Full text of Commercial and Financial Chronicle : February 18, 1954, Vol. 179, No. 5300

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

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BUSIHESS ADMINISTRATION
LIBRARY

fke Commercial

an

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Chronicle

Financial

Reg. U. 8. Pat. Office

EDITORIAL

We See It

Much of the Lincoln

and

year

Day political oratory this

ing,"

or

;

its

!

ances

♦

should
some

the

utterin both

of the more vocal elements

If all this is a foretaste of what

political parties.

j is to come in the campaigns now just getting
under way, we shall have good cause for disgust
i

before November arrives.
Verbal

politics.
-—or

;

to

American
It began with the birth of the nation
before that—and has flourished from

time

ever

in the

So far

since.

because of increasing supplies dumped

served, however; - it has never helped ta define
the real issues or led to a better understanding

;

—

it is

a

object is to work toward improving functioning of

out

than to

that the Administration's

pand the total market
The

In

-I.-.

is

There

what

to

the
we

transition

insatiable

the

to

page

50

comes

cial.

and

war

needs

of

scientific and

more

It

is

There

in

Ezra

Tart

simultaneously

now

peak

Korean

Prices

195'■

Bensoa

17%

average

of February,

1951.

the

statement

THIS

Winter

Municipal

ALL

ON

of the

Plaza

CALL
/

Hotel

U. S.

STATE

and

AH

Chemical

MUNICIPAL

★

★

COMPANY

BONDS

*An

for

Bank

Teletype

RE 2-2820
NY

1-2152

address

STREET

modest amount of long-

by Dr. Reierson before
Conference, New York City, Feb.

the Sixth
8, 1954.

on

page

Annual

40

Savings

State and

185S

Municipal
Bonds

Exchange

Stock

York

Stock

Exchange

Cotton

York

Exchange

Inc.

Exchange,

Board

Orleans
and

OF NEW YORK
Bond Dept.

Active

Net

To

LAMBORN & CO., Inc.
WALL

a

Mempers

of

'

I

Trade

Cotton Exchange

Bond Department

other Exchanges

N. Y. Cotton Exchange
NEW YORK 4,
Chicago
Miami

System

Roy L* Reierson.

lengthen the maturity distribution of the

*

Members N. Y. and Amer. Stock Exchanges

Bell

to

H. Hentz & Co.

New

THE NATIONAL CITY BANK

Broadway, N. Y. 6

market generally
of progressive re¬

the same time, an effort

Continued

Chicago

MABON & CO.
115

the

as one

At

made

was

Commodity

Sixty Years of Brokerage Service
DEPARTMENT

year,

a

44

New

Preferred and Common Stocks

BANK & TRUST

99

which

policy

interpreted

American

Corporate & Foreign Bonds

★

1953.

tal

straint.

New

Government—Municipal,

State and Revenue Bonds

IIAnover 2-3700

in

rates

early months of last

Treasury debt by the sale of

page

man¬

Boston Securities Traders Association at the
appear on pages 23 to 30 inclusive.

Complete Brokerage Service

Securities

factors

ISSUE—Candid pictures taken on the occasion of the 30th

Dinner

MARKETS

ONE

of

debt

activity was at record heights, capi¬
requirements were large and the
credit authorities were pursuing a1

re¬

post-

Benson before the Joint Committee
Washington, D. C., Feb. 4, 1954.

Secy.

by

set

and

rapid rise in prac¬
tically all categories of interest rates,
both short- and long-term.
Business

The realized net in¬

on

the

experienced

we

by farmers

below

Continued
*A

interest
In

Established

U. S. Government,

BOND

of

all

to

second
credit

policies of the authorities.
The operation of all these forces is
vividly illustrated by the behavior

$12.5 billion, almost $2 billion less than in 1951.

the Economic Report,

the

agement

of farm operators in the year just ended totaled

come

The

includes

commer¬

m

telephone:

ticular.

a

garding the serious declines in agri¬
cultural
prices and incomes since

Sheraton

State and

business outlook in general and the

not

adjusting

determined

.demand for investment funds in par¬

are

these powerful forces.
We have all been concerned

market.

in the investment markets are

The first,is the
in which the investment community appraises the

way

postwar demands

moderate

economy.

in money

in business, both
will support ease

basically by two main sets of factors.

surprising that agri¬
culture experiences some difficulties

PICTURES IN
Annual

inflation

of

the
continuing technological changes
within agriculture as farming
be¬

types of charges now more frequently coming
on

conditions

more

aggressive "cheap money" policy, but points

an

Conditions

transition.

period of

Likewise there
is the transition from the seemingly

our political
system over the longer period,
will, therefore, inquire carefully about the con¬

Continued

and predicts

ins!itutions,

savings

i

Situation
a

with

out, until there is sign of upward turn
economic conditions and credit policy

general price level.

of

type of campaigning to flourish.
In the instant
case it is not merely a matter of the wild accusa¬
tions of treason and the like, but various other

nalize

ex¬

restricted production.

a

from

peace-time

possible for this

from them, and

anticipate will be relative stability of the

however, it is prob¬

to make it

against

Agricultural

practice will continue — and the more hoped-for
profit, the more of it we shall have. The thought¬
ful citizen, interested in improving the workings

seem

as

move away

recommendations aim to

general, agriculture is in

ably quite futile to rail at it or to demand that it
cease
forthwith.
So long as "practical politi¬
cians" see, or think they see, profit in its use, the

ditions which

continuing high level of funds

a

underlying economic pressures will probably cause some
further easing of bond yields during 1954.
Holds recent
reduction in Federal Reserve discount rate does not sig¬

Points

of flexible price supports.

disgrace.

As is usual in such cases,

cludes outlook indicates

and urges adoption

problems or to wiser decisions on the
part of the voters. At best it is a nuisance; at
worst—and it is at about its worst in some in¬
stances this year

the

accumulating

of current
!

on

Commodity Credit Corporation, is in danger of collapse,

be ob-

can

as

tions, points to recent firming of bond yields and money
rates as result of easing of the credit situation.
Con¬

Says present price support

price support program.

program,

relation to

agriculture, and outlines recommended changes

market prices rather

chicanery is hardly new to

even

time

ditions in

York

discussing the economic outlook m
savings investments and interest rate fluctua¬

Dr. Reierson, after

Secretary Benson sketches present and prospective con¬

of "spellbind¬
in

Vice-President, Bankers Trust Company, New

Secretary of Agriculture

"mud slinging," has found

manifestation

extreme

most

of

we say,

And Interest Rates
By ROY L. REIERSON*

By HON. EZRA TAFT BENSON*

that had gone before it has

some

hardly been elevating. This type

;

Supports
Danger oi Collapse!

In

Copy

a

Savings, Investments

Farm Price

As
i

Cents

Price 40

N. Y., Thursday, February 18, 1954

New York 7,

Number 5300

Volume 179

T.LWatson&Co.

NEW YORK 5, N. Y.

Teletype: NY 1-708

Markets

Dealers,

Banks

Detroit

Fla.

•

•

BANK

NATIONAL

Pittsburgh

Coral Gables

OF THI CITY

OF NEW YORK

•

Maintained

and

Brokers

CANADIAN

TRANS-MOUNTAIN OIL
PIPE LINE CO., INC.

50 BROADWAY

•

Beach

Geneva, Switzerland
Amsterdam, Holland

Hollywood,

CHASE

THE

Bldg.

N. Y.

BONDS & STOCKS

Public Service Co.
1

of New

Hampshire

COMMON

Commission Orders Executed On All

NEW YORK 4, N. Y.

Canadian Exchanges at

sugar

CANADIAN

Members N. Y. Stock Exchange
Raw

—

Refined

—

Liquid

Teletype N Y 1-2270

American Stock Exchange
DIRECT

Exports—Imports—Futures

Established 1832

WIRES TO




BRIDGEPORT

PERTH

AMBOY

MONTREAL AND TORONTO

Goodbody & Co.
MEMBERS

DIgby 4-2727

Regular Rates

NEW YORK STOCK

115 BROADWAY
NEW YORK

Analysis

upon

request

DEPARTMENT

EXCHANGE

1 NORTH LA SALLE ST.
CHICAGO

DoKcnox Securities
Grporatiot*
40 Exchange Place,

New York 5, N. Y«

IRA HAUPT & CO.
York Stock Exchange
Principal Exchanges

Members New
and

other

111

Broadway, N. Y. 6

WOrth 4-600O

Teletype NY 1-702-3

WHitehall 4-8161

Boston

Teletype NY 1-2708

Telephone:

Enterprise

1820

2

The Commercial and Financial Chronicle,.

(770)

We position

The

and trade in

American Marietta
Central Indiana Gas
Central Public Utility

in the investment and advisory

participate and give their

reasons

they to be regarded,

are

as an

New York

Five Beneficiaries of Atomic

Corporation

Smelters

Development

Telephone Bond & Share

Rather

than

particular
to

say

Age

and

the

any

effect

of

atomic energy
and atomic
power

upon

economy.

Considering
inevitable

the

im¬

enormous

Corporation
Established
Associate

Member

Exchange

120 Broadway, New

York 5

Teletype NY 1-583

BArclay 7-5660

versal

at

once

Rights & Scrip
Since 1917

search

Harold S. Munroe, Jr.

Atomic

successful

fission

the

atomic

became

detonation

of

Nuclear

bomb.

reality

Members
New

Stock

American

120

Exchange

Stock

York

Exchange

BROADWAY, NEW YORK 5

According to
figures, contrac¬
tors' employees numbered 142,000
of the 149,000 persons employed in
the
atomic
energy
industry in
June
1953. The remaining 7,000
(less a few military personnel)
are employees of the Atomic En¬

Relatively few persons know
exactly what is going on in the
atomic

numerous

Company

Alabama-Tennessee Natural
Gas Company

Company

LD 33

available

to

both

ultimately to be
atomic energy, was

by

launched

and

January of this
submarine

to

has

be

The

plant in
in

been

a

in

The second

year.

powered, the
of con¬

so

Wolf," is in

late

process

prototype of the
land based model

successful

operation

for many months at a test station
in Idaho. More advanced types of
atomic
for

propulsive units

powered

submarines

in

are

of

process

development. As far as other mili¬
tary considerations are concerned,
President Eisenhower had this to

iri

say

BOUGHT

SOLD

—

Nations

COMMON

STOCK

Dec.

on

of

atomic

Members:

Midwest
Detroit

Stock
Stock

Exchange

DETROIT 26, MICH.
Branch

Office—Bay

City,

Mich.

has

ment

been

Armed

States
Air

such

that

atomic

status

Services.
the

within

In

the

Army, the

Force
all

are

and

the

capable

It

has

the

would

this

$18 billion

created

tan

Power

the

this

to

Program.

$20

or

that

guess

figure

atomic

is

closer

billion.

is

energy

industry.

Stock

Exchange

25 Broad St., New York 4, N. Y.
Pteae: HAnover 2-9766

military

on

uses

indication

every

for

the

However,

as

a

tensions

of

foreseeable

there

is

some

fu¬

near

private industry will be given

incentives to participate
fully in the atomic power
program for peaceful purposes.
Perhaps
the
most
important
more

group

which

Chemical

includes

now

chemical

18

,

group
electric

manufacturing,

4

systems,

power
one

It

by

con¬

was

so

Engineer District and has been

company

of

competitive basis. This group

companies

feasible

believes

that

and

fore

the end of

to

a

that

the

reactor is

they

be

can

1954

without any

private enterprise:

permit

(1)

To build,

atomic

(2)

To

of

pose

own

and operate

To

dis¬

own* and
materials.

NYSE
ASE
OC

ASE

Fansteel

acquire,

and dis¬
of fissionable materials.

(4)

own

To sell and distribute end

products
atomic

(5)

Corp.

_

Co.__

Consol.

Corp.

of

America

Engineering

and

energy

by-products
facility.

in

exploitation

f50 cents plus 5%

in stock.

to

pro¬

of

such

in¬

as are
made by private
industry for profit, advancement

New

American Stock

(6)
and

To
obtain
trade secret

relatively rapid.
While

military

for

the

of

is

atomic

much

a

25 Broad

patent
protection sub¬
own

use-

Hflnover 2-0700

The

of

consensus

private indus¬

try opinion is that if the Atomic

difficult

Direct

wires

to

Investment
in

proposi¬

-

branch

our

offices

ably in
ture.

is known

It

that such "blue

duPont,

term

on

or

write

publications

current

+

Japanese securities

General
Carbide
heavily com¬

Union

another branch of

one or

the atomic energy industry. From
the point of view of a very long-

holding

invest

to

our

Westinghouse,

as

and many others are

mitted in

for

Opportunities
Japan

Call

be put to work profit¬
this vast field of the fu¬

it

in

might
of

one

be

YAMAICHI

SECURITIES CO., LTD.
Established
Home

better

these

panies in order to attain

Office

Brokers

&

Tokyo

1897

—

48

Investment

Branches
Bankers

com¬

posi¬

a

111

Broadway,N.Y.6 COrtlandt 7-5680

tion in the atomic power

industry
as a small part in a
greatly diver¬
sified field. However, my personal
preference tends towards smaller,
less well known companies which,
in my opinion, will benefit per¬

centage-wise
degree

to a much greater
result of indirect par¬

as a

ticipation

in

the

Atomic

Power

Program than will the large com¬
panies mentioned before. By in¬
direct

participation

I

that

mean

Commonwealth
Oil

Company

these companies are all makers of

metallic alloys which are used to

greater

a

or

Power

lesser degree in

or

of

aspects

more

Program.

companies
poration,

the

Some

one

Atomic

of

these

Beryllium

are:

Cor¬

Lithium

I should like to

this list is in

sive.

There

panies just

emplaced

no

Bought

are

in

industry. It

emphasize that

numerous

the

atomic

that

I

have

that

fact

four

in

named

in the issue of
The

stocks

years.

of

them

Thursday, April 20,
that

done

all

of

1950

inconsequential. It is

to

my

package

a

in

listed
In

stocks

is

next

the

four

1954

firm be¬

1950

when

as

years

I

am

far

Ratio

the

-23 Y*

27

*6rc

6.C

{$2.00

13.5

great

the

34%-21^

25

58.50

7.0

+2.00

12.5

35

2.50

7.1

{ ?5.20

must carry on

I

it

originally

from being an

of

many

in

the

the

a

ex¬

power.

facts

foregoing

lication entitled
1953

Earning

»

closing I should like to state

pounded

Div.

CROSS

them.

that I

A

great
as

RED

is

purchase

just

Your

these

extremely well

period of

these

Building

rather

lief that the profit potentials from

over

Bank

this very column

fact

have

the

five

of

Miami—Pan American

are

followed

out

Gordon Graves & Co.
30 Broad Street, New York 4

the

closely in the past several
In

Quoted

energy

above

companies enumerated
ones

com¬

not better

happens

so

Sold

comprehen¬

well if

as

—

Corporation,

way

been derived from

Current

NY 1-1557

Birmingham, Ala,
Mobile, Ala.

industry, it

power

pert in the field of atomic

"

•

,

more

and

purposes.

Exchange-'
Exchange

St., New York 4, N. Y.

New Orleans, La.

money can

was

normal

its

Stock

it is

relatively simple to
point out the ultimate importance
<

of

ject only to full disclosure to the
Commission

York

in the art of atomic power will be

an

To obtain licenses from the

ex¬

have

monthly pub¬

"The

Bulletin of

N. Q. B.
OVER-THE-COUNTER
INDUSTRIAL STOCK INDEX
14-Year Performance of

6.7

-28

8V4- 3sa

Corp.__

tThrough Feb. 5,

amended

ventions

1953

Pittsburgh Metallurgical Co. 38

*In stock.

permit

2/5/54

36

_

is

this point in

Atomic Energy Commission.

High Low

Metallurgical

Lithium

Act

vide certain patent protection and

in

Approx.

Company

Steiner, Rouse & Co!
Members

1950.

acquire,

source

Quoted

Members

Energy

were

plants.

energy

tPrice Range Market

Beryllium

,

and three

and associated plant for
generation of electric power

on a

1953-1954

oc

Bought—Sold

Partner,

B. W.
Pizzini & Co., New York City.
(Page 31)
%

reactor

the

to

By its
a

Louisiana Securities

Pittsburgh
Metallurgical
Com¬
engineering and construction or¬
ganizations, a team commanding pany, Fansteel Metallurgical Com¬
a
total investment of $8 billion pany and Consolidated Engineer¬
in
its
various
companies.
The ing Corporation.
As a matter of
present effort of these companies
interest
I
am
appending some
is directed toward the develop¬
pertinent statistical facts about
ment of the preliminary design of
a
high temperature, fast-breeder these five companies.

8

15V4-10%

14

Tele. NY 1-3222




few

certain

I

by the war-tiine Manhat¬

Traded

York

past

evidence that within the
ture

that

Where

New

the

international

continuing
future.

use."

Bought—Sold—Quoted

Members

accent

(3)

reported

presume

time

tractors'

(9pp.enJmm&t 8l

the

pose

been

Atomic

nature

INTERNAL SECURITIES

in

been

progress along commercial
lines has been delayed because of

Corps

putting

to military

weapon

the

GERMAN

has

years,

United

Navy,

Marine

of

our

$15 billion have been invested in

And Successor Companies

field

government
subsidies,
provided
have virtually achieved
the Atomic Energy Act is modified

weapons

through July 1953 approximately

I. G. FARBEN

of

and

has ready to undertake the detailed
develop¬ design and construction phases be¬

This

Exchange

1051 Penobscot Building

invested

dollars

of

weapons

been—remarkable.

conventional

MORELAND & GO.

the point of view

development of such

8, 1953:

size and variety the devel¬

opment

L. A. DARLING CO.

of the largest in this

income.
Rapid as the expansion in this

speech bef©re the United

a

"In

QUOTED

this industry will

years

one

Edison-Dow

submarine

struction.

Lynchburg, Va.
Tele. LY 62

few

first

power

Scott, Horner &.
Mason, Inc.

sources

Jr.,

Company—B. Win-

Pizzini,

Electric,

a

of private companies seek¬
ing to develop atomic power for
peaceful purposes is the Detroit

"Sea

Dan River Mills

power.

general public. For example,

powered

throp

chips"

within

that

the USS "Nautilus" built by Gen¬
eral
Dynamics Corporation, the

christened

Commonwealth Natural Gas

capital

persons

evident

show

of

of

both

empire, it should never-:
be

of

the

American Furniture

and

which

in

Trading Markets

terms

result

field

Atomic

Munroe,

tion to determine where investors'

Commission.

its

and

However,
certain facts have been published

Tel. REctor 2-7815

contracts.

sociologi¬
cal, political and economic point
of view will undoubtedly alter our
entire way of living.

a

ultimate impact from a

Mc Donnell & To.

for

gross

the

first

engines

Academic bodies
knowledge under

new

country, from

in

of

S.

,

available

latest

become

an entirely
history of man¬
kind, commenced in July of 1945

the

atomic

peace.

for

similar

very

dis¬

era

with

and

war

Age which has opened
new

fissionable

new

theless

turbing.
The

Leece-Neville

dustrial

in

amaz¬

and

En¬
con¬

employed
the atomic power industry at the
present time ranks low in our in¬

subject is

ing

the

u c e

invested

lack of

interest

Atomic

Private

the uranium, promaterials,

refine

d

While in

almost uni¬

this

Specialists in

Beneficiaries

Partner. Hay, Fales & Co., New
York City. (Page 2)

nor

under contract construct the

plants,

ergy

the

upon

lives of every
one of us, the

1920

Stock

American

pact

be,

to

by the

Commission.

develop

security, I would like
few words about the

a

Atomic

our

New York Hanseatic

Five

fabricate the atomic weapons and

Power

discuss

to

intended

not

are

cerns

City 1

Ohio Edison

Puget Sound Power & Light

particular security.

a

continued

so

Members of the New York Stk. Exch.

Public Service of New Mexico

for favoring

ergy

Partner, Hay, Fales & Co.,

Metal & Thermit

Alabama &

Their Selections

offer to sell the securities discussed.)

HAROLD S. MUNROE, JR.

Northern Indiana Public Service

Polaroid

Week's

field from all sections of the country

(The articles contained in this forum

Investors Diversified Services 'A'

Thursday, February 18, 1954

Participants and

Power—Harold

6% Notes

&

This
Forum

A continuous forum in which, each week, a different group of experts

Gulf Interstate Gas
Common

Security I Like Best

..

1954.

{Estimated.

0

P. E.

0
.40

10.45

17.8

2.9

+0.80

17.5

§12 months ended June 30, 1954.

Atomic

Scientists"

November

"The

Annals"

1953

of

Science

entitled

Energy."

*

from

35 Industrial Stocks

publication

the

Academy of Political

Atomic

and

American

FOLDER

"The

Impact of

REQUEST

National Quotation Bureau
-

These

Continued

ON

and Social

publica-

Incorporated

46 Front Street
on

page

31

NewYork4,N-Y.

Volume 179

Number 5300

,..

The Commercial and Financial Chronicle

(771)

Are We in lor More Inflation?

INDEX
I-

.

By RAYMOND RODGERS*
Professor of Banking

,

School of Commerce, Accounts & Finance, New York University

Price

Farm

Supports

in

Danger of

<

Page

revived inflationary sentiment, induced by the
a $20 billion deficit is needed in the

on

off

budget to ward

Dr.

depression,

a

Rodgers

Are We

political aspects of this inflationary
Holds argument that wage increases are necessary

complex.

7

to

preserve

;

3

...

"You

"more valuable

dollar" need

government
Widespread
rent

mild

fear

activity

levels

cur¬

to

business

into

sacrificed.

income

much

and

sensitive

—J.

is

tion year,
"Do

tionary action

the legislative chorus of
something for
everybody"

will

is not prompt¬

undoubtedly

more

contra-defla¬

taken,

has

revived

senti-

t

and

m e

n

be

present

the

too,

thesis of Colin

view

that

$20

unless

the

government

billion

deficit of,

a

in

the

1954-55

budget, the current readjustment
will degenerate into a business re¬
action of such

magnitude, and
will

In

un¬

become

serious, that it will cost
than such

so

even more

huge budget deficit.

a

addition

to

growing infla¬
tionary sentiment and proposals,
several actions of the Administra¬
tion

and

such

as

and

policies

the

last

be

of

dollar"

flation.

goal of the Ad¬

which might be satirized

For

more

in these

deflation,

Aircraft Manufacturing Industry—A
M. Horner

for this

reasons

fear

inflation.

of

win

it

must

high

spending cuts,
fiscal '55, begin¬

ning next July, will show
$2.9

deficit

a

billion,

according to the
President's Budget Message. Also,
not

be

overlooked

moderate

a

activity
increase
this
as

on

by

Dr.

Conference

govern¬

from

come

now

corporate

address

Mid-Winter

anticipated

nearly 80% of

revenues

that

slowing up in
could substan¬

business

deficit,

Ahead

Products

19

Great American
Industries

Progress of the Free Nations

—Hon.

Harold

E.

Stassen

21

_•

„

and

personal

Rodgers
of

at

the

the

Illinois

—Philip Woollcott
Reasons for

Confidence—Roger W. Babson

—Lamar

the

in

the

*

G.

Shull

Opposes Raising Gold Price

Herbert A. Leggett Tells How to Write

in

boom,

a

or




*

Dlgby 4-1680

NY 1-3370

!

in High Places!

(Letter to Editor).
Port

Authority

and

Triborough

for Comprehensive

economic

Traffic

Then,

Authority

Announce

Plans

Study of New York-New Jersey Arterial

Problem

We maintain firm
33

_

Mortgage Money to Be Ample, Says Jules Bogen__:
*

t

"Saving

so

trading markets in

35
'

4>

.

Commonsense"

(Boxed)

1

41

225 unlisted

so-called expanding,

stocks and

Labor and Inflation

insistence

on

As We
ever-

Bank

higher wages, featherbedding, and

unproductive practices are
old a story in the constant

inflation

with

to

Canadian

argument, however,
business slows up wage in¬
be necessary

to

pre¬

purchasing power and

From

pre¬

a

is such

attractive

an

—

and

NSTA

dan¬

a

Notes

million

of

our

Continued

page

May..

.

and

•

Chicago
•

TELETYPE N. Y. 1-5
Glens Falls

•

Schenectady

•

Worcester

American-Marietta Corp.

39
37

Collins Radio Co.

46

Offerings

.

I-.

48

You—By Wallace Streete...

!
#

Commonwealth Oil Co.

33
16

Security I Like Best

Washington

1-1826

>

Corner

and

.

Exchange PI., N. Y. 5

•

50

,

C. A. Dunham Co.

2

The State of Trade and Industry

5

You

Rohr Aircraft

52

*No column this week.

39

Stromberg-Carlson Co.
Twice Weekly

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Gardens,

CHRONICLE

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DANA

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(general

& Publisher

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Other Countries, $55.00 per year.

February 18, 1954

Thursday

Eng-

York, N. Y„ under the Act of March 8,1879.

WILLIAM DANA SEIBERT, President

Thursday,

C.,

Company
25,

Publishers

Place, New York 7, N. Y.

HERBERT D. SEIBERT, Editor

E.

Copyright 1954 by William B. Dana
Reentered As

WILLIAM

London,

iand- c/0 Edwards & smith.

and

Reg. U. S. Patent Office

ST., NEW YORK 4, N. Y.

•

5
36

_L

Security

40

Teletype NY 1-1825 & NY

35

J

Report

Salesman's
.

Singer, Bean
& MACKIE, Inc.

38

Governments

Securities

The Market
The

'

43

8

Wilfred

on

Prospective

every

on

Reporter's

Security

million

160

6

Securities Now in Registration

union
member got an increase, which, of
course,
would be impossible as
there would be many firms which
if

even

Reporter

Railroad

*

36

___

Our

the
higher
wages
those higher prices
would go to only a small propor¬
tion of our people! To be specific,
it would directly affect only some
15

8

Exchange"

Public Utility Securities..

But,

population,

Stock

|

Our

needed to pay

.

*

HA 2-0270

Funds

Observations—A.

policy would
be highly inflationary in its first
stage, as the higher wages would
have
to
be
reflected in
higher
Obviously, such

London

on

News About Banks and Bankers

examined.

prices.

*

8

Washington Ahead of the News—Carlisle Bargeron____

Mutual

fallacy, that it will be

—

8

Indications of Current Business Activity

depression from developing

■

37

Securities

Einzig—"Optimism

bonds.

Cover

Stocks

Dealer-Broker Investment Recommendations

The current

will

(Editorial)

Insurance

Coming Events in Investment Field

be

repeated here.
as

See It

and

Business Man's Bookshelf

other

PREFERRED STOCKS

Nashville

10

York 5

Teletype

Regular Features

Labor's

TELEPHONE HAnover 24300

•

Perfect Forecast

Telephone

18

a

Alden A. Potter Discusses Economic Naivete

Members New York Stock Exchange

Manchester, N. H.

15 Broad Street, New
10

in¬

.

Boston

Trading Dept.

*

(Letter to Editor)

Em¬

Spencer Trask & Co.
•

☆

JOHN F. REILLY, Manager

*

☆

Frederick

REctor 2-S570

BROAD

*

Members New York Stock Exchange

Unlisted

adminis¬

the

Sold

BURNHAM AND COMPANY

Currency Convertibility
34

*

25 Park

25

-

32

Fleming, Jr.

Published

specialized in

31

Sales—Stanley C. Hope

U. S. Should Aid, But Not Force

at

—

22

Facts That Spell Out Future

The

For many years we

Bought

Consumer Credit—A Dynamic Force in American
Banking

economy.

1954.

Albany

»

great that it can only be realized

Bankers Association, St. Louis, Mo., Feb.

have

Look

Economic

source

fear

Treasury for revenues, a need

gerous

heroic

budget for

of

Cross Company

18

A Reappraisal of the 1954 Business Outlook—Kenneth D. Ross 20

too, there is the great need of the

vent

On the fiscal side, despite
and

Schapiro

'

pro¬

opportunities.

employment

that

are many

revival of the

A.

when needed to preserve

process

serve

♦An

who

upon

intervention

for

creases

There

1940-1953—Morris

—H.

trative branch of the government

the

inflation!"

Inflation

levies

to

example,

responsibility

Reasons for Fear of More

ment

The

ployment Act of 1946 places direct

summer,

conclude
hailed
"more

economic paradox

an

"The

Copeland Refrigeration

Wage
14

Deposits:

Mfgr.

Federal Electric

billion

the greatest
those

to

tug-of-war

words:

Annual

Slichter

Bank

in

Guaranteed

the

on

—Sumner H.

political innings in the
And so it goes

concern

sacrificed to

tially

but

—

support

expected

is undoubtedly

too

even

Reflections

Bru nner

months.

ministration is in danger of being

taxes

*

The changed role of government

to

many

widely

valuable

more

12

the sharp change in credit

caused

that

authorities,

monetary

debt

have

■

WHitehall 4-6551

1

with still other pressure groups.

economist, more and
are subscribing to the

employment

WALL STREET, NEW YORK

•

seems

one

few

a

Rodgers

coming

deliberately contrives
say,

farmer

several

price

farm

no

may

least

Raymond

Clark, the
distinguished
people

Street!"

Readjustment

a

Woods

9

happy about
it—and keeping the farmer happy
is a political imperative! Labor,

proposals.

more

the

Although

gram,

inflationary

Australian

Than

Wall

99

at

Obsolete Securities Dept.
09

:

7

insistent.

dollars have been poured into the

litter of

Adopting

for

done

what?

given birth to
a new

and

even

replied,

sell those obso-

Politically, something will have to

infla¬

tionary

become

vociferous

6

infla¬

are increasing.
Congressional elec¬

a

VL."

Railroads Shackled by Outmoded Regulation—William White-

pressures

this

-

*

:

1954 Faces No More

Albert

Shifts

tionary

letes

Trust Investments During Transition Period—Marcus Nadler.

<

thus, extremely
changes in business

As

in character if

Cherne

—Leo

<

Lists what-

the political side, the

On

1954—Glenn G. Munn_--__

Telephone:

are,

to

Holmes

can

-

•

conditions.

some¬

serious

more

be

not

'

4

Business in

do to counter deflation.

trend

in

develop

may

thing

the

downward

normal

more

that

can

4

in

External Affairs Will Determine Our Economic Health!
■

v

Republicans in Washington—and concludes* because of new
and underlying strength of our economy, the principle of a

11,

Inflation?—Raymond Rodgers;.

Outlook for Stock Prices

-

dangerous proportions if business should decline sharply.-Sees
Keynesian-New Deal philosophy widely accepted—even by the

-'

*

in for More

Caps Off to Coca-Cola—Ira U. Cobleigh

purchasing po wer as a dangerous fallacy, and
predicts "this mflation-as-a-way-of-life philosophy" will reach

the

MY DEAR WATSON"
Sherlock

*

discusses the fiscal and

.

ly

"ELEMENTARY,

Cover

Savings, Investments and Interest Rates—Roy L. Reierson.-Cover

Colin Clark thesis that
1954-1955

AMD COMPANY

Collapse!

—Hon. Ezra Taft Benson.-

Commenting

licrasTEin

B. S.

'

.

Articles and News

3

vertising Issue) and every Monday (complete statistical Issue — market quotation
records, corporation news, bank clearings,

Bank and Quotation Record — Monthly,
$33.00 per year. (Foreign postage extrk.)

state

the

and

Other

Chicago

city news,

Offices:

3,

111.

135

etc.).
South

(Telephone

La

STate

Salle

St.,

2-0613);

Note—On

account

of

the fluctuations

In

rate of exchange, remittances for foreign subscriptions and advertisements muat

be made in New York fund*

INCORPORATED

39

BROADWAY, NEW YORK 6
WHitehall

3-3960

Teletype NY 1-4040 & 4041

Other Publications

and -ad-

W» V. FRANKEL & CO.

Direct

PLEDGER

&

Wire to

COMPANY INC.,

LOS ANGELES

'

1

The Commercial and Financial Chronicle.,

(772)

4

when

Caps Off to Coca-Cola
Coca-Cola

is

natural for

a

of the

some

thrifty investors,

five

would

"coke"

Outlook foi Stock Prices in 19S4

fol¬

cent

well

for

as

i

switched

thirsty individuals.

cent

five

from

slots.

cent

The

Members, New York Stock Exchange

Mr.

Munn, pointing out stock market prices and corporate
earnings frequently move in contrary directions, holds stock

10

to

station boys

gas

investors have greatest opportunity over next two years in

all
history to profit from the tremendous technological advance in
American industry.
Denies stock prices are inflated, and sees

didn't
used to

There

ex¬

the

by

the

of

events

"The

famous

a

dimmed

rather

pression,

international
15

be

past

this

Secondly, and more
important, carbonated quaffing Is
primarily

pastime
youth pop¬
burgeoning.
In the
custom

a

and

ulation

United States

that

63 millions under 25;

sentence

has

t

c on

acted

r

page

of the young; and our

While

sun

never set on
the
British

Empir e."

years,

report any important slip¬
in bottles sold, even at the
dime price.
And herein lies an
interesting point.
If profits of

factor.

easily

is

have about
and we may

million

cents

by

more

net

time,
might
paraphrase it

today,

with

greater

accu¬

racy, and
that "The
.

say
sun

sets

never

on

Coca- Cola."
In 86 countries

of

Ira U. Cobleigh

the

world,

from Hong

i

Kong to Hejaz to Harrisburg, this
magic name has become

sort of

a

denominator of ecumeni¬

common

cal

sociability,-a; preferred bever¬

age

from Back Bay to the Bay of

Bengal;
and

almost

remained

yet

American

as

pie

apple

baseball,

as

political conventions.

As

sketch'

we

the

prowess,

prestige and profitability of this
unique American enterprise, cer¬
stand

elements

tain

rather

out

sharply. First, there's the absence
of product diversity.
Many cor¬
porations have grown great by
a wide variety of
ucts—General Electric and

offering
eral

Since
hit

Pemberton

formula,

known

in

back

1886,

the

S.

syrup

Coca-Cola,
has
Under the

as

the

sold Coca Cola

John

one

upon

Gen¬

Not so

Motors, for example.

Coca-Cola.

prod¬

company

period!

proprietorship of
Asa G.
Candler of Atlanta, this
product expanded from strictly
and

early

sole

soda-fountain

sales, to bottles, to
and, in due course, in¬

national,

ternational distribution. The

unique

quality and taste appeal
there all along; but certainly

were

much

Cola

the dynamics

of

supplied by

of

Coca-

brilliant,
extensive, and unremitting adver¬
was

tising

a

In the
Coca-Cola

United

program.

States

alone,

is be¬
lieved to spend above $20 million
a

year

varieties

all

on

of

ad¬

on

big department store

a

Main Street will create business

and

sales

stores

block,

so

profits

and

smaller

specialty shops in the
Coca-Cola

the

whole

into

new

drinks"

for

soft

has

carried
business

drink

volume altitudes. "Fizz-

or

carbonated

beverages

they are technically called,'are
riding a king-size up trend. In
1930, per capita imbibing of these
equalled 55 bottles a year—today
it's probably 200. This may seem
a little startling, what with all the
greatly increased consumption of
beer, wines, and "hard likkers"
being racked up during the same
period. On further analysis, how¬
as

ever,

it

First,
more

shorter
leisure)

have

meant

home.

makes

a

work

lot

of

weeks

through the

sense.

(and
years,

more
time spent at
Television has accentuated

at

still

soft

business.

drink

competitor does
about

ness

fourth

a

Not

Coca-Cola.

Its

as

only

Coca-Cola has shown

nearest

doubled

again,
1940-50; and a
projection of current increases

indicates another business

(not

double

bridge term) by 1960.

a

Perhaps a brief outline of com¬
operations might be helpful
get

we

what

the

should
selves

down

factors

to

seeing

here

are

logically ingratiate
investors.

to

The

KO

that

them¬

primary

product is syrup, manufactured in

to

From the com¬

there

too,'

to

now

sole

was

In

.

since

and

then

about

itself)

for

resale

to

1,140 local bottlers and

(2)
almost 2,000 jobbers who resell it
to

the

fountain

trade.

The

business is by far the more

tant,

equalling

domestic sales.

Further,

porate technique, it's

bottle

impor¬
of

75%

over

a

as a

cor¬

beautiful

arrangement, as independent
bottlers buy all the bottles, the

delivery

trucks,

the

plants,

etc.,

leayihg Coca-Cola the clean clear
profit

the sale

on

of syrup;

neither the headaches that,

and

some¬

times go with local retail distrib¬

ution,

the multimillion dollar
and investment required

nor

bottling and delivery facilities.

Something
now

20%

of

gross

foreign

over

from

comes

sales

and this section is

actually grow¬
ing faster than the domestic
trade. Assuming continued peace,
and
rising
economic
stability
abroad, the projection of CocaCola's foreign business is bright
indeed. Syrup is not sold abroad
—instead
ered

to

sugar

is

deliv¬

be added

at

destination.
A

word

retail

should

prices.

torically, the

that

be

said

Basically
company

been to aim at
could

a

maximize

low

about

his¬
policy has
and

price which

retail

sales.

end, it has consistently

horted

bottlers

to

maintain

To
ex¬

been

has

it

to

until

about

possible but profitable for
public to share the
proprietorship. The enterprise has
paid dividends in each year from
the

general

the

Today

now

there

York

New

4,260,000

listed

are

Stock

shares of

LOCAL STOCKS

Exchange

KO

common,

yield,

a

the

on

balance

sheet

is

a

bilities by approximately four to
one. The nature of the Coca-Cola

business, and its financial strength
do

not

suggest the need for

sort of

year

not

reject

for

is a
does

once,

parently
aside

that

company

need

not

millions

annually

neer
in new fields,
peripheral products.

or

that

tool

set

to

pio¬

dabble in

has

been

continuous,

tendency
stagnate
decade

apparently
for

the

(as

been

doubling

no

to
the

company

evidenced
of

by

sales),

and

direction of financial policy leaves
little to be desired.

For the

not

appear

For

tween

does

the

at

and

'ivity, the pol¬
itical climate
in
,v

which

times

operates, £ispolicy,

cal

which

technical

mist

Munn

tions

limit his field, and deal
wholly with business and

can

financial data.

The stock

market

we've

f^pbinsdn-Humphrey Company,Inc.

discussed—

population

growth, foreign busi¬
better retail price. Further

ness,

favorable

elements

duced

sugar

ment

in

income.
sales

might be

the
For

carrydown

1952, net

has

stock

amazingly

an

DISTANCE 421

continuous

sort of dol¬

Such institu¬

the highest-grade

as eminently satisfactory,
transcyclically, for their longterm appreciation characteristics,

and

their

for

free

to

business,

technical.

financial,

Many

stock

and

current

(and

them) income.,
proportion of the new

market

tax-

A

large

products

forecasts go wrong because of ex¬

from

clusive

coveries of the past 15 years will

preoccupation with

busi¬

trends. Rarely are these three

ness

backgrounds
Oftentimes,

one

in

trends

are

the

market,
nical

or

c

t—their

In the stock

financial

backgrounds

ignored.

f 1 i

c o n

divergent.

are

these

in phase.
two of these

and

tech¬

cannot

be

great fundamental

from

emerge

working

factors

the

I doubt

3.

trial

the

actually

laboratories

stock

been,

that the Dow indus¬

surpasses sig¬
nificantly the highs made Jan. 5,
1953 in the first quarter of 1954.
Rather, I expect a short-term de¬

Particularly, at turning

cline of

3%-7V2%, but not lower

points, either the financial situa¬

than to 268 in the Dow Industrials

running into March

or

ily

technical,

carry

business

both,

or

weight

more

can eas¬

than

the

situation.

Moreover,

of

record

over
the past fifteen
will disclose that the stock

years

price and
trend

business
in

moved

than 25%

it

unison

not

is that the

movements

stock market

has

tion of

being illogical,
downright ornery.

the

at

era

reputa¬

for

some

or

in

the

April.

the

time

in

post-war

the

second

or

June.

'

5.

It is possible that the earlier

part of
more

1955

could

be

slightly
than

a

difficult business

year

1954, but it is difficult to visualize
annual FRB production index

an

lower than 122.
6.

perverse, or

More

employed

previous

in

year

will

salesmen

new

than

1954

in

our

in

history.

abilities

rather

than

as

as

prob¬

are

been

Actually,
divergent,
movements
recog¬

so

five

are

interweaving

mixed.
or

six

cushion.

Seventh

Forum,

by

Farmers

Mr. Munn
&

before

Merchants

Long Beach, Cal., Jan.

28,

in

This

is

most

Western

first

basic

Eisenhower

The

the

Ad¬

ministration,
however,
has
changed the order of emphasis. It
has
freed
the
market
of
price
controls,
its

head

tion.
address

adopted

countries.

given

initiative
competition to

private

allowing

perform the great task of regula¬

nizable in the current market.
•An

:

(1) Keynesian doctrines have

oracular

absolutes, are:

there

Supporting Arguments

the

Bank

1954.

Thus, together with the res¬
of the classic incentives,

toration

it has restored the full classic base

Bound Volumes of the Chronicle for Sale
(Covering from 1929 to 1951 period)

divi¬

If you just sit down

sales

beginning

$215 million for 1950, and pro¬
it

through

1953, you'll get

$12

mon.

off

to

Coke's
or

curve

$375
per

a

1951,

and

line which could

million

by

1960,

share figure for

There'll

be

a

Coca-Cola
a

1952

lot

of

At

an

hunt
own

attractive price in N. Y.

up

quotation records is

a

C.

Waiting for someone to

costly pastime!

set available for immediate use.

—

Have your

Avoid delays, they're

costly!

and
com¬

Write: Edwin L. Beck, c/o

Commercial & Financial Chronicle,

caps

meanwhile.

natural, for refreshment

investment.

be
any

I

a

In¬

Dow

whole

Perhaps also in the rails.

more

of the time; in contrary

in its short-run and intermediateterm

highs

quarter, probably in May

(or earnings)

direction, about 75% of the time.
Hence

New

dustrials

examination

an

4.

in
and

It earned

its

of

average

11% of

durable

increased

dis¬

concerns.

throughout the depression,

dend in 1932.

a

1, GEORGIA

a

against 20% in 1946.

money
and

net

of

was

on

equities

fields:

re¬

prices, and improve¬

Coca-Cola

reach

ATLANTA

number

a

regard

forecaster must sift at least three

position

factors

almost

lar-averaging plan.
Glenn G.

econo-

almost

furnish

buying support,

situation.
The

very

types of investment organi¬
such as pension funds,
foundations,- and^ Mutual Funds

and

affairs,

which

15 to 30

will decline

zations,

credit, foreign
the

earnings

newer

and

money

telligently about "The Market," or
even
about "Groups,"
because
their behaviour and present price

the

However, I do not believe

much, even though, technically,
they are the
most
vulnerable.
They are made to order for the

it

125; but 1953 was
the largest year in company his¬
tory. 1953 net of around $7 could
of

economy.

are un¬
than over¬

these highest-grade stocks,

(1) It is impossible to talk in¬

107

the

rather

sell at multiples of from

it ranged be¬

1953

of

longer-term, they

valued.

.act-.

.

ma¬

Conclusions

common

priced

over

120 level.

the

averages,

sector

der-valued

My conclusions, stated
KO

stock

deflated

business

Stock Not Overpriced

^Marketwise

familiar

jority of stocks represent the most

Com pie x of

ap¬

to

with three past Presidents now on
the board. As pointed out
earlier,
has

Except for the "social-regissues,
i.e., the "pension
club" equities which dominate the

as-

lp mak¬
ing decisions

the

Management here
stable, efficient and

there

(2)

ister"

1

phenomena,

any

sists

likelihood

no

tion

in the foreseeable future. Here,

or

ject

vi'vi-

LONG

any

financing, either this

and draw

■




$5

current

dividend, of 4.2%. This common
is
the
sole
capitalization.
The

at

WALNUT 0316

on

selling at about 120, afford¬

ing

mid-1953,

CORPORATE BONDS

RHODES-HAVERTY BLDG.

not

only

the

traditional five cents price level.
This policy has been pretty well
adhered

will

market

easily be expanded by

concentrate

a

with

STATE AND MUNICIPAL BONDS

The

Mr.

tidy $25 million

a

dependable investment.

4

of

however,

year,

singularly un¬
10 U.
S. plants, and a number cluttered document,
revealing an
abroad. In the U. S. it then is sold elegant financial position involv¬
to two major buyers, (1) the six ing some $120 million in current
big bottling companies (owned by assets, which exceed current lia¬

Coca-Cola

stock

for

reasons

collapse.

•

•*.:

more

some

preserve

that

he sold nut for

truth,

•

has

no

now,

turn

Candler.

1893.

pany

before

Let's

amazing

capacity to double its sales. -Sales
doubled in the
1930-40 decade;

Cites

My approach to the stock mar¬
is multirsided.
As a student

of

cur¬

Chips" do not always offer

market

severe

ket

warranted

specific investor items. Until 1919

large as
that, but

an

Peo¬

Continuous Dividends Since 189J

total gross busi-?

a

figure.

mostly ttr E.P.T. anyway.

gone

of the total

50%

does

up

of

move

particular
urgency to lift retail prices as to
buy or sell.
the higher net profit,: which might
..This co vers.
have been gleaned, i would have
.' the
whole

repeated efforts to. create an
equivalent product, Coca-Cola, I

say,

best opportunities for gain.

and

viewpoint,

been,

stock market, and the "Blue

rent

buying "Coke"

reasonable

a

slowly

cent

pany

number of companies,

a

10

advance in price.

and

for
as

specific,

tion from

the

sales

ple will not "stop

this soft drink
market
is
a
vast
and
growing
one, especially in the pre-martini
set; and the astounding fact, for
our
purposes, is that Coca-Cola,
despite most energetic competi¬

outlay

vertising.
Much

be

To

retail

as

Contends there

responsible for

limit, think, for a moment,
opportunity for increased

toward

50% of Soft Drink Business

of

you

"cushions" against extreme downward swings.
are a number of
interweaving movements

held rather

been

the

of

1960.

with the pass¬
age

have

rigidly in check, especially during
the past two years, by the five

we now

10

have

Coca-Cola

By GLENN G. MUNN*

Consulting Economist, Paine, Webber, Jackson & Curtis

touring Cape Cod last summer,
running across some gas station
coin
dispensers which had just

why

reasons

as

cent

subway ride
and the five cent phone call into
the limbo of history. I remember,

"Winning in Wall Street"

A somewhat effervescent account of

began to look as though

the

low

By IRA U. COBLEIGH
Author of

it

five

the

Thursday, February 18, 1954

25 Park

Place, New York 7, N. Y.

REctor 2-9570

I

Volume 179

Number 5300

The Commercial and Financial Chronicle

...

(773)
of economics

as

a

starting'point.

However, Government

is commit¬

ted, at minimum, to the recogni¬
tion of two principles: (a)
Cheap
Money, (b) Full Employment.

The

If necessary, it will intervene in
the economic process with
sup¬

State of Trade

porting
the

to

measures

these goals.
end

But at

of

the

Retail Trade

Commodity Price Index
Auto Production

and Industry

been

By A. WILFRED MAY

Food Price Index

V

time since

has'it

war

Observations...

Electric Output

Carloadings

implement

no

Steel Production

Business Failures

necessary up to now to intervene
with more than

What's New in

J

monetary and fis¬

situation, President Truman

Full

This tends to add to

because

pressures

change of- significance
production in the period ended

wage

inflationary

durable manufactures.

higher

communicated

wages
costs and

to

costs, business is under

depressions are against the law of
the land. But that is the meaning
ment Act of 1946.

his "

said;,

are

that 'to

prevent a depression in the United
States takes priority over every- *

thing

else, only

Peace.

W

except

o

rid"

Thfe Council Of-Economic

Advisers,

with

the

plans ' of

its

This incident, epitomizing the basic schism

.

problems, highlights the. basic difficulty ob¬

proaches

point lower than in December and eight points
below January, 1953; and 14
pointy under the peak rate reached
last' March.. Auto assemblies in the first-two weeks of February
fell "about 5%?' below the January average; the board declared,.
While steel'operations held arodnd the January level.
;
/ ; i Steel producers can thank their lucky starts that scrap prices
are not a reliable barometer of future steel business, for scrap
prices tire in the midst of a lohg sinking spell from* which there
is still no sign of recovery, states "The Iron- Age," national metalvworking weekly, this week:, .:
■■-?! r
;v
"
•
"
The scrap industry has been undergoing a severe and painful
-readjustment since the middle- of-last year. This correction in
supply and- prices threatens the very life of some firms remote
from consuming mills that had been supplying scrap during the

advance, aims to implement theEmployment Act and this convic¬
tion, by intervention at decisive
points, if necessary.
'.

-

Behind
basic

these

views

propositions.
contest

three

are

•

is largely

a

competi¬

tion between the efficiency, and \
•ultimate survival, by magnetizing

This

tralism, of the two opposing
systems.
(2) The American people must
never again suffer the human and

*

Depression
thirties.
(3) The rest of the Free World

journal.

of the early

upon

an

extent

would

trade

with
any

us, to
slump

serious

reper¬

that

have

cussions abroad.

However,
lieve

in

few people be¬
efficacy of Govern¬

very

the

ment intervention.

That is shown

by the behavior of the stock

mar¬

ket for ten years, especially in re¬
cent

and by the headlines
the sanctums of

years,

emanating from
the great,

imposing symposiums of
professional economists. It is con¬
economic

to

trary

memories of

The

history.

1919-1921, 1929-1932,

and 1937-1938 are too vivid in the

minds of most people now living
to accept

the thesis of successful
intervention

Government

value,

though

even

occasions

no

on

attempt

at

face

the earlier
made by

was

Government to interfere with

Continued

To

on

44

page

Make Money—

Buy Undervalued Stocks

than

Yeu buv, another sells.

Who is

My 32-page REPORT TO
INVESTORS gives tested method

on

how

determine when

to

is undervalued

or

a

stock

overpriced. Based

24

years' experience, docu¬
by proof. Investors say:
(Boston)
"Excellent, helpful to

on

mented

make decisions(N. Y.)
add to my

This

make wise

success"
Report may
valuable in helping you
buy or sell decisions.

Price $2.
return

in 10

Worth mueh

more

or

days for refund. Air

mail $2 to:

Frank Charles Petrine
3084 S. W. 27th Ave.r Miami 33, Fla.




Age"

•

was in the first half of 1949 when prices fell more
This was followed by a steel inventory correction in

months.

summer

A month

their customers, concludes "The Iron Age."
In the automobile industry new car dealer stocks
a
new all-time record on
Jan. 31, "Ward's Automotive
stated

Friday of last week.

on

the issue.

Chairman ©urns'
however well-intentioned.
True it is that, the former practice of periodically publishing two
complete reports- each - embodying -philosophy and policy • pro¬
nouncements, one from the Council to the President and the other
from the Chief Executive to the Congress, has this year been
.

single report from the President on
a relatively unimportant addendum
"housekeeping statement" by the Council. While this
encouraging, some signs of back-tracking are already

constructively replaced by
of

own
a

has

a

responsibility* with

mere

been

emerging.

.

"

The

?

*.

'

composite suffered it's sharpest

present Chairman's

willingness to testify ■ oh
combined with the involuntary conference of colorful
newspaper; publicity on the august body's doings; raises worry
about the rebirth of the previous analogous situation; Refuge in
off-the-record responses to needling Congressmen certainly pro¬
vides no constructive solution.
indicated

the Hilt;

What

will

economic

happen

official

is

when

and

if

called

on

to

the

make

Nation's number-one
public pronouncement

a

regarding some politically popular but economically indefensible
policy—perhaps involving subsidy in any of its various forms
(who knows, even butter)? There will be situations where he
must either prostitute his integrity as an objective expert, or else
end his usefulness as the useful servant of a

Administration.

politically-conscious

To

this,writer, the only proper practical solution
lies in lus preservation of real anonymity in the guise of expert
adviser to the Chief Executive, with the latter openly functioning
as

the political official.
The Fair Deal Stays On

Incidentally, in its economic philosophy the present Repub¬
lican Administration's "Brain Trust" seems to
lute minimum of

represent

Specifically, not only

ment
,—

in

bond
lieu

market
of

its

with

earlier

does the

Council

the

condone the

said

[ ?

]

—but feels that

Again, in the area of taxaContinued

on

Reports"

1

We

which preceded the stock
buildup will hold February car production 6% below last month's.
But it is doubtful if sales will be sufficient to match incoming
shipments and bring any appreciable change in dealer stocks
the

end

January
seasonal

of

output

cutbacks

March.

new car

'

announce

the election

of

FRED W. FAIRMAN,

JR.

dealer deliveries approximated 355,000 units,

factors

holding volume under December's 365,000 and
January a year ago. However, January-March car
output is still expected to rank as third best in history.

the 420,300 of

as^Chairmanof the Board

replace

to

Ward's counted

107,578 car and 21,346 truck completions a
week ago, compared to 108,382 and 19,846 the previous work
period. Volume the past week was 6% behind a year ago, when
114,935 cars and 22,490 trucks were assembled.
Most truck builders were at a higher pitch last week.
But
principal factors in the week's sharp upturn were International,

Chevrolet, Dodge, Mack,
increases
a

were

largest.

Studebaker1 and Willys, where truck
Federal returned to activity, following

William h. sills
who has
\

resigned

Sills, Evirman

&

Harris

■NCOS i'UKATKB

week's inventory, this agency reported.
General Motors Corp. made the largest

gain in passenger car
volume, while Chrysler Corp., Ford Motor Co. and combined
Independent tallies dipped from levels of,a week earlier. Only
Ford Division reported any six-day scheduling, with three plants
to turn out cars and truck on Saturay last. DeSoto, Dodge and

Continued

on

page

42

recent

accompanying inflation-engineering

"demoralization"

further easing may well be in order.

30-day inventory is considered normal, it added.
"Ward's"

abso¬

re-easing of credit requirements and the re-rigging of the Govern¬

The count, 18% over Dec. 31, and 12% over the previous
peak established last Oct. 31, was equivalent to a 52-days' supply.
A

an

change from that of its predecessor.

ec|ged to

.

Should

non-technical

prove very

Iron

That

half.

before

right?

"The

early No¬

' 7-.

long strike during October of 1949
restored steel demand to its previous heights. Will history repeat?
An easing steel market seems to have weakened the union's
bargaining position, since mills no longer feel the desperate
urgency that customers used to exert to keep steel production
going at top speed. At the same time, the threat of unemploy¬
ment has obviously intensified the union drive for security, de¬
clares this trade authority.
The security motive dominates the list of objectives that
are shaping up as United Steel worker strategy for
1954. These
objectives include higher pensions; moij-e social insurance; guar¬
anteed annual wage, and a wage increase.
Steel companies will certainly be in a stronger position to
resist big union demands, now that they no longer feel the hot
breath of customers on their necks. Also, there will likely be an
increase in plant-wide vacations—both by steel companies and
the

BULLS vs. BEARS CONTEST
-

week

over

indicated willingness to compromise;

his

and

.

exploitation of expertism

visaged by this writer through conscientious

-

in October

comeback

\

Wilfred Mar

The .possibility joI imminent re-emergence of this conflict
between political, expediency and economic objectivity now is en¬

nearly $20 a ton since it hit it's 1953 high last July.
Only once before since World War II have scrap prices suf¬
fered a shakeout comparable to the present one, states this trade

occurred in the Great

here

month-long

Exploitation Via Publicity

with the Administration

in several weeks, sinking another $1.34 a ton to $25.33 a
gross ton.
This marks the seventh consecutive week of decline,
the twelfth in the past 13 weeks.
Overall this price has fallen

and machines that

such

a

a.

political ends—the camouflaging of the political protagonist
through the publicity at¬
tending ; the activities of Dr. Nourse's successor, after his- break

drop

material waste of needless idleness

depends

.

economic

for

Yet many steel companies- are still doing pretty well while
the steel industry operations Average about 75% of capacity, it

except for
vember. '■

others off their fence-sitting neu¬

of men, money,

.

-

iii economises clothingT-was furthered

Scrap prices started tumbling soon after "The Iron Age" steel'
scrap composite price hit it's 1953 high of $44.92 per gross ton
last July 28. Since then they have declined rather steadily—

"Free World" and the "Totalitar¬
ian World"

;

current

•

;

continues.

the

between

.

nation's

In the Truman Administration the

.

/

(1) The

period.

emergency

the

environment of "realistic" politics.

an

was one

.

to

structing the functioning of the expert midst

-

several task forces worked out in "

fjj

between the professional and the political ap¬

This

preamble to the Employ¬

chief economic advisers
to share the conviction

politically useful.)

January, about a million more than a year earlier.
A report from the Federal Reserve Board states this week
that industrial output in January declined for the third straight
month. Its unadjusted index, which measures butput of the na¬
tion's mines and factories, dipped to 124% of the 1947-49 average.

startling, and to class¬

and

(The

signifying something

course,

in

:

President: Eisenhower

"something," of

States Department of Labor stated. The drop was the fourth in
a row from a peak of 468,878 in the weEk ended Jan. 9*
Unem¬
ployment compensation was being paid to 2,100,000 persons late

ical Economists foolish, to say that

the

"You may
Charlie's probably got something there."

ended

a
two-fold
stimulation to business is continu¬

of

moments, the President,
with the emergence of
skepticism, interrupted with:
he right as an economist; but I think

ivory-towered

last year.
New claims for jobless pay declined to 364,000 in the week
Feb. 6, off 13,500 from'the preceding week, the United

con¬

emphasis
machinery.
Thus,

It sounds

over for some
bored and impatient

/

'

by the Plan's author.
After Dr.
given the scheme his objective

had

going

1 ago,
as opposed to 3%

heavily to
and equipment,
on
labor-saving

ously effectuated.

exposition
Nourse

Unemployment, it was reported, held markedly above a year
but, it was pointed out, constituted only 5% of the labor force

stant pressure to spend

with

was

*

To counteract the higher

modernize plant

one day summoned the Chairman of
his Council of Economic Advisers to his office to "audition" an

evident in total industrial
on Wednesday of last week from
that of the preceding Week. Compared with the similar period
"one year ago output was ,off approximately 7%.
In the week
under review, it was noted that a rise in output of non-durable
<goods Was offset by a corresponding decline in production of
No

employment politically
means over-employment econom¬
ically, i.e., labor is able to force
wage increases because ©f its short
supply and monopoly position.

prices.

Washington?

Back in the Fair Deal days when
Secretary Brannan had it
all figured out how to make all the voters
happy with the farm

cal action.

are

5

209 South La Salle Street

Chicago 4, Illinois

-

,

page

51

6

The Commercial and Financial Chronicle

(774)

.

.

Thursday, February 18, 1954

.

the Soviet Union has no intention

External Affairs Will Determine

of

aggressive action; that the risk
atomic war upon the United

of

Our Economic Health!

val
I

negotiation is in prospect.
afraid that this concept won't

am

much

wake

Institute of America

by trade with the West, and
that in place of a Korea we will
Italy

or

in embassies throughout the world
are

leading

trade

increased

sharply

to

betweenj)ur allies and the
bloc.

Soviet
The

rate

Soviet

of

eco-

nomic

and

in Italy where

they

are

not

only the single largest party,

but

by 1955 may even be able to

paralyze orderly government.
No prospect for victory can be
reasonably
expected
in
Indo¬
china.

is

Korea

with

mess

a

no

military

likelihood of settlement and with

buildup is in¬

no

creasing

drawal.

and

years

the

Kremlin

may

have achieved

parity in

near

industrial

but¬

strength

increased

And

Austria

that

forget

trade..

never

the

is

one

itself.

on

German

Western

economic

strength has increased enormous¬

military

ly, but

The

forces.

Soviets have weathered the death
of Stalin with hardly a
Research

Institute

which

minority

was

ripple. The
among the
indi¬
probable.

ago

years

cated that this would be

Some economists have tended to

examine
1954

our

economic outlook for

solely in

business

through

a

domestic

terms of

activity.
We're
brief period of

gerated preoccupation with inter¬
nal

affairs.

The key fact, how¬
is that the Soviet Union and

countries

its

and

competition for the markets of an
already shaky Britain.
has been taken off
of
occupation
and

the

Japan
hook

relentlessly

moves

with

Red

the only

toward

which

China

it

now

trade
as

sees

possible door to economic

survival.

and military

Berlin

part of the economic
backdrop behind the
This

Conference.

which

environment

is

The possibility of war

Soviet in
but

the

peace

will

possibility

is

even more

not

with the
small;
genuine

1954 is extremely

bring

of

a

remote. Berlin

together

irreconcilable worlds. If

the two
anything,

it is likely to hasten Western dis¬

union and Russian strength.
We have long been concerned
with French instability, the ever-

will

shape

that

in

is

first

the

called

ever

awakened

suddenly

fore

the

address

to

see

by

Mr.

Cherne

be¬

New; York Credit and Financial

Management Association Annual Banquet,
New York City, Feb. 16, 1954.

will

time

they

experience

a

the

spad

a

I'm

The

in

1954

U.

S.

new

assumption.

that

is

there

be

to

ings. We are, in my judgment, not
the

at

we're

the

atomic

and

is

depression.

chance

one

may

In

perhaps

chance out of ten that

one

era;

vast

a

revolution.

there

transition

this

But

occurs

we

that

even

only

because

uncertainty.
Eisenhower

President

that

said

rectly
tion.

we're

we're

But

not

in

has

in

cor¬

transi¬

transition

the

based

on

a

been

a

great

of the News

By CARLISLE BARGERON

in that
associated, a political
party out of power is making an issue over the abuse allegedly
being heaped upon it by the party in power. And it seems to be
history, at least for the first time

For the first time in

part of the history with which I have been

making

successful issue out of it, too.

a

The

Republicans, simply must quit talking about
the Democrats, vthe latter say, or they—the
Republicans—will forfeit their right to gov¬
ern.
And on the northeastern seaboard we
editors

hear

of

many

sort of mood must be

some

try,

refrain;

the

chorusing

purportedly Republican editors. I think
gripping the coun¬

them

the northeastern seaboard, akin
flapperism of the 20's. Just plain

at least

to that of the

craziness, in short.
There is a purposeful propaganda behind
it, but the effectiveness of it may be gauged
by the number of Republican editors lending
themselves to it.

Why
oublican

this country should be
time at what the Reare saying after having

in

anyone

shocked in

this day and

politicians

is

uery

more

Dealers

set

respected

Bargeron

than I can understand. Roosevelt and his New
deliberately to destroy the most influential and

out

citizenry. Princes Of Privilege, Eco¬
Changers! It is doubtful if so many politi¬
before been hurled or coined.

segments of

our

nomic Royalists, Money
cal

Carlisle

of Roosevelt and Truman demagog-

been saturated with 20 years

epithets have

ever

I was not living during the Civil War, of course, but I doubt
seriously if there was more bitterness among Americans in those
days than that which Roosevelt and his gang engendered. It was
a class bitterness and I am convinced it will last longer than the

sectional

feeling caused by the Civil War. There was none of the
chivalry about it that went with the war. It was something that
permanently scarred men's souls.
What the Republicans are saying now won't stand a candle¬
light.
I

will

be paralyzed by our own

not

am

criticizing the resourcefulness of the Democrats, or
that passes under the Democratic

multi-hued conglomeration

the

I am simply expressing amazement that their stuff is
being accepted in intelligent circles, that so many informed people
in places of influence are subscribing to it and looking down their
noses at the Republicans.
The Republicans—they are damned if
they do and damned if they don't. Only a few months ago they
were
being criticized for lack of aggressiveness. Now they are
banner.

criticized for too much aggressiveness.
;
to a peace
At the Presidential press conferences when there are so many
economy.
We are, in my judg- '•
important things which the reporters could ask the President
ment, in transition from one crisis
about, the top story more often concerns his displeasure over the
to another, from the open threat
tactics the Republicans are pursuing. He has walked into the trap
from

of

an

arms

to

war

continuous

a

war,

The

sion.
us

of

economy

world

rapidly.

sees

hidden

too
we

is

conquest

shrinking

by
on

Each day more clearly

two giants

in

from

stand out. The dis¬

their

size

is

being

re¬

rapidly for comfort be¬
are

one

of these giants,

and the

ing

other, the one that's grow¬
faster,
is the Soviet bear.

Never

before has American

ener¬

production
and
industrial
imagination faced as vital a chal¬
lenge.

of

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

cunning questioner.

a

rebuked

both

his

Recently he
General

Attorney

Whether he intended to do this I

and

sure

am

represented as having
his Press Secretary.

was

I do not know.

But he

has

certainly had enough experience by now to know how his
answers to certain questions are going to be interpreted.
That

his

disheartening to those who are
campaigns this year goes
without saying. The candidates and the managers of these cam¬
paigns unfortunately are not generals who led our armies so
superbly to victory on the blood-soaked battlefields of Europe;
they are not popular heroes. They have got to run in the field,
attitude

lofty

is

charged with winning the Congressional

less heroic, of practical

gy,

an

The

economic

an

beginning of

technological, chemical, syn¬

new

thetic

we

of

end
at

cause

months

strategic change in the world; that

This announcement is not

one

alone—prying loose even
a portion of the billions of dollars
held by American families in sav¬

aggression to conquest by subver¬

This assumption

has

in

direction

But

foreign and military policy
continue

confronts

found

be

can

modest

every

spad.

S. Policy

few

to

answer

economic problem which

parity

next

business

threat

turns out to be a

New U.

if this repre¬
difficulty,

yet,

seen

duced

the

a

has

teaspoon.

For

of

the basis of anything

Soviet

may

the spade only

will
an

we

be surprised to find
that the spad is a "loshka," that

even

,

•From

1954

"spad," the Russian term for a
modest decline.
Incidentally, this
a

Cadil¬

tempted to say, that
we're lost the capacity to compete, >
the will to grow, the confidence to.
function, or the fiber to survive.

American

present strength of the Communist
Party in that country.
Now we
have

then

the

policy and will keep us
events outside the United States in an arms-supported economy for
will continue to be the strongest years to come.
Even the Soviet
influences on our own economic Union has stopped predicting an
health.
"
:
->
American
depression.
They say

ever,

a

order instead

an

on

acute

suffer

This is just

going
exag¬

Curtain

Iron

But

have

us

has its trade with the

so

get

you can now

put in

you

country of Europe that can least
live

declining,

been

lac within five months of the time

we

tressing
her
already larger
Leo M. Cherne

that

up,

sents

and

has

inventories have backed

some

slight¬

the West, lured by the
promise of a Soviet peace treaty

ex-,

ever

recession

a

employment
that

year.

ly- from

has

nation

in which
wages are still rising and prices
are not declining.
I recognize that
perienced,

Austria has been turning

within ten

we're

front,

the most curious recession

industrial

an

with¬

of

domestic

the
in

Chinese

possibility

and

by internal decay

Communist inroads.
On

strength

a

weakened

their

increase

the danger of an
France even further

face

suddenly

now

Communists

the

Ahead

We'll
the

and

recession.
Behind-the-scenes conversations

find

to

talk, the Soviet strengthened by
its
enormous
industrial buildup

dismal picture of the international
our allies,
and experiencing a rapid rate of economic and military build¬
up. Says this environment will keep us in an arms-supported
economy for years to come.
Points out "curious" domestic
situation in which wages are rising and prices are firm in a
Soviet bloc increasing its trade with

sees

1954.

beyond

suddenly

up

-

Western allies weakened by peace

Mr. Cherne, in painting a

situation,

Washington

of

last

By LEO CHERNE*
Executive Director, Research

From

negligible; that an inter¬

States is

Make
of

those

mistake

no

who

politics.
it, nothing to

about

extreme

can

be said

this country during the period 1933-53.
They deserve no sympathy. And they are showing, it seems to
me, that they don't need any.
Oh, don't you think the term "traitor" is going too strong?
There were traitors among them and entirely too much com¬
placency towards traitors on the part of those who were by no
governed

traitors

means

The

themselves.

attitude

of

the

New

Dealers

seemed to be and
you

$5,000,000

Essex

County Electric Company

First Mortgage Bonds, Series A 3H%, due 1984
Dated

February 1, 1954

Due

February 1, 1984

probably is still, to live and let live, so long as
are a member of the club.
Now, it is a fact that throughout the tragic years which this

country has been through there was a group of Democrats that
deserve as much credit for checking the excesses of the New
Dealers as the Republicans, if not more.
They were wholly out
of sympathy with. Roosevelt and Truman.
They said so and they
were made to suffer for their opposition.
But

coalition with the Taft Republicans, in fact,
sible for
which

Price

they aren't the ones whom the Republicans are talking

about, they aren't the ones whom the Republicans are even cam¬
paigning against.
They are, generally speaking, the Southern
Democrats—men like Walter George and Harry Byrd. It was their
us

pos¬

Founding Fathers wrought.

our

100.959%
and accrued interest

R. J. Henderson With

William Sills Forms

Own Firm in Chicago

Neary, Purcell & Go.
(Special

Copies of the Prospectus

may

The

Financial

Chronicle)

CHICAGO,

ANGELES, Calif.—Robert
Henderson has become associ¬

ated
210*

bers

HALSEY, STUART & CO. INC

to

LOS

be obtained from the undersigned.
J.

with
West

of

Neary,
Seventh

the

Los

Purcell &

Co.,

Street,

mem¬

Angeles

Stock

of

Sills

&

111.—The

Company to

formation*

negotiate

the purchase

and sale of business
properties has been announced
by Willian H. Sills, President. Mr,
Sills has resigned from Sills, Fairman

&

Harris,

Inc.

Exchange. Mr. Henderson was pre¬
viously
&

Co.

with
and

Francis

Daniel

I.

du Pont

Reeves

&

Co.

February 18,1954




that has made it

the broad outlines of the government

to still discern

and

prior thereto

was

an

officer

of Edward J. Bourbeau & Co.

*With

Dempsey-Tegeler

ALTON, 111.—William A. Abbett
has

joined the staff of Dempsey-

Tegeler & Co.

Volume 179

Number 5300

...

The Commercial and Financial Chronicle

(775)

20 jrears of age, is decreasing. The
.results of recent government sur¬

Business in 1954 Faces No
More than

show that by 1975 the

veys

centage
will

Readjustment

a

of

56%

be

and 24%

these

than

into the future of this atomic
age.
With a rapidly

per¬

expanding popu¬
lation, far-sighted research, ample
resources
and
a
fine
spiritual
heritage
upon
which
to
build,

people

younger

more

edge helps him to probe further

in

1940,

than today.

more

By J. ALBERT WOODS*

there

President, Commercial Solvents Corp.

Head of large chemical

concern

Our

And

holds there is

ground for

no

fear of serious recession, and business in 1954

cap

ward to

a

nothing

than

more

a

readjustment to

1953

ber.

Stresses

will

In

duced

those

the

product
billion

a

year

to

remem¬

months

12

largest

in

nation:

of

be

importance of

the

we

total

pro¬

national

history

of

any

lion

tions

to

than

more

a

set

new

brought

of Korean

and

has

been

justment

has

said

that

been

this

long

slightly
and

at

time

high:

Farmers

took

in

billion.
than

more

will be
that

on

$32

approached
It

prosperous

the

tional

healthy,
during
which
ended, our na¬

year,

Korean

War

defenses

billion

$20

was

a

materially

were

strengthened, the government
roll

pay

reduced, and the promise

was

of tax reductions took

on

aspects of

reality.
But

that

concerned

are

with

now

We

a

conduct

business

our

lives

in

That

quite

conditions

good

as

view

They

product
the

of

to

our econ¬

some

national

expect
trade

that

increase

be of

to

pri¬

importance at this time

are

Whenever'men believe that the
prospects for good fortune are on

there will always be
who
predict
dire
things.
by the same token, there

wane,

some

And,
will

to
the
to

always be

read

the

few who refuse

a

caution

signs

along

financial

highway, preferring
hope wishfully that when the

financial

ending

peaks

are

plateaus

reached,

will

come

these

are

the

un¬

I have sufficient faith in
the total American business com¬

munity to believe that 1954 will
be judged for what it is: another
prosperous,

progressive

period of high productivity
further
and

benefit
still

a

national

for

most

higher

standard

with

people

level

of

in

our

living.

V* What we must guard against is
coming to conclusions about any
seeming
which

declines

are

in

factual.

than

s

Rampart
trend

business

emotional

more

fear

of

a

downward

be just as serious as if
it actually occurred, if not more so.

•An

Outlook

American

address

Rotary
Club,
16, 1954.

The

grew.

several
the

service to

a

any

us

one

competition. I
agree with me that
is the challenge of

you

competition

American business. The
have

answered

since
the

that

nation

our

was

who have

ones

challenge

founded

brought

perity to the American
We

have

every

who

men

are

pros¬

economy.

to

reason

face

the future with confidence. There
two

are

all-important

continued

forces

Stone

hundred

Bronze

short

only

though
ment

for

Iron

Age

steel

was

commercial

95

the

were

years

quanti¬
is

It

ago.

stairway

years;

relatively

a

and

years

in

lasted

The

years.

2,500

first made
ties

Age

4,000

took

Age

thousand

as

of advance¬

for

growth of business

can

and

nothing
than

endure,

must

The

prosper.

further

the

from

less

fate

the

thought that

a

ment, in manipulating
powers,

make

can

pressions,

of

its taxing
break

or

recessions

truth

govern¬

and

de¬

adjust¬

higher

risers

and

treads.

Americans

certain
be

know

functions

entrusted

is

certainly not

make

a

my

for

case

purpose

wasting

our

natural

resources.
But
I
agree
with Mr. Holman in this: Non-use

of natural
As

their

know

scientific

and

use

it

with

the

use

they

and

hobbles prog¬

resources

men

natural

how

to

re¬

use,

knowledge grows,
ability to find

their

still

other

natural

we

use

most

estimated

5,000

on

that

This

times

as

there

is

people

government

point

adjustment
in

is

iron

much

will

provide

rapidly growing
population, not merely with the
necessities of life, but with the
aids

for

free

men

for

1954

business

everyday

living

the

world

uses

must

of

economic

our

be

not

scientific

ress

our

siphoned

off

and

technical

prog¬

which American business and

industry

has

tinue,

the

prise

must

evolved

profits

research,

not

is

of

be

to

con¬

enter¬

our

taxed

development,

away.

new

duction facilities and the

,

new

pointed

faces

general

outing

chairman

the

and

named

In

the

rifever

One

of

the

highlights

160

161

are

heard

we

and

is

living,

least

the

a

our

then

future

ore,

pro¬

of

the

is

American

own

will

be

than

more

80

the

municipal bbnd fraternity.
Henry Grady Wells, Jr., Andrews
&
Wells, Inc., chairman of the
"Bond Crier" committee, promises
that the

edition

1954

"heartiest"

knowl¬

This

is

pros¬

business

formula

for

living.
a

bullion

(Special

liam

to

The Financial

The

great

growth

of

America

Wheeler

W.

III

since the early part of
century, better educated,
higher income Americans are rais¬
ing big families. There were four

Witter

Dean

&

million babies

born

in

this

nation

Palmer, Pollachi Co.
lachi

of

than

more

churchgoers

who

&

curities

Co.

is

engaging in

business

from

be¬ 84 State Street.

(Philadelphia Plan)

World War II.

To he guaranteed

Through scientific research

equipping

children and

well

as

our

please, to

you

ourselves,

1.75%

for themselves

1956

1952

the

alone,

1958

Americans spent more than $3,750
total

research

efforts
ment

the

are

and

15 times

and

govern¬

greater than in

War

II

which

continued

assure

growth

industry and business in the

2.80

1962

2.85

1967

3.05

1963

2.90

1968

3.05

2.60

1964

2.95

1969

3.05

skyrocketing
truth

years

is

proportion

over

this:

standard

number of

creasing.
ever,

as

1966
'

*

3.02 5

Issuance and sale
The

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

HALSEY, STUART & CO. INC.

BAXTER, WILLIAMS & CO.

R. W. PRESSPRICH & CO.

*

population

higher

Yield

3.00%

1961

for

There has been much talk about

our

1965

2.45

help

ahead.

the

Maturities

2.70%

period.

basic facts

are

Yield

I960

-

the

development

industry

pre-World

These
to

of

Today,

1969. inclusive

2.25
-

1959

research.

to

2.00

1957

we

for

Maturities

Yield

1955

our

provide, for

annually March 1, 1955

unconditionally as to payment of par value and dividends by endorsement
by Chicago and North Western Railway Company

Maturities

During

billion,

mature

we

grandchildren, .if

care

to

as

future.

To

of

our

of

IRA HAUPT & CO.

HAYDEN, MILLER & CO.

INCORPORATED

THE ILLINOIS COMPANY

WM. E. POLLOCK &

CO., INC.

the age of 65.

Through

the

living,

JULIEN COLLINS & COMPANY

McMASTER HUTCHINSON & CO.

a

the

MULLANEY, WELLS & COMPANY

Their percentage, how¬
compared to those under

F. S. YANTIS & CO.
INCORPORATED

older people is in¬
February 11. 1954

Pol^

Mass.—Palmer,

BOSTON,

Equipment Trust Certificates

coun¬

try during 1953, and that was the
year which topped all the recordbreaking years since the end of

joined

Co.

i

27/s%

has

Hammill &
Co., 520 South Grand Avenue. Mr.
Wheeler
was
previously
with

Equipment Trust of 1954

time

this

Chronicle)

the staff of Shearson,

today is its children. Now, for the
first

the

date.

Calif. —Wil¬

ANGELES,

Chicago and North Western
Railway Company

million

be

to

Joins Shearson, Hammill

$6,495,000

would

Americans.-

will

issues

all

of

Today,

1975 there

200

the

hands. Self deter¬

American

the

items

million1 Americans.

estimated that by

of

"Daily Bond Crier," the
journal of activities in

LOS

continued advance¬
superior standard of
the hands that hold

of

must be its

predic¬

million.

the

humorous

which

population

our

exceed

there
It is

1930's

that

the

have
of

Field Day will be the appearance

alive.

tions

of

following
chairmen

as

W. H. Morton & Co.,

opening

If there is to be continued

perity

ment, of

annually.

scientific

West¬

Club and Beach
Club, Rye, N. Y. on Friday June
11, Thomas F. Adams, Adams,. McEntee & Co., Inc., President of the
club, announces. Myles G. Walsh,
Blyth & Co., Inc., has been ap¬

markets.

successful

man's

New

of
the

at

There must be sufficient funds for

already plastics are replac¬
ing steel in many manufactured
as

held

from endless toil to stay

advances of medical science and

by Mr. Woods before the
Terre
Haute, Ind., Feb.




our

as

be

chester Country

a

by exorbitant taxes. If the pattern

re¬

It

at

will

of the finance committee.

of

year

turning

today,

planet.

our

York

outing of the*
Club

arrangements, George B. Gibbons,
Jr., Geo. B. Gibbons & Company,
Inc.; sports, Robert R. Krumm,

derfoot.

iron and aluminum,
are
second
only to oxygen and silicon in their
abundance

annual

Incorporated;
prizes, James M. Ransom, Harris
ficient to carry out those func¬ Trust & Savings Bank; chairman's
tions: When the taxing authority committee,
David H. Callaway,
is wielded beyond that point, the
Jr., First Michigan Corporation.
trust is
abused
and
the worth¬ Robert M. Goodman, National City
while basic intent trampled un¬ Bank of New York, is treasurer

of

metals

21st

witly authority to levy taxes suf¬

sources.

The

The

Municipal I Bond

various committees to assist him:

best

can

pattern. The buying power of
It

to

with

are

it, there

which

our

trusted

destiny.

as

performed by government. We

have

be

must

own

been

In the practice of democracy

we

composed of steps with

progressively

and

Municipal Bond Club
To Hold Outing

freedom. Without freedom

American business must be left in
the hands of the people. There is

has

man

a

manufacturer,
retailer, or one

is

nation

no

.

sources

sure

The
The

among

with which

has accelerated fantastically as his
knowledge and technical abilities

dare¬

a

a

ones.

GREGORY & SON

can

What

I

resources

named, he

was

through these various ages

am

are

few, not the

many.

healthy,

is

man

new

The speed
moved

ress.

into

being at those levels.
But

a

Individual liberty is all important.
The- basic requirement for
prog¬
ress

ments.

of these—who fears

in

not these predictions, but the con¬
clusions we may come to because
of them.

the

separate.

to

on

the

up

be

And

promise

me

renders

moved

never

before, And long

use

used

to

must

is

second is scientific research which

retail

ends-an

seems

he

distributor,

who

he

us

this

caution

great be¬
it is made up of free
people.

grow

him

led

materials he had

raw

before

in

era

has

man

and

symphony orchestras than any
other country in the world. We
have brought these things to
pass,
because we are free. Such a
people

mination of the paths that we fol¬

may be
recorded
but the average hourly wage will
have remained steady.

What

utilize

successive

of

nation

low

be

unemployment

mary

each

history

of

Our

Oil

Company of New Jersey, tells
that

note

cause

Board

Standard

one

sounded.

more

however,

me,

crust

a

They

They

1954

the

to

seem

denomina¬

land that has

a

schools, parks, playgrounds,
libraries, art museums, theaters

their

bauxite and alunite in the earth's

gross

year.

volume

decline.

when

the

in

this

dollar

to

a

become

money

that

Caution

in this country. The first is
people,
in ever expanding numbers.
The

not

there will be

say

reduction

of

does

of

specialists

to

common

conditions

Texan

.

Note

point

will

in 1953 is

as

who study the trends of
omy.

a

narrower

his

and

there is not

say

the

1954.

of

buyer

new

We want to know how best

year.
to

yesterday.

was

will

that this sort of adjustment
brings
is increased competition. The

—whether

levels by 228%, and corporate
taxes.

it

footing,

business

healthy

factories-and mines exceeded pre¬

after

sounder

a

little ^harder to

profits

experienced

American

billion, the builders grossed $36
billion, retailers totaled more than
$170 billion, the output of our
war

prob-s

we

it may, there is good
believe that our econ¬

Among'the
$230

not. been

be better off, when the
adjustment
is completed.

J. Albert Woods

over

it

as

to

and

all-

an

have

omy

mil¬

Had

It

discredit

Holman, a
geologist who is

Chairman

pending since

now.

reason

spending

was

would

Be that

mini¬

lion. Consum¬
er

overdue.

ably

irre¬

one

ad^

the end of World War Two and is

before

over

.

postwar

•

at

one-half

condi¬

hostilities, reduced de¬

expenditures

for the Korean situation

mum:

and

ad¬

an

of

working. Un¬
employment
was just about
the

-

Eugene

for which.his age

It

were

ducible

Mr.

by the cessation

on

to

to

us

than 250

more

tions. This is

can

A

about

them.

been able to

mil.-

Ameri-

cans

justment

no

much

fields.

and

60

is

is

for

reason

re¬

"exhausting" them.
nothing in recorded

demand and supply becoming bal¬
anced
in
a
number of business

services. More
than

1954

fense

$365
worth

goods

in

there

and

rapid population growth.

our

is

there

much

so

every

face the future with confidence.

natural

history to substantiate these ideas

Says we have every reason to face the future
with confidence, and points to our great natural
resources,
our technical
abilities, and our ingenuity in using new mate¬
rials.

or

Yet

conditions.

Resources

our

hear

"wasting"

set of

new

of

We

sources?

look for¬

Natural

what

is

long to

a

offices

se¬

at

8

The Commercial and Financial Chronicle

(776)

'

South Spring

Recommendations & Literature

Hill Richards & Co., 621

Field

Investment

In

Street, Los Angeles 14, Calif.

Frick Building,

mentioned will he pleased
interested parties the following literature:

send

to

—

Co.—Memorandum—Arthurs, Lestrange & Co.,
Pittsburgh 19, Pa.

Texas Calgary

understood that the firms

is

Analysis

—

-

EVENTS

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

Telecomputing Corp.

*954

COMING

Riverside Cement Company—Analysis—ask for report T-3I—

Dealer-Broker Investment
It

Broadway, New York 6, N. Y.

Lerner &

Thursday, February 18,

Co.,

Public Service of New Hampshire—Review—Ira Haupt &
Ill

...

Texas Gulf Producing

—

Memorandum

—

Club annual
and election at Cudworth
Bond

Milwaukee

Co., 14 Wall Street, New York 5, N. Y.

Wis.)

1954 (Milwaukee,

Feb. 19,

Shearson, Hammill &

dinner
Post.

Banks—Comparative analysis of 63 representative banks as of
Dec.

NSTA Notes

1953—Paine, Webber, Jackson & Curtis, 25 Broad

31,

Street, New York 4, N. Y.
Corporate Bonds—Bulletin—New York Hanseatic
120

Corporation,

Broadway, New York 5, N. Y.

LIBBING
We

are

Japan—Circular—Yamaichi Secu¬
Co., Ltd., Ill Broadway, New York 7, N. Y.

Investment Opportunities in

rities

Japanese Pulp Industry—Brief resume in weekly stock bulletin
Nikko Securities Co., Ltd., 4, 1-chome, Marunouchi, Chiyoda-

pleased to inform our members that James R. Duffy
of Paine, Webber Jackson & Curtis, Boston,
and Lewis P. Jacoby, Thayer, Baker & Co.,
Philadelphia, will represent the Boston Se¬
curities

New

City

York

Stocks

Bank

Bissell

17 bank stocks—Laird,
Broadway, New York 5, N. Y.

analysis

of

&

tively

and

comparison

Year-end

—

Meeds,

120

I

a

and current

a

—

Non-technical report

on

33, Fla.
Radiator

*

*

should easily

we

CLUB

BOND

f

Sanitary

Corp.

—

Analysis

available

is

a

detailed

analysis of General

Investment

Taunton

White &

meeting of the Bond Club of Syracuse,

held at the Hotel Syracuse on Feb.
elected for the coming year:

1, the following officers

were

— Annual
Report for 1953
Company, South Bend, Indiana.

Central

Public

Gas

Company

Progress report

—

—

Utility Corporation

Solvents

Corporation

Consolidated Freightways

—

—

Memorandum

Convention at

—

—

Analysis

—

—

Fewel

Hotel

Karl

Aircraft

—

Memorandum
Bulletin

—

Rollins

Pearne
Francis

Francis

Charles

Q. Coulter

—

The

the

Company,

of

Board

Governors

for

the

current

year

G.

Drew

Copeland, Reynolds & Co.; John P. Miles, L. D.
Co.; LeRoy H. Schellenberg, William N. Pope, Inc.;

Eastman,

Eastman

&

Co.;

Alvin

Cohu

&

SECURITY TRADERS

Co., 1 Wall Street,

Security

Traders

ASSOCIATION

Association

Bowling League standing

as

of

York,

of Feb. 11, 1954 is

as

Serlen

(Capt.),

Rogers,

Gold,

Krumholz,

13
11
9
8
8
7
7
7
7

Gersten

(Capt.), Bass, Valentine, Eiger, Bradley

(Capt.), Hunt, Werkmeister, Swenson, Ghegan

Burian

(Capt.), Gavin, Clemence, Montanye, Whiting
(Capt.), Boggs, Siegel, Voccolli, Lienhardt

Memorandum

—

—

Street, Boston 10. Mass.

Growney
Krisam

Klein

(Capt.), Pollack, Cohen, Smith, Strauss

(Capt.), Fredericks, Murphy, Weseman, Huff

—

Hunter

(Capt.), Brown, Alexander, Farrell, Barker.
200

—

Hank

burger, Loeb & Co., 15 Broad Street, New York 5, N. Y.

5

Point Club

Point

Mike

209

Gersten

Jlowm'it i>cciivitics

Presently Active

Co., Xtd.
C. A. Dunham

The

Financial

Hooker

York

San

Exchanges.

Fay, 340

Francisco

Stock

Trinity Place, New York 6, N. Y.

NY I376

BOwling

Green

Head Office

9-0187

Tokyo

Department of Commerce,
Avenue,
New York,

Madison
N.

Y„

or

112 State Street, Al¬

bany 7, N. Y. (paper), no

charge.

to

The

Financial

Chronicle)

C.

F.

Childs

West Jackson

What Is Your

111.—John J. Keat¬

ing has been added to the
and

stalf of

Company,

Boulevard.

Affairs

Committee, 22 East 38th Street,
New York 16, N. Y. (paper), 25c.

C. F. Childs Adds
(Special

obligation

Broadway, New York 6, N. Y.
Tel.:

Guide for

Mabley—Public

CHICAGO,
61

State

—

operator—New York

Chapman for¬ What Educational TV Offers You
merly conducted his own invest¬
—Jack

Japanese Stocks and Bonds

Association

Relations

retail store

Mr.

ment business in San Bruno.

without

B. Neill — Caxton
Ltd., Caldwell, Idaho

(paper), $1.00.

on

Troster, Singer & Co.
Dealers

and

Contrary Thinking, The—

Customer

Chronicle)

&

of

Printers,

FRANCISCO, Calif.—Ben¬
jamin C. Chapman has become as¬
with

Seventh—F.

Humphrey

Pines^reet, members of the New

Material and Consultation




to

Sacred

Harper—Foundation for Eco¬
nomic Education,
Inc., Irvington-on-Hudson, N. Y. (paper),
single copies free; quantity
prices on request.

Art

Club

SAN

sociated

Broker and Dealer

Primary Markets

74

Beach

A.

Growney

N.A.S.D.

Member

Blue Moon Foods

Security

Hollywood

Man's

Agriculture's

With Hooker & Fay
(Special

Y.

at

Bookshelf

6
4%
2%

J.

Meyer (Capt.), M. Meyer, Frankel, Wechsler, King

Sulphur
Analysis — Garrett and Company,
Fidelity Union Life Building, Dallas 1, Texas.
Philadelphia & Reading Coal & Iron Co;
Analysis — New-

N.

(Hollywood,

Investment Bankers Association

Points

(Capt.), Jacobs, Topol, Weissman, H. Frankel
Leone (Capt.), Nieman, Gannon, Tisch, Greenberg
Donadio
(Capt.), Craig, Gronick, Bies, Demaye

Kaiser

Members:

1954

3,

Business

Manson

Auchincloss, Parker

Federal

Firm*

Hotel.

Inc. (STANY)
follows:

Redpath, 52 Wall Street, New York 5, N. Y.
National Homes Corp. — Memorandum
Kiser, Cohn & Shumaker, Circle Tower, Indianapolis 4, Ind.
New England Lime Company—Analysis—Dayton Haigney &

&

75

28-Dec.

NEW YORK

OF

New

Team:

Bean

Borg Warner.

Inc..

Exchange

Bookman.

"Gleanings"—Francis I. du Pont & Co., 1 Wall Street, New
York 5, N. Y.
Also in the same issue is a list of "Special
Purpose" Portfolios.
Available also is a memorandum on

American

Stock

Grabau-

Grabau,

J.

(Minneapolis,

—

N. Y.
Long Bell Lumber Co.—Memorandum—Estes & Co., 112 West
7th Street, Topeka, Kansas.
Mclntyre Porcupine Mines, Ltd.—Analysis in current issue of

—

of

Convention

C.

&

1954

Fla.)

composed

is

i

meeting.
Nov.

Harry

New York 5,

Mr.rgenthaler Linotype

-

Asso¬

Board of Governors of Associa¬
tion

Heaton, William N. Pope, Inc., Secretary.

following members:

McDonnell

Sherman

and

Rollins, K. B. Rollins & Co., President.
Billings, Cohu & Co., Vice-President.
Q. Coulter, Marine Trust Co. of Western New York,

W.

Charles T.

Claridge.

Sept. 23-25,
Minn.)

T. He*to®

Treasurer.

& Co., 453

Merrill, Turben & Co.,
Commerce Building, Cleveland 14, Ohio.
—

B.

Karl B.

of

Memorandum

Corporation—Analysis—Greene

Corp.

and Beach

National Security Traders

Sutro Bros. &

Street, New York 5, N. Y.

Kaiser Steel

Country Club

ciation Annual Convention at the

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

Bond Club of New
21st annual outing at West¬

Sept. 22-26, 1954 (Atlantic City)

Good-

Spring Street, Los Angeles 13, Calif.
—

(New York City)

11, 1954

Club, Rye, N. Y.

—

Memorandum

Fire Association of Philadelphia

2400

Finan¬

Conven¬

1954 (Canada)

Canada Annual

chester

J. G.

Co., 120 Broadway, New York 5, N. Y.
Also available is an
analysis of Foremost Dairies, Inc.-Golden State Co., Ltd.

HA 2-

of

Societies

tion at the Palmer House.

York

Report — Link, Gorman,
Co., 208 South La Salle Street, Chicago 4, 111.

Commercial

Co..

(Chicago, HI.)

Federation

Municipal

Inc.—Report—Aetna Securities Corporation,
111
Broadway, New York 6, N. Y.
Also available is an
analysis of Copeland Refrigeration Corporation.

Pan

Firm*

Exchange

Stock

Analysts

June

—

Records,

Union

cial

of

body & Co., 115 Broadway, New York 6, N. Y.

Lockheed

of

Investment Dealers' Association;

Company, Incorporated, 37 Wall Street, New York

Capitol

37 Wall

Board of Governors of Associa¬

—

Shoe Cor¬

Company

Canadian Superior Oil of California

Graham

Association annual convention.

National

5, N. Y.

& Co.,

ers

May 16-20, 1954

1

Airways—Analysis—Ferris & Co., First National Bank
Building, Dallas 1, Tex.

South

Investment Bank¬

Texas Group

meeting.

Braniff

Peck &

(Dallas, Tex.)

May 9-11, 1954

Jasper Park Lodge.

Associates Investment

Brockton

Waldorf-Astoria.

•

poration.
Associates

Security Traders Association of
New York annual dinner at the

tion

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

City)

May 7, 1954 (New York

Broadway, New York 5, N. Y.

OF SYRACUSE

At the annual dinner

annual outing.

May 12-14, 1954 (Boston, Mass.)

SMITH, Chairman
Advertising Committee

Pershing & Co.

method of de¬

Dealer*

Municipal

Louis

St.

(St. Louis, Mo.)

1954

Apr. 29-30,

June 9-12,

Standard

&

early start

an

National

or

•

,

complete Adver¬

our

HAROLD B.

Economy

.

*

enthusiasm

much

last .year's results.

pass

Duffy

120

stock is undervalued

with

met

announce

feel with

and
R.

James

overpriced—$2.00
—Frank Charles Petrine, 3084 Southwest 27th Avenue, Miami
termining when

American

hope to

foreign trade.

Report to Investors

promptly at 12:30.

tising Committee within the next few weeks

Co., Ltd., 61 Broadway,
New York 6, N. Y.
Also in the same issue are analyses of
the Electric Wire and Cable Industry and Spinning Industry
discussions of Investment Trusts in Japanese

has

Hotel, with luncheon

the Warwick

Group

regarding the 6% and 10% of the gross to go
to affiliates on this year's contracts.

Pulp Industry in Japan—Analysis in current issue of Nomura's

and

respec¬

Hudson, Thayer, Baker & Co., Phila¬
National Secretary, has informed

he

reception
at

a

12:30 the same day

12 to

Investment

and

Philadelphia

our

that

me

Investors Beacon—Nomura Securities

Franklin Hotel.

also be

will

There
from

the 1954 National Advertising Com¬

on

delphia,

up-to-date com¬

13-year period—
Front Street, New

market performance over
National
Quotation Bureau, Inc., 46
York 4, New York.
and

of

mittee of the N. S. T. A.

parison between the listed industrial stocks used in the DowJones Averages and the 35 over-the-counter industrial stocks
used in the National Quotation Bureau Averages, both as to

yield

Association

John

Over-the-Counter Index—Folder showing an

Association

Traders

Traders

midwinter

Philadelphia annual

dinner at the Ben

ku, Tokyo, Japan.

Association

Investment Traders
of

AD

(Philadelphia, Pa. >

Feb. 26, 1954

141

eral

and

Share

State

of Our Fed¬

Government

Debt?—Clyde William Phelps—
Commercial
Credit
Company,
Baltimore 2,

Md.

(paper).

Volume 179

The Commercial and Financial Chronicle

Number 5300

(777)

tion of

Trust Investments During
Transition Period

tion

Professor of Finance, New York

University

Up
War

the

to

II,

the

outbreak

primary

of

World

of

concern

trustees was the preservation of
capital and obtaining the current
of

rate
on

return

prime

investments.

The

problem of

protecting the
life

tenant

the
d

or

remainr

e

m

a

n

against depre¬
ciation

the

of

Whereas
there

years ago

two

was

minimized.

-

This

is

strength

of

outlook

partly

the free

world, notably of the United
States, and partly to the inherent
weakness and contradictions from

which

the

satellites

Soviet

Union

its

and

suffering.

are

ing

long this present situation will
last, experience of the past has
shown
that
strong
inflationary

the dollar and
of

seeking

tax-f
Marcus

Nadler

o

importance. To be

f

in¬

was

the

States only as a result

particular

sure,

during the

^Os and in the early years of
war

forces

not

r e e

come

the

exceedingly low rate of
on high grade

interest obtainable
bonds

of serious concern,

was

and

trust officers endeavored to
overcome
this difficulty through
many

the acquisition of high grade pre¬
ferred and sound common stocks.
At the end of the war the infla¬

price and

controls

wage

came

to

the fore. Commodity prices began
in

sharply with the result that
the

1948

purchasing power of
by 42% lower than
in 1939.
This of necessity caused
a
considerable change in the in¬
the dollar

was

vestment

policies of trustees.
of them realized that by

Many

how

take

•

in

root

United

the

of

major

a

purchasing

fund

tance.

basic

these

in

and

some,

the State of New
was

certain percentage of the

a

corpus

in

where

the

such

York, legislation

enacted to enable trustees to

invest

sult

impor¬

states also recog¬
developments
as for example, in

Many

nized

great

the

of

power

of

was

common

stocks

did

trustor

not

specific provision.
these

of

As

developments

even
make
re¬

a

trust

companies became more and more
stock minded, and equities during
the last few years played a grow¬
ing role in their investment pro¬
grams.

The Situation Today

conditions

Economic
United

States

different

from

War

World
vacuum

those

the

after

vailed

today

II.

in

are

the

entirely

which

pre¬

termination

of

economic

The

the war has
The productive capa¬

created

been filled.

by

city of the country has risen to a

point where it can meet all the
present demands for national de¬
fense as well as the requirements
of

population with a
standard of living.
The

growing

a

rising

has

boom

sellers'

come

to

the

end,

an

market has given way to

buyers' market, competition is
keen, and margins of profit are
tending to decline.

a

political situ¬
ation also has undergone a notable
The international

address by Dr. Nadler before

♦An

the

Trust Conference
of
the
Trust
Division
of the
Amerit^n
Bankers
Association,
New ' York City,

35th

Feb.

Mid-Winter

9,

1954.

,

>




•

•

Just

the

as

in

downward,

interest

securities

which

their

•

high

days

grade

in

developments
the making which may un¬

in

are

in

considered

transit

which

new

so

the

values

today

considered

are

these developments do not

While

take place

overnight, the speed of
development today is greater by

1928-

end

of

1945

to $213

billion

September, 1953.
(2)

Contractual

savings, which
readily be spent by the
individual,
are
also
large and
steadily
increasing.
The
total
cannot

volume of life insurance in

force
increased from $156 billion at the

rapidly growing and the funds in¬

directly

had

up

bearing

a

and in¬

long

on

term yields.
From 1948 to the
middle of 1953 money rates again
witnessed a cyclical upswing,
caused

mainly

by the huge de¬
capital from the private

mand for

sector of the economy and the fact
that despite the high level of busi¬
ness

activity that prevailed during
the government, because
huge military expenditures,

of

end

1945

of

vested

not able to balance its budget.

The credit

policies of the Reserve
well

as

management

policy

Administration
to

the

recent

of

also

debt

the

new

contributed

upward

swing

the

as

movement

The short term

to

came

an

end

around the middle of

long

1953, and the
downward
trend is

term

by

them

in

markets

the

which

an

(3)

The negative savings of in¬

e., the repayment of
outstanding debt, is more impor¬
tant today than ever before, pri¬
marily because private indebted¬
ness

is

much larger.

so

These
that

factors

funds

at

the

clearly indicate
disposal of in¬

stitutional investors

bound to

are

grow rapidly in the future. The
United States is rapidly
becoming
a
nation of middle-class people,

which

means

the purchase of more

life insurance and

a

growing field

for trust companies. The number
of estates left by individuals is
bound

to

grow

of the tax

though, be¬
factor, the size of

even

estates

will

decrease.

Corporate Savings
now oper¬

and capital
contribute to the

money

downswing in

playing

Current

principal forces

ating

are

dividuals, i.

Downswing
The

are

funds

•

individual

Causes for the

$304 billion at the
Pension

increasingly important role in the
capital market.

cause

again in evidence.

to

1953.

1950-52
of the

as

prime investments for trust funds.

in

-

pushed short term rates

securities

of

rates

in

end

cyclical

interurban

down¬

at the

the result of speculation in
securities with bank credit, which

the

of

the

interrupted by
cyclical swings.
The

of interest rates.

value

War

although

was

coming of the automobile under¬
mined and ultimately
destroyed

far than in

rates

money

may

Not only are the savings of in¬
dividuals large but corporate sav¬

ings

since

the

of

end

the

year

have also been substantial. Ameri¬

the

creases

present conditions would be well

chasing

advised to

the

of

power

in

dollar

investment

officer

under

verted

cash

into

at

moment's

a

Continued

notice, increased from $148 billion

on

page

purchase those/ of com¬
new
trust investments need not
panies which have not only good
play the same role as during the management but also whose prod¬
past few years.
ucts are well established and are
not

problems con^

threatened

The

Business Outlook
One of the prime

emphasis

by new products.
should be laid on
corporations which have

those

business

outlook

for

and

the

of

markets in

The

in

general

and

money

not an

.

capital

to

offering of these Bonds for sale,

buy,

any

a

United

of the

Business activity

readjustment.

profits in
the third quarter of 1953 were
somewhat lower than during the

in

operating
the

to

the

country

conclusion

that

a

sharp decline in business activity
accompanied by large-scale un¬
employment is not in the making.
This

conclusion

much

eral

is

based

not

so

what measures the Fed¬

on

Government

adopt

may

business

stimulate

the

on

activity

to
but

In the bond

market, too,

a con¬

families has

important role in their

an

willingness to mortgage their fu¬
ture

income

in

order

requirements.

to

meet

The

dy¬

namism of the American economy
is based on the fact that the popu¬
lation is growing, the standard

living
dollars

is

an

offer

i

Company

First and Refunding Mortgage Bonds, Series

change has taken place

siderable

W, 3V8%

Due December I, 1984

during 1953. Whereas early in the

almost
every
depreciation

year

showed

in

Price 101.09% and accrued interest

that the rise in money rates which
set in in the United States

shortly

after the war was not a long sec¬

trend

ular

movement

rather

but

a

cyclical

in¬

which temporarily

Copies of the Prospectus may be obtained from any of the several under•
only in states in which such underwriters are qualified to act as
dealers in securities and in which the Prospectus may legally be distributed,
writers

1 o'n g downward
The increase
in interest rates during 1952 and
terrupted

the

trend of money rates.

strength

many individuals and

present

solicitation of

Blyth & Co., Inc.

i

economy,

the increased economic security of

played

or a

i

Pacific Gas and Electric

of the up to about the middle of 1953
was
primarily the result of the
which is
great demand for capital on the
sound and growing.
No abuses of
part of the private sector of the
any importance have occurred in
economy and because, in spite of
any sphere of economic activity.
the fact that business activity was
The economic security of the peo¬
at a high level, the government,
ple is wide-spread and greater
as a result of large defense expen¬
than ever before in the history of
the country.
While private in¬ ditures, was forced to operate
with a deficit.
The rather sharp
debtedness, notably consumer
decline in prices of high grade
credit and mortgage indebtedness,
bonds including governments in
have increased considerably, they
the early part of 1953 was further
are
not
out
of
line
with
the
accentuated by the credit policies
growth of other economic indices
of the Reserve authorities and by
such as disposable
income and
the debt management policy of the
total savings of the people.
Treasury.
Once, however, the
The increased growth in private
monetary authorities realized that
indebtedness may
indicate that the dangers of inflation had re¬
rather

American

offer to buy,

$60,000,000

trust
fund
its high
grade bond account and almost
every trust officer was raising the
second quarter.
A careful analy¬ question "what price safety?" the
sis,
however,
of the
economic atmosphere today is entirely dif¬
ferent.
It has been fully realized
forces

increased and corporate

leads

or an

of such Bonds. The offering is made only by the Prospectus.

The Bond Market

particular.

ecopomy

standard of living.

rise in its

16

3
This is

fronting trust officers today is the demonstrated their ability to earn
impact that future business devel¬ and to pay dividends in good as
opments will have on the prices of well as in bad times and whose
equities and of bonds.
This nat¬ activities will grow with the
urally involves an analysis of the growth of the population and the

has decreased, unemployment has

the

time de¬

same

stroying old values.

trust

completely fulfill their obligation
as fiduciaries and that protection
of

values while at the

new

Rates

interest

was

authorities

creates

economy

future the protection of the pur¬

States at present is in the midst of

trust

29

such

sion that at least in the immediate

preserving the corpus in
in terms of dollars they did not
merely

upturn

was

an

of

can
the past; and this in¬
corporations have adopted a
briefly be summarized as follows:
policy of paying out, on the aver¬
responsibility of care¬
(1) Individual savings are very
age, less than half of their earn¬
fully selecting securities on the
war. Since such a catastrophe un¬
large. The liquid savings of indi¬
ings in the form of dividends. The
der present conditions is not to be trust investment officer upon
viduals, consisting of cash on hand rest is retained and used for en¬
expected and since the productive whose judgment the welfare of
and deposits with commercial and
largement and modernization of
capacity of the country is great, so many individuals depends.
savings
banks and government
equipment or for increasing work¬
indeed one may reach the conclu¬
In the selection of equities the
obligations, which can be con¬
ing capital. Depreciation is also

tionary forces which were accu¬
mulating during the war but
which were held in check through

to rise

predict

equities is favorable.

trend

occasions

trend
term

This is so be¬
cause, as stated before, the Amer¬
ican
economy
is dynamic, and

dermine

in the purchasing
dollar has set in.
can

during

decade.

past

ative

While

of

the

character,

purchas¬
power

for

dangers of inflation, too,
have receded, and a period of rel¬

nobody

than
the last

However, it clearly indicates that
selectivity in investment at pres¬
ent is more important than during

were

The

stability
power of the

play a more
the successful

corporation

a

case

profit.

conclude that the long-range

may

real threat

a

before and by a

ever

of

the

was

three

or

been

several

short

twelve years. From the above one

due to the increased economic and

qiilitary

has

on

ward

operation

of war, this threat is rapidly re¬
ceding and the danger of war has

been

be

nor

Management will
important role in

higher level of business is good.
change.

I

reduction in the margins of

smaller demand for capital by the
private sector of the economy in 1954. Holds long range out¬
a

long

for Interest

secular

rates since the end of World

very

keener than

accompanied by
for

last

Outlook

The

will, how¬
ever, be marked by increased
competition which may become

credit conditions that influence interest rates and availability
of investment outlets. Foresees a downward trend of interest

look

the

serious in character. It

policies of trust companies are
based on judgments which involve analysis of current economic
forces, Dr. Nadler discusses business outlook and money and

Introduction

to

The

crea¬

at

older products.

some

likely

After pointing out investment

rates,

while

The present readjustment is not

MARCUS NADLER*

By

wealth

new

time undermining the value

same

of

products and the

new

of

9

rising,

are

and

billions

of
of

spent annually on re¬

search which leads to the produc¬

ceded, that the peak of the boom
had passed, and
at

the

derwent

a

their

a

downward

policies

un¬

notable change and this

immediately reflected in

was

grade

bond prices today

are

Goldman, Sachs Si Cflw

Merrill Lynch, Pierce, Fenner & Beane

Lehman Brothers

Stone St Webster Securities Corporation

F. S. Moseley & Co.

Dean Witter & Co.

White, Weld & Co.

Hemphill, Noyes & Co.
A. G. Becker & Co.

Carl M. Loeb, Rhoades & Co.

Hornblower St Weeks

Incorporated

Paine, Webber, Jackson & Curtis

Central Republic Company
(Incorporated)

Shields & Company

Tucker, Anthony & Co.

Robert W. Baird & Co.,

Schwabacher & Co.

Blunt EHis & Simmons

Dempsey-Tegeler & Co,

Fulton, Reid & Co.

The Illinois Company

Incorporated

Pacific Northwest Company

McDonald &

Company /
'

•

i

Crowell, Weedon & Co.

E. W. Clark & Co.

Elworthy & Co.

substantially higher than they

Hill Richards & Co.

McCormick & Co.

Loewi & Co.

Clement A. Evans & Company

First California Company

Incorporated

Incorporated

Hooker & Fay

Lester, Ryons & Co.

Sutro & CoJ
(

Carl McGlone & Co., Inc..

Stephenson, Leydecker & Co.

bonds with

prices of high
the result that

were

Eastman, Dillon St. Co.

that business was

beginning of

readjustment,

Glore, Forgan & Co.

February 18, 1954

in the middle of the year.
I

10

The Commercial and Financial Chronicle

(778)

.

.

Thursday, February 18, 1954

.

i
ard

LETTER TO THE EDITOR:

unim¬

underscoring)

(my

Connecticut Brevities

paired, to balance its budget and
to

Opposes Raising Gold Price
Standard

League,

In

proposal of Donald H. McLaughlin,
Mining Co., that official price of gold
ounce would mean devaluating the dollar

says

an

Chronicle:
Your issue

article

who

carries

4

Feb.

Donald

in

Company,

repeats

H.

Mc¬

he

which

a

the
"value" of our currency must be
held to a definite weight of gold
and/or silver per
unit of cur¬
demands

that

rency

Aug.

20,

cial

price

24.75

took

Deal

New

raised to $70

cepting for

an

gold content

ounce.

the

is

course,

to-1

American

the

Frederick G. Shull

dollar should

ated"
One

Mc¬

Mr.

where

wonders

Laughlin could possibly have dug
such

up

theory

"sound"

constitutes

what
He

radical

a

to

as

money.

claim
that
tampering with the "value" of our
currency coincides with opinions
held by the outstanding monetary
experts of the past 200 years, such
surely

men

as:

cannot

Adam

Alexander

Smith;

Hamilton; John Sherman; Andrew
D.

White; Edwin W. Kemmerer;
W. Mellon; and today's
one authority, Dr. Walter

Andrew
number
E.

Spahr of New York University.

Here

of the views held

some

are

In his "Wealth of

Nations," page

found

the

"The

statement:

denomination

been the most usual

which
has

a

been

real

expedient by

public

of

bankruptcy

pretended

a

ment." Now it
raise

ap¬

pay¬

happens that

so

official

the

you

of

price

gold in terms of American dollars
without its automatically "raising
the denomination
Mr.

McLaughlin

recommend

ment

ent"

that
and

of

our

coin." Is

to

prepared

the

to

it

latter

U.

S.

adopt that

Govern¬

"expedi¬

thereby "disguise

a

public bankruptcy under the

price

until

real
ap¬

to

be

in

been

part

of

Leggett

has

John

When

White

D.

drew

Sherman

restoration

of

Dollar

deemability" in gold,
in

the

era

Civil

of

the
"re-

the
War

didn't undertake to
"value" of the
"raising the denomina¬

with the

tamper

the

of

coin"

adhered

properly,

price

"value"

$20.67

an

of

the

quite

official

an

Professor

in all of his

likewise,

to

Dollar

at

of gold.

ounce

late

The

they,

—

Kemmerer,

the

ther

been

changed;

maintained

but

that

theory
he fur¬

actually been changed to
ounce,

should
drew

that

"value,"
adhered

be
W.

Mellon,

it had

after

at
to.

in

$35

all
And

his

an

costs,
An¬

book,

Bimson

R.

Carl A.

of .the

Mr.

is

of

uge

annual forecasts

due

any

the dark and hope

nal.
of

springing eter¬
composed largely

Although

and

mumbo-jumbo

this

non-se-

thousand well chosen words. Lead
off

with

tistics.

order, to maintain the gold stand¬

use

say

will

This

confuse

every¬

.

$274,658,923.17, be sure to

so,

.

.

"Avoid

.

OIL CORP.

299,925 Shares Common Stock
(Par Value 1< Per Share)

uncertainty.
can't

like

predictions

precise—if

Be

checked.

be

Specify

business will rise 7.32%
unless

it

that

next year

something happens (some¬

This provides
out, no matter what.
"Don't overdo your optimism.

A

disillusioned

save

bankrupt

may

.

the forecast and throw

On the other
hand, there is an unwritten law
against being pessimistic. No one
killjoy and, besides,

a

if

nasty
them.

you

queer

best

The

a

thing

pretty

deal
is

for

to

The

business

of the Corporation' will he to
acquire,
develop oil and gas properties. Present
properties of the Corporation are located in.the San Juan
Basin, New Mexico; Sandoval County, New Mexico; and

and

in Rooks

A copy

County, Kansas.

of the Offering Circular covering the above issue
may be obtained from:

Gearhart & Otis, Inc.
Trinity Place, New York

G. N.

Y.

WHitehall 3-2f>00

"•'

"

v*

I

t

1

Cyril L. Cole Joins
Staff of

Stolle, Baker

y

*

*

Allen

Cardwell

D.

Manu¬

facturing Corporation, member of

Cardwell- will

be

the employment
sons

is

expected

expanded

level of 330 per¬
to be increased

Cardwell/

trolled

*

The

main

Francisco

San

change,

announces

Stock

open a

which

will

operate

The

company

lampshades.

lamps and

associated

& Co., Inc., 174
Canyon Drive. Mr.

Cole

was

Bromfield

formerly with Garrett&
Co. and John G.

Perry & Co. in Denver.

Two With Stern Frank
(Special

LOS
Raber

to

Financial Chronicle)

The

become

have

Calif .—Sam
Rothenberg
associated with

ANGELES,
and
Emil J.

Frank, Meyer & Fox, 325
Eighth Street, members of
the New York Stock Exchange.
Stern,
West

*

*

Bullard

the firm's

as

The

division.

❖

Chronicle)

Calif.—Cyril

become

has

Palm

North

factory at Pasadena, Calif.,
"

Cole

SPRINGS,

Cole

L.

L.

Financial

with Stolle, Baker

whose

Company

Bridge¬

Company,

producers of large machine
tools, has embarked on a $2,000,port,

000

expansion

60,000

and office space

of

$1 million will be invested
in new equipment.
*

*

*

The annual report of Aetna

the total

(Special

to

The

new

some

Insurance

With Dean Witter

About
plant
will be added and
program.

feet

square

shows

Company

Life
that

Financial Chronicle)

LOS ANGELES,

Calif.—Allison

connected
Co., 632
South •
He was
formerly with Francis I. du Pont
Hamilton

B.

with

is

now

,

Witter &
Spring
Street.

.Dean

& Co.

premium income, includ¬

ing affiliated companies, increased
14.7% to $676,688,969. Total life
insurance

in

increased

force

CONNECTICUT
SECURITIES

to

dividend.

%

&

Ex¬
The

the election of

Hartford

at

25,

t)ieir annual
1954

Pearl Street

HARTFORD," CONN;

JAckscn 7-5291

BELL

NEW YORK

PHONE

HAnover 2-7922

TELETYPE

HF

197

meeting of Feb.
increase

capital

a

on

75
'

HARTFORD PHONE

of

Fire Insurance Company will vote

Exchange, effective Feb. 12,
1954. Mr. Babich, an officer, direc¬

BRAINARD, JUDD & CO.

-

.

*

!■!

stockholders

Mr. Leo B. Babich to membership

tor and

PALM

plant is in Essex will soon

produces

to The

*

$

Verplex

Cyril
(Special

and

$13,362,000,000 of which $10,226,strictly ambiguous, like Nostra¬ 000,000 is group life. The total
damus. It is good clean fun, and surplus of the stock department
quite simple, once you get the of the parent company increased
hang of it."
by $9,590,986, even after deduc¬
tion
of
$10,000,000
which
was
added to capital at the time of
S. F. Exchange Member
the
payment of the 50% stock

voting stockholder of Hill

Richards

&

Co.,

acquired

the

membership by transfer from Mr.
Murray Ward of that corporation.

to

The

Financial

SACRAMENTO,

I
.

1

" \J

■

~

.

*s

f

Primary Markets in

Reynolds & Co. Add
(Special

74

of¬

new

annealing

new

in the

explore

a

be

Ronald E. Kaehler, President of

share

*

The

it in

face someday.

your

the

Price $1.00
per

that

-

&c™^,?nd contro1 devlces wi"

western

loose

saying business will be up 10% or
down
5%.
That indicates basic

real estate salesmen can be

(A Delaware Corporation)

and-

heavy barrage of sta¬

a

including yourself .But never
round figures, if the national

debt is

gov¬

concerned, its policy
keep its own house in

SANTA FE WESTERN

-

r:

•

quiturs, it is taken very seriously by 58% within the next
18
by all concerned.
.
.
months. Chesapeake has also ac¬
"The trick in forecasting is' to
quired Grenby Manufacturing
say absolutely nothing—in several Company,
which formerly con¬

"Insofar

has been to

building is under considera¬

now.

in

this

company

has indicated

tion.

Economic forecasting the electronics industry, has been
has always been a fanciful blend
purchased by Chesapeake Indus^
of wishful thinking, whistling in
tries, New York. Operations at
day

wants to be

GAS &

" v

nothing compared to the delr

as

statement:

is

The

furnaces, cleaning and inspection

Leggett's Forecast

published
ernment

town.

purchased land in Bloomfield

10-ton

expanded

an

makes

move

Steel

Electric

Hartford

Chairman

is

thing always does).

as

: The

President.

is

Bimson

"Taxation: The People's Business,"

1924,

to

Company, has acquired control of

"The first blizzard of the winter

that the $20.67 price should never

have

$50,000,000

follow¬

Vice-President

a

Walter
and

one,

writings and speeches,

supported

to

company

daily production of light to me¬
dium weight iron castings will be

they

days,

will

property

Ariz., the largest bank in '.the
Rocky Mountain region of which

An¬

to

stock from the

$20,000,000

Foundry, Inc. of

following

1870's,

"Greenback"

years

' latter's

demand,

on

several

Iron

promoted

the

Connecticut

Feb.

fice

plans to build
probably
will
be
before
the
new
be used.

it

The

never

and

f

o

Insurance

and

present

no

that

Stratford.

this

to

has

and

written the latter
year by Herbert A.

last

in

the Ductile

day—it is
still 412.5 grains of silver 0.9 fine.
changed

the

in

V

-

on

Connecticut

news¬

acres

Deal

New

1792,

it

Americans like

fiction

26.

Bloomfield. Allen announced that

witticisms

silver, set by Hamilton and his

co-workers

we

28

of

tract

a

-

one

four

March

record

permit the

has

pub¬

state's largest

each

its office from Hartford to another

purchased

Times,

Hartford

The

paper,

a

occasion, there is more

on

than

truth

ing

as

and

head

socket

of

•

recently

has

screws,

from

Perfect Forecast

the "value" of the Dollar in terms
of

makers

pany,

vote

present

\

«

for

authorized capital

West Hartrord.

*

.

lisher of the

Facetious

announced plans

Manufacturing Com¬

The Allen

.

13, 1954.

#

•

.

directors

Company
23,
1954 on
proposals to accept the charter
changes passed by the State Leg¬
islature
in
1953. These changes
provide for an increase "in the

c

in

of

Life

General
will

Valley National Bank of Phoenix,

it is interest¬

Furthermore,

•.

_

15, Conn.

How to Write

present

un¬

held,

was

the

has

disguised under the

pearance
can't

raising of

of the coin

1615-

ing to state in this connection that

tion

589, Adam Smith makes this pro¬

Feb.

the

debauched the American dollar in
1933.

Haven

located

held

V

*

Chapel Street,

of the dollar from
grains of gold, in

inter-relationship
of the original

Dollar by

by those competent authorities: *

ex¬

to-1; and that had the effect of
raising the official price of gold
from $19.39 to $20.67 an ounce—
changed,

by 50%.

2009

be

share

Stockholders

42,000 square foot single

a

the

The stock dividend would be
pay¬
able April 23. ;

of

will

FREDERICK G. SHULL

New

shares

enable

stock dividend of

a

addtional

building, at an estimated
$500,000. The new plant

story
cost

the

1933,

instead

which

"devalu¬

be

in

over

to erect

will

which

to declare

1000, Inc. manufacturers

Curtis

was

minor change of the

a

gold-silver

another

of saying that

pure

—

1830's, in order t/o make

merely
way

*

its

at

*

of envelopes, has

producers

uct.

and
«

that the

hope

us

firmly

be

purchased

location.

that we, should
again "devaluate" the Dollar in
order
that they
may
receive a
higher dollar-price for their prod¬
gold

23.22

to

24.75

of

That,

of

which
with until

tampered

never

of

gold should be

his
given a

under
was

grains

gold, back in 1792

offi¬

the

of

"value"

namely,

1953,
that

"sound"; and,
leadership, the Dollar

issue

your

should

it

set

maintained—let

in order to make that cur¬

rency

in

been

.

management

currency

our

public will veto claims by selfish

"honesty"

claim he made

of

pay¬

Hamilton knew that

Alexander

an

Laughlin, President of Homestake
Mining

has

"value" of

the

once

poli¬

1933—all of whom
the principle that

to

has

Foods,

Inc.^of Santa
Barbara, Calif., primarily a pro¬
ducer of split pea soup. The pur¬
chase is part of Heublein's over¬
all expansion program in selected
food products. Anderson will con¬
tinue to operate under the same

men

monetary

our

to

subscribed

pretended

a

directed

prior

Heublein

F.

Anderson

of-the. war

eminent

those

by

cies

ment?"

of

Mr.

by

of

pearance

G.

light of such unanimous

the

opinion

by 50%, and thus constitutes a departure from the "sound
money" principle.
Editor, Commercial and Financial

pro-,

debt."

President of Homestake

be raised to $70

reasonable

a

orderly funding and-

liquidation

gradual

Shull, Connecticut State Chairman of the Gold

Frederick G.

out

carry

gram for the

CHAS.W. SCRANTON & CO.
Members New York Stock

Chronicle)

Calif.—Lewis

W. Hood is with Reynolds & Co.,
919 Tenth Street.

CONNECTICUT

Exchange

'

New Haven

New York —REctor 2-9377

Please send

me

a

copy

of the above Offering Circular.

Name
Address




(Special

*.

Hartford

With Oscar F. Kraft
to

The

Financial

LOS ANGELES, CalifC. Stan¬
ley Brittin is now with Oscar F.
Kraft

&

Co., 530 West Sixth

—

JAckson 7-2669

Teletype NH 194

Chronicle)

St.

_

.Volume 179

Number 5300

...

The Commercial and Financial Chronicle

(779)

Money is meaningless
...

unless It's In motion

Money in motion is
you

handle

every

money at

day have little

They have real value only
and services. A
medium
ment

of

work. The coins and dollar bills

as a

medium of exchange for goods

major force in keeping

exchange is

worth in themselves.

or no

money

credit,

consumer

or

in motion

as a

retail install¬

standards

is

credit's

service

immeasurable.

in

It

raising this nation's living
has

placed the products of

America within the financial reach of the

make those

products. You

can see

Company takes pride in being
viders of

as

an

aid

to

selling, and still

more

thousands of buyers

advantage of Associates' retail installment financing to

acquire ownership of automobiles and trucks. Dealers keep
Associates dollars
wholesale

at

work in yet

financing of their

another

new car

stocks. And

way,

through the

inventories and advances

on

financing.

Consumer

service
take

consumer

automotive time sales

and

women

who

why Associates Investment

one

credit—one

men

of America's leading pro¬
world's four largest

of- the

their used

at

work in the automotive field, further millions

into the economic stream

Thousands of automobile dealers of the nation

Associates'

use

beyond the multi-million dollars

to

business and

It's all money

economy

poured

through commercial loans

industry.
that flows,-moves, functions—money with

meaning. And 'Associates is proud to be

performs

are

through personal installment loans at

the home town Main Street level and

that

financing institutions.

car

a

a part

of

an

industry

major service in helping to keep this nation's

flowing, moving, functioning.
ROBERT L. OARE, Chairman of the Board

CONDENSED

ASSETS

Cash

and

CONSOLIDATED

31,1953

Dec. 31,1952

$ 66,684,776

$ 68,638,560

Dec.

Marketable Securities

SHEETS

LIABILITIES

Dec.

Notes Payable,

vehicle installment

motor

receivables

Common Stock Dividend

$434,574,458

$372,957,016

motor

vehicle short-term loans

44,610,537

46,860,479

Accounts Payable, Accruals and

Direct and

personal installment loans....

38,227,746

34,373,278

Commercial and other receivables.......

35,043,194

28,696,977

$552,455,935

$482,887,756

32,482,543

28,733,293

Reserve for losses

11,890,358

Total receivables, net.

10,392,105

$508,083,034

4,877,945

$581,436,354

CONDENSED CONSOLIDATED

$443,762,352

6,668,544

Other Assets

1,406,462

January 4,1954
Reserves

65,005,000

35,0^0,000

Subordinated Long-Term Notes

24,453,479

109,455,000

Long-Term Notes

37,500,000

.<$.

9,700,000

9,800,000

Common Stock

31,254,720

10,418,240

Surplus

38,165,301

51,069,123

$581,436,354

$517,278,857

Preferred Stock

STATEMENTS

Associates Investment

Year Ended
Dec.

29,234,615

33,192,386
25,970,185

$517,278,857

INCOME

11,700,000

........

Unearned Insurance Premiums

Less: Unearned discounts

Dec. 31,1952

$289,798,400

payable

Wholesale

..

31,1953

$285,592,300

short-term

Term Notes Due Within One Year

Receivables:
Retail

BALANCE

31,1953

Dec. 31,1952

Discount, interest, premiums and other income $ 91,014,968

$ 80,535,187

62,360,906

55,622,724

$ 28,654,062

$ 24,912,463

15,150,000

13,175,000

$ 13,504,062

$ 11,737,463

Company

Operating

expenses

Net income before Federal income lax

Provision for Federal income

lax

Net income
Consolidated

net

earnings

stock after payment
*

per

share of

Emmco Insurance

South

Corporation
Company

Bend, Indiana

common

of preferred dividends.

Adjusted for 3-for-l stock split effective March 27, 1953




Associates Discount

$4.19

$3.62:
COPIES OF THE 1953 ANNUAL REPORT

ARE AVAILABLE ON REQUEST

11

I

12

The Commercial and Financial Chronicle

(780)

to

Railroads Shackled by
Outmoded Regulation

I

emphasize
want

to

the five

ages of

1930 with

of

tons

The

President, New York Central System

obstacle

an

in which they

race

that

are

regulations and subsidies granted com¬
Points out, despite disadvantages, the railroads in

tradiction$: to

make

heads

our

whirl. For the
in

e

busi-

s,

man
n

of
the

s

*

course,
net
result

that
to

he

is
has

weigh

the

evidence,
make up
his
mind and

own

form

his

own

decisions

—

and, incidentally, make his
own

YViU&e&

;

t.t

mu

it should

economy, That s one of the things
that makes the economy free.

Actually, when you
siJt.al*
different? views, the most important

thing

that emerges is not a
at all, but a fact. " A
fact which pretty much squares
with your own private observation—namely, that this country is
still going forward and that whatever
your
individual timetable
for
readjustment
may
be,
the
prediction

continuing
on®

It

route of the future

<!' Progress.

This

is

a

that

means

gress

,

even

must

we

is

,

important

very

as

fact.

we

pro¬

for

prepare

to

raise

in

money

whose competitors enjoy not only
less restrictive regulation

but, in

direct

cases,

load

65%,

miles

ton

they

tonnage

of the time

1930

7%

over

in

1952

more

than

the

miles.

This,

of course,

be made

are

you

nancial aid from government and
from the expenditure of public

The

are

we

Postwar Capital

railroad

fur-

Briefly sketched,
situation

the

of

that

railroads

begining of the postwar
wasn't

at

the

It

era.

faith.

In

that

part

and

sometimes

it

has

Regulatory red tape has delayed
needed rate adjustments.

mental

harassment

couple of

big but

partment

of

billion

included

baseless

trust prosecutions.

$3

Governa

anti-

Then the De-

Justice

haggle,

threw

also

in

a

without

substance, over wartime freight
chargeSi which asUhis audience
knows> were lower than paid by
commercial shippers.

Nevertheless,
went

ahead

the

with

railroads

their

improve-

And this is an obligation that falls with particular
tveight on traffic and transpor-

ment programs which both the
expanding economy, the preparedness needs of the nation and

tation

As

a

and

of

railroad

railroad

pressive though it

incomplete story. It
that

it

what

We

should

that

say

be

concerned

reasonable

are

more

long-and-

We don't want the long-and-

ness.

short

haul

upon

The

restriction

highway

our

railroads

imposed

competitors.

ask

only that they
be given equal freedom.
(4)

The

Interstate

Commission

Commerce

State Com¬

(not the

of

the

fects

is

things

that

as

adversely

health

is

a

af¬

that when they can make a show¬

ing

con¬

that

operation

continued

cludes. I have listed only what the

continuing

of

certain trains is

railroads

have

done.

I

have

not

possible only at a
financial
loss,
and

increased efficiency listed the additional things which State Commissions either give ad¬
demanded. They built their prop- they could have done, and would verse decisions or take no action
to all economic progress—efficient
Physical c°n- have done if their hopeful ex¬ within reasonable time, that the
and economical transportation of dition *n their history.
What the pectations had been realized and railroads should then have the
goods and people.
if31ilroads have done since World fair play in transportation had right of appeal.to .the.Interstate
War II, with the cards of outpeople, because we are
dealing in something that is basic

Wliat the
As
men,

moded

Railroads Have Done

traffic

and

of

one

transportation
most

our

important

problems is planning to meet the
transportation needs of the future.

Speaking for the railroads, I

can

tell you

our

tjhat

problem.

Like you, we have been

busy working
of the

some

problem is

your

on

And here

it.

are

invested nearly $9 billion in capital improvements for Diesel loco-

subsidy

future,

yes,

but

especially faith that the arti¬
ficial obstacles in the
path of rail-

ppad^prosperity v would
moved.
To make

faith, the
part

of

working
capital,
pledged
their credit, mortgaged their fuand
their

taxed

revenues

tience

of

the

pa-

long-suffering

passenger
cars,
freight shareowners. And they did it encars,
modern yards,
shops and tirely in the spirit and with the
stations, improved signalling, and methods of free enterprise. At no
many other betterments through- time
was there any thought of
out the whole gamut of railroad
asking or accepting government
operations: that result in better subsidy.

motives,

to

service

creased
All

the

*

public

efficiency.
this huge

with

in¬

outlay

represents additions and betterments to

the

elude

plant.

It does not in-

greater

even

expend-

itures of the railroads for upkeep
of

equipment,

track

and

other

property.
in postwar
larger when

even

it

represents
the

that

railroads
when

the

But
,.

♦An

it,

80%

sum

net

Ciub

greater

income

off?
It has in many ways.
There has been a payoff for the
public in the greater efficiency

which has resulted from

improvement

abling

us

the

of

,

....

Chicago,

rates

Without

tistics,

being

serve

..

,

■

Chicago,




and

material

}

ill,,

for

which

getting

mired

in

sta-

The last year

complete

figures

are

Because of the

.

.

wa^ years and the depression

in

the '30s and also because I want
.i

L.

I.,1

\

u

Commission

that

and

have

should

agency

would

eliminate

the

(5) Along with

unreasonable delay which attends

peal of the

general freight

taxes.

ment.
users

built

rate

adjustments.

the
its

of

right

to

final

business

own

the

It

would
recognize
that
transportation facilities
with public monies must pay
fair

share

of

the

cial purposes.

cost

transportation

tax

recognize the

re¬

excise

need

of

but

revenues,

freight transportation
regressive tax, even though it
is only 3%, because it applies on

judg-; is

of

their

We

seek

you, we

the government for

man¬

exercise

using those facilities for

transportation.

from

of

on

a

every

material

raw

movement
finished

to

product in the hands of the

commer¬

con¬

The 15% tax on passenger

sumer.

I

we

that

railroad

out

to

and

you

to

improvements

give better service
other

our

would have been much

$9 billion.
have

If

you

handcuffs
do

an

done

will

off,

even

job the rail¬

with

help

we

handcuffs
us

get

will be able to

better

job.

On

than

the

Many of

car¬

in

transportation

you are

a

level

freight

no

or

at

higher

transporta¬

you

have heard about

advocates with

us

and

you

we

have

given and trust that you will lend
you, aid
until correction is had.

we

wiping regulation of

Because

think it is in the piib-

we

railroads off the statute books. It

lic

is

regulatory

statutes

cedures,

think that regulation,

important that

this

understood, because

be

clearly

people
who are opposed to any lessening
of governmental regulation
try to
some

•

we

to

modernize

and

our

pro¬

like the Constitution of the United

States, should be
*

i

interest

.'.

1.

t

.■*,

fair

and

that

<\r*

a

;

of

only fair
Everybody

play.

the

out

naive.

so

want

railroads

the

are

country and that they are neces¬
If we succeed then in mak¬

ing

stronger, healthier railroads,
public; interest is served, and,
Secretary of Commerce Weeks

the
as

aptly stated: "There are ways
getting good service out of the
strong; no one can get it out of
of

the weak."

About
A

"Piggy-Back"

word about

living things
-5

Service

piggy-back. It is

important to keep in perspective
the
in

potential place of piggy-back
the

over-all

railroad

Piggy-back isn't
a

Rather it's

panacea.

service

picture.

revolution,

a

nor

specialized

a

which

must

offer

tages both for

users

and for rail¬

roads

in order

to

be

advan¬

successful.

As many of you know, the rail¬
road I represent has opened the
door

for

cooperation

with motor

carriers in developing
service. There seems
mand

for

purely
there

who

it

on

piggy-back
to

enough

de¬

basis.

it
If

carriers

motor

that

use

be

approach

we

economic

an

are

can

and

service,

at a
price which will be advantageous
the user, and which will earn

to

fair

a

of profit for the
will provide the serv¬

measure

railroad,
ice.

We

we

have

piggy-back
do in

selfish

a

interest in

service, just like

we

competitive pricing, namely,

endeavor

an

That is not

moving by railroad.
only a legitimate goal,

it

responsibility of rail¬

ume

to

increase

the

vol¬

of traffic

is

a

management.

And

I

now

would

conclude.

I

direct your attention again to that

period

of

decision

for

the

rail¬

roads after the end of World War
II.

The

alternatives

Fortunately for the

appreciate the aid which

get rid of the shackles.

not

are

eliminated,

these things many times. Many of

tion at the lowest possible
cost, we
ask your support in our efforts to

mean

on

15%

a

tion.

ting the best possible transporta¬

By taking off the handcuffs

that

transportation

then

tax

is

ab¬

sary.

still

and

matter

a

That

equally

trying to put competing

effort to have the

an

least reduced to

the

been

common

is

all forms of

passenger

has

paying

are

Here

join in

can

basis of your own interest in get¬

don't

travel.

which
the

seen

years

all forms of

on

rier

..

You have
roads

tax

than

nine

customers

our

customers
more

almost

over

and

backbone of transportation in this

but

you

abolished.

railroads

rules

road

war

there

misrepre¬

contentions that the rail¬

are

agrees

World

The

use

public

that

would

nonsense,

The

discouraging civilian travel during
War II.

to

thereof,

with

earlier

who

business. We

or any considerable
portion of that time, I can assure

eight years,

cost

built

railroads

15% with the avowed purpose of

of

during

elect

full

our

the

past

effect

formj of

efforts by pretending that
seek to have all regulation of

play

in

is that

—

fair share of the cost

a

those

the

these

Had
been

yet has called

they

mentioned

fair

;
rules

Our conten¬

use.

whatever

facilities

transportation is not a regressive
tax; it is punitive. It was set at

brief

available is 1952.

play

en-

prices,

that

pious declara¬

jurisdiction.

Fair

on.

By

comparison will
to spell out some truly re¬
a

markable progress.
pro-

.

1954.

programs.

huge

modernization has kept railroad
rates on a level well below that
of general postwar price increases,

years

by Mr. White/before the

of

in

was

staggering

our

to hold down increasing
spite of the spiral of

wage

eight

......

-

truly

,,

looms

realize that

investment

addres*

Traffic

Feb.

:

.

invest-

progress
you

during the

the

made.

a

total

may

paid

costs

The size of the railroad
ment

question

Commerce

reality instead
a

tion.

carried

the

now

well be asked: has the act of faith

of

the railroad

And

into

enacted

remaining only

re- agement

their

ture

of

It would restore to railroad

be

large

a

been

more

their act of

used
.

last eight years the railof the United States have

and

America's, economic

railroads

things we've done.

In the

roads

regulation

stacked against them, stands as a
roonumcptal act of faith. Faith in

with¬

adequate

monies.

deficits

is

even

and

so

responsible

financial

facilities

one

the

of

does

well be

out

including
of

are

clause

advantage in competing for busi¬

an

of

pay

roads

This

no

transportation
shoud

forms

Act.

apply to motor carriers and
puts the railroads at a serious dis¬

im¬

to

competition

unreasonable

or

users

surd

from passenger service operations.
The
railroads
think,
therefore,

important than what it

unfair
the

the

™

ther progress.

tion—which

sheer

restrictive

of

fair

a

charge for their

the responsibility
pricing policies.
The railroads seek relief
assume

regulatory agency for the financial
well-being of the railroads. One

be, tells

paying

are

businessmen

not

have

and

which

so

government-built

Commerce

improve¬

may

leaves

the vol¬

missions)

progress,

may

business.

about

worry

upon

f<

result, the account
you

ments

rates

imple¬

little

seeking

are

long as some forms
transportation enjoy use of

short haul clause in the Interstate

the

are

compete

under

conditions

not fair

sent

from

mented.

given

of

non-discriminatory, but that
ability to attract traffic in

(3)

national
transportation
policy of fair play remains prin¬
cipally a high-sounding motto—

but

the

up

for their

declared

quoted

of

have to

railroads eight years ago are, for
the most part, still with us.
The

much

speed

The

ity of railroad management, just

handicaps
of
outmoded
regulation and unequal competi¬

who

you

to

conditions

like other American

remains to be vindicated. For the

As

only freedom

fair

volume should be the responsibil¬

still

seemed to grow less encouraging, tive
opportunities which beset

is

out

effect

or

capital

faith

meet

their

history. Its Undertaking
constituted, as I have said, an act
of

over our

merely

with whether rates

altogether encouraging serious

an

outlook

the

was

to

Interstate

Commission

regulation

improvement program has made

monies.

the

sion, be allowed to

struggling.

rails.

price

to

possible back

as

and what the railroads

of

the

Expenditures

intend

we

tonight know so well, this is
an age of fierce competition in the
transportation field. We think that
competition should have full sway,

rates;

of

would

ume

so.

postwar

quickly

the Interstate Commerce Commis¬

deficits,
in
vitally interested

and with which

in adjust¬

(2) We ask that the carriers, not

re¬

service

which

rate ad¬
elimination

on

process.

Much, I concede, remains to be
done with the basic problem of
passenger

the

to

on

are

it

service where passenger service is
or can

efficiency,

much business

Com¬

merce

unprofitable passenger train miles
and improving the standards of
profitable

regain traffic through
competitive pricing. Where rail¬

compete.

1926-

flects progress (which is essential
for us to continue) in eliminating

presently al¬

to

thority

period, but with 39% fewer

train

steps

substantially increased costs. What
we
seek "will not lessen the au¬

passenger

in

we

lag that has denied the

prices

your

limits

here

businessmen have

ing

train

service, comparing
periods,* the railroads

same

is what

railroads the freedom that most of
you

the

roads have the inherent advantage

*

"

(1) Quicker action
justments, including

increased

freight

per

remedies, here

ask:,.

125%.

miles

indirect fi-

or

regu¬

Through

lowed us, we are right now taking

as

In passenger

of stocks or bonds; an industry whose profit-making potential
is hemmed in by a wall of outmoded governmental regulation;

many

greater-

Within

and

which

Traffic

Competitive Pricing

of
As

day, increasing their
30%
and their net

per

speed

the

by the issu-

sum

that

beyond

goes

Regaining

/

Proposed Remedies

business

V?

,

unable

substantial

car

hour

earn-

regulation

and

lation in the public interest.

-

their

ance

Tila.ts

White

way

^

mistakes,

ings,

8%

train

it was made, and the faith which
it required. Envision, if you
will,
this picture: an industry with a

any

the

each

take shape only when we understand the handicaps under which

outmoded

regulating and

over

change with chang¬

ing times.

object

we

regulates merely for the sake of

cooperating in loading
heavier, the railroads han¬

train

outlay

long history of substandard

increase

44%

a

adaptable to

accept the principle of

to

was

do
We

regulation for public

over-regulation,

is

to

regulation.

service industries. What

annual

haul

want

we

all

period.

that net ton miles in

so

handled

billion

sensible

loading 25% fewer cars.
Getting 80% more work out of

policies; (3) repeal of the long-and-sbort haul
clause; (4) relief from state interference with passenger train
scheduling, and (5) repeal of transportation excise taxes.
$9

of

while

of their pricing

the

1952
more

However, by using
of greater capacity, and with

cars

nearly $9 billion in capital im¬
provements; thus showing "a faith in the future." Recommends
as
means of assisting rail
progress: (1) quicker action on
rate adjustments; (2) let the railroads alone
judge the effect

portions of

In

8%

appear

with

period.

dled

postwar period have invested

The past few months have seen
enough predictions, counter predictionS, maledictions and con-

1952.

it

don't. We

shippers

shackled by outmoded

petitors.

period 1926-

year

length

1952 showed

cars

put in

away

the year

average

greater,

are

make

aver¬

you

freight than the
of the 1926-1930

average

Asserting fair play in national transportation policy is "much
quoted but little implemented," New York Central executive
railroads

trend,

for

the railroads originated

By WILLIAM WHITE*

says

long-term

a

compare

Thursday, February 18, 1954

...

vate

"Put

were:

up

they faced
fold up."

or

cause

of

pri¬

enterprise, the railroads "put

up." They put

the tune of

to

up

nearly $9 billion of improvement
and expansion. They did this in
spite of a climate that was cloudy
with

outmoded
regulation
competitive subsidy.

and

Having accepted that challenge,
the

railroads

sented

be "ealled"

job

ask

now

with another.
on

they've

to

be

pre¬

They ask to

their claim that the

done

in

an

obstacle

is only a sample of what they
will be able to do if the obstacles
race

are

1

>

removed,
!

\'

i

.

■

t

"

i

^

r i
V

>'

>

-

*

!

Volume 179

Number 5300

...

The Commercial and Financial Chronicle

(781)

13

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sus

Safely the
The

same at

power

all speeds

same

in all hands

much

or

your

.

a

snow.

.

lightness with solid road feel. It takes away 80%
of the steering effort at all times. And, because it is

motion

consistent full-time power

of the

moment you
-i*

steering, operating

I

"

w

,

i

.

the

same

in all

part

of your driving

Wonderful

driving situations

coming

This intimate
makes for

as your eye on

knowledge of

car

your

tilings keep

your way

from

in

driving that is alert and yet

relaxed. Power steering at its

every

drive, it becomes safely familiar,

.

the road.
You always know what your wheel will do, at any
moment, at an)i speed* even in loose gravel or

Plymouth, Dodge,
Imperial is not here-at-this-

steering in

Soto, Chrysler,

the

.

speed, gone-at-that. It instantly lifts the weight of
the car from your arms
. coupling astonishing

polished best is
glittering

matchless features of the

one
new

Chrysler Corporation '54's. Won't you come in?

as
.

■

,

I

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*

*

i

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.

*

■

1

*

•

1

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1.

Dodge • DeSoto •Chrysler • Imperial—Dodge Trucks, Chrysler Marine & Industrial Engines, Oilite Metal Poivder
Products, MoPar Parts & Accessories, Airtemp Heating, Air Conditioning & Refrigeration, and Cycleiveld Cement Products
Plymouth



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14

The Commercial and Financial Chronicle

(782)

annual

anteed

Reflections

the

on

employment.

Guaranteed Annual Wage
Slichter discusses meaning and

history of

tions

annual wage

plan, and lays down as conditions that will make
it practicable: (1) the employer must have control of the

for

accumulated to

reserves

The

would

that

need

to

be

implement

the wage plan.
Points out under what conditions widespread
adoption of the guaranteed wage system will and will not
stabilize prices, and analyzes labor unions' proposals to have

unemployment compen¬
would be financed partly
pay-as-you-go

to

limited

reserves

or

amount.

the

to

met

If

a

and

basis

centive
Now

the

in

year

advance.

As

so

called

-

guara n t eed

annual

wage

plans

are

guarantees

of

employment,
rather
Sumner

H.

Slichter

than

guarantees

than wage guarantees.
The guarantees
may or may not
apply to all employees, and
may

or

termination

they
subject to

be

not

may

short

on

notice.

deed, most of the plans
inable
called

the

Thus,

paradox

"guarantees"

term¬

are

short notice.

on

encounters

In¬

limited

are

in their application and

of

one

of

so-

or

not

may

reserve funds

bility

The guarantee
be backed with

accumulated Tor the
the employer's lia¬

and

purpose,

may or may not be limited

to the amount in the

reserve

fund.

In recent years the term
"guar¬
anteed annual wage" has been un¬

critically applied to

a

dif¬

very

ferent type of plan—a
plan under
which

the

employer

supplementary

would

benefits

of his workers who

to

were

pay

those

drawing

unemployment compensation
benefits
men

under

state

compensation

unemploy-

schemes.

It

which

merely supplement
unemployment compensation, and
I

raised

traditional

think

that

I

cease.

the

shall

practice

discuss

should

both

guar¬

anteed

annual
employment
plans of the traditional

wage

or

sort

and

compen¬

sation schemes.

is,

the

tained

movement

unions

to

obtain

employment
nual

or

basis, and

exists

today.

sus¬

trade

guarantees

income
no

a

among
on

an

of
an¬

such movement

The

sort.

Second,

first

the

prac-

of

mini¬

some

of

employment or
income for a period of a year.
Since the principal traditional an¬
nual
guarantee plans were not
backed

by reserve funds,

assume

in

no

the

reserve

first

I shall

instance

that

for

employer

much

formed

him

is

what

not

not

he

to

for

it.

pays

traditional

type

presup¬

control in considerable

the

ure

plant,

meas¬

number

of jobs in his
(2) that the adoption of

or

tjie guaranteed annual
fairly wide scale will
the

total

volume

of

wage on

ployment that
lieu

of

a

stabilize

so

employment

and so limit the amount of

in

per¬

worth

either (1) that the employer

poses
can

pay

guaranteed annual wage

a

the

is

that

that

about

Hence,
of

labor

or

afford to

can

unem¬

large payments

no

work

for

or

work

of

little value will be necessary.

Let

ihe

examine

us

two

be

to

practicable.

dition

is

control

that

in

The first

the

employer

considerable

the number

of

con¬

can

measure

jobs in his plant.

This

is true of many successful
enterprises in non-cyclical indus¬

tries.

The

enterprise

successful

one—not

be

must

a

the

of

one

that hasitrouble

concerns

getting

business

and

first to

feel

drop in demand

one

any

of the last to feel

in demand.

few

that

employers

moderate

I

that

control

the

If

employer has little

on.

con¬

plant,

by

plan, were all initi¬
employers.
During the

last several years,
however, there
has been some growth of interest
in

so-called

wage

plans

guaranteed

by

the

few unions—the steel
automobile
♦Summary

workers,
of

annual

leaders

of

a

workers, the
the

electri-

the




number

the

of

jobs

practicability

in
of

depends upon whether the
widespread adoption of the guar¬
anteed

annual

wage

will stabilize

the volume of employment in the

community.
anteed

accumulated

and

was

in

amount

the

would

sort

cumulation

of

the

in

reserves

Proponents

annual

of

guar¬

employment

itself

stabilize

employment

how wide

an

do

the

not

volume

compute
adoption of the guar¬

ments
do

most

duce

of

view

periods of dropping
employment, and the net effect

the

would

be

is

which

would

reserves

limit

of

the

to

follow from

Whether

or

the tendency

the

not

The

the form

that

would

out of

otherwise

would

or

mean

that

the

form

of

for

unemployment
has
risen
in 1948 to $24.03 in

October, 1953, the ratio of benefit
payments to weekly earnings of
factory
35.1%
the

present
has

port
need

for

to

1948

Eisenhower in
.

has

workers
in

paid

saving

benefits

$19.03

been

out in dividends. All of this would

be

changed,

but

not

the

time.i

President

his

called

fallen from
33% at

about

Economic

attention

liberalizing

to

Re-

the

unemploy¬

ment

compensation.

the

cost

of

industry,
contributions, to the

would

us

problems

consider several special

associated

with

guar¬

soon

in the form of either

of

credit, and thus the tendency
for prices to rise would be limited.
Ill

The
union

pooling reserve funds; and (4) the
timing of the adoption of guar¬
anteed annual wage plans.
(1)
for

The problem of incentives

employers

unemployment.

to

avoid

creating

When contribu¬

most

important
current
proposals for a so-called

guaranteed annual wage, as I have
pointed out, take the form of sup¬

also

to

go

Although

unions do not argue
do very much
about cyclical
unemployment, I
believe that there are some indus¬
tries

which

in

employers

can

reduce cyclical unemployment. This possibility

moderately

about from the rise

comes

research.

dustrial

in in¬

The

great

growth of industrial research
that the managements of

means
.

companies are operating
backlog of unexploited in¬

many
a

opportunities.

vestment

held

ucts

from

back

They are

introducing

im¬

immediately in times of boom

by the fact that their enterprises

about capacity
changes which
would disrupt production without
losing orders.
Hence, in boom
times it is quite understandable
are

operating

and

cannot

duce

at

make

that industrial

research will pro¬

considerable

a

backlog

of

investment opportu¬
nities which may be put into ef¬
unexploited

"

ness.

Let

an

investment would be accomplished
more out of savings and less out

them

fect at the first down turn in busi¬

be passed on anteed annual wage plans; (1) the
higher prices problem of incentives for employ¬
ers
to avoid creating unemploy¬
or a slower rise in money wages.
Hence, the proportion of incomes ment; (2) the administration of
saved
during periods of boom supplementary unemployment
would be raised, the financing of compensation; (3) the problem of
reserves

for

in

|

wage were adopted by all or near¬

ly all of the firms in

incentive

an

provements in methods and prod¬

compensation

from

income

have

reinvested in the business

Further¬
possibility
the incentive for employers

the

creates

with

is

total

of

come

un-

bene¬

a

that employers can

public

liberal

more

compensation

—

ment

higher prices,
and the payments into the reserve
funds

for

contract

be bad for gen¬

particularly great in the
case of the higher
paid workers.
Although the weekly unemploy¬

fits

ratio of

If only a few enterprises had
adopted a guaranteed ahnual wage
plan, the cost would not be passed

in

need

employment

savings to incomes were increased
would depend upon circumstances.

on

as

be

culties.

liberalizing
with rising

inadequate,

can

expanding employment.
Proper design
of arrangements
for financing supplementary un¬
employment
compensation
can
largely avoid each of these diffi¬

employees and, in many states,
small enterprises are not covered.

guaranteed annual wage plans
increase the proportion of in¬
saved in periods of expan¬

to

is

sales

as

it

slow

compensation

unemployment

schemes

in the first half

consumers

stabilize employment will

to

Furthermore, the coverage

wages.

tendency of prices to rise in peri¬
ods of expansion. This result is
said

of

process

as

economic stability.

eral

Unfortunately, un¬
compensation bene¬

them has not kept pace

provide for the accumula¬

of

the

and

suggested that
annual
wage
plans

guaranteed
tion

1

stabilizing.

sometimes

rise

more,

fits have been low in most states,

It

employment

many cars
year

a

will

standpoint of stabilizing

economy.

induced by
unemployment

trend that would

and

sustained

is

supplementary
un¬
compensation partly
"pay-as-you-go" basis raises
important problems that I do not
have time to discuss. For example,
it creates the possibility that costs

increase of

of

union

suggesting

Financing

important both from the

point

in

however,

employment

a

from the

in

as

the

on

was

Personal incomes would be better

even seasonal
which
manage¬
substantially reduce. I
or

persuaded to buy.

$1 billion in the incomes of those
people who were thrown out of
was

some

compensation benefits not to pro¬

Nevertheless,

humanitarian

seems

intermittent

of

supplementary

be

work

It
are

believe that the

realistic,

that

an

minimize

to

that employers can be

the

billion

$133

as

to make greater

casual

can

not

were

about

of

unemployment,

year.

ac¬

or

plans who argue that fairly
extensive adoption of the plans
of

increase

un¬

unemployment,

billion dollars higher
The

em¬

union

seasonal fluctu¬

there

that

true

kinds

time

during recessions.

reserves

a

1948.

be

to

only a small percent of total wage
salary payments which at that

enterprises during periods of ex¬
panding employment and a reduc¬
tion in

in

so

even

reduce

to

ations in output of cars.

slightly

were

The

supplementary

areas

new

efforts

benefits
and

that

lay-offs, and

and

plans of

in

than

than

funds

reserve

schemes

state

scheme

more

reserves were

result

of

railroad

the liability of
limited
to
the

adoption

wage

would
a

American

the

type

talk

by Dr. Slichter
Management Asso¬
ciation, Chicago, 111., Feb. 15, 1954.
before

plan provided

wage

employers

the

amount. If the guaranteed annual

some¬

into

ing periods of business recession.
the small
recession of 1949,
under

stabilize

to

Union.

basis, would lead managements
plan the introduction of new
equipment so as to produce a min¬
imum of lay-offs, to plan the ex¬
tension or movement of its plants

consumer

unemployment insurance

incentive

be

to

seems

giving employ¬

to

In

the

be

en-

stabilize

employment compensation, if fi¬
nanced partly on a pay-as-you-go

and, under some circum¬
stances, they would increase the
propensity to save in periods of
expansion. Let us consider briefly
the effect of supplementary un¬
employment compensation upon
the size of personal incomes dur¬

adoption of

would

guarantee plans of the traditional

ated

would

widespread

which

Workers

believes

goods

re¬

a

of

his

the

of

a

their

about this later

say

the

to

volume

cyclical unemployment in
enterprises.
I shall have

thing to

the

pick¬

a

believe

can

extent

is

plan,

and

accumulation

different

of

guarantees of the traditional sort

over

plan,

Quite
effect

sion.

trol

Hormel

the

unem¬

will

to

employers

union

an

bile

supplement unemploy¬
compensation
would
be

the demand for

to

ployment is the United Automo¬

to

sustain

a

the traditional guaranteed annual

tions that must be met for annual

guaranteed annual employment or
wage plans, the Procter & Gamble

the

for

serves
and without limiting the
employer's liability would dan¬
gerously aggravate the severity of
depressions.

of

condi¬

and

services) to

comes

best-known

Nunn-Bush

equipment

contractual

employment.
that the

compensation

ers

postponable

minimum. Hence, the widespread
adoption of the guaranteed annual
wage
of
the
traditional
type

this
No

and

various

em¬

argue

supplements

The

stabilizing—they would help sus¬
(out¬ tain personal incomes in times of
lays for replacements for inven¬ recession and thus would
help
tories

unions

most interested in

Schemes of the sort proposed by

unions
ment

em¬

employment, and many employers
reply that employers can do little
or nothing about employment.

expenditures

Widespread

is provided.

to

would

and

stabilize

to

some

cpurage

ac¬

their debts

pay

suppliers,

non-payroll

without

guarantee

amount

mum

up

been

is¬

and

pro¬

many

proposed

ployer's liability would be limited,

,

to

pressed

not

were

be forced to cut their

strict meaning of the phrase—that

and

never

economic

ticableness of the guaranteed an¬
nual wage in the traditional or

mentary

has

to

II

marginal

There

wish

by guarantee plans of

consider

us

plans to supplement unem¬
ployment compensation, but I will
call the latter
types of plans what
they really are, namely, supple¬

unemployment

divided

I

I
wish to examine issues raised by
recent
proposals for unemploy¬
ment compensation.

is

obviously misleading to apply the
term "guaranteed annual
wage" to
plans

be

First,

of the

some

the

employ¬

income for twelve months
terminable at the will of the
guar¬
may

will

parts.

sues

Let

be

banks

remarks

two

discuss

or

antor at any time.

benefits

in¬

they should be called
employment guarantees rather

ment

My
into

and

come,

compensation

arise.

may

of

specific

a

ployment

a

matter of fact,
the principal

reserves

and

ployment

presumably to the amount in the
reserve fund plus the obligation to
cumulated
in
advance, even a contribute a given minimum per
small drop in employment would hour worked; (5) joint machinery
pensation schemes.
impair the liquidity of some em¬ for administering the plan (deter¬
cal workers (CIO), the packing¬ ployers
and cause them to cut mining questions of eligibility),
house
workers,
the
maritime non-payroll
expenditures,
thus with an impartial chairman to re¬
Meaning of Term
workers, some locals of the team¬ producing layoffs in other plants solve deadlocks, would be estab¬
The traditional meaning of the
sters'
union, and
a
few
other which, in the absence of reserves lished; and (6) some arrangement
guaranteed annual wage is that
unions.
There is no evidence of would find their
liquidity serious¬ for pooling the reserve funds and
the
employees covered by the
a
widespread desire among the ly reduced and would also cut the liability of the
employers
guarantee will be given a mini¬
rank
and
file
that
the
annual their
non-payroll
expenditures. would be established. The pro¬
mum
amount
wage demand be pressed in pref¬ Furthermore, in the absence of a
of employ¬
posal that the scheme be financed
erence to other possible demands.
limit on the employer's liability,
ment
partly on a pay-as-you-go basis
or
a
If unemployment becomes fairly
any
dip in employment would is intended to give employers an
minimum inserious, a strong rank and file de¬ seriously impair the credit of the incentive to stabilize employment.
come
for at
mand for supplementary unem¬ weakest firms.
These firms would
least a

employers supplement unemployment benefits.
Concludes a
better plan would be to liberalize state
unemployment com¬

years

opposed the

employers
agreed to the idea on the ground
that the employer needed an in¬

additional

small

some

in

amount

rating"

few

a

on

ployment,

partly by the accumulation of re¬
serves; (2) employers would con¬
tribute a given amount per pay¬
roll hour (or possibly a given per¬

widespread

be

debate

the ground that most
ployers could do little about
posal

supple¬

on

condi¬

two

"merit

"experience

or

under

principal points: (1)

adoption of the
guaranteed annual wage to stabi¬
lize employment are (1) that em¬ centage of payrolls) to a reserve
ployers
accumulate
reserves
to fund; (3) benefit payments would
meet
their
liabilities
for
wage be paid to laid-off employees (or
payments under the plan of the part-time employees) in supple¬
guaranteed
annual
wage,
and mentation of unemployment com¬
(2) that the liability of employers pensation benefits; (4) the em¬

number of jobs in his plant, and to some extent eliminate cycli¬
cal unemployment; and (2) that the liability of employers be

limited to the amount of

conditions.

other

compen¬

upon

ago, most unions

sation

is correct under some
conditions
apd
incorrect
under

guaranteed

a

based

workers involves the follow¬

ments

ployment

Lamont University Professor, Harvard University

unemployment

funds

ing

the

guaranteed annual
would tend to stabilize em¬

wage

By SUMNER II. SLICHTER*

Dr.

of

were

to

sation

bile

The view that widespread adop¬
tion

rating"

tail. The proposal of the automo¬

stabilizing

significant

tions

plements to unemployment com¬
pensation. The union proposals
have not been spelled out in de¬

would be
produce a
effect on

wage

order to

in

necessary

Thursday, February 18, 1954

.

1 Social

Security Yearbook, 1948, page
Security Bulletin, September,
1951, page 29; and January, 1954, pages

28;
22

Social

and

26.

The

of
manage¬
changes in
methods and changes in products
ments

willingness

to

introduce

during periods of contraction will
depend
upon
circumstances.
If
managements for any reasons feel
a

strong need to increase the li¬

quidity of the enterprise, expendi¬
on improvements in methods

tures
and

on

the

introduction

of

new

mini¬
mum.
Supplementary unemploy¬
ment
compensation can be ar¬
ranged to have some influence
upon managements' willingness to
products will be kept to a

introduce

products

new

methods and

new

during periods of busiCnntinued

on

naoe

37

Volume 179

Number 5300

...

The Commercial and Financial Chronicle

(783)

If your name

is Smith

I
If
often

as

there's

is Smith, and

your name

Jones,

find yourself introduced every so

doubtless want to set the record straight. Not that

you

anything

you

with the

wrong

name

Jones, but you'd much rather be

known by your own name.

Well, Socony-Vacuum finds itself referred to every so often as a
Standard Oil Company. And
not

a

we'd like to set the record straight. We

Standard Oil Company, though we once were-a long

\

.

•

The Socony-Vacuum
between the Standard Oil

Company. There is
and

no

Socony-Vacuum

Horse, and
i

our

a

a

a merger

the words Standard Oil to identify

subsidiaries have
are

as our

emblem the Flying Red

Mobilgas, Mobiloil and Mobilheat.
...

,

■

fact that many years ago

.

-

f

v

before most of

you

had

ever

bought

gallon of gasoline-Vacuum Oil, Standard of New York, and some other

oil companies were a part
dissolved

posing it

in

launched

some

of

on

our

officer

cers or

or

of the companies

their separate and independent

ways.

was
com¬

We

now

most aggressive competition.

None of the officers
an

of the old Standard Oil Trust. That trust

1911 by the Supreme Court, and all

were

find in them

is

uses

.

,

It is

.

Standard Oil Company of New York,

any

principal products

*

ago.

Company of New York and the Vacuum Oil

longer

its products. We and our

time
.

Oil Company resulted in 1931 from

longer

no

.

are

or

directors of Socony-Vacuum or its subsidiaries

director of any Standard company. And none of their offi¬

directors is connected with Socony-Vacuum.

There isn't anything wrong
Jones. But like the fellow named

with the

Smith,

we

name

Standard

or

the

name

just wanted to set the record

straight. We're the Socony-Vacuum Oil Company-an independent enter¬
prise, strictly

on our own.

SOCONY-VACUUM




OIL

COMPANY, INC.

Makers of Mobilgas and Mobiloil

15

16

(784)

The Commercial and Financial Chronicle

/

sufficient
of

loss

In

Lowering of reserve requirements
would undoubtedly stimulate pur¬

governments as well as

chases of

the

by

securities

tax-exempt

of

commercial banks.

policies of the Re¬
authorities could also re¬
credit

The
serve

passive and still have a fa¬
business ac¬

main

vorable influence on

sinking fund opera¬
outstanding bonds pro¬

Moreover,
tions

on

vide

for

of
bond¬

repayment

constant

outstanding debt to present

forced to

holders who in turn are

THE MARKET... AND YOU
WALLACE

By

therefore, play
important role than in

more

normal periods.

play in a handful of bid for the outstanding stock
situations simmered from Howard Hughes, con¬
down this week after giving tinued to dominate activity
brokers some points of inter¬ although its price action was
It appeared in some
est that all but Gbscured a modest.
The

The forces of inflation have run
their

The

course.

created

demand

pentup

great

the

by

and

war

The

has been met.

its aftermath

special

productive capacity of the country
is greater than ever before and as
a
result competition is keen and
market that, generally, was a
is likely to become even keener
bit tired.
And once the en¬
in the immediate future.
More¬
over,

of

a

outlets for their

new

had

its

run

=SC

the

Similarly,

market, the supply of
an
outlet in the
market is usually as great as, and
often
greater than, the demand
in the open

seeking

funds

for

capital.

new

Capital in 1954

in 1954

demand for capital

The

the

will be substantial, but unless

large

government operates with a
deficit

offers

or

considerable

a

long-term government

amount of

The demand for capital by

1953.

be somewhat smaller than in

the

have been
large scale since

expenditures

carried out

on

a

the

of

end

and the pro¬

war

of the country is
Under these circum¬
may expect, particu¬

ductive capacity
indeed great.
stances

one

larly in view of the fact that the

is in the midst of a re¬

economy

adjustment, that capital expendi¬
tures in 1954 will decline some¬
Should

what.

tem

the

Congress

pass

provisions, the demand for mew
capital
from
external
sources
could be further decreased.

with

operate

large volume of

a

reserves.

subject to

number of influences.

a

is bound to be large. It is
generally believed, however, that
unless measures are taken by the
gages

Administration to stimulate home

number of home
starts in 1954 may be less than in
1953. The volume of tax-exempt
securities
will also undoubtedly
the

building

be

particularly

great,

Administration

the

since

will

probably

leading to a decrease in

caused

banks

the

in

terioration

working capital. One may there¬
fore conclude that during 1954 the

larger buyers

will

contribute
in

trend

Thus, the conclusions that could
reached

be

interest

on

ward.

is often interrupted by

Congress which, of course, no one
predict.

can

The money and

capital markets
will also be greatly influenced by
the credit policies of the Reserve
authorities and
ment

the debt

manage¬

policy of the Treasury. The

short-term

cyclical swings, in the period im¬
mediately ahead
the cyclical

nounced

tively small deficit for the fiscal
year 1954-55, actual size of the
deficit will depend on actions of

are:

is still down¬
Although the secular trend

securities
yet unknown. Al¬
though the Budget Message of the
President envisages only a rela¬
as

rates

The long-term trend

just

government

its

of

impact

of

part

it

1953

pronounced

1950 has

around the middle of

in

to

come

end and the long term

an

has resumed

trend

downward

its

The trend of interest rates

course.

downward, brought about pri¬

is

marily by the enormous volume of
individual
It

is

for

economy

1954

in

smaller

may

in

than

Administration

able

is

visable
bonds

to

more

side.

up

acquire

now.

This

could

It could

ing

of

which
serve

several

assume

forms.

be in the form of lower¬
reserve,

would

increase

balances,

aggressive
followed
reduction

requirements,

or

excess

through

re¬

more

market operations
accompanied
by a

the

on

far,

period of continuous increases in
individual
and
corporate
taxes
seems

to

have

Based

on

the

on

to

come

end.

an

growth in

rapid

population, the steady rise in the
standard of living, and the huge
spent

research lead¬
of new prod¬

on

ing to the creation

ucts,

one

is warranted in the

conclusion that the uoturn which

in, once the present read¬

will set

of

the

discount




rate.

the

Moreover,

issue

the No.

to

it
1

spot for activity so far this

despite the play in Cen¬

year

tral.

m
ijt

ffi

%

Central

Illinois

was

an

not

an

1931.

since

seen

such

After early feature of the week, due

achievement

bit of

a

to

mixup

a

dividend

its

in

,

reaction is

normal, particu¬ meeting late last week. The
larly since February is by
company's directors declared
tradition the year's poorest
a

the

regular dividend

month, and tax time, which

there

first

item

their

the

on

as

the

agenda at

meeting and the infor¬

mation

made available to

was

support levels near¬ publications. In the late trad¬

are

pro¬

Under

is

the

early

part of 1953, then shorter term
obligations will become more at¬

(Special to The

of
Investments,

Company

oflces

Inc. has been formed with

Heard

Francis

Building.

recently
been President of Kirby L. Vidrine
firm.

&

based

of

trust
reason¬

on

judgment, which involves an
analysis of the economic forces in
chasing

So

power

long

as

of the

the

Mr.

is

in

principal

Rogers

and

Co.

partner

a

prior

of

the

has

thereto

Woodward,

was

Rogers

a

&

Zuber.

were

pri¬

stable, trust companies

marily concerned with the
vation

of

the

dollars and
return.

obtaining

When,

as

inflationary

war,
and

estate

a

in
a

preser¬

terms

of

dollar

tended

mere

officers

to

reasonable

pressures

Schwartz

has

D.

C.

a

an

that

the

estate in

in

one

present man¬

trading had ended for the day.

the

bare-fisted

Trust

formed

Building,

to

A.

N.

A.

N.

engage

in the securities business.

some

of the buy¬

was

the

CHICAGO, 111.—The Board of
Governors today elected Kenneth
J. Brown of K. J. Brown & Co.,

Inc., Muncie, Ind., to membership
Midwest

Stock

Exchange.

*

*

by the embattled in¬

Aircrafts

too

the

on

Fly High

For the stocks not

of free riders

group

market

two

keyed in with

factions happy

powerful

the

carries,

only

ing the issue
day became

to two and

a

an un¬

except for some of

to

forge ahead into

trading outstanding
a

half hours before

struck.

But

a

new

high

This issue,
as

respect.
as re¬

1951, reached

a new

all-time
above

this

in

split 2-for-l

par

high

comfortably

and

within

easy

loss of a point recorded for the old stock.
quickly which, too, There aren't too many issues

of the hardest

handlings

the issue has had this year.
*

*

RKO Still Leads

already

on

record

among
that

recently

split

those

are

selling

around the

pre-split level today.

Activity

RKO Pictures, with the
rectors

was

Open¬ ground. Douglas Aircraft was

something of

was

develop¬

news

buyers stepped aside reach of the best price ever

showed up
one

any

one

directly

the aircrafts which continued

delay running close cently

one

the balance

is

on

the

way

issue could go was up.

chore,

opened
so on a

hop of four points.
*

ing

-4t

Midwest Exch. Member

in

week, it did

new

fight with him.

Undoubtedly

Opens briefly,
—

Schwartz & Co. with offices in the
Union

set in

decline, invest¬

realized

preservation of

WASHINGTON.

by the

agement in the other, vowing

result of the

the purchasing power of the

ment

A. N. Schwartz Co.

was

But

reported, stock

was

When Illinois Central

when the

pur¬

dollar

Corp.,

and the

Chronicle)

Ariz.—The First

PHOENIX,
Arizona

Financial

the

policies

Alleghany

corner

looking for the votes the stock

Rogers

are

of

with

C.

companies

time this

beautifully simple logic that ments, the week

Firs! of Arizona Go.

the

Conclusion

agenda and voted for a 2-for-l
recommendation.

in

in

Investment

was as¬

sured, with Robert R. Young,

congested

1953.

tractive to

buy and to hold until
abnormal swing has passed.

pitched battle

a

over,

long-term

in

once

will bring the
economy
to
new
higher levels terests, but there was a rather
than -prevailed
at the peak of

justment

it went too

as

side

up

open
or

made.

was

lifted

to

growing and that the

is sound and

Should the downward

swing go too
far

operation.

particularly if
accompanied by an increase in un¬
employment, is bound to lead to a
more
aggressive
credit
policy.

it

operate

such circumstances it appears ad¬

state of business activity. A down¬

business,

the market value at the time

cou¬

be

1953.

able

in

a

savings.

corporate

capital by

the

on

usually withdraws funds from
the market, is approaching. In
the private sector
addition, on a technical basis

and

somewhat
If

the

to

Hughes figures out to $6
share, which was double

slow-moving

likely that the demand

also

the

points

the

utilities had tacked

swing which set

cyclical upward

Even

a

ple of points to reach levels

The

in the early

as

was

the

on

policies of the Reserve authorities
will be guided primarily by the
turn

rails.

move¬

rates.

nine

around

utmost

the

on

interest

amounts

rates.

money

the downside,

is

downward

the

to

adopt measures to stimulate pub¬
lic
works.
What the supply of
be

This, too,

of securities than before.

more

will

the de¬

by

quality of the

the

swing will be

long-term

the

Mr.

by which, if they hold, will ing of Friday the wide expec¬
within the budget pro¬
loans are, briefly: (1) the decline posals of the President for the minimize any temporary set¬ tation of better treatment or
in busines activity; (2) the effort coming fiscal year, new borrow¬
back.
a stock payment led to some
to liquidate inventories;
(3) the ing by the Federal Government
will not play an important role in
repeal of the Excess Profits Tax;
selling that depressed the
The Excitement in Central
Debt man¬
and (4) the possibility that con¬ the capital market.
stock more than three points
And MOP
sumer
credit may decrease.
The agement, however, can influence
forces that may lead
to an in¬ considerably the trend of long
at the worst.
Subsequently
term bonds. ,
crease in the volume of loans are
Biggest excitement was that
the directors took up the stock
In considering the longer range
the possibility
of increased tax
in New York Central.
The
borrowing as well as greater de¬ outlook it is advisable to bear in
split further down on their
was
bought actively
pendence by industry and trade mind that the Aemrican economy stock
The forces

banks may become

(2) The demand for home mort¬

be

had

ment

of

loans will

for

demand

The

on

legislation modifying depreciation

the banks. It is

likely that the banking sys¬
as a whole will be willing to

excess

corporations in all probability will

balances will
increase in the demand

securities by

not

considerations:

be influenced

tional excess reserve
lead to an

equities

of

of

The decline in business activity
has

largely by the policies of the Re¬
serve authorities and the demand
for loans. The creation of addi¬

not be

ing obligations, it should

larger than the supply. This con¬
clusion is based on the following

of

policies of com¬

banks will

factor

a

importance.

Commercial Banks

mercial

selectivity

economy

becomes

Investment Policies

The

for

Capital

investing.

late lending and

securities in exchange for matur¬

(1)

order to stimu¬

ket comfortable in

The investment

The Demand for

large blocks, including 45,000,
21,000 and smaller ones,

thusiasm in

the economy is in the midst
readjustment which, while it

funds.
amortization of
specific measures the Federal Re¬ values and undermining of old
It wasn't particularly omi¬
mortgages supplies a growing sup¬
values.
Under present conditions,
serve authorities may adopt, it is
ply of funds seeking an outlet in
nous that the list was able to
fairly certain that so long as the therefore, the pressure of invest¬
new
mortgages. The capacity to
ment officers to invest in secur¬ back
economy is in the midst of a re¬
up rather easily.
The
save in the United States is great;
adjustment and is not operating ities that may provide a hedge reinvestment demand in Janand hence, except in periods when
at capacity and there is consid¬
against inflation is not as great as
business activity is very high and
u a r
y
had added some 14
erable unemployment, they will it was up to the middle of 1953.
the government is operating with
endeavor to keep the money mar¬ On the other hand, in a dynamic points to the industrials and
a deficit and thus has to
borrow
seek

STREETE

special situations which, however, does little to
course, the list detract from last week's mam¬
counteracting the return flow of may not last long nor be very ser¬
sagged into the worst one-day moth 200,000-share appear¬
ious, can have an adverse effect
currency from circulation or an
inflow of gold or the conversion of on earnings of corporations and loss recorded so far this year, ance. Next step in the deal is
hence on values of equities.
The a trim of almost three points for stockholders to approve
required reserves into excess re¬
serves
brought about through a economy today is perhaps more in the industrial index.
the
plan at a meeting on
reduction in the volume of com¬ dynamic than ever before, which
*
*
March 18. The offer made by
mercial loans. Irrespective of the means constant creation of new
tivity. For example, the Reserve
could
refrain
from

authorities

capital.

of the
important
planning.

an

estate

trust

equities,

prices,
more

increasing role as an
internal source of capital; land if
the Congress should ease the de¬
preciation provisions of the In¬
ternal Revenue Code, it will be of
even
greater importance in the
future. It therefore appears that
corporations, as in the immediate
past, will continue to depend to a
large extent on internal sources of

against

power

became
in

not

was-

period of rising commodity

a

a

alone

protection

purchasing

function

Transition Period
an

and

currency

During

Trust Investments

playing

dollars

of

terms

9

Continued from page

Thursday, February 18, 1954

...

*

❖

if-

di¬

Stalwarts like du Pont and

ap¬

General Electric haven't been

proving the acceptance of a having too good

a

time of it

Number 5300

Volume 179

...

The Commercial and Financial Chronicle

(785)

"

i

Rails

failed to take dip to the 100 level, which is seen
developments, is that the view of the income tax:
leadership right a couple of points below the two major groups might well weight, shortly to be felt.
the way of a lift, at least along, and were still dawdling poorest of this week, without
[The views expressed in this
test these levels before any
article do not necessarily at any
when measured against some some nine points below the violating any of the technical
time coincide with those of the
of the gains it achieved mere¬ 1952 high when t he indus¬ indications. The majority worthwhile advance is carved
Chronicle. They are presented as
trials broke out. They could opinion, barring any unfore¬ out. This is
ly on hopes in recent weeks.
especially true in those of the author only.]

recently. The higher dividend
provided little in

for du Pont

General Electric,

which

over

have

17

the

was

clipped by profit-taking occa¬
sionally but only after a day
of outstanding strength, put
one

back

losses

sizable

two

back for

to

of the more dis¬

appointing performances.

A REPORT

*

*

*

Chrysler, too, continued to
going heavy. Decla¬
ration of the regular quarter¬

to our nine million

find the

ly payment, which was a bit
unexpected in some quarters,

policyholders who have added to their

special
popularity for the issue which
is selling at around a 10%
yield and indicating some

personal and family security through

didn't

generate

any

widespread doubt over
the size of the next payment.

rather

John Hancock life insurance

yield is roughly double

The

of

that

the

in

issues

other

.

.

.

quality secticfi of the list. The
pattern—so far—is about sim¬
ilar

Studebaker

of

that

to

STATEMENT

OF

FINANCIAL

CONDITION,

1953

31,

DECEMBER

couple of regular
dividends were declared, sur¬
where

a

prising the Street, before the
came along. The

inevitable cut

S t

that

is

difference

u

d

ASSETS

e-

Long

division

seem

isn't any

all

discussion

all reached

r

i t

o r

taken

as

Farm

.

.

real estate
.

.

.

.

and

Foreclosed

properties

.

.

577,295,491

in

a
down¬

Loans and liens

on

yet re¬

'

paid in advance of due date

reserve

30,060,776

.

.

required by the National Association of

Insurance Commissioners.
taxes

payable in 1954

i.

.

.

13,889,000

.

obligations, including accrued

Other

68,027,572

26,950,434

[.expenses

480,806

Company's policies

Total

Obligations

.......

3,515,026,645

102,313,156

.

SURPLUS
Cash in banks and offices

not

79,545,265

Mandatory security valuation
68,508,378

low ter-

new

for claims

reserve for ultimate changes
policy valuation standards $45,500,000.

Accrued

.

of settlement

process

sum

54,807,983

28,246,830

.

.

$34,045,265 and

office, Housing and
properties acquired
....

policyholders in 1954

policy obligations

Premiums

720,791,544

*

for investment

additional

an

Other

143,496,053

.

to

ported.

.

.

payable

Including claims in

71,914,944
117,918,974

on

en¬

Policy benefits in process of payment

As

other

Lig¬

TO

POLICYHOLDERS

59,874,726

.....

Contingency reserve for Group Insurance

hill.

Premiums due and deferred

*

*

*

Chemical issues were more

Despite the ob¬

puzzle.

a

vious benefits for them
end to the excess

and their

the

Dividends

766,378,161

estate

Home

Philip Mor¬

rather concerted drive

of

Guaranteed

^60,105,341

.

.

dowments and other payments, including
dividends left with the Company at interest.

233,321,726
1,079,709,059

.

$3,021,421,016

......

Proceeds from death claims, matured

189,833,918
or

reserves

determined in accordance with,,

Policyholder and beneficiary funds

a

simultaneously,

y

117,978,155

Residential and Business

Real

than American Tobacco,

ris

.

utility

Mortgage loans

signal to unload and no less
gett & Myers and

.

lively

the discussion is also a
was

.

over

has
smoking on any wide¬
spread basis. But the fact that
overseas

12,434,651

Common

cut

one

.

......

Preferred

conclusive proof yet
the

.

Stocks

There

and lung cancer

tobacco

4,997,396
.

amount

legal requirements which will, with future
premiums and interest, assure payment of
all future policy benefits.
'
■

.$ 398,484,469

.

.

Industrial and Miscellaneous

unable to build up much

investor confidence.

that

Public

shares, too,

cigarette

.

...

Railroad

Tobaccos Go Downhill
The

.

State and other civil

*

*

Statutory policy
The

term

Dominion of Canada

amply covered thus far.
*

term

Short

the earnings while
of Chrysler have been

by

those

$2,613,303,617

United States of America

baker's dividends weren't cov¬
ered

OBLIGATIONS

Bonds

in

Interest and

rents

56,923,273

due and accrued

32,392,769

.

.

General
Other

an

surplus

Total

Surplus

$3,852,715,520

profits tax,

49,360,000
278,033,875

8,774,139

Total

Obligations and Surplus

assets

Total Assets

10,295,000

Contingency reserve for fluctuation in
security values | .
.

337,688,875
.

.

.

$3,852,715,520

premiere position as

growth industry of them

All securities

are

valued in conformity with the laws of the several States and as
Securities carried

little

all, the shares have had

$610,630 in the above

at

of a following to
sustain them recently.
They

prescribed by the National Association of Insurance Commissioners.

statement are

deposited for

purposes

required by law.

in the way

have, consequently, been

DIRECTORS

able

easily

Samuel Pinanski

Georges F. Doriot

William M. Rand

Ralph Lowell

Philip H. Theopold

Lloyd D. Brace

Carl P. Dennett

Edward Dane

Karl T.

Olen E. Anderson

*Lee P. Stack

Albert M.

Creighton

Daniel L. Marsh

Thomas D. Cabot

E.

*Earl P. Stevenson

Joseph E. O'Connell

Byron K. Elliott

Merrill Griswold

Edward B. Hanify

on

have been labored ones.
*

*

John M. Hancock

Guy W. Cox

weakness in
the market generally and ef¬
forts to recoup the lost ground
to slide

Paul F. Clark

Charles L.

.

Ayling

Compton

Taylor Chewning

*1Elected February 8, 1934

*

Technical Aspects

Technically, the market is
still in middle

ground. Any
high of

reaction after the new
294.03
that

for

was

a

score

of years

month could get a

INSURANCE

MUTUAL/LIFE

recorded early this

testing at

BOSTON,

around the 285 level. Inciden¬
■

*

"

*

'

•

tally,

several

of

the

yet to
accomplish the break-out and
confirm the new high of the
Dow industrial measurement.
stock

averages

have




'

other
A

COPY

OF

THE

COMPANY'S

COMPANY

MASSACHUSETTS

COMPLETE

i

1

_

REPORT

WILL

BE

...

SENT

ON

REQUEST

18

The Commercial and Financial Chronicle

(786)

On

deposits.

Shifts in Bank Deposits:

posits

1940-53

held by the New York
Last year, on June 30,

Co., Inc., New York City

M. A. Schapiro &

lion

shift in growth of bank deposits
West and South and away from metropolitan cen¬

Bank stock analyst traces,
toward the

have altered the relative position

of traditionary

money

Reserve Cities, in which

banks

cash reserves, is no
The

relation

In

theories

,

Is it

!rQ°«

legislators and

graphical and historical consider¬

the [monetary

ations.

e

r

t

in

is

s

e

banks

no

banks

Morris A. SchapirOi

longer con¬
centrated
i n

serve

itouridAn
the

the?acfthat

is
managers ot

and
ana,

Massachusetts
Massacnuseus

trpnd
trend

thi<?
this

ratio.

with

commensurate

banks

,in

the

effect,

this

Federal

burden',

Reserve

f

uLtion'has "now! aucea

'iX'toTee Percent

"miru
•
--f • P"rc.e.m.
aSe P°ints- The disparity remains,
Fe(*eral Reserve Banks; however, placing a penalty on

now

portfolios. In line with

New York

d°minating the "money market and Board'Teknowledged ^7his"unfair^ffies^o^thel 'baVkt1 ^ laSt JU'y Whe" thf di^rity

county's institutional fur^s
greatly diversified.their.

have

bank stock

"central"

truly

on

require¬

traditionally strong deposit capital
No important monetary or
credit control purpose is served

City and Chicago

city members because they
then

were

tEasttl°lEvidencey ofthis

the

Classifications

classified Central Re-

were

unfairly

,*mnortant

lp

day

hppaucp to

cagh

ho

reseryes

.

>

f

£

because of

oosition

a

P

Social, eco-j
to permit savings bank investment
nomic, and political c h a n g e s
The New York Clearing House
in shares of out-of-state banks.
accelerated by industrial decen¬
Association in its p e n e t r a t i' n g
tralization and population shifts,Growth Since 1940
•
study, "The Federal Reserve Re-;
have altered the relative position
Since 1940, deposits of all mem¬
Examined," recently took cogni¬
of traditional money centers.
zance
of this changed situation.
ber banks have grown $91.1 bil¬
The bulk of inter-bank balances "The uniform reserve requirelion, from $51.9 billion to $143.0
billion
in
1953, an increase of is no longer held by New York; ments plan," the Association states
175%.
And, this growth in de- City banks.
Since 1940, domestic * jn this authoritative analysis,
the banking system.

,

i

^

accompanied bank balances held by all banks "made its first public appearance
jn 1948 a§ the result of the work

posit totals has been

shift of funds into new areas rose from $8,987 million to $10,980
of industrial activity and popula- million.
The proportions held on
by

a

tion expansion.
The

:

.,

-

shift to

deposit

0f

Reserve

a

System

corri-

staff

June 3.0,-1940, and June 30, 1953, mittee which had been appointed
the West changed as follows:
to study the -general problem of
•

-

and South is indicated

by the de-

cline in the percentage

of national

Reserve city members,

Central

New York, from 42.7%

member

to 27.2%.

banks

ments."

reserve

require-

The plan would drop

ex-

deposits held by the- member
banks in the first three Federal

city members,
Chicago, from 10 6% to 10 7%

isting classifications of cities and
portions of cities for reserve re-

anri

Reserve city members, fronV

foment purposes; provide three
.cash reserve percentages, one

New York,

tncts—Boston,

and

Philadelphia, the combined total
of
deposits held dropped from
48.74% of the country's deposits
in 1940 to 35.27% in 1953.

period, deposits' in

the

During

Northeastern

these

districts

rose

Central

40 4^
•

'

Reserve

+n so 40/

0

'

,

against

-

.

demand

deposits

(except

The Reserve city group^showed due
banks), one against time
an actual inciease of 58.4% in deposits and one against intertotal domestic bank balances held; bank deposits.
Chicago 24.2%. New-York City, Clearing House

J}°wever> suffered

decline of

a

The New

that

ommended

Yor-k

Association

rec-

vany

legislation
requirements should

increase of $25 22.8%.
;
on
reserve
billion, or 99%. In the other nine
Further, in New York City and recognize that geographical'difdistricts, deposits advanced to Chicago, inter-bank deposits have ferentials are no longer, useful or
$92.6 billion, a growth of $66 bil- shrunk in relation to their total necessary."
lir.™
U*. OAQOL
.........
;
f
lion, or 248%.

to $50.4 billion, an

.

1 j.

Deposits of Thirty Largest Banks

...

New Money Centers

I

(in thousands of dollars)

Concurrently, with this diffu¬
sion of deposits, banks in the

Head
BANK-

137%

counts

to

$6,485 million

on

On this date, their
capital represented 57.7% of all
member bank capital, compared
to 48.8% in 1940.
Clearly, new
Sept. 30, 1953.

centers have taken root,
and competition among all banks
money

than

is

This

situation

ing

even

national
had

in stature.

total
serve

cities since

been

develop¬

New York

gained

City.

address

5,062,000

43

6.

Continental Illinois National Bank

Chicago

7.

Guaranty Trust Co.___

New York

8.

Bankers

9.

Security-First

Trust

York

9 (t^n

Chicago

Co

1,159,000

2,621,000

126

2,537,000

70

2,390,000

2,521,000

1,416.000

1,908,000

35

620,000

1,875,000

1,816,000

-

New York

590,000

1,700,000

1,294,000

Cleveland

Trust Co

18.

American

Trust

19.

Philadelphia

20.

Corn

the 53 Re¬
201% against

(See table.)
by

Mr.

Schapira
before the Boston Security Analysts So¬
ciety, Boston, Mass., Jan. 25, 1954.




1,536,000
1,324,000

698,000

1,299,000

f

affects not

86

Cleveland

Exchange Bank Trust Co.—
Pennsylvania Company
Anglo California National Bank-'

437,000

1,278.000
1,193,000
804,000

382,000

775,000

103

stricted also by

J.

P.

280.000

741,000

165

San Francisco

203,060

724,000

257

212,000

717,000

238

209,000

711,000

240

658,000

(—) 4

Philadelphia

„

New York

720,000

New York

495,000

679.000

677,000

in

Harris Trust & Savings Bank

Chicago

314,000

672,000

Portland, Ore.

163,000

662,000

305

Cleveland

218,000

660,000

compensate

for

clearly an¬
tithetic to a laissez faire economy.
A "soak the rich"' demagoguery

tute

policies which

States

'

National Bank

'

'

Holding

Transamerica

Corporation
Northwest Bancorporation

Midland Corporation
4. FirSt Bank Stock Corporation-—

-Buffalo

$1,550,000

464,000

1,507.000

225

522,000-

Minneapolis

3. Marine

$248,000

1,474,000

182

525%

Minneapolis

441,000

" 1,267,000

187

Wisconsin Bankshares Corporation
BancOhio Corporation
A

Milwaukee

319,000

766,000

140

Columbus

130,000

525,000

304

Marine

Seattle

104,000

432,000

315

Boston

116,000

380,000

228

Bancorporation
Baystate Corporation
First

Security Corporation

i

—

ogucn,

Utah

iu,yuO

jii

of

such

its

-v' \j

•

damper

a

expectation that

no

that

"boom"'

ever

is, unselfishly
"obligation" to

alleged

take

ment

Let's

over.j

kid

not

into'thinking that all
by mistaking government
contractors for private enterprise!
well

is

fire,

Treasury

a

deficit

is

appropriate, not when its budget
is

increased,

creased.

but when it

So any

de¬

is

possible balanc¬

ing cf the public budget should be
the result of

a

in,

cut

with

spending.

certainly

cut in taxes,

severe

coincidence

in

moderate

a

Industry, will

"accept

not

the

chal¬

"

ancing the budget will, because of
lower

•in

taxes,

"leave

more

Jackson & Go. Offers

money

eliminate
all public deficits (stop adding to
the public debt; to say nothing of v
-private hands."

To

the pump" in reverse and produce

and
im¬
plemented in the law (by a "cy¬
bernetic" process operating like a
thermostat), a policy which at¬

a

in

shrinkage

"credit."

tempts

"confidence"

Not being properly

to

simultaneously
extreme

one

undo

to

with

with

done

and

expand

simply flies from
the other, trying
hand

one

the

contract

other.

what

What

is

the

.Federal Reserve is trying to do to
"ease credit"

Broadcasting Slock
&

Jackson

-

paying it off) is simply to "prime

Co.,

share.

of

an

299,900 shares made in March,

1953.
The

to

net

proceeds will be used

indebtedness

certain

pay

in

curred

purchase

subsidiaries

corporate

a

or

deficiency

in

either

private incomes which

overspent
"credit"

and

filled

in

by

(it is virtually im¬

(deflation) chain

virtual

certainty

as

or

spiral is

to

every¬

by the pavment of debts to banks,
IF

the

public

budget

were

deficit spending, especially not to

trving to pay off
the public debt to the banks, thus
the point of ever

shrinking the money
When

reducing

supply.

the budget by

public economy, which serves to
XCuu ce

Nuliv/nul

lucuillt,

il

and

for

to

purposes

in¬

of
general
provide

stock

of

then

and

pansion

(avoid¬

deficit spending).
This
hardly serve to promote pub¬
confidence or private expan¬

at

This represents

balance
of

$1
per
the unsold
original offering

Corp.

Broadcasting

working capital for

any

Mass.;

Boston,

offering to the public 195,000
shares of common stock (par 10
cents)
of
Television
&
Radio

are

(by "pushing on the
string") the Treasury is trying to

shrunk but not to the point of no

Companies

San Francisco

preventing the
capital and

both

lenge" to keep the economy strong
and
expanding on a non-profit
arises,' evidenced just now in the
naive:, notion
that
the
"upper basis, in the face of an awkwardly
balanced budget.
In the long run,
crust"- will escape taxation and
the Federal budget can never be
Treasury revenue suffer accord¬
balanced without endangering the
ingly if corporate income taxes
economy
by a "chain reaction."
are repealed.
The public debt, therefore, can
We are certainly not going to
never be paid off.
; .
accomplish any adequate control
ALDEN A. POTTER,
over money supply as long as our
Box 181, R. F. D. 3,
top officials, even the Secretary of
Bethesda 14, Maryland
the Treasury, believe that reduc¬
tion of national spending and bal¬

and

Bank

.

ourselves

are

Public priming
for private recovery could be ef¬
fective only IF there were no pos¬
sible extinction cf money supnly

203

8.

to

instability need not be
recounted here, but they consti¬

lapse or recovery.

114

United

7.

effort

an

agreements"

monetary

a

71

29.

be

own,

fulfill

In

adopted

are

(also by treaty-

"executive

and

actually

keep things going lest the govern¬

tariffs).
which

thing except timing of either col¬

37

397,000

28.

5.

against "burden¬
or
imports (re¬

by ;domestic law
law

sion

'

Chicago

2.

prices

operating independently with any
semblance of stability, i.e., with¬
out "chain reactions")
a depres¬

30

New York

face

can

its

on

on¬

measures

by

of

private industry will

-

surpluses"

The

will

competitive levels.

the

,

some

which

enterprise

there

it

Alden A. Potter
domestic
supply
but also
"ioreign" policies,' like
"dumping" (or foreign "aid") to

bank

271

620,000

of

works"

In

money

k

a stimu-;
suddenly reversing the
cutting government-

employment

possible to keep the private sector

192

323,000

Seattle

1.

lic

ly

support

no

prevent the development of priv¬

-

re¬

•

be

spending and going into boon¬
doggling under the guise of "pub¬

lack

as

be

expen¬

actually "left
by deficit

hands"

private

has

to

seems

the reduced
that there can

so

policv

"c onfi-

-

dence"

are

84

Philadelphia

Bank

diture,

Committee

what

as

House.

for

labor at

public

70

•

San Francisco

Co

National

1,580,000

Detroit

25.

it

exr

Without

112

746,000

837,000

required

capable of

lic

2$

777.000

below

quite

the

spending thus providing

sion of credit.

188

New York

Means

and

ate

o

taxes,
of

lus without

at

a

cut

Ways

argued,

isting "credit"
system is inr
versing,

to

Reed

in

re¬

The

'

Boston

22.

be

advisable
Chairman

doubt that money is

108

1,657,000

"tight

a

'

New York

Pittsburgh

21.

will?

can

'

Detroit

that

.

in

versed

202

872,000

■

cannot

5

•

Los Angeles

point out,
recently

done

the economy,

ing

mo

1,492,000

New York

National Bank

12.

6.
an

3,543,000

TVW,

Co

1940 shows that

banks, their deposits then and
now,
discloses that eighteen of
these banks are located outside

•From

90

Bank__

only 58% for the Central Reserve
member group in New York City.
A
list
of today's thirty
largest

of New York

375^!

Trust

National

deposits for all
cities

Increase

5,538,000

First

"chain reaction,"
be paid off."

a

can never

undo by still pulling on it

1953

$7,744,000

Manufacturers

prior to World War II.

Deposit growth in 37 selected Re¬
serve

Percent

1940

5.

17.

Many cities now have banks
while local in character,
become

-Dec. 31,

2,908,000

4.

keener

which,
have

•

*

$1,632,000

San Francisco

before.

ever

*

New York

business

national

for

Dec. 31,

Office

-

Deposits

New York

other nine districts have been ac¬

cumulating large banking capital.
Since June 30, 1940, these banks
havev? increased their capital ac¬

1

1953)

engenders

to
*

Total

27,

reaction"

>

.

has

the. "chain

of

City and Chicago banks where
lower earning
power
reflects a

.

New York

fall

ments

authorities.

t

.

reserve

writer

money" p o 1i c y,
because

of the changes which have taken
P^ce, the higher reserve require^ent of 22% for Central Reserve
city member banks is unrealistic
and discriminatory by comparison
hh the requirement of 19% for
the 319 member banks in the 53_
Reserve cities.

"fear deal" to

a

this

(Aug.

In 'view

outmoded classification.

These-higher

by

economy

in the columns of the "Chronicle"

Nevertheless, these 35 banks must
™ainta!" higher cash reserves
^n other banks because of an

'

run,

anced without endangering the

and, therefore, "the Public Debt

as

«|7.,lb% :in 1940 to Z6.it>/o in iyo<5.

Reserve

.

Secretary of the Treasury's
of monetary instability. Con¬
the Federal Budget can never be bal-

Editor, Commercial and Financial
Chronicle:

country as a

™e™ker.

an

1940

Central

! <

*

Re-examined

the

to

deposits throughout the

in-

;

regarding correction

cludes, in the long
,

>•

.

since

Investor

,■<

Alden A. Potter takes issue with

whole, the total of all deposits
held by the New York City, and
Chicago Central Reserve city

diffusion of bank
In the over-all banking picture,
nation of course, sweeping changes have
present a spectacular taken place since December, 1913
picture.
Although the trend has when the Federal Reserve Act became law.
At that time, when the
been general¬
twelve Federal Reserve Districts
ly recognized,
were established, the banks were
its long term
also designated by classes-Ceni m pi i c atral Reserve city member banks,
tions now deReserve city member banks, and
m
a
n
d
the
attention
o f
Country member banks.
These
investors
and
designations were for the purpose
of specifying reserve requirements
banking lead¬
on the basis of then existing geoers, as well as
growth

$2,986 mil¬
banks?

.

Federal Reserve

centers,

longer warranted.

Thursday, February 18, 1954

.

'I

'.

\

•

_

domestic

to

"due

1953.

required to hold higher

are

•

..

11.8%. ' In Chi¬
the corresponding figures
26.8% in 1940, and 16.5% in

cago,

and, therefore, the classification of New York and Chicago
as

of

were

shifts,

by industrial decentralization and population

erated

LETTER TO EDITOR: t

-

represented only

social, economic, and political changes, accel¬

Points out

ters.

de-

banks"

.

st^^o^ep^iEconomic Naivete in High Places!
City group'.
3
* •MVVU"

By MORRIS A. SCIIAPIRO*

;

1940,

June 30,

of "other domestic

.

necessary ex¬

equipment

replace¬

ment.

At

present the corporation owns
91.36% of North Shore Broadcast¬

ing Corp.; 83.86% of South Shore
Broadcasting Co. and its wholly
owned

subsidiary, Atco, Inc., and
Television
Corp.,
which currently owns some 275,Colony

Bay
000

of

feet

for

Mass.,

land

in Braintree,
intended television

an

transmitter

site.

South Shore

Massachusetts

porated

in

1946,

radio

ates

Broadcasting Co., a
corporation, incor¬
and

owns

station

oper¬

WJDA

at

Quincy, Mass.
Shore

North

Broadcasting

Corp., a Massachusetts corpora¬
tion, organized, in 1949, owns and
operates radio station WESX with
studios and transmitter at Naugus
Head, Marblehead, Mass.
For

the

year

ended

Dec.

31,

1953, net profit amounted to $13,489,
and

after

provision

State income

assets

totaled

at

the

for

taxes.

close

of

Federal
Current
the

year

against current
liaoiiities of $18,866.
$42,629,

as

Volume 179

Commercial and Financial Chronicle
The

Number 5300...

<

(787)

velop

The Aircraft Manufacturing

top!

performance

articles

and the role that aircraft and

should not get orders. If there are
some that fail to
survive, it's too

bad, but that is

Industry—A Look Ahead

Great

swift

tem.
and

By H. M. HORNER*

gone

aviation

more

President, United Aircraft Corporation

our

American

sys¬

It has proven it gets' results,
let's
remember that many
concerns

out of business than

have

are now

active.

Aircraft

manufacturing

executive

reviews

tlie

I don't know what the attrition

industry, and contends there will continue to be a heavy de¬
mand for military aircraft, due to obsolescence of old models

plus modernization rate for the
military is, but let's just assume

situation

in

it is at 20% per year,

and creation of

new ones.
Says this does not mean all aircraft
guaranteed a living. Looks for U. S. to continue
its leadership in commercial aircraft, and holds we are not
behind Britain in jet technology. Concludes broad future for

-

companies

be low.
20% of 40,000 is
8,000. Now 8,000 of today's mili¬
tary planes per year is a lot of
business,
probably somewhere
even

are

commercial aircraft and commercial aviation looks

which might

around

bright.

five

or

billions

more

of

Britain has played in pio¬

advance in
transportation.
But all the chips have not been
put into the pot yet. As you per¬
haps know, Boeing's prototype jet
transport will be flying experi¬
mentally in six months or so.
It
is designed to carry about twice
the
number
of
passengers
the
Comet now handles, and fly them
non-stop across the Atlantic. The
Boeing just might stir things up.
At any event, we can wait and see.
And certainly we would be short
sighted to count Douglas and
Lockheed out at this early date.
neering

vital

a

The broad

dollars and can be compared with

new

commercial

future for

commer¬

cial aircraft looks bright.

in

dollar volume

one

equivalent, to. about

19

Regulus is
Corsair

two

fighters.

Then VoUght has before
Navy F8U jet ship¬
board fighter'which we believe is
a pretty good design.
Of course,
it will be some years before it can

in

the

new

be in production,
but it looks
good.
Vought's present satisfac¬
tory outlook makes possible our
plan to separate it from United
sometime

later

establish it

as a

on

this year, and

separate corpora¬

tion.
And then United has the Sikor¬

division.
Sikorsky's leader¬
ship in the helicopter field must
be apparent to all.
They've got a
pretty big plant now. We are con¬
fident enough in their future to

sky

In my
produced in the build-up year of opinion, it just can't help but be. build them a second plant—bigger
1952. With military production of Look .how far it has come in the than their present facilities—
tion for this occasion. I know this should try to build an adequate
this magnitude, we should have past short twenty years!
Just the which should mean something, for
was
wrong.
I assume that what; defense with the very minimum of
a pretty healthy
military aviation spare parts business alone for we don't go around paying fifteen
you
wanted
military personnel. To achieve
commercial operation is becoming to twenty million dollars of our
industry, assuming decent profits
me to do
; such
a goal, we must have the
was,
levels are- established for the; in¬ big business. In the Pratt & Whit¬ hard earned dough for land, bricks
to gaze into avery best
of equipment of all
dustry as a whole.-.'-'
' V'
V ney engine division of my own and mortar unless we are pretty
types in order to multiply the
crystal ball,;
confident of its profitable use.*
On the subject of profits, the company alone, commercial spares
but
effectiveness of those men we do
neither
sales last year were somewhere Commercially—and
by commer¬
rate for the aircraft industry was
the crystal
? have
under arms so that, with
around $50,000,000—and that ain't cially I don't mean the private
something around 2% in 1952,
r relatively small
ball nor my
numbers, we can
hay—even with an inflated dollar. owner, but rather public trans¬
/obtain our objective-—the preven¬ quite low when compared to the I feel
background
quite sure that those of us portation—the helicopter may do
capital needs of the industry and
tion of war.
reading really,
to profit rates in other industries.: here today who are still around some pretty extraordinary things
offer a base
in the next twenty years.
In fact,
( Now, air power comes into
this The death of the excess profits tax. twenty years from now will again
from which I
to a major degree. Not only from should help the industry, and I be astounded at the progress made a 35 to 40 passenger commercial
can work. For
in the 1955 to 1975 period.
adaptation of the recently
the standpoint of the bomber and hope that profits of 4% or more
:
S-56
instance, if I
might stir up
In the next 20 years air routes announced
the
nuclear
explosive and the will prevail in the future for those
begin spouting
fighter with its rockets, but also, companies which are really con¬ spanning the continents and oceans something important in the notoff, before this
too-distant future.
In fact, this
importantly, from the transporta¬ tributing with superior products. will surely be flown by gas-tur¬
*
*
*
particular
bine powered transports cruising commlercial S-56 just might be the
So much for the military.
tion—the mobility—standpoint. It
group, the raft
at almost double today's 300-325 DC-3 of vertical lift airframes.
H. M. Horner
is unwise to do too much prophe¬
of figures that
Commercial Aircraft
Now I've been pretty optimistic
mph. speeds.
Helicopters of
sying, especially in aviation, but it
I saw in
about the long-range future of the.
my reading, I have a
This country's commercial air¬ bus-like capacity will link the
U
does seem unrealistic to me to behunch that, all
aircraft industry and about United
through the audi- lieve that in the foreseeable fu- craft equipment has led the world cities of every region as closely
Aircraft.
For any
given short
CnC*wou^ r*se UP> shaking ture this country of ours, which since the late '20s. I am firmly together as the motor bus does
a
fist
at
me
and
Freight will be flown as period, anything can happen in
hollering, now has had world leadership of the opinion that we still lead today.
the aircraft business and usually
Horner, you are a plagiarist. You thrust upon it, can
contemplate the world, despite the handful of frequently as passengers are now
are
These forecasts simply does. When things look the worst,
quoting from what I wrote any drastic decrease in the si2e Of gas-turbine transports now being carried.
are
inevitable.
The momentum they usually somehow get a lot
about the aircraft
industry in my its military air establishment. By produced in England.
While on
of today is bound to bring them
better and sometimes very quick¬
December 10 analysis"; or some- this I do not mean that we
may this subject, let me assure you that
one else would
ly. When things lobk pretty good,
say "Horner used not drop down, to, say, 100 groups in my opinion this country is not through.
So to sum up, given the proper that's the time to start ducking
my material but he has shifted the from the presently planned, 137 behind Britain in jet technology.
and weaving because sure as
decimals four degrees west."
with
equivalent Navy, Marine, We were behind them some years competitive environment, I'd
think that the long-range future shooting
something is about to
and Army air, but I would doubt back, but we have now not only
of the commercial airlines and of happen—or has happened—o n 1 y
Fundamental Facts Surrounding
that we would go down to those caught up but I am convinced we
the aircraft manufacturing indus¬ you
Aircraft Industry
don't know about it yet.
skeleton aviation production days have surpassed them.
Was it the
So instead of figures and fore- like
United States or England that had try as a whole looks pretty good That's why most of us in aviation
1946, '47 and '48.
would prefer, rather than to
at this time.
a fighter* which could tangle with
*
v
abo"t
Now if you will go along with the Russian Mig?
master the crystal ball, to learn
some
of
the
fundamental
Y6u can bet
facts me on the
point that the U. S. Will
'Aircraft, Primarily an'
•
•
how to do that fabulous old In¬
that surround the American airyour bottom dollar that if England
continue to keep itself relatively
Engineering Business
dian rope trick.
had had planes that were equal to
craft industry and
United as a strong in the
air, what have we
I was also asked to comment
the job, sfye would have had them
part of that industry?
got? In the first place—air power
in Korea—but she just didn't have specifically on United Aircraft. As
First to discuss the
military air- —effective air power—is based on them.' The U. S. North American I said before, the aircraft business
craft market.
quality.
Quality stems from en- F-86 Sabres took the
is primarily an engineering busi¬
Migs on and
For 30 years,1 in this
country, gineering, spurred by good old- for a kill record of some 13 to ness—superior designs are all-im¬
men
in
aviation
have
been -fashioned competition, and that is
portant when coupled with the
one.
In
medium bombers, has
PITTSBURGH, Pa. — Simpson,
preaching that there must be a where the American aircraft cornI honestly think
England got any?
No!
She has proper timing.
Emery & Company, Inc. has been
long range national policy if we panies should excel, from the
that all of the United's divisions
some prototypes, but the U. S. has
formed with offices in the Plaza
were to use airpower
effectively, standpoint of providing superior squadrons of B-47s
stack up pretty well in this re¬
flying.
In
Building to act as underwriters
Beginning in the middle '20s with aircraft to those of foreign counheavy bombers, England hasn't spect at this time. Pratt & Whit¬
the Morrow Board, such a pro-'***6?If we, as an industry, do a even got a project comparable to ney has the "10,'000-lb. cla$s J57,
gram-was adopted and it survived really good job in engineering, in' our
Boeing B-52. Arid in engines, which would seem to be a pretty
until the early '30s when it fell design and development, we autothis- country has had the Pratt & good and competitive engine.
I
under the impact of the depres-' matically mafce.a market -for our
think it speaks for itself that it
Whitney J57 "in *he
I

did

a

considerable amount of other

reading

preparatory

in

would

prepara-

soldier

seem

in

history.

So

to be obvious that

it

the estimated 9,000 military planes

we

-

i

/

•

*alkj briefly1

,

.

Simpson, Emery & Co.
Formed in Pittsburgh

sioft.

Today,

seems-to

be

again,

once

real

a

theretPr°diict if -wexamstill

awarenessiri-^untrywantsstrong

assume the
mr

power.

I0,0f)64pbuhd*

fqfca v year has been tapped to power,.for, the
engine' in' Air/ Force, -the supersonic North.
American F-100; the McDonnell.
F-KM; the .."Convair F-102*; the
BoeingB-52;" and, for the Navy,
the Douglas. F4D fighter and A3D
bdmber.- I can also tell you that
it is in other planes still on the
classified list.
Pratt & Whitney
is also still very much in the pis-,
ton engine business and, of course,'
isn't stopping its jet development
eight jet B-52—but it's a question with the J57.
class'.', in.

.production

England lias

now.-

no

leadership means a dy- procluctioh that matches the J5Tk;
policy is an essential. Certainly, namic„5thriving search for new high power and its low fuel con¬
there > is
talk
of
establishing a1 threshholds .to conquer, and in an sumption, and, believe me, the
ldng-rahge procurement plan. The:art as swiftly moving as aviation, powerplant is the real touchstone*
Administration also has made it * am convinced that t it will be of superior air performance. t< Eng-t
clear that air power is the funda- many a day before every aircraft land has commercial jet - trans¬
mental attribute that the United- which is put into production isn't ports, and we do not. We certain¬
States must have to prevent war obsolescent right then because of ly have the knowledge to produce
or
to meet war in the event it somedesign simultaneously going excellent jet transports—it would
comes. We are a nation dedicated
down on someone's drawing be a much easier job than the
Washington that such

a

Air

national

to the belief in humanitarian

power

hoards.

prin-

ciples, and it has never been our
In addition to this most import- over here of good old dollars and
Contrasted to the govern¬
policy to sacrifice armies of our ant factor of obsolescence, we; cents.
young men where we could save have a certain amount of attrition; ment-owned and operated British
them by giving them better equip- even in peacetime service use.
It airlines, our own airlines are
ment. From the cost standpoint, is my opinion that this country stockholder-owned, and you know
They
too, It must be apparent that a will have a pretty healthy, vigor- how competitive they are.
minimum of men under arms but ous> and competitive military avi- cannot afford to buy a fleet of jet
with equal effectiveness due to ation industry if our country transports unless they are sure
superior
equipment,
gives
the continues to maintain air forces they can make them pay, and our

anything

dbllars. We

huilt if we insist on keeping them ford to put a jet transport into
really modern. President Eisen- production unless they are assured

are

the most technical

nation the world has
As

such,

our

irian hour are

Even

known,

staggering in

parison to those of
tion.

ever

high labor costs

our

any

ordinary

those

now

being

bower said in his budget message
week that the United States
would have 40,000 military aircra^ in service in the next few

per

com-

other

like

airframe manufacturers cannot af¬

country that protection for fewer

na-

soldier,

of

a

quantity

lieve, has
—and

I

BOAC, I be¬
eight Comets now

run.

some

understand

there

have

been less than 25 Comets built al¬

together. Between Lockheed and
when compared to the soldiers of y®arf*
Now this does not, and Douglas, I wouldn't be surprised
other countries, is paid more, a lot should not, mean that every de-r
if they aren't building pretty close
more, clothed better, fed better S1*n a?d manufacturmg outfit isto 25 transports every couple of
and
sheltered
better than
any guaranteed" a living.
Because- of months—and bigger ones than the
^ the overriding importance of
>An address by Mr. Horner before quality, those companies develop-; Comet, too—and a lot more eco¬
the Third Eastern Regional Conferenee
jng the top performance articles nomical per passenger mile;
_____

°cSr^.
1954.




.

- • •

should get the, orders,-..nd con..
;

versely,-those which do not de¬

.

* Nevertheless

"reason

the

British

to be "proud of the

,

Our Hamilton Standard division

is still the leading

propeller

com¬

in the world and has made a
general
aircraft accessory field.
Don't

pany

tremendous leap into the

count them out because of the ap¬

William G. Simpson

John

L.

nicipal securities.
will

be

member

a

hmery

and mu¬

and dealers in corporate

The new firm,
of the Pitts¬

burgh Stock Exchange.
Officers are William

G. Simp¬

and
Treasurer;
Emery, Vice-President;

President

son,

L.

John

Secretary.
graduate of Whar¬
ton School, University of Penn¬
They are still building many pro¬
sylvania, has been with H. M.
pellers, and in the accessories
Byllesby & Company since 1927..
field, just as one instance, their
Mr.
Emery and
Mr. Buchanan
fuel control and starter for our
have also been with H. M. Bylles¬
J57 jet represents as many sales
by and Company for some* time.
dollars
engine
the propel¬
fall-off

proaching

propeller

of

volume with the wider use of jets.

on

a

DC-6.

And

a

B52 has

eight—not four engines.
Down

in

Mr.

K.

D.

Buchanan,

Simpson,

a

as

per

ler

and

Texas, our Chance

Allied Research & Service
(Special

to The Financial

Chronicle)

BOSTON, Mass. — Allied Re¬
about the best position it has en¬ search & Service Corporation is;
joyed in years.
It has volume engaging in a securities business
production on the Navy Cutlass from offices at 50 Congress Street.,

Vought subsidiary seems to be in

and

its

of

the Navy-spon¬
Now don't think
a 4th of July sky¬
pretty big article-^-

missile,

sored Regulus.

" have
Regulus as
Comet rocket*- It is a

Officers

■

are

-

Henry

-T.

-

Dusker;

President;
Stanton
B.
Priddy,.
Treasurer,- and John M. Hall, Sec¬
retary.

1

20

The Commercial and Financial Chronicle

(788)

Purchasing power may not suffer

A

Reappraisal of the

ual will save

*

purchasing on credit and a drop in durable
offset by expansion in outlays on services.
financial

climate

faces

I

1

The

sustaining 1

as

uncertain element.

as

believe that the decline in

still

The drop is in line with

expectations

my

and

seems

The Course of

As

commit any new aggressions. This

There

this,

estimate indicates that defense

as

forecast in the

spending in the fourth quarter of
1954 will be about $3 billion be-

Manches-

N

"Guardi-

o

ber.

However,

Now

penditures

he,

in New York.'

So

far

I

as

deter-

mine,

to

the

present

has

level,

to

in

reaction

physics.
Nearly

observer

every

grants

in

this

there

that

are

weaknesses in the economic struc¬
ture

today.

We concede that

or-

dinarily these weaknesses would
have

compound influence which

a

maintain that there

us

relied upon to prevent the disaster
Mr. Clark foresees.
.

,

.,

Obviously

,

the

,

stock

market

relief will expand.
Also,
new appropriations for public
woAs and other activity-sustainlikely.
The budget estimate of receipts

they shared Mr. Clark's

tJin
tation

are

ri

i

'

a

profits

shrug

off

only

his

conclusions.

prudent

to

is

It

reappraise

as

the

depression

actually

are

This

is

a

spending plans of the Eisenhower
Administration is now at hand.
.

went

budget

in

in 1953.

indi-

income

tax

contemplated, and excises
to change.
The effect of

into

presented

.

last

that

there

that

the

best

would

be

thev

called

tax

cuts

to believe

see reason

deficit

periods, but it is

in

both
when

overcome

the transactions of the trust
funds
and

agencies

„

effect

the

firsjt of the

will continue to expand,
Government

us
and

had concluded that
a

step_up

in

non_

buying

consumer

count

for

86%

national

gross

much

of

firm,

the

the

total

With

so

reasonably

14%

must

get

serious situa-

a very

tion is to result.

ac-

current

product.

the

pretty bad if

together

of

other

and

to

expenditures
$75 billion in

ending June 30, 1954.

year

fiscal

year

receipts

are

Now what about

in

ities.

expected

decline

defense

in

to

to

inventory

»An

m

pushed, I might revise
about

the

construction

looks

vanced

to

annual

an

rate

nearly
sures

1,100,000 units, which ingood activity for some time

come.

Mortgage funds are be¬
coming increasingly plentiful and
money
is
getting cheaper and
cheaper. A further liberalization
of governmental

different

month ago.

cline

than

it

guarantees

continues, Congress and the

Administration

will

lower taxes

called for and will

are

plans.

At

the

agree

new

same

that

spending

time

states

of the drop which takes place in
military expenditures.

Another rather strong element,

,

.he

Third Eastern Regional
Conference"Jf ii,'e

w ZorkJociety o{ Sec""ty Analysts,
nc.,
ew York

as

t
x appraise the business outlook
uie uusiness ouiiook^

f°r

.items

tie to

for

plant

date, and there
outlays will be

personal

in

element

*

run

deficits and these will come
be
accepted as a matter of

is

and

lit-

very

fairly

well

fnrrP*

torces

nrPCPnt

arP

present

are

anH

and

T
1

will

they

prevent

be
a

is

today

di-

Among
mention
mcuuuu

nancial

Financial

these
first

forces

the
mc

climate.

Climate

I

The

supply

fixi-

of

with

not

much

be

to

seem

of

rate

doubt

inventory liqui-

heavy

meet

is

increasing

1954 has

been

overcome,

I

in-

the

be

or

The finan-

overboard.

will abate after the
the year and there is

of

a

collapse that would

inventory

heavy

make goods

losses

unsalable.

cerned.

about

looking
of

end

far

so

We

1954

the

lieve

be

the situation at

over

would

ately in

1954.

of any

passed
Credit

fall

I

the

only

agreed

level

month
alter

outlook.

quite

as

of

later,

that

On

strong

Against

with the

the

final

I

see

no

of

hand

one

support

a

at

the

"end

as,
of

is ' evidence
construction
is

this

that- residential

V

u

that' the

not

change
The

as

not

dllCday

coming

UllUClWdy

drop

represent

as

bU

stocks

m

severe

a

previously anticipated.
in social security

increase

incomes, although probably
enough to bring about any

great shrinkage in

sumption

personal

expenditures.

con-

Outlays

but reassuring

news

of

the

be

cap-

ital programs is being released.
While I do not subscribe to the
proposition that
a

consumer.

very

this

easy

Administration

in

sion

Reserve

lieve

halted

be

can

taken

are

and

Board.

the

There

to be a widespread be¬
Washington that a reces¬

that

if

increase

to

Although
it

I

will

measures

the

do

be

desired

the

money

be-j

not

possible

rise

in

to
the

of money, the attempt
help to bring about a surplus

of

funds, and to produce exces¬
sively low interest rates, both

short and long term.

Probably you should not count
any
substantial reduction in

on

the tax

dividends.

on

message

that

It

is

likely

only

real depression
store, neitner do I look for
neither ao 1 iook xor
quick recovery. Unless the fora

in
in

consumption.- Earnings, aided by tax reduction,' eign situation gets worse govern-

will be

so

watered

gesture toward

a

elimination of double taxation of

profits

corporate

will

remain,

j

The level of the stock market is
not

high relative to earnings

dend

as I
Furthermore, divi¬

yields look

here

exemption.
swings in stock

on

win

attractive

probablv

be

geared

developments

ness

words, the
wm

even

tax

course

depend

From

prices
busi-

to

other

In

of the market

upon

whether

the

pattern which unfolds is better
As

I

have

said, I

not ,yery

am

sanguine about the chances of
to

seems

be

a

departure from the

prevailing opinion;

..°

th t

t

an

This view

early business upturn.

t ti
:r P

or

than the majority forecast,

worse

f recent

My interpret

market

action is

receni market action is

presupposes

£.n

that

the

Kp..or„

re¬

Hppn

cession will be neither very deep
nor
prolonged.

very

disappointed

are

tations

If investors

in these expec¬

reversal

a

in

is

trend

likely.
Of

one

thing

—1954 will be
riod

for

the

Th

h

pi

f

8

we can
a

about

wide

be certain

challenging pe-

p

about

the continuation of extensive

is
is

corporate
conditions

year.

moder-

appraisal

the

seemed""probable
1953.

of

is

little

very

1954

to the

will

without

to

dif¬

net

tax reduction would

on

7%

the

much

the final

under

project them.

reason

the

Nevertheless, I be¬

majority of observers that indus¬
trial production might drop abbut

a

make

as

incidence

that

down

1953, I concluded that

business

from

from

a

know

income taxes.

budget
In

As

doubt
surtax

that the proposal contained in the

Only Moderate Decline in
the

to

and

decreased

would

rate

ference

will

1954.

squeeze

middle

normal

quantity

during the
However, I
think it unlikely that stocks Will
be thrown

allow¬

matter of fact,
question whether a reduction in

payments

half

inclined

am

present 52%.
I

of

tax

come

first

Fur*

granted to corpora¬

the

will

rate

effect

to

money

never-

substantial.

depreciation

be

but

whether

need

cline,

corporations

tions

supply.

will

rowing can be done on advantageous terms. The working capmost companies will be in a
strong current position once the
pinch of
pincn oi tax payments in the first
in tne tirst

will

accelerate, particularly since some corporations will

dation

be

Additional
ances

lief

the

are

removal

thermore, they will vary widely
in severity. Some enterprises will
sustain net losses, whereas others
may not suffer at all.
Y

appears

There

inventory reduction.

for plant and equipment will de-

and

will

of

that

the

net

in

the

by

and

in

profits taxes but

excess

cut down and the ultimate extent

stocks will

excess

loanable funds is ample and bor-

of

of

cushioned

corpora¬

are

declines

The

theless

of

dropped,

decreases

Federal

ual

would

favorable
icvuiauic

additional

offing.

profits

already

will be accentuated b,y the policies

the rapidity

rates will tend to reduce individ¬

Favorable

have

be

which these

powerful-may

serious

Operating
tions

un-

doubt' governmental actions may not be

no

course.

forecast

a

"
..
..
basic considerations

enough-to

ital

in

The effect of declining
business and falling inventories

holding up a little better than expoint to, pected; also that inventory liquisizable decrease, important sus->
dation
is
alreadv
underway
so

some

is in expenditures for half of
of

be¬

is in

If the business de-

is

non-

City, Jan. 28, 1954.

made

Now,

equipment have dropped

taining

appeared

big

as¬

now

is

progress

estimation the most

my

certain

minution in capital expenditures

1955

,

In

will not fall off much.

a

be

The Federal Government will

most

least

is

quarter of 1953 and that the gross
process.
Under such conditions I* national product
might suffer a
am
confident that home building
further decline of some 31/2%.

tninintf

and municipalities will enlarge
activ-. their outlays and thus offset most

related




ideas

my

business outlook.

are' quickly introduce

u

be

where

durables

working off stocks,
but it is only a small beginning,

of

much

$71 billion.

d

to

months

really

in

ing made

produce

Residential

little better than it did a month
ag0.
Housing
starts
have
ad-

a

drop to

Very little change in
adh„

continue

in

was

a

are

expenditures

and

would

Some

little fear of

and

shifts?

the

aefense spending is
projected.

1

I

sured.

expenditures,

sustained through at least the first>•

If

it

as

demand

cial

believe

In the

ending June,, 30,

it* K°n S
e reduced

The
all

and

total

falling.

1953.

the

in

that remaining 14%?
How about
residential
construction,
capital

that

economy

of

prospective

does

expenditures

However, I do not believe that
the fiscal situation is actually very

included.

.

receipts
tooth

aico

are

indicates

now

convinced that inventories

am

centrated

defense spending would be
strong

savings

budgetary

are

The

higher than they need to be.
Furthermore, the excess is con¬

are

current

up

are

to

Even

requirements.

Business

accumu¬

moderate.

active

as

middle

I

reductions half of 1954. The principal uripxnppfprf
tn
Hn
just as in tax rates would not be forth- certainty lies in the course of:
fis^Fvear Thpl; a the coming and that governmental spending thereafter. Although •
iiscal year. There is
so-

Current

of

rate

to

inventories

that

im-

no

Timl in uEwVi •hought that additional

end

the

began

most recent information

the

guess

propstothe
to

vear

Stocks piled

ing and finally cessation of stock

saving,

greater

Expenditures

Most of
,

the

favored

four

concluded

year.

.

Budget Aspects
In

reduction

fully
Furthermore,

ductions and credits is considerably more than offset by the
higher social security rates which

to make the reappraisal since definite knowledge of the tax and

R„rio-

be

minor revisions in income tax de-

convenient time

very

not

are

to

corporate

or

rates is

strong

as

as

continue

additional

vidual

have maintained.

we

will

large

no

situation and to attempt to ascertain whether the bulwarks against
as

measures

appears to me to be much too
-Ji wu 9
S rePUI hlgh- U assumes that ^comes and
is so great that one cannot
Tv/r».

taken

If it had not been for this lessen¬

the

Although I

other

,,y havedone ni the la^t few ;ng
months it
-NWortUoioec

lation

portant change during the coming

increase, and payments for
unemployment compensation and

S? m.Tr;ty-V,e^- "
th.at infvetstoy
It Pie PnCfu °, Stt0pCkS

«

which

after

year.

will

,

.

has

in the second quarter of last year

these

saving this year." Since
eight factors pointed

on

of

was

oertain types will certainly rise,
^he costs of agricultural supports
wlil mount, the postal deficiency

be

can

effects
four

which

place to date has been due to in¬

No one

resolve

to

nearly all of the busi¬

ventory changes.

All
I could do was to list eight ele¬
ments which will have important

i

expectation,
business continues to dropan<* \ believe it will spending of

important elements of strength in
the situation and that these

able

fall.
found

or

are

is important to

it

downturn

In

just about

Commodity Credit Corpora-

of

being

inventories.

increase, business today would be

my opinion, this is not a reason-

also

are

saving to rise

been

ness

_

might be sufficient to bring about
a real depression.
However, most
of

of

that

of

mind.
to

come

note

the

cause

in

have

I

an¬

example

an

this connection

that aggregate consumption extions in spending.
, penditures will be almost as large
Even after taking account of, this year as last, I think there will
these items which make the budg- be
important changes in the type
et look better than it really is, I
of buying and in the kind of ar¬
think the spending figures are too
ticles
bought. Purchases on
low.
This is chiefly because they credit will be
less, and cash buy¬
have been prepared on the asing higher.
Spending on durable
sumption that business actiyity goods will probably drop' decid¬
W1^ remain as high as in 19,53. In edly, whereas outlays for services

He compares economic

events

which

o r s

is

Motors

and

which

itself.

t

a c

General

recent

Now I

difficulties to my satisfaction.

banks to

present.

inventories will still

probably will not be
bad, yet unsatisfactory in
comparison with the boom of 1953.

sub¬

t0 a reduction in the saving rate

to cause the

a

judgment we may expect
a protracted period
during which
activity is below the present level.

advantage
long-term benefits.

what

concepts, and about

in the figures themselves.

ex-

of

In my

immediate
of

nouncement

conclusions
the course of saving.
differences of opinion

are

favor

The

draw

to

saving

amount

it

in

ground in

Important discrepancies

believe

^on loans, and to raise postal
Kenneth D. Ross
has not been rates.
These receipts are deductconsidered by the rest of us.
He e(f from the expenditure totals,
bases his conclusion on the belief kut
do not have the same
that the recession will feed upon economic impact as real deduc-

country

to

at

excess

ap-

advisability of

preciate the

ciation,

infor-; carry

mation

chain

with the general welfare and

Federal National Mortgage Asso-

Mr.

Clark does not
possess

not

To be sure, the budget figure is
n°t quite as low as it appears.
The government expects to sell
assets owned by the RFC and;

repeats it here

can

do

will be possible to hold other

m

e

I

to

the f

low the current annual rate,

last
v

hence

Saving

"controversial

on

attempting
concerning

made

an"

than

productive facilities are becoming more and more complex
and expensive,
Another
important
factor
in
sustaining capital expenditures is
the growing institutionalization of
American industry. The owners
and management of big business
recognize clearly that their own
interests
are
closely
identified

and

analysts all realize, one

treads

rea-

supply

±i—,—

am

States; defense.

in

excesses

The

ber of families, and plant capacity
will
look
even
more
adequate

decentralization,

and

correcting

total high in relation to the num¬

Scientific advance is accelerating

will un-

power

_

economist had

a

Spending

innovation

relatively

be

hourly wage rates and lower
prices for the things they buy.

recovery.

British) sonable if the Communists do not

ter

will

incomes

questionably be bolstered in three
ways—lowered
taxes,
increased
benefits under social security and
other relief measures; and reductions in the operating profits of
corporations.
Corporations will
make less per unit of output, and
individuals will get much of the
benefit in the form of higher

willing to accept the estipro-; mate of expenditures for national

serious business recession.-

a

been

housing will have been built to

,

quick

Clark

and

have

continuation of growth in many
industries, and the size of expenditures which will be spurred by

ordinating

As all of you know, Colin
last
week
reiterated
his
nouncement that the United

a

will

sectors.

minor.

there will be less

Does not look for

progress

with

recovery,

in

real

deep depression, discusses what may be the bul¬
warks against an economic collapse.
Sees Federal Budget
situation slightly more favorable, but holds, though aggregate
consumption expenditures will be almost as large as last year,

favorable

little

incomes

a

other

J

a

current

surplus

made

the

in

to

the

think would happen. Nevertheless,

force, while picturing inventory situation

increase

equivalent

was

have

two-thirds of all capital outlays.
Then I am impressed with the

that

security rates has been al¬
lowed to stand is clearly a minus
item which a month ago I did not

Ross, stating that it is inconceivable investors would bid
stocks, as they have done in last few months, if they shared

Stresses

which to initiate

tinguishment

fact

The

Chicago, 111.

goods outlays,

1953 the allowance for capital ex-

ment expenditures are not likely
increase.
Consumers will not

social

Stein Roe & Farnham, Investment Counsel

fears of

than he did

average
more

no

last year.

By KENNETH D. ROSS*

up

to

individ-

promise to hold up reasonably
well.
Depreciation charges are
growing—in the fourth quarter of

to

reason

seems

believe that the

19S4 Business Outlook

Mr.

there

and

much

Thursday, February 18, 1954

...

investment

analyst.

wni

y
divergence

Krjng
,

.

m

tne

earnings and market performance
Qf individual stocks,'and
f

,

,inii«iTai

will af-

nnnnVtiinities

if

one

ford unusual opportunities it one
'

can but
them.

recognize and

act

p

Volume 179

Number 5300

The Commercial and Financial Chronicle

...

(789)

the workers of the free nations
of
the world have their most

Economic Progress
Of the Free Nations

current

After

ministration

^bower's

in

•

President

Eisen-

Administration,

Executive Branch of

in

the

.Govern-

our

ment, is

:con-

behind

reserves

increased

in

rather

.

from

gold

gold

with

pressures

raw

of

,

free

in

^self in

of

those

u^T.* inflationary

v

^b^^

of

of

States

ties.

mean ;

this

matter

respectwe
carry

on

un-

the

for-

•

/

tendency

of '

defense
State,
the
policy
guidance of the Secretary of Deand through him the Joint

fense

Chiefs of Staff, and the monetary

policy leadership of the Secretary
of the Treasury. We operate under
the

direct

vision

administrative

of

context,
ment

the

the

super-

President.

endeavor

we

that

In

to

imple-

policy decisions of

our

government.
We are currently active in four
major regions of the world from a
standpoint of association in de-

veloping

defense,

technical

regions

economic
The

programs.

Europe,

are:

the

or

four

of

has
liaa

concern
^UUV-CIU

Soviet

reference

trade

the

facets

matter

of

of

our

the

coHiomoni

settlement

refugees

and

are

and

related

activities., From

with

There

concern—the
es-

the matter of various

capees,

the

East-West

administration.

other

the
tllc

to

1C1C1C1"-C

in

area,

missions

nations

deavor

to

this

situation

currently

of

m

the world,
rather

of
en-

closely
defense

and

economic

53

we

follow

particular-

re-

program

developments.

standpoint

of

to

At

the

1953 has

around

been, for the free nations

of the world

the year of greatest

gross

product of any year

tory.

By that I

clear that
were

more

raised,

tured,

it

produced,
mined

free
in

m
is

his-

quite

goods and services

the

world than
With

mean

and

among

year

manufac-

during

nations

of

1953
the

previous year,

any

that

higher gross national
product, there came these direct
The peoples of the

consequences:

free

nations

fnl 1953
ll953

ing

year.

of

than

the

fn

world

anv

m

any

nrlln,*:;
previous

Following from it too, it is

important to observe that the
rencies
whole

were

of

the

free

approached

vertibility

at

a

nations

cur-

as

a

complete

con-

rapid

rate

very

during 1953. The gold and dollar,

free

a

very

in

tary

time, there has
significant develop-

the

defensive

capabilities

the

of

free

was




there

lead.

which

material

raw

\

lead,

items

zinc,

beef,

the

upon

has,

tin, rub¬

as

Charles

wheat, and

Ker¬

to

the

requirements

of

He

1945.

II, the

neces¬

mem¬

of

of

the
f

since

governors

the

o

served

first-elected

was

1940,

with

1952,
the aboard

on

ex¬

an

exception

J. Kershaw

Chairman

Vice-*-

board;in

1951.

He entered Wall Street ih 1931 in

the most

are

unmanageable,

severe

4940..

and

can

free

plete

though

even

at this

one

the

time,

nations,
in

answers

no

behalf of

on

chart the

jecutive Committee; O. F. Brown¬
ing, Committee on Securities; Al^
G.

bert
The

other

that'in
most

factor, of course,

those

countries

dependent

that

is

con¬

outrun the

Outside

earnings

upon

Redpath,' Auchincloss,
Redpath, Committee on

Parker &

are

from those materials that tend

who will* head the Ex-r

Chairman

com¬

these

of

any

{

••

} Governors who ,received ap-*pointments as committee chairsmen at
the organization meeting
include:
John
J.
Mann, Board

major materials.

can

internal

Mr.

ber since

States—moving

of such

the greatest attention. None
of these problems, as I see it, are

bal¬

positions

hange*

c

change

need

those

strongest

As

in. the

x

War, and the
anticipations of what that might the employ of Reynolds & Co. and
mean.
The adjustments in those became a partner ih'that firm in

expands

is

an

and

with

flow

expanding

it

Supervision; James R.
Gates & Dyer, Committee
Transactions; Charles W.

Dyer,

to

Floor

on

productive picture, the
and
the

Halden,

of

economic

adjustments

H. L.

Committee

on

countries

reach fruition
of

supplies

being to

gree,

a

began

to

come

marked

very

the

and

those

.

means

forces

of

sup-

reached

a

-

With

that

/

me

appraisal of

an

based

view

serrations

upon our

and

turn briefly
It is my

1954.

r e

current ob-

t

p o r

from

s

proach

kind

this

to

inherently

is

an

evitably
an

as

when

devoted

in Korea to

short

f

economic

of

conflict

longer-pull

a

and

.

Dallas investment banker,
purchase of the

announced

has

remaining one-half of the capital
stock

the

of

Trust

Realty

Com¬

from Dallas Rupe & Son.

pany

Mr.

ters

then

d deveioPment of total
activity will be a favor.

are

35-year-old company
in the Kirby Building.

Realty Trust Company, holding
the

oldest

charter

of

its

Texas, has complete trust
and will continue in the
of

corporations

and

in

kind

in

powers

financing
assisting

than

year

that

ment. Let

is

1953.

realize

far-reaching state-

a

fill it in

me

I

a

bit at this

United

grams, Montgomery said. During
the past year the company has

within

the

world.
I trust you have observed in the

handled several million dollars in

President's

time.
-phe

developments

occurred"

°n7aS

during

that
this

1 953

have
curb-'

messages
that com¬ leasing and sale of properties of
plete and basic conviction that the national
chains,
including
the

ec^fl0mic

,of tbe

?fe*r

has been
C. Flani-

to

Manufac¬

,

came

He

Officer in Charge of the

as

Street

office

from

1929

to

appointed an Assist¬
ant Secretary in November, 1951.
1947 and

Mr.

was

will

Fuller

Lewis

as

Melrose

John

succeed

C.

Officer in Charge of the

office,' 360

149th

East

Street, the Bronx. Mr. Lewis was
recently appointed a Vice-Presi¬
dent of the company and is now
in charge of its 14 offices in the
Borough of Queens.
*

Mr. Garrison

turers

Trust

came

to Manufac¬

Company

in April,
1944.
He had been in charge of
the credit department at the Mel¬
office

rose

and

in

1952

he

was

assigned to Branch Loan Adminis¬

tration, Bronx Division.

businesses in their expansion pro¬

{actor

Fuller

144th

the

of

Horace

Company

by

President.

served

DALLAS, Tex.—W. Ray Mont¬

gomery,

will

ramparatively

months

Trust

turers Trust Company in 1928.

Realty Trust Co.

P.

Vice-Presi¬

Eugene W. Garrison as
Secretary of Manufac¬

world announced

a

Montgomery, who became
shift President of the firm in 1952, now
holds all of its stock. Headquar¬
to a

adjustment

moTe Through \n 7
the

you

conclusion

that

in

analysis

Report-going
that m-

economy

situation,

mea£s

adjustment

occurs

is
lb

ap-

rejlected

Eisenhower.s

and his Economic

through

an

That

/g

_

there
mere

of

across

Montgomery Buys

ODenirJ

think
minx

T
i

cut

Assistant

as

and

dent

of Harold

appointment

Fuller

barring un¬

Mr.

^

this

1953,

States and in other nations in the

better

•

for

ground

around the world, that 1954 in the
;able
free nations as a whole will be a
that

.

The

gan,

1 EtoShS

Administration
riui i un lb ira lion,

such

back-

-t

gee

££*

successful

broad

very

th

e

always

can

+

Qtinnr.a

a

picture.

Calculations

£ ^

1954"

turers

are always

completely upset

in

than this best

usual, unanticipated and clearly
Assistant
exceptional
circumstances
that

this
,

f«

have

year

thus far,

year

in all

up

,,

^

from

Appraisal of 1954

7

pol¬

many

affect

can

,

de-;.president

that the defensive forces

so

being

in

1953. The bal-

in

are

come

na-

is, the matter of devotion of energies and productive capabilities
Korton
to military means
began to

into

that

will

and

Appoints 2 Officers

through these prob¬

move

can

slightly better

Obviously, there
icy problems that

in the period marked by the open-'
but
ing of the Korean hostilities—that nf

ance

we

lems

Long-Range Outlook Better

begun

First California Adds
LOS

ANGELES, Calif.—Wells
McTaggart, David Meherin, Nor¬
man Rothschild, Bertram L. Spellmire, Craig H. Taylor and James
W.

have been

Zink

added

to

the

staff of the First California Com¬

Safeway Stores, Inc.

Incorporated,
647
South
Mr. Montgomery, in addition to pany
of inflationary
Mr. Taylor was
re-establishing of States af? inseparable. Each is af- Realty Trust Company, is Presi¬ Spring Street.
formerly with Hannaford & Tal¬
productive capacity, the reaching -';fected by. the other. From that
dent
of
Mid-South
Investment
of

the

of

posture

a

ancj

related

that

have

President
tration

"f '0nS-and that °£ £*e

whole

a

pressures,

to

very

the

been

substantial

Eisenhower's

and

more

lieve

year

1954

will, be the

process

formation

and

in

Adminis-

recently in his

cific steps that
the

process

Randall

year

and

I

be-

in which

of

springs

are

necessary

a

in-

of
ot

out

the

the

Congress

now

Company,
of

ment

which

stocks

handles

in

tions and banks.

invest¬

other corpora¬

of

North wood

Oil

Company

the

made its

re¬

actions with oil companies and the

be debated,

purchase and sale of oil payments.

the

not only

Executive

Branch and the whole free enter¬

which

This

handles

financial

trans¬

Feb.
de
in

in

than 2,000

the

has

been

instru¬

financing of

more

producing oil wells.

Financial

the
4

with Walstoa

in

Chronicle

Johnette

rities

had

business,
as

Avenue;

secu¬

the

address was
236 South Cottage Grove

this

should

have

6236 South Cottage Grove

Chicago.

of

that J. C.
opened offices

reporting

Chicago to engage in the

shown
company

mental

was

CORRECTION
In

dent

Zink

& Co.

He is also Presi¬

which

steps by which

but

spe-

related to it

Commission

and
can,

there

of educational

port, which will

Mr.

bot.

conviction

policies

state 0f the Union,; Budget, Economic, and Special Messages com¬
bined to place us, as I see it, in

The

basic

whole
new

unfolding

address

by Mr. Stassen before
Foreign Press Association, New York
City, Feb. 1, 1954.

the

sumption

mili-

and

this situation.
*An

the

take

the

payments

same

tions. So much of what

this

the

upon

development among the

to

that

a

nations.

ground sketch let

from

in

now

^e ingenuity, the exchange, and
the

reports

indicate

are

concentrate

so

preliminary statement, I believe I
should say to you that the current
coming

we

with

of

ance

in

way

e

President.

producing side and

sities of the Korean

yet fully appreciated what has ac- forward,
tually resulted from the energy,

porting

the

year

high state during 1953.

Free World Economic Progress

From

the

nations

a

by Edward T.

shaw-

response

dividends from increased producitivity and their return in improvirig standards of living must come
about, in

an¬

Manufacturers Trust

been

major

it.

an

.

ment

fifth

from

Far

to

_

Latin

Our

a

eco-

ing, according

the whole world conditions in the

takes

course,

the»

meet¬

Buchanan & Co.*
Finance; Sterling
tendency to experience shortages Nordhouse, Committee on Admis¬
the extreme economic crises that trade, the whole free world can
in balances of payments and in¬
sions; Charles J. Kershaw, Com¬
forward
in
an
followed
in
the
wake
of
the move
upward flationary effects is most severe.
mittee on Arbitration; Walter T.
tragedy of World War II that very progress in standards of living and But as these
problems are ad¬ O'Hara, Thomson & McKinnon,
few realize the extent of the enjoyment of the consequences of dressed in the
meetings of the Committee on Public Relations;
progress that has been made in the tremendous production which
Organization for European Eco¬ George C. Donelon, Realty Comr
re-establishing economic strength, comes with the increased freeing nomic
Cooperation, in the meet¬ mittee and Joseph F. Reilly, Com¬
trade,
and
standards» of
liying UP of economies, with-.all that
ings of the Commonwealth Fi¬ mittee on Business Conduct.
amopg the free nations. In fact, means in initiative and ingenuity, nance
K
<*
i
>
•- ♦
"•*"'» *'•
' •
•
Ministers
of the
sterling
many
of the economists of the I sense, from current and recent
area, in our own considerations,
world — within our own country indications
from, many nations, and in the capitals of the nations
and the other countries—have not that that process is now coming
of the world, I am optimistic that

East, and Africa, the Far East, and
America.

is"•

it

I

entering. I think there has been

Near

*

do

Rather, I am trying to place a perspective from which we begin to
think

Secretary

that

concern.

the

:

Nor

;

for relaxation of

now

nomic

regions.

indicate

to

policy
guidance of

eign
Harold E. Stassen
■

various

activi-

In

der

these

ization

capacity

expanded

at

group's organ¬

cur¬

'wake of World War

,

United

our

productive

reflects

ber,

tion among;the-free* i^UOns^ v ^v/ rhethodst by which workers of the
defense;,- .Let me hasten, to add that that if ree nations as a whole—engaged
technical, and does not mean that there; are1 not MflU^imning;
manufacturing, and
East -W est continuing, very
serious,: and4 im- transporting of goods and services
tradeaspects portant. economic r problems! in"I.'arourtd fthe world — obtain their
c

board

capacity

bit ahead of

been

the

on

instances
i

e c o n o m

Exchange
governing

cotton which moved out ahead in

^ the. world.

-sent;-put4from{>: theThis--progress,* of

a

American Stock

easily tend to be out in the

matter

I
increasing

an

productive

run

the

United

by

consequences.

-bflievV'. there: '^

of

situation

a

—

in'-1p'^^-Ogftitibn of. this fact, currently

camer

have

McCormick,

that

pressures

advances

background

a

nouncement

y

inflationary

loss

J. Kershaw partner of
Reynolds & Co., was elected to a
one year term as Vice-Chairman

all

are

situation; In this readjustment, we
are
world-wide 'wand In the

reflecting tft-

new

or'the

Charles

to

most

most

an
advance in wages
of i;he workers of free natrons can

place without

any

report

the

have

front

e

the

time;;when

••

sketch

/

wish

not

strenously for purposes of war or
that. by
their nature expanded

,

is

did

opening

Exhange

Elects C. J. Kershaw

consuming power, then those

that

that is present in the
economy of

right.This

I

me

elements

area

aare
10ns as a w ° e»

American

of the problems.

which

rent

and

world

Let

some

begins to

materials, textiles

the

my

Whenever you

whole, and with the stability

a.

in

that

of

over.

leveled

inventories

good

said

indicate that the problems

a

food

-take

some

that'

reserves

inflationary

^:^conditions
^ ree

sharp1 aev

gree, including of course
crease'" in

has

as

those "currencies

a

I

part

as

and

"

Ad-

Cur¬

purchasing
production,

respect,

every

supplies of

ironed out, in a
comparatively short space * of months,there
will be an upward
development of total. economic acti^ty,
v
within the United States and other nations.
^
Operations

almost

off,

significant advance inreal wages sincex
and/after adjustments to a peacetime situation are

jThe -•.Foreign

II.

power

current

with

•;

nations will have most

•4-

War.

move

Background of Pending Problems

capacity for "rather easy additional
expansion. So that at this point

the present situation.

the war,

That

power.

in

'W'

World

consuming
by current

measured

Executive Office of the President

Among the favorable developments he
notes: (1)
curbing, as a whole, of inflationary pressures; (2)
re-establishment of productive capacity, and
(3) added military V
strength. Says 1954 will be year in which workers of the free v;

of our country
joint problems.

area

upon our

rently, production among the free
nations is moving a bit faster than

Director, Foreign Operations Administration

..

since

year

By HAROLD E. STASSEN*

describing briefly the status and operations of the For¬
eign Operations Administration, Mr. Stassen reviews economic
progress of the free world in 1953 and gives an appraisal of

prise

signifi¬

cant advance in real
wages of any

21

been

Avenue*

22

The Commercial and Financial Chronicle

(790)

credit

ultraconservative

Consumer Credit—A

Dynamic
American Banking

Force in

N. C.

Mr. Woolicott points out

that despite indications of reduced
upward trend of consumer credit,
of credit have situation well in hand.

consumer

earnings and

banks

this

in

class

an

Warns, however, the credit
dictates

sense

sound

the

should

of

the

cant

Urges banks recognize

ment

ABA

is

jobs

Credit

time

review

to

the

of

the

statistical

to

consumer

time

from

economic

conditions

Instal¬

of the

Commission

business

and

af¬

fecting

credit.

and

give

to

Federal

latest

the

for

cerned.: /A

the

held/the

of:

this

review.

Until

decently,;

ing

payment

should

establish

a

meeting

.

this meet¬

equally helpful.

is

brief—and very sim¬

a

(1) Overtime
Pmiip

most

Vv

increasing

con¬

meaning a
take-home pay and

in

reduction

this period of rising
with incomes and

al¬

appears

pay

out,

universally

purchasing power to that extent.
(2)

In

some

has

ment

unemploy¬

areas,

begun

to

re¬

appear,

there were few prob¬ sulting in a few sour spots, with
lems to test the real capacity of some dealer mortality and repos¬
credit men and the wisdom of session of consumer goods.
credit

But

policies.

All reporting bankers agree

(3)

that comfortable

that production

changing

overtaken

period

picture has been
the past year, and

for

ourselves in

find

far

as

new

a

credit extension

as

concerned.

is

Last year,

true

sufficient

be

to

either in

equity

total

~

the Instalment Credit
of the American

tional requirements of consumers.

debt

consumer

They should broaden their opera¬
tions in this field until they in¬

debt held

by banks is substantial in size,
large in proportion to totals, and
therefore worthy of the greatest

clude
of

sult

on the whole has
consumption. One re¬

this

of

for

example, has ap¬

nationwide, in the heavy
pressure
on
automobile dealers

peared

their factories to absorb the

from

should

be

maintained

„

delinquencies

as

continu¬
are

of

one

best indexes of control.

our

of

financing

the

all

types

goods and services—

consumer

of top management not just a few chosen types—until
making of policies relating they include individuals and deal¬

consideration
the

in

is

its

in

tremendous

nomic impact.

needs

has

the

the

today
lateral

and

,

three

base

form-

miracle

the

for

an

American

of

-.Whereas

prosperity.

ago - banks v could
change
their instal¬
ment credit policies with aft eye

some

years

drastically

>

full

and

of

development

a

potential

of

consumer

the

function

true

banks—

of

their

inseparability from the
economy — and simplify
the political problems which face
of

nation's

as

that
equi¬

production

Such

men

banking will create a still wider
and
fuller
public understanding
of

Consumption credit
so
integrated with

become

distribution

,

individual

of

women.

great contributing factors to
the high scale of living in Amer¬
ica.
A few decades ago, produc¬

equal.

they include all
services
fitted to the

banking

eco¬

It has been one of

the

their

in popu¬

lar centers—until

This large amount of instalment
credit

in all areas—not just

ers

thereto.

credit has thrust itself forward

reexamined constantly/with care¬

banking today and will continue
to do
t

so

in the future.'

/

;

Undoubtedly in this period when
production, has caught up with
consumption, when more care is
v

being exercised in the extension
credit, and when other factors

of

are,

appearing which will tend to
the

reduce

volume

of

instalment

only to whether or not they chose
credits available to banks, we may
question as to do
so, today a different situa¬
to
whether such/credit policies
have a welcome period in which
tion exists because a drastic tight¬
would
to catch our breath, as it were.
unduly restrict the flow
ening of instalment credit policy
of consumer credit and the dis¬
But we should get busy on our
nationwide would
critically dis¬
tribution and production of goods.
policy making because we may
rupt
consumption,' distribution,
The question is a valid one. Will
not have too much time to catch
and production.
The determina¬
a
dealer failure here or
there
our breath.
On Dec. 31, with the
tion of instalment credit policy is
make us sour on dealer business?
headline of Washington, there ap¬
no
longer - just
a
departmental
Will we set a hard and fast policy
peared a short item in our news¬
matter
but one
which demands
of eliminating all small or weak
papers
published by the U. S.
the most statesmanlike considera¬
dealers? Will a good fat loss due
Census Bureau.
It said that the
tion of each bank's top policy¬
to fraud or to our own careless¬
estimated population of the United
making group.
ness make us cut out a whole type
States for Jan. 1, 1954, was 161,of business?
Will greater collec¬ / Not the least of the factors in 200,000—2,700,000 higher than the
consideration of consumer estimate of one year ago and 10,tion problems and higher /Collec¬ any
tion expense make us too con¬ credit policy are its tremendous 000,000 greater than at the. last
social
and political implications.
servative? • Will we be too harsh
general census in April, 1950, less
Now

plified—summary:

power

we mow

auto¬
down-

Dealer situations should be

(4)

ously,

,

were

banks'

of

the

of

and the amount of this

-

misuse and obsolescence.

was

tinuously,

their

financing

to

.

were

Here
■

relatively
simple and
economy,

the

mobiles and appliances the

exchange

and free discussions in

of

collection of

spending

similar

of bank¬

years

outstanding

.

credit and the

' In

re¬

on

dealer guarantees.

on

credit

,

s; i n
which the ex-•

easy.

In

col¬

on

Corporation, some of ful inspection of floor-plan items
their associates, and representa¬ and immediate follow-through of
tives of the Comptroller of the irregularities of any kind.
(5) A strong collection effort
Currency's office. The exchanges

year

loans

rather than
values alone,
or
or

(2)

next day with the di¬
of
the
Federal/ Deposit

rectors

enjoyed
a
long period of

in¬

total

in recent

use

billion

$21

size

insurance

.the banks had ">■

tension

credit poli

pay,

lateral

Reserve

The

shows

lar

ing facilities by individual people,
the man on the street, in the shape

and pooling of information was cash or by trade-in.
(3) The term of such credits tion credit and distribution credit
informal, purely objective, most
stood alone as acceptable forms
be .sufficiently
short to
cooperative, and s felt to be ex¬ should
of credit; but today consumption
tremely
beneficial1 to all con¬ protect equities from depreciation,

member banks--

benefit

to

serves

relating

information
credit.

consumer

be

the

their responsibility to meet credit requirements of consumers
and therefore to broaden their lending activities.
One

should

(1) Credit should be based on
character, ability, and will¬
ingness of each individual appli¬

policy, regardless of pressures of competition.
Lays down rules for consumer credit, and upholds role of
credit in national economy.

field of

shaped with these
thoughts in mind:

loan

consumer

Federal

recent

most

Bulletin

stalment

perfectly true that
course; has
changed.

cies

has changed, and common
stick to a specific and

course

bankers

that

either small or insignifi¬

The

cant.

of of instalment loans, the financing
with the commercial of automobiles and appliances, the
banks holding almost half of this operation of pay-as-you-go check¬
the
credit
Common sense * dictates that we total against their total loans of ing accounts, and other banking
should weigh carefully the cur¬ all kinds of $67 billion.
Statis¬ services redesigned and stream¬
rent factors affecting instalment ticians and economists argue end¬ lined for popular use.
All banks, not just a limited
credit and determine upon a spe¬ lessly over what should and what
cific and sound loan policy which should not be included in con¬ number as at present, should rec¬
we
should stick to, regardless of sumer credit; but no matter which ognize and carry out their re¬
the pressure of competition.
In way you look at the figures, the sponsibility to meet the total na¬

ABA

President, the Bank of Asheville, Asheville,

of being
Reserve

Credit Course Has Changed

However it is

a

By PHILIP WOOLLCOTT*

Chairman, Instalment Credit Commission,

policies

which could damage our economy.

1954

Thursday, February 18,

...

back

to

the

the borrower whose income is

on

Whether

it

like

we

not

or

the

than four years ago.

subject of consumer credit is in
The question is not where is the
production, or reduced? Will we forget that con¬
the spotlight.1; For the past year volume
credit
had
its origin
in
of business to come from
Bankers Association began to feel overproduction if you prefer; sumer
in particular, it has been the num¬
Failure among automobile dealers loans to aid. those burdened with
but'how are we going to develop
that the statistical data gathered '
Will we be willing to take ber-one subject of debate among the means of handling it. Because
has; begun to appear, that is to debt?
by various bank supervisory agen-i
cies were inadequate and general¬ say among the less experienced only the cream, hoping that others economists, financial writers, economic conditions as we view
bankers, supervisors, lawmakers, them
ly too late to be used as the sole dealers, but a healthy, sign has will care for the remainder?
today
present
a
slightly
others.
Newspapers, maga¬ clouded picture, let's not run to
Other types of lenders in the and
the
resistance
of
basis for formulating changes in* been
many
dealers to taking more than their instalment field may be able to zines, and the general public go cover
credit policy.
and
With
faces
hidden,
A need was felt for
for
it
avidly.
The spotlight is let other financial
some more down-to-earth method
agreed quotas of '53 models and do so, but it is not that simple
agencies—may¬
Commission

of

gathering fresh information at

the

directly from

roots,

grass

themselves

bankers

throughout

the entire country, and

in regional
groups rather than in one

area

or

countrywide total.

The Adivsory

remainder

the

1953

of

wholesale

pay

by
to

or

their

of

reduction

commitments

cancellation

banks

The

drafts.

year-

end oversupply of

the

'53 models plus
excessive
used-car

already

inventories has brought back real

for the banks.

We have

a

respon¬

sibility to the factories that
duce

goods, to the dis¬

consumer

tributors
retail

of

these

dealers

pro¬

who

the

individuals

and

goods,

to

the

ity

sell

on

any

the subject—or by almost

one

who

word—is

a

cares

At

every

of control

of

consumer

new

government agency
of these mil¬

business

lions of people.

to offer such

headlined.

them, to
session of Congress, the question
buy them,

to

who

down so furiously that be even a
the slightest word by any author¬
—get the

beating

This
to

is

is

think
the

the

in

broader

time

;

.

for

time

for

all

of

terms.

instalment

us

This
credit

credit in¬

the individual borrowers
operators to lift their sights above
vites a skirmish between its pro¬ volume
and departmental prob¬
the who come directly to our banks
for a multitude of purposes other ponents
and its
opponents.
It lems—to shape their policies ac¬
sale.
Dealer
such
information.
Two
bankers blitz
pressure
has
than
the purchase of consumer has created factions among con¬ cording to the broad requirements
from
each
state,
familiar - with begun to mount on lenders for
These all are our cus¬ gressmen themselves. It has cre¬ of their entire banks. This is the
local business and economic con¬ smaller down-payments, narrower goods.
ated
such questions as this:
If time to
ditions, as well as being leaders equities, and longer terms; but tomers, and as such are our re¬
recognize the earning po¬
Federal controls can be used to
in the consumer credit field, were here again
tential and the good will and cus¬
banks have resisted sponsibility. We have a responsi¬
down-payments and to tomer development
and stood out for sounder terms bility to our community—to our increase
appointed to the Advisory Board.
possibilities of
shorten
terms
in
the
hope of a positive and constructive atti¬
The state members in each Fed¬ and better credits.
economy. During the past decade

the

to

Board

Commission

eral

went

competition with its many pricereduction

elected

one

chair¬

district

members

Last

man.

formed to

District

Reserve

their

of

Credit

gather

Instalment

was

fall, these 100 bankers

to

work, each in his own
back yard, to learn all they could,
through direct communication
other bankers

with

economic

conditions in

with

states,

and

their

own

emphasis

This

credit.

study

included a careful survey of in¬
stalment credits and the inventory,
situation

dealers.

of

ten

Each
made

of

the

made

studies

by

results

his

the

of

the

district

Washington

lowing

these

in

met with the Board

the

of

'

Federal

of

some

held

November.

reports,

the

in

Fol¬
group

of Governors

Reserve

their

System

associates

and

exchanged this grass-roots, freshinformation

f rom-the-f iring-line
.iii

ii.i

•An

(he

•

-

j

,

address

National

American

"

by Mr. Woollcott before

Credit

more

and

more

expense

from

appeared
of

awareness
—an

changed
that

awareness

all

sec¬

and to

into

policies

resulted

Conference

Bankers

of

the

Association,1 Chicago,
Illinois, Jan. 26, 1954.




To

it

put

well

in

hand that in

discussion

that,

and

are

on

for

customers

the

privilege of

of

be dropped with any change

fancy.

•

•

,

Increase in Instalment

*.

Credit

By Banks
.

extending:

point is it to

hungry, and dynamic

loan
years,

new

'!

.

Wilson, Doke Join
First of
First

of

announces

Michigan

Michigan
that

:

Corporation

Arthur J.

Wilson

already

gentlemen,

require

to

you

insignificant

consuifier debt has

mem¬

ber of its family.

give Street, and that H. Richard Doke
has

become

firm's
ment

associated

municipal

.

at

the

with

buying

main

office

..
part /sumer credit.^
troit, Buhl Building.
Banking needs a broad under¬
and produced
standing on the part of the public
a
small fraction of. y. their
Joins Livingstone
portfolios.
But
im/recent if it is to receive fair political

an

political
vigorous,

operating in many has joined the firm as an Institu¬
fields of credit. Why not in con¬ tional Sales
Representative in the
sumer • credit?
Such
questions, Chicago office, 135 South La Salle
are

the most careful thought and con¬

credit of; their operations
only

and
this

of

How

a gov¬

Until very recent years, the in¬ sideration to the position you will
stalment credit activities of banks -take in all policies relating to con-

time when the need

social,

potentialities

just have

-

so

to

must—must extend, not

banks, we are making a two- ernment lending agency to supply
tie with them. It is like the instalment credit on the maximum
set
old-fashioned marriage — for bet¬ terms
by
the
regulatory
ter or for worse.
Not like the powers if the banks do not fall
Government agencies
new
fashioned
marriage - which into line?

have

as

we

economic,

way

might be great. All members of
the Advisory Board present were

a

take

we

fail to -pro¬ -represented

instalment

adequate

far from this

as

the

our

the general
these

arose

answers

with our power soon say, if they feel credit
them to should be expanded, that lenders
to their must reduce down-payments and

extend longer terms—and I mean

find

may

—

and

helping

credit, cannot the

When

up

might not become

too conservative

facilities at

hand

and

followed

meetings.. question
whether banks
vider

banks

in

well

industry

the

the available supply of tude toward consumer credit. This
reverse of this is the time for
top bank manage¬
power be used?
Namely, cannot ment to give a larger share of its
the
holders
of
this
regulatory time to the consideration of the
reducing

trying
right answers to our
problems in these changing times.

realistic IMe

briefly,

situation

are changing, we
the burden of work¬

right
problems—just

to

bring their

with current conditions.

the

with

ing

business.

consumer

cannot escape

thorough

by banks to clean

situations

of

that times

Now

find

positive action already having

been taken

volume

conditions

has

banks have developed a large

our

customers

existing low ratios.

tions of the country is a

in

effort is

associates

chairmen
-

ago—but everybody

One of the happiest things
has

writ-1

in the several states and reported
this in. person
at a meeting of

and

(5)
that

credit

digest

year

that much

maintain

the

of
a

a

required

now

delinquencies

in good shape—just slightly

reports

sour

district charmen

12

above

to

including

Instalment

appear

business¬

particular

consumer

on

and

about current business

men,

(4)

devices,

the

depart¬
in

De¬

.

t

grown

treatment.-

No

activity of
banks has brought greater public
single

i

Staff

-

(Special to The Financial Chronicle)

BOSTON, Mass.—Maurice FiKe
opinion that larger and larger and the con¬
and' support >of is with Livingstone and Company,
adequate sumer banking activities of banks •understanding
credit—that they would not adopt have moved well beyond the stage :banking than the wide and popu¬ 10 Post Office Square.
...
/

definitely
banks

■)

of

would

the

;

-

provide

.•WMMMWMlW

Volume 179

<tW

Number 5300

.

Wt

'

.

.

„

The Commercial and Financial Chronicle

(791)

MEMBERS OF

THE BOSTON SECURITIES TRADERS

ASSOCIATION

30th ANNUAL

At Sheraton Plaza Hotel

%

DINNER

February 11, 1954
President

Vice-President




Treasurer

Corresponding
Secretary

23

24

The Commercial and Financial Chronicle

(792)

.

.

.

Thursday, February 18. 1954

i

•

•!

#

.

in NEW ENGLAND
for

than 100 YEARS

more

ESTABROOK iS Co.
IS STATE STREET, BOSTON
Boston

Boston
New York

James

Hartford

B.

McFarland, Hecker & Co., Philadelphia; J. Edward Knob, Drexel & Co., Philadelphia;
Byllesby and Company, Incorporated, Philadelphia; James J. Lynch,
John R. Stein, Wm V. Frankel & Co., Incorporated, New York

Charles Wallingford, H. M.
Paul D. Sheeline & Co.;

Telephone LAfayette 3-2400
Teletype BS-288

Poughkeepsie

Providence

Members New York and Boston Stock

Springfield

Exchanges

Kidder, Peabody & Co.
Founded

in

1865

Members New York, Boston, Midwest and
American

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Exchanges

Trading markets in
Bill

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England Bank, Utility and Industrial Stocks

75
Telephone:

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New

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•

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•

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N£W YORK

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Street,

Kumm, Coggeshall & Hicks, New York; A1 Dykes, du Pont, Homsey & Company; Jim
J. B. Maguire & Co., Inc.; Harry L. Arnold, Goldman, Sachs &
Co., New York

•

Taunton

UTILITIES

MARKETS
INDUSTRIALS

WITH COMPLETE

Mark A.

Means, F. L. Putnam & Co., Inc.; John D'Arcy, F. L. Putnam & Co., Inc.; Bob
Topol,
Company, New York; Frank Harrington, H. D. Knox & Co., Inc.; "Duke"
Hunter,
Wellington Hunter Associates, Jersey City, N. J.
'

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TRADING FACILITIES
BANK

BONDS

•

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AND

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DETROIT

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Gene

Hussey, First Boston Corporation; Irving LeBeau, May & Gannon, Inc.; Pat
Rafferty,
L. Putnam <£ Co., Inc±; Jim Galvin, F. L. Putnam &
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—•—Hanrahan
&
Co., Worcester, Mass.

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Volume 179

Number 5300

...

The Commercial and Financial Chronicle

(793)

25

F. S. MOSELEY & CO.
Our

Seventy-Fifth Year
MEMBERS

New York Stock
Boston Stock

American Stock Exchange

Exchange

Midwest Stock Exchange

Exchange

Underwriters and Distributors

CORPORATE

AND

of

MUNICIPAL

SECURITIES

Frank J. Ronan, New York Hanseatic Corporation, New
York; John
Chas. Robinson, Blyth & Co., Inc., New York; Joe

Ingham, Blyth & Co., Inc., Boston;
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We maintain active markets
Curtice Town send, Weeden & Co., Boston;

Tripp

&

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Peter Burnett, Minot, Kendall & Co., Inc.; Dick Taber,
Bedford; Jim Sullivan, Baldwin, White & Co.

in securities

of

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York
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Walters, Jr., Cosgrove, Miller & Whitehead, New York; Bud Lewis, Weeden &
Murray, May & Cannon, Inc.; Alfred Zuccaro, First Boston Corporation

;

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31

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Members New York and Boston Stock Exchanges
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Drummey, Jr., Bank of Nova Scotia; Ray Bond, J. B. Maguire & Co., Inc.;
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26

(794)

The Commercial and Financial Chronicle

'

...

Thursday, February 18, 1954

Bank & Insurance Stocks
Over-the-Counter

Securities
Inquiries invited in all Unlisted Issues

Trailing Department. LOUIS A. GIBBS, Manager

Laird, Bissell & Meeds
NEW

MEMBERS:

YORK

AMERICAN
120

EXCHANGE

STOCK

EXCHANGE

STOCK

BROADWAY, NEW YORK S, N. Y.

llell Teletype NY 1-124349

Telephone DArclay 7-3500

DIRECT WIRE CONNECTIONS TO

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St., Boston, Mass.

St.,

Springfield,

DU PONT

&

COMPANY

Spring St., Los Angeles, Calif.

South

LIBERTY BUILDING
PHILADELPHIA, PA.

LINCOLN

44 WHITNEY AVE.

BUILDING

WILMINGTON,

NEW HAVEN, CONN.

DEL.

Co.;

123 S. Broad St., Philadelphia, Pa.

Mass.

MITCHUM, TULLY
650

Montague, Minot, Kendall & Co., Inc.; Edward Lawrence, Hemphill, Noyes &
McCue, Goodbody & Co.; Harry Crockett, Coffin & Burr, Incorporated

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CO.

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SO YEARS Of SERVICE ft

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Listed and Unlisted Bonds and Stocks
particularly of

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England Corporations
Inquiries invited from Dealers
and Financial Institutions

Maintaining

a

Bunny Libby, Coburn & Middlebrook, Incorporated, Hartford, Conn.; Jack Puinam,
W. E. Hutton & Co.; Lou Walker, National Quotation Bureau, New York;

Retail Department

George V. Hunt, McLaughlin, Reuss & Co., New York

with Distribution in New England

WASHINGTON AT COURT STREET
Member Boston Stock

Exchange

NEW ENGLAND SECURITIES
Direct Wire to Boston
.

r

- -

,

LAfayette 3-0610

■,;$.«

.

*

i

.

G. H. Walker & Co.
Established 1900
MEMBERS

NEW

YORK

&

AMERICAN

MIDWEST STOCK EXCHANGES
STOCK

EXCHANGE

telephone union

1-4000

-

.

(ASSOC.)

,

•

"•

PROVIDENCE 3, R. I.

15 WESTMINSTER ST.

Conary, G. H. Walker & Co., Providence, R. I.; Lee Hallett, Goldman, Sachs & Co.;
Ray Murray, Tucker, Anthony & Co.; Fred Carr, Tucker, Anthony & Co.

;

DIRECT PRIVATE WIRES TO

^

NEW.YORK. ST. LOUIS,

Wilfred

bell teletype pr 43

BRIDGEPORT, HARTFORD AND WHITE PLAINS OFFICES

Dealers

Coffin & Burr

and

Brokers

in

GENERAL MARKET ISSUES

Incorporated
Founded 1898

Specializing in

Trading Markets in

NEW ENGLAND SECURITIES

New England Securities
/

.

BOSTON
NEW YORK

PORTLAND

HARTFORD

BANGOR

Boston Stock Exchange

Midwest Stock Exchange

Amebican Stock Exchange




1

Carr & Thompson, Inc.
31

MEMBERS

MILK

BOSTON

STREET

9, MASS.

(Associate)

Telephone HUbbard 2-6442

Bell System Teletype BS 328

Volume 179

Number 5300

...

(795)

The Commercial and Financial Chronicle

Bill

Salisbury, Union Securities Corporation, New York; Bill Burke,
May & Gannon, Inc.; John Meyers, Gordon Graves & Co., New York

Dan

27

Quinn, Schirmer, Atherton & Co.; Al Leland, Geyer & Co., Incorpo¬
rated; Jim Kelly, Tifft Brothers, Springfield, Mass.
Rod

Darling, dfu Pont, Homsey
<ft Company

Investment
Bonds and Stocks
Securities of the
United States Government
and its Instrumentalities

Robert
&

Torpie, Torpie & Saltzman, New York; N. Irving Maxfield, Cohu
Co., New York; 'Graham Walker, Joseph McManus & Co., New York

Jim

State, Municipal and Revenue

Duffy, Paine, Webber, Jackson & Curtis; Jim Moynihan, J. B. Maguire
& Co., Inc.; Phil Kenney, E. M. Newton & Co.

Securities

Bonds, Preferred and
Common Stocks of Industrial,
Public

Utility and Railroad
Corporations

Bank and Insurance

Company

Stocks

Bankers'Acceptances
Securities of the
International Bank for
Reconstruction and

Development
Canadian Bonds

Foreign Dollar Bonds

Underwriter

Distributor
New York

Boston

PRIMARY TRADING MARKETS IN

UNLISTED SECURITIES
Direct Telephone to our Domestic

^chifmer, Atherton & Co.; Col. Oliver J. Troster,
Troster, Singer & Co., New York

J. B. MAGUIRE & CO., INC.
31 Milk

and

Canadian Trading Departments in New

Street, Boston 9, Massachusetts
PRIMARY MARKETS

York

Utility and Industrial Stocks
Direct

Goodbody & Co.
Established

York

Stock

1891

New York

Exchange

American Stock

Exchange

„

Private

*

New England Securities

Phone

to

A. M. Kidder & Co., New York
for

Members

New

Pittsburgh
San Francisco

Cleveland
George Stanley,

Dealer

Philadelphia

Chicago
Charles Smith, Moors & Cabot, Boston; Wm, Eiger, Good body & Co.,
New York; Bert Woglom, Goodbody & Co., Boston

•

Cotton Exchange

I

New York Bank & Insurance Stocks

Chicago Board of Trade

Midwest Stock Exchange
and

other

principal Stock and Commodity Exchanges

140 FEDERAL STREET,

Telephone HUbbard 2-9070
Direct New

Teletype BS 189

York to Boston Telephone BArclay 7-0183




Open-end Telephone Wire to New York

BOSTON 10, MASS.
New York—CAnal 6-1613

Providence, R. 1^—Enterprise 2904

BeU

System Teletype—BS-142

Portland,

Maine—Enterprise 2904

Boston—HUbbard 2-5500
Hartford, Conn*—Enterprise 6800

28

The Commercial and Financial Chronicle

(798)

.

..

Thursday, February 18, 1954

Birney Halliwell, F. S. Moseley & Co.; Clem Diamond, Townsend, Dabney & Tyson; A1
F. S. Moseley 4k Co.; H. L. Keller, Keller Brothers Securities Co.

Lester Doucet, Salomon Bros. & Hutzler; Paul Monroe, R. W. Pressprich
Bean & Machie, Inc., NeW York; Adie Starkel, Putnam &

Crosby,

4k Co.; Jules Bean, Singer,
Co., Hartford

Underwriters, Dealers and Brokers
State and

Municipal

Corporate Bonds
and Stocks

Bonds

Retail Distribution in New

England

Chace, Whiteside, West & Winslow
INCORPORATED

24

Federal

Phoenix

Street, Boston

Bank

10

Bldg., Providence 3

Bill

Thompson, Carr & Thompson, Inc.; Frank Harrington, H. D. Knox 4k Co., Inc.; Phil Kendrick,
Securities 4k Exchange Commission; Jack Altmeyer, Hayden, Stone <ft Co., New York;
John R. Stein, Wm F. Franhel 4k Co., Incorporated, New York

TOWNSEND, DABNEY & TYSON
ESTABLISHED
Members

New

York

Associate Members

and

1887

Boston

American

Stock Exchanges
Stock Exchange

30 STATE STREET, BOSTON 5

UNLISTED SECURITIES
ORDERS EXECUTED ON ANY EXCHANGE OR MARKET

Private Wire System
New York

Telephone CAnal 6-1540

Teletype BS-346 for Trading Department
BS-430

for

Municipal

Department

Branches:

Branches:

Fitchburg, Mass.

Portland, Me. Lewiston, Me.
Augusta, Me.

Bangor, Me.

Greenfield, Mass.

Lawrence, Mass.

Keene, N. H.

Manchester, N. H.

TELEPHONE BOSTON: LAFAYETTE 3-7010

CABLE ADDRESS "SENDANTHY"




Giles
4k

Montanye, Eisele 4k King, Libaire, Stout 4k Co., New York; Frank Breen, Schirmer, Atherton
Co.; Norbert Woods, R. L. Day <ft Co., New York; Carroll Williams, Laird, Bissel 4k Meeds,
New York; J. R. MacDonald, Paine, Webber, Jaeheon A Curtis

i

Volume 179

Number 5300

...

(797)

The Commercial and Financial Chronicle

29

TEXTILES
DEALERS.•.

INDUSTRIALS
PUBLIC UTILITIES

BANKS
INSURANCE

John Friberg,

Boston Safe Deposit & Trust Co.; Ray Chamberlain, F. S.
Emery & Co., Inc.; A1 Moore, Eastern Securities, Inc., Boston

HOTCHKIJN CO.

Telephone
LAfayette 3-0460

Dealers

Unlisted

in

Established

Cable Address

STATE

53

"Tockin"

BOSTON

Wadsworth, Arthur G. Wadsworth & Co., Dartmouth, Mass.;
P. Judson Munn, Jackson &
Company, Inc.

Arthur G.

WE

Securities

J908

STREET

9,

MASS.

OFFER

TELEVISION AND RADIO

BROADCASTING CORPORATION
PARENT

Bob

Akin,

Boston

Post;

Edmond E.
&

Hammond,

Paine,

COMPANY

OF

WESX

WJDA

Webber, Jackson

Curtis

SHORE BROADCASTING COMPANY

SOUTH

QUINCY, MASS.
NORTH

BROADCASTING CORPORATION

SHORE

SALEM, MASS.
BAY

COLONY TELEVISION CORPORATION

BOSTON, MASS.
These Shares

PRICE:
Write

are

offered

as

a

Speculation

$1.00 PER SHARE
for

Offering

Circular

JACKSON & COMPANY, INC.
Dudley, E. S. Dudley Co., Inc.,
Manchester, N. H,; Les Swan, Chas W.
S.ronton & Co., New Haven, Conn.
S.

Earl

Milk Street, Boston, Massachusetts

31
Member

Association

National

of Securities

Dealers, Inc.

Specializing in
Burt

Whitcomb, Harriman Ripley & Co. Incorporated; Bob Blair, Harris,
Upham & Co.; John McCue, May & Cannon, Inc.
f

*

Maine

~

New

s

>

Hampshire
Vermont

Massachusetts
BANK STOCKS

PAUL D. SHEELINE & CO.
31

Milk Street,

Boston 9, Mass.
Teletype BS-51

Telephone Hancock 0170

GANNON
Rinaldi, Lerner & Co.; Wil'red N.
Day, Chas. A. Day <ft Co., Inc.

inc.

Joe
Bill

Swift, Draper, Sears & Co.; Curtis Bates, Draper, Sears & Co.

,

I 6 I

Devonshire

BOSTON

9 MOS.

Union
New

Carbide
2.51

England Lime*

Memorandum

1953

PRICE

1.65

1.11

$34%

3.02

—

1952

236

233

40

3.60

Chemical

APP.

1951

2.00

19501
Mathieson

3.41

2.72

64

3.02

2.75

236

16

on

request

DAYTON HAIGNEY & CO.
Incorporated
75

FEDERAL STREET, BOSTON




INDUSTRIAL

Metallurgical Company

Dow Chemical

10, MASS.

Street
MASS.

Primary Markets

NEW ENGLAND LIME CO.
A Chemical and

10,

■ Support 1

i

fM

1

■■■■

-

TEXTILE

-

PUBLIC UTILITIES

BANK 4 INSURANCE STOCKS

Stocks and Bonds

2
DIRECT

PHONES
TO N. Y.

New York
CAnal 6-2610

Hartford, Providence,
Portland

Call

Enterprise 9830

A. T. & T. Teletype:

Boston

HUbbard 2-8360

Boston 568-569

TRADING MARKETS AND STATISTICAL DATA

30

The Commercial and Financial

(798)

Chronicle

.

.

.

Thursday, February 18, 1954

Established
1926

H.

D.

KNOX
&

CO., Inc.

MEMBERS
New

York Security

Dealers Ass'n

DEALERS AND

BROKERS IN

UNLISTED

W.

B.

Perham, Townsend, Dabney & Tyson; Reginald Whitcomb, Spencer
Co.; James F. McCormick, A. C. Allyn and Company, Inc.

Trash &

Fred

Sutton,

White,

Weld & Co., Boston;

Weld & Co., New Haven, Conn.; John Hart, White,
Leo Newman, American Securities Corporation, Boston

SECURITIES

11

Broadway

NEW YORK 4

Telephone DIgby 4-1388
Bell

System Teletype NY 1-86
State Street

27

BOSTON 9
Telephone CApitol 7-8950
Bell System

Teletype BS 169

Direct

phone between offices

A.

G. J. Caldwell

P.

J. Cline, W. E. Hutton & Co.; George W. Cunningham, Geo. W. Cun¬
ningham & Co., Westfield, N. J.; Samuel F. Colwell, W. E, Hutton & Co.,

&

New

York

Bill

Wadland, National Shawmut Bank of Boston; Harold Vaughan,
Doremus & Co.; Joe Havey, Boston Herald; Hal Murphy,
Commercial

..

& Financial Chronicle,

New York

American Felt Pfd.
American Piano A & B
O. Ames & Co.

Atlantic Coast Fisheries Com.
Stores

Caribe

Cheney Bigelow Wire Works

Paperboard Com.

Chesapeake

Coplay Cement Pfd.
Crosse & Blackwell A & B
Dennison
Detroit

&

Mfg. Com.

Mackinac Ry. Com.

George E. Keith Pfds.
Gorton

Pew

Fisheries

Scale Pfd.

Howe

Pfds.

Knothe Bros.

Louis Dejonge Pfd.
Louis Dejonge Com.

Morgans Inc. Units
National

Company

National Electric

Products

New Bedford Cordage

Paulsboro Mfg. Pfd.
Paulsboro Mfg. Com.

James

Tifft

Penn Anthracite

Units

H. Shattuck, Schirmer, Atherton
Brothers, Springfield, Mass.; Earle
,v

Polaroid

Co.; Arthur D. Farrington,
Amidon, Schirmer, Atherton

L. Daley, J. B. Maguire & Co., Inc.; Lewis D. McDowell, Chas. A.
Day & Co., Inc.; Arthur C. Murphy, A. C. Allyn and Company, Incorpo¬
rated; F. E. Maguire, Stroud & Company, Incorporated, Philadelphia

John

Corp. Pfds.

Revillon
w

&

C.

<6 Co.

Freres

Riverside Cement "B"
Robertson Electric Pfd.
Robertson

Electric

Com.

Seneca Falls Machine

Tejon Ranch
United

Cape Cod

Cranberry

Wiley Bickford

Sweet

Worumbo Mfg. Com.

A MARKET PLACE FOR INACTIVE

STOCKS

ODD

LOTS

OR

BLOCKS

LERNERt CO.
10

POST

OFFICE

SQUARE

BOSTON 9, MASSACHUSETTS
Telephone—Hubbard 2-1990

Teletype—BS 69




Dayton Haigney, Dayton Haigney &
Corporation, New York;

Securities

John Hudson,

Co., Inc.; Walter Saunders, Dominion
Ed Williams, Hooper-Kimball, Inc.;
Thayer, Baker & Co., Philadelphia

Sumner

Peck,

Wolley, Coffin & Burr, Incorporated; Bob McDowell, Adams &
New York; Ed Hines, Chace, Whiteside, West & Winslow, Inc.;
Frank

Laird, Stroud

&

Company, Incorporated, Philadelphia

[Volume 179

Number 5300

Continued from page 2

/'M*v"J-oi ct"J i 'yuv>:

The Commercial and Financial Chronicle

.

;

.

;

plant

'

-

The

tions

available

are

to

the

public
and it is my recommendation that
they be secured by any interested
reader.

Public

interest

in

the

lines.

Consequently, the

large achievements.
general

years ahead.

WINTHROP

New York

City

Leece-Neville Company

in awhile

once

that has installed a research and engineering
department.
These departments
company

horsepower

invent and de1

v e

o

-

old

advantage of the excellent inven¬

/

tions and designs that come from

*

products and

improve

its

upon

In

ones.

visions.

Its

has

stress

upon.';.[•

ufacturing

research

and

they
ing

AC-DC

generating

their-;

In

systems

(known

as

for all

the alternator system)

; heated

wind-shields, fluorescent
; lighting on buses, and for use on

^

railroad

W.

B.

equipment and

Pizzint

and

boats.- It

also

ships

on

introduced

an

depart-

air cranking motor for non-elec-

growth
manufacturing activities,
Companies going in for greater

trical starting and an alternator
transformer for lighting, heating
and small motors.

ments enable the constant
of

their

when

c™hd^rSinrnr eCcenryeaS"
during rece
t years.

Currently a good part of the
or-

dure

company's business represents

the process, if we were
hear about a research organi-

To

reverse

to

^onaj
a

ufacturing

large

and

that

duction

sca}f pr0,"
news,

that comes fairly close
qualifying as
news
is
the

A company
to

w>

This company has

long been
famous for

ternationaly

^its re-

to invent electric lighting systems

automobiles.

first

self-starter

the

in

lines and
reconver-

used

motors

automotive

aiternator

heaters.

rectifier

system

bas increased, in popularity. Sales
of

r

consisting of
cranking motors,
and
regulators, have

equipment>

Dc

g€nerators,
.

gw^cjieg

the

and

—

first

invented

It

horsepower

primarily
rp^e

It was the first company

devices.

na_

A

^onaj

in-

search and invention of electrical

the

However,

large percentage of the
company's sales consists of frac-

•

i.

with

effort.

substantial portion of this busi-

gion

Leece-Neville Company of Cleve,

connection
defense

ness calls for standard
necessitates little plant

be

would

in

derg

zation that had entered into man-.

generator

for

also

for cars. .LeeceNeville, naturally, is not a new
company.
It was incorporated in
Ohio in 1910 to produce the pre-

in-

mentioned-.original

viously

About 1912

ventions of Mr. Leece.

the

duri

gt

geveral

years

it

Stock

990,000 during the last fiscal year
Like many

1953.

than

the

share.

net

produced controls on
pieces, generators and
voltage
regulators for aircraft,
magnetic switches, electrical

artillery

equipment
for
motors,
diesel
World

cranking
cranking
During

starters.

and

motors

boats,
engine

II

War

it

produced

huge

quantities of electrical equipment
the

for

and

Army

Navy,

advanced

using
Down

designs.
through the years the company
has pioneered all kinds of special
and
heavy-duty
electrical
many

equipment for use on automotive
kinds

other

and

"first"

ranked

in

of

engines.

tionary ideas and was
of its competition
in

It

revolu-

many

far ahead
the early

stages of its development.
One

would

ucts
'

over

such

was

years

into a huge
enterprise.
However,

industrial

grown

the

not

case.

It

was

a

closely controlled corporation for
more

not

than

too

30

hard

years.

to

Thus,

understand

it is
the

rather nominal profits made prior
to

1941.

The

business

was

,k

Leece-Neville

com-

a

long period of

a

have

would

expect that

famous for its new prod-

pany so

current

Though

pect

the

riod

of

assets

would

I

not

during

company

in

dends

in

cents

per

12

years

January,
amounted
average

)year.

diviin

paid

business

adverse

a

per

writers.

ex¬

a

pe¬

and

condi¬

up

eo

u r r

reported in 1953, I would expect
it to show an earning power well

your

$1 per share and to pay
substantial dividends.
The stock
looks like

for

V

Association

of

Stock

Exchange Firms in attendance at
their winter meeting at
ham Hotel Feb.

the Shore-

15-17, in addition

to James Parker

Nolan, Executive

have

top
h

a

v

e

sav¬

50

nd i t io

n

amount¬

before. It is true that in-

President,

Frost,

Moreover,

invested

money

we

add back

the

in

even

in after"

set

Yet, most econo¬

it is

now

nearly 10II andt

War

readjustment of

prosperity.

.

<

our

.

.

But, is World War H at
War

W.

the

followed

World

no

continued

but these

during the past 12 months;
are now being reduced.

since

.

have

we

creased

of

War.

true

was

Earlier,

reaction

severe

years

refrigera¬

on cars,

I.

had

mists say that

staggering $97 billions.'\
95% of all families probably have;
more
money in savings accounts
ever

War

country

our

letdown. This

a

Civil

Folger, Nolan—W. B. Hibbs & Co.,

may

we

III?

What

difference
and

a

is

the

between

a

an

in

be

now

end?

World

economic
war"

"hot

"cold war"? I do not

pretend

cannot be written to know all the'answers, but I dothese
pertinent
questions"gone." Homes are always ask
After every period of inefficiency;
a
good investment: So long as
dent, Clark, Dodge & Co., New
one is employed, money
invested waste, and unrighteousness, there
York;
John
J. Sullivan, Vicein a home may be as good a re¬ must always be unemployment to
President, Bosworth, Sullivan &
punish us for our sins. But has.
serve as cash in a bank. In short,
Co., Denver; James J. Lee, Treas¬
this time come yet? Business and
potential buying power never was
urer, W. E. Hutton & Co., New
employment for the first half of
greater.
York; Charles E. Ames, Kean,
1954 could still be at a high level.
Second, our swiftly rising popu¬ So take
Taylor & Co., New York; John E.
courage! The "boom" may
lation—with a record four million
Blunt, 3rd, Blunt Ellis & Sim¬
not
continue, but the future isbirths in 1953—is creating a vast
mons, Chicago; Douglas G. Bon¬
still bright for families who will
ner,
Bonner
&
Gregory,
New number of new wants that must ; work hard and use
any idle time
York.
be satisfied. Ten years from now
; •
'
to study and to build up physical
we may have forty million more
and spiritual health.
Henry M. Cook, Newhard, Cook
in our population than we did at
&
Co.,
St.
Louis;
Charles P.

Anthony & Co., Boston;
M. Geddes, Vice-Presi¬

Tucker,
Eugene

durables

these
off

as

.

Cooley, Jr., Cooley & Company,
Hartford; Roger Cortesi, Auchincloss, Parker & Redpath, New

Cincinnati; Van R. Halsey,
Carlisle & Jacquelin, New York;
Co.,

Hellman, J. Barth & Co.,

Francisco;

Jansen

E.

Hunt,

Weld & Co., New - York;
Roscoe C. Ingalls, Ingalls & Sny¬
der, New York; Robert J. Lewis,
Estabrook & Co., New York.
Charles
McKenna
Lynch, Jr.,
White,

the end of World War II. Take all
the wants and

needs of

one

indi¬

Los Ang. Bond Club
Elects Ryons V.-P.

vidual and

multiply by forty mil¬
lion and you will get some idea of
what

staggering impact the in¬

a

in

crease

have

population
our

on

time

economy

alone can
for some

provided it is of
good character. Population alone
is not enough; people must have
to

come,

LOS
L.

President

good habits, sound faith, and use¬

a

the

Republican

Thinking

been

of

The

the

liberalizing

of

the

Vice-

Club

o£

of

partner

invest-

firm

ment

of

Lester,

Third,

elected
Bond

Los Angeles for the current year*
Mr. Ryons is

ful intelligence.

Liberalized

ANGELES, Calif.—Joseph.

Ryons has

Ryons

&

He

Co.

is

Lynch, Pitts¬
burgh; Robert A. Magowan, Mer¬
rill
Lynch,
Pierce,
Fenner
&
Beane, New York; Lloyd W. Ma¬

thinking of our present Adminis¬

also

tration should help hold our econ¬

ernor

high. For example, it has re¬
versed itself on its hard-money

Investment

Webber, Jackson &
Curtis, New York; Walter May-

policy; credit has been eased. Tax

c

relief for both the individual and

former gover¬

Moore,

son,

&

Leonard

Paine,

omy

Shearson, Hammill & Co., business is already under way.
William M. Meehan, This Administration is prepared to
M. J. Meehan & Co., New York; go further with higher minimum
Herbert O. Peet, H. O. Peet & Co., wages, reasonable aid to the farm¬
Kansas City; Harry C. Piper, Jr., er, useful public works projects,
Piper, Jaffray & Hopwood, Min¬ and broader social security bene¬
neapolis;
Edward
P.
Prescott, fits.
Prescott & Company, Cleveland;
Fourth, the millions of warning
James H. Scott, Scott & String- words and the current skepticism
fellow, Richmond; Wickliffe of the future may furnish a con¬
Shreve, Hayden, Stone & Co., New siderable element of psychological

nard,
New

York;

York; Edward Starr, Jr., Drexel &
Co.,
Philadelphia;' Edward
F.
Thompson, Jr., Lamson Bros. &

;

,

The winter

is

one

meeting of the Board
of' three held annually, in

1947 and in 1950.

Gov¬

a

the

of

Bankers Assoi

a

nor

t i

o

of the Na¬

tional

Asso¬

ciation

Se¬

of

Deal¬

curities
ers,

a

n,

and

Joseph

past

a

President

o

the Los Angeles

A

Association.

L.

Ryons

f

Security Tradersof the

graduate

University of Nebraska, Mr..
Ryons has been active in the in¬
vestment business since 1925, and
strength. There is little question, has resided in California since
but
what
skepticism
has kept 1927.
a

many

businessman

apd

con¬

Co.,
Chicago;
William . F.
Deventer, Laidlaw & Co.,

is

em$t as s s e t s

the

a

stallment debts

History

war,

pattern

more

Inc., Washington, were:

Treasurer

been given*
declines
in

severe.

Your

World

same

Or,

and

given

1 Spanish-American War. An

tors, and television sets have in¬

Vice-President

so

every

has had

—

con-;

vertible

ings

/After

50%. after
fami-

our
e s

readily
Roger W. Babson

than

been

Recall

have

before

1 i

have

been

reading the newspap¬

articles pub-t
preceding the
last depression. I find very few
warnings./Herbert Hoover had

ers

and

magazine

lished in' 1928-1929,

just

been

elected President and

he had chosen an

man's"

'




I

said

I

of

ing to

now

1930-33

too

was

been

building, textiles, clothing, leath¬
er,
and automobiles would not

,

WASHINGTON, D.; C.—Gover-.'
the

it

had

it has

as

great

repeat

"the

of

the

people
I

what

\v

nors

warning

have money to

buy.

-

holding into the future years.

Exchange Firms Govs.
Meet in Washington

If

in 1929

first

the

place,

"

good semi-investment

a

amounted <to $9.78 per share of cities throughout the country to
interests, natur-; itock at the last fiscal year-end. discuss problems of the industry.
ally, were creational rather than Equity for stockholders was
The Board has met here; twice
industrial and financial. A. large shown equivalent to $11.47 per
portion of its products came from * share of stock.1 This might be in>- •previously; since World War II-*in

creased to $14.47 if

your

and
future.

In

over

primary

shop benches rather than assembly

in

before

warned

late.

country

lished by inventors and engineers
whose

faith

guard. Yet, they should haver

been

have

Angeles.

of 63 cents

estab- .*ound. c.Net'-c

their

share per

and
total

Financial

to

During the past

to

1954,
to $7.60

Take

look at them

per

amounted

share.

are

per

back to 1923. Payments
1953

While

1954

including
payments
share, an

amounts

themselves

"the pessimistic forecasts
prevent real trouble."

may

Van sumer from overstepping with re¬
New gard to future commitments. The
York; George H. Walker, Jr., G. pessimistic forecasts may them¬
H.
Walker
&. Co.,
New York; selves prevent real trouble.
Sewell S. Watts, Jr., Baker, Watts
Comparing 1954 With 1929
& Co., Baltimore, and Lloyd C.
Young, Lester, Ryons & Co., Los
During the past few weeks I

varying

every year

made

has

logical strength, and

tions to show the $1.75 per share

San

the company

people,

are more

to

money

so
many
forecasts for ket shot up 20 points. Nearly alt
discouraging, I give four the business and financial proph¬
Counter market, is currently sell¬ more reasons why I cannot be so ets were then bullish.
ing at about 83/4, which is less fearful as are " many economic
Hence, people were not then or*

Neville is an outstanding victim
of the Federal income tax "straitjacket." For example,; earnings
for the 1953 fiscal year amounted
to $1,307,500 before Federal taxes,
It paid the government a total of
$914,000 in order to earn a remainder of $893,500.
Latter is
equal to $1.75 per share on the
225,459 ($1) shares outstanding,
In other words, the company paid
the government an amount equal
to $4.06 per share in order to
earn $1.75 per share for the stockholders. Taxes, however, included
excess profits tax equal to $1.05
per share. Since the excess profits tax has now expired, earning
power of the company for the 1953
fiscal year might be recalculated
as $2.80 per share. Per share resuits after taxes for the previous
four, fiscal years were $1.10 in
1952, 91 cents in 1951, 75 cents in
1950 and 76 cents in 1949.

autos. In 1914 the
company.
brought out the first
third-brush generator.
During
World War I up to World War II

Leece-Neville

the

of

cranking motors used as standard
on

out.

Company, traded in the Over-the-

Marco F.

equipment

as

generator

brought

and there

more money

buy; (2) the present Administration
is liberal in its thinking, and this should hold our economy
high; and (3) the caution voiced by warning words and
skepticism of the future may furnish an element of psycho¬

people have

relatively new products.

many

other "growth" companies, Leece-

first

the

first

was

generating and

it added

DC

During the last five years the York; Edmond du Pont, Francis I.
company's sales have jumped du Pont & Co., Wilmington; Willis
from $4,376,000 in 1949 to $12,- D. Gradison, W. D. Gradison &
ended July 31,

and

for confidence in the business

reasons

as

(1) there is

Moreover, this is only one of the

Horace

c

revolutionary

as

prove

conventional

the

!. and has applied this to electrically

lead-

Mr. Babson lists
future:

high in this respect.. For example,
its new Alternator Systems bid

types of motor vehicles,

'

By ROGER W. BABSON

at

man¬

upon

production.

and

closely

doing in the way of invention and
design of new products. The
Leece-Neville Company will rank

the

by

;

compaTheir
"invention"

nies.

ideas

new

:

v.

is -why
are

first

.

newVideaf/ir
That

of

diminished

1945 Leece-Neville introduced the

*

Their progress
is foreshad-.

flow

been

not

di¬

engineering

growing stress placed

:

invention.

and

research

fact, the leadr
ing companies ; j
place great'/;

owed by

division.

motor

Leece-Neville aims to take full

new

p

Since
been

has

management

added to the staff. It has instituted manufacturing on a mass
Production basis, especially evidenced ln lts n e w fractional

read

we

the

constantly strengthened. Its busi¬
ness
generally has been growing
and
during recent years at a
more
rapid
pace.
Additional
Method
Engineers
have ..been

PIZZINI

Partner, B. W. Pizzini & C<h.

some

taken

was

by distribution

of stock about 12 years ago.

then

Every

public

company

look

these

has done and is

company

31.

(799)

Reasons for Confidence

/

investor

to

apt

a

fair to

-phe

J over the months and in^0 the

about

Profits were

moderate but constant,

field of atomic power should mul-

B.

company

remained small in size despite its

,

is

what

*

informed

days

The Security I Like Best

depreciated

fully

facilities

during the war."

i 'hr /;i.vf

:n

after

Cabinet.

his

able "business¬

In-fact; 'directly
stock mar¬

election the

Allan Rogow

Joins

<

Staff of Bache Co.
Bache

&

New

York

New

York

nounce

come

Co.,

36

Wall

Street,

City, members of the
Stock Exchange
an¬

that Allan Rogow

has be¬

associated with the firm to

promote,: business
sharing

and

from

profit-

pension funds.

Mr.

Rogow, an attorney, Was formerly
connected
law firms.

:

with

several

leading;

i

32

The Commercial and Financial Chronicle

(800)

postponed the greater the magniadjustment.

million, again reflecting the low

Facts That Spell

Oat Future Sales

President, Esso Standard

rate

1930's

a

entirely

the

of

Clearly

indicated

is

the

Whatever

of

executive, in commenting

company

fore¬

on

need

crowded

depression, finds there are many positive factors
which are likely to maintain a high level of business. Looks
for only "rolling adjustment/' but stresses need for sales

5

a

be

to

seems

no

Estimates

market-wise

distributor

should

look

not

level of business and good
do

not

intend to

into

go

and

an

exhaustive discussion of the fore¬
casts

made

whose

by

the

business

it

to

dow.n
com

the

such

parts

the

workmen's

the

of

national

gross

overalls,

chart

more

the

of

the

various in-

dexfs

and

predict the eff

t

e c

these

trends
have

will

o n

our

'overall
nomic

eco¬

well

being.

Stanley C. Hope

picture

of 1953 is fresh in our
We have just come out of
year for which the Department

of

Commerce

national

Even

has

product

for

the

set

at

the

$367

United

gross

billion.

States

of

America this is
ure.

a stupendous
fig¬
Anyone looking at this figure

and

speculating upon what was
immediately ahead might be for¬
given if his attitude is that of a
mountain

'climber

scaled

a

is

one

but

down.
ican

to go—and

way

that,

Fortunately for us in Amer¬
industry the analogy does

not hold.
ago

who,
having
knows that there

peak,

no

Just

only

as

would

one

few

a

have

years

forecast

the

height of the business peak
in 1953, no one can forecast with
any assurance

the peaks in years

ahead except that

higher
seems

ity

as

to be that industrial activ¬
reflected in the Federal Re¬

Board

serve

index

10%

and that the
will

5%,
no

below

in

1954,

that of

1953

gross national prod¬
a
decline of about

show

although

means

this

opinion

is

by

seem

that

anyone

to be expected

the

business

de¬

a general "across the
setback.
Leaders .in dif¬

board"

ferent

industries have expressed
confidence that their businesses
will

actually

improve

and heads of individual

this

year

companies

by no means willing to accept
decline in volume done
by their

are

industry
a

as

decline

necessarily

in

Sales."

meet

those

meaning

cepted

the

agreed

that

ward

definite percentage of in¬

dustrial

future

forecasts,
we

if

were

decline, if

based

on

all

we

looking to¬
planned

we

this

not

Never

do

mean

in

any

way

to

forecasts.

We

have learned much
from them and while we have
by
no means

business

learned
reduce
♦An

learned how to level out

cycles, I think
a

we

have

great deal about how to

the

severity of the peaks

address

by Mr. Hope before the
Management Association Mar¬
Conference, New York City, Jan.

American

keting
27, 1954.




still

see

and

are

satisfied

the

are

succeeding

that

be

to

seems

others.

of

have

satisfied

War

II.

1930's

tarded

the

of

the

phe¬
re¬

a

increase

and

to

a

population

increase

of

28

actually had
ber

of

decline in the

a

pupils

schools.

enrolling

we

in

extensive

1941 has been phe¬
nomenal; dropping slightly in the
new

high in

1947 and continues to grow at but

slightly lower rate. The Fed¬
eral Security
Agency estimates a
population

increase

in

the

1950-60 decade of
est

in

in school enrollment of

crease

27%.

15V2%, the high¬
decades,) and an in¬

five
To

over

these figures clearly
indicate the creation of great new
me

markets for all kinds of goods and

dating

Estimates
roads

on our

school

new

of

throughout the

A

the

of

economy

Period

of

old

coun¬

every

region.

Rolling Adjustments

one
a

the

see

ahead of

year

of what has

come

us

as

to be called

period of "rolling adjustments"

which have been
our

economy

has

said

are

since 1946.

Someone

rolling adjustments
things except, of
if you happen to be the
fine

course,
fellow

on

scribe

it

sion"

characteristic of

that

very

or

the
as

a

roller.

Others

"orthodox

an

time

of

justment such

as

de¬

reces¬

inventory ad¬

few

1949.

With

forecasts

one

experienced

experienced

we

exceptions no
horizontal "self-

a

feeding" depression
in

the

such

as

was

30's.

eary

In

fact many of our economists feel
that such a depression would be

impossible today with

our

greater
business cycle,

knowledge of the

system of unemployment com¬
pensation, old age pensions and
other
important stabilizers that
have been built into the
economy.
In his
message to the
on

January

hower

Congress
President Eisen¬

7,

sketched

briefly the steps
to be taken by the Federal Gov¬

tions.

cosmetics, for furniture

and fuels.

is

great

the

facilities

demand

that

estimates indicate

a

for

government
need

for

the

expenditure
over

it is

of some $20 billion
period of eight years, and

a

need that

a

poned.

Our

be

post¬

are

now

cannot

schools

jammed with the children born up
to 1947.

units

demand

for

declined

in

new

dwelling

mid-1953

but

turned up again at the end of the
year.

New housing starts in

late

1953 may be attributed to the

seasonable,
also

reflect

million

warm
a

by the lVz

that
as

have

well

families

that

as

being formed.

is

dropped to

a

un¬

weather but they

demand

families

sharing housing
true

or-

men

a

need for intensive salesmen's

marriages

by

been
new

While
in

what

it.

little experience selling

There

may

training programs to be sure-that
L>1-i-;>;^those who represent us thoroughly
believe,^already :in understand the products they- ate
•*-.

*

postwar low of Wz

sales. Studies of the use' the saleS-

new

or

even

the;

competes -.wi t h.

-

weakening of

any

reached

economy

our

serious propor¬

The Administration has al¬
ready demonstrated an awareness

of and

a

flexibility in meeting the

problems and I think
with

we

can

for all appropri¬
ate Government action.

will

that the Admini¬

pursue

policies

as

favorable to business and
industry
as to other sectors of the
economy
will bolster public confidence but
we
do not want to depend
upon

government

to

do

the

business¬

man's job.

If, in the past years of
great expansion, we have overexpanded our capacity, if we have

overproduced,

be

;

everything he
seems

no

can

reason

producer 1 and

bemarket#^^where^it/is;

distributor

buy.

should

But there

look

we

must

pause,,a

pone

it

policies

.

and

manipulation for

a

gov¬

time

adjustment, but only post¬
a n

d

If what I

Consumers have money and will

choices

of

how

and

The

and

going

on

sions

talk

that

believe that if

some

recession

have

talked

ourselves

inclined

am

to

impact of such talk
sumer

c5n

In

opinion,

my

be

seek

to

needs.

psychology

seemed

to

II

.

dominate

thinking and it is history

when

dire

unemployment

the

longer it

is

and has contributed to over-ample

predictions of
made-

were

and

the inevitable consequence of mar-

generally accepted.
These were
and our country moved
wartime

a

into

economy

period of great expansion.
turned

this

of

As it

another breaking out

Looking

Many

predicted

growth

would

taper off in the latter part
year to be followed by a

know,
year

in

1953

in

that business

1953—and,

has

been

as

the

does not have

should

come

we

term,

the

see no rea-

not

the

rival

in the years immediately

1
the

For

sh0rt

j

term,

there

are

ci0uds in the sky, but surely they

biggest

not

are

into

This is not to say that psychology

bright. I

past.

history.

our

long

the

to

are

why our growth in the years

son

to

that

in the ih-

in-the months ahead.*/-

prospects

of pessimism in the spring of 1952.

recession

a

business statesmanship

expand fast enough to supply the.
pent-up needs of the people.

of

be

petroleum industry for some time
to
come
and will demand good

ijnillions of unemployed, but to dustry

was

capacity, will unproblem in the

excess

doubtedly

a

the problem was not
making work for many

There

The very existence

ket weakness.

out,

of

one

products with

inventories of many

wrong

from

sufh

1 c

its

that business activity moved contrary to such expectations.
There
was
the period just after World
War

h

My own industry, the petroleum
business, is one that has expanded
productive and manufacturing
facilities beyond immediate needs,
Much of this expansion has been
brought about at the behest pf
the government, but it is there

There have been too many examples
in recent years when a pessimistic

business

w

them, to use them and not to let
them use us.
On the whole,-1
think most of us will not do badly
in 1954.

con-

overrated,

as

satisfy those

may

others will find advantage.
Our
jobs, as business managers, are to
face up to the facts as we find

I

the

long as people
and have needs, they

have money
will

the

upon

greatly

from

fer

we

it.

that

Some
conditions in

they will others.

have

serious

into

believe

great

by you gentlemen.
Some of the
facts may affect us all in dif-erent degree and others may affect
some of us quite differently than

we

of

the

reces-

about impending

business

affect

variety of enterprises represented

inventory liquidations
may induce buyers to hold off in
anticipation of price declines.
In
a

to

appears

been

has

and

fact,

^

here

say

will

that

' facts

varied

swiUoerin-<*

he in general terms, it is because
I am not competent to discuss the
specific problems and the specific

many

where

,,

wa t JP.

definitely what the public reaction
IS to our advertising by all media,

for-

nearly

its effect upon

Looking

portentous ones.

1954

54

with

the

million

prospect, of

vehicles

of

*

all

kinds

much effect upon the consumer as

traveling over 600 billion
highway
miles,
with estimates
that our airlines will fly over 15
billion revenue passenger miles,

long

with

business.

it

What
does

he

as

I

not

to

seem

wants

able to buy them.

things

effect

in

the

managers

that

it

the

past

and

will

we

have

future.

of

and

is

Unfortunately

can

anticipate

1945

effects
and

'46

bought the predictions
of great unemployment during the
changeover from war to peace,
many

us

a

jnidr1946,

nosedive

but

continued at
It

of

seems

the

the

to

a

stock

market,

business

activity

good rate.

me

situation

as

we

today

for the future that the

a

and

plan

important

railroads continuing the

half
-

of

conservative
million

burners
million

being
now

their

lines,

estimate

new

with

of

one-

automatic \ oil

added

to

the

6.7

in use, the petroleum

industry looks forward to another
year

in which the demand for its

products

will

establish

another

peak.

:

This ever-increasing demand for

energy to move peop.e and goods
an(I 1° heat homes and industry
are

take stock

our

dieselization

its

business

upon

similar

In

is

have

must admit that it has had

we

in

saying

am

psy^oCof

,

Government

we wil

high level of business and
good earnings.
spend it, but they will have

"f

.

,

/f

look' at

Pr°duc'de* gn; at.the paekagir®

market-wise
not

" '

we'^n tali,another

why the efficient'
the

'.and' what tt

wants7"'-"

to .sell

able

ward to

production.

or

Competitive

more

......

goods-will

little to digest this expansion and'

tion

different;'

j

.

•Im

ernment

under

_

that
assurance

stration

be

may-

our :/-

it

producer,,;of

look

confidence

The

his. time

of

makes

man

illuminating and may suggest
changes in the size !of the territory
assigned to him'if hols to produee

to sell all he can make, not
every
distributor Will

it may postpone this period of diges¬

1953

1?

our

cine

school

sales

our

be

proportions, it will be because
Many forecasters and business¬
men

ernment if

So

and

Many .younger

buyers' market.

con¬

highways and

new

modernization

exists

services; for new schools, new
homes, new transportation facili¬
ties, for food and clothing, medi¬
and

all
our

a

what for.

for

try and will have their influence

our

The growth of the popu¬

a

high¬

new

years.

in

num¬

lation since

mid-40's it reached

war

struction, for

years

large extent,
increased longevity.
With

total

to

entirely

lack of maintenance

The 'need

on

of the

decades of

population

increase,

due
a

two

of

needs for

$5.5 billion.

thaL

beginning of

Because

experienced

we

the

on

focused

to the

at

in

abnormally low birth rate in the
nomenon

trucks —has

put 1954 expenditures

figures

shifting of the size

World

that

and

back

been

statistics

age groups since the

market. " *

a

and older systems still suffer

needs

population in recent

our

quite

a

-

of

think

in

With

woujd

growing highway popula-:

That is the rate of growth

and the

methods

I

carefully

against indoor? plumbing.

o|/our

there

from

important above all

me

to be

bond issues for

ones

set

one

37%

highway modernization and ex¬
pansion. Citizens have voted large

years.

the

people

will

or

is

sales

advan-

' faster; tham demands Qreat

cars-a

ways

Out of all the welter of

there

full

months ahead
should study

have had

Television

cars,

public attention

the
suc¬

future.

near

ganizations.

times is to take

period of conRight now and

of the automo¬

and

car

a

seem

buses,

we

our

6,400;

tion—the constant increase in cars,

a

of

wants

the
us

a

a

highways 'of prewar •
17 million families";

without

This

fore¬

way

challenges

indication

no

in

of

act upon

the1

•

,

are

in our history have per¬
savings been greater and I

The

discount the importance and value
of
these
statistical
studies
and

farms

great many factors
the positive side of the picture.

sonal

worse.

I

the

and

in 1954 and

our

and

hedged
our operations
against it, then we
would surely have it—or some¬

thing

figures

the

on

without

Optimistic Factors

on

face

we

tinued high costs.

tightening

up

companies

big three."

biles

our

figures

facts that will determine

There

by

gaged in,

problems

of other automobile- iridustriOs—unimportant

vintage, with

Spell Out Fu¬

These

challenges

and

the

output of their
companies. This is the American
business attitude. If all of us ac¬

a

These

not the "Facts That

total

cline will be

a

own

produce

With 12 million

''

"

to

H^ads

"the

me

a

unanimous.

It does not

by

will,

to

million between 1930 and 1950

weight of economic opinion

be about

uct

still

see

in the future.

ones

The

will

we

liquors.

seems

statistics.

cast

those

have, unknown in 1941—are competing
served notice that competition for vigorously with each other as well
as with
this market will not be limited
those longer established,
to';

beds and of beer to the

statisticians

ture

be pointed

'

manufacturing

of

tant that we

necessarily be looked
against the back-ground of

minds.

seams"

pails or denim
the newer fig¬

even

opin¬

the past and the
general economic

sales

of

of

own

solve

opinion, to make his own appraisal of the situation as it will
apply to his own business and to

the

in

day.

impor¬
not become prisoners

must

upon

statisticians

expensive

our

from

tage of all the vast store of fact

motor

take

and

to" the

We-are, I
low-priced car field.
by 1955, and that his immediate one .of the most competitive peri- - selling - and,
equally important,
plans are limited only by the fact ods American business has known.' understand the simple equation of
that his plants "bust out at' the Productive
capacity has-. grown'the more * calls made, the more

businessmeVi

lunch

However, it

cess

These

a

ures

to

differ

effi-

more

capacity

and

The head

important

plans

company

of the ratio of twin-bed sales

to double

trends

and

volume

or

product, ana¬
them,

lyze

by some of
manufacturers,

car

will

such

from

seem,

that

in various sectors of the
economy,
The business manager's role in

may

companies has recently stated that
his

when

were

as

attack

made

the

of

one

it.

pro¬

placed at
although

too reliable.

none

lead

depended upon simpler indicators

ponent

passenger

of

lot better off with

we are a

we

would

statements

to be

as our economy grows.

economists

than

figures

are

million

5.-3

our

high

a

1954

to

business

productive

problem of finding more efficient
and better ways of selling.
No
matter what business we are en-

the problems of previous years in
kind and in degree.
The need to

50

use

car

of

cient

.

valleys

our

break

to

than

more

passenger

for

million

these

earnings."

Surely

gentlemen

is

forward

of

the

why the efficient producer and the

reason

the

million motor vehicles that

by producers and distributors to dispose of increased
output "in one of the most competitive periods in American
business." Cites rising consumer demands due to rapid
popu¬
lation growth and rising living standards, and concludes "there

ions

with

duction

efforts

casts

I

transportation. Our
highway system is

present

providing enlarged and

the

event, 1954 will
present problems to the managers

for additional

Large petroleum

1954

in

1954 is this change from

'get into

„

Problems of Business

possible.

Oil Company

~

.

Thursday, February 18, 1954

.

change that has taken place and
will be further emphasized as we

tude of the

million

home starts in 1954 is

new

C. HOPE*

STANLEY

By

birth

.

.

facts that forecast expanding

sales

by

the petroleum industry,

Behind them, however,

are

basic

facts that spell out increased de-

•

Vdlume 179

mand

for

Number 5300

kinds

all

of

The Commercial and Financial Chronicle

...

goods and

Comprehensive Study of
Jersey Arterial Traffic Problem

Four million babies will be born
United

States

in

New York-New

and

1954

the net increase of the population
is estimated at 2% million.
The
this

rate

same

Authority and Triborough Bridge and Tunnel
Authority formulate plans for joint study of projects necessary
to facilitate movement of traffic within Metropolitan Area,
thereby relieving local communities in both States of the terrific
congestion now prevalent and the resultant large-scale eco¬

the

in

years immediately ahead.
In its
simplest terms the next ten years

will

bring

bodies

feed

to

million

25

us

and

more

clothe

and

urban

centers

to

of

kind

new

a

homes in

new

new

com¬

munities with their needs for

new

highways,

new
streets, and ex¬
panded public utilities. The needs

of the

homes must be filled,

new

the needs for furniture and floor

coverings and all of the old fa¬
miliar things. But in our dynamic
life

these needs

they

constantly

pand

in

and

homes

the

change

most

static,

never

are

ex¬

these

of

domestic

and

new

has

servant

given

way to the vacuum cleaner,
dish washer, the home laun¬
new and greatly improved

the

dry, to

and

gas
and

electric

automatic

basement.

cooking

stoves

furnaces

in

the

Automatic heat has be¬

come

commonly accepted and we
will surely see a growing demand
for summer
air

conditioning

well.

We

as

accept as commonplace

things which

comprehensive

study

of

all

or

even

invented.
As

of

public bridge and tunnel authorities must bear the heaviest and

e r s e

metropolitan

y

greatest

of

center

air transportation
will

area—the

land,

and

sea

in the country,

start

immediately under the
joint auspices of the Port of New
York

Authority and the Triborough Bridge and Tunnel Authority.

Announcement

can

we

with it

economic

an

expansion, the

limits of which it would be fool¬

hardy

for

to

anyone

attempt

to

predict.
Here

'

tremendous, inspiring

are

opportunities for all of

I would

us.

pot attempt to spell out just what

.they

offer

in

of you

but I
to study them carefully

urge you

for

each

to

them

are

the

"Facts

That

Spell Out Future Sales."

Fairman Chntn. of Bd.
Cm*

CSII*

For

Sills, Fairman

/CHICAGO,
man,

Jr.

was

111.—Fred W. Fairelected Chairman
of

<

the

of

board

Sills, Fair&

man

Harris,

Incorporated,
209

South

Salle

ough

Authority

associates.

ity

the

for

known

the

their

and

Executive responsibil-

at

study,

a

it

made

was

conference

press

in

Port

Authority's board room
at
111
Eightb Ave., New York,
will
be
assumed
by Austin J.
Tobin, Executive Director of the

New

York

the

and

Governors

New

of

and

Jersey

construction

connecting

of

crossings,
highways,

new

arterial

local expressways and such park-

ing facilities

be incidental

as may

Fred W. Fairman, Jr.

a

n

and

Vern

-

the

election of Clarke J. Robertson
Vice-President

as

V. Reid

Secretary-Treasurer.

as

a

solution to the intolerable street

traffic congestion bedeviling local

Of

Geyer Co., Inc.

Geyer & Co. Incorporated, 63
Wall Street, New York City, un¬
derwriters
ment

and

dealers in invest¬

securities,

announce

that

Robert H. Warren has been elected

communities

in

both

States

was

City of New York alone.

To Be Bernard Aronson Co.
28

Matthew

J.

Hall will withdraw from partner¬

ship in Aronson, Hall & Co., 745
Fifth
Avenue, New York City,
members

of the New

York Stock

Exchange,, and the firm name on
Mgrch 1 will be changed to Ber¬
nard

Aronson

&

Co.

Gerald

R.

Aronson, Manager of the trading
department of the 120
office

will

nership in

be

Broadway

admitted

the firm.




to

and

to

over

a

George

and

connec-

the

Harlem

In

125th Street, Manhattan, and connections with the Triborough Bridge and Harlem and
East River Drives; a lower Manhattan and a 30th Street crosstown
vicinity of

expressway;

facilities at

and offstreet parking
or in the vicinity of

bAe

ertakent byTriborough
either the
oi
e

onty

Authority
ima

es

es

timate y

P"less costs and traffic
that

icate

i

will

be

t

ul-

ey

self-sup-

fully

porting.
Scope of Problem
At

the meeting, Messrs. Moses
Pope stated that the critical

need

for

"an

over.all

solution

bi-state metro¬

cooperation

of

ner

and

two

River
where

crossings

in

motorists

may

New

Jersey

park

who

bound for Manhattan and wish
to complete their
journeys by
some other means of transportation.

Bridge by

the Port Au-

thority will proceed if the prelim-

studies indicate that this
bridge can ultimately be made a

inary

Bridge and Tunnel Authority.

The Triborough's contracts with
of

a

Narrows

Bridge

195?>

to

reqUirements

terial construction and the financ.

f f.

Coliseum

ing 01 tne <-ollseum

Formed in Galveston

Governor

well

New

York

part¬

City,

you?"

If his reply is lukewarm
or

"Oh

yes,

"Mr.

man

investments

curities

will

that

XYZ

in

fund

under the continu¬
supervision of professional

should
this

be

need

I

for

I

commissions

other

securities

must

be

ment

does

for

I have found that

advantage

:

do

not

Unlike

earn.

me,

you

living from

that

changed

commissions

that

sure

know that I make my

the

changing
something

into

also

am

there

and

managers,
no

investment

else.

sometimes

and provide
this invest¬

on

despite this dis¬

my

XYZ fund

other

as

investment.

like
be

the

obtained

on

many

J. Marvin Moreland

appreciative of his

Some

can

Moorman of

Mr.

sales
sulted

just

two

have

re¬

salesman
and listen to

sit

to

large

very

that

because

willing

was

some

securities

of

a

retired investors
good they were
they were in harness. He
try to show them how good
wealthy

him

tell

when
didn't

how

He asked them for advice

he was.

in

getting started and they came
through.
They practically built
a
clientele for him by their re¬
ferrals.
*

Women

question

are

and

#

*

--

clients. Use
answer interviews.

Interview them like

compound

*

:

good

doctor. Talk

a

with

interest

them.

Money doubles at 3% in 24 years.
6% it doubles, in 12. Women

At

understand this kind of arithmetic.
then

Show

how

they

losing

are

half their earning power if they
invest at 3% instead of 6%.
Never

*

*

waste

time

on

a

"china

opportunity of
knowledge.

just for the

egg"

exploiting

your

*

*

Professional

*

people

good

are

prospects providing—You can see
them

at

place

and

favorable

a

and

cohtrol

can

you

time

the

Best time for doctors,

luncheon,

or

before they close

their offices for the day. Lawyers
after

2

p.m.
:!*.

Never

udices,
man

cater

money,

*

*

unsound

to

prej¬

position.

or

is off the track,

If a

politely but

fidence then will be established—

only when you have the client's
confidence can you have a client.

the

w.

things

ask

He

Here

are some

both

we

agreed

effective

and

people wish

to

even

say

"yes"

when

they

"no." When they don't buy
for prospects. I once obtained

six accounts from

a

man

who did

not buy.
*

Brandenberger. The new firm
deal in listed and unlisted

will

Watch

*

for

an

the

management of Mr. Branden-

be berger.*

-

for prospects

the

sale.

to

of

and

timing

mind

to

Develop

look

a

sense

for

pyschological frame
buy

more.

*

*

multiply yourself by using
growth." That law is—
develop contracts by meeting peo¬
ple through people.
It is com¬
pound interest applied to sales¬
can

the "law of

ask

after you have made
will cooperate,

not.

*

Keep prospecting in mind. You

manship.

*

opening

Some

others will

firmly

proper

in

clientele.)

a

salesman,

a

say

subject.

practical

building
to

this

on

right

decade and

will

who

those

likes

He

has

table and talked for about three

the

next

talk.

bring him around to the
understanding.
You can
only establish a sound business
relationship when there is a meet¬
ing of minds and mutual respect.
Clarify misunderstandings — con¬

Nuggets From Experience

the

solution

pass

listen to his stories. I was told by

at

Be

old friends

seen

he has retired and wants to

interview.

report back to your center of

Most

trans-:

estimated

in the

has

man

on,

and

name,

were

real help to the metropol- Houston at 711 Main Street under

area

a

customer

of any

over-all

make excellent
prospects.
They have time
to
talk. Be patient with them. Many

If he gives you
let him continue. Don't
interrupt and throw him off the
track. Always follow the prospect
a

*

*

people

investments?"
your

other's

'.#&
*

Retired

larger

compared with

conservative

stop.
Give
chance to think.

Do

the
When
prospect has bought he is in

an

will

yours

friendly, cooperative type.

itan

\r "

People
you if

politely decline.
place confidence in
never
mention an

asked,

*

friend of

bridges and tunnels securities and municipals.
<
311,500,000
Mr. Moreland was formerly for
vehicles in 1953, and that number
.:many years a principal of Rotan,
is increasing steadily
No partial Mosle and Moreland. The new
solution of such a problem will be
firm
maintain a branch in
an

■'

|

However,

so.

part, my cus¬
tomers are so well pleased with
their
investment in XYZ
fund,
and with the income and freedom
from care that they enjoy, that
they
often
send
me
to
their
friends who might also like to

of

Harlem River

carried

"

Funds for 35 years.

must

figure

contained

investment

area

send

*

anyone's private
business with another person.
If

been selling securities and Mutual

GALVESTON, Tex.—J. Marvin
by tun-'Moreland has formed J. Marvin
nels, bridge and ferries added up Moreland and Company with of<to
about
73,500,000
vehicles in fices
in
the
Cotton
Exchange
1953.
By 1960 the continuing up- Building in partnership with John
trend

client.

a

(Mr. Moorman and I sat around

be handled so as to preclude
piecemeal traffic relief," the two

ward

to

that they are

hours

soaring to 95,000,000. The East and

securities

a

recommend

can

I know you realize that once you
have invested in this group of se¬

a

estimated 385,000,000 ve¬
entered, left or passed
through Manhattan Island in 1953.

"Total

as,

Reply,

not, it is one of the most un¬

selfish

con¬

"Am

declared.

such

alright."

Jones, I made this suggestion
originally, because believe

Some

hicles

and

indifferent

it's

you
or

efforts" in order to solve the

The situation is serious

*

'•

discuss

or

people like to
help others.
A few ready and
willing name providers among
your customers can help you to
build a business. Keep your eyes
open for them.

officials, civic
organizations and the press in the
two states, had to "pool resources

problem of paralyzing traffic
gestion.

less

more

assistance.

other local

as

*

*

Never

,

influence.

as

of shoe leather.

affairs.

a

J. Marvin Moreland Go.

or build new homes in
neighborhoods, promotions
executives, probated wills,
givers to
charity.
Write some
letters, qualify by phone or per¬
sonal call. Use your head instead

you

You like it don't

Then

states, Mayor Wagner

of

they

buy

good

ment Mr. Jones?

and the coverage
of those contracts
w0ldd undoubtedly make such financdng difficult for a much long- have this kind of
er perjod) particularly in the light
you know of any
of
the
Triborough's .$80,000,000 who
might also
program
of approaches and ar¬ income that can
pdor

*

of

benefits.
Suggest, "Isn't your
XYZ fund a satisfactory invest¬

ous

the members of the Board of

Estimate

investments

Most peo¬
ple take such things as dependable
income, relative safety of* their
capital and long term apprecia¬

or

(N.J.), and highway officials

the

of

benefits of the

have bought from you.

it

of

of destructive traffic

congestion in the

to obtain radiation from them you
make them appreciate the

to

approaches of such facilities,
in outlying areas in New York*

financing

Port Aut

order

must

the

stionbondholders would prohibit the
'TeitM?cz

5?,VV°U'

best

your

*

daily newspaper can sup¬
ply you with prospects. Spend ten
minutes a day marking and trans¬
ferring to cards names of people
who

are

prospects, but in

also

*

the
two-part series
in the Feb. 11 issue.

customers
of

to

The

River; a new bridge spanning the tion for granted. Therefore don't
Hudson River in the general hesitate to remind them of these

accordance with the financial pol-

Hudson traffic in the

Feb.

Bridge

the

self-suppdrting project. The study
closures that such conditions
how,.win include methods by which the
cost
more
than
$1,000,000,000 a bridge may be built, operated and
year in lost time and business in maintained
by the Triborough

officials

Vice-President of the company.

Effective

tions

of

dramatically illustrated in the dis-

and

Robt. Warren V.-P.
••

Washington

and

approaches;

Dewey (N.Y.) and Governor Mey-

Harris

nounced

level

lower

new

Brooklyn

and

pos-

Narrows

The urgent need to find

full

Mr.

between

in

appeared

source

The study will embrace the

Island

of National, Securities &
Research Corp., 120 Broadway,
New York City.
The previous

Your

Projects to Be Studied

Staten

dent

article

connected

others

ideas of L. L. Moorman, whole¬
sale distributor and Vice-Presi¬

'

projects.

Harris, Presi¬

also

.

with wishing
enjoy the good
things he expects to get from his
investment.
(But don't overstay
—if it looks promising ask for
prospects—get out.)

important subject
of
prospecting which presents the

Meeting People Through People

,

.

closely

the

traffic

The legal and other aspects of
financing and construction of the

dent,

nounced.

arterial

to the construction of the arterial

politan area" made it imperative
that the two agencies, with the

an¬

Of

are

the problem

has

goal

common

relief."

immediately ahead the pattern of

liam

J.

responsibility.
They
are the agencies in the best position to work together toward the

and in the vicinity of the Hudson

and

David

direct

Mayor Robert F. Wagner.
Object of the study, it was made
known, is to develop for the years

bankers, suc¬
ceeding W i 1Sills,

most

Bridge

Authority and Chair-

Robert Moses of the Tribor-

man

Street,

H.

in-

of the Port

La

resigned,

agencies

sible construction of the Narrows

invest ment

who

official

sweeping study, the first ever undertaken, was made on Feb. 15 by
Acting Chairman Bayard F. Pope

'the

CaIkhiah

the

all

volved. Of these agencies, the two

the

of

with

ahead

far

as
any of us can
anticipate an ever¬
growing population with an everrising standard of living carrying

;see

This is the concluding article

achieved only by the joint efforts

J

were

developed

PART II

major phases of the arterial traffic
problem in the New York-New

with

been

Prospecting Is Basic!

on

A

undreamed of Port
Authority and George E.
a generation ago. The new
genera-i
Spargo, General Manager of the
tion will demand and
accept as
Triborough Authority. The entire
commonplace things that we now
project had previously been remarvel at or which as yet may not
viewed
have

By JOHN DUTTON

nomic cost in time and money.

house. As population grows there
is a definite shift from our old

life, to

Securities Salesman's Corner

Port of New York

population is expected to increase
at' about

33

Plans Announced for

services.

in the

(801)

Buying

of

Gail Borden Opens
J.—Gail Bor¬

JERSEY CITY, N.
den

is

engaging

in

a

securities

business from offices at 38
land

Avenue.

with

the

is poration.

First

He

was

New

High¬

formerly

Jersey

Cor¬

34

The Commercial and Financial Chronicle

(802)

in

hoods

U. S. Should Aid,

But Not Force,
Currency Convertibility

f

I

we

Member, Commission

•cj

the

wealth

Public Member of Randall Commission describes U. S. leader¬

time,

"worst thing we could do
would be to exert pressure or insistent influence upon govern¬
ments responsible for this
decision.'* Recommends special

convertibility
currency

general

return to

production of more of the things
that they could enjoy.
I believe
we
will follow the examples of

convertibility

lour months
•of

the

working

of

last

the

member

continued

on

Foreign

to become

Policy, which

is some-

for

people

our

as a

Commission

Economic

and

so

vested burden for

a

miliation

the

Randall

that

we

Commis¬

tion

to

abruptly but

d

balance

1

i t

,

s

Chair-

Commission's

Report

The balance

23rd.
I
hope you will

Fleming, Jr.

Com¬

mission

composed of five

World.

(three

and

We

two

Democrats),

aided

were

by

and

balance

to

way

through

funds into

Research

a

be

increase in
the aggregate of World trade, in¬
volving greater exports, greater
imports, and a greater flow of our

members from private life.

Staff

be achieved by

can

Another

would

Republicans and two Democrats),
five Congressmen (three Repub¬
licans

of

economic difficulties of the entire

was

Senators

be

benefit

shrinking our exports to match
imports.
This would mean a
shrinkage of our Country's total
business,- retrogression
for
our
economy, and aggravation of the

already.
The

re¬

our

it, if you

have not done
so

the

aid grants or extraordi¬
foreign expenditures.

nary

Jan¬

uary

read

how

foreign

was

released

the

an

foreign investment.

very
able economists.
Association with the distinguished

dustry and

fine

mission
was

I

and

population has made
us
greatly dependent on foreign
sources of many of the raw mate¬

Com¬

Research

the

the

Staff

of

exhilaration and privilege

an

which

Americans

rials of industry, such as tin, rub¬
ber," jute, wool, manganese?,

I always will cherish; and
it, I am sure, to my friends

owe

in cotton

circles, since the

mendation

of

could
elsewhere.
The

have

originated

have

Commission

included

of diverse shades of

give-and-take,

report

which

greatly dependent on
coffee, tea, cacao, sugar,
and tropical fruits and spices.
If
the
growth of; population com¬

thought, pred¬
In the spirit

seventeen

produced

we-

fourteen

members

of

pounds

a

approved

plicable

to

1..........

r

In the Work with the

to

and

from

economy

the

of

efficiency

the

war-torn

factories and farms.

exporting
porting to
billion

than

the

extent

dollars

per

are

of

in

are

im¬

which

torn

nations

and

has

enlarged,

especially

industrial lines.
'An
ton

The

to

time

by

Convention
Council
of

Mr.
of

Fleming,

at

^

which

National

Cot-

Atlanta,

Ga.,




should

have

not

lose

become

If

we

important

lawn

he

and

trade

fare have

are

more

in

from
of
,

he

wash

his

his
own

which

fruitful.

he

the earnings

rebounds

to

receives
or

his
And
to

in

a

share

interest.

This

their

benefit
This is what those of
.

who* have

enough >to

been

and
us

edible oils.
consider

To

about

the

ments

what

be

can

done

of

restrictions

on

move¬

goods and money, we
inquire first into the reasons

to

have

fortunate

accumulate
savings;
and the rest of us earn
our liveli¬

commitments.

It

stems

from

human

and

we

wel¬

a nation enjoy¬
has accepted the

power

role of international

leadership as
corollary of power.
Historians

a

written

have

martial

too

feats

much

of

about

Rome

land and too little

and

the

World,

—of peace, law, order, and devel¬

opment

of

cur¬

and credit, arid traditions of

rency

integrity.

other

At

times,

when

nation had pre-eminent power
when the powerful nation re¬

no

or

jected the responsibilities of lead¬
ership, the World has slipped back
toward

barbarism, as during the
Ages following the fall of

Rome.
If

should

we

take

utterly

an

selfish

view, the question might
be asked why we should burden
ourselves with

leadership for the

conclude

that

the wise
for

course

and

our

is to work and to lead toward

largement

World

of

in¬

Country
en¬

production

and of the flow of

goods, capital,
throughout the World,
counting upon it that the benefits
and

tion's

exports, foreign balances,
gold holdings became insuf¬

and

means

gold

in

or

power for it was
it to

vert

rencies,

gold

desirable

it im¬

to make

eign

the for¬
of

proceeds

currency

cur¬

to for¬

to retain

or

con¬

to foreign

or

unrestrictedly

or

eign goods,

to

also abundantly

accrue

just

us,

of

all

extend

eventually to us.
I
join the chorus of the

to

prophets of
is

frustration

as

the

but

war;

of

way

surely this

peace.

-

Enlargement of production and

Some

reflect

devices

were

ex¬

to

ac¬

free

movements

of men, capital, and
products. It is hindered by every
impediment to these movements.

World is full of such im¬
pediments today. The Iron Cur¬
tain

Eastern

around

North

and

Central

Europe and

Africa

is

the

greatest of them all. The embar¬
goes of some countries

upon

cer¬

imports and the quantitative
import quotas and restrictive im¬
are

licensing of
close

a

countries
Restrictions

many

second.

the purchase of foreign
ex¬
change have a like effect, as also
on

do'

discriminatory

change,

which

exports and

to

rates

tend

to

of

in

Country

this

think that these

controls

disposition to harass

a

us,

since

in
fact
they are exerted
vigorously against imports
that have to be paid for in dollars
than against imports payable in

the

softer

that

the

currencies.

currency

The

fact

est

and

is

these countries

need the most and have the

stacles

less

more

desirable

we

can

the Iron Curtain, except to include
the poor men and women behind
it in

our

from it
pass

prayers.
as

this

menting

No others suffer

closely than the

currencies.

How¬

imports, direct or through ex¬
change controls, tend to confer

on

these restrictions who feel by now
that

their

has

become

long

so

On

vested

a

right;

and

pointedly than does

the

old

to

resident

and

and

foreign
balances

impregnability

of

the

situation should become clear.
The step from

inconvertible

cur¬

and restricted trade to con¬
vertibility and the lifting of trade
restrictions is

English

countries

consequences

decision

the

nearly all in
involved
sell

citizenry

for

of

impose

instance

the

them.

the

Italian

cotton mills that have been

com¬

pelled to buy high-priced Turkish
cotton by restrictions which cur¬
tailed
their
freedom
to • buy
dollar

the

cottons.
of

cost

at the expense

This

Italian

in¬

textiles

of the Italian

con¬

it

priced Italian textiles
out of the export markets, and it
aggravated unemployment in
Italy. Consider the traditionally
international

merchants
now

in

a

of

bankers

England,

maze

English

operating

used

do?

to

hands;

our

they used to do? Do
merchants compete with
as

American

us

and

of restrictions. Do

English bankers compete for
business

merchants

as

they

Restrictions tie their

but they are eating their

hearts out.
The

Currency

Convertibility

Problem
The English, the Germans, the
Dutch, and the Belgians are very

of

the

sacrifice

which

restrictive

their

regimes impose
upon them; and they are anxious
to regain viable convertibility for
their currencies, so that restric¬
to"

the

and

protect their currencies,
of their freedom

expense

opportunity to

become

have

abroad

the

capacity

its

of

enough

services

step. The country

one

must

goods and
pay
for the

to

that it must buy abroad.
Its people must have the self-dis¬
cipline to resist the temptations
of inflation and to accept budg¬
things

etary, fiscal, and monetary disci¬
pline. They must be willing to
bear the burden of high interest
rates,

some loss of em¬
times when other
inadequate to check an

at

even

at

are

The

country must have at its disposal
sufficient

gold

foreign

and

bal¬

of generally acceptable cur¬
rencies to meet the drains of tem¬
ances

or
of sharp
withdrawals until fiscal
and monetary measures and ad¬
justments of interest rates can

imbalance

porary

foreign

their

exert

corrective

influences.

Although the successful return
of foreign currencies to

converti¬
is utterly desirable from
point of view, particularly in
the case of Sterling, which is the
bility

our

for

half

World's

the

in¬

I believe the
worst thing we could do would
be to exert pressure or even in¬
trade,

sistent influence upon the govern¬
ments

responsible for the decision.
failed to

It would be better if they

take the step than

if they took the
Success is more

and failed.

step

likely when the responsibility of
decision is squarely upon the

the

which

government

it

takes

of

hearts

the

when

the

and

govern¬

ment and

people are committed to
Anyhow
what
government

it.

than

other
ment

can

Britain?

British

the

Govern¬

judge the capabilities of
—

other

or

the

than

Government the

pabilities of the Netherlands? On

hand, those who

which

Consider

great

1947, we
of taking
prematurely
and
of

Netherlands

general

sumer,

serious step

very

experience

the

saw

to

a

government to take. In the

a

other

the

the

are

tions

the Randall Commission Report on
what; appears'to me to
be the

until

denied

be

balances

with

arising

transactions

current

should

commence

balances

foreign-owned
from

open

the restrictions endure.

as

suffer most from these restrictions

at

more

long-enjoyed privilege

the number of them will increase

they do. Still I cannot
com¬

in May.
that con¬
Sterling to other

of

ternational

subject

without

com¬

suggested

currencies should

medium

conscious

do about

vertibility

port quotas and other restrictions

suppress

There is little

been

ever, we must recognize that im¬

ex¬

than these others.

has

great¬

difficulty in getting is dollars;
so
naturally they husband

their dollars

subsidize

imports.
Tariffs, unless the rates of them
throttle imports,
are
lesser ob¬

has

adverse balance of payments.

purpose.

people

to

seem

flated

to

for other

as

and grain exchanges;
Liverpool Cotton Ex¬

change is slated to

means

controls

complish that

cheaper

closely

the

and

and

maximum enjoyment of the
prod¬
related

exchanges,

ployment,

ucts

is

well

convertibility to goods by
reopening metals exchanges, wool

ported goods. The quotas, licenses,

men

to all will

exchangeability of

as

England

menced

for

vested privilege. If you were a
But this,
toothpick manufacturer in some
would mis-state the
country and had enjoyed a mo¬
question.
For History shows too
nopoly on the toothpick market
well that, in a vacuum of leader¬
there since the War, thanks to re¬
ship, chaos eventually engulfs all, strictions
against imports of tooth¬
the strong together with the weak.
picks, you might feel by now that
this monopoly was a matter of
Our Wise and Inevitable Course
right. Undoubtedly there are peo¬
Out of all these considerations,
ple in the countries which practice

I

goods

currencies.

others through
extravagance,
over-expansion, inflation, and
poor fiscal policy. In all cases, a
point was reached where the na¬

believe,

evitable

for

rency

benefit of 'other peoples.

J

it

ex¬

more

trade,

resources,

the free

means

haustion of the nation's economy,
in
some
cases
through war, in

Eng¬

about the gifts

these countries gave to the

Thursday, February 18, 1954

..

It

possible for holders of it to

History,

in the times when

port

employs his neighbors,
of
his neighbors,

which

which

wealth.

our

expanded and flourished

ing great

man

lawns

of his
He pays them

devotes

activities

the

is

tain

laundry
and

fact

our power,

look again to

that

find

the

world of debtors.

irr the

alter¬

The

,

businesses

or

the .done

the

•

devel¬

generally he uses his wealth
finance businesses of his
own,

the

America,

1954.

a

his

to

efforts

restored

in

economic

neighbors.

cut

linen,

war-

taxation of

we

take

his.
address

Annual

Feb. 1,

been

and

town, he cannot cut the

poorer

expense

productivity of the

which

and

American taxpayer.

the

our

accounts

When there is just one rich

in

By now, the emptiness of for¬
eign cupboards has been repaired
and

the

which

balancing

trade

that

creditor in

aid, foreign military aid, and ex¬
foreign expenditures

of the

benefit

to

through its hackneyed fa¬
miliarity. It is the extreme degree

traordinary

kinds, at the

materials,

raw

feasible

a

may

pre-eminence of

accelerated inflow

force

thus far has been offset
by grants
loans for foreign
economic

various

an

chestnut

and

of

and

funds

I am impressed anew with the
importance of a third fact, an old

several

year,

raw

accelerated

an

investment

the materials originate.

of their

we

greater.

opment of the countries in which

nations

more

S.

contribute

will

and

We still

is
we

is not unrelated to

refuse

entail

to

currency; and
the only
of conserving purchasing

would

us

refuses

surplus butter and

our

foreign

Another

to seek out

international

of many of our lines of
and also from the

pending the rehabilitation

ever

with confusion

government

my

them

their

power, of

me

intelligently, and consistently.

new sources of them.

U.

foreign

will
na¬

great post-war needs of the out¬
side World and the low productiv¬
of

of

abroad

production

ity

will

flow

our

foreign

on

become

develop

This

tional economy has become geared
to
a
tremendous
export trade,

arising

will

materials will force

Foreign Trade

-

•

The first of these is that

invention continues

Increasing needs for foreign

Country.

our

as

dependence

our

sources

Our National Economy Geared to
1

there

What

...

Commis¬

been impressed again
the special pertinence of sev¬

eral facts about

Con¬

years.

multiply the objects of demand.

So

sion;! have
with

56% in 30

population,

specific recommenda¬

tions in the report,

rate of 1V2 % per
increase will be 25%

sumption will increase faster than

dissents ap¬

or

the

at

annum, the
in 15 years,

the

without general dissent; although
•each of us, except the Chairman,
inserted, comments

been

foreign

men

ilection and interest.
of

tungsten,

bauxite, anti¬
mony, copper, lead, and zinc, and
now
even
iron ore.
We always

appointment

my

hardly

chrome,

recom¬

enhancing

in

me

and

sell

these

rency

Dark

The second fact which impresses
is that the growth of our in¬

of

destructive

of

ficient to pay for its imports. Then
it no longer could redeem its cur¬

We therefore

our

without

England; for I do not

not

foreign
payments will

and

achieved

so

end,

an

question

between

us

determina¬

a

to

soon.

the

face

ceipts

The

man.

it

without

tyrants. It fills
when

lot

fail to do is
to recognize that this is our des¬
tiny and to pursue it consciously,

hu¬

and

recipients;

reach

bring

must

1

the

must

sion, after
a

privilege

for

Clarence Ran-

seven

and

believe

foreign

aid has
long that it threatens

vested

a

times called

Lamar

Rome

native.

much

spent

other

to

countries, to develop and expand

big step in return to normal traditions and respon¬
sible ethics in "the field in which equity toward investors lies."
have

wealth

their

and

sons

would be

I

the

must

produce, and they sent their

own

sound

on

and

wealth

their

of

people

poor

the

great traders of History:

warns

basis, and concludes

find Rome and England.

eras

alleviate

these two nations were the
they re¬ for them. Import quotas, import
ceived and enjoyed in abundance licensing, and exchange controls
the
produce of other countries, originate in a nation's lack of
for which they exchanged their working capital to meet its foreign

course is for this
country to work for enlarge¬
of world production and the international flow through¬
out the world of goods, capital and men.
Favors encouraging

ment

credits to nations undertaking currency

nations whose

power,

and inevitable

convertibility, but

wealth, I think we

any

that

.

pre-eminent in their

was

we

the

In

ship in world trade and world affairs, and holds the wise

currency

the

pattern

of the roles of the

stupidity
of
discouraging
trade through the Curtain
would

inevitable for a
wealthy creditor nation.
Then,
if we look to History for examples

Foreign Economic Policy

on

of

individual

Anderson, Clayton & Co., Houston, Texas

1,2*-

people

of

look to the pattern of

we

find

employ

savings,-and some day

step into their shoes.

may

If

By LAMAR FLEMING, JR.*

i.

the

have

who

.

prosper,

will

of

other

a

currency

hand;
and
as

people

lUhinfc^we,
a

as a

..government,

should .^'encourage

the' " nations
they
are

that

which;! conclude

ready for return to convertibility,
when

they

make the

themselves

decision.
The

productive capacity and ex¬
porting capabilities of the coun¬
tries of Western Europe have re¬
covered from the low point fol¬
lowing the War and

now

are

at

higher levels than before the War.
With the aid of our grants and
loans,
able to

and

these countries have been
bring their dollar receipts

payments

several

of

into balance, and
recently
have

them

made considerable progress

in

re¬

building their gold and dollar bal¬
ances.

Some think that the condi¬

tions

have

think

they

arrived,

and

others

hand, to
justify the British, the Germans,
the Belgians, and the Dutch in
moving to convertibility, perhaps
by gradual stages and, for some
of them, with restrictions at first
upon the withdrawal of old bal¬
ances
for
foreign account
and
upon the export of capital by their
are

near

at

nationals.

Special'Credits to Countries
Resuming Convertibility
If

take
generally taken
granted that they will be as¬
any

of these countries

the step, it seems
for

sisted

unnecessary.

Convertibility

the

ca¬

iw

in the critical

ifn#»c

mrpHit

early stages

with

the .Inter-*

Volume 179

national*

Number 5300

...

The Commercial and Financial Chronicle

(803)

i

tion of .the eWorld's trade which

bdieve; .thej/actlvities;

now is, confined within it would
^et the goods' involved, seek the

Monetae Fund,^ to cush.,>,J Foreign Investment-/,
drains." ;?he lines^- Iii, the matter of foreign

/.

.

:iori:- temporary1

availableLthere.are4imited;/arm^

in-

.

News About Banks

,riiay \bev that the- deqisioh .fahd v of/governmental agencies/such as 'highest "bidder, anywhere and lfet
timing of the step by m 'of
»e buyers involved seek the lowcountries will ,depend : upon the internatiOnar» Bank for
Recon- est offer anywhere, with great
availability ;:o f
supplementary ;rStruction and Development must benefit to the aggregate of all
credit from this. Country.^Within be
regarded
as » a 'temporary trade..
>

Ac^-'ie

CONSOLIDATIONS
NEW BRANCHES
NEW

s

reasonable

dimensions;:l;%ould phenomenon,

CAPITALIZATIONS

standby, cushions. 1 believe the
would be

will

the

be

not to be relied upon

alwavs

it

taxoaver*

Federal Reserve System
the
I

preferable vehicle for them

sonai

.

think

the chances are it would

in

savings and the companies
he hiivs stock

which

US

avaiiaDie
available

investment
investment

ior
for

Monetary Fund means credit from
United States as the largest

ment,

currency

is credit from
So what I am

rjsk

a

ut
Of

present
present.

are
are

:

of
late
late

gold and hard.• years; "these elements'have not
resources,
and credit been generally present in many
of.

its

the United States,
favoring is; that we

upon

the success of
several

the return.of Britain and

other countries

to

convertibility,

when

general

cided upon by

earnings of international invests
ment. Moreover, the return of
convertibility would be a big step

plans for the return are detheir governments
and are found by us to be sound
and feasible.

<

1

-

;

-

:

-

reconvertibjlity

of

v«.,

!™™*'edon

charl®

lies the prospect of a quickening
of

distribution

surplus cotton

^

„

our

accumulated

and"

of an outlet

increasing caoahilitv nf

"D

a

upon an increasing capaomty or a
crrnwinef

WnrlH

nnnnlatinn

+n

hnv

in the return to the normal tradiHelp the countries in question to tions of responsible ethics, ... the
lift the restrictions which hamper'field in which equity toward inBy taking this risk, we would

all trade, and we would be help-

^ -

ing the World toward that freer
of
goods, men, and

bility
when

which is the essence of
general growth of business and

of

currencies

their

currencies

have

trade.

"Dzx4-

In
in

partner
Partner

Kjl

All w»

/fi

Vk

d*C OA

r»

nf c+onipv

1

+

Mortgage Money to Be
Ample, Says Bogen
York

New

University

Finance
bankers

Professor tells mortgage

Treasury has learned that it is
not practical for it to compete

be-

with

private

a

basis.

rate
An

on

ample supply

with

mortgage

_

1?

_

TH

^;

First

The
»

,

«

Petroleum

m
**1

National

Bank

of

panic

01

increased

was

*

I'

*

*

F>d«hty Trus* Company, IiMlianapolis, Ind„ Central State Bink,
IndianaP#,is' ^ and Th« Northwestern State Bank, Indianapolis,
,nd merged under the charter ^
Trust Company
*

*

Headquarters at 55 Wall
*

Harold

F.

Assistant Vice-President

as

Eugene

W.

15

Garrison

Horace

by

As¬

as

C.

Flanigan,

to

Manufac¬

President.
turers Trust

came

Company in 1928. He
Charge of the

Officer in

Street

Bank

Feb. 2, increased its common

Office from

1929

to

capir

ta* stock from $6,000,000 to $7,4
000,000 by

stock dividend.

a

*

The

The

the

*

Drovers

Drovers

Bank,

Fuller

as

National

and Trust
Company of Chicago, 111., effective

*

appointment of

144th

t

Divi¬

sistant Secretary of Manufacturers
Trust Company was announced on
Feb.

t

Aiauonai

.

*

*

and

1.

$400,000
-t4nftnnn by a stock dividend.
a

City

The

—

2£0u
/* Wal<i?n
+d
SnlvfJ
t ^01J. ^00'5f°'to

Street.

Fuller

$40^00?

from

T

JPJ*

Bound Brook. N. .T.

J^Head

the Bank's

served

of

—

^f^ermg department for the
u£
Mr. g7dSon wUl be assocTated «?• ?f *****
effective Jan. 4.

Mr.

borrowers

N

AAA

/"V

mi

$500,000 effective Feb. 1.
pet-

rOieum Consulting Iirm Ot otaniey,

,,

+u

Hilllide

Tl/Tw

AAM

well-known
well-known

the
the

rniAlim pnTiqilitin« f;rm

sion with

only

unstable; and so return to
convertibility implies the return
of stability. When currencies are
stable, the citizens practice normal thrift, and their savings be-

money,

joining the

Dodson is

R
ft

r

thh®

eome

their

1

.

Governments suspend converti-

movement

v\

j

„

flSt 'S^

w

growing World population to buy gt lz and Do(json los Angeles'
and own clothes. It offers the C Rf jn his 17 vears' experience
meaxxa ux balancing our Country's
y®ars ®xPerience
means of uaicuiumg uui v^uumi-y » ^am-m ms u years expenence
foreign trade on a highland prosPet!
porous level. It offers the promise ^leum Eneineer for the Northern
to the peoples of the World of an
sfandarri
nil
nf
Paliexpanding abundance opportunithe Petroleum
ty, and satisfaction within the fold Eneineeri_„ nenartment for the

vestors lies.. :

trade with them and hamper

#"»

Feb

dodsonS until °rS

the

■

our

sumption, and greater opportunithe World. Within it

parts of the Wprld. Reconvert!bility of earnings is incompatible
with Inconvertibility of cuirenof the Civilization which we chercies. A return of the World's key
ish and which none abandon uncurrencies to convertibility would
less in surrender to frustration.
be the prime ingredient of a more

from the Federal Reserve System

take

^4.

reconvertibility

and

earnings

the

j

~

~

cbntrlbqW

axiyany-

where, if the elements of prospective gain, safety, equitable treat-

International

the

from

Credit

insur-

or

Lnc^^es^hprfvate^fund^are

nothing but: would hasten
the termination of our foreign aid

cost

Bankers

and

OFFICERS, ETC.

REVISED

So I believe the vision of confavor sympathetic
consideration over ' any long period. Anyhow vertibility
is o n e of greater
of such additional credits, to serve the
big source of investment .never wealth, greater trade, greater con-

as

35

their

of

Saving^:

and

111.,

Chicago,

death

Baidf;.

National

Trust

announced

Senior

Vice-

President Mr., Frederick N. MeiS
cer on Feb.
2, 1954.
4 ..4
*
*
*•
r,;.
*

•

.r

1947 and was appointed an AssisBy the sale of new stock effect
ments of those" countries cannot
future as a result of the unsatis- tant Secretary in November, 1951. tive" Feb. 1, The First National
take this very weighty decision, come the pool of working capital factory experience of the Admin- Mr. Fuller will succeed John C.
Bank in Little Rock, Ark., Mi¬
Lewis as Officer/ in Charge of the creased its common capital stock
nor can we stake our money on
for the nation and its business. istration with
«*»t
™
,-v,
j
—_x—iMelrose
the success of it, unless they and; When the currencies become unr e s t r ictiive
Office, 360 East 149th from $500,000 to $750,000.
*
$
❖
we
are
convinced of the mutual stable, savings
in the form of Federal Re¬
Street, the Bronx. Mr. Lewis was
"} H
intent to do the things that will bank balances, loans, bonds, and
recently appointed a Vice-Presi¬
serve
and
Effective Feb. 4 the common
dent of the Company and is now
make success a good calculated insurance become a gamble inTreasury debt
capital stock of The First-Hardin
in charge of its 14 offices in the
risk. We must be convinced that stead of a protection; and.the remanagement
National Bank of Elizabeth town,
our foreign economic policy conBorough of Queens.
suit is a diminished incentive to policies dur¬
Ky. was increased from $150,000
Mr. Garrison came to Manufac¬
sistently will recognize that no save and a great haste on the part ing the past
to $300,000 by a stock dividends ?
turers Trust Company in April,
nation's
receipts and payments- of citizens to rush their savings year,
*
*
*
•1 !"<
Dr.
1944. He had been in charge of
can stay out of balance over any
into real property or more trust- julesL Bogen,
The President and Board of DP
the Credit Department at the Mel¬
long period, and therefore that we worthy foreign currencies. It is professor 0f
rectors of the City National BaiqkV
rose
Office and in 1952 he was
will have to buy as much goods this condition that" has denuded Finance at the
of Baton Rouge, La., announced
assigned
to
Branch
Loan Ad¬
and services as we sell, once we some countries of the liquid sav- QracjUate
that Mr. A. K. Mclnnis has
ministration, Bronx Division.
discontinue our foreign grants and ings which otherwise would serve g choo 1
of
come
associated with the
bkftk
The
appointment
of
Reuben
extraordinary
foreign expendi- them as working capital. A sue- Business Adas an active Vice-President.
;
r
Bressler and Albert E.
Christie
tures, except to the extent that cessful return to convertibility
min istration
vi'*;
*
*
*
as Assistant
Vice-Presidents was
our foreign payments may be supand stability of currencies would Q£ jsjew York
,y h1.
Dr. Jules I. Bogen
also announced on Feb. 17 by Mr.
The
Groos National Bank ,o|
plemented by investments abroad, revive the accumulation of liquid university
This must mean a continued will-- savings
in these countries and tQ]d the Mort'gage Bankers Con- Flanigan. Both men are officers San Antonio, Texas, increased its
in the Bank's Reorganization De¬
common capital stock from
ingness to expand our imports of help to finance the development ference
$350,partment at the Main Office, 55 000 to $600,000 by sale of ne>y
complementary
products which of their economies and wealth. It
<<Th
Treasury has learned " Dr
Broad Street.
we
do not produce here, mod- also would tempt those whoi have B
stock effective Feb. 1. The p^psaid, "that it is not pracMr. Bressler came to Manufac- posed plan of the sale of this stpek
erately to expand our imports of hoarded gold or real property or
® .
.. :
„omoete in the 0Den
turers Trust when the Chatham
was
given in these columns bn
supplementary
products which have spirited their savings into
.
.
ith
borrowers on
Phenix National Bank
& Trust
compete with our own produc- Swiss francs and dollars, to unpage 273 of the Jan. 21, 1954 issue
Company merged with Manufac- of the "Chronicle."
tions,
and
to
follow policies hoard and return their savings a
Dda*5'..
t
j
».* i'
was apbenevolent toward investment of to their own countries, in quest of
needs
of
the turers Trust in 1932- He
our
citizens' savings in the de- attractive earnings. It is interest- T
Secretary in
P creatlv exceed avail- Pointed an Assistant Sec
Ben R. Meyer, Chairman of i the
velopment of foreign sources of ing and astounding to hear the
July, 1945..
Board of Union Bank & Trust Co.
many and diverse conjectures as
Mr. Christie came to Manufac¬
wealth.
such
competition.
Rather,
the
of Los Angeles, Calif, was elecited
turers Trust after service in World
mean
that we must to the amounts of this sterilized
Treasury must be content with
to the post of President, at llhe
War II and was appointed an As¬
commit ourselves to a drastic genwhich convertibility and absorbing the margin of savings
Board of Directors meeting, to;fill
sistant
Secretary in December,
eral reduction of tariffs. I do mean stability would tend to release to that exists in excess of the longthe vacancy left by the recent
1946.
that we must let the World rely greater usefulness.
term
requirements of mortgage
death
of
President
Herman''F;
the

But

responsible

govern-

funds is assured for the indefinite

,

_

i

^
mrfe'w f prlvate "orrowers on

^

^

it that we have turned away

For us, whose thoughts and an(j corporate borrowers. This is
protectionism, that interests are against a background negligible in boom yeats like 1953;
our
policy is to moderate our ,0f cotton, the vision of a general R is bound to be quite substantial
tariff rates that are unreasonable move
toward
convertibility
of jn years of business recession
and to iron out tariff complexities currencies and toward the lifting when
private
borrowing
conupon

Kempton

from extreme

practices, whether statutory 0f quotas and other trade and ex- tracts."
or administrative, which have the
change restrictions offers a most
Dr.
Bogen felt that an even
effect of harassing the importer, exciting prospect. The compartgreater change in the policies of
and

,

must give the foreigner

I mean we

dint of
effort and promotion expense he
succeeds in creating a demand for
his product here, we will not saw
the limb off behmd him by rafeing the tariff rate on it to an exclusionary level. I mean too that
*
f«^irtniir
we must give the foreigner reason
to believe that there will be a
growing interest of American mvestors in good and profitable opportunities to create new wealth
reason

to trust that, if by

x

•

rouenn

abroad, provided the
ments
Wnr
vestor

afford

the

hosnitable
h°sVlX

treatment,

whicn

trade

0f

mentaiization

wouia

aaa

xo

the

spring

npf.ted

0f

1953

the

for

be

is to

ex-

indefinite

future

credit

the

Company

rector

of

President

Dunn,

American

elected

was

The

York

New

Company, New York,

and

Brake
a

Di¬

Trust

Feb. 16,

on

by Xdrian M.
Massie, Chairman of the Board.
it

announced

was

Mr.

is

Dunn

Trustee

a
»

^

.

the

of

xr

,

xr

Franklin Savings Bank, New York,

policy.

nublic debt of $275 bilwith

Y.» has become a member of

institutions like
see a spreading mcrease in World li£e insurance companies, savings
standards of living and World use hnnts. anri saviriff0 anri lnan aaso_
banks and savings and loan asso0f textiles, which has been long
iations showing an understandoverdue particularly in the less
abie preference for mortgages and

the Federal Reserve System effectIve Feb- "• 1954-

standards of living. The breaking

down of the compartments should
release this tide; and we should

i!

A-i

x

.

developed countries.
see

^ j

n

d

in

Fe(jeral
"With

,

ijnn

nr

major

a

Reserve

mnrp»

he

«:aid

"and

finan/ial

*

*

*

*

.

.

en(j

an

the

compartmentalization

host govern- which has caused
in- porting country to
equitable
q

been

Shoe

of

*
*
State Bank, Alden,

American
and

has

the greatest check to an even rise
and spread of the tide in World

Director

a

cotton-im-

corporate bonds over lower yield¬
ing Treasury issues, it is not pos¬
sible to have a free market for
Treasury securities in any mean-

buy from a ingful

sense

of the word.

The

re-

A stock dividend of $100,000 in-

there

is

no

need

for

restrictive

credit and Treasury debt manage¬
ment policies to combat inflation.

further

Without

Particular cotton-exporting coun- versal of Federal Reserve policy

in

try because of a trade-clearing or
barter
agreement
between
the

growing* productivity of American

in

May of 1953 was a laudable
recognition of the facts of our
financial life, and reflected credit

armament

increases

major

the

outlays,

.

....

j.

ever-

*

Hahn. Hal W.Cross, Cashier, was
elected Vice-President in

charge

of operations; William J. Huntqr
succeeded to th,e office of Cashier;
and

W.

W.

Blakely

name<i

was

Assistant Cashier.

,

Mr. Meyer has been associated
with the bank in an official ca¬

pacity since it opened for biisi^
ness
on
July 1, 1914.
He was
Vice-President
time

that

Director tiiat

and

and

was

named

Presi¬

in

dent

1916, serving in that ca¬
pacity until May 12, 1950, wheh
he was elected Chairman of th&
board and
Hahn

in

was

the

succeeded by -Mr.

*

Presidency.

John R. Nunnery Resumes
Investment Business
MERIDIAN, Miss.
Nunnery

is

—

resuming

John, R.
a

business

securities from of-

in investment

enterprise, providing ample goods
and services to satisfy any expan- fices in the Citizens National Bank
nremises how can a foreign gov- price; and always we should find upon officials who displayed good sion of civilian demands, is the Building, under the firm name of
mpnt pian w
?uf cotton sal?ble ^ foreign mar-' sense in reversing policy decisions surest safeguard against a renewal John R Nunnery & Co. He will
ernmeni 'nlan to balance its dolkets on even terms of quality and without
delav
when
this
1
:
delay
when
this was of inflation.
was
specialize in municipals, unlisted
lar trade? And how else can we price.
called for.
"Without war, deflation rather
•
'

the dollars

available. Wihout these two,

almost

without

regard

to

p

^

.

,

...

believe in their
money

on

plans and risk our

them?

-




The

removal

of

the

bilateral

strait-jacket from the great por-

"There
tion

has

also

generally

of

been

the

recogni-

fact

that

than

inflation

threat."

is

the

greater

shares.

-

/

,

securities and

.

,

.

.

investment triist

XI

36

The Commercial and Financial Chronicle

(804)

Optimism

Leo Newman to Join

London Exchange

on

PAUL

By

Our

EINZIG

rising prices of British industrial stocks on
the London Stock Exchange, Dr. Einzig lays immediate cause
to increase in dividends and the issuance of bonus shares by a
Commenting

Finds, however, that

securities

more

government market is still digesting the new securities
out of the refunding operation, with particular em¬

came

in mind of building up positions in the recently of¬
obligation.
It is evident that the commercial banks,

the purpose

Says
optimism.

representing assets with intrinsic value.

also, international outlook is viewed with

i

Corp,

phasis being put on the 2V2S due 1961.
It is reported that many
institutions are still making adjustments in their portfolios with

fundamental

more

a

The
which

American Sees.

Governments

on

CHIPPENDALE, JR.

By JOHN T.

factor is the deferred manifestation of the effects of inflation
on

Reporter

on

number of firms.

Thursday, February 18, 1954

..

.

fered

2V2%

especially the smaller out-of-town ones, are still

the leaders in

this operation.

England—Despite

LONDON,
tfears

by

expressed

omists,

cians, and

econ¬

many

politi¬
bank chair¬

editors,

financial

even some

men,

to

as

the

course

business

of

activity,

the
Stock

London

Exchange
t

continues

in

operate
bullish

spite

what

of

has

said

and

been

written

the

about

American

business

Einzig

the

threat to Brit¬

remained until
under the depressing

hand,

cently
fluence

that

limitation

the

re¬

in¬

limitations.

dividend

of

Now

is

re¬

in defiance of the Govern¬

laxed
ment's

oft-repeated
declaration
be maintained, nat¬

that

it

ural

economic

must

forces

making

for

share prices have been
making themselves felt.
It is of
course
difficult to say to what
extent this movement has already
higher

recent

months, but on the whole

chances

the

tinue

for

offset

that it

are

by

the

of

jeccord attained in 1947

post-war

as

result

a

•of Dr. Dalton's

cheap money pol¬
This in spite of the moderate

icy.
fcut

trial

noteworthy decline of indus¬
profits during 1953.

The

immediate

for

cause

this

optimism is that in recent months
a

number of firms increased their

-dividends
Xt

issued bonus

or

shares.

that, unless the Govern¬

seems

ment should decide to adopt legis~4ation limiting dividends—which

it

is most

that

unlikely to do,

seeing

Socialist Chancellors of

even

the Exchequer were

unwilling to
to such lengths—there is a like¬

jgo

lihood

of

ferred

dividend

number

a

the fundamental

addition to

In

ate

immedi¬

long-de¬

increases.

It

is

also probable that a number of
■firms will be allowed to capitalize

their undistributed
the issue of stocks

profits through
on

bonus terms.

!£he anticipation of such develop¬
is quite sufficient to pro¬

ments

vide

a

hostilities

practical explanation of the

there

rate

There is, however, a more pro¬
found
reason
underlying the

Usually when

trend

a

is

perfectly capable of being ex¬
plained by some obvious super¬
is

instance

industrial

the

stocks

is

than

more

meets the eye, in the form
damental factors at work.

present

of fun¬
In the

firmness

of

deferred

a

manifestation of the effects of in¬
flation

securities

on

n«ssets

with

representing

intrinsic

value.

"Throughout the inter-war period,
3a»d

also

War

in

after

vanced

second
with

inflation,

asecurities

of

sas«ets and

•capacity
Indeed

the

countries

the

firms

with

an

inflation

the

ad¬

prices

with

of

tangible

to

inflation.

anticipation

often

was

World

more

elastic earning

responded
even

sufficient

of

that Mr.

cide

to

expect

to fear
have to de¬
rate and

Butler may

Bank

the

raise

to

reinforce credit restrictions. Even

ment, its conditions are not such
as to call for drastic action.
In¬
the

deed

possibility of

further

a

lowering of the Bank rate cannot
would

This

be

ruled

immediate rise in Government

out.

cause

was

in

itself

sufficient

to

prevent
net
company
earnings
from rising to the full extent jus¬
tified by the inflationary rise in
prices. But, in addition, the share¬
holders have been prevented from

t>enefiting by the nominal increase
4Df the taxed profits of their firms.
3Auch of the additional profits has
tbeen ploughed back into the firms,
«r

is kept as a liquid reserve.

•cither
4the

case

shares

Stock

the intrinsic
has

value

increased.

Exchange

prices,




be surprised if this did not

$11 Billion 2Vz% Bonds Issued
The

announcement

ernment

securities

were

shows

involved

that

the

in

matured

or

for

payment

markets had

been well prepared

for the

need for

liquidity.
On the other hand, the extending of the ma¬
turity of $11,000,000,000 of the retirable securities is a very favor¬
development and one which will no doubt be continued in

able

the future since it

The

clouds of

storm

business

a

is the stated policy of the powers that be
the more distant areas.

to

maturities out into

This bond has

desirable coupon rate, the ma¬
turity is also to the liking of most institutional buyers and there
are prospects of price
appreciation. The fact that the money mar¬
kets are being kept on the easy side adds to the attractiveness of
the recently offered security.
There is, however, the possibility
a

very

that other intermediate term issues will be offered in the not dis¬
tant future but if the present trend of interest rates

continues, the

such

coupon rate on

obligation will not be

an

as

favorable

as

was

available in the recent offering.

of

Discount

Slash

Rate

rate

There is little that
about

wait and

to

the

to

limitation

We

can

relaxation

the

dividends

on

just

In regard

see.

there

latter,
that

doubt

be usefully

can

former.

the

be

no

the

of

tends

to

claims. Now that
after so many lean years, during
which dividends lagged far be¬
hind the rise in the cost of living,
encourage wages

the long-suffering investors are
beginning to come into their own,
the industrial

they too
the

are

that

entitled to disregard

so-called

That

insist

workers

'Svages Veiling.".

ceiling has

rigid, much less

been very
than the divi¬

never
so

dends

ceiling. It has followed, and
preceded, the i^se in
cost of living. Nevertheless, the

has at times
the

would

Prime

there

ers

be

must

more

money

There

is of

cake"

"increasing the size of
through increasing

productivity
there

much vague

course

as

should

result of which

a

be

more

money

about this. To be able to increase

productivity
extent

to

considerable

any

require capital in¬
vestment on a large
scale. And
any
noteworthy stepping up of
the capital investment programme
at

a

would

time

chasing

when

power

through higher
dends

would

long

vestment

can

form

bigger

before
of

the

consumers'

is

pur¬

increased
and

wages

divi¬

produce inflation
new

capital

in¬

bear its fruits in the

output

cost of production.

L

or

lower

bring it in line with the

Rate

Be

composed of
insur¬

company

and

officers,

investment officers,
analysts of invest¬

government analysts

firms,

from the SEC, etc., and professors
from

universities

local

the

investments

in

instructors

and

have

recently joined together to form
The

Washington Society
Analysts.

of

In¬

vestment

At

a

final organizational lunch¬

meeting held on Feb. 10, 1954,
the following officers of the So¬
ciety were elected:

eon

Ford

Blanchard,

Specialist, Federal

Vice-President

Wilbur

—

C.

Dieter, Trust Investment Officer,
Union Trust Company, Washing¬
ton, D. C.

Secretary—Robert A. Adriance,

Treasurer,
Insurance

United

Life

Services

Washington,

Company,

Treasurer—Henry Merritt Cun¬

Reduced?

ningham,
comes

greater pressure

on

other rates,

no

great amount of agreement yet as to when the prime rate might

be

lowered, because there

especially the prime bank rate.

are

ion that it will not be cut.

many

There

signs that this will

bankers who hold the opin¬

However, if the

be

not

the

to be

seems

pressure

continues

the money markets for easy
money conditions—and there

on

are

to

to lower

go

levels.

New

in

Instructor

Invest¬

ments, School of Foreign Service,
Georgetown University.
The

tional

has

Society

standing

men

out¬

invited

in the local and

business

na¬

communities

to

no

policy in the foreseeable future—

it is believed that the prime bank rate will have

speak

its

before

luncheon

membership

meetings

being

at

sched¬

uled for the future.

Money Issue Awaited

The

money market is now looking toward the new money fi¬
nancing which the Treasury will have to do in the not too distant

future, probably
that

a

some

time in April.

The talk still is very strong

long-term obligation will be sold by the Treasury in order

to obtain the needed funds.

There appears to be no doubt about

the Treasury being able to sell such
rate would be under 3%

offered.

However,

unless

there

term

also for the employees.

to

With the decrease in the discount rate

among money market

for the sharehold¬

in

D. C.

Will

is

money

reduced

other rates.

Trades Unions insist that if there
more

be

years

Power Commission.

dium of open market operations.
Open market operations and the
discount rate go very much hand in hand in our

discount

some

Washington

investment

President—C.

The lowering of the rediscount rate from 2% to 1%% was a
natural development because the Federal Reserve has been
keep¬
ing money market conditions on the easy side through the me¬

exports

wages re¬
the horizon.

on

course

in

trust

Public Utilities

The

Arthur

J.

and

for

WASHINGTON, D. C.—A group
here

ment

It is the opinion of many money market specialists that the
market will not need too much time to fully absorb the refunding

21/2S of 1961.

Co.

Washington Inv.
Analysts Formed

partners

high

unduly

through
main

British

of

decline

a

&

trading department.

ance

New Bonds Deemed Attractive

recession in the United States and

of

Warner
the

February refunding operation took
and three-quarter year 21/2% bond

the

seven

money

called

were

Inc.

Securities,

by the Treasury that holders of the gov¬

which

intermediate-term obligation.
To be sure, those that had to have
a shorter-term issue went for the 1%%
certificate because of the

move

BOSTON, Mass.—Leo Newman
will
shortly
become
associated
with American Securities Corpo¬
ration, 111 Devonshire Street. Mr.
Newman has been with Eastern

take place.

the

tendency in due course.

of

the

market specialists would not

issues, and industrials would fol¬

In

Their
on

purposes

Leo Newman

yields for the outstanding obligations.

still very strong that a long-term bond
will be sold in the near future, some

low this

jprice level has hitherto been pre¬ available for both employees and
vented by the unofficial limitation shareholders. But it would be self«n dividends.
It is true, high tax¬
deception to
be too
optimistic
ation

money

are

monetary econ¬
omy and since the open market operations had put the
money
market in an easy phase it was purely a question of time before

the
ment of industrials to the inflated

new

the balance of payments
could do with a further improve¬

talk about

post-war Britain this adjust¬

for

money

though

to

•snake such securities rise.
In

need

no

Nor is there any reason

have

there

is

disturbing developments.

any

change.

cause,

might be re¬

Korea

certain that in that sphere at any

said

ficial

in

Now it seems practically

newed.

firmness of the London Stock Ex¬

movement.

financial

practical

an

of

that be will result in lower

Although the opinions

$11,000,000,000 of the

velopment at home

economic factor and the

are

qnd

is

factor,
ish business
there are other factors making for
prosperity through excessive
higher Stock Exchange prices. The
wages
demands, and
the
geninternational political outlook is
-cral
uncertainty of
the
out¬
viewed
with more optimism, in
look, British industrial stocks are
spite of the difficulties encoun¬
3dsing slowly but persistently. In¬
tered at the Berlin discussions. A
deed early in February they came
few months ago it was feared that
to within
reach

bonds

con¬

unfavorable de¬
or abroad.

some

that large blocks of the intermediate and longer-term
being bought by investors. It seems as though the be¬
widespread that the easy money policy of the powers

reports

lief is rather

it

will

unless

time

some

time to get the
again, there are

Although it will probably take a bit more
technical position of the market into good shape

spent its force by the rise during

re¬

cession,

l>r. Paul

a

man¬

In

ner.

o

other

a

very

appears

specialists

as

obligation and the

an

long-term issue

to

be

seems

new

money

institutions.

a

long-

tell
are

MUNICIPAL
SECURITIES

This type of monetary

Therefore, the securities to be offered

should be tailored to appeal to needs of the deposit

This would leave the non-banking institutions in

position to supply funds to the mortgage market.
money

f

to be predicated upon the idea that bank
deposits be

maintained if not expanded.
for

and

new money.

It is

action

A

STATE

to be

evident that Federal has been
building up the market not
only for future financing but also for the purpose of
bolstering
the economy through
monetary measures.

U. S. TREASURE

question

to the advisability of

obligation at this time for the raising of

_

coupon

were

considerable

f

The kind of

a

new

financing that the Treasury does in the future will probably

whether

Federal and

going their

own

the

separate

Treasury

are

working together

or

Aubrey G. Lanstor

ways.

& Co.

1

INCORPORATED

Singer, Deane

to Admit

PITTSBURGH, Pa.—G. Harton
Singer, III will become a partner
in
Singer,
Deane
&
Scribner,
Union Trust Building, members of
the
New
York
and
Pittsburgh
Stock Exchanges.

Now Scheffmeyer Co.
The

Brown,
Broad

firm

name

of

Scheffmeyer
Street,

New

15 BROAD

Vernon

C.

&

25

Co.,

York

City,

members of the New York Stock

Exchange, on Feb. 8 was changed
to Scheffmeyer & Co.

I

ST., NEW YORK 5

WHitehaU 3-1200
231 So. U Salle Sl

45 Milk

St.

CHICAGO 4

BOSTON 9

ST 2-9490

HA 64463

[Volume 179

Numbed 5300

-

The Commercial and Financial Chronicle

...

(805)

stockholders;, and the.
selling less than five times
last year's earnings. Moreover, the
management has expressed con¬

37

veommon*

stock is

siderable confidence

Bank and Insurance Stocks

the out¬

over

look for the current year. In De¬

cember,

N.
For

the

Y.

Central

first

time

in

MOP

—

long

a

while there has been considerable
ln

market.

v!rk Central
i5ar»r°^
Y
i

New

has

the

stock

Stock

Exchange

on

New

the

in

York

recent

fight for control that

be

impending.

Mr"

+nrc

clared

company can

1954

tnat

Earning

will

ne

the

at

present

be

common

Another stock that

enjoyed
popularity early

con¬

this

the old Missouri Pacific

preferred. In a radio broadcast
Sunday night, and in the news¬
papers on Monday morning, one
widelv

more

rolum-

read

nists predicted dynamic action for

such

had

could

Reserve to increase bank

be

cut

attention

oper-

by apOn such

ters

over

By

of available net to the

third of that

!

Continued

from

page

After

substantial

Monday

buying

accumulated that it

orders
two

was

not

________

other

contraction.

The effect may

firms

prosperous

great and it may be
pretty much limited to industries

tries the
exhausted

which produce

tended recession.
in

in

mistake

rather specialized
Nevertheless, it is a

to

that

assume

or
nothing
unemployment.

about

late

even

in

an

cyclical

ex-

For weak firms

over

the

volume

of

there

be

joint

em-

supplementary unemployment
compensation impresses m e | a s

the

question in the minds of
analysts as to whether the
capitalization can be expanded
sufficiently to justify the present

In the

advanced
t,avancea

orice
price

of
oi

the
tne

preferred
preierrea.

The third stock to attract atten-

tion with wide swings was Illinois
Central

The

common.

stock

had

heen particularly strong through¬
out most of last week on rumors
that

dividend

the

creased

would

be

in¬

and the stock

split. Dur¬
ing the trading period Friday it
onnnnnrort

™

unwise

to

such

a

It would

proposal.

,

(*) funds. It remainspooling relhe prodlem of to be

serve

seen

whether

reserve

funds

TntoexistenceIs
e*isieui.e

the

.

brought

resu°"
xesuu

of

ui

negotiations can be pooled.
plain that employers wm be

union

It

is

most

reluctant

tainly

every

turer

would

to

do

this.

Cer-

automobile manufacstrongly resist the

demand *2. tf
up
hid" whlch ™«ht be dl\awnt
h's
L maS I. competitors. x" ordfrisks ther.e to
*°r unions
no mention was
be
broad pooling of

that

nniv

the.

rat.

a"n90,U"^rtaH,

hifn dilatad

aad
been declared and

made

on

the

a

tickers of any

news

split. There was considerable dis¬
appointed selling following the
announcement.
Subsequently
it
was

announced

one

split of

that the

two-for-

stock

the

authorized by the

had been
Directors, sub¬

1

+

VO

IllrtllftrlflO

UTAH

M

AA/^

in different industries would need

to

cooperate in demanding pool-

I do not believe that the unin
non-cyclical industries,
such as meat packing, would be
interested in having the reserves
of the employers in their industry
pooled with the reserves of em¬
ployers in cyclical industries, such
as the automobile industry.
mg.

ions

to unemployment
compensation, such as the traditional
guarantee plans modified
Unhilitv

on

nlanc

or

good for the comi think that the answer

munity?
is

„Yes „

would

be

Either
a

in stabliization.
borne

in

arrangement

useful form

mind

buiIt_

of

But it should
that

the

be

building

up of reserves should be provided
for and the liability of employers
should be limited. Otherwise, the
*•

lans

would
•

»

do

more

barm

than

And unless the guaranteed
annuai wage plans or supplementary unemployment compensation
good.

were

widely adopted, their stabil¬

izing

influence

would

not

principal

objection

be

,

.

appointment

over

x,.

to

the failure

of

directors of Illinois Central to in¬
crease

the

regular

$5.00

annual

contracting,
are

unless

both

parties

convinced that the accumula-

tion of

reserves

would not be de-

where the need is least and the
least

adequate

provision

where

the need is greatest.

at this time, there flationary.
Far preferable to a spotty exV
tension
of
feeling among railsupplementary
un¬
load analysts that the decision to
Which is preferable—the tradi- employment would be a broad
split the stock probably presages tional type modified by reserve liberalization of the state unemmore liberal dividend policies in
funds
and
limited
liability, or ployment compensation schemes,
the not too distant future. Cer- the supplementary unemployment Hence the unions are performing
tainly
the
company's
earning compensation
proposed
by
the an important public service in
power v financial progress, and fa- unions?
The answer depends on calling attention to thecgreat need
vorable
prospects
combine
to the nature of the industry. For for substantially liberalizing the
dividend

rate

is widespread

justify

such hopes.

There

is

no

relatively

industries present unemployment compensation schemes. And until employthe volume of ers ibake an effort to persuade

non-cyclical

road in the country

in which employers have consid-

such

erable control

a

that has done
comprehensive job in r£-

over

employment, the modified tradi- legislatures to liberalize unemtral, except in instances of judi-. tional plan seems preferable for ployment compensation schemes,
cial reorganization.
This job is the
prosperous
concerns.
This they are not in a good position to
now completed, with the goal of a
plan would be more effective in oppose the efforts of the unions
one mortgage road achieved. Also,
sustaining personal incomes well to accomplish the same result by
finances are more than adequate, into the recession—in fact, in the collective bargaining.
ducing its debt as has Hlinois Cen-




be expected.
The softening in
actions taken

two

credit which occurred combined with certain

by the Reserve authorities has substantially changed,

interest rates.

some

Beginning last July reserve requirements were reduced -by
percentage points at Central Reserve City banks. Since then

Treasury bills, one of the more sensitive rates, has
near 2%
to about 1% currently. Actually at'©ne
time the rate was close to 0.90% several weeks ago. Commercial

the

rate

declined

have

on

from

also been reduced. Rates on top-grade paper
times in the past five months.
During She

rates have

paper

been

five

cut

period the bond market, both municipal and corporate, has
staged a sharp rally with a corresponding decline in yields.
same

As

confirmation of existing conditions and a positive indi¬
Reserve policy the rediscount rate at the major

a

cation of Federal
money

centers

was

recently reduced from 2% to 1%%.

these sensitive rates have been among the
rapid on record. Yet during this entire period the prime loan
major money centers has remained officially unchanged.
The last change was made in April, 1953 during a period of active
loan demand and some credit stringency when it was raised from
The

changes

in

most

rate

at

3% to 31/4%.

changes which have taken place since that time

In view of the

there had

beep some expectation that the prime rate might be
reduced. However, as pointed out at various bank annual meet¬
ings, the demand for loans is still relatively good. The decfline
which has occurred has been from a relatively high level and iin
terms of

percentages is fairly mild.
that some institutions may reduce $he
rate, in which case other banks would follow. However, in recent
Of course, it is possible

to be a feeling that rates will be determined
negotiation between lender and borrower. This would
mean ignoring the prime loan rate.
In this connection it is understood that several of the larger
banks have made commitments for loans at rates below the offi¬
more

the

•-

.

by the end of March and that an up¬
If so some expansion in loans is to

weeks there seems

great.
The

of the factors mentioned!

activity.

turn will occur at that time.

of the

liability, or plans oi tne
general .sort he
"ow Prop°sed by
some unl0ns
?

J

ject to approval by stockholders
and by the ICC. An accumulation
union proposals for supplemenof buying orders also made it dif¬
tary unemployment compensation
ficult to open this stock on Mon(4) The timing of the adoption is that it makes quite uneven proday morning and the initial sale of guaranteed annual wage plans, vision for unemployment. 7[he suptook place late in the morning
Reserves should be accumulated plementary unemployment cornfour points above Friday's close for at least a year before benefits pensation
is not available to
and
duplicating the previous are paid. If the accumulation of unorganized workers. Since pool1953-1954 high of 90. All three of reserves results in an increase in ing of reserves and liabilities is
these
dynamic stocks retreated the ratio of savings to personal probably not feasible in the case
from their optening highs later in
incomes, it would be deflationary, of privately negotiated plans, the
the day in sympathy with the gen- Hence, supplementary unemnlov- union plans are Jikely to result
ment compensation plans should in the most adequate provision
eral market trend.
While there was some early dis¬ not be started when business is for unemployment compensation
,

been completed or will be

^y the addition of reserves and
limit*

and business

Many people believe the readjustment in business has now*

supplements

for employers to agree

coming months it is likely that demand for loans will

continue to be less than last year because

unions
is would

benefits to the worker.

have been

area

—seasonal considerations

tary unemployment compensation
of the sort now proposed by

of

were

$463 million as compared with a drop in the similar
period of 1953 Of $161 million. Of course it should be pointed out
that whereas a year ago seasonal factors were not very important
this year they are.
Also the current liquidation is coming at a
time of declining business activity. There is also the fact that th^
expiration of the excess profits tax on Jan. 1, 1954 caused many
borrowers to pay off loans that had formerly been maintained
because of the tax advantage it afforded.
■

sup-

administration

show the

has been

such

control

borrowing failed to

end of December, loans at many
lower than the previous year by a small,

business loans at banks in
declining. In five out of the past
six weeks the total of commercial, industrial and agricultural loans
has been lower. The cumulative decline since the end of the year

ployment is quite limited and in
P|ementar5' unemployment com- which recessions are likely to
The administration of

<2)

banks

the New York

be

be

examiner's

proposed report
company's reorganization
to be released at any time. While
it is generally anticipated that a
new
plan will be more liberal
than the old one, there is consid¬
<on

easing tendency in price trends and economic activ¬

an

Since the beginning of this year

indusnot

industries, the' suppleunemployment compensation proposed by unions would
be preferable.
For cyclical industries in which the employer's

days of well-develindustrial research can do

little

such

might

mentary

manage-

ment in these

oped

reserves

many

ICC

hand,

margin.

erable

large block at a price 5^ points
higher than the previous close.
Everyone has been looking for the

increasing sharply in 1952, loan volume continued very

of the larger

Guaranteed Wage

be very

uneasiness in some quar¬
the i current period. Some

activity and business expansion. As a result, bank loans ia
early months of last year; did not show the usual seasonal
decline and at the end of June, 1953, were actually close to the
record reached in December, 1952. In the final six months, on 'the

would be preferable.
It
quite undesirable.
In fact, it
interfere less
with
the
a more or less impertinent
sugges- movement of labor out of the intion that private
machinery be dustries and it would be more
created to replace public machin- likely than the traditional kind of
ery.
The union proposes that if guaranteed annual wage to give
a state
agency declines the claim workers
in
cyclical
industries
of
a
worker
to
unemployment some income right through the
compensation, the joint machinery recession,
established under the supplemenVI
tary unemployment compensation
Would some form of guaranteed
plan may pay the unemployment annual
employment or wage or

hours before the stock could open
and when it did so it traded in a

earnings: in

the

'

opening

for

trial

amount.

the^rSatively ^iear ft™*"0"- tTh* Proposal of that produce extended periods of cyUnited Auto Workers Union the clical unemployment, supplemen-

the

outlook

was noticeable and business
normal seasonal expansion. At the

ness

soften¬

strong in the first half of 1953, reflecting the high level of indus¬

14

on

a

This in turn has focused

bank operations and caused

on

the

in

ity

Reflections

has been reflected in

conditions.

a pay-out of only a

___

reserves

background, however, may help to give perspective to current

year tjley hit a new high of the road could earn somewhat
Thus the company, con- above $15 a share in the current
servatively capitalized and finan- year, with the present dividend
30%

Bank Stocks

ing of interest rates in recent months.

basis it would be indicated that

a

products.

developed
under his
and with changed

siderable

future.

costs

proximately $6 million.

have averaged $12.87 and

nis

policies.

the stock

the road>s better_

time, he estimated that

ating

—

Easing in the demand for credit and action by the Federal

annual

next

management

the

on

VmnS hafHp" ihan sound, is paying out less representing
cially

the challenge. The fight
promises to be quite interesting,
with Mr. Young claiming that sub¬
stantially higher earning power

of

same

is high, Over the

power

past 10 years, share results on the

cepted

was

based

This Week

ta

4.a* larSer sha[e °f re~ than-average traffic status. At the

irl5U

ported net to the stockholders.

meeting and will actively seek
proxies from the public holders.
The Central management has ac¬

week

therefore, that the
henceforth afford to

$18.59.

Refused repre-

R

slate

could

By H. E. JOHNSON

John¬

|mlyS 4% % "i^'gros^revenues

tors, Mr. Robert R. Young has deown

Wayne

public interest m iast
appears

fi?*
the
to

Mr.

1953

ston, President, was quoted in the

Illinois Central

It is indicated

fairly consistently been the most
active

—

I

by

'

cial

rates.

coming

It

Even so,
of

a

is

likely

that such

a

trend will continue

in the

moriths.

year ago

current rates on loans compare favorably with those
indicating that interest from this source will be well

maintained.

Also it should be remembered

that many banks took advan¬

tage of the high yields prevailing last year to establish tax losses
and reinvest funds at the favorable returns then prevailing. This
should carry over

into the current period.

Lastly, it is well to mention that the current policies of the
Reserve could result in a further reduction of reserve

Federal

requirements that could add to earning assets and help to bolster
earnings.

38

(806)

The Commercial and Financial Chronicle..

A MUTUAL INVESTMENT FUND

NATIONAL

Bfrri
h

SECURITIES

»

SERIESk
WRITE FOR

j

fir-

I

\

FREE INFORMATION

FOLDER AND

/

PROSPECTUS

NATIONAL SECURITIES &
RESEARCH

CORPORATION

htablithed 1930

120 Broadway, New York 5, New York

MSTIAl

'investment
mil
I I 1 ONE
,/
WAlt
STREET

'Calvin bullock
&
GENTLEMEN: At
me

a

no

NEW YORK

obligation please send

prospectus on

Canadian Fund,

Address.

ustodiarx
BOND, PREFERRED AND
COMMON STOCK FUNDS

The

Keystone Company

50 Congress Street, Boston 9, Mass.
Please send

your

me
prospectuses describing
Organization and the shares of your

Funds.

ten

Name

D-85

■.

Addreu

City

State

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Investment Fund
Prospectus

may

be obtained

from investment

dealers

or

Prospectus
The
200

Parker

upon request

Corporation

Berkeley St., Boston, Mass.




Lord, Abbett & Co
rk

—

Chicago

Atlanta

Los

Angeles

Thursday, February 18, 1954

Volume

179

Number 5300

..

The Commercial and Financial Chronicle

.

Continued from page 3

*»*,■<

of

by

be forced

into

increases in

wage

declining business.
of

bankruptcy
period of

a

The 80 to 90%

our

creasing

of

use

progressive

capital

taxation

income

—

taxes,

gains taxes and

high
high

high in¬

people who did not directly
benefit from these
wage increases

heritance

would

the almost universal
acceptance of

find

themselves

ingly unable,
the

increas¬

unwilling, to
prices, with the

higher

or

pay

in¬

evitable result that sales would
decline and large scale
unemploy¬
ment would

As

■

this

revelop.

analysis

inflationary
from

maintain

higher

indicates, the
developing

national

effort

to

prosperity
by
paying
in the face of de¬

wages

clining sales would soon solve it¬
self; so, the real danger here is
not

inflation but accelerating
flation!

The

attitude

tion.

is

On

of

the

ment

to

in

and

take

opposed

surface, inflation is
being something akin

as

to

original sin! But, in reality, the
public loves everything about in¬
flation
except,
of
course,
the
higher prices! Frankly, the Amer¬
ican

people,

regardless

of

their

best
interests, would
un¬
doubtedly prefer inflation to the
wide swings of the business
cycle
own

such

as

two

suffered

we

world

should

so

will

proportions
decline

My conclusion is based
that

our

inflation-

philosophy

dangerous

business

between

This

wars.

.as-a-way-of-life
reach

if

sharply.
the fact

on

of those in business

many

today either don't know or have
forgotten how savage competition
be

can

when

decline.

As

business

begins to
adverse de¬

a

result,
velopments in the days ahead will

,

be

magnified

tion

out

their

to

will

of

all

propor¬

importance,

further

contribute

which
the

to

downward swing and demands for
"relief."
This lack of perspective on such
a

large proportion of

business

the

with

Old

present

our

generation

characterized
from

might
these

be

words

Testament:

"Now

there arose up a new king over
Egypt, which knew not Joseph."
The

Economists and

In

means

economists

tinuing
the

to

averse

mild

a

inflation.

advantages

outweigh

the

by

are

and

con¬

They feel

of

such

no

that

policy

a

disadvantages.

In

fact, Professor Slichter of Harvard
has

publicly maintained that in¬

flationary doses of,

3% a year
are necessary to keep business ac¬
tivity from falling to politically
unacceptable

levels.

Professor

Clark

lion

cut

tax

say,

And,

with

and

his

now

$20 bil¬

budget

deficit

proposal trumps the field!
Such

opinions clearly indicate
ingrained the Keynes-

'

how deeply
ian
New

Deal

—

in

become

fact,

it

has

is

thinking. In
widely accepted,

so

today with the Republicans

even

in

philosophy

economic

Washington,

nessmen

are

that

relying

busi¬

many

more

on

the

government than on themselves to

the

prevent

ping into
Will

Further

basic
we

First,
been

Let

v

us

economy

; a

•

r

Inflation

Be

briefly analyze our
and the outlook, to see if

"shot in the arm" of such huge

j
.

In

any

such

analysis,

it

must

ican economy is "something new
'.under the sun."
The American
:

.

long based on mass promass distribution, has
many
things new added in

.

.

revo-

lution of the 30's with its tremen-

of

changes

the

in

national

in

a

a

position

to

ameliorate

it.

do

have

to

great

a

Thanks

deposit insurance, they

to

longer
being
panicky

no

about

worry

stabbed in the back by a
run
of
their
own
depositors.

Mortgage credit, especially on 1-4
family houses, is no longer on a
dangerous term basis, but is al¬
most

entirely

the

on

installment

plan,

and a great deal of it is
guaranteed by the government in
one
way or another.
Farm price
support
sound

or

legislation

income

from

low

rity

whether

—

unsound—prevents farm

trously

dropping
levels.

to

disas¬

Social

secu¬

is

well-nigh universal, and
economic
security
of
our
people is greater than ever be¬
the

,

fore.

Second,
and

there

ments

but

of

strength.

few,

a

facilities

many

are

increased,

many

To

American

are

new,

direct

distribution
income; the in¬
the




demoralized?

that

offset

all

increases,
direct, be
productivity.

or

increased

this

Third, in¬

wage

"fringe"

by

And,

be

can

done,

too,

as

everyone knows!

And, finally, re¬
salesmanship! This

vive the art of
has

been

cently
have

belabored

that
to

I'll

be

through
force.

much

so

just

nor

will
way,

the

sales

done with mir¬

production

modern

more

than

Government

Can Do

to

Counter Deflation
the government do to

can

the

prevent

current

normal

re¬

developing into

business setback

serious in

more

character?,, The answer is: Many
things!
More
specifically,
the

Quantitative
would

be

crease

the

reduce

or

reserve

availability
its

cost.

duced;
could

or, open market operations
be
increased.
Whatever

method is used, the easier money
conditions caused by the use of
such
quantitative
credit
meas¬
would encourage

ures

Our

than

economy

in

is

the

Qualitative

credit

also

measures

and
be

can

well

birth

to

new

The

creasing at a breath-taking rate
—4,000,000 babies were born last
year

and

tion

to

bouncing crop of sim¬
ilar proportions is expected this
year.
But the greatest contribu¬
the

a

the

dynamic character of

American

is

economy

the

steadily rising standard of living.
In short, more people want more!
And, if they don't have the money
to pay for it, they don't hesitate
to go
ent

into debt for it, as the pres¬
huge volume of consumer

credit of

than $28 billion so

more

eloquently testifies.

Clearly,

from

standpoint,
ter

economic

an

were never

we

position to avoid the

in bet¬
of in¬

use

flationary measures to prevent
readjustment
from
assuming
serious

more

The

Valuable

Not

Be

from

similar

and

government
and

do

can

could

be

fashion.

Such

could

be

many

justifi¬

things
to
counteract
the
downward swing in business and
prevent it from getting out of
control.
The dangerous artificial

is
I

a

can

real

be

desire

believe

avoided

to

there

is

a

desire.
What

business do to counter

deflation?

ficiency

and

First,
cut

improve

ef¬

and

this

costs;

found

is

at

or

the top

near

very

since the 1950
In

is the fastest growing state in the nation.;
ranked first in rate of income growth, with a

census,

1951, Arizona

The
with
agriculture, industry, mining and the tourist business all being'

23% gain over 1950—nearly double the national average. . .
state's basic economy is in better balance than ever before,

diversified

place

industries, manufacturing last year forged into second
the economic scene. Mining was a close third, and the
again was the state's fourth largest source of in¬

on

trade

tourist
come.

...

difficult to find

"It is

who is not optimistic about
investment men, industrialists,
mine operators, farmers, cattlemen, resort owners, tourists and
residents all have one thing in common; a firm conviction that
for many years to come, Arizona's growth and development will
continue at a rate greater than the national average."
the future

A

Arizona.

of

anyone

Bankers,

.

the company planned to spend $42 million in
its facilities. In this connection it sold $14.5
million mortgage bonds in February and 378,000 shares of common
stock
last
March.
Capitalization then was approximately as
ago

year

1953-4

to

expand

follows:

Long Term Debt__

55.7%

Stock

Preferred

Common

Stock

13.0

and

Surplus

I

earnings

of Arizona

Edison

been

100.0%

Central

Arizona

months

character of the tax struc¬

Calendar

Year

Calendar

activity

Calendar

in¬

the Treasury in the long run, al¬
though they obviously would re¬
duce revenues when

The

rated.
now

first inaugu¬

changes

which

under consideration

are

The

Light & Power in 1952)

follows:

as

12

;

forma basis (adjusted for the merger

on a pro

and

;

31.3

1

Share

ture present unusual opportunities
to
influence
favorably business

creasing the Federal deficit. The
potentialities in the changes rec¬
ommended in the Budget Message
are
so
great that it is doubtful
that they would adversely affect

.

major contributors to the economic life of Arizona. Agriculture
maintains the dominant position, but due to the steady influx of

have

materially

Grand Canyon
every index

our

of almost

by which economic progress is measured. Latest estimates of the„
Census Bureau show that Arizona, with a 13% population increase

Year

stock

ended

Nov.
-

30,
—.

$1.22

1953
1952

1.38
1.01

1.02

Year

1949

1.14

Year

has

1951

1950

1948

been

90 cents to yield 4.7%.

_

_

_

_

__

_

selling

Based

recently

1.15

around

19

and

pays

the latest earnings of $1.22 the
at 15.6 and the payout ratio at

on

price-earnings ratio works out
74%. However, if earnings were based on the average shares out¬
standing, the earnings figure would rise to $1.39 and the priceearnings ratio would drop to 13.7—about average for utility stocks.
to

valuable dollar, i.e., to
Any forces in the other

more

a

deflation.

are:

direction in the foreseeable future

Alleviation

(1)

of

the

double

dividends.

on

Code.

any

the

fair-minded

government

con¬

observer

is

on

the

right track in fiscal matters, even
though it is a slow, uphill course.
This

indeed

is

encouraging

to

those who favor sound money.

omy

is

men

it

has

a

also
have

for

real

posal

our

our

built-in

a

Sam,
inflation

substitute

poor

initiative

and

on

business.
credit

will

and

fiscal

enough
to prevent the readjustment from
getting out of hand if business
does
abdicate
its
responsibility.
which

weapons

These

government

not be too
nor

need

enough

a

Uncle

billion

government has at its dis¬

months

that

be

powerful

econ¬

true

$20

effort

the part of

built-in inflation bias,

is true that

a

be

measures

expensive budget-wise,
they contribute mate¬

business

production

bias!
All basic economic forces point

ahead

need

not

be

affect adversely
value of the dollar; on the
to

1

UTAH

IDAHO

WYOMING

COLORADO

A

GROWING

itminiHuiHitmiiiiiiit

COMPANY IN
iniUMIIIIIIHillMltlllllf

A

GROWING

WIST

great

the
con¬

trary, I expect a modest continua¬
tion of the "more valuable dollar"
trend!

Serving In

need

rially to inflation.
Any inflationary pressure in the

Conclusions
While

man-made.

with

The

Budget Message is bound to
that

be

needle, will

Careful study of the President's
vince

will
even

Modification of the depre¬
ciation provisions of the Internal

it
can

"Arizona continues to amaze statisticians

astounding regularity,

With

economists.

State

190

stockholders waxed eloquent over

company's report to

the outlook for the state.

Year

it

such

The

194

$2,790

$964

Stock---..

Common

for

Balance

Increase

$27,452

$9,335^

Revenues

Calendar

without-

,

Percent

'1952

1945

Calendar

sound

_

.

A

hot

On the fiscal side, our extreme¬
ly high level of taxes and the un¬

if

avoid

to

simjtot unit in

a

perhaps

to

stimulation of $20 billion of defi¬

financing

and

is

It

quali¬
used

f

1955.
,1
generally realized that Arizona Public
Service has one of the best growth records of any electric utility
in the postwar period, as indicated in the following comparisons
taken from page 22 of the company's 1952 report (000 omitted);
1954

in

stimulated

(3)

stand¬

or leased plants of about 200,obtained through firm contracts P™*"
cipally with agencies that operate hydro-electric dams on the
Colorado and Salt Rivers., The company may wish to replace
part or all of this ..purchased power by new plants of its own.
It expects to complete the installation of a 100,000 kw generator

kw, the balance being

powerful effect

(2) Revision of excise taxes.

fight
business

economically

a

of capital
which, as is

increasing the Federal deficit
any appreciable extent.

need not be sacrificed in the

Both

to

Arizona Public Service had total capacity

At the end of 1952,

320,000 kw, including owned

business volume without

point, the "more valuable dollar", Revenue
deflation.

changed

amounts

measures

support

Dollar"

political

a

in

areas

taxation

Sacrificed

1952, about 71% of revenues were derived from the
electricity, 26% from natural gas, 3% from water and a
small amount from other operations.
Gas output (therms) m j
1952 increased 20% and electric output 16%, over the 1951 figures.

activity. Slum clear¬
low-cost housing in con¬

and

tative

a

character.

"More

Even

a

on

be

can

known, has

gested

values.

to

.

over 235,000 customers in 10
covering about 37,000 square

area

sale of

business

being

research, giving
products and new
population
is
in¬

capital
used

stimulate the economy. FHA and
VA regulations and, if necessary,

ance

on

ex¬

roads, schools, etc., the biggest
remaining backlog in America to¬
day.

past.
Every year billions of dollars are
spent

capital

penditures by business and, espe¬
cially by political subdivisions for:

construction

II.

credit,
example,
which are

requirements,

vast

War

of

high at present, could be lowered;
or, the discount rate could be re¬

channel

dynamic

in¬

For

to home

of

end

would

its

counties,

14

,

In

miles.

measures

which

been

the

Arizona's

of

'

Service serves

Public

Arizona

and

credit

those

legislation

since

second with 108%.

was

As bankers know only too
well,
especially after last spring, these
credit powers
may be either quan¬
titative or qualitative.

'

of Security Analysts
(summarized in this column last week) Fischer Black presented a
list of utility companies which are "leaders" in their proposed
capacity additions in 1954-56, the figures being expressed as
percentages of 1953 total capacity. Arizona Public Service topped
the list with a figure of 155%, and Savannah Electric & Power
before the Society

talk

recent

his

In

000

What the

before, in fact, nearly half
of our production facilities have
installed

By OWEN ELY

of

advertising!

Utility Securities

Arizona Public Service Co.

with another mil¬

even

TV

re¬

hard

developing

for

it

say

the

done

It can't be

rors;

ele¬

mention

ever

—and

dous

are

in

there

bloodless

sist

whether

adjustment from

downturns

activity,

to

cit

The

becomes

example^, a

always ag-V

deal

economy,

time"!

previous

have

Public

It will have

be done
sooner
or
later, so
why not adjust before the market

What

now

duction and

:"our

strength

For

in.

•

to

had before in the

weaknesses

markets

creep

thing of
Instead of increasing the 1 government has at its disposal
both credit and fiscal powers of
downward swing in an effort to
vast dimensions.
save
themselves, the banks are

had

.

of

to

are

able

be forgotten that the Amer-

never

elements

many

business

sound

reasonably

new

there

sellers'

wastes

the past.

keep the

at

these

the long period

of

prices to the market.

economy.

gravated

against

economy

few of the

a

of

failures, which

dimensions will be necessary; and,
if not, what will be needed to
"normal" levels,

of invest¬

today,

never

Need

now

are

eliminated.

bank

Necessary?

.

.

economy from
slip¬
serious recession.

a

risks

as

years

Second, instead of attempting to
maintain prices by legislation or
reduction
of
output, follow the
more
realistic policy
of fitting

lion

addition,

World

Inflation

to

factors.

more

Many

the

research,
important

more

on

the

sums

ing huge and unprecedented sums
in plant and equipment
expansion

American

contradic¬

wealth;

protect their future; and the will¬
ingness of owners and manage¬

many

public

curious

a

the

and

huge and unprecedented

which

inflation

the

spread

pension and social security plans
as a
responsibility of business; the
willingness of Americans to save

de¬

The Public and Inflation

to

—

income

pressure

large-scale

any

taxes

done,

lush

permitted

Are We in for More Inflation?
would

be

can

(807), 39,

AREA

RESOURCES

BOOKLET

on

request

P. O. Box 899, Dept. K, Salt loke City 10,

Utah

I

40

(808)

The Commercial and Financial Chronicle

Continued

from first

I propose

page

^

ise that
business
the

Savings, Invssiraenls

to proceed on the prem¬
genuine reversal of the

a

is

trend

latter

not

of

part

for

1954,

growing

have
term

bonds.

terest

1953

the

The

rates

reversal

beginning about mid-

almost

was

in¬

of

dramatic

as

as

rise

in the early part of the
Beginning in May, 1953, even
before the peak of tight credit, the
federal Reserve began to provide
reserves to the banking system by
ihe purchase of government secu¬
year.

rities and followed this with

nouncement, in June, of
tion in

of

further

of

prospect

large

The

issues
was

•diminished by the sale of $5.9
billion

of

tax

materials,

anticipation

of the

shift

from

the: part

on

1949

summer,

softened

and

swung to the belief
credit
authorities
had

the

been

upon an "easy'- credit
The cumulative effects of

all

these

cline

in

sult,

was

interest

yields

rapid de¬

a

As

rates.

a

of

re¬

there

for

business

with

and

its

implications
supply-demand

regard, to

conditions

for

This

be

will

ments

debt

on

credit

investment
followed

As

year;

has

and

torn

•

;

'

we

has

of

the

close

its

and

year

annual

Outpouring-.of economic, prognos¬
tications,^ Shall not pttempt a dertailed

'rinalysik/of ..'the/, business
outlook.1, However,- it 'is' necessary
to

make

tions

few

a

general

economic

on

observa¬

prospects

as

they affect matters in which you
have

direct

a

terest,

immediate

in¬

namely,

the outlook for
for.. investment
outlets

Savings,
and

and

for

interest

in

rates

with

peaks

decline

some

reached

economists

predict

last

have

from

Few

year.

been

another

the

willing

record

to
in

year

1954; practically none expect de¬
clines of catastrophic
proportions.
;<,.SIow Decline
So
middle-of-the-road

the

have

been

trend

of

predictions
substantiated by the

economic

aggregate

dollar

events.

optpUt

The

of

the
economy reached its all-time high
mark

in

the

second

quarter

of

1953; by the fourth quarter it had
declined by less than 2%.
The
volatile

more

production
about 7%

but

the

index

of

showed

a

during the
decline

industrial

drop

same

of

period,

has

proceeded

slowly and gradually.

The lower

levels

of

industrial

production

have been reflected in a moderate
reduction in the average.hours of

work,

some

ment,

.

and

personal
these
or

,

increase in unemploy¬
nominal
declines
in

income,

has

as

but

yet

of

none

become

serious

alarming.
Considering

the

fact

that

the

present correction in business has
been under way for at least six

months, the moderate character
the

declines

series should

comfort

and

in
be

most
a

of

economic

matter of

some

The
record of the past six months does
not

suggest

reassurance.

that

opening

phase

traction

in

fact,

were

we

of

a

business

it not for

are

in

major

the
con¬

activity'.

In

rather "than

rowers

available.

are

still at remark¬

than

The

be

downturn

required

Taxes

the

de¬

in¬

In

appraising the out-

the

into

still

re¬

leave

net

tax

about

taxes will

those

are

that most

busi¬

and

that

liqui¬

to

cline to the view that the adjust¬
of inventories has not yet

ment

been

completed,

months to

that

for

some

tle tendency to renew
inventory
accumulation, and that this will

prevent any significant upturn in
the economic indices.

of

the

the

reason

both
that

1949

mild
the

by

with

—

On^

recession

was

short-lived

and

supported
demands for

automobiles
1948

to

duction
starts

and
homes;
from
1949, passenger ,car pro¬
jumped 31% and housing

increased

support

10%.

Further

provided by

was

a

rising

for

Although
mutual

of

savings;

In¬

that

available

the

in

levels in 1954.

Even the

optimists

Total

Ways

and

reduce

be

may

the

income

of

its present

of

sig¬

some

form, the

proposal would exclude
income

($50

limited

a

the

first

$100

year;

*

prospects
for

smaller

that

are

funds

will

in

income

in

the

first

and by 15% after three years.

year

These

vious

proposals

political

enacted,

would

incentive

investment

in

form,

doubtful

proposed

tax

but

establish

for

if
a

modest

a

equities.

present

ob¬

some

liabilities,

they

tax

their

have

Even

in

however,

whether

it

State

Only
is

would

and

Local

state

and

for

will

be

need

Thus,

the
of

inventory positions

output
goods,

yet

been

does

the

of

all

conclusion

that

other

tions

near-term

a

their

by

business

of

corpora¬

show

to

the

bonds

sub¬

a
.

plant

expansion
be

may

and

almost

as

this

but

forts

have

should

be

mote

a

modest

inventory liquidation tak¬

the

shift

exerted

into

of

case

with
of

funds

In

pro¬
as

funds,

not

the

ings institutions.

to

equities,

mutual

raised do

cumulation

funds

lion.

were

Over

public

may

in,

the

bulk large
annual

by the
1953,

ing

the

the

below

longer

show

term,
increased

in

1953,

the

will

in¬

fore.

dramatic.

is

Pension. Funds

An

increasing
of new savings is being
channeled through pension funds,
.

amount

—.

place

of

but

on

be

the

ac¬

likely

to

be

can

finance

New

issues

se¬

financing by

utilities

1953.

corpora¬

(

under

Title

I

of

years. In addition, the lend¬
ing fraternity is increasingly de¬
voting its energies to devising a,
procedure under which expendi¬

tures

for

With

improvements

to

so

in the

existing

many

and

ex¬

mortgages.

interested

groups

problem, it

seems a reason¬

ably good guess that progress will
be made this year.
The

supply of real estate mort¬
potentially available to in¬

vestors

in

1954

includes

of the Federal National

holdings
Mortgage

Association. At present such hold¬

ings total

$2V2

some

President, in his
clear

that

billion. The

message, made

the

it

Administration

policy will be to substitute private
for Treasury funds in the FNMA
and

to

the

forward

press

liquidation

of

FNMA

problem, of

holdings

in

the

mortgage

orderly

an

protect

individual

the

manner

interests

borrower.

consist

The

is that

course,

of

these

guaranteed

mortgages that have not been at¬
reasons

corporate

in

a

five

than

hand,

non-cash

companies

by

insured

tractive

are likely
to decline, es¬
pecially-. since prospects do not
favor a
repetition of the large

sales

i

pro¬

National Housing Act, arid to
extend the maturity from three to

large

curities

volume of securities

buying

second

the

was

in

of

His

to increase from $2,500
to $3,000 the maximum loan that

of

with

inventory

by

when

was

of

issues

home

posal

ex¬

new

old

dwelling.

in

other

new
housing. This
designed not only to

new

to

the

for

existing

ing but also to facilitate the sale
of

holdings

are

maximum

on

encourage modernization of hous¬

(principally depreciation)
larger. On balance, there¬

provided

to

is

designed

Profits

loans

homes comparable with the terms
available

reduced,

sharply

cumulation.

of

they were in
capital needs

as

be lower and taxes, paid on
sav¬ 1953 profits, will be higher

for in¬

$500

year

working

ac¬

in equities, but any change
likely to be gradual rather than

present cor¬
rection in business
may last some¬
reces¬

of

1953,

been

insurance

the

authorized

ditions

so

to require

decline

for

make

terms

The
is

approval

issues

new

to

was

pansion could be financed by ad¬

larger.

facilities
as

it

large

what longer

1949

..

1954

in

threat. Savings habits change
only
gradually. Even where strong ef¬

terest

than the

last

record

a

(perhaps 15 to
1954, reflecting a corre¬
sponding decrease in their re¬
quirements for funds.
Require¬

penses

the

was

volume

likely

are

funds

support

—

borrowing

Corporations—On

stocks

mu¬

to

(

■

industry and- those engaged in
mortgage financing have a com¬

gages

hand,

mil¬

the

our. housing is
manyJ important re-

mon

high construction

Business

stance, net sales of shares in

durable

business

budgets.

tual

of

if

20%) in

recently initiated

pose

demands

borrowings, and

public

continued

completed, and

important
seem

to

seem

The

exceed

or

1953

that

demonstrated

stantial

Nor

over

discussion and the voters have

no

funds for

certainly not in 1954.

in

Borrowing

generally recognized

lower

levels

children; is
fo; ex¬

pressure

to

investors,

many

of rate

for

otherwise. This

or

especially true in the period
rising interest rates in the

spring of
the

recent

1953.

interest

months,

guaranteed

With
rate

the

discounts

the
was

change

situation

mortgages

minished. This

have

reflected

in

for

di¬

some

days ago when the FNMA raised
the

price

on

the

offering for sale.
guess

••

government,-"the/ building

proposal

prob¬

levels

local

somewhat

for

and

time to come, and

such

possible

adversely
affect
the
ability of
savings institutions to compete for
some

even

significantly

even

likely to equal

is

these

concessions

for

activity continues at high levels.

year

liability of individuals by 5%

compared

correction

The

of

investment

total

be

1954,

tax

dividend

for

record

year's volume.

of

funds

borrowers

at

thereafter). In addition, the pro¬
posal would in essence reduce the

and balance the

budget continues.
impression that the

obsolete yiri /

are

compete

although the increase
was
relatively modest.

1952

tax

these

were

1953,

Means

demands

by

ably

amount of dividends from taxable

amounts

expenditures

today

compete for investment outlets.

to those in

accrue

dividend

on

decline in passenger car
sales close to 15% and a reduc¬
tion in housing starts of about
10%
from 1953, while the
pressure to
reduce government
a

much

as

addition,, much of

Funds

the various classes of investors

as

in¬

modernization

foresee

arid vfoUt;

permissible

investment

ments

lower

banks

borrowers

plan

for

building

existing/accomodations. /In

first

These

tors,

is

three

pand

1954.

investments

new

campaign to encourage the pur¬
chase of equities on the instalment

outlook

residentiai

creating growing

investment

Investment

savings

level of government
expenditures.
In each of these important sec¬

the

mortgage, financing'ismot related
exclusively to new home building.
Competent; authorities have esti¬

with

Taking

ury.

of which

reduction

to

nificance. In

seems

was

backlog

:v;• \

,.

spects.;';;%^/l^:
Demand

hand, the proposal

House

was

economy

large

1949

for

•*---

continuing high birth /"rate ?: and
the increasing number of families

pension

be well maintained in

funds

burdens

real

Comparison

a

with

that the flow of

appears

available

v*•'1; r

for. / residential

*

as $3 may be
spenF, oh alterations,':
additions and modernization. The

-

one-half of the income

upper

On the other

there will be lit¬

come

billion

some

appears

net

individuals

predict.
however, I in¬

present,

it

the

activity may
trend during
Admittedly,

hard

are

$2V4

into

go

Committee

upward

policy
the

For

to

been achieved

the next few months.

tory

likely

the

believe

who

economic

its

resume

will

brackets.

of. the inventory

dation has already
and

funds, it

•; ■\

-

expect

the

„

-

reduction,

come

is

" on

plant and equipment.

also

- starts. / Also,
existing
home
is -growing
year
by

.»on

.

1953,

year,

housing

mated that for every $4 spent on

increase coming close to

account

funds

in

f

expenditures

building,, construction

total

billion

the

at

of

as

to

reason

year.

building,

-

-readily

been

good

home

- desire f to.
i m prove
annually, ef-' moving
the
largely into real estate
methods and ; techniques for fi¬
beginning of this
mortgages, appraising the demand
year.; Part of this tax relief, per- /
nancing expenditures on existing
forrinvestment funds in 1954. re¬
haps: as much as' $700 to $800 mil- r
"housing;/ The ; President,' in ; his
quires giving some attention to
lion;.' will be' absorbed by 'higher - business
housing message, made two sug¬
corporations, state and
social security taxes/But this will "
gestions along "these lines.' The
local governments and the Treas¬

by about $3

fective

cidentally,

There

savings

-

may

in

the record amount of 1953.

Savings

institutional

for

bulk

ness

and

is

peak

large growth again this

in

to

annual

the

there

that

its

on

outlook

•

The

:

new

reached

of

mortgages

going into equities,
balance
being placed

have

debt

.moderate reduction in the

a

year;

Outlook—On balance, therefore,
the annual accumulation of

1954,

of

case

number

ex¬

by savings institutions

outstanding

amortization

are

funds

estimated

be another record

may

the

is for

while

record

assume

modest

a

will

the

sav¬

to

materially

crease

short-

ably high levels. And it js wprth, sion.
In appraising the outlook
noting that this "superboom" ner- for investment
outlets/flow of in¬
fleeted a unique combination of
vestment funds and interest
rates,




safe

seems

such key factors in the

not

aices of aggregate production and

mutual

funds

with

1948,

favorable in

fects upon

prospects for

consumption

in

year.

as

duction of inventories has not yet
had any measurably adverse ef¬

the

perceive that most in-

it

business

bankers,

Furthermore,

has

would

of

bank credit has

and

habit of

we

than

growth" in

not be

more

this reflects, the-initiative of. bor¬

making
comparisons
with
the
"superboom"
that
reached
its
peak in the early months of 1953,

our

1949

preceding

but

.eased,} .but

inventory positions are difficult
these •to appraise and changes in inven¬

far,

—

of

use

has

now

the

may

no

credit

than

below

more

The

however, the general expectation

increase

$1 billion

as

or

is

may

displaying continuing vigor, and

In

.

low

as

worse

new

1954, a favorable factor is the re¬
process of reducing
has
been > orderly;, duction in individual income taxes,

Business

.

bank

term

economy

1954.

Most forecasts
envisage 1954 as
a'year of high economic activity,
but

structure.

the

but it

year

10%

four

past

increase

billion growth

1953.

1954

if business turns sub¬

year even

stantially

upon

most

signs of forced
depressing 1 the price

liquidation

is

$1.4

largely in corporate bonds.

look

there have been

whether

the

about as much as it did last
year.
Commercial building, for
example,

consider¬

larger in

—

the

is

of

large

multi-family
and
commercial
properties will probably increase

pected. About one-quarter of the

been

-.So-far, this

to

doubtful

a

ings bank deposits alone, was al¬
40<& Targer in 1949 than in

inventory

with

inventories

still

are

is

would become

effects

approaching
there

and

era! months.

The Economic Outlook

Since

slack¬

enough, the 1949
adjustment had no dis¬

trying to reduce its in¬
Income
ventory position for the past sev-. Patterns

policies.

plans

$9.3

mortgages;

plans
billion.

in this growth rate during
with
the
additions
to
the

While

Out¬

—

slowing down is
likely to be concentrated in home

further in¬

some

each

perhaps

the
for

flexibility in the rate of
funding past service liabilities, it

midyear.

adverse

trusteed

be

in

prospect this

be

able

flow of funds into savings institu¬
consequence, business tions.
/ '

a

into

15%

'A *

V

1954

veloped in the second half of the

com¬

management

have

to

seems

recognized

a

the
flow of funds into savings institu¬
tions; their combined growth was

modest weakness in sales that de¬

funds.

by

flow

crease

ac¬

business

the closing

1953.Fortunately,
no
significant

speculation,

now

the

by

$1.8 billion in 1953, the

is

cor¬

continue.

Mortgages

Another

years.

Trust

in

amounting to about $1V4

sav¬

increased

cernible

the

the first half

been

high grade bonds

on

deposits

ened after

be

its
attendant
again near their levels at
danger of a sharp drop in prices
the beginning of 1953.
" ""
and business activity.
Neverthe¬
In
analyzing investment pros- less, business inventories in .1953
pects for 1954, let us therefore reached record
levels, and • new
first appraise briefly the outlook
orders became vulnerable to the
are

.

factors

years;

stantial proportions in
1952 and

bank

billion

Murray,

Bankers

to

standing real estate mortgage debt
has increased by some $9 to $10

pension

F.

Estate

For

year.

dustrial pension plans during 1953
probably exceeded $2 billion, with

billion.

Although mutual

porations is likely

on
the subject. In his
judgment, the net addition to in¬

Interestingly

rising for several

months of

mutual

of

who

trusteed

about

inventories have

business

Company,
authority

billion.

cumulation

the

to

appears

$10

ings

rate of accumulation reached sub¬

embarked

policy.

it

a

Roger

President

There should

again today.

Total

market

that

recession;

in

true

was

in

as

Vice

ing of business in the second half

policy of inventory accu¬
mulation to a policy of inventory

cer¬

increase

1953

financing by manufacturing

at

indebted to my friend

am

associate,

of the year.

business

of

for

not

Real
per

industrial

on

However, some
tapering off in the growth rate
may have developed with the eas¬

a

the case

sentiment

most

adjustments
to have been initiated by

ceiling.
business

up¬

economy.

liquidation.- This

,the

an

the

that

and

associations, and admitted assets of

Correction—Many of

tificates in July and by the failure
of
Congress to raise the debt

Also, later in the

to

plans I

life insurance companies exceeded
the previous year's record of al¬

economic

past

appear
a

for machine

contributed

Inventory
our

whole,

in production in important

surge

institutions

savings

savings bank deposits, repurchasable capital of savings and loan

of

use

major
been

is estimated

It

construction, all

on new

which

of

the

on

orders

on

tools, and

sectors

an an¬

Treasury long-term bonds

restrictions

of

tion

reduc¬

a

requirements.

reserve

including the re¬
bound from the steel strike, the
replenishment of inventories of
durable goods, and the elimina¬

tions will be well maintained but
the downward trend in
long-term

com¬

are

estimated

rate

a

million

estimates

accumulating funds at
phenomenal rates in recent years.

circumstances,

at

$900

some

Supply of Investment Funds
The

data

of state and local governments are

earliest.

And Interest Rates

unfortunately,
official

available. Pension and other funds

the

at

which,

prehensive

likely until

Thursday, February 18, 1954

...

that

more

mortgages
It.

seems

a

it

is

fair

investors will be

H

Volume 179

Number 5300

The Commercial and Financial Chronicle

...

(809)

funded six issues in five separate

ready to increase their guaranteed
mortgage portfolios in 1954^ and
that

the

FNMA

will

make

operations.

change

some

Treasury

Borrowing in

1954

past

they

years,

of

the

require

investment

market.

There is ample .room for differ¬
of opinion

ence

of

financing

undertake

action

in

months

will
Congressional

Treasury

1954.

is

taxes

on

to the amount

as

the

still

several

estimates

away,

ceipts and expenditures

of

of

today,

however, the

pros¬

pect is that the volume.of Treas¬

financing will be
no
larger this year than, in 1953.
This comprises financing to cover
current operations,^redemption of
ury

new

money

maturing savings issuesy attrition
maturing marketable- issues,

simplifies

of the

and
a > modest increase in
Treasury cash* balance; Thus

will-

Treasury

the

larger volume of savingsjthis

:i

financing
may

be

state

,i

.

,

do

local

-as*

new

1954

follows:

will

governments

much

financing as in 1953,
conceivably slightly more; the
as

or

new

requirements

money

Treasury

should

than

last

real

estate

be

the

of

greater

no

the ' increase

year;

ex¬

pected to be below 1953 and
corporate
are

also

This

and

stock

in

debt is

mortgage

new

issues

bond

likely to be lower.

accumulating with savings insti¬
tutions will be almost as large as
1953,

forces

terest

operating

be

may

direction

in

the

lower

somewhat

of

in¬

rates, on the average, than

last

prevailed

'

yields

and

have

fallen

sharply

interest

rates

recent

in

anticipating
the r investment

the

thus

months,

change ; in

Unless

vironment.

business

deteriorate

ditions

are

comparison with
the past few

of

prospect

more

en¬
con¬

than

is

therefore; further de¬
likely to be modest in

expected,
clines

However,

year.

bond

in

economic

that

suggests

those evidenced

months. Also, the

Treasury
restraining
bond prices.
long-term

financing will have
effect upon

nancing

a

main objective

need

preoccupation

with

of

the

of

that

it

all

the

Long-Term
recent

the

more

individual

of the Treas¬

Bond

exchange

suggests

that

deavors

to

fi¬

of

rather
bond

of called
the

and

the

the

than

en¬

will

be

aggressive.
to

holders

maturing issues has
short

life

refinancing

signed not to reduce

flow

and

corporate

the

bond

for

went

is

cash

debt

this

at

later date." Had

a

time

offering

an

long-term

a

bond, priced at the market,
offered
effort

but

to say that "consideration

on

being given to such

at

limit

long-term

a

part

as

just

probably

of

the

curity.

in

Only

3%
in

were

savings

banks

companies;
mainder

long-term

a

of

expiring

portfolios
life

and

almost

,

the

the

se¬

all

represented

of

insurance

of

the

holdings

Reserve,

and

of

ments

short-term

extent

debt

the fate of the

upon

state

of

the

Present

upon

the

economy.

the

ap¬

In

Refunding—

Treasury

Advance

to

January," 1954, 'the. Treasury

brought an innovation to its debt
management policies by embark¬

of advance
the re¬
funding operation gave holders of
certificates due in February and
ing

notes

program

a

upon

refunding.

As

expected,

due in March

two securities

the option of

in exchange, namely

1-year certificate and a 7%-year
bond.
In
addition, however,

a

holders
in

June

of

a

and

bond issue maturing

of

two

bond

issues

subject to call in June were also
offered
the new bonds in
ex¬

are that ac¬
ceiling will be
delayed until the closing days of
the
Congressional session, espe¬
cially since the Treasury can op¬

tion

prospects

the

on

debt

erate

under the
present, ceiling
through the first half of the year.
However, the redemption of $5.9

billion

of

icates
for

tax

in

will

make

Thus

considerations

play

the

will

decisive

role

pressing for too. large an offering
soon, since unduly energetic

and

building, construc¬

business plant programs.

dismay

at- the

fre¬

year-end

squeeze

market.

(2)

of

ing

sell

to

bank

as

many

adequate flow of funds into

an

investment, the prospect
offering of long-term
Treasury bonds later in 1954 ap¬
cash

a

pears

look

reasonably good. This out¬
temper enthusiasm in

may

the bond market in

It
the
as

may

1954.

mortgage

indicator

of

market

prospective

Treasury debt management policy
Until guaranteed mortgages find
a

ready market and discounts dis¬

appear,

the Treasury will doubt¬

in

was

in

require¬

July, 1953,
large vol¬
financing and

the

of

(3)

Finally,

just a
discount rate

the

ago,

1%%, thus

effect before

the

reduction upon the money market

difficult to appraise but are
likely to be of major import¬
So

ance.

bank

far

this

about

$120

have

million

have

reserves

million.

member

year,

borrowings

averaged

while

excess

averaged

A

above

reduction

discount rate has

been

in

topic of

a

conversation in the financial

munity

since the

ever

the

middle

of

last year.

Hence, the action came
surprise.
Naturally,
however, the step has been fol¬
lowed by a firming in the market
as

real

no

for

securities

government

corresponding
The

declines

Treasury
months

some

bill

of

has

rate

averaged

and

yields.
for

well

be¬

low the discount rate and the
cent action
to

be explained

can

bring

re¬

of investment

a

a

stated

future

of

Federal

Re¬

policy.

This point of view
receives some support from Chair¬
man
Martin, who said in his an¬
serve

to

swer

Question

tached
rates

of

the

Pat-

questionnaire

ago:

years

to

changes

community

policy

discount

as

of

discount

unlikely

economic

Federal
rates

Re¬

would

System

of¬

existing

an

general business and

conditions

to

be

more

temporary deviation from

a

basic

unless

considered

movement in

than

tendencies.

in

change

Bank

ficials

System

the
underlying
expansive
or
con¬

credit

a

serve

indicating

and

strength
tractive

be

in

by the financial and business

trends, the market tends to

as

an

to

the

over-all

Also,
will

'
-

i

in

the

discount

the

1953,

was

of

credit

financial

remember

months

<

cannot

to

improve

stop waste.

do

both

this

accept

at

r

•

**

,

the

defeatist
»

at and criticize
every

'[•/

defenses and at the

our

Such attacks I have learned

that
rate

in

to make

us

6

*

;

i l.

|

greater
than

market

of

current

by the System, and

ing

greater

reflect¬

as

about

concern

eco¬

nomic prospects than has been in¬
dicated
in
recent

public

state¬

ments.

i

A balanced and
considered ap¬
praisal of the real significance of
recent

count

reduction

in

the

dis¬

rate will not be possible
opportunity has been af¬

until

forded

to

observe

the

course

of

Federal Reserve policy in the
ag¬
over the next few weeks.

gregate
The

in which all the instru¬

way

ments

of

over

than

credit

any

the

policy

period

a

used

are

of

time, rather
particular action, is

one

important criterion.
doubt

that

the

authorities

serve

sensitive

the

to

Federal
will

Re¬

remain

trends

of

busi¬

ness, employment and prices. Un¬
til signs of a turn in business ac¬

tivity

become evident,

nomic
are

forces

and

both

credit

eco¬

policy

likely to operate in the direc¬

tion

of

the

It

continued

easy

short-term

does

not

conditions

credit

markets.

necessarily follow,

however, that the change in the
discount
itiation

rate

of

represents

an

in

The

easy

but in

ket

had

was

when

in

was
the

mar¬

v

(1) The firming of bond yields
by

the

subsequent

bond

market

in

recovery

and

the

the

easing

of

credit.

(2) As of today, it does not ap¬
that we shall experience a

pear

repetition
market

of

the

shifts

great

psychology

appraisals that

and

were

in

market

so

strongly

in evidence last year.

(3)
cates

The outlook for

1954

indi¬

a

continuing high level of
accumulating with savings
institutions, but perhaps at levels
slightly below 1953.
funds

(4)

Demands
are

somewhat
in 1954.

for'

investment

expected

to

than

more

decline

new

savings

Only state and local

ernments

are

exceed

or

expected

their

1953

to

gov¬

equal

borrowings.

The growth in mortgage debt out¬

standing,
although
continuing
large, is likely to be somewhat
less than

in

since

years,

of the past foor
reduction in hous¬

any
a

ing starts and rising amortization
existing mortgage debt will

of

slow down

the increase.

New is¬

of corporate bonds and stocks

sues

are also likely to be
significantly
lower, while the Treasury's new
money requirements are likely to
be no larger than in 1953.

(5)

In consequence, underlying
pressures will probably

economic

appreciably.

operate

Thus the timing does not indicate
a
desire
to
drive
short-term

further

likely

tightened

lower.

even

For
rates

several

have

months, short-term

been

characteristic
than of

an

peak

of

at

of

not

an

Conditions

levels

too

which is still

far

below

unprecedented
of

more

depression

a

economy

operating

excessive

the

ing
has

the

to

be

been

strength
recent

the

direction

of

some

restrained,
anticipated

ins the

bond

since it
the
market in
by

months, and also because 6f

prospect of

long-term Treas¬
in 1954.

financing

ury

boom.
in

in

easing of bond yields dur¬
1954. However, this trend is.

(6) The recent reduction in the
discount

author¬

rate probably
does not
signal the adoption of an aggres¬
sive "cheap money" policy by the
Federal Reserve, but until there Is
evidence of an upturn in business

ities, looking forward to. the time

activity, both economic conditions

the

money

market

useful

purpose as a
business. They raise

problems
when
will

for

the

restrictive

a

ease

little

serve

stimulant to

longer range

credit
credit

policy
These

again

and credit

policy will tend to

sup¬

be appropriate.
considerations seem to support the
view that, the discount rate action

market.

is not

terioration in economic conditions

part of

all out effort to

an

depress interest rates.

port continued ease in the money
(7)

-

significant

A

be reflected

were

an

demonstrations

tility

of

interest
The

economy.
,

•

of

.

'

prices
extraordinary
the

rates

foregoing
'

•

downward

interest rates not

The fluctuations in bond
1953

course,

additional

in

''

vola¬

in

our

review
■

ii'."

reduced

,

further

would, of

Conclusions

increase

January,

pros¬

of sav¬

and money rates in the
early part
of 1953 has been
largely offset

excessively

week when the

a

in¬

"cheap

actic^n

January

market

money

the

aggressive

policy.

taken

community
the

the general field

ings and investment suggests th£

funds

Appraisal of Outlook—There is
little

and

following general conclusions:,,

the

operations

sued

the

conditions

pects in

underlying
signifi¬
day-to-day openrecently pur¬

ing

cance

lowering the dis¬

sense.

be interpreted by
community as hav¬

financial

situation."

followed by several
increasingly
tight
Thus, the' re-

conditions.

to

may

the

"Considerable importance is at¬

credit

!

■

"d

rates

35

Committee

its debt management program ac¬
.

we

refuse

na

.$•

as an

seems

rate

money"

cordingly

pol¬
icy, and the Treasury will adjust

time

action

count

not

high level

spending is

Administration

of

cent

barometer

expression of the views of
the reserve banking authorities as

mortgage field.

'

those who scoff

are

accept

This

Many mem¬
bers of the financial community,
however, have come to regard
changes in the discount rate as a

financing
operation
that
siphoning funds oht
of

self¬

so

vested in¬

a

occupational hazard."—Charles E.
Wilson, Secretary of Defense.

the discount rate

closely in line.

any

maintenance

We

make to

we

same

to

a

look upon a discount rate change

the real estate

move

.

in
as

undertake

of

J
iO

war.

com¬

be

to

to think he has

increase

January, 1953.

financing 'of Treasury bills, it re¬




a

money

less

reluctant

time,

There

;

,

grow¬

bringing it back to the rate that

objective

in

the

lowered from 2 to

Since

be worthwhile to watch

guaranteed
one

a

to

as

higher
military

"We must continue to be
strong
in both a
military and an economic
sense.
There are those who con¬

Wilson

same

May

seasonal increase in

loans.

days

was

without endanger¬

private
of

in

Treasury

man

can

last

foolish

so

sound road to

a

philosophy.

(1)
provided

Reserve

anticipation

ume

about two

desire
it

has

nally, in December, to forestall

with which it needs to go
the financial markets/ In 1953,
.addition.; fa the :'weekiy re¬

to

securities

as

tend

the third quarter of last
year to
provide for the expected seasonal
increase in bank loans, and fi¬

probably
as

C. E.

control.

were/

war

ing stringency of credit, again in

However, since the Treasury will
bonds

di¬

three major in¬

credit

production of

4

terest in

rates.

Reserve

and June in order to ease

more

The

its

of all
of

reserves

move

a

by this exchange offering.
The Treasury has repeatedly in¬
quency

Federal

use

Bank

of

tion

ish

re¬

the

,

the

living standards is built on
spending. None should be

a
relatively easy
policy involving the fairly

struments

determining

amount

would involve

dicated

the

in

money

in

"None should be

pursuing

modest

room

long-term bond issue.

a

in

anticipation certif¬

March

In all, $20.8 billion of
Treasury securities were affected
change.

easier

can

think that

-

operating

of

Alsoi,

$875

able for home

regarding

1954,,

been

rection

are

ceiling, but mainly

sources

reduced demands for credit

year,
have

not

indications

.

in

be

we

goods.

Easier Credit—Since about mid¬

invest¬

timing of a long-term bond
offering of cash will depend to

keep everybody em¬
by loosely spending a
tremendous percentage of our re¬

Looking
likely

will

i
*

ployed is

seem

experience

—The effects of the discount rate

The

some

1953.

not

of

action along these lines would re¬
duce the amount of funds avail¬

the Treasury is likely
follow in the period ahead.

does

this

peated

corporations.

business

way

and

Reduction of the Discount Rate

commercial banks and the Federal

only

the

prices

re¬

The refinanc¬
ing steps just concluded give some
proach

that

bond
in

rates

it

few

too

the public debt.

interest

ahead,

held

by investors who would not

the

com¬

accentuated

in

in

would
little

lengthen the maturity distribution
of

greatly

the expected

interested

lieve

policy, together
financing opera¬

it

elicited

year.

Also, the Treasury may be
expected to continue its efforts to

tions,

fluctuations

favorable response, since the bulk
of the issues to be refunded was
be

financial

the

ments were reduced in

the
timing and
long-term bond of¬
fering for cash. The Treasury is
not likely to force the market
by

will be to reduce the number
ef financing operations during the

of

exchange

concluded,

have

been

patience with the people who seem
blood-spilling and jobs are syn¬
Nor do I go along with those who be¬

onymous.

through open-market purchases of

announcement

that

out

course,

during this period
completely isolated

Treasury

been

bonds.

precluded the sale of

Of

that

to

forces

government

financing

funds.

no

think

forces

operating in the
market, including the ex¬

credit

of

"I have

Federal Reserve
with

de¬

was

market

"Saving Common sense"

op¬

munity regarding business activ¬
ity and credit and debt manage¬
ment policies.

7%

of

the

the

pectations

maturity

debt

offered

relatively

years;

also

Treasury's

the

cautious

The

—

operation

the

The

new

Issue

extend

distribution

doubtless

ury

prices

have not been

Treasury.

nancing operations be successful.

economic

Treasury Debt Management
A

the

makes

necessary

issues

outlook, together with the

prospect that the amount of funds

in

larger

financing

However, the concentration of fi¬

pointed
•

,

outlook' for

summarized

Reserve

problems

The

year

;

requirements * in

and

constant

a

*

Outlook—The

Federal

gages

the

not>preempt

than in 1953. ;

the

the

the

Treasury and relieves

investment funds held by savings
institutions into real estate mort¬

on

bond

the

supply of and demand

investment

money

issues
task

into fewer and

re¬

ceiling has yet to be determined.

for

reflect

basic

of
the

as

from

are neces¬

sarily subject to many unpredictables, and the fate of the, debt
As

ap¬

refinancing through

for

the

well be

very

of the debt

cannot

largest borrower in

such

may

have been free to

the end of the year. Consolidation

avoid having an interest in the
prospective
financing
require¬
ments

concluded

Credit Policy

For almost two years now, longterm
government
bond
prices
eration

that

obligations for the

several

ex¬

plied to the five remaining matur¬
ing issues, totalling $29.2 billion,

the aggregate have been sellers of

States

just

one

technique

—

Although mutual savings banks in
United

operation

the

already covered five separate
issues, and the advance refunding

ings.
.

1954,

has

in disposing of its hold¬

progress

In

41

pressure

de¬

iii
on

only because of
for

demands

investment

funds but also because of the im¬

plications
for

credit

policies.
s

,

of

such

and

debt

developments
management

! " i
t

'

; '
H

i

•

11
i

42

The Commercial and Financial Chronicle

(810)

Continued jrom page

index

The

5

The State of Trade and

Industry

meanwhile, worked only three days, while Packard was
down all week.
Studebaker will be down this week, it stated.
The rash of short work weeks and inventory adjustments

represents the

foods in

of 31

February production down to an

will drop

estimated 430,000 pas^

almost 10% under the 479,000 scheduled at the be¬
ginning of the month, this trade authority pointed out.
cars,

senger

Estimated at 74.3% of Capacity This Week

Steel Output

buyers' dollar is bringing bigger returns these days,

The steel

"Steel," the weekly magazine of metalworking.
base prices of steel are remaining intact, but more
and more price extras are being reduced or waived, freight ab¬
sorption by mills is increasing, premium base prices are con¬
tinuing to fade, and steel jobbers are making price concessions
and offering free services to attract customers, it states.
Alert to the importance of making quick deliveries today,
mills are building up certain stocks of finished steel so they can
make immediate shipments and not miss out on any orders. Until
says

Standard

recently, mills had no opportunity to build stocks; they were
getting orders faster than they could roll material, continues
declining price of

Trend of Week Before

a

for the week.

last

than

50%

Since

summer.

$12

scrap

then, its cost of purchased scrap

The producer is beginning to use more
in its open-hearth charges. Half of the scrap is
a

Oats advanced

sales

volume

was

own

last summer,

this trade magazine points out.

American

The

Iron

Steel

and

Institute

the

that

announced

'

sales totaled 41,000,000 bushels, against 43,200,000 the pre¬

Some

green

resistance

buyer

maintained

coffee

a

firm

undertone.

although some buyers showed caution
investigations now going on.
at the

consumer

level

was

the

as

for

Demand

slightly

raw

sugar

a

fairly active and prices

of

were

"free" world

up

sup¬

Wholesale fresh pork prices were also easier.

ago.

year

Spot cotton prices registered further moderate

operating rate of steel companies having 96.1% of the steelmaking

pay

burse

the

the

and

be

any,

used

to.

reim¬

to

or

company's treasury for

construction expenditures.
_

The

will

bonds

redeemable

be

at

general redemption prices rang¬
ing from 103.96% to par, and at
special redemption prices ranging
from 100.96% to par, plus accrued
interest

plies.
Lard finished on a firm note with prospects of further
export shipments having a bolstering effect on the market.
Hog
prices were irregular and closed slightly lower for the week. De¬
mand was quieter and receipts at western n^pkets continued well
below

will
for construction
if

company's

program,

each

in

case.

Essex County Electric Co. is en¬

principally in generating,
purchasing, and selling electricity.
Electric
service
is
provided
in
gaged

was

Cuba again reduced its quota

as

balance,

reported

for the third straight week.

the financing

in connection with the
construction

vious week and 43,300,000 in the same week a year ago.

on a

,

short-term indebtedness, incurred

along with corn; demand was fairly good but
small.
Rye prices were somewhat easier, re¬

for

100.52%.

will be applied to the payment of

>

flecting limited demand.
Activity in grain and soybean futures
the Chicago Board of Trade declined slightly last week.
Daily

market

314%,
3.20%.

competitive sale yesterday

bid of

improvement

some

on

average

A

yield

Net proceeds from

increased export business and

in domestic flour trade.

ton.

mill; the rest is purchased. Thus, around one-fourth
of the metallic charge of each ton of steel is purchased scrap,
and that fourth of a ton of scrap costs $3 less than it did late

from its

at

X-

_

for

series
to

The group won award of the issue

Support in wheat was attributed to increased concern over
the lack of moisture for the Winter wheat crop in the Southwest,
prospects

bonds,

1, 1984, at 100.959% and
interest

accrued

Trading in leading grain markets was moderately active.
Prices fluctuated unevenly but most grains scored modest net gains

(waiving or reduction of extra and absorption of
freight on shipments of steel to users.
A Pittsburgh steel pro¬
ducer pointed out that on open-hearth steel it is saving $3 a ton
late

mortgage
due Feb.

"

year ago.

result of the Senate

over

fering today (Feb. 18) $5,000,000
Essex
County Electric Co. first

daily

Demand was active

has dropped

Halsey, Stuart & Co. Inc. is of¬

'

wholesale commodity price index, compiled by
Dun & Bradstreet, Inc., trended slightly higher during the past
week.
The index closed at 276.45 on Fern 9.
This compared with
275.03 a week earlier and with 2T6T.55 oh the corresponding date
The

is helping mills make such price

scrap

as

Index Reverses Lower

Wholesale Commodity Price

The

The

Halsey, Stuart Offers
Public Utility Bonds

general trend of food prices at the wholesale level.

"Steel."

concessions

total of the price per pound

sum

general use, and its chief function is to show the

Hudson,

Thursday, February 18, 1954

...

gains the past

eight

cities and

eastern

of

area

and

106

about

aggregate

an

around

108,000.

industrial

an

in

towns

Massachusetts

dential

week to reach the

and

demand.

ended

placed in the government loan in the week ended Jan.
29 totaled 170,200 bales. This was in line with trade expectations

had

the smallest weekly volume since midSeptember.
Reported sales in the ten spot markets declined to
137,900 bales last week, as against 141,900 the previous week, and
153,100 in the corresponding week a year ago. The volume of
trading in some spot markets was limited due to a lack of offer¬
ings of those qualities in best demand.

an

miles
population of
square

Territory served,
a
highly resi¬

and

north

area

of 74.3% of
capacity for the week beginning Feb. 15, 1954, equivalent to 1,772,000 tons of ingots and steel for castings, as against 1,774,000 tons

north¬

having

of

Boston

$589,807.

capacity for the entire industry will be at

an

average

74.4% (actual) a week ago.
The industry's ingot production rate for weeks in 1954, is now

based

annual capacity of 124,330,410 tons as of Jan. 1, 1954.

on

the like week a month

For

duction 1,766,000 tons.

A

the rate was 74.1% and pro¬

ago

year

ago

the actual weekly production

placed at 2,235,000 tons and the operating rate was 99.1% of

was

The percentage figures for last year are based on an¬
capacity of 117,547,470 tons as of Jan. 1, 1953.

capacity.
nual

Electric Output Registers

Mild Increase the Past Week

power

was

estimated at 8,684,000,000

industry for the week ended Saturday, Feb. 13, 1954,
kwh., according to the Edison Elec¬

The current

figure represents

an

increase of 10,000,000 above

week, and an increase of 537,000,000 kwh., or
the comparable 1953 week and 1,244,000,000 k'wh. over

preceding

6.6%

over

the like week in 1952.

Car

Cotton

although it

represented

Trade Volume Rises in Latest Week

cars,

or

0.6% below the preceding week, accord¬

ing to the Association of American Railroads.
Loadings totaled 624,385 cars, a decrease of 66,228 cars, or
9.6% below the corresponding 1953 week, and a decrease of 109,534 cars or 14.9% below the corresponding 1952 week.

U. S. Auto Output
the

volume

the

for

according to "Ward's Automotive Reports."
industry, "Ward's" states, turned out an estimated 107,578 cars last week, compared with 108,382 (revised) in the pre¬
A year ago the weekly production was 114,935.
vious week.
Last week, the agency reported,
there were 21,346 trucks
made in this country, as against 19,846 in the previous week and
ago,

year

dollar

volume

retail

of

sales

rose

in

the

period

Wednesday of last week above that of the preceding
The number of merchants reporting sales decreases from a
on

week.

unchanged from the level of recent weeks as sales
close- to the 1953 mark.
Valentine promotions were

ago

was

remained

favorably received in most parts of the nation and sales
items were generally above a year ago.

of these

trade, in the week, was esti¬

The total dollar volume of retail

& Bradstreet, Inc., to be from 1% to below 3%
above the corresponding level of a year ago.
Regional estimates
varied from the comparable 1953 period by the following percent¬
mated

by Dun

New England +2 to +6; East and Northwest +1 to +5;
South —2 to -f-2; Midwest and Pacific Coast —3 to +1 and South¬
ages:

& Oil Stock Offered
Santa

Corp.

chandise

22,490 in the like 1953 week.
"Ward's" estimated Canadian plants turned out 9,356 cars and

demand

1953 weeks.

was

bought in greater quantities than in other sections
Demand for coats and suits increased. In greatest
casual clothing of blended and synthetic fabrics.

volume

Food

almost

was

unchanged

from

a

year

and

ago

slightly below the preceding week.
Beef

was

bought in greater quantities than at this time a year

while lamb and pork receipts again slipped. Purchases of
fresh fruits and vegetables were slightly below the early 1953
mark although sales of 'frozen goods were higher than at the
ago,

same

2,245 trucks last week, against 9,019 cars and 2,027 trucks in the

preceding week and 7,846 cars and 1,832 trucks in the compar¬

was

time last year.

resistance

Price

from

a

coffee

to

week ago, although

dipped

and

sales

rose

moderately

preceding week, Dun & Bradstreet,

Inc., states. At the highest level since May, 1941, casualties
considerably heavier than a year ago when 200 occurred

in

1952 when there were 125.
Despite this marked upturn, mortal¬
ity remained 13% below the 1939 toll of 318 for the similar week
of that year.
More

failed

concerns

last

than

year

in

all

lines,

with

the

Six

geographic regions reported higher mortality during the
including the Middle Atlantic States where the failures

week,
to

94

jumped to
to

from

70, the West North

Central

States

where

they

17 from 6, and the Pacific States with a slight rise
The only declines appeared in the New England,

76 from 72.

Atlantic

South
ceeded

last

East

and

South

year's level in all

Central
areas

regions.

Casualties

except New England.

ex¬

Central, South Atlantic, South Central and
Mountain States had notable increases from 1953, while Middle
Atlantic and Pacific mortality turned up moderately.

Higher Trend
Dun

&

the

in

New

$7.16.

Compared

with $6.19

the current figure shows




on

a

the

corresponding

rise of 14.5%.

continued to exercise caution and sought price

con¬

famous

proceeds, if
for

placed in smaller quantities than in the previous
a conservative nature and were less
inclined to place orders for goods of extreme styling.
Department stores sales on a country-wide basis as taken
were

Bradstreet

date

index, for the week ended Feb.
6, 1954, decreased 1% below the level of the preceding week. In
the previous week, Jan. 30, 1954, a decrease of 2% (revised) was
from

that

of

the

similar

week

in

1953.

For

the

four

weeks ended Feb. 6,
year

1953,

1954, a decline of 3% was reported. For the
department store sales registered an increase of 2%

abqve the corresponding period of 1952.
Retail

trade volume

in

a

year

per

a

portion of the

San

Juan

any,

in

basin

The balance of

the

be applied

will

pur¬

|

poses.

Fe

Corp.
ware

Gas

Western

incorporated

was

Jan. 20, 1954, for

on

&

Oil

in Dela¬
the pur¬

Arriba

interests
in
properties in
County, New Mexico;

interests in

properties in Sandoval

of

pose

Rio

acquiring

natural

proven

gas

County,
New
Mexico,
and
in
Rooks County, Kansas, and to en¬

generally in the acquisition,
and development of

gage

exploration
oil and gas

properties.

'

Baumann Munic. Mgr.
For Milwaukee Go.
MILWAUKEE, Wis.—Joseph T.
Johnson of The

Milwaukee Com¬

investment banking concern

whose

principal office is in Mil¬

waukee, with branches in Chicago,

Buyers sought goods of

reported

Oil

&

$1

at

general working capital

St.

Orders

year.

to use

Mexico.

pany,

increasing number.

New York

Paul,

Madison

and

Wausau,

announced that John F. Baumann

has

been

appointed

Manager

of

the

company's municipal depart¬
ment, with headquarters in the
Milwaukee office, 207 East Michi¬
gan Street.

He will take

work of the late S. E.

who

over

the

Johanigman

managed the municipal de¬
at the company's Chi¬

partment

office.

cago

After

last week

rose

as

a

result

graduating from Carleton
College, Northfield, Minn., in 1934,
Baumann spent a year with

of heavy promotional efforts, it was
reported, with sales approxi¬

Mr.

mating the volume of the like week of 1953.

the Federal Reserve Bank in Chi¬

1954, registered

wholesale food price index rose 8 cents last week to stand at $7.09
on Feb. 9, the highest level since May 29, 1951, when it stood at
ago,

in

store sales in New York

;

the

below

was

According to the Federal Reserve Board's index department

Wholesale Food Price Index Reacts to Sharply
irregular movement,

cessions

The

East and West North

Continuing its

week

from the Federal Reserve Board's

sharpest relative increase from 1953 in manufacturing.

rose

last

Buyers

were
or

of

day

slightly from the preceding week.

stock

proceeds for the repayment of
certain promissory notes, and for
the development of its properties

The volume of wholesale sales,

Commercial and industrial failures climbed to 277 in the week
ended Feb. 11 from 238 in the

Gas

Western

It is the present intention of the

,

company

they continued to be somewhat below

in the period ended on Wednes¬
the year ago level and dipped

offer¬

are

share.

the previous year.

Business Failures Continue to Advance

Fe

common

Santa

of the country.

Otis, Inc.

speculation 299,925 shares

as a

of

west —4 to 0.

The

able

1953, the company
operating revenues of
and
net
income
of

Canftp Fa W&cfam |«AC
WCIIIIC
VTCOIwlll Utt)

Purchases were

latest week continued downward
week 6% behind that of a year

latest

North

Oct. 31,

gross

$6,717,807

ing

Apparel volume continued to be above the year-ago period.
particularly high in New England as Spring mer¬

Holds to Lower Trend

Automobile output for the
with

total

The

ended

Loadings Decline Below Previous Week and Year Ago
Loadings of revenue freight for the week ended Feb. 6, 1954,

decreased 3,805

the

as

Gearhart &

tric Institute.

the

known

Shore, in¬
Helping to sustain values were fairly active domestic and
cludes Salem, Beverly, Gloucester
foreign mill price-fixing and reports of improvement in export and
Rockport. For the 12 months

The amount of electric energy distributed by the electric light
and

highest levels in more than a year.

the

no

City for the weekly period ended Feb. 6,

change from the like period of last

preceding week, Jan. 30, 1954,

from that of the similar week of
ended Feb.

1953,

a

6, 1954,

a

decrease of 1%

an

was

In

reported

1953, while for the four weeks

decrease of 1%
was

increase of 3%

year.

was

reported.

For the

year

registered from that ef the 1952 period.

For the last 19 years, he
associated with Halsey, Stuart

cago.
was

&

Company Inc., except for three

years

he served in the Air Force

in World War II.
he

was

Upon his return

assigned to the Wisconsin

territory by Halsey, Stuart, mak¬

ing his headquarters in Madison.

Volume 179

Number 530(K

.

The Commercial and Financial Chronicle

.

*

*

<«11)

43
%

]

-The following statistical tabulations

.

^

._

x

a

Vi^latest week

Business

Activity

week

v:.-.

-

,

or

Previous

Month

Week

Week

Ago

'

on

production and other figures for the

cover
4

•*>

'

month available.

month ended

or

Latest

'

V

*'

^

that date,

in

or,

of quotations,

cases

Year

IRON

Indicated

steel

AND

STEEL

operations

INSTITUTE:

of capacity)

(percent

Feb. 21

*74.4

§74.3

,

99.1

ALUMINUM

•Equivalent- to—
Steel

42

PETROLEUM

oil

Crude

and

(net

tons)

Feb. 21

•

—

condensate

to

runs

output—daily

stills—daily

(bbls.

average

<bbls.):

output

Distillate

fuel

output
output

and

6.948,000

6,960,000

(bbls.)

Distillate

fuel

Residual

24,620,000

23,232,000

6

Feb.

6

24,344,000

6

2,738,000

2,682,000

2,872,000

2,684,000

Feb.

6

10,978,000

10,289,000

10,382,000

10,178,000

6

8,549,000

8,312,000

8,599,000

8,808,000

176,421,000

L—_

(bbls.)

ASSOCIATION
Revenue

OF

162,343,000

152,493,000

21,056,000

22,093,000

28,588,000

78,463,000

83,936,000

106,628,000

78,152,000

Feb.

6

45,885,000

46,433,000

49,668,000

45,807,000

—

at

U.

S.

Private

.

connections

of

>

cars)__Feb.

6

624,385

(no.

624,229

628,190

,

1

690,613

544,544

and

Mixed gas sales

$195,848,000

115,989,000

89,675,000

182,565,000

78,311,000

106,173,000

.

84,366,000

53,601,000

15,282,000

21,807,000

$194,300,000

132,020,000

Feb. 11

64,865,000

Feb. 11

48,227,000

•_—

—

■

♦

(U.

S.

STORE

ELECTRIC

Feb.

AVERAGE

*8,405,000

8,190,000

8,570,000

695,000

7,835,000

6

534,000

Unfilled

end

•

—

Total

U.

S.

Private

6

87

;

;

,*85

'

:.\v

88

94

Feb.13

kwh.)

000

(COMMERCIAL

DUN

INDUSTRIAL)

AND

8,684,000

8,674,000

9,014,000

8,147,000

277

238

200

Finished

steel

iper

Pig iron

(per

gross

Scrap steel

PRICES:

lb.)

__Feb.
Feb.
Feb.

:

ton)

___.

ton)__

(per gross

COAL

4.376c

9

4.634c

4.634c

4.634c

9

$56.59

$56.59

$56.59

(E.

M.

&

J.

9

$26.67

$27.33

$28.83

$42.00

.Feb.

29.650c

29.700c

29.350c

29.375c

28.675c

34.975c

85.000c

-

85.000c

84.750c

121.500c

Louis)
St.

13.000c

13.500c

12.800c

13.300c

PRICES

Feb. 10

S.

708,992

505,198

480,062

76,383

228,930

9.500c

9.50QC

10.000c

35,380,000

42,906,000

.■

BOND

YIELD

432,400

1,877,265

$28,252

$25,827

21,586

18,684

10,358

8,099

5,605

5,406

5,328

1,606

1,604

1,406

4,307

4,218

3,851

7,089

6,666

7,143

Single payment loans

2,127

2,100

2,094

Charge accounts

3,249

2,840

3,342

Service

1,713

1,726

1,707

stock

;

at

tons)

end

CREDIT

(net tons)

THE

FEDERAL

of

Dec.

RE¬

SERIES—Esti¬

intermediate

credit

term

31: 1

credit.

consumer

\

'

•"»

.

REVISED

and

as

month

of

OF

SYSTEM

millions

—_

OUSTANDING—BOARD

GOVERNORS

short

41 ■

tons)

(net

—i.

$28,896
21,807

•

Other

10,289

consumer

goods

108.70

106.92

108.16

114.27

111.81

111.81

111.07

110.88

109.06

110.52

108.70

108.34

106.56
100.65

103.47

Feb. 16

104.48

106.04

SERVE

107.44

107.62

Month

108.70

:

_j

credit

2.81

.

111.07

2.68

loans

107.44

102.13

I

:

and modernization

Noninstalment

16

106.92

1C6.74

Feb. 16

109.06

108.70

..Feb. 16

110.88

110.70

Feb. 16

2.61

'

-

STORE

SALES

(FEDERAL RE¬

SYSTEM—1947-49
of

Average

100)—

%

January:

Adjusted for seasonal variations
Without

——

credit

DEPARTMENT

AVERAGES:

DAILY

432,400

6,290,700

114.27

__—

Government Bonds__—

3,178,000

315,100

-

2,657,729

102.30

—T

2,315,000

260,000

2,727,020

coke

108.88

:__—__

—

Group

■2:397,000

Automobile

95.65

—

Group

36,480,000

*

tons)

(net

coke

Repair
97.45

tons)—

tons)—

MINES)—Month of Dec.:

Personal loans

.

Group

Utilities

OF

(net

(net

(net

tons)

Instalment credit

•

98.81

MINES)—Month

lignite

6,723,100

in

11.500c

98.42

OF

*313,708

.Feb.

U.

1,177,528

334,891

5,894,447

Feb. 16

MOODY'S

—

$1,886,520

929,340
581,581

♦6,208,155

.Feb. 16

Industrials

(net

coke

.Feb. 16

Public

;

$1,510,921

350,325

298,142

Total

DAILY AVERAGES:

—i.

and

coal

CONSUMER

13.300c

at-.

Aa

Railroad

of

6,093,009

Oven

13.500c

12.800c

,i_'

at

Louis)

BOND

13.000c

Feb.10

80,679

5,794,867

Oven

24.200c

29.700c
-

10

Feb. 16

Baa

39,732

415,995

(BUREAU

(BUREAU

mated

.Feb. 10

MOODY'S

35,466

EN¬

—

Month

—

___

.

.Feb. 10

(East

88,475

26,378

(tons)

81,104

coke

SERVE

r

Lead. (St.

period

December:

COKE

QUOTATIONS):

tin

81,994

*79,116
*63,896
*180,843

omitted):

$55.26

.Feb. 10

Zinc

78,561

$766,320

of

Pennsylvania anthracite

Electrolytic copper—
Export

end

municipal

OUTPUT

of

OF

PRICES

Straits

at

NEWS-RECORD

and

Beehive
COMPOSITE

99,500

223,100

60,612

construction

Production
Feb. 11

58,496

198,792

—,

pounds)
(tons)

construction

State

200

&

'

198,134

247,201

Public construction

„

Bituminous
Feb.

•

all grades (tons of

2,000

period

(000's

INSTITUTE:

BRADSTREET, INC._____

METAL

of

of

orders

January

652,000

651,000

RESERVE

100

=

6

—Feb.

INDEX—FEDERAL

SALES

(in

output

IRON AGE

5,273,000

-67,781

OF MINES):

BUREAU

SYSTEM—1047-49

FAILURES

5,595,600

4,386,971

5,299,683

(M therms)

(tons

at

Beehive

i

4,643,601

5,614,665
-

Federal

DEPARTMENT

Electric

14,241

(

_~_

CIVIL ENGINEERING CONSTRUCTION

Feb. 11

•

.__

74,639

21,790

January:''

31,622,000

$196,885,000

—___

:

.

108,219

30,052

I

Slab zinc smelter output,
2,000 pounds)

85,223,000

63,029,000

609,667

._Feb. 11

._

u

.

Bituminous coal and lignite (tons)
Pennsylvania anthracite (tons)

•

Ago

"

$267,788,000

611,995

ENGINEERING

—

U

__—

COAL OUTPUT

»

Year

Month

AMERICAN ZINC INSTITUTE, INC.—Month of

t

EDISON

Previous

105,636

end of Nov.

therms)—

(M

gas

GINEERING

municipal—

Federal

.•

November

gas sales (M therms)
Manufactured gas sales (M therms)

670,449

6

Feb. 11

CONSTRUCTION

construction

State

of

Natural
.

Stocks

of cars)—Feb.

construction——

construction

Public

of that date:

are as

December:

NEWS-RECORD:
Total

*

MINES):

tons)—Month

Shipments

RAILROADS:

(number

short

Total

22,308,000

6

:—Feb.

___

lreight received from

ENGINEERING

171,972,000

6

Feb,

at___

at

AMERICAN

freight loaded:

Revenue
CIVIL

oil

(bbls.)

1

»bbls.)
(bbls.)

6

———Feb.

gasoline

at_;

oil

fuel

®

6,834,000

23,731,000

Feb.
—Feb.

;___

(bbls.)

unfinished

Kerosene

(in

6,521,850

u._l

i

:

6,284,350

6,257,200

6,271,250
116,879,000

Stocks at refineries, bulk terminals, in transit, in pipe lines—

Finished

OF

AMERICAN GAS ASSOCIATION—Fof Month of
6

Feb."

<bbls.)__'I—

oil

2,235,000

—__

output

Kerosene

fuel

1,766,000

*1,774,000

of

(bbls.)—

average

Gasoline

Residual

(BUREAU

Stocks of aluminum (short tons)

Feb.

oil

§1,772,000

INSTITUTE:

gallons each)

Crude

'

Production of primary aluminum in the U. S.

ingots and castings

AMERICAN

v

either for the

Month

Ago

74.1

v*

-

are

Latest

'

AMERICAN'

-

*

Dates shown in first column

-

}

J

2.58

.

seasonal

*112

111

**192

85

110

adjustment-:

-

;

85
'

"

1
.

Average

corporate

Feb. 16

—

—

3.24

3.23

;

—

Group

Utilities

Public

Industrials
MOODY'S

—_____11-—2——

of

Unfilled

3.35

3.48

3.24

3.31

3.30

3.12

3.13

3.24

422,7

~-W^i42!.2

6

of period

.'

275,060

Feb.
—Feb.

-

6

''

Feb. 12
Feb.12

EXCHANGE

—

SPECIALISTS

AND

DEALERS

SECURITIES

107.05

1414,047

545,961

f

107.53

107.90

EXCHANGE

Number of shares

of

.■*—

other

Customers'

1,004,092

925,853

752,352

sales

Round-lot

$42,297,268

$29,001,891

$40,936,217

940,833

828,804

869,608

816,983

10,348

8,552

6,368

4,295

by

•Other

.

——Jan. 30

930,485

863,240

$39,698,255

$35,578,856

$27,244,610

Jan. 30

296,150

240,540

330,230

Jan. 30

—--Jan: 30

STOCK SALES
ROUND-LOT

ACCOUNT

MEMBERS

OF

*

330,230

240,540

:

sales

—

219~520

Transactions

of

201,400-

334,810

-'354,870

350,340

specialists in stocks in

■—J&n- ^

350,460

326,320

171,520

Other

transactions initiated on the

Total

purchases

7,624,580

6,419,510

7,242,340

6,591,030

7,499,630

9,523,230

7,950,900

614,700

836,380

179,710

147,840

87,620

135,230

816,220

678,130

458,860

648,940

995,930

825,970

546,480

784,170

Jan. 23

-—

305,350

232,930

156,400
2,500

purchases

207,500

131,870

217,700

134,370

Jan. 23

349,882

375,896

337,730

248,717

Jan. 23

38,030

49,020

26,040

457,065

326,276

215,811

NEW

SERIES

U.

—

100):

S.

DEPT.

All

AH^commodities
♦Revised
__

„f

jan

figure.
1

1954

other than farm and

as

foods.—^




31.970c

37.970c

—

1,340,627

34.500c

28.500c

29.500c

35.000c

$90,160
—-

28.500c

29.000c

$91,000

$90,000

$2.00000

$2.00000

$1.93269
$2.04135

$2.40000

99%

ingot

plus,

Magnesium ingot

pound)—

(per

(per pound)—

Nickel

20.173c

Bismuth

pound)—;

(per

PLANTS

IN

24.500c

60.000c

58.659c

$2.25

$2.25

""""

MANU¬

ASSN.—Month of December:

of

number

21.500c
27.000c

FROM

SALES

S.—AUTOMOBILE

U.

FACTURERS'

:__—-

FACTORY

VEHICLE

21.500c
27.000c

60.000c

Aluminum,

482,920

cars

—

452,487

535,427

387,844

378,406

418,983

94,652

vehicles

coaches

1,595,245

1,211,906

1,418,966

922,701

PORTLAND
Month

OF

73,710

of

9

110.5

110.6

110.9

109.4

9

98.2

*97.3

98.5

98.9

9

104.7

*105.2

106.1

104.5

9

91.1

93.1

§Based

on

tNine

reported since introduction of Monthly Investment Plan.

114.5

114.5

114.4

Feb. 9

95.41

new

days

annual

capacity

ending

Jan.

9.

of

124 ,330,410

95.3
112.7

tons

Stocks

Capacity

tin

of

-

•

116,214

424

371

231

22,529,000

20,881,000

20,243,000

14,130,000

(barrels)

month—barrels)—___—
i.

figure.

tBased

,

on

the

19,495,000

13,740,000

19,196,000

13,083,000

15,957,000

84%

97%

producers' quotation.

87%

tBased on the average of
to
for

and platers' quotations.
§Average of quotation on special shapes
liDomestic, five tons or more but less than carload lot, boxed.
§§Price

contained.
bid

where

1

.

_!

producers'

plater.
of

end

mills

used

♦Revised

the

December:

(barrels)

from

(at

—

(BUREAU OF MINES)—

CEMENT

Production

.

587,000 barrels of -foreign crude runs
against the Jan. 1, 1953 basis of 117.647.470 tons.

tNumber of orders not

31.970c

pounds)

120.500c

$2.60000

motor

Feb.

^Includes

$212,962

$2.60000

of

Feb.

Meats

$185,923

$2.15000

Number

1,829,485

—Feb

products
Processed foods

$35,000

$187,360

121.500c

1,131,757

806,541

Feb.

commodities.

$35,000

pound)

(per

Shipments

Farm

83.644c

$35,000

97%

/
.

83.830c

$2.07500

1,108,330

Jan. 23

Commodity Group—

£73.835

trucks

Jan. 23

=

SCadmium

208,870

£74.301

$2.15000

motor

116,160

£73.022

$2.07500

passenger

207,060

12.588c

$2.15000

of

1,445,206

10.000c

84.644c

pound)_

of

234,240

9.760c

24.500c

pound)

Number

1,616,582

Other

PRICES,

(per

(per

339,727

Jan. 23

LABOR— (1947-49

refined

JCadmium

1,164,237

Jan, 23

$2.81289

£71.666

ounce)

Number

purchases

WHOLESALE

TCadmium,

Total

73.518

$2.81074

:

'

241,851

375,296

495,095

round-lot transactions for account of members—•

Total

(per

279,087

Jan. 23

—

bulk, Laredo
Laredo

refined

MOTOR

73.821

$2.81163

York

Platinum,

60,640

Jan. 23

Total

73.750

:

flask of 76
Boxed

(per

New

pound)

216,730

£88.608

85.250c

84.830c

price)

S.

pound)

203,730

338,460

floor-

——:

,

321,960

Jan. 23

Total

£85.794

!

min..

99%

(per

**

Jan. 23

initiated off the

transactions

York,

Cobalt,

10,200

16,500

13.992c

£90.386

85.250c

—-

(per

13,000

<■

14.192C

13.300c

£86.453

Louis—
long ton)

St.

Straits

(per ounce, U.

Quicksilver

198,700

sales

Other

§§New

716,820

961,350

13.500c

pound)—

York

Antimony

Jan. 23

29.061c

13.260c
13.060c

prompt (per
three months (per long ton)—

Antimony

Jan. 23

—

(per

HAntimony

Jan. 23

Other

34.780c

28.767c

.

—

(Check)

pound)—East

(per

Gold

floor-

2

refinery

York

Exchange

London,

257,290

9,172,770

Jan. 23

-—

——

——

—

24.200c

121.7

Sterling Exchange—

London,

which registered—
-—

2

sales

Other

Zinc

New

Jan. 23

purchases

Short sales

29.673c

'

QUOTATIONS)—
1

domestic

New

TtZinc,

OF MEM¬
AND SPECIALISTS:

BERS, EXCEPT ODD-LOT DEALERS

J.

months, London, (per long ton)

and

Sterling

ACCOUNT

FOR

TRANSACTIONS

ROUND-LOT

——

M.

&

pound)—

TTZinc,

Jan. 23
—-———Jan. 23

2—1—.———

—

(E.

'

Tin

---—

—

—

115.4

of

Silver, New York (per ounce)
:
Silver, London (pence per ounce):.

(SHARES):

.—-

sales

Other

Total

Silver

•

Short sales

Total

-820,252

ON THE N. Y. STOCK
STOCK TRANSACTIONS

Round-lot sales—

Total

r/.w

purchases by dealers—

Number of shares:.—-

FOR

,

7* 296,150
1

EXCHANGE

115.0

—

middle

(per pound)
Common, St. Louis .(per pound)
HPrompt, London, (per long ton)
JtThree

—

AND

(per

Common,

219,520

.

•

Jan. 30

—-—

TOTAL ROUND-LOT

—

29.671c

at

7,981

Lead—

$32,267,391

sales

1,

Employment

4,456

29,950

■

COMMISSION

(1S35-39 average=100)

Electrolytic

812,688

Jan. 30

sales

Round-lot

Railway

Copper

dealers—

Short sales

of

COMMERCE

Electrolytic export refinery—
Jan. 30
Jan. 30

.

Number of shares—Total

4,944

27,959

(number

,

Index

936,826

$44,438,780

—

sales—:

__1

value

Dollar

sales-

short

48,351,140

Average for month of January:
Jan.30
Jan. 30

(customers' sales) t—
:

purchases by dealers

cars)—

of

1

METAL PRICES

-Jan.30
—Jan. 30

———.—.—•——

Number of shares—Total sales

Customers'

(number

cars)

December

COMMISSION:

.——

Dollar value

49,684,881

(AMER¬

December:

INTERSTATE

w

29,353,235
$527,426,200

9,795,031

30

at Nov.

Backlog of orders at end of month

94

106.95

-

r

customers

32,450,142
$572,315,600

ICAN RAILWAY CAR INSTITUTE)—Month

238,012

178

.

12,051,035
of

STOCK

Y.

N.

ultimate

Deliveries

(customers' purchases) t—

Odd-lot sales by dealers

Odd-lot

ON

of

customers—month

405.8

OIL, PAINT AND DRUG REPORTER PRICE INDEX—
AVERAGE =100

consumers—

omitted)

1,527,500
Number

STOCK TRANSACTIONS FOR ODD-LOT ACCOUNT OF ODDLOT

(000's

ultimate

331,971

1212,013

■'

*

».

November

418.7

330,839

377,082

of

from

1230.479

92

240,413

89

■

1949

Month

Revenue

FREIGHT CAR OUTPUT—DOMESTIC

232.351

228,571

Feb.-6

—

at end

6

Feb.
Feb

—

i

ultimate

3.11

-

of

——

INSTITUTE:

3.39

Feb.

—

.

(tons)

3.54

3.26

ASSOCIATION^

activity..—,

orders

3.71

3.22

Feb. 16

INDEX

(tons)

Percentage

3.62

3.12
-

'

(tons)

ELECTRIC

Kilowatt-hour sales to

3.14
3.31

Feb. 16

:__

PAPERBOARD

Production

3.34

EDISON

3.07

3.22
3.36

Feb. 16

Group—

Group

received

3.61

3.27

,

3.07

2.94

2.94

3.24

Feb. 16

^rTV

—_

COMMODITY

NATIONAL
Orders

_—

'3.11

Feb. 16

i-

...

Aa

Railroad

Feb.16
Feb.16

Feb.16

Aaa

3.34

and

ask

**F.o.b.

Port

Colburne,

quotation at morning

U. S. duty included.
ttAverage of daily mean
session of London Metal Exchange, ttDelivered

freight from E. St. Louis exceeds 0.5c.

44

The Commercial and Financial Chronicle

(812)

goods pro¬
gram is favorable to
the world
economy, even if on a small scale.
It is a four-way advantage.
It is

Outlook foi Stock Prices in 1954
Sec¬

forces.

economic

"natural"

with

interfere

to

would repeat ing down
inflexible policies of the 1920's East-West

its

of
the

past

errors,

it flouts classic economics.
Third, except for the 1949 reces¬

and 1930's which not only threat¬

Government acted

grade securities held by the banks
but also the
foundations of the whole economy.

ond,

sion, when our

downtrend under
conditions having relatively fa¬
vorable background, no Govern¬
ment thus far has been able to
demonstrate it can prevent a de¬
to

a

reverse

Localized

Private Recessions

or

Depressions

and

lines.

all

Reason for a Serious
Stock Market Break
No

happen to believe that there
something new in the way of

I
4s

and other institutions,

in
sub-marginal

The boom has not continued

pression.
Why

value of high-

ened the economic

managing or directing economies;
that
while
business oscillations

the

In

did well when
government war
orders, their boom collapsed in
1946.
They have been flat ever
that

companies

with

furnished

stores, va¬

The department

since.

break¬

straw in the wind toward

a

Government

consumer's

Russia's

market
ties

between

furnishes

It

trade.

a

production facili¬
West
(Totalitarian

the

tor

the

of

barriers

the

hunger ties in perfectly with the

food
surplus) and raises the standard
of living inside the Iron Curtain.
This is a leavening process, tend¬
ing to stimulate waves of new
business all over the world, and
World's

Free

embarrassing

builds up gold and other reserves
in the central banking systems of

Europe,

thereby increasing
from other

buying

power

There
which

are

signify

their
areas.

developments

new

second industrial

a

specialty stores revolution. We have super-scien¬
peaked out in 1946. Their stocks tific technology and are on the
cannot be prevented (nor would
are priced not far above the lows
threshold of unbelievable changes
it be desirable to do so) that the
of that year. The same is true of and
improvements. "We Haven't
extreme amplitude of swings of
the distillers group.
The movies, Seen Anything Yet." There is the
the past need not
be tolerated. in the
grip of fast-moving and exploitation of atomic energy, jet
There is such a thing as money
spectacular technological changes, and turbo-jet propulsion, and elec¬
control;
cycle control; projects
•control and over-all business con¬
trol.

first

The

bulwark
on
of a down¬

great

reversing

the

(or unhealthy excess)

ward

trend

rests, is the money managers—the
Federal Reserve Board. This body

pivotal.
It has great powers.
is in position to act first, to act

It

xiviftly, and with the most potent

of weapons, directly on the bank¬
ing system, and indirectly on all
^business:

proportions, but are now ap¬

parently seeing dawn after a long
night of darkness. The gold-min¬
ing stocks are at the bottom of
an 8-year slide.

ceuticals.

ments.

bottom

bull

same

Selective credit controls.

direction of business.

has had
in

40 years of experi¬

and

debt

money,

cycle

management.
It has gained in
knowledge, prestige and swiftness
and sureness of decision.
It also
benefit

the

of

of

more

beginnings

powers

granted by law, and more power
magnitude of the basic gold

five

least

simultaneous

a

It is

For example,

a "big boy" now.
the depression of

could

1920-21

Gold

avoided.

have

not

reserves

been

were

less

billion.
This was not
enough for expansion required by
government, business and stock
market simultaneously under the
stimulus of war. The ratio of gold
to Federal Reserve notes exceeded
than

the

$3

requiring a pen¬
additional emissions, a
contraction
necessitated
by the

from

The rise in the Federal Re¬

serve

rediscount rate

was

to

7%.

demobilization of the
armed forces was another major
factor in the 1920-21 liquidation
most of us have forgotten about.
That is in contrast to the present
The rapid

situation
from

in

which

transition

the

to peace is gradualized.

war

Anyone who associates the pres¬
ent threat of recession with the

great liquidating movements must
reflect

the

sharp

contrasts:

in

1920-21, the N. Y. Federal Reserve
Bank slapped on a 7% rediscount

rate; in

1929,

a

6%

rate,

and in

1936-37, the banking system was
subjected to three successive in¬
creases

in

bank

reserve

require¬

distinct

2 xk

Since these earlier

mendously

periods, tre¬
significant changes

has

it

been

tivity has been progressively the
watchword, is shown by the fact
that, using round numbers, about
one-third
for the

closed

1951; about one-half
for the year 1952;

year

down

and

experience

thorities

au¬

willing to implement
the powers implicit therein; and
(4) it is inconceivable that the
Federal Reserve Board, in view of
the matured thinking distilled out
are




West

eased.

The

with

disequilib¬

East

Provincialism

be

must

must

give

yvay. The only eventual solution
is broadened, unfettered trade and
better world standard of living.
That
is what
the
awakening

Asia

of

masses

corrections.

by Stock

investors

Stock

showing

are

understanding and greater
in
making judgment;

maturity

with less

easily

emotion, they

not so

are

panicked.

History shows
making essential
products with national markets at
a

companies

fair

price,

having

capable

They

purposes,

transcyclically, if necessary,
quasi-dollar-averaging basis.
this on the hypothesis that
in

cess

of

investment

stock

about

on

a

All
suc¬

consists

or

Stopped

2

most

tin,

thrust

this

of

when

summer,

out chart pattern

wool,

from first

financial

affairs

safe basis of

if

quo; as
of

could

some

we

rest

on

a

familiar status

if gold was still priced at $20.67
instead of $35.00 an ounce; as if
there

guarantees

were

higher price at
if

as

for the Dow The¬

reverence

justification

had

still

ory

against a
future time;

some

when

actually it is anachronistic in prin¬
ciple, and in practice has failed
since 1937,
ored in

having been

more

hon¬

its breach than in its ob¬

the State were
helpless against the primacy and
regnancy of the business cycle and
as

if

In
While

these
have
in

declines

been

1948

prices

and

agri¬

than

oc¬

when
in 23
income dropped
1949,

dropped

and

in

less

net

24%

$3 billion in two years, they have
been
serious enough to
arouse
fears

again

that

general
depression is in the making.
once

a

We do not believe such

view

a

pessi¬

progress

the

is

that

past

year

justified

at

pres¬

has been made in
in stemming the

decline. In fact, the latest
report of the Department
issued last Friday showed a wide¬
spread
improvement,
averaging

national market, coffee and cocoa

4%

price

mid-November to

from

January,

highs.

prices

It is

a

strange harbinger of de¬
when commodity

pression
stay firm

prices

display rising tend¬

or

tain the market

Earnings

can sus¬

capitalized

at

a

76%,

of

been

a

earnings,
85%.

low dividend

44%

versus

The

government is getting out
to wit: RFC is being
liquidated and rubber plants are
sale.
tax

reductions

have

al¬

ready been made and other
changes, including easing of dou¬
ble taxation through credits for
dividends, and modification of the
Capital' Gains

capital levy)

this

I would

also

the

to draw

fact

Administration

January,

market

political party, whatsoever.

maintained

is

1954,

prices

in this

Nation.

For

believe that agricultural

we

agricultural

and

incomes

will be maintained fairly close
those

of

1953.

Foreign

to

demand

has rallied slightly from the

rela¬

tively low level established dur¬
ing the

summer

pushing
panding

every

of 1952/We

are

our

reduction of

a

formerly

acres

We

crops.

25

some

devoted

will

million

these

to

continue

to

ad¬

minister

Summary

aggressively the current
Those who choose their equity price support programs to the limit

sagaciously

buying, in

are

greatest spectacle of achievement,
the combined knowledge, techni¬
cal

skill, wisdom and industry of
the
world's
scientists, technolo¬

gists, industrialists and statesmen,
the

Earth has ever pre¬
population growing at

planet

sented to

a

the rate of 25 million a year!

of

our

resources.

The goal of this Administration-

is to encourage the conditions that
lead to economic growth — and
that

means

living

expanded level of

an

for

the

American

people.
is
through
expanded
production—
production that finds its way into*
consumption and not into ware¬
The

road

to

economic

growth

houses. We cannot continue to

that

took

your

when

hold

in

1953, the parity ratio—

measures

In response to wartime de¬

years.

mands, the agricultural plant has
become geared to high levels of
Farm output in 1952
record high, 44% above the

production.
was

a

6%
larger than in 1950. Production in
1953
was
about as
big as last
year's record. There was a sharp
increase in cattle marketings re¬
flecting a four-year build-up in
period,

prewar

cattle numbers
tress

selling

the relation of the

1935-39,

on

and

ac¬

of prices and incomes of
people. Farmers should re¬

At
a

due

time

the

record

serious

to

1952, foreign
States

products weakened as
increased

to

world

of

year

the

a

agricultural

abroad and

realizing

were

in

United

for

demand

we

output

farm

legislation

price our products out
markets.

In

the

which ended June 30,
value

farm

result of
output

foreign exchange dif¬

Our

of

United

States

fiscal

has

not

94,

been

a

10

intensified

signifi¬

Our
serves

the

the opportunity to
constantly expanding

a

standard

of

rapidly

a

whicR
to

have

in

is such that

living. The pressure
growing population
no

that

granted

one

take

can

some

for

hence,

years

the needed food and fiber will

forthcoming
must

without
an

be

We

stress.

the

encourage

that will result in

conditions

efficient ancE

expanding agriculture. The Presi¬
dent's proposals on the agricul¬
tural programs will

help economic
growth in this Nation.
The

Relationship of Agriculture to*

Other Segments of the Economy

In

modern economy, agri¬
industry and labor are
completely interdependent. There
our

culture,

is

no

need to demonstrate that

agricultural
the rest

to

is

art

highly

can quickly spread
of the economy. Nei¬

ther is there need to demonstrate
that

decline in the buying power

a

rate of

products shipped abroad totaled
$2.8 billion, a drop of 31% from

depression

contagious and

of

labor

pable

or

a

slackening

capital investment

of

bringing about

in

the

are

an

ca¬

eco¬

nomic downturn.

the

previous year.
a continued strong do¬
mestic demand, high level
pro¬
Despite

this

country

next

July 1 is

now

problems of excessive re¬ ning of the next crop season next
August 1 is estimated at 9.6 mil¬

have their roots in earlier

farmers

of

incomes

contribution

well-being. Nonfarm
should
be
willing
that

people

farm

cantly in the last year. In view of estimated at about 800 million
more
than
a
normal
the
magnitude of the problems bushels,
facing agriculture, this is a real year's domestic consumption. The
carryover of cotton at the begin¬
accomplishment.

being considered.

nation's

share

and

their

1953,

point drop
and
diminished
from a year earlier. This January, duction
export
the parity ratio was 92, only a outlets brought pressure on farm
two point decline in the past 12 prices and a rapid expansion in
months.
Thus,
the
cost-price price support operations and in
squeeze in agriculture which de¬ stocks of many farm products re¬
veloped so rapidly during 1952 sulted. The carryover of wheat in
pays—was

prices

reflect

farms and dis¬

drought conditions in many areas.

tended

prices the farmer receives for his

Tax !(a> disguised

are

to believe

reason

agricultural price adjust¬
ment to peace-time conditions is
largely behind us, providing that
a
high level of economic activity

in

ployment than previous pledges of
any

has ficulties.

trend
weeks.

recent

like
to

mid-

products to the prices the farmer

versus

Some

in

attention

which

are:

are

central

and

indicate

continued

this

encies.

There is much
that the

possibility for ex¬
foreign outlets. We
the inevitable fateful sequence of
have also begun the adjustment of
boom and bust; and as if both po¬
excessive supplies. Under the re¬
litical
parties had not accepted
quirements of present legislation,
the creeds of easy money and full
acreage
allotments
have
been
employment, with the Republican
established for wheat, cotton and
party pledge in 1952 more heroic
corn which are expected to result
in its declaration against unem¬

price

have recently scored new all-time
'

slightly higher than in mid-

was

January, 1953.

lived in the sanctity

convertible gold standard era;

a

as

Supports
Danger of Collapse!

products have since enjoyed
gains, beginning with Sep¬
tember, including wheat, oats,
hogs, and soybeans. In the inter¬

modest

of

and pa¬ the
average
price received
by
in astute farmers for wheat on Jan. 15,1954,
timing.
was $2.03 per bushel, only 7 cents
There are many investors about less than a
year earlier while the
who still talk and act as if one's
average price for cotton per pound

ceive

Farm Price

ent, especially in view of the real

farm

the

tenance

was

saucering-

sup¬

accumulation

wheat, cotton, and other supplies,

farm

mistic

developed. Some

price
despite

that

programs

burdensome

about 20%

page

The

lead.

decline
a

in

interna¬

like

and

zinc

severe

and

commodities,

rubber,
final

was

materials

raw

tional

last

decline

This

port

large stocks of farm
products which threaten the main¬

months

Commodity prices suffered
a
¥2-year decline starting in March

1951.

wholehearted ad¬

our

ministration of existing

cumulate

farm

Decline

a

of

measure

selection

80%

and

tience,

my humble judgment, tickets of
admission in due course to
the

Investors

also

are

corn

once

ever,

they like, for long-term

looking for—

are

stocks

in

expected

are
stronger the hands of the Commodity Cred¬
the economy be¬ it Corporation. At this time, we
gins a new upward trend. More have committed practically all of
and more institutions and indi¬ the
$6% billion authorized for
viduals are waiting to buy stocks
price support operations. It is a

than

beginning to demand.

curred

Commodity Prices Have

up for

gamut,

of

culture

two-thirds in the year 1953.

in

100%

rium

off

stocks closed

all

of

of business,

a

to worry

to

past three years, and why selec¬

price of gold will not be lifted at
future time; (3) the Bank
Act of 1935 creates an elasticity

*ixice 1936 shows that Reserve

World

Western

of

and
position, don't have edible fats and oils.
too much about business
Most of these stocks will be in

profit in the stock market in the

payout

ranging

the

dle East and Asia.

Continued

difficult

How

There has

requirements

in

year's domestic

a

able financial

to 3-year low,

low multiple.

reserve

standards

living

is the simultaneous social and po¬
litical revolutions in Russia, Mid¬

di¬

and

between.

cycle management: (1) the gold
standard has been abandoned; (2)
there is no guarantee that the

,

industrial

second

insisting

and others in indeterminate stages

have occurred in money, debt, and

-some

Substantial increases

media

Some other factors that

ments.

factory.

More Understanding

independence.

a

with

Along

is composed

7%-year loiv, some starting

rise

weapons,

revolution and its impact on

that

to

from

bales, about

use.

servance;

others, just described in part, are
interweaving up and down, some

for

law.

the automatic

more

legal limit,

alty

to

The
comprising
mostly the illustrious blue chips,
is near its 2l/2-year bull top. The

it controls. It is no longer

stripling.

a

The

the public notices,

near a

application to all

controls

of

transportation, business machines,

types of markets acting with

verse

its

with

kinds

^

in the

reserves

of

tronics

lion

a

well prove true of the

may

at

been

established.

fact the market

In

one

System

Reserve

move

integrated steels.

appropriate action with
these tools—in each case to in¬
crease the money supply—was all
that was needed to reverse the
In 1949,

Federal

the

have

to

seems

with

new

(c) Open market operations.

feas

the

of

case

pharmaceuticals which
years' time,

antibiotic

made

ence

the

In

halved in price in two

<b) Change reserve require¬

now

1951, declines of varying

Since

severity have occurred in the tex¬
tiles, non-ferrous metals, steels,
lesser chemicals, and the pharma¬

the

The

devastating de¬

a

cline of the most serious bear mar¬

(a) Change money rates.

<d)

and

stores,

have witnessed

ket

which

is

riety

on

being one of the low-cost pro¬
ducers, and maintaining a favor¬

brilliant management,

East-West Trade

Continued from page 5

Thursday, February 18, 1954

..

.

Farm

programs

stabilize
first

prices

line

cession.

of

which

are

a

defense

help

necessary

against

re¬

Price

support programs
help turn aside bearish price

can

movements when such movements
are

in

early stage. Unimpeded,
might grow to
serious proportions.

a

an

minor downturn

But if

a

serious economic down-*

turn

should

trols

and

themselves
turn

the

recovery.

strike,

farm
are

blow

The

acreage

con¬

price supports
not well

by

suited to

to bring about
preventives and

or

^Volume 179

the

Number 5300... The Commercial and Financial Chronicle

remedies-JieTer~iare^broad&r offend

than agriculture alone.
It is possible to fashion

point
farm

which provide for the
accomplishment of changes need¬
ed within agriculture and which

programs

ward

of

off

and

economic

cushion

the

shock

disturbances

of

outside of agriculture.

or

believe

This I

have done in the pro¬
the
President has

we

which

gram

populace

such

to

a

to discredit all forms of

direct aid to agriculture.

thus

ture

might

Agricul¬
the public

lose

good will, which has served well
in the past and for which there is

continuing need.
It

or¬

dinary magnitude, originating in

^our
as

have

that

named

study

led

recommendations

to

us

I

the

President's

the

which

on

It

based.

are

the broadest review of agri¬

was

recommended to the Congress.
It
would be unjustified
optimism, I

cultural

believe, to expect

participated directly through pub¬
lic
policy discussions conducted

from

more than this
price support program.

a

The Recommended Farm Program
The

for

need

farm

price

improving

support

our

program

urgent and obvious.

is

Our present

in

taken

price policy ever under¬
this country.
Farmers

by the farm organizations. Scores
of producer, processor, and trade
groups were consulted. Research
institutions

colleges

the

and

agricultural
us
the results of
The National Agri¬

gave

legislation provides price support

their studies.

for the basic commodities at 90%
of an outdated parity.
It is based

cultural Advisory

wartime

on

needs, and has been

extended 8 years beyond the offi¬
cial end of the war. These are the

unfortunate

consequences

of this

legislation:
Production of certain crops has
been
stimulated
beyond normal

Commission
spent the better part of a year on
the problem.
Men in the Depart¬
ment
of Agriculture
gave
the
knowledge gained by the accu¬
mulated experience of 20 years of
grappling with these matters. The
various Departments of the ex¬
ecutive

Use of

has become

our resources

branch

wheat

gressed there

be

in

grass

grains.
Consumption of

lands that

in

or

feed

commodi¬

some

ties has been curtailed by unreal¬
istic prices. For example, growth
in the

capita consumption of
textiles during the past 25 years
per

the

Congress

experience.
though these many

Diverse
views

production

of

shared their rich

unbalanced; the high support
price for wheat has shifted into
should

consulted.

were

members

Many

needs.

were,

as

to

>?

•},'i-i Ch

our

inquiry pro¬

Appeared

ever-

an

expanding area of general, though
certainly not unanimous, agree¬
ment:
This agreement had to do
with the role of market price in
guiding the production and con¬
sumption of farm products.

There

Tne

hnr>^?.y.

i irr

are

peace-time needs has been de¬
major

other important fea-

provisions of the
legislation which has been recom¬ formal statement.
mended to the Congress are these: indicate
that
the

I

will

4&'

(813)

•

tures of the President's proposals
which I shall not bring out in my

layed.

lation.

Rather, to

large degree

a

it calls for the implementation of
laws already on the books, pre?-

simply viously agreed

by the Coriif the Congressr
passes no farm legislation whafc*
ever, the greater part of this pro—
which I have outlined. Farm prodgram would become operative,
ucts vary as to their importance,
The Congress should not return
their perishability, their depend- to the
philosophy of scarcity that
ence on export trade, the elasticwas
tried and found wanting in
ity of their demand and in many the 1930's.
products

various

farm

In

gress.

upon

fact,

considered separately within the general framework
are

The framework of the pro¬
legislation would be the
Agricultural Acts of 1948 and
1949.
These acts were soundly
conceived, and received strong bi¬
partisan support.
For the basic
commodities they provide a sched¬
Each has
To
be prosperous the farmee
ule of price floors ranging from other important ways.
dealt
with
in
accordance must produce. The new farm
75 to 90% of parity, varying in¬ been
prowith its special circumstances.
gram is geared to just such a phiversely with the supply.
These
An
important feature of the losophy. It is aimed iat reducing:
acts are now inoperative for the
program
is what to a minimum government restricrbasic commodities because their recommended
one
might call its "gradualism." tions on farm production.
We
provisions are held in abeyance.
(1)

posed

difficulties which

the

was

iti

The amendment to the Act

(2)
of

1949, which calls for mandatory

price support for the basic com¬
modities at 90% of parity, should
be allowed to expire following the
1954

as

crops,

provided

now

by

sets a new
direction, but it
proceeds in that direction slowly
rather

Modernized parity should
permitted to become effective

(3)

than

with

haste.

the

As

President's message indicated, we
will use our discretion under the

Agricultural Act of 1949 to insure
that

law.

be

It

year-to-year variations in
support levels are limited.

price

For this year s

basic crops, the
have no effect

Jan. 1, program would
provision whatever, as the Administration
is p edged to
carry out the existwould drop the parity price 5% a
mg law during 1954.
year until the shift from old to
For 1955, the level of price supmodernized parity was complete.
(4) The new program should be port for the basic crops would becontemplated,

now

as

on

transitional

A

1956.

come
dependent on the supply,
opportunity tq^ start
operating without the handicap of Bl£ Witnhctnhnen^°nn1.S10ri f?.r se,tting
aside $2,500,000,000 worth of exour accumulated
surpluses.
This
cess reserves, the supply calculacan be done by setting aside up to
tions should give a support price
$2,500,000,000 worth of commodi¬
ties from Commodity Credit Cor¬ near present levels.
For 1956 the level of price sup-^
poration inventories for use in
school lunch' programs, disaster port would continue to depend on
the supply.
In addition we would
relief, aid to the people of other

given

an

dare not pursue the route of sear*-

city in our quest of a high level
of living for all.
Farm income is
the product of price times volume
—dollars times bushels, pounds or
tons.

America

did

not

become

1

great

of scarcity nor will
^ remain great under such an ap—
proach.
Restricted production fsr

on

an

economy

the

n0^

road

to

prosperity over
have learned,

the long pull.

As

through

the

years,

economy

requires

duction

is

dynamic

a

increased pro-

increased

and

This

tion.

we

the

consump-

to

way

more

enjoyment of the better things: of
]|fe

by

people—the way to
high level of living,
we
pr0gram,
believe, li¬

more

maintain
This

a

consistent with the Economic R&-

port

of

the

President,

recently
Congress.
: •

transmitted to the

start moving toward modernized
ED. NOT©:
The following table
parity, which of itself would mean was included in the^everal schecTa
drop of about 5% in the level ules and charts presented by Secsynthetic fibers; cotton has not high fixed prices—leading both to emergency.
of support.
reduced consumption and to tight
'
shared in this increase.
retary Benson illustrating the
The Agricultural Acts of 1948
For 1957, we would largely have
Exports have fallen sharply, controls over acreage and market¬ and 1949 grew out of the hearings
quantities and costs of commentpartly as a consequence of having ing. They realize that prices must on long range agricultural policy
ties owned by tbe Commodity
priced ourselves out of the mar¬ respond to changes in demand and and programs and contain two
As can be seen, this program Credit Corporation, and the con*ket.
During the past two years to changes in the methods and principal objectives which have
costs of production.
•our exports of wheat outside the
been
sought for years^—the re¬ requires a minimum of new legis- modifies under loan.
I
But it is generally conceded that vision and modernization of the
International
Wheat
Agreement
SCHEDULE I
H
prices have parity formula and the establish¬
have fallen from 220 to 64 million free, unsupported
United States Department of Agriculture Commodity Credit
bushels, while Canada's free mar¬ some shortcomings as far as farm ment of a flexible price support
ket sales have risen from 105 to products are concerned.
Corporation
program.
There is a high degree of in¬
161 million.
The basis of our price support
Report of Price Support Commodities as of Jan. (5, 15)54 Based on Records and
v
Known Commitments in CSS Commodity Divisions and Offices
stability in market prices.
Fre¬ computations is the parity con¬
Our artificially high
domestic
Estimated Total Stocks*
———•»
quent and wide disturbances in cept.
prices have served to attract the
Stated simply, the price of
Unit of
Approximate
Total Coatf
products of other countries to us prices serve no useful economic a farm commodity is at parity if

has

been captured

wholly by the

We found that most farmers un¬

the

derstand

dangers inherent in

countries, and stockpiled

reserves

at home for use in

national

war or

pSm

like

a

ing

our

magnet. To keep from hav¬

support programs
ineffective by imports,

price

rendered

have had to impose

we

riers

that

those

offend

tions whom

we

trade bar¬
free

na¬

Urgently need as

Farmers

Prodigious stocks of
modities

been

have

stocks

hang

some com¬

accumulated.

over

the

mar¬

prices despite our
best efforts to make price support
•effective.
Wheat, which we have
endeavored to support at 90% of
parity, has in fact been bringing
•only 82%—corn, with the same
■support level, is only 79%.
Heavy costs have been incurred.
We have submitted
the restoration of

Commodity

addition
sary

capital losses of
Corpora¬

a

have found

we

it

neces¬

to request that the borrowing

increased
from $6.75 to $8.5 billion.
CCC

of

authority

be

Price increases to some farmers,

such

as

sellers of corn, mean cost

increases

livestock

as

farmers,

drastic acreage reduc¬

parity,
of

these

on

from

themselves

sider

the

be

to

protect

what

they con¬
of the

excesses

the

At

same

time,

farmers

do

to abandon the freedom

not want

efficiency which market

and

prices provide, and accept the in¬
evitable alternative, which is full
scale bureaucratic control.
They
wish to retain much freedom and

despite

independence

the

allure¬

ment of what has been called the

welfare

J

state.

There
desire to
the

1914.

to

mands

appears

true

of the

great majority of farmers as well
as technical people.
It seems that extremists from
neither the right nor the

left thus
captured the farmer's
have extremists gained

substantial

following

among

professional analysts.
The

which

price
the

effesct

ferential

Upland

these

the

on

old

support

President

legislation
recom¬

Barley

various

Beans,

Favored

producers of the six basic crops,
the income from which totals only

23%

they

of total

are

program.

intended to utilize the efficiencies
and the freedoms inherent in mar¬

ket

farm

really commercial oper¬

ators. The 3 V2 million small oper¬

agricultural legislation which

der

developed during depression
ators produce so little that price times and modified during the war
supports do not mean many extra to encourage production. An im¬
dollars.

mers

and

tinuation

non-farmers.
of

this

A

program




con¬

could

1.66

--bus.

312,000

4.14

—cwt.

58,000
148,000

2.54
1.68
4726
.0765

hay & pasture...

Seeds,

winter

ernized

Soybeans

commodity
into account the relationship

takes

price of that commodity to
farm products during the

other

Modernized parity

past 10 years.

modities—wheat,

The law provides that
parity shall become
effective Jan. 1, 1956.
modernized

effect

overall

The

of

these

should

be to encourage
the production of

in

for

Cottonseed

ened.
The

points in the di¬
expanding the total
against restricting pro¬

program

market
duction

of
as

to

available

the

This

be

program

possible

since

with

restrictions

this
on

■

lbs.

967,975,000
273,065,000

lbs.

-

—

203,000

2.52

512

—tons

31,034

241.00

--lbs.

5,223,000

27

7,479
1.410

lbs.

4,183,000

6,284,000
89,074,000

gal.

——

stock—;

farmers'

oil

—

Tobacco

—

——

—

Shorn

Total

mitments

total
to

stocks

sell.

owned

by

CCC,

commitments

to

82,621,048

purchase

less com¬

Lyman, Spurr, Vanghan Howard W. Hoinlz WHk
Hill Richards S Co.

With F. L. Putnam Go.

(Special

BOSTON, Mass.—F. L. Putnam
C

Incorporated, 77
Street, members of the

Franklin

Boston Stock

that

Aaron

and

Exchange, announce
J.

Lyman,

Geoffrey

W. Vaughan

Howard

have become associated with their
firm.
an

Mr.

formerly
Co.,
Vaughan was also

Lyman

was

officer of Gregg, Storer &

with which Mr.

in the past
with Wise, Hobbs & Seaver.

associated.
was

Mr. Spurr

program,

production

With Hall & Hall
(Special

to The Financial Chronicle)

Hall

&

Hall,

Bank

of

America

Financial Chroniciie)

to The

LOS ANGELES,

o mp a n y,

Building.

program

.6310
—

1

dom of action.

wheat, corn, cotton, tobac¬
rice, and peanuts. Adjustment

This

plus

7,541
56,206

1.20

—

"Estimate

would be less necessary.

the public interest

1,178

.2815

Wool:

crops;

price support is required
90%
of parity for the basic

.2917

lbs.

oil

Peanuts,

co,

at

that

7,511
178,204
79,653t

.1265
.1841

59,378,000

FRESNO, Calif.—Oscar L. Rog¬
ers
has become connected with

is

26.22

■

.

crude.

lbs.

Olive

Tung

market.

would

43,566

23,272
1*142

refined———.—lbs.

oil,

oil

Linseed

products and to broaden
market
generally.
Even

be a little lower, the market
grain will be greatly broad¬

1,147,106

38.63

50 gal. bbls.

Peanuts:

and

oil,

though the parity price for grain
may

2.59

602,425

.

/

Cottonseed

animal

the

442,898,000

—bus.

——

—

——

Pulled

increase

36,988
2,687
l',145

415,000

crop—

Turpentine
Oils

cotton and

corn,

—lbs.

691

6212,065
1,292
14T
249

Stores:

Rosin

is now in use for all but four pom-

,

,

4,186

2.76

lbs.

517 lb. drums

cover

78,265,000
35,121,000

bus.

Wheat
Naval

of the

464,000

bus.

would utilize, in
and in the in¬
terest of individual farmers, the
efficiencies that come from free¬

portant feature of this legislation

present program is looked
with misgivings by many far¬

Our
cn

was

374,738,000

—

Sorghum

Seeds,

price, not price alone. We antici¬
pate that over the years, this pro¬
gram would result in larger farm
incomes than any other program.
Better farm management would

not price-supported.
in this system are the

crops are

dle-of-the-road

mid¬
It is

389,000

..bus.

by providing for a moderni¬
zation of the parity formula. Mod¬
a

73,175

.1664
1.49
10.76

edible

dry

date

103,6121

.4024

.

bus.
cwt.

-

—

income from from the blind forces which can
marketings. Favored also are the impair the functioning of a com¬
40% of our farmers who have pletely free economy.
units sufficiently large so that
We are presently operating un¬

supply problem to farmers whose

mended to the Congress is a

439,756,000

-

Spurr,

the

257,486,000

.

Corn

support at 90% of parity. Income
is the result of production times

to shift

—

Rye

for

55,828

174,639

.6691

Seeds:

and

Grain

parity

$33,139

59.77

260,993,000

—lbs.

Milk, dried

prices, while at the same time
protecting farmers and consumers

serves

lbs.

—

Cheese
Grains

&

acres

934,044

..—lbs.

Butter

Flaxseed

rection

has

bales

—

$140.78
|

permit the
production and marketing of lar¬
ger quantities of farm products
than would be pbssible with price

diverted

I—

Lintels

235,394

Dairy:

dif¬

a

(thousands*

Unit Cost

Quantity

—-bales

commodities. The Congress wisely

the

a

disturbed

Measure

Cotton:

techno¬

relationships, and have had

changes

have

relationship to

Cost-lowering

have

them.

far

same

logical advances and shifting de¬

functioning of market prices,
rather than to move away from
This

the

bears

prices the farmer pays as was the
case during the base period,
1910

peanuts.

to be a general
work toward improving

appears

neW

Commodity—•

it

brought the parity concept up to

price system.

The produc¬

other crops

be left

to

in order

mind. Nor

price support at 90%

tions must be made.
tion

such

producers.

To obtain

of

other

to

to

unimpeded forces of the
market. They are willing to make
some
sacrifices in
freedom and

Credit

approximately threebillion dollars.
In

tion totaling

quarters of

request for

a

not wish

the

to

ket and depress

the

do

efficiency

friends.

These

and make sound adjust¬

purpose,

ment more difficult.

the Shift t0

Heintz

W.

has

Calif.—Howard
associated^

become

with Hill Richards & Co., 621 S«L

Spring Street, members of the Los
Angeles and San Francisco Stock:
Exchanges. Mr. Heintz was for-*
merly with Taylor and Company
of Beverly
was

E.

Hills and prior thereto

with J. B. Hanauer & Co.

F. Hutton

and

& Co.

Douglass Adds to Staff

?

(Special to The Financial Chronicle^

BEVERLY
Frederick

E.

added to the

HILLS,
Burnham

Calif.—.
has

beer*

staff of Douglass &

Co., 464 North Bedford Drive.

46

The Commercial and Financial Chronicle

(814)

..

Thursday, February 18, 1954

.

v

★ INDICATESrADDITIONS

^

Securities
Inc.

Aircasters,
Jan

Price—At par ($1 per share).

stock.

mon

construct

acquire broadcast stations.

or

Proceeds—To
Business—Sale

ers—Blyth

* Alaska Telephone Corp., Seattle, Wash.
10 (letter of notification) $270,000 face amount of
10-year convertible debentures, series B.
Price—
70% of principal amount. Proceeds—For general operat¬
ing expenses and working capital. Underwriter—Tellier
& Co., New York.
6%

Armstrong Rubber Co.
31, 1953, filed $4,000,000 of $5 convertible

March

due

May

1,

1973.

sub¬

Price—To

be

supplied by amendment.

Proceeds—For working capital.
Underwriter—Reynolds & Co., New York. Amendment
may be filed this week.
Offering—Now tentatively ex¬
pected to be made early in March, 1954.
Atlantic
Feb.

1

Price

City Electric Co.

filed

—

To

(2/19)

151,672 shares of

common stock (par $10).
supplied by amendment.
Proceeds — To
loans and for new construction.
Under¬

be

repay bank
writer—Union

Securiteis

Corp.

and

Smith,

Barney

&

Co., both of New York.
Atlantic

•

Delhi Oil

1,

1984.

Proceeds—To

(2/24)

repay bank loans and for new
Underwriter—To be determined by com¬

construction.

petitive bidding.
Probable bidders: Halsey, Stuart &
Co., Inc.; White & Co.; Blyth & Co., Inc., The First Bos¬
ton
Corp. and Salomon Bros.
&
Hutzler
(joiptly);

Probable bidders:

Halsey,

Co.

15

the

on

to

expire

ing

March 10. Price—$10 per share. Proceeds
approximately $8,500,000 indebtedness matur*

the current fiscal year and the remainder
general corporate purposes and working capi¬

for

Underwriter—None.

Co., Merrill Lynch, Pierce, Fenner .& Beane
and Kidder, Peabody & Co. (jointly).
Bids — To be

Jan. 29

opened

on

16

At par

filed 30,000 shares of preferred

($10

Price

—

record

Feb.

expire

on

1

on

Feb.

retire

share-for-share

a

26.

Price

basis;

$40 per
indebtedness.

current

W.

&

February 18
Illinois Central

Electric Co.

Pro¬

record Feb. 23

shares held.

(Offering

February 19
(Union

&

(Earrett

Bldg., Santa Fe, N. M.
Corp., New York.

Atlantic

Blaske Lines, Inc.,
Alton, III.
7 (letter of
notification) 65,990 shares of common
stock (par $2), to be first offered for
subscription by
stockholders of record Jan.
22; then to public.
Price—
$2.62 Vk per share.
Proceeds
For down payment on
Jan.

(Bids

Gearhart

&

T.

Alton, 111.
Louis, Mo.

El

Paso

<

Electric
Corp,

Corp.,
$2,525,000

to

be

Co.)

be

amount; and of stock, $1.50

per

construction

Bank

Mohawk

Airlines,

(Offered

by

76,399

Utah Power

Penn-Dixie

—Bonds

operation

Proceeds—Fbr

Lynch,

Pierce,

Interstate

Telephone Co.

shares of

common

(2/25)

stock

(par $5).

Price—To be supplied by amendment.
Proceeds—Fronri
sale of stock, together with net
proceeds to be received
from private sale of
$4,200,000 first mortgage bonds and
$1,500,000 4%% debentures, to be used
primarily to
purchase from California Electric Power Co. all of
the
capital stock of Interstate Telegraph Co.
Office—San
Bernardino, Calif. Underwriter —William R. Staats &
Co., Los Angeles, Calif.
California Oregon Power Co.

(Bids

:

Feb. 10 filed 300,000 shares of common
stock (par $20).
Price—To be supplied
by amendment.
Proceeds—To

11

(Blyth &

Co.,

(The

First

to

(Smith,

Power

Beane)

by

120,427

and

11

.

Long

Island

(The

Blyth

Witter

&

Co.)

EST)

a.m.

(Monday)
Common

(April

13

Gas

(Bids

be

to

underwriting)

Power

i

Electric

invited)

Co.,, Inc.)

Langley

&

Co.

be

to

•

$7,000,000

(Wednesday)
—Bonds

11

a.m.

Bids

11

EST)

$20,000,000

—Preferred

a.m.

April20
Common

Co.)

(EST)

$5,000,000

(Tuesday)

March

New York

Boston

Philadelphia

Pittsburgh

San Francisco

Private Wires




Chicago

(Bids

to

(The First Boston

Cleveland

Dean

all

offices

Witter

(Province

(Harriman

Ripley

:

Co.

Inc.)

Arkansas Power &
(Bids

$10,000,000

Common

and

Wood,

$50,000,000

-

.

•••.

.

.

-

be

invited)

(Offering

and

Gundy

&

to

Power

&

noon

«,•

r

.—Preferred

(Friday)
Common

$150,000

(Wednesday)
Bonds

Light Co

(Bids

-

.

$7,000,000

stockholders)

May 19
Utah

>

f

First Nat'l Bank of Toms River, N. J

Debentures
Inc.

.

,'V

$12,000,000

Light Co.—___

to

May 14

(Wednesday)

of)_
&

Co.,

i

Bonds

Corp.: Blyth «fe Co., Inc.;
& Co.) 600,000 shares

;

Bonds
invited)

be

April 27 "{Tuesday )

Fireman's Fund Insurance Co.—

Ontario
to

10

v

K

West Penn Power Co

$2,000,000

(Tuesday)

invited)

Bonds

and

California Oregon Power Co
(Bids

Co.

Co

;
March 9

shares

$8,000,000

Ohio Power Co.——

-Preferred
C.

Rand Development Corp

i

5,000

(Tuesday)

&

April 14
Ohio

$4,000,000

(Thursday)
W.

$11,000,000

Co

Indiana

-Equip. Trust Ctfs.

Co

&

(Tuesday)
Bonds

11

(Offering to stockholders—no

Bonds

Reid

Bonds

$17,000,000

$1,845,000

EST)

Corp.,

(Fulton,

EST)

a.m.

April 12

•

Southern

a.m.

&

(Tuesday)

•

$3,000,000

invited)

March 4

Boston

30

I

Common

Dean

invited)

Lighting

First

Common
$8,000,000

Co

(Bids
-

(Monday)

invited)

April 6
Power

(Bids

Co

11

Common

shares

Co

shares

—

(Bids

Co

114,166

Diego Gas & Electric Co

Georgia

(Wednesday)

be

be

to

March
San

Common

Mexico Ry.
to

Electric

Light

Bonds

Louis, Brownsville &
(Bids

(Thursday)

&

shares

Equip. Trust Ctfs.

Electric

$1,240,000

Barney & Co.)

(Bids

$20,000,000

Missouri Pacific RR

Suburban

Preferred

$7,000,000

Equip. Trust Ctfs.
EST)

Gas

&

Gulf Insurance

be

Co.—

Merrill

shares

Corp.

to

shares

(Wednesday)
invited)

March 29
Pacific

The First Boston Corp.)

600,000

(Bids

200,000

(Tuesday)

and

March 3

be

noon

Indiana

Common

Edison Co

Boston

24

Light

(Bids

$290,000

'

300,000

Southern California

Common

EST)

Texas & Pacific Ry

Bonds

Power Co

Inc.

Preferred

$7,000,000

$30,000,000

EST)

March 2

California Oregon

(Tuesday)

EST)

a.m.

&

(Bids

St.

(3/2)

Power

Southern

underwriting)

&

a.m.

$12,500,000

Light Co

noon

March

Common,

Corp

11

Bonds

about

Light Co

Common-

Fenner

Common-

Co._

March 25

Southern Natural Gas Co

racing plant.
Under¬
Noonan Inc.,
Springfield, 111.

Bretscher

300,000

share.

(Ore.)

stockholders—underwritten

to

&

(Eids

Inc.-

Cement

(Offering

&

(Bids

shares

(Monday)

company—no

Nauman, McFawn & Co.)

$16,000,000

EST)

noon

and

invited)

(Bids

Lighting & Power Co
(Bids

Co.

be

Power

$7,500,000

Portland

1

$6,500,000

—Preferred

&

March 23
Louisiana

shares

(Friday)

Corp.)

March
Houston

of

and

of

to

Pierce, Fenner & Beane and The First

Boston

invited)

Electric

(Bids

Common

invited)

February 26
Nat'l

Noel

Pennsylvania

'

Dallas

(Merrill Lynch,

Bonds & Preferred
be

to

(Offering to stockholders—underwritten by The First
Boston Corp.) $6,000,000

Common

300,000

—

to

$17,000,000

•

dealer-manager)

(Bids

invited)

Brewing Co
Alstyne,

(Thursday)

&

Co

and

;

Pittsburgh & West Virginia Ry.

First

Angeles, Calif.
* Cahokia Downs, Inc., East St. Louis, III.
15 filed $1,400,000 of
10-year 6% first mortgage
bonds due Jan. 1,
1964, and 140,000 shares of common
stock (par $1).
Price—Of bonds, at 100% of principal

filed

Securities

Co.)

(Tuesday)
Bonds

be

National Union Fire Insurance Co

(Offering to stockholders—Stone & Webster Securities

Feb.

5

&

February 25
Staats

Paine,
Lunt)

$2,000,000

California Interstate Telephone Co

—

5% secured note and for working
capital. Under¬
writer—Hill Richards & Co., Los

California

Goebel

Bonds

x

R.

to

(Bids

$5,000,000

Hunter

Feibleman

(William

16

El Paso Electric Co

$230,406

new

a

Feb.

$300,000

--Debentures & Common
Inc.;

&

Co

(Bids

Common

•

barges.
Office—210 William St.,
Underwriter
G. H. Walker &
Co., St.

writer—Dixon

Inc.)

EST)

a.m.

+*

.

* Burton Manufacturing Co., Los Angeles, Calif.
Feb. 15 (letter of
notification) 85,000 shares of common
stock (par $1).
Price—$3 per share.
Proceeds—To re¬
tire

11

Otis,
J.

Power

(Wednesday)

Magnolia Park, Inc
*

■\

—

purchase of six

Co.,

City Electric Co

Blatt

Underwriter—Hunter Securities

Alabama

(Van

»

—

March

shares

Common
&

February 24

Gas

Office

151,672

Herrick

by

Hamlin

Common

Corp. and Smith, Barney

Co.)

and

..$3,300,000

(Offering to stockholders—no underwriting)

Price—At par ($20 per
quire shares of capital stock of The Marquette National
Bank and the Chicago-Lake State Bank. Underwriter—
M. H. Bishop & Co.,
Minneapolis, Minn.

Corp., Santa Fe, N. M.
Dec. 23 (letter of notification)
748,000 shares of common
stock (par five cents). Price—40 cents
per share.
Pro¬

(Friday)

Plastic Wire & Cable Corp.—

15,000 shares of class A
share). Proceeds—To ac¬

ceeds—To acquire properties and leases.

Securities

Debentures

,

Jackson & Curtis

EST)

of

Price—To

(Monday)

stockholders—underwritten

to

Webber,

Shares, Inc., Minneapolis, Minn.

Natural

March 11.

on

to

share for each 10

new

Sheraton Corp. of America

$6,000,000

Estey Organ Corp

Basin

one

Rights will expire

March 15

Equip. Trust Ctfs.
CST)

noon

Underwriter—N one.

(letter of notification)

(2/25)

the basis of

on

(Thursday)

RR

(Bids

&

Nielsen, the selling stockholder. Underwriter—Courts
Co., Atlanta, Ga.
El Paso

Office—9400

Atlantic City Electric Co

4

Hornblower

—

NEW ISSUE CALENDAR

it Available Credit Corp., Chicago, III.
Feb. 11 (letter of notification)
150 shares of common
stock
(par $500) and $166,500 of 5-year debentures.
Price—At par or face amount.
Proceeds—For working
capital. Office—69 West Washington St., Chicago 2, 111.
Bank

Underwriter

Feb. 4 filed 76,399 shares of common stock
(no par)
be offered for subscription
by common stockholders

rights

Underwriter—None.

Inc.;1

a.m.

stock.

Board.

—r

share.

—

the

certificates
representing 1,900 shares of common stock.
Price
$11.371/2 per share to underwriter. Proceeds—To Charles

Carting Brewing Co., Inc., Cleveland, Ohio
18 (letter of notification) 3,750.4 shares of
capital
stock (par $15) being offered to
minority stockholders

to

of

it Edgar Brothers Co., Metuchen, N. J.
8
(letter of notification) voting trust

Jan.

of

Corp..
4,000 shares of common
par)., Price—At market (estimated at $10.12^
share). Proceeds—To John M. Curley, President and

Feb.

Underwriter—None.

programs.

Steel

Weeks, Boston! Mass. No general public offering planned.

per

"Self-Help"

Stainless

(letter of notification)

Chairman

stock.

share).
Proceeds—From sale of these
shares (and from sale of 500 shares of
$100 par value
common stock to parent)
will be used for extension of
Care

Eastern

per

* Care Development Corp., New York
Feb.

Bids—To be received up
(EST) on Feb. 24 at Irving Trust Co., 47th
floor, One Wall St., New York 15, N. Y.

Jan.

•

stock (no

March 9.

ly); The First Boston Corp.
11

of. two new shares for each five
oversubscription privilege); rights

an

within

used

tal.

basis

(with

on

—To pay

&

Union Securities Corp. and Smith, Barney & Co. (joint¬
to

>

'

REVISED

Corp., Dallas, Tex.

shares held

Shields

Quincy Ave., Cleveland, Ohio.

Stuart &

;

1,031,758 shares of common stock (par $1)
being offered for subscription by stockholders of record

Feb. 1 filed $5,000,000 of first mortgage bonds due 1984.
Proceeds—To repay bank loans and for new construc¬
tion.
Underwriters—To be determined by competitive

bidding.

ITEMS

ISSUE

Jan. 22 filed

Feb.

(3/9)

Feb. 10 filed $10,000,000 first mortgage bonds due March

ceeds—To

City Electric Co.

construction. Underwrit¬

new

Co., Inc., New York and San Francisco;
Corp., New York.

California Oregon Power Co.

and announcements to advertisers. Office—
Red Bank, N. J. Underwriter—J. Gilbert
Currie & Co., Red Bank, N. J.
Feb.

&

and the First Boston

157 Broad St.,

debentures

loans and for

•

*

of programs

ordinated

~~c,,vw^siNC£>REV10US

Registration

repay bank

.

120,000 shares of com¬

notification)

(letter of

21

Now in

-

$15,000,000

i

Volume 179

Number 5300

The Commercial and

...

due

Proceeds

by amendment.

supplied

—

1984.

curities

and for new
&-Webster Se¬

used to repay bank loans

be

to

Manager—Stone

Dealer

construction.

—

Corp., New York.

Estey Organ Corp., Brattleboro, Vt.

(par $100).
ceeds—To

Underwriters—M. H. Bishop
Co., Minneapolis, Minn.; and B. I. Barnes, Boulder,

Colo.

Harriman

Price—To be supplied by amendment. Pro¬
bank loans and for new construction.
First Boston Corp., W. C. Langley
Blyth & Co., Inc.

Feb.

28

★ -Fireman's Fund Insurance Co. (3/10)1.7..-'
Feb. 16 filed 600,000 shares of common stock

(par

Price—To be supplied by amendment. Proceeds
—To finance acquisition of National Surety Corp. and
for working capital.
Underwriters —The First Boston
Corp., New York, and /Blyth & Co.," Inc. and Dean
Witter & Co., both of San Francisco, Calif., and New
York, N. Y.

★ Fischer & Porter Co., Hatboro, Pa.
5 (letter of notification) 14,200 shares of partici¬

.

additions

Underwriter

$1). Price—To be filed
by amendment.. Proceeds—For expansion and working
capital. -Underwriters —Hallowell, Sulzberger- & Co.,
Boenning & Co. and Thayer, Baker & Co., all of Phila¬
stock

(par

delphia, Pa.
Corp., Wilmington, Del.
1
140,000 shares of common

Gamma
Feb. 2

(letter of notification)

Price—$1.50 per share. Proceeds—
capital expenditures and working capi¬
Office—100 West 10th Street, Wilmington, Del. Un¬

stock (par 10
For

cents).

inventory,

tal.

derwriter—Sheehan

&

Co., Boston, Mass.

★ Genco Oil Co., Inc.
10 (letter of notification) 49,000 shares of common
stock.
Price—At par ($1 per share).
Proceeds—For

Feb.

Office—1907

leases.

of

development

and M.

Underwriters—Donald Kerr
of

Scottsbluff,

Neb.

C. Davenport, both

Scottsbluff, Neb.

★ Gibbonsville Mining & Exploration Co.
Feb. 10
(letter of notification) 10,000 shares

of

non¬

preferred stock. Proceeds—For indebtedness,
installation of additional machinery and working capital.

assessable

Hutton

Office—l\l
—Daniel

Sherman

Bldg., Spokane, Wash. Underwriter
Secord, 4016 South Grand, Spokane,

Price—At par

Wash.

($10)

share.

per

★ Growers Container Corp., Salinas, Calif.
Feb. 15 filed 1,450,000 shares of common stock, to be
offered primarily to individuals and firms in the Salinas
Valley, Imperial Valley, Yuma, Phoenix, and other dis¬
tricts in and outside of San Francisco and Arizona, who

in

engaged

are

or

industry. Price—At
struction

allied to the growing and shipping
par ($1 per share). Proceeds—Con¬

of

plants, acquisition of equipment, and for
working capital,
Business—Primarily manufacture of
cartons and bags used for shipment of various vegeta¬
Underwriter—None.

bles.

★ Hale-Justic Drug Co., Cincinnati, O.
9 (letter of notification) 25,000 shares of common

Feb.

stock

to

a

rata basis; then to public.

pro

share).

be

offered

for subscription

by stockholders on
Price—At par ($10 per

Proceeds—To increase inventory.

Third St.,

Cincinnati, O.

Office—9 W.

Underwriter—None.

properties,

notes

and $140,00(V of 6% debenture notes.
Price—At
Proceeds—To repurchase and redeem notes presefitly outstanding and for working capital. Office—407
Community National Bank Bldg., Pontiac, Mich. Under¬

par.

writer—None.

Houston

Lighting & Power Co.

(3/1)

Feb. 4 filed

$30,000,000 of first mortgage bonds due 1989.
Underwriters—To
determined by competitive bidding.
Probable bid¬

Proceeds—For construction program.
be

ders:

Halsey,

Stuart

&

Co.

Inc.; Kuhn, Loeb & Co.;
Union Securities Corp.; Lehman Brothers; Smith, Bar¬
ney & Co.; Kidder, Peabody & Co.; Equitable Securities
Corp. Bids—Expected to be received up to noon (EST)
On

March

1.

for

and

Proceeds—For investment.

market.

Underwriter—None.

★ Kerr (Robert J.) Chemicals, Inc., Park Ridge, III.
9 (letter of notification) 9,640 shares of common

Feb.

stock.

Price—At

payment

of

So. Fairview

($10

par

per

share).

Proceeds—For

mortgage

and working capital.
Office—9
Ave., Park Ridge, 111. Underwriter—None.

★ Keystone Mining Corp. (Pa.)
Feb. 10 (letter of notification) 291,300 shares of class A
common

—To

stock.

purchase

mineral

rights

Price—At par

land

and

($1

and

erect

leases

and

per

share).

Proceeds

buildings, to purchase
to develop and exploit

mining properties. Office—21 North Duke St., Lancaster,
Pa.

Underwriter—None.




Securities

of

one

share

new

for

each

five

1

''"

(letter of notification) 8,854 shares of common
cents) to be offered to employees. Price—
share.

per

Proceeds—For working capital.
Sts., Philadelphia 23, Pa.

fice—Fourth and Poplar
derwriter—None.

if Philadelphia Fund, Inc., Camden, N. J.,
and Phila., Pa.
Feb. 11 filed 200,000 shares of capital stock.
Price—At
market. Proceeds—For investment. Underwriter—None.
Philip Morris & Co., Ltd., Inc., New York
13 filed 443,561 shares of common stock (par $5)
being offered in exchange for common shares of Benson
& Hedges, on a share-for-share basis. Offer is subject to

Jan.
'

acceptance by holders of not less than 355,460 shares of

working capital.
Corp., Houston,

Plastic Wire & Cable

Feb. 19 for

Corp.,

Merritt-Chapman & Scott Corp., New York
stock (par $12.50)
being offered in exchange for 1,078,546.25 shares of
authorized and issued common stock (par $1) of Newport
Steel Corp. at rate of one share of Merritt-Chapman
stock for each 2.1 shares of Newport stock.
Offer will

Dec. 31 filed 513,594 shares of common

expire

Feb. 26.

on

a

period of approximately three weeks. Price

share. Proceeds—For working capital. Un¬
derwriter— None, but Putnam & Co., Hartford, Conn.,
will manage a group to assist in obtaining subscriptions.

—$10.50

Haven, Pa.

per

if Poly-Seal Corp.
10 (letter of notification) 2,500 shares of capital
stock (par $1).
Price—$12.50 per share. Proceeds—For
mould construction and working capital.
Office — 405

Feb.

Lexington

Underwriter—None.

Ave.,

New

York

17,

Y.

N.

Underwriterc-

V

None.

Mississippi Chemical Corp., Yazoo City, Miss.
Jan. 5 filed 26,666 shares of special common stock (par
$75—limited dividend) and $1,500,000 of certificates of
participation (to be sold, in multiples of $75—5% inter¬
est).-Proceeds—From sale of these securities, together
bank

facilities.

borrowings,

are

if Rand Development Corp., Cleveland, O. (3/4),.
Feb. 12 filed 200,000 shares of common stock (par five
cents). Price—$10 per share. Proceeds—To pay devel¬
opment costs and for purchase of laboratory equipment.
Business—The

to be used for expansion of
Sales will be handled by

ucts.

Underwriter—None.

employees.

company

Missouri

Public

(with

secure

13-day standby).

a

(par $1).

Price

—

$4

per

Salisbury

to

dale Estates,

share. 'Proceeds —To

Feb.

through special offerings or
Proceeds—To Lehman Borthers

shares

be related

Stock

to

the

bid price

Proceeds—For

Underwriter—To be named by

stock

(letter

of

and

notification)
par

($50

working

per

i?.

500 shares of preferred
share).
Proceeds—For

capital.

Underwriter—None.

Superior Paper Products Co. on the basis of 3.1
St. Regis stock for each Superior share. Un¬

of

on

a

basis

of 3.8 shares

and
Ltd.

of Scurry-Rainbow stock

Underwriter—None.

Securities Acceptance Corp.,

Omaha, Neb.

1

(letter of notification) 4,000 shares of 5% cumu¬

lative

preferred stock (par $25). Price—$25.50 per share.

Proceeds—For working capital.

Underwriters—Crutten-

Ca, Chicago, 111.; Wachob-Bender Corp., Omaha,
Neb., and The First Trust Co. of Lincoln (Neb.)..
den &

a

England Gas & Electric Association -

Underwriter—None.

for each Rainbow Oil share.

$1).

*;

,

cents) to be offered in exchange for the 2,670,000 shares

of the shares on

amendment^

Atlanta, Ga.

of Scurry Oils Ltd. stock on a share-for-share basis,
in exchange for the 534,320 shares of Rainbow Oil

Feb.

20% underwriting
general corporate purposes.

Exchange, with

Price—At par (in
Proceeds—For exp^nOffice—Avori-

each).

derwriter—None.

planned.

Price—To

$1,000

★ Scurry-Rainbow Oil Ltd., Calgary, Alta., Canada
Feb. 15 filed 4,700,416 shares of capital stock (par 50

if National Oil Co., Inc., Little Rock, Ark.
Feb. 9 (letter of notification) 28,000 shares of class A
common stock.
Price—At par ($10 per share.) Proceeds
To develop oil and gas leases and such other properties
as
the company may acquire.
Office—1024 N. Tyler
St., Little Rock, Ark. Underwriter—None.

the Toronto

series.

four different
of

Price—At

stock of

No general offer

New Bristol Oils, Ltd., Toronto, Ont., Canada
Dec. 18 filed 1,000,000 shares of common stock (par

in

Regis Paper Co., New York
Feb. 3 filed 93,000 shares of common stock (par $5) to
be offered in exchange for 30,000 shares of common

or

Underwriter—None.

Peterson.

St.

(400 shares); partners of Lehman Brothers and members
of their immediate families (150,458); and The Lehman

New

9

expansion

Monterey Oil Co., Los Angeles, Calif.
2 filed 257,338 shares of common stock (par $1).
Price—At the market price then prevailing on the New

(106,480).

H.

if Royal Packing Co., Lawrence, Mass.

Feb.

Corp.

be issued

denominations

stock.

Exchange,

Robert

sion and for general corporate purposes.

—None.

Stock

and

•

★ Rodar Co., Inc., Atlanta, Ga.
Feb. 8 (letter of notification) $100,000 of 8% debentures

acquire flight equipment and for working capital. Office
—Cornell University Airport, Ithaca, N. Y. Underwriter

secondary distributions.

stock.

necessary

—

if Mohawk Airlines, Inc. (3/1)
Feb. 11 (letter of notification) 72,500 shares of capital
stock

Un¬

Price—$20 per share.
Proceeds--To
capital and surplus to be able to write
certain insurance.
Office
1414 First Security Bank
Bldg., Salt Lake City, Utah.
Underwriters—Frank B.

preferred

Price
—To be supplied by amendment.
Proceeds—Together
with other funds, to acquire capital stock of Gas Service
Co. (a subsidiary of Cities Service Co.). Underwriter—
Kidder, Peabody & Co., New York. Offering—Tempo¬
rarily delayed.
Formal hearing will be held before
Kansas Corporation Commission beginning March 15.
basis

of new prod¬

Feb.

527,865 shares of common stock (no par) to
be offered for subscription by common stockholders on
share-for-share

development

★ Reliance National Life Insurance Co.
.n*
8 (letter of notification) 15,000 shares of class A

Co.

Service

creation and

Company does not engage in basic research.

derwriter—Fulton, Reid & Co., Cleveland, O.

Offering—Expected during March.

Jan. 14 filed

a

/

City, Conn. (2/19)
Feb. 4 (letter of notification) 21,952 shares of common^
stock (par $5) to be offered for subscription by common
stockholders on the basis of one new share for each'five
shares held on Feb. 2.
Offering expected to be made on

Corp., Orlean, N. Y.
tt-(letter-of notification) 2,800 shares of common
stock.
Price—At par ($100 per share).
Proceeds—To
purchase drill rig, etc. Office — 10 East Corydon St.,
Bradford, Pa.
Underwriter — Winner & Myers, Lock

•

,

Hedges stock, and will expire on March 1, Un¬
less extended.
Underwriter—None.
A

Benson &

Medina Oft

with

Of¬
Un¬

Jewett

commission.

★ Investors Selective Fund, Inc., Minneapolis, Minn.
Feb. 11 filed 600,000 shares of capital stock.
Price—At

Continental

basis

stock (par 25

Dec.

York

★ Home & Auto Loan Co. of Delaware Feb. 2 (letter of notification) $60,000 of 5% debenture

%

to

—

the

on

12

Feb.

Texas.

preference

26

if Philadelphia Dairy Products Co., Inc.

McBride Oil & Gas Corp., San Antonio, Tex.
26 filed 2,000,000 shares of common stock (par 10
cents). Price—To be supplied by amendment. Proceeds
To repay notes, for .exploration and drilling expenses

Feb.

pating

p

Lynch, Pierce, Fenner & Beane, New York.

Jan.

and

Underwriters—

Ripley & Co. Inc. and Wood, Gundy & Co.,

held; rights to expire on March 15. Price—To
be supplied b^ amendment.
Proceeds—To repay bank
loans and for expansion program. Underwriter—Merrill

Jan.

$2.50).

To be advanced to Hydro

—

shares

Magnolia Park, Inc. (2/24-25)
29 filed $2,500,000 of 6% subordinated convertible
debentures due 1969 and 250,000 shares of common stock
(par 10 cents) to be offered in units of $100 of deben¬
tures and 10 shares of stock. Price—$101 per unit. Pro¬
ceeds—For construction of racing plant and for ex¬
penses incident to racing activities. Underwriters—Gearhart & Otis, Inc. and Hunter Securities Corp., both of
New York; and T. J. Feibleman & Co., New Orleans, La.

250,000

Price—To be supplied

1980.

Corp., New York (3/1)
Feb. 4 filed 120,427 shares of capital stock (par $7) to
be offered for subscription by stockholders of record

$29.45

York
shares of 7% cumulative sinking
fund preferred stock. Price—At par ($2 per share). Pro¬
ceeds—For working capital. Underwriter—E. J. -Foun¬
tain & Co., Inc., New York.
filed

/

Penn-Dixie Cement

Financial Credit Corp., New
29

15,

Proceeds

Inc., both of New York.

writer—None.
Jan.

March

on

Electric Power Commission of Ontario.

Angeles Drug Co.
filed $178,000 of 15-year 5% sinking fund de¬
bentures, due Oct. 1, 1966, and 50,000 shares of capital
stock (no par), the latter to be first offered for sub¬
scription by stockholders. Price—For debentures, at par;
and for stock, $10 per share. Proceeds—To finance ex¬
panded merchandise inventory and operating equip¬
ment (new building), and for working capital. Under¬

Bldg., Minneapolis, Minn.

{

$50,000,000 of debentures to mature $5,-

by amendment.

Los

Proceeds—To be available to subsidiaries and
outstanding bank loans. Office—820 Plymouth

t

(3/10)

repay

& Co. and

Jan.

filed

$25,000,000

Underwriters—The

Fidelity Acceptance Corp., Minneapolis, Minn.
of notification) 2,800 shares of 6% cumu¬
lative preferred stock, class E. Price—At par ($25 per

17

' "

(Province of), Canada

000,000 each March 15, 1960 through 1964, inclusive, and

Feb. 15 filed 70,000

Jan. 26 (letter

&

Feb.

if Long Island Lighting Co. (3/4)
shares of cumulative preferred stock

(2/19)

(letter of notification) 60,000 shares of common
stock (par $1). Price—$5 per share. Proceeds—For ac¬
quisition of property and equipment and for working
capital. Office—48 Birge St., Brattleboro, Vt. Under¬
writer—Barrett Herrick & Co., Inc., New York.

Jan. 21

share).
reduce

★ Ontario

47

Co!, Jersey City, N. J. Offering—Ex¬

pected in 30 to 60 days.

Feb. 15 filed

stock, together with proceeds from

common

writer—Tellier &

if Light Metals Refining Corp., New York
1,250,000 shares of common stock (par $1).
Price
$4 per share.
Proceeds — For construction and
equipment of control plant, and main plant, working
capital, advance royalties and reserves.
Business — To
refine beryllium ore and market the products.
Under¬
writer—Philip Gordon & Co., Inc., New York.

From sale of
subsequent
sale at competitive bidding of 15,000 shares of preferred
stock (no par) and $5,000,000 of first mortgage bonds

be

(815)

Financial Chronicle

,

'

if Selected American Shares, Inc., Chicago., III.
11 filed 15,000 shares of capital stock.
Price—At
Proceeds—For investment. Underwriter—None.

Feb.

shares of beneficial interest
being offered in exchange for common stock
Light Co. held by minor¬
ity stockholders on the basis of 4% New England shares
for each New Bedford share held. The offer will expire
on Feb. 23. Financial Advisor—The First Boston Corp.,

market.

New York.

amendment.

Dec. 10 filed 32,126 common

(par $8)

of New Bedford Gas & Edison

Nuclear Research Co.

(Pa.)

(letter of notification) 2,000,000 shhres of com¬
(par one cent). Price—15 cents per share.
loan and current trade obliga¬
tions, to construct laboratory and for working capital.
Office—2563 Grays Ferry Ave., Philadelphia, Pa. Under¬
Jan.

mon

21

stock

Proceeds—To repay bank

i

if Silver Buckle Mining Co., Wallace, Ida.
10 (letter of notification) 1,083,556 shares of com¬
mon stock
(par 10 cents). Price—12% cents per share.
Proceeds—To develop Vidicatot claims.
Address—P. O.
Feb.

Box

★

1088,

South

Wallace,
Carolina

Ida.

Underwriter—To be filed by
*

Electric

Jan. 28 filed 286,436 shares

& Gas Co.

of common stock (par $4.50) i

being offered for subscription by common stockholders ♦
of record Feb. 17 on the basis of one new share for each *

Continued

on

page

48

v

The Commercial and Financial Chronicle

(816)

48

Arkansas Power & Light Co.

47

Continued jrom page

Feb.

(3/2)

of common stock (par $25).
Price—To be supplied
by amendment.
Proceeds—To
retire biink loans and for construction program. Under¬
writers—The First Boston Corp., New York, and Dean
'Witter & Co., San Francisco, Calif.
Feb. 8 filed 600,000 shares

Arkansas Power &
Feb.
in

it

8

made

Bids—Tentatively ex¬
(EST) on March 1

(3/3)
first mortgage bonds, series A,

bank loans and
be determined
by competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; Lehman Brothers; Kidder, Peabody & Co.;
Merrill Lynch, Pierce, Fenner & Beane and Union Se¬
curities Corp. (jointly). Bids—Tentatively expected to
be received up to 11 a.m. (EST) on or about March 3
1, 1984. Proceeds—To repay
construction. Underwriters—To

new

Stuart

at 441

Feb, S filed 195,668.4 shares

Feb.

expire March 22, unless extended.

it

4

vote

on

stockholders

increasing authorized

to

•

Cpr^./Union Securities Corp. and Smith, Barney & Co.
Bids—Tentatively expected to be received up

to 11

(EST)

a.m.

on

March 23.
bonds

due

Proceeds—To repay bank loans and for new con¬

Underwriters—To

struction.

be

determined

by

common

stock

provide

com¬

Probable bidders: Halsey, Stuart &
Co. Inc.; White, Weld & Co. and Stone & Webster Se¬
curities Corp.
(jointly); Union Securities Corp. alnd

Srrfi|f£ Barney & Co (jointly); Lehman Brothers and
Bear/'Stearns & Co. (jointly); The First Boston Corp.
and Blyth & Co., Inc. (jointly); Kidder, Peabody & Co.;
Salorhon

&

Bros.

t^fe teceived

Hutzler.

up to noon

Bids—Tentatively

expected

(EST) on May 19.

West Coast Pipe Line Co., Dallas, Tex.
20, 1952 filed $29,000,000 12-year 6% debentures
due Dec. 15, 1964, and 580,000 shares of common stock
(par 50 cents) to be offered in units of one $50 deben¬
.

Nov.

ture and

one

share of stock.

Price—To be supplied by

-amendment. Proceeds—From sale of units and

additional shares of

common

stock

and

1,125,000

private sales of

$55,000,000 first mortgage bonds to be used to build

a

1,030 mile crude oil pipeline.
Underwriters — White,
& Co. and Union Securities Corp., both of New
York/' Offering—Postponed indefinitely.
.

West Coast Pipe

Line Co., Dallas, Tex.

Nov..2.0, 1952 filed 1,125,000 shares of common stock (par
50 cents). Price—To be supplied by amendment.
Pro¬
ceeds—Together with other funds, to be used to build
pipeline. Underwriters—White, Weld & Co. and Union
Securities Corp., both of New York.
Offering—Post¬
poned indefinitely.

9

9 it

was

announced

mortgage bonds.

company

Proceeds—To

construction.

new

intends to offer and

issue of $4,000,000 first

an

repay

bank loans and for

Underwriters—To be

determined

by
Stuart

competitive bidding. Probable bidders: Halsey,
& Co. Inc.; Stone & Webster Securities Corp.; Kidder,
Peabody & Co. and White/Weld & Co. (jointly). -

it

7

'

^

/

company plans sale during the
1954 of $10,000,000 common stock after
distribution by New England Public Service Co. of its
holdings of Central Maine Power Co. common stock.

first quarter of

Probable bidders: Blyth &

Co., Inc. and Kidder, Peabody
& Co. (jointly); Coffin & Burr, Inc.; A. C. Allyn &
Co.,
Inc. and Bear, Stearns & Co. (jointly); Harriman Ripley
& Co., Inc.
Central

Power &

Light Co.

if Detroit
Feb.

11

and

it

19

was

Proceeds—For

construction program.

Underwriters—To

be determined by competitive

bidding. Probably bidders:
Halsey, Stuart & Co. Inc.; Union Securities Corp., Equit¬

opened

on

March

American
/

Halsey, Stuart & Co. Inc.; The First Boston Corp.;

...

com¬

Probable bidders:
Halsey, Stuart &
Co. Inc.; The First Boston Corp., Eastman, Dillon & Co.,
Goldman, Sachs & Co. and White, Weld & Co. (jointly);
Merrill

Lynch,

Bros. &

Hutzler

Pierce,

Fenner

&

Beane

and

Salomon

(jointly); Lehman Brothers; Union Se¬
curities Corp. and Kidder, Peabody & Co. (jointly). Bids
—Tentatively expected to be received in May.
1
Columbia Gas
Jan.

18

tional

it

ferred

stock

common

bank
be

company

For

by

year.

is

considering addi¬
Underwriters—To be

competitive bidding.

Probable

bidders:

bonds

—
Halsey, Stuart & Co. Inc.; Morgan
(2) For stock — Merrill Lynch, Pierce,
Fenner & Beane, White Weld & Co., Shields & Co. and
R. W. Pressprich & Co. (jointly); Lehman Brothers and

Stanley & Co.

Union Securities Corp.

option of company, and $20,500,000 of
(par $100), the latter to be sold to parent.




construction.

new

Underwriter—To

bid¬

Probable

competitive bidding.

by

(1) For both issues, Kidder, Peabody & Co., White,
Weld & Co. and Shields & Co. (jointly); Stone & Web¬
Securities

ster

(2)

Corp.; Merrill Lynch, Pierce, Fenner &
& Co. Inc.;
Securities Corp.; Salomon Bros. & Hutzler.
For bonds only, Halsey, Stuart

Bids—Expected

March 16.

on

if Federal Electric Products Co.
Feb.

15 it

announced

was

company

is planning to issue

and sell about 150,000

additional shares of common stock.
Underwriters—H. M. Byllesby & Co. (Inc.) and Hayden,
Stone & Co.
Registration—Expected late this month. /
Federal
Jan. 28 it

Co. of

Loan

Pittsfield, Inc.

announced stockholders will

was

vote Feb. 23

Co., Inc. It is proposed to offer to the holders

of the 29,458 shares of

ticipating

preferred

cumulative
of class A

stock and one share
participating preferred
stockholders, $15 per unit; and to
unit. Underwriters—Simon, Strauss &

(jointly); Morgan Stanley & Co.

per

William

N.

3

a

it

Press, Inc. have
personally maintained and guaranteed the firm's high standards
quality. They are s'till available at all times to discuss your

PesidotuUcyecl S&uuce.

was

is

one

of the

reasons

"Printed by

complete printing

service available.

held.

fnc.

Established 192}

NY 1-3167

(Ore.)

(2/26)

>

Feb. 23

per

share.

Proceeds—To

in¬

surplus.
Underwriters — Merrill
Fenner & Beane and The First Bostoa
and

*'

N. J. (5/14)]
announced bank plans to offer for sub¬

First National
it

12

was

additional 3,000
basis of

Bank of Toms River,

1954, an
shares of capital stock (par $10) on the
share for each 26 shares held; rights to

expire

one new

on

Jan.

25

Price—$50 per share.

June 16.

capital and surplus.

Florida

Vess,
WOrth 4-2900

Price—$40

capital

increase

ST., HEW YORK 6

Bank of Portland

scription by its stockholders of record May 1,

Pandick" guarantees the finest and most

22 THAMES

Whiteside,

announced stockholders will vote

Lynch, Pierce,

Jan

-

Chace,

,Corp.

of

printing requirements.

and

proposal to issue and sell to stockholders of record
26 a total of 400,000 additional shares of capital
on
the basis of one new share for each three

crease

than 30 years the founders of Pandick

Inc.,

Fidelity Trust of America, Dallas, Tex.
22 it was announced that company plans to in¬
crease
its capitalization to $3,000,000, following which
a
registration statement will be filed with the SEC to
authorize a new offering.
There are presently author¬
ized 35,000 shares of no par value, of which 33,750 shares
will be outstanding following present offering and sale
of 30,000 shares of common stock at $10
per share.
Business—A discount and lending organization. Office—
Fidelity Bldg., Dallas, Tex.
Underwriter—May be Boylen, Kasper & Co., Dallas, Tex.

stock

more

Pope,

Inc.

Dec.

Feb.

For

preferred

stock for each

Price—To

public $15.50

Himme,

outstanding $1.20 cumulative par¬
one
share of new 77-cent

stock

convertible

common

share held.

First National

a

at

and for

loans

determined

ders:

Louisiana Pipe Line Co.

stock

(3/16)

announced company

plans to issue and sell
15,000 shares of preferred stock (no par) and $5,000,000
first mortgage bonds due 1984.
Proceeds — To repay
was

West & Winslow,

System, Inc.

reported

financing early this

determined

(1)

was

16.

$130,000,000 pipe line, to be financed
through the issuance of $97,500,000 of first mortgage
bonds, $12,000,000 of interim notes convertible to pre¬

Electric Co.

Paso

ture Loan

Underwriters—To be determined by

petitive bidding.

subsidiary of American Natural Gas
Co., asked Federal Power Commission to authorize con¬
of

Conjointly).

Douglas Oil Co. of California- */>
Feb. 1 it was reported company plans to issue and sell
50,000 shares of convertible preferred stock (par $25).
Registration—Expected early this month.
Underwriter
—Shearson, Hammill & Co., New York and Los An¬
geles (Calif.)
•
• ,'

construction.

Nov. 10 company, a
struction

refund the

27 it was reported company plans to issue and sell
$9,000,000 to $10,000,000 first mortgage bonds, series F,
due 1984.
Proceeds—To repay bank loans and for new

Jan.

able Securities

Corp. and Drexel & Co. (jointly); Blyth
& Co. Inc. and Kidder, Peabody & Co.
(jointly); Morgan
Stanley & Co.; Lehman Brothers; The First Boston Corp.;
Harriman Ripley & Co., Inc.
Bids — Scheduled to be

may

.

shares

plans issuance
sale of $17,000,000 first mortgage bonds due 1984.
company

Co.

announced the company

increasing the authorized class A common stock from
250,400 shares to 550,400 shares and the authorized con¬
vertible preferred stock from 100,000 shares to 250,000
shares and on changing name of corporation to Signa¬

(3/16)

announced

Edison
was

$40,000,000 outstanding issue of 3%% general and re¬
funding mortgage bonds due May 1, 1988/ which were
offered publicly on April 29, 1953.
Underwriter—May
be determined by competitive bidding.
Probable bid¬

i

Power Co.

it

on

>

Prospective Offerings
Alabama

and

issuance

March 24.

on

•

plans

Corp.; White, Weld & Co.; Lehman Brothers; Harriman

Equitable

*

reported

was

(3/24)

company

shares of cumulative preferred stock (par
$100).
Proceeds — For construction program.
Under¬
writer—To be determined by competitive bidding. Prob¬
able bidders:
Union Securities Corp.; The First Boston

Beane;
-Central Maine Power
Oct.

announced

was

sale of 70,000

Feb.

-Jan.

it

Feb. 4 it

Illinois Electric & Gas Co.

bidding.

petitive

if Dallas Power & Light Co.

El

Dec.

Stuart & Co. Inc.; White,
Jackson & Curtis (joint¬

will

23

Proceeds —For

Central

Halsey,

bidders:

ly); Morgan Stanley & Co. and The First Boston Corp.
(jointly).
Offering—Tentatively expected in May.

Co.

program.

(jointly).

Feb.

on

for further possible financ¬
expansion, etc.
Underwriters —
Harriman Ripley & Co. Inc. and Hemphill & Noyes &

ing.

sell around the middle of 1954

Underwriter—To be determined by competi¬
Probable bidders: Blyth. & Co., Inc.; Kidder,
Peabody & Co. and Merrill Lynch, Pierce, Fenner &
Beanc(jointly); Lehman Brothers; The First Boston

apply these proceeds for construction. Under¬
To be determined by competitive bidding.

—

Coffin & Burr, Inc. and Spencer, Trask &

announced

was

800,000 shares

if llfcah Power & Light Co. (5/19)
Feb.' 16 filed $15,000,000 of first mortgage

plans to

company

(par $10)
from 1,600,000 shares to 5,000,000 shares and the author¬
ized preferred stock (par $50) from 181,855 shares to

Underwriter—Thomas & McKinnon,

and sell

Ripley & Co. Inc. and Kidder, Peabody & Co. (jointly).
Registration — Planned for Feb. 25. / Bids — Expected '

announced

was

writers

Probable

der:

if Utah Power & Light Co. (3/23)
Feb/'l6 filed 200,000 shares of common stock (no par).
Proceeds—To' repay
bank loans/ and for J construction -

Weld

company

Carrier Corp.

New York.

to

announced

was

it

15

Feb.

if IkAirlines, Inc., New York
Feb. 12 (letter of notification) 19,000 shares of common
stotik (par five cents).
Price—At market (estimated to
be about 10 cents par share).
Proceeds—To W. B. Hag-

1984.

it

10

Brothers; Kuhn, Loeb & Co. and A. C. Allyn & Co.
(jointly); White, Weld & Co.; Harriman Ripley &
Co. Inc.
Offering—Tentatively expected in June.

Un¬

tive bidding.

Gas Co.

reported company plans to issue

was

$25,00,000 of debentures due 1979.
Proceeds —To pur¬
chase stock of company's operating subsidiaries, who in

Feb.

Corp.

Inc.

derwriter—None.

gerty, Tampa, Fla.

Oil

Chica

man

I.

of 4% preferred stock, series

$100) and 489,171 shares of common stock (par
50 cents) to be offered to holders of the 978,342 shares
of common stock of American Woolen Co. on the basis of
one-fifth of a share of preferred and one-half share of
common stock for each American Woolen common share.
The offer will

by

issue and
sell about $15,000,000 of first mortgage bonds due 1984.
Proceeds—For construction program.
Underwriters—To
be determined by competitive bidding. Probable bidders:
Halsey, Stuart & Co. Inc.; The First Boston Corp.; Leh¬

(liar

B

determined

if Boston Edison Co.

St., Boston, Mass.

Textron Incorporated, Providence, R.

m

be

plans to offer to its
stockholders the right to subscribe for 77,855 additional
shares of capital stock (par $1) on the basis of one new
share for each seven shares held.
Price—$3.75 per share.
Proceeds—For working capital.

due March

for

To

Jan. 27 it

Weld & Co. and Paine, Webber,

Feb.

Co.

filed $4,000,000

29

Equitable Securities Corp.; Blyth &

Inc.;

Co., Inc

turn will

if Bolsa

pected to be received up to 11 a.m.
at 90 Broad St., New York, N. Y.
Suburban Electric

—

Co.

properties. Underwriters—To be determined by com¬
petitive' bidding. Probable bidders: Halsey, Stuart &
Co. Inch The First Boston Corp.; Blyth & Co., Inc. and

Jan.

Co.

&

Stuart

(jointly); Blyth & Co., Inc., Equitable Securities
Corp. and Central Republic Co. Inc. (jointly); Merrill
Lynch, Pierce, Fenner & Beane and Union Securities
Corp. (jointly).

loans

to

Kidder/Peabody & Co. (jointly).

bank loans and for new construction. Underwriters
bond financing was done through private
channels. Bidders if competitive, may include: Halsey,

pay

—Previous

bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; The First Boston Corp.; Lehman Brothers,
Stone & Webster Securities Corp. and White, Weld &
competitive

$20,000,000 of first mortgage pipe line sink¬

ing fund bonds due 1974. Proceeds—To repay bank
and to reimburse treasury for additions already

Underwriters

1984.

due

plans to issue and sell in the latter part of March $3,000,000 of first mortgage bonds due 1984.
Proceeds—To re¬

Consolidated Natural

issue of about $7,500,000 first mortgage

an

Thursday, February 18, 1954

L. Bo wen, President, announced that company

Jan. 5, R.

Light Co.

reported company plans to sell, probably

was

August,

bonds

(3/1)

Co.

Southern Natural Gas
Jan. 25 filed

construction

Proceeds—For

..

Community Public Service Co.

(4/27)

reported company plans to issue and sell

(par $100).
program.
Underwriters—
To
be determined by
competitive bidding.
Probable
bidders: Blyth & Co., Inc.; The First Boston Corp. and
W.
C.
Langley
& Co.
(jointly); Lehman Brothers,
Equitable Securities Corp. and White, Weld & Co.
(jointly). Bids—Expected April 27.

an

California Edison Co.

Southern

was

70,000 shares of cumulative preferred stock

oversubscription privilege);
rights >to exoire on March 3. Price—$14.75 per share.
Proceeds—For new construction,
etc.
Underwriter—
Kidder, Peabody & Co., New York City.
(with

held

shares

10

8 it

.

it

Power
was

Proceeds—To

Underwriter—None.

& Light Co.

reported

issue and sell about

company

later this year

may

$15,000,000 of first mortgage

Underwriters—To be determined by competitive

71 CLINTON

ST., NEWARK, N. J.

MArkel 3-4994

Probable bidders: Halsey,

bonds.

bidding.

Stuart & Co. Inc.; White,

Weld

Co.; Lehman Brothers; Merrill Lynch, Pierce. Fenner
& Beane; Glore. Forgan & Co. and Harriman Ripley 8c
&

Co. Inc.

(jointly).

'

Number 5300

Volume 179

Public

General

The Commercial and Financial Chronicle

...

Utilities

writers—To

Corp.

16 it

basis of

announced company plans to offer

was

share for each 15 shares held.

new

one

determined just prior to the offering date.
ceeds—To be invested in the domestic subsidiaries.

but Merrill Lynch, Pierce,

Beane may act as

Pro¬
Un¬

clearing agent.

Fenner &

increasing

authorized

stock

common

from

6,000,000

50% stock dividend on May 15 to
holders of record April 22 and to offer some additional
stock.

Underwriters—Paine, Webber, Jackson & Curtis;
Corp.; and Mitchum, Tully
& Company.
& Webster Securities

(4/6)

was reported company plans issuance and sale
$11,000,000 first mortgage bonds due 1984. Proceeds
—To repay bank loans and for construction program.
Underwriters—To be determined by competitive bid¬
ding. Probable bidders: Halsey, Stuart & Co. Inc.; Blyth
& Co., Salomon Bros. & Hutzler and Shields & Co.

(jointly); Harriman Ripley & Co., Inc.; Union Securities
Corp. and Equitable Securities Corp. (jointly); The First
Boston Corp.; Lehman Brothers; Morgan Stanley & Co.
Registration—Planned for March

(EST)

a.m.

it Goebel Brewing Co.
Feb.

9

it

10.

Bids—Expected to

April 6.

on

(3/16)

announced

,

plans to offer to its
common stockholders 200,000 shares of 60-cent cumula¬
tive convertible preferred stock (par $10) on a l-for-7
basis.

was

company

Underwriters —Van

Alstyne, Noel & Co., New
McFawn & Co., Detroit, Mich.

York, and Nauman,
Registration—Expected about Feb. 24.

-it Gulf-Insurance Co., Dallas, Texas (4/12)
Feb. 15, T. R.
Mansfield, President, announced that com¬
pany plans to offer to its stockholders of record April 12
the right to subscribe for 5,000 additional shares of
cap¬
ital stock

(par $10) on

ceeding $55

basis.

pro rata

a

share.

per

and surplus.

Proceeds

—

Price—Not

To

increase

ex¬

capital

Underwriters—None.

Illinois Central

RR.

(2/18)

Bids will be received by the
company up to noon
on Feb. 18 for the
purchase from it of $6,000,000
ment trust certificates to be dated March

(CST)
equip¬

1, 1954 and to

mature

semi-annually from

Sept.

1,

1954

March

to

1,
Probable bidders: Halsey Stuart & Co.

1969, inclusive.

Inc.; Salomon Bros. & Hutzler; Kidder, Peabody & Co.;
Blair, Rollins & Co. Inc.
•

Indiana &

Jan. 27 it

announced

November, 1954,
bonds

gage

issue of about $16,500,000 first mort¬
1984 and 40,000 shares of cumulative

due

(par $100).

Underwriter

termined by competitive bidding.
For bonds—Halsey, Stuart & Co.

—

To

be de¬

Probable bidders: (1)
Inc.; Union Securities

Corp., Goldman, Sachs & Co. and White, Weld & Co.
(jointly); The First Boston Corp.; Harriman Ripley &
Co. Inc.; Kuhn, Loeb & Co.; (2) for preferred—The First
Boston

Corp.; Smith, Barney & Co.; Lehman Brothers;
Unipn Securities Corp.
*

Industrial

Trust

Co.

of

Philadelphia

was announced company plans to issue and sell
11,223 additional shares of capital stock (par $5) being
offered for subscription by stockholders on the basis of

share

new

rights

expire

to

each

for

20

shares

March

held

as

of

2.

Price—$7.50
Proceeds—To increase capital and surplus.
on

Jan.

per

22;
share.

23

it

offer to its

April,

&

1954, may

additional

some

Underwriter—Courts

com-

Co., Atlanta, Ga.

16

Issue

it

and

reported

was

%)onds due 1984.
Underwriters

company tentatively plans to
about $6,000,000 first mortgage
Proceeds
For construction progFam.

in

sell

1954

Merrill

and

be

determined

Lynch, Pierce,

The First Boston

Kansas
Jan.
ssell

13

it

Corn.:

Fenner &

Lehman

Beane

(jointly);

ceeds—To

28

it

announced

1954

that company may issue and
first mortgage bonds. Pro¬

bank loans and

for

new

construction.

March

«and The First Boston Corp.
rand Shields & Co. (jointly);

(jointly); White, Weld & Co.
Harriman Ripley & Co., Inc.;

^Equitable Securities Corp.

the

16

New

Co.

debentures, bonds, preferred
before

June

be

15,

Lehman

1954.

or

Financing in
common

stock

Underwriters—For

Brothers

and

Merrill

"Lynch, Pierce, Fenner & Beane. For bonds, if competi¬
tive, bidders may include Halsey, Stuart & Co. Inc.;
Lehman Brothers and Goldman, Sachs & Co.
(jointly);
The First Boston Corp.

-it Louisiana Power & Light Co.
Teb.

9

it

and

common

65,000
—

shares

Insurance

Co.

it

8

Public

•

(3/23)

announced company plans to issue and
70,000 shares of cumulative preferred stock (par
?$lno).
Proceeds —For construction program. • Under¬
was

;sell




construction

25.

it

16

that

reported

was

&

Bros.

program

Hutzler

Bids—Expected

(jointly).

March

(3/16)

29,; L/,

^

company

sell about $12,500,000 of first mortgage
Proceeds—For
construction
program.

issife 'and

m^y

bonds diM? 1984w
Underwiitfflrs-r-

To be determined by

competitive bidding. Probable bidrHalsey, Stuart & Co.-Tnc.; Equitable Seeujfitiei
Kidder, Peabody & Co., Merrill Lynch,: fierce,
Fenner & Beane, Union Securities Corp. and White,
Weld & Co.
(jointly); Harriman Ripley & Cor, Inc.;
Kuhn, Loeb & Co., Lehman Brothers, Drexel & Co. #nd
Salomon Bros. & Hutzler (jointly); The First'.Hoitou
Corp. Offering—Expected March 16.

ders:

Corp.;

Pittsburgh & West Virginia Ry.

(2/25)
unrt
plans to issue and sell
$7,500,000 of first mortgage bonds due March LoJ984.
Proceeds—To help refund $13,200,000 of mortgage, bqpdsi
which mature from 1958 through 1960.; Underwriters

Jan. 6

additional

it

To

able

reported

was

be

determined

bidders:

.

company

by competitive
Stuart & Co.

Halsey,

j^ftpb-

bidding,

Inc.; The First
Boston Corp.; Smith, Barney & Co.; Kidder, Peabojdy &
Co. and White, Weld & Co. (jointly).
Bids—Expired to
be received

on

'

Feb. 25.

^

.

Public Service Co. of Colorado

Oct. 13 it

reported

,

planning to float; an
first mortgage bonds, due 1984* learly
in 1954.
Proceeds
For financing, in part, a $17,000,000 electric generating plant to be constructed in Denver,
Colo.
Underwriters—To be determined by competitive
bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.;
Kuhn, Loeb & Co.; The First Boston Corp.; Harris,. Hall
& Co. Inc.; Harriman Ripley & Co., Inc. and
Unipn. Se¬
curities Corp. (jointly); Lehman Brothers; Kidder,,JPeaf
body & Co.; Blyth & Co., Inc. and Smith, Barney &'Cow
(jointly).
was

company is

issue of $15,000,000

—

Securities
>

Inc.

of first mortgage bonds due 1984 late this
Underwriters—To be determined by competitive
bidding. Probable bidders: Halsey, Stuart & Co. Inc.;

year.

Equitable Securities

Salomon

and

Pennsylvania Electric Co.

Dec.

reported company plans to offer for sale

was

Brothers

Registration—Feb.

(jointly); Merrill Lynch,

Service

Proceeds—For

bank loans.

repay

(3/16)

right to subscribe for 200,000

Orleans

''

White,

man

of

(now in regis¬

(jointly); Equitable Securities Corp.; Union

New

•

(3/29)

Inc.; Kuhn, Loeb & Co.; Blyth & Cq.„<Inc.
Weld & Co. (jointly); Kidder, Peabody &
Co.; Union Securities Corp.; Bear Stearns & Co.,-Leh¬

Raltleman,

Corp. and White, Weld & Co.
Pierce, Fenner & Beane.

j

.>•

-

Stuart & Co.

To retire bank

stock

'

due *1984/

to

and

bidding. Probable bidders: Halsey, Stuart
Kuhn, Loeb & Co. and Lehman Brothers

Inc.;

Harriman

Underwriters—To be deter¬
mined by competitive bidding. Probable bidders: Jfotlsey^

G

Corp.; Union Securities Corp. and
(jointly); Lehman Brothers;

Public

Service Electric

&

Gas Co.

'j

''

-

Jan.

Kidder, Peabody & Co. and Stone & Webster Securities
Corp. (jointly); The First Boston Corp.; White, Weld &

000,000 financing program is expected in the Spring.
The type of securities to be issued is still
undetermined,
but some form of debt financing is indicated.
Under¬
writers—For any bonds will be determined by

Co.

it New York State Electric & Gas Corp.
Feb. 3 company sought authority from the
P.

S.

New

of

value

to

preferred

issue

to

an

issue

of

$5,000,000

par

and

bonds.

Previous financing

was

Northern

States

Feb. 8 it

was

and

of

sale

stock

done pri¬

&

Riter

Jan. 7 it

some

by

time this year.

bidding. Probable bid¬
Halsey, Stuart & Co. Inc.; Lehman Brothers and
&
Co.
(jointly); Smith, Barney & Co.; Glore,

and

Union

Securities

Northern
Feb.

8

150,000

it

States

was

Power Co.

reported

plans to issue and sell
preferred stock (no par)

company

shares of cumulative

and

1,219,864 shares of common stock (par $5), the latter
first offered for subscription by common stock¬
holders on a l-for-10 basis (with an oversubscription
to

be

issue

to

year

repay

a

,

letter of

value of :up to

aggregate

—

company

new

to

plans

securities.

redeem

Merrill

this

convertible preferred

Lynch,

Pierce, Fenner &

it St. Louis, Brownsville & Mexico Ry.
,

later

Proceeds^-Ta

\

Beane, New York.

(3/3)*

m

Bids will be received by the company on March 3' for
the purchase from it of $1,845,000 equipment trust cer¬
tificates, series FF. Probable bidders: Halsey, Stuart &
Co. Inc.; Salomon Bros. & Hutzler; Kidder, Peabody &
Co.; Blair, Rollins & Co. Inc.
1
-

Electric Co. (3/30)
company plans to issue ^nd
$17,000,000 of first mortgage bonds, series E, due

San Diego Gas &

Barney & Co. (2) For common stock—Lehman
Brothers and Riter & Co. (jointly); The First Boston

struction.

Smith, Barney & Co.; White, Weld & Co. and Glore,

and

Underwriter

Jan.

Corp., Kuhn, Loeb & Co. and Blyth & Co., Inc. (jointly);

sell

and

bank loans

stock.

privilege). Underwriters—To be determined by com¬
petitive bidding. Probable bidders: (1) For preferred
stock—Lehman
Brothers and Riter & Co.
(jointly);
Smith,

an

Safeway Stores, Inc.
8 it was reported that

Corp.

(Minn.)

issue

to

Feb.

Forgan & Co.; Merrill Lynch. Pierce, Fenner & Beane,
Kidder, Peabody & Co. and White, Weld & Co. (jointly);

Corp.

"j',.

reported company plans to file

soon

$300,000 of new securities. Underwriter—Eisele & King,
Libaire, Stout & Co., New York.

Underwriters—To

competitive

Equitable Securities

Airlines, Inc.

was

notification

approximately $20,000,000 of first mortgage
1984

was handled by a
group headed by Morgan Stanley
Co., Drexel & Co. and Glore, Forgan & Co.

Riddle

(Minn.)

reported company is planning the issuance

determined

ders:

Power Co.

$50,-

a

competi¬
bidding.
Probablh bidders:
Halsey, Stuart & Co.
Inc.; Morgan Stanley & Co. and Drexel & Co. (jointly);
Kuhn, Loeb & Co. and Lehman Brothers (jointly);,.The
First Boston Corp.
Previous public offering of common

stock early this spring.
It is also
sell in the spring $20,000,000 of

planned

sell

27, G. H. Blake, President, announced that

tive

York

Commission

(jointly); Kuhn, Loeb & Co., A. C. Allyn & Co. Inc. and
Wertheim & Co. (jointly).

^$10,000,000 of non-convertible debentures.

may

plans to issue and

Proceeds—To repay bank loans and for
construction.
Underwriters—To be determined by

Co.

Corp.;

was reported company has applied to FU P. C.
authority to issue and sell $8,000,000 first mortgage

bonds

company

bonds due 1984.

&

and

Feb. 15 it
for

Co.

issue and sale in

new

Boston

,,

Jersey Power & Light Co.
it was reported this company tentatively plans
1954 of about $3,000,000 first mortgage

16

issue

Underwriters—To be determined by com¬
Probable bidders: Lehman Brothers;

.

share. Proceeds—To increase capital and sur¬
Underwriter—The First Boston Corp., New York.

Dec.

to

bidding.

April 14.

per

plus.

;

plans

company

it Pacific Power & Light Co.

—

$30

(4/14)

announced

was

Ripley & Co.," IncVvand
(jointly). BidS-p-Tentatively expected to be received up to 11 a.m. (E^) on.

shares of capital stock (par $5) onthe basis of one new
share for each two shares held. Price—Expected to be

•Jan. 28 stockholders approved issuance of not to exceed

expected

First

March 3 for

President,.- announced that
plans to issue to stockholders of record about

bonds due

bidders:

^debentures,

Fire

(jointly); Harriman Ripley &
(jointly).
up to ll am,
dmn:

Stone & Webster Securities Corp.

on

(jointly); White, Weld & Co.; Harriman Ripley & Co.

company

due
con¬

Kuhn, Loeb & Co., A. C. Allyn & Co. Inc; and sCcrffin
& Burr, Inc. (jointly); Blyth & Co.,
Inc.; UnioriiSecu¬
rities Corp. and Salomon Bros. & Hutzler
(jointly):.The

determined

A.

it

construction.

common

Union

8

petitive

Inc.

W.

and

bonds

kell 50,000 shares of cumulative preferred
stockr (par
$100).
Proceeds—To repay bank loans and for; - new

by
competitive bidding.
Halsey, Stuart & Co. Inc.; The First
Boston Corp.; Kuhn, Loeb & Co. and Wertheim & Co.

be

determined by competitive bidding,
Halsey, Stuart & Co. Inc.; Lehman
Brothers and Bear, Stearns & Co.
(jointly); Kuhn, Loeb
Co., Salomon Bros. & Hutzler and Union Securities
Corp. (jointly); Glore. Forgan & Co.; Blyth & Co., Inc.

of

it Ohio Power Co.

bidders:

14,

issue

to

mortgage

Co. Inc. and Stone & Webster Securities
Corp.

it National Fuel Gas Co.
Feb. 9 it was reported company plans additional financ¬
ing in the next few weeks. Underwriters—For any de¬

Underwriters—To be

is

Service

Underwriter—For

be

first

Bids—Tentatively expected to be received
(EST) on April 14.
'

tration): Kidder, Peabody & Co.

to

plans

company

$20,000,000

Salomon Bros. & Hutzler

(3/3)

$2,500,000 of debentures and
preferred stock (par $100).
Proceeds

probable

zfform

issue and

vately.

additional

repay

Laclede Gas

may

Proceeds—To retire

bonds,

bentures

•

by* com¬
bidding. Probable bidders: Halsey, Stuart &
Inc.; The First Boston Corp.; Blyth &/;Qo.," Inc.;
Kuhn, Loeb & Co., A. C. Allyn & Co., Inc. and Coffin
&
Burr, Inc. (jointly); Union Securities Corp. and

Kansas City, Mo., at a total cost of $32,000,000. Follow¬
ing consummation of proposed merger of the two com¬
panies, it is planned to sell $9,000,000 of first mortgage

Probable

of

Proceeds—To repay bank loans and for hew"
struction.
Underwriters—To be determined

stock and borrow $18,000,000
from banks in connection with proposed acquisition of
1,500,000 shares of common stock of Gas Service Co. of

loans.

announced

was

-

Co.

by the company

announced

was

$14,000,000 of

first mortgage

Brothers.

City Power & Light Co.
was

later in

Dec.
sell

Public

it

issue

an

<»i:

(4/14)

1984.

—

To

by competitive bid¬
ding, Probable bidders: Halsey, Stuart & Co. Inc.; White,
"Weld & Co.; Glore, Forgan & Co.;
Kidder, Peabody &
Co.; Union Securities Corp., Salomon Bros. & Hutzler
—

27

sell

purchase from it of $3,000,000 equipment trust cer¬
tificates, series XX. Probable bidders: Halsey, Stuart &
Co. Inc.; Salomon Bros. & Hutzler; Kidder, Peabody &
Co.; Blair, Rollins & Co. Inc.
Missouri

expected to >

Harriman Ripley & Co. Inc.

Jersey Central Power & Light Co.
Dec.

Jan.

$6,000,000

in

company

stockholders

common

stock.

*non

reported

was

received

be

Bids—Tentatively

'«■■

Ohio Power Co.

the
•

Feb.

Inter-Mountain Telephone Co.
Dec.

Bids will

(jointly).

received in April.

*
.

.

reported that the company

was

competitive

Jan. 13 it

one

-

49

petitive

it Missouri Pacific RR.

Jan.

plans to sell around

company

an

preferred stock

...

issue of bonds late in 1954.

an

National

Michigan Electric Co.

was

be

Metropolitan Edison Co.
Dec. 16 it was reported company may sell in 1954 about
$3,500,000 first mortgage bonds due 1984. Proceeds—For
construction program.
Underwriters—To be determined
by competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; White, Weld & Co.; Kidder, Peabody & Co.
and Drexel & Co. (jointly); Kuhn, Loeb & Co. and Salo¬
mon Bros. & Hutzler (jointly).

of

be received up to 11

Forgan & Co.

Feb.

Dec. 15 it

;

bidding.

$24,610,000 Atlanta, Kmoxville & Cincinnati Division 4%
bonds due May 1, 1955, and for general corporate pur¬
poses. Underwriters—May be determined by competitive
bidding. Probable bidders: Halsey, Stuart & Co. Inc.;
Morgan Stanley & Co.; White, Weld & Co. and Salomon
Bros. & Hutzler (jointly). ,

It is proposed to pay a

Georgia Power Co.

March 23.

on

Nov. 12 it

sell

shares (3,342,300 shares outstanding) to 10,000,000 shares.

Stone

competitive

Louisville & Nashville RR.

announced stockholders will vote April 21

was

The

and

(EST)

it General Telephone Corp.
Feb. 8 it
on

by

Blyth & Co., Inc.; W. C. Langley &
First
Boston Corp.
(jointly); Lehman

Brothers; Kuhn, Loeb & Co.; Union Securities Corp.;
Equitable Securities Corp.; Kidder, Peabody & Co. and
Merrill Lynch, Pierce, Fenner & Beane (jointly). Regis¬
tration—Planned for Feb. 25. Bids—Expected up to noon

Price—

To be

derwriter—None,

Co.

determined

be

bidders:

Probable

about
600,000 additional shares of common stock (par $5) to
stockholders in March or April, 1954 — probably on the
Dec.

(817)

sell
1984.

26, it was announced

Proceeds—To repay bank loans and for new

petitive

Underwriters

bidding.

—

Probable

con¬

To be determined by com¬

bidders:

Halsey, Stuart St

Continued

on

page

5Q

.

50

The Commercial and Financial Chronicle

(818)

Continued, from page

be voted

49

it Sutton

Canada, Ltd.

Sheraton

.

Jan. 27 it

stockholders

stock

mon

on

Business—Air

company

one

new

$3,300,-

^

reported sale of about $5,000,000 of

was

construction.

West
Feb.

Underwriters—To be de¬

March

noon

(EST)

&

(from it of $1,-

Co.

White, Weld

Harriman

years.

Jan.
sell

27

it

Electric Co.

Jan.

announced company plans to* issue and
$8,000,000 of first mortgage bonds due 1984. Pro¬
was

ceeds—For

construction.

new

merge

construction of
the

Alberta

Pipe Lines, Ltd.

Hutzler; The First Boston Corp.; Equitable Se¬
curities Corp.; White," Weld & Co. and Shields & Co.
(jointly); Blair, Rollins & Co. Inc.
Registration —
Planned for March 5. Bids—Tentatively expected on
April 13.

to

Toronto,

Ottawa

Brothers;

Wood,

Southwestern

ceive

was

Trip-Charge,

Development Co.

Gundy & Co.

Inc., Pittsburgh,

announced

was

Merrill

is increasing its

company

Corp. will

Fifth Avenue at

re¬

769,722 shares of Pioneer Natural Gas Co. stock

surprised

the

at

do

to

much

'

■...

longer

until

ma¬

the

die

plans they
after

calendar

Strong intimations that the Fed¬
eral

Treasury will be in the mar¬
with a
long-term issue,
probably
the
middle
of
next
month, have served to take the
edge off the rising trend in the

y

likely
As
have

rediscount
Federal

night

rate

a

in

has been

ago,

cut in the

throughout the
System a fort¬

Reserve

upward

in

trend. for

grade issues down sharply,

so

ruptly in fact, that there is

a gen¬

ab¬

eral feeling that some of the rela¬

tively high-coupon bonds of rela¬
of

refunding

spring

as

approaches.
appear that

level

current

of
gild-edge
require a little

will

seasoning
regarded

before

the

ready for

as

now

are

tractive

Guesses

some

is

of the

more

op¬

market

conjec¬

run

largely to the idea
25-year or 30-year bond, for
billion

with

a

or

have

sounded

tional investors

rate

of

3

or

out

institu¬

thoroughly before

making its final decision.

Right

fact

issues

new

has

been

an

it

is

indicated

that

anticipation

of

a

them.

and

ries

now

by

growth of

Co.

The issue

the

the

tremendous

gas

operations

straight gas utilities,

includ¬

ing pipeline operators, set
pace

in

new

a

last year and bid fair to maintain
it this year.
This

industry raised

gate of just
1953

000

in

pite

over

compared

with

the preceding

able

were

dip

aggre¬

to

$909,000,-

period. And
increase

of equity

slight

a

an

billion dollars

a

capital

in

the

the

des¬

amount

of preferred stock sold from
$93,-

000,000 to

$91,000,000.

They marketed a total of $160,000,000 in junior equities con¬
trasted

with $64,000,000 the year
and
sold
$179,000,000 of

before

debentures
1952.
is

against $71,000,000

Fixed debt

mortgages,

footed

up

in

the

to $573,000,000

$343,000,000.

in

obligations, that

sold

was

bid of 100.54 for

a

the Street would not




F.

against

"

mature

Dec.

reoffered

Francis

I.

du

in¬

a

1,

at

101.09

subscription.

Proceeds

Underwriter—May
bidding.

Probable

be

be
—

shares held.

available
For

determined

bidders:

HILLS,
is
&

to

em¬

construction

Blyth

&

by

com¬

Co., Inc.;

Lynch, Pierce, Fenner & Beane; Lehman Broth¬
Peabody

&

Co.;

The

First Boston

Corp.;

11

Calif.—
now

with

Co.,

9640

Santa Monica Boulevard.

of

it

was

new

reported company may do about $23,000,-

financing.

Underwriters—The First

Boston

yield

3.07% to maturity.
Pacific Gas and Electric will

We See It
politicians than from the
major party.
profess to know whether the Republican

thought of gain from it were it not for certain circum¬
stances of the past for which the
opposing political party
was
chiefly responsible.

accrued

and

use

Why It is Possible

the proceeds from the financing to

meet, in part, the cost of current

Without

amount

spent

the

by

on

West

there could be no real problem of McCarthyism
today. Senator Jenner's sensational charges about our
part in the Korean mess would hardly be made, or if
ated,

addi¬

new

Coast

utility

Oct.

,

$1,022,984,000. As of
1953, the company held

31,

Certificates of

tize

for

Necessity to

income

tax

made would

amor¬

purposes

tion

Pacific Gas

costs.

and

tric

supplies electric and

ice

in

northern and

or

an

fornia.

Of

operating
for

$361,100,000

the

from

business.

the

For

If

been

of

quirements
company

was

while

generated by the
than 99% of

natural gas requirements was pur¬

chased.

Gross income for the pe¬

riod amounted to
The

company

shares of its

$77,417,000.
expects

common

to

offer

stock in

change for the outstanding

ex¬

and

com¬

preferred stocks of Pa¬

cific Public Service Co., subject to

approval of regulatory authorities.

the

ice

exchange, Pacific Public Serv¬
and

its

subsidiary

will

be

merged into Pacific Gas & Electric.

so

of

the years.
the

Fair

Deal

managers

obviously indifferent to all that has
as

had not

now

been

then

for Senator

same

more

over

attitude

going orj, and if the record now did not
show that incredible
negilgence about it all was the rule
during the Truman Administration, it would be difficult

gas

period,
approximately 85 % of electric re¬

the

established

months

company's

the

hardly be taken seriously, had not our policy,
policy, with regard to that peninsula been so

almost incredible

Cali¬

revenues

12

of

Elec¬

ended Oct. 31, 1953, 70% was de¬
rived from electric sales and the
balance

lack

gas serv¬

central

Hiss and

White and Fuchs and the others,
together with the lack of any apparent concern on the
part of the regimes during which these individuals oper¬

construction which is estimated at

$340,000,000 for the years 1954 and
1955. This expenditure will boost

Upon approval and completion of

Pont

for

stock

common

seven

even the individuals engaging in this type of
campaigning — will gain from the extreme statements
they are now so fond of making, although we should hope
not. However, we are convinced that there could be no

bonds, which
1984, are being

interest from Dec. 1, 1953, to

mon

Osterweil

Feb.

We do not

The

rate.

(Special to The Financial Chronicle)

BEVERLY

share for each

to

middle

party—or

awarded to the

year

With F. I. du Pont Co.

Bruce

new

offer

the

members of the other

fast estimated $113,000,000 of construc¬

requirements

money

one

to

it York Corp.

As

competitive sale Tuesday

group at

tions

Field

natural

expects

probably around

from the throats of Democratic

refunding mortgage bonds, se¬
W, of Pacific Gas & Electric

the

Fertile

two billion dol¬

coupon

3Ya%. Belief is that the Treasury
will

to

proportion

naturally
revolves
around what the Treasury
might
be expected to
attempt in the way
of fixing the maturity and the rate
for a long-term bond issue.

a

in¬

Treasury offering that will be at¬

they

quite

either

the

light through the past

in

bond

talking.

At the moment

lars,

in

in pushing the second¬
market steadily ahead.

more

market

refundings of which the

a

considered

so

fact which

sumably

in

However, it would

of

current

insurance companies are allowing
their resources to build up, pre¬

recent vintage may be the

objects

ture

Pacific G. & E. Bonds

terest

a

company

Continued from first page

Blyth & Co., Inc. heads an in¬
vestment
banking group which
publicly offered yesterday (Feb.
17) a new issue of $60,000,000 first

on

been

Office—

since 1948 to

effect has been

to bring the average yield for top-

timistic

The
and

matter of

a

Spurred

The cumulative

yields

thin

Meantime

months.

tively

have in mind until

remain

strong
three

a

some

any

influence

The

which culminated

to

month

ary

high-grade corporate mar¬
ket, taking its cue from progres¬
sive easing in basic money rates

is

defer

terval.

ket

secondary bond market.

may

to

mid-March.

April 20.

Kuhn, Loeb & Co. and A. C. Allyn & Co. Inc.

Meeting—

•'

expected

reported

stockholders,

Kidder,

ers;
cap¬

Proceeds

Blyth Group Offer

is

'

Prospective corporate borrowers
now

on

mar¬

Making Ready

are

& Co.;

Corp. and Kidder, Peabody & Co., of New York.

does not expect the seasoned
ket

Hal¬

Scheduled

000

turity and the higher rate. But it

cast,

Loeb
—

thorized capital stock.

plan of distribution of Southwestern's assets to

be

kuhn,

Registration

Stockholders will vote Feb. 23 'on doubling present au¬

ji

under

Hamilton, Pittsburgh 6, Pa.

(jointly);

limited number of shares would

program.

Pa.

—For expansion program and working capital.

announced that Sinclair Oil

A

petitive

Jan. 20 it

Co.

March, 316,867 additional shares of its

ployees

Inc.

°

&

Bids—Tentatively expected

was

in the ratio of

Montreal.

and

it

11

common

of

2,240 mile natural gas pipe line from

a

fields

ital stock in contemplation of an underwriting.

Jan. 18 it

its

preliminary to the financing and

Underwriters—Lehman

&

I

reported this company and Western Pipe

was

Lines, Ltd. will

Underwriters—To be de¬

termined by
competitive bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; Smith, Barney & Co.; Kidder,
Peabody & Co.; Carl M. Loeb, Rhoades & Co.; Salomon
Bros.

11 it

Probable bidders:

it Wisconsin Public Service Corp.

Inc.

Trans-Canada

(4/13)

'*

(4/20)

Ripley & Co. Inc.

for March 26.

bidders: Halsey, Stuart & Co. Inc.; Salomon
Hutzler; Kidder, Peabody & Co.; Blair, Rollins

Feb.

&

Gas

Co.

Stuart & Co. Inc.; The First Boston Corp.; Lehman

and

Probable

5.

Power

was

Brothers; W. C. Langley & Co.; Kidder, Peabody & Co.
to

240,000 equipment trust certificates due in l-to-10
&

Penn

it

1

mined by competitive bidding.

(3/24)

Bids will be received by the
company up
on or
about March 24 for the purchase

Bros.

long-term debentures and 4,100,000 shares of
to be sold to the public.
Proceeds-i-To
a natural gas pipe line from, the

Proceeds—For construction program of West Penn Power
Co. and its subsidiaries.
Underwriters—To be deter¬

sey,

share for each seven

plans to

now

reported company plans to issue and sell
$12,000,000 of first mortgage bonds, series P, due 1984.

Pro¬

by competitive bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; Stone & Webster Securities
Corp. and White, Weld & Co. (jointly).

it Texas & Pacific Ry.

company

stock

common

termined

plans to offer to its

that

Canadian Peace River field to western
Washington and
Oregon. Underwriter—Eastman, Dillon $ Co., New York.

000,000 of first mortgage pipe line bonds in July.
new

announced

was

finance construction of

was reported company plans issuance and sale
of $20,000,000 of debentures in April or May and $25,-

ceeds—For

it

ordinated

selling

for

14

$71,000,000
bonds; and $24,440,000 in sub¬

is

stock

part

expire about
April 9. Proceeds—For construction costs. Underwriter—
Smith, Barney & Co., New York. Registration—Expected

Indiana

company

issue $29,000,000 in l-to-SV^-year serial notes;
in 20-year, first mortgage

pre-"

Jan. 27 it

shares held about March 24; with rights to

Southern

announced

was

West Coast Transmission Co.

(3/25)

Co.

Electric

it

authorized

Oct.

.v.' Tennessee Gas Transmission Co.

114,166 additional shares of com¬

basis of

a

&

Gas

announced

was

private.

or

March.

in

(3/15)

debentures (3% fixed and-3% contin¬
gent) with warrants attached. Proceeds—To repay loans
and for working capital. Underwriters—Paine, Webber,
Jackson & Curtis, Boston, Mass., and Hamlin &JL,unt,
Buffalo, N. Y. Meeting—Stockholders will vote March 3
on approving issue. Registration—Expected about Feb. 24.

common

either public

planned, partly for account of company
stockholders. Underwriters—Van
Alstyne, Noel & Co:,- New York. Registration—Expected
and

announced company plans to offer to its

Indiana

9 it

ferred

25-year 6%

Southern

year,

this

Feb.

intends to make an

stockholders the right to subscribe for an issue of
000

Kan.

reported company may do some financing

^ Temco Aircraft Corp.

$5,000,000.

of America

Corp.

was

Wichita,

Corp.,

6'

California P. U. Commission
to issue 20,000 shares of com¬
mon
stock (par $25).
Proceeds—To repay bank loans
and for construction program.
Underwriter
Blyth &
Co., Inc., San Francisco, Calif.
\
has

—

was

later

offering of its common shares in the United

States to realize at least

Jan. 21 it

A.)

Thursday, February 18, 1954

it West Coast Telephone Co.
Feb.

circulating equipment, etc.

29 it was announced company

initial public

(O.

Feb. 15 it

March 30.

Scudder Fund of
Jan

Securities

in Colorado Interstate' Gas Co.

First Boston Corp.j_Kuhn,
& Hutzler; White, Weld &
Co., and Shields & Co.
(jointly); Lehman Brothers;
Union Securities Corp.; Merrill Lynch, Pierce, Fenner
& Beane. Bids—Expected to be received up to 11 a.m.
on

Underwriter—Union

Corp., New York, underwrote sale of Sinclair's holdings

Co.; Blyth & Co., Inc.; The
Loeb & Co.; Salomon Bros.

(EST)

Feb. 15.

upon

...

,

McCarthy to convince the public, or any very
substantial portion of it, that he is finding a Kremlin spy
or

an

American traitor behind every

Democratic bush. If
philosophy of the New Deal had not been so
revolutionary, so utterly at variance with American tradi¬
the basic

tion,

so defiant of what had theretofore been held politi¬
cally and socially almost sacred in this country, so con¬
temptuous of practically everything then and thereto¬
fore held by most Americans as inviolable—if such had not

been the intrinsic nature of the Roosevelt

philosophy and
suspicions
many could

later the Truman attitude, then the thousand
of disloyalty now flourishing in the minds of
have had
A

no

root.

similar

history is easily traced for many of the
coming from the throats of the Democratic
minority. A system of mammoth subsidies to farmers has
strictures

now

all but wrecked the basic structure of

agriculture in this

Volume 179

Number 5300k

.

The Commercial and Financial Chronicle

.

(819)

country while laying a heavy burden of cost upon the
entirp community. The Eisenhower Administration has
^been trying to do a little something about it—not nearly
;

]as much

! minor

should be done, but at least some measure of

as

improvement.

What

is

the

With

According to
♦Democratic politicians, the Administration is "sticking a
pitchfork in the back of the farmer," or something more

of

less

this

to

The

Financial

Seventh

&

Co.,

Street.

dividend

Wis.,

of

February

$1.75

standing Preferred

15,

share

per

Stock

of

$12.50
to

value

par

has

pany

BOSTON, Mass. —Henry P.
King, Jr. has been added to the

NOTICES

been

holders

March

12,

Common

declared

of

record

the

the

out¬

Company

Stock

payable

at

TEXAS GULF SULPHUR C0MPANT

1954.

upon

this

declared payable April 1,
1954,
dend of 25c per share
upon
the

(Special to The Financial Chronicle)

Although the farmer has traditionally been a darling
of the politicians, only a
very few decades ago even a sug»gestion of any such largesse to the farmer as that innate
in even the Eisenhower plan would have been regarded
by the general public as utterly out of the question. The

Company

DIVIDEND

(Incorporated)
Racine,
A

been

F. S. Moseley Adds

effect.

NOTICES

J. I. Case

Chronicle)

Dempsey-Tegeler

West

210

;

"or

to

LOS ANGELES, Calif .—Karl W.
Lundberg has been added to the
staff

result?

DIVIDEND

Dempsey-Tegeler

(Special

51

of

and

divi¬

a

outstanding
this

April

close

has

of

Com¬

1, 1954,
business

The Board of Directors has declared
dend

of $1.00 per share and an

capital stock, payable March 15.
1954, to stockholders of record at th*cloM

pany's

of business

1954.

February 24, 1954.

E. F.
WM.

B.

diri-

a

additional

dividend of 25 cents per share on the Com- !

/

4

VANDERSTUCKEN, jr.,
Secretary.

PETERS, Secretary.

j
'

•

staff

of

New

York

F.

S.

Moseley &

Co., 50
Congress Street, members of the

JOHNS-MANVIILLI

Boston Stock Ex¬

and

-

;
-

i

.

•

than to his
and

even

whenever the

own resources

when it

going got rough—

other

of

was

principle

points in

may

be

in action at

many

midst. Were it not for the New Deal

our

teaching and the continuation of the

preachment by

same

the Fair Deal
social

more

should not have critics

we

"reform,"

screaming for

cedure

but

as

a

means

a

humanitarian pro¬

of

defending ourselves against a
always had with us the
demagogue who at election time shouts to high heaven
about the poor treatment the
ordinary man gets—in taxes
and other things. Yet prior to the New Deal we should
scarcely expect in peace time that anyone would come for¬
ward with a straight face and demand
greater rather than
possible depression.

.

as

less

our

now

;

DIVIDEND

dividend

A

have become rooted in the mind

area

of the

general public.
Certainly, prior to 1933

March

,

see

COMPANY

twenty-five

cents

solid foundation for defense

frequently the
•

Corporation,

payable

31, 1954, to stockholders
on

The stock transfer books will
E.

R.

:

'

against bad times

are

.

SOUTH AMERICAN GOLD

W. ATKINSON, Treasurer

61

Broadway, New York 6, N. Y.
February

February 15, 1954.

A

1954.

8,

quarterly dividend of ten (10c)

cents per share has been declared

LOEW'S INCORPORATED
MGM

PICTURES

THEATRES

•

The Board of Directors has declared
a

<fD®>

and

the Preferred

87'/j<

share

a

$3.50 Series,

—

1954,

to

close

of

$1.00

payable April
of

first

interim

March

the

9,
for

of

1954,

business

on

COMPANY

Corporation

as

Dividend No.

pay¬

On

1011

219th

16th, 1954 the Directors of
Mining Corporation declared a
regular dividend of 50c per share on the
.2,658,230 shares of its Capital Stock now
outstanding, payable March 15th, 1954 to

Feb¬

L, DUP. COPELAND, Secretary

#

February

Newmont

23, 1954.

ruary

rs

Newmont Mining

the

at

24, 1954.

GREENBURGH, Treasurer.

UNITED FRUIT

24,

Stock

the close of

Vice Pres. & Treasurer

1954; also

Common

dividend

close

JOHN G.

at

February

charles c. moskow1tz

13, 1954, to stockholders of

the

at

record

April

on

on

record

on

the Preferred Stock

stockholders

share

of

Stock—$4.50 Series

on

both

business

a

business

1954, to stockholders of record at the close of
busines- on March 12, 1954. Checks will be
mailed.

The Board of Directors has declared this day
regular quarterly dividends of $1,121/2 a
on

holders

dividend of 20c per share on the

outstanding Common Stock of the
Company, payable 011 Marth 31,

Wilmington, Del., February 15, 1954

share

payable March 12, 1954, to stock¬

MGM RECORDS

•

February 17, 1954

E. I. DU PONT DE NEMOURS & COMPANY

Consecutive

Quarterly^Dividend
A dividend of

stockholders of record at the close of business

March 1st, 1954.

New York, N. Y.,

T. SMITH, Treasurer

payable April 15, 1954, to stock¬
holders of record March 22,1954.

February 16th, 1954.

BRICCS & STRATTON

EMERY N. LEONARD.

The Board of Directors of

CORPORATION

seventy-five cents

share on the capital stock of
this Company has been declared

per

WILLIAM

Secretary and Treasurer

PITTSBURGH

Boston, Mass., February

15,1954

CONSOLIDATION

not in¬

fBRIGGS &STRATT0N)

COMPANY

COAL
at

meeting held today, declared a quar¬
terly dividend of 75 cents per share on the
Common Stock of the Company, payable on
March 12, 1954, to shareholders of record
at the close of business on February 26,

DIVIDEND

a

1954. Checks will be mailed.
Board

The

of

has

Directors

declared

a

Charles E. Beachley,

quarterly dividend of twenty-five cents (25c)
per

share and

cents

<15c)

(without

payable
record

share,

per

March

15,

February

of

the

1954,

February 15,1954.

REEVES BROTHERS, me

Corporation,

to stockholders

dividend

of

1954.

26,

L.

the capital stock

on

value)

Secretary-Treasurer

dividend of fifteen

extra

an

par

structive work.

a

G.

REGNER,

Secretary.

Wis.'

Milwaukee,
February

16,

March

1954

Public Service Electric

Continued from page 5

record

payable

12, 1954, to stockholders of
at

close

the

March 1, 1954. The

and Gas Company

Observations,..

notice

quarterly dividend of 30c per

share has been declared,

'

.

the close

& PLATINUM COMPANY

open.

February 12, 1954,-

BERGEN,

is

i

remain

Secretary.

most under attack by those who would

a depression.
evidently destined to be a "mud slinging"
campaign. It is likewise apparently certain to be one in
which many fictitious issues and much economic nonsense
are to figure
conspicuously. This is apparently the penalty
we have to pay for
following false gods in the past. We
can only hope
that it will not too greatly impede con-

at

Treasurer

have the Federal Government ward off
This

.

ones

payable March 1,1954

February 16, 1954.

Christian deDampierre

quarterly divi
dend of 50tf per share has
been declared on the Capital Stock of this
Company, payable March 16, 1954, to
stockholders of record February 26, 1954.

Government is

a

stock

stockholders of record

of business

COMPANY

"

•

dividend of 323^< per share on the

to

A regular

common

A.

a

doing nothing to prevent it—doing nothing,
that is, in the way of applying a hair of the
dog that did
the biting, assuming that the patient is actually suffering
from a serious malady or wound. And wonder of wonders,
the very policies of the Administration most
likely to lay

Kit-:

HACKNEY. Treasurer

LION OIL

3, 1954.

record

should not expect to

of

The Board of Directors has declared

77

outstanding

this

of

able

we

STAUFFER CHEMICAL;

Stock

a

of record at the close of business

minority party eager to get back into office attacking the party in power by predicting catastrophic
depression within months and asserting that the Federal

even

dividend

holders

common

No.

of

the

on

March

the
•

to

share has today been de¬

per

stock
on

5

Deal doctrines in this

a

Common

1954,

Corporation

tax structure than that which

exists. Yet such cries ring in our ears at a time when
apparently the Administration is doing what it can to bring
some
order and rationality into our
incredibly bad sys; terns of taxation. It remains to be seen how deeply New

j

II,

Commercial Solvents

We have

"progressiveness" in

March

DIVIDEND NOTICE

-

digent—real and imaginary^not

the

on

ROGER

liberal treatment of the iri-

more

share

record March I, 1954.

'

•

per

payable

(25c)

seen

75c

SINCE^^^IMS

DIVIDEND

PRODUCTS

NOTICES

«

-r^CHEM>CAI£v^

Corporation

The Board of Directors declared

clared
same

31

not

rough—and it at the same time
led the rank and file of the people of this
country to ac¬
cept without question this servility of the agrarian pro-,
ducer. If this were not true no such competition for the
vote of the farmer would be under
way now—and if it
were, it would hardly prove profitable for either party.

The

-

;

DIVIDEND

New Deal taught the farmer to look to Washington rather

Elsewhere, Too
•

changes.

illtW

Johns-Man ville

.

of the Company

business

of

transfer books

will not be closed.

J. E. REEVES, Treasurer

NEWARK. N. J.

AMERICAN

February 15, 1954.

EPT's extension was condoned—in contrast to Fair Deal
Secretary Snyder's prior firm advocacy of its termination.

tion,

the

Over-all,

Council backs the

Administration's

acceptance

ROBERTSHAW-FULTON

of the defensive against the broadside of charges of "too little and
too late" hurled from all gides, without any primary question¬

ing whatever of the actual wisdom of intervention.

Quite amaz¬
its pre-Election statement of principles, this
acting and talking on the major premise of
unbridled planning with inflation to combat troublesome (politi¬

ingly,

view of

in

Administration

cally)

deflation and recession.

Carrying
statement

in "The

on

made

National

the

PREFERRED

is

full blast under the banner of the
his

in

Bureau

Frontiers

1953

of

Annual

Report

Economic Research

to

Chairman's

the Directors

of

(republished Feb. 22

of Economic

Knowledge" by Arthur F. Burns,
University Press) "social control of business cycles
a political necessity, both domestically and interna¬
tionally," the Council is set for an economy with full planning

Princeton

Dividends of $1.02

DIVIDEND

The Board of Directors of Amer¬
ican
Cyanamid
Company
today

declared

quarterly

a

eighty-seven

(87V2<?)

and

dividend

one-half

share

per

of

cents

the outstand¬

on

ing shares of the Company's V/zVo
Cumulative Preferred Stock, Series
A

and

1954,
of

Series

to

the

record

March

emerged as

payable

holders

at

2,

B,

the

of

close

April

1.

such stock
of

DIVIDEND

and intervention—sweetened
vate

lent

by a vaguely gestured bow to "pri¬
business," which is seemingly nothing more than the equiva¬
of Ifip service. ,
i

Fairness prompts

pointing out that Eisenhower-ism does differ
regarding the former practice of demagogic
baiting of businessmen per se. At the same time may it not be
asked, if socializationi^cunr-hiflation is really to be devoted to the
furtherance of private business, whether there is perhaps cause
for worry that we may be actually, though unwittingly of
course,
from

Roosevelt-ism

headed toward

a

form of

fascism?




The Board of Directors of Amer¬
ican

Cyanamid

declared

fifty

(50c)

outstanding
mon

of

26,

stock

business

shares

1954,
of

today

dividend

share
of

York,

the

to

record

March

R.
New

per

the

2,

at

on

on

$1.17'/i

a

share

on

share

the

on

dend

on

Preference Common Stock, and 40

share

on

the $25.00 par

value

cent Cumulative
Convertible
Preferred

Sy2

a

declared

share has been

$1.40 Dividend
•

cents

quarterly divi¬
of $0.34375
per

A regular

mulative Preferred Stock, 35 cents
a

STOCK

PREFERRED

the 4.70% Cu¬

the Common Stock,

per

have been declared for the quarter

Stock,

of record at the close

to

Com¬

of business

on

business March

COMMON

March 1, 1954.

of

10,1954.

STOCK

regular quarterly dividend of 37J4c per
share has been declared on the Common Stock
A

GEORGE H. BLAKE
President

holders of

payable March 20, 1954 to

stockholders of

record at the close of business

PUBLIC SERVICE

March 10,1954.

The transfer books will not be

the close

1954.

March

payable

20, 1954 to stockholders

holders of record at the close

1954.

16,

Greensburg, Pa.

the

of

the

S. KYLE, Secretary

February

share

4.08% Cumulative Preferred Stock,

Stock of the Company, payable

March

such

Company

quarterly

a

cents

a

CONTROLS COMPANY

ending March 31, 1954, all pay¬
able on or before March 31, 1954

business

1954.

COMMON

DIVIDENDS

QUARTERLY

COMPANY

closed.

I

WALTER H. STEFFLER

Secretary & Treasurer

CROSSROADS

OF

THE

EAST

February 8,1954

The Commercial and Financial Chronicle

52

Thursday, February.18, 1954

...

(820)

the

BUSINESS BUZZ

beneficiary of insured and

guaranteed credit.

While the Wolcott-Capehart
housing bill is complex, it ap¬
pears that an entirely different
approach has been made.
Di¬
rect loans and grants of Treas¬
,

Washington
A

Behind-the-Sccne Interpretations

Capital

from the Nation'*

-j,

•

•

&

gl \r

VkA/

xJL I

Off

ury

funds

" Cv

M.

for

(1)

will still be made
slum clearance
and
rehabilitation
and
(2)

urban

public housing, but the scope of
not be increased.

the grants will

an

Committee

private finance, so the govern¬
has
provided
its
own
secondary
market
through
which was first in the

Finally, the bill proposes gen¬

Housing

erally to loosen up all and down

RFC and is now in the

VA

Under FNMA the government

objectives given by the Presi¬
dent in his housing message. As
j?uch the bill reflects some of

same

however, the
3»ill still'reflects the twin but

istration wants to

utilize hous¬

ing construction and renovation
major device to combat a

while

■accur,

also

one

sustaining

a

of housing
without any

volume

scale

targe

should

set-back

business

operations

even

depression.
On

the

hand,

other

ministration

also

Ad¬

the

ideo¬

seeks

logically and theoretically to les¬
sen

of the housing

dependence

government.

business upon
As

drafted,

this

the

conflict

lience

the

on

one

it

hand to divert

private channels,

toward
while at the
more

time building a big stand¬

-same

of
government
which, if needed,

speedway

credit

down

the Administration could beat

hasty

private

from

retreat

a

a

the corporation to the

public

this

of

cally reflected in the proposed
of

treatment

tional
It

the

Federal

has

long been the desire
housing officials to

establish

a

rational

genuine

secondary

for

market

for mortgages would be

subject.

the

At

FNMA

time

same

definitely retain its legal
charter
and
a
financially de
facto character

government

as a

corporation, and would have a
contingent call upon the Treas¬
for

ury

lion

sums

and

liquidate in
its

present portfolio of $3.5 bil¬
of
FHA
and
VA
loans,

diminishing by the extent to
which
it
succeeded, the de¬

establish the

re¬

in
mind of the investing pub¬
the

of

debentures

though the debentures,
are

not to be govern¬

sidered

or

of

part

a

to be con¬

public

the

debt.

ness

upon

3% contribution to

posed

secondary

would

become

purposes a

would

to

pro¬

market hence
all

practical

discount market, and

be subject to the

overall

Olin Industries

even

be

be

seen.

Nevertheless,

20

years has noticed such an earn¬
est
attempt tql conjure up a

lessen

to

the

between

channel

the

Treasury

and

the

standing
while

for

$700

direct channel,

a

direct

the

the

out¬

than

more

million of such

authorization

of

types

new

loans

mil¬

would be $300 million, $100
lion

finance

would

which

of

participation

government

on

$400 million.
Opens Channel

(3) Phase three of FNMA
bill

the

der

would

Confine

open

As

up

FNMA

type

to

of

mortgage
directed.
of

the

purchase of

insured

or

which
This

any

guaranteed

Loans and

writjten by the President,

House

the

wanted

make

to

urban

which

lic

rehabilitation, plus pub¬

housing,

but

housing

volved

in

provide

funds

for

Republican version of low"private enterprise"

hous¬

and

that if loans

on

used hous¬

nebulous

In

mu¬

the

would
ury

urban

come

subsidy

housing

well

as

becoming

Valley Gas

Teletype
456"

SL




I

as

government-

sponsored mortgage credit. This
also

may

opposition in;

arouse

Congress.
By the proposing to equalize-

the used with
generally

the mortgage on
the

and

house,

new

of in¬
credits
present Administration is
paving the way, should another
to

lengthen

the scope
guaranteed

and

sured

the

inflation

tion

-

and

Administra¬

minded

Congress

come

to-

for a pell-mell govern¬
ment-inspired
housing
boom,,
even if the Eisenhower Admin¬

power,

istration does not find it neces¬

to

sary

do

anticyclicaii

for

so

purposes.
For the Administration

in

word,

a

about

a

turn the

bill is,,

that

drafted

so

flick of the dial would

picture from conserva¬

tive to inflationary.

(This column is intended to re¬

flect the "behind the scene" inter¬
pretation from the nation's Capital?
and may or may not coincide with
the "Chronicle's" own views.)

WE WILL BUY

-

American Felt Pfd.
American Piano A &

B

2nd Pfd.

Dejonge Com.

Shoe Pfd.

Robertson Electric Com.

Carl Marks
SECURITIES

50 BROAD STREET

TEL:

Stock Exchange

St. Louis 2, Mo.

down

dampen
up on

Robertson Electric Pfd.

SCHERCK, mCHTER COMPANY
Bell

to

ease

as

Knothe Bros. Pfds.

Quoted

St.

well

John Irving

FOREIGN

320 N. 4th

drafted, the

George E. Keith Pfds.

Wagner Electric

Member Midwest

President

Louis

Production

—

As

Louis Dejonge

Transmission

Sold

fit.

sees

legislation would constitute
practical "Regulation X" on a
standby basis, permitting the

Detroit & Mackinac Rwy. Com.

Natural Gas & Oil

—

without

terms

pie

under direct Treas¬
as

loan

ta

FHA

of

Presi¬

great deal more of

a

likely

more

easing

the impres¬

Scruggs-Vandervoort-Barney Com. &

Bought

in¬

decay"

substandard

words,

total

available.

of

"preventing

other

that

be

any

problems

dent's message gave

the

would

for

phases

"eliminating

sion

in the market, government

also

housing."

ing. It could also be used to be

over

not

speedway

nicipal

cost

grants

merely for slum clearance and

other

the

White

President

credit

he

as

is

President broadto ease or tighten terms

power

government

and

loans

merely be available to make it
to

the

that

appeared

the

is

government

possible

Grants

the

National Oats

Term.

It

the

giving

un¬

it

funds

Eastern

a

of

liability

contingent

a

addi¬

basis, providing an

20%

ing (to be equalized in standing

Anheuser Busch

and

having

to

not

Bill

Will Change

flat

VA

and

Initially FNMA would

restricted

tional

housing mortgage market.

caution

the

of

design of such thinkers as Mr.
Wolcott.

out

legislation for the past

scheme

again, however, there is

Here

evidence

work

who has followed hous¬

one

power

provisions

if enacted by Congress re¬

mains to

made the borrowing
available to FNMA.

Congress

these

(2)

and

Finally, FNMA could become
complete and total a conduit
between the guaranteed and in¬
sured
housing loan and
the
Treasury
as
the
President
wished
to
make
it, provided
as

under FHA and VA) did not go

Olin Oil & Gas

Miss.

new

a

likelihood, Congress is

bill.

hart

would

well

How

(1)

sure

Texas

job kept him up in

would be provided. It would not
the

With

govern¬

of the housing busi¬
government credit.

pendence

between $500 mil¬
The latter

is intended to

orderly manner

an

lion

$1 billion.

liability

any

(2) FNMA would also seek to

ing

would

its usefulness

upon

market

no

FNMA's capital funds, the

of Federal

down

likely to make considerable
changes in the Wolcott-Cape¬

chips!"

discount

off.

Na¬

Mortgage Association.

market"

"secondary

ment-guaranteed

typi¬

funds,

which

to

required to lay aside
a sum equal to 3% of its mort¬
gages so placed into a kind of
nether capital of FNMA, which
wouldn't
become
true
capital
shares until the Treasury's in¬
vestment into FNMA was paid

such,

are

the

would be

as

Altered

limitations

investing

roughly, for future purchases of

sidized

motives

market,"

government-sponsored loans. In¬
stitutions
availing
themselves

even

FNMA

provide

to

the

These twin

the

his

me

legislate

FNMA would sell debentures of

lic

supported credit.

told

Fourf lusher!—He

less distinct

or

"true secondary

enterprise and toward sub¬
or

more

(1) To establish what the bill

'

and

inconsistent;

housing somewhat

by

reflects

throughout,

appears

^eeks

bill

In all

"The

types of operation.
calls

hand the Admin¬

one

lays

it fur¬

And

/

Wolcott-Capehart

the

duct three

introduced,

of

only if the

up

directs.

Congress

bill FNMA would actually con¬

motives

hand

a

schedule of maximum terms.

housing boom.

with the White

-Hie White House.

loosening

a

thermore

the

behind

cash

Federal

of

Under

On the

but

Presidents

the

and/or

Congress

had

subject, the bill proposes,,
an immediate loosening up,,

not

Hence
ups
and

its

the Congres¬

after

draftsmen

Administration to put the steam

Has Two Motives

a

of

ness

House.

opposed

However,
sional

money.

had

has

pay¬

in the

downs, according to the willing¬

particularly the wisdom of Rep.
jesse P. Wolcott (R., Mich.), the
Tfouse Chairman, who has been

somewhat

public

down

ments.

of private

instrument out

FNMA

practical influence of
seasonal
legislative judgment,

the

sis

or

loan

hands with

lower

repayments,

guaranteeing
a
to a private fi¬
nancing
institution, and then
turning around and buying the
insuring

mortgage

of FHA and

terms

loans, permitting a greater
to ratio of value, longer

loan

put itself in the position of first

ing down" or bringing down to
earth of the almost stratospheric

'lui consultation

the line the

Agency.;

Home Finance

and

Represents a considerable "ton¬

As

.

Broad Loan Terms

FNMA

legislative

concrete

proposal has been drafted and
introduced by the Chairmen of
the two Congressional Banking
Committees.
The proposed bill

jy-

are

adequately with pre¬
venting urban housing decay
generally in order to get grants
on the present basis.

ment

to Congress.
a

Fed¬

they

that

officials

words,

the

dealing

profit prospects of such an op¬
eration
have not appealed to

on

other

convince

must

eral

such grants will
In

increased.

cities

in such a business.
and large, however, the

By

housing. The second phase was
the President's housing message

Now

for

to engage

recommendations by the Presi¬

Advisory

must do to get

be

municipalities

what

Instead,

chartering private corporations

phase.
The first phase
the formulation of a set of

dent's

provision

books

the

on

third
■was

and

housing legislation has retained

Eisenhower Admin¬
istration housing program has
.now
reached its legislative or
of

credit,

ment-guaranteed

WASHINGTON, D.C.—Evolu¬
tion

HANOVER 2-0050

Co Inc.

Tejon Ranch

SPECIALISTS

NEW YORK 4. N. Y.

TELETYPE NY 1-971

LERNER & CO.
Investment

Securities

10 Post Office Square,

Garfield 0225
L. D.123

•

&

i

Boston 9, Mass.

Telephone

Teletype

HUbbard 2-1990

BS 69