and

to

advocate

them.

going down went
Total Federal, State and Local
collections

in

the

During most of these
spread

of socialism

Europe.
the

It

United

the

years,

confined

no

headway
but one

States,

European

country after another
was
falling prey to the Socialist
concepts.
Russia went Commu¬
nist in 1917; Italy went Fascist in

1922; Germany embraced Nazism
in 1933; Britain finally fell into
the grip of the Socialists in 1945
every

one

of

these

nations—

almost

confiscation

of

levels,

production

were

the

nation¬

Now,
this

take

a

total

war

were

any

war¬

state

used

to

collections amounted

two

the

billion

Federal

three

responsible

that

deeply into

their income—all in

the

name

of

tax

have

America,
Deal

the advent- of the

flung wide open the
long been shut to

Communists

and

Socialists

They poured into Washington by
the hundreds. They took modest
and

.

and

actually

they

schemes
saw a

Hisses

the

beavers

by

the

few of them

into

enacted

Wadleighs,

like

worked

hatched

law.

;

The

Chamberses,

went

even

and

further.

They secretly joined the Commu¬
spy

apparatus.

who back in the

Those

of

us

30's tried to tell

the nation that this

was

going

on

for

But

had

what

had

it

deal

great

a

leap

the

in

the

of
tax

has

war

in

all

that

outflow

of

to

agi¬

in

fa-

of

v o r

of

been

time

was

was

result

British

gold
t

Dr.

Paul

conveyed the impression that
in

Britain

have

sufficiently

possible

and

im¬

now

to

even

con¬

make

it

in

the

of

having to

Federal

any

and

people

we

tax

income

tax

in¬
pay

at

all,

spread the benefits of that

reduction

in

such

seventy-one
cut

making
dollars

lowest

was

less
a

nothing

else,

gress enacted

in

the

given

than

year.

a

of

to

five

the

people

thousand

necessary

to

con¬

As a result there has
increase of pressure from
United
States, and British
an

the

supporters
of

of

late

of

convertibility have

been

once

in

more

evi¬

happened? With al¬
forty-five million people re¬
maining at home in November,
1948, the United States for the
President

majority

of

century elected

who

the

didn't

have

popular

a

vote.

changed.

has

not

but to

The influx

been

provement

due

of

the

of gold

to

non-recurrent

im¬

an

trade

balance

covering of

short positions.
The extravagant
claims of British cabinet officers

concerning Britain's

progress will

have to give way to sober realism
as

soon

the general election is

as

on

million

page

induce

ways

most

soft-currency
securing ster-4

countries to aim at

ling

for

sion

into

the

of

purpose

conver¬

dollars.

*

This is true not only regarding

also regarding regional con¬
vertibility within the framework

of
the proposed
O.E.E.C. intraEuropean payments system. If, in

a c q u i r e d
operation of such a
should become convert¬

any

the

system,
ible into

gold, there would be the
inducement for Continen¬

utmost

tal countries to increase their

imports from Britain, as a means
securing gold. In theory other
participants in the scheme would
of

In

quences.

There; is
Britain
would

a

school of thought in

according

to

which

be possible to resume

it

con¬

could

yond
has
of

be

doubt

consolidated.

the

fact

that

Be¬

far larger amounts
balances than she could

afford in prevailing circumstances
has
been
primarily responsible
for

her

difficulties.

dit .Nehru
London

paid

When

brief

a

Pan¬

visit

to

last

year, a headline in
the "Manchester Guardian"
greet¬
ed

him

vast

amounts

devaluation
there

further

on

the

Who

sterling that
position where

a

became
be

can

releases

comparable

release

of

placed Britain in
And

Man

Bank," meaning that it

his insistence

was

of

"The

as

Broke the

of

scale

inevitable.
doubt

no

that

sterling
as

two

duce

years

on

during

and

Area,

would

export

and

for

a

the

undermine

the

Dollar

partly

by creating
excessive supply of sterling.
This
that

does

balances is
become

not

an

of sterling

solved sterling

would

a

so

is

exposed

more

conse¬

however,
because

countries which have

pean

stantial
It

if

gold

a

sub¬

reserve.

is, therefore,

Sir Stafford

to commit his

understandable

Cripps is reluctant

country to

under which the

scheme

a

dollar-hunger of

Western Europe might have to be
satisfied largely out of Britain's

inadequate gold

reserve.

As it is,

that gold reserve has to provide
for the requirements of the Ster¬

ling

Area

countries.

considerable

This

is

liability, but at

a

any

rate the governments
concerned
have agreed to moderate their de¬

mands
for
gold.
If,
however,
sterling should become automati¬

cally convertible, at any rate in
intra-European relations, then it
will

be

difficult

governments
countries

of

to

of

to

self-denial,
ments

induce

the

Commonwealth

continue

seeing

to

exercise

that

countries

govern¬

outside

the

Commonwealth would be allowed
to

however,

mean,

the problem

once

Britain

practice,

she is less well defended by tariff
walls than any of the other Euro¬

Britain

released

these

ex¬

ports to Britain and reduce their

be equally exposed to such

over.

help themselves to the British

gold
soon

In

reserve.

stances

the

gold

become

such

circum¬
would

reserve

exhausted,

for

and

the second time within three years
the convertibility experiment
would end in disastrous failure.

disastrously in 1947. For

Britain's external wartime indebt¬
edness

not

was

the

sole

cause

of

32

Amotf, Baker Reopens;
Boston Branch

the failure of
was

all

convertibility. There
also the large adverse over¬

balance

result

of

of

which-

payments
many

*as

soft-cur¬

acquired
large
sterling for the pur¬
converting
them
into

of

of

dollars. What is not realized
now

a

countries

rency

was

people who did not vote in 1948,

Continued

convertibility of sterling would al¬

not

is

that

the

premature

even

uni¬

lateral

mandate.

forty-five

a

the

with the Belgian pro¬

pose

those

scarce

given

are

So long as dollars
restoration of the

balances

fifty percent of those voting be¬
hind him, was back at the old
stand, advocating socialism and
To

so.

through

amounts

a

they

posal,

President Truman, with less than

contending he had

if

in 1947 the excessive reduction of

And what

a

than

accordance

failed

this

dollars

now

attractive

dence.
Yet it should be obvious
that the fundamental position has

the first real

most

first time in

devaluation.

even

more

but

question

sufficiently scarce cur¬
rency to justify a repetition of the
convertibility
experiment
that

road-1

recent

been

the

By this tax cut, if
the Eightieth Con*

path of socialism.

supposing

vertibility.

fashion

percent

for

international convertibility on the
lines of the experiment of
1947,

reconsider

million

brackets

much

remain

deliberate

ditions

its

option to do

Einzig

optimism of government speakers
during the electoral campaign,

proved

of

dollars

o-

g e t h e r with

the

is no reason

sterling, and most holders of ster¬
ling would gladly switch over into

the

reserve,

an

reducing their
Britain, thereby
sterling surplus for the

Nevertheless,

a

substantial in¬
of

countries with

from

a

There

are

crease

these

that in this respect the situation
has changed fundamentally since
1947.
It is true, sterling is now
a
more
attractive currency as a

bility of ster¬
ling. The fact

sterling once more, partly by re¬
ducing Britain's capacity to pro¬

come

provided

opportunity for securing muchneeded dollars by
increasing their
sales to Britain and

purpose of conversion into dollars.

last

by the Republican Eightieth
Congress when we relieved seven

fairly obvious that the restoration
the convertibility of
sterling

of

the

converti¬

there

made in repaying

error was

securing

early restora¬
tion

exchange position of Britain

purchases

an

voted

block

doors that had

was

only
reduction the American people

total

more

increase

burden is

that

capital and cut

burden,

for nearly five years and the
still with us. The

over

alized, and the people fell under
drained off their savings and their

By
imposed

Of course, war was

enormous

burden.

to

dollars.

taxes

times

been in 1933.

this

?

say, "Let's
look at the record."- In 1933

tax

the

vertibility if wartime sterling bal¬

great political leader

as a

by 1948 the
twenty-two times

the yoke of statism.

Government

tation

ances

almost

was

made

rise

renewed

that

years

Increase in Tax Burden.

and

the

that

willing to listen to their

schemes

1941

Spread of Socialism

score

and

firmly entrenched in Washington.

roughly

and

They

some

pbace,
happiness
prosperity.
But the breeze

less

on

over.

the

to

of

in

In

returned

alive, and looked forward
years

they
were taxed
long enough and high
enough, they would soon be help¬

New

de-/

the

depend

In

was

on
a
dozen
Europeari
countries; Britain went Socialist;
and Italy teetered in the
balance; China fell the pangs of

people, the-less they
would be able to help themselves,
and the more they would have to

in

commu¬

Curtain

actually higher than at
time peak.

to

al¬
dis¬

proof of this
Iron

followed the end of the

nist

change, Rochester, N. Y., Feb. 2, 1950.

the

The

us.

most

jobs

he

"

that

often for¬

and

attaining
for

has
the

scended

tax

life.

the

to

as

France

of

And he had made enormous

But

socialism

given

that during

war, no

of

reversal

gold from Britain, brought about
by the devaluation of sterling, has

the last quarter of 1949

war

favorable

LONDON, ENG. —The tempo¬
rary

undergoes

complain

But

up.

com¬

:

balances of wartime blocked
sterling.

some

War

upon

and

providing them with the needs of

come

willingly

ended than

up.

gled for freedom of spirit, and for
his own dignity as an individual.

gains,

of

substantially improved and

every

Taxes instead of

tools

or

he had prospered and he had be-

>

made

one

War

Because

always tends to make
people
helpless—either
by
op¬
pressive taxation or by outright
destruction. Scarcely had the war

was

quick
Slowly, the Social¬

another, getting approval of

Although

been

fight it piecemeal

Britain

won

Socialists

ways

had

and

World

job.

rightly

went

to fight

erty,

oppressive
government " in
all
forms. Essentially, he has strug¬

*

Quintos

way

thrusts

withdrawals.

after

from

best

to

was

in

from? They

came

the

quick

ists

the

Roman general who be¬

that

They

think

Russia, Italy, Germany and Great
Britain—^-taxation was raised to

Since

*

the

than the soul; that the
physical necessities of life were
more important than
religion, lib¬

man

-

before

you

name,

a

battle

a

the

doctrine which he called socialism.
If
you
examine the
thousands

*

do

took

goes

to

measure

one

The

thick books about his theories and

7

Britain,

where

taxed

Goes

in

icould

it

the

taxes

century, the Socialists

as

planners in Washington; and the
way to cut the cost of living is to

per¬

Communists

proved

banded together in a group which
called itself "The Fabian Society."

law

is

It

happen.

to reduce taxes is first to get
the socialist schemers and

It

them.

ninety-eight

the

finally

of

Trouble

believe

possible, for ex¬
two
percent
of
a

that

radical

of

do

seem

this

Root

to

was

Second

could

one

ciples

remaining

rich,

and the tax base

heavy taxation in time of

nism.

to cut the cost of government

way

and

causing

The

pleted

more

were

not

the

who did not feel

woman

American

amazingly
outspoken—but people

did

not

rose

ever-increasing pinch of tax^s

basis.

groups

and

—by

first is causing the second, and the
second

did

power

piecemeal

a

simply

are

are

over

increasing cost of

on

Both

frank

was

ample,

genuinely

American

it

achieve

to

way

group

Calling themselves So¬
they contended that the

cialists,

taxes

spread.

gaining power.

population could seize control of

concerned about the trend towaras

never

second

tricky.

of

means

Federal

From soaking

or

has not

American

rates went up

as

called them¬

group

reasons

the
American

as

two

sound

i

the

into

three

First,
Martin, Jr.

divided

are

for this grow-

Hon. J. W.

a

period

man

the

this experiment. Holds international

proud of the record

The

EINZIG

British

their

manage

PAUL

Commenting on outlook for resumption of
convertibility of
pound, Dr. Einzig foresees little likelihood of renewal of

empty

govern¬

scarcely

infiltration, violence, and revolu¬
as

for

that

worth

steadily.

selves Communists and advocated

tion

real

they

One

groups.

on

y o n e—

builders,

headway,

traded

the government turned to soaking
the poor, and there was

it. As the followers of Marx made

By

provide shelter, food

am

was

this

resulting in higher living costs.

tonight about the

problem

1

15

Can Sterling Be Made Convertible?

Americans

way of
fighting for then
fighting for today.
It is noteworthy that
during all

a

I want to talk

of

and it is worth

doubled and half of individual incomes would have to be
paid

biggest

could

made.

we

philosophy of Karl Marx. Cites
Spread of Socialism here and abroad, and contends if Adminis¬
tration's spending policy is adopted, Federal
budget would be
in taxes,

us

clothing if the people would

life

be traced to

can

be

not

affairs.

of government and

our

freedom

only let government

ever-increasing cost

over

upon

still believed that the

we

should

Congressman from Massachusetts
Republican Leader of House of Representatives

"Tories."

and

heaped

was

(719)

ridiculed.

and

promises—promises

S.

CHRONICLE

"reactionaries,"

Macauleys"

abuse

cherished

By IION. JOSEPH W. MARTIN, JR.*
U.

at

called

were

"Lord

Government Spending

FINANCIAL

laughed

were

What to Do About Federal

&

convertibility of sterling
largely responsible for

Britain's
in

adverse

relation

currency

to

trade

balance

dollar-hungry soft-

countries.

Yet it

seems

j

BOSTON, MASS. — Amott,
&
Co., Inc., Investment
Dealers, of New York City, an¬
Baker

nounce

the

branch

office

fice

Square

reopening
in

the

of

10

Building,

their

Post

Of¬

Boston,

Mass.
The

office

will

be

under

management

of

ington,

previously

sociated
Boston.

who
with

Henry

Moors

&

W.

the

Arm-

was

Cabot

as¬

in

16

COMMERCIAL

THE

(720)

FINANCIAL

&

reasonable

On Economic Horizon

JOHNSON

Bank stocks since the final months of 1949 have been

attract¬

tions.

material effect upon the reported

earnings and/or the demand in

Of

importance in this connection is the matter of
Corporation assessments. While in for¬
there was a certain amount of agitation about these

primary

Federal Deposit Insurance
mer

years

charges, nothing was accomplished in the way of reducing them.
It now appears likely that some adjustment in assessments and
coverages will be made this year.

This

the

Moody's,

is

sentatives

We

failures during the past several

/The bill has received
of

there is
this

large

a

seems

of agreement on the principles involved and
the passage of legislation favorable to a reduc¬

area

to assure

tion in the present effective rate of assessment.
If such

in

diminution

could be shown

around 8-10%

duced charges

after taxes

was

providing the full amount of

re¬

carried through to net operating

earnings.
in the current outlook for share
prices and one which may become of increasing importance is the
possibility that pension and trust funds will enter thq market as
more active purchasers of bank shares.
factor

important

The

growth of pension plans is expected to increase materially
the investment funds seeking outlets. The relatively low yields
available on quality bonds and the need for income to carry out
the various programs has a tendency to limit the quantity of funds
that it is desirable to place in such low-income obligations.
Conversely, the yields available

quality equities presents
an opportunity for such funds to increase their income.
Because of
the long dividend records and the relatively stable earnings, bank
stocks rank among the highest investment issues. For this reason
bank stocks are considered likely candidates for inclusion in pen¬
sion funds fortfolios if and when such funds begin purchasing
present level of earnings of the

larger banks provide a
good coverage lor existing dividend rates. Approximately 60%70% of operating income is distributed. The current yields avail¬
able in most
are

cases

range

P.

between 4%-5% and the various shares

reasonably priced in relation to book values.

Already there have been reports that some of the funds have
recently been adding quality common stocks to pension portfolios.
Obviously, this could be an increasingly important factor in the
market for New York City bank stocks.

time

the
re¬

and

Boylan

going

to

listen to busi¬

We

ence.

have

so

I

both

of

houses

of

mem¬

Congress
of

branch

tonight.

us

the 150th
Anniversary of the moving of the
seat of government from Philadel¬

As many of

phia to Washington.
know, plans

der

Free Economy."

a

sponsored
sections of

It is being

Government.

it.

approved

All

national life have

our

Such

exposition has great possibili¬

an

in

ties

dramatizing

the progress

country under our Ameri¬

our

of life—call it
will—which has brought

system—way

can

what you

a

way

invited to participate.

been

us

the

by

has

Congress

of

under

are

Freedom Fair here next

to celebrate "150 Years Un¬

year

far in

so

the last century

provements and expansion, or of

drawing

unless

company,

will undertake
essential.
It will not

situated,

only

usually

the

the large sums needed for

invest

growth
it

and

The New York Stock Exchange,
formed not long after the Revolu¬

tionary War,

and

now

but three

months

its

158th

Anniver¬

is

sary,

of

proud

historic

the

parallel between it and the Re¬
public.
To me, the significance
of this parallel lies in the fact
that free markets and

a

free

econ¬

one

with¬

cannot have

omy—you

utilize

cannnot

the

out the other—have existed in the

United States for

a

depression

century and

a

tions

or

other institutions.

For Federal income tax purposes

of the dividend income received is deductible.
at the full rate.

income

as

on

bond interest.

companies

where

there is

a

as

85%

Only 15% is taxable

This in effect makes the tax rate 5.7%

against 38%

nificant to institutional investors such
ance

bank

on

dividend

This is particularly sig¬
fire and casualty insur¬

desire

to

expand

investment

income.

of

on

as

Massachusetts

liberalizing the legal limi¬

investments in equities, the above considerations could

become increasingly important in the market for bank shares.

investment.

those
150
years,
the
well-being of the nation has been
all

at

times

tion

dependent

balance between

proper

investment.

and

can

on

To cite an example:
twenties, consumption was

neglected.

Income

distributed.
at

the

There

top—not

bottom.

of

is

is

neglected.
and

it

Circular

on

Buying Zone
Request

takes

young
force

Laird, Bissell & Meeds
Members

New

York

120 BROADWAY,
Telephone:

BArclay 7-3500
(L. A.

Stock

Exchange

of

at

the

under¬

Today,
Under¬
the part

business.

alarming
we

about

people

entering the labor

Industry

cannot

provide

these

jobs unless it can raise own¬
ership capital. Ownership capital

new

Bell

Teletype

NY

on

During the
the war, a

troubles

due

were

to

under-consumption and that

sav¬

ings should be taxed away
spent in an effort to increase

and
con¬

sumption. Their formula was ac¬
cepted and the Government taxed

This tax philos¬
our Federal
It
has not been

spent freely.

ophy still underlines
tax

policies.

changed, although during the
afterward

and

to levels that

consumption

war
rose

this

time

the

tax

theory

was

Meanwhile the equally

accepted.

vital problem of investment con¬
tinues
In

be

to
a

neglected.

I

sense,

♦An address by Mr. Boylan at a dinner
meeting of the Association of Stock Ex
change Firms, Washington, D. C., Feb.

7, 1950

concern).

that

minds

of

I

are

of

what

upper¬

mil¬

these

both

(and this
immediate

most

referring to taxes

am

diminish

that

incentives

the

stockholders

the

of
the

and

of business.

managers

(2) The

growth of
establishment,
to¬
gether with the indifferent atti¬
tude of large numbers of people
with respect to the necessity of
shrinking the size and the cost of
enormous

Federal

the

Government.

(3) Tax-free organizations that
are

doing

now

estimated

an

$10,000,000,000 business annually,
resulting not only in unfair com¬

petition, but in
of

tax

substantial loss

a

the

to

reveni*2

Govern¬

ment.

taking over by Gov¬
lending
functions
which
properly
belong to our
private capital markets, except
The

(4)

of

ernment

tunity to mention another factor
which
and

is

tend to do

I do not pre¬

my van¬

tage point as the Chairman of the
Governors

of

York Stock

the

of

Exchange, I

New

in

investors

to

This

is

a

very

widespread impression that Gov¬
business

and

ernment

are

un¬

friendly—that some deep-seated
antagonism divides them. I doubt
whether this will stand up

analysis.
nizes

the

recog¬

necessity

urgent

economic

our

under

fully

Congress

keeping

of

system

this it is in com¬
with business.
Congress is an able, hard-working
body, both vigilant and coura¬
and in

strong

plete

agreement

with

geous

interests

respect
the

of

those

that

to

best

the

I

country.
who

am

are

ac¬

quainted with the complex prob¬
lems

with

and

with

it

which
the

it

has

share

works

deal

to

under

pressure

my

sym¬

pathy and respect for our Sena¬
tors and Representatives.

with his authority.

so

Certainly, however, from

disturbing

business.

to

which

the

for

speak

American investor.

Board

briefly,

you,

fears

the

factor

undreamed-of

were

A

friendly relationship between

business and government is

desirable, and
this

at

highly
than

never more so

in

juncture

national

our

a

life. The need for harmony among

position to appraise the attitudes

all segments of our population has

am

I know what the in¬

of investors.

the former investor and
potential investor are

vestor,

the

even

thinking about in terms of their

unwillingness

or

capital.

The

Exchange

600

some

with

firms

member

York

New

has

to

than

more

1,500 offices located throughout
the country. We are constantly in
contact

with

the securities of Ameri¬

own

industry.

can

firms.

They,
in contact with those

in turn, are

who

these

These

firms

also in touch with former

the

are

owners

have become discouraged to

who

point

where

they

have

dis¬

posed of their investments.
firm

member

flung

far

aware

of

that

fact

the

organization,

it is, is acutely

as

Our

an extremely large
people would like to
employ their surplus funds. These

number

of

people would form the habit of
if

investment

conditions

A
we

free

under

economy,

and

which

cannot continue to

meet

the

needs

ex¬

of

a

rapidly growing country without
an increasingly larger number- of
investors.

It has been

truly said

forgotten person in this country.
Yet,

the

women

millions

who

invest

of
in

I

restraint
ternal

than

greater

this

at

earnestly appeal to all for
in

the

interest

of

in¬

strength and solidarity.

Whatever

weakens

business

confidence, retards the country's
economic progress. All of us can
remember
seemed

the

to

breath

time

be

to

the

business

in

one

genius

and

in

next breath to denounce

the

ators

and

perity
ing

course,

the

to

would
the

necessity of keeping

like

system

strong,

remind

you

to

for

rewards

taxed

I

that

achievement

are

steeply that they reduce

so

the

incentive of those

ate

business and the

those

cre¬

pros¬

engaged in exploit¬

economic

our

our

of
the

unsuspecting public.
Of
this doesn't make sense.

an

As

guardians of

as men

it

when

popular

praise

American

who

would

ply its capital.

have prospered for more than

150 years,

been

never

time.

who oper¬

incentive of

otherwise

sup¬

were

made attractive for them.

that the American investor is the
1-1248-49

the

sure

at

pand

each year.

NEW YORK 5, N. Y.

Cibbs, Manager Trading Dept.)




on

much

trend, par¬
consider that
$5,000,000,000 an¬
nually in new investment to cre¬
ate
some
700,000 new jobs for
an

ticularly when

Bank Stocks in

of

developed.

individuals

This

too

enough

condition

A

well

not

was
was

investment is evident

Request

Imbalance

economy.

investment

Analyses

a

is always upsetting to the Ameri¬

consumption

insurance stocks

upon

consump¬

cloud

a

preceding

our

Stock

During

In the

With states such

tations

thrift and

a

school of economists decided that

and

tell

I

the

in

I would like to take this oppor¬

for

why under¬

reasons

is putting

investment

supply

to

review

to

me

moment

most

en¬

when emergency conditions exist.

Permit

increasing consumption and from

attraction

and

groups.

half, drawing their strength from

lends

research

and better products at lower

new

stocks

which

Thus,

productive efficiency to create the

is the tax advantage they have over bonds when held by corpora¬

consideration

development.

and

willingness

Another

earnings, a
exceptionally

is

current

on

half.

from

necessity of
finance im¬

to

the economic horizon.

This year, 1950, marks

a

the

debt

ing standards of the lower income

Government with

to hold

into

prices needed to improve the liv¬

Executive

the

with

Faced

going

hope

distinguished

many

of

bers

are

by

average

the experi¬
happy indeed to

ness.

that all of you enjoy

on

equities in quantity.
The

.is

you

Another

listening to

Government

and

assessments

by the FDIC should be
made, it could have a favorable effect on operating earnings. For
New York City banks an increase in the operating income of
a

re¬

side

versed

large amount of official support with

a

the

the

on

be¬

position is

Robert

important authorities suggesting a credit of as much as 75%
annual assessment.
Regardless of such details, however,

some

ing

This

The important provisions of the Maybank Bill call for an
increase in the deposit coverage from the present $5,000 to $10,000
credit against charges for the next year.

accus¬

Government.

ments.

a

business.
are

to

in

have been practically nonexistent. This fact combined with
the excellent present condition of the banks and the large reserve
of the FDIC has resulted in the present bill to revise the assess¬

of

tomed

ceiving

years

as

favorable

into debt.

to¬

repre¬

that

people:
(1) Restrictive taxes

Last year, as measured

the

qualities

lions of

and

brings

gether

during the past 15 years and the growth
in deposits, the FDIC has been able to repay its original capital
and to accumulate a reserve of over $1 billion.

assessment

May
most

Government

it

pro-rata basis of 60% of the net

on

influences

and

causes

yield was
2.96 per cent for corporate bonds
and
6.63
per
cent for common
stocks. Thus, it theoretically costs
a company 2%
times as much to
obtain ownership capital as to go

of the low level of losses

a

available

now

terms.

Exchange Firms, held so
in the nation's capital,
of special importance because

early thirties the FDIC has charged the insured banks an annual
assessment of one-twelfth of 1% on their total deposits.
Because

and the refund or transfer on

is not

of Stock

present there

Deposit losses due to bank

Association

fittingly

is under consideration in Congress a bill
(Maybank Bill) the effect of which would be to reduce the annual
assessment by approximately 60% and raise the deposit coverage
from a maximum of $5,000 to $10,000. Since its formation in the
At

of

also their

danger our country.

as

dinner

mind

tutions, and their rejection of the
forces

disturbing factors: (1) restrictive taxes; (2) high
cost of government; (3) unfair competition of business from
tax free organizations; and
(4) government lending to private
industry.

the market for bank shares.

am.

thrift, their faith in American
industry, their devotion to our
free economy and our free insti¬

horizon.

and lists

I

of

a dark cloud on eco¬
Says free economy cannot meet needs of
growing population without increasing number of investors,

nature these considerations could have a

of their

Because

in

have

underinvestment in equity capital

sees

nomic

primary reasons for the recent interest would appear to
arise from factors which are not directly related to bank opera¬

citizens.

suppliers of capital, without which
our
system would perish; but I

Exchange

Asserting wellbeing of nation depends on proper balance of
consumption and investment, N. Y. Stock Exchange executive

year, the

they
would

speaking of them not only as the

Chairman of Board of Governors, New York Stock

ing increased investor attention.
Although the outlook for earnings during 1950 is relativelyfavorable and results for the period should be near those of last

dollars

treatment, are among

useful

most

our

By ROBERT P. BOYLAN*

This Week—Bank Stocks

invested

their

and

that

assurance

receive fair

numbers
if given

whose
increase

industry
and
would greatly

Underinvestment— Cloud

Bank and Insurance Stocks
By H. E.

Thursday, February 16, 1950

CHRONICLE

men

and

American

eating
given

Such

taxation is

the forces that have
America
its
strength—a

away

strength that grew out of incen¬
tive and
among

What
all

of

strength that is unique

a

the nations of the world.
we

call the good life, for

our

people, can only be
a dynamic and ex¬

provided

panding
incentive.

by

economy

stimulated

by

Only the Government,

Continued

on

page

37

Volume

171

Number 4882

THE

COMMERCIAL

FINANCIAL

&

CHRONICLE

(721)

17

and

Friendly Society, in a hum¬
in Ruthwell, Dumfrieshire, Scotland, to abolish
pauperism through industry and

The Widow's Mite and
The

ble

Indispensable Penny

cottage

Canadian Securities

thrift.

Benjamin Franklin and "Poor

By ALEXANDER WILSON*

By WILLIAM J. McKAY

Richard"

The writer satirizes the
and

unjudged

"time

and

prodigious possibility of the

of

interest

of

that the mind of

th

versatile American,
Franklin, printer, phi¬
losopher,
author,
inventor
and
possibly America's ablest diplo¬

e

mat and statesman reverenced the

money

man

since the Birth of Christ 1 A. D. to 1920.
tion of the

lievable

can

The interest evolu¬

Penny from 1920 to 1950 reaches
figure bearing witness

money

almost unbe¬

an

the "Miracle

to

That nifty little
cent

coin known

as

piece,
the
children's
friend, the humble despised Penny,
has a greater circulating velocity
-

With

of

than any other

piece of
oh

money

earth

and

still retains its
rank

popular

of the block

he

left

home

to

circu lation

verbial

less job. From infancy,
nickel

youth

5 cent

which would make the

three

and

dollars

manhood,

tions

pro¬

week

a

If there

his

make

has been

free

saver

Penny

offer

we

Who
could

to greater importance

rose

any one

fallacy

of

who
these

more

any

ques¬

lines,
positive

proof of the might of the Penny,
than the subjoined interest table.

respect

our

be

the

need

or

childhood,

for the humble and often dispised

piece,
sadly
displaced in

or

the

near

alone in the world in the

way

medium.
The

the

and independent of indigence in
big city school house.
The Old Sage of the
Is there anyone who has for¬ later life.
gotten the one, two, three or four City of Brotherly Love thoroughly
Pennies a week which he earned, believed in the Scotch adage that
for
performing daily chores at "Many a mickle makes a muckle."
home or on the farm, maybe be¬ (Ask your librarian if this needs
fore he attained his maturity or explanation.)

before

our

as

most

Franklin,

Benjamin

apostrophe of happiness and suc¬
cess
was
the saving of Pennies

the middle

is

there

among

glibly tell

who

us

off hand in

you

purchasing

slowly matured terms of money how many dollars
in
the
into the spring time of manhood, is indicated
grand total
the summer of endeavor, the au¬ listed below.
Billions are a mere
trifle
in
the
final
tumn of final achievement and the
computation

value buys less

winter

this

in

inflated

and its

age

than

now

fore

be¬
Alexander Wilson

water

were

increased to the dime level.

Once

upon

able
to ride in the New York subways
for

time

were

we

nickel

or,
as Mr.
Shonts,
Interborough
Railway
President, expressed it, "until we
were
unconscious."
Today, the
once respected nickel will hardly
a

former

buy anything tangible unless it is
a small
package of Smith Broth¬

moment, how
out Pennies
everyday, everywhere,
to make
exact
change
(or
receive back
change for broken purchases).«such
as 6 cents 7, 8, 9, or 11, 12, 13, 14
Stop and think

times

many

and

26

we

from

on

so

to

a

pay

16 to

the

all

29

19

or

21

to

with
the
dollar unit.
The startling fact is
that the Penny is King, because
24

or

each

10

it is

increase

cent

and

way

up

to

be used 80 times in

can

dollar

the

to

from the one cent piece

way

mark.

housewife

the

No,

live

cannot

earner

and

wage

without

the

lowly but mighty Penny in their

daily

the

with

transactions

•

butcher, grocer, shoemaker or to

sales taxes or buy postage
stamps.
Without the indispens¬
able
Penny neither buyers nor

pay

For

Children's Best Friend

have been brought up on the vir¬
tues and powers

Could

or

reward

a

for

other

lovely and affectionate things.

A

Penny in our childhood bought the
cent's

coveted

tine

worth of

stick,

peppermint
some

is

a

candy,

a

lolly-pop or

drops, a Penny valen¬

gum

other wonderful pur¬

or some

in

It is

more

utility

a

it

in

Penny
work or

vast

in

piece?

-

The

Little

culate

of

too, that it

and

is

still

two

designed to
habit in

in-

d

o.

The

to

cent system of

For

lonely .cent

How

in fact

that

our

ado¬

our

first

benefi¬

most

personal property of

owes

some

a

savings

year

1810

the

that

chase at that little

of

♦Writer

Will

candy store in

"Why a New
Not
I nsure

in

an

jaunt,

Uncivilized World," Nov. 16,

Feb.

13;

"Is

Capitalism

"A
Critical View of American Politics," Oct.
Cause

cf Wars?"

28,

1948;

"Straight from the Shoulder
Gov. Dewey," July 15, 1948;

Advice

to

Nov. 27,

1947;

without Foreign
"A Plan for
Solving
the British
Crisis," Sept. 22,
1949:
and "The 'Sun' That Was," Jan.
America

Trade?"—July

12,

Prosper
29,

1948;

1950.




extreme

can

1950

years

bank, called

first

the

to

please take notice

$252 billion debt would
insignificant today in the
of what the mighty Penny

do if it is saved and not mis¬

spent

19

ours

in

sound

foolish

taxes

and

with protective

It

is

that this

of

mind

un¬

buried

and

in

real

$24,478,978,744
of
real
gilt color

so

many

Alben

W.

gold,

gold,
feet below ground

Barkley

Continued

Savings

on

and

his

page

29

At the end

factors which have

bearing on the
position.
as

question

that

Amount in Dollars
...01

.1.31

200

172.93

22,740'
2,990,300

393,230,000
51,711,000,000

1100

6,800,000,000,000
894,210,000,000,000
117,590,000,000,000,000. "■
15,463,000,000,000,000,000
__2,033,400,000,000,000,000,000*
267,400,000,000,000,000,000,000
35,163,000,000,000,000,000,000,000.

^

1200
1300
1400

-4,624,000,000,000,000,000,000,000,000
608,060,000,000,000,000,000,000,000,000"
79,961,000,000,000,000,000,000,000,000,000

1500

1600
1700

1800
1900
1910

1920

-10,515,000,000,000,000,000,000,000,000,000,000
1,382,700,000,000,000,000,000,000,000,000,000,000
181,830,000,000,000,000,000,000,000,000,000,000,000
296,180,000,000,000,000,000,000,000,000,000,000,000
$503.441,000,000,000,000,000,000,000 000,000,000,000
1

*

1

)

l

eco¬

In analyzing the

whole there is little

a

the

incon¬

present

vertibility of sterling is the weak¬
est link in the Canadian economic

chain.

If

level

sterling

could

be

convertibility

at

its

current

strengthened and
restored
Canada's

difficult

most

economic problem
automatically solved.

be

it is

interesting therefore to con¬
jecture in what manner this might
be
accomplished
and
whether
has

already

some

progress

made

in this direction.

of

the

the

been

Already

border

the

to

Dominion

effect

should

that

in¬

accept

convertible sterling in payment of

exports

the

to

there

and

United

Kingdom,

little doubt that

is

the

nptter is receiving official con¬
sideration.

On

both

sides of

the

the
problem of sterling
convertibility
is
becoming
an
urgent issue and the tripartite dis¬
border

cussions that

will

take

place fol¬

lowing the British election should
produce constructive results. Can¬
ada

therefore

is

probably

pre¬

pared to direct its economic pol¬

icy

in

intelligent

anticipation

of

favorable outcome of the U. S.¬

British-Canadian meeting.
World

gap would present few difficulties.

addition

In

for

the

settlement

to

bear

of

the

difficulties of the

democracies.

on

eco¬

the

to

scheme

of

sterling
con¬

vertibility an agreement for the
practical revision of tariffs be¬
tween

the

dollar

and

sterling

would widen still
scope
for increased

areas

further
U.

S.¬

British-Canadian trade.
The

underwriting of sterling at

present practical
the

loans,

place

and

of

the

level

would

outright gifts,
various
global

schemes which in the final analy¬
sis have a similar objective in
view.

The

stabilization

of

the

world's key currencies,

the U. S.
Canadian
dollars,
and
the
pound sterling, would effectively
pave the way for multilateral ex¬
change
convertibility
and
the
and

restoration of

is to be hoped
dent

trade

the

in

her

ability to
despite

restrictions

apparent

is indeed

the world. It

that Canada's evi¬

confidence

remove

normal flow

more

a

of trade throughout

current

based

difficulties

intelligent

an¬

ticipation of bold constructive

ac¬

on

tion along these lines in the

period

immediately ahead.
During the week there was lit¬
activity in the external sec¬

tle

of

tion

the

bond

market

apart

from the successsful

placing of the
Quebec 5-year 2Vgs, in which

new

there

were

small

premium
The

price.
dull

and

was

also

initial

slightly
a

dealings

above

the

internals
small

at

a

issued

continued

easier.

There

decline

in

the

corporate arbitrage rate to 13x/2%12% % but free funds were again
firmer
As

it

at

is

a

fraction

above

expected that U.

10%.

S. bids

will predominate at the forthcom¬

ing

Alberta

will mot

be

oil-lease

auctions

surprising to

see

level of the unofficial dollar
more

official

The

markets

stock

decline

it

the

move

closely in line with the

rate.

was

of Western

Western

feature
the

of

the

persistent

oils following

regarding the marketing

concern

Foremost

broad

rehabilitation

and the restoration of its full

still
now

are

compulsion

early

nomic

also

events

bringing
an

among
these is the problem of the restor¬

of Alberta's surplus oil. The list in

ation

general likewise drifted lower al¬

merce

international

freer

of

the

on

basis of

com¬

freer in¬

a

terchange of European and dollar
be

Before

made

in

any

this

progress

direction,

however, the stumbling

though

a

played

resistance

ward

few

junior
to

golds
the

trend.

block of

sterling inconvertibility must be
removed.
The
previous piece¬
this

problem constituted by the
granting of loans, Marshall Plan
aid, and the establishment of the
Fund

and

inglorious

have

CANADIAN BONDS
Government

re¬

failure.

In."

Provincial

addition to the lack of, success in
the achievement of the desired

the

global

Municipal

approach

to disillusionment

Corporation

recrimination.

It is

timely, therefore, to recon¬
only practical approach
to the solution of this thorny prob¬
lem, namely the Key Currency
plan.
This was strongly advo¬
sider

cated

the

prior

Keynes

the

to

schemes

White

that

CANADIAN STOCKS

and

subse¬

quently resulted in the idealistic
Bretton

Woods

culminated
of

in

the World

proposals

the
Bank

that

establishment
and

Fund.

In

A. E. Ames & Co.
INCORPORATED

brief the essential prerequisite to

multilateral exchange convertibil¬

ity and the restoration of normal
international trade is the effective
stabilization of the pound vis-a¬
vis

the

achieved
the

dollar.

This

could

by concerted action

created

4-2400

NY

1-1045

on

part of this country, Britain,
A stabilization fund
be

New York 5, N.Y'.

be

and Canada.

could

Two Wall Street

WORTH

largely from
funds subscribed by this country

Fifty Congress Street
Boston O, Mass.

dis¬

down¬

meal approaches to the solution of

and

1

100

900

determining

Dominion's

nomic

situation

a

of

purpose

funding
of
the
wartime
sterling balances.
Then
bridging of Britain's dollar

its

has merely led

500

on

the

blocked
the

the

presumed therefore

for

Union would be the
scaling down
and

take

objectives,

of the year

1000

controls.

justified by a superior
knowledge of current and future

in

300

also fac¬

are

normally call for
in
dispensing

is

Bank

400

sterling

display of confidence

sulted

A. D.

to

Canada

underwriting the current valua¬
tion of sterling.
The first task of
the
new
Tripartite
Currency

ties

;

insignificant that back¬

you

The uncertain

and

the part of the Canadian authori¬

can

log

be

to

currencies.

appropriations.

And how

a

caution

World

800

the

"Can

debt

its 5% interest

just

still

are

regard

tors that would

How Money Grows

700

"Are
Americans
Isolationists?"
Jan. 11, 1945; "The Failure of the White
Man's
Civilization,"
March
22,
1935;
"How President Truman Can Regain his
Prestige,"

on

with

following table shows the accumulation of a one cent fund,
compounded annually at 5%, from the birth of Christ to 1920.

of

League

1944;

Lost

to

The

Permanent

"The Chronicle," March 9,
a
"Reply to Critics" of this
article, March 30, 1944; also "Peace by
Peace," in
1944, and
Force

down

national

our

weakness

ing inconvertibility

a

600

Nations

total

bring

our

light

lasting

conceived

world's

the

on

reckless.

markets and the question of sterl¬

puny,

land of

million individual depositors.

established

and seven

and at this point I
respectfully ask Washington and
all small town politicians in this

seem

the

instance

bearing

savings banks with

world

by May

Guardian Angel had started

some
one

country, possessing 531 mu¬
tual
savings
banks
with, total
deposits of over $19,500,000,000—

the

dollars

one year

to

situation

as

$252,481,062,000
could
have
been paid off in a few minutes if

this

Yes,

money

of

which America is thrice blessed—

the

the

back.

"Penny Bank" of

introduction

decillion

prodigious
Dec. 31, 1950.

package.

was

764

this

pennies to make

lescent days

of

months additional interest to

change to

c.

terms

30, 1948, plus

the

Be it said,
out of the sacred

pay the iceman,
postman for overdue postage
the department store driver for

his

for

duodecillions, 13 undecillions

and

young.

few

somewhat

suggestions have been made north

total

to $2,013,764,000,000,-

in

expressed

house¬

a

the
or

"Van

to

Tables."

sum

forgotten the little
of his infancy—

was

a

the

years

000,000,000,000,000,000,000,000,000

Daddy, would sometimes

SNITCH
exact

Interest

Hence

14

every

according

days,

Dyke's

security of the "Penny Bank" that
my dear "Momey," unbeknown to
me

itself

grown

savings

the

75

have

and

the

minds

and

annually,

"Penny" Bank

institution

hold

double

1920 in the above table will

Bank"
was

if computed at

year

And who has

"Penny

of money

will

prosper

personal, social
commercial relationships?

or

might appear

be

With this consideration in mind

worthy of notice that this

sum

5% interest compounded

our

was

will

behavior

which

useful

as

live,

we

without

follows.

of the Penny. The

and, we like to
always be the chil¬
dren's best friend, a prize for good

cent-piece

think,

food

children's

same

in

and aeons, Americans

aeons

anything other than air,

or

to

experience

circumstances, to
on imports from

sobering memory.

would

debt
of
gratitude
to
the
Rev.
Henry Duncan, a Scotsman, who

sellers could do business at all.
The

which

contem¬

this everyday life of ours than this

the breakdown to make change all
the

and

this country
surface

Dizzy Approximations

or

demand

which

cough drops.

ers

reflection

Is there

subway fares
a

of

as we

plation.

and

bus

minds

our

recent

of

and the current
relax restrictions

strength

living and thinking.

Interest" activation.

the

view

the
Dominion's
ex¬
power of the mighty Penny for its Although
accumulative value.
"Poor Rich¬ change reserves have strengthened
ard" never tired in his adulation during the past year the effects of
the
1947
abrupt
change
from
of thrift, saving, moderation, plain

comfortably
comprehend if it has been compounded annually at 5% interest
sum

most

Benjamin

a

$503,441,000,000,000,000,000,000,000,000,009,000,000,
largest

That

unsung

solitary but mighty Penny in a
progression" which would have become

powers

In

18

FINANCIAL

&

COMMERCIAL

THE

(722)

CHRONICLE

Connolly. The Newark "Evening
in indicating this stated
that "Mr. Hassinger's activities as
News"

News About Banks
CONSOLIDATIONS
NEW BRANCHES

REVISED

branch."

"He

associated with Inter¬

was

nal Revenue Collector

The

Central
York

Savings

Bank
that

announces

at

a

meeting of the board of trustees
on
Feb.
14 Cleo
F.
Craig was
elected

Joseph

of

a

has
been
elected
to
the
Advisory
Board of the 30 Broad Street Of¬
fice of Chemical Bank & Trust
of

Co.,

Trustee of the

in

partner

Thomas,

A.

the firm of Lehman Brothers,

according

York,

New

to

bond

drives

and

more

recently has

Di¬

State Director

rector

of

the

man

&
Telegraph Co.

Export

Telephone

President

charge
c

.: n a n

i

associElias

dur¬

York,
Cleo

having
it
in

F.

Craig

He is also
a Director of the National Safety
Council and
The Citizens First

:St. Louis 36 .years ago.

of

&

Bank

National

Trust Company

Ridgewood, N. J.

Trust

of

Co.

New

Arthur S. Klee90-96
Wall

which

of
is

man

to

leased

has

Cohen

A.

Colonial

the

ing his entire

joined

President,

Street, at the Northeast corner of
Water.
Extensive improvements
will

by the

made

be

possession taken on May 1.
The
premises
consist of the
entire
The

basement.

the

of

most

and

floor

ground

A.

Superintendent

State

announced

on

Feb.

York

New

Lyon,

of

Banks,

14 that a sec¬

quarters

n e w

give the Colonial the space
that is required due to the growth
of
its
business
at
57
William
Street,
corner
of
Cedar.
The

ond and final

liquidating dividend

brokers

of

share amounting to
being paid to the

Noyes

$6.75

per

is

$175,500,

of

stockholders

di

Banco

The

tificates.

stock

their

of

Charles

F.

for

the

agents

Inc.,

building.

board

cer¬

the

announcement fol-

Louis

Justice

order by
Valente in the

signing of
A.

an

V.

Peter

of

title

the

17

Cur¬

the

of

that effective Jan.

reports

Meadowbrook

the

National Bank of Freeport, N. Y.,

changed to the Meadow Brook
of Freeport.

was

National Bank

ing the payment. A further order
declaring the trust company dis¬
solved and its corporate existence
terminated is about to be entered.

dend of $62,500,

The trust company was

closed on

result

the

As

Total liabilities to de¬

Italy.

,

ing, 25,381 shares were owned by
.an Italian
bank and were vested
by the Alien Property Custodian
as
enemy owned property.
As a
!

result, in September, 1944, when a

.first distribution of $60 per share

amounting to $1,560,000 was made

$1,522,860
was
Custodian.
In the
spring of 1949 the Attorney Gen¬
eral, successor to the Custodian,
to

to

500

l

owner

1

amount

the

and
so

stock

its

to

former

it the
received by him. The
paid

over

to

! liquidation of the Trust Company
!
is the first to be completed out of
:

11

owned

enemy

tutions taken
of the

banking

over on

insti¬

divi¬

stock

a

The

New

York

Department
Trust
N.

the

of

whereby

Banking

30 approved

of

Company

Y.,

is increased

its

Security
Rochester,

capital

par

value of $25 each, to $2,450,000,
consisting of 98,000 shares of the

value of $25 each.

The action

of the stockholders in

authorizing

par

the increase
in

Jan.

on

•J;

Effective

ferred

the

Office

18,

Jan.

of

nounced

to

it

is

learned
of

the

Comptroller of the

Bishopsgate, E. C. 2

49 Charing

E. C. 1

Cross, S. W. 1

Burlington Gardens, W. 1
64 New Bond Street,

W. 1

Morse

*

Chairman of

Archer,

Bank

Camden,

First

the

of

Board

Trust

&

loans, in cooperation with
local banks, to small businesses
throughout the Third Federal Re¬
serve'

ASSETS

J.,

N.

died

St.

at

years

Bulletin"

"Evening
of

1922.

He

from

when

it

continued

as

the

became

2.

National

the

Camden

Bank

Feb.

of

of

President

1918

to

President
First

Na¬

tional State Bank of Camden from
to

1922

1927

and

was

re-elected

President when that bank became

First

the

became

Chairman

New

Archer

National.
of

also

is

It

1947.

in

Camden

board

the

stated

admitted

was

He
that

to

the

ticed until 1918.

Associated

Banks:

Deacon's Bank, Ltd.

*

The

Frederic

ware.

President




of

the

Penn¬

Dela¬

and
A.

Potts,
in an¬

bank,

to acquaint

of the
loans

and

them with the details

program.
Under the plan,
in amounts up to $25,000

maturing within

three

as

a

be made
local bank.

will

years

serviced

by

period of

a

the

and
At

•

the request of the local bank, the
Philadelphia National will accept

participation

the

of

90%

to

up

originat¬

will allow the

and

loan

ing bank a service fee for han¬
dling the loan.
»!•

Frank Boyer,

of

director

and

died

Pa.,

Vice-President
NorristownNorristown,

the

Co.

Trust

Penn

83

V

of

Feb. 4 at the age of

on

Hi

new

Vice-Presi¬

the

Federal

Trust

Co.

of

director.

President

Secre¬

Elected

post

Mr.

President

in

the

ard

Czajkowski,
was

He

has
34

the

with

in

War

S.

the

with

II

Hospital

during

the

24th

in

Unit

Theatre,
rank of Major.
The

Peoples

meeting of the
National Bank

effective

Jan.

National

Bank

Wis.
L.

Milwaukee

"Journal"

the

advices

which

&

u

the

Office

the

the

of

vania

Banking

for

Company

Philadelphia

of

Trust

a

the

who

to A. G.

died

it

is
of

dent
of

were

&

pro¬

of

the

Home. Savings

Milwaukee,

vancement

and

F.

annual

Clifford

of

Assistant

Assistant
Officer
from

meeting.

F.

William

Treasurer,

and

Senior Vice-President of the

credit
M,

learned:

from

She

-

and William
promoted to Senior
from

Vice-Presi¬

Officer

from
Usher

by Richard HavKappel, in review¬
"Enquirer"
of Jan. 12 the changes at the vari¬
ous bank meetings in the city. The
account went on to say that other
changes made in the Atlas Na¬

lin and Frank

ing in

tional
ert

P.

the elevation of Rob¬

were

J.

Ott, Vice-President
and
Trust Officer, to Executive VicePresident and Trust Officer, and

the advancement of Edwin F. Tue-

and

He

Mrs.

j elected

Hebenstreit,

ting from Cashier

Vice-Presi¬

to

C.

Harris,

Vice-Presi¬

dent of the Federal Reserve Bank
of

Chicago and Executive Head of

Detroit's

branch, has

autonomous

Vice-President

First

in

Chicago. The De¬
troit "Free Press" of Jan. 29, in-

dictating this, said that Mr. Harris
will

be

succeeded

branch
has

by

served

is

Vice-President.
effective

became

change

Feb. 1.

•

Effective
National

Jan.

its

creased

$300,000.

of

Chicago

capital
by

a

Liberty

the

17

Bank

from

Kant

!

sumer

credit

wealth

Trust

Bank

Two

Common¬

Mich.,

has

at

the

Company

of

Pitts¬

William B. McFall, Presi¬
dent announced, it is learned from
"Post Gazette"

H.

"They

and

also

Other

Treasurer;

officers

H.

A.

L. Beitel.
House, Edward
G.

McHugh, Roy S. Blackstock, As¬
sistant Secretary Treasurer; Wil¬
liam C. Wilmot, Assistant Treas¬
urer
and
Auditor;
and
H.
J.
Manager,

Mayer,

Mt.

Lebanon

000.

H:

*

Jr., and Fred A. Uphoff as VicePresident of the Peoples First Na¬
Bank

burgh

was

Trust

& Trust Co. of

made

known

National Bank

First

of

Co.

at its annual

January,

according
"Journal,"

waukee

its

increasing
000.

Pitts¬

Wis.,

Racine,

nounced

&

Blochowiak
who also

a

and

The

the

❖

Bank

annual

post

J.

Everett

Midland

Minneapolis at

meeting

of

P.

in

January

Knutson

from

Cashier

Assistant

to

Vice-President.

Swanson

Assistant

Gapinski,

the

of

Assistant

of

that

who
Bruno

are

*

of

John

advanced

Koss

Director.

new

Max

directors

National
their

which

named Cashier."

was

Cashier,

elected

was

the

Minne¬

"Star" reported.

apolis

H:

The

H»

H:

the First Na¬
tional Bank in Wichita, Kan., has
been

capital

of

increased from

$1,000,000 to

$2,000,000,
effective
Jan.
18,
through a stock dividend of $1,000,000.
Hi

000

H:

capital
Bank

to

of

#

Trust

and

City,

Na¬

Co.

Okla.,

of

in¬

was

of Jan. 17 from

as

dividend

First

the

$6,000,000 by
of

a

$5,000,20% stock

$1,000,000.
H:

their

At

H:

Merle

to the Mil¬
that it was

capital

$1,000,-)

to

The "Journal" added:

at

since

$800,000

crease

made

was

stock

an

M.

1940.
The in¬
declaring a

giving

each

dent

chell

and

a

Street

Director

State

of

Bank

National

Louis

appointed

Assistant

Sanguinet

P.

Howard

and

*

❖

Hi

Control of the Jefferson Bank &

been

Co.

of

St.

acquired

Louis,

has

Mo.

by Peter W. Her-

formerly Vice-President and

zog,

Cashier of the Industrial Bank of
St.

Louis,

and

Contract

Sikeston,

Michael
as

St.

the

Anthes Assistant Cashier.

eral

for each four held."

late
him

Commerce

-

in

of

Dillon

Ross,

for¬

shape merly Vice-President of the Gen¬

additional

The sonsiv of the
Schneider replaced

meeting

directors

Vice-President

Trust

by

dividend,

in

Bank

annual

the

January

an¬

meeting in

"The bank has been capitalized

shareholder

*

re-

were

Casimir
Janiszewski,

directors

new

Mercantile

25%

branch."

tional

"Journal"

named

was

of

as

of

Owens, Vice-President

Comptroller;

enlarged

were

sjs

are

Kasimir

;j:

23, from $600 000 to $750,000 by a stock dividend of $150,-

The

newly-elected

R.

been

Erwin

Vice-Presidents

new

added:
and

tional

Rapids,

O.
Di¬

new

Jan.

23, which added:

"Other
are:

Skobis

!■:

Milwaukee

the

stock dividend of

Grand

a

as

by the Lincoln State Bank
of Milwaukee, Wis., according to

The

of

were

named

in¬

capital of the Peoples Na¬

tional

burgh.

Pittsburgh

The

has been elected
charge of con¬

in

also

Raymond

named

H:

creased

M. W. Boering

Vice-President

the

Froede

Frank

and

$300,000

#

Counsel.

named directors.

Oklahoma
i):

attorney,

rector, as was J. J. Meyer.

who

and

Manager

as

appointed

now

The

Detroit

the

in

Chalfonte,

J.

H.

were

ah
and

directors.

dent.

*

*

also

Faustin

named

Meinecke,

the Cincinnati

trust

*

Mil¬

is

succeeds

Vice-President

as

Trust

to
U.

Teller to Assistant
foregoing is taken

The

to $6nn 000

department.

the

it

officers

Other

I

from the account

department,

David,

his

directors.

Liebing

Gebhart

Thomas

Paying

dent, will continue as head of the

Jan.

From

"Journal"

waukee

Vice-Presi¬ i Frank

to

E.

Trust
and

Cashier.

E.

Ostendorf

Cashiers

Gustav

dents;

duties

ViceKriebel,

Bank

until

last year, was elected head
the
institution at the recent

of

Edward

with

now

Wis.,

announced on Jan. 10 by Fred A.
Prinz, who submitted his resignaDowd, President, result in the ad¬ I tion at the annual meeting of the

delphia "Evening Bulletin." They
are
William L. Day, Vice-Presi¬
dent, moved up to Executive

*

death

Comptroller of

Changes in officers of the Atlas
National Bank of Cincinnati, Ohio,

named

Feb.

reelected."

V

Emily L. Froede, widow
of Fred Froede, who was Presi¬

the Peoples
Co.,

Casper, Cash¬
All

December.

Mrs.

its title

bulletin

in

were

*

of

j*:

been

on

also

board, pending election of

successor

ier,

Currency;

1, said the Phila¬

moted

from

we

"Nicholas Rendenbach, an As¬
Vice-President, was named
act as Cashier and Secretary

of

the

Bank

Trust

recent

a

of

other officers

12, to

from

First Wis¬
of Milwau¬

the

to

General

National

was

Jan. 12 at the annual

on

sistant

World

attaining

ranean

were

Acting Cashier

an

Hos¬

Mediter¬

the

>\t

quote.

served1 in

He

H.

E.

George F. Kasten and
Gruber, both Assistant
Vice-Presidents, were advanced to
Vice-Presidents, it was stated in

Roanoke

Jefferson

Army

ViceRich¬

Vice-Presidents

new

board

kee,

company

the

newly

was

Cashier,

consin

John

1944, he has

of

Roanoke.

U.

an¬

Dr. Trout is orthopedic

company.
surgeon

the

Since

director

a

pital

with

been

years.

been

been

Chapman is Vice-

the

to

named Vice-President.

appointed

charge of sales for
Bridge
Company.

Virginia

for

Advisory

named

Cashier

and

elected and

Virginia in

has

Va.,

nounced.

of

was

Executive

Ball

Two

Cocke Trout
the

Board of The Bank

Ernest

Pennsyl¬

the

of

officers

Four

of

a

President.

elected

Schneider

years.

in the
Newark, N. J., was announced on Pittsburgh "Post Gazette" of Jan.
Jan. 13
by President David J.1 31, which further said:
of

Philip

members of

new

as

Dr.

Mil¬

formerly

Schneider,
was

H.

❖

The election of Edgar T. Adams,
*

appointment of William H.

Hassinger
dent

Glyn, Mills & Co.

Jersey

New

Jersey Bar in 1897 and prac¬

£155,175,898

Williams

including

District,

Camden

Company

Fla., on Feb. 1.
He
of age.
A resident
of Haddonfield, N. J., Mr. Archer,
it was stated in the Philadelphia
76

was

Mr.

TOTAL

9 that $5,000,000

has been made available for mak¬

sylvania,

J.

created

ing

Vice-President
*

Assistant

an¬

Kelly, Vice-President of the time
sales
division,
became
Senior
Vice-President of the loans and

Currency.

was

3

Feb.

on

Pa.,

operations department; William F.

Petersburg,

8 West Smith field,

Philadelphia,

of

of

$400,000

named

and

learned

its pre¬

Bank

Bulletin

23

the

First-

the

from

(RFC),

$1,000,000

of

Scotland

National

Philadelphia

Bank

a

Fred C. Masten,

Lynchburg, Va., changed

partment.
The

"Leo

director,

Assis¬

elected

the

from

"Journal," which likewise

H:

Manager of sales finance de¬

Vice-President

J., increased

stock

National

LONDON OFFICES:

been

as¬

Gilbert

that

stated
was

learned

is

waukee

reported:

Vice-President

Assistant

President;

»j:

National

Trenton, N.

noted

was

2, page 534.

sj:

Jan.

Mechanics

from

18

issue of Feb.

our

the

Branches throughout

has

Dolan

F.

It added

it

ing,

bank¬

The election of Marion E. Chap¬
man

stock

from $2,400,000, con¬

sisting of 96,000 shares of the

F.

HEAD OFFICE—Edinburgh

board

"Evening

Newark

John

J.

State

Jan.

on

certificate

the

war.

Incorporated by Royal Charter 1727

advisory

Branch of the insti¬

the

elected

:|e

Hi

the outbreak

Royal Bank of Scotland

the

of

>

Hi

the

returned

and

J.,

has been named

News" of Jan. 26 stated.

and

Trust

N.

Newark,

the

Iorio, President of Iorio

member

$500,000.

stockholders,

'paidy to

of

the capital of the
Peoples National Bank & Trust
Co. of White Plains, N. Y., was
increased on Jan. 12 from $437,-

11, 1941, on the outbreak of
the war between the United States

positors and creditors amounting
,to $11,614,263.59 have since been
paid in full. Out of 26,000 shares
of Trust Company stock outstand¬

❖

fr.

Dec.

and

Side

West

Construction Co.

that

New

to

1,500 banks are being circularized

Comptroller

The
rency

Court on Jan. 19, 1950,
approving the final accounts of
the Superintendent and authoriz¬

Supreme

of

Company

*

lows

the

of

of

elected

been

has

nouncing the plan said that over

Napoli

Trust Company of New York upon

presentation

the

were

Co.,

Driscoll,

Governor

to

Jersey

and

tenant

will

William

Attorney

of the Peoples

*

H:

Milmed, Deputy State
General
and
counsel

S.

tution,

business
career,

Leon

a

*

ated with that
company

Com¬

National

of

Airlines, Inc.

has

e,

been

Finance

the

Director

and

mittee

and

Co.

Flintkote

of

Chairman

n

Fi-

of

Committee and Di¬

the

of

rector

member of

Inc., a

the Executive

Vice-

its

Lines,

American

of

Board

the

of

American

also

was

Herzberg

Roanoke,
*

*

In

Michael

Jr., was
tary.

and

Raymond A. Glen-

*

1948.

of the Northside

manager

tant Cashier and

been Di¬

Relations

non."

N.

Jackson, Chairman of the
Bank. Mr. Thomas is also Chair¬

war

Advertising in the savings bonds
division of the
Treasury under

Baxter

a

and

by

made

announcement

an

Mr.

Craig,

during the

Public

of

rector

•

Bank.

Manning in

war

It

N.

Peoples in
Assistant

elected
in

1918, Mr. Uphoff is

ing since

was

The "News" further said:

(}

New

inter¬

were

during the war, when he
drafted by the Treasury for
finance work in New Jersey.

joined

was

Vice-President

sistant

CAPITALIZATIONS

,

broker

Adams

ana

rupted
war

Bankers

and

NEW OFFICERS, ETC.

securities

a

"Mr.

194/,

Thursday, February 16, 1950

Presi¬

Jefferson

than

Purchase

Corp.

of

Control
of
the
Bank, which has more
Mo.

$10,000,000 deposits, was acfrom
Byron Moser and

the

Mit¬

auired

of

Mil¬

Byron Moser, Jr., and their asso¬
ciates according to the St. Louis

waukee, Wis., at the annual meet¬

quarters

"Globe Democrat" of Jan. 29, from
which we also quote:

of

the

Board

elected

Mr.

and

Ross

Director, along with
John W. Mueller, and Emil Niehaus.
August N. Bergfeld will
remain as President, Walker MacMillan as Vice-President, R. W.
was

Poertner
from

F. D.

board

Moser,

directors

of

Byron

Kraus

Jr.,

Jefferson

James

and

Capital

Rarick.

Bank

is

to

Bank

the

announced

Louis,

President

according

Blumeyer,
Louis

St.

of

by

"Globe

name

it

the

St.
of

to

!'t

$500,000
Bank

dividend of
Hamilton National

the

of

its

creased

Tenn.

Chattanooga,

capital

from $2,000,000 to

of

as

election
A.

H.

and

Bank

the

of

W.

17

A.

Wooten
from

1944

the

W.

R.

annual

Fla.,

24

McQuaid,

was

financial

The

meeting of the stock¬

in

the

ital

house."

sonville. Both, it is noted, are em¬

from

dend

ployees of the bank. Mr. McQuaid,
it
is
stated, presided over the

through

$3,000,000

stock divi¬

a

$1,000,000.

of the First National Trust & Sav¬

illness.

of

dividend

stock

National

First

the

of

Vice

capital

$6 000,000.
The enlarged cap¬
ital became effective Jan. 13.

continue

Bank

New

bank,

of

since

the

1933,

was

organized in

the

meeting

in

Mr.

National

Orleans,

George

F.

the

of

Bank

was

to

succeeding

Vice

Assistant

Ramel,

post

the

says

"Times

President.

-

Mr.

its

The

tional

Bank

Republic

the

of

stock

new

$1,500,000

Dallas,

of

Na¬
re¬

brought its capital up to
$13,500,000 from $12,000,000; the
capital was increased as of Jan.
Reference

issuance

of

in

page

169.

claims
the

to

the

these

noted

the

to

new

be

country,

the

stock

50th

12,

largest

and

Bank

was

known

as

to

of

the

where

bank
it

it

has

stands

the

has

of

the

former




the

of

of

C.

B.

An Executive
the

Chromium

northern

Quebec

is also

identified
with

as

mining

Ontario.

and

official

an

various other

The

*

Royal

W.

Bank

the

was

of

Citizens

Bank, are

established in 1909

city

Citizens

of

Bank

Sacra¬

Bank
the

30

Bellevue

bank's

toba.

of

announced

appointment

will

is

Marshall,

C.

appointed

retiring

Manager

approximately $9,000,sj:

directors

bank.

ciated
Bank

elected

the

C.

L.

Peoples

Yost

Vice-President

Mr.
with

since

commercial banks, insurance com¬
with

in

decline

a

outlets

in

be

may

suitable

and

reduc¬

a

earnings.
Pointing to the
$40
billion of Treasury

bonds

maturing
or
callable
in
1950-52, the Bank observes that

the

the

Private
The

PHILADELPHIA,

PA.—Gerst¬

ley, Sunstein & Co. have signed a
long-term lease through Frank G.

Binswanger, prominent Philadel¬
phia real estate broker, for the
entire

seventh

Broad

Street,

has

floor

121

at

the

in

May

Yost

the

has

of

been

Ex¬
the
asso¬

Peoples National

1929, first

1922 and

are

of

industry

construction

outlook

and

financing

private
will
be

tively high levels during the next
There may be some
decline in activity later in the

however,

when

moderate
reductions are anticipated in pri¬
vate
construction, inventory ac¬
cumulation, production of automo¬
year,

biles and

Government

and

an

expansion program.

Upon completion of alterations,
will

which

include air-condition¬

On the contrary, there
some further decline In

be

index

general

later in the

prices

the

of

deficit

wholesale

of

As

year.

will

be

part

a

through non-marketable Govern¬
ment issues, there is not likely to
be

Opportunity

Flexible

for

Debt

as

Cashier,

Bank's

The

makes

attractive

of¬

offerings.

the

underlying conditions of

investment market indicate

(Special to The Financial Chronicle)

is

associated
&

Co.,

with

Inc.,

management in

March

1.

Mr.

time.

some

Walston, Hoffman
FRANCISCO,

Thomas

F.

Frawley, Jr.,

Walston,

Hoffman

with

is

Goodwin,

&

Montgomery Street, members
the

New

York

and

San

Fran¬

Some

Rudolph Adds

Kelley

has

staff

of

40-D

South

been

Paul

C.

to

the

Rudolph &

Co.,

added

First Street.

conse¬

a

the

above

accurate, this will not be
beginning of a trend toward

prove

the

higher interest

rates.

credit

not

is

action

commodity

Restrictive
likely unless
show
unex¬

prices

pected firmness, speculative senti¬
ment

increases,

bank loans for
rise sig¬
If the business trend

nificantly.

or

ourposes

should turn downward later in the
year,

differences

any

between

the

Federal

the

and

would

probably
would then

disappear

and

they

concur

easy

money

on

opinion

of

Treasury

Reserve

measures."

Alex. Brown & Sons
To Admit

McHenry

&

response

of

demand

the

come

a

gen¬

1 pa rtne r

era

the firm

as

of

uation

approval
of

the

York

New

Stock

Exchange.
Mc¬

Mr.

has
vice-

a

president
the

o

f

Maryland

and

that

bond

debt

the

the

Treasury's

screws

rates

at

the

expense

rates of

maturing

bonds,

prospect

petition for

a

of

some

given

of

of

Co.

1930

prior

James McHenry

to

vice-

was

securities

there

to

life

is

a

very
com¬

"In the broad

management,

consideration should
the

1930

to

Color

vice-presi¬
Maryland

Printing Co.; president and
of Miller Trailers,i Inc.;

director

of

the

Maryland

Credit

director of the
Glyndon Bank of Glyndon, Md.
A veteran of both World Wars,

Finance Corp. and

Mr. McHenry
as

service

entered the Marine

First Lieutenant and saw
and Leyte.

at Tarawa

Goldberg Opens
(Special to The Financial Chronicle)

LOS
ward

CALIF.—Ed¬

ANGELES,

Goldberg

is

in

engaging

a

securities business from offices at

that today

1652 Benedict Canyon

before rely

Goldberg

ac¬

was

director

fact

savings

he

dent and director of the

ever

insurance,

has

investment

counts, and pension funds for their

past

future

Company.

security."

1926

Baltimore.

Corps
or

increasing

debt

From

Mr. McHenry is also

dwindling supply of

people than

upon

and

terms

new

in exchange for called

offered

of

Unless the

the

extends

still

long-term

on

people's savings.

the

present

tighten

would

policy

raises

Co.

of

of

further

more

~

«•

of

president of the Morris Plan Bank

a

in

The Bank cautions that contin¬

real

Mc¬

James

further undesirable
yields is to be

if

avoided.

the

/that

(announce

Henry of Glyndon, Md., will be¬

to

for

Alex.

—

Sons, investment bank¬

president of the Continental Trust

decline

be

JOSE, CAL.—Marshall C.

and

of bond prices,

longer term issues will be re¬

surely

(Special to The Financial Chronicle)

trends.

but
assumptions regard¬
ing business and commodity prices
if

subject to the

a

problem

SAN

future

quent easing

been

Government bonds.

cisco Stock Exchanges.

Paul

immediate

ment

Treasury

CALIF.—

price

and

Fed¬

guided

"There may be a slight firming of
short-term interest rates in
the

Henry

new

(Special to The Financial Chronicle)

SAN

business

by

of

the

or

that

concludes

supply

business and invest¬
conditions is just as impor¬
as
flexibility
in
interest

interest

With

Bank

since

Exchange,
Fidanque has

been with the firm for

The

eral Reserve action will be

Baltimore

of the New York Stock

policies

of the Federal Reserve.

powers

greater
willingness
to
sell
Treasury bonds. Eventually, how¬
ever, some relief in the form ol

in

in

regardless

Congressional mandate

Reserve, which has recently shown

partnership

Reserve

degree,

W.

Rosenthal
&
Co.,
60
Beaver
street, New York City, members
on

high

a

prevailing

quired
to

sound

recommendations."

Federal

Water

Benjamin D. Fidanque, Jr. will

recommen¬

be

to

that the Treasury's re¬
will continue to in¬

quirements

Trust

Rosenthal Co. Admits
admitted

it apparent

bonds may be met by the Federal

Street.

be

these

of

March 1, 1950,

Discussing the Treasury's

rates."

P.

283

sult

real

a

policies, the review finds that
"a certain degree of flexibility in

tant

AUGUSTA, MAINE—Robert D.

the

longer term Government obli¬

debt

With P. W. Brooks & Co.

a

It is observed that

ury

debt

and

of

regu¬

principle.
"It would be highly
unrealistic, however, to anticipate
any major change in the level of
long-term interest rates as a re¬

ers,

review

strong case for longer term Treas¬

ley, Sunstein will have
the city.

These

held

are

Brown

Management

gations.

modern

in

BALTIMORE, MD.

of

in

Senator

freedom

action

ketable Treasury obligations.

need for an increase in the

most

dations

big increase in the money
supply or in the volume of mar¬

quotation board, and other
comforts and conveniences, Gerst¬

fices

by

greater

a

stock

of the

recommen¬

financed

ing of the offices, a new electric

one

for

Reserve

non-productive

No important rise in commodity
prices is expected during 1950 de¬
spite the large Federal deficit in

near¬

in

headed

credit.

of

cost

suggests that the capital require¬

The

space

of

lating the supply, availability, and

Decline

business and price

investment

ly doubling their present

Douglas
Federal

South

Philadelphia.

been

result

a

the Bank refers to the
committee

to

Investment

ments

may

Moving

on

as

dations of the Congressional Sub¬

any

the

Planning

1949

policies. In its review,

fluence

prospect.

Gerstley, Sunstein

in

gations.

the

main

Winnipeg Branch, succeeding Mr.

downward
easy money

The realities of the situation make

Treasury

meet

in 1950 than in 1949.

pen¬

Interest rates and yields moved

has an opportunity
problem by offering
the market new longer term obli¬
to

been

on

A.

Bellevue.

£

of

Bank of Washington at
Seattle, Wash., at their meeting on

ecutive

published

agricultural implements,
cash
outlays.
Moreover, plant and equipment
spending is expected to be lower

M.

has

of

of

Mani¬

in

succeed

sion.

T.

of

Supervisor

as

O'Hara, who

265

17

14, the Bank concludes that

or

com¬

Canada,

branches

56

He

Its deposits as of Dec. 31,

National

Jan.

Money

ably continue to operate at rela¬

the

become part of the

were

the
Feb.

lower in 1950. Business will prob¬

*

officer Montreal,

Jan.

on

States Government Securities and

few months.
*

head

Company. In its
entitled, "United

panies and other investors

Rates

a

He

panies.

of

'

by

an¬

&

opment

Brooks

growth of the bank has required and in 1935 was elected Vicechanges
in
its
physical' President and Cashier. Since 1942

three

of

an

mins is identified with the devel¬

Ault

and

of

V

The

14

of¬

Smelting Corp., Ltd.,
and a Director of Hollinger Con¬
solidated Gold Mines Limited, and
other mining companies, Mr. Tim¬

new

Anglo Bank's Sacra¬
Advisory Board. The Citi¬

The

located

today.

Vice-President

Mining

(head

according to
Feb.

Gardner, President.

pre¬

the Citizens Bank of Oak Park,

1949,

entire life

been

Montreal

nouncement

been

000.

growth of the bank is
deposits on the open¬

During the

the

mento.

the

ing day of $804,524, compared to
deposits of $339,870,845 as of Dec.

1949.

of

portend

Market,"

No Trend Toward Higher Interest

re¬

higher interest rates,

review

annual

nearly

been

not

in

of Bankers Trust

A.

Bank

market

according to the Bond Department

investment

Timmins, President of
Timmins Corporation,
appointed a Director of

the

securities

does

trend toward

A.

has

area

weeks

cent

in

tone

Government

faced
*

«:

fice Toronto)

Sacramento, the bank increased
its capital and changed its name

reflected by

31,

N.

the

of

and Trust

Depart¬

easier

The
for

tion

Noah

the

Vice-Presi¬

Secretary

Park had

the

today the bank's capital structure
stands at $30,000,000.
It is noted
the

of

then
a
separate unincorporated
community. In 1917, when Oak

in

Day and Night bank.
The orig¬
inal capital was $100,000, whereas

that

Bank,

Manager

zens

Republic was organized originally
Company

Citizens

and

Kiekenapp,

Secretary

dent

as

its 30th
Advices

observed

Guaranty

and

E.

Assistant

mento

which

anniversary on Feb. 14.
the
bank
state
that
the

W.

Bank.

members

was

Jan.

bank,

from

as

a

appointed

of

proposed

columns

The

business of

of the

Citi¬
zens
Bank, has been named As¬
sistant Manager.
Earl O. Schnetz
and George C. Bassett, President
and Vice-President, respectively,

cently

10.

a

result of its acquisi¬

a

to

Assistant

of

Texas,

*

Sacra¬

Anglo office. M. L. Strandell,
viously
Assistant
Cashier

4:

of

issuance

opened
in

Anglo Bank, and Earl
Schnetz, President of the Cit¬

former

or¬

ganization in 1933.
v

as

Cashier

2, has

since

bank

the

office

joint announce¬
by Allard A. Calkins, Presi¬

izens

Orleans

New

Picayune" of Feb.

with

National

dent of the

O.

Auditing

em¬

ment since 1945 when he returned

firm

Francisco

San

Jan. 28

on

ment

as

Jan. 17. Coming to

the

Firming of Interest Bates Likely

Stresses Need for Longer Term Treasury Offerings.

*

banking

according

of Auditor,
Auditor
O.
J.
Howat, who, in addition, has been
named

a

Citizens Bank of Sacramento,

the

New*

Ramel

in

Cashier.

elected Assist¬

was

from military duty.

mento in the Oak Park District on

tion

been

of

second

Jan. 30,

Hibernia

is

American

and

California

Anglo

Bank

the

of

were

1940 he has been

business since

Cashier.

meeting

Asso¬

Borthwick

Mr.

*

At
organization of the banks in
1933,
Mr.
Graham
was
made

annual

Bankers

California

The

post of Senior Vice-President.

the

President

past

a

Bankers Association.

the

At

and

the

of

the

from

ployed

He was

1907.

member of the Executive Council

January.

advances

Graham

which

Assistant

on

the bank in

the

of

1919 until today."

is

California

ciation

Dale Graham
named President of the bank;

was

the

of

time,

same

ant Auditor

National

First

the

Cashier in

as

Belcher

Mr.

Belcher, who will

1950—No

Yost,

advices

Chairman

as

joined

President from

Commerce

La.,

Chairman of the board at

annual

At

of

Bank

Orleans,

was

elected
the

President

Lucas,

National

the
in

Executive

Press

Diego appearing in the
Angeles "Times" of Jan. 25

board,
G.

by

post

Borthwick,

stated that "Mr.

to

Oliver

Mr.

San

Los

Birmingham, Ala., from $5,000,000

the

President.

-

from

of

Bank

in

succeeded

Anderson

$1,000,000
the

on

ings Bank of San Diego, Cal., and
was

A

by

of

years

elected

was

the

Belcher, Jr., relin¬
Jan. 25 the Presidency

quished

has served to increase

three

Emmett Arndt

if

J.

Bank Sees Decline in Invesiment Outlets for

the duties of Cashier, now

devoted to

G.

#

t\i

Frank

19

To

January,

increased its cap¬

$2 000,000 to

13

of

Bank

First National

meeting in the absence of Bion H.
an

Association.

relinquished

*

Barnett, Board Chairman, who is

recovering from

House

Director

.*

Idaho

Jan.

on

this

of the board of

cf Boise, Idaho,

Jack¬

of Lit¬

Loan Bank

*

following

the

of

He still retains the title

Presi¬

by

Ark.,

Rock,

President

Home

Chairman

of

to Dallas in

came

was

tle Rock.

National

it was indicated
"Times-Union" of

holders,
Florida

I.

M.

elected to

were

Little

he

Federal

Vice-Presi¬

as

Jan.

on

were

Fain,

directors, while
J.
Smith
and

Robert

Green, Jr.,

"Mr.

Mitchell

Barnett

Jacksonville,

announced
dent

Alex.

Irving

of

dents

this

the board.

$2,500,000.

of

being

"Times-

directors

Earl

advisory

where

The

in

approved.

Wooten,

in¬

Jan.

Clearing
assume

Honorary

Dallas

Freedman and A. M. Matson were

4!

stock

a

shifts

"Three

also

named

Through

The

Chair¬

as

said:

also

Jan. 31.
*

same

hereto¬

Herald" of Feb. 4 in reporting

Arthur

Democrat"

the

named

was

Chairman.

is

was

President, was made Chair¬
of the board,
and Nathan

man,

Louis, Mo., has changed its

At

Flippen,

L.

H.

Ben.

Adams, who had served

St.

of

President.

Edgar

man

*

Bank

Tex.,

Vice-President,

a

elected

time,

par

fore

Industrial

The

Dallas,

of

Woolen,

stock.

value

has served actively as Secre¬
tary and Treasurer of the Seattle

1936,

Fred F.

(723)

he

modern in all its details.

Bank

E.

surplus of
$450,000, con¬

and

sisting of 12,500 shares of $20

CHRONICLE

military duty. Return¬
❖
Jj:
*
ing to the bank in 1935, he was
Comptroller.
D.
Green¬
At a meeting on Feb. 3 of the- elected
directors
of
the
First
National field, who joined the bank in 1937,

are

Moser,

FINANCIAL

Robert G. Perry was elected Cash¬
ier. Mr. Perry has been associ¬
ated with the bank since

Florence is President of the bank.

Retiring

McDonald, B. J. Menkhaus,

Marvin

J.

Cashier.

as

the

Byron

a

&

and only recently the
change
was
announced,
that being a new building to be
constructed on a plot of ground
comprising 45,000 square feet and
bounded by three main arteries,
Pacific, Ervay and Bryan.
The
proposed new structure will be

fourth

"Mr. Herzog was elected Chair¬
man

COMMERCIAL

THE

Number 4382

171

Volume

was

been

counselor

with

E.

Drive.

active

F.

and

Mr.

as

in

Hutton

an

the

&

COMMERCIAL

THE

(724)

20

Morgan Heads Comm.
of Los
LOS

B.

Southland investment
named

this

public

infor¬

mation

week

of

broker,

The

was

head

to

the

month

h

Ex¬

partner

and
man¬

x

h

c

long

the

Emerson B.

to

take

tours

leading

ihe

investment

and

FOR

reports,

the

maturities

switching
into

for

bureau;

forum

dicated

the

eligibles

for

issues

the

have

1956/59s

With

has

demand

than

a

pro¬

intensify cooperation be¬
tween the Exchange and South¬
land industry; and a program of
special events keyed to stimulate
interest in the Exchange among
civic groups, industrial and trade
associations, and business organ¬

Stock

west
1st.

Mr.

officer

&

G.

of

to

Becker

Salle

New

financing,

been

much

Jules Backman

According to

more

substantial

for

the

future.

Likewise

a

freer

The

elimination

the

of

idea that

on

must be kept down

irrespective of the economic

should

sounder debt management

make for

a

INTERMEDIATES

for

and

Jones

&

Co.,

the

Mid¬

consequences,

Co.

of

a

issues

intermediate-term

of

intermediate-term

the

maturities which

short-term

market

is

to

was

mediatewould

and

securities

r~

long-term

be affected

by

the

rates.

monetary

are

look¬

being mentioned as
seven- and nine-year

are

are

1

the

be

first

to

feel

will

be

less

certainty

in

future, than in the past.

U. S.

to

be

profitable

as

or

The

latter

rates

authorities

rather

"In terms of

government

security

prices

earnings, coal miners rank third
compared vyith workers in 155

Also riding the yield curve will
as

definite

of

the

as

it

has

been

for

increases

that

important

changes

in

monetary

Federal has been

While there is

BONDS

no

doubt bank funds available for investment will

increase

during 1950, will there be the same desire to acquire
outstanding issues in volume, if new ones will be offered that
could bring down quotations of those that are
currently available
in the market.

Most

of the

latter

buying has

town

sults

»

2*4%

being-

Aubrey G. Lansvon

15 Broad

St., New York 5, N. Y.

Telephone WHitehall 3-1200
Teletype N. Y. 1-3690




J. Barth Co. Adds

(Special to The Financial Chronicle)

FRANCISCO,

Carleton

A.

Whipple

are

Baerwald,
of

the

change.

San

Curtis

(Special

and

Howard

Pflueger
&
Bldg"., members

Francisco

SAN

CALIF.—

with

Mills

presented the

special

a

study

Stock

Ex¬

Deming
to

the

to

The

Financial

"For

veyed,

profits

the

no-day
companies sur¬

after

taxes

were

Hobart
staff

of

482 California

has
J.

been

added
&

Co.,

Street, members of

the New York and

Stock

CALIF.—

Barth

Exchanges.

San

in

the

15% below

corresponding period of 1948,
below the level in the

the

and

related

de¬

profits in 1949 probably
below 1948

a

The New York

University Pro¬
emphasized that reported
postwar profits were overstated
because inadequate sums were set
aside
for
depreciation.
"While
are

not possible,

if the cost of replacement

ble

the

million

original
of

the

after

is dou¬

cost, about $40
$183
million
of

taxes

understatement

Francisco

of

reported

for

depreciation.

Similarly, if the cost of replace¬
should

ment

be

50%

above

the

original cost, the overstatement of
profits would be about $20 mil¬

Thus, if the replacement cost
to 100% above the original

level,

1948

the

reported

about 11%

overstatement

profits

would

to 22% of the total.

the replacement cost is

of

be

higher, the

correspondingly greater.
the

basis

of

equivalent

full

annual

coal

earnings,

facturing industries in 1939, to
$347 above the average in 1948,
relative

a

improvement of

more

than $500."
Professor Backman also

pointed

out that coal miners receive

benefits

non-wage

workers.
miners'
tion

value

"The

pension

funds

coal

of

and

that

exceeded

pay

larger
other

than

vaca-

in

manufacturing industries by
than 10 cents

hour

an

ail

more

prior to the

granting of liberalized pensions in
many industries in recent months.
The

is

spread

narrower

In

now.

time

and

one-half

hour

lunch

time.
"Coal wage increases have far
outstripped gains in productivity
during the past decade. As com¬
pared with a rise of
120%
in

hourly
hour
As

output

wages,

has

man-

per

risen

only about 20%.
result, unit labor costs have

a

almost

doubled

quent

with

pressure

the

conse¬

prices.

Most of

in

productivity

to

the

for

highher

the

reported rise

was

increasing

coal

attributable

importance

of

surface mining where productivity
is about three times as large as

underground.
in

The actual increase

output per

mines

than

man

appears

the

overall

for

surface

has

occurred.

make

rise

it

in

a

in underground

have

The

clear

that

bituminous
was

less

been

average,

mining

productivity
than

to

little

while
change

available

data

the

reported

coal

industry

nothing

more

statistical mirage.

"The
ness

rising phase of the busi¬
cycle has been followed by a

decline

in

business activity and
industry has been af¬
fected by this decline. The ability
to raise prices and retain or ex¬
the

coal

pand demand is significantly dif¬
ferent when
in

the

the

business cycle

ascendancy

than

when

is
a

decline is under way or has taken

place.

"During the past year the coal
industry has had first hand ex¬
perience with what such
favorable

an

un¬

change in environment

When wages and welfare
fund contributions were increased
means.

in

July

1948, the industry raised
price. However, it was quickly
compelled to reverse this rise by,
its

It

overstatement of profits would be

of

"u

during the past decade.

miners have progressed from $166
below the average for all manu¬

fessor

precise estimates

as

other

of

sec¬

result of these factors, com¬
bined with work stoppages."

as

wages

those

com¬

the start of three-day and

cost

Chronicle)

FRANCISCO,

re¬

which

profits had declined sharply
from the 1948 level, even before
weeks.

coal

of

with

same.

marked

the

addition, underground coal miners
receive
pay
for IV2
hours not
worked, namely, one hour travel,

pany

is 50%

Pflueger & Baerwald Add
SAN

of

showed that bituminous coal

lion.

INCORPORATED

since the last

1948 must be set aside to cover the

from out-of-

come

banks, with the earlier 2Mi% and the
acquired by large money center institutions.

8c Co.

that

granted in 1948.

were

Backman

profits

While the 2K>s due 1956/58 and the Z%s due 1956/59 have
been bought in large amounts
by the commercial banks, there
has been more
than a passing
interest in the 2^s due

9/15/67-72.

showed

Declining Profits
Dr.

"Total

supplying the needed issues, which has
tended to keep quotations from showing the effects of this
buying.

NOTES

of the war and

railroads,
velopments.

are in the making, which could have a marked influence
outstanding securities, especially the bank issues, the ques¬
tion is being raised as to whether the
buying which has been
rather vigorous in the more distant maturities will continue un¬

abated.

also

of

upon

CERTIFICATES

Backman

some

policy

BILLS

and postwar period." Pro¬

war

fell by more than 60%
belief

compare

an

c&ase

QUESTION

Because

earnings

ber of factors including declining
business activity, coal price de¬

the

indicate

the

time

the

about

were

data

"On

rise of 120%.

end

TREASURY
★

hourly

$1.95 for coal miners

low the average rate in 1948." The
decline in profits reflected a num¬

time.
A MOOT

close to the

are

clines, loss of markets to compet¬
ing fuels, higher labor costs, re¬
duction
in exports,
dieselization

in

These

workers

as

Current

more

coal

weekly earnings were $6 lower in
1939, while at that time hourly

hourly and weekly

They

in
miners'

week

a

earnings

this

ond half of 1948 and one-third be¬

than

$10

contrast,

Backman pre-

the Southern Coal Producers.

45.9%

prices

and

In

improvement

the

the

almost

pared

Wages, Profits,
Productivity," on behalf of

first half of 1949

by the
In other words, it is indicated there

level of short-term rates.

1949.

..

by the amount of offerings of these

more

and

Dr.

25.

were

higher.

miners averaged 30 cents an hour

idential

Coal

hourly earnings

As com¬
pared with steel workers, the coal

with the Pres¬

real earnings have risen since the

long-range pattern of debt

new

effects of greater flexibility in monetary policy, wrhich means
it will be guided more by the ebb and flow of
funds, it is be¬
lieved the short rate will have less influence on the inter¬

Co.

★

128-page refiled

marked change

a

hour

compared

the

policy.

an

partner in Skall, Joseph, Miller

★

an

stantially less than wages, real
hourly earnings rose 29% and real
weekly earnings by 80% during

cost

INDICATED

the belief that

likely to be used in future operations
obligations.

March

prior thereto

upon

more

If

H.

T.

and

cents

Since consumers' prices rose sub¬

bonds, which would
be eligible for all buyers, commercial banks as well as non-bank
investors. The change will be gradual, it is believed, but a real
start will be made during 1950, unless adverse business conditions
develop which might temporarily hold up the anticipated new
policy. Broadening of the supply of securities, other than shorts,
which could be bought by commercial banks would no doubt have
an
influence upon the outstanding eligible obligations.
Among

G.

formerly

was

same

sity, stated in

hour in 1939, or
During the same
period, weekly earnings rose by
about $50 from $23.88 to $72.98.

more

debt

management is evolving, some money market followers

mem¬

and

Univer¬

and

a

con¬

and

New

represents

since 1939 when weekly earnings
of
coal
miners were about
the

"Bituminous Coal

with 88.6 cents

policy is about to be

new

Business and economic

greater importance in determin¬

assume

in the

a

Pro¬

of Eco¬

top of the hierarchy of American

debt

or

in the past in refundings and

were

Jules

statement,

industries.

it is believed

rates

money

Based

part¬

&

Street,

York

Exchanges,

Skall

Cleveland
a

admitted

A.
La

the

David.

be

This

ent,"

Board.

which will be avail¬

opinion gaining ground that debt cost

through the list.

A. G. Becker Partner
—

sociate

em¬

m

port

mining force which they

ing

ILL.

Backman, As¬

York

been, most

substantially greater.

was

Relatively Higher Wages

re¬

vol¬

of

nomics,

obligation.

1V&%

1949, the proportion of overstate¬
ment

"Coal miners' wages are sub¬
stantially higher than the average
received by workers in all manu¬
facturing industries," according to
Dr. Backman.
The advantage is
57 cents an hour and $20 a week.

fessor

from

flexible market is being looked for in government securities,
with fluctuations quite likely
to be more pronounced all

David G. Skall to Be

of

done

labor.

MORE

South

consequent

a

duction in the

fessor

in

with

available

of

ing

izations.

120

industry

service charges have ceased to be the all-powerful and deter¬

ditions, it is felt, will

gram to

bers

the

being

is

the ineligibles.

the

further loss

Dr.

going

and

mechanics of finance;

a

ploy

restricted

unfolded in the money markets.

will

mean

INVESTMENT

deficit

Skall

would

registered

in demand with the
into strong hands in volume.
obligations have also been under accumulation,
with pension funds somewhat more aggressive buyers than the
savings institutions. However, between the two groups it is in¬

public, dealing with
finance; an educa¬

CHICAGO,

round of labor cost in¬

new

A premium is indicated for the

tional
program
designed to ac¬
quaint students with the problems

nership

"A

creases

of markets for the bituminous coal

for what had

well-prepared

was

Considerable

bank

and

substantially higher than average received
manufacturing industries.

ume

obligations

government

i

in all

return to easier credit would no

a

considerable buying power around,

1956/58s

planned

speakers

a

general

then,

able if prices should recede from prevailing levels.

leading Southern Cali¬
industries; an Exchange-

business

by that time, a one-year 1V4 % would
Conversely, should there be signs of de¬

outstanding

securities.

there is

The

sponsored

continue

even

a

of

fornia

should

1948

since

Maintains reported
overstated, and they have declined sharply
before working curtailment.
States coal

miners' wages are

liquidation by Federal of long Treasuries, without
appreciable effect upon quotations, indicates the good quality
of the buying.
Government bonds are being taken out of the
market by investors because they want them for income purposes.
These purchases are still being made on a scale basis which means

try to the general public.

projects

round of wage increases would mean

new

were

any

expansion of its program
to interpret the securities indus¬
said

inflation

of

profits

The sizable

Purcell

the

include

postwar

in¬

was

a

Mr. Morgan revealed that the Ex¬
change now has under way plans

He

of

forces

showing the market

BUYING

continue

1950

ascendancy

intermediate

the

Morgan

role in the program.
On accepting the Chairmanship,

for

the

to be in the cards.

new

public relations program
augurated in 1949. Mr.
will

the

If

been offered by the Treasury.

range

-

warns

onlyminor changes with the announcement of the financing

nge's

a

in

be

terms

chair¬

manship
E

conditions.

Prices

bour, Smith &
Co., under
whose

maturities

On

terioration in business by
doubt take place.

Bar¬

of

ager

to

seem

11,

general

March

16-

economic

Carl

u r c e

the

of

with

Treasury

the exchange offer of a 15-month 1%% and the
obligation for the April maturities was a mild surprise.
The minor firming of interest rates which has been in evidence is
continued with the present financing. By combining the March
and April operations the monetary authorities are in a position
to sit back until sometime in May, to see what will happen to

airman

M. P

financing

1V4S and five-year IV2S was in line with expectations.

other hand,

the

new

succeeds

Dr. Backman

11/2 %

change,
C

Wage Rise in Goal Industry Would Cause
Further Loss of Markets, Backman Warns

Governments

on

Thursday, February 16, 1950

further loss of markets for coal industry.

Angeles

The

New

By JOHN X. CHIPPENDALE, JII.

the

Stock

Reporter

CHRONICLE

prominent

com¬

mittee
Los

Our

CALIF.—

Morgan,

FINANCIAL

.1

Angeles Exch.

ANGELES,

Emerson

&

Because

sharp decline in profits in

the

pressure

"Average
decline

in

of market

forces.

realization

began

August

1948.

By

to

De¬

cember, practically the entire in-

'

Volume

171

had

crease

March,

Number 4882

been

prices

wiped

out.

THE

tion

has

FINANCIAL

CHRONICLE

(725N|

21

were

averaged

41 cents

or

&

By

significantly
below the level prevailing a
year
earlier.
Since April, the realiza¬
ton

COMMERCIAL

about

$5.41

ton less than

a

Public

Utility Securities

a

Securities Salesman's Corner

By OWEN ELY

the

level

prevailing prior to the last
rise in labor costs in July 1948.
Columbia Gas

Reduction in Demand
"In about

of

45

into

one

cents

Why?

The

the

reduction

fell

about

of

of

10%

1949,

is

found

demand

in

the

in

The

the
competitive
the industry for the
volume
of
business.

ability

round

to

of cost

3%

the

to

the

form

of

higher

prices without the danger of fur¬
ther

losses

to

competitive

compared

fuels.

with

•

lower.

to

shift

And

to

such

further rise in unit cost

head

must

spread

"The

earnings

poor

bituminous

the

has

past

luctant

to

equity

coal

made

make

of

in

investors

"The demand for gas has grown
steadily and enormously
end far beyond reasonable expectations based on

feet

in

new

significant

Modernization

and

ex¬

to

hold

down

unit

im¬

labor

"In

addition

anization

the

year

Co.

are

will

earnings to retain
invest, and (b) poor earnings
will discourage equity capital or
no

who

bonds.
will

Lack

also

prevent

coal

industry

the

extensive

the bituminous

from

engaging

research

in

which

persons feel is essential to
the revitalization of the
industry.

many

"The general

pact

of

new

nature of the

labor

for

an

encing

increases

cost

^on job opportunities

clear

seems

industry which is experi¬
decline

a

position.

For

in

such

its

relative

industry,

an

significant upward pressures
.its cost structure can only
to

speed

dencies.
.a

at

the

up

The

net

contraction
a

vail

faster
in

im¬

of

rate

the

upon
serve

declining
result

ten¬

must

be

job opportunities
than

absence

would

of

such

pre¬

cost

"raising developments."

Gilbert Pearsall, V.-P.
of Putnam Fund

average of 55,000,000 cubic feet per day) at times
during
when the demands on the Tennessee Gas Transmission

less than

While the

might

purchase
of investment funds

an

its

large underground
type possible."

and

persons

capacity to deliver. The fact that we have
storage facilities makes a contract of this

gas

Distributors, Inc.,

of

Boston, the general distributors
flof The George Putnam Fund, has
that

.announced

sall

has

been

.President

and

Gilbert

B.

Pear¬

elected

a

Vice-

will

be

in

charge

of the firm's Pacific Coast activi¬

ties.
Mr. Pearsall has

just completed
la tour of duty with the U. S. Air
Force at the

he

had

University. Prior
been

a

and

.

supply of gas, had declined to
by 1946, the company has been doing
some intensive
drilling and brought in valuable new production
including an important well in Maryland, well outside the known
gas area. At the end of 1949 Appalachian reserves
had risen slightly
2.8

to

trillion

which

combined

brings the system total

to

To

"

He told me a fe\Y things about
knowing What Not to Do. For
instance, he said, "You want to save yourself time and energy in
this business, but most men don't do it."
In almost every other
field of work, in the sciences, in
offices, in management they

study their work.
way

with

reserves

in

the

be

can

They find out the shortest most direct path to

found.

around.

But

what

They call

do

here

unless

way;

salesmen

most

a

do?

better
They

there.

and

They try one way
They do it over and over again The Hard
Way. Well, I found out right at the beginning when I was selling
books, that there was a way to get in the door. If I used it I
would get in more doors. But I also found out that I couldn't
get
and

in

then

all

time

the

to get

doors, and after I got there I could also waste
So I

soon

learned

how to say the

a

lot of

right thing

in, and when I did get in, I soon learned What Not to Do
came
to wasting time on the wrong people.

it

He
read

next.

dead-heads.

on

when

the

related

some

of

how

he

also

his company's

learned

What

Not

to Say when he
They had sales talks

sales material.

—he

tried them—they didn't work.
He said they didn't fit his
personality. One instance was a pre-approach telephone canvass
for appointments. He said he tried it for about three
days, then
he

chucked the whole thing and began
talking the way he
thought it should go and he clicked. AfteV that he soon learned
try ideas from others and sift the wheat from the chaff. He

to

learned

again What Not to Do.

One
was

a

;
'

day he took

call-back he

a

new

salesman out with him

making for the other

was

on

a

call.

It

When he sat

man.

down with his prospect in his

home, he said he could see that he'
was going to put him right in his
place if he let him. The prospect started out by looking for an
argument. He proudly showed him 10 errors in the set of books
that he was offering (which he had looked
up the week before
while he was investigating the proposition).
He said to him,

was

up

against

fellow who

a

"So that's the way your great
company does it—here are 10 errors
in these books—10 places
they are wrong, what do you say to
that"? In this instance he saw that the other man wanted to show
off his knowledge and his self
and

importance, so instead of arguing
Do, he simply said, "Well, I don't
I am only the salesman, all I know 1
Maybe what you say is true; after all, as you'

knowing What
Mr. Prospect,

Not

know

you

is how to sell them.

know, this set of books
fessors and research
ican

make

to

see

was

mistakes."

some

written by

in the

men

some

of the greatest pro¬

country, but I

And from

there

suppose

on

all

the

even they
fight went'

right out of his prospect. He was the big man and he bought.
they came out of the interview his salesman said to him,
"Gee, that was a push-over, wasn't it"? He replied, "All my sales
When

pushovers.

Knowing
is

If they are not, I don't make them."

what

based

becomes

not

with

art

an

to

do

you

with

comes

recorded

upon

knoweldge that
When
selling

experience.
all

sales

will

be

push-overs.

southwest

trillion, the highest in its history.
problems, the company has developed

on

Thus the company in recent
years has

construction, $80 million

the transmission

on

Columbia expects to serve important new markets
in the near
future. Service to Consolidated
Gas of Baltimore is expected to
start May 1, and service to Central
Hudson Gas & Electric will
also begin this year. An
application to deliver gas to the subsidi¬
aries of United Gas
Improvement Co. has been approved by the
FPC and is awaiting approval of the
Pennsylvania Commission.
A number of other cities in
Virginia and elsewhere
be served.

may

directly and indirectly by 32%.

To sustain this

$43 million

eventually

Service to all of the 23 cities
involved would increase

customers served

new

last year. .This

was

done

1,040,000 shares of

Mail your Annual Report to the Investment

Houses
them

of

to raise

through sale of

common

stock.

gas for
only a small portion of the heating season. Rate increases
totaling
$1.4 million annually were in force
only a small part of the year.
Also, the system was not yet serving the
big new wholesale mar¬
kets mentioned above. 1949
earnings, therefore, would not appear
to represent the
system's real earnings capacity under normal
future conditions.

the

for

Country.

information

Investors look to
on

your

company.

Addressograph Service
We have

huge expansion program Columbia had

money

Columbia hopes to increase its
earnings by a substantial in¬
crease in
househeatirig sales. 115,000 new house-heating units were
installed in 1949 after restrictions were
lifted, but used

Neuberger & Berman

partner
of Van

Exchange. During the
with

the

Army Air

Corps.

1

largest

a

system and $21 for better distribution facilities.

to

graph

a

metal

stencil in

Department

for

our

Addresso¬

investment

every

banking and brokerage firm in the country,

alphabetically

arranged

by

States

Cities, and within the Cities by firm

and

names.

This list is revised daily and offers you the
most
Our

up-to-the-minute

service

available.

charge for addressing envelopes for the

complete list (United States

$5.00

per

or

Canada) is

thousand.

Donald

in

Dryfoos, member of the

York

the

1st

Stock
will

Exchange,

become

Exchange

firm

a

on

partner

of „Neu-

(Specia1 to The Financial Chronicle)

SAN
eanor

staff

FRANCISCO,

can

also supply the list on gummed roll

labels at

a

small additional charge.

CAL.—El¬

Sutro

&

Co., 407

Mont¬

gomery Street, members of the
New
York
and
San
Francisco

Mr.
Pearsall
will
make
his
headquarters at 63.9 South Spring

Stock Exchanges.

Street, Los Angeles.

Jacques Coe &

Co.




addressing completed within 24 hours.

We

Gatti has been added to the
of

berger & Berman, 160 Broadway,
New
York
City., .Mr.
Dryfoos
retiring
from
partnership
in
Co."

All

Sutro & Co. Adds

Admit Donald Dryfoos

March

was

Not to Do.

Today he is top salesman for one of
organizations (still selling intangibles). He
sales manager at a salary way up in the big
figures,
but he quit the hard job at the top several
years ago and is back
selling in the ranks again—by choice—because he likes it.
nation's

has been

8.3

in time of extreme demand.

spent $168 million

York Stock
he

a

out What

smooth peak
delivery
underground storage capacity which will accommodate 102 billion
cubic feet of gas. Another
safety factor is the construction of 12
liquefied petroleum gas plants or "tank farms" intended for use

New

war

fields, from which the

system formerly got its principal
about 2.5 trillion cubic feet

syndicate manager
Alystyne, Noel & Co. of New
York City, members of the New

"

found

the

Command and Staff

School of the Air

^thereto

That is

are

in the Appalachian

reserves

33 million debentures 3s and

Putnam Fund

further contracts with Tennessee

day. The second is the 'seller's option' contract. It calls for a
guaranteed delivery of 20,000,000,000 cubic feet per
year (equiva¬
lent to

there

two

are

awaiting Federal Power Commission authori¬
zation. The first calls for the
delivery of 25,000,000 cubic feet per

will hinder investment and mech¬

(a)

there

Gas Transmission Co.

"Higher labor costs, by affecting
earnings of the industry adversely,

or

...

.

coal.

little

our

pipeline companies, which have been
approved by regulatory commissions, • call for firm
delivery of
782,500,000 cubic feet of Southwest gas a day. We expect to
get
substantially all of this quantity from them by the end of 1950.

hope for maintaining or increas¬
ing the consumption of bituminous

be

only 1,633,000,000 cubic

"Our contracts with the

prices, provides the main

because:

far this winter has been

so

sources.
On Jan. 1,
1950, under effective contracts with
pipeline companies, 593,100,000 cubic feet of Southwest
gas a
day flowed into the system's lines.
•

productivity.
Improved
productivity, which would con¬

tribute

far

the

proved

cost and

so

Southwest

preciation allowances.
"New investment is vital to in¬
and

meet it.

commodity.
"In January, 1946, when the
expansion program was stepped
up, the system was getting 146,000,000 cubic feet of
gas a day from

therefore, must be fi¬
primarily out of retained
earnings and depletion and de¬

mechanization

now

Twelve times

on

demand for

pansion,

creased

can

past
Sales of gas in 1949 reached an

heavy increase in the

nanced

„

We

since

Dec. 15, 1949.
"This new ability to serve more
people with more gas was not,
of course, the result of one
year's effort. Rather, in 1949 we reached
the primary objectives of a development
program that began more
than four years ago. After
tl\e war, the price of oil and coal rose.
The price of natural gas has remained at
about the same level.
This reversal of the price pattern
brought a

re¬

available

capital

amounts.

record

larger than in 1948.

war's

have delivered

fewer

industry

9%

were

during the current winter the
system exceeded the highest daily sendout previously experienced
in our history.
We now have the ability to deliver more than
two billion cubic feet of
gas in a single day.
The maximum we

units.
the

were

intangibles.

flounder

experience.

as over¬

over

taxes

talking with a very successful salesman
He started selling books when he was in college.
hard school—selling books. He told me that is where he
was

the

all-time high.

further declines in volume; fewer
jobs for coal miners, and in time
a

and

of

I

results, and when they find it they do it that

the

still

mean

16%

a

has had "growing pains" since the prewar period.
We quote President Crocker as follows:

competitive

shifts

reduced

were

The system

It has learned from experi¬

tomers

expenses

Overall figures showed

The other day

gain of 3% in revenues and
in costs and dividend payments, so that sur¬
plus earnings retained in the business were less than half those of

payments

competitive

that any increase in price is
invitation to its remaining cus-

-fuels.

the

increase of 5.4%

ence
an

and

previous year. The dividend rate of 75 cents a share was main¬
tained but due to the increased number of shares total dividend

fuels.

The industry is fully aware of the
unfavorable price position of coal
as

to

annual

hand miscellaneous

another

on

an

in

consumer

still

pass

increases

due

lion, sales of gasoline and oil dropped 26.3% to $6.3 million. Cost
of purchased gas gained
nearly 13%, payrolls were up 5%, and
interest and income deductions increased
nearly 20%; on the other

This is certainly not indicative of
any

seems

report, just released, reveals that while sales of
increased 5.2% to over $114 million and miscellaneous
(chiefly gas appliances) increased 11.5% to nearly $3 mil¬

sales

by

shrinking

1949 reported earnings of
The decline

natural gas

haif

and

scramble

the calendar year

shares, the decline in the prices of oil
gasoline, and warm winter weather which reduced
demand for house-heating.

which

first

in

compared with $1.12 in 1948.

natural

ton.

a

cents

the increased number of

converted

was

answer

87

increase

year, an

ton

a

reduction of 41 cents

a

By JOHN DUTTON

Columbia Gas System

Miss Gatti

was

formerly with Barbour, Smith &

Herbert D. Seibert & Co., Inc.
Publishers

of "Security Dealers of North America"

25 Park Place

REctor 2-9570

New York 7

22

COMMERCIAL

THE

(726)

Continued from page

4

I

FINANCIAL

&

de¬

of non-gold money and

form

(2) Redeemability and Conver¬
tibility 1 Into Silver—Silver cer¬
tificates are redeemable in silver

Evils of Our Irredeemable

for

but the
directly re¬
in, or convertible into,
gold.
Since
all
our
domestic
money
and deposits are freely
convertible into one another, they
constitute
a
potential
demand

Currency System
such

and

rency,

re¬

currency,

a

gardless of the variety of forms it

take,

may

debauched

a

cur¬

dishonest currency

a

necessity,

of

and,

is

It is

rency.

rests

upon

a

dishonesty in our be¬
It was introduced in this

standard of

havior.

government repudia¬

country by

bondholders,

tion of its contract to

administrative violation
of
pre-election commitments, and by
by

fact

of

misstatement

the

to

as

ability of our nation's gold stock
to support a redeemable currency.
Where dishonesty enters, evil be¬

gins.
Both

understanding and

our

our

honesty come into question in any
worthwhile
examination of our

of irredeemable currency

system

the

of

and

such

of,

into the economy
the people of the

currency

a

of

lives

and

oper¬

are

with, or in conse¬
the introduction of

along

ating

quence

that

forces

United States. All careful observ¬

readily perceive the strik¬

can

ers

this

in

tendencies

and

events

current

between

parallels

ing

those described by
characteristic .of Europe
thirty years ago.

and England

Perhaps
the
most
arresting
characteristics of our general be¬

of an
are:
(1)

havior in respect to our use

irredeemable

currency

multitude of
people, many of them commonly
called
"leaders," much of "the
the

of

tendency

a

press," and, apparently, a major¬
ity of the United States Congress,
to support and to advocate an ir¬
redeemable
currency
which, to

all

"engages

words,

Keynes'

use

side

the

in

it

does

fied

the

million

a

to

diagnose"; and (2) the reluctance
of leading defenders of our irre¬
deemable
currency
to
examine
state accurately

carefully and to

of

mores

ment

officials

policy

of

pertinent facts and principles
involved, and to apply the stand¬
ard of honesty to this currency

and in their
it.

understanding
the

Leading Citizens and Statesmen,
Not From

Popular Demand

Brand

The

frequent

ciples and pertinent facts regard¬
ing a nation's monetary system is
not to be expected. The field of
if correct

obtained.

scientific
and

inten¬

and

are

answers

who

Those

have

of their adult lives—

twenty

say,

long

calls for

spent most

forty

to

students

principles

of

of

years—as

like all other systems of

were

redeemable

there

much

the

for

need

the

history
recog¬

money,

is

to

learn, and

modesty

care

in

offering

that

are

believed

must

generalizations
to

be

accurate.

national

from

come
are

leaders

wise enough to be guided

by the most reliable specialists in
field.

the

leaders

these

Furthermore,

must

be

honest,

rather

politic. If a
lacks such leaders, it is in

nation

than

merely

The

dan¬

a

position.

gerous

contention,

sometimes

ad¬

those of other nations—

or

will

proceed properly if they re¬
spond
to
popular demand
and
that

the

the

first

general

sentials

in

task

public

is

to

educate

the

to

as

jority
field

facts

monetary

and

education

of

the

ma¬

the
been

of college students—in
of

be

money

the

are

field

vices

$35

per

(ignoring
handling
Anyone in the United

thus

has

his

domestic

Federal

a

Reserve

bank,

at

Those receiv¬

domestic

and

money

de¬

gold

the

at

in

industry

fine

of gold

pays

these

all

procedures

domestic money and deposits
Jinked
definitely, but indi¬

our

has

never

are

involved, all
deposits

nations
of the
is apparently

leading

tion

exchange.

redeemable

prived

currency

them

their

power

control

over

of

direct

exercise

the people's

of

use

to
the

When our people
currency
redeemable in

had

a

gold,

every

individual had power,
possessed money

to the extent he

and

States of a
it also de¬

deposit

to register
of the policies and

currency,

his disapproval

practices of the banks and Treas¬
by demanding redemption of
their promises to pay.
Each in¬
dividual had the power to send

ury

disapproval to the
Treas¬

his message of

central signal system in the

and Federal Reserve banks—
gold reserves—over the

ury

their

to

golden wires, as it were, provided
by a system of currency redeem¬
able

in, or convertible into, gold.
When distrust of the value of the
banks'

promises

Treasury's

and

the number of warning
signals increased. Every demand
for redemption was recorded by a
drawing down of the gold re¬
spread,

the

of

serves

Reserve

Federal

No individual

Treasury.

or

other individ¬
organization for the

needed to join with

in

uals

some

of sending a plea to the

state
the

basic
institu¬

the

today,

States

of which lies in the

cause

Federal Government
of irredeem¬

by the

in 1933 of our system

able currency.

purse,

accurately.
We

in

have,

high

degree, one
to our

type of system applicable
relations

international
other

and

an¬

domestic¬

applicable

type

have,

we

irredeemable

an

restricted gold bullion

in

The Open Gate to Socialism
purchase of the support of

(b)
—The

vote-delivering

groups

pressure

places the government on the road
to Socialism in high degree or in

In¬
must be
the members of these

thorough-going

funneled to

Wealth must be
and given to
as benefits.
Projects pleas¬
the pressure groups must
from

taken
others

ing
be

manner.

of helpless groups

comes

some

to
undertaken. Competitive mar¬
must

kets

hampered, circum¬

be

vented, or destroyed in order to
extend favors in the form of price

subsidies, rent controls,
to those whom the gov¬

controls,
and

so

on

favor. The

endeavors to

ernment

enters into unfair
competition with private enter¬
prise by engaging in productive
activity, free of tax and similar
burdens borne by private enter¬
prise;
by
lending the people's
government

non-competitive rates;
other aids at prices

at

money

by extending

of competitive mar¬

those

below
kets.

great variety of govern¬
undertakings, most or all of

This
ment

steps in the di¬
socialization or pater¬
totalitarianism, is macte

constitute

which

of

rection

nalism or

and is invited by our

easy

oC' irredeemable

system

currency.

freed

is

government

The

from

-

ac¬

countability to the people; money

the government
beneficiaries to get; the

made easy for

is

its

and

be

of pressure groups can

favors

tion

has

in which

way

our

tic-international
fitted accurately
nition.

It

scribe

seems

systems

separately

it

will

that

be

revealed,

domestically

certificates

there

into

is

in

A

element

such as
gold is
terms of the

currency,

in

sold

at

currency

fluctuate

thorough-going
system

rates

widely.

irredeemable
also exist

may

with trading in gold prohibited or

with
in

in

markets

defiance
Such

gold

of

where

holders

abroad when
of

dollars,

and

other

ments, have exchanged their dol¬

(A)

(1)

Our

Currency

and

System

in

so

currency—money

far

domestic, monetary

as

cerned.

rency

use

gold for
is con¬

The Government, in

govern¬

discount in terms of gold.

non-gold

our

cur¬

has been exchanged at vary¬

rates

The

deposits—is irredeemable do¬

mestically

and

discount in what is
called the "raw" gold market.

ing

The Government Gives Our
our

a

banks

Domestically,
rency

People Irredeemable Currency for
Gold—All

central

lars at

The Domestic Characteristics
of

depreciation
in the

1 Silver

silver;

of

sense

certificates

they

are

of

our

cur¬

of its declining
are

redeemable

convertible

into

any

other domestically-used money or

de¬

one

the very de¬

injure

deemable

money,

tend

to




them.

promises to

pay

in the

practice in exchangeability of
currency for another. The word "cur¬

matter

I

be,

can

because

have

and

been,

ignored.
When

irredeemable

of

riod

currency

being led into

without

of

rency" is used here to include money and
bank deposits.

support of pressure groups in or¬
der to maintain itself in power or
the

lead

to

government deprives a

the

power

to exercise

generally does ignore their pro¬
tests; and it can, and often does,

people into Socialism

other form.

some

hand, it seems rea¬

On the other

sonably clear that a government
could not lead a people into So¬

the public purse which,
a redeemable currency gives them.
Socialism and a redeemable cur¬

fundamentally, natural

are,

rency

It is for this reason

enemies.

the British

with
is

foster

and

irredeemable

An

it is a necessary

over,

government frees itself of the pos¬

States has

people

its

over

use

by the

of their

purse,

it cannot be held effectively to an

accounting and, if so disposed, it
use the people's purse to buy-

can

is

support necessary to keep it¬
to

gain

the

vote-delivering
The
in

the

a

people's
manner

desired

of

support

groups.

pressure

money

large

is distributed

designed
political

to

insure

support.

currency

only provides a wide-open
Socialism but it invites it.

aged economy.

control

England

maintain

So¬

cialism.

tality

direct

of

people

the

redeemable currency if it

a

to

that

Government could not

(a) The Control of Our Govern¬
ment by Pressure Groups—When a
of

people have the

cialism while the
power over

become their boss.

sibilities

in

dictatorship

government

or

provide
a

self in office. A basic policy then

provision for redemption; conversion is a

in

they

the

required that all holders of mone¬

public,

ineffective

been

have

in

tary gold turn it in to the Govern¬
ment and receive in return irre¬

The

cannot

through organizations, appeals to
Congressmen, letters to the press,
and
so
on—all of which efforts

of

gen¬

apparently,

through other devices—

to appeal

public purse, it frees itself from
responsibility to them; it can and

found

gov¬

and

only had the power to protest and

gold currency in terms of gold, as
has been observed in recent years,

fined

banks

people of the United States.
Since that time our people have

direct control over its use of their

than

central

fiscal

and

monetary

non-

our

con¬

to

their disapproval or
bank, Treasury, and

practices was destroyed. The sig¬
nal lights went out both at tne
central signal board and for the

people of

bility since redeemability is
ernments.

of

Government

conducted

of law.

depreciation

has been

irrdeema-

of

a

1861 to 1878,

commonly

currency

ar¬

If

gold.

is permitted

thorough-going system ot

irredeemable

(silver
and that,
relations,

silver)

a

nation's do¬

a

and

currency

a

had from

that

such analysis
for example,
some
of our

international

our

be

redeemable

is

currency

distrust

bought and

domestic

monetary

rangements. Under

tive manner,

called

sometimes

irredeemable

a

our

currency

is

we

brief defi¬
necessary to de¬

international

and

can

irredeemable

under

hybrid domes¬

into

of

what

free market for gold

defini¬

great limitations in use¬
Apparently there is no

fulness.

judgment

his

record

could

and

brand

mestic

relations.

simplified

common,

main¬

without the

obtained

to the Treasury

directly.

fixed link between

standard

international

our

This

or

money

been

a

thorough-going system of irredeemability in which there is no

system domestically and

currency

have

on

and

ally. Described in over-simplified
terms,

purpose

Reserve banks

tained

inclined to advocate, in
of

affairs

Socialism.
parity with gold at
But this requires that the govern¬
With the institution of our sys¬
this rate since our Government
ment understand the dangers in¬
devalued our dollar on Jan. 31, tem of irredeemable currency, all herent in
an
irredeemable cur¬
the golden wires, running from all
1934.
rency,
that it be determined to
It is in this system of indirect our people to the central signal
institute
redeemability
at
the
The power of earliest opportunity, and that it
convertibility that one finds a system, we^ cut.
the people to record, in an effec¬
major
difference
between
our
be not disposed to purchase the

describe its characteristics

we

domestic

our

and

system

our

posits. Redeemability is a matter of legal

that

in the conse¬
quences that flow from such loss,
and
in the crippling of private
enterprise in foreign trade and
public

banks

of gold.

ounce

Through

as

fine

per

user

domestic money
deposits at the rate of $35 per

and

ir¬

$35

of

rate

The domestic

ounce.

1933,

and,

realized.

eral,

of

mestic money and deposits for his

our

realized

governments

rate

shipping gold to
receives dollars at the rate of
$35 per fine ounce of gold.
The
domestic gold miner receives do¬

unique. Its virtues and faults can¬
be understood
correctly un¬

es¬

principles, is without any sup¬
porting evidence. Popular educa¬
tion—even

and

us,

not

in

vanced, that government officials
—ours

or

the

public purse.

government,

or

though there is only one type of
irredeemable
currency,
confuses

great

and

Monetary reforms, of necessity,
who

currencies,

defects

ple of their power to exercise con¬
trol over the government's use of

from

posits at the statutory rate of $35
per fine ounce.
The central bank

ten¬

United

except in the
gold. The
lie in the loss by the peo¬

domestically,

of the prices of raw

receive

and

and deposits converted into

obtain

dency to discuss our system of ir¬
redeemable currency as though it

a

nize the intricacies of the subject,
how

common

or

banks

to

to

ing payments in gold from abroad

Irredeemable

of

and

gold

the statutory rate.

upon

tion

Government's

ounce

and

Currency Has Unique Features

less

Popular understanding of prin¬

be

acting

in

and

make

in

line

boundary

statutory

our

Re¬

gold, indirectly through his bank

them.

Our

to

Federal

figuratively, stand at

international

payments,

honesty in ascertaining facts and

principles

Treasury and
banks

money

quires, second, a determination to
provide the best system known—
that
is, it requires unqualified

of

case

is, in the main, the
that
prevails in

That

system of indirect conversion has
thus far prevented such deprecia¬

pressure groups.

Treasury

States, who needs to make foreign

guidance of the most compe¬
specialists in the field. It re¬

tent

of

trol

favor-seeking pressure groups.

people of the United

States

uses.

charges).

sufficient

in value of

in terms of gold. Our

is passed by

Government, in 1933, deprived the

United

central

intricacies

the

of

fluctuation

or

currency

and the people's purse
Congress to the con¬
the
vote-delivering and

purchase,

and

at

involved to cause officials to seek

our

oner

the sale of Treasury gold for in¬

fine

tary systems, or at least

ciation

government becomes the pris¬
of those whose support it .can

the

dustrial

payments

Responsible government leader¬

domestically, are not to
important depre¬

currency,

be found in any

political support and rush to
Washington
to
make
the best
terms possible. One result is that

a

ready

the

irredeemable

our

groups

pressure

perceive that monetary favors
for

to be obtained in exchange

are

(4) Loss of the Power of Our
People to Control the Use of Their
Public Purse—When the Federal

our

the

in

international

to

domestically-mined gold to

Our

ship requires, first,
an
under¬
standing of the pertinent facts
and
principles regarding mone¬

world

to

leadership

good

or

chiefly

serve

to popular
provide reli¬

cannot

related

govern¬

adopt

rate of $35

troy ounce through a
indirect convertibility

of

our

field of money.

Among

Monetary Reform Comes From

sive study

who

fine

process

sale of

responding

inclinations
able

that

Convertibility—
is tied to

payments and, secondarily, to the

gold is the
whereas silver

these

as

mone¬

currency

the statutory

at

per

has

especially irre¬
deemable paper money, are the
poor man's money. It is for rea¬
such

domestic

gold

and paper money,

sons

Indirect

(3)
Our

that

man's money

rich

The defects of

Vote-delivering
soon

central sig¬
nal board flashing any lights of
rectly, to gold at the statutory
the issues appropriate for debate.
or to Congress in behalf of sounder
rate of $35 per fine ounce.
In so
protest and warning.
Irredeemable
currency
systems
monetary
or
fiscal
procedures;
A nation may go through a pe¬
allegations regarding have assumed a variety of forms. far as these transactions have been
each individual could act
alone

the

money

being

of

October 31,

on

and bank deposits.

money

imbedded in the
people—the feeling

our

belief

or

Gold,"

of

Cross

stock

1949, equalled only 9 per cent of
our
Treasury's gold stock
and
only 1.2 per cent of our non-silver

deeply

become

not

able

is

on

nation's

our

tary silver which,

It seems highly
probable that William Jennings
Bryan's famous speech, "Cruci¬
power.

and

which

manner

a

in

man

one

destruction,

of

for

get less money when they
conscious of a need for more

buying

the hidden forces of economic law
on

on

t

may

purposes;

is not

money

deemable

apparently reach little be¬
yond the desire for more and
more
of it. As an irredeemable
currency depreciates,
their com¬
mon demand is for more, not less,
of it. Suggestions of redeemability either bring no sympathetic
response
or outright
opposition,
possibly because they fear they
are

monetary

silver

money

and

country

Keynes as

ideas

public's

general

The

purchasing power in respect to
and services, domestic or
foreign, and in terms of other na¬
tions' non-gold currencies, is not
to be confused with any deprecia¬
tion of our non-gold currency in
terms of gold.
goods

posits.

1950

Thursday, February 16,

CHRONICLE

in

More¬
instrumen¬

governmentally-man-

government of the United

The

its

a

not

gate to

this instrumentality

at

disposal, and it has been em¬

ploying it as a basic means of
proceeding step by step on a
which points to a thorough¬

course

going

governmentally

-

managed

economy.

There
ment

as

instrufundamental,

is, apparently, no
potent, or as

an irredeem¬
government is
disposed to lead a people into So¬
cialism.
Conversely,
there
is

or

as

able

necessary,

currency

if

as

a

,

Volume

probably
than

effective device,
employed to arrest a

be

into

Socialism, than to
make the
people's currency re¬
deemable, thus restoring to them
the power to exercise

trol

direct

con¬

the government's use of

over

.their purse.
It

not

be

surprising,
therefore, that apparently all who
would

socialize

people

are

our

and

economy

opposed to the restor¬

redeemable currency in
the United States.
Either because

they

a

understand

between

ernments, by the

the

relationship

irredeemable

an

cur¬

Communist,
ments

employ

rencies
and

as

Fascist

and

irredeemable

managing

people,

the

cates

of

seem

invariably

advo¬

dictatorship

government

deemable

cur¬

of controlling

means

a

govern¬

defend

to

currencies

irre¬

the

with

ut¬

most

—

people in general.
(2)

Reserve

of

reserve

Federal

not

down

notes

the

But
and

only

these

holders

of

draw

can

the

in
de¬

reserves—more

compel

a

their

and

deposits who

curately,

25%

against

Reserve

posits.
notes

than

less

certificates

Federal

Reserve

required to maintain

are

gold

Our

—

Usable

and

ac¬

Reserve

tificates in gold and to pay out
gold—are central banks and gov¬

irredeemable

ernments.

the

same

socialization of our econ¬
omy, seem to have missed the re¬
lationship of an irredeemable cur¬
pose the

the

to

rency

processes

of

social¬

banks

to

redeem

cer¬

notes

and

Federal

deposits,

Reserve

all

holders,

other than central banks and gov¬

dictatorship are, apparently,
invariably advocates, also, of such
a currency.
The evidence seems

not

overwhelming that

serves

denied

the

The

right

reserves

to
are

usable

domestically.
They
provide a basis for the

merely

calculation

of

the

ratio

of

re¬

-to

irredeemable currency is, witting¬

deposits and Federal
Reserve notes, which ratio serves

ly

as

Socialism

of

or

dic¬

government

So

the

long

as

over

power

a

irredeemable cur¬
all efforts to stop a govern¬

provided by
rency,

ment

into

has
people, that is

an

disposed

Socialism

to

lead

tend

people

a

to, and prob¬

indicator

an

liability items
The

government

a

domestic

thus

serve

of

how

far

these

be expanded.

may

function

differs

the

of

from

deposits

its func¬

held

by

central

banks

and governments. The reserves in

the

Federal

Reserve

banks,
exceptions
in

ably will, prove futile. The people
of the United States have observed

United States

all sorts of efforts, organized

fore

minor

for the

and

Treasury,
of

use

are

there¬
banks

governments, but not for

domestic

and

The latter must be statisfied

of socialization.

It

institutions

should be amply clear by this time
that none of these efforts has suc¬

the

ceeded.

no

ury

and

for supposing that
any
of them, except the resto¬
ration of redeemability, can suc¬
ceed in arresting our march into

and

minor coin.

good

is

there

Moreover,

reason

Socialism.

A government possess¬

it

the

policy

or

tendency

Federal government

of

our

it does ig¬
such groups and individuals.

nore

—

majority

of
the people
of the United States the suffering
If, therefore,
Congress would
disasters

and

the

spare

inherent

in

Social¬

ism, that majority must face the
the first and

that

fact
and

necessary,

possibly the only,

of
doing this lies in the restoration
of redeemability in our currency.
means

Character-

'

istics of Our Currency System

(1)

Redeemability

for

Central

Banks and Governments—Central
banks

and

governments may

sell

with

over-valued

silver

An

arises

important
question
that
why central banks and

is

governments have the privilege
of redeemability at the statutory
rate of $35 per fine ounce while
this

right is denied other holders

of dollars. The ruling principle is,
of course, that only

demands

of

the rights and

governments

central banks, the latter
controlled

ments, need

by
be

current

and

of

generally
govern¬

recognized. Gov¬




the
cur¬

rencies
and

most

were

private

was

tively free to

pursue

pered

Irredeemable

course.

rencies

impede

the

flow

cur¬

rencies, goods, services, and

per¬

and

national

bring into being

ber

of

boundaries

great

a

government

num¬

restrictions

and

three

funds

changes. A

market.

irredeem¬

today

from the

the

at

of

use

"one

is

Although

the

outlook

latter

inter¬

gold bullion standard is
much superior in various
ways to
the
more

thorough-going

most

currencies

other

countries,

restrictions in

port

and

held

respect

the

by

the

in

government
in

These

of

exchange

FRANCISCO,
CALIF.—
Neil, Jr., and Wellington A.
Wood are now with Conrad, Bruce
& Co., Russ Building.

ses¬

simul¬
to

With

the

for

E.

session will consist of three simul¬

with

taneous

Stewart, Scanlon

(Special to The Financial Chkonicle)

banking, the automo¬
bile industry and the chemical
industry.
The second afternoon

SAN

FRANCISCO,

White

has

treating of the
San
buying power, the
for the building industry and for change.
for

associated

Stewart, Scanlon & Co., 213
Montgomery S.treet, members of

forums

outlook

CAL.—Guy

become

farm

Francisco

Stock

Ex¬

ex¬

of

hands

its

Chicago & North Western

of

institu¬

international

important part

an

government

placing
interna¬

our

the

banks

restric¬

of

and

the field

finance. This is
of

three

relative

management of

a

nation's people and
economy. It is
totalitarianism
at
the
interna¬

The

incipient bull market in railroad stocks has petered out
in the past few weeks, although there have been some isolated
instances of individual strength.
Probably the continued labor
disturbances

in

bituminous

the

coal

fields,

and

the

cumulative

adverse influence of dwindling coal supplies on the general econ¬

have been the major

internal economy of our
country
in many and often subtle and far-

for the lessening of speculative
The cut in the Southern Railway divi¬
dend rate probably also had at least some influence on public
psychology. Further hesitancy is being caused by uncertainty as
to whejt action might be taken
by directors of jiiree of the coal
roads (Chesapeake & Ohio, Delaware & Hudson and Virginian)

reaching

at their

tional

boundary

line;

and,

from

that point of vantage, government
control is reflected back into the

ways.

omy,

production,
prosperity—national

trade,
and

and

reasons

enthusiasm for this group.

February meetings.

The

loss of coal

international—is
in

not

to

be

irredeemable currencies

tonnage has been

a

severe

blow to many of

the railroads.

cated

rates

from

management,

foster

free

various

terms

of

black

or

kets.

This

for

as,

other

or

in

can

instance,

non-official

situation

dual

course,

of. discount

gold where gold

purchased,

in

mar¬

means,

multiple

be

again, of the discrimina¬
tion against the individual and in
central

ernments.

of

It

is

banks

and

another

cur¬

confining them¬
regulations,
distinct

to

designed

fair

and

to

competition

and to prevent fraud and national

injury.

of

dence,

of

selves

| EDITOR'S

quota¬

tions for the dollar. And it is evi¬

favor

management of international

gov¬

instance

is

the

in

first

which

Spahr's
ment

NOTE:

of

are

appear

above

installments

presenting

The

paper.

will

The

three

we

install¬

next

in

Dr.

the ('Chron-

icle" of Feb. 23.]

management
of
people with the disadvantages

(4)

upon

them.

Control

of
Foreign
Central Banks

changes by
and
Governments—Since gold imports
and exports, legally made, are un¬
der

the

control

of

banks

Federal

our

and

other

Treasury,

government-

institutions

exchanges of goods, to
investments, and to travel, and
subjects the ingenuity of private
enterprise to the crippling im¬
pedimenta of government regula¬
tion.

Moreover, such controls

reflected
ternal

backward

economy

in

into

a

the

F. I. du Pont to

are

in¬

multitude of

by the headlines.
blessing in disguise.

Absorb Bacon Co.
Francis

FRANCISCO,
I.

du

Pont

CALIF.—

&

Co.,

bers of the New York

change, will take
ness

of

gomery

Bacon

&

Street,

Mr. William R.

membership
and

San

Co.,

256

about
the

Los

Mont¬
1st.

a

&

Pont

in

Angeles

Stock

Francis

headquarters

Ex¬

busi¬

March

Francisco

du

the

over

changes, will become
I.

mem¬

Stock

Bacon, who holds

on

some cases, of course, railroad operations are not affected
by the Commission's orders, thanks to the installation of large
fleets in recent years. The sharpest cutback in service has
been in the passenger end and there only in the case of coal-fired,
steam engines. Even those railroads that have stuck the most per¬
sistently to coal locomotives have, for the most part, dieselized

diesel

their

Ex¬

partner in

the

Co.

with

new

San

ture that the mind of

the

sequence,

government

con¬

control,

Admit Weinburg
way,

as

to

Partner

&

Co., 39 Broad¬
New York City, members of

New

York

service,

then,

happy for the chance to abandon at least part of the unprofit¬
business, even though the relief may prove only temporary.
Surprisingly, at least to most railroad analysts, one of the
best acting of the speculative rails in recent desultory markets has
been Chicago & North Western common, which has recovered to
fraction

a

of its former
1949-1950 high.
A couple of
directors decided that results for 1949 did not warrant

months ago

dividend on even the preferred stock.
Still the junior
equity has been acting marketwise better than many established
dividend
&

payers

St. Paul

the

of

a

and

common

materially better than Chicago, Milwaukee

where directors have at least declared

prescribed preferred

Stock

Exchange,
will admit Jerome S. Weinburg
to partnership on March 1st.

a

part

dividend.

Chicago & North Western has for a long period of years been
one
of the most expensive railroads in the
country to operate.
Last year it was additionally burdened b,y the
heavy costs incident
to

winter weather. The storms also had
during the/early part of the year.
result, the pre-tax margin of profit dipped to 1.2% in 1949
compared with 7.1% in the preceding year. The 1948 showing had
itself been well below the industry average. The margin of profit
is the percent of gross carried to net
operating income before
a

unprecedentedly

serious

As

influence

severe

on

traffic

a

For

1949

the

company

balance of $7,380 of

Coe

of

too

that

a

Curtailment

funds, of $1,133,684. After sinking funds there

Jacques Coe & Co.

follow the transactions. As

business.

I. du Pont & Co.

When the ingenuity of private
enterprise is given opportunity to
function, exchanges of goods and
services, among people of various
nations, become so complex in na¬
cannot

passenger

Federal income taxes.

ways.

man

through

largely applies to local and branch line business. This is where the
big losses are normally sustained. Railroad management is only

Francisco office. Robert M. Bacon,
a
partner in Bacon & Co., will
be resident manager for Francis

Jacques

a

at all

payment of

SAN

In many instances it will actually be

In

within

Ex¬

presumably been the wide publicity given in the

press

able

government

the

factor has

a

even

Federal

Also,

reported

by

a

income,
was

before

only

a

sinking
nominal

It is notable

this nominal net income

earnings

credit

of

bolstered

was made possible only through
$713,000, all taken in December.

increase in nonoperating
million dollars, represented
rise of roundly $1 million in dividend income and a decline
were

by

income of something more than half
of

net

earnings available for the stocks.

income tax

an
a

approximately $500,000 in interest received. This hardly

appears

valid background for the speculative enthusiasm that has
developed toward the stock, except on the theory that things have
as

a

been

so

bad

they

can

at

A. Q.

in

the

to

effect

management

tions

pomprise
forums

elected

(Special to The Financial Chronicle)

stock

first afternoon

New officers of

will be

contains

all except central

have

tional
our

Federation

SAN

luncheon
the

Los

import

governments.

tions

it

with

of

of
gold 'and
irredeemable the dollars

makes

and

irre¬

found

The

deal

The

will

idea

national

deemable

sion

banks.

Association

Conrad, Bruce Adds Two

con¬

management of trust

will

taneous

with vigor.

restricted

our

by

forum

trend

world"

time that

very

is being advocated

a

the

simultaneous forums

ties and the

Philadelphia, Analysts
Detroit, Investment Sta¬

the annual business meeting which
will precede the luncheon forum.

relating to railroads, public utili¬

controls, all of which are im¬
pedimenta in international
ex¬
consequence of the al¬

meetings will

of

tisticians

meetings,
a
luncheon
meeting, afternoon meetings and
a dinner
meeting.
The morning

of

Club

of San Francisco.

morning

sist of

ysts

Angeles and the Security Analysts

Penn¬

sylvania) Hotel in New York City.

cur¬

across

(formerly

The all-day sessions will comprise

of

sons

Statler

used

unham¬

an

the

at

rela¬

widely

ingenuity

nancial Analysts Societies will be
held on Thursday, March 2, 1950,

rencies and freedom of
exchanges

reaches to

privilege.

when

of
Fi¬

with governments

a

United States Treasury as author¬

this

world"

of

tendency is
currency to exchange

The

currency.

such

automatically gain control of all
legally-conducted transactions in
foreign exchange. Such control

have

"one

gold standard and redeemable

Federation

able

fine ounce of gold (ig¬
handling charges), under
conditions
prescribed
by
the

general

of

con¬

annual convention

National

to cuts in rail service ordered by the I.C.C. to conserve coaL
Actually this is not nearly so serious a problem as would be indi¬

noring

in

closest to the

came

The

ket

of

not

vices and

ser¬

Society of Security Analysts,
Inc., Investment Analysts Club of
Chicago,
The
Boston
Security
Analysts Society, Financial Anal¬

exchanges but in redeemable

or-dominated

do

exchanges of goods and

The third

con¬

eration which comprises The New

discussed.

probably
reached
the
degree
of
freedom
in

annual

York

be

to

the

and

owned

dollars

in

industries

to

countries do not have the right of

gold bullion, at the statutory rate

by the Gold Reserve Act of
Other
foreign holders of

world

individual

and

redemption at $35 per fine ounce,
such holders possess an irredeem¬

and

1934.

and

the

in

convene

will

vention are being sent to
approxi¬
mately 2,000 members of the Fed¬

New York March 2. Stock market

on.

of

to

fields

forums

found

these

ized

nations

National Federation of Financial

Analysts Societies

various

several

and government interference with

Reserve

per

in¬

the

the dinner meeting.

Invitations

The road to greater

gold to the United States for dol¬
lars, or redeem their dollars in

$35

and

travel,

industry. Prominent

in

governments, of dollars in foreign

falling
The International

<B)

The

so

address

were

desires

trade,

vestment, and

their

their

in

authorities

Analysts to Meet

of

individuals

pursue

the petroleum

Nation's Financial

stand¬

23

Curtailment of steel operations and closing of other
plants because of fuel shortages has not been so important from a
tonnage standpoint but the influence has been more widespread
throughout the industry. Psychologically a more important mar¬

at

be

to

with

part

a

restricted

(727)

Depreciation of the Dollar
in Foreign Markets—Since hold¬
ers, other than central banks and

Socialism—which

appears

our

people.

(3)

for

given

powers

and

irredeemable promises of the
Federal Reserve banks and Treas¬

by an
ignore
pleas and protests of such
groups and individuals. And, if it
be disposed to lead a people into
the

ing

irredeemable currency can

the

and
the

central

individual, to bring pressure upon
Congress to end its spending orgy
processes

re¬

tions in respect to that portion of
the
Federal
Reserve
notes
and

with

and

to

advantages

ernments, of claims against these

ment

tatorship in some form.

free

if

away

all

them.

advocate of

place

held

exercise

an

one

take

currencies

fact that the advocates of govern¬

unwittingly,

and

able

against

as

a

bullion

effect

universal

are

or

the

most

reserves

defender of

gold

gold

Although the reserves
in gold certificates are ostensibly

ization and the significance of the

a

their

exercised

CHRONICLE

crippling
distorting the exchanges that
might properly suppose would

cept

Ratios

vigor. Those who, for a va¬
riety of reasons apparently satis¬
factory to themselves, defend an
currency, while at
time professing to op¬

has

greatest

privileges unac¬
companied by recognition of cor¬
responding responsibilties to the

banks

Socialist,

ard,

FINANCIAL

employment of

general

a

that

as

our

&

international

governments

Reserves

that

such
of

discount, or
at risk of discount, in term? of
gold. The rights of people give
way
to privileges exercised by

they

note

its irredeemable

except at

currency

ization of the economy, or because

simply

of irredeem¬

use

currencies, can control their
own people; but they cannot con¬
trol other governments. The lat¬
ter, consequently, must be paid in
a money
of universal acceptabil¬
ity; one government cannot force

the processes of social¬

rency and

COMMERCIAL

able

another to accept

should

ation of

THE

Number 4882

no more

can

march

171

,

hardly get

worse.

t

24

COMMERCIAL

THE

(728)

Continued

from first

page

the

and

61.2%

segments

of

June and July,

quite unscathed.

1949,

of the
By the end of August

marked

recession.
of

most

of

economy

our

bottom

the

business

activity

turned

had

upward.
The
sion

halted to

was

the

from

recovery

strike

some

of

reces¬

degree by

last

Fall, and
the disturbance in the coal indus¬
steel

the

which has varied between a
strike
and
a
"two-day-a-

try,
full

of

and

strike

week"

full

a

the threat

now

strike

These

again.

strikes have distorted our picture
of the

The steel strike

economy.

ended before a serious dislo¬

was

cation

of

could

industry

take

place, but some of the effects of
the strike are still being felt. Most
of

economic

the

have

indicators

resumed their rise from last Sum¬

but at least

mer's lows,

part of

a

this rise is the result of industries

making

time .lost

for

up

during

the strikes.
A look at

of

ments

give
we

the

will help
perspective of

economy

proper

a

us

where

of the k;ey .seg¬

some

are

we

bot¬
After
decline of 17%, recovery be¬
of

tom

this

and by September overall
production had risen to 174. Re¬
covery
was
interrupted by the
steel
and
coal
strikes,
and in
gan,

postwar

last months

accumulated

rapidly

than

ucts

could

for

a

of the

inventories

boom,

prod¬

This

called

sold.

more

readjustment,
and
the
inventories which re¬

change

in

sulted,
was
probably the
prominent feature of the
sion.

Inventories

reduced

during

Summer.

were

the

most

this decline

an

a

statistics of manufacturers'

orders have

frequently been
relatively reliable guide to fu¬

ture

business

partment

activity.

cently developed
statistics
•

^

-on

a

new

De¬

has

re¬

new

series of

and

unfilled

orders, which should
a

The

Commerce

of

handy tool for business
These new figures show

that

far

as

back

July,

as

coal

1948,

in

im¬

confirmed

by the topping-off of business in
general which began the reces¬
sion

late

the

year.

and

September,

1949,

a

in

of

surge

In August
there

orders.

new

was

These

orders
were
in large
part res¬
ponsible for the pick-up in busi¬

activity

ness

that

average

civilian

about

of 1949,

force

included

than
month of 1948. As

the average

production was curtailed during
the recession, unemployment rose,
persons,

labor

of

a

peak

or

61/2%

reaching

the rising trend
was

of unemployment
This was partly a

reversed.

normal

ment had been

somewhat

ensued.

under

These

of

labor

the

with 3%

below

force,

be

One

overestimated.

of the

influences

by

Income

strongest sustaining

in

the

has
been the stability of personal in¬
come.

The

point

of

total

income,

personal

justed

high

economy

seasonally
annual
rates,

at

reached in

December, 1948.

ad¬
was

That

the

commonly

economy

absorb

to

is

force

labor

ability

The

of

$209.7

billion.

even

impressive when it is noted
that total nonagricultural income

in

November, 1949,

the

same

level

as

was

at

at almost

the

about

11%.

in the aggregate,
Food

1

level only one-half of 1% below
the peak levels.
In other words,


http://fraser.stlouisfed.org/
>■ j
Federal Reserve Bank of St. Louis

prices,
prac¬

stable since last August.
prices at wholesale have

dropped gradually since last

sum¬

farm prices have dropped
considerably since last fall; and
all other commodity prices have
been stable, in the aggregate. But

mer;

there

have

been

recent

increases

in the wholesale prices of a num¬

of

ber

industrial

commodities,
the

recovery

increases,

in

such

products as steel, lumber,
rayon, raw wool, tires and nonferrous
metals, may well bring
about an increase in the aggregate
price

level

commodities

on

at

Retail prices

the

non-agricultural
wholesale.

The
(cost

September,

then began to

in December,
be

of

decline slowly, and
1949, stood at 168.6,

only 3% lower.
can

1948,

1935-39 average. It

No definite trenc

discovered

at

present.

The recession

Industry
came

late for the

industry, which operated at
above theoretical capacity

throughout February and March,
1949.
In April a decline began,

good

indicator
been

future

of

running

in recent

by

the

will

effects

of

be felt for

the

steel

time.

some

Consumers'

Durable

The

continued

the

of

home

the

which

had

hand,

fected.

But

naturally
steel.

the

unable

During
were

their

stocks.

the

for

forced

to

weeks

until

their pro¬

af¬
shutdown

strike
to

Several

companies,

to

replenish

automobile

down

were

for

several

they could accumu¬
late enough steel to keep their
production lines going. Not until
the second week of

January

were

all
automobile
companies
operating simultaneously.

What

this

goods will

be

of

trial

in

restricted

the

statistics

is

durable

some

for

sev¬

months, and this will be

flected

of

re¬

indus¬

production and employment.

The

distortion

steel

strike

caused

will

factor for those

the

of course,

means,

production

again

future,

have

by

trying to

for

the

for

in
of

into

see

strike

steel-using

turn

the

confusing

a

cumulative effect

a

will

be

will

Reduced

shortages of
goods they manu¬

the

We

have

review

of

facture.

the

on

take

of

The

who

you

this

at

in¬

affects

gathered

are

Convention.

automobile

production

one

the

at

directly

first

ond,

by

much

after

record

other througout

an¬

In

spite of

the steel strike and model

change-

for

overs

1949

1949.

some

manufacturers,

production

trucks

16%

was

of

and

cars

higher than

the

previous record set in 1929. About

6,249,000

and

cars

manufactured

5,282,000
in

1929.

1949

ger

in

in 1948,
5,119,000,

output
is

the

of the steel
neck

of

in

of

customer

The break¬

the

1949

passen¬

The automobile

biggest

industry.

pace

makers

were

82%, of the

or

consisted

automobiles.

industry

trucks

1949,
against
and 5,358,000

automobile

was

one

of

the

strongest supports to the economy,
and

future

developments
watching.

careful

will

The

basic

construction

the

of

every
new

indus¬

almost

month in .1949 the value of

higher than in the corresponding
of

this

sisted

new

of

activity.

tember,

1948.

A

large portion

construction

con¬

public
For

1948,

construction

ex¬

and of shorter duration.
The steel strike, and the continu¬
crisis in the coal industry,
the recovery from the
recession.
But at the same time,
ing

(government)
example, in Sep¬

25%

of total

(by

value)

new
was

government work, while in Sep¬
tember
1949
(the peak month)

the
the

The Federal

has

now

sorbed

a

of

economy.

influence

owing

to

the

its

income

of

the

which

was

recession
for

reason

income

lost

likely

operations, ab¬
large share of the decline

total

of

effect

is

government which

economy,

size

great

the

effect,

real

rise

tremendous

a

the

On

only

market

on

of

parts

indirect

this

1949.

absorption

that

was

one

of

tax

rev¬

farm

declined with corporate and
incomes because tax rates

were

not

enues

changed.

ing influence
overall

consumption

remain at such

the

of

This stabiliz¬

was one

able to

high levels in spite

recession.

ernment

why

reason

was

does

What

in

the

the

gov¬

fiscal

field

is of great

importance in presenteconomic analysis, and this

day

fact must

be

analyzing
With

in

deficit

store
to

that

the

will

the

when

prospects.

nation

for

some

undeniable
government's influence
it

come,

be

mind

financing seemingly

for

time

kept in

business

either

is

of

one

support or

of

inflationary tendencies in the
coming year, depending on one's
viewpoint.
The

veterans'

life

insurance

refund of $2.8

billion will be paid
out in
1950.
This huge sum of
money, put in the veterans' pock¬
ets
will
be a
strong sustaining
factor
for
consumer
purchases.
Most of this money will be dis¬
in

pansionary
economy,

of

the

distinctly

ex¬

half

first

the

It will have

year.

a

effect on the whole
it will enlarge bank
and
consumption
in¬

as

deposits,

will be fostered even if a

creases

the payments are

large share of

put into savings. And much of the

will

money

into

go

down

pay¬

ments

delayed

caused the development of
new
backlogs of unfilled orders.
These orders will be a business
they

1950

with almost
in the usual
first-of-the-year predic¬

of

rash

greeted

was

universal

optimism

optimism

this

True,

This

businessmen.

with

was

fash¬

cautious sort now in

the

optimism, and the attendant cau¬
tion, are in themselves favorable
business
factors.
Optimism,
as
it is tempered by prudent

as

economic

action, breeds a healthy

environment,

in

But

dictions,

there

was

worry:

the

of

sign

almost
June

this

1950.- It

definite
predictions
a

economic

that
an¬

out on a long limb
sign that the analysts
at last aware of the unhappy

are

a

good

the

tinge

of

half

first

the

the

1950

off

a

to

cause

of the strike.

they
also

Federal

been

cut.

of the

to return

The

level

which has

never

indicator

of

this

of

than

year

1949, but it should be noted
that early 1949 production was
lower
than
production
in
the
in

half

second

year.

also

are

/

The

shifting

emphasis

their

of

some

the

of

manufacturers

the

to

priced lines in an effort to
maintain or better their positions
lower

in

has

what

again

become .a

but

many

primarily

of

these

cuts

reflect

the absence of special
formerly included in
prices.

All

in

should be a very good
year for the automobile industry,
if not quite as good as 1949.
all,

1950

Farm
mark.

income
The

is

trend

a

big question

of

most

farm

but

these

was

to

prices

backlog

of

prices are cushioned by farm price
supports.
Nevertheless, the sup¬

that

earlier be¬

is

op¬

financial
very

condi¬

strong,

and consumer demand is at a very

high

higher output in the

a

months

dealer-delivered

And the con¬

public is

anything like prewar
makers have

to

Automobile

ratios.

the

government

The

a

the

erating at a deficit and goverhment expenditures have not yet
tion

before the war. The
proportion of old cars is
favorable factor, if we are

were

large

of

tinuing high level of demand for
steel itself was greatly swelled.
The

are lower in relation
weekly earnings than

cars,

average

with

goods

could not be produced

an

priced

accessories

strike

with

are

very

price reductions have been posted,

news

durable

for

prices

high levels, these prices,
at least for the three leading lowat

in the notthere may
reluctance

year

steel

automobile

Although

predict good
of

a

highly competitive business. Some

a

pessimism that always surrounds
the unknown in a time of change.

effect

are

number

other

hand, there are
of somber possibilities
too-distant future, and
have been
a
general

the

On

forecasting.

of

record

to

with

be

there

But

interesting specula¬
tions to be made on this subject.
of

early

pre¬

go

merely

1949.

of

record

scheduled

may

of

hesitancy

not

economy

abruptly

ended

all

30,

alysts to
is

even

industry—your

again—will
probably
repeat
its
unprecedented

the

the

and

benefits.

automobile

The

industry

number

months.

several

for

stimulant

that it is easy
business for the
first six months of this year. One

construction put in place was

month

been

had

than

pected,

start

In

re-stocking boom

postwar

milder

was

is

stock

have

tributed

Going?

present, the economy seems
to be in a strong position.
The
recession which marked the end

orders

1949.

life.

The plain fact is

has been surprising the ex¬
all through 1949. Most of
this industry never went through
in

some
very
influences bearing

At

perts

recession

considering

national

try

a

answer

Where Are We

to

Construction

to

Let

going?

we

are

to

broader

our

on

long

industry broke

bearing

that ques¬
by taking a quick look
at certain specific facts and, sec¬
attempt

tion

ion

look

a

this

ourselves

,

events

today.

Where

tions.

which

given

question of where we are

Now

of

we

with demand.

up

recent

businesswise

us

industries

cause

keep

Rugs, furniture and other house¬
equipment are also in great

of

steel

example,

shut

of

shortage

a

unable

users

came

ample stocks

long

victims of

their recovery

While

seriously

created

These

strike

users

and

not

was

trades.

be

demand.

on

appliance and

early

were

re¬

Electrical appliances,
seemed
early in 1949 to

and

generally

of

sharp.

hold

steel

level

marked

a

recession,/but

stop in October, steel

duction

for

home

furnishing

of

other

high

personal incomd payments ancl
the great number of new homes

over-abundant, are in some
cases in short supply at present,
as manufacturers find themselves

ingots

the

other

this

however,

result

Goods

to

over

The

almost to

steel

levels

1948

spill

economy;

in

production
a

activity, have

above

value.

was

capacity.
Obviously,
this is an artificially high rate of
output,
attributable
quite
sub¬
stantially to the shutdown.
The

a

months, in terms of total

of

of
Steel

Con¬

are

which

awards,

97.2%

bear

consumers'
price
index
of
living)
reached
its postwar peak in
and

and

up,

in

are

economy.

of the

After the

large amount of

a

make

generally one
of the most stable components of

steel

a

These

have been

areas.

tract

January, 1950,
production had been scheduled at

each

1948

considerably in most

industries

here

rates

to

to

dustry

of

peak

were

week

to the

the

being built,
generally of smaller

size, and the market for the more
expensive homes was depressed

second

present, wholesale prices of all
commodities
together have de¬

From

unions.

to

came

Automobiles

peak of

declined

work

Now

cultural

had

rising
big

gradu¬

rose

While

1948.

were

the

the

Prices

December, 1948, and that in Octo¬
ber, 1949, at the height of the
steel and coal strikes,
nonagri¬
income

the

they

of

excess

homes

companies had

question marks for 1950.

174.5%

more

of

the
of

one

production

in

more

vival

some

force).

Company

mild

a

have accounted

labor

August

level

1949,
This is

accepted

The

After

settlement of the strike, the steel

output

above

November,

This

for

with

other companies

terms with the

"high employment" figure of 21/2
million unemployed
(4% of the

figure of $217 billion is only 3%%
the

compared

as

in December, 1948.

These

should

as

eral

with

of

and

ally

stood at only 2 lk % of
the civilian labor force, an abnor¬

movement.

power

ber,

that

mally low proportion. At the end
of 1949, unemployment was equal
to 3V2
million persons, or 5%%

Steel

settlement

a

conditions, but which has always

accounted

ernments

union in the first week in Novem¬

1948, near the
peak of the postwar boom, unem¬
ployment

operations
of 8.2%

ending October 8.

reached

of the labor

6%

In October,

force.

concurrent

Personal

influ¬

seasonal

statistics will bear careful watch¬

means

rhillion

4.1

of the civilian
July. In August

in

force,

ing,
although
their
foretelling the future
no

persons

more

and

figure

a

Bethlehem

of

month

labor

663,000

tically

prediction

week

steel

Employment
the

to

fabricators

impossible at this point.

cumulated.

was

predictions

weeks

During the
few scattered mills

a

open,

declined
the

the

of capacity.

only

remained

a

make

industry

clined

plicit in this fact

as

preliminary
estimate places December output
at 176.
The uncertainties in the

incoming orders of manufacturers
began to drop, as inventories ac¬
The

pro¬

began
to
the steel strike

and

to be

prove

analysts.

very

steel

and

index

soon

as

settled,

was

is

sales have risen.

The

The

duction.
climb

coal

but in October unemploy¬
cut to 3V2 million,

brought about increased purchas¬
ing by business, and inventories
have
been
rising to somewhat
higher levels.
Meanwhile, busi¬

new

than

index

ences,

and

Summer, the continued
level
of
final
demand

ness

of the

steadily

Spring

late

high

recession

from

levels of other components

of

almost steady rate, and excess in¬
ventories were worked off. Then
in

attributed to the

was

rise

continued

index
of

mildness

The

result

maintained at

were

production

166.

at

reces¬

During this time, busi¬

sales

ness

were

by
business
the finished

be

the

October
stood

the

Sales, Inventories and New Orders

1949.

July,

in

161

strike

in

but

say,

86%

near

the recession slide down to a

In

During the

Production

production
reached a postwar peak of 195%
of the 1935-39 average in October
and November, 1948.
Then came

going.

are

by the an¬
it is impos¬

immediately proceeding the strike
ingots were produced at levels

Industrial

gov¬

far

is

primarily the result of lower farm

Total industrial

federal, state and local

caused

of strikes

to

a

was

figure

income.

and of where

now,

was

ticipation

(This
the

at

sible

indicators

statistical

the

recovery

is

decline in personal income

the

the

low.)
Then a re¬
How much of this

when

scheduled

so

began.

covery

July,

capacity.
week,

exaggeratedly

Going Businesswise?

in

Thursday, February 16, 1950

for
30%. been considered, and wrongly, as
slump in the early such, is striding forward in an
part
of
1949,
home
building, effort to make up for its false
staged a sharp recovery.
New steps of
the
past three
years.
nonfarm
dwelling units started Some of the optimism centering
in tha, Jatter:' part of 1949 were
on
the stock
market
may
well

in

were

of

holiday

touched

was

week

operations

Where Are We

large

bottom

second

the

CHRONICLE

FINANCIAL

&

stock

market,

been reliable

future

as

economic

is

downward,

port prices do not make the
lic

pub¬

and Sur¬
pluses are accumulating at a high
rate.
The government is now ex¬
ercising acreage restrictions oh
wheat and cotton, and will also
restrict corn production.
In other
commodities, where output is nbt
controlled, support prices, unddr
the new law, will be lower. MoSt
agricultural experts foresee a dro'p
of about 10% in cash farm income
in

buy

farm

products,

1950, from the level of last year.

Volume 171

Number 4882

THE

COMMERCIAL

The farmers are in a
strong and I Certainly not because of the brief
relatively liquid financial position, address by the Secretary of
j
State,
But
the
fact
remains
that the
George Marshall, on June 5 of
farmer"s buying power will con¬ that
year.
Actually the enuncia¬
tinue to decline this
year.

Corporate

highest

profits

level

in

history in

The recession of

reduced.

third

at

were

1949

the

brought

about

the

Plan

at

that

so-called
date

But

then

ochal

an

week

a

statement

after

improvement. Third quarter, 1949,

tragedies

profits after taxes

Representatives of

by

estimated

were

the

of

all

second

new

quarter profits.

lower

tions met in Paris to

But they
third

than

quarter 1948 profits. In 1950 there
be

can

little

hope

of

thing of

the
and

profits

other

approaching the extraor¬
dinary results of 1948; inventory
profits are largely a thing of the

the
and

his

past

But

this

and

the

rate

of

production is lower.
Wage
have risen and other costs
not

fallen

For

industrial

substantially.

three

sessions.

Then

not

was

have

ter

declaration

of

Russia has much to

1950 does not

sharp

a

less

trend

the

past

have

what

the

have

Tragic

had

was;

for retaining prof its to
postwar expansion pro¬
The investor has gotten a

have

grams.

bigger piece of

the

second

the

final

quarter

of

quarter,,

1949.

the

In

estimate

have

largely

to

expect

the

a

This

estimate

new

is

of

out

plant
expenditures
in

equipment

first quarter of

new

and
the

ter.

last year's first quar¬
the other
hand, govern¬

On

ment

construction

of

as

sued

those

pand

sufficiently to make

for

up

the decline in industrial construc¬

tion.

Prospects for the steel industry
be gauged in
considering the

outlook

for

the

steel.

consume

able

that

industries
Since

facture

of

lower

farm

next

that steel

curity

and

industries will

it

year,

is

likely

during most
Thus, although the rate
output may
be well-

1949.

steel

sustained for at least the first
part
of 1950, as a result of the
strike,
the
results for the whole
year

may

be considerably

The
will

statistics

bear

careful

Our

year.

of

lower.
employment

watching

population

is

this

rising,

and if industry does not
expand
sufficiently to absorb the new en¬

trants

into

the

labor

force, we
unemployment

will
develop
an
problem of considerable
tude. We

are

magni¬

not

now
producing at
high enough to sustain what
commonly
considered
to
be
high
employment.
The
winter

rates

is

months
as

are

seasonally low as far
employment is concerned, but

employment will
during the year if
a

healthy

and

have
we

to

are

rise

to have

prosperous

econ¬

omy.

All

all,

an

analysis of these

various factors would not

present

reasons

concern

mediate
cerned.

as

far

for
as

seem

too

Let

on

our

last

may

disturbing
is

the

fairly

business outlook
In

fact,

is

us

look

broader

future.

next

con¬

emerged

we

at

im¬

some

influences

scars.

very

bearing

rise

sense

The fear of

(1)

War

and

fall;

face
optimism

we

may

last for decades.
that

mqst

assume

is not inevitable

war

must

We

also

may

but

that there

assume

we

that

there is little prospect of
genuine

in

scale

ity

the

for

necessary

secur¬

to

years

come."

These

chosen

not

are

words of

the

carelessly

sobsister

a

com¬

mentator.

We

Americans

posed

with

find

the

ourselves

difficult

very

created

shortages

dom.

No

had.

This

with

all

little

glib

answer

CED

policy

its

careful

than

more

of

nues

which
So

is

to

be

statement

thought does

to

suggest

ave¬

thought and action down

we
as

may

find

some answers.

stand

we

at

this

mid-

its feet.

on

is

Recently two British firms bid¬
ding for delivery of some heavy
electrical equipment for the
city
Seattle

lost

only

Their bids

below

bid.

the

The

Company

have

but

out

reasons.

substantially

were

nearest
Waltham

has

noted

for

closed

the

press

and
com¬

ments of certain spokesmen to the
,

effect that

our government should
have "protected us against
foreign

should

segments

of

great

very

fronting
curity

To

able but

being realistic

are

as

face up to some of the prob¬
lems with which foreign competi¬
tion confronts us we should also
we

realistic
and

tional

as

consider

we

other

accomplishments

of

postwar

our

relationships.
the

fact

shall Plan and

interna¬

Let

that

our

grow¬

in

the

Mar¬

other kinds of

Europe.

what

dead

did

we

certainty

lantic today.

Had

continent

plight

it

is

that

We

their

of

an

some

worthy

made in
eral

ends.

matter

no

desirable

must

good.

(3)

The start of tax reform re¬
vision should be made. This is not
to

great

say

extensive

be made at the

can

financial

and

other

that

start

a

on

the At¬

care

you

I do—the

whole

Europe in the

atmosphere

a

and

But

it is

should

can,

ar.d

providing incentives
important for healthy opera¬

so

tion of

our

economy.

(4) Business
and

executives

should devote

ly

large

increasing¬

an

of

part

can

time,
thought, energy and earnings
toward the promotion of business.
Here is a startling sets of facts:
in only one year from
1900
to
1930

less than 3-% of our na¬
income spent on advertis¬

was

tional

ing.

During the 1920's the figure

at

times

reached

Since 1930 not

almost

single

one

4%.

seen

an

3,%.

Actually this ratio dropped

expenditure

to

1949

is

low

as

1.6%.

as

2.2%

was

expected

high

as

to

and

be

slightly

So

con¬

pre¬

in

Europe

and free

institu¬

wise,

we

have this

great

one

shadowing fact of cold

over¬

with

war

Russia tending to distort any rea¬

sonably normal picture
try to paint.
We

would

be

the

to

up

future

we

did not face

realistically.

outlook

lems.

or

A

wishful

prob¬

our

"Times"

ran

the New York

thought provoking
editorial
entitled,, "Who's Win¬
ning?"
It was an objective at¬
tempt to analyze our victories and
a

defeats in the cold

it is true

liant
is

we

have

war.

won

While

some

bril¬

victories, notably in Europe,
equally true we have suf¬

the blackest of the century.

torial

fered

vital,

some

sickening defeats,

Asia.

quite

The

"Times"

properly

no¬

edi¬

reminds

us

from

the

our

important

an

economical

trade

both

economically
high from

are

our

great

increasingly
factor

national economic life.

in

So the

politically
already

and
very

Above

all, how do

the uncomfortable

cold

we

war

far toward carrying American

go

business steadily forward and will
go

far toward helping to keep the

such

easy

questions.

Let

help

to

bring

force

to

increase

miracle word—or

a

Productivity is
tion; it is production
man

hour.

There

tors

which

can

not
or

output per

various fac¬

are

increase

our

pro¬

ductivity:
greater
technological
knowledge; better technical skills;
better

to

briefly

satisfactory

(1) Adequate security against
potential aggressor must be

any

costs

possible

check

military

itself

money.

both

and

Every

within

by

remind

final

the

of

you

point

figure

the

civilians

I

may

truly

of the moral

power

great

and

spiritual
Steady adherence

values of life.

to principles and
practices in our
relationships with the rest of the
world
designed to produce an
increasingly high degree of mu¬
tual
confidence, friendship and

good will is bound in the long run
produce beneficial results. We

to

not

may

of

in the confusion

see now

how

events

we

evolve

may

a

satisfactory solution to the present
impasse

with

what

to

is

say

a

completely unreasonable and un¬
reasoning position on the part of
Russia. But the combination of
time and spiritual and moral
pow¬
er
is a tough one to
the
is

long

such

run

bound

to

whip.
In
combination

a

prevail.

Freedom

without

which

Americans would not

be

may

flower
tional

die.

considered
in

life.

as

a

garden

If

of

we

to live

care

delicate
our

na¬

it

will

neglected

Unless nourished it will fade
wither.
Unless cultivated it

and

will be
of

the

choked

out

various isms

by the weeds
the

or

selfishness

of pressure groups.

To

change the figure, freedom

is something that is

bought

never

outright.

It is purchased on the
installment plan, generation
by

generation.

We

need

selves

of

must

and

the

buy
to

ever

present

install¬

our

remind

our¬

especially in the light

of present cold war
circumstances
that truly "eternal

point with pride

backward
the

accomplishments of the past
well be dwarfed into rela¬

tive

insignificance

in

terms

of

of

factor

agement

these

of

are

is

none

better

relations.

so

we

move

steadily forward pooling

PASADENA,
A.

Kent

of. output per capita will be start¬

grove

ling if labor and management will

Street.

and

agree

practice

four

basic

is

purposes

common

ideas.

&

CALIF.—Charles
with

now

Co.,
He

234

Jones, Cos-

East

Colorado

wa s

formerly with
Arnold, Cassidy & Co. and Pear¬
son-Richards

principles:

common

by

(Special to The Financial Chronicle)

than

increase

for

With Jones, Cosgrove

a

labor-man¬

The

or

intangible values if as a team of
150 million of dynamic
Americans

important

more

measured both

potential, tangible

motivated

All

of

may

talents

perhaps

half

As it looks forward

and

few.

it looks

century.

better planned sales and distribu¬
tion programs; and better laborname

as

first

the

our

management relations—to1

the

over

health; better management;

(a) Belief by

both

manage¬
ment and labor in the superior¬

ity of
tem

our

over

free

enterprise
other.

&

Co.

any

portance

That
the

of

"take"

is

to

can

for

increase

whole

among

increased

pie

PASADENA,

all

of

produc¬

the

be

to

to

size

this

CALIF.—Richard
Jr., has joined the
& Co., 87 South

Redfield

Avenue.

With Wesley Hall Co.
(Special

result

by increased
that
is,
gre'ater

worker

of

Euclid

of

productivity,
output per man-machine-hour
the

Redfield,

us.

only

come

W.

staff

divided

This

us.

Joins Redfield Staff
(Special to The Financial Chronicle)

sys¬

(b) Belief by both in the im¬

means

to

The

Financial

Chronicle)

SAN

DIEGO, CALIF.—Richard
A. Maloney is now affiliated with
Wesley Hall & Co., First National
Building.

working better, not harder.

Joins A. G. Becker

(c) Both labor and manage¬
ment should realize the ultimate
facts,

not

economic

to win their arguments
in sincere collective
bargaining.
The good will and support of

public opinion
to

that

the

This

can

produc¬

value to all concerned by
using

answers:

had.

and

designed to
problems of today

may

work

economic

answer
me

sixth

a

program

American

productivity. This word "produc¬
tivity"
is
an
economist-coined

issue

six point program that

a

our

result, greater
will be had.

vigilence is the
price of liberty."
Free enterprise at the half cen¬
tury mark has much to which it

power

no

suggest
may

is

in

economy. Greater

will

all

economy strong.
^
(5) Every possible effort should
be made by all segments of our

American

meet

with Russia?

There

a

We

For

investment.

How are we going to solve all
these problems that face us.? How
do we solve our economic
prob¬

lems?

.

A few weeks ago

our

which

standpoint will be

dividends

considerably less

than American if

Pollyanish

might

we

area

a

to

(6) As
in

executed promotion programs will

of

of

benefits

ment.

way

development

national

our

same

preserva¬

and

of

productivity

planned, well

one

other¬

practice, great gains can
in
promoting the health

made

generation

Aggressive, well

each

and

for

above 2%.

increase

hold

may

businesswise

that

as

The

tivity. There is only

us,

has

year

to that of

management in

dispute.

belief in

be

their

tion

glimpse what the future
for

men

1o

must be made to keen the
dy¬
namic spark on our economic
sj stem alive by

the

almost

The

exigencies of

today won't permit.
say

revisions

moment.

tions may live and grow. We have
also made possible the

to

be

interest of the gen¬

our

and

of

Postpone¬

projects

or

the

ahead

where free

position

ex¬

or

25

By belief in the theory of these
points and the execution ol

unthink¬

century point, trying to evaluate
present

se¬

means

welfare

respective

how

not

we

despite the past costs and the
tinuing costs we have helped
serve

either is

lose

national

ment of

but

little Czechoslovakia.

as

choose

cannot

shall have either

place

the

Com¬

Russia

Imagine, if

to—I don't think

not

us

foreign aid have thwarted
munism

either labor

the
con¬

ercise of sober self-restraint. Va¬
rious pressure groups must

be.

we

ority of consideration

all

of

problems

to have both

ginning to be felt.

be

by

freedom. We must have

word. It is

facts

had

society

our

we

or

both.

be

grave

us.

whether

dumping of watches." Keen for¬
eign competition is only just be¬
While

the

assure

On the domestic front keen

figure for 1948

Communism would be

free¬

are

us.

at the

our

(2)

realization

upon

you

to

efficiency and

any

down

done

time insure

eco¬

up.

problem, how d(L,W.ejR£Qyide ade¬
quate security for ourselves and
same

picture

few

a

Devaluation is bound to put
competitive
pressure

overlook

business executives of America.

made

possible

increased

study,

and

are

Europe is back

ing out

leading economists

business

Foreign
competition
really just beginning.

(5)

be

greatest

as

(4)

They are the sober
words, after seventeen months of
of

the

(2) The frenzied period of pri¬
equipment expan¬
sion in the postwar period has
pFetty well run its course.

Large

for national

measures

seem

future.

near

notably

a
paralyzing
American in¬

vate plant and

technical

is

the

Here

largely filled

This

may

upon

Vi

of

war

too,

nomic facts of life:

of inse¬

alternating periods of
pessimism but the threat

tably in




genera¬

our lives for a
genera¬
The imminent threat of war

,The month of June, 1947 may
well go down in
history as one of
Why?

a

face

American

it

.

first

critical

a

everywhere.

war.'

troubles,
effect of

squarely.

Watch

to

serious

from the recession with few
much

insecurity, in

thinking will not solve
in

the

Doubtless,

great deal of prac¬

a

We should be realistic, too,

dominate

1950 will

was

On

financial

our

dustry.

tion.

prob¬

equipment,

production in

be lower than it

of

is

automobile

several other basic

of

it

that

output, in¬
construction, the manu¬

dustrial

be

A

'cold

recently is¬

on

1948.

strike

(3)

Economic

these words: "We live in

period which

peace

can

(CED)

Freedom.

world of

tion.

for

Security and Our Indi¬

page are
a

and

present to say whether
fields of activity will ex¬

and- must

"contain¬

satisfaction in observing our

coal

policy statement entitled:

a

vidual

It is not pos¬

high rate.

tical

politically

/

us

Committee

National

at

at

before

Development

will

very

life

late

industrial

might wish them to be.

we

highways,, etc., is on
home building may well continue
a

of

The

buildings,
the rise, and

sible

and

new

by the
countries."

capitalistic

derives

we

the

deal with them as facts, must deal
with conditions as they are not

1950, which is 15%

lower than

she

|

been

upon

its feet again, neverthe¬
have
these
unpleasant

on

we

facts

of

by

effect

A-Bomb.

Russia's

counts

in

us

actions

policies have

adverse

the

morale when recession struck

own

that

of peace;

cause

So¬

collapse
and
doubtless
derived
pleasure and a heightening ui her

peace

by

Russia's

socially

back

com¬

wave

borne

Russia

of action

course

as

her

as

their

cally,

their
postwar
expansion
plans (a notable exception is the
public utilities), and there is no
reason

hope,

world

should

encirclement

throttling

that

as

tragic

less

pleted

expansion.

the

the

efforts to get the world economi¬

was
22% lower than the actual
results of 1948's last quarter. Most

corporations

to

of

been to the

tragic
in

smaller pie.
Expenditures for new plant and
a

equipment by corporations began
running below the figures for the
corresponding
1948
quarters
in

did

and

hateful

fateful walkout.

in

need

finance

she

health

and

been

than

year

corporations

as

in

war."

before

of

owner

breaks

ment

another

answer

Russian

sympathetic partner in the

China

he

humanity, decency and
enlightened public
opinion
for

if

resumption of

Dividends

in

1948;

a

downward

economy.

higher

see

likely

A

out.

cold

morale of the

exclusive

Lippmann has called it, "Rus¬

sia's

the bar of

is

just

place Rus¬

has been given some good
boosts, too, in recent months. Ap¬
parently America is no longer the

It was, as Wal¬

theless,

reinvestments

abruptly

foreign aid only

viet

there.

walked

for

expenditures for defense up
high as 50% of her national

as

The

hope,

were

colleagues

be

porate

and

and

income.

to

days Molotov ./attended

Russian walkout.

an ample rate of profit to
applied to dividends and cor¬

to

na¬

Enthusiasm

Russians

costs

Never¬

sia's

high hope prevailed. Molotov

and

corporate

Plan.

us

(728)

economy.

Some estimates

come.

of this

use

promise

Marshall

defense

great

how

and

total about 9% of our national in¬

occurred.

see

settled

not

all the heavy burden of
military outlays and our ap¬
propriation to wage the cold war,
our
expenditures both for direct

ep¬

European

take hold of and make

20.3%

the

time

Securities and Exchange
Commission as 14.8% higher than
were

that

of

one

is

long struggle lies before

a

our

degree

a

issue

CHRONICLE

With

Marshall

gave

FINANCIAL

before it is.

hope to despairing millions in
Europe
impossible to
measure.

But the recovery in the

quarter

of

the

that

of

1948.

profits

saw

tion

that

&

side

of

use

economic

are

which

bound to go

emphasizes

economic

facts

of

the

public—the
—

Leonard

to

The

Financial

Chronicle)

FRANCISCO,
J.

Block

CALIF.—

has become

sociated with A. G. Becker &
465

California

Street.

He

as¬

Co.,
was

formerly with Stewart, Scanlon &
Co. and First California

Company.

King Merritt Co. Adds

power.

Both labor and manage¬
ment should recognize that the
interest

SAN

not

(d)

tional welfare

(Special

deserves

na¬

pri¬

(Special to The Financial Chronicle)

SAN

FRANCISCO,
CALIF.—
Bessenyey is with King
Merritt & Co., Inc., Russ Building.
Gabor De

26

Continued from first page

Changes in Common Stock Holdings

Trusts Continue

where

in

equities

new

No. of

Trusts

Shares

purchasing

by

8(2)

12,500'

Chrysler

3(1)

1.0,300

Doehler-Jarvis

4(1)

19,400

Electric

Auto-Lite

15,000

General

Motors

7(2)

their preferred
.stocks during the three months.
Actually there appears to have
been an increasing cooling off in
the bullish temperature during the
latter half of the year, although
had

of

disposed

this

is

One

of

has

indications

the

been

this period.

it

another

exceeded

Aviation

Eastern

Air

2

5,300

5

11,700

Grumman

None

4(2)

44,600

2(1)

5,100

None

2(1)

3,300

__

__

_

1
1

1(1)

7,900

5(1)

4,400

4

2(1)

500
None

______

_

_

Corp.-Seagrams

_

1(1)

40,400

3(1)

10,800

2(1)

2,000

Corp

—

8,000

7(1)

Panhandle

2(1)

74,900
1,100

2(1)

15,000

Texas

2(1)

24,000

Western

1

7,500

None
3

4,200

2

Co.

3(2)

14,500

Crane

5(3)

20,200
5,370

Flintkote

2,500

2(2)

Glidden

4(3)

Pur¬

2

chases of Common Stock Exceeded

3(1)

Sales, Last 9 Months of .1949

3rd
15
11

4th
10

8

J

6

13

O

_

_

Johns-Manville

Cement-

Star

Brass

_

_

_

__

Lead

National

junior equities in the first quar¬
ter of the year 1949, we have a
29

to

December

the

in

period now under review. In the
open-end stock fund groups there
was

increase of two companies

an

of equities in
the
last
quarter,
but still less
than half of the total number of
purchase

favoring

in "this

covered

funds

Continued
FOOTNOTES

on

None

Remington Rand

Stock dividend of

2

21(1)

10,500
4,200
1,110
305,300

3(1)

2,300

2

None

None

2(1)

4(2)

None

None

2(1)

10,300

1(1)

shares

8386'4

received

2VZ% stock
5%

as

stock

dividend.
4

shares

336

received

2

2,200

2(1)

2(2)

3,500

Delhi

None

None

5(1)

Louisiana Land &

None

Seaboard

800

None

2

1,000

1

4

4,200

6,100

2(1)

12

10,893

None

6(1)

Oil of Indiana—

None

2(2)

31,800
6,000

Standard

None

Standard

Oil of

States

1

None

None

None

3(1)

18,600

None

None

3

1,400

Gypsum

None

_

2(1)
None

2,900

None

6,800

3

ceived
6

7

Received
Addition

6

In

for
9

1

as

of

in

shares

500

represents
American
not

North

previous

quarter.

result

additions

large part
split-up.

re¬

stock dividend.

25%

from

distribution

z

of additions
stock dividend.

percentage

1214%

as

credited

289,800 shares distributed

from

in 2 for

received

shares

5%

as

stock

dividend.

12

in

on

through
for each

purchased
share

one

Commonwealth

Exchanged
for
Southern preferred.
14

Distribution

same

and

Bond

Electric

from

and

7,336

Rohm

Union Carbide and Carbon

company.

Electric

from

Distribution

18

Major portion
exchange
for
Greater

18

Bond

and

Commercial Solvents

2(1)

1,300

of

Chemical

3(1)

8,900

18.800

._

6(2)

26,425

Glass

Anchor Hocking
Continental Can

Robbins

&

9,000

McKesson

2(2)

5,500

Merck

2(1)
2(1)

10,500

Parke Davis & Co.

16,400

Procter

None

None

&

_

Co.__
__

__

Gamble

&

Sharp & Dohme

3

2,388

Philco

Radio

1
1

4(2)
5

4(1)

None

8,500

2(1)

None

None

None

None

None

None

None

None

2(1)

None

_______

Corp.

3(1)

31,700

2(1)

4,000

Square "D" Co.

2

1,625

Sunbeam

__

_

_

Corp.

9(2)

48,900

Westinghouse Electric

5(1)

12,600

General

_

_

_

_

_

1,500

_

Electric

_

None

1

None

None

None

None

1,337% Boston Insurance Co. 5

3

2

Bankers Trust Co., N. Y

•

.11,060
2,750

67%

2

2

1,120

None

None

C.I.T.

,__

Insurance Co. 6

Great American

Hartford Fire Insurance Co
Finance 1

Household

Co.

Fireman's Insur.

_____

__

of Newark

2(.l)
7(2)

2,500
6,000

.13,800
3,500
6,400

3
None

None

1,200

the
W.

Borden

treated
several

as

having the weight of
Securities

the companies

is

a

are

unit.
For ex¬
sponsored by
considered as
manager. Over¬

one

included

in

addition

listed in the companion

table.




Natural Gas 12—

American

12(1)

11,590
73,550

-3(5)

22,000

Consolidated Edison

14(3)

95,780
5,500
22,100

Consumers

14,300
43,475

General

8(7)

5(1)
12(1)

Florida

of N. Y

Power 13

Power

None
None

2(1)
3(2)

General Public

Utilities

Telephone Corp.Illinois Power Co. n_—__

Utilities 14
Montana Power Co. w/d 15

Middle South

Gas

Rochester

Electric 11

Co.16

Southern

______—

Utilities w/d 15__

Texas

Utah

&

Power

&

Light11

2(1)

None

None

None

None

53,400

5

7,500

None

2(1)
None
1

None

3(1)
None

None
None
None

KD

1(1)

United

6

None
9,100
None
None
None
None

KD

1,500

None

2(2)

50

1(1)

5,000

None

None

1(1)
3(2)

7(4)

Potomac Electric Power

None

12,000

1(1)
None

2(2)

None

None

1(1)
2(2)

77,000

None

None

2(1)

3,390

270

None

3

Power

— __

Indianapolis Power & Light
Kansas Power & Light

1(1)

None

8(2)

2(2)

3(1)

Dayton Power & Light

2,000

Hudson

0(1)

11,100
3,770
17,250
172,500

None

Niagara

2(1)

1(1)

2(1)

None

2(1)
None

2(1)

None

None

None
None

2,500

7(3)

10,000

1

4(2)

10,000

29,800

1

None

None
5,000
13,000

Ohio

None

None

55
3,000
1,500
280

27,667
None

Public Service Electric & Gas__

None

2(1)

None

None
None

Edison 16

None

None

New

Peoples Gas Light & Coke 17—
Public Service of Colorado_____

None

2(1)

New

11

1

8,100
4,040

30,110
6(2)
132,900
13(11) 145,600
22,200
12(8)
2
11,400
15,100
5(1)
7(2)
29,245
13(10) 486,430
26,054
5(5)
4(1)
20,163
85,400
4(2)
None

None

2,429.9

38,850

England Gas Association 11
Northern States Pwr. (Minn.) 11

2(1)

6(3)

5(2)

England Electric System

None

9(2)

3(3)

2(1)

None

17,900

129,886
43,249

16(5)

None

18,400

None
56,800

.

Light & Railways

4(3)

4(4)
5(3)

Radio and Amusement:
Paramount Pictures 13

Twentieth Century-Fox

Film__.

National

Atchison, Topeka & Santa Fe_.
Chesapeake & Ohio
Chicago, Rock Island & Pacific.
Great Northern Preferred

4(1)

Dairy Products

1,000

1(1)

6(1)

1

5(1)

6,200
9,000
38,700
6,000

None

None

None

Delaware

2(2)

None

None

None

None

Gulf, Mobile & Ohio
Northern Pacific

None

None

None

None

_

300

Standard Brands

Stokely-Van

Camp

None

_

_

Chicle

American

3,500

__•

Briggs & Stratton
Bucyrus-Erie

2,300

trusts

—-

—

3(1)

Haliburton

survey

Shelly Oil

'

:

None

9,800

None

Oil-—

None

2(1)
None

26,300
5,000

Corp

Phillips Petroleum

None

14,100

O

Ohio

None

20,800

4j

Gidf Oil Corp
Mission Development

Baking Co._

Co.

Continental

4(1)

when issued.

Seligman

None

Railroads:

2(2)

stock

—

3(1)

Machinery and Industrial Equipment:
2

Oil Corp

Continental Oil

9,800

2,600

Financial

—

Virginia Electric & Power
Columbus & Southern Ohio El.

Financial, Banking & Insurance:
6,900

—

of California.---

Brooklyn Union Gas
Central Illinois Light Co.13
Central & Southwest Corp. n.—

2(2)

None

2,500

____

Corp.

Para¬

new

covers 62
invest¬
but purchases or sales
sponsored by one management

are

€roup

ample,

to

3,200

._

_

Monsanto

39.400

._

-

None

40,238
7,500

2

_

None

None

None

None

2(1)

&

Hudson

Pennsylvania Railroad
Southern Railway

100
None
500

3,200

2,500
11,100

1

None
1

3(1)
2

2(1)

1.000

2(1)

21,000
17,800

3(2)

2(2)

Railroad Equipment:

Mach'y & Chemical Corp.

1,600

Cementing

None

None

3(1)

2,300

American Brake Shoe—

National Acme Co.

None

None

None

None

American Locomotive

25,600

3(1)

National

4,000

2(1)

None

None

Pullman

Co.

2(2)

None

None

Westinghouse Air Brake

11,100
11,100

Food

Oil

Well

Supply

_

_

_

companies,

trusts

seas

DuPont

None

1,000

„

18

2

_____

None
None
None
26.000
None
2,500
27,525
None
None
13,000
None
5,100
13,200

x

Public Utilities:
American Gas & Electric11--—
28,800

11

None

3,000

200

Works

Victor

Paramount

Paramount

United

and

(ctfs.)

NOTE—This
ment

&

old

of

for 5000 shares

Pictures

Theatres

J.

of additions received
Commonwealth
and

percentage received through
of 3% convertible bonds due

shares

5000

exchanged

of

Chemical

_

12,700

1963.

mount

Haas4

and

__

2(2)
4

common.

conversion
«n

Co.

27,900

3

Southern
17

(Charles)

KD

2(2)

Share.

in

Koppers Co.

2(1)

Food Products:

purchase through rights issued

Share and

lr'

6,070
None

4,000

100

11.767

__

Kodak 3

3(1)

held.

r:

I >y

through rights.

part

shares
basis of

26,314

ten

Eastman

3(2)

6(2)

Purchased

nights

Dow Chemical 2

17,400

-

Pfizer

3(1)

7693

41

11,217 y2
23,280

Cyanamid

11,800

1

£plit-up.
19

American

11,300
428

1

12,900

None

•

Ohio

Anderson-Prichard

200
None

Electrical Equipment:

Greater

(Del.)—
Standard Oil of California 10—
Oil

Oil

1,700

1

Oil

Richfield

Co.

Yale & Towne Mfg.

.

Exploration-.

Union

3,800

3(3)

______

Texas

Co.

_______

None

_

400

_______

Oil Corp

3,500

Ruberoid 1

——

None
None

1,600

Refining Co

Atlantic

10,600

4(3)

dividend.
6

None

3(3)

None

Republics Corp.______

American

2(2)

United

4(2)

3,000

4,668
2,800

stock

4%

as

None

3,500
11,000
30,000

Petroleum:

4(1)

6,400

3(1)

10%.
as

2(1)

10(10)

3(2)

—

__

& Paper

None

4(2)

2

Union Bag

None

Trane

9(1)

International Paper 9

None

2,150

13(2)

Press

None

2(1)

4

Cuneo

None

Drug Products:

shares received

3052'/2

—-

Champion Paper & Fibre
Crown Zellerbach

None

Containers & Glass:

dividend.
8

3(2)

28,500

Paper and Printing:

Pittsburgh Plate Glass——
Scoville Manufacturing

TABLE
1

River Fuel—

Mississippi

None

KD

ADJOINING

TO

Gas

Natural

Addressograph-Multigraph
Burroughs Adding Machine

1,200

2(1)

27

page

Transmission

Gas

Pennsylvania-Dixie Cement

2,100

in-

survey

Southern Natural Gas

None

None

Chemicals:

of

decrease

None
None
None
None
None

Natural Gas__.
Pipe Line8

2,000

44

29

that from a total of
favoring the purchase

we see

funds

38

42,850

None

6(1)
33

6,000

Mining

Eastern

15.400
470

3

2nd
16
14

Co

Holland Furnace

Mueller

11,200

Products

Certain-Teed

1.600

38

47,600

----

Office Equipment:
1

None

9,400

Congoleum-Nairn

3,000

Total

None

J

Zinc

Consolidated

3(1)

2(1)

American Radiator

13,700

Thus

None

(Concluded)
Jersey

1

3,000

14,000

_

___

_

_____

Distillers

3

,

Trusts

Natural Gas:

800

1,000

_

'___

Aircraft Engineering-

Distillers

National

11,6C0

2

sales

of Funds in Which

200

6,000

Hiram Walker-Gooderham &

2

Closed-End

None

Phelps Dodge
U. S. Smelt., Refining &
West Kentucky Coal1

12,400

Lines.

United Aircraft

following table:

Open i

8,300

Aircraft--'——

Lockheed

Lone

Stock

5(2)

.

Bendix

4(1)

Open

3(3)

,

during the last three-quarters of
1949.
This is
indicated
in the

Balanced

New

..

_

11,800

7

enthusiasm for the pur¬
equities is afforded by a
comparison of the decrease in the
total
number
of
companies in

Quarter

7,000

Building Construction & Equipment:

chase of

Number

2(2)

Corp.

13,900

3(1)

had fallen to 54%.
insight
into
this

purchases

None

■

Worts

waning

which

None

No. of

Shares

_

_

4

the last three months of

year,

Still

Shares

No. of

Beverages:

For the
this fig¬
ure amounted to 85%; during the
June period it had decreased to
the

_

_

4(1)

Nguc

first quarter of the year,

In

Trusts

Thompson Products

Aviation:

decreasing
percentage
by
which
the
margin
of
buying
transactions has exceeded
sales

-36%.

Trusts

2,300

Libbcy-Owens-Ford Glass

None

None

the

throughout

100

1

discernible.

slightly

only

No. of

Auto & Auto Parts

American

closed-end

tional

No. of

__

— _

__

Interna¬
trusts
which

represented

was

and

No. of

income.

up

However, about 20% of increased
Adams

No. of
Shares

Caterpillar Tractor

1,000

1(1)

Sold-

—Bought—

Metals and Mining

Agricultural Equipment:
600
J. I. Case

2

*

'

Sold-

No. of

great

keep

to

their portfolios.

—Bought—

cash re¬
boom in
public participations in the mu¬
tual funds necessitated investment
of

the

from

in italics.

are

eliminating the stock from

in the open-end group

pressure

ceived

management groups. Issues more heavily
new purchases of an issue or completely

which buyers exceed sellers—or sellers exceed buyers—by two or more
Numerals in parentheses indicate number of managements making entirely

Transactions in
sold

In Final Quarter
were

of 45 Investment Management Groups

(September 30-December 31, 1949)

Favoring Utilities
'which

1950

Thursday, February 16,

FINANCIAL CHRONICLE

&

COMMERCIAL

THE

(730)

None

None

4(3)

Metals and Mining:
None

None

None

None

4(2)

20,800

Allied

13,300

3(2)

2(1)

Edison

__

12,700

2(2)

5(3)

10,500
13,600

_

48,300

4(2)

3(1)

3,700

Aluminum

3,400

American

5,150

American Smelting & Refining.

5(1)

8(3)

of

Metal

13,500

International

28,700

Kennecott

Retail Trade:

America

4,400

3

5(2)

Co.

Co., Ltd._

4

Nickel

Copper

_

_

_

_

_

Stores

BrothersvStores

Federated
Grant

Department Stores-

(W. T.)

5,000
None

1,000
None

2

None

1(1)
None

Volume

171

Number 4882

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

(731)

Changes in Common Stock Holdings of 45 Investment Management
Groups

—Bought—

\v

No. of

No. of

Trusts

Shares

Retail

3(3)

<

Trade—(Concluded)

22,000

2(1)

Kresge

4,100

2

5(1)
None

None

None

None

(S.

S.)

Jewel

H.)

Tea

No. of

No. of

Trusts

Shares

None

6(1)

•,«.Nohe

None

2

None

None

2(1)

1

2

i'

,

Co

•

'.>***200""

____

13,000

2(1)

2,800

2(1)

12,000

4(1)

10,100

7,700

1,085
11,500

Goodrich

_____

United States Rubber-_;

3(1)

1,200

United

1

3,000

National

Steel

1(1)

Steel

Trusts

Favoring Utilities

%850

3(1)

in Final Quarter

None

None

dicated such

Pacific Mills

None

None

caution

United Merchants & Mfrs

None

None

2,500

KD

Philip Morris

____.

None

American

2(1)

4,900

Liggett and Myers

Tobacco

4,100
14,675

Miscellaneous:
4(4)
10,800
Servel, Inc.
2(2)
6,000
Southeastern Greyhound
None
None
Minnesota Mining & Mfg

None

Open-End

Business

Sept.

Shares.—

terion of management.
It
is
interesting to

None

None

None

3,500

3(1)

523

789

Boston Fund

Commonwealth Investment
&

Howard Balanced

Fully Administered Shares
General Investors Trust
Investors Mutual

,

Johnston Mutual Fund

SMutual

Fund

National

of

Boston

Securities-Income

Nation Wide Securities

Nesbett Fund

George Putnam Fund
Scudder-Stevens &

Stock

Bowling Green Fund
Street

Investing

Bullock Fund

_

_

_

Delaware Fund
Dividend

I

_

_

Shares,_

_

_

First Mutual Trust Fund
Investors

;_

General

Capital Corp..,
Incorporated Investors
_

Institutional Shs. Stock & Bond Gr
Investment Co. of America
Investors Management Fund
Knickerbocker Fund

______

Loomis-Sayles Mutual Fund
Loomis-Sayles Second Fund
Mass.

Investors

_

Trust

_

_

_

—

_

Selected American Shares

Sovereign Investors

__

Investment

Corp.
St. Investing
Corp.

Closed-End

Dec.

73.1

66.0

87.0

89.0

14.1

13.4

68.9

75.0

23.7

63.4

9.5

59.6

25.9

20.0

65.0

_

_

_

_

__

Express

_

Ridge Corp,
Capital Administration
Public

Lehman

Corporation

National Shares

Selected Industries

_

_

_

_

"Investment

bonds and

preferred

issued to stockholders

this

on

contacts
and

selling field.

had

be

to

much

lost

re¬

terri¬

tory regained:
"At the year end net cash and
receivables amounted to
$5,330,048
or

approximately 7% of the total

net

70.5
65.5

usually maintain, it must

63.1

298

198

15,205

21,279

109

154

285

266

560

580

994

557

7.8

4.1

73

34.7

105

16.7

.19.7

25.3
20.9

24.9

15.8

2,993

10.5

5.0

5.1

9.7

79.2

12.1

84.4

27.5

24.8

23.7

62.8

28.0

63.1

10.1

11.1

19.4

66.2

15.6

60.9

32.0

28.3

4.1

48.6

3.7

56.1

15.2

18.7

80.7

77.6

38.3

57.5

57.6

27.4

58.0

52.9

68.5

66.5

f

61.0

63.4

65.2

10.6

8.6

3,867

T

13.1

329

7.5

21,603

J.

t

25.9

29.1

28.6

.

6.2

15.9

20.5

21.9

18.8

62.2

3.0

60.7

41.1

44.3

56.2

13.9

•52.7

7.2

4.3

74.9

81.8

25

32

2.7

337

281

17.9

2,132
79

3,375

2.0

161

13.8

612

591

5.8

None

0.2

26.7

3.7

4.8

6.2

clouded.

This

cash

will

porary

lower

prices

for

or

298

378

11.6

"11.9

1,575

1,498

6.0

4.7

79.2

81.5

2.3

90.2

87.1

1.1

87.1

87.0

•

x

10.6

•'"W.

0.3

1.5

93.7

3.2

93.8

23.6

22.7

74.3

6.0

74.1

1.9

1.0

91.2

93.0

None

92.3

91.6

-

688

836

7.7

8.4

None

3,947

5,330

6.0

7.3

None

183

361

85

None

94.0

15.6

92.7

1,379

None

1,588

None

23.6

91.5

22.3

84.4

406

None

447

None

4.4

4.4

484

2.4

927

1.1

5.2

8.8

None

40.0

2,323

2,347

41.5

3,680

"3,575

40.5

38.0

9,179

4.2

3.3

open-ends

practically

fensive

quarter.

These

increased

by $25

hand,

of

and

companies
positions
by

amount,

so

was

total

a

companies

22%.

or

increased

that

as a group there
decrease
in
that

94.8

91.2

net assets of the closed-end trusts

55.0

54.5

4.0

6.5

55.0

55.5

95.8

None

None

None

None

95.3

95.3

22.3

29.2

66.1

69.7

96.7

461

None

~463

None

16.6

96.6

15.8

98.1

292

3.9

36

3.7

16.4

79.5

1.9

80.5

2.4

None

81.2

22.1

1.5

0.6

74.1

4.6

77.3

21.7

19.8

66.7

75.6

98.1

312

340

None

24.5

77.6

22.6

73.9

None

2.1

75.5

75.3

14.2

5.3

None

81.9

•

junior equities and equivalents
increased
from
81V2%
to
85i/2%. The balanced open-end

funds

85.8

had

vested;
aged

only

stock

83.8%

stocks

the

and

this

considerably
the

thus

in

more

mentioned

annual
report
of
type" fund above.

the

18.0

5.5

15.7

12.6

11.8

66.3

14.6

81.9

7.0

None

81.2

85.4

0.9

0.4

80.8

83.9

conservative investments

■*'

7.4

6.9

10.0

8.9

82.6

17.3

84.2

mon

3.4

3.0

79.1

of

4.3

79.7

None

None

92.9

13.2

95.7

curities

2.9

2.1

82.9

84.7

sponsored

205

7.1

13,626

14.2

2,191
2,151

1,503
2,130

4.7

4.6

73.2

4.4

80.7

".

12.4

10.5

82.8

85.1

'modified

3,140
1,839

5.4

20.6

4.9

Moody's Aaa through Ba for bonds;
{Portfolio exclusive of securities in

Fitch's

subsidiary

•

AAA
or

.

the

Co.,

14.7

6,252

by

Calvin

12.1

11.0

83.0

84.8

the

proportion

None

94.6

95.1

for

15.2

None

appreciation

None

approximate

companies.

§Name

equivalents

changed

79.4
for

from

84.8

Russell

Berg

1No

interim
Fund.

of

Se¬

fund

Bullock:

securities

is

changing levels of
prices.

preferreds.

balanced

company
follows a
formula plan' whereby

None

and

com¬

your

.

4.9

through BB

as

Nation-Wide
a

4.2

associated

the

"Boston

prices rise. An example

is

4.8

1,924

stocks:

stock

this

22.1

7,974

is

mula plans and thus
automatically
switch from the more volatile
to

17.5

13,482

in

Certain
general
management
funds state in their
published re¬
ports that they operate on for¬

529

554

be

conservative

more

2,754

6,807

will

average

1,629

558

common

It

latter

93%

in¬

aver¬

speculative

preferreds.

that

than

66V2%

open-enders

invested

and

bonds
seen

'

-

in

also

2,123

323

cash

appreciable

an

5.5

1.1

6,646

the

closed-

3.5

4.7

15.7

On

two

77.7

4.7

18.3

de¬

previous

governments

only

end

main¬

same

the

latter

cash

million

other

the

positions

94.5

11 6

12.8

in¬
pe-

76.4

15

'

funds

during the

93.2

.896

.

tained

other

cash

None

.

75

1.9

27

the

group's over-all liquid position of
almost $3 million.
Percentage of

810

3.4

However,

89.7

1.3

9.8

...

espe¬

cially attractive opportunities."

90.5

None

8,026

5,429

afford

power in the event of tem¬

90.4

1.1

8.7

5,642

largely

buying

nocOand

None

24.4,,

generated

which had been
disappoint¬
ing and the future of which was

creased their

4-; 10.0

356

are

stocks.

ties

70.6

8.4

V

conditions

common

which we felt had risen to a level
where they offered little
prospect
of further
advance, or of securi¬

82.5

9.8

2.1

was

be

con¬

by the sale of securities which had
justified
our
expectations
but

88.0

9.6

6.9

for

5.5

10.8

116

cash

2.7

616

3,304

present

unfavorable

97.1

362

70

that

cern

This

not

indication of

an

as

98.0

297

3,006

construed

Defensive Positions
2.7

635

3,340

date.

Valuable

59.6

None

_

Tri-Continental Corp.
j:U. S. & Foreign Securities
U. S. & International Secur

forged ahead in the

65.1

26.1

__

is

13.4

4,926

_

and

27.8

5,996

Corp.

bleak,

16.9

22.4

Service

rather

was

26.5

18,885

General American Investors

General

when

6.7

15,694

___

the

23.5

11.6

Blue

stopped
public

to

period several years
the stock market out¬

84

18

__

shares

new

brief

a

235

"8,511

American European Securities
American International

large stock

1,138

45

__

of the

one

shown in his message to
stockholders included in the an¬
nual report.
This fund

3,382

3,597
_

the

969

9.1

Companies:

Adams

reports

/

22.7

,

'

~

Republic Investors

St.

16.7

note

3,863

570

_

New England Fund

Wall

11.6

13.9

cri¬

assets.
While this is a some¬
what larger cash position than we

10,363

Mass. Investors Second FundMutual Investment Fund
National Investors

State

6.1

1,110

6,756

Eaton & Howard Stock.

Fidelity Fund
Fundamental

14.9

6.8

Funds:

Affiliated Fund
Broad

17.2

4.9

7,958

14,147
._.

Sept.

19.1

6.2

17.0

a

as

established

End of

•

Dec.

9.7

794

375

Whitehall Fund
Wisconsin Investment Co

Per Cent

476

5,897

Clark

Wellington Fund

Com. Stks. Plus Lower
Grade Bonds & Pfds.

6,720
839

3,416

Shareholders Trust of Boston

Open-End

f

necessarily

known to have regretted such ac¬
tion
since
its
chief
competitors

End of

Sept.

not

president of
funds

look

Invest. Bonds &

Dec.

is

sensitivity to this problem of the

ago

Per C-int0

Sept.

govern¬

position

Companies

Preferred Stocks

-End of——
Dec.

3,26*2"

___

Axe-Houghton Fund
Axe-Houghton "B"

Eaton

Per Cent

-Eftd of~

Balanced Funds:

American

Net Cash & Gov'ts

Thous. of Dollars

and

5(1)

Quarterly Periods September and December, 1949
Net Gash & Gov'ts

cash

8(6)

selling

End of

with

up

None

for

Balance Belween Cash and Investments of 61
Investment

preference. If this

ments, fund distributors may have
to explain
that a fully-invested

None

.___

a

continues,

resulting
in
large portions of portfolios
being

taken

10,700

1

Steels:
States

Shares

American Viscose Corp.
Colonial Mills

None
1

1,400
4,900

—

4,000

No. of

Tobaccos:

4(1)

Rubber and Tires:
5

No. of

Textiles:

Nhrte^

Macy (R. H.)__
Safeway Stores
Hoving Corp.

Trusts Continue

-Sold-

No. of

Trusts

_

Continued from page 26

(Continued)

—Bought— "

No: of

Shares
v '

(S.

Kress

1,600
24,500

—r^—Sold-

27

held

adjusted with
common

stock

This

plan resembles the
type of investment planning fol¬
lowed by certain institutional in¬
vestors with
ative

SUMMARY
Balance

Purchases and

Sales

Portfolio

Securities 62 Investmeni

Companies
Open-End
<

Balanced

Companies:
Funds

Stock Funds
Closed-End

Bought
_

__

—

_

Companies

Totals—All

Companies




Matched

10

2

8

13

9

6

6

-

Sold

29

5

16

3

17

Totals
20

1

28

14

62

SUMMARY
Change in Cash Positions of 62
Investment Companies
Open-End Companies:
Plus
Minus
Unchanged
Balanced

Funds

Stock Funds

Totals—All Companies

nounces

port
Totals

its

_

that

first

in

it

its

10

8

2

20

Formula

5

7

28

investment

2

6

6

14

28

19

15

62

1949

"has

year

16

In

Closed-End Companies

comparable conserv¬
objectives."
Similarly the
Investment
Fqnd
an¬

Mutual

of

annual

re¬

just

completed
operation with

Timing as part of its
policy."
assessing the more cautious

side of the present investment
pic¬
ture it is
interesting 'to observe

Continued

on

page

28

28

Continued from page

Trusts
that

State

with

27

Street

Investment

Co.

good record for protecting

a

ket decline has

Light which were par¬

holdings.

."

.

.

joined the Loomis-

Sayles funds (whose past records
during this period have been men¬
tioned
in
previous surveys) in

substantially to its cash
position. The annual report states
that the company
"started 1949
with approximately 15% of total

adding

Among the utility issues ap¬
proximately 60 transactions re¬
sulted from completion of distri¬
butions
under
dissolution
pro¬

Light, while two others eliminated

tively little activity, in Sears Roe¬

shares of Potomac Electric Power

buck,

in

similar

a

Power

Dayton

number

lightened

holdings of Columbus and South¬
ern
Ohio Electric.
Opinion was
divided

Gas

Cincinnati

on

Electric and also

on

and

North Ameri¬

Gas

Natural

Consolidated

was

transactions occurring
side of the market. While

two

each

on

there

to be similar in¬
Bond Stores, a pair of

appeared

decision

on

2,000 shares was

additions totaling
offset

by

like number of com¬

a

amounting

eliminations

plete

Co.

can

exercise of rights by

and

grams

of

and

and

*

Utility Transactions

five purchases

Ward,

gomery

27,900 shares matching six sales of
lots
totaling 24,700.
There was
also
a
division, although rela¬

vestments

1937 mar¬

Thursday, February 10, 1950

CHRONICLE

tially offset by half as many pur¬
chases. Three trusts decreased in¬

portfolio

in the

made

been

have

FINANCIAL

&

Power and

Favoring Utilities in Final Quarter

shareholders in the

its

COMMERCIAL

THE

(732)

to

Stokely Van

Standard Brands and

there

Camp;
a

small

was

of

lot

Baking

the

of

shares

300

Borden

former.

single sale of

a

Continental

and

also each purchased

were

by two managements with no off¬

The only con¬
selling was the complete
by two companies of

setting liquidation.
centrated

elimination

of American Chicle,

3,500 shares

Transactions in the issues Of fi¬

institutions

nancial

followed

a

pattern that has shown little vari¬
ation over the last few quarters.

22,800 shares.

Kennecott kept its pronounced
liked by three managements en¬
Among financing concerns, 11,060
of con¬ titling it to claim of most popular popularity among trust people, shares of C. I. T. Financial were
issue
in
the
natural
gas
group.
eight
managements
purchasing
a
assets in cash and short-term gov¬ struction programs and integra¬
acquired by six investment man¬
Panhandle Eastern Pipe Line stock total of 28,700
shares, three of
ernment certificates. During the tion plans. Such additions are not
agements two of which made in¬
which
represented initial addi¬
included in the total purchases of was split but three funds added
itial commitments in this issue.
year we have felt it prudent to
However volume of sales
more
shares.
Southern Natural tions.
this
group noted earlier as com¬
reduce our stock commitments and
Two
sales
amounted
to
2,600
increased
as
well
as
purchases,
Gas,
Western
Natural
Gas
anu
prising 20% of portfolio increases.
at the end of the year cash and
shares.
Activity in Commercial
four lots totaling
Texas
Gas
Transmission
were
48,300 shares.
As
in
the
previous
period,
these
short-term governments amounted
Credit, however, was less pro¬
comprised Central Illinois Light each added by two investment Phelps Dodge vied with Interna¬ nounced, two funds eliminating
10 approximately 26% of the to¬

Commitments in the

assets."

tal

during the year were
reduced from 31.9% to 20.6% of

011 industry
total

ing

major reduction be¬
in the quarter under

assets,

made

Power

Consumers

and

Co.

acquire additional

furtherance

for

capital

re¬

Commonwealth
and
Southern preferred and Ohio Edi¬
for

ceived

son

and Southern Co. which were

exchanged for the common stock

Many trusts
added to these commitments re¬
ceived in exchange. 16 investment

of the same company.

review.

funds
have maintained their cash posi¬
Loomis-Sayles

the

As

stockholders to

tions of 38 and 40%

at the year-

remarks of R. H. Loomis,
President, in his annual message
end,

well be

to shareholders may very

companies received shares of Mid¬
dle South Utilities, part as a divi¬
dend
from
Electric
Bond
and
Share and part through exercise
of

the

by

issued

rights

same

Looking beyond the
of the next concern. 12 trusts acquired shares
few months, there is considerable of Peoples Gas Light & Coke but
uncertainty
and
the possibility half of these acquisitions resulted
that readjustments of a more fun¬ from conversion of that company's
damental and possibly more dras¬ 3% convertible debentures. Texas
tic nature may take place (than Utilities common was received by
the short decline of last spring five funds as a liquidating distri¬
and summer).
Up to now there bution from Electric Bond and
has been no readjustment in the Share.
Among utility issues, additions
automobile and building indus¬
tries.
When the postwar shake¬ of which were partially stimu¬
lated
through rights, were Ameri¬
down has finally been completed,
prices appear likely to continue can Gas & Electric and American
Natural Gas. 11 companies added
high by prewar standards. Ulti¬
mately they may go much higher shares of the former and 18 those
Two-thirds of the
than they are today. This possible of the latter.
^quoted:

.

.

momentum

business

place

second

tional

Nickel

offsetting liquidation in any of the
three
issues.
Mississippi
River
Fuel
was
eliminated from
two

among

the non-ferrous group, five

portfolios and lightened in another
for a total of 28,500 shares; there

However

purchase. Eight manage¬
ments split opinion on the Colum¬
bia Gas System, although the sell¬

trasted

there

while

companies,

was

no

one

was

ing resulted in complete portfolio
Similarly, appraisal

eliminations.

a

Corporation

Gas

United

of

was

trusts buying, and
like number liquidating.

divided,

seven

of the cement in¬
issues, which dominated
the building group during the sec¬
ond and third quarters of the year,
subsided as seven funds added to
Popularity

dustry

Radiator;

American

of

holdings

40,400 shares were purchased. Two
managements lightened portfolios,
while two others completely dis¬
posed of the stock. Flintkote was
next in demand, three trusts mak¬
ing

and

commitments

new

others increasing lots

trusts

for

adding

former

and

8,300

13,500

shares of the
of the latter.

sales

three

Phelps

of

Dodge totaling 47,600 shares con¬

liquidation of only
amounting to

with

lots

two

of

Nickel

American Smelting was
also
liked b,y
five funds for a
total
of
5,150 shares, but here
again selling out of three port¬
folios totaled 13,300. No liquida¬
tion was in evidence, however, in
12,700.

of four

added to the holdings

was

Metal

American

tusts.

which

of America

Aluminum Co.

New

and

Jersey Zinc were added by three

respect¬

and

two

ively.

The latter represented in¬
additions.
Opinion was al¬
divided on the leading gold

itial
most

mining

managements

issues; four purchases of
totaling 32,800 shares
three sales amounting
to
Dome

of

shares

contrasted

few 12 companies purchasing Illinois shares. Lone Star
Kentucky Coal which had been
be Power did so through exercising some attention from four funds, received in the previous quarter
three of which made initial addi¬
due to two powerful social trends rights. Shares of Rochester Gas &
as
a
distribution
from
North
Electric and of West Penn Elec¬ tions.
However, two other trusts
.spawned by the great depression
American.
6,000 shares of U. S.
also were partially bought disposed of a total of 6,100 shares.
d)f the early 1930s and given dy¬ tric
aid of rights.
Seven Pennsylvania-Dixie Cement also Smelting were sold by two other
namic impetus by World War II. with the
funds.
One is the vast redistribution of trusts made commitments in the received limited preference from
wealth which has already taken former utility and three in the two managements who purchased
Popular Chemicals
environment

inflationary

a

hence will in large part

years

country.

this

in

place

.

.

second social development

.

The

making

for

higher prices is the trend . . .
toward what is now known as the

acquired through rights.

'Welfare State.'"

York,

Fund bought
quarter, its
President, Edward C. Johnson 2d,
after noting that
.
.
stocks in
general are apparently now very
cheap according to historical prec¬
edent" cautions thus: "Yet for the
last 18 years the vicinity of 200
Although Fidelity

balance during the

on

the

in

Jones Industrial Av¬

Dow

has always marked a high
vulnerable level in security

erage

and

Also, the high and profit¬
rate of business activity since
can
hardly be assumed to

prices.
able
1946

permanent. At what level can
earnings be expected to stabilize
after
the
abnormal
influences
be

which

contributed to the postwar

influences,

faded? These
incidentally, appear to

be waning

fast."

business boom have

generally more optimistic note
might naturally be expected from
Edmund Brown, Jr., President of
•Fundamental Investors, which was
one of the dozen funds noticeably
A

pick up its tempo of purchasing
during the quarter. ". . . It can
be argued that many of the sup¬
porting factors are artificial, that
government policy has an impor¬
tant bearing upon the demand for
to

as

we

must deal with

A money sup¬

But

is created by govern¬
deficits and government fi¬

ply which
ment

nancing, rather than through pri¬
vate
borrowing,
is not readily
withdrawn
from
the financial
markets.

practice
which

...

sell

to

are

While

it is

those

out of line

ings and dividend prospects,
are

to

sound

securities

with

earn¬

there

shares today which seem
reasonably priced. Accord¬

many

be

ingly,

your

maintained

a

management

has

large invested posi¬

tion, although certain changes




to

group

total

New

to

shares.

2,000

of

blocks amounting
There was one

shares.

11,200

S.

be bought

without the

special

offerings to

number sold 1,400.

of

Gypsum,

half

while

U.

incentive

Johns-

liked by four funds

was

that

Four manage¬

purchased ments also added Yale and Towne,
a
total of 22.000 shares, five of while there were no transactions
which
were
new
commitments. on the selling side. Neither was
there
any
liquidation in Pitts¬
One company eliminated a block
of 1,500.
General Public Utilities, burgh Plate Glass, 15,400 shares
of
which
were
acquired by three
also well liked in the previous pe¬
10,800 shares of Cer¬
riod, was added by four funds companies.
Products
and
13,700
and newly acquired by another. tain-Teed
of
National
Lead
were
There were three sales, represent¬ shares
ing 56,800 shares, two of which added to a like number of port¬
completely removed
the stock folios. Selling in the group was
light and concentrated on no in¬
from portfolios. Five trusts bought
15,100 shares of Public
Service dividual issue.
stockholders. Six trusts

Electric

and

American

Cyanamid,

Gas, but there

were

orado,

as

totaling 9,100.

Tele¬
by two

well as General

phone were each
managements.

added

Hudson

was

sold by five manage¬

three of these completely
the holding company

eliminated

from their
one

small

portfolios. There was
purchase.
Four trusts

cleaned out 17,250 shares of Kan¬
sas

Power

and

Light

from

their

holdings but another management
group

also

added 10,000.
four

sales

of

of

There

were

Indianapolis

well

There

Stores.

each

these

of

Allied

leaders.

Duplicating
its
performance
the
previous
quarter,
United Light and Railways was
the most heavily liquidated issue.
Seven managements disposed of a
total
of
77,000 shares, four of
which
completely removed the
stock from their holdings. Niagara
ments;

ated

bought,

additions
others

to

was

one

sale

merchandising

Stores

was

also

trusts making
holdings and two

two

making

initial

purchases

totaling 20,300 shares. There were
two

sales

of

5,000.

Grant

and

As

pur¬

usual,

scattered

pur¬

while

American

two

very

small

Fire

to

Insurance,

of

bought
Hartford

lots

received

managements

amounts

round

out

dividends earlier in

stock

as

Co,

the Boston Insurance

Great

the

Two trusts eliminated 12,000

year.

shares of the Fireman's Insurance

Newark.

of

Co.

trated

Only

concen¬

buying of bank stocks
in

curred

Bankers

Three

York.

.com¬

total of 6,900

a

which

of

one

oc¬

New

investment

panies purchased
shares

of

Trust

was

new

a

commitment.

Three

liquor distillers also
certain

a

Four

trusts

re¬

of

measure

at¬

purchased

a

total of 44,600 shares of Distillers

elimination

of

two
of
initial
pur¬
one
complete
14,000 shares. 11,-

600

of

National

Corporation-Seagrams,
which

represented
chases; there was
shares

purchased

were

Distillers

three

by

man¬

agements one of which was an in¬
itial addition; there were no sales.
N'or

there any liquidation

was

Walker-Gooderham

Hiram

in

and

Worts, 5,100 shares of which were

acquired

by

two

the

Among

companies.

motors

and

motor

Chemical and Charles Pfizer were

parts there was almost a balance

equally popular among the chemi¬

between total

of Dow was ac¬

Additional stock

quired during the period but this
represented

dividend

stock
each

100

of

distribution

a

2%

of

shares

a

lor

Additions totaled

held.

(ex¬
cluding the stock dividend) and
11,800
Pfizer.
Thirteen
trusts
12,900 Cyanamid, 8,165 Dow

added also to holdings

of Eastman

Kodak, but seven of these repre¬
sented increases from a 5% stock
dividend.

each

There

of the three first

issues.

Both

two

were

Dow

sales

mentioned

and

Eastman

in

the

quarter,
although
preference had been shown

no

had

been

lightly favored

previous

for
No liq¬ Safeway and Federated Favored
the chemical group as a whole.
uidation appeared in Utah Power
Continuing their popularity of
Two
managements made initial
and Light as four funds added a
the previous quarter among the
commitments in Rohm and Haas
total of 20,163 shares.
An equal retail group both Safeway and
while a third added to a lot al¬
number of companies added 85,400
Federated Department Stores were
shares of Virginia Electric
and favorites with investment man¬ ready held; there were no sales.
Also finding
favor among three
Power, two of which represented agers.
Five purchased a total of funds each were Union Carbide
new commitments. A lot of 10.000
24,500 shares of the former stock
and Victor Chemical Works.
Pur¬
was eliminated from one portfolio.
and 13,600 latter.
One new com¬ chases of the former totaled 4,000
Brooklyn
Union
Gas,
Florida mitment in Safeway, however,
shares and of the latter, 12,700.
Power, and Public Service of Col¬
contrasted with three in Feder¬
There was a single sale of each of
three sales

in

tered

and

Dow

cal
issues,
four
managements
favorite, was sale of 1,000. A like number of
making additions of each concern.
issue in this companies bought 64,000 shares of

popular

most

of

Edison

old-time

an

a

Manville

which acquired

for during

they are.

securities.

things

demand

the

and

goods

Consolidated
the

Eng¬
in part

38.850 shares of New

latter.

land Electric System were

third

a

800.

stocks, no con¬
centrated buying being indicated.
A few stock dividends were regis¬

tention.

300

of

several

chases of insurance

offset

with liquidation of two portfolios
Two
2,200 totaling 25,400. There were 10
eliminations of
West
managed to get complete

while

lot

a

were

ceived

two 8,000 while three purchases of 13,-

already held;

chased
there

Homestake

shares were added.
companies sold a total of

20,200

shares

2,500

these issues.
in

Hercules

A division occurred

Powder,

four

com¬

panies increasing holdings by 15,000
shares
while
three
others

Dupont was sold
by five managements and pur¬
chased by two others. Other chem¬
ical concerns not so well favored
liquidated 2,000.

purchase and selling
concentra¬

transactions,
tion

although
in

more

was

Chrysler

on

the

12,500

were

which

of

two

trusts,

evidence

shares
of
acquired by eight

side.

buying

were

new

commitments; two sales amounted
to

General

shares.

6,300

was

Motors
of

added by seven funds, two

which also represented initial pur¬
chases.

However,

the addition of

15,000 shares was offset by liqui¬
dation

five

in

portfolios

totaling

7,900.

Three purchases of Stude-

baker

almost

balanced

four sales.

Among parts manufacturers Elec¬
tric
Auto-Lite
was
bought
by
managements while Doehler-

four

Jarvis

acquired
by three.
sold
Libby-Owens-

was

funds

Four

while

Glass

Ford

creased

two

others

de¬

Thompson
Products by 12,400 shares.
holdings

of

Eastern Air Lines

air

was

transport

company

with

trust

favor

four

the

to

find

managers,

adding 13,900 shares to port¬

folios.

five

three.

manufacturers,

Among

United Aircraft

were

the only

funds,

11,800

was

purchased by

liquidated
by
shares
of Bendix

but

added during the quarter

to>

four
a

portfolios, one of which was
new
acquisition. One lot of

1,000 shares was eliminated. Twofunds
bought Lockheed. A like
number of

managements sold 4,200-

shares of Grumman.

favor with three were Commercial Solvents and
Drug Products
each, all additions Monsanto each of which were dis¬
The Drug Products were wellof the latter company represent¬
posed of by four funds. However, liked in contrast with the pre¬
ing new commitments; there was
there was one sizable initial com¬ vious
quarter.
Three
manage¬
no liquidation in either issue. Also
mitment in Commercial Solvents.
ments purchased McKesson
and
bought by two companies were
National
Edison Brothers Stores, S. H. Kress
Dairy remained the Robbins. Also acquired by two
and Macy. 13,000 shares of Hoving best liked stock among the food trusts each were 5,500 shares of
Corporation were disposed of by issues as in the previous quarter, Merck, 10,500 of Parke Davis and
16,400
of Procter and
Gamble.
two managements, while the same seven funds purchasing a total of
There were no sales of any of
number liquidated 2,800 shares of 13,800 shares. Another trust com¬
these latter issues, but two trusts
Jewel Tea.
Opinion continued to pletely eliminated a lot of 1,000.
be fairly well divided on Mont¬ Three companies each purchased lightened holdings in Sharp and
Kresge

found

managements

*

Volume 171

Dohme.

Number 4882

Continental

Can

divided

were

two

can.

favored

was

pur¬

total of 48,900
shares

a

of

Westinghouse,

while
three
sold
In contrast, 12,600
shares of
General Electric were
added by
five funds, as seven
disposed of

29,800

shares,

three

complete

television

fad

reflection

in

general

of

did

the

not

management

was

two

purchases

of

Zenith

were
partially offset by
complete elimination. Among
equipment concerns, Sun¬

one

the

oils

was

Phillips

managements

18,400

shares;

by

Annual

the

Detroit

Petroleum.

disposed

tend

Stock

invitations

by

of

John

ing in unpopularity was Gulf
Oil,
eight
trusts
liquidating

change;

disposed of Continental
Oil, while
that

number

holdings

sold

three

were

of the

Skelly.

additions

former

and

to

only

of the latter. Six
funds light¬
ened
Ohio Oil, as
against three
purchases. There was a division
in opinion on Standard
of New
one

Jersey.

Purchasing

was

trated in Standard of
managements

Indiana, six

buying

liquidating. Seaboard

concen¬

and

none

Oil of Dela¬

ware
and
Texas Company each
found favor with four
trusts. Two
funds
purchased
American
Re¬

public

Corp.,

Atlantic

Refining,

tional

State

previously,

marked

liquidation of
Blue Ridge Corporation
Continental

Street

there

was

oils
and

liquidating

of

from

complete

portfolios;

purchases.
posed

Five

the

were

of

purchases

holdings

and Address-

all

but

one

American
was

six

Viscose;

complete elim¬

Merchants
While

chased

portfolios,
of

and

five

shares

by

Manufac¬

funds

Celanese, this

balanced

liquidation

in

added

was

Steels

&

of

man

tion of National Steel
by the same
number of funds. Buyers favored
the rubber stocks with five
in

Exchange

Co.,

is

divided

among

Six

is

now

known

He

the

were

rail¬

managements

ferred, while four increased hold¬
ings of Atchison. Chesapeake and
trusts.

—

Ladd

associated

with

in

by

three

Three managements liqui¬




banking,

civic

formerly connected with
Savings Bank &
Co., of New Orleans, serv¬

ing

trust

as

officer

and

cashier,

and

at one time, was connected
with the Trust
Department of the

Whitney National Bank, of New
Orleans.
Dinkins

and

also

New

is

a

graduate

University, Class
took

at

courses

special

Loyola

Orleans.

He

of

of

1928,

business

University
also

of

served

in

the armed forces in World War II

Lieutenant in the Navy.

as

not

is

today

he

and

considered

vernacular either

can

in

who

Ameri¬

piker

a

or a

peanut individual.

Economics

to

know that numbers

new

day

three figures for "thousands"
the next three
figures for

with

elders

your

never

whether

we

quintillions

8th sextillions
9th septillions
10th octillions
11th

nonillions

12th decillions
13th undecillions

14th

duodecillions

15th tredecillions
16th

quatuordecillions

17th quindecillions
18th secdecillions
19th septendecillions
20th octodecillions
21st novendecillions

22nd vigintillions
Now

children, with these facts
firmly imbedded in your minds,
will

of

one

them

to

spend

boys

you

us

how

much

in

the

last

money

total

or

girls tell

is

involved

of

"How

our

Money Grows" table which
chalked

the

on

I have

blackboard—that

is, what is the total interest on a
single Penny compounded at 5%

Washington poli¬ annually from
Domini, to the
to
ask
us

stop

like

periods

and

paltry

popular

dear

my

succeeding

Periods of 3 Figures
7th

are

"millions," then those things that
so

the

labeled this way:

are

periods of three fig¬

proxy and those

Supposing

some

"quadrillions"

children

order.

each, the first three figures
stand for
"hundreds," the second

ticians
Just

"billions" for

more

and

gum

After

Will

ures

are

pocket circulation.

our

Or

the

suppose

perpetual

ings bank from the birth
to

1920

piece

had

deposited
better still,

or,

mathematician

sav¬

of Christ

25

a

cent

suppose

a

The New York Stock
Exchange
has announced the

changes:
Interest

McMillan

the

J. D.

John

S.

Exchange, died

Thomas

of
W.

Feb. 6.

on

Exchange

is

will

dividual

Mary
partner

Frank

will

be
on

understood

that

do

as

F.
in

mem¬

Grabosky

floor

business

to

in¬

or

reach

Henderson

on

F.

Feb.

8.

of

know

the

Iron

what

I

Curtain

Lord

the

1

year

of

year

Anno

blessed

our

1920?

Western

mean,

—we

and

at

come

then

oddest

last

to

"trillions'"'

"quadrillions"

but

over

21

living in this country,

a

to

the

thing is, children, nobody

for

be

of age

years

much

who works

interested

seems

in

any

higher denomination than "quad¬
rillions."

May I digress for

a

to

moment, to

an

Mr.
in¬

limited

Henderson

the

answer?

Johnny
and

to

took

the

in

a

long

admiration

breath

of

all

his

girl

friends present he proudly
declared: "Miss Stickney, the sum
total
of
$503,441,000,000,000,000,000,000,000,000,000,000,000 in terms
of

dollars

is

expressed

'undecillions'

and

$503

as

441

'decil¬

lions' and believe me, Miss Stick¬
ney,
that ain't hay."
Then ho
fainted! ! After reviving him, his

teacher,
Miss
Stickney,
said,
"Johnny, you are just wonderful

say that we may have at least one
to give us the correct answer.
X
future President in
embryo in this knew it was in you. I must con¬
Probably all the banks and all very room and I am sure there are fess that 'undecillions'
don't sound
the safe deposit vaults as well as other
aspiring boys and girls in like much, but we must build our¬
warehouses in the world would this class room
who, when they selves up to absorb 'undecillions*
not be large enough to hold such are elected to
Congress will want mentally the way we have 'bil¬
an
unparalleled quantity of metal to know how far they can
lions' so that we will not trem¬
go to
money—especially if it existed in spend, spend, spend and to tax, ble or faint when

'undecillionsf

the form of Pennies.

tax

and tax, their constituents for

are

mentioned.

Children

I

think

all the nice things like
tongue in my cheek,
pensions, you have given me quite enough
there is just one other conjecture old age insurance, free medicine,, answers this
morning. The class
which only the hard money advo¬ doctor's care and everything which is dismissed for the
day becausecates (who are known to be de¬ they,
the politicians, think will I suspect that some of
you will
win more votes for the
vout readers of the
party in want to get some fresh air and to
"Chronicle")

With

can

my

answer

and that is this:

if the

dollar is valued at 59.05 cents

wouldn't

120

shiny

coppers

for

two

real

estate, commodities

on

dollars

of

why

securi¬

or

Q.E.D.

the

Heads

as

familiar to the Gray
William Jennings Bryan's

age

Townsend's $200

month

a

lieve

what

the

total

of

interest

would be if the 1920

money

anyway, please copy these
numeration progressions in your
note

book

and

will

ever

want

was

continued

com¬

with

mathematical

of

nobody
any
of

course,

to

keep

know

story

had

cellar

a

green," but

do

full

he

your

of

you

want

pay

off

Great

Britain's

debt,

and maybe Paul Slater in
the back row, will pay off France's

Belgium's national debt.

Do

you

in

Congress,

heart

glesworth, who said that the

able

to

build

Co., might not be
a

new

bined

any

remember that smart
was

boy
it Richard Wigcom¬

Federal, State and Muni¬
debt, including corporation

multiplying cipal
enough to do the and private debts in this country
computing job for that indispensa¬ added up to something over $600
machine
ble

giant

Penny that grew
"just like Topsy."

and

grew

billion and that my

ISokolsky

said it

friend, George
Mr. Wiggles-

was

—

a

and

children that will be remembered

of

Internationalt Busi¬

all

Fathers

and

Besides, Mr. Thomas L. Watson,
the able directing mind, hand and
the

Mothers,

supreme

her

"long

discharge

of

for

the

gave

about

fathers and mothers, one
like Sheridan Smith will

to

made

who

the

you are as benevolent minded

as

woman

think

of

to

come

if

even

exactitude to 1950.
national obligations and Johnny
maybe there aren't any words Palmer
sitting there in the front
English language expressive
row, will just love to
liquidate
enough to designate the 1950 dol¬
Italy's debt and while Herbert
lar figure after you reach destina¬
Russell would like to

Machines

who

not

And

ness

simple but appealing story of the

sacrifice,

to

Mite"

complete
if
reference
was
not
made to "The Widow's Mite" that

for

what

Widow's

This article would be far from

vast accumulations of
money
himself or herself and would

it, if

pension handout.

"The

Keeper?

But

as

fallacious 16 to 1 silver battle cry

Dr.

play golf this afternoon! !"

Are We Our Brother's

again the foregoing Quiz
these
modest, unassuming Penny

sound

may

power.

pay

merchandise,

tion.

Feb.

class

you

—

Europe, Atlantic Charter, Atlantic
Pact, JVIarshall Plan and all that

end, might

earth

con¬

broker.

Charles

Sons died

the

side

in the

Harry

by the exchange

It

speaking,

the

encompass
the moon.

putation

1949.

Perry Francis, member of

sidered

&

late

Dempsey-Tegeler &

Co. ceased Dec. 31,

the

A.

It is almost inconceivable to be¬

of
in

ex¬

terest accumulation of the
original
100 cents placed end to

or

following firm

P.

larger.

Then

Exchange
Weekly Firm Changes

C.

or

would tell you that the
magnif¬
icent computation would fhcrease
the grand total 100 times

ties?

New York Stock

23.

liked

does

Figuratively

Louisiana

Trust

Frank

funds bought Great Northern Pre¬

breathe and think and talk

we

"Billions"

pert

was

the

bership

38,700 shares of Chi¬
Rock Island & Pacific. Five

also

Chair¬

and social circles in New
Orleans.

cago,

was

Crouse,

Committee.

ORLEANS, LA.

widely

purchased

Ohio

in

of

Scharff & Jones, Inc.

Goodrich

transactions

issues.

B.

General

Dinner

The Rails

evenly

and

of

Com¬

address

Charles

Transfer of the

road

ninety's have passed away forever

out

us

until

men

principal

the

NEW

pur¬

concentrated

and four in United States
Rubber.

Over-all

Ex¬

Ladd Dinkins Joins

times

with purchases and sales
scattered
other
than
three
additions
of
United States Steel and
liquida¬

Now you

divided into

gay

Croesus had put 100 pennies in the

four

divided

the

and

age

interest bank at the start—the

volume

four

were

in

children, I want to bring
impromptu reply to the complain¬
you up to date so that you will
ing Democrat who thought that
know your onions when
you see
the House appropriations of that
them and how
many are growing
day (1881-1891) would break the
in the garden and on
your Father's
country: "I would have the Sen¬
farm and if you will be
quiet, 1
ator know that this is a billion
will explain the
enigma
known as
dollar country." '
"How Money Grows."
I
want
you
How old fashioned "Czar" Reed,
to know all about the
Capitalistic
as
the
famous
speaker of the
system for if you do, you can't
House was then called, would be
lose.
if he was standing in Mr.
Harry
Numeration of money or
S. Truman's shoes today demand¬
any¬
ing not one but billions without thing is simple and understand¬
able if you follow the rule.
number for his next year's
budget.
dollar

get

or

dreams.

come

Yes, I regretfully admit that the

to

Congress
misappropriate oodles

oodles of

bubble

ing:

How
many
of
you
recall please
Speaker Thomas Brackett Reed's

pur¬

almost

was

although total

that of sales.

chases

the

Crouse

Mr.

by

and

turers.

and

evening.

Tulane

featured

ination of the issue
by one fund.
Two trusts each purchased
Colo¬
nial
Mills,
Pacific
Mills
United

Stock

Scharff & Jones,
Inc., 219 Carondelet
Street.
Mr. :v Dinkins
is

sold

and

Miss Stickney the teacher speak¬
class

million

just
week

a

has time to

of the Miracle of Interest

power.

debt

own

hock for

Study

Suppose, for purposes of con¬ "billions" without our consent or
Johnny Palmer Distinguishes
will join local versation, this savings account had approval.
Himself
Exchange members, bankers, and been started with just one
solitary
So after "billions," which are a
corporate executives in
Johnny was seen to raise his
honoring 10-cent piece, the result would commonplace these
days, for do we
Harry
A.
right hand.
McDonald, the new have increased the sums yearly 10 not
give "billions" away by the
Chairman of the Securities and times the total for the
Oh, yes! Johnny Palmer, will
modest but bushel basketfull
to help get the
Exchange Commission, who will unshrinking Penny.
you please stand up and give the
European countries to be on

Textiles

of

of

dis¬

ograph-Multigraph,

offsetting this

Securities

also

eliminating
these
stocks
from
holdings. There were two sales of
Burroughs and no purchases.

were

Na¬

funds

each

The

of

Dinkins

Remington Rand

Textiles

&

two

in

managements

Ex¬

Evans,
Co., At¬

were

Buying was concen¬
Philip
Morris,
four
adding 10,700 shares. Three

trated

Curb

there

of this issue.
trusts

accepted

A.

Evans

mission. These

rep¬

Tobacco, but
portfolio additions

no

York

Association

Securities

eliminations

of American

there

New

Clement
A.

total of the

sum

The

change Firms; Edmond M. Hanrahan, former Chairman of the

total

a

14,675 shares, six of which

resented

the

by

Selling in the tobaccos was fea¬
tured by Liggett and
Myers, eight
of

of

Tri-

Corp.

managements

the

girls, perhaps Mary Rose
Sheridan,
will if only as a
public spirited
act, want to pay off our
country's

Penny

A Class Room Scene for the

Kentucky,

Dealers, Inc.; Albert T. Armitage,
From 1793 to the end of
1947, these days—called "billions," fol¬
Coffin & Burr,
Inc., Boston, Presi¬ the United States Mint had turned low after "millions."
You should
dent of the Investment Bankers out
17,572,542,800 shiny one-cent readily recognize a "billion" dol¬
Association of
lars
when
America; Benjamin pieces; and during the fiscal year
you see it, for right at
H. Griswold,
III, Ale?:. Brown & 1948, an additional 571,942,500 new this moment your Congress is
Sons, Baltimore, Md., President coppers were minted for later
spending the Taxpayers' money by

the

noted

at¬

Exchange;
Truslow, Presi¬

Association

deliver

selling by

on

to

lanta, Ga., Chairman of the

California. In addition to the
centrated

been

of

Our Billion Dollar Country

Haskell, Vice President

Clement

Delhi Oil Corp.,
Richfield, Stand¬
ard
of Ohio
and
Union Oil of
con¬

na¬

Exchange. To date

Adams

dent of

26,300

shares. Acquisitions
by three funds
totaled only 2,900. Six
companies

21st,

Dinner

have

state

Now

of the New York Stock

six

Francis

There

two

Shoe

MICH.—Many

February

funds totaled
11,300. Also increas¬

half

and

Brake

bought by three funds.

Tuesday,

home

contrasts with the

three

dustry will gather in Detroit

each

were

purchases

Locomotive

However,

DETROIT,

bought by two managements.
Most heavily sold issue
among

Nine

Brake,

tional leaders of the securities in¬

small

beam and Square "D"

Air

The Indispensable

selling

To Hold Annual Dinner

Radio

Corporation;

trusts

Detroit Stock Exch.

companies. There were
only three
additions
of
Philco
and

worth who gave him those
figures
publication in the New York
"Sun." Well
surely one of yo»

The Widow's Mite and

Dela¬

solitary Penny's might and

four

2D

for

Investors Management Co.
group.
equipments were also

Pullman.

investment

(733)

17

page

bride's

American

The

from

CHRONICLE

worthy

much

see

FINANCIAL

complete elimina¬
tion of 21,000 shares of
Pennsyl¬
vania was made
by the Share¬
holders Trust of Boston and the

Westinghouse

activities of the

Continued

that

liquidated,

which

eliminations.

note

Railroad

9,800.

were

and Hudson Co. It is

ware

of

&

each

Gulf Mobile and Ohio and

Westinghouse

among the major electrical
equip¬
ment
concerns
while
General
Electric was weighted on
the sell¬
ing side. Nine managements

chased

COMMERCIAL

holdings of Southern, while
disposed of holdings of
Pennsylvania, Northern Pacific,

like

a

Ameri¬

on

THE

dated

was

bought by six trusts, but
number

)

cherished

as long as
"Ham¬
Shakespeare's greatest play,

let,"
is

read

and

recited.

In

the

Sav¬

iour's words:
"And Jesus sat

over against the
beheld how the
people cast money into the Treas¬
uryi and many that were rich cast

Treasury,

and

in much.

"And there

came

a

and she threw in two

made

a

all

widow,

farthing.

"And

he

disciples,
Verily I
poor

poor

mites, which

called

and

unto

said

him

his

unto

them,
say unto you, that this
widow has cast more in, than

they which have cast into the

Treasury.
"For all they did cast in
of their
abundance; but she of her want

did cast in all that she

all

her

living.

had,

even

30

THE

(734)

Continued

from first

As

"The

there is

plain fact that the time-serving politicians are from
their standpoint all too often right. At least political
success
at the moment seems best sought by such

.

.

clearly indicate that unless
people as a whole

of history

lessons

their fellow men, to re¬
gard them as individuals endowed with human dignity, to
treat them with justice regardless of the terms of any laws
or rules—that unless there is such a basis for the relation¬
to have

respect for the rights of

ship between men—there cannot be true freedom,

each for himself

sional

for the

made

only alternative method for keeping such a society func¬
tioning is through laws and decrees possessing such detail
and providing punishment so ruthless and extreme as to
wipe out human liberties.". . .
"Government is like fire. If it is kept within bounds

people, it contributes to the
welfare of all. But if it gets out of place, if it gets too big
and out of control, it destroys the happiness and even the
lives of the people.".
"But throughout the world evidence accumulates that
man's situation is not static and that if he is but partly

by family groups could
subject to attack. Also,

the

day which

many

devotion

to

a

people who

as
sorts of

This

for

The

people of this country—and of many other coun¬
badly in need of an iiif<el|^fetual cold shower!

tries—are

all that Mr. Stassen had said, we and
millions other like us would applaud heartily and with
little

or

no

of a modern people's
modern free man's government which,
with skill and ingenuity and flexible adaptiveness, con¬
stantly sets up those new rules and new limits to keep the
game of life of free men fair, to ease the plight of those
who are ill or unemployed or aged, but never to so burden
the producer, or so reward the slacker, as to undermine the
virility of an economy."
a

fMi-

do not
know. Possibly Mr. Stassen doesn't, hut to us he seems
to have changed the key in the middle of his concerto.
Precisely what this sentence

means

we

Senator Ives

then

there

is

Senator

though

believed to reflect sentiments closely akin to those of the
Dewey element in the party, which is giving evidence in
Albany of deep dissatisfaction with the recent generaliza¬
tions of the national body of the Republican party-gen¬
eralizations which, despite high-sounding words and strong
phrases, left a good deal about which one must guess. But
let us see what Senator Ives finds to say on Lincoln's
birthday. Here are some of his sentences:
"It is most unfortunate for the country as well as for
the Republican party, that too often we have not been
receptive to new ideas. Too often we have not exhibited
that open-mindedness which characterized Lincoln. The
voters of this country have repeatedly told us so. They
told us in 1932; they told us again in 1936; they repeated
it in 1940, 1944 and 1948.
.

"Oppose

we

must. But

.

.

we

"To attract the support

must propose, too.

essential to

our

success, we

Republicans must stand for things. And we can stand for
things without being a 'Me-Too' party.
"Our great task is to combat the reckless spending, the
glaring incompetence and the socialistic programs of the
Fair Deal. In doing so, we must show that we possess

genuine solicitude for the welfare of all the people.
"We must point the way to the maintenance of our free
society while indicating the steps to be taken to improve
continually the lot of the ordinary man. The mighty chal¬
lenge confronting us is to provide the means for the rec¬
onciliation of the ever-growing demand for security with
the even more vital requirement for the preservation of
freedom."
Does not the Senator

others

understand, and do not the

understand, that if the lot of the ordinary

is to be

man

during
the past century or two through the workings of a
free economy operating on its own? And do they not
know such security as may be obtained in this un¬
certain world is and always will be a product of that
same

improved it will

come as

it has

come

entered, some form of
separation or paring could occur.
The lamp
division of the com¬
yet

been

important
con¬
earnings of
Electric, but is now of

was

pany

an

ment

Electric

General
been

named

suits

than

in

leading

our

In recent years, sev¬
have

suits

in

been

process

examination

An

the market action of the

of

stock

relation to the suits,

in

therefore,
particularly enlightening.

is not

Telegraph

American Telephone &

Company
action

Anti-Trust

less indefinitely to quote Lincoln Day orators, who
lip service to American tradition, and then cast all
the fat in the fire by wincing and relenting and refraining
in an effort to appeal to those elements which appear to

separate, competing units. West¬
ern Electric, as the principal man¬
ufacturer of telephone equipment
for

be

alleged to

the Bell System, is

trust which is fostered by its

a

ownership by the Telephone Com¬

The suit was filed on Jan.
in the Federal District
Court in New Jersey.
The mar¬
ket reaction to the filing of the
suit was not as pronounced as in
the other important cases studied.
pany.

1949

14,

end of the third day of
following the announce¬
ment of
the suit, the stock of
American
Telephone and Tele¬

By the
trading

from

declined

had

graph

149Vi

to

143,

points

6lA
or

loss

a

of

4.2%, which is considerably less
than

in

anti-trust

earlier

This

suit

prove

may

to

be

a

long, drawn out legal matter with
the Telephone Company defend¬
ing its position to the utmost.
Obviously, the progress of such a
suit or when or what will be the
Much

depends

on

suit
pushed by the government.
which

with

vigor

the

the

is

Pont

Du

attacked

in

has been
"bigness." In an

frequently

for its
the

Pont

acknowledge that while

any

and

allied

still

sells




one

than

more

are

greater than for

of the
7,000 in the chemical

other

company

products
only

cent of the

it

about seven per¬

total.

pointed out,

industry,

Furthermore,.it

it faces competition

price

in which they are

com¬

could

joint

efficiency

with

interest

all

take

the

Public

is

outcome

of

in

this suit

greater ex¬

a

other

any

NOTE:

third

the

years to re¬

many

interest

in

EDITORS

ing

other

distributors

impossible to predict

has been aroused to
than

to

rule

same

to

efficient

may

solve.

(New

Company

applied

is

suit.

Oil

be

suit

tent

joint

cost

prices

and that the

and

General Motors in Kinetic Chemi¬

a

low

and

raise

would

this

cals, Inc. General Motors, in turn,
has

which

well. The eventual

as

with

owner

carrying its
in extensive
it empha¬

is

public
in

scale

large

when numerous company

60% interest in Remington

a

its

consumers

records, spme dating back to 1915,
were subpoenaed. Du
Pont holds
a 23% interest in General Motors
and

the

cheaply,

investigation
began in August

Arms. It is also

the com¬

public. It says that to do
away
with the central buying,
manufacturing and other facilities
which enable it to sell good food

Pont, they are larger in

du

of 1948,

pending

The forego¬
four install¬
presenting

of

Jersey) in the Ethyl Corporation.
Holdings by members of the du

ments in which

Pont

ing installment will appear in the

interest in United

"Chronicle" of Feb. 23.

17% of the com¬
also under ex¬
amination. In all, sixty-two com¬
stock,

The conclud¬

States Rubber,

said to aggregate
mon

are

we

Mr, Vultee's article.

family in all these compa¬

nies, together with their personal

With Waddell & Reed-

were

(Special to The Financial Chronicle)

included in the in¬
vestigation, designed to trace the
activities of the du Pont family.

BEVERLY

panies were

C.

dell

Reed,

&

CALIF.—

HILLS,

Walter

is

Wurster

with

Inc., 8943

Wad¬

Wilshire

Blvd.

Charging it as the largest in¬
empire in America, the
Justice Department filed suit on
dustrial

June

With

Bailey & Davidson

30, 1949 against the du Ponts

individually,

the

Pont

du

(Special to The Financial Chronicle)

com¬
sen

is

with

Bailey

Davidson,

&

2133 Fresno Street.

Delaware

and

Securities

tiana

,

FRESNO, CAL.—Glenn H. Niel¬

together with General Mo¬
tors, United States Rubber, Chris¬
pany,

.

.

.

Realty and Investment Corporation.

appeared to

Basically the attack
centered

be

on

the

Floyd A. Allen Adds

family group

with the corporations

acting

vehicles of the alleged

as

(Special to The Financial Chronicle)

the

trust.

LOS

ANGELES, CAL.—Dwight

Leslie has been added to the staff

Because of the advance knowl¬

Floyd A. Allen & Co., Inc., 650

edge of the investigation, the fil¬

of

suit against the group on
June 30, 1949 was no surprise to
the investor public. Consequently,

South Grand Avenue.

ing of

a

appreciable

no
was

evident

the

of

market

in

the

principal

defending

the

CAL.—Gerald
Blyth & Co.,
Inc., 215 West Sixth Street.
LOS

cor¬

M.

*

The outcome of this

most

suit, which

important

in

aims

of
are

the

(Special

Government

of

at

of

du

able

to

<

& Co., 618

Wykoff
Spring Street.

appears

Pont

dered, although the
be

Chronicle)

Financial

Edgerton,

South

primary target,

erations

to The

ANGELES, CAL.—Luther
Welch has been added to the staff

obscure. The family

however,

with

LOS

to be the
although the as¬
sociation between the companies
is also attacked. Some separation
of the joint ownership in
sub¬
sidiaries
may
occur.
Also, • the
separation of some chemical op¬
group,

is

Egerton, Wykoff Adds

history of the Sherman Act,"

this time

ANGELES,

Burrill

"one

cases

impossible
to
forecast.
The
scope of the suit is so broad and
the allegations so complex that
the

& Co.

(Special to The Financial Chronicle)

prices

the Attorney General called
of

With Blyth

reaction

stock

porations.

the

E. I. du Pont de Nemours & Co.

big¬
used

the

to

be smaller in total size

may

to break up

company

to

sizes

is

pay

and

contended

also

It

the company

of

final decision cannot now be pre¬
dicted.

the

force

a

as

seven

advertising

The formal public

cases.

Thereafter, the stock soon recov¬
ered substantially all of the loss.

more or

have lost their real interest in American traditions,

tors

Standard

this

against

major utility enterprise is aimed
primarily at the company's equip¬
ment
manufacturing
subsidiary,
Western Electric Company which
it seeks to break-up into three

its total sales

could, if there seemed to be profit in it, continue

into

The

peting.

anti-trust

more

of

any

companies.

du

Victims

business.

its

probably

has

attacks

P.

discriminatory

seeks

case

that, while many of the competi¬

the field

importance.

January-February,
1949 issue of du Pont Magazine,

The People Are

one to fifteen major producers
practically all of the 40 prod¬
uct lines that make up most of

in

General

lesser

yegrs.

regional grocery
firms, to separate the manufac¬
turing units and eliminate the
central buying affiliates.

by

than

somewhat

nine

preferences from dealers or man¬
ufacturers.
The
Justice
Depart¬

tributor to the prewar

article

system?

One

Al¬

final judgment has not

a

simultaneously.

Ives, who is commonly

suit

&

A.

obtain

to

And Investment Values

eral

And

of

pany

the Sherman Anti-Trust Act.

in

time

a

suit

present civil

ness

Anti-Tiust Suits

reservation. But it is not all. He also called for

capitalism and

fifth

the

retailer is

anti-trust

an

in violation of the anti-trust laws.

were

"the evolvement in this industrial age

in

The current

free, he will either gradually win full freedom or slowiy
Now, if this

Pacific

suit is an out¬
growth of an earlier criminal suit
in which the company was held

.

lose all his freedom."

leading food

defendant

*1

8

and

Tea Company

consider doing.

Continued from page

The

necessary.

Atlantic

Great

The

things which ordinary people would not ordinarily
The

constitutes

what

pany's expressed intention of "re¬
sisting this action," the outcome
may be years in the making.

willing,

are

creed, to do all

then be
clearer

certainly is very im¬
portant, but in view of the com¬

somehow

good

a

of

matter

a

most

case

most disturbing. It is clear that
attained the status of a

are

of

"bigness" might be

they alone must solve
with safety be left to the profes¬

can

has

religion with
a

definition

politician. It is the parallel disclosures being
in the course of the much publicized spy trials of

communism

and under the control of the

.

scope
of the Sherman Act
might then be broadened. Family
corporations or those dominated

life which they and

of

lems

Should,

whole.

a

the

molly-coddling of the rank and file of the people who,
from all appearances, have fallen victims to some sort
of disease which leads them to suppose that the prob¬

code of conduct which causes

a

depressing is the

What renders all this the more

political party that will try to delude them into thinking
that someone else is going to pay the tax burdens, they

as

however, the attack on the mi¬
nority investment holdings of the
group
be upheld, the develop¬
ment
would
be
serious, in the
sense
that
if
the
minority in¬
terests were held to
be illegal,

which will, despite ail the
"isms" and all the foreign fine talk, bring whatever bless¬
ings the future has in store for us.
country what it is, and

this

We See It

should look elsewhere!".

operations

and social life which has made

the kind of economic

in

page

Thursday, February 16, .1950

FINANCIAL CHRONICLE

&

COMMERCIAL

defend

may

be

With Mitchum,
SAN FRANCISCO,
C.

Tully

or¬

chemical

&

Street,

company may

its

Parmenter

I

rffllnd

is

Co.,

members

CI-Anlr

CAL?—Derek

with

405

Tully ; V;

Chronicle)'"

(Special to The Financial

Mitchum,

Montgomery

of the Los An-

FvnhancfP

Volume

171

Number 4882

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

(735)
Continued from
page

2

Secuiity I Like Best

also parts of Cape Cod and
Ports¬

mouth,

N.

revenues

H.

percent
from

EDWARD

of

elec¬

Houston, Texas

little less than 40%
With the recent issu¬

common

mon-stock

stock, the

equity

is

over

of

future

tion

of

include

high

Cambridge

mutual

the

company

into

gas

the

the

of

use

dustry,

manufactured

to

produce

amount of gas, and
in cost is

the

recent

So

that

same

look

this

method.

new

This

Edward

method

successfully for the
past two years by the Consoli¬
dated Gas Electric Light & Power
Co. of Baltimore and no technical

ducing

expected in intro¬

are

this

method

hew

Cambridge

With

area.

development, natural
is

company

not

in

at

new

would

gas for this

improved

if

last

The

na¬

so comparatively better than the
companies serving adjacent areas

which

to

produce

to

and

coking method

be

England.
As far

electric rates

as

are

con¬

cerned, the residential charge for
the

first

100 k.w.h.

in Cambridge

is only $3.15 compared with $4.92

right

across

Boston.

such

the Charles River in

With

comparative

rates

this, it does not seem
probable that the company's rates
should be
questioned too much

though they should earn ris¬
6% on their net plant ac¬

ing

count.

According to

calculations, if
able to earn
6% (which it should seemingly be
company

able

to

do

my

were

soon)

very

its

on

net

figures indicate
$1.85 to $1.90
on its common stock. My estimate
for
this year indicate that
re¬
ported earnings will be between
$1.50 and $1.60, which makes the
plant account,

that it

my

would show

dividend

rate of

90c

appear

considering

the

servative
fund

a

year's figures
able

than
...

showing

87%

a very

when

of

every¬
came

con¬

financial

in¬

stitutions.
The

original capital of $150,000

the

initial

portfolio

was

pro¬

vided by the same group of Texas
businessmen who founded Texas
Fund
and
who
now,
with the
an

experienced securi¬

ties

analyst, comprise its manage¬
First public offering was
made October 4th,
1949, with Blue
Sky qualification only in Texas,
and
an
opening
quotation
cf
$10.25 bid—11.05 asked.
ment.

enthusiastic—just 3V2 months
on January 19, 1950, Texas
the

million

roughly
It has

dollar

approximately

the

$11.02

now

York,

last

and

quotation

bid—11.91

asked.

California,

Maryland and Louisiana
shortly be qualified in a

remark¬

is

been qualified in New

Massachusetts,

and will

number

of other states.

compared

The

portfolio

utilities,
producers, gas trans¬
missions and distributors, chemi¬
cals, banks and insurance/selected
manufacturing companies—every
oil

important to the util¬

ity. stockholder is the fact that the
directors and officers of this

a

shares

the last

of

stock, according to

prospectus, which is

refreshing after looking at
the

meagre

holdings in
"blue

some

very

officer-director

in

the

development

and

introduction of natural gas in the
New England area.




major

a

operation

Freely admitting
degree of bias, I
Texas Fund has

field.

well protect the public stock¬

lively, vigorous,
enterprise — each one

in

this

section of the country.

some

all

the

make

by the officers and directors

holders

a

either domiciled here
Southwest
or
conduct¬

the

ing

Incidentally, this large holding of
stock

them

of

company

in

of the so-called

chips" in the utility

gas

growing

combined hold almost 140,-

pany

and

one

com¬

E.

highly

a

a

up

a

most

desirable

considerable
that

full measure of

ingredients

needed

appealing

to

and

investment

se-

| curity, both for the investor

and

1

for the dealer.

It presents a

fully

and

oned

selected

well

value

the

the

twelve

Electric

Corporation is in
bankruptcy
and
the
Trustees
Reorganization, which has

Plan of

recently

been

recommended

by
the SEC, calls for the
organiza¬
tion of an open-end investment
trust, the shares of which will be
given

to

the

holders

of

care¬

chaper¬

spread of what its manage¬
ment believes to be the outstand-

secrecy

and

the

5%

5Vz% debentures and the 7%
preferred. The junior preferreds
will participate should the asset

the

cover

be

sufficient

bonds

and

the

As of

Central

States

taking

as¬

Electric

its

subsidi¬

tral States debentures is approxi¬

mately $20,400,000, leaving about
$17,000,000 for reorganization ex¬
penses,
bond premium and the
junior securities. Under the Plan*

bonds

premium,
million

to

are

which

receive

approximates

penses may come

a

ex¬

to another mil¬

dollars, leaving fifteen mil¬
68,800 shares
about $220 a

of 7%

preferred,

share.

The claim of the

ferred

at

is

there
of

5%

a

dollars; reorganization

lion dollars for the

now

or

and

par

$228

share.

a

7%

pre¬
as

of

Thus,

if

arrears

no
change in the value
underlying assets, on the

Central

should

an

States

receive

open-end

which

about 40%

investment

should

be

worth

higher than the pres¬
price of the preferred.
$37,400,000 of assets

the

Central

States

are

Electric

subject to the vicis¬

offset

by

the

discount

which the preferred is

the

nature

substantial

in

the

and

the

of

of

subsidiaries
shares

United

of

Light

selling and

the

portion

at

assets.

the

are

North

in

A

assets

cash

Ameri¬

&

Railways,
and various utility
operating com¬
panies. By and large, such shares
in
our
opinion are reasonably
priced and do not reflect boom
valuations.

In

addition, the Trustees are
prosecuting a substantial lawsuit
against former officers and direc¬
tors

which

such

have

a

the

the back of

on

that every

so

proxy

with

free¬

a

which

the

may

result

in

satisfying

rules

to

an

company

of

security

ing

the

his

holder

who

has

enterprise by turn¬

money

to

over

the

stewardship

of others deserves
better treatment than this. If the
Frear Bill is
enacted, substantial
will

have

to

obey
minimum standards in
permitting
fair

a

exercise

of

the

stockhold¬

ers'

example.
A very large
has a bonus plan ac¬
an

board

tors

(none

of

in

each

what

year

independent

the

ment.

plan)

by

it

has

is

the

moderate

a

and has been

reasonably
the
acquisition

Since

securities

under

consideration

the

of

plan

the

plan

these

securities

are

once

each

Thus

year.

member
take

sale

any

The

Frear

Bill

not

the
buying and selling of
their companies' stock
by officers,
directors and large stockholders.
It would

require the filing of in¬

selling.
the

To

facts

merits

who

anyone

of

of

obvious.

buying and

corporate

this

knows

life

the

requirement

are

With its

to inside

access

information, management is in
key

position

to

foresee

a

market

in
the
company's
They are in a position to
anticipate these movements and

couldn't

without

It

seemed

law

wasn't

clear

situation, and
arise
new

keep

undue

the

That

is

without

pur¬

buyer

company's
vestors
what

one

investors.

have

the

the

his

These

right

insiders

of

to

to

that

a

all

law

promise

the

in¬

having

bail out wholesale while

small

answers

to

are

of

of

the

Act

which

tion

to

The
to

stated

formation.

require
out
and

The

of

Bill

the

Securities

(Special to The Financial
Chronicle)

PASADENA, CAL.—William M.
Goldsberry has been added to the
staff

corpora¬

abuse

by

trading.

inside

of

the

law

is

in¬

doesn't

proof that inside in¬
used to get a profit

purchase

and

is

sale

or

John

M.

Bank

Barbour &

Co.,

Bldg.

With

automatically

unless

the

S. E.

Commission has
classes

of

Goodbody & Co.

(Special to The Financial
Chronicle)

BOSTON, MASS.—Clarence E.
is with
Goodbody & Co.,

Smith

State

Street.

with

In

the

past

he

Smith,

Barney & Co.
G. M.-P.
Murphy & Co.

and

C.

J. O. Kroeze Co.
Opens
JACKSON, MISS.—J. O. Kroeze
has

formed

with

offices

Street, to

J.

O.
at

Kroeze
4051

Co.

engage in the securities

business. Mr. Kroeze
with

&

Redwing

Scharff

&

was

formerly

Jones.

sale

six months.
re¬

With H. M.

particular

OMAHA, NEB.—John
has

become affiliated

Byllesby
exempted

insider trading

Byllesby Co.

(Special to The Financial Chronicle)

has

Exemptions
The

of

Citizens

that

of the law

by rule exempted the
type of transaction.

certain

with

provi¬

Exchange

the

short-term

was

profit

is

profits made

purchase within

coverable

exempt companies and
from its provisions when¬

On J. M. Barbour Staff

was

Frear

But

any

formation

they arise. The Bill
Commission ample

we
think it consistent
the public interest.

50

purpose

prevent

the

controversial

permits

in

what

generally

recover

insiders

is

most

the

extends

sion

know

doing.

the

aspects of
it

be

can

holder

entitled

One

problems

as

ever

news

insiders

we

to

power

in the offing still has
not broken. The least the investor
is

don't

and

all the problems
that
under the Frear Bill.

the

persons

is left holding
big bag; they are vulnerable
having insiders buy in when

good

make

can

We

in¬

information
to

I

seen

arise

gives

are

vulnerable

are

We hope to
with them and
from working

up

period.

know

doing and
appraise for themselves the
significance of insider trading.
Without

pre¬

and

Even when
passed, the Bill would
not come into
operation for six
months.
We hope to have
much
of the field cleared
in that

to

vestors

new

time

unnecessary hardship.

Thereafter, the

Every

the

apply to
adopted a

However,

reservation.

haven't
will

keep

and

know

the

that

problems.

be able to
to

all

profit

that

us

to

we

exempt it.

dealt with

against them.

to

to

locked

a

return

intended

rule

be
at

to

that

stocks.

to trade

sell

having

movements

chase by a director is from one
of his company's investors.
Every
sale makes the

and therefore

participant would

cases

pre¬

(either the. last bonus
to come)

one

and

sent

would

formation about such

the

the

a

management
must
within six months of

purchase

or

by

of

place

profit to the corporation.

Stock

in

ren¬

"bought" by the participants

disenfranchise

Own

of

is

services

in

Transactions by Directors in

ap¬

dered, the securities have—le¬
gally, been "bought." Now under

checked control of the
proxy ma¬
chinery enables them at will to

in the law.

plan

approved

a

public secu¬
rity holders while other manage¬
ments obey the rules laid down

the

manage¬

of

been

stockholders,

of

given to

of

history

that

decides

be

members

The

direc¬

members

amount

company's stock will

deserving

of

whose

participate

shows

as

give

me

franchise.
It will eliminate
the effect of the present situation
where certain
managements' un¬

their

pro¬

these

cases

Let

committee of the

plied.

financed

them.

cording to which

one,

The

difficult

cover

have met

you

ratify itself.

some

recovery. Any recoveries on this
lawsuit will go toward

not contemplated
by this
We
have
drafted

vision.

management could perpetuate and

Cor¬

situdes of the market, neverthe¬
less, I think that the risk is more

by

printed

wheeling

the

than

case

became

securi¬

of

one

check

the

poration

itself

acts with

own

endorsed

7%

While

gamut

courts during 1950.

we

at

veil

a

perpetuate

the dividend check

organization,

trust

of

proxy was

insiders

preferred

behind

where

consummation of the Plan of Re¬

ties- in

proxies

We

is

the

ratify its

to

aries, American Cities Power &
Light and Blue Ridge, at their
liquidating value, were equal to
$37,400,000. The claim of the Cen¬

the

We think

case

the

as

op¬

vent

February 3, 1950 the

of

not

proxies in its hands.

first

preferred.

an

record

value of the estate at the time of

consummation

can

companies

Central

can,

contend

of

asset

months.

Unterberg

States

includes

about 50 stocks—electric

I believe is

C.

ent market

present

zation

next

lion
response was prompt

passed

reali¬

within

Corporation,

for

are

and

con¬

of

should

permit

and

respected

there

which

sets

best

this

forces at work

is the South Texas National Bank
of Houston, one of Texas' oldest

total asset value is

Another interesting point which

may

investors

practices of the mutual

$1,300,000,

sort.

of

reception from

Acquisition cost is
the standard 7V2%
(with 5% to
the dealer), scaling down to 3% on
a $100,000
purchase. The custodian

with many other properties of this

000

warm

mark in size, and as this is writ¬
ten, in early February, the Fund's

teresting to note that in the last
19 years earnings available for the
parent company's charges were
lower

economy of
Southwest would

industry.

Fund

of

and

a

the

the

value

security is ap¬
proximately
$220 a share

two

later,

the company's operations, it is in¬

never

these

Texas Fund, Inc.
In its set-up, Texas Fund
forms
with
all
the
more

and

very

stability

the

Investors'

conservative.
In

of

that

behind

and

own

"natural"—and that it would

a

counsel of

the

in

asset

often

are

management living

is

"spe¬

a

and without

on,

powers of attorney giving
discretion to the insiders. A

full

cial" situation

the

where. From this conviction

as

even

up

conservative

natural gas if
brought into New

it is

and

meet with

benefit by

when

truly

of Texas

"Boston-type" mutual

a

make

Texas

considerably
higher cost.
In other words, the
company is in the remarkably en¬
viable position of having the low¬
est cost for manufactured gas in
its area and being able at any
time

out¬

confining its investments to
leading stocks in those industries

at

gas

its

stock will
appeal.
will run the

mon

the

matter

all, but

Corporation 7 % preforred
stock currently selling at 155.
I
believe this

voted

Proxies

the moment is the Central States

group
of
Texas businessmen early in

1949 that

fund

the coal

into

come

convinced

young

tural gas never came to New Eng¬
since its rates would appear

use

the

places and at inconvenient times.

Electric

companies has

combination

factors

land

which

took

portunity to vote for or against.
Meetings are often held at remote

security that I like best at

achieving the broad pub¬
lic acceptance it has long merited.

a

be

and

The

started

necessity.
In
fact, it appears to the writer that
the selfish interests of the com¬
pany

pros¬

be

Co., New York City

,

Southwest has

Rotan

mutual investment

the

this

Judge

Richmond, Va.,

Laws-The Fieai Bill

unquestion¬
ably kindled the imagination of
investors in all parts of the coun¬
try. During those same years the
basic principle of cooperative in¬
vesting through
the
shares of

has been tried

difficulties

the

and

approximately 40c

1,000 feet of gas is saved by

per

held in the

were

at

Amending the Secniities

that should
all-but irresistible com¬

Senior Partner, C. E. Unterberg &
,

years

growth

gal¬

per

in

natural

wealth,
perity

the difference

roughly 4 cents

lon.

Court

the

Continued from page 6

quality,

of his dollars,
an

advisement. It is our ex¬
pectation that the Plan will
be
approved by the Court but
that
the junior
preferreds and com¬

return

By CLARENCE E. UNTERBERG

far

regarding

cubic
feet
of
gas
by the oil
method, and it takes roughly 12
gallons of the heavy low-value
oil

the Plan

on

Federal

power

Texas

publicity

It takes roughly 11 gallons
regular fuel oil to produce 1,000

crude

ings
and

bination.

flung national

gas.

of

demon¬

all wrapped up

prove

in¬

The

low-quality oil for
of

already

high on booms
in onb convenient

Fund.

area

production

has

under

to the

accrue

benefit of the junior preferreds.
On February 1st and 2nd hear¬

sions and to ride

reasonable

in¬

vestment

im¬
introduc¬

and, more re¬
cently, the company has embarked
on

the full claim of the 7% preferred
and any excess will

States

(should be 441/2% this Year)> assured gr°wth
and
protection
for
the
buymg

earnings

BTU

which

United

investor who wants sound

simple

very

fast

provement

the

a

developments that hold

promise

area

the

"right-priced" package.
To my way of thinking, for the

job—my choice is that lusty and
growing new member of the

25%.
Recent

of

I find the selection of "The Se¬

curity I Like Best"

com¬

well

area

strated its ability to resist depres¬

ROTAN

Rotan, Mosle and Moreland,

a

gas.

of

ance

Sixty
derived

are

tricity and
from

ing stocks in the most promising
of the most exciting

industries

The

31

Bank

with

&

Co.,

J. Bohrer

with

First

H.

M.

National

Building. He was formerly
Harris, Upham & Co.

32

(736)

THE

Continued

from

COMMERCIAL

15

page

What to Do About Federal

Government Spending
much

should

Complacency

be

will

obvious:

stop

never

socialism.

Thv

1948

election

proved

But

if

cherish

American

the
their

liberty

bills, at their railroad tickets, and
their theater admissions, with a
practiced eye for the tax bite.

people

love

and

A
Consumer Is

Great American

It is

beginning to occur to peo¬
ple that the consumer in the long
is

run

the Great American

They

payer.

Tax¬

discovering that

are

for. America
tion

I

as

if

am

administra¬

this

in power.
There are
in legislative form to

stays

proposals

American people that high, cost of
government

to socialize the natural

resources.

These proposals have one thing in
common—they require huge out¬
lays of money and the most rigid

controls.
It

has

the

been

estimated

that

administration's

entire

as'^outlined

the

gram,

in

dent's State of the Union

if

pro¬

Presi¬

Message,

to be enacted tomorrow, the

were

cost of government would

At

the

present

double.

the
American people are paying al¬
most twenty-seven percent of all
they earn simply to support gov¬
moment,

ernment, Federal, State and Local.
If

the

Administration's
into

went

would

effect,

program

government

be taking almost fifty

soon

percent of what the people earn.
Let the
worker

his

at

in

nessman

on

the

at

keeper

the

tractor, the
lathe, the book¬

man

ledgers,

his

and

the

ask

themselves

half

of

store

housewife

their

the

factory,

or

in

busi¬

her

home,
question: If

tins

income

were

taken

from them, could they
port themselves?

away

Let's

The

in

answer

would be

case

almost

every

no.

Yet this is the prospect we

tery of it.
to

sages

as

a

in

more

revenue

down-payment

on

the

have

been

ident

in

his

as

used

messages

such

"foolhardy," "foolish,"
in discussing pos¬

"unwise"

ment

The

cuts

in

and

reductions in

the

President

cost

drew

of

a

govern¬

taxation.

picture of

the future extending to

the year

2000, and, in all the words em¬
ployed to describe that vision, he
could

find

not

in

room

a

single

place to mention reduced cost of
government

burden.

I

or

relief from the tax

think

he

underestimated

has

the

greatly

American

people's patience. They are in no
mood, if I am any judge, to wait

fifty
*

years

There is

for another tax cut.
a

great awakening oc¬

curring in America. The people are
discovering at last that whether

they
a

pay a

Federal income tax

state income tax

they

and

are

still

or

or

pay neither,

paying

plenty

of

I

to

together with state

local

repeat:

the

war

do

for

cars

be

things

Exactly

tax

of

You paid
on that re¬

$20

frigerator. When you paid your
$6 phone bill the other day, $1 of
it

to

went

lector.
for

the

Federal

col¬

tax

If you got a

your

new handbag
one-fifth of the

wife,

price went to the Federal tax col¬

They

are

at their phone




jobs.

So while you and your

tion

are

are

celebrating

must say

organiza¬

first.

I

But

that you are doing better
bill. Mr. Truman doesn't

than my
like it. He is

looking for tax in¬

not tax decreases.

creases,

Ways and Means Commit¬

by the Administration for 12
long months.
From the present

temper of the Congress, I would
not be a bit surprised if we took
of the

out

weeks.
last

President Truman

the

price

tax

col-'

lector.

If you recently took a rail,
plane or bus trip, one-seventh of
the fare went to the Federal tax
If

cents

attended

you

bought
to

$3

a

the

the

ticket,

Federal tax

baby in the fam¬

ily? Well, for every dollar's worth
or baby
oil or baby powder you
have bought, 20 cents went to the
Federal tax collector.

in

excise

he

will

High cost of govern¬
means high cost of living.

Now, someone may say that
things aren't so bad—at least food
taxed.

Let's

take

look

a

that

proposition. There is a
tional
organization
devoted

studying taxes, known
Foundation.

study

of

but he

taxes,

veto

at

per¬

reductions

such

that

says

bill containing

any

unless

it

is

a

It

as

recently

loaf

of

at

na¬

to

the Tax
made

bread

a

baked

amounting to

an

additional billion

dollars.
The

get

exercise his

to

most

members

what

the

thinking,
tion

veto,

because

of

squarely

living—the
on

blame

reckless

rests

Federal

spending and exorbitant taxation.
means
means

high cost of government
high cost of living, and it
a

lot

of

other

things, too.

as

that you have little hope

tion is in power.

even

The

of

members

that excise taxes
during the war to
sales of goods made

enacted

materials

of

they

and

excise

same

needed

know

taxes

in

still

are

the

those

that

dis¬

couraging sales today and costing
They also know that

people jobs.

this country cannot stand another
billion doliar tax increase. They
know

that

if

these

excise

taxes

repealed, the general stimu¬
lating effect on business and jobs
would more than make
up
the

relatively

small

amount of rev¬
these levies now bring.
So

enue

likely to vote

a

tax increase this year.

But

Congress cannot stem the
forever, nor can Congress
stem it if the American people do
not
express
themselves
in one
great voice at the polls next No¬
vember. We are at the midpoin
of the century in this year of 1950
We are also at the mid-point in
tide

a

crisis

threatening

form o::
one
smal"

our

watched the British debacle under

socialism, know what is
for them if

we

pointed out earlier that a
$2,000 automobile bore $511 in
taxes.

A

lot

of

in store
continue down the

dead-end road the Administration
has chosen.
I have

the

always contended that if

American

citizen

is

given

folks

/

have

been

a

clean-cut choice, he will make a
clean-cut decision.
His self-reli
ance

is known around the world

His fear of big government is the

America,
millions

that

so

and

needs

methods, the
techniques

and

used to sell your
mine.
are

or

prod¬

years

dignity.

that

there

ready to

building

demonstrated

at this point.
Gentlemen,
the
purpose
of
showing that film is to give you
.

to

them

use

effectively and
objectives are:

two

our

One: A direct

training
salesmen; and

for the

Two:

An

taught

internal

program

for

program

all of the employes.
These two objectives are basic.

They

the

are

two

elements

that

in

we

Railway Express are de¬
veloping to the fullest possible

extent.
to

As Mr. Sutton mentioned

you—and

liberty

I

going to take

am

long

so

he

as

to

reorganize

sales organiza¬

our

tion.

What

under the

men

had these

we

direction of

local

operating people at various places
throughout the country.
We in
the

Sales

that

Department
directed
selling activity more or less

by

remote

words,

control.

we gave

munition and
line to

other

them all the
tried

we

to

am¬

get the

fire it.

'

On

September
changed and

was

In

first
as

last,

that

of that date,

organized and re-organized a
organization with direction

we

from the sales heads here in New
York

City,
of

that

so

had direc¬

we

sales activity both
respect to the sales person¬
every

nel and the employe
personnel,
integrating the two, and in four

months'

time,

because

that

of

direction, because of that training
and that planning, we have in¬
creased our productivity in the
sales

personnel

alone,

the

organization itself, 118

sales

Incentive Plans—Quotas—Motives

Now,

we

believe

in

believe
the

in

We believe in quotas.
in motives.

this.

incentive

We

plans

We believe

We believe in having

something that is worth reaching
for, something worth accomplish¬
ing. Unless we have an objective,
I

think, a lot of the enthusiasm in
selling is lost, and we have been
setting those objectives through
these various incentive
the various quotas.
We had a quota

plans and

for

January

less

we.

have

know

to

out these United States.

have

men

especially-trained
their

time

and

and

can

And
we

humble

my

ready

for

the
is

that

this basic

the

be

himself,

why
that

so

produc¬

interested in

see¬

I

am con¬

about

with

the

first

he

material,

by

can

prepare

join the fight

We cannot and must not fail them.

This film will
a

present

to

his

what

or

product would do for the prospec¬
tive

customer.

We

have

which

on

tact,

sales

a

is

the

or

result,

contact

every

He

makes.

control

that

rather,

shows

of

salesman

a

accomplished

was

plan

reported every con¬

exactly

what

through

that

contact.

Now, before he makes the ap¬
to
the
customer,
he
analyzes the distribution
needs
proach

he knows enough

and

customer's

least
his

business

helpful

one

package

about that
find

to

service

that

for

at

within

customer's

business.
If he does

that, then he is ready
for his approach and he can make
his presentation on that helpful
service, and then
helpful service

beyond that
analyzing the

go

by

rest of the customer's distribution

needs,

thereby

services
We

evaluating

those

his

needs.

give them this help and we
on these training programs

carry

to

with

that they

will understand how
keep those tools sharpened and

how to

them

use

productively.
show you just
one, about
a salesman's
contact, and this will
give you some idea as to the way
I

would

one

more

like

to

film,

these

sales

actual

use.

short

a

aids

into

put

are

This film

"Making A

Sales Interview" takes only about

minutes

seven

is

and

an

illustra¬

direct

of

selling by the use
application of the principles

and

selling.

pared

That

before

man

he

was! pre¬

made

his

proach, before he made his
He

was

prepared

enough

business

about

ap¬
con¬

he

and

that

man's

that he could tell him

so

how his services could be helpful.
So

preparation is

important

in

step

a

very

very,

productive

selling.

you.

you

package the selling aids that

in
are

used by this sales organization in

T.

MASS.—John

Hemenway has become associated
with

Paine,

Curtis,

24

Webber,

Federal

Jackson

Street,

&

mem¬

bers of the New York and Boston

Stock Exchanges.

S. R. Melvin Co. Retires
Sydney
prietor

of

Melven,

R.
S.

R.

sole

Melven

&

save

untold

of

analyzation

services

his

like

ing and then I would like to talk

selling

the

and

contact

Joins Paine, Webber

freedom

direct

then

/material, is given to the

salesman

125 Cedar Street, New York
announces
Lkiic*i

nocc

his

TToK

1 ^

retirement
1

-

be helpful

or

customer,

approach.
So

,

be

to

(Special to The Financial Chronicle)

in which

way

going

are

little to say, and in
opinion we are not

BOSTON,
the

increased

would

we

and

tivity,
through
that
direction,
through
that
planning,
and
through that training.
Now, we have a film here—
Selling Aids—that I thought you
men

ourselves, unless
knowledge, unless we

direct

team

.

be

are

do.

that is

have

to

-

how

can

have very

we

devoting

energy

thoughts
exclusively
selling—think what a
that

And then

like you and me who

them

prepare

prospective

knew

do

show

to

application

how

a

tact.

can

very

able to be of service

get 50,000 people, 50,000 employes
to take this up, to jackety-yackyack about the advantages of the

handling their traffic through¬

do,
helpful
to

that material.-

we

think of the momentum, if we can

their

is

Preparation is one of the most V
important steps in .selling., Un- .<■,

of

Express,
about
company, about what they

but

of

made

February and March. We
have this program, as I indicated
to you, "Make it your business to
ask
for
their
business."
Now

Railway

sales training.

attempted

that

practical

tion

and for

material

sales

our

productive selling, is not only
give
our
people
the
basic

a

so

in

think

material

cent.

per

the

have

we

I

what

Prior to that time

of

that is used .in

men¬

tioned it of referring to his com¬
ments—we started last September

idea

some

in

be

made

was

displayed at one of our na¬
tional sales meetings and will be

to

must

It

and

Now, when the employes have

they

accept¬

public

greater

of the service.

ance

and

of

are

i

been given the right information,
the education, and the tools and

with

vinced that in this crusade to

I

uct

tion

Congress know
people are
if the Administra¬

Given
Indianapolis by a com¬ government.
mercial bakery.
The Foundation shove in a forward direction and
study showed that by the time the socialism will be upon us, with
single loaf of bread had been the Brannan plan, the compulsory
bought by the housewife, it bore health plan, the regional planning
151 hidden taxes.
Now, who paid authorities, and all the trimmings
those
151
hidden taxes on
that including bigger and bigger taxes
single loaf of bread? You know for everybody.
the answer—the housewife.
The issue has been clearly cast
Let's not fool ourselves. In the The American people, having

cost

which

of

Congress know

war,

Tools

physical

American

doesn't.

were

translated

and

sales

probability is that he will

and sold in

final analysis, it's not the
farmer,
it's not labor, it's not the business¬
man who is to blame for the
high

Three:

ac¬

companied by companion increases

Congress is not

repeat:

isn't

has

were

Do you have a

ment

few

a

haps there should be "reductions"

out

of

Federal

within

grudingly admitted that

powder,

the

bottle

is

stimuli,

intelligent application of it, then
the information is not going to be
helpful.

tee

it

that

information

that
sales

the individual employe can make

the

a

discourage

one-fifth

unless

therefore

celebrating your 61st an¬
niversary, tonight, my bill and I
our

of

effective

methods,

year ago today I
a
bill in Congress to
repeal the wartime excise taxes.

lector. If she bought a box of face
to

into

one

means

consumers.

lot of pro¬

a

mean

introduced

affording many things you want
product of 175
long as the present administra¬ and individual

the

of

Program of the
Railway Express Agency

translation

how

It

them,

lot

a

Repeal Wartime Excises

of

beginning to look

It

that

anyone

want and

we

duction that would

the American people since the

beginning to ask

to

without

do

we

Boston Tea Party.
They are on the
march. They are

merchants and businessmen about
the taxes that are
passed on to

automobile.

an

clear

high cost of government means
not only high cost of
living, but it
means

Sales

lot of people who

a

have

not

should

for, say, $200?

Federal

a

Yes,

awakening is one of the
greatest things that has happened

tax

High cost of govern¬
ment means high cost
of living.
Did you buy a refrigerator after

taxes in hidden levies.

This

the

taxes, add another $81
a
year just for the privilege of
operating your automobile.

I

prospects

few hun¬

a

than

more

taxes, which,

he

abundantly clear. The Pres¬

-words

dollars

Every time you buy
gasoline, every time you buy a
quart of oil, every time you buy
a
tire, you are paying Federal

increases.

Yes,

sible

dred

itself today.

collector.

made

and

only a few years
buy an automobile for

mes¬

dollars

year

future

jobs for a lot of people who
would be needed to make the cars.
A
low - cost
automobile
would

House

In his first three

a

of

Why,
ago, you could

went

that taxes must go

would

proximately $511 in taxes.

and

year,

automobile

My one-year-old bill, which is
pretty popular baby in Con¬
gress, has been bottled up in the

theater,

this

some

you

60

Congress

at

low-cost

mean

Continued from page 4

going to

are

buy a new car in the
$2,000 price category, you pay ap¬

If

mys¬

upward, and he asked for

billion
this

face,

look

a

no

made it plain
ever

take

collector.

and the President makes

of

these taxes, hidden and otherwise.

went
sup¬

cost

living.

socialize

agriculture, to socialize
medicine, to socialize credit, and

high

means

we

Thursday, February 16, 1950

automobiles again.

mean

Taxpayer

convinced duties, excises, and corporate lev¬
they do, there is one way they ies are being passed on to them to
can stop socialism
in its tracks— pay in full. They are startled to
they can stop it by the greatest find that practically everybody
out-pouring of voters next No¬ can pass on some or all of their
vember that this country has ever taxes except the last purchaser,
seen.
They can stop it, as our and that means it is Mr. and Mrs.
Founding Fathers intended such Consumer who get stuck—every¬
alien
philosophies
should
be one of them.
It is no longer a mystery that
stopped, by registering and voting
if the government imposes more
their will.
At this moment in Washington, taxes at any level, it is the con¬
there are bills in Congress that sumer who eventually pays.
In
paint a dire picture of the future short, it is at last dawning on the
their country,

low-cost

CHRONICLE

Mr. James D. Mooney, who re¬
cently
retired
as
President
of
Willys Overland, and who knows
as much
as anybody in
America
about building a low-cost auto¬
mobile, has said, "The present tax
rates make it impossible to
get
back to a real $1,000 car—a car
that just is not a motor scooter."

one

thing for certain—if the American
people want socialism, they can
have it by staying away from the
polls.
,

FINANCIAL

wondering when
have

this

&

pro¬

Co.,
City,
from

-

.

Volume

171

Continued

Number 4882

jrom

THE

COMMERCIAL

&

FINANCIAL

of

ers

the

Why the Freer Bill

debt securities

or

by their

indenture, which is usually

bank

Should Be Defeated!
the

State

of

Ohio, where
the statutes explicitly provide that
every shareholder
is entitled to

Senator, regarding small
nies.

of

operations

shareholders

times,

and

to

open

improper

Mr.

unrea¬

such

states,

not

of

that

has

as

been

courts

many

that

shareholder

a

by

have

a

at this

of

Ohio

and

Mr.

nia

means

record?

to Ohio and

come

if

they wanted to get the infor¬

get the books

mation?
Mr.
Bowles:
That
is
correct,
Senator, but I don't believe that

would be much closer than
I

Washington—or much farther,
Frear:

Senator

it

Isn't

the

in¬

tention that the bill will have the

corporations supply this informa¬
to

the

stockholders, wherelive? This infor¬
mation is going to be sent to the
they

ever

may

stockholders

wherever

live, and the

they may
stockholder doesn't

have to

in and examine

come

the

books of the corporation?
Mr. Bowles:

believe

that

No, Senator; I don't
that

is

bill.

the

I

believe the bill is the filing of the
information in Washington with
the

SEC.

Senator

Frear:

How

proxy and the insider

about

Mr.

of

if

in

You

quite

are

proxies

sent

are

other

small

corporations

that

I

It is

Would

Senator

you

for

the

wouldn't

deny the right to the shareholder
security holder of those privi¬
leges?

law

me

North

something like

Boles:

Oh,

certainly,

I
I

Senator

Frear:

Do

they

that

ones

I

I

will

have

read

here

off

that

the

have

them, Senator: Alabama, Arizona,
Arkansas,
California,
Colorado,

Connecticut,

Idaho, Illinois, In¬
diana, Iowa,. Kansas, Kentucky,
Louisiana, Maine, Maryland, Mas¬
sachusetts, Michigan, Minnesota,

Mississippi, Missouri, Nebraska,
New
Hampshire,
New
Jersey,
New

York, North Dakota, Ohio,
Oklahoma, Oregon, Pennsylvania,
South
Carolina, South Dakota
Tennessee, Texas, Utah, Vermont

Washington,

West

Virginia

and

Wisconsin.

proxies now?
Mr.

Boles:

Yes;
they
solicit
Many of them do.

proxies.
Senator

feeling

your

of

Frear:

giving

the

advantage

What

about

would

the

proxies?
Do
think the proxies should be
given to all of the shareholders

and

Mr.

think
what

a

the

that
upon

pany.

ing

Boles:

that

the

Where
limited

I

applied

Mr. Boles: You mean the states
where

of

and

area

shareholders

are

they

do not have

Boles:

specific

Yes; that is

correct

Senator
Maybank:
In
y o u r
statement farther on you
go into
the intra-state
matter?

Senator

Maybank:

you

Senator
made

Frear:

myself

clear.

I

was

I

should

You

recommend

don't

those

to

Senator

or

and

number

within

nies.

and

the

We

they

area

are

a

limited
well be

very

may

of small

compa¬

talking here purely,




rec¬

You

may

with

in¬

the

ab¬

garding it.

is that not

concerned,
It

is

it

has

limited

even

probable that
information is so

detailed

that

satisfactory; to

go

here?

Boles:

advised

We

that

have

the

visions relating
inspection have

by

been

the

these

been

statutory pro¬
to the right of
generally

courts

harmony

of

also

with

in

sub¬

the

pur¬

provisions; that is,

enlarge and expand the com¬
law right of shareholder in¬

In

fact,

who

many

with what the SEC

discussion

familiar

are

million at

vestors in the prospectus
the Securities Act

under

believe

that

voluminous and

so

most

investors

do

tempt to read it

required

intricate
not

Senator

Mr.

I

The

very volume and intricacy
such
information defeats its

of

the

purpose:

informing

regret to report from our
experience
with
investors
that
this criticism rests on solid

that would

come

posed

act,

may

the

ments

sent

out

to

the

rights

of

shareholders to inspect corporate
records, as provided by common

states,

the
of

statutes

persons,

i

by
n c

debt

and

states

some

inspection

u

d i

as

where
securities

we

constitu¬

provide

other

1

n

g

all

the

creditors.
know

public, the

issued

se¬

ordinarily cre¬
contract right of
inspection
books and records by the hold¬

ate

of

are

in

issue

indentures under which such
curities

for

interested

corporations
to

a

corporation

under

this pro¬

by the company,

instances, and I ex¬
instances, an investor

many

most

will go to some
person for in¬
formation and analysis of these

things.

ability to analyze these reports?
Mr.

Boles:

Senator, I certainly
that they didn't
ability.
I think they
have the ability.
not

however,

of

we

have

whether

right to that

small companies.
that a little

a

question

they

not

Boles:
more

greater

information

in

I will touch

on

may.

What

is

needed

information,

simplification

of

of
simplification of
shareholders.
Indeed

to

many corporations are
each other to this end.

vying with

that many might be too
simpli
fied, ^hat the proper information
is not given to the
shareholder?
Mr.

Boles:

sible for

It

is

entirely

pos

oversimplification, Sena

you

shareholder

I

would

however,

like

to

call

be

com¬

and

so

for

on,

your

Senator Maybank: Where
would

a

being put out by small companies

end

I

don't know where

they would be, Senator.
Senator Maybank:
be

I

to

have

Pennsylvania.

some

So

Good

and

in

would

Ohio
is

think

small

and

just
so,

a

Pennsyl¬

but
because it is a
guess,

I

fine
be

a

terference,
and

that

$5

a

good company, a

alone,

unnecessary

and

about

business, and a faithful,
organization, who like to

left

may

think

corporation:

"We have

good

and

be

free

governmental

of

a

their families."

statement, I think most com¬
would,
most
presidents
that.

Mr. Boles:

Here

are

other "eye-

appeal" companies, and you could
get lots of them. It is the great

today,

Efforts at

poor

company

good one
into a pros¬

Likewise,

poor

convert

can

change*

a

man¬

the

most

em¬

company and its management bet¬
This is now the trend in the
of

case

many companies.
will
not obtain
education

with

legislation

filing

prescribing the.
voluminous, costly and

of

intricate

in

reports

Washington.

Such reports will add
nothing to
the information
already available
to

the

will

shareholder

have

no

and

sex

certainly

appeal for the

average investor.
In addition to the

above-stated
why no necessity exists
legislation from the point

reasons

for this

of view of
investors, we wish to
show how the bill, if
enacted, will

impose serious

financial burdens
small industries and endan¬
ger their existence.
upon

Small

quired

businesses would be re¬
file registration state¬

to

with

the

SEC

and

to

file

annual, quarterly and supplemen¬
tal financial reports. The
prepara¬
tion of these reports would not

only

tax

the

available

regular

facilities

to

these companies but
impose the added expense1
of retaining the services of addi¬
would

tional

the

accounting and
interpret and

legal

to

ex¬

out
applicable SEC requirements*'

In

carry

addition, if proxies
it

poses,

would

with

or

be

to be

are

other pur-*

to
rulea

necessary

the

proxy

which again would require the aid
of high-priced experts.
The

cost

of

these

additional

services, together with the print¬
ing expense involved, we estimate
would

approximate

$15,000

per

$10,000

for

year

even

to
the

Senator Frear:
company

Do you consider
with $3 million in as¬

sets and 300 shareholders
business
Mr.

a

small

riot?

or

Boles:

Yes;

a

very

small

business.

,

Senator Frear:

That is

a

small

business?
Mr. Boles:

in those companies.

Voluntary Publicity

Furthermore, of recent years,
progressive corporations have in¬

Yes.

Senator Frear:

that

a

assets
In justice to

panies

would say

a

can

into

in¬

that

they each
job and have security
happiness for themselves

do

so

,

management

phasis should be placed on educa¬
tion of shareholders to know
theijr

a

Boles:

year-

smallest of the industries affected.'

company.

it?
Mr.

the*

on
a

comparatively short time. The

Senator Maybank: How much is

million

management

beautiful financial statement into
a shambles of
debt and ruin in »

I

judge that most of the stock
That

if

shareholder

a

proxy report or

poor statement

comply
have not looked it

seem

held

very

I

a

man¬

difficult

very

solicited for quorum

What would

guess?

your

Mr. Boles:

aggressive

is

statement.

perts

the stockholders be?
Mr. Boles:

It

up

basis of

ments

attention

sort of background
for the sort of information that is
as

you would

pretty
generally the attitude of small
corporations. This company is the
Ettna Standard
Engineering Com¬
pany, and is an Ohio
company.

trend

tor; that is correct.

the
ex¬

Senator Maybank:

Senator Frear: Do you not think

of

This is what the
President says
his
concluding remarks, and I
believe you would find this

attorney. He

means

when

in

was

is not familiar with
many techni¬
cal terms and
phrases common to
such reports.
For this reason it
is now the
aim
of
many
pro¬
gressive corporations to find ways

may.

you

appeal,
reading.

vania.

The average shareholder
is neither
an accountant nor
an

cer¬

pany sent you this kind of a de¬
tailed report, with
eye appeal and

would

m-

I

I would like to
read

think

ear

1S

but
the

pro¬

this, I believe that if

up.
They
plants
in

shareholders. Shareholders gener¬
ally will ntft read long, involved
statements, nor will they try to
figure out intricate balance sheets

reports

company that
would
consider
a

a

honest,

size

We

a

I

ingredient in »
important than

no

more

impossible for

to

I

concluding paragraph

were

have

Senator Frear: All
right, sir.
Mr.

is

share¬

average

ter.
may

pretty well satisfied if your

claim

that

Yes.

You

Senator Frear: You

I

not be able to
digest voluminous financial state¬

would

Frear:

Mr. Boles:

a

The witness?

you.

ground.

of

$3
on.

tainly
small
company.
I would like to read
from this before I hand it
to

We

holder

capable,
not

statement?

vestors.

Senator Frear:

and

might depart from my prepared

m-

is

agement.

Boles:

Here

of

300

Senator, in present¬
ing this information, I wonder if

at¬

assimilate it.

or

that

length further

ceed, then.

that

even

He goes into

Senator Maybank:

of

there

agement

Senator Frear:

1933,
information is

such

of

some

the

perous one.

Yes.

they

so

all,

a

•is

and

lawyer would consider a well de¬
tailed report of his
company. After

ex¬

That

in

easy

could obtain, in an hour
spent at such
meetings, a
much better idea of the
manage¬
ment and direction of his
company
than he could ever attain
by read¬
ing what an accountant and a

particularly

Yes.

within

are

shareholders,

Certainly,

con¬

for

as

holder

referring has to do
trading privileges;

Senator Maybank:

now

of

corporation

Frear:

Mr. Boles:

requires
to be presented to
prospective in¬

and

addition

that

12(f)3, I believe.

involved and lengthy as to con¬
fuse rather than
clarify the situa¬
tion for the
average shareholder.

formation that is presented to the

Senator Frear: Yes.
Mr.

Does

correct?

Senator

places

hold¬

are

meetings

urging shareholders to attend
meetings.

or

I think the section to

are

reader4

is the fact

such

Somewhat.

Mr. Boles: I haven't

corpora¬

in

seem

are

any company
in assets and

opinion

importance

their

access

Are you familiar

your

which you are
with unlisted

any
pro¬

all, Sen¬

Is

Furthermore,

Our position is tha

300 shareholders is

definitely

this statement.

Frear:

ahead from

cases

Boles:

the

detailed

as

later, if I

ator.

tions

over

in

Mr. Boles: Thank
you, sir.
You don't care to continue this
list?
I have given them

more

$3 million in assets.
Mr.

it

as

Frear:

stract, when it comes to practical
application so far as shareholders

I think here

Mr. Boles: We do

corporations
year-end

addressed my attention
to
that
part of the bill, Senator, nor have
I had
any statement to make re¬

as

law and the statutes of the
several

inferring that they

had 300 shareholders

with

reports

manage¬

and

ing

security holders of their

do

mon

have

financial

Senator
form

interest

eye

such

12(g)3; section 12(g)3 of the

Mr. Bowles:

and

tions?

law?

possibly

somewhat

filing of voluminous

its

and

it

know

Not

have

Act?

we

question—what

make
to

what

your

us

You

emption purposes?

have

spection.

there is any necessity for that.

this

is.

million

Senator Frear:

better.

to

shareholders

Of equal
that many

under 1,000 shareholders.

ne¬

company

ment

reports

know

My opinion, Senator,
company certainly

be defined

with

answer

don't

small

$10

efforts

for

their

appeal.
I

company

a

their

easy

only is there a
simplification of
reports,
but attempts are made
to give the

company.

SEC accomplish from the
point
of view of shareholders and other

the fact that that is in the
present

com¬

the

under

Would you claim that those in¬
vestment agencies do not have the

Mr. Boles: Yes.

serv¬

near

must

pect

to

I have great doubt that

company,

could

considering the
for this legislation

cessity

Mr.

some

is

who
ade¬

further

but in

pose

the

company

In

Senator Maybank: Yes.

rather

depends
size

a

33

greater

going to analyze

Mr. Boles:

is that

of

defini¬

talking about it.

real

and

with

been

report.

stantial

Senator,

provided

might

you

your

Senator, that is sort

Frear:

are

small

amine

construed

security holders?

corporations

are

we

security

the

you

how

a

in the other states?

be

the

the

are

us

statement unless you tell

admit perhaps
that the individual shareholder or

necessity

shareholders

of

po¬

Senator Maybank: You
say thai;
the common law could be

ceed.

use

Senator

panies.

In

Boles:

ommend

Mr.

our

small

a

creased

re¬

$64 question.

a

necessity

is

obtaining
in¬
formation concerning their com¬

ours.

or

would not deny them, Senator.
think they already have them.

no

It

who

means

usage.

Maybank: As to North
do you know if they

amendments, but call attention
You

quate

such

Mr.

of

already

Senator

say

Frear:

shareholders

Mr. Boles: We will be
glad to.

a

expensive, pretty long-

an

is

Maybe

point give

of

Mr. Boles:
of

that the
pending bill, if
adopted,
will
operate
substan¬
tially to increase the powers and
jurisdiction of the SEC, but it will
accomplish nothing to benefit the

desirable
formation may

it.

drawn-out process.

there

tion

shareholders,

enactment.

As

states

Carolina had

out

am
talking of it would by my
opinion that very few of them
would use proxies if they could

avoid

to
ad¬

now

37 states.

It seems to

cor¬

they go to shareholders,

course

but

time

am

statutes?

Boles:

that

I

have them?

the

trading in¬

formation?

rect

hadn't

Maybank:

the

Carolina,

coming

mean.

tion

We

are

Senator

or

to

to

vised there

living in Califor¬
other places?
that they would have

Oregon

or

That

Boles:

furnish

the stockholders

its

costly

Senator Maybank: But
you said
were 37.

have

you

believe

cre¬

privileges

or

behalf of

we

will the

Mr. Boles: Yes.

com¬

Suppose that you
issuing stock in

company

State

records

states, including South

examine them all.

Senator Frear:

and

there

pany.

the

books

Carolina?

the

examine

the books and records of his

of

statement,
rights of

similar

Senator Maybank: You mention

times, to the effect
may

that

about ten

the
I understand

rights

new
on

for

owners

facts for this

found

to

specifically granted by many
states, including Alabama—

are

course,

upheld

Thank you, sir.
time we had

are

37
there is

where

law,

law, and

common

it

and

state

a

course,

brief

inspection

knowledge?

Senator, there

the

assemble

purposes.

How many other
similar laws, to your

Mr. Boles:

Boles:

In

Senator Frear:
have

Well, of

want to get the benefit of
your

we

states

Frear:

thinking and opinion also.

reasonable

and except for

save

sonable

are

all

at

we

Senator Frear:

sition

Senator

receive annual reports and that all
books of account and other rec¬
ords

compa¬

a

trust company.

or

ate any
for and

today where there is no law
quiring that they be put out.

under

Because this bill would not

in

(737)

6

page

representatives, the trustee

case

CHRONICLE

Would you say

company of $3 million in
and 300 or over in share¬

holders would have the
accounting
of their books done
by some ac¬

counting agency? That is, prob¬
ably certainly have a C.P.A. to
audit their books?
Mr. Boles:

I would

say

a

large*

percentage
you

do not, sir.
I think
will find that is correct.

Senator
amazes

,

Frear:

me,

That

really

I must admit.

Continued

on

page

34

34

FINANCIAL

&

COMMERCIAL

THE

(738)

Continued

from

Thursday, February 16, 1950

CHRONICLE

33

page

hoped to ge additional business by

prices they should be disposed
of.

Tomorrow's

That's

Walter

Whyte

Says—
By WALTER WHYTE;

more

points, buying

mendations
MIAMI

be

can

think, Senator, that file their own Federal income tax
a $3 million
corporation—$3 mil- reports? Does this gentleman of
time, a policy of watching and lian sounds like a lot of
money, whom you are speaking, and who
waiting is suggested.
It is but it is not very much money might have some CPA experience?
quite likely that we will re¬ in a corporation today.
Mr. Boles:
In many cases; yes.
enter the market on the long
Senator Frear: You honestly be¬
Senator Frear:
That must be

sug¬

stock

a

or

group

the

in

President

few

[The
time

do

Chronicle.
those

Whyte.
in

expressed

this

necessarily at
those of

any

with

They

the

presented

are

I've

just
the

from

*

before the market

was

around

"What's the

me

Fred R. Tuerk With

I

reaction

current

coal

the

is

based

situation

R.

CHICAGO,

ILL.

R.

Fred

—

William R.

Staats

his

have

at

will
North

333

He

Avenue.

in

partner

a

Chicago

as

Tuerk

Mr.

offices

Michigan
merly

Co.

Co.

&

tion

calls for

appraisal
rather

of

than

market
the

action,

sentimental

approach or the chest-beating
popular newspaper interpre¬
tation that most people seem
to give the news.
x

x

As of last

af

were

CooperCorp.,
both with stops.
Neither of
these are sacrosanct. They're
as
good as the market or as
bad, depending on where you
sit.
If they break their stop
Bessemer

stocks,

Mead

and

MacFarlane,

become

have

with

associated

Standard Investment Co. of

Cali¬

Colorado Street.
Cunningham was formerly

Mr.

with

117

G.

others

East

Brashears

were

The

Co.

&

previously with King

Merritt & Co.

$10

my

that

say

I understood

million, and

thousand

a

idea of

Yes; that would be
small business.

a

H.

Pabst,

the staff

to

Jr.,
of

has

putting
insur¬

Senator

I

but

believe

that you
that that might easily

Don't you think

Mr. Boles:
as

their treasurer,

who

has

been

Senator,

employed

bers

of

the

Francisco

New

—

J. Barth &

Stock

York

mem¬

and

that

cer¬

they have, a man who under¬
accounting.

stands

Senator

Frear:

If

a

can

man

understand the accounts of

York

York Curb

San

Stock Exchange

Exchange

Francisco

Chicago

Board

San

Wires

Exchange

Trade

of

New York 5, N. Y.

14 Wall Street

COrtlandt 7-4150

Private

Stock

(Associate)

Teletype NY 1-928
to

Principal

Francisco—Santa

Offices

San

million in assets, do
not think that he could un¬
.

file

and

the

forms

re¬

could

Boles:

With Frank Knowlton
(Special to The Financial Chronicle)

ica

not.

limself

think he would

I

in

grave




it

take

I

from

&

now

with

Frank

Co., Bank of Amer¬

difficulty

SPECIAL PUT OFFERINGS
Per 100 Shares

•

Chrysler Corp. .. @ 65% Apr. 15 $362.50
Amer. Republics. @ 29% May 13 287.50
Stewart-Warner. @ 17% Apr. 17 137.50
Schenley Inds... @ 33
May 8 287.50
Continental Oil.. @> 51% Apr. 22 275.00
Southern Pacific. @ 54
July 25 400.00
U. S. Steel
@ 29.60 Aug. 14 212.50
Atch. Top. & SF. @ 104% Apr. 20 387.50
Oliver Corp
@ 26% Apr. 24 287.50
Amer. Tel & Tel. @ 149 Aug. 11 225.00
Cities Service... @ 71
Aug. 7 787.50
Subject to prior sale or price change

THOMAS, HAAB & BOTTS
Members

Put &

Calls Brokers

&

Dealers Assn., Inc.

50

Broadway, New York 4, Tel. BO 9-8470

is

very

that, Senator.
Don't you think

that

the

and

shareholders

which

in

or

they

may

be

I

are

Senator Frear:

Mr. Boles:
Senator

talking

ability of

I

assumed

Most

are

Senator
have

of

a

in

not

Mr. Boles:

would

assets

with

must

My point is that they

almost have

accounting

firm

presently using

if

to

call

they

in

an

weren't

one.

lion

Senator Frear:

Do

would

and

1,000

as

against $3 mil¬

ticular

stock;
the volume, the
amount, and so on. I object to that
particular yardstick.
Senator

these small

$10 million in assets—do they

in.

in limited
in competition
companies hay¬
operations
and

ing
widespread
always on the lookout for
tunities
small

to

prosperous

Under

bill

the

oppor¬

acquire
competitors.

expand

and

the

small

com¬

panies will become fair game for
any
unprincipled giants because
the small companies will be re¬
quired to divulge to the general

public,

including

detailed

sales,

all

competitors,
concerning

information

working

costs,

capital and
companies,
all of the stock of which may be
held by a single family or by a
few
shareholders, will
not
be
spared this threat if such com¬
panies have debt securities, out¬
the

like.

And

small

standing and publicly held.
It is not
for

an

larger

practice
place
and their most

uncommon

companies

advertising

where

to

merchandise

keen

in

areas

competition
with
Also price

small companies exist.
tice in such
If

that

an uncommon

competitive

prac¬

areas.

giant corporation knows
small, aggressive competi¬

a

a

serving a limited area is at a
given time weak in working capi¬
tal

has high overhead costs and
margins of profit, then the
large corporation is at great ad¬
vantage
in
knowing
just
how
or

low

much economic pressure

How

Maybank:

could

find that out?

in

able

that

the

his amall

With all the

stand.

can

information

I think the yardstick

Mr. Boles:

come

operated

are

areas, frequently
with much larger

competitor

is the trading activity in that par¬

would

availr

be

SEC

public files, it
simple matter for the
big competitor to direct its pres¬

would

sure

be

so

sell,

a

to

as

or

make

him

want

to

put

him

out

of

even

business.

deal of study, Senator, but I

In summary of our point con¬
cerning the danger to small busi¬
ness created by the Act, it is only

it

is

necessary

to

obtain.

That requires a good

Mr. Boles:

think
nothing that is too difficult

an

no

more

for tak¬

reason

arbitrary yardstick of $10

million

reason

I understand.

than

we

have for

concerning a company
bona fide shareholder thereof

a

the making of such informa¬
available in highly detailed

tion
form

for

thereby

taking $3 million.
That is

right.

Senator Maybank:
lion

was

The $3 mil¬
recommended originally.

those days

three would be six

friend

foe

and

alike,
the
very
benefit.

endangering
we

seek

to

Many states have recognized this
danger by providing protection to
corporations and their sharehold¬
ers

against supplying information

for

now.

a

giving in-^

formation
to

and

—

Senator Maybank:
more

to note that there is

substantial difference in

I have

unreasonable

and

improper

purposes.

Mr. Boles:
Senator

That is right.

Maybank:

We

think

I

it

1941.

I

am

by

section of it, Senator.

Senator

satisfied

Maybank:

with

Mr. Boles:

by

a

Are

of

Are

they

say

section of

it

You say you

was

introduced

your own

industry.

They

were

ly satisfied with it.

apparent¬

I think they

to

of

considera¬

a

general

cate¬

for

suggestions
this

Senate

Bill

Frear Bill

necessity for some type of
legislation is deemed to
exist,
the

Jhey not satisfied with it?

Mr. Boles:

specific

Defects of

what

Pardon?

now

second

a

are

the

defects, if

any,

in

proposed legislation and how

may

to

the

2408:

If

it?

Senator Maybank:
sorry

come

of

amendment

'41, I believe.
to say that was in¬
our
own
industry,

sorry

troduced
one

tion
gory

Mr. Boles: '40 and

are

companies, as you call them, of
$10 million, between $3 million
and

You

objection to this law then

no

see

tor

lion and 300?

was.

But the manage¬

corporation

would hate to

we

panies

they

business

the

Maybank:

Mr. Boles:

$3
depend
upon this man whom they have
hired that has some knowledge of
CPA accounting.
million

because

of

the

being $10 million and 1,000 stock¬
holders?
The yardstick that you
think should be used is $10 mil¬

you

the certification.

Senator Frear:

that

along with him.

one.

they haven't been the people

ment

wants

part-owners

Pardon?

Frear:

that

shareholder

CPA's,
out many have worked for CPA
firms. They have done the work.
who gave

information

shareholder

No

You admitted he

interested that they

very

vital

more

companies
than the cost in money is the dan¬
ger of competition. By that com¬
petition I mean unfair competi¬
tion, or competition of a bad sort,

more

get

still

small

to

cutting is not

certified

a

Of

importance

them

ing
not

am

about this man being
public accountant.

must have the

Proceed.

From Competitors

Boles:

Mr.

attractive

you

of the

Boles:

out, this bill says
holders.
It doesn't say

think he wants
to see that they get information
that they want.
I think most of

Mr. Boles: Yes, I

find

Then your opin¬
ability of the certified
public accountant must be a little

ion

it
as

Small Companies Face Danger

information that would be vital to

many

admitted he must have that ability.

Building.

he

think

I

securityholders should obtain the

times.

Mr. Boles:

Barbara

Rosa

of

the

ested

No, sir; I think he

different than mine.

Exchanges.

Monterey—Oakland—Sacramento
Fresno—Santa

get

management, and this
gentleman included, also, is inter¬

busi¬

a

with $3

Mr.

is

that

a man

by

tified public accountants and they
feel free in relying upon that man

But

Members

New

New

intricate

already

Frear:

interested in

are

Many companies have

Senator Frear:

•

Schwabacher & Co.

file

to

can

Boles:

Mr.

I startled you,

see

I

they should then have them?

Mr.

been

Co., 482 California Street,

Securities

Pacific Coast Exchanges

him

the Internal Revenue Department?

In

on

vital

interested?
Mr. Boles:

Senator,

but

not,

or

point

Senator Frear:

volition.

own

them

quired by SEC?

CALIF.

FRANCISCO,

William

I noticed the

companies.

ance

derstand

(Special to The Financial Chronicle)

added

Boles:

re¬

whether

time

As you know, many small com¬

Senator Frear:

statement you made about
these up with banks and

you

Knowlton

Executed

asking

their

small company

a

Senator Maybank:

ness

J. Barth & Co. Adds

Palmer

Orders

very

forms, and they are intricate, in
order to supply something that the

should

OAKLAND, CALIF.—James W.

Pacific Coast

That is

other report, Senator, in
opinion, is just filing what the
shareholders can already get. We

changing that?

Senator Frear:

Harry L.
Hall, Jr., and Clyde A. Westland

SAN

week you

long of two

A.

cold-blooded fornia,

a

was

(Special to The Financial Chronicle)

John

profits, whether on the
long or short side. The situa¬

How would

be true of many, many companies
of that size.

sional
with

it.

shareholders

will find out

Five Join Standard Inv.

on

concerned

to

for¬

was

Cruttenden

PASADENA, CALIF. — Robert
B. Cunningham,
Harry S. Hays,

is

corporation,

This

Tuerk

thing else is purely an aca¬
demic question.
The profes¬
trader

the

are

Mr.

some¬

or

or

company

Maybank:

recommend

you

don't

300—I

this

at

Shall I continue?

same

port to the company. He puts time
and study on

shareholders?
Fred

representative.

the same, they
didn't look as good as common
opinion believed. Whether the

insurance

Senator Maybank:

the

Just

to

more.

or

will

I

They recommended

and

shareholders

was

cannot

that that you do say that the man¬
Senator, I think that
getting down too much to agement of a corporation is inter¬
small companies, because the un¬ ested in its business to the point
of filing the proper return with
derlying purpose—

Here and there the action of

signs.

that

Mr. Boles:

we

is:

the

of

are

you

Why're

belied

affairs

have 300 security holders and
sold their debt securities to

Senator

Tuerk has become associated with

stocks

have

we

institution who has 300 sharehold¬

signs, at least those I could
see, pointed to lower prices.
certain

Security holders.

think

I

have

doing

that

wrote

the

my

ers

Boles:

million

member

Senator: When you are pay¬
ing taxes you have a vital interest

direct security holders, according
to this bill. Indirectly, a company

or

Mr.

$3

There is this differ¬

Mr. Boles:

to the company.

bank

did rec¬

$3 million, a section

of it?

ence,

determine this: there indirect and

can

*

Florida

that

But

does

that

Senator Frear:

William R. Staafs

Just before I left New York

for

Don't you

in

Boles:

Senator Maybank: They
ommend the

file the form for SEC?

know—

Mr.

they going down?"
X

many

bill didn't pass

The

shareholders.

Frear:

certainly think
gentleman who
of them, Senator.

Boles:

that time.

at

security

Yes.

We are getting back
to be sure that you don't overpay
question of shareholders or underpay. It is a
very close
and security holders, Senator.
financial matter and of great im¬

in

now

matter?

Senator

I

form?

proper

Mr. Boles:

nothing, it is now skedaddling
downward. The common ques¬
tion

to

in

Mr. Boles:

think
the shareholders, if they have 300
shareholders or over, are entitled

where

and,

are

Senator Frear:

a

called

been

there

to

*

beach

done

some

as

Naturally, there is a diver¬
gence of opinion
as to
its
probable impact.
*

corporation of $3 mil¬

a

Boles:

Mr.

of the author only.]

strike.

coal

not

coincide

lieve that

lion in assets does not have
auditor to go over its books?

^

views

article

off

points.
next Thursday.

more

—Walter

standing

of stocks
seemingly acts independently.
The major talk in the board¬
rooms here is the Taft-Hartley
Act and its application by the
a

mean¬

side should the market go
a

More

aside, although here and there

the

In

column.

FLA.—

still

is

a

recom¬

expected.

BEACH,

market

The

policy

If market slides off

gested.
few

wait

Mr.

I

Mr. Boles:

they

Did

Maybank:

get it?

Shonld Be Defeated!

write the

York desk to

>

Senator

Why the Frear Bill

x

expect to be back at my

New
next

and

*

x

I

it, Senator.

stops

reason

given in the first place.

were

Markets

Watch

the

In

the bill be improved?
this

number

connection,
of

we

comments

have

for

a

your

consideration:
One:
gress

The

SEC

and the

message

as

reports to Con¬

President's special'

reported in the

Chi-

Volume

Number 4882

THE

"Journal of Commerce" and

cago

the

on

171

Dow-Jones

news

governmental

wires,

ready

characterize the legislation as ap¬
plying. to all companies having
$3 million in assets and more than

characterization,

wish

we

to

call to your
attention, is not
entirely accurate for the proposed
legislation refers to security hold¬

not

ers,

fore

securities
more

in

the

hands of

and

persons

other

or

only

two

the

or

interpretations.

be

of

its

to

necessary

priate

make

amendment

operation
which

to

those

the

it

purpose,

its
of

shares

representing
equity ownership are widely dis¬
tributed, and exclude those cor¬
porations whose shares

held,

the

As

persons.

have

we

al¬

securities

already are protected
by contract and by the require¬
ments of existing law.
Two: The bill

specifically gives

a very real
to the scope of its

as

operation.

With

the

SEC

em¬

powered to define without restric¬

tion, will assets be valued
or

cost,

by SEC appraisal?
Will security holders be inter¬

preted to

mean

loan

from

bank

a

In

short, if the companies to be

and

trolled
At

this

least

one

faced

by

of

by Senate
the un-

point let
danger

the

Mr.

mention

us

will

at

be

companies
which may have total assets of
$3 million, but which may not be

registered with the SEC

because

its

securities are. held by fewer
than 300 persons.* Assume if
you
will that a particular

corporation

has

$300,000 of

tures.

bonds

outstanding,

equity

stocks

people,
tion.

not

a

In

owned

case

a

debentures

or*

securities,
the

its

few

a

situa¬

the

are

bonds

ordinarily
transferable

without notice to the

sequently,

by

uncommon

such

bearer

all

issuer;

of

language, Senator.
to

I

at¬

:

wish

to

instead
of
"security
holders", it certainly would help,

because stockholders

record,

and

who

would
who

no

they

they
of knowing

Maybank:

work.

nish them

issue

form

way

That

is

know

if-it

you

have

any

would

fur¬

If

you

,

a

for the record.

Mr. Boles:

We will be

should

possible, based on
legislation itself, for any com¬
pany with the help of its account¬
ants and
attorneys to determine
—with certainty—whether
or not
is

the

subject

to the provisions

of

bill.
the

issuer

had engaged

in public

distribution, if not directly, then
indirectly, through the issuance
of

bonds

debentures

or

which

if

transferred could eventually come
to rest in the hands of as
many
as

300 people.
We

base

this

assertion

of

the

SEC's position upon its statement
at

24 of the

page

Congress
issuer

to

the

which

holders

1946

state

provisions

bill

provides

of

.

which
state

may

SEC.

In

the

power

the

where

tures

in

needs

or

financing

and

their

the corporation,

tect

itself, must accede
jurisdiction
whether
or
comes

Senate

within

Bill

the

corpora¬

refrain

bonds

single
by the
the

capital
to
to

pro¬

SEC

not

it

purview

of

2408.

must be

a
cardinal principle
recognized by all that cor¬
porations which are to be sub¬
jected to the jurisdiction of a

well




SEC
of

as

the

for

and

is not

right

as

Securities

in

Act

exemption
is
securities of a

the

pany

if

a

held within

Four:

The

powered
and

the

majority of its

fix

SEC

by

the

the

form

financial

be made. The

will

by

our

and

be

bill

to

and

content

of

specify
of

now

Furthermore, in

many

methods

cases

and

such

reports

all

have

or

no

advantage to
they are al¬

since

pointed

widespread.

out, the holders

the

listed

made

of these markets

for

our

filing

strates

that

perform

on

minous

costly

financial

Washington,
create

more

shareholders

volu¬

statements

who

in

nalism that the

local

industry and the detriment

of its

industry,

backbone

of

the

submit,
nation

is

and

discouraged and placed in

grave

peril.
Based

the

small

is

on

bill

firm

if

mitted

is

for

stantial
made

this

not

It

be

country, it
that

the

reported
further

our

bill

some
,

interpretation of
impact on the

of

conclusion

should

Congress.

must

be

sub¬

consideration,

amendments

to

view

sub¬

should

be

along the lines of the sug¬

gestions
in

its

business

our

bill

our

and

made

order

to

in

this

protect

statement

the

of the industries and

interests

shareholders

affected.
Thank you,
Senator

sir.

Frear:

Questions, Sen¬

Senator

Maybank:

No,

thank

you.

Senator

Frear:

I

have just one

question:
On page 3 of
your
statement,
do you have the code
sections for
the states which

quote here?

you

Mr.

Boles:

I

would

supply them to
Senator
would

you,

Frear:

appreciate

be glad
Senator.

Thank
it

We

you.

very

to

much.

Mr. Boles: Thank
you, sir.

With J.
J.
120

Arthur

Warner

&

New

that M.

E.

Co.,

York

Inc.,

City,

Wagner has

joined the firm's sales department.

Sole
ST.

E.

A.

Street.

there

compelled to bear

a

particularly oppressive burden in regulation. The answer¬
ing of prying questionnaires, the
making of periodic finan¬

cial reports, the
registering of salesmen, the control of
price, the use of wordy, lengthy and
unnecessary prospec¬
tuses, trial by the SEC, and its
satellite, the NASD—both

acting

as prosecutor, judge and
jury—these are but
of the evils which have been
foisted upon it.

a

few

Gradually, step by step the government has been
making further incursions into the securities field.
Under the guise of
dom of the public

"protecting the investor"

the free¬

generally is being impaired and

the right to do business untrammeled
is being sever¬
ally curtailed. The American way of life is on the

decline. Unless freed of these
regimenting restrictions,

it may be on the
way out entirely.
This is the time for the
our

Congress to recognize the
being imperiled

freedom of action is

and to

stop this juggernaut, the SEC.
Every one of our national legislators would do well to
pay particular attention to the statement of
Ewing T.
Boles, President of the Investment Dealers of
Ohio, in
which he establishes the existence of
adequate protection
for shareholders and
security holders under existing laws.
He

further

establishes

that

under

the

Frear

Bill

small

businesses would be

required to file registration state¬
ments with the SEC and to file
annual, quarterly and
supplemental reports. "The preparation of these
reports,"
says Mr. Boles, "would not only tax the
regular facilities
available to these companies but would
impose the added
expense of retaining the services of additional
accounting
and legal
experts to carry out the applicable SEC require¬
Mr. Boles also
pointed out that compliance with the
proposed proxy rules would again require the aid of
high
priced experts. (Full text of Mr. Boles'
testimony appears
in this issue,
starting on page 6.)
The extension of the powers of the SEC
is
with

now

Gessler

fraught

danger. The curtailment of its powers is
pres¬
ently and immediately necessary in the public inter¬

Proprietorship

LOUIS,

Gessler is

by a process of progressive pater¬
security business be nationalized.

ments."

ArtJ*ur Warner

Broadway,

announce

this regu¬

tendency which pro¬
only when its own corns are being stepped on. The
picture must be envisioned and encompassed for

extent to which

ator?

distributed

at

The securities business has been
we

be

is no
telling when the free of today may be the
oppressed 6f tomorrow.

shareholders.

Small
the

for large com¬
injury of small

the

to

were

There is too much of that selfish
whole

to

nevertheless demon¬

Exchanges will realize that

juggernaut which aims

will,

available

re¬

Over-the-Counter Market
demolition today may choose the
Exchanges as its target

to

infor¬

as

be apparent to
every

tomorrow and advocate

such

distinction

no

professes on one hand it fails to
the other, e. g., in certain
reorganizations it has

for

make

there is

us

one

to the de¬

come

it

Members of the

tests

mation

what

protection
access

would

the other hand, while it declares sancti¬

not

have

the defense of either

as we

thinking person that the
of the Frear Bill will mark the decline of the
Over-the-Counter Market and
ultimately its complete

financial information at the home
office of their corporations.
This

however,

on

will

therefore,

any

readily

giving its approval.
The Commission's militant
advocacy of the Frear
is another
striking evidence of its insincerity. It

must

their

and

complete objectivity and utter

insisted that the securities which
be listed as a condition to
Bill

Over-the-Counter-

and as be¬
have acted, and advocated that

come to

With

the

economy well,

moniously that it too is impartial,

lator

of

and

our

duty.

The SEC

examination.
The

as

fense of the other.

spects

of

shares

available

we

impartiality. We would

are

be

markets,

attitude vis-a-vis

our

always taken the position that

market

the Commission act with

demise.

tion

auction

tween these

protected by contracts
requiring that financial informa¬

than

We have

Market have both served

passage

other

thinking and realized that
opposition to the Frear Bill,

There is yet another contrast in

that of the SEC.

au¬

com¬

position, for

usee;

Ohio and other
companies

accounting

small

be

we

little

happened, has reoriented his
there is basic and fundamental

of

informative

those

state

our

our

In summary of our

securities

em

accounting methods

with

accounting

to

Bill

Exchange

Expand the Hamstringing Activities of the
[Full text of Mr. Eaton's testimony on page
7.]
We have given
only some of the highlights of this
opposition because of space limitation. It is
widespread,
and, of course there is that silent opposition in the securi¬
ties field, which because of fear of
reprisals will not speak.
We hope that Mr.
McDonald, in view of what has

ready entitled by law to all per¬
financial information con¬
cerning their corporations. As we

shares

reports which must

ideas

to

suggest

subjected to
regulations.

and reports thus
required may be
entirely out of accord with man

reports

of

not

reasons

and

the Business of the New York Stock

SEC."

tinent

single state.

a

We

pre¬

conflicting

confer

the

Instead of leaving this
important
entirely to the discretion
of the
SEC, may we suggest a
definite exemption 'of
any com

from

deben¬

the

SEC.

in¬

more

stated, we
believe that the pending bill will

of

corporation
distributed
locally
within the state of
incorporation

agements'
It

a

exempted

specific

provided

are

people,

of

a

by at

bearer

be

within

available

case

matter

using

company

SEC to determine whether or
not
it will
exempt such companies
The matter of
exemption is

Since the bill now under con¬
sideration provides for SEC juris¬
diction if the
securities, not
shares, of a corporation are held
either

any

The

short, it is within
and
jurisdiction of

made

"an

security

shares."

300

held

are

that

300

indirectly, through the issuance of
a
large number of transferrable

least

that

finan¬

statements

that

will

per¬

engaged in a public
distribution—if not directly, then

must

incorporation.

substantially all the securities

missive with

has

tions

of

report to

effect

has

the

recog¬

Opposition to the Fiear

crease

either

interested

be

may

left

so

and

that

Unlike

will

all

matter

be

panies
dual

be

the

it

should

of

resulting

than

the

thorities

alternative

should be encouraged rather than

happy to

that,- Senator.

It

the

by the

petitors,

are.

don't

thoughts, I wish

do

matter

a

security holders

thought. I

would

If

bearer

have

Senator

good

are

company could
stockholders
or

are.

in

their

a

its

shareholders

that

"stock¬

holders"

com¬

by state au¬
believe, are ade¬

protect

and

In

law.

statements

stock

changed

many

approved
we

to

have

would.

you

similar

principles

shareholders
idea

no

for

violation

state

and

persons

the

Securities Act of 1933, there is
no
never know
when, if ever, it be¬
intra-state exemption provided for
comes subject to SEC
jurisdiction.
companies
whose
securities
are
In this situation,
presumably, the held
principally by residents ..of
SEC would take the position that
the

nized

the

Senator Maybank: Thank
you; I

con¬

corporation

have

consequently

the

Accounting

com¬

to

certainly would be glad
tempt to supply some.

deben¬

or

with

I

definite

any

small

many

Boles:

securities

SEC.

which

to

as

to the

as

mediately

exclusively to

discretion

definite

drawn

so

pro¬

definite language?

know

left

are

and

question

be

Senator Maybank: Do
you have
any

These

matters

no

adequately

must

panies to
be
subjected
jurisdiction of the SEC.

of

2408

bill

certain

leave

having 300 or more se¬
curity holders, will be subjected
to the jurisdiction of the SEC?
Bill

to be

are

tected, the

of

or

scribed

a

company

penalties

formative

Concerns

a

insurance

or

to

as

Mr. Boles: Thank
you, sir.
One thing that
occurs, Senator,
is this: that if the bill
were im¬

"persons holding

directly or indirectly," so that
closely held corporation, with

by

Affected

at book

or

imposed

have

and

mean

mean

federal

cial

Uncertainty

creates

uncertainty

would

ject to the

security holders.

Thus, the bill

would

must

panies the tremendous expense of
keeping
duplicate books,
or
it

knowledge of
issuer, may over¬

penalties

required
carriers will

Ohio.

requirements,

al¬

the SEC requirements.

of

35

Continued from page 3

are

motor

states

quate

the

power to the SEC to deter¬
mine what is meant
by $3 million
in assets and 300

Other

and

have

we

governmen¬

For

all

(739)

pre¬

example,
all
companies, gas utilities

soon

this
as

in

be

required to keep accounts and

thorities,

affected

of debt

rules

state

our

Commission

bill until

its

will
those

electric utilities

the corporation without
notice of
such transfers would become
sub¬

but which may have debt
securities in the hands of 300 or
more

made

corporate

-

ready noted, these holders

the

subject such companies to
the jurisdiction of the
SEC, and

closely

are

has

SEC
with

reports in conformity with
uniform systems of accounts
pre¬
scribed
by the Public Utilities

night

appro¬

limiting

SEC

the

CHRONICLE

make

holders without the

con¬

companies

the

ready noted, the free transfer of
negotiable
securities
between

would

an

and

subject

are

by

telephdhd

know

never

they

Furthermore,

to
the
provisions of the
Securities and Exchange Act.
In order,
therefore, to conform

legislation to the general

will
not

or

by

FINANCIAL

ragencies^

be

or

three shareholders would be sub¬

the

tal

&

conflict

scribed

which will in turn determine

to the provisions of

jected

ception

they are
legisla¬

particular

and

whether

debt

300

direct

This bill is objectionable in
that it leaves to the discretion of
the SEC the definition of terms

companies

having

company

bonds

not

required

companies to be encompassed by
the
legislation. In consequence,

shareholders; and there¬

any

debentures,

the

or

tion.

300 shareholders.

This

body
must
have
available for deter¬

means

mining whether
subject to

COMMERCIAL

MO.—George

E.

est, in the interest of investors and in the interest of

sole proprietor

of

preserving our American way of life and to again
open
up the capital market so investment funds will
flow
more
freely into trade and industry.

&

Son,

408

Olive

36

THE

(740)

latest week

week

Business Activity
INSTITUTE:

AMERICAN IRON AND STEEL

operations (percent of

Indicated steel

capacity).

castings (net tons)

or

month ended

Previous

Montb

Week

Week

Ago

90.7

91.5

Feb. 19

1,729,000

1,744,200

that date,

on

production and other figures for the

cover

Dates shown in first column

month available.

or

Latest

Feb. 19

Equivalent tc—
Steel ingots and

statistical tabulations

The following

Indications of Current

Thursday, February 16, 1.950

FINANCIAL CHRONICLE

&

COMMERCIAL

in

or,

Year

Ago

95.0

100.0

1.810,300

Crude

oil

ana

(bbls.)
(bbls.)

Gasoline output

output

Kerosene

output (bbls.)

oil, and distillate fuel oil
Residual fuel oil output (bbls.)

Gas,

bulk terminals, in transit
Finished and unfinished gasoline (bbls.) at

Stocks at refineries, at

4

Feb.
Feb.
Feb.
Feb.

4
4
4
4

Feb.
—F^Feb.
Feb.

oil (bbls.) at

oil, and distillate fuel

Gas,

(bbls.) at

Residual fuel oil

Feb.

4,945,100

and in pipe lines—

at

(bbls.)

Kerosene

(bbls. of 42

average

(bbls.)

4
4

4
4

4.955,950

4,926,700

5,407,500

115,420,000

5.470.000

5,524,000

5,441,000

17,830,000

18,363,000

18,710,000
2,687,000

16,464.000

2,513,000

2,686,000

2.274,000

7,335,000

7,302,000

7,348,000

7,140,0u0

8,121,000

8,389,000

8,336,000

8,634,000

127,437,000

124.270,000

116,774,000

117,169,000

18,095,000

18.449,000

21,107,000

64,039,000

66,337,000

20,215,000
75,338,000

54,590,000

57,036,000

61,715,000

61,302,000

Revenue

Feb. 4
Feb. 4

Total

(number of cars)

§636,415

§506,947

682,143

§571,503

*§576,196

§471,344

600,032

!

U.

construction

S.

construction

Private

ENGINEERING CONSTRUCTION

ENGINEERING NEWS-

—

State

State

Feb.
Feb.

Federal

$193,494,000

$131,200,000

90,540,000

106.668,000

85,400,000

86,826,000

45,800,000

66,800,000

47,481,000

69,678,000

35,600,000

5,600,000

22,662,000

17,148,000

10,200,000

72,500,000

Feb.

construction
and municipal

Public

69,400,000

$160,683,000
70,143,000

MINES):

(U. S. BUREAU OF

(tons).

Bituminous coal and lignite
Beehive coke

6,540,000

7,500.000

5.650,000

Feb.

703.000

726,000

401,000

11,385,000
687,000

*20,500

23,000

161,300

15,400

Feb.

(tons)

PAYROLLS—U.

SALES INDEX—FEDERAL
AVERAGE=100

STORE

TEM— 1935-39

Feb.

*222

205

229

All

goods

All

5,970,919

6,062,095

6.028,589

5,722,086

INDUSTRIAL)—DUN

AND

&

BRAD-

195

Feb. 9

STREET, INC.

199

192

1

3.720c

of employees in

manufacturing

Finished steel

(per lb.)

Pig

gross

iron

(per

13.837c

3.837C

.__Feb.

7

$46.38

$46.05

$45.88

$46.74

Feb.

7

$27.25

$27.08

$26.42

$37.58

Feb

ton)

(per gross ton)

Scrap steel

METAL PRICES

goods

—

Domestic

refinery

at

benefits
endowments

payments

Lead

(New York)

Lead

—

_

_

18.425c

18.425c

23.425c

74.500c

74.250c

77.500c

103.000c

12.000c

21.500c

8

12.000C

12.000c

Feb.

8

11.800c

11.800c

11.800c

21.300c

Feb.

8

9.750c

9.750c

9.750c

17.500C

Feb. 14

103.75

103.79

104.32

101.59

Feb. 14

111.41

116.41

116.41

113.12

121.46

121.46

121.67

119.00

14

Feb.
). 14
14

120.02

119.82

120.02

117.00

Feb. 14

115.82

116.02

116.02

112.00

Feb. 14

108.70

108.70

108.88

105.00

>.
»»

1

Aa

A
Baa
Railroad Group

Utilities Group

Public

_

Industrials Group

Feb. 14

111.62

111.62

112.00

108.70

Feb. 14

117.40

117.40

117.40

113.31

Feb. 14

120.43

120.43

120.43

117.20

INSURANCE

LIFE

U.

S.

YIELD

BOND

Government

Feb. 14

Feb. 14

corporate

Average

Feb.
Feb.
Feb.
Feb.
Feb.
Feb.

Aa
A

:

-

Baa

.

.

Railroad Group

Utilities

Public

Group

Industrials Group

14
14
14
14
14
14

Feb. 14

COMMODITY INDEX.

MOODY'S

2.23

(tons)

2.39

-.2

INVENTORIES

MANUFACTURERS'
(DEPT.

Durable

NEW CAPITAL ISSUES
MIDLAND

(DEPARTMENT
November

3.06

3.24

3.24

3.23

3.03

3.08

3.06

3.24

2.78

2.78

2.99

Other

2.78

Proprietors'

220.321

180,379
87

4

383,173

337,735

399,645

343,983

Feb. 10

120.9

4

Less

PAINT

STOCK

REPORTER

DRUG

AND

AVERAGE=100

PRICE

TRANSACTIONS FOR THE ODD-LOT
DEALERS AND
SPECIALISTS ON

LOT

EXCHANGE—SECURITIES

Odd-lot sales by dealers

EXCHANGE

Number

PRICES

of

shares

Customers'
Customers'

(customers' sales)—

sales

Customers'

short

sales

Customers'

other

sales

27,823
822.964

28.330

total sales

——

Number of shares—Customers'

Dollar

Jan. 28

total sales
.

value

—

—

122.1

23.169

833,639

$34,501,271

123.2

sales

Other

sales

22,998

29,369

PRICES

farm

S.

DEPT. OF

Grain

Feed

grain

—

Textile
Fuel

686,555

$26,374,439

656,904

and

28,789

years

1946




2.3

2.2

2.0

44.1

•44.0

49.8

17.5

16.9

12.1

11.7

10.4

191.9

•191.2

192.8

239

INDEX

—

100—

—

hay_

10,014

9,916

Exports

Imports

Jan. 28

760,624

793,406

832,626

Jan. 28

$28,919,865

$29,546,513

$26,522,220

524,631
$19,857,563

269,550

261,610

348,130

160,876

269,550

261,610

303,470

products

271

206
212

224
234

159

163

181
412
240
157

:
_

eg&s

and

170

186

207

208

283

268

276

313

295

308

351

258

255
231

284
272

226

____

JZZ.

products

160,870

STATES

UNITED

217

EXPORTS

AND

IMPORTS-

BUREAU OF CENSUS—Month of

S.

at

December

,

*836,100,000 1,317,000,000
*593,700,000
719,748,000

STATUTORY DEBT LIMITATION

of

Jan.

face
any

$

$

$

942.8PO.OOO
605,000,000

GOVT.

—As

Total

348,130

243

208
215

251

136

omitted):

(000's

31

that

amount

be outstanding

may

;

time

one

$275,000,000

$275,000,000

$275,000,000

256,865,375

257,130,340

252,721,282

27,029

29,769

26,110

$256,892,405

$257,160,110

$252,747,393

741,851

746,897

785,345

$256,150,554

$256,413,212

$251,962,047

18,849,445

18,586,787

23,037,952

$256,892,405
5,048,918

$257,160,110
4,679,048

$252,656,167
4,659,251

2.205%

2.208 %

Outstanding—

289,140

176,370

259,610

7

151.4

157.0

157.2

155.5

155.3

163.2

158.5

160.7

160.1

148.4

151.6

*151.2

199.2

197.8

192.6

195.1

156.0

*154.6

155.9

159.4

207.3

Feb.

7

211.5

208.1

210.7

Feb.

7

145.1

*145.2

145.2

151.8

-Feb.

Feb.

7

7

137.4

137.4

137.4

145.2

130.5

130.4

130.4

137.1

gross

public

Guaranteed

debt

obligations

not

owned

the

by

and

guaranteed

obligations
outstanding public

total

Grand

Balance face
under

UNITED

debt

obli¬

*169.5

169.5

175.8

190.3

200.9

As

115.8

115.8

116.0

122.8

General

outstanding
of obligation issuable
authority

amount

above

STATES

*190.9

and

debt

gations not subject to debt limitation—

169.3

ths

public

gross

Deduct—Other

191.2

barrels of foreign crude runs. tThe weighted finished steel composite was revised for
1941 to date.
The weights used are based on the average product shipments for the 7 years 1937 to 1940 inclusive
to 1948 inclusive.
SReflects effect of five-day week effective Sept. 1, 1949.
filncludes 487,000

2.2

2.2

2.2

__

and

Poultry

20,307

4,701

lighting materials
metal products

figure,

20.3

AGRICUL¬

1914

——

animals

Meat

$27,419,644

GROSS

DEBT

GUARANTEED—(000's
of

Net

31

Jan.

fund

Computed
♦Revised

♦21.5

17.6

crops

Livestock

10,906

and

Building materials
Chemicals and allied products

16.9

21.9

155

20,056

products

and

Metals

39.8

17.4

149

534,547

Feb.

--

and foods

♦40.0

17.4

403

28,653

Poods

than farm

62.7

39.3

LABOR—

1

other

*56.9

231

837.327

Jan. 28

137.5

139.7

57.2

375

Total

Meats

216.6

•133.6
♦135.8

224

804,312

Grains

commodities

•209.0

133.6

135.8

Cotton

770,638

Livestock

All

209.7

Tobacco

Jan. 28

products

Farm

£6,578,000

Oil-bearing crops

•

All commodities

£8,446,000

_

_

OF

July,

products

Food

Total

SERIES—U.

£10,995,000

Crops

282

Jan. 28

NEW

19,300

dividends

and

DEPT.

15:

29.087

dealers—

1926=100:

16,800

-

Treasury
WHOLESALE

17,600

-

-

FARMERS

BY

November

of

267

Jan.28

of shares

Number

$30,600

$33,800

social

for

income—

1909

23.691

Jan. 28

Round-iot purchases by

17,900

•$30 800

_

income

income

S.

28.063

sales
:

$15,900

*16,900

payments

August,

140.4

U.

Short

interest

Dairy

Round-lot sales by dealers—
Number of shares—Total

•$13,900

17,000

__

_

..

_

rental

RECEIVED

Jan. 28

short sales

other

$13,600

Unadjusted—

$33,473,610

of orders—Customers'

Number

$1,808,000

industries

__

and

transfer

Truck

_

Odd-lot purchases by dealers

$1,861,000

Fruit

Jan. 28

_

262,000

$1,901,000

—

__

contributions

TURE
As

_

January

of

_

_

NUMBER —U.

COMMISSION:
—

370,000

267,000

income-

nonagricultural

(customers' purchases)—

value

labor

Total

ACCOUNT OF ODDTHE N. Y. STOCK

of orders

Number

Dollar

INDEX —1926-8#

—

_

employee

insurance

All

OIL,

$1,176,000

416,000

308,000

__

Government

Personal

74

industries

Service

Total

170,281

_

industries

2.85

210,930

_

Distributive

2.66

92

$1,178,000

395,000

COMMERCE)—Month

producing

2.85

178,695

$1,198,000

receipts, total
disbursements-_

employer

2.86

208,433

80,727,000
$333,180,000

billionsi:

income

Commodity

2.65

91

4
4

Total

2.80

374.6

38,638,000
$276,654,000

BRITAIN-

IN GREAT

OF

(in

personal

2.70

350.3

83,640,000
$339,057,000

IN THE TTNVEO STATES

INCOME

PERSONAL

3.45

_

___

_

LTD.—Month

BANK,

2.65

355.8

__

_

of

_

_

Sales

2.57

358.9

8,812,000
18,641,000
50,796,000

dollars):

_

2.83

2.79

7,867,000
19,689,000
51,073,000

SERIES—

______

2.83

2.63

-

SALES

&

of

_

Nondurable

2.58

2.63

$131,229,000
42,975,000

Inventories:

2.83

2.63

(millions

November

of

NEW

COMMERCE)

OF

Month

2.58

202,942

Feb.
Feb.

Percentage of activity—
Unfilled orders (tons) at

2.18

243.603

Feb.
Feb.

(tons)

received

Orders

2.22

$120,828,000
38,559,000

— INSTITUTE
Month of Novem¬

Industrial

3.00

NATIONAL PAPERBOARD ASSOCIATION:
Production

—

Ordinary

Total

DAILY AVERAGES:

Bonds

$132,673,000
37,933,000

omitted:—

(000's

Wage and salary
MOODY'S

15, 368.000
8, 352,000
7, 016,000

PURCHASES

INSURANCE

ber

23.200c

18.425c

8

*13,888,000
*6,984,000
*6,904,000

59,180.000

values

dividends

Total

Bonds

Average corporate
Aaa

18.200C

8

.Feb.

PRICES DAILY AVERAGES:

Government

S.

18.200c

8

.Feb.

Feb.

at

(East St. Louis) at.

MOODY'S BOND
U.

at

at

Louis)

(St.

Zinc

18.200c

.Feb.

13,776,000
7.023.000
6,753,000

8,534,000
17,097,000

—

payments

Surrender

_

_

Total

.

Export refinery at
Straits tin (New York)

362.3

LIFE

INSTITUTE OF
of December:

—

Group

Electrolytic copper—

155.9

*320.8

TO

PAYMENTS

INSURANCE—BENEFIT

Matured

QUOTATIONS):

& M. J.

(E.

7

*138.8

313.5
manufac¬

r

_

goods

Nondurable

LIFE

OF

3.837c

137.4

industries—

turing

LIFE

■RON AGE COMPOSITE PRICES:

*11,367,000
*5,655,000
*5,714,000

129,897,000

indexes—

number

Estimated

Policy

207

11,256,000
5,689.000
5,567,000

229,814,000

of

*

goods

Total

FAILURES(COMMERCIAL

206,115,000

manufacturing

Disability

.Feb. 11

228,053,000
255,075,000

manufacturing

Annuity

INSTITUTE:
Electric output (in 000 kwh.)__

KDISON ELECTRIC

336,012,000

211,840,000
275,584,000

workers)

(production

POLICYHOLDERS

227

483,128,000

Payroll indexes—

Death

RESERVE SYS¬

487,424,000

DEPT.

S.

SERIES—Month

LABOR—REVISED

manufacturing

INSURANCE—Month
DEPARTMENT

$863,561,000
380,433,000

$565,826,000

428,051,000

November:
All

All

Feb.

(tons)

Pennsylvania anthracite

$915,475,000

!

Federal

Durable

COAL OUTPUT

$58,600

Municipal

and

Employment
$141 900,000

Feb.
Feb.

construction
Private construction
S.

*$54,400

_

construction

Public

Durable

RECORD:
Total U.

$54,100

—

January:
Total

Nondurable

CIVIL

9,700
15,000

ENGINEERING CONSTRUCTION — EN¬
GINEERING
NEWS-RECORD — Month
of

60,012,000

§612,524

$33,800

9,200
14,500

CIVIL

OF

AMERICAN RAILROADS:
(number of cars)
freight received from connections
loaded

Revenue freight

Ago

*$30,700

_

EMPLOYMENT AND

ASSOCIATION OF

YeaK

Month

9,200
14,300

—

—

Retail

Feb. 4

gallons each)
runs to stills—daily average

Previous

Month

$30,600

—

_.

!.

Wholesale

Crude

Latest

dollars):

of

Manufacturing

AMERICAN PETROLEUM

of that date:

are as

DEPT.
OF COM¬
SERIES —Month
of Nov.

NEW

(millions

1,843,500

either for the

INVENTORIES,

BUSINESS
MERCE

■—

INSTITUTE:
condensate output — dally

of quotations,

cases

are

balance

annual rate

debt

♦Revised

_

figure.

DIRECT

AND

omitted):

$251,843,*7* $252,481,062

2.222%
$247,996,916

Volume 171

Continued

Number 4882

from

THE

<

COMMERCIAL

that

which is

management

policies,

and

stimulate

can

spark the economic machine.

give full scope to the dormant
energies of American industry.
I

commend

preferred

to

all

reading,

of

you,

as

study

a

by

investment

capital

that

the

is

both

and

10 per

against

which

could

ordinary

capital

on

Later

pos¬

gains

tax

it

on,

was

I would

means
was

He said,

making the acceptance of capita
gains optional, you cannot levy or
the rich through a
capital gain.'

especially small incomes—bear
tax

burden

a

than

those of citizens not

owning stock.
Considering the importance of the
stockholder

in

our

economy, can
there be any excuse for this
dis¬
crimination? The answer is "no."
Now

to

as

would

the

and

that

measures

the

remove

vestors

fears

of

in¬

of

last
to

sweeping tax cut
Spring, and I quote: "It seems
me
that, under a system of

private enterprise, which depends
for its existence

tax system

our

indicated

and

in

the

which

I

have outlined. A
variety of remedies are, of
course,
necessary,
but
what
we
need
above
everything else are na¬
tional policies and
attitudes that
recognize the investor as indis¬

pensable
in
the
processes
which jobs and
opportunities

by
are

created.

I

am

amazed, in my contacts in
different parts of the
country, to
discover how few people realize
the extent to which
incentive has
been destroyed in this
country. I

have

never

proper

encouragement,

nomic
such

understood this. Given

machine
rate

a

needs

of

eco¬

not

prosperity

nation, but adequate
the

our

operate

to assure

as

and

progress

will

only

for

of

policies

not
I

be

The

shaped

so

restore

say

needed

to

the

activate

incentives

the

business¬

the
enterpriser.
Thus, a
dynamic economy can be devel¬

man,

oped

in

tainly
Such

the

attain

can

of

come

be

which

country

a

cer¬

national

$300,000,000,000

or

in¬

attained

centives.
of

that

the

With

a

national income

size, the
debt

war

cost

and

of

carrying

its

relation to
economy will assume proper
proportions.
The obstructions to
the investment of
equity capital
have prevented our
the

capital

kets

from

value

of

present

reflecting
private

$257,000,000,000,

true

wealth.

The

not

debt
to

of

mention

many other forms of

debt, is

pared in the public

mind

national wealth of

mar¬

the

Government

com¬

with

a

the conclusion that the

bankruptcy.

country is

It

is

of

confidence

not,

of

course.
*

The

will
tax

require, however,
philosophy which

change in

a

based

was

the

policies are retarding investment
ownership. They are
eliminating
the able, the
competent, from the
fields of enterprise.
Our
as

tax

complex

matter

problem

is

really not

it appears.

as

It

is

a

of

choosing those taxes
which retard enterprise the
least.
Let us take a familiar
man

is

with

true

pack

a

that

the

his back.

on

heavier

the

pack, the greater the handicap.
But, it is also perfectly clear that
a pack
skillfully adjusted can be
carried

more

readily

than

which is badly
arranged.
of
are

can

our

one

Because

obligations,

there

limits to the reduction which
be made in the over-all
tax

burden.
the

heavy

tax

But,

we can

load in such

re-distribute
a

of

new

in

money

enterprises."

our

of

into

interfere
a

features

of

a

new

with

I

have

ditions

have yet

outrages

the

It has

investor's

time

of

sense

equal to 10 per cent of their divi¬
dends
in
computing their tax
liability. This would be an en¬

tice

which

of

into

crept

as long ago as 1913.
Another serious
inequity in the
tax
structure
which
has

very

damaging
capital

is

consequences

gains

tax.

There

the

is

an

way as




to

of

the week ended Feb.

12, 1949, and 585,974,000 kwh. in
corresponding period two

It also represented

decrease of 69,619 cars, or 10.2%, below

a

the

corresponding week in 1948.

it

is

18%, below

or

According to "Ward's Automotive Reports" for the past week,

motor vehicle production in the United
States and Canada
mated at 130,640 units

today will dis¬

re-lighted

cars,

AUTO OUTPUT TURNS UPWARD IN LATEST
WEEK

checked

are

excess

years ago.

shipments.

list of alarming con¬
trends that are en¬

trends

HIGH

electrical

corresponding week in 1949, and 134,412

compared with the
127,428 (revised) units.

of

Both

General Motors and

Ford

is esti¬

previous week's total
,s

Motor

Co.

increased vol¬

ume slightly
last week, the agency said. GM plants are still
operating at record daily production levels, despite the over¬

any¬

time curtailment announced the past week.

Commenting on the coal shortage, Ward's said that the
automotive industry's stocks of steel are
adequate for present

its

are

directed to

potentials.

people

I

everywhere

effective

The total output for the current week

believe
be

can

in

was

and 22,338 trucks built in the United
2,145 trucks built in Canada.

cars

made up of 100,827

States

reversing dan¬
by constantly draw¬
ing attention to every tax, every
attitude, and every action that is
suspect, as regards their effect

and

incentive, enterprise, and in¬
itiative.
In doing this, they are
contributing to the common wel-

Commercial and industrial failures
dipped to
ended Feb. 9 from 199 in the

ware.

National

policies must

be

modernized to fulfill the needs of

long, how¬

amount

Loading of revenue freight for the week ended Feb. 4,
1950,
612,524 cars, according to the Association of American
Railroads.
This was a decrease of 23,891
cars,
or 3.8%
below
preceding week this year, due principally to a reduction in coal

ir.

upon

easy remedy for this tax which,
to be realistic, is not a tax
but a
form of confiscation. It has been
in our tax structure so

FROM ALL-TIME

totaled

owr

gerous trends

system

RECEDES

needs.

most

tax

our

95%

policies in general
that

injus¬

an

was

Our enterprise system will con¬
tinue to grow if national economic

release

long

a

the rate

ago

the

these

before

this

CARLOADINGS ADVERSELY AFFECTED BY REDUCED COAL
SHIPMENTS

where.

been proposed to
allow individuals to take a
credit

correction

his

integrate, and once the light of f
great, free, industrial economy k
extinguished here it may be a long

justification
particular tax policy. It
it is unsound and it

unjust,

fairness.

for

arbitrary

attempted

Unless

this

an

OUTPUT

of the output reported for the

dangering a nation grown greal
through the magic of incentive

tax

A month

tc

merely
a

announced

energy distributed by the electric
power industry for the week ended Feb. 11 was
estimated
5,970,919,000 kwh., according to the Edison Electric Institute.
It was 91,176,000 kwh. lower than
the figure reported for the
previous week; 248,833,000 kwh., or 4.3% above the total
output

o

becomes apathetic

and

Institute

light and

cai

time

much that we have

is

use

judgment because of

quota¬

Steel

at

The investor whc

taxation of dividends.
to hear any
logical
for

You

regard to risk-bearing and find.'
shelter in tax exempt securities.

our

The

dete:

functioning

he cannot

structure, and that is the double
I

to

one.

the

free market.

factor

and

RECORD OF WEEK AGO

stop him from using his own besi
judgment and thereby needlessly

point out

indefensible

is

people

construc¬

End

do

can

ELECTRIC

taxpayer from selling an olc
capital asset and from putting
money

Iron

a

Bj

wealth

Our Canadian
neighbor has put
his finger on
one
of the
most

a

cars

in the

BUSINESS FAILURES DIP FURTHER

Inc., reports.
a

Casualties were' only slightly more numerous than
when 192 occurred in the comparable week, but
they
considerably above the 128 in the similar week of 1948.

year

were

195 in the week

preceding week, Dun & Bradstreet,

ago

Failures continued to be about two-thirds

dynamic America.

5,330

and

The week's total compares with
108,911 units produced
U. S. and Canada in the like 1949 week.

1939, when 318

war

concerns

as

numerous

in pre¬

as

succumbed.

Casualties

Continued from page 5

involving liabilities of $5,000 or more decreased
162 and were also lower than a
year ago when 162
failed in this size group.
Small failures having liabilities
under $5,000 declined to
36, but remained above the 1949 level.
Wholesale, construction and service failures fell
to

159 from

concerns

The State oi Trade and

Industry

national

metalworking weekly, in its current summary of the steel
are gambling on an early
resumption of coal ship¬
If they lose, and there is another week
of no coal mining,

trade.

They

ments.

major segments of the nation's
bang!

industry will shut down with

a

Demand
showed
ments

for

case

in recent weeks, this trade

cold-drawn

authority notes.

bars, hot-rolled bars and wire products

upturn. Several companies have orders and commit¬
flat-rolled items sufficient to
carry through the second

an

on

,

during the

week, while manufacturing and retailing casualties increased to 47
and 104, respectively.
In both wholesale trade, where failures
dropped to 22, and in construction, where
they fell to 9, casualties
were

less

than in the comparable week last
year.

numerous

Other

industry and trade groups, however, continued to have more con¬
failing than in 1949.
Geographically, the week's decline was concentrated in the

cerns

Demand for steel continues at a
very high level. Steel company
sales meetings this week reflected an even more
optimistic tone

than had been the

Pacific and South Atlantic States.

The Middle Atlantic and the
East North Central States
reported increases.
Almost no change
from last week appeared in other
regions.
Four areas, the New

England,

Middle

Atlantic,

Central States had fewer

West

North

concerns

Central

failing than

and

East

year

a

South

ago.

quarter.
How much of this intense demand is due to

seeking to get
down

for

jittery

order books because of the threat of
of coal is the big question

on

lack

a

consumers

steel shut¬

bothering steel sales

executives, declares "The Iron Age." Customers offer little help
in answering this
question, as all insist that their orders are based
real needs.

thing is certain, steel's best customer, the auto industry,
is going to push output as
long as the steel supply holds out and
auto demand holds up.
Although the Chrysler strike has idled
about 150,000 workers,
including 89,000 strikers, other firms are
driving for the biggest possible share of the market. These firms,
including parts suppliers, are not following General Motors' re¬
striction
of

on

overtime in its

assembly plants.

Should the coal crisis continue and force further
curtailment
steelmaking, there are three limited sources of steel

supply

open

to

consumers

this

trade

magazine

houses, (2)

Steel company stocks and

sources

not

can

supply

as

much

as

points

out:

(3) Conversion.

(1)

this

Ware¬

galvanized sheets.

authority adds, are unanimously in
items, especially hot-rolled, cold-rolled

A few warehouses

are

already completely

out of popular sizes and
gauges of these items.

comparatively

good

supply.

These

Some other items

include

structural,

plates, hot-rolled bars and cold-drawn bars.
Steel

companies Which had to deplete their inventories to sat¬
isfy customers following the strike have not been able to
replenish
them because of

persistent demand.

conversion

is

steel

one

Sept.

a

the

cent

13,

to

Dun

&

stand

at

1949, when it

rise of 2.5%

playing

drive for high production.

an

Although small tonnagewise,

important role in the automotive

Some companies will be able to turn

over

the

same

week

a

year

figure shows
when the index

ago

dropped sharply from $5.88 to $5.66.
Price changes this week included

a sharp upturn in fresh beef
barley, butter, cheese, eggs, potatoes*
hogs and lambs, while declines were listed for flour, wheat,
corn*
rye, oats, hams, bellies, lard, sugar and cocoa.

and

moderate

The
of

31

advances

index

foods

in

in

represents the

general

DAILY WHOLESALE

sum

total

of

the

price

per

pound

use.

COMMODITY PRICE INDEX CONFINED

TO NARROW RANGE

they did during the steel strike

trade

short supply of flat-rolled

in

advance,

For the first time since Aug. 31, 1948, the index
is above the level of the
previous year.
The current

The general level of wholesale
prices showed little

past week.

Warehouses,

are

Marking the third successive weekly
Bradstreet wholesale food price index rose
$5.80 on Feb. 7, the highest level since

But these

last fall.

and

WHOLESALE FOOD PRICE INDEX ATTAINS HIGHEST
LEVEL
IN FIVE MONTHS

registered $5.85.

One

symbol—

the

It

their

you

idea.

the

finds that

tion.

on

restoration

false assumption that
the
United States had reached a
posi¬
tion of economic
maturity. These
on

risk

$310,000,000,000

figured at pre-war prices. As a
result, many people have reached
near

creation

willingness of

All

absurd

an

larger.

income certainly cannot
soundly without in¬

an

a

and

depend, for full employment
the

tive

depend,

over-due

tax

our

to

we

for

policies,
policies,
shaped again. Why
try incentive?

should

where

the

on

matter

a

for the future under

concern

system

It is

...

couraging first step toward

around incentive has been
demon¬
strated in the past.
Our

particularly

of

the

revenue

Government.

effectiveness

at

steady flow

of

must

causes

a

venture capital, we cannot af¬
ford to neglect the implication of
this defect of double taxation in

businessmen. The
steps that should be taken to sub¬
stitute confidence for

anxiety are
four
principal

on

tax.

is

American

1,810,300 tons; a year ago it stood
at 100% and 1,843,500
tons, and for the average week in 1940,
highest prewar year, at 1,281,210 tons.

revenue

Finance

and

"The

that the

to 1,744,200 tons one week
ago.
and production amounted to

regarded as a
of "soaking the rich." This

Canadian

modern nation.

quote

shut down,

are

'

was

Minister Douglas Abbott.
in announcing a

to

if blast furnaces

even

decline of 0.8 point from last week's rate of
91.5%.
This week's operating rate is equivalent to
1,729,000 tons
of steel ingots and castings for the
entire industry compared

of the

like

stockholders—

is

not more than three

Originally, the objective

ingots

operating rate of steel companies having
93%
the steel-making capacity for the entire
industry will be
90.7% of capacity for the week beginning Feb. 13, 1950. This

be

that

heavier

37

of

income

versity of California, who shows
of

The
week

cent,

months.

gradual

basic

losses

ing period to

elimination of double taxation

a

out conversion

widely favored would be

sible in

incomes

(741)

Iron Age" concludes.

each year, and to reduce the
hold¬

and

Canada is showing the way by

dividends

elimina¬

Professor W. L. Crum of the Uni¬

much

,

equity

demonstrating

complete

$5,000 the amount

of

offset

monetary, tax

its

to reduce the rate to
to increase to

On Economic Horizon
debt

CHRONICLE

tion is too much to
expect at this
time. An approach to a solution

Underinvestment—Cloud
wise

FINANCIAL

16

page

ever,

through

&

The daily wholesale

247.09

on

Feb.

with 254.74

on

7.
the

This

change the

commodity price index, compiled

by Dun & Bradstreet, Inc., moved in
compared

a narrow range

with

246.95

corresponding date last

a

and closed at

week

ago

and

year.

Grain markets

on the Chicago Board of Trade were some¬
what unsettled last week with some deliveries of
wheat, corn
rye selling at new lows for the season and
May wheat

I

and

dropping to the lowest since last September.
Cash grains were mostly inactive with
prices generally lower
a week ago.
Weakness was attributed to general liquidation
induced by relatively slow foreign and
than

uncertainty
stocks of

created

wheat,

corn
i

domestic demand, and
by Washington developments.
Large loan
and other grains still owned by the govern>'

Continued

on

page

33

38

(742)

THE

COMMERCIAL

Continued from page 37

Continued

The State of Trade and Industry
ment

and

reports

of

&

FINANCIAL

from

Demand

for

cocoa

sale of bakery products.

slower

was

values trended

and

lower in

both the actual and futures markets, reflecting recent substantial
arrivals.
Lard price continued to ease as the result of scattered

liquidaion and lagging demand.
Hog markets continued to
strengthen as further curtailment of receipts pushed values to the
highest level since last October. Cattle prices were fairly steady
during the week. Lambs sold sharply higher as demand continued
to broaden.

in

a

advanced 4 points after moving irregularly

New crop contracts

during the period.

range

narrow

very

The New

prices showed little net change last week.

Cotton

York spot quotations

made the best showing in the futures

Sales

in

volume

the

ten

spot

.market.
markets fell

sharply,

the

cessively urged

the Congress
under tne pretense of protecting
the investor, have instead acted as
a
straitjacket
on
the
capital
upon

markets.
As matters now

the

stand,

ties

but

none

largest and strongest

corpora¬

readily register securi¬

can

with

the

and

SEC

and functions of the SEC
duplication of powers and

powers
are

a

functions

the

of

commissions.

The

nied

Senator Burnet Maybank

raised

the

occurred in
legislation.

general
capital
practically de¬

Access
has

been

the

to

the

to

and

medium-sized

Take

the $2,749,820,215

of bond

with the SEC and cleared for cash

cents and 30.50 cents for

sion's

mid-January last

year.

Entries of cotton into the 1949 government loan stock dropped
sharply in the week ended Jan. 26.
Totaling only 92,936 bales,
they were the smallest since early October and compared with
151,952 the week before and 94,907 in the like week a year ago,
Entries for the season through Jan. 2-3 aggregated 2,877,194
bales, as against a total of 4,402,000 bales to the same date last
season.
Reports from the cotton belt indicated a continuation of

unseasonably

weather.

warm

RETAIL TRADE HIGHER IN
OF SEASONAL

SECTIONS WITH RETURN

SOME

TRADE

WEATHER—WHOLESALE

DOLLAR VOLUME FRACTIONALLY ABOVE

LIKE

WEEK OF 1949

the

overall

dollar

administration

volume

in the period ended on Wednesday of
steady with the previous week. Sales volume
slightly below the level for the similar period in 1949, accord¬

ing to Dun & Bradstreet, Inc., in its current summary of trade.
Widespread promotions continued on a variety of merchandise.
While the purchasing of men's suits and

weather.

increasingly

sought

in

experiencing

areas

mild

Many women remained* apathetic toward dresses in the
high price ranges.
The sale of lingerie increased

medium

to

slightly.
Shoppers
demand

also

for

bought

fish

slightly

food

more

The

week.

past

the

moderately; poultry, especially ducks, was
The purchase of fresh meat continued steady, while

popular.

rose

the interest in fresh produce dipped fractionally.
The volume
bakers' goods and dairy products increased somewhat.

of

corresponding

week

1949,

in

large

appliances,

television

sets

were

were

fast-

a

a smaller extent than last week.
Many other
in decreased demand.
There was as much con¬

buying of furniture, drapery and housewares as in the
previous week, although the interest in floor-coverings and lamps
sumer

Total retail dollar volume for the period ended on Wednesday
of

last

estimated

was

Regional

ago.

year

ago

week

be

to

from

estimates varied

2

to

from

below that of

6%

the levels

of

a

a

year

by the following percentages:
East and Southwest —1

to —5;

Tele¬

South and Midwest —2 to

—6; Northwest and Pacific Coast —4 to —8 and New England
0 to —4.

with the week

previous.
Total dollar volume of orders was
above that for the comparable period a year ago.
The number of buyers in attendance at wholesale centers con¬

even

fractionally

tinued to drop slightly from

Department

store

the record high of i three weeks ago.

sales

on

a

basis,

country-wide

as

taken

Continued from page

At the other end of the scale,

ing.

deal

of

four

weeks

ended

Feb.

1950, sales reflected a
decrease of 1% from the corresponding period a year ago, but for
the year to date show a decline of 6%.
4,

Retail trade in New York last week showed marked

ity,

but

sales volume

failed

to

come

up

to

the

level

activ¬
of

a

the

possible

York

week

the four weeks ended Feb. 4,

from

the

decreased

like

week

of last

1950,
year.

a

decrease of 3% was reported

For

the

year

to date

volume

by 8%.

NOTE—On another page

of this issue the reader will find the
most comprehensive coverage of business and industrial statistics
showing the latest week, previous week, latest month, previous
etc., comparisons for determining the week-to-week trends
of conditions, by referring to "Indications of Current Business
Activity."
year,




than

power

now

an

revi¬

statutes,

extension

of

the

being sought by the
:

sec."

5

time,
r

of Point Four suggests

of this measure by insisting that American,
purpose must be not less than $60 or $7(L
target which is only

slightly

,

see

you

any

sound American interest

served by a

sound American interest canActually, any loans made to a borrowerunder Point Four must inevitably be a disservice both to him and
to America.
Whenever, in the normal course of business, a bor¬
rower comes to a lender, he is expected in due course, assuming

By way of contrast, consider the
of municipal finance, with

field

which
tute

the

SEC

barred

is

by sta¬

nities

that

funds

sider

the

undoubtedly

them

of

have

unable

been

raise

to

they needed.

the

of contrast, con¬
billion a year that

way

$10

people of the United States
gaily risk on bingo and other
of betting, without let or

now

kinds

hindrance from the SEC.

could

cooperate
government, he should
expect either an adjustment in the terms of his financial obliga¬
tion or complete relief from such financial obligation.

into

In other words, if he does

the political purposes of this

in furthering

venture

capital investments to in¬
productivity of our
mammoth industrial machine, an
abundance of the good things of
this life would be assured to all
the

crease

this basis that any sound loan can be
Unfortunately, Point Four, as embodied in the

is only on

letter of his financial bond.*

If these

channeled

be

to

made.
Kee Bill, at'
once puts the borrower on
notice that any loan he gets from us
must be so utilized by him as to "promote the foreign policy of
the United States."
Accordingly, he may rightfully assume that •
any such cooperation on his part with this country, for the pro-»
motion of a purpose that is essentially political, is a consideration
in making the loan.
He has a perfect right to assume that such
cooperation is a practical quid pro quo on his part.
Therefore, having rendered performance in political currency,
he has every right to expect that he should not be held to the
It

forced to submit to the SEC's red

most

of his

ness

income

their

sold

back prin¬
by the
sound¬
project, and the ability to realize from it a sufficient'
pay costs, and to permit the retirement of principal.'

cipal and interest. A careful examination of his prospects
lender necessarily considers his capacity "as a borrower, the

Had the commu¬
bonds been

public for cash.

fashion.

application has merit in the first instance, to pay

his

During the
same
12-month period, 5,466 mu¬
nicipal issues aggregating more
than $4 billion were sold to the
interfering.

from

It is most unlikely that any

A.

Any loan made on this basis constitutes an
If this point is not made clear to the

fault.
it

Americans.

invitation to de¬
American public,

soliciting approval under false pre¬
and its authors become guilty of gross misrepresentation.

means

tenses

that Point Four is

>:<

*

:{:

Senate Measures to Finance Small
Four

The

has

Senate

evidence

that

financial

needs

In the

ness.

Senator
duced

it

to

Senator

Joseph

C.

intro¬

O'Ma-

struck first

This is a one-way "Heads-tails-you-lose" proposition, in which the American tax-'
payer foots the bill.
It is furthermore a bill which he is asked
in advance to underwrite without knowing how large it will be. •
I-win,

by the fact that both
completely by¬

Point Four

of these proposals

the

pass

SEC,

and

as

second

that,

of

them

These
'

tion
any

the first day of

these hear¬

year

ties.
the

study of trading
A more fruitful

Congress

would

be

revision

curities

in securi¬

study, which

itself should make

the re-examination

of

all

of

the

federal

and

the fact that the

been

qualifying

making loans to foreign borrowers, many

as

sovereigns

two government agencies

have

of

"under-developed

presumably

may

require.

a

for Reconstruction and

It

says

your

provide:

technical character which appli-;

Point Four, therefore, repudiates;

International Bank ^

Development and implicitly censures them.

in effect to these two institutions:

as

doubtful

good American capital

purposes

of Point Four,

(

"You have failed in.

jobs."

Insofar
the

areas.'U

during the years of their opera-:

developed able and ample technical staffs to

information and advice of

cants

Export-Import

Reconstruction and Develop¬

the' efforts of the Export-Import Bank and the

se¬

legislation which I men-

both

have

ment

kets.

On

largely ignores

Bank and the International Bank for

their purpose is,

ings, the SEC suggested that Con¬
gress authorize it to make a two-

needy
How-

ful, the U. S. Treasury pays the bill.

to

36 regional banks to help
business financially. One is

up

small

it will deceive the American public by

since the United States Government is asked to underwrite
these loans, it means in effect that Uncle Sam will hold the bag.
In the unlikely event that private loans so introduced by Uncle
Sam are successful, the private lender will profit.
If unsuccess¬

broader

a measure

the first place,

ever,

lending to small enterprises,

honey has sponsored
set

has

permit

politically-promoted Point

causing it to believe that sound loans have been made to
foreign borrowers on a business basis by private capital,

busi¬

days alone,

Lucas

bill

a

economy?

American

the

In

A.

the

to

smaller

ten

on

the likely effects of

are

ample

alert

is
of

last

Scott

a

given

What

Q.

regulation from the capital marr

New

rather

existing

appropriations to Congress from time to

this

be served in this

1950, fell 3% from the like period last year.
In the preceding
no change was registered from the similar week of 1949.
For

in

the

of implementing Point Four.

scope

for

Can

Q.

Financing

City for the weekly period to Feb. 4,

sales

of

forbidding, namely, $50 billion.

less

Flourishes

Congress
would
remove
the
straitjacket
of
oppressive SEC

store

Se¬

sion

billion.- Senator McMahon sets up a

they would be unnecessary if the

According to the Federal Reserve Board's index, department

purpose

investment

Interference,

SEC

From

Municipal

commendable

year ago.

the

it will easily understand

necessity for a complete

One of the more enthusiastic advocates

SEC

Free

while

the

ar¬

.

politically-promoted Point Four?

RFC

For

recommend

should
for the

registration. This is
appalling in a nation of 425,000
corporations, most of which ought
to be expanding with our growing
population.

1950, declined 1% from the like period of last year.
In the orea gain of 2% was registered from the like week of
1949.

1946

the;investor
protected; but in

been

Point Four "in Court''

were willing to endure
elaborate and expensive or¬

from the Federal Reserve Board's index for the week ended Feb. 4,

ceding week

agency,

unlisted corpo¬

of

cre¬

SEC and how

not

the

Exchange Act to cover a

number

large

Business By-pass the SEC

Trading in the nation's wholesale markets remained virtually

problem

extending

of

"Instead

curities

acts

the

instances thoroughly mis¬
led, by this so-called 'protective'

ticle:

only five bond issues of less than
$1 million were cleared for cash
sale by the SEC. In other words,
only five companies with financial
needs
in this
relatively modest

funds

limited.

was

Bell

his

in

these

in

many

no

your

Murray

intent of

$2,025,821,178 of this debt financ¬

the

de¬

selling item, but to
appliances

ended June 30,

mammoth

Senator

Commis¬

system, 14 giant electric
and
gas companies
and 8 other
huge corporations accounted for

Also, by

still

the

in

year

The

tape,

spite the existence of extensive February promotions.

Among

1949.

would

The dollar volume of house-furnishings dropped to a level

slightly below that for the

fiscal

coats remained lim¬

ited, there was a slight gain in demand for women's apparel.
Sportswear and inexpensive dresses were generally popular with

suits

investors

to

the

of

of the

has

Committee
than the following observation of
confronts

of

conditions

ated

SEC

find

can

the

the SEC done
than good?
Has the

phone

the

last week continued

spring

sale

registered

I

statement

better

category

Although retail buying in some parts of the country increased
noticeably with the return of seasonal weather to those sections,

was

issues

debenture

conclusion,

that

parity price for the staple was in line
with trade expectations and placed the latest figure at 29.88 cents
a
pound as compared with a mid-December quotation of 29.76

and

In

by

Has the Com¬

out

capital
markets comparable to prohibition
in the liquor trades and with the
of Black Markets created by the
OPA?
After Congress' has . thor¬
oughly investigated the workings

case

Misled"

Thofoughly

the

Has

harm

more

a

might not in some respects amount
to "an invasion of states' rights,"
and
similar invasions have
al¬
ready

and

economy

carried

Congress?

question whether Senate Bill 2408

earlier

acts

national

the

administra¬

the

of

effect
during
time through which

these

of

the SEC has lived.'

regulatory
understand
that

get them

smaller companies.

the

in

advance

they should have an
investigate

workings

mission

state

I

markets,

counter

-

commission

the abnormal

is considered. The
of legislation which,
8-year period, were suc¬

powers

tne

"Investor Has Not Been Protected,

of mid-January and

Then

SEC's

eight pieces
over

on

But

as

the

tion

investor.

export price-fixing.

-

Congressional overhaul and sim-itioned earlier. Among other asplification of all securities legisla- pects that should be considered
tion before any extension of the are the many instances in which

markets

mill and

over

acts.

bales.

Factors helping to sustain values during the week were a

the

Congress should examine and re¬
state their intent in the original

cleared for offering to the

12-point rise in the parity price level

with

killing

the

totaling 209,800 bales in the latest week, as against 260,500 a week
earlier.
In the corresponding 1949 week sales totaled 178,300

continued

rations

unbiased

tions

rather

a probable result of
natural and normal
development of small business and

Extension of SEC Power

programs were

and reports of slowness in the

7

page

Frear Bill Is Unwarranted

legislation for curtailing support

proposed

also weakening influences.
Domestic demand for hard wheat
bakery flours remained very
dull.
Buyers were cautious in view of th^ decline in wheat prices

Thursday, February 16, 1950

CHRONICLE

is employed

in promoting

it takes capital out of the

Volume

United
much

171

Number 4882

THE

States—capital which

in all probability
constructively at home than abroad.

more

*

Q.

Is

country

that

wants

-

be employed

can

ment

American

both the

war

to this question is "No."

answer

Export-Import Bank

Reconstruction

and

advice

be

have

explored

many

oppor¬

since the end of the war through such devices
the Marshall Plan Lend
Lease, UNRRA, and so forth, private
American enterprise has invested more than
$4 billion.
In other
words, there has moved from this country to other parts of the
world in this postwar
period a flood of private American capital
running at the rate of a billion dollars a year.

for

a

little

more

$6 million,
million.

nomic, and
has

social

a

provided

created

of

one

does

the

of

jobs

cleanest

in

urban

Southwest

Africa,
in

and

that

Q.

Why did these investors risk

so

much

of their

own

A.

until
the

In

the

foreign

by others who
It

capital

place,

the

South

African

Government

that they would be subject to no taxes
fully recovered all their original investment. In
place/ this government said that after their initial

any

•i*

an

are

capital
A.

should
The

be

elimination of currency restrictions.

When

to

for

used

the

the

general

theory

development of

that

areas?

investment and

free

Aircraft
Jan. .23

Maintenance

(letter

of

stock

tures

and 250 shares of

(par

No underwriter.

42nd
•

and

Street,

A9I

N.

Y.

$300,000

12-year 5%
1, 1962, and 75,000 shares of com¬
25c) offered in units of $1,000 deben¬

mon

equipment

International, Inc.,

notification)

Jan.

common

Proceeds for

for

New

American

Lafayette,

working

York

stock at $1,000 per unit.

purchase of inventory and
capital.
Office—51 East

City.

Assured

Securities

Co.,

Inc.,

La.

bers of

stock

share

for

Insurance
•

basis, for the stock of The United
Co., Atlanta, Ga.
No underwriter.

Allied

Feb.
stock

Petroleum

Corp.
(letter of notification)

6

to

writer.

be

offered

Proceeds

at

to

Valley, Calif. Office:
Angeles, Calif.
.

American

Dec.

National

par

drill

($1
for

per

oil

share).

and

gas

Subway Terminal

common

No

in

Lucerne

Building, Los

derwriter—C.

for account of selling stockholder.
S.

McKee

&

Co., Pittsburgh, Pa.

Un¬

Price-

Expected at market.
•

.

American

Feb. 7

and

the

(no

par

(par

$1),

to

Statement effective Dec. 9.

Oil

filed

stock

&

Refining Co., Ashland,

33,097

shares of

$5

cumulative

value) and 40,425 shares of

be

and

offered

common

in

exchange

stocks

Underwriter—None.

Ky.
preferred

common

for

stock

outstanding

Freedom-Valvoline

of

Statement effective Jan. 31.

(letter of notification) 5,000 shares of 6% cumula¬

tive preferred stock (par $10) and
50,000 shares of com¬
mon stock (par 100) to be sold in units of one

Small

Business, Inc.
(letter of notification) $100,000 in $10 "founders'

certificates" to be offered at par. No underwriter. Pro¬
ceeds to be used to disseminate information
among mem¬

and

ten

shares.

common

Price—$11

per

unit.

Under¬

writer—Capital Co., Inc., Jacksonville, Fla.
Proceeds—
equipment and for work¬
ing capital.
Office—921 Lynch Bldg., Jacksonville, Fla.
To install steam and electrical

•

Bankers

National

Insurance Co.,

Phoenix, Ariz.
(letter of notification) covering pre-organization
subscriptions for 120,000 shares of capital common stock
$1.50

lish

share.
capital and

a

York

23, N.

per

No underwriter.

surplus.

Phoenix, Ariz.

to

The ' Financial

BEVERLY

to

■;IX..

■

20

be

filed

offered

Office:

of

South

•

Beverly Drive.

INDICATES

to

Proceeds to estab¬
Goodrich

Canam

Mining Corp., Ltd.,
Vancouver, B. C. (3/2-3)

Aug. 29 filed 1,000,000 shares of no par value common
stock.
Price—800,000 shares to be offered publicly at
share; the remainder are registered as "bonus

80 cents per

shares." Underwriter—Israel and
Co., New York, N. Y.
Proceeds—To develop mineral resources. Statement ef¬
fective Dec. 9. Offering expected about March 2 or 3.
•

Champion Mines Co., Denver, Colo.
(letter of notification) 2,000,000 shares of author¬

ized

capital

stock

No underwriter.

(par

lc)

Building,

to

be

Monroe Street, Denver, Colo.

•

Chemical

Feb. 8

Crops, Inc.
(letter of notification)

stock.

Price—At

Robert

D.

build and

($1

par

Bowers

equip

sold

at 3c per share.
development. Office:

Proceeds for mine

941

an

184,400 shares of

share).

per

Co., Denver, Colo. Proceeds—To
oil seed processing plant.

Coastal

Jan. 27

Finance Corp., Silver
Spring, Md.
(letter of notification) 10,000 shares of 6% cumu¬

lative preferred stock (par $10)
A

common

per

stock

(par $10).

share, and for common, $15

chase

of

two

shares

of

the

right to buy

None.
ables.

one

Proceeds—To

and 5,000 shares of class

Price

preferred

share of

—

per

For

•

preferred, $10

share, with the

pur¬

giving the purchaser

common.

Underwriter—

buy additional small loan receiv¬

Office—8427 Georgia

Ave., Silver Spring, Md.
on

page

capital stock (par $25)
stockholders at the rate of lVz shares
now

held, at $30

per

share. No under¬

The proceeds will be used to
pay off
held by the New England Electric

$575,000 of
System and

bank loans.

Bond Fund of

Feb.

common

Underwriter-

&

of

writer.

lllllHllllSI®

ADDITIONS

Continued

33,000 shares

10

filed

Boston, Inc.

100,000

shares

of

capital

stock

(par

$1).

Underwriter—Vance, Sanders

& Co., Boston. Business—
Open-end diversified management investment company.

Broadway Angels, Inc., New York City

Nov. 14 filed

2,000,000 shares (lc par)
500,000 management shares of 0.1 of

UNDERWRITERS




to be sold at 50 cents and 12.5 cents
writer— Hugh J.

Devlin,

the

Hogan, Price & Co., 118

SINCE PREVIOUS ISSUE

^

for each two shares

notes

Chronicle)

HILLS, CAL.—Jack

Beverly Gas &" Electric Co.
Dec.

Y.—cloth

Hogan, Price Add
(Special

Feb. 6

at

Keith

Feb. 6

Austill Waxed Paper Co.
Feb. 3

J.

—$4.00.

it has been in the

public generally and to
general inter¬

preferred

Cladmetals

(par $1)

Ashland

under¬

Co., Carnegie, Pa.
15 (letter of notification) 10,000 shares of common

stock

association

Underwriter—Israel Securities Corp. may be underwriter.
Debentures are to be offered at par and the stock at
$11
per share.
Proceeds—To be used for economic develop¬

Oil Co.

and

Research, Inc., 1819 Broad¬
New

way,

expe¬

Registration

Ampal-American Palestine Trading Corp., N. Y.

preferred
44,240 shares of

nomic

necessary.

Nov. 3 filed $3,250,000 10-year 3% sinking fund deben¬
tures due 1958 and 200,000 shares ($10 par) class A stock.

13

Smith

staff

Washington, D. C.

Jan.

Throop

Butters—National Bureau of Eco¬

G. Jackson has been added to

ment of Israel.

(letter of notification) 5,876 shares of preferred
(par $20) to be offered in exchange, on a share

Economic Pol¬

Taxable and Business Income—

resources and raise living standards in
No politically inspired, misleading Point

areas.

advance commercial, industrial, civic and
ests.
Office: 1308-19th Street, N. W.

Feb. 14

as

on

past, to develop valuable

Four, predestined to failure, is

the

future,

Nations—Co¬

America—Study by

Committee

Dan

they are not unreasonable—
capital is available for foreign

the

Co.

States of America, Wash¬
ington 6, D. C.—paper—500 (lower
prices on quantity orders).

met—and

in

Paper

United

that they will not themselves compete

be used

Coated

AFL Unions—National

under-developed

Securities Now in
debentures due

can

Un¬

icy—Chamber of Commerce of the

going to invest it elsewhere if he is faced
Finally, the government seeking

are

and

Socialism in
the

attracted, the governments must

substantial volume of American

a

Peace

paper—$1.25.

no

rience of the world there has been only one
way to provide such
a
currency, and that is to make it rest on gold and be freely con¬
vertible into gold at the option of the holder.

of course, is "Yes."
However, such invest¬
from the charge of Yankee imperialism.
the government sets up a scheme to promote the invest¬
be

There is

of

University
Press,
2960
Broadway, New York 27, N. Y.—

means

long

American

backward

It

Ac¬

Bargaining: Nashua

Countries —United

American capital should provide an honest
currency under which
business can be transacted and values reckoned. In the

or

'!•

•»*

assurances

tal in his right senses in

answer,

should

ment

subscribe

American capital.

of

Institute

lumbia

only by this country but
trying to find the formula of economic progress.

If these conditions
you

of

owners

Institute

Methods of Financing Economic
Development in Under-Developed

It does not

with the threat of nationalization.

earnings beyond the borders of South Africa at the
official rate of exchange.
Here is a clear object lesson on how
to attract foreign capital.
I
Do

requires.

capi¬

their

Q.

program

papers

meeting of

Planning
Association,
800
21st
Street, N. W., Washington 6, D. C.
—paper—$1.00.

with such capital and create conditions under which the
prospect
for foreign capital becomes hopeless. No owner of American

been recovered, any earnings would be subject to a
single, total tax of 17V2%. Finally, these enterprising foreign
investors were told that they would be free to transfer
of

means

give reasonable

told

investors

capital had

all

private

If American capital is to be
first

Gummed

point
in investing American
money abroad if, as the English Govern¬
ment is now doing to the motion picture
industry, the proceeds of
investment are locked up without the right of free movement.

they had

second

the

American

and Seven

get a

we

that tariff barriers must be
reduced, not

of

in this venture?

these

to

annual

Causes of Industrial

cooperation from the peoples and govern¬
seeking American capital. This cooperation
that they must sacrifice their freedom in
foreign

the official Point Four

62nd

der Collective

that the

assurances

the world.

•

promoted, unless

Problems

Accountants, 270 Madison Avenue,
New York 16, N.
Y:—paper—$1.00.

areas

mean

as

Tax

countants—American

of

amount

the

be

and

Fifties—Technical

from the

already indicate the
be stimulated, higher

cannot

the

the

give reasonable

has

part

in

sovereignty of these governments need in any way
be impaired in order to induce American
capital to commit itself.
It does mean, however, that these areas must

a

communities

of

not

mean

financial, an eco¬
It has fully justified the
investment,

sense.

thousands

/ Accounting

*

The answers to the previous
questions
to this question. World trade cannot

reasonable

The promoters invested another
commitment of a little less than $10

total

a

sub¬

you any

living standards elsewhere

illustration

project has been successful in

*

A.
answer

than $4 million.

making

This

The

constructive proposals in lieu of Point Four
for stimulating world trade and
promoting higher living standards
in other parts of the world?

mining

British

objectives.

Have

policy

and

Department

Q.

Mining, American Metals, and a British organization. In
open
bidding, this German mining property at Tsumeb was purchased

German

a

State

Europe for manufacturing—all these consti¬

ments

of

American

imposed

a

of this is
provided by the pur¬
property in Southwest Africa by an
group.
This group consisted of Newmont

chase

basis

States, then such investment inevitably is

Hi

our government

concrete

the

on

have in the past.

we

as

good

so

judicious use of American funds. They are funds invested
private risk without entailing a blank check
responsibility for
the American taxpayer.
They may not bring on the millennium
overnight but over a longer period of time, given
patience on our
part and cooperation by the governments of areas
seeking capital,
we can hope to realize at
least the same progress in the future that

for

A

it does

be invested only if it promotes the foreign

may

at

corporations which have similarly been
scouring the
worthwhile projects in which private American
capital
might be invested. There are at the
present time some 2,500 Amer¬
ican companies which have
investments abroad. These investments
have reached a grand
aggregate of $16 billion. In spite of the $30
billion which have been distributed to
other parts of the world

by

politically

tute

American
earth

capital

39

stantial investment of American
capital in Alberta for oil develop¬
ment, in Labrador and Ontario for
mining, in Venezuela for oil and
iron ore, in Western

employed constructively. However, over and above
done by these two institutions are the thousands
of

the good job

American capital elsewhere and

(743)

the charge of imperialism.
capital abroad has been doing a good job and it
continue to do so without the intervention and
the confusion

of

Since the end of the

and the International Bank for

Development

CHRONICLE

American

and

tunities throughout the world
where American capital
might con¬

ceivably

FINANCIAL

exposed to

for

necessary

technical

can

The

&

policy of the United

capital?
A.

of

that this

❖

politically-promoted Point Four really

a

foreign

a

*

COMMERCIAL

common stock and

a
cent par value,
respectively. Under¬

New York.
Proceeds
For
working capital. Business—To back theatrical produc¬
tions, distribute tickets and act as an agent for talent.
—

New York.

Boston

Philadelf'hia

Pittsburgh

San Francisco

Private Wires to all

offices

Chicago

Cleveland

40

40

COMMERCIAL

THE

(744)

thereafter, and 249,993 shares of capital

3%
<•

Corp. and State Street Research & Management
Underwriter—None. Proceeds—For general funds.
Business—To develop oil and natural gas properties in
ment

February 16, 1950
Lake Superior District Power Co.
11:30

Co.)

Bonds

(CST)

a.m.

Lowell Adams Factors Corp

Textile

Sulphur Co.y Houston, Tex.
Dec. 21 filed 375,000 snares of capital stock (no par) to
be offered to stockholders at $13.50 per share at the rate
of 3/4ths of a new share for each share held on Feb. 14,

Capital

Preferred

Sharp & Dohme, Inc
Western Maryland Ry.
11

capital stock, has agreed to purchase at the subscription
price any shares of stock not subscribed for by other
stockholders.] Underwriter — None. Proceeds — To be
used, along with a $2,500,000 bank loan, to provide min¬

Greenpoint Coal Docks, Inc.

Common

(EST)

ing and milling facilities to mine potash in Eddy
County, N. M. Name changed Dec. 30 by stockholders to

Metropolitan Edison Co., noon (EST)-Bonds & Pfd.

1950

February 23,

Feb.

Jan. 30 filed

Common

The notes and 67,200 of the common shares
principal amount of notes
and 0.6 of a share. Price—To be filed in an amendment.
The series C notes will be payable at maturity by de¬
(par $1).

Common

will be offered in units of $25

1950

Chicago & North Western Ry.
Noon

-Equip. Trust Ctfs.

(CST)

Chicago, St, Paul, Minneapolis &
Omaha Ry., 11 a.m. (CST)____Equip. Trust Ctfs.
i, *-

Preferred

Kansas Gas & Electric Co

Louisville Gas & Electric Co.__.

Pennsylvania RR.,
Canam

...Common

(EST).-Equip. Trust Ctfs.

noon

March

2,

1950

Common

Mining Corp

$2,800,000 of 5.2% series C interim notes,

April 1, 19fcl, ancL250,815 shares of common stock

due

1950
Gulf States Utilities Co., 11 a.m. (EST)
February 28,

March

7, 1950
Mississippi Power Co., 11 a.m.(EST)
Bonds
Pennsylvania Power Co., 11:30 a.m. (EST)-.-Bonds

livery of 112.000 shares of $25 par value preferred stock
on
an
equal ratio'basis.
The other 183,615 shares of
common stock will be offered by Equitable Securities

Corp., Nashville, and Elder & Co., Chattanooga, after
they buy in $619,500 of series A notes and $161,400 of
series B notes from unnamed "selling noteholders" and
convert these notes into the 183,615 shares of common
stock.
Underwriters—For the note-stock units, in ad¬
dition to those named are:
White, Weld & Co., New

1950
Virginia Electric & Power Co
8,

Preferred

14, 1950
Jersey Bell Telephone Co

New

March

Utilities

Texas

20,

1950

21,

1950

Debentures
Common

Co...
March

Inc.
15,850 shares of capital
stockholders at par ($10 per
share). No underwriter. Proceeds are for treasury funds.
Office: 403 Republic Bank Building, Dallas 1, Texas.
Empire Oil of Texas,

Fitzsimmons

common

1950

28,

Northern Indiana Public Service Co

April 4,

Bonds

^..-Bonds
1950
(EST)

1950
Bonds

Public Service Electric & Gas Co

Consumers

page

Jackson, Mich.

the

rate

of

stockholders of record Jan. 31 at

common

one

share

for each

10

shares

held, and also

to be offered to employees of the company, and its sub¬

sidiary, Michigan Gas Storage Co. Rights will expire
Feb. 20. Price—To be filed by amendment. Underwriter
-—Morgan Stanley & Co. Proceeds—For property addi¬
tions and to repay bank loans incurred for construction.
•

Credit

Feb.

Acceptance Corp.,

Rochester,

N.

(letter of notification) $239,000 of 5% debenture
bonds.
Each $100 bond has stock purchase warrants
to

share

per

buy four

before

shares of

Dec.

31,

common

1951;

at

$3

stock

at

thereafter

$2.25
and

before Dec. 31, 1953; at $3.50 thereafter and before Dec.

31,

1954.
Price—$95 per $100 bond.
Underwriters—
CAC Associates, Inc., Rochester, N. Y., and R. M. Horner
& Co., New York.
Proceeds—To be added to working

Deardorf

stock

Jan.

10c), to be offered

par

28

at

80

Unsubscribed

cents

per

shares

to

Debra

Feb.

and may

&

be

common

to stockholders of record

share.

Rights expire Feb. 28.

offered

10

publicly

at

Corp., Pocono Summit, Pa.

(letter of notification), 30,000 shares of

stock (no par value).

Price—$10

per

common

share.? Underwriter

share. Underwriters—Names by amendment
include John J. Bergen & Co. and A. M. Kidder
will buy the remaining 135,000

plus unsubscribed shares of the new common.
Offering price of class A $5. Proceeds—To complete
an ocean ferry, to finance dock and terminal facilities,

shares

current

pay

obligations,

and

to

provide

working

capital.
Gulf
These

Utilities Co.

States

24 filed

Jan.

part

are

(2/28)

350,000 shares of common stock (no par).

of

2,538,701

authorized

shares of

but

Under¬
writers—To
be
determined
by
competitive bidding.
Probable
bidders include:
Dillon, Read & Co. Inc.;
Lehman Brothers and Merrill Lynch, Pierce, Fenner &
unissued

an

common

stock held by the company.

(jointly); Stone & Webster Securities Corp.; Otis
The First

Boston Corp.

number

of such

of

Bids—Bids for the pur¬
shares

common

as

will yield

aggregate price to the company of $6,000,000 will be
Co., One Wall Street, New

received at the Irving Trust

11 a.m. (EST) on Feb. 28. Proceeds—
to finance part of construction program for 1950 and for
York, N. Y. at

general corporate purposes.
Hawaiian Electric Co.,
June 21 filed 150,000 shares

Ltd., Honolulu
of series E cumulative ($20

par) preferred and 50,000 shares of ($20 par) common.
Offering—Preferred will be offered to preferred holders
at l-for-3 rate and common will be offered to common

—Louis Fisch, 26 Court St., Brooklyn, N. Y., President.
Proceeds—For
•

Detroit

Feb.

14 filed

confidential

Co.

$35,000,000 of general and refunding mort¬

service

gage
bonds, series J, due 1985.
Underwriter—To be
supplied by amendment, along with offering price. Bid¬

ders

for

the

series

I

issue

in

September,

(Western)

PRINTING CO., Inc.
80 SOUTH ST., NEW

Toronto, Canada
$10,000,000 of notes, due 1960, with interest

1%

in

the first

year,




2%

in the second

YORK 7, N. Y.

Price—$12 per

District Power Co. (2/16)
series C first mortgage bonds,
due 1980, and 40,000 shares of $20 par value common
stock
(par $20).
Underwriter—Bonds to be offered
under competitive bidding;
stock offered to common
stockholders of record Feb. 9 at the rate of one new
share for each four held, at $22.25 per share, with Robert
Lake

Superior

principal underwriter, with
Bids—For bonds will be re¬
ceived at Room 2154, 20 No. Wacker Drive, Chicago 6,
111., on Feb. 16 at 11:30 a.m. (CST).
Probable bidders:
Halsey, Stuart & Co. Inc.; Kidder, Peabody & Co.;
&

Baird

W.

year,

and

Robert

Co.,

Inc.,

as

aM C/?

,

;

Star

State¬

betterments.

additions and

Proceeds—Property

10.

Steel

Co.,

Tex.

Dallas,

(par $1),
two-for-five
basis.
Price—$4 per share.
Underwriters—Straus &
Blosser, Chicago, 111., and Dallas Rupe & Son, Dallas.
Proceeds—To build cast iron pressure pipe foundries
Jan.

filed 592,185 shares of common stock

25

to be offered to common

stockholders

on

a

and to discharge part of

current indebtedness.

Louisville
Feb. 8 filed

(Ky.)

Gas & Electric Co.

(3/1)

101,297 shares of common stock (no par) to

Price—To be filed by amendment.
Underwriters—Lehman
Brothers; J. J. B. Hilliard &
be offered

publicly.

Sons; Stein Bro, & Boyce; Almstedt Brothers; and Blyth
& Co., Inc. Proceeds—For construction costs and working
capital.
Expected about March 1.
Lowell

Adams

Factors

(2/16)

Corp.

(letter of notification) 50,000 shares of common
stock
(par 10c) and 25,000 shares of 6% cumulative
convertible preferred stock (par $4).
Price—For pre¬
Feb. 2

ferred, par; and for common, $2 per share. Underwriter
—The First Guardian Securities Corp., New York.
Pro¬
ceeds—For
New

working

Office—20

capital.

Street,

Pine

York, N. Y.

Lowell

Electric

Lowell, Mass.

Light Corp.,

55,819 shares of capital stock (par $25).
Offering—To be offered at $35 per share to common
stockholders at the rate of one new share for each three
Dec.

filed

30

bank

loans,

Proceeds—To

Underwriter—None.

held.

shares

for construction

repay

to make further im¬

and

provements.

Metropolitan Edison Co. (2/21)
$7,000,000 of first mortgage bonds, due 1980,
and 30,000 shares of $100 par value cumulative preferred
stock (par $100).
Underwriters—Names to be deter¬
mined by competitive bidding. Probable bidders: Drexel
& Co.; Harriman
Ripley & Co. and Union Securities
Corp. (jointly); Carl M. Loeb, Rhoades & Co.; Halsey,
Stuart
& Co. Inc.
(bonds); Kidder, Peabody & Co.;
White, Weld & Co. (bonds); Lehman Brothers (bonds);
Jan. 20 filed

for

past

received

construction

capital
Feb.

and

expenditures,

21

at

12

noon

to

reimburse

treasury

Bids—Expected

to

be

(EST).

Mississippi Power Co. (3 7)
3 filed $3,000,000 first mortgage
bonds.
BidsScheduled to be opened at 11 a.m. (EST) on March 7.
Underwriters—To be determined by

Chicago Astodate

competitive bidding.

Halsey, Stuart & Co. Inc.; The First
Corp.; Glore, Forgan & Co.; Equitable Securities

Probable

bidders:

Corp., and Union Securities Corp. (jointly); Otis & Co.;
Blair, Rollins & Co. Inc. and Carl M. Loeb, Rhoades &c
Co.

/'

Equitable Securities Corp. and

& Co.;

Baird

W.

Pressprich & Co. (jointly); White, Weld & Co.;
Carl M. Loeb, Rhoades & Co.; The First Boston Corp.
W.

R.

Boston

^ REU ABILITY

Ltd.,

Jan. 30 filed
at

selling stockholder.

Terrill,

Dean

for

$1),

(par

Underwriter—Straus & Blosser, Chicago.

Feb.

like amount of general and refunding mortgage bonds,
jseries G, due 1966.

Exploration

S0RG

mo

Inc. and Spencer Trask & Co.

a

Dome

1,500 shares of common

(letter of notification)

Proceeds—For

:

since

1947, were:
(jointly);
Halsey, Stuart & Co. Inc.; The First Boston Corp.; and
Dillon, Read & Co. Inc. Proceeds—To redeem on May 15,
Coffin & Burr,

stock

Inc.

Industries,

Oil

Kerr-McGee
Dec. 22

Expected

shares.

preferred

$6

1.

Kuhn, Loeb & Co. (bonds); Smith, Barney & Co. and
Goldman, Sachs & Co. (jointly on preferred); Glore,
Forgan & Co. and W. C. Langley & Co. (jointly on pfd.).

expansion and working capital.

Edison

March

(estimated to cost $1,250,000)

Underwriters

Co.

chase

$1.12%
per share.
Underwriter—Tellier & Co., New York City.
Proceeds—For additional working capital.
Office—219
Fidelity Building, Oklahoma City, Okla.
•

Transportation Co., Jacksonville,

25 cents per

& Co.;

Oil

Corp.
23 (letter of notification) 375,000 shares of

Jan.

products.

Atlantic

subscription by holders on the basis of one-for-two at

Beane

capital.
-

and

unexchanged - 7%
about

Lone

May 31 filed 620,000 shares of class A participating ($1
par) stock and 270,000 shares (25c par) common stock.
Offering—135,000 shares of common will be offered for

to

Y.

9

attached

portion to underwriters at $110 per share. Underwriters
—Kidder, Peabody & Co. and Merrill Lynch, Pierce,
Fenner & Beane.
Proceeds—To be used to redeem

Co.

Florida

Jan. 13 filed 454,457 shares of common stock (no par) to
be offered to

Products

Metal

(letter of notification) 21,500 shares of common
stock to be offered at $12.50 per share. No underwriter.
Proceeds will be used for manufacture, sale and distribu¬

39

Power Co.,

82,011

ment effective Feb.

Jan. 30

Gulf

from

No underwriter.

will be sold at $10 each.
Proceeds—For working capital.

tion of metal

Continued

Any additional shares not needed for

share of Roberts.

Foster

Common

Cal.

change for 3,254 shares of Roberts Public Markets, Inc.
at the rate of seven shares of Fitzsimmons for each

April 10,

May 2,

Angeles,

Los

the exchange

1950

Georgia Power Co.__
Utah Fuel Co., 11 a.m.

Ltd.,

Stores,

(letter of notification) 30,000 shares of class A
stock, of which 22,778 are to be issued in ex¬

16

Dec.

Preferred

Monongahela Power Co
March

(letter of notification)

3

stock to be sold to present

(3/1)

shares of $4.50 preferred stock
(par $100), to be issued in exchange for existing 7% and
$6 preferred stocks on a share-for-share basis, with 7%preferred stockholders also receiving $5 per share in
cash. Offer is to run from Feb. 7 to Feb. 28. Unexchanged
filed

6

Jan. 23 filed $2,000,000 of

Feb.

Statement

working capital.

Gas & Electric Co.

Kansas
Jan.

$8,750,000 of first mortgage pipe line bonds, due
1969, will be used for construction. Expected Feb. 21.

Bonds

1950

23,

for

9.

rights to expire Feb. 27.

Appalachian Electric Power Co
March

and

indebtedness

share.

•

March

Witter & Co. will buy

York, and F. S. Moseley & Co., Boston.
Proceeds—
Along with those from the sale to institutional investors
of

March

& Co. Inc. and Dean

effective Feb.

(2/21)

East Tennessee Natural Gas Co.

Shedd-Bartush Foods, Inc

Underwriters—Dillon, Read
unsubscribed
preferred; unsubscribed common will be sold eitner at
public auction or to the underwriters. Proceeds—To pay
off short-term promissory notes and to carry merchan-*
dise inventories and receivables or to replenish treasury
funds.
The balance would be used for other corporate
purposes or construction.
Expected early in March.
•
Huntington Hall Corp., Philadelphia, Pa.
Feb. 9 filed voting trust certificates for 16,153.4 shares of
no par value common stock.
Voting trustees are: George
E. Roosevelt, Ernest L. Davis and Clayton McElroy, Jr.
Industria Electrica de Mexico, S. A., Mexico City
Nov. 29 filed 250,000 shares of 6% cumulative convertible
preferred stock, 100 pesos par value ($11.5607K Offer¬
ing—This stock is to be offered at par to holders of
common and special stock at rate of five shares for each
12 shares held, either of common or special, or a com¬
bination
of
both.
Underwriter—Banco Nacional de
Mexico, S. A.
Proceeds—To reduce outstanding shortstockholders at l-for-9 rate.

term

14.

1950

February 27,

Sulphur & Potash Co. and approved by SEC on

Duval

Belt Ry. of Chicago, noon (CST)—Equip. Tr. Ctfs.
Virginia Electric & Power Co
Common

March. 1,

74.71%

or

February 21, 1950
East Tennessee Natural Gas Co.--Notes & Common
3:30 p.m.

[The United Gas Corp.,, owner of 373,557 shares,
of the outstanding 550,000 shares of Duval

1950.

Equip. Trust Ctfs.

(CST)

a.m.

"

Texas

Duval

1950

Corp

'

Western Canada.

Preferred & Com.

February 20,
Moller-Dee

stock (par

$1). To be sold to 17 subscribers (including certain part¬
ners of Carl M. Loeb, Rhoades & Co., State Street Invest¬

HEW ISSUE CALENDAR

Thursday, February 16, 1950

CHRONICLE

FINANCIAL

&

|;l|

\ McCORMICK and HENDERSON, Inc.

\
^

;

London Associaie

The tEAGRAVE PRESS, Ltd.

To
a

Kidder,

Peabody

construction

program.

(jointly);
finance

hearing Feb. 17.

&
Co.
Proceeds—
The SEC will hold

!

.

Volume' 171

Number 4882

THE

COMMERCIAL

Moller-Dee Textile

Corp., Wilmington, Del., and
Tel-Aviv, Israel (2/20)
Dec. 7 filed 500,000 shares ($5 par) capital stock.
"Under¬
writer—Coffin, Betz & Co., Philadelphia.
Price, par.
Proceeds—To build a textile plant in Israel.
Business—
Cotton textiles.
Expected Feb. 20.
•

Muter

Feb.

13

Co., Chicago, III.
53,000 shares of

filed

common

stock

(par 50c).

50,000 shares are offered by Leslie F. Muter, President,
and 3,000 are owned by the underwriter. Underwriter—

Dempsey & Co., Chicago.

Price—To be filed by amend¬

Business—Radio and

ment.

television

parts.
mmm

•

Mutual

Shares

Corp.,

New York
Feb. 14 filed 2,000 shares of capital stock to be offered
to stockholders only.
No underwriter.
Corporation is
a

diversified, open-end investment

•

Jersey Bell Telephone Co. (3/14)
Feb. 10 filed $15,000,000 of 40-year debentures, due 1990.
Underwriter—To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.;
Morgan
Stanley & Co.; Kuhn, Loeb & Co.; Shields & Co.; First
Boston

Corp.; White, Weld & Co.
Proceeds—To pay off
indebtedness owing to American Telephone & Telegraph

parent.

Expected

March

14.

Omar, Inc., Omaha, Neb.
($100 par), of which 16,933 shares are
offered in exchange for 16,933 shares of out¬

standing 6%
of 6%
"and

preferred

at

stock

the

rate

of

one

share

stock and the payment of $1 for each new share,

120,000 shares common stock (par $1) to be reserved

forV conversion of the convertible preferred.
Under¬
writer—Kirkpatrick-Pettis Co., Omaha, who will reoffer
unexchanged and free (3,067 shares) 4%% preferred at
$103' per share.
•

Tail

Otter

Feb.

Power

125,000 shares of common stock (par $5).
Underwriters—Names to be supplied by amendment and
may include Glore, Forgan & Co. and Kalman & Co., Inc.
Price—To be supplied by amendment.
Proceeds—To

retire bank loans.

Pennsylvania Power Co. (3/7)
filed $3,000,000 of first mortgage bonds due 1980.

Underwriters—Names

determined by competitive
Halsey, Stuart & Co. Inc.;
Lehman Brothers;
The First Boston Corp.; Equitable
Securities Corp. and R. W. Pressprich & Co. (jointly);
Carl M. Loeb, Rhoades & Co. and Blair, Rollins & Co.,
Inc. (jointly); Drexel & Co.; Merrill Lynch, Pierce, Fenner & Beane and Harris, Hall & Co. (Inc.); Kidder, Peabody &
Co.;
Otis
&
Co.
Proceeds—To
reimburse
treasury for construction expenditures.
Bids—Bids are
expected to be received at 11:30 a.m. (EST) on March 6.
Offering expected to be made March 7.

Probable

to

be

bidders:

•

Pittsburgh Finance Building Corp., Pittsburgh,
Pennsylvania
Feb. 9 filed voting trust certificates for 29,140.6 shares of
no par value common stock.
Voting trustees: George E.
Roosevelt, Ernest L. Davis and Oliver J. Sterling.
Petroleum

Power

April 25 filed 1.150,000 shares ($1 par) common of whicfc
1,000,000 on behalf of company and 150,000 by New York
Co.,

Price—50

Ltd.

cents

share.

per

S. G. Cranwell & Co., New York.
istration

expenses

and

Underwriters—

Proceeds—For admin¬

drilling.

Statement

effective

June 27.
•

Corp., Pittsburgh, Pa.
Feb. 10 (letter of notification) 21,000 shares of common
stock
(par $1).
Price—$3 per share.
Underwriters—
Smith, Talbott and Sharpe, Pittsburgh.
Proceeds—For
additional operating expenses.
Service Finance Co., Los Angeles, Calif.
Dec. 19

(letter of notification) 65,000 shares of
($1 each).
Los Angeles.

Underwriter—Dempsey
working
Office—607 S. Hill Street, Los Angeles.

Tegeler

Co.,

&

capital.

Proceeds—For

229,085% shares of $3.50 cumulative convertible pref¬
stock, series A, at rate of three new shares for
each four old ones.
Offer expires Jan. 19.
Underwriters
—Alex. Brown & Sons, Baltimore, and Drexel &
Co.,
Philadelphia, who have agreed to purchase from the
erence

maximum of 86,000 shares of $4.25 pref¬
stock which may be offered by the underwriters

erence
on

to

about Feb. 20.

or

Proceeds—To redeem

$3.50

any

surrendered under the exchange.

at $75 each
preference stock not

Business—Pharmaceu¬

ticals. Statement effective Jan. 3.
Shedd-Bartush
Feb.

6

filed

140,000

Foods,

Inc.,

which

products.
•

shares of

shares

are

Airways, Inc., San Antonio, Texas
(letter of notification) $194,000 of 4% convert¬
income debentures, due 1957 (non-interest
bearing
10

until March 1, 1952), and 19,400 shares
.of

common

stock

(par $10), into which the debentures will be convertible.
Underwirter—Fridley & Hess, Houston. Proceeds—For




•sasodjncl

ajejodjoa jejouog

$1,200,000

7

®

Home

&

stock, to be offered at
Proceeds

capital.

to

in¬

&

Gas

Co.

Corp. will sell 120.000 shares and 34,000
respectively. Hearing scheduled for Feb. 21.

shares,

West

Videcgraph Corp., N. Y. City
(letter of notification) 300,000 shares of

Carolina, Clinchfield & Ohio RR.
Feb.

Avenue, New York, N. Y.

1963, at 102% and interest.
number

not

issued

of

on

shares

of

before

or

Stuart

Feb.

20

Underwriters—For

Securities

filed

will

preferred stock

in

be

equal

Alberta

the office of R. L. Williams, Persident, in Room*
1400, Daily News Building, 400 West Madison Street,';
Chicago 6, 111., up to 12 o'clock noon (CST) on March;

1,

1950.

bidders: Halsey," Stuart & Co. Inc.;]"
Hutzler; Harriman Ripley & Co., Inc.; j
and Lehman Brothers (jointly); The First Boston Corp.;
Bros.

&

Chicago, St. Paul, Minneapolis & Omaha Ry.

the purchase from the company of $915,000
equipment trust certificates, series of 1950, to be dated
April 1, 1950, and to mature in either 10 or 15 equal

on

annual

stock:

Stone

head

stock:

used

to

cago

&

redeem

Stone

payment
of

the

com¬

unconverted

March 8.

Probable

of

its

about

able bidders:
&

Co.,

,

&

Co.

the

company

and

(Inc.).

•

Columbia Gas System, Inc.
Feb. 13 announced company will ask SEC and its stock¬
holders to authorize the issuance of preferred stock and,
the issuance and

first

internal

and

$60,000,000

&

The

and

callable

company's

third

a

its

dollar

debt

in

mid-

offering to
of

em¬

to
price of $20 per share less than
price when payment is completed, but not
than $150 nor less than $100
per share.
up

a

market

(3/21)

Jan. 17 announced that the
company expects to
the SEC about Feb. 17 a
registration statement

$25,000,000
be

sold

at

Probable

of

new

first

mortgage

bonds,

competitive bidding, probably

Pierce,

bidders

include:

Pressprich & Co. (jointly); Merrill Lynch,
& Beane; Lehman Brothers, Goldman,

Fenner

•

for expansion.

•

Arkansas

Feb.

6

Louisiana

company

$27,500,000

new

Halsey,

Gas

is

contingent

action

on

Co.

reported to be considering offering of
mortgage 3% bonds, the proceeds

first

to be used to
repay $21,125,000
vide additional
working capital.

bank loans and to pro¬
The sale of these bonds

approval by SEC and favorable Court
Arkansas Natural Gas Corp.'s plan to split
upon

itself into two

new

(jointly); Mor¬

Stanley & Co.

gan

Commercial

Credit Co.

f

planning issuance of $25,cumulative non-convertible preferred
stock (par $100) following redemption of a like amount
of outstanding 3.6%
cumulative convertible preferred
stock not taken up in conversion of 3.6% stock will be000,000

of

new

vertible into 1% shares of

companies. Probable bidders:

Halsey,

to

up

on

underwriters.

common

stock.

The

common

conversion of 3.6% stock will be
Traditional

underwriters:

Kidder,

Peabody & Co.; The First Boston Corp.

covering

1980, to
March 21.

Stuart & Co. Inc.;
Kuhn, Loeb & Co. and Union Securities Corp. (jointly);
Harriman, Ripley & Co. Inc.; First Boston Corp. Proceeds
are

common

Sachs & Co. and Union Securities Corp.

sold

file with

due
on

stock with¬

stocknoiders.

currently calls for the sale of

program

stock not taken

Appalachian Electric Power Co.

common

common

Feb. 8 company reported to be

Co.

subsidiaries

to

or preferred stock and
$17,000,000 of debentures to finance its expansion pro¬
gram.
Probable bidders for common stock: Shields &

First Boston Corp.

Telegraph

shares

$10,000,000 of additional

sterling

bonds

sale of additional

offering such

Co. and R. W.

Dec. 21 directors voted to make

2,800,000 shares at

Halsey, Stuart & Co. Inc.; Harriman Ripley
Lehman Brothers (jointly); Salomon
Hutzler; The First Boston Corp.; Harris, Hail

Inc.

&

Bros.

out

refunding

underwriters:

Telephone

beginning on April 1, 1951, will beat the office of R. L. Williams, President, in
1400, Daily News Bldg., 400 West Madison St., Chi¬
6, 111., up to 11 a.m. (CST) on March 1, 1950. Prob¬

Room

Price—

group.

instalments

received

Co., Inc.; Harriman
Corp. and Kidder,

Proceeds—From

considering

issuance

American

the

Probable

Salomon

(3/1)

those

(Province of)

reported

of

&

Bids for

converting the de¬

common

may

to

Prospective Offerings

ployees

t

Chicago & North Western Ry. (3/1)
;
for the purchase from the company of
$7,065,000-;
equipment trust cetrificates, series of 1950, to be dated'
April 1,1950, and to mature in either 10 or 15 equal annual!
instalments beginning on April 1, 1951, will be received

The

March.

(jointly).

®

®

For preferred

Corp.

by amendment.
sale

and

Co.

Bids

common

debentures, and from the preferred stock sale, to finance
construction.
Common stock offering expected Feb. 23

bonds

&

Co. Inc.; Harris, Hall & Co. (Inc.); Salomon'
Hutzler; Harriman Ripley & Co. and Lehman;
Brothers (jointly). Expected in March.

Expected end of

stock

Corp., Blyth &
Inc.; First Boston

Co.,
Peabody & Co., New York.

through

Drexel

early in March.

&

Bros.

It will sell underwriters

common

Securities

&

5

and
or

Jersey
i
Jan. 30 reported planning sale of $3,700,000 l-to-15-yeart
equipment trust certificates. Probable bidders: Halsey,j

(2/23)
(3/8)
unspecified number of shares of common

an

due

•

Co.

Harris, Hall & Co. (Inc.).

the

Feb.

&

Expected late this month

(par $10) and 100,000 shares of preferred stock
(par $100).
The company has called for conversion
March 2 $4,000,000 of its 3Vs% convertible
debentures,

and

Ripley

Proceeds to pay notes due to Louisville & Nashville RR.'

stock

stock

reported

Harriman

month.

be

4

company planning sale of $3,885,000'
Probable bidders: Halsey, Stuart & Cow
Inc.; First Boston Corp. and Kidder, Peabody & Co.
(jointly); Dick & Merle-Smith; R. W. Pressprich & Co.;

Virginia Electric & Power Co.

To

,

April. Probable bidders: Halsey, Stuart &
Inc.; Lehman Brothers; First Boston Corp.; Harr*-'|
man, Ripley & Co. Inc.; White Weld & Co.
|

(par 10c).
Price—$1 per share.
UnderwriterGeorge J. Martin Co., New York.
Proceeds—For addi¬
tional
working capital.
Business—Assembles a
coin'
operated combination television and phonograph. Office

Webster

Co.

Co.

stock

&

Edison

at

Feb. 2

Ripley

Corp.

Central RR. of New

Middle

Webster

received

mortgage bonds.

and

this

be

Polk

the middle of

& Beane, and Paine,
Webber, Jackson & Curtis,
be underwriters. Proceeds—Will go to selling stock¬

—701—7th

Ry. Co.

will

West

Jan. 26 reported company is planning to issue $18,000,000,
of first mortgage 30-year bonds due 1980, probably about

Fenner

Electric

Co.

Boston

increase

Consolidated

&

ginson

A
to

Upper Peninsula Power Co.

holders.

for

used

serially in 24 equal semi-annual instalments be-,
on Oct.
1, 1950, and ending on April 1, 1962.
Probable bidders:
Halsey, Stuart & Co. Inc.; Salomon
Bros. & Hutzler; Harriman Ripley & Co. and Lehman
Brothers (jointly); Harris, Hall & Co. (Inc.); Lee Hig-<

Sept. 28, 1948 filed 154,000 shares of common stock (paT
$9.
Underwriters—SEC has granted exemption from
competitive bidding. An investment banking group man¬
aged by Kidder, Peabody & Co.; Merrill Lynch, Pierce,
may

market $6,000,000,
September, the proceeds

ginning

per share).
No under¬
inventory and working
Office—2918 N. 16th Street, Phoenix, Ariz.

writer.

expects to

mature

($10

par

Light Co.

company

of Chicago (2/23)
by the company at Room 211,
Street, Chicago 5, 111., at or before 12
o'clock noon (CST) on Feb. 23 for the purchase from it
of $2,832,000
equipment trust certificates of 1950, to-

Supply Co., Inc.
5,000 shares of common

notification)

Power &

reported

Belt

47

Business—Oil production.

(letter of

be

Bids

payable on debentures must first be approved by RFC,
recently loaned the company $15,100,000. Under¬
Tri-State Auto

3%% preferred,
preferred stock,'

construction.
Probable bidders: Halsey,
Inc.; Equitable Securities Corp. and Cen-i
Republic Co. (jointly); White, Weld & Co.; First
Boston Corp.; Lehman Brothers; Union Securities Corp.

which

Feb.

8

Stuart

until

writer—None.

in

tral

junior

5%

of

(issuable

Arkansas

to

1956; 52,000 shares of $5 class B cum¬
ulative preferred stock
(no par), with no rights to
dividends until 1956; and 2,000 shares of common stock
(no par), represented by voting trust certificates; to be
issued under a plan of debt adjustment;
Any interest

Expected about Feb. 27.

Slick

Feb.

ible

120,000

1965;

Gas Corp.
unexchanged new
exchange for 6%

of mortgage bonds in August or

working capital and the promotion of Zenith's ''Phonevision" device, whereby television users could pay a
special fee for costly television programs by calling the
telephone company and asking to be plugged in.

(2/27)

common
stock (par $1),
being sold by Stephen J.
Bartush, President, and 20,000 are being offered by the
company directly to employees.
Underwriters (for the
120,000 shares)—Blair, Rollins & Co. Inc., New York,
and Shader-Winckler Co., Detroit.
Price—To be filed
by amendment.
Proceeds—From 20,000 shares to be
added to cash balance.
Business—Manufacturer of food

of

•

Feb.

stock in Zenith Radio Corp. at rate of one share
for each five held.
Underwriter—None.
Proceeds—For

due

Natural

announced

share, under proposal to split company into two
units) will be sold publicly.

common

income debentures due 1970; 32,000 shares of
$5 class
cumulative preferred stock (no par), with no rights

6

stock

Teco, Inc., Chicago

Texmass Petroleum Co., Dallas, Texas
13 filed $3,000,000 of 4%% senior cumulative

Arkansas

share for

21 filed 100,000 shares ($10 par)
common stock.
Offering—These shares are to be offered to holders of

more

Detroit

•

Feb.

Mines Ltd., Toronto, Canada
375,000 shares of common stock. Price—$1
per share (U. S. funds). Underwriter — None. Proceeds
—Funds will be applied to the purchase of equipment,
road construction, exploration and development.

a

plus accrued dividends

mortgage

of

amount

Sudore Gold

Sharp & Dohme, Inc., Philadelphia, Pa. (2/20)
Dec. 9 filed 171,815 shares of cumulative preference
stock
(no par).
Offering—Offered in exchange for

company up

like

June 7 filed

dividends

Inc.; First Boston Corp. and Lazard FrereJ
(jointly); Union Securities Corp.; Smith, Barney
Co.; Equitable Securities Corp.

&

Underwriter—Names by amendment.
a

41

Co.

&

redeem

debentures

(745)

Stuart & Co.

Columbia,

outstanding
bonds.
Due 1979.
Underwriter—Names by amendment
(probably Halsey, Stuart & Co. Inc.; Kidder, Peabody &
Co.; The First Boston Corp.; Union Securities Corp.).
Expected in January.

mon

common

Price—Par

stock.

Co.,

$22,200,000 first and refunding

1979.

Due

bentures.

Products

Ramie

bonds.

filed

Jan. 31 filed

Toronto Canada

Ltd.,

22

Proceeds—To

Expected to be issued after March 1.

Feb. 1

bidding.

Nov.

•

Co.

filed

14

&. Gas

South Carolina

terest

stock

'first to be

Electric

CHRONICLE

Jan.

Feb. 6 filed 20,000 shares of 4 xk % cumulative convertible

preferred

Carolina

FINANCIAL

Nov.

company.

New

Co., the

South

&

Equitable Gas Co.
Jan.

19

Standard

Gas

&

Electric

Co.

announced Phila¬

application with SEC to
sell its Equitable Gas Co. common stock to be outstand¬
ing following its proposed reorganization (see also Wis¬
consin Public Service Corp. below). Probable bidders:
Lehman Brothers and Drexel & Co.
(jointly); Kuhr^.
Loeb & Co. and Smith, Barney & Co. (jointly); W. E.
Hutton & Co. and Glore, Forgan & Co. (jointly); First
Boston Corp.; Harriman, Ripley & Co., Inc.
delphia Co.

•

may

shortly file

an

Gatineau Power Co.

Feb. 6 announced courts had ordered that at least
000 of common stock held by

$5,000,International Hydro-Electrie

Continued

on

page

4Z

42

(746)

COMMERCIAL

THE

Continued

from

•

41

page

•

General

Public

Service

Corp.
March 6 stockholders will vote on plan to increase com¬
mon stock from 1,000,COO shares (702,901 shares outstand¬
ing) to 2,500,000 shares.
It is planned to sell 1,000,000
shares publicly through Stone & Webster Secur¬
Corp. about second week in March, depending on

or more

ities

market conditions.

Georgia

v

Power

(4/4)
Jan. 17 reported company expects to file a registration
statement with the SEC on March 3 covering $15,000,000
of debt securities.

Co.

Bids

scheduled to be received on

are

•

Proceeds—To finance construction program.

•

Gerber

Products

Mountain

than

shares

150,000

shares

of

stock,
employees.

which

of

common

be offered to

to

are

are

to

finance

a New York State plant and ware¬
improve plant facilities at Oakland, Calif.
Traditional underwriter: A. G. Becker & Co. Expected
early in March.

be used to

house and

•

to

the

1,816,000

stockholders

each

shares

10

shares

treasury

common

on

of

178,000 of
stock to its

common

the basis of

one

share for

new

held at a price to be determined at a
The proceeds will be used to reimburse the

later date.

treasury for capital expenditures and to increase work¬

ing capital.

Greenpoint Coal
Jan.

17 announced

(EST)

Docks, Inc.

(2/21)

Feb. 21 for the purchase from the Attorney
General of the United States, as a whole, of 2,500 shares
of common capital stock (all of the outstanding stock
of the corporation). Bids must be received at the Office
of

on

Alien

the

York

Property

Custodian,

120

Broadway, New

5, N. Y.

to

capital stock from

plans to

stockholders

of

record

•

Gulf States
14 reported

Utilities

offer $10,000,000 to $15,bonds later this year. Probable

"new

000,000
bidders:

Co.

company may

money"
Halsey, Stuart & Co. Inc.; Blair, Rollins & Co.,

Inc. and Carl M. Loeb, Rhoades & Co.

(jointly); The First

Boston Corp.; Equitable Securities Corp. and Union Se¬
curities Corp. (jointly); Glore, Forgan & Co.; Kidder,

Peabody & Co.
•

Hytron

Feb.

Radio &

10 reported

Electronics

Corp.

trust

certificates

reported

offering

that
is

•

preferred

March

27

on

additional

Roach, President, said

4%

preferred

stock

company

later

this

plans to sell

year

to

raise

to $4,000,000 to finance, in part, its 1950 construction

up

Traditional

program.

underwriters:

Blyth

& Co., Inc.;

of $9,000,000

equipment

expected

New York

Feb.

State

announced

14

Electric

&

stockholders

Gas

will

Corp.

vote

in

on

increasing the authorized preferred and qommon stocks.
Future equity capital will be necessary in connection
with

the

construction

Probable

program.

bidders

for

preferred issue: Kuhn, Loeb & Co.; W. C. Langley & Co.;
Lehman Brothers and Glore, Forgan & Co. (jointly);
Harrison, Ripley & Co., Inc.; Salomon Bros. & Hutzler;
Kidder, Peabody & Co. and Merrill Lynch, Pierce, Fen¬
& Beane

•

(jointly).
Public Service Co.

(3/28)

Feb.

8 reported company is planning sale of approxi¬
mately $12,000,000 new first mortgage bonds. Probable
bidders: Halsey, Stuart & Co. Inc.; Blyth & Co., Inc.;

Central
&

Republic Co., and Merrill Lynch, Pierce, Fenner
Union Securities Corp.; First Boston Corp.;
Ripley & Co., Inc.; Equitable Securities Corp.

Beane;

Proceeds to be used to pay for construction costs. Regis¬
tration
expected about Feb. 23 with offering about
March

28.

Jan.

20

and

sell

Natural

announced

Gas

that

Co.,

the

Omaha,

company

Neb.
proposes to issue

at

to

1 announced company has made arrangements with
underwriting group headed by Morgan Stanley & Co.
take all 3Vz% cumulative preferred stock offered them

before redemption date (March 6, 1950) at 102V2 and in¬
terest (or a total of $102.84 per share) and to convert the
stock so purchased into common stock on basis of one

preferred share plus $15 in cash for three
There

common

shares.

approximately 65,500 preferred shares out¬
which have been called for redemption on

are

standing

On

Laclede
Feb.

issue

of

Gas

Light Co.

stockholders

14

480,000

shares

of which 160,000 may be

ing

name

of

company

of

voted

to

preferred

authorize

stock

presently issued, and

new

on

$25),
chang¬

to Laclede Gas Co. Probable bid¬

ders; The First Boston Corp. and Blyth & Co., Inc. (joint¬
ly); Smith, Barney & Co. and Goldman, Sachs & Co.

(jointly); Lehman Brothers, Merrill Lynch, Pierce, Fen& Beane and Reinholdt & Gardner (jointly); Harri¬
man Ripley &
Co.; White. Weld & Co. Proceeds—To be
used to finance part of $20,000,000 construction program
planned over the 1950-1953 period.
ner

•

Louisiana

Power &

Light Co.

basis

of

share

one

outstanding, the latter to
$10,657,500 of new capital.

for

supply

eight shares now
from $9,060,000 to

The net proceeds, together
with other funds, will be used to finance the company's
construction program.
Probable bidders for the deben¬

Inc.; Blyth & Co., Inc.; The
Corp.; Kidder, Peabody & Co.

Ontario

(Province of)

Feb. 5 reported that steps may be taken late this year to
refund the sizable volume of debt coming due in 1951
and 1952.

$6,000,000 of bonds, and refund the outstanding $6 pre¬
stock.
Probable bidders: W. C. Langley & Co.
and First Boston Corp. (jointly); Halsey, Stuart & Co.

ferred

Inc.; Merrill Lynch, Pierce, Fenner & Beane and Kidder,
Peabody & Co. (jointly); Kuhn, Loeb & Co., and Leh¬
man Brothers
(jointly); Shields & Co. and White, Weld
& Co. (jointly); Salomon Bros. & Hutzler; Blyth & Co.,
Inc.; Harriman Ripley & Co., Inc.

Pacific

each five

Gas

&

Electric

shares owned.

Mississippi Power & Light Co.
Feb. 6 reported company
may be in the market in
August or September with $7,500,000 mortgage bonds,
the proceeds

to be used to finance construction.

able

Prob¬

bidders: Halsey, Stuart & Co. Inc.;
Glore, Forgan
Co.; Equitable Securities Corp.; Merrill Lynch, Pierce,
Fenner & Beane; First Boston Corp.; Union Securities
Corp. In case outstanding $6 preferred stock is refunded,
probable bidders are: W. C. Langley & Co. and First

&

Boston

Corp.




announced

General

Public

Halsey,

decision

a

Utilities

Corp. for

•

Sunray Oil Corp.

Feb. 13 it

was announced that this
corporation has agreed
purchase Atlas Corp.'s holdings of about 730,000 shares
Oil Co. capital stock for more than $42,000,000, equal to $56 per share. Atlas would also receive the
optional right to buy from Sunray all or any part of
750,000 shares of that company at $12 per share. This
right would be good until Dec. 1, 1950. Talks of merger

of Barnsdall

of

Sunray and Barnsdall are said to be going
Dillon & Co. are bankers for Sunray.

period is ex¬
The offering will be under¬

written by a nationwide group of underwriters probably
headed by Blyth & Co., Inc.
The proceeds are to be used
for
•

Texas

extent

to

Pacific

Intermountain

be

issued

before

It is expected that new

March

20, subject to

ICC

Traditional underwriter: Mitchum, Tully & Co.

Pacific

Feb.

Power &

headed

group

by A.

C.

Allyn

&

Co., Inc., and Bear,

Stearns & Co.
•

Power

&

(probably preferred and

Light

Co.

common

Texas

Pennsylvania RR.
will

be

received

by the company at Room 1811,
Bldg., Philadelphia 4, Pa., at or
before 12 o'clock noon (EST) on March 1 for the sale by
it of $10,200,000 equipment trust certificates, series Y,
to be dated Jan. 1, 1950, and to mature in 15 annual in¬
stalments of $680,000 from Jan. 1, 1951 to Jan. 1, 1965.
Broad

Street

Probable
Bros.

Station

receive

Brothers

Halsey, Stuart & Co. Inc.; Salomon
Harriman, Ripley & Co. Inc. and Leh¬

(jointly); Harris, Hall & Co. (Inc.); First

Boston Corporation.
•

Feb.

Public

7

Service

announced

&

Gas

Co.

(5/2)

company plans to offer $26,000,000
refunding mortgage 30-year bonds. Underwriters—Names
to be determined by competitive bidding. Probable bid¬
ders: Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.
and Drexel & Co. (jointly); Kuhn, Loeb & Co. and Leh¬
man Brothers (jointly); First Boston Corp.; Union Secur¬
ities Corp. and White, Weld & Co. (jointly).
Proceeds
—To refund 3J/4% bonds due 1966. Expected about May 2.

(3/20)

competitive

will,
bids

on or

about March 20,
additional

400,000

on

Pierce & Co. and Dallas Union Trust Co.

(jointly).

Pro¬

ceeds—To raise part of funds needed by subsidiaries for
their construction purposes.

Fuel

referee

Co.

will

(4/10)

offer

at public auction at 11 a.m. on
April 10 all of the 100,000 outstanding shares of stock of
this corporation at the Guaranty Trust Co. of New York,
.140 Broadway, New York.
Business—Mining of coal in

Utah

and

Colorado

and

manufacturing of coke in Utah

and sale of said products.

West

Coast

Transmission

Co., Ltd.

10

reported that Eastman, Dillon & Co. and the First
Boston Corp. were ready to underwrite the financing
of

the

1,400 mile pipe line proposed by the West Coast

Transmission Corp., along with

Nesbitt, Thomson & Co.,
Ltd., of Montreal, Canada, and Wood, Gundy & Co. of
Toronto, Canada. The financing would be divided 75%
bonds

stock.

the

and

A

remainder

to

preferred and

common

large

amount of the bonds are expected to
be taken by life insurance companies. Arrangements will
be made to place in Canada part of the securities. It is
expected an American corporation will be formed to
and

operate the American

end

of

the

line

in

Washington, Oregon and California. The completed line,
it was expected, will cost about
$175,000,000.
*

•

Western

Maryland Ry.

(2/20)

Bids for $2,460,000

equipment trust certificates, series N,
by the company on Feb. 20 at 11 a.m.
They will be dated March 15, 1950 and will ma¬
ture annually on March 15, from 1951 to 1965. Probable
bidders: Halsey, Stuart & Co.
Inc.; Harris, Hall & Co.
(Inc.); Salomon Bros. & Hutzler; Harriman Ripley & Co.
be received

(CST).

and Lehman Brothers

Wisconsin
Jan.

shortly file

an

stock

(jointly); Lee Higginson Corp.

Public

19 announced

Service

Standard

Gas

Corp.
&

Electric Co.

would

application with the SEC to sell all the
of

the Wisconsin
subsidiary, and the
Philadelphia Co., its principal subsidiary, will ask the
common

Electric

Co.

company

common stock.
Probable bidders:
Blyth &
Co., Inc.; and The First Boston Corp. (jointly); Lehman
Brothers; Dillon, Read & Co. Inc.; Union Securities Corp.;
Merrill Lynch, Pierce, Fenner & Beane and Kidder, Pea¬
body & Co. (jointly); First Southwest Corp.; Rauscher,

bidders:

& Hutzler;

Utilities

shares of its

will

(3/1)

Funds will be used to finance

costs.

14 announced

1950,

stock) to finance

balance of 1950 construction program. Traditional under¬
writers: First Boston Corp.; Drexel & Co.

Bids

of

construction

construct

Pennsylvania

Jan. 26 company announced that it may be
necessary to
issue sometime this year about
$18,000,000 of new secur¬
ities

Light Co.

bonds:
Halsey, Stuart & Co. Inc.;
Corp.; Blyth & Co., Inc.; Kidder, Pea¬
body & Co. and Smith, Barney & Co. (jointly); W. C.
Langley & Co. and Glore, Forgan & Co. (jointly); Carl
M.
Loeb, Rhoades & Co. and E. H. Rollins & Sons
(jointly); Union Securities Corp.; Drexel & Co. and
Hemphill, Noyes & Co. (jointly): Lehman Brothers;

to

Light Co.

3 SEC

approved offer of $16,125,000 for company's
500,000 common shares outstanding which was made by
a

&

planning permanent financing probably
$7,000,000 of bonds before August, 1950.

The First Boston

Feb.

Express Co.

Jan. 23 announced company plans offering of 69,768 shares
of additional common stock to its stockholders on a one-

•

Power

Probable bidders for

•

expansion.

East¬

Feb. 13 reported

The

1,-

on.

man,

Co.

The subscription

pected to close April 5, 1950.

man

•

SEC

1

Utah
•

•

Feb. 6 reported company may sell between $4,000,000 and

include

granting the request
exemption of its
proposed sale of its entire holdings of 325,000 shs. of Edison common stock from the requirements for competitive
bidding.
GPU has accepted offer of $10,720,000 from
Consolidated Edison Co. of New York, Inc., for the Edi¬
son Stock, according to a joint announcement on Feb. 8.
of

•

approval.
a

(par

bidders

Island Edison Corp.

Staten
Feb.

Feb.

the

on

shares will
•

Probable

Inc.; Kuhn, Loeb & Co.; Lehman Brothers;
First Boston Corp. and Harriman Ripley & Co.
(jointly);
Union Securities Corp.
>

stock

for-three basis at $16 per share.

March 6 at 102 and interest.

arranged.

Stuart & Co.

competitive bidding $40,000,000 of 2%%
20-year debentures and to sell 304,500 shares of common

656,156 shares of common stock to common stockholders
about March 20, 1950, at the rate of one new share for

Feb.

mortgage

be

a committee to proceed with
approximately $31,800,000 outstand¬
bonds, provided satisfactory terms

Salomon Bros. & Hutzler.

Northern

•

an

first

•

Northern Indiana

Feb. 8 company announced its plans to issue and sell

Corp.

appointed

to

March

Wegener & Daly Corp., Boise, Idaho.
Johns-Manville

ing

a

early in April. Probable
Inc.; Salomon Bros. & Hutz¬
ler; Harriman Ripley & Co., Inc. and Lehman Brothers
(jointly). Expected in April.

•

Idaho Power Co.

Feb. 7 T. E.

7 directors

the refunding of the

bidders: Halsey, Stuart & Co.

tures: Halsey, Stuart & Co.

company

convertible

Seaboard Air Line RR.
Feb.

;

7

First Boston

of

Securities Corp. and Ladenburg, Thalmann .&
(jointly); Merrill Lynch, Pierce, Fenner & Beane;
Kidder, Peabody & Co.; F. Eberstadt & Co.; Allen & Co.
Co.

183,918 additional

about

New York Central RR.

Barrett Herrick & Co.

shares

Union

repay temporary loans
Telephone & Telegraph Co. and for addi¬
tional expansion.

plans issuance of about 200,stock at around $8
per share and about 400,000 shares of common stock at
between $4 and $5 per share.
Traditional underwriter:
000

early in April. Registration with the SEC expected
shortly. Probable bidders: A. G. Becker & Co. (Inc.),

basis, the rights to expire about April 28.

Feb.

at

stock

or

1,000,000 to 1,500,-

offer

Property Custodian is pre¬
competitive bidding 440,000 shares
(total issue outstanding) late in March

offer

to

of common

could

Harriman
Feb.

paring

proceeds would be used to

ner

bids will be received by 3:30 p. m.

covering

American

•

Glidden Co., Cleveland, Ohio
9 company announced that it will offer

Jan.

23

expenditures.

Company

one-for-five

10,000

Proceeds

SEC about Feb.

Jan. 26 announced the Alien

States

authorized

shares.

The

Feb. 8 stockholders authorized directors to sell not more

the

regis¬

Telephone & Telegraph Co.
stockholders will consider proposal to
in¬

21

crease

000

to

Co.

construction

for

used

shares

& Co.

Thursday, February 16, 1950

Schering Corp.
a

60,000 shares of cumulative preferred stock (par $100)
to be sold through competitive bidding, bids for which
are expected to be received around March 23.
It is also
planned to sell approximately $1,500,000 additional com¬
mon stock to West Penn Electric Co., the parent.
Prob¬
able
bidders for preferred stock: Blyth & Co., Inc.;
Drexel & Co.; Harriman Ripley & Co., Inc. and Union
Securities Corp.
(jointly); Carl M. Loeb, Rhoades
Co.; Kidder, Peabody & Co.; Smith, Barney & Co., and
Goldman, Sachs & Co. (jointly); Glore, Forgan & Co.
and W. C. Langley & Co. (jointly).
Proceeds will be

Securities Corp.
(jointly); Shields & Co.;
Co.; Morgan Stanley & Co.; Harriman Ripley

&

with

tration statement

April 4. Probable bidders: Halsey, Stuart & Co. Inc.;
Blyth & Co., Inc. and Kidder, Peabody & Co. (jointly);
First
Boston
The
Corp.; Union Securites Corp. and
Drexel

CHRONICLE

Power Co.
(3/23)
that the company plans to file

10 reported

March

Equitable

FINANCIAL

Monongahela

Feb.

System be disposed of by trustee of latter. First Boston
Corp. as financial adviser to Gatineau has been engaged
to develop a plan for liquidation of International.

&

SEC for permission to sell the common stock of Equit¬
able Gas Co. to be outstanding following its proposed

reorganization (see Equitable above). It is the intention
System to sell only one of these holdings. Prob¬

of the

able bidders for Wisconsin stock: First Boston Corp. and
Robert W. Baird & Co. (jointly); W. E. Hutton & Co.
and

Glore,

& Co.

Forgan

&

Co.

(jointly);

Harriman,

Ripley

Volume

171

Continued

4882

Number

jioin

THE

COMMERCIAL

14

page

despite

&

FINANCIAL

intermittent

which

people

will

CHRONICLE

misgivings
during

have

the year. We anticipate that earn¬

Mutual Funds

ings

'

dividends

and

America's

of

leading
be

proof

will

When the dis¬
made, the burden of

absence

ing like
\

the

be on
of

ruling

a

An

business

From

tric

In¬

True

investment

accurately

income

for

dividend.

distribution

be

in

tion

will

be

result

a

Company
Few

the

of

York

Oct.

on

advised further

in

hearing

approaching

(a)

settlement."

a

column headed by
Dividends"
which
hori¬

"Total

and

tion; and (b)

of

port

that the annual
investment

an

should

distribu¬

other

any

contain

factual

such

with

matters

The

inclusion

describing
vestment;

factual

which

should

shareholder
utor

is
be

not

but

by

Respectfully

neces¬

a

paid by the
distrib¬

the

Corporation

only.

sified

stockhold¬

There will be

no

Mutual Shares is

under¬
diver¬

a

investment

open-end

com¬

January Set-Back

be

curious

Securities,

in

Inc.,

its

Summary of the Investment Re¬
port to the Board of Directors,
tated

that;

"Notwithstanding the fact that
January witnessed the first im¬
portant
that

set-back

occurred

months,

in

in

prices

stock

the

past

month-end

seven

prices

of

'blue chip' issues reached a new
high since 1946. Both this reaction
and

the

advance

deserve

com¬

"The

reaction,

long overdue,
direct

a

to

was

result

perhaps

some

of

tion's

behavior

economic

The

,

booklet

the

than

is

these
our na¬

extent

To

offset

inflationary implication of the
budget message, the

President's
Federal

Reserve

Treasury
sirable

Board

apparently

to

take

and

the

it

de¬

mild

but

felt

certain

definitely recognizable deflation¬
ary

actions.

sufficient

These

give the market
,

actions

at

reason

were

that point

growth.
also

quotes Presi¬

Committee

Report.

concerned

The

with

the

on

statement

the- lack

of

balance in the flow of
tween

debt

and,

savings be¬
equity invest¬

and

in

this

critical

year,

capital formation is slack¬
ening, the speech certainly bears
reading carefully. Copies of the

policies

to

tinue

yields

in

These

the

returns

face

obtainable

of

in

very

"Confidence

less

News
that

con¬

low

high-grade

see

on

be




meeting of stockholders

at

Wilmington,

Delaware

April 18, 1950.

on

Putnam

fresh

Fund

Fund,

from

Park

Funds

in

entitled

Street."

high

cumulative

holders

be

is

using a
their
latest

"For

The

features

terminated

something

not

always

well in Mutual

available

upon

re¬

writers

Delaware

its

Fund, Inc., spotlights
growth from net

remarkable

assets of

stock

accruing

conversion

redemp¬
shares of $100

100,000

or

Gas

System,

rapid growth is con¬
On Feb. 2,
net assets

nancing

its

somewhat

formulating
terests

and

to

appears

hopeful that investors

are

will

give

sold

portions of

attention

more

to

recent

some

un¬

trade

has

wondering just
needed

been

what

to assist in

given

to

might

be

moving this

backlog of unsold issues, which
while

not

some,

is

particularly

bother¬

none-the-less

irri¬

to be had at the offering price,
though the vast bulk of this enor¬

1950

in

his

letter to

will

in the

Niagara

cent

of the

cases

Mohawk

Rock

hopeful

bankers

that

this

February

D.

H.

February

on

21,

ALEXANDER,

1950.

Secretary.

1950.

MGM

PICTURES

THEATRES

•

quarterly

share

on

Stock

of

MGM

•

First

located

dividend of 37j^c per
outstanding Common
payable on

the

31, 1950, to stockholders of record at
close of busi less on
March
10,
1950.

L

N

A

E

W

■

L

E

L

at

the

the

balance

Febru¬

on

DIVIDEND

NOTICE

The board of directors
a

has declared

quarterly dividend of 50 cents

share

on

the

common

March

15,

record

February 23,

per

stock, payable

1950, to stockholders of

WILLIAM A. MILLER,

American

Standard

Radiator

Sanitary

CORPORATION

1950.

Secretary-Treasurer

PittsLryL

PREFERRED DIVIDEND
COMMON DIVIDEND
A

quarterly dividend of $1.75 per share

on

the Preferred Stock has been declared

payable March 1, 1950, to stockholders
of

record

on

of

25

Stock

cents

per

been

has

share

record

at

February 20,

the

close

of

declared

business

on

A

quarterly dividend of 25c

share has been declared,

April

1950.
JOHN E.

NOTICE

DIVIDEND
on

payable March 24, 1950, to stockholders
of

REEVES BROTHERS, INC.

1950.

dividend
Common

business

of

close

the

at

February 20,

KING

T reifjurer

per

payable

1950, to stockholders of

3,

record

at

close

the

March 3, 1950. The
of the

of

business

transfer books

Company will not be closed.
J. E. REEVES, Treasurer

February 14, 1950.

re¬

THE

M

MAKERS

3n

OF

AND

a VOX COMPANY

FIN
FINE

RADIO-PHONOGRAPHS

TELEVISION

RECEIVERS

actual

DIVIDEND

IN WOOLENS"

of

the

NOTICE

Company, held today, the following

to

Winsted,

Bank

in

the

of

present

Winsted,

State

of

claims

for

hereby

payment

to

undersigned at said bank.
H.

December

9,

Convertible

Prior

Preference

BUNNELL,

1949.

at

National

Winsted,

in

Bank

the

necticut, is closing its affairs.
?f

the

association

notified
the

to

present

undersigned at

of

Winsted,

State

claims
said

for

Con¬

All creditors

therefore

are

of

hereby

payment

to

bank.

EDWARD

F.

McARDLE,
Liquidating Agent.

Dated

December

9,

1949.

The

Board

Magnavox

of

Directors

Company

of

declared

The

the

following dividends:

Eayable
olders of
March
1950 28,
to stoekrecord 15,
February
1950.

CLASS

A

STOCK

A

regular quarterly dividend of
per share on the 7% Cumulative
Preferred Stock payable April 14,
1950 to stockholders of record April
1, 1950.
Transfer books will

Hurlbut

located

Stock

$1.75

Liquidating Agent.

The

Financial Chronicle, 25 Park

declared:

regular quarterly dividend of
$1.00 per share on the $4 Cumulative

All creditors

therefore

are

Con¬

connection.

&

were

A

National

association

notified

1st.

S

to

naturally
backed-up

necticut, is closing its affairs.

the

'

RECORDS

the Company,

THE GREATEST NAME

the

Utility

Commercial

1950,

28,

21, 1950.

March Prospects Better

Although

Dated

27,

business

February 8,

an

COMPANY

out before the

move

CLARENCE

V

1950

of

a

and

$1.50 per share payable on
to stockholders of
record at

ATDirectors
the meeting
of the Board
of
of American
Woolen

TRADER

Box

Stock

Direc-

that

Power's

back of the stove, to
offering stage.

of

seeks

14,

close

share

per

of

emission.

Investment

1950

UTILITY

Will be available March

March

$1.50

declared

has

Directors

of

dividend

dividend

extra

today declared

dividends

Trader

quarterly

the

of

Is¬

LIQUIDATION NOTICES

Public

Manufacturing
Company

Singer

Board

Vice Pres. & Treasurer

undertaking
has
been
placed. And the same is reported

SITUATION WANTED

Experienced

of

stockholders

in

The

bring new cor¬
porate undertakings, now on the

President of

appear

The

CHARLES C. M0SK0WITZ

mous

that, "Opportunities for profitable
investment

DIVIDEND NOTICES

Checks will be mailed.

February 9, 1950.

A

new
American Telephone
Telegraph debentures are still

&

is moving to

It

preferred issue for

new

purpose.

oncoming weeks

Fund, Inc., forecast for

both.

or

a com¬

Tiling

Board

¥l»u,yorl

material will

1950 Forecast Favorable

perhaps

or

T,LE

of¬

ferings.
The

raise

a

standing totalled 260,672.

Linton Nelson,

the

a

a

be

definite pattern of
rates, underwriting in¬

interest

to

cleared the

program, has

are

W.

create

Treasurer

refi¬

current

hopes

LOEW'S INCORPORATED

WALL &

Treasury, through

of

reached $4,084,315 and shares out¬

Delaware

bination of

making

G. W. THORP, JR.

of

this

it

stock,

common

quarterly dividend of 121/2 cents
share on the Common Stock,

ary

~

~

And

balance,

March

payable

land's consolidation loan and

period.

The

the

Manufacturers of

a

terms

a

through the sale of preferred,

DIVIDEND NOTICES

tors has

Now that the

same

February 15, 1950

Encaustic

the

the

probably

The Board of Directors has declared

American

same

the

through

securities,

FLOOR

165,451

for

debt

plan

debenture issue.

Columbia Gas Plans
Columbia

done very

Fund promotional

material.

true

260,672

of

present

part of this amount,

preferred.

par

public,

$1,985,982 in June, 1949,
to $3,701,323 in Decembers 1949.
Outstanding
shares
rosefrom
to

company's

raise

$17,000,000

its

non-conversion of its $4,000,000 of convertible debentures

plus

$27,000,000
in the near

some

capital

and

common

for

contem¬

will

from

the

Delaware Fund Assets Jump

is to

the

and

the

to

preferred

unexchanged
public offering.
23, Virginia Electric
& Power Co., will sell to under¬

should make Mutual Funds

copy

additional

this

it

future.

Feb.

Mutual

of

highlighted

are

Main

to

plates raising of
of

results

that

no

of

stock taken up for

Investors

Avenue

exchange

convertible

called

Booklet

Inc.

approach

booklet,

of
to

tion,

Putnam

of

shares

On

horizons."

our

Annual
will

be

now

&

offer

preferred

$2.50

we

Sharp

171,815

is

of America—cannot

day,

same

Inc.'s

par

the

the

Dohme

people

more

long halted by anything

Place, New York 8.

Good

present

to

money—which

lean

bonds.
Business

expansion

The

Government

inflation,

stocks.

for

things

On

so-called

a

Its

to

but also the
continued appeal of the high cur¬
rent yields available from com¬
mon

more

The

continue

wartime to

fields of enterprise, giv¬

new

ing

pause.

over-all

will

toward

economy.

war

tating.

month-end high would appear to
reflect not only a returning belief
the

are

quest.

"The subsequent advance to the

that

a

cold

air

Sholley's statement be¬

Joint

Economic

Government

management.'

Jnoney
the

while

tion from

shareholders,

subscribed portion.

observer, there

graphic representations of

tinuing.

ment.

and bankers will take up
any un¬

has amply demonstrated
virility by
recuperating
so
readily from the shock of transi¬

better demonstration of

no

statement

Group

its

sav¬

when

Group Securities Analyzes

dustry

to its

common

about $17 billion

accumulated

of addi¬

tional

stockholders of record

ment,

pany.

fering of 454,457 shares

$3,000-$7,000 in¬
bracket, for example.

to

writer.

past

Consumers Power Co.'s of¬

on

operating

disclosed

43

week.

the people in the

stock

to

in¬

next

Subscription "rights" expire Mon¬
day

believe that American

for

a

fore

offered

"We

important

to people who have
liquid savings, and no experience
in securities investment—92% of

dent S. L.

be

which

will be available.

ahead

are

slated

bonds,

two

arguments

14

capital

deals

Co.

only

Dividend

Feb.

of

of

Service

today,

Common

ties and Exchange Commission on

shares

securities

for

The

can

of

Securi¬

investment

supply

Public

in

its

week,

The

Aside
from
the
sale
of
$2,000,000 of Lake Superior District

graphs should present, for
Mutual
Funds,
strong
selling

economic

with the

2,000

from

For the

Mutual Shares Corp. Offers
filed

the

industrial

to

$220 billion,

come

*

Shares

limited

public

issues.

These

Director.

Mutual

the

understandable

rose

particularly

—

to

of im¬
offerings,
March promises to bring decided
improvement in the flow of new
way

corporate

new

Company, Inc.

Edward J. Samp,

JVew York

for

featuring

1900

increasing

bring anything in the
portant

ings increased from about $22 bil¬
lion to $175 billion, and the dollar
depreciated from $1.00 in purchas¬
ing power in 1900 to 35c in 1950.

yours,

*

activity

1950, industrial
production increased from. 25 to
175
(1935-39 = 100), national in¬
to

of

new

of

measures

the Dow-Jones Industrial

From

Department of Securities

sR

1949,

the

Keystone Investor

various

years,

course,

sales material.

as

of

prices

view

February issue. The book¬

charts

come

curity

of

$196,has
Mid-Century

end

Average.

expense

an

Special

value

production, corporate profits, na¬
tional income, accumulated sav¬
ings,
consumer
prices, and, of

or

report;

a

economic

com¬

deliver the message of

to

sary

issued

fifty

as

elaborate scale than

the

let

(b) the quality of its
management; or (c) the printing
of the report in colors or on
a
more

at

for the

the advantages of
a medium of in¬

(a)

company

record

new

a

market

000,000

Edition of The

material

of

at

background,

amount of money seeking income
in 1950 could produce higher se¬

greatness

Funds,

as

the

to

respect

condition of the investment
pany.

re¬

company

assets

reached

a

zontally adds dividends from true
come

whose

Custodian

this

into

Economic Behavior
Keystone

in the future,

any

that includes

ers

to be

seems

Keystone Graphs 50 Years of

25, you are
that this de¬

prospectus, report to
stockholders, or sales literature
approve

the

business picture,

fast

Investment

Committee

partment will not,

ate

op¬

a

the

ont.
As

it

the

and

of the building industry
high level. Even the coal
situation, the outstanding blot on

at

future

judged by the rules
the Internal Revenue Depart-

of

automobiles

of

eration

a

income

some

production, steel pro¬
to capacity, fore¬
continued peak produc¬

of

tion

de¬

no

of

favorable

the

Outstanding in this
new high level of elec¬

news.

What is income for distribu¬

year.

in

will

withholding

as

year

by

being

is

power

casts

its true net

can,

current

There

liberate
for

it

as

the

increased

duction at close

company

which carries out its purposes and
functions properly will
declare,
as

maintained

instances,

is the

news

Dividends

(c)

certain

a

be

can

and—even

strengthened

govern¬

etc.

cases,

come.

investment

rates

balance,

on

in

to show its good faith in

company

the

dividend

however.

rare,

bursement is

corporations
will
ap¬
proximate those of
1949.
With

current month is not expected

(747)

February

28,

1950

be clbsed
on

all

March 29, 1950.

Guaranty

Trust

payable

of

25

March

cents

1,

holders of record

1950

A

dividend

payable

Company

of

25

March

holders of record

share,

to

stock¬

STOCK

15,

cents

1950

per

share,

to

stock¬

February 28, 1950.

of

New York.

R.

Treasurer.

A. O'CONNOR

President

F. S. CONNETT,

February 15, 1950.

per

February 15, 1950.

COMMON

on

Dividend checks will be mailed by
the

dividend

three

classes of stock outstanding and will
re-open

A

February 8,1950

U

(748)

COMMERCIAL

THE

CHRONICLE

FINANCIAL

&

Thursday, February 16, 1950

bills

current

BUSINESS BUZZ

to

for government aid
business, like the Lucas

small

bill.

Behind-the-Scene Interpretations
from the Nation's

/J

not

-m m

Senator

hand,
let the

to

propose

govern¬

of the plants

any

its financing would broadly as¬
sist.
'

JL UU

JljL Ii/fjh

Capital

other

Maybank and his colleagues do
ment operate

gJ

^

the

On

Washington...

(This column is intended to

WASHINGTON,
ment

for

tions

and

C.—Senti¬

D.

deep excise
blazes

to

reduc¬

tax

with

making

getting compensating
revenues, is sweeping the House
with epidemic force.

a

at

pass

It is reported firmly that
isn't

a

cise

tax

to

ghost of
six

the

Treasury
Instead,
for

"there

chance" that

a

will

reductions

be

recommended

ex¬

held

by

the

the White House.
it is said, the outlook is
and

cutting back of the rates and

a

level

of

excise

This,

some

reduce

taxes

One

would
by

revenues

billion.

who

think

prewar.

think,

sources

Treasury

about $2i/4

to

reportedly does not

is

so

Leon

Henderson,

former OPA Administrator. Mr.
Henderson has been engaged by

organization fighting for tax

an

relief

to

ered

excises

«ood

the

.rinced

actually
in

as

as

before.

It

Henderson

who

con-

Administration,

the

not

mnwilling to be convinced, that

.raising

wouldn't

wages

inflation.

If

he

cause,

sell

can

one

'

thing,

maybe

he

sell

can

an¬

would suppose from the

closed
only on "non-controversial" sub¬
jects, perhaps a piddling $100 mil¬
lion or so, and there is no thought
of any corporation income tax inwill

.loopholes

this

demand

bosses.

Presidential

veto

deflect

might

them the blame for the sad
state of the Treasury's finances,
the members reply by saying they
aren't worried. They would like
to see the President try to harvest
any votes out of vetoing a popu¬
reduction

tax

in

not

time

*

*

in

election

an

ation.

have

and

cannot

until

form of

bait of two to three bil¬

a

lions for

cooperative housing, are
beginning to lose their ardor for
this proposition, now that it is
about to become a reality.
That is why

couple

they, along with

of

servatives

Republican

and

con¬

couple

a

in

motion

a

Banking

the

Senate

Committee to

final vote

on

operative

the

co¬

could

get,

the views of Chair¬

the

not

inflationary.

was

made

Tobey

Board

accept

of

to

as
or

was

out

little

poor

long enough
and in

feel

to

mood to

a

The

motion

Senator

Charles

Hampshire,

New

that

vote

was

cans

were

so

making

country

speeches

Abraham Lincoln
to

Republi¬

many

about to go around

settle

that it

such

issue

until

they

ever,

they

were

an

got

important

back.

How¬

there then.

If

the U.

merce

S.

is

not

reporting,

The

S.

U.

up

action

idea

Chamber

possibilities be¬
understanding in
Congress that equity capital is
hard to get and that SEC "red
tape" has something to do with
there is

an

*

jj:

Behind

the

kill legis¬

to

move

lation

legally authorizing the use
of delivered pricing systems is the
seeking

strategy

of

more

less

or

delay

to

motion

routine

a

by

the House in the hopes that "lib¬
erals"

beat

can

the

meanwhile

bushes

demagogic

to

off

scare

proposition.
is

believed

now

routine

motion

that

of

the

if

the

getting

House, which already has adopted
delivered

a

legalization

pricing

conference the
Senate bill for reaching an agree¬
ment on differences, can get to a
bill,

send

to

to

vote, then the bill will be OK'd
and

have

to

Administration
objection, and

The

pass.

seems

no

the House would also OK it.
Some

of

the

believe

who

same

it

is

"liberals"
to

evil

an

Congress" to bottle

up

lic

housing
no

see

tics

to

voting

the

keep
on

"civil

and

from

J.

Senator

"study" NOT "investigate"

RFC.

the

Scott

Majority

bright

it

When

Senator

to

would

was

indicated

Lucas

(D., 111.)

not

"witch

hunt"

a

#

enacted this year, and

lems

one

of the

it has

a

lot

aid,

of steam behind it.

and

trickling

there

back

the

that

of small

word

the




is

rank

the

it

behind

intended

is

it

sition,

as

many

as

world

to enlist
possible

Senators, Re¬

two dozen

of the

"black"

publican and Democrat,

Republicans and "pink" Repub¬

conservative Democrats
Democrats,
who

licans,

radical

and

several
the

months

then

sponsored

ago

of this bill, the

forerunner

"Veterans Eco¬
Development
Corpora¬

proposed

nomic

the

be

tion act."

•

This bill bears only

which

the smallest

predecessor,

its

to

designed primarily to

was

help

veterans

their

own

get

established in

small businesses.

has

with those who

along

done,

are

cooperating with him on this pro¬
is

maximum

to

show

what

truly

a

imagination and sure deter¬
to

solve

a

number

of

Instead of being
usual

what

proposed to

do,

penchant

this

for

problems

broad

with

piecemeal,

all

inhibited by the

legislator's

dealing

do.

author has

is to deal with

problems at once, through the

cal

United

LOS

to The Financial

bald

affiliated

do

which

including

materials

foreign

thereof, to guaran¬
foreign
investments
of

production

and

to

the

small

bill

does

business.

to

the

not

limit

corporation

issue,

latter
the

the

entire

solution

up

to

corporation. Thus it lacks the

inhibited,

to

the staff

of Sutro

&

Co., Van

Nuys Building.

timorous

Riverside Cement

Spokane Portland Cement
Oregon Portland Cement

Coplay Cement Mfg.
Giant Portland Cement

pro¬

adequate, but simply and directly
the

liam F. Ackerman has been added

certain

to

maturities where collateral is not

leaves

Chronicle)

CALIF.—Wil¬

a

respect

posed

to The Financial

ANGELES,

Cement Stocks:

nutshell the bill in¬
corporates, among other things,
all phases of "Point IV", of aid to
friendly countries to succeed the
Marshall plan, assistance to vet¬
erans,
and
a
broad
approach
Thus, in

LOS

011

carry

technical aid.

In

has
become
King Merritt &

Sutro Co. Adds
(Special

useful"

and

tee

with

Co., Chamber of Commerce Bldg.

and

public pro¬
jects at home and abroad, to
help veterans, to help assure
the U. S. of necessary and criti¬
cal

R.

facilitate the establish¬
expansion of "neces¬

to

ment

Chronicle)

attract sufficient capi¬

now

tal,

lines

etc.

the

fis¬

McDonald

abroad, to attract profitable in¬

fessional,

on

CAL.—Archi¬

ANGELES.

vestment in those business, pro¬

not

advise

problems.

(Special

enterprises

useful

in

sons

and

matters

Wit!" King Merritt & Co.

States and abroad, to assist per¬

toward

problems simultaneously can

the

in

facilities

plant

industrial

of

post, he will be re¬

new

West German Government

possible

make

use

Americans,

Maybank

Senator

of promoting small

to

business,

daughters and
I.

two

sponsible for advising the U. S.
High Commissioner and the ECA
Mission Chief on all question of
internal financial policy and will
participate in negotiations on fi¬
nancial

for

created

is

agency

the purpose

sary

HAnover

approach

the

Teletype—NY 1-971

2-0050

LERNER & CO.
Investment

10 Post Office

Securities

Square, Boston 9, Mass.
Teletype BS 69

Telephone HUbbard 2-1990

of

Hill, Thompson & Co., Inc.
NEW

YORK

5

*

soon

will

Maybank

bill

you

FOREIGN SECURITIES

of

world

promotion

prosperity, the accomplish¬

ing of technical aid for underde¬

70

Underwriting Offices

WALL

STREET

Tel. WHitehall

4-4540

r.ARL MARKS & ro. INC.
FOREIGN SECURITIES

re¬

of

Executive &

All Issues

business, technical

development
and

agency

Firm Trading Markets

fresh approach to the prob¬

sources

A

of

in question would
"Economic Development

The

be more

it isn't yet available

Although

agency.

This

Maybank is probably
the chief author of this propo¬
While

over-riding

single

a

has

persistent

convictions,

some

a

and

Corporation."

in the future.

news

and

let it go through.

Fulbright, however, is
with

Ful¬

that

Leader,

the RFC, Lucas

man

Fulbright,

after all got his $50,-

(D., Ark.)

the

William

for

*

abroad.

mination

things the President really wants

Jj:

veloped areas, housing, surplus
disposal, procurement of scarce
strategic materials, and the pro¬
motion
of American investment

posal,

this problem.

ried

lives in Locust Valley, L.

In his

of

creation

rights"

House

can

we

pub¬

evil in obscure tac¬

hearing

Here

together,

What

bills,

Perkins—'If we put our heads
make a stronger cement'?"

"Just WHAT do you mean,

relationship

thwart the "will of the majority

of

Mr. Cattier, a native of Brus¬
sels, Belgium, became a natural¬
ized citizen in 1942.
He is mar¬

ap¬

have

to

pears
cause

be

be killed. It is

special partner.

a

He entered the U. S. Army as a

rank of Major.

of holding

public scrutiny,

can

about

or

ticable way

for

sidy

on

private in 1942 and was separated

the

stop, look, and listen.

that this newest housing sub¬

ex¬

from the service in 1945 with the

of

away

too early, however, to

been

is

se¬

examination

hensive

*

It is yet

It

curities laws, this presents a prac¬

The

from this proposition and want to

has

he

1930.

his functions

come

compre¬

a

which

since

1, at which time he will
resign from general partnership
in White, Weld and Co., to be¬

and insider trading rules
of the SEC, as proposed in the
bill, but instead

of

partner

a

March

proxy,

Frear

with

firm

up

that what

the

is

pected that Mr. Cattier will take

Com¬

amendment

an

extending

now

of

Chamber

sell its idea

can

needed

Cattier

associated

*

*

of this "study" there may

beginning to back

are

not

was announced by
Administrator, Paul G. Hoff¬

Mr.

a
*

the

about

was

the

to

White, Weld and Co., New York,

for.

000 to

Ostensibly the reason for post¬
poning the fatal day of the final

Adviser

a

ac¬

cept something less than is asked

is

the

of

Germany,

ECA

have

men

was

"liberal" Republican.

say

in

compromise

a

union

Division

United States High Commissioner

give in somewhere,

the

Financial

and

it

that

knows

Financial

the

of

EC A Mission to Western Germany

bold

bill

by

the

McCabe of

Reserve

whether

a

until

bill

committee

Thomas B.

Federal

delay

$2 billion

housing

the

Feb. 23,

boys

pointment

York investment banker, as Chief

man.

been

of

Democratic conservatives, voted

wise

to

after

It

"

a

WASHINGTON, D. C.—The ap¬
of Jean Cattier, New

long

a

receive.

may

union

The

will

*

.

The Republican "liberals" after
offering bills of their own in the

W.

which

they

Incidentally,
the
Chrysler
it is reported, has been
informally one of "planned" dur¬

year.

man

and

insurance,

pensions

hence

of EGA Mission

interested in sick¬

other

views.)

Cattier Heads Div.

a

the

strike,

this

on

for

are

and

coincide with

own

to

union

except

majority

mood. When

upon

after

the big

by

Actually,

of older workers,

ness

and may or may not

the "Chronicle's"

this shortage of venture money.

That is the present

for

given

minority

it is suggested to members that a

a

attention

enormous

be

creaser—

lar

one

this year on the Frear bill.

other.
«Tax

not

are

as

so

and trade

Treasury

position

a

Mr.

was

will

production

leave

to

men

interested in pensions

as

demonstrate that low-

stimulate
as

union

of

file

and

nearly

re¬

flect the "behind the scene" inter¬
pretation from the nation's Capital

Trading Department

SPECIALISTS

50 Broad Street

120

New York 4, N. Y.

AFFILIATE: CARL MARKS & CO. Inc. CHICAGO

,

,

BROADWAY

Tel. REctor

2-2020