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BUS. ADM. LIBRARY Ifeb 2 3 ESTABLISHED IS39 1S4Q< Reg. U. 8. Pat. Office Volume 167 Thank Number 4674 New York, N. State' take Than Inflation boys from their to Government Bond Market Support By IVAN WRIGHT Wright, though laying inflation to excess money and goods scarcity, warns deflation, by removing part of money supply, may create hardships worse than inflation. Points out previous business collapses were preceded by deflationary moves and cautions tem¬ homes, their or their chosen occupations and subject them for * urges year to the arbitrary di¬ tary officer and indoc- t Robert A. Taft r i t i n a courses Inflation of mili¬ some commodity prices is no sign inflation is Holds deflation spreads more rapidly than inflation and curbs on government spending and restoration of free markets and expanded investments as inflation offsets. over; a rection collapse of porary has Mr. Cortese proposes need is we lems o n 1 old of the be directed States. It "Not the defense which us need, we but it will deter any threat of attack from Russia or any one losses, and to control credit. credit European Recovery There is far more agreement Of of the money two prime and a mass -<$ cur¬ rency and fi¬ nancial man- Ms We See It for re- c o v e ry, the Ivan far so we be solved than ing more While our other country far more than projected plan of com¬ pulsory universal military training."—Senator Taft. the countries seek¬ help have inflation prob¬ lems of their tion is quickly and easily domestic inflation prob¬ our lems. are Such Nonsense stock markets during own primarily (Continued a to solve, infla¬ domestic prob- on page any 32) much too varied to be sized up on over a few days." penings PICTORIAL pictures taken INSERT at NSTA for Tri- City sas The "exhaustiveness" Parties in Chicago, Kan¬ City and St. Louis. the basis of a few hap¬ seems to be that. If by sometime in April clearly told their own story, the key men in the scheme of things under the socalled Full Employment Act will undertake to enlighten the President! be R. H. Johnson & Co. developments have not Yet, said the President Congress not much more in his "Economic Report" than a month ago, "The Em¬ the President at the opening of each year not merely to review current trends but also to ployment Act calls Established — ★ and excessive fte -' ' •' r' % / v . rest of n o the m it ar¬ phe- e non. ■ T h e r ef d <vt any mined to o r jstf f>. effort deal the e, e r- ■ jr with basic causes flation of in¬ must A. be directed at J. Cortese the money supply. The traditional power of the Federal Reserve' System to con¬ trol credit has been crippled by a conflicting policy (Continued on Pictorial of supporting XII of Insert) page *Mr. Cortese is associated with New York office of W. E. Hutton & Co. upon (Continued STATE an regu- unpre¬ on page 26) State and Havana Lithographing Co. great the threatened inflation, in order to . Well, that to See recent weeks, of this recent market a tempt the in¬ inquiry will, apparently, require that it consume the European next six weeks at least. "Our problems in economy," one member of able to help can the Council is quoted as saying, "is much too vigorous and Wright as of fluence ;•'3 £ rvd;;.t° • Di. can too Somewhat in the grand manner, the President's Coun¬ cil, of Economic Advisers late last week announced that it v Given the corwouldv make an /.exhaustive ; rect approach study of the current situation ••••' and the right in light of. what has happened in the commodities and ideas to avoid means dictable to at¬ g e m e n t. v; a r the monetary danger of accuracy and the latter is and war on lated with any '■'V is and money buying psychology, only the former EDITORIAL of would accord expansion of gross ingredients is and Federal Re-; restore program supply. inflation in this country than on the disaster. supply Says higher government bond market realities, and that increased cost of debt service is preferable to prospect of further problem as deep > prewar in only will that give and the can particular to making U. S. the greatest air power in history of the world. the power to But domestic product a be United d. e seated a supplemented by adequate reserves on a volun¬ tary basis without undertak¬ ing to dominate the entire life can t a inflation ■.« the first and essential protec¬ tion to the people. ; "It and re-<$> are our pre¬ highly trained, technical, professional force. That will always be - the. number as with - f the two outstanding prob¬ Congress has to deal this session.* The two prob¬ lems with which some ideological bu¬ of the War Department. "What characterized Program have been coupled together pared by reau been System's f government bonds at withdrawal of support of market without serious capital serve CORTESE* refunding of a interest rates to permit some facing the American people.,. Inflation A. J. By Dr. - education, Copy a to personal freedom than to per¬ the Price 30 Cents Yon, Sen. Taft! "It is hard to think of any more drastic limitation of mit Y., Thursday, February 19, 1948 Municipal MUNICIPAL Bonds 1927 BONDS — r INVESTMENT SECURITIES Hirsch & Co. Members New York Exchange and other Exchanges 25 Broad St., New York 4, N. Y. HAnover 2-0600 Chicago Street, New York 5 " BOSTON Troy Buffalo Woonsocket (Representative) OF NEW YORK Dept. Teletype: NY 1-708 *ABC Underwriters and - OTIS & CO. (Incorporated) INSTITUTIONAL INVESTMENTS Established 30 Broad Street, New York 4, N. Y. Tel. WHitehall 4-5770 Tele. NY 1-809 1899 CLEVELAND -" New York Cincinnati Chicago Columbus Buffalo York Stock Exchange Broadway, New York 5, N. Y. Telephone: REctor 2-8600 Bell Teletype: Toronto NATIONAL BANK OF THE CITY OF NEW YORK I Portland General Electric Company Common Stock for Banks, Brokers and Dealers Bought—Sold1—Quoted , request Reynolds & Co. 120 Denver Toledo 1-3M Brokerage i Members New HAa*r«r t-MN Service Common on Y. Montreal Bond *DeWaIt, Inc. Common *Prospectus Gordon Graves & Co. New York Emery Air Freight Corp. Corporate Securities ' N. Teletype NY Products, Inc. Com. & "A" and request THE CHASE Security Dealers Assn. WILLIAM ST., Detroit Harvester Co. Com. Distributors of Municipal / on Vending Corp, Common *Air PORTFOLIOS Information 52 Bell Bond BANK Analyzed and Appraised New York Springfield Washington, D. C. CO. Members Syracuse Scranton _ Wilkes-Barre London Bond Department THE NATIONAL CITY BANK HART SMITH & PHILADELPHIA Albany Harrisburg Teletype NY 1-210 Cleveland Geneva 64 Wall Stock NY 1-635 Hardy & Co. Members New York Stock Exchange Members New York Curb Exchange 30 Broad St. Tel. DIgby 4-7800 New York 4 Tele. NY 1-733 IRAHAUPT&CO. Members New York Stock and other Principal Exchange Exchanges 111 Broadway, REctor 2-3100 Boston N. Y, 6 Teletype NY 1-2708 Telephone: Enterprise 1820 2 Foreigit Dollar & New York Hanseatic LONDON I York 5 1-583 Teletype NY 7-">0(£0 REPRESENTATIVE: London, E. C.4 Street King William The Re¬ construction permitted to take direct action or and to for hopes and as¬ pirations have greatly faded despite the York Curb Exchange Hew 120 years have since signing of the BROADWAY, NEW YORK 5 Tel. REctor 2-781S A. M. Bretton the Sakolski Agree- Woods and ? and with domestic cur- of the rencies has beeiv almost nil,, while their negative or indirect influ¬ and Development particularly as regards the Fund, has been the reverse of the objectives sought. ence, 2Vi% due 7/15/57 due 7/15 A72 3% inc. wm. e. pollock & co., 20 Pine Street, New York 5, N. Y. Teletype NY 1-2846 HAnover 2-8244 so and on delayed or a its operations after ferred until nomic recovery the Fund." Kittaning Coal ;. American Coal Co. Virginia-Pittsburgh Coal West II eco¬ Members Baltimore Stock Exchange V k 1 ; - 120 ■ - Bell 1 - the institutions. It Woods the circumstances, there , would be Engineering gold standard, to Artcraft Manufacturing K.R. If , Clyde Porcelain Steel the of Kirby Lumber purchasing power of our " Established 1923 prices, the ind e the and deposits into gold through the Reserve banks and running back to the gold held by purchas¬ of Time, Inc. the had fallen half that the to United Artists Theatre of United Piece Dye Works pfd. dollar ity of dexes can were 78.6 for Merchants Distilling and 159.5 Nov. Warner & Swasey 1940 29,1947.) If one thinks Members N. Y. Security Dealers Assn. Wall St., N. Y. 5 Hanover 2-4850 Teletypes—NY 1-1126 & 1127 I Bell Established 1856 d e in p Walter E. Spahr reciation of relationship between terms our with gold so long as our reserves ratios this system does not prevent, nor offer any great restrictions on, the depreciation of are of currency 5Teeue<mACompaTW| our paper money be maintained under this sys¬ tem for . important principle to is that although the par¬ the note here 1940. (The in- Taca Airways Telecoin Corp. Treasury. But irredeemable and gold, then, it stood that there paper money respected, reason H. Hentz & Co. our irredeem- • both dishonorable are Under gold-coin standard and a the issuance of promises to pay is confined to those that are to be redeemed. This restricts system sharply supply in depreciation of of goods The Stock Exchange Noranda Curb Exchange Brown Commodity Chicago Exchange Cotton York of New Orleans Cotton And other Minn. Inc. Exchange, Board Trade Exchange Exchanges the Effects NEW YORK 4, N. Y. CHICAGO DETROIT PITTSBURGH GENEVA, SWITZERLAND Mgr. of Our New York 6 39 Broadway Digby 4-3122 . Exchange Exchange Stock Teletype NY 1-1610 of direction currency of Curb York New Members in terms the Botany Mills J Depreciation? Preferred—Class "A" Currency in Terms of Goods and Services In system has made, and makes, easy a great issuance fact, our depreciation the dollar in (Continued : in the value of goods terms on 24) page < ■* pay In irredeemable. likewise The of other *An address 31st Annual sylvania merce, by Dr. Spahr at the Meeting of the Penn¬ State Chamber of Com¬ Pittsburgh, Pa., Feb.. 18, ' Troster, Curries Summers * , Members . New York Security •' • Dealers Ass'n Teletype—NY 1-376-377-378 v 1948. NATIONAL BANE Placer - Mines & Ont. United Kingdom 4% '90 of INDIA, LIMITED Rhodesian Selection Co. Paper Development Canadian Securities Department Bankers to the Government In Common Raytheon Manufacturing Co. $2.40 Conv. Preferred Solar Aircraft Co. 90c Conv. Pfd. Kenya Colony and Uganda Gaumont-British Head Scophony, Ltd. British Securities Twin Coach Co. $1.25 Conv. Pfd. Office: 26, Bishopsgate, London, E. C. Branches Department , in India, Burma,' Ceylon. Kenya Colony and Aden and Zanzibar *Uni?ersal Capita! Paid-Up Capital Reserve Goodbody & Co. Member $ N. Y. Stock Exchange and Other 115 BROADWAY T.l.olinn# ftArrliif 7-0100 Bank Fund conducts banking NEW YORK 6, N.Y. 1-672 -£2,300,000 The Principal Exchanges Teletvoe NY _£4,000,000 £2.000,000 ! and every description exchange business Trusteeships and' Executorships '• also &■ -\ : i *Prospectus 1 on & Common request - / Reynolds & Co. of Members New York Stock 120 Exchange Broadway, New York 5, N. Y. Telephone: REctor 2-8600 Bell undertaken Winding Company 90c Conv. Preferred •> , Asst. Joseph McManus & Co. and services. Subscribed N. Y. Cotton Exchange Bldg. KANE, ^Georgia Hardwood Lumber Co. York New MICHAEL HEANEY, Mgr. WALTER of the mone¬ any pressure tary We Maintain Active Marketa in U. S\ FUNDS for York New HAnover 2-9470 Securities Chicago Members New ' Curb and Unlisted dishonored, and domestic money and deposits in terms of goods and services, ; should be under¬ of promises to why r NEW YORK S WALL ST. our since these, has been none with the exception of silver cer¬ since the present weight of our tificates, are not redeemable but gold standard unit was fixed on are merely exchangeable for Jan. 31, 1934. other promises to pay which are The / , our circulation, pa¬ per money Title Guaranty & Trust U. S. Finishing com. & operation of our sys¬ tem of indirect conversion of and ing: power of the . York Curb Exchange Teletype NY 1-1140 domestic promises to pay as issued by the Treasury and the Federal Reserve banks, and in words, currency paper cause had x doubled Pacific Telecoin 64 : „■ Frank C. Masterson & Co. of the Dollar in the U. S. dollar in terms of goods and services, has not de¬ preciated in terms of gold is be¬ able • / <. its varying effects on different groups, Urges as basic correction quick return <•>- commodity Newmarket Manufacturing Taylor Wharton Iron & Steel . Common . . depreciation has been pronounced and relatively rapid since 1940. The general cost living at the end of 1947, as compared with the average for 1940, had risen some 65%. Irt terms of wholesale Punta Alegre Sugar ,(ij- Hoving Corp. '• i people will regain control or r government abuse of public purse. Holds nation by advocates of managed economy, and calls for new economic leadership. considers the one International Detrola Northern New England V.*-' Detroit Int'l Bridge Depreciation in the Purchasing Power The Bates Manufacturing 37 so has been misled Steel "A" Common 1 Members Hew ' " I ; Economist National Committee 011 Monetary Policy Spahr calls attention to dollar depreciation since 1940, and Traces causes of depreciation and points out needed correctives. American Time Corp. Hood Chemical Teletype NY 1-1227 Central States Elec. (Va.) view of (Continued on page 30) University Dr. General Aniline & Film I , the period.; Today's No. 1 Problem—The Depreciation of Our Currency actualmarket s Electric Bd. & Share Stubs j ] stressed by manv was would be assumed that in > Broadway, N. Y. 5 worth 2-4230 : Tobin Packing Executive Vice-President, Boston & Maine / Hurd Coal & Iron assets the in when strongly endorsing Bretton plainly became confidence other commentators of even de¬ Europe's Professor of Economics, New York Baltimore Porcelain branch offices our Elk Horn Coal Com. By WALTER E. SPAIIR* Aetna Standard to WE WANT TO BUY— to restore the basis i.This view basis. For this rea¬ there were warnings, that as integrity inauguration of the Fund should stabilized both safe and sound be NY 1-I5S7 La.-Birmingham, Ala. Direct wires national budgets of fiscal required if people are have commerce, good St., New York 4, N. Y. New Orleans, long run such an organization function satisfactorily unless there is a reduction of trade bar¬ to and are endeav¬ function in accordance with their primary objectives. Yet, thus far, their direct influence for son, &Co! York Stock Exchange the balancing of oring to '« 1 t' HAnover 2-0700 can normal mestic and ' f. the ex¬ have been set up For Reconstruction •• • a out its purposes only conditions of do¬ international trade and carry under True, the two great coop¬ erative international institutions ments. The international Bank 25 Broad disequilibrium. It was riers, firm rejection of the devices generally recognized, though not of, restriction , and manipulation, the funding of blocked balances freely admitted, during the de¬ bates which preceded and fol¬ the writing off o£ clearly unpayable lowed the Bretton Woods Confer¬ obligations, the'prevention of un¬ due internal inflation or deflation ence that the International Monein the narticipating countries, and tary Fund can successfully operate three hardly foreign international ' ■ Members Hew change that elapsed York Stock Exchange .<;.•% Steiner, Rouse Mr. Murray Shields symposium on Inter¬ national Financial Stabilization, published by the Irving Trust Co. of New York:—"It is doubtful in bring about remedy cause A; J As stated by in 1944, in would These fact considered is it conditions which the fundamental maladjustments that create do¬ mestic monetary disturbances and Develop¬ ment. Hew '* manifest, and sound currency sys¬ tems restored arid maintained. made clear that both the Fund and the Bank, under the terms of their chartefs, are net Bank Members be can reason when International ffipONNELL&rp. '• Bought—Sold-—Quoted unsat¬ French franc along with other chaotic or The recent drastic devaluation of the companion institution, the Bought—Sold—Quoted 1 isfactory monetary and economic happenings in Europe and the Far East calls for a review and retrospect,of the hopes, purposes and aspirations underlying the International Mone¬ tary Fund and •. ' ' <S> : —— — — . : its Lcngchamps, Inc. Louisiana Securities a Corporation Broadway, New ■ , Foreign Internals Alabama & : Has It Done More Harm Than Good? ; , By A. M. SAKOL8KI • " \/ Dr. Sakolski reviews operations of the International Monetary Fund and points out its inauguration and activities, though limited, have been premature. Contends institution has had very little direct influence in stabilizing currencies, but because of its regulations and restrictions on member nations, has been factor in creating black markets in exchange oper ations and has hampered international and domestic commerce, by causing "suppressed inflation." . j British Securities 129 £ International Monetary Fund The Sterling Obligations BArctay Thursday, February 19, 1948 CHRONICLE FINANCIAL & THE COMMERCIAL (798) Teletype: NY 1-635 I <•:«-*< 1 'i ■> Volume 167 Number 4674 THE COMMERCI&L & FINANCIAL CHRONICLE . INDEX "Pulling the Wool..." ' Articles and News Pace Refunding Project to Relieve Government Bond Market Support—A. J. Cortese i________"_Cever A ; - Deflation: —Ivan The A Graver Danger Than Wright Than Today's No. Monetary Fund Good?)—A. M. 1 Problem—The (Has It , Our Fiscal Recession Business of Securities 4 . Looms!—Raymond Rodgers_,—.._-___-_-__-_L Optimism—With Weather a Eye 6 the Telescope on Kempner The Construction Outlook—Wilson Wrightfor _1A____'___ 9 - Holden S. . "I'm for the Middle Road"—Eric Johnston Some Basic Foods—For . . ..The ! / -—-11 A. Vilas —__i_____,.14 : ; Britain's Balance of Payments—Sir Stafford Crippsr_i-A__/ 19 Foreign Policy Must Be Reversed—Hon. Thomas E. Dewey-- 20 > Municipal Bonds , ■' Thank You, Senator " "Puilihg the Wool ' ;; •' ■ TaftJ_;_-__^_^__:__J-l__——_-ril-w—Cover 'J- r AEditorial>_l___^_______; 3;:; . Robert Boylan Sees Commodities Peak Reached But Warns of Danger to Capital Markets-_1 1_6 >' Edward F. Hutton Urges Cabinet "Doctors" to Cure His of " ' Humanity ' — ____ 10 ^ 12/" — Paul Rowen Named by Truman for SEC Post__f_^r_-_----No Recession in the Offing, Says Jules Backman_'ji__ix- Dutch Government Reported Requisitioning Dollar j Securities _■ ,,13 Y" : Ferdinand G. Smola Writes That Gold Standard Advocates Ignore Changed Conditions / Mutual Savings Banks' Deposits Roach Peak, Reports Earl B. Schwulst- 22 ;;V'/. 22/'- of Boston SEC Enters Accounting Controversy.-—-- Bank and Insurance Stocks ~ U. S. ~ public^property and that, were in effect, beyond /. /V • J.K.Rice,Jr.&Co. Established Broadway Bell System Hydraulic Press Mfg. Lea Fabrics In other Warren Brothers "C" dealers and - Susquehanna Mills brokers, it is also within the ambit , From the response; that . to that there us has our been wide and sympathetic ac¬ DUNNE & CO. Members N. Y. Security Dealers Assn. 25 Broad contention. our brokers, mem¬ Congress and the Maine Security Dealers' Associa¬ tion have communicated with the SEC and demanded that it explain the failure to give such confidential treatment. 34 Metal accord confidential treatment to the annual financial state¬ ments filed by 8 19 _w_9 News About Banks and Bankers —17 ______ Observations—A. Wilfred May Our Reporter's Report 32 Our Reporter 21 5 Governments. 011 Prospective Security Offerings-_______ Utility Securities Railroad Securities State of Trade and The __ Industry...: Published Twice FINANCIAL Reg. WILLIAM 25 Weekly B. Park Dominion Other COMMERCIAL DANA Bank 525.00 $25.00 D. Every RIGGS, Business Thursday vertising issue) (general and records, »tate corporation and Other news, city, news, Offices: ad¬ bank clearings, La S. Salle St., 111. (Telephone: State 0613); Gardens, London, E. C., Eng¬ land, e/o Edwards & Smith. Chicago Quotation year. Earnings year. Record (Foreign account of the — made in New York Monthly, postage extra.) fluctuations in funds. 3, Copyright 1948 by William B. Dana 25, as 1942, York, N. I, 1879. Y., CERTIFICATES Bond & post the under the office Act at of Possessions. in United- " Mtge. Guar. Co. Territories Pan-American Union, and $35.00 Prudence Co. New Tele. NY 1-2425 Central Public Utility Sy^s Southwest Natural Gas Southwest Gas Producing . ' ; a rule came from the industry in 1942." The letter then goes on to say that the representatives of the industry asked the Commission to assist in the de¬ velopment of a uniform financial statement. Over whose eyes is the SEC wool? Who does it guess are the We on page r ■ Commonwealth Gas Edward A. Pureed & Co. Members New York Stock Exchange Members New 50 attempting to pull the representatives of the '• United Public Utility (Common) York Curb Exchange Broadway WHitehall 4-8120 Bell System New Teletype NY York 4, N. 1-1919 Y. 32) interested in offerings of are B. V. D. High Grade Public Utility and Industrial IT. year; S. of in 15 Broad New York Stock Corp. PREFERRED STOCKS Analysis available Spencer Trask & Co. Members Members Members per New York 5, N. Y. Tel. IIA 2-8080 ' .: Lawyers Mortgage Co. Newburger, Loeb & Co. States, CORPORATION 52 Wall St. by the Commission New York Stock Exchange Members New«■ York March Subscription Rates Subscriptions sent "Although the staff of the Commission has for some years been studying the necessity and feasibility of a rule requiring brokers and dealers to file financial reports, real Lawyers Title & Guar. Co. second-class matter Febru¬ at were / (Continued N. Y. Title & Mtge. Co.. Company Reentered QUOTED Congress. We quote: Drapers' > attempted rationalization in all of the Commission. impetus for Record—Monthly, (Foreign postage extra.) — TITLE COMPANY and news etc.). 135 year. SOLD quite similar. Manager 1948 Monday (com¬ market quotation — per year. of exchange, remittances for for¬ eign subscriptions and advertisements must be every plete statistical issue $38.00 per — FIRST COLONY typical, we would like to deal with one of them, signed by Robert K. McConnaughey as Acting Chairman of the rate SEIBERT, Editor & Publisher Thursday, February 19, per Note—On to 9576 WILLIAM DANA SEIBERT, President WILLIAM and per Monthly COMPANY,-Publishers Place, New York 8, N. Y. BERBERT D. Canada, 44 Other Publications CHRONICLE REctor 2r9570 of Countries, $42.00 and S. Patent Office U. v 34 —_—_____ To say are As 5 „____ attention. attention A number of these letters 40 _______ Tomorrow's Markets (Walter Whyte Say3) Washington and You__„ The 18 _____________ our our the as to members of the 14 Registration— to come inasmuch them is 8 _____ Securities Salesman's Corner Securities Now in class 42 Public to come the least, those misleading. These letters, regardless of who in the employ of the Commission wrote them, may be treated pretty much as a which have 16 Notes BOUGHT the of which have 7 41 ___ Funds NSTA On .. Forming Corporation been asked to registered dealers and brokers. defensive, the Commission has attempted to explain away its unseemly conduct in a series of letters, some 8 Mutual St., New York 4, N. Y. WHitehall 3-0272—Teletype NY 1-950 We have been informed that dealers and bers of the 20 • Teletype N. Y. 1-714 Punta Alegre Sugar be accorded By. this correspondence the Commission has __________ 1908 Members N, Y. Security Dealers Assn. REctor 2-4500—120 the rule de¬ Business Man's Bookshelf ary Engineers Public Service contended if the Commission could make the we 12 Einzig—Britain and the Marshall Plan From Washington Ahead of the News—Carlisle Bargeron— Indications of Business Activity—.:: Finishing Com. & Pfd. Electric Bd. & Share (Stubs) Canadian Securities 1 STREET, NEW YORK Telephone: WHitehall 4-6551 to the material filed. clear .Cover Dealer-Broker Investment Recommendations—. some pocket. Kingan Com. & Pfd. instant policy has received in the securities field among dealers and brokers, it seems 39 Cdming Events in the Investment Field your 99 WALL r ceptance of L in put compelling the filing, it could also make claring the nature of the treatment that shall V Regular Features __i___________ home withr Dorset Fabrics (w.d.)* powers to direct that these statements be accorded .confidential treatment. < /i 35 Speculation..______________ go ^ of its to Business Charles Slaughter Holds Commodity Price Drop Shows Value of Futures Market and you flesh-and-blood cash We exploded this claim of helplessness by demonstrat¬ ing that under the very rule in question, and by its express terms, a certain part of the information is given confidential treatment. We. further showed that the requirements which create the duty to file these financial reports, are not statu¬ tory. The duty was created by rule of the Commission, and > tered 30 , See It (Editorial) was to which it words, if it is in the power of the SEC to compel the filing of annual financial statements by regis- 32 Cleveland Trust Co. Sees No General Rule Trends in Election Years As We uses 23 Companies 2 N. Y. Curb Exchange Floor Clerks Form New Association— as therefore, the its control. : Truman and Snyder Announce New Savings Bond Drive.___ 25 Chicago Exchange Clearing by Mail _____' 29 Junior Investment Bankers Association to Hear Dulles. 29 World Bank Bonds Made Legal Investment for Massachusetts Insurance was / ___ yours haunt the house at 99 Wall Street* while The Commission argued that the information contained > in these financial statements 22 z of dead past. Leave interesting course of a circulation campaign, promised to print these financial statements as an in'ducement to subscriptions. 22 Predicts Only Moderate Food Price Decline to a , •,/' /./; ____ campaign has made rule / them securities relics of mere At first the Commission made claim to utter helpdespite the demonstration that a financial therefore 18 _______ Emil Schram Aids in Dramatization of "The Big Board". Homer Z. Martin Foresees Vast Souree of Gasoline and Oil. in Coal Re3erves__ Federal Reserve Bank ; v.' *• ,16. z-_ are publication, in the f. ; Bank Investments—Harry L. Severson__ 21 * ■*' % 'r '■ ' " " ' V,: as . obsolete lessness ■) r> •—Homer . of that progress watching. 10 Thought—Francis L. Whitmarsh____ 12 *x Commodity Prices and Business—Col. Herbert G. King_____ 14 ..Venture Capital—"Seed Corn" of Our Economy •" " . Those : Can - GHOSTS segment of the As our readers know, we have been waging an editorial campaign directed against the failure and refusal of the Securities and Exchange Commission to accord confidential 9 Future Wage Increases Be Passed to Consumers? —Charles F., Roos large a treatment to financial statements filed annually by-regis¬ tered dealers and brokers pursuant to SEC rule X-17 A-5. 7 _:_ Construction Industry—Thomas ;< 4 _________ Policy—Hon. John W. Snyder —S. Marshall Outlook 'Z • renders I Z • AND COMPANY industry disputed. Fear of reprisals industry inarticulate. Commission's j defensive letters to members of Congress misleading. SEC owes j duty to public to immediately pass a rule remedying this wrong. . Depreciation of Our Currency Investment Fundamentals—The Choice '<■ —Carl T. Hyder__________-___^ ; More __J Walter E. Spahr_ * 25 Broad Tel.: Street, New York 4 Curb Exchange 135 S. La Salle St., HAnover 2-4300' Tel.: Exchange Chicago 3 FINancial 2330 Teletype—NY 1-5 St., N.Y. 5 Bell 3 liCHTfnsifin B. S. is creating a public furore. Commission claims that Rule X-17 A-5 received its impetus front rep¬ resentatives of the securities ! __Cover Done Sakolski. hy registered dealers and brokers i, • - __________ Internationa! Harm Inflation SEC failure to treat confidentially the annual financial reports fifed 1 ___ Drastic (799) "V Teletype WHitehall 4-6330 NY 1-2033 Aibunv - Boston - - Glens Falls - C. E. on Request Unterberg & Co. Members N. Y. Security Dealers Ass'n 61 Broadway, New York 6, N. Y. Telephone BOwling Green 9-3565 Schenectady - Worcester Teletype NY 1-1666 4 THE COMMERCIAL (800)) & Our Fiscal Fundamentals—-The Investment Thursday, February 19, 1948 CHRONICLE FINANCIAL ] Choice oi Securities Secretary of Treasury Asserting fiscal By CARL T. IIYDER* / of Economist, Shields & Company - of investment knowledge to small investor and describes briefly existing types of securities. Explains meaning of "leverage" and reviews position of aviation stocks, bank stocks, automobile and electric equipment company securities, as well as public utilities and mining shares. Mr. Hyder stresses importance Summarizes existing , ! market factors. how and for plan had very 'time easy with if investing we had had not two wars with the Deal New sand¬ wiched be¬ tween to spend J*1 on billion. This huge t i T. Hyder Carl destoi"- o n thereby multiplying believe better illustrate what In securities force. I the corporation elect officers for the corporation, who serve the have a the other, on (state, county, school districts, paving districts etc.); thirdly, we have first mor¬ tgages, debentures, preferred stock, common stock. In the American way of life we use the corporate form of organizing a business, to a great extent. Two or more people apply to a secre¬ tary of some state in the Union for permission to set up a cor¬ poration. The purposes of the corporation in general, its busi¬ ness to be followed, is stated in its charter. The board of directors of and Contends Administration believes in minimum restrictive government this that is had I by leverage. If a com¬ with fixed charges on pre¬ meant pany budget surplus strongest anti-inflationary Outlines plan for savings bond drive to reduce bank govern¬ bond holdings and foresees ment of tax structure. revision no plans study of tax treatment of American foreign investments. primary fiscal concern is the financial integrity of the United The only way in which such integrity can be sustained is by firm adherence to a sound national financial policy. This policy must rest upon a revenue system that will adequately meet States government. I the . oi® cost $500,000 and has t>0,000 shares of » outstanding, -it earns sary its and neces- pacity and most will not people receive is obvious that in our lifetime lk of that, so it must make we plans for old own our I rather age. after a default the year or stockholder has more. etc. directors run The receives after the fixed preferred, the of to per share; If the earnings 20% to $400,000 and fixed charges remain constant at $250,000, the common earnings drop to $2.50 per share, or 40%.- v / $4.25 drop benefits for all. manage, service, public debt. In planning fiscal our Now the stocks of a com¬ it is question program, pany not a what of should have we like to at the moment, John W. Snyder nor it is what of might and circum¬ Our fiscal decisions must stances. be made with a term seek is view to the long- interest. national stabilize to What we present our welfare material level 'of high be desirable different under proper matter a while, at the same time, encour¬ aging As expanding an foundation a Federal gram, determined be must pro¬ policies by com¬ a all for say common earnings charges on bonds, in our He may receive economic outlook may be added to the working cap¬ ital of the corporation at the dis¬ cretion of the directors. A great out and rather bonds had awes asset an liability or who have not training in accounting. I do that companies, due to having paid their senior obligations, or not ever having had any, have many background of ac¬ • for the trained security analyst. How¬ only one class of stock outstand¬ ever, the objectives of this course ing. Among the sounder and bet¬ are to attempt to place before you ter companies in this category are: Laboratories, Allied ,the risk and danger of one in¬ Abbott and vestment as against the lesser risk Chemical Dye; Amerada ?or danger of loss of capital in an¬ Petroleum; American Chicle; agree counting a is necessary to a limited number outstanding — that is, being issued has of a shares that they of acter a of are not book and just tearing it that the char¬ the people who control the corporation is good enough so that they will not sell opt the I believe are being before known in this coun¬ try, or in any other country. aggregate output of goods services record for civilian use The and was at We had a peace¬ time industrial production of 187% of the 1935-39 average. Em¬ heights. record.., ' possible, attempt to balance the sales of the business against The gross the number market shares of value. this From its times some , r of (Continued on page 28) , : '.■// national tributed income broadly was throughout dis¬ the country and all sectors shared in prosperous business activity. meeting increasing capital quirements. These in sition pacity the in storm consolidate to factors Because face of po¬ ca¬ certain signals, we now gains. Economic our can come only from take affirmative reinforce the action weaknesses and counter-balance the distortions which presently apparent.' are ; Inflation, Strongest Undermining y\ Force >ir" <■4 v<\-': The strongest undermining force and the most definite threat stability our months has during in out the past inflation. been reality of this danger was The pointed President Truman's recent warning to the Congress that "The first objective for 1948 must be halt to the An ary trends inflationary effective shalled attack could from on not trend." inflation¬ be mar¬ single source. It was not a question of government controls versus voluntary re¬ straint, but a coordinated, sus¬ a tained, well-balanced effort in¬ volving both. Business,, labor, agriculture and government, all had problem. in unite to attacking the \ . its, and farm income each reached r'A most direct continuing prosperity levels, American on scarcities and rising price and in 1947 handled. the wage levels can be made by a greatest peacetime traffic in his¬ broad national savings effort with tory, Electric power output. and every individual keeping his or oil production both set new rec¬ her expenditures to a minimum. ords.; The standard of living of Every dollar we can save makes a the American people, measured in direct contribution' toward con¬ terms of goods and services, was trolling inflation by reducing the higher than ever before.. Today, pressure on prices. /,. V the supplies of raw materials, ma¬ Although some correction in chinery and Equipment, and labor the upward spiral of the high cost available for producing new goods of living has been made in the past week,by a decline in com¬ *An .address by Secretary modity prices, these adjustments JSnyder before the Association of must be viewed carefully in terms Stock Exchange /Firms and the Of our whole economy. In a tran¬ Atlanta Chamber of Commerce, new railroads , t ' , sitional Atlanta, Ga., Feb. 13, 1948. Central Illinois Public Service Co. in period, seeking a which more prices stable as we are now Seligman, Lubetkin inflation tween Oil Certainly, (when distributed) cess rela¬ hav¬ ' &> Co. INCORPORATED New York 4, N. Y. 1 V f ' j Request " \ ' -r •* 1,4 Goodbody & Co. Members N. Y, Stock Exchange and 115 Broadway* New York Telephone BArclay. 7-0100 - . , > ' ' ' is recognize that while ments ating ■ Other Principal Exchanges j 105 West Adams St.. Chicago Teletype NY 1-672 can a merely our way for room ment in many ' deflation. of either. there Research Item On and do not want an ex¬ we We should Bought—Sold—Quoted if, obvious to positive factors, we are in a generate far greater to Wages and salaries, business prof¬ Guarantee & Trust 41 Broad Street the are economic outlook. our of these re¬ ing, there is a delicate balance be¬ DuMont Laboratories v far more tionship, such Foundation Co. Title to constantly the Electrol, Inc. Crude forward our to are General within expanded; our than adequate to the task; our industrial and business management is aggres¬ sive; and our savings are equal to 1947, we achieved a peacetime prosperity During never consoli¬ future ; well business labor force is def¬ If another , . encouraging for gain. resultant growth and in¬ dividual well-being. Our produc¬ tion plant and equipment are entirely are friend if it turns out successfully. or that . and ployment reached the 60 million mark, a truly great employment business to themselves judgment can be obtained by cal¬ all the bank culating the net profit on gross investing American News; should be approached in a very stocks; Beechnut Packing; most sales. Most sound businesses earn sensible, calm, and practical way, of the copper companies; Colum¬ from 5% to 8% on their working but you should first realize that bia Carbon; Congoleum-Nairn; capital. On promotions the sell¬ there are certain fundamental Consolidated Mining and Smelt¬ ers usually obtain from "20 to 80% things that have made sound in¬ ing; Continental Oil; Creole Petro¬ of the amount you pay for a stock vestments sound or, in better leum; Freeport Sulphur; Hanover so that the working capital going words, made the risk greater or Fire Insurance; Home Insurance; into a corporation must be re¬ less. S. H. Kress; S. S. Kresge; Mason- duced by a proportionate amount. ite; Pepsi-Cola; Singer Manufac¬ In our -discussions we ,are elim¬ Choice of Securities Types turing; South Penn Oil; Texas inating the field of real estate as When we consider investing we Gulf Sulphur; Union Carbide; I feel that it is suitable for a home have a choice of the following Woolworth; Wm. Wrigley. owner or a,;, resident manager types of securities. First, gov¬ only. I am sure that you are all leverage ernment bonds; secondly, tax exfamiliar with government. bonds, These stocks do not have what the long-term 2 V2 %' issued .during *Opening lecture by Mr. Hyder we call leverage} Leverage or¬ the war and "G" Bonds maturing at the Small Investors forum at dinarily means a greater distance in 10 or .12 .years and; the. "E" Columbia University, New York from the fulcrum on one side of bonds, which pay. no. interest unthe lever and a shorter distance City, Feb. 5, 1947. other. real, level this in the form of dividends or it from and should establish that the security in people who do not know inite dation and subject it - with ' to .move power greater pletely realistic appraisal of ex¬ isting facts. The positive factors hearing of a good buy at a cocktail party or from an acquaintance but before giving your money away you think that the idea of investments stocks all have failure to this financial income, retrogression economy. for We the . stocks that have considerable leverage is very easy national and , reduce The example of are ca¬ levels. Such facts argue for expansion of economic activity and higher . number being used practically at func¬ tions, and provide funds common spending na* caused the normal savings accounts and life insur¬ policies and our social se¬ curity to be worth less than xk or certain — —— mentl are^ ance Our social security gives a max¬ imum return of $87.50 a month > Treasury Our govern corporation, which is a legal en¬ 3 sounder investment than a mort¬ tity. The corporation issues secur¬ gage of another company. Just ities in any of the several forms. here I might point out that due The distinguishing characteristics to our present tax laws the wellVz of its normal value. You will are that if a corporation defaults established companies have a recall that prior to the cheap on a first mortgage a creditor can state-protected monopoly because money policy of our government, apply to a district court for re¬ it is practically impossible to get government bonds -yielded 5%, ceivership. Under bankruptcy the venture capital as we no longer savings banks paid 4% and life court-appointed receivers attempt have people with surplus incomes insurance policy dividends were to salvage for first mortgage and since it is all taxed away. It fol¬ at least 3%. At the present time other security holders .in turn lows that we must therefore know government bonds yield 2V2%, The debenture holder in case of something of the kinds of busi¬ savings accounts 1V2 to 2% and trouble ranks equally with cred¬ ness, including their past record, life insurance policies 2%. We itors but not ahead of them, as is in order to judge the risks that have already lengthened life so the case with the first mortgage one wishes to assume. Before go¬ much that insurance companies bondholder. The preferred stock¬ ing into the. different categories have changed their death tables holder has no recourse in case the of business which we will deal and it may be that through atomic dividend is passed except that in with primarily in these discus¬ developments the span of life may some corporations he has the sions I would like to issue a warn¬ be greatly lengthened. power,, by the charter, to elect a ing on promotional stocks. We budget and tax reduction. Urges In subsequent address, says ferred and bonds of $250,000 earns to find. con- trols and aims at making having only common shares outstanding can be and often are of old We age. would empt bonds—that is, the divisions to Says recent price declines must be viewed carefully, since there is delicate balance between inflation and defla- undermining stability. force. important things in life are health, happiness and wealth—at least to some degree. We have trained millions of people to make us healthy and more millions to • make us happv, through entertainment and so on, but we have criminally neglected training in the must be determined by realistic appraisal program existing facts, Secretary Snyder holds inflation is strongest force tion. . The investing of our .savings Policy By HON. JOHN W. SNYDER* , price adjust¬ fields, such adjustr be made serious without recession. necessary that we ere-' is It steer through the present sit¬ uation with courage and (Continued on page energetic 33) * , .. Volume 167 Number 4674 THE COMMERCIAL FINANCIAL & CHRONICLE (801) 5 W. R. Staats Co. Adds Two (Special Steel The Productloa LOS Electric Output THE STOCK MARKET- CONTINUES ITS LOGICAL* Commodity Price Indes Food Price Index Auto Production and BEHAVIOR Industry Business this space on Jan. 29 last, has continued through, the ensuing com¬ modity turbulence. This following of investment in lieu of specu¬ lative principles has been indicated from two distinct approaches: Failures its past .unwillingness to boom, and tion now rise midst the business in its abstention from the tempta¬ "fall out of bed" to at the appearance ofi a major deflation-depression threat. ' J Over-all industrial production the past .v week continued to reflect modest decline, but the level of output generally held some¬ some what above that of the like week Order.volume backlogs, too, • has and war and dividend return of 5% a on the stocks com¬ The Intelligent Investors A. Wilfred addition In May its refusal to to of 1947 1 - capitalize prob¬ ably above-normal activity and profits, "the ket" of 1947 alert was in mar¬ discerning certain specific weaknesses in the financial situation. Foremost among them would be the vulnerability to the long-range profit cycle and to the distributability of earnings rendered by the expansion of inventories and accounts receivable. Only recently—after the event—has it be¬ come realized generally that the expansion of these balance sheet items as an unavoidable accompaniment of greatly increased business, has posed financing problems to company managers. Similarly has disturbance to the profit situation from the postwar rise in expenses been tardily appreciated by the public. >"/ For example Montgomery Ward /. ! expansion of inventories added to the recent competitively necessitated growth in its installment ac¬ counts to over $100 million have used up the proceeds of its 1946 $60 million common stock sale and a great part of its recent undis¬ tributed earnings stock market was as other and cash The .reserves. shown by,the anticipatory two-year decline in retail share prices, in foreseeing the cropping-out of such corporate financing problems. v A , Wisdom . , : the Downside on remained As for ;Jt (Special to The Financial Chronicle) ton ANGELES, CALIF.—An¬ Gaspich has become connected with * « Turner-Poindexter 629 South reports state that they were slight drop occurring in claims unemployment insurance during the week ended Jan. 24 for the sustained for With Turner-Polndexter LOS and order large very lines. some E. the staff of Co.. & second employment and payrolls, at very high levels with a the" Los of Angeles Ex¬ Stock change. consecutive week. In quarters the some week sharp in considered commodity prices last declines in beneficial, since they worked to reduce food costs to consumers and left more purchasing power to be spent on other things. At the same time it had the effect of making possible stiffer resistance on management's part in wage negotiations. The adverse reaction to such a decline is the impair¬ ment of confidence and the inroads it makes in farm income, which is considered of major importance in our present prosperity. On were a sense this score, however, some farmers were agreed that commodity too were Spring Street, members, high. This ' Robtert C. Buell Co. Adds (Special to The C. Buell & to The CHICAGO, especially true of grain prices which had reached a point where the buying of grain for feed by livestock raisers and dairy farmers amounted to a virtual prohibition. To them the decline in commodity prices the past two weeks afforded some measure of relief. It should be pointed out, that while the present readjustment of commodity prices is desirable from the standpoint of relieving pressure on living costs, too drastic a decline would more than offset any benefits to be gained by it. was ham & with is Robert Co., 3-3 Pearl Street. Joins Harris, (Special Chronicle) CONN.-Law¬ Zahnke E. rence prices . Financial HARTFORD, Co., Upham Staff Financial ILL. 135 Chronicle) Harris, — Up¬ Salle South La Street, have added F. Wesley Bay¬ lor to their staff. s depreciation and wise, goods Patricia and R> Staats Co., 640 South Spring Street, members of the Los Angeles Stock Exchange. Mr. Gib¬ son was previously with Merrill Lynch, Pierce, Fenner & Beane. of last year. substantial in were • . posing the Dow-Jones Industrial Average). In having given this logical performance instead of celebrating the postwar business boom by a con¬ tinuing bull market, it unfortunately left many Lusiness-analyzing speculators high and dry.; most Chronjclk) - As previously pointed out here, the market wisely chosen fairly to capitalize business profits mid-way between the pre- and post¬ levels (that is, at an earnings yield of VV2% for Financial Gibson William The stock market's exceptionally intelligent behavior, cited in ; The Hawley have joined Retail Trade State of Trade By A; WILFRED MAY D. ert Carload ings to ANGELES, CALIF.—Rob¬ V. ; .. i r Dollar volume of retail increased trade very slightly during the favorably with that of the Adverse weather in some areas continued to discourage shopping; and demand for Winter merchandise remained large. Consumer lesistance to high-priced goods reflected an in¬ crease and requests for credit were slightly more numerous. Activity in the wholesale centers again proved sluggish With week past and like week a continued to compare year ago. Bulolo Gold Dredging , Placer Development, Ltd. wholesale dollar volume off Conversely in the ensuing bear period Montgomery Ward's con¬ tradictorily steady action apparently denotes recognition of the fact that this company has exceptionally been able to follow its longterm aim of abstaining from debt-financing, even in the face of the large acquisition of installment accounts, and that, it could sell liquefy these accounts as do its competitors; /V j Likewise, despite the public's proclivity to over-rationalize, and particularly after an extraneous threat Tike the present commoditybreak, the present market has not seen fit to over-reflect the exist¬ ing bearish factors."'/ " *' '/"/"' •;/ '.■[ / /■ * or fractionally, but slightly above the level corresponding week of 1947. Orders, generally, involved mod¬ of the of amounts erate merchandise for stock current replacement improvement in deliveries was noted in some areas. , //'''/ v.On Monday of this week Secretary of the Treasury John W. Snyder went on record as saying that he was not of the opinion that the country is headed for a depression. Declaring that he was "not at disturbed" by all "We've added: he Pato Consolidated Mines and HART SMITH & CO. 52 WILLIAM ST., N. Y. 5 HAnorer 2-0980 Bell Teletype NY New York 1-395 Montreal * Toronto the recent declines in commodity prices, got all the elements of continued prosperity and here." Continuing, he stated that the decline in com¬ prices were an adjustment to improved prospects at home production r; '• The Contradictory Citation of Supply-and-Demand • - - r ■' For example, in recent months a hue and cry has been everincreasingly v raised by the Wall Street community concerning the insufficiency of capital available to the equity markets to absorb the available modity and abroad. ,•?: S/ ,; :>;••/■''■■/ . up incidence, etc.). Yet ernment to reduce taxes in of this factor arises, below the present levels. from our remembrance that a major popularly-ascribed reason for He stated further: the great 1943-1946 bull market was the allegedly large increase in supply doubt great of (because stocks about the of tax any; way actual/importance money Let us in made in circulation. also 1929 for bubble market equities even of at . that remember those fantastic belittling this misconceived the chief supply-and-demand ."/• of conceive \" •/,:,. Z • consideration any credo, the market .; stringency of funds available investment As . '/ ,■:./ result of a Exports—Imports—Futures DIgby compared with $293,000,000 in the abnormally low earning year of 1946, William T. Faricy, President of the Association of American reports. However, states Mr. Faricy, higher railroad last year were offset to a large extent by higher wages, Railroads, taxes. ACTIVE MARKETS higher prices for fuel and supplies, and a greater amount paid in billion of government securities. Also ' public by mutual funds figure. revenues ' , Soya Corp. / the complainants about unavailability of investment cap¬ ital must explain the market's selective rapid absorption of the siz¬ able Bendix and Gulf Oil offerings in the face of its Kaiser-Frazer cold-shouldering. And the $178 million of new capital acquired from the 4-2727 1947 market, there must be taken into account the Treasury's possibly imminent purchase or retirement of up to $9 '• in 1947—an amount 22 times the 1941 ./,'..., • ..s,? Realism Toward the Financing Problem . It is difficult not to believe that the public's present worry over corporations' internal financing is correlated with the seeking )of ex post facto explanations for stock market action.- If the ruling . SUGAR Raw—Refined—Liquid higher level of freight traffic hauled at some¬ higher rates, railroad net income totaled $480,000,000 in what as a CO.,Inc. STREET NEW YORK 5. N. Y. under excuses prices.' So here also, in currently is acting with exceptional wisdom. T; As an offset to the complained-of to the of popularly the climactic blowing-up of the enormous stock that time, was the supposed great scarcity of one cannot WALL \ existing condi¬ tions that would justify a tax policy or program that would fail to balance the budget in the fiscal year 1949 and also make provision for adequate retirement of the public debt." "I rising • '■:%,/>/■ 0/l , supply looking for investment"; and also that the bear swings of 1937-'38 and 1940-'42 occurred in the face of swollen and money 99 that would cut Federal revenues • *' "the LAMBORN & . the question of tax reduction, he contended that, in view of unsettled world conditions, it would be unwise for the gov¬ Taking (Continued h on page 3J) "» STEEL OUTPUT SCHEDULED LEVEL AT SLIGHTLY LOWER Great Amer. For the second week in a row market and steel prices the steel S. U. totally unaffected by commodity and stock market action. week steel prices are stronger, demand is heavier, supplies are have been This Indus. FOR WEEK lighter and gray market activity is unchanged, according to Age," national metalworking weekly. Radiator, Pfd. "The Iron the pipes Steelmakers in the past week have shown their faith in * solidness of steel demand by raising prices on all types of SIEGEL & CO. S3 Broadway, •/ V ." / / (Continued on page 29) DIgby 4-2370 N. Y. 6 NY Teletype 1-1S4S FOR BROKER-DEALERS ONLY Time Inc. , Argo Oil Corporation Capital Stock ( / Kingwood Oil Co.; Dravo Corp. A » American Maize Products Co. A ... crude oil about- producing 8%,.. with Memorandum - ..-i *,5 property, yielding merger'..,possibilities. on J.W.Gould&>Co. over had the oil producer continual past Market t. f FREDERIC H. HATCH A CO., IHC. Established MEMBERS N. 63 Wall Y. SECURITY Street, New York 5, N. Y. 1888 DEALERS >/■- ASSOCIATION1 seven years. 23/4-3% Bell Teletype NY 1-897 . ' / ' PETER MORGAN & COi : 31 Nassau - that earnings Analysis Available Broadway, "New York 5 Bought—Sold—Quoted request * 120 .... crude has Street. Tel. BA 7-5161 . New 5, N. Y. Tele NY 1-2078 6 THE COMMERCIAL (802) Recession FINANCIAL .CHRONICLE & ..'7?a Commodities Peak Reached Jut Capital Mails in Dangei: Boylan Looms! By RAYMOND RODGERS* Professor of Banking, New York University Dr. Chairman of Board of Governors of N. Y. Stock Exchange in inter¬ Rodgers analyzes current economic and business developments and points out, despite recent ' (3) goods inflation. Says stresses and strains have created instabilities in economic structure, and despite oppos¬ ing forces, there are still powerful factors leading to more inflation to be followed by a recession. view holds it not price drops, three forms of inflation exist, viz.: (1) price inflation; (2) credit inflation, and "None is blind so he who will not see," is an old, old as and in address of very sons of Adam take the mis¬ heady tant is as the economic thermometers credit Rodger* men, to men, of too that he handed in one-dollar bills. people claim is temptation, "mob" other¬ subject to economic social and pressure, psychology—furthermore, t;:An address before by Prof. dinner-meeting a Rodgers of the Passaic and Bergen County Credit Bureau, Paterson, N. J., Feb. 17, 1948. boom the hundred to Willie ness sion in tions are In contrast there these to optimists, other business are embrace who men the fatalistic philosophy of the Southern mountaineer who leaky roof. a 1947, high time to oil the hinges, of business Federal Street, Boston 10 Tel. HUbbatd 2-3790 we Company OFFICE • that our must we billions to main¬ billions "umsteen" or to toward atomic race well, or—oh sub¬ counterpart in the economics namely, bad 'talk tends to out good talk! We learned the hard way that greatly touted "New Era" of the Let Teletype Gresham's Law has 73 not us again through the go - Co. • „■ • —★ ■, — expansion War Incorporated EDWARD L. BURTON 8c 1st Floor, Kentucky Home Life Bldg LOUISVILLE 2, KENTUCKY , Bell Tele. LS 186 PHILADELPHIA SYSTEM TELETYPE SU country, our that tions can tions as Eastern Corporation larger Textile Securities AND ™t*buJ[£h' PaN. Y. Telephone—WHitehall Philadelphia, New York and Los Angeles Institutions -7 kets, do or;we 1 „ in free mar-; in' believe not them.7 The attention of the Amer-~ lean people to be focused needs the necessity of these mar-.;, as ? fundamental American r institutions. -It is our' personal responsibility'. to see to it- that upon kets;' change firms follows:, ' , •* , kets threatened are by ious. encroachment Now,: I' believe would become an insid¬ upon them that our "people angrily excited if worship, and the of all expression, freedom o' equality of justice our other great privi¬ leges granted under our Constitu¬ tion and Bill of Rights are no less important than the liberty to bar¬ gain and to do business honorably the limits, of thai course, thought in what I am saying of reflecting? upon the excellent ticular 7 market. rather, the to Without good guard conduct. recognizing the fact, we this country, an unnatural development which endangers our free markets. This danger is serious and it must be removed. It can be removed only by, 'permitted,' in aroused public opinion.177 an It is the that necessary cam¬ paign which certain elements have - our free be 7 stopped. " Unfortu¬ is awaken to heart of and system purpose, people our markets them, this system will 7 I decay. discuss, for a shall go American our without that, par¬ our My fact that free to the very 7 ? moment, the operations of these markets of I which speak... I do out of a so considerable breath of experience. I not do appear as apologist an for these markets.*uNd apology Markets necessary. for the service and people/and reason necessarily which regulates agenqy Tfor benefit of our they have no other existence? They may corrrplex, but, seem is conducted are matter of as a their? operation is < very simple. 7- / ; >~l7'. ' 7-' *'' 7.7 • j fact, There is is which impression an understandable, that markets are made among. buyers and sellers on a spontaneous basis. entirely This would be, I daresay, the ideal concept of free markets. It so hap¬ however, that the orders! of buyers and sellers do'not come pens,; together as evenly as we would .when there is an insufficient con¬ us not am a cer¬ institur first-class.de¬ they In today. are sense, the future very times misuse the facilities of our markets, whether they be com¬ modity markets or security mar¬ 7 . .7,, • Where the public has free of markets, the as should have, there are or Execution in markets. proficiency Quotes call TWX Sp-43 Exchange Pac. from 10:45 Orders on to on page 35) GA. BONDS 11:30 LOCAL STOCKS hours. Std. Time; Sp-82 at 1892) Members Standard of Brokers - Stock . SPARTANBURG, S. C. Teletype SPBQ 17 , ; Exchange Spokane Dealers - Underwriters Peyton Building, Spokane Branches •' at Kellogg,. Idaho and Yakima, Wn. Established \ RHODES-HAVERTY , BLDG. Teletype AT 288 spe¬ -These MUNICIPAL BONDS CORPORATE Floor and same. They do it with great and at great finan- (Continued episodes at STATE AND of markets professionals supply not only their own capital but intelligence in taking care of the missing links ATLANTA, SECURITIES Immediate close cialists who do the to NORTHWEST MINING For make to public access a 27) on page CORPORATION A. M. LAW & COMPANY L. D. 51 > efficiency of these There is, I assure you,; STANDARD SECURITIES (Established do not reduce the markets.- 3-7253 Private Wire System between 7 Properties of New York Curb Exchange Angeles Hagerstown, Md. I as survive A.M., Also Member Los Let democratic our other Members New York, Philadelphia and Los Angeles Stock Exchanges New York t no SPOKANE, WASH. of Request Walnut Street, Philadelphia 2 of joint session flowing II. (Continued 464 Southern BUCKLEY BROTHERS .7 We either believe the Atlanta Chamber of Commerce our DuMont Laboratories 1420 the before kets. SPARTANBURG Portsmouth Steel Corporation Buffalo Bolt Company * A • '• ...V . and the Association of Stock Ex¬ ' 1899 160 S. Main Street Salt lake City 1, Utah BELL on dress pression with international condi¬ COMPANY ESTABLISHED ■" ■ Markets, Fundamental to Our from stantly attempted and are still at¬ centration of orders. \17*4, V V frankly tempting to make scapegoats of It is unfortunate that the nec¬ recognize the stakes involved. It's these;markets. * I am not,- for a not just the loan being extended,1 moment, defending the occasional essary services of the risk-bearer the credit being granted. It's not evils 'which occur under our free are not; fully, recognized. When I just the solvency of your business. market system. Human beings, speak of risk-bearers, I refer to It's far more. It's the very future fallible as they always are, some¬ floor traders whose function it is tain BANKERS BOND £21 vital text of .Mr. Boylan's ad: clumsy and immature officials v7 The markets of y- available upon request „ is society in the have discovered we World i. Amalgamated Sugar • what our nately, the essential necessity of like to have: them do. The pro¬ these markets is not sufficiently fessional,-: or as I prefer to call economic perpetual motion in the understood. Uniformed people in' waste, economic dislocation, and pur national community have con¬ him,7; the risk-bearer,v steps .* in New Analysis y V Consider H. Willett Data future near destroy system of free markets. Free recent that *'in stated also He - the set'in motion to discredit credit 7 ; Murphy Chair Company Long Distance 238-9 Boylan financial loss and the human mis¬ delusion that American Air Filter m odity prices will again " reach which is bound to follow our being taken in by the snare and PH SALT LAKE CITY American Turf Ass'n Varnish P. Robert cruel delusion; a was to • have that ery LOUISVILLE Reliance likely that few irresponsible indi¬ a and valuable to c o m m within the late '20s Stock Exchange Bldg. Phila. 2 • every position in the age of air our of talk, Telephone On to maintain are debt;'or "umsteen" its RIttenhouee 6-3717 is freedom of drive Tele. BS 128 "it they thought that our other free institutions were in danger. Bui Warner Company PHILADELPHIA not onstrate ~ Sterling Motor Truck • H. M. Byllesby & viduals view, stitute your own figures of swob len billions and your own pet idea! Such naive arguments dem¬ Pittsburgh Rys. Co. Walter J. Connolly & Co., Inc. duct hand you hear that we must have a national income of two hundred Nazareth Cement 24 activity. # of said inter¬ an efforts our My main point is that we must not allow the discreditable con¬ in the >'It is not generally appreciated I believe, that our capital mar¬ on 1 There are too many so-called experts going around rationalizing the present fantastically high level disintegration; ' ' most of the door to the storm cellar! Empire Steel Co. Traded in Round Lots predic¬ the bullish on When succeed in the Empire Southern Gas ! recent nearly all Botany Mills Preferred depress a rection. • the?great some the oc¬ respon¬ .0 Boylan their economists predict prosperity, it ii power; Prior not for were side for 1948. tain American Box Board \ RR. market s," top of apparent'that 1 time to cjisr so reaction, and have Maine we be the in billions if A friend took PHILADELPHIA & rallies - national & the prob¬ will housewives will see important though gradual re¬ number of rosy business forecasts ductions in the price of essential hat have showered down on iu foods at retail.",;. •; r V-A" recently/particularly from Wash** 7v77v- '-••77;. 77,.;.-. /..•?;?, V ington. Whereas at the end of 1946 7.7 ; Text of Address > it if it cuss One,- two, three, and so on until he got to sixty-six, sixty-seven, sixty-eight. Then he stopped, saying: "O.K.; it's right so far, so it's probably right all the way." counting- them: BOSTON Boston is That you. near, not take your Willie started had B very most economists expected a busi¬ was ably khown would debt he although I He story to or Our occur. prevent abuses. We must be continuingly vigilant in this di¬ greatest ever that these activities do not sibility is to continue though "there the has damage. of our utmost effort to spite see about r—• serious do and collecting. A friend of his, who owed him a hundred dollars, had finally, after a long time and a great deal of pressure, brought in the money. The friend was so angry at having to pay that a member of heard at, in are world old an are the. credit grantor is a — is we the In cur,1 they do gentlemen must not disre- boom —— which times stab iiized" developments— both business and banking have social responsibilities which make close study of economic phenom¬ ena imperative. 7 7*. '•' 7 available economic data is similar the family busi¬ many con¬ cerned, prices gard * economic to that of Willie Smith regarding credit stand firm against public delusions, ma¬ nias, and fevers no matter how long they may last. This is al¬ most impossible to do. 7 After all, wise! are many toward the great mass of ness men wholesale have and mar¬ are have Developments You That The attitude Raymond rain¬ Must Not Disregard Economic believe?" man con¬ human the kets ing, it don't need fixin'; when it is rainin', but I can't fix it." The in fact, that is the trouble —there are too many! As a great publicist once said, "What can a credit retail or prac¬ to read; invest ment bankers, the ain't it "insofar?- mat noCfixing it, only "When told: be of the Exchange, who was in Atlanta on Feb. 13 to deliver an address before a joint session of the Atlanta Chamber of Com¬ merce and the Association of Stock Exchange Firms, told reporters and see correctly, see, barometers.. And there tion, of credit granters, be they commer¬ cial bankers, bankers, for us him to task for to impor¬ so it is in the field of credit. the para¬ sumer of a bread and butter of all of us depends on how well they read func¬ mount all for been speculation and free markets. on New York Stock adage, but it still epitomizes the very the high function, and field is it no titioner to true prosperity. It has always lonesome job! Yet, in wine of infla¬ for right attacks Boylan, Chairman of the Board of Governors as being the present tion likely commodities will again reach recent highs, scores Eden, do so P. Robert tragic short-sightedness of the sons of Adam. And even as Adam, who accepted the shortterm gratification of the apple and thereby forfeited the permanent satisfactions of the Gar¬ den Thursday, February 19, 1948 • 1894 ATLANTA' 1, GEORGIA Long Distance 108 . Volume 167 Number 4674 • Ahead THE COMMERCIAL & FINANCIAL school there has been For example, sity and learn to be a sten o him. a former¬ three months at business a col¬ a called," \ tains inflation j patient is receiving don't know of two "air-minded," Gil young Robb It j seems to public af¬ fairs in school from uate Hawkes'- virtues. which Carlisle grad¬ can with a ; - The these student inflation; (4) the effects schools a and bu¬ learn can come that it took the . to our for record government bonds. While that letter of accreditation, that government is formed in such taining itself keel, this on an even past year appears to and the pos¬ the sibilities for pic¬ should lend member banks against governments at par, my own view is that the Reserve Banks will in¬ only make such loans when they money (not counting refunding operations) through sale of stocks believe the and this; (6) with¬ in that ture, the the with most vorable get the fa¬ be Reserve ing out¬ support level, and system in theory a credit of the borrow¬ institutions loan. justifies such a This view, let me add, is not - Now ?. * out a ———' — to as, first — popularly held. I can see the possibility of long-rterm govern¬ ment bonds breaking par though Having gotten the nomination rise of inter¬ I do not believe that this is an subsequent election, he has est our rates. In immediate served as a staunch Republican, in j. Marshall Kempner probability or that it t-v •' •• and such a way;'that it has be¬ a time when r.~" my opinion will necessarily happen. staunch Republicans the most significant recent devel¬ come a vast bureaucracy and that were needed, for. more than five Where does all this lead us? opment has been the creeping rise it affords men, who can • accom¬ years. To me it means simply this—the Now he is coming up for in interest rates, the lower prices banks are plish .nothing else, a wonderful re-election. But, apparently,; the of going to be less lenient government bonds due to the opportunity of easy living. * so-called in making loans; >i / millionaire /Republican the charge to Change in the buying policy of the There have always been such leader, the borrower will be higher. Now Vanderbilt, ; still doesn't Reserve system, the resultant in¬ this is not in itself schools around gloomy. I feel Washington but like him, and another develop¬ creased cost of new capital raised confident that we still have only in recent years have the big¬ ment occurred. ' :r-'?■??? a by the sale of high-grade secur¬ This was credit structure which is ample that' there, was ger/ and better universities, grab¬ an ities, .the advance in the discount to Wall Streeter who bing the dollars as they can, gone ^ambitious support a high level of business rates y of the various Reserve in for such "higher learning.?. Of aspired to-be Governor. The Gov¬ Banks and the tremendous effect activity, and commodity prices at least as high as presently prevail¬ necessity, ' in ;these ' schools ■• is ernor, Driscoll,- didn't; like? this of all this on the loan or credit taught the eternal " conflict be¬ threat and he considered it ap¬ ing. policies of the member banjts— tween the bureautfat:::and the parently to be a seribjusbhfc and Which will affect our customers Corporations' Capital Position he set out to divert his rival from Congress; how it is necessary if The creeping rise in inThis brings us to a you are in the Bureau of Reclama¬ running for the governorship, to considera-j rates is an .accomplished tion of the second topic—the cap¬ tion,' for example, to create prop¬ running for the senatorship,, He fact. Money had bean kept artifi¬ ital pbsition of corporations. Cor¬ aganda to get Congress to give iaid, if this ambitious rival would cially; cheap to finance the war, run for this, be would throw the porations today are, in many cir¬ you more money for; your projects' and the removal of the artificial State organization behind him? I believe I have just come to it cles, considered flush and wellceiling only reflects an attempt, to heeled because of large' So we saw the but 3 thesev schools dollar are?, usually amazing ; spec-' a limited degree, to let the laws of called departments of public in¬ itacle of the Republic profits. A little thoughtful reflec¬ organization demand and supply function; or tion will not lead to this conclu¬ struction. / They teach that poli¬ meeting and .the pot-bellied coun¬ in other words, to let natural lev¬ sion. According to data compiled tics is a science, not an exact one- ty leaders, one after another, in¬ els of interest jrates assert them¬ by the SEC from the end of 1939 that the business of being elected cluding those South Jersey lead¬ selves. How far interest rates will to the middle of 1947, the working to Congress is an writer knows, understanding ers, - whom this rise, I do not know, but I should of the mass capital of all United States nonmind; .how. to get agreeing that - Hawkes was ; not think that they will rise only financial corporations increased enough and 'therefore votes, and how to create propa¬ "liberal" moderately—because of the neces¬ from $24.6 billion to $59.8 billion. they had to supplant him. *• ganda. ' '■ sities of the Treasury Department. On the face of it, this seems im¬ In this light, I think that every My first thought i was that I don't think that the Treasury pressive, but if related to the friends had so-called school of public instruc¬ Hawkes' not - given will want to pay much higher current level of corporate sales tion, or the schools of govern¬ them as much money in 1942 as rates for money to finance our volume, no gain whatever was re¬ ment, should teach as a classic they would like to have this year, huge debt. Government obliga¬ corded. If we make our com¬ example, the experience of Sena¬ but obviously that is wrong, be¬ tions become due and have to be parison between inid-1945 and tor Albert W. Hawkes of New cause in 1942 there was a Demo¬ refinanced, and the cost is vital. cratic Governor of New Jersey, Of course the banks themselves mid-1947, to give effect to post¬ Jersey. war changes, it will be found that In 1942, Hawkes had long been Charles Edison, and now there is will pursue tighter lending pol¬ the relationship between sales and a Republican Governor wh» can icies. Consequently, it may well an outstanding businessman. He working capital varied hardly a'; k6ep the county leaders in line on be that individuals and corporahad been the President of the all from the beginning to the end United States Chamber of Com¬ just the statement that Hawkes is tions, may, to a degree, liquidate of this two-year period. While "not liberal enough." merce. He had holdings of governments to ac¬ inventories rose from 11.1% to contributed to X should like to ask the Gov¬ quire the additional cash needed practically every charity known 13.5% of sales, and receivables having come up from taw in the ernor of New 'Jersey, a Repub¬ in their operations. At this point, also increased slightly, holdings of true American tradition and had lican, and the other Republican let me say that I do not believe liquid assets (cash and govern¬ come to be a millionaire, and leaders just what they mean. Just ments) declined from 19.1% to therefore had the money to give what vote or action has Hawkes ,:An address delivered by Mr. taken in his five years of office 12% of current sales volume. (On freely. • ■?.' • .■= JV:'-.-. Kempner at meeting of Western that has annoyed them. Just what He aspired to be Senator from Insulated Wire Co., Los Angeles, an absolute basis they fell from action of his do they consider not New Jersey. This writer worked Jan. 28,1948. $45.5 billion to $34.8 billion.) In "liberal enough." • ; • <• ~ with him in the primary cam¬ with consideration of several a rates; (2) the capital position of corporations; (3) the economy of the European political and economic situa¬ the unques¬ this nomination. same • man, look. is economic freedom and sedative at the subject logically divides itself into on dustries aim the a tion; (5) the«* — : :———-—t* picture of there is anything sacrosanct about other words, working-capitalwise, business itself, the price of par for long-term business had a hard time main¬ Wilson. was as that my know • - degree entitling him to be reaucrat. He me tionably the more outstanding man, but what the students in the "public instruction schools" should Bargeron 7 high production, although now "the time." Points to outstanding heavy hacksupport for continued high industrial activity. stimulant and a main elements: (1) the rise of interest it—poured plenty of money into the South Jersey leaders, who with this assistance, came to see of government he stopped by reasonable logs why. It was millionaires dynamic can is not the slightest doubt that to do this, Hawkes' friends— not he because the law prevented Nowadays too, we have departments (803) asserts despite creeping rise in interest rates and tightening of bank lending, credit nevertheless ample to support present high business activity and commodity prices. Main- There .* in I question youngish, lege. one go off to clashing. . Hawkes, however, went to the bat and in the primary defeated Vanderbilt's candidate, a so-called ly you used to pick that up in one now can <♦>- her, g r a p when or structure is univer- is subjects taught. CHRONICLE Western banker tre¬ a advance, if that is what it is called, in the methods of teach¬ There has been a tremendous advance, if that is what it ing. vvV -1 ■ By S. MARSHALL KEMPNER* mendous in the i'Y* ""fftt1 i *v President, Industrial Capital Corporation, San Francisco i went to »•' Weather Eye on the Telescope of the News By CARLISLE BARGERON Since your correspondent * and . . . • the remarkable more re|nembered 1945 and that > it is between midcorporations mid-1947 raised almost $6.2 billion of bonds. In addition to new this, please remember that during the two years undistributed corporate profits amounted to $13 billion. Expressed more simply, it would seem that the large dollar addi¬ tions to working capital were in¬ adequate to maintain relative li¬ quidity, due volume of to the business increase which in neces¬ sitated larger receivables and in¬ ventories, and due, of course, to the rise in the general price level which has unit per tied sale ventory. up or dollars unit of in¬ more per ' Mark Twain and Inflation This leads —the to ;us inflation. minds of me Mark mark about the one third topic subject re¬ our The Twain's re¬ weather: "Every¬ . , when talks about it, but no one does anything about it." not that mean* By that I there do not are tempts to control prices. at¬ We all read the papers, are familiar with the President's program, which I'rn not. sure I understand, as well pinch caused by high taxes. high taxes can do aught but discourage production and new capital investment, I do not kno\y. as the How The for inflation must be in¬ cure creased production in crease If we goods. strikes and the supply of (Continued Central to have further are work or in¬ an available stoppages, Illinois Elec. or 31) on page & Gas & Preferred Common Central Illinois Public Service Common Curtiss & Preferred Delhi Oil Ft. Inc., Com. Companies, Corp. Com Wayne Corrugated Paper Co. Common Southern Gas Union Co. Com. DAVID A. NOYES & COMPANY Members New York 208 SOUTH LA CHICAGO ■' Stock Exchange SALLE STREET 4, ILLINOIS Tele. CG 730 Tel.: State 0400 r. ; The so-called organization headed paign. Vanderbilt of The Republican by - Arthur funny thing about it, and what should be tremendously - in- Newark, didn't like 1 (Continued on page 36) PUBLIC UTILITY COMMON STOCKS ? " , Black • : Hills "Central ? 1 We •y-y *r-S ;■ arc pleased to announce -die' association' ••with yir-i:/:-.! '!■'?'l *•. - '■,!,.:«' ;; '•' V' ■ : . us ■• > ' ■ „V- V \ ' ; Electric & Indiana Gas & >>v George Noakes, Jr. in pur Public Service Superior District Power Company Company * ' * } dividend requirements $156,000 * Annual Indiana, Inc. Sioux City Gas & Electric Company - Callable @ 105 par have been covered approxi¬ mately 3.6 times since of issuance. Company Public Service Company of ■ $100.00 38,889 sh. outstanding. "Michigan Gas & Electric Company Michigan Public Service Company gales department 4% Preferred : Company Lake y PATHE INDUSTRIES, INC. Gas Company Water Missouri Utilities «v .♦ Power Company Iowa * Mr. Light Company Gulf Public Service Company - * :-r ' • & Central Illinois Electric .& Gas Company ; ■' Power Central Arizona light v Market: " * * * Southwestern Public Service Company Detailed and Texas Public Service Company its 54 — description of 56 this company operations available to inter¬ ested dealers on request. *Tide Water Power Company v Tucson Gas Electric Light and Power Company Wm. E. Pollock & Co., Inc. 20 PINE STREET, Telephone: HAnover 2-8244 NEW YORK * Prospectus Available 5, N. V." Teletype: NY 1-2846 AjCALLYN*®COMPANY Incorporated Chicago ■* New York Boston Milwaukee COMSTOCK & CO. CHICAGO 4, ILL. 231 So. La Salle St. Minneapolis Omaha Dearborn 1501 Teletype CG 955 8 THE COMMERCIAL (804) CHRONICLE FINANCIAL & Thursday, February 19, 1943 * „ products, alcohol, steeL and wood products. Dealer-Broker Investment retailed to 254 to 10,000,000 rural population), gas to two com¬ munities, bus service to two com¬ is Electricity communities (and Recommendations and Literature munities, etc. Electric Company Interstate Power operating utility controlled by Ogden of liquidation. Interstate is highly over¬ capitalized in relation to earnings power and the SEC some time ago ordered the company to recapitalize. In October, 1946, the com¬ pany filed with the SEC two al-^ The earnings statement in the ternative plans to reorganization, 'red herring" prospectus does not which were approved by the Com¬ mission in January, 1947, and by give pro forma earnings except for the latest 12 months period the U. S. District Court in April, ended Nov. 30, 1947. Actual net 1947. Under the plan the com¬ income during 1942-47 was rela¬ pany proposed to sell $19,400,000 new fhst mortgage bonds and tively small because of the high Interstate Power Co. is an Corp., which is in process 3,000,000 shares of $3.50 par com¬ mon stock. These securities were registered with the SEC on May 13th but public offering was de¬ layed until Sept. 25th. As a re¬ sult of competitive bidding Halsey Stuart bid 100.9 for the bonds, and Lehman Brpthfrs, Goldman Sachs and Wertheim bid $4.05 for 2,132,223 shares of common stock. After hearing oral argument on Commission held that sale at this price would not effectuate a plan which would be fair and equitable. Since the bid charges under the old set¬ fixed hand Federal small be¬ interest de¬ revenues, and the 'other On up. income taxes were very the of cause heavy Gross ductions. before income with miscel¬ laneous net income), have been oproximately as follows (in mil¬ operating income i xes (combined lions of dollars): ' „ Oper. Income Before vfar Revenues Inc. Taxes *1947 $10.0 1946 9.1 1945 receiving a 1944 payment of $8 635,500 for the stock, the sale of the bonds was 1943 1942 company the 2.5 7.8 Based consoli¬ 30, canitalization 1947, will be pany the of com¬ follows: as a Long-term % 82 debt.. $25,000,000 Com. stock & surp. 18 5,320,000 or shares. 000 94c Nov. 30. share on 1,500,- a ' According ; $30,320,000 100 Under the previous set-up last as September, the funded of debt ratio would have been about 64% and the stock common equity 36%. The present debt ratio seems rather high as compared with the 50% usually required by the SEC in the past. However, retirement the of debenture bonds through operation of the sinking fund will gradually reduce the ratio at least $3,750,000 debentures should — retired by maturity. be fhat preferred no outstanding v/iigh ra s io. explains the be high debt consideration to n the fact may that duccj. rently also the prop¬ sharply Net plant account is carried million :pmpint - at whereas was in be re- cur¬ only about $30 in excess 1943 the of $50 mil¬ Present plant values reflect Original cost. Charts Corporation owns $2,475,000 demand note, a small amount of preferred shares and the ale of 1957 of retire to lows, earnings, dividends, capi¬ talizations, and volume on virtu¬ stock will bonds and new used be the ally every stock listed on the New York Stock and Curb Exchanges 5s present and showing monthly highs, years, Proceeds of the common. at. 100,- prepay $2 million -^-single $3 million collateral prom¬ issory notes due April 15, and of the issues) William accrued interest to the effec¬ tive date of the plan on other pay the to the bond indenture. in i debt. unded million The bank $10—yearly -(six $50—F. W. Stephens*" 15 Street, New York 5, N. Y. copy will to December 31. of be Emphasis placed in The bal¬ escrow ferred million and of the stock $1.6 million, total of $6.2; mand note, about total $8.7 /, million. dividend represents rate about 64% of net income. The sinking fund amounts of pay-out a to in $250,000 of cash ties courts for 1952. ments will be 17c a share fund ,; The company operates in some¬ what scattered territory in north¬ Iowa eastern the headquarters with nesota, Dubuque, in Operations 28 counties of Minnesota county in South Dakota. Lwo and It has Company of Wisconsin and Dubuque Electric Company. principal activities in the farming, are East grains, Milwaukee Bond 4, N. beans, poultry, cattle and hogs; packing, Commodity Memorandum —Mackubin, Legg & Company, 22 Light Street, Baltimore 3, Md. : % T soy canning and processing operations, such as flour mills, / tories, packing plants and frozen food locker operations plants. Manufacturing are carried on in fur¬ niture, tractors, cellophane, corn — ' v ■ of served market North Eighth San Francisco Upiversitv California? about .*< the by the * Bank of facts 20,.,Calif; H. Child, :- Inc:, . Salt Exchange Building, change—W. dinner at- the .Houston Club. V Salt Lake City, Country . on Lake, Stock day and v Also - available Foundation are analyses of' Weliman, Engl-; Co., and Tennessee Products & Chemical. ; : V \ . Co.— Special Oil Kingwood - survey—Peter Morgan & Co., 31 . York 5, N.Y. Milliron's—Supplemental Mem¬ orandum—Maxwell, Marshall/& Co., 647 South Spring Street, Los Angeles 14, Calif. • New Service Public England of apprecia¬ possibilities—Ira Haupt & Company—Analysis tion Co., Ill Broadway, New York 6, Y. . Pathe Industries, Inc.—Detailed description of company and its operations—Comstock & Co.. 231' Street, Chicago 4, Portsmouth Steel Corp.—Data- Buckley * \Y * ytah.Wi^.^AV>;^ * * Walnut' 1240 available is late informa-: Du Mont Laboratories, on and Buffalo Bolt Co. r < Shepard Niles Crane & Heist—r Currie & Sum-; Report—Troster, mers, 74 Trinity Place, New York 6, N. Y. ' Brothers, Street, Philadelphia 2, Pa. : . • ; • - V > *v Amalgamated • S u g a r ■— New Wilson Line Memorandum Analysis—Edward • LY'Burton- & CO., 160 South Main Street,. Salt Newburger & Co., 1342' Walnut Lake City 1,- -Utah.,,.?. : Y y*' Y Street, Philadelphia 7, Pa.r4 V; — 27, 1948 (Philadelphia. JPa.) Investment Traders Association of Corp.— New York. Also Summary of Transac¬ Salt Lake Stock Ex¬ Yearly Association annual field Feb. 5, N. Y.; Analysis-—Seligman, Lubetkin &' Co., 41 Broad Street, New York 4, tion Feb. 23, 1948 (Houston, Tex.) Houston Motors Graham-Paige South La Salle ,»« America, 300 Montgomery Street, tions- of Wall Street, New York What's Happening in —Brochure Yv-'.Y, Investment Dealers Public Service-New Service—Memo¬ M. Kidder & * Co., 111. annua) i;".. ation Luncheon at the on Public randum—A. and Philadelphia Securities Associ¬ mills, feed canneries, creameries, cheese fac¬ Prices Compared Dividends on In¬ vestment Trusts ~ for 1947—De¬ tailed tabulation-rTaussig, Day & Feb. 20, 1948 (Philadelphia, Pa.) Club. circular Engineering Works. Tax Status of Milwaukee - York 5, N. Y. Also available-is a N. freezing, peas,- Y. Stock Club — the Prices the at Athletic Club. including dairy farming and the raising of Street, New York Co., 60 Beaver (Milwaukee, Wis.) winter, party Circular Outlook—Anal¬ Market Stock ysis of situation s view of break in commodity prices—H. Heptz & The areas Hickey, & Street, St. Louis 1, Mo.. Feb. 20, 1948 — Nassau Street, New 1 subsidiaries, Interstate Power . Street, New York 5, N. Y. Company, Inc., 316 ex¬ Iowa. tend through 21 counties of Iowa, the developments ' in industry—Vilas . 49 Wall Min¬ southern and De¬ Developments of Railroad Week—Current be com¬ and In Investment Field Corp. neering, EVENTS the common stock. on — COMING require¬ equivalent to about Sinking Company England State 148 annually,, debentures '. • company—Raymond & Co., Street, Boston 9, Mass. land time. some Street, New Co., 120 Broadway, New & Engineers scriptive analysis of special Situ¬ ation on 86-year-old New Eng¬ Estimated SEC Electrolux Ward 1 New principal or but does not begin to operate un¬ til the control hydraulic Inc., 41 Broad N. Y. ; Co., Colorado. and the issues involved may before of equipment for aviation and indus¬ trial uses—Seligman, Lubetkin & England stock might be slightly below remain Electrol, Inc.—Analysis of man¬ ufacturer Northern ' making market value of the unsold mon 61 Broadway, New York 6, Y. United States National Bank Building, Denver 2, pre¬ would / Company—Summary & opinion—E. F. Hutton & Com¬ pany, N. Trusts—Brochure Investment adding Ogden's de¬ the 1 Frederic A. Adams, ing recently around 62 and the preferred stock around 7^:Total market value of the bonds would a 120 more, for fu¬ (1) Og¬ The debenture 6s have been sell¬ $4.6 Broadway, berger & Company, 61 New York 6, N.-^ allocation; between Corp., (2) holders of the debenture 6s of 1942, and (3) pub¬ lic holders of the preferred stock. be Meeds, & Ineome—Analysis on opportunities for ineome in in¬ vestment trust preferred Y and common stocks—Arthur Wiesen- 1,500,000 shares not probably in the neighbor¬ be Deere and of ex¬ the or Bisseli York 4, remaining $1 debt spiral complete Building, Broadway, New York 5, N. Y. in charts 922 — bound book covering 12 the SEC has not im¬ thi§ amount. There is no present posed the restrictions which it indication as how the stock will occasionally has done in the past be split between the three par¬ where the debt ratio is high. served het ty account has been lion. to factor , . e ;$vc is stock another considering the capital ratio l *©:: is The fact surplus account of nearly $17 nil1 ion). Ogden a all New York 4, N. Y. 30 Broad Street, net deficit a However, amount Total (together with Service National Bank—Circular Chase —Laird, Detailed — Public Trade Co., Board of Chicago 4, 111. in¬ Portfolios Bank common den pro 412,000, The Amount stock in million and i $6 dock Illinois Company—Circular—Kneeland* & formation—Gordon Graves & Co., $10 million preferred 'unded debt ture 2.2 months ended dividends the pro forma on tion Stocks—Memorandum- Joseph Faroll & Co., 29 Broadway, New York 6, N. Y. ' kwh. sales 1,239. outstanding capitaliza¬ includes about $36 million Present Central and Industry Transport Selected and average will 2.3 Y preliminary prospectus, which may be sub¬ Only such amount of the common ject to amendment, it is the pres¬ ent intention (subject to various are to be sold as will be necessary to raise $3,635,000. Smith Barney contingencies) to pay dividends at the rate of 60c per annum begin¬ & Company are managing the un¬ derwriting on the new basis and ning October of this year. There the offering is .currently sched¬ are the customary restrictions on dated balance sheet as of Nov. the for Air per hood of 1 million shares $5 uled for Feb. 26th. Average kwh. latest period revenues. revenues 3.62c were sold, forma basis the latest "ieures show net income of $1,On million 20year sinking fund debentures and 1,500,000 shares of common stock. bonds, mortgage 8.2 ; *12 the 5th proposed new capi¬ talization and registered with the SEC $20 million 30-year first changed ; " also cancelled. Feb. total residential ance 2.8 7.1 On of 13% 2.9 7.3 company's the upon total, and industrial sales relatively small—only about are tended $3.0 , conditioned for the new bonds was ' Gross interested parties the send to . the bid price; the mentioned will be pleased following literature: ' understood that the firms is about 89% revenues are the of — Philadelphia C Twenty-fourth Annual Mid-Winter Dinner, at the Benjamin Franklin .J American Wate? Workkifc EJeetric—Analysis—A,' M. -KIdder A; Co.. 1 Wall Street;' New < York 5, March 5,1948 (New York City) New York "American Red wGarrieslo/r t Security Dealers As¬ Argo Oil Corporatrofi-^Analysis sociation 22nd Annual. Dinner *1; ] for broker-dealers On lyYYlY"WV; the Waldorf Astoria. Federal Water & Gas March 12, 1948 Canada) Annual Southwestern Public Service Bond Northern Indiana Public Service Gould & Co., 120 ■"York (Toronto, Out* "YY ';t ; Dinner of Traders ; the Toronto Association at the King Edward Hotel. ;;Y , . ; ; Security Traders Association of Gilbert J. Postley , & 29 BROADWAY. NEW YORK 6, N. Y. Direct Wire to Chicago Co. the 12th Annual Dinner at Waldorf-Astoria Nov. 15-18, 1948 Hotel. ■ • ' w 1'" " * ■ ' B. V. D. 1-u K- n r- ' port — of "•i-P'vr' ' America—Special & Dempseyi-Tegeler 210 West Seventh geles 14, Calif. 7 Illinois re¬ Co., Street, Los An¬ . : ; .: ; > 'ft 'r' f- Corp.—Analysis—C. E.: Unterberg & Co:, 61 Broadway, New York 6, N.i Y. ' '■-/ , Central (Dallas, Tex.) Broadway, New 5, N. Y.Yf, * Bank April 19, 1948 (New York City) New York - Public ^ Service Cb.^—Research item—Goodbody & National Security Traders Asso¬ i Co.,115 Broadwayr New York ciation Convention. ' iN. Y; 6, :• i Volume 167 Number 4674 THE COMMERCIAL The Construction Outlook By & FINANCIAL CHRONICLE Outlook for Construction WRIGHT* WILSON President, F. W. Dodge Corporation Asserting prices and production are at level commensurate with dilution of money supply, construction economist says it is evident residential building probably will be reduced as Extolling fluidity and diversity of free enterprise, Mr. Holden points out abuses and shortcomings of industry as due both to legal and trade union restrictions and to operating on trial and error basis. Sees progress in redjcing housing costs, and expresses confidence in further expansion. Cites construction growth during depression following World War I as basis for bel.ef in current ex¬ pansion, but warns this is year for critical decisions. construction stimulating effects losses and shortage of equity capital. ■ Prices and production have been increased to within striking distance of the level determined by the wartime dilution of the money supply. While it is evident that the inflation of bank deposits and currency would support still higher price levels, the combination of increased pro«>- duction increased significantly appar¬ inflation. ently is extension ap¬ proaching the sioin limits will be method fi¬ of the consequence, bank current credit infla¬ tion the struction earning assets rather sort Wilson Wright reduction have reduction introduced been and in of inventories, progressively magnified. Consider, of for example, the current relation prices of agricultural products and rents, between the prices of capital equipment and the prices charged for these in the form of depreciation charges, be¬ tween the market price of cor¬ and between the of investment ernment in plant constriction a available for non-gov¬ borrowers ordinarily interpreted as indicating reduced volume of expenditure In this connec¬ for construction. tion it is significant that porate equities and the prices paid tracts for for the services of have new con¬ been development equilibria of may indicative of a employees. The dis- price these be considered as situation in which expenditure for consumption and investment eventually will be de¬ ferred, because of unfavorable price-value judgments on the part of marginal buyers and investors. ft, ; Moreover, during recent months has become apparent that the combination of rising prices and it the steeply progressive income tax rates have siphoned savings from the possession of that kind of in¬ industrial construction declining for past. Presumably months some this change in trend will be made evi¬ dent in contracts for commercial construction in the not too distant future. Expenditure for residential struction stimulated was dropping of rent control con¬ by over new .onstruction at the end of the first 1947. At the same time ial contractors buyers of abandoned costs and hope that be reduced would poten- residential space building in the dividual who, in the past, custom¬ arily invested savings in equities. foreseeable future. At the penditure for residential construc¬ dent time it has been evi¬ same that important effect of an price inflation has been tion of a distor¬ profits in the direction of enlarging the figures reported without a commensurate corporate increase in earnings. of disposable corporate Thus a critical shortage equity capital has been devel¬ at a time when corporate oped management is learning that ex¬ pansion programs be financed of funds. opments, longer no from internal reduction a in plant in business and equip¬ V Not only the are of inade¬ an quate supply of equity capital but also there an is automatic limit think to reason to that credit pansion is being developed. loans of the commercial result of expectations, dential current ex¬ level of resi¬ construction evident that the volume resi¬ of dential construction be reduced, as are worn probably will stimulating effects off. of ager a viewpoint of the N. in prices. by But Association, Atlantic J., Feb. 6, 1948. the the City, struction developed from the foregoing statements. " First: From now the risk of on inventory loss probably is greater the opportunity for gains. than The responsibility for of speak industry contractors and who actually erect structures On builders. ment losses categories exist to serve the varying needs of the American it is to understand necessary free enterprise itself has economy, recent years in vilified, misunderstood, Simple Formula American It fit any simple formula. of natural maos inventories planning to is not resources, factories of schools, , Here is what outstanding one L'lienthal David t*nation he is is his going. His business, own finds the way to get and inability to bomprehend the fdiaims verse and the of purposes people The Urere actually, is not a new to Grow and Expand sysiem all, but almost its opposite, that a society of the greatest imag¬ inable diversity and flexibility to produce things more ways cheaply and make them available to people, to improve our communities and the living standards of our people. The times more describe we times too tired The be 'system' might svstem by saying that is something which de¬ up whereas society defies tem our limita¬ The American economv in¬ million 3V2 farms, of independent 6% mil¬ of 10 million economic initiative. I total a that no conceivable sys¬ be originated by plan- could society. our by Mr. Holden be¬ Association of and Industry, Chicago, Chicago Commerce 111., Feb. 11, 1948. 1 com¬ greatest with competence that has in construction industry didn't need to convert to war, or reconvert to peace; always ready to tackle any did what naturally. For came production from it office churches and ties to job, it simply mobilization war naval and war switched overnight buildings, schools, other civilian facili¬ bases, cantonments, quonset huts, flying fields, ship¬ yards, war plants and war hous¬ ing. It quickly doubled its Drewar capacity, completing in 1942 the largest total volume of construc¬ tion of any year in the country's history. The war construction miracle 1942 of production naval was forerunner necessary miracle the of vitally the of war 1943. The bases, supply depots and landing strips laid down by con¬ struction men organized as Seabees and army engineers prepared the way for victory. During the startling and itself war innovations construction in many design methods were adopted. A modern efficient home- building industry created. was Builders adapted their assemblyline techniques to building ships, their management operating shipping of One to I us have known before. in war man wartime who rose shipbuilding manufacturing automobiles. would say that the American now industry is character- (Continued on page 34) anything about As Walter Lippmann put five years ago: "There some out of the nation itself ends, and veritable explosion of a tional ALBERT FRANK- this people who have not been very pleased with themselves for 20 years because they were not using their faculties for great which energy shape and the alter great will the GUENTHER LAW Incorporated na¬ shake world." expansion of society is capable, we Every new industrial enterprise, every new social or¬ our Advertising ganization. every new means of transportation and Communication every new family, every new pro¬ religion, education and public health requires appropriate gram in facilities of the most advanced type. What 131 Cedar of construction in¬ dustry can best serve this dy¬ namic, vital and expansive Amer¬ Diversity and Flexibility of Construction Industry Should not the American con¬ Street, New York 6 Boston Chicago kind to towns, to materials abroad. construction fame know-how industrial economy faces a potential ex¬ pansion greater than anything any it a the served admirably The war. technical competence, people and peace diversity and high managerial can *An address the and con¬ which one I am convinced that at this present moment, the Ameri¬ ican society? fore the our industries, the new con¬ must build. sum American of the bines is struction. which limitations, tions. depres¬ downs production facilities and 'system' is to have system." I expand, a that, of all American construction For a to call is expands by invest¬ ing capital in new enterprises, new is to economy sick we ex¬ An economy of said convinced am construction industry measure the flow and the ebb of the expansive come be I great forces of out self—cdmng what comes natu¬ rally.' The only way in which it at is has things as thev come, de¬ how to handle situation? by the facts of each situation it¬ the and ups is economy too what the prosperous are the or have is, taking ways When at ciding as when panding. of short while ago: "What a have centers Security Traders Association of New York has announced that the date of the organization's I2th Annual Dinner has been changed from April 23 to April 19, 1948, since it is felt that this is where destination sion. churches, hospitals, automobiles, telephones and radios. contend The for explained by censuses of pooiila- tion, lion OF NEW YORK and woman and child knows exactly we does not It is not business enterprises and are been abused society understand. to easy cludes convenient date for out-of-town dealers who which System American Our a ASSOCIATION our grossly lied about. even No fines NSTA Notes Every gen¬ eral we remember it isn't chaos. produce American. inventory But Some organiza¬ One of the most striking char¬ complete buildings acteristics of our dynamic free en¬ for sale, either singly or in cmanterprise economy is its eternal tity; thev are merchant builders urge to grow and expand. Our or operative builders, formerly population is not static; the ideas spoken of as speculative builders. of our people are not static. We The varying types of ' profes¬ are eternally thinking up new sional and business organizations things to do, new things to make that fall within these several tions about it and that the first loss is the least loss. attend. ac- count with the intent of operating - more own producing, with minimum time effort, any kind of structure, any time, anywhere? and American man | their them for income; these are invest¬ no a con- material install of flexibility equipment they sell combine j there. The chaos which the Marand supply functions, tian seems to see rests in his oWn building organizations to sav that our ^TRADERS con¬ Some can SECURITY the as progress it not live by rules that guide but do not reg.ment or re¬ strict? Should it not be capable struction service the is reduced to not Should chaos," and a debt should be kept to proportions which will be bearable if income sustained. me asked in¬ a large number ana variety of, whether| it be Chicago, Montreal supply organizations. The service. Mamaroneck, or the Lexington organizations include the design-1 Avenue ex't. He expects terminal ers (architects and engineers), the 1 offic'als to supply an information contracting builders and the sub-1 booth, ticket windows, gates with contractors. Supply organizations the trains plainly designated, and include producers and distributors j a few other essential services and of materials and equipment. Sub- (conveniences. He decides his des- distribution of building materials, policy decisions of impor¬ tance may be He way. an it ever-improving standards, with¬ out itself becoming standardized? hour. Viewing the milling crowds moving in " all directions at once he would likely say: "This is Holden large number and variety of service organizations, and three situation, it is well to rise swollen S. confused grossly we s;sts of business engaged in the men's general been Thomas man¬ / *Remarks by Mr. Wright be¬ fore the Middle Atlantic Lumber¬ have What our society in Should himself in New York's Grand Cen¬ tral Terminal during the rush misled. and From the Third: If sales are reduced, the prices charged for goods on inven¬ tory should be reduced promptly to prevent inventory accumulation and a tight cash position. In this banks been enterpr'se imagine the bewilderment of a visitor from Mars who might find activity re¬ free enterorise economy. To un¬ jects the effects of these changes derstand the construction industry in expectations in the past, it is ex¬ commercial, agricultural and real estate the Second: The a was cause confronted we problem As increased rapidly during the second half of last year. Be¬ can ment is indicated. with tion sources Because of these devel¬ investment these changes in has not be harnessed to fluidity and diversity of teresting extent that an the half of numerous the such to will system. free public opinion probable reduction equipment, and would be a a probable investment in new of slogans, ance they in permit A friend of mine once described has grown and probable a exports, a business credit re¬ wholeheartedly their economy to gained accept¬ The combination of price disequilibria during the believe freedom, a truths - and maximum ity? c o m- pounded half industry be itself vital dynamic, characterized by diversity and flexibil¬ and through development of sound and of our dy¬ So long as Ameri¬ society. cans myth¬ ology, mainder of the current year. ganized in the time some gener- of the out¬ are ' namic are 11 y misun¬ derstood. A to This invention which and ^ struction standing characteristics a involving been that in- industry credit at sense con¬ . presumably ^ which would not measurably curtail the resourcefulness, energy ners the of are A tr* American limited price system has d isor- processes the char¬ acter an expan- Construction functions and situation, rather than high inter¬ est charges or Federal Reserve policy, apparently will represent a factor limiting the expansion of In the proc¬ of of a the capital is further increased. war. ess the price risk our nancing As of by by the magnitude of bank capital when the ratio of estab¬ by are among the most familiar objects in our in themselves fairly simple, though frequently employed in elaborate combinations; there is nothing mysterious about them. -Pi Nevertheless capital of these banks has not been prices lished Buildings and engineering structures environment. A and in creased 9 Industry By THOMAS S. HOLDEN* Economist, Armstrong Cork Company end. Cautions against inventory (805) Philadelphia San Francisco 10 THE COMMERCIAL (806) Urges Cabinet Connecticut Brevities stockholders of Bigelow- meeting on March 29, annual the At • proposal of the preliminary re¬ ended Dec. 31. 1947, showed net sales of $62,872,093 Co., Inc., will be asked to vote on a directors to split the common stock two-for-one. A Sanford Carpet port for the year compared with $39,222,359 the^ Glass Works, Thatcher Glass Man¬ preceding year. Net profit was ufacturing Co. and others. $3,446,729 or $10.64 a share on the *t * ❖ common stock compared with $3.53 a share in 1946. Earnings on the "6% preferred were $130.54 and $47.27 respec¬ has an¬ nounced that directors have authorized the sale of 7,500 tively. shares $1,248,095 or 1947 of $2.97 were $2.55 and Feb. 1946. share respec¬ tively. to if Icto business the company, three for improvement, and * the increased volume of sales re¬ quired capital working more to keep the business operating, and a contingency fund is needed to it 100.22 for of gross the Southern New England Tel¬ ephone Company was $3,983,791 $3,297,254 a year ago. Net income was $432,921, against against $325,153. For the 1947, gross was year for income the 4> ♦ " *■" of Russell Manufac¬ stockholders turing Company, it was reported that the business of the company currently continuing at a high volume. Sales for 1947 totaled is bidding for ion, issue a 1% carrying the in¬ a scale ranging from 1.55% basis. * Far r 18, "Dear Mr. Edward F. 1 Hutton d ea on a directors Power Company reported sales of 97,277,000 kilo¬ watt hours., This compares with 95,036,000 kilowatt hours for the This does not the change about e rs h i p obliga¬ whipli professional serv¬ you are paid a very substan¬ fee, and, Doctor, your patient vigor is your primary ices tial is dangerously ill. all-time is There another. have or New dropped 1947 amounted which was times the level of 1933, awards to still in¬ are creasing. Business inventories in the aggregate are today not ex¬ cessive in relation to the existing level of business sales. However, is there maldistribution in in¬ leads to wage and economy. In the light of this substantial general increase in in¬ ventories from the. current level living and inevitably salary demands which are outbid in the; market. Consequently ade¬ groups appraisal course of of rates wage the future and prices condi¬ must take into account the or would not conditions con¬ excess of currently following to tribute an ed to about $11.4 billion, and even equipment plant construction: employed in the pro¬ or are of goods which do these immediately increase the sup¬ an¬ ply of consumers' goods or serv¬ They receive wages, salaries or other income for the produc¬ tion1 of these investment goods patient, either because they did not know when it was in its death struggle, or they were too self-satisfied, preoccupied, in¬ dolent, disinterested, or incompe¬ tent to diagnose the nature of the malady and prescribe the effective treatment—the kind of medicine business needs. Or, perhaps some of them were even splitting fees ices. the this income available and supply use consumers' goods and to bid for of civilian services. (2) An increase in business in¬ ventories: Income is created in the production tories goods for inven¬ transportation of of the or such full the Marshall Plan is en¬ unlikely to exceed $7.0 are but goods, the fall last year? below billion. by $4 to $5 Expenditures building resi¬ up consumers' 1947 ;n the fourth quarter of 1946 to a from for sharply billion rate were in (1) An increase in the expendi¬ by industry for durable tures not deflationary a force. In 1947 net exports amount¬ dential generated purchasing power: Workers lead to soon any billion in 1948 and will therefore income. The else in this worldin other lands have doctors 1947, 1933. billion, contract and in of goods existing throughout the of duction patient dies, you won't "If your in about six if and level these $3.9 acted, their au¬ for struction rently generated purchasing power lost This would be ac¬ durable an billion $17.7 of Doctor, and, gentlemen, your patient is dying. You are the Doctor of the profit and loss and The complished by changing the 200,000 shares of $25 par stock to 400,000 shares of $12.50 par. for reached times the ten tions which lead to excessive cur¬ of split the stock to high should become on Company recommendation of two-for-one. necticut Light & meeting stockholders the Expenditures equipment ventories cost quate , "Industrial other anywhere el-Birmingham will act the if * annual the At were down. rrom to dustry? Blank: and goods Roos services boosts ad¬ were on to a March a coupon bonds The 1.50%. of reoffered For the month of January, Con¬ 1946. sold to F. S. Moseley at was 100.02 for bonds F. Dr.. Charles following let¬ tion, for rate are circumstances, opin¬ if the your competitive system based on free¬ dom. The defense of its health 1, 1950 to 1959 inclusive. The than seats. In these Point Beach School Building bonds da(ed Feb. 1, 1948 and due serially $50,000 each year issued $500,000 $13,874,620 which exceeded the peacetime sales of 1941 of $6,659,725, by an increase of 108.33%. month of January show in ■ meetiifj? of the annual' the At . recently Milford of Town the to tickets con¬ Feb. was year $2,255,501 against $3,339,188. * The * * dis¬ more there I the <i tributed of would happen, for facturing gas. econ¬ Just what dressed Commission the has omy which Connecticut the to national humanity," in & Electric Corp. Utilities ills at whenever "We the to cur. authority to raise its gas rates to meet the increased cost of manu¬ $40,827,907 against $37,284,525 tor the preceding 12 months. Net applied Public supply doctor a current the administer to * it to exceed goods the upon need ter The Derby Gas has letter subject, l%s. it 1947 December The claims sharply from the middle of 1946 to the fall of 1947. They have, however, in the past four months been rising slightly. Plant con¬ Day, Stoddard & Williams at to currents me prices; that is, the of Recently you touched serial bonds dated Feb. 1, 1948 school equivalent of $1.29 a share on the 309,109 shares outstanding. a follows: text The 15-year $150,000 val orders of Easton recently Town The currently generated purchasing power exceeds the retail services produced in a corresponding time inter¬ few months before. In other words, business is good whenever value of goods and existing if ' negotiations should be greater productivity. of a letter which he has re¬ cently written to a friend regard¬ ing remedies for present "ills of humanity." Inc. it sold tion in wage Business is easy to get and prices of goods and services are strong copy has acquired a knitting and warping plant at Willimantic, Conn., for manufac¬ turing Nyton Tricot lingerie. reserve to pass "putting Uncle Sam in Attacks "power politics" * * excess of about 9% in sharpening competition may make it difficult, if not impossible, the increase on to the consumer. Says primary considera¬ out Hutton, of E. F. Hut¬ ton & Co., members of the New York Stock Exchange, has fur¬ nished the "Chronicle" with a Manager. for future uncertainties. $400,000 was set aside as for contingencies, the provide Ici 1947, a of it purchasing power, looks for an average inwage levels during current year, but points allaying crease , recent factors which have some v/henever has retired as Vice-President and General Man¬ Textron, been • thermometer and who will advise just how far America can assume obligations of ERP rea¬ the need for extensive plant sons: ir-odernization Inc. consideration in Marshall Plan. Elmer P. Bradley ager ROOS* F. Econometric Institute, The Mr. Roos, taking into Edward F. Southern New England Telephone Company after more James DeCamp Wise, recently than 41 years' service. Mr. Brad¬ stated that the major portion of ley is succeeded by Lucius S. earnings was being pumped back Rowe, formerly Assistant General of the President The President, Cabinet, who will honestly read bed." 1948. 15, in, political a CHARLES By , reveals Hutton letter need of able "doctors" in month. be in by 28c Humanity F. Edward without em¬ share pay¬ a must Subscriptions against $14,544,022 for the cor¬ responding quarter of Earnings per common at $12.75 able at the rate of $19,133,619 were stock their of ployees Net sales for the fourth quar¬ ter Inc. their Pitney-Bowes, Can Further Wage Increases Be Passed to Consumer? * "Doctors" to Cure Ills of Thursday, February 19, 1948 CHRONICLE FINANCIAL & billion rate at the end $6.5 1947. They ceed current likely If in of ex¬ national of cash receipts are $48 billion un¬ substantially. exceed to taxes to 1948. levels Federal income less unlikely are billion $7 At $4.0 a cut are present tax rates are continued, the Federal receipts would there¬ fore exceed expenditures of $37 billion by a huge figure which in itself would be highly deflation¬ ary. offset It would be only partially by increased spending by city State, county and ments. govern¬ v /. . the all-im¬ portant question of what will hap¬ but would make possible wider with the quacks who eventually increased. * pen to wages and salaries. Will ownership of the company. killed the'patient. (3) An increase in net exports: they increase sufficiently to over¬ * it it "Capitalism, free enterprise, the Production for net export like¬ come the deflation arising from Stockholders of the Connecticut profit and loss system has died in wise creates current purchasing excessive Treasury receipts? ;; / Light & Power Company will be one nation after another through power unmatched by a civilian The value of private domestic asked to approve an increase in the negligence of those respon¬ supply. product1 has for many years been authorized capital stock at their sible (4) An increase in the value of closely correlated with the value for its maintenance and residential construction: Although annual meeting on March 17. This vigor. Only in the United States of salaries and wages of all pri¬ increase is being sought to enable and in Canada does it remain residential building may be re¬ vate industry and government enthe company to develop a plan alive, but fearful of communistic garded as a consumers' good, insti-. terprises.In fact, deviations from for financing its expansion pro¬ germs in foreign lands. The basic tutional factors are such that it is the line of relationship or regres¬ for the consumer to sion have been negligible over the gram which is expected to require issue facing us today is just this customary between $20 million and $25 mil¬ —Americanism — or Communism! pay down only a small part of the whole range of a fourfold increase the whole in the value of salaries and wages.11 That is the crux of all political; purchase price. /Yet lion over the next few years. • thorized capital of $5,000,000, This- leads to up supply at retail is not immediately „ The Bridgeport United division of the Illuminating Company reported sales of 39,486,944 kilo¬ watt hours for the month of exclusive of those to January, Connecticut Light Power & with 37,857,244 for the correspond¬ ing month last year. The New This Company. compares division Haven reported sales last 29,123,603 ©f 29,999,119 kilowatt hours month compared with a year ago. Court February at dismissal 5; . the . a The authorized preferred stock , would be increased from 600,000 Federal shares approved Indianapolis of $15,000,000 Co., against Hazel-Atlas Glass Glass Co., value, but par an par 1,704,000 Corning Co., no but stated value of $60,000,000. Authorized common stock would be increased from no Hartford-Empire Owens-Illinois of aggregate stated value of $30,000,000, to 1.2 million shares of anti¬ trust suit brought by Turner Glass Corp. - . * * * On . million shares no-par no par to shares. 2.5 social and ernment One ism labor issues; all gov¬ and mandates. controls American¬ will gain will survive! system, not two; or Communism strength. Only one the face of "Show us where on this earth has there been a coun¬ try or which a form of government by collectivism, communism, (Continued on page 39) >. Tifft Brothers Connecticut Securities Members New York and Boston Exchanges Associate Members New York " Exchange PRIMARY MARKETS Curb ' Information Hartford & CO. NEW YORK STOCK Hartford 7-2669 Hartford governments: Such a represents cur¬ generated purchasing although ' the goods pro¬ rently power, duced or services • paid for by the consumer. (6) A general increase in wages and salaries: Such an increase is itself conducive to unbalancing and Waterbury 3-3106 Teletype NH 194 Danbury 6600 Bell supply-at existing prices,/because retail prices tend to lag manufacturers' prices, par¬ ticularly when business is in an mere tions listing of these condi¬ inflation¬ have rapidly died suggests that the pressures 7-3191 * York: BArclay are not *Summary New New York Canal 6-3662 rendered 7-3542 System Teletype: HF 365 Mr. Roos at of the the remarks American of Man¬ Association Personnel Conference, Chicago, 111., Feb. 17, agement 1948. ' Consequently, it must be expected that deficit.. usually A EXCHANGE New Haveii 6-0171 New London 2-4301 and county ary . MEMBERS by spending ment and business inventories. and Connecticut Securities CHAS. W. SCRANTON , in deficit Federal, state, city (5) An /increase upward trend. They also increase the demand for durable equip¬ Primary Markets in Statistical repre¬ sents income t.o some one. demand Stock construction the of value increase substantial a in and salaries this year will the aggregate domestic wages boOst product. Since the economy is al¬ ready operating at capacity with respect to its labor and raw ma¬ terial supply and practically at plant capacity, such a boost could be achieved only by price in¬ creases. These increases, in turn, demands would lead to new wage and the spiral of the past years would continue into 1949 or 1950. This, leads up tion. How crease to the $64. ques¬ much answer can a wagfc in¬ for 1948? An of. is .indicated be obtained by .study¬ ing the first rounds of wage, ne¬ gotiations. Settlements range from about 10% over 1947 for certain industries to around Although a pattern has not low-wage 7%. 1 Computed by The Econometric In¬ stitute, Inc. from data published ' in Income Supplement, Department of Com¬ merce, July, 1947; pp. (Continued 3 and 5. on page 35) Volume 167 Number 4674 THE COMMERCIAL " Michigan Brevities « Gross of revenues Detroit Edison the for Co. .the preceding unprecedented heights. the total above roll in the 1947 Pay increases and to 13%3> paid wages 1946, operating being in Fuel costs $30,000,000. pay* of 45% excess were The to proceeds discharge, its Domestic nearly being Jan. electricity, steam and gas each set new high record.. *; •' ;; Net income for the This share, and per net with compares 1946 for of equal was share the on to The $1.52 6,995,904 proceeds chattel a and $10,631,040, outstanding at Dec. per 2, in 1946 of dustrial '. «-vi ■' Dollar the yolume of trading in 1947 was $41,491,002, shares changing which total December year with 3,408,746 hands, of alone accounted for Co., Co., 332,332 shares.. Peninsular . 000 ; Co., Davis & Co., Avco Manufacturing Corp. (unlisted department), Detroit^ Michigan Stove Co., Industries, Motors Inc., Gar Wood and General of troit,_at $1.25 ing capital. sale exchange for each $100 of de¬ bentures four shares of its $1 value common stock. The par offer will expire at 3 p.m., June 5, 1948. ings. of the Manhattan Co., Air 7 stock7 fied list of work-; On Jan. U. Army S. a stock, A stock, Manufacturing $3 owned The net the by proceeds the sale of the class A stock will used be for the by purchase the Kerr firm of machinery and for additional ital. Current 1947 totaled rent working cap¬ assets at Oct, 31,, $662,758, and-cur¬ liabilities, $378,464. - ' if if if ; . First of Michigan Jan. 28 participated in public offering of $60,000,- C00 New % & Co. and Wm. C. of Detroit, and E. & Roney & Co., H. Schneider Co., Kalamazoo, participated the public offering of 399,- in 990 shares Corp. $5 stock at of $28 which sue, account Corp., was common share. The is¬ was of sold for General the Motors if Co. present strengthen the : | ' "An address the series ciation of and due E, interest. at 1978, The 101.43% offering was arm (Continued before his views believe by Motion Net & Truck bonds due 1968, offered Dean Arbor, fered W. 40,000 of net the Titus Feb. on par Co., The established of¬ . Broach ($5 per share), proceeds to be 1947 records for Cook new Plaint & Varnish Co., Kansas City, both in sales and profits. Net sales wtere $27,495,002, an increase over* the previous 31%. of year profits, before provision eral and State income $4,686,691,or Net for Fed¬ taxes, were over 1946. 49.8% After come providing $1,829,000 for in¬ taxes,- and also for the ment of dividends share the on pay¬ the on stock common $12.38, compared with $7.58 and Stix G. Edwards & & Co., all of St. , earnings * ff of '* . Hussman ex¬ : Re¬ the previous year. After de¬ ducting preferred dividends, such earnings were equivalent to $3.99 / Asso¬ America, Los Angeles, share outstanding compared earnings of $2.72 per share for the year 1946 (after al¬ lowing for two-for-one split ac¬ tually made in: 1947). Net sales for 1947 were $15,154,856 com¬ common Dec. on 31, 1947, with pared with $9,853,263 gain of 53%. ings were in 1946, a 1947 sales and earn¬ the largest in the his¬ tory of the company. Sales in the first half of 1947 were the year 30, 1946. % „. (par ' for * % Glass Fibers, Inc. common stock / 7* Utt ended Nov. . share common $8,214,438 $1) at $10 net proceeds to pansion and per share, the be used for working if( Operating souri (H v # revenues Pacific ex¬ capital, and to pay RFC loan. RR. of the Mis¬ in Dec., 1947 $18,894,440, compared with $15,698,533 in the same month in 1946 and $14,317,359 in Dec., 1945. For the full year 1947 they were $199,622,368, as against amounted to $174,495,869 for 1946 038,534 for 1945. and $218,- Net income for Dec., 1947 totaled $1,691,956, com¬ pared with $2,500,231 in Dec., 1946 and deficit of December, 1945. Net the 1947 was a net year (Continued $4,921,362 in income for $8,271,925, 38) on page Bought — Sold — Quoted follows: ities $45,000 to retire liabil¬ which the Berkshire Fine Spinning com. is corporation purchase of Acme Broach Corp. publicly at $7 per share. (Ky.); $65,000 for acquisition of property near of a L. A. Charles A. Parcells & Co. 1919 Milan Chicago & Southern Airlines Old Ben Coal Collins Radio St. Louis Public Service "A" Commonwealth Gas Southern Union Gas Consolidated Dearborn Southwest Gas Producing Delhi Oil Co. Southwest Natural Gas Ely & Walker Dry Goods Taca Airways Tennessee Gas & Transmission the and building thereon; (Continued on page 36) . Darling Company ' Members Detroit Stock Exchange Estimated Earnings for 1947 $1.25 per LOUIS LaPIant-Choate assuming in connection with the erection ST. used as be company also proposes -to place privately an issue of $600,000 4%% debentures and $250,000 6% debentures (subordinated). Peltason Jenenbaum Co. LANDRETH Hearst Consol. Publicat'ns A Kansas City Pub Serv. com. Kansas City Pub. Serv. pfd. Stix: & Co. Western Natural Gas INVESTMENT SECURITIES T DETROIT 26, MICH. Telephone Teletype Randolph 5625 DE 206 i 509 OLIVE Moreland & Co. Member Detroit Stock Exchange 1051 Penobscot Building DETROIT Bay City — 26, MICH. Lansing — Muskegon L.D.240 Texas Eastern Transmission Velvet Freeze . Building BUILDING ST. LOUIS 2, M0. Teletype—SL 486 Share Michigan Markets 1 7 30, Corp. to Penobscot Nov. Dempsey-Tegeler & Co., of St. Louis and Barret, Fitch & Co., Inc. of Kansas City on Jan. 22 participated in the public offering of 343,000 shares of for Calif., Jan. 15, 1948. of -common are The 639 * * ended year Ann publicly shares Acme at & 9 which Established * l i 100% at Gulf Public Service Securities and Exchange Com¬ mission covering 80,000 shares of stock, 7 heavily oversubscribed. (Mich.) * Caster Corp., Albion, on Jan. 30 filed a registration statement with the common This Corp;, common (par $5) at $28 per share. offering wasoversub¬ scribed. per frigerator Co,, St. Louis, for the year ended Dec. 31, 1947 were $1,602,516 compared with $1,003,369 Johnston Mr. Picture if Northeastern Water . about 38) $ 5% sinking fund collateral Sons of democratic on page City plant last St. Louis Co., A. should we Aviation were Louis. our an Texas and interest, were Metropolitan per in the trust strife-torn world. does not refunding mortgage 3^ % bonds, stock oversubscribed. Service Telephone Co. ap¬ sees, ' . * Aviation value per if The Bendix par York He dix stock . $10,000,000 pansionist mood. His rose-colored He earnings do Among those participating in* Mr7 Wallace does not war. per the public offering on Jan. 22 of us her. * per of $ Mr. by peace Communist Russia see share. These # , - 7 . plan. prevailing foreign policy as an imperialistic plot hatched in Wall Street by capitalists who are al¬ ready counting the profits of an¬ other stock. cents equiva¬ tion umbrella, and he an understand to 73 $5,584,755, prior preference stock, the jnet earnings April. of Munich./His plan isj more likely to lead to .war "than to peace. Mr Wallace says the tiding to do about Russia is to try De¬ the on reminds our Corp., : Wallace proposes Wallace - to book value of $11.28 per stock outstand¬ common from in¬ surance claims covering loss of profits nor have they beeri charged with the continuing ex¬ penses resulting from the destruc¬ the glasses distorted / 7 . troit, ff , sh^re.v The com-v was June 5, % Mr. priced at, was accept the debentures up to 3 p.m., On Jan. 27, Watling, Lerchen Wallace earned a Newhard, Cook & Co., on Jan. 27 participated in the public of¬ fering of 399,990 shares of Ben¬ G. subsidi¬ preference lent to ) not include any recovery peasement and disarmament. Give Detroit. of Co. share and the latter issue stock common or¬ There's the Australian $6,940,418 in the second half. The ing at Dec. 31, 1947. Sons. the on company Idok at them. • $1, of Kerr par issue former per of participating $3, and 110,080 shares par common The , A. new ——-—— reduced operations during the second half of the year were due primarily to increased shortages of sheet steel, according to W. B. McMillan, President* Working capital at Dec. 31/1947 was $4,268,178, an increase for the year of $1,298,2Q2. Net worth increased share of Bitting, and —————— and $1,368,911 - Co., For the fourth quarter' of 1947 the b.y day¬ dreaming or Eric A. Johnston repeating mis¬ takes of the past. ! Today/ America is debating three approaches to the goal. Let's ' 7 Co., & Inc. Co., and dends are af- in & aries/amounting to $143,403,161 for 1947, and net earnings of $15,561,228, equal to $3.59 per share oq the 4,253,019 shares of common stock outstanding at the. end "of the year, after .; deducting/ divi¬ and: sta¬ > Moore Company reports excluding those ' of its British ' world Co., De¬ 100,000 & offered class of ; diversi¬ - der bility Navy. U. Carr publicly shares can't can't gain the; S. ^ 28 ? Stix & sales, mean 'high /that \ye in The Monsanto e , troit, stakes investment participated Smith, Edwards & we*can e industrial customers. of - approximately 2,000 * - purposes. Louis who Inc., Jones jT h is/time sp ftord- to' b the and Co., also / v(r ohg/W Force, Ordnance ~ - * be bank and for D. Jones & Co., I. M. Simon & Co., Stifel, Nicolaus & prosperity and Inc/is/ It is also said to have Wall Street, New York, N. Y., will the offer. and ay peace proceeds will outstanding Edward prosper¬ we St. Gardner, common human yearn¬ 40 1948, for exchange under apart on what common offering were:. Newhard, Cook & Co., Reinholdt & „ thisi Its customers include National Bank of Detroit and The Bank bje pofes at Monsanto how to achieve of plastic protective cover-' U. :S. >has irrAmerica. But production and; the underwriter. in 1 unanimous Inc./De/: the Seal-Peel, engaged in mon Detroit Steel Corp.'has offered holders of its 20-year 6% sinking fund debentures due July 1, 1964 • share, the net V per: Wallace peace-and net repay The ity—!■ guess that about makes-it de- ;'/'/■/ common of Seal-Peel, at 75 cents per Corp. out for come The to 1958 $100 for the preferred bankers it won't shake you out when I tell you for peace and prosperity. Since «Henry ; \ - shares (par $1) and general corporate chairs 1 m 1, loans totaling $10,000,000 sure your A. H. Vogel & Co., Detroit, on' January 21 publicly offered 60)-/ ing.''.:':'''-- Oil Corp., Metal Products Corp., Parke, Udylite ; McClanahan Gerity-Michigan other Use. j* /» The ten most active stocks during January were:-Detroit Edison of I'm that April 011 purpose proceeds to be added to -/ The Detroit Stock Exchange re¬ ports that trading volume in Janu¬ ary, 1948, totaled 228,055 shares having a market value of $3,240,- 672. /•* r* * ' stock used of i current^construction-pro-.. ■ Michigan or any announces stock. * unse¬ and the March to the rate of $57.50 for the industrialist • machinery' on conveying equipment for in- " > . A in used signing,, manufacturing, selling/'! erecting and servicing all types - to 7?'/**■::'F:,//: V./ ::/ to be are for the part, gram. speculation. The a inventory, to reduce pcrated in 1947 accom¬ $60,000,000 mortgage company for the as mortgage proceeds of which • $1, par balance added to working capi¬ tal. The corporation was incor- shares 31, 1947. were used, in retire, before • maturity, the remaining outstanding $30,000,000 4%. bonds and ; to - repay short-term bank borrowings. The remaining funds are being spent 50,000 stock, cured accounts payable plished a\ bond financing operation,' the net . ' convertible into commony-4— prior self-help for Western Europe and some denial by us. Says key Word is "rehabilitation," and cau¬ tions against loading program iwith niggling restrictions;, and f haggling conditions. payment of account secured by- " which share net $1.59 equal to was offered common per $11,112,568 after charges and provision for Federal income was taxes. publicly stock on • The stock is support of Marshall Plan, based , Co., Detroit, of Planet Corp. of Lansing at $2 1947 year 16 shares of a Leading if Smith, Hague & Taxes totaled $13,000,000. Sales of to nation-wide underwriting group of 110 members headed br Smith, Barney & Co, New York, on Feb. 6 publicly offered 250,000 preference stock, series B, no par value of Monsanto Chemical Works at $101 a share and dividends. Association of America . U shares of $4 cumulative By ERIC JOHNSTON* used indebtedness 7 Credit Corp. if $24,000,000. to be are (807) Missouri Brevities A President, Motion Picture net above the previous year, the fuel bill / employees brought new CHRONICLE Middle Road!" but balanced against this, expenses also reached year, FINANCIAL m yedi; ended Dec. 31, 1947, totaled $106,960,000, a new high which was 18% above the & • STREET SCHERCK, mCHTER COMPANY Landreth Bell ; Teletype SL456 St. Louis Building 2, Mo. St. Louis l.Mo, Garfield 0225 l. d.123 Members St. Louis Stock Exchange 12 FINANCIAL & THE COMMERCIAL (808) and subsequently to 1947. The year 1945 was the year of Total figures are in thousands of dollars of victory, Rowen Named for SEC President selects peak deposits and assets. Bank and Insurance Stocks Re¬ Boston President Rowen It. as .Securities and Exchange ;ion, the the of member a Commis- fill to v Dec. on 31, 1947, of James Whether proposition to be finally consummated, it may institutions and to review their the two compare certain significant ratios. tabulation also compares Continental ($000) $25,000 75,000 8,150 Surplus Undivided Profits Rowen — ($000) $5,000 $108,150 Capital Total Regional the for Funds Capital Deposits SEC $12,282 U. service since 1934 formerly principal at¬ torney for the SEC. His term as Commissioner will not expire School, Law member of the Massa¬ chusetts bar in' 1926. Samuel S, Allen Joins (Special to The OHIO —Samuel Allen, formerly manager of the buying White & with Co., has become asso¬ Clark Fahey, & Co., Union Commerce Building, Cleve¬ land, members of Cleveland the Stock Exchange. 539,144 447,284 1,373,604 74.9% 260.9% 28.4,% 36.8% adjustment for 258.2% 449,401 92.1% 25% 259.9 % " of Deposits number of Dec. Earning Book Net Oper. Divi- Assets Value Earns/ dend $ $ $ were Increase i of the Sun of Canada all-tirre new are a 24,679 49,333 21.23 0.91 0.80 68,115 176.0% 163,093 •22.67 *1.77 •0.80 162.2% 33.5% 12,282 44.6% 1,193.0% 188,437 1940- 141.3% in various sections and 320 City as follows:—(1) York New of Street: Street; at 49th Street; Brook¬ Also, United Nation branches are maintained at Lake Success 405 East 42nd Street, New York City. market faster rate. a performance each stock of Sun Life policy an in the textile advantageous by the New York State Legislature to the "New York Chemica' Manufacturing Co.," permitting it to manufacture chemicals. Ar amendment to the charter on April 1, 1824 allowed the company also in the banking business; the chemical business was aban¬ In the panic of 1857, it was the only bank in New in 1844. maintain to The specie payments and was therefore dubbed "Old title of Chemical Bank & Trust Co. was present It goes Continental Bank & Trust Co. of New York. may banks from Asserting 47.1% 39% ~ __ 41% 4.4% THE CHASE NEW JERSEY no concrete signs of set-back SECURITIES on high prices and business expansion culminated in buyers' strike. price control program will not correct present inflated Wants government out of business, and position. reforms. tax Sees need for urges income capital and extols free enterprise1 new system. I " • 4 A ' This is my swan song. And after listening to me for three years, well imagine how happy many of you will be for the opportu¬ nity to listen to what mind what the viewpoints. outlook for bear to you in fresh some wondering not the neces¬ reflect opinions 1.'. f , J. S. Rippel & Co. >20 BBOADWAY, NEW YORK Established 5, N. Y 18 Clinton Telephone: BArclay 7-3500 ' N. Dept.) Y. Phone—REctor 2-4383 most It NEW YORK 5: 67 WHITKHAU. 3-0782 . ' BOSTON 9 CHICAGO 4 10 Post Office Square 231 S. LaSalle Street HUbbard 2-0650 ■ good I honestly don't believe to predict with any degree of riccuracy beyond the first few months, is possible for because there FRAnklin 7535 BS-297 CG-105 1947 There no are PRIVATE WIRE SYSTEM CONNECTING: 4 Providence, Enterprise 7008 a period of rising costs, during which talk about, problems before—as the head of a , think will act on ever and more money family and as a businessman. prices pocketbook will and ances, and you affect your bank bal¬ your will feel and hear *An address Portland, Enterprise 7008 Detroit, Enterprise 6066 at American by Mr. Whitmarsh of National conference annual Wholesale Grocers As¬ sociation, Atlantic City, N. J., Jan. 19, 1948. r _ living. Business will be or when the pressure of all will ease off, but ease off it it always has done in the as •• , , . 1. Prices are going to come down when the people won't pay them. Demand sets prices but prices don't always set demand. Right now I see a great parallel with our eco¬ nomic position in 1920, after the first World War. If you will re¬ member, the demand in 1920 was terrific when the recegsibn hit us.I The public just decided that prices were too high and stopped buying. When the high prices—arid a lot of business organizations as well— washed out, trade was re¬ sumed but at prices that attracted were customers. At time, that prices set the demand. In the 1930s, when the big depression" hit us and" prices were brought down to a very low er point, there was no buy¬ response anyway. The any prices just failed to create demand. Here is the big dif¬ ference. still up In 1920, there. for the demand was It had. been building five or six years and it responded to prices, and there fol¬ lowed nine straight years proving business, filling SF-573 NEW YORK, BOSTON, CHICAGO, TELEPHONES TO: Hartford, Enterprise 6011 Russ Building YUkon 6-2332 . CLEVELAND, PHILADELPHIA, ST. LOUIS, LOS ANGELES, SAN FRANCISCO • • time, Rising SAN FRANCISCO 4 - Michigan 2837 of Building, of 210 West Seventh Street LA-1086 factors that would indicate a set-back or a depression for 1948. At least for the first six months this than NY 1-2875 . many one another. concrete signs, at upon and Wall Street LOS ANGELES 14 > person any are depending you INCORPORATED & F.. L. Whitmarsh will 1948 will be year 6EYER & CO. LIFE Washington 6, D. C. a deci¬ of as BANK and INSURANCE STOCKS $3,837,724,159. Life this materials, transportation, as well rising prices. Employment will reach a new high and then slow down as the most urgent produc¬ tion demands are met, or as prices take the urgency out of demand. WHOLESALE MARKETS IN Total Assurances in force: ASSURANCE COMPANY ;• "I MArket 3-3439 1-1248-49 (L. A. Gibbs, Manager Trading 1891 St., Newark 2, N. J. high cost of past. *t ! the of where con¬ it will be Sun —— will, sions. $380,659,514; from: of theme I tory profit margins. There will be inventory problems because goods are more costly and will tie up more money. I don't know of the officers our of us are would like many be. squeezed by a shortage of work-r ing capital and higher financing costs, and because of higher oper¬ ating costs the volume of business you do may result in unsatisfac¬ thoughts and do good Debts will rise. own my A might more have express are 1948 <$> that I and bad. ^ ; .. can year, Request depression in 1948 exist, Maintains • 1948 will be issued in 1871: T ransportation or vention is that | New Assurances issued in 1947: obtained Thought Mr. .Whitmarsh, however, cautions year is similar to 1920, when The Laird, Bissell & Meeds Copy of the Annual Report for Appreciation 22% is understood sarily be of interest to note the comparative growth of both 1940, the year before "Pearl Harbor," to 1945, the year . OF CANADA to Retiring President, National American Wholesale Grocers' Association to . back to 1870, in which year it was incorporated in New York as "The German American Bank." Its title was subsequently changed to Continental Bank of New York and in Bell Teletype—NY SUN 1947 By FRANCIS L. WHITMARSH* of these locations would appear to be district; both Chemical. , ... 2-17-48 Some Basic Foods—For to ■ was Dec. 31, 15V8 Chemical's history dates back to 1823, when a charter was grantee during the year: $2,021,889,123; from that, under the proposed plan, the capital, sur¬ plus and undivided profits of Continental, in other words its "book value," will be distributed to the stockholders (plus a premium of $1 a share). As of Dec. 31, 1947 this book value was $24.56 per share, which is above the current asked price of the stock at this writing. Jhe acquisition of .Continental by Chemical would give the latter office nearer the center of the financial district, and also a brand Members New York Stock Exchange J 25.0% , —and decisions can be both $101,914,657; a, ®0.80 120.9% 14, 1948, has been as follows: It Street, New York, near Wall Street. Two branches are maintained one in the textile district at 512 Seventh Avenue, and the second ir. the Grand Central district at 345 Madison Avenue. Circular Total benefits paid s:nce the first be 25.0% *1.61 44.6% Continental Bank & Trust Co.'s main office is located at 30 Broac d to policyholders and i beneficiaries ad 142.6% •24.56 202.0% interesting to observe that the rate of growth qf the smaller institution has been substantially faster than that of the larger. In 1940 Continental's deposits were only 9% of Chemical's, whereas in 1947 they represented 14.7%; similarly, earning assets in 1945, were 9.2% and in 1947, 14.8%. Continental's growth in book value per certainly on 33.5% 148,976 121.4% Continental r 1 230,6% 54,636" 75,961 1,248.0% Bid Prices—— 79.1% < Broadway, near Worth Street; (2) Tenth Avenue at 23rd (3) Fifth Avenue at 29th Street; (4) Broadway at 44th (5) Madison Avenue at 46th Street; (6) Lexington Avenue Street; (7) 11 West 51st Street; (8) Eighth Avenue at 57th (9) Madison Avenue at 74th Street; and (10) 50 Court Street, few of the highlights: C $. 5,635 72,858 1947_ The 73.7% NATIONAL BANK during 1947. Here tnay $ 78,082 of •jj $ 204,765 Canada's largest life company ' are: Percent increases Loans & NAWGA. \ *1.80 figures Discounts governors j equivalent 25.0% 8,491 of : h 11,336 1940_ 1945. 31, 31, or i 25.0% 2,61 25-4% U.S. Deposits S established by iV the 1945, 48.1%. 38.8% -Per Share- Feb. Several branches are main¬ New York, near Cortlandt Street. tained 1929 to Life Assurance Company pa 28.4% 87.0% Govts.- Capital $202,055 adopted in 1929. ■ The 77th Annual Report Benefits 1.80 CONTINENTAL BANK &. TRUST CO. Chemical Total Bullion." . f 1.80 „ 148,976 • 71.3% 78.5% Assets of Continental's history •' records which 2.60 ♦3.08 •43.26 1,008,298 in dividend stock $ 38.95 *40.02 154.8% 420,749 47.3% . share has also been at Chemical Bank & Trust Co.'s main office is located at 165 Broad¬ way, York a 124,871 790.555 $50.03, $3.85 and $2.25 for 1945 and $54.08, $3-26 and $2.25 for 1947. are adjusted accordingly, 18,379 54,636 $1,413,980 Percent doned PROGRESS 6.5% - 1,008,298 Assets Percent to engage reveals 219,031 108,150' 1,284,087 1947- Earning Assets: A. J. for department ciated 871,655 1,524,161 Divi¬ dend $ . $52,211 75,961 135,649 449,401 Total Assets Chronicle) Financial CINCINNATI, S. 77,905 100.C51 12-31-47 lyn, Fahey, Clark Co. Staff Obligations.... Discounts.— & Earning Mr. Rowen is 48 years old, was born in Boston and was graduated from George¬ town University and the Boston University Law School. He also Harvard Government S. Loans until June, 1950. a $ •After adjustment for 25% stock dividend in 1945, the equivalent figures are: $28.34, $2.21 and $1.00 for 1945, and $30.70, $2.01 and $1.00 for 1947. Percent increases are adjusted accordingly.. $188,437 $394,152 420,749 Other Securities was becoming $ 1940_ % 2,282 8.4% Capital Funds, Perc't of Deposits been attended 31, Dec. 31, % Over 5,000 $1,284,087 — Rowen Paul R. in government and $ Increase- Over % Dec, Novem¬ has $ It is ber, 1941. He is a Democrat and Earns. $ Date— Administrator since % Dec. - - has been Bos¬ ton Net Oper. Value Funds Chemical i ' ' of sion. Mr. Chemical •After not the or interest of Commis¬ the Book Assets Deposits1 S 31, 1940_ 31, 1945_ Bank & Trust Co. Caffrey, the Chairman Earning during recent years. '\ Chemical is by far the larger institution, as the following figures show from their respective balance sheets of Dec. 31, 1947, The December J. Loans & Discounts progress caused by the resignation banking and financial circles is the in news-of-the-week The proposed acquisition of Continental Bank & Trust Co. by is vacancy U. 8.' Funds Date- Feb. 12, Truman, on • Govts. Capital This Week—Bank Stocks nnounced the nomination of Paul ' • • ' CHEMICAL BANK & TRUST CO. . Dec. ' .< By E. A. VAN DEUSEN Chairman. as ($000). Per Share- gional Administrator to succeed J. Caffrey who recently James resigned Thursday, February 19, 1948 CHRONICLE lated and mands. of im¬ accumu¬ subsequent normal de¬ By 1930, all demands had been met. There (Continued was no on page backlog 36) Volume 167 THE Number 4674 ing, it is well to be cautious. As the longer, term perspective, when, as, and if, some decline does take place in business activ¬ ity, it. will be moderate and of short duration. I do not anticipate a repetition of the 1920-21 break. "An analysis of the impact 6f No Recession In the Says does not mark 1920-21 will recession of the a type, but, have slump price able it on was able Dr. Jules Backman, Dr., hardware sales On record goods production was 43%, and steel fell 50%. No goods such 4 times decline production are The level. more than (Snecial at great as during the all-time in was 1947 almost Buckley Bros:' Financial Chronicle) , West 530 Sixth Street. Mr. Baumgardner was formerly with Crowell, Weedon & Co. Mr. Tor¬ great as as The ANGELES, CALIF,— George M. Baumgardner and Robert W. Torney have become associated with Buckley Brothers, in the 1936-39 as period and 2xk times in seems* an total to LOS that ^reported $2.2 billion which was able reflected mainly in the dur¬ Backman a the other hand, the decline in dur¬ goods industries," Dr. Back- durable Two With ' 13 ney was with Herrick, Waddell & Co. and E. F. Hutton & Co. war years. * Associate Economics of ately ahead." rion-dur- moderate decline of only 5%. production (809) in the months immedi¬ probable 23% was goods industries recorded^ business. Professor CHRONICLE "Although total indus¬ trial production in 1921 lower than in 1920, the the 1920-21 depression shows that contrary, on sobering effect a said; man to Offing commodity COMMERCIAL & FINANCIAL New at York Univer¬ sity's School r ' - * • ( of Commerce, Accounts, and Finance, told the i It's the old familiar story Pennsyl- v a n and a Atlantic Sea¬ board Hard¬ in Asso¬ ware ciation Con- t i v e n o n at * ' i Philadelphia F that b. 10 "The on de¬ e cline in prices the long-awaited depression." It's an old familiar story, the story of Life forget, Insurance. food does not mark beginning Jules Backman 1920-21 the old it's So familiar it's easy to the or of our Jives it's easy to type of keep reminding easy to overlook, dustries, of transportation systems, of roads, of so much so a part ignore. That's why Best of all we "The basic question is not are these price declines desirable," Dr. Backman continued. "By any people living securely. Millions of dollars for been and are in equal opportunity for all. A We think Life Insurance is a good business be in., to much too high. A prices would be a most healthy development. Rather, the $64 question is does decline an better America. gether. More children being educated. Elderly standard selected, food prices have worth-while enterprises. many More families kept to¬ you. development of farms, of utilities, of in¬ food Seventy-five million people The John Hancock insures more are insured in the United States than eight and this one-half million — in every nine one sharp cut in prices mark the beginning of a sharp business de¬ pression? the Is this the repetition of 1920-21 depression Dr. "a which ^Balance Sheet— December so have forecast?" many persons pointed out that price decline in the basic severe ASSETS commodity markets, if continued, would have sobering effect upon However, an examina¬ business." tion of the varioqs forces at work the speaker to conclude "that 1948 will be basic another good 'U. S. Government busi¬ the large mand. divisions is difficult ... Public Utilities Railroads . . , t . ... . . $1,771,149,779.55 ,V:'-/' J . Policy Reserve . .• of bus;ness activity so long as the industry can continue to sell, all of the cars it produces, and so long as the various heavy durable goods industries, such as farm equipment, railroad equip¬ ment, electrical building, supplies, continue to very high levels. While cern has been Reserve for Year's Dividends mind is in to whether that moderately point , . . Policies con¬ keep . 92,108,469*36 . . . . . . . 'J ! Company's ... . , . . . Reserve for Reserve for ultimate 196,650,360.94 Reserve for 61,843,436.54 > • . • , '; ■. other Assets . . . . 7 26,196,830.26 . ' . 17,077,692.28 32.808.570.10 sundry items * 44,795,597.13 1 5K » , . * , Contingencies 4,669,000.00 31.128.633.11 3,102,467.08 ••••*,♦* .. •w higher than it was in the prewar In the efforts to measure 45,000,000.00 Special Reserve for Group Insurance .. ♦ Cash in Banks and Offices > » Reserve for Accrued Taxes . substantially ♦ changes in . . . building art.'vitv will remain * 11,549,892.39 Prepaid Interest, Premiums and Premiums due and deferred and building is continue t , - >1; ... 30,557,552.00 Death, Endowment and Disability Claims in settlement 1 . Interest and Rents due and accrued * » f' » » • policy valuation standards on 139,220,999.05 > 1 , Home Office and other Real Estate in eral level of to Policyholders in 1948 1 1 $78,001,521.00 14,106,948.36 Mortgages Loans and Liens at down, the gen¬ or up > . , ♦ to 1 : some con¬ expressed important Preferred Real Estate nection with building activity be¬ cause of the high level of costs the or Common and operate .... Guaranteed due or not yet • ' 1 automobile Deposits and other items awaiting order - 1. Stocks Owned .$1,783,547,990.00 ♦ • m Reserve for significant decline in the level any > > 4 . . 86,027,748.63 644,465,550.31 128,550,773.47 164,424,135.95 . . Industrials to "visualize . . . 36,719,279.6^) . States and other civil volume of deferred de¬ It . $710,962,291.50 it/; |Dominion of Canada year. sustaining force Bonds and Notes Owned activity will continue to be ness liabilities a led The 31, 1947 Backman f. Wt ' cj It Surplus to Policyholders . Total • 166,520,274.49 * period. the Total Admitted Assets precise level of this activity, this fundamental point . $2,228,963,772.14 Balance Assets to $2,228,963,772.14 . be may easily overlooked." Dr. Backman cannot eral ignore warned the spots have danger All securities "we that that fact sev¬ been are valued in \ conformity with the laws of the several States, and Securities carried at $495,893.00 in the above as prescribed by the National Association of Insurance Commissioners deposited for statement are de¬ veloping in the business structure; purposes required by law . These include the relatively high level of food prices, the uncer¬ DIRECTORS tainty created by the recent de¬ clines in food nence of a prices, third the immi¬ of round elwyn g. preston shortages of working canitai. some These in the months speculate in inventories overextended come john m. hancock - william m. rand charles * ralph lowell j. diman albert m. creighton edward dane joseph e. o'connell daniel l. marsh charles e. spencer, jr. carl p. dennett paul f. clark byron k. elliott karl t. compton to be¬ credit-wise." speaker stated that his "op¬ timism the or james v. toner jr. guy w. cox ahead. Certainly this is not the time to The sidney w. winslow, charles f. adams will have to be closely areas watched frank g. allen charles l. ayling wage increases, and the development of for 1948 is hv tempered development of these signifi¬ cant danger spots. It does this time, however, though those areas of will sufficient to reversal of seem at be nificant "J dicting lapse at of 1948. that the the end I the am boom of a MUTUA sig¬ LIFE present not will , INSURANCE BOSTON. if col¬ that • )i COMPANY MASSACHUSETTS New England's Largest Financial Institution i • pre¬ period. I merely would like to emphasize that when danger- signals are ■ as high level of business activity during the first six or eight months paul f. clark, President weakness cause t i guy w. cox, Chairman not fly¬ A % COPY OF THE COMPLETE ANNUAL "if t .....A ." ' - . • ■ REPORT 1 WILL * , - • • BE SENT ON "' * • REQ u E s7 14 THE COMMERCIAL (810) /CHRONICLE FI & 'Thursday, February 19, 1948 ; Commodity Prices Capital—"Seed Com" of Onr Economy And Business By COL. HERBERT G. RING By HOMER A. VILAS* York Stock Exch, Member, New ' Rock Island & Pacific The hew Board of Directors of Chicago, Partner, Cyrus J. Lawrence commodity price break will'have salutary,, Col. King contends lost little time in disillusioning the common stockholders of the reor-, ganized company. Holders of the new income bonds and the new effect and investors, therefore,. 5% preferred received, along with the delivery of their securities, should not sacrifice holdings. cash payments equivalent to in-<s> : r~ terest and dividends for the four However, this attitude of apparThe break in commodity prices years 1944-1947, inclusive. The ent disregard for the equitable will have a very salutary effect effective date of the plan had rights of the new common stock upon world economy and those been set by the Interstate Com¬ holders seems to be fairly com.investors who became frightened mon in the case of new reorgan¬ merce Commission as Jan, 1,1944, arid sacrificed although the new company did ized. railroads. This Is "/particularly their holdings agree¬ not take over operations, and the true Wherfc voting trust of good com¬ new securities were not dated, ments have, been set up and there mon stocks until Jan. 1, 1948. It had been is no effective way for the stock will regret it. expected in many quarters that holder,to protect „his interests for First, of all, the directors would take similar some years ajt least. Even in the the prices Of cognizance of their responsibili¬ case of preferred (stocks the fcecord Mn Vilas, in stressing stock exchange industry of U. S. economy, points out its importance in stock, which also, represents old the "cries out for solution." If the United States is to continue to grow and progress in the b ov.e/t bonds, Supposedly the .capitalizations by the Interstate Commerce Commission were designed to listing of "the hew securities the give reasonable assurance of divi¬ company had filed a statement dends in -reasonably prosperous showing pro-forma earnings, for periods. As a iriatter of fact, there the period from the effective "date have/been, ipany complaints that of the plan to the consummation the reductions in debt and charges date. This covered a span of four In connectioh with' consumma¬ tion of the reorganization and have been too severe that and he neces- '/ ■ ' Col. Herbert G- King - ' • no was tual „ , ^;W7i':t;';lt knowp. gov* ernmerit support; there! . ly it is (recog¬ - $11.97; 1945, $8.37; 1946* $5.75; and 1947, $9.18. Out of such substantial earnings it was 1944, lows; holders, felt that now holding common stock, should the old bond be entitled to some consideration. particularly true inas¬ much as the Rock Island during Its entire trusteeship had been far less generous in distributing earn¬ ings to the old bond holders as interest than practically any other major railroad. This was financial in Guesses circles as . ^ been paid in full the dates of dec¬ laration have in many cases been erratic. For example, even Chi¬ & North Western, which has common dividends in every year since consummation of its earnings varied widely, some go¬ reorganization .(including 1947) ing as high as $12 a share. In a paid its $5 preferred dividend last rather petulant statement follow* year in two instalments. Although ing the board meeting on Feb. 9, this dividend had been earned by in which he commenting on a fair margin in 1946 the first "propaganda'Lput out by "broker¬ instalment was not paid until age houses," President Farrington Dec. 1, 1947, The second instal¬ effectively blighted these hopes. ment was paid on the last day of He went so far as to say that the* the year.. This dividend uncer¬ directors had no intention.of pay¬ tainty that is characteristic Of ing ^common dividends for the most of, the /reorganized carriers period 1944 to 1948. . If this state¬ distribution might to how large a out made be is ment to the of be 1944-1947 at taken its face cago paid has had serious adverse influ¬ a ence on public confidence in the^e mean that this securities., as is quite obvious from are-the earliest just a casual glance ai recent mar¬ from which common stock'hold-' ket quotations. ' ers may expect any income. No dividend could be paid on the common out of 1948 earnings un-. value it year's earnings must . M1 income bond interest and ferred dividends from the same year pre earnings, of, (payable next year) * Unless there is heart the common Chicago, Rock a change Geo. A. McDowell & Co. DETROIT, MICH.—-The broker¬ stock holders ofage firih df Mercier, McDowell Island Pacific & ing to wait at least until .quite late in the current year for any divi¬ dend action, and they may have to wait until 1949. It is not cus¬ tomary for reorganized railroads declare interest bond dividends for set or or until aside income preferred- stock the final results the ments year to which the pay¬ apply are in. Meanwhile, so far as the stock holders cerned the more are con¬ than $35 a share earned in 1944-1947 is apparently Just so much water" over the dam. Were the Chicago, Rock Island & Pacific case it situation would Firm Name Is Now 1 face the gloomy prospect o£ hav-. to .. of had been declared and set aside. - . be an isolated bad enough. jk Dolphynwill hereafter be known as George A, McDowell & Co., according to announcement made . by representative's of the house. Partners will be unchanged. tinue.in their present capacities. Organized in March, 1943, by Mercier and McDowell, at which time they became members of the Detroit Stock Exchange, the firm has been actively indentified with many popular local issues includ¬ ing Gerity-Michigrin. Corporation, Sheller Manufacturing, Electromaster, arid others. The company offices with are in the branch a Clemens in Buhl Building office in Mt. charge- of Ray B. Da vies.. Guaranteed Stocks Bonds Special Securities Is With ArthurV. Grace (Special to' The Financial /CLEVELAND; OHIO Chronicle) George — W. Bryam has become associated with Arthur V. Grace & Co., Union GUARANTEED RAILROAD STOCKS-BOMPS 2S Broad Street ? New York 4, N. Y. Telephdjte BOwling Gfeen "fl-6400 Teletype NY 1-1063 Byram Commerce Building. Mr. George in the past with , I. Griffith & Co. and prior there¬ to: conducted his own investment business under the firm name of Byram & Co. * of It is present only in free countries like ours.. ^ If today's leadership isrnot quite measuring up to the requirements* -, and the demands upon raw jnaterials, -increased businessiactivity and the great back¬ logs and continued demarid for products, companies#are bound to make money. The outlook for a renewed public interest in stocks is bright for a great deal of capi¬ tal will market gravitate as the best to the stock place for in¬ blame. The European situation greatly benefited ris the paid for our products place the It simply means all of us prices were loans and the credits which know we con¬ were be¬ ing used too quickly. Now" they will last longer and give- Etirope gave us It will require greater appreciation of each other's prob¬ lems by government, industry, commerce, labor and finance. One of the of the elemental purposes Association-r-which is the trade body of member firms of the New York Stock Exchangeis to be a sounding board of busi¬ ness thinking. Its Board of Gov¬ ernors attempts to familiarize it¬ self* so far as possible with con¬ all the over will be that Its decisions siderably . higher than had been anticipated -when we 'negotiated our spirit ditions vestment and return. by" reputable this fundamental quarters "subject. on I am/ riot going:/to take yorir time; and try to add to the excel¬ lent literature that you haVe in ofmy/life on; ri/farrri; p real dairy farm with no Saturday/ closings. <One : of country so represent may the broad thinking of our industry and-of business. Thus our organ¬ ization is a true democracy, basec' the old town meeting concept and streamlined to meet modern on conditions. Our Z Z:', ; - decisions for a long: time better chance to get on its *:feefc. toZcome/will be influenced by With the-cost of* observed rind living- dbwn, what ;,we-. have and the fear of unbridled infla¬ learned here; We will have ' a tion arid its attendant evils of 'ra¬ broader knowledge of the 'work¬ a trie ; things that every knows is the necessity of setting aside the "seed corn." The/ farmer /who fails to provide it or the farmer who cats it up gets farmer irito trouble. Venture Capital Is "Seed Corn" it, it does America. for of the excellent studies pre¬ pared good to attempt to no have lost their appeal to even the boldest of labor leaders. With im¬ proved labor relations, lower costs . myself, has received and read . ceptance the problems of the other fellow. must take stock and return to that To 'venture me "peed corn." rich of crop is the I capital Some will sprout a . products new arid wealth fpr the entire community; some of the-seed will fail to sprout, which is the factor of risk,. In this connection, the figures]; savings on a national basis| on for the last four years are a sUf*i ficienf warning to me that we are] not setting corn." In aside 1944 - enough "seed" saved thirty- / billion, six hundred million dollars, or 21.6% of our national income. Last year we saved only eleven billion,, two hundred mil¬ lion dollars, or only 5.6% of our we five national income. To ! >: / mind that simple sta¬ tistic* points tip this entire prob¬ lem of 'venture capital and cries my out for a* solutioho ''/ : r *•/"; tyhbTbye their coiih-: try;; "rather ' thariof the,/sricuritiesindustry,we:shouid keep ' this matter before oUr" congressrrieft/ regaridlesk Of /political party; * .arid/'; cdhstaritiy ^urge :/tbri As, citizens , . tioning and black haarkets * rib ings'/of our industry In the South* study'arid xeyisiori/of ourtax laws,. longer ' present, the domestic sit¬ eastr-and a better understanding te he/"" end /that there;: iriay be/ uation will be much brighter." • A ofUts. relationship to" the >welfare rilenty of "seed corn" for the /Z , /;'■ i.-; / very good base for several years off this section- of our country and future. of of made. The Stock Exchange Industry is composed of several hundred rela¬ business^ prosperity i§ .> being The- future * looks /very bright, indeed. " / \ ; . ,thp country as a Lloyd Jammer Joins Boettcher in Chicago (Special to The Financial Chsonict e) CHICAGO, Jammer has [ILL. — Lloyd R. jbecomg: associated with Boettcher & Co., 135 South La Salle Street. He was formerly officer of R; S. Dickson & Co., an Charlotte, making his headauarters in the firm's Chicago office. Is (Special to The Financial Chronici e) MINNEAPOLIS, MINN.—Don. aid H. Ricker has become asso¬ ciated with Bache & Co., Minne¬ apolis Grain Exchange Building. In the past he was an officer of , :. But in total It large and important field. We are/an integraL part of the econ¬ omy of the United States; We have played a big part in provide a ing the machinery through which venture capital—in all degrees of risk—has flowed to the industry and commerce of America as it was needed. We fully expect to be able to continue to perform this important function. We are constantly striving to do it better. We are making progress. . Demand Donald H. Ricker With Minneapolis; whole. - tively small units. Bache in George W, Byram Now nition and ac¬ Homer A. Vilas . of increased wage demands has been discouraged and strikes wave C. Edwin Mercier, Roger G. Dolphyn and Mackenzie C. Baird will'con* -mu¬ respect like and integrity; your own .desks; " However, I do Cooper a tion like to'jptill.those.; problems" down ca n n o t b e* to earthy terms and common un¬ found in the derstanding. You. iriay riot know * statute books. it, birt; I spent twenty rtwo years 7 Fundamental¬ nd, producf a e'r ■ justification evenwas no danger of these levels, be¬ for eliminating the oldf equity holders. This feeling was height¬ ing broken. Commodity prices, had, soared so high that they were act¬ ened by the large cash surpluses built up by these roads during the ing as a brake upon general busi* ness. The public felt that prices war. Nevertheless,, we now have were too high and. were a spectacle of record traffic vol¬ confining their purchases to absolute neces¬ umes and in many instances high sities. ,/. ./. , earnings, but what amounts to With lower prices, business ac¬ almost a mania for keeping swol¬ tivity is bound to increase.; The len cash, balances intact. Even where preferred .dividends have labor picture will improve..; The, there requires the. farmers ; sure some things for all our people. Cooperation sriryfo.br ing prosperity to . . years and indicated per-share re¬ sults for the now common as fol¬ levels set up thai everyone in this room, ership must work together toward better still ; far are a , pattern which has been set in the past—if our pattern of freedom is to prevail—we must accept more seriously than ever the tremendous responsibilities that are ours. We who undertake to assume that political and ~ ; —1 — — business lead¬ of vitality in the future. I am Commodities has reorganized carriers not been a happy one. of as. integral part providing venture capital to insure vitality of future. Says we are not setting aside enough "seed corn" in form of venture capital, and problem " ties to holders of the new common Sons & President, Association of Stock Exchange Firms. For Venture Capital Peningion, Golkef & Go. To Admit Horion, Smith PHILADELPHIA, PA.—Arthur Horton arid W. Albert Smith, Jr. will become partners in Pening- ton, Colket & Co., 123 South Broad Street, members of the New York/ and on Philadelphia Stock Exchanges, March 1. the Mr. Horton is of the bond ager firm's man-? department * in / Philadelphia office. John,: S. P. Makiver, general partner, and G. Dawson Coleman and Edwin H. Vare, Jr., limited partners, will retire from the firm /We hear, a great deal today of the extraordinary demand for venture capital fpr American business. This demand, springs frorri both old and new businesses, The demand/ranges from some of Our best known companies oper¬ ating ;all over the world down to shiall local J. M. Dain & Co. Venture , enterprises. capital is new With Shields & Co. The Financial Chronicle) " /.*Remarks by Mr. Vilas before CHICAGO, ILL. — William D. a; Joint .Meeting of the Atlanta Bost has joined the staff :Z of .Chamber of Commerce and the Shields & Co., 135 South La Salle Association of Stock Exchange Street. Firms, . Atlanta, Ga., Feb. 13, 1948. . . Feb. 29. - - .—j—4—; ^ Reinholdi Gardner Add Chrisfophel, Hayward , ST. ; LOUIS,. MO.—Reinholdt & Gardner, 400 Locust.Street, mem¬ the blood of business; the insurance (Special to on bers of the New York and St. Louis Stock Exchanges, will admit Arthur A. Christophel and John H; Hayward to partnership in the firm on March, 1. Mr... Christophel is Sales Manager fop. the firm, with which Mr, Hayward has also been associated, for some time. Volume 167 Number 4674 THE COMMERCIAL & FINANCIAL (811) CHRONICLE ' 185,000,000 State of Illinois l3A% and ecivreS%2 Recognition Bonds Series B Dated March 1, 1948. Principal and annual interest,.May 1, (first coupon due May 1, 1949), payable at the office of the State Treasurer in Springfield, Illinois. Under existing arrangements with the Treasurer of the State, both principal and interest on these bonds may, the at option of the holder, be collected Continental Illinois National Bank and Trust at the Chase National Bank in New York. Owing to the lack of Company in Chicago The or legal authority the continuance of {he holders' express option of collection in New York not or Chicago cannot be guaranteed but the discontinuance thereof is anticipated. Coupon bonds in denomination of $1,000 registerable as to principal if desired. Temporary bonds will be delivered pending issuance of definitive bonds. ' . . . Interest exempt, in the opinion of counsel, from all present Federal Income Taxes \ Legal Investment, in the opinion of counsel, for Savings Banks and Trust Funds in New York, -iv. Illinois, Massachusetts, Connecticut and certain other States ; y * ' * * :rV" THESE SERVICE RECOGNITION BONDS, the final part of f 946^ will, in the opinion of counsel, constitute full faith j pledged and general property taxes funds for the payment of be levied without limit may ' . v ' ?-■ x all the taxable property as to rate or amount on - - amounts; maturities .-v—-— • — and prices > — ■■ , i z-J'.'-r:*>r, "V. • »• >•:'i.aAmount-"• -v..-;■'Due '• . $7,700,000 Coupon' vy. .. '• \tJ: " »'••• May 1, 1950 "i To Yield ;* <?.: ".vis y'V v .-<••.. .'*• ... V • " ' * >1 1.10% May 1, 1951 ££ v * ' '• ' '' ' "J ' * " • H" ■ 1 * - J ■ . i ,..U ...... 7,700,000 May 1, 1955 VVY A r <■ 2 The or Price 2% ; ; May 1, 1957 1.75% 2 1-85% 2...;.:. May 1, 1956 1.95% > ' r #>1 7,700,000 May 1, 1958 • 7,700,000 2 May 1, 1959 ; 100 ' 7 . { .; 2 May 1, 1960 8,000,000 Offered'for delivery ivhen,'as, and if issued and received by offering circular - 99'/z ; . and subject to approval of legality by us Messrs.' Chapman and Cutler, Attorneys, Chicago, Illinois, be obtained in may ' ; Harris Trust anil .,►* Rat« •. V . Du^ (Accrued interest to be added) • .. . To Yield Coupon ' 7,700,000 , 1.65% *; / . . ,:i953v^fi%^"-:. 1.40% May ^ 1/ 1954 ■■■)% 1.55% r'/r-'v- r;X\ S ■ < $7,700,000 L20% , ,;'f within the State to provide ■"t'. Amount Price 7^700,000A.1.30% ^ specifically taxes are : . l3i%^: •: or , 7;700,000 election held November 5, an obligations of the State of Illinois. Certain special principal and interest ion these bonds. y'; •t.v authorized issue of $385,000,000 ratified at an and credit 'A', . Savings Bank any state - from only such of the under writers, including the undersigned, as may; legally offer these bonds in such Slate♦ The Northern Trust Company The First National Bank of Chicago Continental Illinois National Bank andjTrust Company) >' .i 'OF CHICAGQ « The^Cfcase National Bank Bankers Trust Company The National City Bank of New York First National Bank Bank of America Guaranty Trust Company of Now York Halsey, Stuart & Co. Inc, New Chemical Bank & Trust Glore, Forgan & Co. Company Drexel & Co. 'Salomon Bros. & Hutzler Harriman Blyth & Co., Inc.. Kidder, Peabody & Co. 4 ' Central Republic Company^ A. C. Allyn and Company Incorporated (Incorporated)' " Eastman, Dillon 4 Co. Incorporated /-• Julien Collins 4 ; i" ' ; y *.'j » ' ' Corporation '* /' /• Commerce Trust Coupany .. ! . ..." Hornblower 4 Weeks a r 1 * ; . Stern Brothers 4 Co. ' . The Milwaukee Company California Bank R. S. Dickson 4 Company [Otis 4 Co, [The Wisconsin Company City National Bank 4 Trust Co, " , • - Geo. B. Gibbons 4 Company Francis 1. DuPont 4 Co. Incorporated L F. Rothschild 4 Co. Roosevelt 4 Cross, Inc. Martin, Burns 4 Corbett, Inc. Whiting, Weeks 4 Stubbs Trust Company of Georgia * ' • Coffin 4 Burr Incorporated Kansas City Incorporated Kean, Taylor 4 Co..Kebbon, McCormick 4 Co. ' Incorporated Los Angeles Cruttenden 4 Co.(Paul H. Davis 4 Co. C. F. Childs and Company 1 , Bacon, Whipple 4 Co. ~ Heller, Bruce 4 Co. " : 4 . • ' Lee Higginson Corporation ' Alex. Brown 4 Sons ' H 3mphill, Noyes 4 Co; ??T; / R. WTressprich 4 Co. Seattle-First National Bank San Francisco. William Blair 4 Company •'*' °V'. ' < .... American Trust Company The First National Bank B. J. Van Ingen 4 Co, Inc. ?v:s: Weeden 4 Co., Inc. Mercantile-Commerce Bank and Trust Company R. H. Moulton 4 Company F. S. Moseley 4Co. CF PORTLAND, OREGON ' . Schoellkopf, Hutton 4 Pomeroy, Inc.' Estabrook 4 Co, American National Bank and Trust Company; - Bacon, Stevenson 4 Co. OF CHICAGO '.I T.v y.y.y. ' Graham, Parsons 4 Co.' * First of Michigan Hallgarten 4 Co. . Lehman Brothers . Merrill Lynch, Pierce, Fenner 4 Beane Paine, Webber, Jackson 4 Curtis ; ' Company ..." Company : • Adams, McEntee 4 Co. The Illinois Equitable Securities Corporaticfr - Stranahan, Harris 4 Co»■; r 1 • Incorporated ";Incorporated ..*^.V Ripley^& Co«» Incorporated Braun, Bosworth 4 Co. ' • > Blair & Co. Phelps, Fenn & Co. r A. G. Becker & Co. John Nuveen 4 Co. Barr Brothers 4 Co. Inc. ' * (Incorporated) a A.. ;:- Smith, Barney & Co. v C. J. Dpvine & Co. N. T. & S. A. ,/ Harris, Hall 4 Company f > The First Boston Corporation York 4 -t * . ~ » .February 18, 1948 . ' -• - * * 15 1« Chronicle) CINCINNATI, OHIO—Lester J. has become associated way years. with Mr. Bathis'direction or .xave access to his sources of in¬ formation. In fact, most investors, left to their own devices, have he unhappy faculty of buying either the wrong security or the vestors With Akin-Lambert Co. (Special The to Financial Chronicle) ANGELES, CALIF.— Bethke has become connected with Akin-Lambert Co., LOS W. Robert Street, members Stock Ex¬ In the past he was with 639 South Spring of the Angeles Los change. Sutro & Co. have to buy a portfolio of securi¬ in-<?>>' Unfortunately, very tew gifted are ruch's talents in time. portfolio in¬ istics. And, when we of stead a "Buy a single issue," applies have selected individual security, we find that its cost is materially higher, the return is lower, and the pos¬ of sibility suffers the largest, on/ a percentage basis. He is the one who ought to be satisfied to ob¬ tain average results, but often down a bottom¬ an attempt to nake a small killing. Should he select a bond, a preferred, or a common stock, "on his own" he night pick a "lemon." However, f he puts his money into a mutual fond, whether its portfolio conhis money rat-hole in pours less Prmpectm for upon request from ierettment dealer, or from NATIONAL RESEARCH SECURITIES A CORPORATION Of BROADWAY, NEW YORK 5. N. Y. ists of bonds, preferreds or com¬ stocks, or a combination of all three, he is virtually assured of at least average results." Simian to 1939 nation's which that dividends and been have traffic because afraid folio.*. To match th6 quality char¬ acteristics of any mutual fund HUGH W. LONG & CO. 18 WAlt smtr. NEW YORK individual with an must 5, N Y select higher this security,' we security from a class, and then shares of offer excellent long-term growth." ' increases This become assurance million $600 would /.Over a our at to 3' ■U .<§>- requisition all U. S. d 11 o during a r last two years; there of liquidation of in the New York the securities in were rumors private these shares pos¬ in Lief¬ the to be compensate Dutch sellers of Amer¬ not explain to courage Lieftinck ' prepared was The plan, industrial depression, even to the of sacrificing the nation's Under the plan, exchanged. also Netherlands owned American States United met with securities few and were do to everything possible to prevent an residents have;been mates of Dutch various esti¬ holdings of dollar permitted to were U. S. se¬ and,* at various times curity to another, but 25% had Certificates of Participation in be to lands of amount dollar who securities in the effect switches from one gold reserves. securities, success guilders, in however, is said to have little govern¬ new payable but linked to the dollar. Pieter Gov- ' bonds ment into ernment with securities ican put proposed There may value billion. During 1947, in order to en¬ voluntary liquidation, the Dutch Government offered to did extent S. still $1 the that exceed crisis. Dutch U. esti¬ mated a dollar held securities is not known, it is or¬ der to avoid Dutch the the although However, of extent resi¬ Dutch dents, market. of session stated that the of the exchange the offered to the Nether¬ Bank to be exchanged for remaining for repurchase of guilders with only the Massachusetts i INVESTMENT FUNDS investing tlieir capital 'r. r- despatch from the Hague, Netherlands, on Prof. P. Lieftinck, a session of the Dutch Legislature, has announced that, in addition an immediate reduction of U. S. imports, the government would effect, but he X\ >- 1 An Associated Press decree ftAassachusetts ' Feb. 18 states that the Dutch Minister of Finance, the Funds :-F Dutch Minister of Finance will require announces '"'.Tdollar crisis. used OF BOSTON He received nearly by domestic holders of U. S. securities as step to avoid surrender cannot match all of the character¬ Custodian Corporation's "Fore¬ cast for 1948." - ' m e a n s Bond Fund copies of National Securities Research Securities Andrew Carnegie once said to the .eystone ran are Associated Press after the formation of U. S. Steel, WJe & new recently Reported Dutch Government Requisitions Dollar tinck luncheon table. shortly free if* further encountered. 30% better than 1947 earnings. Co. several segments of .400 replies from a single insertion 5 economy about whose 1948 of the ad. '"There we even leads, Herzog a three-inch, one-column ad in the Sunday New York "Times" offering investors are be the excellent Prof. $100,000,000 Lost even the railroads of an¬ heavy traffic." assures Looking for & 1947, the railroads' net in¬ cost The good tonnage. Pays to Advertise in 1948 should be in excess of In 1946, accounted for than three quarters of orig¬ other year of If railroad in as high rate. a they instance, ally is about the same 1948 mined at inated freight wage come that higher wages and higher material costs. Investors are not likely to chemical in industry outlook for these industries virtu¬ January, proving 1948 earnings. auto an more increases. Ef¬ 1948, another rate increase was granted. of this will go toward im¬ 10% present high earnings would not last but would be squeezed by for sufficient year's Most port continues, "that stock prices have remained low in relation to a was fective port of Group Securities, Inc. "It has become clear," the re¬ investors given were price inflation may be imminent or already under way, according to the February Investment Re¬ for oil—even though coal ley el of railroad traffic. 7.5 1935..,, 1947,. the railroads 10% rate increase, to absorb "In October, The shortage (4) astonishing extent, these industries are responsible for the 1936_,_ 164.6 93.2 123.5 deficit 1938_— in Fuel is short—coal (5) as is being $ 98.1 1937 $188.9 dwellings of established The prospect, therefore, increase in building ac¬ 1948. much "To 1940 peeling an onion as he tries find the edible part. their less than the number outlook the of (in Millions) Years and earnings an activity. monkey peeling take does its significance in terms nor Railroad Net Earnings—Prewar Simile As anxious as a re¬ of automobiles needs no comment, clear. aggressive buyers of stocks until they are convinced that the vicious spiral of wages and prices The income from a portfolio Of Is hearing its end. For this reason securities is far more dependable we find encouragement in any in¬ than from a single issue of the dications, such as those mentioned above, of a reversal of the long lame class. As the Keystone Com¬ inflationary trend. pany of Boston aptly puts it: "Any "Common stocks of leading com¬ individual security may decline and disappear, but the various panies in the durable and capital classes of securities are as inde¬ goods industries remain the most structible as the market itself.;. sharply ; undervalued. There is reason to expect that se¬ There is no way of knowing what good lected companies in the following any individual security may do, but the long-term action of a class industries will, in 1948, equal or their high earnings of of securities under given condi¬ exceed agricultural, automobile, tions may be predicted with a 1947: reasonable degree of accuracy. building, electrical equipment, industrial machinery, railroad "A mutual fund, with the ad7 equipment, railroad stock and vantages of selection, diversifi¬ steel. Their stocks appear to be cation, supervision, land multiple-1 at bargain levels.. Aviation shares, source return, is logically a more more speculative, are attractive conservative investment than is for long-term appreciation, while any individual security in its port¬ mon is for as A would families tivity in the table below makes as — was new that year. 1946, railroad earnings were $288 Even these were good appreciation in rising earnings, particularly to investors with lim¬ Inflation Spiral Over? ited capital. He is the one who can least afford losses, but gen¬ .iA topping off of the erally 1947, million. markets is less." right security at the wrong The slogan, the country's rail¬ roads will shortly report net in¬ come of some $460 million. In this customers some number the 1947, erected of "For if good deal of building was done in as follows: Bernard Baruch can, you don't ties. outlook railroad the (1) place. Thus, a high rate of steel output may be expected. (3) The need for housing throughout the country is desperate. Although a Hugh W. Long in his February York Letter" comments in on quarrel. demand for all a demands, others—domestic foreign or "New part that duced Railroad Outlook "Buy a portfolio instead of a single issue" is a phrase coined by Douglas Laird of National Securities & Research Corp. The idea has much to recommend it. If you can pick an individual security the will products that the farmers can (2) Steel supplies are so short lunch. "Buy A Portfolio" merly in the municipal and cor¬ porate trading department of Ed¬ HUNT By HENRY & Co., Union He was for¬ few produce. epjoy the balance of his failed to Buschle ward Brockhaus & Co. with which he had been associated for many the $100,000,000 more properties." "If you had, I would have paid it,'.' was the financier's reply. It is said that the Scotchman you J. A. While 1 Company with J. A. White Central Building. activity There should be I think I should have J. P., LI Batchle Is With "You know, asked for my steel Morgan: P. J. elder (Special to Th* Financial Thursday, February 19, J948 & FINANCIAL CHRONICLE COMMERCIAL THE (812) available 75% assets ; in the United States. Investors Second Fund IN WELLINGTON BONDS '...-•/■••v. . ; , J ; ... (Series B1-B2-B3-B4) etfjo&ton PREFERRED STOCKS (Series K.1-K2) ANNOUNCING COMMON STOCKS si (Series 51-32-53-54) prospectus investment local investment dealer or New and larger quarters for WELLINGTON VANCE, SANDERS \ & COMPANY and W. L. BOSTON - 1420 \V V The Board of Directors Fond, Inc., has FUND ■ Street, o quarterly divi¬ share payable on shareholders on record February 28, 1948. t. E. Crabb, President March 20,1948, to Morgan & Company Walnut of Investors Selective declared dend of seven cents per as DEVONSHIRE STREET 111 Tke Keystone Company of Boston FUND, INC. Dividend Notice '■*'■ Prospectus from , pour relating to the shares of any of these separate mav he obtained from the undersigned. ' funds INVESTORS SELECTIVE ~ Philadelphia 2, Penna. of Principal Underwriter and Investment Manager 50 Congress Street Boston 9, MassackusettJ NEW * YORK 6t Broadway I20 LOS ANGELES CHICAGO South LaSalle Street 2io Telephones:PE5-0851,5-6771. a INVESTORS SYNDICATE West Seventh Street Minneapolis, Minnesota Si H THE COMMERCIAL Number 4674 Volume 167 Elizabeth 1923 Chapter of the Ameri¬ of Banking and in served had also Bankers' Middlesex, Bankers and OFFICERS, ETC. REVISED eral chairman banking Wall Street, New York, has announced Bank of New York at 48 joint of conference Jersey Bankers' Associa¬ can Trust said the icle" from "Mr. Sept. San which 1865, born the McKee son who quote: here On January 30th common capi¬ stock of the First National the of in 1850 Co. joined the firm in 1885 Bank of Tom's increased 000 by River, N. J., was from $550,000 to $575,stock dividend of $25,- a 000. * , The * $ placing in voluntary liqui¬ dation of Bank of the Forbes National Pittsburgh, effective Dec. was recently reported by the Office of the Comptroller of the Currency. The bank, which had a capital of $500,000, was ab¬ sorbed by the Mellon National Bank Trust & Co. of Pittsburgh. known now ing Co., as a the Tallant Bank¬ as sold to the Crocker was Louis McAlister, Jr. C. A. Jr. Owens, "Shortly thereafter Mr. McKee and others organized the Mercan¬ tile Trust Company of San Fran¬ cisco. He became successively Nov. The in charge of New charge of Southern territory, Mr. Owens is is in England interests, and Mr. Stous-*^ land is head of the Foreign De¬ to these places. An advisory board Appointed as Assistant partment. Presidents Vice Investment G. Earl were Harvey E. Mole, Jr., Holmes and Officers, and LeRoy A. will be established for the Broad tinental will McKee Clark, Jr. of the Bank's Madison Mr. come proposal which will result in business the Trust Bank & York being Continental the of of Company New of that with joined the Chemical Bank & Trust Com¬ of New York has been made in a let¬ pany to the former institution sent ter them to by Baxter N. to be¬ asked be Chairman of this board. * A also absorbed tional The O'Brien Savings Bank of Brooklyn, N. Y., tee of the trus¬ of John and F. Murphy as Beitzel as Assist¬ ant Cashier. G. d'Andelot Belin is President of the bank. * made was to the Board of Directors of Paul Feb. 17, C. Clovis, President, of the Twen¬ tieth Century PresSj*Inc. and Karl the "The the in its Directors of 1948; 13, Feb, of from follows: as Board meeting on advices of receipt ap¬ proved the statement of condition of the bank as of Dec. 31, 1947 and the income statement covering the Total Resources of the 1947. Fischer, Vice President, Execu¬ tive Department of the Chicago, Burlington & Quincy RR. Co. At the same time the following ap¬ "Mr. McKee was President of the California-Oregon Power Co. organization in 1920 until it was taken over by the Byllesby from its Assistant N. Baxter Jackson K. jQhn McKee Jackson, Chairman of the Chemi¬ that stated Jackson Company.' Mr. & Trust cal Bank the directors & Trust of The Continental Bank forth in set acceptable this letter are them and that a meeting will be to stockholders' shortly for approval. called the that advised have Company terms The proposal as submitted is also sub¬ ject to the approval of the Super¬ intendent ofL Banks and the Bank¬ ing Board. Following the consoli¬ dation of the business of The Con¬ Company that of the Chemical Bank Bank tinental with Trust Company, the main office Continental at 30 Broad & Trust The of & Street will Street Office Broad Chemical, of the which will give it a more conve¬ nient location for serving many of its customers in the financial dis¬ trict. The Chemical which has always had a large textile clientele has for some time wanted an of¬ fice . the in district textile on of The Continental at 38th Street and Seventh Avenue. Seventh Profits from branch provides the Grand Central area. place occasion will also be invited organization of the is stated employees to join the Chemical. It that the directors of the latter will be increased from 22 to 25 and that three of the directors of The Continental will be elected and Feb. 27, on the at which of Directors Board the distribution of ers of 6% the on Sfrs. 60,000,000, year." ' as dividend a Capital Stock of done last was W. H. Stalder is the bank's rep¬ ' * The $ certifcate. of of the State Banking on Feb. of increase the 6 stock of 65,000 shares of the of $10 each, to $700,000, of 70,000 shares of the of $10 each. The bank located <s 205 ax West 33rd former President Frank Wolf. er, # Hutchinson the that a director of the Plainfield Trust Co. of Plainfield, N. J., since died of illness on Feb. several York New 57 13 after months. years an Born ago, he had lived in Plainfield since boy¬ Plainfield advices "Evening News" Feb. 14, which further stated: "Mr. Walsh joined the staff the trust company in 1905 and the 1913 said Newark made was tary and assisted Assistant to of Paauhau Sugar Plantation Companies of Honolulu, the Russ Building Com¬ pany and other corporations." McKee had for also many been active in the Musical 1958 at a the to 1960, inclusive. The priced to yield from 1.95% for maturities, the and 1950 to offered are dollar price of 100 to 99% for 1959 and 1960 maturities. This offering represents the an authorized issue of balance of $385,000 000 of service recognition bonds authorized by the voters of Illinois in November, 1946. In the opinion of counsel the bonds are interest exempt from all present Federal income taxes and are legal investment for savings banks and trust funds in New York, Illinois, Massachusetts, Connecticut and certain other States. Association of San Francisco. Caldwell-Phillips Adds (Special ST. to The Financial With Kidder, (Special Chronicle) to The Peabody Co. Financial Chronicle) CHICAGO, ILL.—James R. Buck, MINN.—Paul B. Bremicher, Jr. has become asso¬ ciated with Caldwell-Phillips & Jr., formerly with Shields & Co., Co., First National Bank Building. He was formerly with Smith, Peabody Salle Street: PAUL, This is under Secre¬ no circumstances to be construed offer to buy, is now connected Co., & with 135 Kidder, South La as an offering of these securities for sale, or as solicitation of an offer to buy, any of such securities. offer is made only by means of the Prospectus. or as a The ' NEW ISSUE February 18, 1948 $25,000,000- Philadelphia Electric Bank of First and Refunding Mortgage Bonds 2%% Series Due 1978 Chair¬ and Dated Due February 1,1918 February 1,1978 Comptroller of National Battle of Bank Creek, increased, effective Jan. 5, from $400,000 to $600,000 by the sale of $200,000 of new Mich., was stock. Price 99.25% and accrued interest : « £ dividend stock a of $100,000, the First National Bank Bessemer, Ala., increased its at capital, Jan. effective 'Copies of the Prospectus may be obtained from any from 16, writers $100,000 to $200,000. * dealers of the several under- only in States in which such underwriters are qualified to act as in securities and in which such Prospectus may legally be distributed. * * The Anglo Bank 20-Year Club, composed of staff members of the Anglo California National Bank of Francisco San or more of with twenty held service, banquet on in Hotel new ducted into ceived Feb. San 7 club at the were and 36 in¬ jeweled of their 40 year 189 Edwin A. Wertheim & Co. binger, assistant manager, Mont¬ Street Office, San Fran¬ cisco, is President. John D. McKee, member of a pioneer San Francisco banking family, died on Feb. 6, at the age of 82. death he Up was to Central Republic Company the time of his still active as Chair¬ F. S. Corporation Moseley & Co. (Incorporated) E. H. Rollins & Sons Estabrook & Co. The Milwaukee Company Incorporated Stern Brothers & Co. Bacon, Whipple & Co. H. F. The Illinois Company Boynton & Co., Inc. * * Lehman Brothers Stone & Webster Securities L. F. Rothschild & Co. Gum- gomery * Eastman, Dillon & Co. Goldman, Sachs & Co. re¬ pins emblematic graduation into 25, 30 and classes. The Club now has members. Corporation an¬ Francisco. members the The First Boston years its J. M. Dain & of in Assistant Treasurer. He the formation of the in the 1954 Currency recently reported the capital of the Security Palace * * Irving Walsh, Vice President and and 1, President * * The office of the Seventeen F. May 1, 1950 man, nual Street. * held Pacific the Detroit, Mich., recently announced the death on Jan. 17 of the found¬ of New York from $650,000 consisting par value consisting par value Parshall, Commonwealth Through of the Bank of Athens Trust Com¬ pany $30,800,000 bonds maturing from Halsey, offering of 1%% * * P. * * approved Department a *; York New of , * resentative in New York. hood, officers and were, will recommend to the stockhold¬ Chemical Bank & Trust Company. other 1946 3,610,388 of Undivided Profits 3,150,882. "The Stockholders' Meeting will take consists Inc. Division. Howard Sfrs. in All corre¬ carry-over 1928, K. amount The for Sfrs. Profit McKee, President of The Continental, has been asked to become a senior officer of the John figures sponding Net the in 1946 3,406,271. this. also gives an additional loca¬ tion for serving Sfrs. of branch at 345 Madison Aye- The nue Avenue The the ed the become 4,137,629, to which is add¬ carry-over of Undivided to Sfrs. Co. Trust Credit Sfrs. to amounted 1947 banking in¬ directorships in Gas & Electric Co., he pointments to the official staff was made known: Peter F. Kaufman, The Net Profit for 1947 amounted of & National and The are an 1,413,591,668, as compared to Sfrs. 1,318,972,498 at the end of 1946. Union Bank of Switzerland at the end Stuart Chicago, to Officer; Miss Marion E. Edgren, Assistant Sec¬ retary; Albert A. Lentsch, Assist¬ ant Auditor, and William W. Wegner, Manager, Consumer year of Company First on by the Mercantile National of Chicago of the election Bank announced head office Bank Trust The Jan. 20 * * The Union Bank of Switzerland at Zurich, and * * Announcement Bank Chicago, Barney & Co. in New York. as Chester A. tional the elec¬ announces Presidents; Walter B. Kra¬ Assistant Vice President, mer Manufacturing Co. of Brooklyn. * Bank Company, Continental Illinois Na¬ 1.10% years National He is President bank. Scoville the of T. Selden a First rec¬ bonds on on and Williams has been named was * * Scranton, Pa., Vice , that Co., Illinois 1%% and 2% service ognition bonds, series B, was made Feb. 18 by a banking syndicate managed by Harris Trust and Savings Bank, Tne Northern Trust become the American Trust Co. Mr. * Brooklyn "Eagle" of Feb. 14 reported that Leo. M. O'Neil, President of the East Brooklyn announced Trust & Jan. 13 of Leon Ehrhardt, Kenneth A. Burdon, William B. The has by the Mellon Na¬ Bank Nov. 28. tion * * of placed in voluntary liquidation Trust Company. & Bank Bank Wilmerding, Pa. (capital $500,000) of the directors of The Con¬ up Avenue Office. . which will be made Street Office, National First Market on Offering of $85,000,000 State of to 1953, inclusive, and $54,200,000 of 2% bonds maturing from May terests, 27, page 2193. Placed Vice Presi¬ dent, President and Board Chair¬ man. In 1927 this company and the American Bank merged, to Cashier and Secretary, appeared in these columns Stousland C. Bonus Bonds Issue of National Bank in 1898. Reference to the plans of the lat-' interests in 1926. ter to take over the Forbes Na¬ "In addition to his tional J. S. $85 Million Illinois on formed with D. J. Tallant the pri¬ vate banking house of Tallant & "He 17 "Chron¬ also we was Ameri¬ Francisco, Francisco McKee John of the of San 29, laxe Board Co. upon his father's death in 1893 became Cashier. The firm, * * tal 19 of the man (813)' clerk and * Mr. McAlistc* and A. gen¬ tion. C. Owens, Jr., following promotions: J. S. McAlister, Jr., Louis C. Stousland were appointed Vice-Presidents. the was first the of trust and the New of County Association, now the Somerset and Union Bankers' Association. He CAPITALIZATIONS He President as Somerset and NEW BRANCHES President. its as served Union the CONSOLIDATIONS NEW CHRONICLE Institute can News About Banks FINANCIAL & Company Kalb, Voorhis & Co. Farwell, Chapman & Co. McJunkin, Patton & Co. Baker, Watts &U Moore, Leonard & Lynch Pacific Northwest Company Smith, Moore & Co. 13 THE COMMERCIAL (814) & FINANCIAL CHRONICLE , Letter to the Editor Cayne and Conners With tilth have become Cunningham associated Co., & Union Commerce Building, as vice-presi¬ Russell dents. member I. the of Cunningham, Ex¬ Cleveland change and formerly proprietor of the firm, is now president. Mr. Cunningham will be in charge of the buying department. Mr. Connors in charge of sales and syndicate department, and Mr. Cayne, trading', department. Mr. Cayne cipal of was Cayne, Mr. Conners Cleveland was formerly prin¬ Robbins & Co. manager of the office the of Central Republic Co. with associated Also Robert are firm the Solt and David D. G. previously with Cayne, Robbins & Co. Callahan, who were Mr. Cunningham is a pastpresident of the Cleveland Stock Exchange and is member of the a Eoard Of Governors of the S. N. A. D. representing District 10. Cayne is a former president Mr. of Cleveland the ers Holds Gold Standard Advocates Cunningham Co.^ Securities Salesman's Corner CLEVELAND, OHIO. —Morton A. Cayne, member-of the Cleve¬ land Stock -Exchange and Harry Conners Association Security and at Thursday, February 19, -1948 1 lt Trad¬ present is Chairman of the Public Relations Committee of the National Secur¬ ity Traders Association. By JOHN DUTTON During the past 10 days the commodity markets and the stock have been front page news. This is the first time in years have made the headlines. The lay public does not seem to be concerned over the possibilities of serious repercussions as a result of the drop in prices. In fact, most people believe that the decline in retail food prices is a good thing—which it is. BUT THIS NOT THE TIME IS ALA.— Ralph shortly open offices ■in Birmingham to engage in the among < securities business. He for- was President of the Alabama m.erly Securities Corp. Dick & Merle-Smiih to Admit Sherman L, Sherman L. Lyon Lyon 20 Pine Street, York New members of the New York Exchange, on March 1. Las been with because your office has not been deluged with calls from clients, asking you what is going on, is no reason why you should neglect your customers. Telephone to them, talk with them, what is going on, this ,is the time your customers .will appeciate a call from you. They want to hear some reassuring words from you, even if they are r.ot really alarmed. If you write letters them tell the best you can do is to make some general assertions. If you think that the decline i-rt commodity prices is a good thing (and Mr. Ber¬ nard Baruch said so) quote him. One thing a security dealer can still do in writing (under present restrictive regulations) is to quote wellknown public figures. Some day we would like to have a clarifica¬ tion of what a securities dealer can put in writing and what he can¬ not say.' No one has ever found out to our> knowledge. But if you write must town out of to clients, who others or may not have a telephone—this is the time to do it. Customers expect their dealer, broker or salesman to lead them through the darkness that surrounds today. us too many learned economists writing articles and mak¬ ing speeches that are printed in the "Chronicle,"' for this column to put in its two cents worth regarding the current situation in the stock and commodity markets. But this is the way we look at it, in a few words. The commodity break is a natural market development. It is healthy because it will bolster purchasing power in the lower brackets, but if the investors and everybody else in this country expect good times, healthy progress, and a better future for . are , the xn Jan. their and children, it is much imnortant more that the fallacies advocated by the present administration are re¬ polls next November. If you want to quote John pudiated at the that on ahead; only we're not a public figure.* Besides customers unfortunately might be New Dealers. j of your go 29th "Chronicle" and of agreement, some judgment issue of provokes thoughts of doubt some time. even of paper As often in the matter (Special to The Financial Chronicle) ILL. James CHICAGO, — Steel has become connected A. C. ' K. the treasure The return to such period presumes the same conditions both authors envisage in count. They seem to know what makes the wheels go around. Do you think you would take a pushing around from every arrogant little bureaucrat that has tied himself to the govern¬ ment payroll whenever you turn around, if we hdd an Administration that men can believed in sound American Monroe Street. With Maxson Securities Co. (Special to The Financial SOUTH BEND, MacKenzie For cline in part our either we are the stock definitive upon / V / ! - not worrying one bit about the present de¬ or commodity markets. One of the things remember is that there to bfsed . ganized labor. . . . are It is the way these 15 million stockholders are going to vote next November that will decide the fate of the stock market, your business, everybody's business, and also the jobs of the If every line for the corral anti-New we'll all have at least maybe begin to broker and dealer in the United States customer he can get, and go down the every Deal one candidate more live again. '• whomsoever chance to save •»'••• be may this country \ , he ... • and Franklin Cole Company, 120 Broadway, New York City 5, for a copy of "Economic Progress—Tax Revision and the Capital Markets." This is a tax study made in collaboration with Mr. Emil Schram of the New York Stock Exchange. Your Congress¬ man should have a copy! This is an excellent portrayal of why the the equity markets are Chronicle) & DO TO REVIVE drying up—and what GOVERNMENT MUST THEM. with will produce production tween tion, and supply Co., East Irvingr J balance a and and fact. advocacy its of return by announce firm. in England Company J Common stock averaged $4.58 over previous earnings per 10 & Co., Inc., City, that George Noakes. Jr. New York share Mr. Noakes formerly the government bond depart¬ was ment of the New York office under firm, has opened in the was Reily. Mr. officer of Kugel, Stone & Co., a Shoreham the direction Hanseatic Corporation. Prior thereto he an ment lieve honor a of respecting the contract or living u*- obligation any is have been best at great rival to that of I no politician. a in business for many learned to know have and that the quest of a personal gain is not always redeemable into so¬ cial consciousness concerned with in IA [ r. Fort people Knox of the belongs tc The country. government, its guardian, may not be a good manager over the func¬ tion of it should perform. credit, currency, Control government spending, etc., are justly subjected by both articles aforementioned scrutiny and criticism. On the hand, gold in the hands of Reily of was Phil J. K. formerly Washington Manager for J. Arthur Warner & Co. and W. H. Bell period per co. .• - Over-the-Counter Quotation Services that remembered the way through of we say, may tissue have other hand with the lack of A N. Y. : WHitehall a metal There lot of gold at Fort Knox but comparatively little in rela¬ tion to paper money in circulation of intangible property, to nothing of 250 billion of Fed¬ NATIONAL QUOTATION Established age BUREAU, Inc. 46 Front ^ Chicago exchange sacred Street, New York 4, N. Y. San Francisco is to prerogative of say, gold coin¬ that assume will be exercised 1913 Teletype BS 259 3-9030 , gold for speck of dollar. How many a paper dollars it may take to return this speck of gold owned by a "Fort Knox" at Podunk to circulation is to open speculation. morale of greater than the Perhaps the private that of citizen his is govern¬ ment, it may even be that his wis¬ dom, skill and judgment are su¬ perior. It seems, however, that the common intelligence would find the it office effective more mood of than the to change in man public changing the temper of the masses thrown into of comparative state a monetary confu¬ sion. ' There may . not favor the gold coinage concerned moral to ■ other are '• .. ... this is of in . . which return of free both authors but themselves aspect ' ' factors > with the part the problem, an answer their plea. F. G. Feb. 9, 1948 312 Patterson Bldg. SMOLA - - . Omaha 2, Nebraska , ; H New York Stock Exchange Weekly Firm Changes ; A changes: say Telephones: HAnover 2-7914 and into to The New York Stock Exchange has announced the following firm The defenders of free : convertible dollar was just get as the gold dollar. It may not be that way now. hard as paper confidence in paper money people should turn to hoarding of gold, forms request 148 State St., Boston 9, Mass. was The un¬ such not the pa¬ from generated eral debt Tel. CAP. 0425 dollar per coin. was make or This paper. shortages in the presence of large buying power and savings. If on the didn't difference whether war hoarding before seen, that never plus (he i large peoples' holdings in Government Bonds and other For 35 Years Descriptive analysis of this special situation mailed on be learned it hoarded anything from food to, imay be 1947 share. scale habit In times now. during the last as It groups shortage of, this precious would become obvious. Inc. years. $13.08; earnings $6.32 & experience shall assailable. worry are depression gold standard hence should public a large savings don't paper dollar. The government may refuse to surrender a his years but there It with the worry I be¬ sanctity of to Kentucky. quality of the private knowing what he is about the citizen and people such the much because now in But stress but the is not thought dollar it. may With gold scattered, in private hands I wonder what our man, in the street would think of a mere of such nature is warranted. It branch of responsi¬ private citizen may fail to provide any solution to the evils Building Highest annual earnings for of sense the government. I hold no brief for the politician but neither do I feel that discredit on Pollock Street, with pledge of the Treasury to redeem paper with gold coin will restore government's dollar that gold about moral that the 61c dollar famished This exchange exists is true that government to the governed and is dedicated to the thought that operation of the WASHINGTON, D. C.—R. H. Johnson & Co., New York invest¬ E. coinage do depreciated both attacked. has become associated with their in Business New the on likewise. absurd to the proponents of possibility material fac¬ on There citizen our gold thrift Furthermore, the authors rests not that not all in The contend may venture, government economy spending, has no the Pine to ever assurance as Opening D. C. Branch Wm. this two seem be¬ consump¬ demand, no of R. H. Johnson & Co. 20 of circulation in hiding. goes Europeans hide dollars, sterling. Swiss franc and pound of George Noakes, Jr., J 86 Years in money had experience presence with, all basis With W. E. Pollock Go. 222 French as in money and government other Maxson Avenue. good The supposition that gold stand¬ . ard to IND. —Herbert now monetary that is Gold to wells the citizenry of¬ on to those of the past. the Write little vaults, securities evalued in them. general weal. \ the real, whereas in truth, many fac¬ tors in the present economic state of the country are distinctly alien the Securities ton is doctrine, law, and orthodox economics? wise kinds I of bility in spending and the people's confidence in money and thus in you can investment for fear of no improve. A teaches oi gold. with Allyn and Co., Inc., 100 West ment favored the effective operation oi on in stockings be Obviously, fer no guarantee that confidence in paper currency will be restored and the policies of the govern¬ contemplation of the period of ex¬ perience and record which most based there money. Knox' and philosophy, the¬ the desire for the return to tors but, > rather, obligation of the seriously, be this fall would With A. C. Allyn & Co. Fort the gold standard stems from the money should of error imagine how much healthier the outlook new ventures, for risk taking, for the stockholders, bondholders, insurance policy holders, owners of gov¬ ernment bonds, postal savings, bank deposits, real estate and private business of every sort, under a President such as Bob Taft, Harry Flood Byrd, Walter George, Joseph Martin, Jesse Wolcott, or Tom Dewey? Here are men,.both Republicans and Democrats alike would eight million in labor. i gold coin in circulation, and hav¬ ing acquired it, shall put' it away some the on the many fundamental ory, . economic But Spending Check," by, Howard Buffett, and "Is Soundness of the Dollar Affected?" by Walter E. Spahr.^- which There supposed to be 15,000,000 stockholders Stock' in American business in this country. There are only 8,000,000 in or¬ Mr. Lyon firm for the City, 1 ' .The clamor for the return of the gold standard and gold coinage exchange voiced in two articles: "Gold Standard as Government - will become partner in Dick & Merle-Smith, a «■ - . Editor, "Commercial and Financial Chronicle": but these A. Lahan will Fort Knox than .scattered at public. GRANTED FOR THE SECURITIES BUSINESS. Just your some BIRMINGHAM, ANYTHING gold is concentrated . IF YOU ARE IN Dutton Own Investment Firm TO TAKE better if it is favoring return to fold standard merely with moral aspects of the problem.! Says themselves concern that the markets themselves Galph A. Lalian Forms Ferdinand G. Smola holds authors market as the this citizen before. That they feel that the privi¬ lege will be there but seldom be used. It is true that people don't like coin. They won't ever like ■ Thomas retire cott Jones, partnership from & - Hoyt * >> Jr., < will in Pres- Co., Cleveland, on March 1st. F. K. M. Hunter will withdraw from partnership in Carlisle & Jacquelin on Feb. 29th. George C. Riley of Cincinnati, retired from partnership in W. E. Hutton & Co. on Jan. 31st. George Brown, member of the Exchange, withdrew from part¬ nership in J. Robinson Duff & Co., New York, Joseph Carlisle died on on Jan. 31st. J. & O'Brien, partner in Jacquelin, New York, Feb. 8th. Volume 167 Number 4674- THE COMMERCIAL . (815) FINANCIAL CHRONICLE & 19 Britain and Marshall Plan !' By SIR STAFFORD CRIPPS* By PAUL EINZIG Chancellor of the Exchequer, Great Britain Britain expects final enactment by Con¬ gress of Marshall Plan, points out nation is not relying on it, as indicated by recent austerity wage regulation policy. Foresees British efforts to further discourage domestic consumption and Dr. Einzig, though stating notes year's deficit in payment at £675 millions against Western Hemisphere, and aim is to reduce dollar requirements to minimum. Blames rising prices abroad as partly responsible for trade deficit, and points out loss of "invisible payments" to Britain. Promises supreme effort to remedy Britain's external pay¬ American aid. continuing opposition in Britain against some Britain's financial spokesman places his nation's last £380 millions in 1946. Says bulk of deficit is with ments the passage by Con¬ Britain with growing optimism. While a month or two ago the majority of Englishmen thought that if the Plan is adopted at all, it is sure to be "too late LONDON, ENGLAND.—The prospects of gress of the Marshall Plan are now viewed in and too little,'' the chances of aid divert be reasonably good. Even lihood is sought to not there belief is without Einzig Dr. Paul it fundamental not later than the early alterations summer. the late spring Even so, the government ceeding is or pro¬ the assumption that it on cannot rely on the Marshall Plan being adopted in time, if at all. This accounts partly for its refusal to relax austerity measures such the ban as basic petrol rations. on Although the refusal to reconsider this most unpopular, government is firm in resist¬ ing it is measure the brought pressure by opponents alike. to and bear on supporters Nor is the government pre¬ pared to compromise the on pro¬ hibitive import duty on films, though it is expected to re¬ even in the closing down three thousand picture sult for lack of abolish to films. new bread of some theatres Agitation rationing is also ignored. Above all, the government con¬ tinues its export drive at the cost of depriving the domestic con¬ of sumer In much-needed spite of supplies. increase in the the output of textiles there is likelihood of tailors their British in cut And forced are strong a further a British cloth rations. Row use government's recently ac¬ and the government is likely to avoid making extensive use of either of them so long as there is reasonable hope to expect is that extensive more popular, justifiable expect the Plan to be adopted to with Both solutions would be most un¬ be widespread a the Savile to customers keep waiting literally for years, while they are busily engaged in executing prior¬ ity orders for the United States who and Latin America. Exporters early American aid. his introducing when budget in April, will propose fur¬ ther measures tending to discour¬ consumption. There is strong by Left-wing members the government to induce him discourage the demand for age pressure of to hy people living on their capital, but the likelihood of a capital levy in this year's budget appears to be remote. goods is There all that would and these not feeling other policies widespread a Britain save from a of the nonadoption or delay of the Marshall Plan. They are considered to be a useful supplementation of that plan under which, it is believed, major crisis in case would Britain aid ficient receive not suf¬ with dispense to the necessity for making the utmost effort to achieve equilibrium. A substantial relaxation of austerity is measures not* expected to fol¬ of the Marshall immediately and automati¬ the adoption low Plan Sir Stafford Cripps is like¬ ly to live up to his austere repu¬ tation by postponing relaxation as cally. possible. In all probabil¬ ity, he will try to hold out till the late part of 1949 when the anticipation of the coming general election will make political con¬ long as siderations prevail, and the gov¬ ernment is certain to overrule him in a bid for what and we expenditure reached Fund rently earning to to acing mt:n- propor¬ tions, despite an expansion in home these exports which in themselves Sir most praiseworthy. It is a our gap own which we efforts, supported we earnestly hope, by Marshall aid. If we failed, the gap would close itself through the drying up of our essential supplies of food and raw materials for which we would have no Last means of paying. year's deficit on current including "invisible" amounted to £675 account transactions, (compared with £380 mil¬ 1946). The deficit with the Western Hemisphere, was £680 million and the deficit with the rest of the world outside the million lion in line of after and, a the least resistance buyers abroad, they would satisfy the clamoring demand at home. government's unwillingness the Marshall Plan is also indicated by the recent enun¬ rely on of its wages policy. ciation Even of pation Marshall out her own loan 1945 m as harder work vocate of wages gesture, a it is certainly gesture in the right direction. was to be expected, it is most popular unions. it is a As un¬ among the workers' The only sphere in which likely results is to that produce of positive industries pro¬ ducing goods the price of which is controlled The by the government. warning that the government not authorize wages increases passed on to the consumer the form of higher prices is may to in equally of Sterling be the as ready existing tween wages and widen the al¬ discrepancy be¬ to paid in controlled uncontrolled industries. The of the of Trade difficulties The created for us by the adverse movements in the terms of trade were strikingly demonstrated in 1947. The ad¬ verse visible balance on a f.o.b. basis trade of which upon expenditure of gold and dollars in 1947 by the whole sterling area including the U. K. was £1,098 we operating in 1938 obtained year, this deficit would have lc.-3t been given by Sir Staf¬ ford Cripps at a press conference, London, Eng. Feb. 10, 1948. 267%. world's 226% The pressure for food materials has created this raw since pendence imported face the the fact part our on on materials is raw This announcement which prices moved against us over the past year alone, it is worth noting evidence of the way in that while the volume of our ex¬ ports increased by about 10% and the volume bf of our exports cost increased Incidentally, our imports by lit¬ in the value only half the our imoorts. v/as of slightly the despite higher volume of imports to which I have referred, we were still re¬ ceiving in 1947 only about 75% of the Quantity of goods we imported in 1938. Any general rise in prices must of a coun¬ basis of a def¬ try working on the icit in same that is our own food great, so to amount of essential sup¬ visible, trade Lower "Invisible" Income compensated Before the the invisible our excess of war we relied upon receipts to pay for our commodity im¬ a quarter of our total imports were in fact paid for by this means in 1938. *The war de¬ Over ports. stroyed .that favorable is not only were we obliged to sell large part of our investments, but we also engaged in heavy borrowing, with the consequence that our net income from invest¬ ments is only a fraction of its former amount. Loss of shipping and the need to charter foreign vessels has had to be met. So, instead of an invisible surplus of million £232 1946 1938, we had in invisible ac¬ including in net deficit on a count of £176 million, (Continued offer to sell or a solicitation of an offer to offering is made only by the Prospectus. an on page buy these securities. $6,000,000 Iowa Power and First Mortgage Light Company Bonds, 3% Series due 1978 Due February 1,1978 Dated February 1, 1948 Price 100.99% and accrued interest Left- sympathizers among wing Socialists also opposed to Marshall the turn are Plan. They in believe that closer economic The Prospectus may this announcement is circulated from only dealers as may lawfully offer these securities in such State. be obtained in any State in which of the undersigned and other such cooperation with Eastern Europe enable would the government to dispense with American aid. overwhelming British majority opinion would of regard, however, a failure to secure Mar¬ shall aid major disaster halsey, stuart A co. inc. The vocal istence, or a at any living and might social unrest upheaval. rate otis dick a merle-smith william l. a co. f. rothschild A co. (INCORPORATED) blair A company the illinois company that it might result in grave leading to political mullaney, ross A thomas A February 19, 1948 company company position. Not a and their must effort obtain we greater needed de¬ and plies. by invisible earnings or bal¬ for The acceptable Communists British reasons an of 1938 demand position and As £300 million less. some be to the disadvantage :::A statement was were were tle more, the increase these Had the £449 million. was terms figures suggest. We are bankers to the sterling area and finance the dollar requirements of all sterling area countries. The net drastically lower the standard of tend Terms and The strain on'our resources was. totally different For will only stiffen Empire might endanger Britain's very ex¬ to while the corresponding figure for They ad¬ the employers' resistance to wage demands. But in so far as the new policy will achieve its end in this respect it likely quarter 1947) imports Area however, even greater than on f op¬ at home and is invest¬ from of the resources better utilization alternative. than now are American the to Britain is concerned. of increase income work Those who salvation. opposed were to price ments—and there is therefore lit¬ dependence excessive The tends to aid efforts Britain's slacken the, disapproval of is barely more of case con¬ noticeable They believe that antici¬ papers. though the statement embodying government's the and; in commodity ity of British politicians and news¬ posed to the Marshall Plan as far The to Plan is economic the Marshall bare show of effort to find with income move movements—most have Western Hemisphere. the surplus of £80 million with the sterling area, which gave the over¬ all deficit of £675 million. Drain The items which invisible now world's sterling area £75 million, making a total of £755 million, less a . reserves area be met by invisible expenditure do not that clear to the coun¬ tle compensation from invisibles drawing upon them. The for the wider gap in the visible sterling countries are working to¬ gether to reduce their dollar re¬ account, but the«actual situation is even less favorable than that quirements to a minimum and in¬ Stafford Cripps which would result from a doub¬ crease their own production, thus making a contribution of great ling of import and export prices. must close by importance to the removal of the Export average values (third tries and duction be to our loans. constitute been contributed to by pro¬ or sonance like sterling was has income 1947'. in should I collapse is not shared by a minor¬ the which on resources that meet — position in 1947 by overseas borrowing. A doublings of both import and export prices for example, doubles the gap our gold and dollar (including drawings on the American and Canadian loans) and on the International Monetary cur¬ were as alternative the that ing stocks of goods abroad apply in vain to the Board of Trade for permission to unload their surplus at home. The government takes the view that, should such per¬ mits be granted too easily, many firms would be tempted to take drain net —— anced After popularity. view The overseas - were expected that Sir Stafford It is Cripps, find it difficult to sell their grow¬ > our 1 >—; allowing for gold purchase from the sterling area, mainly South Africa, we get a figure of £1,023 million for the v million. expenditure quired powers to direct labor to undermanned essential industries. minimized. But to of and delays scope the between gap necessary make or dif¬ of ficulties be extend the the like¬ now would it fully justified and must indeed be pursued with vigor and determination. In the are past year, To prevent this either to of price control controlled prices. to goods essential producing are considered hands from industries more figures for the U. K. current balance of payments in 1947 now available can leave doubt that our national efforts to increase exports and reduce imports to an essential min¬ imum produce mainly goods of secondary importance, and a fur¬ ther increase in their wages would adequate and timely Amer¬ ican no latter today position. The stern brothers A co. walter stokes A co. 26) 20 THE COMMERCIAL (816) ' * McKAY doubt concern¬ sterling devaluation cast the shadow of Ruhr. the but crisis of best references to the coming liquidation consid¬ due this moment a our of al¬ does however constitute not by unwilling of - the nancial and economic disaster as seceding areas are now free of the foregone conclusions. In the mean¬ colonial yoke, but still remain time the Canadian situation has wealth of Nations. in Also Middle East, Britain is disencum¬ bering herself of a heavy burden Dominion the contrary; foreign trade figures for 1947 reg¬ istered an all-time record, and re¬ have into turn the catastrophe; of war. /' ;..A great of so won again may Why the opportunity the afraid dearly are we Is it not be¬ anxious and afraid? cause mi- a we ' Dewey out overshadowing time our the — building of peace—has been , con¬ and frittered away for lack fused plan andr great pur¬ of of native attention to the accelerated stage of dynamic development. As pose? For the sake of the Amer¬ ican people and the peace of the world it is time we find out where development of the vast far political responsibility, while cent reports from throughout the still retaining her economic inter¬ Dominion clearly indicate that the ests, and is now directing imagi¬ Canadian economy is at another resources of South, East, and West Africa. Another accompanying phenomr enon of British crises is the habit of deriving new direct doubt that strength from the disasters. Britain little the last year through her eco¬ spiritual "Dunkirk" during and British morale, touched bottom, upward of is went nomic and There climb. An an examination cross-section of British senti¬ a ment which, would, have pessimism a few months ago revealed unrelieved and would show a discontent, now spirit of reso¬ new lution to rise above adversity and revived hopes for a brighter fu¬ ture. • knit Dominion's are ating staunchly Mother Country. resources are effort ganized British now to cooper¬ assist the Their combined now supreme available for to serve a a reor¬ Commonwealth and to save the pound. ; The new Chancellor of the Ex¬ chequer Cripps is not another Keynes or is concerned, there is Dalton. His clearly enunciated policy of maintaining the present level of sterling does jJ '* sourceful Minister of Finance Ab¬ bott, like the British Chancellor Cripps, will be able to cope effec¬ tively, with any development that might jeopardize the successful implementation avowed the the .pressure week devaluationary.sentiment! cerning the pound affected versely both the internal and ex¬ : ' PROVINCIAL Canadian after on stocks - in scale. decline on to the strength dis¬ the London market and -the exaggerated importance given by the Dominion gold-min¬ world. ing industry Government and sistance of to « on new to instead as¬ concentration development.. -.. .. Expanding ILY. Commodities Dep't Witter" & commodity markets. R..Herrick, commodity expert, is being trans¬ office to head the up en¬ to supervising all traders on with current Prior to his association with Dean was Witter in the & Co., Mr. business under his " Herrick and own previous .experience NY-1-1045 world export name." His was export depaitments eral Mills. blundered conquest. with expense Most , In the Far a Marshal East,; our secret agree¬ Stalin at the of China, enabling Russia of Gen¬ on Asia to tractors and Harbor here? from the in the heads our peat^ itself? before course It war. that it and again led to To follow always will. course, followed have We the be would only perfectly sure way to send boys and mine into another war. n ' "• v.. ■' V ' your a new road. for peace; there is a great abiding hope burning in the breasts of our people and of about • this at even I building In the for peace set now. tragically late date, confident am we achieve it. can and two one-half years pulled peoples and those behind the iron That is curtain. is more proposed now than money for four-year a European program. Berlin the so could advance Europe. we got armies into the middle the fruits of In such ways our have victory been al¬ wholly tossed away. thing policies of one we can the : < be Na¬ tional Administration which have brought us to this pass should be thrown overboard lock, stock and barrel. Those are the policies which resulted in into Russia and the middle Eu¬ clutches of Soviet rapidly delivering people of China intoth'e Same hands. i the 400 are million Address by Gov. Dewey at German then be servant a Europe. Yet posite and Europe and suffering as a result. are op-f America t * -v. of the Potsdam policies did the exact \ # • Policies Must Be Reversed *; 4 The policies which created this paralysis and must be Our Government versed. can can re¬ - still job, unless the National Ad¬ a political in country crisis actually for keep this continuing state of a and wants, to purposes, of high prices caused by shortages of goods. We have a In the mili¬ Government called to save Europe America from better get busy. a — industrial greatest world—have done possible world. us nation set of new the industrial of the worst one induslrial in the jobs the in minute. Then mines coal Europe of West the as Virginia, Illinois, the Pittsburgh, Gary Younngstown are to America. . and mills of The Ruhr in dustrial It had better get Germany is the in¬ mainspring and the heart genius of America and face the of half years a to finance $17 billion habilitation of anxiety ous They neverthe¬ re¬ Europe. . our people. Is it "just, an¬ Is it only, a "fii-, tile effort to bolster, up these na¬ ~ these. less launched at Potsdam the pol¬ icies which have paralyzed the ... , .; A , I know it does not have to be Ruhr ;; , it will be neither of I; hope Knowing this, the present Na¬ tional:- Administration cost the among asking: are tions?" ' now a The long delay in conceiving a plan and the frightful waste which has preceded it have caused seri¬ products. 7 ' " for Western other handout?" v are we plan at a more of ; Europe's production", of coal, steel ' and many other essential - "and next Partly by reason the unhappy failures of the last asked Pennsylvania- and steel and policies, call on'the we two and to ruin hardship 'and have, it had larger problem. of Importance of Ruhr is If get going. Let's look at it for just a Ruhr them. on Administration honestly wants our know-how which has made will and ; Europe. niiie crippled Today, months the two; after Western and years V-E Day, the production of coal daily Ruhr all is only 254,000 ton$, compared with 440 000 before the That is 57% of prewar pro¬ who are v' this with the producing now British over be,,restored when the free nations become strong enough and united enough selves. In 1917 and a prelude to must make 1940 eco¬ our going to our certain We war. that this time economic, aid is a prelude to peace. is There aid of difference a difference Compare it with the French who now actually producing more , to preserve them¬ nomic aid to Western Europe was 90% of their prewar output. V/' The peace of the world can and our Compare between and the — this vast a program ordinary run-of- are the-mill. New Deal venture. This coal than they did in 1937. But it is the ' Ruhr which has always been the principal source of coal, time can't suc¬ the Ruhr is not producing. It is no wonder that the people and of Europe ter. freezing this win¬ are It is no cess. we The stakes the total destruction. even in the Ruhr ferrous products metals is and -running quarter of prewar of is in other respects. Pro¬ worse duction of iron and steel, war or of of nonfoundry about one- less and damage can no alibi that failure. needs of It is no wonder* that tractors for the Europe production food, heeds rails for the ship- / _ < 1 - Last November, I urged that a be formulated in straight¬ government situation too great. The are and forward The 10% between success, and this time may well mean 1 difference between suryjval prevent collapse. a difference ships have been busy carry¬ ing American coal and oil to help a stand failure wonder that Ameri¬ can Feb. 12, 1948. * of as the the Annual Lincoln Day Dinner of the Middlesex Club, Boston, Mass., ' blast people of it that j now amount *An the revival a and full we surrendering 200 million people in prevent militarism started from sure: present to shortages of That, in short, is the way into our present fix in world affairs. The Soviet years ago that I proposed that the Ruhr be internationalized tary occupation of Germany, we Americans we who have the back triumphant American troops west the at was,almost wealth duction. actually arise /It of have spent over* engineers, coal mining billion in foreign aid, indis¬ experts and industrial managers who could do the job if only the criminately scattered among free to and "> $20 war. the enslavement of the Balkan would war. ministration ple of Poland; it yielded weakly States the do in ernment sacrificed the heroic peo¬ problem of is reason for that we clothing to four good people the world over. There hope., If ship > end must follow we coal des¬ so home, ;to Every informed American knew There is. hope average qf Gov¬ and at ■ No, ship we Europe. from withdraw bury to steel food us sand, hoping history will not re¬ that and need Pearl go we we world fuel oil and Europe to one to has been compelled this Where ,do to dominate-Manchuria and, all our purpose. At nation in history. Yet any perately the other. on North China., In Europe, than side of across move Harbor Should of gained in the commodity and the import and of /that .fact, has now come to fight-r¬ hope there's no more to out. ment rope import face Government made Of 1 the rule- the to Government at least I come In Eastern Seaboard activities. ambition compromised from conference com¬ information Marshal conference, each time aiding and abetting that very scheme of most traders and provide West Coast ern plain. are \ - to of West Coast information for East¬ RECTOR 2-7231 In own the story addition N. Y. our Soviet Dean Witter not repeatedly proclaimed Soviet the modity services, he will correlate NEW .YORK 5, had elsewhere, is perhaps attributable larged New York department. TWO WALL STREET facts The Moreover, if / Russian Policy Stalin betrayal of a they will allow the iron across The respond cisco INCORPORATED despotism. and aggressive another of registered a substantial recovery. The failure of the golds to Administration policy for peace but helped to build up the no quently played This time had saved. National actually subse¬ • use our victory and "buttress the free we strength ferred from the firm's San Fran¬ - failed to rebuild to the - York, . When the first the victors over, was Again, aft^r the second World War, we and reflected - New initial an ' reduced a called are failed to make,,a lasting peace. * only had .Martin A. E. AMES & CO* Wan our trading CANADIAN STOCKS tarian despotism. Free funds also weakened but the ous CORPORATION save people to make a mighty effort to Western Europe from totali¬ turnover ily growing clientele of llie vari¬ MUNICIPAL American the upon in 30 years, time third the For are since the war, we permanent peace,* ■«-. nations was to propose ternal sections of the bond market. Co., 14 Wall Street, New York City, are ex¬ panding the trading facilities of their New. York commodity de¬ partment, to enable the firm to serve'more efficiently the stead¬ CANADIAN BONDS I con¬ ad¬ start going. 7 state to you to¬ night some of the steps I believe necessary if we are to achieve - of a want to go and we World , During ;■ his of (policy. Dean GOVERNMENT every reason to believe that the Dominion's re¬ movements In the hour of need the loosely- ex¬ isting level of the Canadian dollar after having commenced the maintenance of the as great a Boston that the peace I On the be r by no means'a sickly appearance. members of the British Common¬ curtain,to : with direct British rule, ance rity turn rage; . - £. policies the American hope. continued to Thomas of area Those apparent pres- p r o s p e resources was, ment of goods and needs steel to outside the! rebuild and expand its factories cooperation. 1 It is no wonder our Government wholly bi-partisan our may fi¬ imminent British 1 we are con¬ of those policies one ent . to the early too devaluation the and pound still is it write-off Every formulated that ■ the Thus total loss, In plate of and- enforced compli¬ They afraid are .Calls for years. 1 e<£- are con- fused. . living standards and uneasy. They - any means a p e o p are loopholes in the British ready been relinquished, and to control system, and steps designed this extent there has been a par¬ to discourage bear attacks on thb tial liquidation of the British Em¬ pound, are also logical and likely pire in its old imperial form. This developments. countries has Eastern Middle richer in we are in U. S. break The recent period of over avoidance of waste in aid program. our possible development for the future but, in large part, an tered by a program designed to already accomplished fact. Direct prevent a further rise in British British control of India, Burma, wages and prices. Other defen¬ Ceylon, Egypt, Palestine and other sive measures such as the closing not d* country is beset with deep anxiety. As in Lincoln's day fronted with historic decisions. Yet today we have no clear vision of a great again prices which constituted a greater threat to this policy than the French devaluation is being coun¬ Empire. It in reality that this is would seem after Once British interests at this serves time. King¬ United the British the end dom in decision a 4 Says if aid is given it should be adequate and extend - eration to follow the course which first consider the recent * Dewey scores Administration's foreign policy as having betrayed American ideals by appease¬ ment of Russia, and urges it should be thrown overboard "lock, stock and barrel." Warns Marshall Plan may be "just another handout"; and urges a federation of Europe, with internationalization of and the many prophets of British disaster have gone into high crescendo at a time £ ~~ k~~ 7" when it is now possible to discern not represent further lip-service a few encouraging glimmers on to the cause of managed money, us * Governor seminators of gloom Let Thursday, February 19,; 1948 Governor of State of New York ing its probable effect on the Canadian dollar and the course of the external market for Canadian securities. Curiously enough the dis¬ the horizon. CHRONICLE By HON. THOMAS E. DEWEY* * Fears of FINANCIAL Foreign Policy Must Be Reversed! Canadian Securities By WILLIAM J. & plan fashion partisan ablest be to by run authority under directors business with and men in the a bi¬ the coun¬ try in charge. way lic to do or a I know of only one job well, either pub¬ private, and that is to get the ablest people we have to. run it and give them full authority hold them strictly accountable for results. I also urged that we agree among ourselves (Continued that we on page would 31) "* Volume 167 Number 4674 THE COMMERCIAL FINANCIAL & (817) CHRONICLE 21 ' r Our Reporter Municipal Bonds Governments on Amsterdam Wins Over as NYSE Chess Team first The By JOHN T. CHIPPENDALE, JR. cable By HARRY L. SEVERSON* A slightly firmer tone has been in evidence in the taxable elig¬ ible , obligations with some of the longer maturities still trading above support levels, which indicates that these securities are being bought by commercial banks instead of the Federal Reserve banks. The statement on Monday by Treasury Secretary Snyder that government bonds would not go below pegged levels and that interest rates , would continue . to hold holdings, . Liquidation of restricted with insurance companies still which ... fairly large way the principal sellers . ON COMMODITIES The attitude of . longer-term taxable bank issues appears to be changing, even though it has not yet been transferred from a potential demand a sizable actual one. There is less switching from the middle and long maturities into shorts, and; certain commercial banks are even letting out a few shorts to go back into the more distant into . tive It is . measures . believed Treasury issues. . mean . in loans important bearing closely by followers of the very of these of the State cal securities government prices, if it should i t n e While ... be sharp enough to the signal . _ . to The new Harry L. Severson absorb increased the be¬ market. volume pion. York of Some observers im¬ are pressed with the large volume of new financing and be¬ lieve the margin inertia. this took that' widened still It is argued position which has than nicipals for be overcome in support of institution an been not must to more buying mu¬ time will hesi¬ some ' END «\4.. PRODUCT advantage of this favorable mar¬ may be indicated by the eruption Jn the commodity markets, would most likely, result in /demand for 1 bank credit. There should not be the . . .. . vto accumulate inventories, forward buying would be and would doubt be curtailed no substantially. need ... loaning institutions, especially commercial banks,would cautious and .careful because with the ending of the would be. greater, risks involved in lending.. This ,'iri fewer; loans,, as well as the calling of less desirable can be liquidated. V'.:-r.V v' . . WHAT?,,^;^;:.;V,::;^< • .r.7^^ 77y, |With ^the for- expansion; through bank loans, curtailed <5r ended by a deterioration of economic' conditions, where; would bank -and non-bank investors put the funds they have-been accumu¬ lating (now in shorts) through the sale of longer-term government .obligations? :;. While it is not indicated that the greater part of the )^:W pressure near-term maturities that have been be disposed of, it is believed that be let out in order to take , -With . business the risk the higher income longer on factor bought by these investors would substantial amount of them would a increasing because of conditions, institutions would be maturities! . . . likely to make commitments in the longest Treasuries in preference to making . loans that could turn funds. There and to be too not ' •' , wise 7 ' . on securities. government . . . Now . . : ;•• with the market . inducement to buy government securities especially the longerwith the boom ended there would be no need to because terms, about the monetary authorities keeping prices at present worry port levels. \ ... If there is to be .7 observers feel is "risk the then a down-trend forecast by the now factor" petitive basis profits the margin of safety becomes more tions. This ... : . , Thus or governments and AAA „ a would for fixed charges would lower rated credit more com¬ . , . . going * nearly as far hoped. With the depletion as was of these local cash sues an are '• •With the-increased the spread between credit bonds (would be it coming to the market at unprecedented rate. A consid¬ increase in securities tax-exempt declining is finding doubt recede in price. ... !< Long-Term which showed and Bonds, yield of 1.29% in a has fluctuating been around this level for the past few Thus weeks. nicipals than it upon govern¬ can A number of factors have ments. contributed to this decline in price increase in yield on ;■■' municipal Interest rates have risen. Federal Reserve tightened the money anti-inflationary the .large funds System has market measure. as an In view for capital business ex¬ as public im¬ demand for, housing,* well as provements, and the general feel¬ ing that the danger of still further tight policy money can be aban¬ doned in the immediate future. Second: EXPECTED "■ Refunding of the March maturities of 2s and 1 7/g% certificates ... March/15 no great Federal rate of vol¬ tax-exempt bonds comes market ''An address it becomes neces- Minnesota, not known, . . but informed sources less attractive to than inves¬ some formerly. There is so being said, both for and against reduction in the income a rate at this time, and-larger exemptions, that it is only neces¬ sary to mention the fact in passing the taxes ence possibilities exert may Other members of the New team included: Herbert W. Dr. Hutzler! & *■ ' Max Euwe, former World's the on of reduced prices of municipal bonds and point out that reduced comes, Also, well as the as lower reduced in¬ rates. high tax rates have in instances reduced the" vol¬ many, of ume result from may funds , .. „ prised: T. D. which the very wealthy have for investment. < Scheltinga, Ve- reeniging voor den EffectenhandeJ; H. Kleefstra, De Twentsche Back: N.V.; U. Crabbendam, Broekman's Commissie Bank; W. C.. A.. .L., Muller, Labouchere & Co. N.V.; J. Kempes, De Twentsche Bank. N.V.; J. Ph. Grondman, J. Ph. - Grondman; C. L. C. Dekker, Brom & Co.; J. J. Weering, Am-, N.V.; F. van: Vereeniging voor den: Effectenhandel; Justus - Meijer, Kraayenhagen & Co. Reserve wasr W. J. Bos, Vereeniging voor den sterdamsche van Bank Setten, Effectanhandel. Lynn A. Hart Now Flynn & Levitt in LA. (Special to A., Hart has be given to this question. The market shows occasional signs of Mr. 411 Hart West wes of the bond Los Angeles manager for „ associated Levitt, Street. department Chronicle) CALIF.—Lynn become & Flynn Seventh previously Our main interest is, of course, in what will happen from now On, and as usual, no very definite an¬ Financial The LOS ANGELES, with What Will Happen from Now On? swer can van bearish influ¬ a the office of Carter H. Corbrey & Co. and prior thereto California was with First Co. some strength, and . expected a to tion there is most that support the conten¬ of the decline has taken place or, at least, that fur¬ ther declines will be gradual. On the other resulted declines be still heard just discussed appear to operating, and - I have predict a marked increase in the prices of municipal bonds in the immediate future! What, then, is a sensible no . ers Feb. by Conference, Mr. of Minn., University Minneapolis, 12, 1948. Severson We Offer I one recently dogpaw gold Price wines, ltd. 40(f per investment policy in a market which has just declined and which may or may not have hit the bot¬ I believe that the tom? of investment opinion consensus is that works out best to keep fully invested. Ordinarily does not pay to try to pick up usually market. is substantial, soon, bottom of the Unless the drop and in price comes rather the loss in income will more (Continued on page 23) Share be obtained (roffTy® "r Investment Oeeler or the undersie"8"1 it funds it V. . hand, the forces which in the substantial price investments at the before the Ninth Minnesota Bank¬ is issues cash repayment. of the to increased the months that the Treasury has not increased the that were being offered. . What the banks will do with their holdings of the matured certificates Reserve called ume As It was, however, the time in recent interest or the 23/4S with iys% certificates occasioned amount of surprise in the financial district. first and exemption fea¬ pear evidence • - problem at this time, there seems little reason to expect that the rather of , Third: The tax ture of municipal bonds may ap¬ bank with satisfac¬ a tory earnings, to which tax ex¬ emption is an advantage,.can ob¬ tain a higher net return on mu¬ X . . . bonds at present rates relatively attractive to banks. are taxes The narrowing of the spread between bonds irrespective quality or rating that took place during the war period because of; the scarcity factor seems to have gone by the board,'* not to return for some time. ** • • . obtain can to, municipal resentative inflation is the foremost domestic nent. it investors in the higher brackets. As noted before, that perma¬ ■ attractive yield available on long-term mu¬ nicipal bonds is higher than it has been for a number of years. The "Bond Buyer's" Index of 20 Rep¬ of - corporates and lower rated be what securities to investors in the 50% tax. bracket, and are even more tax in First: supply of corporate bonds, the widening, of should Coe Bros. mon Classes of securities which it tors portfolios, early 1946, or stated more realistically, perhaps, from the viewpoint of the investor, "the The earnings / and above upon much bonds. . increased finding are to borrow, and new is¬ erable volume of this likely would be affected by changed governments, AAA State and balances governments necessary pansion, - co- , most between top quality issues and the bonds, which business conditions. no entering into this field get yields substan- can , not are ances or purposes.7 corporates whereas lower rated corporate issues, with Greater would be the spread I on advance in price, under the aforementioned economic conditions, V protection . some desirable funds that must be put to work for income - as decline in commodity prices, important in the lending and With business . . in general business, that governments and only the highest quality investments for institutions that have means be . was and March and April of 1946, had risen to 2.36% for the week of Jan. 8, quite likely to decline and this will cut protection for fixed charges of corpora¬ are changed again. State governments began to 1948, investing policies of institutions. AAA!s. would sup¬ •. vV/;"'''; PROBABILITIES it ially reached price "pegged," every Treasury issue a commercial bank owns is liquid, be it short or long. The would seem to be a very'power¬ ful nice profit. With v investable of use a the end of hostilities the situation Prices of municipal bonds have receded from their all-time high more has been any doubt about the payment of principal never interest out ... , nicipal bonds at its way into bank competitive more unless sell their holdings of mu¬ to team by I. Kashdan, of 8c Co., U, S. open local is accustomed to holding. Also, in¬ Champion, and I. A. Horowitz, stitutions which cannot use tax editor of the Chess Review of carry out ;their plans for repairing and ex¬ exemption to advantage, can still New York, adjudicated all games also be more tending., their capital improve¬ get as good or better net returns The Amsterdam Exchange was boom there ments. Other market represented in New York by Hans Many local governments on taxable issues. could result had wisely built up cash balances observers take a different view Kmoch, international chess player; ones, if they for this purpose during the war, and cite the fact that the present the New York team in Amster¬ J. van Weering. but the costs of construction nave yields on municipals are equal to dam by Vf. increased so much tftat these bal¬ yields of almost 5% on taxable The Amsterdam team com¬ cautious The attitude of more . THEN lessened a same tate before ket ,'r i The. ending of the boom, whieh >. York Marache, Granbery, Marache & Lord; Jacob Menkes, Wood, Walk¬ er & Co.; Sol Ranheim, Sulzbacfoer, Granger & Co.; Julius Hallgarten; Hay den, Stone 1 & Co.; Donald Hart, Stokes, Hoyt & Co.; Joseph O'Reilly, New York Stock Exchange; James Limberg; Neuberger & Berman; Howard Harnershlag, Hamershlag, Borg & Co. Alternates were Eric Hassberg, H. Hentz & Co.: Jacques Coe, Jacques Coe & Co.; Alfred E. Tonne, Salo¬ coming to the prospective .^anks made Co., former U. S. Amateur Cham¬ miums for the ; New Jacques municipals are sufficient bring in enough new buying to declining supp 1 y. *; Many the The in¬ was opinion about whether ingly valuable, bid higher and higher pre¬ the inter-, Holland captained favor of tax-exempt bonds increas¬ in move present yield differentials in the to York champion, and by E. Schuyler Jackson, of Penington, Colkef & ference of ex¬ came is t — emption the ; it of end upon wealthy / ' V boom, then it should have a favorable influence mediate and longer maturities of Treasuries. debts, r New by Carel F. Overhoff, President of the Amsterdam Exchange. , still too early to predict the extent of the recession in commodity i v govern¬ ments paid off money influence turn itial There is considerable dif¬ buyers. Executive the for the New York team. mu¬ other securities to attract whom tax two indices will have markets. as lo¬ and — to Davis, of Exchange, made the first move, in the absence from the city of Emil Schram, President, to offer better yields relative sary S. Stock . the policies of the monetary author- upon re-<^ during war individuals prices and the course of bank ities.yJV The kind of action taken will in position I the and being watched are a Howland Vice-President an was versed ; markets because the future trend an trend . quarters, with credit restric¬ decline in the loan demand, higher coupon some The movement of commodity . ;-(. funds available for the more . . becoming „ working, there will be which will in turn immediately preceding the Second World War were between Exchanges by RCA. increasingly popular form of invest¬ ment with commercial banks. With few exceptions, each new call report showed an increase in total holdings of insured banks. This portfolio managers toward the intermediate some teletyped Sees main problem in selection of commitments be limited to situations advocates In the years nicipal bonds , ,and maturities. in crease score a satisfactory and improving. Warns of unwarranted in¬ municipal loans and gives advice on bank's portfolio. •• •• EYE and are Ex¬ Stock Exchange, was by the Amsterdam team with of 5V2-4V2, Moves ' were won acquire municipals. or Chess Stock Amsterdam (2)' increased volume of tax exempt bonds; and (3) decline in attractiveness of tax exemption. Holds unless fur¬ ther drop in bond prices is soon and substantia], it will pay banks low, coupled with the loss of income through redemp¬ a municipal bond prices to (1) rise in interest rates; . between changes took place on Feb! 14, be¬ tween teams representing the New York Stock Exchange and the Municipal Service Department, Dun & Bradstreet, Ine. , Mr. Severson ascribes decline in tion of higher coupon obligations and the feeling that business may turn down somewhat, are given as the main reasons for the not too sizable commitments in the bank issues. bonds continues in - International match tellier & WBreaawoy, Newark4.N-7- 22 concluding part of a half-hour dramatization of the w^rk Exchange on Feb. 15, conducted by the Com¬ merce and Industry Association of New York, as the: fifth in t "Adventures in Industry Series" over Radio Station vV ML-A, rmil a Schram i dent e s r " the partners operate more than 1,500 in cities in the United Ex- offices change, pointed out that Hawaii by enab¬ ling corpora¬ there plants e s and u ties i r York - Stock Exchange are making a Emil Schram vital contribu¬ tion to the American standard of living. "The - of essence is the flow of capital into productive enterprise," Mr. Schram declared. "Aided by securities markets like the Stock progress Exchange, corporations enabled to obtain funds with which to build plants and equip are them. This, in turn, better and able to result of is living world. — American the avail¬ people. The standard highest in the The New York Stock Ex¬ takes pride in its vital change contribution • made more the this to progress." Contending that the Exchange was was an an international uhciwuhiwi securities, its 605 Deposits in almost $1 awarded the to at group Mr. market mamd Schram member said firms and for xc that their, of says 25% of supply oil for 1500 years. Reports on development in synthetic oil production. recent Enough gasoline 1,500 coal years Dr. of at an of Society's New York it is indicated gasoline from cheaply it as - can natural be can that be now gas as extracted from petroleum, the nation's nat¬ ural gas resources are limited, Dr. Martin pointed out. "The estimated dition of such reserves of coal A quarter of the proven reserves natural gas. if aoplied to the technological improve¬ ments nls1^ only 400,000 barrels a day of gasohne, about 15% of the current demrnd, in addition to small amounts of other A'n equal resources need fuels, he said. fraction the of In addition liquid fuel— iil and Diesel oil as well as gasoline—for 1,500 years, although the ^ost would probably be some"rhrA fuel-j i higher than that of natural from petroleum, Dr. Martin. Noting that two according plants, ican -q''pped to make 7,000 barrels of to engineers radically known have different devised basic a process, the fluid catalyst tech¬ as nique, Dr. Martin said. In the German and packed through with hot steel granular a catalyst, emerging as gasoline and The tremendous heat oil vapors. evolved was difficult to control cumbersome apparatus was a required. is technique, the cata¬ to ground and suspended as in a stream fine a a powder inside in the Moines and either have period. ness The the remainder is the are furnace and fuel drawn off at the top. In Texas stated and that a day from nat- being completed Kansas, Dr. Martin the output of these plants will be of such high quality it can be used for aviation fuel. As it comes from the converters, the gasoline will have an octane rating of 95, which can be raised con¬ trolled easily. of natural gasoline gasoline gas is are that the produced competitive produced from change in savings banks' invest¬ than more the $1 increase The outlets. home, in unturn in expansion awakened re¬ building business and interest among savings banks in these channels of invest¬ newed All indications point to in¬ ment. banks activity by mutual savings in year lending 'and mortgage financing of industrial expansion during 1948." declines during the current year, the Federal Reserve Bank An article appearing in the current issue of the bank's monthly publication, "New Eng-^— — —-— land Farm Finance News," holds earlier and compared with a fivethat although some price de- year average for the same month creases may result from the drop of 64 million pounds in the grain market, the supply Lowered grain prices should situation does not portend a ma¬ jor price collapse in foods which are based on grain consumption. "A common assumption," the article states, "is that good do¬ mestic grain crops in 1948 would much erase of food price problem. Such an assumption overlook the high percentage of our grain crop that is marketed meat. as increased the our Actually, good 1948 could not crops be translated in into numbers of pigs spring before The pigs 1949. of ease the critical position dairymen, but are not likely to help to of milk lower prices ply it two is bred before her be that human conceded be must the strength of which cannot be appraised, can upset economic reasoning. "If marked factors, develops, unemployment if con¬ demand slackens, if heavy sumer distressed selling of inventory ac¬ whole be analysis of sup¬ an demand factors might be or cumulations cow consumers The article added that however well-founded fall of 1949. Furthermore, it would years from the time a to below the usual seasonal drops. would not be marketed before the and the re-as¬ consumption of sessed because our meat be must calf milk, then occurs, outlook is enough eggs yield to rapid correction." business. $13,903,691, ciation and all and after taxes available for interest 603. Maximum charges by depre¬ financing $770,000. the 1951, that the so baby beef stage, say it should be obvious meat situation will not the balance $3,433,- against a large-scale reduction in food prices were listed as follows: annual interest all * First Mortgage outstanding after this will require less than Because of decreased ORLEANS, LA. as compared to 156 pounds and — of was Institute, to woman cent bred to farrow in the 1948 in head the total heifers Morgan, Los Vice-President, wood Vice-President. two number years C. on feed of old cows or chairman of is The number of Jan. Storage stocks 1, 1948, were 24 Second L versus Class protective a A preferred Edward G. Mc¬ Corporation, Ltd. Laughlin has been named Secre¬ tary and the law firms of man, 1, 1948 of butter million 28 million pounds was and Jan pounds a Kauf¬ Gallop, Climenko, Gould & Lynton in New York, and Hyde & Montreal in have been made counsel. The Superior Court in Montreal on Jan. 27th year set aside the com¬ pany's reorganization plan at his request, Mr. committee El- of and over 12% less than a year earlier the lowest since 1940. Angeles, and Knapp, Pittsburgh, Ed¬ as Ahern cattle were spring A reduction of V-k million head Other chosen sows production. be¬ ment of Joseph Mayr has announced his appoint¬ as with officers fewel* compared with last spring. It would take two to four years of fairly good corn crops to get a marked increase in hog Mrs. Loan could stated. stockholders of the St. Lawrence per expected in 1948. O. Mayr, committee were Milwaukee of coming the first First Joseph & Co., Eleven Am. Savs. & Loan Inst, Lowe was Mayr to Act for Stkhldrs. pounds Mrs. Ruth Lowe Pres. ward accumulate," it supplies, per capita meat consumption in 1948 is likely to be only 144 in 1947. NEW above prewar that surpluses .Other factors which would work was on thesis from coal is not yet devel¬ ■ of rate creased reaches ice oped to this point." -. each , during the 26-year-old educational body. syn¬ ; of from petrol¬ eum," Dr. Martin said, "but 10.7% behind During that 12 months period total oper¬ ating revenues were reported to and Savings "Present indications cost goods have reduced the saving from the abnorm¬ ally high figures attained during the war years, deposits in mutual consumer shortage of meats and other products. erate elected President of the American be save. of Boston states. its Ruth can to Barring unpredictable changes in demand, the supply picture indicates that prices of food can be expected to register only mod¬ serv¬ and temperature the deter¬ Federal Reserve Bank of Boston gives data indicating continued in Des The process is rapid and efficient the the is people our Although the high cost of living and the greater availability of ment assets in t - nthetic gasoline *:ral gas, are now over brought this figure to a new high total of $19.7 billion. Principal the from added an average of increase billion 350,000. and been additional reserve dollar of deposits. population in During the 12 months ended Oct. 31, 1947, ap¬ proximately 74% of its gross op¬ erating revenue was derived from its electric business, approximate¬ ly 25% from its natural gas busi¬ of same representing estimated an special Surplus and guarantee funds in¬ creased $110,000,000 and at the year-end stood at $1.9 billion, counties in the State of Iowa hav¬ 1940 other and the ices in other municipalities, com¬ munities and rural territory in 23 ing Schwulst B. of The gain in depositors has accounts com¬ both or Earl against struggle inflation of savings banks increased $169,000,steady, with savings banks 000 during December, 1947 (the serving nearly 1,000,000 more largest average monthly gain regular depositors than at the time since 1945) to bring the yearly of VJ-Day. In addition, 700,000 total to nearly $1 billion. ; special depositors in school or club "The year 1947 witnessed» a Iowa Power and Light Co. fur¬ gas forces mination now additions. electricity and most been additions already acquired or con¬ structed and for further property nishes Schwulst continuing Christmas clubs. property for net commenting to the report, said, "One of the encouraging factors in the In of school children and individuals a Gas gas furnace. continually pumped in at the bot¬ of pany's treasury of sale reimburse Mr. savings banks, of which 14,500,000 are regular deposit accounts and 3,800,000 are made up of savings swirling cloud hot of chimney-like tom will in accounts in mutual Bonds to be In the fluid lyst bonds the Governments. 18,300,000 now 2.95%. from in of peak years operation approximately yield to $116,000,000 in corporates and mu¬ nicipals and $1,095 billion in U. S. this country. There are Halsey, Stuart & Co. Inc. and associates, on Feb. 16 were awarded $6,000,000 Iowa Power and Light Co. first mortgage bonds, 3% Series due 1978, on their bid of 100.51%. Public offering of the bonds is being made at Proceeds pared with increases during 1946 of $249 000,000 in mortgages, savings banks to $17.8 bil¬ lion, an all132 in mortgage loans, $330,000,000 in corporate and municipal securi¬ ties ancl $260,000,000 in U. S. Gov¬ ernment securities. This com¬ out, deposits time were $380,000,000 of increase an This gain the $1 billion items in Mr. mutual of recent 100.99%, National Mutual Savings Banks and Executive Vice-President, brings total com¬ petitive bidding Feb. 17. Proceeds from this financing, heat process, passed were vapors each fur¬ developing a far efficient iron catalyst, Amer¬ more would supply the entire for all tvoes of fue1 that tinued, pointing out that the co¬ balt catalyst, or chemical stimulant, used by the Germans produced only a low-octane fuel. and coal plants nished Germany with much of her gasoline during the war, he con¬ tubes fur- the over gases decades, ex¬ resent vast dur'rg which time would he installations will rep¬ manufacture of liquid fuel, would be exhausted within two it compounds lead, new so much greater than those of atural gas as to suggest that the I ng-term development must be v th coal," he asserted. anti-knock .tetraethyl as plained. • of required 100 rating by ad¬ The Although r re from the' to the City, synthesized for Standard Section in the Hunter Playhouse, premium demand only a quarter of its known Martin, Assistant Director of the De¬ Oil Development Co., Eliza¬ all-day^ the symposium on Feb. 14 American Chemical College meet the nation's total Homer Z. velopment Division beth, N. J., .declared New York to be manufactured can reserves. and oil 5.6%, pointed Foiesees Vast Source of Gasoline Halsey, Stuart Group And Oil in Coal Reserves V Offers Iowa Pwr. Bonds Homer Z. Martin, of Standard Oil Development Co., U. S. coal reserves can U. S. increased banks of the savings Schwulst yield approxi¬ The bonds were 2.91%. mutual bowery Savings Bank, New York, reported on Feb. 12. accrued interest to mately the represents an increase $25,000,000 Philadelphia Electric Co. first an.d refunding mortgage bonds, 2%% series due 1978. The bonds were offered at 99.25 and together with proceeds from the sale of 150,000 shares of 4.3% $100 par value preferred stock, will be used to finance a construction program through this country, Mr. Schram pointed 1948 and the early part of 1949. but that a substantial majority of The program contemplates expen¬ the most successful comoanies in ditures of approximately $235,the nation are listed, and observed 000,000 during the six year period, that "there is a certain prestige 1947 to 1952, inclusive, of which attached to a company which has about $48,000,000 was expended in and* about qualified for admission to the 1947 $50,000,000 is Stock Exchange list." As to planned for 1948. The bonds will be redeemable benefits, in addition to "superior marketability," corporat'ons listed upon not less than 30 days' no¬ on the "Big Board" obtain, Mr. tice, at the option of the com¬ Schram noted: pany, as a whole or in part, at ; "The stock ticker keeps in¬ prices ranging from 103 if re¬ vestors constantly informed about deemed during the 12 months pe¬ orices paid for securities on the riod ending Jan. 31, 1949, to 100 Exchange. Newspapers and fi¬ if redeemed during the 12 months nancial services give wide public¬ ending Jan. 31, 1978. Following completion of the ity to the record of prices on the Ucker. Corporations whose se¬ present financing the company curities are bought and sold on will have outstanding $205,000,the Exchange are named daily in 000 first and refunding mortgage these newspapers, thus further bonds, $73,640,910 of preferred stock, including premium of $1,Publicizing the companies and, in¬ 168,910, and $137,816,005 of com¬ directly,' drawing attention to mon stock. Outstanding funded debt ' of their products or services." ; subsidiary companies amounted' to $40,168,185. of com¬ number 5.6% during 1947, with 18,300,000 savings. billion during 1947, Earl B. Schwulst, President, m2l0<ia^on The . means more products ever with relationship Although the New the concerns Mortgage Bonds underwriting group headed by The First Boston Corp. on Feb. 18 offered a new issue of An panies listed on the Exchange is ?mall compared to the several hundred thousand corporations in markets like of other which have a First the member firms. them, c addition, in offices 2,700 are correspondent which to build equip that, and securities with foreign countries six and well, as tions to ob+ain funds in Cuba, Puerto Rico, States and Savings Banks Deposits Reach Peak Earl B. Schwulst reports gain of accounts, aggregating $17.8 billions in of the New York Stock P Thursday, February 19, 1948 Mutual Offers Phila. Electric At concision of story, N. Y. S. E. President points out importance of securities markets to national and world economy. of CHRONICLE Board' First Boston Group Schram Aids in Dramatization of 'The Big As FINANCIAL & THE COMMERCIAL (818) with ers. Mayr other he said. stated. The to correspond preferred sharehold¬ intends Volume 167 Number 4674 SEG Enters THE COMMERCIAL the Accounting Controversy would materially distort it as a reflection of the results achieved by the business under tions prevailing the condi¬ satisfy the needs of investors during the period. this subject special item to permit a reader to judge item to an cluded be its propriety included ex¬ or in such abuses its on noted prominent banking house has in practice, it is im- that, the loans. as regard that to they which not. do The therefore, urges, accountant reliance a the on interpretations of management professional accountants to and make this distinction. The or a and which funds if cline, be sold to obtain convictions. I have I this at price differentials between low and grade municipal increase. In the war will years much money as tion the cost at reasonable be to to seems investment lower A work out based program a posi¬ an upon the probable trend of deposits arid demand for loans, and to invest funds, plan, A in accordance they as mistake with become this available. in arranging the ma¬ turity schedule of a bank is seri¬ indeed. ous The banks which Stayed in shorts from the middle of the 1930's to the middle of the 1940's because increase though true, an rate, lost income even expectations later of their came interest deal great a they expected the in while those banks ■which switched into long maturi¬ ties three to take four years or substantial a What Bonds stand ago capital loss. and low decreased. grade bonds The quite different. outlook is The ability of the the larger budgets, due to a higher price level, deferred maintenance, as you Should Be that agree should be invested as they become purchased. a With so many new coming to the market and considerable volume of old ones constantly reappearing in the sec¬ ondary market, there is no reason why a bank should not be able to find exactly what it needs to round out its portfolio. If you have doubts about the credit qual¬ ity of a bond, or if you group it would be a to overlook its bonds of investment. feel that the maturity is too long for your The mis¬ as a banker, lives, but it is sometimes difficult evaluate one's home situation both able we favorable factors to is difficult to basic if situation a and it spectacular have little real Most of us sig¬ find it easier neighbor's faults than our own, or dislike we on the mother hand, the Mayor there is tendency to feel that everything he does is wrong. In the trouble banker can influence fiscal policy, interests as a in but times often favor of seem Moreover, his as of use sound sometimes citizen counter to his interests tor. to his run credi¬ a position as a creditor may make certain groups suspicious of his advice. In de¬ ciding the amount of local bonds to hold, consideration should be given to the fact that the price trends the next few months, over of bonds with tancy in letting it pass. The time is definitely passed when an in¬ vestor to accept a second Furthermore, there is no to hurry in making a deci¬ obligations of You vestors you need have no hesi¬ needs choice. need sion. to of can take an extra day fear study the credit without missing a rare investment op¬ portunity. There are advantages and dis¬ advantages to in the cality, a bank's investing obligations of its and the amount market a who unknown in names were stances eagerly in bought were in¬ many by in¬ up familiar the particular situation. sult with The re¬ that prices of many bonds of this type reached levels equal to those of the best known names, and were such tions in some state or individuals, fore they afford them. can a prehensive and current files municipal folios. bonds These in releases to cases and local where tax there exemp¬ other privileges of value, The time trouble is while still high and signs are weakness of both for prepare incomes all port¬ are constructive" and timely. to on their are just beginning appear. which Obviously, credit file A building is not of mass thick a in itself. end an miscellaneous pam¬ phlets, folders and clinpings, contain much valuable may informa¬ tion. but it is certainly forbidding until the irrelevent and unim¬ portant data has been sorted out and the in significant facts presented orderly manner. A credit an file should be regarded without which careful as a tool analysis is impossible. Seven years ago, Ed¬ die Wayne and I presented an out¬ line for the analysis of full faith and credit ference. obligations to this This material was con¬ re¬ leased in an expanded form later in 1941 in the Report of the Com¬ mittee on Municipal Obligations of the National Association of Su- oervisors often Pres¬ cannot Banks "Municipals." under Most of this audience will recall that Larry Lunden was a member of this committee, and that Eddie Wayne its Chairman. Since Part II of was this report deals with the analysis of the credit quality of general obligation bonds, and since I wish to save for as the much time less formal as part possible of this afternoon's session, I shall not at¬ tempt to the outline analysis of but rather point lems which I a be financed within of framework system. the procedure for municipal bonds, up think a few prob¬ are particu¬ a duced only with great pain, and it be added that most so-; called reform measures add to this The debt retirement pro¬ gram should be set up with the definite goal of getting the debt paid and maintaining as much flexibility possible. as ment in good amortization of riods This can Increased years. It is, of course, It makes possible re¬ duced appropriations for debt re¬ tirement in depressions, and drains system tions before are additional obliga¬ incurred, since it is much easier to get a new or pressure is be worth but most to meet debt service. which have Com¬ expanded find the high costs of construction particularly burden¬ recently it for in them its pet themselves, will maintain and auguration would require their build in¬ a up higher level of expenditures and en¬ shortage of a while of to money contribute to further rigidities. over the prospects of a improvement than when the pressure comes from of group hand to on Many of these projects are thusiastic new part a project. higher tax levy when the community is since every almost sure to ness, capture Before we the to go question period I would like to bring to¬ gether the material which I have attempted to present. It appears that the money market will con¬ tinue to be tight for some time to However, we should not come, but there is reason to ex¬ quick to conclude that the pect that the Federal Reserve Sys¬ bonds of these growing communi¬ tem, through its policy of support¬ ties are not satisfactory invest¬ ing the government bond market, some. be too ments, for such areas are likely to have some very definite advan¬ which tages. for account their growth, and they may be fortu¬ nate in being spared from accu¬ mulated unsolved problems of the which neighbors. past, (3) their plague will be successful in keeping any declines in the prices of bonds orderly. record of a community is always an important indicator of credit quality, but it In generaly the been it has past profitable vestors to hold for idle funds that banks it to funds would make become available, turities that fit in with plan wise be in an indications. as A quick review of experience of the last few years may be very misleading. During the war it was almost im¬ possible for a local government posits. to tion, Consequently, prac¬ maturity as ma¬ overall out in relation to the other the of for investments which should be much effort. in¬ in the is necessary in a period such as the present to look behind surface spend money, and taxes, even delinquent levies, came in without not expectation that interest rates will go higher. It would seem, there¬ fore, financial The older distribution, carefully worked assets, well as the character of the de¬ At present market prices the yields on banks, which municipals will give can use tax exemp¬ relatively attractive yield. Since the floating supply is large, a bank tically all tax collection records good'. The real question is. has the unit taken advantage of suited to select particular issues its individual needs. look There are great differences in the this ernments to meet its period of high incomes to put house order? in the Is com¬ munity making a can ability of the different local den caused by gov¬ the added bur¬ higher prices and an adequate ap¬ propriation for capital improve¬ ments? This, of course, may be mental services, and commitments, even more than usual, should be either restricted paying by struction out of for new con¬ income current by retiring debt. The various plans which have become quite popular in poning some principal vague likely to be are quarters for post¬ retirements to future period are some slick. as dangerous as they Incomes are excellent and contributions toward the pay¬ of ment capital improvements should be heavy now. . (4) Since it is inevitable ments a must unit should be to advance, increase the its ability receipts carefully studied. are The income of the community may be to situations which are only satisfactory bur which also improving. In a period In which many basic economic read¬ justments are taking place, it is extremely important bonds issued by a a to select community with promising future, rather than good record. a Investment decisions based upon vague impressions gained in the past may prove very costly indeed. that the budgets of most local govern¬ of the demand for improved govern¬ not At last we have ket in municipals. a buyers There mar¬ are now relatively good investment opportunities to be found in this many field for institutions and uals who to > principal in pe-> high income serves two of purposes. existing or State of the title of but difficult to proposition. budget can be res- practical a might Are public policy to make any necessary changes in the revenue Problems in Municipal Portfolios as Most items in off the cash during prosperity. A infrequently argue substantial cash balance is always for improvements, which, in them¬ a potential source of serious weak¬ selves, are highly desirable, but munities officer, a little careless¬ period such as the pres¬ ent will result in a portfolio of bonds which were good. The bank supervisory authorities have re¬ cently issued a number of releases urging bankers to maintain com¬ in on the expendi¬ budget is likewise groups not vestment ness was lo¬ own of the like sure cash When distinguish between trends see our consider. too close to are munities, improved services, varies widely. Decisions based upon past impressions are subject to an accumulation of er¬ rors. If luck is not with an in¬ unfavor¬ and strictly local mar¬ ket, may be unsatisfactory. Dur¬ ing the war, when there was a shortage of tax exempt securities, portfolio, demands for as objectively, especially when there Significant are his issues the of course, knows a great deal about the community in which he of- course, be Some of available, and that municipal bonds provide a suitable field for investment, the next question is, should is should ferred a what bonds which squarely. nificance. funds hold but relatively unknown local gov¬ ernments, and if the bank's home town happens to be in this pre¬ to excess which it wishes to question well as highest grade municipal bonds are obligations of well managed to improvements. sounder emphasizes painful. highly desirable, obtain issue? desire the finer things of life be¬ revenue policy be faced take bond passage problems new Flexibility ture side pf the a We be at present prices? What are the projected building programs? A.re they in line With the financial abiiity of the community? Com¬ now a means citizens that the make the reorganiza¬ even more (5) re¬ be clone only by providing for community afford to build heavy contributions to debt retire¬ the can were events which Purchased? If bonds the capital high share basis, per the importance of this point. tion to needed system. bring will will governments revenue are which prod¬ is likely of make of time How produce to their The chances com¬ the schools, streets and water sys¬ tem reasonably adequate? If not, the (Continued from page 21 > period. in taxes throughout the the of sult that the differentials between Bank Investments offset the the are all municipal bonds appeared, on superficial analysis, to be improv¬ ing. It was almost impossible for the local governments to spend as fail forms (2) The extremely high cost of rigidity. that high bonds it there obligations which been construction makes it necessary to look critically at the condition of time should be limited to situations which not only will pay life the Have as: If so, are there other pos¬ of income? In other to definite convinced am commitments Does which words, deposits should de¬ if the demand for loans should increase. point especially period of rising a sion is usually found. The con¬ servative course would be to avoid sources they wished, and taxes, including delinquent levies, were easy to collect, with the re¬ Municipal Bonds than assets? the one become may Prospective investors will do well to investigate the methods steady and profitable mar¬ Does it depend upon wasting sible or On for a ket? available, various local governments to meet later ucts be obligations, about can machinery will prices. community withstand de¬ pression? home town are high qual¬ and put the balance of the funds available for investment in ity, shorter period, on a total even or will the of your is questions postwar adjustments made satisfactorily? Is the munity making progress? volume of local issues, if the bonds information legal burdensome in trivial, and there which need to be further research to by such answer the limited a the services gaps in a year emphasis of net profits for George D. Bailey, President of im¬ but very prevalent, over¬ proper, or filled municipal bonds which has always is thorough. this is arid often are local of unusually reason, irrelevent sub¬ general hazards are holding be some the bondholders any good unless gather it in to the public treasury. Tax rate limitations and other re¬ strictions on charges for various sort One compromise in the entirely satisfactory, but this will munity, but it is a tedious task to which are used to avoid these lim¬ the significant data from the itations, for some method of eva¬ most holding satisfactory but which management to de¬ are also improving, or at least not so that the report deteriorating. I expect that the ating performance and those sus¬ manipu¬ lations could be" occomplished, if So desired, under any rules of practice. is same which the issuing corporation on investment in misleading income and earned Surplus statements." Obviously, however, bonds to the The of present a part of analysis which it is easy to slight. There is usually no short¬ age of information about a com¬ roughly the quality. disadvantage general market and result may local ject of names credit ing) is exceptions to the conclusions stated in the bulletin because of fear that ceptible to abuse and known same the the for comparable maturities of bet¬ determining income. Respons'bility (for so determin¬ takes For markets money at 23 not do should to have considerable - nrocedures "seem to be prevailing in the purchase supports, although not unani¬ oossible for mously, the current onerating per¬ scribe items formance concept. The Security reader can properly distinguish and Exchange Commission; how¬ "those which affect current oner¬ Such the me as American Institute of Accountants it all offered, the price will natu¬ rally sink to something below that to respect to A recent bulletin (No. 32) of the that able to absorb are merit public accountants." Certainly, the judgment of man¬ with other years and with similar agement and professional account¬ figures for other companies.- Ob¬ ants would seem to be better than viously, the current operating the reflection of no judgment at performance concept accomplishes all. this best. An accountant of a has indicated buyers seemed to "It is seldom possible enough information with give the might be accounting t^ey must be able to compare net income of a company for one year ever, longer local to regarded solely as an problem, investors and creditors should be vitally concerned since . the market creditors. The "all-inclusive" concept would include all items regardless of the distortion involved. Although os¬ tensibly and investment significant (1) In a period of rapid read¬ justments the study of the eco¬ nomic basis of the community bonds serious countants, in an article in the Jan¬ uary issue of "The Journal of Accountancy," indicates the fail¬ ure of the all-inclusive concept to would and ter (819) time, the no the American Institute of Ac¬ cept sharpens net income for* the period to eliminate items that larly again, Discussion has increased in recent weeks regarding a subject of real concern to all members of the financial community. Involved are two different concepts of "net income" in corporation reports, undoubtedly the most important single factor used in measuring a company's performance. The "cur-f, con¬ bonds went enter enter operating performance" such CHRONICLE higher than those of general obligations. As these units even only items relating to "current operating performance" in income statement. rent of prices FINANCIAL market Takes exception to conclusions in Bulletin of American Institute of Accountants which & can advantage. use tax individ¬ exemptions 24 THE COMMERCIAL (820) FINANCIAL & individuals When Today's No. 1 Problem—The Depreciation of Our Currency (Continued from page 2) services means various things and to the sale for fered and the relatively large demand for them. In brief, on the people of the United States. supply side, the whether one is long-drawn-out business depres¬ sion of the 1930's kept production, dealing with the cost of living of with some exceptions, at relatively people in general or of a certain low levels. Then the period of grpup of people, with the values the war reduced production of of people's property, with the purchasing power of people's sav¬ goods for civilian use to an ex¬ ings accounts, insurance policies, tremely low point. Various gov¬ It depends upon in investments and government with the purchasing power of the wages and salaries of people in general or of groups of people, and so on. If an individual is obtaining securities, * dollars power of his dollar de¬ clines, he is gaining in the face of rising prices. For example, this tends to be the case often, per¬ in general, with farmers— their incomes, for a time, tend to rise faster than their costs, and haps give them, for that period of time, a real increase in purchasing power. Because the early stages of sharply rising prices tend to bene¬ fit farmers, they and the officers their profits may ! of farm organizations are gen¬ erally pleased with that state of The fact that such a rise affairs. in prices is a prelude to a later drop does not seem to alter the generally position farmers as a by taken group the and by many, if not most, of the officers of farm organizations. As another example, the bank¬ ers' business interests are pri¬ policies during the 1930's the and acted as period of the war also depressants on produc¬ tive activity. Monopolies, both business and labor, have also been factors. On rapidly than the pur¬ more chasing ernment the demand been factors have ment's policies chief side, the the of govern¬ and money credit expansion in which were employed a variety of devices; the low interest rate policies of the government which invited heavy borrowing and spending; the abandonment of the gold-coin standard, thus depriv¬ ing the people of a direct control over their government's manage¬ ment of the public purse; the war, monetary which caused and invited unprece¬ dented spending and the growth of an unprecedented volume (for the United States) of money and resting largely on gov¬ ernment debt; the widspread no¬ tion that debt and spending, rather than production, saving, and hard work, provided the roads to sound economic prosperity; the loans and gifts extended to foreign coun¬ deposits gold-coin standard forces the redemption of promises and, therefore, restricts the banks and government to the issuance of promises that can be redeemed. Any issuances of promises to pay banks. A to intent without is redeem immoral. economic and un¬ Much of trouble with currency depre¬ our today has its origin in immorality. All our paper ciation such outside the Federal Reserve banks, except silver cer¬ tificates, carries a promise to pay which is "fulfilled" by the sub¬ stitution of another promise of the same kind. The only exception in money use arises when silver and minor coin is this money overvalued money in so far utilized, and are an When cerned. even is content metallic its as a Thursday, February 19, 1948 CHRONICLE con¬ government and banks issue promises that are not fulfilled, the standard of integ¬ rity is besmirched by a lack of good faith. The promises of our government and banks today are not good, in so far as our circu¬ lating paper money is concerned (silver certificates excepted), and the value of these promises is de¬ choose can and other coin and paper money, they will choose what they regard as the silver, gold, between in doubt most valuable one when regarding the value of any of the other money. The factor of con¬ in venience the of use paper gives way to the desire for When governments or other prom¬ money safety. banks issue money or that raises value, those ises to pay in a manner doubts their to as entertaining such doubts demand gold in lieu of the people will silver, deposits, bank securi¬ or money, paper or government or These demands for gold be¬ ties. flags of warning to the red come issuing fulfill authorities. They must their promises to pay or trouble; they must put their face affairs financial A in order. standard and sys¬ place in the hands of every individual who uses money some power to express his ap¬ proval or disapproval of his gov¬ ernment's management of the gold-coin thus tem people's monetary and fiscal af¬ fairs. It gives the people of a in funds the competitive money markets at competitive rates. Most of our Federal debt should be funded into long-term consols try in which no stigma is attached to those leaders who run to Wash¬ ington for a handout. Indeed, it is an accepted practice. While we uneasy are all doing it and people in general have not under- * stood clearly the causes of what has happened to them. Congress-' are worried; they are, ap-; men parently, not weaker in character^ nor more corrupt than Congress¬ of men generation ago. The dif^I they are caught in- a ference is that a the spending of their money was largely destroyed brake that since been on public spending and the creation of cur¬ rency was removed. . ■« The hope of the people now lies with their Representatives and Senators in Congress. 1 But all bearing a rate of interest suf¬ these legislators have been, and by the government, ficiently high to induce non-bank marily in the market value of like monopolies, has tended to institutions and savers to invest are, subjected to the merciless their assets whereas the public's drives » of all sorts of' pressure affect both supply and demand in them and to hold them.' These interest is primarily in the pur¬ adversely. Price fixing, except in higher rates would put sharp re¬ groups. Most members of Congress chasing power of their deposits, those cases in which rising prices strictions on government borrow¬ can stay in office only if they securities,, insurance and other would not have encouraged greater ing and properly allow people a accede to, the demands of these savings. As a consequence, the production, has tended to aggra¬ better, rate of return on their sav^ highly-organized -pressure groups; banking fraternity as a group is The facts in respect to this situa¬ vate the distortions by depressing ings. • rarely aroused when a nation be¬ Government buying of goods to tion should be clear by this time. production and by encouraging a comes involved in a depreciating aid Europe should, in so far as is We point out that Congress has greater demand. currency resulting from rising possible, be diverted from the degenerated into a body that does prices. It is for this reason, The Needed Correctives United States to other countries little more these days than to vote among others, that the banking Since the causes of our currency as should the purchases by those away the people's money and tc systems throughout the world depreciation are many, so are the governments to whom we extend dissipate our national patrimony have usually gone along with an cures. In principle, those forces loans. This is imperative in the in response to the demands of all inflationary tide and have in gen¬ that increase production relative case of such depleted natural re¬ pressure groups that command a eral done practically nothing to substantial number of votes. Tha' to demand and decrease demand sources as oil. help a government save the But what we do relative to the available supply Thus far, the chief attention in is true enough. people from the depreciation in of goods and services should tend Washington and in popular dis¬ not seem to recognize is the fact the value of their purchasing that every Congressman has been to bring the decline in purchasing cussions has been centered in at¬ power. Where central banks are tacks on symptoms, not causes, of placed in a weak position in the power of money to an end. tools of government treasuries, face of the demands that can be Price fixing is not helpful, ex¬ our currency depreciation. this complacency is most pro¬ made upon him because the peo¬ cept where rising prices will not nounced. A Return to a Gold-Coin ple have lost direct control over induce greater production, be¬ Were one to survey the effects cause the public purse as a consequence Monetary Standard and it discourages production of currency depreciation on dif¬ of the loss of a gold-coin standard System as a Basic and invites greater demand. Ra¬ ferent Corrective and system. individuals, groups of tioning, ordinarily an adjunct to So long as the Treasury and people, and institutions, he would price fixing, deals with results Of the recommendations just find that many individuals and or symptoms; it does not in any made for terminating the depre¬ Reserve banks can issue promises businesses occupy a mixed posi¬ ciation of our currency, probably to pay which they do not intend important way reach causes. tion. Some own property which Lower taxes on producers should the most potent would be a return to redeem, and do not redeem ex¬ appreciates in value while the encourage greater production. by this country to a gold-coin cept in other promises which are value of their bonds, insurance, irredeemable, Congress Lower tariffs and the removal monetary standard and system. At likewise and savings accounts depreciates. of obstructions, domestic and for¬ the same time, it is, apparently, can spend and spend and generate The effect of the declining purthe very thing of which we are eign, to trade should stimulate the corrective that is least under¬ now beginning to be,afraid at this ing power of the dollar is, there¬ production and enable people to stood by the general public and, fore, different for people occupy¬ buy more goods and services with late date. possibly, by the majority of Con¬ ing different positions, having dif¬ their money. Were we on a gold-coin stand¬ ' gress. ferent sources of income, and Monopolies—both business and profligate spending would When the gold-coin standard ard, owning property in differing labor should be broken send up. up red flags ofj warning was withdrawn in 1933, the peo¬ forms, in our economic system. Feather-bedding and all obstruc¬ throughout the nation. People tries. Price fixing - been' country, toward the destruction inthe value of our dollar by un¬ precedented and endless spending; of the money and the dissipation: of the wealth of the' people of this v; country. ' / ' * trouble goes; of the; the of source abandonment the to ' Abandonment, Gold Standard of the The ' ' Source of Trouble Is and system, withdrawal' people of their control- standard and to the consequent from our the over public purse. ' * history is replete; chapters on this par—, world's The black with type of abuse of a people, ticular and on the. failure to understand,; what their govern-; ment was doing to them, It would, appear that our people are no by their government, people's until too late, in< smarter than others have been sort of abuse by' government and that the' to this respect their prospects are that we, like many < other people, are going to learn our lesson the hard way.- Unless is leadership by provided Con¬ and the Administration, and; public are in-1 gress unless the general structed these' leaders,;-there, by to be little hope that the people of this country will under¬ stand what has happened to them or how to get at the basic sources appears of their trouble in so far as rising profligategovernment4 prices, spending, and the depreciation of : our concerned. currency are It is emphasized that the to be general public do not understand; what has happened to them. They do not understand the nature and , ' has sweeping them, just as it has been sweeping all the people of this gold-coin public purse. people's control over which situation new and abuse of their the we say stopped." The important point is that the back Since "they it cannot be about it, are nation direct control over the use by the with¬ drawal of the gold-coin standard and system in 1933, most , adult clining with relative rapidity in persons should be able to see what terms of what they will buy. Interest rates should be permit¬ the spending orgy and government ted to rise to their natural levels. abuse of the people's purse have The government should borrow its proceeds to demand its share. We have reached a stage in this coun¬ implications of a ard and system. derstand that gold-coin stand-:, They do not un-. "man*; so-called a inconvertible paper cur-, rency system and a governmen-: tally-managed economy go hand) in hand, and that under a system: of a governmentally - managed economy the people lose much of: their independence and power to control their government. More-} over, they do not seem to be con- aged" about the fact that, under cerned so-called our "managed" irre¬ deemable currency system and our pronounced development of a gov¬ ernmentally - managed economy, our Treasury and Reserve banks issue promises to pay which, with; exceptions, are both dis¬ minor dishonorable. and honored — ple of the United States In short, the decline in the pur¬ chasing power of the dollar is one thing; its effects are something else. The latter differ with re¬ spect to different people and dif¬ institutions. ferent : In general, and in the time, few people can evil consequences of a ing currency nomic course of the escape depreciat¬ because of the maladjustments eco¬ tions to production, except where matters of health, safety, etc., are involved, should be ended. The tending the tion and subsequent liquida¬ business recession. The Causes of the Depreciation Since prices are the result of the forces of supply and demand, .... of group, they could point to falling The country should be returned not understand the difference be¬ the tween ties available goods and services. gold-coin a ment's use lic purse. force taining what caused the relative scarcity of goods and services of¬ so that and abuse of the Such a pub¬ standard should contraction in the gov¬ ernment's and banks' promises to outstanding. Return to gold-coin standard probably pay now a would be been of the one since has ascer¬ standard some factors in by fallf the prices of behalf lems found would their monetary system has meant to them. In large part, they do the answers to the resulting probbe reserves what that against power to currency one our the most of the potent deprecia¬ important sharply rising prices great expansion of irredeemable promises to pay, is¬ sued by the government and the of obvious have government's a clear understanding of fundamental change in good and Most people the fuse and public purse. It is that the general public no money. use the an inferior seem to con¬ convenience- of paper with the far-reaching and fundamental monetary functions performed by gold—its services as money a against promises to pay, clearing functions (domestic reserve its and foreign), its superior ability indefinitely. to store up values The manner in which a gold- coin standard and system place a high degree of direct control over the government's use and abuse of the people's purse needs to be understood in this country. is charac¬ concern amount of attention to these mat-, the tion to control purchasing correctives are direct ductive buyers' credit adds to the ciation of currency are many, their abuse except in the instances of govern¬ ment price fixing, and since the causes of rising prices or depre¬ our of of teristic not only of the. busy man begin to exchange; the promises to pay qOhe Treasury and Reserve banks'for gold. Bank over the people, once more, would have direct control over the govern¬ at¬ also lack would credit, except in self-liquidating productive activities, should be restricted sharply since non-pro¬ generated strains de¬ with and and were valuable and of use connection to stresses a important property right in gold but during the period of rising prices the prived not only of This government securities would de¬ cline. Should pressure then be put Congressmen upon bank this reserves and that and the pressure decline in prices of government vote securi-; and sufficient rea¬ why they could not possibly for further spending of the good as sons in spend to people's 1 money. Today Congressmen have no protection. As a consequence, such both eral they and the public in gen¬ are which have grown in num¬ size and aggressiveness groups ber victims of these pressure and until today most they ominous tional are probably the danger to our na¬ well-being. Each group sees other groups demanding and getting something at the public feed trough, and and ters who woman pected to give could or our selves ex-; them j is also* number people who regard them¬ as able to understand, to characteristic of be important - hardly be expected understand to cannot any of a it great lead, and to advise others. Leading bankers and industrial¬ ists are marching along tide of events. with this Most Congressmen, practically the whole Federal Administration, seem likewise to and be going along. Indeed, they praise and defend the course be-1 ing taken. modern — It is said to be the progressive — way. the Having been so labeled, it is not to be questioned—not in these days when the act of labeling is popularly deemed to provide the final and correct answers as to nature of the thing so There are a few labeled. members of. Congress who understand the re- Volume 167 Number 4674 lationship between ment of system has the abandon¬ in this country in us Representative of them; and Nebraska on who women are significance of ard and of ple of the public some men the country leadership of is these not to generation make it and to of that of today a system pleasant paper of which they do not intend to honor do not honor. This is a fun¬ damental issue.\ *. the currency—is banks issue promises return to seem making it clear that what unlimited authority to issue promises to pay without being required to with business our emphasized that the aest currency system ever devised 'by man cannot of itself prevent rising prices and a depreciation of purchasing power of the currency in terms since be can also 1929-1933, a great many people responsibility for redeeming regard the gold standard as in They talk much of their some manner a, or the, cause of responsibilities, but thev are set¬ that ..business recession. Because ting up resistance against being man's mismanagement of credit factor * 4 do well to * scrutinize in respect to the move in Congress, to return tem - * redeem. / Seeking rights to deemable promises to ; ing their issuance issue It ifre- quired to hold reserves,, while evade responsibilites * fighting ' for to redemption of their promises constitute a highly accurate pic¬ ture of the thinking and position of ; considerable number of lead- a ing bankers, Reserve, and Treas¬ officials in this country today. It is a case of seeking rights withury out * manifesting ;,willingness to assume corresponding responsibil¬ ities. This is an enterprise that * clear seems losing value, were appreci¬ was ■( 77. ■ ^that the people aged" that sharp depreciation will not ultimately set in, no matter how totalitarian a government be, if the forces that can depreciation become suf¬ ficiently strong. The fact that may cause Russia has recently provided demonstration of this truth thus far not .to be in face this of of sons the this the country. and a seems widely nized recog¬ In the other les¬ many kind, including depreciation of our same present the contentions are still invites retribution of a serious advanced, as they have been dur 3 sort. It definitely is not good ing our period of suspension of leadership. < *7 gold payments, that our govern¬ When a people and their gov¬ ment has sufficient power to main¬ ernment depart from standards tain the 5 purchasing power of our of common honesty they are not irredeemable paper money or that only headed for trouble but they it will hot permit depreciation to are in trouble. r is money, done defective abuse and it has of cause The of to the . •' not valid and * There to pear the " no adoption valid or irredeemable an r be would ap¬ defense for continuance paper . of money system^ in this country. More¬ over, it is by the establishment of a monetary system involving * ; honorable honored promises should expect to find our that we best cure currency * and services.. for in depreciation of terms of goods '7 . , - our and - go "too far." That paper is paper and gold the gold great People • of fact a that majority of the people commonly are a so-called easily answered. old; they have the same attitude toward the lessons which through painful experience. It would in this we ap¬ country - are determined to repeat this type of performance. 7 7 Since this is in general the state affairs in respect to the pop¬ ular attitude toward our of currency is a promise; and the peo¬ decide to treat such prom¬ ises with the contempt that fulfilled promise invites. a Besides the fact that most peo¬ ple do not understand the nature and far-reaching implications of gold-coin standard and system, our people have been badly misled by the advocates of a governa ' * ~ - ** * Our ! mentally-managed economy, by a variety of economic and political agitators, and by those people who float with the tide under the ban¬ of sweet reasonableness to¬ people do White, one-time and not 1876) he described ward everything that comes along regardless of whether or not they roughly, 1789 to 1800. For - ' example, has become the J. it. " Because his cannot do as he the in in the paper money from, Said White reason careful issue of a the idea of standard commerce coin currency redemp¬ recognized of civilized na¬ citizens or another, consideration thoroughly grounded in the history and principles of monetary standards and systems. In a to similar manner, understand, or we we seem are willing to profit from, past un¬ expe¬ riences of people in respect to the other measures that also should be taken to retard and of this leadership it country. This people in avoid, and it is our insidious seems reasonable appears will may highly continue perilous It to which be further save our ably in monetary pursuit of people a seems more any that present and can unfor7 people of the reasonably clear that is prob¬ important in this than other field of domestic affairs at the present time. value of the contribution of leadership to the people from of this welfare country of The such the promises to be immeasurable. The need for this leadership should be the course assert most a for the one the leadership of statesmen will be leaders and at¬ to are to sup¬ probable on course, prove tunate depreciating tempt and leadership, it we and of the related funda¬ mental causes of our currency banks clear. Announce New Savings Bond Drive Treasury Snyder drive to say to promote ownership of debt. *• off bank-held 'A great volunteer army of Sav¬ ings Bonds in the wartime the and same bond-selling that paigns were organized. Definite quotas are in process of de¬ termination and probably will be be a held national confer¬ in Washington March 18-20. President Truman sounded a call for intensified Government efforts to sell Savings Bonds when he sent a special message to Con¬ gress last Nov. 17. He pointed out that increased savings by the pub¬ lic provide one of the effective weapons against inflation. Secre¬ tary Presi¬ Snyder dent's quoted words in the announcing the Security Loan. The drive will emphasize sales Series E Savings Bonds—"the people's bond." These will be termed "Security Bonds" during the campaign. Every American will be urged to contribute to his of own future security and the se¬ curity of the national economy by buying them. Secretary Snyder said: "The Treasury has two specific purposes in conducting the Secur¬ ity Loan. One is to encourage Americans to build greater secur¬ ity for themselves through greater savings. The other is to relieve inflationary poses are one "During the Security Loan, ef¬ assistance of a great many patri'r- otic, volunteer workers. But the Savings Bonds program always has been a people's program. Its success has been due to the volun¬ teer spirit I and volunteer activity. that there will be an¬ other resounding response to the am sure Government's appeal." The 18-20 three-day conference March in Washington to decide sales goals and other final prob¬ lems of the drive will be attended by public-spirited leaders of groups expected to head up the volunteer selling organization. In¬ cluded will be representatives of industry, labor, retailers, newspa¬ pers. radio, magazines, banking and business. Already, according to Secretary Snyder, President Truman's call of last November has brought widespread assurances of volun¬ teer help for the campaign, along with comment from many sources that such a bond-selling effort is vitally needed to ease the present dangerous price situation. Edward W. Clucas Dies serves fare of the nation. potentially of the public now forts will be made to reach every family. This task will require the These pur¬ pressures. interlocking; the other, and both serve the wel¬ other outstanding. This shift¬ ing of ownership of the debt is sound debt management. ^ ' cam¬ area to debt for the manner or inflationary portions sales¬ is being recruited women drive, salesmen Edward W. Clucas, senior part¬ ner of E. W. Clucas & Co., 70 Pine Street, New York City, members "There is general recognition of the fact that buying Savings Bonds is one of the best investments an died at Harkness Pavilion, Colum¬ in addition, we stultify ourselves by playing the American bia cheapest sort war ing prices. symptoms of novice or Instead, like the to we end ris¬ deal with greenest sort and, of so-called "poli¬ tics" with these serious matters. A proposal to provide this coun¬ try with a gold-coin standard the intoxication of on expe¬ are should raise the such as thoughtful one nation intrusts to its leg¬ not based tion and except from those Money Inflation in (1912 edition); "When¬ any short, it islators generally-accepted he for ago "Fiat France" in practice in this country to blame ; gold for man's mismanagement of - in ever and Cornell years benefit of the people of this coun¬ try the lessons learned by France when she experimented with ir¬ redeemable understand it. under¬ of many ner - yet historian, diplo¬ president University* when (in system comes to the issue, and from those spe¬ cialists in the field of money who not stand the wisdom in the statement made by' Dr. Andrew Dickson mat, rienced non- , " • pressure given It not likely to be nation-wide pressure on Congress and the Administration, unless leadership is provided, to correct the far-reaching defects in our have bad sort of can structure, there is that that is not fulfilled. pay ture correc¬ that many of those now in¬ adequately informed and indif¬ ferent would give support to those advocating the wise and proper course. Without such into the question of whether government officials who understand the na¬ the experiences of still earlier generations should have taught them, and, as a consequence, they learned the old lessons government chiefly to harmless United States. ence much basic- standard pose and ineffective protests. The issue resolves itself made public at gen¬ adopted most monetary itself, it their "positive" action against fur¬ ther increases erations for able paper money can depreciate to any degree. It is a promise to to understand the lessons of the past, or they think these lessons are of no value today. Earlier who, of the matter is wish a the honorable and honored. Should good and using them to shift are gold-coin standard and The people either do not monetary rise better of system in which the promises of the this that is leader¬ President Truman at his press conference and Secretary Snyder announced on Feb. 12 Treasury plans for a Security Loan drive start¬ ing April 15 and continuing through June 30. Its purpose is to pro¬ mote savings and fight inflation. The United States Savings Bonds Division of the Treasury will be<£in charge. given a "managed" irredeem¬ The truth ple Mislead by Advocates Managed Economy is of this country are not yet ready to admit in respect to money. " - is price the comes the m^ny times and at many places in the past. Never¬ theless, the public in general ap¬ parently thinks today that it does that a illu¬ precisely for this reason that the majority of them prefer to fide the tide to higher and higher price levels while they confine purse; in been advanced pear a question enough symptoms, and to give of the United States, people one tives, recession, and the for medicine general j to an is the savings and fight withdrawing funds from consumers power of our currency. , " it use ' - that potent a depreciation reasons system. need be is that the by positive action causing some recession. sooner peo¬ the public there in Federal government to deal with causal factors rather President Truman and Secretary of extend from April 15 to June 30 is inflation. See advantages in these days for not returning to a gold-coin standard and system are not wish think should and our over been, and is, the purchasing 1 caused control Moreover, they of this country do not yet under¬ stand that no irredeemable paper money is likely to be so "man pay, defend¬ irredeemable of promises, and even advancing the idea that they should not be re¬ while practically things gold, almost alone, ating in value. : , . the fact that, be us. fundamental ship be arrested may be a potent depreciation. such system and responsible for these catastrophes has been widespread in the face of and ple to lose being made tips country all other of Our to us It is ago. indicated, that disease as should dangerous; it has sys¬ impaired or cluding governments and gold standards, the belief that gold was are to a gold-coin system which would require the Treasury and Reserve banks to limit the issuance of their promises to those they can * economic destroyed other are of enough high currency depreciation, defective monetary sys¬ a can, cause other our large number of institutions in¬ a eare- and of taking fully the position they 4 things undermined tems Treasury officials) -would multitude a to whereas . of and services rising prices There many. can and of bring rising prices to an end. The point is, however, that a good cur¬ rency need not be a contributing of any and goods causes important things, them. compelled to make good on their promises to pay. ' > 7" ; It is suggested' here that such bankers {and of the more without We system of direct intelligent people. deemed or sion can circulation, since they irredeemable, than would be this clear to all It is to be level year govern¬ should make A as a larger volume of promises a engulfs whether than with anything that might return currency the power of our money without recession our redemption. The present degree of depreciation in the purchasing paper assume t of that reason much are Because the suspension of gold payments is widely associated almost the activity in behalf our people, trusting to luck waiting until a possible crash as an ever higher level is reached, there is general objection to doing radi¬ a and compre¬ with and observe much dis¬ we public does not arresting any further rise in prices, it should be noticed that main¬ in not safe from possible under gold standard. a ir¬ our January, to understand important are cussion parity with gold at depreciation a govern- pay of system to pay into relatively free to our ment and Federal Reserve banks have been able to, and can, pump "the "managed" integral part an we temporarily experiencing real Although money established for irredeemable so-called a cal intelli¬ a rate that paper on 1934, it is being compelled to fulfill them, are, if consistent, opposed to a ? is tains it argument versus Currency fact that general 25 hend, or whether these officials Will simply ride out the course gains from the current rise in prices may be expected, in gen¬ eral, to oppose a return to a goldcoin standard. Not Exempt conversion redeemable of a to and want and irredeemable an and Reserve pay ^Numerous bankers today man's a indirect of governmentally-m a n a g e d economy, all who think they de¬ sire a high degree of governmental dictatorship, with the government attempt to de¬ system in which the Treas^ ury and Reserve banks are per¬ mitted to issue - promises to they valuable managed - money—a are a to'be is to gold as Since prefer¬ responsibility fend abuse paper money. in positions men Despite the of na¬ issuances more Such mentally It is not thing to listen to , their thinking, gence, for, they not honored. worst." this argue promises in in which one best,"and the to a of reckless Monetary System Depreciation He most are . From Radical per circumstances fight to establish, to because and since Our (821) withdrawal of the intoxicating stimulant. Similarly, those who a depress the value of the possession of every citizen. nations to slip down to cheap pa¬ currencies, the latter curren¬ cies are therefore to be preferred. The cheaper money becomes "the the of to them the power or re¬ over people credit necessary honorable ence the raise CHRONICLE every article in promises to pay, have driven gold hiding and have caused these prospects for a return to fiscal and monetary sanity in the United States appear to rest. is that argues tions, that the It to into upon few be compelled to promises in gold. peo¬ control It purse. not his gold gold-coin stand¬ a will even and returning to the this he deem Outside understand also FINANCIAL tions, it intrusts deeming them in gold, he blames gold for his unhappy experience and attempts to fix things so that duced a bill (H. R. 5031) to put this country on a gold-coin stand¬ ard on January Congress? there & . January 20 he intro¬ 2u, 1949. he; condemns it. cannot make things of as of one it, less value, such as paper money, valuable as gold Without re¬ this Howard is with Because he and what since happened to Buffett pleases gold-coin standard and a country. THE COMMERCIAL the question, quick¬ ly, of returning to sohriety before a depreciating currency runs its course ending in the blue "morning after" with its economic ache. cation sickness and head¬ People enjoying the intoxi¬ are not likely to welcome bought are can these make. Millions who bonds during the of the New York Stock Exchange, Presbyterian Medical Center, at the age of 68. continue to buy them. able to more—and asked. We Many buy more—by saving so if they are will do are about to do will Kinney-Coastal Oil Company directors have declared "The relief of sures Kinney-Coastal Oil Div. the asking. inflationary pres¬ be accomplished through the Security Loan in two dividend of 3V2 cents able March of record 13th to Feb. 26th. an annual share pay¬ stockholders a A dividend The money received from the public will be withdrawn from of the The company has outstanding 3,- ways. consumer markets, and it will be used by the Treasury to pay IV2 cents was paid last 650,000 shares of 5 cents par year. value. Thursday, February CHRONICLE COMMERCIAL & FINANCIAL THE As We See It (Continued from first state what page) production, and purchasing are needed to carry out the to recommend measures by attained/' The report from undertook, of course, to do Chief Executive. during the ensuing year ;.policy declared in the Act and which these objectives may be which these words are quoted what was thus required of the power Yet apparently we must conclude that in less than 30 reach any definite can weeks or more before they conclusion about current events! that they must take six were, •J the in j ; / , •" ? But 30 have or so ago or the President did not appear, to the realize profits through and downs of business, prices and profit margins are geared to the expectation that full use of capacity is not a normal situation. This means that, in periods of high production, pricing policies and practices are followed that produce a level of profits designed to protect the individual company during future declines in business activity rather than to. contribute to the prevention of such declines. Such policies are not conducive to the continued health of the business community because they the ups . act that it will not continue. the assumption on "The price mechanism may serve either to promote •. to prevent a safe balance among prices, wages and profits. The greater the success of our free enterprise '» system in maintaining this balance, the less need or , there will be for direct governmental intervention in the eco¬ nomic system. This imposes a heavy responsibility upon those business managers whose decisions importantly # "One of the purposes • . of the Employment Act is to provide a new climate for pricing policies. The act con¬ templates that the combined resources of business, labor, agriculture and the Government will be used to do away . with business fluctuations of the violence known in the past." From An And now we have Unexpected Quarter? a lightning thrust in a sector of the where none of all this, or almost none of it, can possibly be said to apply (if it really applies anywhere)— and the powers that be are struck dumb! It is just possible, as they say in the kindergarten, that Mother Nature knows best, after all! economy If it be asserted that the President also had deal ' • to say in his "Economic Report" good and elsewhere about speculation, credit control and kindred topics, the obvious reply is that there is no reason whatever to sup* pose that the markets which have "collapsed," less, had reached unreasonable heights , credit. On the contrary, very on little credit, comparatively investment yet fceera there were assets our been made onerous by the fact that we had to meet interest charges more have has 1947, in abroad borrowing of combined wartime our on of sales continued million, £3,500 particularly last year with heavy transfers of profits by foreign firms operating in this country The net result is that our net in¬ come from investments was1 no more than £51 million in 1947, a decline of £24 million on 1946 other potentially £1241 million on 1938* decline means against of and this What rising prices is demonstrated by the 1938 investment in¬ come paid for some 21% of our total imports, while the corresnonding figure in 1946 was only 7% and last year little over 3%, its background of strikingly drop the non¬ the whole Full Employment Act notion along with it the managed economy folly? in that fact Payments (Continued from page 19) £290 government expenditure of Last year, though million. gov¬ expenditure overseas was reduced by £79 million to £211 million, the net deficit was £50 million higher at £22-3 million. Large savings in government ex¬ penditure were offset by an in¬ crease in non-governmental out¬ ernment goings and by smaller receipts. . double that of 1946 and amounted to No exact million. £50 some sources and correction tion more as becomes to later exact informa¬ subject are But available. no in the over¬ revealed need be change important all position now expected. detailed A invisible examination items shows Cut of that stantial changes occurred in sub¬ 1947, Net mili¬ tary expenditure overseas at £80 million was only about one-third of the 1946 figure (£230 million), while relief and rehabilitation at as compared with 1946 £62 million about half These two accounted of our items for 1946 only outlay. together show a saving of nearly £200 million a year. There were, however, heavy offsets in the increased cost of Germany which, at £79 mil¬ lion, was nearly double that at 1946 and through much smaller receipts (£ 10 million, as compared with £90 million) from the sale of government surplus stocks, es¬ pecially wool, and from certain postwar militarv settlements. This heavier expenditure on Germany and smaller receipts together off¬ set by £119 million the savings nearly £200 million on mili¬ tary and relief expenditure. Net government expenditure overseas in 1947 was thus only about £80 million less than in the previous year. Despite the ban which operated in the tourist claims last quarter of expenditure in as insurance premiums, and payments royalties and copyrights, com¬ diture, development of our prises overseas, personal considerable. and 1947 was Shipping: Losses There is need to no on advertising expen¬ mercial travel, enter¬ remit¬ tances, including legacies and be¬ quests and a host of other forms of expenditure. income and enlarge only about volume of importing currently formation in expenditure, productive char¬ can be expected to increase large it of much of which acter yield field uncertain, but there was is rather a Our in¬ much of this over a return in the near future. a connected with estab¬ markets and business connections overseas as part of the export drive and, of course, country has been correspondingly also on the restoration of plants reduced. 75% the of prewar goods and the claims upon British shipping for carrying goods to this of ures the such transactions, It is largely lishing and Spending our unfavorable, country, but there is little doubt that the increase between 1946 be noted that the fig¬ It should Government remaining experience in 194T a credit of £70 million in 1946 having turned into a:" debit of £20 million in 1947, "Other receipts" cover a vast number of varied activities and invisibles and that emphasize Receipts" "Other Over the field of the figure is available for expendi¬ ture by tourists coming to this the our wartime shipping losses. The figures relating to invisible trade effect of these losses upon our net are provisional in the sense that shipping earnings has been they are collected from numerous masked by the fact that we are should I more or the basis of finally arrested since but, then, the Secretary is Britain's Balance oi of a our which has not income, was affect the levels of prices, wages, and profits. Management recognize that sustained maximum production re¬ quires that gains in productivity be passed on through lower prices and better wages to the fullest extent con¬ sistent with adequate incentives to business enterprise. in decline which supports —and ' must Investments From Income The But, seriously, has not the time come to sense of the elasticity needed adjust relative changes in cost and demand. in the effort to .net current year. speak to his Secretary of but following suggestions made by the President last November, — our income still further, while the heavy cost of repairing in foreign ports—which pressure on our own yards made inevit¬ able—has also contributed to the reduction in our shipping earnings overseas. Expenditure on both', these counts should be less in the; shipping Yes, the President should a "Moreover, reduced has bunkering Lincoln's Birthday, the on the Treasury system is thereby deprived of much to of British ships substantially. For example, the necessity of foreign have risen very over by the Treasury to pay off bank-held or inflationary portions of the public debt." practical businessman: business manager fears that, the use of price reductions to expand his share of the market will merely result in retaliatory price changes by other firms. Business therefore has sought, as far as possible, to place / the competition for, markets * which it must meet upon :some other basis than price competition. The pricing "Many war. expenses overseas Secretary of the Treasury issued a formal statement about the forthcoming savings bond drive, in the course of which he said: "The relief of inflationary pressures will be accomplished through the security loan in two ways. The money received will be withdrawn from the consumer markets, and it will be used Yet of his lectures to the one the fore is less than be¬ In addition, the route crosstrade Wrongheadedness More -the profitable available for us on a Indeed this idea, now so fully and apparently permanently official in Washington, that lack of "purchasing power" is what causes business to recede inter¬ mittently from high levels appears to be one of the cardinal principles of the President's economic thinking. This, of course, is in a sense a political counterpart of the popular idea that consumer goods generally are being or may shortly be "priced out of the market." great deal of doubt that Government either knew could soon learn what was best. Here is a part of a best days our prices now being asked. surviving. of the fittest a event if the President is convinced that lack of purchasing power is the real danger in the imme¬ diate or early future, he certainly ought to speak to his Secretary of the Treasury! And he certainly does appear to be concerned about the ability of the consumer to pay the posed to make up the collective mind of the nation. All that he needs to do is to arrive at some conclusion of his own both as to the meaning of such developments and as to their effect upon his business. The result of any mistakes or wrongheadedness on his part is upon his own head. If his blunders are bad enough, he is likely to disappear from the picture and be replaced by some other whose understanding is superior to his. Meanwhile the community at large profits from the wisdom of the wisest as selected in this ruthless process ; fact that we are using a volume of shipping for own imports, the „ amount smaller In any more level. the of consumer in being uncertain of course, developments several times As it is, in spite to amounted the prewar lack of consumer pur¬ chasing power. If lack of purchasing power is at the bottom of the break in corn, cotton, wheat and the rest during the past week or two, it certainly was not "con¬ sumer" purchasing power — unless such a lack reached the markets by a most circuitous route. from what the meaning of highly speculative markets, neither the President nor his advisers are any worse off than many businessmen. The important dif¬ ference is that the individual businessman is not supOf recent present have "bust." His fears of a invariably been derived of almost he conceived of as have, however, "bust" Caught Off Balance days after the President, with the most painstaking advice from his Council has made such a deliverance to Congress, his advisers find themselves so thrown off balance, as it and the possibility creases levels of employment, continuing at their restricted level would imports with extended speaking, other possibly than that indirectly to producers by the Federal Government itself, is to be found in these markets. It is likewise true that the President has had a good deal to say about price in¬ 19, 1948 U. K. import and export new other physical property dam¬ trade published each month in the trade and navigation accounts give the cost of imnorts on a c.i.f. basis This means that figures in¬ freight as the during the war. aged or neglected Future Prospects < the prosnects for our invisible trade in 1948? We can¬ What are improvement in position this year. The loss of income from invest¬ exports are shown f.o.b., which ment in the devastated areas of means that only the cost of the the Far East will not rapidly be goods is shown with no addition restored. But shipping should do for freight and insurance. So, better. More ships will be avail¬ what we call the visible gap be¬ able through new building and tween imports and exports as our passenger fleet particularly shown in the trade and navigation should make an increased contri¬ accounts is larger than the differ¬ bution. The heavy drain for re¬ ence between the price we pay lief and for Germany should be overseas for the goods themselves reduced to only about one-tenth clude well as insurance and and the value of the goods we ex¬ port. The freight and insurance charge included in the import fig¬ ures consists in fact largely of payments made to British and insurance companies. shipping on expect any investment a of the figure for 1947 and we'may expect less to be payments purposes f.o.b. basis and shinping of spent by tourists despite the lifting of the ban.'be¬ sides increased income from tour¬ ists this visiting for allowing .The import figures we now use for balance are not our the cost of the goods, while country. But, the minimum over¬ military and other commit¬ maintain, we shall still be some distance from seas ments that we must being striking Dayments of an internal nature. On this basis, the net earnings of invisible account. earnings are thus excluded, shipping in 1947 was esti¬ at £17 million as against £10 million in 1946 and £20 mil¬ U. lion before the war. the year, available 1947 was shipping, our our Had we now on our '( have been speaking about the most important points in our current account; I will So tonnage of speak net shipping income count. prewar balance Capital Account K. mated a far, now I about,our capital ac¬ For this purpose, I take aS Volume 167 our all reserves and also Number 4674 the the gold we had United States Canadian credits and of £60 tional year million other £626 of pared with tive. In the deficit a (that is, the Canada and the American tries) account million, com¬ 1946. £266 million, as compared with •£38 n)illion in 1946. In addition, on' behalf of the whole sterling including the U. area, net a transfer K., there gold and of dollars to other countries of as compared with a sur¬ plus of £80 million in 1946. There one two or figures to smaller additional add in, but the result is that the net drain reserves was £1,023 compared with 1946. " During the was in the. sterling of there debt. In years and creasingly factor in price of the U. rising costs well as K. Balance of there on ments ing, U. U. to and the K. of withdrawals the sterling area up ; A supreme effort must be made year to remedv our external this t position. Abnormal world condi¬ adverse balance follows: as sphere, man can an a to way than more have 240 at the The made 1947 $2,720 million; sterling area, plus $320 million; rest of world, minus $300 million. According the to trade sales at were the rate of 420,000,000 pairs. not • Different Kinds of Inflation •; Several different kinds of in¬ flation are rampant in the conn- try today. on ' I concentrate the three most dangerous price I and inflation, credit goods'inflation. know, these terdependent. •may vary '•separate analysis them well inter¬ mutually in¬ their behavior widely, and Price As you are Yet ones: inflation, closely are twined—in fact, •> to want so for we must understanding. inflation is Credit , own dis¬ re¬ inflation is apparent on .every hand. The general tendency 'is to ascribe it all to the expansion in bank credit caused by the com- ^mercial banks' wartime purchases '. of spme $70 billion of government securities. Yet since V-J Day, .commercial > ?! . ■i \ i * commercial banks, loans iwere expanded just about as fast as the bonds were redeemed. Bank real estate 000,000 as banks) at the end of turbing in 1941. is since consumers of by com¬ $13,368,- December, $9,695,000,000 The most dis¬ feature of the of particular, doubled reached end with situation increase to all-time peak, (including the at the compared credit than Loans agencies an loans, more prewar. '.all at are now mercial - in- ties tried to restrict credit by retiring government securities held having ■ have some $15 billion. In fact, 1947, as the monetary authori- ,;rloans «. loans creased in (•'by the ' bank the consumer enormous $739,000,000 month of December alone. in For example, the (including the have increased have filled be true in many were not for the increase however, in of October, 10.9%. 1946, This an was unneeded below the dropped power level the of 4.7% previous to fold chandise. trickle alization the cheap-dollar the of bank credit is area, current and ration¬ totals applied in an urban glaring defects become ob¬ vious. Wages lag prices even for organized labor. And, as for un¬ organized labor and white-collar workers, those professional living men, fixed on and incomes, most of you know from first-hand experience that the dollars they get are not cheap^dollars even though those they spend may be Gentlemen, debts are paid,, if paid, with what I call difference- dollars. As a practical matter, the difference in dollars between the current cost of food, shelter, clothing, etc., arid current income measures the debt extinction abil¬ ity of the American people. Early in 194-3 personal consumption took about 89% of income after taxes. This had increased to 95% by the middle of 1947; and we have every reason to believe that the per¬ centage has increased since then. Furthermore, the limit pansion! ous: While on The we must be close to consumer credit conclusion "Where is the is money ex¬ obvi¬ going this is it the on of retail throw market in¬ withholding goods from in the last two years. as In competitive inflation capitalism, goods can have consequences. And production will take serious very the machine is wav our rolling it than the economic more blood-letting of to prices or much and will very goods mer¬ only a develop into will it now, torrent if either sales a Marshall a prevent supply from Plan reaching proportions in many lines. of accounts receiv¬ beginning and dump their up dangerous When "gray" markets distributors 16.5% purchasing fields if it more danger to the entire economy. Al¬ ready, here and there, you see increase, not enough to equal increase in the price of goods bought by the farmers, with the result that the farmers' the now would the greatly increased number of wholesale and retail outlets. And this, of course, is a great stead with $3,- are and 773,000,000 401,000,000 compared and up many beginning to overflow. This drop as jijut little?^ The pipelines of distribution in lines government benefit payments) in October, 1947 amounted to $3,- able products! f work. year. painfully so e'apparent that no businessman putes it—except, of course, garding his of purooses always total farm cash income inventory boom has been chiefly a price mark-up proposition; quantities ^angers turn and the on advertising beginning are "heat" that Do you real¬ manufacturers premiums of 30% and advertising is straw in the wind. ize sales The sudden pressure. growth of premium a of to the use for American production of china, 10% of alu¬ minum utensils, and great quan¬ tities of novelties and glassware? The Premium Advertisers Asso¬ ciation of America estimates that the total of premiums to be used as sales stimulants during 1948 will reach the staggering value of $1 billion. This is twice the per pound to $.17% Or, let in in any sellers' $1 markets. billion is a In level of 61 to level lot of symptomatic an August, 1939 January 17, 1948, nearly 3% a of 201.5 which is times the old level. Department store of end 1947 were rate of 300% The age. it so really will food Do believe that that prices will under anv bait an nomic process. They in circulation; times It better be difficult malady which so of find period last year. In it is the longest list in the 21 years existence of the Exhibit¬ in the spring and not Administration in Washington Europe, regardless of our crop yields, drove food prices higher and postponed the day of readjustment. Despite the downward pressure occupa¬ economists True, quantity is impor¬ but it is by no means con¬ trolling, as I have pointed out many times before. For myself, I prefer to weigh the impact of the more, important of the countless other factors which affect our eco¬ nomic destiny. the list should be put the classic causes for the end of a boom. First, I would place the wastes of Then, there what "over-employment." I Also, call man¬ agement slows up when the lash of competition is not present. Mis¬ takes of all kinds, particularly over-expansion, are made. Ex¬ travagance and waste are accept¬ instead of attacked. they can be passed on (After all, to the con¬ sumer, so why worry?) The quick and easy profits of speculating in inventories are sought by many; the worry, sweat, and toil of pro¬ duction are looked down on ever-increasing by Why numbers. produce when speculation is profitable and ever so much more These stresses and strains create structure. Failures increase; dis¬ goods are dumped on a reluctant market; and the classic tressed spiral of deflation is under way. The Outlook What then is the outlook? The monetary authorities continuing to tighten credit. a economy; I it. There is continue to don't,expect great deal of money, the hands of mentum of our people. The mo¬ the inflation is ter¬ Little decisive deflationary rific. action be expected from until the election is over. Neither party wants to face the electorate and take responsi¬ can Washington bility for causing "bad business." On the contrary, additional fuel undoubtedly will be poured on the fires of inflation by reducing the taxes of millions of voters. It seems reasonable to expect that wage increases, tax reduc¬ tion, European relief, and deter¬ mined political assistance will be sufficient to keep the boom going the first six months, at least. After that, the long delayed busifor should mate- course, a new rabbit is pulled out of the hat! As I said the other keep day, to really going, it will be the boom for necessary the following to continue: (1) Bank credit 'to industry carry inventories and accounts to re¬ ceivable must continue to expand despite the active opposition of the Federal Reserve the bank examiners. System and • Expansion of plant and duction erated (3) facilities must Individuals and more be pro¬ accel¬ despite higher capital costs. must less save spend despite the coming intensification of E bond savings drives. and other (4) Individuals must be will¬ ing (and able) to go deeper into debt despite the uncertain out¬ look. It of seems these In to too much to expect all eventuate. conclusion, let me say that the current period of inflation has to be followed by a recession. How serious on that will how be, will depend it soon comes. If we could only have gone through with the readjustment which started last April, it would comparatively have the should mild. have If readjustment not be too been we can soon, drastic or it of long duration. Basically, the economy of the country is sound; we only have to eliminate the maladjustments. Until this shakevery is completed—and it may be starting now or it may not start out for another six outrun Plan decline. is In¬ pur¬ Foreign trade, months to one we had was a your should be lose one credit policy of caution. little income than a Better a lot of capital. Hiscox, Van Meter Opens Branch Office Meter & opened a PA. — Hiscox, Co., Inc., have branch office at 28 South Seventh Street under the manage¬ ment of Hugh L. Van Meter. even passed, These —clearly^ ALLENTOWN, increase pointed downward in and all frankly a credit, and liquid purchasing power,(E bonds, for;example) in Van and other basic factors point to a downward readjustment of business. But most of these in¬ 1947 foregone for are many dices round year, no one can be certain when instabilities in the entire economic to a more interesting? rates is It would be a modern labor leaders to take stand for the good of the entire miracle on the are increases wage conclusion. suffer. tightening of credit. indication, another any (2) tant, High past is a over-emphasis many Marshall Advisory Council. to illustration of the tional from ergo, nearly three price is inevitable. much as would the same the a Such on the quantity of money. reasoning runs like this: Nearly three times as much money bound than rain to feed largely are based is ors just The power. fact, believe levels. generally come .from over-simplification of the eco¬ continue -to for the do stabilize if greater much prices'n.es® conclusions terest develon- wide¬ enough rain in the summer. These crop failures and the decision of readjustment rialize—unless, of these present Prices 53% 1935-39, businessmen economists chasing is was continue? Some ment is the great number of trade the year aver¬ index the basis of on goes. shows scheduled for 1948. The 718 listed for the fhst eight months of at' the of the 1935-39 retail around 203 and sales running at the pre¬ kind of market! Another take the index of all which shows that us products they soared from vearly average. I don't have to tell you that premiums are not used in hogs! war event, of dropped from in November. 1946 September, 1947, de¬ spite the continuing high price of $.53 ed Many businessmen realize these the behavior on prices, which little In recent months, the (Continued from page 6) humanity is at stake because Most experts say that the dif¬ 1 America is the hope of the world. ference between the prewar and 't So let us not again kid our¬ current credit totals are not as selves that we can stay in the eco¬ great as the changes in the pur¬ nomic stratosphere forever. Somechasing power of the dollar. They time we have to come down and, argue that $10 billion 50-cent dolpav for our ride. Don't let anyone > lars are no more difficult to re¬ tell you anything different. I pay than $5 billion 100-cent dol¬ don't mean that we are going back lars—that, of course, is nonsense. to the depressed levels of the If this cheap-dollar theory ap¬ i '30s, but I do mean that we cannot plies to any group in our economic maintain the hundred-yard dash family, it would apply to the speed of recent months. farmers. Yet even there it does lard to losing running at a rate in excess nf 460,000,000 pairs annually, while retail Recession Looms! high Even the automo¬ Council, hogs, Likewise, lard which should reflect get people to pair of shoes rate. performer, who may think that prices cannot come down because costs are yet association of the leather industry, shoe production in December was Hemi¬ minus 1948. farm Tanners' aerial $.06 per pound rose to $.28 in the same period. Those of you sit bile manufacturers don't exoect people forever to buy automobiles per was one the of Deity were failures in Europe caused by too little rain; there was a short corn crop in the United States because we had too of ary, time! a There crop of the factors I enumerated, thefe are powerful forces in the direc¬ tion of more inflation. If the $.35% which were $5.52 per hundred¬ weight in August, 1939, but had skyrocketed to $27.19 by Janu¬ The not True,_the hand intervened. spread other seat one march. rose from $.09% pound, and cotton¬ seed oil increased from $.05% to $.29V2 per pound. Or take an¬ bushel; cotton per to time! time! a manufacturers office declines. Western increased from $.04 5/16 to $.46% pound; coffee rose from $.07M> to $.26% per pound; corn at the farm increased from $.45% to $2.37 per most profitable part of the international market, is also ex¬ periencing serious domestic box- 420 is only occupy automobile at To get a con¬ take the C's from us commodity price list I was studying the other day. From Au¬ gust, 1939 to Jan. 27, 1948, cocoa un¬ can a idea, let a can is man Hollywood, in addition 4,064 iThis A at 2,600 K. withdrawals from Canadian credit--——___ crete practical a answer seat at from Monetary Fund- coun¬ In the one movie wear 604 area are together reflected in the decrease in the sterling bal¬ of think deyised gold U. K. withdrawals from Internat'l tries. I only shoe 4,092 diminution facilities consume? can A dol¬ sterling ances production Yet I wonder if familiar¬ the price spiral? on no in U. dollar holdings_____ K. be qualifiedly, "yes!" 568 on say; that insatiable. are in lars and gold K. and wants all quite fa¬ are 1% hesitation in April in the upward to price inflation ity has not bred contempt, to paraphrase an old saying. Do you fully realize how high up we are accepted, it leads in¬ to the conclusion that can sense. U. S. credit. The area capital1 movements f2,700 ances attributable sterling pay¬ 824 drain plagued you, produce more than America, the richest country in the world, and with the highest standard of liv¬ Repayments of sterling bal¬ U. of Inflation us which you miliar. be panded _____ look at goods a overproduction except at a price. Certainly, this has been true in the past, even in the United States. Yet, is it not " possible that our war-ex¬ 5,720 overseas Net human this there and Payments for capital assets reserves, spoken. to the rest of the If evitably _ Most This brings with my that was needs, but these changes not, of course, directly con¬ reserves be 8,420 services redemption nected with the drain of which I have our Payments, 1947 Rece'pts from Exports year, investment some as '• ... consume, even in a physical sense. The first principle of economics is then will take us now (823) Price opinion we are now pro¬ ducing in many lines at a rate considerably in excess of the ca¬ pacity of the American people to Payments for imports and nomic the supplies Goods Inflation going to nonetheless, I must point out in $ Million area addition, the if prices ris¬ with "shortages," will find it dif¬ ficult, if not impossible, to agree with what I am means the market, of to keep . j ; .. inflation. in Africa—some movement of capital funds over and above eco¬ on sales and FINANCIAL CHRONICLE , • Let decisive a industrial employment placed in jeopardy. South drain becoming out us food our ^undoubtedly—and, particularly, to are this, in turn, Adverse balance of and ing?" : & from come : that the competitive power of our products must be hiaintained and, if possible, improved. Price is in¬ as million substantial alterna¬ no either export and services our for the restor¬ ation and development of indus¬ tries must enough to pay for our food materials, or do without. Upon our capacity to export and earn, ; depends our capacity to work our way through these try¬ total on million, £266 course there We £ 157 -million, are is to and raw ing coun¬ as £340 million in .The rest of the sterling area had a deficit with the dollar area of was difficult, but there particularly earn area States, tions render the task drawing Fund. U. K. had with the dollar United and interna¬ our the on Monetary 1947 the THE COMMERCIAL early slight Joe N. Solter Opens WICHITA, KANS.—Joe N. Sol¬ ter has formed Joe N. Solter Com¬ to engage business from pany in the securities offices in the Wheeler-Kelly-Hagny Building. THE 28 (824) industry Fundamentals—The but of along share¬ holders have fared, as far as in¬ til maturity 10 years after pur¬ come is concerned, very badly. chase. The yield on the "E" bonds The policy of the government has is about 2.90% and until recently been to lower mail pay in spite of the amount one might purchase costs. For example they have has been restricted to $3,750. This raised the price of ordinary mail limit may be raised by a conver¬ 50% but at the same time they sion offer. I believe that these have lowered the pay for carry¬ 1932 and all the v/ay 4) that indefinitely. (Elec¬ Battery, Electric Bower Roller Bearing, they Storage Auto-Lite, Roller Bearing, LibbyOwens-Ford Glass, Briggs Mfg., Timken Auto manu¬ etc.). Corp., Dana facturers look market. nies can Canada others—Dr. of to compa¬ quite a number of bottling and distributing shares on the market. Since the automo¬ the offset retailing of higher costs. ond point is in the The sec¬ answered by the fact of holding dissolution the that although companies, not nearly completed, will end some time and stocks will bring their true the of this The Interstate Com¬ major portion A worth. field tends inefficient old plant sufficiently to Stores Retail the In basis the overhead reduced has There are Nehi, with Dry. Pepper, attractive more a depress the market. The answer to the first of these questions is that new equipment Pepsi-Cola Coca-Cola, are and best The outlets. nient better than the av¬ erage expand should good business tric the war years rapidly now increase conve¬ during sugar and Choice of Securities (Continued from page of rapid growth. The enjoys low labor costs has been held back by lack period a Investment Thursday; February 19, 1948 FINANCIAL CHRONICLE COMMERCIAL & divestment has taken place. of attitude the the stores that are carrying high- merce Commission in the last few this country it priced clothes, particularly woula weeks on freight rates and the to be vulnerable at this attitude of is a good index of business. On'y seem public service commis¬ time. If credit accounts shou.d a bad depression can hurt business sions themselves on telephone be restricted by Congress it would in the near future. rates leads one to believe that if add to their troubles. Without for an older person—say in his seasonal traffic peaks and higher necessary public utility rates Electrical Equipment Industries the ability to purchase over a would be allowed to come up to 50s—who wants an income after wages. Electrical Equipment industries 60 and can afford to buy them To improve service the air reached an all-time peacetime fairly long period on time the old a fair rate on invested capital. We look would quite often prevail have had also a rise in the rates every month now. Otherwise I lines must consolidate routes to high in 1947. The point at which over new prices. The resistance of Brooklyn Union Gas and other think for most persons they are provide more non-stop flights. the break even is reached, and by the public to higher pricei appeals are pending. a particularly bad form of invest¬ All in all, Secondly, they must provide for profit margins on present busi¬ caused by higher wages for fewer ment as they pay nothing for 10 more interchange of equipment. the outlook is for a good yield ness are lower than normal expec¬ working hours will be further ac and a fairly stable market in pub¬ years. The Constitution of the Third, they must improve reserva¬ tancy. The huge volume suggests centuated by the coming third lic United States provides that the tion utility stocks. The outlook with procedure through inter-line that the net profits will hold at round of wage increases. The relation to municipal and govern¬ Federal government cannot tax sales agreements. Further con¬ present high levels for some time chances for any price break foi the lesser divisions of govern¬ solidation of terminal and main¬ ment ownership has improved to come. The percentage of for¬ 1948 seem rather slim. The low¬ in the last few years as more ment. This, therefore, protects tenance service would be eco¬ eign business being done is larger ering of prices and larger turn¬ the buyer of bonds of the states, nomical. and more voters have turned than normal. Public utilities spent over would be the thing tha etc., from any taxes now or here¬ down the non-taxes, politicallyBank Stocks $1,300,000,000 for new construc¬ would be the thing that would after. The security behind the run, publicly-owned utility plants. Any discussion of bank stocks tion in 1947 and almost regardless turn the market in dry goods bonds varies from unlimited tax¬ The outstanding feature of the of business conditions should stocks. As it stands now the highr able power down to revenue as brings one squarely into the dis¬ communication systems — Ameri¬ several years of equally of 1946 are probably the all-time cussion of government control of have earned, for example, from some can Telephone and Western large expenditure. money rates and then the control highs for many a day. The spe¬ Union—will be their expansion. water district only. of the banks by the government. The prospects for radio stocks cialty chain stores like Wool- Western Union expects to spend Aviation Securities The outstanding feature in 1947 on the other hand are not good ex¬ worth, Grant, Kress, Kresge, Mc$60 million in 1950 in mechaniza¬ This brings us therefore to that was the rapid growth of commer¬ cept as the television boom may Crory and the grocery chains— particularly suitable ing air mail. It follows that one for certain situations where a cannot be sure of solvency, much young couple wish to establish a less income, considering that fund for education in 10 years or there are other troubles such as bonds are large with particularly con¬ are we securities of group which was none ended although it industry aviation The too happy, $2 billion industry. This will be the most criticial of postwar period to date. Today manufacturing companies can¬ depend on the air lines for a year the the not real estate loans loans," while security loans do not reach 10% of the to¬ tal. Since the trend in the banks has been the reduction of earn¬ the British or duced and the with Russians have pro¬ Douglas D 598 Skya world record of were velopments. air world international miles than all -give promise of a new field the In come. fly more the rest of the world together and we we circle covering all the globe, Russia. Domestic transport miles gained 713% dur¬ ing the year and domestic air mail was off slightly. 150,000 countries except people were flown over the ocean. planes We have the most efficient and personnel, second to none. No country is geared, both in busi¬ ness and socially, for flying as we are. Fares were reduced from 120 a since the beginning mile to of 1946 and are now back to The 5V20. government's policy will de¬ life or death for the termine shareholder in the manufacturing With labor, fuel and rising sharply even with cutting down on food and chewing gum the transport com¬ panies have not yet been able to reach profits.' The Civil Aero¬ nautics Board blasted hopes for companies. other costs higher mail pay so the outlook for anything except long-term speculation in the transportation shares of the airplane industry is If you must go bad in, I would stick to Eastern United Air Lines and suggest that you Airlines, United Aircraft. est companies Even the strong¬ are results beginning the to the drop. I have followed very close¬ ly the history of terrific show of aviation since towards a increased, the trend better picture in bank¬ ing is quite noticeable. Expenses of banks are still rising but not as fast as instead of 1947 in they were in 1946 and 15% drop in earnings a 1946 over as expected, they came up fairly close to the same amount. I would expect in earnings bank 1948 to about 1947 if business conditions remain at a relatively high turn¬ equal by may than average. have stocks and been the copper good showing purchas¬ and some earnings due to foreign materials stockpiling by our government. International Nickel continues to sell to the steel industry for nickel chromium, stainless steel heat resistant, corrosion and ing, raw wear, a resulting in profit. During and other uses very the favorable war the price of copper was pegged at 120 a pound and since it is now substantially above this and historically at a very high legis¬ price, purchase of shares in these companies carries with it the in¬ herent risk that prices might fall still be under warnings of State and Federal and all goods in process would supervisory agencies. As a mat¬ have to be marked down to the of profits. Phelps ter of fact, the boards of some detriment banks have loaned all the money Dodge is more of a domestic com¬ they wish to loan at present in¬ pany than Cerro de Pasco. Kenneflated prices. and Anaconda are very The Internal Rev¬ cott enue Department has ruled that strong in South America. Cal¬ a portion of revenue before taxes culating the yield in these shares could be set up as a reserve for you must realize that the assets bad loans. of the company are being dis¬ The appeal of bank stocks is tributed as the-reserves are mined Again, Phelps largely limited to long-pull in¬ from the ground. vestors. Since the average bank Dodge is probably in a better posi¬ pays about 60% of its earnings tion on reserves. The best of the in dividends, there is small chance gold mining shares is Homestake of any cut in dividends and thus which is the Hearst Company in late on there loans by is this banks they will pressure by the continuity of stable income. Auto Industry Auto industry slightly lower number of trucks and a slightly higher number of than were made in 1947. I would expect the cars to sell at a slightly higher price, depending on the third round of wage increases. The luxury, higher-priced cars will be in sup¬ ply after the middle of this year. Exports of 7% of the passenger car production and 20% of the truck production are expected if the Marshall Plan becomes effec¬ passenger cars P—rep invest¬ Doing for cash all their business and with a much more they turnover, sounder more represent values wit! depression-proof qualities higher cost of food cuts intc the ability of people to spend on Other things, especially since au¬ tomobiles take so much of the The and excess of currencies realistic and which would be constructive, gold probably have a con¬ They consolidated Mining and shares will siderable increase in value. are Smelting, Homestake and Mcln- tyre Porcupine. During the war, of course, the distilling companies had a very favorable time due to two factors their normal distilling being limited to about month left them in the position to furnish alcohol for war purposes for the balance of the time. The inventories which —first, functions five days per much telephone company the amounts. larger Such stocks as Houston Light¬ ing, Idaho Power, Utah Power and El Paso Natural Gas, Co¬ lumbia Gas and Electric, Cleve¬ land Electric Illuminating have Light, given good market performances and should continue to do same. Bonds and preferreds have defi¬ given nitely value to up 10% about in change the of money rates. high in price. so are Market Factors Utilities Public public utility stocks cover electricity, gas, tramways and telephones. Their existence is based on a franchise given for a The good things about the market are tangibles such as high rate of earnings and dividends The and operations, whereas the bad things about the market are in¬ perpetually by tangible, psychological and pros¬ the regulating authority. Almost pective with tendencies rather every state has a public service than actualities. First, inflation is commission and the Securities and not bullish unless carried to a Exchange Commission since 1934 very comparative degree. Infla¬ has control of interestate utilities tion actually causes a corporation Since the end of the war electrical term of years consumption has into broken or continually new record high The prices for the serv¬ are at the lowest with the excep¬ tion of telephone, in spite of the increased cost and the electrical ground. ices rendered in level industry is tre¬ higherpriced business from the inven¬ tory to the finished product. This endangers the stockholder through the principle of leverage and large borrowings ahead of common. In mendously to carry on a words other it equity dilutes continually lowering earnings through expansion of The building commercial debt and capitaliza¬ several large transcontinental pipe lines has given the gas dis¬ tributing utilities a terrific boost. The borrowings its increase to if possible. prices of history, with com¬ petitive fuels such as coal has be¬ come much more favorable. All companies have a large backlog fairly South Dakota which has a long of orders for new connections and record of dividends and produc¬ new customers which so far they There tion. If we have remonetization have been unable to fill. will try for 4 million pasenger cars in 1948 and about 1,100,000 trucks, a The of type another ment. much If Congress does not over. resent certain metal Base and tion Safeway, Firs Kroger, Jewel Tea, National Stores, and A & rapid Mining Industry ing yields have country this group in Philco better be the across way 1949. lowest outstanding de¬ The two jet planes 650.6 will have es¬ television stations all tablished assets in items bearing the yield the paying off of short term Treasury bonds and the assets showing the highest I hear that public fancy. American Telephone the business, with the re¬ sult that the industry is entirely dependent on military orders. Although military business is sub¬ stantial, the 15 major companies last year lost around $100 mil¬ lion. After tax carrybacks and application of postwar reserves the net loss will still be twice as much as the $11 million in 1946'. Military planes produced in 1947 were about 1,800 compared with a wartime peak of 96,000 and 250 transports were produced and about 15,000 personal planes com¬ pared with 35,000 in 1946. The new Eastern Air Lines Constella¬ tions and the American and United Air Lines DC6s and the Lockheed Shooting Star, which did 625 M.P.H., beating any that to catch and "other profitable streak been since January in cerned. 1947 smallest hamlet of Successive new peaks reached each month cial loans. have business penetrates even bile price relationship tion. As a result this has caused stresses and strains on the work¬ ing capital position and therefore has caused much higher operat¬ costs and a higher break¬ point. In the face of this we rising interest rates on large short-term borrowings in many instances. Hence the sale by some ing even have of our stronger companies of com¬ investors an mon stock. Third, there is an something intensified competition as we pass wrong with investing in our elec¬ from a buyer's market to a sell¬ trical operating companies. The er's market in everything. Fourth, first argument is that utility com¬ we have defintely entered the panies will eventually bs.squeezed stage where the long-term bond between rising costs and unalter¬ trend is downward and this car¬ able rate structures which would ries with it, of course, preferred prevent them from maintaining stocks. This is caused by the their present standard of earn¬ change from a government-spon¬ ings. Secondly, investors have sored has developed among that idea there is of securi¬ sale—about $500,000,000 last year—of the compa¬ seen the terrific volume ties offered for nies being dissolved the Public Utility Holding which are cheap interest least credit rate. money Fifth, to we a higher have at begun to over-extend bank in many lines. This does apply to loans on stocks but probably to real estate and com¬ This is the break¬ mercial loans. The commercial expansion program of ing up of systems into smaller loans of all insured banks plus the industry is now 90% com¬ higher prices and later, of course, operating units. Thirdly, invest¬ pleted but retooling and extensive began cutting it more and more ors have seen that the five-year consumer credit are now esti¬ with alcohol. This operation at mated at 18% of our gross na¬ improvement changes push new program of expansion to raise tional models about the 1947 counter¬ capacity for the government of production as compared course caused them to receive a kilowatt production to a safe point with 9.4% at the end of 1944. The parts. Thus 1948 Hudsons were demand would require double income. National Distil¬ above sixth reason I would give as the $178 to $220 above the 1947 about $5 billion, a part of which sureness of a large decline in our models. Even minor changes lers and Hiram Walker are prob¬ would be raised through the sale ably the more conservative of the caused Nash to raise prices $12 to exports in 1948 over 1947. The of common stocks." When the $5 companies as they have followed seventh reason I would place as $45, Studebaker $67 to $100. The billion is being spent in a rising trade practices protecting their being caused by inventories hav¬ large companies will have new market with persistent offerings models for 1949. The accessory j trade name and avoiding undue ing been filled, which factor, of of common stocks, each of which course, made the demand for companies, since we now have 38 pyramiding of inventory. must be sold at a small fraction The soft drink field is still in million cars, should have very' j tive. The they held they sold at higher and under Company Act. not Volume 167 goods last Number 4674 THE COMMERCIAL urgent. ac¬ FINANCIAL CHRONICLE A moderate decline in industrial & year very The State oi Trade and tivity could result at present, with the high break-even point, in a sharp decline in net earnings. The conjunction of impaired consumer purchasing power, reduced ex¬ ports, lower demand for inventory (Continued from and bulk by higher ing by Mail" plan took place Central &'-South stock placed the at Brothers & Missouri. West the at on Co. of by firm's was Kansas City, the broker, 16 of first the and were able teletype. interest new been some Mr. Settle¬ will shown in the the Ass'n to Hear Dulles of for ago New one of week ago, indicated This meeting to be held in Marshall American a Plan Business." steel a was year 96.1%, while Mr. I j livan & Cromwell, was head of a division of the O. S. S. in Europe during the war and played an important part in arranging the Italian armistice. legal At present he is advisor of for the Herter Congress, which is studying the Marshall plan. Wilmer R. Wright, Management members of the Brooklyn Chapter, National Association of Cost Accountants, the Costs," on subject the at Feb. 18th of "Standard Chapter's at meeting Michel's Restau¬ ing case tems of standard installed and the standard cost a sys¬ supervised by His talk included of stand¬ on installations, presented study him. sion engineering, includ¬ considerable work a application cost methods by the New change, Atlas discus¬ of the Powder the and York American the Ex¬ Company, Thread Company Pittsburgh Company. braced employed Stock The some Plate Glass discussion em¬ of the latest develop¬ ments in the application of stand¬ ard costs to industrial accounting and demonstrated how this develops system important management controls and information for pol¬ icy decisions, whereas other cost systems fail to supply such neces¬ sary Age" month ago 1,646,700 tons one J yea^ago." ( The amount of electrical energy distributed by the electric light industry for the week ended Feb. 14, 1948 was 5,384,945,kwh., according to the Edison Electric Institute. This was 27,416,000 kwh. below the previous week and 51,485,000 kwh. less than duced time. in It the week ended Jan. 24, 1948 which however, 606,711,000 kwh., v/as, or was record a 12.7%, in excess pro¬ for all of the 4,778,234,000 kwh. turned out in the week ended Feb. 15, 1947. The 14, 1948 week was the sixth Consecutive week that production of electricity exceeded the 5,000,000,000 kwh. mark, and the 14th such week in the history of the industry. Feb. LOADINGS IMPROVED DESPITE BAD WEATHER *\ increase of 20,356 cars, or 2.8% above the preceding week, notwith¬ standing adverse weather conditions which interfered with industrial and railroad operations. It represented 2.6% below the corresponding week in cars, or 4.8% above tne decrease of 19,907 cars, or 1947, but an increase of 34,154 same week in a 1946. Boston — Bald- Co., members of the Stoek Exchange,« have branch office at 804 Main Street, under the management of Albert H. Clay.; r * \ opened a about $1 lower. down Coffee 3 cents and per pound futures cocoa hundredweight in the Fats and oils continued weak in the showed general substantial liquidating losses but the market for actuals held fairly steady. Flour prices slumped about pounds; demand at the lower levels showed a 60 cents per hundred little improvement. Cotton prices showed a firming tendency in the closing days the week following a moderate downtrend movement during most of the period, in sympathy with the break in other markets. of At the a close, the New York spot quotation was off 63 points from Mill buying continued slow and demand was principally week ago. fears better grades. of Part of the early weakness was attributed to European Recovery program and of further delay in' the revaluation of foreign currencies. ^Registrations of cotton .under the export sales program showed a marked increase in the week ended Jan. 30 to 44,150 bales, as compared with 12,500 a week previous. Textile markets were relatively quiet although some fourth quar¬ cotton sheetings were reported at the week-end. Textile ter sales of prices generally were firm and unchanged. RETAIL AND WHOLESALE TRADE SHOWS SLIGHT CHANGES FOR WEEK , While consumer interest continued to center on staple winter mer¬ chandise, the response to early spring promotions improved consider¬ ably. The total volume of consumer purchasing increased very slight¬ ly last week and retail dollar volume was generally moderately above the level of the corresponding week a year ago, Dun & Bradstreet, Inc., reports in its weekly survey of trade. The approach of St. Valen¬ tine's Day stimulated the demand for gift items, and as a consequence, orders for candy and flowers increased considerably. the prices of some foods generally had little effect on grocery volume. . The fractional reductions in The purchasing of food was consumers steady at a very high level with continuing to seek inexpensive items of good quality. The arrival of the lenten manufacturing There was consumer stimulated the demand for fresh a moderate increase in the buying of canned preserves. Promotional sales of spring cen¬ held down production of cars and trucks in the United States Canada again the past week. Estimated output of cars and trucks in the United States and Canada the past week amounted to season Poultry and the cheaper cuts of meat also continued appayel emphasized Easter items and generally favorable. response was and 85,262 units, "Ward's Automotive Report" states. This compared with a revised total of 82,717 units preceding week, 97,276 units in the corresponding week of last year, and 127,510 units in the same week of 1941. in the Last Clearance sales of some winter clothing stimulated buying with the demand for heavy coats and footwear large. t „ Activity in lingerie and jewelry departments increased with in¬ improved somewhat. The volume of men's wear remained large. Shirts and haberdashery were steadily purchased. terest in millinery week's total comprised 57,429 cars and 25,233 trucks built States. Canadian truck output totaled 1,375 units and passenger car production to 1,225 units. Clearance and promotional sales of furniture continued to attract favorable attention, though dining and bedroom suites of good qual¬ ity remained somewhat difficult to obtain. Fine grade floor coverings: sold well and demand for radios increased. The volume of automo¬ BUSINESS FAILURES CONTINUE UPWARD bile in the United Commercial and industrial sharply rose in as compared with 97 in the preceding week and 62 in the corresponding week of 1947. Twice as heavy as a year ago, failures were over five times as numerous considerably below the as in the prewar in the comparable week of 1939. and same level, supplies and accessories continued to that of failures the week ending Feb. 12, reaching the highest total for any week since Janu¬ ary, 1943. Dun & Bradstreet, Inc., reports 128 concerns failed week or of 1946, but remained only one-half as high as Nearly all of the failures involved liabilities of $5,000 totaled 115, 84 a week ago and 55 last year. two MASS. was movement. Steers fell about $3 per were vegetables, fruits and or more Ten of these failures involved liabilities of $100,000 or more more than a million dollars were incurred in FITCHBURfc, lard and sheep to sell well. each and losses of Win. White & the market. on week while and canned fish. AUTO OUTPUT SHOWS SLIGHT GAIN FOR WEEK details. Baldwin, White Branch Hogs declined around $5 per hundredweight to the lowest in 16 Dwindling demand at the lower prices left many unsold months. for the and ' Livestock values continued to fall sharply under the impact of the heaviest market receipts in maitfy months. swine ago. ters ard cost their low marks, May wheat and corn contracts showed declines of about 52 and 40 cents, respectively, from their high levels recorded earlier in the week. There was a partial recovery in all grains on. the closing days of the week. , 0.2%. A month operating rate of Industrial gas shortages in Detroit and other Wright, long experienced in management to and power rant, Brooklyn. Mr. Maximum daily losses occurred in wheat, corn and soybeans for successive trading days on the Chicago Board of Trade. At week's operating rate is equivalent to 1,667,300 tons ingots and castings as against 1,670,900 tons last week, a 4 three Loadings for the week ended Feb. 7, 1948, totaled 747,394 cars, according to the Association of American Railroads. This was an B'klyn Chapter of NACA Engineer, addressed the their recent peaks, 000 FREIGHT Wilmer Wright Addresses on All grain futures markets were subjected to a general wave df liquidation last week which brought prices down sharply from or an points, or 7.0%, to 278.92 on Feb. 10, from 299.77 a week This represents a cumulative decline of 9.7 % from the post¬ war peak of 308.82 recorded less than a month ago on Jan. 16. Al¬ though the current figure is still above the 1947 comparative of 244.96, the year-to-year rise has been narrowed to 13.9%. annual Iron 20.85 earlier. on Dulles, Committee fell ELECTRIC PRODUCTION AGAIN FALLS OFF and partner in the law firm of Sul- the a result of the severe break in grain and livestock Registering the sharpest drop ever recorded in so short a period, the Dun & Bradstreet daily wholesale commodity price index from decrease of 0.2 point, a rate shown 1,732,200 tons Feb. 19. His topic will p.m., "The an products, alloy bar extras, nails It could possibly be "The general level of wholesale prices trended sharply lower in prices. steel company profits, commodity market break to affect Exchange at 3:45 on gleefully sticking the harpoon was a year ago, a rise of 8.1%, which is considerably smaller than 13.5% gain shown a week ago. the economic of the 94.1% the Board of Governor's Room of the New York Curb be time The are a or back the past week as specialties. any 92.7% Allen Welsh Dulles will address Junior Investment Bankers the Association increases rolled COMMODITY PRICE INDEX REGISTERS FIRST MAJOR POSTWAR BREAK be The American Iron and Steel Institute announced on Monday of this week the operating rate of steel companies having 94% of the steel-making capacity of the industry will be 92.5% of capac¬ ity for the week beginning Feb. 16, 1948. This compares with Junior Inv, Bankers a 4.3%, the widest weekly break since the govern¬ prices on livestock and meat at the beginning of September, 1946. The current figure is the lowest since Nov. 4, 1947, when it stood at $6.78. It compares with $6.32 at this ment high and all scrap dealers who had their confidence shaken by the commodity price drop. This was reflected in the Chicago market where the price of No. 1 heavy melting declined an average of 75 cents a ton and in Philadelphia an average of 50 cents a ton. application for membership in the at to new anticipating the wage demand by Philip Murray, steel union head. Murray will indicate this week that his union's cost into Exchange. Brokers these railroad living for steel workers. The union, observes, will ask for a substantial increase. Scrap consumers this week were plan, and several pew out-offirms have already made York certain wage increase stems tax rebates and the failure of the be town and and of foundation on has first be made this week Thursday through Clearing Corporation. Much the fencing that day that transactions made by mail was floor brokers own the over ment stock members to contact their direct in by steel officials advocating lower steel prices has not been supported by these price increases and by others which have been made since the first of the year. These increases included tin mill the was out-of-town the in grains and livestock were reflected in the wholesale food price index this week. TRe index Feb. 10, from $7.14 a week previous. This, was a to $6.83 on drop of 31 cents, Talk Turner. The actual execution took place at 9:10, and purchased at 8%. Feb. decline weather has a products from these items will find their cost increased basis by approximately $10 million. by that Alfred E. declines fell received was "floor basic pay higher charges on structural shapes. Estimated on a yearly basis this change in extras will cost structural fabricators approximately $15 million, the above trade authority points out. Major steel firms which sell forging and rerolling billets, blooms and slabs have changed their pricing system to a net ton price basis instead of gross tons. Nonintegrated makers who make finished steel Stern The order reached and in used ' « fabricating industry this week began to size extra floor of the Exchange over the newly installed teletypewriter at 8:58 pipe • recent The structural Corpora¬ market opening , Gray market steel prices which would be the affected by adverse market conditions have reached in the past week. first the Chicago Stock Exchange Feb. 16. An order to buy 100 shares of tion by the oil, gas will also find their merchant on the steel "Clear¬ new prices ingot rate and the loss of output due to cold met head-on with increased consumer requirements. The — borne group increased Drastic A special check by "The Iron Age" editors this week failed to disclose any crack in the steel demand wall. The Chicago Exchange Clearing by Mail ILL. WHOLESALE FOOD PRICE INDEX LOWEST IN THREE MONTHS Dun & Bradstreet these higher prices will be industries. The construction water costs sharpest increase both from the previous week and from 1947 level appeared in the New England Region where failutes jumped from only 2 last week to 25 in the week just ended. the 5) of construction work. CHICAGO, Industry tubes, certain semi-finished material and, the magazine notes, have sharply boosted extra charges on structural steel shapes. The 29 The and and moderately lower industrial output will I believe feature 1948. transaction under the page (825) cases. The week's increase occurred principally in almost two times as many casualties occurred manufacturing where as last week. At 56, manufacturers failed than in any other week since 1941. Retail trade mortality remained at 42, and was about twice that of a a year ago.. There was a * *.;v* compare ..... favorably with . . fractional decline in the dollar volume of wholesale trade the past week and the week ended this Wednesday. While it somewhat above the level of the corresponding week a unit volume was slightly lower. Caution marked the re¬ tailers' attitude in making long-term commitments and resistance to high prices remained considerable. Department store sales on a country-wide basis, as taken from remained year ago, the Federal Reserve Board's index for the week ended Feb. 7, 1948, increased by 10% from the like period of last year. This compared with an increase of 8% in the preceding week. For the four weeks ended Feb. 7, 1948, sales increased by 6% and for the year to date increased by 7%. Retail trade in New York the previous week was hardest hit in food lines as a result of the drastic decline in commodities and such reductions ranged from 5 to 10% in these lines. more year ago. The largest number of failures, almost occurred in the Pacific States. a third of the total, According to the Federal Board's index, department City for the weekly period to Feb. 7, 1948, increased 12% above the same period last year. This compared with an increase of 11% in the preceding week. For the four weeks endfed Feb. 7,1948, sales increased 8% and for the year to date rose by 6%. store sales in New York Reserve ^ THE COMMERCIAL (826) 30 & FINANCIAL CHRONICLE (Continued from page 2) Monetary Fund tively scale. to ganization, but in the endeavor to get down to business while the enthusiasm for the project per¬ limited offic.al statement, an Nov. aiding other to in faux a pas, and one unde¬ $8,045,000. lowing has been slow True, the Fund Danish Kroner Francs French Pesos Mexican Netherlands Guilders Turkish Liras Sterling Pounds that inserted were Woods Bretton behalf member of territories in One the Agreements the transitional postwar on whose states occupied. were gold ier U. S. Switzerland, tion hindering through its or efforts the that other ac¬ mit coun¬ gold tries may make in the same direc¬ tion while employing different suitable means their to cir¬ own few needed "It regrets that The Effect of Negative this Undoubtedly, of if the Fund adhered to banking and financial prin¬ ciples, and ignored political con¬ sound siderations in its operations. -But it is not the exchange operations, regulations thus important. The or¬ Fund's but the far that are ganization, enforced on its members in of some Charter the existence, has had, on the whole, a negative unwholesome very effect. drawn notwithstanding may, Mr. the as virtually forced maintain to an artificial exchange currencies. This unwarranted their for value in some cases, condition has now become widely "suppressed inflation." greater force for evil than known It isf for as a It has hampered good. and reduced both domestic and inter¬ national trade transactions, and is leading factor in creating and maintaining black markets in currency and goods. It has pre¬ vented domestic prices from fluc¬ tuating in accordance with domes¬ tic or foreign money values, has a led to loss of public confidence in fiscal affairs, and has added fuel to the present postwar economic chaos that makes the implementa¬ tion of the Marshall Plan of doubt¬ ful success. As in remarked was the viewing in 1947 currency on New in "Herald-Tribune" York re¬ developments Jan. 2; "Acknowledged changes in cur¬ rates and relations were not numerous in 1947, partly because rency of certain commitments by mem¬ bers the of observed ever, International nominal were beset kets in which would of parities, how¬ by black mar¬ dollars, for instance, purchase number Mone¬ Many countries which tary Fund. many local times the units indicated by official exchange rates. In Ger¬ many a crude sort of barter pre¬ vailed, based mainly upon ciga¬ five been a might It years. the ated and before in monetary adhere at fixed upon to of a which their have would run the "Although the need of virtually all countries for dollars was des¬ perate at all times, the artificial exchange relationships made it it following doubly difficult for countries like France and Italy, for instance, to obtain dollars by means of ex¬ ports. The French and Italian ex¬ porters were forced to use official exchange rates, which made the prices of their wares in the United States egregiously high and even prohibitive." It is thus quite apparent that a serious error was made by the Fund authorities in calling for "tentative parties" to be fixed by the members for their individual a period of re¬ adjustment had been accom¬ plished and political and eco¬ not have achieved its purpose, or it would have been too great and would have inflicted an excessive rise in prices and impoverishment of the French economy. "It therefore is necessary to pass through offers and sets can market "The currency, parities Fund last year for¬ Fund tendency in member to Fund's the countries articles where rates as¬ other in are a estab¬ Government's is to return knows that the following is the best a loopholes for grope of agree¬ exchange me¬ of value let of look us back speculation which seems to have been ignored by pundits of the International Mone¬ causes gold tary Fund. back grouhd of present premiums is very simple! War, together with a paper money system, causes the have the surplus rency or face of property cur¬ having expressed small size in relation to be easily stored value, so or trans¬ in universal ity is demand. in currency are stabil¬ restored, ~ the incentive to other similar final from circulation gold and of hoardings elsewhere bears di- rectlyafin. anothej-'policy enunci¬ ated at Paris—namely exchange stabilization. ^Inflat'on Unless is bound fall of the real ex¬ a Ration's currency. co&tinuoUjS depreciation of rate| of exchange is the*, official or from mone¬ the large private in Europe, Asia (impossible to es¬ ! . ) exchange whether should precede or - stabilization /follow recovery. Long experience fpti many • coun¬ tries, including Europe after the last war, has taught that exchange stabilization is usually thev prior requirement. As ih 1924 exchange stabilization a as should, be regarded foundation stOpe on which to rebuild shattered gconomic struc¬ tures. It follows that the internal depreciation be of currencies must a* Universal Be The Gold Standard Adopted? and throughout of a gold Europe is signature, the International construction both Houses Legislature to the making for Governor of bonds Bank Re¬ for Development and investments for life insur¬ companies and all other legal ance insurance domestic State. the within Bank bonds ments are now Life for companies International legal invest¬ Insurance com¬ which does not except Vermont, have a session this scheduled its Legislature of Eleven im- year. companies oortant life having assets of more than $4.6 billion are insurance domiciled life featuring in Massachu¬ which also are covered and assets of by this legislation have $42,400,000. J. John the which insurance headquarters over Massa¬ in Fraternal organizations chusetts. , International construction , , * of President McClov, for Bank Re¬ Development, and informed of the passage of when this important Massachusetts leg¬ islation, said: "We legislature has approved bill the glad that the Massa¬ are chusetts authorizing companies in the Bank. the insurance State the bonds chase of the to pur¬ Interna¬ The willingness of Legislature to authorize insur¬ most funds to be thuS invested gratifying, standard the light of possible, servative since this would assure some sta¬ »• goes now ance question now arises whether adoption Massachusetts the tional checked." Will matically. view continuing|requests for aid. "Fiscal^ solvency also tary use is restored. Gold pre¬ miums, so-cailed, cease auto¬ In vitaT consideration in pass¬ lead to the has passed bill A of attained must panies in all North Eastern States degree of., .progress When as policy it is tion and real national income. The ternal value of Mass, Insurance Cos, setts imperishable; that have relatively to immediate an tion to the expansion of produc¬ on Legal Investments for sequent adverse effect on exports and a great stirrfulus to imports. It is always *9^ .nice question the of the as as balancing of budgets may be im¬ practicable. It is^Insisted, how¬ ever, that progress in this d:rection must be achieved in propor¬ a *,' World Bank Bds. Made national of holdings other value that and banking transactions* have in terms monetary unit, such as debt claims, leases, etc., into a com¬ modity or commodities that are a con¬ are be|-recognized well as the fact international chaotic conditions in contemplated thefce will be a con¬ Therefore, people who means, seek to transform their must fronted and; markets Jn foreign exchange trade * * it will lead to black in these pages, loss of confidence a stability currency. difficulties with countries to The gold enterprise and prevent tion. The great which many the at of As success. pointed out previously has- been throttle the the essential expansion of produc¬ ing acquire gold or any commodity for hoarding gradually ceases. The gold thus withdrawn means—con¬ spirit ,of is little indication re¬ instability of the nation's finances vnll be as they apply to maintenance parities." rf*oney; printing procure funds with to process) quirements the attempt to do this, but there may goyernrh.ent con¬ to central which to finance it$ manifold gold, since no nation can long have its currency valued in gold abroad at a fixed rate and not have the same value applied to it in domestic dealings, France I.CXU.'s paper suitable, European docan again be are linked to been recognized a sell to mean mestic-currencies question? iV-yv'"*VV>* has '•"So long as banks Ja of Now fact "nest a But it can mean that once the con¬ deficits operating a ditions by the President's' Committee or Foreign Aid. the Harrirrian Com¬ mittee; which in its- report stated:' ment confidence each aim, quickly as possible to stability—but to a real and lasting stability, not to an. artificially and purely appar¬ ent stability. "It a ferred, and, above all, whidh balance course where transition period dur¬ at least part of the lished freelv. of unofficial world bids of convertible a which ing many the of the some insufficient and would have been mem¬ in gold exaggerated mally accepted cannot be wished away merely by saying that the volume of trading in black-mar¬ ket- gold is very limited. More¬ over, there has been evident in new franc about structure commercial the values Fund of par premium. Yet the precarious nature of the in of by Mr. expressed gold is traded in at prematurely to give definition be sometimes a markets it appeared impossible to "In seeking the importance to the non-commercial. such that currencies must gives exchange rate satisfactory for all or stated As This form can This does not neces¬ the reestablishment gold coin standard, however. sarily of current revenues and ;cease tinues fact the bers stated: abroad, waves! "The present state of French transactions Can¬ condemned and war, cies to gold. can is out of the and further much official through additional printing bank notes, currency 'stabilization of Jan. 8: valua¬ a their covering Herbert Bratter in the "Chronicle" difficulties, define move was strongly ocesih Communique issued Government to the it by le¬ backed suppress last 'is ( government " deficit spending, and, in this matter, ihc International Monetary: Fund ' h lelpless to act. Unless and until European" governments■/ .live -■ on manifestos will not wash back the economist, is duly cognizant practical as well as the theoretical aspects of monetary problems. In his Communique announcing the French franc de¬ valuation and proposed adherence to a free domestic gold market, economy by the Fund, and the member nations proper tion, course, offering a bonus on gold domestically produced. But such the "In the dollar the When egg" for linking domestic curren¬ primary cause of all this, o- The coming to the conditions is or States. for currency stabiliza¬ of the hoarded gold will reappear as it did after the are standards as or in now United domes¬ regulations parity is no and currencies fixedk or by individuals and busi¬ Some of this hoard ness concerns. the in confidence no tic ada for and Mr. Mayer is tle by Rene Mayer, the French Min¬ ister of Finance, who as a banker of Throughout Central ' Europe, ! with the exception of Switzerland,- there by Secretary of the Treasury Snyder, who went a lit¬ reflection of this situation is A above strenuously up borders. found in the transactions in gold gal action. This have within transactions Camille premiums value tions, and permitted them at the same time to control, regulate and restrict foreign exchange and trade Mr. called "parities," stated their to June there are amount, it is undoubtedly hoarded gold. for diums coming under the jurisdiction of the Fund's provisions. But it did not do this! Instead, either by persuasion, prestige, or influence, it practi¬ cally forced all member nations to inhabitants the grasping restore their use as way any mar¬ by the International Mone¬ international and to otherwise settle their eco¬ nomic level, free a and French Gutt, the Fund's Managing Director, issued a statement strongly denouncing these war devastated na¬ tions this period in which to de¬ currency total bal¬ Europe and elsewhere. Though in the central banks in suf- icient gradually eclipse are * . last wise step if the Fund had their currencies toward tary Fund. It will be recalled that given clare value of the gold, is, of course, in direct opposition to the policy enunci¬ risk: Either the devaluation would rettes. currencies before was Mayer's proposal to permit internal ket in provisions of any article of this Agreement, maintain and adapt to changing circumstances (and in the case of members whose terri¬ tories have been occupied by the gold market within their free Gold notwithstanding the re¬ strictions on gold trading and hoarding, and the adherance to official parities" several Euro¬ pean through operation of enemy, introduce where neces¬ nations, which are sary) restrictions on payments enjoined not to revalue their cur¬ and transfers for current interna¬ rencies beyond 10% of their "of¬ tional transactions," and members, ficial parities" without consulta¬ desiring to take advantage of this tion and approval of the Fund, remission, are required to give and are directed not to permit notice to the Fund. The supposed free foreign exchange transactions limit of the "transitional period" borders have been, Free franc to sink to its natural The member or a to adverse meet not But, tending Conference, bers Opposition to payments. of Moreover, gold is still in supply in Stabilization Markets by the Bretton up accept it in entirety." Fund's Woods providing "in the postwar transitional period, mem¬ its by XIV Article regulations through to safe manner assured. Some indication that immediate operations by the Fund would be difficult and inef¬ fective was indeed forecast by transactions would have been even smaller dollars against gold. plan, did not consider itself able stabilization nomic Operations volume ing certain important parts of the sale ernments Currency of Basis "de¬ of gold in the United recently in sizable amounts by the British and Canadian gov¬ the ances The the International been not as States greater ad¬ a has " the late Lord Keynes contended, and this is proven by cumstances. $439,445,000.00 the Fund sold $24,164.52 of U. S. to for payments throned," vantage. Monetary Fund, although approv¬ In addition, conditions, gold as a currency in Europe is non-existent, and it is likely to remain thus for some time. Yet, despite this, gold as a means of making international countries, such as which have surplus imports two almost hoarded dollars, to dispose holdings for greatly or than more after its establishment is an that, under present basis their of during very world-wide importers, and would per¬ the to were fact has been relatively The gold. indication purchases of foreign goods by mising 3,400,000.00 125,000,000.00 22,500,000.00 36,045,000.00 5,000,000.00 240,000,000.00 dormant restoration of greater equilibrium in the supplies of the metal throughout the world. It would undoubtedly lead to heav¬ for period that a free mar¬ would serve is the purpose in "The Government knows, fur¬ thermore, that it is not compro¬ Equiv. Dollars $7,500,000.00 232,500,000.00 16,316,599.99 14,888,375,000.00 109,237,500.00 95,622,001.94 14,000,000.00 59,553,349-17 -8 Chilean Pesos to gradual countries: seven Currency Bought— currencies national linked be years ex¬ was basis), the visible stock of War I. ket wished, International Monetary Fund definitely implied that the Fund by exchange a consum¬ be to the of gold will undergo considerable in¬ crease. This happened after World changed for the money of the fol¬ repercussions. sirable total The charter sions duly set amount of $433,445,000 and bought up, and this meant calling for a filing of "official parities" of their pounds sterling to the amount of currencies by the member nations £1,500,000 or the equivalent of which has led indirectly to in the devoutly of the objectives the International Monetary Fund. "For arriving at these ends, the Government refers to the provi¬ sisted, the institution was —certainly of consequence adopted U. S. dollars to the countries for attaining realization member of that a organization 1947, the currencies 28, bought universal gold standard or some rency this aim and, According up The a international in parities. It certainly is mation normal stable cur¬ situation (whether through turning/to ment—of transactions have been on a rela¬ long time deferment of the In¬ ternational Monetary Fund's or¬ a pected that if the trading nations succeed in re¬ of the world again sidering the dificulties our econ¬ omy is going through at the mo¬ and its operations, beginning in bility accurately), it may be ex¬ timate The International Thursday, February 19, 1948 setts particularly is in the traditionally con¬ character of Massachu¬ institutions." -■ .** Volume 167 -Number 4674 THE COMMERCIAL & FINANCIAL CHRONICLE ples and France way of Europe can in the same become spiritually and mate¬ rially strong enough to assure and their Weather (Continued from page 7) Eye cations, certain and the Telescope on inventory with 10.5 million in 1939. The own They can optimism for the appliance busi¬ ness is, to a degree, correlated I to the construction to space and we can¬ working dollar is going into other channels; the veteran not live in an insulated segment of the globe—not if we wish to is shying away from spending sell insulated wire, a pun my chil¬ $10,000 to $12,000 for a $6,000 dren would call corny. house; Ma decides she will con¬ market. that nated time and the her old vert Look" rather outfit. new sistance into the "New dress than buy a fancy efforts at re¬ These minor are' at present. They will become increasingly important if food prices continue high or go higher. 32% of net spendable income of the average American family in 1947, after in¬ taxes, went for food—more than was spent for any other cate¬ come living expense. The price of food will, to a considerable de¬ gree, determine what part of the dollar may' be spent for other things. ■ ■:£ "A; ;■ gory of . this point, I "would like to parenthetically that, the rise in the price level has been contributed to gratuitously by At observe , manufacturers certain unwar- rantedly hoisting prices—or join¬ ing the much more Electric General the like Com¬ devoting their thinking prices. The secret of has always mass production at low pany, are to lowering in this country success been prices. - our course will inflation . that run, present is Any¬ though I believe it will not progress much further— at least after the first monihs of body's guess, this . Inflation is economi¬ and politically too - disas¬ A look at what happened year. cally trous. Italy and France in the 20's is all we need to recall in Germany, the Our own inflation in time by rea¬ economic freedom and danger. be stopped may sonable high production. If severe arti¬ ficial price controls are intro¬ duced, black or gray markets will probably flourish; The difficulty in analyzing -our economy at present is that there are two pros¬ pective counter-forces in opera¬ tion. A government policy on the. one hand seeking lower: prices . availability of goods; while on the other hand the export to Europe will tend to and a greater * goods some*: remove - from our and keep certain prices high.In. other words, the pa¬ tient is receiving a stimulant and economy a sedative at the same time, ■" *■ y: from come business of the past for this. itself, Europe the •. ord—notunit—was remarkable. the Department of preliminary survey of, business in 1947, V goods and services " produced had a- total value of $230 billions, exceeding the previous record year* 1945, by $17 billion.,. Our national income also set a new dollar (I emphasize the word) all-time high at $200 billion, exceeding by $6.3 billion the preceding record -made in 1946. Let us leave generalities a moment and consider two specific companies, well-known to allGeneral Electric and WestingAccording to Commerce's- ^ ■" ; as r; - Marshall and not too much is known about mark Incidentally for that necessities as our well I re¬ political may own as I think there is no other course to pursue. The cost is small compared with the cost of recent war. Nevertheless the implications of the Marshall Plan as to * our own economy are marked, and we shall have to ad¬ just ourselves to it. The plan will exert a very material influence in sustaining high levels of indus¬ trial activities, employment and purchasing power. The impact, however, will not be in all re¬ spects beneficial many of needed by the individual items the European nations are' those in shortest supply here. Examples include grain, steel, steel scrap, rail equipment, farm machinery, as fertilizer, mining machinery, fats and oils, lumber and heavy elec¬ trical equipment. Producers of these items assured of high demand, but may face the nuisances of priorities, allo¬ levels are of does not price itself out of of total about equipment heavy liveries extending Westinghouse booked alone $750 million with de¬ through Electric's the for 1951. orders 12-month pe¬ riod through September 1947 Were $860 million vs. v $542 million a year before, and sales billed were $621 million vs. $339 million. The picture presented by these two giants is certainly-very encourag¬ ing and should auger well for the future of industry. The ap¬ pliance business generally, as you know better than I, has been ex¬ cellent and prospects seem rose¬ your The ate. such unabated. seems million for vacuum semi-dur¬ as- demand able-goods appliances In • three 1947 cleaner sets made' compared were million in 1939; 3% million new washing machines, more than double the 1.4 million produced in 1939; 3 million refrigerators were made, a trifle short the of 3 Vz million 1941 ;• 17 in made sets with5 LI million radio produced compared were to propose be another it must for this The goals are clear. nual Forecast of construction ?nd bring to ing drain tivity, rent continuation' of the a cur¬ upward trend is anticipated during 1948. The Department says construction expenditures in 1948^ are expected to total $15.2 billion mate compared with the esti¬ as of $12.7 terms will billion for 1947, nearly 20%.', In physical volume, 1948 increase an of of probably be only 10% above 1947 in view of the expected fur¬ rise in costs. Practically ther type every of construction will partment' of Commerce and Bureau ' of Labor Statistics visages projects agricultural income. Iron and steel are in short supply, as you all realize. Thus basic heavy indus¬ barring labor difficulties, likely to sustain a i\\gh level of operations. Employment try, seems result a A at look continue high. construction pro¬ should the of the American Telephone gram & Telegraph Company is an indi¬ cation that quantities of copper will be used. That selling competitive, there seems little doubt, but that the demand wire will be is there, I firmly believe. general factors that I men¬ tioned, such as interest rates, lending policies of banks, capital position of corporations, the rate of inflation, the European situa¬ tion and the general position of The should business determine your ability to supply it. ; In conclusion, let me say that I am optimistic for the industry but cannot ignore the fact that a weather eye ; to the telescope . essential. seems re¬ before the Congress. The amount of aid we give should then be specifically related ward the to the progress made goal of Europe, for only toward No unity one Europe moving a achieve peace. can can to¬ for free unity one tell how rapidly produc¬ be increased and no one can effect tell on the weather No crops. the intensity and fore¬ one can the of its Soviet economic offensive to sabotage re¬ covery. Many estimates have been made. We must create a sound organization with genuinely a great purpose. I would rather pro¬ vide to such an organization the full which has been requested limit it with an amount sum than which might fail Our aid should portion to do the job. in pro¬ be given European effort to achieve unity. The faster it pro¬ the gresses sooner will we or four years bate is this mc nearly highly developed. con¬ the hound proach and I urge it again ap¬ ization. . Then heed we something very If Europe is going to more. get back on its feet; if we are actually to build a permanent bolder and better in our Govern¬ ment has yet proposed. What is needed for Europe is unity. Let us squarely face one simple fact. So long as Europe is divided into peace, we need plan than than more tions a anyone a score it will be vitation -for any ern wars of weak na¬ continuing in¬ aggressor. Mod¬ a have all been waged against dictatorships weak by or divided nations. Aggressors do not attack strong great .can nations and united. federation, become peace. The they ; 16 European a great a : , , know are Joined in a free Europe bulwark / nations involved recovery for plan the plus The great lack but by cooperation and coordinated effort Europe can start on tically that road European no Prac¬ now. nation now dares accept the money of an¬ other for fear of instability or in¬ flation. currencies Stable developed or there can be no exchange of goods and services. Just suppose we in America were 48 separate States with different differing currencies high tariff barriers between them. We would be very little better off than Europe is today. languages, and united and back its feet at the on Meanwhile, show that careful our estimates prospective na¬ tional income, carefully managed, will permit both the full aid and program duction well of as our national our tax own European substantial warranted a hands such as the We hold in chance to spread those blessings to much of our world today and to the achieve Then inclusive an defense agreement to something progressively more binding. West¬ ern Europe so united for its own military defense and its own eco¬ well-being peace. American foreign and can it be must world peace. Moving toward unity the peo¬ real means policy directed to that goal. I still deeply repair fear war. and incompetence which has believe that we can the bungling of this Administration which has brought us to a condition where all people We avoid the waste can ac¬ companied the spending of more than $20 billion in foreign aid since the end of the war. We can, and I believe program for will we must, launch a European unity which bring about the greatest force for permanent peace in the world since the adoption of the Con¬ stitution of the United States. As to nation a meet we can surely unite challenge of this size. a debt as reduction of burden. people of Russia. Can it be said that Europe does not want unity? Mr. Churchill has spoken most eloquently for it on repeated occasions. Mr. Attlee has "Europe perish." federate must President has said and or Auriol "Europe live, and if she does re¬ not or a Foreign Minister come rope." and Belgium, the Netherlands Luxemburg, the three nations which have postwar a unity new selves known and made recovery, created France starting. ment. greatest have our own We capacity, in must our into move an era We where the a lowmen will animate mankind. This Lincoln's hope. He put was it this way: "Our principle great sentiment in the is go not alone to the people of all future time.". Let that use us rededicate ourselves ideal great American strength our for the as varied longer products. be steady the American people and for the building of a just and lasting in the world. peace SURE - SAFE PROFITABLE mo¬ create economic has great and Coal can come from the Ruhr and Great steel can come tries and from Britain;; from these France and coun¬ Bel¬ gium. There is lumber in Sweden. There are mark and dairy products in Den¬ the Netherlands. Italy to we improvement of the well-being of freely to where they are National boundaries Europe this country but hope to the world for most needed. no of Independence which gave liberty enough cooperation so that goods will be produced where they can be produced to greatest advantage and that Declaration Objective to re¬ of our fel- nationalism is can spirit freedom, of love of God and spect for the dignity Cooperation of Europe First object own withdraw from the world and invite future catastrophe. Italy out is the now Unless selfish first our counsels of those who would have us is to be allowed to rise again the time for unity is now. The us reject the false them¬ The movement is Clearly in already among working are Customs Union. the BENELUX. as put behind We must put aside ideals. humil¬ consolidation of Western Eu¬ a the past. of must Bevin ha§ said "The time has for to vindictiveness and the blunders of of is creation, not conflict. It is good¬ will toward all men, including the said have re¬ The essential of this great plan barriers. never seen. from move fears, cherishing the highest faith lowest possible cost. should both spiritual and blessings it should shall But in our magnificent Union we maierial the United Nations charter. niggling arguments, th,e petty have achieved world has Pan American defense agreement which is specifically permitted by must be the in our The road to unity is long difficult and much of resources. is unity. A Union of Europe 't They are the Western civil¬ They also have great ma¬ very source terial ; Their peoples are have confusion and vinced tion United States. control of internal the task. our iating charity." All the de¬ to do it. or The understanding might the model of our own We of gesture without future have a popula¬ twice that of the traditions A real ad¬ the end want American assistance to be a this program through to its conclusion whether it took three growth of start from come unite herself if she wishes to carry a ministrator will spend the money only as rapidly as he can see con¬ crete results in getting Europe to cover Western Germany There must also be political unity. This would not require the surrender of languages to France (Continued from page 20) develop mass production and consumption, accompanied by a rising standard of living and personal security. nomic with accuracy say how much money will be needed in the first 15 months, because no can ness American now and multiply that great new capital expenditures would be warranted con¬ peace about it? The great purpose of European unity should be set forth specifically in foretell $6 billion against $4.8 billion. The prospects for the automotive busi¬ means go legislation skills In this way the markets would affairs. we their to end the exhaust¬ our exchange so or can tal residential construction around The build can an How shall the could their products freely, for the first time in modern history. * mass profoundly am we on tion 1948 adven¬ creatively sources. the home building as against an estimated 860,000 in 1947 with to¬ as that en¬ 950,000 in at hand. I vinced share in the anticipated gain: resi¬ dential, public construction, pub¬ lic utility, commercial and indus¬ trial. A joint study of the De¬ used great, permanent good. are ac¬ disastrous be Goals Are Clear the have great industrial agricultural production. All of these products should move through a United European econ¬ omy. A great area of consumers Recovery Program is not ropean ture, that, if the Eu¬ you According to the United States Department of Labor's An¬ need no comment—just try to buy a new car without a tradeat $1.2 billion vs. $679 million in ip. Actually 5,050,000 autos and 1946, and President Wilson looks "trucks were produced in 1947. In for a 20% gain in the new year. turn the farm machinery indus¬ Current production is running try bids fair to continue high 30% higher than a year ago. Back¬ operations, especially with large for humani¬ tarian purposes, our extremely bright prospects in the general business picture— provided, of course, the industry :*. it is still in the formative stage details. one y : Plan, About the latter I wish to be brief the and gen¬ position record of and the prospects Last year's dollar rec¬ This brings us to the European situation these year logs to- the As to Now eral considerations to the The of the that for the fun of it. house Electric. General Electric's farsighted, sales for 1947 have been estimated process Others Our Business Prospects industry. freedom and prosperity. provide a new force in the world great enough to assure its peace for generations to come. higher costs at either manufactur¬ controls. Should Western Europe ing or distribution bases, it will become destitute or embrace a to¬ be hard to envisage a decline in talitarian form of government, the effect on our own economy will the price level. Here and there be most unfortunate. However, potshots are taken at inflation by even though we are removed in consumer resistance. The enter¬ from Europe, modern tainment industry, hotels*, movies, distance restaurants, etc., reflect the fact technology has virtually elimi¬ need for construction itself is .31 (827) U S. SAVINGS BONDS 32 THE COMMERCIAL (828) FINANCIAL & CHRONICLE longer hours and in¬ production, the payment of debts and building up the re¬ serves of individuals and busi¬ nesses for the inevitable rainy vestments, Drastic Deflation: A Graver Danger Than Inflation put its in order. house financial own inflation problems of money In brief, our • consist of an abundance in far of excess needs and a our scarcity of goods. At first glance it might seem that the solution of the excess money problem would reduce the supply of money by the reverse process which created it. An analysis of be simply to inflation and how the the of who it, indicates that a re¬ is next to impos¬ owns duction about and came money excess process sible. of part of our bank deposits, it is included in our swollen debits a Removing inflation credits. and of deflation has al¬ by the process ways created which hardships to some worse than the hard¬ seem by inflation. We experiences both created ships have had with inflation many inflations All and deflation. have to come end an and deflations have followed. The conditions and losses from deflations have depression resulting times hard caused entwined with now duction dreaded more tion and to¬ money national debt that a excessive. then seemed The de¬ flationary policies of reducing the green backs outstanding and re¬ turning to hard money were ac¬ companied by unemployment and hard times. It is probably true authorities permitted to rise frantically. been the rediscount rates to 1*4%. The banks have been re¬ creased. quested to restrain loans, and it is proposed that consumer credit controls be re-established. The 10-point program a controls. Congress avoided if the men in charge of Government monetary and treasury policies at that time could have foreseen the growth and expansion ahead. Now it it have would to the inflation control powers use it already has. Inflation The increased been produc¬ which was fully within our capacity and encouraged business grow of money In to the up excess purchasing recent more supply power. years controls of dread which of deflation. a symptoms the in Government The action of the banks in raising rates and flationary expansion. and prices, de¬ a large market and world-wide a business depression generally re¬ garded as second-to-none-other since the South Sea Bubble. In 1937 the fear of over expan¬ sion of credit lead to efforts to re¬ strict this expansion through the sale of Government bonds by the and Reserve of time Banks. In due the sharpest and collapse of security commodity prices in modern severe times followed, with a depression that might have had a much longer duration if the war prepa¬ rations of European countries had hot bolstered prices and our pro¬ Now inflation volume of has money reached high. records. inflation. our by and bank We know The monetary more we de¬ have multiplication purchasing than 500% of power since 1940 with an increase of about 100% in our total production is enough evidence, if themselves prove to us gerous deflation may go questions upper¬ in the minds of leading busi¬ bounds, ness is not a past, executives. It however, new gone much experiment. In the deflations have further than expected desired. Stopping an inflation quite possible even after it has grown to the dimensions of our prescent inflation. But stop¬ ping the were that inflation. high not in sufficient, to we A prices have a deflation a which dan¬ temporary a the Over years number of letters have received we an impressive criticizing the Commission's activities, thousands of them, is very to our unhealthy inflation. The Govern¬ ment can curb its spending and should cut its spending to the bone in order to discourage fur¬ the lations back Government regu¬ red and that tape hold production and business en¬ should be speedily cor¬ give every encourage¬ ment to production, enterprise and terprise rected The solvents of free thrift. ternational affairs until that given inflation of the part not absorb which without removed be de¬ A-5? treatment to financial statements filed under Rule X-17 Isn't it a fact that in the first instance this Commission's mar¬ we for this request, the fear of reprisals. as a reason Why doesn't the Commission tell the Congress who it considers to be the representatives of the securities industry that persuaded the Commission not to accord confidential to kets, free competition, freedom of enterprise, and' investment should be given all their power to help us grow in our domestic and in¬ can and with surprising uniformity, a large percentage of these have asked that they be treated confidentially and a great many of them have largest contributor ther inflation. We quote the was j baby? own further from Mr. McConnaughey's letter: • brokers and dealers generally concede that regulatory bodies requiring them to file financial reports are within the proper scope of governmental regula¬ "I believe rules of We have tion of their business. never received any protest flation. It is not intended by these against the filing requirements as such. Obviously, the re¬ to say that there is noth¬ ports are an important aid to enforcement of the Act.!'. . .. can be done. There is remarks ing that plenty than can ample, $80 the be done. For nanced deposits of investors. of refi¬ private rates should should the hands into Interest be be free and competitive. The man¬ agement of the Government debt should be so-revised that the de¬ clining prices Government of threat to the bonds will not be money and capital markets. Taxes a That this is Mr. ex¬ billion worth Government bonds held by banks However, McConnaughey's belief enforcement. Emphasis is laid by the Commission on the right of the investing public to obtain financial reports showing the of condition which with firms the nomic in volition between We have on the one no and hand peremptory direction on the other. and create an eco¬ c . Compelling the filing of annual financial reports by registered dealers and brokers is a burden upon business. The failure to accord those reports confidential will which environment comes deals. it Here, however, the dis¬ encour¬ aged to appeal to private investors in this country . protests, we are not at all surprised. The fear of reprisals prevents these.. The stock phrase of dealers and brokers seems to be "Why should I stick my neck out?" tinction be ; . eign countries seeking our aid in should do not doubt. As to quarrel with that point of view. reconstruction we dispute his contention relating to the aid to we and tariffs should be reduced. For¬ private investors to their savings in the enter¬ encourage treatment have we N. Y. Curb Floor Clerks is, in opinion, our is something of no record of suc¬ Deflation spreads more rap¬ As in all other business, Form New Association are financial and the of Formation Curb investor to ask his dealer York New Exchange Floor Clerks As¬ sociation has been announced fol¬ lowing meeting organization an and election the officers of held an ; abuse of the administra¬ was of Joseph Mc- & of Negri Co. of course, broker for a Proudfoot report, it is proper for an financial statement. or a Dun & Brad- or dealer refuses to furnish the informa¬ the latter can be guided accordingly. That the pertinent rule of the Commission can be used financial magazine as the' means of stimulating its Stern circulation is insupportable. .; elected the first president of the organization, with Jack a the investor, tion to Daniel Hannafin draw down or report, or the report of some other agency. If the broker at exchange. Manus & Co. He may street by a Herbert E. president. Other are August Fischer . vice as officers named of Tucker, The the furore created Commission Anthony & Co., treas¬ urer; Howard Schaal of Clark, of deflation and the fact of de¬ Dodge & Co., financial secretary; clining prices get under way, the Eugene Ross of R. F. Lafferty & process snowballs. Business fail¬ Co., recording secretary; Rocco ures increase. Each new series of Dragonette of Hardy & Co., cor¬ failures carries down with it or responding secretary; James weakens the contributors to these Claire of Goodbody & Co., serbusinesses and the multiplication geant-at-arms; and Peter Palermo of products in turn have their bundles of contributors which suf¬ fer as a consequence of the failure of their business outlets. by the protest against the failure of their brokers." idly than inflation. Once the fear give this confidential treatment of which we speak, has-apparently stirred it to reluctant action, We quote again from Mr. McConnaughey's letter. "We are, a study, of the experi¬ rule, to ascertain the extent to which the however, undertaking under the ence to . public record of this information has been used, and useful, as a protection to public investors. On the basis of that study of failures follow failures until of Peter P. McDermott & Co., we hope to be able to reappraise the question whether the liquidation runs its# course. De¬ assistant sergeant-at-arms. pressing inflation is somewhat like Governors of the new group in¬ possible use of the information by the listed brokers' com¬ rolling, back prices., Every price clude in. addition to the officers petitors in seeking business is sufficiently, antagonistic, to and every business is associated George Hoff of Carl, M/ Loeb, the public interest to offset whatever advantage the public with a vast variety of contributing Rhoades & Co.; James Karle of availability of these financial statements may have to the costs and businesses. A roll back Merrill Lynch, Pierce, Fenner & upsets the contributing producers. Beane; William Gerhard of Laird, public generally, and particularly to investors who, appar¬ Each of these contributors' prices Bissell & Meeds; William Mira- ently everyone agrees, are entitled to know the condition or would able posits, production, employment and high prices exceed all previ¬ ous far this and whether it can be held with¬ in frequently demonstrated, that of fear of reprisals the existence of the SEC acts gag upon the industry? y .■ .» . u reason tive function. to let a The as prises of these countries. run record Isn't it true, as we have by ital issues. How ; Commission itself? from the come part of both the Government and business. Government spending the declining market for new cap¬ It all-time for the rule aggressive leadership on the more - industry? In unadulterated fact, didn't the basic impetus rainy day will require a risk duction. new create considerable deflation, cess. Treasury and the Federal Reserve Board policies of restricting credit expansion were followed by the collapse in the course restraints inflationary expansion seems bond for already noticeable in the price of bonds and preferred stock, and or In 1928-29 the most bring about some 1919-20 in production and a increase in unemployment. Federal requirements reserve further on policies crease stock or consequences deep-seated In followed by a sharp commodity prices and soon decline created entirely controlling of inflation we al¬ ready have. The inflation bill as passed can be administered so as to restrain somewhat further in¬ the deflation Government were have for serves Pulling thejWool. and costs prices and to encourage the sound policies necessary to enable the country to grow up and absorb this inflation and keep the re¬ against program almost were recommendations most have we had some experiences with infla¬ tion and Government deflation policies and What Controls Administration's The tion to for inflation has passed a four-point program of credit con¬ trol and urged the Administration increasing that recommended Administration has will to have little a have been taken to restrain the effects of this inflation. Interest rates have been partly seems becoming are alarmed about it. Steps that these misfortunes could have better ex¬ large tax take would not be pos¬ sible without this inflation. The we monetary infla¬ depreciated gether with and They May Do War in 1865 with faced were very pro¬ Government's the Even pense. our income, costs, and feared than inflation. After the Civil a into our part of our cost of wages, a large part of this inflation has now been integrated into our economic system. It is Moreover, The reserve requirements of the Cen¬ tral Reserve City Banks of New York and Chicago'have been in¬ became interwoven our prices sign that inflation is over. no The Reserve Banks have increased whole economic fabric; it is a part living, is inflation has the Because now supply collapse of some commodity of distortion further // (Continued from page 3) days that may be ahead. But to restrain our vast inflation from a (Continued from first page) lem and each country must \\ creased Thursday, February 19, 1948 its Francis L Michael Petruzzi ney & Co.; duPont of & Smith, Louis Co.; certainly be undesir¬ the new inflation present and Arnold unknown Yes, entitled to know by volition and not by force or of duress. Peter Barbis. About prices carry charter 150 members heights; have joined the association, which the Commission interest" It is also undesirable to bring on is comprised of order clerks repre¬ deflation with its destructive senting member firms on the Curb consequences and the years of de¬ pression and reconstruction that Exchange trading floor, special¬ ists' clerks on the floor, and clerks would necessarily follow. admonish thrifty, people buy less, ernment bonds prices has success. very There invest and to in hold little would be Gov¬ down promise of be hopes, in member firm authorized clerks. offices relieve to who Curb A ier run are tion is to promote of aowever, in encouraging new cap¬ ital expansion, ventures into a of new production', foreign in¬ cialists' clerks. • alleged excuse for everything that it does, to the detriment of the small is in the public interest and cannot in the long cause of capitalism. No one do other than hurMhe no use square for capitalism. who True public interest requires deal all around, and that square deal cries for by the SEC of a rule which will the immediate passage member firm floor clerks and spe¬ fields -• all this nonsense. It is high time: for hiding behind the term "public rule that works ones have good will and cooperation an j cease knows this better than the left-wingers in the SEC floor a as to : - dealers and brokers in securities and favors the wealth¬ Purpose of the organiza¬ spirit v' r-" - It is time to stop a To ;';y Bar¬ Brickman, Landsberg & Co.; and course and costs to bella of among give confidential treatment to annual financial reports^ : filed by registered dealers and brokers. Volume 167 Number 4674 THE (Continued from page 4) toward the objective of a & FINANCIAL CHRONICLE (829) world-wide Our Fiscal effort COMMERCIAL Policy present conditions that could jus¬ tify a tax policy or program fail¬ not point crept into revise some it. There is need to conditions, reduce our which possible for must trade to we revenues would tries, the flow of private Amer¬ ican investment funds into for¬ make- it a im¬ to meet the finan¬ us mental loans and assistance. cal year 1949 and also make pro¬ vision for adequate retirement of from erty laws for the purpose of giv¬ ing tax benefits to their residents the public debt. It will take the cooperation and the forbearance of all our people been reached remains to be A careful balance seen. between re¬ believes controls that should to the minimum essential to the full operation of our free enterprise system. The job can best be done, and more quickly, if government, business, and the public together exercise commonsense restraints. A government surplus of receipts expenditures is our most ef¬ over fective weapon in controlling the aggregate volume of purchasing power. Government surplus rep¬ resents money which is taken from the and spending stream by taxeg is not returned to it by gov¬ ernment expenditures. A surplus of receipts over" expenditures has been one of the strong anti-infla¬ tionary forces operating in the during the present year. When the proceeds of a gov¬ ernment surplus are used to re¬ tire debt held by the banking sys¬ economy tem, two plished. objectives are accom¬ The current spending ^tream is cut down and the money kiipply curtailed. It has~ consaquently been the Treasury policy to reduce as much as possible the amount of debt held by the com¬ mercial banks. Public , Debt Question tress, and not ment, Differentiations- of debt owner¬ for instance, have a wide¬ spread effect upon our economy. Practical management is therefore ship, in essential retirement, debt the reissuing of and in maturities, debt distribution in of debt hold¬ com¬ Reductions of through reduce cannot rev¬ our on consumer states high-lighted the need for uni¬ taxation of family incomes In the field of business the so-called double taxation, taxation of a United States for the ending June 30, 1949, fiscal year calls for total expenditures of $39.7 billion. This is a tremendous outlay, but I doubt seriously, considering final net expenditures, that it will be reduced time. significantly Of the total proposed budget, related the to effects of prevent The and future estimate the of is directly war, the of costs war a amount 79% this at efforts our to war. national for de¬ should be made business in for the losses prosperous Federal in off profits realized The years. estate offset of incurred against the years and role be strengthened. A better in¬ tegration of the estate with the gift tax, and of both with the in¬ tax, will contribute to end. V'". . this ■ - Several phases of the tax struc¬ ture involve problems of Federal. State tax coordination. fense alone is $11 billion. This one tax figure amounts to 28% of the 1949 budget. mental Postwar tant contribution to Provision services and billion, $6.1 $7 billion, ternational the need technical debt for in¬ needed Interest to amounts on $5.3 This fixed charge, total¬ is an inflexible item. billion is provided ■ to refunds of which the is of finance. public billion. There number amounts 18% of the budget, be receipts, represents of in taxes analyzing the government's peacetime operations, we find that 12%, or $5.0 billion of the budg¬ et such covers items flood as ings. Ownership of the debt, broadly which would better relations be¬ including such groups as in¬ This leaves, then, 9%, or $3.3 companies, non-financial billion in the budget to cover all corporations and associations. the running expenses of the Gov¬ The remaining three-eighths is ernment: the Executive Office, the owned by commercial banks and Congress, the State, Treasury, the Federal Reserve Banks. Justice, Post Office, Interior, public debt reached a peak Agriculture, Commerce, Labor, of $280 billion in February, 1946. Atomic Energy Commission and Since then, it has been reduced by the various other agencies.. To over $25 billion. Most of this re¬ cut large sums out of this group duction was effected by drawing would be a difficult undertaking. '" The down the ^Treasury cash balance peacetime level. We have only just begun to make sizable reductions from from the a wartime revenue to a During the surplus* Opposed to Hasty Tax Reductions I our present we have period since the peak of the debt, total holdings of government se¬ curities by commercial and Fed¬ total eral Reserve Banks have been re¬ before duced by $27 billion. order to reduce In ; bank hold¬ ings of government securities by billion during the period in $27 which the total debt decrease was it was necessary to the government security billion, $25 increase holdings tof nonbank investors. sale of savings bonds has The been an important factor in mak¬ ing this shift possible. We expect to push the sale of savings bonds even harder in the period ahead. These, like other forms of savings, are a means of taking money from spending stream, and so of cutting down inflationary pres¬ the sures. • In the management of the debt, firmly opposed to am tax reduction be hasty a which would lower revenue I'evel before determined what our outlay of expenditures is to for the fiscal and 1949 year complete and proper sur¬ of revision of our entire tax vey a structure is undertaken. , . For many years, taxes have been ad¬ justed piecemeal to meet urgent requirements. The depression years, followed by preparations for defense, and later by the itself, called for continually war creased Our first sources step structure in of revenue. changing should be to in¬ our tax iron out these inequities. / The Treasury Department began to lay plans for the revision ture even of the wan before of the before conclusion It has already placed Congressional committees fifteen tax studies. I the tax struc¬ should like some.of those to * mention areas here, in which attractive tempta¬ vision appears to be tion to postpone debt reduction. particularly Tax reduction has a strong im¬ desirable in the interest of basic mediate ~ appeal. 1 But because of economic goals. ; it is always an the far-reaching effect upon our national economy, ceive of any I cannot con¬ considerations under The excise tax re¬ structure was rapidly expanded during the war, and some undesirable features the mote the simplicity "of reporting for taxpayer, and simplify tax administration. Tax the United States in world Department has ury. trade the Treas¬ It is most important that s well-balanced^- and a we fail? tax system. However, we must keep in mind that most revisions to necessary ture on will the put sound a involve Therefore, tax and loss Since policies expan¬ competitive vitality of these policies definitely must be predicated on free our society, the- permanent and not national interest immediate advantages individual wishes. or on American free enterprise is the consideration. But the hori¬ zons are far broader. Today, the first entire world States not to looks to determine the United whether or free society is capable of our of countries, and might re¬ inter-govern¬ Consideration preferential must be tax given, which to treatment might strength weaken the structure and of our income taxes when our en¬ tax system is becoming in¬ creasingly reliant on the income and not disguised in the form of exemption or tax reduction. Though taxation of income de¬ tax undertaken, affect the willingness of to send their capital icans, it has the virtue of pre¬ venting the charge being made against the United States Gov¬ abroad in pursuit of new ventures the development of old ones. pitizens to compete with nationals doing business abroad. Taxes investors or The policy of the United States at this time is to make no special foreign is sources con¬ sidered too harsh by some Amer¬ that ernment of-other home it subsidizes countries in their our own markets. Particularly be¬ tax concessions to American cit¬ cause of our leadership in world izens and corporations who go trade and the world economy, and into foreign markets. There have the importance of our role in been some departures from this stimulating world rehabilitation, policy when special circumstances we must exercise extreme care not to give the false impression required it. In general, however, the effect of make business own our laws has been to Americans abroad engaging stand in rely upon Amer¬ industrial techniques and ican to acumen of striving for foreign economic penetration and domination. their on feet and to meet com¬ One of the most persistent crit¬ icisms of this policy is that it As lem on of tax issue, the prob¬ taxing Americans doing every business abroad involves the bal¬ ancing of a number of considera¬ tions, and this is not a matter easy to resolve. But, let me repeat, we making a special and careful study of this important problem. are analyzing the available facts considerations, There is no doubt that if we a creditable and satisfactory solu¬ accorded special tax treatment to tion to the problem should be de¬ other countries. American income By the and derived from a relevant veloped. ' Observations revenue, overall fiscal our and in wise essentially affect the sion rehabilitation however, to the extent tire de¬ struc¬ judgment again counsels against hasty dissipation of our margin of surplus through will economic war-torn the areas, rived from fair, basis of the cans of Revenue Loss velopment of backward among other studies, to reexam¬ ine the tax treatment of Ameri¬ places Americans at a disadvan¬ tage in competing with nationals Revisions Will Involve It would assist in challenge and economic recovery, business ors, surance national our petition. control, reclamation, and other If we ex¬ public works items, agricultural general 'tax reduction. speaking, is divided three ways. programs and state aid, that is, haust our revenue reserves pre¬ About one-fourth is owned by in¬ maturely, we may deny ourselves public assistance and highways. dividuals. About three-eighths is It is doubtful that these items the opportunity to make tax re¬ owned by other nonbank invest-; will be materially cut this year. visions necessary to the economy. , of aged. of tax as its principal component. maintaining our obligations while Past experience indicates, too, striving always to reduce as rap¬ that preferential tax treatment is idly as is prudent the total cost of an inefficient technique. Sub¬ sidies are generally more effective operating our government. In the light of the position of when they are direct and specific pro¬ create In large adjustments a meet gov¬ of So, the foregoing programs make up nearly four-fifths of the 1949 expenditure estimate. an for to elements ernment, improve tax equity, and \ , law present to also all tween the taxpayer and the duties which the government must repay. the contribute figure a estimate an overpayment impor¬ inter-govern¬ integration. fiscal of the total. 15% or to make can to benefits or is estimated veteran for revision and of gift taxes has to come or program that would fail balance the budget in the fis¬ life in all the states. point which would dividends requires attention. We impossible for us to meet should also explore fully the po¬ the financial, economic and moral tentialities of the tax system to obligations of the people of this foster the growth of small busi¬ ness. It would further seem de¬ country. The proposed Budget of the sirable that more liberal provision to enues pol¬ to The form present world dis¬ all nations, should weight make it cover The problems of debt manage¬ however, are much more intricate than merely using rev¬ enue surplus to pay off the debt. , postwar Tax of we, ling 13%, Nearly $2 Management of view In government restricted be and war disproportionate low income groups in the process of shifting has straint and encouragement should be maintained. This Administra¬ tion, our mitments. encour¬ icy tendency of more and more to. adopt community-prop¬ in the midst of the transitional are be duce thewolume of prices. , . Inflationary would siderations under existing condi¬ tions that would justify a tax period between a war and a peace economy. The high cost of gov¬ ernment today results in the main Arresting markets with We have been working earn¬ estly toward the goal of arresting inflationary pressures. Whether the peak of these pressures has of eign cial, economic and moral obliga¬ tions of the people of this country. I cannot conceive of any con¬ Pressures Goal business in foreign coun¬ or of these excises, espe¬ cially those which bear heavily on business costs or tend to fall ing to balance tjhe budget, in the fiscal year 1949 and making ne¬ cessary provision for adequate re¬ tirement of the public debt. We better balanced economy. 33 resolving its fundamental prob¬ by overcoming forces that endanger our economic structure. (Continued from page 5) popular psychology were such thqt it promoted confidence in a permanently higher plateau of industrial activity, there would be no qualms voiced over the accompanying expansion of corporate balance sheets. For the general situation is largely that the big working capital of recent years are inadequate to maintain former degrees of liquidity because of the increase in business volume which has naturally necessitated greatly-expanded receivables and inventories—realization of which is being shown by the market's present steadiness. dollar additions to Much pessimistic comment has been made because of the failure keep pace with the enormous six-year increase in dollar volume, in retail distribution. While this indicates that the absorption of actual goods is not as great as might seem at first sight; the other, and healthy, side of this medal is that the "inven¬ tory" of the consumer is thereby really sounder and less overexpanded than might otherwise have been the case. of sales to unit recent relative steadiness of public utility shares the again has wisely noted the beneficial effects of lower costs on this industry. Lower prices would also create some savings in the utilities' $6 billion construction program, and a recession would the In market provide cut-back of this burden. a • lems » Our success in these efforts should demonstrate that the most effective economic system to the welfare and sure is found in man tive as¬ economy. happiness of free, competi¬ a note its over-all 1929 and On on 1947 the Dow-Jones average * no must we Between less than 140 -f all this indicate that the intelligent investor is finally displacing the speculator in the market's saddle? / Investments Feb. 16, subsequent to the foregoing address, Secretary Sny¬ der, speaking at the Chicago World Trade Conference "World Trade—A ponent erated of his on revenues and, at the same time, revealed that the Treasury Department was mak¬ ing a study of tax treatment of Americans doing business abroad. In this connection, Secretary Sny¬ der stated: We are * in transitional and a (Special -to NEW The ULM, Hinderscher, and come Financial Chronicle) L. Percy Morsted, MacNeil Nash have associated with the J. Bond & O. MINN.—Arden be¬ State the midst period of between economy. a The high cost of government today re¬ sults from our war and postwar In view of existing Salle R. & Co. Chronicle) Financial Conrad Bruce america Co. & Co. Co., Russ was with and Banc- • Mortgage Co., 26North to The CHICAGO, Hammill The Building. In the past he With Hulburd Warren (Special (Special to filiated with Denault & Minnesota Street. the With Denault SAN FRANCISCO, CALIF.— George A. 'Curran has become af¬ & Financial ILL. Co., — 208 Shearson, Financial Chronicle) ILL. —Stanley J. of Hulburd, Warren & Chandler, La 208 South La Salle Street, mem¬ Street, have added Fredric Clark, Jr. to their staff. The Weiler has been added to the staff Chronicle) "South to CHICAGO, Shearson, Hammill Adds peace commitments. (Special Bond & Mortgage Necessary Com¬ Economy," reit¬ objections to reduced Curran Three With State Our government war fell 51%, but * # Foreign intelligence, long-term discrimination and selectivity. individual stocks rose above their 1929 highs last year. Does Taxes Long-Term Selectivity And in giving the stock market credit for bers cago of the New York Stock Exchanges. and Chi¬ ; 34 THE COMMERCIAL (830) theoretically holding, they'll advance an¬ two-three points before are now Tomorrow's other Markets selling of any importance will come in. Should they go Walter higher than that the chances are that the market will be off on a real move. Some of Whyte Says— WHYTE= short but don't forget stops. Further advance anticipated. positions, Retain ❖ # # however, that it accounted for more than a small fraction of the But the market is move. in such condition today that a concentrated buy¬ selling is enough to set almost any going to be much ing or column for reading mat¬ the wheels in motion. There are too many other * * ❖ This isn't of buying was for account. I don't believe, recent the =By WALTER a ter. Outlook for Construction think I (Continued from page 9) ized by energy, resourcefulness and invention, by diversity and flexibility comparable with those qualities as they exist in our econ¬ , as omy things are, they're quite Amer. Brake Shoe.. 38 Chain Amer. r_ ——— __ — which they were to be bought were quite a number of points away. Readers must have prices the stocks, I while that realized at action called decline. The decline and stocks sold down translated into a came United More next Thursday. ; —Walter was bullish, the buying points at which this belief was to be for 15 Aircraft— 23 Martin- G. L. article do necessarily at any those of the not with coincide time They are presented as Chronicle. those this only.] of the author of all the hulla¬ baloo about housing, the family of In spite world. is better housed, neighborhoods and with income average in better more comforts is buying zone. stocks] Practically all of them Street, already in the black col¬ even if the profits are are JamdS'f M. added h?ve O'Brien to their staff. to go In time. stocks to The MINNEAPOLIS Scharling is with Holley, Dayton Gernon, Rand Tower. far. how the had the time, If I the and inclination pa¬ I might give over a couple of paragraphs on the subject. But having neither the inclination or the patience we'll simply have to stick to MINNEAPOLIS is — R o b e r t C. with Keenan now was Bank of New Ulm, & Building. Inc., National formerly with Clarey, He the State Minn. tience the market action and let the academic you stuff for go LOS Eli to The ANGELES, Goulden 458 has CALIF. —Dr. been added to Morton Seidel & Co., the staff of Spring Street. South Business this column!) * * ❖ stocks individual On Man's you Bookshelf Pacific Coast Securities on 1 Pacific Coast Exchanges of Bureau Research, 1819 Broadway, New 23, N. Y.—paper—75£. York hind the Iron Curtain—Technique Hew York Stock Exchange (Associate) York Curb Exchange Sxin Praneif" s*nck Exchange Chicago Board of Trade New York 5, N. Y. 14 Wall Street Teletype NY 1-928 COrtlandt 7-4150 Private Wires to Principal Offices . San Francisco Monterey — — Santa Barbara Oakland — — Sovietisation—Endel Northern Publications, 29 Ashburn Place, Members flew Kareda Sacramento Fresno London, S.W. 7, Lithuanian American Information Center, 233 Broad¬ England or New York 7, N. Y.—4 shil¬ lings net (80tf). way, Federal Reserve Its Purposes Board eral of System, The— and Governors Reserve System, 25, D. C.—fabrikoid. Functions— of the modern good rea¬ were some this. for the first place, In building design and mod¬ construction methods stemmed ern from the development of reinforced the of invention and steel and construction concrete ele¬ safety These innovations had vator. no In the second place, wide¬ spread opportunities for large- ings. developments small-house scale with the recent great move¬ came population to urban cen¬ ters and the growth of urban into metropolitan communtiies. ... •r The housing market is not na¬ tional;: it consists of a large num¬ ber of local markets. Today in a number markets local of large enough to sustain very large smallhouse operations, homebuilders - progressive all using are the During the war such countries as Great Britain, Russia and France sent official commissions of archi¬ niques, including the setting up of plants for prefabrication at the site. In • such operations large- engineers and builders to country to find out how our construction industry functions. production of building sites erection of houses go together, under a single man¬ agement which can sell the com¬ tects, this time, American builders, American building tech¬ niques and American building this At present in are demand all over world. the frequent criticsm of the American construction indus¬ The most the whole construction tech¬ scale and large-scale plete product ready for use.; It is belief that this is the practical my development of prefabrication; it is succeeding today, when factory and is inter¬ other, kinds erf economy with related all business activity. nificance of The unique sig¬ construction new tivity is that it ac¬ the measures ex¬ to which the economy and people are creating new fa¬ cilities; it is a physical and tan¬ gible expression of their faith in tent the expanding future. an In ready application to small build¬ most advanced in total 1947 construction new United the States amounted, according to Commerce Deoartestimates, to $12,878,000,000. about 5 lk % of the gross ment This was national product. ; Private con¬ amounting to an esti¬ mated $9,878,000,000, represented just under a third of total private investment;' public construction was an estimated $3 billion in a $28 billion total of goverhmental purchases of;gbods and services. New construction directly em¬ ployed 2.9% of the total civilian labor forcer'• Probably 7 to 7M>% struction, of total the civilian labor force employed in new construc¬ tion, repairs and maintenance and production and \ distribution of materials and* equipment. Con-'' were . structioncontributes heavily to business and employment volume. Its activity is measure a of eco¬ nomic health and prosperity. But it takes a forward surge of all our important economic activities to of packaged houses generate national prosperity. even with government subsidies, Headed for Great Economic is limping along at a very unsat¬ Expansion production . try is that it is not like the auto¬ motive industry. I contend that couldn't the and varied things it is many called upon to do. ] The automotive industry makes m^tor., vehicles, senger cars, principally pas¬ trailers. and trucks r the construction It builds sales-rooms the public and the service stations, the builds the hardhighways, the scenic and the bridges over nrivate garages. It surfaced oarkways, which automobiles travel. the these II other things. It builds passenger and freight terminals and airports. II builds hotels and apartment build-* ings and houses. It lays down water mains and sewers. In nearly every one of these many cate¬ gories each structure is designed makes some and many special set of needs tailored custom to fit a par¬ isfactory rate. : ; I am firmly convinced that this result of the devel¬ country is headed in the direction opment of huge metropolitan mar¬ of great economic expansion, per¬ kets for houses, partly from the haps greater /than this or any home-financing reforms of the other country has ever known. 1930's. partly from the large-scale That will mean larger construc¬ war housing projects ,there has tion volume than we ever had been developed in this country a before. When I speak of economic full-fledged home-building indus¬ expansion I mean something that try, which will soon match the goes measurably beyond a mere competence and the techniques of catching up with deferred de¬ the master builders of large struc¬ mands; even that will probably tures. Even during the current take another Partly . * as a in progress The houses. after come stabilized, stops after cutting the cost o* real progress will prices and wages are after the government demand, real competition is restored. inflating housmg Reducing Progress in Housing when Even made have progress I which the Costs builders substantial home further in reducing housing costs, am confident they will called upon to create facilities will not be able to This is industry for transportation, com¬ merce. education, recreation and the 24-bour-a-day living require¬ ments of 140 million people, whose demands are greater and whose standards are higher than those of any other country. ict below do not share the fear held by I people that there must be a some depression after deferred demands have been taken care of. It didn't that happen War mands after way World Deferred construction de¬ I. were met the end of by 1924; instead of a depression, the five years had the largest construction volume and the greatest industrial prosperity the country had ever known. It was the era characterized princi¬ succeeding production, site. couple of years. number of these inflation period a home-builders have made notable do, they will probably not be able to build new houses for families in the lowest income groups. Thev ticular Fed¬ Washington fairly are obvious widely publicized. ... and widely abuses which criticized sell their prod- cost any more than any pally by great expansion of the automotive industry and the many industries allied to it. The o expansion we exnect is probable, critical year; will vi¬ This year 1943 is the -Jp'-isiops p->ade have reason not certain. ' only partly of the industry's making. This industry is the servant of the are . American economy, not its boss. It is obliged to operate under conditions, which are frequently imposed by law and which are frequently unduly restrictive. It is sufficient munities anti-trust of to mention labor the unions prosecution, im¬ from licensing laws and laws restricting or regu¬ lating bidding practices, and local bidding practices. these outmoded restrictive trade In addition to laws are practices costs are in private men this yean entitled to new housing unstable is because too many the vast things are out of balance. In the present picture there is majority of self-supporting fami¬ too much government spending, lies occupy used housing accom¬ most are other public expense when at . Construction Abuses Those Economic East and West—Facts from Be¬ Schwabacher & Co. There tures. get their own methods, up to date. David Durand and Willis J. Winn of Economic and how to know-how struction Their Measurement and Pattern— —National Orders Executed orists, uplifters and magazine Writers, the rest of the world has been coming to us in order to learn all it could about our con¬ faults Basic Yields of Bonds 1926-1947; \ of erection to people it employs, industry is im¬ portant, but it is only one of a number of important activities. Its well-being is definitely de¬ pendent upon the well-being of* construction business can: they should not be expected to. tally affect the future trends of the economy, the immediate Tf the price of a new six-room trends and the long-range trends. house were cut to half of today's Our present industrial and bus¬ "irice. there would be some fami¬ iness prosperity and our present In soite of all its achievements, lies who could not afford to buy our nrivate enterprise economy diem. The problem of families of rising construction trend are in ;s not without faults or shortcom- low income is not a housing prob- part soundly baseid upon produc¬ tion to meet legitimate needs. But mgs. It operates on a trial and !em, but a poverty problem, to be error basis; it is a continuous ex¬ treated as relief. Furthermore many current activities are overstimulated by monetary and price periment. The same is true of the notion that all the people who Our present prosperity the construction industry, whose cannot meet their own housing inflation. some there would be little in was being stigmatized as backward and incompetent by our own the¬ and Chronicle) Financial know-how ment of industry construction to meet warned I (See, time. other Morton Seidel Adds (Special . During these recent years, while our made. Stanley W. — & Dummer World Model plants where the automobiles are Chronicle) Financial thinking of getting out, the question of how far up is at With Keenan & Clarey, Inc. (Special to The Financial Chronicle) best a debatable subject. The important question is will they go down from here and any Industry Construction a But what does Holley, (Special are unless you're fact With in industry make? It makes the parts factories and the assembling Dayton & Gernon likely isn't important at this How far up , % # v counterpart its American < umn, nothing to write home about. and possibly be like the automotive industry if it is to do this is are conveniences country. it So, as With E. F. Hutton & Co. (Special to The Financial Chronicle) being written, readers LOS ANGELES, CALIF.—E. F. long a baker's dozen of Hutton & Co., 623 South Spring into the for sons products Whyte expressed -in views [The 12 12 22 -14 -16 -24 13 Lockheed industry has being slower applying its modern assembly- in highway system in all history, the best schools, hospitals and institutional buildings in the national other -39 37 19^2-20^ 18 Anaconda 311/^-321/4 29 simple. I'm in the hot sun in Avco 4 - 4Yi ZV'2, Florida getting some of that Bethlehem Steel 30 -31 28 chill out of my bones. Okay, Boeing 21 -22 20 29 -30 28 now to get back to the mar¬ Briggs Caterpillar Tractor 54 -55 53 ket. Consol Vultee 12 -13 11 s<5 * * Douglas 50 -52 48 When I gave you a list of Dresser Industries- 21 -22 20 you're interested in what If construction criticized been single-family houses than to other building and engineering struc¬ — these The Industry number of the in other sectors of the economy. Ifne whole. a they have their counterparts the ress; Among the things the construc¬ tion industry has produced for the American people are the finest than things happening around me Up to this writing I see things having nothing to little to indicate anything but do with the stock market — a retention of all positions. for me to waste a lot of words These are: on action and counteraction. Bought— Stop Thursday, February 19, 1948 FINANCIAL CHRONICLE: & some modations is a rather queer one. Solving the problem of poverty s one of the things the construc¬ industry cannot do. Another thing it cannot do is to rp^ulate the. American economy. This is tion not push-button economy; it is an assembly line with a hop- oer at not 1 i one end into which invest¬ to be auto¬ into prosper¬ it would be the ment money is poured matically processed ity. If it were setup for government plan¬ ners. Being diverse and flexible it is always possible for many ideal In terms of the volume of ness v . ; busi¬ transactions it generates and taxation much the of wrong kind,- too much inflation of hous¬ ing demand, too much wage boost¬ ing without * corresponding in¬ crease in production, too much speculation construction and in commodities like and fuel materials automobiles, too much reli¬ government for things the ance on Deople should do for too eral ices themselves, much reliance upon the fed¬ government for public serv¬ that states and properly belong to the the local governments. We have too per thmgs to hapnen. that limit competition and block prog¬ a too man little productivity hour of labor, too ro^netHion (which little incentive to means little too cost reduction), Volume top a 167 Number 4674 little patience THE COMMERCIAL the part of on .buying public unwilling to. wait until shortages are1 ' caught up with, too little incentive to long¬ -term investment, ; too /little risk capital, too little faith in ourselves and our capacity to lick J lems with horse prob- our and sense hard work. Must Corrected These imbalances must be cor¬ rected and monetary and price inflation must these sooner better. A checked... The things happen recession in the business and construction activity this year, accompanying a stabilization of commodity prices and construc¬ . tion costs, could probably restore adequate balance with only an moderate declines production, , volume • in of the boom year 1948 drastic more 1949. Con¬ present quite possibly make • would necessary a correction in Recent trends in commodity markets and recent price reduc¬ tions in certain lines of consumer , Estimates 1 •<" : < • long Anticipating ■such the downturn a) time of this year, F. W. Dodge Corp. has estimated the moderate increase of 7% in dollar and volume of building engineering contracts, pared with 1947. ity based as com¬ is ment. • ' that ume pate by a very ^ '• anticipate, we calendar for the all Important except manufacturing buildings; for that classification for expect we mod¬ a struction volume 80th con¬ the 1948 as eco- that will be made by Congress and that will the made be Will as the decisions by the voters ,. : in November. cial they be reduced in such ways to restore inducements to long¬ -term investment?: Will govern¬ spending be reduced? Will ; Congress say thumbs down on ment proposed social welfare urograms that are properly within the sphere • i of " state and Will • or been - local responsibility? Congress sort out of the 30 more risks, terms housing bills that have introduced enact and measures neither as only unduly inflate - / housing demand nor unhamstring the construction duly industry? ' Will f three any ' • v of one the uplifters, manage to make a sound and realistic appraisal of the contialities? rewards, in If Progressive Force a will you like bear economic another factor There I me, discuss to life. particularly with in has our been, the last 15 years, deliberate effort to discredit the a over whole process of speculation. Now, the people who attempt to under¬ line the business of speculation either uninformed purposeful enemies of of life. way nation is to As you all know, which made what it I stress vital. it is to this fact We keep shall, in industry and its poten'I ' ' - that course, measures I frankly be¬ have gone possibly we too far in the way of restrictions, and this situation needs to be cor¬ '•: 'i rected? '• r. . • • We cannot live without free nation a as speculation. by That point great many of a political our figures, including in the highest places. Spec¬ some ulation enters into all of our ac¬ tivities in this country. You cannot look out from your offices without seeing speculation going on all around you. It is the essence of American way of life. of your business our Every element tions here in Atlanta speculation. upon not course, opera¬ depends These thoughts of people. new informed Taody of are, to an I am giving emphasis to them for the that so many people today forgetting the conditions and reason are the forces and progress/ We fact under cannot that through that ,: it this /• lose last sight the of use live of the expansion, capital, enterprises, • tion industry under tight governmental control. It was a program could not have we General war. veloped, with the bearers. Mo¬ of riskis common-place in¬ It formation money that these companies, including General Electric, West- in OPA. It failed in its avowed object of getpeople inghouse cause , houses cheaply; nounced 1 ? it built failed quickly in its and unan¬ of maintaining controls over the free enterprise economy. Are we going to permit that sort of thing to be done again? I assure you that nationalization of housing is the entering wedge purpose for nationalization dustry generally. I urge you businessmen interested in the vival • every of dustry as sur- free enterprise to scan proposal for housing- legis- lation with the utmost The in¬ of American serves care.. construction ing the whole economy say last to of the risKS. take the States funds of were will¬ Without, this risk-bearing, I venture that would have we We war. trend to cannot in set that development of enterprise in lost this permit will this to a retard kind of this country. In¬ stead of apologizing for and at¬ tempting to defend speculation, should be out proudly encour¬ aging it as a necessary force in the further development of this we country. We I in¬ use United American citizens who • ting Electric, of the kind of Need happen. creating wealth. lation, we shall a Dynamic Atmosphere standard speculation means of of specu¬ inevitably stag¬ dy¬ namic economy can operate only in a friendly atmosphere. Unfor¬ tunately, such the do we an not have atmosphere. political- of wealth vancement of today refer which of and will the of crea¬ the ad¬ cultural our to to perform us profitably, in terms tion I climate make it possible for life. The impulses that bring about the favorable atmosphere of which I speak must people. opinions originate The with impact of will enforce public officials. our ■ ' ' ' '■ •» the their action ' by ' / .. Today's Basic Need as our improving living and of sumers' Price Index (formerly the Cost of Living), excluding Rents, compared with Hourly Earnings in All Manufacturing. The relationship is not particu¬ larly close prior to 1933, for in be can the pre-depression period steadily inpreasing productivity of labor a generally declining index, the trend being interrupted only by sharp wage or salary increases. Be¬ tween 1933 and 1945, however, a good correlation developed be¬ resulted in consumers' price tween the consumers' price index and hourly earnings in manufac¬ turing with hourly earnings rising more steeply than the cost of liv¬ ing. Since 1945 productivity has held at about its 1941 level, but wages have risen sharply and prices of food and clothing have soared. A good part of the increase in prices of these two important items in the cost of living has been brought about by the lack of pro¬ ductive help and the consequent We have facing us. been tremendously handicapped by ineptitude in our policies. It observe that is gratifying measures are to being taken to correct this tax situation give deserved credit to our dis¬ I tinguished Secretary of the Treas¬ for the constructive position which he has taken with respect to necessary tax reforms. I am encouraged to believe that the constructive forces in our national ury . legislature will carry out of program a strong tax revision. This should not be long delayed. I hold the sincerest convictions that a reconstruction of our situation I is cannot overlook prosperity. the fact has led to greater than average proportionate wage increases in the low-wage industries/General¬ ly these have been cost-of-living industries. Consequently, despite earnings increases in hourly manufacturing all ly earnings based stantial tion above the regressions 1933-1945 old institutions, but who has the courage to express his convic¬ tions. I have reference, of course, to your esteemed Senator Walter F. George. see everywhere evi¬ dence of the fact that busy and productive industry is the product of venture capital. We see it par¬ ticularly here in Atlanta the consumers' price index in December stood at about 179% of the 1935-1939 average. The line value of hourly earnings corre¬ sponding to this cost of living is 244% of 1935-1939, above the 1947 or is about 14% average above the level of Sees No General Rule know of where than in better example, of the of venture capital a use this Originated particular by Mr. company. Candler, it out of speculation. You have many other companies here which developed out of the same incentives. I cannot grew urge upon too strongly the necessity for vigilant and aggressive defense you a of the last spirit which really, in the analysis, invigorates our en¬ terprises and make operate our successfully economy and pros¬ perously. grant such an increase without a substantial increase in prices and later in consumers' prices. labor cannot rea¬ sonably continue to seek to main¬ Furthermbre, tain is a rate of gain which prewar becoming World tiles demand for food is likely enough tween to that so some consumers' LOS The Street, geles Financial ANGELES, now Chronicle) CAlllF.—Gil¬ with strong spread be¬ prices and the artificially high regression is likely to persist despite anything that industry or labor line do can to raise hourly earnings. is, in fact, likely to remain nearly as large as in 1947 This if spread we to fulfill the aims of the are Marshall Plan because of the large amounts of foodstuffs, tex¬ tile fibers and textiles likely to be required. It is probable, how¬ that with increasing quan¬ ever, tities of agricultural spread about 10%. average 9% equipment reaching the farms, be can reduced This would increase wage to mean of an about the 1947 average figure, about 4% over the year-end over or figure. Such an increase in hourly earnings, in view of the defla¬ tionary effects of the Federal sur¬ plus and the dying out of the in¬ flationary conditions listed above would largely have to be absorbed by- industry without r price in¬ either as result of clos¬ a ing of inefficient high cost plants, unemployment and increased la¬ bor productivity or through an overall increase Steadily from new, make it the productivity. competition efficient plants will if not impos¬ the increased costs difficult, sible, to to pass consumer. primary a in increasing Consequently, consideration of all wage negotiations should be ways and means for increasing pro¬ ductivity. to Business Trends in Election Years Commenting on the business outlook for the current presidential election year, the "Business Bulletin" of the Cleveland Trust Co., just published, analyzes business activity in election years during last century and half, and concludes from its analysis that in such business usually moved in^ years accordance with the years, except that they have usu¬ ally the "In stage of the current business cycle. "There has been no general rule as to business trends in election moved in accordance with particular stage of the busi¬ as the shown activity average on has the Co., 458 South Spring members of the Los An- Exchange. He was previously with Merrill Lynch, Pierce, Fenner & Beane. election year, diagram, business been stable in the first two months and has then declined to July, the low point of the year. The trend thereafter has been reversed, and the curve has moved up steadily for the rest of the year. The index, for De¬ cember is slightly higher than for which January. all the "This average movement should pot be interpreted as having much practical value in judging business begins with 1790, includes presidential election years past except the first. Of the 39 election years represented in the series, business was above normal in 24 years and below normal in 15. In 20 cases, business activity was higher at the end of the year than at the beginning. In 18 years it was lower, and in one year it was unchanged. in the "While narily elections seem marked effect do have to on not ordi¬ had any business for the whole, there have been interesting variations in the trends in any particular election There have been many in¬ stances where individual years did not follow this pattern at all closely. It is possible, however, that in past election years there year. has been a cautious and hesitating sentiment in business for presidential proached, and the time as nominations a attitude ap¬ confident more have been made. month-to-month changes in busi¬ ness in all the election years com¬ after the nominations "Over the period for which data are available, stock prices in the years have followed a bined. These election trated by month-to-month Marache, shows & Stock tex¬ and remain old some to will-o-the-wisp. a year as a With Marache, Sims & Co. (Special unreason¬ Moreover, it will possible for industry to be very as developed so many ness cycle at the time," the "Busi¬ great enterprises, such as the ness Bulletin" reports. This bank's Coca-Cola Company. I do not long series on business activity, effective not about 20% hourly earnings in all manufacturing. It have you of period. that have in this State of Georgia stateman, who not only understands the problems of our us correla¬ line an able correlation. creases great Ail of sub¬ gains for labor. consumers' prices were 8% or The earlier showed relative 1947, about the on correlations" which In in you a sent continuation of labor. repre¬ tax urgently necessary if to have further we are frequently demanded by However, this level would the Also, the practice of measuring wage increases in cents per hour instead of in percentages consumers' prices have advanced to levels far out of line with hour¬ the problem 1947. This last represents the increase which will be most average level. all This is end of and fertilizers substantial today is the re¬ incompetent hands from streams of decent business hourly earnings prevailing at the need to bid wages up towards the The basic need moval of Sims defend Without nate. We need in this country, above everything else, a dynamic economy. Under no other system can we make progress. A bert L. Reed is fundamental ,our (Continued from page 10) is permanently the rules of the game decide that the game is over. hope neither of these things will i became large and productive be¬ by Construction Wage Increases Be whole free ;; risk those us without which won we : was the gave which ./ Steel, Bethlehem Steel and others devised the tax ' Program, which put the construc- ' not because of effect prevent abuses. lieve Ameri¬ our today. It speculation which will what it is to be in the be future. it are speculation was make they or In 1946, we had what was called the Veteran's Emergency Housing • r their and leading Republican struction . . - inter¬ some candif tors, the A. O. Smith Corpora¬ dates, all of whom appear to have tion/Douglas Aircraft, the Glenn adopted one or another of the Martin Company and too many panacea programs offered by the other companies to mention de¬ '• ' be equip¬ of Speculation ' such design, profits, are not large. They have no advantages over the public in their activities./ ' ■ . federal taxes be reduced? Will construction is overlooked nomic trends will be the political decisions made this year—the de¬ cisions in construction of erate decline this year. Just as critical for future • our There may need antici- we increases year classes • completion from Within the moderate moderate of 35 Passed to Consumer? the (Continued from page 6) will increase in contract ..voir .over-all society. for private-en¬ Capital Marts in Danger: Boylan it for over starts. terprise its Commodities Peak Reached But this , carried outlook or A mod¬ supplemented the is United States and I midyear large volume of continuing work 1947 living and community industry materials and construction around current contract vol¬ on by sound The outlook for the construction r (831) Can Further celeration. construction methods, construction Construction activ¬ likely. seems As ruptions to the forward move¬ ment; progress and expansion do not go forward with uniform ac¬ yet been firmly established, a good show, but it is a guess would place the average in¬ uniquely important member of crease oven the 1947 level at the about private-enterprise team. It 8%. A statistical answer will be there can/how¬ pitching until the construction activity and American ever, also be obtained. The Con¬ people decide to change progress quarter. downturn bar CHRONICLE are of umes can erate a people, as long adequate incentives to initiative and long-term in¬ vestment, -there will be large vol¬ there are into the second crea¬ health;; economic the means Contract volume ume of the urge to further raise is likely to / run very heavy through the first quarter, possibly - a there is freedom, as long as there is capacity to expand the economy/ as long as there is highly "-important possibility some is as should 7% Increase Building ' in ' rometer goods may be signals that the turn in price trends is not far off. • It FINANCIAL contract employment. through the entire much industrial construction and tinuation '• , be well. tor of economic*wealth and as Be it serves standards Imbalances f and & ments and the of business below level. changes are illus¬ the diagram, which average of the move¬ The the activity normal or above 100% course, the on average, somewhat similar to that of business. The low for both has been in the middle diagram covers the election years from 1792 to 1944 while inclusive. high for both." December has of the year, marked the 36 FINANCIAL & THE COMMERCIAL (832) CHRONICLE system of Free Enterprise. beyond the question itself and the only reasons why such a question could be asked would be a growing belief by ' some people, fostered by cleverly writ¬ can Some Basic Foods—For Thought that so prices nothing found attract. In to # present position, we are our much closer to conditions in is still because there 1920 great un¬ satisfied demand for homes, auto¬ repeat it, I should like to see gov¬ ernment get out of business as quickly as is practicable and and stay of out in¬ it definitely. have has third a round Whether mands. but a of de¬ wage .,. gain will be taken from you. The ten All individuals who have to pay carded following are some of the first steps that might be taken: an income tax to the Federal gov¬ be placed on the privilege of dividing income accumulating for a good prove to be the breaking point tax between husband and wife in These demands must in our price spiral remains to be the manner that is now practised be fulfilled. We may have a short seen. However, the better we un¬ only in community property period of recession* later in 1948 derstand the economic factors per¬ states. or in 1949, but it will not be of taining to a question, the better Elminate the double taxation long duration but will represent a will be our chances of making of dividends, where the dividend buyers' resentment against high the right decisions on it. prices which, when adjusted to disbursing company pays a tax on Whether we like it or not we the dividends arouse the demand for goods, will first, and the indi¬ again result in normal and profit¬ are already in an inflationary vidual is taxed once more when he able business on a much more period. receives them. If a company is been many years. basis stable day. a sure it to¬ know we , ■ v ; I agree . . made with The constantly ■ ■ that 1948 will year of decisions but be that the right decisons are Yes be than good judgment. We no increasing wages and other costs of doing business will result in losses to many small profit businesses unless they pass the increases along to the public intead In longer can afford to guess. of profits Wage Price Controls the next few months, going to hear a lot about the necessity of price and wage controls, rationing, how much aid we should give to other nations, are effect what and our own will it have on and whether or economy be reduced, and if much. All of these questions are very closely related to one another, and decisions con¬ not taxes can by how so, cerning them will affect the wel¬ fare of our each of standard living, of and distributor High prices are not the cause of They are the result. And prices are high today. In the near future, it is even possible commodities which some we still higher in price, but there is only one direc¬ tion in which prices will eventu¬ ally go, and that is downward. You all are about are numer¬ a new price control program will correct our present inflated position, nor even towards contribute in return to a small normal knew it before the a economy as we a war. The is both difficult and grave from the wholesaler's standpoint. There are a great many technical difficulties in¬ volved in setting up price controls in a field as large as the food in¬ dustry. The difficulty of adminis¬ tering controls in an industry problem which includes six millon growers, fifty thousand and the best distributors plex. is along. Prices high rapidly since 1941. wages have Wages risen not as nor increases these but must pass them longer, any all aborb cannot as definte cost factor are a very which directly for accounts a great part of the costs of distri¬ bution and services. Unless wage increases are compensated by in¬ production which will re¬ creased duce the accumulated costs by at least the amount of the increase, both costs and prices will scili go higher. earnings later disbursed as divi¬ it is eminently unfair tr impose another tax taxed It food processors, part of 600 thousand all of has kinds is com¬ been emphasized that it is extremely difficult to confine price controls to only one field of our food economy, such as growers and retailers; it must be made to way the individual desirable. been reduced from brackets, vidual his of and that so some cover all of our case. kept posted by the thinking men of the area he rep¬ resents. One of the outstanding things on which he should be kept posted is the subject of taxes. We have at grees from excessive believe that at along some the with relief can time same Since the because inventory. Some form of tax mor¬ atorium, varying de¬ taxes, and I many others be given, and reduce productive and through increased oroduction combat the problem of inflation This is important seems to be an rates. to steer tions. some creasing the shortage of supplies. now if price control a to be set up, program I doubt our na¬ to as would business impetus Get Government Out of Business firmly believe that it a not a provide to combat only but "shot the give the in the necessary in will anv prob¬ individual There too many people are lis¬ tening to, and reading about, the wonderful advantages of and do standpoint, I believe any efforts to increase our present corporate tax burdens will simply be another step toward killing the goose that lays the aolden eggs of Federal revenues. Great savings can be accomplished practical that if the Federal and other business that the and in this man Socialism of adherents nation, Communism have been mak¬ ing inroads into our system and doctrines. lack American and Communism, and ignoranth line up of foreign "ism" a coated with the long so label it is as seems very difference between ism and Communism understand it. Thev ownership instead ownership and both their free tive. hatred of Social¬ I as and see natura1 are of private buddies ir are caoitah'sm individuals organizations are and national debt. enterprise, and the profit mo¬ They differ only in their degree hatred of used toward tives, but sociah'sm the and means attaining their objec¬ there is is to tha doubt no closer communism than to capitalism. The free terms of enterprise is It attention to and well. democracy are accident no and synonymous that free our socialized or stalled, personal income tax load has jumped higher than 610% since 1929. There is no doubt that this is a prime target to be¬ gin with in reducing prices and costs. being financial¬ record feet, Dec. again of set a Fink, its for the high new 57,286,150,000 percentage a in¬ revenue cubic increase of The number of customers by the company reached 626,317 in the eight operating dis¬ tricts of Detroit, Grand Rapids, Muskegon, Ann Arbor, Mt. Pleas¬ ant, Ludington, Greenville-Belding and Big Rapids. * ' • General Motors Corp. produced 168,968 the trucks and cars United in States and Canada month the during of January, as com¬ 194,476 units in the preceding month and 123,152 units with pared the and corresponding Of the total in 130,071 year, 38,897 month in January, this were passengers cars trucks. were * We the in a freedom # 4s short time ago,; I was asVed give my opinion of Free En¬ terprise and the possibilities of its to Co., Detroit, announced the declaration of dividend No. 41 in¬ creasing the payment from 25 cents to 35 cents per share, for the first quarter, payable March 10, next, Feb. to stockholders of' record 20, 1948. if if if For the year ended Oct. 31, 1947, Divco Corp., Detroit, reports that net-earnings after all charges, including provision for Federal taxes, were $1,315,259, equal to $3.41 per share on 450,000 shares of common stock outstanding. This compares $2.12 of with net of $954,138, or on a like number share per shares, for the preceding From has United States year. of individual to hold an amuse himself as he dis¬ open fit. sees are jealously guarded rights. If there is any other country in the world is that happier, a envied nation please tell a better, than about me more our it. own. Ours is nation of unlimited freedom of¬ itiative, enterprise and wisdom she should guarantee no so¬ cial p security for laziness, incomet-ence. and failure. Our free of life has been rugged, and extremely painful at times, but there is doubt that it has paid no biggest dividends on the face the earth. (Continued from page 7) teresting to the GI's who ting eral Experience With Jersey wishers during in our the own past And ten government or twelve recently we've all enjoyed the planned control o' OPA which clung tenaciously to its authorities and agencies and. years. more while its power grew to tremend¬ ous proportions, was nevertheless communistic control. short of am in favor of keep¬ ing and maintaining Republic which our American guarantees the freedoms to every individual, and had organization of met in solemn conclave and decided that Hawkes not was liberal enough it and would have to be another man, is that man a few days later, that for reasons that were clearly ap¬ parent, had to withdraw from the campaign. . Whereupon the Republican or-1 ganization, having missed up on this "liberal," set about looking for another "liberal." quite clear that It should be the Republican organization in New Jersey doesn't know what most economic get¬ a Republican New lightful Planners experiences with "planners" and wellour $100 are month to go to these schools on "public instruc¬ tion," is that after the great lib¬ some In the We've had Washington Ahead of the News have working Constitution and BiF Rights, under which the rights Gentlemen, I Will Free Enterprise Work? ing been sacrificed. far A business 1947 system has been in¬ individual to much our in¬ according to Woolfolk, Chairman of the company, and Henry President. Sales of gas dent that where any collectivized can help. Everybody has been complaining about the high prices of food, and since 1929 food prices have gone uo 153%. How¬ ever, net ended year operating $6,218,074, William G. enterprise developed along with free republic, nor is it any acci¬ your They the the Consolidated a of your- its creased and the as the meet V faster problems in Michigan Ameri¬ of is give of that 1947. way tax and gas to 31, 1947, of $322,750 under the previous year, in spite of the fact in and industry objectives and aimi and all of the If the government were run economically as possible, these savings would contribute to a Please reduction a Co. for hous'ng, education sary. our Gas in droves to voice theii acceptance of socialized medicine And of in come # understanding i clearly evident on the part o. many people who openly de¬ nounce the thought of Social'sn and activities, expenditures immediately neces¬ reduction sufficient gas needs record-breaking demand result¬ ed of excessive personnel and postpone all not natural served fering unlimited rewards for in¬ are added to £ customers' 24.5%. State govern¬ ments will eliminate all of their that a "ism-' except Americanism. I fully realize as well as almost every tax But from vote. of its every cussion, work, loaf, eat, sleep and can Lack for year uals a present our inflationary tendencies. Both production, enterprise, and inven¬ tiveness, then I'll be glad to say let's try it. of a for laws taxpayer arm," and I benefit individual every enough to be of much help. tax our to years, and I believe progressive measures taken very quickly a us many ation enforced good as to urge congressmen to some much if it could be put into oper¬ and be for each of inequities in great in standpoint, it is a good political move because cor¬ porations cannot vote and individ¬ numerous distributor some From their There have been and that increase in corpo¬ reduction be of from those items which are unprofitable, thus still further in¬ us because there doubt no representatives Washington organiza¬ well giving all of much concern. so business as is that these to seems any give taxes burdened enable these tax congressmen away of abatement or relief to indivduals give con¬ rising will production at all levels, and cause the farmer, processor, manufac¬ the of inventory costs, many are now in the precarious position of needing more capital funds to carry a normal prewar stantly modified and revised tax law that stifle own, bed-fellows who believe in public conditions, to be << • The directors of Pfeiffer Brew¬ excess Government Now our as suffered all equal can Fundamentally, there profits taxes return to peacetime high able not me world that of firms to increase their position to act for his constituents own show efforts, affairs, and to express their views freely and convincingly to their representa¬ tives at local, state and national levels. No representative is in a enjoyed througl democracy? If you can one single country in the little millions of workers in in government 'have we During the war years, many corporate organizations were un¬ able to set up reserves because rate tax rates to offset is nation, in any part of the world, has ever produced the re¬ our # cost of manufactured any sults the balance working capital. dis¬ other But what other system has ever What successful system n (Continued from page 11) and Ameri¬ be some canism. I believe it is important for all business men to take an active in¬ he taken /" respective serious consideration could be would income our controls than half more no from him for taxes in any away as And their wartime limita¬ tion should be placed on the max¬ imum taxes payable by an indi¬ high time were would certainly be rates have not recommend if rates to These organizations, government and industrial em¬ ployees, school- teachers, and other white collar workers, whose wages have not kept pace with the times and who will be pain¬ fully hurt if any additional at¬ tempt to push up our present high terest be of favor worked? A reduction in tax Some adequate without wage controls, rationing, subsidy and allocation— to mention only a few that would be necessary to do a good job. Even dividends the other, but or service are and same not both. tional debt. turer the Let one In addition, any price controls would be completely in¬ industry. this on in the hands of the indi¬ money vidual. would There trade its of in our should democracy system. More Capital Funds Needed not only income, but are they part industrial as Costs as that on prices still further is successful. against I do not believe that will it he sure without loss. This means, of course, that we are a part of the spiral, but many of us have reached the point where we govern¬ price controls, and the argu¬ ments for and ous. the with familiar agitation current ment rise may make to taxed dends, mut our inflation. handle a it dandling Wages that this is not be over¬ looked, and a study of each item must be made by each individual jobs. way which incomes, us—our low, very are danger During we trying to absorb them. of business, where line our be to propaganda, that can the basis, and the Revenue Act should be revised so as to extend same not this will or Michigan Brevities It goes small portion of such very ernment should It is obvious that industry is to innu¬ that commodities merable I have said this before and I will feasible, a mobiles, capital goods and and real keen competition. mand (Continued from page 12) Thursday, February 19, 1948 "liberal" is. a meantime* Hawkes, a de¬ fellow, and one of our able citizens, is making a speech. He is trying to tell that regardless of what is being done to him by the "liberal" Republican organization of New Jersey, in¬ cluding those "liberal" South Jer¬ leaders, sey hatred more that than he holds no night or a day against any man—well, in a mo¬ ment of flippancy, there's one ex¬ a ception and he said, rather whim¬ sically: "That man lies buried in Hyde Park." This the has apparently incensed "liberals," including the "lib¬ would not accomplish as much as ly squeezed by tax laws that stifle concept^ and ideals being widely I if initiative accepted world-wise, "ism" regardless of its name, which cluding the South Jersey Repub¬ would the lican our friends we were ate under a to continue free conomy to oper¬ and let prices and wages seek their levels through our own fundamental or of prohibit expansion progressiveness through capital, because there is centive to economic laws of supply and de¬ gain and work when it is for a lack no in¬ reasonable realized that all or discarded in favor of some other system. an It's extremely sad state of affairs when it becomes necessary to say anything in defense of our Ameri¬ am unalterably opposed to act freedoms to we present form deprive enjoy us of under any of American enter¬ prise and. American government. eral" Republicans leaders gave few years ago. incense me. to and whom plenty of also in¬ Hawkes' money a Somehow, it doesn't On > Volume 167 4674 Number THE COMMERCIAL & CHRONICLE FINANCIAL # Indications of Current Business t m (833) Activity The following statistical tabulations cover production and other figures for the latest week or month available (dates shown in first column are either for the week or month ended on that date, or, in cases of quotations, are as of that date): Latest AMERICAN IRON AND STEEL Indicated steel operations INSTITUTE: .Feb. 22 Week 92.5 Year Month Previous Week (percent of capacity). Equivalent .to— Steel ingots and castings produced AMERICAN PETROLEUM Crude runs to 1,667,300 1,646,700 1,732,200 1,670,900 5,313,137 4,770,250 GINEERING 5,434,000 5,289,000 4,788,000 15,986,000 16,289,000 14,684,000 2,468,000 2,561,000 2,290,000 2,422,000 7,870,000 7,690,000 7,471,000 5,159,000 fuel oil output (bbls.) a Feb. Stocks at refineries, at bulk terminals, in transit and in pipe lines— Finished and unfinished gasoline (bbls.) at Feb. Kerosine (bbls.) at Feb. 9,154,000 9,141,000 8,776,000 output (bbls.) Residual • Total 8,413,000 fuel oil Gas oil . and Residual 105,100,000 ASSOCIATION OF (bbls.) *102,988,000 99,759,000 96,698,000 11,119,000 "11,719,000 14,536,000 (bbls.) 38,538,000 "40,607,000 46,785,000 44,867,000 50,257,000 50,839,000 51,935,000 46,701,000 Feb. 747,394 727,038 831,447 AMERICAN U. Public 668,783 629,970 675,434 669,300 COMMERCIAL ENGINEERING RECORD: ("Total CONSTRUCTION, - .%>. ,, ENGINEERING (short Unfilled orders All NEWS and Z $54,778,000 66,640,000 32,201,000 57,173,000 51,033,000 21,212,000 33,185,000 21,737,000 32,615,000 17,146,000 32,030,000 35,436,000 18,468,000 4,066,000 Feb. 12 151,055,080 144,347,000 86,670,000 107,867,000 43,188,000 OF 103,740 INDEX FOR IN CITIES 167.0 164.9 15323 206.9 202.7 185:9 170.5 167.9 o 227.3 227.0 ' 204.9 198.4 236.1 224.7 — products___l— bakery :_4 -_tJ - products—v- Fruits i. —: vegetables—-—-d—_ and Beverages 726,733 15: —— and 108,112 593,838 MODERATE LARGE December of 123,830 585,818 (short tons) foods Eggs 33,566,000 65,215,000 Feb. 12 ~r.~ z , 68,319,000 Feb. 12 _ municipal— Federal $83,284,000 Feb. 12 : construction State $123,813,000 $430,970,000 279,915,080 ; FAMILIES Dairy $133,534,000 272,367,000 November: of tons) end of month at PRICE Cereals .—Feb. 12 (DEPT. items y Private construction — - 231,017,000 178,259,000 FORGINGS 1935-1 !)H9=100—As Meats '* U. S. construction Public STEEL COMMERCE)—Month Shipments All CIVIL 207,529,000 234,426,000 — _1 Municipal—-: INCOME of cars) of 56,167,000 and CONSUMERS RAILROADS: Revenue freight loaded (number of cars) Revenue freight ree'd from connections (number $503,384,000 46.3S0 EN¬ — RECORD—Month Construction.: S. Construction State 767,301 Feb. at at 31,876 $441,955,000 CONSTRUCTION NEWS Private Construction 13,441,000 Feb. Feb. distillate fuel oil fuel oil 43,959 19,650 Federal - *. 43,461 November) January: 15,476,000 and distillate of (end ENGINEERING 5,318,237 Feb. oil aluminum 5,348,000 Feb. Gas of 5,332,575 Feb. Kerosine output (bbls.) Ago S. — Stocks CIVIL (bbls.) Year Month MINES): OF Production of primary aluminum in the U. —Month of November Feb. (bbls.) average (BUREAU Feb. (bbls. of 42 gallons each) average stills—daily Gasoline output .Feb. 22 INSTITUTE: oil output—daily Crude (net tons). ALUMINUM Previous Month 94.1 96.1 92.7 Latest Ago Ago . 205.3 OUTPUT Bituminous , Beehive BUREAU cpai and Pennsylvania ^ (U. S. lignite anthracite OF 201.1 185iO 194.7 176,2 208.2 196.4 207/3 183.7 —i ——_— 183.2 Sugar and sweets—— 175.3 (tons) Feb. 11,525.000 "11,190,000 13,800,000 176.5 Feb. , 7 1,170.000 .1,107,000 1,100,000 1,107,000 7 130,000 "136,000 139,300 117,600 Other fuels DEPARTMENT VSTORE SALES SYSTEM—liWS-Si) t INDEX—FEDERAL AVERAGE=100.l'i«. ELECTRIC Electric' > INSTITUTE: output i(in.000 kwh.) ice——_.T ' Feb. — 240 7 233 219 251 COTTON LINTERS—DEPT. AND - AGE In ZZ. Feb. 14 AND INDUSTRIAL)—DUN 5,384,945 5,412,361 > consuming In 4,778,234 5,370,112 public storage KtC&ZZZtZ-ZZiZjiJL-U, COMPOSITE PRICES PRICES: (E. M. & Electrolytic copper— Domestic refinery ' Export Straits t Lead reiinery tin (New (New Lead 128 Feb. 12 : '<•' 97 62 61 c 1 3.18925c 2.87255c $40.17 $40.08 $30.15 $40.50, Feb. 10 $40.83 $40.58 $33.75 St. Average 21.200c 21.200c 19.325c 21.425c 21.525c 21.675c 94.000c 94.000c omitted) 70.000c 15.000c 15.000c 15.000c 13.000c .Feb. 11 14.800c 14.800c 14.800c 12.800c Feb. 11 12.000c 12.000c 10.50QC Feb. 11 ——- at— PRICES DAILY cr\ r 110.88 110.70 110.70 117.40 116.02 115.82 116.02 BOND Govt. 114.46 114.27 114.08 120.02 109.97 109.97 109.79 • - _ \•• YIELD DAILY 103.47 103.80 STORE SYSTEM Gold 105.17 105.00 112.37 112.56 112.56 118.40 114.85 114.66 115.04 (in (in Zinc 2.45 2.45 2.21 3.12 3.13 3.13 2.78 New 2.85 2.86 2.85 2.55 St. 2.93 2.94 2.95 2.65 Lead ^ . and 2.80 3.54 3.54 3.52 3.12 Silver, 3.43 3.44 3.45 3.01 Sterling 3.04 3.03 3.03 2.73 Feb. 17 - 2.91 2.92 2.90 2.61 , 282.G 323.4 210.1 252.1 266.8 239.9 220.8 220.8 216.0 158.5 173.4' 178.4 180.7 154.5 211.7 217.3 220.2 162.2 162.2 161.3 materials Z Feb. 14 233.5 "233.4 233.2 215.5 Feb. 14 155.1 "155.1 155.3 137.7 137.9 136.7 125.5 Farm '' All 142.9 "142.9 — - Feb. 14 or S. refined, (per 137.2 134.5 220.7 226.6 of Dec. DEPT.—^As 124.3 214.7 CIRCULATION IN 193.8 PLANTS U. IN — SALES ,, (tons) S. (AUTOMOBILE FACTURERS' ASSOCIATION) December; Number " - ..Feb. Production (tons) vr——T—-— Percehtage 'of "activity I .. PAINT AND 7 ; PRICE 222,730 - 7 " ..Feb. DRUG. REPORTER 7 * '* * 196,886 99 104 459,989 599,009 147.6 / 151.2 152.0 147.3 Feb. 13 motor of motor NEW. BUSINESS — — commodities Farm - .Feb. products -Feb. - 7 163.8 7 , " 195.5 >: - 163.7 164.5 141.7 195.1 197.0 and leather products—_____-x-— Textile products- Building .' - v 177.9 176.5 182.1 ? 198.0 201.2 200.3 172.9 7■ "* 147.0 145.8 145.8 137.7 131.4 131.2 130.0 98.6 154.2 154.1 ..Feb. J. 7 ^Feb. materials Chemicals «nd ,; ;r 7 ..Feb. Fuel :. 7 .Feb. I ___—2___ and lighting materials Metal and -rrtetal products— 7 ; * 152.8 f 156.7. 138.3 ..Feb. allied 192.1 191.3 189.7 170,6 7 134.3 139.3 139.0 127.6 .Feb. 7 137.7 137.5 ..Feb. 1 Miscellaneous 7 ..Feb. products—— Housefurnishings good? —; commodities— Raw 7 122.6 123.9 articles 136.7 122.1 123.0 110.0 AMER. / - : •Revised"Ufigure. ... $65,692 $1,750 $1,750 $1,500 $1,775 $1,775 $1,525 $1,800 $1,550 $1,800 - * $57,038 15.000c 15.000c 15.000c 20.500c 20.500c 20.500c 10.500c 10.500c $28,765,640 $28,952,496 I 394,176 ,375,735 366,879 305,148 266,681: 87,611 107,616 1,444 .1,417 1,498 10,126 *7,873 9Q(|i 631,150,228 $755,324,174 595,314,499 $637,653,600 549,833,199 78.17 78.82 468,704 expenses.. ratio—per — cent .... $80,843,092 Net Net railway operating income before charges income after charges (est.) TRAILER COACHES—HOUSING (DEPT. OF TYPES COMMERCE)—Month of Production (number of (number of (value of)_. of 58,000,000 '..6,083 5,847 $10,001,422 (DEPT. OF COMMERCE) of units)-'. 7 132.3 182.3 182.9 153.1 Shinments (number 7 156.6 157.3 158.4 141.3 Shipments (value in dollars) Feb. 7 156.7 156.5 157.3 137.5 7 15G.7 156.3 157.3 136.5 7 147.8 143.0 146.9 128.1 foods———Feb. •" - - " 5,567 5,512 $9,246,394 7,827 7,707 $13,236,706 — November: (number of units) Feb. — 86.23. $80,116,364 Cr$28,772,759 65,577.488 103,754,010 44,000,000 86,000,000 Nov.: units) TRUCK TRAILERS 80,022,688 ONLY uifits) Shipments Shipments . ROADS (ASSOC. of December: operating Operating $28,867,631 & revenues Feb. ——^ All . $66,000 RRS.)—Month Feb. commodities other than, farm products AH- cmfimuditifes other thanf farno products and ——— INCORPORATIONS—DUN operating Production s... Mahnfacfcuxed>products-2_ " 28.625c Nominal ^ J materials 2.1—— Semi-manufactured 33.500c Nominal $807,428,182 coaches EARNINGS—CLASS OF Month Special'groups— 28.250c 33.000c 33.000c 33.500c Nominal 100,381 cars.——. 165.5 Feb. Hides 29.59.1c MANU¬ trucks— Total (WHOLESALE..PRICES—U. S. DEPT. OF LABOR—1U26—100: All $88,000 36.030c , 36.082c Month of BRADSTREET, INC.—Month of December. RR. — passenger Total - $35.00 $79,000 $78,303 • of Number 181,017 103 ,477,216 • 177,964 of Number 202.189 185,437 * 432,911 100 — * 185,944 177i884 Tr averagr«I©O_,J-1—ZZ-, INDEX—J^C-ik; Feb. ..'Feb. "7 i TJnfij^ed ordera. (tpns),. a t™— yOIL, 69.1250 $35.00 FROM Total number of vehicles—1_——_—---r>— , 70.000c 84.156c $35.00 TREASURY (000's omitted) 31 FACTORY VEHICIJ: MOTOR NATIONAL PAPERBOARD ASSOCIATION: '-Orders -received" 85.385c 93.500c 11.077c St.* Louis East MONEY 133.6 137.2 Feb. 14 . »142.9 Feb. 14 machinery r.grdtfpa cotfibined__—_. . U. ounce per ounce—— pound) —————— JCadmium (per pound)————, SCadmium (per pound)-——_L————ii-Aluminum, 99'/® plus, ingot (per pound) — Magnesium, ingot (per pound)— Zinc (per pound)— 155.0 Feb. 14 (per 142.9 Feb. 14 ; Chinese York, tCadmium 215.3 Feb. 14 55.500c $4.02870 94.000c -——— 313.2 Fertilize^ ' — 337.8 . Fertilizer-, materials v.. Straits 318.3 238.3 45.000c $4.02750 pound)— York 300.6 256.4 76.500c 45.000c Plafinum, —Feb. 14 12.73T10 74.625c . $4.02679 "Cheeks"——- 218.1 ——rr———.—i————. —.——. n 12.931c 14.800c 74.625c ounce)——— per 15.000c 14.800c ounce)Pwr-^P— (pence Exchange, 19.270c 19.926c . 286.6 Chemjcals and drugs——Z'ZZ - v '* »* . 238.8 —Feb. 14 Bui'ming (per 21.200c 21.488c - . 300.5 —•——.—— , . —Feb. 14 Miscellaneous: commodities li—^ /Metals .* - 279.9 244.6 111,814,853 1147,149 21.200c 242.0 235.5 229.9 "48,332 21.532c 2C0.8 - "2,857,310 QUOTATIONS)— 231.5 COMMOD- 11125,296 1127,706 "30,618 January: 245.1 338.2 451.8 407.2 Feb. 14 * of Exchange:- York London (per New Gold 1150,296 "165,087 2,879,233 — Feb. 14 406.2 ——Feb. 17 —-1— Wvts tOCk M. J. & ". 30,567 47,790 ounces). month "63,266 70,361 157,639 , 99(/c — price).———— Quicksilver (per flash of 76 pounds) ; HAntimony (per pound) (E. & M. J.)—• Antimony (per pound) bulk, Laredo — Antimony (per pound), in cases, LaredoAntimony (per pound), Chinese, Spot— Feb. 14 '" Tin New Z&-- 209 in — tons)— (E. Silver,. New ' oils— 265 480 15.000c 3.18 produots Cotton : r b metals • 3.18 Feb. 14 Pats Farm "303 224 MINES)'-*" OF tons) Sterling Silver-and 3.17 ITY INDEX BY GROUPS—: ' . 283 —_ York Feb. 17 ASSOCIATION—WHOLESALE 362 —_ Feb. 14 NATIONAL* FERTILIZER 400 Average=J0») recoverable pound)— (per Feb. 17 INDEX-. 8,670,795 402 RE¬ Louis Feb. 17 — COMMODITY 9,530,000 (per .'.Feb. 17 , 1935-39 of fine for Average 2.45 - Feb. 17 Utilities MOODY'S 21,688,028 9,544,000 _ in place, Z— (FEDERAL (BUREAU short PRICES METAL Feb. 17 £ ^' SALES — short (in Silver 120.84 AVERAGES: Group— Industrials Group ! Z----Z-. 23,797,000 21,432,000 (000's 31 December: of 112.93 Feb. 17 I'-.'- Dec, pound)— Electrolytic, domestic refinery—— Electrolytic, export, refinery— — .* 23,730,000 21.412,000 Dec. 31-_ on on (in line ounces).— (in short tons).——— Copper . r 73r®6 21.691.0WO U.S. Lead Feb. 17 ^ 263,584. of January: OUTPUT Copper 110.88 105.34 .... Bonds. Group 79,497 . " 117.00 103.47 Feb. 17 Feb. 17 Group Average corporate Public 21,432,000 31— — production the 122.09 Feb. 17 " . ' SERVE Month Feb. 17 Industrials Group v — —Month 104.34 Feb. 17 Group Utilities Railroad 21,412,000 of Dec, as Adjusted for seasonal variation.— Without seasonal adjustment METAL 100.69 Feb. 17 S. 31———— 72,833 • 100.69 100.72 Feb. 17 Feb. 17 Railroad U. 176,527 71,522 5,984,417 98,948 215,506 spindle hours, December.—; spindle hours per spindle Mine _i . corporate MOODY'S 101,645 31 of Dec. as ^———-——: DEPARTMENT AVERAGES: 1. Feb. 17 ... ' December——_ of Dec. as 2,230,268 1,858,676 5,360,906 10.500c Feb. 11 —.1——. 21.200c Feb. 11 at at Bonds Storage spindles active Spinning spindles in place Spinning spindles active 20.425c 94.000c Feb. 11 - — Public 2,153,547 5,478,623 V- v. at Louis) BOND Govt. S. of Public December § MOODY'S Month consuming establishments 776,360 759,498 53,406 — of Dec. 31 Average QUOTATIONS): «.' i ■ York) York) (East J. ■ V'*U. 136.1 COM¬ COTTON SPINNING (DEPT. OF COMMERCE)— 3.18925c $40.17 3.18925c lo Feb! at (St. Louis)- at Zinc - 177,1 143.0 31—,—— as of Dec. as In Active . OF December. of establishment In BRAD- & „ METAL 136.3 188.9 BALES— Month Lint—Consumed ,'-'u Finished steel (per lb.) Pig iron'(per gross ton). Scrap steel (per gross ton)__ • 160.5 RESERVE Cotton IRON 92.0 162.0 . 115.5 92.5 ' (COMMERCIAL STREET, •.<•* _• 126.9 191.4 ....— _• „:— Linters—Consumed FAILURES >" 127.8 ———— — MERCE—RUNNING EDISON 115.2 144.4 and Housefurnishings Miscellaneous 190.2 ' 92.6 electricity and ice__— Gas and electricity.—„— Fuel, 12,300,000 Feb. ^ coke'(tons)_ 7 ' 115.4 MINES): (tons)ili. 200® 199.6 » 191.2 COAL 197*8 i . 198.5 ——.—— Fats, and oils 141.7 : '* 1. —— — 0 t nCo 3,266 4^605 $11,028,866 $11,952,284 a*d 7,449 3,962 4,232 7,263 . $15,897,637 , tBased on the producers' quotation. JBased on the average, of the producers' and platers' quotations. §Based on platers' quotations. . tDomestic, ^ live tons or more but less than carload lot, packed in cases, f.o.b. New -York. "Revised 4+1 jT^ntViUr figure. otroroca in 1 Q4fi_ I 38 Thursday, February 19, 1948 FINANCIAL CHRONICLE & COMMERCIAL, THE (834) be in close co-ordi¬ program must (Continued from page 11) against in $6,309,122 * Wallace a # blessing of the American Communists and Co., St. Louis, participated in the public offer¬ ing of DeWalt, Inc. stock (Pa.) share. headed Reynolds by described was It is * * Western Supply Co. re¬ soft luggage lines and on certain other merchandise of items better balanced effect to a posi¬ inventory tion at the end of the year; oper¬ ating costs, primarily salaries and advertising, which were increased because of competitive conditions brought about by increased merchandise plies of in scarce 1946 which in and sup¬ was that year required comparatively little sell¬ ing effort; and as a matter of policy Western Auto did not, in many instances, increase selling prices on merchandise propor¬ tionate increase in the to manu¬ facturers' costs to the company. * * 13 participated offering stock common Jan. $1) (par share. The offering subscribed. Johnson, Shoe the Co. ported * ■ Shinkle & net income a '■ 1947 re¬ of $420,087, provision for Federal and State income taxes, and after provision of $50,000 for contingencies. This was equal to $2.07 per common share, and com¬ pares with $2.03 per share for the year ended Nov. 30, 1946. Net the customers to fiscal and year the were to the largest $10,716,449, in and com¬ pared with $7,483,510 in the pre¬ vious year. Current assets at Nov. 30, 1947 $3,397,036, liabilities of $1,were against current 168,311. : ^ i * Stifel, and * * Nicolaus Stix & Co., Co., Inc. both of St. & of Kansas City, Jan. 22 on first and series A, due and 1973, at 102.187% offering was interest. The oversubscribed. the extreme right. We have tried both before. They didn't work. We sat tight, and waited. we And World War II cracked around ears. our ; The doctrine of the extreme left contains big lie, and the doc¬ extreme right a big fallacy. The big lie is that America trine of a the imperialistic; Russia; that it wants to for war that it wants to American unwilling throats of Euro¬ be to received from the sale of these shares will be added to the general funds of the The initial objective is to a shaft to 500 feet, and to continue subsurface exploration pany. compared to the cost of the last war—or another There's There's a middle a one program is It take, I'm for. of lot of self- a some Communist cratic Russia and demo¬ America, and that's this: We covet peoples. lands, resourcse or want recovery,'or¬ stability Russian around the Communism chaos wants confusion and because that kind of program best fits expansionist aims. be cleaned requisite to up peace, as pre¬ a jobs and free¬ dom. We call this program the Mar¬ shall Plan. More technically speaking, it's the European Rerecovery the Program. Plan" trenched The essence but the phrase, same, shall in This isn't has our is "Mar¬ become en¬ claims £ southeast of Kenora. The prop¬ erty comprises approximately 360 acres, each claim proximately 40 covering acres. ap¬ of it balance with the others, on word is to It's a a think, world scale. The not blueprint help western Europe work its own and way back to economic health political stability. We com¬ mit ourselves under this blueprint to do It is want. certain both of self-interest and a compassion. And that's something new in the world. a program program of It's a Participation but Alternative No kind of participation new toy the world's greatest power in affairs of other nations. world ought to convince us wars there is Two alternative but partici¬ no pation. like we it We're in or In not.. history, the has had the responsibility of contributing to order throughout the world. England was on top for 150 years, and England's influence was felt period every world's in of leading of call around the port every power globe. ■,/ Yes, ours is a new kind of par¬ ticipation. It is peaceful partici¬ pation. It is participation in the spirit of partnership and not in the spirit of exploitation., It used to world power only be aptly had interests. friends and no said that a friends, but We want both interests. -We want We would cannot depressed and economic health America. If and vitality have we learned anything from history, we should have learned this, for we have had a disastrous example within the things; and the 16 I have self-help said we abroad need a lot of have followed. One of * We could a our in the Marshall Plan is of healthy, a vigorous, traffic in international For be not world of distress major self-interests in prosperous revival two-way commerce. we have billions of dollars worth of goods more than we took in .by way of import. That unbalance was to be expected af¬ been some years exporting many ter the devastation not continue for reduces long: our' has overhung western substance and Program, we expect to which with convinced more we need imports of products for a better bal¬ in our economy as well as and finished poorhouse is around a as tape have measure is to have in the house, but yardsticks and tape measures are poor eating, and they seldom fit as wearing appareL * ' - : : We can take a good lesson from old King- Midas-, hungry.: of matter, But my circumstances. Give that kind a fellow a push, and he goes is why This I'm willing to bet on the people of western Europe and to support a sensible program for European recovery. I believe the choose Americans most that the middle-way—not of appeasement and not the of sitting tight, but the way way wav for peace with the tools and the strength of the American system. ' We call this a year of decision He got plenty for America in world affairs. But I believe it's later than that. I of fighting of peace • . believe the American Narrow Gap ,V;.:, ;;V-, :• Between Exports and Imports l- ... ; Yes, we've got to narrow;.the . v.:• < differences, between: exports and tials the to success of the Euro¬ Recovery Program. One, there must be adequate appropriations to begin with; and they must be voted promptly. pean „ on Three, a sound basis. administration after more peace the than the up one thing and freedom. / That /[ 1948 will make a year of doing and a year of daring and a year of fulfillment and not a year of indecision and waiting. I be¬ lieve the American people have already decided to exert-their moral and economic leadership to fight for the peace of the world join in partnership with the —to peoples of western Europe in the I cause believe we of freedom. are willing to pay price of peace—and that we have of people have their minds to go' they want anything relse—jobs,) already made covery Everywhere I go around country, I find some degree that for well. do flation. this or on a ne'er experience has been that it pays to bet on the man who wants to get along but-, is down because he is a victim time the common me. money, ahead under his own steam. handy to " wasting against chronic with to handy it's been have could continue taking in only gold in return for our exports. Gold after all isn't real wealth. As a yardstick wealth, western Europe of be of who be¬ I wish that some of us is like lending money to a to export without importing. And I don't think we ought to was and de¬ road The to I work—but to then, lieve that helping piles of material. We aren't as fabulously well-heeled with stra¬ tegic items as we were. We need fresh stockiples of raw ma¬ world. coal termination. I'm the seen British on still long on courage are loafer of example, and I am now than "ever, that the people get and ought to get huge stock¬ that . , V. We have, for brighter figures perately short on things—on tools The unbal¬ to start a flow of goods coming in from other quarters ot the world. ^Out of the European ance is Europe beginning to show a little break. There are signs that a turn for the. better may be at hand. con¬ except terials, ; The dark economic .cloud which must definitely contributes to inflation. There is no way to stop that Recovery good deal to do with it. production. There is a slow, but encouraging upturn in other lines and areas. Europe is still des¬ of world unbalance that But now a western Europe to rebuild for re¬ our in elections in effective aid from America had trap and tame the wild bull of in¬ It's in there back, new and we< all know what happened: anti-Communist forces interest to self- him strengthen / * France, common some give help can been been Two, there must be no ham¬ stringing conditions to thwart the mobilization of the resources of and denial at home. Rus¬ not lifetime of mosLof us.:: We were gained strength. Fear of Russian enjoying relatively prosperous "domination and further evidence that Russia is not a worker's years in the late 1920s. Eurooe, at the same time,: was running paradise, as advertised, con¬ •/.:> down hill. We tobogganed in the tributed to that outcome. s i am also convinced that faith crash of ;'29 and the depression -. terests. I've Since - with will We freedom. He it that knows He both and thus world democracy. chaotic will affect Europe combine to get of the food. have must like Communism him the with things—food and free¬ He sian this: A Europe that remains long with other only interests. We think that in international affairs in this era, friends should have common in¬ I was that am now, western worker in freedom.- - imports as nn essential feature of nations to further their best in-^ administering a sound; business¬ terests as well as our own. ; like European Recovery Program. It's the opposite of no friends I think there are three essen¬ working partnerships I faster it lose two would So it is in the world today. I too strongly emphasize •r the it whether brute, right kind of help from America. go up or, we go down as a whole, ance and rehabilitation, two-way industry won't American agriculture ill-will and resentment of the people of western Europe. But taken as a whole, the sub¬ I its convinced then, as flict. spirit of the plan, fit the picture of what with force and forced labor was los'.ng ground in western Europe. eco¬ It would invite the stance and the then convinced our own country when of the economic segments are out in Communism to Communism that abroad. We know what nor Euro¬ a as from Europe even be be isolated neither , thinking. international dole an WPA a the and psychological We didn't ask for it. revolution, relief. mining restrictions and conditions that . -would two-way blueprint. To do that would be to invite disaster on the no We and 1947 south shore of Flint Lake, 42 miles can't people, the any niggling most Americans not anti-anything. It is pro-democracy, pro-freedom and pro-recovery. It recognizes that without recovery in western Eu¬ rope, there will be no peace. It recognizes the basic issue between key contiguous located on the prosperity can knew who happens to that anger, to road self-denial by us. or nine ' these must not load the program We nomic front. help by western Europe, and Dogpaw Gold Mines was incor¬ porated in Ontario on Jan. 24, owns doing against things: the Middle Road a and that's the It's one. from the shaft. and I'm But program of recovery com¬ deepen / . Against Niggling Restrictions haggling make it in the end- a piece of in¬ in western tellectual and" economic flypaper Europe. Facts cripple that fallacy. to gum the works for us and the The amount proposed for recov¬ rest of the world to boot. Vi-.V ery in western Europe is but a I If we do that, it won't work. It fractional per cent of our current J won't be a two-way program from national income. It's a pittance the a must ceeds the I'm for do¬ supporting it. ing all these things. with long as hunger, misery, priv¬ ilege and corruption exist. Those breeding areas of desperation Tellier & Co. The stock is priced at 40 cents per share. Net pro¬ assessing for I'm answers. cost of so Offering of 1,000,000 shares of $1 par value (Canadian ; funds) capital stock of < Dogpaw Gold Mines, Ltd., is being made by to course proper "amen" to every¬ thing in it. I'm for having Con¬ gress punch it and probe it and take its temperature and look at its tongue. I'm for Congress ask¬ ing frank and open questions— and demanding frank and honest Europe middle-way program rec¬ ognizes that dictatorship from left or right is an ever-present threat Gold Mines Stock and "i's." I don't say capitalism down western The Tellier & Co. Offers at home It be effective. I talked to rebuffs cent dom. re¬ bonds, that thethe where France and Italy, but I came home funda¬ agement is stitched together. world. Co. mental isolated. is It The der Edison world. prosperous wants ing of $40,000,000 Southern Cali¬ funding mortgage cannot suffers. participated in the public offer¬ fornia we intensive whole, backwards and forwards and upside down. Let me tell you a few of the things I learned on that last tour of Europe. It was before the re¬ if Louis, and George K. Baum & Co. run the them, and many of them story pean The prosperity of labor and man¬ 1947 history, company's amounted in hearts and minds is our wise the The big fallacy is that America would go broke by underwriting its subsidiaries for ended Nov. 30, charges sales ■ Stephens and year after *>', ' * , decide in Europe or its will to work and take. It's a grave decision. and free¬ Let me make it very clear that dom. If this plan had a slogan, it I'm not blindly for the Marshall might be "wait and see." Plan as it comes to Congress fiom the Administration. I wouldn't There is nothing new in the viewpoints of the extreme left or eross all the "t's" and dot all the peans. '/• * * - Congress does in the weeks ahead will be what we—the people— long have jobs and freedom in America unless we live in a peaceful and their on through countries men ern the per over¬ was arguments for it and the spiraling costs of living must be the were sac¬ because us five for course of to work for demoncracy against of Joy Manufacturing Co. at $38.75 the all heard all about. it's of controlled. But in what know all of prosper choke of shares by the that say Marshall Plan would American arm public the in 185,000 of on We can't play politics with that It must be met and met Europe to rebuild to traveled I European , rifices You've , cept to leave some plunder which an aggressive Russia might pick up. Many of its spokesmen have little faith in the sincerity of west¬ is Newhard, Cook & Co. - weeks mini¬ we I . Recently, of depression. ogre and basis of first-hand observation. squarely by Congress and people. It will mean some against it. And it's you and I and all the rest of us who might break the United States and will decide whether we'll adopt it accomplish nothing anyway ex-' or whether we'll ditch it. What goods and economies. And You to afford cannot States giant a We delude ourselves if mize that talk, the free remain scores the spend the dollars to aid recovery in western Europe. They say it said, by markdowns in¬ to the closing out and of that believe adherents United company of self. Its with $7,546,828, or $10.04 per share in 1946. Earnings in 1947 were adversely affected, the discontinuance Rat- "Operation be may We propose to satis¬ fy ourselves that our help is con¬ tingent upon Europe helping it¬ hole." pared cident would haps, inflation that I have a lot of ability and desire of part, my in the peoples of western issue. this program. yond bare emergency relief per¬ Net earnings amounted to $4,205,014, equal to $5.60 per share, the sec¬ ond highest in its history, com¬ with $107,619,168. afraid are shoot up like Jack's beanstalk and land us squarely in the clutches oy re¬ traue oi me now increase us For faith ducing bai riers and restrictions. And we propose to keep a con¬ sistent check on the progress of further aid to western Europe, be¬ ports total sales for 1947 of $121,395,031, the highest in its history, compared a intensely nationalistic. It's against Communism. But its creed is this: * Auto of the extreme that as gets of production of major com¬ modities; to strengthening their internal financial stability; and to fairly be can It has no particular leader. "sit-tight" program. It is right. of Co. York. New nations commit themselves to annual tar¬ European Western The fairly described Plan Number Two per provide machinery. and materials food, the plan of the extreme left. as common $2.50) at $15 The syndicate (par be therefore can Jan. 20 of 110,000 shares on We commit ourselves to has the also It Moscow. of worry about our own prosper¬ People aren't being a little on th"e pessimistic side for fun. Lots of foreign policy. our A Free Western Europe ity—too much to be laughed aside. commit specific program a of reconstruction. popular in is very plan The Europe. western in forces $7,327,909 in 1945. J. W. Brady & nations of western Europe themselves to (Continued from page 11) and 1946 nation with "I'm for the Middle Road \" Missouri Brevities forever abandoned the doc- Volume' 167 Number 4674 THE COMMERCIAL "Not - Uiges Cabinet "Doctors" to f • Humanity (Continued from page 10) despotism has given the people more happiness bigger or it being by checks, less hours of work, pay dollar, more whether and comforts, more luxuries, and have reduced the price of luxuries country, within the reach of everyone, that are not even luxuries in foreign vented from lands; where by President other country to its that arguments, gave other ereign that other system any is on our life, less liberty, less, oppor¬ tunity and less freedom than any other system. " 11..V/'/V'. "It reasonable for highly .and so - handsomely pays : you so keep him well? "Do tem really want this you to Jive? Do sys¬ take your responsibilities respecting public questions, which gives you; the right to receive your pay as man¬ agement of you profit and loss and seriously our competitive system enough to warrant the inconveni¬ and ence effort is that required to find out why your patient is sick and getting sicker? Or do want you if it will our system to live only respond to the prescrip¬ tions you have written in the past —only if it lives on This may seem to be bear with for marbles. facing We me. The is us your not stark whether block is so build that did we not them. answer system there seems more1 who will, in desirable, and believe the not gov¬ of that tions system. and the people some of us. "As I to - all of a message doubtedly un¬ register, but it 4s my opinion the reply considered ' ; "Not a this.' In other words, my reactions to the thousands of letters which I have received in response to the thousands I indicate to try—our have sent out that indus¬ me leadership in this great country—lacks the combative in¬ stinct and save our "The the a stomach for Freedom worthy lieve are On Train in the is land telling that our dire danger. If the fuss about? of the other church hand, the Marshall Plan is telling us plainly that this generation is charged by Almighty God with freedom on this earth. and an That's 16 a explosive If the allocation the doctors who are ;/• ;• ,:if■/1 Deal . doctors enterprise v evoke nations large contract responsibility. of this money to is to be directed by the State Department without other who would that - strong, ' "Who ; and not a be¬ commitments doctors pass how they will tell no doubt its may constitutionality. "No doctors who will political caprices of branch of 6V2 cents and that the next spring the by is government make to not arbitrary or if They cotton any they have for the fairness in and retaliation.' That not observed by the future. justifiably reply that had they left alone, that big men, they by can the believe that by rich, they can destroy¬ help the "Who believe imperialism.' was Then the ing the wage payer, the wage earner— "Who believe that from Mr. Vishinsky and Mr. more Molotov. "To than their can —in recall—the War South after reconstructed the the ing the lateral pact and, second, with to the that by inciting man— * "Not i:\ew Deal doctors who be¬ bureaucracy, which increases the cost of government —which lessens the worker's pay envelopes. for "Not an who mistake a inheritance— New Do not involved. his and When Cabinet of those and will political a his undermine so of ad¬ consti- tutipnal government to. resort to had Deal doctors ing the Republic fatally by grown abroad— mort¬ germs by those the "With futures who of further of functioning operation, the between the thou¬ competition sands risk normally a in market merchants cotton pre¬ of them from exacting than more a narrow futures market the ideal level of margins is a matter for a nice ex¬ of judgment. Even if this ercise legislation were enacted, the Sec¬ retary could not prevent a South¬ ern bank from lending 60 or 70 or 80% or of the tion market value bales of 1000 th& on in other any form would mpan no can no keep them in longer appraise such leadership as being anything but destructive to the morals of the dignity of country is assum¬ catastrophic responsibilities country our mankind. ing Where and Our will it end, on the spot cotton would require so much less capital. Shall we then say, not 100%, but 50% think not for the 33%. We already or reasons knows. me length of this letter. of enthusiasm in the It is because country which "As always, will many your MILWAUKEE, date WIS. — Friday, 20, 1948 has been set as the the annual meeting and for election of officers of the Milwau¬ kee Bond Sincerely, your friend, ! F. HUTTON" Club. erratic and price spread between much wider. Arrange¬ Committee, under the di¬ rection ' of William Moran & (Mason, forth this every of the one will fair most bethan The Milwaukee in The af¬ Eliza¬ the of Club the Milwaukee at Room Athletic make outstanding had. ever put¬ are effort to - held be Johnson A. Co.) mid-winter parties the 6:30 p.m. of Board Governors ap¬ pointed the following Nominating Committee the to name coming (Harris, On Feb. 12, in a supplemental statement to the Senate Committee Agriculture and Forestry, Charles Slaughter, a Director of the New York Cotton Exchange, directed attention to the value of futures mar¬ The ments ting "EDWARD consumer sure am for our great prompts the free flow of my mental stream to be expressive of my thoughts, irre¬ spective of its logic. mv I To Hold Elections Feb. with bear which and amply covered by Milwaukee Bond Club God only N. Y. Cotton Exchange tells Senate Com¬ Agriculture and Forestry that without such market fluc¬ producer and speculation Exchange, because speculation in later witnesses." I power, to Charles Slaughter of more than property. of Even Russia has not succeeded in cited Again— in the tuations would have been be accomplishing that. 100% margin be head per Commodity Price Drop Shows #>Valne of Futures Market and Speculation on 100 can cannot be stopped any more $40 Holds mittee of Specula¬ Exchange Bond Club has 1 cotton. stopped but speculation in cotton tions, to stoop to buying votes Jor up man; Upham W. ticket for a Iver Skaar Co.), Chair¬ year: & (Paine, Fuller Brock on kets in commodities. 'The rise in In this grain statement, Mr. Slaughter said: prices any (to more use a pact of hackneyed simile), than the ther¬ wheat mometer government ernment a causes patient fever the may from suffer. Spec¬ of in grains was not the cause inflation, but its result. The recent great decline many cluded that flation has is the result of a people having con¬ the peak of the in¬ been reached. These than would it have the and did had purchases, cost the millers there more been no futures market. They also believe improving prospects of the oncoming crops both here and that in the Western induced Europe would have greater decline through the selling by owners who had overstayed their market. It can be a more confidently asserted that, lacking the fluidity of a fu¬ tures market, fluctuations would millers who had not hedged have wheat of and, no speculators. doubt, • a number G. Hausmann Milwaukee (The (The Wis¬ consin Co.), M. W. Sheldon (Bingham-Sheldon The ports Co.). Nominaing Committee re¬ following the nominees: gov¬ people include farmers, whq had not heretofore sold their wheat, their Webber, Jackson & Curtis), Carl Co.), Miles C. Reinke last/<5> * infect¬ subsequent the realized was assumed ward politics in order to win elec¬ accept rise "Not^hose Truman physicians fear¬ class hatred, they can further the in more longer the usual politi¬ brokerage visors multi¬ recipients, States. but Dr. with all a bilateral agreement United the of no plan under proner a cal a politics wrapped power Our Doc¬ rest can dollar shortage. a supervision, provides that each govern¬ ment must sign two separate trea¬ itself world suoervision with "Please conditions—first, the with the definitely for consequences. committing bed of assume, Sir. that I am opnosed to a Marshall Plan. I am ther ties in not "This Administration's bill fur¬ these assume nations 16 remain the Doctor. administer Civil are can to tor sick ohilosophy today is some¬ thing for nothing. There are many land who obligations can Southern brotherhood of believe from upon the cotton which he sold at 6 cents. The differ¬ Cabinet—men weakening ourselves to the danger point of nutting Uncle Sam in bed among the sick of the world.. Only a strong America their belts and went to work. The our hard- without States. people in need we Doctor's our these Why not potentialities? Let's these un, just how far America of honest people. posed utilize ulation, except over very short periods, does not make price. The "Who 6-cent on farmer reaped no the and margin of profit, which they are willing to accept because their opportunity who will honestly read the politi¬ to hedge their purchases and sales cal thermometer respecting the by offsetting operations in futures health of our patients—who will removes their price risk. If we honestly advise the people as to are to have a normally functioning —-those who risk savings are en¬ titled to a profit Failing in which keep out of trouble— based headed, able doctors—not quacks production become pos¬ sible—which creates new wealth new deflation income, they 12 bought few, sheets or under¬ or prices vents any sum "Such matters are not suscep¬ winter did not cause by destroy-, inflation, nor have the recent de¬ tible of proof, but most commodity they can lift clines in grains and cotton caused experts believe that under the im¬ by spending at advantage charges will hear we fall and early that above at decline at the time they bought. "We need doctors to preach that only by the capital incentive risk the tearing help the to play tor. r believe sold 5V2 had Again such action would into communistic hands by of! of 'dollar diplomacy' and 'Yankee former doc¬ our not from consumer shirts any, ence — cotton The crop. be fault localities same ^ise, our at crop cents after the farmer had sold his they could have The failure will be made good. claimed to its spirit statement a the his theirs. ca¬ of use alibi been under marketed simultaneously varying in wear then power,^ but to act with restraint seeming to confirm and farmer com¬ ran government to usurp the rights and dulies of other branches. 'Our sovereign obligation Ex¬ different plete permit the our Cotton beginning of the cotton harvesting season, at the outbreak of World War I, the sovereign na¬ Foreign countries will re¬ sent our attempt to carve out their thoughts or mould their opinions. If they follow such a the legislation, the closed in the Fall of 1914 just at the method, who to when was prices tions. Congress the poor. gage their that change turbances shackles. •* man— "Who lieve to action, countries , by- weakening can strengthen they ing such ion, and it will only lead to dis¬ taxpayers prices for recipient Sir, we are undertaking to be the Doctor for the world—impossible in my opin¬ are matter up the in every respect. "In other words, financing the bills see purpose in living under such no if lived ican people.' That is the murder of our Republic — our who recall called even government hands ducer and that to the consumer would be vastly widened and ac¬ centuated. It is only necessary to who suspicion of size— weak— more our not, what is all Why the ringing bells? fight to a heritage. people of liberties New process' to cause down would Deal believe production must be made small majority that interest should do in powers 'in doctors great penalize success, but doctors who 'others many and placed to the backs of the work¬ would be in the vast of less up Deal shackle the liberties of the Amer¬ "Not New Deal doctors who be¬ it. Sir, such see just not us, industrial heads would our ac¬ determined, by the .opin¬ beliefs'in the minds of are ions In America New. ers—'>4iy,:• •;">> distant future, be existing under that other system and the consequences they creased taxation, which burden is otherwise too how bureaucracy,nwhich creates the bought vote — which' creates in¬ other plenty of minds in are ernment we some the indepen¬ away understand " "Not New Deal doctors who be¬ lieve in more-government—more it will continue. men I cannot in courage attempting to create prosperity by discouraging thrift— ; ' , " ■ / ' men believe in its ultimate!, good and superiority all systems, and them. ;what not Our sys¬ peoplev If all If in the minds of New that, "prosperity— persists only in the; minds of over not in the "Yes—we need doctors—a doc¬ tor who can create greatest-economy on by refusing to pose ques¬ tions and it up could should do for themselves. the earth tem for lands, a id that respecting our Republic, and realize built 39 package. The United States could stop all aid to other coun¬ tries at any time America's-own of; constitutional They had no bounty from they can help the people in for-; our Federal Government—no sub¬ eign lands permanently by doing sidies of any kind. They tightened foreign must we Is people's loss system is to con¬ Liberty is on the auction in which borrowed 'inoney—to on character dence. our profit and tinue. it. politics' wrapped foreign lands by taking initiative and playing not that old package? build question or In one sovereign gov¬ telling another sov¬ understand security terms? little rough, a are same they take a ' loss. * That's what :"As. I understand, the draft frill "built the U.<6. A. from short pants stipulates - an* impressive list of to number one power—the incen¬ changes in - the political and eco¬ tive to risk. nomic organization and operations "We need doctors who keep an of Western Europe. Yes, we need eye on our money, for we are go¬ a doctor—a specialist in that field ing to need it ourselves to get to administer to the trials and well and remain strong. We need tribulations of a sickened world. doctors who will keep $2 for our These stipulations, however, are Republic for every $1 sent else¬ given and must be carried out in where—we shall have need of order to get American aid. Who them. are going to be the doctors? Cer¬ "Help, yes^-but what kind of tainly we need superlative minds help and how much of these bil¬ —specialists in handling other lions will reach political hands to people's monies. That type of further political parties in foreign vision, in my opinion, is not to be countries? The Red Cross special¬ found in the State Department. izes in helping those who are in They have not had any experi¬ distress. The Salvation Army can ence in creating payrolls. They make a dollar go farther than any are attempting to establish sound organization and they are com¬ management t to as used. 'we, the people,' to get it and same the life a* the patient who regards you is be may government power to who can then bring the attention of our; industrial Doctor and ask the question—are you interested in • trying ;to save seems has certify, before any aid given, that such action is com¬ patible with American foreign policy.-, What is the American for¬ eign policy? * It is rather difficult less - Truman, is that the system Constitution gives doctors • (835) interests death "Not . great our shall must better than ours—prove founded which they must do. That, too, is an ex¬ plosive picture. It provides also that, as I see it. Secretary Mar¬ "Show us—give us concrete evi¬ dence. Prove it by example. Prove the "No providing for the Mr. aid words, ernment people as America has al¬ given to us. ways (?). American that much as dive into the nose laid before Congress stipulates or defines the purposes for which where is, or was, us a recovery program dreams, blueprints or imaginary figures, but with facts. "Show assuming such an obligation, can be pre¬ "The draft bill der the American system. us—not ten financial hopper is the question. better food, better entertainment, and greater •oppor¬ tunity than given by America un¬ "Show this not or by enormous NewDeal CHRONICLE packed the "Supreme Court to has¬ which supervised and directed who know the value of a men FINANCIAL government— Cure Ills of socialism & William A. Johnson ran & Co.), Barnum President; Rolland A. (Merrill Fenner & (Mason, Mo¬ Lynch, Pierce, Beane), Vice-President. Board of Governors—Walter B. Braun (Braun, Newman L. Monroe Dunne & Co.), (The Wiscon¬ sin Co.), Earl Pryor (The Milwau- even more been far more important, between the erratic and, that the spread price to the pro¬ ke Co.), Lester (Loewi & Co.), (Straus Vonier & McElhiney Edward# D. Levy Blosser), (Paine, & Curtis). B. Gilbert M. Webber, Jackson 40 Securities All American Price by & Co., New York. writer—Herrick, Waddell in the acquisition of the indebtedness incurred capital stock of A. D; Cook, Inc., Lawrenceburg, Ind. • American Inc., Co., Broadcasting New York Feb. 13, filed 250,000 shares common ($1 par) at pro¬ posed maximum offering price of $12.50 per share. Un¬ derwriters—None. Proceeds—For corporate purposes. has plans to spend about $5,325,000 for in New York, Los Angeles, Chicago San Francisco and Detroit. Shares will be sold to "the Company now television facilities with which the company had network persons affiliation agreements at Jan. 31, 1948, and to such other persons may be selected from time to time by the company." as • Mines, Ltd., Montreal, Canada 600,000 shares of common capital stock ($1 Robb, New York. Pro¬ Angus Feb. 12 filed Underwriter—James A. par). ceeds— To Business develop gold prospects. — Miners- prospectors. • Ark-Tex Inc., Dallas, Texas Feb. 12 (letter of notification) 120,000 shares of common stock. Price —$1.50 each. Underwriter — George R. Cooper, Dallas. To purchase saw mill equipment. • Fisheries Coast filed 2 Co., Boston, Mass. general mortgage and col¬ lateral trust convertible bonds and 166,950 shares ($1 par) common stock. Underwriter — Doolittle & Co., Buffalo. Offering — The bonds are being offered to \xk % $556,500 stockholders at the rate of $1,500 of shares of against will common conversion be publicly by General corporate purposes. • Bardwell & Unsubscribed bonds underwriter. Proceeds — bonds. the of offered bonds for each 1,000 The stock will be reserved stock held. McAlister, Inc., Burbank, Calif. conversion of preferred & Dunbar Co., Los Angeles. Proceeds—$100,000 for working capital with balance for construction and development of new items 1 • to be added to the ment. basis one-half of share ferred each share held. common Power & common share Price of for new each by amendment. Distilling Co., Chicago Feb. (letter of notification) 15(T,000 shares ($2 par) common. Price—$2 a share. No underwriting. For working capital. Offered "to common stockholders of Philip Blum & Co. Inc. of record Dec. 22. Feb. 20. •' Rights expire . Boise (Idaho) Water Corp. Feb. 9 (letter of notification) 3,000 shares of 5% cumula¬ tive preferred stock ($100 par). Price—$99.75 each. Un¬ derwriters—Butcher - Sherrerd, Battles & Co., Phila¬ delphia; Wagener & Daly, Boise, Idaho, and Southern Securities Corp., Little Rock, Ark. To pay promissory notes and • & • construction costs. Bureau of Cameron Aero Engine Corp. (2/24-27) Dec. 29 (letter of notification) 101,000 shares of common stock (par $1), of which 85,000 shares will be sold to the public; 8,500 shares will be issued to underwriters i} as additional underwriting consideration and 7,500 shares to American Die & Tool Co. for invest¬ will be issued ment in return machine tools. for cancelling $15,000 open account for Price—$2 per share. Underwriters—R. A. Keppler & Co., Inc. and Henry P. Rosenfeld & Co., New operating funds, etc. • Cappel, MacDonald & Co.K Dayton, , 10 O. 26,000 shares of (letter of notification) common investment in additional capital. • Casa Feb. 2 Paga Gold Co., Seattle (letter of notification) $100,000 of production (10 par) stock will be issued with each $1 worth of production notes. Under¬ writer—Lobe, Inc. To purchase capital stock of Dry notes. A Creek bonus of one Dredging Co. and share Light Co. current expenses. formed to bid if Shields share's (jointly), the First Boston property additions and expenses. Proceeds—For Clinton (la.) Industries, Inc. , • filed 15 in nardino County. exchange for 300,000 shares of Obear-Nester Glass Co., Effective Jan. .14, 1948.* • St. Louis. New York Finance Co., Mount Rainier, Md. Jan. 16 (letter of notification) $68,000 of 6% debenture bonds. S. Warren & Underwriter—Emory ington, D. C. Cook Fraser Cooperative Assoc., Kansas City, & Co., Inc., Washington, D. C. Newsprint Co. • held. Rights new expire Feb. • York. Proceeds—To secured Pittsburgh )C l-. v ... . ? ' ; For mortgage indebtedness and mining j.' '/ */ .• Goldfield Great Bend, 12 . ; Ltd., Reno, Nev. (letter of notification) 65,000 shares of non¬ capital stock (10 pax). Price—11 cents each* For mining operations. Nov. 26 filed 303,587 writing—None. Working shares ($1 par) common.. Under¬ a share. Proceeds—Fox Price—50 cents equipment and working capital. Effective Feb. 5. , , Herschel), Ashland, Wise. Feb. 9 (letter of notification) $33,000 notes, to be sold for cash. Underwriters, none. Notes will be sold in (3/1-5) retire r;. ^ Guyana Mines, Ltd., Toronto, Canada 5 %% sinking fund bonds, due 1966, with warrants to purchase 60,000 shares ($1 par) common stock. Underwriter—P. W. Brooks & New ■ No underwriting. • Inc., " assessable capital. Crampton Manufacturing Co. ' Mining Co., Black Hawk, Colo. * T Cooper, Denver. shares for each 20. : (letter of notification) 248 shares of common Price—$100 par Value. Underwriter—Richard R. costs. Offering—4,000 shares to be offered to stockhold¬ shares : , 16 stock. Feb". of record Jan. 13 in ratio of two Co., Globe Feb. Co., Inc., Cayuga, N. Y. Jan. 13 (letter of notification) 5,000 shares of capital stock (par $5). Price—$30 per share. Underwriters— three being sold by 14 ^stockholders who will re¬ Craigmyle, Pinney & Co., New York; Wirislow,' Douglas & McEvay. New York, and Jenks, Kirkland & Co., Phil¬ adelphia. Offering—Stockholders subscribed for about 42% of the stock. Rights expired Feb.-14. Unsubscribed shares will be offered by underwriter. Proceeds—To de¬ velop a plant and facilities for the company's subsidiary, Carolina Giant Cement Co., Harleyville, S. C. V . Cowles ers are proceeds. Jan. 12 filed 564,906 shares ($1 par) common and 282,453 commop stock purchase warrants. Underwriters— 1948.' None. Co., 100,000 shares Giant Portland Cement Co/ (2/19 common (par $50). Under¬ writing none. Offering—Stock will be offered direct to public through directors and officers. Price, par. Proceeds —Erect and operate mill for manufacture of newsprint, from Southern pine. Company also contemplates the sale of $16,000,000 4% 1st mortgage bonds. Effective Feb. 6, Detroit, Mich. ' ($1 par) common. Under¬ Campbell, McCarty & Co., and Keane & Co., Detroit. Price-r-$5.25Vper share. Proceeds—The ceive 9 (letter of notification) 1.500 shares (no par). Price—$10 per share. Underwriters, none. For pharma¬ ceutical supplies. River For — shares Feb. Coosa Products filed writers both (E. K.) No underwriting. : ' ;l " Price—Par. preferred stock. Oct. 21 $1,000,000 4% non-cumulative common stock ($25 par); $4,000,000 of 3%% certificates of in¬ debtedness cumulative; and $1,000,000 of \xk% loan certificates cumulative. No underwriting. Offering—To the pablijc. Common may be bought only by patrons and members. Price—At face amount. Proceeds—For acqui¬ sition of additional office and plant facilities. • Savings & Loan Co., Greenville, S. C. 20,000 shares ($10 par) (letter of notification) working capital. Co., Wash¬ filed 16 12 5% .♦ Consumers Hardy $1,200 and (J. units. $600 To apply on down payment orj purchase of Parkinson Hotel at Okmulgee, Okla. in¬ • capital. Feb. Dayton (Ohio) Power & Light Co. 170,000 shares ($7 par) common. Under¬ writing—None. Offering—Offered for subscription by Dec. 5 filed stockholders of record Jan. 30 on the basis of one for each nine shares held. Rights expire Feb. 25. — share. per Feb. Proceeds - . Drilling Corp., To finance ' • share Price Hastings (Mich.) Manufacturing Co. 10 (letter of notification) 600 shares of common stock ' Feb. 1 ($2 par). Home Underwriter—First of Michigan Corp. Telephone & stock ($5 par). Fasteners, Inc., Chattanooga, Tenn.r (letter of notification) 39,870 shares ($5 par) stock. To be exchanged pro rata for all out¬ standing shares of Charney Fasteners, Inc., under a reorganization plan. . 16 filed Credit Corp., Chicago 150,000- shares ($1 par) Class A Common. Offering—To be offered ployees. executives and management personnel. $3.49 a share. proceeds will Underwriters,, none. % Okla. Dixie 29 ; f shares capital Of the proceeds 57,600 m City, (letter of notification) 1,000,000 shares common (100 par). To be offered through Tellier & Co. For expenses and working capital. Dec. Co. of Virginia* construction • Oklahoma Telegraph Emporia, Va. 11 (letter of notification) 3 Underwriters—None. —. Chicago ^nd other cities Franklin Feb. Commercial * ' Fitzsimmons Stores, Ltd., Los Angeles, Calif. Feb. 2 filed .10,000 shares of 6% cumulative first pre¬ ferred stock ($100 par). Underwriting—Officers, direc¬ tors and employees of the company will offer the stock to. friends and associates. Price—$100 per share. Pro¬ ceeds—To retire 7% preferred stock. Business: "Super Markets" in Los Angeles, Riverside, Colton and San Ber¬ - Domestic CORPORATION" Boston Corp., Denver, Colo. (letter of notification) 2,500 shares of 4%% cu¬ 19 common FIRST BOSTON . ital. • - Fund, Finance Jan. Century Steel Corp., Hollydale, Calif. Nov. 10 filed 4,000 shares ($100 par) common. No under¬ writing. Price—$100 a share. Proceeds—To purchase rolling mill, equipment and for working capital. Feb. •. working capital. Corp. Deardorf The a mulative, non-convertible ($100 par) preferred and 5,000 ($5 par) common. Underwriter—Robert L. Mitton Investments, Denver. To supplement working cap¬ be negotiated. *Groups may issue is reoffered include: W. C. Langley & Co., program. Corporate and Public Financing Price—$15 & Co. and White Weld & Co. Sale $24 pay Buffalo,. Inc., Seattle, Wash. shares of common. Underwriters— Pacific Northwest Co., Seattle. Price based on market prices. Proceeds—For investment. debtedness, finance inventories and supplement working de Corp., Dec. 29 filed 103,089 repayment of bank loans. Feb. 5 filed $600,000 first mortgage stock ($10 par). Underwriters, none. To be used in the ordinary course of current business and for permanent Alloys notification) (letter of Equity York. To provide Feb. 9 Additional Dec. 23 filed 238.829 shares of Affairs, Washington, D. C. Feb. 12 (letter of notification) 1,260 shares of common stock. No underwriting. To be sold to employees. To meet current operating expenses. & & for Pro¬ filed 40,000 shares ($100 par) cumulative pre¬ Underwriting to be determined by competitive bidding. No bids received at competitive bidding Dec. - National Refractories 7,400 shares of common share. Underwriter—Ham¬ Lunt, Buffalo. Offering—Stockholders of record Feb. 13 given rights to subscribe at rate of 1/12th of one warrant for each share held. Rights expire Feb. 27. lin 21 Oct. Dec. 29 leases and balance for working capital, or gas stock (no par). ferred. v.1. (James B.) Un-' New York Missouri Beam of stock at $10.10. none. Electro pre¬ common and one share Not less than 50% of the new proceeds will be invested in oil and gas royalties underlying pro¬ ducing oil new and construction Central Nov. of share one-tenth and To be offered in units of $1Q of 5% income notes derwriters, shares ($10 par) common. Under¬ writing—To be determined by competitive bidding. On Dec. 8 only one bid, that of Blyth & Co., Inc. and Kidder, Peabody & Co. was submitted and was rejected by the company. They bid $13.75, less $1.75 under¬ writing commission. Offering—To be offered to 6% pre¬ ferred and common stockholders for subscription on the company's line of photographic equip- ' . (10c par). debenture 210,000 shares ($1 par) capital stock. Underwriting—None. Offering—Shares are to be offered Feb. 9 (letter of notification) 29,500 shares of 6% cumu¬ lative convertible stock ($10 par) and 88,500 shares com¬ stock ($1 par) issuable upon stock. Underwriters — John B. . Co. Power Washington, D. C. of Eldridge Oil Corp., Carson City, Nev. ■ F (letter of notification) $97,000 five-year 5% in'come debenture notes and 9,7000 shares of capital stock Nov. 10 filed 160,000 Dec. ' mon Maine (letter Feb. '9 officers and employees. Offering —To company stockholders, employees and customers. Price—At par. Proceeds—To retire indebtedness and for working capital. Central 12 • Md. pany Development Co., Atlantic Hagerstown, Corp., shares ($10 par) non cumulative 6% stock and 70,643 shares ($10 par) non-voting common Class B stock. Underwriters—To be sold through com¬ Dec. 29 filed 254,682 15. Feb. Chemical Central 1832 Biltmore Corp., notification) 1,600 shares "common stock (no par). Underwriters, none. To pay the owner of the building for the value of the property. (letter of notification) 16 ceeds—For ; • Feb. 100,000 shares ($1 par) capital stock. Price—$2.50 each. No underwriting. To engage in contracting business. Feb. Proceeds—To pay off amendment. ISSUE Miami, Fla. Cathedral Corp., • Inc., New York Industries, Thursday,. February-19,-1948 Registration in Now INDICATES ADDITIONS SINCE PREVIOUS • Oct. 30 filed 100,000 shares ($1 par) common (name to be changed to American Steel & Pump Corp.) Under¬ & FINANCIAL CHRONICLE COMMERCIAL THE (836) to em¬ Price— Proceeds—Company did not state how be used. 1 ... 1 * 11H i Ml . • t Volume" 167 Number 4674 THE COMMERCIAL & FINANCIAL CHRONICLE & Co., Inc. (jointly); the First Boston Corp.; Harriman, Ripley & Co.; Glpre, Forgan & Co. and W. C. Langley & (jointly); Kidder, Pea¬ body & Co. Proceeds—To pay $2,450,000 of short-term bank loans and to reimburse treasury for expense of property extensions and improvements. Business —A NEW ISSUE CALENDAR February 19, 1948 Giant Portland Cement Co.__ Common Ohio Public Service Co 1948 Cameron Aero Engine Corp.. Myles Plastics Common Corp Common _< February 25, basis of Interstate Power Co.— _Bonds • Warren Petroleum Corp Preferred 1, 1948 Crampton Manufacturing Co County Gas Co.J—_ par). ..Common 23, Market Dec. 1948 Columbia Gas & Electric Corp.. 30 Basket, filed public at for funds used to purchase McFarland over common over • Bonds — - further company's construc¬ ian Under- For cold by four stockholders and represent part of the stock the sellers will receive in exchange for their holdingi Co., Ltd., Sherbrooke, filed 30 shares 1,500,000 ($1 par) common stock. • Frechette, Hartford, Conn., is the principal underwriter. Price —$1 each. Proceeds—To construct milling plant and purchase equipment. Interstate Power Co., Dubuque, la. (2/26) ' stock ($3.50 par) common stock. Underwriter — Smith, Barney & Co., New York. Price and interest rates by amendment. Proceeds—To permit consumma¬ of the company's reorganization Johnson 11 (no par) common * • stock. Un¬ & ley, Co., Wichita, Kan. $5,000,000 first mortgage bonds due 1978. be determined through competitive bidding. Probable bidders: Halsey, Stuart & Co. Inc.; the Feb. 11 filed ' & Co., Inc. (jointly); Mer¬ rill Lynch, Pierce, Fenner & Beane; Lehman Brothers, Bear, Stearns & Co., and Stern Bros. & Co. (jointly); Shields & Co., and E. H. Rollins & Sons (jointly); Kid¬ $1 ■ , • y Guffey. on by underwriters. Price— -By amendment/ Proceeds—Payment of outstanding 3V2% ' ■ Legend Gold Mines, Ltd., Toronto, Canada share. Louisiana Power & Light Co., New Orleans, La. Feb. 12, filed $10,000,000 first mortgage bonds, due 1978. Underwriters—Names to be determined through competi¬ bidding. Probable bidders: Halsey, Stuart & Co. Inc.; Blyth & Co., Inc.; W. C. Langley & Co., the First Boston Corp. and Glore, Forgan & Co. (jointly); Shields & Co., White Weld & Co. (jointly); Harriman, Ripley & Co.; Merrill Lynch, Pierce, Fenner & Beane and Kidder Peabody & Co. (jointly); Kuhn Loeb & Co. and Lehman Brothers (jointly); Salomon Bros. & Hutzler. Proceeds — Approximately $5,500,000 will be added to company's general cash funds on the basis of unfunded property additions, and the balance will be used for construction purposes. • Mc~ . Inc., Boston, Mass. Dec. 24 filed 83,333 shares (no par) $1 cumulative con¬ vertible preferred. Underwriter—Atlas Corp., owner of 100,000 shares of the registrant's common stock, has agreed to purchase all shares not subscribed for by other stockholders. Offering—Offered for subscription by com¬ stockholders of record Feb. 2 at $20 on the basis of share for each six one > Ocean Downs shares held. Rights expire off indebtedness. - common March 1. Proceeds—To pay to —To be used for construction. • Oil 1 filed Halsey, Stuart & Co. Inc.; Lehman Brothers Producers, Inc., Oklahoma City, Okla. (letter of notification) 980,000 shares common option warrants. Price—30 cents and respectively. Underwriter—R. V. Klein Co., New For drilling costs and working capital. 16 and 150.000 stock cent York. and Blyth Jan. 29 filed 686,953 Underwriting—none. shares San Francisco ($25 par) common holders of outstanding common shares Hampshire (3/5). .'u. ($10 par) stock. stock of record Feb, 27 Rights expire Proceeds—To finance a construction program. stock. New Eng¬ rights to subscribe shares. Service Co. of Oklahoma, Tulsa, Okla. $10,000,000 first mortgage bonds, series B, due 1978. Underwriters—To be determined by competi¬ tive bidding. Probable bidders: Halsey, Stuart & Co. Inc.; Shields & Co. and White, Weld & Co. (jointly); Harri¬ man Ripley & Co., Blyth & Co., Inc,; Central Republic Co. and Lee Higginson Corp. (jointly); Glore, Forgan & Co., the First Boston Corp.n Salomon Bros. & Hutzler. Proceeds—Prepayment of $1,700,000 of bank notes due April 20 and $1,375,000 of Oklahoma Power and Water Co. bank notes, and for expansion purposes. • Raleigh Red Lake Mines, Ltd., Toronto, Can. Jan. 7 filed 460,000 shares of common stock. —Mark Daniels & Co., Toronto, Canada. Underwriter Price-j-25 cents share in Canadian funds. Proceeds—For exploration .and development of mining property. Red Rock Bottling Co. of Cleveland (letter of notification) 40,656 shares ($1 par) common. Price—$1 each. No underwriting. For work¬ ing capital. Jan. 23 „ Reiter-Foster Oil Jan. 16 stock. Price—80 W. Bennett & Co. • Corp., New Yorl# 180,000 shares (50c par) (letter of notification) common For cents," Underwriter—Frank working capital. San Francisco Metals Co., Prescott, Ariz. (letter of notification) 100,000 shares (no par) non-assessable capital stock. Price—$1 each. No under¬ Feb. 12 writing. To develop mine. 30 filed Caster 80,000 & . Truck • • . Corp., Albion, Mich. shares of common stock (par $1). by amendment. Price together with funds from private sale of $600,000 of 4%% debentures and $250,000 Underwriters—Names to be filed —$7. 6% Proceeds—Proceeds subordinated debentures, will be used to pay off indebtedness. South Carolina Electric & Gas Co. Dec. 2 filed 80,858 shares ($50 par) cumulative convert¬ ible preferred and 404,293 shares ($4.50 par) common for sale, and 687,293 shares reserved for conversion of preferred. Underwriter—Kidder, Peabody & Co., New York. Offering—Shares initially will be offered for sub¬ scription by company's common stockholders, the pre¬ ferred basis. on a 1-for-10 basis and the Unsubscribed common shares on a l-for-2 will be offered publicly. Proceeds—Proceeds together with other funds will be Used to purchase all of the outstand¬ ing common of South Carolina Power Co. from the Commonwealth & Southern Corp. at the rate of one share for each 10 held. April 9. common share for each 3V2 shares held. Price by amendment. Offering—To be offered at par to For work¬ Jan. 30 filed of (2/20) $10,000,000 first mortgage bonds, series due 1978. Underwriting—Halsey, Stuart & Co. Inc. on Feb. 18 bid 100.2599 for a 3 V&% coupon. Price—100.75. Proceeds underwriting. Price—By amendment. Proceeds— Construction program and retire short-term loans. Jan. Dec. 22 filed 199,627 one 141,101 Racing Association, Inc., shares ($10 par) common. No un¬ derwriting. Price — $10 a share. Proceeds—To build trotting and pacing race track near Ocean City, Md. Feb. filed Service Berlin, Md. Ohio Public Service Co. 6 at rate of a , Co., Seattle, and Pennaluna & For developing mining claims. Pacific Gas and Electric, Louisville 12 B. No V land Public Service Co. will waive its Northeast Airlines, t (Ky.) Gas and Electric Co. $8,000,000 first and refunding mortgage bonds, due March 1; 1978. Underwriters—To be deter¬ mined through competitive bidding. Probable bidders: Feb. To raise surplus for policy reserves. common share. Underwriters—Kidder, Peabody & Co., and Blyth & Co.t Inc., New York. Offering—To be offered#present holders Orlando, Fla. Nov. 28 filed 34,900 ~ tive Co., writers—H. M. Herrin & Proceeds—To develop mining properties. # Insurance (letter of notification) 5,296 shares of Price—$30 each. Underwriter—Nathan Mining Co., Spokane; Wash.' Jan. 28 (letter of notification) 100,000 shares of non¬ assessable capital stock. Price—32 cents each. Under¬ mon - June 27 filed 300,000 shares. ($1 par) common treasury stock. Underwriting- — To be supplied by amendment' a products. Standard Co., Wallace, Idaho. basis of $100 of debentures for each 40 shares Frlce—50 cents and 15-year convertible Unsubscribed publicly installment notes.' subsidiary Price—Par for each. Public Service Co. of New to be issued in Nevada-Stewart Light Co., St. Louis, Mo. sinking fund Brothers, Goldman, Sachs & Co.; and The First Boston Corp. Offering—To be offered initially to common stockholders of record Feb. 24 16 stock. debentures/ Underwriters—Lehman held. certain National Feb. Kansas Soya Products Co., Inc., Emporia, Kans. 3 (letter of notification) 3,157 shares ($95 par) Laclede Gas in terests stock. Feb. common partnership inaffiliated companies. per Procurement Services, ing capital. (2/24) or (lc par). Price— 100,000 shares will be of¬ than Inc., Washington, D. C« 13 (letter of notification) 500 shares ($100 par) preferred stock and 250 shares ($1 par) class A common Offering—63,785 are more employees, and officers at 87 V2 cents Public Francisco. Not Feb. to be publicly offered (25,000 on behalf of and 38,785 for account of Marcus Nalley, Chair¬ man); 20,000 shares will be offered to employees, execu- • preferred. Price—$95 a share. Undewriter—Kenneth Van Sickle, Inc., Emporia. For additional working capital. ; San share. per Co., New York. Proceeds—For capital equipment and working funds. Business—Com¬ pany will manufacture small car in $1,000 price class. are Business—Food Dec. Feb. 4 filed $6,084,000 Co., & outstanding first mortgage bonds. Underwriter—Tellier & common 35,367 shares acquisition of all publicly held stock der, Peabody & Co. Proceeds —For construction and other corporate purposes. Business—Utility company, i 119,152 shares of To refund — Playboy Motor Car Corp., Tonawanda, N. Y. fered to of tives and directors and Underwriters—To First Boston Corp., and Blyth & Rogers shares Electric be Feb. .13 filed 20 000,000 shares common company Kansas Gas all . Proceeds stock (par $1.25). Underwriters—Walston, Hoffman & Goodwin and Hart¬ 150,000 to Inc. and Nalley's Inc., Tacoma, Wash. Bronze Co., ■G filed balance one share mortgage bonds, due 1967. Underwriters—Kuhn, Loeb & Co.; A. G. Becker & Co., Hemphill, Noyes & Co. Price by amendment. Mo. Price—$1,375 per share. Underwriter— Olifiers & Co., New York. Proceeds to selling Jan. 15 filed 10 the one Pittsburgh Steel Co. . stockholder. plan. offered initially Price by outstanding pre¬ applied to working Proceeds—To redeem with capital. (par $1). New Castle, Pa. shares common stock (par 50<J). Underwriter—Lee Higginson Corp. Proceeds — Stock being sold for account J. P. Flaherty, a stockholder. Nov. , Bean (letter H. Frazee be share for either new Temporarily deferred. Myles Plastics Corp., Jersey City, N. J. Feb. 10 (letter of notification) 5,000 shares of shares tion Kansas City, • Feb. 5 filed $20,000,000 first mortgage bonds, due 1978; $5,000,000 sinking fund debentures, due 1968, and 1,500,000 Morris Feb. U. S. authorized agent and one cumulative preferred stock or cumulative second preferred stock. 4x/4% ferred pre¬ Co., Yellow Springs, O. ' notification) $100,000 20-year 5% promissory notes, second series. Underwriters, none. For new plant, machinery and equipment, materials and suppiies for the operation of a non-ferrous foundry. Underwriter—Paul E. Offering—To of 4^4% amendment. ' derwriters—Company has asked SEC to exempt sale from competitive bidding. If competitive, probable bid¬ ders include: The First Boston Corp. and Blyth & Co., Inc. (jointly); Kidder, Peabody & Co. and Shields & Co. (jointly). Price—By amendment. Proceeds—Toward financing a $6,000,000 construction program and for other corporate purposes, which may include payment of a $750,000 temporary bank loan. Quebec Co. & Nov. 20 filed $6,500,000 of first Inc., Minnesota Power & Light Co., Duluth with the regis¬ Manufacturing Co. and Stickley Brothers, Inc., both Illinois corpo¬ rations, and the Luce Corp. and Stickley Bros. Institu¬ tional Furniture Co., both Michigan corporations. In¬ definitely postponed. Collins share working capital and equipment. Feb. 3 filed 100,000 shares of four furniture companies to be merged trant. The merging companies are Toccoa Jan. Julien Jan. 9 (letter of notification) 30,601 shares ($1 par) com¬ mon stock. Price—$6 per share. Underwriting—None. writers—Brailsford & Co., and Straus & Blosser, Chicago. Price—$9.25 a share. Proceeds—The shares are being Asbestos Pet Milk to stockholders on basis of (par $20). Underwriter—Guard-, General corporate purposes. Securities Corp. . and series stock Mid-Continent Airlines, Corp., Chicago July 24 filed 120,000 shares ($1 par) common. land of Co., St. Louis, Mo. 13; filed 100,000 shares of preferred. Underwriters —Kidder, Peabody & Co.; G. H. Walker & Co,, and working capital. Acceptance Corp. of Calif., Francisco, Calif. ! (letter of notification) 3,849V2 shares first 11 Purchase none. Feb. . Illinois-Rockford International • Calif. (50c par) common. Under¬ Offering—Shares are to be issued upon Mercantile ferred 5% Underwriters, construction of cotton oil mill. of Feb. tion program. ($10 par). the counter Pasadena, Proceeds—For additional Pecos Valley Cotton Gil Co., Roswelt, N. M. 9 (letter of notification) 20,000 shares of common Feb. slock of common stock purchase warrants issued in July, 1945. Price—Two shares per warrant at $6 a share. $150,000 will be used to reduce outstanding short-term to the none. San loans and balance Drug Co., Topeka, Kan., and the $332,500 balance will be used for working capital and expansion of business: retail drug stores. common 27,788 shares May 4. 1948 bank & Blosser, Chicago. Price—$5.25 per share. Proceeds—$140,000 will be used to reimburse company exercise ———__——Bonds Southern California Gas Co to Underwriters, writers—None. ....Debentures April 6, 1948 Counties Gas Co To be offered filed Straus • Corp., Clearwater, Calif. notification) 1,440 shares market price. 1948 Public Service Co. of N. H Southern Macotl ($1 Common _— March Offer will expire March Feb. 9 (letter of Bonds Drugs, Inc., Kansas City, Mo. 100,000 shares of preferential cumulative participating stock ($4.50 par). Underwriter27 35c Macco • March 5, Parkview Jan. for each two Corp., Clearwater, Calif. Feb. 9 (letter of notification) *1,440 shares of stock ($1 par). To be offered to public at counter market price. Underwriters, none. —Bonds, Debs. & Com. March common 15, 1948. February 26, 1948 . share of McClanahan one shares of Great Lakes common. 1948 Wisconsin Power & Light Co. 11:30 a.m. (EST)_____: . extensions, additions and im¬ provements to telephone plant and repay outstanding advances to parent, American Telephone & Telegraph Co. Expected about March 16.; Grand Rapids, Mich. Dec. 30 filed 260,000 shares ($1 par) capital stock. Un¬ derwriters—None. Offering—Shares will be exchanged for $1 par stock of Great Lakes Chemical Corp. on the .Bonds 24, Telephone & Telegraph Co. 13 filed $75,000,000 30-year burse treasury for costs of McClanahan Oil Co., • Pacific 41 debentures, due March 1, 1978. Underwriters—Names to be determined by. com¬ petitive bidding. Probable bidders: Morgan Stanley & Co., and Halsey, Stuart & Co. Inc. Proceeds—To reim¬ utility company. February 20, 1948 .v..February • Feb. Co. and Equitable Securities Corp. Missouri-Kansas-Texas RR.___--Equip. Trust Ctfs. (837) (Continued on page 42) 42 THE COMMERCIAL (838) (Continued from page 41) Southwestern Electric Service Co., Waco, Tex. Feb. 9 (letter of notification) 25,000 shares of common stock offered be to Underwriters, stockholders of record to Feb. 16. For construction. none. Southwestern Gas & Electric Co. Nov. 5 $7,000,000 30-year first mortgage bonds, Underwriting—To be determined at competi¬ filed series B. tive bidding. Probable bidders: Halsey, Stuart & Co. Inc., Lehman Brothers and Lazard Freres&Co. (jointly); White, Weld & Co. and Kidder, Peabody & Co. (jointly); BIyth & Co., Inc. and Stone & Webster Securities Corp. (Jointly); Glore, Forgan & Co. and W. C. Langley & Co. (jointly); Harriman, Ripley & Co.; Merrill Lynch, Pierce, Fenner & Proceeds—To Beane. reimburse construction finance program, States Life Insurance Co. Feb. 10 filed reorganization certificates. Underwriters, none. To as capital stock in a proposed old line life in¬ (letter of notification) William Burnest Palmer be used surance Refrigerating & Warehousing Corp., Washington, D. C.* Feb. 17 filed $700,000 4% 10-year first mortgage bonds due 1958. Underwriter—Alex. Brown & Sons, Baltimore. Price—Par. Proceeds—To retire $635,000 of 4 Vz % first mortgage • Uni-Flow Feb. 6 stock (letter participating* preferred stock, ($1 par) 160,000 and shares (50c par) common stock, of which 40,000 will be sold and the remainder reserved for conversion. Under¬ writer—White & Co., St. Louis, Mo. Price—$8 for the preferred stock.and $2.50 for the common. This stock is- being offered by stockholders who are members of the Belt family. • Sunland-Tujunga Telephone Co., Sunland, Calif. Feb. 9 (letter of notification) 8,000 shares of 5%% cumu¬ lative first preferred ($25 par). Underwriters none. For purchase and installation of extensions, additions and 1, Business—Market 1948. Engine Corp., Washington, D. C. of notification) 15,000 shares common Options to initial holders of such ($5 par). stock to be filed by amendment. Proceeds—To purchase * 75% interest in the capital stock of Devonian Oil Co., the 5 other 25% at • of Feb., 11 common Power Co., Underwrit¬ Richmond, Va. $10,000,000 first and refunding mortgage bonds due ,1978, and $11,753,800 convertible debentures^ Underwriters—Bonds to be offered .underwriting. 29 Power & Light Co. j . J ' (2/25) ! filed (jointly); BIyth & Co., Inc.; The First Boston Corp.; ; Offering—Bonds will be offered publicly ) will be offered to holders of 4%.% preferred- . while stock Price by < ness & Co., and W. C. Langley & Co. (jointly); Halsey, Stuart & Co. Inc.; White, Weld & Co.; Merrill Lynch, Pierce, Fenner & Beane, and Hallgarten & Co. (jointly). Deben¬ Security No Shields & Co. under competitive bidding. Probable bidders; Stone & Webster Securities Corp.; The First Boston Corp.; Glore,. Forgan Prospective cents each. $3,000,000 30-year first mortgage bonds. 1 Series B, and 30,000 shares ($100 par) 4.80% cumulative ; preferred stock. Underwriters—Only the bonds will be i underwritten under competitive bidding terms. Probable ) bidders: Halsey, Stuart & Co. Inc.; Glore, Forgan & Co. j, and Harriman Ripley & Co. (jointly); W. C. Langley & j Co., White,. Weld & Co. and Kidder, Peabody & Co. ; filed 1963. Price—25 Wisconsin ment. & stock. common Trusteed^ Funds, Inc., New York Virginia Electric ^ Mining & Milling Co., Inc., Seattle (letter of notification) 200,000 shares (IOC par) For general corporate purposes. Dec. 657,500 shares of capital stock. being acquired by Gulf Oil Corp. Webfoot $10 per share, in proportion to initial ers—Lord, Abbett & Co., Inc., New York, is selling agent.. Price based on market prices. Proceeds—For invest¬ due , rate com¬ expenses. 17 ' 150,000 shares ($100 par) cumulative con- I preferred stock. Underwriter—Merrill, Lynch, ; Pierce, Fenner & Beane, New York.'Price and interest j stock. Underwriters, none. For manufacture, testing and production of the "Uni-Flow Engine," the "Cobra Coaster Brake," and such other products as may be produced by company, and for other • (2/26) Feb. 5 filed stock, exercisable in discretion of directors, to pur¬ chase in the aggregate. 15,000 additional shares of Feb. j Warren Petroleum Corp. mon Dec. 29 filed Inc., Bloomington, III. April to finance construction. vertible Union Steak 'n Shake, due bonds Corp., Boston. common penditures, including $11,000,000 of bank notes issued operators. company. Feb. 2 filed 40,000 shares of 50c cumulative convertible by Stone & Webster Securi- ' Offering—Debentures to be offered i stockholder? of record March -15 at rate of < $100 of debentures for each 25 shares held. Price of \ debentures, 100. Proceeds—To pay for construction ex- * ties Terminal • Thursday, February 19, 1948 tures will be underwritten treasury for expenditures made for such purpose. holdings Southwestern CHRONICLE to common • FINANCIAL improvements to telephone properties and facilities and to • & amendment. Proceeds—To pay bank indebtedBids—Bids for purchase 7 . and for construction costs. of bonds will be received at office of Middle West Serv¬ ice Co., 20 North Wacker Drive, Chicago, up to 11:30 a.m. ' ; (CST) Feb. 25. "V" ^ - \ /: v-' <\ " Offerings (NOT YET IN REGISTRATION) INDICATES ADDITIONS SINCE PREVIOUS ISSUE • 100,000 additional shares of mortgage bonds and com¬ stock. Plans call for opening of bids on the offering March 30, with bonds and stock being offered to the mon on public on April 1. Proceeds of the bonds will be used to retire bank loans. Funds from stock, will be used to take the additional ders—Halsey, Stuart & Co. Inc.; BIyth & Co., Inc.; MerLynch, Pierce, Fenner & Beane; Harris, Hall & Co. (inc.). : Boston Corp.; Halsey, Stuart & Co. Inc.; Dillon, Read & Co.; Coffin & Burr, Inc., and Spencer Trask & Co. (jointly). • Gulf * , Feb. 17 reported company may sell $1,000,000 bonds to meet construction • Kansas Gas requirements. & > v Feb. 17 Shields & Co. (bonds only). year with $3 to $4 million bonds. Columbia Gas & Electric Corp. due 1973. (3/23) Connecticut March ized 17 Interest rate, offering price and competitive preferred 1,200,000 from stock shares will from (no par) 1,704,000 shares (no vote on increasing author¬ 600,000 shares (no and the authorized par) to 2,500,000 Presjdent C. L. Campbell- par) to says but the increase is desirable to enable the company to. develop a suitable plan for financing its expansion pro¬ gram. - Consolidated Edison Co. of New York, Inc. Feb. 18 company applied to New York P. S. Commission for authority to issue $57,382,600 which are to be convertible 15-year 3% debentures, common stock at $25 into a share. Debentures will be offered to common stock¬ holders at par in ratio of $5 principal amount for each share held. Company will invite bids for underwriting the issue and the purchase of any unsubscribed deben¬ tures. Probable bidders: Morgan, Stanley & Co. to the extent Halsey, Stuart & Co. Inc.; The proceeds will be applied of • 17 000,000 directors. will be 17 reported company may be in market this year with $15 to $20 million new securities, the nature of which >emains to be determined. (3/1) Proposals must be submitted on or before March 1. Light Co. Feb. 7 reported company plan the sale in April of $4,090,000 of debentures. Probable bidders: Halsey, Stuart & Co. Inc.; The First Boston Corp., and BIyth & Co, Inc. (jointly). • more for construction purposes by the summer of 1948, but timing, and type of future financing will be governed largely by progress and financial market con¬ new money ' • debentures. Probable bidders: new bonds , • May 4, according to present plans. Morgan Stanley & Co., the other by on bidders: Standard Accident March stock ■ 9 stockholders Expected issue. The First Insurance will by 140,750 shares. stockholders in ratio of vote Public Service New one new Boston increasing shares will Corp. will underwrite of New • Texas Electric Service Co. ■* - Light Co. plans issuance of $7,000,000 of. debentures early in April. Probable bidders: The First Boston Corp., Halsey, Stuart & Co. Inc., BIyth & Co., Inc., Smith, Barney & Co. and Kidder, Peabody & Co. (jointly); Hemphill, Noyes & Co. and Drexel & Co. (jointly); W. C. Langley & Co., and Glore, Forgan & Co. (jointly); White, Weld & Co.; Harriman Ripley & Co-., and F. S. Moseley & Co. (jointly); Lehman Brothers. bidders include BIyth & Co., Inc.; The First 7 reported Utah (jointly); Otis & company Power & Light Co. Jan. 28 reported company working on plans for 000 new mortgage bonds, plus $5,000,000 San Diego Gas & Electric Co. Company has applied to the California P. U." Com¬ mission for authority to sell at competitive bidding $10,000,000 first mortgage bonds, series C, due 1978. Halsey, Stuart & Co. Inc.; BIyth & Co., Inc.; Harriman Ripley & Co.; Kidder, Pea¬ body & Co., and Dean Witter & Co. (jointly); The First Boston Corp.; Salomon Bros. & Hutzler; Lehman Brothers; Merrill Lynch, Pierce, Fenner & Beane: Probable Sierra bidders Pacific reported bonds. Inc.; , , V Jan. 16 reported company plans in March $15,000,000 in bonds, The bidders First Boston include: Corp. Halsey, and BIyth new $3,000,- ' deben¬ Stuart & & Co., Gov Ine. (Jointly); Kidder, Peabody & Co., Merrill Lynch, Pierce, Fenner & Beane, R. W. Pressprich & Co. and- Equitable Securities Corp. (Jointly); Smith, -Barney & Co. and Securities Corp. (Jointly); "White, Weld. & Co>.: Harriman Ripley & Co. West Penn : Power Co. The company on Feb. 10 asked the to' sell publicly, at competitive SEC for permission bidding, $12,000,000 of plans sale Probable bidders company Probable "Union Power Co. ; first mortgage bonds, series M, and 50,000 shares of pre¬ ferred stock, series B ($100 par). - Probable bidders: competitively of Halsey, include: - Inc.; BIyth & Co., Inc. May 4. tures. include Southern California Gas Co. on - " Texas Power & Feb. Mexico Corp., and White, Weld & Co. Co.; Glore, Forgan & Co. ered the ...•■■ , Langley & Co. (jointly); White, Weld & Co.; Hemphill, Noyes & Co, and Drexel & Co. (jointly). Expected about March 15. plans under consideration Boston 11 to for each 2 xk shares held. \t Feb. 17 company asked SEC for permission to sell through competitive bidding $5,000,000 mortgage bonds and $5,000,000 of debentures. Probable bidders: Halsey, Stuart & Co. Inc.; The First Boston Corp.; Harriman, Ripley & Co.; BIyth & Co., In,c.; Kidder, Peabody & Co., Halsey, Stuart & Co. and Smith, Barney & Co. (jointly); Glore, Forgan & Co., Cities Service Co. $3,500,000 capital offered (5/4) filing with the SEC late with bids to be consid¬ Proceeds for extensions. Probable Bid- " „ applied to the-SEC for per¬ mission to sell through competitive sale 339,639 shares (entire holdings) of Public Service Co. of New Mtexico. Feb. be and W. C. Co. ; ; Co. on , • Inc.; The First Boston Corp.; Halsey, Stuart & Co. Inc.; Glore, Forgan & Co.; Harriman Ripley & Co., and Stone & Webster Securities Corp. (jointly). • through sale of "bonds. Halsey, Stuart & Co. Inc. $40,000,000 bonds for new money pur¬ probably late in March. Probable bidders: Dillon, 11 : J * * Probable Read & Co. • ■ petitive bidding (2/19) Power Co. Feb. 16 reported company has for sale of about poses, (Jointly); White, Weld & Co. Under the program, holders of common stock up Ohio ■.. Southwestern Beil Telephone Co. Feb. 11 it is expected that company's debenture financ¬ ing will be for the full $100,000,000 authorized by stockholders. The big issue will be put up for sale at com¬ & Telegraph Co. offered Stuart & Co. Detroit Ellison Co. The 1941 annual report states: "We expect to need $1,000,000 RR. Inc.; Morgan Stanley & Co. • The Public Service Corp. of New Jersey is inviting pro¬ posals for the purchase of 7,460 shares of common stock Power & the market this rights to purchase new shares at par to a total of $19,188,100. In addition, company plans to offer under competitive bidding up to $25,000,000 ($100) a '''' * - construction requirements reported plans for sale of securities up to $45,to finance new construction were approved by Probable Consumers Power Co. Dallas be in Mountain State Telephone Feb. • of County Gas Co. may * Southern Indiana Gas & Electric Co. Feb. 17 reported company intends to raise Company will receive bids up to Feb. 19 for the purchase of $1,620,000 equipment trust certificates, dated March 1, 1948 and due semi-annually in 15 years. Probable bid¬ ders: Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutzler; Shields & Co.; Harris Hall & Co. (Inc.); Harriman, Rip¬ ley & Co. and Lehman Brothers (jointly). Feb. County Gas Co. • Mississippi Power Co. $24,995,329 toward the redemption of 273,566 shares of the 2,188,885 shares of $5 preferred stock outstanding. Bidding expected March 23. Feb. company Missouri-Kansas-Texas in • reported \ 1 $1,000,000 for Feb. 17 reported company may sell to meet construction requirements. common shares (no the company has immediate plans for the issuance of additional stock, par). no Light & Power Co. stockholders Co. Michigan Gas Storage Co. • underwriting terms will be governed by bidding. Probable bidders: Morgan Stanley & Co.; The First Boston Corp.; Halsey, Stuart & Co. Inc. Company plans to invite bids to be opened March 23. • .Light Co. has asked SEC per¬ mission to sell publicly 250,000 shares of its. Kansas holdings. It has also requested to be exempt from the competitive bidding rule. • ''' - First & * Feb. 9 corporation asked the SEC for authority to issue and sell at competitive bidding $45,000,000 of new de¬ bentures, American Power The • ders—BIyth & Co., Inc.; Halsey, Stuart & Co. Inc.; The Boston Corp. and Harris, Hall & Co. (Inc.) : (Jointly); W. C. Langley & Co. and Glore, Forgan, & Electric Co. of business expansion in Halsey, Stuart & Co. Inc. (bonds only); BIyth & Co., Inc., and The First Boston Corp. (jointly); Merrill Lynch, Pierce, Fenner & Beane (common); Harriman, Ripley & Co.; White, Weld. & Co.; Merrill Lynch, Pierce, Fenner & Beane and Kidder, Pea¬ body & Co. (jointly on bonds); Salomon Bros. & Hutzler; care ■ , Southern Counties Gas Co. (4/6) Jan. 16 reported company plans filing with the SEC late '• in February $7,000,000 in bonds, with bids to be conskt- » ered on April 6. Proceeds for extensions. Probable Bid- • Co. Power • rill common 1949. Probable bidders include: . " Probable bidders for bonds if issued: The First ditions." California-Oregon Power Co. - Feb. 3, A. S. Cummings, President stated company has a tentative working schedule for sale of $4,500,000 first Halsey, Stuart & Co. Ine."(bonds"only); W. C. Langley & .Co. and The First Boston Corp. (jointly); Lehman Brothers; Kidder, Peabody & Co. The company also issue $2,500,000 of additional (no1 par value) stock, to be offered first to its stockholders. West proposes to common Penn Electric Co. (parent) -eposes to purchase all * Volume' 167 Number 4674 THE COMMERCIAL ^ price the fixed at was & FINANCIAL CHRONICLE (839) 100.485 where yielded 3.10% . and all you need to get along is to get enough of it. w.. Riehter Visting New York Still Piling Up issue Henry J. -Riehter of Scherck,, Riehter Co., St. Louis, is a visitor in New York. While here, he is Quincy Cass Adda . moved rather well. ; , r 1 Philadelphia Electric The sobering effect of recent developments in the economic world, such as the levelling -off of commodity prices from their in¬ * I : Latest entry into the new cap¬ ital handicap is the group of com¬ making his headquarters at East¬ man, Dillon & Co., 15 Broad panies comprising Commonwealth Street, New York City. banking interests' are not keen & Southern Corp. Southern Com¬ for small undertakings is difficult pany, fofmed to replace Common-' wealth as the With Bache & Co. holding unit for to-explain particularly in view of four-operating utilities in the MIAMI BEACH. FLA.—William the apparent relish with which South, M. Jackson is with Bache & proposes to raise $20,000,Co., OOO via the common stock route. they go after such issues. 2809 Collins Avenue. Just how 1 idea that some New people have the York investment Power Co. is a prospect for new financ¬ ing of between $15,000,000 and $20,000,000 although no real de¬ DIVIDEND NOTICES , flated peaks, can naturally be expected to make for some degree - of caution industries planning future expansion. But; unless thing that be in file "of does of construction facilities, new war. upon as v its t vestors ability to to borrow from finance such shaping are center of cannot no "small/' counted mor- ' Vi\ looked groups this like the New-York simply go enjoyed earnings, and, despite the tax pen¬ alty involved}-'has- been retaining large portion a of such earnings for reinvestment in its properties. Studies • coming to now hand Company 1948 industry : February 17, 1948, a dividend of Twenty(/5c) per sjiare was declared on Capital: Stock of -MAGMA COPPER COMPANY, ,payable March 15, 1948 to *. The apply to rule and each most likely will be in the mar¬ ket for funds, from but the point of view of the industry, it appears well " to provide / fortified with cash for its needs February 17,'1948, (56^) Capital Stock The State of Illinois this bid which figured out » terest ; nually. basis of cost i of < , initial - i •« i ~ *' - ' ' Chipping to Every chasing ' • moved I ideas . . The Dividend of 1 their mon is 1 intention COMMON A TKKASUIUiU '..f given that New Connection trader record Capable mediate compensation to start. Commercial & Fi¬ Chronicle, Stockholders of Common Stock 15c idend per of for record business March 1948. The of transfer books will not be October 1st September In CANADIAN PACIFIC 25 Park If. Y. Notice on meeting of the Board of a Directors Railway of,< Canadian Company dividend of held three Pacific today per a cent (seventy-five cents per share) on Ordinary Capital Stock in re¬ spect of, and out of earnings for the American Cyanamid AT .Company - A can DIVIDEND dividends 1948. A $1.75 tive DIVIDEND Cyanamid Company on Febru"- record 17. pany, record at the close of business March 4, 1948. W. PI STURTEVANT. ■ . ' Secretary to stockholders of February 27,- 1948. Transfer books will payable April 1, 1948, to the such stock of 1-948 closed be on Preferred Stock dividend. Dividend' checks will be mailed by - the Guaranty Trust Company of New York. m ^ February 11, 1948. Treasurer. also payable the on 1948. obtain to these divi¬ 9th the Meeting, to be held February next) on and March 31st holders Ordinary Stock Warrants of de¬ must posit Coupon No. 201 with the Guaranty Trust Company of New York, 32 Lombard Street, 'London, E. C. 3, seven clear business days (excluding Saturday) ment Both before pay¬ be made. can dividends will be paid only, namely, Coupon No. 201. The usual half-yearly dividend on February 23, 1948. to dend total per point out that this divi¬ of three per cent making a dividend payment of five cent in respect of operations for the year 1947 ' by only other fs made possible income than from railway sources operations; of one Coupon 2V» % on the 5% Preference (less Income Tax) for, the ending 30th September 1948 will also be payable on the 31st Stock year March 1948. Coupon No. 89 must be depos¬ ited with the National Provincial Continued increases in gross earn¬ Bank Limited, Savoy Court, ings from freight traffic had been largely offset by decreases in pas¬ senger traffic and by increases in London, W. C. 2, for examination five clear business days (excluding wages and and the cost of materials supplies. Bramley, Secretary before Saturday) Strand, payment is made. DATED By order of the Board, Frederick F. S. CONNETT, Tax) against the deposit of p.m. able payable April February 27, 1948 and will reopen March 24, 1948. Transfer books will not close for the l°!o Cumulative share on the outstanding shares of the Common Stock of the Com¬ holders of Stock declared pay¬ on March The Directors consider it desir¬ Preference regular quarterly dividend of per share on the 7% Cumula¬ Preferred was shilling at 3 . March 1948, declared a quarterly dividend of twenty-flve cents ($.25)" per Prior 15, 1948 to stockholders of record April 1, 1948. A quarterly dividend of $1.50 per share on the Common Stock payable 1943. The Board of Directors of Ameri¬ ary Convertible 1947 one 31, 1948, to Shareholders of record declared: Stock payable March 15, 1948 to stockholders of record February 27, ($.8751 per share oh the shares of the Com¬ pany's 3Vnrk Cumulative Preferred Stock, Series A, payable April 1, 1943, to the holders of such stock of record at the close of business can were year the 30th to of Or¬ from General the after able in Canadian funds A tive 17, 1948, declared a-quarterly dividend of ,eighty-seven and one- COMMON of the American Woolen regular quarterly dividend of $1 .00 per share on the $4 Cumula¬ <■ Cyanamid Company on Febru¬ March 4, the meeting of the Board of Di- Company, held today, the following f PREFERRED a rectors year 1947 1948 order nual At issued the for dends (subject to the Final Divi¬ dend being sanctioned at the An¬ RAILWAY COMPANY Dividend Div¬ £1 of Ordinary Stock (free of Income February 17, 1948. the Final a the on Stock the ' incorporated . dividend 31st March Peterson, Treasurer of 1948 the to on the issued on dinary STEFFLER American Woolen lany payment the terim closed. H. GIVEN their Annual in Ordinary Stock year ended 30th Septem¬ ber 1947 of one shilling per £1 of Ordinary Stock (free of Income Tax) and have declared a first in¬ have payable April 1, stockholders HEREBY the March 31st Preferred dividend close IS Report have recommended of 4%% the Secretary & Treasurer with man of accomplish¬ of taking full charge or installing trading de¬ partment, building dealer busi-. ness, etc. Opportunity more important than; amount of im¬ nancial the dividend on Convertible a the to at NOTICE that the Directors a Stock half cents Place, New York 8, share declared, both 1948, STOCK. STOCK February 10, 1948 outstanding M 220, and on been ary Box FOR ORDINARY AND PREFERENCE STOCK quarterly per Stock PHILLIES The Board of Directors of Ameri¬ SITUATION WANTED liaison 11/16c share report- j dealer regular 29 Cumulative Philadelphia, Pa. February 13, 1918 at NOTICE OF DIVIDENDS TO HOLDERS OF STOCK WARRANTS TO BEARER Youngwood, Pa. 1 PREFERRED on the close of at February 27, 1948. MORSE G. DIAL, Secretary and Treasurer ROBERTSHAW-FULTON CONTROL!! final - Desired by well-known business COMPANY ZVs% coupon. original stockholders of record BRITISH-AMERICAN § Checks will he mailed. outstanding capital Corporation has been payable April 1, 1948, tp this TOBACCO COMPANY, LIMITED record March 1, 1943. . ($1.00) the on of declared, 1948. Company g §§ Beachley, Secretary-Treasurer hereby Walter A. the Illinois was proven ment. Corporation 16, 1948, to stockholders of gj- February 27, 1948. regular quarterly dividend of 40fr per share has been declared on the Com¬ Co.'s a stock per of the market convinced the selli ing group that slight revision was !• in order' and the final offering and this Common Stock on share per 1, § declared payable March of such slock of record at the close of business February 27, 1948. case April February 16, 1948 1 Atlas Corporation " Notice I t the Common** quarterly of Atlas Corporation, payable March 20, 1948. to holders the payable WALTER to reoffer at 100.875 to yield 3.08%. But evidently a feel 1 of (37Hc) cents on America's N?i ci<jar Fit reconsider issue with { edly wag February 16, 1948 $15,000,000 of first mortgage bonds. Bankers paid the company 100.1499 for the ; Stock % IV4 ' r share the Com¬ payable first in Power per 10, . This happened again the other day a on regards reoffering prices. to as on Charles E. often bankers pur¬ issue find themselves so an and one-half I • carried CARBON 133 i mailed. • 13A% coupons while this one carries rates of 1% and 2%. ' ; an- interest cost issue Company, the close of business and »- •I 1.9485%. The , an per share the Checks will be On the current offering the best bid set » 1.676% cents of March, 12, 1948, to shareholders of record net in- a of 50 Stock mon 000,000 of the issue and received a ' A dividend of thirty-seven COMPANY meeting held today, declared a dividend Last April Illinois sold $300,- STACY, Secretary. A cash dividend of One dollar share has per J. M. REEVES, Treasurer Jf' 1 COAL at stitutional investors, declared, CONSOLIDATION ready market for them among in- '• CARBIDE NOTICE 25c 78 dividend of FTFTY PITTSBURGH week 4' ; a Gl;S MRRV1CKA, Treasurer. a - CORPORATION will not be closed. The Board of Directors of I soldier bonus bonds and found of the close of business March 3, February 27, 1948. ness | marketed the last $85,000,000 of its i DIVIDEND dividend The transfer books of the j»er share wa;r declared on the of NEWMONT MINING Cost of Bonus Money * AND " REEVES BROTHERS, inc. stockholders of record at the close of busi¬ for - , THOMAS H. February 16, 1948. CORPORATION, payable March 15, 1948, to the close of business March at CNI8N President. A time ahead. some t record 22, 1948. February 11, 1948. , Dividend No. On u|>on the outstanding $3 Preference Stock,, pay¬ April 1, 1948 to the holders of able SHUTTS, Corporation CENTS share per Cumulative share. per 1948, to stockholders of record at . | 46l/i cents record INewmoiit Mining every accordingly some company, and . of been does . Wilmington, Delaware e: dodge, Treasurer. h ■ Treasurer.. Corporation February 18, 1948 stockholders of record at the close of business February 27, 1948. ■, SCHALL, 15, stockholders On five Cents M. The Board of Directors of The United Corporation has declared the regular quarterly dividend of 75c 1, 1948. EDWARD L. No. 102 COMPANY the March payable SUGAR $3 Cumulative Preference Stock share of RIGO of The United at the close H. E. DODGE, Secretary. New York. N. Y., a Ex¬ divi¬ a distribution after deduction African non-resident sharehold¬ South tax will amount to retained approximate¬ purposes. not Stock PORTO ■ By order of the Board of Directors the ly 65% of their net earnings for <" such to March any Dividend indicate that last year, for example, the oil companies as an .» Common Stock February 17, 1948. Directors has this day declared a quarterly dividend of 50c per share on the $25.00 par value 8% Preferred Stock outstand¬ ing; and a quarterly dividend of One Dollar par share on the outstanding Common Stock; all payable on April 1 1948 to stockholders of record at the close of business on March, 12, net Delaware dividend of 25c a the Angeles DIVIDEND NOTICES SOOTH The Board of Directors has de¬ clared Associates, Street, members Sixth Los change. Directors authorized the distribution of said dividend on the same date to the of the Dividend Notice on . the March 10, 1948 to the holders of record Of on ers of DIVIDEND NOTICES West of June un¬ ,, .shillings six pence per share on Ordinary Shares of the Company payable the 24, 1946. The by the rule that business is business and that substantial very 523 1948. Directors today declared Chronicle) Crouch has been added to the staff of Quincy Cass holders of American Shares issued under the terms of the Deposit Agreement dated IOWA SOUTHERN Financial S. dend of two the DIVIDEND NOTICES Tire No. Ordinary Shares of the Company February 27, 1948. UTILITIES COMPANY large/ has been fortunate in that has are funds in one. The petroleum industry, by and it and Co., new ? less than six different houses way up. Co. Storage seek to ANGELES, CALIF,—Lloyd F. Dividend The Board of The or derwriters in- to on Limited Southern In¬ Electric LOS of business first after units, & smaller amounts. But here again went Gas Michigan' Gas .7 be other diana O'okiep Copper Company yet available. are Two under-* takings, judging from the things tails Philadelphia Elec¬ issue, Looks industry, however, very definitely will not be relying on a no » . , out $15,000,000 Co.'s $25,000,000 in since Co.'s four bids. course tgage One • * Of of such programs are do¬ brought the was than tric will little more than Overcoming lag occasioned > by five years the less appear likely very with most cases offering marked now Power cards, the rank and industry needed ing not bonds total of nine bids this week, and Illinois rates, some¬ money the ahead- go is there tightening of to in among mortgage (Special The Board con¬ sidered first new Consumers : Iowa Power & Light Co/s of¬ fering of $6,000,009 of 43 i ary, the 16th day of Janu¬ 1948. BY ORDER OF THE E. G. BOARD, LANGFORD, Secretary./ Montreal, February 9, 1948. Rusham House, Egham, Sorrey. 44 FINANCIAL & THE COMMERCIAL (840) CHRONICLE Thursday, February 19; "1948 not is BUSINESS BUZZ most be to yet expected. The in the substantial provision reported on. ward • • longer than two yet a This years. one or mature decision of the Instead it is the leaders. And You from the Nation's Capital x allow be carried for¬ limited overall revision scheme is not BeVml-the-Scene Interpretations would program business losses to idea of two men. Most believe that overall revision is of little an use unless it tackles some substantive Likewise most people be¬ taxes. lieve that any Despite all the fuss and fury over the behavior of the commodity markets, one need not look for any broad change in the direction of Washington policies—Congressional or Administration—for quite some time. That change, if any, is not likely to come at all unless time, and unless they com¬ municate their effects to the vol¬ long and construction home of ume production. Even if this threatens, it will be quite a long time before any sharp reversal in the business picture, even if it industrial should if >";! ' The official Washington the beginning The this: was commodity in drop line at week the of cards" not serious. Even if it lasts it represents only, the Wash-out of excessive values. prices was flation than of deflation. officials words, the some of cried over will blown be by over Senator of or the business calamity. the This is ' appraisal, it may reported, be has which to markets, clining keeps ' been the President. It is with this diagnosis in mind that the President, despite the de¬ given GOP, in a • renew¬ be change of heart not a tion; levels, time. but drag there for some Then it will be time to be¬ t Administration the might turn and twist and shuffle off in another direction. « >£ There will be lots of talk about ity markets rally. Even the public works planners will be pressing for their programs of more court¬ houses and to outhouses more depression. For some time to come, however, none of this talk will mean anything. It may never mean anything in 1948. For a thing the President fs committed to the forecast that central will of the It is remain. theme strategy. election his The danger of defla¬ would have incontrovertible, to become loud, that the spending President would be course exactly 180 degrees. forced to so de¬ the and mand for government so his change Un¬ less the President becomes pan¬ icky, that just isn't in sight for two or three months—and then only is news that nearly assuming all business bad into spring. threatened is almost the BACK ON THE JOB . i / not in • - a people think that a sight. they Nevertheless, if that the caution market commodity break is establishing a new bus¬ iness the first breezes climate, of the change likely here reflect to out on loans. will show At in up And the loans most bank loans. caution real are moment the from estate great a deal of heavy thinking is being officials to the prob¬ given by lem of of the started ing modities torn take course com¬ Officials letting, in the are nature interest fighting inflation, and doing about it. If they the around Country I have decided to STAY IN BUSINESS — ★ lis . for Senate GI ' * and 1948 into law was acts. mittee is J South Shore Oil & Dev.3 H. & B. Amer. Mach. Pitts. Steel Foundry fall. If Chairman of ripe be might to Senate Foreign Relations actually did the not, Eisenhower, want General But derstandable. those who know/ Yandenberg to of the ury press will get House Old of a farm new the syphon from any diameter the Treas¬ Domestic & .to the farmers. beware pro¬ a It a premature permanent farm handicapped riculture a a about group tax on for cut drop; will forget about up prices. be ESTABLISHED 1919 Members 40 N. Y. Security Dealers Ass'n Exchange PI., N. Y. 5 HA. 2-8780 Teletype N. Y. 1-1307 Trading Markets: Ralston Steel Car Oregon Portland Cement fear that foreign And if tan¬ the its pru¬ in aid a so * Riverside Cement A & Bj Spokane Portland Cement. on. if LERNER & CO. ' Despite reports that the Con¬ gress will take up an overall tax Committee, it has got counter-balance its M. s. WlEN & Co. panic to finance exports to hold gential group in the Senate Ag¬ a New issues predic¬ will GOP will dence now program. by of obvious the majority to While the GOP leadership is se¬ verely Foreign] Securities revenues about the enactment worry of is the That afraid Roosevelt. probably of tions: as est dream of . There is bound to be lots of talk brilliantly glittering and potentially costly as the fond¬ is - Com- fight to - gram pre-convention Reorganization or frame-work a campaign. Com¬ House The have to make the may to frame a new per¬ about the new farm program. It "long-range" farm pro¬ is given impetus by the fall in prices of commodities. However, gram. If this were to come about, it would be something to worry barring something super - duper about. Any program for anybody bad, it will take a long time to reconcile opinions between the during an election year is likely to be costly. A new farm pro¬ House and the Senate, and be¬ gram this year would be even tween this, that, and the other It still looks like more costly than would be ex¬ farm lobbies. pected normally because the an extension for one or two years spark-pluggers for such legisla¬ of the present supports. There is tion in 1948 are a group of Re¬ even a small chance that the level publican New Dealers in the Sen¬ of these supports on the tempo¬ ate Agriculture Committee, head¬ rary extension may be scaled ed by the left-leaning Senator down. % * if George Aiken of Vermont. Their So, unless business gets worse, general report recommending the manent hard-headed something less Indiana Gas & Chemical out be Senator, act this year as be nomina¬ a has to the though the going a from nothing to enlarge /move lot of talk that Con¬ a elected until mittee lit imagine, to Even propose, * Committee Committee of would have to heave to and of 1948 may can¬ revision as which the HAnover 2-0050 bill cost limited to features little in revenue, Investment 10 Post Office Securities Square, Boston 9, Mass. Teletype BS 69 Telephone Hubbard 1990 this Teletype—NY 1-971 ' \ Firm Trading Markets FOREIGN SECURITIES Empire Steel Corp. Susquehanna Mills All Issues Pfd. & Common — Herbert H. Blizzard & Co. 123 South Broad revival favored I the Boys men states. the are season don't, the home building boom • After visiting with of Following the commodity break This think¬ before even slid. between its gang farm as apparent hardening mortgage credit. something seri¬ is course, establish ot time general decline in bank credit is « That good business is not of weeks, a Most trend. of t t? ously short too one inflation tion Two loans. industrial and possible a for Agriculture is the extension VI * there commercial in Title \ gress contra-seasonal drop House . econo¬ has been cocked up on the member bank reports, a actually gets Somebody profess suspenders!" my it market the and building two disclosing keep steps. Many eye last I 'S'— out of the Depart¬ Labor secondary a course loans to and ments. At the moment loans business. an where 10% boost in physical Commerce immediate to the as bank salmon sandwiches your volume forecast last fall by FHA's unanim¬ government among of anti-deflation unless the commod¬ counteract ity reluctant no think he wants it—if he doesn't of & # There is not complete mists if you'd keep than the Reserve Federal rule that the nomination, it would be un« wish that's secondary reserve plan. >{s worm from the "I substitute for the dead now Board gin to speculate on the possibility that who high-cost-of-living the blessing It is supposed to ready to gather in the delegates like In particular the leaders reserves, avowed Committee, until several days ago were disposed to clear the way for an increase in banks' cash legal merely if grains hit their support as giving is the up Watch for the President to be¬ a didate grain in fall the the by issue. 1940, the candidate. parts of the Truman program as insurance against being burned out the demand for enactment of his anti-inflation program. Yet just wants to work quietly and even pre-convention panic, a Senator, Michigan without might have hooked on to some • ing gin to have to Prior • between Senator the personal cold shoulder to everybody who in prices there was an outside chance, should the cost of foods have continued rising, that the , as the tug of war That was pret¬ inflation program. they fear a repetition 1929-30 or any other than 1920 senior Michigan just about the the rates Taft and Governor Dewey. markets will resume the rise and ty well slated for the ash can any¬ may even press their former way. The market slump practi¬ peaks. They fear this prospect cally guarantees its demise. more ;over Senator top dark horse to get the nom¬ ination in the event of a tie in Prpbably the most definite bear¬ the grain great deal of dis¬ the "strange Vandenberg." a here of Generally ing which the commodity market break has had on anything has been on the President's anti- after have is to GOP * # of in¬ fear that speculators their losses, There public psychology of deflation. # not cussion case observe- In other is still more danger There all They say. without pass¬ as an encourager only to vote but to work for that party. parenthetically that there is al¬ ways the danger that public psychology will make a situation which underlying factors would not themselves permit. Only one or two fear that the /'house of scene. if all most sufficiently established to work a revolution in the Washington business underly¬ what al¬ ing power. There is no ing weakness. That is relief tax ing it in 1948, There is the large purchas¬ age. become will about, come business private belief of the top government economic think¬ ers. They all point to strong sus¬ taining factors. There is the meat shortage, the housing shortage, the fuel shortage, the gas short¬ unanimous stay down for quite a and more impossible of achievement this year. Still a possibility: That the GOP will wrap up a package of considerably^ drop levels price business tax relief is St, Philadelphia 9, Pa. Clear thru—-Montgomery, Scott & Co. New York & Philadelphia LEWIS &ST0EHR} r.ARI MAMS 4 r.O. inc. FOREIGN SECURITIES Incorporated <*PFPT A T Established 1026 80 Broad St. New York 4 Telephone: DIgby 4-0985-6-7-8 50 Broad Street Hill, Thompson & Co., Inc. Markets and Situations New York 4, N. Y. .AFFILIATE: CARL MARKS & CO. Inc. CHICAGO for Dealers 120 Broadway, New York 5 Tel. REctor 2-2020 Tele. NY 1 -2660 v Volume 167 Number 4674 THE COMMERCIAL & FINANCIAL CHRONICLE Bond Traders Club oi Star C. Koerner, Mitchell, Hutchins & Co., Chicago, President elect of the Bond Chicago; Lawrence N. Marr, E. H. Rollins & Co., Chicago, retiring Traders Club of President Chicago Paul I. Moreland, Moreland & Co., Detroit; Lawrence N. Marr, E. H. Rollins & Co., Chicago;' R. Victor Mosely, Stroud & Co., Philadelphia, President of the National Security Traders Association ~ D. F. Comstock, Comstock & Co., Chicago; Co., Chicago Chas. G. Scheuer, Scheuer & Co., Chicago Moelman, Spencer Trask & Co., Chicago; John Wasserman, Asiel & Co., New York City; Toge V. Johnson, First Boston Corp., Chicago Harry C. Vonderhaar, Westheimer & Co., Cincinnati; Richard Thayer, Fred Latscha & Co., Cincinnati; J. E. Bennett, J. E. Bennett & Co., Inc., Cincinnati; Edw. E. Par¬ sons, Wm. J. Mericka & Co., Cleveland; Franklin O. Loveland, Field Richards, Cin¬ cinnati; John W. Bunn, Stifel, Nicolaus & Co., St. Louis Alfred A. Harmet, A. A. Harmet & Co., & Chicago; Elmer J. Giesen, David A. Noyes Co., Chicago; Walter W. Prosser, J. P. O'Rourke & Co., Chicago; John D. Stillwell, Kidder, Peabody & Co., Chicago - Fred R. Tuerk, Cruttenden & Co., Chicago; H. Terry Snowday, E. H. Rollins & Sons, Detroit; William B. Healy, Comstock & Co., Chicago; A. C. Sacco, Detmer & 1 E. J. Pictorial Insert I Don W. Detroit; Miller, McDonald-Moore & Co., Rice, Irving J. Rice & Irving'J. • Co., St. Paul Gus M. Benson, Hulburd, Warren & Chandler, Chicago; Larry A. Higgins, Hulburd, Warren & Chandler, Chicago; E. L. Kent, Kneeland & Co., Chicago Paul Yarrow, Clement, Curtis & Co., Chicago, Vice-President of the N. S. T. A.; Collins, Julien Collins & Co., Chicago, President of the I. B. A.; Lawrence Marr, E. H. Rollins & Sons, Inc., Chicago, President of Bond Traders Club of Chicago; John L. Canavan, Rauscher, Pierce & Co., Dallas Julien H. N. James F. Jacques, First Southwest Co., Dallas; W. «T. Kitchen, Kitchen & Murphy, Chicago THE Pictorial Insert II Hosts COMMERCIAL as & FINANCIAL Thursday, February 19, 1948 CHRONICLE NSTA Tri-City Parties Hicks & O. D. Gr.ffin, Lord, Abbett & Co., New York City; Graham Walker, National lion Bureau; New York City; James L. Canavan, Rauscher, Pierce & Co., QuotaDallas Harry L. Nelson, Blyth & Co., Inc., Chicago; Wm. H. Marshall, The Marshall Co., Milwaukee; Joseph T. Fuller, Wm. A. Fuller & Co., Chicago ■ Howard L. Davidson, Zippin & Co., Inc., Chicago; Glenn Pierce, Western Chicago; Geo. D. Parise, Fred W. Fairman & Co., Chicago Union, John D. Stillwell, Kidder, Peabody & Co., Chicago; James W. Cunningham, Price, Chicago; Martin Magee; H. M. Byllesby & Co., Chicago." Leonard cago; Friedman, Boettcher & Co^ Chi- Herman Mell, Merrill Lynch, Pierce, Fenner & Beane, Chicago . james H. Murphy, Kitchen & Murphy, Chicago; Wm. T. Schmidt, Laird, Bissell Meeds, New York City; J.'Berges Reimer, Berwyn T. Moore & Co., Louisville Hugh J. O'Connor, Betts, Borland & Co., Chicago; Edward J. Kelly, Carl M. Loeb, & Co., New York; Jules Fellegi, Farwell, Chapman & Co., Chicago; R. Donald Jacobson, Floyd D. Cerf & Co., Chicago Wm. P. Rhoades Fred H. Gray, J. Walter Thompson Co., Chicago; Richard A. Gottron, Gottron, Rus¬ Co., Cleveland; C. J. Odenweller, Securities & Exchange Commission, Cleve¬ land; Ralph Jones, E. H. Rollins & Sons, Chicago; Harold Gibbs, J. Walter Thompson Co., Chicago (standing) sell & Robert & Ralph S. Longstaff, Rogers & Tracy, Ch,cago; Evar L. Linder, Panne, Webber, Jackson & Curtis, Chicago Springer, Carl Marks & Co., Chicago; of Chicago; John W. Clarke, John F. Shields, Bear, Stearns & John H. Grier, First National W. Clarke, Inc., Chicago Co., Chicago; Patrick J. Cummings, Bear, Co., Chicago; Lyle F. Eikelbarner, Country Life Insurance Co., STANDING: Carr Payne, Cumberland Securities Corp., Nashville; O. H. Stearns First & National Bank Chicago; Geo. Wendt, First National Bank J. Knight, Blyth & Co., Inc., Chicago of E. Bank Chicago Strong, of Chicago; Volume 167 Number 4674 THE COMMERCIAL & FINANCIAL CHRONICLE Pictorial Insert III Open in Chicago, February 4th Morton A. Cayne, Cunningham & Co., Cleveland; Howard C. Morton, McMaster Hutchinson & Co., Chicago Wm. Noonan, Continental National Bank of Chicago; J. W. Day, C. J. Devine & Co., Chicago; Herbert Meyer> Continental National Bank, Chicago; W. C. Jones, C. J. Devine & Co., Chicago; Lee H. Ray, Continental National Bank, Chicago; Chet. Mayer, C. J. Devine & Herman Tornga, DeYoung-Tornga & Co., Grand Rapids; Roy F. Delaney, Smith, Hague & Co., Detroit; Neil DeYoung, DeYoung-Tornga & Co., Grand Rapids; Glenn Pierce, Western Union, Chicago Thomas E. King, Thomas E. King & Co., Chicago; & Oliver B. Scott, Maxwell. Marshall Co., Los Angeles; J. F. Stephens, Herrick, Waddell & Co., Inc., Kansas City, Mo.; T. R. Montgomery, Glore, Forgan & Co., Chicago Robert A. Podesta, Julien Collins & Co., Chicago; D. Stephen A. Bachar, Hirsch & Co., Chicago; Morey Sachnoff, Straus & Blosser, Chicago , Herbert H Blizzard '& ~ Herbert H. Blizzard Co., Philadelphia s ; Co., Chicago Parker Calahan, Armour & Co., Chicago; Harry O. Valleau, Harry O. Valleau & Co., Chicago; B. L. Decheine, J. M. Dain & Co., Minneapolis; Byron E. Karies, Merrill Lynch, Pierce, Fenner & Beane, Minneapolis •' Geo. W. Schultz, Chesley & Co., Chicago; Arthur R. Sawers, Chesley & Co., Chicago; John C. Rogers, Hickey & Co., Chicago; Arthur E. Farrell, H. M. Byllesby & Co., ' Chicago; Timothy A. Collins, Daniel F. Rice & Co., Chicago (standing) . Robert L. Erb, Green & Erb, Cleveland; Howard J. Elbe, Wm. J. Mericka & Co., Cleveland; Don W. Miller, McDonald-Moore & Co., Detroit Herbert Petty, Equitable Securities Corp., Nashville; Lloyd E. Lubetkin, Seligman, Lubetkin & Co., New York; Milton J. Isaacs, Straus & Blosser, Chicago THE Pictorial Insert IV COMMERCIAL & FINANCIAL CHRONICLE Thursday, February 19, 1948 More Than Six Hundred Guests Geo. cago; Smith. First Securities Co., ChiJohn E. Yates, Holmes, Yates & Co., Harvey, 111. A. Wm. A. Nelson, Bear, Stearns & Co., Chicago; Patrick J. Cummings, Bear. Stearns & Co., Chicago; J. Berges Reimer, Berwyn T. Moore & Co., Louisville; Ralph Randall, Mason, Moran &.Co., Chicago; Geo. Petrie, Brown Bros. & Harriman, Chicago Thompson M. Wakeley, A. C. Allyn and Company, Inc., Chicago; Herbert J. Burke, Rogers & Tracy, Inc., Chicago James F. Gallagher, Thomas E. King & Co., Chicago; Chas. J. Hofer, Ernst & Co., Chicago; Geo. Petrie, Brown Bros. & Harriman, Chicago; Harvey R. Koontz, Brown Bros. Harriman & Co., Chicago; Chas. G. Scheuer, Scheuer & Co., Chicago - James W. Frank Herman, First National Bank of Chicago; Elmer W. Hammell, Caswell & Co., Chicago; Ray W. Young, Remer, Mitchell & Reitzel, Chicago; Don H. Anderson, First National Bank of St. Paul; Hugh J. O'Connor, Betts, Borland & Co., Chicago B. Scott, Maxwell, Marshall & Co., Los Angeles; G. Edward Slezak, Loewi & Co., Milwaukee; L. B. McElhiney, Loewi & Co., Milwaukee; Evar L. Linder, Paine, Webber, Jackson & Curtis, Chicago; Elmer W. Erzberger, Smith, Burris & Co., Chicago Charles Carey, Harris Trust & Savings Bank, Chicago; John A. Oliver Harry G. Williams, Quail & Co., Davenport, Iowa; J. F. Marquardt, Wm. Fuller & Co., Chicago Walter Cruttenden, Jr., Cruttenden & Co., Chicago; Paul Goldschmidt, Pacific Co. of California, Los Angeles; Walter W. Cruttenden, Cruttenden & Co., Chicago Cunningham, Hicks & Price, Chicago; Carmen G. King, Saunders, King & Co., Toronto; Clifford H. Anderson, Hicks & Price, Chicago Kelly, Smith, Barney & Co., Chicago; Stanley Schwiech, J. P. O'Rourke & Co., Chicago; Leo E. Brown, Asiel & Co., New York City Edward H. Welch, Sincere & Co., Chicago; Henry P. Pulver, McMaster, Hutchinson & Co., Chicago; Audran J. Cavanaugh, Wm. A. Fuller & Co., Chicago; James H. Murpny, Kitchen & Murphy, Chicago; Frank G. Burch, Kneeland & Co., Chicago Arthur E. Engdahl, Goldman, Sachs & Co., Boston; James Duffy, Paine, Webber, Jackson & Curtis, Boston; Jay L. Quigley, Quigley & Co., Inc., Cleveland Volume 167 Number 4674 THE COMMERCIAL & In Record Audran J. & Cavanaugh, Wm. A. Fuller & Co., Chicago; Leo J. Doyle, Doyle, O'Connor Co., Chicago; James H. Murphy, Kitchen & Murphy, Chicago; Ed. L. Kent, Kneeland & Co., Chicago; E. A. Stephan, Fred W. Fairman & Co., Chicago A. L. Simmons, Mason* Moran & Co., Chicago; Michael L. Dary, Chicago; J. F. Partridge, Welsh, Davis & Co., Francis I. duPont & Co., Chicago; Ed. E. Goodman, Bache & Co., Chicago FINANCIAL CHRONICLE Pictorial Insert V Attendance Fred J. Casey, Doyle, O'Connor ■& Co., Chicago; James P. Blaney, J. P. Blaney & Co., Chicago; Wm. H. Lane, Harris Trust & Savings Bank, Chicago; Earl C. Glosser, Thomson & McKinnon, Chicago John J. Colnitis, A. A. Harmet & Co., Chicago; Larry Sandberg, Norris & Kenly, Chicago; Alfred E. Anderson, Faroll & Co., Chicago; Geo. E. Cleaver, Lehman Bros., Chicago 1 Don N. Anderson, First National Bank of St. Paul; Preston V. Shute, Jameson & Co., Minneapolis; Ben J. McPolin, McDonald & Co., Cleveland Louis J. Sterling, Hirsch & Co., Chicago; F. S. Yantis, F. S. Yantis & Co., Chicago, Association; Wm. A. Anderson, Hickey A. K. Sparks, F. A. Carlton & Co., Chicago of the Illinois Securities Dealers & President Co., Chicago; Raymond Hofer, Ernst & Co., Chicago; Geo. R. Torrey, Kebbon, McCormick & Co., Chicago; Ray A. Maher, Kebbon, McCormick & Co., Chicago Wm> T Anderson, Goodbody & Co., Chicago; John W. Bunn, Stifel, Nicolaus & Co., T Matz? Harriman Ripley & Co., Chicago; Morris M. Moss, Morfeld, st# Louis; chas Moss & Hartnett, St. Louis; Ed. A. Leinss, Stifel, Nicolaus & Co., Chicago Wm Paul Meinert, Goshia & Co., Toledo; John J. Colnitis, A. A. Harmet & Co., Chicago; Linard Cooper, Goshia & Co., Toledo Henry P. & Co., Chicago; Arthur E. Engdahl, Goldman, Arthur D. Lee, Goldman, Sachs & Co., Chicago Meyers, Goldman, Sachs Sachs & Co., Boston; THE COMMERCIAL & FINANCIAL CHRONICLE Bond Traders Club of Kansas John ; Latshaw, Harris, Upham & Co., Kansas City; R. V. Mosley, Stroud & Co., Inc., Philadelphia; Paul Yarrow, Clement, Curtis & Co., Chicago; Michael J. Heaney, Jos. McManus & Co., New York City; Edw. H. Welch, Sincere & Co., Chicago; H. Frank Burkholder, Equitable Securities Corp., Nashville Clair S. Hall, Jr., Clair S. Hall & Co., Cincinnati; Paul I. Moreland, Moreland & Co., Strader, Taylor & Co., Lynchburg; Lawrence Marr, E. H. Rollins & Sons, Inc., Chicago; Oliver Scott, Maxwell, Marshall & Co., Los Angeles; Star Koerner, Mitchell, Hutchins & Co., Chicago Detro/t; Lud Strader, J. Dewey Land, Prugh, Combest Thursday, February 19, 1948 City & Land, Kansas City; M. D. Campbell; J. Belcher, Martin~Holloway-Pur cell, Kansas City; Earl Combest, Prugh, Combest & Land, Kansas City Bill Springer, Carl Marks & Co., Chicago; J. E. Kempton, $tern Bros. & Co., Kansas City; Frank W. North, Barret, Fitch & Co., Kansas City; B, F. Piercy, Stern Bros. & Co., Kansas City; Harry Coleman, H. O. Peet & Co., Kansas City; Francis Bertrand, H. O. Peet & Co., Kansas City \ ? W^y?:£>i% #&wty JZ oh£> T&mcm mmm: c*r fflfftizn* rito Wffrre/eTSftHqaer /force- /iuejHL , ^ F. Stephens, Herrick, Waddell & Co., Kansas City; Charley Hahn, Scherck, Richter Co., St. Louis; Don ■ /■'. ' ' Volume 167 Number 4674 THE COMMERCIAL & FINANCIAL CHRONICLE Pictorial Insert VII Entertain Visiting Traders Kneeland Jones, A. E. Weltner & Co., Kansas City; George Lounsbery, Waddell & Co., Inc., Kansas City; Fred Johnson, Barcus, Kendrick & Co., Corwin Liston, Hawley, Shepard & Co., Cleveland; Fred O. Milton Donald, Herrick, Chicago; Cloyes, Cruttenden & Co., Chicago; W. E. Davis, W. E. Davis & Co., Topeka W. McGreevy, Harris, Upham & Co., Kansas City, Mo.; Frederick H. MacBurke & MacDonald, Kansas City, Mo.; Carl A. Meyer, The Columbian Securities Corp., Topeka, Kansas Thos. A. Marneli, B. C. Christopher & Co., Kansas City; N. S. Land, Prugh, CornLand, Inc., Kansas City; Henry Oetjen, McGinnis, Bampton & Sellger, New York; W. E. Maher, Merrill Lynch, Pierce, Fenner & Beane, Kansas City; C. W. Lonsdale, Merrill, Lynch, Pierce, Fenner & Beane, Kansas City; Leonard A. White, Wahler, White & Co., Kansas City; T. F. Wagner, Harris, Upham & Co., Kansas City; John A. Charmley, B. C. Christopher & Co., Kansas City best & Ed. Mader, B. C. Christopher & Co., Kansas City; A. W. Stoenner Prescott, Wright, Wright, Snider & Co., Kansas City; S. Rickson; Howard Eble, Wm. J. Mericka & Co., Cleveland; Ben McPolin, McDonald & Co., Cleveland; Edward F. Otto, Dallas Rupe & Co., Dallas Snider Co., Kansas City; E. W. Pauly, Prescott, H. „ Ben Schifman, The Kansas City Star, Kansas City, Mo.; Robert Strauss, Strauss Bros., Inc., Chicago, 111.; Hay ward H. Hunter, George K. Baum & Co., Inc., Kansas City, Mo.; William W. Hogben, Harris, Upham & Co., Kansas City, Mo. Earle Gate; A. B. Woody, Beecroft, Cole & Co., Topeka; Bill Nelson, Bear, Stearns & Co., Chicago; Joe Ballisch, A. C. Allyn & Co., Inc.. Chicago; John Yontz; Wm. Pesell, Estes, Snyder & Co., Topeka C. W. Lonsdale, Merrill Lynch, Pierce, Fenner & Beane, Kansas City, Mo.; John A. B. C. Christopher & Co., Kansas City, Mo.; Thomas Bates Huffaker, Merrill Lynch, Pierce, Fenner & Beane, Kansas City, Mo.; Edward Mader, B. C. Christopher & Co., Kansas City, Mo. Charmley, Moment Musicale THE Pictorial Insert VIII COMMERCIAL With Lavish FINANCIAL Thursday, February 19. 1948 CHRONICLE Party February 5th Hogben, Harris, Upham & Co., Kansas F. H. McDonald, Burke & McDonald, Kansas City; Norman Conway, Shaw, McDermott & Co., Des Moines; J. F. Fogarty, Soden-Zahner & Co., Kansas City; Ted Honig, City; Wm. J. Dyer, E. W. Price & Co., Kansas City; Graham Walker, National Quotation Bureau, New York; Bob Strauss, Strauss Bros., Chicago; R. K. Sparks, Harris, Upham & Co., Kansas City Dempsey-Tegeler & Co., St. Louis; John C. Hecht, Dempsey-Tegeler & Co., Los Angeles; F, P. Barnes, H. O. Peet & Co., Kansas City; J. P. Sanden; A1 Siebert, Prescott, Wright, Snider Co., Kansas City, Mo. Earl W; L. B. Carroll, Prescott, Wright, Snider & Co., Kansas City; Emma Hall, Commerce Trust Co., Kansas City; Herb H. Blizzard, Herbert H. Blizzard & Co., Philadelphia; A. R. Silberberg, Merrill Lynch, Pierce, Fenner & Beane, Kansas City; Henry C. Welsh, Jr., Lilley & Co., Philadelphia; Walter Cole, Beecroft, Cole & Co., Topeka Pete Hunter, Geo. K. Baum & Co., Kansas City; Scribner, Pittsburgh; Jeanne Leitt; Wm. W. „ & Price, E. W. Price & Co., Kansas City; J. N. Russell, Gottron, Russell & Co., Cleveland; R. E. Fritz, Weld Chuck Fisher, Singer, Deane & & Co., Chicago; R. E. Fritz Investment Co., Topeka; George King, White, Fred Casey, Doyle, O'Connor & Co., Chicago; John Bunn,- Stifel, Nicolaus & Co., St. Louis Frank H. Jennings, Bonds, Incorporated, Kansas City, Mo.; Sam Sachn'off, First John V. LaBarge, Kugel, Stone & Co., New York City; McGreevy, Harris, Upham & Co., Kansas City; John F. McLaughlin, McLaughlin, Reuss & Co., New York City; Edw. L. Meyer, Harris, Upham & Co., National Bank, Chicago; Milton •Kansas City Fred ' Frank J. Snyder, Beecroft, Cole & Co., Topeka; Carl A. Meyer, Corp., Topeka; Ralph Harvey, Wahler, White & Co., Kansas Beecroft, Cole & Co., Topeka; Don A. Seltsam, Seltsam & Co., Jr., Lucas, Eisen & Waeckerle, Inc., Kansas Samuel Sachnoff, First National Bank, Chicago, 111.; Edward L. Meyer, Harris, Upham & Co., Kansas City, Mo.; John V. La Barge, Kugel, Stone & Co., New York, N. Y.; Jack Hecht, Dempsey-Tegeler & Co., Los Angeles, Calif.; Fred Cloyes, Cruttenden & Co., Chicago, 111.; William P. Springer, Carl Marks & Co., Inc., Chicago, 111.; Lawrence N. Marr, E. H. Rollins & Sons, Inc., Chicago, 111.; Standing up in rear: Columbian Securities City; C. F. Adelman, Topeka; Mark Lucas, City J. Casey, Doyle, O'Connor & Co., Inc., Chicago, 111. K. W. Gosman, Wahler, White & Co., Kansas City; Ben Schifman, Kansas City Star; J. D. Bjorkman, Commercial National Bank, Kansas City; Paul E. Cunningham, Bache & Co., Kansas City; Fred Armentrout, McDonald & Co., Kansas City; C. M. McDonald, McDonald & Co., Kansas City V Volume 167 Number 4674 THE COMMERCIAL' & FINANCIAL CHRONICLE Pictorial Insert IX Security Traders Club of St. Louis Mel Bert St. St. Taylor, Semple, Jacobs & Co., St. Louis; Henry Richter, Scherck, Richter Co., Louis; R. Victor Mosley, Stroud & Co., Inc., Philadelphia; Herb Blizzard, Herbert H. Blizzard & Co., Philadelphia Horning, Stifel, Nicolaus & Co., St. Louis; Chas. Hahn, Scherck, Richter Co., Louis; Oliver Scott, Maxwell, Marshall & Co., Los Angeles; Chris Newpart, Merrill Lynch, Pierce, Fenner & Beane, Chicago flpl ! i' Security Traders Club of St. Louis Presidents, past and present: (Left to right) standing: Herman Brocksmith, Stijel, Nicolaus & Co.; Henry J. Richter, Scherck, Richter Co.; William Darmstatter, Stifel, Nicolaus & Co.; seated: J. William Brady, J. W. Brady & Co.; Charles Hahn, Scherck, Richter Co., the newly elected President; R. Emmett Byrne, Dempsey-Tegeler & Co. COMMERCIAL THE Pictorial Insert X Winds Up & Thursday, February 19, 1948 FINANCIAL CHRONICLE Tri-City Event * , In the picture Right to left: (right to leftn Stijel, Nicoldus & Co., St. Louis; Michael J. Heaney, Jos. McManus & York City; Edward H. Welch, Sincere & Co., Chicago; C. T. Ayers, Taussig, & Co., St. Louis; John Latshaw, Harris, Upham & Co., Kansas City John Bunn, New Co., Day Moreland, Moreland & Co., Detroit; Leonard Vogel, Glaser, Vogel & Co., St. Louis; Paul Yarrow, Clement, Curtis & Co., Chicago; Charles Hahn, Scherck, Richter Co., St. Louis; R. Victor Mosley, Stroud & Co., Inc., Philadelphia Paul , ' r . : " • * \V ' * ■ . J * ir/<rA< < . | ; , • < * > iiy&s Joseph G. Petersen, Eckhardt-Petersen & Co., St. Louis; Lowell G. Newcomb, St. Louis Union Trust Co., St. Louis; Pierre Papin, Wm. F. Dowdall & Co., St. Louis; Henry C. Welsh, Jr., Lilley & Co., Philadelphia; R. A. Walsh, St. Louis In the Dempsey-Tegeler & Co., , .■< Dempsey-Tegeler & Co., St. Louis; Joe Bronemeier, Semple, Jacobs & Co., St. Louis; Walter C. Haeussler, Paul Brown & Co., St. Louis; H. L. Brocksmith, Stifel, Nicolaus & Co., St. Louis; J. F. Stephens, Herrick, Waddell & Co., Inc., Kansas City; M. D. Campbell, Commissioner of Securities for Missouri, Jefferson City, Mo.; Logan McKee, Herrick, Waddell & Co., Inc., St. Louis; David S. Matthew, Scherck, Richter Company, St. Louis * J& H 'WMi IlllSItffli H. Frank Burkholder, Equitable Securities Corp., Nashville; Norman E. Heitner, Blewer, Heitner & Glynn, St. Louis; Star C. Koerner, Mitchell, Hutchins & Co., Chicago; Larry Marr, E. H. Rollins & Sons, Inc., Chicago; Willis Summers, Troster, " Currie & Summers, New York Cleveland; Fred O. Cloyes, Cruttenden & Co., Chicago; Ben McPolin, McDonald & Co., Cleveland; Chas. F. F.sher, National Quota¬ Bureau, Inc., Chicago; Dick Walsh, Newhard, Cook & Co., St. Louis; Earle C. Gott, Geyer & Co., Inc., Chicago; Corb Liston, Prescott & Co., Cleveland; James C. Vacha, R. S. Dickson & Co., Chicago tion Cloyes, Cruttenden & Co., Chicago; Arthur Engdahl, Corb Liston, Prescott Fred H. M. Byllesby Goldman, Sachs & Co., Boston; ' m ' Howard J. Eble, Wm. J. Mericka & Co., picture: R. G. Mills, & Co., Cleveland; Arthur Farrell, & Co., Chicago; Arch Montague, W. E. Hutton & Co., Cincinnati, Ohio; Howard Eble, Wm. J. Mericka & Co., Cleveland Pi 4 John McLaughlin, McLaughlin, Reuss & Co., New York; Howard Morton, McMaster Hutchinson & Co., Chicago Herbert H. Blizzard, Herbert H. Blizzard & Co., Philadelphia; Clair S. Hall, Clair S. Hall & Co., Cincinnati; Lud A. Strader, Strader, Taylor & Co., Lynchburg, Va.; Jim Patke, G. H. Walker & Co., St. Louis Volume 167 Number 4674 THE COMMERCIAL In Gala Bob Mathews, G. H. Walker & Co., St. Louis; Henry Richter, Scherck, Richter Co., St. Louis; Ludwell Strader, Strader, Taylor & Co., Lynchburg, Va.; Fred John¬ son, & FINANCIAL Pictorial Insert XI CHRONICLE Style February 6th Ted Honig, Dempsey-Tegeler & Co., St. Louis; Milt Isaacs, Straus & Blosser, Chicago; Robert Strauss, Strauss Bros., Chicago; Larry Carroll, Prescott, Wright, Snider Co., Kansas City; Earl Hagensieker, Reinholdt & Gardner, St. Louis; Les Knickmeyer, Albert Theis & Son, St. Louis; Robt. M. Guion, Newhard, Cook & Co., St. Louis Bert Horning, Stifel, Nicolaus & Co., St. Louis; Paul Yarrow, Clement, Curtis & Co., Chicago Barcus, Kindred & Co., Chicago In Group watching floor show the picture: Ray Denyven, Fusz-Schmelzle & Co., St. Louis; Hi Neuwoehner, White & Co., St. Louis; Walter Hauessler, Paul Brown & Co., St. Louis; Rudy Graf, G. H. Walker & Co., St. Louis; Elmer Barkau, Taussig, Day & Co., St. Louis In the Dick picture: Sisler and Joe Garagiola of the St. Louis Cardinals; Joe Fisher, Peltason, Co., St. Louis; Clarence Maender, G. H. Walker & Co., St. Louis; Joe Ballisch, A. C. Allyn & Co., Chicago; Bill Brady, J. W. Brady & Co., St. Louis; Bill Nelson, Bear, Stearns & Co., Chicago; Ed Brockmeyer, Goldman, Sachs & Co., Tenenbaum Charles Hahn, Scherck, Richter Co., President of the St. Louis Club, introducing out-of-town guests 1 St. Louis Right to left: Arthur Farrell, H. R Byllesby & Co., Chicago; Oliver & Co., Los Angeles; Arthur Engdahl, Goldman, Sachs & Co., Boston; Willis M. Sum¬ mers, Troster, Currie & Summers, New York City M. Scott, Maxwell, Marshall Victor Mosley, Stroud & Co., Philadelphia; Henry McGinnis Bampton & Sellger, New York; Paul Moreland, Moreland & Co., Detroit; H. Frank Burkholder, Equitable Securities Co., Nashville Oetjen Gordon Scherck, Scherck, Richter Co., St. Louis; Milt Isaacs, Straus & Blosser, Chicago; John Hecht, DempseyTegeler & Co., Los Angeles; Clair Hall, Clair S. Hall & Co., Cincinnati COMMERCIAL THE Pictorial Insert XII between the present rate ference Refunding Project to Relieve Government Bond Market Support A (Continued from first page) the government market at bond artificial level. an policy is This by far the greatest single threat of further a our expansion of credit supply at gross and money is widesp.ead time when there a agreement, even by those who ad¬ vocate and pursue the policy, that bank reserves should not be ex¬ panded, and when the course of in¬ flation may even demand that the reserves be contracted. Each $1 bonds of million by purchased support, and the consequent fan¬ tastic expansion of the credit base. Support at the present time has two evident purposes—to prevent serious capital losses, for reasons of economic stability or of moral obligation, and to hold down the cost of debt service. The second is purpose false of example extreme an economy. (2) It would avoid large capital losses. Though some argue that institutions need not take these their bonds to losses if they hold they would, neverthe¬ less, have to carry them on their System increases bank re¬ serves by that amount and be¬ comes, therefore, the base for an maturity, approximate $6 million potential expansion in credit. We are thus reduce the with confronted the of dilemma support, or a possibly severe decline in the values of government bonds that would produce widespread capital market inflationary an their ment bond market without caus¬ ing panic or losses in asset values, we could at once remove a great inflationary threat and restore to the Federal Reserve System its of credit orthodox function con¬ Others have pointed out that public confidence in the solvency of these institutions might be impaired or destroyed, (3) It would increase the cost The total annual debt service cost is now about $5 Vs to 1/7 of the budget. The present annual interest costs on a total of $118.5 billion of mar¬ ketable Treasury bonds are slight¬ billion, or ly under $2% billion. If the prob¬ is only to keep all issues at A simple, logical, and realistic solution of the dilemma would seem to be ernment refunding of the gov¬ a at debt interest higher rates. rising. Government itself rates Interest Federal The has are partly met the reality by permit¬ ting the rate on its one-year paper to rise from the wartime-induced of 1% to'1%%, and in rate of % the past year has let the rate on eligible, taxable bonds rise on in¬ from maturities termediate 1%% to 1%%, and on long ma¬ over 2%%. turities from 2V&% to the "Barron's" time, same rate only eleven of the longer issues need refunding. The increase in cost interest nually. If the problem is to main¬ present prices on all issues, means premiums up to tain interest in crease In lows. risen from 2l/z% to 3%; in France, from 3% to 4% %; in Italy from 31/4% to 4%%; in Sweden and in Holland, the ^governments have stubbornly maintained a 3% rate in spite of vigorous opposition by business leaders, economists, and investors; in Switzerland, the rate has risen from 3% to 3%%; and in Canada, from 21/2% to slightly over 2%%, although support at The present 2%% rate on long-| , term government bonds is tedly artificially low. this for admit¬ We cannot all indebtedness of V2 on of 1%, the increase in debt serv¬ ice costs would be about $1^4 bil¬ This compares since increase of 1939 $936 million annually in the ex¬ panded general government ex¬ penditures by a thousand depart¬ Objections to Increased Interest Costs his In before statement the Joint Congressional Committee on the Economic Report, November 25, 1947, Mr. Eccles said, regard¬ ing the additional cost of debt service if rates were permitted to rise: "If that it might quence, the only conse¬ were be argued that would be justified because infla¬ tionary borrowings would cease. However, this is only one aspect matter. leaving Government securities to mestic suming Apart from infla¬ and an do¬ international, as¬ orderly world of multi¬ lateral trade and free internation¬ financial al which we transactions, are toward striving, will force If the monetary our authorities cannot, without monstrously mon¬ etizing the entire goverment debt, indefinitely maintain the 2 %% In the free play of the be the of process variable forces in the Treasury would market, confronted with continuing a puzzle in all of its constantly re¬ current refunding operations. It could not tell from day to day at what price it upward. ties. It would be entirely at the mercy of uncontrolled factors in the market, if, indeed, conditions did not become so confused and level, this is the best time to make the ly any refunding operations." Admirable Effects ♦ An the of Refunding offer to present holders to of privilege of exchange for iden¬ tical bonds rates up bearing higher interest to 3% on long-term bonds, if that is the present real level, would have the (1) Most importantly, it would remove some, ties and as the necessity of market or be deter¬ continuous, rigid cannot price without not government supporting its own market, can foresee at what price it will sell its securities one year hence, let alone five or ten No one, ity insulated vacuum in fairs lives the the all from financial af¬ economic and other of moreover, Government secur¬ do not exist in a hence. markets years Against increases in debt serv¬ costs, at present possibly as low as $250 million and as high as $1V4 billion annually, must be weighed the larger increases in ice to avoid the uncertain¬ vicissitudes of the fu¬ ture, it is questionable whether it is possible and to economic piecemeal. regulate Wholly whether we economies even sire have whether in this financial affairs we of men apart the in nations and of costs to with each in cost $118.5 billion bonds, there are of marketable $52 of non-marketable Of these, the larg¬ amount, $31 billion, is in the billion savings bonds. est If the real market Series E bonds. is 3% the toto, have the country to do to and de¬ so, it of twenty-year bonds, the on on these ten-year savings bonds would still be more attrac¬ marketable on ones maturity. Although of comparable the overall annual return on these the 2.9%, is bonds re¬ demption values are such that af¬ ter the first year their retention is annual 3.15% a return maturity; after the fifth year (when their maturity is five years) it is 4%. This means that, after five years, the redemption value of the E bond is such that the holder who cashes it would to small turity. ing in the amount of $3 billion* have a lower retention value. Af¬ first the to return seven the rate of is 2%% and because of ther below it, not only the natural trend of money rates, years) it is 3Va%. Series G billion, of pay 2 V2 % below values redemption redemption values are such These that the bonds offer future to maturity Series F be bonds; that is, after five there would advantage in cashing them no unless bond similar to those of the for example, years, yields one could buy a seven-year yielding over five years the After 3*4%. future yields on all three series increase still further. It is most market rate is so able to unlikely that the real government bonds on high that it would be profit¬ to cash these reinvest the able issues of savings bonds comparable ma¬ G bonds came close to that possi¬ upon the cash, not Then dollars. its that in shall have we stage of inflation—the final in of debt service must be The relatively small increase the cost weighed against the danger of courting that final stage of infla¬ tion and against the immeasur¬ able of costs such in disaster a cost of debt serv¬ increase in the ice is too price to pay to avoid further gross monetary in¬ great a System the credit control which the Federal Reserve Reserve eral Act here, of concerned with the question whether course, the System should sell bonds now in the open market to contract credit. But we if such action observe that may becomes neces¬ ever if any, on higherbonds would be less than losses, sary, coupon the present low-coupon bonds. Also, once the System is relieved of the obligation to support the on market, the mere restoration of its on the dif¬ grade bond average. It is possible that even this common the to contract credit may be sufficient psychological deter¬ rent to excessive credit expan¬ impermanence because of material and of their ily of rising costs sequel of an inflationary climax, is inevitable, rapid defla¬ which tion. On the other hand, mere existence of the make its use unneces¬ of confidence felt in the skill with which the monetary au¬ thorities will execute their control of credit so of Increased Interest One important result would (7) be return to to investment debt necessary the price rise with little or no of compensation. The plight of our universities, for ex¬ ample, is serious. preservation through the use own judgment. It has been estimated roughly that the their commercial sets alone banks be would shared cordance with the scale of Interest on distributed to in ac¬ our tax the cember 24, 1947, when they sud¬ denly lowered price pegs. Invest¬ ment managers cannot who are an as capital formation, which strengthening to¬ greatly day. such a a process needs Over the years, therefore, distribution of taxes is of high, long-term country's whole benefit to the in policy changes, opportunity for exercis¬ ing their judgment when markets are pegged. Nor can they dump neither voice the nor Market would assets an of cause a them employ sudden markets. These have been falling for the past two independently of the gov¬ of the government judgment re¬ may bonds, depending upon the varied requirements of different institu¬ tions, and upon market changes. When long-term bonds are prom¬ ised support, there may be press¬ ing invitation to banks shift But not into to from short to long maturities. if such artificial stability is banks shift may maturities short and the leave to investing institu¬ tions which require less liquidity. longer ones Precision Not Essential It may mine difficult be $118.5 billion deter¬ bonds would It is not our termine the to precisely the levels at which the purpose exact settle. here to de¬ rates at which refundings should be made. The soundness of the program, if it is sound, does not depend upon mary object is to withdraw gov¬ ernment support and to release the bonds to present market real¬ sell at about par, one in quire, for example, and opportuni¬ ties may arise, for periodic shifts of holdings between long and short maturities of government ities in such is war¬ money bonds, municipal cline the to such extent that they are compelled fall in the corporate and state and bond by of their because swelled are creation time section troublesome the precision with which the new rates are determined. The pri¬ economy. Corporate and Municipal Bond (5) It be respon¬ sible for such losses, for they have in¬ individuals, important source of well as as¬ De¬ on public those vestors, public and private insti¬ tutions, lost $400 million by the action of of the Reserve authorities assured, The increase in the cost of debt is man¬ the responsibility for capi¬ agers Investment Payments debt tip too far in not to as the direction of deflation. to . structure. stock prices would sensitively reflect the a service expanded require which working capital and new financ¬ ing, and because of the sudden investments, Distribution On Present valu¬ discount heav¬ price level.. ations of earnings such power may re¬ there would greater confidence than there is now in the stability of profits, as a result of the prospect of a their The on interpretation, power Their de¬ downward loss figured notes. the same group of stocks greater by as much as 5%. The yield on "Barron's" 50stock average is about 2%% greater than that on its 10-highpresent a part of this is funded, the extra cost is to be consisting and and on is of not are loss debt, certificates billion that tal intended. We If unfunded bills, total of $47.7 bonds, yield flation and to restore to the Fed¬ of of a stocks is actually on high-grade at other times the than less degree this country. pressures on serious a way that they will in order to avoid capital losses. Thereafter, the Federal Reserve System ought to use its huge pow¬ ers through a policy of flexible stabilization permitting orderly losses in price to There is At times the groups. grade common labor, general flight from money. the latter. The real portfolio values, another for the debt reform, would be difficult to estimate, for many of them would be only a by raising the future redemption prices. two dividend yield on a group of high- stable of public danger ernment bond market. call the on loss of the artificial stability of the government bond market, but in the future worth of the be confidence, prevent sudden yield from bonds, there is no fixed relation between the yields of the debt accelerates there will years a are be bility, they could be adjusted, to Treasury for $18 billion in stocks comparison with a moval of the inflation threat. policy of funds in market¬ Even if the Series F and on market supnort is self-aggravating. As monetization The means cost, except in the event of death. the when times are purchased stocks would advance of whom have lost real income in maturity a there port itself, which is inflationary. annually, but have (with Stock Market (6) It should have little, if any, effect on common stocks. Though but also because of the very sup¬ interest at the maturity bonds, outstanding in the amount rate we (4) The proposal to refund the now at higher rates, where to withdraw market support, would increase the earn¬ ings of banks, and the income of insurance companies, institutions, and of individual bondholders, all year, after five years cash which living sary. holding the bond to ma¬ Series F bonds, outstand¬ of $15 advance and the real market will sink fur¬ sion. of con¬ expect if we continue ex¬ panding our money supply. This expansion must result if we con¬ tinue to support a market which is already above its real level bet¬ ter than 4% to do better than he have to reinvest his money at ter of must men. In addition to the from wisdom millions annual We must decide whether a 20% turity. the desire may be, manage following results. price, a a even it could sell its securi¬ chaotic as to demoralize complete¬ adjustment. Alternative Risks would by ments, bureaus and agencies. several years. requirements, the at floated be increase of capital cannot country this securities in prime value hope to maintain it for the next tion, by logical inference they would mean, that the first of the mean, as discount the extra cost to the Government level is tentative. latter c^st would be $592 million an¬ nually. Finally, to take a most unlikely extreme of an overall annually. risen price of a new issue. The real problem is whether the securities can be floated at' all. Mr. Eccles' remarks should not be taken to purpose an have exact before fixing the tive than that with bonds last hour until the wait sometimes ditions been falling sharply, may fall fur¬ ther, though not necessarily. might be lk of 1 % higher or more. yield lion artificially induced Great Britain, it has professional investor knows. The most astute judges of market con¬ eight points, then, assuming roughly an increase ot % of 1% on all outstanding bonds, the in¬ to over 3%. their prevent the flotation of securities, as every investment banker and which bond yield has risen government purpose about $250 million an¬ would be high-grade from this for from 2%% Throughout the world, rates on a continuing price puzzle 1 in refunding operations, the uncertainty of price does not bonds, longest the for assuming then, better, or 3% are As regards the support. of debt service. other, related net also regulated. and the real rate, which of 21/2% sumers conditions mined Debt Service single arti¬ a of multitude a at¬ any must fail so long ficial condition that with resultant panics.- par Refunding Proposed the impair and lem trol. In assets their capital. losses. If a way can be found of with¬ drawing support from the govern¬ This would books at the market. to maintain tempt as that admitted be must Thursday, February 19, 1948 FINANCIAL CHRONICLE & of as pay paper profits and not a stocks, which in lieu of have a policy of rigid price-fixing. The new policy should assure not only a continu¬ ously orderly market, but also, in the present and in the regards actual cost. Preferred changes, cessful future, suc¬ refundings at going rates.